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https://www.courtlistener.com/api/rest/v3/opinions/2260525/ | 632 F.Supp. 602 (1986)
UNITED STATES of America, ex rel. Ramon LaSALLE, Petitioner,
v.
Harold J. SMITH, Superintendent, Attica Correctional Facility, Respondent.
No. 84 CV 2044 (ERK).
United States District Court, E.D. New York.
April 11, 1986.
Ramon LaSalle, pro se.
Elizabeth Holtzman, Dist. Atty., Kings County, Brooklyn, N.Y., for respondent.
OPINION AND ORDER
KORMAN, District Judge.
Petitioner, Ramon LaSalle, is presently serving a term of imprisonment of twenty-five years to life pursuant to a judgment entered in the Supreme Court of the State of New York convicting him of murder in the second degree. The pro se petition for a writ of habeas corpus, which he has filed pursuant to 28 U.S.C. § 2254, mirrors the brief filed by his assigned counsel on appeal from the judgment of conviction.[1]
Petitioner alleges that he was not adequately and effectively represented by counsel. Specifically, he points to the failure of trial counsel (1) to move to suppress certain evidence, (2) to demand a bill of particulars, (3) to request a so-called "Sandoval" hearing, and (4) to call certain witnesses. Petitioner also alleges that a prosecution witness was improperly precluded from testifying to an exculpatory statement made by petitioner, and that the evidence was insufficient to support his conviction.
Because petitioner's claim regarding the sufficiency of the evidence is plainly without merit,[2] and because the holding excluding petitioner's exculpatory statement as hearsay involves solely a question of the *603 application of New York law,[3] the only issue which remains to be addressed is petitioner's claim that he was denied the effective assistance of counsel. The principal predicate for the latter claim involves the failure of counsel to move to suppress certain clothing belonging to petitioner. This evidence provided critical corroboration for the principal prosecution witnesses, the credibility of whom was subject to attack.
After reviewing the transcript of the trial and the relevant New York law, it is apparent that petitioner failed to exhaust the only effective remedy available to vindicate the claim he presses here. In People v. Brown, 45 N.Y.2d 852, 410 N.Y.S.2d 287, 382 N.E.2d 1149 (1978), the Court of Appeals held that "in the typical case it would be better, and in some cases essential, that an appellate attack on the effectiveness of counsel be bottomed on an evidentiary exploration by collateral or post-conviction proceeding brought under CPL 440.10." Id. at 854, 410 N.Y.S.2d 287, 382 N.E.2d 1149. This is so because it is frequently impossible to determine from the record on direct appeal whether counsel was justified in taking the course of action which forms the basis for the claim that his conduct fell below the minimum required by the Constitution. United States v. Aulet, 618 F.2d 182, 186 (2d Cir.1980). Accordingly, unless the record is clearly sufficient to enable it to resolve the merits of the claim, the New York Court of Appeals, like the Court of Appeals for the Second Circuit, will not entertain claims attacking the adequacy of counsel without an evidentiary exploration of the issue in a collateral proceeding. People v. Brown, supra; United States v. Aulet, supra; United States v. Cruz, 785 F.2d 399 (2d Cir.1986).
The record on direct appeal, which is detailed below, demonstrates that this case is precisely the kind of case in which it was "essential that an appellate attack on the effectiveness of counsel be bottomed on an evidentiary exploration by collateral or post-conviction proceeding brought under CPL § 440.10." People v. Brown, supra, 45 N.Y.2d at 854, 410 N.Y.S.2d 287, 382 N.E.2d 1149. Petitioner's failure to seek an evidentiary hearing pursuant to CPL § 441.10 made it impossible for the Appellate Division and the Court of Appeals (to which he unsuccessfully sought leave to appeal) to resolve his claim. Under these circumstances, the petition for a writ of habeas corpus is dismissed for failure of petitioner to adequately exhaust state remedies.
I
At the trial, certain clothing belonging to the defendant was admitted into evidence. Petitioner's counsel did not file a suppression motion. When petitioner himself moved to suppress the evidence, his motion was denied because "according to defense counsel and the results of his investigation, the so-called common law wife [of] this defendant voluntarily surrendered to the police [the clothing] and since there has been no claim of an illegal seizure, a suppression of physical evidence hearing under these circumstances is not required" (Tr. 13). The "concession" by defense counsel to which this ruling alluded was the statement that (Tr. 10):
[W]hile on the surface it might seem we should make a motion to suppress that, nonetheless his woman voluntarily gave those to the police officers.
A reading of the trial transcript leaves considerable doubt as to the circumstances under which the clothing came into the possession of the police. Despite the statement by defendant's counsel that the defendant's common law wife, Carmen Torres, "voluntarily gave" the clothing to the police, Ms. Torres herself apparently told an investigator retained by defendant's *604 counsel that the police forced their way into the house (Tr. 179):
Q. And you told him, also that the police forced their way into your house with, showed their shields and searched the place; isn't that right?
A. Yes, because Ramon told me to say so.
Q. And where was Ramon at this time?
A. In jail.
Q. And how did you talk to him if he was in jail?
A. Each time I would go to the jail he would say to me not to say anything.[4]
The testimony of Detective DeMartin with respect to the manner in which he obtained the items of clothing offered in evidence is also unclear and contradictory. Before the grand jury, Detective DeMartin testified that he "took a pair" of pants belonging to the defendant from the apartment of Mr. LaSalle and Ms. Torres (Tr. 116). At the trial, however, he testified that the pants and a shirt were brought to him at the station house by Ms. Torres (Tr. 118, 120):
A. According to my DD-5's and my recollection she brought the pants in with my two partners. I got an official record here, my notes.
* * * * * *
Q. Now, the shirt that is marked for identification, did you take that from the apartment?
A. No sir, that came to the office with the pants.
Moreover, despite the fact that petitioner's counsel "conceded" that a suppression hearing was not warranted because Ms. Torres had "voluntarily" given the items of clothing to the police, his conduct at the trial was inconsistent with a belief that the clothing had actually been turned over voluntarily. There, petitioner's counsel questioned both Ms. Torres and Detective DeMartin about the "search of the apartment." Specifically, in addition to eliciting the testimony quoted above, he asked Detective DeMartin whether he had conducted a search of the apartment and whether it was true that Detective DeMartin did not have a search warrant (Tr. 121).
Because the facts surrounding the manner in which the evidence was obtained were never developed at an evidentiary hearing, it is difficult to accept the argument of the District Attorney "that there was no basis on which a motion to suppress could have been granted and thus it was entirely reasonable for counsel to forego this gratuitious procedure," i.e., a suppression hearing (Richter Aff. p. 4). The principal support in the record for the claim of the District Attorney that "Carmen Torres, defendant's common-law wife, voluntarily admitted the police to the apartment and gave them defendant's clothing" (Richter Aff. p. 4) is a concession of petitioner's counsel which the record suggests may have been improvident. Moreover, further inquiry is justified not only by the circumstances discussed above, but by the facts that the consent to the search of a common residence, even if voluntarily given, would not necessarily validate the seizure of property which belonged to the defendant (in the absence of probable cause), and that the validity of the turnover of the defendant's clothing (assuming this occurred) could conceivably depend on the peculiar circumstances of the case. Coolidge v. New Hampshire, 403 U.S. 443, 490, 91 S.Ct. 2022, 2050, 29 L.Ed.2d 564 (1971) (upholding turnover of defendant's property occasioned by "a spontaneous, good faith effort by his wife to clear him of suspicion").
On the present state of the record it is impossible to know whether the failure to seek a suppression hearing, and the apparent sabotaging of the petitioner's own efforts to obtain such a hearing, was justified or whether it resulted from the incompetence of counsel. Likewise, it is not possible to effectively resolve all of petitioner's *605 other claims regarding the effective assistance of counsel without the benefit of an evidentiary hearing. The issue presented, therefore, is whether such a hearing should be held here or whether petitioner should be required to exhaust his remedies pursuant to C.P.L. 440.10 before seeking relief by way of habeas corpus.
II
While petitioner raised the issue of the competency of counsel on the direct appeal from the judgment of conviction and in his application for leave to appeal to the New York Court of Appeals, and while petitioner need not be compelled to make repetitious applications for relief, the relief petitioner sought by way of appeal in this case was simply the wrong remedy given the nature of his claim. The appropriate procedural vehicle, as the Court of Appeals held in People v. Brown, supra, was a "collateral or post-conviction hearing brought under C.P.L. 440.10." Surely, the same considerations of policy and practicality which underly the "exhaustion" doctrine are as much implicated when a petitioner chooses the wrong procedure to press his claims as when he fails to make any effort to obtain relief.[5]Dean v. Smith, 753 F.2d 239, 241 (2d Cir.1985).
Particularly apposite here is the holding of the Court of Appeals for the Ninth Circuit in Kellotat v. Cupp, 719 F.2d 1027 (9th Cir.1983). The petition for a writ of habeas corpus there was filed by a defendant convicted in Oregon. Oregon, like New York, provides "two distinct avenues for review of alleged errors, including constitutional violations." Kellotat v. Cupp, supra, 719 F.2d at 1030. Most trial errors must be raised by direct appeal to the Oregon Court of Appeals and are reviewable as a matter of right. A defendant who is unsuccessful there may then petition for discretionary review by the Oregon Supreme Court. The alternative procedure, "[f]or violations of a defendant's rights that occur after trial, or that require a further evidentiary hearing for their determination," including claims of ineffective assistance of counsel, is a statutory remedy by way of the Oregon Post-Conviction Hearing Act, Or.Rev. Stat. Sections 138.510 to 138.680 (1981). Id. (emphasis supplied).
The petitioner in Kellotat sought habeas corpus relief on the ground that he had been deprived of his right to counsel on direct appeal from the judgment of conviction, when the Oregon Court of Appeals granted the motion of his assigned counsel to withdraw and denied petitioner's application to appoint substitute counsel. Petitioner had sought and was denied discretionary review by the Supreme Court of Oregon of the order denying his application for the appointment of substitute counsel. The Court of Appeals for the Ninth Circuit held that the application for leave to appeal to the Supreme Court of Oregon, which is normally a prerequisite to seeking relief by way of habeas corpus, did not constitute a sufficient effort to exhaust petitioner's state remedies because the claim he had raised there was not "normally a subject of direct appeal" of the kind which the Oregon Supreme Court exercises its jurisdiction to review. Kellotat v. Cupp, supra, 719 F.2d at 1031.
Under these circumstances, the Court of Appeals concluded that, by failing to exhaust his remedies pursuant to the Oregon Post-Conviction Hearing Act, petitioner had not presented the Oregon Supreme Court with a fair opportunity to rule on the merits of his claim. Specifically, it held:
[I]n this case Oregon has provided an adequate and appropriate method for review of Kellotat's claim in the Post-Conviction Hearing Act. We need not decide whether the Oregon Supreme Court was without jurisdiction to entertain Kellotat's petition; it is enough that the state *606 statutory scheme and the Court's own policies militated against reviewing the issue at this procedural stage. That being the case, the mere presentation of the interlocutory petition to the Oregon Supreme Court did not create a fair opportunity for decision, and consequently did not authorize Kellotat to proceed to federal court without seeking a state post-conviction remedy.
719 F.2d at 1031.
This reasoning is equally applicable here. While petitioner raised his claim of ineffective assistance of counsel on direct appeal to the Appellate Division and in his application for leave to appeal to the New York Court of Appeals, "the state statutory scheme and the Court's own policies militated against reviewing the issue at this procedural state," i.e., on the direct appeal. Id. People v. Brown, supra, 45 N.Y.2d at 854, 410 N.Y.S.2d 287, 382 N.E.2d 1149. This being the case, "the mere presentation" of the ineffective assistance of counsel issue on direct appeal "did not create a fair opportunity for decision, and consequently did not authorize [petitioner] to proceed to federal court without seeking a state post-conviction remedy." Kellotat v. Cupp, supra, 719 F.2d at 1031.[6]
The holding of the Court of Appeals for the Second Circuit in Johnson v. Fogg, 653 F.2d 750 (2d Cir.1981), does not compel a contrary result. There, the District Attorney had not argued on direct appeal from the judgment of conviction that the defendant had chosen an inappropriate remedy for the consideration of claims dependent on facts outside the record. Because he failed to do so, the Court of Appeals held that the District Attorney was precluded from seeking dismissal of the petition for a writ of habeas corpus on the ground that petitioner's remedy "is to petition for a writ of coram nobis, and [that] the continuing availability of this state remedy bars habeas relief." 653 F.2d at 752. In so doing, the Court of Appeals relied on an earlier case in which it had held that, where the District Attorney does not rely on a procedural bar in the Appellate Division in that case the failure of the defendant to make a timely objection "this court will not `guard[] state procedural rules more vigilantly than the State itself does'." Id., quoting, Washington v. Harris, 650 F.2d 447, 452 (2d Cir.1981). Significantly, in that case Chief Judge Feinberg observed that, because the District Attorney did not rely on the defendant's procedural default and "answered on the merits" the argument raised by the defendant on direct appeal, the facts "fairly impel us to infer from the Appellate Division's silence that it did pass on the merits of the issue." Washington v. Harris, supra, 650 F.2d at 453. Accordingly, despite Washington's failure to make a timely objection, he was permitted to seek review of the claim in a habeas corpus proceeding.
The present case, unlike the case on which the Court of Appeals relied in Johnson v. Fogg, does not involve a procedural rule regarding the timely assertion of legal claims which the New York judiciary may exercise its discretion to waive, but the failure of a defendant to exhaust the only practical and effective procedure for litigating his claim. Indeed, it is difficult to reconcile the reasoning in Johnson v. Fogg, supra, with an earlier case in which the Court of Appeals, sua sponte, invoked the exhaustion doctrine where it had not been raised by the District Attorney "either below or on appeal." Wilson v. Fogg, 571 F.2d 91, 94 n. 5 (2d Cir.1978).
More significantly, Johnson v. Fogg is distinguishable from the present case because *607 Johnson was a case in which it was possible to resolve the issue raised by petitioner without an evidentiary hearing. The Court of Appeals for the Second Circuit did so, and there is every reason to assume that, in the absence of an argument by the District Attorney that petitioner had invoked the wrong remedy, the Appellate Division did so as well. In contrast, here it was not possible for the Appellate Division to rule on the defendant's effective assistance of counsel claim on the record before it. United States v. Aulet, 618 F.2d 182, 186 (2d Cir.1980).
Petitioner is, therefore, in the position of seeking habeas corpus relief without having afforded the New York state courts an effective "opportunity to set their own Constitutional houses in order before the power of the federal courts is invoked." Fielding v. LeFevre, 548 F.2d 1102, 1106 (2d Cir.1977). Under these circumstances, the fact that the District Attorney did not argue (in his brief to the Appellate Division) that a direct appeal was the wrong mechanism for raising an argument dependent on facts outside the record hardly justifies excusing petitioner's obligation to exhaust the most effective procedures and remedies that were available to him under New York law. Accordingly, petitioner is required to raise the effective assistance of counsel claim by way of a motion pursuant to C.P.L. § 440.10 before seeking habeas corpus relief pursuant to 28 U.S.C. § 2254.
The foregoing disposition of the petition makes it unnecessary to consider in detail petitioner's other complaints regarding the effectiveness of counsel, which are insufficient on the present state of the record to warrant relief.[7] Moreover, for the same reason, it is unnecessary to resolve the issue whether, even assuming that petitioner was deprived of the opportunity to invoke the exclusionary rule because of the incompetence of counsel, he may obtain relief by way of habeas corpus. Compare LiPuma v. Commissioner of the Department of Corrections, 560 F.2d 84, 93 n. 6 (2d Cir.1977), cert. denied, 434 U.S. 861, 98 S.Ct. 189, 54 L.Ed.2d 135 (1977), with Morrison v. Kimmelman, 752 F.2d 918 (3d Cir.1985), certiorari granted, ___ U.S. ___, 106 S.Ct. 59, 88 L.Ed.2d 47 (1985).
Accordingly, the petition is dismissed.
NOTES
[1] The judgment of conviction was affirmed without opinion by the Appellate Division on November 26, 1979 and petitioner's application for leave to appeal to the Court of Appeals was denied on December 20, 1979.
[2] The record includes testimony of two witnesses that petitioner confessed to the offense. This testimony, if credited by the jury, along with corroborating circumstantial evidence, plainly constituted evidence sufficient to sustain the conviction.
[3] Petitioner did not argue in his brief in the Appellate Division that the exclusion of this testimony constituted a violation of the Due Process Clause. Instead, he raised a frivolous claim under New York law which is not cognizable on a petition for a writ of habeas corpus. Mitchell v. Smith, 481 F.Supp. 22 (E.D.N.Y. 1979), aff'd, 633 F.2d 1009 (2d Cir.1980), cert. denied, 449 U.S. 1088, 101 S.Ct. 879, 66 L.Ed.2d 814 (1981).
[4] The apparent inconsistency between the answer to the first question and the last question was never reconciled.
[5] "The requirement that federal courts not exercise habeas review of a state conviction unless the state courts have had an opportunity to consider and correct any violation of federal law expresses respect for our dual judicial system and concern for harmonious relations between the two adjudicatory institutions." Daye v. Attorney General of the State of New York, 696 F.2d 186, 191 (2d Cir.1982) (en banc).
[6] This conclusion is supported as well by the holding of the Court of Appeals for the Second Circuit in Dean v. Smith, 753 F.2d 239 (2d Cir.1985). The only difference between the instant case and Dean v. Smith is that the remedy chosen by petitioner to exhaust his claim, a direct appeal, may be appropriate under certain circumstances. In Dean v. Smith, the remedy chosen by petitioner to exhaust his claim could not, as a matter of law, ever provide the appropriate avenue of relief for the claim he chose to raise. This distinction is not material where, as here, the record shows that a direct appeal was simply the wrong remedy for petitioner's claim. Kellotat v. Cupp, supra, 719 F.2d at 1031.
[7] Petitioner alleges that his counsel was ineffective because he did not request a bill of particulars or a "Sandoval" hearing, and because he failed to call certain witnesses. Petitioner's counsel explained on the record that he had already been provided with full discovery before trial and that a bill of particulars was unnecessary. Moreover, the failure to request a Sandoval hearing, seeking a limitation on cross-examination regarding his criminal record if he took the stand, People v. Sandoval, 34 N.Y.2d 371, 357 N.Y.S.2d 849, 314 N.E.2d 413 (1974), would be consequential only if petitioner had taken the stand and was impeached, Luce v. United States, 469 U.S. 38, 105 S.Ct. 460, 83 L.Ed.2d 443 (1984), or, possibly, if he alleged that he would have taken the stand had such a motion been made and granted. Lastly, petitioner's claim that counsel failed to call certain witnesses is undermined by the fact that, at the request of petitioner, his counsel made an application to adjourn the sentencing to give petitioner "a chance to locate and present these witnesses to the court." (Sent.Min. p. 3). The motion to adjourn the sentence was denied without prejudice to an application to set aside the verdict in the event "defendant can come up with ... any newly discovered evidence." (Sent.Min. p. 3). Petitioner's application for a writ of habeas corpus does not indicate when, if ever, he apprised his attorney of the existence of these witnesses or whether he has even located them to date. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260526/ | 123 Cal.Rptr.2d 551 (2002)
101 Cal.App.4th 12
COACHELLA VALLEY MOSQUITO AND VECTOR CONTROL DISTRICT et al., Cross-complainants and Appellants,
v.
CITY OF INDIO et al., Cross-defendants and Respondents.
No. E029531.
Court of Appeal, Fourth District, Division Two.
August 9, 2002.
Review Denied November 13, 2002.
Lisa Garvin Copeland for Cross-complainants and Appellants.
Lounsbery Ferguson Altona & Peak, Kevin P. Sullivan, Escondido; Alhadeff & Solar, Samuel C. Alhadeff, Cyril J. Dantchev and S. Douglas Kerner, San Diego, for Cross-defendants and Respondents.
OPINION
GAUT, J.
1. Introduction
Do cross-complaints filed in response to a reverse validation action [1] survive after the primary action has been dismissed because of lack of jurisdiction for failure to *552 serve it properly?[2] We hold that that jurisdiction over the cross-complaints was never completed and they should also be dismissed.
2. Factual and Procedural Background
On November 29, 1999, the City of Indio enlarged the Indio Merged Redevelopment Project Area by adopting Ordinance No. 1260. On January 26, 2000, plaintiff Coachella Valley Water District (Water District) filed a reverse validation action challenging Ordinance No. 1260. In particular, the Water District charged that the proposed amendment area was not physically or economically blighted or predominantly urbanized as required by the Community Redevelopment Law.[3] The named defendants included appellants Coachella Valley Mosquito and Vector Control District (Mosquito District) and Valley Sanitary. The Water District served and published a summons calling for interested parties to file a response by March 17, 2000. On that date, the Mosquito District and Valley Sanitary filed answers and also filed cross-complaints against three other named defendants, the City of Indio and the Indio Redevelopment Agency (collectively "Indio") and the County of Riverside (the County). The cross-complaints also allege the subject property was not urbanized or blighted. Both the complaint and cross-complaints accuse Indio of making a land grab to secure tax revenues.
Indio and the County made a motion to dismiss the Water District's complaint because the summons was not published with the required statutory language. The superior court denied the motion to dismiss and granted the Water District additional time to publish the summons. Indio then filed a petition for writ of mandate seeking review of the court's denial of its motion to dismiss. This court granted the petition on October 23, 2000, and directed the superior court to grant Indio's motion to dismiss the Water District's reverse validation action. We expressly declined to give any opinion on the continuing viability of the cross-complaints.
Indio, joined by the County, then moved to dismiss the Mosquito District and Valley Sanitary's answers and cross-complaints. The court granted the motion and dismissed the answers and the cross-complaints with prejudice. The court entered judgment in favor of Indio and the County. Both Valley Sanitary and the Mosquito District now appeal.
3. Discussion
We ordered the superior court to dismiss the Water's District's complaint for reverse validation on the grounds that the published summons omitted language expressly required by section 861.1: "The summons shall ... state that persons who contest the legality or validity of the matter will not be subject to punitive action, such as wage garnishment or seizure of their real or personal property." Because the Water District did not publish a correctly-worded summons within 60 days after filing its complaint, the jurisdiction for the reverse validation action was never completed: "Jurisdiction shall be complete after the date specified in the summons."[4]
Although case law has determined that cross-complaints are proper in a reverse validation action,[5] there are no express *553 statutory requirements for filing, publishing, or serving a cross-complaint. The relevant statutes make no reference to cross-complaints.[6] Here the three cross-defendants were personally served with the cross-complaints using the ordinary form of summons, not that required by section 861.1.
Appellants argue that their cross-complaints are independent from the Water District's reverse valuation action, especially their twelfth cause of action, which asserts different claims for relief against the County than against Indio. In spite of section 862, which addresses when jurisdiction is complete, appellants contend that the requirement to publish and return a summons within 60 days is "mandatory", not jurisdictional. Appellants assert that the court obtained jurisdiction over the cross-complaints because they were timely filed under section 861.1; because appellants served the cross-defendants personally in accordance with section 410.50; and because the filing of the cross-complaints, not the issuance or service of the summons, vests the court with jurisdiction.
In opposition, Indio contends that the court never acquired jurisdiction of the reverse validation action or the related cross-complaints because of the defect in the publication of the summons by the Water District. We agree.
Our analysis begins with an examination of the validation statutes. Their purpose "`is to provide a simple and uniform method for testing the validity of government action.'"[7] A validation or a reverse validation action is a proceeding in rem.[8] Either kind of action must be filed within 60 days of the genesis of the public agency matter which is its subject.[9] The proceedings, especially a reverse validation action, occur in a short time frame. A reverse validation action must be filed within 60 days and the summons published and served within another 60 days.[10] Therefore, the statutory scheme contemplates that a reverse validation action will be filed and a summons published within a period no longer than 120 days. Responses, including answers and cross-complaints, are due within 10 days after publication of the summons is completed,[11] after which date jurisdiction is complete.[12]
We agree with the general principle that a cross-complaint is a separate action, severable from the original complaint and answer.[13] But that principle could actually hurt, rather than help, appellants. A reverse validation action is served like an ordinary civil action but the summons must be in the form and published as prescribed by sections 861 and 861.1. If a party has not yet answered the reverse validation action, a cross-complaint must be served on a party in the "same manner as upon commencement of an original action." [14] Therefore, we could interpret the statutes to require a cross-complaint *554 in a reverse validation action to be served in the same way as the principal action, including the requirement for publication of the summons. But, if that procedure were to be followed, it would prolong the validation proceeding beyond the statutory time limits and a chief purpose of the statutory scheme would be undermined.[15]
For that reason, we conclude that the concerns of expediency, efficiency, and certainty underlying the validation statutes favor the conclusion that the summons for a cross-complaint does not need to be published. It would wholly contradict the validation scheme to make the same service and publication requirements apply to a cross-complaint as to the original reverse validation action. Therefore, we hold the appellants' cross-complaints were properly served. That does not mean, however, that the court acquired jurisdiction for the cross-complaints under the validation statutes.
As stated in sections 861 and 862, jurisdiction depends on the date stated in the published summons. Because the summons used by the Water District was defectively worded, it did not provide the notice necessary for jurisdiction to attach. In spite of appellants' arguments to the contrary, we cannot perceive any legitimate theoretical basis on which to approve their contention that the superior court somehow obtained jurisdiction over the cross-complaints when it did not acquire jurisdiction over the Water District's reverse validation complaint. As asserted by Indio, due process and notice are essential to an in rem proceeding.[16] Here the Water District did not give proper notice; hence there is no jurisdiction over the reverse validation complaint or the related cross-complaints.
We are not convinced by appellants' efforts to distinguish between a "jurisdictional" and a "mandatory" statutory requirement. In effect, appellants argue that sections 861 and 862 misuse the term "jurisdiction." But appellants rely on case law interpreting statutes that do not specifically address jurisdiction,[17] whereas sections 861 and 862 specifically describe jurisdiction as being complete after the date specified in the published summons. Appellants also cite condemnation cases discussing the meaning of in rem jurisdiction.[18] Again, however, those cases do not involve a specific statutory scheme that expressly addresses the question of jurisdiction for a reverse validation action. Similarly, appellants cannot depend on general principles involving jurisdiction[19] in the face of more specific statutes like sections 861 and 862. In a reverse validation proceeding, compliance *555 by the original plaintiff with the publication requirements of sections 861 and 862 is a prerequisite for any party to establish jurisdiction.[20] Rather than take the risk of relying on another party to comply with the statutes, the Mosquito District and Valley Sanitary could have filed their own reverse validation actions.
Having determined the foregoing, we comment briefly on appellants' contention that their twelfth cause of action against the County constitutes a separate claim. That cause of action challenges the County's adoption of Ordinance No. 797 on October 19, 1999. A reverse validation action concerning that matter would had to have been filed within 60 days or by December 18, 1999.[21] Therefore, the time to file an action against the County had expired before the Water District filed its reverse validation action on January 26, 2000. The Mosquito District and Valley Sanitary could not revive this claim against the County in their cross-complaints.
We also reject appellants' effort to rely on section 867.5. That statute permits a party who has answered a validation action to file a reverse validation action within 30 days after the public agency dismisses its validation action. Section 867.5 does not apply where the superior court dismisses a reverse validation action and related cross-complaints for lack of jurisdiction.
4. Disposition
We affirm the judgment and award costs on appeal to Indio.
We concur: HOLLENHORST, Acting P.J., and WARD, J.
NOTES
[1] Planning & Conservation League v. Department of Water Resources (2000) 83 Cal. App.4th 892, 100 Cal.Rptr.2d 173; Code of Civil Procedure section 863. Unless otherwise stated, all statutory references are to Code of Civil Procedure.
[2] Sections 861 and 861.1.
[3] Health and Safety Code section 33000 et seq.
[4] Section 862.
[5] Moorpark Unified School Dist. v. Superior Court (1990) 223 Cal.App.3d 954, 959-961, 273 Cal.Rptr. 18.
[6] Sections 860-867.5.
[7] Embarcadero Mun. Improvement Dist. v. County of Santa Barbara (2001) 88 Cal. App.4th 781, 789, 107 Cal.Rptr.2d 6, citing Moorpark Unified School Dist. v. Superior Court, supra, 223 Cal.App.3d [at page] 960.
[8] Sections 860 and 863.
[9] Sections 860 and 863.
[10] Sections 860 and 863.
[11] Section 861.1; Moorpark Unified School Dist. v. Superior Court, supra, 223 Cal.App.3d at pages 959-960, 273 Cal.Rptr. 18.
[12] Section 862.
[13] Security Pacific National Bank v. Adamo (1983) 142 Cal.App.3d 492, 496, 191 Cal.Rptr. 134.
[14] Section 428.60.
[15] Planning & Conservation League v. Department of Water Resources (1998) 17 Cal.4th 264, 273, 70 Cal.Rptr.2d 635, 949 P.2d 488.
[16] Embarcadero Mun. Improvement Dist. v. County of Santa Barbara, supra, 88 Cal. App.4th at pages 789-790, 107 Cal.Rptr.2d 6; Arnold v. Newhall County Water Dist. (1970) 11 Cal.App.3d 794, 799-801, 96 Cal.Rptr. 894.
[17] Conservatorship of Kevin M. (1996) 49 Cal. App.4th 79, 87-91, 56 Cal.Rptr.2d 765, discussing whether the five-day jury-trial-demand requirement of Welfare and Institutions Code section 5350, subdivision (d) is mandatory or jurisdictional; Dresser v. Superior Court (1964) 231 Cal.App.2d 68, 41 Cal.Rptr. 473, analyzing former section 581a.
[18] Dresser v. Superior Court, supra, 231 Cal. App.2d at page 76, 41 Cal.Rptr. 473; San Bernardino etc. Water Dist. v. Gage Canal Co. (1964) 226 Cal.App.2d 206, 215, 37 Cal.Rptr. 856.
[19] Harrington v. Superior Court (1924) 194 Cal. 185, 228 P. 15; Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 291, 109 P.2d 942; Mungia v. Superior Court (1964) 225 Cal.App.2d 280, 37 Cal.Rptr. 285; and sections 410.50 and 1917.
[20] Arnold v. Newhall County Water Dist., supra, 11 Cal.App.3d at pages 799-801, 96 Cal. Rptr. 894.
[21] Section 863. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260547/ | 632 F.Supp. 653 (1986)
PENNSYLVANIA DENTAL ASSOCIATION, et al., Third-Party Plaintiffs,
v.
MEDICAL SERVICE ASSOCIATION OF PENNSYLVANIA, et al., Third-Party Defendants.
Civ. A. No. 81-1187.
United States District Court, M.D. Pennsylvania.
April 17, 1986.
*654 *655 John C. Sullivan, Nauman, Smith, Shissler & Hall, Harrisburg, Pa., for Bruce Cutler.
Charles F. Scarlata, Scarlata & DeRiso, Pittsburgh, Pa., for Theodore R. Paladino, D.D.S.
Thomas A. Beckley, John G. Milakovic, Beckley & Madden, Harrisburg, Pa., for Pa. Dental Ass'n and Donald Mayes; Barry E. Carter, Washington, D.C., of counsel.
Thomas E. Wood, Keefer, Wood, Allen & Rahal, Harrisburg, Pa., Michael Hennessy, Edward L. Springer, Joseph Friedman, Springer & Perry, Pittsburgh, Pa., for Med. Serv. Ass'n/Blue Shield.
*656 MEMORANDUM
CALDWELL, District Judge.
Before the Court and ripe for decision is the motion of the third-party counterclaim defendants[1] (referred to hereinafter as "the dentists") for summary judgment with respect to the third-party counterclaim of the third-party plaintiffs[2] (referred to hereinafter as "Blue Shield"). This Opinion addresses that motion.
The Commonwealth of Pennsylvania initiated this civil action on October 20, 1981, by filing a complaint against the Pennsylvania Dental Association (PDA) and a number of other dental associations, contending that these associations were violating anti-trust laws, principally by encouraging dentists to terminate Blue Shield participating dentist agreements. The Association filed answers to the complaint on or about November 9, 1981.
On November 17, 1981, the PDA filed the third-party complaint at issue here naming, inter alia, Pennsylvania Blue Shield and Donald S. Mayes, D.D.S. as third-party defendants.
On March 11, 1982, after a motion to dismiss had been denied, Blue Shield filed its answer to the third-party complaint and its counterclaim against the dentists. The dentists moved to dismiss Blue Shield's counterclaim, which motion was denied by order of July 30, 1982. On September 20, 1982, the dentists filed a responsive pleading to Blue Shield's counterclaim, which included a class action counterclaim against Blue Shield and Dr. Mayes brought by PDA and three other dental associations.
On September 15, 1982, Blue Shield filed a motion for a preliminary injunction. On November 17, 1982, PDA filed a motion for a preliminary injunction. On December 30, 1982, both the motions of Blue Shield and of PDA for preliminary injunctions were denied.
On November 22, 1982, the Court granted a joint motion of the Commonwealth and the Dental Associations dismissing the initial complaint on the basis of a settlement agreement.
On January 25, 1983, the class plaintiffs filed a motion for class certification. On April 6, 1983, that motion was denied in part and granted in part, the Court denying class certification completely to one subclass and certifying another subclass for injunctive relief only. That order was appealed to the Third Circuit Court of Appeals on April 13, 1983. On April 26, 1983, Blue Shield and Dr. Mayes filed a motion to dismiss the appeal and on May 24, 1983, the appeal was dismissed.
On October 28, 1983, the Court addressed the dentists' third-party complaint and class action counterclaim against Blue Shield in this case, deciding that Blue Shield was entitled to summary judgment as to those claims. Pa. Dental Ass'n. v. Med. Serv. Ass'n. of Pa., 574 F.Supp. 457 (M.D.Pa.1983), aff'd., 745 F.2d 248 (3d Cir. 1984), cert. denied, ___ U.S. ___, 105 S.Ct. 2021, 85 L.Ed.2d 303 (1985). We now address the dentists' motion for summary judgment as to Blue Shield's claims that the dentists and their associations have violated the antitrust laws.
In the third-party counterclaim, Blue Shield claims that the dentists have unlawfully restrained trade in violation of Section 1 of the Sherman Act by unlawfully combining and conspiring to boycott Blue Shield's dental health care plans, so as to discourage organizations from enrolling in Blue Shield's health care plans to stabilize fees for dental services, to interfere with Blue Shield's cost containment efforts and *657 to influence Blue Shield policies. The complaint alleges that the dentists and their associations caused other dentists to cease being Blue Shield participating dentists, have agreed to raise, fix and stabilize prices, have communicated guidelines for dealing with Blue Shield, have encouraged dentists not to cooperate with Blue Shield audits, have encouraged dentists to increase fees for patients who have dental insurance and have attempted to coerce Blue Shield to change various provisions of its dental health care plans. Pendent state law claims are also raised by Blue Shield.
Extensive discovery has been completed and extensive documentation is submitted to the Court in connection with the dentists' motion for summary judgment.
The dentists have based their summary judgment motion upon the contention that there is no evidence of actionable antitrust injury. By Order of February 7, 1986, we ordered the parties to file supplemental briefs addressing as well the broader question whether the third-party counterclaim defendants' conduct violated the antitrust laws. We have now carefully considered all of the parties' evidence and arguments. We find that there are no material facts in dispute and that, crediting Blue Shield's viewpoint as to the inferences that can be drawn from all of the evidence to the extent that those inferences are reasonable, the dentists are entitled to summary judgment for the reasons which follow.
I. FACTS.
In Blue Shield's brief in opposition to the dentists' motion for summary judgment, Blue Shield has set forth a very lengthy statement of the facts which it believes that it could prove at a trial of this case and which it contends would entitle it to relief under the antitrust laws.[3] Blue Shield Brief, November 27, 1985, Doc. 972, pp. 6-74. These facts may fairly be stated in a less lengthy fashion as follows:
The Medical Service Association of Pennsylvania does business under the registered fictitious name of Pennsylvania Blue Shield. Blue Shield is a non-profit corporation operating as a professional health service corporation under the laws of Pennsylvania providing for prepaid medical, osteopathic, psychological, optometric, podiatric, dental services, and certain other professional health services. Blue Shield was created in the late 1930s by representatives of the Pennsylvania Medical Society. The Pennsylvania Insurance and Health Departments regulate Blue Shield pursuant to the Professional Health Service Corporation Act, 40 Pa.C.S. § 6301 et seq., as amended (the Blue Shield Regulatory Act).
Initially Blue Shield programs were structured as fee schedule programs. Blue Shield provided benefits (called service benefits) to its subscribers through a participating doctor system whereby the vast majority of licensed doctors of various healthrelated disciplines agreed, inter alia, to be paid directly by Blue Shield in accordance with certain specified fee schedules for specified services. Doctors in Pennsylvania could participate with Blue Shield by signing a Participating Doctor's Agreement, whereby the doctors agreed to be bound, inter alia, by the Blue Shield Regulations for Participating Doctors. Subscribers were always free to use the services of non-participating doctors; however, in that case Blue Shield reimbursed the subscriber and not the doctor. Blue Shield programs were marketed only after approval by the Insurance Department in accordance with the Blue Shield Regulatory Act.
In accordance with the Blue Shield Regulatory Act and Blue Shield's By-Laws as determined by its corporate membership, if a subscriber was classified as under-income, participating doctors were required to accept Blue Shield's payment under the fee schedule for a covered service as payment in full. Also in accordance with the *658 Blue Shield Regulatory Act, if a subscriber was classified as over-income, (also pursuant to Blue Shield's By-Laws and as determined by its corporate membership) the participating doctor was permitted to charge (balance bill) that over-income subscriber an amount in addition to the fee schedule amount paid by Blue Shield.
Under Blue Shield medical/surgical coverage, there was very limited coverage for dental services. The only dental services covered were oral surgical services (e.g. accident/trauma cases, impacted wisdom teeth extractions). An important segment of Blue Shield's business historically was group accounts, usually through employers, labor unions and/or government organizations. In the 1960s these groups began to demand a medical/surgical reimbursement system which could respond to the pressures of inflation yet maintain some reasonable controls over excessive professional charges. This led to Blue Shield's development of a concept of reimbursement of participating dentists by Blue Shield according to a formula which takes account of independently established charges or fees of competing practitioners with a cap at a percentile of usual charges of all practitioners in a similar geographic area and in a similar specialty. This mode of reimbursement is referred to as the UCR, denoting a reimbursement formula which Blue Shield has devised to result in a reimbursement to dentists that is usual, customary and reasonable. Generally, no distinction has been made between over-income or under-income subscribers in Blue Shield's UCR programs, although Pennsylvania law would have permitted such a distinction.
By the late 1960s, after obtaining Insurance Department approvals, Blue Shield widely marketed its medical/surgical UCR product together with Blue Cross hospitalization and Blue Cross/Blue Shield major medical coverage. Under Blue Shield's UCR programs, if a Blue Shield subscriber used the services of a participating physician, the physician by his Participating Doctor's Agreement (as implemented by Blue Shield's Regulations for Participating Doctors) was not contractually permitted to balance bill, i.e. charge the subscriber the difference, if any, between the Blue Shield allowance for a covered service and the physician's charge. In addition, as authorized by the Blue Shield Regulatory Act, subscribers to Blue Shield's UCR programs were not permitted to assign their benefits.
In offering its medical/surgical and other programs, Blue Shield has competed in the marketplace with programs offered by commercial insurance companies. Blue Shield has also been in competition with employers which sponsor self-insured or direct pay programs.
The overwhelming majority of Pennsylvania's physicians are Blue Shield participating doctors. Blue Shield believes that a sufficient number of participating doctors is essential to the operation of effective service benefit programs for Blue Shield subscribers.
Employees in Pennsylvania with group medical/surgical, hospitalization and major medical coverage as employee fringe benefits began seeking other health benefits in negotiations with their employers. The health insurance industry viewed prepaid dental services as the next frontier to explore for employee benefit coverage. Blue Shield determined to meet this marketplace demand in Pennsylvania. In order for Blue Shield to meet these market demands, and be able to offer prepaid dental programs on a service benefit basis, Blue Shield had to rely upon strong participation and cooperation by the individual practitioners who comprised the dental profession.
In 1949, the Blue Shield Regulatory Act was amended to permit dentists to become participating doctors. At that time, the business aspects of the practice of dentistry were quite different than they are today. The average dentist had no one to answer to except the patient. There were no dental utilization review committees and other committees and processes like those with which physicians were confronted in the hospital setting. Dentists were unused to dealing with insurance companies, the *659 forms and the red tape. Physicians had grown up with the practice since the 1940s.
In the 1960s through the early 1970s, dentistry was still a cottage industry or profession; the profession was one of the last bastions of rugged individualism. Dentists had frequently engaged in sole practice with an office assistant or two and a hygienist. Dentists have placed a great value on the dentist-patient relationship and the traditional private practice, fee-for-service method of delivery of dental services. Traditionally, a direct financial relationship existed between the patient and the dentist. Because there was little or no dental insurance prior to the 1970s, natural market forces tended to influence dentists to charge what patients could afford and to perform only those services patients could afford.
In the late 1960s, the vast majority of Pennsylvania's dentists were members of the Pennsylvania Dental Association (PDA). Counterclaim defendant PDA is the Pennsylvania statewide affiliate of the American Dental Association. It is comprised of ten component districts. Counterclaim defendant Odontological Society of Western Pennsylvania (also known as the Dental Society of Western Pennsylvania) is the Tenth District component of the PDA. Counterclaim defendant Fifth District Dental Society is also a component of the PDA. The ten districts are in turn subdivided into a number of local societies. Counterclaim defendants Harrisburg Area Dental Society and York County Dental Society are local societies within the counterclaim defendant Fifth District Dental Society's geographic territory. Counterclaim defendant Erie County Dental Association, Inc. is a local society within the Ninth District of the PDA. Counterclaim defendants Luzerne County Dental Society and Scranton District Dental Society are local societies within the Third District of the PDA. Counterclaim defendant Montgomery-Bucks Dental Society is a local society within the Second District of the PDA. Counterclaim defendant Delaware Valley Dental Society is not directly affiliated with the PDA. The leadership of the PDA debated upon the role it wished the PDA to play with the advent of dental prepayment. PDA created the Pennsylvania Dental Service Corporation, which does business under the name Delta Dental. Delta Dental was incorporated under the same regulatory act as Blue Shield.
In the late 1960s and the early 1970s, Blue Shield formulated plans for desigining and marketing a prepaid dental program. Blue Shield believed that it needed the input of dentists to make its dental program feasible and successful. Blue Shield wanted to market its prepaid dental program on the basis of a participating dentist system. Blue Shield hired a practicing dentist to assist in the design, development and implementation of its prepaid dental program.
Blue Shield, the PDA and Delta Dental consulted with each other and for a time discussed implementing a joint program. This did not materialize and Blue Shield went its separate way. The PDA funded Delta Dental by a loan and Delta Dental has been in competition with Blue Shield ever since.
In 1969, the PDA's House of Delegates adopted a resolution known as H.D. 69-6, which states:
"[t]hat any not for profit corporation when contemplating a dental program follow the Association's [PDA's] direction and advice in designing and implementing such a program ... that in the absence of such cooperation the Association [PDA] will vigorously inform its members of such lack of cooperation, pointing out to them the intrinsic dangers that are likely to ensue by participating in such programs. The [PDA] will exert all efforts to prevent the approval by the Insurance Department of such service benefit contracts."
That resolution was rescinded in May or June of 1978.
Blue Shield's dental program was designed to be marketed on a group-only basis using the participating dentist, UCR concept. The prototype group dental policy, called PennDental I, was submitted to and approved by the Insurance Department *660 of Pennsylvania in 1970. In 1970, Blue Shield also submitted its prototype group dental policy to the PDA for its review. In June of 1970, PDA President Dr. Willis McCormick informed Blue Shield that the PDA was satisfied with the proposed design and implementation of Blue Shield's dental plan and saw no reason to file objections with the Insurance Department at that time.
As of June, 1970, Blue Shield perceived everything to be coming up roses. Joint discussions between Blue Shield, the PDA and Delta Dental were still taking place. Blue Shield had not yet sold any groups, but Blue Shield service representatives were signing up participating dentists. Dentists were signing the participating doctor's agreement, agreeing to treat Blue Shield subscribers and to be bound by Blue Shield's regulations for participating doctors. Among the specific matters that dentists agreed to upon participation were (1) to refrain from balance billing, (2) to permit Blue Shield to examine their patient records (audit), and (3) not to charge Blue Shield subscribers more than their usual charges. The Blue Shield prepaid dental program also prohibited assignment of a subscriber's right of payment.
Blue Shield believed that in order to have an effective marketing effort, it should sign up about 70% (or more) of the state's dentists, as participating dentists, which Blue Shield accomplished by mid-1974. Blue Shield sold its first group dental program in January, 1972. Meanwhile, Delta Dental and the commercial insurance companies were also marketing prepayment programs in competition with Blue Shield.
The advent of prepayment coverage changed the way dentists were being paid for their services. Before there was a dentist-patient relationship only. Third-party payment caused some dentists to provide a broad range of services to people who never before had extensive dental services. Some dentists were tempted, because patients had insurance, to charge more, to prescribe a broader range of treatment and to provide more costly services when less expensive services would have sufficed.
Prepaid dental programs are not really insurance. Dental disease is practically universal and the use of services by individuals occurs at a rate in excess of 50% of the individuals in a prepaid dental group per year. The average claim amount is usually less than several hundred dollars. Much dental care can be postponed almost indefinitely, and since there is a wide range of treatment choices available to the dentist and the insured, the choice of treatment alternatives creates an uncertainty in benefit amount (e.g., the choice of gold versus amalgam fillings or extractions and bridges versus root canal and crowns). Claim expenses are high at the inception of coverage, because there is usually a backlog of unmet needs that result from neglect and disease before the effective date of insurance. Prepaid dentistry is more like a pooled budgeting mechanism than true catastrophic indemnity insurance. A viable dental program must combine common medical insurance concepts with some new mechanisms. Some of these mechanisms are, in addition to the participating doctor arrangements, direct payments to participating doctors, no balance billing, medical necessity and a prohibition against assignment of benefits. New mechanisms introduced by the dental program included the concept of predetermination, the less costly but adequate treatment alternative and a provision for excepted dentists (i.e., a group of dentists excepted from Blue Shield's auditing requirements).
Blue Shield believes that for a UCR system to operate effectively, it must be based upon a uniform usual charge submitted by a practitioner for reimbursement. A twotiered charge structure whereby a practitioner charges his uninsured patients a lower fee for a service than his insured patients makes the UCR reimbursement system less economical, less workable and less marketable for Blue Shield. Blue Shield asserts that many dentists in Pennsylvania have been charging their insured patients more than their non-insured patients.
*661 Despite the PDA's initial approval of the Blue Shield proposed dental program in 1970, dentists in this cottage industry had some misunderstandings about Blue Shield's dental program. Such misunderstandings filtered up to organized dentistry which reacted in different ways across the state and across the country. Some dentists objected to a perceived intrusion of third-party carriers, particularly service corporations like Blue Shield and Delta Dental, in their practices. Those dentists wished to preserve the traditional relationship between dentist and patient. The traditional school of thought believed it best not to participate contractually with Blue Shield or Delta Dental. Blue Shield believes that the motivation of these dentists was principally economic, although these dentists cited health factors in their opposition. Blue Shield asserts that these dentists wanted to maintain the traditional economic relationship between dentist and patient, yet obtain direct payment from insurance companies pursuant to an assignment of the patients' benefits to the dentist and that these dentists believed that carriers such as Blue Shield, Delta Dental and commercial insurance companies should merely be conduits for funds. These dentists did not wish to be second-guessed in their diagnoses and treatment of patients, nor did they want to submit diagnostic aids such as x-rays and study models to be scrutinized by insurance carriers. Blue Shield acknowledges that part of this school of thought was philosophical dental professionals did not want third parties to intrude into traditional areas of dental practice but asserts that the dentists' objections were primarily economic. Blue Shield asserts that traditional dentists believed they could collectively dictate the terms on which they would deal with third-party carriers if all or a majority of dentists refused to cooperate with Blue Shield and Delta Dental.
A confrontation ensued between the dentist-traditionalists and third-party carriers seeking to implement sufficient but reasonable cost containment mechanisms. Blue Shield and other insurance companies viewed themselves as more than mere financial intermediaries. Blue Shield considered itself to represent subscribers as bargainers of quality and cost of treatment. Blue Shield's marketing to employer groups is premised on this concept. Blue Shield perceived itself as a substitute agent in an economic sense for its subscribers. Some dentist-traditionalists viewed this role as an unwarranted intrusion into the traditional dentist-patient relationship.
On September 9, 1974, the Executive Board of the Erie County Dental Association, Inc. (ECDA), a counterclaim defendant, recommended that the ECDA membership drop participating doctor relationships. On September 12, 1974, the ECDA adopted a resolution opposing the concept of participating dentists and recommended that its members withdraw from any list of participating dentists and render services only as non-participating dentists.
Counterclaim defendant Charles Ludwig, D.D.S. holds himself out as an expert in dental prepayment, and has published on the topic of self-insurance. Dr. Ludwig is a member of the Harrisburg Area Dental Society (HADS) and was trustee of the Fifth District Dental Society to the Pennsylvania Dental Association for a number of years. Dr. Ludwig is the PDA's President-elect. In October of 1974, counterclaim defendant Harrisburg Area Dental Society published a document called its Dental Insurance Manual, which was disseminated to dentists and others statewide and beyond. Dr. Charles Ludwig was an author of the manual. Dr. Ludwig also extensively lectured on the topic of prepayment. He and the HADS Dental Insurance Manual have persistently advocated non-participation with third-party payers, have advocated a uniform and unified position of organized dentistry with respect to third-party payment, and have opposed submitting any diagnostic aids such as x-rays or study models to any third-party payers to substantiate claims for payment.
On October 3, 1974, counterclaim defendant Fifth District Dental Society, which includes as components local dental societies *662 including counterclaim defendants HADS and York County Dental Society, adopted a resolution recommending to its membership that they avoid contractual relationships with third parties and not sign contracts or agreements implying or registering them as participating dentists. The Fifth District Dental Society's resolution of October 3, 1974 has not been rescinded. The Fifth District's resolution led to mass resignations from Blue Shield participation among dentists in the Fifth District of the PDA and Blue Shield still suffers from the effects of such resignations today.
A number of dentists from the HADS, including Dr. Ludwig, visited counterclaim defendant Scranton District Dental Society in November of 1974 and spoke to the Scranton Society espousing their traditional views against participation with Blue Shield (and Delta Dental). At the Scranton meeting, the Scranton District Dental Society adopted a resolution that its members should not sign contractual agreements with third parties registering them as participating dentists. The resolution led to mass resignations from Blue Shield participation in the Scranton area. That resolution has not been rescinded.
Counterclaim defendant Luzerne County Dental Society passed a resolution in December of 1974 requesting its members to become non-participants in the Blue Shield dental program. That resolution is still in effect. That resolution led to mass resignations in the Luzerne County area.
In December of 1974, HADS adopted a resolution that its membership should avoid contractual agreements with third parties and should not sign contracts or agreements registering them as participating dentists in a program. Dr. Charles Ludwig introduced that resolution. In addition, a written pledge was circulated at the HADS' December, 1974 meeting pledging that the dentists-members of the HADS are non-participating dentists in any third-party program or that they will resign from such contractual participation. Following the HADS' departicipation resolution, many dentists resigned as Blue Shield participants.
The HADS held meetings with dentists and attempted to persuade the HADS membership into departicipation on a more individual basis. There is no evidence of any coercion, nor any evidence that participating dentists had any reason for concern about any negative effects of exercising independent judgment about participating with third-party insurers.
Blue Shield used outside dental consultants and advisors for its dental program and had developed a quality assurance program at the urging of the then Pennsylvania Insurance Commissioner, Herbert Denenberg. Early in 1974, the PDA objected to Blue Shield's publication of lists of participating dentists. In the fall of 1974, the PDA sponsored a series of workshops for dentists on the topic of dental prepayment programs. At a workshop held on October 23, 1974, there was a great amount of discussion regarding participation with Blue Shield. The majority of those present opposed participation with Blue Shield and suggested that the PDA seek a meeting with officials of Blue Shield. The PDA invited officials of Blue Shield to attend the December 12, 1974 PDA Board of Trustees meeting in Harrisburg. Dr. Booth, the PDA President, told Blue Shield representatives at the meeting that the PDA had many areas of concern with Blue Shield but most important was the "contractual agreement, or participation, that [Blue Shield] use[s] to control dentists." He stated that PDA members statewide were disturbed by Blue Shield practices as evidenced by the then recent Scranton area mass resignations. He stated that the PDA membership had complained of preauthorization (also known as predetermination), the operation of the UCR system and the distribution of lists of participating doctors, all of which concepts were not in the best interest of patients and of dentistry's efforts to deliver optimal dental care. He remarked that unless Blue Shield and the PDA could come to a reasonable resolution of these disputes, he and the other PDA Trustees *663 would have no alternative but to resign their participation with Blue Shield and inform the PDA membership of the reasons for their resignations. Dr. Booth's remarks were set forth in the minutes of the December 12, 1974 PDA Trustee's meeting and were also reported verbatim to some dentists.
In subsequent communications PDA representatives objected to the requirement that participating doctors accept Blue Shield's allowance as payment in full for covered services; to the rule that Blue Shield subscriber-patients of non-participating doctors could not assign their benefits and to Blue Shield's provision for preauthorization (predetermination). Blue Shield declined to change the fundamentals of the way Blue Shield was conducting its dental program.
In his address to the 1975 PDA House of Delegates Annual Meeting, Dr. Booth summarized PDA's objections to Blue Shield's dental program and expressed the hope that the negotiation process with Blue Shield would persuade Blue Shield to make changes.
At the January, 1975 installation of officers of counterclaim defendant HADS, HADS' incoming President Bubeck, as part of his inauguration address, urged all HADS members who had not yet resigned (from Blue Shield and Delta Dental) to do so, citing as the principal reason that the dentists should not come under the control of a third-party insurance company as to either fees to be charged or treatment decisions. Dr. Burbeck noted that insurance companies accused dentists of incompetency and dishonesty in an effort to win support for their role as a monitor of the quality of dental care, and proposed that dentists retain control over the matter of quality of care by self-regulation within the profession.
Counterclaim defendant York County Dental Society passed a resolution in 1975 that its membership should not be participating members of any third-party prepayment program. That resolution has not been rescinded. More than 85% of the general dentists in the York County area sent in letters of resignation to Blue Shield.
In April 1975, counterclaim defendant Montgomery-Bucks Dental Society passed a resolution urging its members to resign from participation with Blue Shield, because of Blue Shield's efforts to control fees and treatment decisions. That resolution has not been rescinded. Resignations from Blue Shield participation ensued in that area.
In the spring of 1975, counterclaim defendant Dr. Charles Ludwig traveled to Erie, Pennsylvania to address the membership of counterclaim defendant ECDA, giving his views on participation with Blue Shield. In 1975, the ECDA reaffirmed its September 12, 1974 departicipation resolution. Resignations from Blue Shield participation in the Erie area occurred. The ECDA's position regarding non-participation was reaffirmed again in the 1980s.
In 1975, the PDA House of Delegates adopted new Standards for the Design of Prepayment Programs. Those Standards were renamed Guidelines in 1978. They are still in effect. They include, inter alia:
Standard No. 5. There shall be no administrative, promotional or educational policies adopted which interfere with the dentist-patient relationship.
Standard No. 6. Contractual agreements between dentists and carriers which compromise or interfere with the dentist's ability to provide optimal dental care should be avoided.
Standard No. 7. Diagnosis and treatment planning shall remain the exclusive prerogative of the attending dentist. Preauthorization by the carrier shall be limited to predetermination of the insured patient's eligibility and the extent of benefits provided by the program. Diagnostic materials are not required in this determination.
Standard No. 14. The program shall have a provision for the assignment of the patient's benefits to the dentist.
The percentage of Blue Shield participating dentists statewide as compared to all *664 dentists who submitted claims to Blue Shield declined from in excess of 72% in 1974 to less than 54% in the early 1980s. Blue Shield claims that the decline in the numbers of participating dentists harmed Blue Shield's marketing efforts statewide, particularly in certain areas, such as northwestern Pennsylvania (the Erie area), central Pennsylvania (Fifth District, HADS, York County, etc.) and northeastern Pennsylvania.
The President of the Fifth District Dental Society in 1981 lectured a Hanover Dental Society meeting to the effect that no one should participate with Blue Shield and that if no one participates, Blue Shield would not be able to sell its insurance programs.
The PDA rejected a Blue Shield advertisement which Blue Shield attempted to place in the PDA's official publication, the Pennsylvania Dental Journal, by which Blue Shield sought to encourage dentists to participate with Blue Shield. The Journal is the official publication of the PDA. It is the only statewide periodical for dentists.
In 1978, the HADS sought and obtained an opinion of counsel (Mr. Beckley) who reviewed the HADS Dental Insurance Manual. Acting upon Mr. Beckley's advice, HADS passed a resolution suspending all policies and guidelines regarding third-party programs. Blue Shield attributes this development to an apprehension among some dentists that their policies might be in violation of antitrust law principles. The suspension resolution of HADS was not distributed to all dentists. No effort was made to nullify the effects of the HADS 1974 departicipation pledge. While gradually more dentists from HADS have participated with Blue Shield, the percentage of their participation has never reached the pre-1975 level of participation. All of the other societies and associations in this case still have their departicipation resolutions or recommendations of record.
In 1978, Esther Richwine, the PDA Executive Director, stated publicly that due to concerns regarding the FTC, Mr. Beckley, PDA counsel, was auditing the minutes of the PDA.
Commencing in 1977, the PDA began to challenge and protest virtually every filing made by Blue Shield with the Insurance Department or the Health Department which involved or affected Blue Shield's dental program and initiated a number of court proceedings against or involving Blue Shield. Blue Shield asserts that the purpose of these challenges, protests and legal actions was to coerce Blue Shield to change its business practices so as to reduce price competition among dentists and to preserve the private practice fee-for-service method of financing dental services.
Blue Shield initiated an in-office review program (IOR). The PDA advised its membership on how to deal with Blue Shield audit requests. The PDA developed two types of audit forms letters one for participating dentists and one for non-participating dentists. Since 1977, the PDA has advised dentists that disclosing non-insured patient records to Blue Shield during an IOR might be an invasion of the patient's right to privacy. Many dentists did not permit Blue Shield to verify that they were not charging Blue Shield more than their usual charges. The PDA also sent observers to attend audits and developed written guidelines (to which insurers were asked to adhere) with respect to audits.
PDA's audit advice to dentists caused some dentists to believe that they should not disclose non-insured patient records as part of Blue Shield's IORs. This impaired Blue Shield's IOR program.
Blue Shield believes that many dentists have been overcharging Blue Shield by charging Blue Shield subscribers more because they have insurance. A number of dentists have resigned upon being notified of an audit by Blue Shield and a large percentage have refused to disclose their non-insured patient records.
Counterclaim defendant Theodore R. Paladino is a lawyer as well as a dentist. As an attorney, he has represented dozens of dentists regarding Blue Shield audits and has represented some dentists before Blue *665 Shield's dental review committee. Dr. Paladino consistently has advised his clients that he questioned Blue Shield's authority to audit them and that they were not obligated to disclose non-insured patient records to Blue Shield.
Blue Shield sought the Department of Health's approval to amend its regulations for participating doctors a number of times to eliminate the basis for some of the objections being raised by Dr. Paladino and the PDA as to Blue Shield's right to audit and inspect records. Blue Shield sought to amend its Regulations for Participating Doctors before the Department of Health regarding its procedure for verifying usual charges, and Dr. Paladino and the PDA filed objections. The Fifth District Dental Society (and Dr. Ludwig) also commented negatively on Blue Shield's effort to amend its Regulations for Participating Doctors regarding verification of usual charges. The Department of Health approved verification of usual charges (by inspecting non-insured patient records), thus expressly permitting Blue Shield to examine non-insured patient records provided that the identities of such patients were concealed. PDA unsuccessfully appealed such approval to the appellate courts of Pennsylvania.
Blue Shield views dentists' resistance to its IORs as a concerted effort by the dentists to cover up potential fraud and abuse.
Some of the dentists supported a resolution in the Pennsylvania legislature. They inspired House Resolution 15, adopted by the Pennsylvania House of Representatives in March 1981, which called for the scrutiny of health service corporations operating under the Blue Shield Regulatory Act.
House Representative Charles Laughlin from Aliquippa, Beaver County, Pennsylvania is a patient and friend of Dr. Gerald Kolavic. Blue Shield had audited Dr. Kolavic, who was also one of Dr. Paladino's clients, and he was found to have improperly overcharged Blue Shield.
In 1980, counterclaim defendant Odontological Society of Western Pennsylvania formed a committee consisting of predominantly dentists. Commencing in 1980, the committee held a number of meetings. There was a meeting held on June 20, 1980 in Sewickley, Pennsylvania. Counterclaim defendants Drs. Ludwig, Paladino and Perkins attended and participated at this meeting. During the meeting, some of the dentists told a member of the Pennsylvania House of Representatives who was present that Blue Shield interferes with dentist-patient relationships by limiting certain coverage and that the only third-party payer causing problems for dentists and consumers is Blue Shield.
Another meeting concerning Blue Shield was held in Pittsburgh on November 13, 1980. More than 300 dentists attended the meeting. At the November 13, 1980 meeting, someone stated that it was permissible to charge a higher fee if a patient had insurance so long as more than half of a dentist's practice consisted of insured patients. Statements were also made at that meeting that there were not many Blue Shield participating dentists compared to the number of dentists in the state and that dentists, through resignation en masse, could force Blue Shield to deal with dentists on the dentists' terms.
During the November 13, 1980 meeting some of the dentists told a member of the House of Representatives who attended that, sooner or later, all Blue Shield participating dentists will be audited by Blue Shield, that Blue Shield always asks for a refund after conducting an audit, that Blue Shield had, to that date, conducted 600 audits, that a dentist's usual charge would be reduced if he charged less to patients such as clergymen and relatives, and that third-party carriers cheat patients.
As a result of the adoption of House Resolution 15, as noted, supra, the House Consumer Affairs Committee held several hearings throughout the state to ascertain if the Blue Shield Regulatory Act should be amended. Counterclaim defendants Thompson, Ludwig, Paladino and Perkins (and others) were involved in much of the anti-Blue Shield testimony presented at these legislative hearings. Subsequent to the hearings a number of legislative bills *666 were introduced by dentists which largely sought to amend the Blue Shield Regulatory Act in ways which would significantly change Blue Shield's dental program. The legislation would have permitted the assignment of benefits to dentists and would have turned Blue Shield claims disputes over to a PDA-controlled Peer Review System; would have required the Blue Shield Dental Review Committee to hold hearings for adjustments of individual claims; and would have required Blue Shield to update dentists' profiles even though Blue Shield suspected fraud.
In 1980 Blue Shield sought the approval of the Departments of Health and Insurance to implement an experimental dual choice capitation program for employees of the Fairless Hills Works of U.S. Steel located in the Levittown/Fairless Hills suburbs of Philadelphia.[4] This capitation program was known as DentalPLUS. Some of the counterclaim defendants, including PDA, protested these filings. Both Departments approved Blue Shield's DentalPLUS filings.
The PDA appealed to the Commonwealth Court and to the Supreme Court of Pennsylvania. These protests delayed implementation of the DentalPLUS and other Blue Shield capitation programs. Blue Shield contracted with two dental offices to act as dental capitation centers to provide dental services to DentalPLUS subscribers and obtained a verbal commitment from the University of Pennsylvania to likewise participate as a dental capitation center for DentalPLUS.
A group of dentists, most of whom were members of the counterclaim defendant Montgomery-Bucks Dental Society, formed an unincorporated association which they called the Delaware Valley Central Society to compete with DentalPLUS.
The PDA Central Office provided form letters for Delaware Valley Dental Society dentists to send to their patients soliciting their choice of that Society over DentalPLUS. Delaware Valley Dental Society successfully pressured the University of Pennsylvania to withdrawn from the Blue Shield DentalPLUS program. DVDS members also contacted Temple University School of Dentistry to dissuade Temple from participating in DentalPLUS and encouraged steelworkers not to enroll in the Blue Shield DentalPLUS capitation program. At its 1981 Annual Meeting the PDA House of Delegates adopted a resolution which stated that the PDA was not in favor of capitation programs.
PDA's Council on Dental Care Programs developed a Dental Prepayment Guide to give dentistry's point of view to prospective purchasers of prepaid dental programs in Pennsylvania. The Dental Prepayment Guide was designed to be used with the Dentists' consulting service to advise Pennsylvania companies on the types of programs available and to educate them "on what is a good program and what is not." The PDA Council disseminated the Dental Prepayment Guide to thousands of companies statewide.
The PDA also developed a purchaser contact program to train a cadre of 50 or more dentists statewide. The PDA's consulting service used the PDA's Standards for Dental Prepayment Programs and its Guidelines for Dental Prepayment Programs as criteria to determine what was, or was not, a good program. Blue Shield's dental programs did not comport with PDA's Standards or Guidelines.
Dr. Booth, former President of the PDA became an expert on prepayment programs and became an advisor to PDA's Council on Dental Care Programs and actively participated in seminars and workshops on how to train this 50-dentist purchaser contact cadre. Booth visited a representative of the United Steelworkers of America and an official of the United States Steel Corporation (these were and are existing Blue Shield accounts) in 1981 and made statements to those accounts to the effect that Blue Shield rarely pays for crowns and that *667 Blue Shield makes arbitrary administrative decisions.
An August 9, 1979 internal PDA memorandum contains an indication that PDA member dentists discussed Blue Shield coverage with Blue Shield accounts. A member of counterclaim defendant Odontological Society of Western Pennsylvania sent a letter to colleagues urging them to contact Blue Shield's existing accounts and urge those accounts to drop Blue Shield and pick up other coverage when the time came to renew coverage.
In 1977, counterclaim defendants ECDA formed a committee known as its Ad-Hoc Committee for the purpose of investigating professionalism, free enterprise and comraderie.
The ECDA held a series of workshops in 1980-1981 which were attended by about 120 out of the approximately 170 members of the ECDA. The ECDA prepared a special supplement to the PDA's Dental Prepayment Guide. This ECDA Dental Prepayment Guide Supplement was used to assist the Dental Care Committee of the ECDA in contacting prospective purchasers of dental prepayment programs in the Erie area. That practice operated to disparage Blue Shield's dental program. For example, the ECDA Supplement stated that a carrier's in-office accounting review services can only be carried out in an area where all dentists are participating.
ECDA representatives met with prospective purchasers of dental insurance in the Erie area and gave presentations which Blue Shield perceives to have been unfairly slanted against it.
Counterclaim defendants ECDA, Dr. Charles Ludwig and the Fifth District Dental Society have made statements in recent years to the effect that Blue Shield misleads prospective purchasers in areas where there is low Blue Shield participation as to its service benefit feature because paid-in-full dental service benefits are not available if there are not many participating dentists.
Representatives of counterclaim defendants York County Dental Society, Scranton Dental Society and HADS have similarly visited accounts and prospective accounts of Blue Shield.
Some of the dentists have promoted the concept of self-insurance or direct payment programs to combat Blue Shield. Dr. Ludwig has written on the topic of promoting the concept of self-insurance and he is engaged in a personal private enterprise of conducting business as a consultant in self-insurance and direct payment.
II. DISCUSSION.
Summary judgment in an antitrust case is to be sparingly granted, particularly if it appears that there are factual questions presented as to the motive and intent of alleged conspirators, Poller v. Columbia Broadcasting, 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). "Trial by affidavit is no substitute for trial by jury which so long has been the hallmark of `even-handed justice.'" Poller, supra, at 473, 82 S.Ct. at 491. Here there is no demand for a jury trial. The same theories and evidence which would be presented to the Court at a non-jury trial are now before the Court in the context of the motion for summary judgment.
An antitrust case, like any case, is subject to analysis under F.R.C.P. 56 and summary judgment is appropriate if there are no material facts in dispute. "... [A]ntitrust litigation, if made immune from summary judgment, could become an anticompetitive activity itself ... we should use summary dispositions to dispose of antitrust complaints that lack any significant supporting evidence." Klamath-Lake Pharmaceutical Assn. v. Klamath Medical Service, 701 F.2d 1276 at 1281-1282 (9th Cir.1983). When there are not credibility issues impacting upon the determination of material factual questions, when the decision of the case boils down to drawing inferences from a history of events which is not materially in dispute, when all of the material evidence is before the Court, and when no jury trial is demanded, there is *668 scant reason to defer decision of the issues presented until a trial has been held.
A. SHERMAN ACT, SECTION ONE.
The two basic elements of a cause of action under Section 1 of the Sherman Act are, first, that the defendants(s) entered into a contract, combination or conspiracy and, second, that the contract, combination or conspiracy restrains trade. Sitkim Smelting & Refining Co. v. FMC Corp., 575 F.2d 440 (3d Cir.1978); Medical Arts Pharmacy v. Blue Cross & Blue Shield, 518 F.Supp. 1100 (D.Conn.1981). The United States Supreme Court, early in the history of the Sherman Act, interpreted the Section 1 prohibition to require an analysis addressed to the reasonableness of a trade restraint, since virtually all contracts can be viewed to restrain trade in some respect. Standard Oil Co. v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1911). While some business practices, such as horizontal price fixing among competitors, have been judicially determined to be unreasonable per se "because of their pernicious effect on competition and lack of any redeeming virtue," Northern Pacific Railway Co. v. United States, 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958), the categories of per se antitrust violations are narrowly and carefully defined, and most allegations that particular business practices constitute antitrust violations are to be analyzed under the "rule of reason." Under this rule, the essential analysis is whether the practice in question is anticompetitive. See, National Society of Professional Engineers v. United States, 435 U.S. 679, 688, 98 S.Ct. 1355, 1363, 55 L.Ed.2d 637 (1978).
... not every agreement that has an impact on price, either vertically or horizontally is a per se violation of the Sherman Act. Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 23, 99 S.Ct. 1551, 1564, 60 L.Ed.2d 1 (1979). For example, a contract for the sale of goods `fixes' the price at which the goods are to be sold, but such a contract is not per se illegal, absent a showing of some adverse impact on competition. Cf. United States v. Topco Associates Inc., 405 U.S. 596, 606, 92 S.Ct. 1126, 1133, 31 L.Ed.2d 515 (1972); Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 243, 62 L.Ed. 683 (1918). The proper inquiry, thus, is not whether a particular agreement literally fixes a price, but whether the agreement is so `plainly anticompetitive' and so very likely without `redeeming virtue' that a court will apply the label `per se price fixing.' Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., supra, 441 U.S., at 8-9, 99 S.Ct. at 1556-1557.
Blue Shield seeks by this antitrust action to have the Court consider in one civil action an extremely broad range of incidents, statements, policies, practices and issues.
However, the essence of Blue Shield's claim is that the dentists conspired to boycott Blue Shield's participating dentist program and thereby to harm Blue Shield as a seller of dental insurance. An analysis of Blue Shield's claim can not go forward under antitrust cases and principles without deciding first what market or markets are involved here and what relationship the dentists and Blue Shield bear to each other in the context of those markets.
1. RELEVANT MARKET.
We begin with the most obvious market, the market in which dental services are sold by dentists. In this market, dental services are purchased by individuals who need dental services, but in this market dental services are also purchased by suppliers of prepaid dental services such as Blue Shield, who buy dental services in bulk pursuant to the "participating dentist" program and sell them to the individuals insured under their insurance policies.[5]*669 This market we identify for purposes of this Opinion as Market I.[6] Blue Shield can not logically or reasonably claim to be the victim of a boycott in Market I. There is absolutely no evidence, or even any suggestion, that in Market I the dentists ever were or ever would be unwilling to sell dental services to Blue Shield on the same terms as and at the same price as dental services are sold by the dentists to every other purchaser in that market. The fact is that Blue Shield is not offering to buy dental services at the same price and under the same conditions as other purchasers. It seeks to impose a host of conditions upon its purchase of dental services in Market I. It seeks compliance on the dentist's part with audits, predeterminations of treatment plans subject to Blue Shield's approval, and a lot of other things from the dentist that the dentist does not dispense to his other patients. In some instances, depending upon the dentist's usual fee and the result of Blue Shield's UCR calculation, it seeks to have the dentist sell his services to it at a discount. No principle of antitrust law or of free trade requires the dentists to sell their services to a particular purchaser at a discount or under terms and conditions not applicable to other customers. We think that our analysis of this case might very well end at this point, particularly when Blue Shield itself deems Market I to be the relevant market, since there is no evidence that the dentists have sought to or have fixed prices in Market I. See, pages 45-47, below.
In our Order of February 7, 1986, we suggested that another market may be the relevant market here, the market in which Blue Shield sells and dentists buy Blue Shield's "participating dentist" status. We will call this Market II. Blue Shield submits that this characterization is in error, in part because for purposes of the dentists' claims we perceived the principal relevant market to be the market in which dental services are sold. We find there to be no requirement in law or in logic that, for purposes of different claims by different parties, different markets may not be considered. Furthermore, we think that the evidence establishes quite clearly that the dentists' disagreement with Blue Shield and their departicipation goes not to Blue Shield's presence in Market I as a buyer of dental services, but rather to Blue Shield's presence in Market II as a seller of "participating dentist" status.
Blue Shield also appears to assert that the characterization of the relevant market is irrelevant to the legality of the dentists' boycott. We do not think so. On the contrary, we think that Blue Shield's failure to identify the relevant market has resulted in Blue Shield having no clear and discernible theory of its case and in a profusion of arguments and theories on Blue Shield's part, none of which is clearly rooted in established antitrust principles. We will, however, address these theories to the extent that it is possible to do so.
2. BOYCOTT BY DENTISTS OF BLUE SHIELD.
The Sherman Act prohibits conspiracies and combinations in restraint of trade, including boycotts and concerted refusals to deal. Blue Shield is not a buyer on equal terms with other buyers of dental services in Market I, and thus any concerted refusal on the dentists' part to deal with Blue Shield on its terms is not a boycott of a buyer in Market I, the relevant market. And there is no evidence that the dentists *670 could or would want to affect Blue Shield's success in the market place as a vendor of dental insurance so long as individual dentists' fees were not affected and dentists were not required to submit to audits, peer review and all of the other conditions incidental to "participating dentist" status. There is, on the other hand, no doubt that the dentists have the capacity to affect, by concerted action, Blue Shield's success as a seller of fixed rate prepaid dental services policies which have the feature that the insured patient, so long as he goes to a participating dentist, will not have to pay any additional sum for covered services.
We have closely reviewed Blue Shield's evidence. We preface our discussion of the boycott issue with the following observations.
1. We have no evidence presented that Market I is not a free market. There is no evidence of aberrations of supply or of demand and no evidence that dentists do not, on an individual dentist-by-dentist basis, set and charge fees on the basis of such appropriate factors as the individual dentist's skills, the complexity of the service and the volume of patients seeking the dentist's services.
2. There is no evidence presented that the purpose or the effect of the dentists' departicipation was to fix dental fees or to stabilize them. Although Blue Shield contends in a conclusory fashion that this is the purpose and effect, there is no evidence of it. Blue Shield infers it from the fact that its rate of payment to participating dentists is generally lower than the fee those dentists otherwise charge. But if Market I is a free market, Blue Shield's inference is unreasonable. The reasonable inference is that already stated herein: Blue Shield is not truly a buyer of dental services in Market I because it will not pay the market price in that market.
In this regard, we note and distinguish the FTC decision in Michigan State Medical Society, upon which Blue Shield relies. Opinion appended to Doc. 983. There, the concerted conduct of the physicians was aimed at raising Blue Cross/Blue Shield reimbursement rates, and therefore the objective of the physicians' boycott was to affect and raise prices. There is no such evidence here. Here, the evidence plainly reveals that the dentists' efforts over the years was directed at preserving a traditional fee-for-services relationship between dentist and patient and against the participating dentist concept. Here, at best, Blue Shield's case is that the dentists conspired among themselves to be, each of them, independent economic entities in Market I. They conspired not to march to the same drummer by way of the participating dentist concept. They conspired and acted in concert, if anything, to preserve a market which the facts do not show to be anything other than a free market.
3. There is no evidence here of any coercive conduct on the dentists' part. There is abundant evidence that they sought to persuade, as individuals and as associations. They resolved, as groups of dentists in their associations, not to be participating dentists. Some communicated the message, in lectures and otherwise, that their concerted action could serve to destroy the "participating dentist" approach to the practice of dentistry. But there is no evidence that they devised or communicated any sanctions that they would take against other dentists, other entities or other persons if their message was not accepted. Thus, this case is distinguished from, for example, American Medical Association v. United States, 317 U.S. 519, 63 S.Ct. 326, 87 L.Ed. 434 (1943),[7] in which doctors and their associations devised a scheme of sanctions against other doctors and hospitals for participating in a risk-sharing prepayment plan for the rendering of medical services.
4. It must be inferred from the evidence that the dentists and associations were not *671 speaking and acting with respect to Blue Shield as an entity, although frequently they referred to Blue Shield as the embodiment of their bone of contention; in fact, their bone of contention and the object of their resolutions and concerted action was the concept of practicing dentistry under the "participating dentist" system.
Blue Shield's evidence is not that the dentists conspired against Blue Shield as an entity. They objected to a concept participating dentist status and the impact of that concept upon the practice of dentistry. In some respects and in some instances, the more or less collective reasoning of many of the dentists, that participating dentist status was undesirable, was manifested in vocalizations against Blue Shield as an entity, but it is clear that it was not the objective and was not the effect of the dentists' actions to harm Blue Shield competitively.
5. Blue Shield certainly seeks to have its cake and eat it too. It initiated and encouraged an institutional response from the dentists to its "participating dentist" program from the dentists, and so long as everything was "coming up roses"[8] it had no concern that the dentists were acting in concert to become "participating" dentists. When the dentists, somewhat institutionally and somewhat in concert, in the face of an unyielding Blue Shield that by then enjoyed considerable success with its participating dentist program, acted to no longer "participate", it yelled foul and claimed an antitrust violation. We think it obvious that the very notion of participating dentist status and all of the elements of Blue Shield's program contemplates and virtually requires an institutional reaction from the dental profession. At the very least, Blue Shield may not fairly have it both ways; it may not initiate dealings with the dentists and dental associations collectively and then claim an antitrust violation on the basis of the dentists' collective response.
6. The "participating dentist" system constitutes a major revision of relationships and practices in a market which Blue Shield characterizes as being, as of the 1960s and early 1970s, "still a cottage industry ... one of the last bastions of rugged individualism." Blue Shield brief, Doc. 972, p. 12. The "participating dentist" system was not born of the natural interaction of free market forces or from the development of a product having a natural or inherent commercial worth; rather, it depended for its birth upon statutes of the Pennsylvania General Assembly and other actions of Pennsylvania government. Apart from the implications of these factors upon the merits of the dentists' Noerr-Pennington[9] political expression defenses here, the fact is that the emergence of the participating dentist system into the dentists' workplace did not constitute so much the entry of a new competitor or a new product into the market place, but rather the entry of a prospective new set of rules, policies and operating procedures. Dentists did not want to be second-guessed in their diagnoses and treatment of patients and they did not want to submit x-rays and study models to be scrutinized by insurance carriers. Blue Shield and other insurance companies viewed themselves as more than mere financial intermediaries, but also as representing subscribers as bargainers of quality and cost of treatment. Thus, this observation is warranted: Blue Shield, which is unwilling in this antitrust case to commit itself to a position which incorporates the traditional building blocks of antitrust analysis (a relevant market and a particular product), and also seeks to protect by this litigation not so much a product as a system which incorporates features of policy and law as much as the features of a product, is seeking a result which would incapacitate the dentists from speaking out collectively and acting collectively with respect to this system.
*672 If Blue Shield may enter upon the scene of an industry such as the practice of dentistry and may impose a wholly different and arguably quite artificial new set of economic relationships between dentists and patients, may initiate practices which (although they do not violate the antitrust laws) may tend to influence a dentist's fees and charging policies, there is no conceivable reason why the antitrust laws should prohibit the dentists from discussing such a development or from deciding collectively to remain, as it were, independent market entities. There is certainly no evidence that the dentists "conspired" to do more than that; i.e., to maintain an industry of individual practitioners charging, on an individual dentist basis, what the market will bear. They did not by any stretch of the evidence conspire to fix prices; in truth, they viewed Blue Shield as the price fixer.
Having established our frame of reference by these foregoing observations, we turn to the question whether there are any facts presented by Blue Shield in connection with this Rule 56 motion which could, if proven, establish that a violation of the Sherman Act per se has occurred or that a violation has occurred by application of the rule of reason.
3. PER SE VIOLATION.
One of Blue Shield's arguments is that the dentists and associations violated the Sherman Act per se because their conduct stabilized prices in Market I (or sought to). They explain this argument by asserting that the dentists' opposition to Blue Shield's "discount pricing" was and is a substantial factor in their boycott activity. Blue Shield asserts that "[t]he evidence also shows that collective opposition to discount pricing, by non-participation, reduced the risk that non-pars would lose Blue Shield subscriber patients to pars. By collectively refusing to participate, dentists could balance bill and retain their patient volume." Blue Shield brief, Doc. 983, p. 11. Simplified, and considered in view of the facts cited by Blue Shield, this argument says nothing more than that the dentists, by refusing to become or remain participating dentists, could bill their patients their ordinary fee. Since Blue Shield has not shown that for individual dentists acting unilaterally to bill their ordinary fee in the presumptively free market for dental services had any tendency to fix or stabilize prices, there is no conceivable basis in the facts presented for the Court to find that the dentists' activities amounted to price fixing.[10]
The cases cited by Blue Shield in support of its per se argument are not analogous to this case. In United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940), oil companies and individuals had been acting in concert to purchase cheap (distress) gasoline, to keep it off the market and thereby to raise and stabilize the market price for gasoline. Here, there is no proof of any purpose or effort to raise or to stabilize prices. The evidence shows the dentists to have been concerned about losing control as individual economic entities over their pricing practices, and that is not at all the same thing. Blue Shield's argument is premised upon the supposition that with sufficient participating dentists, dental prices would be lower. The Court has, however, already concluded that Blue Shield's programs do not have any inherent effect upon the pricing of dental services, Pa. Dental Ass'n. v. Med. Serv. Ass'n. of *673 Pa., 574 F.Supp. at 467-468, a conclusion which Blue Shield in that context advocated. We have been presented with no sufficient basis here to alter that conclusion.
In Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 100 S.Ct. 1925, 67 L.Ed.2d 580 (1980), the Court considered the antitrust implications of beer wholesalers agreeing to end granting credit to beer retailers, and concluded that such an agreement would violate the Sherman Act. The Court found this to be a horizontal agreement to fix prices. That case does not support Blue Shield's position here, because there is no proof or basis for inference that the dentists' decision not to be participating dentists tended to fix prices or to standardize pricing practices. Again, on the contrary, we have concluded already that the participating dentist/UCR factor is a neutral factor insofar as pricing is concerned, and the evidence here does not disturb that conclusion.
In Arizona v. Maricopa County Medical Society, 457 U.S. 332, 102 S.Ct. 2466, 73 L.Ed.2d 48 (1982), a group of doctors agreed together upon maximum prices to charge for certain services. As we said earlier, in reference to Blue Shield's participating doctor plan, "[h]ere there is no setting of a maximum fee, minimum fee or any fee at all." 574 F.Supp. at 465. We will not hear Blue Shield now to claim that the dentists acted in opposition to Blue Shield's discount pricing.
Blue Shield cites St. Paul Fire & Marine Insurance Co. v. Barry, 438 U.S. 531, 98 S.Ct. 2923, 57 L.Ed.2d 932 (1978) in support of its companion contention of a per se violation based upon an unlawful group boycott. In St. Paul Fire, a group of physicians claimed that a group of insurance companies were boycotting them to coerce them to submit to new coverage ground rules. The issue there was whether the alleged boycott fell within the boycott exception to the general rule of antitrust immunity for the business of insurance under the McCarran-Ferguson Act. Blue Shield cites the case for the proposition that a boycott is "a method of pressuring a party with whom one has a dispute by withholding, or enlisting others to withhold, patronage or services from the target." 438 U.S. at 541, 98 S.Ct. at 2390. We can not conclude that the dentists boycotted Blue Shield. The evidence will not reasonably support such an inference. The dentists discussed and to some extent resolved not to be participating dentists, which happened to be a program which Blue Shield was trying to encourage. The dentists did not refuse to treat Blue Shield patients. They did not focus in their resolutions upon harming or boycotting Blue Shield as an entity, even though some individual speakers may have done so on a few occasions. They decided somewhat collectively that they did not want to become involved in a new and different system for the delivery of dental services, a system for which Blue Shield happened to be the principal sponsor. The dentists did not have a dispute with Blue Shield, and Blue Shield was not the dentists' target. The dentists had a dispute with the notion of third-party control over dentists' otherwise independent decision-making and the target of their dispute was the participating dentist system. That Blue Shield had a stake in that dispute does not make it a target of a boycott.
Even assuming arguendo that the evidence can be construed to support the inference that the dentists boycotted Blue Shield, there is not here a per se violation of the Sherman Act. "`[B]oycotts are not a unitary phenomenon.' P. Areeda, Antitrust Analysis, 381 (2d ed. 1974)." St. Paul Fire, 438 U.S. at 531, 98 S.Ct. at 2924. "[O]ne might even hold that any agreement affecting competitive behavior is necessarily an agreement that the collaborators will not buy or sell on any other terms; [footnote omitted] and there is no sharp logical distinction between refusing to sell at all and refusing to sell on condition." P. Areeda, Antitrust Analysis, 495-496 (3 ed. 1981). We have already concluded that Blue Shield's practices do not constitute an unlawful boycott of non-participating dentists. 574 F.Supp. at 468. Yet it is obvious *674 that Blue Shield does business with the non-participating dentists on much different terms than it does with participating dentists. We must recognize that Blue Shield did not enter the market in which it sells its participating dentist status to dentists, or the market in which it buys dental services from dentists, by negotiating with individual dentists. It sought to deal with the dentists as a group. If the dentists at that juncture had said as a group to Blue Shield that they (the dentists) would not agree to Blue Shield's terms, there would be no conceivable basis for Blue Shield to claim an antitrust violation. Under Blue Shield's own statement of the facts, what happened is that this process of negotiation persisted over a period of years until some of the dentists came to decide, more or less collectively, that they were not going to buy the package of which Blue Shield was the principal seller. Since Blue Shield in its own interests sought to and did deal with the dentists collectively, we do not believe that we now may find that collective action by the dentists constitutes an illegal per se group boycott. None of the cases cited by Blue Shield at pages 10-13 of its brief, Doc. 983, is inconsistent with this conclusion.
In Indiana Federation of Dentists v. FTC, 745 F.2d 1124 (7th Cir.1984), cert. granted, ___ U.S. ___, 106 S.Ct. 225, 88 L.Ed.2d 224 (1985), the Court held that if there is concerted conduct by a group of competitors banding together to protect themselves from non-group competitors, there is an illegal per se boycott. If not, the rule of reason is applicable. Here, Blue Shield is not a competitor of the dentists in Market I or any other market. We think that the rule of reason is clearly applicable.
4. RULE OF REASON.
We turn to our examination of the dentists' conduct under the rule of reason. The test is whether, on balance, the challenged agreement is one that promotes competition or one that suppresses competition. National Society of Professional Engineers v. United States, 435 U.S. 679, 688, 98 S.Ct. 1355, 1363, 55 L.Ed.2d 637. As already stated, we find there not to have been a boycott by the dentists of Blue Shield, but rather some discussion and agreement about not being participating dentists; i.e., not agreeing to third-party payment, to treatment review, to audits, and so on. Likewise, we find there to have been no fixing of prices. However, assuming arguendo the existence of a colorable antitrust violation, we now consider whether the conduct of the dentists, as established by Blue Shield's evidence, was anticompetitive.
Blue Shield asserts that the evidence is overwhelming that the dentists' primary motivation in urging non-participation was economic. We do not find this to be true. The evidence establishes very clearly that the dentists objected to the non-economic requirements of participating dentist status and to the prospect of being answerable to a third-party entity as to the standard and nature of the services they were providing to their patients. They objected to having a third party review their treatment of a patient. They objected to submitting x-rays and treatment plans to a third party.
As we concluded, above, this case is not like the Michigan State Medical Society case upon which Blue Shield relies. Here, there was no effort by the dentists to influence reimbursement rates. This case, on the other hand, is more closely analogous to Indiana Federation, supra, where the dentists had acted collectively with respect to particular conditions which third party group dental health insurers sought to impose; i.e., submission of x-ray forms to the insurer. The Court in that case concluded, first, that because there was no evidence that the dentists' practices were directed against competitors of the dentists (i.e., other dentists), there was no per se antitrust violation and the rule of reason was applicable. The court then applied the rule of reason and concluded that no antitrust violation had occurred, because there was no anticompetitive effect upon any relevant market. In applying the rule of reason, the court noted and relied upon the fact *675 that the dentists were continuing to do business with the insurers; i.e., they had not refused treatment of insured patients. The dentists merely had refused to comply with all of the conditions set forth by the insurers. Even though the insurers advanced these conditions as cost containment measures, the Court concluded that the dentists acted properly in joining together and deciding upon standards of dental care; even when that resulted in a concerted refusal by the dentists to deal with the insurers upon certain terms and conditions.
Here, as in the Indiana Federation case, the dentists did not refuse to deal with the health care insurers generally or with Blue Shield specifically. There is no evidence that the dentists did not treat Blue Shield patients. The concerted opposition here to "participating dentist" status is not materially distinguishable from the concerted refusal in Indiana Federation to comply with certain of the insurance companies' requirements. Blue Shield seeks to distinguish Indiana Federation by observing that "[t]herein, the refusal to deal involved withholding x-rays, a basic component of patient care. Herein, the Dentists refused to contract with Blue Shield at discount prices" Blue Shield brief, Doc. 983, p. 17. This distinction is based upon a view of the facts of this case which has no support in the record. We have already rejected the dentists' contention that Blue Shield's reimbursement mechanism sets prices, since each dentist is free to set his own price for dental services and to participate or not to participate with Blue Shield. 574 F.Supp. at 467-468. This conclusion, of course, does not foreclose the possibility that the dentists' motivation in not participating with Blue Shield was economic, but it does require the inference that there is no inherent tendency of the participating dentist system to discount dental prices.[11] However, there is no other evidence before us which reasonably supports the inference that the dentists' and associations' resolutions to not be participating dentists had an anticompetitive effect.
On the basis of the observations we have stated above, at pages 670-672, which we will not repeat here, we find the dentists' departicipation not to create any anticompetitive conditions in Market I. Stated very simply, we do not see the existence of a system of third-party payment for dental care to have any effect upon the pricing of dental services in Market I and, so long as dentists do not react differently to Blue Shield patients then they do to other patients and do charge the same fees to Blue Shield patients as are charged to other patients, competition in Market I is wholly unaffected by the dentists' communications and conduct with respect to the question of participating dentist status.
We believe that we must consider, however, the question framed in Indiana Federation, even though Blue Shield declines to frame the question in that manner: whether the dentists' communications and concerted conduct has an anticompetitive effect among dentists in their policy of dealing with health care insurers. 745 F.2d at 1141. This framing of the question, translated into terms of market definition, addresses Market II (see, page 669, supra), the market in which participating dentist status is bought and sold.[12]
*676 In Market II, unlike the equivalent market in Indiana Federation, there is here for all practical purposes only one seller, Blue Shield. This is significant because negotiations between the dentists and the insurers collectively, which in Indiana Federation was seen to be concerted action by the dentists to refuse to comply with certain of the insurers' conditions, here assumes the appearance of a boycott of Blue Shield as an entity because it is the principal seller of participating dentist status. Despite this appearance, we find this case to be materially indistinguishable from Indiana Federation because the concerns about which the dentists here were negotiating and which caused their concerted conduct were legitimate concerns relating to the quality of care and were not anticompetitive.
Blue Shield maintains here that the dentists were motivated by economic considerations and not by quality of care considerations. However, we find there to be no evidence to reasonably support the inferences which Blue Shield would have us draw. Blue Shield claims in a conclusory fashion that the dentists' motivations were economic, but acknowledges that the evidence shows that the dentists did not want to be second-guessed in their diagnosis and treatment of patients, did not want to submit diagnostic aids and study models, and simply did not want third parties to intrude into the traditional dentist-patient relationship.[13] These views and motivations on the dentists' part may or may not have been socially desirable. So long as the dentists' motivations were not anticompetitive in purpose or in effect, these are matters outside the scope of the antitrust laws. The desirability or undesirability from a social perspective of the prospect of the defeat of the participating dentists system by dentists' non-participation is a matter which might be within the province of the Pennsylvania General Assembly to address; this Court may not address it if no antitrust violation has occurred.
We conclude that, by application of the rule of reason, there are no material questions of fact in dispute and the third-party defendants are entitled to judgment as a matter of law with respect to the dentists' and associations' rejection of Blue Shield participating dentist status. We add that, were we presented with facts demonstrating that the dentists had involved themselves in concerted action to negotiate with Blue Shield over such matters as fees and rates, or that the dentists or associations had taken or threatened any repercussions *677 against dentists who were or sought to be participating dentists, or that the dentists who chose not to participate did not do so on the basis of their own independent judgment and free will but rather because of pressures brought to bear upon them by other dentists or the associations, we would reach a different conclusion.
5. BLUE SHIELD'S "SHAM ACTIVITIES" CONTENTIONS.
The other phase of activity by the dentists which Blue Shield claims to be in violation of the antitrust laws is the dentists' and associations' legislative and judicial efforts begun in 1977 and continuing to the present. Blue Shield claims that the purpose of these challenges, protests and legal actions was to coerce Blue Shield to change its business practices so as to reduce price competition among dentists and to preserve the private practice fee-for-service method of financing dental services. Blue Shield claims that these activities constituted "shams" to disguise anti-competitive conduct and therefore are not entitled to the general immunity attendant to persons' petitions to their Government under the Noerr-Pennington doctrine.[14]
Blue Shield, as a non-profit health service corporation and the promoter of the system of participating physicians and dentists involved in this case, is the embodiment of a legislatively enacted system of health care financing introduced into the affairs of a profession which was, in Blue Shield's phrase, "one of the last bastions of rugged individualism." Considering this background, it is not possible to view the approaches made by the dentists and their associations to the legislatures, the courts and the Commonwealth's administrative agencies as a "sham," something other than legitimate collective petitioning of the government. It is a more accurate view of the dentists' conduct, viewing all of the evidence relied upon by Blue Shield, to perceive of all of their conduct at issue in this case, from the very inception of the participating dentist system, as conduct protected under the Noerr-Pennington doctrine. Even though the first court case was not brought until 1977 and the dentists' departicipation began in 1974, the evidence makes it clear that the actions taken by the dentists in their negotiations with Blue Shield, including their departicipation. were the direct result of the legislation and administrative agency rulings authorizing and establishing Blue Shield's participating dentist system. Blue Shield may itself be seen to be an instrument or agent of Pennsylvania government for the purposes of this case; that is, because it enjoys a special status as a non-profit health service corporation and may engage in practices which its profit-making insurance company competitors may not, it is quite possible to view the dentists' and associations' interactions with Blue Shield as in essence the petitioning of the government.
Blue Shield is an instrumentality of the government in the sense that it is a legislatively created entity (with respect to its characteristics of relevance to this case) designed, authorized and empowered to execute Pennsylvania public policy. It is characteristic of this special status enjoyed by Blue Shield that its enabling legislation causes it to distinguish between under-income and over-income patients for purposes of the billing of patients by participating doctors and dentists, a provision that is not generally consistent with the activities of the natural forces of a free market. However, we do not reach the question whether the dentists' concerted conduct, apart from their legislative and judicial efforts, are subject to the protection of the Noerr-Pennington doctrine, inasmuch as we have already decided that those activities did not violate the Sherman Act.
Little discussion need be devoted to the question whether the dentists' court actions, legislative lobbying and administrative agency litigation, commencing in 1977, falls within the Noerr-Pennington exception to the antitrust laws. Blue Shield says *678 it is sham activity, designed to force Blue Shield to change its practices. Blue Shield's assertion, however, is not supported by any facts or law. Blue Shield's argument is, in essence, that because the dentists were illegally boycotting the "participating dentist" program, operated by Blue Shield, any contemporaneous action in the various governmental bodies against Blue Shield was a sham. We conclude, however, that there was no illegal boycott. Moreover, there is no evidence in Blue Shield's facts to demonstrate that the dentists and associations were doing other than advocating the positions they had been advocating all along, many of which are involved in this case. Blue Shield's assertion that the dentists were involved in a sham is unsupported.
III. CONCLUSION.
"... [C]ourts should not permit factfinders to infer conspiracies when such inferences are implausible, because the effect of such practices is often to deter pro-competitive conduct." Monsanto, 465 U.S., at 762-764, 104 S.Ct. at 1470 [Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984)]; Matsushita Elec. Ind. Co. v. Zenith Radio, ___ U.S. ___, 106 S.Ct. 1348, 1360, 89 L.Ed.2d 538 (1986).
This proposition is no less true as applied to the inference of an unlawful motive from circumstances not reasonably suggesting any such unlawful motive. By all appearances, the dentists' motive was pro-competitive. Assuming that Blue Shield proves all of the facts it has presented for purposes of summary judgment, we have no doubt that this is what we would find. The dentists did not seek to raise, lower or stabilize prices, but to preserve a market in which excellence was rewarded and inferior service penalized. We cannot reasonably deny summary judgment and require a trial when the inferences that Blue Shield seeks to have us draw are not reasonable. As in Matsushita, there is little reason to be concerned that by granting summary judgment, illegal conspiracies will be encouraged. There is no evidence or indication here, for example, that any significant number of dentists will be influenced to act in concert not to participate with Blue Shield, even though they perceive it to be in their best interest to do so, merely because other dentists or the dental associations are advocating that they not participate. There is no indication that the PDA or any of the other associations wield such power or potential power over dentists that a dentist could be penalized or harmed in any manner for participating with Blue Shield. That is not the theory of Blue Shield's case here, in any event.
The proposition that the learned professions are subject to the antitrust laws does not advance Blue Shield's cause nearly so far as Blue Shield would have it. It means, of course, that the dentists may not fix prices. Nor may they concertedly refuse to deal with other commercial entities for anticompetitive purposes. It does not mean that they lose the prerogative to discuss and agree upon issues generally affecting their professional status and practices.
We must consider the possible effects of a ruling that the dentists' agreement not to participate does not violate the antitrust laws. Will the participating dentist system be destroyed? Will dentists choose to departicipate en masse? We think not, but will assume otherwise, that this will happen. We note, again, that any evidence of coercion by dentists upon other dentists to departicipate would support an antitrust violation, as would evidence of efforts by the dentists to fix or stabilize prices in the dental marketplace. Therefore, we will assume that the dentists' en masse departicipation will be the result of their collective assessment that their practice should not be subjected to a set of conditions involving a third party in the treatment relationship between dentist and patient. The result is that, absent some action by the Commonwealth of Pennsylvania government, or some modification by Blue Shield of some of the components of its participating dentist program to make it less objectionable to the dentists, Blue Shield will be relegated *679 to providing a form of dental insurance contract which involves only two parties, Blue Shield and the insured individual or group; i.e., a simple reimbursement or partial reimbursement for dental costs to the dental patient. We may find that result regretable, but we do not find it to be anticompetitive. We see no reason, in the evidence or in logic, why this result should affect the price of dental services. Only if we were to assume for some reason that the market for dental services is not a free market could we conclude that the failure of the participating dentist system to work as Blue Shield hoped it would work is the result of anticompetitive forces or is anticompetitive in effect. Blue Shield has not asked us to make such an assumption in this case, nor is there evidence in this case to support such an assumption. On the contrary, Blue Shield's description of a market characterized by rugged individualism is perfectly consistent with all of the evidence in this case the non-participating dentists' consistent theme and objective has been to remain independent entities in every possible respect. The dentists did not act in concert to eliminate the economic advantages of superior ability, efficiency and products or to ameliorate the economic disadvantages of an inferior dental practice; quite the contrary, they acted to preserve these. Unless we radically misunderstand the concept of free trade and the objectives of the antitrust laws, this is not the sort of activity that these laws seek to prevent.
We recognize that when motivation and intent are in issue, summary judgment is not very likely to be appropriate. It is important here to analyze this case very precisely in relationship to that principle. When we do, we find that there is really not a genuine material factual dispute relating to motivation and intent. The picture is clear, and it is this: Some individual dentists did form and express a view of their position vis-a-vis Blue Shield and the participating dentist concept that incorporated the notion that Blue Shield should be driven out of business through dentists' departicipation. These individual dentists are not defendants in this case. These individual dentists' statements and conduct are not, in view of all of the evidence, either representative or indicative of the motivation and intent of the dentists and associations generally. The motivation and intent of the dentists and associations generally was directed against the overall body of rules and practices associated with the participating dentist concept. It was the dentists' and associations' view, which was entirely reasonable and accurate, that if the dentists were to become participating dentists on a universal or nearly universal basis, dentists' independence and the traditional dentist-patient relationship would be largely sacrificed and dentists would come under the control of third-party insurers for purposes of a very broad range of the dentist's affairs including his treatment decisions and his billing practices. Thus, there is no genuine material factual dispute as to the question whether the dentists and associations were motivated by a desire to harm Blue Shield competitively. There is no material evidence of an effort on the dentists' part to harm Blue Shield as an entity in any market, and certainly not as a purchaser of dental services in Market I. The evidence upon which Blue Shield relies, upon a structured and precise review of it, reasonably supports no more than the inference that many of the dentists and their associations sought to defeat the success of a major systemic change in the practice of dentistry and in the delivery of dental services. This dispute between the dentists and the forces seeking to change the way that dental services are administered will no doubt give rise to many legal and policy issues in various forums for many years to come; however, in the context of the Sherman Act, this objective and these efforts on the part of the dentists may not reasonably be seen to be anticompetitive.
For these reasons, the third-party counterclaim defendants' motion for summary judgment will be granted. An appropriate Order will be issued.
NOTES
[1] The third-party counterclaim defendants are the Pennsylvania Dental Association, the Delaware Valley Dental Society, the Erie County Dental Association, Inc., the Harrisburg Area Dental Society, the Luzerne County Dental Society, the Montgomery-Bucks County Dental Society, the Odontological Society of Western Pennsylvania, the Scranton Dental Society, the York County Dental Society, the Fifth District Dental Society of the Pennsylvania Dental Association, Dennis W. King, D.D.S., Charles M. Ludwig, D.D.S., Theodore R. Paladino, D.D.S., Thomas L. Perkins, D.M.D., Kay F. Thompson.
[2] The third-party counterclaim plaintiff is Pennsylvania Blue Shield.
[3] Blue Shield, specifically "reserves ... its right to set forth ... additional portions of its case ..." (Doc. 972, p. 6). We are satisfied that Blue Shield has set forth a comprehensive statement of its probative evidence, however.
[4] A capitation program provides for treatment by a specific group of physicians for the insured patients.
[5] When insured dental patients buy dental services from dentists in this market, pay the dentist directly, and receive reimbursement from the insurance company, the insurance company is not a purchaser of dental services.
[6] Blue Shield considers this to be the relevant market for purposes of this case.
"... [A] Blue Shield plan's status as a buyer and providers' status as sellers of services is basic to the application of the antitrust laws to health care reimbursement, Group Life & Health Insurance Co. v. Royal Drug Co., 440 U.S. 205, 214 [99 S.Ct. 1067, 1074, 59 L.Ed.2d 1] (1979). See also, Maricopa, supra; Va. Academy of Clinical Psy. v. Blue Shield of Va., 624 F.2d 476, 480, 483 (4th Cir.1980). Blue Shield pays for services rendered its subscribers, either to the par dentist or the subscriber, and the dentist receives payment for his services. The essence of the parties' relationship and their dispute revolves around Blue Shield's terms and conditions of payment and the Dentists' collective opposition thereto."
Blue Shield brief, Doc. 983, pages 13-14.
[7] See, also, United States v. American Medical Association, 110 F.2d 703 (D.C.Cir.1940); 130 F.2d 233 (D.C.Cir.1942).
[8] Blue Shield's brief, Doc. 972, p. 16.
[9] Eastern Railroads' Railroad Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965).
[10] Blue Shield intimates that the dentists sought to retain certain advantages of Blue Shield's presence in the market without doing business with Blue Shield. This is misleading. Blue Shield's practice, the record indicates, is to pay benefits to the patient when the dentist is not a participating dentist. Thus, the dentist's relationship to his patient is largely unaffected by Blue Shield's presence in the background as a third-party payor. To the extent that patients, because of insurance coverage, purchase services they would otherwise forego, that is merely a neutral factor arising naturally from the existence of this sort of insurance and nothing the dentists are responsible for. Furthermore, even if Blue Shield did pay non-participating dentists directly, thereby benefiting them by virtue of certainty of payment, that too would merely be a neutral factor arising from the existence of insurance coverage in the market.
[11] The UCR reimbursement mechanism, as we observed, discounts some dentists' usual fees, in exchange for which the dentist realizes certainty of payment. 574 F.Supp. at 469. The fact that some dentists' fees are discounted does not reasonably support the inference that the dentists' objections to the participating dentist mechanism had the purpose or effect of stabilizing or fixing prices for dental services or that the dentists' unwillingness to participate had an anticompetitive effect.
[12] Another market might briefly be considered the market in which various dental insurers sell various forms of prepaid dental insurance. Blue Shield can not reasonably claim any antitrust injury in that market as the result of the dentists' conduct. Blue Shield has 32 to 35% of all dental prepayment plans in this market. See, App. to dentists' brief in opposition to motion for summary judgment, Doc. 879, pages 52-53. The dentists, in support of their summary judgment motion, have presented very persuasive evidence that Blue Shield has not suffered antitrust injury in that market. While Blue Shield does not have a monopoly in that market, 574 F.Supp. at 472, it is beyond any question the dominant seller in that market.
Blue Shield's position that the dentists' departicipation has an anticompetitive effect in that market may be seen to be premised upon its contention that, but for the dentists' departicipation, it could sell for lower prices in that market and in that sense make that market more competitive. As we have seen, however, that contention is premised upon the unsupported speculation that Blue Shield's program "discounts" the cost of dental services. As we have said, we do not find the evidence to show this to be true and we found to the contrary in the earlier decision. If Blue Shield's objective is in fact to gain "control" of the dentists so as to discount the price of dental services, (1) we erred in our earlier decision, and (2) the dentists' concerted conduct, to the extent that it was motivated by economic factors, was pro-competitive because it sought merely to maintain a free market in Market I; that is, a market in which economic power is dispensed, competition is high, and a competitor stands to prosper upon his or her merits. Since the dentists are not in the insurance market in any sense, that market is not a relevant market for purposes of this case.
[13] Blue Shield cites, as an example of the boycott against it, the PDA's refusal to print an advertisement in the PDA's publication by which Blue Shield would have sought to solicit additional participating dentists in central Pennsylvania. There is no doubt, of course, that PDA was and apparently remains opposed to the participating dentist concept. The rejection of Blue Shield's advertisement is but one of many manifestations of that opposition. The resolutions of the dentists who agreed that they would not participate is another. But the fact that many of the dentists and PDA opposed the concept of participation with Blue Shield and acted consistent with that philosophy in their affairs certainly does not of itself warrant the conclusion that their actions were anticompetitive. If that were so, protected speech and associational activities would be seriously jeopardized.
[14] See, footnote 9, supra. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1726330/ | 970 So. 2d 827 (2007)
PULIDO
v.
STATE.
No. 1D07-1541.
District Court of Appeal of Florida, First District.
December 13, 2007.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260493/ | 549 A.2d 1065 (1988)
Terrence W. CRAW
v.
DISTRICT COURT OF VERMONT, UNIT NO. 1, WINDHAM CIRCUIT and William H. Conway, Jr., Commissioner of Motor Vehicles.
No. 86-602.
Supreme Court of Vermont.
June 17, 1988.
*1066 Jesse M. Corum, IV, and Edwin P. Gale, Law Clerk, on the brief, of Gale, Gale & Corum, Brattleboro, for plaintiff-appellant.
M. Patricia Zimmerman and Mark T. Cameron, Windsor County Deputy State's Attys., White River Junction, for defendants-appellees.
Before ALLEN, C.J., and PECK, GIBSON, DOOLEY and MAHADY, JJ.
PECK, Justice.
Plaintiff, Terrence W. Craw, appeals from a judgment of the Windham Superior Court upholding the suspension of his automobile driver's license as ordered by the district court. The district court's order was predicated on his alleged refusal to submit to a blood-alcohol test after having been stopped on suspicion of operating under the influence of intoxicating liquor (DUI). See 23 V.S.A. § 1205(a). We affirm.
The proceedings before the superior court were not evidentiary in nature. The parties agreed that the case could be decided on the transcript of the refusal hearing in district court,[*] the memorandums submitted, and the arguments of counsel.
The sole issue presented by plaintiff for our review is whether a motorist, stopped by the police on suspicion of DUI, can be found, on the basis of his conduct alone, to have refused to submit to a breath test as required by 23 V.S.A. § 1202, when he was not asked in specific terms to give a sample of his breath, nor advised of his attendant statutory rights as provided by 23 V.S.A. § 1202(c).
Although this is a single issue case, the result hinges on the facts disclosed by the record. For the most part, they are established by the testimony of two police officers who testified for the prosecution during the evidentiary hearing in the district court; the plaintiff did not take the stand, nor was there any direct evidence offered on his behalf. Nevertheless, because of the importance of the factual pattern to an understanding of our conclusion, it is appropriate that the facts be outlined here in some detail.
At approximately ten o'clock in the evening of March 30, 1986, an officer of the Vernon Police Department, patrolling in a police cruiser, observed a truck being operated in a manner he considered erratic. After some difficulty, since the operator appeared to ignore the siren and flashing lights of the cruiser, the officer succeeded *1067 in stopping the truck. The operator and sole occupant was the plaintiff.
The officer noted some slurring in plaintiff's speech and glassiness in his eyes. At the former's request, plaintiff attempted certain dexterity tests which the officer regarded as having been performed in an unsatisfactory manner. This led the officer to believe that plaintiff was under the influence of intoxicating liquor, and the officer asked him to take a nonevidentiary alco-sensor test; plaintiff refused this request.
Next, the officer told plaintiff he would have to go with him to the police station for DUI processing. Again, plaintiff refused. At the hearing in the district court, the officer testified: "He said he did not want to do any further testing, that he had done enough ... I asked him more than once to come back to the office for the testfor the testingand he refused to come." Plaintiff announced instead that he intended to go home.
Because of plaintiff's belligerent refusal to cooperate, the officer apparently anticipated there might be trouble. He returned to the cruiser and radioed for backup assistance. When he returned to the truck he found the plaintiff had reentered the cab and was prepared to drive away. The officer warned him not to drive and tried to reach the keys, but plaintiff pushed his hand away, started the truck, and drove off with the officer again pursuing in his cruiser.
The pursuit was relatively short; plaintiff drove to the residence where he lived as a tenant. The officer arrived and followed him into the house, out again through another door, and into a cornfield at the rear. At this point a second officer appeared in response to the earlier backup call. The two followed plaintiff, finally confronting him in the field.
The second officer tried to persuade plaintiff to accompany them to the station for processing. These requests were countered with cursing by plaintiff and statements that he wasn't going anywhere, and attempts at violence. The officer testified that "Mr. Craw was extremely upset ... displaying violent tendencies." It became apparent "it was going to be a physical confrontation by the actions of Mr. Craw.... Mr. Craw was threatening the life of [the first officer], swinging, clenching his fist, reaching out to what appeared to be stranglingattempting to take the throat of [the first officer]."
The curtain closed on this ominous scene when plaintiff's landlord appeared and agreed with the police to take the keys to the truck. He gave further assurance that he would take care of plaintiff and not permit him to drive again that night. The second officer, who was the superior, convinced that plaintiff would not come to the station voluntarily for processing, and believing that he would probably be returned to his residence after processing in any event, accepted the landlord's assurance and the officers left. They believed this course of action to be the most salutary under the circumstances in order to avoid needless violence and possible injury to plaintiff, his landlord and to themselves.
Initially, the superior court concluded correctly that it had no jurisdiction under V.R.C.P. 75, the device by which plaintiff attempted to reach that court for a review of the district court's order. See Pfeil v. Rutland District Court, 147 Vt. 305, 306, 515 A.2d 1052, 1054 (1986). But following the lead of this Court in Pfeil, the superior court treated the appeal as a petition for extraordinary relief, and accepted jurisdiction on that basis. There was no objection to this procedure by either party, and we find no fault with the ruling. Nevertheless, we believe it is appropriate as a cautionary admonition to repeat our warning stated in Pfeil: "[O]ur holding here in no way guarantees persons charged with DUI the right to appeal from a district court's ruling in these matters." Id. at 308, 515 A.2d at 1055.
Departing from the procedural aspect of the hearing before the superior court, it is clear that, in reaching their respective but identical decisions, both the district court and the superior court relied on Stockwell v. District Court, 143 Vt. 45, 460 A.2d 466 (1983). In that case we held *1068 that, in the absence of an express statement by a DUI suspect declining to be tested, a refusal "may be implied from the totality of the surrounding facts and circumstances"; this necessarily includes the suspect's conduct. Id. at 50, 460 A.2d at 468. Similarly, the State argued below and before this Court that Stockwell should dictate the outcome in this case.
On the other hand, plaintiff argues strenuously that his case is distinguishable from Stockwell on their respective and controlling facts. In Stockwell, the DUI suspect was taken, albeit forcibly and with continuing resistance, to the state police barracks for processing. At the barracks the suspect was asked expressly to submit to a breath test for evidentiary purposes. He was fully advised of the statutory rights attendant upon the request, and he talked by phone with a public defender contacted on his behalf by the police. He was informed that, from that point, he had thirty minutes in which to decide whether he would agree to or refuse the requested breath test. Nevertheless, before the expiration of the thirty minutes the police concluded that he had refused the test. This conclusion was based on his ongoing violent and abusive conduct both verbal and physical. In our opinion disposing of the case, this Court said:
Plaintiff was consistently belligerent and uncooperative throughout. He showed not the slightest indication that he was giving any serious consideration to the request [to submit to testing] made of him several times; he pushed the officers well beyond the limits of any further necessary patience....
On the record before us we hold that the police were justified in concluding... that plaintiff had refused to submit to testing [although there had been no express refusal].
Id. at 51, 460 A.2d at 469.
In attempting to distinguish the matter before us from the earlier case, plaintiff points out that, unlike Stockwell, the Vernon police never asked him expressly to take a breath test, nor did they advise him of the statutory rights which normally accompany such a request. He concludes that he could not be found to have refused a test he was never asked to take.
We are not persuaded by this argument. It draws too fine and technical a line which leads to a statutory absurdity. In affirming the suspension order of the district court. Superior Judge O'Dea said that the officers reached their decision against further violence, with its potential for injury to the plaintiff, the landlord and themselves, when they became satisfied that he "would continue his violent and dangerous resistance to their efforts to process the petitioner consistent with his statutory rights."
It is manifest here that the police were performing their lawful duties in a lawful manner. They were met with further criminal conduct on the part of plaintiff: resistance, with violence, to an attempted arrest. Judge O'Dea wrote further:
To say that a police officer must recite a motorist's rights in audible tones while chasing a violent citizen across a cornfield was too absurd for the trial judge in the District Court and too absurd for this trial judge. In this case [plaintiff] himself deprived the police officers of any opportunity to apprise him of his rights, and now as a reward for his outrageous behavior he asks the Court to find that he was deprived of his rights.
We share these sentiments; they have the persuasive merit of plain common sense. But equally significant, as noted in our statement of the facts, after his questionable performance of certain dexterity tests at the scene of the initial stop, plaintiff refused the alco-sensor test. He refused the request to accompany the officer to the police station for testing, saying he did not want any more tests, "that he had done enough." He drove away from the scene in outright defiance of the officer's express injunction against further driving. Later, when confronted by the police in the field behind his residence, he refused once again to go with them to the station for processing. He countered their requests with cursing and attempted assaultive violence.
*1069 While plaintiff may be correct in his assertion that he was not asked expressly to take a "breath test" in specific words, his refusals to take an alco-sensor test and to go to the station for the expressed purpose of testing cannot be overlooked. He gave every indication that he would refuse to comply with virtually any request made of himwith violence if need be.
Plaintiff's argument would have this Court hold that, under the facts here, the controlling statutes must be construed to require the police to verbalize a scrupulously defined request, together with a statement of parallel rights, to a physically violent, defiant and cursing DUI suspect, capturing and restraining him if necessary in order to do so, at the risk of serious physical injury to all persons involved, before a refusal can be implied from a suspect's conduct. Such a holding would glorify a technicality and exalt an absurdity. A presumption obtains against a construction that would lead to absurd results. See Menut & Parks Co. v. Village of St. Johnsbury, 114 Vt. 41, 45-46, 39 A.2d 342, 345 (1944).
We agree with the view of both courts below, and hold that, on the facts, this case is controlled by our decision in Stockwell. Plaintiff's egregious and continuing conduct justified the police in concluding that he had refused any further testing that might be asked of him. In the words of Stockwell, "he pushed the officers well beyond the limits of any further necessary patience." Stockwell, 143 Vt. at 51, 460 A.2d at 469. If, as plaintiff appears to suggest, our holding here will constitute another turn of the screw, tightening our previous holding, it is fully justified on the record before us.
Affirmed. The temporary stay of the suspension order is dissolved. The order to be enforced by the Commissioner of Motor Vehicles pursuant to the provisions of 23 V.S.A. § 1205(a).
NOTES
[*] The transcript of the district court proceedings is also before this Court as part of the record on appeal. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1750542/ | 545 So. 2d 537 (1989)
John Spyridon MARKZANNES
v.
BERMUDA STAR LINE, INC. et al.
No. 89-CC-1144.
Supreme Court of Louisiana.
June 30, 1989.
PER CURIAM.
Granted. The judgment of the court of appeal is set aside, and the judgment of the district court is reinstated. Louisiana courts may apply Louisiana procedural law in causes of action brought in Louisiana courts. Missouri v. Mayfield, 340 U.S. 1, 71 S. Ct. 1, 95 L. Ed. 3 (1950). La.C.C.P. art. 123 B, which authorizes dismissal on forum non conveniens grounds of a claim predicated solely on a federal statute based on acts or omissions originating outside the state, is not applicable to causes of action brought under 46 U.S.C. App. § 688 or the federal maritime law. La.C.C.P. art. 123 C.
CALOGERO and DENNIS, JJ., would grant the writ and docket for argument. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260458/ | 125 Cal. Rptr. 2d 277 (2002)
101 Cal. App. 4th 1443
J. Douglas WHYTE et al., Plaintiffs, Cross-defendants and Respondents,
v.
SCHLAGE LOCK COMPANY, Defendant, Cross-complainant and Appellant;
Ingersoll-Rand Company, Defendant and Appellant.
No. G028382.
Court of Appeal, Fourth District. Division 3.
September 12, 2002.
*280 Fisher & Phillips, John M. Poison, Robert Yonowitz and John E. Lattin IV, Irvine, for Defendant, Cross-complainant *281 and Appellant and Defendant and Appellant.
Sonnenschein Nath & Rosenthal, Martin J. Foley, Michael E. Pappas and Azniv Ksachikyan, Los Angeles, for Plaintiffs, Cross-defendants and Respondents.
OPINION
FYBEL, J.
The doctrine of inevitable disclosure permits a trade secret owner to prevent a former employee from working for a competitor despite the owner's failure to prove the employee has taken or threatens to use trade secrets. Under that doctrine, the employee may be enjoined by demonstrating the employee's new job duties will inevitably cause the employee to rely upon knowledge of the former employer's trade secrets. No published California decision has accepted or rejected the inevitable disclosure doctrine.
In this opinion, we reject the inevitable disclosure doctrine. We hold this doctrine is contrary to California law and policy because it creates an after-the-fact covenant not to compete restricting employee mobility.
This holding leads us to affirm the trial court's order denying the application of Schlage Lock Company (Schlage) for a preliminary injunction and granting the motion of J. Douglas Whyte (Whyte) and Kwikset Corporation (Kwikset) to dissolve a temporary restraining order. We reach the issue of inevitable disclosure because we conclude certain information Schlage seeks to protect does constitute trade secret, but the evidence presented below, viewed (as it must be) through the lens of the applicable standard of review, fails to establish actual or threatened misappropriation.
FACTS
Schlage is a subsidiary of defendant Ingersoll Rand Company (Ingersoll Rand). Kwikset and Schlage manufacture and sell locks and related products. They are fierce competitors and vie intensely for shelf space at The Home Depot, which is the major seller of locks and alone accounts for 38 percent of Schlage's sales.
Whyte worked as Schlage's vice-president of sales and was responsible for sales to The Home Depot and other "big box" retailers such as HomeBase, Lowe's, Menard's, and Sears. Whyte signed a confidentiality agreement to protect Schlage's proprietary information and agreed to abide by Schlage's code of ethics, which forbids disclosure of confidential information for personal or noncompany uses. Whyte did not sign a covenant not to compete.
The Home Depot periodically conducts a review of its suppliers' product lines, prices, pricing and marketing concessions, and ability to deliver product. The Home Depot uses this "line review" to determine which products it will sell and which products to remove from its shelves. As part of the line review, The Home Depot usually asks vendors, such as Kwikset and Schlage, to submit proposals for pricing and marketing concessions and for the amount of promotional discounts and advertising funds, and to present information about product changes and new products.
The Home Depot conducted a line review with Schlage in February 2000. The Home Depot followed Schlage's recommendation to remove Kwikset's Titan brand of locks and to expand Schlage's presence on its shelves. Whyte participated in the line review and in drafting the line review agreement confirming the business relationship between Schlage and The Home Depot.
Whyte's sales abilities impressed Kwikset's president, Christopher Metz. Metz realized Whyte "was killing my *282 team," and asked him "what it would take to get him to leave Ingersoll Rand...." Whyte apparently got what it took, for he accepted a position with Kwikset on June 3, 2000. He did not resign from Schlage, however, until June 14after participating on behalf of Schlage in confidential meetings with The Home Depot on June 5.
Whyte departed Schlage on June 16, 2000. Schlage was not pleased with Whyte, and the parting was not amicable. Schlage contends Whyte left to revenge belittling comments made by Schlage's president, Robert Steinman, and contends Whyte disavowed a confidentiality agreement, stole trade secret information (including a copy on computer disk of the line review agreement with The Home Depot), and lied about returning company information. Whyte denies taking any trade secrets, claims he reaffirmed the confidentiality agreement, and contends that in the exit interview on June 16 Steinman vowed to destroy his career.
On June 25, 2000, Whyte became Kwikset's vice-president of sales for national accounts. His job duties at Kwikset are substantially similar to those at Schlage: handling the lock products account for The Home Depot and other "big box retailers."
PROCEEDINGS BELOW
Whyte's defection to Kwikset ignited a firestorm of litigation. Ingersoll Rand sued Whyte in Colorado state court, seeking an injunction against him. Ingersoll Rand urged the Colorado state court to issue an injunction based upon the doctrine of inevitable disclosure. The Colorado court denied the request for an injunction on June 27, 2000.
Whyte then filed this suit against Ingersoll Rand and Schlage on June 30, 2000. Whyte sought, among other things, damages for interference with contract and a declaration of his freedom to work for Kwikset.
On July 11, 2000, Schlage filed a cross-complaint for unfair competition, misappropriation of trade secrets, breach of contract, breach of fiduciary duty, intentional and negligent interference with economic relations, and conversion. The next day, Schlage brought an ex parte application to restrain Whyte temporarily from using or disclosing trade secrets, pending a hearing on an application for a preliminary injunction. The court granted the ex parte application on July 25 and issued a temporary restraining order enjoining Whyte from using or disclosing 20 categories of trade secret information and ordering Whyte to return any such information in his possession. In response, Whyte turned over a kitchen-sized garbage bag of shredded documents and a Ziploc bag containing seven destroyed "floppy" disks and nine destroyed "zip" disks.
The court permitted expedited discovery, and rapid-fire discovery ensued. The results of this discovery, as well as declarations, exhibits, and briefs were submitted in support of and in opposition to the application for preliminary injunction. At the first hearing on the application, the court rejected the inevitable disclosure doctrine, but took the matter under submission to consider issuing an injunction based upon actual or threatened misappropriation.
The parties submitted additional declarations, exhibits, requests for judicial notice, and briefs before the next hearing. Whyte filed a motion to dissolve the temporary restraining order, which Schlage opposed.
At a second hearing on October 24, 2000, the court stated it would deny the application for an injunction. In announcing the ruling, the court stated the information Schlage sought to protect was not trade *283 secret: "I don't think these things rise I don't think these are trade secrets." The court reflected, "I think Mr. Whyte should be able to go about his business," but added, "[c]ertainly if it is proven somehow that he used specific information, well, there is money damages."
Later on October 24 the court entered a minute order denying the preliminary injunction and granting Whyte's motion to dissolve the temporary restraining order without stating its reasons. Schlage then filed (and withdrew) a lengthy motion for reconsideration.
Schlage and Ingersoll Rand appealed from the October 24 order. Although-Ingersoll Rand did not cross-complain for injunctive relief and did not bring or join in the application for a preliminary injunction, it is a party to the complaint and is sufficiently aggrieved by the order to have standing to appeal. (Code Civ. Proc., § 902; County of Alameda v. Carleson (1971) 5 Cal. 3d 730, 736, 97 Cal. Rptr. 385, 488 P.2d 953.) The trial court denied Schlage's application for a stay pending appeal, and we denied Schlage's petition for writ of supersedeas.
STANDARD OF REVIEW
Injunctions in the area of trade secrets are governed by the principles applicable to injunctions in general. (Hilb, Rogal & Hamilton Ins. Services v. Robb (1995) 33 Cal. App. 4th 1812, 1820, fn. 4, 39 Cal. Rptr. 2d 887.) "In deciding whether to issue a preliminary injunction, a trial court weighs two interrelated factors: the likelihood the moving party ultimately will prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction." (Hunt v. Superior Court (1999) 21 Cal. 4th 984, 999, 90 Cal. Rptr. 2d 236, 987 P.2d 705.) "`Generally, the ruling on an application for preliminary injunction rests in the sound discretion of the trial court. The exercise of that discretion will not be disturbed on appeal absent a showing that it has been abused. [Citations.]'" (Ibid.) Denial of a preliminary injunction will be upheld on appeal if the trial court did not abuse its discretion with respect to either the question of success on the merits or the question of irreparable harm. (Cohen v. Board of Supervisors (1985) 40 Cal. 3d 277, 286-287, 219 Cal. Rptr. 467, 707 P.2d 840; Hart v. Cult Awareness Network (1993) 13 Cal. App. 4th 777, 785, 16 Cal. Rptr. 2d 705.)
Whether the trial court granted or denied a preliminary injunction, the appellate court does not resolve conflicts in the evidence, reweigh the evidence, or assess the credibility of witnesses. (Hilb, Rogal & Hamilton Ins. Services v. Robb, supra, 33 Cal.App.4th at p. 1820, 39 Cal. Rptr. 2d 887.) "`[T]he trial court is the judge of the credibility of the affidavits filed in support of the application for preliminary injunction and it is that court's province to resolve conflicts.'" (Ibid.) Thus, even when presented by declaration, "if the evidence on the application is in conflict, we must interpret the facts in the light most favorable to the prevailing party and indulge in all reasonable inferences in support of the trial court's order." (Ibid.)
Schlage acknowledges the abuse of discretion standard of review, but misapplies it. Schlage focuses upon the trial court's comments made during the October 24, 2000 hearing that the information Schlage sought to protect was not trade secret. Based on those oral comments, Schlage argues the trial court denied the injunction for that reason alone, and therefore abused its discretion by failing (1) to address Schlage's request for an injunction under the theory of misappropriation of confidential information, (2) to reach the issue of actual or threatened misappropriation, *284 and (3) to balance the hardships in denying the injunction.
We cannot presume, however, the trial court ended its analysis with its determination of no trade secrets or that its oral comments reflect all of its reasons for denying the injunction. The trial court denied the preliminary injunction in a minute order without explanation. We review that order, not the court's reasons. (E.g., Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 48 P. 117; Caro v. Smith (1997) 59 Cal. App. 4th 725, 735, 69 Cal. Rptr. 2d 306.) The trial court was not required to prepare a statement of decision or explain its reasoning: "The denial of a preliminary injunction does not require any statement of decision or explanation." (Metro Traffic Control, Inc. v. Shadow Traffic Network (1994) 22 Cal. App. 4th 853, 858, 27 Cal. Rptr. 2d 573.) "[T]he fact that the court's conclusion is set forth in summary fashion does not mean the court failed to engage in the requisite analysis, or that its analysis was incorrect." (City of Los Altos v. Barnes (1992) 3 Cal. App. 4th 1193, 1198, 5 Cal. Rptr. 2d 77.) For purposes of appellate review, we therefore presume the court considered every pertinent argument and resolved each one consistently with its minute order denying the preliminary injunction.
Because we review the correctness of the order, and not the court's reasons, we will not consider the court's oral comments or use them to undermine the order ultimately entered. (Cf. Selfridge v. Carnation Co. (1962) 200 Cal. App. 2d 245, 249, 19 Cal. Rptr. 310 ["oral opinions or statements of the court may not be considered to reverse or impeach the final decision of the court which is conclusively merged in its findings and judgment"]; Birch v. Mahaney (1955) 137 Cal. App. 2d 584, 588, 290 P.2d 579 ["remarks made by a trial judge during a trial or argument, or even an opinion filed by him, cannot be used to impeach a formal decision, order or judgment later made or entered"].) Here, where the trial court was not required to prepare a statement of decision or explain its reasons for denying the injunction, it is especially important to refrain from using the court's oral comments as a basis for reversal. In that situation, reviewing the trial court's oral comments would in effect require the trial court either to prepare a statement of decision where none is required or to say nothing during argument to avoid creating grounds for impeaching the final order. We decline to place the trial courts in such an untenable position.
DISCUSSION
I.
IS THE APPEAL MOOT?
Before turning to the merits, we address Whyte's suggestion that the appeal is moot because Schlage's trade secret information has become "stale." Schlage responds that most of the trade secret information has a "useful shelf-life" of two years so that "[m]ost of the information delineated in items 1(a) through 1(t) of the TRO ... is current today."
An appeal becomes moot when an event occurs which, through no fault of the respondent, renders any appellate decision ineffective in providing the parties relief. (Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967) 67 Cal. 2d 536, 541, 63 Cal. Rptr. 21, 432 P.2d 717; Woodward Park Homeowners Assn. v. Garreks, Inc. (2000) 77 Cal. App. 4th 880, 888, 92 Cal. Rptr. 2d 268.) An injunction against misappropriation of trade secrets should "only last as long as is necessary to preserve the rights of the parties" and "as long as is necessary to *285 eliminate the commercial advantage that a person would obtain through misappropriation." (American Paper & Packaging Products, Inc. v. Kirgan (1986) 183 Cal. App. 3d 1318, 1326, 228 Cal. Rptr. 713; see also Civ.Code, § 3426.2, subd. (a).)
Whyte cites no evidence or authority showing an injunction is no longer necessary to eliminate whatever commercial advantage he might have obtained through the alleged misappropriation. Whyte has not moved to dismiss the appeal as moot, and we find no basis to do so.
II.
HAS SCHLAGE SUFFICIENTLY IDENTIFIED INFORMATION CONSTITUTING TRADE SCRETS?
A "trade secret" is "information, including a formula, pattern, compilation, program, device, method, technique, or process that: [¶] (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and [¶] (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." (Civ.Code, § 3426.1, subd. (d).)
Schlage sought to enjoin use of a range of alleged trade secrets, identified in paragraph 1 of the temporary restraining order as: "a. Information about Schlage's new products; b. Pricing of Schlage's products sold to its customers; c. Profit margins on Schlage's products sold to its customers; d. Schlage's costs in producing the products it sells to its customers; e. The Home Depot Line Review Documents; f. Pricing concessions made by Schlage to its customers; g. Promotional discounts made by Schlage to its customers; h. Advertising allowances made by Schlage to its customers; i. Volume rebates made by Schlage on its products to its customers; j. Marketing concessions made by Schlage to its customers; k. Schlage's market research data; 1. Advertising strategy plans for calendar year 2000; m. Trade Discounts made by Schlage to its customers; n. Payment terms offered by Schlage to its customers and offered by Schlage's vendors/suppliers to Schlage; o. Rebate Incentives made by Schlage to its customers; p. Schlage's advertising, sales and promotion budgets; q. Finishing processes for new and existing Schlage products; r. Composite material process technologies (i.e., the unique composite materials used by Schlage in its products and the processes applied to those composite materials); s. Schlage's 1, 3 and 5 year strategic plan documents; t. Schlage's personnel information...."
Whyte contends these "broad" categories of business information are not described with sufficient particularity to deserve trade secret protection. He also contends, as the trial court stated orally, that none of these categories of information constitutes trade secrets. Schlage argues (1) it has described its trade secrets with the required specificity and (2) the information Schlage has identified is trade secret and Schlage made reasonable efforts to maintain the information's secrecy. We discuss these contentions in turn, and conclude, based upon the evidence submitted, that some of the information Schlage sought to protect was trade secret.
Our decision regarding trade secret status is based upon the appellate record and is not a final adjudication on the merits. (Cohen v. Board of Supervisors, supra, 40 Cal. 3d 277, 286, 219 Cal. Rptr. 467, 707 P.2d 840; Hilb, Rogal & Hamilton Ins. Services v. Robb, supra, 33 Cal.App.4th at p. 1820, 39 Cal. Rptr. 2d 887.) The ultimate determination of trade *286 secret status is subject to proof presented at trial.
A. Whether Schlage Sufficiently Identified Its Trade Secrets
With the exception of category 1a (Schlage's new product information), we conclude Schlage identified its trade secrets with the requisite specificity. At this stage, a party seeking to protect trade secrets must "describe the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge in the trade or of special knowledge of those persons who are skilled in the trade, and to permit the defendant to ascertain at least the boundaries within which the secret lies." (Diodes, Inc. v. Franzen (1968) 260 Cal. App. 2d 244, 253, 67 Cal. Rptr. 19.)
Categories 1b through 1s of the temporary restraining order meet this requirement. They are drafted with sufficient detail to permit Whyte to identify and understand the protected information. Schlage's descriptions made pursuant to Code of Civil Procedure section 2019, subdivision (d), in supplemental briefing, and in declarations remove any doubt about the "boundaries within which the secret[s] lie[ ]." (Diodes, Inc. v. Franzen, supra, 260 Cal.App.2d at p. 253, 67 Cal. Rptr. 19.)
Kwikset had no difficulty in understanding the scope of the putative trade secret information. In deposition, Kwikset's president (Christopher Metz) was asked, one by one, whether each category of information from the temporary restraining order was confidential. Metz understood the scope and meaning of each category because he testified such information was confidential to Kwikset and he had no reason to believe it was not confidential to Schlage.
Category la, regarding Schlage's new product information, is too broad. Although information about a company's new products certainly can be trade secret, (Vacco Industries, Inc. v. Van Den Berg (1992) 5 Cal. App. 4th 34, 49-51, 6 Cal. Rptr. 2d 602), "[information about Schlage's new products" is too broad to enforce because it does not differentiate between truly secret information (such as formulas and product design) and new product information which has been publicly disclosed. Schlage does not address whether the information in category It Schlage's personnel informationis sufficiently described or constitutes trade secrets, and so that argument is waived. (Huntington Landmark Adult Community Assn. v. Ross (1989) 213 Cal.App.3d 1012,1021, 261 Cal. Rptr. 875.)
B. Whether The Information Identified By Schlage Is Trade Secret
The test for trade secrets is whether the matter sought to be protected is information (1) which is valuable because it is unknown to others and (2) which the owner has attempted to keep secret. (ABBA Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1,18, 286 Cal. Rptr. 518.)
We first address Schlage's efforts to maintain the confidentiality of its trade secrets. "[R]easonable efforts to maintain secrecy have been held to include advising employees of the existence of a trade secret, limiting access to a trade secret on `need to know basis,' and controlling plant access." (Legis. Com. com., 12A West's Ann. Civ.Code (1997 ed.) foll. § 3426.1, p. 239; see also Courtesy Temporary Service, Inc. v. Camacho (1990) 222 Cal. App. 3d 1278, 1288, 272 Cal. Rptr. 352.)
The record shows that Schlage's trade secrets are, with one significant exception, not publicly disseminated and are subject to a confidentiality agreement signed by Schlage executives, including *287 Whyte. Requiring employees to sign confidentiality agreements is a reasonable step to ensure secrecy. (MAI Systems Corp. v. Peak Computer, Inc. (9th Cir. 1993) 991 F.2d 511, 521.) Further, Kwikset considers such information to be confidential.
The exception is category 1eThe Home Depot line review documents. It does not appear Schlage maintained the confidentiality of the line review documents because they were disclosed to The Home Depot. Schlage asserts the line review documents and related information are subject to a secrecy agreement between Schlage and The Home Depot. But, as Schlage conceded at oral argument, a secrecy agreement is not in the record. Without a secrecy agreement, The Home Depot presumably could give the line review documents to Kwikset and other Schlage competitors. Because a secrecy agreement is not in the record, for purposes of this appeal we do not treat as trade secret or confidential information the line review documents, as well as any other information disclosed to The Home Depot. For the same reason, any information (such as price concessions, trade discounts and rebate incentives) disclosed to Schlage customers cannot be considered trade secret or confidential for purposes of this appeal.
Thus, we conclude, based upon the appellate record, Schlage made reasonable efforts to maintain the secrecy of its trade secret information, except for The Home Depot line review documents and other information disclosed to The Home Depot or other Schlage customers.
We next address whether the information Schlage seeks to protect derives value from being unknown to others. We review below the categories of information identified by Schlage in the temporary restraining order (except for categories 1a, 1e and 1t) and conclude they meet this test.
1. Information related to Schlage's competitive pricing and marketing of products (Categories 1b, c, d, f, g, h, i, j, m, n, and o.)
These categories identify Schlage's pricing, profit margins, costs of production, pricing concessions, promotional discounts, advertising allowances, volume rebates, marketing concessions, payment terms and rebate incentives. These categories relate to "the price that Schlage sells its lock products to its big box retailer and other non-retail customers like The Home Depot" and is used by Schlage to price its products competitively. The information in these categories has independent economic value because Schlage's pricing policies would be valuable to a competitor to set prices which meet or undercut Schlage's.
Cases have recognized that information related to cost and pricing can be trade secret. (See Courtesy Temporary Service, Inc. v. Camacho, supra, 222 Cal.App.3d at p. 1288, 272 Cal. Rptr. 352 [billing and markup rates "irrefutably" of commercial value]; SI Handling Systems, Inc. v. Heisley (3d Cir.1985) 753 F.2d 1244, 1260 [cost and pricing information trade secret]; Lumex, Inc. v. Highsmith (E.D.N.Y.1996) 919 F. Supp. 624, 628-630 [pricing, costs, and profit margins treated as trade secrets].)
Whyte contends Schlage's cost and pricing information is merely "general methods of doing business," which cannot be protected as trade secret. (See Fortna v. Martin (1958) 158 Cal. App. 2d 634, 323 P.2d 146 [pricing and bidding methods not trade secrets if only general methods of doing business].) In so arguing, Whyte fails to distinguish between cost and pricing data unique to Schlage (which may *288 qualify as trade secrets) and commonly used industry formulas for setting prices (which do not). The court in SI Handling Systems, Inc. v. Heisley, supra, 753 F.2d at page 1260, drew this distinction to conclude that cost and pricing information not readily known in the industry information such as the cost of materials, labor, overhead, and profit marginswas trade secret. The cases relied upon by Whyte are inapposite for the same reason. (See Aetna Bldg. Maintenance Co. v. West (1952) 39 Cal. 2d 198, 246 P.2d 11 [plaintiff failed to prove its procedure for estimating contracts was a secret]; American Paper & Packaging Products, Inc. v. Kirgan, supra, 183 Cal. App. 3d 1318, 228 Cal. Rptr. 713 [list of readily ascertainable customers not trade secret].)
2. Schlage's strategic and marketing plans and marketing research (Categories 1k, l, p, s.)
These categories refer to the results of confidential marketing research; advertising and marketing strategy, plans, and techniques; and Schlage's five-year strategic plan. This information would be valuable if known by a competitor because it would allow the competitor to predict and counter Schlage's advertising and marketing. Schlage's marketing strategy and plans (including its five-year strategic plan) constitute trade secrets under California law. (See Duncan v. Stuetzle (9th Cir.1996) 76 F.3d 1480, 1488, fn. 11.) Schlage's market research does not enjoy such blanket trade secret protection. Marketing research can be trade secret if it "explores the needs of numerous, diverse buyers," but is not protectible if it "relates to a single prominent buyer that is presumably aware of its own needs...." (SI Handling Systems, Inc. v. Heisley, supra, 753 F.2d at p. 1259; see also Metro Traffic Control, Inc. v. Shadow Traffic Network, supra, 22 Cal.App.4th at pp. 863-864, 27 Cal. Rptr. 2d 573 [customer's preferences and requirements not trade secret].) Thus, Schlage's marketing research is not trade secret if it relates solely to The Home Depot's, or any one prominent customer's, needs.
3. Information related to Schlage's process technologies (Categories 1q and r.)
The information in these categories includes specific casting technology, flow technology, manufacturing technologies, and Schlage's electroplating and plating bath chemistries and methods. Whyte does not contend Schlage's process technologies are not trade secret, and indeed such technical "know-how" is the quintessential trade secret. (See Civ.Code, § 3426.1, subd. (d) [trade secrets include formulas, methods, techniques, or processes]; Vacco Industries, Inc. v. Van Den Berg, supra, 5 Cal. App. 4th 34, 49-51, 6 Cal. Rptr. 2d 602; Surgidev Corp. v. Eye Technology, Inc. (D.Minn.1986) 648 F. Supp. 661, 687 and cases cited at fn. 8; 1 Milgrim, Trade Secrets (2002) § 1.09[1][b], [2][c], [3].)
C. Schlage's Other Theories
We do not reach Schlage's alternative argument the trial court abused its discretion in failing to issue an injunction under either a breach of confidence theory or under Business & Professions Code section 17200 because we have concluded Schlage did identify information constituting trade secret. Because no secrecy agreement appears in the record, for purposes of the appeal The Home Depot line review documents cannot be deemed confidential and therefore cannot form the basis of a breach of confidence theory. Our conclusion below that the evidence does not establish actual or threatened misappropriation *289 also disposes of those alternative grounds for injunctive relief.
III.
DID WHYTE ENGAGE IN ACUTAL OR THREATENED MISAPPROPRIATION?
We turn to the issue whether Whyte engaged in actual or threatened misappropriation. The court may enjoin "[a]ctual or threatened misappropriation" of a trade secret. (Civ.Code, § 3426.2, subd. (a).) "Misappropriation" is, generally speaking, improper acquisition of a trade secret or its nonconsensual use or disclosure. (Civ. Code, § 3426.1, subd. (b); see also Morlife, Inc. v. Perry (1997) 56 Cal. App. 4th 1514, 1523, 66 Cal. Rptr. 2d 731.)
Schlage contends direct and circumstantial evidence established Whyte engaged in actual or threatened misappropriation, including evidence that Whyte had access to its trade secrets, vowed to get even with Schlage's president, concealed his planned departure from Schlage to attend confidential meetings with The Home Depot, renounced his confidentiality agreement, lied about returning confidential information, lied about destroying Schlage confidential information, retained a copy of The Home Depot line review agreement downloaded onto disk, sent an e-mail attaching a confidential report to his personal e-mail address, and accepted a position with Kwikset with duties identical to those at Schlage in order to use Schlage's confidential information.
Whyte denies these charges. He argues nobody at Schlage testified to having personal knowledge that he misappropriated or threatened to misappropriate trade secrets. Whyte points to evidence showing that before he resigned from Schlage, he destroyed everything he had containing Schlage confidential information, and that he downloaded The Home Depot line review agreement at the request of Schlage's vice-president of marketing and left the disk on the vice-president's desk. In any event, Whyte disclaims any knowledge of Schlage's manufacturing technologies and processes. Whyte asserts that Kwikset instructed him not to disclose any Schlage trade secrets. Several Kwikset managers testified Whyte had disclosed no Schlage trade secrets.
The evidence is neatly divided. Both sides marshal declarations, exhibits, and deposition transcripts in support of their respective positions. But we need not, and cannot, resolve the conflicts in the evidence or reweigh it. The applicable standard of review dictates that we "interpret the facts in the light most favorable to the prevailing party and indulge in all reasonable inferences in support of the trial court's order," even though the evidence is presented by declaration. (Hilb, Rogal & Hamilton Ins. Services v. Robb, supra, 33 Cal.App.4th at p. 1820, 39 Cal. Rptr. 2d 887.) The trial court judges the credibility of the declarations. (Ibid.) Accordingly, we must interpret the facts favorably to the order denying a preliminary injunction, and therefore conclude the evidence established Whyte did not threaten to or actually misappropriate Schlage's trade secrets.
We emphasize our decision is not a final adjudication of the issue of actual or threatened misappropriation (Cohen v. Board of Supervisors, supra, 40 Cal. 3d 277, 286, 219 Cal. Rptr. 467, 707 P.2d 840; Hilb, Rogal & Hamilton Ins. Services v. Robb, supra, 33 Cal.App.4th at p. 1820, 39 Cal. Rptr. 2d 887), and we have serious concerns over evidence in the record suggesting Whyte took Schlage's trade secrets or destroyed evidence. We are constrained, however, by the applicable standard of review and our limited role as a reviewing *290 court to view the facts in favor of the trial court's order.
IV.
IS THE INEVITABLE DISCLOSURE DOCTRINE THE LAW OF CALIFORNIA?
As an alternative to proof of actual or threatened misappropriation, Schlage urges us to reverse and enjoin Whyte from working for the lock division of Kwikset under the doctrine of inevitable disclosure. Under the doctrine of inevitable disclosure, "a plaintiff may prove a claim of trade secret misappropriation by demonstrating that defendant's new employment will inevitably lead him to rely on the plaintiffs trade secrets." (PepsiCo, Inc. v. Redmond (7th Cir.1995) 54 F.3d 1262, 1269 (PepsiCo).) The inevitable disclosure doctrine results in an injunction prohibiting employment, not just use of trade secrets. The doctrine's justification is that unless the employee has "an uncanny ability to compartmentalize information" the employee will necessarily relyconsciously or subconsciouslyupon knowledge of the former employer's trade secrets in performing his or her new job duties. (Id. at p. 1269.)
Courts applying the doctrine of inevitable disclosure have considered the degree of similarity between the employee's former and current positions, the degree of competition between the former and current employers, the current employer's efforts to safeguard the former employer's trade secrets, and the former employee's "lack of forthrightness both in his activities before accepting his job ... and in his testimony." (PepsiCo, supra, 54 F.3d at p. 1267; see also Merck & Co. Inc. v. Lyon (M.D.N.C.1996) 941 F. Supp. 1443, 1460.)
PepsiCo is the leading case on inevitable disclosure. There, PepsiCo sought to enjoin its former employee, William Redmond, from working for a competitor, the Quaker Oats Company. PepsiCo and Quaker Oats were fierce competitors, particularly in "sports drinks" and "new age drinks." (PepsiCo, supra, 54 F.3d at pp. 1263-1264.) Redmond's high position at PepsiCo gave him access to its trade secrets regarding these products, including strategic plans, product innovations, "pricing architecture," selling and delivery innovations, and marketing "`attack plans.'" (Id. at pp. 1264-1265.) To protect these trade secrets, PepsiCo had Redmond sign a confidentiality agreement. Quaker Oats courted Redmond, and he ultimately accepted a high-level position in that company. (Id. at p. 1264.) When Redmond resigned from PepsiCo, it immediately sought and obtained an injunction preventing him from assuming his duties at Quaker Oats. (Id. at p. 1265.)
PepsiCo did not contend Quaker Oats actually stole trade secrets, but asserted Redmond "cannot help but rely on [PepsiCo's] trade secrets as he helps plot [Quaker Oats'] new course." (Id. at p. 1270.) The Seventh Circuit agreed and applied the Illinois Trade Secrets Act to affirm an injunction preventing Redmond from working for Quaker Oats. (Id. at pp. 1270-1271.) The Seventh Circuit first concluded that Illinois law permits a court to enjoin employment based upon inevitable disclosure of trade secrets. (Id. at p. 1269.) The Seventh Circuit then agreed with the district court finding that "unless Redmond possessed an uncanny ability to compartmentalize information, he would necessarily be making decisions about [Quaker Oats' products] by relying on his knowledge of [PepsiCo's] trade secrets." (Id. at p. 1269.) Such inevitability of disclosure, coupled with Redmond's and Quaker Oats' "lack of candor on their part and proof of their willingness to misuse [PepsiCo's] trade secrets," led the Seventh Circuit to *291 affirm the injunction barring Redmond from working for Quaker Oats. (Id. at pp. 1270-1271.)
Schlage asserts the facts here are "strikingly similar" to PepsiCo's, and we are inclined to agree. Schlage and Kwikset are fierce competitors; Whyte's job duties at Kwikset are virtually identical to those he had at Schlage; Whyte knew of Schlage's trade secrets (in particular, those important to The Home Depot account); Whyte signed a confidentiality agreement; and, if we are to believe Schlage's evidence, Whyte was not "forthright" with Schlage. Whyte's evidence did show Kwikset made efforts to safeguard Schlage's trade secrets. Nonetheless, the similarity between this case and PepsiCo and other inevitable disclosure cases means we cannot distinguish those cases on the facts.
No published California decision has accepted or rejected the doctrine of inevitable disclosure. Two federal district courts in California recently concluded inevitable disclosure is not the law of this state. (Globespan, Inc. v. O'Neill (C.D.Cal.2001) 151 F. Supp. 2d 1229, 1235 (order by Baird, J.) ["The Central District of California has considered and rejected the inevitable disclosure doctrine"]; Bayer Corp. v. Roche Molecular Systems, Inc. (N.D.Cal.1999) 72 F. Supp. 2d 1111, 1120 (order by Alsup, J.) ["California trade-secrets law does not recognize the theory of inevitable disclosure"]; but see Note, Intellectual Slavery?: The Doctrine of Inevitable Disclosure of Trade Secrets (1996) 26 Golden Gate U. L.Rev. 717, 719 ["Because California has adopted the [Uniform Trade Secrets Act] and because PepsiCo was a fact intensive analysis, this decision will affect California law"].)
These federal decisions do not, of course, establish the law of the State of California or bind its courts. We are free to consider the inevitable disclosure doctrine, and we reject it.
Our survey confirms the majority of jurisdictions addressing the issue have adopted some form of the inevitable disclosure doctrine. (E.g., RKI, Inc. v. Grimes (N.D.Ill.2001) 177 F. Supp. 2d 859; H & R Block Eastern Tax Services, Inc. v. Enchura (W.D.Mo.2000) 122 F. Supp. 2d 1067; Maxxim Medical, Inc. v. Michelson (S.D.Tex.1999) 51 F. Supp. 2d 773, revd. without reported opn. (5th Cir.1999) 182 F.3d 915; Lexis-Nexis v. Beer (D.Minn. 1999) 41 F. Supp. 2d 950, 959 [dictum because no finding of trade secrets]; Novell Inc. v. Timpanogos Research Group Inc. (D.Utah 1998) 46 U.S.P.Q.2d (BNA) 1197, 1215, 1998 WL 177721 [adopting inevitable disclosure but noting "[n]o Utah appellate court has considered ... the application of this doctrine"]; Merck & Co. Inc. v. Lyon, supra, 941 F. Supp. 1443; Branson Ultrasonics Corp. v. Stratman (D.Conn.1996) 921 F. Supp. 909 [invoking inevitable disclosure to enforce covenant not to compete]; Surgidev Corp. v. Eye Technology, Inc., supra, 648 F. Supp. 661; Bendinger v. Marshalltown Trowell Co. (1999) 338 Ark. 410, 994 S.W.2d 468; E.I. duPont de Nemours & Co. v. American Potash & Chemical Corp. (Del.Ch.1964) 200 A.2d 428; Strata Marketing, Inc. v. Murphy (2000) 317 Ill.App.3d 1054, 251 Ill. Dec. 595, 740 N.E.2d 1166; National Starch and Chemical Corp. v. Parker Chemical Corp. (1987) 219 N.J.Super. 158, 530 A.2d 31; Procter & Gamble Co. v. Stoneham (2000) 140 Ohio App. 3d 260, 747 N.E.2d 268; see also Comment, An Overview of Individual States' Application of Inevitable Disclosure: Concrete Doctrine or Equitable Tool? (2002) 55 So. Methodist Univ. L.Rev. 621.)
Some other courts, though agreeing with the doctrine, have distinguished it or decided their cases on other grounds. (E.g., *292 Padco Advisors, Inc. v. Omdahl (D.Md. 2002) 179 F. Supp. 2d 600, 611 ["inappropriate" to adopt the doctrine because no tangible trade secrets were taken]; Hoskins Mfg. Co. v. PMC Corp. (E.D.Mich. 1999) 47 F. Supp. 2d 852 [disclosure not inevitable because parties' differing technology made trade secrets useless]; Bridgestone/Firestone, Inc. v. Lockhart (S.D.Ind. 1998) 5 F. Supp. 2d 667, 682 [finding PepsiCo is "instructive" but does not warrant finding of inevitable disclosure because there was no evidence the employee took confidential information]; Lumex, Inc. v. Highsmith, supra, 919 F. Supp. 624 [deciding case based upon noncompete covenant rather than inevitable disclosure]; Northwest Bec-Corp v. Home Living Service (2002) 136 Idaho 835, 41 P.3d 263 [distinguishing PepsiCo on ground plaintiff failed to submit evidence supporting claim of misappropriation]; Travenol Laboratories, Inc. v. Turner (1976) 30 N.C.App. 686, 228 S.E.2d 478 [suggesting inevitable disclosure limited to situation where employee has highly technical information]; see also Comment, supra, 55 So. Methodist Univ. L.Rev. 621.)
A smaller but growing band of cases rejects the inevitable disclosure doctrine. (Globespan, Inc. v. O'Neill, supra, 151 F. Supp. 2d 1229; Del Monte Fresh Produce Co. v. Dole Food Co., Inc. (S.D.Fla. 2001) 148 F. Supp. 2d 1326, 1337; PSC, Inc. v. Reiss (W.D.N.Y.2000) 111 F. Supp. 2d 252; Bayer Corp. v. Roche Molecular Systems, Inc., supra, 72 F.Supp.2d at p. 1120; EarthWeb, Inc. v. Schlock (S.D.N.Y.1999) 71 F. Supp. 2d 299; Government Technology Services, Inc. v. IntelliSys Technology Corp. (Va.Cir.Ct., Oct. 20, 1999, No. 160265) 1999 WL 1499548.)
The decisions rejecting the inevitable disclosure doctrine correctly balance competing public policies of employee mobility and protection of trade secrets. The inevitable disclosure doctrine permits an employer to enjoin the former employee without proof of the employee's actual or threatened use of trade secrets based upon an inference (based in turn upon circumstantial evidence) that the employee inevitably will use his or her knowledge of those trade secrets in the new employment. The result is not merely an injunction against the use of trade secrets, but an injunction restricting employment.
Business and Professions Code section 16600 generally prohibits covenants not to compete, and California public policy strongly favors employee mobility. (Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal. App. 4th 881, 900, 72 Cal. Rptr. 2d 73.) Business and Professions Code section 16600 protects a person's right to "follow any of the common occupations of life" (Continental Car-Na-Var Corp. v. Moseley (1944) 24 Cal. 2d 104, 110, 148 P.2d 9) and to pursue the "`business or profession he may choose'" (American Credit Indemnity Co. v. Sacks (1989) 213 Cal. App. 3d 622, 633, 262 Cal. Rptr. 92, italics omitted). We agree the doctrine of inevitable disclosure "creates a de facto covenant not to compete" and "runs[s] counter to the strong public policy in California favoring employee mobility." (Bayer Corp. v. Roche Molecular Systems, Inc., supra, 72 F.Supp.2d at p. 1120; accord, Globespan, Inc. v. O'Neill, supra, 151 F.Supp.2d at p. 1234; PSC, Inc. v. Reiss, supra, 111 F.Supp.2d at p. 256 [inevitable disclosure doctrine binds employee to implied-in-fact restrictive covenant that "runs counter to New York's strong public policy against such agreements"].)
The policy favoring employee mobility does not in itself, however, require rejection of the inevitable disclosure doctrine, for California law also protects trade secrets. (Civ.Code, § 3426 et seq.) Nearly 40 years ago, the California Supreme *293 Court recognized covenants not to compete are enforceable notwithstanding Business and Professions Code section 16600 if "necessary to protect the employer's trade secrets." (Muggill v. Reuben H. Donnelley Corp. (1965) 62 Cal. 2d 239, 242, 42 Cal. Rptr. 107, 398 P.2d 147 (opn. of Traynor, J.); see also Metro Traffic Control, Inc. v. Shadow Traffic Network, supra, 22 Cal.App.4th at p. 859, 27 Cal. Rptr. 2d 573.) Further, Business and Professions Code section 16600 generally does not invalidate a noncompetition agreement that merely prohibits solicitation of the former employer's customers. (John F. Matull & Associates, Inc. v. Cloutier (1987) 194 Cal. App. 3d 1049, 1054, 240 Cal. Rptr. 211.) The injunction proposed by Schlage which only would proscribe Whyte from selling door locks to The Home Depot appears narrowly tailored to protect Schlage's trade secrets.
The chief ill in the covenant not to compete imposed by the inevitable disclosure doctrine is its after-the-fact nature: The covenant is imposed after the employment contract is made and therefore alters the employment relationship without the employee's consent. When, as here, a confidentiality agreement is in place, the inevitable disclosure doctrine "in effect convert[s] the confidentiality agreement into such a covenant [not to compete]." (PSC, Inc. v. Reiss, supra, 111 F.Supp.2d at p. 257.) Or, as another federal court put it, "a court should not allow a plaintiff to use inevitable disclosure as an after-the-fact noncompete agreement to enjoin an employee from working for the employer of his or her choice." (Del Monte Fresh Produce Co. v. Dole Food Co., Inc., supra, 148 F.Supp.2d at p. 1337; see also Matheson, Employee Beware: The Irreparable Damage of the Inevitable Disclosure Doctrine (1998) 10 Loyola Consumer L.Rev. 145, 162 ["the inevitable disclosure doctrine transforms employee access to trade secrets into a de facto non-competition agreement"].)
The doctrine of inevitable disclosure thus rewrites the employment agreement and "such retroactive alterations distort the terms of the employment relationship and upset the balance which courts have attempted to achieve in construing noncompete agreements." (EarthWeb, Inc. v. Schlock, supra, 71 F.Supp.2d at p. 311.) The result, as the EarthWeb court explained, is "the imperceptible shift in bargaining power that necessarily occurs upon the commencement of an employment relationship marked by the execution of a confidentiality agreement. When that relationship eventually ends, the parties' confidentiality agreement may be wielded as a restrictive covenant, depending on how the employer views the new job its former employee has accepted. This can be a powerful weapon in the hands of an employer; the risk of litigation alone may have a chilling effect on the employee." (Id. at p. 310.) As a result of the inevitable disclosure doctrine, the employer obtains the benefit of a contractual provision it did not pay for, while the employee is bound by a court-imposed contract provision with no opportunity to negotiate terms or consideration. (Matheson, supra, 10 Loyola Consumer L.Rev. at p. 160.)
Schlage and Whyte did not agree upon a covenant not to compete. We decline to impose one, however restricted in scope, by adopting the inevitable disclosure doctrine.
Lest there be any doubt about our holding, our rejection of the inevitable disclosure doctrine is complete. If a covenant not to compete (which would include, for example, a nonsolicitation clause), is part of the employment agreement, the inevitable disclosure doctrine cannot be invoked to supplement the covenant, alter its *294 meaning, or make an otherwise unenforceable covenant enforceable. California law concerning enforcement of noncompetition agreements, not the inevitable disclosure doctrine, would measure the covenant's scope, meaning, and validity. Our opinion does not change that law. Under the circumstances presented in this case, an employer might prevent disclosure of trade secrets through, for example, an agreed-upon and reasonable nonsolicitation clause that is narrowly drafted for the purpose of protecting trade secrets. Thus, regardless whether a covenant not to compete is part of the employment agreement, the inevitable disclosure doctrine cannot be used as a substitute for proving actual or threatened misappropriation of trade secrets.
Because we reject the inevitable disclosure doctrine and the evidence failed to prove actual or threatened misappropriation of trade secrets, we do not address Schlage's contention the balance of hardships weighs in favor of issuing an injunction. (King v. Meese (1987) 43 Cal. 3d 1217, 1227, 240 Cal. Rptr. 829, 743 P.2d 889; Hart v. Cult Awareness Network, supra, 13 Cal.App.4th at p. 785, 16 Cal. Rptr. 2d 705.)
DISPOSITION
The order denying Schlage's application for a preliminary injunction and granting Whyte's motion to dissolve the temporary restraining order is affirmed. Whyte and Kwikset shall recover their costs on appeal.
WE CONCUR: RYLAARSDAM, Acting P.J., and BEDSWORTH, J. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260473/ | 124 Cal. Rptr. 2d 321 (2002)
101 Cal. App. 4th 552
Richard DONALDSON, Plaintiff and Appellant,
v.
NATIONAL MARINE, INC., Defendant and Respondent.
Nos. A092876, A093705.
Court of Appeal, First District, Division One.
August 23, 2002.
Review Granted November 26, 2002.
*322 Phillip R. Bonotto, Sacramento, Brian M. Taylor, Rushford & Bonoto, for Appellant.
Harry F. Wartnick, San Francisco, Martha A.H. Berman, Wartnick, Chaber, Harowitz & Tigerman, Daniel U. Smith, Los Angeles, Law Offices of Daniel U. Smith, for Respondent.
Certified for Partial Publication.[*]
STEIN, Acting P.J.
National Marine, Inc., appeals from a judgment, entered after a jury trial, *323 awarding Richard Donaldson $1,616,400 on an action for the wrongful death of Donaldson's adoptive father, Albert Pavolini.
FACTUAL/PROCEDURAL BACKGROUND
Mr. Pavolini spent his adult working life on or around boats and ships. He served in the Navy from 1942 until 1964. He worked for Military Sea Transport from 1966 to 1967, he worked for National Marine (then Cardinal Carriers) from 1967 to 1981 and he worked for other private shipping companies from 1980 until he retired, a few years later. Mr. Pavolini's duties both for the Navy and for the private shipping companies included installing or repairing insulation around pipes and waterlines, and it is undisputed that Mr. Pavolini was exposed to asbestos during his Naval career, and later, while working for the private companies. Mr. Pavolini also began smoking at age 16, and smoked until 1984.
In May 1997, Mr. Pavolini was diagnosed with lung cancer. He died in 1998 of complications resulting from the cancer.
These proceedings began prior to Mr. Pavolini's death, when Mr. Pavolini filed suit against multiple defendants, including several tobacco companies, on the theory that his lung cancer was caused by a combination of his use of tobacco and his exposure to asbestos during his naval career and his employment with the private companies. Although it is not clear from the record, it appears that the defendants originally included companies that manufactured or supplied products containing asbestos to the Navy or to the private shipping companies. In all events, the parties ultimately stipulated to orders severing the tobacco defendants from the asbestos defendants for separate trial.
In the case against the tobacco defendants, the trial court sustained a demurrer to the complaint without leave to amend, and entered judgment in favor of the tobacco defendants. Mr. Pavolini appealed. We consolidated that appeal with a second appeal, filed by Edwin Brigham. (A084371 and A084367.) After Mr. Pavolini died, on July 17, 1988, we permitted his adoptive son, Richard Donaldson,[1] to substitute for Mr. Pavolini. (Mr. Brigham also died while the appeal was pending, and we permitted Joseph Naegele and David Wheeler as co-trustees of the Edwin Naegele trust, and Alicia Ojeda Brigham, to substitute for Mr. Brigham.) We affirmed the judgment of the trial court in both cases, finding that the tobacco defendants were immune from suit under the version of Civil Code section 1714.45 in effect at the time Mr. Pavolini's causes of action accrued.[2](Naegele v. R.J. Reynolds Tobacco Co. (2000) 81 Cal. App. 4th 503, 96 Cal. Rptr. 2d 666.) Donaldson did not seek review of our decision, but the Supreme Court granted review in Naegele, and has reversed our decision in that case. (Naegele v. R.J. Reynolds Tobacco Co. (2002) 28 Cal. 4th 856, 123 Cal. Rptr. 2d 61, 50 P.3d 769.)
In the meantime, on September 25, 1999, Donaldson filed suit against National Marine, Inc., as the successor to Cardinal Carriers, seeking damages for Mr. Pavolini's death under the Jones Act, title 46 United States Code Appendix section 688, and under the maritime doctrine of unseaworthiness. National Marine moved to *324 dismiss the case against it on the theory that the San Francisco Superior Court lacked subject matter jurisdiction over Donaldson's maritime claims because Mr. Pavolini's work for Cardinal Carriers took place outside of California's territorial waters. The motion was denied, and the matter went to trial.
At trial, National Marine did not dispute that Mr. Pavolini died of lung cancer. It defended on the theory that Mr. Pavolini's lung cancer was not related to his exposure to asbestos, but resulted from his history of smoking tobacco. National Marine also theorized that even if Mr. Pavolini's exposure to asbestos was a factor in his lung cancer, tobacco was a greater factor. Finally, it argued that in all events Mr. Pavolini's exposure to asbestos during his naval career was far greater than his exposure to asbestos while working for Cardinal Carriers.[3]
The jury rejected Donaldson's unseaworthiness claims. It found, however, that National Marine was negligent under the Jones Act, and that its negligence was a cause of Mr. Pavolini's death. The jury further fixed the damages for Mr. Pavolini's death at $1,796,000, and apportioned fault between Mr. Pavolini, National Marine, the Navy and the tobacco companies, at 10 percent for Mr. Pavolini, and 30 percent each for National Marine, the Navy and the tobacco companies.
National Marine appealed from the judgment, entered on the jury's verdict, of "at least $538,800.00."
The trial court later denied National Marine's motions for a new trial and for judgment notwithstanding the verdict, but granted Donaldson's motion to amend the judgment to make National Marine liable for 90 percent of the jury's verdict. The court found that the Navy and the tobacco companies were immune from Donaldson's claims, and that National Marine, accordingly, was liable for the full amount of damages, less the 10 percent attributable to Mr. Pavolini's fault. The court therefore corrected its judgment to increase Donaldson's award against National Marine to $1,616,400.
National Marine filed a second appeal from the court's order. The appeals have been consolidated, and we consider both here.
DISCUSSION
I.
Subject Matter Jurisdiction[4]
National Marine contends that the San Francisco Superior Court lacked subject matter jurisdiction over Donaldson's claims, and that the trial court, accordingly, erred in denying National Marine's motion to dismiss. The contention is based on an interpretation of maritime law, and a split in California authority as to whether the State's courts have subject matter jurisdiction over actions brought for the death of a seaman outside of the State's territorial waters. After reviewing the historical development of maritime law and its application to actions for negligence and wrongful death, we conclude that California's courts do indeed have subject matter jurisdiction *325 over such actions, even when the actionable wrong or the death occurred outside of the State's territorial limits.
It is well-settled that state courts are competent to try civil maritime suits for injuries to seamen, although they will be required to apply federal maritime law to the seaman's claims. (See, e.g., Engel v. Davenport (1926) 271 U.S. 33, 46 S. Ct. 410, 70 L. Ed. 813.) At first, however, maritime law afforded no cause of action for wrongful death. (The Harrisburg (1886) 119 U.S. 199, 214, 7 S. Ct. 140, 30 L. Ed. 358.) In addition, although the point later was questioned in Moragne v. States Marine Lines (1970) 398 U.S. 375, 377-388, 90 S. Ct. 1772, 26 L. Ed. 2d 339, it was believed that no federal common law action for wrongful death existed in the United States. Plaintiffs seeking damages as a result of the wrongful death of a seaman, therefore, were relegated to such relief as might be available under a state's wrongful death statute. (Moragne v. States Marine Lines, supra, 398 U.S. 375, 377, 90 S. Ct. 1772, 26 L. Ed. 2d 339; The Tungus v. Skovgaard (1959) 358 U.S. 588, 590-591, 79 S. Ct. 503, 3 L. Ed. 2d 524.)
In 1920, however, Congress passed two landmark acts: (1) The Death on the High Seas Act, title 46 United States Code sections 761 et seq. (DOHSA), which established an action for a death occurring beyond a marine league from the shore of any state, and (2) the Jones Act, title 46 United States Code section 688, which extended the protections of the Federal Employers' Liability Act (FELA) to seamen, and thereby provided a right of recovery against employers for negligence resulting in injury or death. (46 U.S.C. Appen. §§ 688, 761; Moragne v. States Marine Lines, supra, 398 U.S. at p. 394.) Problems arose when suit was brought not for negligence, but for unseaworthiness, and the death occurred within a state's territorial waters. In such cases, the death was not covered by DOHSA, which was limited to deaths occurring on the high seas, or by the Jones Act, which was limited to actions arising from negligence. If recovery could be had for such claims, therefore, it still could be had only under state wrongful death statutes, a situation that fostered a lack of consistency in the adjudication of wrongful death claims. Moreover, because the Jones Act preempts state law remedies for the death or injury of a seaman, state statutes could provide no relief to true seamen, with the result that, within a state's territorial waters, recovery was available under a state's wrongful death statute for the death of a longshoreman but not for the death of a Jones Act seaman. (Miles v. Apex Marine Corp. (1990) 498 U.S. 19, 25, 111 S. Ct. 317, 112 L. Ed. 2d 275; Moragne v. States Marine Lines, supra, 398 U.S. at pp. 395-396, 90 S. Ct. 1772.)
The Supreme Court, in Moragne, remedied the situation by overruling The Harrisburg, and creating a general maritime remedy for wrongful death. (Moragne v. States Marine Lines, supra, 398 U.S. at p. 409, 90 S. Ct. 1772; and see also Miles v. Apex Marine Corp., supra, 498 U.S. at pp. 25-27, 111 S. Ct. 317.) After Moragne, the Jones Act provided a cause of action for the negligent death of a seaman, irrespective of the place at which the injury occurred or the death took place. In addition, DOSHA provided a cause of action for wrongful death on the high seas, and a general maritime remedy existed for wrongful death caused by unseaworthiness, also irrespective of the location of the injury or death.
That these causes of action exist, of course, does not mean that a state court has subject matter jurisdiction to entertain them. Article III, section 2 of the United States Constitution confers jurisdiction on *326 the federal courts to hear "all cases of admiralty and maritime jurisdiction." Title 28 United States Code section 1333, part of the Judiciary Act of 1789, provides that the district courts "shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled." (Italics added.) Thus, the federal courts have exclusive jurisdiction over civil maritime cases unless the remedy is one that is saved to suitors.
National Marine, citing Chromy v. Lawrance (1991) 233 Cal. App. 3d 1521, 285 Cal. Rptr. 400, contends that the savings to suitors clause permits state courts to entertain admiralty or maritime actions only if the state's wrongful death statute provides a remedy for that action. The contention assumes that the term "remedy," for purposes of the clause, means that the state's wrongful death statute must itself establish the right to sue for the death at issue. California's wrongful death statutes, Code of Civil Procedure section 377.10 et seq., do not specifically establish a right to sue for maritime deaths occurring outside of the state's territorial limits. Mr. Pavolini died in Tennessee, of injuries alleged to have been received, in part, while working for National Marine as a seaman on or around the Mississippi River. It follows, under National Marine's analysis, that California's wrongful death statute cannot provide a basis for the exercise of state court subject matter jurisdiction over Donaldson's maritime claim.
National Marine's contention, however, is based on two premises that we reject: (1) that California's wrongful death statutes do not apply to deaths occurring outside of the State's territories; and (2) that title 28 United States Code section 1333 allows state courts to entertain only those rights of action specifically recognized by the state in question.
Although California's wrongful death statutes do not specifically apply to deaths occurring outside of California's territories, there is no question but that its courts have subject matter jurisdiction over out-of-state injuries or deaths, assuming a basis for the exercise of personal jurisdiction over the parties. Nothing in the wrongful death statutes suggests that they are limited to deaths on waters only when those waters exist within the state's territorial limits.[5] It is true that state courts traditionally have been reluctant to provide a remedy for a maritime death occurring outside of the state's territorial waters. (See Miles v. Apex Marine Corp. (1990) 498 U.S. 19, 24-25, 111 S. Ct. 317, 112 L. Ed. 2d 275; Moragne v. States Marine Lines, supra, 398 U.S. at p. 393, 90 S. Ct. 1772, including fn. 10; and The Hamilton (1907) 207 U.S. 398, 28 S. Ct. 133, 52 L. Ed. 264.) This reluctance, however, arises from issues of choice of law rather than from issues of the competence of a state court to hear the claim. The reasoning is that because the remedy of wrongful death is a creature of statute, not recognized in all jurisdictions, it would be improper to impose it on a claim arising in a jurisdiction that does not itself recognize that remedy.
This point was discussed in McDonald v. Mallory et al. (1879) 77 N.Y. 546, a case often cited for its discussion of the reach of *327 state wrongful death statutes. A vessel, registered in New York, was destroyed by fire while anchored on the high seas, outside of the territory of any jurisdiction. A citizen of New York was killed as a result of the fire, and an action for wrongful death was brought in the New York state court. The defendant argued that New York's statute provided no right of action to recover for wrongs committed outside of the state's territorial limits. The court recognized, as is particularly relevant here, that as a general rule, the law of the jurisdiction where an accident occurred applies to any claim arising from that accident. This meant that if an accident took place in a jurisdiction that did not recognize a claim for wrongful death, the State Court of New York, applying the law of the jurisdiction in which the accident occurred, would not provide a remedy for wrongful death. The court reversed, in essence, that it should apply the law of the jurisdiction where the death occurred. It did not find that it lacked competence to hear a claim arising from a death resulting from a wrong committed outside of the state's territorial waters. (Id. at pp. 550-551.)[6] The court also recognized that a vessel while at sea constructively is part of the territory of the state to which the vessel belongs, and subject to that state's laws. (Id. at pp. 552-553.) It concluded that the New York wrongful death statute applied unless it was displaced by the law of the jurisdiction where the wrong occurred. As the claim arose on the high seas, outside of any state's territorial waters, and as maritime law at that time did not provide an exclusive remedy for a death occurring on the high seas, the court found that the New York statute applied. (Id. at p. 556.) It also found that the state court had jurisdiction to hear the claim. (Ibid.)
Under this analysis, California's courts have subject matter jurisdiction over deaths occurring outside of the State's territorial limits, although they may be required to apply the law of the jurisdiction where the wrong occurred. For purposes of this case, that law is the Jones Act. As the Jones Act recognizes a claim for wrongful death, the superior court was entitled to hear Donaldson's claims.
The second premise in National Marine's argument that we reject is that the "savings to suitors" clause "saves" only those rights of action recognized by state law. The clause refers to remedies, not to rights of action. The difference between *328 the two was explained by the United States Supreme Court in Knapp, Stout & Company v. McCaffrey (1900) 177 U.S. 638, 20 S. Ct. 824, 44 L. Ed. 921. Knapp was a suit brought to enforce a lien for towage. In finding that an Illinois court had jurisdiction over the case, notwithstanding the limitations on jurisdiction imposed by the Judiciary Act of 1789, the Supreme Court distinguished between actions brought against a vessel itself and actions brought against a personal defendant to enforce a lien against a vessel. The court concluded that admiralty courts have exclusive jurisdiction over the first type of action because the remedyan action against the vessel itselfhas all the features of an admiralty proceeding in rem.[7] Suit may be maintained against the owner, however, even though the plaintiff seeks to enforce a lien against the vessel for towage charges, because the remedy a suit brought in personamis a state remedy "saved to suitors." (Id. at pp. 646-648, 20 S. Ct. 824.)
An additional issue arose from the fact that the suit in Knapp, Stout & Company v. McCaffrey, supra, was a suit in equity, and therefore "certainly not a common-law action." (Id. at p. 644, 20 S. Ct. 824.) The court held: "But it will be noticed that the reservation is not of an action at common law, but of a common-law remedy; and a remedy does not necessarily imply an action." (Ibid.) "The true distinction between such proceedings as are and such as are not invasions of the exclusive admiralty jurisdiction is this: If the cause of action be one cognizable in admiralty, and the suit be in rem against the thing itself, though a monition be also issued to the owner, the proceeding is essentially one in admiralty. If, upon the other hand, the cause of action be not one of which a court of admiralty has jurisdiction, or if the suit be in personam against an individual defendant, with an auxiliary attachment against a particular thing, or against the property of the defendant in general, it is essentially a proceeding according to the course of the common law, and within the saving clause of the statute ... of a common-law remedy. The suit in this case being one in equity to enforce a common-law remedy, the state courts were correct in assuming jurisdiction." (Id. at p. 648.)
In the present case, it is true, as National Marine contends, that California, although recognizing an action for wrongful death (Code Civ. Proc., § 377.10 et seq.), does not specifically recognize an action for wrongful death occurring outside of its territorial limits. Under Knapp, however, that fact is of little importance. The question is whether California law recognizes a remedy of an in personam suit for wrongful death. It does, and that remedy is saved to suitors by section 9 of the Judiciary Act. Finally, it is of no consequence that the remedy of a suit for wrongful death was established only after the adoption of the Judiciary Act of 1789. The court in Knapp, citing its earlier opinion in Steamboat Company v. Chase (1872) 83 U.S. (16 Wall.) 522, 21 L. Ed. 369, rejected the argument that the savings clause must be limited to such remedies as were known to the common law at the time of the passage of the judiciary act. (Knapp, Stout & Company *329 v. McCaffrey, supra, 177 U.S. at pp. 646-647, 20 S. Ct. 824.)
In conclusion, where a state, such as California, provides a remedysuch as an action in personamfor a claim, such as a wrongful death claim, the State courts have subject matter jurisdiction over that claim even though the claim is brought under maritime law, and even though the actionable wrong took place outside of California's territorial limits.
In reaching this conclusion we place ourselves squarely in the camp of Garofalo v. Princess Cruises, Inc. (2000) 85 Cal. App. 4th 1060, 102 Cal. Rptr. 2d 754, where it was found that California courts have jurisdiction over maritime wrongful death actions arising outside of the State's territorial limits. We also find that we disagree with Chromy v. Lawrance, supra, 233 Cal. App. 3d 1521, 285 Cal. Rptr. 400.[8]
The decisions in Chromy and in Garofalo were based on different interpretations of the opinion in Offshore Logistics, Inc. v. Tallentire (1986) 477 U.S. 207, 106 S. Ct. 2485, 91 L. Ed. 2d 174, which involved a DOSHA action, brought in federal court, and the question of whether state or federal law governed the suit. The court in Offshore Logistics concluded, essentially, that while the savings to suitors clause acts as a jurisdictional savings clause allowing state courts to entertain actions and provide wrongful death remedies for accidents occurring both on state territorial waters and on the high seas, it does not authorize the application of state law to those actions. Rather, "the `saving to suitors' clause allows state courts to entertain in personam maritime causes of action, but in such cases the extent to which state law may be used to remedy maritime injuries is constrained by a so-called `reverseErie' doctrine which requires that the substantive remedies afforded by the States conform to governing federal maritime standards." (Id, at pp. 222-223.)
The court in Chromy found that Offshore Logistics held that the saving to suitors clause confers concurrent jurisdiction on the states to adjudicate maritime causes of action provided that the jurisdictional requirements of the state court are met. The court then characterized this holding as meaning that DOSHA actions could be tried in state courts only if the state's wrongful death statute expressly extends to deaths on the high seas. (Chromy v. Lawrance, supra, 233 Cal.App.3d at pp. 1526-1527, 285 Cal. Rptr. 400.) Offshore Logistics, however, was a federal court action. The Supreme Court, therefore, had no reason to decide whether the action might have been brought in state court, and did not address that question. It decided only that federal law governed DOSHA claims whether suit was filed in federal or state courts.
In addition, as recognized by the court in Garofalo, although the court in Offshore Logistics discussed the concurrent jurisdiction of the state courts over DOSHA actions, it said nothing from which it might be concluded that "the exercise of concurrent jurisdiction was to be premised upon a state-by-state analysis of whether a wrongful death statute had been given extraterritorial effect at the time DOSHA was enacted." (Garofalo v. Princess Cruises, Inc., supra, 85 Cal.App.4th at p. 1082, 102 Cal. Rptr. 2d 754.) To the contrary, "[h]ad the Supreme Court intended the exercise of concurrent jurisdiction to *330 turn on such an inquiry, we would have expected the court to provide a fuller and clearer statement to that effect. Federal courts routinely cite Offshore Logistics for the proposition that state courts have concurrent jurisdiction over DOSHA actions, without any additional analysis of the extraterritorial reach of the state wrongful death statute. [Citations.]" (Id. at pp. 1082-1083, 102 Cal. Rptr. 2d 754.) Finally, as also recognized by the court in Garofalo, the desire for uniformity was a factor in the Offshore Logistics court's determination that federal law should apply to all suits irrespective of forum. This desire would be frustrated by a conclusion that the "exercise of concurrent jurisdiction depended upon the extraterritorial reach of each state's wrongful death law." (Id. at p. 1083, 102 Cal. Rptr. 2d 754.)[9]
In conclusion, we, like the court in Garofalo, respectfully disagree with the decision in Chromy, and find that California's courts have concurrent jurisdiction to hear in personam maritime actions for wrongful death, although they are required to apply federal law to such actions.
11.-111.[**]
Conclusion
The judgment is affirmed.
We concur: SWAGE R, and MARGULIES, JJ.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts II and III.
[1] Pavolini was the stepfather of Donaldson and his brother, Larry Donaldson, but did not formally adopt Donaldson until shortly before his death. Larry Donaldson passed away before these proceedings.
[2] Civil Code section 1714.45 bars actions for damages due to injuries or death resulting from the use of specified consumer products.
[3] Donaldson did not bring suit against the Navy, and National Marine did not cross-complain against the Navy, apparently because all parties believed the Navy to be immune from Donaldson's claims. It also appears that although Donaldson's complaint named only National Marine and its predecessors, at least some of the other asbestos defendants were involved in the proceedings as late as May 23, 2000. It does not appear that National Marine cross-complained against these other defendants.
[4] It is not contested that the superior court had personal jurisdiction over National Marine.
[5] Contrast the situation where the exercise of personal jurisdiction over a defendant is based on an act committed by that defendant in the forum state, or where the presence of real or personal property within the state's boundaries provides a basis for jurisdiction in rem or quasi in rem. (See Hanson v. Denckla (1958) 357 U.S. 235, 246-247, 251, 78 S. Ct. 1228, 2 L. Ed. 2d 1283.)
[6] The court held: "It is settled by the adjudications of our own courts that the right to action for causing death by negligence exists only by virtue of the statute, and that where the wrong is committed within a foreign State or country, no action therefor can be maintained here, at least without proof of the existence of a similar statute in the place where the wrong was committed. [Citations.] These decisions rest upon the plain ground that our statute can have no operation within a foreign jurisdiction, and that with respect to positive statute law it cannot be presumed that the laws of other States or countries are similar to our own. The liability of a person for his acts depends, in general, upon the laws of the place where the acts were committed, and although a civil right of action acquired, or liability incurred, in one State or country for a personal injury may be enforced in another to which the parties may remove or where they be found, yet the right or liability must exist under the laws of the place where the act was done. Actions for injuries to the person committed abroad are sustained without proof in the first instance of the lex loci, upon the presumption that the right to compensation for such injuries is recognized by the laws of all countries. But this presumption cannot apply where the wrong complained of is not one of those thus universally recognized as a ground of action, but is one for which redress is given only by statute." (McDonald v. Mallory et al, supra, 77 N.Y. at pp. 550-551.)
[7] And even then, admiralty jurisdiction would not extend to all in rem actions. Admiralty jurisdiction, for example, does not extend to a contract for building a vessel or to work done or materials furnished in its construction. As to such contracts, therefore, it is "competent for the states to enact such laws as their legislatures might deem just and expedient, and to provide for their enforcement in rem." (Knapp, Stout & Company v. McCaffrey, supra, 177 U.S. at p. 643, 20 S. Ct. 824.)
[8] Our conclusion also differs from that reached by the court in Gordon v. Reynolds (1960) 187 Cal. App. 2d 472, 10 Cal. Rptr. 73. The court in that case concluded that the federal courts have exclusive jurisdiction over wrongful death actions arising outside of state territorial waters. The court, however, did not consider the effect of the saving to suitors clause on the plaintiff's claim. A decision is not authority for a proposition not considered in the court's opinion. (People v. Myers (1987) 43 Cal. 3d 250, 265, fn. 5, 233 Cal. Rptr. 264. 729 P.2d 698.)
[9] In Yamaha Motor Corp., U.S.A. v. Calhoun (1996) 516 U.S. 199, 116 S. Ct. 619, 133 L. Ed. 2d 578, the United States Supreme Court held that while federal law governs actions brought under DOSHA and the Jones Act, Congress has not proscribed remedies for the wrongful death of nonseafarers in territorial waters. The court, seemingly retreating somewhat for its earlier stance on the need for uniformity, held that state law could apply to claims arising from such deaths. (Id. at pp. 215-216, 116 S. Ct. 619.)
[**] See footnote *, ante. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260480/ | 519 Pa. 607 (1988)
549 A.2d 531
COMMONWEALTH of Pennsylvania, Appellee,
v.
Ronald LOGAN, Appellant.
Supreme Court of Pennsylvania.
Argued December 7, 1987.
Decided October 18, 1988.
*608 *609 *610 *611 *612 *613 Michael E. Floyd, for appellant.
Gaele McLaughlin Barthold, Deputy Dist. Atty., Ronald Eisenberg, Chief, Appeals Div., Donna G. Zucker, Robert A. Graci, Chief Deputy Attys. Gen., Philadelphia, for appellee.
Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA and PAPADAKOS, JJ.
OPINION ANNOUNCING THE JUDGMENT OF THE COURT
PAPADAKOS, Justice.
The Appellant was convicted by a jury of murder of the first degree and possession of an instrument of crime for axing to death a stranger on a public bus containing five other passengers and was sentenced to death.
*614 The record indicates that he delivered approximately fifteen blows to the victim's head. Testifying that "voices" directed him to act, the Appellant also claimed to have been motivated by some alleged verbal provocation on the part of the victim. An armed security guard, who was a passenger on the bus, drew his weapon and pointed it at the attacker to prevent him from fleeing. Upon being subdued by armed police who arrived quickly at the scene, he was given an abbreviated rendition of Miranda warnings but nevertheless blurted out that "I did it; I'm glad I did it; I will get ten years for it but I hope he dies." An autopsy revealed that the victim's fingers and hands had been mutilated in the defensive act of covering his head. The Appellant was read the Miranda warnings formally at police headquarters after which he confessed once again in writing to the killing. He was twenty-one years old at this time.
Following his arrest and during trial, the Appellant was confined to mental hospitals under authority of the Mental Health Procedures Act, 50 P.S. § 7305 et seq. Because of prior mental illness, he also had been institutionalized as a patient before the killing. He was medicated during all legal proceedings against him. Two court hearings concluded that he was competent to stand trial. His attorney was not permitted to withdraw from the case despite testimony that the Appellant expressed a wish to be executed and that he did not want to be defended. In the midst of these proceedings, the Appellant also threatened witnesses, the prosecutor, and the jury in open court.
He was defended unsuccessfully on the grounds of insanity under the M'Naghten rule and inability to form the specific intent required for murder of the first degree. Under Regina v. M'Naghten, 10 Cl. and Fin. 200, 8 Fug. Rep. 718 (1843), insanity is a defense if the defendant, at the time of the act, was suffering from "such a defect of reason, a disease of the mind, as not to know the nature and quality of his act or, if he did know it, as not to know that what he was doing was wrong." This is the statutory language of 18 Pa.C.S.A. § 315(b). The M'Naghten Rule is *615 preserved specifically under § 314(d). He was found guilty of that murder and of possession of an instrument of crime. At the penalty stage, the Appellant instructed his defense counsel not to plead any mitigating circumstances. The penalty jury then found two aggravating circumstances under 42 Pa.C.S. § 9711(d)(7), "grave risk of death" to others, and (d)(8), torture, but no mitigating circumstances. He was sentenced to death for murder and to a concurrent term of imprisonment of one to two years for possession of an instrument of crime.
Following our mandatory review pursuant to 42 Pa.C.S.A. § 9711(h)(1), we conclude that the facts do not justify a finding of the aggravating circumstance of torture. We affirm the sentence in all other respects under 42 Pa.C.S.A. § 9711(c)(1)(iv) which provides that "the verdict must be a sentence of death if the jury unanimously finds at least one aggravating circumstance specified in subsection (d) and no mitigating circumstances or if the jury unanimously finds one or more aggravating circumstances which outweigh any mitigating circumstances."
This appeal is based on the following allegations of error:
I. Suppression of Inculpatory Statements and Confession
Appellant's first argument is that his inculpatory statements to the police should have been suppressed because they were the product of a defective mental condition, and, therefore, his Miranda rights against self-incrimination could not have been waived by him either at the scene or at the police headquarters in a knowing, understanding, and intelligent manner. In addition, the Appellant maintains that the first Miranda warnings rendered by the police at the scene of the crime were not given immediately and were so abbreviated in content as to induce him to utter words of confession.
The Appellant was advised of his Miranda rights on two occasions during the night of the killing:
*616 a. On the Bus.
Having been drawn to the carnage by a panic-stricken passenger, two police officers sped to the bus and entered with guns drawn. They observed the Appellant and the victim's body on the floor, they yelled "freeze" to the Appellant who quickly hid behind a seat. After approaching the Appellant who had stood up in a surrender posture, one officer directed him to lie on the floor and immediately straddled the Appellant between his legs. The second officer had left the bus hurriedly to talk to witnesses. Just prior to being handcuffed inside, the prisoner mumbled words to the straddling officer that he wanted to be shot, executed, and beaten. Handcuffs were applied, and at that point the officer quoted from several, but not all, of the Miranda rights:
Q. Now, when you called rescue, after you got back to the bus, did you give the defendant any information from any cards you had in your possession?
A. Also, yes, I did. Not from a card in my possession even though at all times I do possess a card with the Miranda warnings.
However, I didn't read the litany from the card. The defendant was on the floor at this time for my safety and Lieutenant Wilson's safety. Articles were taken from his possession.
Q. What were those articles?
A. A claw hammer was taken from Mr. Logan's outer coat pocket and a rubber mallet was taken from inside his coat pocket.
As the defendant was laying there from my memory I gave him a short explanation of his rights.
Q. Okay. Can you tell us as close as you possibly can what you told him?
A. I told him that he was under arrest. I told him he had a right to remain silent. Anything he can use anything he says can be used against him in a court of law and that an attorney would be provided for him. I *617 was cut short or maybe that's not the proper term, cut short.
But
Q. Were you able to finish the litany of rights?
A. No sir, I was not.
Q. Why were you not able to finish?
A. Mr. Logan was saying words to me that I just didn't understand what he was saying. It didn't seem that I'm not saying I'm just not He just wasn't responding properly to what I was saying. (N.T., 2/5/82, pp. 42-43.)
Appellant was patted down. As noted in the testimony, a hammer and mallet were taken from his coat. Testimony at trial demonstrated also that Appellant seemed to be stating in somewhat garbled terms that he was "tired" of being provoked and that in prison he "was going to run the place."[1] As the Appellant was being led away through the bus, he blurted out that, "I did it; I'm glad I did it; I will get ten years for it but I hope he dies."
The arresting officer on the bus testified that in the clutch of those circumstances, he did not quote Miranda warnings immediately because he was engaged in the strenuous task of securing the Appellant in order to prevent harm to his own person, other officers, as well as to the prisoner himself. Other officers who had contact with the Appellant at the scene testified that they saw no evidence of the influence of drugs on the Appellant although he did appear to be excited. The officer who straddled and handcuffed the Appellant on the bus also stated on the record at trial that he had not engaged in any interrogation and had not asked the Appellant if the quoted Miranda warnings were being understood.
b. At Police Headquarters
Uncontested police testimony shows that the Appellant was taken to the interview room of the Police Administration *618 Building where he was read Miranda rights from the Standard Police Interrogation Card. Appellant orally indicated at that time that he understood each warning and even asked for clarifications. He then gave a confession which was written out by the interviewing officer who reduced it to typewritten form. Appellant read his typed confession aloud into a tape recorder and signed each page. Prior to giving this confession, he was advised again of the Miranda rights. The Appellant apprised the interviewing officer of the fact that he could read and write English because he had gone to the eleventh grade in school. He also denied any recent use of drugs except for a "reefer" which he had smoked several days before the crime. There was no evidence that the Appellant had been coerced or induced by the police into making the confession.
Appellant instantly claims that his mental illness, existing at the time he confessed, precluded any ability on his part to waive his rights in a knowing, voluntary, and intelligent manner. His inculpatory statements, he now claims, were involuntary a fortiori, and should have been suppressed. We disagree based on the recorded facts as well as the applicable law of this Commonwealth.
Our cases have held invariably that defendants with proven psychological defects are capable indeed of waiving their constitutional rights and giving voluntary confessions. See, Commonwealth v. Tucker, 461 Pa. 191, 335 A.2d 704 (1975); Commonwealth v. Fogan, 449 Pa. 552, 296 A.2d 755 (1972); Commonwealth v. Abrams, 443 Pa. 295, 278 A.2d 902 (1971); Commonwealth v. Darden, 441 Pa. 41, 271 A.2d 257 (1970), cert. denied, 401 U.S. 1004, 91 S. Ct. 1243, 28 L. Ed. 2d 540 (1971); Commonwealth v. Willman, 434 Pa. 489, 255 A.2d 534 (1969); Commonwealth ex rel. Joyner v. Brierley, 429 Pa. 156, 239 A.2d 434 (1968). Our most recent decision to this effect is Commonwealth v. Bracey, 501 Pa. 356, at n. 7, 461 A.2d 775, at n. 7 (1983) in which "we note that a person with a mental illness including a *619 history of hallucinations and delusions may be capable of waiving her constitutional rights."[2]
The voluntariness standard of Miranda requires that the prosecution prove by a preponderance of the evidence that the waiver is knowing and intelligent. This requires a two-step analysis. First, the waiver must have been voluntary in the sense that it was an intentional choice made without any undue governmental pressure; and, second, that the waiver must have been made with a full comprehension of both the nature of the right being abandoned and the consequences of that choice. We employ a totality of circumstances test in reviewing the waiver. Commonwealth v. Scarborough, 491 Pa. 300, 312-313, 421 A.2d 147, 153 (1980). We are bound also by the suppression court's findings of fact if they are supported by competent evidence.
Under these facts, the confession at police headquarters was the product of a free, unconstrained, and rational choice of its maker. The Appellant was fully aware of the fact that the interrogation concerned an investigation *620 into the death of the victim, as required by Commonwealth v. Dixon, 475 Pa. 17, 22, 379 A.2d 553, 556 (1977). All other facts recited as part of the circumstances of this confession compel us to conclude that the Appellant waived his Miranda rights in full conformity with legal requirements. In the absence under our law of a per se rule that no waiver can be voluntary when made by a person who is mentally ill, we hold that the suppression court was correct. Despite his mental illness, the Appellant was aware of the nature of the right which he was surrendering and of the consequences of that choice. For these identical reasons, we reject the related allegation that counsel was ineffective for failing to employ psychiatric testimony at the suppression hearing to demonstrate that his mental illness prevented a proper waiver.
As to the inculpatory utterances made on the bus, at the outset we observe that they were blurted out freely and were not the results of any interrogation. Obviously they were not delusional for the reason that the Appellant knew full well that he had killed a person, could go to prison, and clearly articulated his motive for the act. Nor is there any need to be concerned about the abbreviated nature of the Miranda rights given from memory by the officer who straddled the Appellant on the bus. Under the circumstances of trying to restrain a person who had just hacked away violently at a victim's head, we find full justification for the officer's conduct in attending to the immediate requirements of the safety and security of all parties at the scene.
A corollary contention is that defense counsel was ineffective for failing to challenge the adequacy of the abbreviated Miranda warnings given on the floor of the bus as well as failing to give them immediately upon subduing and straddling the Appellant. As part of this complaint, the Appellant argues that the Omnibus Pre-Trial Motion was stated in such broad terms as to dissipate any specific reference to these discrete problems.
*621 The allegation is patently without merit. Faced with the bloody crisis of subduing an identified killer on a public bus justified fully the actions of the police in attending to the immediate demands of safety.[3]
II. Competency to Stand Trial
Appellant's second allegation of error in this case is that he was incompetent to stand trial.
The record shows that following the hearings on the suppression motion, defense counsel requested an immediate competency hearing. Counsel informed the court at that time that his client was insisting on pleading guilty, demanding to be executed, and refusing to cooperate in the preparations for trial. Counsel also unsuccessfully requested that he be excused from the case for these reasons. The present allegation derives from this same set of demands that he be executed, threat of non-cooperation with his attorney, the fact that he had been earlier treated for mental disorders, that he remained hospitalized in the care of psychiatrists since his arrest, and that his behavior during trial which included outbursts of laughter, threats to witnesses and the prosecuting attorney, and a public threat to kill members of the jury. It is alleged in this appeal that, viewed in these aggregate behavior patterns, the Appellant should not have been tried because he was incompetent.
Two competency hearings were held by the court. Both times he was found to be competent to stand trial. Psychiatric testimony, of course, was crucial to these evaluations. Examining the Appellant on the eve of the trial, the court psychiatrist argued that he was incompetent to stand trial *622 on that day but that a final decision on competency should be left to the specialist who was conducting the hospital treatment.[4] The treating psychiatrist, in turn, declared the Appellant to be competent because he knew the nature of the charges, the function of the court, possible penalties (including death sentences), and the purposes of the prosecutor and defense counsel. The defense psychiatrist, Dr. Gary M. Glass, on the other hand, testified that the Appellant was unable to "process what is in his own best interests." Pertinent testimony by the defense psychiatrist is as follows:
A. It is my professional understanding and my professional role that many of these people, the vast majority of these people are not making a rational choice free of emotional disorder about whether they can live or should live or should die. I think Ronald is in that situation right now. I believe he cannot make a rational choice about his own defense because at this point in time, he is seeing himself in a very depressed state and is choosing to act in very self-destructive ways.
Q. Well, Doctor, don't you do you realize that the defendant doesn't have to put on any evidence, he doesn't have to do anything in this case, that he has no burden to produce any evidence. Do you understand that?
A. Yes, I do.
* * * * * *
Q. Doctor, is it your testimony that this defendant is unable to assist his attorney in his own defense?
* * * * * *
The witness: I think he is primarily incapable at this time of acting in his own behalf or processing what needs to be processed to make those decisions. (N.T., 2/22/82, pp. 27-28.)
*623 At the conclusion of the expert testimony, the trial court held that the Appellant was competent to go to trial. In reaching this determination, the court underscored the distinction between an incapacity to assist in a defense and an unwillingness to do so. On this basis, it was held that the defense's own psychiatrist, in fact, characterized the Appellant's state of mind as falling into the latter category. Moreover, the court found that the Appellant had failed to meet his burden of proof of demonstrating incompetency by clear and convincing evidence as required by the Mental Health Act of 1976, 50 P.S. § 7403(a): "The moving party shall have the burden of establishing incompetency to proceed by clear and convincing evidence. The determination shall be made by the court."[5]
Our most recent decision on this subject is Commonwealth v. Banks, 513 Pa. 318, 521 A.2d 1 (1987):[6]
The test to be applied in determining the legal sufficiency of [a defendant's] mental capacity to stand trial ... is ... his ability to comprehend his position as one accused of murder and to cooperate with his counsel in making a rational defense. See Commonwealth v. Moon, [383 Pa. 18, 117 A.2d 96 (1955) ], and Commonwealth ex rel. Hilberry v. Maroney, [417 Pa. 534, 544, 207 A.2d 794, 799 (1965) ]. Or stated another way, did he have sufficient ability at the pertinent time to consult with his lawyers with a reasonable degree of rational understanding and have a rational as well as factual understanding of the proceedings against him. See, Dusky v. United States, 362 U.S. 402 [80 S. Ct. 788, 4 L. Ed. 2d 824] (1960). Otherwise, the proceedings would lack due process: Bishop v. United States, 350 U.S. 961 [76 S. Ct. 440, 100 L. Ed. 835] (1956).
The fact that a defendant raises a bizarre response to his counsel's strategy, or refuses to cooperate with that strategy, *624 or displays childish and threatening behavior at trial does not necessarily constitute legal incompetency. Under Banks, supra, 513 Pa. at 343, 521 A.2d at 13, "The issue is the defendant's ability to cooperate and not whether he is actually cooperating." (Italics in the original.) Under this rule, there is sufficient evidence to support the lower court's ruling on competency. In addition to psychiatric testimony, the record discloses that the Appellant helped to select jurors, and, as noted by the trial judge, his own statements on the witness stand even evinced a sufficient degree of rationality to enable him to recognize the existence of his own illness.[7] While admittedly he suffered from a mental illness, there are no facts which would lead an appellate court to decide that he did not understand to a clear and convincing degree the nature and function of a criminal trial. The determination of competency, lastly, rests in the sound discretion of the trial judge and can be disturbed only upon a showing of abuse of that discretion. Banks, supra, 513 Pa. at 341, 521 A.2d at 12, and cases cited therein. We agree with the lower court's decision that the Appellant was competent to stand trial but chose rationally not to assist in his own defense, and we reject appellate counsel's citation of error.
III. Did the Trial Court Err in Directing Defense Counsel to Provide the Prosecution with a Report of a Defense Psychiatrist?
The Appellant argues that the psychiatric report of his own expert, Dr. Gary M. Glass, dated February 17, 1982, *625 should not have been subject to discovery by the Commonwealth under Pa.R.Crim.P. 305(C)(2)(a):
(2) Discretionary With the Court:
In all court cases, if the Commonwealth files a motion for pretrial discovery, the court may order the defendant subject to the defendant's rights against compulsory self-incrimination, to allow the attorney for the Commonwealth to inspect and copy or photograph any of the following requested items, upon a showing of materiality to the preparation of the Commonwealth's case and that the request is reasonable:
(a) results or reports of physical or mental examinations, and of scientific tests or experiments made in connection with the particular case, or copies thereof, within the possession or control of the defendant, which the defendant intends to introduce as evidence in chief, or which were prepared by a witness who the defendant intends to call at the trial, when the results or reports relate to the testimony of that witness, provided the defendant had requested and received discovery under paragraph B(1)(e);
The record of testimony indicates that on direct examination, Dr. Glass was limited to statements regarding the Appellant's general mental state at the time of the crime and whether the Appellant was mentally capable of forming a specific intent to kill. Defense counsel did not question the witness on the particular subject of insanity under M'Naghten. On cross-examination, however, the prosecution elicited testimony on both issues of the mental state required to form specific intent and insanity. Dr. Glass testified that he believed that while the Appellant was sane at the moment of the killing, specific intent was not present. Following cross-examination, the prosecution moved successfully over objection to obtain a copy of the expert's report.
The Appellant now insists that although the substance of the medical report itself does address specific intent as well as M'Naghten, the insanity issue was not brought out on *626 direct testimony. The report, therefore, could not relate to the expert's testimony and be subject to discovery as required by the statute. Once in possession of the report, the Appellant further argues, the Commonwealth could prejudice him by revealing to the jury that his own expert had bolstered the damaging oral testimony on insanity with an existing written statement which repudiated that very defense.
In rejecting the Appellant's contentions, we take special note of the fact that the psychiatric report was not introduced at trial. We conclude, in addition, that the expert's direct testimony of the Appellant's mental state regarding specific intent addressed the contents of the medical report.
The insanity defense had been put on the record earlier by the Appellant. Under any sensible analysis, the psychiatrist's statement ran in an indistinguishable manner to the issue of whether the Appellant was insane under M'Naghten. That is to say that the testimony regarding mental illness directly touched and concerned the insanity problem. It makes very little sense to draw non-existent distinctions from this evidence. By employing the phrase "may order," we conclude further that the statute empowers courts to use discretion in ordering discovery of such documents. In this context, the trial court did not abuse its discretion.[8]
The Appellant also claims ineffective assistance of counsel in a closely-related allegation. The defense had called Dr. Swartzman as a surrebuttal witness regarding diagnosis and treatment of the Appellant's mental illness. Again, the specific issue of insanity was not mentioned. The prosecution, nevertheless, was permitted to ask questions without objection on the subject of M'Naghten, and the Appellant instantly claims error by his silent defense counsel. Although we are reviewing a citation of ineffective assistance, the claim fails for the same reason as cited *627 above. Dr. Swartzman's testimony was bound up inseparably with the insanity defense.
IV. Insufficiency of Evidence
The Appellant also claims that the Commonwealth failed to prove beyond a reasonable doubt that he was sane at the time of the murder, failed to prove in the same manner that he had the requisite specific intent to kill, and, additionally, that the jury's sentence itself was based on his threats to the jury rather than on the evidence. Plainly all these allegations of error are unfounded for the following reasons:
a. The Insanity Issue.
Our cases are uniform in holding that in a trial for murder, the Commonwealth must establish "that the accused is of sound memory and discretion, knows right from wrong and appreciates the nature and quality of his act," i.e., sane under Pennsylvania M'Naghten standards. Commonwealth v. Weinstein, 499 Pa. 106, 451 A.2d 1344 (1982). Moreover, our review is limited in the sense that "Psychiatric testimony, like any other evidence, is for the trier of fact to consider and to determine what weight it should be given." Commonwealth v. Roberts, 496 Pa. 428, 435, 437 A.2d 948, 951 (1981); Commonwealth v. Whitfield, 475 Pa. 297, 302, 280 A.2d 362, 364-65 (1977); Commonwealth v. McCusker, 448 Pa. 382, 292 A.2d 286 (1972).
With the exception of the Appellant's own statement on the witness stand, all other testimony, including that of the defense's psychiatrist, concluded that the Appellant understood the nature of his act and knew that it was wrong. His own words uttered as he was being led from the bus affirm his sanity: "I did it; I'm glad I did it; I will get ten years for it but I hope he dies." He likewise testified on his own behalf that while he knew that he had killed a man, he was driven to it by "voices":
Q. Did you think Mr. Tilson was a log?
A. No. I didn't think he was a log.
*628 Q. After you struck him the first time, did you see any blood?
A. Uh-huh. Yeah.
Q. Why didn't you stop then?
A. Because the voices was still telling me to keep hitting him.
Q. Do you know you hit him about 15 times?
A. I don't think I hit him that much, though. I don't remember how many times exactly I hit him. I know I did it until the voices let up.
* * * * * *
Question: Do you understand that you killed a man tonight? Answer: Yeah. I understand and I'm glad. Now, did you tell the police that?
A. I probably did, yeah.
Q. Were the voices telling you to tell them that then?
A. Yeah, it was.
Q. Question: Were you trying to kill the guy when you hit him with the axe? Do you remember that question?
A. Yeah, I remember.
* * * * * *
Q. Do you remember the police giving you an opportunity to say what you had to say on the tape?
A. Yeah. I was doing a lot of singing and whatnot on that tape.
Q. You were?
A. Uh-huh.
Q. You didn't say on that tape anything about voices, did you?
A. No. I don't think so.
There was indeed adequate evidence from which to conclude that the Commonwealth had borne successfully its burden of proving the Appellant's sanity beyond a reasonable doubt.[9]
*629 b. The Specific Intent Issue
The Appellant urges us to conclude that his mental illness made it impossible for him to form specific intent, and, in the alternative, that the prosecution's evidence was insufficient to prove specific intent beyond a reasonable doubt as required by Weinstein, supra, 499 Pa. at 115, 451 A.2d at 1348.
We need not pause again for any lengthy review of our standing recognition that evidence of mental illness can be introduced in first degree murder cases in an effort to negate the specific intent to kill. Most recently, our law on this subject has been summarized in Commonwealth v. Terry, 513 Pa. 381, 521 A.2d 398 (1987). We agree, as well, that such evidence was admitted properly in that it dealt with the topic of cognitive functions necessary to formulate specific intent under the Weinstein test, supra, 499 Pa. at 114, 451 A.2d at 1347. The point at issue here, however, is whether the Commonwealth established the existence of specific intent beyond a reasonable doubt. On the record before us, we have determined that the Appellant's complaint is without merit.
We concur with Dr. Richard Swartzman, the hospital psychiatrist, who testified that a "man certainly may be diagnosed as psychotic and remain a psychotic. That does not mean that he cannot form the intent to do something." We repeat that it does not follow from the mere existence of a personality disorder, therefore, that there has been an impairment of the cognitive functions necessary to form specific intent. Terry, supra, 513 Pa. at 396-397, 521 A.2d at 405-406. We ground our definition of specific intent in the last analysis on the "assumptions of law rationality, free will, and choice." As a legal concept of specific intent for this crime, we mean that the killer plans and carries out the act to advance his own desire and that he knows the act will result in the death of another. Weinstein, supra, 499 Pa. at 117, 451 A.2d at 1349.
*630 Expert testimony as to the existence of specific intent in this case comes down to the fact that with the lone exception of the Appellant's own psychiatrist, Dr. Gary M. Glass, all other medical testimony concluded that the intent to kill definitely was present. Additionally, we have the objective fact that the killer struck his victim approximately fifteen (15) times while brandishing his hatchet. As noted above, at the scene he exclaimed also that "I did it" and then proceeded to confess to the authorities that he had intended to kill the victim because he thought the victim was provoking him. Taken as a whole, such testimony is unambiguous and conclusive as to the existence of specific intent. The Commonwealth met its burden of proof. In viewing the evidence in light most favorable to the Commonwealth, we conclude that the jury was justified in disbelieving his defense. Commonwealth v. Christy, 511 Pa. 490, 515 A.2d 832 (1986), cert. denied, 481 U.S. 1059, 107 S. Ct. 2202, 95 L. Ed. 2d 857 (1987).
c. The Extra-Evidentiary Basis of the Verdict
The Appellant insists that the jury's sentence was predicated on a fear that he would carry out his death threats against them rather than on the factual evidence. This allegation stems from the following statement made to the jury upon the customary invitation by the court as the jury prepared to deliberate his sentence:[10]
THE COURT: Mr. Tatum, I just want to state for the record that your client is You can explain to your client that if he wishes to make a statement
MR. TATUM: He does.
THE COURT: He can do so.
MR. TATUM: He does.
THE COURT: All right.
(Pause)
THE DEFENDANT: I'll give you one chance to kill me. You better take it now because if I ever get out I'll kill everyone of you.... That's my statement.
*631 MR. TATUM: I just want to add one other thing. I am continuing to raise the question of this defendant's competency to be involved in this trial from the beginning to now.
THE COURT: It's your objection is noted on the record and objection overruled.
I think that completes our proceeding here. The jury is now directed to return again to the jury room to decide on the sentence.
THE COURT CRIER: Everybody remain seated while the jury leaves the room.
(Whereupon, the jury returned to the deliberation room to deliberate on a sentence at 12:37 p.m.) (N.T., 3/6/82, pp. 18-19.)
Initially, we insist that the integrity of the jury system cannot allow a defendant to benefit from his own wrongs. In his opinion, the trial judge properly cited the legal maxim that a person cannot make his condition better by his own tort. To reward such conduct surely would amount to an affront to the judicial system by opening the door to all defendants who, facing a losing trial, would engage in similar conduct in anticipation of receiving relief. We emphasize in this appeal that the Appellant offers no independent proof beyond mere conclusions that the jury was swayed as a matter of fact. We are confronted, instead, with the circular argument that the sentence itself and the speed with which the jury arrived at a sentence (twenty-eight minutes) speak for themselves, i.e., the severe nature of the sentence can mean only that the jury was controlled by the threat and decided to eradicate its source in the interests of personal safety. That argument must fail. There is simply no reason advanced in this appeal to distrust the validity of the jury's finding. The jury was polled individually, and no evidence whatsoever exists to raise even the barest suspicion that the jury was motivated by such fear.
*632 V. Ineffective Assistance of Counsel
The Appellant raises four allegations of ineffectiveness of counsel at trial and at sentencing, three of which already have been disposed of in the above analysis. The remaining allegation of ineffectiveness of defense counsel concerns the failure of his attorney to plead mitigating circumstances to the penalty jury.
The record indicates that the Commonwealth introduced evidence of two aggravating circumstances, including testimony from a police witness. By contrast, the Appellant's counsel told the court that he would obey his client's instructions to remain silent and not plead mitigation. Pertinent testimony is as follows:
MR. KING: Your Honor, of the 7 aggravating circumstances, the Commonwealth will only seek to enter evidence on the record on 2 of the 7 aggravating circumstances.
THE COURT: And what numbers are they so I can bring it to the jury's attention?
MR. KING: They are number 7, in the commission of the offense, the defendant knowingly created a grave risk of death to another person in addition to the victim of the offense.
The other would be that the offense was committed by means of torture. Those would be the 2 that the Commonwealth will urge as aggravating circumstances and is prepared to offer evidence on.
THE COURT: Mr. Tatum.
MR. TATUM: Yes, sir. My client has instructed me to thank the jury and yourself for seeking seeing that he dies. He has instructed me further that he does not want me to make any argument. I am going to abide by his request. I think the jury has heard enough anyway to determine whether there are mitigating circumstances or not.
In addition, I have asked the court to give me an opportunity to present other evidence on Monday. The Court has refused that request and I am not prepared and *633 especially since my client has instructed me not to make any defense in this matter, I will not.
THE COURT: Well, I'll proceed with reviewing all the circumstances. (N.T., 3/3/82, pp. 8-9.)
The Appellant insists that his counsel was derelict in not claiming mitigation based on the statutory factors of youth and mental illness. 42 Pa.C.S. § 9711(e)(2), (3), (4).
Obviously, the Appellant, present in the courtroom, was determined not to present any evidence, and counsel followed his instructions. In his above statement, however, counsel expressly told the jury to consider the aggregate trial evidence as they deliberated a sentence. That evidence surely was sufficient for the jury's purpose of considering mitigating circumstances, especially in light of the judge's recitation of the circumstances and guidance in their consideration:
Now, we come to the mitigating circumstances. These are circumstances which would tend to reduce the gravity of the offense. Mitigating circumstances shall include the following:
1. The defendant has no significant history of prior criminal convictions.
2. The defendant was under the influence of extreme mental or emotional disturbance. That is something that the jury can consider.
3. The capacity of the defendant to appreciate the criminality of his conduct or to conform his conduct to the requirements of law was substantially impaired. That is certainly a matter for the jury to consider.
4. The age of the defendant at the time of the crime. I believe his age is somewhere around 21, 22 years old. That's something for the jury to consider.
5. The defendant acted under extreme duress. Although no such duress as to constitute a defense to prosecution under section volume 18 of the Pennsylvania Consolidated Statutes, Section 309 relating to duress which I will read to you, or acted under the substantial domination of another person.
*634 Under Section 309, duress is explained as follows:
It is a defense that the actor engaged in conduct charged to constitute an offense because he was coerced to do so by the use of or a threat to use unlawful force against his person or the person of another which a person of reasonable firmness in his situation would have been unable to resist.
And the defense provided by this section is unavailable if the actor recklessly placed himself in a situation in which it was probable that he would be subjected to duress. The defense is also unavailable if he were negligent in placing himself in such a situation whenever negligence suffices to establish culpability for the offense charged. In my opinion, we do not have that situation here.
6. That the victim was a participant in the defendant's homicidal conduct or consented to the homicidal acts. It does not appear to be that situation here.
7. The defendant's participation in the homicidal act was relatively minor. We do not have that situation.
8. Any other evidence of mitigation concerning the character and record of the defendant and the circumstances of his offense.
Now, after those are the facts for this jury you're limited to in deciding death or life imprisonment. (N.T., 3/3/82, pp. 9-13.)
On this record, the fact that counsel obeyed instructions did not prevent the jury in any way from being informed of the details of mitigation and of its duty to find and weigh both aggravating and mitigating circumstances.[11] There was no error here.
VI. The Aggravating Circumstances
The sentencing jury found two aggravating circumstances under 42 Pa.C.S. § 9711(d):
*635 7. In commission of the offense the defendant knowingly created a grave risk of death to another person in addition to the victim of the offense.
8. The offense was committed by means of torture.
The facts of this case compel us to reverse the finding of (8), torture, but to affirm the finding of (7).
Evidence of a grave risk of death to others abounds in the evidence of an axe-wielding killer who was engaged in a grizzly act on a public bus in the midst of other passengers. These passengers feared for their lives and rushed to the doors in order to escape from the threatening situation. One witness testified that, "I was shocked and almost stayed there, right? I ran to the front of the bus right here hollering to the driver to let me off, let me off." Another passenger stated: "I was a very frightened man seeing something like this. I didn't want to be attacked like that. I wanted to escape." The bus driver, when asked why he did not help the victim, responded that, "I was a little afraid. I'm sorry." (N.T., 2/24/82, p. 59.) In reviewing this testimony, we are guided by a sufficiency of evidence standard enunciated in Commonwealth v. Stoyko, 504 Pa. 455, 475 A.2d 714 (1984), in which we also rejected the argument that the defendant must "knowingly" (italics in the original) endanger others as a basis for this aggravating circumstance.
In recent years, we have ruled on several cases involving fact patterns which constituted sufficient evidence to support a finding under § 9711(d)(7). In Commonwealth v. Griffin, 511 Pa. 553, 515 A.2d 865 (1986), we did not disturb a sentence of death where the defendant had shot and killed a victim on a crowded college dance floor. Similarly, in Commonwealth v. Albrecht, supra, this particular aggravating circumstance was affirmed where the defendant had been convicted of the intentional killing of his wife by arson which also had claimed the lives of his daughter and mother. Stoyko's, supra, facts led to a finding of a grave risk of death to others where the defendant shot his victim in a car carrying other passengers.
*636 On this evidence, it is obvious that the finding of this aggravating circumstance was justified in all respects. On the other hand, there are no objective facts which could be employed to justify a finding of torture. The Appellant's conduct was aimed at killing his victim outright. The fact that the victim sought to defend himself by putting his hands over his head is not proof of torture. Without any factual evidence to demonstrate torture, we decide, therefore, to reverse the penalty jury on the specific finding of the aggravating circumstance of torture under § 9711(d)(8). Under 42 Pa.C.S.A. § 9711(c)(1)(v), we affirm the death penalty where there is one aggravating circumstance but no mitigating circumstance.
Finally, under our statutory duty to review death cases to determine whether the imposed sentence of death is "excessive or disproportionate to the penalty imposed in similar cases," according to 42 Pa.C.S. § 9711(h)(3)(iii), we have conducted an evaluation of all convictions of murder of the first degree prosecuted under the Act of September 13, 1978, P.L. 756, No. 141, 42 Pa.C.S. § 9711. We have reviewed the data and information pertaining to similar cases that have been compiled by the Administrative Office of Pennsylvania Courts (AOPC) pursuant to this Court's directive as enumerated in Commonwealth v. Frey, 504 Pa. 428, 475 A.2d 700 (1984). We find that the sentence of death is not excessive or disproportionate to the penalty imposed in similar cases, 42 Pa.C.S. § 9711(h)(3)(iii). We also find that the evidence supports the finding of an aggravating circumstance specified in subsection (d), 42 Pa.C.S. § 9711(h)(3)(ii), and that the sentences were not the product of passion, prejudice or any other arbitrary factor, 42 Pa.C.S. § 9711(h)(3)(i).
For the foregoing reasons, we uphold the convictions and affirm the sentence of death based on the conviction for murder of the first degree and the sentence of imprisonment for possession of an instrument of crime.[12]
*637 McDERMOTT, J., joins in this opinion and also files a concurring opinion in which LARSEN, J., joins.
FLAHERTY, J., concurs in the result.
NIX, C.J., files a dissenting opinion in which ZAPPALA, J., joins.
McDERMOTT, Justice, concurring.
I join in the opinion announcing the judgment of the Court, but write separately to express the following views.
There is no doubt that there are cases which upon their face are so bizarre, so alien to the ordinary, that they raise the question of whether a sane man would do them. However, the issue of when a person is sane as to be legally responsible is only part of the problem directly before us.
The first question is whether that issue can be fairly tried. That involves a determination of whether the person is competent to stand trial, so as to be able to assert and cooperate in a defense, whatever that defense may be. In determining that question a court cannot decide solely upon the conduct as alleged or conceded by the accused, i.e., that because the conduct itself outrages normal expectations the accused is incompetent to stand trial. There must be more than seeming bizarre methods; otherwise active criminal intent could be hidden simply by the method employed. Some evidence beyond the method employed must be presented, and one cannot avoid trial simply because they say they are insane or incompetent at the time of the crime.
A court may determine competency by observing the accused, ordering medical and psychiatric evaluation, or hearing the previous history and the present evaluation of medical experts offered by either side, none of which the court is required to accept or believe.
When the court has made a decision on competency we cannot differ with that finding because we would have found differently; nor are we in a position to evaluate the *638 accused or the witnesses who the court has accepted or rejected. Neither we, nor the court below, however, should determine competency solely because the methods employed are outrageous or bizarre. This of course cannot satisfy every differing view on what constitutes competency, but it is all we have on the preliminary question and its defects cut both ways.
The ultimate safeguard is that at trial fact finders are entitled to rule according to their own wisdom under all the facts. At trial the question is different; the issue there is whether the person is sane under the law, a consideration that includes the conduct itself as well as any other evidence offered. Hearing all, factfinders may choose to believe what they will, and decide that no sane person would do what was done, regardless of what any one says. They may also believe the accused was a sane person who chose bizarre or unusual methods to accomplish his own purposes. Unless there is more than the method employed by the accused they should hear the case and make the final decision.
LARSEN, J., joins in this opinion.
NIX, Chief Justice, dissenting.
Because of a profound mental defect, appellant has been convicted by a jury of murder in the first degree and sentenced to death without being accorded a fair trial. The record, replete with evidence of his self-destructive mental illness, stands as a mockery of our criminal justice system. I would reject the trial court's finding of mental competency, vacate the guilty verdict obviously born of appellant's mental illness, and remand for a new trial once appellant has attained the necessary lucidity for the just adjudication of his criminality.
Our system of criminal jurisprudence, founded as it is upon the belief that no man should be deprived of his life or liberty without first having been accorded the fair and impartial judgment of his peers, see Pa. Const. art. I § 9, should never be permitted to indulge a mentally ill defendant, *639 whether competent to stand trial or not, in the termination of his existence. Although the competency standard was designed to effectuate the constitutional principle of a fair trial, see Pate v. Robinson, 383 U.S. 375, 378, 86 S. Ct. 836, 838, 15 L. Ed. 2d 815, 818 (1966); Commonwealth v. Marshall, 456 Pa. 313, 319, 318 A.2d 724, 727 (1974); Commonwealth v. Bruno, 435 Pa. 200, 205 n. 1, 255 A.2d 519, 522 n. 1 (1969), the rule was by no means meant to encompass the entire right of an individual to a just proceeding. Thus, even though a defendant has been adjudged competent under the statutory definition of that term, the court's duty is not at an end. Where defendant's mental illness continues through trial, the court must review the record of the proceedings to determine whether the accused has been accorded a fair trial.
Under this procedure, our analysis must begin with the question of whether the trial court erred in finding appellant competent to proceed on criminal charges. The standard for competency is found in section 402(a) of the Mental Health Procedures Act, 50 P.S. § 7402(a). It states that
Whenever a person who has been charged with a crime is found to be substantially unable to understand the nature or object of the proceedings against him or to participate and assist in his defense, he shall be deemed incompetent to be tried, convicted or sentenced so long as such incapacity continues.
This provision in essence codified the common law standard for incompetency first announced in Commonwealth ex rel. Hilberry v. Maroney, 424 Pa. 493, 495, 227 A.2d 159, 160 (1967), and employed by the Court up to its most recent decision in Commonwealth v. Banks, 513 Pa. 318, 340-341, 521 A.2d 1, 12 (1987).
[T]he test to be applied in determining the legal sufficiency of [a defendant's] mental capacity to stand trial ... is not the M'Naghten "right or wrong" test, but rather his ability to comprehend his position as one accused of murder and to cooperate with his counsel in making a rational defense. Or stated another way, did he have *640 sufficient ability at the pertinent time to consult with his lawyers with a reasonable degree of rational understanding, and have a rational as well as a factual understanding of the proceedings against him.
Commonwealth ex rel. Hilberry v. Maroney, 424 Pa. at 495, 227 A.2d at 160 (citations omitted).
See also, Commonwealth v. Martinez, 498 Pa. 387, 391, 446 A.2d 899, 901 (1982); Commonwealth v. Higgins, 492 Pa. 343, 349, 424 A.2d 1222, 1225 (1980), cert. denied, 452 U.S. 919, 101 S. Ct. 3057, 69 L. Ed. 2d 424; Commonwealth v. Tyson, 485 Pa. 344, 349, 402 A.2d 995, 997 (1979); Commonwealth v. Melton, 465 Pa. 529, 534, 351 A.2d 221, 224 (1976); Commonwealth v. Davis, 459 Pa. 575, 577-578, 330 A.2d 847, 848 (1975).
The lower court in the instant matter accorded appellant two competency hearings, both of which resulted in a finding of mental competence under 50 P.S. § 7402(a). Appellant raises the argument on this direct appeal that the standard embodied in section 7402 should be applied in situations where, although able to comprehend the nature of the proceedings and to assist counsel in his defense, if he chose to do so, the defendant is unable to understand what is in his own best interest. In essence, what appellant is arguing is that, in some situations, an incompetent criminal defendant might be able to assist in his own defense, if he would so choose, but be unable rationally to make that choice because of his mental defect. The Commonwealth counters by arguing that this subjective evaluation does not speak to the question of competency and offers no insight into the defendant's ability to participate in and understand the proceedings against him.
Appellant's position is supported to a large extent by Dr. Gary M. Glass, a psychiatrist, who testified on behalf of appellant following numerous contacts with him. Following an examination of appellant one (1) day before the expert's testimony during the competency hearing and two (2) days before the actual start of trial, Dr. Glass diagnosed appellant as suffering from manic-depressive illness or bipolar *641 affective disorder. He testified that appellant was severely depressed and suicidal, and that appellant had attempted suicide in the past. He further testified, in questioning by court-appointed defense counsel:
Q: Is Ronald in his present status able to co-operate with me in the preparation of his defense?
A: No, I don't believe he can.
Q: Why is that?
A: Because he while doctor Swartzman's report is true in part that he is able to understand the proceedings and I agree with that. He is able to understand the roles of the varying people in the scenario and comprehend that. He does have a complete understanding of what the possible outcomes are.
On the other hand, he is not able to process for himself what is in his own best interests and at this point in time, given his depressive status, likely in any way possible to act against his own best interests rather than on behalf of that.
(N.T. 2/22/82, p. 19)
A: ... I do not believe that he is capable of cooperating except in one direction and that is against his own best wishes. We know very commonly that people when they are depressed often act or most often act in ways that maintain depression that are self-punitive, that are self-destructive in many ways and I believe that Ronald at this point in time cannot make a rational decision as to whether he wants to help himself or hurt himself. I think that that is, his condition has him predisposed to self destructive behavior.
(N.T. 2/22/82, p. 20)
On cross-examination, Dr. Glass again restated his opinion as to appellant's competency:
Q: You said you disagreed that he's mentally capable of cooperating with his attorney in assisting his defense if he chooses to.
A: What I said was that he is not free to make a rational and independent choice independent of his emotional *642 disturbance. He will do anything at this point. He will be highly co-operative with any process whether it be court, the streets or anyplace else that is destructive to him personally or in other ways. He is not free from his mental illness such that he can make a fully self determined decision.
(N.T. 2/22/82, p. 24)
Q: Now, you are saying that you're not saying that he's not capable of assisting his attorney, are you?
A: I am saying that he is not capable of making an unemcumbered choice as to whether he wants to assist his attorney or not.
(N.T. 2/22/82, p. 25)
Immediately subsequent to this testimony, the lower court rendered its decision finding appellant competent to stand trial. It thus rejected the testimony of Dr. Glass in favor of that of Dr. Richard Swartzman, appellant's treating physician. Dr. Swartzman had previously submitted a report wherein he opined that appellant, despite his mental illness, was competent to stand trial.[1] At this point it was proper for the court to find appellant competent, and I would not fault the court for beginning the trial. A determination of competency is within the sound discretion of the trial court. Commonwealth v. Banks, 513 Pa. at 341, 521 A.2d at 12; Commonwealth v. Hart, 501 Pa. 174, 177, 460 A.2d 745, 747 (1983); Commonwealth v. Ware, 459 Pa. 334, 356, 329 A.2d 258, 269 (1974).
The error of that court which demands a reversal of appellant's conviction instead occurred in not declaring appellant incompetent, despite repeated requests by defense counsel, when during the course of trial it became apparent that appellant was unable to cooperate with his trial counsel and to act in a manner which might ultimately win his *643 acquittal.[2] This error has been compounded by the strict construction of the competency standard employed by the majority. Even if I were to adopt such an unjustifiable interpretation of section 402 of the Mental Health Procedures Act, and thus hold that appellant was competent to stand trial, I would further review the record with an eye toward determining whether appellant's mental illness, although not impeding his ability to comprehend the proceedings or to assist counsel, nevertheless deprived him of his constitutionally guaranteed right to a fair trial.
Notwithstanding the expert testimony, the sole evidence cited by the majority to support its affirmance of the competency finding was appellant's aiding in the selection of the jury empaneled in his case.[3] His actions during the lucid moments, however, do not negate the clear import of his bizarre behavior at other times before and during the trial. How this Court, after reviewing the entire record as we are required to do in all capital cases, see Commonwealth v. Zettlemoyer, 500 Pa. 16, 26 n. 3, 454 A.2d 937, 942 n. 3 (1982), cert. denied, 461 U.S. 970, 103 S. Ct. 2444, 77 L. Ed. 2d 1327 (1983), can ignore the plethora of evidence which shows complete incompetency on the part of defendant, and the unfairness in permitting the adjudication of his fate while in a diseased mental state, is beyond my comprehension.
Appellant suffered from mental illness for at least two (2) years prior to the homicide. Appellant's father, Melvin *644 Logan, testified that appellant was initially admitted for treatment to Misericordia Hospital in 1978 suffering from a nervous breakdown. He was subsequently admitted to the Philadelphia State Hospital, referred to as "the Byberry", sometime in 1979 for a period of eight to nine months. During his stay, appellant exhibited nervous behavior, such as "pacing the floor, not able to hold a conversation.... Most of the things he did was laugh and grin." (N.T. 3/1/82, p. 65). Appellant was released to the custody of his aunt, but was again hospitalized on October 16, 1980, this time at the Philadelphia Psychiatric Center. According to Dr. Seung Kim, appellant's treating psychiatrist at the Center, he was admitted with preliminary diagnoses of chronic schizophrenia, manic-depressive illness, and inadequate personality. Upon admission, he exhibited severe psychomotor agitation and fast, continuous talking to himself. Against medical advice, he was discharged on November 1, 1980, still suffering from schizoaffective disorder. (N.T. 3/4/82, pp. 6, 7, 11-13, 25). The discharge predated the homicide by only forty (40) days.
Appellant's conduct during and immediately subsequent to the homicide further evinced a diseased mind. The nature of the attack, an unprovoked, gruesome attack upon an unfamiliar victim which ended only after the weapon became imbedded in the victim's skull, indicated that the mental illness had not subsided but was prevalent. After police arrived and restrained appellant, he told police "execute me, shoot me, beat me, whatever you want to do." (N.T. 2/25/82, p. 17-18; 2/26/82, p. 30).
Following his arrest, appellant was placed in the Detention Center and was referred for psychiatric treatment within hours of his arrival. He was later admitted to the psychiatric unit of prison where he remained up until the time of his trial. Appellant's bizarre behavior continued throughout his stay, and included an attempt at suicide in September of 1981.
During trial, appellant repeatedly behaved inappropriately and indicated a complete inability to allow his fate to be *645 justly adjudicated. For example, in the middle of defense counsel's questioning of appellant, he stated, not in response to anything asked by his counsel:
[The Defendant:] I have something to say now. I'm pleading guilty anyway. You know, I'm not really guilty of this. You know, incident. But I am because I really was, you know, at the time really tripping and whatnot like that. Really sick and whatnot.
But I'm pleading guilty anyway of all the charges I have been charged with. This killing that I have done will be repeated. My death is the only way to stop the same thing from happening again. I am unhappy with life and wish to die. So I'm not worried about anything that, you know, comes out of this or nothing like that. See, life imprisonment I'll run the jail for real. That's no bullshit. Only reason I am not running it is because I'm on a lot of medication and as far as dying, that's something I want to do anyway. So, nothing at all. (N.T. 3/3/82, p. 24)
Also during his direct testimony, appellant responded, when asked about the identity of Lester Johnson, one of the passengers on the bus:
[Mr. Tatum:] Do you know who Mr. Johnson is?
[The Defendant:] Yeah, I know. The liar that pulled the pistol on me. I would have crashed him, too if he had pulled a pistol on me. He didn't pull a pistol on me. He knows better than that. I'll kill that mother fucker. (N.T. 3/3/82, p. 10)
Appellant's bizarre behavior was not limited to his own testimony. On the third day of trial, he made several outbursts during the testimony of Detective Lawrence Roantree which precipitated a reprimand of appellant by the court before the jury. (N.T. 2/25/88, pp. 97-98). Throughout the testimony of defense witness Roosevelt Dosier, appellant's grandfather, appellant laughed for no apparent reason, which prompted defense counsel to invoke his client to "shut up." (N.T. 3/1/88, pp. 91-94, 98). Defendant conducted himself in a similar fashion during the testimony *646 of Carla Morgan (N.T. 3/1/88, pp. 108, 111) and Clayton Martin (N.T. 3/1/88, p. 136, 138).
Even more revealing were appellant's outbursts during the sixth day of trial. In rebuttal to appellant's insanity defense, the Commonwealth called several witnesses who had observed appellant's behavior in confinement while court was in recess. Immediately following the testimony of one of these witnesses, Sheriff Ernest Hopkins, appellant shouted:
The Defendant: What the fuck you talking about. I ain't cool with that guy over there. I don't want to hear that kind of shit.
Lying son of a bitch. Talking that dummy he don't speak to me, nothing. Talking bullshit.
(N.T. 3/4/82, p. 44)
During the testimony of Sergeant William Shaw, the following exchange between appellant and the trial judge occurred:
The Defendant: How in the fuck this mother fucker knows what's going on with me and my father? He ain't worth shit. Me and my father ain't cool either.
The Court: You will have to remain quiet while the witness is testifying.
The Defendant: He's talking shit. That's what he's doing.
The Court: Keep quiet, Mr. Logan.
Mr. King: Your honor, may I have a moment? The thought trend was broken.
The Defendant: Listening into my conversation and all that shit. How would you feel if he was watching while you were talking to your family?
The Court: You have to remain quiet, Mr. Logan.
(N.T. 3/4/82, p. 51)
Once Sergeant Shaw had been excused, the following transpired:
*647 The Defendant: Fucker, listening to what I'm saying to my family. That's why I'll kill you, you mother fucking ass; get smart. Mother fucker.
The Court: Sheriff, come forward.
The Defendant: Smart ass mother fucker. What's he listening to what I'm saying to my father, when I'm on trial? How's that sound?
The Court: We'll recess for 5 minutes.
Mr. King: Thank you, Judge.
The Defendant: How does that sound?
(Jury leaving.)
The Defendant: I want to die anyway. That don't got nothing to do with it. I don't like that shit. Mother fucker. Me and my father ain't even cool. I don't give a fuck.
I want to die. I'll take you out, too. I'll hurt you, too.
The Court: Everybody else is free to leave the room also.
I'm going to leave the room.
(Witness excused and jury left.)
(N.T. 3/4/82, p. 53-54)
The jury convicted appellant of all charges following a little over two hours of deliberation, obviously based to a large extent upon appellant's complete inability to conform his conduct to that appropriate in a trial setting. But that did not end appellant's misbehavior. Subsequent to the court crier announcing the verdict and the jury being polled, appellant exclaimed, "I will kill that mother fuckers, too." (N.T. 3/6/82, p. 4). Similarly, when permitted to address the jury upon allocution, appellant stated:
The Defendant: I'll give you one chance to kill me. You better take it now because if I ever get out I'll kill everyone of you mother fuckers. That's my statement. Punk mother fuckers.
(N.T. 3/6/82, p. 18).
It is thus clear that appellant was not able to act in such a manner as to aid his cause. His bizarre behavior throughout trial did not indicate a man who sought to further his *648 own best interests. Instead, it evinced a man who viewed the trial as a means of hastening his demise. To cooperate with counsel would have hindered the attainment of that end. Were defendant able to choose that end of his own unaffected volition, I would have no qualms with the majority's resolution of this appeal. See Commonwealth v. Appel, 517 Pa. 529, 539 A.2d 780 (1988) (holding that a defendant could seek the death penalty where his choice was voluntary). But this certainly was not such a case. To permit the judicial system to now serve as a tool for allowing this defendant to attain his demented goal of self-annihilation is violative of the moral and legal dictates of our society which abhors suicide in any manner, even in cases of terminally ill persons whose death is viewed as merciful. Because appellant could not rationally choose to aid in his defense, I would find that appellant was not competent to stand trial in 1982 in this matter. Moreover, I would find that he had been completely deprived of his right to a fair trial because of his profound mental illness.
It has been argued in contradiction to this position that a competency standard which would take into consideration the inability of a defendant to fathom his own best interest would be unmanageable. I must disagree. The inability of a defendant to act in such a way as to further his best interest, like the two recognized areas of incompetency, can only be found where a qualified mental health expert has testified in an unequivocal manner to the existence of this defect. For this reason, it will be no easier for a defendant to delay the criminal proceedings against him because of this mental defect than because of his inability to understand the nature of the proceedings or to assist counsel. This standard will simply add an additional inquiry to those presently demanded of a trial court in determining competency. I do not believe this to be an excessive burden in light of the grave constitutional ramifications of trying a mentally incompetent defendant.
Moreover, I do not believe that this standard is so general that any disagreement between counsel and client as to how *649 to proceed at trial would necessitate a finding of incompetence. It can be said without argument that it is in the best interest of every man to live, and not to engage in conduct certain to bring about his own death. Although this proposition is general, I do not believe that that makes it impossible for a trial court to determine, during the course of the trial, that certain behavior on the part of the defendant would have no other effect than to assure him a sentence of death. Such was the case in the instant appeal. One cannot legitimately argue that appellant's repeated outbursts, strewn with profanity and threats of violence to witnesses and jurors, would bring about any other sentence but death. The fact that the jury deliberated only 28 minutes on whether to enter a sentence which would deprive a man of his very life is clear testament to this.
Additionally, it is contended that if we permit appellant's self-destructive allocution to serve as a basis for a finding of incompetence, we will be creating a device whereby any criminal defendant, faced with a certain verdict of guilty, can terminate the proceedings simply by threatening the jury and thus feigning incompetence. However, the credibility of a witness has always been in the province of the factfinder, see, e.g., Commonwealth v. Seese, 512 Pa. 439, 443, 517 A.2d 920, 922 (1986), and we should not presume this defendant's conduct contrived because some others' might be. Moreover, where the record is devoid of any indication of incompetency up to that point, including expert testimony from mental health professionals, the trial court could be certain that this sudden destructive behavior was a product of fabrication, and could rule accordingly. That is not the instant case. Appellant's threat to the jury was not an isolated incident, but was proceeded by a history of mental illness, numerous outbursts and instances of inappropriate behavior both during trial and at the time of arrest, a crime which manifested a very diseased mind, and the unequivocal testimony of a psychiatrist who had observed appellant on several occasions and predicted that this disruptive behavior would in fact occur.
*650 Accordingly, I would reject the trial court's finding of competency as contrary to law, hold that appellant was denied a fair trial, vacate the conviction, and remand the case for a new trial once appellant has been properly adjudged competent to proceed to trial. See, Pate v. Robinson, 383 U.S. 375, 86 S. Ct. 836, 15 L. Ed. 2d 815 (1966).
ZAPPALA, J., joins in this opinion.
NOTES
[1] Appellant's exact words contain several expletives which are omitted herein.
[2] Bracey addressed the distinguishable issue of whether an admission may be involuntary if it flows from an internal compulsion to confess which is rooted in a mental disease. Even in that case, this Court held, there were no constitutional protections against the admissibility of such statements. Indeed, the suppression judge in Bracey ruled that the Appellee knew what she was doing in confessing despite evidence of her history of hallucinations. See, Tucker, supra, and Commonwealth v. Neely, 298 Pa. Super. 328, 444 A.2d 1199 (1982), which ruled in line with Tucker that a "defendant may be suffering from a mental illness and still be capable of waiving his constitutional rights." The fact that such illness distorts perceptions of reality does not establish per se that the waiver was defective. Neely, 298 Pa.Superior Ct. at 344, 444 A.2d at 1207.
Appellant herein also rests his allegation on Commonwealth v. Cephus, 361 Pa. Super. 160, 522 A.2d 63 (1987), cert. denied, ____ U.S. ____, 108 S. Ct. 495, 98 L. Ed. 2d 494 (1987) which held that a defendant who was known to the police to be mentally ill did not knowingly and intelligently waive his constitutional rights, and suppression of a confession was correct. Cephus presently is being reviewed by the Supreme Court of the United States at Docket No. 87-648. See, 56 UNITED STATES LAW WEEK (December 8, 1987). In the case under consideration here, of course, the police had no knowledge of the Appellant's prior history of mental illness.
[3] We recognize that it is difficult, indeed, to generalize about this type of circumstance in relation to Miranda for the obvious reason that the immediate facts themselves often will determine the time when the warnings must be given. In the "public safety" exception to Miranda in New York v. Quarles, 467 U.S. 649, 104 S. Ct. 2626, 81 L. Ed. 2d 550 (1984), it was decided that the warnings need not precede some interrogation where the police must search for a weapon to head off potential danger. Here, of course, the facts indicate that the police did remove a hammer and mallet from the Appellant's person. More importantly, we point to the fact that no interrogation took place on the bus.
[4] The treating psychiatrist was Dr. Richard Swartzman, who was the in-patient medical director of the Psychiatric Unit of the Philadelphia Prison System. Dr. Swartzman testified that he had seen the patient on numerous occasions. At the trial court's request, Dr. Swartzman examined the Appellant shortly before the trial date and reported that he was cooperative and responsive.
[5] Prior to 1976, proof required only a preponderance of the evidence. Commonwealth v. Kennedy, 451 Pa. 483, 487, 305 A.2d 890, 892 (1973).
[6] The quotation came from Commonwealth v. Martinez, 498 Pa. 387, 391, 446 A.2d 899, 901 (1982).
[7] I have something to say now. I'm pleading guilty anyway. You know, I'm not really guilty of this, you know, incident. But I am... because I really was, you know, at the time really tripping and whatnot like that. Really sick and whatnot.
But I'm pleading guilty anyway of all the charges I have been charged with. This killing that I have done will be repeated. My death is the only way to stop the same thing from happening again. I am unhappy with life and wish to die. So I'm not worried about anything that, you know, comes out of this or nothing like that. See, life imprisonment I'll run the jail for real. That's no bullshit. Only reason I am not running it is because I'm on a lot of medication and as far as dying, that's something I want to do anyway. So, nothing at all. (N.T., 3/3/82, p. 24.)
[8] See, Commonwealth v. Petrino, 332 Pa.Superior Ct. 13, 480 A.2d 1160 (1984), cert. denied, 471 U.S. 1069, 105 S. Ct. 2149, 85 L. Ed. 2d 505 (1984). We denied allocatur on January 17, 1985, at Nos. 123 and 125 M.D. Allocatur Docket 1984.
[9] The Appellant also argues that because several lay witnesses testified to his history of mental illness, the Commonwealth cannot defend successfully its conclusion that proof of sanity was beyond a reasonable doubt. Of course, such testimony is irrelevant to the M'Naghten Rule.
[10] Expletives have been deleted.
[11] In Commonwealth v. Albrecht, 510 Pa. 603, 511 A.2d 764 (1986), we determined that a failure to incorporate the trial record into the penalty proceedings did not amount to ineffective assistance of counsel on the grounds the jury understood its duties.
[12] The Prothonotary of the Eastern District is directed to transmit the full and complete record of the trial, sentencing hearing, imposition of sentence, and review by this Court to the Governor. 42 Pa.C.S. § 9711(i).
[1] A report by Dr. Gino Grasso, a court staff psychiatrist, was also presented to the court. Although Dr. Grasso stated, in his opinion, appellant was not competent to stand trial, he deferred final judgment on the issue to Dr. Swartzman.
[2] We have previously stated that actual facts, proven by positive evidence, are entitled to far more weight than opinion evidence, even that of experts. Commonwealth v. Woodhouse, 401 Pa. 242, 260, 164 A.2d 98, 108 (1960); Commonwealth v. Lance, 381 Pa. 293, 113 A.2d 290 (1955); Commonwealth v. Patskin, 375 Pa. 368, 100 A.2d 472 (1953). Thus, in judging the mental competency of the defendant, it was error for the trial court to place greater weight upon the pre-trial opinion of Dr. Swartzman than upon his own observation of defendant's conduct and statements during trial.
[3] The majority also notes that the testimony of the defendant "evinced a sufficient degree of rationality to enable him to recognize the existence of his own illness," as if his ability to recognize that he is sick makes the sickness any less real. This proposition is clearly absurd. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260487/ | 549 A.2d 1028 (1988)
RHODE ISLAND DEPARTMENT OF MENTAL HEALTH, RETARDATION AND HOSPITALS
v.
R.B.
No. 87-538-Appeal.
Supreme Court of Rhode Island.
November 23, 1988.
Judith S. Calcagni, Cranston, for plaintiff.
Peter N. Dennehy, Mental Health Advocate, Ruth A. Glassman, Legal Counsel, Mental Health Advocate Office, Cranston, for defendant.
OPINION
WEISBERGER, Justice.
This case comes before us on appeal by R.B. from an order of the District Court certifying him for outpatient treatment at the Kent County Community Mental Health Center. We affirm. The facts of the case insofar as pertinent to this appeal are as follows.
R.B. was brought before the District Court for civil certification pursuant to G.L. 1956 (1984 Reenactment) § 40.1-5-8. *1029 The petition was brought by the Department of Mental Health, Retardation and Hospitals (MHRH). R.B. at the time of the hearing was a twenty-seven-year-old man who had, according to the evidence, committed a violent unprovoked attack upon his father, an attack upon a ward nurse and several attacks upon his wife. Medical testimony indicated that he was suffering from a psychosis defined as paranoid schizophrenia exacerbated by alcohol abuse. Medical testimony also indicated that R.B. had suicidal tendencies which required intensive observation.
At the time of the final hearing on November 30, 1987, the psychiatrist who had attended R.B. at the Institute of Mental Health testified that R.B.'s condition was still such that his continued unsupervised presence in the community would give rise to a likelihood of serious harm to himself and others by reason of mental disability. He testified, however, that at this stage R.B. could be treated at a local community health center as an alternative to inpatient care. The trial justice found by clear and convincing evidence[1] that R.B. was
"suffering from a mental illness and that he [was] in need of care and treatment in some type of facility and would benefit therefrom * * * and that [his] continued unsupervised presence in the community without this type of treatment * * * would [give rise to] a likelihood of serious harm by reason of this mental disability * * * to either himself or to others."
The judge then determined that R.B. was "certifiable with the alternative of having him be certified to a mental health clinic." The trial justice ordered that he be certified to the Kent County Community Mental Health Center for necessary outpatient treatment and supervision.
R.B. appealed this decision on the ground that the District Court was not authorized by statute to certify a person pursuant to § 40.1-5-8 to any facility save an inpatient facility. With this contention, we respectfully disagree.
In order to determine the authority vested in the District Court by the Rhode Island Mental Health Law, G.L. 1956 (1984 Reenactment) chapter 5 of title 40.1, it is necessary to examine the statute in its various parts.
Section 40.1-5-2 sets forth the definitions to be utilized throughout the chapter. Section 40.1-5-2(3) defines the term "facility" as follows:
"(3) `Facility' means a state hospital or psychiatric inpatient facility in the department, a psychiatric inpatient facility maintained by a political subdivision of the state for the care and/or treatment of the mentally disabled, a general or specialized hospital maintaining staff and facilities for such purpose, any of the several community mental health services established pursuant to chapter 8.5 of this title, and any other facility within the state of Rhode Island providing inpatient psychiatric care and/or treatment and approved by the director upon application of said facility. Included within this definition shall be all hospitals, institutions, facilities and services under the control and direction of the director and the department, as provided in this chapter. Nothing contained herein shall be construed to amend or repeal any of the provisions of chapter 16 of title 23, and of chapter 13 of title 40." (Emphasis added.)
Section 40.1-5-2(15) defines "alternatives to admission or certification" in the following terms:
"(15) `Alternatives to admission or certification' means alternatives to a particular facility or treatment program and shall include but not be limited to voluntary or court-ordered outpatient treatment, day treatment in a hospital, night treatment in a hospital, placement in the custody of a friend or relative, *1030 placement in a nursing home, referral to a community mental health clinic and home health aide services, or any other services that may be deemed appropriate." (Emphasis added.)
Section 40.1-5-8(10) empowers the District Court to issue an order in the following circumstances and with the following limitations:
"(10) Order. If the court at a final hearing finds by clear and convincing evidence that the subject of the hearing is in need of care and treatment in a facility, and is one whose continued unsupervised presence in the community would by reason of mental disability create a likelihood of serious harm, and that all alternatives to certification have been investigated and deemed unsuitable, it shall issue an order committing the person to the custody of the director for care and treatment or to an appropriate facility. In either event and to the extent practicable, the person shall be cared for in a facility which imposes the least restraint upon the liberty of such person consistent with affording him the care and treatment necessary and appropriate to his condition. No certification shall be made under this section unless and until full consideration has been given by the certifying court to the alternatives to in-patient [sic] care, including, but not limited to, a determination of the person's relationship to the community and to his family, of his employment possibilities, and of all available community resources, alternate available living arrangements, foster care, community residential facilities, nursing homes, and other convalescent facilities. A certificate ordered pursuant to this section shall be valid for a period of six (6) months from the date of the order. At the end of that period the patient shall be discharged, unless he is discharged prior to that time, in which case the certification shall expire on the date of such discharge." (Emphasis added.)
It should be noted that the court is required to provide for care "in a facility which imposes the least restraint upon the liberty of such person consistent with affording him the care and treatment necessary and appropriate to his condition." Section 40.1-5-8(10) further states that the court must give "full consideration * * * to the alternatives to in-patient [sic] care, including * * * all available community resources."
This court has long applied a canon of statutory interpretation which gives effect to all of a statute's provisions, with no sentence, clause or word construed as unmeaning or surplusage. State v. Caprio, 477 A.2d 67, 70 (R.I. 1984); In re Rhode Island Commission for Human Rights, 472 A.2d 1211, 1212 (R.I. 1984); Murphy v. Murphy, 471 A.2d 619, 622 (R.I. 1984); Spikes v. State, 458 A.2d 672, 674 (R.I. 1983); Probate Court of East Providence v. McCormick, 56 R.I. 308, 320, 185 A. 592, 597 (1936), rearg. denied, 57 R.I. 157, 189 A. 2 (1937). "Where one provision is part of the overall statutory scheme, the legislative intent must be gathered from the entire statute and not from an isolated provision." State v. Caprio, 477 A.2d at 70; accord In re Rhode Island Commission for Human Rights, 472 A.2d at 1212.
Applying this fundamental canon of statutory construction, we cannot assume as the mental health advocate would have us do that any part of this statutory scheme is meaningless or surplusage. Consequently, the requirement that the trial justice must consider the alternatives to inpatient treatment would necessitate our looking to the definition of facility in § 40.1-5-2(3) which would include "any of the several community mental health services."
We must further look to § 40.1-5-2(15) which defines "alternatives to admission" as including "voluntary or court-ordered outpatient treatment." The mental health advocate argues that the term "court-ordered outpatient treatment" does not apply to treatment ordered by the District Court but by some other court such as the Family or Superior Court. This argument is not persuasive. The Mental Health Act places the sole jurisdiction of *1031 civil court certification (in respect to adults) in the District Court. Section 40.1-5-8(1) authorizes the filing of a verified petition in the District Court "for the certification to a facility of any person who is alleged to be in need of care and treatment in a facility, and whose continued unsupervised presence in the community would create a likelihood of serious harm by reason of mental disability."
It would be a strained interpretation indeed, to suggest that the Legislature did not intend to repose in the District Court the authority to consider alternatives to inpatient treatment and to order outpatient treatment as mentioned in § 40.1-5-2(15), if the District Court should find such outpatient treatment to be a suitable alternative. To suggest that the Legislature intended that the ordering of outpatient treatment be left to the mere fortuitous possibility that some other court in some undefined proceeding would have the authority to order such treatment, but that no such authority was to be granted to the court to whom the Legislature entrusted the implementation of the Mental Health Act, is to ascribe to that body an intent to reach an absurd or unreasonable result. We have consistently declined so to interpret enactments of our Legislature. In re Doe, 440 A.2d 712, 716 (R.I. 1982); Coletta v. State, 106 R.I. 764, 769, 263 A.2d 681, 684 (1970); Wilkinson v. Harrington, 104 R.I. 224, 239, 243 A.2d 745, 753 (1968).
Consequently we are of the opinion that the District Court by clear implication has been given both the authority and the mandate to consider as an alternative to inpatient certification the suitability of court-ordered outpatient treatment at an authorized community mental health clinic. The mental health advocate and amici curiae have raised certain questions which we feel should be answered for the guidance of the District Court in future determinations.
A brief filed on behalf of the Rhode Island Council of Community Mental Health Centers suggests that such centers should not be required to accept patients without an opportunity to be heard by the court concerning its ability to provide suitable treatment and medications. We are assured that in the case at bar the Kent County Community Mental Health Center was consulted and indicated its willingness to accept R.B. prior to the issuance of the court order. We are of the opinion that such acceptance by the community mental health center should be a necessary condition precedent to the ordering of outpatient treatment at such a facility. No community mental health center should be ordered to accept a patient suffering from mental disability unless its officials are willing to do so.
The mental health advocate and amici curiae raise the question of the method of enforcement of such court-ordered outpatient treatment. The answer to this question is relatively simple. In the event that the patient does not comply with the order to accept outpatient treatment, the court which had already certified the patient as requiring treatment in an appropriate facility would then be constrained, if the patient's unsupervised presence in the community would still give rise to a likelihood of harm to himself or others, to change its certification to inpatient treatment. The outpatient facility which had accepted the patient would have the obligation of reporting to MHRH the fact that the patient was not complying with the regimen of treatment established by the mental health center. MHRH would then petition the District Court to reconsider its certification. The District Court would have adequate authority pursuant to § 40.1-5-8(10) to order that the patient be committed to the custody of the director of MHRH for care and treatment or to an appropriate inpatient facility.
The mental health advocate and the Rhode Island Protection and Advocacy System, Inc., amicus curiae also question the length of such court-ordered outpatient treatment. The answer to this question is found in the specific terms of § 40.1-5-8(10). This subsection provides that a certification "shall be valid for a period of six (6) months from the date of the order." This provision would be controlling in respect to outpatient as well as inpatient court-ordered treatment. Should *1032 the official in charge of the community mental health facility be of the opinion that the patient is not sufficiently recovered to be discharged from treatment, he or she may, in cooperation with the director of MHRH, file a petition for recertification within the time limited by § 40.1-5-11(3). Pursuant to such a petition a recertification hearing would follow all the procedures set forth in § 40.1-5-8.
We deem the legislative structure created by the Mental Health Act to include, among other alternatives, court-ordered outpatient treatment as one of the legal responses available to the District Court. As indicated by the foregoing discussion, the statute as a whole provides for a symmetrical application of this type of treatment subject to all the safeguards provided by the act which guarantee due regard for the liberty interests of the patient.
For the reasons stated, R.B.'s appeal is hereby denied and dismissed. The judgment of the District Court ordering outpatient treatment is hereby affirmed. The papers in the case may be remanded to the District Court.
NOTES
[1] G.L. 1956 (1984 Reenactment) § 40.1-5-8(10) now requires proof by clear and convincing evidence in order to authorize civil certification. This change was made by P.L. 1982, ch. 242. Previously the burden of proof required by statute was beyond a reasonable doubt. See In re Doe, 440 A.2d 712 (R.I. 1982). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260492/ | 123 Cal. Rptr. 2d 632 (2002)
101 Cal. App. 4th 135
BAY WORLD TRADING, LTD., Plaintiff and Respondent,
v.
NEBRASKA BEEF, INC., Defendant and Appellant.
No. A095036.
Court of Appeal, First District, Division Three.
August 13, 2002.
*633 Craig S. Miller, Glendale, Weisberg & Miller, Kenneth J. Sperandio, Jr., San Francisco, (of counsel), for Appellant Nebraska Beef, Inc.
Charles M. Kagay, Bartholomew Lee, San Francisco; Spiegel Liao & Kagay, for Respondent Bay World Trading, Ltd.
Certified for Partial Publication[*]
PARRILLI, J.
Nebraska Beef, Inc. (Nebraska Beef) appeals from a judgment entered against it following the bench trial of a breach of contract action. Nebraska Beef claims: (1) the trial court abused its discretion in denying Nebraska Beefs request to reopen discovery or for a continuance of the trial; (2) insufficient evidence supports the findings on causation and damages; and (3) the court exceeded its authority when it amended the statement of decision to award prejudgment interest. We reject each of these arguments and affirm the judgment. In the published portion of the opinion, we hold that when the trial court seeks a waiver of the statutory requirements set forth in Code of Civil Procedure section 632 for preparing a statement of decision, the court must clearly explain the alternative procedure it proposes. If the alternative procedure will deprive the parties of their statutory rights to file objections, the record must disclose their express consent to surrender such rights.
BACKGROUND
Nebraska Beef operates a slaughterhouse in Omaha, Nebraska, from which it produces meat products for human consumption. On July 2, 1996, Bay World Trading, Ltd. (Bay World), a distributor of meat products, entered into a contract with Nebraska Beef. Bay World agreed to purchase 12 "full container loads" of frozen *634 beef tripe (weighing 45,000 pounds each) at a cost of 20 cents per pound, with shipment to begin in September. The purchase order noted this price reflected a discount of 5 cents per pound from a previous agreement. Later that month, Bay World arranged to sell four of these containers to Pekpol, a company located in Poland. When the shipment reached Poland in October or November of 1996, Polish inspectors rejected it due to spoilage of the meat. Bay World discarded three of the tripe containers in Poland and attempted to sell the remaining container to a customer in China, but the Chinese customer also rejected the meat due to spoilage.
Having satisfied itself that the spoilage did not occur due to temperature control problems in the railroad or shipping transport of the tripe, Bay World confronted Nebraska Beef about the problem and eventually sued Nebraska Beef for breach of contract, misrepresentation, breach of warranties and negligent performance of contract. After a bench trial, the court found Nebraska Beefs improper processing was responsible for the spoilage of the tripe and awarded Bay World damages totaling close to $125,000. The court later amended its statement of decision, upon motions from Bay World, to include an award of prejudgment interest.
DISCUSSION
I.-II.[**]
III. Trial Court Had the Power to Correct the Statement of Decision
Finally, Nebraska Beef contends the trial court erred in amending its statement of decision to include prejudgment interest. Based on two procedural arguments,[3] Nebraska Beef claims the original statement of decision was "final" and the court had no power to change it before entry of judgment.
Near the end of the two-day trial, the court suggested a streamlined procedure for preparing the statement of decision. The court stated: "[W]hat I'm going to suggest is that each side prepare a proposed statement of decision. We will set a date when that would be due, and then the opposing party would have whatever number of days, say up to tenshorter if you think you can do itwhereby you could send me an objection to the other side's statement. And then we would forget the regular rules and statute, or you would waive the rules ... and the statute on statements of decision. [¶] I would have both of your positions, your recognized opposition to the other side, and then I would be filing my statement of decision along with the proposed judgment to give you three days to just look it over as to form. And then the judgment would be filed. And this will condense the time.... [¶] And then once I get each of your oppositions, then I of course have 90 days." The parties agreed to the court's suggestion and accordingly submitted proposed findings and responsive briefs. Thereafter, apparently with no prior notice to the parties, the court filed a statement of decision, in which it awarded Bay World close to $125,000 in damages but declined to award punitive damages or prejudgment interest.
*635 What the court intended by its proposed alternative procedure under Code of Civil Procedure section 632 then became the subject of dispute. Fourteen days (10 court days) after the court filed its statement of decision, Bay World filed a motion requesting that prejudgment interest be included. Nebraska Beef objected to this motion as an improper attempt to amend the court's final decision. Ultimately, after several briefs and hearings on the issue, the trial court issued an amendment to the statement of decision, awarding Bay World prejudgment simple interest totaling close to $41,000. Three days later, the court entered a judgment in accordance with the statement of decision as amended.
Nebraska Beef first argues the court had no authority to amend its statement of decision because it was bound by the alternative procedure to which the parties stipulated. Code of Civil Procedure section 632 requires the court to issue a statement of decision "explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial" when a party requests such a written statement within 10 days after the court has announced a tentative decision. After a party submits such a request, specifying the controverted issues upon which written findings are requested, all parties have a right to submit proposals regarding the content of the statement of decision. (Code Civ. Proc., § 632.) In general, such proposals must be submitted to the court within 10 days after a statement of decision is requested, and the court (or a party designated by the court) then has 15 days to prepare a proposed statement of decision and proposed judgment. (Cal. Rules of Court, rule 232(a)-(c).) Within 15 days after service of the proposed statement of decision and proposed judgment, the parties may file objections. (Cal. Rules of Court, rule 232(d).)
According to Nebraska Beef, the trial court's request for proposed statements of decision after the trial essentially skipped over the statutory requirements that (1) the court announce a tentative decision, and (2) a party formally request a statement of decision. Then, because the court filed its statement of decision and proposed judgment after the parties presented objections to each other's proposed statements and did not specify that the parties would have an opportunity to object to the court's own statement, Nebraska Beef contends the court's statement of decision was final, pursuant to the Code of Civil Procedure, and not subject to further amendment. Moreover, Nebraska Beef asserts, the parties stipulated to an alternative statement of decision procedure that did not permit either party to file objections to the court's statement of decision.
If the trial court intended to abrogate the parties' statutory rights to object to the court's statement of decision, the court should have made this absolutely clear when it sought the parties' approval of its proposed alternative procedure. The ability to submit a proposed statement of decision in advance is no substitute for an opportunity to object to the court's own statement of decision: "Code of Civil Procedure section 634 and California Rules of Court, rule 232, taken together, clearly contemplate any defects in the trial court's statement of decision must be brought to the court's attention through specific objections to the statement itself, not through a proposed alternative statement of decision served prior to the court's issuance of its own statement. By filing specific objections to the court's statement of decision a party pinpoints alleged deficiencies in the statement and allows the court to focus on facts or issues the party contends were not resolved or whose resolution is ambiguous. A proposed alternative *636 statement of decision ... does not serve these functions and does not satisfy the requirements of Code of Civil Procedure section 634 and California Rules of Court, rule 232." (Golden Eagle Ins. Co. v. Foremost Ins. Co. (1993) 20 Cal. App. 4th 1372, 1380, 25 Cal. Rptr. 2d 242.)
The trial court here did not clearly state that the parties would be precluded from submitting objections to the court's statement of decision.[4] To the contrary, the court stated the parties would have three days to "look over" the statement of decision and proposed judgment "as to form"; thus, Bay World may have reasonably concluded the alternative procedure to which it had agreed did not preclude it from objecting to the absence of prejudgment interest in the court's decision. The parties' stipulation did not expressly preclude such an objection, and the trial court did not err in considering it.[5] Moreover, Nebraska Beef suffered no prejudice because it had a full opportunity to address the merits of Bay World's claim to prejudgment interest and did so in numerous briefs.
Nor did the court err when it ultimately decided to amend its statement of decision. Relying on Code of Civil Procedure section 664, Nebraska Beef insists the clerk of the court was statutorily required to enter judgment immediately upon the court's filing of its statement of decision. This argument, of course, begs the question of whether the statement of decision issued by the trial court must be construed as final. A statement of decision issued by the court cannot automatically constitute a final decision for purposes of entry of judgment, as Nebraska Beef suggests, because Code of Civil Procedure section 632 and California Rules of Court, rule 232 contemplate that a court may amend its statement of decision after it receives objections from affected parties. Because judgment had not yet been entered, the trial court had inherent power to amend its statement of decision to award prejudgment interest. Even after a court has issued a written decision, the court retains the power to change its findings of fact or conclusions of law until judgment is entered. (Phillips v. Phillips (1953) 41 Cal. 2d 869, 874-875, 264 P.2d 926.) "Until a judgment is entered, it is not effectual for any purpose (Code Civ. Proc., § 664), and at any time before it is entered, the court may change its conclusions of law and enter a judgment different from that first announced. [Citations.] Moreover, a judge who has heard the evidence may at any time before entry of judgment amend or change his findings of fact. [Citations.]" (Id. at p. 874, 264 P.2d 926.)
DISPOSITION
The judgment is affirmed. Appellant shall bear costs of the appeal.
We concur: CORRIGAN, Acting P.J., and POLLAK, J.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of part I and part II.
[**] See footnote *, ante.
[3] Nebraska Beef raised no substantive argument on this issue in its opening brief on appeal, though it did dispute Bay World's right to prejudgment interest in the reply brief. We decline to consider this belated argument. (See Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal. App. 4th 847, 894, 93 Cal. Rptr. 2d 364, fn. 10 ["`"[P]oints raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before...."` [Citations.]"].)
[4] Though Nebraska Beef repeatedly calls the court's filing a "final statement of decision," the document was simply captioned a "Statement of Decision."
[5] Whittington v. McKinney (1991) 234 Cal. App. 3d 123, 129-130, 285 Cal. Rptr. 586 does not support Nebraska Beef's position because the appellant in Whittington agreed to waive the right to a written statement of decision. As discussed, given the trial court's ambiguous description of the proposed alternative procedure, Bay World did not clearly waive its right to file objections. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260523/ | 549 A.2d 1107 (1988)
Ferris N. BROWNER, Appellant,
v.
DISTRICT OF COLUMBIA, Appellee.
Rita A. WALKER, A/K/A Rita Browner, Appellant,
v.
DISTRICT OF COLUMBIA, Appellee.
Nos. 86-220, 86-221.
District of Columbia Court of Appeals.
Argued July 12, 1988.
Decided November 8, 1988.
*1108 W. Edward Thompson, with whom J. Lincoln. Woodard was on the brief, for appellants.
Edward E. Schwab, Asst. Corp. Counsel, with whom Frederick D. Cooke, Jr., Corp. Counsel, Charles L. Reischel, Deputy Corp. Counsel, and Lutz Alexander Prager, Asst. Deputy Corp. Counsel, Washington, D.C., were on the brief, for appellee.
Before MACK and SCHWELB, Associate Judges, and PRYOR, Senior Judge.[*]
SCHWELB, Associate Judge:
Where the real truth is a loan of money, the wit of man cannot find a shift to take it out of the statute.
Lord Mansfield in Floyer v. Edwards, 1 Cowp. 112, 114-115, 98 Eng.Rep. 995, 996 (1774).
I
Perhaps because so many of us have to live on credit and envy those who have the cash, it is fair to say that, rightly or wrongly, money lenders in general and usurers in particular have not been dealt with kindly in Holy Scripture, in literature, or in judicial rhetoric. The Bible warns us that "the borrower is servant to the lender,"[1] and instructs that
if you lend money to any of my people with you who is poor ... you shall not exact interest from him.[[2]]
Shakespeare's character Polonius, speaking to his son Laertes about the ways of the world, provides unambiguous counsel on this subject:
Neither a borrower nor a lender be.[[3]]
The Bard also introduces us to Shylock, perhaps the most famous (or infamous) money lender in all of fiction, who seeks to *1109 exact a pound of his anti-Semitic enemy's flesh as liquidated damages for failure to repay a loan.[4]
Not to be outdone, one court has described the practices which usury and loan sharking laws were designed to punish as "an actual, manifest, fearsomely violent evil," People v. Ayers, 109 Misc.2d 870, 875, 440 N.Y.S.2d 1019, 1023 (1981), and a second has commented that loan sharking is "one of the most heinous, virtually blood-sucking, criminal activities of all times." People v. Fernandez, 93 Misc.2d 127, 129, 402 N.Y.S.2d 940, 943 (1978).[5] Those who lend money at high interest rates sometimes become rich, but human nature being what it is, they seldom win the plaudits of the crowd or the goodwill of their less affluent fellow citizens.
In the present case, the principal question is whether the appellants Rita A. Walker and Ferris Browner, who are wife and husband, and who denied being in the business of money lending at all, were actually engaged in the criminal enterprise of making loans in a disguised form at legally impermissible rates and without a license. The trial judge, Honorable Fred L. McIntyre, sitting without a jury, found the evidence sufficient to establish beyond a reasonable doubt that the transactions in the record, although otherwise denominated by the defendants, were in reality loans of the prohibited character. We agree and affirm both appellants' convictions.
II
Ms. Walker and Mr. Browner were convicted of three counts each[6] of violating the Loan Sharking Act, D.C.Code § 26-701 (1981), which provides in pertinent part that
it shall be unlawful and illegal[[7]] to engage in the District of Columbia in the business of loaning money upon which a rate of interest greater than 6 per centum per annum is charged on any security of any kind, direct or collateral, tangible or intangible, without procuring a license.[[8]]
The controversy in this case arose out of a number of transactions in 1981 and 1982 between the appellants and several homeowners who were in financial difficulty and were facing imminent foreclosure on their homes. The Corporation Counsel charged that these transactions were loans at an interest rate that exceeded 6 per cent. The appellants claimed that, rather than making loans, they were purchasing homes, leasing them back, and providing the former homeowners with an option to repurchase.
The Corporation Counsel offered evidence which established that the appellants were the principals in a Virginia corporation named RAW & Associates, Inc.[9] They held themselves out as money lenders. They placed classified advertisements in the Washington Post in the newspaper's "MONEY TO LEND" columns. The advertisements read:
*1110 NEED MONEY?Foreclosure help RAW 726-9303/387-4546.
They also distributed a circular entitled "YOUR FINANCIAL RESOURCE: RAW ASSOCIATES" which told prospective clients, among other things, that "Where banks stop, we start," "SERVICES PROVIDED: Financing money to lend," and other phrases to the effect that loans were available. The phrase "where banks stop, we start" was also used in an unsolicited letter to persons whose homes were being advertised for foreclosure.[10]
The trial judge found that the various homeowners who testified for the government contacted the defendants in response to these advertisements, seeking loans to save their homes, which were threatened with foreclosure. Instead of receiving loans, however, they were presented with and signed papers ostensibly conveying their property to Ms. Walker with a lease back and an option to repurchase within a year.
Although the transactions were denominated sales, the homeowners testified that they never intended to sell their property. Moreover, there was evidence that the appellants described the transactions to their clients as loans, and sometimes assured those clients who raised questions about what they were signing that the characterization of a transaction as a sale in the documents was solely a technicality, effected for the purpose of accommodating an accountant. In any event, most of the homeowners were understandably upset about their financial difficulties and the prospect of losing their homes, and even those with some years of college were less than diligent in reading what they were signing or otherwise protecting their own interests.
While the "sales" saved the homes from immediate foreclosure, they left the homeowners in an extremely precarious position. The homeowners were required to pay a monthly "rent" which was generally at least twice their former mortgage payment. In addition, in order to redeem their property after one year, they had to repay the money RAW had expended to make current the mortgage arrearages and other debts, as well as all costs incurred by RAW in conveying the property to Ms. Walker. If the homeowners were unable to make all of these payments, they lost the homes which they had asked appellants to help them save, equity and all.
The specific transactions as to which the government adduced testimony were all of the general character detailed above, although there were differences between the various (but all markedly one-sided) "bargains" struck.[11] Judge McIntyre's description of the experience of one family that dealt with the defendants is illustrative of what occurred:
On or about November 15, 1982, Mrs. Julia Carroll visited the offices of RAW Associates to obtain a loan in order to assist her son whose house was subject to immediate foreclosure. The defendant Ferris Browner negotiated with Mrs. Carroll. Pursuant to the discussions, RAW made available funds in the amount of $4,591.18 to close out the pending foreclosure of the son's house. As part of the financing plan, Mrs. Carroll deeded her house over to the defendant Rita Walker under a one-year lease provision with an option to repurchase at the end of one year.
During the one-year leasing period, Mrs. Carroll was required to pay monthly rental payments of $375.00 to RAW (in lieu of the $118.00 per month mortgage *1111 payments); and upon exercising the repurchase option, Mrs. Carroll would be obligated to pay the $4,591.18 arrearage payment, included therein being the cost of title examination, fire insurance, and the appraisal of the property.
At the time Mrs. Carroll entered into the alleged sale of her property to Rita Walker it had a value of $38,185 and was entirely free of debt except for the balance of the first mortgage in the amount of $1,600.00.
Thus, Mrs. Carroll conveyed property worth $38,185.00 for $6,988.18 (which included the arrearages, a $1,600.00 payment on her mortgage, fire insurance and various other amounts). The paltry sum expended by the appellants on Mrs. Carroll's behalf was even lower than the ostensible contract sale price of $8,100.00.
After hearing this evidence, as well as a prosecution expert's testimony that the effective interest rates charged by RAW ranged from 50% to 200%, the trial court found each appellant guilty of three counts of violating § 26-701. The appellants received suspended jail sentences and were placed on probation and ordered to make restitution, pay fines, and perform community service. These appeals followed.
III
Before reaching the principal question in the casewhether the Loan Sharking Act reaches appellants' conductwe address two procedural issues. The first, which was properly preserved for presentation on this appeal, is whether the defendants were improperly denied a jury trial. The second, first expressly raised as an independent basis for reversal during oral argument, is whether Judge McIntyre should have recused himself.
A. Jury Trial.
The maximum penalty for a violation of the Loan Sharking Act is imprisonment for thirty days, or a $200.00 fine, or both. As previously noted, appellants were also charged with violating 16 DCMR § 201.1, but this regulation prohibits like conduct and carries the same maximum penalty. There is no constitutional or statutory right to a jury trial for such an offense.
The Sixth Amendment to our Constitution provides that in all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial by an impartial jury. Art. III, § 2, cl. 3 similarly states that "the trial of all crimes ... shall be by Jury." The right of trial by jury, however, does not extend to every criminal proceeding. Jackson v. United States, 498 A.2d 185, 187 (D.C.1985). So-called petty offenses were tried without juries both in England and in the Colonies, and have always been held to be exempt from the comprehensive language of the jury trial provisions of the Constitution. Jackson, supra, 498 A.2d at 188. The Supreme Court has held that a potential sentence of imprisonment for more than six months will take a criminal act out of the category of petty offense, and render it triable by jury. Muniz v. Hoffman, 422 U.S. 454, 476, 95 S.Ct. 2178, 2190, 45 L.Ed.2d 319 (1975) (criminal contempt); Baldwin v. New York, 399 U.S. 66, 69, 90 S.Ct. 1886, 1888, 26 L.Ed.2d 437 (1970).
There is also a statutory right to a jury trial in the District of Columbia for offenses carrying a fine of $300.00 or more or imprisonment for more than ninety days. D.C.Code § 16-705(b) (1981). This court has held that § 16-705(b) measures the limits of the right to a jury trial, and that offenses for which the maximum punishment is not above the statutory threshold are generally triable by the court. Alston v. United States, 509 A.2d 1129, 1130 n. 3 (D.C.1986) (shoplifting); Dobkin v. District of Columbia, 194 A.2d 657, 659 (D.C.1963) (baby brokering).
The maximum penalties under the Loan Sharking Act are well below the statutory threshold and the constitutional demarcation line as articulated in Muniz and Baldwin. Accordingly, unless there is some basis, other than the statutory maximum penalty, for demanding a jury, the defendants *1112 were properly tried by the court.[12]
Appellants contend that they were entitled to a jury trial under District of Columbia v. Colts, 282 U.S. 63, 51 S.Ct. 52, 75 L.Ed. 177 (1935). In that case, the Supreme Court held that a defendant charged with reckless operation of a motor vehicle had a constitutional right to trial by jury in spite of the fact that the maximum term of imprisonment for a first offense was only thirty days. In Colts, however, the Court recognized that "there may be many offenses called petty offenses which do not rise to the degree of crimes within the meaning of Article III, and in respect of which Congress may dispense with a jury trial." 282 U.S. at 72-73, 51 S.Ct. at 53. (Emphasis in original.) The Court continued:
Whether a given offense is to be classed as a crime, so as to require a jury trial, or as a petty offense, triable summarily without a jury, depends primarily upon the nature of the offense. The offense here charged is not merely malum prohibitum, but in its very nature is malum in se. It was an indictable offense at common law, United States v. John Hart, 1 Pet.C.C. 390, 392, when horses, instead of gasoline, constituted the motive power. The New Jersey court of Errors and Appeals, in State v. Rodgers, supra[[13]] has discussed the distinction between traffic offenses of a petty character, subject to summary proceedings without indictment and trial by jury, and those of a serious character, amounting to public nuisance indictable at common law; and its examination of the subject makes clear that the offense now under review is of the latter character.
282 U.S. at 73, 51 S.Ct. at 53 (emphasis in original).
Colts thus stands for the proposition that offenses which are malum in se, and which were indictable at common law, fall within the constitutional guarantee of trial by jury irrespective of the maximum punishment that can be imposed. In the present case, however, Ms. Walker and Mr. Browner were convicted of an offense which, however morally reprehensible it may be, is basically a licensing provision. Reagan v. District of Columbia, 41 App.D. C. 409 (1914). It is malum prohibitum rather than malum in se. People v. Fernandez, supra, 93 Misc.2d at 133, 402 N.Y. S.2d at 945. Unlike the defendant in Colts, appellants could not have been convicted of a similar crime at common law, for neither the licensing requirement nor the offense existed. The dispositive grounds upon which Colts was held to be entitled to a jury trial are therefore inapplicable to this prosecution.[14]
Accordingly, we conclude that the trial of the appellants by the court, sitting without *1113 a jury, did not deprive them of any constitutional or statutory right.
B. Recusal.
Appellants' contention that Judge McIntyre was prejudiced against them and should have disqualified himself is untimely and altogether lacking in merit.
In their brief on appeal, appellants contend that
asking the court below to grant appellants a jury trial was also asking the trial judge to recuse himself because Judge McIntyre had just sat as a trial judge in a two week jury trial of appellants in ... Criminal Nos. 659-84 and ... 660-84.
They argued that
there is no way the trial judge in this case could have been unprejudiced because he had heard all the facts in the previous trial with the same witnesses on basically the same issue. That is the more reason the trial below was not fair and the reason this court should grant appellants a jury trial.
At oral argument, counsel expressly asked that the convictions be reversed for alleged bias of the trial judge. Appellants never filed an affidavit of prejudice against Judge McIntyre in the trial court. Failure to file such an affidavit in timely fashion, accompanied by a certificate by counsel of record stating that it is made in good faith, defeats the charge of bias. See Super.Ct. Civ.R. 63-I, made applicable to criminal cases by Super.Ct.Crim.R. 57(a); United States v. Azhocar, 581 F.2d 735, 738 (9th Cir.1978), cert. denied, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979); Martin-Trigona v. Shiff, 600 F.Supp. 1184, 1187 (D.D.C.1984).[15] Indeed, the lack of a certificate of good faith signed by counsel is, standing alone, a sufficient reason to deny the motion. Burt v. First American Bank, 490 A.2d 182, 187 (D.C.1985). The issue is therefore reviewable in this court, if at all, only for "plain error." In re Thompson, 419 A.2d 993, 994 n. 1 (D.C. 1980). Counsel for appellants having acknowledged that he did not raise the issue before the trial judge at all, so that Judge McIntyre was never afforded the opportunity to consider the belated allegations of prejudice, review even on a plain error standard is unduly generous to appellants.
We go beyond appellants' procedural default only because the allegations against Judge McIntyre in this case are so completely devoid of merit that it would do him an injustice to dismiss them on technical grounds and leave the meritless but unanswered charges hanging. A trial judge's familiarity with a party and with the party's legal difficulties through prior judicial hearings does not warrant recusal. Gregory v. United States, 393 A.2d 132, 143 (D.C.1978). Although we agree with Judge Wilkey that
the disciplined judicial mind should not be subjected to any unnecessary strain; even the most austere intellect has a sub-conscious,
United States v. Walker, 154 U.S.App.D.C. 6, 8, 473 F.2d 136, 138 (1972), appellants have identified nothing in this record,[16] and we have found nothing, which raises the slightest doubt as to Judge McIntyre's impartiality. Accordingly, we find no bias whatever on Judge McIntyre's part and see no reason for recusal, sua sponte or otherwise. There was no error, and therefore no plain error.
IV
Turning to the substantive issue, appellants' principal contention is that they were not lending money and were therefore not subject to the proscriptions of the Loan Sharking Act. We agree with the government, however, that this is not a *1114 legal issue but a factual one,[17] and that Judge McIntyre's findings have ample support in the record. Moreover, the courts have consistently held that the question whether usury and loan sharking laws, civil or criminal, apply to a particular transaction depends on the substance of that transaction and not on its form. Accordingly, the Loan Sharking Act may not be avoided by attempting to disguise the character of the arrangement, or by denominating what is really a loan as something else. Finally, the authorities and contentions relied upon by appellants do not sustain their position.
A. Judge McIntyre's findings in this case are based squarely on the credibility of the witnesses and on the inferences drawn from their testimony by the judge as trier of fact. Under these circumstances, his findings cannot be disturbed unless they are shown to be without evidentiary support and plainly wrong. D.C.Code § 17-305(a) (1981); Nche v. United States, 526 A.2d 23, 24 (D.C.1987).
The principal contested issue, both in the trial court and on appeal, was whether the purported sales were really sham transactions that masked loans. There is overwhelming support in the record for the judge's resolution of that question in the affirmative. Each of the homeowners was drawn to the appellants by advertising which promised the availability of "money to lend" to stop imminent foreclosure. When the homeowners asked for the loans which they believed that the advertisements were describing, and then posed questions about the form of the transactions, the appellants couched their answers to these questions in language which confirmed to the complainants that they were receiving the very loans for which they had come. The appellants often simply calmed the inquiring homeowners' fears by pretending that it was usual practice, perhaps required by the accountant, to sign instruments transferring title to the homes. The trial court credited the homeowners' testimony and gave a comprehensive and persuasive explanation for having done so. An appellate court may not disregard the reasoned resolution of issues of credibility on the part of the trier of fact.
Moreover, if the transactions were in fact sales, as appellants contend, they were surely most extraordinary ones. When a homeowner sells his home, which is usually his most valuable possession, one would expect at least some measure of bargaining over the sales price. Here, there was none. In each instance, what the appellants characterize as the "sales" price bore no relation whatever to the value of the equity. It is absurd to suggest that Mrs. Carroll would knowingly sell her home, in which she had an equity of more than $36,500.00, for $8,100.00. None of the "sellers" had placed his or her home on the market or expressed the slightest interest in selling it. Each "seller" remained in possession after the purported sale, and appellants were indeed depicting their service as one that would enable their clients to "save" their homes from foreclosure. Although the transaction also lacked one of the common characteristics of a loanan evaluation of the borrower's creditno such investigation was needed because the home itself, which in each case was worth far more than the amount expended by the appellants, served as their security. It was therefore altogether reasonable for the trial judge to find that the depiction of each of these transactions as a sale and lease back was a transparent sham which masked an unlawful loan.
B. Although the term "loan sharking" may convey an image of armed toughs who leave the broken knee-caps of victimized borrowers in their wake, statutes like our Loan Sharking Act reach the "white collar" violator as well as his gangland counterpart. As Chief Judge Cooke stated in his thoughtful concurring opinion about *1115 usuary laws[18] in Hammelburger v. Foursome Inn Corp., supra, 54 N.Y.2d at 591-92, 446 N.Y.S.2d at 926, 431 N.E.2d at 287 (1981):
Two aspects of criminal usury are abhorrent to public policy. First, the excessive interest charged is considered repulsive to our values. It is nothing more than a thoroughly unscrupulous exploitation of another's vulnerability. Society will not condone one person's taking unfair advantage of another's weaker position (see, e.g., Barnard v. Gantz, 140 N.Y. 249, 35 N.E. 430 [undue influence]; Restatement, Contracts 2d § 177). Second, the exaction of criminally excessive interest is, in the public's mind, inextricably linked with violent methods of collecting delinquent debts.
* * * * * *
It should be noted that in criminalizing these usurious practices, the Legislature was not only concerned with the stereotypical loan shark accompanied by a strong-arm enforcer. The Legislature specifically recognized that the criminal usurer often "conduct[s] his business wholly within the law" (as it then existed), taking advantage of legal loopholes and relying on reputation rather than actual intimidation to collect loans (N.Y. Legis.Ann., 1965, p. 48). Thus, it can only be concluded that the Legislature intended to penalize those usurious lenders who operate "under high-sounding business names, with offices and other trappings of legitimacy" (id.).
"White collar" loan sharking is often characterized by the use of labels designed to mask the character of the transaction, but courts do not allow themselves to be hoodwinked by such disguises. See, e.g., Schneider v. Phelps, 41 N.Y.2d 238, 243, 391 N.Y.S.2d 568, 571, 359 N.E.2d 1361, 1364-65 (1977) (under statute which contained an exemption for loans to corporations, court may pierce the corporate veil to avoid evasion by lenders who arranged for borrowers to incorporate). Indeed, in addressing the very kinds of arrangements at issue here, the courts have held that a transaction which is a sale in form is to be treated as a loan when this more accurately reflects the substance of the arrangement. As the court stated in one such case, Long v. Storms, 50 Or.App. 39, 49, 622 P.2d 731, 738 (1981),
the undisputed evidence shows that defendants were financially distressed at the time of the transaction, that the purported sale price was substantially less than the fair market value of the property, that defendants remained in possession of the property, that plaintiff did not obtain an appraisal on the property until after the purported conveyance, and that there was no bargaining between the parties as to the consideration recited in the deed.... Finally, the form of the transaction was a deed absolute in form accompanied by an option to repurchase. That plaintiff did not require defendants to fill out a credit application does not persuade us that the transaction was a sale, not a loan. Plaintiff knew that defendants were financially distressed and had been unable to obtain a loan. Further, he had defendants' house as security. The sum of these facts squares clearly with our conclusion that the transaction between the parties constituted a loan with a security interest.
Accord: Moran v. Kenai Towing and Salvage, Inc., 523 P.2d 1237, 1243 (Alaska 1974); Kawauchi v. Tabata, 49 Haw. 160, 413 P.2d 221, 232 (1966); Cannon v. Seattle Title Trust Co., 142 Wash. 213, 216-217, 252 P. 699, 700-701 (1927).
The foregoing authorities involve civil proceedings, which might arguably be thought inapplicable to the construction of a criminal statute.[19] The decisions interpreting criminal enactments which prohibit *1116 the kind of conduct at issue in this case, however, likewise eschew form to reach the substance of the transaction. In McWhite v. State, 143 Tenn. 222, 226, 226 S.W. 542, 543 (1921), which involved a criminal prosecution under Tennessee's usury laws, the court, in holding that a purported assignment of future wages masked a secured usurious loan, stated that it is "well settled by our cases that in all transactions of this character the court will disregard the form of the matter, and will look to its real substance." Accord: People v. J.M. Adams & Co., 112 Cal.App.Supp. 769, 295 P. 511, 512 (1931). We therefore hold that the criminal character of these proceedings does not defeat coverage under the Loan Sharking Act.
C. Appellants contend that the homeowners, some of whom were comparatively well educated, signed documents clearly identifying the arrangements in question as sales and leasebacks, and that under these circumstances the trial judge erred in finding that the transactions were loans. Although it is true that, viewed from the calm and detached perspective of an appellate tribunal, the actions of the complainants might well be described as improvident, that is not a defense to the instant charges.
The class of persons protected by laws proscribing usury and loan sharking consists, essentially by definition, of individuals who, as a result of their financial plight, have improvidently made agreements so unconscionable that their enforcement is unwarranted. As the New York Court of Appeals explained in Schneider v. Phelps, supra, 41 N.Y.2d at 243, 391 N.Y.S.2d at 571, 359 N.E.2d at 1365.
The purpose of usury laws, from time immemorial, has been to protect desperately poor people from the consequences of their own desperation. Law-making authorities in almost all civilizations have recognized that the crush of financial burdens causes people to agree to almost any conditions of the lender and to consent to even the most improvident loans. Lenders, with the money, have all the leverage; borrowers, in dire need of money, have none.
Although the present prosecutions were brought under the loan sharking statute, the trial judge found that here, as in usury cases, the appellants used their superior economic power to induce desperate individuals who faced imminent foreclosure to sign disguised loan agreements at a rate of interest far in excess of that permitted by law. The lender's transgression in such a situation is not excused by his victim's ill-advised agreement to the oppressive terms offered.
We have considered all of the appellants' remaining contentions and find them to be lacking in merit.[20] Congress and the City Council have prohibited the kinds of exploitive and unconscionable practices, designed to take financial advantage of human desperation, which are reflected in this record. The trial judge correctly identified these practices for what they were, and appellants' convictions must be and each is hereby
AFFIRMED.
NOTES
[*] Judge Pryor was Chief Judge of this court at the time of argument. His status changed to Senior Judge on November 2, 1988.
[1] PROVERBS, Chapter 2, Verse 7.
[2] EXODUS, Chapter 22, Verse 25.
[3] HAMLET, Act I, Scene 3.
[4] THE MERCHANT OF VENICE, Act I, Scene 3, and passim.
[5] To avoid any misunderstanding, the rhetoric cited above was not directed at these defendants, who are charged only with making loans without a license and the New York opinions probably had reference to the kinds of loan sharks who use violence and intimidation to terrorize hapless debtors. There is no evidence of such conduct in the present case. Nothing in this opinion is intended to address the wisdom or lack thereof of economic or other criticisms of the usury laws. See, e.g., Jordan and Warren, The Uniform Consumer Credit Code, 68 COLUMBIA L.REV. 387, 388 et seq. (1968).
[6] Ms. Walker was found not guilty of three additional counts.
[7] Presumably this redundancy was intended for emphasis.
[8] Each of the informations also alleged that the defendants' conduct was in violation of 16 DCMR § 201.1, a regulation enacted by the pre-Home Rule Council which essentially prohibits the same conduct.
[9] The name of the corporation apparently derives from Ms. Walker's initials. In an application by the corporation to do business in the District of Columbia, the corporate purpose was described as being
to carry out the mortgage brokerage business [and] to engage in the business of obtaining loans or financing on behalf of clients.
Nevertheless, RAW did not obtain the license required by § 26-701.
[10] The letter began:
I am sorry to read that your property, by order of the court, is being foreclosed upon. We are foreclosure specialists....
The reader can assess from the evidence in this case the genuineness of the defendants' professed sorrow.
[11] The defendants' version of the arrangements with Mrs. Carroll (as well as with the other homeowners) was capsulized by Mr. Browner as follows:
We would buy real estate and we would allow the person that sold the property to us an opportunity to stay in the property so they wouldn't be uprooted.
* * * * * *
We never loaned anyone any money.
[12] The defendants claim that they were entitled to a jury trial because several counts were joined in the information filed against them, and that the cumulative potential penalties for all counts were arguably in excess of those which can be imposed for a petty offense. This contention was squarely rejected in Scott v. District of Columbia, 122 A.2d 579, 581 (D.C.1956), where this court stated:
We see no reason why consolidation of a number of petty offenses in one information should confer on the defendant a right he would not have if the charges were brought in separate informations.
See also Olevsky v. District of Columbia, 548 A.2d 78 (D.C.1988).
[13] 91 N.J.L. 212, 214, 102 A. 433, 435 (1917).
[14] Appellants cite Chew v. District of Columbia, 42 App.D.C. 410 (1914) as standing for the proposition that they are entitled to a jury trial. In Chew, the court affirmed the defendant's conviction for loan sharking after he had been found guilty by a jury. The principal issue on appeal was whether the loan sharking statute should be liberally construed, despite its penal character. The court held that it should. Nothing in Chief Justice Shepard's opinion for the court suggests that the prosecution opposed trial by jury, or that either the Police Court or the appellate court ever had occasion to address the issue whether the defendant had that right. Under these circumstances we find apposite the following observation by the Supreme Court in Webster v. Fall, 266 U.S. 507, 511, 45 S.Ct. 148, 149, 69 L.Ed. 411 (1925):
The most that can be said is that the point was in the [case] if anyone had seen fit to raise it. Questions which merely lurk in the record, neither brought to the attention of the court or ruled upon, are not to be considered as having been so decided as to constitute precedents.
[15] The federal decisions cited construe 28 U.S.C. § 144. Civil Rule 63-I is substantially identical to that statute, and decisions under the federal statute provide guidance as to the proper construction of the Rule. In re Bell, 373 A.2d 232 (D.C.1977).
[16] Legal rulings against appellants, of course, do not constitute grounds for recusal, for any prejudice must stem from an extrajudicial source. Burt, supra, 490 A.2d at 188.
[17] Whether a particular arrangement is a "cover for usury" is a question of fact. Hammelburger v. Foursome Inn Corp., 54 N.Y.2d 580, 595, 446 N.Y.S.2d 917, 925, 431 N.E.2d 278, 286 (1981).
[18] The appellants in this case were not convicted of usury but of making unlicensed loans. Given the nature of the proof, however, Chief Judge Cooke's comments appear to us somewhat apposite by analogy.
[19] In Reagan v. District of Columbia, supra, 41 App.D.C. at 412, the court, in broadly construing the word "security" in what was then the newly enacted Loan Sharking Act, declined to apply the doctrine that penal statutes are to be strictly construed:
It is urged that this is a penal statute, and, as such, the somewhat obsolete rule of strict construction should be invoked. It is a remedial act, and should be liberally construed, with the view of giving force and effect to the intent of Congress.
Accord: Chew v. District of Columbia, supra, 42 App.D.C. at 412. Since the doctrine which the court deemed obsolete in 1914 is still part of our jurisprudence almost three quarters of a century later, Moore v. United States, 508 A.2d 924, 925-926 (D.C.1986) (per curiam), and since in our view the trial judge could properly find the conduct in question to contravene the statute even if the rule of lenity is applied, we do not place our reliance on the characterization of our criminal loan sharking statute in Reagan and Chew as remedial rather than penal.
[20] Appellants contend that the criminal proscriptions of the Loan Sharking Act apply only to loans of $200.00 or less. There is, however, nothing in the language of § 26-701 or in the parallel Regulation, 16 DCMR § 201.1, to support such a limitation. Moreover, appellants' contention is foreclosed by the decision in Hartman v. Lubar, 77 U.S.App.D.C. 95, 133 F.2d 44 (1942), in which the principal authorities relied upon by appellants are carefully explored and distinguished. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260533/ | 549 A.2d 315 (1988)
JONES & ARTIS CONSTRUCTION COMPANY, Petitioner,
v.
DISTRICT OF COLUMBIA CONTRACT APPEALS BOARD, Respondent.
No. 87-639.
District of Columbia Court of Appeals.
Argued April 12, 1988.
Decided October 25, 1988.
*316 John William Mannix, Washington, D.C., for petitioner.
Martin B. White, Asst. Corp. Counsel, with whom Frederick D. Cooke, Jr., Corp. Counsel, and Charles L. Reischel, Deputy Corp. Counsel, Washington, D.C., were on the brief, for respondent.
Before FERREN, BELSON and ROGERS, Associate Judges.
FERREN, Associate Judge:
In this government contract case, the District of Columbia Department of Administrative Services (DAS) cancelled an invitation for bids on a contract to haul sludge for the Department of Public Works at the Blue Plains sewage treatment plant. Jones & Artis Construction Company, which had submitted a bid, "appealed" this cancellation to the District of Columbia Contract Appeals Board. The Board dismissed on the ground that Jones & Artis actually had filed a "protest," not an "appeal," and thus had filed too late after the 10-day statutory period to invoke the Board's jurisdiction. Jones & Artis seeks review of that dismissal.
We agree with the Board that Jones & Artis filed a "protest," but we cannot affirm on the ground of untimeliness. Rather, we must dismiss for lack of our own jurisdiction. Although the applicable statute does provide for this court's direct review of a "Board decision," our jurisdiction *317 has been limited by Congress, save for exceptions inapplicable here, to review of "contested cases." Because Jones & Artis' protest did not create a contested case before the Board, we must dismiss the appeal. Interestingly, however, had Jones & Artis filed an "appeal" with the Board, as it contends it did, that might have presented a contested case that ultimately was reviewable by this court. Accordingly, in order to resolve our own jurisdiction here, we have had to determine whether an "appeal" or a "protest" to the Board is at issue a determination that, for all practical purposes, resolves the merits.
I.
DAS issued an invitation for bids on the Blue Plains contract on April 8, 1986, and accepted bids until 2:00 p.m. on May 13, 1986. When the bids were opened at 2:10 p.m., the official in charge announced that MTI Construction Company was the only bidder. A representative of Jones & Artis was present, however, and immediately said that his company had also submitted a bid. Everyone involved then accompanied the bid-opening official to the safe where all the bids were to have been kept. There the official found a sealed bid from Jones & Artis stamped received at 1:49 p.m. on May 13, 1986. Upon direction of his supervisor, the official opened the bid; he found that Jones & Artis was the apparent low bidder. On May 30, 1986, MTI filed a protest with DAS, alleging Jones & Artis' bid was untimely. DAS transmitted MTI's protest to the Contract Appeals Board, but the record does not reflect the disposition.
In any event, after the bid opening, DAS investigated for several months in an effort to resolve the factual uncertainties surrounding receipt of the Jones & Artis bid. DAS was unable to solve the mystery, however, so on recommendation of the Corporation Counsel the Director of DAS formally issued a "determination" on August 13, 1986, that cancelling the invitation for bids would be "in the best interest of the District Government." Jones & Artis received notice of cancellation on September 10. Nearly two months later, on November 6, Jones & Artis filed a "Notice of Appeal" with the Contract Appeals Board challenging this cancellation. On November 13, DAS issued a second invitation for bids. On November 24, Jones & Artis filed a protest with the Board against this second invitation but later withdrew it.
On May 26, 1987, the Chairman of the Contract Appeals Board who was also its only active member issued an order on behalf of the Board dismissing Jones & Artis' "appeal" of November 6, 1986, for lack of jurisdiction. According to the Chairman, the "appeal" was actually a "protest" within the meaning of the District of Columbia Procurement Practices Act of 1985. D.C.Code §§ 1-1181.1 to 1-1192.6 (1987). Under that statute, a protest must be filed within ten working days from the time the aggrieved person knew or should have known of the circumstances giving rise to the protest. Id. § 1-1189.8(b). Consequently, the Chairman concluded, Jones & Artis which had waited almost two months did not file a timely challenge.
Jones & Artis has petitioned this court for review, contending, first, that the Contract Appeals Board was improperly constituted and lacked a quorum; that its decision, therefore, had no legal effect; and that of necessity this court must afford de novo review of petitioner's grievance. Alternatively, Jones & Artis argues that DAS' cancellation of the original invitation for bids was subject to "appeal," not merely to a "protest," and thus was timely filed with the Board within the required 90 days. Id. §§ 1-1189.3(2), -1189.4(a). Before we address these concerns, however, we consider sua sponte the issue of our own jurisdiction.
II.
D.C.Code § 1-1189.5 (1987) provides for the direct appeal of a "Board decision" to this court within 120 days from the date of receipt of the decision.[1] This *318 court, however, only has jurisdiction to review "an order or decision of the Mayor or an agency in a contested case." See D.C. Code §§ 11-722 (establishing jurisdiction over agency action); § 1-1510(a) (limiting review to contested cases) (1987). A "contested case" means a proceeding in which "the legal rights, duties, or privileges of specific parties are required by law (other than [the District of Columbia Administrative Procedure Act (DCAPA)]), or by constitutional right," to be determined after a trial-type hearing. See id. §§ 1-1502(8), -1509; Dupont Circle Citizens Association v. District of Columbia Zoning Commission, 343 A.2d 296, 298-99 (D.C.1975) (en banc); Chevy Chase Citizens Association v. District of Columbia Council, 327 A.2d 310, 313-14 (D.C.1974) (en banc). In addition to this general grant of jurisdiction, Congress itself on occasion has authorized this court to afford direct review of a particular type of agency determination even though there was no contested case. Hotel Association of Washington, D.C. v. District of Columbia Minimum Wage and Industrial Safety Board, 318 A.2d 294, 304 (D.C.1974) (en banc). In contrast, however, the Council of the District of Columbia may not enlarge the congressionally prescribed limitations on our jurisdiction, most significantly the "contested case" limitation in the DCAPA. See D.C.Code § 1-233(a)(4) (1987) (Council may not adopt any provision "with respect to Title 11 (relating to organization and jurisdiction of the District of Columbia courts)"); Capitol Hill Restoration Society, Inc. v. Moore, 410 A.2d 184, 186-88 (D.C.1979). This means that the Council may not confer jurisdiction on this court under D.C.Code § 1-1189.5 to review a Contract Appeals Board decision on an "appeal" or a "protest," see id. § 1-1189.3, unless the Board proceeding itself is a contested case.
We have no difficulty discerning that a contractor's "appeal" of a decision of the Director to the Board may present a contested case involving a trial-type hearing. See id. §§ 1-1189.4 ("Contractor's right of appeal to Board"), -1189.6 ("Oaths, discovery, and subpoena power"); 27 DCMR §§ 200.1-299.1 ("Contract Appeals Board: Hearings and Decisions"). And, we are equally confident that a contractor's "protest" will not result in a contested case. The statute (and certainly the Constitution) does not require a hearing, let alone a trial-type hearing, to resolve a protest, see D.C.Code § 1-1189.8 ("Protest of solicitations or awards to Board"). Moreover, the Board currently functioning under the Procurement Practices Act of 1985 (more later about the Board's legal status) has adopted no regulations whatsoever pursuant to statutory authority, id. § 1-1189.8(f), that would suggest the Board might use a trial-type hearing to resolve a protest. Instead, under traditional government contract law, protests are decided on the written submissions, coupled on occasion with a "conference," not a formal hearing, attended by interested parties. See 4 C.F.R. §§ 21.0-21.12 (1988) ("Bid Protest Regulations"); W. KEYES, GOVERNMENT CONTRACTS IN A NUTSHELL 180 (1979). The 1985 Act appears to follow this model.
In sum, if Jones & Artis filed an "appeal" with the Board, we may have jurisdiction to review the Board's decision. But, if Jones & Artis filed a "protest," as the Board itself ruled, we do not have jurisdiction, and any relief from the Board's action would have to be sought, in the first instance, from the Superior Court. See Capitol Hill Restoration Society, Inc., 410 A.2d at 188. We, of course, have jurisdiction to determine our own jurisdiction, and thus like the Board we must determine whether an "appeal" to the Board or a "protest" is at issue. In this sense our jurisdictional evaluation will entail an exploration, and virtual resolution, of the merits of Jones & Artis' case.
III.
A.
As government contract law has developed, there are two basic categories *319 of public procurement disputes: (1) disputes arising in connection with solicitation of bids and awards of particular contracts, and (2) all other disputes, including controversies over contract performance as well as wholly separate proceedings to suspend or debar a particular business from consideration for a contract award. See, e.g., R. NASH, JR. & J. CIBINIC, JR., FEDERAL PROCUREMENT LAW (3d ed. 1980) (compare Vol. I (contract formation) with Vol. II (contract performance)); G. MONROE, GOVERNMENT CONTRACT LAW MANUAL (1979); W. KEYES, supra.
Customarily, complaints about the solicitation and award of contracts are called "protests."[2] Such alleged improprieties must be quickly asserted and expeditiously resolved so that the contract can be awarded and the job begun. Under federal law, for example, there are comprehensive provisions governing the "procurement protest system." 31 U.S.C. §§ 3552-56 (Supp. IV 1986). A complaining party generally must protest to the General Accounting Office within 10 days after the grievance is known or should have been known. 4 C.F.R. § 21.2(2) (1988). The Comptroller General must issue a final decision within 90 working days (and, in certain cases, within 45 calendar days) after the protest is filed. 31 U.S.C. § 3554(a)(1) & (2) (Supp. IV 1986); 4 C.F.R. §§ 21.7, 21.8 (1988).
In contrast, "appeals" are customarily limited to issues of contract performance (or to suspension or debarment of a firm). Under the federal system, for example, there is a separate chapter governing "contract disputes," 41 U.S.C. §§ 601-613 (1982), meaning disputes brought by "contractors" who, by definition, are parties (other than the government) to an awarded contract. Id. § 601(4). Such disputes must be submitted initially to the "contracting officer," id. § 605, and may be "appealed" to an agency board of contract appeals within 90 calendar days from receipt of the contracting officer's decision. See id. §§ 606-607; 48 C.F.R. § 533.7101(a) (1987). They cannot be the subject of a protest.[3]
The American Bar Association Model Procurement Code also reflects the traditional distinction between a protest and an appeal. MODEL PROCUREMENT CODE FOR STATE AND LOCAL GOVERNMENTS §§ 9-101, -101 commentary, -506 (1979). See also MODEL PROCUREMENT ORDINANCE FOR LOCAL GOVERNMENTS §§ 9-101 (bid protests), -102 (contract claims) (1982). Unlike the federal system, the Model Code establishes the same forum for resolving both kinds of complaints. The proposed Procurement Appeals Board exercises jurisdiction over "any protest of a solicitation or award of a contract" and over "any appeal from a determination by the Chief Procurement Officer." Model Procurement Code § 9-505. Under the Model Code, however, the Procurement Appeals Board does not have exclusive jurisdiction over protests. Subject to exceptions not relevant here, protests may be lodged either with the Board within a suggested 14 days after the grievance is known or should have been known, id. § 9-506(2)(a), or, initially, with a designated procurement official, id. § 9-101(1) & (2), subject to a right of appeal to the Board within a suggested seven days of the reviewing official's decision, id. § 9-506(2)(b).
*320 Like the federal system, the Model Code suggests a much longer filing deadline for "appeals" of other disputes to the Board. A party has 60 days within which to appeal controversies over debarment and suspension, id. § 9-507(2), or over contract performance, id. § 9-508(2), such as "controversies based upon breach of contract, mistake, misrepresentation, or other cause for contract modification or rescission," id. § 9-103(1).
In sum, public contract law, as reflected in the federal statute and the ABA Model Procurement Code, clearly distinguishes "protests" of pre-award complaints from other contract disputes, supplying substantially earlier filing deadlines for the former.
B.
Presumably aware of this background, the Council of the District of Columbia enacted the Procurement Practices Act of 1985, effective February 21, 1986. See 33 D.C.Reg. 1291 (1986); 32 D.C.Reg. 7396-7429 (1985).[4] The Council created a jurisdictional structure for the Contract Appeals Board similar to the one provided under the Model Code for the Procurement Appeals Board. The 1985 Act provides:
The Board shall be the exclusive hearing tribunal for, and shall have jurisdiction to review and determine de novo:
(1) Any protest of a solicitation or award of a contract addressed to the Board by any actual or prospective bidder or offeror, or a contractor who is aggrieved in connection with the solicitation or award of a contract; and
(2) Any appeal by an aggrieved party from a final decision by the Director which is authorized by this chapter.
D.C.Code § 1-1189.3 (1987) (emphasis added); see MODEL PROCUREMENT CODE §§ 9-505, -507(2), -508(2) (protest initially may be lodged either with designated procurement official or with Procurement Appeals Board, but appeal shall be taken directly to Board).
As in the federal statute and the Model Code, the Council provided different time limits for filing protests and appeals:
[A] protest of a solicitation or award of a contract addressed to the Board by any actual or prospective bidder ... who is aggrieved in connection with the solicitation or award of a contract ... shall [be filed] with the Board within 10 working days after the aggrieved person knew or should have known of the facts and circumstances upon which the protest is based.
D.C.Code § 1-1189.8(a) & (b) (1987). The Board must then "promptly decide whether the solicitation or award was in accordance with the applicable law, regulations, and terms and conditions of solicitation." Id. § 1-1189.8(c) (emphasis added). In contrast, when an aggrieved party wishes to "appeal" a decision by the DAS Director, it must file the appeal "within 90 days from the date of receipt of [the] decision." Id. § 1-1189.4(a). Only when a small claims procedure is invoked does the Board have a time limit within which to rule: 90 days "whenever possible." Id. § 1-1189.4(f).
The 1985 Act does not define "protest" or "appeal," but the legislative history gives no indication that the Council intended to depart from the conventional meanings of those terms. The consistent coupling of "protest" with "solicitation or award" or with "bids," both in the text of the statute and in its legislative history, strongly suggests an intent to incorporate into our local law the understanding of "protest" a pre-award dispute that has *321 become customary in public contract law. See, e.g., D.C.Code §§ 1-1189.3(1), -1189.8(a) & (b) (1987); REPORT OF THE COMMITTEE ON GOVERNMENT OPERATIONS ON BILL No. 6-191, "DISTRICT OF COLUMBIA PROCUREMENT PRACTICES OF 1985", at 5 (Oct. 10, 1985) (REPORT). More specifically, the Council committee noted in its report a distinction between resolution of "protests" as to "bids and solicitations" and review of the DAS Director's decisions in "contract disputes":
Title IX of the bill [Subchapter IX of the Act] creates a Contract Appeals Board to hear and decide on decisions rendered by the Director concerning contract disputes. The bill also allows for direct appeal to the Board for protests for bids and solicitations.
REPORT at 5 (emphasis added).[5]
The Council has made clear, moreover, that the Board's jurisdiction over "appeals" encompasses only two categories of disputes, namely, disputes concerning performance of contracts, D.C.Code § 1-1188.5 (1987), and controversies over debarment or suspension, id. § 1-1188.4. According to the committee report:
In addition, Title VIII of the bill [Subchapter VIII of the Act] provides for the Director to settle disputes arising from the performance of contracts. The Director is authorized to debar or suspend persons from receiving contracts for specific reasons as set forth. The Director has the authority to render decisions on claims arising from an aggrieved contractor, thus providing an administrative mechanism for resolving disputes. Appeals of these decisions are made to the Contract Appeals Board.
Report at 4-5 (emphasis added). Finally, the provision of different filing deadlines for protests and appeals, respectively, further indicates the Council's intent to treat pre-award and post-award disputes altogether differently, given the different concerns inherent in these respective categories of disputes.
IV.
Before considering Jones & Artis' fundamental argument that the DAS Director's cancellation of the first invitation for bids on August 13, 1986 was a final "decision" subject to an "appeal," not merely to a "protest," we note petitioner's threshold argument: that the Contract Appeals Board, having only one member (the Chairman), was improperly constituted and, consequently, lacked power to make a final decision. Must we deal with this argument if our principal concern is this court's jurisdiction?
Inherent in our reviewing a decision of the Board if we have jurisdiction is a premise that the Board itself acted within its own prescribed powers in ruling that Jones & Artis had filed a "protest," not an administrative "appeal." Arguably, we could simply assume, without deciding, that the Board acted properly and determine our own jurisdiction by deciding as a matter of law whether the Board ruled on a "protest" or an "appeal." Then, only if we concluded an appeal was involved would we have jurisdiction to determine whether the Board was properly constituted.
On the other hand, in deciding such a question of law we shall be "reviewing the construction of the statute by the agency charged with its interpretation and enforcement, [and] the agency's interpretation is controlling unless it is plainly erroneous or inconsistent with the statute." Totz v. District of Columbia Rental Accommodations Commission, 412 A.2d 44, 46 (D.C. 1980) (citing 1880 Columbia Road, N.W. Tenants' Association v. District of Columbia Rental Accommodations Commission, 400 A.2d 333, 337 (D.C.1979)); see George Washington University v. District of Columbia Board of Zoning Adjustment, 429 A.2d 1342, 1348 (D.C.1981). Accordingly, unless the proper interpretation of the statute is so clear that we could appropriately ignore what the Board itself *322 has said, we should have the benefit of the Board's own interpretation. Given the lack of legislative history on the meaning of "protest" and "appeal" under the 1985 Act, we cannot easily assume that we should act without considering the views of the Board if the Board was properly constituted when it ruled and thus spoke with the force necessary to elicit our deference. We conclude that, in aid of determining our own jurisdiction, the better course is to resolve, first the challenge Jones & Artis has made to the status of the present Contract Appeals Board and of its chairman.
A.
The Procurement Practices Act of 1985 calls for creation of a Contract Appeals Board with a chairperson and four other members, all of whom are to be appointed by the Mayor with the advice and consent of the Council. D.C.Code § 1-1189.1(a)(1) & (3) (1987). A quorum consists of at least three members. Id. § 1-1189.1(b). The appointments mandated by the Act, however, have yet to be made and confirmed.
There is, nonetheless, an existing Contract Appeals Board created by Commissioner's Organization Order No. 9, D.C. Code Title 1, Appendix (Supp. V 1978), as amended by Mayor's Order 82-224, 30 D.C. Reg. 497 (1983). This Board continues to operate under the 1985 Act on an interim basis, as authorized by Mayor's Order No. 86-65, which provides:
Except to the extent inconsistent with the District of Columbia Procurement Practices Act of 1985 (hereinafter, "the act") the terms of Organization Order No. 9, as amended, governing the District of Columbia Contract Appeals Board shall remain in effect....
* * * * * *
Until the new Contract Appeals Board is established pursuant to the terms of the act, the present Contract Appeals Board shall continue to function.
33 D.C.Reg. 3006 (1986). As a consequence of incorporating the old Board as the interim new Board under the 1985 Act, this order expanded the Board's jurisdiction to permit adjudication of protests in addition to its pre-existing jurisdiction limited to appeals.[6] (No one in this case has questioned the Mayor's authority to issue Order 86-65.)
Order 86-65 did not affect how the old Board now the interim new Board is organized. Order 82-224, amending Organization Order No. 9 in 1982, created a Board of at least three members to be appointed without confirmation by the Council. Two of them, including the Chairperson, had to be lawyers appointed by the Corporation Counsel. The Mayor was authorized to appoint the other Board member(s). Order 82-224 further provided:
Except as otherwise provided by its rules, decisions of the Board finally adjudicating contract claims or other disputes shall be rendered by panels of not less than three members, but any two members of a panel shall constitute a quorum for the transaction of any business of the Board.
30 D.C.Reg. 497 (1983). Under Board rules, however,
[t]he Chairperson, acting alone may take any action which these rules authorize or require the Board to take, and any such action taken by the Chairperson, including making of orders, shall be deemed the action or order of the Board; Provided, however, that the Chairperson acting alone may not make any decision which constitutes a final disposition of any appeal or part thereof except pursuant to stipulation of the parties.
27 DCMR § 100.5 (1985). Jones & Artis argues that because the Board that adjudicated its complaint had only one active *323 member, the Chairman, and because the parties did not stipulate, pursuant to § 100.5 of the rules, that the Chairman could act alone, his "final disposition" of Jones & Artis' "appeal" was invalid.
Before the 1985 Act, this court had no jurisdiction to entertain direct appeals from decisions of the Contract Appeals Board. Gunnell Construction Co., Inc. v. Contract Appeals Board, 282 A.2d 556 (D.C. 1971) (Gunnell I). Such appeals were heard by the Superior Court. See id. at 558. The 1985 Act, however, purported to establish the right of a contractor, or of DAS itself, to appeal a decision of the new Board directly to this court. D.C.Code § 1-1189.5 (1987). Consequently, by seeking review in this court, Jones & Artis implicitly concedes the authority of the old Board, if properly constituted, to function under the 1985 Act pursuant to Order 8665 until a new Board is appointed and confirmed.[7] This means that the issue is limited to whether the Board, in dismissing Jones & Artis' "appeal," acted lawfully with a quorum as defined and required by Order 82-224 and the Board's related rules.
B.
We cannot address this question, however, without first considering the Board's contention that Jones & Artis has waived the quorum argument by failing to raise it before the Board. The record reflects that Chairman Sharpe held a conference on April 8, 1987, on the proposed dismissal of Jones & Artis' purported "appeal." At that time, Jones & Artis should have perceived that one person was handling the case. Even if petitioner were not aware that the Chairman was acting alone, however, it learned he was doing so no later than the day it received the final decision signed only by the Chairman. Jones & Artis failed to raise the quorum issue either at the April 8 conference or after the decision, even though the Board's rules explicitly provided for reconsideration when the Chairperson acts alone.[8]
The failure to confront the Board in this case, the Chairman with the quorum issue amounted to a waiver of that alleged defect on appeal unless the lack of a quorum can be said to have deprived the Board of jurisdiction. See United States v. Tucker Truck Lines, 344 U.S. 33, 37-38, 73 S.Ct. 67, 69, 97 L.Ed. 54 (1952); National Labor Relations Board v. Newton-New Haven Co., 506 F.2d 1035, 1038 (2d Cir.1974). In Tucker Truck Lines, a trucking company challenged an Interstate Commerce Commission decision on the ground that the hearing examiner, whose recommendation the Commission adopted in substance, had not been properly appointed under the Administrative Procedures Act. Because this alleged irregularity did not "deprive[] the Commission of power or jurisdiction," the Supreme Court declined to consider it, even though the irregularity "would invalidate a resulting order if the Commission had overruled an appropriate objection made during the hearings." 344 U.S. at 38, 73 S.Ct. at 69. Similarly, in Newton-New Haven Co., the court ruled on the basis of Tucker Truck Lines that the company could not question whether the NLRB panel had violated the quorum requirement because it had failed to raise that issue before the NLRB itself. 506 F.2d at 1038.
Jones & Artis argues that these cases are not controlling because, in challenging the authority of the Chairman to act alone, it questions the Board's very power to act: a jurisdictional challenge. In Railroad *324 Yardmasters of America v. Harris, 232 U.S. App. D.C. 171, 721 F.2d 1332 (1983), the United States Court of Appeals for the District of Columbia Circuit noted "it is not always obvious which questions are `jurisdictional' for purposes of avoiding waiver at the administrative level." Id. at 177 n. 20, 721 F.2d at 1338 n. 20 (citations omitted). In that case, however, the court did hold that a quorum challenge was jurisdictional. Only one of three members of the National Mediation Board remained in office, and he had acted on behalf of the Board to certify the election of a union representative. The Court ruled the contention "that the National Mediation Board had no power to act at all at a time when there were two vacancies on the Board ... presents a question of power or jurisdiction and is open to appellee even if not initially asserted before the Board." Id. at 177, 721 F.2d at 727 (footnote omitted). (A divided court then held that the so-called "delegation provision" in the governing statute authorized the single member to act on the Board's behalf under the circumstances, and that the provisions respectively applicable to vacancies and to establishment of a quorum did not impair the delegation.)
Unlike the appellee in Railroad Yardmasters of America, Jones & Artis does not challenge the power of the Board to act through the Chairman but only the authority of the Chairman to act alone in this particular case, absent a "stipulation of the parties." 27 DCMR § 100.5 (1985). We do not have a case where, allegedly, the Board was inherently without authority to act through one member. Under these circumstances, it is important to stress that "orderly procedure and good administration require that objections to the proceedings of an administrative agency be made while it has opportunity for correction in order to raise issues reviewable by the courts." Tucker Truck Lines, 344 U.S. at 37, 73 S.Ct. at 69. In light of this strong policy, we believe that Jones & Artis' failure to raise the quorum issue before the Board was an acquiescence, tantamount to a stipulation under the rules, that the Chairman could act on behalf of the Board as has been customary for appeals, upon stipulation, irrespective of quorum requirements.[9]
Jones & Artis argues that the Board, having but one member, its Chairman, could not effectively arrange to enlarge its membership; raising the quorum issue at the Board level would have been futile. It would follow that no such stipulation should be inferred. On this record, we cannot be sure of that. Counsel for the Board asserts in his brief that under Order 82-224,
[c]ity employees or other qualified persons can be appointed to the Board by either the Mayor or the Corporation Counsel, with no need for confirmation by the City Council. If Jones & Artis had asserted the need for a multi-member panel before the Board (and been persuasive), a multi-member panel could quickly and easily have been assembled.
Petitioner has not refuted that assertion. Accordingly, we hold that Jones & Artis has waived its objection to the Chairman's acting on behalf of the Board, and thus we need not address the merits of that argument.[10]
*325 V.
We turn, finally, to the central issue: did Jones & Artis file a timely "appeal" or an untimely "protest"? According our usual deference, we agree with the Board that Jones & Artis' "Notice of Appeal ... constitute[d] an untimely protest," since it concerned "a solicitation or award of a contract." D.C.Code § 1-1189.3(1) (1987); see supra Part III.B.[11]
A.
Challenges to cancellations of invitations for bids (IFBs) are commonly treated as subjects for protests. The General Accounting Office (GAO) has authority under 31 U.S.C. § 3553 (Supp. IV 1986) to decide protests but not other contract disputes in the federal system. See Rice Services Ltd., Comp.Gen.Dec. B-227119, July 28, 1987, 87-2 CPD ¶ 102; Brown Root Services Corp., Comp.Gen.Dec. B-228331, Dec. 10, 1987, 87-2 CPD ¶ 575. In this connection, the GAO routinely decides challenges to cancellation of IFBs. See, e.g., Union Natural Gas Co., Comp.Gen.Dec. B-224607, Jan. 9. 1987, 87-1 CPD ¶ 44; Snowbird Industries, Inc., Comp.Gen.Dec. B-226980, June 25, 1987, 87-1 CPD ¶ 630; Rice Services Ltd., supra; Brown Root Services Corp., supra. Significantly, the Comptroller General has dismissed protests of cancellations of IFBs as untimely when they were filed more than 10 days from the time the protester learned of the cancellation. See, e.g., Billings American Indian Council, Comp.Gen.Dec. B-228989, Dec. 29, 1987, 87-2 CPD ¶ 639.
On the other hand, federal agency boards of contract appeals, which generally lack protest jurisdiction,[12] routinely have refused to hear challenges to cancellations of IFBs even when labeled, as in this case, as "appeals". See, e.g., R.F. Brierly, ASBCA No. 33682, Nov. 18, 1986, 87-1 BCA ¶ 19,501 (Armed Services Board of Contract Appeals dismissed for lack of jurisdiction challenge to cancellation of Navy IFB, noting that "appellant's `appeal' is clearly a protest"); see also Coastal Corp. v. United States, 713 F.2d 728 (Fed.Cir.1983) (Department of Energy Board of Contract Appeals' decision on merits, denying bidder's claim for bid preparation costs after cancellation of IFB, vacated because Board lacked jurisdiction to adjudicate honesty and fairness in treatment of bids); Wendel Lockard Construction Co., ASBCA No. 33896, July 15, 1987, 87-3 BCA ¶ 20,055 (appeal from contracting officer's denial of request for damages suffered as result of IFB cancellation dismissed because boards of contract appeals lack jurisdiction over protests).
When the GAO fielded protests for the District of Columbia before the 1985 Act became effective, see supra note 6, it characterized challenges to the District government's cancellation of solicitations as protests. See, e.g., Coastal Striping & Painting Corp., Comp.Gen.Dec. B-214869, Dec. 26, 1984, 84-2 CPD ¶ 697; Systems Group Associates, Inc., Comp.Gen.Dec. B-198340, *326 July 28, 1981, 81-2 CPD ¶ 64; M. Bennett Ltd., Comp.Gen.Dec. B-198316, May 27, 1980, 80-1 CPD ¶ 363; Precision Analytical Laboratories, Comp.Gen.Dec. B-188627(1), Oct. 10, 1978, 78-2 CPD ¶ 262. The Council has given no indication that, in enacting the 1985 Act, it intended to deviate from this established use of a "protest" once the Contract Appeals Board succeeded the GAO for this purpose.
B.
Jones & Artis argues that, in contrast with the foregoing caselaw, its objection to the IFB cancellation is not based on technical defects apparent on the face of the IFB or on objections to alleged changes in governmental needs or resources. More specifically, petitioner argues that the IFB cancellation here was not premised, as the cited cases were, on the kinds of cancellation criteria specified in the applicable Materiel Management Manual (MMM) ¶ 2620.13(A)(2)(a)(f).[13] Instead, according to Jones & Artis, the IFB cancellation of August 13, 1986 resulted from a lengthy and flawed "unilateral" investigative process concerning "unique circumstances" in which Jones & Artis, but not its competitor, was excluded from participation. Accordingly, says petitioner, even if IFB cancellations normally should be "protested," the circumstances here, devoid of any rationale justified by the MMM, transmute this particular cancellation into "a final decision by the Director" of DAS entitling Jones & Artis to "appeal." D.C.Code § 1-1189.3(2) (1987).
We discern no basis for rejecting the Board's view that the circumstances cited by petitioner make no difference here. We note, first, that the Director cancelled the IFB "in the best interest of the District government," tracking D.C.Code § 1-1183.7 (1987) (cancellation of invitations for bids). Petitioner has not established that the MMM cancellation criteria comprise an exclusive expression of the "best interest" test. Jones & Artis, moreover, does not offer any example where a pre-award objection, applicable to cancellation of an IFB, has been treated as anything other than a protest. In effect, petitioner argues only that allowance of its particular type of challenge after the 10-day deadline for a protest would promote a fuller and fairer redress of grievances under complicated circumstances.
But Jones & Artis has not shown why challenging a decision to cancel an IFB after an extensive investigation requires a lengthier filing deadline than challenges to other bid cancellations. Petitioner merely asserts that the 10-day limit within which to evaluate whether to challenge the Director's determination, without regard to the length of the investigation leading up to it, is too short. We would be astonished if Jones & Artis' decision whether to object, either by protest or by appeal, was a difficult one in this case; apparently millions of dollars are at stake. And, in any event, we perceive no reason why, after timely protest, Jones & Artis would not have been able to develop and present its case without an undue rush under the circumstances.
The record shows that Jones & Artis was conversant with protests. For example, it noted that MTI, in opposing Jones & Artis' bid, had filed its protest in the wrong forum by going to DAS, not to the Board. Furthermore, Jones & Artis filed a timely "protest" to the second IFB in this case. We discern no reason why Jones & Artis could not have been expected to do so with respect to cancellation of the first IFB. To the extent that Jones & Artis was *327 precluded from substantive adjudication of a complaint, it has failed to demonstrate that anything but its own omission to file a protest within the deadline was responsible for that outcome.[14]
The Board correctly concluded that a "protest," not an administrative "appeal," is at the heart of this proceeding. Accordingly, the Board was not presented with a "contested" case. Nor are we. We are without jurisdiction here.
APPEAL DISMISSED.
ROGERS, Associate Judge, concurring:
The majority opinion states that "no one in this case has questioned the Mayor's authority to issue Order 86-65."[1]See majority opinion at 322. That order purported to postpone the effective date of some provisions of the District of Columbia Procurement Practices Act of 1985 (new Act). Appellant Jones & Artis argued only that the Board Chairman exceeded his authority by acting without a quorum. Respondent, the majority states, did not question the validity of Mayor's Order No. 86-65, but contended only that the Contract Appeals Board dismissing Jones & Artis' "appeal" was not the Board created by the new Act, and hence was not the Board from which appeals to this court may be taken under the new Act and, consequently, this court lacked jurisdiction under Gunnell Constr. Co. v. Contract Appeals Bd., 282 A.2d 556 (D.C.1971) (concerning Contract Appeals Board established by Commissioner's Organization Order No. 9[2]). See majority opinion at 323 n. 7.
That notwithstanding, the court itself raised the issue of the validity of Mayor's Order No. 86-65 at oral argument. Respondent at that time could offer no authority to support the mayoral action in lieu of amendment of the Act by the Council of the District of Columbia to delay the effective date. Cf. D.C.Code §§ 1-319, -320 (1987 Repl.); Glover v. District of Columbia, 250 A.2d 556, 559 (D.C.1969) (public necessity requiring curfew). Nor has this court subsequently been referred to supporting authority.[3]
In addition, the majority opinion acknowledges that "[i]nherent in our reviewing a decision of the Board ... is a premise that the Board itself acted within its own prescribed *328 powers...." The majority further reasons that because this court will defer to agency interpretation of its enabling statute, the court must be certain that the Board "spoke with the force necessary to elicit our deference." See majority opinion at 321-322. All this said, the majority proceeds to defer to the Board, see, e.g., majority opinion at 324, 326-327, but nonetheless concludes inplicitly that it need not examine whether the Board established by Mayor's Order 86-65 may lawfully exercise powers under the new Act. In its view, appellants have "implicitly conceded" the validity of Mayor's Order 86-65 by seeking review in this court. See majority opinion at 323. Yet a fairly fundamental issue, involving the separation of powers under the District of Columbia Self-Government and Governmental Reorganization Act,[4] potentially makes everything that happened here null and void.
I join the majority in dismissing the appeal for lack of jurisdiction. It is undisputed that the Board that acted here is not the Board entitled to appeal under the new Act, and since parties cannot confer jurisdiction on this court, Gunnell is controlling. Hence, there is no need to reach the issue of the validity of Mayor's Order No. 86-65.
NOTES
[1] D.C.Code § 1-1189.5 (1987) provides:
(a) A contractor may appeal a Board decision to the District of Columbia Court of Appeals within 120 days after the date of receipt of a copy of the decision.
(b) If the Director determines that an appeal should be taken, the Director, with the prior approval of the Corporation Counsel, may appeal the Board's decision to the District of Columbia Court of Appeals for judicial review within 120 days from the date of the receipt of the Board's decision.
[2] Under federal government contract law,
"protest" means [1] a written objection by an interested party to a solicitation by a[] Federal agency for bids or proposals for a proposed contract for the procurement of property or services or [2] a written objection by an interested party to a proposed award or the award of such a contract....
31 U.S.C. § 3551(1) (Supp.IV 1986). See generally 1 R. NASH, JR. & J. CIBINIC, JR., supra, at 803-04 (protest is technique to challenge decision by procurement agency in contract award process); G. MONROE, supra, at 17-19 (same); W. KEYES, supra, at 176-93 ("Complaints by potential bidders under formally advertised contracts... prior to contract award, are termed protests. Protests are to be distinguished from allegations for breaches of contract.").
[3] See Mustang Industrial Cleaners, Comp.Gen. Dec. B-172531, Mar. 5, 1976, 76-1 CPD ¶ 158 ("Matters of contract administration [such as failure to follow dispute clause, improper withholding of funds, and denial of requests for changes] are not for resolution under our bid protest procedures, which are reserved for considering whether an award, or proposed award, of a contract complies with statutory, regulatory and other legal requirements.").
[4] The legislative history does not refer to federal statutes or to the Model Procurement Code, but the similarities between those sources and the Procurement Practices Act of 1985 suggest the Council's awareness of these other models. Interestingly, the REPORT OF THE COMMITTEE ON GOVERNMENT OPERATIONS ON BILL No. 6-191, "DISTRICT OF COLUMBIA PROCUREMENT PRACTICES ACT OF 1985," at 1 (Oct. 10, 1985), notes that "[t]he bill repeals present statutes for contracting which, for the most part, were enacted around the turn of the century, and are outdated and insufficient for modern municipal procurement activities. These outdated statutes have been augmented by a series of executive orders, resulting in the District's present system of decentralized procurement." See generally Splitt, Here's the Fine Print: A Guide to Procurement Law in the District, Wash.Law., May/June 1988, at 24 ("The Old System").
[5] Although the Council used the term "appeal" when it referred to protests under Subchapter IX, it clearly meant "resort" in this context rather than "review" in the sense of appellate review, since all protests under the 1985 Act must be lodged directly with the Board rather than with a procurement official as the Model Procurement Code permits.
[6] Under Commissioner's Organization Order No. 9, Part IV, D.C.Code Title 1, Appendix 142, 144 (Supp. V 1978), protests were heard not by the Contract Appeals Board but by the Mayor's Contract Review Committee. In addition, the federal General Accounting Office, which by statute hears protests for federal agencies, voluntarily agreed with the District government to hear protests under the District's procurement system. According to the Board's brief, the Mayor, by letter of March 20, 1985 to the General Counsel of GAO, declined GAO's offer to continue hearing protests for the District.
[7] Relying on Gunnell I, respondent, the Contract Appeals Board, argues that this court does not have jurisdiction over this appeal. Respondent, however, has not challenged the validity of Order 86-65 whereby the old Board is to function as the interim new Board under the 1985 Act. Because that Act provides for this court's review of the Board's final decisions, Gunnell I does not apply.
[8] 27 DCMR § 100.6 (1985) provides:
Any party adversely affected by any action taken by the Chairperson pursuant to § 100.5 who has not stipulated with respect thereto shall be entitled to a reconsideration by the Board, if, within ten (10) days after the Chairperson has transmitted to the party a copy of the order or other notice of the action taken by the Chairperson, the party files with the Board a motion for reconsideration setting forth the grounds therefor. Every motion shall be acted upon by the Board.
[9] The decision of the United States Court of Appeals in Gunnell Construction Co., Inc. v. District of Columbia, 179 U.S.App.D.C. 239, 551 F.2d 425 (1977) (Gunnell II) does not help appellant. In Gunnell II, the court held that a defective quorum of the Contract Appeals Board required a remand for reconsideration of the hearing transcript by a properly constituted panel, including at least one "technical" member. Apparently the "waiver" issue was not raised, either before the district court or on appeal. Thus, the District of Columbia can be said implicitly to have waived its waiver argument. Moreover, there is no indication that the court of appeals premised its ruling on a perceived jurisdictional defect in the Board. In any event, as indicated in the text above, Jones & Artis attacks not the power of the Board to act solely through its Chairman but the authority of the Chairman to act alone in this particular case an issue that contests procedure, not jurisdiction.
[10] The chapter of the Board's rules that include 27 DCMR § 100.5 was amended by 33 D.C.Reg. 24 (1986), a month after the Mayor signed the Procurement Practices Act of 1985. Despite the statutory expansion of the Board's jurisdiction to include protests as well as appeals, see supra note 5, § 100.5 of the Board's rules was not amended to preclude the Chairman from acting alone to decide protests, in contrast with appeals, absent stipulation of the parties. Thus, at least arguably under the interim Board structure, the Chairman alone is authorized in every case to resolve protests an issue we need not decide in view of our ruling that Jones & Artis has waived objection to the Chairman's acting on behalf of the Board.
[11] The Board elaborated, and we agree: "§ 1-1189.3(1) not only establishes how an aggrieved party is to proceed with the Board respecting a matter concerning a solicitation or award of a contract, but it also implicitly defines the term `protest' to mean an action complaining `of a solicitation or award of a contract addressed to the Board by any actual or prospective bidder or offerer, or a contractor who is aggrieved in connection with the solicitation or award of a contract.'"
[12] Under the federal Contract Disputes Act of 1978, Pub.L. No. 95-563, 92 Stat. 2383 (1978) (codified at 41 U.S.C. §§ 601-13 (1982)), boards of contract appeals have jurisdiction only if a contractual relationship exists between the parties. There is an exception to this rule: the Board of Contract Appeals of the Department of Housing and Urban Development has limited jurisdiction to hear bid protests in cases where the Comptroller General has no authority to rule. Gardner Realty and Associates, Inc., HUD BCA No. 80-454-B1, May 6, 1980, 80-2 BCA ¶ 14,512; see 2 R. NASH, JR. & J. CIBINIC, JR., supra at 2050-51, n. 1.
[13] According to Jones & Artis' summary in its reply brief, those cancellation criteria "include inadequate, ambiguous, or otherwise deficient specifications, services that are no longer required, an IFB that does not provide for all factors of cost, the needs of the District can be met less expensively, the bids were not independently arrived at, or the bids did not provide competition to insure reasonable prices."
The D.C. Department of General Services adopted the MMM in 1974; it was "incorporated by reference" in a notice of proposed rulemaking. 20 D.C.Reg. 1095 (1974). In 1985, the MMM was incorporated by reference into the municipal regulations. 27 DCMR § 1000.1 (1985). One author recently has questioned whether the MMM has been properly adopted, an issue we do not address. Splitt, Here's the Fine Print, supra note 4, at 24.
[14] The Board ruled, and argues on appeal, "that the term `final decision' as used in § 1-1189.3(2) does not encompass the determination to cancel an invitation for bids required by § 1-1183.7." In reaching this conclusion the Board has catalogued provisions of the 1985 Act addressing "decisions" and "determinations" and concluded that they are mutually exclusive. It follows, according to the Board, that determinations, unlike decisions, cannot be subject to "appeal." The Council did not provide a definition of "decision" or "determination" in either the text of the statute or in its legislative history. It also is not clear the Council intended that "determinations" could never be appealable "decisions." Even if the Council did intend to exclude "determinations" from the right of appeal, however, one could argue that, while evaluation of the "best interest of the District government" under § 1-1183.7 results in a "determination," the IFB cancellation based on that determination is a "decision." Despite our usual deference to an agency charged with interpreting the statute it administers, we need not resolve these issues, for we have concluded that the critical distinction between a "protest" and an "appeal" under the 1985 Act is the pre-award nature of a protest, not the difference between a "determination" and a "decision."
There are two other issues. The record reflects discussion before the Contract Appeals Board about whether a contractual relationship with the government is necessary before a business has standing to appeal. Jones & Artis contends that it fits the definition of a "contractor" eligible to bring appeals under D.C.Code § 1-1189.4 (1987), even though this case concerns a cancelled bid, not a contract. We need not resolve that issue in determining that petitioner had no basis for an "appeal" and thus that we lack jurisdiction.
Finally, Jones & Artis argues that the Procurement Practices Act of 1985, by setting different deadlines for protests and for appeals, violates the fifth amendment guarantee of equal protection. Resolution of this issue has no bearing on our jurisdiction, but we do note that the two types of deadlines apply equally to all persons.
[1] 33 D.C.Reg. 3006 (1986) (Order 86-65 amending Organization Order No. 9, as amended by Order 82-224).
[2] See 1 D.C.Code Appendix (1978 Supp. V); 30 D.C.Reg. 497 (1983) (Order 82-224 amending Organization Order No. 9).
[3] The court did not request that the parties file supplemental briefs on the issue.
[4] Pub.L. 93-198, Dec. 24, 1973, 87 State. 774, 1 D.C.Code 175-247 (1981). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260534/ | 632 F.Supp. 1078 (1986)
NEUROLOGICAL ASSOCIATESH. HOOSHMAND, M.D., P.A., a Florida Professional Association and Hooshang Hooshmand, M.D., Plaintiffs,
v.
BLUE CROSS/BLUE SHIELD OF FLORIDA, INC., a Florida corporation, Defendant.
No. 85-8724-CIV-ZLOCH.
United States District Court, S.D. Florida.
March 21, 1986.
As Amended April 29, 1986.
*1079 Roy L. Glass, St. Petersburgh, Fla., for plaintiffs.
Robert L. Chesnut, Washington, D.C., and Susan H. Aprill, Asst. U.S. Atty., Miami, Fla., for defendant.
FINAL ORDER
ZLOCH, District Judge.
THIS CAUSE is before the Court upon the following Motions: (1) Defendant's Motion for Reconsideration of the Court's Order of Remand Dated January 10, 1986 Pursuant to Fed.R.Civ.P. 59(e) (DE 13), (2) Plaintiffs' Motion for Contempt (DE 23), (3) Plaintiffs' Motion to Strike Defendants' Petition for Removal (DE 24), (4) Defendant's Motion to Dismiss Pursuant to Rule 12(b)(1) (DE 30).
This action was originally commenced in state court by the filing of a Complaint on November 22, 1985. Plaintiffs are a professional association and the medical doctor who is both the owner and an employee of the professional association. The doctor and his employees provide diagnostic and treatment services in the field of neurology. The Complaint describes injury resulting from the Plaintiffs' participation in the Medicare program. Defendant, BLUE CROSS/BLUE SHIELD, is a Medicare Part B carrier and fiscal intermediary under contract to the United States Department of Health and Human Services to administer the Medicare Part B program for the entire state of Florida. As such, Defendant is responsible for the processing and payment of claims including the determination of coverage and the detection of unusual patterns of practice and suspected fraud. Plaintiffs' relationship with the Medicare program is by way of a Medicare Participating Physician Or Supplier Agreement.
Under that Agreement, the Plaintiffs agreed to accept assignment of Medicare payments for all services covered under Medicare and further agreed that they would not collect for their services from the patient but would rather receive payment directly from Medicare. By letter dated October 31, 1985, Defendant notified the Plaintiffs that an office of the Department of Health and Human Services instructed Blue Cross to immediately suspend payments on all assigned claims submitted by the Plaintiffs. As stated in the letter, which is attached to the Complaint as Exhibit "C", "this action is based on a determination by the Health Care Financing Administration that Medicare claims have been submitted for services which were misrepresented or not rendered." The suspension letter further indicated that Blue Cross would continue to process claims which had been suspended but no payment would be made until a further investigation of the circumstances giving rise to the suspension had been made.
The state court issued a preliminary injunction order which held that Plaintiffs were entitled to a post-suspension hearing pursuant to 42 U.S.C. section 1395y(d)(3). The injunction ordered that such hearing take place no later than January 20, 1986 and that Defendant turn over all information supporting the allegations of fraud or misrepresentation against Plaintiffs by January 8, 1986.
On December 23, 1985, a Petition for Removal was filed in this Court. On January 9, 1986, the Secretary of Health and Human Services, on behalf of Blue Cross, filed an Emergency Motion to Vacate and Dissolve State Court Order and for Emergency Hearing. This Court on January 10, *1080 1986, issued an Order denying that motion and dismissing the Petition for Removal for lack of jurisdiction on the grounds that the government, which was not a party to the state court action, had sought the removal and made the subsequent motion for relief from the state court order, and further that this Court did not have jurisdiction. Subsequently, on January 15, 1986, this Court issued an Order staying its January 10th Order, pending resolution of the Defendant's motion for reconsideration of that Order. Defendant's Motion for Reconsideration will now be considered.
DEFENDANT'S MOTION FOR RECONSIDERATION
This Court has authority to reconsider its January 10th Order to determine whether this is a situation "where, in justice and good conscience relief should be granted from manifest error." First National Bank in Palm Beach v. Langford, 570 F.Supp. 697 (S.D.Fla.1983) quoting Bucy v. Nevada Construction Company, 125 F.2d 213 (9th Cir.1942). For the following reasons, the Court finds that the present motion presents such a situation.
This Court in its January 10th Order, expressed the opinion that the wrong party, i.e., the Secretary of Health and Human Services, had sought removal of this action. That situation has now been clarified. At the hearing on the Motion for Reconsideration, the Justice Department attorney who appeared announced that he was appearing on behalf of Defendant, BLUE CROSS/BLUE SHIELD. This procedure, a government attorney representing the Medicare fiscal intermediary, appears to be identical to the situation that was presented in Peterson v. Blue Cross/Blue Shield of Texas, 508 F.2d 55 (5th Cir.1975). A good deal of confusion could have been avoided had the Government either moved to intervene as a defendant (or moved to have itself substituted as a party defendant) or simply announced that the Justice Department attorneys were appearing on behalf of Blue Cross from the outset. Instead, the Petition for Removal was filed by the Secretary of Health and Human Services, a non-party, on behalf of Blue Cross/Blue Shield of Florida, Inc. The Secretary was not named as a defendant in the original Complaint and, to this date, has not sought by appropriate motion to become a party in this case. Nonetheless, it appears that Defendant Blue Cross is entitled to the relief that the Justice Department seeks for it.
Under the controlling authority of the Peterson case, this action is removable by Blue Cross under 28 U.S.C. Section 1442(a)(1). In Peterson, the court addressed the removability of two actions. In one of those actions, the only defendants were Blue Cross/Blue Shield of Texas and two other private corporations. In addressing the removability issue in both cases, the court held that it was "indisputable" that the defendants fell within the scope of 28 U.S.C. section 1442(a)(1) which allows for removal by a defendant who is a "officer of the United States or any agency thereof, or persons acting under him," and the defendants were "acting under color of such office." The Court notes that the Defendant has retreated from its former position that this case is also removable under the general removal jurisdiction statute, 28 U.S.C. section 1441.
DEFENDANT'S MOTION TO DISMISS
It is clear that the Complaint in this case seeks relief under the Medicare Act. The gist of Plaintiffs' claims is that the Act and regulations promulgated thereunder, as well as notions of constitutional due process, entitle Plaintiffs to a due process hearing prior to, or immediately upon, the suspension that occurred in this case. A review of the Complaint as well as Plaintiffs' Memorandum of Law in Support of Demand for Preliminary Injunctive Relief, which was filed in the state court action, confirms that Plaintiffs' action is grounded upon the Medicare statute. Indeed, the state court order granting the preliminary injunction relies exclusively on a portion of the Act, section 1395y(d)(3), and three cases interpreting it, as authority for the relief *1081 issued. Klein v. Heckler, 761 F.2d 1304 (9th Cir.1985); Ram v. Heckler, 617 F.Supp. 612 (W.D.N.C.1985); Eisenberg v. Matthews, 420 F.Supp. 1274 (E.D.Pa.1976).
Plaintiffs' contention that this is essentially an action for breach of contract is of no avail. The contract in this case is a standard form used by the government to make agreements with medical providers who participate in the Medicare program under the Medicare law and regulations. It is simply the Government's mechanism to carry out the Medicare Act and the regulations.
The United States Supreme Court has determined that when a claim is made seeking the payment of benefits under the Act, it should be treated as a "claim arising under" the Medicare Act. Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984). The Court was clear that the "claim arising under" language of the statute should be construed broadly. Such a broad construction reinforces the conclusion that the present action is, in essence, an action under the Medicare Act.
Because this is an action under the Medicare Act, the state court had no jurisdiction. Claims such as this one are reviewable, if at all, under 42 U.S.C. section 405(g). Section 405(g) provides for judicial review only in federal court. Where a review statute vests jurisdiction to review administrative action in a particular court, that statute automatically precludes jurisdiction in any other court over such actions. Macauley v. Waterman Steamship Corporation, 327 U.S. 540, 66 S.Ct. 712, 90 L.Ed. 839 (1946).
Under the doctrine of derivative jurisdiction, if a state court lacks jurisdiction over a matter, then a federal court to which the action is removed must dismiss the Complaint even though the federal court would have had jurisdiction if the case had originally been filed there. McRory v. Hobart Brothers, 732 F.2d 1533 (11th Cir.1984); Armstrong v. Alabama Power Company, 667 F.2d 1385 (11th Cir.1982). Thus, if the case was improperly filed in state court, it should be dismissed in this Court. Cummings v. United States, 648 F.2d 289, 291-292 (5th Cir.1981). This Court will, therefore, dismiss this action under the doctrine of derivative jurisdiction. By doing so, this Court does not reach the issue of whether this action could properly be brought in federal district court in the first instance. Compare United States v. Erika, 456 U.S. 201, 102 S.Ct. 1650, 72 L.Ed.2d 12 (1982) (no jurisdiction over Medicare Part B claims) with Klein v. Heckler, 761 F.2d 1304 (9th Cir.1985), (judicial review of Medicare Part B fraud determinations allowed under section 405(g)).
In light of the foregoing, Plaintiff's Motion to Strike Defendant's Petition for Removal will be denied. Plaintiff's Motion for Contempt will be denied as well. The usual rule is that an injunction must be obeyed even if wrongfully issued. However, for that rule to apply, the court issuing the injunction must have jurisdiction over the subject matter. The rule has been stated by the United States Supreme Court thusly:
"An injunction duly issuing out of a court of general jurisdiction with equity powers, upon pleadings properly invoking its action, and served upon persons made parties therein and within the jurisdiction, must be obeyed by them, however erroneous the action of the court may be, even if the error be in the assumption of the validity of a seeming, but void law going to the merits of the case.
United States v. United Mine Workers, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1947). (Emphasis added). In the present case, the jurisdiction of the state court was not properly invoked. Therefore, the usual rule requiring adherence to an erroneously issued injunction does not apply.
For the foregoing reasons, it is
ORDERED AND ADJUDGED as follows:
1. Defendant's Motion for Reconsideration of the Court's Order of Remand (DE 13) be and the same is GRANTED.
*1082 2. Plaintiffs' Motion for Contempt (DE 23) be and the same is DENIED.
3. Plaintiffs' Motion to Strike Defendant's Petition for Removal (DE 24) be and the same is DENIED.
4. Defendant's Motion to Dismiss Pursuant to Rule 12(b)(1) (DE 30) be and the same is GRANTED.
5. This cause be and the same is hereby dismissed, without prejudice. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260538/ | 632 F.Supp.2d 308 (2009)
John MAGEE, Plaintiff,
v.
METROPOLITAN LIFE INSURANCE COMPANY, Defendant.
No. 07 Civ. 8816 (WHP).
United States District Court, S.D. New York.
June 22, 2009.
*311 Jason A. Newfield, Esq., Frankel & Newfield, P.C., Garden City, NY, for Plaintiff.
Ian S. Linker, Esq., Metropolitan Life Insurance Company, Long Island City, NY, Allan Michael Marcus, Esq., Lester, Schwab, Katz and Dwyer LLP, New York, NY, for Defendant.
MEMORANDUM & ORDER
WILLIAM H. PAULEY III, District Judge:
Plaintiff John Magee ("Magee") brings this action against Defendant the Metropolitan Life Insurance Company ("Met-Life") pursuant to Section 1132 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., challenging MetLife's denial of his claim for long-term disability benefits. MetLife counterclaims to recover an overpayment of benefits. Both parties move for summary judgment. For the following reasons, this Court grants in part and denies in part both motions. MetLife's decision denying benefits is vacated and Magee's claim is remanded to MetLife for reconsideration. MetLife's application to recover the overpayment of past benefits arising after the retroactive award of Social Security benefits is also granted. In the exercise of its discretion, this Court awards reasonable attorney's fees to Magee, which may be offset by MetLife against any unreimbursed overpayment of past long-term disability benefits.
BACKGROUND
The following facts are undisputed unless otherwise noted. Magee is a forty-nine-year-old man. (Defendant's Rule 56.1 Statement dated Sept. 2, 2008 ("Dft. 56.1 *312 Stmt.") ¶ 13.) He worked as a quality engineer in the Government Services division of the Eastman Kodak Company ("Kodak") from 1988 until 2003. (Dft. 56.1 Stmt. ¶ 14.) Kodak offered its employees a Long-Term Disability Plan (the "Kodak LTD Plan"), which is a self-funded employee welfare plan governed by ERISA. (Dft. 56.1 Stmt. ¶¶ 3, 5-6, 12.) Magee participated in the Kodak LTD Plan. (Dft. 56.1 Stmt. ¶ 13.) MetLife administers the Kodak LTD Plan, and has "full discretionary authority" to determine eligibility and award benefits. (Dft. 56.1 Stmt. ¶¶ 8-10.) The Kodak LTD Plan provides that a participant is "disabled" when "[a]s a result of [their] condition, [they] are totally and continually unable to engage in gainful work.... `Gainful work' is paid employment for which [they] are (or [they] become) reasonably qualified by education, training, or experience, as determined by MetLife." (Dft. 56.1 Stmt. ¶ 11.)
The Kodak LTD Plan also provides that benefits will be reduced by any Social Security Disability Income benefits, including any back payment of Social Security benefits. (Dft. 56.1 Stmt. ¶ 12.) Participants are obligated to repay any overpayment by the Kodak LTD Plan. (Dft. 56.1 Stmt. ¶ 12.)
I. The Initial Claim
Magee filed a claim for long-term disability benefits on July 24, 2004, asserting that he was disabled because he suffered from Chronic Fatigue Syndrome ("CFS"). (ML0544-45, ML0409[1]) On September 1, 2004, Magee's physician, Dr. David Bell, submitted MetLife's "Attending Physician's Statement of Functional Capacity." Dr. Bell listed his primary diagnosis of CFS and secondary diagnosis of depression. (ML0411.). In the Functional Capacity Assessment, he noted that Magee's medical condition resulted in a "Severe Limitation" on his ability to walk, stand, assume a cramped position, reach, climb, balance, bend, and give concentrated visual attention. (ML0412.)
On September 20, 2004, MetLife awarded disability benefits through December 20, 2004, finding that the medical records were "supportive of [the] severity of condition," but noting that there was "no clear objective finding." (ML0008.) MetLife then conducted an additional investigation into Magee's mental condition. (ML0008-ML0009.) In October 2004, MetLife contacted Magee's psychiatrist, Dr. Alice Tariot, and his counselor, Carolyn Cerame. (ML0014.) On November 1, 2004, Dr. Tariot opined that Magee suffered from major depression and CFS (ML0015), and that Magee's negativism was a result of his serious illness and loss of function. (ML0403.)
MetLife had two consultants evaluate Magee's file. The first, Dr. Amy Hopkins, a Board-certified internal and occupational medicine physician, found that Magee's diagnosis resulted from "a variety of self-reported [symptoms] with no objective support by examinations or diagnostic test results." (ML0386.) Dr. Hopkins also found that the file did "not objectively support the presence of any condition of a nature or severity to prevent [Magee] from performing the material duties of his own or any occupation on a full-time basis, without restrictions or limitations." (ML0386.) In response, Magee's physician, Dr. Bell, countered that Magee meets the Centers for Disease Control ("CDC") criteria for CFS. He also suggested that MetLife conduct a comprehensive work and function evaluation and an exercise *313 physiology test. According to Dr. Bell, if the latter was "done on two consecutive days, [it would be] likely to show a marked impairment of [Magee's] aerobic capacity and this may help to document his disability." (ML0397.) MetLife never responded to Dr. Bell's suggestion.
MetLife's second independent physician consultant, Dr. Ernest Gosline, a psychiatrist, opined that Magee's depression was a disabling impairment that prevented him from working. (ML0367.) Dr. Gosline agreed that CFS was Magee's primary condition and that depression was a secondary condition. (ML0366-ML0367.) Dr. Gosline found that Magee's impairments were substantiated by objective clinical findings as well as self-reported information. (ML0366.) Acting on Dr. Gosline's opinion, MetLife approved Magee's claim on December 18, 2004. But MetLife did not explain to Magee the basis for its approval. (ML0020.) In its records, MetLife noted that the "[d]ocumentation is limited for the Chronic Fatigue Syndrome." (ML0020.)
II. Termination of Benefits
In June 2005, MetLife requested an update regarding Magee's condition. Dr. Bell informed MetLife that Magee's CFS symptoms continued to be very severe. (ML0347.) He submitted data from three recent questionnaires used in CFS diagnosis: (1) a Krupp fatigue score of 56; (2) a modified Karnofsky score of twenty-five percent, and (3) an SF-36 questionnaire. According to Dr. Bell, the Krupp fatigue and modified Karnofsky scores both were in the disabled range. (ML0347.) As for the SF-36, which Dr. Bell described as "an extremely validated indicator of overall disability," it showed marked disability. (ML0347.) Dr. Bell pointed out that according to the SF-36, Magee's emotional functioning was normal, which suggested that he had a physical, not a mental disability. (ML0347.) Dr. Bell administered the SF-36, Krupp Fatigue Questionnaire, and modified Karnofsky tests in May 2004, July 2004, December 2005, and February 2006 with consistent results. (ML0427-ML0434; Plaintiffs 56.1 Statement dated Sept. 2, 2008 ¶¶ 18-23, 27-29.)
At MetLife's request, in February 2006, Magee's therapist, Carolyn Cerame, submitted a letter informing MetLife that Magee had only been able to see her once in the past year, but that "[she had] been practicing for twenty years, and [she had] never had a client who made a more heroic effort[, and that] ... [h]is pain is excruciating." (ML0334.) Dr. Bell also submitted the "MetLife Chronic Fatigue Initial Function Assessment" opining that Magee still had "marked disability." (ML0315-ML0318.) In April 2006, Dr. Tariot submitted her assessment, noting that his mood was stable and improved and that Magee was coping better with his illness. (ML0296-ML0297.)
At the same time, in March 2006, an Administrative Law Judge ("ALJ") awarded Magee full Social Security disability benefits, prospectively and retroactively. (ML0303-ML0308.) The ALJ determined that Magee had several "medically determinable `severe' impairments: fibromyalgia, chronic fatigue syndrome, orthostatic hypotension, hypovolumia, and an affective disorder." (ML0304.) The ALJ noted that Dr. Tariot "agreed with Dr. Bell that the claimant's depression was secondary to physical pain and illness." (ML0304.) The ALJ found that Magee's assertions were consistent with the medical findings and were supported by the opinions of the examining and treating physicians. (ML0305.) The ALJ also found Magee credible "in light of the objective medical evidence, subjective complaints, treating physician opinions and [Magee's] good *314 work history." (ML0305.) In conclusion, the ALJ found that Magee was completely disabled and lacked the residual capacity to perform even sedentary work. (MLQ305-ML0306.) Soon after the Social Security Disability decision, MetLife requested reimbursement from Magee for its overpayment of long-term disability benefits in the amount of $51,886.27. (ML0280-ML0281.) Magee reimbursed MetLife for the bulk of the overpayment, but still owes $16,831.21. (Dft. 56.1 Stmt. ¶ 33.)
After reviewing Dr. Tariot's submission in April 2006, MetLife determined that Magee's depression was no longer severe enough to be disabling. With regard to the CFS diagnosis, MetLife sent his file to another independent physician consultant, Dr. Dennis Payne, a rheumatologist. Dr. Payne works for Elite Physicians Ltd. a subsidiary of Network Medical Review ("NMR").[2] (ML0269.) Dr. Payne noted that Magee's evaluations by his physicians "have been extensive and appropriate." (ML0270.) Dr. Payne conferred with Magee's physician Dr. Bell. Dr. Bell acknowledged that there were "no objective findings of joint or muscle damage" nor had he identified "any objective musculoskeletal problem." (ML0271.) Thus, Dr. Payne opined that "[t]he objective medical record presently supports that Mr. Magee is capable of performing unrestricted work duties ...", and that "there are no restrictions or limitations that are supported in the available medical data." (ML0271.) He further stated that the CFS diagnosis was "based entirely upon subjective symptomatology without any objective findings on examination, laboratory testing, imaging data, or other specific objective studies to evaluate conventional disease." (ML0271.) However, he noted that "the `syndrome' designation is made in that this condition is a constellation of symptoms without any histopathological correlate[, and] [w]ith that in mind, there is a consistency with the clinical evidence (or lack thereof) with the stated diagnosis." (ML0271.)
Dr. Bell disagreed with Dr. Payne's assessment of Magee. Thereafter, Dr. Payne conceded that a diagnosis of CFS "is a syndrome (constellation of symptoms) rather than an illness or disease as a result of there being no histopathological correlate specific for the condition not present in controls." (ML0225.) Nevertheless, Dr. Payne declined to change his opinion, stating that "even with a syndrome, as with a well defined illness or disease, there must be objective measures that support functional restrictions or limitations before limitations can be placed on an individual." (ML0225.)
On July 20, 2006, MetLife notified Magee that after a "thorough" review of his file, MetLife was terminating his longterm disability benefits. (ML0218.) It described Dr. Payne's findings and concluded that "based on Dr. Payne's file review and the lack of clinical evidence to support an impairment, medical [sic.] no longer supports the existence of a totally disabling condition preventing you from performing your occupation you are qualified for based on you education, training or experience." (ML0219.) MetLife indicated that Magee's file lacked "clinical evidence such as office visit notes and physical exam findings to support an ongoing severity of impairment." (ML0219.)
III. Administrative Appeal
Magee appealed MetLife's decision in March 2007. (Dft. 56.1 Stmt. ¶ 29.) Prior *315 to the appeal, in December 2006, Magee asked that MetLife provide a definition of "what would constitute sufficient objective evidence to confirm [his] diagnosis of Chronic Fatigue Syndrome and the functional impairment that leads to my disability[,]" because he could not "find any objective diagnostic test that is suggested for disability confirmation." (ML0206.) MetLife never responded to this request.
In his appeal, Magee argued that Dr. Hopkins overlooked certain orthostatic hypotension and blood volume tests, and that Dr. Payne ignored the blood volume testing, orthostatic hypotension test, Krupp Fatigue Severity Scale test, SF-36 Short Form Health Status, and Modified Karnofsky testing. (ML0134, ML0138.) Magee also argued that Dr. Payne's requirement of objective indications of CFS was unreasonable. (ML0137.) Finally, Magee noted the numerous errors in MetLife's documentation. (ML0139.)
On March 8, 2007, Dr. Bell submitted additional documentation to support Magee's appeal including: (1) additional explanation about blood volume test results that showed that Magee suffers from idiopathic hypovolumia; (2) the results of a February 6, 2007 MRI scan of Magee's brain, which showed abnormal non-specific periventricular hyperintense white signals; (3) the results of a March 6-7, 2007 exercise test which demonstrated excellent effort but showed oxygen uptake much lower than that of a normal person; and (4) documentation showing low rennin levels in Magee's blood. (ML0195.) Dr. Bell also referenced published studies identifying each of these results as potential markers of CFS. (ML0194-ML0195.) He also explained the diagnostic criteria he applied, the basis for those criteria, and his experience in diagnosing and treating CFS. (ML0194.) Finally, Dr. Bell explained that he did not believe there was any evidence that Magee's symptoms were the result of depression. (ML0194.)
MetLife submitted Magee's file to a third reviewer, Dr. Joel Maslow, an infectious disease specialist, who also worked for NMR. He responded on March 22, 2007, concluding that Magee was not disabled. (ML0109-ML0113.) Dr. Maslow opined that Magee's claims of pain and cognitive dysfunction were not supported by objective findings from physical examination or neuro-psychiatric testing, and that the objective evidence of normal musculoskeletal findings and no cognitive dysfunction do not support his symptoms. (ML0112-ML0113.) Dr. Maslow stated that "a single SF-36 cannot be interpreted in isolation nor is there indication that this practitioner has experience to deliver or interpret this test." (ML0112.) As for the blood volume test, Dr. Maslow opined that the findings were "in isolation and without clear symptoms of orthostatsis." (ML0112.) Dr. Maslow also discounted the blood volume test because the report mistakenly referred to Magee as a female. (ML0111.) With regard to the orthostatic hypotension measurements, Dr. Maslow noted the limited number of measurements, claimed that a July 1, 2003 test was inconsistent with a July 7, 2003 reporting letter, and opined that the method of measurement used was incorrect. (ML0112.) While Dr. Maslow conceded "this was out of [his] area of expertise," he nevertheless opined "[t]he diagnosis of CFS is a diagnosis of exclusion, specifically requiring the exclusion of a diagnosis of depression," (ML0113), and suggested without concluding anything that Magee's symptoms were the result of depression rather than CFS. (ML0112.) Dr. Maslow omitted any reference to the two-day exercise test, the MRI scan, or the abnormal rennin levels. Dr. Maslow opined that "[f]rom an infectious disease perspective, *316 Mr. Magee does not meet the criteria for this syndrome." (ML0113.)
On April 13, 2007, Dr. Bell responded to Dr. Maslow's report submitting a copy of his Curriculum Vitae ("C.V."). (ML0087-ML0101.) The C.V. shows that while Dr. Bell is a board certified pediatrician with a practice in primary care pediatrics and family medicine, he also has extensive clinical and research experience with CFS. (ML0090-ML0091.) It also shows that Dr. Bell has (1) advised and chaired CFS committees at the U.S. Department of Health and Human Services and the National Institutes of Health (ML0090-ML0091); (2) been invited more than eighty time to lecture on CFS; (3) been invited to write reviews about CFS (including several on diagnosis of CFS) thirteen times; and (4) written thirteen published papers and five books about CFS including the book, "The Doctor's Guide to Chronic Fatigue Syndrome," published in 1994. (ML0091-ML0099.)
On May 7, 2007, MetLife denied Magee's appeal. (ML0078-ML0083.) Met-Life first concluded based on Dr. Bell's opinion and because Magee was no longer seeing a mental health professional that Magee was no longer disabled due to depression. Second, MetLife determined that "although [Magee has] some medical conditions, these would not prevent [him] from performing [his] own occupation." (ML0082.) Specifically, MetLife found that "[Magee's] file lacked medical evidence of clinical findings that supported a severity of impairment that resulted in functional limitations." (ML0082.) Met-Life continued that "[s]ince Chronic Fatigue is a diagnosis of exclusion, [his] file was reviewed from an infectious disease perspective and [he] did not meet the criteria for this syndrome." (ML0082.) MetLife concluded that Magee did not have a disability that was "substantiated by the providers with comprehensive and specific information." (ML0082.) This action ensued.
DISCUSSION
I. Legal Standard
Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden of demonstrating the absence of any genuine dispute as to a material fact rests with the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). In determining whether there is a genuine issue as to any material fact, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in [its] favor." Liberty Lobby, 477 U.S. at 255, 106 S.Ct. 2505.
II. Standard of Review Under ERISA
Where a benefit plan gives the administrator authority to determine eligibility for benefits or to construe the terms of the plan, the administrator's decision is reviewed for abuse of discretion. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). "Under [this] deferential standard, a court may not overturn the administrator's denial of benefits unless its actions are found to be arbitrary and capricious, meaning `without reason, unsupported by substantial evidence or erroneous as a matter of law.'" McCauley v. First Unum Life Ins. Co., 551 F.3d 126, 132 (2d Cir.2008) (quoting Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir.1995)); see also Metro. Life Ins. *317 Co. v. Glenn, ___ U.S. ___, 128 S.Ct. 2343, 2348, 171 L.Ed.2d 299 (2008). "Substantial evidence is `such evidence that a reasonable mind might accept as adequate to support the conclusion reached by the [administrator and] ... requires more than a scintilla but less than a preponderance.'" Celardo v. GNY Auto. Dealers Health & Welfare Trust, 318 F.3d 142, 146 (2d Cir.2003) (quoting Miller v. United Welfare Fund, 72 F.3d 1066, 1072 (2d Cir. 1995)).
"In reviewing the administrator's decision deferentially, a district court must consider whether the decision was based on a consideration of the relevant factors." Miller, 72 F.3d at 1072 (internal quotation marks omitted). Thus, courts must take "account of several different, often case-specific, factors, reaching a result by weighing them all together." Glenn, 128 S.Ct. at 2351. Courts undertaking arbitrary and capricious review should not "function as substitute plan administrators," and should therefore ordinarily limit their review to the administrative record. Miller, 72 F.3d at 1071. As one court explained:
[A]lthough limited, review ... under the arbitrary and capricious standard is more than an [sic.] perfunctory review of the factual record in order to determine whether that record could conceivably support the decision to terminate benefits. Rather, such a review must include a "searching and careful" determination as to whether the conclusion reached by the administrator in view of the facts before it was indeed rational and not arbitrary.
Rizk v. Long Term Disability Plan of Dun & Bradstreet Corp., 862 F.Supp. 783, 789 (E.D.N.Y.1994).
Finally, "[n]otwithstanding the deferential nature of the `arbitrary and capricious' standard, courts have held that ERISA guarantees that the plan's administrator, the fiduciary, must provide full and fair review of the decision to deny the claim." Neely v. Pension Trust Fund of the Pension Hospitalization & Benefit Plan of the Elec. Indus., No. 00 Civ. 2013(SJ), 2004 WL 2851792, at *8 (E.D.N.Y. Dec. 8, 2004); see also Marasco v. Bridgestone/Firestone, Inc., No. 02 Civ. 6257 (DLI), 2006 WL 354980, at *4 (E.D.N.Y. Feb. 15, 2006). "The purpose of [the full and fair review] requirement is to provide claimants with enough information to prepare adequately for further administrative review or an appeal to the federal courts," Juliano v. The Health Maintenance Org. of N.J., Inc., 221 F.3d 279, 287 (2d Cir.2000) (citation and quotation marks omitted), and "to protect a plan participant from arbitrary and unprincipled decision making," Grossmuller v. Int'l Union, UAW, Local 813, 715 F.2d 853, 857 (3d Cir.1983). Courts must be mindful that "[t]he statute and the regulations were intended to help claimants process their claims efficiently and fairly [and] they were not intended to be used ... as a smoke screen to shield [the benefits plan] from legitimate claims." Juliano, 221 F.3d at 287 n. 1 (quoting Richardson v. Cent. States Se. & Sw. Areas Pension Fund, 645 F.2d 660, 665 (8th Cir.1981)).
III. Review of MetLife's Decision
A. Objective Evidence
While "[t]he very concept of proof connotes objectivity," and so "it is hardly unreasonable for the administrator to require an objective component of such proof," Maniatty v. Unumprovident Corp., 218 F.Supp.2d 500, 504 (S.D.N.Y.2002), "the subjective element of pain is an important factor to be considered in determining disability," Connors v. Conn. Gen. Life Ins. Co., 272 F.3d 127, 136 (2d Cir. *318 2001). Moreover, "[c]hronic fatigue syndrome, like fibromyalgia, poses unique issues for plan administrators, since for both conditions, `[i]ts cause or causes are unknown, there is no cure, and, of greatest importance to disability law, its symptoms are entirely subjective.'" Williams v. Aetna Life Ins. Co., 509 F.3d 317, 322 (7th Cir.2007) (quoting Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 916 (7th Cir.2003)); Mitchell v. Eastman Kodak Co., 113 F.3d 433 (3d Cir.1997) (same); see also Green-Younger v. Barnhart, 335 F.3d 99, 108 (2d Cir.2003) ("Moreover, a growing number of courts, including our own, ... have recognized that fibromyalgia is a disabling impairment and that there are no objective tests which can conclusively confirm the disease." (collecting cases)). Indeed, "diagnosing CFS is not sport for the short-winded." Cook v. Liberty Life Assurance Co. of Boston, 320 F.3d 11, 21 (1st Cir.2003) (citation and quotation marks omitted). This is because "`there is no `dipstick' laboratory test for [CFS].'" Cook, 320 F.3d at 21 (quoting Sisco v. HHS, 10 F.3d 739, 744 (10th Cir. 1993)).
However, "[a] distinction exists ... between the amount of fatigue or pain an individual experiences, which ... is entirely subjective, and how much an individual's degree of pain or fatigue limits his functional capabilities, which can be objectively measured." Williams, 509 F.3d at 323; see also Boardman v. Prudential Ins. Co. of Am., 337 F.3d 9, 16 n. 5 (1st Cir.2003) ("While the diagnosis of chronic fatigue syndrome and fibromyalgia may not lend themselves to objective clinical findings, the physical limitations imposed by the symptoms of such illnesses do lend themselves to objective analysis."); Cook v. N.Y. Times Co. Long-Term Disability Plan, No. 02 Civ. 9154(GEL), 2004 WL 203111, at *4 (S.D.N.Y. Jan. 30, 2004) ("It is ... reasonable to insist on some objective measure of claimants' capacity to work, so long as that measure is appropriate.").
MetLife apparently rejected Magee's claim because Magee failed to provide "objective evidence," establishing that he was suffering from a disabling impairment. However, in a Catch-22, MetLife acknowledges that there is no test for CFS. This circular reasoning suggests a flawed process that was arbitrary and capricious.[3]See Sansevera v. E.I. DuPont de Nemours & Co., 859 F.Supp. 106, 113 (S.D.N.Y.1994) ("When confronted with an illness that is admittedly difficult to diagnose, it is unreasonable to demand evidence of a specific kind of impairment after experts have concluded that no definitive test for CFS has yet been discovered.").
B. Notice Provided
While requiring plan participants to submit evidence of objective measures of functional limitations may be reasonable, participants must be informed of those requirements. See Cook, 2004 WL 203111, at *4. ERISA requires an administrator to inform plan participants of the information it seeks and the criteria to be applied. See Juliano, 221 F.3d at 287 ("In simple English, what [ERISA's regulations] call[ ] for is a meaningful dialogue between ERISA plan administrators and their beneficiaries.") (quoting Booton v. *319 Lockheed Med. Benefit Plan, 110 F.3d 1461, 1463 (9th Cir.1997)).
MetLife's letters were ambiguous as to what MetLife sought from Magee. For example, MetLife told Magee in its final denial that his file "lacked medical evidence of clinical findings that supported a severity of impairment that resulted in functional limitations." It is unclear what constitutes "medical evidence of clinical findings" or how they would support "a severity of impairment", and how that in turn would result in functional limitations. See Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 870 (9th Cir.2008) (describing a similarly inadequate MetLife denial letter and noting that "MetLife cannot be faulted for taking [the] instructions [for a meaningful dialog] too seriously."). The next sentence in that final denial letter is equally vague. Met-Life acknowledges that CFS is a diagnosis of exclusion, but then states that Magee "does not meet the criteria for the syndrome." However, neither MetLife nor its consulting physicians ever explained what criteria they were applying, or what evidence would be necessary. See Oliver v. Coca Cola Co., 497 F.3d 1181, 1197 (11th Cir.2007), vacated in other part pending reh'g, 506 F.3d 1316, adhered to on reh'g, 546 F.3d 1353 (11th Cir.2008) ("Indeed, it is unclear what additional `objective' evidence of his pain [claimant] could have provided ... [t]ellingly, [the plan administrator] never identified what sort of `objective' evidence it sought."). Accordingly, MetLife's inadequate notice is further indication that its decision was arbitrary and capricious.
C. Evidence Considered
MetLife relies on the independent physician reviews by Dr. Payne and Dr. Maslow to support its decision. However, both of these reports are seriously flawed.[4] For example, Dr. Payne agreed that Magee met the criteria for CFS, but then opined that there was no objective evidence to support his claims that he was in pain. However, if Magee suffered from CFS, that would be a source of his pain. Also, Dr. Payne did not consider the hypovolumia or orthostatic hypotension evidence in Magee's file, nor did he have an opportunity to consider the objective evidence that Magee submitted to support his appeal. Dr. Payne also did not have the opportunity to review the results of the two-day exercise test that, according to Dr. Bell, showed Magee's substantially impaired aerobic capacitya finding that might objectively document that Magee suffered functional impairments that render him unable to work.
Dr. Maslow's report can be characterized as shoddy and incomplete. First, he ignored the MRI and exercise test, without explanation. Second, Dr. Maslow arbitrarily disregarded other evidence like the blood volume test. Dr. Maslow jettisoned that evidence solely because of a typographical error in the report that described Magee as a "female". He also disregarded the July 1, 2003 orthostatic intolerance test claiming it was inconsistent with a July 7, 2003 reporting letter. However, a comparison of the orthostatic intolerance testing (ML0471) and the letter (ML0448) shows they are entirely consistent. While Dr. Maslow stated that one SF-36 is inadequate, he ignored that Magee took the SF-36 and other fatigue questionnaire tests on three separate occasions with consistent results. Dr. Maslow also opined that none of the evidence submitted *320 "standing alone" could support a finding that Magee was suffering from a disabling impairment. However, because there is no single "dipstick" test to diagnose CFS, dismissing a test because "standing alone" it does not establish CFS is irrational. Moreover, Dr. Maslow fails to explain how the blood volume test, abnormal brain MRI, SF-36, modified Karnofsky score, Krupp Fatigue and exercise test taken together fail to establish that Magee suffered from CFS.
Finally, MetLife's decision to terminate Magee's benefits because he was no longer depressed is contradicted by their own consultant's conclusion that Magee's pain was the result of depression, not CFS. Moreover, Dr. Maslow's opinion is inconsistent with Dr. Tariot and Dr. Gosline, the two psychiatrists who considered Magee's the case. Thus, there are serious flaws in the evidence on which MetLife relies. See Buffonge v. Prudential Ins. Co. of Am., 426 F.3d 20, 30 (1st Cir.2005) ("An administrator's decision must be reasoned to survive arbitrary and capricious review ... and we cannot say that a decision based on multiple pieces of faulty evidence was reasoned."); see also Oliver, 497 F.3d at 1199 ("By relying on [the independent physician consultant's] flawed peer review as a basis for denying [claimant's] LTD benefits claim and by failing to review relevant medical evidence that supported [claimant's] claim, [the plan administrator] acted arbitrarily and capriciously."); Neely, 2004 WL 2851792, at *10 ("[T]he plan's fiduciary must consider all pertinent information reasonably available to him.").
D. Social Security
While "the [Social Security Administration's] determination [does] not bind either the ERISA Plan or the district court[,] it does not follow that the district court [is] obligated to ignore the SSA's determination ...." Paese v. Hartford Life Ins. Co., 449 F.3d 435, 442-43 (2d Cir.2006); see also Billinger v. Bell Atl. Corp., 240 F.Supp.2d 274, 285 (S.D.N.Y. 2003). Here, MetLife failed to even consider Magee's successful Social Security determination, which found Magee's subjective complaints credible and supported by objective evidence. MetLife overlooked the Social Security proceeding despite the fact that the Kodak LTD Plan required Magee to apply for those benefits, which substantially reduced Kodak's financial obligations. See Ladd v. ITT Corp., 148 F.3d 753, 756 (7th Cir.1998) (noting the failure to consider Social Security findings that reduce a plan's financial obligations "cast additional doubt on the adequacy of the[ ] evaluation of [Plaintiff's] claim"); see also Mikrut v. Unum Life Ins. Co. of Am., No. 03 Civ. 1714(SRU), 2006 WL 3791417, at *34-35 (D.Conn. Dec. 21, 2006). MetLife now points to certain facts that were rejected by the ALJ. However, this Court cannot consider MetLife's post-hoc rationalizations when it failed to consider the Social Security determination. See Juliano, 221 F.3d at 287 ("We will not permit ERISA claimants denied the timely and specific explanation to which the law entitles them to be sandbagged by after-thefact plan interpretations devised for purposes of litigation."). Thus, MetLife's failure to even consider the findings of the Social Security Administration further supports a finding of arbitrariness. See Glenn, 128 S.Ct. at 2352.
E. Treating Physician
"[C]ourts have no warrant to require administrators automatically to accord special weight to the opinions of a claimant's physician; nor may courts impose on plan administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician's explanation." Black & Decker *321 Disability Plan v. Nord, 538 U.S. 822, 834, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003). However, "[p]lan administrators ... may not refuse to credit a claimant's reliable evidence, including the opinions of a treating physician." Nord, 538 U.S. at 834, 123 S.Ct. 1965.
While MetLife was not required to credit Dr. Bell's conclusions, its refusal to explain why it was crediting some of his opinions and not others suggests arbitrary decision making. For example, MetLife relied on Dr. Bell's conclusion that Magee was no longer depressed as a basis to terminate his benefits but refused to credit any of his other conclusionswithout explanation. See Glenn v. MetLife Ins. Co., 461 F.3d 660, 674 (6th Cir.2006) aff'd Glenn, ___ U.S. ___, 128 S.Ct. 2343 ("In denying benefits, [MetLife] offered no explanation for crediting a brief form filled out by [the participant's doctor] while overlooking his detailed reports."). Thus, this further suggests that MetLife's decision is arbitrary.
F. Summary
Weighing the factors discussed above, MetLife's erroneous objective evidence requirement, its inadequate notice, the flawed evidence MetLife relied on, the failure to consider the objective evidence Magee presented, the failure to consider Social Security's positive decision, and the inconsistent crediting of opinionsthis Court finds that MetLife's decision was arbitrary and capricious. Accordingly, Magee's motion for summary judgment vacating MetLife's benefits decision is granted and MetLife's motion for summary judgment upholding it is denied.
IV. MetLife's Request for Reimbursement
The Kodak LTD Plan provides that any benefits payable under the plan must be offset by Social Security disability payments, and participants must repay any overpayments based on retroactive awards of benefits. ERISA protects the administrator's right to obtain equitable relief to enforce the terms of the Kodak LTD Plan. See 29 U.S.C. § 1132(a)(3)(B); Aitkins v. Park Place Entm't Corp. Employee Benefit Plan, No. 06 Civ. 481(JFB), 2008 WL 820040, at *24 (E.D.N.Y. Mar. 25, 2008).
Magee signed a Reimbursement Agreement, requiring him to make retroactive payments for benefits paid by the Social Security Administration. He has returned a portion of this overpayment, but is obligated to remit the remaining amount to MetLife. Accordingly, MetLife's motion for summary judgment on its counterclaim is granted. However, as provided below that amount may be offset by the reasonable attorney's fee which this Court awards to Magee.
V. Remedy
A. Remand
"[I]f upon review, a district court concludes that the [Plan Administrator's] decision was arbitrary and capricious, it must remand to the [Plan Administrator] with instructions to consider additional evidence unless no new evidence could produce a reasonable conclusion permitting a denial of the claim or remand would otherwise be a useless formality." Miller, 72 F.3d at 1071 (internal quotations omitted); see also Zuckerbrod v. Phoenix Mut. Life Ins. Co., 78 F.3d 46, 51 n. 4 (2d Cir.1996) (remand of an ERISA action seeking benefits is inappropriate "where the difficulty is not that the administrative record is incomplete but that a denial of benefits based on the record was unreasonable."). While this is a close case, because some of the evidencee.g., the exercise test MRIwas *322 never even considered by MetLife, this Court remands this case for reconsideration. To insure effective review, Magee may supplement his file with any additional evidence and MetLife shall treat Magee's claim as a new claim affording no deference to the initial adverse determination. See Cook, 2004 WL 203111, at *20.
B. Attorney's Fees
"In an ERISA action, `the court in its discretion may allow a reasonable attorney's fee and costs of action to either party.'" Krizek v. CIGNA Group Ins., 345 F.3d 91, 102 (2d Cir.2003) (quoting 29 U.S.C. § 1132(g)(1)). "In determining whether to grant such an award, courts in the Second Circuit must consider: `(1) the degree of the offending party's culpability or bad faith, (2) the ability of the offending party to satisfy an award of attorney's fees, (3) whether an award of fees would deter other persons from acting similarly under like circumstances, (4) the relative merits of the parties' positions, and (5) whether the action conferred a common benefit on a group of pension plan participants.'" Cook, 2004 WL 203111, at *20 (quoting Krizek, 345 F.3d at 102).
In this case, even though Magee is not entitled to reinstatement of benefits on summary judgment, all five factors weigh strongly in his favor. First, MetLife wrongly denied Magee the opportunity for full and fair review, forcing him to bring this lawsuit. Second, as this Memorandum and Order makes clear MetLife's review process was flawed. Indeed, MetLife has been sharply criticized for similar failings in this district. See, e.g, Cook, 2004 WL 203111. MetLife should be able to satisfy any award, and the relative strength of the parties' positions is not in doubt. Accordingly, this Court exercises its informed discretion to grant Magee an award of reasonable attorney's fees and costs for filing this action and for those branches of these motions on which Magee prevailed. In the event that the parties cannot agree on reasonable attorney's fees, Magee shall submit documentation sufficient for this Court to determine the amount of the award by July 22, 2009. MetLife can offset any attorney's fees award against the unreimbursed overpayments of benefits owed by Magee to MetLife.
CONCLUSION
For the foregoing reasons, Defendant Metropolitan Life Insurance Company's motion for summary judgment affirming its determination (Docket No. 11) is denied. Plaintiff John Magee's motion for summary judgment (Docket No. 15) is granted in part. Defendant's determination is vacated, and the case is remanded for reconsideration in view of this Memorandum and Order. Defendant's motion for summary judgment on its counterclaim is granted. Judgment will be entered accordingly.
This Court determines that costs and attorney's fees are warranted. Accordingly, Magee shall submit an application documenting the amount of costs and fees demanded in accordance with Fed.R.Civ.P. 54(d)(2)(B). The Clerk of the Court is directed to mark this case closed.
SO ORDERED.
NOTES
[1] Citations to "ML ___" are references to the administrative record submitted as Exhibit A to the Affidavit of Timothy Suter dated August 15, 2008.
[2] NMR and MetLife have a close and substantial business relationship. See Nolan v. Heald College, 551 F.3d 1148, 1152 n. 3 (9th Cir. 2009) (describing the business relationship between NMR and MetLife).
[3] While Dr. Payne's statement that there were no "objective measures to support functional limitations," could be construed as seeking evidence of Magee's limitations, rather than a diagnosis of CFS, this single sentence is inadequate notice of what evidence could meet a functional limitations requirement and Met-Life never followed this reasoning in its rejections.
[4] Although Magee's file also contains Dr. Hopkins's review, MetLife did not rely on it.
See Juliano, 221 F.3d at 287. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260540/ | 379 Pa. Superior Ct. 104 (1988)
549 A.2d 927
John LEE, Jr., Appellant,
v.
SAFEGUARD MUTUAL INSURANCE COMPANY, Appellee.
Supreme Court of Pennsylvania.
Argued June 8, 1988.
Filed September 19, 1988.
Reargument Denied November 7, 1988.
*105 Allen L. Feingold, Philadelphia, for appellant.
Wayne A. Schieble, Philadelphia, for appellee.
Before McEWEN, OLSZEWSKI, and CERCONE, JJ.
OLSZEWSKI, Judge:
This case involves the question of a claimant's recovery for attorney fees under section 107 of the Pennsylvania No-fault Motor Vehicle Insurance Act ("No-fault Act").[1] Finding the record incomplete to support a claim for counsel fees under section 107(3) of the No-fault Act, the trial court denied appellant's claim. Appellant contends that the trial court erred in failing to award attorney's fees pursuant to sections 107(1) and 107(3) of the No-fault Act. We find the record lacks evidentiary support for recovery of attorney's fees under either section and, consequently, affirm the judgment.
On September 4, 1976, appellant was injured in an automobile accident. Appellant, at the time of the accident, was insured by appellee, Safeguard Mutual Insurance Company. On May 29, 1979, the insurance commissioner suspended appellee and, on April 21, 1982, the Commonwealth Court declared appellee insolvent. Subsequently, the Pennsylvania Insurance Guarantee Association ("PIGA") handled the file on behalf of appellee.
In 1978, appellant filed his first action for no-fault benefits in which he demanded judgment for itemized medical bills totalling $1,087.00, claiming that those bills were "incomplete and continuing," and demanded judgment for lost *106 wages "together with penalties, attorney's fees, interest and costs thereon." Appellant also sought punitive damages. In 1980, appellant filed another action for no-fault benefits arising out of the same car accident, adding a request for payment of uninsured motorist benefits for "pain and suffering."
On December 4, 1984, after PIGA assumed appellee's file, an arbitration panel, with respect to the 1978 action, found in favor of appellant in the amount of the itemized bills, namely $1,087.00. The panel also assessed interest at the rate of 18% per year, for a total award of $2,296.29. The panel rejected appellant's claim for lost wages, any additional medical bills, and attorney's fees. With respect to the 1980 action, an arbitration panel entered an award in favor of appellant in the amount of $1,722.50. Appellant and PIGA appealed the panel decisions resulting from the 1978 action and the 1980 action, respectively. Both appeals were consolidated for purposes of trial.
Prior to trial by jury, pursuant to a motion in limine, the trial court ruled that all claims for punitive damages and previously adjudicated uninsured motorist matters would be barred from the lawsuit.[2] The court also ruled that the claim for counsel fees would be severed and determined by the court after the jury decided the claim for the underlying no-fault benefits. At trial, PIGA's counsel made the following opening statement during which appellant's counsel at various points moved for a directed verdict:
[PIGA's counsel]: Yes, your Honor. I simply mean to put before the jurors the matters which I do not dispute that [appellant] is entitled to. . . .
* * * * * *
When this accident occurred, they were notified by [appellant], and they received one bill from St. Joseph's Hospital. . . . *107 Saint Joe's Hospital, had a bill, for [appellant], in the amount of Seven Hundred Seventy-Nine Dollars net. We'll prove in this case by virtue of . . . cancelled check that we received from the liquidator, in the Pennsylvania Insurance Commissioner's Department, that Safeguard paid that bill, June one, 1977. . . .
. . . by a letter of [appellant's counsel's] dated August twenty-eighth, 1978, he sends them additional bills, I am going to itemize these bills here for you.
To Doctor Freedman, One Hundred Five Dollars. Doctor Anday, Seventy-five Dollars. Doctor Nelson, One Hundred Dollars. And Gemedco Supply, Twenty Five Dollars.
He also encloses in that letter and makes demand for payment to Saint Joseph's Hospital bill that that had been paid more than a year before.
So that you have the Saint Joe's Hospital bill . . . that's been paid, he submits that again, and a total of Three Hundred Five Dollars more in medical bills.
Also, there's made a demand for wage payment, but as to the exact amount of the wage losses, any documentation to prove the wage losses, you'll see there is not anything submitted to Safeguard at all.
Under the law, it's true that when an attorney presents reasonable proof of an outstanding bill and documentation to support that there was a reasonable bill and it was for services actually rendered and bills outstanding, the insurance company has to generally pay within thirty days or at least come up for a reason not to dispute. In this case, Safeguard is presented with a bill, one of which they find out has previously been paid by looking through their check file, and they are presented with literally no documentation for the rest.
Unfortunately, what happened, Safeguard went bankrupt,. . . [s]o, between 1979 and 1982, nobody can make complaints against them, any lawsuits against them were suspended[.] . . . *108 [Appellant's counsel] filed this first lawsuit . . . in September of 1978. Since that time until this date, at least since the Insurance Guaranty Association got the files in L982 (sic), we have not contested that we'll pay this Three Hundred Five Dollar bill.
* * * * * *
[PIGA's Counsel]: As these are not in dispute, ladies and gentleman, when you go out, we ask you to award this three hundred five dollars to the claimant, because we have no disputes he is entitled to this.
[Appellant's counsel]: (INTERPOSING.) Your honor, I ask for a directed verdict for those amounts.
THE COURT: You will get it in time.
[Appellant's counsel]: Thank you.
[PIGA's counsel]: (CONTINUES TO ADDRESS JURY.)
Unfortunately, you have got a lawsuit, however, by this time, there are additional claims made that we do dispute. We dispute the exact amount, and we are willing to pay reasonable wages for the two months, eight weeks or so you will see that the plaintiff has indicated in statements to us, and handwritten and signed statements, that his wage loss is Two Hundred Dollars a week for that eight-week period, and sixteen hundred dollars wages. We don't dispute that.
[Appellant's counsel]: Your Honor, Also notation for directed verdict for the sixteen hundred dollars.
[PIGA's counsel]: So we are now and have been willing, the Guaranty Association, since we got these files, I guess in '82 or '83, to pay that wage, despite the lack of documentation at this point we don't even care to pay these bills. We are here not to waste your time, the court's not to waste the court's time, but to get this matter over with.
* * * * * *
You will find the Guaranty Association, myself, Mr. Perkins has done everything they can to move this case, and I will ask you to find in favor of the Plaintiff in the amount of Nineteen Hundred Five Dollars. Thank you.
*109 [Appellant's counsel]: I ask for a directed verdict of Nineteen Hundred and Five Dollars, and I rest my case. Thank you.
Transcript at 59-68.
Subsequently, the trial court directed the jury to return a verdict in the amount of nineteen hundred dollars. After the jury was discharged, the trial court considered appellant's claim for counsel fees. During the proceedings, appellant's counsel reviewed his files, identifying the nature of the pleading or correspondence, and stated the time expended on each item as he identified it. He also informed the trial court of his hourly charge for professional services. Throughout his review, appellant's counsel intermittently made assertions of proper notification of the insured, submission of documentation, and the lack of response on part of the insured. After submission of briefs, the lower court denied the claim. Appellant subsequently filed post-trial motions alleging that the trial court "erred when it failed to award plaintiff counsel fees under 40 P.S. Sec. 1009.107(1) [and 40 P.S. § 1009.107(3)]." Appellant's motion for post-trial relief at 1-2. The trial court denied the motion noting that:
[T]he record developed at trial and presently before this Court is silent as to many if not most of the factual assertions and contentions set forth in plaintiff's Brief and Memorandum of Law. Accordingly, such matters are not properly before the Court and the assertions with respect thereto must be disregarded.
Trial court order dated December 30, 1987 at 1. On January 28, 1988, the trial court order and judgment were entered. This timely appeal followed.
Appellant contends that the trial court erred in denying appellant's request for counsel fees[3] when appellee admittedly *110 failed to make timely payments of personal injury protection benefits under the No-fault Act. Specifically, appellant argues that the trial court erred in failing to make the distinction between sections 107(1) and 107(3). Appellant contends that, unlike section 107(3), recovery of counsel fees under section 107(1) does not require proof of bad faith on part of the no-fault carrier. In the alternative, appellant maintains that he is entitled to counsel fees under 107(3), stating:
[D]efendant's actions totally violated the No-Fault Law when they did not pay within 31 days and gave no reason, in writing or otherwise, as required by law, for their *111 failure to pay. That in itself, was bad faith and required the payment of attorney's fees and costs.
Appellant's brief at 24.
Appellee argues that "without offering any of (sic) evidence to support an allegation of bad faith on part of defendant, the plaintiff cannot succeed in his claim for attorney fees." Appellant's brief at 9. Appellee makes no reference to section 107(1).
In construing the No-fault Act, we are guided by the following principle of statutory construction: "to ascertain and effectuate the intention of the General Assembly." 1 Pa.C.S.A. § 1921(a). We also recognize that we are, "if possible, to give effect to all [a statute's] provisions," and "when the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." 1 Pa.C.S.A. § 1921(a) and (b). With these principles in mind, we first turn to the legislature's findings and purposes in enacting the No-fault Act. The legislature found that:
(3) the maximum feasible restoration of all individuals injured and compensation of the economic losses of the survivors of all individuals killed in motor vehicle accidents on Commonwealth highways, in intrastate commerce, and in activity affecting intrastate commerce is essential to the humane and purposeful functioning of commerce;
* * * * * *
(5) exhaustive studies by the United States Department of Transportation, the Congress of the United States and the General Assembly have determined that the present basic system of motor vehicle accident and insurance law, which makes compensation and restoration contingent upon:
(A) every victim first showing that someone else was at fault;
(B) every victim first showing that he was without fault;
*112 (C) the person at fault having sufficient liability insurance and other available financial resources to pay for all the losses.
is not such a low-cost, comprehensive, and fair system;
* * * * * *
(6) careful studies, intensive hearings, and some State experiments have demonstrated that a basic system of motor vehicle accident and insurance law which:
(A) assures every victim payment of all his basic medical and rehabilitation costs, and recovery of a reasonable amount of work loss, replacement services and survivor's loss; and
(B) eliminates the need to determine fault except when a victim is very seriously injured,
is such a low-cost, comprehensive, and fair system;
* * * * * *
(9) a Statewide low-cost, comprehensive, and fair system of compensating and restoring motor vehicle accident victims can save and restore the lives of countless victims by providing and paying the cost of services so that every victim has the opportunity to:
(A) receive prompt and comprehensive professional treatment; and
(B) be rehabilitated to the point where he can return as a useful member of society and a self-respecting and self-supporting citizen.
40 P.S. § 1009.102(a).
In addition, the legislature stated its purposes as follows:
(b) Purposes. Therefore, it is hereby declared to be the policy of the General Assembly to establish at reasonable cost to the purchaser of insurance, a Statewide system of prompt and adequate basic loss benefits for motor vehicle accident victims and the survivors of deceased victims.
40 P.S. § 1009.102(b) (emphasis added).
In order to accomplish these objectives, the legislature has enacted a comprehensive statute which includes penalties *113 for non-payment of legitimate claims or untimeliness in reacting to the presentation of claims. These penalties include the imposition of interest[4] and an award of attorney's fees in specified circumstances. Circumstances where attorney's fees are recoverable by a claimant are set forth in specific, detailed language in sections 107(1) and 107(3) of the Act, respectively:
(1) If any overdue no-fault benefits are paid by the obligor[5] after receipt by the obligor of notice of representation of a claimant in connection with a claim or action for the payment of no-fault benefits, a reasonable attorney's fee (based on actual time expended) shall be paid by the obligor to such attorney. No part of the attorney's fee for representing the claimant in connection with such claim or action for no-fault benefits shall be charged or deducted from benefits otherwise due to such claimant and no part of such benefits may be applied to such fee.
* * * * * *
(3) If, in any action by a claimant to recover no-fault benefits from an obligor, the court determines that the obligor has denied the claim or any significant part thereof without reasonable foundation, the court may award the claimant's attorney a reasonable fee based upon actual time expended.
40 P.S. § 1009.107(1) and (3).
To ensure "a Statewide system of prompt . . . basic loss benefits for motor vehicle victims and the survivors of deceased victims,"[6] an insurer "shall" pay attorney's fees "if any overdue no-fault benefits are paid by the [insurer] after receipt by the [insurer] of notice of representation of a *114 claimant." 40 P.S. § 1009.107(1). Pursuant to section 106(a)(2) of the No-fault Act,
[n]o-fault benefits are overdue if not paid within thirty days after the receipt by the [insurer] of each submission of reasonable proof of the fact and amount of loss sustained, unless the [insurer] designates, upon receipt of an initial claim for for no-fault benefits, periods not to exceed thirty-one days each for accumulating all such claims received within each such period, in which case such benefits are overdue if not paid within fifteen days after the close of each such period. If reasonable proof is supplied as to only part of a claim, but the part amounts to one hundred dollars ($100) or more, benefits for such part are overdue if not paid within the time mandated by this paragraph. An obligation for basic loss benefits for an item of allowable expense may be discharged by the [insurer] by reimbursing the victim or by making direct payment to the supplier or provider of products, services, or accommodations within the time mandated by this paragraph. Overdue payments bear interest at the rate of eighteen per cent (18%) per annum.
40 P.S. § 1009.106(a)(2)
We note, however, that the legislature, by enacting the No-fault Act, intended to establish a "fair" system. Thus, it acknowledged the possibility of the presentation of fraudulent claims, and provided for the right of the no-fault carrier to contest the claim in a timely manner under section 106(a)(5).[7] Section 106(a)(5) states in pertinent part:
*115 An [insurer] who rejects a claim for basic loss benefits shall give to the claimant written notice of the rejection promptly, but in no event more than thirty days after the receipt of reasonable proof of the loss. Such notice shall specify the reason for such rejection and inform the claimant of the terms and conditions of his right to obtain an attorney.
Id., § 1009.106(a)(5).
Thus, through its enactment of section 107(1), the legislature has provided mechanisms to ensure a fair system whereby promptness is encouraged and tardiness penalized. When a claimant is not timely notified or has not been timely paid and the claimant must enlist the services of an attorney to secure no-fault benefits owned to him by the insurer, the legislature provides for recovery of counsel fees by the claimant.[8] Consistent with establishing a "fair" *116 system and "assur[ing] every victim payment of all his basic medical and rehabilitation costs, and recovery of a reasonable amount of work loss, replacement services and survivor's loss," the legislature has also provided recovery of attorney fees where the insurer has acted unreasonably in denying a claim. Section 107(3) provides for the recovery of attorney fees by the claimant where the insurer, although providing timely notification of its denial of payment, denies the claim on an unreasonable basis. Pennsylvania appellate courts have construed section 107(3) "to allow an award of counsel fees only upon proof of bad faith on the part of an insurer in denying the claim. Hayes v. Erie Insurance Exchange, 493 Pa. 150, 160, 425 A.2d 419, 424 (1981); Hall v. Midland Insurance Co., 320 Pa.Super. 281, 288-289, 467 A.2d. 324, 328 (1983); Shomper v. Aetna Life and Casualty Co., 309 Pa.Super. 97, 100, 454 A.2d 1101, 1102 (1982); Baker v. Aetna Casualty and Surety *117 Co., 309 Pa.Super. 81, 92-93, 454 A.2d 1092, 1098 (1982), overruled on other grounds, Atanovich v. Allstate Insurance Co., 320 Pa.Super. 322, 467 A.2d 345 (1983), aff'd, [507] Pa. [68], 488 A.2d 571 (1985)." Fasciana v. Aetna Life and Casualty Co., 343 Pa.Super. 1, [5], 493 A.2d 772, 774 (1985); see also Romanski v. Prudential Property and Casualty Insurance Co., 356 Pa.Super. 243, 514 A.2d 592 (1986)."[9]
Having ascertained the legislative intent in enacting sections 107(1) and (3), we now turn to the instant case. In reviewing this case,
we must be mindful that findings of a trial judge in a non-jury case must be accorded the same weight and effect on appeal as the verdict of a jury, and will not be reversed in the absence of an abuse of discretion or a finding of a lack of evidentiary support. Firestone v. Luther Ford Sales, Inc., 271 Pa.Superior Ct. 480, 414 A.2d 355 (1979). The appellate court, in these circumstances, is limited to determinations of whether the trial court's findings are supported by competent evidence and whether the trial court committed an error of law. Metz Contracting, Inc. v. Boxer Heights, Inc., 261 Pa.Superior Ct. 177, 395 A.2d 1373 (1978). It is also clear that in reviewing the findings of the trial judge, the victorious party is entitled to have the evidence viewed in the light most favorable to the successful party must be taken as true and all unfavorable inferences rejected. Courts v. Campbell, 245 Pa.Superior Ct. 326, 369 A.2d 425 (1976); Colish v. Goldstein, 196 Pa.Superior Ct. 188, 173 A.2d 749 (1961). This is especially true where the credibility of witnesses had to be weighed by the lower court. Brentwater *118 water Homes, Inc. v. Weibley, 471 Pa. 17, 369 A.2d 1172 (1977).
Brenna v. Nationwide Insurance Co., 294 Pa.Super. 564, 567-68, 440 A.2d 609, 611 (1982). In denying an award of attorney's fees, the trial court relied on section 107(3) and found that "on the present record of this case there is not a scintilla of evidence that the denial of payment was in bad faith." Trial court's memorandum at 12. The trial court did not consider section 107(1). Regardless of whether section 107(1) or section 107(3) is applicable, we find that appellant failed to meet its burden of proof to establish a prima facie case for attorney's fees under either section.[10]
To recover attorney's fees pursuant to section 107(1), appellant must prove:
(1) On a particular date, appellant provided reasonable proof of the fact of loss and amount of loss incurred;[11]
(2) Appellant was not paid no-fault benefits by appellee prior to the filing of a notice of representation by appellant's counsel;
(3) A notice of representation was filed when payments were overdue pursuant to section 106; and
(4) Appellee did not notify appellant within thirty days "after the receipt of reasonable proof of loss" of any denial of benefits.
In reviewing the record before us, we find that appellant failed to prove that reasonable proof was submitted to appellee.[12] Appellant asserts:
*119 [Appellant], through his attorney, and/or the health care providers, submitted bills and reports to [appellee] by certified mail, return receipt requested and within thirty-one (31) days, [appellee] neither paid these no-fault obligations, nor did they give any reason for their failure to pay, either in writing or any other way.
Appellant's brief at 4. Perusal of the record, however, indicates that no bills, no reports,[13] no certified return receipt cards were introduced into evidence to demonstrate that appellee received reasonable proof of loss on a particular date. Appellant cannot rely on opposing counsel's remarks during his opening statement to excuse appellant from proving each element of his cause of action. It is well established that counsel, acting within the scope of his authority, may bind his client by an admission made during the course of a trial. Piper Aircraft Corporation v. Workmen's Compensation Board, 86 Pa.Cmwlth. 614, 485 A.2d 906 (1985); Eldridge v. Melcher, 226 Pa.Super. 381, 313 A.2d 750 (1973). Constituting a judicial admission, the attorney's statement is "competent as evidence in the same case or in another case: (sic) Associates Discount Corp. v. Kelly, 169 Pa.Super. 74, 77, 82 A.2d 689, [690] (1951)." Rizzo v. Rolarback, 8 D.C.3d 122 (1978) aff'd mem., 261 Pa.Super. 455, 395 A.2d 995 (1978) (footnote omitted.) PIGA's counsel, however, did not admit that appellee received reasonable proof of the fact of loss and amount of loss incurred. During opening statement, PIGA's counsel *120 did not dispute specific claims, but, with regard to those particular claims, PIGA's counsel asserted that the St. Joseph bill had already been paid "and [appellee was] presented with literally no documentation for the rest." Transcript at 66. At another point in his opening statement, PIGA's counsel states that "despite the lack of documentation at this point we don't care to pay these bills. We are here not to waste your time, the Court's not to waste the court's time, but to get this matter over with." Transcript at 69. These remarks by opposing counsel do not admit receipt of reasonable proof.[14]
Assuming 107(3) is applicable, we accept the trial court's analysis that appellant has failed to prove that appellee acted in bad faith in denying any claims:
On the present record of this case there is not a scintilla of evidence that the denial of payment was in bad faith, without reasonable foundation or frivolous. The entire record is limited to the admissions and volunteered statements of the defendant's attorney soliciting the Jury "not to waste your time and the court's time over a nineteen hundred-dollar claim["], the swiftly voiced Motion of claimant to enter "a directed verdict of Nineteen Hundred and Five Dollars, and I rest my case" followed only by the recital of the claimant's review of the documents in his file from which a time calculation of the hours of this professional service was constructed. This will not support an award of counsel fees under the Act. There is not a shred of evidence on the record of this case to *121 support a finding of bad faith, the absence of reasonable foundation or frivolity of action upon which entitlement to counsel fee can be based. The assertions in the claimant's Memorandum of proper notification of claim to the insurer, prompt submission of reports and bills and like claims have no support or factual basis on the record before the Court. The admissions of defense counsel that they would not contest entitlement despite late notice or lack of documentation cannot by any stretch of language be viewed as admissions of bad faith. Nor can the recital of time expended by counsel in the "paper war" which has been engaged in be construed as demonstration "bad faith" on the part of defendant anymore than can such appellation be attached to the plaintiff, based on the same serious of legal thrusts and counter-thrusts.
Opinion at 12-13.
The judgment of the trial court is affirmed.
NOTES
[1] Act of July 19, 1974, P.L. 489, No. 176, Sec. 101, et seq., 40 P.S. Sec. 1009.101, et seq., repealed, Act of February 12, 1984, P.L. 26, No. 11, Sec. 8(a), effective October 1, 1984. At the time of the auto accident in question, appellee's insurance claims were governed by the currently repealed No-fault Act.
[2] On September 14, 1982, appellant filed a petition to compel uninsured motorist arbitration; and on February 5, 1985, an arbitration panel found in favor of appellant in the amount of $6,500.00. Judgment was entered on this award.
[3] In his statement of the question and summary of argument, appellant asserts that he is also seeking "interest." Perusal of the record indicates that a claim for interest was not raised in post-trial motions and, therefore, cannot be raised for the first time in this forum. Pa.R.C.P. 227.1. Consequently, any claim for interest is deemed waived.
In regard to costs, appellant contends:
The No-Fault law requires that the plaintiff be put back into the best possible situation with the payment of all losses, 18% interest, attorney's fees and costs, as outlined in the various sections of the No-Fault law. This includes record costs, which are usually recovered by the winner of a claim, as well as costs of depositions and other out-of-pocket expenses necessitated by the defendant's actions.
Appellant's brief at 16 (emphasis added).
Our review of the No-fault Act indicates that the legislature has not provided for the recovery of costs as outlined by appellant and for the purposes set forth by appellant. We, therefore, find that the trial court did not abuse its discretion in failing to award costs. See In Re Scott Township, Allegheny County, 186 Pa.Super. 167, 142 A.2d 357 (1958) ("The power to impose costs in a proceeding based on a statute must be found in the statute."). We, however, note that there are two particular contexts where the legislature has provided recovery of costs, in addition to attorney fees. One situation is where a trial court enters an order "specifying conditions of discovery, and may order payments of costs and expenses of the proceeding, including reasonable fees for the appearance of attorneys at the proceedings, as justice requires." 40 P.S. § 1009.408(d). Costs are also recoverable where a claim is "discharged by a settlement to the extent authorized by law and upon a finding, by a court of competent jurisdiction, that the settlement is in the best interest of the claimant and any beneficiaries of the settlement, and that the claimant understands and consents to such settlement. . . ." 40 P.S. § 1009.106(b)(1). These costs are "the costs of such proceeding including a reasonable attorney's fee (based upon actual time expended) to the attorney selected by or appointed for the claimant." 40 P.S. § 1009.106(b)(1).
[4] Section 1009.106(a)(2) provides in pertinent part: "Overdue payments to bear interest at the rate of eighteen percent (18%) per annum."
[5] "`Obligor' means an insurer, self-insurer, or obligated government providing no-fault benefits in accordance with [the No-fault Act]." 40 P.S. § 1009.103. "Insurer," "self-insurer," and "government" are further defined in the No-fault Act. See 40 P.S. § 1009.103. For purposes of discussion, we shall use the terms "insurer" or "no-fault carrier."
[6] 40 P.S. § 1009.102(b).
[7] This is further evidenced by section 107(2) whereby the legislature provides for the recovery of counsel fees by the insurer. Section 107(2) states:
(2) if, in any action by a claimant to recover no-fault benefits from an [insurer], the court determines that the claim or any significant part thereof is fraudulent or so excessive as to have no reasonable foundation, the court may award the [insurer's] attorney a reasonable fee based upon actual time expended. The court in such case, may direct that the fee shall be paid by the claimant or that the fee may be treated in whole or in part as an offset against any benefits due or to become due to the claimant.
40 P.S. § 1009.107(2).
[8] Appellee contends that:
Justice Larsen, speaking for the Pennsylvania Supreme Court in the seminal case of Hayes v. Erie Insurance Exchange, 493 Pa. 150, 425 A.2d 419 (1981), recognized that the sole consequence of an overdue first-party benefit payment under § 106 of the No-Fault Act [sic] is a penalty of 18% interest, nothing more.
Appellee's brief at 10.
Appellee's interpretation of Hayes is misplaced. In Hayes, a claimant filed an action against the insurer for non-payment of no-fault benefits. The trial court granted recovery of the personal injury protection benefits; however, the lower court refused to grant an award of counsel fees. The insurer promptly paid the benefits due with interest at 6%. The claimant, however, insisted that she was entitled to interest at 18% pursuant to § 106(a)(1) and brought an action for recovery of interest and attorney's fees. The trial court held for the insurer, and this Court affirmed, "reasoning that [the insurer's] good faith and reasonable cause for its initial denial of [the claimant's] claim excused it from 18% interest payment as well as from the claim for attorney's fees." Hayes v. Erie Insurance Exchange, id., 493 Pa. at 153, 425 A.2d at 420. Our Supreme Court reversed, holding that "where a payment is overdue as defined by § 106, 18% interest is owed on that payment regardless of the `good faith' of the insurer or the `reasonable cause' of the delay." Id. Our Supreme Court stated:
[The insurer] argues that, as a `good faith/reasonable foundation' may be successfully asserted to a claim for attorney's fees, under § 107(3), this indicates the legislature similarly could not have intended to `penalize' insurance carriers by imposing 18% interest on overdue payments wherein the delay was in `good faith and with reasonable foundation.' However, exactly the converse is true the quite clear negative implication of the appearance of a `good faith/reasonable foundation' exception in § 107 coupled with its absence in the prior section, § 106, raises precisely the opposite inference. The legislature intended to create the exception to a claim for attorney's fees they so indicated in § 107(3). The legislature did not intend to create the exception to a claim for 18% interest on overdue payments they so indicated in § 106.
Hayes, id., 493 Pa. at 154-55, 425 A.2d at 421 (footnote omitted).
Thus, contrary to appellee's contention, our Supreme Court, in Hayes, did not address the issue of what penalties could be imposed on the insurer for overdue payments, but rather whether the insurer could rely on a "good faith/reasonable basis" exception to avoid payment of overdue benefits at 18% interest. Appellee's interpretation is also inconsistent with principles of statutory construction. If we were to agree that the sole consequence of an overdue no-fault benefit is interest at 18%, we would be ignoring the express terms of section 107(1) and treating the section as mere surplusage. A construction which fails to give effect to all provisions of a statute must be avoided. 1 Pa.C.S.A. § 1921; Wilson v. Central Penn Industries, 306 Pa.Super. 146, 149, 452 A.2d 257, 259 (1982). As stated earlier, section 107(1) evidences a clear policy of entitling a claimant to counsel fees when an insurer reacts untimely in presentation claims. No where in the No-fault Act does the legislature specifically limit the claimant to recovery of interest. Rather, it seeks to ensure award of attorney's fees by specifically providing that "[n]o part of the attorney's fees for representing the claimant in connection with such claim or action for no-fault benefits shall be charged or deducted from benefits otherwise due to such claimant and no part or such benefits may be applied to such fee." 40 P.S. § 1009.107(1).
[9] We note that, unlike section 107(3), section 107(1) does not require the insurer's actions to be "without reasonable foundation" or in "bad faith." That is, whether the insurer's untimeliness in reacting to the presentation of a claim was "without reasonable foundation" or in "bad faith" is irrelevant. The phrase "without reasonable foundation" or its equivalent is excluded from section 107(1). "Where the legislature includes specific language in one section of a statute and excludes it from another, it should not be implied where excluded." Patton v. Republic Steel Corp., 342 Pa.Super. 101, [109], 492 A.2d 411, 415 (1985).
[10] As in other civil actions, we hold that the plaintiff is required to prove facts essential to his right of recovery. See Benjamin v. Allstate Insurance Company, 354 Pa.Super. 269, 511 A.2d 866 (1986).
[11] The Insurance Department's regulations provide in pertinent part:
Proof of claim shall be made upon forms furnished by the Company unless the Company fails to supply such forms within 15 days after receiving notice of claim.
31 Pa.Code § 66.102(e) (example of basic loss benefits endorsement).
[12] Finding that appellant has not proven that reasonable proof was submitted to appellee, we, consequently, cannot determine from the record whether appellant timely notified appellee nor can we determine whether appellant timely filed a notice of representation.
[13] "Items ordinarily used to prove economic loss or `special damages' in personal injury cases should suffice as `reasonable proof of the fact and amount of loss sustained' for the purpose of obtaining no-fault benefits. Counsel for no-fault claimants should submit, for example, medical reports and bills to prove medical expenses, income tax returns and a statement from the employer to prove work loss, and bills and receipts to prove survivor's loss, replacement services loss, or funeral expenses. D. Shrager, ed. The Pennsylvania No-fault Motor Vehicle Insurance Act, Sec. 1:22 (1979). While such documents are necessary, the mere fact that they were submitted does not alone establish `reasonable proof of the fact and amount of the loss.' The court must make a case-by-case determination of whether there is `reasonable proof' based on the the particular facts of each case." Ralph v. Ohio Casualty Insurance Company, 363 Pa.Super. 286, 297, 525 A.2d 1234, 1240 (1987).
[14] At the appellate level, appellee attempted to introduce evidence of reasonable proof and proper notification by filing a petition for leave to file record. This Court denied the petition for leave to file record by order dated June 27, 1988, and also denied appellant's reconsideration of petition by order dated July 15, 1988. As an appellate court, we cannot usurp the function of the trial court as a factfinder. In addition, we find it inappropriate to make evidentiary rulings regarding the admissibility of evidence that should have been introduced at trial. Appellant argues, however, that the purpose of appellant's petition is to "contradict the false and fraudulent statements made by the appellee's counsel [during oral argument]." Appellant's reconsideration of petition for leave to file record at 3. These allegations can be properly addressed by the disciplinary board. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260544/ | 549 A.2d 1050 (1988)
In re R.M., Juvenile.
No. 85-273.
Supreme Court of Vermont.
May 27, 1988.
*1051 Howard E. VanBenthuysen, Franklin County State's Atty., St. Albans, for plaintiff-appellee.
Martin and Paolini, Barre, for defendant-appellant.
Steve Dunham, Public Defender, St. Albans, for defendant-appellee.
Before ALLEN, C.J., PECK, DOOLEY and MAHADY, JJ., and BARNEY, C.J. (Ret.), Specially Assigned.
DOOLEY, Justice.
R.M. is a juvenile who was determined, after a hearing before the Franklin District Court, sitting as a juvenile court, to be a child in need of care and supervision (CHINS) as described in 33 V.S.A. § 632(a)(12)(A) and (B). Following this determination the juvenile court held a disposition hearing, as required by 33 V.S.A. § 656(a), and then ordered custody and guardianship of R.M. transferred to the Commissioner of Social and Rehabilitation Services. R.M.'s mother appeals both the merits determination that R.M. is a child in need of care and supervision and the disposition order. We affirm as to the merits; we vacate and remand as to the disposition.
The instant case was commenced during the Christmas holidays of 1984. On December 30, 1984, R.M.'s mother contacted R.M.'s natural father and left R.M. in his care. R.M.'s parents were neither married nor living together. At that time, R.M. had been living with his mother and her boyfriend. R.M.'s father determined that it was not possible to take the child into the household in which he was livingwhich was a trailer-home housing himself, his wife, and eight others. After consulting with a social worker from the Department *1052 of Social and Rehabilitation Services (SRS), it was determined that R.M.'s father would keep the child that evening and that SRS would assume responsibility for the child on the next day. That evening, while R.M. was being bathed, his father's wife discovered a largethree inch by five inch bruise on R.M.'s lower back and buttocks. The child attributed the bruise to being struck with a belt buckle by his mother's boyfriend. On December 31, 1984, the state's attorney for Franklin County filed a petition with the juvenile court alleging that R.M. was a child in need of care and supervision.
Attached to the State's petition was an affidavit signed by the district director of the Franklin County SRS office. The affidavit alleged that: R.M. had been abandoned by his mother; R.M.'s father was unable to care for R.M. at the time the child was abandoned; a large bruise had been discovered on R.M.'s buttocks; and R.M. claimed that the source of the bruise was "John"his mother's boyfriend. On December 31, the court issued a temporary detention order transferring legal custody of R.M. to the Commissioner of SRS.
On January 10, 1985, an amended affidavit by an SRS social worker was filed with the juvenile court. The amended affidavit included allegations of abuse and neglect dating back to 1980. The substance of the amended affidavit was that R.M. had been both abused and neglected essentially since birth. On January 11, a hearing was held at which time R.M.'s mother denied the allegations made in the original petition and in the original and amended affidavits. The merits hearing was held on the 16th and 17th of January and included testimony from social workers familiar with R.M.'s history, as well as testimony from a pediatrician who had treated R.M. over a period of years. The disposition hearing was held on May 29, 1985.
Appellant, R.M.'s mother, assigns as error five points which accrue from the merits hearing and one point related to the disposition proceeding. First, appellant argues that the juvenile court erred by allowing expert testimony to be given at the merits hearing when, according to appellant, the State failed to comply with her discovery requests regarding the expert testimony. Second, appellant contends that reversible error occurred at the merits hearing when the juvenile court permitted hearsay testimony to be admitted into evidence over the objections of appellant's attorney. Third, appellant claims that historical evidence concerning incidents of abuse and neglect of R.M. was improperly admitted at the merits hearing. Fourth, appellant assigns error to the juvenile court's receipt of evidence regarding abuse and neglect of R.M.'s sibling. Fifth, appellant contends that the juvenile petition filed by the State was constitutionally deficient because it did not inform her of the grounds for which the State sought to have R.M. declared in need of care and supervision. Sixth, appellant argues that the disposition order was unsupported by findings of fact, and, for that reason, must be reversed.
Appellant's first argument relates to the use of an expert witness whose identity was not disclosed by the State in response to discovery requests. On January 7, 1985, appellant filed a "Request to Produce and Interrogatories" in which, among other things, she requested "[a] list of expert witnesses that may be called at any hearing together with their addresses, their area of expertise, a copy of any written reports, a summary of their expected testimony and a description of their qualifications." She also filed a motion to shorten the time for answering the discovery requests. In response to the discovery request, R.M.'s attorney provided a list of potential witnesses on January 10. This list included the following: "Experts Dr. Yates, Dr. Holmes, pediatricians." Following the names of these experts the attorney noted: "Their records should be available to [R.M.'s mother] upon presentation of a release. I don't have them at this time. The supplemental affidavit should be helpful." The supplemental affidavit, also filed on January 10, included references to previous injuries to R.M. and to medical treatment R.M. had received. It detailed an examination of R.M. that Dr. Holmes conducted on December 31, 1984, *1053 in which Dr. Holmes found the large bruise. According to the affidavit, R.M. stated to Dr. Holmes that appellant's boyfriend hit him with a belt buckle and Dr. Holmes found that the bruise was consistent with R.M.'s explanation, also referenced in the affidavit.
On January 11 a hearing was held on appellant's motion to shorten the time for discovery responses. R.M.'s attorney and the attorney for the State indicated that they were making efforts to comply with appellant's discovery requests. Appellant made no specific complaint that the responses to the requests about expert witnesses were unsatisfactory. In fact, beyond the statement by R.M.'s attorney that he had responded the best he couldwhich was not challenged by the mother's attorneythe discussion about interrogatories was limited to the availability of R.M.'s SRS file, the provision of addresses for witnesses to be called, and the names of any additional witnesses that might be found. Following that hearing, the court ordered SRS to provide appellant with copies of all records pertaining to R.M. that were in its possession; the court also ordered all parties to respond to appellant's interrogatories by January 15. No further information regarding expert testimony was provided to appellant before the merits hearing which commenced on January 16. At the merits hearing, appellant's attorney strenuously objected to testimony by Dr. Holmes because of insufficient discovery responses. The court, however, permitted the testimony. The testimony covered the history of Dr. Holmes' contacts with R.M., including treatment for bruises almost a year earlier. The appellant challenges the failure of the trial court to exclude the testimony.
CHINS proceedings are governed by the Vermont Rules of Civil Procedure. In re J.R., 147 Vt. 7, 10, 508 A.2d 719, 721 (1986). V.R.C.P. 26(b)(4)(A)(i) authorizes the discovery of information about expert witnesses sought in this case. However, V.R.C.P. 37 sets forth a procedure that a party seeking discovery must follow where responses to interrogatories and requests to produce are incomplete. In such an instance, Rule 37(a) requires a motion for an order compelling discovery. See 8 C. Wright & A. Miller, Federal Practice and Procedure § 2285, at 773 (1970). Only if there had been a failure to comply with a specific discovery order would sanctions such as witness preclusion be appropriate in this case. See V.R.C.P. 37(b)(2).
In this case, there was a discovery order but it was actually an order shortening the time allowed by the rules to respond to the interrogatories and request to produce. See V.R.C.P. 33(a), 34(b). Appellant never challenged the adequacy of the responses that had been filed and never sought an order to compel discovery under Rule 37(a). Thus, we construe the discovery order as relating solely to areas for which no responses had been provided. Appellant was not entitled to further sanctions based on this order.
Even if appellant had established the prerequisites to the availability of sanctions, we stress that the award of sanctions for failure to comply with discovery requests is vested in the sound discretion of the trial judge. John v. Medical Center Hospital of Vermont, Inc., 136 Vt. 517, 519, 394 A.2d 1134, 1135 (1978). And, as we have frequently observed, matters of discretion in the trial court will be overturned on review only when it is shown that there has been an abuse of discretion or that discretion has been withheld. Id. at 519, 394 A.2d at 1135.
We find no abuse of discretion here. Appellant has not demonstrated any prejudice resulting from the juvenile court's decision not to impose sanctions. Specifically, appellant has not shown an inability to prepare adequately her case because of insufficient discovery responses. In fact, the subject matter of the testimony elicited from Dr. Holmes was available to R.M.'s mother through the SRS file, to which she had access prior to the merits hearing. Absent a showing of prejudice as a result of the juvenile court's refusal to impose sanctions pursuant to V.R.C.P. 37, we find no abuse of discretion. See My Sister's Place v. City of Burlington, 139 Vt. 602, 614, 433 *1054 A.2d 275, 282 (1981). Thus, the court's failure to impose any sanctionsand specifically witness preclusionfor the alleged discovery violations was not inappropriate and does not warrant reversal.
Appellant's next contention is that hearsay testimony was improperly admitted at the merits hearing, over appellant's objections, and that this action warrants reversal. Appellant claims that the testimony of two witnesses was tainted by impermissible hearsay. First, she challenges the testimony of Dr. Holmes and, second, she challenges the testimony of R.M.'s maternal grandmother.
Appellant challenged the testimony of Dr. Holmes relating R.M.'s statement to him that appellant's boyfriend hit him with a belt buckle to cause the bruise that Dr. Holmes observed. When this testimony was proffered, the attorney for appellant objected vigorously. The attorney representing the State argued against the objection, claiming that the testimony was within the hearsay exception of V.R.E. 803(4) relating to "[s]tatements for purposes of medical diagnosis or treatment." The objection was overruled.
Appellant argues, and correctly so, that under V.R.E. 803(4)unlike the corresponding federal rulestatements relating to the inception or cause of a condition or symptoms are not admissible even if pertinent to diagnosis or treatment. See V.R.E. 803(4) and Reporter's Notes, V.R.E. 803(4). Compare V.R.E. 803(4) with F.R.E. 803(4) (Vermont rule omits provision permitting comment on "the inception or general character of the cause or external source thereof insofar as reasonably pertinent to diagnosis or treatment."). Thus, it is clear that Dr. Holmes' testimony relating R.M.'s statement about the cause of the bruise was inadmissible hearsay. State v. Recor, 150 Vt. ___, ___, 549 A.2d 1382, 1387 (1988); State v. Gallagher, ___ Vt. ___, ____ (Vt. May 20, 1988). Our decisions are clear that hearsay not admissible under the rules of evidence cannot be admitted in a juvenile merits hearing. See In re J.L.M., 139 Vt. 448, 450, 430 A.2d 448, 450 (1981).
However, the erroneous admission of evidence by itself is not grounds for reversal. The burden is on the excepting party to demonstrate that the error resulted in prejudice. See V.R.C.P. 61 (error must "affect the substantial rights of the parties." and failure to take action to correct must be "inconsistent with substantial justice"); In re R.L., 148 Vt. 223, 226, 531 A.2d 909, 911 (1987); In re M.B., 147 Vt. 41, 44, 509 A.2d 1014, 1016 (1986).
In determining whether the hearsay testimony of Dr. Holmes was fatal to the merits proceedings, we first consider the effect of the testimony on the decision of the juvenile court. See In re J.L.M., 139 Vt. at 450, 430 A.2d at 450; In re Certain Neglected Children, 134 Vt. 74, 77, 349 A.2d 228, 230 (1975); In re M.P., 133 Vt. 144, 147, 333 A.2d 116, 118 (1975). In his "Requests to Find," the attorney for R.M. suggested findings supportive of a CHINS determinationexclusive of any reliance of the hearsay portion of Dr. Holmes' testimony. The court's findings, however, briefly reference the tainted portion of the physician's testimony. Specifically, Finding 19 states: "While bathing R.M. the next day [R.M.'s father's wife] noticed a three inch by five inch bruise on R.M.'s left buttocks. The bruise was consistent with R.M. having been hit with a belt buckle." Only the last sentence of the finding might be based on hearsay, although it does not directly state that appellant's boyfriend struck R.M. with a belt buckle. The first sentence of the findingstanding apart from the tainted portionand in conjunction with the remaining 18 findings, adequately supports the court's conclusions that:
1. R.M. has repeatedly been physically abused by his mother and his mother's boyfriend,.... His mother ... has refused to intervene to protect her children, despite seeing and having knowledge of the abuse.
2. [R.M.'s mother] has neglected R.M. for years. This neglect includes inadequate hygiene, non-utilization of clothing and failure to prevent physical and psychological abuse by herself and her live-in boyfriend.
*1055 3. [R.M.'s father] is not in a position to provide the care R.M. needs.
4. R.M. IS A CHILD IN NEED OF CARE AND SUPERVISION. 33 V.S.A. § 632, Subsections (a), 12(A) and (B).
We have reversed a CHINS determination based on tainted evidence only when we have determined that the "findings independent of the challenged [evidence] do not support a conclusion that the child is without proper parental [care and supervision]...." In re M.P., 133 Vt. at 147, 333 A.2d at 118. See also In re J.L.M., 139 Vt. at 450, 430 A.2d at 450 (determination of unmanageability reversed where it rested "solely" on the evidence that was erroneously admitted). Here, the court's conclusions are adequately supported by the findings, exclusive of the single reference to hearsay testimony. There are no grounds to reverse.
Appellant also challenges the testimony of R.M.'s maternal grandmother, because she testified about statements made by a cousin of R.M. (who had earlier appeared as a witness). Appellant argues that this testimony was hearsay and requires reversal.
An out-of-court statement offered for purposes other than the truth of the matter asserted is not hearsay. Reporter's Notes, V.R.E. 801(c). A careful review of the transcript in the instant case reveals that the grandmother's testimonyas it pertained to out-of-court statements by R.M.'s juvenile cousinwas intended only to set a time frame for occurrences about which the cousin had previously testified. The grandmother's testimony on this point, therefore, was not hearsay, see Recor, 150 Vt. at ___, 549 A.2d at 1387; Norway v. Petit, 112 Vt. 453, 455, 28 A.2d 380, 381-82 (1942); Hill v. North, 34 Vt. 604, 616 (1861); McCormick on Evidence § 249 (3d ed. 1984); 4 Weinstein's Evidence ¶ 801(c)[1] (1987 revision), and appellant's hearsay objection was properly overruled.
Appellant's third argument is that the juvenile court improperly allowed the introduction of evidence supporting a finding and conclusion that R.M. had been a victim of abuse and neglect essentially since birth. Appellant bases her argument on the contention that the historical information introduced at the merits hearing dating back to March, 1980was not relevant to whether R.M. was an abused or neglected child on December 31, 1984, the date on which the petition had been filed with the juvenile court. The essence of appellant's argument on this point is that the evidence is too remote and that it is more pertinent to disposition than to the merits.
This case is similar to two others this Court has decidedIn re K.M., 149 Vt. 109, 539 A.2d 549 (1987); In re T.L.S., 144 Vt. 536, 481 A.2d 1037 (1984). In both K.M. and T.L.S., there was a continuing pattern of abuse and neglect. In K.M., we affirmed a finding that the juvenile was a child in need of treatment or rehabilitation on a determination that the "evidence revealed conditions substantially departing from the norm." K.M., 149 Vt. at 111, 539 A.2d at 550. In T.L.S., 144 Vt. at 541, 481 A.2d at 1039-40, we held that the juvenile court's determination that two children were children in need of care and supervision was adequately supported by evidence "disclo[sing] that throughout the lives of the two children, the mother ha[d] shown a complete inability to cope with the stress of parenting. Her tendency ha[d] been to react to that stress with abusive and neglectful conduct toward the children." (emphasis added). The merits hearing in T.L.S. in fact chronicled incidents of abuse and neglect exceeding even the time span involved in the instant case. Id. Given the recognition of evidence of a pattern of abuse and neglect, there is no question that the challenged evidence was admissible in this case.
In her fourth attack on the juvenile court's merits determination, appellant contends that the court improperly accepted evidence as to both lack of care, and abuse of one of R.M.'s siblings, and then inappropriately used such evidence to support findings of fact and ultimately the conclusion that R.M. was a child in need of care and supervision. Appellant argues that the receipt *1056 and use of this evidence runs afoul of our decision in In re J.M., 131 Vt. 604, 313 A.2d 30 (1973), and V.R.E. 404(b).
In In re D.P., 147 Vt. 26, 510 A.2d 967 (1986), we were confronted with a situation which required measuring the relevance of the circumstances and conditions of one sibling in determining the circumstances and conditions of another. In that case, we stressed that "[w]hether treatment of one child is probative of neglect or abuse of a sibling must be determined on the basis of the facts of each case." Id. at 30, 510 A.2d at 970. There, a previous history of abuse had been established in regard to D.P., and when similar injuries were inflicted on a sibling, the juvenile courtconsidering the history of abuse against D.P. and the escalation in seriousness of the abusive behavior as directed toward the siblingproperly determined that D.P. was a child in need of care and supervision. Id. at 30-31, 510 A.2d at 970; see also In re K.M., 149 Vt. at 112, 539 A.2d at 551 (reliance on evidence of abuse of a sibling is not error where there is evidence of the abuse of the juvenile).
D.P. presents a different situation from that present in J.M., 131 Vt. 604, 313 A.2d 30, the case relied upon by the appellant. There, the juvenile court had been presented with five neglect petitions, one for each of five siblings. The court consolidated the hearings on the five petitions and ultimately determined that all five children were neglected children. The merits determination in that case consisted of eleven one-sentence findings of fact and was followed by a conclusionary finding made at the disposition hearing repeating the allegations of the petition. The subsequent appeal came from the determination that J.M. was a neglected childthere was no appeal taken in regard to the other four children "who were placed with other families under mutually satisfactory arrangements." The evidence and the findings in In re J.M. related exclusively to J.M.'s four siblings, except for the general revelation that "J.M. lived in an overcrowded and untidy home. [And] [h]is mother and father were unable to adequately provide for the complete family of five due to various factors including income."
We determined that "[t]he findings applicable to the other children [could] not control the case of J.M." Id. at 608, 313 A.2d at 32 (emphasis added). Our conclusion was not that the circumstances regarding the other children were irrelevant as to the merits of J.M.'s proceeding, but only that exclusive of any findings specifically relating to J.M.they were not by themselves determinative. Id. at 609, 313 A.2d at 33.
This case is much closer to D.P. than to J.M. Nearly all the evidence and nearly all the findings pertained specifically to R.M. The additional evidence and the findings supported by such evidence describes neglect of R.M.'s sister by the mother, as well as physical abuse of R.M.'s sister by the mother's live-in boyfriend. It is indicative of a broad pattern of abuse and neglect generally pervasive in this household and clearly relevant to R.M. The evidence about the treatment of the sibling is relevant and can be relied on to support the court's conclusions with respect to R.M. See In re D.P., 147 Vt. at 30-31, 510 A.2d at 970.
Addressing appellant's peripheral claim on this pointthat the introduction of evidence pertinent to abuse and neglect of R.M.'s sibling was violative of the prohibition against the use of prior bad acts to prove character of a personwe find that V.R.E. 404(b) does not apply under the circumstances of the instant case. The purpose of challenged evidence was not to demonstrate that R.M.'s mother acted in conformity with a particular character trait, but, rather, its legitimate purpose was to show the totality of the home environment directly impacting on the well-being of R.M.
Thus, appellant's fourth challenge to the merits determination fails.
Next, appellant urges reversal of the merits determination on the basis that the juvenile petition was constitutionally defective in that it failed to inform the mother with particularityof the grounds on which the State was seeking to have R.M. determined to be a child in need of care and *1057 supervision. Essentially, appellant argues that the State was misleading in stating which provisions of 33 V.S.A. § 632(a)(12) it was proceeding under. 33 V.S.A. § 632(a)(12) states the following:
"Child in need of care or supervision" means a child who:
(A) Has been abandoned or abused by his parents, guardian or other custodian; or
(B) Is without proper parental care or subsistence, education, medical, or other care necessary for his well-being; or
(C) Is without or beyond the control of his parents, guardian or other custodian, or being subject to compulsory school attendance, is habitually and without justification truant from school.
The determination that R.M. is a child in need of care or supervision was made pursuant to subsections (a)(12)(A) and (a)(12)(B) of § 632. The error alleged by appellant is that the original affidavit supporting the petition filed on December 31, 1984, claimed essentially that R.M. was a child in need of care or supervision because he had been abused or abandoned. Subsequently, on January 10, 1985, an additional affidavit was filed. The substance of the amended affidavit was to allege that, in addition to having been abused or abandoned, R.M. was a neglected child. Appellant contends that, as a result, the petitionwith its supporting affidavitswas insufficient to provide adequate notice as to the nature of the State's case. Moreover, appellant contends that, because § 632(a)(12) is written in the disjunctive, it was improper for the State to pursue a CHINS determination under more than one of the subsections.
There is no question that in a juvenile proceeding the constitutionally protected due process rights of the parents must be stringently observed. See In re Lee, 126 Vt. 156, 158-59, 224 A.2d 917, 919 (1966); see also In re Gault, 387 U.S. 1, 33, 87 S.Ct. 1428, 1446, 18 L.Ed.2d 527 (1967) (requiring notice that is both timely and particular as to allegations to which the parent must respond). In determining whether sufficient notice has been provided to the parents in such a proceeding, our case law is clear that the affidavits supporting a juvenile petition willif they plainly recite the substance of the allegationssatisfy the requirement of particularity so as to afford the parties an adequate opportunity to respond. In re S.A.M., 140 Vt. 194, 197, 436 A.2d 736, 737-38 (1981); cf. State v. Christman, 135 Vt. 59, 61, 370 A.2d 624, 626 (1977) (affidavits supporting a criminal information are to be read in conjunction with the information in order to determine whether defendant has been provided adequate notice of the charges against which he or she must defend).
A careful review of the petition and affidavits filed in the present case indicates, unmistakably, the State's intent to show that R.M. was a child in need of care or supervision under both subsection (a)(12)(A) and subsection (a)(12)(B). Thus, it cannot be said that the notice given to appellant was less than adequate. Cf. Christman, 135 Vt. at 60, 370 A.2d at 625 (constitutional due process requirements in a criminal proceedingare met if the "complaint or other form of accusation [is written] with such particularity as will reasonably indicate the exact offense the accused is charged with, and will enable him to make intelligent preparation for his defense."). Appellant has failed to demonstrate any prejudice based on the form, substance, or timing of the petition and affidavits in this case.
Turning to appellant's contention that it was improper for the State to proceed under both subsection (a)(12)(A) and subsection (a)(12)(B), we note that our cases clearly demonstrate that the State is not required to make an election under 33 V.S.A. § 632(a)(12), as it is possible for a child to be in need of care or supervision because of the existence of circumstances described in one or more of the subparts of § 632(a)(12). See, e.g., In re T.L.S., 144 Vt. at 541, 481 A.2d at 1040 (CHINS determination supported by evidence that children had been both abused and neglected).
*1058 Thus, as appellant's final challenge to the merits determination is unavailing, the juvenile court's conclusion that R.M. is a child in need of care and supervision under 33 V.S.A. § 632(a)(12)(A) and (B) must stand.
Appellant's sixth argument for our consideration challenges the validity of the disposition determination. Appellant contends that the disposition order is fatally defective because the juvenile court's conclusion that R.M. should be placed under the custody and guardianship of the Commissioner of SRS was unsupported by any findings on the record. The failure of the juvenile court to make findings on the record is inconsistent with our mandate in In re M.B., 147 Vt. at 45, 509 A.2d at 1017, where we stressed that:
[B]efore a child may be removed from the parental home at the dispositional stage, there must be convincing proof and findings that the parents are unfit and demonstrably incapable of providing an appropriate home, and that separation is necessary for the child's welfare or in the interest of public safety. It is crucial that findings indicate to the parties and to this Court, if an appeal is taken, what was decided and how the decision was reached.
(citations omitted). Because the disposition order is unaccompanied by findings that the parents of R.M. are "unfit and demonstrably incapable of providing an appropriate home, and that separation is necessary for the child's welfare or in the interest of public safety," it cannot stand. Id. "In view of the period of time which has passed since the disposition hearing, the juvenile court [must] hold a new disposition hearing in order to determine the current circumstances of the parties." Id.
Affirmed as to the merits determination; the disposition order is vacated and the cause is remanded for a new disposition hearing. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260564/ | 632 F.Supp. 985 (1986)
UNITED STATES of America, Plaintiff,
v.
Michael J. SWIATEK, Thomas J. Bambulas, Edward J. Pedote, Defendants.
No. 85 CR 538.
United States District Court, N.D. Illinois, E.D.
February 21, 1986.
*986 Thomas Knight, Chicago Strike Force, Chicago, Ill., for plaintiff.
Ralph E. Meczyk, Joseph R. Lopez, Barrister Hall, Santo J. Volpe, Glenn Seiden & Assoc., Chicago, Ill., for defendants.
ORDER
NORGLE, District Judge.
The four Count indictment in this case charges the Defendants, Swiatek, Bambulas *987 and Pedote, with the following violations of federal statutes;
(1) 18 U.S.C. § 1951 (conspiracy to obstruct, delay and affect interstate commerce by robbery) (all Defendants);
(2) 18 U.S.C. § 923 (knowingly engaging in the business of dealing in firearms without a license) (Pedote);
(3) 18 U.S.C. §§ 922(a)(1) and 924(a) (willful and knowing membership in a conspiracy in which a § 923 violation was committed) (Swiatek and Bambulas);
(4) 26 U.S.C. § 5812 (knowing transfer of § 5845(a)(7) firearms (three silencers) without the proper application) (Pedote);
(5) 26 U.S.C. §§ 5861(e) and 5871 (membership in a conspiracy in which a § 5845(a)(7) violation was committed) (Swiatek and Bambulas);
(6) 26 U.S.C. § 5812 (transfer of a firearm (one silencer) without the proper application) (Pedote);
(7) 26 U.S.C. §§ 5861(e) and 5871 (membership in a conspiracy in which a § 5812 violation was committed) (Swiatek and Bambulas).
The government and all counsel for Defendants participated in Rule 2.04 conferences on September 13, 1985. As a result of the conferences a large volume of information was turned over to Defendants (including tape recordings and documents) and the government agreed to make more evidence available in short order. Defendants, however, were not satisfied. Commencing on September 23, 1985, Defendants filed various motions for additional discovery. Defendants also filed motions for severance and for two hearings; one motion for a Santiago hearing and one motion for a "due process" hearing. This Order addresses each of the Defendants' motions.
I Bill of Particulars
Swiatek and Pedote request a bill of particulars pursuant to Fed.R.Crim.P. 7(f). Specifically, they request
(1) the time and place the alleged offenses occurred;
(2) the method or means by which the alleged offenses were committed;
(3) the name and address of every person relied upon by the government in bringing this prosecution;
(4) a list of government witnesses;
(5) the specific criminal history of each government witness;
(6) the identity of the "clerk" (see Gov Ex 165 at 2) who provided Gene Webb with a weapon (.45 caliber, serial # 70315);
(7) the caliber and serial number of the three firearms transferred by Oscar Luna to Special Agent Mazzolla on December 12, 1985;
(8) a list of all indicted and unindicted co-conspirators;
(9) a list of any overt acts in furtherance of the alleged conspiracy which the government intends to introduce at trial;
(10) the date, time and place in which each of the Defendants is alleged to have become a part of the alleged conspiracy.
This list is but a summary of the particulars requested by Defendants' motions. Several of the requested particulars are too vague to characterize or are repetitious. See, e.g., Pedote Motion at 2, ¶ h. Further, the various motions fail to identify specific prejudice flowing from the lack of particulars. A generalized and conclusory statement of prejudice in support of a motion for a bill of particulars is, in itself, a basis for denying the motion. See United States v. Wells, 387 F.2d 807, 808 (CA7 1967) (statement of prejudice in conclusory terms insufficient to override district court's broad discretionary power to deny bill). There is, however, sufficient specificity in the requests outlined above to require the Court to address Defendants' motions.
Defendants generally contend the particulars identified above are necessary to their defense in this case. As previously mentioned, they do not identify any particular *988 prejudice they would suffer if the bill is denied. The government's response is that a bill is inappropriate in this case because 1) the indictment is sufficiently specific, 2) this is not an overly complex case, 3) much of the requested information can be gathered from materials already furnished to the Defendants, 4) the fact that Defendants are already aware of the particulars they seek (see items 1 through 3) indicates that Defendants seek to get a glimpse at the government's strategy in prosecuting this case, rather than particulars behind the indictment. See United States v. Lavin, 504 F.Supp. 1356, 1361-62 (N.D.Ill.1981) (bill should not be used as discovery device aimed at theory and evidentiary details of government's case).
The purpose of a bill of particulars is to 1) provide a defendant with the additional facts necessary to prepare a defense, 2) supply a defendant with sufficient information in order to avoid surprise at trial and 3) protect a defendant from the potential for double jeopardy. Lavin, 504 F.Supp. at 1361. Defendants generally contend a bill is necessary for their preparation for the trial of this case. The Court accepts that statement as falling within the first two purposes stated above. Defendants ignore any double jeopardy implications. Accordingly, the Court need not address that issue.
The granting of a bill of particulars rests within the discretion of the trial court. Wong Tai v. United States, 273 U.S. 77, 47 S.Ct. 300, 71 L.Ed.2d 545 (1927). Relevant factors in the exercise of that discretion include 1) the complexity of the charged offense, 2) the clarity of the indictment and 3) the degree of discovery available to the defendant without the bill. United States v. Kendall, 665 F.2d 126, 135 (CA7 1981); Lavin, 504 F.Supp. at 1361. Finally, in order to support the orderly administration of justice and give due observance to the rights of an accused, the Court is required to articulate its reasons for the exercise of its discretion denying a motion for a bill of particulars. United States v. Wells, 387 F.2d 807, 808 (CA7 1967).
The Court finds the indictment in this case meets all of the requirements identified above. The offenses charged in the indictment are not overly complex. The violations of federal law and the supporting facts are stated with clarity. Moreover, the government has provided Defendants with voluminous discovery which fills out any details omitted from the indictment. See Government's Report of 2.04 conferences (listing discovery provided to Defendants). See also Government's Santiago Proffer.
Defendants have a constitutional right to know the offenses with which they are charged, but they have no right to know how the government intends to go about proving those offenses. Thus, because the indictment (along with discovery) adequately informs the Defendants of the offenses with which they are charged, Defendants' motion for a bill of particulars is denied. To do otherwise would provide Defendants with a preview of the government's strategy when Defendants are sufficiently informed to prepare for trial. See United States v. Kendall, 665 F.2d 126, 135-36 (CA7 1981); Lavin, 504 F.Supp. at 1361. Similar reasons compel the denial of Defendants' motion for a list of witnesses. The Court does not believe this case approaches the complexity necessary to demonstrate the need for a list of the government's witnesses. See, e.g., United States v. Jackson, 508 F.2d 1001, 1005-1008 (CA7 1975) (list of witnesses provided where 100 checks and 100 potential witnesses were involved).
II Discovery Motions
A. Defendants ask the Court to order the government to disclose any agreements, promises, payments or other consideration given in return for a promise of testimony or cooperation.
Specifically Defendants request
(1) any government assistance provided to Gene Webb,
(2) any offers of payment by the government for testimony or cooperation,
*989 (3) any inducement or coercion by the government to gain cooperation or testimony,
(4) any information which may be used to impeach potential witnesses pursuant to Fed.R.Evid. 609(a) or 611(b).
The government's response to Defendants' motion is that 1) if the government has the requested information, then the material a) has been turned over to Defendants or b) will be turned over to Defendants very shortly, or 2) the government denies that any such information is in its possession. In light of the government's response and Defendants' failure to file a reply brief, the Court finds Defendants' motion must be denied. However, the Court reminds Defendants that they may reassert any of their discovery motions if they become aware of specific items or materials they believe they are entitled to.
A similar fate befalls Defendants' motion for similar acts evidence brought under Fed.R.Crim.P. 12(d)(2). The Court agrees with the government that evidence which may be admissible at trial under Fed.R.Evid. 404(b) need not be turned over to Defendants prior to trial if that material is not exculpatory within the meaning of Brady v. Maryland [373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963)]. See United States v. Kendall, 766 F.2d 1426, 1440-41 (CA10 1985); United States v. Carr, 764 F.2d 496, 500 (CA8 1985). The Court does not read Defendants' motion as claiming any of the requested material is exculpatory in character. Accordingly, Defendants' motion for disclosure of similar acts evidence is denied.
B. Defendants next request discovery of exculpatory and impeaching evidence discoverable under Fed.R.Crim.P. 16, Brady and the Jencks Act. See Motion for Discovery and Inspection of Evidence Favorable to the Accused and Material to His Defense; Bambulas Motion for Immediate Disclosure of Favorable Evidence; Motion for Disclosure of Impeaching, Exculpatory of Mitigating Evidence. In these motions, Defendants make vague (the Government calls them "boiler plate") requests for material.
The government's response addresses each of Defendants' requests and 1) lists the information which satisfies the request or 2) explains why the information is not available to the Defendants. The Defendants offer no reply to the government's response. In failing to reply, Defendants have failed to controvert any of the assertions made by the government in its brief. Thus, on the basis of the government's uncontroverted representations that discovery has been provided to Defendants, the motions for additional discovery are denied at this time. Defendants, however, are free to reassert discovery motions at a later time.
C. Defendants next move under Fed.R. Crim.P. 6(e) and 16(b) for access to testimony by witnesses who appeared before the grand jury. Grand jury testimony is not generally furnished to the defense. See Fed.R.Crim.P. 6(e)(2); Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 79 S.Ct. 1237, 3 L.Ed.2d 1323 (1959). Discoverable materials falling within Brady v. Maryland, the Jencks Act and Fed.R. Crim.P. 16(e)(3) are exceptions to the rule. So too is the trial court's exercise of discretion to grant access to grand jury testimony when a defendant is able to show a "particularized need" for the material outweighs the policies supporting the secrecy of grand jury proceedings. See United States v. Procter & Gamble, 356 U.S. 677, 78 S.Ct. 983, 2 L.Ed.2d 1077 (1958). See also Fed.R.Crim.P. 16(e)(3)(c).
Caselaw does not provide an exact definition of "particularized need." Despite this lack of exactitude, it is well established that a defendant makes a sufficient showing of need by a 1) request for materials which are necessary to "avoid a possible injustice" and 2) the request is "structured to cover only material so needed." Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 222, 99 S.Ct. 1667, 1674, 60 L.Ed.2d 156 (1979).
*990 The "need" pressed by Defendants in this case is for contradictory statements of grand jury witnesses which may be used at trial. Specifically Swiatek wants any conflicting testimony addressing his participation in the conspiracy to rob BMJ. For several reasons, Defendants' request for access to grand jury testimony must be denied.
The Jencks Act, 18 U.S.C. § 3500(b), requires the government to furnish Defendants with "any statement of [a] witness ... which relates to the subject matter as to which the witness has testified." That requirement includes statements made by the witness before a grand jury. 18 U.S.C. § 3500(e)(3). See generally United States v. Bibbero, 749 F.2d 581, 585 (CA9 1984) (no exceptions to the rule of Jencks Act, not for court to speculate whether material could have been used effectively at trial). The government's Brady obligation to a defendant is to furnish "evidence favorable to an accused upon request ... where the evidence is material either to guilt or to punishment." 373 U.S. at 87, 83 S.Ct. at 1196. The government insists the material requested by Defendants has been or will be provided under the requirements of the Jencks Act and Brady. Consequently, the government argues, Defendants have not shown a true need for the material they now request. The Court agrees.
The heart of Swiatek's motion is a request for information which would contradict the charge that he participated in the conspiracy to rob BMJ. Such information is intrinsically Brady material. That grand jury testimony is discoverable, regardless of whether the government intends to introduce that same testimony at trial, by reason of the government's Brady obligations.[1] Further, if a grand jury witness is produced at trial, then the government is required to furnish the requested material under the Jencks Act. United States v. Short, 671 F.2d 178, 186 (CA6), cert. denied, 457 U.S. 1119, 102 S.Ct. 2932, 73 L.Ed.2d 1332 (1982). In either case, Defendants are assured of the materials which they request in their motion. In other words, Swiatek's articulated "need" for the requested material is satisfied by the Jencks Act and Brady. Consequently, there is no necessity for providing access to grand jury materials at this time. Because Swiatek has failed to show a necessity for the requested materials or that such necessity is outweighed by the policies behind the secrecy of grand jury proceedings, the motion for access to grand jury materials is denied.
Swiatek also contends that access to grand jury testimony is necessary to support his arguments of prosecutorial misconduct before the grand jury. But Swiatek offers no clue to the form of the misconduct he intends to show as the basis for his motion to dismiss the indictment. Such a vague allegation is inadequate to rebut the presumption of regularity which attaches to grand jury proceedings. Cf. United States v. Hubbard, 474 F.Supp. 64 (D.D.C. 1979). See also United States v. Samango, 607 F.2d 877, 881-82 (CA9 1979). Further, such vague and conclusory claims fail even to suggest the necessity for access to grand jury materials and render impossible a determination that the request is structured to cover only the needed material. See Douglas Oil, 441 U.S. at 222, 99 S.Ct. at 1674. See also United States v. Lisinski, 728 F.2d 887, 893-94 (CA7 1984).
D. Defendants next request appears moot at this point. Defendants requested an interview with Gene Webb and the government relented. That ends the matter as far as the Court is concerned.
III Severance
Pedote moves to sever Count I from the remainder of the indictment. He claims Count I is misjoined (Fed.R.Crim.P. 8(b)) or *991 joined to his prejudice (Fed.R.Crim.P. 14). Swiatek also filed a motion to sever. He asks that his case be severed from that of his co-defendants because 1) Swiatek's role in the conspiracy was very small and 2) his co-defendant (Bambulas) will testify on his behalf at a separate trial. The Court first addresses Pedote's motion and then proceeds to Swiatek's.
When two defendants are jointly indicted, they should be tried together unless one of the defendants can show that he will not receive a fair trial if tried jointly. United States v. Velasquez, 772 F.2d 1348, 1352 (CA7 1985). Fed.R.Crim.P. 8(b) permits the joinder of defendants if the "two defendants are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense." There is no requirement that each defendant be charged in each count of the indictment. Rule 14 allows the Court to sever defendants if it finds prejudicial joinder.
A brief review of the indictment is helpful at this point. Count I charges all Defendants entered into a conspiracy to rob BMJ in violation of the Hobbs Act. 18 U.S.C. § 1951. The dates of the conspiracy as charged are February 20, 1985 through August 20, 1985. Count II charges Pedote with knowingly engaging in the business of dealing in firearms without a license in violation of 18 U.S.C. § 922(a)(1). That conduct is also charged as an overt act in furtherance of the conspiracy to rob BMJ. See Count I, ¶ 11(d). Count II also charges Swiatek and Bambulas with violations of 18 U.S.C. §§ 922(a)(1) and 924(a) as members of a conspiracy during which Pedote committed the firearms violation. See Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 1184, 90 L.Ed. 1489 (1946) (overt act of one partner in conspiracy is attributable to all members of conspiracy).
Counts III and IV charge Pedote with transfers of firearms (silencers) in violation of 26 U.S.C. § 5861(e). Paragraph 11(d) of Count I provides the same reference point for this conduct as an overt act in furtherance of the conspiracy. Accordingly, Count III and IV employ the same theory in charging Swiatek and Bambulas with violations of 26 U.S.C. §§ 5861(e) and 5871 as members of the conspiracy.
With these charges in mind, the Court finds the government has met the "common scheme or plan" requirement of Rule 8(b). The indictment charges Pedote agreed to and did furnish the firearms as part of and in furtherance of the conspiracy. Further, Swiatek and Bambulas are charged as members of that conspiracy. These charges indicate the government contemplates proof at trial that Pedote's furnishing of the weapons to Swiatek and Bambulas were part and parcel of the conspiracy to rob BMJ. See Government's Response at 7-9. Pedote's misjoinder theory under Rule 8(b) is, therefore, rejected.
The Court now addresses Pedote's Rule 14 prejudicial joinder theory. The prejudice identified by Pedote is that a jury will transfer its feelings from the firearms counts to the conspiracy count. The Court, however, has already found the firearms counts identify but a portion of the conspiracy to rob BMJ. Further, the Court has confidence that the jury will heed its instructions at the conclusion of trial and consider the evidence with relation to the offenses charged in each count. See United States v. Aleman, 609 F.2d 298, 310 (CA7 1979) (severance denied, no abuse of discretion found where robbery conviction introduced and indictment contained additional charges upon which robbery conviction was inadmissible). Accordingly, the Court finds Pedote has failed to show a substantial risk of prejudice or that whatever prejudice exists outweighs the efficiency of a joint trial of all four counts of the indictment. The Court now turns to Swiatek's motion for severance.
Swiatek's first theory is premised on his assertion that he was but a slight participant in the alleged conspiracy. The theory that the least culpable member of a conspiracy should be severed from a trial of the whole conspiracy does not easily satisfy the movant's burden of showing he *992 cannot receive a fair trial. See Velasquez, 772 F.2d at 1352. Consequently, without more than a mere assertion of prejudice Swiatek's motion must fail.
Next, Swiatek contends severance is required because his co-defendant, Bambulas, will testify on his behalf at trial. Although Swiatek's brief promises to furnish an affidavit supporting his assertion that Bambulas will testify in his behalf, to this date no such affidavit has been forthcoming. The mere assertion by Swiatek that Bambulas will testify is, therefore, an insufficient basis for granting severance in this case. Cf. United States v. Harris, 542 F.2d 1283, 1312-13 (CA7 1976) (movant for severance must show 1) co-defendant's testimony would be exculpatory, 2) co-defendant would, in fact, provide testimony at a separate trial which he would not provide at a joint trial, 3) significance of the testimony will be so great that, under the totality of the circumstances, its absence would deny the movant a fair trial). Accord United States v. Oxford, 735 F.2d 276, 280-81 (CA7 1984). Based on the foregoing, Swiatek's motion for severance is denied. If the affidavit his brief promised should be forthcoming, however, he may press the Court to reconsider this ruling.
IV Motion to Dismiss
Pedote moves to dismiss the indictment because it fails to charge he took an active step toward the goal of robbing BMJ. Generally, in order to sustain the conspiracy count, the government must prove 1) an agreement between two or more persons, 2) the specific intent to commit an unlawful act and 3) an act in furtherance of the agreement. United States v. Cova, 755 F.2d 595, 598 (CA7 1985). All of these elements are charged in Count I, but the Court finds the government need not prove Pedote committed an overt act in furtherance of a conspiracy to violate 18 U.S.C. § 1951(a).
The language of section 1951(a) does not specifically require an overt act in order to establish a conspiracy to obstruct commerce. At least one court has held that no overt act need be proved in order to sustain a conviction under § 1951(a). See, e.g., United States v. Callanan, 173 F.Supp. 98, 101, aff'd, 274 F.2d 601, aff'd, 364 U.S. 587, 81 S.Ct. 321, 5 L.Ed.2d 312 (D.Mo.1959). The Seventh Circuit has not required the government to prove an overt act when it is not explicitly required by statute. See, e.g., Cova, 755 F.2d at 597-98 (prosecution under 21 U.S.C. § 846). Because § 1951(a) does not specifically require proof of an overt act in furtherance of a conspiracy to obstruct commerce, this Court is reluctant to imply such a requirement. Pedote's motion to dismiss is, therefore, denied.
V Hearing on Motion to Suppress
Pedote has moved to suppress statements he made to the government after his arrest on August 20, 1985. Pedote contends he did not knowingly and voluntarily waive his Miranda rights to silence, the presence of an attorney and to terminate interrogation. The Court finds a hearing on Pedote's contentions is warranted. The hearing will be held immediately before the trial.
VI Due Process Hearing
Swiatek requests a hearing so that the Court may determine if government misconduct occurred during the government's investigation which violated his due process rights as secured by the fifth amendment. Whether government misconduct during the investigatory stage is sufficiently egregious to offend fifth amendment due process and compel the dismissal of an indictment is a question of law for the Court. United States v. Johnson, 565 F.2d 179, 182 (CA1 1977). Because it presents a question of law for the Court, the issues surrounding Swiatek's due process defense could be decided before, during or after a trial.
Fed.R.Crim.P. 12(b) provides that any defense capable of determination without trial may be brought before trial by motion. Subsection (b)(1) of the Rule requires any defenses or objections based on defects in *993 the institution of the proceeding must be raised prior to trial. Swiatek, therefore, is procedurally correct in pressing his due process motion and request for a hearing prior to trial. Despite the provisions of Rule 12(b), however, Rule 12(e) provides the trial court with substantial discretion ("for good cause") to defer ruling on a pretrial motion until trial or after the verdict. The Court finds the most efficient manner for determining Swiatek's due process motion is at a post-verdict hearing.
Swiatek's due process theory requires proof of egregious government misconduct. See United States v. Thoma, 726 F.2d 1191, 1198 (CA7 1984). That proof in turn requires testimony concerning the government's investigation. Much of the same information will be presented in support of and in opposition to the charges levelled in the indictment. There is likely to be much repetition between the proof on Swiatek's motion and the proof at trial. Thus, much redundancy can be avoided by deferring Swiatek's due process motion until after the verdict. This would be especially true if Swiatek raises the related theory of entrapment as a defense at trial. See generally Comment, Entrapment, DeLorean and the Undercover Operation: A Constitutional Connection, 18 J.Mar.L.Rev. 365 (1985).
Swiatek's motion for a due process hearing before trial is denied. The Court will entertain the merits of holding a post-verdict hearing after trial. In the meantime, the Court finds a sufficient basis for requiring the parties to submit briefs regarding the elements necessary to sustain a claim of a fifth amendment due process violation based on government misconduct during the investigation of Swiatek. See, e.g., Thoma, 726 F.2d at 1199. Accordingly, Swiatek is given 14 days to provide the Court with a brief detailing his understanding of the necessary elements to sustain a due process defense and the specific allegations of misconduct in the present case which meet those requirements. The government is given 14 days to respond. Swiatek has 7 days to reply, if he feels a reply is necessary. The Court will rule on the matter and determine if a hearing is necessary after the verdict and upon Swiatek's motion.
VII Santiago Hearing
Pedote moves for a hearing on the admissibility of co-conspirator statements at trial under Fed.R.Evid. 801(d)(2)(E). See United States v. Santiago, 582 F.2d 1128, 1134-35 (CA7 1978). In response to Pedote's motion, the government has submitted a proffer of evidence to support the admissibility of co-conspirator statements. Pedote has not replied to the government's proffer of evidence.
The government's evidence supports the theory that Swiatek and Bambulas were members in a conspiracy to rob BMJ from February 20, 1985 to August 20, 1985. The evidence also supports the theory that Pedote was a member of the conspiracy from March 23, 1985 until his arrest on August 20, 1985. The specific proof submitted at trial may vary the exact time frame of the conspiracy, but based on the government's proffer of evidence, the Court is satisfied the requirements of Santiago have been met. If Pedote has specific objections to the government's evidence, he may submit a reply brief within 14 days of this order and the Court will reconsider this ruling. Pedote may, of course, decide to leave his specific objections for trial. Based on the foregoing, Pedote's motion for a Santiago hearing prior to trial is denied.
IT IS SO ORDERED.
NOTES
[1] It is worth noting at this point that if the government had evidence which clearly negates guilt, then it had an obligation to present that evidence to the grand jury. On the other hand, the government need not present material which might tend to be exculpatory. See United States v. Dorfman, 532 F.Supp. 1118, 1133 (N.D. Ill.1981). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260567/ | 379 Pa. Superior Ct. 337 (1988)
549 A.2d 1323
COMMONWEALTH of Pennsylvania
v.
Michael ELLIS, Appellant.
Supreme Court of Pennsylvania.
Submitted April 20, 1988.
Filed November 10, 1988.
*340 Robert F. Pappano, Assistant Public Defender, Chester, for appellant.
Vram Nedurian, Jr., Assistant District Attorney, Newton Square, for Com.
Before OLSZEWSKI, KELLY and HOFFMAN, JJ.
KELLY, Judge:
Michael Ellis appeals from judgment of sentence imposed following his conviction of arson and related offenses. He contends that evidence secured during a warrantless arson *341 investigation search was illegally obtained, statements made by him at the hospital were the product of an illegal custodial interrogation, evidence of prior convictions was improperly used against him at trial, and his convictions were against the weight of the evidence. We find no merit in the contentions and affirm judgment of sentence.
FACTS AND PROCEDURAL HISTORY
At approximately 6:30 p.m. on May 30, 1985, Officer Phillip Patchell, working motorcycle patrol, was dispatched to investigate a report of a structural fire at Long Lane and Pembroke near the border of Upper Darby and Lansdowne in Delaware County, Pennsylvania. He arrived a short time thereafter and discovered a house fire. After properly reporting the fire, he was dispatched to the Delaware County Hospital where two occupants of the house had been taken for emergency treatment of second degree burns.
Shortly after Officer Patchell left the scene, Officer John Egan and Fire Chief Dave Lauro arrived at the scene. Officer Egan had 14 years experience as a police patrolman; he was also the current president of the fire company and a 21 year veteran fire fighter.
Officer Egan and Fire Chief Lauro first attempted to enter the burning building to determine whether any occupants were trapped inside. Intense heat and thick black smoke drove them back. They then yelled into the house but no one responded. The fire company arrived a couple of minutes later, and the blaze was extinguished within 15 or 20 minutes.
While the fire was being fought, Officer Egan maintained crowd control. Fire Chief Lauro relayed to Officer Egan a report from firemen in the building that they smelled heavy gasoline fumes in the kitchen area. When the fire was extinguished Officer Egan and Fire Chief Lauro began to investigate the cause of the fire. In the kitchen, Officer Egan smelled a heavy odor of gasoline, confirming the firemen's earlier report.
*342 Prior to beginning his investigation, Officer Egan received a radio report that two occupants of the residence had been taken to the Delaware County Memorial Hospital for treatment of burns. He asked the radio dispatcher to send an officer to the hospital to confirm the report, and to keep them there until he could get there to interview them. Officer Patchell and Officer Edward Hunger (who went to the hospital to provide back-up and cruiser transport to Officer Patchell in case it was necessary) both testified that they had not been directed to detain either of the occupants, that they had taken no steps to detain them, and in fact did not speak to either of the occupants. Officer Hunger indicated that if either had attempted to leave he would have asked them to stay until Officer Egan could come to get information for his incident report, but that he would not have prevented them from leaving as he had no basis to detain them. The necessity for such conduct, however, never arose; neither attempted to leave while Officers Patchell and Hunger waited for Officer Egan.
After Officer Egan made his brief initial observations in the kitchen, he asked Fire Chief Lauro to preserve the scene by keeping the firemen out of the kitchen until after he returned from interviewing the two occupants at the hospital. On his way to the hospital (which was only a ten minute drive away), Officer Egan called Delaware County Fire Marshal George Lewis requesting him to come to the fire scene because of the suspicious nature of the fire, i.e. the presence of the strong odor of gasoline.
When Officer Egan arrived at the hospital, Officers Patchell and Hunger left. Officer Egan then interviewed one of the occupants, whom he knew on sight as Michael Ellis, the appellant. Officer Egan knew that appellant lived at the residence which had been on fire. Officer Egan asked appellant what happened. Appellant explained that he had been in the kitchen making tea when the gas stove exploded. Officer Egan then asked about some charred paint cans he had seen in the kitchen; appellant responded that he had been painting the house a few days earlier. Finally, Officer *343 Egan asked appellant if there had been any gasoline or other flammable materials in the kitchen; appellant answered that there was not.
Officer Egan then spoke briefly with the other occupant, Adam Abel, who was tried as appellant's co-defendant but discharged upon a demurrer. Before leaving, Officer Egan seized the soot and blood stained clothing of the two occupants.[1]
Officer Egan then returned to the scene of the fire where he was met by Fire Marshal Lucas. The firemen were still at the scene putting away equipment and "overhauling" the rooms other than the kitchen.[2] For the next two and one-half hours, Officer Egan and Fire Marshal Lucas carefully photographed, examined, and preserved physical evidence in the kitchen area. In addition to the photographs which provided detailed evidence regarding burn patterns and charring depth necessary to reconstruct events and to establish the cause of the fire, they found and preserved partially melted plastic milk jugs which contained a liquid that smelled like gasoline (which was inexplicably poured out), and were able to establish the absence of any defect in the stove or the gas lines which could have caused an explosion as appellant had indicated had occurred. The investigation was completed by 8:30 p.m. Thus, no more than three hours had passed from the time when the fire was first reported to the time when the investigation was completed. Three days later, another search was conducted pursuant to a lawful search warrant; photographs were taken but no new evidence was seized.
On June 10, 1985, appellant was arrested and charged with arson and related offenses. A pre-trial suppression motion which sought suppression of the statements made by appellant at the hospital and the evidence seized at the scene of the fire was denied following a hearing on October *344 28, 1985. A jury trial commenced on November 12, 1985, and on November 14, 1985 appellant was found guilty of arson and recklessly endangering another person. Post-verdict motions were filed, argued and denied. On December 15, 1986, appellant was sentenced to an eleven and one-half (11 1/2) month to twenty-three (23) month term of imprisonment on the arson conviction and a concurrent six (6) to twenty-three (23) month term of imprisonment on the recklessly endangering another person conviction.
Timely notice of appeal followed. We find no merit in any of the four contentions raised on appeal. We shall discuss each seriatim.
I. WARRANTLESS FIRE INVESTIGATION
Appellant first contends that the trial court erred in failing to suppress the fruits of the warrantless fire investigation. Appellant argues that the search of his home did not come within the fire investigation/exigent circumstances exception as explained by the United States Supreme Court in Michigan v. Tyler, 436 U.S. 499, 98 S.Ct. 1942, 56 L.Ed.2d 486 (1978) and Michigan v. Clifford, 464 U.S. 287, 104 S.Ct. 641, 78 L.Ed.2d 477 (1984). Appellant argues that the search was for the purpose of gathering evidence and that no exigency justified Officer Egan's failure to get a warrant before continuing his search after he returned from the hospital. Appellant misconstrues Tyler, Clifford, and their progeny.
A.
Fourth Amendment proscriptions apply only when the conduct challenged violates an actual expectation of privacy which society is prepared to accept as reasonable. See California v. Greenwood, 486 U.S. ___, ___, 108 S.Ct. 1625, 1628, 100 L.Ed.2d 30, 36 (1988) (collecting cases). Though the Fourth Amendment protects people rather than places, the determination of whether an actual and reasonable expectation of privacy existed usually requires some reference to place. Katz v. United States, 389 U.S. 347, *345 351, 88 S.Ct. 507, 511, 19 L.Ed.2d 576, 582 (1967); id., 389 U.S. at 361, 88 S.Ct. at 516, 19 L.Ed.2d at 587 (Harlan, J., concurring).
Undeniably, one of the primary sources of a reasonable expectation of privacy is the right to exclude trespassers which attaches to private property. See Rakas v. Illinois, 439 U.S. 128, 142 n. 12, 99 S.Ct. 421, 430 n. 12, 58 L.Ed.2d 387, 401 n. 12 (1978). One's private residence is ordinarily a refuge wherein one's reasonable expectations of privacy are exceptionally strong. See Payton v. New York, 445 U.S. 573, 587-88, 100 S.Ct. 1371, 1380-81, 63 L.Ed.2d 639, 651-52 (1980).
With regard to fire damaged property, the Supreme Court explained in Michigan v. Clifford, supra:
`People may go on living in their homes or working in their offices after a fire. Even when that is impossible, private effects often remain on fire damaged premises.' Privacy expectations will vary with the type of property, the amount of fire damage, the prior and continued use of the property, and in some cases, the owner's efforts to secure it against intruders. Some fires may be so devastating that no reasonable privacy expectation remains in the ash and ruins, regardless of the owner's subjective expectations. The test essentially is an objective one: whether `the expectation is one that society is prepared to recognize as "reasonable."' If reasonable privacy interests remain in the fire damaged property, the warrant requirement applies, and any official entry must be made pursuant to a warrant in the absence of consent or exigent circumstances.
464 U.S. at 292-93, 104 S.Ct. at 646, 78 L.Ed.2d at 483. (Citations omitted, emphasis added). See e.g. State v. Carey, 42 Wash.App. 840, 714 P.2d 708 (1986) (no reasonable expectation of privacy under the totality of the circumstances); People v. Zeisler, 125 Ill.App.3d 558, 80 Ill.Dec. 736, 465 N.E.2d 1373 (1984) (no reasonable expectation of privacy under the totality of circumstances); People v. Superior Court, 141 Cal.Rptr. 562, 74 Cal.App.3d 488 (1977) (defendant/trespasser *346 had no reasonable expectation of privacy); State v. Felger, 19 Or.App. 39, 526 P.2d 611 (1974) (tenant had no reasonable expectation of privacy in apartment abandoned after the fire).
In the instant case, the degree of fire damage to appellant's private residence was not such as to eliminate any reasonable expectation of privacy. The majority of the damage was confined to the kitchen area. Though appellant had not taken steps to secure the property by the time the challenged search occurred, this does not establish an abandonment of the property or privacy expectations. Appellant was at the hospital receiving emergency treatment of burns received in the fire during the relevant time period. Under the standard set forth in Michigan v. Clifford, supra, appellant retained reasonable privacy expectations in the fire damaged property.
B.
The original entry of Officer Egan, Fire Chief Lauro and the fire fighters was plainly justified by exigent circumstances:
A burning building clearly presents an exigency of sufficient proportions to render a warrantless entry `reasonable.' Indeed, it would defy reason to suppose that fireman must secure a warrant or consent before entering a burning structure to put out the blaze.
Michigan v. Tyler, 436 U.S. at 509, 98 S.Ct. at 1950, 56 L.Ed.2d at 498. The exigency which justified their original entry did not terminate when the flames were extinguished:
Fire officials are charged not only with extinguishing fires, but with finding their causes. Prompt determination of the fire's origin may be necessary to prevent its recurrence, as through the detection of continuing dangers such as faulty wires or a defective furnace. Immediate investigation may also be necessary to preserve evidence from intentional or accidental destruction. And, of course, the sooner officials complete their duties, the less will be their subsequent interference with the *347 privacy and recovery efforts of the victims. For these reasons, officials need no warrant to remain in a building for a reasonable time to investigate the cause of the blaze after it has been extinguished.
Michigan v. Tyler, 436 U.S. at 510, 98 S.Ct. at 1950, 56 L.Ed.2d at 498-99. (Emphasis added). See also Commonwealth v. Smith, 511 Pa. 36, 50-52, 511 A.2d 796, 803 (1986) (Larsen, J., concurring; Hutchinson, J., joins).
Appellant argues that the right to remain at a fire scene for a reasonable time does not justify the instant search because: Officer Egan left the scene to interview appellant at the hospital and then returned; Fire Marshal Lucas was called to the scene after the fire had been extinguished; and, the focus of the investigation had shifted from determining the cause of the fire to discovery and preserving evidence of arson. Appellant construes Tyler and Clifford too rigidly.
In Michigan v. Tyler, supra, the Supreme Court explained:
The circumstances of particular fires and the role of firemen and investigating officials will vary widely . . . In determining what constitutes a `reasonable time to investigate,' appropriate recognition must be given to the exigencies that confront officials serving under these conditions, as well as to the individual's reasonable expectations of privacy.
436 U.S. at 511 n. 6, 98 S.Ct. at 1950 n. 6, 56 L.Ed.2d at 499 n. 6. Cf. United States v. Sharpe, 470 U.S. 675, 686, 105 S.Ct. 1568, 1575-76, 84 L.Ed.2d 605, 615-16 (1985) (the reasonableness of an investigative detention must be judged based upon reasonableness of steps taken to confirm or dispel suspicions; courts must consider the fact that events develop swiftly and should avoid unrealistic second guessing).
Here, Officer Egan began his fire investigation by confirming the firemen's reports of a strong odor of gasoline, and then continued it by going to the nearby hospital to interview the two persons believed to have been injured in *348 the fire. Though perhaps unusual, we cannot say that Officer Egan's investigative priorities were unreasonable. When such witnesses are available, it is possible that information provided by such witnesses may help focus the investigative efforts and thereby reduce the duration of the official intrusion upon legitimate privacy interests. Officer Egan's interview of appellant and the other person injured in the fire, though removed from the scene of the fire, was nonetheless a logical and reasonable facet of the fire investigation. Cf. Commonwealth v. White, 358 Pa.Super. 120, 131-32, 516 A.2d 1211, 1215-16 (1986) (it was reasonable for one police officer to detain the suspects in the patrol car while another police officer went a short distance to the scene of a suspected burglary to confirm or dispel the officers' reasonable suspicions).
Appellant's focus on the comings and goings of individual officials from the fire scene is misplaced. In Michigan v. Clifford, supra, the Supreme Court held that a warrant, consent, or a further exigency was only required for an "additional investigation begun after the fire has been extinguished and fire and police officials have left the scene." 464 U.S. at 293, 104 S.Ct. at 647, 78 L.Ed.2d at 484. (Emphasis added). The focus is whether the official presence was continuous and whether the duration of the search was reasonable, not whether particular individuals were continuously present at the scene of the fire. Here, Officer Egan and Fire Marshal Lucas began the challenged search while fire fighters were still at the scene of the fire conducting standard overhaul activities. The entire fire investigation lasted approximately three hours. We find that the facts of this case do not trigger application of the three prong test for "continuation" searches set forth in Michigan v. Clifford, supra, and applied by our Supreme Court in Commonwealth v. Smith, supra. The challenged search commenced before the official presence at the fire scene had terminated; as the duration of that presence was not unreasonable, we do not read Tyler, Clifford, or Smith to require further analysis.
*349 In light of the foregoing, we find no reason to disturb the trial court's ruling that the warrantless investigation was reasonable under the standards set forth in Tyler and Clifford.[3]
II. HOSPITAL STATEMENTS
Appellant contends that his statements at the hospital should have been suppressed as the fruit of an unconstitutional interrogation. He argues that the questioning was custodial in that he was questioned by police when he was confined by circumstances beyond his control. Appellant cites in support of this contention Commonwealth v. Chacko, 500 Pa. 571, 459 A.2d 311 (1983), Commonwealth v. D'Nicuola, 448 Pa. 54, 292 A.2d 333 (1972) and Commonwealth v. Bordner, 432 Pa. 405, 247 A.2d 612 (1968). We find no merit in this contention.
*350 A.
Miranda warnings are only required prior to custodial interrogations. Miranda v. Arizona, 384 U.S. 436, 444, 86 S.Ct. 1602, 1612, 16 L.Ed.2d 694, 706 (1966); see also Berkemer v. McCarty, 468 U.S. 420, 104 S.Ct. 3138, 82 L.Ed.2d 317 (1984); California v. Beheler, 463 U.S. 1121, 103 S.Ct. 3517, 77 L.Ed.2d 1275 (1983); Roberts v. United States, 445 U.S. 552, 100 S.Ct. 1358, 63 L.Ed.2d 622 (1980); Oregon v. Mathiason, 429 U.S. 492, 97 S.Ct. 711, 50 L.Ed.2d 714 (1977); Beckwith v. United States, 425 U.S. 341, 96 S.Ct. 1612, 48 L.Ed.2d 1 (1976).
"[T]he right of silence described in those warnings derives from the Fifth Amendment and adds nothing to it. Although Miranda's requirement of specific warnings creates a limited exception to the rule that privileges must be claimed, the exception does not apply outside the context of the inherently coercive custodial interrogations for which it was formed." Roberts v. United States, supra, 445 U.S. at 560, 100 S.Ct. at 1364, 63 L.Ed.2d at 631. "The sole concern of the Fifth Amendment, on which Miranda was based, is governmental coercion. Indeed, the Fifth Amendment privilege is not concerned `with moral and psychological pressures to confess emanating from sources other than official coercion.'" Colorado v. Connelly, 479 U.S. 157, 169, 107 S.Ct. 515, 523, 93 L.Ed.2d 473, 486 (1986).
The Supreme Court explained in Beckwith v. United States, supra, that:
The narrow issue before the Court in Miranda was presented very precisely in the opening paragraph of that opinion `the admissibility of statements obtained from an individual who is subjected to custodial police interrogation.' The Court concluded that compulsion is `inherent in custodial surroundings,' and, consequently, that special safeguards were required in the case of `incommunicado interrogations of individuals in a police dominated atmosphere, resulting in self-incriminating statements without full warnings of constitutional rights.' In subsequent decisions, the Court specifically stressed that it was the *351 custodial nature of the interrogation which triggered the necessity for adherence to the specific requirements of its Miranda holding.
425 U.S. at 345-46, 96 S.Ct. at 1615-16, 48 L.Ed.2d at 7. (Emphasis in original, citations omitted).[4]
Miranda and subsequent cases explained that, "[b]y custodial interrogation, we mean questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom in any significant way." Miranda v. Arizona, supra, 384 U.S. at 444, 86 S.Ct. at 1612, 16 L.Ed.2d at 706; California v. Beheler, supra, 463 U.S. at 1123, 103 S.Ct. at 3519, 77 L.Ed.2d at 1278; Oregon v. Mathiason, supra, 429 U.S. at 494, 97 S.Ct. at 713, 50 L.Ed.2d at 719.
The meaning of the phrase "or otherwise deprived of his freedom in any significant way," was unclear until the Supreme Court's decision in Berkemer v. McCarty, supra, wherein the Court explained:
Petitioner contends that a holding that every detained motorist must be advised of his rights before being questioned would constitute an unwarranted extension of the Miranda doctrine.
* * * * * *
It must be acknowledged at the outset that a traffic stop significantly curtails the `freedom of action' of the driver and the passengers, if any, of the detained vehicle.
* * * * * *
However, we decline to accord talismanic power to the phrase in the Miranda opinion emphasized by respondent [i.e. "or otherwise deprived of his freedom in any *352 significant way"]. Fidelity to the doctrine announced in Miranda requires that it be enforced strictly, but only in those types of situations in which the concerns that powered the decision are implicated. Thus, we must determine whether a traffic stop exerts upon a detained person pressures that sufficiently impair his free exercise of his privilege against self-incrimination to require that he be warned of his constitutional rights.
468 U.S. at 436-37, 104 S.Ct. at 3148-49, 82 L.Ed.2d at 332-33. (Emphasis added).
It has been suggested that Berkemer affords "a measure of flexibility in deciding exactly when a suspect has been taken into custody." Commonwealth v. Bruder, 365 Pa. Super. 106, 111, 528 A.2d 1385, 1387 (1987). This is true. However, while the Berkemer holding is certainly flexible, it does not leave us without guidance. The Court in Berkemer explained further:
[T]he usual traffic stop is more analogous to a so-called `Terry stop,' than to a formal arrest. Under the Fourth Amendment, we have held, a policeman who lacks probable cause but whose `observations lead him reasonably to suspect' that a particular person has committed, is committing, or is about to commit a crime, may detain that person briefly in order to `investigate the circumstances that provoke suspicion.' `[T]he stop and inquiry must be "reasonably related in scope to the justification for their initiation."' Typically, this means that the officer may ask the detainee a moderate number of questions to determine his identity and to try to obtain information confirming or dispelling the officer's suspicions. But the detainee is not obliged to respond. And, unless the detainee's answers provide the officer with probable cause to arrest him, he must then be released. The comparatively nonthreatening character of detentions of this sort explains the absence of any suggestion in our opinions that Terry stops are subject to the dictates of Miranda. The similarly noncoercive aspect of ordinary *353 traffic stops prompts us to hold that persons temporarily detained pursuant to such stops are not `in custody' for the purposes of Miranda.
Respondent contends that to `exempt' traffic stops from the coverage of Miranda will open the way to widespread abuse. Policemen will simply delay formally arresting detained motorists, and will subject them to sustained and intimidating interrogation at the scene of their initial detention.
* * * * * *
We are confident that the state of affairs projected by respondent will not come to pass. It is settled that the safeguards prescribed by Miranda become applicable as soon as a suspect's freedom of action is curtailed to a `degree associated with formal arrest.' If a motorist who has been detained pursuant to a traffic stop thereafter is subjected to treatment that renders him `in custody' for practical purposes, he will be entitled to the full panoply of protections prescribed by Miranda.
468 U.S. at 439-40, 104 S.Ct. at 3150, 82 L.Ed.2d at 334-35. (Emphasis added, citations omitted); cf. Commonwealth v. Gonzalez, 519 Pa. 116, 546 A.2d 26, 29-30 (1988) (applying Berkemer and concluding that the appellant was not in "custody" despite his statutory duty to remain at the scene of the accident when he was not formally arrested but was merely asked a minimal number of questions at the scene of an accident on a public street).
The clear import of Berkemer is that traffic stops, like Terry stops, constitute investigative rather than custodial detentions, unless under the totality of circumstances the conditions and duration of the detention become the functional equivalent of an arrest. See Commonwealth v. Douglass, 372 Pa.Super. 227, 244, 539 A.2d 412, 421 (1988) (per Kelly, J.; Wieand and Popovich, JJ., concur in the result). The question in the instant case, then, is whether appellant's encounter with the police was custodial or non-custodial.
*354 Encounters with police may be classified as mere encounters, non-custodial detentions,[5] custodial detentions and formal arrests. See Commonwealth v. Douglass, supra, 372 Pa.Superior Ct. at 238, 539 A.2d at 417; see generally Lafave, Classifying Detentions of the Person to Resolve Warrant Grounds and Search Issues, 17 U.Mich.J. L.Ref. 417, 417-38 (1984); McGinley, Characterizing Police Encounters Under the Fourth Amendment: Inquiry, Stop, Arrest? 10 Search & Seizure L.Rptr. 157, 157-64 (1988); Williamson, The Dimensions of Seizure: The Concepts of "Stop" and "Arrest," 43 Ohio St.L.J. 771, 771-818 (1982). The classification of the encounter determines the applicability and scope of constitutional protections, including Miranda rights.
A "mere encounter" is one which does not involve a seizure of the person. A seizure of a person sufficient to trigger the protections of the Fourth Amendment occurs "only if, in view of all the circumstances surrounding the incident, a reasonable person would have believed he was not free to leave." Michigan v. Chesternut, 486 U.S. ___, ___, 108 S.Ct. 1975, 1979, 100 L.Ed.2d 565, 572 (1988); see also INS v. Delgado, 466 U.S. 210, 215, 104 S.Ct. 1758, 1762, 80 L.Ed.2d 247, 254 (1984); United States v. Mendenhall, 446 U.S. 544, 554, 100 S.Ct. 1870, 1877, 64 L.Ed.2d 497, 508 (1980) (plurality).
It is important to note, however, that while a "seizure" of a suspect by police triggers Fourth Amendment protections, it does not trigger Miranda rights under the Fifth Amendment. "Seizure" and "custody" are analytically distinct concepts in the modern criminal constitutional law lexicon. The mere fact that an individual is subjected to a stop and a period of detention during which the individual is subject to the control of the police and is not free to leave (a seizure) does not render such detention necessarily "custodial" so as to require Miranda warnings. *355 "While a suspect may certainly walk away from a mere encounter with a police officer, every traffic stop and every Terry stop involves a stop and a period of time during which the suspect is not free to go but is subject to the control of the police officer detaining him." Commonwealth v. Douglass, supra, 372 Pa.Superior Ct. at 242, 539 A.2d at 419. See also Berkemer v. McCarty, supra, 468 U.S. at 439-40, 104 S.Ct. at 3150, 82 L.Ed.2d at 334-35 (though a "traffic stop significantly curtails the freedom of action of the driver and the passengers, if any, of the detained vehicle," "the non-coercive aspect of ordinary traffic stops prompts us to hold that persons temporarily detained pursuant to such stops are not `in custody,'" unless the suspect "thereafter is subjected to treatment that renders him `in custody' for practical purposes"); Michigan v. Long, 463 U.S. 1032, 1051, 103 S.Ct. 3469, 3482, 77 L.Ed.2d 1201, 1221 (1984) ("[d]uring any investigative detention, the suspect is `in the control' of the officers in the sense that he `may be briefly detained against his will. . . .'"); Commonwealth v. White, supra, 358 Pa.Superior Ct. at 131, 516 A.2d at 1217 ("every Terry stop involves both a stop and a period of detention during which the suspect is not free to leave but is subject to the control of the police officer").
Though both Terry and Berkemer involved brief detentions, it is important to recall that:
In assessing whether a detention is too long in duration to be justified as an investigative stop, we consider it appropriate to examine whether the police diligently pursued a means of investigation that was likely to confirm or dispel their suspicions quickly, during which time it was necessary to detain the [suspect]. A court making this assessment should take care to consider whether the police are acting in a swiftly developing situation, and in such cases the court should not indulge in unrealistic second guessing.
Commonwealth v. White, supra, 358 Pa.Superior Ct. at 128, 516 A.2d at 1215, quoting Commonwealth v. Mayo, 344 Pa.Super. 336, 341-42, 496 A.2d 824, 826 (1985), quoting *356 United States v. Sharpe, 470 U.S. 675, 686, 105 S.Ct. 1568, 1575-76, 84 L.Ed.2d 605, 615-16 (1985) (rejecting per se time limits).[6]
Indeed, police detentions only become "custodial" when under the totality of circumstances the conditions and/or duration of the detention become so coercive as to constitute the functional equivalent of formal arrest. See Commonwealth v. Douglass, supra, 372 Pa.Superior Ct. at 239, 539 A.2d at 418; see also California v. Beheler, supra, 463 U.S. at 1125, 103 S.Ct. at 3520, 77 L.Ed.2d at 1279 (per curiam, Miranda applies when suspect is restrained to a degree associated with formal arrest); Dunaway v. New York, supra, 442 U.S. at 212, 99 S.Ct. at 2256, 60 L.Ed.2d at 835-36 (seizing, transporting, and then questioning a suspect at a police station was custodial as it was "in important respects indistinguishable from a traditional arrest"); Oregon v. Mathiason, supra, 429 U.S. at 495, 97 S.Ct. at 714, 50 L.Ed.2d at 719 (suspect who voluntarily accompanied police to stationhouse for questioning was not "in custody" where degree of restraint was not equivalent to that associated with formal arrest); Commonwealth v. Gonzalez, supra, 519 Pa. at 124, 546 A.2d at 30 ("appellant was not under arrest and he has not shown that he was subjected to restraints comparable to those associated with formal arrest").
Among the factors which may be considered in determining whether a detention is custodial are: the basis for the detention (the crime suspected and the grounds for *357 suspicion); the duration of the detention; the location of the detention (public or private); whether the suspect was transported against his will (how far, why); the method of the detention (restraints utilized); the show, threat or use of force; and the investigative methods used to confirm or dispel suspicions. Commonwealth v. Douglass, supra, 372 Pa.Superior Ct. at 245, 539 A.2d at 421, citing 3 LaFave, Search and Seizure, §§ 9.1, 9.2 at 332-422 (2d Ed. 1987); see also LaFave, supra, 17 U.Mich.J.L.Ref. at 417-38; McGinley, supra, 10 Search & Seizure L.Rptr. at 157-64; Williamson, supra, 43 Ohio St.L.J. at 771-818.
Examples of "totality of the circumstances" reviews may be found in Commonwealth v. Gonzalez, supra, 519 Pa. at 124-126, 546 A.2d at 30, Commonwealth v. Douglass, supra, 372 Pa.Superior Ct. at 245-247, 539 A.2d at 421-23, Commonwealth v. Fento, 363 Pa.Super. 488, 498-99, 526 A.2d 784, 786-89 (1987), Commonwealth v. Grove, 363 Pa.Super. 328, 340-41 & n. 7, 526 A.2d 369, 375-76 & n. 7 (1987), and Commonwealth v. White, supra, 358 Pa.Superior Ct. at 131, 516 A.2d at 1217. These cases, and the federal cases previously cited, indicate that a review of several if not all of the factors noted above will ordinarily be required (rather than focusing on factors such as the time or location of the detention to the exclusion of other factors). We note, however, that the Supreme Court cautioned in California v. Beheler, supra, that:
Although the circumstances of each case must certainly influence a determination of whether a suspect is `in custody' for purposes of receiving Miranda protection, the ultimate inquiry is simply whether there is a `formal arrest or restraint on freedom of movement' of the degree associated with a formal arrest.
463 U.S. at 1125, 103 S.Ct. at 3520, 77 L.Ed.2d at 1279. (Emphasis added).
The instant case is in its material aspects indistinguishable from Commonwealth v. Fento, supra, wherein this Court held that a driver receiving emergency room treatment for injuries received in an automobile accident *358 was not subjected to a custodial interrogation requiring the Miranda warnings when he was questioned briefly in a hospital emergency room by a police officer investigating the automobile accident, despite the confinement of the suspect to his hospital bed due to his injuries. As in Fento, appellant here was questioned in an open area of the hospital emergency ward in view of hospital personnel. The questioning was brief and related to the occurrence which caused the injuries being treated. Appellant was not placed under arrest before, during, or after the questioning. The only restraints upon appellant's freedom were those caused by his medical condition, as opposed to any action on the part of the police.[7] We conclude, therefore, that appellant was not "in custody" and that the Miranda warnings were not required. Cf. Commonwealth v. Gonzalez, supra (similar questioning of a driver at the scene of an accident); accord State v. Clappes, 117 Wisc. 277, 344 N.W.2d 141 (1984); State v. Fields, 294 N.W.2d 404 (N.D. 1980); State v. Brunner, 211 Kan. 596, 507 P.2d 233 (1973).
The cases cited by appellant do not support the conclusions appellant urges. Commonwealth v. Chacko, supra, cited by appellant, involved police questioning of a defendant who was incarcerated on unrelated charges; thus, Chacko is factually distinguishable in material respects regarding the issue of custody and is therefore inapposite. Commonwealth v. D'Nicuola, supra, and Commonwealth v. Bordner, supra, also cited by appellant, are not controlling *359 because they were both decided under the "focus of the investigation" analysis subsequently disapproved by the United States Supreme Court in Beckwith v. United States, supra. See Commonwealth v. Fento, supra, 363 Pa.Superior Ct. at 496, 526 A.2d at 788 (analyzing and distinguishing D'Nicuola and other similar cases). Consequently, we find no merit in appellant's contention that his statements at the hospital should have been suppressed.
III. PRIOR CONVICTION IMPEACHMENT EVIDENCE
Appellant next contends that the trial court erred in permitting the use of his six year old convictions for theft and receiving stolen property to impeach his credibility. As the convictions were less than ten years old and involved crimen falsi offenses, this contention is wholly without merit. See Commonwealth v. Randall, 515 Pa. 410, 528 A.2d 1326 (1987).
IV. SUFFICIENCY AND WEIGHT OF THE EVIDENCE
Finally, appellant contends that the evidence is not sufficient to sustain the convictions, or in the alternative that the verdicts were against the weight of the evidence. Appellant argues that reasonable inferences derivable from the testimony of Commonwealth witnesses and certain physical evidence established that appellant could not have poured the gasoline and lit the fire. Appellant also argues that there was no evidence to sustain the reckless endangerment conviction.
This Court explained in Commonwealth v. Pearsall, 368 Pa.Super. 327, 534 A.2d 106 (1987), that:
In reviewing the sufficiency of the evidence to support a conviction, the evidence must be viewed in the light most favorable to the Commonwealth, and the Commonwealth is entitled to all favorable inferences which may be drawn from the evidence. Where the evidence is conflicting, it is the province of the fact finder to determine *360 credibility; it is the prerogative of the fact finder to believe all, part or none of the evidence presented. Whether a new trial should be granted because the verdict is against the weight of the evidence is an issue addressed to the sound discretion of the trial court; a new trial should be granted only when the verdict is so contrary to the evidence as to shock one's sense of justice.
368 Pa.Superior Ct. at 329-330, 534 A.2d at 108. (Citations omitted, emphasis added).
Appellant errs in viewing the evidence in the light most favorable to appellant, in resolving all conflicts in favor of appellant, and in drawing all inferences in favor of appellant. Viewed in its proper light (i.e. that most favorable to the Commonwealth), the evidence is sufficient to sustain the verdict, and the verdict is not against the weight of the evidence.
Without proceeding to review the evidence here in minute detail, we note that: appellant owned and insured the mortgaged property; appellant was unquestionably present when the fire occurred; the evidence plainly established that the fire was started with the aid of a large amount of gasoline; yet, appellant informed the police shortly after the fire that no gasoline was in the kitchen and that the fire had started when the stove (which the fire investigators found to be without leak or defect) exploded. With respect to the endangerment offense, we note that both appellant and the other person present were severely burned in the fire, the fire occurred during a holiday time, near a busy intersection, and appellant risked a serious explosion by turning on the gas stove in an effort to cloak the use of gasoline as a flame accelerant. We find no reason to disturb the verdicts of the jury, or the order of the trial court denying appellant a new trial.
CONCLUSION
Based upon the foregoing, judgment of sentence is affirmed.
NOTES
[1] The clothing was not used against appellant at trial and the legality of its seizure is not before us in this appeal.
[2] "Overhaul" of a fire scene is "a standard procedure whereby fire fighters search for indications that an extinguished fire could rekindle." See State v. Moretti, 521 A.2d 1003, 1004 (R.I. 1987).
[3] Courts of our sister states have reached the same conclusion in similar cases. In State v. Moretti, 521 A.2d 1003 (R.I. 1987), the Rhode Island Supreme Court rejected a claim that a warrantless fire investigation search was unreasonable because the fire inspector had not arrived at the fire scene until after the fire was extinguished and the firemen had begun overhaul efforts. Likewise, in State v. Jorgensen, 333 N.W.2d 725 (S.D. 1983), the Supreme Court of South Dakota rejected a claim that a warrantless fire investigation search was unreasonable when the Fire Chief and a Deputy State Fire Marshal arrived at the scene after the fire had been extinguished. Accord Shultz v. State, 593 P.2d 640 (1979). We also note Davis v. State, 178 Ga.App. 760, 344 S.E.2d 730 (1986), wherein the Court of Appeals of Georgia held that a warrantless fire investigation search was reasonable when the fire was discovered at 11:00 p.m., extinguished by approximately 2:00 a.m., and two firemen remained at the site to check for hot spots until 7:00 a.m., when the assistant fire chief and state inspectors arrived to conduct the fire investigation search. The court explained:
Keeping the two firemen at the scene was prudent and we do not find the duration of their vigil (approximately five hours) to have been unreasonable. Thus, because the authorized official entry had not terminated before the assistant fire chief returned, the appellant's reasonable expectations of privacy did not extend to the warrantless investigation of the cause of the fire and collection of samples from the house.
344 S.E.2d at 732. The intrusion upon privacy interests in the present case was of a substantially shorter duration than that approved in Davis.
[4] The Court quoted with approval the observation of Chief Judge Lumbard of the Second Circuit Court of Appeals that, "it was the compulsive aspect of custodial interrogation, and not the strength or content of the government's suspicions at the time the questioning was conducted, which led the court to impose the Miranda requirements with regard to custodial questioning." Id., 425 U.S. at 346-47, 96 S.Ct. at 1616-17, 48 L.Ed.2d at 7-8, quoting United States v. Carello, 420 F.2d 471, 473 (2d Cir. 1969).
[5] Such encounters with police are also commonly referred to as Terry stops, traffic stops, investigatory detentions and intermediate detentions.
[6] Accord United States v. Montoya De Hernandez, 473 U.S. 531, 542, 105 S.Ct. 3304, 3311, 87 L.Ed.2d 381, 392 (1985) (applying Sharpe; again rejecting per se time limits; and, holding that a 16 hour detention was reasonable under the circumstances of that case); Michigan v. Summers, 452 U.S. 692, 702 & n. 12, 101 S.Ct. 2587, 2593 & n. 12, 69 L.Ed.2d 340, 348 & n. 12 (1981) (noting that "[i]f purpose underlying a Terry stop investigating possible criminal activity is to be served, the police must under certain circumstances be able to detain the individual for longer than the brief time period involved in Terry and Adams"); Commonwealth v. Douglass, supra, 372 Pa.Superior Ct. at 245-246, 539 A.2d at 421-22 (classifying a three hour detention as a reasonable investigative detention under the circumstances of that case).
[7] Officer Egan candidly admitted that he had asked the dispatcher to have an officer sent to detain the witnesses until he arrived. However, both Officer Patchell and Officer Hunger unequivocally denied speaking to either witness or in any way restraining their freedom of movement. The trial court apparently credited their testimony. We note that Officer Egan's unexecuted and uncommunicated intent to have appellant detained is not relevant to our determination of whether appellant was in custody. "[T]he subjective intent of the officers is relevant to an assessment of the Fourth Amendment implications of police conduct only to the extent that the intent has been conveyed to the person confronted." Michigan v. Chesternut, supra, 486 U.S. at ___ n. 7, 108 S.Ct. at 1980 n. 7, 100 L.Ed.2d at 573 n. 7 (1988), citing United States v. Mendenhall, supra, 446 U.S. at 554 n. 6, 100 S.Ct. at 1877 n. 6, 64 L.Ed.2d at 509 n. 6, and 3 LaFave, Search and Seizure, § 9.2(h) at 407 (2d ed. 1987). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260568/ | 124 Cal.Rptr.2d 857 (2002)
101 Cal.App.4th 1133
VILLAGE TRAILER PARK, INC., Petitioner,
v.
SANTA MONICA RENT CONTROL BOARD, Respondent, Vernon Van WIE et al., Real Parties in Interest.
No. B153024.
Court of Appeal, Second District, Division Two.
September 6, 2002.
As Modified September 24, 2002.
Review Denied November 26, 2002.
*860 Law Offices of Rosario Perry, Rosario Perry, Santa Monica, for Petitioner Village Trailer Park, Inc.
Doris M. Ganga, General Counsel, Joel Martin Levy, Staff Attorney, for Respondent Santa Monica Rent Control Board.
No appearance for Real Parties in Interest.
BOREN, P.J.
This dispute concerns the Santa Monica rent control law. The owner of a trailer park argues that the Santa Monica Rent Control Board has no jurisdiction to determine whether mobilehome leases are subject to rent control. The trial court found that the rent control board is entitled to determine whether the leases are exempt from rent control, and is authorized to impose excess rent penalties; however, the court remanded the matter to the rent control board for further proceedings. Both parties have appealed.
There is no final, appealable judgment. Nevertheless, we choose to treat the purported appeals as petitions for a writ of mandate. We conclude: (1) the rent control board has jurisdiction to determine whether mobilehome leases are exempt from local rent control; (2) an arbitration clause in a mobilehome lease does not prevent the rent control board from applying the rent control law to the landlord; (3) a landlord is not entitled to advance notice of a rent control violation before being assessed for charging excess rent; (4) the rent control board may award the tenant interest on the excess rent collected by the landlord; and (5) the board may exclude annual rent increases when calculating the amount of excess rent to induce the landlord to comply with the rent control law.
FACTS AND PROCEDURAL HISTORY
Village Trailer Park, Inc. (Village) operates its business in the City of Santa Monica (the City). The Santa Monica City Charter (City Charter), article XVIII, contains a rent control law (the Rent Control Law). The Rent Control Law is administered by the City's rent control board (the Board).
In 1999, 12 of Village's tenants filed complaints with the Board alleging that Village violated the Rent Control Law by charging "excess rent." Village objected that the Board has no jurisdiction to decide whether the tenants' leases are subject to (or exempt from) the Rent Control Law, and requested that the administrative proceedings be dismissed.
Village's objection was overruled by the administrative hearing officer, who proceeded to take evidence to determine if the leases at issue are exempt from rent control pursuant to the state Mobilehome Residency Law (MRL). (Civ.Code, § 798 et seq.) The hearing officer found that Village's leases do not satisfy the requirements for exemption under the MRL and are subject to the Rent Control Law. The tenants were awarded restitution of the excess rent. The total amount awarded to the 12 tenants was $63,677.87, including interest.
Village pursued an administrative appeal, renewing its argument that the Board has no power to interpret the MRL or invalidate the leases. The Board rejected Village's argument and adopted the hearing officer's decision.
Village petitioned the trial court for a writ of mandate. The trial court found that the Board's exercise of its administrative power did not violate the state constitutional clause regarding judicial powers, nor is the Board's action preempted by the MRL. In addition, the court concluded that the arbitration clause in the leases does *861 not bar administrative rent control regulation and that the Board's award of interest is authorized by the Rent Control Law. Finally, the court determined that the manner in which damages were calculated exceeded the Board's power. The court remanded the matter to the Board to reconsider the manner in which it calculated damages.
DISCUSSION
Appealability
The judgment partly granted the writ petition and remanded the proceeding to the Board. The peremptory writ of mandate commands the Board "to reconsider your action" with respect to the calculation of damages. A remand order to an administrative body is not appealable. (Board of Dental Examiners v. Superior Court (1998) 66 Cal.App.4th 1424, 1430, 78 Cal.Rptr.2d 653.) We may, however, exercise our discretion and treat an appeal as a petition for a writ of mandate. (Ibid.) This is an appropriate case for the exercise of our discretion; therefore, we treat the appeals from a nonappealable order as writ petitions.
Village's Appeal
1. The MRL Preemption Issue
The trial court concluded that the MRL does not preempt the City's rent control law. Village complains that the trial court erroneously relied upon the Board's interpretation of the MRL, and asserts that the local rent control law is preempted by state law.
Review of this issue is de novo. "[W]e independently determine the proper interpretation of the statute. As the matter is a question of law, we are not bound by evidence on the question presented below or by the lower court's interpretation." (Burden v. Snowden (1992) 2 Cal.4th 556, 562, 7 Cal.Rptr.2d 531, 828 P.2d 672.) Our objective is to ascertain and implement legislative intent by examining the statutory language with reference to the entire system of law of which it is a part. (Ibid.; American Federation of State etc. Employees v. County of San Diego (1992) 11 Cal.App.4th 506, 515, 14 Cal.Rptr.2d 51.) In an administrative mandamus proceeding, the court determines whether an agency has acted under an incorrect legal interpretation of a statutory provision. (Hawthorne Savings & Loan Assn. v. City of Signal Hill (1993) 19 Cal.App.4th 148, 157, 23 Cal.Rptr.2d 272.)
Local legislation cannot conflict with state law. "`A conflict exists if the local legislation "`duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication.'"'" (Sherwin-Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 893, 897, 16 Cal.Rptr.2d 215, 844 P.2d 534.) When a conflict arises between state and local laws, state law preempts the local legislation. (Ibid.)
The MRL does not prohibit local regulation of rents in mobilehome parks. (Griffith v. County of Santa Cruz (2000) 79 Cal.App.4th 1318, 1323, 94 Cal.Rptr.2d 801; Polos Verdes Shores Mobile Estates, Ltd. v. City of Los Angeles (1983) 142 Cal. App.3d 362, 373-374, 190 Cal.Rptr. 866.) Instead, the MRL delineates the limited circumstances under which a mobilehome rental agreement is exempt from local rent control measures. (Civ.Code, § 798.17.)[1] Village does not point to *862 any aspect in which the Rent Control Law "`"`duplicates, contradicts, or enters an area fully occupied""" by the MRL. (Sherwin-Williams v. City of Los Angeles, supra, 4 Cal.4th at p. 897, 16 Cal.Rptr.2d 215, 844 P.2d 534.)
Village relies on a case that does not address any conflict between the City's Rent Control Law and state law. The case, Mobilepark West Homeowners Assn. v. Escondido Mobilepark West (1995) 35 Cal.App.4th 32, 41 Cal.Rptr.2d 393 (Escondido ), concerned the validity of rent control ordinances adopted by the City of Escondido, which imposed additional requirements for long-term mobilehome lease agreements that went beyond the requirements provided in Civil Code section 798.17. In dicta, the appellate court stated that the additional requirements of the Escondido ordinances contradicted the MRL.[2]
Escondido is inapposite. Unlike the landlord in Escondido, Village does not contend that the Rent Control Law adds any further or contradictory requirements to Civil Code section 798.17. The appellate court's concern in Escondido was whether the Escondido City Council attempted to rewrite state law. The court in Escondido did not consider whether the city usurped a judicial function by applying Civil Code section 798.17 to a particular case.
Rent control of mobilehome parks is a valid exercise of the City's police power as "a rational curative measure" designed to alleviate a shortage of mobilehome spaces and rising rental rates. (Carson Mobilehome Park Owners' Assn. v. City of Carson (1983) 35 Cal.3d 184, 189, fn. 4, 197 Cal.Rptr. 284, 672 P.2d 1297.) The Board is vested with authority to administer and enforce the Rent Control Law. (Richman v. Santa Monica Rent Control Bd. (1992) 7 Cal.App.4th 1457, 1459, 9 Cal.Rptr.2d 690.) When the Board heard the tenants' claim that Village was violating the Rent Control Law by charging excess rents, the burden fell upon Village to present evidence proving that some or all of the leases in question are exempt from local regulation.
"An administrative agency may constitutionally hold hearings, determine facts, apply the law to those facts, and order reliefincluding certain types of monetary reliefas long as (i) such activities are authorized by statute or legislation and are reasonably necessary to effectuate the administrative agency's primary, legitimate regulatory purposes, and (ii) the `essential' judicial power (i.e., the power to make enforceable, binding judgments) remains ultimately in the courts, through review of agency determinations." (McHugh v. Santa Monica Rent Control Bd. (1989) 49 Cal.3d 348, 372, 261 Cal. Rptr. 318, 777 P.2d 91.)
The Board's administration and enforcement of the Rent Control Law includes setting and regulating rents in the local housing market, as is authorized by the City Charter. Issuing excess rent decisions, though judicial in nature, is reasonably necessary to accomplish the Board's primary legitimate regulatory purposes. (McHugh v. Santa Monica Rent Control Bd., supra, 49 Cal.3d at p. 375, 261 Cal. *863 Rptr. 318, 777 P.2d 91.) The Board cannot be prevented from carrying out its regulatory function every time a landlord claims its leases are exempt from rent control. The landlord must present evidence at the administrative hearing that its mobilehome leases are exempt and the Board must apply Civil Code section 798.17 to resolve the question. If the landlord disagrees with the Board's application of section 798.17, judicial review is available by way of a petition for a writ of mandate.
Determining whether a mobilehome lease is exempt from rent control is not an exclusively judicial function. "Statutory interpretation is ultimately a judicial function. `Nevertheless, "the contemporaneous construction of a statute by an administrative agency charged with its administration and interpretation, while not necessarily controlling, is entitled to great weight and should be respected by the courts unless it is clearly erroneous or unauthorized...."'" (Carson Harbor Village, Ltd. v. City of Carson Mobilehome Park Rental Review Bd. (1999) 70 Cal. App.4th 281, 290, 82 Cal.Rptr.2d 569.) The same standard applies to local ordinances. (Ibid.; Van Wagner Communications, Inc. v. City of Los Angeles (2000) 84 Cal.App.4th 499, 509, fn. 9, 100 Cal.Rptr.2d 922.)
The threshold exemption question presented to the Board is analogous to the question presented to a state agency in Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 4 Cal.Rptr.2d 837, 824 P.2d 643. In Lusardi, the Director of the Department of Industrial Relations initiated action against a building contractor who was working on a public hospital, but was not paying its employees prevailing wage rates. The contractor objected that the Director did not have authority to determine whether a construction project is a "public work" subject to the prevailing wage rule. The Supreme Court rejected the contractor's argument, finding that even though there was no express statutory authorization, the Director's function of promoting the welfare of California wage earners gives him an implied power to interpret statutes to determine whether a construction project is a "public work" subject to prevailing wage regulations. (Id. at pp. 988-989, 4 Cal.Rptr.2d 837, 824 P.2d 643.)
The same reasoning applies here. Although Civil Code section 798.17 does not expressly direct rent control boards to determine whether a mobilehome lease is exempt from regulation, authority to make this determination may be implied from the local agency's function of enforcing local laws prohibiting landlords from charging excess rents.[3] The local rent control agency's determination is, of course, subject to judicial review. "Administrative adjudication in the course of exercising an administrative agency's regulatory power, if subject to judicial review, does not deny participants their right to judicial determination of their rights." (Hensler v. City of Glendale (1994) 8 Cal.4th 1, 15, 32 Cal.Rptr.2d 244, 876 P.2d 1043.) By applying Civil Code section *864 798.17 to the leases before it, the Board did not usurp a judicial function.
2. Application of Civil Code Section 798.17
Village was afforded a lengthy evidentiary hearing. The administrative record is several thousand pages long. The Board determined that Village's mobilehome leases do not satisfy the requirements of Civil Code section 798.17 and are not exempt from rent control. Though Village pursued judicial review by filing a petition for a writ of mandate, it has not argued in the trial court or in this court that the Board's determination is factually insupportable. Village maintains that the Board exceeded its jurisdiction, but it has not taken the next step of elucidating why the Board's factual and legal conclusions are incorrect. Absent any effort by Village to point to evidence that would establish its claim to an exemption under Civil Code section 798.17, the argument is waived. We must assume that the Board's determination is fully supported by the evidence, and that Village is not entitled to an exemption under Civil Code section 798.17.
3. Village's Right to Arbitration
The leases signed by Village's tenants include an arbitration clause. The leases state that "any dispute between us with respect to the provisions of this agreement and tenancy in the community shall be submitted to arbitration conducted under the provisions of Code of Civil Procedure section 1280, et seq." Village maintains that the arbitration clause removes its leases from the ambit of the Rent Control Law.
There are several problems with Village's argument. First, Village cannot exempt itself from the operation of local law by simply announcing that its leases are subject to arbitration. If this were the case, every landlord would similarly announce a personal exemption from the law, thereby undermining a local government's legitimate exercise of its police power. (See Carson Mobilehome Park Owners' Assn. v. City of Carson, supra, 35 Cal.3d at p. 189, fn. 4, 197 Cal.Rptr. 284, 672 P.2d 1297.) Second, the Board is not a party to the leases and is not bound by any arbitration clause or declaration of exemption from rent control. Third, the leases by their own terms state that rent control laws do not apply to the tenancies; therefore, the parties did not contemplate that a dispute over rent control would be an arbitrable matter. Fourth, the local ordinance voids any provision in a rental agreement that purports to waive a tenant's right to pursue a claim under the Rent Control Law. Village's leases are thus void to the extent that they limit tenants' rights to file claims with the Board.
4. Due Process
Village asserts that its right to due process was violated because it had no advance notice that its lease agreements failed to satisfy the exemption requirements listed in the MRL, or that it was subject to the Rent Control Law. Village complains that it was not given notice or an opportunity to comply with the requirements of the MRL before it was obliged to repay its tenants the excess rent it charged in violation of the Rent Control Law.
All landlords in the City are subject to the Rent Control Law, unless they can establish their right to an exemption. The provisions of the MRL are clear with respect to what a landlord must do to avoid rent control. According to the administrative findings (the substance of which are not challenged on appeal), Village's leases did not specify that they were for a term of more than 12 months; the tenants were *865 not offered a 30-day period for acceptance or rejection of the agreements; and they were not given a 72-hour period to void the agreements.[4] Village's failure to comply with the mandates of the MRL does not protect Village from an assessment of excess rent for a violation of the Rent Control Law. A landlord who has ignored the dictates of state and local law cannot legitimately argue it has no notice of its wrongdoing until an administrative body or court rules on the issue.
5. Assessment of Interest
Village contends that the Rent Control Law does not authorize the assessment of interest. In support of its argument, Village cites a provision of the City Charter stating that a landlord is liable for excess rent "and may be liable for an additional amount not to exceed Five Hundred Dollars ($500), for costs, expenses incurred in pursuing the hearing remedy, damages and penalties." (City Charter, art. XVII, § 1809, subd. (b).) From this, Village deduces that the Rent Control Law does not allow for interest.
As it turns out, the Board adopted regulations in 1990 that allow for an assessment of interest. The Rent Control Law expressly authorizes the Board to issue rules and regulations to further the purposes of the law. (City Charter, art. XVII, § 1803, subd. (g).) Regulation 8030 provides that the landlord, in addition to making restitution to the tenant, is liable for "an award of interest of up to $500 on the amount of the excess rent for the period of time during which such excess rent was retained prior to the date of the filing of the complaint. The applicable rate of interest shall be the rate specified by law (California Constitution, Article XV) and shall be simple interest." The administrative decision in this case imposed interest pursuant to regulation 8030.
Village believes that section 1809 of the City Charter conflicts with regulation 8030. "`The scope of our review of an administrative agency's regulations is limited: we consider whether the challenged provisions are consistent and not in conflict with the enabling statute and reasonably necessary to effectuate its purpose. [Citation.] As a general proposition, administrative regulations are said to be "shielded by a presumption of regularity" [citation] and presumed to be "reasonable and lawful." [Citation.] The party challenging such regulations has the burden of proving otherwise. [Citation.]'" (301 Ocean Avenue Corp. v. Santa Monica Rent Control Board (1985) 175 Cal.App.3d 149, 154, 221 Cal.Rptr. 610.) "If the Regulations' necessity is reasonably debatable, we cannot second-guess the legislative determination." (Id. at p. 157, 221 Cal.Rptr. 610.)
The "damages and penalties" language contained in section 1809 of the City Charter encompasses an award of interest. "The lack of express authorization for interest ... is not significant: `Such a provision would be redundant, as the Legislature provided elsewhere, and generally, in Civil Code section 3287 ... for the recovery of interest ... the right to recover which is vested in the claimant on a particular day.'" (Currie v. Workers' Camp. Appeals Bd. (2001) 24 Cal.4th 1109, 1116, 104 Cal.Rptr.2d 392, 17 P.3d 749.) In Currie, the Supreme Court concluded that the prejudgment interest awarded by the Workers' Compensation Appeals Board to a bus driver who was terminated for discriminatory reasons made up for "the lost use" of wages he was deprived of before his employer was compelled to reinstate *866 him to his job. (Id. at pp. 1118-1119, 104 Cal.Rptr.2d 392, 17 P.3d 749.) Similarly, an award of interest to Village's tenants makes up for their lost use of rent monies wrongfully collected by Village each month during the period in question.
The Board's Appeal
The trial court found that the Board's "calculation of damages by retroactively revoking all annual rent increases ... constitutes the imposition of a penalty that exceeds the judicial power of the [Board]. By such calculation the [Board] exacts from the landlord more than the tenant would have had to pay if the landlord had complied with the [Rent Control Law]. Such a penalty is not authorized by any statute, and there is no showing that it is necessary to effectuate the administrative agency's primary, legitimate, regulatory purposes."
The Board argues that it did not exceed its power by excluding allowable general adjustments from the maximum lawful rent for purposes of its overcharge calculations. It points to a provision in the Rent Control Law stating, "No landlord shall increase rent under this Article if the landlord: (1) Has failed to comply with any provisions of this Article and/or regulations issued thereunder by the Board...." (City Charter, art. XVIII, § 1805, subd. (h)(1).) Based on this provision, the Board adopted a regulation that excludes rent increases for the preceding three years from the maximum lawful rent, for purposes of calculating overcharges, regulation 8024.
Administrative agencies "regularly exercise a range of powers designed to induce compliance with their regulatory authority (e.g., imposition of fines or penalties, awards of costs and attorney fees)...." (McHugh v. Santa Monica Rent Control Bd., supra, 49 Cal.3d at pp. 378-379, 261 Cal.Rptr. 318, 777 P.2d 91.) An agency cannot impose treble damages because it "poses a risk of producing arbitrary, disproportionate results that magnify, beyond acceptable risks, the possibility of arbitrariness inherent in any scheme of administrative adjudication." (Id. at p. 379, 261 Cal.Rptr. 318, 777 P.2d 91.)
There is nothing arbitrary or disproportionate about the regulatory provision at issue here. The Rent Control Law denies rent increases to landlords who have failed to comply with its provisions. When a landlord fails to comply with the law, as Village did here, the Board does not give the landlord the benefit of implementing regular rent increases that the landlord would have enjoyed had the law been obeyed. By denying regular rent increases to noncompliant landlords, the Board is taking reasonable, nonarbitrary measures to induce compliance with the Rent Control Law. Those who comply with the law get the benefit of authorized rent increases; those who do not comply are not entitled to claim the benefit of a rent increase.
If the inclusion of all unauthorized rent increases in the calculation of damages operates as a penalty upon landlords who fail or refuse to obey the Rent Control Law, it is the kind of permissible penalty agencies may impose to induce compliance with their regulatory authority. (McHugh v. Santa Monica Rent Control Bd., supra, 49 Cal.3d at p. 379, 261 Cal.Rptr. 318, 777 P.2d 91.) The Legislature limits penalties and sanctions against landlords subject to rent control. A landlord who is "in substantial compliance" with local rent control laws cannot be assessed a penalty for noncompliance. (Civ.Code, § 1947.7, subd. (b).) "Substantial compliance" means that the landlord "has made a good faith attempt to comply" with the law and has, after receiving notice of a deficiency, *867 "cured the defect in a timely manner...." (Ibid.)
Village has not shown how it was "in substantial compliance" with the Rent Control Law. Village failed to comply with the MRL's fundamental requirement that a tenant be offered the choice of a shortterm or a long-term lease. (Civ.Code, § 798.17, subd. (c).) According to the unchallenged administrative findings, Village made all of its tenants sign long-term leases declaring an exemption from rent control, even when tenants wanted shortterm, rent-controlled leases. Once the Board alerted Village to its violation of the Rent Control Law, Village made no effort to comply with the law. Under the circumstances, we cannot say that Village substantially complied with the Rent Control Law, or that the Board was precluded from imposing a penalty to induce Village's compliance with the Rent Control Law.
The trial court erred by finding that there is no authority for the Board's calculation of damages; furthermore, including all unauthorized rent increases in the damages calculation helps to effectuate the Board's primary, legitimate regulatory purpose of inducing landlords to comply with the Rent Control Law.
DISPOSITION
The petition for a writ of mandate filed by Village Trailer Park is denied. The petition for a writ of mandate filed by the Santa Monica Rent Control Board is granted. Let a writ of mandate issue directing the trial court to vacate its order remanding the cause to the Rent Control Board for further proceedings. Costs are awarded to the Rent Control Board.
We concur: NOTT and DOI TODD, JJ.
NOTES
[1] The MRL exempts from rent control mobilehome leases that are for a term of more than 12 months, if the homeowner (a) uses the rental as a personal residence, (b) is offered a 30-day period for acceptance or rejection of the rental agreement, (c) is afforded a 72-hour period to void the rental agreement, and (d) is given the choice of signing a short-term lease. (Civ.Code, § 798.17, subds.(b)-(c).)
[2] The court decided at the outset that the Escondido rent control ordinances were invalidly amended by the city council rather than through the initiative process. (Escondido, supra, 35 Cal.App.4th at pp. 40-43, 41 Cal.Rptr.2d 393.) Nevertheless, the court went on to address the substance of the invalid amendments as a matter of public interest. (Id. at p. 43, 41 Cal.Rptr.2d 393.)
[3] We observe that when the Legislature wants to limit the authority of a local rent control agency, it expressly says so. For example, Civil Code section 1947.10 authorizes an award of treble damages against a landlord who evicts a rent-controlled tenant by falsely claiming that the landlord (or his immediate relative) intends to occupy the unit. The statute specifies: "If a court determines that the eviction was based upon fraud by the owner ... a court may order the owner to pay treble the cost of relocating the tenant...." (Civ. Code, § 1947.10, subd. (a), italics added.) No similar limitation conferring power exclusively on the judiciary is stated in Civil Code section 798.17.
[4] See footnote 1, ante. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260570/ | 549 A.2d 1382 (1988)
STATE of Vermont
v.
John E. RECOR.
No. 86-379.
Supreme Court of Vermont.
May 20, 1988.
*1384 Karen Shingler, Chittenden County Deputy State's Atty., Burlington, for plaintiff-appellee.
Thomas J. Donovan, Burlington, for defendant-appellant.
Before ALLEN, C.J., and PECK, GIBSON, DOOLEY and MAHADY, JJ.
DOOLEY, Justice.
Following a jury trial in District Court, Unit No. 2, Chittenden Circuit, defendant was convicted of sexual assault on a child, in violation of 13 V.S.A. § 3252(3). Defendant appeals his conviction and assigns as error, four points. First, defendant claims that he was denied his right to a speedy trial as guaranteed by the Sixth Amendment to the United States Constitution and by Chapter I, Article 10 of the Vermont Constitution. Second, he argues that the trial judge committed reversible error by permitting testimony relating to a prior bad act. Third, defendant contends that the State's expert witness was improperly allowed to testify as to the credibility of the complaining witness. And, finally, he argues that the State's expert witness was permitted to give hearsay testimony which went beyond the exception for statements made for purposes of medical diagnosis or treatment under V.R.E. 803(4). We affirm.
The facts supporting defendant's first claim are as follows. On February 27, 1985, the police issued a citation to defendant to appear and answer on March 25th. The arraignment date was subsequently continued to July 8, 1985 and a trial date set for November 20, 1985. Defendant filed various motions in the interim. One motiona motion to require a psychiatric examination of the victimresulted in a continuation of the trial date. Although the trial date was reset for January 15, 1986, the matter was again continued because the State amended the information to state a time of offense and the defendant filed a motion for a continuance along with various other motions. The trial was set for March 5, 1986 but was again continued. On March 7, 1986, defendant moved for dismissal based on lack of a speedy trial. The court denied the motion, and the defendant was tried on April 24th. Defendant was never incarcerated prior to trial.
We begin our analysis of defendant's claim by notingas we have in the past that "it is `impossible to determine with precision when the right [to speedy trial] has been denied.'" State v. Unwin, 139 Vt. 186, 195, 424 A.2d 251, 257 (1980) (quoting Barker v. Wingo, 407 U.S. 514, 521, 92 S.Ct. 2182, 2187, 33 L.Ed.2d 101 (1972)). And, we further observe that "[t]he right to a speedy trial is a constitutional guarantee that cannot be `quantified into a specified number of days or months.'" State v. Snide, 144 Vt. 436, 442, 479 A.2d 139, 143 (1984) (quoting Barker, 407 U.S. at 523, 92 S.Ct. at 2188). However, there are four factors that are relevant in determining when such a denial has occurred: the length of the delay, the reason for the delay, defendant's assertion of his or her right, and prejudice to the defendant. Id. 144 Vt. at 442, 479 A.2d at 143. Applying these factors to the instant case, we conclude that defendant's claim that he was denied a speedy trial is without merit.
As prejudice is the most important factor in analyzing speedy trial issues, State v. Bristol, 143 Vt. 245, 249, 465 A.2d 278, 280 (1983), we address this element first. Defendant contends that he was subjected to anxiety, embarrassment, and loss of employment *1385 because he was compelled to wait an inordinate amount of time before his case came to trial. This claim of prejudice fails because defendant has not shown any prejudice.
In determining the existence of prejudice, "[t]he most important consideration... is prejudice to the defense at trial." Unwin, 139 Vt. at 197, 424 A.2d at 257. In the instant case, defendant's alleged prejudice focuses exclusively on the stigma naturally attendant to charges of sexual abuse against a child and not on an inability to prepare a defense. Defendant's claim, thus, amounts to nothing more than an "unsupported assertion that delay is per se prejudicial." Bristol, 143 Vt. at 249, 465 A.2d at 280. This claim has no basis in our case law and is not sufficient to show prejudice here.
Not only has defendant failed to demonstrate prejudice, but the record is barren as to any assertion of his right to a speedy trial by a demand for such. While defendant did base several motions to dismiss on the claim that he was not afforded a speedy trial, "[a] motion to dismiss based on an alleged violation of the right to a speedy trial is not the equivalent of a demand for an immediate trial." Unwin, 139 Vt. at 196, 424 A.2d at 257. Further, the motions began in March, 1986over twelve months after he was charged and less than two months before the trial. Thus, defendant's claim is further weakened by his failure to assert the right he claims to have been violated.
Having failed to show prejudice and having failed to demand a speedy trial, defendant cannot support his claim that his constitutional right was violated on this point. This being so, it is unnecessary for us to settle whether the delay in this case was fourteen months (as defendant claims) or nine and one-half months (as the State claims). It is likewise unnecessary for us to apportion responsibility for whatever delay existed, although the record indicates that both parties contributed to some degree. There are no grounds for reversal based on defendant's claim that he was denied a speedy trial.
In his second assignment of error, defendant argues that the trial court improperly permitted the complaining witness to testify as to a prior, similar assault. This, defendant contends, was reversible error.
The charges in the instant case were based on an assault alleged to have occurred in July or August of 1984. However, the complaining witness also contended that defendant assaulted her in 1982. Before trial began, defense counsel and the prosecution agreed that no reference would be made to the alleged prior incident. The record shows that, in fact, no such reference was made during the State's direct examination of the complaining witness. During cross-examination of the complaining witness, defense counsel attacked her credibility by attempting to show a pronounced bias against defendant. Specifically, counsel questioned the witness about her long-term dislike of the defendant, and the witness ultimately admitted that she had disliked defendant since 1979 and had hated him since at least 1982. When pressed for reasons for this hatred, the witnesswho had been cautioned by the prosecution not to mention the 1982 assault responded that the defendant was not her natural father, that he disciplined her, and that he compelled her to do household chores. After cross-examination was completed, the prosecutor motioned the court for permission to question the witnesson redirectabout the 1982 incident which, the State contended, was the primary basis for the witness' dislike of the defendant. The court, reasoning that defense counsel had opened the door by attempting to show both bias and its cause, ruled that such questioning would be proper. On redirect, the witness testified that one reason for her dislike of defendant was that he had sexually assaulted her in 1982.
Defendant contends that this testimony was improper because it was highly prejudicial and went to establish a character trait with which the jury could infer defendant had acted in conformity. V.R.E. 404(b) prohibits the introduction of evidence of other crimes, wrongs or acts to prove the character of a person to show *1386 that he acted in conformity therewith. Defendant argues that the admission of the testimony about the 1982 assault violated V.R.E. 404(b). This argument is not persuasive.
Defense counsel sought to impeach the credibility of the complaining witness by painting an incomplete picture of unwarranted bias. The State's response was to complete this picture with appropriate detail. The purpose of the witness' testimony on redirect, thus, was not to establish the character of the defendant and was not violative of the prohibition in V.R.E. 404(b). See State v. Parker, 149 Vt. ___, ___, 545 A.2d 512, 514-18 (1988). The rule recognizes that evidence that may be inadmissible for the prohibited purpose may be admitted for other permissible purposes. The use here was for a permissible purpose. See State v. Fortier, ___ Vt. ___, ___, 547 A.2d 1327, 1328 (1988).
We recognize that we must not create a license for the prosecutor to engage in "overkill" nominally justified by the defendant's actions in raising a line of questions. Thus, in State v. Batchelor, 135 Vt. 366, 376 A.2d 737 (1977), the Court reversed where the prosecutorial response went far beyond the inquiry opened by the defendant. That case was a DUI case in which the defendant, on cross-examination of the arresting officer, attempted to show bias because the witness had previously told the defendant that he had an alcohol problem. The defense did not inquire as to the reasons for the alleged prejudice of the officer. On redirect, the prosecutionin an effort to show why the statement was madeelicited testimony from the officer regarding two previous arrests of defendant for DUI, and also about the officer's observations of defendant's automobile parked at local night clubs. Reversing defendant's subsequent conviction, the Court held that defense counsel's questions regarding the existence of prejudice did not open the door for a full exposition of the reasons for such prejudice. Id. at 369, 376 A.2d at 740.
In the instant case, unlike Batchelor, defense counsel attempted not only to demonstrate bias by the complaining witness, but also attempted to provide a reason for the bias. Once the issue of why the complaining witness disliked the defendant was raised on cross-examination, it was proper for the State to present a complete picture for the jury. See State v. Messier, 146 Vt. 145, 152-53, 499 A.2d 32, 38 (1985); McCormick on Evidence § 32, at 70-71 (3d ed. 1984). Thus, the trial court properly determined that defendant should not benefit from a selective presentation of the facts on cross-examination.
Defendant's third assignment of error is that the State's expert witness was improperly permitted to testify about the credibility of the complaining witness. During its case in chief, the State utilized a forensic psychologist with a specialization in children's problems and considerable experience dealing with child sexual abuse cases. The specific testimony that defendant challenges on this point was introduced during the following exchange:
Q. Does it tell you something as a forensic psychologist when a child remains consistent over several interviews?
A. Well, it gives me a sense that what they are saying happened, happened.
In State v. Catsam, 148 Vt. 366, 371, 534 A.2d 184, 188 (1987), we held that "expert testimony on the truthfulness of child sexual abuse victims is not admissible...." In that case, the State's expert testified about symptoms manifesting post-traumatic stress disorder often associated with child victims of sexual assault. As part of the expert's direct testimony, she indicated that sufferers of post-traumatic stress disorder generally do not make up stories of sexual abuse. This, we determined, was an impermissible encroachment on the jury's function in assessing the credibility of the complaining witness. Id; see also Comment, State v. Catsam: A Clarification of Evidentiary Standards in Vermont Child Sexual Abuse Cases, 12 Vt.L.Rev. 485, 486-87 (1987).
The testimony given in this case, while not the specific profile evidence at *1387 issue in Catsam, appears to be of the general type that violates the spirit of Catsam. See Catsam, 148 Vt. at 370-71, 534 A.2d at 188; Comment, 12 Vt.L.Rev. at 487. This is because it includes a statement that an outward manifestation (i.e., repeating the same story) is indicative of credibility. However, even accepting without deciding that the testimony in this case violates Catsam, the transcript demonstrates the conspicuous absence of a defense objection at this point. And, as we have previously observed, "`[t]he duty to exclude objectionable [testimony] lies squarely on the shoulders of defense counsel.'" State v. Kasper, 137 Vt. 184, 190, 404 A.2d 85, 89 (1979) (quoting United States v. Castenada, 555 F.2d 605, 610 (7th Cir.1977)). Without an objection, defendant has failed to preserve this issue for appeal. State v. Campbell, 146 Vt. 25, 27, 497 A.2d 375, 377 (1985). Under such circumstances, we are bound to reverse only if "`we find that plain error occurred in the [trial] court's failure to exclude [the testimony] sua sponte.'" Id. (quoting State v. DeJoinville, 145 Vt. 603, 605, 496 A.2d 173, 174-75 (1985)). Plain error exists only if the error or defects affect substantial rights of the defendant. V.R.Cr.P. 52(b). We are not persuaded that the trial court committed plain error by failingdespite the absence of a defense objectionto preclude the testimony cited above.
Defendant's final argument is that the trial court erred by allowing the State's expert witness to testify about statements made to her by the complaining witness. Defendant contends that this resulted in the presentation of inadmissible hearsay to the jury. See V.R.E. 802. The State argues, however, that the expert's testimony in this regard was introduced only to provide part of the basis for the expert's opinion, and that this is a permissible use.
On cross-examination of the State's expert witness, defense counsel questioned her ability to formulate an opinion after only two sessions, totaling approximately one hour and forty-five minutes, with the complaining witness. On redirect, the State questioned the expert about the basis of her opinion. Both on redirect and on recross, she indicated that her opinion was based in part on statements made by the alleged victim. And on redirect, the expert relatedin detailthe substance of those statements, which included allegations of two incidents of sexual assault by defendant against the victim. Defendant objected to this testimony. The trial court, observing that the complaining witness was present and available for cross-examination regarding the statements, permitted the testimony.
On appeal, both defendant and the State persist in the arguments made before the trial court. Defendant claims that the testimony was hearsay without an exception, and the State argues that, while hearsay, the information was used as part of the basis of the expert's opinion and, thus, was admissible under V.R.E. 803(4). Both parties are mistaken about the exact application of the hearsay rules in this case.
Clearly, out-of-court statements made to a witness who subsequently testifies about those statements have the potential of being hearsay if offered for their truth. See V.R.E. 801(c). For out-of-court statements to be admitted for this purpose (i.e., for their truth), they must fall within a recognized exception to the hearsay rule. V.R. E. 802; see also V.R.E. 803, 804. While there is a hearsay exception for statements made for the purposes of medical diagnosis or treatment, V.R.E. 803(4), under our practice this is a very narrow exception. See Reporter's Notes, V.R.E. 803(4). Specifically, under V.R.E. 803(4)unlike the corresponding federal rulestatements relating to the inception or cause of a condition or symptom are not admissible even if pertinent to diagnosis or treatment. See Reporter's Notes, V.R.E. 803(4). Thus, the State's reading of V.R.E. 803(4) is too broad and, consequently, its interpretation of the rule is incorrect. See State v. Gallagher, ___ Vt. ___, ___ (1988).
However, this does not resolve the question of whether such statements may be introduced for some other purpose. Evidence which would be hearsay if offered *1388 for its truth, V.R.E. 801(c), is not hearsay when offered for a nonhearsay purpose. See Norway v. Petit, 112 Vt. 453, 455-56, 28 A.2d 380, 381-82 (1942); Hill v. North, 34 Vt. 604, 616 (1861). V.R.E. 703, which addresses the bases of expert opinion, provides:
The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived or made known to him at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence.
This rule controls in the instant case.
Under Rule 703, if an expert relies on the out-of-court statements of another in forming his or her opinion and if such statements are of a type reasonably relied on by experts in the particular field, then the statementseven if not independently admissible for their substancewill be admissible for the limited purpose of demonstrating the basis for the expert's opinion. See S. Saltzburg & K. Redden, Federal Rules of Evidence Manual 671 (4th ed. 1986); see also Paddack v. Dave Christensen, Inc., 745 F.2d 1254, 1261-62 (9th Cir.1984) (Federal Rule 703 permits otherwise inadmissible evidence to be introduced merely to show basis of expert's opinion and not for the truth of the matter asserted); Fox v. Taylor Diving & Salvage Co., 694 F.2d 1349, 1356 (5th Cir.1983) ("An expert is permitted to disclose hearsay for the limited purpose of explaining the basis for his expert opinion but not as general proof of the truth of the underlying matter." (citations omitted)); American Universal Ins. Co. v. Falzone, 644 F.2d 65, 66 n. 1 (1st Cir.1981) (basis testimony may not go to the truth of the matter asserted); United States v. Sims, 514 F.2d 147, 149 (9th Cir. 1975) (opinion based on inadmissible hearsay may not use the statements for their truth).
V.R.E. 703 is not to be treated as either an auxiliary hearsay exception, or as a backdoor to an expansive reading of existing hearsay exceptions. Rather, the rule provides for limited-purpose admission of otherwise inadmissible evidence, and may not be used to circumvent the restrictions of the hearsay rules generally, or V.R.E. 803(4) in particular. Thus, expert use of otherwise inadmissible evidence as a basis for opinion does not make the evidence suddenly admissible for the inadmissible purpose. See Rose Hall, Ltd. v. Chase Manhattan Overseas Banking Corp., 576 F.Supp. 107, 158 (D.Del.1983), aff'd, 740 F.2d 956 (3d Cir.1984); see also In re Cheryl H., 153 Cal.App.3d 1098, 1119, 200 Cal. Rptr. 789, 801-02 (1984) (law allows expert testimony based on hearsay, but expert may not convert inadmissible hearsay into admissible opinion); S. Saltzburg & K. Redden at 671 ("Evidence not otherwise admissible is not admitted under [Rule 703] for its truth; it is admitted to explain the basis of the expert opinion.").
In the instant case, the expert's recitation of statements made by the complaining witness was introduced over defendant's hearsay objections. However, as these statements were introduced as basis testimony, the trial judge properly overruled the hearsay objection. That the State incorrectly argued at trial, and again on appeal, that the use of basis testimony made it admissible under V.R.E. 803(4) is of no consequence in this case. As there is no error in the trial court's ruling on defendant's hearsay objection, there is no basis for reversal on this point.
A final issue, not argued by the parties, remains in this case. This relates to the use of limiting instructions when basis testimony is admitted under V.R.E. 703. When hearsay evidenceinadmissible under a hearsay exceptionis admitted under Rule 703, the opposing party is entitled to a limiting instruction informing the jury of the narrow purpose for which the evidence has been received. See Paddack, 745 F.2d at 1261-62; American Universal Ins., 644 F.2d at 66 n. 1; Sims, 514 F.2d at 149; S. Saltzburg & K. Redden at 671; cf. State v. Mecier, 145 Vt. 173, 180, 488 A.2d 737, 742 (1984) (evidence received for a limited purpose should be accompanied by a limiting instruction). The question of *1389 whether adequate instructions were given in this case, however, has not been preserved for our review. This is because, having specifically objected on one ground, defendant has not preserved questions related to other possible infirmities related to the admission of the challenged testimony. See State v. Bubar, 146 Vt. 398, 400, 505 A.2d 1197, 1199 (1985); State v. Ramsay, 146 Vt. 70, 75, 499 A.2d 15, 19 (1985); State v. Bissonette, 145 Vt. 381, 392, 488 A.2d 1231, 1237 (1985). Moreover, defendant neither requested a limiting instruction nor objected to the jury charge actually given; these failures preclude appellate review unless there has been plain error. See Mecier, 145 Vt. at 177-79, 488 A.2d at 740-41; State v. Audette, 128 Vt. 374, 378, 264 A.2d 786, 789 (1970); State v. Williams, 94 Vt. 423, 444, 111 A. 701, 711 (1920); State v. Harrison, 66 Vt. 523, 528, 29 A. 807, 808 (1894). As it is unclear that there has been any error, given the substance of the trial court's instructions to the jury, we are unable to find plain error.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314342/ | 82 Ga. App. 406 (1950)
61 S.E.2d 221
SHIVER
v.
THE VALDOSTA PRESS.
33086.
Court of Appeals of Georgia.
Decided September 19, 1950.
*407 J. T. Edwards, for plaintiff.
Langdale, Smith & Tillman, for defendant.
GARDNER, J.
It appears from the petition as amended, that, on November 8, 1949, in Valdosta, Lowndes County, Georgia, the defendant published in its daily newspaper the following article:
"ANOTHER $300,000 SUIT IS FILED IN RACE CASE
"Charging that they are victims of `members of a subversive organization' who used `malicious abuse of civil process' a former Clyattville couple involved in a dispute over their racial background filed another suit for $300,000 damages before U. S. Commissioner W. E. Perry today. The suit charges Murrel *408 Holderby, Mrs. Lillie Holderby, C. C. Gay, W. J. Arnold, J. H. Dukes and Eddie Shiver (the plaintiff), with `Malicious abuse of civil process' and slander. The suit was filed by George White and Dollie Seay White on their own behalf and on behalf of their four minor children, Edward White, Shirley White, George James White and Betty White. The Whites seek damages in the amount of $50,000 each for themselves and each for their children. The original suit filed in connection with the dispute asked similar damages from the above named defendants and declaratory judgment against the Lowndes County School Board. Judge A. B. Conger dismissed this suit in Thomasville last Thursday after the plaintiff's attorney requested it to be thrown out. The court ruled that the school board was authorized by law to act as a tribunal and further that the plaintiff's case did not come under the jurisdiction of the Federal court of the Middle District of Georgia. Since the original suit was filed, the Whites have moved to Gilchrist County, Florida. The attorney for the family said that the case is now under the jurisdiction of the Federal court. The six individuals named as defendants filed a formal complaint with the Lowndes County School Board, the suit charges, asking that the children of the Whites be excluded from the Clyattville Consolidated School on the grounds that they were of Negro ancestry. The White couple were subsequently arrested on warrants signed by Mrs. Lillie Holderby, charging `felony-miscegenation' (marriage between whites and Negroes). They were released on bonds of $500 each. The Lowndes County Grand Jury is to consider the charge November 21. In the suit filed today the Whites' attorney again denied that Dollie Seay White and her children have Negro blood in their veins. The suit again contended that the White family was a victim of members of a `subversive organization known as the Ku Klux Klan and/or the Southern Klan Inc., whose object and purpose is to promote envy, hatred, malice and discord' who `did conspire to cause the issuance of said civil process for the purposes aforesaid and to satisfy their individual craving and desire and in the furtherance of the objects and purposes of said subversive organization.' The suit charged `that as a direct result of the malicious abuse of civil process, plaintiffs have been excluded from society and held up to public *409 contempt, hatred and ridicule, and the minor plaintiffs have been forced by said exclusion, contempt and hatred, to interrupt their education.'"
The plaintiff alleged said article to have been maliciously published by the defendant and as being libelous per se in that it charges the plaintiff with being a member of a subversive organization and guilty of treason, namely the Ku Klux Klan, and also imputed to the plaintiff disgraceful conduct. The plaintiff further alleged that said article was not a fair and honest report of the court proceedings purported to be reported therein; and said article set out that the plaintiff and the others did conspire, confederate, and agree among themselves and caused the malicious issuance and abuse of civil process against the Whites, the family bringing the proceeding referred to and dealt with in this article. It was stated in the petition that the plaintiffs therein (the Whites) alleged "upon information and belief" that the plaintiff in this case and the others were members of said "subversive organization," and the defendant in said article purposely left out this preface from the article. The plaintiff further set up that the said article was therefore not privileged. The plaintiff also set up that the petition referred to was filed in the Federal court in Valdosta at 10:30 a. m. on November 8, 1949, and the newspaper of the defendant went to press at 11 a. m. on that day, and that said publication appeared on that day and before there had been any service on the plaintiff thereof; and that it appeared, therefore, that the defendant did not exercise good faith in the transaction, and that same was not a privilege, but was used merely as "a cloak by defendant for venting private malice." The plaintiff alleged that the wrongful acts and conduct charged to him by said newspaper article are false.
"A libel is a false and malicious defamation of another, expressed in print, or writing, or pictures or signs, tending to injure the reputation of an individual," and its publication "is essential to recovery." Code, § 105-701. Words need not charge a specific crime in order to be libelous; they are actionable if they charge moral turpitude. See Hardy v. Williamson, 86 Ga. 551(b) (12 S. E. 874). "Any false and malicious defamation of another in any newspaper, magazine, or periodical, tending *410 to injure the reputation of any individual and expose him to public hatred, contempt, or ridicule, shall constitute a newspaper libel, the publication of such libelous matter being essential to recovery." Code, § 105-703. The publication of untrue statements which may tend to injure the reputation of another and expose him to public hatred, contempt, or ridicule, is presumed to have been malicious until sufficient evidence rebuts that presumption. Horton v. Georgian Co., 175 Ga. 261 (165 S. E. 443). "In all actions for printed or spoken defamation, malice is inferred from the character of the charge. The existence of malice may be rebutted by proof, which in all cases shall go in mitigation of damages, and in cases of privileged communications it shall be in bar of the recovery." Code § 105-706.
When language used is actionable per se, malice is implied except where the utterance is privileged. Lack of malice in cases of privileged communications will prevent recovery. Ivester v. Coe, 33 Ga. App. 620 (127 S. E. 790). However, in the present case, the petition, as amended, charges express malice by the defendant in the publication of this article.
"The following are deemed privileged communications: . . Fair and honest reports of the proceedings of legislative or judicial bodies." Code, § 105-709(4). This section is construed with § 105-711, which provides that "All charges, allegations and averments contained in regular pleadings filed in a court of competent jurisdiction, which are pertinent and material to the relief sought, whether legally sufficient to obtain it or not, are privileged. However false and malicious they are not libelous." An absolute privilege is distinguished from a conditional privilege; in case of the former, malice is immaterial, but in case of the latter, the privilege is lost through malice. See Atlanta News Pub. Co. v. Medlock, 123 Ga. 714 (51 S. E. 756, 3 L. R. A. (N.S.) 1139); Ivester v. Coe, supra.
Furthermore, there is no privilege, conditional or absolute, as to judicial proceedings where the report published is not true and correct. Wood v. Constitution Pub. Co., 57 Ga. App. 123 (194 S. E. 760). An absolute privileged communication is one in respect of which, by reason of the occasion on which, or the matter in reference to which, it is made, no remedy can be had in a civil action, however hard it may bear upon a person *411 who claims to be injured thereby, and even though it may have been made maliciously. 33 Am. Jur. 123, § 125. The class of absolutely privileged communications is narrow and is practically limited to legislative and judicial proceedings and other acts of state, including communications made in the discharge of a duty under express authority of law, by or to heads of executive departments of the State, and matters involving military affairs. This privilege is primarily intended to promote public welfare. The question of privileged communications is discussed in Lamb v. Fedderwitz, 68 Ga. App. 233 (22 S. E. 2d, 657; affirmed 195 Ga. 691 (25 S. E. 2d, 414), holding that the characteristic feature of an absolute privilege as distinguished from a conditional privilege is that in the former the question of malice is not open, all inquiry into good faith being closed.
In the case at bar, however, the newspaper article in question purports to be a report of a judicial proceeding an action brought in the Federal court against the plaintiff in the case under consideration, in which he and others are charged with malicious use or abuse of civil process and damages are sought. While the article alleged here to be libelous, as appears from the petition as amended, constitutes a fair and correct report of the allegations of the petition in the suit against the plaintiff and the others in said United States court in Valdosta, it is alleged that the same was maliciously published by the defendant as a cloak for "venting private malice" against the plaintiff. While it is not charged by the plaintiff that this article contains statements not embodied in the allegations of the petition in the suit which was filed in said Federal court and on which the newspaper article was based, and while, on its face, the article shows that the reporter was either merely quoting from the Federal court petition verbatim or was repeating the substance of the allegations thereof, such article would not constitute a privilege if the defendant acted with express malice and a desire to injure the plaintiff and expose him to public hatred, contempt, and ridicule in the publication of the article in its newspaper. The petition as amended so charged, and the special demurrers were overruled and no error is assigned here thereon.
It is true that newspapers are not ordinarily held to the exact *412 facts or to the most minute details of the transactions they publish. What is usually required is that the publication shall be substantially accurate; and if the article is published by the newspaper in good faith and the same is substantially accurate, the newspaper has a complete defense. But this is not true where express malice is charged generally, and the overruling of the special demurrers is not excepted to in this court. A newspaper is required to exercise due care in gathering and publishing news. See 39 Am. Jur. 19. There is no privilege as to judicial proceedings where the report published is not accurate and correct, or where the same is not done in good faith but with an express desire to vent "private malice" on another. See Wood v. Constitution Pub. Co., 57 Ga. App. 123 (194 S. S. 760); affirmed 187 Ga. 877 (200 S. E. 131); Atlanta News Pub. Co. v. Medlock, 123 Ga. 714 (51 S. E. 756); Atlanta Journal v. Doyal, 82 Ga. App. 321 (60 S. E. 2d, 802).
"The report must present fully, fairly, and accurately an impartial account of the proceedings. Although it must be accurate, at least with regard to all material matters, a substantially accurate report may be privileged, as mere inaccuracies not affecting materially the purport of the article are immaterial. It is not necessary that the report be verbatim, and it may consist of an abridged or condensed statement, provided such statement is a fair one." 53 C. J. S. 205, 206, § 127. "A publication is not shorn of its privileged character because it is abridged or condensed." 33 Am. Jur. 150.
The fact that the newspaper reporter in stating one of the allegations of the petition omitted the preface to this allegation, which was "Upon information and belief," does not constitute an unfair and inaccurate statement as to the contents of the petition nor did the same unjustly present this allegation. See Stone v. Hutchinson Daily News, 125 Kan. 715 (266 Pac. 78, 58 A. L. R. 718). In that case an almost identical omission was made in the newspaper article, and the court ruled that the article did not pretend to follow the exact language of the pleading, and that "the published article was fully within the limits prescribed for the publishing of the privileged" pleading, and "therefore was qualifiedly privileged." To the same effect see Conklin v. Augusta Chronicle Pub. Co., 276 Fed. 288, wherein *413 the newspaper article stated that Mrs. Conklin agreed to her husband's having a divorce, whereas the court decision (Conklin v. Conklin, 148 Ga. 690, 98 S. E. 221), on which the article was based stated that Mrs. Conklin "was willing that the husband be granted a divorce." The court held that the newspaper article in that case was not libelous per se, and that it appeared to be beyond controversy that the article fairly and honestly reported the substance of the court's opinion. "Under the laws of Georgia, lack of malice in cases of privileged communications will prevent a recovery. A fair and honest report of court proceedings is a privileged communication." See also Atlanta News Co. v. Medlock (supra, p. 718).
There is no merit in the contention that the headline with which this article was captioned showed lack of good faith and malice. This headline reads "ANOTHER $300,000 SUIT IS FILED IN RACE CASE." This statement was not inaccurate. It was another suit and the damages sought were $300,000, and the case had been referred to as the "Race Case." It is true that one who desires to keep within the realm of privilege must not only make a report fair and accurate, but must also avoid the use of libelous headlines or captions. 33 Am. Jur. 101; Id. 180; 39 Am. Jur. 19. The law does not accord any privilege to newspapers to interpolate obnoxious opinions in the report of judicial or other proceedings, nor to add inflammatory headlines by way of introduction thereto. See Dorr v. U. S., 195 U. S. 138 (24 Sup. Ct. 808, 49 L. ed. 128); 39 Am. Jur. 19. This case does not fall within the foregoing rule. There was nothing obnoxious about this headline, nor was it inflammatory.
The plaintiff urges that there was no such case pending in the Federal court, at the time of the publication of this article, as rendered it a privileged communication and on which the newspaper could base a write-up as of judicial proceedings. The suit was filed around 10:30 a. m., and the paper went to press around 11:00 a. m. on the same day. There had been no service on the defendants therein. However, this suit became a matter of public record the moment it was marked filed in the clerk's office, regardless of whether it had been served or not. "Publication by a newspaper, without malice, of a fair and true statement that the complaint filed in a specified action charged the *414 defendants with obtaining a stated sum of money by fraudulent practices, is privileged, although the pleading has not yet come before the court, and is withdrawn before it does so, on the ground that the filing of a pleading is a public and official act in the course of judicial proceedings." See Campbell v. New York Evening Post, 245 N. Y. 320 (157 N. E. 153, 52 A.L.R. 1432). Also see Lybrand v. The State Co., 179 S. C. 208 (184 S. E. 580), and the annotations appearing in 104 A.L.R. 1123.
In Abernathy v. News Pub. Co., 45 Ga. App. 693 (165 S. E. 924), this court ruled that the petition there was not subject to the general demurrer interposed. It was alleged therein that the publication was malicious, and it did not appear that the publication constituted a "fair and honest" report of a court proceeding and was therefore privileged. In the present case, the petition charged express malice in the publication by the defendant of this article.
In conclusion, the petition fails to set forth that the publication was not a fair and honest report of the proceedings in the Federal court; but, since the defendants are charged with express malice in the publication of such proceedings, the case will be submitted to the jury on the question as to whether the defendant here is guilty of express malice in the publication of the proceedings, though fair and honest.
Applying the foregoing, the petition as amended set out a cause of action for libelous publication of a newspaper article good as against the general demurrer, and the trial court improperly sustained the general demurrer and dismissed the petition, which distinctly alleged express malice in general terms. There was no error assigned in this court on the judgment, insofar as it overruled the grounds of special demurrer.
Judgment reversed. MacIntyre, P. J., and Townsend, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314349/ | 217 S.C. 500 (1950)
61 S.E.2d 58
CASON
v.
GIBSON ET AL.
16405
Supreme Court of South Carolina.
September 6, 1950.
*501 Messrs. Bowen & Bryson, of Greenville, for Appellant.
Messrs. Wyche, Burgess & Wofford and Love, Thornton & Blythe and William I. Bouton, all of Greenville, for Respondents.
Messrs. Bowen & Bryson, of Greenville, for Appellant, in reply.
*502 September 6, 1950.
STUKES, Justice.
Minnie P. Cochran owned a tract of land which was near but is now, since 1947, within the limits of the City of Greenville. In 1937 she procured to be made by surveyors a subdivision of a portion of it and lots and streets were designated and mapped. The plat was recorded in 1938 and shows lot No. 47 facing northwest on an unnamed street which intersected another unnamed street at the corner of the lot, thus making it a corner lot with street frontage of 78.8 feet, running back 125.9 feet on the street which constituted the southwest boundary of the lot. The street last referred to is here in controversy. It was shown on the recorded map as being of a uniform width of 40 feet, meandered in a generally southerly direction and intersected West Augusta Place Street which was 50 feet in width. The subdivision map showed an irregular block composed of eleven lots, bounded on all sides by streets, of which lot No. 47 was the northwest corner.
By deed dated June 13, 1946, Mrs. Cochran conveyed lot No. 47 to Joseph H. Parrott and Mary C. Parrott describing it by the plat which had been recorded in 1938 and reference was had to the book and page of record and the streets were referred to as boundaries. On Sept. 18, 1946, the Parrotts conveyed by the same description to H.C. Smith and C.S. Fox and the latter two named conveyed to plaintiff by deed dated Dec. 31, 1946, using the same description.
Fox testified for plaintiff at the trial that he was the agent of Mrs. Cochran and as such made the sale of lot No. 47 to the Parrotts and in the negotiation he represented to them that the lot was a corner lot and in that connection showed them the 1937 recorded plat. Subsequently the witness and his partner, Smith, purchased the lot on their own account from the Parrotts and afterward sold it to the plaintiff, at that time showing him the recorded plat and representing to him that he was buying a corner lot. The witness had no information *503 concerning the street in question except that obtained from the recorded plat and he had talked to Mrs. Cochran, his principal, about the lot sale and also to her son, Dan W. Cochran.
The latter testified that as an executor of his father's will and as agent for his mother he engaged the surveyor and attended to the recording of the 1937 plat which did not include all of his mother's adjacent land, omitting five acres lying to the west of the platted portion. There has never been any acceptance of the strip of land, constituting the street in controversy, by Greenville County or City and it has not been used by the public. In 1949 witness' mother had a new plat made which took in land to the west of that originally mapped, eliminated the contended street and substituted another farther west. The witness employed a Mr. Ashmore to grade the streets shown on the original plat but the street in controversy was not graded because of the excessive cost and on that account he, as his mother's agent, decided to abandon it.
The defendants, who are now respondents, separately purchased from Mrs. Cochran in September and October 1949 three lots numbered, respectively, 49, 50 and 51 per the 1949 plat and each of the lots contains a portion of the street which bounded plaintiff's lot on the west, according to the 1938 plat by which he purchased. Alleging that two of the respondents had commenced the erection of buildings on their lots, plaintiff brought this action in October 1949 to enjoin the obstruction of the street in controversy. There is no question of notice to respondents of plaintiff's claim of right in the street at the time of their respective purchases and the above dates show the promptness of his legal action.
The defendants answered separately. The answers included denials and other defenses: (1) that if there was a dedication of the street as such, it was revoked by Mrs. Cochran and abandoned by her and by plaintiff before public acceptance or use; (2) that plaintiff is estopped by his acquiescence *504 in the revocation; and (3) that the street is not essentially necessary to the use and enjoyment of plaintiff's property. The case was tried by the court which heard the evidence without the intervention of master or jury and rendered judgment for the defendants, whence this appeal.
A case close to this in facts is Marshall v. Columbia etc. Street Ry. Co., 73 S.C. 241, 53 S.E. 417, 421. Defendant there owned a large acreage just north of Columbia which was platted for the purpose of laying out the town of Eau Claire. At and including the intersection of two principal streets about four acres were designated on the map as the "Circle". Plaintiff purchased large abutting lots which were described by reference to the plat and the "Circle" was given as a boundary. Defendant also orally represented to plaintiff that the "Circle" which bounded her lots had been dedicated for public purposes and would be kept open, upon which plaintiff relied. Afterward defendant altered its plan and divided the area of the "Circle", except the street intersection, into lots per a new plat and they were sold to various purchasers with notice of plaintiff's contention, and they were made co-defendants in the action. The court concluded that the seller had dedicated the "Circle" to public uses and that the plaintiff, having bought in reference thereto, had an easement in the "Circle" area and none of it could be sold as lots to others who had notice. The judgment was effectuated by permanent injunction against all of the defendants. This court said in affirming the judgment that, quoting, "Even if the `Circle' was not dedicated so as to confer rights that could be enforced by the public, nevertheless, if the company represented to the plaintiff that the `Circle' would be kept open, and thereby induced the plaintiff to purchase her lots, such representations would be binding upon the defendant."
The facts of the Marshall case came again before the court in Diseker v. Eau Claire Land & Improvement Co., 86 S.C. 281, 68 S.E. 529. The defendant appears to have been *505 the successor in title of the corporate defendant in the Marshall case and it conveyed to plaintiff lots which had been carved from the "Circle". Plaintiff sued upon the covenant of warranty contained in his deed and alleged that the property had been formerly dedicated to the use of the citizens of Eau Claire for the purpose of establishing a park or public place which constituted an easement in the public. The court affirmed nonsuit upon the ground that plaintiff had not been evicted and for that reason could not maintain an action for breach of warranty. It was carefully said that the rights of the plaintiff in the Marshall case were not involved in the action then in hand, thus not impinging upon the authority of it.
Finally, the facts of the Marshall case were presented again in Safety Building & Loan Co. v. Lyles, 131 S.C. 542, 128 S.E. 724. Plaintiff had become the owner of a lot carved from the "Circle" and bargained to sell it to Lyles who refused to comply with his contract upon the ground that it was encumbered by an easement in favor of the representatives of Mrs. Marshall, then deceased, and in favor of the town of Eau Claire and the public, or of one or more of them. The town and the legatees, devisees and heirs at law of Mrs. Marshall were made defendants. Two daughters of Mrs. Marshall and the town of Eau Claire defaulted. Two granddaughters of Mrs. Marshall filed answers in which they alleged that the real estate of which their mother died seized had been sold in aid of assets and that they no longer had any interest of substantial nature in the "Circle" of which they knew, but they submitted their rights to the protection of the court. The principal defendant, Lyles, denied the conclusions of the complaint, particularly that the easement or right acquired by Mrs. Marshall was merely in gross and that there had been no dedication. The brief judgment of the trial court was adopted without opinion by this court. It was held that there was no completed dedication of the "Circle" to the public because the latter was not a party *506 which, we add, is unquestionable under the authorities, in view of the absence of acceptance or user. State v. Carver, 5 Strob. 217, Chafee v. City of Aiken, 57 S.C. 507, 35 S. E. 800; 16 Am. Jur. 377 et seq., Dedication, Sec. 30 et seq. It was further pointed out that the plat by which Mrs. Marshall purchased was made in 1897 and Eau Claire was not incorporated until 1899 and the town had since been levying and collecting taxes on the lots which comprised the original area of the "Circle". The latter was never opened and graded; on the contrary, after the plat was altered to provide a right-angle intersection of the streets the latter were graded and have since been maintained as such by the town. It was said that in the light of these facts the public could not require adherence to the original plat or that the "Circle" be kept open. The court then undertook to determine the nature of the right acquired by Mrs. Marshall and concluded that it was an easement in gross and died with her, this principally for the reason that the easement was not appurtenant to the lots purchased by Mrs. Marshall and the enjoyment of them by her was not dependent upon the continuance of the "Circle". It will be noted that it does not appear that the Marshall lots were reduced from the status of corner lots to inside lots, which is an important fact of the case at bar. However, it does not appear that the right originally acquired by Mrs. Marshall was defended in this action. Indeed, it is not clear from the report of the case that the owner or owners of her former lots was or were included in the suit; on the contrary, apparently not. Under these circumstances we do not think that the authority of the holding in Mrs. Marshall's case, supra, was weakened.
Moreover, it is clear from a careful consideration of this last of the Eau Claire "Circle" cases brought here by appeal that the public nature of the area involved was abandoned by common consent. The subsequently incorporated town never accepted it and the successor of the former owner, finally with the virtual consent of all concerned, revoked the *507 offer of dedication, divided and sold the property as lots without ever a firm objection of anyone except Mrs. Marshall, who successfully asserted her right in her lifetime. After her death apparently no one seriously opposed the change. It should be added that the nature of the originally intended "public use" was uncertain. In some of the related cases it was said that the purpose included the donation of the center of the "Circle" for occupancy by a church or by a tourist hotel. This further distinguishes the last of this series of cases from that at bar for here there is no uncertainty; the presently disputed area was mapped as and for a street and the public purpose and convenience to an abutting lot owner are definite and undoubted. The decision of the trial court deprives appellant of the obvious advantages of a corner lot, and that is what he bought.
A very valuable authority upon the subject of easements and rights-of-way by necessity is Brasington v. Williams, 143 S.C. 223, 141 S.E. 375, which, however, is mistakenly relied upon by respondents because that is not the subject of this case. The right of appellant here does not arise from necessity. It flows from the deed and plat of the former owner to appellant's predecessors in title and, as is uniformly held, equity and good conscience require its vindication and protection. Many courts base the right of the grantee or his assigns, in the circumstances present here, upon the theory of implied grant or covenant; more, probably, upon the ground of equitable estoppel and some upon a combination of these concepts. Hence the following conclusion of a text-writer: "If a grantor in conveying land bounds it on a street, he and his heirs are estopped to deny that there is such a way or street, as such description is an implied covenant on the part of the grantor, of the existence of such way or street, and of the right of the grantee to its use." 10 R.C.L., p. 714.
Town of Estill v. Clarke, 179 S.C. 359, 184 S.E. 89, 90, contains the following: "Exception 5 imputes error to the trial judge for having refused to charge the jury, based on *508 the holding of the North Carolina Supreme Court in the case of Collins v. Asheville Land Co., 128 N.C. 563, 39 S.E. 21, 83 Am. St. Rep. 720, the following request: `Where an improvement company laid off lands into numbered city lots and streets, making a plat thereof, and sold lots marked and numbered on the plat, with reference thereto in the deeds, such acts constitute an irrevocable dedication of the streets.' We have made a careful examination of the record, and are satisfied that the trial judge did not err in refusing the above charge. It is correct statement of the law, but would have tended to be misleading." This was disregarded as dictum by the trial court in the consideration of this case. However, reference to the cited North Carolina case shows its relevancy to this. It applies what is known as the "broad" or "unity" rule in such cases and goes further than is necessary here or was necessary in our latest decision on the subject, which will be next cited.
Since the trial of this case in the lower court, Billings et al. v. McDaniel, was filed on July 14, 1950, S.C. 60 S.E. (2d) 592. In it the broad rule was quoted from Cook v. Totten, 49 W. Va. 177, 38 S.E. 491, 87 Am. St. Rep. 792. The rule and its modifications (in some jurisdictions) are stated at page 612 of the exhaustive annotation in 7 A.L. R. (2d), beginning at page 607, which follows report of the Virginia case of Lindsay v. James, 188 Va. 646, 51 S.E. (2d) 326, 7 A.L.R. (2d) 597, opinion by Chief Justice Hudgins. Cases from many jurisdictions are collected in the annotation and it appears that universally where a conveyance of realty described the property sold by reference to a plat upon which streets, alleys, squares and parks are shown, an easement therein is generally implied for the benefit of such lots as actually abut on such streets, alleys and parks even though they are dedicated to public use, and the particular subject of the cited annotation is whether such a conveyance creates in the lot owner a right to use and enjoy such streets, etc., shown on the plat which do not abut the *509 property conveyed, and affirmative answer to that is the "broad" rule. We do not here consider that further question and it was not decided in the Billings case, supra, because the facts did not go that far there, or here.
There is an annotation of value in L.R.A., 1917A, page 1123, which demonstrates by the cited authorities that the private easement of the lot purchaser in such platted streets, etc., is distinct from and will survive the destruction of the public easement. It is also said upon the authority of numerous cited cases in the note in 150 A.L.R. at p. 652, applicable to a case of dedication by plat accompanying conveyance, as here, subsequent acceptance and afterward abandonment or vacation by the public, as follows: "Where lots in a subdivision are sold by reference to a map or plat upon which ways are shown which are or become public streets or highways, the private easement which arises upon such a sale survives the vacation, abandonment, or closing of the street or highway by the public."
All of this points to the error of the trial court in this case. It was erroneously decided as if appellant's right to the use of the abutting streets were dependent upon a dedication by the owner which was accepted by public authority and used by the public, which it is not, as is further shown by the following text quotations. "As between the owner, who has conveyed lots according to a plat, and his grantee or grantees, the dedication is complete when the conveyance is made, even though the street is not accepted by the public authorities." 16 Am. Jur. 379, sec. 31. "It follows that the dedication can be revoked prior to acceptance, provided the claims of grantees are extinguished, or they all consent; but the grantees have the right to insist that the offer of dedication be held open even though there was no acceptance by the city, and the dedicator's sale of the property will not destroy that right." 26 C.J.S., Dedication, § 58, pp. 146, 147. "Persons owning lots fronting on or adjacent to property dedicated as public parks or *510 squares, or streets, highways, and the like, have such special property interests as entitle them to maintain a suit for the enforcement and preservation of the use of the property as such. This right is not affected by the fact that the dedication has never been accepted by the municipal authorities." 26 C.J.S., Dedication, § 71, p. 161.
After judgment below in their favor for reasons that we have found untenable, respondents filed sustaining grounds, Sup. Ct. Rule 4, sec. 7, which allege abandonment by appellant of his easement in the street and counter-estoppel of him. But these contentions were not argued in the brief and need not be particularly considered. We add, however, that the facts in evidence do not at all support them.
The judgment is reversed and the case remanded to the trial court for issuance of the permanent injunction to which appellant is entitled under the foregoing opinion.
BAKER, C.J., and FISHBURNE, TAYLOR and OXNER, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260643/ | 632 F.Supp. 1387 (1986)
ST. LUKE'S HOSPITAL, Plaintiff,
v.
SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
Civ. No. 84-1506-Y.
United States District Court, D. Massachusetts.
April 15, 1986.
*1388 *1389 Mitchell H. Kaplan, Choate, Hall & Stewart, Boston, Mass., for plaintiff.
Ralph A. Child, Asst. U.S. Atty., for defendant.
MEMORANDUM AND ORDER
YOUNG, District Judge.
This action was brought by St. Luke's Hospital ("St. Luke's") to obtain judicial review of a final decision of the Deputy Administrator of the Health Care Financing Administration (the "Deputy Administrator") acting pursuant to a delegation of authority from the Secretary of Health and Human Services (the "Secretary"). The Deputy Administrator denied St. Luke's request for reimbursement of certain costs incurred in fiscal years 1978 and 1979.[1] St. Luke's contends that this action was arbitrary and capricious, and based on certain erroneous conclusions of law. Now before the Court are the parties' cross motions for summary judgment. The parties agree that there exist no disputed issues of material fact and that one of them is entitled to judgment as matter of law. See Rule 56, Fed.R.Civ.P.
I. Background
The Medicare program subsidizes the medical care of eligible disabled and elderly citizens. Among other things, Medicare provides payments to qualified hospitals to reimburse them for medical care provided to Medicare beneficiaries. A hospital may participate in the Medicare program as a "provider of services" by entering into a "provider agreement" with the Secretary. 42 U.S.C. §§ 1395x(e) and (u). The hospital then becomes entitled to payment of the lesser of the "reasonable cost" or the "customary charge" of hospital services provided to Medicare beneficiaries. 42 U.S.C. § 1395f(b). A provider of services receives its Medicare payments from the Secretary, or through a "fiscal intermediary" which acts as an agent of the Secretary for the purpose of reviewing the provider's claim for reimbursement.
The process by which the final amount of reimbursement is determined is quite complex and, as this case aptly demonstrates, it can take years to resolve a dispute between the Secretary and a provider. The payment process begins when the provider files a cost report with its fiscal intermediary. This report sets forth the costs of all services provided to Medicare patients during the year. After the fiscal intermediary analyzes and audits the cost report, it issues the provider a Notice of Program Reimbursement, which sets forth the final amount of reimbursement to which the intermediary believes the provider is entitled. If the provider is dissatisfied with the fiscal intermediary's determination, it may appeal and request an hearing before the Provider Review Board (the "Board"). Within 60 days after a final decision of the Board, the Secretary, on his own motion or at the request of the provider, may review the Board's decision. The Secretary is empowered to affirm, reverse, or modify the Board's decision. The Secretary has delegated his authority in this regard to the Deputy Administrator. A provider dissatisfied with a final decision of the Board or the Deputy Administrator may seek review in the appropriate United States District Court. 42 U.S.C. § 1395oo(f). The District Court's review is made in accordance with the Administrative Procedure Act, and is on the basis of the administrative record. 5 U.S.C. § 706.
St. Luke's is a 434 bed non-profit acute care community hospital located in New Bedford, Massachusetts. St. Luke's, which is an approved provider under the Medicare program, submitted cost reports for 1978 and 1979 to its fiscal intermediary, Aetna Life and Casualty Company ("Aetna"). After receiving its Notice of Program Reimbursement from Aetna, St. Luke's appealed certain of Aetna's rulings to the Board. Specifically, St. Luke's appealed (1) denial of reimbursement for its accrued sick leave *1390 benefits costs, and (2) separate application of the lower of cost or charges principle to its Home Health Aide/Visiting Nurse Service. The Board agreed with St. Luke's that the hospital was entitled to reimbursement for its 1978 sick leave benefits costs, but held that it did not have jurisdiction to review the 1979 costs. The Board also adopted St. Luke's position on the lower of cost or charges principle. The Deputy Administrator reversed the Board, except to the extent that the Board held it was without jurisdiction to hear the 1979 sick leave costs appeal. St. Luke's then sought review in this Court.
The careful and competent efforts of counsel on both sides of this case make clear that three issues are now properly before this Court: (1) Is St. Luke's entitled to reimbursement for the accrued costs of vested sick leave benefits? (2) Did the Board have jurisdiction to consider St. Luke's claims as to 1979 sick leave benefits costs? (3) Did the Secretary properly apply the lower of cost or charges principle to the Home Health Aide/Visiting Nurse Service. The Court will address these issues in order.
II. Sick Leave Benefits Costs
A. 1978 Costs
Among the benefits offered by St. Luke's to its employees is a structured sick pay/sick leave plan. Under the plan, full time employees earn one day of sick leave per month, and are allowed to accumulate sick days from year to year up to a maximum of 60 days. Any sick days accumulated in excess of the 60 day maximum are converted into a pay equivalent which the employee receives as bonus compensation in that year.
Employees who do not use their accumulated days of sick leave prior to terminating their employment can acquire a vested right to a cash payment for their unused sick days upon termination. During the fiscal years in question here St. Luke's changed the method by which payment rights were calculated. The specifics of the two plans are complex and not essential to this discussion. It is enough to note that, in general, the percentage of unused sick days that could be converted to cash depended on the length of employment of the particular employee. Under both plans, St. Luke's did not accrue a cost until an employee's right to the sick leave benefits vested.
Pursuant to the Secretary's regulations, St. Luke's accounts for its costs on an accrual basis. 42 C.F.R. § 405.453(a). Unlike cash basis accounting, which treats a cost as incurred only when it actually is paid, accrual basis accounting costs are reported "in the period in which they are incurred, regardless of when they are paid." Id. at § 405.453(b)(2). As regards sick leave benefits, St. Luke's reported these costs at the time the benefit became vested; that is, the time at which the employee had an absolute right to claim that sick day upon severance. In 1978, St. Luke's accrued $173,902 in vested sick leave benefits costs. Aetna and the Deputy administrator disallowed this cost.
The governing principle of the Medicare program, as reflected in the statute and the regulations, is that payments will be made on the basis of the "reasonable costs of services." 42 U.S.C. § 1395f(b); 42 C.F.R. § 405.451. Reasonable costs are "determined in accordance with regulations establishing the method or methods to be used, and the items to be included." 42 C.F.R. § 405.451(b)(1). The Secretary's regulations provide that the cost data submitted by a provider seeking reimbursement must be reported on the accrual basis. Id. at § 405.453(b)(2).
Notwithstanding these regulations, the Secretary challenges St. Luke's accrual of sick leave benefits costs on two grounds. First, the Secretary argues that the Provider Reimbursement Manual dictates the proper treatment of sick leave benefits costs. Second, the Secretary argues that sick leave benefits are actually deferred compensation. In either case, he would allow the cost to be reported only when sick leave benefits actually are paid. The Court thinks neither argument persuasive.
Section 2144.8 of the Medicare Provider Reimbursement Manual (HIM-15) *1391 (the "Manual"), as was applicable in 1978, prohibited reimbursement of earned but unused sick leave costs. Instead, the Manual specified that the cost should be reported only when the provider actually made payment for the sick leave. The Secretary correctly points out that the Manual, as the agency's interpretation of its own regulations, is to be given controlling weight unless it is plainly erroneous or inconsistent with the regulations. United States v. Larionoff, 431 U.S. 864, 872, 97 S.Ct. 2150, 2155-56, 53 L.Ed.2d 48 (1977); Braun Corp. v. Doyle, No. 85-4018-Y, slip op. at 5 (D.Mass. December 20, 1985). Here, however, the Manual offends the latter part of that standard because it contradicts the requirement of the regulations that cost data be reported on the accrual basis.
The Manual's requirement that sick leave benefits costs be reported only when paid cuts against the most basic premise of accrual basis accounting; namely, that the actual time of payment is insignificant. See e.g., Statement of Financial Accounting Standards No. 43 (FASB, 1980). St. Luke's reported the costs of sick leave benefits at the time the obligation to pay became certain, i.e. when it vested. This properly was the time at which the cost was "incurred." The Secretary's suggestion that vested sick leave benefits are contingent liabilities misses the mark. While it is true that the obligation is contingent as to when it will be paid, that is true of all accrued costs.
Perhaps recognizing that the sick leave benefits costs properly were accrued, the Secretary goes on to argue that § 405.453 (the accrual regulation) is only a record keeping requirement, which does not address when costs will be reimbursed. The argument is illogical. The Secretary mandates certain record keeping requirements precisely because the provider is entitled to reimbursement of reasonable costs. 42 C.F.R. § 405.453(a). To suggest that the Secretary required providers to seek reimbursement under one accounting system while he intended to make payment under another is contrary to the structure of the regulations. That this argument is without force is best evidenced by the fact that it appears that every other court which has considered the matter has adopted the position advanced by St. Luke's here. See Medical Society of South Carolina d/b/a Roper Hospital v. Heckler, Medicare & Medicaid Guide (CCH) ¶ 33,651 (D.S.C. 1984); McKeesport Hospital and Greene County Memorial Hospital v. Heckler, 612 F.Supp. 279 (W.D.Pa.1985); North Shore Medical Center v. Heckler, Medicare & Medicaid Guide (CCH) ¶ 34,991 (S.D. Fla.1985).
The Secretary also argues that the sick leave benefits constitute an unfunded deferred compensation plan, the cost of which should be reported when payments actually are made. This argument stretches the definition of deferred compensation plan far beyond the limits of what is commonly accepted. That an employee may use an accumulated sick leave day as an actual paid sick day before he or she terminates employment is proof enough of that. In any event, the Secretary's attempt to recharacterize the plan does not escape the basic proposition that under the regulations the sick leave benefits costs were "incurred" in the year in which they became vested. 42 U.S.C. § 1395x(v)(1)(A).
B. 1979 Costs
In 1979 St. Luke's reported $244,841 in vested sick leave benefits costs. Owing apparently to Aetna's denial of its 1978 sick leave benefits costs, St. Luke's did not seek reimbursement for these costs in its 1979 cost report. Instead, it entered the cost on Worksheet A-8 of the cost report as a "self-disallowed cost." If a provider self-disallows a cost, there generally is no need for the fiscal intermediary to consider the cost.
When St. Luke's appealed its reimbursement to the Board for 1978 and 1979, it appealed the sick leave benefits issue for both years. Despite the fact that the issues presented were identical, the Board declined to exercise jurisdiction over the sick leave issue for 1979. The Board evidently took the position, as it had in the past, that it did not have jurisdiction to consider a self-disallowed cost, there being no "dispute" between the fiscal intermediary *1392 and the provider. The Deputy Administrator affirmed this part of the Board's decision. St. Luke's now appeals.
The statutory section governing the jurisdiction of the Board is hardly a model of clarity. It provides that:
The board shall have the power to affirm, modify, or reverse a final determination of the fiscal intermediary with respect to a cost report and to make any other revisions on matters covered by such cost report (including revisions adverse to the provider of services) even though such matters were not considered by the intermediary in making such final determination.
42 U.S.C. § 1395oo(d); see also 42 C.F.R. § 405.1869. The question whether this section gives the Board jurisdiction to hear appeals on reported but unclaimed costs has caused disagreement among the Circuit Courts of Appeals, and is a matter of first impression in this district. See Athens Community Hospital v. Schweiker, 743 F.2d 1, 5-6 (D.C.Cir.1984) (hereinafter Athens II) (no jurisdiction unless cost "claimed" or "raised"); St. Mary of Nazareth Hospital Center v. Dept. of Health and Human Services, 698 F.2d 1337, 1346 (7th Cir.), cert. denied, 464 U.S. 830, 104 S.Ct. 107, 78 L.Ed.2d 110 (1983) (hereinafter St. Mary) (Board has authority to review self-disallowed costs); Community Hospital of Roanoke Valley v. Health and Human Services, 770 F.2d 1257, 1262 (4th Cir.1985) (provider must affirmatively place issue in controversy).
Much of the disagreement over the scope of jurisdiction conferred by the statute arises out of the fact that § 1395oo(d) actually contains two separate grants of jurisdiction which are not easily harmonized. First, the Board has the power to "affirm, modify, or reverse a final determination of the fiscal intermediary with respect to a cost report." Second, the Board has the power "to make any other revisions on matters covered by such cost report ... even though such matters were not considered by the intermediary in making such final determination." Depending on how broadly they are construed, these two clauses can be either mutually exclusive or redundant.
In St. Mary the provider self-disallowed certain telephone costs. On appeal, the district court held that the costs were reimbursable, and reversed a decision of the Board to the contrary. At the court of appeals, the Secretary argued that the Board, and thus the court, was without jurisdiction to act upon the claim for reimbursement. The Seventh Circuit rejected this argument, holding that the Board had power to consider the self-disallowed cost. St. Mary at 1346. The court relied on the "even though such matters were not considered by the intermediary" language of the statute to rule that the broad grant of jurisdiction to the Board extended to self-disallowed costs.
The District of Columbia Circuit Court of Appeals rejected the St. Mary reasoning in Athens II.[2] There, the provider did not request reimbursement for certain stock option and tax costs in its 1973 and 1974 cost reports. Four years later, while the appeal to the Board was still pending, it sought to amend its 1973 and 1974 reports to include these costs. Treating the request as one to reopen, the Board denied the motion. Instead of appealing the refusal to reopen, the provider then sought to put the costs at issue in the pending appeal. The Board held that it lacked jurisdiction to review the claims. In affirming *1393 the Board's decision the District of Columbia Circuit, through Judge Bork, held that the Board has jurisdiction only over those costs that were specifically claimed for reimbursement, or "raised" by the provider prior to the issuance of the Notice of Program Reimbursement. Id. at 5-6. The court rejected the argument that a cost disclosed on a cost report, but not claimed, was a "matter covered by the cost report." In its view, the Board's jurisdiction could be determined only in light of the provider's right to appeal. The statute specifies that a provider "may obtain a hearing with respect to a (A) cost report ... if [the provider] is dissatisfied with a final determination of the ... fiscal intermediary." 42 U.S.C. § 1395oo(a)(1)(A)(i). Thus, the court reasoned, it was "anomalous ... to think Congress intended to permit a provider to claim dissatisfaction based upon its own failure to request reimbursement of a cost item. If a provider is unhappy with the reimbursement the intermediary allowed in such a case, it is the fault of the provider and not the intermediary." Athens II at 6.
This Court declines to apply the Athens II holding to the case at bar for two reasons.[3] First, and most important, denying Board jurisdiction to review self-disallowed costs would contradict the statutory scheme. Second, such a result would be highly impractical and unduly burdensome on providers in light of the regulatory realities of the Medicare program.
To hold that the Board has jurisdiction only as to costs specifically claimed or raised before the fiscal intermediary, is to render meaningless the statutory grant of authority to consider matters "not considered by the intermediary in making such final determination." 42 U.S.C. § 1395oo(d). It seems clear that the statute creates a category of "matters covered by the cost report," but not "considered by the fiscal intermediary," over which the Board has jurisdiction. Application of the plain language of the statute to the facts of this case compels the conclusion that the self-disallowed sick leave costs were "matters covered by the cost report." Therefore, the Board had jurisdiction to hear the 1979 appeal.
In addition, a finding that self-disallowed costs are unappealable would be highly inconsistent with the realities of the regulatory scheme established by Congress. As this case well demonstrates, it can take many years for a dispute between a provider and its fiscal intermediary or the Secretary to reach final judicial resolution. After a provider's claim for reimbursement of a cost is denied, the provider must decide how to treat that type of cost in the interim between initial denial and judicial review. For a variety of reasons, the most prudent course for the provider often will be to self-disallow the cost during that interim period. Here, for example, St. Luke's persuasively argues that in light of Aetna's treatment of the 1978 sick leave benefits costs, it feared that claiming reimbursement for the 1979 costs would violate the Medicare fraud statute. 42 U.S.C. § 1395nn. It does no violence to the statutory scheme to allow a provider to self-disallow a cost while continuing to appeal to the Board to reverse its position. The analogy is to a baseball team playing a game under protest; the provider abides by the ruling but does not concede the point.
The suggestion of the Athens II court that the provider's dissatisfaction is "the fault of the provider and not the intermediary" oversimplifies the effect of administrative lag on the provider's decision making. Here, both Aetna and the Secretary were well aware of the continuing dispute over the 1978 costs at the time St. Luke's submitted the 1979 report.[4] Thus, the self-disallowance of the sick leave benefits costs did not circumvent the fiscal intermediary's role in the review process. This is *1394 not the type of case, envisioned by the court in Athens II, where the provider listed "every conceivable cost on its cost report without claiming reimbursement ... [in hopes that] the intermediary will reimburse it ..., secure that it nevertheless will have [180 days] to concoct some reason to urge on the [Board] for reimbursement of the unclaimed costs." Athens II at 6. This case presents none of these concerns.
Accordingly, the Court holds that where a provider is denied reimbursement for a claimed cost, and in a subsequent year self-disallows that same type of cost while its appeal of the initial denial is still pending, the Board has jurisdiction to hear an appeal concerning the self-disallowed cost.
III. The Home Health Services
In addition to its acute care hospital, St. Luke's operates a home health services department. The department provides two services, a Homemaker/Home Health Care Aide service and a Visiting Nurse Service. The Home Health Aide/Visiting Nurse Service (hereinafter referred to collectively as the "home health service") is located in a separate building from the rest of the hospital. St. Luke's has applied for and received a separate Medicare provider number for the home health service.
Prior to 1972 Medicare providers were reimbursed for the reasonable costs incurred in caring for Medicare beneficiaries. As the reasonable costs incurred in caring for Medicare patients began to exceed the amount normally charged to non-program beneficiaries, Congress feared that Medicare was bearing part of the costs of treating non-program patients. H.R.Rep. No. 92-231, 92nd Cong., 2nd Sess., reprinted in [1972] U.S.Code Cong. & Ad.News 4989, 5087-88. See 42 U.S.C. § 1395x(v)(1)(A). Thus, in 1972 Congress amended the Medicare statute to require that the program reimburse providers the lesser of "the reasonable cost of services ... or the customary charges with respect to such services." 42 U.S.C. § 1395f(b)(1); 42 C.F.R. § 405.455. In other words, if a provider incurs costs with respect to a service which are greater than the amount the provider would normally charge non-Medicare patients for the service, Medicare will only reimburse the provider the amount of the customary charge. The remainder of the costs are disallowed, no matter how reasonable. Likewise, if a provider's costs with respect to a service are less than the amount normally charged for the service, Medicare will reimburse the provider only for its reasonable costs.
Because the statute speaks in terms of the lesser of cost or charges for a "service," certain accounting functions must be performed before the Secretary can determine a provider's eligibility to reimbursement. Under accepted accounting standards, a hospital's books do not reflect the cost of providing any "service," but rather account for the costs of the various items that go into providing the service. Accordingly, the Secretary's regulations specify cost finding methods which providers must use to determine the actual costs of services furnished. 42 C.F.R. § 405.453(d).
Under the regulations applicable in 1978 and 1979, both St. Luke's and its home health service were required, unless they received permission to use a more sophisticated method, to distribute indirect costs by using the step down method of cost finding.[5] In fact, Aetna did allow St. Luke's to use discrete costing to allocate certain indirect costs to the home health service. Because the home health service is separately housed, St. Luke's could identify separately the costs of depreciation, housekeeping and maintenance, and operation of plant attributable to the home health service, and directly assign these costs to the home health service on its cost report. Administrative and general costs[6] could not be directly assigned, however. Accordingly, these costs were allocated to *1395 the home health service according to the step down formula, which distributes costs across all departments of the hospital. Specifically, $88,432 was so allocated in 1978 and $128,084 in 1979.
St. Luke's complains that the Deputy Administrator erred when, in conjunction with the step down allocation of administrative and general costs, he separately applied the lower of cost or charges principle to St. Luke's and its home health service. St. Luke's contests the disallowance of $43,600 in 1978 and $30,800 in 1979, which amounts Aetna and the Deputy Administrator held to be costs in excess of the customary charges for home health services, and therefore not reimburseable under the lower of cost or charges principle. St. Luke's argues that the step down method used by Aetna overallocates administrative and general costs to the home health service, and that the separate application of the lower of cost or charges principle to St. Luke's and its home health service therefore is both improper and arbitrary. The Secretary responds that the separate application of the lower of cost or charges principle is required by the statute, and that St. Luke's should have sought permission to use a different cost finding method if it felt that step down was inaccurate. For the reasons discussed below the Court agrees with the Secretary.
St. Luke's first argues that, as used in the statute and the regulations, the term "provider" does not require the separate application of the lower of cost or charges principle to a hospital based home health service. St. Luke's suggests that Congress did not intend for the principle to be applied to separate providers within a single "institution." Accordingly, says St. Luke's, the lower of cost or charges principle should be applied only to the combined costs and charges of its hospital and home health service. The argument is of little force.
Lafayette Home Hospital v. Califano, Medicare & Medicaid Guide (CCH) ¶ 30,556 (N.D.Ind.1979), is the only other case of which the Court is aware that involved a challenge to separate application of the lower of cost or charges principle to a hospital and its related facility. In rejecting an argument virtually identical to the one made here by St. Luke's, the Lafayette court said, "fairly read, these regulations do not even hint that a corporation operating two providers will be reimbursed as a single unit." Id. at 10, 228-29. That analysis is sound. The path by which St. Luke's reaches its interpretation of the statute is too twisted and laborious for this Court to follow. Instead, the Court prefers the more direct route of attributing to the statute the plain meaning of its language. Section 1395f(b) of the statute speaks in terms of "provider," not institution. Thus, the Secretary did not err in separately applying the lower of cost or charges rule.[7]
St. Luke's next argues that if the lower of cost or charges principle is applied separately to the home health agency, then the use of the step down method of cost finding is an "invalid" way to allocate administrative and general costs in this case. St. Luke's position is that the step down method overallocates administrative and general costs to the home health service in a way that bears no reasonable relationship to its actual costs. This overallocation, in conjunction with the lower of cost or charges principle, subjects St. Luke's to "arbitrary and inadequate" levels of reimbursement. Accordingly, St. Luke's requests that, upon remand, it be permitted to utilize a more accurate cost finding methodology which would not "penalize" it for failing to pass on "artificially inflated costs."[8]
*1396 There is at least superficial merit in St. Luke's argument. There is in the record uncontroverted evidence which tends to demonstrate that the step down method can overallocate administrative and general costs to a provider based home health agency. See e.g., 45 Fed.Reg. at 38015 (1980). That does not end the inquiry, however. The Secretary's regulations specifically provide that if a provider believes the step down method disproportionately allocates costs, it may seek the approval of its fiscal intermediary to use a more sophisticated method of cost finding. 42 C.F.R. § 405.453(d)(2)(ii). In this case St. Luke's did not request a change in either the allocation basis or the cost finding method used with respect to administrative and general costs. The only explanation St. Luke's gives for this failure is that the alternative record keeping would be "unduly burdensome."
The suggestion by St. Luke's that the alternative methods of cost finding would be unduly burdensome begs the question. If the burden was greater than the amount disallowed, why does St. Luke's appeal? If the burden was less, why did it not timely request to use a more sophisticated method? There is nothing in the record which suggests that St. Luke's was unaware of its option to use a more sophisticated method of cost finding. Consequently, the Court must assume that the choice to use step down cost finding was a rational business decision based on St. Luke's estimate of its best interests at the time.
Viewed from this perspective, St. Luke's argument that it was penalized when it was "forced" to use the step down method is somewhat misleading. More accurately presented, St. Luke's position is this: The step down method is "unfair" and the alternative is "burdensome," so the Court should remand the case and instruct the Secretary to figure out a better cost finding method, which, by the way, we haven't yet figured out ourselves. The Court cannot say that it was error for the Deputy Administrator to refuse to adopt this position.
It is not enough to point out that the step down method is less than perfect. The Administrative Procedure Act does not demand perfection; rather, it counsels that agencies must be as fair and competent as is possible in light of the tools that are available to do the job. Here the Secretary has set forth a reasonable, if not perfect, method of cost finding. St. Luke's challenges the Secretary's method, but has at no point suggested a specific alternative method that would be more appropriate. To borrow from Winston Churchill, it appears that the Secretary has established the worst system in the world, except for all the others. Accordingly, this Court rules that the Deputy Administrator acted appropriately in requiring St. Luke's to use the step down method in the absence of any request to use a more sophisticated method.
The Lafayette court, although approving of the Secretary's use of step down cost finding in principle, nonetheless remanded the case in order for the Secretary to determine more precise allocation bases with respect to certain costs. Lafayette at 10, 231. Upon consideration, this Court rules that such a result is not necessary on the facts of this case. Here, the Secretary required St. Luke's to allocate administrative and general costs on the basis of accumulated costs. If the Court were to remand the case for determination of a new allocation basis, it appears that "frequency of use" would be the most likely alternative.[9] Yet, allocating stepped down costs on the basis of frequency of use is virtually indistinguishable from the discrete costing that St. Luke's claims is unduly burdensome. *1397 In both cases St. Luke's would be required to maintain records of the use of the various services that make up administrative and general costs. In any event, it does not appear from the record that such data is available for the years in question here. Since the accumulated cost basis is not facially unreasonable, and there is no suggestion of a more accurate basis that would not be unduly burdensome, the Court rules that it was not an abuse of discretion to require the administrative and general costs here be allocated on the basis of accumulated costs.
Finally, St. Luke's points to the congressional policy of encouraging and facilitating increased availability of home health services as support for the positions it advocates here. The Court agrees with St. Luke's that the committee reports it cites demonstrate a belief in the importance of "stimulat[ing] the growth and development of home health services." S.Rep. No. 94-28, 94th Cong., 1st Sess. 126, reprinted in [1975] U.S.Code Cong. & Ad.News 469, 589. But what Congress might have wanted and what it did are two separate questions, with only the latter constituting an appropriate area of inquiry for the courts. If Congress thinks that this Court's interpretation of the Medicare statute frustrates other important goals, then it is of course free to amend the statute. It is not for this Court to re-write a statute, but rather to interpret it as written. The interpretation supplied here is in keeping with the plain meaning of the language upon which Congress voted.
In accordance with all that has just been said, the decision of the Deputy Administrator is reversed to the extent it denies St. Luke's reimbursement for its accrued sick leave benefits costs in fiscal years 1978 and 1979, and affirmed in all other respects. The case is REMANDED to the Secretary for calculation and payment of reimbursement in accordance with this opinion.
NOTES
[1] Unless otherwise noted, all references to years are to fiscal years.
[2] It appears that in reaching its conclusion the Athens II court mischaracterized the holding of St. Mary. The court quoted St. Mary as holding that the Board "had the authority to consider whether [the undisclosed costs at issue] are reimbursable." Athens II at 5. The bracketed language is not an accurate description of the telephone costs, however. Indeed, Athens II, which did not involve self-disallowed costs, recognized that there are "a few different kinds of disclosure.... A second type of Disclosure is where a provider lists a particular cost item on the cost report but does not request reimbursement.... The `self-disallowance' cases fall into this category." Id. at 5. Thus, even under the Athens II court's definitional standards, the phone costs in St. Mary were not "undisclosed." This makes the Athens II holding that a cost must be "raised" much more curious. It is thus difficult to apply its reasoning to a self-disallowance case such as the one here.
[3] The Court notes that Athens II was not a self-disallowance case. In declining to adopt that court's reasoning here the Court in no way intends to impugn the correctness of the Athens II holding as applied to the facts of that case.
[4] There can be no dispute about this since Aetna mistakenly "disallowed" the unclaimed 1979 sick leave benefits costs. This disallowance demonstrates that, even under the Athens II standard, the Board had jurisdiction because in Aetna's view the costs had been "raised."
[5] Notwithstanding the separate provider numbers, both entities are subject to the same cost finding process, and a portion of St. Luke's indirect costs are allocated to the home health service.
[6] Administrative and general costs include 24 categories of cost items that range from personnel and accounting to printing and insurance.
[7] To the extent that St. Luke's attack is on the requirement that the home health service obtain its own provider number, it is without merit. The statute makes clear that a hospital and a home health agency are separate providers of services. 42 U.S.C. § 1395x(u).
[8] St. Luke's consistently refers to a "penalty" due to "overallocation" of costs to the home health service. This is a mischaracterization of the effect of the Deputy Administrator's actions, however. In its brief St. Luke's asserts that its home health service charges reflected the actual costs of providing those services. Therefore, any refusal to reimburse St. Luke's above these charges, by definition, cannot be a penalty, because it was being reimbursed for its actual costs. The more accurate description of the problem is the "underallocation" of costs to the hospital, which presumably could absorb these costs without triggering the lower of cost or charges rule. In any event, this characterization issue, while helpful in analyzing the problem, does not change the result the Court reaches.
[9] Because St. Luke's never suggests what, if any, allocation basis would be preferable to accumulated costs, the Court must speculate somewhat as to this point. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314305/ | 218 S.C. 174 (1950)
61 S.E.2d 885
BROCK
v.
BROCK.
16428
Supreme Court of South Carolina.
November 10, 1950.
*175 Messrs. Epps & Abbott, of Conway, and W.G. Acker, of Pickens, for Appellant-Respondent.
Messrs. W.C. Mann, of Pickens, and Mann, Arnold & Plyler, of Greenville, for Respondent-Appellant.
*176 November 10, 1950.
STUKES, Justice.
Plaintiff and her now deceased husband, Joe C. Brock, lived their half century and more of married life on farm land in Pickens County inherited by him from his father, which extended into the corporate limits of Central where the home is situate. They had no children and the evidence indicates that as they grew older they became more and more dependent for domestic and business help upon his only nephew, J. Leland Brock, the defendant, who lived about a half mile away, and is the successor to the family name. He is of ability and energy and engages in varied activities, including the operation of a farm and dairy, a cotton gin, and also teaches at Clemson College.
The elder Brock was of advanced age, about eighty-two, and in failing health when he executed and delivered on Nov. 30, 1945, a deed conveying in fee to defendant several parcels of real estate of estimated value of about $25,000.00, including his home place. Plaintiff renounced dower, the formality of which was attacked in the complaint and, to some extent, in the evidence, but is not involved in this appeal except incidentally. She was about ten years younger than her husband and there is no indication that she is not still fully possessed of her faculties; indeed, her testimony indicates that she is mentally, at least, well preserved.
Evidence from other occupants of the home established that for many years the maker of the deed and plaintiff repeatedly expressed their intentions that defendant should have the property and after execution of the deed they likewise expressed satisfaction that the matter was so settled. Defendant appears to have been as attentive to them and as *177 responsive to their needs as a son would have. At the same time, he borrowed money from his uncle on notes, the details of which were not included in the evidence. However, he paid hospital, medical, drug and other bills for necessaries for his aunt and uncle, which were likewise not proven with accuracy. Antagonism is absent even from his testimony in this case.
There is some conflict in the evidence but we think the preponderance is, as found by the trial court, that the grantor took his old deeds to a lawyer in Pickens and instructed him to prepare the deed to defendant and mail it to him with bill for services, which the lawyer did, and returned in like manner the old deeds to the grantor, in whose home they were found after his death. By mistake of the lawyer he included in the deed a tract of 119 acres which the grantor had conveyed to another many years before, which error is quite understandable and we think is not of the significance which plaintiff would attach to it. Afterward defendant procured the services of a long experienced notary public at Central, who had been magistrate for eight years, and took him and a cotton gin employee, who was also experienced in the execution of legal papers, to the Brock home where the deed was executed in their presence. The notary and the other witness to the deed testified very clearly as to all of the details of the execution and their evidence is convincing of the truth of it and leaves no doubt that plaintiff and her husband fully understood what they were doing although the deed was not read over to them, whence the persistence of the error of the inclusion of the 119 acre tract. The notary testified fully as to the renunciation of dower before him by the plaintiff.
He and the other witness to the deed said that when they entered the home they were greeted by plaintiff and her husband soon joined them. Defendant stated that they had fixed the papers, later referred to in conversation as a deed, and had come to have them (it) signed, and plaintiff responded *178 approvingly, whereupon they proceeded with the execution at a table in the large living room. Afterward plaintiff's husband commented, in effect, that "it is a job to deed everything you have away," and plaintiff then said, "We will be well cared for." There was no hesitation on the part of either and everything was pleasant and agreeable. Both witnesses were firm in their opinions that the grantor and his wife were entirely capable and acted knowingly and voluntarily in the execution and delivery of the deed.
Of those who testified all who had opportunity to closely observe plaintiff and her husband at or about the time of the making of the deed (except the plaintiff herself) were in agreement that both were fully capable of comprehending the nature and effect of the conveyance. There was no medical testimony although the grantor had a few months before been a patient in a hospital. The contrary testimony to the point was weak and inconclusive and came from witnesses, except the interested plaintiff, whose opportunities for observation were limited.
The grantee, the defendant, thereafter took charge of the properties and handled them as his own. He spent about $1,600.00 in enlargement, repair and painting of the home, which adapted it for occupancy by an additional couple, relatives of plaintiff, who cared for the old couple, and he gave these relatives a town building lot from other property, which was worth $2,000.00, to compensate them. He also repaired farm buildings, terraced anew and otherwise improved the lands. He made regular monthly payments of $50.00 to plaintiff until May, 1948, when this action began to brew. Meanwhile, he paid the expenses of the last illness and funeral of plaintiff's husband. There is no proof in the evidence of any dissatisfaction at the transaction or unrest of the latter during his subsequent lifetime, or of plaintiff for about a year after his death. The deed had been executed in November 1945, the grantor died May 14, 1947, and this action was commenced in September 1948. Plaintiff admitted *179 in testimony, in effect, that she realized the significance of the deed and talked to others about it within a few weeks after its execution. Will of the grantor was found after his death, made many years before, in 1927, by which he devised the property to plaintiff, which may account for her belated decision to follow her present course.
By her complaint the plaintiff sought to set aside the deed on the grounds of alleged mental incapacity of the grantor, undue influence in its execution, inadequate consideration and fraud; and asked for an accounting of rents and profits. The defendant denied in his answer all of the material allegations of the complaint and set up claim for betterments in the alleged amount of $12,000.00. Reference was had for the taking and report of the testimony upon which the case was heard by the presiding judge who found upon all issues for the defendant. However, the decree contains unusual provisions to the effect that in view of defendant's intentions, stated in his testimony, plaintiff should have the exclusive right to reside in the home, use necessary outbuildings, and receive the rentals of such portions of the house as she should desire to let to others, with the obligations on defendant to maintain the premises in repair and also pay plaintiff annually one-fourth of the net rentals and income received by him from the remainder of the property, beginning January 1, 1950. Defendant appealed from the provisions of the judgment which put these burdens upon him upon the ground of the inconsistency of them with the conclusions of fact and law; but upon argument of the case before this court, defendant's counsel expressly abandoned this appeal, whereby, upon affirmance of the decree, defendant will be bound to perform the obligations which have been stated.
The action is not an effort to establish a trust with respect to the property conveyed, as in All v. Prillaman, 200 S.C. 279, 20 S.E. (2d) 741, 159 A.L.R. 981, and Scott v. Scott, 216 S.C. 280, 57 S.E. (2d) 470, *180 but is a frontal assault upon the validity of the deed because of fraud in its procurement, absence of consideration, undue influence and mental incapacity. None of the alleged grounds, except that relating to consideration, was sustained by the preponderance of the evidence. Suspicion and surmise, if warranted by the evidence, are, of course, not enough. Although the draftsman stated in the deed consideration of $1,000.00, nothing was paid upon delivery. This, however, in our view is unimportant in the controversy. An important element of the ownership of property is the right of the owner to convey it on any terms within its intention. One may be a donor as readily as a vendor. Under the other facts present here this disposes of the consideration feature of plaintiff's attack upon the deed.
Plaintiff has resort in argument to the salutary principle that a grantee who occupied a position of trust and confidence with the grantor in a voluntary deed or one upon inadequate consideration has the burden of proof to show by the evidence that he was guiltless of fraud and undue influence in the procurement of the deed. Granting the applicability of the rule here, we agree with the trial court that defendant successfully met that test.
The case involves a frequent and troublesome subject of litigation. Our leading modern authority is Page v. Lewis, 209 S.C. 212, 39 S.E. (2d) 787. See also, Lyon v. Bargiol, 212 S.C. 266, 47 S.E. (2d) 625. Page v. Lewis, heavily relied upon, resulted successfully for plaintiffs upon facts absent here. It was said in the opinion that, quoting: "There are many other cases where deeds have been set aside, and the cases are likewise numerous where the Court has refused to set them aside, for it depends upon the facts and circumstances of the particular case." [209 S.C. 212, 39 S.E. (2d) 801.] A recent case of contrary result upon the point of mental capacity to execute a deed is Mathias v. Mathias, 206 S.C. 276, 33 S.E. (2d) 626. These decisions contain many citations of *181 authority to which reference may be had. Among them perhaps that most like this case is Huguenin v. Adams, 110 S.C. 407, 96 S.E. 918, where a similar deed was sustained.
In Page v. Lewis, there was abundant evidence of express and repeated importunities of the grantor to make the deeds against his will. Fictitious threats of impending litigation were communicated to him by those who should gain by the conveyances. There was convincing evidence of mental deterioration, proof of influence for ulterior purpose, subsequent declarations by the grantor which established his total lack of understanding of the legal effect of the deeds which he had executed; and when he awoke to it and discovered the falsity of the representations which influenced him to make the deeds, he repudiated them and brought the action to set them aside. These differences distinguish the cases without effort to point out more.
Plaintiff took many exceptions to the decree which were reduced in number by the statement of questions with which her brief on appeal was properly prefaced. Each of the questions has received careful attention and is disposed of by what has been said, without the necessity of separate discussion.
The judgment is affirmed and the costs and disbursements of the appeal will be taxed against defendant, whose appeal was abandoned.
BAKER, C.J., and TAYLOR and OXNER, JJ., and L.D. LIDE, A.A.J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314320/ | 217 S.C. 496 (1950)
61 S.E.2d 56
STATE
v.
SHIELDS.
16404
Supreme Court of South Carolina.
September 6, 1950.
Messrs. John C. Williams and Thomas W. Whiteside, of Spartanburg, for Appellant.
Messrs. Samuel R. Watt, Solicitor, and T.E. Walsh, of Spartanburg, for Respondent.
September 6, 1950.
OXNER, Justice.
Appellant, Claude Shields, was convicted of burglary. The jury recommended mercy and the trial Judge imposed a sentence of seven years. The only question raised by the exceptions is whether the Court erred in refusing a motion *497 for a directed verdict upon the ground that the evidence was insufficient to sustain the charge.
On the night of November 8, 1949, the residence of Dr. Hugh S. Black in the City of Spartanburg was forcibly entered while the occupants were away and a metal safe, weighing about 700 pounds and containing approximately $200.00, a war bond and some jewelry, was removed from a bedroom closet. The fact that a burglary was committed is undisputed. Appellant's contention is that the evidence is insufficient to connect him with the crime.
One of the witnesses for the State, Edward B. Patterson, who admittedly participated in the burglary, testified substantially as follows: On the day preceding the crime, he and one Butler went to Spartanburg for the purpose of getting in touch with a person named Claude Shields whom they had never met. About 7:30 that night they went to the Pecan Grove, a night club near the City of Spartanburg operated by appellant, and met the proprietor who stated his name was Claude Shields. They remained at the Pecan Grove several hours when they returned to a local hotel. The following afternoon Patterson purchased an 18 inch crawbar to be used in a contemplated burglary. About 7:30 or 8:00 that night, Patterson and Butler again went to the Pecan Grove and were met outside by Claude Shields. About 8:30 the three men left in a car and broke into the residence of Dr. Black but were unable to find the safe. They left but, at the insistence of Shields, soon returned to make a further search. On the second trip they found the safe, knocked off the combination, but were unable to open the safe. They then sought to remove it from the house but it was too heavy for them to handle. The three men went back to the Pecan Grove where in a few minutes six men from Georgia, whom Shields knew, drove up. After some discussion, three of the men from Georgia agreed to assist in removing the safe and joined Shields, Patterson and Butler in returning to the residence of Dr. Black. They placed the safe in the trunk of a car and carried it to a garage or barn located about 400 *498 feet to the rear of the Pecan Grove, where it was broken open and the money divided. After the contents were removed, the safe was placed in the trunk of Shields' car and hauled to an isolated place in that community. During his examination by the solicitor, Patterson denied that appellant was the Claude Shields who was with them on the night of the burglary, although he admitted that one of the men with them was introduced as Claude Shields and had charge of the Pecan Grove.
Another witness for the State, Tasker Brown, testified that while sitting in his car at the Pecan Grove about nine or ten o'clock on the night of the burglary, he overheard a conversation between Shields, Patterson, Butler and some men from Georgia to the effect that assistance was needed in removing a safe; and that shortly thereafter six men, including Shields, Patterson and Butler, left the Pecan Grove, stating that they were going to the home of Dr. Black. This witness further stated that some time later he fell asleep and was awakened by Claude Shields who asked him to haul a safe, which he refused to do; and that Shields then got his own car. Brown positively identified appellant as the person seen with Patterson and Butler on the night of the burglary.
The officers found the safe about a mile and a half east of the Pecan Grove. They discovered some of the cement packing and metal parts in appellant's barn located back of the Pecan Grove and some of the cement packing was also found in the trunk of his car. There were marks in the trunk of this car which appeared to have been made by a heavy object.
Appellant admitted that he operated the Pecan Grove and that there was no other person by the name of Shields connected with the place. He denied having ever seen either Patterson or Brown prior to being arrested for the crime and offered testimony to the effect that on the night of the burglary he remained continuously at his place of business until closing time. On cross examination, appellant expressed *499 the opinion that some enemy of his had thrown the cement in the trunk of his car.
The trial Judge was entirely correct in refusing appellant's motion for a directed verdict. The evidence fully sustains the verdict rendered by the jury. It is true that Patterson testified positively that appellant was not the Claude Shields who participated in the crime, but the State was not concluded by this statement. The jury could have rejected this part of Patterson's testimony and accepted the remaining portion as true. State v. Nelson, 192 S.C. 422, 7 S.E. (2d) 72; Ex parte Nimmer, 212 S.C. 311, 47 S.E. (2d) 716; State v. Green, 213 S.C. 170, 48 S.E. (2d) 641.
It is undisputed that appellant's name is Claude Shields and that he operated the Pecan Grove. No other person by that name worked at this place. Patterson admitted that one of the men who participated with him in the crime was in charge of the Pecan Grove. Brown positively stated that it was appellant who was seen by him on the night of the burglary in company with Patterson, Butler and the other men.
In addition to the testimony of Patterson and Brown, there are the circumstances that cement packing and metal parts of the safe were found in the barn to the rear of the Pecan Grove and that cement packing identified as that coming from Dr. Black's safe was found in the trunk of appellant's car. Counsel for appellant in their brief frankly state that "possession of the recently stolen safe in Claude Shields may be assumed," but it is contended that while such possession may be some evidence of participation in larceny, it affords no support for a conclusion that appellant committed burglary. We have held to the contrary. State v. Campbell et al., 131 S.C. 357, 127 S.E. 439; State v. Baker, 208 S.C. 195, 37 S.E. (2d) 525; State v. Kimbrough, 212 S.C. 348, 46 S.E. (2d) 273. These decisions are in accord with the general rule elsewhere. McNamara v. Henkel, 226 U.S. 520, 33 S. Ct. 146, 57 *500 L.Ed. 330; 9 Am. Jur., Burglary, Sections 60, 64, and 74. The case of State v. Lyles, 211 S.C. 334, 45 S.E. (2d) 181, does not, as counsel for appellant seem to think, lay down a different rule. It was there held that the evidence was insufficient to sustain a conviction on the charge of breaking and entering a railway car in the nighttime with intent to commit the crime of larceny. While in that case the defendant was found in possession of goods stolen from the railroad car, there was no evidence that said car was broken into in the nighttime. In the instant case it is undisputed that a burglary was committed and the burglary and larceny are shown to have been parts of the same transaction.
Judgment affirmed.
BAKER, C.J., and FISHBURNE, STUKES and TAYLOR, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314327/ | 61 S.E.2d 443 (1950)
232 N.C. 441
BOSTIC et al.
v.
BLANTON et ux.
No. 163.
Supreme Court of North Carolina.
October 11, 1950.
*444 Hamrick & Jones, Rutherfordton, for plaintiff appellees.
Oscar J. Mooneyham, Forest City, and J. S. Dockery, Rutherfordton, for defendant appellants.
BARNHILL, Justice.
The decisive question here involved is this: What is the true dividing line between *445 the property of the plaintiffs and the property of the defendants?
It is apparent from the judgment entered the court below concluded that this dividing line as now constituted begins at a stake in the Young line 20 feet south 20 degrees west of the point of intersection of the Young line and the southern line of a public
*446 alley (point C on the map) and runs thence south 74 degrees east approximately 45½ feet to a point exactly opposite the rear end of the party wall (point F on the map), thence northerly about one foot to the center of the party wall (point G), thence in a southeasterly direction with the center of said wall to a stake on Depot Street (point D), an admitted common corner. We are inclined to the view that this is the correct conclusion and that the judgment based thereon should be sustained.
The parties claim through a common source and the plaintiffs possess the superior record or paper title. These are determinative facts which must be kept in mind in the solution of the question posed.
Resort may not be had to a junior conveyance for the purpose of locating a call in a senior deed. Cornelison v. Hammond, 224 N.C. 757, 32 S.E.2d 326; Thomas v. Hipp, 223 N.C. 515, 27 S.E.2d 528; Town of Belhaven v. Hodges, 226 N.C. 485, 39 S.E.2d 366. We must direct our attention solely to the deeds in the Bostic chain of title to ascertain the lines in his deeds and the property embraced therein.
The description as therein contained does not begin at the common corner. It begins at the intersection of the western line of Depot Street and the southern line of the public alley (point A). It runs thence north 74 west 114 feet to the Young line (point B), thence south 20 degrees west 20 feet to a stake (point C), thence south 74 east. So far there is no call for a natural or artificial object that would alter or vary these calls. They must be accepted as the proper bounds of plaintiffs' property to the point where the last callsouth 74 eastcomes in conflict with the call for the center of the brick wall. The "artificial object" call, the brick wall, is controlling to the extent of its length.
There is no evidence of actual adverse possession by defendants of the disputed land between the points G-1-C-F. Therefore, the plaintiffs and those under whom they claim have in law been in possession of this property since the unity of possession was severed by the Biggerstaffs more than 20 years ago.
Constructive possession follows the superior title. Ownbey v. Parkway Properties, Inc., 222 N.C. 54, 21 S.E.2d 900. He who has the better title has constructive possession of all land within the bounds of his deed which is not in the actual adverse possession of another. Wallin v. Rice, N.C., 61 S.E.2d 82. This rule applies even when both parties claim under color of title. Whiteheart v. Grubbs, 232 N.C. 236, 60 S.E.2d 101.
Defendants contend, however, that their line begins at the common corner on Depot Street, Long'snow plaintiffs'corner (point D) and runs thence with Long's line with the middle of the wall of the first and second buildings 115.5 feet to Margart Young's line; that under this call, when the rear end of the brick wall is reached, the call should be extended in a direct line to the Young property at point 1 on the map; and that thus the common corner in the Young property is established.
If the calls in the deeds of defendants alone were involved, this might be true. We may, therefore, concede without deciding, that the dividing-line call in the defendants' deeds runs from point D on Depot Street to point 1 in the Young line as contended by them. Even so, this merely creates a lappage, and where the title deeds of two rival claimants to land lap upon each other, and neither is in the actual exclusive possession of any of the land covered by both deedsthat is, the lappagethe law adjudges the possession of the lappage to be in the one who has the better title. Whiteheart v. Grubbs, supra. Furthermore, to follow this procedure would constitute a reversal of the call in plaintiffs' deeds for the purpose of ascertaining their corner in the Young line. The rule prohibits such procedure even when following the lines of the senior title so long as the lines and corners may be ascertained by following the calls in the senior deed in their regular order. Town of Belhaven v. Hodges, supra; Cornelison v. Hammond, supra.
There is no need to reverse any call in plaintiffs' deeds in order to fix their corner in the Young line. The beginning corner *447 at the intersection of Depot Street and the public alley (point A) and the next corner at the intersection of the alley and the Young line (point B) are not in dispute. They may easily be ascertained by following the calls of the deeds. Then the common corner in the Young line is ascertained and fixed by continuing along the Young line south 20 west 20 feet (point C).
Neither a resort to a reversal of lines nor to a junior conveyance will be permitted to vary this result.
It is asserted, however, that the judgment of the court below breaks the course of the dividing-line call and creates an offset therein, whether the line be run by beginning at point D or point C. This is quite true. But the offset is created by operation of law as a result of the peculiar circumstances of this case. There is no brick wall from C to F. Under the law, plaintiffs have been in possession of the land described in their deeds up to this line since the unity of possession was severed more than 20 years ago. The brick wall is an artificial boundary at all times recognized by plaintiffs. They have never claimed title to and have never possessed the land to the south of this wall. Their right of entry thereon, if any, is forever barred. Thus the line from F to G is closed and the offset is created.
For the reasons stated the judgment below is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314329/ | 61 S.E.2d 619 (1950)
232 N.C. 555
HARRIS
v.
FAIRLEY, State Warehouse Superintendent, et al.
No. 314.
Supreme Court of North Carolina.
November 1, 1950.
*620 Burgess, Baker & Duncan, Raleigh, for defendant North Carolina Cotton Growers Coop., Ass'n, appellant.
James & Speight, Greenville, for plaintiff-appellee.
DEVIN, Justice.
This was a separate appeal in the same case reported, 61 S.E.2d 616, where the material portions of the pleadings are set out.
At the May Term 1950 of the Superior Court of Pitt County, judgment was rendered sustaining the demurrer of the North Carolina Cotton Growers Cooperative Association to the complaint and to the answer and cross-complaint of the defendants Farmville Bonded Warehouse Company, Henry Clark Bridgers and National Surety Corporation. The plaintiff noted exception and gave notice of appeal but later withdrew it. The defendant Warehouse Company and others appealed from the judgment and brought the case here for review.
Pending the appeal at the August Term 1950 of Pitt Superior Court plaintiff moved to amend his complaint so as to ask recovery on the original allegations of his complaint against the North Carolina Cotton Growers Cooperative Association, the Farmville Bonded Warehouse Company and others, and the court entered order allowing the amendment. The Cotton Growers Cooperative Association excepted and appealed.
Ordinarily the allowance of the amendment would have been a matter resting in the sound discretion of the Presiding Judge. But the appellant bases its appeal on the ground that at the time the order was entered the case was in the Supreme Court, and that the Superior Court was without power to enter the order.
Undoubtedly the rule is that an appeal from a judgment rendered in the Superior Court suspends all further proceedings in the cause in that court, pending the appeal. Vaughan v. Vaughan, 211 N.C. 354, 190 S.E. 492; Ridenhour v. Ridenhour, 225 N.C. 508, 514, 35 S.E.2d 617; Lawrence v. Lawrence, 226 N.C. 221, 37 S.E.2d 496; Hoke v. Atlantic Greyhound Corp., 227 N.C. 374, 42 S.E.2d 407; In re Will of Puett, 229 N.C. 8, 14, 47 S.E.2d 488; Veazey v. Durham, 231 N.C. 357, 57 S.E.2d 377; G.S. § 1-294. This rule is subject to the exceptions noted in Hoke v. Greyhound Corp., supra, which, however, have no application here. In Pruett v. Charlotte Power Co., 167 N.C. 598, 83 S.E. 830, 831, it was said, "The court below is without power to hear and determine questions involved in an appeal pending in the Supreme Court."
The case cited by the plaintiff, Powell v. Ingram, 231 N.C. 427, 57 S.E.2d 315, is not in point. Nor does the decision in Veazey v. Durham, supra [231 N.C. 357, 57 S.E.2d 384], sustain the ruling below. In that case the trial of the cause on its merits was affirmed though an attempted appeal by the defendant from the denial of its motion for a reference was pending at the time. Justice Ervin, speaking for the Court, said: "An appeal did not lie from the discretionary ruling denying the motion for a compulsory reference, and in consequence the attempted appeal of the defendant was simply a nullity."
*621 Here the appeal, properly constituted, which was pending presented the question of the sufficiency of the pleading of the Bonded Warehouse Company to impose liability on the defendant Cotton Association for the loss complained of in plaintiff's complaint.
We think the order to which appellant excepted was improvidently entered while the case was pending here on appeal.
Reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260657/ | 228 N.J. Super. 211 (1988)
549 A.2d 462
STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
JAMES BROWN AND RONALD EMM, DEFENDANTS-RESPONDENTS.
Superior Court of New Jersey, Appellate Division.
Argued October 4, 1988.
Decided October 25, 1988.
*214 Before Judges ANTELL, DREIER and BROCHIN.
Simon Louis Rosenbach, Assistant Prosecutor argued the cause for appellant (Alan A. Rockoff, Prosecutor Middlesex County, attorney; Simon Louis Rosenbach, of counsel and on the brief).
Barry T. Albin, attorney argued the cause for respondent James Brown (Wilentz, Goldman & Spitzer, attorneys; Barry *215 T. Albin, of counsel and on the brief and Jeffrey L. Menkin, on the brief).
William G. Brigiani argued the cause for respondent Ronald Emm (Brigiani, Gelzer, Cohen & Schneider, attorneys; William G. Brigiani, of counsel and on the brief and Phyllis Joy Cohen, on the brief).
The opinion of the court was delivered by DREIER, J.A.D.
The State has appealed from an order of the Law Division granting defendants new and separate trials after a jury found them both guilty of death by auto, N.J.S.A. 2C:11-5, after a 12-day joint trial. The issue of severance had previously been considered at a pretrial motion by a different judge who determined in a reported decision that the joint trial could be held. State v. Brown, 219 N.J. Super. 412 (Law Div. 1987).
There were three versions of the incident which resulted in the death of the innocent victim, Frank Dmitri. Defendants and the State all agree that between 7:30 and 8:00 p.m. on September 23, 1985, 66-year old James Brown and 18-year old Ronald Emm were in the same lane on Morristown Road, Old Bridge, waiting for a stop light at an intersection. Brown was alone in his car a few cars ahead of Emm who was accompanied by his girlfriend Marilyn Decker. When the light turned green, Brown was slow to accelerate. After the intervening cars either turned or passed Brown, according to the State and Emm, Emm passed Brown, and Brown became angry at Emm for doing so. According to Brown, Emm did not complete his pass, but rather followed Brown closely down Morristown Road, flashing his high beams and tailgating. As the cars proceeded down Morristown Road they passed a pick-up truck going in the same direction. The occupants of the truck, Christopher Mosley and Nicholas LaConte, testified that they watched the two cars drive ahead and they appeared to bump each other, although an examination of the vehicles after the *216 eventual accident proved there was no such contact. Mosley placed Emm in front; LaConte testified to the contrary.
The vehicles then came to a stop sign at the intersection of Morristown Road and Route 34. Both turned north onto Route 34, and again the versions diverge. It is clear that the cars drove abreast of each other proceeding north on the two-lane highway, with Brown at least partially in the southbound lane and Emm in the northbound lane. On occasion Emm fell behind Brown. Emm claims that Brown tried to push him off the road onto the shoulder; Brown claims that Emm passed him on the shoulder and then kept turning towards him, forcing Brown into the oncoming southbound lane. He testified he was terrorized by this situation, as he had been since the original tailgating episode on Morristown Road. Brown further contends that although he drove past his house, he was afraid to turn in the driveway, lest Emm and his companion (Brown only saw a second figure in the car, and could not identify it as a man or woman) follow him into the driveway and possibly harm him or his 89-year old mother, who he thought might be home.
While driving north along Route 34, defendants passed a New Jersey Transit bus proceeding in the opposite direction. The driver of the bus, Harry Maskell, testified that he clearly saw defendant Emm riding in the northbound lane and turning his wheel towards Brown's vehicle, forcing Brown into the southbound lane. Maskell had to drive his bus on the shoulder in order to avoid Brown's car. He saw that Emm slowed down, and Brown reentered the northbound lane. As the two cars drove past the intersection of Cottrell Road and Route 34 a fourth witness, Roger Martin, saw the vehicles. Martin testified that the cars appeared to bump each other as they drove side-by-side, both proceeding at the same speed. Brown's car was half in the northbound lane and half in the southbound lane; Emm's car was half in the northbound lane and half on the shoulder. Emm's car then veered to its left, causing Brown's car to move further into the southbound lane. Martin then lost sight of the cars, but soon heard a loud crash, and *217 immediately drove his vehicle to the scene of the accident. Brown's car had hit the Dimitri car head-on. Emm contended that Brown had passed him on the left (he once incorrectly said "right"), veered in front of Emm for about two to three car lengths, hit the curb and then veered back into the southbound lane of traffic, hitting Dimitri's car. The State accepted the version of each defendant insofar as it implicated the other.
After the accident, Emm did not stop, but rather proceeded a short distance to the local volunteer firehouse where he served as a volunteer fireman. He reported the accident to the firemen on duty and the police were called. Emm then returned with the firemen to the scene to give assistance. Neither at that time nor for a period of two days did Emm tell of his own involvement or the circumstances allegedly leading to the accident. Only when he heard that the police were looking for another vehicle did he volunteer his version of the facts. Emm's girlfriend, Marilyn Decker, gave her statement the same time as Emm, and corroborated his story.
LaConte and Mosley in their truck, and Martin in his car, drove to the scene shortly after the accident occurred. All three of these witnesses told police about an apparent drag race between Brown's car and another vehicle. During the search for this other vehicle, the police also found the fourth witness, Harry Maskell, the bus driver.
After the jury verdict finding both defendants guilty of the third degree[1] offense of death by auto, N.J.S.A. 2C:11-5, defendants filed motions for new and separate trials, principally on the ground that their defenses were antagonistic. In the judge's opinion granting a new trial, she agreed with the defendants that their defenses were antagonistic, giving her *218 general views and listing three specific reasons why defendants should be tried separately: (1) two of the witnesses, Mosley and LaConte, gave testimony that was not believable, and Mosley was the sole witness who even partially corroborated Emm's version of the facts; (2) she had improperly admitted evidence of Emm's prearrest silence, thus violating his Fifth Amendment right against self-incrimination; and (3) she had erred by failing to charge the lesser-included motor vehicle offenses of reckless driving and careless driving. Consequently, the judge found there was "a manifest denial of justice under the law."
After analyzing these reasons individually and collectively, and noting the care with which the trial judge complied with the provisions of R. 3:20-1 to support her finding of "a manifest denial of justice," we sustain her grant of new and separate trials for the defendants. We will, however, analyze her reasons one by one.
The trial judge agreed with the defendants' original basis for their motions for a new trial, namely that their defenses were antagonistic. She acknowledged that when the pretrial motion judge denied the motion to sever, he "could not have anticipated" the way this trial developed. In fact, when both defendants renewed their severance motions at the start of the trial, the trial judge herself denied them.
In State v. Brown, supra, 219 N.J. Super. at 419, the motion judge stated that at trial the defendants would have similar defenses, namely that they had neither explicitly nor implicitly agreed with each other to play a "game" of "cat and mouse," and therefore both should be acquitted. Both defendants were foreseen as attacking the State's "theory which is premised on the concert of action between the two." Ibid. The judge cited severance rules in a Connecticut and three federal cases (Id. at 417-418), determining that in those cases where severance had been ordered "the jury, in order to accept the core of testimony offered on behalf of one [defendant], was forced not only to reject the other but to convict as well." Id. at 419. The *219 pretrial judge did not believe that the case would develop along the lines that it did, finding "the defenses antagonistic to each other but not necessarily irreconcilable or mutually exclusive." Ibid.
The trial judge stated that in actuality the trial consisted of the prosecutor putting on a witness, asking a few questions and then leaving it to each defendant's attorney to prosecute the other defendant. The judge noted that the pretrial judge "could not have anticipated the spectacle of Mr. Brown beating up on Mr. Emm and all of the witnesses against Mr. Emm and [the] atmosphere that that created. It was, to put it bluntly, awful...."
In addition to the defendants' antagonistic defenses, the trial judge felt that the testimony given by Mosley and LaConte was not credible. We have separately viewed their versions of the events. Mosley and LaConte apparently testified in a straight-forward manner concerning their observations as the cars passed their truck. Clearly, they were not entirely consistent in all details, but this does not render their testimony incredible. They gave their names to the police as witnesses at the scene and were asked to appear hours later at headquarters to give detailed statements. The part of their testimony which the trial judge found incredible was not their account of the accident, but their evasive explanations of their activities after the accident and before they reached headquarters. This, however, was largely an irrelevant issue.[2]
*220 Yet, we cannot lightly dismiss the trial judge's frank appraisal of the evasiveness of these witnesses, only one of whom partially supported Emm's version of the facts, and the credibility of witnesses Maskell and Martin, who strongly supported Brown's account. The trial judge recognized that credibility is within the province of the jury not the trial court, but in this "messy and aggressive trial being fought between Emm and Brown," the judge's forceful observations as to the credibility of these four witnesses must be given some credence by us.[3]
In State v. Sanchez, 224 N.J. Super. 231 (App.Div. 1988), this court reviewed the question of necessary severance. Judge Deighan there cited with approval the motion judge's reported decision in the preliminary stage of the case before us. In Sanchez, however, each defendant contended the other had shot the victim. Yet as Judge Deighan there noted, neither defendant produced hostile witnesses against the other; there was substantial evidence independent of the defendants' testimony to sustain the conviction; and all of the State's witnesses testified to seeing both defendants enter the premises with weapons, indicating that the defendants were acting in concert, thus subjecting each to accomplice liability. Id. at 248. Under those circumstances, severance was unnecessary.
*221 In the case before us, while the State urged that the defendants were acting in concert, each defendant depicted himself as an innocent victim of the other's aggression. While technically each of the independent witnesses was called by the State, the trial judge made it clear in her oral opinion, and we concur from our reading of the transcript, that the interrogation of the witnesses and parties was to a large extent adversarial between the defendants, rather than between the State and each defendant.
As we noted in Sanchez:
The grant or denial of a motion for severance is entrusted to the sound discretion of the trial court.... Denial of such a motion will not result in a reversal unless there is a showing of prejudice or a mistaken exercise of the trial court's discretion. [Citations omitted; 224 N.J. Super. at 244-245].
In this respect the presumption of validity attached both to the motion judge's denial of the severance motion and to the trial judge's concurrence in that determination at the commencement of the trial. Yet deference must also be given to the trial judge's determination of whether the failure to sever the claims constituted prejudice. The question here is a close one, and turns not only on this point, but also upon the second and third grounds noted by the trial judge: Emm's prearrest silence, and the judge's failure to charge concerning lesser-included traffic offenses.
The trial judge stated that she had mistakenly permitted inquiry into Emm's failure to report his involvement in the incident until two days thereafter. In State v. Deatore, 70 N.J. 100 (1976), the Court held that post-arrest silence cannot be used against a defendant, even in the face of an accusatory statement. But in Jenkins v. Anderson, 447 U.S. 231, 100 S.Ct. 2124, 65 L.Ed.2d 86 (1980), the United States Supreme Court determined that neither the Fifth nor Fourteenth Amendment are violated by the use of pre-arrest silence to impeach a criminal defendant's credibility. 447 U.S. at 238, 100 S.Ct. at 2129, 65 L.Ed.2d at 95. The Court determined, however, that each jurisdiction is left to
*222 formulate its own rules of evidence to determine when prior silence is so inconsistent with present statements that impeachment by reference to such silence is probative. [447 U.S. at 239, 100 S.Ct. at 2129, 65 L.Ed.2d at 95].
In State v. Merola, 214 N.J. Super. 108 (App.Div. 1986), certif. den. 107 N.J. 91 (1987), Judge Baime reviewed the authorities on the subject of pre-arrest silence. In Merola the defendant was questioned "concerning his failure to initially contact the police" to volunteer exculpatory information. 214 N.J. Super. at 114. The trial judge there charged the jury that a suspect has no obligation to come forward with exculpatory facts once he has become a subject of criminal investigation, but that the jury could consider defendant's silence prior to that time. Defendant argued that New Jersey's common-law privilege against self-incrimination afforded greater protection than its federal counterpart. This court found it unnecessary in Merola to decide all aspects of the question. Judge Baime there noted the split in authority, but found that for such pre-arrest
silence to be probative, it must appear that the failure to speak was unnatural and that an ordinary person would have come forward with the exculpatory information under the circumstances. [214 N.J. Super. at 118].
In Merola the defendant would not have been expected to have come forward with the exculpatory information since it also had substantial incriminatory content relating to the purchase of drugs in violation of the condition of defendant's probation.
We similarly need not reach this question, for it appears that under Emm's version of the incident Brown had been a foolish and aggressive driver who had even attempted to run Emm off the road. Yet Emm had no notice for two days that the police were seeking the driver of another car, and at that point he came forward. One would have to accept Brown's version of the occurrence for Emm to have been a cause of the accident. If truly Brown had passed Emm, hit the curb and careened into the Dimitri vehicle, then Emm could reasonably have considered that he had discharged any civic or moral duty he may have had by reporting the accident immediately to the firehouse and returning to the scene to try to help. There is no statutory duty on the part of a witness to an accident to stop *223 and render assistance, even if the witness is the driver of a vehicle passed by the offending car which immediately skidded and was involved in a serious accident. Butler v. Jersey Coast News Co., 109 N.J.L. 255, 258-259 (E. & A. 1931). Butler, interpreting the predecessor statute to N.J.S.A. 39:4-129(c), held that such a witness was not "involved" in the accident unless he "crowd[ed] the driver of the [other vehicle] when it passed or that he speeded up to prevent the passage." Id. at 259. Given Emm's version of the accident, his silence was legally permissible. Brown and the State could not claim that if Emm truly believed his version of the facts he had any legal duty to speak before he did.
At most, this is a case where Emm gave a partial statement and therefore may be impeached using his initial report as a prior inconsistent statement. See State v. Provet, 133 N.J. Super. 432 (App.Div. 1975), certif. den. 68 N.J. 174 (1975). See Evid.R. 20, 22 and 63(1).[4] Since we perceive no proof of acknowledged facts which show the silence to be conduct indicative of a consciousness of guilt, comment upon "silence," was not proper here. The trial judge was correct in her ruling on this point, but we do not reach the constitutional issue which she raised. As in Merola, however, if this were the only error, it would have been harmless, although concededly it did play more of a role in this case than in Merola.
When we look at the third point raised by the trial judge, we see that the combined issues require reversal. She charged the jury solely concerning the offense of death by auto which requires proof of a homicide "caused by driving a vehicle *224 recklessly." N.J.S.A. 2C:11-5a. The standards of purposeful, knowing, reckless, and negligent conduct are defined in N.J.S.A. 2C:2-2b(1) through (4). In State v. Concepcion, 111 N.J. 373 (1988), the defendant was convicted of reckless manslaughter based upon his handling of a firearm. The Supreme Court first reiterated that the jury must be given "[a]ccurate and understandable jury instructions in criminal cases," and that "the better practice is to mold the instruction in a manner that explains the law to the jury in the context of the material facts of the case." 111 N.J. at 379. The Court further stated that the standard of recklessness should not have been given merely in the context of an abstract definition, but rather should have been compared "with other mental states such as purposely ..., knowingly ..., and negligently.... The jury's understanding of these distinctions could have been enhanced if these mental states had been clarified by illustrative examples." Id. at 381. Finding the absence of such a tailored charge, the Court directed a new trial.
A similar error was sensed by the trial judge in the case before us. While we disagree that the jury should have been instructed to determine whether either defendant was guilty of a lesser-included motor vehicle offense, see State v. DeLuca, 108 N.J. 98, 110-111 (1987), cert. den. ___ U.S. ___, 108 S.Ct. 331, 98 L.Ed.2d 358 (1987), the judge could have informed the jury that the motor vehicle offenses of reckless driving and careless driving did exist, as illustrations of the concepts of recklessness and criminal negligence.[5] Although either of defendants' conduct may have been reckless along the *225 way, justifying a motor vehicle conviction for reckless driving, the recklessness must have proximately caused the death for defendant to have been criminally responsible. Furthermore, if either defendant had been merely careless, as the term is used in the careless driving statute, N.J.S.A. 39:4-97, in not stopping or otherwise avoiding the aggressive conduct of the other, such carelessness would not rise to the criminally culpable level, even if it was a proximate cause of the accident. Such carelessness under N.J.S.A. 39:4-97 is the approximate equivalent of the criminally negligent standard set forth in N.J.S.A. 2C:2-2b(4), and is by definition insufficient to sustain a conviction for death by auto which requires recklessness. We reiterate that the judge sensed this deficiency and stated it as one of her principal grounds for granting the new trial even prior to the Supreme Court's decision in State v. Concepcion.
We have reviewed this record in detail and recognize that there will be a burden placed upon the State and witnesses by our directing separate new trials for defendants. We cannot, however, lightly disregard the assessment of the specified errors and prejudicial effect of the trial as a whole as expounded by the trial judge.
AFFIRMED.
NOTES
[1] Although the indictment shows the crime as a fourth degree offense, under L. 1984 c. 212 § 1, the offense was raised to one of the third degree. The effective date of the amendment was December 10, 1984, ten months prior to the accident. On retrial, note must be taken of the more severe classification.
[2] We recognize that the subject was relevant to test the witnesses' recollection or even to establish that the statements had not been given under the influence of alcohol. From our reading of the record, it appears that at the time they were both employees of the same alarm company, although they worked out of two different offices. They also had a separate private business interest together. Just prior to the accident they had come from a storage company where they had stored some of their business equipment, and from their statements made to the police at the scene of the accident, it appears that they were on their way to make an alarm installation on their own after each had worked a full day for their employer. Whether they were afraid of revealing a business interest inimical to their then-current employment or had engaged in some other activity that they did not wish to make public, their activities for this intervening period should have been of little concern to the court or jury.
[3] The trial judge did note that Brown's attorney had prosecuted Emm in a more vigorous manner than Emm's attorney had prosecuted Brown, but that most of the evidence had been brought out by the two on cross-examination. While the judge in her charge clearly told the jury that neither party had the burden of proof, the jury after it commenced its deliberations presented the court with a revealing question. It specifically questioned who had the burden of proof. The judge stated:
Frankly I'm not at all surprised that the jury came back with the initial question[:] is it the State's burden and do we have to consider just the State's evidence or the defendants'?
[4] At any retrial, Emm may be examined concerning the initial statements he made at the firehouse or at the scene of the accident, if such statements omitted a significant detail or were otherwise inconsistent with Emm's trial testimony. Such use of a prior inconsistent statement is much different from challenge based upon his complete silence or failure to approach the police. See People v. Conyers, 52 N.Y.2d 454, 420 N.E.2d 933, 438 N.Y.S.2d 741 (Ct. of App. 1981).
[5] On retrial, the defendants should be informed that under State v. DeLuca, supra, they may be tried by the court simultaneously with the jury trial for the included offenses of careless and reckless driving. 108 N.J. at 111. If they are convicted of the indictable offense, they may not be convicted of the lesser-included charges. If the sole evidence of recklessness is conduct proximately relating to the death, then an acquittal on the criminal charge will preclude a motor vehicle conviction by the court for reckless driving, but not careless driving. Cf. DeLuca, at 111. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260659/ | 632 F. Supp. 2d 1246 (2008)
COREY AIRPORT SERVICES, INC., Plaintiff,
v.
The CITY OF ATLANTA, et al., Defendants.
Civil Action No. 1:04-CV-3243-CAP.
United States District Court, N.D. Georgia, Atlanta Division.
September 30, 2008.
*1254 Griffin B. Bell, Jr., Fisher & Phillips, Joseph Matthew Maguire, Jr., Michael J. Bowers, Balch & Bingham, LLP, Mairen C. Kelly, Fisher & Phillips, Atlanta, GA, for Plaintiff.
John Anderson Sensing, Michael P. Kenny, Cari K. Dawson, Christopher Allen Riley, Ryan Jay Lewis, Wade Walker Pearson, Alston & Bird, LLP, Atlanta, GA, for Defendants.
ORDER
CHARLES A. PANNELL, Jr., District Judge.
This matter is now before the court on the following motions: Barbara Fouch's motion for summary judgment [Doc. No. 447]; the City of Atlanta's motion for summary judgment [Doc. No. 448]; Ben DeCosta's motion for summary judgment [Doc. No. 450]; Adam L. Smith's motion for summary judgment [Doc. No. 451]; Carolyn Chavis's motion for summary judgment [Doc. No. 453]; Kyle Mastin's motion for summary judgment [Doc. No. 457]; Hubert Owens's motion for summary judgment [Doc. No. 459]; James Riley, Michael Riley, and John McNeany's motion for summary judgment [Doc. No. 463]; Clear Channel Airports of Georgia, Inc. and Clear Channel Outdoor, Inc.'s motion for summary judgment [Doc. No. 464]; Clear Channel Airports of Georgia, Inc. and Clear Channel Outdoor, Inc.'s motion in limine to exclude evidence and testimony of plaintiff's proffered expert witness John H. Landon [Doc. No. 496]; the joint motion to exclude testimony of Brett Katzman [Doc. No. 571]; the joint motion to strike the declaration of Steve Moody [Doc. No. 575]; and Barbara Fouch's motion to strike the declaration of Steve Moody [Doc. No. 576]. In Section I, the court will outline the factual background of this case. In Section II, the court will address the motion to exclude the testimony of Brett Katzman [Doc. No. 571] and the motions to strike the declaration of Steve Moody [Doc. Nos. 575 and 576]. In Section III, the court will rule on the respective motions for summary judgment as to each count in Corey's Second Amended Complaint [Doc. No. 444]. In doing so, the court will examine the evidence and set out in specificity the facts that are relevant to the particular defendants and the claims against them. Because Landon testifies as to the relevant market and harm to competition, the court will address the motion to exclude the testimony of Landon when it rules on the motions for summary judgment as to Corey's antitrust claims.[1]
I. Factual Background
This case arises from the City of Atlanta's ("City") Request for Proposal No. FC-7430-02 for the advertising concession at Hartsfield-Jackson International Airport ("2002 RFP"). Before addressing the 2002 RFP itself, the court will first discuss the historical background leading up to the 2002 RFP.
A. Historical Background of the Airport Advertising Concession and the 2002 RFP
In 1980, the City's Hartsfield-Jackson International Airport ("Airport") opened. *1255 In that same year, James Riley (the owner of Transportation Media, Inc.) and Barbara Fouch partnered to form Transportation Media, Inc. of Georgia ("TMI of Georgia") in order to pursue the contract for the Airport advertising concession. J. Riley owned a 70% interest in TMI of Georgia, and Fouch owned a 30% interest. TMI of Georgia was awarded a 15-year no-bid contract for the Airport advertising concession ("1980 Airport Advertising Contract"). Initially, TMI of Georgia operated the Airport advertising concession as a subcontractor of Dobbs-Paschal Midfield Corp. ("DPMC").
In 1993, the City terminated DPMC's master concessionaire contract. At that time, the City Council authorized a two-year contract directly with TMI of Georgia for the Airport advertising concession based on the 1980 Airport Advertising Contract and at the rate of 50% of revenue received ("1993 Airport Advertising Contract"). In September 1995, the City Council authorized a two-year extension of the contract ("1995 Airport Advertising Contract"). During this extension, TMI of Georgia continued to pay the City rent at the rate of 50% of revenue received. The term of the 1995 Airport Advertising Contract expired in September 1997, but Clear Channel has continued to operate the Airport concession on a month-to-month basis at the 50% rental rate.
On February 17, 1998, J. Riley signed a consulting agreement, in which TMI of Georgia agreed to pay Fouch an additional $144,000 per year in consulting fees and an additional $50,000 per year bonus for "each year extension of the present airport contract, to a maximum of $250,000 for a 5 year renewal extension, said bonus to be paid concurrent with signing of the extension by the parties thereto." Ex. 13 to Plaintiff's Statement of Facts. That same year, Universal Outdoor Holdings acquired TMI of Georgia. Later that year, Clear Channel's parent corporation acquired the stock of Universal Outdoor Holdings, TMI of Georgia became a subsidiary of Clear Channel, and its name was changed to "Clear Channel Airports of Georgia, Inc." Clear Channel Airports of Georgia, Inc. does not have its own employees. Instead, the people who operate the advertising concession at the Airport on a day-to-day basis are employees of Clear Channel Outdoor, Inc. Under the terms of Clear Channel's response to the 2002 RFP, Fouch's status would change from a 30% owner of Clear Channel Airports of Georgia, Inc. to a subcontractor of Clear Channel Outdoor, Inc. with a right to 30% of the profits from Clear Channel's operation of the Airport advertising concession.
Between 1997 and 2002, after the term of the 1995 Airport Advertising Contract had expired, Clear Channel was in communication with the City regarding the status of its contract. For example, J. Riley testifies in his deposition, "There was an effort to get a contract continually." Ex. 2 to Plaintiff's Statement of Facts at 162. J. Riley also states that "some people that were working for the company were in negotiations with the airport to get us a contract, open up an RFP" and that "anything is better than a 30-day contract." Id. at 165. In addition, J. Riley testifies that Fouch "was being paid to be [at the Airport] and try to work out a plan where [Clear Channel] could have a bid." Id. at 196.
In 1997, while Angela Gittens was the General Manager of the Airport, a request for proposal for the Airport advertising concession was issued ("1997 RFP"), but the 1997 RFP was soon cancelled prior to the submission of any proposals. The 1997 RFP reduced the number of advertising display locations from approximately 300 to approximately 100. In 1998, Gittens *1256 was replaced by Ben DeCosta, who left his position with the Newark International Airport ("Newark Airport").
DeCosta had the responsibility of determining whether and when a new request for proposal for the Airport advertising concession would be issued by the City's Department of Procurement. From 1998 until 2002, no new RFP for the Airport advertising concession was issued and Clear Channel continued to pay the City rent at the 50% rate. The City and DeCosta state that the release of the new RFP was delayed due to revisions of the 1997 RFP. Kyle Mastin, the Concession Manager of the Airport, states that, when he prepared Section III of the 2002 RFP, he used the materials from the 1997 RFP and did little other than update the number of authorized locations.
B. Release of the 2002 RFP
In 2002, the City released the 2002 RFP, which is a request in accordance with the City's competitive sealed proposal method pursuant to the Procurement and Real Estate Code of the City, ง 2-1189. Parts I and II of the 2002 RFP, which are entitled "General Information" and "Instructions", were drafted by the City's Department of Procurement under the supervision of Senior Contract Analyst Carolyn Chavis. Chavis began working for the Department of Procurement in 1994 as a contracting officer assigned to the Department of Aviation. In that capacity, she provided procurement services exclusively to the City's Department of Aviation. She was the contracting officer for hundreds of procurements and was promoted to senior contracting officer in 2002. Chavis left her position in 2007.
As the contracting officer assigned to the 2002 RFP, Chavis served as the contact person for the bid proponents. In this capacity, bid proponents would contact Chavis with any questions they had regarding the 2002 RFP. For any substantive questions, bid proponents were to submit the questions in writing, and Chavis would ensure that those questions were answered and attached to the 2002 RFP as an addendum. Questions relating to Part I or Part II of the 2002 RFP were to be answered by the Department of Procurement, while responses to Part III were the responsibility of the Department of Aviation.
Part III of the 2002 RFP, which contains all of the technical provisions, was drafted by the Department of Aviation, specifically Kyle Mastin and Marlene Coleman. Mastin is the Concession Manager for the Airport and served in that capacity when the 2002 RFP was released. Section 3.4 of the 2002 RFP requires bid proponents to project their gross receipts for the first five years of the term of the contract and to commit to pay the City a monthly rental payment of not less than 60% of their gross receipts. Section 3.4 also includes Clear Channel's annual revenue for the years 1996-2001, which were as follows:
Year Revenue
1996 $5,524,980
1997 $4,925,822
1998 $5,106,848
1999 $6,257,820
2000 $9,448,465
2001 $7,113,930
Section 3.4 also provides for a Minimum Annual Guaranteed payment ("MAG") to protect the City if the contractor fails to attain its projected gross receipts. The first year's MAG is 85% of the bid proponent's projected receipts for the first year, multiplied by the bid proponent's proposed rental percentage. The second year MAG is the greater of the first year MAG or 85% of the second year gross receipts multiplied by the proposed rental payment. *1257 Each month, the successful bid proponent is required to pay the City the greater of the rental payment or one-twelfth of the MAG. The RFP specifies that the first rental/MAG payment "will begin on the 31st day after the execution of the agreement even if installation is not complete." ("31-Day MAG Provision"). Ex. 22 to Plaintiff's Statement of Facts. Thereafter, all rental/MAG payments are due monthly in advance.
The 2002 RFP does not require the incumbent concessionaire, Clear Channel, to remove its existing advertising displays in the event a new concessionaire is ultimately awarded the contract. Instead, the 2002 RFP gives Clear Channel the option of either removing the old displays itself or abandoning them for the new concessionaire to remove. If Clear Channel were to remove its existing signs, it would not be required to do so until the day before the execution of the new agreement.
The 2002 RFP requires that fabrication of new displays be approved by the City before the displays are installed, which would take approximately one month. Furthermore, all people and companies associated with the installation, maintenance, and management of the Airport advertising concession who do not already have security clearance would have to obtain that clearance before they could install and manage the new displays, which the City stated would take approximately sixty days. Corey sent written questions to the City asking whether it would consider extending Clear Channel's contract for an additional sixty days, if a new concessionaire was selected, in order to enable a new concessionaire to design and fabricate its displays and start generating revenue with which to pay the MAG or percentage-based rent after the first thirty-one days. The City would not agree to such an extension.
Section 3.2 of the 2002 RFP, as amended by Addendum 4, entitled "PROJECT DESCRIPTION", sets forth instructions to proponents concerning the scope of their proposals:
Interested proponents will be proposing to design, install, operate, maintain and manage advertising and hotel/motel courtesy phone boards at the AIRPORT at locations set forth in Exhibit A hereto.
There are approximately three hundred and twenty-seven (327) locations for advertising and three (3) hotel/motel courtesy phone boards in the AIRPORT. The total number of advertising display units included in this RFP may be increased or decreased as deemed necessary by the Aviation General Manager with all units subject to the terms and conditions specified in the related contract. The following is a list of the various locations. . . .
Ex. 22 to Plaintiff's Statement of Facts. Section 3.2 then lists the authorized locations for advertising in the Airport by terminal/concourse and the number of individual locations within each. Section 3.3, as amended by Addendum 4 and entitled "PERMITTED USE", further provides, "The successful proponent will have the non-exclusive right to install, operate, maintain and manage approximately three hundred and twenty-seven (327) advertising display units and three (3) hotel/motel courtesy phone boards in designated locations (listed in section 3.2)." Ex. 22 to Plaintiff's Statement of Facts. The number of authorized display locations is important because, if the number of locations is increased, then the concessionaire can generate additional revenue.
C. The Disadvantaged Business Enterprise Requirement and the Certification of Barbara Fouch
The City administers a Disadvantaged Business Enterprise ("DBE") program in *1258 connection with its public contracts, including the contract at issue in the 2002 RFP. Because the City accepts federal funding for the Airport, the DBE program is subject to the federal DBE rules promulgated by the U.S. Department of Transportation, which are codified at 49 C.F.R. งง 23 and 26 (2005). Under those rules, a DBE firm is one that is at least 51% owned by one or more individuals who are both socially and economically disadvantaged and whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it. 49 C.F.R. ง 26.5 (2005). Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within society because of their identities as members of certain groups and without regard to their individual qualities. 49 C.F.R. ง 26, app. E (2005). Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged. 49 C.F.R. ง 26, app. E (2005).
The City, as a recipient of federal transportation funding, must insure that the DBEs it certifies are actually owned and controlled by disadvantaged individuals by scrutinizing the relationships of the purported DBE firms with non-DBE firms in such areas as personnel, facilities, equipment, financial and bonding support, and other resources. 49 C.F.R. ง 26.71(b)(1) (2005). As part of that scrutiny, for each DBE applicant the City must: conduct an on-site visit to the applicant's offices; analyze the firm's stock ownership, bonding, and financial capacity; compile a list of equipment owned by the firm; compile a list of licenses held by key personnel within the firm; and require applicants to complete and submit a DBE application form. 49 C.F.R. ง 26.83 (2005).
Fouch, doing business as Creative Media Displays of Georgia, submitted a DBE application to the City on June 5, 2002. Fouch's DBE application and supporting materials stated that she owned 30% of Clear Channel Airports of Georgia, Inc. The DBE application and supporting materials also revealed that she owned a Beverly Hills, California-based firm called "Fouch-Roseboro & Associates" and that she owned a majority share of Creative Media Displays, Inc., a New York corporation that is a subcontractor to the Newark Airport advertising contract. Fouch's DBE application and supporting materials stated that the business for which she sought DBE certification, Creative Media Displays of Georgia, owned no business equipment and had executed a sublease with its non-DBE partner, Clear Channel, the month before filing its DBE application.
Owens is the Director of the City's Office of Contract Compliance ("OCC") and served in that capacity when Fouch submitted her DBE application, and he oversaw and gave final approval of Fouch's DBE application. It is uncontested that Owens and his office made mistakes in the DBE certification process. For example, neither Owens nor anyone else in his office conducted the required site visits for any of the DBEs that were certified in connection with the 2002 RFP, but Owens and his office did not conduct any site visits for any DBE applicants in connection with any City contracts prior to 2003. There is also evidence, however, that Owens and his office more throughly examined the DBE application of Maureen Malone, doing business as Sydney Baxter & Co., who partnered with Corey for the 2002 RFP.
*1259 The City set a DBE participation goal of at least 29% for the Airport advertising concession, which required that each bid proponent make a good faith effort to have DBEs perform at least 29% of the contract. All three bid proponents received the full 15 point allocation for satisfying the City's DBE goal.
D. The 2002 RFP Process: Selection of Clear Channel as Highest-Ranked Proponent and Corey's Protest
During the 2002 RFP process, the City received and responded to multiple questions from potential and actual proponents. As the contact person, Chavis was responsible for ensuring that these questions were directed to the correct department, answered, and then attached to the 2002 RFP as an addendum. Corey submitted more than 31 questions to the City in letters dated May 7, 2002, and May 8, 2002, all of which were answered by the City. Corey submitted four additional questions to the City in a letter dated July 15, 2002, and those questions were never answered. In addition, Chavis responded to questions in writing from Clear Channel and JCDecaux North America (a company that ultimately did not submit a proposal). There is also evidence that Chavis responded verbally to two non-substantive questions from Clear Channel and also sent a fax to Fouch.
Ultimately, three companies submitted proposals in response to the 2002 RFP: Creative Airport Advertising, Corey, and Clear Channel. In its bid, Corey offered to pay 72.1% of its gross receipts to the city. Clear Channel offered to pay 61.1% of its gross receipts. In addition, Clear Channel and Corey made the following five-year revenue projections:
Corey Clear Channel
Year 1 $ 9,273,636 $10,109,777
Year 2 $10,201,000 $12,471,244
Year 3 $11,221,100 $14,766,931
Year 4 $12,343,210 $16,831,970
Year 5 $13,577,530 $20,206,766
John McNeany prepared the pro forma that contained Clear Channel's revenue projections and that was included with Clear Channel's proposal. Based on these numbers, Corey's MAG for the first year would have been 85% of $9,273,635 multiplied by its proposed 72.1% rental rate, which would have amounted to $5,683,347.83. Clear Channel's MAG for the first year would have been 85% of $10,109,777 multiplied by 61.1%, which would have amounted to $5,250,513.
Though the 2002 RFP states that the successful proponent would have the right to manage approximately 327 display locations, there is evidence that Clear Channel did not limit its proposal to that number of locations and based its revenue projections on the assumption that there would be significantly more than 327 advertising displays. For example, Michael Riley (who is J. Riley's son and the President of Clear Channel Airports, a division of Clear Channel) testifies in his deposition that Clear Channel identified "a lot of additional locations" for its proposal and that those locations were "certainly not limited to" the locations authorized in the 2002 RFP. Ex. 39 to Plaintiff's Statement of Facts at 110. Clear Channel's proposal, however, indicates that its proposal was based on 334 displays, an increase of only seven additional locations. Ex. 39 to Plaintiff's Statement of Facts at 110. In addition, J. Riley has testifies that Clear Channel based its response to the 2002 RFP "on a large number of new signs." Ex. 2 to Plaintiff's Statement of Facts at 173.
The City's proposal evaluation team, which consisted of Mastin, Coleman, Charles Ewing, and Paul Meyer, evaluated *1260 and scored each of the proposals on a 100-point scale in the following categories:
Categories Points
General and Specialized Experience 10
Past Performance and Experience 10
Performance Capabilities 10
Business Plan 10
Fee (MAG and Percentage Rent Proposed) 35
Financial Condition 10
Disadvantaged Business Enterprise 15
Ability to Comply with Applicable Laws Pass/Fail
Ability to Comply with Constr. Schedule Pass/Fail
The City's proposal evaluation team ultimately scored the proposals as follows:
Offeror Points
Clear Channel 82.55
Corey 79.18
Creative Airport Advertising 72.05
Felicia Strong Whitaker of the Department of Procurement then sent a letter dated May 8, 2002, to Clear Channel that informed Clear Channel that it "had been selected as the top ranked proponent." Ex. 46 to the Plaintiff's Statement of Facts.
On November 14, 2002, Corey filed a protest of the City's recommendation and selection of Clear Channel as the highest-ranked (and therefore most responsible and responsive) bid proponent. On November 14, 2002, the City and Clear Channel held negotiations regarding the final terms of the contract for the Airport advertising concession. The City was represented by Kyle Mastin and Toni Darden, and Clear Channel was represented by J. Riley, M. Riley, and McNeany. DeCosta was the City representative responsible for the presentation of the recommendation of Clear Channel to the City Council and for the presentation of legislation approving the final contract with Clear Channel, the terms of which had been finalized during the November 14, 2002, negotiations. DeCosta did not immediately present the contract and legislation to the City Council for approval. DeCosta claims that he did not submit the recommendation and legislation to the City Council because of Corey's protest.
Adam Smith took office as the city's Chief Procurement Officer in January 2003. Smith was aware of the allegations that Corey made in its bid protest. Smith believed that he had the authority to investigate Corey's allegations and rebid the contract, but he did neither of these. According to Smith, he did not conduct an independent investigation or cancel the 2002 RFP and rebid the contract because the procurement took place prior to his employment with the City and because of the protest and litigation regarding the 2002 RFP. There is a letter, however, that states that the Department of Procurement had reviewed the 2002 RFP and "concluded that the City did not follow the established procurement process in such a manner as to serve the best interests of the City." Ex. 56 to Plaintiff's Statement of Facts. The letter further states that the City had decided to cancel the 2002 RFP, reject all of the proposals, and issue a new RFP. The letter indicates that it was sent from Smith to M. Riley, with copies sent to DeCosta and Owens (as well as others). The letter, however, does not have Smith's handwritten signature, and Smith denies knowledge of the letter.
E. The 2002 RFP Process: Reopening of Negotiations
On November 1, 2004, approximately two years after the November 14, 2002, negotiations between Clear Channel and the City, DeCosta submitted the recommendation of Clear Channel as most responsible and responsive bid proponent and the legislation necessary to approve *1261 the contract with Clear Channel. On November 4, 2004, Corey filed the instant lawsuit [Doc. No. 1]. According to DeCosta and the City, the City Council withheld approving the contract pending the outcome of the protest and litigation. Clear Channel continued to pay the 50% rental rate on a month-to-month basis.
Early in 2005, Mastin called McNeany and told him that DeCosta wanted Clear Channel to start paying the percentage rate that Clear Channel had proposed in its response to the 2002 RFP, which was 61.1% of the advertising revenue. Also early in 2005, DeCosta and J. Riley had a phone conversation regarding the rate Clear Channel was paying, and, according to DeCosta, J. Riley and DeCosta reached a verbal agreement that Clear Channel would start paying the 61.1% rate beginning retroactively on January 1, 2005.
Sometime in 2006, DeCosta learned that Clear Channel had not been paying the increased rental rate. DeCosta then contacted Clear Channel to explain that he expected Clear Channel to pay the increased rental rate in accordance with the verbal agreement that he had with J. Riley. DeCosta also told Clear Channel that it should pay interest on the amount past due at the rate specified in the 1995 Airport Advertising Contract. DeCosta contacted either J. Riley or Fouch and communicated that, if Clear Channel did not honor the agreement that DeCosta had reached with J. Riley, then the City would rebid the contract. Ex. 8 to Plaintiff's Statement of Facts at 246.
At some point, DeCosta increased his demand from 61.1% to 61.2%. In response, Sam Hart of Clear Channel sent a letter to Mastin, dated May 3, 2006, telling him that Clear Channel would agree to pay the 61.2% rate "retroactive to twelve (12) calendar months from the effective date of the new Concessions Operating Agreement" in exchange for, among other things, the City agreeing to authorize an increase in the number of display locations. Ex. 61 to Plaintiff's Statement of Facts. In that letter, Hart went on to state that, since Clear Channel would not be able to "retroactively recover the aforementioned twelve months of missed sales opportunities on existing inventory, the revenues we are able to generate on these new display locations will help us offset the impact of the retroactive payment on our current fiscal year." Id.
DeCosta continued to negotiate with Clear Channel and Fouch throughout 2006, and, at some point, Clear Channel agreed to the increased rental rate and a lump sum payment of back rent. On November 30, 2006, Fouch sent an email to M. Riley stating that the City expected to receive the check by December 4, 2006. Fouch went on to state that she had "met with Ben [DeCosta] and a determination of `where we all go from here' is, hopefully secured." Ex. 63 to Plaintiff's Statement of Facts.
On December 4, 2006, Clear Channel sent a check to the City in the amount of $1,739,659.00. Fouch conveyed the check and an accompanying letter to DeCosta. The reference line of the check indicates that it was payment for back rent. In the letter, M. Riley stated, "In consideration for the new display advertising locations at the Airport, [Clear Channel] will pay the Airport a one-time upfront payment of $1,739,659.00, which is enclosed herewith." Ex. 64 to Plaintiff's Statement of Facts. In addition, Clear Channel agreed to pay the 61.2% rental rate beginning as of November 1, 2006. On March 7, 2007, Clear Channel sent a second check for $100,000.00 in order to cover back rent for the months of October and November 2006. Clear Channel is the current Airport advertising concessionaire.
*1262 II. Motion to Exclude Testimony of Brett Katzman, Ph.D. [Doc. No. 571] and Motion to Strike Declaration of Steve Moody [Doc. No. 575]
The defendants have filed a joint motion to exclude the testimony of Brett Katzman [Doc. No. 571] and a joint motion to strike the declaration of Steve Moody [Doc. No. 575]. The court notes that Fouch did not originally join in the motion to strike the declaration of Moody, but she subsequently filed a motion entitled, "Motion to Strike the Declaration of Steve Moody" [Doc. No. 576], which, rather than being a separate motion to strike, indicated merely that she wanted to adopt and join in the other defendants' motion [Doc. No. 575]. Accordingly, the court holds that Fouch has joined in the other defendants' motion to strike [Doc. No. 575], and the court will rule on that motion on its merits. The court therefore dismisses as moot Fouch's separate motion [Doc. No. 576].
A. Motion to Exclude Testimony of Brett Katzman [Doc. No. 571].
In support of its claims, Corey seeks to present the testimony of Professor Brett E. Katzman, Ph.D., who is an Associate Professor of Economics in the Coles College of Business, Kennesaw State University. According to Corey, Katzman is an expert in competitive bidding. Though the Procurement and Real Estate Code of the City distinguishes between competitive sealed bids and competitive sealed proposals, it is clear that requests for proposals in general and the 2002 RFP in particular involve competitive bidding by the proponents. The defendants contend, however, that Katzman is not qualified to give expert testimony on the particular facts at issue in this case. Moreover, the defendants argue that Katzman's opinions are not sufficiently reliable to meet the standards of admissibility set forth in Rule 702 of the Federal Rules of Evidence and by the United States Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993). Furthermore, the defendants contend that Katzman's opinions are not the proper subject of expert testimony because Katzman cannot testify about the subjective intent of the defendants, the opinions relate to matters within the common understanding of lay persons, and the opinions include inadmissible legal conclusions and lawyer arguments. Finally, the defendants claim that Katzman's declaration, which was submitted with Corey's responses to the defendants' motions for summary judgment, contains new opinions that were not previously disclosed in his prior reports and are therefore untimely pursuant to the court's amended scheduling order [Doc. No. 251].
"If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case." Fed.R.Evid. 702; see also Daubert, 509 U.S. at 585-97, 113 S. Ct. 2786. Determinations regarding the admissibility of such testimony are controlled by Rule 702, as explained by the Supreme Court in Daubert and its progeny. City of Tuscaloosa v. Harcros Chemicals, Inc., 158 F.3d 548, 562 (11th Cir.1998).
The district court is obligated to act as a gatekeeper to the admission of expert testimony by ensuring that it "both rests on a reliable foundation and is relevant to the task at hand." Daubert, 509 *1263 U.S. at 597, 113 S. Ct. 2786. The objective of the gatekeeping "requirement is to ensure the reliability and relevancy of expert testimony" by making "certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field." Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152, 119 S. Ct. 1167, 143 L. Ed. 2d 238 (1999). In its gatekeeper role, the district court must engage in a three-part inquiry to determine the admissibility of expert testimony. Tuscaloosa, 158 F.3d at 562. Specifically, the court considers whether: "(1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue." Id. at 562; see also Quiet Technology DC-8, Inc. v. Hurel-Dubois UK Ltd., 326 F.3d 1333, 1340-41 (11th Cir. 2003). The proponent of expert testimony bears the burden of demonstrating that the expert and his or her testimony meets this tripartite standard. McDowell v. Brown, 392 F.3d 1283, 1298 (11th Cir. 2004). This same standard applies to all expert testimony, including testimony regarding scientific, technical, and other specialized matters. Kumho Tire, 526 U.S. at 147, 119 S. Ct. 1167.
Based on the factors set forth in Daubert, the Eleventh Circuit has held, "In ascertaining the reliability of a particular scientific expert opinion, we consider, to the extent possible: (1) whether the expert's theory can be and has been tested; (2) whether the theory has been subjected to peer review and publication; (3) the known or potential rate of error of the particular scientific technique; and (4) whether the technique is generally accepted in the scientific community." Quiet Technology, 326 F.3d at 1341 (citing McCorvey v. Baxter Healthcare Corp. 298 F.3d 1253, 1256 (11th Cir.2002) and Daubert, 509 U.S. at 593-94, 113 S. Ct. 2786) (emphasis added). The Supreme Court, however, has cautioned, "Those factors identified in Daubert may or may not be pertinent in assessing reliability, depending on the nature of the issue, the expert's particular expertise, and the subject of his testimony." Kumho, 526 U.S. at 151, 119 S. Ct. 1167. The Supreme Court has also noted that, in some cases, "the relevant reliability concerns may focus upon personal knowledge or experience." Id. at 150, 119 S. Ct. 1167.
"In the end, although `rulings on admissibility under Daubert inherently require the trial court to conduct an exacting analysis of the proffered expert's methodology,' it is not the role of the district court to make ultimate conclusions as to the persuasiveness of the proffered evidence." Quiet Technology, 326 F.3d at 1341 (quoting McCorvey, 298 F.3d at 1256). "A district court's gatekeeper role under Daubert `is not intended to supplant the adversary system or the role of the jury.'" Maiz v. Virani, 253 F.3d 641, 666 (11th Cir.2001) (quoting Allison v. McGhan 184 F.3d 1300, 1311 (11th Cir. 1999)). Instead, as the Supreme Court has stated, "vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence." Daubert, 509 U.S. at 596, 113 S. Ct. 2786.
1. Whether the Expert is Qualified
As the court noted previously, Katzman is an Associate Professor of Economics *1264 in the Coles College of Business, Kennesaw State University. He has held similar positions at the University of Miami and Mercer University. Katzman received his doctorate in 1996 based on course work that included classes on auctions, procurements, and competitive bidding, as well as his dissertation, entitled A Theoretical and Empirical Analysis of Multi-Unit Auctions with Multi-Unit Demands. Since receiving his Ph.D., Katzman has taught courses in Industrial Organization, Economics of Strategy, Game Theory, Theoretical Microeconomics, and Managerial Economics at the undergraduate, Masters, and Ph.D. levels. Katzman states that all of these courses have contained some element of competitive bidding, including process design, bidding strategy, or empirical analysis of results.
Katzman has written research papers on competitive bidding encompassing both auctions and procurement settings, several of which have been published in highly regarded economics journals such as The Journal of Economic Theory and Economic Theory. These papers have usually focused on three areas: (1) process design; (2) bidding strategies; or (3) empirical analysis of bidding results. In addition, Katzman has served as a referee of manuscripts on competitive bidding for various journals, including The American Economic Review, The Journal of Economic Theory, the RAND Journal of Economics, and the Review of Economics and Statistics.
The defendants do not contest Katzman's particular academic credentials. Instead, they argue that Katzman is not qualified to testify as an expert in this case because he has no independent education, training, or experience in municipal RFPs and procurements or, more specifically, airport concession RFPs and procurements. The defendants further argue that Katzman is not qualified because his testimony was prepared solely for litigation. Corey, however, argues that Katzman's extensive expertise in competitive bidding in general qualifies him to testify and that Katzman's expertise was not prepared solely for this litigation. The court agrees with Corey.
Even though he has not specialized in airport concession RFPs or municipal RFPs, Katzman has an extensive background in competitive bidding, including his education, research, teaching, and publications, which has provided him with specialized knowledge that the average person does not possess. Furthermore, though he prepared in part for his testimony in this case by reviewing various airport-related RFPs and other evidence in this case, Katzman has an extensive background in competitive bidding, which he has developed through years of study and research that predate this litigation. Though this case involves a request for proposal rather than an invitation for bid, there is no question that the 2002 RFP had competitive bidding characteristics. Thus, the court finds Katzman to be qualified to render an opinion in this case based on his expertise in competitive bidding.
2. Whether the Expert has Employed a Sufficiently Reliable Methodology
Though the court must focus on the methodology of the proffered expert, "conclusions and methodology are not entirely distinct from one another." General Electric Co. v. Joiner, 522 U.S. 136, 146, 118 S. Ct. 512, 139 L. Ed. 2d 508 (1997). In addition, as the Supreme Court has stated, "Trained experts commonly extrapolate from existing data." Id. The Supreme Court, however, has emphasized, "Nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing *1265 data only by the ipse dixit of the expert. A court may conclude that there is simply too great an analytical gap between the data and the opinion proffered." Id.
The defendants argue that "Katzman's methodology is no methodology at all" and that Katzman's reliance on his expertise and training with regard to competitive bidding is not reliable because such "self-proclaimed expertise is not a substitute for proof of a reliable methodology." Defendants' Brief at 20 [Doc. No. 571]. Though the defendants are correct that experience alone does not guarantee reliability, the court disagrees with the defendants' assessment of Katzman's testimony.
In reviewing Katzman's testimony, the court finds that Katzman has sufficiently connected his extensive experience and expertise to his testimony and has sufficiently explained his methodology in reviewing the 2002 RFP. Essentially, Katzman has reviewed the 2002 RFP and other evidence in this case and applied his education and expertise in competitive bidding to that evidence. As the court has already noted, the list of factors enumerated in Daubert for evaluating the methodology employed by an expert witness is not always relevant to evaluating the reliability of expert testimony. On the facts of this case, the court holds that most of these factors are inapplicable, but the court notes that Katzman has published articles in peer-reviewed journals on the topic of competitive bidding, served as a referee of manuscripts on competitive bidding, and taught courses involving the topic of competitive bidding. In this case, the most relevant reliability concerns are the personal knowledge, education, and experience of Katzman, and Corey has demonstrated that Katzman has an extensive academic background in competitive bidding.
Furthermore, the court is satisfied that Katzman has not relied on mere speculation in giving his opinions. Instead, Katzman goes into detail in explaining how he reached his conclusions, and the trier of fact can evaluate Katzman's reasoning and how he reached his conclusions. The defendants obviously object to Katzman's opinions, but the court holds that these objections go to the weight and not the admissibility of Katzman's testimony. The defendants will have their opportunity to cross-examine Katzman and call into question his testimony. But it is not the court's role to rule on the persuasiveness of the proffered testimony. Although Katzman's methodology may not be susceptible to testing, the court finds that, in this case, Katzman's expertise, experience, and education and his application of general economic principles to the facts of this case are sufficient for establishing that he has employed a reliable methodology in analyzing the 2002 RFP and its implementation.
3. Whether the Expert Testimony Will Assist the Trier of Fact
The defendants advance four arguments in support of their claim that Katzman's testimony will not assist the trier of fact. First, the defendants argue that Katzman testifies to the intent and motivation of some of the defendants and expert testimony is not admissible on the issue of the parties' intent. The court notes that the defendants do not cite any Eleventh Circuit authority in support of their argument. It is true that, in a criminal case, an expert cannot "state an opinion or inference as to whether the defendant did or did not have the mental state or condition constituting an element of the crime charged or of a defense thereto." Fed. R.Evid. 704(b). But, at least with regard to civil cases, the Eleventh Circuit has held, "An expert may testify as to his *1266 opinion on an ultimate issue of fact." Montgomery v. Aetna Casualty & Surety Co., 898 F.2d 1537, 1541 (11th Cir.1990).
The court has reviewed the relevant portions of Katzman's testimony and finds that, in this case, Katzman's testimony will assist the trier of fact in determining whether the 2002 RFP process was biased in favor of the incumbent Clear Channel and to the detriment of all non-incumbent bid proponents, including Corey. Katzman is an expert in competitive bidding, and he has reviewed the 2002 RFP and other evidence in this case. Katzman can assist the trier of fact by explaining, for example, the terms of the 2002 RFP, how the solicitation process was implemented, whether such implementation was biased, and the basis of his opinion that the terms of the 2002 RFP were biased in favor of the incumbent Clear Channel. If the trier of fact believes such testimony, then the trier of fact could infer that the terms of the 2002 RFP and the administration of the RFP process demonstrate that the City defendants intentionally discriminated against Corey.
Second, the defendants argue that Katzman's opinions concern matters within the common understanding of the lay person. Though some of Katzman's testimony might fall within the understanding of the lay witness, much of it goes beyond such understanding, in that, Katzman is applying his expertise in competitive bidding to the terms of the 2002 RFP and the facts giving rise to this case. The average lay person has very little experience with RFPs, how they are administered, and competitive bidding in general. Thus, Katzman's expertise goes beyond the understanding of the average lay person and may assist the trier of fact in understanding certain issues in this case.
Third, the defendants argue that Katzman's opinions constitute inadmissible legal conclusions. In support of this argument, the defendants cite Montgomery, in which the Eleventh Circuit held, "A witness also may not testify to the legal implications of conduct; the court must be the jury's only source of law." Montgomery, 898 F.2d 1537 at 1541. On this issue, the court agrees with the defendants. Katzman may not give his opinion as to the legal implications of the defendants' conduct. But Katzman may give his opinions to things such as whether the terms of the 2002 RFP were biased, whether the scoring of the proposals was manipulated, whether the conduct of the defendants favored the incumbent Clear Channel to the disadvantage of non-incumbent proponents such as Corey. Accordingly, the court grants the defendant's motion as to those portions of Katzman's declaration that constitute inadmissible legal conclusions, and, in ruling on the motions for summary judgment, the court will not rely upon that testimony.
Fourth, the defendants argue that Katzman's opinions constitute inadmissible argument. The court has reviewed the portions of Katzman's declaration to which the defendants object, and the court finds that the relevant testimony does not constitute inadmissible argument. To the contrary, the testimony at issue may assist the trier of fact in determining an ultimate issue of fact in this case, i.e., whether the defendants intentionally discriminated against Corey. For example, the defendants object to Katzman's conclusion "that the 2002 Atlanta advertising RFP, as written and implemented, was intentionally biased in favor of the Incumbent to the prejudice and exclusion of Corey and all other Proponents." Katzman Declaration ถ 95 [Doc. No. 557]. Katzman, however, explains why he reaches this conclusion, and, if the trier of fact believes Katzman, then the trier of fact may infer that the City defendants *1267 intentionally discriminated against Corey. Accordingly, the court holds that Katzman's testimony may assist the trier of fact in determining an ultimate issue of fact in this case and is therefore admissible.
Finally, the defendants argue that Katzman's declaration should be excluded because it contains new opinions that were not timely disclosed pursuant to the court's scheduling order. The court has reviewed the portions of the declaration of Katzman to which the defendants object and finds that either: (1) the information and opinions to which those paragraphs pertain has been disclosed by Corey prior to the May 25, 2008, deadline or (2) the failure of the disclosure is harmless since the defendants had access to Katzman's expert report, rebuttal report, and the information Katzman used as the basis for his opinions. The portions of the declaration to which the defendants object are merely more detailed explanations of the testimony that Katzman has given previously. Accordingly, the court grants in part and denies in part the defendants' motion to exclude the testimony of Brett Katzman. In ruling on the motions for summary judgment, the court will not rely upon any legal conclusions that may be contained in Katzman's testimony.
B. Joint Motion to Strike the Declaration of Steve Moody [Doc. No. 575].
As an initial matter, the court notes that the defendants have styled their motion to exclude the testimony of Moody as a motion to strike. Several district courts in the Eleventh Circuit have held that a motion to strike is not the proper method for challenging the admissibility of evidence in an affidavit. See, e.g., Lentz v. Hospitality Staffing Solutions, LLC, No. 1:06-cv-1893-WSD, 2008 WL 269607 at *9 (N.D.Ga. Jan.28, 2008) (noting that Federal Rule of Civil Procedure 12(f) permits the court to strike a pleading, not an affidavit attached to a motion for summary judgment); see also Jordan v. Cobb County, Ga., 227 F. Supp. 2d 1322, 1346-47 (N.D.Ga.2001); Morgan v. Sears, Roebuck and Co., 700 F. Supp. 1574, 1576 (N.D.Ga. 1988). The court in Lentz concluded, "The proper method to challenge such an affidavit is to challenge the admissibility of the evidence contained in the affidavit." 2008 WL 269607 at *9; see also Pinkerton & Laws Co. v. Roadway Express, Inc., 650 F. Supp. 1138, 1141 (N.D.Ga.1986) (concluding that a party should file a notice of objection rather than a motion to strike to challenge the admissibility of evidence in an affidavit).
On the other hand, the Eleventh Circuit has held that a district court's granting of a motion to strike an affidavit is reviewed for abuse of discretion. Reese v. Herbert, 527 F.3d 1253, 1263 (11th Cir.2008). In Reese, the court ultimately affirmed the district court's order, but the Eleventh Circuit specifically held, "We find no abuse of discretion in the district court's decision to exclude Keller's affidavit." Id. at 1265 (emphasis added). The Eleventh Circuit has also denied a motion to strike declarations on the grounds that "it is in the interests of justice and efficiency to consider the supplemental declarations" and without considering whether a motion to strike a declaration was procedurally improper. Ouachita Watch League v. Jacobs, 463 F.3d 1163, 1171 (11th Cir.2006). In addition, Federal Rule of Evidence 103 states that it is error to admit evidence only if "a substantial right of the party is affected" and "a timely objection or motion to strike appears of record, stating the specific ground of objection, if the specific ground was not apparent from the context" (emphasis added). Thus, Rule 103 implicitly recognizes that a motion to *1268 strike evidence is procedurally proper. Regardless, the court will construe the defendants' motion to strike as a motion in limine to exclude the challenged testimony of Moody.
In the briefing of their motion, the defendants point out that they seek to exclude paragraphs 8, 12-16, 20-21, and 23 of Moody's declaration on the grounds that those paragraphs are expert testimony, yet Corey did not disclose Moody as an expert witness and he did not disclose an expert report. In response, Corey argues that the relevant paragraphs are either not opinion testimony or constitute admissible lay opinion testimony.
Federal Rule of Civil Procedure 26(a)(2)(A) requires that a party must disclose the identity of any expert witnesses that the party may use at trial pursuant to Federal Rule of Evidence 702, 703, or 705. Federal Rule of Civil Procedure (26)(a)(2)(B) further requires the disclosure must be accompanied by a written report that includes certain information related to the qualifications and background of the witness and the testimony itself. In addition to the requirements of the Federal Rules of Civil Procedure, the local rules of this court state:
Any party who desires to use the testimony of an expert witness shall designate the expert sufficiently early in the discovery period to permit the opposing party the opportunity to depose the expert and, if desired, to name its own expert witness sufficiently in advance of the close of discovery so that a similar discovery deposition of the second expert might also be conducted prior to the close of discovery.
L.R. 26.2C. If a party fails to comply with this provision of the local rules, then the party shall not be allowed to offer the testimony of the expert witness. L.R. 26.2C. In this case, it is undisputed that Corey did not designate Moody as an expert witness. Therefore, to the extent that the relevant portions of Moody's declaration constitute expert testimony, the court will exclude that testimony.
Federal Rule of Evidence 701 states, "If the witness is not testifying as an expert, the witness' testimony in the form of opinions or inferences is limited to those opinions or inferences which are (a) rationally based on the perception of the witness, (b) helpful to a clear understanding of the witness' testimony or the determination of a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702." Interpreting Federal Rule of Evidence 701(c), the Eleventh Circuit has held lay witness opinion testimony based upon the witness's "particularized knowledge garnered from years of experience within the field" and not based upon "specialized knowledge that is subject to Federal Rule of Evidence 702" is admissible. Tampa Bay Shipbuilding & Repair Co. v. Cedar Shipping Co., Ltd., 320 F.3d 1213, 1223 (11th Cir.2003) (emphasis added). "[T]he ability to answer hypothetical questions is `[t] he essential difference' between expert and lay witnesses." United States v. Henderson, 409 F.3d 1293, 1300 (11th Cir. 2005) (quoting Asplundh Manufacturing Division v. Benton Harbor Engineering, 57 F.3d 1190, 1202 n. 16 (3d Cir.1995)).
The court finds that some of the relevant testimony is inadmissible expert testimony, in particular, paragraph 14, in which Moody states, "No airport advertising professional could have legitimately projected such revenues [$74,386,688 over a five-year period] under the terms of the 2002 Atlanta RFP Request for Proposal, which limited Proponents to 327 locations." Moody Declaration at ถ 14 [Doc. No. 575-2]. This testimony is not an inference based on his particularized knowledge. Instead, as he *1269 notes in the beginning of paragraph 14, Moody's opinion is based on his specialized knowledge as "an airport advertising professional." Id. This testimony is essentially an answer to a hypothetical question, such as, "Could an airport professional legitimately make a revenue projection such as the one that Clear Channel made under the terms of the 2002 RFP, which limited proponents to basing their projection on approximately 327 advertising locations?" As such, this testimony is governed by Rule 702. Accordingly, the court finds that this testimony is expert testimony and must be excluded since Corey did not disclose Moody as an expert witness.
Other testimony in Moody's declaration, however, is not expert testimony. For example, in paragraph 13, Moody states that he examined the Pro Forma that Clear Channel submitted to the City and that the Pro Forma contains Clear Channel's projected revenue and expenses for the first five years of the proposed contract. The defendants argue that Moody's testimony should be excluded because it is based on a forensic examination of the files in preparation for litigation. The court disagrees. Moody played an integral role throughout Corey's preparation and presentation of its RFP, and he can give testimony related to his role and his knowledge of the facts of the case, including testimony based on his review of documents during the course of litigation. Thus, the court holds that paragraph 13 is admissible testimony.
For the reasons stated above, the court grants in part and denies in part the defendants' joint motion to strike the declaration of Moody [Doc. No. 575]. In ruling on the motions for summary judgment, the court will not rely upon the testimony of Moody that constitutes prohibited expert testimony.
III. The Motions for Summary Judgment
Each of the defendants has moved for summary judgment as to all counts against them. Rule 56(c) of the Federal Rules of Civil Procedure authorizes summary judgment when all "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." The party seeking summary judgment bears the burden of demonstrating that no dispute as to any material fact exists. Adickes v. S.H. Kress & Co., 398 U.S. 144, 156, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970); Johnson v. Clifton, 74 F.3d 1087, 1090 (11th Cir.1996). The moving party's burden is discharged merely by "`showing'โ that is, pointing out to the district courtโ that there is an absence of evidence to support [an essential element of] the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). In determining whether the moving party has met this burden, the district court must view the evidence and all factual inferences in the light most favorable to the party opposing the motion. Clifton, 74 F.3d at 1090. Once the moving party has adequately supported its motion, the nonmovant then has the burden of showing that summary judgment is improper by coming forward with specific facts showing a genuine dispute. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986).
In deciding a motion for summary judgment, it is not the court's function to decide issues of material fact but to decide only whether there is such an issue to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The applicable substantive *1270 law will identify those facts that are material. Id., 477 U.S. at 247, 106 S. Ct. 2505. Facts that in good faith are disputed, but which do not resolve or affect the outcome of the case, will not preclude the entry of summary judgment as those facts are not material. Id.
Genuine disputes are those by which the evidence is such that a reasonable jury could return a verdict for the nonmovant. Id. In order for factual issues to be "genuine" they must have a real basis in the record. Matsushita, 475 U.S. at 586, 106 S. Ct. 1348. When the record as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial." Id. (citations omitted).
Corey's Second Amended Complaint [Doc. No. 444] contains five counts in it. In Count I, Corey alleges that the City defendants deprived it of its constitutional right to equal protection. In Count II, Corey alleges that all of the defendants conspired to violate its constitutional right to equal protection. In Count III, Corey seeks attorney fees from all defendants pursuant to 42 U.S.C. ง 1988(b) due to their alleged violation of its constitutional right. In Count IV, Corey brings a claim against the private defendants on the grounds that they conspired to restrain trade and conspired to monopolize. Finally, in Count V, Corey brings a monopolization and attempted monopolization claim against the private defendants.
A. Count I: Violation of Right to Equal Protection
The City defendants have all moved for summary judgment as to Corey's claim brought pursuant to 42 U.S.C. ง 1983 and set forth in Count I of the complaint. "By its terms, section 1983 provides a cause of action for `person[s] within the jurisdiction' who have been `depriv[ed] of any rights, privileges, or immunities secured by the Constitution and laws' by a person acting `under color of statute, ordinance, regulation, custom, or usage, of any State." Primera Iglesia Bautista Hispana of Boca Raton, Inc. v. Broward County, 450 F.3d 1295, 1305 (11th Cir.2006) (quoting 42 U.S.C. ง 1983). The Eleventh Circuit has held that corporations are persons within the meaning of Section 1983 and have standing to bring claims under Section 1983. Id. In addition, municipalities are persons within the meaning of Section 1983, such that they may be liable under Section 1983. Pattee v. Georgia Ports Authority, 477 F. Supp. 2d 1253, 1260 (S.D.Ga.2006) (citing Monell v. N.Y. City Department of Social Services, 436 U.S. 658, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978)).
"Section 1983 alone creates no substantive rights; rather it provides a remedy for deprivations of rights established elsewhere in the Constitution or federal laws." Barfield v. Brierton, 883 F.2d 923, 934 (11th Cir.1989). Thus, in order to sustain a Section 1983 claim, a plaintiff "must establish two elements: (1) that [it] suffered a deprivation of `rights privileges or immunities secured by the Constitution and laws' of the United States, and (2) that the act or omission causing the deprivation was committed by a person acting under color of law." Wideman v. Shallowford Community Hospital, Inc., 826 F.2d 1030, 1032 (11th Cir.1987) (quoting Dollar v. Haralson County, 704 F.2d 1540, 1542-43 (11th Cir.1983)). In this case, Corey alleges that the City defendants have deprived it of its rights under the Fourteenth Amendment's Equal Protection Clause.
"Equal protection claims are not limited to individuals discriminated against based on their membership in a vulnerable class." Campbell v. Rainbow City, Alabama, 434 F.3d 1306, 1313 (11th *1271 Cir.2006). Instead, "the Equal Protection Clause requires government entities to treat similarly situated people alike." Id. The Eleventh Circuit has stated that equal protection claims can be divided into three general categories: (1) claims that a statute discriminates on its face, (2) claims that the neutral application of a facially neutral statute has a disparate impact, and (3) claims that a facially neutral statute is being unequally administered. E & T Realty v. Strickland, 830 F.2d 1107, 1112 n. 5 (11th Cir.1987). In the case at hand, the relevant DBE regulations are not facially neutral since they seek to favor specifically certain groups who qualify as DBEs and those who work with DBEs. But Corey does not bring its claims on this basis. Instead, though Corey's complaint and briefs are not models of clarity on this point, Corey claims that the City defendants unequally applied the facially neutral Procurement and Real Estate Code of the City (and the facially neutral terms of the 2002 RFP) by unequally administering the 2002 RFP process in favor of Clear Channel.
"In order to prevail on an equal protection claim based upon the application of a facially neutral statute, it must be establish[ed] that: (1) the plaintiff was treated differently than similarly situated persons; and (2) the defendant unequally applied the facially neutral statute for the purpose of discriminating against the plaintiff." Strickland v. Alderman, 74 F.3d 260, 264 (11th Cir.1996). "`Discriminatory purpose' . . . implies more than intent as volition or intent as awareness of consequences. It implies that the decision-maker. . . selected or reaffirmed a particular course of action at least in part `because of,' not merely `in spite of,' its adverse effects upon an identifiable group." Personnel Administrator of Massachusetts v. Feeney, 442 U.S. 256, 279, 99 S. Ct. 2282, 60 L. Ed. 2d 870 (1979); see also E & T Realty, 830 F.2d at 1113. "Purposeful discrimination can be shown by circumstantial evidence. For example, purposeful discrimination can be indirectly proven by a `stark' pattern of adverse impact on a particular group." E & T Realty, 830 F.2d at 1113 n. 9. As the Supreme Court has stated:
Proof of discriminatory intent must necessarily usually rely on objective factors, several of which were outlined in Arlington Heights v. Metropolitan Housing Dev. Corp., [429 U.S. 252, 266, 97 S. Ct. 555, 50 L. Ed. 2d 450 (1977)]. The inquiry is practical. What a legislature or any official entity is "up to" may be plain from the results its actions achieve, or the results they avoid. Often it is made clear from what has been called, in a different context, "the give and take of the situation."
Feeney, 442 U.S. at 279, 99 S. Ct. 2282 (quoting Cramer v. United States, 325 U.S. 1, 32-33, 65 S. Ct. 918, 89 L. Ed. 1441 (1945)). The court will first address the City's motion for summary judgment as to Count I before turning to the motions of the individual City defendants.
1. The City's Motion for Summary Judgment as to Count I
The City argues that Corey has failed to produce sufficient evidence to show purposeful discrimination by the City against Corey and that Corey has failed to produce sufficient evidence that the City had a custom or policy that constituted deliberate indifference to Corey's right to equal protection that caused Corey's injury, both of which are essential to Corey's Section 1983 claim against the City. Under Section 1983, municipalities may not be held liable on a theory of respondeat superior. Snow ex rel. Snow v. City of Citronelle, 420 F.3d 1262, 1270 (11th Cir.2005) (citing City of Canton v. Harris, 489 U.S. *1272 378, 385, 109 S. Ct. 1197, 103 L. Ed. 2d 412 (1989)). Instead, a municipality will be held liable if the plaintiff shows "(1) that his constitutional rights were violated; (2) that the municipality had a custom or policy that constituted deliberate indifference to that constitutional right; and (3) that the policy or custom caused the violation." McDowell v. Brown, 392 F.3d 1283, 1289 (11th Cir.2004) (citing Canton, 489 U.S. 378 at 388, 109 S. Ct. 1197). Thus, in this case, Corey must first show that the City violated its right to equal protection by treating it differently than similarly situated persons for the purpose of discriminating against it. In addition, Corey must show that the City had a custom or policy that constituted deliberate indifference to Corey's right to equal protection and that this policy or custom caused the violation of Corey's right.
"A policy is a decision that is officially adopted by the municipality, or created by an official of such rank that he or she could be said to be acting on behalf of the municipality." Sewell v. Town of Lake Hamilton, 117 F.3d 488, 489 (11th Cir.1997). "A custom is an unwritten practice that is applied consistently enough to have the same effect as a policy with the force of law." Goebert v. Lee County, 510 F.3d 1312, 1332 (11th Cir.2007) (citing City of St. Louis v. Praprotnik, 485 U.S. 112, 127, 108 S. Ct. 915, 99 L. Ed. 2d 107 (1988)). "To establish a policy or custom, it is generally necessary to show a persistent and wide-spread practice. Moreover, actual or constructive knowledge of such customs must be attributed to the governing body of the municipality." Depew v. City of St. Marys, Ga., 787 F.2d 1496, 1499 (11th Cir.1986).
For the purposes of its motion for summary judgment, the City does not significantly challenge whether Corey and Clear Channel were similarly situated as bid proponents. The City does, however, note its position that Corey and Clear Channel were similarly situated only to the limited extent that both entities were bidding on the Airport advertising contract but that, once Clear Channel was selected as the most responsible and responsive bid proponent, they were no longer similarly situated. Thus, according to the City, evidence of actions taken after the City had selected Clear Channel cannot establish an equal protection claim. The court agrees but only to a limited extent.
As the court noted in a previous order, given the allegations Corey has made against the City defendants, "the relevant inquiry should be focused on whether Clear Channel and Corey were similarly situated as corporate entities [persons] bidding on the Airport advertising contract and not on which party was the most experienced or produced the superior financial bid. Stated differently, the key issue in determining whether Clear Channel and Corey were similarly situated is whether they were sufficiently similarly situated to merit equal and fair consideration as bidders on the airport advertising contract." July 15, 2005, Order at 21 [Doc. No. 79]. Thus, once the City decided to issue the 2002 RFP, all bid proponents who met the amended minimum qualification requirements had a right to have the Procurement and Real Estate Code of the City applied equally so that the terms of the 2002 RFP were fair to all such bid proponents and so that the City treated all such bid proponents equally during the 2002 RFP selection process. The evidence is uncontested the Corey and Clear Channel both met the amended minimum qualification requirements, and, therefore, both were similarly situated and merited equal consideration and treatment.
Once Clear Channel was selected as the most responsible and responsive proponent, *1273 then the City is correct in its conclusion that Corey and Clear Channel were no longer similarly situated. As discussed in more detail below, however, once the City did not reach a final agreement with Clear Channel and re-opened negotiations by materially changing the terms of the 2002 RFP, Corey and Clear Channel were once again similarly situated as bid proponents, and the City should have afforded Corey the same opportunity to amend its proposal as it did for Clear Channel. Thus, actions taken after the negotiations between Clear Channel and the City failed to reach a final agreement may give rise to an equal protection claim and provide evidence in support of Corey's equal protection claim based on the conduct of the City prior to the selection of Clear Channel as the most responsible and responsive bid proponent.
Setting aside, for the moment, the issue of whether Corey and Clear Channel were similarly situated, the City argues that Corey cannot establish that the City had a discriminatory purpose and that Corey cannot establish that the City had a policy or custom that caused a violation of Corey's right to equal protection. The court disagrees. Keeping in mind that the court must view the evidence and all factual inferences in the light most favorable to Corey, the court holds the following.
First, Corey has produced evidence that the structure of the 2002 RFP and the overall administration of the 2002 RFP selection process were biased and manipulated by the City to the benefit of Clear Channel and to the detriment of any nonincumbent bid proponents. For example, Corey has presented evidence that the City drafted the 2002 RFP to favor Clear Channel over any other bid proponent; more thoroughly examined Corey's DBE partner than it did Clear Channel's DBE partner; accepted without question Clear Channel's proposal, even though that proposal was based on a number of sign locations higher than that set forth in the 2002 RFP; and manipulated the scoring of the proposals so that Clear Channel's bid would rank higher than all others. The court holds that a trier of fact could infer from the evidence, presented as a whole and in context, that the City intended to discriminate against non-incumbent bid proponents, including Corey.
Second, Corey has presented sufficient evidence that the City has an ongoing custom of favoring the private defendants in relation to the Airport advertising contract and that this custom caused a violation of Corey's right to equal protection. For example, in addition to the evidence just mentioned, Corey has presented evidence that the City awarded a no-bid 15-year exclusive contract to TMI of Georgia(which was owned by Fouch and J. Riley and ultimately bought by Clear Channel); extended the original Airport advertising contract for seven years at the original below-market rental rate of 50% before issuing the 2002 RFP; and reopened negotiations with Clear Channel by changing the terms of the 2002 RFP and allowing Clear Channel to change the terms of its proposal without allowing other proponents, including Corey, to amend their proposals. It is true that much of this evidence, if considered individually and out of context, would perhaps appear innocuous. The court holds, however, that the evidence is such that, when considered in its entirety and in context, the trier of fact could infer that the City had a custom of favoring the incumbent Clear Channel and the other private defendants that constituted deliberate indifference to Corey's right to equal protection and that custom caused a violation of Corey's constitutional right. Accordingly, the court denies the City's motion for summary judgment as to Count I.
*1274 2. The Individual City Defendants' Motions for Summary Judgment as to Count I
Owens, Smith, DeCosta, Chavis, and Mastin have filed motions for summary judgment in response to all of Corey's claims against them in their individual capacities on the basis of qualified immunity. The defense of qualified immunity provides "complete protection for government officials sued in their individual capacities as long as `their conduct violates no clearly established statutory or constitutional rights of which a reasonable person would have known.'" Thomas v. Roberts, 261 F.3d 1160, 1170 (11th Cir.2001) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S. Ct. 2727, 73 L. Ed. 2d 396 (1982) (additional quotations omitted)). Given the important public policies underlying the defense of qualified immunity, the Eleventh Circuit has cautioned that "courts should think long and hard before stripping defendants of immunity." Lassiter v. Alabama A & M University, 28 F.3d 1146, 1149 (11th Cir. 1994) (abrogated on other grounds by Hope v. Pelzer, 536 U.S. 730, 122 S. Ct. 2508, 153 L. Ed. 2d 666 (2002)); see also Ray v. Foltz, 370 F.3d 1079, 1082 (11th Cir.2004) (quoting Lassiter for this proposition after Lassiter was abrogated by Hope).
"Because of the purpose served by the doctrine of qualified immunity, a valid defense based upon it must be recognized as soon as possible, preferably at the motion to dismiss or summary judgment stage of the litigation." Johnson v. Breeden, 280 F.3d 1308, 1317 (11th Cir. 2002) (citations omitted). If it is not clear from the allegations in the complaint that the defendants are entitled to qualified immunity, then the case proceeds to the summary judgment stage, which is the "most typical juncture at which defendants entitled to qualified immunity are released from the threat of liability and the burden of further litigation." Id. Nevertheless, not all who are entitled to qualified immunity receive it at the summary judgment stage. Id. Only those defendants who are able to show that there is no genuine issue of material fact that prevents them from being entitled to qualified immunity are entitled to that defense at the summary judgment stage. Id. "But if the evidence at the summary judgment stage, viewed in the light most favorable to the plaintiff, shows there are facts that are inconsistent with qualified immunity being granted, the case and the qualified immunity issue along with it will proceed to trial." Id.
The court must apply a two-part analysis in order to determine whether a defendant government official is entitled to qualified immunity. Harbert International, Inc. v. James, 157 F.3d 1271, 1281 (11th Cir.1998). First, the defendant who seeks the benefit of qualified immunity must "prove that `he was acting within the scope of his discretionary authority when the allegedly wrongful acts occurred.'" Courson v. McMillian, 939 F.2d 1479, 1487 (11th Cir.1991) (quoting Rich v. Dollar, 841 F.2d 1558, 1563 (11th Cir.1988)). "If the defendant was not acting within his discretionary authority, he is ineligible for the benefit of qualified immunity." Lee v. Ferraro, 284 F.3d 1188, 1194 (11th Cir. 2002).
In order to establish that he was acting within the scope of his discretionary authority, a defendant must show that: (1) he was "performing a legitimate job-related function (that is, pursuing a job-related goal)"; and (2) he performed this legitimate job-related function "through means that were within his power to utilize." Holloman ex rel. Holloman v. Harland, 370 F.3d 1252, 1265 (11th Cir. 2004). In order to satisfy the first prong, *1275 a defendant must establish that he was "performing a function that, but for the alleged constitutional infirmity, would have fallen [within] his legitimate job description." Holloman, 370 F.3d at 1266. In order to satisfy the second prong, a defendant must establish that he executed that job-related function in an authorized manner. Id.
If, and only if, the defendant shows that he was acting within his discretionary authority, the court moves on to the second part of the analysis, and the burden then shifts to the plaintiff to demonstrate that qualified immunity is inappropriate because the defendant violated clearly established law. Lee, 284 F.3d at 1194; see also Harbert, 157 F.3d at 1281. In Saucier v. Katz, the Supreme Court set forth a two-part test for evaluating whether the plaintiff has met this burden. 533 U.S. 194, 201, 121 S. Ct. 2151, 150 L. Ed. 2d 272 (2001); see also Lee, 284 F.3d at 1194. First, the court must ask this threshold question: "Taken in the light most favorable to the party asserting the injury, do the facts alleged show the officer's conduct violated a constitutional right?" Saucier, 533 U.S. at 201, 121 S. Ct. 2151; see also Lee, 284 F.3d at 1194. Second, if a constitutional right would have been violated under the plaintiff's version of the facts, the court must then determine "whether the right was clearly established." Id.; see also Lee, 284 F.3d at 1194. In this case, Corey alleges that the individual City defendants each violated its clearly established constitutional right to equal protection by unequally treating Corey in the 2002 RFP process.
a. Whether Each Individual City Defendant was Acting Within His or Her Discretionary Authority
The court finds that each of the individual defendants was acting within his or her discretionary authority when he or she engaged in the allegedly unlawful conduct. The Eleventh Circuit has held, in determining whether an official has acted within her discretionary authority, the relevant "inquiry is not whether it was within the defendant's authority to commit the allegedly illegal act." Harbert, 157 F.3d at 1282. "`Instead, a court must ask whether the act complained of, if done for a proper purpose, would be within, or reasonably related to, the outer perimeter of an official's discretionary duties. The scope of immunity should be determined by the relation of the [injury] complained of to the duties entrusted to the officer.'" Id. (quoting In re Allen, 106 F.3d 582, 594 (4th Cir.1997) (additional internal quotation omitted)). Each of the individual defendants' conduct was, at a minimum, reasonably related to his or her discretionary duties. Although the individual City defendants did not have the authority to violate the constitutional rights of Corey and other bid proponents, they did have the responsibility of administering their job duties in relation to the 2002 RFP. Though each may have done so in an unconstitutional manner, that does not change the fact that each was fulfilling a legitimate job-related function. See Holloman, 370 F.3d at 1267. Thus, though Corey argues otherwise, the court finds that each individual City defendant was performing a function that, but for the alleged constitutional infirmity, would have fallen within his or her job function and that each individual defendant executed that job function in an authorized manner.
Having held that each of the defendants was acting within his or her discretionary authority, the court must next apply the Saucier test. Thus, the court must first determine whether each individual City defendant's alleged conduct violated a constitutional *1276 right of Corey. If the alleged conduct did violate a constitutional right, the court must then determine whether that right was clearly established.
b. Whether the Individual City Defendants Each Violated a Constitutional Right of Corey
As the court held with regard to Corey's Section 1983 claim against the City, Corey has presented evidence that creates genuine issues of material fact as to whether the City had a discriminatory intent when administering the 2002 RFP selection process, whether the City had a long-standing custom of favoring the private defendants to the detriment of other potential Airport advertising management companies, and whether this custom directly caused the deprivation of Corey's right to equal protection. In this context and taking the evidence in the light most favorable to Corey, the alleged conduct of each individual defendant shows that he or she participated in and contributed to the deprivation of Corey's right to equal protection by treating Corey unequally and intentionally discriminating against Corey.
The court notes that the parties have presented a voluminous evidentiary record. Since the court is ruling on motions for summary judgment, the court will not address all of the evidence cited by the parties. Instead, in this order the court will address only the evidence that is sufficient for ruling on the motions. The parties should not assume that the court has ruled either way on the relevance or admissibility of any evidence that it does not discuss in this order. The court will now examine each individual City defendant, his or her individual role in the 2002 RFP selection process, and whether his or her alleged conduct violated Corey's right to equal protection.
i. Ben DeCosta
In 1998, Angela Gittens, the Airport General Manager at the time, authorized and released an RFP that reduced the number of advertising locations in the Airport from approximately 300 to approximately 100. The 1998 RFP was withdrawn that same year prior to any bids or proposals being offered, and Ben DeCosta was hired in 1998 to replace Gittens as the Airport General Manager.
DeCosta knew Fouch and J. Riley from when he worked at the Newark Airport. J. Riley and Fouch's company bid on the advertising contract for the Newark Airport in the early 1990s and offered a 68% rental rate in their bid, and DeCosta testifies that he remembers the 68% rental rate that Riley and Fouch's company offered. Clear Channel's records indicate that it paid a rental rate of 72.7% of gross receipts at the Newark Airport from 1998-2002. Clear Channel's contract for the advertising at the Airport that was in effect when DeCosta became the Airport General Manager provided for a rental rate of 50%.
As the Airport General Manager, DeCosta had the authority to issue a new RFP, but he did not do so until 2002, nearly four years after he became the General Manager. In addition, DeCosta was responsible for presenting the legislation for the new contract to the City Council for approval, but he did not do so until November 4, 2004, which was two years after Clear Channel was chosen as the most responsible and responsive proponent. DeCosta argues that he decided not to submit the legislation sooner because of Corey's protest, which the City had done in the past in the face of protests. Corey filed its lawsuit on November 4, 2004, three days after DeCosta submitted the legislation to the City Council. According to DeCosta, Corey filed its suit before the *1277 City Council Transportation Committee met to consider the legislation, and, due to the pending lawsuit, the City Council held the legislation and ultimately filed it pending the outcome of Corey's lawsuit.
On December 14, 2004, Clear Channel sent a letter to Kyle Mastin, the Concession Manager for the Airport, requesting approval to replace the existing advertising displays at the Airport. DeCosta responded to this request in a letter dated January 20, 2005, and addressed to J. Riley. In that letter, DeCosta stated, "As no contract has been awarded pursuant to the RFP, the rights and obligations of the City and Clear Channel regarding advertising at the Airport remain the same." Ex. 102 to Plaintiff's Statement of Facts. DeCosta also stated that the 1995 Airport Advertising Contract continued to be in effect. DeCosta approved Clear Channel's request but stated, "[I]f Clear Channel seeks to replace the existing advertising displays with new displays, it undertakes these actions on its own initiative and without consideration, promise, or any obligation whatsoever being undertaken by the City or the Airport." Id.
Even though he claimed that the 1995 Airport Advertising Contract governed, DeCosta contacted J. Riley in early 2005 and told him that Clear Channel should begin paying the higher rental rate of 61.1% that Clear Channel had proposed in its original response to the 2002 RFP. As a result, DeCosta believed that he and J. Riley had reached a verbal agreement that Clear Channel would pay the higher rental rate going back to January 1, 2005. In late 2006, DeCosta learned that Clear Channel had not been paying the increased rent. DeCosta then contacted Clear Channel and explained that he expected Clear Channel to pay the increased rent in accordance with the verbal agreement he had with J. Riley, to pay the difference between the 50% rate and the 61.1% rate back to January 1, 2005, and to pay interest on the back rent that was past due. DeCosta also informed Clear Channel that if it failed to honor the verbal agreement, he would prepare and release a new RFP.
In May 2006, DeCosta increased his demand from the 61.1% that Clear Channel had proposed in its bid to 61.2%. In addition, Clear Channel began to negotiate with the City for new sign locations in the Airport. In a letter from Samuel Hart of Clear Channel to Mastin dated May 3, 2006, Clear Channel stated that it felt that "further action" was needed by the City in relation to the proposal to replace the existing advertising displays and to pay the retroactive increased rental rate. Ex. 61 to Plaintiff's Statement of Facts. Clear Channel then stated that it would "require the following assurances and/or agreements by the city to complete the proposal," which included the City's agreement to approve new display locations. Id. On December 1, 2006, Clear Channel wrote a check to the City of Atlanta for approximately $1.7 million referencing the "back rent calculation of City of Atlanta Airport". In the letter accompanying the check (dated December 4, 2006), M. Riley stated, "The Airport has consented to [Clear Channel's] proposed replacement of its existing advertising display inventory and installation of certain new display inventory. Also, [Clear Channel] agrees with the Airport to pay a higher rental payment of 61.2% during the time of its current operations at the Airport." Ex. 64 to the Plaintiff's Statement of Facts. M. Riley went on to state in the letter, "In consideration for the new display advertising locations at the Airport, [Clear Channel] will pay the Airport a one-time up front payment of $1,739,650.00." Id.
Corey argues that DeCosta did not have the authority to amend the 1995 Airport *1278 Advertising Contract because any such amendment had to be executed by the Chief Procurement Officer and presented to and adopted by the City Council. Thus, according to Corey, these ongoing negotiations were in relation to the 2002 RFP and were therefore in violation of the Procurement and Real Estate Code of the City and Section 1.7 of the 2002 RFP, in that, Corey should have been offered an opportunity to take part in these negotiations as a bid proponent in the 2002 RFP process. Section 2-1189(f) of the City Procurement Code, which governs competitive sealed proposals, states in relevant part, "Offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals, and such revisions may be permitted after submissions and prior to award for the purpose of obtaining the best and final offers." Corey argues that, since a final agreement was never reached between the City and Clear Channel, the contract has yet to be awarded. In addition Corey argues that, during these negotiations, the City changed the terms of the 2002 RFP by allowing additional advertising display locations and that the City allowed Clear Channel to revise its proposal. Thus, according to Corey, the City unequally applied Section 2-1189(f) by allowing Clear Channel an opportunity to revise its proposal after submission without allowing Corey to revise its proposal based on the increased number of sign locations.
Section 1.7 of the 2002 RFP provides that the City will enter into negotiations with the winning bid proponent in order to reach a final agreement. Section 1.7 further provides that, if no agreement is reached, then the City will terminate the negotiations and turn to the next highest ranking bid proponent, which, in this case, would be Corey. According to Corey, the initial negotiations between Clear Channel and the City occurred in 2002, and these negotiations did not result in a final contract. Therefore, according to Corey, the City should have entered into negotiations with Corey rather than change the terms of the 2002 RFP and re-open negotiations with Clear Channel.
DeCosta does not contend that he had the authority to amend the 1995 Airport Advertising Contract, nor does he contest that the City would have been obligated to include Corey in any renewed negotiations with regard to a change in the terms of the 2002 RFP. Instead, DeCosta argues that the discussions that he and the City had with Clear Channel were in its capacity as the existing concessionaire and that is why the City did not include Corey. DeCosta argues that, under the terms of the 1995 Airport Advertising Contract, Clear Channel could replace or add advertising displays so long as the City approved. Furthermore, DeCosta argues that Clear Channel's decision to pay a higher rental rate and replace the existing displays did not obligate the City to anything and therefore did not constitute an amendment to the 1995 Airport Advertising Contract. The court disagrees with DeCosta's reasoning.
It is true that the verbal agreement that DeCosta reached with M. Riley and the ultimate agreement that DeCosta reached with Clear Channel regarding the increased rental rate and payment of back rent did not obligate the City, but this is only because DeCosta did not have the authority to amend the 1995 Airport Advertising Contract. If, but only if, DeCosta had possessed the authority to amend the existing agreement, then these agreements would have obligated the City (and Clear Channel for that matter) because the City would have been required to keep in place the existing contract (even if just as a month-to-month contract) under the new terms, i.e., Clear Channel paying an increased *1279 rental rate (applied retroactively) in exchange for the City's agreement to allow Clear Channel to increase the number of display locations in the Airport (among other things).
First, DeCosta stated that, if Clear Channel did not honor its verbal agreement with DeCosta, then he would issue a new RFP. The thinly veiled implication of this offer is that, if Clear Channel did make payment of the back rent and agreed to the increase in the rental rate, then DeCosta would continue the 1995 Airport Advertising Contract at the increased rate until Clear Channel was awarded a new contract as the winning bid proponent. This view is supported by the fact that, when Clear Channel agreed to DeCosta's demand and made payment, DeCosta did not cancel the existing contract and release a new RFP. Instead, Clear Channel continued as the existing concessionaire at the increased rental rate.
Second, the letter from Hart to Mastin shows that Clear Channel intended to require that the City agree to certain things (including an increase in display locations) in exchange for the payment of the retroactive increased rental rate, including the payment of the lump sum for back rent past due. Though the 1995 Airport Advertising Contract provided that the existing concessionaire could increase the number of advertising displays in the Airport with the City's approval, Clear Channel was proposing that the City approve new signs in exchange for the payment of approximately $1.7 million, which would constitute an amendment to the 1995 Airport Advertising Contract.
Third, the letter from M. Riley that accompanied the check indicates that the $1.7 million was payment in consideration of the new advertising display locations. The City's acceptance of the check indicates that the City agreed that it was payment in consideration of the additional display locations. Therefore, the City would have been obligated to allow Clear Channel to increase the number of advertising displays in the Airport, even though the City would have retained the power to cancel the existing month-to-month contract.
This evidence supports the conclusion that if DeCosta had possessed the authority to amend the existing contract, then the agreement with Clear Channel would have obligated the City by amending the terms of the existing contract. If DeCosta did not have the authority to amend the existing contract, then, of course, the City would not be obligated. Since DeCosta did not have the authority to amend the 1995 Airport Advertising Contract, the agreement that DeCosta reached with Clear Channel did not obligate the City. Furthermore, DeCosta knew or should have known that he did not have the authority to amend the 1995 Airport Advertising Contract. For this reason, DeCosta knew or should have known that the negotiations with Clear Channel were not in its capacity as the existing concessionaire and were not related to the existing contract. Instead, it appears that DeCosta was negotiating with Clear Channel in its capacity as a bid proponent. This conclusion is supported by the fact that DeCosta initially demanded that Clear Channel begin paying the rental rate that it had offered in its bid proposal. Thus, it seems that DeCosta was attempting to renegotiate the terms of the 2002 RFP with Clear Channel and to cause Clear Channel to start complying with the terms of its amended proposal before a contract was awarded. But if DeCosta was negotiating with Clear Channel in its capacity as a bid proponent, then he should have given Corey the same opportunity to amend its proposal based on the additional sign locations.
*1280 It is evident that the initial negotiations with Clear Channel did not result in a final contract. In addition, it seems that this failure can be attributed (if not entirely, then in part) to Corey's protest and its lawsuit. DeCosta's own testimony, however, indicates that the City could have cancelled the 2002 RFP, issued a new RFP, and awarded a new contract during this time, given that he told Clear Channel that he would issue a new RFP if it did not comply with his verbal agreement with M. Riley. Thus, DeCosta could have refrained from turning to Corey as the next highest bid proponent on the grounds that a final contract could not be reached until the completion of the protest and litigation, but once DeCosta changed the terms of the 2002 RFP and allowed Clear Channel to amend its proposal, DeCosta should have allowed Corey an equal opportunity to amend its bid proposal. Thus, taking the evidence in the light most favorable to Corey, the court concludes that DeCosta violated Corey's right to equal protection by treating Corey unequally in the 2002 RFP selection process and intentionally discriminating against Corey.
ii. Kyle Mastin
Kyle Mastin is the Concession Manager for the Airport, and he served in that capacity when the 2002 RFP was issued. Mastin and Marlene Coleman drafted Part III (the technical portion) of the 2002 RFP, which included the 31-Day MAG Provision. Mastin also served as one of the scoring evaluators of the proposals submitted in response to the 2002 RFP. In addition, Mastin represented the City in its negotiations with Clear Channel on November 14, 2002, and, as discussed in relation to DeCosta's motion for summary judgment, Mastin was also involved in the negotiations between the City and Clear Channel beginning at the end of 2004 that ultimately resulted in Clear Channel agreeing to pay a retroactive increased rental rate in exchange for additional advertising display locations.
According to Corey, Mastin drafted the technical portion of the 2002 RFP so as to favor Clear Channel over all other potential bid proponents and that this bias evidences a discriminatory intent in favor of Clear Channel and against all other prospective bid proponents, including Corey. In addition, Corey argues that Mastin manipulated the scoring of the bid proposals to the benefit of Clear Channel. In support of its claims, Corey has produced the testimony of Brett Katzman, who is an expert in competitive bidding in the procurement setting.
With regard to the alleged bias built into the 2002 RFP, Corey objects in particular to the 31-Day MAG Provision. The MAG is the minimum rent that the winning proponent would have to pay. The MAG is calculated by multiplying the proponent's proposed rental rate percentage of its gross receipts by 85% of the proponent's projected gross receipts. The 31-Day MAG provision requires the successful proponent to begin monthly rental payments 31 days after an agreement is reached. At that point, the winning proponent would be required to pay the higher of one-twelfth of the MAG per month or its proposed percentage of gross monthly receipts as rent. Katzman opines that the 31-Day MAG provision clearly favored Clear Channel as the incumbent and disadvantaged all non-incumbent bid proponents.
For example, Katzman states that the 31-Day MAG provision provides a substantial benefit to Clear Channel as the incumbent concessionaire because, if Clear Channel ultimately won the bid, it would not be required to pay rent during the first 31 days it had the contract, but it would *1281 receive revenue from the existing advertising. Thus, Clear Channel would receive a 31-day rent free period worth approximately $842,000.
In addition, Katzman states that the 31-Day MAG provision created uncertainty for non-incumbent bid proponents and forced them to take into consideration financial risks that Clear Channel did not have to face. Katzman notes as an example that, if a non-incumbent were selected as the most responsible and responsive bid proponent and was awarded the contract, it would then have to submit its plans for its displays, submit possible questions and possible new or revised plans in light of the City's response, wait for the City's final approval, fabricate the new displays, and then install those displays. This process would delay the non-incumbent from generating revenue with which to pay the MAG after the 31-day rent free period. Katzman notes that one possible option available to a non-incumbent would be to proceed with those steps during the approximate 60 days between the selection of the non-incumbent and the execution of the contract by the Mayor. But Katzman states that the design and fabrication of new signs would involve an investment of over $2 million, and, therefore a non-incumbent firm would incur a great financial risk if it undertook these steps before having an executed contract. In addition, Katzman notes that proponents selected in past RFPs have never received contracts from the City. Thus, according to Katzman, the 31-Day MAG provision evidences that bias in favor of Clear Channel was built into the technical portion of the 2002 RFP, which was drafted by Mastin.
Furthermore, Katzman testifies that various steps could have been taken to alleviate this bias, but the City failed to do so. For example, the City could have bought the existing displays from Clear Channel under the terms of the existing contract and then sold them at cost to a non-incumbent. But the City did not commit to doing so and did not communicate to the non-incumbents that it would make such a commitment. In addition, Corey asked the City to consider extending Clear Channel's existing contract for 60 days to allow a new concessionaire time to build the necessary equipment, and the City responded simply with a "No." Ex. 22 to Plaintiff's Statement of Facts at Addendum 4.
Next, Corey claims that Mastin manipulated the scoring of the proposals in favor of Clear Channel. According to Corey, Clear Channel presented inflated revenue projections that were based on additional advertising display locations that were not disclosed in the 2002 RFP, yet Mastin scored Clear Channel based on these inflated revenue projections. In support of its claim, Corey points out that both J. Riley and M. Riley testify in their depositions that Clear Channel's proposal was based on Clear Channel's assumption that it would be able to increase the number of display locations beyond the number set forth in the 2002 RFP. In addition, Corey points out that Clear Channel's revenue projections went from approximately $10 million in the first year to approximately $20 million in the fifth year. The subsequent negotiations between the City (by DeCosta and Mastin) and Clear Channel that resulted in Clear Channel increasing its rental rate to 61.2% in exchange for an increase in the number of display locations further supports Corey's claim that Clear Channel's revenue projections were based on more advertising locations than what was set forth in the 2002 RFP. According to Corey, since he was the Concession Manager and drafted the technical portion of the 2002 RFP, Mastin knew the number of display locations that were identified in the 2002 RFP and knew the revenue that *1282 those signs generated in the five years prior to the release of the 2002 RFP, which was significantly lower than Clear Channel's projected revenue. Nevertheless, Mastin never questioned those projections and based his score on those inflated projections. Corey argues that, in doing so, Mastin gave Clear Channel an unfair advantage in the scoring process.
In addition, Katzman testifies that the scoring system employed in scoring the proposals was susceptible to manipulation. As the court noted previously, the proposals were scored according to the following categories (points available are in parentheses): General and Specialized Experience (10 points); Past Performance and Experience (10 points); Performance Capabilities (10 points); Business Plan (10 points); Fee (35 points); Financial Condition (10 points); and Equal Business Opportunity (awarded for partnering with a DBE) (15 points). According to Katzman, an evaluator could manipulate the scoring by giving a slightly higher score in the objective Fee category (worth 35% of the total score) to a proponent who offered a higher rental rate, while at the same time negating that reward by giving another proponent substantially higher scores in the more subjective categories, each of which were worth less of the total (10% each) but collectively worth more (40%). Katzman states that Mastin's scoring indicates that he engaged in just this practice.
Mastin scored Corey 5 points higher on the Fee category but awarded Clear Channel 5 more points than Corey in Past Performance and Experience. Thus, according to Katzman, Mastin used a category worth only 10% of the total to negate Corey's advantage in a category worth 35% of the total. In Katzman's opinion, this scoring indicates that Mastin manipulated the scoring of Clear Channel and Corey's proposals. Taking this evidence and all factual inferences in the light most favorable to Corey, the court holds that Mastin treated Corey and Clear Channel unequally and intentionally discriminated against Corey during the 2002 RFP Process, and, by doing so, Mastin violated Corey's right to equal protection.
iii. Hubert Owens
Owens is the Director of the City's Office of Contract Compliance ("OCC") and served in that capacity when Fouch submitted her DBE application in late May 2002, and he oversaw and gave final approval of Fouch's DBE application. Corey alleges that Owens intentionally discriminated against Corey by certifying Fouch d/b/a CMDG as a DBE so that Clear Channel would receive 15 points on its proposal for partnering with a DBE.
In support of its claims, Corey notes that Owens began working in the OCC in 1994 as a contract compliance specialist. Owens acknowledges that, during his time with the OCC prior to Fouch applying for DBE certification, he knew that Fouch had been involved with the advertising contract at the Airport. In addition, Corey points out, among other things, that its DBE partner, Maureen Malone, doing business as Sydney Baxter & Co., was more thoroughly investigated and reviewed by Owens and his office than was Fouch. In fact, the DBE certification recommendation form for Fouch that Owens approved was only partially completed. Notably, the questions relating to Fouch's gross revenue and net worth were left incomplete.
As the Director of OCC, Owens reviewed the proposals submitted by Corey and Clear Channel in order to determine whether they were responsive to the DBE requirements. Based on his approval and certification of both Fouch and Malone, Owens deemed both Clear Channel and *1283 Corey to have complied with the DBE requirements, which resulted in both companies receiving the full 15 points on the scores of their respective proposals. Corey argues that, had Owens and his office more thoroughly vetted Fouch, as they did Corey's DBE partner, he would not have certified her as a DBE, Clear Channel would not have received the 15 points, and Corey's score would have been higher than Clear Channel's. Taking the evidence and all factual inferences in the light most favorable to Corey, the court finds that Owen's alleged conduct deprived Corey of its right to equal protection by treating Corey differently than Clear Channel and intentionally discriminating against Corey in the DBE certification process and the scoring process.
iv. Adam Smith
Smith is the Chief Procurement Officer of the City. He took office in January, 2003, two months after the City selected Clear Channel as the top-ranked proponent for the Airport advertising contract. As such, Smith had no involvement in the DBE certification process or in the 2002 RFP process prior to the initial selection of Clear Channel as the most responsible and responsive proponent. By the time he took office, Corey had filed its protest with the City regarding the selection of Clear Channel as the top-ranked bid proponent. Furthermore, prior to his taking office, Smith's predecessor, Felicia Strong-Whitaker, had denied Corey's protest and Corey had filed its appeal of that denial. Nevertheless, Corey alleges that Smith purposefully discriminated against it because he subsequently did not launch an independent investigation of Corey's claims. In support of its claim, Corey cites a letter that it obtained through discovery that indicates it is from Smith to M. Riley (though it does not contain Smith's handwritten signature). The letter also indicates that copies were sent to seven other people, including DeCosta and Owens. The letter states, in relevant part:
After careful review of the procurement file on the above-referenced project [the 2002 RFP], the Department of Procurement has concluded that the City did not follow the established procurement process in such a manner as to serve the best interests of the City. More specifically, we determined that the evaluation of the minimum qualifications for each proponent was not properly conducted.
In light of this factor, the City has determined that it would be in its best interest to cancel the solicitation, reject all proposals and re-solicit for this project.
Ex. 56 to Plaintiff's Statement of Facts. In his deposition, Smith denied having any knowledge of the letter. Regardless, taking this evidence and all factual inferences in the light most favorable to Corey, this letter indicates that Smith determined that the 2002 RFP was conducted improperly, but then refused to cancel the bid and issue a new RFP, which was within his authority and which he had done in other cases. If he did so, Smith treated Corey unequally and discriminated against it in order to favor Clear Channel. Thus, Smith's alleged conduct deprived Corey of its right to equal protection.
v. Carolyn Chavis
In 2002, Chavis was the City's Aviation Contract Administrator, and she drafted Parts I and II of the Airport Advertising RFP, which were the non-technical portions. Chavis was also the City's Contact Person for the 2002 RFP, and, in this capacity, she responded to inquiries submitted by bid proponents. In particular, Chavis accepted written questions from the bid proponents, directed those *1284 questions to the appropriate department or agency, and ensured that written responses would be provided to the bid proponents and that those responses were attached to the 2002 RFP as an addendum.
Corey sent three sets of questions to Chavis. The first two were answered and attached to the 2002 RFP in Addendum Four. The third set, however, was never answered and was never attached to the 2002 RFP. Chavis, however, responded to all inquiries made by Clear Channel. In her deposition, Chavis testifies that it was a mistake that the third set of questions was not answered. This may be the case, but just because Chavis says that it was a mistake does not make it so. Chavis also testifies that she retired from her position early in 2007, but her boss, Adam Smith, states in his deposition that he terminated her. Perhaps she retired; perhaps she was terminated. Perhaps she made an innocent mistake in failing to ensure that the third set of questions was answered and attached to the 2002 RFP; perhaps she refused to answer as part of an overall plan to discriminate against Corey in the 2002 RFP selection process. The court cannot decide this issue at the summary judgment stage. Thus, taking the evidence and all factual allegations and inferences in the light most favorable to Corey, the court holds that Chavis treated Corey unequally in relation to Clear Channel in responding to written questions and intentionally discriminated against Corey. Therefore, Chavis's alleged conduct, when taken in context, violated Corey's right to equal protection.
In summary, taking the evidence and all factual inferences in context and in the light most favorable to Corey, the court holds that each individual defendant's conduct, as alleged, violated Corey's right to equal protection. The next issue is whether the constitutional right at issue was clearly established.
c. Whether the Right was Clearly Established
The individual city defendants argue that Corey cannot meet its burden by arguing that the clearly established right is the right to equal protection. In support of this proposition, DeCosta states in a footnote in his brief, "The Eleventh Circuit has previously stated that the `most common error' it finds on qualified immunity appeals is where district courts `permit plaintiffs to discharge their burden by referring to general rules and to the violation of abstract rights.'" Brief in Support of Ben DeCosta's Motion for Summary Judgment at 14 n. 5 (quoting Lassiter, 28 F.3d at 1150 and stating that Lassiter was "abrogated on other grounds" by Hope, 536 U.S. at 730, 122 S. Ct. 2508).[2] The defendants go on to quote a case in which the Eleventh Circuit stated that it "has held time and time again that clearly established general principles of law will seldom if ever suffice to strip a defendant of qualified immunity." Harbert, 157 F.3d at 1284. But Harbert predates Hope, and the Eleventh Circuit itself has noted that the Supreme Court in Hope "cautioned that we should not be unduly rigid in requiring factual similarity between prior cases and the case under consideration." Vaughan v. Cox, 343 F.3d 1323, 1332 (11th Cir.2003) (citing Hope, 536 U.S. at 741, 122 S. Ct. 2508).[3]
In Hope, the Supreme Court held:
*1285 For a constitutional right to be clearly established, its contours `must be sufficiently clear that a reasonable official would understand that what he is doing violates that right. This is not to say that an official action is protected by qualified immunity unless the very action in question has previously been held unlawful, see Mitchell v. Forsyth, 472 U.S. 511, 535, n. 12, 105 S. Ct. 2806, 86 L. Ed. 2d 411; but it is to say that in the light of pre-existing law the unlawfulness must be apparent.' Anderson v. Creighton, 483 U.S. 635, 640, 107 S. Ct. 3034, 97 L. Ed. 2d 523 (1987).
Hope, 536 U.S. at 741, 122 S. Ct. 2508. The Supreme Court then explained that "`general statements of the law are not inherently incapable of giving fair and clear warning, and in other instances a general constitutional rule already identified in the decisional law may apply with obvious clarity to the specific conduct in question, even though the very action in question has not previously been held unlawful.'" Hope, 536 U.S. at 741, 122 S. Ct. 2508 (quoting United States v. Lanier, 520 U.S. 259, 270, 117 S. Ct. 1219, 137 L. Ed. 2d 432 (1997) (other internal quotations omitted)). The Supreme Court ultimately held in Hope that "the salient question" that the court must answer "is whether the state of the law" at the time of the alleged conduct gave the government officials "fair warning that their alleged treatment [of the plaintiff] was unconstitutional." 536 U.S. at 741, 122 S. Ct. 2508; see also Vaughan, 343 F.3d at 1332.
In response to the Supreme Court's holding, the Eleventh Circuit has held it does "not just compare the facts of an instant case to prior cases to determine if a right is `clearly established;' we also assess whether the facts of the instant case fall within statements of general principle from our precedents." Holloman, 370 F.3d at 1278. Thus, there need not be cases with facts that are materially similar to the facts of this case in order for the constitutional right at issue to be clearly established. Instead, the state of the law must be such that the individual City defendants had fair warning that their alleged treatment of Corey was unconstitutional.
Relevant to this case, the Eleventh Circuit has held, "It is well settled that unequal application of a facially neutral statute may violate the Equal Protection Clause." Strickland, 74 F.3d at 264 (citing Eide v. Sarasota County, 908 F.2d 716, 722 (11th Cir.1990) and Mackenzie v. City of Rockledge, 920 F.2d 1554, 1559 (11th Cir.1991)). Though there was no Eleventh Circuit case law in 2002 with facts that are materially identical to those at hand, such case law was not necessary to give the individual City defendants fair notice that their alleged conduct would violate Corey's constitutional rights. Any reasonable government official would know that he or she must administer his or her duties in a fair-handed and equal manner with regard to similarly situated persons. Any reasonable government official would know that, if he or she participated in a plan and custom of favoring one person and intentionally discriminating against other similarly situated persons, then he or she would be violating the constitutional rights of those discriminated against. Finally, any reasonable government official involved in the 2002 RFP process would know that, once the RFP was issued, they had to treat all similarly situated bid proponents fairly and equally in scoring the proposals and awarding the highest-ranked proponent the contract. Accordingly, the court holds that the individual *1286 City defendants had fair notice that their alleged conduct and treatment of Corey would be unconstitutional. Therefore, the constitutional right that Corey alleges was violated by the individual City defendants was clearly established as of the time the conduct took place.
In summary, taking the evidence in the light most favorable to Corey, the court holds that, though they were acting within their discretionary authority, the individual City defendants each violated Corey's clearly established constitutional right to be treated fairly and equally during the 2002 RFP process. Accordingly, the individual City defendants are not entitled to the defense of qualified immunity at this stage of the litigation. Therefore, the court denies their respective motions for summary judgment.
B. Count II: Conspiracy to Violate Equal Protection
In Count II, Corey alleges that the City defendants and the private defendants conspired to violate Corey's right to equal protection. The court first notes that it has found that the individual City defendants are not entitled to the defense of qualified immunity at this point. In addition, the Eleventh Circuit has held "[P]rivate defendants can be held liable in a ง 1983 action if they act in concert with the state officials in depriving a plaintiff of constitutional rights." Bendiburg v. Dempsey, 909 F.2d 463, 468 (11th Cir. 1990) (citing Lugar v. Edmondson Oil Co., 457 U.S. 922, 102 S. Ct. 2744, 73 L. Ed. 2d 482 (1982) and Dennis v. Sparks, 449 U.S. 24, 101 S. Ct. 183, 66 L. Ed. 2d 185 (1980)). As a threshold matter, a plaintiff must "show an underlying actual denial of its constitutional rights" in order to prevail on a Section 1983 conspiracy claim. GJR Investments, Inc. v. County of Escambia, Florida, 132 F.3d 1359, 1370 (11th Cir. 1998). A plaintiff must then "show that the parties `reached an understanding' to deny the plaintiff his or her rights." N.A.A.C.P. v. Hunt, 891 F.2d 1555, 1563 (11th Cir.1990); see also Bendiburg, 909 F.2d at 468. "The conspiratorial acts must impinge upon the federal right; the plaintiff must prove an actionable wrong to support the conspiracy." Id.; see also Bendiburg, 909 F.2d at 468. "The plaintiff does not have to produce a `smoking gun' to establish the `understanding' or `willful participation' required to show a conspiracy but must show some evidence of agreement between the defendants." Rowe v. City of Fort Lauderdale, 279 F.3d 1271, 1284 (11th Cir.2002) (quoting Bendiburg, 909 F.2d at 469 and citing Bailey v. Board of County Commissioners of Alachua County, 956 F.2d 1112, 1122 (11th Cir. 1992)).
As the court has already held, Corey has presented evidence from which the trier of fact could conclude that there has been an actual denial of Corey's constitutional right to equal protection. Accordingly, the court must now address whether Corey has presented sufficient evidence for establishing that the City defendants and the private defendants reached an understanding to deny or willfully participated in denying Corey's constitutional right.
The Eleventh Circuit has stated "[T] he linchpin for conspiracy is agreement, which presupposes communication. . . ." Bailey, 956 F.2d at 1122. It is not contested that the private defendants communicated with the City and the various individual City defendants in the years leading up to the release of the 2002 RFP and during the various negotiations that took place over the years following the release of the 2002 RFP, and, therefore, the private defendants had the opportunity to conspire with the City defendants. All of the private defendants, however, argue *1287 that the various communications were legitimate and are not evidence of a conspiracy to deny Corey of its right to equal protection. Thus, according to the private defendants, they are entitled to summary judgment. The court disagrees.
There is evidence in the record from which the trier of fact could find that the private defendants reached an understanding with the City to favor Clear Channel over all other similarly situated bid proponents and that they willfully participated in this conspiracy. If this is the case, then the private defendants have acted in concert with the City defendants in such a way as to subject them to liability under Section 1983. For example, there is evidence that the private defendants were in contact with the City prior to the release of the 2002 RFP. There is evidence that Clear Channel submitted inflated revenue projections in its proposal based on additional display locations that were not included in the 2002 RFP, though Clear Channel did not indicate in its proposal that it was basing its revenue projections on the assumption that the City would approve such an increase. Also, there is evidence that the advertising revenue in the immediate years preceding the release of the 2002 RFP indicated that Clear Channel's projections were inflated but that the City accepted Clear Channel's projections without question. There is evidence that Clear Channel was ultimately selected as the most responsible and responsive proponent based in significant part on those inflated revenue projections. There is evidence that Clear Channel agreed to pay an increased rental rate retroactively in exchange for the City's approval of additional sign locations, even though no contract had yet been awarded and DeCosta and Mastin did not have the authority to amend the existing contract. Finally, there is evidence that the various private defendants were in communication with the City throughout all of these occurrences. Taking this evidence in its entirety, the trier of fact could find that there was an agreement between the private defendants and the City defendants to act in concert to purposefully discriminate against non-incumbent bid proponents, including Corey, thereby depriving them of their constitutional right to equal protection.
Of course, it is also true that the trier of fact might ultimately conclude that all of the communications between the private defendants and City defendants were innocent and for legitimate purposes and that the evidence does not support a finding of a conspiracy to violate Corey's constitutional right. This cannot be decided at summary judgment, however, because there remain material factual disputes, which, if the trier of fact resolves in favor of Corey, would entitle it to prevail on its conspiracy claim. Accordingly, the court denies the defendants' motions for summary judgment as to Count II of Corey's complaint.
C. Count III: Attorney Fees Pursuant to 42 U.S.C. ง 1988(b)
In Count III, Corey brings a claim for attorney fees and expenses under 42 U.S.C. ง 1988(b), which provides, in relevant part, "In any action or proceeding to enforce a provision of [42 U.S.C. ง 1983], the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs . . . ." Both plaintiffs and defendants may be prevailing parties for purposes of Section 1988(b), but the standard for determining whether a defendant is a prevailing party is much more stringent than that for a plaintiff. Under the Supreme Court's "generous formulation of the term, plaintiffs may be considered prevailing parties for attorney's fee purposes *1288 if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit." Farrar v. Hobby, 506 U.S. 103, 109, 113 S. Ct. 566, 121 L. Ed. 2d 494 (1992). For a defendant to be judged a prevailing party and awarded attorney fees, however, the Supreme Court has held, "The plaintiff's action must be meritless in the sense that it is groundless or without foundation. The fact that a plaintiff may ultimately lose his case is not in itself a sufficient justification for the assessment of fees." Hughes v. Rowe, 449 U.S. 5, 14, 101 S. Ct. 173, 66 L. Ed. 2d 163 (1980). Regardless, because the court has denied the defendants' motions for summary judgment as to Corey's Section 1983 claims, Corey could still yet prevail on those claims and be entitled to attorney fees. Accordingly, the court denies the defendants' motions for summary judgment as to Count III.
D. Counts IV and V: Conspiracy in Restraint of Trade, Monopolization, Attempted Monopolization, and Conspiracy to Monopolize
In Counts IV and V of its Second Amended Complaint, Corey sets forth four antitrust claims against the private defendants under Sections One and Two of the Sherman Act, including (1) conspiracy in restraint of trade, (2) monopolization, (3) attempted monopolization, and (4) conspiracy to monopolize. The private defendants argue they are entitled to summary judgment with regard to those claims on the grounds that Corey lacks antitrust standing and Corey has failed to establish the relevant market for those claims. In addition, the private defendants have filed a motion to exclude the testimony of John H. Landon, Ph.D., the expert witness retained by Corey to define the relevant market and to determine whether there was harm to competition within the relevant market. The court will begin with the private defendants' motion to exclude.
1. The Motion to Exclude Testimony of John H. Landon [Doc. No. 496]
In Section II(A)(I) of this order, the court set forth the Daubert standard for evaluating proffered expert testimony. The court will now apply that standard to the expert testimony of Landon.
a. Whether the Expert is Qualified
As Corey notes in its brief, the private defendants do not challenge Landon's qualifications to testify. Landon received his B.A. degree in economics with highest honors from Michigan State University and both his Master's and Doctoral degrees in economics from Cornell University. He has served on the faculties of Case Western Reserve University and the University of Delaware, where he has taught both undergraduate and graduate courses in economics. He has held various professional positions related to his expertise in economics, and he has published widely in the field. Given his expertise in economics and that the private defendants have not challenged his qualifications, the court finds that Landon is qualified to testify as an expert witness.
b. Whether the Expert has Employed a Sufficiently Reliable Methodology
The private defendants argue that Landon has failed to perform the empirical and economic analyses that are required to support his conclusions regarding the alleged relevant market and harm to competition. Thus, according to the private defendants, Landon has failed to utilize a reliable methodology and his testimony should be excluded. Corey, however, argues *1289 that, rather than challenging Landon's methodology or reliability, the private defendants base their argument on an incorrect interpretation of the buyer-seller relationship in this transaction and are attacking merely Landon's analysis of the transaction at issue and the conclusions he draws based on that analysis.
"Defining the relevant market requires identification of both the product at issue and the geographic market for that product." Bailey v. Allgas, Inc., 284 F.3d 1237, 1246 (11th Cir.2002). "`The outer boundaries of a product market are determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it.'" Id. (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 325, 82 S. Ct. 1502, 8 L. Ed. 2d 510 (1962)). "The relevant geographic market is `the area of effective competition . . . in which the seller operates, and to which the purchaser can practicably turn for supplies.'" Id. at 1247 (quoting Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 327, 81 S. Ct. 623, 5 L. Ed. 2d 580 (1961)). "Measurement of the relevant geographic market depends on a number of factors, including `[p]rice data and such corroborative factors as transportation costs, delivery limitations, customer convenience and preference, and the location and facilities of other producers and distributors.'" Id. at 1247-48 (quoting T. Harris Young & Associates, Inc. v. Marquette Electronics, Inc., 931 F.2d 816, 823 (11th Cir.1991)).
As Landon notes in his report, in order to identify the product at issue and the relevant geographic market for that product, one must first identify who is the buyer and who is the seller in the given transaction. In most situations, it is quite easy to distinguish the buyer from the seller. The party who makes payment in exchange for goods or services is the buyer, while the party who receives payment is the seller. In other words, one need look only at the flow of money in the transaction: the money goes from the buyer to the seller. In this case, however, things are not quite so simple.
According to Corey and Landon, the City is the buyer and the concessionaire is the seller because the City pays the concessionaire a percentage of the total advertising proceeds in exchange for the design, installation, operation, maintenance, and management of the advertising boards at the Airport. Based on this analysis, Landon concludes that the relevant product is the collection of services regarding the management of the advertising space at the Airport and the relevant geographic market is the Airport itself. But according to the private defendants and their expert, Stephen D. Prowse, Ph.D., the seller is the City and the purchaser is the concessionaire (e.g., Clear Channel or Corey) because the concessionaire buys advertising space from the City by leasing that space, which it then sells to advertisers in monthly increments. Based on this analysis of the buyer-seller relationship, Prowse concludes that the relevant product at issue is the right to sell advertising in the Airport and the geographic market is far broader than just the Airport since there is evidence that concessionaires consider the rights to sell advertising at certain other venues as substitutes for the right to sell advertising at the Airport.
In their initial brief in support of their motion to exclude Landon's testimony, the private defendants argue that, in determining the relevant product market, Landon failed to consider whether there are reasonable substitutes for the right to sell advertising space at the Airport and that he failed to study or even consider the cross-elasticity of demand between the right to sell advertising space in the Airport *1290 and possible substitutes. Furthermore, the private defendants argue that, in determining the relevant geographic market, Landon failed to consider whether concessionaires such as Corey and Clear Channel could turn to sellers in other geographic areas as alternative sources of supply for the right to sell advertising at the Airport or for substitutes for that right.
In response, Corey argues that, given his analysis of the buyer-seller relationship, Landon sufficiently considered the relevant factors. First, Corey argues that there are no reasonable substitutes for the product Landon identified to be the relevant product, viz., the collection of management services related to the advertising at the Airport. Since there are no substitutes for the product at issue, it was not possible to conduct any studies of cross-elasticities, and this is why Landon did not conduct any such studies. Second, Corey argues that Landon did not consider other geographic areas, including other airports, because it would have been "nonsensical" to do so, given Landon's identification of the Airport as the buyer. According to Corey, the private defendants' argument against the reliability of Landon's testimony is based on Prowse's analysis of the buyer-seller relationship at issue. Thus, rather than criticizing the reliability of Landon's method, the private defendants are rejecting Landon's analysis of the buyer-seller relationship and attacking the conclusions that Landon has reached.
The court agrees with Corey that the private defendants cannot use their analysis of the buyer-seller relationship in order to show that the methodology employed by Landon is unreliable and should therefore be excluded. Even the private defendants' own expert states that he believes "that there are buyer and seller characteristics to both sides of the transaction, but it is more correct to view the City of Atlanta as the seller of advertising rights to the concessionaire." Expert Witness Report of Stephen D. Prowse at 13 [Doc. No. 497-5]. In addition, Landon testifies that, though he thinks it "more appropriate" to view the City as the buyer, he could understand "where you could look at it the other way." Deposition of John H. Landon at 165 [Doc. No. 496-4]. Accordingly, the court concludes that this is a substantive factual dispute and each expert is entitled to form his own opinion regarding this dispute. Thus, Landon is entitled to give his own analysis of the buyer-seller relationship and then to use that conclusion to frame his economic analysis of the relevant factors in determining the relevant product and geographic markets. For the purposes of this motion, the court will assume that the city is the buyer and the concessionaire is the seller. Even assuming, however, that Landon's analysis of the buyer-seller relationship is correct, the court concludes that he has failed to demonstrate that he has used a reliable methodology in reaching his conclusions. Simply put, there is too great an analytical gap between the data and the opinion that Landon offers as to the relevant market and as to whether there has been harm to competition in that market. Before looking at the content of Landon's report, the court will note two points that seem relevant in explaining why Landon's report is deficient.
First, Corey filed its original complaint on November 4, 2004, and Corey's original complaint included its antitrust claims. The court's original scheduling order directed Corey to serve all Rule 26 expert disclosures by January 15, 2007 [Doc. No. 172], and Corey's counsel knew, or should have known, that they would need to retain an expert witness in order to establish the relevant market. Yet, as Clear Channel's counsel pointed out at the Daubert *1291 hearing, Corey did not retain Landon until January 4, 2007, a mere eleven days before Landon's report was due to be served. From the cover page of his report, it appears Landon completed his report on January 15, 2007, which was, fortuitously, just in time. Thus, Landon completed his research, conducted his economic analysis, and drafted his report in just eleven days. The substantive portion of his report in which he gives his opinions is nine pages; seven if you omit the two full page charts. These facts do not conclusively demonstrate that Landon's methodology is unreliable, but they do suggest part of the explanation as to why Landon failed to do the required analysis.
Second, it appears that Landon assumed that the allegations in the complaint were true and that those allegations constituted an antitrust violation as the starting point for his analysis, which further explains the inadequacy and unreliability of his methodology. In his report, Landon states that he has "been instructed to assume arguendo that defendants engaged in behavior in violation of antitrust laws." Expert Report of John H. Landon at 3 [Doc. No. 496-5]. Furthermore, in his deposition, Landon states that he was "relying upon the assumption that there's been an antitrust violation, and then my job is to try to carve out a relative market given the assumed true and correctness of those allegations." Deposition of John H. Landon at 10 [Doc. No. 496-4]. Based on his assumption, Landon defined the relevant product as the collection of services related to managing the advertising located at the Airport and he defined the relevant geographic area as the Airport itself.
Of course Landon may assume that the factual allegations in the complaint are true for the purposes of framing his analysis, but he should not have made the additional legal assumption that the conduct alleged in the complaint constitutes an antitrust violation. The proper procedure would be to assume that the allegations in the complaint are true, use those allegations to determine what studies and analyses are required in order to define the relevant market, conduct the requisite research and define the relevant market, and then determine whether there has been harm in that market such that there is a violation of the antitrust laws. Thus, in this case, Landon should have first assumed that the factual allegations contained in the complaint are true and then used those allegations as a starting point for defining the relevant market. Even taking the factual allegations in the complaint as true, it might turn out that the relevant market is such that there has been no antitrust violation. But by assuming that the allegations are true and constitute an antitrust violation, the expert is forced to define the relevant market such that a violation has occurred.
Suppose, for example, the court is adjudicating a contract dispute between two parties. According to the allegations in the hypothetical complaint, the defendant failed to deliver a widget to the plaintiff by January 1, 2008, and this failure to deliver constitutes a breach of Contract 1 between the plaintiff and defendant. In a motion to dismiss, the defendant argues that Contract 1 had been superseded by Contract 2, which states that the defendant is to deliver a gizmo instead of a widget on January 1, 2008, and, therefore, the defendant had no obligation to deliver a widget. In addition, the defendant contends that it delivered both a widget and a gizmo by January 1, 2008, but it does not raise this argument in its motion to dismiss since this claim is a factual one that will need to be raised at summary judgment after discovery has been conducted. Both parties agree that Contract 1 requires delivery of a widget by January 1 and Contract 2 *1292 requires delivery of a gizmo instead of a widget by January 1, but they contest which contract governs. In such a scenario, the court would assume that the factual allegations in the complaint are true, i.e., that the defendant failed to deliver a widget by January 1, and then decide which contract was governing in order to determine whether there was a breach of contract. After assuming that the defendant failed to deliver the widget, it is still possible for the court to rule that Contract 1 is the governing contract or that Contract 2 is the governing contract, depending on the language of the contracts. After conducting an analysis of the two contracts, the court would then decide which contract governs and whether the defendant's failure to deliver constituted a breach of contract.
But if the court were to assume that the defendant failed to deliver the widget on time and that such failure constituted a breach of contract, then the court would not need to conduct any analysis of the two contracts in order to determine which one governs. Since Contract 2 does not require the delivery of a widget, the court would be forced to find that Contract 1 governed. If Contract 2 governed, then there would be no breach of contract, which would contradict the court's assumption that there was a breach. Thus, the court would have to hold that Contract 1 governs, but obviously this procedure is incorrect.
By way of further analogy, consider the following situation. Suppose that there are two hot dog stands, Stand A and Stand B, both of which are in Atlanta, Georgia. In addition, suppose that Stand A and Stand B are in the same neighborhood, Pine Dale, and on the same street, Oak Lane, and both of them sell the same brand of hot dogs, C-Brand Dogs. At first, Stand A and Stand B both sell their hot dogs for $1.25. Stand A then cuts the price of its hot dogs to $1.00. Stand B cannot compete and goes out of business. Stand B then sues Stand A for predatory pricing in violation of Section 2 of the Sherman Act. In order to establish such a claim, the plaintiff must prove that "(1) the prices complained of are below an appropriate measure of the predator's costs; and (2) the predator had a reasonable expectation of recouping its investment in below-cost pricing." Bailey, 284 F.3d at 1244. The Eleventh Circuit has held:
Determining whether recoupment of predatory losses is likely requires a close analysis of the structure and conditions of the relevant market. In order to recoup its losses, predators "must obtain enough market power to set higher than competitive prices, and then must sustain those prices long enough to earn in excess profits what they earlier gave up in below-cost prices."
Id. at 1245 (quoting Matsushita, 475 U.S. at 590-91, 106 S. Ct. 1348). Thus, in order to support its claim, Stand B hires an expert to define the relevant market.
In order to begin her analysis, the expert may assume that the factual allegations in the complaint are true, i.e., she may assume that Stand A cut the price of its hot dogs to $1.00 and Stand B closed down because it could not compete. In determining the relevant product market, the expert would then need to identify reasonable substitutes for the hot dogs and to conduct the relevant studies to determine the reasonable interchangeability of use or the cross-elasticity of demand between hot dogs and substitute products. In determining the relevant geographic market, she would also need to consider, among other things, the area in which Stand A and Stand B operate and in which purchasers of hot dogs could turn to alternative sources of supplies. Thus, even in *1293 this simple example, the expert would need to conduct extensive research and economic analysis in order to determine the relevant market.
But suppose that, in addition to assuming that the factual allegations are true, she also assumed those allegations constitute an antitrust violation and then carved out the relevant market based on these assumptions. Assuming that the allegations constitute an antitrust violation, the expert would realize that she need not conduct the extensive studies and analysis discussed above. The assumption that there has been a violation strictly limits the possible definitions of the relevant market: her definition must be such that a violation of the antitrust laws have occurred.
In this hypothetical case, the expert would have to define the relevant market extremely narrowly in order for the conduct to even possibly constitute an antitrust violation. For example, suppose that she defined the relevant market as hot dogs in Atlanta. Stand A's conduct would not constitute an antitrust violation on such a definition of the relevant market. After all, Stand A would not be able to increase and sustain higher than competitive prices in order to recoup its losses. If Stand A attempted to do so, then its customers could find other sellers of hot dogs in Atlanta to purchase at a lower price. But if the expert's definition of the relevant market entails that Stand A's conduct is not an antitrust violation, then the expert's definition of the relevant market contradicts her original assumption that the conduct is a violation. Thus, the expert would need to define the relevant market much more narrowly. In this hypothetical case, it would seem that the expert would have to define the relevant market as Brand-C hot dogs on Oak Lane in Pine Dale. If that's the relevant market, then Stand A has 100% of the market power, and only then would Stand A's price cut even plausibly constitute an antitrust violation.
When the defendant's counsel and the court then ask the hypothetical expert why she did not consider any reasonable substitute products, conduct any cross-elasticity studies, or look at other sources of supply, she can reply that such studies and analyses are impossible since Brand-C hot dogs on Oak Lane in Pine Dale are unique, have no substitutes, and are supplied by only one producer. According to the expert, a hungry consumer who wants a Brand-C hot dog on Oak Lane in Pine Dale has to go to Stand A. In fact, the expert is forced to give such a response because a more thoroughly researched analysis will most likely result in a definition of the relevant market that entails that Stand A did not commit an antitrust violation. After all, it seems that most consumers would find a substitute located nearby if Stand A tried to raise prices to a supracompetitive level. Clearly, the expert's initial assumption that Stand A's price cut constituted an antitrust violation has corrupted her analysis. Had she started by assuming only that the factual allegations in the complaint are true and then conducted the requisite studies, she would have discovered that the true relevant market is significantly broader than Brand-C hot dogs on Oak Lane in Pine Dale. A similar problem seems to have infected Landon's analysis.
At the Daubert hearing, the court specifically asked Corey's counsel about Landon's deposition testimony that he had assumed an antitrust violation prior to defining the relevant market. Corey's counsel noted that Landon is not an attorney and argued that Landon simply misspoke in his deposition. According to Corey's counsel, Landon assumed only that the factual allegations against Corey *1294 were true, which, as the court has already noted, is proper. The court, however, is not persuaded. After examining his report, rebuttal report, and his deposition testimony, the court finds that Landon did assume that there was an antitrust violation. First, on at least two separate occasions, Landon states explicitly that he began with the assumption that the alleged conduct of the defendants violated the antitrust laws. Second, looking at his testimony as a whole, that he began with the assumption that there was an antitrust violation is the best explanation as to why he did not do the required analysis. But even if he had not assumed that there was an antitrust violation, Landon's testimony is so deficient as to render it unreliable. Keeping in mind that the court will be applying Landon's analysis of the buyer-seller relationship, the court will now examine Landon's testimony.
In defining the relevant product market, Landon failed to meaningfully consider whether there were any substitute products for the service of managing the advertising in the Airport. At his deposition, the following exchange took place:
Q: Okay. Now in regard to the relevant market, there's a product component generally to relevant markets, correct?
A: Or service component.
Q: Product or service component.
A: Or service component. Yes, in this case it's the service of providing the required work in connection with advertising in the Atlanta Hartsfield Airport.
Q: Okay, and you would agree with me that in general productsโhow would you define competitive products in a given market?
A: By looking at the competitive products in the given market, but I don't know how I would do it until you tell me what market we're talking about.
Q: Well, would you agree that products generally are competitive if buyers view them as substitutes for each other?
A: Sure. In this case, the buyer is the Atlanta Hartsfield Airport, and the service being provided is the service of taking care of the advertising, and so the people that identify themselves by bidding would be the competitors to provide that service.
Q: All right. And did youโwould you agree that if a product is aโif product A is a substitute for product B, then both of those products A and B are in the same market?
A: Well, it depends on what kind of substitute it is, whether it's a close substitute or a distant substitute, but possibly. I mean, it wouldโ
Q: Say a close substitute?
A: Close substitute then it might be in the relevant market.
Q: Okay. And generally in economic terms, this is something that needs to be analyzed in determining what a market is, correct?
A: Sure, and it wasโand it was, in fact, analyzed in this case. The people who presented themselves for the bidding were the people who thought they were substitutes for each other in providing the service. Each of them presumably thought they could do a better job than the other, and they went through a bidding process to determine what the City of Atlanta thought.
Q: What, if anything did you do to determine what substitutes there *1295 are in the market for the product or service?
A: I didn't have to in this case. They self-identified by bidding.
Deposition of John H. Landon at 199-200 [Doc. No. 496-4] (emphasis added). Landon admits unequivocally that he did nothing to determine whether there were substitutes for what he has identified as the relevant product, viz., the management of advertising at the Airport. Corey attempts to explain this deficiency by arguing that Landon did not identify any reasonable substitutes because there are none. Furthermore, since there are no substitutes, it was not possible for Landon to conduct any cross-elasticity studies. In addition, Corey claims that such studies are not necessary "when the boundaries of an antitrust market can be determined by examining practical indicia such as the product's unique and distinct uses, qualities, price, price sensitivity, production facilities, customers, and vendors." Brief in Response at 14 [Doc. No. 497] (citing U.S. Anchor Manufacturing, Inc. v. Rule Industries, Inc., 7 F.3d 986, 995 (11th Cir.1993)). It is true that in U.S. Anchor Manufacturing the Eleventh Circuit stated, "`Reliable measures of supply and demand elasticities provide the most accurate estimates of relevant markets. However, it is ordinarily quite difficult to measure cross-elasticities of supply and demand accurately. Therefore, it is usually necessary to consider other factors that can serve as useful surrogates for cross-elasticity data. . . .'" U.S. Anchor, 7 F.3d at 995 (quoting International Telephone & Telegraph, 104 F.T.C. at 409). But the Eleventh Circuit then stated that, in defining the relevant product market, one such useful surrogate is "`the extent to which consumers consider various categories of sellers . . . as substitutes.'" Id. (quoting International Telephone and Telegraph, 104 F.T.C. at 409). Thus, even though it may be difficult or impossible to conduct studies of and collect data directly related to cross-elasticities of supply and demand, possible substitutes should still be considered and analyzed in defining the relevant product market.
Furthermore, there is no indication that Landon examined any of the practical indicia suggested by Corey. He simply concluded that there were no substitutes without explaining what studies he did or what analyses he conducted in order to reach his conclusion. The closest Landon comes to providing such an explanation is when he states, "The contract at issue is a service contract. For the purchaser [the City], the only options are those available through the bidding process for which there are limited eligible parties, in fact there were only three responses to Atlanta's RFP." Expert Rebuttal Report of John D. Landon at 8 [Doc. No. 497-4]. Landon goes on to state, "There are no substitutes for this service [the management of the advertising at the Airport] to the purchaser, the City of Atlanta." Id. [Doc. No. 497-4]. But, as the Third Circuit has pointed out, the test for a relevant product market is not products that are reasonably interchangeable by a particular individual, but products that are "`reasonably interchangeable by consumers for the same purposes.'" Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430, 438 (3rd Cir.1997) (quoting United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 395, 76 S. Ct. 994, 100 L. Ed. 1264 (1956)). Thus, Landon erred by basing his conclusion on only whether the City had any available substitutes once it issued the RFP. Instead, Landon should have examined what products consumers (in this case, cities) would consider to be reasonably interchangeable for management services of airport advertising in general. It appears that Landon's assumption *1296 that there has been an antitrust violation led him to fail to consider possible substitutes and led him to define the relevant market in an unsuitably narrow fashion. Once one approaches the issue from the appropriate level of generality, it is at least possible that there are products that are reasonably interchangeable by cities for the same purpose as the product identified by Landon, and Landon could have conducted some sort of study and analysis in order to rule out these possible substitutes or to include them in the definition of the relevant market.
For example, one possible substitute that the private defendants suggest is the use of in-house personnel by a city to administer advertising in its airport, i.e., a city could have a current city department directly sell space to advertisers or create a new department to do so. On this view, the purpose of the management services is to generate revenue through advertising in an airport. Landon's own expert report supports that the use of in-house personnel to administer the advertising in airports is at least a possible substitute product. In his report, Landon states, "While the City of Atlanta could elect to establish a department to coordinate advertising services, it has, wisely elected not do so." Expert Report of John H. Landon at 6 [Doc. No. 497-2]. Thus, Landon acknowledges that the Airport could use in-house staff as a possible alternative, though he claims that such a choice would not be a wise one. But, of course, Landon's opinion that the choice would not be wise shows that there is such a choice.
In addition, Table 1 from Landon's expert report indicates that at least one city (Austin, Texas) does in fact itself administer the advertising of its Airport. Expert Report of John H. Landon at 7 [Doc. No. 497-2]. Thus, Landon could have investigated and determined what factors led Austin to choose to use its own staff to coordinate the advertising at its airport rather than purchase the management services of a private company. It could be that Austin considered paying a company to manage advertising in its airport, but it decided that it could save money by using in-house staff to sell the advertising. If cost drove its decision, this would suggest that cities do consider the use of in-house staff to be a reasonable substitute for paying a private company for the management of its airport advertising. But Landon did not give this possibility any serious consideration, much less conduct any studies or analyses to evaluate it.
Table 1 also indicates that the airport at Los Angeles does not have advertising at all. Id. [Doc. No. 497-2]. It could be that Los Angeles determined that the price of hiring a company to manage advertising at an airport is higher than the price of hiring a company to manage some other revenue generator, such as vending machines (the price being the difference between total revenue and the percentage paid to the management company). Thus, perhaps Los Angeles decided to purchase the management of vending machines rather than the management of advertising. On this view, the purpose of the management services is to generate money for the city, and so one would have to evaluate whether there are other services that cities could purchase instead of the management of advertising in response to price increases and whether cities generally consider these services as reasonably interchangeable with the services at issue. Landon, however, failed to do any such investigations or analyses in this case.
Of course, all of this is mere speculation and armchair economic analysis, and perhaps there are no reasonable substitutes for the product identified by Landon. But that is not the point; after all, the court is *1297 not the expert witness. The point is that it seems that it is at least possible that there are substitutes for the management of the advertising at the Airport, and, by his own admission, Landon failed to do anything (other than look at who bid for the contract) to determine and consider possible substitutes for that product at issue. Thus, Landon has failed to establish that he used a reliable method in giving his definition of the relevant product market.
Landon's definition of the relevant geographic market is similarly lacking. Landon defines the relevant geographic market as the Airport. For example, in his rebuttal report, Landon states, "Atlanta has but one international airport, in which the services at issue can be supplied, and those services could only be supplied by a very limited universe of potential contractors having the ability to satisfy the requirements of the RFP and having participated in the bid process." Rebuttal Report of John D. Landon at 8 [Doc. No. 497-4]. It is true that the management services are to be performed at the Airport, but that is irrelevant since the relevant geographic area in this case is the area of effective competition in which Clear Channel operates and to which the City can practicably turn for the supply of management services. It is obvious that Clear Channel operates outside of the Airport and competes with companies that are not located in the Airport. It is also obvious that the City could look for companies outside of the Airport itself to come to the Airport and manage the advertising there. Initially, at least, it seems that the relevant geographic market could be national or even global. Clear Channel has its headquarters in Chicago, yet it competed for the Airport advertising contract. Furthermore, the Airport could hire a company that is located anywhere in the world to come to the Airport and manage its advertising. But perhaps it is cheaper and more convenient for the Airport to hire only management companies in the United States or in the South or perhaps an even smaller subregion. Regardless, Landon should have considered these factors (such as the effective area in which Clear Channel operates and competes and the City's preferences due to price and convenience) rather than simply defining the relevant geographic market as the area where the services are to be performed. Again, it seems that Landon's assumption that there has been an antitrust violation has led him to fail to do any serious analysis of the relevant factors and ultimately to give a much too narrow definition of the relevant geographic market.
In an attempt to overcome these deficiencies, Corey argues that Landon utilized a reliable methodology by applying the United States Department of Justice Merger Guidelines ("Merger Guidelines"). In his report, Landon quotes in part the following section of the Merger Guidelines:
A market is defined as a product or group of products and a geographic area in which it is produced or sold such that a hypothetical profit-maximizing firm, not subject to price regulation, that was the only present and future producer or seller of these products in that area likely would impose at least a "small but significant and nontransitory" increase in price, assuming the terms of sale of all other products are held constant.
Expert Report of John H. Landon at 4 (quoting Merger Guidelines at ง 1.0) [Doc. No. 496-5].[4] Landon next states, *1298 "Under the [Merger Guidelines], a `natural monopoly' is, by definition, the relevant market for evaluating anti-competitive conduct. The coordination of advertising services at the Atlanta Hartsfield airport is a natural monopoly, and thus is the relevant market for evaluating the antitrust claims of Corey Airport Services." Id. [Doc. No. 496-5]. Landon then proceeds to explain that a natural monopoly is "a market in which for technical or social reasons, there cannot be more [than] one efficient provider of a good or service" and argues that the management services of the Airport advertising is a natural monopoly. Id. at 5 [Doc. No. 496-5]. Even assuming, however, that Landon's analysis of natural monopolies is correct and his conclusion that the management of the advertising at the Airport constitutes a natural monopoly under his definition, it is still not clear how Landon has applied the Merger Guidelines in this case, much less that he has done so reliably.
First, according to the Merger Guidelines, consideration and analysis of possible substitute products and consumer responses to price increases are essential in defining the relevant market. For example, the Merger Guidelines state, "Market definition focuses solely on demand substitution factorsโi.e., possible consumer responses." Merger Guidelines at ง 1.0. Additionally, in the paragraph after the text quoted by Landon, the Merger Guidelines state:
In determining whether a hypothetical monopolist would be in a position to exercise market power, it is necessary to evaluate the likely demand responses of consumers to a price increase. A price increase could be made unprofitable by consumers either switching to other products or switching to the same product produced by firms at other locations. The nature and magnitude of these two types of demand responses respectively determine the scope of the product market and the geographic market.
Merger Guidelines at ง 1.0. Thus, according to the Merger Guidelines, in defining the scope of the relevant market, one must consider possible substitute products and consumer responses to price increases; Landon did neither.
Second, the Merger Guidelines do not mention natural monopolies, and it seems that, even if the management of the Airport advertising is a natural monopoly, such a natural monopoly is not by definition the relevant market for evaluating allegations of antitrust violations. Recall the definition of a market set forth in the Merger Guidelines and quoted by both Landon in his report and by Corey in its brief. Suppose that a profit-maximizing firm that has been awarded the Airport advertising contract attempted to impose "a small but significant and nontransitory" increase in the price it charged for managing the Airport advertising. The firm could not unilaterally impose such an increase in price because it would be contractually bound to charge the amount set forth in the bid accepted by the City and specified in the contract. Furthermore, though the term of the contract would be for five years, the 2002 RFP grants the City the right to terminate the contract for convenience. 2002 RFP งง 2.14 and 2.11.7 [Doc. No. 465-26] ("The CITY shall have the right to terminate any of the work under the Contract, in whole or, from time to time, in part, at its convenience by giving CONSULTANT five (5) days prior written notice of its election to do so, by specifying the extent to which the performance *1299 of the work terminated, and by specifying the effective date of such termination."). Accordingly, in response to any attempted price increase, the City, as the consumer, could terminate the contract for default or convenience and look for an alternative substitute product such as the ones the court examined previously or look for an alternative supplier of management services for the Airport advertising. Thus, even if the management services of the Airport advertising constitute a natural monopoly as Landon claims, such a natural monopoly is not by definition the relevant market under the Merger Guidelines.
Once one considers substitute products and the City's possible responses to any significant and nontransitory price increases, it seems clear that the relevant market is much broader than Landon claims. Again, the court acknowledges that this analysis might be incorrect, but, since Landon is Corey's proffered expert, the burden is on Corey and Landon to show that Landon has employed a reliable method. If he has applied the Merger Guidelines, then Landon must still show that he has done so reliably, and his citation to the Merger Guidelines without explaining how he applied them is insufficient to rehabilitate his lack of analysis in defining the relevant product and geographic markets. Therefore, the court finds that Corey and Landon have failed to demonstrate that Landon has employed a reliable methodology in defining the relevant market in this case. In addition, since Landon's testimony as to harm to competition is based on his definition of the relevant market, Landon cannot establish that he employed a reliable methodology in giving his opinion with regard to harm to competition.
c. Whether the Expert Testimony Will Assist the Trier of Fact
Given that the court has found serious flaws with the reliability of Landon's methodology, the court also finds that Landon's testimony would not assist the trier of fact. To the extent that his testimony is relevant, its probative value is far outweighed by the possibility that the trier of fact would give too much credence to his testimony given that he has a Ph.D. in economics, even though Landon cannot demonstrate that he used a reliable methodology in reaching his conclusions.
To summarize, it appears that, though he is qualified to give expert testimony, Landon's assumption that the factual allegations Corey makes in its complaint constitute an antitrust violation caused him to fail to do the requisite analysis in order to reliably support his definition of the relevant market. In defining the relevant product market, Landon failed to identify and consider possible substitutes for the product he identified, i.e., the management of advertising at the Airport. In defining the relevant geographic market, Landon failed to consider alternative sources of supply from which the City could obtain this product or reasonable substitutes of that product. In addition, it is not clear how Landon applied the Merger Guidelines, and it appears that he actually misapplied them in this case. Finally, because Landon has failed to establish that he employed a reliable methodology in reaching his conclusions, the risk that his testimony might mislead or confuse the trier of fact outweighs any probative value that his testimony might have. For all of these reasons, the court grants the private defendants' motion to exclude the testimony of Landon [Doc. No. 496].
2. Corey's Antitrust Claims
The court notes that it held in a previous order that Corey has antitrust standing to bring this suit [Doc. No. 89 at 48]. The *1300 private defendants urge the court to reconsider its prior ruling on the grounds that (1) the court was ruling on a motion to dismiss, and, therefore, the court's decision was limited to the pleadings and assumed Corey's allegations to be true and (2) there is recent case law that supports the private defendants' argument that Corey lacks antitrust standing. These arguments are not without force, but the court does not need to reconsider whether Corey has antitrust standing. Even assuming for the purpose of summary judgment that Corey has such standing, the court concludes that all of Corey's antitrust claims ultimately fail. For this reason, the court will assume that Corey has antitrust standing for the purpose of the motions for summary judgment and will rule on the merits of Corey's claim. See Levine v. Central Florida Medical Affiliates, 72 F.3d 1538, 1545 (11th Cir.1996) (declining to decide whether the plaintiff had antitrust standing because, even assuming that the plaintiff did have standing, the plaintiff had failed to establish any violation of the antitrust laws). The court will now consider Corey's antitrust claims in light of its exclusion of Landon's testimony and Corey's failure to define the relevant market.
a. Conspiracy to Unreasonably Restrain Trade
Section One of the Sherman Act states, "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." 15 U.S.C. ง 1. Sections Four and Sixteen of the Clayton Act provide the basis for bringing civil lawsuits by those who are damaged due to violations of Section One. 15 U.S.C. งง 15 and 26; see also McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552, 1555 (11th Cir. 1992). In order to establish a Section One claim, a plaintiff must prove (1) that there is an agreement to restrain trade and (2) that the agreement is unreasonable. Levine, 72 F.3d at 1545. "In identifying which agreements unreasonably restrain competition, the Supreme Court has held that certain kinds of agreements are unreasonable per se, such as agreements among direct competitors to fix prices or to restrict output." Id. at 1545-46. If the allegedly unreasonable agreement at issue does not fall within one of the per se categories, then the court analyzes the agreement under the `rule of reason.' Id. at 1546. Under the rule of reason analysis, courts "engage in a comprehensive analysis of the agreement's purpose and effect to determine whether it unreasonably restrains competition." Id. In this case, the private defendants claim that Corey does not allege any conduct that falls within a per se category, and, therefore, the court should apply the rule of reason analysis. Corey does not dispute this claim. Accordingly, the court will apply the rule of reason.
The court notes that, in its previous order ruling on the motions to dismiss, the court held that all of Corey's antitrust claims required that Corey sufficiently plead a relevant market. [Doc. No. at 37]. In support of its holding, the court cited, among other cases, All Care Nursing Services, Inc. v. High Tech Staffing Services, Inc., 135 F.3d 740, 749 (11th Cir.1998), in which the Eleventh Circuit held:
"[T]o satisfy the rule of reason, the plaintiff must prove that the [conduct] had an adverse effect on competition." Coffey v. Healthtrust, Inc., 955 F.2d 1388, 1392 (10th Cir.1992). But, competition occurs only in a market. Thus, "before we can reach the larger question of whether [defendants] violated any of the antitrust laws, we must confront the threshold problem of defining the relevant market." Thompson v. Metropolitan *1301 Multi-List, Inc., 934 F.2d 1566, 1572 (11th Cir.1991).
In a footnote, the Eleventh Circuit then held:
Because this case is subject to the rule of reason and because of the importance of relevant market and market power in evaluating the reasonableness of a purported restraint, the district court's jury instructions and interrogatories directing that the jurors must find for defendants if plaintiffs failed to establish the relevant market were proper applications of the law governing this case.
Id. at n. 15. Though the parties have not raised this issue, the court's research has shown that, contrary to All Care Nursing, it is not the case that the definition of the relevant market is a threshold issue for all Section One claims analyzed under the rule of reason. The court has not found any case law in which the Eleventh Circuit explicitly overruled the holding in All Care Nursing quoted above, but Supreme Court and Eleventh Circuit precedent (including Eleventh Circuit precedent subsequent to All Care Nursing) have held that a plaintiff does not have to prove the relevant market for Section One claims in which the plaintiff can show actual, as compared to potential, detrimental effects to competition. See, e.g., FTC v. Indiana Federation of Dentists, 476 U.S. 447, 106 S. Ct. 2009, 90 L. Ed. 2d 445 (1986); Levine, 72 F.3d at 1545 (11th Cir.1996); Spanish Broadcasting System of Florida, Inc. v. Clear Channel Communications, Inc., 376 F.3d 1065, 1071-72 (11th Cir.2004); Schering-Plough Corp. v. FTC, 402 F.3d 1056, 1065 (11th Cir.2005). Because the court rejected the private defendants' argument that Corey's Section One claim should be dismissed because Corey failed to sufficiently plead a relevant market, the court's application of the All Care Nursing standard did not prejudice either party. For the purposes of summary judgment, however, the court will now apply the test set forth by the Eleventh Circuit in Levine and developed in subsequent Eleventh Circuit cases, a test which the Eleventh Circuit based on the Supreme Court's ruling in Indiana Dentists.
"Under Eleventh Circuit case law, alleged Section One agreements analyzed under the rule of reason require a plaintiff `to prove (1) the anticompetitive effect of the defendant's conduct on the relevant market, and (2) that the defendant's conduct has no pro-competitive benefit or justification.'" Spanish Broadcasting, 376 F.3d at 1071 (quoting Levine, 72 F.3d at 1551). "In alleging the anticompetitive effect of the defendant's conduct, an antitrust plaintiff must show harm to competition rather than to competitors. That is, the anticompetitive effects are measured by their impact on the market rather than by their impact on competitors." Id. at 1071-72 (internal quotations omitted). In order to prove that there has been an anticompetitive effect on the market, a plaintiff "may either prove that the defendants' behavior had an `actual detrimental effect' on competition, or that the behavior had `the potential for genuine adverse effects on competition.'" Levine, 72 F.3d at 1551 (quoting Indiana Dentists, 476 U.S. at 460-61, 106 S. Ct. 2009).
In setting forth the above test in Levine for whether there has been an anticompetitive effect on the market, the Eleventh Circuit relied upon the case of Indiana Dentists, 476 U.S. 447, 106 S. Ct. 2009. See Spanish Broadcasting, 376 F.3d at 1073 (citing Levine, 72 F.3d at 1551). In Levine, the Eleventh Circuit held that, in order to show that the conduct at issue had the potential for adverse effects on competition, a plaintiff must, as a threshold requirement, define the relevant market. Levine, 72 F.3d at 1551; Spanish *1302 Broadcasting, 376 F.3d at 1073. The Eleventh Circuit has noted, however, that Indiana Dentists carved out an exception to the requirement that a plaintiff must define the relevant market and prove market power, and it appears that this exception applies when a plaintiff can show actual detrimental effects on competition. Schering-Plough Corp., 402 F.3d at 1065.
Since the court has excluded the testimony of Landon and since the definition of the relevant market must be based on expert testimony, Corey cannot establish a relevant market. And since Corey cannot prove the relevant market, Corey cannot establish the potential for adverse effects on the market. Thus, unless Corey can provide sufficient evidence of actual detrimental effects on competition, Corey's Section One claim must fail. For this reason, the court will now examine Indiana Dentists in closer detail in order to see whether Corey has offered evidence of actual anticompetitive effects sufficient to withstand summary judgment.
In Indiana Dentists, an association of dentists issued a rule requiring its members to refuse to comply with insurance companies' requests to submit x-rays with insurance claim forms. 476 U.S. at 449, 106 S. Ct. 2009. In response to the demands of policyholders, dental health insurers had begun to offer plans in which payment of benefits was limited to "the least expensive yet adequate treatment" based on the individual patient. These "alternative benefits" plans required that the insurer evaluate the diagnosis and recommendation of the treating dentist. In order to conduct these investigations, the insurers began to frequently request that dentists submit dental x-rays along with their claim forms. Many dentists viewed this review by insurance companies as threatening their professional independence and income. Id. One group of such dentists formed the Indiana Federation of Dentists and promulgated a rule for its members that forbade them from complying with the insurance companies' requests to submit x-rays with claim forms. Id. at 451, 106 S. Ct. 2009. The Federation had less than 100 members, but its membership was highly concentrated in three Indiana communities, and two in particular. The Federation was able to enlist almost 100% of the dentists in one of those communities and approximately 67% in another. In those areas, the Federation was successful in enforcing its rule against submitting x-rays with claims forms. Id.
The Federal Trade Commission ("FTC") objected to the actions taken by the Federation and issued a complaint against it. After lengthy proceedings, including a full evidentiary hearing, the FTC held that the Federation had engaged in an unfair method of competition in violation of Section 5 of the Federal Trade Commission Act by implementing and enforcing the rule forbidding its members from complying with insurers' requests to submit x-rays with insurance claim forms. Accordingly, the FTC ordered the Federation to cease and desist its efforts to enforce its rule or otherwise organize dentists to resist the insurers requests for x-rays. The FTC made its ruling on the basis that the dental association's implementation and enforcement of its rule constituted a conspiracy to unreasonably restrain trade and thus was illegal under the standards developed by the Supreme Court for judging such restraints in light of Section 1 of the Sherman Act. Id. at 451-52, 106 S. Ct. 2009. The Federation appealed the decision of the FTC, and the Seventh Circuit Court of Appeals vacated the order on the ground that the decision was not sufficiently supported by the evidence. Id. at 453, 106 S. Ct. 2009. The Seventh Circuit held, among other things, that the Commission *1303 had failed to give a precise definition of the market in which the Federation was alleged to have restrained trade and it failed to establish that the Federation had sufficient market power to restrain competition in that market. Id.
On appeal to the Supreme Court, the Federation again argued that the FTC's conclusion that it had engaged in an unreasonable restraint of trade was erroneous as a matter of law because the FTC had failed to sufficiently define the market. Id. at 460, 106 S. Ct. 2009. The Supreme Court rejected this argument and held the FTC's "failure to engage in detailed economic analysis" did not vitiate its finding that the challenged conduct constituted an unreasonable restraint of trade under the rule of reason analysis. Id. The Supreme Court noted that the FTC had found that the Federation constituted heavy majorities of the practicing dentists in two of the local communities and that, in those areas, insurers were unable to obtain compliance with their requests over a period of years. The Supreme Court then held, "Since the purpose of the inquiries into market definition and market power is to determine whether an arrangement has the potential for genuine adverse effects on competition, proof of actual detrimental effects, such as a reduction of output, can obviate the need for an inquiry into market power, which is but a surrogate for detrimental effects." Id. at 460-61, 106 S. Ct. 2009 (internal quotations omitted). The court went on to hold, "[T]he finding of actual, sustained adverse effects on competition in those areas where [Federation] dentists predominated, viewed in light of the reality that markets for dental services tend to be relatively localized, is legally sufficient to support a finding that the challenged restraint was unreasonable even in the absence of elaborate market analysis." Id. at 461, 106 S. Ct. 2009. Thus, the Supreme Court carved its exception very narrowly and limited it to cases where a plaintiff (or the FTC) can show actual, sustained adverse effects on competition. In this case, however, Corey has failed to provide such evidence.
As the court has already held, Landon's testimony regarding harm to competition is based on his definition of the relevant market. Since his definition of the relevant market is unreliable and has therefore been excluded, Landon's testimony regarding harm to the relevant market has also been excluded. Thus, the best evidence presented by Corey of actual harm to competition is an email indicating that JCDecaux, an airport advertising company, chose not to compete in the 2002 RFP process because it believed that the City was content with Clear Channel and was not looking to change to another company. Ex. 32 to Plaintiff's Statement of Facts. The email also indicates that JCDecaux formed this belief because of the terms of the 2002 RFP and the way in which the City conducted the bidding process (especially the failure of the City to timely respond to questions posed by JCDecaux). Id. But a lone email indicating the loss of a single competitor in a single bidding process that took place for a rather short duration of time does not mean that there has been actual, sustained harm to competition.
In Indiana Dentists, the FTC found that in the areas where the Federation held power, the Federation was successful in enforcing its rule over a period of years, such that dental insurers were unable to obtain the compliance of the area dentists for those years in submitting x-rays along with claim forms. 476 U.S. at 460, 106 S. Ct. 2009. On those facts, the Supreme Court affirmed the FTC's holding that the Federation's rule was an unreasonable restraint on trade, even though the FTC had failed to give a detailed economic analysis *1304 of the relevant market. In the case at hand, however, Corey has failed as a matter of law to provide sufficient evidence such that the trier of fact could reach a similar finding of actual, sustained harm to the market. Taking the evidence presented in the light most favorable to Corey, the court concludes that, at best, one possible competitor, JCDecaux, chose not to participate in the 2002 RFP process and that Corey, as an individual competitor, may have been harmed as a result of the conduct at issue. But the evidence does not show that there has been sustained, actual detrimental effects on the market itself. Because Corey cannot show either actual detrimental effects on competition nor can it show potential detrimental effects on competition, Corey's Section One claim must fail. Accordingly, the court grants the private defendants' motions for summary judgment as to these claims.
b. Monopolization and Attempted Monopolization
Corey also alleges that the private defendants monopolized and attempted to monopolize the relevant market in violation of Section Two of the Sherman Antitrust Act. Again, the private defendants argue, among other things, that Corey has failed to establish the relevant market and that the definition of the relevant market is crucial to Corey's monopolization and attempted monopolization claims.
Section Two of the Sherman Act states, "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony. . . ." Again, Sections Four and Sixteen of the Clayton Act provide the basis for bringing civil lawsuits by those who are damaged due to violations of Section Two of the Sherman Act. 15 U.S.C. งง 15 and 26; see also McGuire Oil, 958 F.2d 1552 at 1555.
"The offense of monopoly under ง 2 of the Sherman Act has two elements: (1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S. Ct. 1698, 16 L. Ed. 2d 778 (1966); see also Morris Communications Corp. v. PGA Tour, Inc., 364 F.3d 1288, 1293 (11th Cir.2004). The Supreme Court has held that it "is generally required that to demonstrate attempted monopolization a plaintiff must prove (1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power." Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 457, 113 S. Ct. 884, 122 L. Ed. 2d 247 (1993); see also Levine, 72 F.3d at 1555 (holding that, in order to establish a claim "for attempted monopolization, a plaintiff must show (1) an intent to bring about a monopoly and (2) a dangerous probability of success.").
The Supreme Court held it is "beyond doubt" that a claim for monopolization "requires proof of market power in a relevant market" and that "demonstrating the dangerous probability of monopolization in an attempt case also requires inquiry into the relevant product and geographic market and the defendant's economic power in that market." Spectrum Sports, 506 U.S. at 457, 113 S. Ct. 884. In this case, Corey has failed to define the relevant market. Thus, Corey cannot establish its claim for monopolization, nor can it establish its claim for attempted monopolization. Accordingly, the court grants the private defendants' *1305 motions for summary judgment as to these claims.
c. Conspiracy to Monopolize
As the court has already noted, in its previous order denying the private defendants' motion to dismiss, the court held that all of Corey's antitrust claims required that Corey sufficiently plead a relevant market. The court cited Bill Beasley Farms, Inc. v. Hubbard Farms, 695 F.2d 1341, 1343 (11th Cir. 1983), for the proposition, "In the Eleventh Circuit, it is clear that definition of a relevant market is a necessary element of a claim for conspiracy to monopolize." [Doc. No. 89 at 41]. Though the parties have not raised this issue, the court, having conducted further research, comes to the conclusion that this issue is not as clear as it might first seem.
In Levine, the plaintiff alleged, among other things, that one of the defendants monopolized, attempted to monopolize, and conspired with the other defendants to monopolize the local market of certain physician medical services in violation of Section Two of the Sherman Act. 72 F.3d at 1555 (citing 15 U.S.C. ง 2). The district court granted summary judgment, and the plaintiff appealed. In addressing the plaintiff's Section Two claims, the Eleventh Circuit began by setting forth the elements for a claim of monopoly, which includes showing that the defendant had market power, and the elements for a claim of attempted monopolization, which includes showing that the defendant has at least a dangerous probability of successfully monopolizing the market because it is close to achieving monopoly power. Levine, 72 F.3d at 1555. The Eleventh Circuit then held:
A claim for conspiracy to monopolize, on the other hand, does not require a showing of monopoly power. Instead, a plaintiff proves a section 2 conspiracy to monopolize by showing: "(1) concerted action deliberately entered into with the specific intent of achieving a monopoly; and (2) the commission of at least one overt act in furtherance of the conspiracy."
Id. at 1556 (quoting Todorov v. DCH Healthcare Authority, 921 F.2d 1438, 1460 n. 35 (11th Cir.1991)). The Eleventh Circuit went on to hold that the plaintiff had failed to adequately define the relevant market and had failed to show that the defendants possessed or were close to possessing market power and that these failures were fatal to his claim for monopolization and attempted monopolization. Levine, 72 F.3d at 1556. But, rather than affirm the district court's grant of summary judgment on the plaintiff's claim of conspiracy to monopolize on the same grounds, the Eleventh Circuit held that the plaintiff had failed to present sufficient evidence that the defendants had possessed the specific intent to monopolize, and, therefore, the plaintiff's claim for conspiracy to monopolize also failed. Id. Based on the Eleventh Circuit's ruling in Levine, it would seem that the definition of the relevant market is not essential for a claim of conspiracy to monopolize. A subsequent Eleventh Circuit case, however, casts doubt on this conclusion.
In Spanish Broadcasting, the plaintiff initially alleged in its first amended complaint, among other things, that the defendants had attempted to monopolize the advertising purchased in the major Spanish-language radio markets in the United States. 376 F.3d at 1070. The district court dismissed with prejudice the plaintiff's first amended complaint on the grounds that the plaintiff had failed to meet the minimum pleading requirements for its antitrust claims. Id. The plaintiff then filed a motion for reconsideration and for leave to amend along with a proposed *1306 second amended complaint that included the additional claim that the defendants conspired to monopolize the market for Spanish-language radio advertising. After considering the second amended complaint, the district court held that the plaintiff still failed to meet the minimum requirements for stating an antitrust claim. Accordingly, the district court denied the motion, and the plaintiff appealed. Id. at 1077-78.
After upholding the dismissal of the plaintiff's first amended complaint, the Eleventh Circuit reviewed the district court's denial of the motion for leave to amend. The Eleventh Circuit began by stating, "The Supreme Court has emphasized that leave to amend must be granted absent a specific, significant reason for denial. . . ." Id. at 1077 (citing Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222). The Eleventh Circuit therefore concluded that its review of the denial of the motion for leave to amend turned on its "assessment of whether the proposed complaint indeed failed to state a claim for relief." Spanish Broadcasting, 376 F.3d at 1078. In addressing the claim for conspiracy to monopolize, the court held:
Conspiracy under Eleventh Circuit law requires (1) an agreement in restraint of trade (2) deliberately entered into with the specific intent of achieving a monopoly (3) which could have had an anticompetitive effect and (4) at least one overt act in furtherance of the conspiracy. U.S. Anchor, 7 F.3d at 1001. As with the Section One allegations in the first complaint, we agree with the district court that SBS has not alleged facts that would support a finding of "anticompetitive effect" in the relevant market. That is, we still do not believe that [the plaintiff] has alleged facts sufficient to support a finding of harm to competition.
Spanish Broadcasting, 376 F.3d at 1078. (emphasis added). Thus, the Eleventh Circuit affirmed the district court's denial of the motion for leave to amend. Id. at 1079.
The holding in Levine is difficult to reconcile with the holding in Spanish Broadcasting. On the one hand, the Eleventh Circuit held that the plaintiff in Levine had failed to adequately define the relevant market and had failed to establish the requisite market power of the defendants and that these failures were fatal to the plaintiff's claims of monopolization and attempted monopolization. The Eleventh Circuit went to some lengths to point out that the plaintiff's claim for conspiracy to monopolize did not require a showing of market power before then holding that the plaintiff's conspiracy claim failed for a different reason, namely, the plaintiff had failed to present any evidence that the defendants had possessed the specific intent to monopolize, which is an essential element of a conspiracy to monopolize.
On the other hand, in Spanish Broadcasting, the Eleventh Circuit held that the plaintiff had failed to state a claim for conspiracy to monopolize because the plaintiff had failed to allege facts sufficient to support a finding of anticompetitive effect in the relevant market, viz., harm to competition. If a plaintiff does not have to establish the relevant market in order to prevail on a conspiracy to monopolize claim, then it seems that the plaintiff in Spanish Broadcasting would not have had to plead facts that would support a finding of anticompetitive effect in the relevant market in order to state a claim since the plaintiff would not have had to ultimately prove the relevant market to win its claim. But if a plaintiff has to sufficiently plead facts that would support a finding of anticompetitive effects in the relevant market in order to state a claim for conspiracy to *1307 monopolize, then it seems that the Eleventh Circuit could have held in Levine that the plaintiff's conspiracy claim failed for one of the same reasons that his claims for monopolization and attempted monopolization failed, i.e., because he had failed to adequately define the relevant market. Since the Eleventh Circuit did not mention the failure to define the relevant market in relation to the conspiracy claim and ultimately held that the conspiracy claim failed because the plaintiff had failed to present evidence of the specific intent to monopolize, it seems that the Eleventh Circuit did not conclude that the failure to adequately define the relevant market was fatal to his claim for conspiracy to monopolize. For these reasons, it is not clear to this court whether a plaintiff has to present sufficient evidence to support his definition of the relevant market in order to survive a motion for summary judgment as to a claim for conspiracy to monopolize.
Keeping in mind this apparent tension in the relevant Eleventh Circuit precedent, the court holds that Corey's claim for conspiracy to monopolize must fail nevertheless. If a plaintiff must adequately define the relevant market in order to withstand a motion for summary judgment, then Corey's claim must fail because the court has excluded the testimony of Landon. If, however, a plaintiff is not required to provide an adequate definition of the relevant market, Corey's claim still must fail because Corey has not produced sufficient evidence to support a finding that the private defendants had the specific intent of achieving a monopoly, which is an essential element of a conspiracy claim. Accordingly, the court grants the private defendants' motions for summary judgment as to Corey's claim for conspiracy to monopolize.
In summary, the court grants the private defendants' motions for summary judgment as to all of Corey's antitrust claims set forth in Counts IV and V in its Second Amended Complaint.
Conclusion
For the foregoing reasons, the court:
(1) GRANTS IN PART AND DENIES IN PART Barbara Fouch's motion for summary judgment [Doc. No. 447];
(2) DENIES the City of Atlanta's motion for summary judgment [Doc. No. 448];
(3) DENIES Ben DeCosta's motion for summary judgment [Doc. No. 450];
(4) DENIES Adam L. Smith's motion for summary judgment [Doc. No. 451];
(5) DENIES Carolyn Chavis's motion for summary judgment [Doc. No. 453];
(6) DENIES Kyle Mastin's motion for summary judgment [Doc. No. 457];
(7) DENIES Hubert Owen's motion for summary judgment [Doc. No. 459];
(8) GRANTS IN PART AND DENIES IN PART James Riley, Michael Riley, and John McNeany's motion for summary judgment [Doc. No. 463];
(9) GRANTS IN PART AND DENIES IN PART Clear Channel Airports of Georgia, Inc. and Clear Channel Outdoor, Inc.'s motion for summary judgment [Doc. No. 464];
(10) GRANTS Clear Channel Airports of Georgia, Inc. and Clear Channel Outdoor, Inc.'s motion in limine to exclude evidence and testimony of plaintiff's proffered expert witness John H. Landon [Doc. No. 496];
(11) GRANTS IN PART AND DENIES IN PART the joint motion to exclude the testimony of Brett Katzman [Doc. No. 571];
(12) GRANTS IN PART AND DENIES IN PART the joint motion to *1308 strike the declaration of Steve Moody [Doc. No. 575]; and
(13) DISMISSES AS MOOT Barbara Fouch's motion to strike the declaration of Steve Moody [Doc. No. 576].
NOTES
[1] As soon will become evident, the court has need to refer to the various defendants individually and in certain groups. Accordingly, unless otherwise noted, the court will refer: (1) to the City of Atlanta as "the City"; (2) to DeCosta, Mastin, Owens, Smith, and Chavis as "the individual City defendants"; (3) to the City and the individual City defendants as "the City defendants"; (4) to Clear Channel Airports of Georgia, Inc. and Clear Channel Outdoor, Inc. as "Clear Channel"; and (5) to Clear Channel, J. Riley, M. Riley, McNeany, and Fouch as "the private defendants".
[2] The court notes that each of the individual City defendants has the same quote in a footnote in his or her brief.
[3] The Eleventh Circuit has also noted that the Supreme Court in Hope "chastised" it "for taking an unwarrantedly narrow view of the circumstances in which public officials can be held responsible for their constitutional violations." Holloman, 370 F.3d at 1276.
[4] Horizontal Merger Guidelines, United States Department of Justice and Federal Trade Commission. Issued April 2, 1992, revised April 8, 1997. Available at http://www. usdoj.gov/atr/public/guidelines/horiz_book/ hmg1.html | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260663/ | 123 Cal. Rptr. 2d 570 (2002)
101 Cal. App. 4th 79
The PEOPLE, Plaintiff and Respondent,
v.
Cesare CALABRESE, Defendant and Appellant.
No. G027096.
Court of Appeal, Fourth District, Division Three.
August 12, 2002.
Review Denied November 13, 2002.
*571 Susan S. Bauguess, Running Springs, under appointment by the Court of Appeal, for Defendant and Appellant.
Bill Lockyer, Attorney General, David P. Druliner, Chief Assistant Attorney General, Gary W. Schons, Assistant Attorney General, Laura Whitcomb Halgren, Rhonda L. Cartwright-Ladendorf and Sabrina Yolane Erwin, Deputy Attorneys General, for Plaintiff and Respondent.
Certified for Partial Publication.[*]
OPINION
FYBEL, J.
We hold:
First, the sealed transcript of the in camera proceedings in this case confirms the trial court was correct in refusing to reveal the confidential informant's identity and information, and confirms probable cause supported the search warrant.
Second, the California Constitution forbids suppression of evidence produced by the warrant because the Fourth Amendment to the United States Constitution, as interpreted by the United States Supreme Court, did not require the officers executing the search warrant to display the warrant or provide defendant a copy of it.
Third, Penal Code section 1202.45 requires imposition of a restitution fine when a prison sentence has been imposed, but execution of sentence has been suspended.
The trial court was therefore correct in denying defendant Cesare Calabrese's motion to quash the search warrant and to suppress evidence pursuant to Penal Code section 1538.5, and in imposing and suspending a $200 restitution fine under Penal Code section 1202.45. Accordingly, we affirm the judgment.
THE WARRANT, THE SEARCH, AND THE CHARGES
On January 15, 1999, Westminster Police Department Detective Michael Chapman *572 obtained a warrant to search Calabrese's pickup truck, person, and room at the Cypress Suites Motel. Judge David A. Thompson signed the warrant.
Narcotics investigator Gregory Jackson and several Westminster police officers executed the warrant the same day. Jackson watched Calabrese drive his truck out of the driveway of the Cypress Suites Motel. Jackson stopped Calabrese after following him for about half a mile and searched the truck pursuant to the search warrant. Jackson found a purple nylon tote bag tied to the hoses inside the truck's engine compartment. The tote bag contained 22.4 grams of a powdery/crystalline substance, a small package containing a usable quantity of marijuana, a .38 caliber snub revolver, a gram scale with residue on top, an empty Ziploc bag, a straw, a walkie-talkie, and binoculars. Jackson concluded the powdery substance and the residue on the scale were methamphetamine, the former intended for sale. He also found a pager attached to the sun visor over the driver's seat.
One of the officers conducted a patdown search of Calabrese and found a four-inch dagger hanging from his neck and, in his right front pocket, a glass pipe with residue in the bowl. The officers searched Calabrese's motel room and found a three-inch low-grade explosive device, two glass pipes, two hypodermic syringes, and a leather holster.
The evidence seized is within the scope of the warrant, and Calabrese does not assert otherwise.
The original warrant and return of property were filed on January 18, 1999, and they, along with the affidavit, were sealed on January 20. The court later unsealed the warrant.
Calabrese was charged with five counts: (1) sale/transportation of methamphetamine (Health & Saf.Code, § 11379, subd. (a)); (2) possession for sale of methamphetamine (Health & Saf.Code, § 11378); (3) carrying a dirk or dagger (Pen.Code, § 12020, subd. (a)); (4) possessing a smoking device (Health & Saf.Code, § 11364); and (5) possession of 28.5 grams or less of marijuana (Health & Saf.Code, § 11357, subd. (b)). Calabrese was charged with an enhancement as to counts 1 and 2 for having a firearm.
THE SUPPRESSION HEARING, GUILTY PLEA, AND SENTENCE
Calabrese pleaded not guilty. He moved to unseal the affidavit, quash or traverse the search warrant, and suppress the evidence seized during the search.
The court heard the motion on March 3, 2000. Following an in camera hearing pursuant to People v. Hobbs (1994) 7 Cal. 4th 948, 30 Cal. Rptr. 2d 651, 873 P.2d 1246 (Hobbs), the court released a substantial portion of the affidavit, but found the confidential informant had no discoverable information on the issue of guilt and refused to unseal the remainder. The court found no basis to quash or traverse the search warrant.
Defense counsel then requested an evidentiary hearing on the motion to suppress and informed the court he intended to examine one of the officers who executed the search warrant on the failure to show Calabrese the warrant or to give him a copy of it. The court denied the request, stating, "I will not permit you to exam[ine] the officer on that one issue. I will find that even if your client was not served with a copy of the warrant, suppression of the evidence is not mandated under controlling law." The court then denied the motion to suppress.
After the court denied the motion to suppress, Calabrese pleaded guilty to *573 counts 1, 2, 3, and 5 (the prosecution dismissed count 4) and admitted the enhancement. The court sentenced Calabrese to a term of two years on count 1, with a consecutive three-year term for the enhancement, and stayed sentence on counts 2 and 3. The court suspended execution of the prison sentence and placed Calabrese on probation subject to terms and certain conditions including 365 days in the county jail. The court imposed a $100 fine under count 5.
The court imposed a $200 restitution fine under Penal Code section 1202.4, subdivision (b), and imposed, then suspended, a $200 restitution fine under Penal Code section 1202.45. Calabrese timely appealed pursuant to Penal Code section 1538.5, subdivision (m).
DISCUSSION
I.[**]
II.
The California Constitution Forbids Suppression of Evidence Because the Fourth Amendment Did Not Require the Officers Executing the Search Warrant to Display the Warrant or Provide Calabrese a Copy of It.
Penal Code section 1538.5, subdivision (c) states, "[w]henever a search or seizure motion is made in the municipal or superior court as provided in this section, the judge or magistrate shall receive evidence on any issue of fact necessary to determine the motion." Calabrese argues the trial court violated this code section by denying him the opportunity to present evidence on the issue of the officer's failure to display the search warrant or provide him a copy of it. The officer's testimony would have been irrelevant, however, because the officers executing the search warrant were not required to display the warrant or give Calabrese a copy of it. Consequently, the California Constitution forbids suppression of evidence as a remedy for their failure to do so.
Since the passage of Proposition 8 in 1982 and its amendment of article I, section 28, subdivision (d) of the California Constitution, state and federal claims relating to exclusion of evidence based upon unreasonable search and seizure are measured by the same standard. (People v. Camacho (2000) 23 Cal. 4th 824, 830, 98 Cal. Rptr. 2d 232, 3 P.3d 878.) "`Our state Constitution thus forbids the courts to order the exclusion of evidence at trial as a remedy for an unreasonable search and seizure unless that remedy is required by the federal Constitution as interpreted by the United States Supreme Court.'" (Ibid., italics added, quoting In re Tyrell J. (1994) 8 Cal. 4th 68, 76, 32 Cal. Rptr. 2d 33, 876 P.2d 519.) We therefore turn to United States Supreme Court decisions to determine whether suppression was required in this case. (People v. McKay (2002) 27 Cal. 4th 601, 608, 117 Cal. Rptr. 2d 236, 41 P.3d 59 ["With the passage of Proposition 8, we are not free to exclude evidence merely because it was obtained in violation of some state statute or state constitutional provision"].)
The United States Supreme Court has not interpreted the Fourth Amendment to the United States Constitution as requiring the officer executing the search warrant to display the warrant or provide defendant a copy of it. (See West Covina v. Perkins (1999) 525 U.S. 234, 240, 246, fn. 1, 119 S. Ct. 678, 142 L. Ed. 2d 636 (cone. opn. of Thomas, J.); see also LaFave, Search and Seizure: A Treatise on the Fourth Amendment (3d ed.1996 & *574 2002 supp.) § 4.12 ["Whether failure to give notice of the contents of the warrant would, under any circumstances, rise to the level of a constitutional violation appears not to have been decided"].) The United States Supreme Court accordingly has not interpreted the Fourth Amendment as requiring suppression of evidence as a remedy for failure to display the warrant or provide defendant a copy of it. It is also appropriate to review California Supreme Court decisions (People v. Camacho, supra, 23 Cal.4th at p. 830, fn. 1, 98 Cal. Rptr. 2d 232, 3 P.3d 878), and we have found none requiring suppression. The California Constitution thus forbids suppression under the circumstances presented here. Any statute, rule, or intermediate appellate court decision requiring suppression would violate the California Constitution.
Absent such constitutional mandate, we nonetheless would refuse to order suppression because there is no California statutory requirement to exhibit the warrant or give the defendant a copy of it as a prerequisite to its execution. (People v. Rodrigues-Fernandez (1991) 235 Cal. App. 3d 543, 553, 286 Cal. Rptr. 700; Nunes v. Superior Court (1980) 100 Cal. App. 3d 915, 935-937, 161 Cal. Rptr. 351; see also United States v. Silva (9th Cir.2001) 247 F.3d 1051, 1058, fn. 4 ["In California, `there is no statutory or constitutional requirement that a search warrant be exhibited as a prerequisite to execute it'"].)
Calabrese argues People v. Rodrigues-Fernandez, supra, 235 Cal. App. 3d 543, 286 Cal. Rptr. 700 is distinguishable because the defendant in that case received a copy of the warrant and affidavit at the police station following his arrest. This distinction does not affect the holding of that case and is irrelevant to our analysis, which is grounded in the United States and California Constitutions.
Calabrese urges us to follow Federal Rules of Criminal Procedure, rule 41(d), which provides, in relevant part, "[t]he officer taking property under the warrant shall give to the person from whom or from whose premises the property was taken a copy of the warrant and a receipt for the property taken or shall leave the copy and receipt at the place from which the property was taken...." (Fed. Rules Crim.Proc., rule 41(d), 18 U.S.C.) This rule does not apply to a warrant issued by a California court and executed by California peace officers. (United States v. Silva, supra, 247 F.3d at p. 1058, fn. 4.)
Calabrese argues Penal Code section 1535 is California's counterpart to Federal Rules of Criminal Procedure, rule 41(d) and, therefore, section 1535 should be interpreted to require the warrant be displayed and defendant be provided a copy of it. Section 1535 states: "When the officer takes property under the warrant, he must give a receipt for the property taken (specifying it in detail) to the person from whom it was taken by him, or in whose possession it was found; or, in the absence of any person, he must leave it in the place where he found the property." Section 1535 is unambiguous. It only requires the officer executing the search warrant to give a receipt for property taken and cannot be read to impose the additional requirement of displaying the warrant or giving defendant a copy of it. In any case, interpreting section 1535 to require suppression of evidence for the officer's failure to display or provide Calabrese a copy of the warrant would violate Proposition 8's mandate.
Because the officers were not required to display the warrant or give Calabrese a copy of it, the trial court was correct to deny the motion to suppress without permitting *575 Calabrese to offer evidence on that issue.
III.
Penal Code Section 1202.45 Requires a Restitution Fine When a Prison Sentence Is Imposed But Its Execution Is Suspended.
Penal Code section 1202.45 provides: "In every case where a person is convicted of a crime and whose sentence includes a period of parole, the court shall at the time of imposing the restitution fine pursuant to subdivision (b) of Section 1202.4, assess an additional restitution fine in the same amount as that imposed pursuant to subdivision (b) of Section 1202.4. This additional restitution fine shall be suspended unless the person's parole is revoked." Pursuant to this section, the trial court imposed a $200 parole revocation fine but suspended it unless parole is revoked.
Citing the Second District's decision in People v. Hannah (1999) 73 Cal. App. 4th 270, 86 Cal. Rptr. 2d 395, Calabrese argues the court erred by imposing the restitution fine because he was placed on probation and therefore was not subject to a parole period. In People v. Hannah the court concluded Penal Code section 1202.45 does not apply when the defendant is placed on probation. (Id. at pp. 274-275, 86 Cal. Rptr. 2d 395.) The Hannah court reasoned that due to the suspension of execution of sentence the defendant was "presently not subject to a parole period and will not be absent a revocation of her probation and commitment to prison." (Id. at p. 274, 86 Cal. Rptr. 2d 395.)
In People v. Tye (2000) 83 Cal. App. 4th 1398, 100 Cal. Rptr. 2d 507, Division Five of the First District explained People v. Hannah, supra, 73 Cal. App. 4th 270, 86 Cal. Rptr. 2d 395, was incorrectly decided. The Tye court commented: "The conclusion reached by the Hannah court makes sense when probation is granted upon suspension of imposition of sentence, for in that situation the defendant has not been sentenced to a prison term. When, however, as here, a prison sentence, including a period of parole, has been imposed and only the execution has been suspended, we conclude that Penal Code section 1202.45 applies and the restitution fine may properly be imposed." (People v. Tye, supra, 83 Cal.App.4th at p. 1401, 100 Cal. Rptr. 2d 507, fn. omitted.)
We agree with People v. Tye. When execution of sentence is suspended, the defendant's sentence comes within Penal Code section 1202.45 because, if ultimately executed, the sentence "includes a period of parole" which could be revoked. (People v. Tye, supra, 83 Cal.App.4th at p. 1401, 100 Cal. Rptr. 2d 507.) Under section 1202.45, the fine is suspended until defendant's parole is ultimately revoked. Thus, as the Tye court observed, "the statute contemplates that the conditions for the restitution fine may never materialize." (Id. at pp. 1401-1402, 100 Cal. Rptr. 2d 507.) Division Five of the First District recently confirmed its decision in Tye to hold that a parole revocation fine under section 1202.45 may "be imposed at the time of sentencing where imposition of sentence was suspended at conviction and the parole revocation fine was not imposed at the same time as the mandatory restitution fine under Penal Code section 1202.4." (People v. Andrade (2002) 100 Cal. App. 4th 351, 353, 121 Cal. Rptr. 2d 923.)
We hold when a prison sentence has been imposed, and only the execution of sentence has been suspended, Penal Code section 1202.45 requires imposition of a restitution fine, which then "shall be suspended unless the person's parole is revoked." (Pen.Code, § 1202.45.) Calabrese *576 was sentenced to a total of five years in prison. Only the execution of sentence was suspended. The trial court was therefore correct in imposing and suspending a $200 restitution fine under section 1202.45.
DISPOSITION
The judgment is affirmed.
WE CONCUR: O'LEARY, Acting P.J., and ARONSON, J.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of part I of the Discussion.
[**] See footnote *, ante. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3069678/ | Opinion filed April 2, 2015
In The
Eleventh Court of Appeals
___________
No. 11-14-00265-CV
___________
IN THE INTEREST OF A.S., A CHILD
On Appeal from the 29th District Court
Palo Pinto County, Texas
Trial Court Cause No. C45586
MEMORANDUM OPINION
The trial court entered an order that terminated the parental rights of the
parents of A.S. The mother appeals, and on appeal, she presents two issues in
which she challenges the sufficiency of the evidence. We affirm.
Termination of parental rights must be supported by clear and convincing
evidence. TEX. FAM. CODE ANN. § 161.001 (West 2014). To determine on appeal
if the evidence is legally sufficient in a parental termination case, we review all of
the evidence in the light most favorable to the finding and determine whether a
rational trier of fact could have formed a firm belief or conviction that its finding
was true. In re J.P.B., 180 S.W.3d 570, 573 (Tex. 2005). To determine if the
evidence is factually sufficient, we give due deference to the finding and determine
whether, on the entire record, a factfinder could reasonably form a firm belief or
conviction about the truth of the allegations against the parent. In re C.H., 89
S.W.3d 17, 25–26 (Tex. 2002).
To terminate parental rights, it must be shown by clear and convincing
evidence that the parent has committed one of the acts listed in
Section 161.001(1)(A)–(T) and that termination is in the best interest of the child.
FAM. § 161.001. In this case, the trial court found that Appellant committed two of
the acts listed in Section 161.001(1). The trial court found that Appellant had
engaged in conduct or knowingly placed the child with persons who engaged in
conduct that endangered the child’s physical or emotional well-being and that
Appellant had failed to comply with the provisions of a court order that set out the
actions necessary for her to obtain the return of the child. See id. § 161.001(1)(E),
(O).
Appellant does not challenge the finding made pursuant to Section
161.001(1)(E). Accordingly, we need not address Appellant’s first issue, in which
she challenges the finding made pursuant to subsection (O), because the
unchallenged finding under subsection (E) is sufficient to support termination as
long as termination is in the child’s best interest. See id. § 161.001. The trial court
found that termination was in the child’s best interest. See id. § 161.001(2).
Appellant challenges that finding in her second issue. She asserts that the
evidence is legally and factually insufficient to overcome the presumption that it is
in the child’s best interest to maintain the parent-child relationship. With respect
to the best interest of a child, no unique set of factors need be proved. In re C.J.O.,
325 S.W.3d 261, 266 (Tex. App.—Eastland 2010, pet. denied). But courts may
use the non-exhaustive Holley factors to shape their analysis. Holley v. Adams,
2
544 S.W.2d 367, 371–72 (Tex. 1976). These include, but are not limited to, (1) the
desires of the child, (2) the emotional and physical needs of the child now and in
the future, (3) the emotional and physical danger to the child now and in the future,
(4) the parental abilities of the individuals seeking custody, (5) the programs
available to assist these individuals to promote the best interest of the child, (6) the
plans for the child by these individuals or by the agency seeking custody, (7) the
stability of the home or proposed placement, (8) the acts or omissions of the parent
that may indicate that the existing parent-child relationship is not a proper one, and
(9) any excuse for the acts or omissions of the parent. Id. Additionally, evidence
that proves one or more statutory grounds for termination may also constitute
evidence illustrating that termination is in the child’s best interest. C.J.O., 325
S.W.3d at 266.
The Department of Family and Protective Services became involved with
A.S. when he was an infant. At three months old, A.S. was first diagnosed by
Texas Children’s Hospital as a failure-to-thrive infant. Appellant left the Conroe
area mid-case after the Department had opened a case there and had begun an
investigation. One day after Appellant moved to Palo Pinto County, the
Department received an intake that indicated that A.S. was severely underweight.
A.S. was seven months old at the time and, upon being seen by a doctor, was
immediately admitted to Cook Children’s Hospital for failure to thrive, which was
determined to be an “intentional failure to thrive.” Appellant was not feeding A.S.
as much as she claimed to be, and Appellant was aware that A.S. had severe acid
reflux, which required medication. A.S. spent ten days in Cook Children’s
Hospital. At eight months old, A.S.’s weight was in the “one percentile” range, but
Appellant failed to understand how emaciated or sick A.S. was.
In addition to A.S. being severely underweight, the Department presented
evidence that serious domestic violence occurred between A.S.’s parents. The
3
father was not cooperative with the Department, and every drug test performed by
the father was positive for methamphetamine. The record also showed that
Appellant was unable to provide a safe environment for A.S. and that Appellant
had lived in eight different locations while the conservatorship case was pending.
Appellant’s older child, who was placed with grandparents, had been in seven
different schools between kindergarten and second grade. The conservatorship
caseworker testified that the older child had been subjected to domestic violence
and that Appellant had medical problems that affected her ability to take care of
A.S. and to be present at some of the scheduled visitations with A.S.
Although there was evidence that Appellant loved A.S., there was also
evidence that A.S. did not have a strong bond with Appellant and that Appellant
lacked the skills necessary to parent him. During this case, A.S. was placed in an
adoptive placement, and he thrived there. A.S. was doing well on his medications
but was still developmentally delayed at the time of the termination hearing. The
Department’s goal for A.S. was for him to be adopted by his current placement
where, according to the caseworker, A.S. will be able to grow up in a family with
parents that will care for him and make sure that he receives necessary medications
for his acid reflux so that he will continue to thrive. The Department and the
child’s guardian ad litem both recommended that Appellant’s parental rights to
A.S. be terminated. They testified that termination would be in A.S.’s best interest.
Based upon the Holley factors and the evidence in the record, we cannot
hold that the trial court’s best interest finding is not supported by clear and
convincing evidence. The trial court could reasonably have formed a firm belief or
conviction that it would be in A.S.’s best interest for Appellant’s parental rights to
be terminated. The evidence is both legally and factually sufficient to support the
trial court’s best interest finding. Appellant’s second issue is overruled.
4
We affirm the trial court’s order of termination.
JOHN M. BAILEY
JUSTICE
April 2, 2015
Panel consists of: Wright, C.J.,
Willson, J., and Bailey, J.
5 | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2260590/ | 549 A.2d 365 (1988)
Robert C.G. HOTTENTOT
v.
MID-MAINE MEDICAL CENTER.
Supreme Judicial Court of Maine.
Argued June 17, 1988.
Decided October 21, 1988.
*366 Martin L. Wilk (orally), Eaton, Peabody, Bradford & Veague, Brunswick, for plaintiff.
George Z. Singal (orally), Sean F. Faircloth, Gross, Minsky, Mogul & Singal, Bangor, for defendant.
Before McKUSICK, C.J., and ROBERTS, WATHEN, GLASSMAN, SCOLNIK,[*] CLIFFORD and HORNBY, JJ.
WATHEN, Justice.
Plaintiff Robert C.G. Hottentot appeals from an order of the Superior Court (Kennebec County, Brennan, J.) granting summary judgment to defendant Mid-Maine Medical Center. The Superior Court found no basis for reviewing the staffing decision of a private, non-profit hospital. Finding no error we affirm the judgment.
Plaintiff is an osteopathic orthopedic surgeon practicing in Waterville. He is fully licensed by the State of Maine and is a member of the medical staff at both Sebasticook Valley Hospital (Pittsfield) and Waterville Osteopathic Hospital. For a time he was Chief of Surgery at Waterville Osteopathic. Dr. Hottentot has applied twice for surgical staff privileges at Mid-Maine Medical Center. His most recent application was rejected because he did not meet the requirements of the Hospital's Rule D-1. This Rule requires that an applicant for surgical staff privileges "must be qualified for examination by the American Board of Surgery or one of its sub-specialty boards or be so certified ...." In order to take the American Board of Surgery examination, a physician must first serve a residency program approved by that Board. Dr. Hottentot's residencies do not qualify because they were served primarily at osteopathic institutions.[1] Three osteopathic physicians have qualified under the Rule and been admitted to staff privileges at the Hospital.
Dr. Hottentot brought a seven-count complaint against the Mid-Maine Medical Center seeking consideration of his application without regard to Rule D-1. The complaint asserts that the Hospital's application of Rule D-1 violates regulations promulgated by the State Department of Human Services; that the Rule is contrary to the Hospital By-laws; that the decision to deny Dr. Hottentot's application is contrary to the By-laws; that Rule D-1 is arbitrary, capricious, unreasonable and unlawful because Dr. Hottentot's residency program was equivalent to the American Medical Association-approved residency program and he was excluded solely because it was osteopathic rather than allopathic; that the Hospital denied Dr. Hottentot a fair hearing in refusing to permit him to have counsel at the hearing or to present certain evidence and in failing to comply with its own time limits; that Rule D-1 and the decision to deny Dr. Hottentot's application violate State public policy and are unreasonable, arbitrary and capricious, as well as substantively irrational and procedurally unfair and unlawful; and that Dr. Hottentot's application should have been judged by the standards in effect in August of 1981 when he submitted an earlier application that was not approved.
After issue was joined both Dr. Hottentot and the Hospital filed motions for summary judgment with supporting affidavits. No genuine issue of material fact emerged. After a hearing, the Superior Court granted the Hospital's motion for summary judgment on the ground that it had no jurisdiction to review the staffing decisions of a private, non-profit hospital such as Mid-Maine Medical Center. It is from this decision that Dr. Hottentot has appealed.
VIOLATION OF STATE REGULATION
We address first the assertion that the Hospital's action violated a Department of Human Services regulation. The trial court did not explicitly rule on this issue. Its decision focused instead on whether Dr. *367 Hottentot has a common law cause of action, an issue whose resolution does not determine whether he has a claim for breach of the regulation. The parties have addressed in this Court the substance of the regulation without considering whether a physician may bring a private cause of action to enforce it. We conclude that enforcement is for the Department through licensing sanctions or prosecution, not a private physician in a civil action.
Maine statutes require that any person or association operating a hospital obtain a state license. 22 M.R.S.A. § 1811 (1980). Section 1817 permits the Department to condition the license upon meeting Department standards. Section 1820 grants the Department "power to establish reasonable standards ... which it finds to be necessary and in the public interest." The Department has in fact adopted regulations whose coverage extends to issues of medical staff qualifications.[2] They require that members of the medical staff be "qualified legally, professionally, and ethically for the positions to which they are appointed." The medical staff must have a system, "based on definite workable standards, to evaluate each applicant;" and privileges must be extended to "duly licensed qualified physicians" in the "appropriate fields... according to individual qualifications." Membership may not be "dependent solely upon certification, fellowship, or membership in a specialty, body or society." Instead, "[a]ll qualified candidates [must be] considered by the credentials committee." In the specific provision pointed to by Dr. Hottentot, the regulation requires that "[c]riteria for selection are individual character, competence, training, experience, and judgment."
Dr. Hottentot emphasizes the use of the word "individual" in the regulation, and maintains that a blanket requirement of eligibility for the ABS examination eliminates consideration of his individual characteristics. This argument is not persuasive. Obviously the Department did not intend to prohibit all credentials requirements (such as graduation from a medical school) and require a hospital to assess each applicant's medical knowledge independently of education and training. See Hull v. Board of Commissioners of Halifax Hospital Medical Center, 453 So.2d 519, 523 (Fla.Dist.Ct. App.1984) (statutory requirement of consideration on an individual basis requires only "that uniform standards be applied equally").
We are more troubled by the import of the Department's outright prohibition of criteria "dependent solely upon certification... in a specialty body" like the ABS. Neither party sheds any light on the scope of this provision and whether Rule D-1 is consistent with it.
Whatever its scope, however, the regulation is adopted pursuant to a licensing program. The sanction provided by statute for failure to comply with Department regulations is to make the hospital's license temporary or conditional and ultimately suspend or revoke it if necessary. 22 M.R. S.A. § 1817 (1980). In addition, criminal penalties are explicitly provided for violation of the Department's regulations. Id. at § 1821. We have stated in Larrabee v. Penobscot Frozen Foods, Inc., 486 A.2d 97, 101 (Me.1984), that we will recognize a private cause of action to enforce a statute only where the legislative intent to create such a remedy is clear. The same standard should apply to enforcement of regulations, and we see no such intent here. Instead the Legislature has clearly enumerated the sanctions: license conditions and suspensions and criminal penalties. Accordingly, if there has been any violation of the licensing standards, Dr. Hottentot should address his complaint to the Department rather than the courts.
COMMON LAW CAUSE OF ACTION
Alternatively, Dr. Hottentot asks us to recognize a physician's right to judicial review of a private hospital's decision to deny his or her application for staff privileges.[3] We have not previously recognized *368 such a cause of action with respect to any private institution hospitals, colleges, museums or otherwise.
Common law courts were traditionally reluctant to intervene in the affairs of nonprofit organizations or associations. See generally Chafee, The Internal Affairs of Associations Not for Profit, 43 Harv.L. Rev. 993 (1930). When they did intervene, it was often to deal with expulsions from membership and the theories for intervention failed to develop any coherent judicial approach. Id. Commentators, however, urged the courts to intervene because of the sometimes severe effects on individuals caused by the private organization's activities, particularly in instances where the organization had gained effective monopoly power over an area like a profession. See, e.g., Note, Judicial Control of Actions of Private Associations, 76 Harv.L.Rev. 983 (1963).
The clearest break with the traditional approach occurred in 1961 in a New Jersey Supreme Court decision, Falcone v. Middlesex Medical Society, 34 N.J. 582, 170 A.2d 791 (1961). Dr. Falcone lost his associate membership in the Middlesex Medical Society because he received his training at an osteopathic school. Without that membership, he could not obtain hospital privileges at any hospital within the county. The New Jersey Supreme Court announced that it would recognize a private cause of action to review such exclusions because they affected profoundly both a doctor's ability to practice and the public interest in health care. 170 A.2d at 799. In 1963, New Jersey extended this principle to the staff privilege decisions of a private nonprofit hospital, Greisman v. Newcomb Hospital, 40 N.J. 389, 192 A.2d 817 (1963). The court intervened in Greisman because of the hospital's dedication to the public, its receipt of public benefits and public donations, and its role as the only hospital in a metropolitan area (as a result of which it could limit severely a doctor's ability to practice medicine and a patient's choice of doctors). In both Falcone and Greisman the court announced that it would review such decisions for arbitrariness.
Subsequently, nine other jurisdictions followed suit in opening the staffing decisions of private hospitals to judicial review on a common law basis.[4] The trend, however, has not been uniform. In our neighboring jurisdictions, for example, Massachusetts adheres to the traditional view, see Bello v. South Shore Hospital, 384 Mass. 770, 429 N.E.2d 1011 (1981), whereas New Hampshire and Vermont follow Greisman at least in instances of dismissal. Bricker v. Sceva Speare Memorial Hospital, 111 N.H. 276, 281 A.2d 589 (1971); Woodard v. Porter Hospital, Inc., 125 Vt. 419, 217 A.2d 37 (1966). In the most recent case on this issue, the Illinois Supreme Court explicitly rejected the Greisman approach and adhered to the traditional doctrine of refusing to intervene. See Barrows v. Northwestern Memorial Hospital, 123 Ill. 2d 49, 121 Ill.Dec. 244, 525 N.E.2d 50 (1988).
The present case does not involve any monopolization of hospital access and we are simply not presented with the facts *369 that prompted the New Jersey Supreme Court to recognize a right of judicial review for the actions of private, non-profit hospitals. Judicial prudence dictates that we await the presentation of a truly comparable case before adopting, or rejecting, the Falcone-Greisman line of authority. On this record the Superior Court correctly found no basis for judicial review.[5]
The entry is:
JUDGMENT AFFIRMED.
ROBERTS, GLASSMAN, and CLIFFORD, JJ., concur.
HORNBY, Justice, with whom McKUSICK, Chief Justice, joins, concurring.
The central issue of this case is whether we should exercise our undoubted authority to create a new common law cause of action. Although I agree with the result the Court reaches, I do not agree that judicial prudence dictates that we examine the question solely in terms of whether our case matches New Jersey precedents.[1] Instead, I believe that we should make our own analysis within the context of circumstances here in Maine.
The Plaintiff's argument for a new cause of action recalls an earlier era when the courts created remedies against innkeepers and common carriers to ensure that they provided service without discrimination. See generally Wyman, The Law of the Public Callings as a Solution to the Trust Problem, 17 Harv.L.Rev. 156 (1904). In the case of innkeepers judicial intervention enabled travelers to find a secure lodging in situations where there was often only one inn available. In the case of common carriers a similar principle was at stake, namely, the carriers' ability to monopolize the means of shipping goods to market. But in both instances judicial intervention was necessary because these industries were then virtually unregulated.
Private hospitals in Maine in the 1980's are, by contrast, extensively regulated. The Maine Human Rights Act, for example, prohibits all forms of invidious discrimination on bases such as race, sex and religion. 5 M.R.S.A. §§ 4551-4632 (1979 & Supp.1987). This statute encompasses hospital admissions, employment decisions, and staff privileges. State antitrust law prohibits attempts to monopolize commerce. 10 M.R.S.A. § 1102 (1980). This statute likewise encompasses hospitals and prohibits any attempt to exclude competing doctors from economic benefits. Maine's hospital licensing statute specifically regulates the activities of hospitals, and does so in detail. 22 M.R.S.A. §§ 1811-1827 (1980 & Supp.1987). Under its authority the Department of Human Services has promulgated regulations imposing limits on what hospitals can do in the specific area of staffing privileges. (Portions of "Regulations for The License of General and Specialty Hospitals in the State of Maine" are quoted by the Court in discussing whether Dr. Hottentot has a cause of action for their breach.) Finally, many kinds of extensive and detailed regulations have been imposed on hospitals through the federal government and the state government as a result of the Medicare and Medicaid Programs. See, e.g., 42 U.S.C.A. §§ 1302, 1312, 1320a-2(a) (1983 & Supp.1988); 22 M.R.S.A. §§ 3172-3188 (1980 & Supp.1987).
I believe that we should examine the question whether to create a new cause of action against this background of extensive involvement by other agencies of government, a background that exists for hospitals both with monopoly power and without. Despite this extensive involvement, the legislative and executive branches have not been prompted in the area of medical staff exclusions to go beyond the licensing *370 standards described by the Court. I would rest our decision on that basis, not on the failure of proof of monopolization. When the legislature passes a statute, we do not lightly assume that a new cause of action should be recognized to enforce it. Instead we wait for an expression of intent that the statute contemplates a private cause of action. Larrabee v. Penobscot Frozen Foods, Inc., 486 A.2d 97, 101 (Me.1984). When the legislative and the executive branches have the extensive involvement they do in this area and yet have declined to provide judicial remedies for grievances such as Dr. Hottentot's, I believe that we should likewise stay our hand as a common law court. The appellate process provides only a limited insight into whether staff exclusion is a problem in Maine.
Consequently, I agree that we should not create a new cause of action, but conclude that it is ill-advised to approach the issue on a case-by-case basis, holding open the possibility of granting more protection in some cases than the legislature and executive have already provided. We do the practicing bar and its clients who pay the bills no service in fostering this sort of uncertainty. I would hold, therefore, that the common law cause of action does not exist in Maine, regardless of the monopoly factor.
As to the other issues, I concur fully in the Court's reasoning.
NOTES
[*] SCOLNIK, J., sat at oral argument and participated in the initial conference but resigned before this opinion was adopted.
[1] Portions perhaps as much as 1/3could qualify because they were served under allopathic physicians.
[2] Regulations for the License of General and Specialty Hospitals in the State of Maine, ch. IX.
[3] The parties agree that no constitutional principles are at stake, no judicial review of agency action, no contractual relationship between the physician and the hospital, and no monopolization of hospital access.
[4] See Storrs v. Lutheran Hospitals and Homes Society of America, Inc., 609 P.2d 24 (Alaska 1980); Homes v. Hoemako Hospital, 117 Ariz. 403, 573 P.2d 477 (1977); Anton v. San Antonio Community Hospital, 19 Cal.3d 802, 140 Cal. Rptr. 442, 567 P.2d 1162 (1977); Hawkins v. Kinsie, 540 P.2d 345 (Colo.1975); Silver v. Castle Memorial Hospital, 53 Haw. 475, 497 P.2d 564 (1972); Bricker v. Sceva Speare Memorial Hospital, 111 N.H. 276, 281 A.2d 589 (1971); Kelly v. St. Vincent Hospital, 102 N.M. 201, 692 P.2d 1350 (1984); Davidson v. Youngstown Hospital Association, 19 Ohio App.2d 246, 250 N.E.2d 892 (1969); Woodard v. Porter Hospital, Inc., 125 Vt. 419, 217 A.2d 37 (1966).
Several of these courts have called specific attention to the unique circumstances of their states. Rural environments with limited hospital choices pose severe limitations to both doctors and patients in gaining access to a hospital and, in these courts' views, justify judicial intervention to review for arbitrariness. See, e.g., Storrs v. Lutheran Hospitals and Homes Society of America, Inc., 609 P.2d at 28; Peterson v. Tuscon General Hospital, Inc., 114 Ariz. 66, 71, 559 P.2d 186, 191 (1977); Kelly v. St. Vincent Hospital, 102 N.M. at 203-04, 692 P.2d at 1352-53.
[5] In light of our holding and in light of the fact that Dr. Hottentot has no other relationship to this hospital we conclude that he has no standing to pursue the assertions made in the remaining Counts of his complaint.
[1] Other jurisdictions have created the cause of action without finding the monopoly power the Court deems critical. E.g., Anton v. San Antonio Community Hospital, 19 Cal.3d 802, 140 Cal. Rptr. 442, 567 P.2d 1162 (1977); Silver v. Castle Memorial Hospital, 53 Haw. 475, 497 P.2d 564 (1972); Hawkins v. Kinsie, 540 P.2d 345 (Colo. App.1975). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260598/ | 549 A.2d 311 (1988)
In re Melvin A. MARSHALL, Appellant.
No. 85-60.
District of Columbia Court of Appeals.
Argued July 5, 1988.
Decided September 2, 1988.[*]
*312 Melvin A. Marshall, pro se.
Dennis R. Carluzzo, Asst. U.S. Atty., with whom Joseph E. diGenova, U.S. Atty., at the time the brief was filed, and Michael W. Farrell, Asst. U.S. Atty., Washington, D.C., were on the brief, for appellee.
Before MACK, TERRY and STEADMAN, Associate Judges.
PER CURIAM:
Appellant Marshall, an attorney, was convicted of criminal contempt for not appearing in court when he was scheduled to do so. On appeal he maintains that it was unfair to use against him records of prior contempt proceedings that did not result in convictions. He makes several additional contentions, including an assertion that the trial court's actions reflected personal and racial bias. We find his claims of error to be without merit and affirm the judgment.
I
The finding of contempt was based on Marshall's failure to appear before Judge Schwelb on December 6, 1984, for a trial in a criminal case in which he represented the defendant. At about 1:00 p.m. that day he called the judge's chambers to say that he had overslept.[1] This incident troubled the judge because, in the only other case in which Marshall had represented a client before Judge Schwelb (excluding an earlier, unrelated contempt hearing involving Marshall himself),[2] Marshall had been late twice, once because he overslept. Further, on the day before the instant oversleeping episode, Marshall had had a hearing before Judge Hamilton in another contempt case for missing a court appearance (albeit not from oversleeping) before Judge Huhn.
At the hearing on the show cause order, Marshall testified that he woke up at approximately 1:00 p.m. on December 6, 1984. He felt nauseous and dizzy and was vomiting. When he called the court and spoke with the courtroom clerk, he was told that the case in which he was scheduled to appear "would be continued" to a date in January. Next he called the judge's chambers and "informed them that [he] was ill and that [he] had woke up at about 1:00 o'clock." He then took care of some other matters by telephone and went back to bed, concluding "that there was no need to come" to court. Marshall said that he intended no disrespect to the court, and he noted that the scheduled trial probably would have been postponed even if he had appeared.
Marshall acknowledged that he did not use an alarm clock because he normally woke up "at 7:30 or 6:00 o'clock every morning." When the court suggested that he get an alarm clock, he replied that he had tried one in the past, but without success. "I would get up before the alarm clock ... or else I'd sleep right through it. I know how my body works."
At the end of the hearing, the court found Marshall in contempt. It inferred the requisite willfulness from Marshall's recklessness in not having an alarm clock and from his history of missing several scheduled court appearances in the past.[3]*313 The court sentenced him to two weekends in jail and a fine of $300, but suspended execution of the jail sentence and all but $75 of the fine. In lieu of imprisonment, the court placed Marshall on three years' probation concurrent with that previously imposed by Judge Hamilton, with the condition that Marshall "carry out [his] obligations as an attorney in a professional manner." The court also earnestly recommended that Marshall get an alarm clock, but did not make his doing so a condition of probation.
Finally, there was a discussion of whether Marshall would be required to pay $10 in costs to the Crime Victims' Compensation Fund. See D.C.Code § 3-414 (1988). The court concluded that Marshall would have to pay $10 into the fund because he had been found guilty of a misdemeanor. However, "just to be fair," the court reduced the unsuspended part of the fine from $75 to $65. An order was later entered incorporating all of the court's rulings.
II
Marshall contends that it was improper for the court to use records of his prior episodes of being late to court against him because those episodes (with one exception, the matter before Judge Hamilton) did not result in convictions. We do not agree. Because the prior incidents were relevant to the critical issue of Marshall's willfulness in failing to appear in the instant case, they were properly considered as evidence of his contumacious intent. Compare Sykes v. United States, 144 U.S. App.D.C. 53, 55, 444 F.2d 928, 930 (1971) (attorney's failure to appear was "an isolated aberration"; contempt conviction reversed), with In re Niblack, 155 U.S.App. D.C. 174, 176, 476 F.2d 930, 932, cert. denied, 414 U.S. 909, 94 S.Ct. 229, 38 L.Ed.2d 147 (1973) (attorney's failure to appear "was not an isolated aberration but `had happened many times in the past'"; contempt conviction affirmed).
Marshall also asserts that he was unfairly put in the position of having to defend himself about the prior incidents because he had no notice that they would be used against him.[4] From the order to show cause, however, Marshall had notice that the subject of the contempt proceeding would be his failure to appear on December 6, and he knew (or should have known) from pertinent case law, such as Sykes and Niblack, supra, that evidence of similar lapses on other occasions was relevant and probative. See also In re Wiggins, 359 A.2d 579, 580-581 & n. 5 (D.C.1976) (contempt proceeding does not require all procedural safeguards of a criminal trial, although fundamental due process protections must be afforded).
Marshall maintains that there was error because the trial judge acted as a prosecutor, presenting the evidence of his earlier failures to appear in court on time. A judge, however, is not strictly prohibited from playing the role of prosecutor to some extent in a contempt case, particularly because the offense is against the court itself rather than the sovereign. In re Thompson, 419 A.2d 993, 994-995 (D.C.1980). Furthermore, the trial court was entitled to take judicial notice of Marshall's prior absences, even without formally admitting evidence of those episodes. See, e.g., Sherman v. Commission on Licensure to Practice the Healing Art, 407 A.2d 595, 598 n. 6 (D.C.1979) (appellate court may take judicial notice of plea of guilty to perjury charges relating to case on appeal); Coleman v. Burnett, 155 U.S.App.D.C. 302, 313, 477 F.2d 1187, 1198 (1973) (court has "power to judicially notice proceedings in related cases" (footnote omitted)); Green v. Warden, United States Penitentiary, 699 F.2d 364, 369 (7th Cir.), cert. denied, 461 U.S. 960, 103 S.Ct. 2436, 77 L.Ed.2d 1321 (1983) (court may take judicial notice of proceedings of its own and other court systems which are directly related to issues at hand); see also In re Evans, 450 A.2d 443, 444 (D.C.1982) (judicial notice of prior contempt proceeding described without comment).
*314 Marshall contends that the judge's taking notice of prior episodes of tardiness in a case tried before him, as well as his earlier finding of contempt in the child neglect case, see note 2, supra, demonstrated personal bias on the part of the judge. We disagree for at least two reasons. First, bias is not shown by taking judicial notice of relevant evidence. Second, the case law makes clear that a defendant's previous episodes of misconduct before a judge, even if one has resulted in a criminal contempt citation, do not render the judge unfit to try the defendant. In re Thompson, 454 A.2d 1324, 1327-1328 (D.C. 1982); see Gregory v. United States, 393 A.2d 132, 142-143 (D.C.1978). In this case, as in Thompson, 454 A.2d at 1328, there is no evidence suggesting that the judge was biased against Marshall; indeed, the judge affirmatively stated on the record that he had a "cordial relationship" with Marshall, notwithstanding his having previously held him in contempt.
Marshall next argues that a finding of contempt was not justified because his client's trial would have been continued even if he had been present, so that the trial court was not prejudiced by his absence. The law does not support his argument. Contempt of court for failure to appear is unaffected by whether the trial court is actually able to hear the case at the designated time. In re Gregory, 387 A.2d 720, 723 (D.C.1978).
Marshall contends that because he practices regularly in the Superior Court and appears there virtually every working day, one or two isolated instances of missing a court appearance cannot be the basis for a contempt citation. In fact, however, the record reveals that Marshall's missed court appearances are not so isolated as he suggests. More importantly, we cannot condone absences by lawyers simply because they have heavy caseloads. Indeed, if any conclusion is to be drawn from Marshall's frequent work in the Superior Court, it must be that he is sufficiently familiar with its workings to make timely court appearances.
Marshall also challenges the trial court's finding that his failure to have an alarm clock was reckless enough to allow willfulness to be inferred under Sykes, supra. We find nothing wrong with the trial court's reasoning, especially as it was buttressed by the uncontested fact that Marshall had overslept for a prior appearance before the same judge, as well as the records of his being late for other court appearances.
Marshall asserts that the trial court was guilty of racism, in large part because it "condemned" him, a man of African ancestry, "because he has not adopted the European mechanical device of an alarm clock to awaken him." This argument was not made below, and hence we decline to consider it. See, e.g., Adams v. United States, 302 A.2d 232, 234-235 (D.C.1973); Miller v. Avirom, 127 U.S.App.D.C. 367, 369-370, 384 F.2d 319, 321-322 (1967). Even if it had been made, we find Marshall's charge of racism to be without foundation. The record makes clear that the court's concern was not with Marshall's lack of an alarm clock, but with his failure to show up in court when he had a duty to do so. There is nothing in this record that hints of racial or ethnic bias on the part of the trial judge.
Similarly, Marshall's charge of disparate treatment is not supported by the record. His allegation that white lawyers are not held in contempt for failure to appear is unfounded. Indeed, there are several published opinions from this court affirming contempt convictions of white lawyers for failure to appear in court at scheduled times. E.g., In re Evans, supra; In re Gregory, supra; In re Schaeffer, 370 A.2d 1362 (D.C.1977); In re Hunt, 367 A.2d 155 (D.C.1976), cert. denied, 434 U.S. 817, 98 S.Ct. 54, 54 L.Ed.2d 72 (1977); In re Rosen, 315 A.2d 151 (D.C.), cert. denied, 419 U.S. 964, 95 S.Ct. 224, 42 L.Ed.2d 178 (1974).[5]
*315 Marshall's final argument is that the crime of contempt, which is against the court, not society, should not be subject to costs imposed for the Crime Victims' Compensation Fund. We disagree. Marshall's conviction of contempt was certainly for a criminal violation. Because contempt has no statutory penalty limit, see In re Evans, 411 A.2d 984, 990 (D.C.1980), we look to the penalty actually imposed, which here makes Marshall's offense a misdemeanor. See 18 U.S.C. § 1 (1982) (repealed effective November 1, 1987). The payment of $10 to the Victims' Fund was thus required by D.C.Code § 3-414 (1988).
The judgment of the Superior Court is accordingly
AFFIRMED.
NOTES
[*] This case was originally decided by an unpublished memorandum opinion and judgment. Appellant's motion for publication has been granted by the court.
[1] These facts were set forth in an order issued by Judge Schwelb on December 10, 1984, directing Marshall to show cause at a hearing three weeks thereafter why he should not be held in contempt.
[2] In that earlier case, Judge Schwelb had held Marshall in contempt for failing to obey a court order to represent without fee a parent in a child neglect action. See In re Marshall, 445 A.2d 5 (D.C.), cert. denied, 459 U.S. 875, 103 S.Ct. 166, 74 L.Ed.2d 137 (1982).
[3] The trial judge did not rely solely on Marshall's three instances of tardiness before him. The judge had also collected other court files relating to Marshall, and noted that he had been late to court on several occasions before other judges, with contempt charges dismissed after promises to improve his punctuality. Marshall argued that these were isolated incidents.
[4] Although Marshall said he was not aware of the disposition of his case with Judge Hamilton until the hearing before Judge Schwelb began, Judge Schwelb took note of Marshall's surprise.
[5] Marshall calls our attention to four cases (two involving himself and two involving his clients) and two disciplinary opinions concerning himself in support of his claim of racial bias. We decline to go beyond the four corners of the instant case in reaching our decision; but even if we were to do so, the cases to which he refers would not support his claim. We cannot discern any logical connection between those matters and the fairness of the hearing in the instant case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260601/ | 632 F.Supp. 937 (1986)
UNITED STATES of America, Plaintiff,
v.
Albert W. KOUBA, a/k/a Rusty Kouba, Defendant.
Crim. No. C1-85-21.
United States District Court, D. North Dakota, Southwestern Division.
February 18, 1986.
*938 *939 William A. Cohan, Denver, Colo., Irvin B. Nodland, Bismarck, N.D., for plaintiff.
Lynn E. Crooks, Asst. U.S. Atty., Fargo, N.D., for defendant.
ORDER
VAN SICKLE, Senior District Judge.
Defendant moves to dismiss the indictment on grounds of prosecutorial misconduct and abuse of the grand jury process. On January 18, 1986, Magistrate Dwight C.H. Kautzmann issued a memorandum and recommendation, recommending that the motion to dismiss the indictment be denied.
The time allowed for filing objections to that recommendation has expired, and this Court has considered the objections filed.
For the reasons set forth in the well reasoned opinion of Magistrate Kautzmann, which is attached hereto and made a part of this Order,
IT IS ORDERED that Defendant's motion to dismiss the indictment is denied.
MEMORANDUM AND RECOMMENDATION
Jan. 21, 1986
DWIGHT C.H. KAUTZMANN, United States Magistrate.
Following a two year grand jury investigation which involved the participation of three grand jury panels, the defendant was indicted on nine counts of aiding others in the preparation of false income tax returns, two counts of failing to file his own income tax returns, and one count of suborning perjury. The defendant has moved to dismiss the indictment because of prosecutorial misconduct and abuse of the grand jury process.
I. ISSUES
A. THE INTRODUCTION OF SUMMARIES OF PRIOR GRAND JURY TESTIMONY
The defendant alleges that the prosecution prepared summaries of testimony of witnesses and then introduced the same through Wendell Mongeon, a criminal investigator for the Internal Revenue Service.
It is true that on more than one occasion Mongeon did give summaries of testimony that had been given to prior grand juries. Further, it is true that Mongeon gave summaries of interviews he did of witnesses. *940 However, the record is devoid of any evidence that they were in fact misleading or that the grand jury based its indictment completely on Mongeon's summaries.
For example, in counts eight, nine, ten, eleven, and twelve of the indictment, the individuals Donald Stoltz, Dale Burkhart, William Bernhardt, and defendant Albert Kouba did appear personally in front of the grand jury and did testify. Even if Mongeon did give summaries to the later grand juries, the indicting grand jury would have access to the original transcripts. Therefore, as to those counts there is no merit to this claim.
At the November 22, 1985, hearing before the Magistrate on the motion to dismiss the indictment, no evidence was presented to show in fact that any of the summaries were misleading or perjured.
If it is the contention of the defendant that the evidence given in the summaries was misleading because supposedly exculpatory evidence was not included in the summaries, it is clear that the prosecution has no duty to present the same unless the evidence is "substantial evidence negating guilt." See United States v. Lame, 716 F.2d 515, 518 (8th Cir.1983); United States v. Levine, 700 F.2d 1176, 1181 (8th Cir. 1983).
From a review of the exhibits presented to your Magistrate, it appears that reading the evidence in the light most favorable to the defendant there is no "substantial evidence negating guilt" that the prosecution should have presented to the grand jury.
B. "SPECIAL AGENT OF THE GRAND JURY"
The defendant alleges that Mongeon improperly indicated to witnesses that he was a "special agent of the grand jury," and that this misconduct warrants dismissal of the indictment.
At the November 22, 1985 hearing, Mongeon admitted that he did in fact use the term "agent of the Grand Jury." However, the record reflects that he only did this once, during his interview of Anna Evinger. The defendant was not charged with any misconduct concerning the Anna Evinger tax return.
However, even if it was a calculated misstatement and improper conduct, there is no showing of prejudice to the defendant. [either in the totality of the evidence submitted to the grand jury and more specifically in that the grand jury returned no count in its bill of indictment relating to the defendant's conduct concerning Anna Evinger.] See United States v. Carr, 764 F.2d 496, 498 (8th Cir.1985) (although it is improper for a government investigator to use the phrase "agent of the grand jury" the indictment will not be dismissed unless the defendant shows he was prejudiced by the error).
The defendant relies upon the case of United States v. Kilpatrick, 594 F.Supp. 1324 (D.Colo.1984), to support his contention that Mongeon's representation that he was an agent of the grand jury requires dismissal of the indictment. Kilpatrick, however, is factually distinguishable from the instant case. In Kilpatrick the court found several acts of misconduct related to the use of the "special agents of the grand jury" in addition to the mere use of the phrase. See id. at 1328-1330.
C. OTHER PROSECUTORIAL MISCONDUCT AND ABUSE OF THE GRAND JURY
1. ADMINISTERING OATHS
The defense also alleges that Mongeon administered oaths before the grand jury. In reading all of the exhibits presented to your Magistrate, the facts prove just the opposite. Never in any of the transcripts does the record show that Mongeon did in fact administer oaths to any of the witnesses.
If the contention is that Mongeon during his investigation administered oaths to witnesses he was interviewing outside of the presence of the grand jury, it appears that he is authorized to do so by law. See 26 U.S.C. § 7622(a), (b). At the November 22, 1985, hearing, the defense presented no *941 evidence to show that Mongeon was not impowered to administer oaths pursuant to 26 U.S.C. § 7622.
2. GRAND JURY SUBPOENAS
The defendant contends that there were improprieties committed by the prosecutor in the use of grand jury subpoenas. First, defendant claims that the subpoenas were issued by the IRS. Second, he claims that Mongeon released witnesses from the subpoena. Finally, defendant contends that it was improper for the subpoenas to present an alternative method of compliance other than appearing in person before the grand jury. The court finds that there was no impropriety concerning the use of the grand jury supoenas.
The record is devoid of any evidence that the subpoenas were not issued properly. The record reflects that the subpoenas were properly issued by the clerk of court. The fact that some of the subpoenas were served by IRS agents is not improper. The record also lacks any evidence that the IRS agents released witnesses from the subpoenas; the record reflects that the grand jury performed this function.
The court finds that it was not improper for the subpoena to present the option of giving a statement and presenting documents to Mongeon in lieu of appearing before the grand jury. The alternative compliance provision was not improper because anyone who wanted to testify before the grand jury could do so, United States v. McClintock, 748 F.2d 1278, 1286 (9th Cir.1984), and it is an acceptable grand jury procedure for a subpoena duces tecum to be satisfied by delivery of the documents to investigative personnel, United States v. Phelps, 526 F.Supp. 686, 689 (W.D.Okla.1981).
3. CUSTODIAN OF GRAND JURY RECORDS
Defendant claims that prosecutorial misconduct and abuse of the grand jury exists because the prosecutor and Mongeon, the IRS agent assisting the prosecutor, retained physical custody of the records for the grand jury and because they opened mail addressed to the foreman of the grand jury. The court finds the allegations to be without merit.
It is proper for the prosecutor to screen documents, organize the presentation of documents, and to be the custodian of documents on behalf of the grand jury. See United States v. Universal Manufacturing Co., 525 F.2d 808, 812 (8th Cir. 1975); United States v. Mandel, 415 F.Supp. 1033, 1041 (D.Md.1976); Phelps, 526 F.Supp. at 689. In light of the prosecutor's function in screening and organizing the presentation of documents before the grand jury, the court finds that it was not improper for the prosecutor or the IRS agent assisting the prosecutor to open mail addressed to the grand jury. Moreover, no prejudice could have resulted from this practice as the record reflects that the contents of the mail opened by the prosecutor or the IRS agent were presented to the Grand Jury.
4. RULE 6(e) DISCLOSURE VIOLATION
Another allegation of prosecutorial misconduct and abuse of the grand jury is that the prosecution violated the secrecy of the grand jury proceedings by permitting the IRS to use grand jury materials to further civil tax cases and by disclosing to witnesses that Mr. Kouba was the target of the grand jury investigation.
Defendant made no showing at the November 22, 1985, hearing that any grand jury materials from this case have been used by the IRS in civil tax proceedings. The claim therefore lacks factual substantiation.
The court finds that even if the prosecution disclosed to witnesses that Mr. Kouba was the target of the grand jury investigation, it does not warrant a finding of a rule 6(e) violation for two reasons. First, any of the witnesses would have known Mr. Kouba was the target of the investigation based upon the nature of the questions being asked. Second, there is *942 evidence that Mr. Kouba called some of the witnesses and informed them that he was the target of the investigation. The court is unwilling to permit Mr. Kouba to complain that the government cannot do what he did himself as it concerns disclosure of the grand jury target.
There is ample evidence in the record that shows even if witnesses did not know Mr. Kouba was the target of the grand jury investigation that he was present in the halls when some of them reported to testify and further, he had communications with them concerning their rights as witnesses. Even wearing blinders this court can perceive the obvious, as no doubt did the witnesses.
The court finds that the government did not commit a rule 6(e) violation and that if such a violation occurred, it did not prejudice Mr. Kouba. The general remedy for a rule 6 disclosure violation is contempt and absent a showing of prejudice to the defendant and a pattern of prosecutorial misconduct a rule 6(e) violation does not warrant dismissal of an indictment. See United States v. Anderson, 577 F.Supp. 223, 230 (D.Wyo.1983).
5. RULE 6(d) UNAUTHORIZED PRESENCE VIOLATION
Next, the defendant contends that Mongeon was present in the grand jury room when Dale Burkhart and Albert Kouba testified before the grand jury. The record of the proceedings in both instances does not disclose that Mongeon was present. Further, at the hearing of November 22, 1985, no evidence was presented by the defense to show that Mongeon was in fact present.
Absent a clear indication in the transcripts of Mongeon's presence and absent any evidence by the defense to rebut Mongeon's denial that he was present at any of the grand jury proceedings while another witness was present (see Transcript of Hearing on Motion to Dismiss Indictment, November 22, 1985, p. 103), I conclude that it did not occur.
The defendant also argues that the prosecutor abused the grand jury process by making comments before the grand jury. The defendant also claims that by making the comments, the prosecutor became a witness before the grand jury and that his presence in the proceedings while witnesses testified violated rule 6(d).
The court finds that the prosecutor's comments were not overzealous. The court further finds that the prosecutor did not usurp the power of the grand jury to make independent findings by making comments and answering questions. There is nothing in the record submitted to the magistrate that indicates that the Grand Jury did not make its own independent findings. Finally, the court also finds that the prosecutor did not become a witness before the grand jury. Therefore, the court concludes that the prosecutor did not abuse the grand jury process or violate rule 6(d) by making comments before the grand jury.
6. WITNESS INVOCATION OF THE FIFTH AMENDMENT PRIVILEGE
The defendant also raises a claim that the prosecution engaged in misconduct and abused the grand jury process by calling witnesses solely for the purpose of having them invoke their fifth amendment privilege before the grand jury. Defendant's claim is without merit.
Defendant's reliance on Kilpatrick in support of this contention is misplaced. In Kilpatrick, the purpose of the prosecutor in calling witnesses knowing that they would invoke their fifth amendment privilege was not to lay a statutory predicate for immunizing the witnesses but to utilize the witnesses assertions to prejudice the grand jury against the targets. Kilpatrick, 594 F.Supp. at 1338. In the present case, by contrast, the record clearly reflects that the witnesses were called to lay the statutory foundation for immunizing the witnesses. There was no misconduct on the part of the prosecutor in calling witnesses before the grand jury knowing they would invoke their privilege against self-incrimination.
*943 D. JENCKS ACT, BRADY, AND RULE 16
1. JENCKS ACT MATERIAL
The defense claims that there was a violation of the Jencks Act, 18 U.S.C. § 3500, concerning the transcripts of the testimony of Mongeon on November 29, 1983, January 18, 1984, and August 16, 1984.
However, at trial Mongeon's testimony was summaries of previous witnesses called at trial. His testimony on direct was not specifically related to his testimony before the Grand Jury on November 29, 1983, January 18, 1984, June 20, 1984, and August 16, 1984.
That being the case it would appear that there is no merit to the claim of a Jencks Act violation. It should be noted that in a letter from Charles Miller to William Cohan dated October 10, 1985, Miller states:
"Except for the schedules, we have not included Mongeon's investigative report because we do not consider it to be 3500 material. In other words, we anticipate at this time the subject matter of Mongeon's testimony will be limited to areas which are covered by schedules and other material provided herewith. After Mr. Mongeon testifies, we will consider the report in light of Mr. Mongeon's specific testimony to determine whether or not there might possibly be something which would be considered 3500 material."
The transcript of November 29, 1983 concerns itself with Mongeon's testimony about Anna Evinger, Douglas Lutz, a Mr. Kramer, and Linus Evinger.
As previously stated, none of the indictment counts go to conduct concerning Anna Evinger, Linus Evinger, or Kramer, only as to Lutz.
Since the testimony at trial of Mongeon was a summary of other trial witnesses testimony it appears that this is not Jencks material.
In the transcript of January 18, 1985, Mongeon testifies as to Mr. Burkhart, Mr. Douglas Lutz, Mrs. Lutz, Mrs. Evinger, and subpoena returns.
Again, the indictment does not concern Evinger, but does concern itself with the others. Burkhart, Lutz, Mrs. Lutz, and Mrs. Evinger all testified at trial.
The summaries of Mongeon only dealt with their direct testimony at trial. It again appearing that this contention is not in fact Jencks Act material.
The same analysis as above is true as to the June 20, 1984 and August 16, 1984 appearances before the Grand Jury by Mongeon.
2. BRADY AND RULE 16 MATERIAL
The Donald Kramer transcript of November 29, 1983 has been read in total by your magistrate in light of the defendant's contention of a Brady violation.
The defendant claims that there is exculpatory evidence contained in Mr. Kramer's testimony.
Although Kramer testifies in so many words that he trusts Mr. Kouba and has placed his faith in God and that Mr. Kouba is a Christian man there is no evidence showing or tending to show exculpation as to any of the counts in the indictment.
At the best Kramer's evidence can be construed in certain areas as character evidence of Mr. Kouba. I find no violation of Brady after having read the Kramer testimony. It should be noted that Mr. Kouba did have people testify as to his character at trial and as such even if he would have used Mr. Kramer as a witness it would have been cumulative evidence in any event.
E. IMMUNITY
In the case before the bar, the defendant contends that the use of "pocket immunity" here should require the dismissal of the indictment.
The following witnesses were offered informal immunity but refused to testify without the formal grant of immunity pursuant to 18 U.S.C. §§ 6002 and 6003: Burkhart, Jesfjeld, Donald Stoltz, Joe Stoltz, Laufer, and William Bernhardt. The prosecution *944 did not force these people to testify nor did the prosecution attempt to require them to testify when they indicated they wanted to follow sections 6002 and 6003.
Mr. Kramer and Daniel Bernhardt testified with informal grants of immunity.
The following witnesses were not offered informal immunity or for that matter given either informal or formal immunity: Evinger, Lutz, Damian Bernhardt, and Lew Bernhardt.
The Supreme Court of the United States seems to frown upon informal grants of immunity: "We decline to extend the jurisdiction of courts to include prospective grants of use immunity in the absence of the formal request that the statute requires." United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 1244, 79 L.Ed.2d 552 (1984).
This court agrees with the Supreme Court and further notes that the most important function of a grand jury is to stand between the prosecutor and the suspect as unbiased evaluators of the evidence. If they do not perform this function then the procedure and the safeguard contained therein is at best a farce and at worst a kangaroo court.
The prosecution attempted, in this case, to use informal or "pocket immunity." However, the reality here is that formal immunity was granted to all those except Kramer and Daniel Bernhardt.
As to Kramer and Daniel Bernhardt, the immunity poses serious problems since it circumvents the statute and leaves an inadequate record of the scope of the immunity granted them. However, the problem it creates goes more to Kramer's and Daniel Bernhardt's fifth amendment rights than it does to Mr. Kouba and this case. But, informal immunity is a damnable practice and the use of it should stop both for the sake of the witnesses and the Grand Jury.
The two cases that the defense relies upon to justify a dismissal of the indictment based on the immunity issue are United States v. Anderson, 577 F.Supp. 223 (D.Wyo.1983) and United States v. Kilpatrick, 594 F.Supp. 1324 (D.Colo.1984).
In both Anderson and Kilpatrick the court used the totality of the circumstances in determining whether to dismiss the indictment. I apply the same test here and find that two informal grants of immunity in contravention of 18 U.S.C. §§ 6002 and 6003 are not sufficient to dismiss the indictment.
But, should the prosecution read this recommendation to mean informal immunity is condoned by the United States District Court for the District of North Dakota, they read it wrong. My recommendation is that the Court be ever vigilant to see that it never happens on a regular basis throughout a grand jury proceeding.
Based on the totality of the circumstances test, there is not a sufficient showing of prejudice to the defendant in that as to six of eight witnesses in question the formal grant of immunity was made and the prosecution did not violate the statute. Further, the record shows that the prosecutor involved here was not overzealous when it became evident to him that a formal grant of immunity was necessary.
II. CONCLUSION
The motion for dismissal of the indictment on the issues raised should be denied for the reasons set forth in the opinion above. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314505/ | 302 S.C. 423 (1990)
396 S.E.2d 827
The STATE, Respondent
v.
Barry CLARKE, Appellant.
23275
Supreme Court of South Carolina.
Heard March 6, 1990.
Decided October 8, 1990.
*424 William L. Runyon, Jr., Charleston, for appellant.
Atty. Gen. T. Travis Medlock, Asst. Attys. Gen. Harold M. Coombs, Jr., and Amie L. Clifford, Columbia, and Sol. Charles M. Condon, Charleston, for respondent.
Heard March 6, 1990.
Decided Oct. 8, 1990.
FINNEY, Justice:
Appellant Barry Clarke was convicted of unlawfully carrying a pistol. We affirm.
On March 21, 1988, a Charleston police officer stopped appellant's vehicle and cited him for changing lanes improperly pursuant to South Carolina Code Ann. § 56-5-1990 (Cum. Supp. 1987). During the stop, the officer observed a gun in a holster next to the driver's seat, and the appellant was charged with unlawfully carrying a pistol. The appellant was tried in municipal court for the traffic violation and acquitted. Subsequently, appellant went to trial in General Sessions Court for the unlawful carrying of a pistol. Before the jury was sworn, appellant moved to dismiss the weapons charge on the ground of double jeopardy. The trial court denied the motion, the trial proceeded and appellant was convicted.
First, appellant claims the trial court erred in instructing the jury on the statutory exceptions to the offense of carrying a weapon under S.C. Code § 16-23-20 (1976). Further, he argues that the burden of proof was upon the state to negate the applicability of any of the statutory exceptions. We disagree.
South Carolina law provides that it is unlawful for anyone to carry about the person, whether concealed or not, any pistol. S.C. Code Ann. § 16-23-20 (1976). The code lists twelve exceptions to this law.
*425 The general rule, when dealing with statutory crimes to which there are exceptions, is that the defendant "has the burden of excusing or justifying his act; and hence the burden may be on him to bring himself within an exception in the statute or to prove the issuance of a license or permit." 94 C.J.S. Weapons § 13 at 510 (1956). In prosecutions for carrying a concealed and unregistered pistol, some courts have held that a defendant has the burden of proving that he had a license to carry a pistol. Modesto v. State, 258 A. (2d) 287 (Del. 1969); Williams v. United States, 237 A. (2d) 539 (D.C. App. 1968).
Although this Court has not addressed the issue of which party bears the burden of proving the negative of these statutory exceptions, we are persuaded by State v. Bermudez, 297 S.C. 230, 376 S.E. (2d) 258 (1989), and State v. Solomon, 245 S.C. 550, 141 S.E. (2d) 818 (1965), appeal dismissed, 382 U.S. 204, 86 S.Ct. 396, 15 L.Ed. (2d) 270 (1965). These cases hold that an exception to a criminal offense shall be negatived in the indictment only if the language of the exception must be regarded as descriptive of the offense. If not, the exception is a matter of defense and need not be negatived in the indictment. The statute clearly states that it is unlawful to carry a pistol, and the exceptions are not descriptive of the offense. This Court holds the view that the state is not required to negate each exception to the offense of unlawfully carrying a pistol to sustain its burden of proof. The statutory exceptions are matters of defense for which a defendant bears the burden of production. We find that the trial court did not improperly instruct the jury, nor err in denying appellant's motions.
Second, appellant asserts that the trial court erred in failing to grant his motion to dismiss on grounds of double jeopardy pursuant to S.C. Code § 17-23-20 (1985). Appellant contends that his trial on the traffic violation precludes any subsequent trial for the unlawful carrying of a pistol, claiming that the state is restricted to prosecuting a defendant only once for all offenses arising out of the same set of facts. We disagree.
Section 17-23-20 bars prosecution for an unlawful act when the defendant was previously tried for the same act in municipal or magistrate court. The section is generally applied to *426 prevent the prosecution of a greater offense after the defendant has been convicted or acquitted of a lesser offense involving the same unlawful act. State v. Grampus, 288 S.C. 395, 343 S.E. (2d) 26 (1986).
The United States Supreme Court recently stated in Grady v. Corbin, ___ U.S. ___, 110 S.Ct. 2084, 109 L.Ed. (2d) 548 (1990), that the Double Jeopardy Clause bars a prosecution if, to establish an essential element of the offense charged, the state will prove conduct that constitutes an offense for which the defendant has already been prosecuted. See also State v. Magazine, ___ S.C. ___, 393 S.E. (2d) 385 (1990).
The violation of changing lanes improperly, for which appellant was first tried, is separate and distinct from the charge of unlawfully carrying a pistol. The offenses share no common elements of proof and did not arise from the same unlawful act. Hence, appellant's trial on the traffic violation is not a bar to subsequent prosecution in the Court of General Sessions for the unlawful carrying of a pistol. See Blockburger v. United States, 284 U.S. 299, 52 S.Ct. 180, 76 L.Ed. 306 (1932); State v. Johnson, 299 S.C. 130, 382 S.E. (2d) 909 (1989).
For the foregoing reasons, appellant's conviction and sentence are affirmed.
Affirmed.
GREGORY, C.J., and HARWELL, CHANDLER and TOAL, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314523/ | 196 Ga. App. 612 (1990)
396 S.E.2d 520
BELL et al.
v.
SAMARITANO.
A90A0589.
Court of Appeals of Georgia.
Decided July 11, 1990.
Rehearing Denied July 30, 1990.
Davidson & Fuller, Stephen P. Fuller, for appellants.
Michael J. Anderson, for appellee.
DEEN, Presiding Judge.
The appellants, Rhonda Bell, Loyd Richard Deaver and Olen Pirkle Smith are hairdressers who formerly worked in a shop owned by the appellee, Mario Samaritano. Deaver rented space to open his own hairstyling shop approximately one mile from Samaritano's and Bell and Smith joined him at that new place of business. All three appellants resigned on the same day and Bell and Smith took with them certain index cards containing the names and addresses of customers and, most importantly, bearing notations as to the proper formulas for chemical processing administered to customers, such as permanent waves and hair coloring. The appellants filed separate claims against Samaritano for wages allegedly owed to them for their last week of work. Samaritano counterclaimed for conversion of the chemical processing cards which he claimed belonged to him. The cases were consolidated for trial. At trial, in addition to the claim for conversion, Samaritano also presented evidence to support a claim for tortious interference with contractual relations for the hiring away of his former employees. The trial court directed a verdict to the appellants as to the wages owed them and the jury returned a verdict of $24,067 actual damages and $15,000 punitive damages on Samaritano's counterclaim. Bell, Deaver, and Smith appeal.
1. Sufficient evidence was presented to create an issue for jury determination as to whether defendant-in-counterclaim Deaver was liable as a joint tortfeasor with the other two defendants-in-counter-claim and whether defendants-in-counterclaim Bell and Smith were liable for conversion of property allegedly belonging to plaintiff-in-counterclaim Samaritano for removing customer cards from his place of business.
2. Although the appellants acknowledge that they expressly acquiesced to the jury instructions given by the trial court by stating, in response to the trial court's inquiry, that they had no objection to the jury charge, they contend that their enumerations of error regarding the jury instructions should be addressed pursuant to OCGA § 5-5-24 (c).
In Irvin v. Oliver, 223 Ga. 193, 196 (2) (154 SE2d 217) (1967), the Supreme Court construed the predecessor to OCGA § 5-5-24 (c) as referring "only to the failure to make objection to the charge, and not to those instances where the giving of an instruction, or the failure to give an instruction, is... specifically acquiesced in by counsel." The Supreme Court did not differentiate between cases where counsel acquiesced in the giving of a charge and cases where counsel acquiesced in the failure to give a particular charge. If counsel expressly acquiesces in the jury charge as given, any objection to either the inclusion *613 or the omission of a particular charge is waived. Under Irvin v. Oliver, supra, the appellants waived any objection to the jury charge.
3. The appellants also contend that the trial court erred in overruling their objection to the opinion testimony of an expert witness for Samaritano. The record shows that counsel for Samaritano asked the witness a question about the value of a customer list, which prompted an objection from the appellants asserting lack of foundation. The trial court instructed Samaritano's counsel to rephrase the question, which he did, and the witness answered the question without further objection by the appellants. Under these circumstances, the appellants preserved no objection for review.
Judgment affirmed. McMurray, P. J., Banke, P. J., Birdsong and Beasley, JJ., concur. Carley, C. J., concurs in the judgment only. Sognier, Pope and Cooper, JJ., dissent.
POPE, Judge, dissenting.
I dissent from Division 2 of the majority opinion. Appellants' first five enumerations of error address alleged deficiencies in the trial court's instructions to the jury. The first enumeration of error asserts the trial court erred in failing to charge the jury on the measure of damages for appellee's counterclaim for tortious interference with contractual relations between the appellee and his employees. The record reflects that the jury was instructed on the measure of damages for conversion of personal property but no instruction was given on the measure of damages on the tortious interference claim. Appellants expressly acquiesced to the instructions given by the trial court by stating, in response to inquiry at the conclusion of the charges, that they had no objection to the charges. However, I disagree with the majority that the appellants thus waived their right to object to the charge on appeal.
Pursuant to OCGA § 5-5-24, an appellant in a civil case may not complain of the failure to give instructions to the jury if no objection was made to the instructions before the jury returns its verdict unless, on appellate review, it appears that a substantial error was made in the charge which was harmful as a matter of law. Here, the charge was deficient as a matter of law. "Where several different elements of damages are claimed, it is error requiring the granting of a new trial for the judge to fail in his charge to the jury to give them any rule for estimating the damages claimed; and this is true notwithstanding no written request for such charge is made by the [appealing party]." (Citations and punctuation omitted.) Southeastern Greyhound Lines v. Hancock, 71 Ga. App. 471, 473-474 (31 SE2d 59) (1944). Because the jury was given no instruction on the measure of damages for one of the theories of recovery alleged in the counterclaim, I conclude that the failure amounted to error as a matter of law even though the appellants *614 failed to request such a charge and stated they had no objection to the charges given as a whole.
Those cases in which the appellate courts have held that OCGA § 5-5-24 (c) does not preserve the issue for appeal, when the appellant specifically acquiesced to the charge, have involved instances in which the objection related to the giving of a particular instruction and not to the failure to give instruction. See Irvin v. Oliver, 223 Ga. 193 (2) (154 SE2d 217) (1967); Brown v. Garcia, 154 Ga. App. 837 (1) (270 SE2d 63) (1980). In fact, in both these cases, the record shows a discussion was held between the trial judge and counsel for appellant on the specific charge which was later made an issue on appeal and the counsel acquiesced to the giving of that particular charge. Here, counsel merely made a blanket response of "no objection" to the trial court's inquiry at the conclusion of the instructions as a whole. An inquiry as to whether the parties have any objection to the charge is almost universally made by trial judges at the conclusion of their instructions to the jury. By holding that a negative response to that question (as opposed to positive acquiescence to a particular charge, as in the cases cited above) will preclude an appeal on a charge that is deficient as a matter of law, the majority, I believe, has left OCGA § 5-5-24 (c) with no purpose or meaning.
I agree that the remaining four enumerations of error relating to the charge to the jury have no merit. Appellants failed to raise an objection to these charges at trial and since, unlike the first enumeration of error, these remaining enumerations of error do not involve charges which are erroneous as a matter of law, then objection to them is waived and we may not review these charges pursuant to OCGA § 5-5-24 (c).
I am authorized to state that Judge Sognier and Judge Cooper join in this dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314527/ | 196 Ga. App. 499 (1990)
396 S.E.2d 247
THORPE
v.
THORPE et al.
A90A0446.
Court of Appeals of Georgia.
Decided June 12, 1990.
Rehearings Denied July 9, 1990, and July 24, 1990.
Jones, Brown & Brennan, Taylor W. Jones, Myles E. Eastwood, Rebecca A. Copeland, for appellant.
McGee & Oxford, Stanley P. Meyerson, for appellees.
DEEN, Presiding Judge.
Georganna Thorpe, by her next friend, her mother Beulah Collins, appeals from the order of the trial court granting defendants' motion for summary judgment and denying her partial motion for summary judgment. Georganna brought an action in 1988 to enforce a judgment entered in 1981.
The original suit was brought by Collins and Georganna, by her guardian ad litem, against Georganna's father, George W. Thorpe, to enforce his promises. Collins and Thorpe had entered into a relationship in 1975 which resulted in the birth of Georganna. Collins asserted that Thorpe promised he would marry her, legitimate their child, buy a home in the child's name, set up a trust, and include the child in his will equally with his three legitimate children. Among the contentions were that Thorpe had made a will in 1968 leaving onehalf of his estate to his wife and equal shares in the remainder to all his children. Georganna, born afterwards, sought to be included in the children's shares.
Thorpe's motion for summary judgment was denied, and in an interlocutory appeal, the Supreme Court held that since Thorpe was already married the promise to marry Collins was unenforceable. It also held that Georganna, as third party beneficiary to the promise to include her in a trust and in his will equally with his other children, *500 could maintain an action to enforce the promise. Thorpe v. Collins, 245 Ga. 77 (263 SE2d 115) (1980).
At trial, after return of the case to the lower court, the evidence included the 1968 will and a note from Thorpe to his attorney after Georganna's birth indicating that the will was to be redrawn to include her equally with the other children. No new will was executed. The jury returned a verdict in Georganna's favor stating that Thorpe was her father and that he agreed to make a will treating her equally with his other children. The jury found that Thorpe did not agree to create a trust for Georganna treating her equally with his other children. The trial court's conforming order provided: "George W. Thorpe be and he is hereby directed to make a will within thirty days from the date of this order, awarding to Georganna Thorpe upon his death, the same amount of property, real and personal, that he awards to each of his children. Said George W. Thorpe is hereby directed to file said will in this court not later than thirty days from the date of this order, at which time said will shall be attached to this order and shall be filed as a part of the record in this case."
George Thorpe moved for j.n.o.v. on two grounds: 1) there was no evidence to support the finding that he agreed to include Georganna in his will and the requirement that he make a will leaving Georganna an amount equal to the amounts left to each of his other children; 2) the evidence was insufficient to support the jury's verdict. This was overruled, but while it was pending Thorpe executed a will leaving his entire estate to his wife and excluding all his children including Georganna.
After the verdict, plaintiffs had proposed to the trial court two alternatives for the judgment on the verdict. One version would have specifically required Thorpe to provide for Georganna in his will with an equal undivided share in the one-half of his estate which he left to his other children, referring to the 1968 will. The other would have required him to name Georganna as a beneficiary with a share equal to each of his other three children on terms established in the 1968 will. The trial court rejected both alternatives and entered the abovequoted order.
Thorpe died in 1986. The validity of his 1981 will was upheld by the probate court and affirmed by the superior court. The issue remained as to whether the will complied with the 1981 decree. Jones v. Jones, 231 Ga. 145 (200 SE2d 725) (1973).
In her two enumerations of error, Georganna contends that the denial of Thorpe's motion for j.n.o.v. in the original case is res judicata as to the issues in this case so as to give her one-eighth of his estate, and that the will did not comply with the 1981 verdict and judgment.
1. Treating the enumerations of error in reverse order, we hold *501 that the will did not comply with the decree. In Thorpe v. Collins, supra at 80, the court noted a parent's legal obligation to support his minor child. When this case was tried, the jury found Thorpe to be Georganna's father and ordered him to pay $1,500 per month in child support until she reached her majority. George Thorpe was also found to have made a contract with the child's mother to treat her equally with his other children in his will. He was ordered to make such a will within thirty days and file it with the court. He was also ordered to pay $37,334 in attorney fees to Georganna and her mother for being "stubbornly litigious and acting in bad faith," to pay nominal vindictive damages, and to reimburse Ms. Collins $1,292.38 for blood tests. The 1968 will, which was introduced into evidence in that case, showed an intent to divide his estate between his wife and their children. Evidence of an undated handwritten note by Thorpe to his attorney was also introduced. It directed the attorney to draft a new will and that he desired to leave one-half of his estate to his wife and the other half to be divided between his three adult children and Georganna (whose age was given as "O"). When the jury found that he had contracted with Ms. Collins to treat Georganna equally with his other children, it obviously based this finding upon an expressed intent by Thorpe to include all his children in his will. After the March 4, 1981, judgment, but prior to a ruling upon his motion for a j.n.o.v. (in which Thorpe argued that the evidence was insufficient to support a finding that a contract existed), he executed a new will leaving everything to his wife and their three adult children as co-executors. He did not attach the will to a copy of the judgment and file it with the court within 30 days, but rather waited until October 31, 1983, to file it, and then he did not serve a copy upon appellants.
By making such a will, Thorpe obviously intended to defeat the intent and spirit of both his contract with Ms. Collins and the judgment of the court. His action in drafting this will ensures that his three children by Sarah Brosnan Thorpe will eventually share in his considerable estate through their mother, while Georganna will receive nothing. In effect, he sought to defeat this state's public policy that requires parents of minor children to support them. It would be an outrageous miscarriage of justice to allow Thorpe, who was obviously a wealthy and influential man, to circumvent indirectly a court order which directed him to treat his less fortunate daughter equally with his other children.
2. The ruling in Division 1 above makes it unnecessary to address appellant's remaining enumeration of error.
Judgment reversed. McMurray, P. J., Banke, P. J., Birdsong, Pope and Cooper, JJ., concur. Carley, C. J., Sognier and Beasley, JJ., dissent.
*502 BEASLEY, Judge, dissenting.
1. The trial court should be affirmed because the will detailing how Thorpe wished his estate to be disposed of did not contravene the court decree.
"As a general rule, judgments are to be construed like other written instruments." 46 AmJur2d 363, Judgments, § 73. In case of doubt or ambiguity, a judgment or decree must be construed in connection with the pleadings, even though in so construing it, the generality of the judgment may be modified. Clark v. Bd. of Dental Examiners, 240 Ga. 289, 294 (5) (240 SE2d 250) (1977); Landrum v. McGehee, 116 Ga. App. 507 (157 SE2d 830) (1967); 49 CJS 870, Judgments, § 438. If the judgment is "not ambiguous and leaves nothing for interpretation, there is no need to refer to the pleadings or other parts of the record." 46 AmJur2d 365, Judgments, § 76. Where the language is "plain and unambiguous, there is no room for construction or interpretation, and the effect thereof must be declared in the light of the literal meaning of the language used." 49 CJS 863, Judgments, § 436.
The decree was clear and unequivocal. It did not require Thorpe to make a will granting Georganna a share in his estate, but only that she be devised and bequeathed the same share as Thorpe's other children. If it had meant to require some actual share, it would have indicated what the minimum would be. The court's decision cannot be construed to have deliberately invited another lawsuit as to what bequest would be adequate or reasonable or meet some other unnamed criterion.
Georganna was entitled to equal treatment, not to a bequest, and she was given it. Thorpe was under no mandate to leave something to each of his children, which would require an equal share for Georganna. Failing to include Georganna as a beneficiary did not violate the terms of the judgment.
2. Georganna contends that even if the decree itself did not order Thorpe to make a will leaving her a share in his estate, his motion for j.n.o.v. raised the question of whether there was any evidence showing that Thorpe agreed to include Georganna in his will, leaving her an amount equal to the amounts left his other children, and that he be required to make such a will, including Georganna in his will. Georganna argues that the denial of the motion established that there was evidence requiring Thorpe to make a will which included Georganna as a beneficiary entitled to an equal share in the estate as that given to his other children in the former will, i.e., one-eighth of the entire estate; that under principles of res judicata she must be included as such a beneficiary.
This ingenious argument fails. The sole purpose of a j.n.o.v. is to permit the trial court to review and reconsider its ruling on the antecedent motion for directed verdict. Peacock v. Sheffield, 115 Ga. App. *503 116, 119 (1) (153 SE2d 619) (1967). The denial of a motion for j.n.o.v. is proper unless the evidence demanded a verdict contrary to that returned by the jury. Davis v. Glaze, 182 Ga. App. 18, 19 (1) (354 SE2d 845) (1987). Where authorized, the verdict stands. Pethel v. Waters, 220 Ga. 543 (140 SE2d 252) (1965).
Regardless of Thorpe's position on his motion, its denial left the judgment as it was. As pointed out in the first division of this dissent, "as it was" meant with no requirement that Georganna be affirmatively included in the will unless the other children were. The heirs of George Thorpe were not bound by res judicata to include Georganna in the division of his estate.
I am authorized to state that Chief Judge Carley and Judge Sognier join in this dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314362/ | 207 Ga. 291 (1950)
61 S.E.2d 410
BURGESS et al.
v.
SIMMONS et al.; et vice versa.
17133, 17147.
Supreme Court of Georgia.
September 14, 1950.
Rehearing Denied October 13, 1950.
*295 Martin, Snow & Grant, for plaintiffs in error.
James D. Shannon, Carlisle & Bootle, S. Gus Jones, and Kenneth L. Leake, contra.
HEAD, Justice.
1. Counsel for W. H. Simmons offered in evidence the following letter:
"A. T. Small Brick Company
Manufacturers of Building Brick
Plant Southern R. R. Tracks
Macon, Ga., November 28, 1925.
"To Whom It May Concern: All orders and contracts contingent upon strikes, fires, accidents, delays of carriers or other causes beyond our control. Terms: Sight Draft, Bill of Lading Attached.
"I have given Mr. J. W. Simmons, of Twiggs County, Georgia, permission to cut and saw timber on my place where he now resides and which was formerly owned by him on the following terms:
"He is to receive Ten Dollars ($10.00) per thousand feet loaded in cars at Miller's siding or delivered in Macon by trucks, whichever appears more to his interest or suits his convenience better. This above Ten Dollars ($10.00) per thousand is to be received by him for the expense of cutting and hauling the lumber or whatever other expense he may be put to in getting it ready for the market: the balance of the sales price of this lumber shall be received by me and shall be accepted by me as a payment by Mr. Simmons on the land from which the timber is taken and which he intends purchasing from me.
"It is hereby agreed and understood that the lumber from this land shall not be sold for less than Eighteen Dollars ($18.00) per thousand feet and that no part of it shall be sold for less than this price, unless my consent to the sale is first obtained.
G. L. Small
By Atty."
Counsel for the Burgesses moved to exclude this letter on the ground that its execution was not shown, and for other reasons. *296 The examiner excluded the letter as a matter of law, and this finding was reversed by the trial court, to which exceptions pendente lite were duly filed, and error assigned thereon. The purpose of the letter was to show that there was a contract between Small and Simmons for a resale of the property to Simmons after the foreclosure sale. There is no evidence in the record tending to show any execution of the letter by anyone. W. H. Simmons testified that he procured the letter, along with other papers in an envelope, from an attorney for his father, after his father's death.
In Manning v. Carroll, 206 Ga. 159 (5) (56 S. E. 2d, 278), it was said: "A letter is not admissible in evidence without proof of its being genuine, and this proof can not be supplied solely by what appears on the face of the letter itself, to wit, the contents, the letterhead, etc." There being no effort made to prove the execution of the letter offered, or that it was genuine, it was not error to exclude the letter from evidence. See also Johnson & Shahan v. East Tenn., Va. & Ga. R. Co., 90 Ga. 810 (17 S. E. 121); Freeman v. Brewster, 93 Ga. 649 (6) (21 S. E. 165); Campbell v. State, 123 Ga. 533 (5) (51 S. E. 644); Kent & Downs v. Wadley Southern Railway Co., 136 Ga. 859 (72 S. E. 413).
The authorities cited by counsel for Simmons (Walls v. Atlanta Newspaper Union, 141 Ga. 594, 81 S. E. 866; Cocroft v. Cocroft, 158 Ga. 714, 718, 124 S. E. 346; Gillen v. Coconut Grove Bank & Trust Co., 172 Ga. 908, 910, 159 S. E. 282; Williams v. Williams, 181 Ga. 493, 182 S. E. 904; Deaderick v. Deaderick, 182 Ga. 96, 185 S. E. 89; Hollister Bros. v. Bluthenthal & Bickart, 9 Ga. App. 176, 70 S. E. 970; Bank of Ringgold v. Poarch, 30 Ga. App. 102, 117 S. E. 114; Saunders & McMullen v. Hudson, 30 Ga. App. 732, 119 S. E. 535; Owen v. Anderson, 54 Ga. App. 53, 186 S. E. 864; and certain texts and citations from other jurisdictions) do not support the contention that this letter was admissible in evidence, when there was no evidence to show who prepared the letter, where it was prepared, under what circumstances, or that G. L. Small, his agent, or attorney, ever knew of the letter and its contents prior to the time it was offered in evidence; and it should have been excluded. The trial court erred in reversing the examiner's conclusion of law that it was inadmissible.
*297 2. The original security deed from J. W. Simmons to Mrs. R. E. Small, dated March 27, 1920, was produced in court and offered in evidence. Appearing on the security deed, immediately under the entry of transfer by Mrs. R. E. Small to G. L. Small, was the following entry: "Sept. 12/27, the note this deed secures having been paid but having been misplaced. It is not held by anyone else. [Signed] A. T. Small."
The examiner excluded the above notation from the evidence. This ruling was reversed by the trial judge, with proper exceptions pendente lite filed and error assigned thereon by the Burgesses. While counsel for all parties seem to concede that A. T. Small was, in fact, agent for G. L. Small, this entry was not admissible in evidence, either as an entry of cancellation or as an entry of payment and satisfaction.
The Code, § 67-1306, provides that deeds to secure debt may be canceled in the same manner as mortgages are now canceled, by delivery of the deed to the grantor with an entry or order by the grantee or transferee to the clerk of the superior court directing that the deed be canceled. The clerk is required to write across the face of the record the order in full, and in addition thereto, the word, "Satisfied." The entry on the security deed (from Simmons to Small) was not a compliance with the requirements of the Code as an order of cancellation. Citizens Bank of Moultrie v. Taylor, 155 Ga. 416 (117 S. E. 247).
By deed dated September 1, 1927, G. L. Small conveyed the 146-acre tract of land, the subject of this litigation, to P. H. Williams, which deed was duly recorded on September 10, 1927, two days before the entry on the security deed signed by A. T. Small. There is no evidence to show that at the time Williams purchased the property he had any notice that J. W. Simmons claimed to have paid the debt described in his security deed to Mrs. R. E. Small. This deed to secure debt was of record without any entry of cancellation or satisfaction. The rule in this State is that, where a mortgage or security deed has been paid, a purchaser with notice of this fact would acquire no title, but where the debt has been paid and the record does not indicate payment, a purchaser without notice would acquire title. The grantor in a security deed, when he pays the debt, has the right to the security deed with an entry of cancellation, and it is his *298 duty to have the entry of satisfaction and cancellation entered upon the record. A sale apparently regularly made under valid power of sale will defeat the rights of the grantor in the security deed who has failed to have an entry of cancellation entered upon the record, although the debt described in the deed has been paid. Ellis v. Ellis, 161 Ga. 360, 362 (130 S. E. 681).
"When one of two innocent persons must suffer by the act of a third person, he who put it in the power of the third person to inflict the injury shall bear the loss." Code, § 37-113. If, in fact, J. W. Simmons paid the debt evidenced by his deed to Mrs. R. E. Small, and if Simmons' failure to have entered of record a proper satisfaction and cancellation could be charged to any of the Smalls, this could not operate against the rights of P. H. Williams.
Williams testified that he "had no knowledge or information that Mr. J. W. Simmons claimed title to the property at the time that I bought it from Mr. G. L. Small. Mr. Simmons told me it belonged to Small." The testimony of W. H. Simmons, attempting to contradict the positive testimony of Williams, is insufficient to raise any issue of fact as to whether or not Williams had the conversation with J. W. Simmons as testified to by him. G. L. Small having conveyed the property to P. H. Williams, who took without notice of any claim of payment by J. W. Simmons, the entry or notation of payment made by A. T. Small was not admissible, either as an order of cancellation, or as evidence that the debt from Simmons to Small had been paid. The trial court erred in reversing the examiner's conclusion of law excluding the notation.
3. W. H. Simmons attacks the foreclosure of the deed to secure debt from J. W. Simmons to Mrs. R. E. Small because the transfer of the security deed was not entered of record. This transfer was dated November 17, 1920, and as shown by the language of the transfer, it was sufficient to convey to the transferee, G. L. Small, all rights of Mrs. Small to the debt and in the land conveyed as security for the debt. Hightower v. Haddock, 153 Ga. 160 (111 S. E. 413); Owens v. Conyers, 189 Ga. 793, 796 (7 S. E. 2d, 675). The effect of a failure to record a security deed is the same as the effect of a failure to record a deed of bargain and sale. Code, § 67-1305. As against the *299 interest of third persons who have acted in good faith and without notice of a prior conveyance, and who may have acquired a transfer of the same property, deeds and liens of all kinds, which are required by law to be recorded in the office of the clerk of the superior court, take effect only from the date they are filed for record. Code, § 67-2501. A transfer of a security deed would stand on the same basis as a deed conveying title. Citizens & Southern Bank v. Farr, 164 Ga. 881 (139 S. E. 658); Mortgage Guarantee Co. v. Atlanta Commercial Bank, 166 Ga. 412, 415 (143 S. E. 562). In this case, W. H. Simmons does not claim as a grantee of Mrs. R. E. Small and without notice of the transfer by her of the deed to secure debt made by J. W. Simmons. His claim of title was acquired after notice by a properly recorded deed that the transfer had been made; and his contention that the transfer was invalid because it was not recorded can not be sustained.
Simmons contends that the sale under the powers contained in the security deed from J. W. Simmons to Mrs. R. E. Small was void because the grantee could not purchase, and because the deed to secure debt conveyed as security for the debt two tracts of land, one of which was not sold at the foreclosure sale.
The deed to secure debt did not by express terms authorize the grantee to purchase at a foreclosure sale of the property. The deed does provide that the sale shall be "to the highest bidder for cash," and that the grantee, her agents or assigns, "may bid at said sale should they desire." It is unnecessary to determine whether or not it was the intention of the parties that the right to bid, when the property was to be sold to the highest bidder, would include the right to purchase. If the purchase of the property by the transferee was unauthorized as contended, the deed made pursuant to the sale was not void, but merely voidable, and it would have to be treated as a valid conveyance until set aside in a proper proceeding for that purpose. Faser v. Rummele, 195 Ga. 839, 840 (3) (25 S. E. 2d, 662.)
In the absence of any allegation or proof that the 65-acre tract of land was worth in excess of the amount of the prior lien, and at a public sale would have sold for more than the amount of the prior lien, J. W. Simmons could not have complained of the failure to include this tract of land in the sale. In any *300 event, if J. W. Simmons was injured, and the sale voidable because of such injury, the right to disaffirm such voidable sale was personal to J. W. Simmons.
In Williams v. Williams Co., 122 Ga. 178 (50 S. E. 52), it was said that the right to disaffirm a voidable sale is personal to the mortgagor. This ruling was affirmed and restated in Payton v. McPhaul, 128 Ga. 510, 517 (58 S. E. 50). While the ruling in the Williams case was criticized in Delray Inc. v. Reddick, 194 Ga. 676, 684 (22 S. E. 2d, 599, 143 A.L.R. 519), it is still the law of this State, having been stated by a full bench, and having been followed in full-bench decisions. Only four Justices concurred in the Delray case, with Mr. Justice Grice dissenting. In Fraser v. Rummele, supra, this court in a full-bench decision cited Williams v. Williams Co., supra.
In addition to the fact that the right to disaffirm a voidable sale is personal to a mortgagor, or grantor in a security deed, he is required to move within a reasonable time. J. W. Simmons never at any time (in so far as this record shows) filed any proceedings to disaffirm the exercise of the powers contained in his security deed to Mrs. R. E. Small. J. W. Simmons lived for thirteen years after the foreclosure sale, and under the facts appearing in this record, if he desired to disaffirm the sale, thirteen years was more than a reasonable time within which to do so.
Counsel for W. H. Simmons cite Doyle v. Moultrie Banking Co., 163 Ga. 140 (135 S. E. 501), and McDuffie v. Merchants Bank, 168 Ga. 231 (147 S. E. 111), in support of the contention that the failure of the transferee of the security deed from Simmons to Small to sell the 65-acre tract, upon which there was an outstanding prior lien of $400, made the sale ineffectual to pass title to the 146-acre tract. The disparity between the facts in the cases cited and those of the present case is so great as to make the rules stated in the authorities cited inapplicable in the present case. In both of the cases cited the complaining parties moved promptly; they sought to enjoin the proposed sale; they brought a direct proceeding to contest what was proposed; proper parties were before the court; and the facts relied upon to sustain their contentions were fully set forth. In the present case, there is no direct proceeding to set aside a proposed sale. On the contrary, the present proceeding is purely statutory, except *301 that the same rules apply with reference to exceptions to the findings of the examiner as apply in equity cases on exceptions to the auditor's findings. Code, § 60-203; Bird v. South Georgia Industrial Co., 150 Ga. 420 (104 S. E. 232); Manion v. Varn, 152 Ga. 654 (111 S. E. 30). Equitable relief can not be granted in any proceeding without proper parties, allegations, and prayers, to sustain such relief. Kehr v. Floyd Co., 132 Ga. 626 (64 S. E. 673); Taylor v. Colley, 138 Ga. 41 (74 S. E. 694). In the present case, the attack is made after the death of J. W. Simmons, and approximately twenty years after the sale complained of was actually had. There are no proper parties for cancellation. In all cases the grantor and the grantee (or their legal representatives) must be parties in order for the court to grant the equitable relief of cancellation. J. W. Simmons is dead. He is not a party to this case by his legal representative, and in so far as is shown by this record, there is no representative of his estate. J. W. Simmons in his lifetime did not complain of the failure to include the 65-acre tract in the sale, and W. H. Simmons has no right to make such complaint in this proceeding.
It is next contended that the deed of March 27, 1920, from J. W. Simmons to Mrs. R. E. Small, was not foreclosed, but that another deed dated March 25, 1920, was foreclosed. In support of this contention counsel rely upon the recital in the deed made pursuant to the foreclosure sale that, "whereas on the 25th day of March, 1920 J. W. Simmons . . executed and delivered a deed to secure debt," etc. The examiner found that the recital of the date of March 25, 1920, in the foreclosure deed was purely a clerical error. Without detailing all facts and circumstances sustaining this finding, it is sufficient merely to state that it is amply supported by the evidence.
Whether or not the examiner's finding was demanded by the evidence, the applicant, and those claiming under him, are bound by this finding of fact. The applicant Simmons and Georgia Coating Clay Company filed exceptions identical in substance, and by their exception No. 2 set forth that the eleventh finding of fact of the examiner was as follows: "On April 14, 1925, G. L. Small, as attorney in fact for J. W. Simmons, executed to G. L. Small, as purchaser at the foreclosure sale referred to in Finding of Fact No. 10, a deed conveying the property, title to *302 which is sought to be registered in this proceeding, in consideration of $750.00. This deed contained the recital: `Whereas on March 25, 1920, J. W. Simmons executed and delivered to Mrs. R. E. Small a certain note of even date for the sum of $1259.76 with interest from date at the rate of 8% per annum and at the same time executed and delivered a deed to secure debt conveying a certain tract of land in the Pearson District . .' The date, March 25, 1920, contained in said recital was erroneous. The deed intended to be referred to was the deed to secure debt dated March 27, 1920, described in Finding of Fact No. 8. No other deed to secure debt has been executed by J. W. Simmons in favor of Mrs. R. E. Small. The deed above referred to from G. L. Small, as attorney in fact for J. W. Simmons, to G. L. Small was recorded in Book I, page 369, Clerk's Office, Twiggs Superior Court."
The exception to this finding of fact was as follows: "William Henry Simmons excepts to the finding that on April 14, 1925, G. L. Small, as attorney in fact for J. W. Simmons, executed to G. L. Small, as purchaser at the foreclosure sale referred to in Finding of Fact No. 10, and conveying the property, title to which is sought to be registered. William Henry Simmons says that this finding is contrary to law and the evidence and contrary to the weight of the evidence and that under the evidence the Examiner should have found that said G. L. Small as attorney in fact for J. W. Simmons executed to G. L. Small as purchaser at the alleged foreclosure sale a deed `undertaking to convey' the said property."
Clearly, there was no exception to the finding of the examiner that the date, "March 25, 1920," was in error, and that the date should have been "March 27, 1920." The exception as made is vague, indefinite, and uncertain as to what is meant by the contention that, instead of finding that G. L. Small executed a deed "conveying" the property, the examiner should have found that he made a deed "undertaking to convey" the property. If this exception raised any question for determination, it was a question of law and not one of fact, and presented no issue for jury determination. Griffin v. Collins, 125 Ga. 159 (53 S. E. 1004); Persons v. Persons, 171 Ga. 212 (155 S. E. 27).
There was no motion to strike this exception, however, and *303 we are not here concerned with its validity as presenting a jury question. There was no exception to the examiner's finding of fact that the date of March 25, 1920, referred to in the foreclosure deed, was in error, and that the deed intended to refer to the deed to secure debt dated March 27, 1920. The applicant, and those claiming under him, are bound by the examiner's finding of fact on this issue, to which there was no exception. Laramore v. Jones, 157 Ga. 366 (121 S. E. 411).
Under the rulings previously made, J. W. Simmons was divested of whatever title he had in and to any of the lands described by reason of his deed to secure debt and the foreclosure thereof, dealt with in this division of the opinion, and W. H. Simmons could not have acquired any title under the deed from J. W. Simmons to him, dated June 1, 1938. The order of the trial court reversing the examiner's conclusion of law No. 9, excluding the deed from J. W. Simmons to W. H. Simmons, was therefore error.
The exceptions pendente lite of W. H. Simmons and Georgia Coating Clay Company, assigning error on the order of the court disallowing their exceptions to the examiner's conclusions of law Nos. 2, 4, 5, 6, and 7, are without merit.
The exception to the refusal of the court to allow the introduction of additional evidence requires no ruling. The evidence, if germane, can be introduced upon a retrial of the cause.
4. The trial court reversed the examiner's conclusions of law Nos. 10 and 12, excluding from the evidence the deed of J. W. Simmons to Mrs. A. L. Simmons, dated October 27, 1907, and the deed from Mrs. A. L. Simmons to Mrs. Mattie Lee Simmons, dated March 1, 1944. These conclusions of law involved questions of fact. The findings of fact on which the conclusions were based were excepted to by the Simmonses and the jury found for the exceptions. It can not be said as a matter of law that there was no evidence to support these findings of the jury.
Judgment reversed on the main bill of exceptions; and affirmed on the cross-bill. All the Justices concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314372/ | 61 S.E.2d 96 (1950)
232 N.C. 412
SMITH
v.
McDOWELL FURNITURE CO. et al.
No. 165.
Supreme Court of North Carolina.
September 27, 1950.
*97 Paul J. Story, Marion, for plaintiff-appellant.
Smathers & Meekins, Asheville, for defendant McDowell Furniture Co., appellee.
Proctor & Dameron, Marion, for defendant-appellee, J. H. L. Miller and Fred C. Morris, Partners, Trading as Builders Supply Co.
DEVIN, Justice.
It was admitted that the present action is between the same parties and for the same cause as that alleged in the former action which was terminated by judgment of nonsuit, affirmed on appeal. But it was contended that new and additional evidence had been offered in the present action which had not been offered in the former action, particularly as tending to repel the inference of contributory negligence on the part of the plaintiff, and that this action was not being prosecuted upon substantially the same evidence as that appearing of record in the previous action. Hampton v. Rex Spinning Co., 198 N.C. 235, 151 S.E. 266.
However, the trial judge has decided against the plaintiff on this point, and found, after examination of the testimony offered at the present trial in comparison with the record of the evidence offered at the former trial, that the evidence here "is substantially identical" with the evidence in the trial of the former action. The plaintiff excepted to the ruling of the court in dismissing his action, but did not except to the findings of fact upon which the court's judgment was based, leaving only the correctness of the ruling on the facts found as the question presented by the appeal. Radar v. Queen City Coach Co., 225 N.C. 537, 35 S.E.2d 609; Fox v. Mills, Inc., 225 N.C. 580, 35 S.E.2d 869; Manning v. Commerce Ins. Co., 227 N.C. 251, 258, 41 S.E.2d 767; Lea v. Bridgeman, 228 N.C. 565, 46 S.E.2d 555; Town of Burnsville v. Boone, 231 N.C. 577, 58 S.E.2d 351.
While ordinarily a party against whom a judgment of nonsuit has been rendered may commence a new action within one year, G.S. § 1-25, this right is subject to the rule announced in Hampton v. Rex Spinning Co., 198 N.C. 235, 151 S.E. 266, that where a judgment of nonsuit has been entered, and a new suit has been commenced between the same parties based on substantially identical allegations and supported by substantially identical evidence, and those facts are found by the court, the judgment in the former action will be held res judicata and a bar to the maintenance of the second suit. This rule has been consistently adhered to by this Court. Batson v. City Laundry Co., 209 N.C. 223, 183 S.E. 413; Chapman v. Great Atlantic & Pacific Tea Co., 210 N.C. 842, 188 S.E. 628; Ingle v. Cassady, 211 N.C. 287, 189 S.E. 776; Smith v. Pilot Life Ins. Co., 216 N.C. 152, 4 S.E.2d 321; Cleve v. Adams, 222 N.C. 211, 22 S.E.2d 567; Craver v. Spaugh, 22 N.C. 129, 41 S.E.2d 82; Yancey v. Yancey, 230 N.C. 719, 721, 55 S.E.2d 468.
Here the court has found facts which bring the plaintiff's present action squarely within the rule laid down in Hampton v. Spinning Co., supra, and an examination of the record reveals sufficient basis for these findings. The judgment of dismissal logically follows.
Judgment affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314378/ | 61 S.E.2d 349 (1950)
232 N.C. 447
STATE
v.
HENDRICK.
No. 145.
Supreme Court of North Carolina.
October 11, 1950.
*353 Harry McMullan, Atty. Gen., Hughes J. Rhodes, Asst. Atty. Gen., for the State.
Carl E. Gaddy, Jr., Ray B. Brady, Raleigh, for defendant appellant.
WINBORNE, Justice.
While the record on this appeal presents numerous assignments of error based on exceptions to the admission of evidence, the one based upon the denial of defendant's motion for judgment as of nonsuit under G.S. § 15-173 is considered determinative *354 of the appeal. Hence, others will not be considered and treated.
A murder which is perpetrated by means of poison is deemed to be murder in the first degree. G.S. § 14-17. And when the State undertakes to prosecute for such a murder, it has the burden of producing sufficient evidence to prove beyond a reasonable doubt (1) that the deceased died by virtue of a criminal act, and (2) that such criminal act was committed by the accused. State v. Palmer, 230 N.C. 205, 52 S.E.2d 908, and cases cited. In other words, the State, in such case, and in this case, has the burden of producing sufficient evidence to prove beyond a reasonable doubt that the deceased died from poison, administered with criminal intent by the person charged.
When the sufficiency of the evidence offered on the trial in Superior Court is challenged by motion for judgment as of nonsuit under G.S. § 15-173, the evidence is to be taken in the light most favorable to the State.
Applying this rule to the evidence in the case in hand, it may be conceded that there is sufficient competent evidence to show, and from which the jury may find beyond a reasonable doubt that the deceased died of arsenic poisoning. But a careful consideration of the evidence in the record of case on appeal, narrated above, taken in the light most favorable to the State, leads to the conclusion as a matter of law that it is insufficient to support a finding beyond a reasonable doubt that the deceased died from criminal act, or that the poison was administered by defendant with criminal intent, or to support a verdict against her on the charge contained in the bill of indictment. The evidence offered is conjectural and speculative. All that is shown may be true, and the defendant be innocent of the crime. Hence the motions of defendant for judgment as of nonsuit should have been sustained. State v. Coffey, 228 N.C. 119, 44 S.E.2d 886. Nevertheless, consideration of the various contentions of the State follows:
In passing upon the legal sufficiency of the evidence, when the State relies upon circumstantial evidence for a conviction of a felony, as in the present case, "the rule is, that the facts established or adduced on the hearing must be of such a nature and so connected or related as to point unerringly to the defendants' guilt and exclude any other reasonable hypothesis". State v. Stiwinter, 211 N.C. 278, 189 S.E. 868; State v. Harvey, 228 N.C. 62, 44 S.E.2d 472, 474; State v. Coffey, supra; State v. Minton, 228 N.C. 518, 46 S.E.2d 296; State v. Frye, 229 N.C. 581, 50 S.E.2d 895; State v. Fulk, 232 N.C. 118, 59 S.E.2d 617.
The State contends that defendant had two motives for killing her husband: (1) To obtain the proceeds of two policies of insurance on his life in which she was named beneficiary, and (2) to be free to marry one Hendrick.
"Evidence of motive is relevant as a circumstance to identify an accused as the perpetrator of an offense * * *. But such evidence, standing alone, is not sufficient to carry a case to the jury, or to sustain a conviction", Ervin, J., in State v. Palmer, supra, [230 N.C. 205, 52 S.E.2d 908, 913].
As to the first alleged motive: The State points to the testimony tending to show her early solicitude as to the insurance after the death of her husband. This, however, is in entire harmony with her innocence. The evidence tends to show that there was some uncertainty as to whether the premium was paid. Indeed, the brothers of deceased manifested some interest, even to the extent of going with her to see the insurance agent in Henderson, N. C., and of one of them paying a premium that did not become due until two days after the death of the insured. Moreover, the evidence shows that defendant selected the casket for her husband. And it is entirely reasonable that her interest in the insurance was a natural concern about funeral expenses.
And as to the second: While the record shows the testimony of the witness J. S. Wrenn, of Emporia, Virginia, that he performed a marriage ceremony between one Joe Hendrick and Carol Williams Green on March 31, 1950, the record is void of any evidence that the Carol Williams Green who participated in that marriage ceremony is *355 the defendant, who is referred to in the evidence as Carrie Green or Carrie Lee Green.
The State also contends that defendant only had an opportunity to administer the poison to her husband. Evidence of opportunity standing alone will not justify a finding that the act was done by defendant. It is only a circumstance to be considered along with other evidence in the case. Stansbury on North Carolina Law of Evidence, Sec. 84, page 157. State v. Woodell, 211 N.C. 635, 191 S.E. 334. See also State v. Jones, 215 N.C. 660, 2 S.E.2d 867; and State v. Coffey, supra.
Also it is contended by the State that the silence and conduct of defendant when her husband stated to her "You are the cause of my suffering like this", and later repeated, constitute an admission by adoption that she administered the poison from which he later died. In this connection the record discloses that the clause quoted is a part of a statement attributed to the husband on Wednesday morning after his brother arrived; but the record fails to show what his wife said or did at the time. The second statement, the record discloses, was made Friday night three or three and a half hours prior to the time of the husband's death at 3:15 Saturday morning. It must, therefore, have been near midnight. At that time the testimony is that the husband "said in her presence he did not want her to do anything else because she was the reason he was suffering in that shape", and that "when he said that his wife did not say anything, just turned around and went down stairs". All this testimony was received in evidence without objection, and may be considered as a circumstance for what it is worth. State v. Hawkins, 214 N.C. 326, 199 S.E. 284. Nevertheless, under decisions of this Court, it may be fairly doubted that the attending circumstances were such as to call for a denial by her if what her husband said were not true. State v. Jackson, 150 N.C. 831, 64 S.E. 376; State v. Wilson, 205 N.C. 376, 171 S.E. 338; State v. Hawkins, supra; State v. Gentry, 228 N.C. 643, 46 S.E.2d 863; State v. Rich, 231 N.C. 696, 58 S.E.2d 717.
In State v. Wilson, supra, it is said: "When a statement is made, either to a person or within his hearing, implicating him in the commission of a crime, to which he makes no reply, the natural inference is that the implication is perhaps well founded, or he would have repelled it. State v. Suggs, 89 N.C. 527. But the occasion must be such as to call for a reply. 'It is not sufficient that the statement was made in the presence of the defendant against whom it is sought to be used, even though he remain silent; but it is further necessary that the circumstances should have been such as to call for a denial on his part, and to afford him an opportunity to make it.' 16 C.J., 659.
"Silence alone, in the face or hearing of an accusation, is not what makes it evidence of probative value, but the occasion, colored by the conduct of the accused or some circumstance in connection with the charge, is what gives the statement evidentiary weight. State v. Burton, 94 N.C. 947; State v. Bowman, 80 N.C. 432." [205 N.C. 376, 171 S.E. 338, 339.]
"The general rule is that statements made to or in the presence and hearing of a person, accusing him of the commission of or complicity in a crime, are, when not denied, admissible in evidence against him as warranting in inference of the truth of such statements." State v. Hawkins, supra, [214 N.C. 326, 199 S.E. 284, 287].
The cases of State v. Spencer, 176 N.C. 709, 97 S.E. 155; State v. Walton, 172 N.C. 931, 90 S.E. 518, and Reid v. Barnhart, 54 N.C. 142, cited and relied upon by the Attorney General, are not in conflict with the above.
In the light of these principles, it is noted that in the case in hand, there had been no suggestion that the husband was suffering from poison,rather he had been told on Thursday by his physician that he had "a bad stomach". And on Friday he had gone to South Hill, Va., to see a man there "he thought would do him some good if he had a bad stomach". Moreover, the record fails to show any intimation that at that time defendant was charged with any criminal act.
The State contends that the element of the offense, criminal administration *356 of poison, is borne out by the statement made by defendant to the sheriff, which in the brief of the Attorney General is characterized as "defendant's confession" and that she "poured a teaspoon of it in his soup". This contention overlooks two salient factors: In the first place, there is no evidence that poison was in the bottle. While the evidence shows that medicine bottles, one of which was marked `Poison' were found in the yard, where defendant says she threw "all the medicine in bottes", there is no evidence that any of these bottles contained poison, or showed any trace of poison.
In the second place, the State offered in evidence the statement of defendant to the sheriff, and thereby presents it as worthy of belief. State v. Todd, 222 N.C. 346, 23 S.E.2d 47. See also State v. Fulcher, 184 N.C. 663, 113 S.E. 769; State v. Cohoon, 206 N.C. 388, 174 S.E. 91; State v. Baker, 222 N.C. 428, 23 S.E. 2d 340; State v. Boyd, 223 N.C. 79, 25 S.E. 2d 456; State v. Watts, 224 N.C. 771, 32 S.E.2d 348; State v. Coffey, supra; State v. Robinson, 229 N.C. 647, 50 S.E.2d 740, 741.
And the statement exculpates defendant of any knowledge that the bottle from which she poured a teaspoon of its contents into the soup of her husband contained poison. Her statement is that her husband obtained the bottle, and she did not know what it contained. In State v. Robinson, supra, Barnhill, J., writing for the Court, said: "When the State offers evidence which tends to exculpate the defendant, he is entitled to whatever advantage the testimony affords and so, when it is wholly exculpatory, he is entitled to his acquittal."
This principle, however, does not preclude the State from showing that the facts were different. State v. Todd, supra; State v. Fulcher, supra; State v. Cohoon, supra; State v. Baker, supra; State v. Boyd, supra; State v. Watts, supra; State v. Coffey, supra; State v. Robinson, supra. But in the present case the State has failed to show the facts to be different.
The portion of the dialogue between the sheriff and defendant attributed to defendant "If I had put it in mine I would have been where he is", in retrospect, is entirely consistent with innocence. Poison had been found in the internal organs of her husband, and it is reasonabe that she may have presumed that the bottle he had obtained contained poison.
Furthermore, what defendant said in response to the suggestion of the sheriff that she had told enough to convict her,when considered with her entire statement to the sheriff, is far from an admission that she was guilty of the criminal administration of poison to her husband.
At most it may be said that the evidence shown in the record may point a finger of suspicion against defendant. Yet it lacks sufficient probative value to support the verdict against her. It is entirely consistent with her innocence. "It is better that ten guilty persons escape than that one innocent suffer."
Hence, judgment from which this appeal is taken, is
Reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314425/ | 851 P.2d 1217 (1993)
STATE of Utah, Plaintiff and Appellee,
v.
Celina GRAY, Defendant and Appellant.
No. 910521-CA.
Court of Appeals of Utah.
April 22, 1993.
*1219 Eric P. Swenson, Monticello, for defendant and appellant.
Jan Graham and Kris C. Leonard, Salt Lake City, for plaintiff and appellee.
Before BILLINGS, GREENWOOD and RUSSON, JJ.
OPINION
RUSSON, Associate Presiding Judge:
Celina Gray appeals her convictions of five counts of theft, in violation of Utah Code Ann. § 76-6-404 (1990).[1] We affirm.
FACTS
On appeal from a jury verdict, we view the evidence and all reasonable inferences drawn therefrom in the light most favorable to that verdict, and recite the facts accordingly. State v. Hamilton, 827 P.2d 232, 233-34 (Utah 1992) (citations omitted).
On the morning of September 8, 1990, Celina Gray, her two sisters and her mother were arrested in connection with the theft of various items from several stores in Moab, Utah.
Earlier that day, Officer Steve Ross had received a report that certain merchandise had been stolen from a retail clothing shop, Mode-O-Day. During his investigation of the incident, Officer Ross discovered that several other establishments in the same area of Moab were missing merchandise. In all cases, two to four Navajo women entered together, one or more offered to sell Indian items to the store owner or employee while the others browsed, and various items were later found to be missing. Officer Ross obtained the license plate number of the vehicle the four women were using, as well as a description of the four women and the vehicle, and relayed this information to police dispatch.
Officer Ross called Assistant Police Chief Scott Mallon, briefed him on the situation, and requested his assistance. Assistant Chief Mallon located the vehicle at a Circle K and followed the vehicle onto the highway. After verifying that the vehicle description and license plate number matched the information given him by police dispatch, Assistant Chief Mallon stopped the vehicle on suspicion that its occupants were involved with the above thefts.
Assistant Chief Mallon approached the vehicle and asked the driver, one of Gray's sisters, for her driver's license. While waiting for her to produce it, he noticed that a pink shirt which matched the description of one of the items reported missing from Mode-O-Day was lying in a clear plastic bag on the backseat of the car between Gray and her other sister. When Officer Ross arrived, he confirmed that the shirt was the one reported missing from Mode-O-Day.
The suspects were arrested and transported to the Grand County Jail, where they were booked and their clothing and personal belongings were inventoried. Several of the items inventoried were later identified as having been taken from local stores. Among those items were a watch, a shirt and a pair of shorts that Gray was wearing, and a ring that was found in the pocket of Gray's shorts.
After impounding the vehicle, Assistant Chief Mallon unsuccessfully attempted to contact the Grand County Attorney to obtain a search warrant for the vehicle. He then conducted an inventory search, discovering several other items that were later *1220 identified by local merchants as stolen merchandise.
Gray was subsequently charged with six counts of theft, in violation of Utah Code Ann. § 76-6-404 (1990). Gray moved to suppress the evidence seized from the vehicle in which she was a passenger, claiming that the evidence was seized pursuant to an illegal warrantless search in violation of her rights under the Fourth Amendment to the United States Constitution and article I, section 14 of the Utah Constitution. The motion was denied.
At the commencement of trial, during jury voir dire, one prospective juror, Lawrence Jacobs, revealed that he had been employed by the Utah Highway Patrol for four years approximately fifteen years earlier. Gray sought to have him dismissed for cause, but the trial court refused. Gray then used a peremptory challenge to remove him from the panel.
During the course of the trial, the prosecutor asked Assistant Chief Mallon whether Gray had said anything when he told the women that he had stopped the vehicle because they were suspected of certain thefts. Assistant Chief Mallon replied in the negative. Defense counsel objected to this testimony on the ground that such inquiry violated Gray's rights under the Fifth Amendment to the United States Constitution. The objection was overruled.
At the close of all the evidence, Gray moved to dismiss three of the theft counts on the basis of insufficient evidence, which motion was denied.
At the conclusion of the two-day jury trial, Gray moved that a special verdict with interrogatories, instead of a general verdict, be submitted to the jury. The motion was denied. Additionally, over Gray's objection, the trial court gave Jury Instruction number eight, which indicated that possession of stolen property may be considered evidence that the person in possession stole the property.
The jury subsequently found Gray guilty of six counts of theft; however, the trial court granted Gray's post-trial motion to arrest judgment on one of the counts. Gray also filed a motion to disqualify the prosecutor from the sentencing proceedings because of alleged improper conduct during the course of plea negotiations. The trial court denied the motion.
Gray appeals, claiming that the trial court: (1) erred in denying her motion to suppress; (2) abused its discretion in refusing to dismiss prospective juror Jacobs for cause; (3) erred in allowing the prosecutor to inquire, and Assistant Chief Mallon to testify, as to whether Gray said anything when she was told that the vehicle was stopped because its occupants were suspected of certain thefts; (4) erred in denying her motion to dismiss on the basis of insufficient evidence; (5) abused its discretion in denying her motion for a special verdict with interrogatories; (6) erred in giving Jury Instruction number eight; and (7) abused its discretion in refusing to disqualify the prosecutor from the sentencing proceedings.
WARRANTLESS SEARCH OF VEHICLE
Gray argues that the trial court erred in denying her motion to suppress all of the evidence found during the search of the vehicle because such warrantless search violated her rights under the Fourth Amendment to the United States Constitution and article I, section 14 of the Utah Constitution. The State responds that because the search was conducted as a valid inventory search, no warrant was required, and therefore, the trial court properly denied Gray's motion.
"We review the factual findings underlying the denial of a motion to suppress evidence under a `clearly erroneous' standard, and review the trial court's conclusions of law based thereon for correctness." State v. Brooks, 849 P.2d 640, 643 (Utah App.1993) (citing State v. Brown, 853 P.2d 851 (Utah 1992)).
An inventory search of an automobile is a well-settled exception to the warrant requirements of the Fourth Amendment to the United States Constitution. See, e.g., State v. Johnson, 745 P.2d 452, 454 (Utah 1987); State v. Hygh, 711 P.2d *1221 264, 267 (Utah 1985); State v. Sterger, 808 P.2d 122, 124 (Utah App.1991); State v. Shamblin, 763 P.2d 425, 426 (Utah App. 1988); accord South Dakota v. Opperman, 428 U.S. 364, 367-76, 96 S.Ct. 3092, 3096-3100, 49 L.Ed.2d 1000 (1976). Such searches are necessary to "(1) protect individual property in police custody; (2) protect police against claims of loss or theft of property; and (3) detect dangerous conditions or instrumentalities within impounded vehicles." Shamblin, 763 P.2d at 426 (citing Johnson, 745 P.2d at 454). Accordingly, no fourth amendment violation occurs if the officers conduct an inventory search of a properly impounded vehicle[2] in good faith following reasonable, standardized procedures. Id. (citing Colorado v. Bertine, 479 U.S. 367, 374, 107 S.Ct. 738, 742, 93 L.Ed.2d 739 (1987)). (footnote omitted).
In the case at bar, the trial court correctly determined that the search undertaken here was not violative of Gray's constitutional rights on the basis of the undisputed evidence that, after impounding the vehicle, the officers conducted an inventory search pursuant to the standardized, written inventory policy of the Moab Police Department. Since such inventory searches are valid under the Fourth Amendment, see Shamblin, 763 P.2d at 426, barring bad faith on the part of the officers conducting the search, Gray's argument that the said search was improper must fail.
Gray nonetheless argues that the inventory search was improper because it occurred subsequent to Assistant Chief Mallon's unsuccessful attempt to obtain a search warrant. However, without more, this is insufficient to render the said search improper. The Utah Supreme Court addressed this very question in State v. Earl, 716 P.2d 803 (Utah 1986). In that case, after stopping a vehicle for traffic violations, the officers discussed the possibility of obtaining a search warrant, but upon learning that the county attorney and both justices of the peace were out of town, decided to conduct an inventory search pursuant to Highway Patrol policy, during which search marijuana was discovered. The trial court granted Earl's motion to suppress evidence of the marijuana, but the Utah Supreme Court reversed, holding that such search was proper. Id. at 805. In so holding, the supreme court specifically rejected Earl's argument that the fruits of a valid inventory search must be suppressed where such search follows a failed attempt to acquire a search warrant. Id. at 804-05.
Earl is dispositive of Gray's objection. Like the officers in Earl, the officers here attempted to obtain a search warrant and, when such attempts failed, conducted an inventory search pursuant to the standardized, written inventory policy of the Moab Police Department. Because the facts in this case indicate that the search was executed "in good faith following reasonable, standardized procedures," Shamblin, 763 P.2d at 426, the fact that the officers had previously attempted to secure a search warrant does not invalidate the search under the Fourth Amendment to the United States Constitution.[3]
The same result is compelled under article I, section 14 of the Utah Constitution by the Utah Supreme Court's opinion in Hygh. Although the search in that case was found to be violative of the defendant's rights, the supreme court specifically stated that an inventory search, if validly conducted, does not offend article I, section 14 of the Utah Constitution. Hygh, 711 P.2d at 267. Since the trial court correctly determined that the search in the present case was a valid inventory search, Gray's rights under article I, section 14 were not violated.
Additionally, Gray argues that the search is illegal under State v. Larocco, *1222 794 P.2d 460, 470-71 (Utah 1990), because there were no "exigent circumstances" justifying a warrantless automobile search. However, Larocco is inapposite to the case at bar. Larocco, by its own terms, only applies to the automobile exception to the warrant rule. Id. at 467 (citing Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925)). The present case involves the inventory search exception, not the automobile exception. Accordingly, the Larocco requirement that there be exigent circumstances supporting a warrantless search cannot be superimposed on inventory searches such as the one in the case at bar, and thus, Larocco simply does not apply here. Accordingly, the trial court did not err in denying Gray's motion to suppress.[4]
JUROR REMOVAL
Gray argues that the trial court abused its discretion in refusing to dismiss for cause a prospective juror, Mr. Jacobs, because he had been employed by the Utah Highway Patrol for four years approximately fifteen years earlier.[5] The State responds that such was insufficient reason to dismiss him, and the trial court did not abuse its discretion in refusing to do so.
"A motion to dismiss a prospective juror for cause is within the sound discretion of the trial court. When reviewing such a ruling, we reverse only if the trial court has abused its discretion." State v. Kavmark, 839 P.2d 860, 862 (Utah App.1992) (quoting State v. Woolley, 810 P.2d 440, 442 (Utah App.), cert. denied, 826 P.2d 651 (Utah 1991)) (citation omitted). "However, it is reversible error to require counsel to use a peremptory challenge `to remove a prospective juror who should have been dismissed for cause after he or she expressed bias or an inability to be impartial.'" Id. (quoting State v. Wilson, 771 P.2d 1077, 1083 (Utah App.1989)) (citation omitted).
Rule 18 of the Utah Rules of Criminal Procedure provides that a party may challenge a prospective juror for cause when:
[A] state of mind exists on the part of the juror with reference to the cause, or to either party, which will prevent him from acting impartially and without prejudice to the substantial rights of the party challenging; but no person shall be disqualified as a juror by reason of having formed or expressed an opinion upon the matter or cause to be submitted to such jury, founded upon public rumor, statements in public journals or common notoriety, if it satisfactorily appears to the court that the juror can and will, notwithstanding such opinion, act impartially and fairly upon the matter to be submitted to him.
Utah R.Crim.P. 18(e)(14).
In applying Rule 18, Utah appellate courts have consistently required that if a juror makes a statement that facially demonstrates bias or prejudice, further questioning is required in order to satisfy the court that the initial inference of bias is rebutted. See State v. Cobb, 774 P.2d 1123, 1126 (Utah 1989); Kavmark, 839 P.2d at 862; Woolley, 810 P.2d at 442. Such an inference is rebutted by showing that the statement was the product of a "light impression" and not one that would close the mind against testimony offered in opposition. Kavmark, 839 P.2d at 862; accord Cobb, 774 P.2d at 1127. "The level of questioning necessary to rebut an initial impression of bias `will vary from case to case and is necessarily dependent on the juror's responses to the questions asked.'" Kavmark, 839 P.2d at 862 (quoting Woolley, 810 P.2d at 445) (citation omitted).
*1223 In the case at bar, the following exchange took place between the court and Jacobs:
THE COURT: Have you, or any members of your immediate family, ever worked for any police departments or do you now, whether it be the High[way] Patrol, the Sheriff, City Police, Fish and Game Department, any of those people?
MR. JACOBS: (Indicating.)
THE COURT: Let['s] see. Mr. Jacobs?
MR. JACOBS: I was a Highway Patrolman years ago.
THE COURT: How long has that been, Mr. Jacobs?
MR. JACOBS: Fifteen years now, I guess.
THE COURT: It's been that long ago?
MR. JACOBS: Yes.
THE COURT: How long were you with the department?
MR. JACOBS: Four years.
THE COURT: Four years. Is there anything in that experience, Mr. Jacobs, that would make you want to give more or less weight to the testimony of police officers as a result of that experience?
MR. JACOBS: No.
THE COURT: You don't think that would influence you in the way you look at the testimony in this case?
MR. JACOBS: No.
At the request of Mr. Swenson, Gray's defense counsel, the trial court later inquired further as to Jacobs's law enforcement background:
THE COURT: He said he was a highway patrolman some fifteen years ago and served four years. Where did you serve those four years?
MR. JACOBS: Three here in Grand County and one in Salt Lake County.
THE COURT: Three here in Grand and one in Salt Lake. Have you had any association with the department, as such, since the time you left the department?
MR. JACOBS: Just that I know I know the Sheriff. I grew up with him.
THE COURT: But you haven't actually worked or done any investigations or done anything of that sort these past years?
MR. JACOBS: No, sir.
THE COURT: I see. Anything else, Mr. Swenson?
MR. SWENSON: We move that he be stricken for cause.
THE COURT: Well, the court will deny that on the grounds that he tells me he can try this case strictly on the evidence presented. And he hasn't been actively involved with law enforcement for over fifteen years.
It is well settled that in order to preserve for appellate review a "for cause" challenge to a prospective juror, counsel must contemporaneously state the reason for the challenge in distinct and specific terms. Cobb, 774 P.2d at 1126. Assuming arguendo that the fact that defense counsel moved to dismiss Jacobs immediately following the court's further inquiry into his law enforcement background was sufficient to preserve defense counsel's challenge, we are nonetheless unpersuaded that the trial court abused its discretion in refusing to dismiss Jacobs for cause. Any inference of bias raised by Jacobs's admission that he had formerly worked for the Utah Highway Patrol some fifteen years earlier was rebutted by the trial court's careful voir dire of Jacobs. See id. Jacobs's answers to the court's further questioning clearly showed that his former occupation as a highway patrolman would not close his mind against the evidence offered in this case. See Kavmark, 839 P.2d at 862. Accordingly, we cannot say that the trial court abused its discretion in refusing to dismiss Jacobs for cause.
INQUIRY AS TO GRAY'S SILENCE
Gray contends that the trial court erred in allowing the prosecutor to inquire, and Assistant Chief Mallon to testify, as to whether Gray said anything when she was told that the vehicle was stopped because its occupants were suspected of certain thefts. She argues that such inquiry violated her rights under the Fifth Amendment to the United States Constitution and *1224 constituted prosecutorial misconduct. The State responds that such silence is admissible unless it stems from custodial interrogation, and thus, the trial court did not err in admitting the said testimony.
"Whether testimony is admissible is a question of law, which we review under a correctness standard, incorporating a `clearly erroneous' standard for the review of subsidiary factual determinations." State v. Reed, 820 P.2d 479, 481 (Utah App.1991) (citing State v. Ramirez, 817 P.2d 774, 781 n. 3 (Utah 1991)); accord State v. Gonzalez, 822 P.2d 1214, 1217 (Utah App.1991). However, "[i]n reviewing a trial court's decision to admit evidence, we will not reverse that ruling unless a substantial right of the party has been affected." State v. Oliver, 820 P.2d 474, 479 (Utah App.1991) (citations omitted), cert. denied, 843 P.2d 516 (Utah 1992).
The testimony to which Gray objected was the following exchange between the prosecutor, Mr. Anderson, and Assistant Chief Mallon, concerning what occurred after he had stopped the vehicle and noticed the pink shirt that matched the description of the one of the items missing from Mode-O-Day on the backseat of the car between Gray and her sister:
Q: (By Mr. Anderson) Now, after you saw that shirt, what did you do?
A: [By Assistant Chief Mallon] I asked all four of the suspects to go to the rear of the to get out and step to the rear of the vehicle; step to the sidewalk to the right of the car.
Q: Did they comply?
A: Yes, they did.
Q: Then what did you do?
A: Officer Ross arrived at that time; looked over the females. As I approached them, I advised them that they were stopped because they were suspected of several thefts that had taken place around town.
Q: Was the Defendant one of the people in the vehicle?
A: Yes, she was.
Q: And I think you indicated that she was in the right rear seat?
A: Yes, sir.
Q: When you told them they had been stopped because they were suspected of theft, did the Defendant, Celina Gray, say anything?
A: No, sir.
Defense counsel objected to this testimony, but the trial court overruled his objection. Assistant Chief Mallon later testified that Officer Ross and he subsequently arrested the four women.
In State v. Morrell, 803 P.2d 292 (Utah App.1990), we addressed the question of whether evidence of the silence of a person who has not been formally arrested is admissible, holding that evidence of such silence is admissible unless it stems from custodial interrogation of the defendant. Id. at 296-97. Whether a person who has not been formally arrested is subject to custodial interrogation depends upon five factors: "(1) the site of interrogation; (2) whether the interrogation focused on the accused; (3) whether the objective indicia of arrest were present; ... (4) the length and form of interrogation[; and] (5) whether the defendant came to the place of interrogation freely and willingly." Id. (quoting State v. Sampson, 808 P.2d 1100, 1105 (Utah App.1990), cert. denied, 817 P.2d 327 (Utah 1991), cert. denied, ___ U.S. ___, 112 S.Ct. 1282, 117 L.Ed.2d 507 (1992)).
As an initial matter, we cannot say that Assistant Chief Mallon's actions in the case at bar amounted to an "interrogation." He did not ask Gray, nor any of the other women, any questions whatsoever, and the only exchange between the parties was a statement by Assistant Chief Mallon to the four women concerning the reason for the stop.
Moreover, application of the Morrell factors to the facts of this case also demonstrates that Gray was not subject to custodial interrogation at the time in question here. First, the statement made by Assistant Chief Mallon did not focus on Gray, but on all four women present. Second, Gray has not argued, and our review of the record has not revealed, that any objective indicia of arrest were present. Third, the exchange was exceptionally brief *1225 and explanatory in nature. Fourth, Gray came to the place of the encounter under her own volition, not because she had been transported there by the police. Thus, we conclude that Gray was not subject to custodial interrogation at the time to which Assistant Chief Mallon's testimony refers. It follows therefore that the trial court did not err in admitting Assistant Chief Mallon's testimony concerning Gray's silence.[6]
MOTION TO DISMISS
Gray claims that the trial court's failure to grant her motion to dismiss two counts of theft because of insufficient evidence was error.[7] The State responds that Gray has failed to marshal the evidence in regard to this matter, and that the evidence was sufficient to support the inclusion of the counts, as well as to support her convictions by the jury.
As to a trial court's decision to send a case to the jury, the Utah Supreme Court has stated that "[w]e will uphold the trial court's decision if, upon reviewing the evidence and all inferences that can be reasonably drawn from it, we conclude that some evidence exists from which a reasonable jury could find that the elements of the crime had been proven beyond a reasonable doubt." State v. Dibello, 780 P.2d 1221, 1225 (Utah 1989) (citations omitted). Furthermore, it is well settled that in order to "raise a challenge based on insufficiency of the evidence, the appellant must marshal all evidence supporting the trial court's conclusion. Then the appellant must show how the marshaled evidence, including all reasonable inferences drawn therefrom, is legally insufficient to support the trial court's conclusion." State v. D.M.Z., 830 P.2d 314, 317 (Utah App.1992) (citing State v. Moosman, 794 P.2d 474, 475-76 (Utah 1990)); accord State v. Burk, 839 P.2d 880, 886 (Utah App.1992). If the appellant fails to do so, we assume the trial court's findings are adequately supported by the record. Burk, 839 P.2d at 886.
In the case at bar, not only does Gray fail to marshal the evidence in support of the trial court's denial of her motion to dismiss, but she does not even marshal the evidence in opposition to it, instead simply rearguing her motion to dismiss without any reference to the record in this case. Such is plainly insufficient to meet our marshaling requirements. Thus, we must assume that the evidence supported inclusion of these counts. Accordingly, Gray's argument that the trial court improperly denied her motion to dismiss fails.[8]
MOTION FOR SPECIAL VERDICT WITH INTERROGATORIES
Gray contends that the trial court abused its discretion in denying her motion for a special verdict with interrogatories, citing State v. Bell, 770 P.2d 100, 109 (Utah 1988). The State responds that such was not necessary under the facts of this case, and that therefore the trial court did not abuse its discretion in refusing to give the same.
Utah Rule of Civil Procedure 49 permits the use of special interrogatories, and is made applicable to criminal cases by Utah *1226 Rule of Civil Procedure 81(e). State v. Allen, 839 P.2d 291, 298 and n. 12 (Utah 1992) (citing Bell, 770 P.2d at 109). "However, it lies within the broad discretion of the trial court to determine if special interrogatories are to be used and, if so, the content thereof." Id. at 298 (footnote omitted).
We conclude that Bell is wholly inapplicable to the case at bar. First, the language relied upon by Gray in Bell is dicta, since the Utah Supreme Court specifically noted in its opinion that it was not reaching that claim of error. Bell, 770 P.2d at 109. Moreover, the supreme court further noted that it was only suggesting the use of special verdicts with interrogatories in cases involving Utah's racketeering and criminal enterprise statute because of the confusing nature of that statute. Id. Here, although there was testimony regarding several different thefts, we cannot say that this lead to such a level of confusion that the use of a special verdict with interrogatories was necessitated. Lastly, the supreme court in Bell specifically warned: "[N]othing in this opinion should be taken to suggest that trial courts must invariably use special verdicts or interrogatories.... We only observe that they are helpful and may be particularly appropriate [in some cases]." Id. at 109 n. 19. Accordingly, given the fact that such verdicts are not compelled, and are only recommended in highly confusing cases, the trial court did not abuse its discretion in refusing to give a special verdict with interrogatories in the instant case.
JURY INSTRUCTION NUMBER EIGHT
Gray argues that it was error for the Court to give Jury Instruction number eight, claiming that it raised a presumption of guilt. See State v. Chambers, 709 P.2d 321 (Utah 1985). The State responds that the said instruction did not raise a presumption of guilt, and correctly stated the law, and therefore the trial court properly gave that instruction.[9]
We have previously stated: "[B]eyond the substantive scope, correctness, and clarity of the jury instructions, their precise wording and specificity is left to the sound discretion of the trial court." State v. Sherard, 818 P.2d 554, 560 (Utah App. 1991) (quoting State v. Aly, 782 P.2d 549, 550 (Utah App.1989)), cert. denied, 843 P.2d 516 (Utah 1992). "However, the said instructions must not incorrectly or misleadingly state material rules of law." Id. (citing Aly, 782 P.2d at 550).
Jury Instruction number eight reads:
Possession of property recently stolen, with no satisfactory explanation of such possession, may be considered evidence that the person in possession stole the property.
You have heard evidence that items of property alleged to have been taken by defendant were found on the person of defendant or found in an automobile occupied by defendant or in containers which were in close proximity to defendant. In determining whether defendant possessed the property in question, you must consider the evidence as it specifically relates to her.
Defendant could possess property by having it in her actual possession, or by having constructive possession of the property.
Constructive possession occurs when there is a sufficient connection between the defendant and the property to permit an inference that defendant had both power and intent to exercise dominion and control over the property. Knowledge of the whereabouts of property and access to it does not equal possession if there is no intent to use that knowledge and access.
Possession need not be exclusive, but may also be found where property is *1227 under the joint control and dominion of defendant and others. Possession may be indicated by (1) proximity to defendant, (2) her presence at the time it is found, with emphasis on the fact that it is in plain or open view, (3) evidence indicating joint enjoyment of the property with other[s], or (4) evidence connecting defendant with the acquisition of the property.
In Chambers, the Utah Supreme Court held that an instruction that raises a presumption of guilt, and thereby impermissibly shifts the burden to the defendant to prove his innocence, is unconstitutional. Chambers, 709 P.2d at 325-27; see also State v. Smith, 726 P.2d 1232, 1234 (Utah 1986) ("An instruction that simply incorporates the statutory language is unconstitutional when the statutory term `prima facie' is defined as a presumption...."). However, unlike Chambers, the jury instruction in question in the case at bar, Jury Instruction number eight, did not raise an impermissible presumption of guilt. In fact, by its plain language, it only states that possession of stolen property "may be considered evidence that the person in possession stole the property." Furthermore, it states that in determining whether Gray possessed the property in question, the jury must only consider the evidence as it specifically relates to her. Thus, Jury Instruction number eight does not raise a presumption of guilt, while correctly stating the law. Accordingly, we hold that it was proper for the trial court to give that instruction. See Sherard, 818 P.2d at 560-61.
FAILURE TO DISQUALIFY PROSECUTOR
Gray argues that the trial court abused its discretion in refusing to disqualify the prosecutor, Lyle R. Anderson, from the sentencing proceedings for certain remarks he made during the course of plea negotiations, and seeks re-sentencing with a new prosecutor. The State responds that Anderson did nothing more than engage in typical plea negotiations and committed no misconduct, and that the trial court therefore did not abuse its discretion in denying Gray's motion to disqualify him.
Trial courts are given broad discretion to control the conduct of attorneys in matters before the court. Margulies v. Upchurch, 696 P.2d 1195, 1199 (Utah 1985). The ultimate decision to grant or deny a motion to disqualify counsel is within the trial court's discretion, and we will not overturn that decision absent an abuse of that discretion. Id. at 1200.
In her motion to disqualify Anderson, Gray stated that he:
said, in substance, that he was disturbed by both the time and expense necessarily incurred by Grand County for separate trials and billings for services by defense counsel, as well as the apparent time and expense involved with [Gray's defense counsel's] numerous motions. Attorney Anderson then said that he would dismiss all remaining charges upon entry of a plea of guilty by each Defendant to one third degree felony. He further stated that if each Defendant refused this offer and elected to undertake a defense at trial, that he would seek convictions as to each Defendant as to all of the pending charges, and that he would recommend to the Court that each defendant be jailed as punishment for the offenses, and that this recommendation would be given to the Court regardless of whether the defendants were convicted of misdemeanors or felonies.
The United States Supreme Court has stated that although it is patently unconstitutional to penalize a person for exercising his or her constitutional rights, "in the `give-and-take' of plea bargaining, there is no such element of punishment or retaliation so long as the accused is free to accept or reject the prosecution's offer." Bordenkircher v. Hayes, 434 U.S. 357, 363, 98 S.Ct. 663, 668, 54 L.Ed.2d 604 (1978) (citations omitted). "While confronting a defendant with the risk of more severe punishment clearly may have a `discouraging effect on the defendant's assertion of his trial rights, the imposition of these difficult choices [is] an inevitable' and permissible `attribute of any legitimate system *1228 which tolerates and encourages the negotiation of pleas.'" Id., 434 U.S. at 364, 98 S.Ct. at 668 (quoting Chaffin v. Stynchcombe, 412 U.S. 17, 31, 93 S.Ct. 1977, 1985, 36 L.Ed.2d 714 (1973)). Thus, it follows that by allowing and encouraging plea negotiation, we have accepted as constitutionally legitimate "the simple reality that the prosecutor's interest at the bargaining table is to persuade the defendant to forgo his [or her] right to plead not guilty." Id.
Although we do not fully endorse Anderson's tactics, we are unable to say that the trial court abused its discretion in determining that they were not beyond the bounds of propriety. Anderson made no misrepresentation in presenting his plea bargain, did not deprive Gray of her right to a jury trial, and did not punish her for exercising that right. And although Anderson told Gray that he would recommend to the trial court more severe punishment for her if she did not cooperate, such must be viewed as a necessary and permissible attribute of our legal system. See id.
Further, to grant Gray's motion simply because Anderson informed her that he would take certain actions if she did not plead guilty, actions that were within the bounds of his rights as prosecutor, would be to stifle a prosecutor's right, or some would even say "duty," to present both possible outcomes in plea negotiations. "[A] rigid constitutional rule that would prohibit a prosecutor from acting forthrightly in his dealings with the defense could only invite unhealthy subterfuge that would drive the practice of plea bargaining back into the shadows from which it has so recently emerged." Id., 434 U.S. at 365, 98 S.Ct. at 669 (citation omitted). Thus, we are unwilling to label Anderson's actions in the case at bar improper conduct.[10]
Moreover, it is a fundamental rule of our criminal justice system that conduct by a prosecutor that is at odds with a defendant's rights will be disregarded on appeal "unless we find that it affected a substantial right of the defendant." State v. Ford, 793 P.2d 397, 402 (Utah App.1990) (citations omitted). Such conduct will be found to be prejudicial only if, absent the misconduct, "there is a reasonable likelihood of a more favorable outcome for the defendant...." Id. (quoting State v. Lafferty, 749 P.2d 1239, 1255 (Utah 1988)).
In the case at bar, Gray has not demonstrated any prejudice to her by Anderson's presence at the sentencing hearing, nor that there was a likelihood of a more favorable outcome for her if Anderson had not been present. In fact, to the contrary, we note that at the sentencing hearing, Anderson stated that the presentence report's recommendation of six months in jail was, in his opinion, too long for Gray, recommending sixty days instead. Thus, we conclude that the trial court did not abuse its discretion in denying Gray's motion to disqualify the prosecutor.
Reviewing the other issues raised by Gray on appeal, we find them to be without merit, and therefore decline to address them. See State v. Vigil, 840 P.2d 788, 795 (Utah App.1992) (citing State v. Carter, 776 P.2d 886, 888-89 (Utah 1989)).
CONCLUSION
In conclusion, we hold that the trial court: (1) did not err in denying Gray's motion to suppress the evidence found during the search of the vehicle because such was the product of a valid inventory search; (2) did not abuse its discretion in refusing to dismiss prospective juror Jacobs for cause; (3) did not err in allowing the prosecutor to inquire, and Assistant Chief Mallon to testify, as to whether Gray said anything when she was told that the vehicle was stopped because its occupants were suspected of certain thefts; (4) did not err in denying Gray's motion to dismiss on the basis of insufficient evidence; (5) did not abuse its discretion in denying Gray's motion for a special verdict with interrogatories; (6) did not err in giving Jury Instruction number eight; and (7) did not abuse its discretion in refusing to disqualify *1229 the prosecutor from the sentencing hearing. Accordingly, Gray's convictions are affirmed.
BILLINGS and GREENWOOD, JJ., concur.
NOTES
[1] The jury found Gray guilty of six counts of theft, one count was a second degree felony, one was a third degree felony, one was a class A misdemeanor, and three were class B misdemeanors. The trial court later arrested judgment on one of the class B misdemeanor convictions. Accordingly, Gray appeals the remaining five convictions.
[2] Gray has not argued that impoundment of the vehicle in the case at bar was improper; thus, we do not address that issue.
[3] Moreover, to rule otherwise would penalize the over-cautious officer for his or her attempts to secure a search warrant and would encourage officers to use the path of least resistance, that is, to conduct an inventory search in every case without attempting to first secure a search warrant. Such result would be clearly contrary to our justice system's preference for warrants. See, e.g., Illinois v. Gates, 462 U.S. 213, 236, 103 S.Ct. 2317, 2331, 76 L.Ed.2d 527 (1983); United States v. Ventresca, 380 U.S. 102, 109, 85 S.Ct. 741, 746, 13 L.Ed.2d 684 (1965).
[4] Gray additionally argues that the trial court's findings are insufficient as to the validity of the warrantless search. We disagree. Because the trial court correctly concluded that the search in the case at bar was a valid inventory search, and because the trial court made adequate findings to support this conclusion, the trial court's findings are sufficient.
[5] Gray also argues on appeal that Jacobs should have been dismissed for cause because he knew one of the victims and because he "grew up with" the sheriff. Inasmuch as these grounds were not given for Gray's objection below, they are not properly preserved for appeal. See State v. Cobb, 774 P.2d 1123, 1126 (Utah 1989).
[6] Additionally, as to Gray's claim that eliciting this testimony from Assistant Chief Mallon constituted prosecutorial misconduct, such claim plainly fails. In order to prevail on a prosecutorial misconduct claim, Gray must show (1) misconduct by the prosecutor, and (2) resulting prejudice to her. See State v. Vigil, 840 P.2d 788, 795 (Utah App.1992) (citing State v. Span, 819 P.2d 329, 333-36 (Utah 1991)). Since the testimony was determined to be admissible, the eliciting of the same is plainly not misconduct on behalf of the prosecutor. This is especially true since the prosecutor made no further inquiry as to Gray's silence, this testimony was not commented on by the prosecutor in closing argument, nor was it ever mentioned again.
[7] At trial, Gray moved to dismiss three of the theft counts on the basis of insufficient evidence. However, the trial court subsequently arrested judgment on one of those counts. Consequently, Gray only appeals the trial court's failure to grant her motion to dismiss as to the other two counts.
[8] Moreover, our cursory review of the record reveals that the evidence, taken as a whole, is sufficient to support a reasonable jury's conclusion that the elements of theft had been proven beyond a reasonable doubt. Thus, the record supports the inclusion of these counts, and even had Gray properly marshaled the evidence on appeal, her claim nonetheless fails.
[9] Gray additionally argues on appeal that Jury Instruction number eight is improper for several reasons that were not raised before the trial court. However, it is settled law that in order to preserve an objection to a jury instruction for appeal, a defendant must "object[] thereto before the jury is instructed, stating distinctly the matter to which [she] objects and the grounds of [her] objection." Utah R.Crim.P. 19(c); accord State v. Perdue, 813 P.2d 1201, 1203 (Utah App. 1991). We therefore only address Gray's presumption objection on appeal.
[10] Additionally, given the practical concern that courts should, as a matter of principle, avoid getting overly involved in plea negotiations, we cannot say that the trial court's refusal to do so by granting Gray's motion in this case constituted an abuse of discretion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314438/ | 851 P.2d 1340 (1993)
TRUSTEES FOR ALASKA, Northern Alaska Environmental Center, The Sierra Club, The National Parks and Conservation Association, and The Wilderness Society, Appellants,
v.
STATE of Alaska, DEPARTMENT OF NATURAL RESOURCES; State of Alaska Office of Management and Budget, Appellees.
No. S-4591.
Supreme Court of Alaska.
April 23, 1993.
Rehearing Granted in Part and Opinion Amended April 23, 1993.
*1341 Randall M. Weiner, Trustees for Alaska, Anchorage, for appellants.
Douglas S. Parkinson, Asst. Atty. Gen., Anchorage, Charles E. Cole, Atty. Gen., Juneau, for appellees.
Carl J.D. Bauman, Clyde E. Sniffen, Jr., Hughes, Thorsness, Gantz, Powell & Brundin, Anchorage, for amici curiae, ARCO Alaska, Inc., BP Exploration (Alaska) Inc., Chevron U.S.A., Inc., and Phillips Petroleum Co.
Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.
OPINION
MATTHEWS, Justice.
INTRODUCTION
The appellants in this administrative appeal are five environmental groups ("Trustees"). Trustees sued the State challenging the State's sale of oil and gas leases in Camden Bay, Alaska ("Sale 50"). The State's Department of Natural Resources ("DNR") determined that Sale 50 is consistent with the Alaska Coastal Management Program ("ACMP"), AS 46.40.010-210. Trustees alleged that DNR's consistency determination is inadequate. The superior court disagreed and upheld DNR's consistency determination. Trustees appeal.
This is the second time this case has come before us. In our previous opinion in this case, Trustees for Alaska v. State, Department of Natural Resources, 795 P.2d 805 (Alaska 1990) ("Trustees I"), we stated the facts as follows:
The state held Sale 50 on June 30, 1987. The oil and gas development rights to 118,147 acres of offshore state land in Camden Bay, 35 tracts in all, were offered and sold. Camden Bay is located on the northern coast, west of *1342 Kaktovik and north of the Arctic National Wildlife Refuge ("ANWR").
Trustees challenged the decision of the Department of Natural Resources ("DNR") to proceed with Sale 50. This decision was reflected in DNR's Final Best-Interests Finding. On June 1, 1987, Trustees filed a motion with DNR to reconsider its Sale 50 decision. DNR did reconsider, but declined to change its decision. Trustees filed suit. Their motion for a preliminary injunction was denied, and Sale 50 proceeded as scheduled on June 30, 1987.
In July 1987, Trustees agreed to dismiss their prior action for declaratory relief, and instead brought this administrative appeal. The trial court upheld Sale 50 in every respect. Trustees now appeal.
... .
The Alaska Coastal Management Program ("ACMP") protects numerous environmental and cultural values in Alaska's coastal zone. When a project requires two or more state or federal permits, leases, or authorizations, the Office of Management and Budget (OMB) must render a finding as to whether the project is consistent with the ACMP. In this case, however, DNR performed the consistency review.
Id. at 806, 811 (footnotes omitted; citations omitted). Trustees argued that the State's approval of Sale 50 was improper both because the wrong state agency made the State's consistency determination, id. at 811, and because the determination was inadequate. We agreed with Trustees' first argument. Since the project required more than two leases, we held that OMB was required to make the consistency review and that it could not delegate this statutory duty to DNR. Id. at 811-12. We remanded this case for the superior court to order OMB to perform a consistency review.[1]Id. at 812. Consequently, we did not address the adequacy of DNR's consistency determination. Id. at 812 n. 13.
In accord with our decision, the superior court ordered OMB to perform a consistency determination. However, the legislature subsequently amended AS 44.19.145(11) to permit DNR to make consistency determinations. This change was made retroactive to March 11, 1984. DNR thus became the appropriate agency to make the consistency determination in the present case. Consequently, the superior court vacated its order requiring OMB to make a consistency determination. Trustees again appeal the adequacy of DNR's consistency determination.[2]
DISCUSSION
A. Record Support for the Consistency Finding
6 AAC 80.010(b) requires that "uses and activities" conducted by state agencies in coastal areas must be "consistent" with the standards of the ACMP.[3] In Hammond v. North Slope Borough, 645 P.2d 750, 761 (Alaska 1982), we recognized that by implication this regulation requires that a state agency may only authorize a use or activity in a coastal area if it finds that the use or activity is consistent with ACMP standards.
Trustees contend that DNR's consistency determination is without adequate support in the record with respect to ACMP standards concerning (1) geophysical hazards, (2) historic, prehistoric, and archeological resources, and (3) transportation and utilities. *1343 We examine this argument as it pertains to each of those standards.
1. Geophysical Hazard Areas
The ACMP regulation applicable to geophysical hazard areas provides:
(a) Districts and state agencies shall identify known geophysical hazard areas and areas of high development potential in which there is a substantial possibility that geophysical hazards may occur.
(b) Development in areas identified under (a) of this section may not be approved by the appropriate state or local authority until siting, design, and construction measures for minimizing property damage and protecting against loss of life have been provided.
6 AAC 80.050.
There are thus two potentially applicable regulatory commands. The first is that areas with known or substantially possible geophysical hazards be identified. The second is that development in such areas not be approved unless adequate protective measures have been provided.
Trustees are concerned specifically with those geophysical hazards associated with earthquakes. Trustees argue that DNR's failure to identify specific faults in Camden Bay "makes it impossible to tailor a sale to reduce the seismic risks by, for example, excluding lease tracts along major fault lines." Trustees' argument continues:
If a company purchases a lease in a seismically active area, undertakes the expense of exploration, and determines that producible quantities of oil are present, both DNR and the company may find it difficult to slow the momentum to produce. With geophysical hazard areas identified before the sale, both DNR and the oil companies would be able to internalize the added risks, thereby increasing the likelihood that sales, explorations and production will occur in more seismically stable areas.
DNR replies that it identified the entire Sale 50 area as a geophysical hazard area.[4] DNR thus argues that 6 AAC 80.050 will be complied with so long as development is not approved until siting, design and construction measures for minimizing property damage and protecting against loss of life have been provided for. In addition, the leases stipulate that the lessees must submit a detailed plan of operations for approval before conducting exploratory or development work. These plans must identify specific measures to meet specific geophysical hazards which may exist at the development site.
Trustees counter that identification of the entire sale area as an area of known geophysical hazard makes a mockery of the regulation and that DNR should undertake seismic studies prior to the sale to identify particular areas having special hazards.
The regulation does not support Trustees' contention that DNR should have undertaken seismic studies to determine areas of particular hazard within the sale area. The regulation limits the duty of the appropriate state agency to identifying known or, as to areas of high development potential, substantially possible hazard areas. This clearly implies a duty to conduct a survey of available sources concerning hazards in the sale area and to report the results of such a survey, but it excludes a requirement to conduct field studies.
DNR's summary statement that the entire Sale 50 area is a "known geophysical *1344 hazard" does not satisfy the regulatory requirements. We have already recognized that Sale 50 triggered the regulatory requirement of a "conclusive" ACMP consistency determination. Trustees I, 795 P.2d at 811-12. DNR therefore had the duty to determine whether the sale of oil and gas leases was consistent with the ACMP.
The ACMP has, among its objectives, protecting numerous environmental and cultural values in Alaska's coastal zone. AS 46.40.020. As we have elsewhere had occasion to note, the ACMP's standards are extremely protective of the environment. Hammond, 645 P.2d at 761. Offshore areas are among the habitats subject to the Alaska coastal management program. 6 AAC 80.130(a)(1). Such habitats "must be managed so as to maintain or enhance the biological, physical, and chemical characteristics of the habitat which contribute to its capacity to support living resources." 6 AAC 80.130(b) (emphasis added). Uses or activities that fail to maintain or enhance the habitat's capacity to support living resources may be authorized only if several stringent additional conditions are met.[5] 6 AAC 80.130(d).
Given these strongly protective standards, it cannot be said that the decision to sell leases will invariably and automatically be consistent with the ACMP. The geophysical hazards in a given area could be such as to make any use or activity inconsistent with the ACMP. Where detailed knowledge is available, indiscriminate and conclusory identification of an entire sale area as a geophysical hazard area does not suffice to comply with 6 AAC 80.050(a).[6]
In addition, deferring a careful and detailed look at particularized geophysical hazards to later stages of the development process, as DNR evidently intends, entails certain practical risks.[7] First, DNR's method means that particularized geophysical hazards will be considered on a lease-site-by-lease-site basis. This may tend to mask appreciation of any cumulative environmental threat that would otherwise be apparent if DNR began with a detailed and comprehensive identification of those hazards.[8] Second, as we noted in Trustees for Alaska v. Gorsuch, 835 P.2d 1239, 1246 n. 6 (Alaska 1992), the more segmented an assessment of environmental hazards, the greater the risk that prior permits will compel DNR to approve later, environmentally unsound permits.
*1345 In light of these considerations, and given the plain language of the regulation, we conclude that this case must be remanded to DNR with instructions to identify and report on known and, as to areas of high development potential, substantially possible areas of geophysical hazards within Sale 50.
2. Historic, Pre-Historic and Archeological Resources
The applicable standard pertaining to historic, prehistoric and archeological resources (henceforth, archeological sites) is 6 AAC 80.150. 6 AAC 80.150 provides:
Districts and appropriate state agencies shall identify areas of the coast which are important to the study, understanding, or illustration of national, state, or local history or prehistory.
The regulation therefore directly commands state agencies to identify areas of the coast that are important to the study, understanding, or illustration of relevant history or prehistory.
Although the record includes a number of studies identifying onshore archeological sites adjacent to the sale area, DNR did not conduct cultural resource surveys regarding archeological sites within the sale area. Instead, it delegated this task to the Sale 50 lessees, and required them to carry it out if and when they explored and developed the leased sites.[9]
DNR defends its decision to delegate and postpone identifying archeological sites as follows. It argues that 6 AAC 80.150 does not require it to identify such sites prior to a lease sale. Instead, DNR reads the regulation as leaving it the discretion to determine "how and when such identification must take place." Its decision not to identify archeological sites at the lease sale stage was appropriate because "[t]he existence of ... such resources on offshore areas is unlikely," because DNR and the Sale 50 leases stipulated that the lessee would "report the discovery of any such resources and ... make every reasonable effort to protect them ... until instructed by DNR,"[10] and because any development of the leased sites will be subject to an independent ACMP consistency review. Finally, DNR argues that it would be poor public policy for a court to require it "to conduct and pay for detailed studies prior to merely conducting an oil and gas lease sale which authorizes no activity to take place on the leased tracts."
DNR's decision to defer identification of archeological sites does not comply with 6 AAC 80.150. The regulation clearly requires the identification of archeological sites, but it does not state when they are to be identified. In the context of an oil lease sale, there are a number of possible ways that the regulation may be interpreted. Identification may be required: 1) before *1346 any sale; 2) at the time permits for exploration activity are sought; or 3) at the time permits for development are sought. There are also at least two possible levels of identification: 1) identification of known sites, necessitating only literature surveys and personal contact with individuals who may have knowledge concerning such sites; and 2) identification of unknown sites, necessitating field surveys and exploration. In our view the regulation is most reasonably interpreted to require, among other things, the identification of known archeological sites at the initial sale stage. Our reasons parallel those set forth above concerning the need to identify geophysical hazards.
Protection and preservation of archeological sites is an objective of the ACMP. The statute requires that the ACMP.
shall be consistent with the following objectives:
... .
(5) the protection and management of significant historic, cultural, natural and aesthetic values and natural systems or processes within coastal area[.]
AS 46.40.020. It may be that a particular area is so rich in archeological values that it could not be sold consistently with the ACMP. Further, reliance on the lessees to separately evaluate each lease on a site-by-site basis runs the risk of undervaluing the cumulative cultural significance of the region as a whole. Moreover, the lessees may have a conflict of interest that leads to the underreporting of archeological sites, since the presence of a site on a leasehold may make its development more difficult and costly. These possibilities may be remote in the context of an offshore lease sale. However, compliance with the identification requirement at the sale stage is not difficult, and our decision in this case will apply to future cases where archeological sites may be more abundant.
Our holding that 6 AAC 80.150 requires identification of known archeological sites before a lease sale does not mean that more intensive duties are not required by this regulation at later stages of development. Nor does it mean that archeological sites are necessarily of overriding importance under the ACMP. What it does mean is that a regulation that calls for the State to identify areas that are important archeologically cannot be ignored when the State takes a significant step in committing an area to a particular type of development. DNR must comprehensively survey the known data, set out the results, and state its conclusions. As it has not done so in this case, a remand to DNR is necessary.
3. Transportation Routes and Utility Sites
The applicable regulation concerning transportation and utilities provides:
(a) Transportation and utility routes and facilities in the coastal area must be sited, designed, and constructed so as to be compatible with district programs.
(b) Transportation and utility routes and facilities must be sited inland from beaches and shorelines unless the route or facility is water-dependent or no feasible and prudent inland alternative exists to meet the public need for the route or facility.
6 AAC 80.080. DNR's decision to sell oil leases in Camden Bay unquestionably did not directly violate 6 AAC 80.080. Until exploration is proposed and, in all likelihood, until and unless a commercially exploitable discovery is made, there will be no occasion for siting, designing or constructing transportation and utility routes. Consequently, the decision to sell oil leases cannot be inconsistent with this standard and DNR's consistency determination may not be found to have been erroneous on that ground.
B. Adequacy of DNR's Mitigation Measures
Trustees' second major argument is that DNR's consistency determination is inadequate because it lacks "an objective evaluation of whether the mitigation measures [proposed by DNR for inclusion in the leases] will work under the conditions prevalent in the Camden Bay area, and whether, even if they work, the activity will *1347 then be consistent with the coastal management program." In short, Trustees argue that DNR was arbitrary and capricious because it never addressed the effectiveness of the mitigating measures on which it relied to conclude that the sale is consistent with ACMP standards.
DNR responds that "DNR's mitigation measures are arguably not even required at the lease sale stage, but even if required, are as thorough and forward-looking as they can be as a practical matter at the lease sale stage."
We have already noted that DNR erred in failing to discharge its responsibility to identify known geophysical hazard areas and archeological sites prior to the lease sale. Trustees seek to impose an additional duty, requiring DNR to evaluate the effectiveness of mitigating measures before even receiving detailed development proposals. We find DNR's position reasonable. In our view, DNR's mitigation measures provide sensible guidelines to minimize the harmful effects of oil and gas development. Most importantly, the lessees cannot develop their leases until they submit detailed plans, which must satisfy the ACMP regulations. If the plans do not satisfy the ACMP regulations, DNR can impose additional mitigation measures that assure that the regulations are complied with. Thus we reject Trustees' argument to the extent that it would tie the reasonableness of DNR's consistency determination to its developing and assessing detailed mitigation measures even before knowing which activities it needs to mitigate.
C. DNR's Findings under 6 AAC 80.130(d)
As part of its consistency determination, ACMP also requires DNR to determine whether the proposed development would "maintain and enhance" the coastal habitat. 6 AAC 80.130(b), (c). If the proposed development would not maintain and enhance the coastal habitat, then it must satisfy the standards of 6 AAC 80.130(d). 6 AAC 80.130(d) provides:
Uses and activities in the coastal area which will not [maintain and enhance the coastal habitat] may be allowed ... if the following are established:
(1) there is a significant public need for the proposed use or activity;
(2) there is no feasible prudent alternative to meet the public need for the proposed use or activity which would [maintain and enhance the coastal habitat]; and
(3) all feasible and prudent steps to maximize conformance with [this section's goal of maintaining and enhancing the coastal habitat] will be taken.
DNR analyzed the criteria of 6 AAC 80.130(d) and concluded that Sale 50 satisfied them. Trustees argue that DNR's analysis is inadequate.
Our review is limited to ensuring that DNR's decision was not arbitrary, capricious, or unreasonable. Hammond, 645 P.2d at 758-59. DNR's analysis of 6 AAC 80.130(d) satisfies this standard. It is clear that DNR has taken a hard look at this issue. DNR identified twenty lease stipulations expressly designed to achieve maximum compliance with the goals of maintaining and enhancing the coastal habitat. Even though the Sale 50 area is entirely composed of offshore areas, DNR recognized and sought to compensate for possible impact on such adjacent habitats as estuaries, wetlands and tideflats, barrier islands and lagoons, rivers, streams and lakes, and important upland habitats. To this end, the lease terms range from general requirements of consistency with the ACMP to specific provisions aimed at particular problems.[11]
DNR also acknowledged that despite these precautions, development would to some extent degrade the environment and thus could not satisfy the standards contained in 6 AAC 80.130(b) and (c). It therefore *1348 set out and discussed each part of the tripartite 6 AAC 80.130(d) test. For each part of the test DNR articulated its reasoning and concluded that Sale 50 met that part of the test. It specifically concluded that there is a significant public need to conduct the sale; that there is no feasible and prudent alternative; and that the lease terms and stipulations complied with ACMP standards and minimized the sale's impact on the environment. In short, DNR's analysis demonstrates a reasonable basis for its conclusion. Therefore we reject Trustees argument.
CONCLUSION
This case is REMANDED to the superior court with instructions to remand to DNR for further action in accordance with this opinion.
NOTES
[1] We also remanded for DNR to "consider the unique risks presented by the oil transportation methods that would be necessary if the legal status of ANWR remains unchanged." Id. at 811. DNR complied and issued supplemental findings. In the present appeal, Trustees do not challenge the adequacy of those findings.
[2] DNR's consistency determination is one section of its finding, made in accordance with AS 38.05.035(e), that Sale 50 would serve the State's best interest.
[3] 6 AAC 80.010(b) provides, in relevant part:
Uses and activities conducted by state agencies in the coastal area must be consistent with ... the standards contained in this chapter. In authorizing uses or activities in the coastal area under its statutory authority, each state agency shall grant authorization if ... the agency finds that the use or activity is consistent with ... the standards contained in this chapter.
[4] The decisional document notes the "occurrence of numerous faults and shallow earthquakes in the area. The magnitude of the earthquakes ranges from 1.0 to 5.3 on the Richter scale." The State also cites a draft environmental impact statement for a federal sale just north of Sale 50 which indicates the presence of numerous faults and earthquake epicenters in Camden Bay. Vol. 64:009627. The federal statement deals with faults and earthquakes in the Camden Bay area in much greater detail than the State's decisional document. The federal draft environmental impact statement states:
Earthquakes indicate active movement along the faults in the Camden Bay area and tend to occur along the axes of anticlines and synclines. They are part of the central Alaska Seismic system. Most of the earthquakes recorded since 1968 range in magnitude from 3.0 to 4.0.
Vol. 64:009625.
[5] These conditions are discussed in section C, infra.
[6] In the context of a finding that a sale is in the State's best interest, we have recognized that "the mere decision to lease does not in itself bring about great risks to the environment." Hammond, 645 P.2d at 759. We also noted that because "[e]xploration and development will take place over time... adjustments can be made, if and when new data is acquired that reveals additional hazards." Id. (emphasis added). In Hammond we also required that the consistency determination scrupulously adhere to the regulatory requirements. We noted that uses and activities may be allowed if approved under either of two alternative tests. Id. at 762. The Commissioner's consistency determination failed to make clear which of the tests had been used. For this reason, we remanded the case to the Commissioner with instructions to reconsider his decision and to address the specific environmental protections encompassed in the regulations. Id. As in Hammond, we continue to expect state agencies to give faithful and scrupulous attention to the clear requirements of their regulations.
[7] DNR's consistency determination states:
Geophysical hazards are considered when plans of operation are reviewed. Lessees must submit a detailed plan of operations to the Division of Oil and Gas for approval before conducting any exploratory or development operations. Plans of operations must identify the specific measures, design criteria and construction methods and standards that will be employed to meet any potential geophysical hazard that may exist at the development site. Term 3 requires consistency with ACMP.
[8] We expressed the need for an early review of cumulative environmental impacts in Trustees for Alaska v. Gorsuch, 835 P.2d 1239 (Alaska 1992). We stated that environmentally protective
purposes require that at the time DNR reviews any . .. permit application it consider the probable cumulative impact of all anticipated activities which will be a part of [the project in question], whether or not the activities are part of the permit under review. If DNR determines that the cumulative impact is problematic, the problems must be resolved before the initial permit is approved.
Id. at 1246.
[9] The consistency determination states that
Stipulation 1 requires the lessee to report the discovery of any site, structure, or object of historical or archeological significance and to make every reasonable effort to preserve and protect the site, structure, or object until direction is given by DNR regarding its protection. Term 22 requires that an archeological survey be completed before an area is affected by oil and gas activity... .
[10] In regard to this regulation, DNR provided the following in its consistency determination:
This standard requires that districts and appropriate state agencies shall identify areas of the coast which are important to the study, understanding, or illustration of national, state or local history or prehistory. In recognition that future oil and gas related activity may result in the identification of currently unknown resource sites, Stipulation 1 requires the lessee to report the discovery of any site, structure, or object of historical or archeological significance and to make every reasonable effort to preserve and protect the site, structure, or object until direction is given by DNR regarding its protection. Term 22 requires that an archeological survey be completed before an area is affected by oil and gas activity. Term 3 requires consistency with ACMP.
In another portion of its best interests finding, DNR provided the following:
Cultural resource sites It is not likely that any cultural sites would be identified within the sale area since it is offshore. However, no cultural resource surveys have been conducted in the area, and the discovery of sites, especially in the nearshore areas, should not be ruled out.
... .
Lessees may discover cultural resources as a result of activities related to Sale 50. Stipulation 1 will [protect those resources].
[11] Term 3 of DNR's consistency determination requires consistency with the ACMP; other terms impose such requirements as that explosives not be used in open water areas (Term 6); that gravel be reused (Term 26); and that use of pesticide be limited to protect peregrine falcons (Term 29). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1643753/ | 4 So.3d 1240 (2009)
ROBINSON
v.
STATE.
No. 4D08-3589.
District Court of Appeal Florida, Fourth District.
March 11, 2009.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315946/ | 694 S.E.2d 502 (2010)
STATE of North Carolina
v.
Kendrick DARK.
No. COA09-1287.
Court of Appeals of North Carolina.
June 15, 2010.
*503 Attorney General Roy Cooper, by Special Deputy Attorney General Mabel Y. Bullock, for the State.
Kevin P. Bradley, Durham, for defendant-appellant.
MARTIN, Chief Judge.
Defendant was indicted for possession of cocaine with intent to sell or deliver and sale and delivery of cocaine. He entered pleas of not guilty.
Prior to trial, defendant moved to require the State to disclose the identity of a confidential informant. After an evidentiary hearing conducted before the jury was empaneled, the trial court denied the motion. At trial, the State's evidence tended to show that on 21 February 2007, a police officer with the Henderson Police Department set up a possible drug deal with the assistance of a confidential informant. The informant made a telephone call to set up a drug transaction between the officer and defendant. Defendant told the informant to come to a specific parking spot at Piedmont Village Apartments.
The police officer drove to Piedmont Village Apartments with the informant. Soon after they arrived at the apartments, defendant walked over to the driver's side window where the police officer was seated. Defendant handed the officer twenty dollars worth of a substance later identified as crack cocaine *504 and a bag of marijuana. Defendant put the drugs into the officer's left hand and took $40.00 from the officer's right hand. The officer thanked defendant, and defendant walked back towards the apartments. The officer left immediately to meet with a narcotics agent with the Granville County Sheriff's Department. He turned the drugs over to the agent and told him what had transpired during the drug buy.
The officer identified defendant as the person who sold him the drugs from a photographic line-up. The officer also wore a wire during the transaction with defendant, and the agent, who was parked close enough to see the officer, could hear the conversation between the officer and defendant. The agent testified that he recognized defendant's voice from another undercover operation which occurred the week prior to the event at issue in this case.
Defendant did not offer evidence. The jury found him guilty of both charges, and the trial court entered judgments upon the verdicts sentencing defendant to active terms of imprisonment of a minimum of sixteen months and a maximum of twenty months for sale and delivery of cocaine and a minimum of ten months and a maximum of twelve months for possession of cocaine, the sentences to run concurrently. Defendant gave notice of appeal.
Defendant's sole argument on appeal is that the trial court erred in denying his motion to compel the State to disclose the confidential informant's identity. After careful consideration of his argument, we find no error.
"[T]he state is privileged to withhold from a defendant the identity of a confidential informant, with certain exceptions." State v. Newkirk, 73 N.C.App. 83, 85, 325 S.E.2d 518, 520, disc. review denied, 313 N.C. 608, 332 S.E.2d 81 (1985). Roviaro v. United States, 353 U.S. 53, 77 S.Ct. 623, 1 L.Ed.2d 639 (1957), sets forth the applicable test when disclosure is requested. See State v. Jackson, 103 N.C.App. 239, 241, 405 S.E.2d 354, 356 (1991), aff'd per curiam, 331 N.C. 113, 413 S.E.2d 798 (1992). "The trial court must balance the government's need to protect an informant's identity (to promote disclosure of crimes) with the defendant's right to present his case." Id. (citing Roviaro, 353 U.S. at 62, 77 S.Ct. at 628-29, 1 L.Ed.2d at 646). "However, before the courts should even begin the balancing of competing interests which Roviaro envisions, a defendant who requests that the identity of a confidential informant be revealed must make a sufficient showing that the particular circumstances of his case mandate such disclosure." State v. Watson, 303 N.C. 533, 537, 279 S.E.2d 580, 582 (1981).
"Two factors weighing in favor of disclosure are (1) the informer was an actual participant in the crime compared to a mere informant, and (2) the state's evidence and defendant's evidence contradict on material facts that the informant could clarify." Newkirk, 73 N.C.App. at 86, 325 S.E.2d at 520 (citations omitted). Factors which weigh against disclosure include "whether the defendant admits culpability, offers no defense on the merits, or the evidence independent of the informer's testimony establishes the accused's guilt." Id. at 86, 325 S.E.2d at 520-21.
In this case, only the informant's presence and role in arranging the purchase weigh in favor of disclosure. We agree with the trial court's finding that "there has been no forecast as to how the identity of the confidential informant could provide useful information for the defendant in order to clarify any contradiction between the State's evidence and the defendant's denial." Moreover, testimony by the informant was not admitted at trial; instead, the testimony of the police officer and the narcotics agent established defendant's guilt. Defendant has not carried his burden of showing that the facts of this case mandate disclosure of the informant's identity. Accordingly, the trial court did not err in denying defendant's motion for disclosure.
No error.
Judges BRYANT and ELMORE concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260589/ | 238 P.3d 1044 (2010)
2009 UT 36
Tina ARCHULETA, Plaintiff and Appellant,
v.
ST. MARK'S HOSPITAL, Defendant and Appellee.
Nos. 20080580, 20080572.
Supreme Court of Utah.
May 14, 2010.
Rehearing Denied July 8, 2010.
*1045 James R. Hasenyager, Peter W. Summerill, Ogden, for plaintiff.
Hugh C. Griffin, Mark A. Riekhof, Eric P. Schoonveld, Tawni J. Anderson, Salt Lake City, for defendant.
Paul M. Simmons, Salt Lake City, for amicus curiae.
DURHAM, Chief Justice:
INTRODUCTION
¶ 1 In this case, the district court improperly dismissed Tina Archuleta's negligent credentialing claim against St. Mark's Hospital on statutory grounds. We agree with Ms. Archuleta's argument on direct appeal that the plain language of Utah Code sections 58-13-5(7), 58-13-4, and 26-25-1 does not bar negligent credentialing claims brought by patients against health care providers. We reverse the district court's dismissal of Ms. Archuleta's negligent credentialing claim and remand for further proceedings consistent with this opinion.
*1046 BACKGROUND
¶ 2 On August 4, 2005, Dr. R. Chad Halversen performed a laparotomy surgery on Ms. Archuleta at St. Mark's Hospital. Less than two days after being discharged from St. Mark's Hospital, Ms. Archuleta was admitted to McKay Dee Hospital complaining of severe pain and complications from the surgery. Over the course of the next year, physicians performed over six additional corrective surgeries on her.
¶ 3 Subsequently, Ms. Archuleta brought suit against Dr. Halversen and St. Mark's Hospital, among other defendants. In her First Amended Complaint, she asserted that St. Mark's Hospital "failed to seek consult when appropriate, inadequately trained healthcare provider employees, negligently credentialed ... [Dr.] Halversen and generally fell below the standard of care with regard to Plaintiff Tina Archuleta." St. Mark's Hospital moved to dismiss the negligent credentialing portion of the complaint, asserting that Utah does not recognize a cause of action for negligent credentialing.
¶ 4 The district court determined that Utah Code sections 58-13-5(7), 58-13-4, and 26-25-1 each independently barred a negligent credentialing cause of action. Accordingly, the court dismissed Ms. Archuleta's negligent credentialing claim. We have jurisdiction to review the district court's dismissal pursuant to Utah Code section 78A-3-102(3)(j) (2008), to review the district.
STANDARD OF REVIEW
¶ 5 "[T]he purpose of a rule 12(b)(6) motion is to challenge the formal sufficiency of the claim for relief, not to establish the facts or resolve the merits of a case." Whipple v. Am. Fork Irrigation Co., 910 P.2d 1218, 1220 (Utah 1996). Accordingly, a "12(b)(6) dismissal is a conclusion of law" that "we review for correctness." Id. "Also, `a matter of statutory interpretation is a question of law that we review on appeal for correctness.'" ABCO Enters. v. Utah State Tax Comm'n, 2009 UT 36, ¶ 7, 211 P.3d 382 (quoting MacFarlane v. Utah State Tax Comm'n, 2006 UT 25, ¶ 9, 134 P.3d 1116) (alterations omitted).
ANALYSIS
¶ 6 Because the district court dismissed Ms. Archuleta's negligent credentialing claim on statutory grounds, we examine the three statutes on which the district court based its decision. Since we determine that the plain language of the statutes does not bar the negligent credentialing claim, we need not address Ms. Archuleta's constitutional arguments. We also discuss our reasoning for recognizing a negligent credentialing cause of action in Utah.
I. THE PLAIN LANGUAGE OF UTAH CODE SECTION 58-13-5 DOES NOT BAR NEGLIGENT CREDENTIALING CLAIMS
¶ 7 The plain language of Utah Code section 58-13-5 is clear. Read as a whole and in harmony with related provisions and chapters, it shows that the legislature did not intend to immunize hospitals from negligent credentialing claims brought by patients.
¶ 8 When faced with a question of statutory interpretation, "`our primary goal is to evince the true intent and purpose of the Legislature.'" Duke v. Graham, 2007 UT 31, ¶ 16, 158 P.3d 540 (quoting State v. Martinez, 2002 UT 80, ¶ 8, 52 P.3d 1276). We do so by looking at the "best evidence of legislative intent, namely, the plain language of the statute itself." Id. (internal quotation marks omitted). As part of this "well-worn canon[ ] of statutory construction," we must read the plain language of the statute "as a whole." Id. (internal quotation marks omitted). Under this "whole statute" interpretation, State v. Maestas, 2002 UT 123, ¶ 54, 63 P.3d 621, we construe provisions "in harmony with other provisions in the same statute and `with other statutes under the same and related chapters.'" State v. Schofield, 2002 UT 132, ¶ 8, 63 P.3d 667 (quoting Lyon v. Burton, 2000 UT 19, ¶ 17, 5 P.3d 616). "We do so because `[a] statute is passed as a whole and not in parts or sections and is animated by one general purpose and intent. Consequently, each part or section should be construed in connection with every other part or section so as to produce a harmonious *1047 whole.'" Sill v. Hart, 2007 UT 45, ¶ 7, 162 P.3d 1099 (quoting Maestas, 2002 UT 123, ¶ 54, 63 P.3d 621).
¶ 9 Section 58-13-5 addresses the dissemination of health care information. The statute compels a health care facility to report certain eventssuch as termination of employment or restrictions of privileges for cause, violations of professional standards or ethics, and findings of incompetencythat affect a licensed health care provider's practice or status. See Utah Code Ann. § 58-13-5(3)(a) to (h) (2007). To foster the dissemination of this information, the legislature grants three types of immunity. The first type is found in subsection 6(a), which provides, "[a]ny person or organization furnishing information in accordance with this section in response to the request of the [Division of Occupational and Professional Licensing] or a board, or voluntarily, is immune from liability with respect to information provided in good faith and without malice...." Id. § 58-13-5(6)(a). The second type is found in subsection 6(b), which reads, "[t]he members of the board are immune from liability for any decisions made or actions taken in response to information acquired by the board if those decisions or actions are made in good faith and without malice...." Id. § 58-13-5(6)(b). The third type exists under subsection 7, the subsection at issue in this case. Subsection 7 states,
[a]n individual who is a member of a hospital administration, board, committee, department, medical staff, or professional organization of health care providers is, and any hospital, other health care entity, or professional organization conducting or sponsoring the review, immune from liability arising from participation in a review of a health care provider's professional ethics, medical competence, moral turpitude, or substance abuse.
Id. § 58-13-5(7).
¶ 10 By its purpose and plain language, section 58-13-5 is a peer review statute. Indeed, this court has previously concluded that the plain language of similar statutes "indicates that their purpose is to protect health care providers who furnish information regarding the quality of health care rendered by any individual or facility." Rees v. Intermountain Health Care, Inc., 808 P.2d 1069, 1078 (Utah 1991). Likewise, under the plain language of the statute, the legislature intended to immunize three classes of individuals from negligent credentialing claims brought by licensed health care providersi.e., doctors. Subsection 6(a) provides immunity to those who furnish the information, subsection 6(b) shields those who make decisions in response to the information, and subsection 7 immunizes those who organize or sponsor the review of the information. This limited immunity is guaranteed so long as the acts are done without malice. See UCS 58-13-5. In short, the immunity contemplated under the statute operates between a doctor whose credentials are under review and the suppliers of information and decision makers; it does not contemplate immunity between a patient and a hospital.[1]
II. THE PLAIN LANGUAGE OF UTAH CODE SECTION 58-13-4 DOES NOT BAR NEGLIGENT CREDENTIALING CLAIMS
¶ 11 Utah Code section 58-13-4 grants immunity to health care providers that sponsor or make decisions regarding the proper use of facilities, the quality and cost of health care, ethical standards, or performance of services. See Utah Code Ann. § 58-13-4(2) (2007). The legislature, however, expressly excepted patients' claims regarding care. "This section does not relieve any *1048 health care provider from liability incurred in providing professional care and treatment to any patient." Id. § 58-13-4(3).
¶ 12 In its effort to discount the import of this exception, St. Mark's Hospital argues that "St. Mark's is not sued ... for `providing professional care and treatment'.... Instead, St. Mark's is sued for its credentialing decisions with regard to Dr. Halversen prior to the time that Dr. Halversen provided the `professional care and treatment' about which Plaintiff complains...." We reject this distinction. The credentialing determination is a decision regarding a doctor's fitness to provide patient careand is clearly covered by the language of the exception that protects patients' claims regarding provision of that care. Ms. Archuleta's negligent credentialing claim is for alleged shortcomings in St. Mark's Hospital's review of Dr. Halversen's qualifications to provide treatment. Moreover, a negligent credentialing claim is not solely based on the qualifications of a health practitioner to provide treatment. The claim must also assert the element of damages. These damages arise from improper or substandard care. Claims of negligent credentialing and care, in the patient context, are thus not mutually exclusive.
¶ 13 Any argument that the exception provided in 58-13-4(3) should only apply to situations enumerated in that same section is also unavailing. This contention ignores the overlapping territory between St. Mark's Hospital's proposed broad reading of section 58-13-5 immunity and situations enumerated in section 58-13-4, which include: committee evaluations and determinations regarding the quality of health care; whether provided health care was necessary, appropriate or properly performed; ethical standards review; the diagnosis and treatment of patients within the state; etc. Subsection 58-13-4(3) indicates the legislature's intent to protect a patient's ability to recover damages from health care providers, despite the immunities provided. In discounting section 58-13-4(3), St. Mark's Hospital's reading would give the exception no effect. This is contrary to basic rules of statutory interpretation. See State v. Jeffries, 2009 UT 57, ¶ 9, 217 P.3d 265 ("Statute[s] should be construed ... so that no part [or provision] will be inoperative or superfluous, void or insignificant, and so that one section will not destroy another." (internal quotation marks omitted)).
III. THE PLAIN LANGUAGE OF UTAH CODE SECTION 26-25-1 DOES NOT BAR NEGLIGENT CREDENTIALING CLAIMS
¶ 14 Finally, Utah Code section 26-25-1 bolsters this plain language reading of limited immunity. Section 26-25-1, similar to sections 58-13-4 and 58-13-5, grants immunity for "(a) providing information or material authorized in this section; (b) releasing or publishing findings and conclusions of groups referred to in this section to advance health research and health education; or (c) releasing or publishing a summary of these studies in accordance with this chapter." Utah Code Ann. § 26-25-1(5) (2007). We have noted,
The purpose of th[is] statute[ ] is to improve medical care by allowing health-care personnel to reduce "morbidity or mortality" and to provide information to evaluate and improve "hospital and health care." Without the privilege, personnel might be reluctant to give such information, and the accuracy of the information and the effectiveness of the studies would diminish greatly.
Benson v. I.H.C. Hosps., Inc., 866 P.2d 537, 539 (Utah 1993).[2] Again, under the plain language of this section, the legislature's grant of immunity relates to the dissemination of information, not to patient care. Indeed, as the court of appeals recognized, "the [statute] was never intended to shield hospitals from potential liability or to provide hospitals protection from medical malpractice claims." Cannon v. Salt Lake Reg'l Med. Ctr., Inc., 2005 UT App 352, ¶ 23, 121 P.3d 74.
IV. NEGLIGENT CREDENTIALING IS A VALID CLAIM IN UTAH
¶ 15 A "substantial majority of the other common law states" recognize negligent *1049 credentialing as a viable claim. Larson v. Wasemiller, 738 N.W.2d 300, 306-309 (Minn.2007) (surveying states that have adopted negligent credentialing claims and the legal basis for the cause of action). We agree with the analysis that negligent credentialing is "simply the application of broad common law principles of negligence," id. at 307, and is a natural extension of torts such as negligent hiring. Id. at 308. There are strong policy reasons for recognizing the cause of action, including the foreseeability of harm to patients where hospitals fail to properly investigate a doctor's qualifications, see Johnson v. Misericordia Cmty. Hosp., 99 Wis.2d 708, 301 N.W.2d 156, 164 (1981), and the "`superior position [of hospitals] to monitor and control physician performance.'" Domingo v. Doe, 985 F.Supp. 1241, 1245 (D.Haw.1997) (quoting Pedroza v. Bryant, 101 Wash.2d 226, 677 P.2d 166, 169 (1984)). We therefore formally recognize negligent credentialing as a valid common-law cause of action in Utah.
CONCLUSION
¶ 16 A comprehensive reading of section 58-13-5's language, in harmony with sections 58-13-4 and 26-25-1, demonstrates that the legislature did not intend to immunize negligent credentialing claims brought by patients. We also expressly hold that negligent credentialing is a valid common-law cause of action in Utah. We therefore reverse the district court's dismissal of the negligent credentialing claim and remand to the district court for further proceedings consistent with this opinion.
¶ 17 Justice PARRISH and Justice NEHRING concur in Chief Justice DURHAM's opinion.
DURRANT, Associate Chief Justice, dissenting:
¶ 18 I respectfully dissent. I agree in general with the majority's approach to statutory construction. I cannot agree with its conclusions about the plain language of the relevant statutory provisions or with its analysis of how these immunity provisions interoperate with regard to the liability of health care providers in Utah. Specifically, I disagree with the majority's conclusions about the operation of Utah Code section 58-13-5.[1] Not only do I conclude that that statute's plain language reaches precisely the kind of claim advanced by Ms. Archuleta, I also disagree with the majority's reasons for concluding that it should only apply in the context of peer review. I believe that the majority's interpretation of the relevant statutes gives rise to inconsistencies between this grant of immunity and other related statutory provisions.
¶ 19 Ms. Archuleta also argues that the open courts and uniform operation of laws clauses of the Utah Constitution bar the legislature from enacting the kind of immunity asserted by St. Mark's in this case. Given that the majority holds that Ms. Archuleta is not precluded from bringing her claim, it is unnecessary for the majority to address these arguments. Because I would interpret Utah Code section 58-13-5 to confer immunity on St. Marks, I will also address the reasons I believe that the legislature did not violate the Utah Constitution in conferring this immunity.
I. THE LEGISLATURE HAS GRANTED HEALTH CARE PROVIDERS IMMUNITY FROM CLAIMS FOR THE NEGLIGENT CREDENTIALING OF PHYSICIANS
¶ 20 Of the three grants of immunity St. Marks invokes in this case, the broadest is found at Utah Code section 58-13-5(7). This section states that
(7) An individual who is a member of a hospital administration, board, committee, department, medical staff, or professional organization of health care providers ..., and any hospital, other health care entity, or professional organization conducting or sponsoring the review, [is] immune from liability arising from participation in a *1050 review of a health care provider's professional ethics, medical competence, moral turpitude, or substance abuse.[2]
The reviews described by section 58-13-5(7) constitute precisely the sort of credentialing review for which Ms. Archuleta suggests liability can be imposed. Specifically, Ms. Archuleta describes the term "negligent credentialing" as a form of "short-hand" for the breach of a duty that arises when a hospital "undertakes ... to render services to another which [it] should recognize as necessary for the protection of the other."[3] Ms. Archuleta does not claim that St. Mark's is liable under the doctrine of respondeat superior. That is, she does not contend that Dr. Halversen was an employee of the hospital for whose actions the hospital is vicariously liable. Rather, she claims that St. Mark's was independently negligent in permitting Dr. Halversen to use its facilities.[4]
¶ 21 In other words, her allegation of negligent credentialing is based on alleged shortcomings in the hospital's review of Dr. Halversen's qualifications to provide treatment.[5] This is exactly the kind of liability that the plain language of the statute addresses. Put differently, Ms. Archuleta seeks to hold St. Marks liable for harms that allegedly arose "from participation in a review of a health care provider's ... medical competence."
¶ 22 Ms. Archuleta argues, and the majority concludes, that section 58-13-5(7) grants immunity only from suits brought by "fellow professionals" who were the subject of the credentialing review. But this statute simply does not contain this limitation. Section 58-13-5(7) broadly provides that individuals "participat[ing] in a review of a health care provider's ... medical competence" are "immune from liability." Nothing in the plain language of 58-13-5(7) suggests that the scope of immunity granted is in any way dependent on who brings the suit.
¶ 23 The majority does not explain how this statutory language fails to reach the claims advanced by Ms. Archuleta. Rather, the majority concludes that this language does not apply to negligent credentialing claims because other portions of Utah Code section 58-13-5 apply only in the context of peer review.
¶ 24 In support of this argument, the majority refers to the other two grants of immunity contained in this section. One of these grants of immunity shields individuals who provide information to the Division of Professional Licensing ("DOPL").[6] The other grant of immunity shields members of a DOPL board from suits based on "decisions made or actions taken in response to information acquired by the board."[7] The majority states that, because of the nature of these grants of immunity, the entire section contemplates only immunity "between a doctor whose credentials are under review and the suppliers of information and decision makers; [not] immunity between a patient and a hospital."[8]
*1051 ¶ 25 In my view, this conclusion regarding the scope of subsection 58-13-5(7) simply does not follow from the majority's interpretation of subsections 58-13-5(6)(a) and (6)(b). First, the majority's analysis is based on an inference that is neither apparent from, nor commanded by, the words of the statute. Further, the majority's conclusion depends on an extrapolation that does not logically follow from that initial inference. The majority has isolated subsections (6)(a) and (6)(b) of section 58-13-5 and reasoned that, because physicians are the likely plaintiffs in the lawsuits contemplated by those subsections, they are necessarily the only plaintiffs whose suits are precluded by the section as a whole. But these subsections do not contain any language that might limit them in this way, so this inference is questionable.
¶ 26 Regardless of the flaws in this initial premise, I do not believe the next step in the majority's reasoning withstands scrutiny. Even if the grants of immunity in subsections (6)(a) and (6)(b) should apply only to suits brought by physicians, the grant of immunity relevant for purposes of this casethe immunity set forth in subsection (7)is directed at a different class of activity. Subsections (6)(a) and (6)(b) address the immunity enjoyed by DOPL board members and individuals who share information with a DOPL board. They grant immunity for "furnishing information" and for "decisions made or actions taken." They simply do not address the immunity that protects hospitals from liability arising from "participation in a review of a [physician's] medical competence." Instead, this immunity is set forth in subsection (7). And although subsection (7) is related to subsections (6)(a) and (6)(b), this fact does not require that limitations from one subsection be applied to another. That these different subsections address different sorts of lawsuits and different categories of potential defendants militates against such an assumption.
¶ 27 The legislature separated the immunity contained in subsection (7) from the immunity relevant to DOPL reviews set forth in subsection (6). It used different operative language to define its scope. It directed the grants of immunity at different classes of potential defendants and different categories of activity. Yet, regardless of these differences, the majority urges that, simply because subsections (6)(a) and (6)(b) apply only when physicians bring suit, subsection (7) must necessarily be interpreted to contain a similar limitation. In my opinion, this extrapolation is logically flawed and inconsistent with the broad language used in subsection (7).
¶ 28 Further, the lack of an express limitation on the scope of immunity is important because related statutes make it clear that similar limitationswhen the legislature intends to create themare made explicit. For instance, section 58-13-3(3) grants, to both hospitals and physicians, immunity that is explicitly limited to "medical malpractice action[s]." Section 58-13-2.6(2)(a) grants similar immunity that is explicitly limited to civil damages resulting from "assist[ing] governmental agencies" with specific, enumerated health care activities.[9] And section 58-13-4(3), which grants immunity for decisions made by certain peer review committees, limits that immunity by explicitly excepting claims for "liability incurred in providing professional care and treatment to any patient."
¶ 29 These sections make it clear that when the legislature has intended to confine the immunity it creates it has done so with statutory language limiting the scope of the immunity to specific causes of action and factual scenarios. The absence of any such language in section 58-13-5(7) is a strong indication that the legislature intended to impose no limitations other than those made explicit by the statutory language. This reinforces what is plainly stated in this sectionno liability may be imposed on a hospital because of its participation in a review of a physician's medical competence.
¶ 30 The majority limits these subsections to a narrow subset of potential liability in an *1052 attempt to construe these statutory provisions "in harmony with other provisions in the same statute and with other statutes under the same and related chapters."[10] However, the purpose for employing this canon of construction is to "produce a harmonious whole."[11] In general, I question the appropriateness of disregarding plain statutory language in an attempt to construct a harmonious whole. But in this case, I find it especially inapt because the majority's interpretation of the statute is inconsistent with other portions of the code.
¶ 31 First, although section 58-13-5 relates to liability arising from information sharing and review of a physician's competence, the other provisions in this chapter of the Utah Code set forth multiple grants of immunity related to other activities. Some create immunity from liability for providing charitable care while others create immunity from liability when providing certain emergency services.[12] Reading this chapter of the Utah Code as a whole, the only valid bases I can find for limiting the various kinds of immunity conferred are the bases contained in the text. For example, section 58-13-4 creates immunity for the work done by certain committees, and it contains an exception for suits regarding "professional care and treatment."[13] Unlike in section 58-13-5, the use of an explicit exception indicates that the legislature specifically considered whether the immunity provided would preclude suits by patients and explicitly provided that it would not. Indeed, every other grant of immunity in this chapter clearly contemplates suits by patients. Under the majority's interpretation, only in section 58-13-5 is it necessary to infer such a limitation from language that is not included in the statute. Given the legislature's clear ability to craft these limitations when it so intends, I would not construe the statute in a way that makes it necessary to impose such a limitation in a section where the legislature did not do so.
¶ 32 Second, the majority's interpretation of section 58-13-5 is inconsistent with a legislative mandate that information provided to a peer review committee not be used in court proceedings. Specifically, section 26-25-3 provides that when information regarding patient treatment and care is provided to a peer review committee, that information is deemed to be a "privileged communication[ ]" that is "not subject to discovery, use, or receipt in evidence in any legal proceeding of any kind or character."[14] Indeed, a violation of this restriction is a class B misdemeanor.[15] This sectionwhich erects potentially insurmountable barriers to judicial resolution of negligent credentialing claimsis at the very least inconsistent with the notion that section 58-13-5 preserves an exception, sub silentio, for claims of negligent credentialing. A much more harmonious reconciliation of these provisions recognizes that the need to use this sort of information in court proceedings is obviated by the grant of immunity contained in section 58-13-5(7).
¶ 33 Third, the majority's interpretation carries with it a troublesome corollary. Because it asserts that the immunity conferred in section 58-13-5 does not contemplate immunity from patient suits, its interpretation would not protect members of the DOPL board who make licensing decisions from suits by patients of the physicians who were licensed by the board.[16] Nor would it protect individuals who, in good faith, provide information to the DOPL board from such suits. Given the majority's proposition that the whole of section 58-13-5 applies only to suits by physicians, there is no apparent *1053 basis for construing subsection (6)(a) and (6)(b) to preclude patients from pursuing their claims against DOPL board members and individuals who share information with the DOPL board. In the absence of any statutory language indicating that the immunity in these sections applies only to suits by physicians, it is far more consistent to interpret each subsection to grant immunity to hospitals, DOPL board members, and DOPL informants, regardless of who brings the suit. Any other interpretation inserts into the statute exceptions that simply cannot be found in the statute's plain language.
II. GRANTING STATUTORY IMMUNITY FROM NEGLIGENT CREDENTIALING CLAIMS DOES NOT VIOLATE THE UTAH CONSTITUTION
¶ 34 Ms. Archuleta contends that if Utah's current statutory scheme bars negligent credentialing claims, then the scheme violates the open courts and uniform operation of laws clauses of the Utah Constitution. With regard to the open courts clause, she asserts that the grant of immunity is unconstitutional because it abrogates a common law right without creating an alternative remedy and that public policy does not support the abrogation. With regard to the uniform operation of laws clause, Ms. Archuleta argues that this grant of immunity has the effect of treating similarly situated individuals differently. I will address each of these arguments in turn.
A. This Grant of Immunity Does Not Violate the Open Courts Clause of the Utah Constitution
¶ 35 The legislative grant of immunity from negligent credentialing claims does not violate the open courts clause because there is a reasonable alternative remedy to such a cause of action. The open courts clause of the Utah Constitution provides as follows:
All courts shall be open, and every person, for an injury done to him in his person, property or reputation, shall have remedy by due course of law, which shall be administered without denial or unnecessary delay; and no person shall be barred from prosecuting or defending before any tribunal in this State, by himself or counsel, any civil cause to which he is a party.[17]
¶ 36 Before legislation implicates the open courts clause, the legislation must abrogate an existing right of action in whole or in part.[18] But even legislation that abrogates an existing right of action does not violate the open courts clause when "an injured person [has] an effective and reasonable alternative remedy `by due course of law' for vindication of his constitutional interest."[19] A remedy is "an effective and reasonable alternative" to the abrogated cause of action so long as the benefit provided by the alternative remedy is "substantially equal in value or other benefit to the remedy abrogated."[20] The open courts clause is satisfied in this case because a suit directly against the doctor for his own negligence is a reasonable alternative remedy.
¶ 37 The true harm that a patient suffers in this type of case is the injury resulting from the physician's negligent actions. If the physician had not performed the surgery negligently, there are no damages a patient could seek based solely on the assertion that the physician may have been negligently credentialed. Accordingly, I would hold that a reasonable and effective alternative to a claim for negligent credentialing exists in the form of a negligence action against the doctor whose alleged negligence caused the plaintiff's actual injury.
*1054 B. This Grant of Immunity Does Not Violate the Uniform Operation of Laws Clause of the Utah Constitution
¶ 38 The uniform operation of laws clause of the Utah Constitution provides that "[a]ll laws of a general nature shall have uniform operation."[21] "A law does not operate uniformly if `persons similarly situated' are not `treated similarly' or if `persons in different circumstances' are `treated as if their circumstances were the same.'"[22] Ms. Archuleta contends that "construing the statutes to eliminate negligence claims premised on credentialing while allowing other claims based on different bases for negligence ... offends" the uniform operation of laws clause.
¶ 39 Ms. Archuleta is incorrect. The uniform operation of laws clause requires only that similarly situated individuals be treated similarly, not that similar claims be treated the same. And the statutory scheme treats all persons equally. All persons with a negligent credentialing claim are barred from bringing the claim. If the uniform operation of laws clause were to operate as Ms. Archuleta suggests, all statutes that grant tort immunity would be unconstitutional for failing to baror permitall tort actions. The uniform operation of laws clause does not require this type of all-or-nothing approach to a delicate and nuanced problem. Accordingly, I would conclude that the legislature's grant of immunity from negligent credentialing claims does not violate the uniform operation of laws clause.
CONCLUSION
¶ 40 Ms. Archuleta seeks to recover from St. Mark's Hospital for harm allegedly caused by a physician working in the facility. She asserts that the hospital should be held liable for exercising substandard care when reviewing that physician's competence to practice medicine. The majority concludes that the claim is not barred by the Health Care Providers Immunity from Liability Act, even though that act includes a provision that makes hospitals "immune from liability arising from participation in a review of a health care provider's ... medical competence." I am unpersuaded by the majority's argument that an exception should be read into this plainly stated grant of immunity. Accordingly, I dissent.
¶ 41 Justice WILKINS concurs in Associate Chief Justice DURRANT's dissenting opinion.
NOTES
[1] Utah Code section 26-25-3 (2007) provides that "[a]ll information, interviews, reports, statements, memoranda, or other data furnished by reason of this chapter, and any findings or conclusions resulting from those studies are privileged communications and are not subject to discovery, use, or receipt in evidence in any legal proceeding of any kind or character." While this provision prevents a patient from introducing this type of evidence in a negligent credentialing suit, there may still be a question of fact whether hospital administrators reasonably relied on the determination of the credentialing committee given independently available information.
[2] This case was interpreting a previous version of the statute, but the purpose remains the same.
[1] The majority also concludes that the grants of immunity found in Utah Code section 58-13-4 and 26-25-1 do not shield hospitals from negligent credentialing claims. Because I conclude that section 58-13-5 would confer sufficient immunity to shield St. Marks in this case, I do not address whether these other statutory provisions also shield the hospital.
[2] Utah Code Ann. § 58-13-5(7) (2007) (emphasis added). The grant of immunity conferred by this statute in no way alters the credentialing and licensing requirements imposed on hospitals and physicians by the Utah Department of Health and the Division of Professional Licensing. See Utah Code Ann. §§ 58-1-106, XX-XX-XXX(3)(b) (authorizing the Division of Professional Licensing to suspend or revoke licenses of physicians engaged in unprofessional conduct); Utah Admin. Code R. 432-2-9, -3-6 (requiring hospitals to adopt review procedures approved by the Department of Health and authorizing sanctions for hospitals that fail to comply).
[3] Appellant Br. at 15 (quoting Restatement (Second) of Torts § 323 (1965)).
[4] St. Mark's concedes that if Ms. Archuleta could prove that an agent or employee of St. Mark's negligently provided care or treatment, St. Mark's could be held liable under traditional principles of respondeat superior.
[5] Utah Code section 26-49-204(1)(a) (Supp. 2009) defines "credentialing" as "obtaining, verifying, and assessing the qualifications of a health practitioner to provide treatment, care, or services." This definition, like the characterization advanced by Ms. Archuleta, suggests that any claim for negligent credentialing will fall squarely within the immunity contemplated by section 58-13-5(7) as a "review of a health care provider's... medical competence."
[6] Utah Code Ann. § 58-13-5(6)(a).
[7] Id. § 58-13-5(6)(b).
[8] Supra ¶ 10.
[9] The activities for which immunity is granted are responding to state, local, or national health emergencies, responding to threats of bioterrorism, responding to an epidemic, or making a health care facility available for use in distributing pharmaceuticals or administering vaccines. See Utah Code Ann. § 58-13-2.6(2)(b).
[10] See State v. Schofield, 2002 UT 132, ¶ 8, 63 P.3d 667 (internal quotation marks omitted).
[11] Berneau v. Martino, 2009 UT 87, ¶ 12, 223 P.3d 1128 (internal quotation marks omitted).
[12] See Utah Code Ann. § 58-13-2 to -3.
[13] Id. § 58-13-4(3).
[14] Id. § 26-25-3 (2007).
[15] Id. § 26-25-5.
[16] Utah Code section 63G-7-301(5)(c) (2008) apparently retains traditional governmental immunity for actions taken by DOPL boards in issuing, denying, suspending, or failing to suspend or revoke licenses. Although this would appear to render section 58-13-5(6)(b) superfluous, I nevertheless find it inconsistent that the legislature would enact this specific DOPL-oriented grant of immunity but silently preserve an exception that would permit patient suits.
[17] Utah Const. art. I, § 11.
[18] Tindley v. Salt Lake City Sch. Dist., 2005 UT 30, ¶ 17, 116 P.3d 295. Although it may have been unclear until decided by the majority in this case, I am willing to assume that a claim for negligent credentialing was an existing right within the meaning of our precedent to the extent that it "is `simply the application of broad common law principles of negligence.'" See supra ¶ 15 (quoting Larson v. Wasemiller, 738 N.W.2d 300, 307 (Minn.2007)).
[19] Berry v. Beech Aircraft Corp., 717 P.2d 670, 680 (Utah 1985).
[20] Id.
[21] Utah Const. art. I, § 24.
[22] Lee v. Gaufin, 867 P.2d 572, 577 (Utah 1993) (quoting Malan v. Lewis, 693 P.2d 661, 669 (Utah 1984)). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1726468/ | 970 So. 2d 847 (2007)
YOUNG
v.
STATE.
No. 5D07-2357.
District Court of Appeal of Florida, Fifth District.
December 26, 2007.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314609/ | 207 Ga. 326 (1950)
61 S.E.2d 493
KERSEY
v.
THE STATE.
17227.
Supreme Court of Georgia.
October 10, 1950.
*328 James N. Rahal, for plaintiff in error.
Eugene Cook, Attorney-General, Andrew J. Ryan Jr., Solicitor-General, Sylvan A. Garfunkel, Herman W. Coolidge, and Robert E. Andrews, contra.
HAWKINS, Justice.
This is a companion case to that of Lynch v. State, ante, p. 325. The evidence and the defendant's statement disclose an agreement between the defendant, George Kersey, and one Thomas Lynch to rob someone in order to replenish their diminishing funds; and, as stated in the brief of counsel for the plaintiff in error, the record discloses that the defendant Kersey, along with Lynch, rode out on the Ogeechee Road, near Dead Man's Curve, in Chatham County, Georgia, and stopped a truck coming towards Savannah, and told the truck driver (the deceased) to get out of the truck and come to the rear of the truck because it was a holdup. The driver got out of his truck and came almost to the rear of his truck, when Thomas Lynch, the other defendant, came towards this defendant and the driver of the truck with a shotgun, and as soon as the truck driver saw the gun he attempted to get back in his truck and was shot by Thomas Lynch. The defendant, George Kersey, on his separate trial, was convicted of murder without a recommendation of mercy, and to the judgment overruling his motion for new trial as amended, he excepts. Held:
1. Conceding, but not deciding, that the first verdict presented by the *327 jury that "We, the jury, find the defendant of first degree murder," was null and void, as contended by the movant in the fourth ground of his motion for a new trial, the trial court did not err in directing the jury to retire and reconsider their verdict, for "The court may require an incomplete verdict, to be made complete, before receiving it." Cook v. State, 26 Ga. 593 (5). See also Turbaville v. State, 58 Ga. 545 (3); Mangham v. State, 87 Ga. 549 (13 S.E. 558); Smith v. Pilcher, 130 Ga. 350 (60 S.E. 1000); Groves v. State, 162 Ga. 161 (132 S.E. 769); Weaver v. State, 50 Ga. App. 178 (3) (177 S.E. 349); Campbell v. State, 50 Ga. App. 171 (177 S.E. 517).
2. The trial court, having fully instructed the jury as to the law of conspiracy, did not err in failing to charge the jury the rules of law as to principals in the first and second degree in the language of the Code, § 26-501, in the absence of an appropriate request so to do. See Powell v. State, 179 Ga. 401 (8) (176 S.E. 29). The fifth ground of the motion for a new trial, complaining of such failure, is without merit.
3. The sixth ground, complaining because the trial court failed to instruct the jury as to the law of admissions and confessions, is likewise without merit for, in the absence of a timely written request, it is not error for the trial court to fail to charge the jury upon the subject of confessions or incriminatory admissions. Phillips v. State, 206 Ga. 418 (2) (57 S.E. 2d, 555).
4. The trial court having fully instructed the jury as to the presumption of innocence thrown around the defendant by the law, as to the burden resting on the State to establish the defendant's guilt beyond a reasonable doubt, and as to the duty of the jury to acquit the defendant unless satisfied of his guilt beyond a reasonable doubt, failure to instruct the jury in the language of the Code, § 38-110, in the absence of a timely request therefor, as complained of in the seventh ground of the motion for a new trial, was not erroneous. Skinner v. State, 98 Ga. 127 (2) (26 S.E. 475); Fort v. State, 31 Ga. App. 525 (121 S.E. 128); Bell v. State, 148 Ga. 352 (96 S.E. 861); Paramore v. State, 161 Ga. 166 (6) (129 S.E. 772); Nash v. State, 126 Ga. 549 (55 S.E. 405); Albritton v. State, 175 Ga. 891 (2) (166 S.E. 643).
5. The eighth ground of the motion for a new trial, complaining that the court erroneously expressed an opinion in stating to the jury in its charge that the law presumes every homicide to be malicious, is without merit. The very short excerpt from the charge here complained of is taken out of its context and, when considered in connection with what immediately precedes and follows it, is not subject to the exception taken. The charge as given is in almost the identical language held to be proper in Mattox v. State, 181 Ga. 361 (4) (182 S.E. 11), and Thompson v. State, 191 Ga. 222 (7) (11 S.E. 2d, 795).
6. The ninth ground of the motion for a new trial is merely an amplification of the first, second, and third (the general) grounds. There was ample evidence to support the verdict, which has the approval of the trial judge, and the judgment refusing a new trial on these grounds will not be disturbed. Mays v. State, 207 Ga. 143 (60 S.E. 2d, 769); Lynch v. State, supra.
Judgment affirmed. All the Justices concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314667/ | 305 S.C. 296 (1991)
408 S.E.2d 222
FIRST-CITIZENS BANK AND TRUST COMPANY OF SOUTH CAROLINA, as Trustee under the Will of W. Jennings Hucks, deceased, Plaintiff
v.
Rudene HUCKS, Jenny Hucks Thompson, Ted J. Hucks, Dennis Hucks and First-Citizens Bank and Trust Company of South Carolina as Executor under the Will of W. Jennings Hucks, deceased, Of Whom First-Citizens Bank and Trust Company of South Carolina, as Trustee under the Will of W. Jennings Hucks, deceased, and as Executor under the Will of W. Jennings Hucks, deceased, Rudene Hucks and Jenny Hucks Thompson are Respondents and Ted J. Hucks and Dennis Hucks are Appellants. Appeal of Ted J. HUCKS and Dennis Hucks.
23436
Supreme Court of South Carolina.
Submitted December 14, 1990.
Decided July 22, 1991.
*297 Clifford H. Tall, of Leiter & Tall, Myrtle Beach, for appellants.
Steven M. Anastasion, of Callison, Tighe, Robinson & Anastasion, Columbia, for respondent First-Citizens Bank and Trust Co. of South Carolina.
John P. Henry, of Thompson, Henry, Gwin, Brittain & Stevens, P.A., Conway, for respondent Rudene Hucks.
Submitted Dec. 14, 1990.
Decided July 22, 1991.
FINNEY, Justice:
Appellants Ted J. Hucks and Dennis Hucks appeal from a circuit court order referring to the master-in-equity for final adjudication by jury trial their counterclaim which involves legal issues. We reverse and remand.
This action commenced when Respondent First-Citizens Bank and Trust Company of South Carolina (First-Citizens) initiated suit for Declaratory Judgment against appellants. The appellants filed counterclaims alleging breach of contract and breach of fiduciary duties and requested a jury trial on all legal issues. The circuit court referred all issues to the master with the direction that the claims for equitable relief be tried by the master and the claims which are legal in nature be tried by jury. The order provided further that any appeal from the final judgment of the court or verdict of the jury shall be directly to the South Carolina Supreme Court. First-Citizens consented to the order of reference.
The sole issue on appeal is whether the circuit court erred in referring to a master-in-equity legal issues for trial by jury. First-Citizens' complaint seeks equitable relief. Appellants' counterclaim involves legal claims and seeks monetary damages. Appellants contend the master lacks jurisdiction to conduct jury trials. We agree.
*298 A party does not waive its rights to a jury trial on a counterclaim asserted in an equity action if the counterclaim is legal and compulsory in nature. North Carolina Federal S & L v. DAV Corp., 298 S.C. 514, 381 S.E. (2d) 903 (1989). "If the complaint is equitable and the counterclaim legal and compulsory, the defendant has the right to a jury trial on the counterclaim." Johnson v. South Carolina Nat. Bank, 292 S.C. 51, 52, 354 S.E. (2d) 895, 896 (1987). This Court set forth in Johnson the procedure to be followed in suits such as the case at bar.
... [W]here a complaint is equitable and the counterclaim is legal and compulsory, the trial judge has two options. He may either order separate trials pursuant to Rule 42(b) or may order the claims tried in a single proceeding. In making this determination, caution should be taken to assure that, under the circumstances of the case, a joint trial will not deprive a party of his right to a full jury trial of legal issues.
Johnson, 354 S.E. (2d) at 897.
It is undisputed that appellants' counterclaim is legal in nature. Thus, the crucial question is whether the counterclaim is compulsory or permissive. By definition, a counterclaim is compulsory only if it arises out of the same transaction or occurrence as the opposing party's claim. SCRCP Rule 13(a). In North Carolina Federal S & L v. DAV Corp., supra, this Court held that the test for determining if counterclaims are permissive or compulsory is whether there is a logical relationship between the claim and the counterclaim.
In the instant case, the trustee's equity action seeks a declaration of rights arising in the administration of a trust. The legal counterclaim alleges that the trustee has breached its contractual agreement and fiduciary duty. We find that there is a logical relationship between the counterclaim and the claim. Hence the counterclaim is compulsory, and appellants are entitled to a jury trial on their counterclaim.
The master is without jurisdiction to conduct jury trials. Thus, the legal issues in this case should not have been referred to the master for final adjudication. *299 Where the issues are complicated, a case may be referred to a master for the limited purpose of making factual findings to be received by the circuit court as evidence only. See First Palmetto State Bank and Trust Co. v. Boyles, 394 S.E. (2d) 313 (S.C. Sup. Ct. 1990). For the foregoing reasons, this case is reversed and remanded.
Reversed and remanded.
GREGORY, C.J., and HARWELL, CHANDLER and TOAL, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314668/ | 84 Cal. App. 2d 115 (1948)
ELLEN JAMES, Plaintiff and Appellant,
v.
WHITNEY SAPP JAMES, Defendant and Appellant.
Civ. No. 15889.
California Court of Appeals. Second Dist., Div. One.
Mar. 2, 1948.
Roy A. Linn for Plaintiff and Appellant.
John H. Poole for Defendant and Appellant.
YORK, P. J.
Both plaintiff and defendant appeal from the order of October 14, 1946, whereby the court denied the motion of plaintiff for a writ of execution to enforce an interlocutory decree of divorce entered on November 20, 1928, requiring defendant to pay to plaintiff $50 per month as alimony, and whereby the court also denied the motions of defendant to quash execution.
Plaintiff's motion for issuance of execution under section 685, Code of Civil Procedure, was made to enforce the payment of alimony for the period from November 1, 1928, to and including August 1, 1941. In addition to such motion, plaintiff also filed a petition for the issuance of such writ of execution pursuant to section 685, supra.
In support of the motion and said petition, plaintiff filed her affidavit dated July 26, 1946, which avers that both the interlocutory and final decrees of divorce provide for the payment to her of $50 per month beginning November 1, 1928, but that defendant has made no payments whatsoever, although affiant has made numerous requests and demands for such payment; that defendant has always told affiant that he had no funds and could not make such payments; that affiant was unable to discover any funds from which she could collect by means of execution; that prior to 1943, defendant was an automobile salesman and affiant was unable to find any property upon which she could levy execution; that on February 28, 1943, affiant moved to, and since that time has been a resident of, Macomb, Illinois; that at no time has affiant had sufficient funds to attempt to locate any property of defendant; that affiant relied upon defendant's representations that he had no money and could not pay the alimony; that defendant stated he was unable to support their two children and caused affiant to send them to the home of defendant's sister. Plaintiff further avers that she "has just ascertained that the defendant had become the owner of a new and used automobile business known as the James Motor Company; *117 that said defendant is a Dodge and Plymouth dealer; that plaintiff had not known these facts and had been unable to ascertain them sooner. That in order to prevent the plaintiff from attempting to collect said alimony defendant has represented to plaintiff and convinced plaintiff that he had no funds and no property and that he was unable to make the $50.00 a month payments to plaintiff herein. That by reason of his representations of no funds, and no property the defendant prevented the plaintiff from levying execution and thereby collecting her alimony. That the defendant, within the past few years, has made large sums of money and has invested same in the automobile business and is in a position to pay said back alimony."
In opposition to plaintiff's motion, defendant filed his affidavit in which it is averred that "at no time has plaintiff exercised the diligence necessary to entitle her to have execution issue on the judgment in this matter should she be otherwise entitled thereto"; that at frequent intervals since 1928, affiant and plaintiff had "seen each other or conversed with each other"; that "plaintiff has at all times been able to locate defendant either through her own knowledge and conversations with defendant or by reason of her constant contact with defendant's family and relatives. That from the years 1930 to 1936 affiant was employed by the Merchant's Protective Agency of Kansas City and was earning in excess of $300.00 per month. That in 1936, plaintiff met affiant in Peoria, Illinois, and took him to his mother's home in Macomb, Illinois, where plaintiff was then residing. That at that time plaintiff suggested that she and affiant forget their differences and remarry. That from the years 1936 to 1941 affiant was employed in Los Angeles by the Commercial Discount Company and was earning in excess of $400.00 per month. That plaintiff was familiar with affiant's whereabouts and had plaintiff caused records to be searched the records would have revealed automobiles standing in affiant's name. That from the years 1941 to 1945 affiant was employed by Falws & McGhie, automobile dealers, as their manager and was earning in excess of $400.00 per month. That plaintiff was familiar with affiant's occupation and failed to take any action. That from time to time since 1936, affiant had a side business in selling used cars which he bought with his own funds. That plaintiff was familiar with this business and at one time telephoned affiant to determine whether he *118 would sell her an automobile more cheaply than she could obtain one elsewhere. That at no time has affiant hidden any assets from plaintiff and has at no time avoided plaintiff. That plaintiff never sought execution of her claims for alimony for the reason that under an agreement with affiant's sister, plaintiff agreed to forego such claims as long as affiant's sister took the minor children of the parties hereto into her home and gave them an education. That from time to time affiant's sister and brother-in-law supported plaintiff and gave her money although they were under no obligation so to do. That this was done by reason of the friendliness which arose by virtue of the working of said agreement and the mutual satisfaction obtained therefrom. That plaintiff preferred to accept the benefits of the said agreement to the right to the amounts allowed her under the decrees in this action."
"That the only time which affiant can recall in which the plaintiff requested money from him occurred in 1942 or 1943 when the plaintiff called affiant by telephone and stated that she was going East and asked if he would give her $150.00 to help her. That affiant refused such request, not on the grounds that he had no funds but on the grounds that he understood that his sister had sent her money for the trip and that if he gave her any she would spend it uselessly."
"That plaintiff has stated no reason why she did not seek execution under section C.C.P. 681 and affiant reasserts the reason was because plaintiff was accepting benefits greater than she would have obtained had she sought execution."
Thereafter, to wit, on October 11, 1946, plaintiff filed a counteraffidavit in which she averred that in 1929, she attempted to collect from defendant through orders to show cause and became convinced that he was then without funds or property; that thereafter defendant went to Kansas City and was employed in the middle west from 1930 to 1936, and that she did not know what he was earning; that he never informed her of his earnings during that period; and that during said time he was without the jurisdiction of the California courts. That she did not know where he was employed from 1936 to 1941, never knew what his earnings were and that defendant at all times informed her that he was barely making enough to exist and that he had no property; that defendant "has at all times hidden from plaintiff any property that he might have and that affiant never knew defendant *119 was operating a side business of selling used cars"; that she never agreed to forego any of her claims under the alimony judgment and that she did not obtain greater benefits than she would have obtained had she sought execution; that on the insistence of defendant's sister, Mrs. R. J. Neal, affiant "permitted both her children to live with Mrs. Neal. That affiant was never asked to waive any of her rights under the judgment herein and never did waive any rights under said judgment. That this affiant resided in the home of Hazel J. Neal and also resided in the home of defendant's mother about two years in the capacity of housekeeper without compensation. That affiant was told by defendant W. S. James on many occasions that he was barely breaking even and that he had no money, and upon occasions he asked this affiant to loan him money as he was having trouble supporting himself."
"That no agreement whatsoever was ever entered into between plaintiff and members of defendant's relatives, wherein the relatives would provide support and education for the children in lieu of the sum to which plaintiff was entitled by reason of the divorce decree. That the support of the children was not made in consideration that the plaintiff would take no steps to enforce the decree or until the children reached their majority. That no agreement in reference to waiver of alimony was ever discussed between the plaintiff and the defendant or between the plaintiff and the defendant's sister." Plaintiff also averred that she was away from the State of California from the fall of 1933 to February. 1937, and from February 28, 1943, to date of making the instant affidavit, and that during these periods she remained in Macomb, Illinois.
"That said defendant, because of his absence from the State and because of his claiming that he had no funds and could not support the affiant herein and could not make the payments of alimony and because of the absence of affiant from the State of California from 1933 to 1937 and since February 1943, as aforesaid, and because of misrepresentations by the said defendant and the representations that he was without funds to make any payments and because of his insistence that said children be left with the sister of said defendant and his statements that he could not afford to pay for their support, and affiant believing said statements, this affiant affirms that she was excused from making any effort to reach the property of this defendant, having no knowledge of same and no money to expend for a search." *120
Plaintiff submits that the trial court abused its discretion in refusing to issue execution under section 685, Code of Civil Procedure, because (1) any attempt on her part to have execution levied during the first five years when defendant was absent from California would have been an idle act; (2) that the reasons presented by her for not obtaining an execution during the five-year period are sensible and logical; and (3) the judgment has never been satisfied or paid.
[1, 2] Our Supreme Court held in John P. Mills Org. v. Shawmut Corp., 29 Cal. 2d 863, 864 [179 P.2d 570], that "A judgment creditor seeking to enforce his judgment more than five years after its entry must show, by affidavit, that he exercised reasonable diligence to enforce his judgment during the statutory period in which he might have obtained a writ of execution as a matter of right. (Butcher v. Brouwer, 21 Cal. 2d 354 [132 P.2d 205]; Beccuti v. Colombo Baking Co., 21 Cal. 2d 360 [132 P.2d 207]; Hatch v. Calkins, 21 Cal. 2d 364 [132 P.2d 210].) Whether he exercised due diligence is for the trial court to determine in its discretion, and its decision upon conflicting affidavits will not be disturbed. (Beccuti v. Colombo Baking Co., supra; cf. Kraner v. Snow Mountain W. & P. Co., 203 Cal. 126, 127 [262 P. 1094].)"
In McNabb v. McNabb, 47 Cal. App. 2d 623, 627 [118 P.2d 869], it was stated: "The discretion referred to in this section (685, Code Civ. Proc.) is not a capricious or arbitrary discretion, but an impartial discretion, guided and controlled in its exercise by fixed legal principles and intended to subserve and not to impede or defeat the ends of substantial justice. If, on appeal, it be doubtful whether the excuse offered is sufficient or not the judgment of the trial court will not be disturbed, and its decision will not be reversed except for a clear abuse of discretion. (McClelland v. Shaw, 23 Cal. App. 2d 107 [72 P.2d 225].)"
[3] The motion here under consideration was made to enforce execution as to the alimony payments falling due within the period from November 1, 1928, to and including August 1, 1941. Plaintiff's affidavit avers that in 1929, she attempted to collect through orders to show cause and became convinced that defendant was then without funds or property. It is undisputed that defendant was absent from this state from 1930 to 1936, and that plaintiff also was away from California from the fall of 1933 to February, 1937, and again from February, 1943, to about October 1, 1946. It is *121 apparent from this that both parties were within the jurisdiction of the courts of this state from February, 1937, to February, 1943, during which period defendant avers he was working and earning in excess of $400 per month.
If it be conceded that it would have been an idle act for her to attempt to execute on her judgment during defendant's absence from California, as plaintiff now contends, it must also be conceded that for the succeeding six years intervening from February, 1937, to February, 1943, plaintiff failed to use the slightest diligence to uncover assets of defendant subject to execution. Apropos of this phase of the case, the Supreme Court in Butcher v. Brouwer, 21 Cal. 2d 354, 357 [132 P.2d 205], construed section 685, Code of Civil Procedure, as amended in 1933, to the following effect:
"Section 685 of the Code of Civil Procedure, before it was last amended, provided in part as follows: 'In all cases the judgment may be enforced or carried into execution after the lapse of five years from the date of its entry, by leave of the court, upon motion ...' As so worded, it has many times been construed by the appellate courts which held that although the enforcement of a dormant judgment by execution issued in response to the creditor's motion was a matter within the sound discretion of the trial court ... mere lapse of time was not in itself a sufficient ground for the denial of the motion. ... Nor did the failure of the judgment creditor to make any effort to enforce his judgment within five years after its entry, or at a later time, afford a ground for the denial of the motion. ... And the motion was properly granted although, during the five years following the judgment, the judgment debtor possessed property which could have been discovered and subjected to the judgment. ... As a practical matter, therefore, by this construction of the statute a creditor, almost as a matter of right, might obtain an execution many years after the five-year period fixed by section 681."
"In 1933, the Legislature added to the section the requirement that a creditor desiring an execution at a time more than five years following the entry of judgment must make his motion 'after due notice to the judgment debtor accompanied by an affidavit or affidavits setting forth the reasons for failure to proceed in compliance with the provisions of section 681 of this code. The failure to set forth such reasons as shall, in the discretion of the court, be sufficient, *122 shall be ground for the denial of the motion.' Section 681 provides: 'The party in whose favor judgment is given may, at any time within five years after the entry thereof, have a writ of execution issued for its enforcement.'"
"Considering the strict construction against the debtor which the appellate courts had placed upon section 685 before the change and the requirements added at that time, it is clear that the principal object of the new enactment was to place upon a creditor seeking to enforce a judgment more that five years after its entry, the burden of showing why he was not able to satisfy his claim within the statutory period during which he is entitled to an execution as a matter of right. ( 681, Code Civ. Proc.) ... in view of the legislative and judicial history of section 685, its present provisions should be construed as authorizing the court to give a creditor an execution only if, during the five years following entry of judgment, he exercised due diligence in locating and levying upon property owned by the debtor, or in following available information to the point where a reasonable person would conclude that there was no property subject to levy within that time. And even though the creditor may have satisfied the court that he has proceeded with due diligence to enforce his judgment under section 681, the court may still deny him its process if the debtor shows circumstances occurring subsequent to the five-year period upon which, in the exercise of a sound discretion, it should conclude that he is not now entitled to collect his judgment." (Emphasis added.)
In the circumstances here presented, including the conflicting affidavits of the parties, it cannot be said that the court abused its discretion when it denied plaintiff's motion.
[4] Turning to defendant's cross-appeal from the order of October 14, 1946, denying his motions to quash the writ of execution issued pursuant to order of court on August 30, 1946, it appears from cross-appellant's opening brief that plaintiff (cross-respondent) "obtained on August 30, 1946, an execution for the period of five years immediately preceding August 1, 1946, together with interest thereon alleging that no payments had been made on such judgment. Defendant (cross-appellant) sought to quash the issuance of such execution by filing his motion to quash and recall based on Shields v. Superior Court, 138 Cal. App. 151 [31 P.2d 1045]. ... Said motion was subsequently denied by stipulation on October 14, 1046." Cross-appellant admits that this court *123 is bound by the decision in Lohman v. Lohman, 29 Cal. 2d 144, 150 [173 P.2d 657], to the effect that a creditor is entitled, as a matter of right, to execution on a judgment payable in installments for all amounts which have accrued within five years from the date of the application therefor, and disapproving Shields v. Superior Court, 138 Cal. App. 151 [31 P.2d 1045]. (Emphasis added.)
For the reasons stated, the order of October 14, 1946, denying plaintiff's motion for writ of execution and denying defendant's motions to quash execution, is affirmed.
White, J., and Doran, J., concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315940/ | 694 S.E.2d 771 (2010)
Charlene NELSON, Executrix of the Estate of Lucille Virginia Jones, Plaintiff
v.
Gerry BENNETT, Inez Hagaman, Lynda Frejlach, Brian Eanes, Stacey Eanes Angstadt, William Holt, and Delores Holt, Defendants.
No. COA09-896.
Court of Appeals of North Carolina.
June 15, 2010.
*772 Law Office of Michael W. Patrick, by Michael W. Patrick, Chapel Hill, for defendant-appellant, Lynda Frejlach.
Burns, Day & Presnell, P.A., by Lacy M. Presnell, III, Raleigh, and James J. Mills, for defendant-appellee, Inez Hagaman.
ERVIN, Judge.
Defendant Lynda Frejlach appeals from an order entered by the trial court construing the will of Lucille Virginia Jones to provide that Ms. Jones' will granted Ms. Frejlach a life estate in a house and eleven acres of real property located in Chatham County that was terminable upon the occurrence of certain triggering events. After careful consideration of the arguments advanced in the parties' briefs in light of the record and the applicable law, we affirm in part and reverse in part.
I. Factual Background
A. Substantive Facts
Ms. Jones died testate on 18 February 2008. Her last will and testament was dated 2 September 1998. Prior to her death, Ms. Jones owned a house and eleven acres of land located at 493 Gardner Road in Apex, North Carolina. Ms. Frejlach lived in the Gardner Road residence with Ms. Jones and assisted Ms. Jones with the design and construction of the Gardner Road residence. Ms. Frejlach alleges that, during this interval, she acquired numerous items of personal property which she stored at the Gardner Road residence based on her understanding that she would inherit the house at some point in the future. In addition, Ms. Frejlach asserts that Ms. Jones told her on numerous occasions that the residence would be left to her following Ms. Jones' death. In approximately 1997 or 1998, Ms. Frejlach left the Gardner Road residence and moved to Illinois.
After her death, Ms. Jones' will was admitted to probate. Item II.B.6 of Ms. Jones' will provided that:
I give the right for life to Lynda Frejlach to live in the house located on the 11 acres of property I own at 493 Gardner Road, Apex, NC, 27502. At her death or if Lynda Frejlach declines to exercise this right, I give this 11 acres of property to my sister, Inez [Hagaman]. This right is only *773 for Lynda Frejlach to live in the house. The house is not to be used for a business or Bed and Breakfast and is not to be leased out by Lynda Frejlach. As indicated earlier, the personal property within the house which I currently own will belong to my sister, Inez [Hagaman], and should not be sold or disposed of by Lynda Frejlach.
As of 27 October 2008, Ms. Frejlach had not occupied the Gardner Road residence. According to Ms. Frejlach, the Gardner Road residence was in "a state of extreme clutter and disorder" at the time of Ms. Jones' death, a situation which made it difficult for Ms. Frejlach to locate and remove all of the items of her personal property which she left in the house at the time of her departure for Illinois and which rendered the house "not fit to live in at present." In addition, Ms. Frejlach contended that she "could not occupy the Gardner Road residence until many items of [Ms. Jones'] personal property-to which [she] has no claim-are removed from the residence."
B. Procedural Facts
On 27 October 2008, Charlene Nelson, as Executrix of Ms. Jones' estate, filed a declaratory judgment action in the Superior Court of Chatham County against Gerry Bennett, Ms. Hagaman, Ms. Frejlach, Brian Eanes, Stacey Eanes Angstadt, William Holt, and Delores Holt seeking, among other things, a determination of whether Ms. Frejlach had a license, rather than a life estate, in the Gardner Road property and whether Ms. Frejlach had implicitly renounced her right to live there. On 24 December 2008, Ms. Frejlach filed an answer and cross-claim in which she asked the court to declare that Ms. Jones' will had granted her a life estate in the Gardner Road property and that she had not renounced her interest in the property in question. On 23 January 2009, Ms. Hagaman filed an answer in which she asserted that Ms. Jones' will devised a defeasible life estate in the Gardner Road property to Ms. Frejlach and that Ms. Frejlach had declined to accept this life estate, effectively making Ms. Hagaman the owner of the Gardner Road property.
On 26 March 2009, the trial court entered an order interpreting Ms. Jones' will to devise Ms. Frejlach a defeasible life estate in the Gardner Road property, with this life estate terminable in the event that Ms. Frejlach (1) expressly declined the life estate in writing;[1] (2) failed to reside in the Gardner Road residence beginning on or before 27 April 2009; (3) used the Gardner Road house or property for business purposes or as a bed and breakfast inn; (4) leased the house or property; or (5) ceased to reside in the Gardner Road residence. In its order, the trial court certified the issue of the proper interpretation of Item II.B.6 of Ms. Jones' will for immediate appellate review pursuant to N.C. Gen.Stat. § 1A-1, Rule 54(b). Ms. Frejlach gave notice of appeal to this Court from the trial court's order on 27 April 2009.
II. Legal Analysis
A. Jurisdiction
The trial court's order did not resolve all of the issues raised by the estate's request for declaratory relief and is, for that reason, not a final decision. The Court of Appeals has jurisdiction over appeals from orders that represent a final judgment as to one or more, but not all, of the claims or parties involved in a particular civil action and the trial court certifies, as it has done in this instance, that there is no just reason for delay. N.C. Gen.Stat. § 1A-1, Rule 54(b); see First Atl. Mgmt., Corp. v. Dunlea Realty, Co., 131 N.C.App. 242, 507 S.E.2d 56 (1998). The trial court's order finally disposes of the claims involving Ms. Frejlach's interest in the Gardner Road property. As a result, this Court has jurisdiction over Ms. Frejlach's challenge to the trial court's order.
*774 B. Standard of Review
"The Declaratory Judgment Act, [N.C. Gen.Stat. § ] 1-253 et seq., affords an appropriate procedure for alleviating uncertainty in the interpretation of written instruments...." Hejl v. Hood, Hargett & Associates, Inc., ___ N.C.App. ___, ___, 674 S.E.2d 425, 427 (2009) (citation omitted). "`The standard of review in declaratory judgment actions where the trial court decides questions of fact is whether the trial court's findings are supported by any competent evidence. Where the findings are supported by competent evidence, the trial court's findings of fact are conclusive on appeal.'" Cross v. Capital Transaction Grp., Inc., 191 N.C.App. 115, 117, 661 S.E.2d 778, 780 (2008) (citation omitted), disc. review denied, 363 N.C. 124, 672 S.E.2d 687 (2009). "`However, the trial court's conclusions of law are reviewable de novo.'" Id. (quoting Browning v. Helff, 136 N.C.App. 420, 423, 524 S.E.2d 95, 98 (2000)). As a result of the fact that there are no factual disputes between the parties, the ultimate issue that we must resolve is the appropriate construction of Item II.B.6 of Ms. Jones' will.
C. Construction of Ms. Jones' Will
"An estate in fee simple determinable is created by a limitation in a fee simple conveyance which provides that the estate shall automatically expire upon the occurrence of a certain subsequent event." Station Assoc., Inc. v. Dare County, 350 N.C. 367, 370, 513 S.E.2d 789, 792 (1999) (citing Elmore v. Austin, 232 N.C. 13, 20-21, 59 S.E.2d 205, 211 (1950)). "Like a fee, a life estate may be defeasible if its continued existence is conditional." Brinkley v. Day, 88 N.C.App. 101, 106, 362 S.E.2d 587, 590 (1987) (citing Blackwood v. Blackwood, 237 N.C. 726, 76 S.E.2d 122 (1953)). "The law does not favor a construction of the language in a deed which will constitute a condition subsequent unless the intention of the parties to create such a restriction upon the title is clearly manifested." Washington City Board of Education v. Edgerton, 244 N.C. 576, 578, 94 S.E.2d 661, 664, (1956). For that reason, the Supreme Court "has declined to recognize reversionary interests in deeds that do not contain express and unambiguous language of reversion or termination upon condition broken" and has "stated repeatedly that a mere expression of the purpose for which the property is to be used without provision for forfeiture or reentry is insufficient to create an estate on condition...." Station Assoc., 350 N.C. at 370, 371, 513 S.E.2d at 792, 793. However, "in those cases in which the deed contained express and unambiguous language of reversion or termination, we have construed a deed to convey a determinable fee or fee on condition subsequent." Id., 350 N.C. at 371-72, 513 S.E.2d at 793. "The language of termination necessary to create a fee simple determinable need not conform to any `set formula'" as long as "`any words expressive of the grantor's intent that the estate shall terminate on the occurrence of the event' or that `on the cessation of [a specified] use, the estate shall end,'" are used. Id., 350 N.C. at 373-74, 513 S.E.2d at 794 (quoting Lackey v. Hamlet City Board of Education, 258 N.C. 460, 464, 128 S.E.2d 806, 809 (1963), and Charlotte Park and Recreation Commission v. Barringer, 242 N.C. 311, 317, 88 S.E.2d 114, 120 (1955), cert. denied sub nom., 350 U.S. 983, 76 S. Ct. 469, 100 L. Ed. 851 (1956)). As a result, the fundamental question that we must resolve in construing Item II.B.6 of Ms. Jones' will is determining whether it clearly expresses an intent that the life estate granted to Ms. Frejlach would automatically terminate upon the occurrence of one or more of the events described there.
It is an elementary rule ... that the intention of the testat[rix] is the polar star which is to guide in the interpretation of all wills, and, when ascertained, effect will be given to it unless it violates some rule of law, or is contrary to public policy. In determining the testat[rix]'s intention, the primary source is the language used by the testat[rix]. Isolated clauses are not to be considered out of context, but rather the entire will is to be examined as a whole so as to ascertain the general plan of the testat[rix].
Edmunds v. Edmunds, 194 N.C.App. 425, 433, 669 S.E.2d 874, 879 (2008), aff'd per curiam, 363 N.C. 740, 686 S.E.2d 150 (2009) (quoting Pittman v. Thomas, 307 N.C. 485, *775 492, 299 S.E.2d 207, 211 (1983) (internal quotations omitted)). "`The intent of the testat[rix] must be gathered from the four corners of the will and the circumstances attending its execution.'" Ward v. Ward, 88 N.C.App. 267, 269, 362 S.E.2d 847, 849 (1987), disc. review denied, 322 N.C. 115, 367 S.E.2d 921 (1988) (citation omitted). When interpreting a will, "every word and clause must, if possible, be given effect and apparent conflicts reconciled." Slater v. Lineberry, 89 N.C.App. 558, 559, 366 S.E.2d 608, 610 (1988).
A careful analysis of the language of Item II.B.6 of Ms. Jones' will discloses that those portions of the will providing that "[t]he house is not to be used for a business or Bed and Breakfast and is not to be leased out by [Ms.] Frejlach" are unaccompanied by any "express and unambiguous language of reversion or termination upon condition broken," Station Assoc., 350 N.C. at 370, 513 S.E.2d at 793, and amount to "a mere expression of the purpose for which the property is to be used without provision for forfeiture or reentry." Id. at 371, 513 S.E.2d at 793. We are particularly persuaded of the correctness of this conclusion given the Supreme Court's clear statement that the creation of defeasible interests is disfavored.[2] As a result, we conclude that the trial court erred by construing Item II.B.6 to provide that Ms. Frejlach's life estate[3] terminates if she "uses the house or property for business purposes or as a bed and breakfast" or if she "leases the house or property."
On the other hand, the language providing that Ms. Jones "give[s] the right for life to [Ms.] Frejlach to live in the house" located on Gardner Road and that, "if [Ms.] Frejlach declines to exercise this right, I give this 11 acres of property to" Ms. Hagaman is not merely precatory.[4] We are unable to understand the "right" to be "exercised" as anything other than Ms. Frejlach's right to live on the Gardner Road property. Although this portion of Item II.B.6 lacks some of the language that is frequently found in instruments creating defeasible interests, such as "so long as" or "on the condition that," the relevant provisions of Item II.B.6 do clearly state that, in the event that Ms. Frejlach does not "exercise this right" to live on the property, it goes to Ms. Hagaman. As a result, we are unable to avoid the conclusion that Item II.B.6 of Ms. Jones' will does grant Ms. Frejlach a life estate in the Gardner Road property that is subject to termination in the event that she chooses not to live there.
Our dissenting colleague rejects this reading of Item II.B.6 of Ms. Jones' will on the *776 grounds that, "[r]eading the devise in the sequence transcribed by the testatrix, it appears that Ms. Jones' intent was merely to devise appellant Frejlach a life estate in which the testatrix desired her to live in the house" and that, "[a]t best, the devise to appellant in item II, paragraph (B)(6) would be defeasible only upon appellant Frejlach's death or her declining to exercise her right to the devised property, at which point the property would vest in appellee Hagaman." As a result, the dissent concludes that "this language would essentially create a `plain vanilla' life estate, because any life estate devised is only defeasible upon the death of the life tenant or upon a devisee's decision to renounce the estate.[5]" We are not persuaded by this logic because it fails to give sufficient effect to Ms. Jones' very specific and repeated use of the word "live." As used in this context, "live" means "to make one's dwelling; reside." Webster's New World Dictionary of the American Language, 857 (1957). We believe that, under the canons of construction discussed above, we must assume that Ms. Jones chose her words carefully and intended to use the language that she used. In the event that one accepts the logic of our dissenting colleague, Ms. Frejlach could retain a life estate in the Gardner Road property without ever setting foot on the premises, a result which we have difficulty squaring with Ms. Jones' explicit statement that she gave Ms. Frejlach the right "to live in the house" located on Gardner Road "for life" and that, if Ms. Frejlach "declines to exercise this right, I give this 11 acres of property to" Ms. Hagaman.[6] Thus, since the logic adopted by our dissenting colleague does not give effect to what we believe to be Ms. Jones' clear intention to divest Ms. Frejlach of her life estate in the event that she failed to live on the Gardner Road property, we do not find the approach taken in the dissent persuasive.[7]
Thus, for the reasons set forth above, we conclude that the trial court erred by finding that Item II.B.6 of Ms. Jones' will gave Ms. Frejlach a life estate in the Gardner Road property that terminated in the event that she "use[d] the house or property for business purposes or as a bed and breakfast" or if she "lease[d] the house or property." On the other hand, we conclude that the trial court correctly determined that Ms. Frejlach's life estate was subject to termination in the event that she did not "reside in the house" or "cease[d] to reside in the house on the property...." As a result, for the *777 reasons set forth above, the trial court's order is affirmed in part and reversed in part.
AFFIRMED IN PART AND REVERSED IN PART.
Judge STROUD concurs.
Judge ROBERT N. HUNTER, JR., concurs in part and dissents in part in separate opinion.
HUNTER, JR., ROBERT N., Judge, concurring in part and dissenting in part.
Although I agree with my colleagues that the language suggesting that Ms. Frejlach may not use the home as a business is precatory, our opinions differ with regard to whether Ms. Frejlach is required to live in the devised home as a condition subsequent. After reviewing the language of Item II(B)(6), I do not find a significant distinction between the language of desire that Ms. Frejlach not use the home as a business and the language desiring that Ms. Frejlach live on the premises. The majority opinion does not provide such a distinction.
For instance, the pertinent language in dispute provides: "I give the right for life to Lynda Frejlach to live in the house located on the 11 acres of property I own.... At her death or if Lynda Frejlach declines to exercise this right, I give this 11 acres of property to my sister, Inez Hageman." This devise does not contain definite language of reversion or re-entry based on a condition that Ms. Frejlach live in the home, but rather provides for clear and definite events of defeasance only in the event of death or renunciation. With regard to this language, N.C. Gen.Stat. § 31B-2 (2009) provides a methodology for renouncing or declining a devise, and the death of the tenant always results in the end of a life estate. Thus, the testator's own words would lose their meaning if the majority's interpretation of the will is employed.
When interpreting a will, "every word and clause must, if possible, be given effect and apparent conflicts reconciled." Slater v. Lineberry, 89 N.C.App. 558, 559, 366 S.E.2d 608, 610 (1988). It has been long held that "`[o]rdinarily a clause in [an instrument] will not be construed as a condition subsequent, unless it contains language sufficient to qualify the estate conveyed and provides that in case of a breach the estate will be defeated, and this must appear in appropriate language sufficiently clear to indicate that this was the intent of the parties.'" Station Assoc., Inc. v. Dare County, 350 N.C. 367, 370, 513 S.E.2d 789, 792 (1999) (quoting Ange v. Ange, 235 N.C. 506, 508, 71 S.E.2d 19, 20 (1952); see also Church v. Refining Co., 200 N.C. 469, 473, 157 S.E. 438, 440 (1931); Braddy v. Elliott, 146 N.C. 578, 580-81, 60 S.E. 507, 508 (1908)).
A condition subsequent will not be recognized unless the language of the instrument contains "express and unambiguous language of reversion or termination upon condition broken." Station Assoc., 350 N.C. at 370, 513 S.E.2d at 792. In Station Assoc., the Court notes a plethora of cases which support the aforementioned proposition:
Washington City, 244 N.C. at 577, 578, 94 S.E.2d at 662, 663 (habendum clause contained expression of intended purpose "for school purposes"; held fee simple because no power of termination or right of reentry was expressed); Ange, 235 N.C. at 508, 71 S.E.2d at 20 (habendum clause contained the language "for church purposes only"; nevertheless held to be an indefeasible fee since there was "no language which provides for a reversion of the property to the grantors or any other person in case it ceases to be used as church property"); Shaw Univ. v. Durham Life Ins. Co., 230 N.C. 526, 529-30, 53 S.E.2d 656, 658 (1949) (property and the proceeds therefrom were to be "perpetually devoted to educational purposes"; held fee simple absolute since there was "nothing in the... deed to indicate the grantor intended to convey a conditional estate," and there was "no clause of re-entry, no limitation over or other provision which was to become effective upon condition broken"); Lassiter v. Jones, 215 N.C. 298, 300-01, 1 S.E.2d 845, 846 (1939) (deed conveyed property "for the exclusive use of the Polenta Male and Female Academy; it shall be used exclusively for school purposes"; held to have conveyed a fee simple "for the reason that nowhere in the deed is there a *778 reverter or reentry clause"); First Presbyterian, 200 N.C. at 470-71, 473, 157 S.E. at 438-39, 440 (habendum clause indicated that the property was to be used for church purposes only; held to be an indefeasible fee simple, notwithstanding the language in the habendum clause, since there was "no language showing an intent that the property shall revert to the grantor... or that the grantor ... shall have the right to reenter."); Hall v. Quinn, 190 N.C. 326, 328-29, 130 S.E. 18, 19-20 (1925) (granting clause and habendum clause both indicated that the property was "to be used for the purposes of education" only; held to be an estate in fee simple because there was "no clause of re-entry; no forfeiture of the estate upon condition broken"); Braddy, 146 N.C. at 580-81, 60 S.E. at 508 (recitals that the grantor was to improve the property did not create an estate upon condition since there was an absence of an express reservation in the deed of a right of reentry).
Id. at 370-71, 513 S.E.2d at 792-93. On the other hand, the Court also provided that an estate has been recognized by courts as defeasible or subject to condition subsequent where the habendum clause "contain[s] express and unambiguous language of reversion or termination...." Id. at 371, 513 S.E.2d at 793. The following cases were recognized by the Court in support:
Mattox v. State, 280 N.C. 471, 472, 186 S.E.2d 378, 380 (1972) (habendum clause contained condition that if the grantee failed to continuously and perpetually use the property as a Highway Patrol Radio Station and Patrol Headquarters, the land "shall revert to, and title shall vest in the Grantor"); City of Charlotte v. Charlotte Park & Rec. Comm'n, 278 N.C. 26, 28, 178 S.E.2d 601, 603 (1971) (habendum clause contained language that "upon condition that whenever the said property shall cease to be used as a park ..., then the same shall revert to the party of the first part"); Lackey v. Hamlet City Bd. of Educ., 258 N.C. 460, 461, 128 S.E.2d 806, 807 (1963) (deed contained paragraph providing, "It is also made a part of this deed that in the event of the school's disabandonment (failure) ... this lot of land shall revert to the original owners"); Charlotte Park & Rec. Comm'n v. Barringer, 242 N.C. 311, 313, 88 S.E.2d 114, 117 (1955) (deed indicated that in the event the lands were not used solely for parks and playgrounds, the "said lands shall revert in fee simple to the undersigned donors"), cert. denied, 350 U.S. 983 [76 S. Ct. 469] 100 L. Ed. 851 (1956); Pugh v. Allen, 179 N.C. 307, 308, 102 S.E. 394, 394 (1920) (deed contained provision that "in case the said James H. Pugh should die without an heir the following gift shall revert to the sole use and benefit of my son"); Smith v. Parks, 176 N.C. 406, 407, 97 S.E. 209, 209 (1918) (deed indicated that "should [grantor] die without leaving such heir or heirs, then the same is to revert back to her nearest kin"); Methodist Protestant Church of Henderson v. Young, 130 N.C. 8, 8-9, 40 S.E. 691, 691 (1902) (deed expressed that if the church shall "discontinue the occupancy of said lot in manner as aforesaid, then this deed shall be null and void and the said lot or parcel of ground shall revert to [the grantor]").
Id. at 372, 513 S.E.2d at 793.
Applying the aforementioned case law to the present case, the testatrix's use of the words "live in the house" and the statement that the house is not to be used for certain purposes are not clear expressions that the property shall revert to the grantor or that the estate will automatically terminate upon the happening of those stated events. Standing alone these provisions are "precatory"[1] and therefore not recognized as valid to create conditions subsequent by our Court, and considered mere surplusage, without effect. See id. at 370, 513 S.E.2d at 792-93.
The problem presented by precatory words is not new and has been employed in an endless variety of legal disputes. Brinn v. Brinn, 213 N.C. 282, 287, 195 S.E. 793, 796 *779 (1938) suggests the following method of analysis:
Where, however, a limited estate is devised to the first taker, words of recommendation, request, entreaty, wish, or expectation addressed to the legatee or devisee will ordinarily make the first taker a trustee for the person or persons in whose favor such expressions are used, provided the testator has pointed out with sufficient clearness and certainty both the subject matter and the objects of the intended trust. Such words of recommendation or request when used in direct reference to the estate are held to be prima facie testamentary and imperative and not precatory. When accompanying a limited gift or bequest, words of request or desire or recommendation that a particular application be made of such bequest will be deemed to impose a trust upon these conditions: (a) That they are so used to exclude all option or discretion in the party who is to act, as to his acting according to them or not; (b) the subject is certain; and (c) the objects expressed are not too vague or indefinite to be enforced. This is particularly true when those in behalf of whom the requests are made are natural objects of the bounty of the testator and no other disposition of the remainder of the estate after the limited estate is made.
Id. (citations omitted).
Using this analysis, a directive that the life tenant must "live" on the property is simply too vague and indefinite to be enforced. When does someone "live" on the property. Must it be her domicile? Must she register to vote there? Can she "live" in more than one place at the same time? If she lists the property for taxes or cuts standing timber, is she living on the property? The majority's decision would seem to allow Ms. Frejlach the ability to rent the property or use it for a business and that these terms would not cause a reversion. In my opinion, the drafter of the will and the testatrix intended "living" and the incidents of "life estate" as identical in meaning and effect.
As the law does not favor restrictions on the title to land unless clearly manifested in the instrument, pursuant to long held precedent, this language should be construed to provide that Inez Hagaman has a remainder, fee simple absolute interest in the home at Ms. Frejlach's death or if Ms. Frejlach declines to accept the devise, at which point her interest in the home would lapse and vest in Ms. Hagaman. See Board of Education v. Edgerton, 244 N.C. 576, 94 S.E.2d 661, 664 (1956) (stating that the law does not favor restrictions on the title to land; therefore, the intention of the party to create a condition subsequent must be clearly manifested through the language of the instrument).
Finally, our Courts presume that the person drafting the will, whether an attorney or layman, knows the law and will apply the law correctly while drafting the will. Austin v. Austin, 160 N.C. 367, 368, 76 S.E. 272, 272 (1912). This will was clearly drafted by an attorney who would know how to draft a will with a reversionary clause in it.
Reading the devise in the sequence transcribed by the testatrix, it appears that Ms. Jones's intent was merely to devise appellant Frejlach a life estate in which the testatrix desired her to live in the house. At best, the devise to appellant in Item II, paragraph (B)(6) would be defeasible only upon appellant Frejlach's death or her declining to exercise her right to the devised property, at which point the property would vest in appellee Hagaman. As such, this language would essentially create a "plain vanilla" life estate, because any life estate devised is only defeasible upon the death of the life tenant or upon a devisee's decision to renounce the estate. See N.C. Gen.Stat. § 31B-1 (2009).
The trial court's order and the majority opinion, in lieu of declaring the rights of the parties, has the legal effect of creating right of entry language based on precatory conditions. A right of entry or reversionary language must be shown by the testator's language in the document and cannot be inferred by the court when interpreting the document. As there is no express and unambiguous language of reversion or termination upon the breach of the stated conditions, I would reverse the trial court and hold that Ms. Jones's will devised appellant Frejlach a life estate, and therefore I dissent *780 from the majority opinion on this issue.
NOTES
[1] On 24 February 2009, Ms. Frejlach filed a formal written acceptance of the life estate, while "respectfully request[ing] the Executor of the Estate to notify the undersigned when the personal property of [Ms.] Jones that has been left to other persons has been removed from that residence so that the residence is liveable and could be occupied by" Ms. Frejlach. As a result, any issue that may have otherwise arisen from the trial court's conclusion that Ms. Frejlach's tenancy would terminate in the event that she "decline[d] the life estate expressly in writing" is moot and need not be addressed on appeal.
[2] Although Ms. Hagaman argues that what we agree is clearly reversionary language applicable to that portion of Item II.B.6 of Ms. Jones' will requiring Ms. Frejlach to live on the Gardner Road property should be deemed applicable to the provisions of Item II.B.6 concerning the leasing and business-related use of the property, we are simply not persuaded by that argument. The only portion of Item II.B.6 to which the reversionary language in question appears to relate is the language which requires Ms. Frejlach to live on the property, and we believe that it would be inconsistent with the Supreme Court's insistence that such language be "express and unambiguous," Station Assoc., 350 N.C. at 370, 513 S.E.2d at 792, for the Court to treat that reversionary language as applicable throughout Item II.B.6.
[3] Although one of the questions about which Ms. Jones' estate originally sought the trial court's guidance was whether Item II.B.6 of Ms. Jones' will granted Ms. Frejlach a license or a life estate, no party to this appeal has challenged the trial court's determination that the relevant provision of Ms. Jones' will granted Ms. Frejlach a life estate in the Gardner Road property.
[4] The dissent claims to be unable to distinguish between the language used with respect to the portions of Item II.B.6 relating to the use of the Gardner Road property as a business or a bed and breakfast or the leasing of the Gardner Road property, on the one hand, and the portion of Item II.B.6 relating to the requirement that Ms. Frejlach live on the Gardner Road property, on the other. However, as we have already noted, there is no language such as the provision that the Gardner Road property will be given to Ms. Hagaman in the event that Ms. Frejlach dies or "declines to exercise this right" in that portion of Item II.B.6 relating to the leasing of the property or its use for business or bed and breakfast purposes. Thus, contrary to the argument advanced in the dissent, we believe that the language used in Item II.B.6 with respect to the requirement that Ms. Frejlach live on the Gardner Road property is, in fact, different from the language that we have concluded is, in fact, precatory in nature.
[5] In reaching this conclusion, the dissent equates a failure to exercise the right to live on the property with a formal renunciation of the interest granted by Item II.B.6 of Ms. Jones will of the type contemplated in N.C. Gen.Stat. § 31B-2. The dissent does not provide any justification for treating a failure to "exercise this right" and a formal renunciation as one and the same thing. After a careful study of Item II.B.6, we believe that the reference to "declin[ing] to exercise this right" should be understood as a reference to a failure on Ms. Frejlach's part to live on the Gardner Road property rather than to a formal renunciation of the life estate, with this conclusion based on the fact that the language of Item II.B.6 makes no reference to a formal renunciation and the fact that the relevant language indicates a clear intent on the part of Ms. Jones that Ms. Frejlach actually occupy the property. Furthermore, as long as any business or bed and breakfast use that Ms. Frejlach might make of the property or any lease that Ms. Frejlach might enter into with respect to the property does not prevent her from living there, such activities would not, as we read Item II.B.6, operate to terminate her interest in the Gardner Road property.
[6] The dissent argues that it is not clear what Ms. Frejlach would have to do in order to comply with the requirement that she "live" on the Gardner Road property and that this lack of clarity militates against a reading of Item II.B.6 that would require her to live on the property at the risk of losing her interest. Although we recognize that issues of fact might arise in the future as the result of Ms. Jones' choice of language, we do not believe that the potential that such issues might arise, in and of itself, introduces such uncertainty into Ms. Frejlach's life estate as to defeat the creation of a defeasible interest under the logic of Brinn v. Brinn, 213 N.C. 282, 287, 195 S.E. 793, 796 (1938).
[7] It is not clear to the Court whether Ms. Frejlach sought or obtained a stay of that portion of the trial court's order requiring her to take up residence on the Gardner Road property on or before 27 April 2009. We do not, however, believe that we need to concern ourselves with the appropriateness of the trial court's determination that Ms. Frejlach must occupy the Gardner Road residence by that date, since Ms. Frejlach has not assigned that portion of the trial court's order as error on appeal. N.C.R.App. P. 10(a).
[1] Precatory words are those which express a request or wish rather than a positive command. In the absence of a contrary intention manifested by the testator in the will, precatory words will not be made imperative. 1 WIGGINS, WILLS AND ADMINISTRATION OF ESTATES IN NORTH CAROLINA § 12.6 (4th ed.2005). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314618/ | 82 Ga. App. 422 (1950)
61 S.E.2d 293
AETNA CASUALTY & SURETY CO. et al.
v.
JONES.
33138.
Court of Appeals of Georgia.
Decided September 14, 1950.
Rehearing Denied October 6, 1950.
Martin, Snow & Grant, for plaintiffs in error.
Jones, Jones & Sparks, contra.
SUTTON, C. J.
This is a workmen's compensation case. The claimant, R. E. Jones, appealed from the award of a single director of the State Board of Workmen's Compensation denying compensation, and the award was affirmed by the full board. He then appealed to Bibb Superior Court, and the judge of that court entered judgment reversing the award denying compensation. The employer, Family Fund Life Insurance Company, *423 and its insurance carrier, AEtna Casualty and Surety Company, excepted to that judgment. The issue before this court is whether under the evidence a finding was demanded that the claimant was injured in an accident arising out of and in the course of his employment and therefore entitled to compensation.
While the claimant admittedly made false and contradictory statements to adjusters about his claim, particularly in regard to the events preceding the accident, in order to conceal his whereabouts and activities during the time, and his association with a fellow employee in the City of Macon, which would not have been regarded in a favorable light by their superiors, his testimony is uncontradicted in many respects, and when considered with the testimony of others, the following uncontroverted facts are shown: On Friday, August 15, 1947, and prior thereto, the claimant was employed by the Family Fund Life Insurance Company on a weekly salary basis, plus traveling expenses. He was a district supervisor of agents, his territory being the Sixth Congressional District of Georgia, excepting the City of Macon. His duties consisted of traveling about the territory supervising the work of agents and employing and helping train new agents in the territory when needed. The agents working under him made reports to him of their work, and he was required to send a weekly report of activities in his territory to the home office in Atlanta. He lived at Warner Robins, used his home as headquarters for his work, and spent much of his time traveling over his territory. On Thursday, August 14, 1947, he left his home for the purpose of going to Dublin to audit an account, but stopped in Macon to meet with the supervisor of city agencies in order to try to influence this supervisor to transfer an employee to him for use in his district, and he and this supervisor conferred about this matter on Thursday, spent Thursday evening in a hotel in Macon, and conferred about the same matter for a short time on the following morning. Later in the morning he met his assistant supervisor, having asked him to come to Macon, and he and his assistant supervisor looked over this assistant's report, conferred about personal matters, and planned a trip to Chattanooga, Tennessee, for the purpose of selling the assistant's automobile, and possibly interviewing a prospective employee. An attempt was also made to see a prospective employee *424 working for Firestone Stores in Macon, but he was not available. About 2 p. m. the claimant left his assistant and started home by the most direct route. After having gone about 4 miles in his automobile he sustained severe injuries to his left arm, which was being held outside the automobile, when it struck the right rear corner of a truck proceeding in the same direction, as he attempted to pass to the right of the truck, the driver of the truck having indicated by arm and hand signal that he was making a turn to the left. If he had not been involved in this accident, which prevented him from going home, and had he been able to go home, upon his arrival there it would have been necessary that he check any correspondence that might have arrived during his absence, and complete and mail to the home office a weekly report, before his week's work would have been completed. There was also a possibility that he would have made a trip to Hawkinsville that same day in regard to securing a new employee. His stated purpose in going home, as given to an insurance adjuster, was to get clothes for his contemplated trip to Chattanooga and to purchase groceries. He was not required to work on Saturday.
In addition to the above uncontroverted facts it was admitted by the claimant and his companion of Thursday evening that between them they consumed a pint of whisky during the evening, and the claimant admitted that he consumed two or three bottles of beer on Friday morning while waiting to meet his assistant supervisor. The claimant denied that he was intoxicated at the time of the accident, and persons observing him shortly before and after the accident testified to the same effect. The employer and the insurer pleaded intoxication at the time of the accident as the cause thereof, as an affirmative defense, and the hearing director found in favor of the claimant on this issue. Counsel for the employer and the insurer concede that this finding was authorized under the evidence and is conclusive.
"If the work of an employee or the performance of an incidental duty involves an exposure to the perils of the highway, the protection of the compensation act extends to the employee while he is passing along the highway in the performance of his duties." New Amsterdam Casualty Co. v. Sumrell, 30 Ga. App. 682 (2b) (118 S.E. 786). Where it appeared that the circulation *425 manager of a newspaper was killed when a sudden storm arose and a tree was blown across his automobile, crushing his head and producing almost instant death, while he was returning from a trip made for the purpose of transacting business with an agent of his employer, the court stated that "It must be held that the injury and death of MacKendree [the employee] arose out of his employment within the meaning of the compensation act." Globe Indemnity Co. v. MacKendree, 39 Ga. App. 58 (146 S.E. 46). An award granting compensation was authorized, under the holding of this court, where it appeared that a traveling salesman was killed while he was traveling in the performance of his duties when a tire on his automobile blew out. Employers Liability Assurance Corporation v. Montgomery, 45 Ga. App. 634 (165 S.E. 903). It was held by this court that a finding for the claimant was demanded, where it appeared that a traveling investigator was killed while the occupant of a hotel in Atlanta which burned, the employee having come to Atlanta to confer with his employer's attorneys on the following day. Railway Express Agency Inc. v. Shuttleworth, 61 Ga. App. 644 (7 S.E. 2d, 195). Where it appeared that the employee, a traveling salesman, fell from a stool in a lunchroom and broke his hip, causing his death, after having stopped to eat lunch while en route home after having been on a business trip, this court held that the evidence authorized a finding that the death was the result of injuries arising out of and in the course of the employment. Employers Liability Assurance Corp. v. Pruitt, 63 Ga. App. 149 (10 S.E. 2d, 275). A finding was authorized, under the holding of this court, that an accident arose out of and in the course of employment where a sales manager was injured while traveling for the purpose of fulfilling two objectives, going fishing and checking the records of a salesman leaving his employment. Hartford Accident & Indemnity Co. v. Welker, 75 Ga. App. 594 (44 S.E. 2d, 160). The Supreme Court held that a finding was demanded that the accidental injury arose out of and in the course of employment, where a traveling saleman slipped and fell, and fractured his skull, causing his death later, while crossing the street to go back to the hotel where he was registered, after having eaten dinner at a cafe across the street from the hotel, this employee having *426 stopped at the hotel in order to call on customers in the area. Thornton v. Hartford Accident & Indemnity Co., 198 Ga. 786 (32 S.E. 2d, 816). It was held by the same court that the injury and resultant death of an employee did not arise out of and in the course of his employment, where the employee had been requested to come to Savannah from Macon to confer about business matters, and after arriving in Savannah and registering at a hotel decided to go 18 miles further to the beach, the sole purpose of this trip being to get a sea-food dinner and to view the ocean, the accident occurring while on his way there when a tire blew out on the automobile in which he was riding. United States Fidelity & Guaranty Co. v. Skinner, 188 Ga. 823 (5 S.E. 2d, 9). The facts in this last case obviously distinguish it from the other cases previously mentioned.
Under the rulings in the foregoing cases, it appears that if the duties of an employee are such that he is required to travel away from his home to perform the duties of his employment, and sustains an accidental injury on account of exposure to such hazards as may arise from the fact of traveling, or something incidental thereto, in performing the duties of his employment, such an accidental injury is one arising out of and in the course of his employment under the provisions of the Workmen's Compensation Law. But if such an employee sustains an accidental injury because of exposure to some additional hazard arising solely on account of being engaged in the performance of a matter purely personal to him amounting to a deviation from those acts reasonably necessary in traveling and lodging away from home in order to perform the duties of his employment, such an accidental injury is not one arising out of and in the course of the employment under the provisions of the Workmen's Compensation Law.
The uncontroverted evidence in this case shows that the employee sustained an accidental injury on account of exposure to the hazards of travel in performing the duties of his employment, irrespective of the fact that he may also have been traveling on the highway at the time and place in order to attend to personal matters. Under the law applicable thereto a finding was demanded that the claimant sustained an accidental injury arising out of and in the course of his employment, entitling *427 him to compensation, and the judge of the superior court properly reversed the award denying compensation.
Judgment affirmed. Worrill, J., concurs. Felton, J., concurs in the judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314743/ | 61 S.E.2d 854 (1950)
GROTTENDICK
v.
WEBBER.
No. 10262.
Supreme Court of Appeals of West Virginia.
Submitted September 7, 1950.
Decided October 31, 1950.
*855 Kermit R. Mason, Morgantown, and Thomas W. Lewis, Kingwood, for appellant.
Parrack, Snyder & Wehner, Charles V. Wehner, Melvin C. Snyder, and R. Doyne Halbritter, all of Kingwood, for appellee.
LOVINS, President.
This suit originally brought by Charles Grottendick, guardian of Mary Grottendick, an infant, in the Circuit Court of Preston County against James F. Webber for the purpose of impeaching the last will and testament of Cecilia Webber, was formerly considered by this Court on appeal. The record then presented questions pertaining to the filing of an amended bill and direction and trial of an issue devisavit vel non, under Code, 41-5-11. It was held on that appeal that the amended bill setting up an additional cause for impeaching the will could be filed; that the inclusion of a new ground of impeachment of the will did not change the cause of action from that set forth in the original bill of complaint; and that the contestant of the will was entitled to have an issue devisavit vel non tried by a jury. Grottendick v. Webber, W. Va., 52 S.E.2d 700.
After remand Charles Grottendick, guardian, died, the suit was revived in the name of Anna K. Grottendick, guardian of Mary Grottendick, and the trial of the issue devisavit vel non was had before a jury, resulting in a verdict that the paper writing theretofore probated as and for the last will and testament of Cecilia Webber was not her will. James F. Webber, the son of Cecilia Webber, was the proponent of the will and *856 Anna K. Grottendick, guardian of Mary Grottendick, was the contestant. They will be hereinafter so designated.
Predicated upon such verdict the Circuit Court of Preston County, on September 22, 1949, decreed that the paper writing was not, nor was any part thereof, the true last will and testament of Cecilia Webber; that the former probate thereof in the office of the Clerk of the County Court of Preston County be set aside; and that contestant recover her costs. From that decree, proponent prosecutes an appeal to this Court.
Interlocutory proceedings were had and various rulings were made by the trial court prior to July 25, 1949. On that date a jury was impaneled, and the trial was commenced. The trial was concluded on July 28, 1949, when the jury returned the verdict: "We, the jury, find the paper writing dated November 1, 1945, in this case, is not the last will and testament of Cecilia Webber." A motion to set aside the verdict was made, as well as a motion for judgment, notwithstanding the verdict. The motions were set for hearing on August 17, 1949. The record does not disclose any disposition of the motions until September 22, 1949, when the court overruled both motions, and entered a decree on the verdict of the jury as stated above.
The Circuit Court of Preston County, on December 9, 1949, entered a decree granting an extension of sixty days, within which the proponent could perfect his appeal to this Court, and granting the proponent "An additional sixty days from the order entered on the 22nd day of September, 1949 * * *." No other order or decree seems to have been entered until February 7, 1950, when, at a special term of the Circuit Court of Preston County, a decree made proponent's bills of exceptions Nos. 1 and 2 a part of the record in this case. The decree entered February 7, 1950, recites that it was within sixty days from the adjournment of the regular October, 1949, term, which clearly is irrelevant since the final decree was entered on the 22nd day of September, which, according to the proponent's bill of exceptions No. 1, was the last day of the regular June, 1949, term of the Circuit Court of Preston County.
For a statement of additional facts, see the opinion of this Court in Grottendick v. Webber, supra.
Although not raised in briefs or oral arguments, this record calls for an inquiry whether the depositions, the testimony taken ore tenus, and the exhibits filed with such testimony are properly a part of the record herein.
We think that three questions are presented: (1) May the absence of a proper bill of exceptions be raised in this Court on appeal; (2) Is a bill of exceptions necessary to make the evidence a part of the record on an appeal from a decree on the trial of an issue devisavit vel non; and (3) do the provisions of Code, 56-6-35, 36, and the decided cases with reference to a bill of exceptions in law actions apply in suits of this kind ?
Bills of exceptions did not exist at common law, and are creatures of statute. In actions at law it is indispensable that a proper bill of exceptions be taken, or a certificate in lieu of such bill be made, in order that the evidence be made a part of the record. Otherwise, evidence adduced in the trial of an action at law will not be considered upon writ of error. Hall v. Shelton, 93 W.Va. 592, 116 S.E. 12; Monongahela Railway Co. v. Wilson, 122 W. Va. 467, 10 S.E.2d 795. A bill of exceptions in a law action may be signed by a judge "at any time before final judgment is entered, or within sixty days after the adjournment of the term at which such judgment is entered * * *." Code, 56-6-35. Similar provisions are applicable to a certificate of the evidence in lieu of a bill of exceptions. Code, 56-6-36 (e). And the trial court, or judge thereof, may extend the time beyond the period of sixty days. Code, 56-6-35, 36. An extension of time must be signed within the statutory period of sixty days. State v. Consumers' Gas & Oil Co., 130 W. Va. 755, 45 S.E.2d 923; State v. Tate, 125 W. Va. 38, 22 S.E.2d 868; Monongahela Railway Co. v. Wilson, supra. A stay of execution of the judgment is not sufficient to extend the time for signing the bill of exceptions. State v. Consumers' Gas & Oil Co., supra. After the expiration of such period of time, *857 in the absence of extension, there is no jurisdiction to sign a bill or a certificate, even though the litigants consent. Crowe v. Corporation of Charles Town, 62 W. Va. 91, 57 S.E. 330. See Layne v. Chesapeake & O. Railway Co., 66 W. Va. 607, 611, 67 S.E. 1103; Barker v. Stephenson, 67 W. Va. 490, 493, 68 S.E. 113.
Properly executed bills of exceptions, or in lieu thereof certificates of the evidence, under Code, 56-6-35, 36, "are necessary to give this Court jurisdiction to hear matters which must be made a part of the record by bills of exceptions or certificate." State v. Wooldridge, 129 W. Va. 448, 457, 40 S.E.2d 899, 905. See State v. Varner, 131 W. Va. 459, 48 S.E.2d 171, for a discussion of the subject of bills of exceptions and certificates in lieu thereof. "Jurisdiction once existing may lapse by failure to exercise it within the time limited by statute." Nelson v. Nash, 126 W. Va. 568, 574, 29 S.E.2d 253, 256; Tsutras v. Farrar, 109 W. Va. 509, 155 S.E. 655. In actions at law brought to this Court by writ of error, assignments of error involving consideration of evidence not made a part of the record will not be considered, but the judgment will be affirmed. Dudley v. Barrett, 58 W. Va. 235, 52 S.E. 100. In accordance with what has been said, we are of opinion that the execution of a bill of exceptions or certificate in lieu thereof is a jurisdictional question, and as such confronts us at the threshold of this case.
A jurisdictional question fairly raised upon the record may be considered and determined by this Court on its own motion upon appeal or writ or error. Blosser v. State Compensation Commissioner, W. Va., 51 S.E.2d 71, wherein numerous cases decided in this jurisdiction are cited. In addition see McKinley v. Queen, 125 W. Va. 619, 25 S.E.2d 763. We therefore determine that a proper bill of exceptions, or a certificate in lieu thereof is not shown by this record.
What has been said hereinabove relates entirely to law actions. For the purpose of contrast we advert to the principles governing the trial of equity causes.
Formerly, a bill of exceptions could be taken upon an ordinary issue out of chancery, but such bill was not always necessary. See Henry v. Davis, 13 W. Va. 230, and Nease v. Capehart, 15 W. Va. 299. It is stated in the opinion of this Court in Barrett v. McAllister, 35 W. Va. 103, 113, 12 S.E. 1106, 1109, decided March 14, 1891, that "* * * correct chancery practice does not permit a bill of exception to be taken except on trial of an issue out of chancery."
By Section 1, Chapter 65, Acts of the Legislature, 1917, Code, 56-6-38, bills of exceptions in chancery suits were dispensed with, except where such bills were then required. The statutory provision has apparently been displaced by Rule X, Rules of Practice for Trial Courts, promulgated by this Court on April 10, 1936, 116 W. Va., page lxiv.
As a general proposition bills of exceptions or certificates in lieu thereof, are required in law actions, and are not required in suits in `equity, as the law now stands in this jurisdiction. But the trial of an issue of devisavit vel non is sui generis. See Powell v. Sayres, W. Va., 60 S.E.2d 740. In Coalter's Ex'r v. Bryan, 1 Gratt. 18, 86, decided in 1844, the Supreme Court of Appeals of Virginia, speaking through Judge Baldwin, said: "There is, moreover, no incongruity or any inconvenience in having the trial of the issue [devisavit vel non] at the chancery bar. The equitable becomes for the occasion a legal forum, and the proceedings are according to the course of the common law. In practice, the mode of saving questions decided by the judge during the trial, is the same as in common law actions, to wit, by bill of exceptions * * *." The same court in the case of Lamberts v. Cooper's Ex'r, 29 Gratt. 61, 66, distinguishes between the ordinary issue out of chancery and the issue devisavit vel non, and holds that a bill of exceptions is the proper method of saving exceptions in the trial of an issue of devisavit vel non. See also Potts v. Flippen, 171 Va. 52, 197 S.E. 422, 425, et seq.
Examination of many cases decided by this Court, involving an issue of devisavit vel non, *858 clearly indicates there is little, if any, difference between the procedure in the trial of such issue and the trial of an issue in a common law action. Therefore, we are of opinion that a bill of exceptions or certificate in lieu thereof is necessary to make the depositions, testimony taken ore tenus and exhibits filed in evidence a part of the record, even though the jury trial is had in a chancery forum.
Examination of the record in the instant case clearly discloses that there was no extension of time granted within the sixty days immediately following the 22nd day of September, 1949. The record discloses that the final decree was entered on September 22, 1949, and that the June term of the Circuit Court of Preston County adjourned on the same date. Therefore, the the time for signing a bill of exceptions in the absence of an extension of time expired November 21, 1949. No extension having been granted until December 9, even if such extension were valid, which we do not pass upon, it was ineffective. It was necessary to make the extension before the statutory period of sixty days expired. State v. Consumers' Gas & Oil Co., supra; State v. Tate, supra; Monongahela Railway Co. v. Wilson, supra. We are of the opinion, and so hold that the evidence offered before the jury is not before this Court on this appeal.
The instructions offered and refused by the parties to this proceeding are a part of the record in the case and "the formality of a bill of exceptions or any formal certification" is unnecessary, provided there is a notation thereon showing the action of the court over the signature of the judge and the objections and exceptions to the instructions are endorsed thereon. Code, 56-6-20.
The proponent makes seventeen specific assignments or errors, thirteen of which may be classified as pertaining to the evidence admitted and rejected, and the legal effect of the evidence. Two of said assignments of error relate to the giving of instructions proffered by the contestant, over objections of the proponent, and the refusal of instructions proffered by proponent. We are precluded from testing the validity of the instructions given and refused where the objections are founded upon evidentiary matters not a part of the record.
We have examined with care the other objections shown on said instructions, which are a part of the record by virtue of Code, 56-6-20, and without discussing such instructions or the objections thereto in detail, we perceive no prejudicial error in the giving or refusal of instructions tendered by the proponent and contestant.
It is a general rule that an appellate court should not express any opinion on matters not properly presented for review. We are fully cognizant of that principle and adhere to it. However, in the instant case we are constrained to observe that the litigation has been protracted, and that the estate of Cecilia Webber should be settled. It is not amiss, therefore, to say that, even if we could consider the printed evidence which is not properly a part of the record but was apparently introduced before the jury on the trial of this issue, we would not be disposed to reverse the decree appealed from or set aside the verdict on which such decree as predicated. Moreover, the record per se does not disclose any reason for reversal.
Accordingly, the decree of the Circuit Court of Preston County is affirmed.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314746/ | 191 Va. 481 (1950)
MARY W. FRAZIER, TRADING UNDER THE FIRM NAME AND STYLE OF CITY CAB COMPANY
v.
HAROLD KEITH CONNER.
Record No. 3697.
Supreme Court of Virginia.
November 27, 1950.
Francis M. Hoge and Ralph R. Repass, for the plaintiff in error.
George P. Young, Campbell & Campbell and R. Crockett Gwyn, Jr., for the defendant in error.
Present, Hudgins, C.J., and Gregory, Eggleston, Spratley, Buchanan and
1. Plaintiff's taxicab was damaged in a collision with an automobile operated by defendant for which plaintiff sued for damages and loss of its use. Defendant had emerged from a secondary road onto an arterial highway at the moment when struck by plaintiff's cab. Defendant testified that he had stopped at a stop sign located at the intersection and had then proceeded into the intersection, having seen plaintiff's cab approaching from his left, but having judged that he had sufficient time to get across the highway into the far lane, and that after reaching the far lane, plaintiff's cab pulled out into defendant's lane to pass a car immediately in front of the cab and struck defendant's car. Plaintiff's cab driver testified that defendant pulled out of the intersection immediately in front of the oncoming cars and that he, the cab driver, had purposely turned into the wrong lane to avoid hitting defendant's car broadside. If the jury had believed the testimony of plaintiff's driver, and had been properly instructed, a verdict in favor of plaintiff would have been sustained by the evidence.
2. Under the facts of headnote 1, negligence and contributory negligence were plainly for the jury.
3. Under the facts of headnote 1, one of the instructions offered by plaintiff and refused by the trial court was a finding instruction and omitted any reference to any contributory negligence of the driver of plaintiff's cab. If this instruction had been qualified to embrace defendant's theory that plaintiff's driver was guilty of contributory negligence it would have been free from objection, but as written, it was improper.
4. Under the facts of headnote 1, an instruction offered by plaintiff and refused by the trial court would have presented to the jury the sudden emergency doctrine which was a theory of the plaintiff. The alleged emergency as testified to by plaintiff's driver, if believed by the jury, would have explained why his taxicab was in the wrong traffic lane across the double white line, and to support this theory there was evidence that the point of collision was at or near the double white line in the center of the highway. A jury could reasonably have found that when defendant drove his car out into the highway in front of plaintiff's cab, it created an emergency that excused plaintiff's driver for crossing to his left over the double white line. Plaintiff was entitled to an instruction on this feature of the case and it was reversible error to refuse it.
5. The doctrine of error in extremis is a humane one and has been frequently applied by the Supreme Court of Appeals, but it cannot be invoked by one who is at fault and whose negligence or misconduct brings about the peril in which he is placed.
6. Under the facts of headnote 1, the trial court of its own motion gave an instruction which introduced into the case for the first time the question of unavoidable accident. There was no room in the case for any theory of unavoidable accident since the evidence plainly showed that the case was one of the negligence of the plaintiff, the negligence of the defendant, or the concurring negligence of both of them which caused the collision.
7. Under the facts of headnote 1, there was no question of the doctrine of the last clear chance.
8. Under the facts of headnote 1, an instruction offered by plaintiff which was refused by the trial court provided that if the jury found in favor of plaintiff, in fixing her damages they should take into account the actual cost of repair to her automobile, and the value of the loss of the use thereof to the plaintiff as a result of the wreck. This instruction was objected to by defendant and another instruction was given in its place. The alternate instruction told the jury that if they found for plaintiff she was entitled to recover her damages, and in fixing such damages the jury should take into account the actual cost of repair to her automobile. This latter instruction was not objected to by plaintiff and any objection she had to the court's refusal to give the original instruction was waived.
Error to a judgment of the Circuit Court of Smyth county. Hon. Walter H. Robertson, judge presiding. The opinion states the case.
GREGORY
GREGORY, J., delivered the opinion of the court.
Mary W. Frazier, trading under the name of City Cab Company, operates a taxicab business in the town of Marion. There was a collision between one of her taxicabs and a Dodge car operated by Harold Keith Conner. She sued Conner for damages to the taxicab and for the loss of its use. The jury found against her and the court approved that finding.
The collision occurred on September 30, 1948, at approximately 9:45 p.m., at the intersection of U.S. Highway No. 11 and secondary State road No. 659, some two miles west of Marion. The part of No. 659 leading northward from No. 11 was formerly a part of No. 11, but changed by the relocation of No. 11 at that point. No. 11 runs *484 westwardly from Marion, goes to the top of a small hill 1,000 feet east of the intersection, then proceeds downgrade 400 feet, and then on a slight upgrade 600 feet to the intersection with No. 659. From the north No. 659, which is also a hard-surface road, crosses the Norfolk & Western railroad tracks at grade, some 40 to 60 feet northwest of the point where it intersects with No. 11, and it enters No. 11 on an inverted "Y", that is, at the intersection it spreads out about 30 feet on the shoulder of No. 11, then crosses No. 11 and continues southward. There is an Amoco service station on the south side of No. 11 adjoining the west side of No. 659. U.S. Highway No. 11 is an arterial highway and there is a stop sign on No. 659 for traffic entering No. 11. At the intersection, on No. 11, there is a double white line in the center. The north line is solid for traffic going west, and the south line is broken for traffic going east. The hard surface of No. 11 is approximately 20 feet wide with gravel shoulders on each side.
The defendant, Conner, was driving a 1936 Dodge sedan which belonged to his mother. He had as a companion, Miss Betty June Mason, a school teacher. She was sitting on the front seat with him. Some 60 feet before he reached the intersection Conner saw the reflection from the headlights of the two taxicabs a thousand feet east of the intersection. One Catron was driving a 1947 Kaiser sedan, and immediately behind him one Bane C. Wright was driving a 1947 Plymouth, both taxicabs, and owned by the plaintiff. They were answering a call beyond the point of the collision. There is a serious conflict in the evidence as to how the collision occurred, and if the jury were properly instructed we would have to conclude that they accepted the version of the defendant for they found a verdict in his favor which the court refused to disturb.
The defendant stated that after he crossed the railroad crossing he saw the light beams of the taxicabs approaching, but could not at that time see the headlights. A little later he did see the headlights of the two taxicabs being driven *485 close together. He also stated that he stopped at the intersection, looked in the other direction, saw the way was clear, and pulled on across the road, shifting into second gear. He said he thought he had time to enter No. 11 ahead of the cabs and get in his eastbound lane. Then, according to his testimony, one of the taxicabs passed him and the second cab, following close behind, darted out as if to pass the first cab, and when this occurred the second cab was in his (defendant's) lane of travel, which was the south lane. After he had gone some 60 feet past the intersection, the right front end of the Kaiser taxicab, which was the one engaged in passing the first taxi, collided with the left front end of his car. On this evidence the jury could have found a verdict for the defendant. However, the plaintiff, relying upon the testimony of the driver of the Kaiser taxicab, has a different version. Catron, the driver of that cab, stated that he was driving at the lawful speed of 50 miles an hour as he approached the intersection, that he saw the defendant's car standing still close to the intersection, that he thought it would remain standing there until he passed inasmuch as he was upon an arterial highway and the defendant was confronted with a stop sign. But instead of remaining in a standing position until he could go through the intersection, the defendant drove his Dodge sedan out too close in front of the taxicab, and in order to prevent hitting the Dodge broadside, he turned his car sharply to the left and they collided about the middle of the intersection. He stated that he did not think Conner would drive his car out into the highway in front of him and that the only thing he could do to miss him was to swing sharply to the left, because at the time Conner pulled out in front of him he was only 50 yards away and running at 50 miles per hour.
If the jury had believed the testimony of Catron, and they had been properly instructed, a verdict in favor of the plaintiff would have been sustained by the evidence.
[2, 3] Negligence and contributory negligence were *486 plainly for the jury. Instruction No. 1, offered by the plaintiff and refused by the court, was a finding instruction and omitted any reference to any contributory negligence of the driver of the plaintiff's car. If this instruction had been qualified to embrace the defendant's theory that the plaintiff's driver was guilty of contributory negligence we think it would have been free from objection, but as written, it was improper.
Instruction No. 2, offered by the plaintiff and refused by the court, should have been granted. It presented to the jury the sudden emergency doctrine which was a theory of the plaintiff. The alleged emergency, as testified to by the plaintiff's driver, if believed by the jury, would have explained why his taxicab was in the southern traffic lane across the double white line. He said he got there because the defendant, after stopping at the intersection on secondary road No. 659, started up and pulled out immediately in front of him (the plaintiff's driver) when he was only 50 yards away, and in order to prevent a broadside collision he did the best he could under the circumstances and pulled to his left over the double white line. There was evidence that the point of collision was at or near the double white line in the center of No. 11. This is disclosed by the dry mud and dust which fell to the road at that point as a result of the force of the impact. The plaintiff was entitled to an instruction on this feature of the case and it was reversible error to refuse it. Whether the plaintiff's driver negligently brought on the emergency was for the jury. A jury could reasonably have found that when the defendant drove his car out into the highway in front of the plaintiff's cab, which was only 150 feet away and going at 50 miles an hour, it created an emergency that excused plaintiff's driver for crossing to his left over the double white line.
In Otey Blessing, 170 Va. 542, 197 S.E. 409, we said: "It is natural to assume that one on a main highway rapidly approaching a crossing would take it for granted *487 that another on a secondary road, likewise approaching it, but who had stopped, did so with the intention of giving arterial traffic the right of way." This statement of the law was reiterated in Barnes Mabry, 186 Va. 243, 42 S.E.(2d) 304.
In the Otey Case which was quite similar to the one at bar, Otey approached Highway No. 11 from a secondary road -- No. 11 highway at that point was an arterial highway. He stopped his car just before entering No. 11 and then pulled out in front of the Blessing car which was proceeding westwardly. Blessing then tried to avoid a collision by trying to cut to the left in the hope that he might in that manner safely pass in front of the Otey car. In this he failed, and the collision occurred. Mr. Justice Holt, in delivering the opinion of the court, at page 549, had this to say: "We may concede for the sake of argument that Blessing failed to act with the best of judgment. When Otey started to cross the highway in front of him, he cut to the left in the hope that he might in that manner safely pass in front of the Packard car. When he found that this could not be done, he undertook to turn back and to pass it to the right. He failed. The emergency which confronted him was due to Otey's heedlessness, and for it he was in no wise responsible."
"'It is true, as contended, that men confronted by sudden emergencies are not required to follow the safest course. The doctrine of error in extremis is a humane one and has been frequently applied by this court, but it cannot be invoked by one who is at fault and whose negligence or misconduct brings about the peril in which he is placed.' Virginia Elec., etc., Co. Ford, 166 Va. 619, 186 S.E. 84, 86; Lavenstein Maile, 146 Va. 789, 132 S.E. 844; Virginia, etc., Ry. Co. Hill, 119 Va. 837, 89 S.E. 895;"
Real Estate Trust, etc., Co. Gwyn, 113 Va. 337, 74 S.E. 208.""
[6, 7] The court of its own motion gave instruction 1-A and it was objected to by both sides. We think that the last paragraph of the instruction was erroneous. It introduced *488 into the case for the first time the question of unavoidable accident. This question had not been raised by either side up to this point. There was no room in the case for any theory of unavoidable accident. The evidence plainly shows that the case was one of the negligence of the plaintiff, the negligence of the defendant, or the concurring negligence of both of them which caused the collision. There is no question of the doctrine of the last clear chance.
Plaintiff's instruction No. 4, as offered, was refused by the court. It provided that if the jury found in favor of the plaintiff, in fixing her damages they should take into account the actual cost of repair to her automobile, and the value of the loss of use thereof to the plaintiff as a result of the wreck. This instruction was objected to by counsel for the defendant and instruction No. 4-A was given in its place. That instruction told the jury that if they found for the plaintiff she was entitled to recover her damages, and in fixing such damages the jury should take into account the actual cost of repair to her automobile. This latter instruction was not objected to by the plaintiff and was substituted in place of the one offered by her. Under these circumstances any objection she had to the court's refusal to give instruction No. 4, as prepared by her counsel, was waived.
For the errors indicated, in refusing plaintiff's instruction No. 2, and the error pointed out in instruction 1-A which was given by the court on its own motion, the judgment of the court is reversed, the verdict of the jury set aside, and the case remanded for a new trial.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314752/ | 61 S.E.2d 890 (1950)
232 N.C. 636
GORE et al.
v.
COLUMBUS COUNTY et al.
No. 601.
Supreme Court of North Carolina.
November 22, 1950.
*892 Alton A. Lennon, and Isaac C. Wright, Wilmington, for plaintiffs.
W. H. Powell, E. K. Proctor, of Whiteville, and McLean & Stacy, Lumberton, for defendants.
DENNY, Justice.
The sole question presented for determination on this appeal is whether or not the court below committed error in dissolving the restraining order heretofore issued.
The appellants strenuously contend the order should have been continued to the final hearing, and we are inclined to agree.
A county board of education has the authority "to consolidate schools located in the same district, and, with the approval of the state board of education, to consolidate school districts, over which the board has full control, whenever and wherever in its judgment the consolidation will better serve the educational interests of the county or any part of it". G.S. § 115-99.
Ordinarily the courts will not interfere with the control and supervision of the school authorities in the exercise of their discretion in creating or consolidating school districts, or in the selection of a school site. Feezor v. Siceloff, N.C., 61 N.E.2d 714; Atkins v. McAden, 229 N.C. 752, 51 S.E.2d 484; Board of Education v. Pegram, 197 N.C. 33, 147 S.E. 622; Board of Education v. Forrest, 190 N.C. 753, 130 S.E. 621; Davenport v. Board of Education, 183 N.C. 570, 112 S.E. 246; School Commissioners v. Board of Aldermen, 158 N.C. 191, 73 S.E. 905; Venable v. School Committee, 149 N.C. 120, 62 S.E. 902. And it must be conceded that when the entire evidence disclosed by the record herein is considered, a strong case can be made out in favor of the construction of the proposed high school. Such a high school would no doubt "better serve the educational interests" of the two districts with respect to high school courses, courses in agriculture, home economics and commercial training. But the real question which is determinative of this appeal is whether the law sanctions the reallocation of these funds without an affirmative finding that the construction of the proposed high school will relieve *893 the elementary schools in the two districts of their over-crowded conditions and make the whole or any part of the expenditure of such funds on these elementary school plants unnecessary.
On the present record there is no finding by the County Board of Education of Columbus County, or of its Board of County Commissioners, whether the proposed high school will accommodate four or six grades. It is clearly disclosed by the evidence, however, that if it is to be a four year high school (grades 9 through 12), the enrollment of the Guideway School will not be reduced by a single pupil, and yet it has been found, heretofore, that eight additional class rooms are necessary to meet the needs of that elementary school. Likewise, if the proposed high school is to be a four year school, the Old Dock-Nakina School will be relieved only of its high school pupils. This high school is a substandard one with a present enrollment of 66 and an average daily attendance of only 61. If, on the other hand, the new high school is to take care of six grades (7 through 12), the Board of Education may find that the present facilities at these schools will be adequate to take care of the remaining elementary grades. If such be the case, and sufficient funds are retained from the funds allocated to these districts, or if funds are available from other sources, to put these elementary school buildings in adequate repair, then any surplus funds allocated to these school districts may be reallocated for the purpose of building the proposed high school. Atkins v. McAden, supra.
The General Assembly has no power to authorize local school authorities to exercise an arbitrary discretion, without regard to the existing facts and circumstances involved. Therefore, we hold that Chapter 942, of the 1949 Session Laws of North Carolina, authorizing the transfer of these funds in the discretion of the Board of Education and the Board of Commissioners of Columbus County, did not obviate the necessity for such discretion to be exercised in good faith, in light of the existing facts and circumstances. And if it be conceded the facts found with respect to the establishment of a new central high school are sufficient to justify the reallocation of any surplus bond funds to that project, they are insufficient, in our opinion, to authorize the reallocation of the funds theretofore allocated to other projects, unless it is found as a fact by the Board of Commissioners of Columbus County, acting in good faith, that such original projects are no longer necessary by reason of changed conditions, or that the proposed new project will eliminate the necessity for the originally contemplated expenditures, and "will better serve the educational interests" of the districts involved. G.S. § 115-99; Atkins v. McAden, supra; Waldrop v. Hodges, 230 N.C. 370, 53 S.E.2d 263; Feezor v. Siceloff, supra.
In the case of Waldrop v. Hodges, supra [230 N.C. 370, 53 S.E.2d 266], this Court held that a board of education and a board of commissioners in a county "have a limited authority, under certain conditions, to transfer or allocate funds from one project to another, included within the general purpose for which bonds were authorized, the transfer must be to a project included in the general purpose as stated in the bond resolution and notice of election. Atkins v. McAden, supra. The funds may be diverted to the proposed purposes only in the event the defendant Board of Commissioners finds in good faith that conditions have so changed since the bonds were authorized that the proceeds therefrom are no longer needed for the original purpose."
In the case of Feezor v. Siceloff, supra, the question presented on this appeal was not raised. But, on the contrary, each school district involved had a small high school in a building occupied by an elementary school, and one of the arguments for the construction of a consolidated high school, to serve all three districts, was to give the elementary schools the additional space occupied by the high schools. No question of the adequacy of the elementary schools was raised or the need of funds for their repair.
*894 On the present record, in our opinion, it was error to dismiss the restraining order, but it should have been continued to the final hearing. Consequently, the order dissolving the restraining order heretofore entered is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
Error. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314774/ | 303 P.2d 238 (1956)
Wayne L. HAYES, Plaintiff in Error,
v.
Shirley A. HAYES, Defendant in Error.
No. 17865.
Supreme Court of Colorado. En Banc.
November 5, 1956.
Arthur E. March, O. Rex Wells, Fort Collins, for plaintiff in error.
John J. Tobin, Ft. Collins, for defendant in error.
KNAUSS, Justice.
Plaintiff in error will be referred to as the husband, and defendant in error as wife. These parties were married in April 1946, and as the issue of the marriage two children were born, Leslie Ann Hayes on June 18, 1948 and William Lynd Hayes born June 22, 1950. A divorce action commenced by the husband on July 29, 1952 culminated in a final decree of divorce in favor of the wife on her cross-complaint. By stipulation of the parties the final decree provided that the husband was to have custody of the children from July 1 to August 1 of each year, and that the wife was to have their custody during the balance of the annual period. The husband was given the right to visit the children twice each week while they were in the custody of the wife. The husband was ordered to pay certain stipulated sums for the support of the wife and the two children. In August, 1953 the husband filed a petition alleging that the wife had taken the children to the state of South Dakota and he prayed for an order that they be returned to Colorado, and that the support money order be modified. In October, 1953 he filed another petition asserting that he had remarried and was able to care for the children and prayed for an order granting *239 him their custody, which petition was denied.
It appears that the wife remarried and moved to Massachusetts where she lived with her new husband and the children. The children were brought to Colorado, and over several days a protracted hearing was held before the trial judge, which hearing culminated in an order dated November 8, 1955 in which the trial court reviewed the entire record and made a specific finding that "Both parents are fit and suitable to be intrusted with the custody of their minor children * * *. The wellbeing of the minor children would be best promoted by allowing the defendant [wife] to remove said minor children to her new residence in the State of Massachusetts for a period of each year." The trial court granted the husband custody of the children from July 1 to September 1 of each year; ordered the wife to return them to Colorado each year at her expense and required of her a bond in the sum of $5,000 "to assure the return of the minor children to the jurisdiction of this Court and compliance with the orders of this Court." The parties stipulated that the husband was in arrears in payment of support money in the sum of $750, and the trial court directed that said sum be paid into the registry of the court forthwith, together with the sum of $50 per month commencing January 1, 1956 for the support of the two minor children.
It is here urged for reversal by counsel for the husband that the trial court abused its discretion in making the order of November 8, 1955, and erred in ordering the husband to pay the support money for the children during the time "the wife refused plaintiff the right to visit his children."
We have carefully considered the entire record which discloses the unfortunate situation between these parties and we fail to find anything which even remotely indicates that the trial court abused the discretion vested in it by our repeated pronouncements. The trial judge saw and heard the witnesses; evaluated their testimony, and made specific findings of fact with regard to the best interests of these small children. The trial judge fully safeguarded the rights of both parents, bearing in mind that the best interests of these little ones was the primary concern of the court. It is obvious that the trial judge was well aware of our holding in Averch v. Averch, 104 Colo. 365, 90 P.2d 962; Williams v. Williams, 110 Colo. 473, 135 P.2d 1016; Searle v. Searle, 115 Colo. 266, 172 P.2d 837.
It is generally held that courts will not deprive the mother of the custody of her children of tender years, unless it is clearly shown that she is so unfit a person as to endanger the welfare of the minors. In Averch v. Averch, supra [104 Colo. 365, 90 P.2d 964], we said: "It is the universal opinion that a mother's love, care and affection for a child of tender years are the most unselfish of all factors in human relations, and that the child is not to be deprived thereof unless for a very good reason, founded on lack of moral fitness and proper home surroundings."
The question as to whether a court may permit a child to be taken from the state first having jurisdiction to another jurisdiction, is, like all other questions affecting the welfare and best interests of the child, vested in the sound legal discretion of the trial court.
We find no error with reference to the order requiring the husband to pay arrears of support money for the children. At the trial it was stipulated and agreed that this sum was due and nothing in the record even intimates that counsel for the husband objected to that portion of the order. In fact the husband testified that he had tendered the amount. No valid reason was assigned why the court should not order the past-due installments paid forthwith. The record does not disclose the entry of any judgment against the husband for this amount.
Perceiving no prejudicial error in the record, the judgment order modifying the amended final decree in divorce is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314707/ | 408 S.E.2d 540 (1991)
John K. DARNELL
v.
COMMONWEALTH of Virginia.
Record No. 1683-89-2.
Court of Appeals of Virginia.
July 16, 1991.
*541 C. David Whaley (Elizabeth Dashiell Scher, Morchower, Luxton and Whaley, Richmond, on brief), for appellant.
Richard B. Smith, Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., on brief), for appellee.
Present: BARROW, COLE[*] and WILLIS, JJ.
COLE, Judge.
The defendant, John K. Darnell, appeals his convictions of two counts of taking, obtaining, or withholding a credit card in violation of Code § 18.2-192. He contends that the trial court should have dismissed the charges on double jeopardy grounds because he had previously been convicted of petit larceny of a "pocketbook containing U.S. currency, credit cards and miscellaneous items." He argues that the second prosecution is barred under the holding in Blockburger v. United States, 284 U.S. 299, 52 S. Ct. 180, 76 L. Ed. 306 (1932), Grady v. Corbin, 495 U.S. 508, 110 S. Ct. 2084, 109 L. Ed. 2d 548 (1990), and the provisions of Code § 19.2-294. We find that the prosecutions under Code § 18.2-192 are barred by Grady and, therefore, we reverse the convictions.
On March 6, 1989, Douglas Long's wallet was taken from his pants, which were hanging in the locker room at the Westwood Racquet Club. The wallet contained $61 in cash and other items, including a Dominion Bank "Most" card and an American Express card. He went to a nearby Dominion Bank to report the loss of his Dominion Bank card. When he arrived at the bank, he saw the defendant walking away from an automatic teller machine with the Dominion Bank card in his hand. Long remembered seeing the defendant in the locker room before his wallet was taken, so he confronted the defendant and retrieved his wallet and credit cards. The money was not in the wallet, but the defendant removed it from his pants and returned it to Long.
Henrico County Police Officer E.J. Kopacki arrived at the scene and took a statement from the defendant. The defendant admitted taking the wallet from Mr. Long's trousers. He also admitted removing the money from the wallet, but claimed he did not know the credit cards were in the wallet.
On April 6, 1989, the defendant was convicted in the general district court of petit larceny of a "pocketbook containing U.S. currency, credit cards and misc. items" belonging to Douglas Long in violation of Code § 18.2-96.[1] The defendant was subsequently tried and convicted in circuit court on two counts of taking, obtaining, or withholding a credit card in violation of Code § 18.2-192.
On June 20, 1989, the defendant filed a motion to dismiss in the trial court, alleging that "[t]hese indictments are violative of the double jeopardy clause of the Constitution since he has previously been convicted of the lesser included offense petit larceny involving these items. (Warrant of arrest is attached)." Filed with the motion was a legal memorandum in support thereof. The court took the motion under advisement and, after the trial, heard argument on the motion on August 9, 1989. No reference was made to Grady because it *542 was not decided until May 29, 1990. At the conclusion of the hearing, the court overruled the motion to dismiss, holding that petit larceny is not a lesser included offense of credit card theft and that the elements of the two are different.
At the outset, the Commonwealth contends that Darnell can not rely on the argument that his conviction is barred by Grady v. Corbin, 495 U.S. 508, 110 S. Ct. 2084, 109 L. Ed. 2d 548 (1990) because he did not make this argument in the trial court. In the trial court, the defendant relied solely upon Blockburger to argue that the double jeopardy clause was violated. Therefore, the Commonwealth argues, since the Corbin case was not the basis for the argument in the trial court, it should not be considered on appeal. Rule 5A:18. We disagree.
We find that Grady, although decided after the decision was rendered in the trial court, is applicable to this case. In Griffith v. Kentucky, 479 U.S. 314, 107 S. Ct. 708, 93 L. Ed. 2d 649 (1987), the United States Supreme Court held: "[A] new rule for the conduct of criminal prosecutions is to be applied retroactively to all cases, state or federal, pending on direct review or not yet final, with no exception for cases in which the new rule constitutes a `clear break' with the past." Id. at 328, 107 S.Ct. at 716; see also Kelly v. Commonwealth, 8 Va.App. 359, 367-68, 382 S.E.2d 270, 274-75 (1989). As a general rule, judicial decisions are to be applied retroactively. Dept. of Highways v. Williams, 1 Va.App. 349, 352, 338 S.E.2d 660, 662-63 (1986).
"Rule 5A:18 serves an important function during the conduct of a trial. It places the parties on notice that they must give the trial court the first opportunity to rule on disputed evidentiary and procedural questions. The purpose of this rule is to allow correction of an error if possible during trial, thereby avoiding the necessity of mistrials and reversals." Gardner v. Commonwealth, 3 Va.App. 418, 423, 350 S.E.2d 229, 232 (1986). The defendant complied with Rule 5A:18 by making a motion to dismiss based on the double jeopardy clause, by filing a legal memorandum with the motion, and by fully arguing the motion before the trial court. He could not have argued Grady because it had not been decided.
In order to be considered on appeal, an objection must be timely made and the grounds stated with specificity. Rule 5A:18. "Unless an objection is stated with reasonable certainty at the time of the ruling, neither the Supreme Court nor the Court of Appeals will consider the question for the first time on appeal." Simmons v. Commonwealth, 6 Va.App. 445, 450, 371 S.E.2d 7, 10 (1988). The purpose of the rule is "to give the trial court an opportunity to rule intelligently and to avoid unnecessary appeals, reversals, and mistrials." Marshall v. Goughnour, 221 Va. 265, 269, 269 S.E.2d 801, 804 (1980).
"It is the duty of a party, as a rule, when he objects to evidence, to state the grounds of his objection, so that the trial judge may understand the precise question or questions he is called upon to decide. The judge is not required to search for objections which counsel have not discovered, or which they are not willing to disclose." Jackson v. Chesapeake & Ohio Ry. Co., 179 Va. 642, 651, 20 S.E.2d 489, 492-93 (1942). Although objections must be specific and not general, in this case we find that the objection was made with sufficient certainty so that the trial judge could understand the precise question he was called upon to decide. Darnell attached to his motion both his petit larceny warrant of arrest and the indictments upon which he was charged. In his attached memorandum, he cited applicable cases, referring to the leading case of Blockburger. However, in circumstances such as this, it is impossible to refer to cases not yet decided and to law promulgated between trial and appeal. We, therefore, find that Rule 5A:18 does not bar an appeal of an issue where the law has changed between trial and appeal, such as in this case.[2] To hold *543 otherwise would deny the defendant the benefit of decisions rendered after the date of trial, decisions which the Supreme Court has declared have retroactive effect in all cases still pending on direct review.
The double jeopardy clause embodies three protections: "It protects against a second prosecution for the same offense after acquittal. It protects against a second prosecution for the same offense after conviction. And it protects against multiple punishments for the same offense." North Carolina v. Pearce, 395 U.S. 711, 717, 89 S. Ct. 2072, 2076, 23 L. Ed. 2d 656 (1969) (footnote omitted). In Grady v. Corbin, "the Supreme Court clarified the standard for determining whether successive prosecutions are barred by the double jeopardy clause of the fifth amendment." Low v. Commonwealth, 11 Va.App. 48, 51, 396 S.E.2d 383, 385 (1990). Under Grady, the court must first apply the traditional Blockburger test:
The applicable rule is that where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not.
284 U.S. at 304, 52 S.Ct. at 182. However, as stated in Grady:
[A] subsequent prosecution must do more than merely survive the Blockburger test. As we suggested in Vitale, the Double Jeopardy Clause bars any subsequent prosecution in which the government, to establish an essential element of an offense charged in that prosecution, will prove conduct that constitutes an offense for which the defendant has already been prosecuted.
110 S.Ct. at 2093 (footnote omitted).
The first inquiry is whether Blockburger bars the subsequent prosecution. "If application of that test reveals that the offenses have identical statutory elements or that one is a lesser included offense of the other the inquiry must cease, and the subsequent prosecution is barred." Id. 110 S.Ct. at 2090. The Supreme Court of Virginia has stated:
The theft of several articles at one and the same time constitutes an indivisible offense, and a conviction or acquittal of any one or more of them is a bar to a subsequent prosecution for the larceny of the others.
Holly v. Commonwealth, 113 Va. 769, 772, 75 S.E. 88, 89 (1912). However, "the rule applies only to a case involving multiple larceny prosecutions predicated upon the theft of multiple articles stolen contemporaneously." Jones v. Commonwealth, 218 Va. 757, 761, 240 S.E.2d 658, 661 (1978), cert. denied, 435 U.S. 909, 98 S. Ct. 1459, 55 L. Ed. 2d 500 (1978). Here, the defendant faced only one larceny charge.
The defendant asserts that petit larceny is a lesser included offense of taking, obtaining or withholding a credit card. "A lesser included offense is an offense which is composed entirely of elements that are also elements of the greater offense. Thus, in order for one crime to be a lesser included offense of another crime, every commission of the greater offense must be a commission of the lesser offense." Kauffmann v. Commonwealth, 8 Va.App. 400, 409, 382 S.E.2d 279, 283 (1989). "Conversely, an offense is not lesser included within another if it has an element the other does not." Taylor v. Commonwealth, 11 Va.App. 649, 400 S.E.2d 794, 795 (1991).
In pertinent part, Code § 18.2-192 provides:
(1) A person shall be guilty of credit card or credit card number theft when:
(a) He takes, obtains or withholds a credit card or credit card number from the person, possession, custody or control of another without the cardholder's consent.[3]
The taking must be with the intent to use, sell, or transfer the card to a person other than the issuer or the cardholder. Cheatham *544 v. Commonwealth, 215 Va. 286, 290, 208 S.E.2d 760, 763 (1974); see also Wilder v. Commonwealth, 217 Va. 145, 147, 225 S.E.2d 411, 413 (1976).
"Larceny is the wrongful taking of the goods of another without the owner's consent and with the intention to permanently deprive the owner of possession of the goods." Bright v. Commonwealth, 4 Va.App. 248, 251, 356 S.E.2d 443, 444 (1987). Code § 18.2-96 determines the monetary value which constitutes petit larceny.
A comparison of the elements discloses that petit larceny is not a lesser included offense of a violation of Code § 18.2-192. Larceny requires proof of an intent "to permanently deprive" while § 18.2-192 requires only an intention to "use, sell or transfer." Thus, every conviction under Code § 18.2-192 would not necessarily result in a conviction of petit larceny. For example, an individual could take a credit card from its owner's possession intending to use the card to make a purchase without the owner's consent, proceed to use the card in making the purchase, and subsequently return the card before the owner became aware of its absence. In such a situation, the perpetrator could be convicted under § 18.2-192, but not of petit larceny[4] because he lacked the "intent to permanently deprive." Also, Code § 18.2-192 requires proof of a fact which petit larceny does not, i.e., that a credit card be taken. Therefore, under Blockburger a defendant could be convicted of both petit larceny and taking, obtaining, or withholding a credit card.
Applying the Grady test, however, we reach a different result. In the present case, the same conduct which constituted the substantive petit larceny offense was alleged and proved as essential elements in the credit card theft prosecution. The issue before us is whether evidence of the larceny of the "pocketbook, containing U.S. currency, credit cards and misc. items" belonging to Douglas Longconduct that constitutes an offense for which Darnell has already been convictedestablished an essential element of the credit card theft charge.
We must decide whether Grady "prohibits a successive prosecution when evidence of previously prosecuted conduct proves only a portion of an essential element of the second charge, or whether Grady prohibits a successive prosecution only when the evidence of previously prosecuted conduct proves the "entirety" of an essential element." United States v. Clark, 928 F.2d 639 (1991). In Clark, the fourth circuit adopted the rule that in order for the conduct used in the first trial to be barred from use in the second trial, the conduct must, standing alone, fully establish a legal element of the crime charged in the second prosecution. Id. at 642. We agree with the holding in Clark and adopt it.
In circuit court, the indictments specifically charged the defendant with taking, obtaining and withholding a Dominion Bank card and an American Express card belonging to Long. At trial in the circuit court, Long testified on cross-examination that the American Express card and Dominion Bank card were the only credit cards contained in the wallet. Thus, there can be no question but that the American Express Card and the Dominion Bank card were the credit cards referred to in the district court case.
We assume that "proof in the first trial followed the charge." Low, 11 Va.App. at 52, 396 S.E.2d at 385. In order for the defendant to be convicted of petit larceny of the credit cards, as alleged in the warrant, the Commonwealth was required to prove that the defendant wrongfully removed the wallet containing the credit cards from Long's trousers, without his consent. This is the precise conduct which the Commonwealth relied on in the circuit *545 court to prove essential elements of Code § 18.2-192. Therefore, the subsequent prosecution is barred by Grady.[5]
The defendant also contends that the subsequent prosecution is barred under Code § 19.2-294. However, this section is not applicable when one crime is a common law offense. Blythe v. Commonwealth, 222 Va. 722, 284 S.E.2d 796 (1981).[6] Larceny is a common law crime, although it is regulated by statute. Smith v. Cox, 435 F.2d 453, 457 (4th Cir.1970). Therefore, Code § 19.2-294 is not applicable to this case.
In conclusion, the subsequent prosecution is barred under Grady v. Corbin where the Commonwealth, to establish an essential element of Code § 18.2-192, proved conduct which constituted petit larceny, a crime for which the defendant had already been prosecuted. Accordingly, we reverse and dismiss the indictment.
Reversed and dismissed.
BARROW, Judge, concurring.
I concur that the prosecution in this case is barred by double jeopardy. See Grady v. Corbin, 495 U.S. 508, 110 S. Ct. 2084, 109 L. Ed. 2d 548 (1990). In reaching this determination, however, we need not adopt the holding in United States v. Clark, 928 F.2d 639 (4th Cir.1991). Therefore, I do not join in that aspect of the majority opinion.
NOTES
[*] Judge Cole participated in the hearing and decision of this case prior to the effective date of his retirement on April 30, 1991 and thereafter by designation pursuant to Code § 17-116.01.
[1] This warrant was made a part of the record on appeal by a writ of certiorari dated October 17, 1990.
[2] We need not decide whether the defendant could raise the issue on appeal in the absence of any objection on double jeopardy grounds.
[3] Code § 18.2-192(2) provides that "Credit card or credit card number theft is grand larceny and is punishable as provided in § 18.2-95." This is not dispositive because this relates to punishment and not to the elements which must be proved, which is the critical test under Blockburger.
[4] Although Code § 18.2-192 is comprehensive in scope, it is possible for credit card theft to constitute a more general offense. See Sullivan v. Commonwealth, 210 Va. 201, 169 S.E.2d 577 (1969) (in burglary conviction property stolen was credit card), cert. denied, 397 U.S. 998, 90 S. Ct. 1142, 25 L. Ed. 2d 408 (1970); see generally Groot, Criminal Offenses and Defenses in Virginia 77 (2d ed. 1989); Costello,Virginia Criminal Law and Procedure § 16.1-2, at 174 (1991).
[5] We read Grady to be applicable to the circumstances of this case regardless of the order of these prosecutions. See 110 S.Ct. at 2093 n. 11.
[6] In Blythe, the defendant was convicted of voluntary manslaughter under Code § 18.2-35 and unlawful wounding under § 18.2-53. The Court found that Code § 18.2-35 "merely fixes the punishment for voluntary manslaughter; the section does not define the offense." 222 Va. at 725, 284 S.E.2d at 797 (1981). Likewise, Code § 18.2-96 merely defines how petit larceny is punished without defining the offense. In Jones v. Commonwealth, 218 Va. 757, 240 S.E.2d 658 (1978), the Court found that Code § 19.2-294 was inapplicable to a defendant convicted of robbery and grand larceny for reasons other than stated above. However, Jones was decided before Blythe and no mention was made of the fact that larceny is a common law offense. Therefore, Blythe is controlling. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314720/ | 191 Va. 212 (1950)
RUTH H. WRAY, ADMINISTRATRIX, ETC.
v.
NORFOLK & WESTERN RAILWAY COMPANY.
Record No. 3657.
Supreme Court of Virginia.
September 6, 1950.
Bohannan, Bohannan & Kinsey, for the plaintiff in error.
J. M. Townsend and Morton G. Goode, for the defendant in error.
Present, Hudgins, C.J., and Gregory, Eggleston, Spratley and Buchanan, JJ.
1. A traveler upon a highway, who, on approaching a grade crossing, stops his vehicle in a place of safety, apparently for the purpose of looking and listening for trains which may be approaching, and then proceeds upon the tracks at a time when a train in full view is approaching less than 200 feet away, at undiminished speed, is guilty of a reckless disregard of all precautions for his own safety.
2. Whether the doctrine of comparative negligence, as provided by section 56-416 of the Code of 1950, providing that if railroad crossing signals are not given, the negligence of a traveler on the highway shall not bar recovery for his injury or death, applies, depends upon whether the crossing in question was a link of a public way.
3. Plaintiff's decedent, driver of a city garbage truck, was killed at a railroad grade crossing while returning from a city dump, when he drove upon the crossing without looking in the direction from which the train was coming, although he had an unobstructed view. The crossing was constructed for the purpose of giving the city ingress and egress to the dump and the city maintained bars across the road which were locked more than half the time, with the city exercising sole control over the key. Such restrictions of the use of a street or road are inconsistent with the common and accepted meaning of a "public way".
4. A "public way" is a way open to all the people without distinction for passage and repassage at their pleasure.
5. The delegation of authority by the General Assembly to a municipality, by the provisions of section 15-6 of the Code of 1950, authorizing cities and towns to lay off streets, alter and improve and light the same and regulate transportation thereon, does not relieve a municipality of liability for negligence in permitting obstruction of its public streets and ways in such a manner as unreasonably to impede the passage of users thereof.
6. Under the facts of headnote 3, the crossing in question was not a public highway within the meaning of the words "grade crossing of a public highway", as used a section 56-416 of the Code of 1950, providing that if crossing signals are not given, the negligence of a traveler on the highway shall not bar recovery, and inasmuch as the evidence clearly established the negligence of decedent, plaintiff was not entitled to recover.
Error to a judgment of the Hustings Court of the city of Petersburg. Hon. R. T. Wilson, judge presiding. The opinion states the case.
HUDGINS
HUDGINS, C.J., delivered the opinion of the court.
Ruth H. Wray, administratrix of the estate of her husband, Rodney Atwell Wray, instituted this action against the Norfolk & Western Railway Company for damages for the wrongful death of decedent, which resulted when the truck he was driving was struck by a Norfolk & Western *214 passenger train at a grade crossing in the city of Petersburg. From the judgment entered on the verdict for defendant plaintiff obtained this writ of error.
The Norfolk & Western Railway Company, hereinafter designated "defendant," at the crossing in question, maintains three separate tracks on its right of way extending east and west.
The city of Petersburg owns the only tract of land in this vicinity, which is bounded on the south by defendant's right of way and on the north by the Appomattox river. In 1942 the City decided to use this tract of land as a "city dump." At its request defendant constructed a grade crossing over its right of way for the purpose of giving the city ingress and egress to the land which was thereafter used as a "city dump."
For several years prior to the date of the accident Rodney Atwell Wray had been employed as a driver of a garbage truck for Petersburg, during which time he used this crossing daily, except Sundays and holidays. On January 17, 1948, Wray, with two helpers, had driven over the crossing to the dump, unloaded the garbage, and approached the crossing from the north. Claiborne Cook, one of his helpers, was riding in the cab with him. John Bonner, the other helper, was standing in the body of the truck, leaning on the cab. Wray brought his truck to a stop within 45 feet of the nearest rail to him. From this position he had an unobstructed view of the tracks to the east of approximately 1500 feet. At the time, and within this unobstructed view, defendant's passenger train, known as the "Powhatan Arrow," was approaching on the middle track at a speed of 25 miles an hour. Wray, without looking in an easterly direction, or apparently without seeing the train, started his truck and attempted to negotiate the crossing. As he did so, the front of the engine collided with the truck with such force that the truck was carried west some distance. Wray died within an hour as a result of injuries received in the collision. Claiborne Cook was rendered unconscious and *215 when he regained consciousness, he was unable to remember anything about the accident. Bonner saw the approaching train, knocked on the cab for the purpose of warning the driver of the apparent danger, ran to the rear of the truck and jumped out before the impact, thus escaping injury.
Some evidence was introduced tending to show that the signals required by statute for highway crossings were not given. Several witnesses, including the engineer and fireman in charge of the engine, a telegraph operator in a tower within 100 feet of the crossing, and a clerk of defendant checking cars on the yard, testified positively that crossing signals were given.
The plaintiff's main contention is that the trial court committed reversible error in refusing to submit the question of comparative negligence to the jury. This ruling of the trial court was consistent with its theory of the case: namely, that the doctrine of comparative negligence prescribed by section 56-416 of the 1950 Code was not applicable because the way in question was a private and not a public highway.
On this theory, the negligence of decedent bars plaintiff's right to recover. A traveler upon a highway, who, on approaching a grade crossing, stops his vehicle in a place of safety, apparently for the purpose of looking and listening for trains which may be approaching, and then proceeds upon the tracks at a time when a train in full view is approaching less than 200 feet away, at undiminished speed, is guilty of a reckless disregard of all precautions for his own safety. Among the recent cases in which this principle was applied, see Atlantic Coast Line R. Co. Clements, 184 Va. 656, 36 S.E.(2d) 553; Norfolk, etc., R. Co. Epling, 189 Va. 551, 53 S.E.(2d) 817; and Butler Darden, 189 Va. 459, 53 S.E.(2d) 146.
Section 56-414 of the 1950 Code prescribes the signals to be given by railway trains for grade crossings over a highway "outside of incorporated cities and towns," and provides *216 that such trains "shall give such signals in cities and towns as the legislative authorities thereof may require."
Chapter 25, sec. 2, of the Code of the city of Petersburg, adopted by the Council on April 15, 1941, provides that any locomotive approaching a street crossing shall begin ringing its bell 50 yards from the street and shall continue to ring it until the train passes over the crossing.
Sec. 56-416 of the 1950 Code provides that "If the employees in charge of any railroad engine or train fail to give the signals required by law on approaching a grade crossing of a public highway, the fact that a traveler on such highway failed to exercise due care in approaching such crossing shall not bar recovery for an injury to or death of such traveler, nor for an injury to or the destruction of property in his charge, where such injury, death, or destruction results from a collision on such crossing between such engine or train and such traveler or the property in his charge, respectively; but the failure of the traveler to exercise such care, may be considered in mitigation of damages." (Italics added.)
It was held in Norfolk, etc., R. Co. White, 158 Va. 243, 163 S.E. 530, that the signals required by city ordinance to be given by the employees in charge of a railroad train approaching a public street within the city were within the purview of the foregoing statute, and if such signals were not given and a traveler on the street was injured, the negligence of the injured party would not bar a recovery, but such negligence must be considered in mitigation of damages.
Whether the doctrine of comparative negligence, as provided by the statute, applies, depends upon whether the crossing in question was a link of a public way. The evidence on this issue may be summarized as follows:
The official map of the city of Petersburg, made in 1943, does not show that any public street extends across defendant's right of way in this section of the city. It does show that Bollingbrook street, formerly known as Poythress street, *217 extends east and west, approximately parallel with defendant's right of way. It also shows that Irving street terminates at Bollingbrook street and extends south at right angles therefrom, but does not cross Bollingbrook street or defendant's right of way. These facts appear from several other maps of Petersburg filed as exhibits with the record.
Whitworth Cotten, engineer for Petersburg, testified that he was born in the city in 1908, and that he understood that at some former time Irving street extended across the right of way, but he never saw such a crossing and none had existed in his recollection. Several witnesses for defendant testified that there had been no grade crossing over defendant's right of way at Irving street since 1917. They were not familiar with the situation prior to that time.
A report and plot of lots made by R. D. Budd, city engineer in 1910, for the purpose of sale for delinquent taxes, indicate that the northern end of Irving street did extend across defendant's right of way. However, no witness testified that any crossing at this point had been constructed for and used by the public.
In 1921 the officials of Petersburg requested defendant to construct and maintain a grade crossing permitting the city to extend Irving street over its right of way. This request was refused, on the ground that such a crossing at this point would be too hazardous to justify the public use thereof.
Paul Morton, city manager in 1931, wrote defendant and referred to prior correspondence on the subject of "replacing the crossing of the tracks in the vicinity of Irving street," and stated "My information is that, in order to remove the hazard and liability of crossing these tracks, your company offered the use of your gravel pit, near your main line crossing of the Hopewell highway," as a garbage and trash dump. Morton concluded his letter in the following language: "I would appreciate hearing from you promptly whether I am correct in my information and if we may use this gravel pit, otherwise it may be necessary to *218 require the replacement of the crossing, for the use of Swann's Island."
Defendant granted this request and Petersburg used defendant's sand pit east of Petersburg as a city dump for eleven years thereafter. In 1942 the health authorities of Prince George county notified Petersburg that the continued use of the sand pit for disposal of city garbage and trash constituted a nuisance and requested it to abate the same. Petersburg thereupon invited defendant to send representatives to the site to confer with representatives of Petersburg for the purpose of determining where and when a grade crossing over defendant's right of way might be constructed, which would enable Petersburg to have access to its Swann's Island tract of land for use as a city dump.
There is some conflict in the testimony as to the phraseology and construction of the agreement made by representatives of the parties on this occasion. Defendant refused to construct a crossing as a part of Irving street extended, on the ground that it was too hazardous and that such a crossing would unduly interfere with "frogs" and switches connecting the different tracks on defendant's railway yard. The parties concede that it was agreed, subject to the approval of the city attorney, who was then Mr. J. Gordon Bohannan (1) that a crossing would be constructed approximately 50 feet east of a direct line extending from Irving street across defendant's right of way; (2) that the city would erect gates or bars across the proposed roadway just to the south of defendant's right of way; (3) that the city would keep the gates or bars locked at night and on Sundays and holidays and at other times when the city was not using the road for the purpose of going to and from the proposed dump; (4) that the city would require its truck drivers and helpers to flag the trucks in safety over the crossing when going to and from the dump; and (5) that defendant would instruct its employees in charge of locomotives and trains to give the signals for grade crossings and would erect railroad crossing signs in order to *219 reduce to a minimum the hazards of those using the grade crossing.
Evidently the attorney for the city approved the stipulations of the representatives of the city and defendant, because immediately thereafter each promise of the respective parties was performed.
Since 1942, Petersburg has maintained bars across its road just to the south of defendant's right of way. Usually these bars were locked at night and on Sundays and holidays. Petersburg kept the keys to the lock, and persons who desired to use the city dump were required to obtain permission from the city, and, when it was necessary, to obtain the keys to the lock on the bars.
Mr. Cotten, city engineer, was asked:
"Q. Do you know whether the drivers of trucks going over there were instructed to stop and flag the crossing to see if any trains were coming?"
"A. These instructions were given when the crossing was first installed."
"Q. Were they still in force when this accident had occurred?"
"A. Yes."
James J. Brockwell, superintendent of streets and refuse collection for Petersburg, testified that drivers of trucks and their helpers were instructed to flag the trucks across the right of way. Special emphasis was placed upon the instructions to the drivers and helpers going from the city to the dump. No emphasis was placed on the instructions to the employees coming from the dump, because there was no obstruction to the view of trains coming from either direction when the crossing was approached from the north.
The testimony establishes the fact that the dump was not used by the general public, although Petersburg knew and raised no objection to the fact that pedestrians used the way and crossing to the dump "to pick up junk," or anything desired by them. Pedestrians using the dump under these circumstances were mere licensees. *220
[3, 4] Most of the foregoing evidence was introduced by plaintiff. Such restrictions of the use of a street or road are inconsistent with the common and accepted meaning of a "public way" which is "a way open to all the people without distinction for passage and repassage at their pleasure." 39 C.J.S., Highways, p. 909.
Section 15-6 of the 1950 Code authorizes incorporated cities and towns "to lay off streets, walks or alleys, alter, improve and light the same and have them kept in good order; * * * and to regulate the transportation * * * through * * * (its) * * * streets."
This delegation of authority by the General Assembly does not relieve a municipality of liability for negligence in permitting obstruction of its public streets and ways in such manner as unreasonably to impede the passage of users thereof.
"The authority of municipalities over streets, they derive, as they derive all their powers, from the legislature -- from charter or statute. The fundamental idea of a street is not only that it is public, but public for all purposes of free and unobstructed passage, which is its chief and primary use." Norfolk City Chamberlaine, 29 Gratt. (70 Va.) 534.
In McCoull Manchester, 85 Va. 579, 8 S.E. 379, 2 L.R.A. 691, it appeared that plaintiff was seriously injured, and the horse he was riding was killed, when he rode into a pile of sand 4 feet high and 32 feet long, which a contractor had placed in the street for use in a building under construction on a lot adjacent to the street. The city defended the tort action brought against it for damages resulting from the accident on the ground that prior thereto the Council had adopted an ordinance permitting any person to place materials to be used in a building on a lot fronting on the street, provided that the material so placed did not occupy more than half of the used portion of the street. The trial court held that the ordinance in question constituted a complete defense to the action against the city. This court, on review, held that a municipality *221 could not escape the duty imposed upon it by law to keep the used portion of its streets in a reasonably safe condition for use by the public, by the adoption of an ordinance authorizing or permitting any one to obstruct the used portion of a public street without posting adequate warning signs or placing signal lights therein.
"It is well settled that public highways, whether they be in the country or in a city, belong, not partially, but entirely, to the public at large, and that the supreme control over them is in the Legislature. It is also an established general rule that any unauthorized obstruction which unnecessarily impedes or incommodes the lawful use of a highway is a public nuisance at common law." Richmond Smith, 101 Va. 161, 43 S.E. 345.
"The municipality must exercise reasonable care to keep in a safe condition for passage such public ways as are opened and intended by the municipality for general use, and over which the municipality exercises or may exercise full control, for their entire width." Norfolk Travis, 149 Va. 523, at pp. 528, 529, 140 S.E. 641, 56 A.L.R. 214.
The facts in Radford Calhoun, 165 Va. 24, 181 S.E. 345, 100 A.L.R. 1378, were that the city permitted a pile of concrete slabs 14 or 15 feet long and 3 feet wide to extend 16 inches into the paved and used portion of Norwood street. About nine o'clock at night plaintiff, driving a new Chevrolet automobile east along Norwood street, met another car traveling in or near the center of the street. Plaintiff, in order to avoid a head-on collision, swerved his car to the right and crashed into the pile of slabs. He recovered a judgment in the lower court against the city for the damages sustained by him in the collision. On review, the judgment was affirmed, and in the opinion delivered by Mr. Justice Eggleston, the duties imposed by law upon cities and towns to keep the used portion of streets free of obstructions were restated. He quoted, with approval, the following excerpts from former opinions:
"'The public is entitled to the full and free use of all *222 the territory embraced within a highway in its full length and breadth * * *.' Richmond Smith, 101 Va. 161, 167, 43 S.E. 345, 346; Richmond Pemberton, 108 Va. 220, 226, 61 S.E. 787; Appalachian Power Co. Wilson, 142 Va. 468, 473, 129 S.E. 277."
"'In cases of temporary necessity a municipality may allow obstructions on the public sidewalks or streets, but the traveling public should be warned of and protected against the same in some proper manner, and for failure to perform its duty the city is liable.' Arthur Charleston, 51 W.Va. 132, 41 S.E. 171; Norfolk Johnakin, 94 Va. 285, 289, 26 S.E. 830."
It follows that if the crossing in this case constitutes a link of a public way Petersburg had no right to maintain bars across it and keep the bars locked for more than half the time. Such blocking or obstruction of a way interferes with the free use thereof by the public. If it is necessary to place temporary bars or obstructions across a public way for legitimate purposes, it is the duty of the municipality to warn, in a proper manner, the users of the way of the existence of such bars or obstructions. These are well settled legal principles.
The facts in Chesapeake, etc., Ry. Co. Faison, 189 Va. 341, 52 S.E.(2d) 865, were that the railway company reopened an old grade crossing for the benefit of one Levinson, a landowner, for the purpose of giving him and his employees a convenient passage way from his farm to a hard-surfaced road which ran on the opposite side of the right of way. This grade crossing was reopened on condition that Levinson would erect a gate across the roadway just to the northern edge of defendant's right of way and keep the same locked at night to prevent its general use by the public. Faison, a taxicab driver, at night, turned into the road, of which the crossing was a connecting link, on the assumption that it was a public highway. He found the gate locked. In attempting to back his cab across the highway, he drove off the edge of the hard surface of the crossing. *223 His motor stopped, and before he could remove the cab from the tracks, it was struck and demolished by a passing train. This court held that, as a matter of law, the evidence was insufficient to prove the existence of a highway crossing.
The evidence in the case now under consideration proves that Petersburg has given permission to a number of merchants and manufacturers to use the city dump as a place for the disposal of their accumulated trash which is transported to the city dump over the crossing. However, Petersburg has consistently refused to permit the roadway and dump to be used by the general public. It exercises exclusive control over the key to the bars across the roadway. Truck drivers and helpers are specifically instructed to flag its trucks in safety over the crossing. No municipality has a right to so restrict the use of a public way within its corporate limits.
In view of the uncontradicted testimony as to the agreement between Petersburg and defendant when the crossing was constructed, and the consistent performance of the agreement thereafter, we are constrained to hold that the crossing in question is not a public highway within the meaning of the words "a * * * grade crossing of a public highway," as used in the statute. (Section 56-416 of the 1950 Code.)
The following evidence tends to strengthen this view. The record discloses that Chapter 25, sec. 1, of the Code of the city of Petersburg, provides that "no engine, car or other vehicle shall be * * * propelled upon any railroad * * * across any street of the city at a greater rate of speed than six miles per hour." It appears that defendant gave general instructions to its employees in charge of its trains passing over the crossing to proceed at the rate of 25 miles per hour. It is improbable that defendant would have authorized its employees to operate its trains at this rate of speed if it regarded this as a public crossing. It is likewise improbable that Petersburg would have permitted defendant's trains *224 to be operated at this rate of speed if it had regarded this as a public crossing.
We find no error in the decision of the trial court declaring that the crossing in question is not a link in a public highway. Inasmuch as the evidence for plaintiff clearly establishes the negligence of decedent, she is not entitled to recover in this action. It follows that it is unnecessary to consider the other assignments of error.
The judgment of the trial court is
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314723/ | 61 S.E.2d 448 (1950)
232 N.C. 497
HOLT
v.
HOLT et al. (two cases).
No. 236.
Supreme Court of North Carolina.
October 18, 1950.
*451 Wellons, Martin & Wellons, Levinson & Batton, Smithfield, and McLean & Stacy, Lumberton, for plaintiffs, appellants.
Abell, Shepard & Wood, Smithfield, for defendants, appellees.
ERVIN, Justice.
The answers deny the material allegations of the complaints, plead various statutes of limitation, and assert a want of capacity in plaintiffs to prosecute the suits. In consequence, the establishment of three distinct propositions is indispensable to the causes of action alleged by plaintiffs. These are: (1) That the decedent, A. F. Holt, Sr., was induced to execute the conveyances in controversy by fraud or undue influence of the defendants and their alleged co-conspirator, Clifton G. Holt; (2) that the cause of action arising out of this wrong existed in A. F. Holt, Sr., at the time of his death; and (3) that such cause of action thereupon passed to the plaintiffs in their capacities as heirs and next of kin of A. F. Holt, Sr.
The soundness of this observation becomes manifest when due heed is paid to relevant things. To create civil liability for conspiracy, a wrongful act resulting in injury to another must be done by one or more of the conspirators pursuant to the common scheme and in furtherance of the common object. The gravamen of the action is the resultant wrong, and not the conspiracy itself. Ordinarily the conspiracy is important only because of its bearing upon rules of evidence, or the persons liable. 11 Am.Jur., Conspiracy, section 45.
In the last analysis, the wrong charged in the instant cases is that of procuring property from the decedent, A. F. Holt, Sr., by fraud or undue influence. As we shall see, this was a wrong against the decedent, and not a wrong against the plaintiffs. Hence the plaintiffs are asserting alleged rights which are essentially derivatives from their ancestor. The significance of this fact must not be obscured in any degree by the allegations of the complaints that the alleged conspirators procured the conveyances from A. F. Holt, Sr., to deprive the plaintiffs of their rights of inheritance as prospective heirs and distributees of their then living ancestor.
A child possesses no interest whatever in the property of a living parent. He has a mere intangible hope of succession. Allen v. Allen, 213 N.C. 264, 195 S.E. 801. His right to inherit the property of his parent does not even exist during the lifetime of the latter. Whitley v. Arenson, 219 N.C. 121, 12 S.E.2d 906; Bemis v. Waters, 170 S.C. 432, 170 S.E. 475. Such right arises on the parent's death, and entitles the child to take as heir or distributee nothing except the undivised property left by the deceased parent. Chinnis v. Cobb, 210 N.C. 104, 185 S.E. 638; Gosney v. McCullers, 202 N.C. 326, 162 S.E. 746.
In so far as his children are concerned, a parent has an absolute right to dispose of his property by gift or otherwise as he pleases. He may make an unequal distribution of his property among his children with or without reason. These things being true, a child has no standing at law or in equity either before or after the death of his parent to attack a conveyance by the parent as being without consideration, or in deprivation of his right of inheritance. *452 Wootton v. Keaton, 168 Ark. 981, 272 S.W. 869; Ehrlich v. Tritt, 316 I11. 221, 147 N.E. 40; Childress v. Childress, 298 I11. 185, 131 N.E. 586; Rhodes v. Meredith, 260 I11. 138, 102 N.E. 1063, Ann.Cas.1914D, 416; McLaughlin v. McLaughlin, 241 I11. 366, 89 N.E. 645; Jones v. Jones, 213 I11. 228, 72 N.E. 695; Thorne v. Cosand, 160 Ind. 566, 67 N.E. 257; Lefebure v. Lefebure, 143 Iowa 293, 121 N.W. 1025; Clester v. Clester, 90 Kan. 638, 135 P. 996, L.R.A.1915E, 648; Doty v. Dickey, 96 S.W. 544, 29 Ky.Law. Rep. 900; Rossi v. Davis, 345 Mo. 362, 133 S.W.2d 363, 125 A.L.R. 1111; Brashears v. State ex rel. Oklahoma Public Welfare Commission, 194 Okl. 663, 154 P.2d 101; Mandel v. Bron, 270 Pa. 566, 113 A. 834; Hanes v. Hanes, Tex.Com.App., 239 S.W. 190, overuling motion for rehearing 234 S.W. 1078; In re Eckert's Estate, 14 Wash. 2d 497, 128 P.2d 656; In re Peterson's Estate, 12 Wash.2d 686, 123 P.2d 733; Roy v. Roy, 113 Wash. 609, 194 P. 590; Schumacher v. Draeger, 137 Wis. 618, 119 N.W. 305.
When a person is induced by fraud or undue influence to make a conveyance of his property, a cause of action arises in his favor, entitling him, at his election, either to sue to have the conveyance set aside, or to sue to recover the damages for the pecuniary injury inflicted upon him by the wrong. Van Gilder v. Bullen, 159 N.C. 291, 74 S.E. 1059; Modlin v. Roanoke Railroad & Nav. Co., 145 N.C. 218, 58 S.E. 1075. But no cause of action arises in such case in favor of the child of the person making the conveyance for the very simple reason that the child has no interest in the property conveyed and consequently suffers no legal wrong as a result of the conveyance. Carter v. McNeal, 86 Ark. 150, 110 S.W. 222; Moss v. Edwards, 146 Ga. 686, 92 S.E. 213; Pidcock v. Reid, 145 Ga. 103, 88 S.E. 564; Huffman v. Beamer, 191 Iowa 893, 179 N.W. 543; Seager v. Tholens, 182 A.D. 317, 170 N.Y.S. 482; Dodson v. Kuykendall, Tex.Civ.App., 127 S.W.2d 348.
The person making the conveyance may put an end to his cause of action during his lifetime by reducing it to judgment, or by ratifying the conveyance after the fraud has been discovered or the undue influence has ceased to operate. 26 C.J.S., Deeds, § 67. Besides, the cause of action may become barred by an applicable statute of limitation. G.S. § 1-52, subd. 9; Little v. Bank of Wadesboro, 187 N.C. 1, 121 S.E. 185; Muse v. Hathaway, 193 N.C. 227, 136 S.E. 633. But if the cause of action still exists in the person making the conveyance at the time of his death, it passes to those who then succeed to his rights. 18 C.J., Deeds, § 180; 26 C.J.S., Descent and Distribution, § 85. See, also in this connection: Ellis v. Barnes, 181 N.C. 476, 106 S.E. 29; Plemmons v. Murphy, 176 N.C. 671, 97 S.E. 648; Brown v. Brown, 171 N. C. 649, 88 S.E. 870.
The persons succeeding to the unimpaired right of a decedent to ratify or repudiate a conveyance for fraud or undue influence vary, depending upon whether the decedent died testate or intestate, and whether the property involved is real or personal. When the property is realty, the right passes to the heirs in case of intestacy, Pritchard v. Smith, 160 N.C. 79, 75 S.E. 803, and to the devisees in case the grantor leaves a will. Flythe v. Lassiter, 199 N.C. 804, 153 S.E. 844; Speed v. Perry, 167 N.C. 122, 83 S.E. 176. As a rule, actions to impeach transfers of personalty made by a decedent in his lifetime must be brought by his personal representative, and not by his legatees or distributees. In re Acken's Estate, 144 Iowa 519, 123 N.W. 187, Ann.Cas.1912A, 1166; 21 Am.Jur., Executors and Administrators, section 908. The legatees or distributees may sue, however, to recover personal assets of an estate when fraud, collusion, or a refusal to sue on the part of the personal representative renders such action necessary for the protection of ultimate rights accruing to them under a will or the statute of distribution. 26 C.J.S., Descent and Distribution, § 85; 34 C.J.S., Executors and Administrators, §739.
The plaintiffs claim succession to the right to prosecute these actions as heirs and next of kin of their ancestor, A. F. Holt, Sr. Their testimony reveals, however, that the Clerk of the Superior Court of Johnston County has admitted to probate *453 in common form as the last will of A. F. Holt, Sr., a certain paper writing, which is sufficient in form and substance to vest in the defendants all rights existing in A. F. Holt, Sr., at the time of his death. To be sure, the plaintiffs offered the record of such paper writing in evidence "for the purpose of attack," and undertake to avoid its legal effect as a testamentary conveyance of the rights of their ancestor to the defendants by asserting that its execution was induced by fraud or undue influence perpetrated on their ancestor by the defendants and their fellow conspirator, Clifton G. Holt. But the law does not permit the plaintiffs to assail the probated paper writing in this collateral fashion. Under the statute now codified as G.S. § 31-19, the order of the Clerk admitting the paper writing to probate constitutes conclusive evidence that the paper writing is the valid will of the decedent until it is declared void by a competent tribunal on an issue of devisavit vel non in a caveat proceeding. Whitehurst v. Hinton, 209 N.C. 392, 184 S.E. 66; Wells v. Odum, 205 N.C. 110, 170 S.E. 145; Crowell v. Bradsher, 203 N.C. 492, 166 S.E. 331; In re Will of Rowland, 202 N.C. 373, 162 S.E. 897; Moore v. Moore, 198 N.C. 510, 152 S.E. 391; In re Will of Cooper, 196 N.C. 418, 145 S.E. 782; Mills v. Mills, 195 N.C. 595, 143 S.E. 130; Citizens' Bank & Trust Co. v. Dustowe, 188 N.C. 777, 125 S.E. 546; Ewards v. White, 180 N.C. 55, 103 S.E. 901; Starnes v. Thompson, 173 N.C. 466, 92 S.E. 259; Holt v. Ziglar, 163 N.C. 390, 79 S.E. 805; McClure v. Spivey, 123 N.C. 678, 31 S.E. 857.
This being true, the plaintiffs have no standing to maintain these suits until the probated paper writing is declared invalid as a testamentary instrument by a competent tribunal in a caveat proceeding; for such paper writing wills all rights existing in A. F. Holt, Sr., at the time of his death to the defendants, with the result that nothing descends to the heirs or next of kin. Varner v. Johnston, 112 N.C. 570, 17 S.E. 483; Kashouty v. Deep, 75 U.S.App.D.C. 259, 126 F.2d 233; Anglin v. Hooper, 153 Ga. 734, 113 S.E. 195; Murray v. McGuire, 129 Ga. 269, 58 S.E. 841; Reed v. Reed, 225 Iowa 773, 281 N.W. 444; Altfather v. Bloom, 218 Mich. 582, 188 N.W. 428; Green v. Sumby, 230 Pa. 500, 79 A. 712; Gilkeson v. Thompson, 210 Pa. 355, 59 A. 1114.
This conclusion requires an affirmance of the compulsory nonsuits, and renders unnecessary any consideration of the questions whether the evidence adduced at the trial is sufficient to establish the facts constituting the causes of action alleged by plaintiffs, and whether such causes of action are barred by the statutes of limitation pleaded by defendants.
The judgments of involuntary nonsuit are
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2631055/ | 164 P.3d 125 (2007)
2007 OK 48
In re INITIATIVE PETITION NO. 384, State Question No. 731.
No. 103,548.
Supreme Court of Oklahoma.
June 12, 2007.
Lee Slater, Oklahoma City, OK, for Petitioner/Proponent First Class Education for Oklahoma.
D. Kent Meyers, Roger A. Stong, Amanda L. Maxfield, Crowe & Dunlevy, Oklahoma City, OK, for Respondents/Protestants Dr. Keith Ballard, Tommy Anderson, Kathleen Brown, Lori A. Burchette, Billy F. Burns, Wesley Crain, Dr. June Ehinger, Vickie Foraker, Willa Jo Fowler, Rick George, Jere Gibson, Lisa G. Gigstad, Richard Gorman, Jeff Johnson, Matt G. Livingood, Glen Lonetree, Eva Martens, Michael Mullins, Jesse Nash, Roger E. Nelson, Eli Oswalt, Frances M. Percival, Beth Schieber, Rodney Schilt, James Smith, Dr. Dan Snell, Mary Spannagel, Don Tice, Edward L. Tillery, John D. Tuttle, Virgil Wells, Sharon Whepley, Joseph E. Williams, Dr. Shirley Woods, and Lesa L. Young.
COLBERT, J.
¶ 1 This initiative petition seeks to add a new section to title 70 of the Oklahoma Statutes. The proposed statute would require school districts to devote 65% of their "operational expenditures" to "classroom instructional expenditures." The petition was filed with the Secretary of State on March 7, 2006, and petition pamphlets containing signatures were submitted on June 5, 2006. The Secretary of State has certified that 165,157 signatures were counted. Because 1,463,758 votes were cast for the state office receiving the highest number of votes in the last general election, 117,101 signatures are necessary to submit the proposed legislation to a vote of the people. Upon receiving the certification by the Secretary of State, this Court found that the signatures submitted by the Proponent appear numerically sufficient and ordered that notice be published to allow anyone protesting the petition to respond. The Protestants filed their protest on August 23, 2006. They and the Proponent, First Class Education for Oklahoma, have fully briefed *127 their positions. The matter now stands submitted for this Court's review.
¶ 2 The right to enact laws by a vote of the people through initiative petition is reserved in article V, section 1 of the Oklahoma Constitution. While this fundamental and precious right is zealously protected by this Court, it is not absolute. In re: Initiative Petition No. 379, 2006 OK 89, ¶¶ 16-17, 155 P.3d 32, 39-40. Any citizen can protest the sufficiency and legality of an initiative petition. Okla. Stat. tit. 34, § 8 (2001). Upon such protest, this Court must review the petition to ensure that it complies with the "parameters of the rights and restrictions [as] established by the Oklahoma Constitution, legislative enactments and this Court's jurisprudence." Petition 379, 2006 OK 89, ¶ 16, 155 P.3d at 39.
¶ 3 The proposed statute would read:
A. This Act shall be known as The First Class Education for Oklahoma Act.
B. A school district shall spend at least sixty-five per cent of its Operational Expenditures on Classroom Instructional Expenditures.
C. A school district that does not spend at least sixty-five per cent of its Operational Expenditures on Classroom Instructional Expenditures in fiscal year 2007 shall for fiscal year 2008 increase the percentage of its Operational Expenditures that it spends on Classroom Instructional Expenditures by at least two per cent each subsequent fiscal year until the school district spends at least sixty-five per cent of its Operational Expenditures on Classroom Instructional Expenditures as required by this Act.
D. A school district shall submit its proposed annual budget to the State Superintendent of Public Instruction who shall verify that the school district's planned Classroom Instructional Expenditures are in compliance with this Act. In addition, the required annual report from each district shall be amended to show the total Classroom Instructional Expenditures as a percentage of the total Operational Expenditures for the year then ended.
E. If the budget submitted pursuant to Section D of this Act indicates that a school district is unable to meet either the requirement prescribed in Section B or the requirement prescribed in Section C of this Act, the district's annual report shall show that it did not comply with this Act for a particular year. The school district may petition the Superintendent of Public Instruction for a one-year waiver from the requirements of Sections B and/or C of this Act. The Superintendent of Public Instruction shall notify the school district within thirty days after the submission of the waiver petition whether the Superintendent will grant, deny or grant in part the waiver request.
F. In determining whether or not to grant a full or partial waiver under Section E of this Act, the Superintendent of Public Instruction shall consider all of the facts and circumstances including, but not limited to, whether the costs of transportation services are demonstrably higher because of the geographic size of or the distribution of the students throughout the district.
G. The legislature shall determine under what circumstances and to what extent sanctions may be taken or applied against school districts that do not comply with the requirements of this Act.
H. The Superintendent of Public Instruction shall develop model plans to assist districts in meeting the requirements of this Act. In particular, it should be the goal of the Superintendent of Public Instruction and the State Board of Education, in administering The First Class Education for Oklahoma Act, to provide districts with the tools to meet the requirements of this Act. Nothing in this Act should be construed to require the consolidation of a district with another district or the closing or elimination of any school or school district.
I. For purposes of this Act, "Classroom Instructional Expenditures" means expenditures directly related to classroom instruction, including, but not limited to, instructional staff and instructional materials. "Instructional" shall include activities dealing directly with interaction between *128 students and teachers or other classroom and instructional personnel, special education instruction, tutors, books, classroom computers, general instruction supplies, instructional aides, libraries and librarians, class activities such as field trips, athletics, arts, music and multidisciplinary learning, and extra curricular activities including, but not limited to, drama, sports and band.
J. For purposes of this Act, "Operational Expenditures" means all expenditures made by a school district other than expenditures for capital construction or debt or bond payments, including but not limited to the payment of interest on debt or bonds, and expenditures for facilities' leases and facilities' rental payments.
¶ 4 The Protestants contend this initiative petition is fatally flawed because the proposed statute would violate provisions of Oklahoma's constitution and because the "gist," the description of the proposed statute at the top of each signature page, is misleading and does not sufficiently inform the voter of the proposal. Because we conclude that the gist is legally insufficient, we will refrain from addressing the constitutional issues.[1]State ex rel. Fent v. State ex rel. Okla. Water Res. Bd., 2003 OK 29, ¶ 12, 66 P.3d 432, 439; In re Initiative Petition No. 363, 1996 OK 122, ¶ 13, 927 P.2d 558, 565.
¶ 5 The "gist" is a relative newcomer to Oklahoma's initiative petition process in comparison to the process itself. The statutory language creating the requirement is brief:
A simple statement of the gist of the proposition shall be printed on the top margin of each signature sheet.
Okla. Stat. tit. 34, § 3 (2001). Since the Legislature's creation of the gist requirement in 1985, this Court has discussed its nature in eight opinions. In re Initiative Petition No. 341, 1990 OK 53, 796 P.2d 267; In re Initiative Petition No. 344, 1990 OK 75, 797 P.2d 326; In re Initiative Petition No. 342, 1990 OK 76, 797 P.2d 331; In re Initiative Petition No. 347, 1991 OK 55, 813 P.2d 1019; In re Initiative Petition No. 348, 1991 OK 110, 820 P.2d 772; In re Initiative Petition No. 360, 1994 OK 97, 879 P.2d 810; In re Initiative Petition No. 362, 1995 OK 77, 899 P.2d 1145; and Petition 363, 1996 OK 122, 927 P.2d 558.
¶ 6 In Petition 341, we considered the gist for the first time and distinguished it from the ballot title with its more detailed requirements.[2] Because the gist was substantially similar to the title we had already determined to be sufficient, the gist was also sufficient. Petition 341, 1990 OK 53, ¶ 25, 796 P.2d at 274.
¶ 7 That same year, this Court declared two initiative petitions invalid, in part because their gists were insufficient. Petition 344, 1990 OK 75, 797 P.2d 326; Petition 342, 1990 OK 76, 797 P.2d 331. In Petition 342, we deemed the gist insufficient because it addressed only a few of the numerous constitutional changes proposed in the petition. *129 While we declared the petition invalid because it violated the single subject rule, Okla. Const. art. V, § 57, we observed that the gist "should be sufficient that the signatories are at least put on notice of the changes being made." Petition 342, 1990 OK 76, ¶ 14, 797 P.2d at 334. A signature on the petition must reflect "the actual intent" of the voter. Id. ¶ 15, 797 P.2d at 334. In Petition 344, we made a statement that has been applied to gist analysis to this day: Both the gist and the ballot title "must be brief, descriptive of the effect of the proposition, not deceiving but informative and revealing of the design and purpose of the petition." Petition 344, 1990 OK 75, ¶ 14, 797 P.2d at 330. We continued, "The limitations imposed [on the gist and title] are necessary to prevent deception in the initiative process [and] voters, after reading the [gist] and the ballot title, should be able to cast an informed vote." Id.
¶ 8 In subsequent opinions, we reiterated that the gist must explain the proposal's effect. Petition 347, 1991 OK 55, ¶ 18, 813 P.2d at 1028. The explanation of the effect on existing law, however, does not extend to describing policy arguments for or against the proposal. See id. ¶ 23, 813 P.2d at 1029-1030. A gist is sufficient if it apprises the voters of what the proposed measure is intended to do. Petition 348, 1991 OK 110, ¶ 23, 820 P.2d at 779. Gists need only convey the practical, not the theoretical, effect of the proposed legislation. Petition 360, 1994 OK 97, ¶¶ 21-22, 879 P.2d at 817.
¶ 9 We have continued to distinguish the gist from the more-detailed title, describing it as a "shorthand explanation of a proposition's terms." Petition 362, 1995 OK 77, ¶ 10, 899 P.2d at 1150. The purpose of the gist "is to prevent deceit, fraud, and corruption in the initiative process." Petition 363, 1996 OK 122, ¶ 18, 927 P.2d at 567 (emphasis omitted). It "is not required to contain every regulatory detail so long as its outline is not incorrect." Id. ¶ 20, 927 P.2d at 567 (emphasis omitted). We will approve the text of a challenged gist if it is "free from the taint of misleading terms or deceitful language." Id.
¶ 10 In the initiative petition we consider today, the gist stated:
This measure amends the Oklahoma School Code, by adopting the First Class Education for Oklahoma Act. It requires sixty-five percent (65%) of the operational expenditures of a school district to be spent on classroom instruction. Classroom instruction includes expenditures directly related to classroom instruction, including instructional staff and materials, activities dealing directly with interaction between students and teachers or other classroom personnel, special education instruction, tutors, books, classroom computers, general instruction supplies, instructional aides, libraries and librarians, class activities such as field trips, athletics, arts, music and multidisciplinary learning, and extra curricular activities including drama, sports and band. Nothing in the measure would force or require the closing or consolidation of any schools or school districts.
The Protestants contend the gist was flawed because it contained no description of the effect of the proposed law on school building funds, sinking funds, lottery trust funds, federal funds, and the possible practical effect of forcing school closures. In making this argument, the Protestants seek to have the gist reflect all of their constitutional concerns. We will not impose such a requirement. While the statement must put voters "on notice of the changes being made," Petition 342, 1990 OK 76, ¶ 14, 797 P.2d at 334, it need not make the Protestants' arguments for them by delineating each policy argument for and against the proposed legislation.
¶ 11 We are persuaded, however, by the Protestants' alternate argument, that the gist was flawed because it contained no discussion of the language in the proposed statute providing for legislative sanctions for non-conforming school districts and the possibility of waivers by the state superintendent. The Protestants contend that these omissions mean that the gist failed to alert potential signatories to the effect the proposed statute would have on the balance of power between local school boards and the *130 state. We agree.[3]
¶ 12 The "cut and paste" approach used here resulted in a gist that, at once, contains too much and not enough information. It defines "classroom instructional expenditures" in mind-numbing detail taken directly from the statute, but fails to define "operational expenditures"[4] or disclose provisions for stepped or phased-in compliance, the additional authority given to the Superintendent of Public Instruction to approve the school district budgets and waive noncompliance, and the possibility of legislative sanctions for noncomplying school districts. As a result, a potential signatory, looking only at the gist, did not have sufficient information to make an informed decision about the true nature of the proposed legislation. We are forced, therefore, to conclude that this gist does not satisfy the requirements of title 34, section 3.
¶ 13 The gist is but one part of the petition package-the "pamphlet"-handed to a prospective signatory. Okla. Stat. tit. 34, § 3 (2001). Indeed, it is but a small part of the pamphlet, which also contains a copy of the petition filed with the Secretary of State and the full text of the proposed statute. Nevertheless, the Legislature has deemed the gist a necessary part of the pamphlet and we are not at liberty to ignore that requirement, since we must presume that the Legislature "expressed its intent" in creating the gist requirement and "that it intended what it so expressed." TXO Prod. Corp. v. Okla. Corp. Comm'n, 1992 OK 39, ¶ 7, 829 P.2d 964, 969; see also Neer v. State ex rel. Okla. Tax Comm'n, 1999 OK 41, ¶ 15, 982 P.2d 1071, 1078. The statement provided by the Proponents at the top of each signature page in this initiative petition did not satisfy the statutory requirement.
INITIATIVE PETITION NO. 384, STATE QUESTION NO. 731, IS DECLARED INVALID AND ORDERED STRICKEN FROM THE BALLOT.
CONCUR: EDMONDSON, V.C.J., KAUGER, WATT, TAYLOR, COLBERT, JJ.
DISSENT: WINCHESTER, C.J., LAVENDER, HARGRAVE, OPALA, JJ.
NOTES
[1] The Protestants argue that the proposed legislation would violate the spending provisions of the Oklahoma Constitution-article X, section 19, which prohibits taxes levied for one purpose to be devoted to another purpose; article X, section 28, which requires that monies in a school district's sinking fund may not be used for purposes other than the payment of interest, bonds, and judgments; and article X, section 41, which requires funds from the Oklahoma Education Lottery Trust Fund to be used for purposes other than classroom instructional expenditures. The Protestants also contend that the proposed legislation would violate article V, section 57, because it embraces more than one subject.
[2] A ballot title:
1. Shall not exceed two hundred (200) words;
2. Shall explain in basic words, which can be easily found in dictionaries of general usage, the effect of the proposition;
3. Shall be written on the eighth-grade reading comprehension level;
4. Shall not contain any words which have a special meaning for a particular profession or trade not commonly known to the citizens of this state;
5. Shall not reflect partiality in its composition or contain any argument for or against the measure;
6. Shall contain language which clearly states that a "yes" vote is a vote in favor of the proposition and a "no" vote is a vote against the proposition; and
7. Shall not contain language whereby a "yes" vote is, in fact, a vote against the proposition and a "no" vote is, in fact, a vote in favor of the proposition.
Okla. Stat. tit. 34, § 9(B) (Supp.2006).
[3] The ballot title, as proposed by the proponents, would have read:
This measure amends the Oklahoma School Code by adding a new section: Oklahoma Statute Title 70 Section 18-126 to require that sixty-five percent (65%) of the operational expenditures of a school district be spent on classroom instruction. For purposes of this Act, classroom instruction includes expenditures directly related to the classroom: instructional staff and materials, activities involving interaction between students and teachers or other classroom personnel, special education instruction, tutors, books, classroom computers, general instruction supplies, instructional aides, libraries and librarians, class activities such as field trips, athletics, arts, music and multidisciplinary learning, and extra-curricular activities including drama, sports and band.
The measure establishes a process for implementation of the Act and also permits waivers by the State Superintendent of Public Instruction in certain circumstances. Nothing in the measure would force or require the closing or consolidation of any schools or school districts.
Shall the following proposal be approved?
For the proposal YES
Against the proposal NO
A "YES" vote is a vote in favor of this measure. A "NO" vote is a vote against this measure.
Although no one filed an appeal from the proposed ballot title, we observe that it is not appreciably different from the gist we have found insufficient today. See In re Initiative Petition No. 341, 1990 OK 53, ¶¶ 20, 24-25, 796 P.2d 267, 273-74.
[4] It may not be necessary to define either "classroom instructional expenditures" or "operational expenditures" with the same kind of detail used by the Proponents in this gist, but the inclusion of one overly detailed definition without any definition of the other term creates an imbalance at odds with the purpose of the gist. | 01-03-2023 | 11-01-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314853/ | 180 Kan. 258 (1956)
303 P.2d 137
AUGUST R. BYER, Appellant,
v.
GLADYS BYER, Appellee.
No. 40,203
Supreme Court of Kansas.
Opinion filed November 3, 1956.
E.F. Russell, of Ulysses, argued the cause, and Arthur R. Gates, of St. John, was with him on the briefs for the appellant.
Evart Garvin. of St. John, argued the cause, and Robert Garvin and Morris Garvin, both of St. John, were with him on the briefs for the appellee.
The opinion of the court was delivered by
PARKER, J.:
This, looking through form to substance and although briefed and argued by the parties as if it were in the nature of conversion, is actually and must therefore be regarded as a suit in equity to recover money and compel the defendant to account for proceeds received by reason of having cashed ten United States Savings Bonds, procured and registered in co-ownership form by one Albert Byer in the names of Mr. August R. Byer (his son) or Mrs. Gladys Byer (his wife); and one United States Savings Bond procured and registered in beneficiary form by the same individual in the names of Mrs. Gladys Byer, P.O.D. August R. Byer, conceded to be the same person as August Byer.
Plaintiff commenced the action by the filing of a petition wherein, after reciting the purchase and registration of bonds as above indicated, he asserted that after the dates (describing them) of their purchase and on the date of their conversion by the defendant, Gladys Byer, he was the registered owner of an undivided one-half interest therein; alleged that about September 15, 1952, the defendant took possession of such bonds and thereafter, about February 9, 1954, before their maturity, cashed, redeemed, received payment and wrongfully converted such bonds to her own use, all without his knowledge or consent; and asked that the court (1) find he was the owner of an undivided one-half interest in and to such bonds prior to the date of their conversion, (2) require defendant to account to him for an undivided one-half interest in the proceeds realized from their redemption, with accumulated interest, and (3) grant judgment accordingly for whatever amount that sum might be, with interest from February 9, 1954, at 6% per annum, together with such other and further relief as might seem just and equitable.
For purposes essential to a disposition of the case it may be said *260 the answer of the defendant contains a general denial; admits the purchase of the involved bonds, in the manner and form heretofore indicated; denies all other allegations of the petition not admitted; specifically denies plaintiff is entitled to receive any part of the proceeds from such bonds or that defendant is indebted to him in any amount as alleged in the petition. In addition paragraph four of such answer states:
"This defendant further alleges that subsequent to the purchase of said bonds by the said Albert Byer, the said Albert Byer delivered all of the aforementioned and described bonds to this defendant as her sole and separate property in the event she desired to cash said bonds; that the said Albert Byer, at the time of the delivery of all of the said bonds, specifically described in Plaintiff's Amended Petition, to this defendant, further directed and authorized this defendant to cash said bonds subsequent to his death and use the proceeds to be received therefrom for the purpose of paying the same upon any federal estate taxes or inheritance taxes which might be assessed against the estate of said decedent. Defendant further alleges that said bonds were cashed by this defendant and that all the proceeds received therefrom were used and applied by this defendant upon the payment of federal estate taxes which were assessed against the estate of said decedent."
Plaintiff's reply to the answer admits that the bonds were cashed by the defendant and denies all other allegations contained in that pleading.
With issues joined as just related the cause came on for trial by the court which, after introduction of evidence and arguments by counsel, ultimately rendered judgment against the plaintiff and in favor of defendant in accord with and based on findings of fact and conclusions of law which read:
"FINDINGS OF FACT.
"1. Albert Byer, deceased father of plaintiff August R. Byer, and deceased husband of defendant Gladys Byer, during his lifetime purchased eleven United States Savings Bonds of the maturity value of $1,000.00 each. On ten of the bonds, the co-owners were named as `Mr. August Byer or Mrs. Gladys Byer,' and on one bond the registration was `Mrs. Gladys Byer POD August R. Byer.'
"2. That said bonds were kept in the possession of decedent at all times until his death, and were never delivered by him to either plaintiff or defendant during his lifetime.
"3. That on or about September 15, 1952, after decedent's death, Gladys Byer, the defendant, took possession of said bonds, and on or about February 9, 1954, said defendant redeemed said bonds and converted the proceeds to her own use, and that at said time the bonds, together with accumulated interest thereon, were of the value of $9,660.00.
"4. That the United States Treasury Regulations governing United States *261 Savings Bonds provided in part as follows, where bonds are issued in co-ownership form:
"`... During the lives of both co-owners, the bond will be paid to either co-owner upon his separate request without requiring the signature of the other co-owner; and upon payment to either co-owner, the other person shall cease to have any interest in the bond.'
"5. That under the Regulation quoted above, Gladys Byer, as a co-owner of said bonds, having secured possession of said bonds, was therefore entitled to cash and redeem said bonds and use the proceeds for her own purposes, and August R. Byer ceased to have any interest in said bonds."
"CONCLUSIONS OF LAW.
"1. The court finds as a matter of law that after defendant Gladys Byer secured possession of said bonds and cashed them, that plaintiff, August R. Byer, no longer had any interest in said bonds. The court further finds that if the decedent had desired that Gladys Byer and August R. Byer share equally in the proceeds of said bonds, decedent should have had them registered, at the time of purchase, in the names of `Gladys Byer and August R. Byer.'
"2. Judgment of the court is therefore rendered for defendant, Gladys Byer, with costs of the action taxed to the plaintiff, August R. Byer."
Following rendition of judgment plaintiff's motion for a new trial was overruled. Thereupon he gave notice and brought the cause to this court on appeal where, under proper specifications of error, he is entitled to appellate review of the questions presently to be considered.
The issues will be clarified by immediate reference to two matters which do not involve the merits of the controversy.
Resort to finding of fact No. 5, heretofore quoted, discloses it is purely a conclusion of law and must be so regarded in determining the rights of the parties. It follows appellant was not required, as appellee insists, to abstract the evidence adduced in the court below in order to here obtain review of the question whether such conclusion of law is erroneous.
Much space in appellee's brief is devoted to contentions relating to the necessity of pleading and providing a demand in conversion cases. Our views respecting the nature of the involved action are stated in the very first paragraph of this opinion and we are convinced that in a situation such as is there outlined appellant was not required to either plead or prove a demand in order to recover judgment. For that reason no further reference will be made to arguments advanced respecting such contentions.
Upon an extended examination of the record, and careful analysis of all contentions advanced by the parties including arguments *262 made with respect thereto, it becomes apparent that the primary question involved in this case, on which all other issues depend, is to be found in the trial court's conclusions of law and can be stated thus:
Does one co-owner in the possession of United States Savings Bonds, who under existing United States Treasury Regulations (bearing date of May 21, 1952) can cash and procure payment of the bonds upon his separate request (See Regulation § 315.45 and Finding of Fact No. 4), have the right to retain all of the proceeds of such bonds upon redemption without incurring liability to account for and pay the other co-owner of the bonds whatever portion of such proceeds the courts may find the other co-owner was rightfully entitled to at the time the bonds were cashed and redeemed?
The appellee contends, and it must be conceded the trial court held, that a co-owner who cashes United States Savings Bonds is entitled as a matter of law to take, keep, and retain all of such proceeds for his own use and purposes without regard to the rights of the other co-owner. We do not believe the Regulations, even though § 315.45 thereof provides "that upon payment to either co-owner, the other person shall cease to have any interest in the bonds," compel any such inequitable conclusion.
As recently as In re Estate of Cornelison, 178 Kan. 607, 290 P.2d 1016, we had occasion to deal with the force and effect to be given regulations governing the cashing of Government Bonds in connection with disposition of their proceeds. There, while dealing with the right to proceeds of like bonds registered in the name of a person, subsequently declared incompetent, P.O.D. to another person, we held:
"The regulations of the treasury department of the United States providing how bonds held by one person payable on death to another may be cashed are provided for the convenience of the government and the bond holder and do not determine how the property may go on the death of the first taker." (Syl. ¶ 3.)
And in the opinion, after approving the trial court's finding to the effect that on the conversion of the involved bonds into cash the government had no further interest in the matter and the regulations were not applicable, stated in no uncertain language that the involved government regulations were only for the purpose of facilitating and handling of matters between a bond owner and the department and did not purport to provide how matters in controversy *263 between persons interested in the disposition of such bonds were to be determined.
Since from the standpoint of the force and effect to be given the government regulations there is no room for distinguishing In re Estate of Cornelison, supra, and the case at bar, we believe that what is said and held in our decision in that case requires a negative answer to the primary question heretofore posed. For a few other cases, dealing with different facts and circumstances but nevertheless reaching a similar conclusion with respect to the same question, see e.g., Moore v. Brodrick, 123 F. Supp. 108, affirmed in 226 F.2d 105; District of Columbia v. Wilson, 216 F.2d 630; United States v. Stock Yards Bank of Louisville, 231 F.2d 628; Slater v. Culpepper, 222 La. 962, 64 So.2d 234; Rohn v. Kelley, 156 Neb. 463, 56 N.W.2d 711; Thibeault v. Thibeault, 147 Me. 213, 85 A.2d 177; Barrett v. Barrett, 91 F. Supp. 680.
See, also, Anderson v. Benson, 117 F. Supp. 765, 780, where the following statement, to which we subscribe, appears:
"Counsel for the defendants contend under the Treasury Regulations the form of registration of these bonds is conclusive of ownership, 31 C.F.R. (1949 Ed.) 315.2 et seq., and that this court cannot enter an order affecting either the ownership of the bonds or the proceeds received therefrom. If counsel's construction of the regulations were accepted without qualification United States Savings Bonds would become the impenetrable sanctuary of ill-gotten gains and an excellent instrumentality for the perpetration of deliberate fraud. That Congress did not intend, in exercising its constitutional power to borrow money, to effect such a result is too clear to require discussion. See Ibey v. Ibey, 1945, 93 N.H. 434, 43 A.2d 157." (p. 780.)
In leaving the point now under consideration we pause here to note that appellee cites but two cases in support of her position. One of these is our own case of Lemon v. Foulston, 169 Kan. 372, 219 P.2d 388, and the other is In re Laret's Will, 86 N.Y.S.2d 330. As stated in the Cornelison opinion the Lemon case is not in point unless it be to hold that had the appellee not cashed these bonds the proceeds would have gone to the appellant upon her death. We have some difficulty in seeing that the last cited case supports appellee's position. If it does we are unwilling to accept it as a controlling precedent.
Assuming, as we must, there was evidence to support all factual findings of the trial court (Addington v. Hall, 160 Kan. 268, 270, 160 P.2d 649) and mindful it is to be presumed that all the facts *264 the court deemed necessary to support its judgment were included in such findings (Bottenberg Implement Co. v. Sheffield, 171 Kan. 67, 229 P.2d 1004; Travis v. Glick, 150 Kan. 132, 91 P.2d 41), the conclusions of law herein involved are erroneous and cannot be upheld.
The only material question raised in the briefs and remaining for our consideration is whether in the face of the record presented this court should direct judgment. There is no doubt it has that power and obligation since the revision of the code of civil procedure in 1909 (See Laws of 1909, Chapter 182, Section 581, now G.S. 1949, 60-3317). Long ago in Devlin v. City of Pleasanton, 130 Kan. 766, 288 Pac. 595, recently cited, approved and applied in In re Estate of Fitzroy, 172 Kan. 339, 344, 240 P.2d 163, and Brungardt v. Smith, 178 Kan. 629, 638, 290 P.2d 1039, we held:
"Where the issues are clearly defined by the pleadings and plaintiff's petition states a cause of action and the evidence in support thereof is sufficient, and no meritorious defense thereto is suggested by the answer nor by defendant's evidence, the supreme court is authorized by the civil code to order the proper judgment to be directed." (Syl. ¶ 4.)
The record discloses that, except for her position regarding the force and effect to be given the government regulations, heretofore determined, appellee based her only claim of right (See paragraph 4 of the petition) to keep and use the proceeds of the bonds in question on an alleged understanding with Albert Byer which took place subsequent to the purchase and registration of such bonds in the names of appellant and appellee as co-owners. At that time the rights of the co-owners in the bonds and their proceeds had vested and Albert had neither the right nor the power to change the interest of the parties named therein unless, perhaps, it was with their joint consent and approval. It is not alleged or claimed that such consent or approval was ever obtained. Nor is it alleged or claimed that, prior to the issuance and the registration of the bonds, Albert Byer had any agreement with the parties that their interests therein were to be any different than that therein stated. In that situation the presumption in the court below, and the presumption here, is that as co-owners each of the parties was entitled to receive one-half of the proceeds realized from the bonds when they were cashed.
After careful consideration of the entire record and all arguments made by the parties we are convinced that what has been *265 here said and held makes it clear that nothing would be gained by granting the parties a new trial and that this is a case where this court is required to exercise the statutory power and obligation conferred upon it by G.S. 1949, 60-3317. Therefore the portion of the judgment relating to the rights of the parties in the proceeds of the ten involved co-ownership bonds is reversed with directions to render judgment in favor of appellant and against appellee for one-half of whatever amount the trial court finds the appellee received from the cashing of such bonds, together with interest at the legal rate from the date of its receipt; and, since it is clear from the terms of the one bond, registered in beneficiary form in the names of Mrs. Gladys Byer P.O.D. August R. Byer, that appellee had the right to cash such bond and retain its proceeds, the portion of the judgment relating to that bond is affirmed.
It is so ordered. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314856/ | 408 S.E.2d 588 (1991)
Clyde S. MORRIS
v.
COMMONWEALTH of Virginia, DEPARTMENT OF SOCIAL SERVICES, DIVISION OF SUPPORT ENFORCEMENT SERVICES, ex rel. COMPTROLLER OF VIRGINIA, ex rel. Daisy M. MORRIS.
Record No. 1937-90-2.
Court of Appeals of Virginia.
September 10, 1991.
*589 Ronald L. Morris (Berry & Early, Stanardsville, on briefs), for appellant.
Dwight D. Johnson (Div. of Child Support Enforcement, Charlottesville, on brief), for appellee.
Present: BARROW, BENTON and ELDER, JJ.
BARROW, Judge.
This appeal is from a review of an administrative agency decision by the Circuit Court of Greene County. It arises out of an assessment by the Virginia Department of Social Services (the "Department") against a father for past public assistance paid for the benefit of his child. Clyde Morris, appellant, contends that he was denied due process of law because he was not given notice that public assistance was being paid for the benefit of his child, that the trial court erred in concluding that the Commonwealth's claim was not barred by laches, and, finally, that the trial court erred in using the guidelines contained in Code § 20-108.2 to determine the amount he is required to reimburse the Commonwealth for public assistance paid prior to the adoption of these guidelines. We conclude that due process of law does not require that a responsible parent receive notice of the proposed payment of public assistance prior to its being paid so long as he receives notice and is given an opportunity to be heard before a final assessment is made against him. We further conclude that the doctrine of laches is unavailable to the appellant in this case since the doctrine may not be set up as a defense against the Commonwealth acting in its governmental capacity. However, we conclude that the trial court erred in using the guidelines contained in Code § 20-108.2 to determine the appellant's obligation for years occurring prior to the adoption of these guidelines.
*590 The appellant's child was born during the appellant's marriage to the child's mother. The appellant and the child's mother separated in 1972, and the appellant had no contact with either the child or his mother from 1972 through 1983.
The appellant was incarcerated in 1983, at which time the child's mother applied for Aid to Dependent Children ("ADC") and listed the appellant's address as the Joint Security Complex in Charlottesville, Virginia. The appellant was released from incarceration in November, 1986. However, it was not until September 5, 1989 that he received notice of a debt from the Department assessing him $8,008 as provided for in an administrative order as required by statute. See Code § 63.1-252.1. The order stated that the appellant was responsible for ADC paid on behalf of his child from March 1, 1983 to June 30, 1988. The appellant contested the order and was given an administrative hearing, which resulted in the debt being reduced to $4,160 by the Bureau of Child Support Enforcement. The Juvenile and Domestic Relations District Court dismissed the appellant's appeal of the decision, and the Circuit Court also dismissed his appeal and affirmed the order requiring him to pay this debt.[1]
In Virginia, any public assistance paid for the benefit of a dependant child creates a debt due and owing to the Department by the person who is responsible for support of that child. Code § 63.1-251. In the absence of a court order or divorce decree fixing the amount of child support due, the Commissioner of the Department may proceed against the responsible person "whose support debt has accrued or is accruing." Code § 63.1-252.1. The Commissioner is required to initiate such proceedings "by issuing notice containing the administrative support order which shall become effective unless timely contested." Id. The responsible parent has ten days to file an answer to the notice and, upon doing so, is given the right to an administrative hearing on the matter. Id.
Due Process of Law
In September, 1989, the appellant received an administrative order determining that a debt for ADC payments made for the benefit of his child had accrued between March, 1983 and June, 1988. The appellant argues that, since the debt became "due and owing" as soon as public assistance was paid, notice of the debt six and one-half years after it began accruing is insufficient notice. He contends that, to satisfy due process requirements, he should have been notified of his potential liability before the debt began accruing.
The constitutionality of the notice requirements of Code § 63.1-252.1 is a question of first impression in Virginia. Other states, however, have addressed due process challenges to similar statutory schemes.
In this case, the trial court relied on Mallatt v. Luihn, 206 Or. 678, 294 P.2d 871 (1956), in finding that the notice requirements of the Virginia statute satisfy due process. In Mallatt, the appellant was notified by the state in September, 1953, of her liability for public assistance payments made to her parents during the calendar year 1952. Id. at 685, 294 P.2d at 875. The appellant contended that "the enforcement of [her] liability in an action at law without a previous administrative hearing is a deprivation of property without due process of law." Id. at 692, 294 P.2d at 878. The Oregon Supreme Court disagreed, holding that since the statute requires notice of a hearing and an opportunity to be heard before liability becomes final, the procedure for recovering public assistance payments from responsible relatives complies with the requirement of due process. Id. at 696, 294 P.2d at 879.
The Commonwealth, in arguing the constitutionality of the Virginia scheme, cites State v. Dionne, 131 N.H. 630, 557 A.2d 653 (1989). In Dionne, the state sought to recover from the defendant AFDC payments made for the benefit of the defendant's child. Id. 557 A.2d at 654. The payments on the child's behalf began in *591 May, 1987, and the defendant was notified of his liability in November, 1987. Id. The trial court denied reimbursement for any amount paid prior to November, 1987. Id. The New Hampshire Supreme Court reversed, holding that "`notice is timely if it allows the defendant an opportunity to dispute his relationship to the recipient of the assistance, to contest the amount of debt, and to contest any claim for actual repayment before a reimbursement order is entered against him.'" Id. at 655 (quoting Clarke v. Clarke, 128 N.H. 550, 517 A.2d 816, 818 (1986)). This holding was based on the court's finding that no discretionary judgment is involved in a state's determination to make AFDC payment for "`the basic necessities of [a] child's survival'" "Id. (quoting Clarke, 517 A.2d at 818).
Two jurisdictions have reached an opposite result on this issue. In Gresham v. Department of Human Resources, 257 Ga. 747, 363 S.E.2d 544 (1988), the court held that the state was prohibited "from recovering public assistance payments made on [a] child's behalf prior to the defendant's first receiving notice of the department's intent to hold him liable." Id. at 748, 363 S.E.2d at 545. This rule applies "where the nonpaying parent's address is known or can be ascertained." Id. at 749, 363 S.E.2d at 546. The court stated two reasons for its holding: (1) "so that such parents may contest eligibility for AFDC payments or keep records of the support they in fact are providing," and (2) failure to provide notice of liability before it accrues "could render the state's right of recovery unconstitutional for lack of notice and due process." Id. See also Burns v. Swinney, 252 Ga. 461, 314 S.E.2d 440 (1984) (upon which Gresham relies).
Similarly, in Baker v. Department of Health & Rehabilitative Services, 526 So.2d 1057 (Fla.Dist.Ct.App.1988), where the state of Virginia initiated proceedings under URESA to recover from a Florida resident AFDC payments made for the benefit of her child who lived with her mother in Virginia, the court remanded the case for an evidentiary hearing to determine whether the appellant knew that the AFDC payments were being made. Id. at 1059. If, on remand, the trial court found that the appellant "had no knowledge of those payments, then no award requiring repayment of the AFDC payments made prior to the petition should be made." Id. The court noted that to require the appellant to repay the AFDC payments of which she had no knowledge presented "both due process and laches problems." Id. The court stated that notice of liability would have allowed the appellant to limit or avoid liability by seeking custody of the child, pursuing "her former husband to enforce his obligation," or obtaining "an adjudication of her inability to pay all, or part, of the amount." Id.
The reasoning of the Oregon and New Hampshire courts more accurately reflects the applicable law regarding notice under these circumstances. First, those holdings are consistent with the United States Supreme Court's position that the due process clause does not require pre-liability notice so long as a full hearing is held before liability becomes final. Second, like many areas of the law, pre-liability notice is not required by the common law doctrine of necessaries, which is analogous to the type of debt at issue in this case.
The due process clause as interpreted by the United States Supreme Court, does not require pre-liability notice. At a minimum, due process requires that an individual receive notice and an opportunity to be heard before he or she is deprived of life, liberty, or property by adjudication. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 653, 94 L.Ed. 865 (1950). Only before an individual is to be "deprived of any significant property interest" must that individual "be given an opportunity for a hearing." Boddie v. Connecticut, 401 U.S. 371, 379, 91 S.Ct. 780, 786, 28 L.Ed.2d 113 (1971) (emphasis added). In an administrative proceeding, the hearing need not be held at a preliminary stage in the proceeding "so long as the requisite hearing is held before the final administrative order becomes effective." Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 598, 70 S.Ct. 870, 872, 94 L.Ed. 1088 (1950).
*592 At common law, the father was held responsible for any "necessaries" provided to his spouse and child by a third party. H. Clark, The Law of Domestic Relations in the United States § 6.3 (2d ed. 1987). Although the doctrine of necessaries has been abolished in Virginia because it contains an unconstitutional gender-based classification, see Schilling v. Bedford County Memorial Hospital, 225 Va. 539, 544, 303 S.E.2d 905, 908 (1983), it nonetheless provides a useful analogy on the notice issue in this case. Under the necessaries doctrine, when a wife or child obtains necessary goods or services from a third party, the third party can hold the father directly liable for reimbursement of the cost of those goods or services. H. Clark, supra, at § 6.3. For the doctrine to apply and liability to attach, consent of the father for the dependant to obtain necessaries is not required. Id. The doctrine does not contemplate prior notice that necessaries will be or are being provided to the dependant in order for the third party to later recover from the father. Instead, the father's basic obligation of support gives rise to the debt, and the failure of the father to take action which would prevent the need of support from arising does not form the basis for requiring notice. Under the necessaries doctrine, due process has never been held to require a person to have notice in order to carry out his basic parental responsibilities before being liable when someone else assumes those responsibilities.
Under Code § 63.1-252.1, a person responsible for the support of a child is assured notice and an opportunity to be heard prior to a final adjudication of any indebtedness. At the hearing, a responsible party may contest liability for the debt and the amount of the debt. To require pre-liability notice would unduly burden the Commonwealth since locating the parent may often prove difficult in these type of cases. However, even without considering the Commonwealth's burden in locating an absent parent, we would not require pre-liability notice for the simple reason that a parent's knowledge that he or she has a child is notice enough of the responsibility to provide basic necessities for that child. Therefore, we hold that Code § 63.1-252.1 satisfies the constitutional requirements of due process by providing a responsible party with notice and an opportunity to be heard before the judgment is final.
To the extent that the appellant's complaint focuses on a lack of notice within a reasonable time after his liability began to accrue, his real concern is with the lack of a statute of limitations and the refusal of the court to apply the doctrine of laches. The General Assembly removed the six year statute of limitations on collection of ADC debts from Code § 63.1-270 in 1988, leaving that statute without a statute of limitations. 1988 Va. Acts. c. 906. We may not substitute our judgment for that of the legislature, especially since the appellant makes no claim that due process of law requires a statute of limitations in this case. We do, however, address the issue of laches raised by the appellant.
Laches
The appellant claims that the trial court erred in ruling that the Commonwealth's claim is not barred by the doctrine of laches.[2] We need not address the facts upon which the trial court relied in finding that laches did not bar the Commonwealth's claim because "laches may not be set up as a defense against the Commonwealth acting in its governmental capacity." In re: Dept. of Corrections, 222 Va. 454, 465, 281 S.E.2d 857, 863 (1981). Hence, we conclude that the doctrine of *593 laches is unavailable to the appellant as a defense in this case.
Child Support Guidelines
The appellant contends that the trial court erred in affirming the amount of the debt because the hearing officer used the child support guidelines of Code § 20-108.2 to determine a debt which accrued prior to the adoption of these guidelines.
We agree. The appellant's debt accrued from March, 1983 to June, 1988. The child support guidelines were first enacted in April, 1988. 1988 Va. Acts c. 907. For most of the time the appellant's debt was accruing, the guidelines were not in effect. We conclude that the retroactive application of the guidelines to determine the appellant's debt was error. Instead, in determining the appellant's debt, the trial court should have determined the amount the appellant was required to pay based on relevant factors found in Code § 20-108.2, the child support statute. This determination should be made based on factors existing at the time the assistance was being paid. Code § 63.1-251 required that the debt be "in an amount determined to be consistent with a responsible person's ability to pay." We hold that this statute refers to ability to pay at and during the time public assistance is being paid for the benefit of the child. In doing so, the agency may consider as a guide any administrative child support guidelines used by the Department which were in effect at the time the debt was accruing.
In sum, we affirm the trial court's finding that notice of the appellant's debt was constitutionally sufficient and did not violate the appellant's due process rights. We further conclude that the doctrine of laches is not available to the appellant as a defense in this case. However, we find that the trial court erred in applying retroactively the child support guidelines of Code § 20-108.2 in determining the appellant's debt.
Accordingly, we reverse the decision of the trial court as to the amount of the appellant's debt and remand this cause for a redetermination of that amount in a manner consistent with this opinion.
Affirmed in part, reversed in part, and remanded.
BENTON, Judge, dissenting.
The Fifth and Fourteenth Amendments to the United States Constitution guarantee that the government may not deprive a person of property without due process of law. Article I, § 11 of the Constitution of Virginia provides the same guarantee. At a minimum, the due process clauses require that any deprivation of life, liberty or property by the government "be preceded by notice ... appropriate to the nature of the case." Mullane v. Central Hanover Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 656-57, 94 L.Ed. 865 (1950). Even though there may be many areas of the law where notice is given only after a debt or liability has accrued, a constitutional limitation on government often "requires greater precautions in its proceedings than the business world accepts for its own purposes." Mullane, 339 U.S. at 319, 70 S.Ct. at 660. The doctrine of necessaries, notwithstanding, the government is constrained by the due process clauses of the constitutions.
The pertinent facts as found in the trial judge's opinion letter are as follows:
Clyde Morris married Daisy Morris prior to 1970. In 1970 a child was born, Stanley, and the parties thereafter separated in 1972. At the time of separation the parties were living in a trailer beside his father and mother-in-law in Madison County. Mr. Morris was ready to move the trailer to another location when his wife left and moved in with her parents next door. He claims that when he tried to speak to her an altercation arose and he got charged with assault and battery. This was the event of the separation and thereafter he tried to pay her support by offering her cash money for herself and the child and she refused to take it. He claims she said she did not want any support. Further, Mr. Morris testified that his mother and father tried to help her, which she refused and that he also had a place set up to for them to move *594 but she refused that assistance as well. Mr. Morris had no contact with his wife or child from 1972 until 1983. In March of 1983 he was incarcerated in the state penitentiary system where he stayed until he was released in November of 1986.
At or about the time he was incarcerated Mrs. Morris made application for Aid to Dependent Children and listed Mr. Morris' address as the Joint Security Complex. Later, she notified the Department that he was incarcerated and would be getting out in June of 1986. After his release he lived in Stanardsville and was never contacted by the Department of Social Services about paying child support of his child or reimbursing the state for public assistance paid for his child. The first notice he received was an administrative order entered by the Bureau of Support dated September 5, 1989. He responded to the administrative order and noted his appeal. The Bureau of Support originally wanted him to pay back $8,000.00, but later reduced it to $4,160.00. In June of 1988 the son turned 18 so this sum is the fixed amount in dispute.
The dispute in this case concerns what process is due a parent at the time the government makes a "payment of public assistance ... for the benefit of any dependent child ... [and thereby] creates a debt due and owing to the [government] by the person ... who [is] responsible for the support of such child." Code § 63.1-251. I do not agree that Morris has not proved a due process violation. The act of paying public assistance to Morris' wife for the benefit of their child created a debt that was due and owed by Morris and, thus, affected a deprivation of his property interests. The precise issue here is the constitutional adequacy of a statutory procedure that allows notice of the debt first to be given six years after payments were commenced, even though Morris' exact location was known when payments commenced and during the entire six years. At a minimum, Morris was entitled to notice at the time payment of assistance commenced, which was the statutory determination that a debt was due and owing, and certainly, in any event, Morris was due notice prior to the passage of six years.
"[C]onsideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise nature of the government function involved as well as of the private interest that has been affected by the governmental action." Cafeteria & Restaurant Workers Union, Local 473 v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 1748-49, 6 L.Ed.2d 1230 (1961). It is undisputed that the government has an interest in "promot[ing] the efficient and accurate [provision] of support for financially dependent children." Code § 63.1-249. However, the government has no interest in supplanting the role of the parent as the primary source of child support. No governmental function or interest is promoted by delaying notice to a parent whose location is known when the payment of assistance is made to a dependent child. The statutory purpose is promoted by prompt notification. See Logan v. Zimmerman Brush Co., 455 U.S. 422, 434-35, 102 S.Ct. 1148, 1157, 71 L.Ed.2d 265 (1982). Moreover, the government has not shown that it will be burdened or that the process of ensuring prompt assistance to needy dependents will suffer if notice is sent to the responsible parent at that parent's last known address. Indeed, the application for assistance requests the address for the responsible parent.
The child's mother and the governmental agency have always known where Morris was located. When the mother applied for assistance she gave his precise location, and she later gave his new location after he was transferred. It is a fundamental and long standing constitutional principle that "when notice is a person's due, process which is a mere gesture is not due process." Mullane, 339 U.S. at 315, 70 S.Ct. at 657. Waiting six years until the child reached his majority, the government's notice to Morris was a mere gesture and not a notice designed to allow the protection of his rights or the promotion of public policy. The right to be heard is meaningless unless the person entitled to notice receives it at a *595 time when his or her rights can be effectively exercised. I would hold that the State may not, consistent with the obligations imposed on it by the Due Process Clauses of the state or federal constitutions, delay for six years giving notice to a parent, whose location is known, that it seeks to obtain reimbursement for public assistance payments.
As a consequence of delaying the notice, the government not only deprived Morris of a reasonable opportunity to avail himself of other remedies, but also delayed the administrative hearing to a time when the issues that needed to be adjudicated were not seasonal.
What the constitution does require is "an opportunity ... granted at a meaningful time and in a meaningful manner," "for [a] hearing appropriate to the nature of the case...." In short," within the limits of practicability," a State must afford to all individuals a meaningful opportunity to be heard if it is to fulfill the promise of the Due Process Clause.
Boddie v. Connecticut, 401 U.S. 371, 378-79, 91 S.Ct. 780, 786-87, 28 L.Ed.2d 113 (1971) (citations omitted). Morris' right not to be deprived of property without due process entitled him to an administrative hearing with respect to the assessed debt within a reasonable time after the governmental agency made the assessment. A delay of six years is not within the realm of reason.
We also discern little or no state interest, and the State has suggested none, in an appreciable delay in going forward with [the administrative] hearing. On the contrary, it would seem as much in the State's interest as [the responsible parent] to have an early and reliable determination with respect to the [issues].
Barry v. Barchi, 443 U.S. 55, 66, 99 S.Ct. 2642, 2650, 61 L.Ed.2d 365 (1979).
If the government had sent Morris within a reasonable time notice of the payment of assistance to his child, Morris had available to him the option of seeking a court order with respect to his support obligations. See Code § 63.1-251. At that time, Morris could have proved that the child's mother refused support payments that he offered, that the child's mother refused assistance for the child from Morris' parents, and that the child's mother rejected Morris' offer to provide a residence for her and the child. The effect of delaying notice and a hearing for six years, which occurred after the child's majority, deprived Morris of the opportunity to minimize his property loss through in-kind payments, including the use of the residence. Moreover, he was deprived of an opportunity to prove that the mother was not eligible for the governmental assistance or some part of it.
Although in State v. Dionne, 131 N.H. 630, 557 A.2d 653 (1989), the court concluded that no interest was served in giving notice and a hearing to a parent to contest the need for support prior to the time the state sought reimbursement from the parent, no appreciable delay occurred in that case between that payment and the notice. Id. 557 A.2d at 655. The court's emphasis on the doctrine of necessities rather than the notice requirement of the due process clause can be explained by the parent's failure to establish that the passage of six months represented a denial of an "opportunity to be heard `at a meaningful time.'" Matthews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 902, 47 L.Ed.2d 18 (1976).
The Virginia statute in question in this appeal is constitutionally infirm precisely because it does not ensure either timely notice of the debt that is due or a timely hearing after the administrative determination that a debt is due and owing. The statute contains no parameters and, thus, leaves the responsible parent subject to unlimited liability and passage of time before notice and hearing are given. "[T]he provision for an administrative hearing, neither on its face nor as applied in this case, assured a prompt proceeding and prompt disposition of the outstanding issues...." Barchi, 443 U.S. at 66, 99 S.Ct. at 2650. "[T]he State owes to each individual that process which, in light of the values of a free society, can be characterized as due." Boddie, 401 U.S. at 380, 91 S.Ct. at 787.
*596 I believe that the holdings in Gresham v. Department of Human Resources, 257 Ga. 747, 363 S.E.2d 544 (1988) and Baker v. Department of Health and Rehabilitative Services of Virginia, 526 So.2d 1057 (Fla.App.1988) are consistent with the requirements of due process and represent valid public policy considerations. As the Gresham court stated:
"[W]here parents are divorced and custody is awarded to one parent, where the parent not having custody has not been ordered by any court to pay child support, and where the nonpaying parent's address is known or can be ascertained, the state ... must notify the parent of the duty of support and of the application for AFDC payments before such parent becomes obligated to reimburse the state for such payments. [First,] we do so ... to protect parents not otherwise subject to a court order or agreement as to child support, so that such parents may contest eligibility for AFDC payments or keep records of the support they in fact are providing. A parent should not be liable to the state for AFDC payments made, without notice to the parent, to ineligible recipients or when the parent is in fact paying for the support of a child. Second, we do so because the failure to provide for notice and an opportunity to be heard could render the state's right to recovery unconstitutional for lack of notice and due process."
Id. 257 Ga. at 749-50, 363 S.E.2d at 546 (quoting Burns v. Swinney, 252 Ga. 461, 464, 314 S.E.2d 440, 443 (1984)).
Given reasonable notice of assistance, Morris could have contested the mother's eligibility to receive payments or could have sought a change in the child's custody status. He also could have obtained an adjudication of his inability to pay all or part of the support or to pay support in-kind by furnishing a residence to his family. Where, as here, Morris' support obligation has not been determined by court order, the governmental delay in sending notice after six years had passed deprived Morris of the opportunity to obtain an adjudication of his obligation on the then current circumstances and allowed Morris to be subjected to an almost unlimited liability without notice to him.
For these reasons, I believe that the failure to provide notice and a hearing until the lapse of six years after the debt was created constitutes a due process violation. Accordingly, I dissent and would reverse the judgment for this reason.
NOTES
[1] Proceedings in Juvenile and Domestic Relations Court and Circuit Court in this type of case are de novo. See Code §§ 63.1-268.1 and 16.1-296.
[2] The Commonwealth argues that the appellant failed to properly preserve this issue and the issue concerning the child support guidelines for appellate review because his objections lack the specificity required by Rule 5A:18. However, since the trial court specifically addressed and ruled on these issues in its letter opinion, we conclude that the purpose of the contemporaneous objection ruleto give the trial judge the opportunity to understand the precise question he or she is called on to decideis satisfied. See Simmons v. Commonwealth, 6 Va.App. 445, 450, 371 S.E.2d 7, 10 (1988), rev'd on other grounds, 238 Va. 200, 380 S.E.2d 656 (1989). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314863/ | 280 S.E.2d 281 (1981)
Douglas G. PURNELL
v.
Evelyn Louise PURNELL
No. 15103.
Supreme Court of Appeals of West Virginia.
July 17, 1981.
*282 Gilbert Wilkes, III, Martinsburg, for appellant.
Rice, Hannis & Douglas and Charles F. Printz, Jr., Martinsburg, for appellee.
PER CURIAM:
This is an appeal by Evelyn Louise Purnell from a divorce decree entered by the Circuit Court of Berkeley County on October 2, 1979. That decree awarded the appellant $40.00 per week alimony. The appellant contends that the amount of alimony awarded and the property settlement made by the court were inadequate and inequitable. We conclude that the facts contained in the record suggest that the alimony and property arrangement were inequitable, and we remand for further development of the record and decision of the case in accordance with our holding in Patterson v. Patterson, W.Va., 277 S.E.2d 709 (1981).
The parties to this proceeding were married in Maryland in 1954. In 1963 they purchased a dwelling house located in Martinsburg, West Virginia, which was originally titled in both their names as joint tenants with the right of survivorship. However, in 1974, because she feared that creditors' suits against her son would affect her interest in the property, the appellant transferred her interest to the appellee.
In 1977, the appellee, after moving out of the dwelling house, sued the appellant for divorce. In the course of the divorce proceedings she moved for the exclusive use and possession of the house. She made this motion in spite of the fact that the parties' children had been emancipated.
By its order dated October 2, 1979, the circuit court granted the parties a divorce on the ground that they had lived separate and apart for one year. The court's order also directed the appellee to pay the appellant $40.00 per week alimony and that he compensate her for her inchoate right of dower in the former marital domicile.
In the course of the divorce proceedings the appellant testified that she was forty-seven years of age and that she had suffered from, and been treated for, Weber-Christian disease for two years. She indicated that as a result of the disease nodules formed under the skin of her thighs and legs she was unable to work. She indicated that her income consisted of $61.00 per month in food stamps, $20.00 per week from her eldest son for room and board, $35.00 per week baby sitting, and additional money from her son for medicine. She estimated that her total expenses, if she had to leave the marital domicile, would be $870.00 per month (including a projected rent of $200.00 per month).
The appellee testified that he had been unaware of the appellant's medical condition, that she had been employed at several jobs in the course of their marriage, and that he had no reason to believe that she was unable to work. He indicated that his net monthly take-home pay was $732.40. A *283 recent bi-weekly wage statement showed a savings deduction from gross pay of $100.00 which he testified was for a truck payment and a Christmas Club account. He stated that his monthly expenditures averaged $679.75 which included the joint deed of trust payment on the marital domicile and insurance payments and taxes on the house which totalled approximately $130.00 per month.
In this proceeding the appellant asserts that the trial court erred in failing to award her an interest in the marital domicile and that the court abused its discretion in awarding her only $40.00 per week alimony.
After the entry of the trial court's final order in the case before us, we rendered our decision in Patterson v. Patterson, supra. In Patterson we concluded that a sequence of equitable circumstances may dictate that a trial court impress real estate legally titled in the name of one spouse with a constructive trust for the benefit of the other. We stated, however, that:
"Before a trial court may properly impress a constructive trust on property titled in the name of one spouse for the benefit of the other, the spouse seeking the trust must by a preponderance of the evidence: (1) overcome the presumption that there was a gift between the parties, and (2) show that he or she is otherwise entitled to the declaration of a constructive trust. Entitlement to a constructive trust requires: (a) a showing that the party transferred to his or her spouse money, property, or services which were actually used to procure property titled in the other spouse's name only; (b) that the transfer was induced by (i) fraud, (ii) duress, (iii) undue influence, (iv) mistake, (v) breach of implicit fiduciary duty, or (vi) that in light of the dissolution of the marriage the other spouse would be unjustly enriched by the transfer." Syl. pt. 4, Patterson v. Patterson, W.Va., 277 S.E.2d 709 (1981).
In examining the record of the case before us, we note that prior to 1974 the appellant owned a one-half undivided interest in the marital domicile. In 1974, apparently under the mistaken belief that her interest in the property would be subjected to the claims of her son's creditors, she transferred her interest to the appellee. Thereafter, the property was titled in his name alone. These circumstances suggest that in light of Patterson, the appellant may be entitled to have the trial court impress a one-half interest in the former marital domicile with a constructive trust for her benefit.
W.Va.Code, 48-2-16 [1933] requires that a court consider the financial needs of the parties, their incomes and income earning abilities, and their estates and the income produced by their estates in setting the amount of alimony. Zinn v. Zinn, W.Va., 260 S.E.2d 844 (1979). We are of the view that on the present record the alimony awarded the appellant is inadequate. However, the more critical issue is whether the appellant is entitled to have a one-half interest in her former marital domicile. The outcome of this issue will affect the adequacy of alimony awarded.
We cannot state from the record that the appellant is entitled to the impressment of a constructive trust, although the facts suggest that the equities involved might require such an action by the trial court. Since we conclude that a decision on that point is necessary for a resolution of the issue involving the adequacy of the alimony, we conclude that this case should be remanded to the circuit court of Berkeley County for development of the record on the circumstances surrounding transfer of title to the marital domicile to the appellee, for determination of whether the appellant is entitled to a constructive trust in a one-half interest in the premises, and for reconsideration of the appellant's entitlement to alimony in light of the court's decision on the constructive trust.
Accordingly, the judgment of the Circuit Court of Berkeley County is reversed and this case is remanded.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314836/ | 276 S.C. 454 (1981)
280 S.E.2d 52
Nancy SMITH, Appellant,
v.
UNION BLEACHERY/CONE MILLS and Liberty Mutual Insurance Company, Respondents.
21493.
Supreme Court of South Carolina.
June 17, 1981.
*455 Don R. Moorhead, of Law Offices of John Bolt Culbertson, Greenville, for appellant.
J. Wright Horton, of Horton, Drawdy, Hagins, Ward & Blakely, Greenville, for respondents.
June 17, 1981.
GREGORY, Justice:
This appeal arises from the denial of Workmen's Compensation benefits for injuries arising from participation on a company sponsored softball team. We affirm.
The appellant employee injured her left leg while participating in a softball game after working hours.
The single commissioner denied compensation, but the full Industrial Commission, in a 3-2 decision, reversed and awarded the appellant compensation. The circuit judge then reversed the award of the full commission and dismissed the claim.
The question is whether the softball injury arose out of and in the course of appellant's employment within the meaning of Section 42-1-160, Code of Laws of South Carolina (1976).
*456 The burden is on the claimant to prove such facts as will render the injury compensable within the provisions of the State Workmen's Compensation Law. Ellis v. Spartan Mills, et al., 277 S.E. (2d) 304 (1981); Riley v. South Carolina State Ports Authority, 253 S.C. 621, 172 S.E. (2d) 657 (1970).
We have recently recognized that the decisions of the Industrial Commission will be set aside only if unsupported by substantial evidence. Ellis v. Spartan Mills, supra; Lark v. Bi-Lo, Inc., S.C. 276 S.E. (2d) 304 (1981).
However, where the evidence is not in dispute, the question of whether or not the employee sustained an injury arising out of and in the course of his employment becomes a question of law for the court. Douglas v. Spartan Mills, 245 S.C. 265, 140 S.E. (2d) 173 (1967). This principle remains unchanged by the Administrative Procedures Act, Section 1-23-10 et seq., Code of Laws of South Carolina (Cum. Supp. 1980). Section 1-23-380 [Subsection g] of the Act provides this Court may reverse or modify the decision "if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions or decisions are ... [Sub-subsection (4)] affected by other error of law."
Here, the facts are undisputed.
The team was organized when appellant's co-employees on their own initiative approached management of respondent about sponsorship of the women's softball team.
Respondent agreed to permit organization of the team, furnish the uniforms and some equipment and pay the league's entrance fee. Because of his knowledge of recreational programs, respondent's personnel manager agreed to assist the employees in finding a league in which the team could participate. Respondent did not require the team to join a particular league.
*457 The manager first approached the city league, which had no openings for additional teams.
The team ultimately joined a league, sponsored by the Greenville County Department of Recreation. The league required that the uniforms contain the name of the employer and that only employees play on the team.
When the team could find no suitable place to practice, they were permitted to use a field on property owned by respondent. However, the game at which appellant was injured was selected by the players, received no compensation or benefits for her efforts.
The players were not required to participate nor were they rewarded for doing so. They provided their own transportion to and from practice and the games. The coach, who was selected by the players, received no compensation or benefits for her efforts.
In denying the compensation and dismissing the claim the trial judge applied the principles of Pate v. Plymouth Mfg. Co., 198 S.C. 159, 17 S.E. (2d) 146 (1941). There, the court found an injury to a textile worker, who was returning from a softball game, was not "out of and in the course of employment" and, hence, was not compensable.
The court found participation on the softball team to be recreational activity primarily for the benefit of the employees and unrelated to their jobs.
The facts here, with minor exceptions, are nearly identical to those of Pate. Appellant's efforts to circumvent Pate, which she must for the injury to be compensable, are unpersuasive. Appellant had initially sought permission under Rule 8, Section 10 of the Rules of Practice of this Court to argue against the holding of Pate, but permission was denied.
Here, respondent did allow organizational meetings on company time. However, the company in Pate conferred *458 a similar benefit by permitting players to use the telephone in the mill office to schedule games.
Respondent here provided a practice field at the request of the employees. In Pate, the company similarly benefited the employees by occasionally allowing them to use a superintendent's automobile for transportation to the games.
Non-employees were allowed to play on the team in Pate, However, in this case, the league rules, not the policy of respondent, prohibited the participation of non-employees.
Finally, in this case, while respondent did allow recruiting posters to be posted on company property, such was done at the request of the employees.
We quote from the order of the trial judge adopted as part of the Pate opinion, "... it is impossible for me to see where the corporation had any connection with the ball club, other than from a charitable or benevolent standpoint to promote the social life of its workers," Id., at 163, 17 S.E. (2d) 146.
We agree Pate, which the full commission never addressed in its award, controls. The commission's failure to apply its principles to this significantly similar factual situation is an error of law.
Therefore, we hold the injury was sustained as part of a recreational activity and not out of and in the course of employment. We affirm the order of the trial judge denying compensation and dismissing the claim.
Affirmed.
LITTLEJOHN and HARWELL, JJ., concur.
LEWIS, C.J., and NESS, J., dissent.
NESS, Justice (dissenting):
I respectfully dissent, concluding the majority erred in affirming the denial of workmen's compensation benefits to *459 appellant for injuries she sustained while participating on a company sponsored softball team.
The essential facts are not in dispute. Appellant was injured while playing softball for a company team after work hours in a public park. Respondents, Union Bleachery/ Cone Mills contributed to the company's softball team as follows: (1) permitted organizational meetings on company time and recruiting posters on company property; (2) required the team to play in a recognized industrial league which prohibited the participation of non-employees; (3) provided entry fees, equipment and uniforms bearing the company name; and (4) renovated a former softball field for team practices on company land. Appellant does not allege the company paid, recruited, or required employees to play, nor does she contend that actual play or practice took place during working hours.
The majority, in denying benefits, erroneously relies on Pate v. Plymouth Manufacturing Company, et al., 198 S.C. 159, 17 S.E. (2d) 146 (1941), in which this Court affirmed, the denial of benefits under the Act for injuries sustained, by an employee while returning from a baseball game in which he had participated, because they did not "arise out of and in the course of his employment."
While there are similarities between this case and Pate, they are distinguishable regarding the critical factor of employer involvement. In Pate, the company participated only as a financial sponsor. Here, in addition to financial support, respondents allowed organizational meetings on company time, allowed recruiting posters on company property, renovated a practice field on company land and required the team to join the county league which prohibited the participation of non-employees.
In Wilson v. General Motors Corp., et al., 98 N.Y. 468, 84 N.E. (2d) 781 (1949) the court of appeals reversed an award of benefits under the Act because the sole involvement *460 of the employer was that it furnished playing equipment and allowed conference as to game details on company time.
Professor Larson, in discussing the Wilson case, stated:
"The facts supporting work-connection have been reduced in this case (Wilson) almost to the minimum that might law (sic) the basis for a claim; and that minimum has just failed to make the grade. One feels that a slight strengthening of the facts could easily have changed the narrow margin of defeat into one of success while a slight weakening of the facts would have left almost nothing on which to found a claim at all." Vol. 1A, Larson's Workmen's Compensation Law, § 22.24, p. 5-112.
In Complitano v. Steel & Alloy Tank Co., 34 N.J. 300, 168 A. (2d) 809 (1961), the New Jersey Supreme Court reversed the denial of benefits for the reasons set forth in Judge Conford's dissent in Complitano v. Steel & Alloy Tank Co., 63 N.J. Super. 444, 164 A. (2d) 792 (1960). Judge Conford, using the rationale of Professor Larson, quoted above, distinguished Wilson and held the employee should be compensated for an injury sustained in a softball game after working hours in a city sponsored league on his company's team. The company's involvement in Complitano consisted of financial support amounting to $300 (for league entry fee, uniforms inscribed with the company name and equipment). In addition the league's standings were printed in the local newspaper, the public attended the games and at the end of the season the company team upon winning the championship was rewarded by the employer with trophies and tickets to the World Series. The company's financial expenditure was approximately $300 as opposed to a weekly payroll of $20,000, and only a small percentage of the employees participated in the recreational activity. Judge Conford found the facts in Complitano to be stronger than those in Wilson thereby dictating a finding of compensability.
*461 Here, the rationale of Professor Larson as utilized by Judge Conford and adopted by the New Jersey Supreme Court in Complitano controls the disposition of the issue raised herein. The involvement of respondents, both financial and non-financial, was greater than in Wilson or Pate and the injury to appellant was compensable under the Act as arising out of and in the course of employment. I would reverse the order of the circuit court and reinstate the award of benefits under the Workmen's Compensation Act to appellant, Nancy Smith.
Reversed.
LEWIS, C.J., concurs in result of dissent only. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314870/ | 247 Ga. 785 (1981)
280 S.E.2d 734
DOUGLAS COUNTY RESOURCES, INC.
v.
DANIEL et al. DOUGLAS COUNTY RESOURCES, INC.
v.
YARBROUGH et al.
37531, 37532.
Supreme Court of Georgia.
Decided July 7, 1981.
Clifton & Helms, Marshall L. Helms, for appellant.
Jonathan Zimring, amicus curiae.
Hartley, Rowe & Fowler, Joseph H. Fowler, for appellees.
JORDAN, Chief Justice.
The appellant is a Georgia nonprofit corporation sponsored by the Douglas County Retardation Association for the purpose of developing community living environments for retarded citizens.
The appellant obtained a loan from the U. S. Department of Housing and Urban Development to acquire property and construct *786 two homes in single family zoned areas of the county, after assurances from the Planning and Zoning Director and Board of Commissioners that group family residences for retarded citizens were permitted under this zoning classification. It was contemplated that each home would have four functional adult retarded citizens, along with a married couple as surrogate parents, and that the residents would have employment and contribute a part of their wages for operation of the homes. After the construction of the houses was started the plaintiff-appellees brought this action to enjoin the use of the houses alleging a violation of the zoning ordinance and that such a use would cause a diminution in value of their property. The trial court enjoined the intended use and defendants appeal. We reverse.
1. Enumerations of error 1 and 2 contend the trial court erred in enjoining the use of the property until such time as the zoning has been changed.
The ordinance defined family as: "One or more persons occupying a dwelling unit and living as a single, nonprofit housekeeping unit." There is no requirement in the ordinance that the parties occupying a housekeeping unit be related and the testimony of the Director of the Zoning and Planning Commission was that it could be someone keeping foster children or three or four different people living together as a unit.
The evidence was that the residents will keep house, prepare their meals, do yard work, shop for groceries and clothes and own an automobile. It was also shown that the residents would contribute a percentage of their earnings toward the expense of operating the home and could eventually own the home.
"Provisions establishing residential districts or areas are to be reasonably construed in the light of the language used, the purpose served, and the facts and circumstances of the case." 101 CJS 910, Zoning, § 149.
Under the R-2 Zoning classification, very liberal use is permitted, including home occupations, public or quasi-public playgrounds, the keeping of domestic animals and use as a foster home. To enjoin the use of the homes here because the intended occupants are retarded would discriminate against one group for reasons not established by the evidence.
Under the facts in the present case the Zoning and Planning Commission properly determined that the intended use was within the zoning classification and the trial court erred in enjoining its use. See Oliver v. Zoning Comm. of Chester, 326 A2d 841 (Conn., 1974) and Hessling v. City of Broomfield, 563 P2d 12 (Col., 1977).
2. The remaining enumerations of error need not be dealt with in view of the ruling in Division 1.
*787 Judgment reversed. All the Justices concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314869/ | 200 Ga. App. 478 (1991)
408 S.E.2d 493
CASTELLON
v.
THE STATE.
A91A0296.
Court of Appeals of Georgia.
Decided July 15, 1991.
Mark V. Cloud, for appellant.
Lewis R. Slaton, District Attorney, Joseph J. Drolet, Samuel W. Lengen, Richard E. Hicks, Assistant District Attorneys, for appellee.
CARLEY, Judge.
Appellant was tried before a jury and found guilty of possession of tools for the commission of a crime and seven counts of burglary. He appeals from the judgments of conviction and sentences entered by the trial court on the jury's guilty verdict.
1. The State tendered for admission into evidence several photographs of items that had been seized during a post-arrest search of appellant's home. At least one of the items in each of the photographs was identified as having been stolen in a burglary for which appellant was being tried. However, appellant objected to the admission of any *479 of the photographs, urging that they were inadmissible since all of the items therein had not been identified as having been stolen in a burglary for which he was being tried. The trial court's failure to sustain this objection to the admission of the photographs is enumerated as error.
"The fact that certain portions of a [photograph may have been] subject to objection will not prevent the [photograph] from being placed in evidence." Kansas City Life Ins. Co. v. Williams, 62 Ga. App. 707, 709 (9 SE2d 680) (1940). Upon the tender of demonstrative or documentary evidence, "`part of which is admissible and part inadmissible, and the objection is to the evidence as a whole, it is not error to admit it all.' [Cits.]" State Farm Mut. Auto. Ins. Co. v. Rogers, 105 Ga. App. 778, 781 (1) (125 SE2d 893) (1962). Accordingly, even assuming that certain items in the photographs may not have been shown to be directly relevant to appellant's instant prosecution, it was not error to fail to sustain the objection to the admission of the photographs in their entirety.
2. Appellant enumerates as error the trial court's giving of a charge on flight, urging that such a charge was not authorized by the evidence. In cases tried after January 10, 1991, "while the [S]tate may offer evidence of and argue flight, it shall be [reversible] error for a trial court in a criminal case to charge the jury on flight." Renner v. State, 260 Ga. 515, 518 (3b) (397 SE2d 683) (1990). However, the instant case was tried before that date. Accordingly, this enumeration of error must be addressed on the merits of appellant's contention that there was no evidentiary support for the giving of a charge on flight.
The evidence regarding the circumstances of appellant's arrest showed the following: Over a period of several weeks, a series of burglaries of ground-level apartments in the north Fulton County area had been committed during the late morning or early afternoon hours and a uniformed officer, who had been assigned to investigate, was patrolling on foot in an apartment complex wherein one of these burglaries had occurred. At approximately 11:20 a. m., the officer turned the corner of one of the apartment buildings and observed as appellant walked toward the door to a ground-level apartment at the other end of the building. When appellant was only several feet from the apartment door, the officer's radio "went off" and appellant's attention was first drawn to the presence of the officer. Appellant's immediate reaction was to turn away from the door to the apartment that had ostensibly been his destination and to start walking "extremely fast" in the opposite direction of the parking lot. The car that appellant entered matched the description of one for which the officer had been instructed to maintain a "lookout." Having been unable to confront appellant about his suspicious actions and vehicle before he *480 drove away, the officer followed in his patrol car. Appellant, with the officer following, then drove to the leasing office of the apartment complex, parked and went inside. The officer waited in his patrol car and radioed for assistance. Some minutes later, appellant exited the leasing office, got into his car and began to drive away. Before appellant could exit the apartment complex, however, another officer arrived and appellant was stopped. Appellant produced a driver's license showing that the did not live in the apartment complex and he told the officers that he still resided at the address shown on his license. Having determined that appellant did not live in the apartment complex, the officers then asked the purpose of his presence in the vicinity of the apartment building where he had originally been observed. Appellant made no direct response to this inquiry, but showed the officers a brochure that he had apparently obtained in the leasing office and stated that he was looking for an apartment to rent. When further inquiry was made about appellant's reason for originally being in the vicinity of a residential apartment building prior to his stop at the leasing office, he indicated that he did not understand the question and just pointed to the brochure. During this encounter, one of the officers observed, in plain sight on the passenger seat of appellant's vehicle, a bag and two large screwdrivers. The screwdrivers were of the type believed to have been used to commit the previous burglaries that were under investigation. Based upon their observations and appellant's evasive responses to their inquiries regarding his presence on the premises, the officers placed appellant under arrest for loitering or prowling in violation of OCGA § 16-11-36.
This evidence would authorize a finding that, upon being surprised by the sudden appearance of the uniformed officer, appellant chose to flee rather than to risk an immediate confrontation and, that upon being followed by the officer, he drove to the leasing office in an effort to establish an ostensibly reasonable explanation for his suspicious presence at the apartment complex. Accordingly, a charge on flight was not unauthorized. Carter v. State, 180 Ga. App. 269, 270 (2) (349 SE2d 19) (1986); Cain v. State, 178 Ga. App. 247, 249 (5) (342 SE2d 742) (1986).
3. Contrary to appellant's contentions, there was probable cause to arrest him for a violation of OCGA § 16-11-36. Hansen v. State, 168 Ga. App. 304, 306 (2) (308 SE2d 643) (1983). Accordingly, appellant's motion to suppress all subsequently seized evidence as the inadmissible product of his illegal arrest was correctly denied.
4. Appellant's enumeration of the general grounds is without merit. See Howard v. State, 186 Ga. App. 7 (366 SE2d 369) (1988); Green v. State, 158 Ga. App. 321 (1) (279 SE2d 763) (1981); Shearer v. State, 128 Ga. App. 809, 810 (3) (198 SE2d 369) (1973). The evidence, when construed most favorably for the State, was sufficient to *481 authorize a rational trior of fact to find proof of appellant's guilt beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307 (99 SC 2781, 61 LE2d 560) (1979).
Judgments affirmed. Banke, P. J., and Beasley, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314876/ | 158 Ga. App. 369 (1981)
280 S.E.2d 394
DEPARTMENT OF TRANSPORTATION
v.
BIRD et al.
61200.
Court of Appeals of Georgia.
Decided April 24, 1981.
Robert S. Reeves, Milton A. Carlton, for appellant.
Ogden Doremus, for appellees.
BIRDSONG, Judge.
Condemnation. The Department of Transportation ("DOT"), as condemnor, condemned .025 of an acre of land owned by Mr. and Mrs. Bird, condemnees, during the construction of I-16 running east from Macon to Savannah. The land lies in a rural setting near Metter. DOT valued the 1/40th of an acre at $140, and paid that amount into the court. The Birds were dissatisfied with that valuation and demanded a jury trial on the issue of valuation. The jury returned a *370 verdict of $3,600 in favor of the Birds which was made the judgment of the court. DOT appeals contending that there is no credible evidence to support such an amount. Held:
DOT called two land appraisers who testified that the fair market value in the area under consideration was approximately $500 per acre. One appraiser testified that in his opinion the reasonable value of the .025 acre was $165 and that there were no consequential damages to the remainder of the 22 acres owned by the Birds or to their residence, either because of water, noise, or air pollution. The other appraiser testified that in his opinion the value of the land taken was $175 but with no consequential damages.
In opposition, witnesses on behalf of the Birds testified as to the value of the home, the valuation of land, certain noise and air pollution, a drainage problem and that overall, the land in the vicinity of I-16, and the Bird's land in particular, had suffered an unquantified loss in market value. The witnesses for the Birds did not establish valuation by comparable sales but by construction costs. We are unable to find however anywhere in this transcript any overall dollar valuation placed upon the actual value of the Birds' land and home or any specific dollar value as to the diminished value of that estate caused by the water flow problem or the noise and air pollution. There was some evidence separately as to the value of the land but we are not informed as to the actual size of the acreage. Likewise we are given no accurate assessment of the value of the home. Lastly, there is no composite evidence of the market value of the property remaining before the construction and after so that a fair and reasonable determination of consequential damages could be computed by the jury and supported by the evidence. There was evidence that the water flow problem probably could be cured by applying approximately a $1,500 investment. But even accepting the highest estimate of the value of the land taken ($175) and the cost of repairs ($1,500), we are completely at a loss to determine how the jury arrived at its obviously included award of consequential damages. We cannot speculate whether the award was overly generous or stringently miserly for neither the jury nor this court are presented with any guidelines as to value.
Under these circumstances, we are bound by the rule that the question of damages cannot be left to speculation, conjecture and guesswork. Development Corp. of Ga. v. Berndt, 131 Ga. App. 277, 278 (205 SE2d 868). Where a party seeks additional damages he has the burden of proof of showing the amount of loss in a manner from which the jury or the trial judge in a non-jury case can calculate the amount of the loss with a reasonable degree of certainty. Hayes v. Flaum, 138 Ga. App. 787 (227 SE2d 512); Taylor v. Roberson, 127 Ga. *371 App. 24 (192 SE2d 384); Studebaker Corp. v. Nail, 82 Ga. App. 779 (62 SE2d 198). DOT met its burden. Having shown a prima facie case, the burden then fell upon the Birds to show that the department's proof of value was inadequate. This the Birds failed to do. We find as a matter of law that there is insufficient evidence in this transcript to support the award of $3,600 by the jury and the judgment entered thereon. Ga. Power Co. v. Sinclair, 122 Ga. App. 305 (176 SE2d 639); State Hwy. Dept. v. Weldon, 107 Ga. App. 98, 99 (1) (129 SE2d 396). See DOT v. Kirk, 138 Ga. App. 180, 181 (3) (225 SE2d 781).
Judgment reversed. Shulman, P. J., and Sognier, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314961/ | 47 Cal.2d 398 (1956)
HAZEL L. CROGAN, Respondent,
v.
BERT METZ et al., Appellants.
S. F. No. 19096.
Supreme Court of California. In Bank.
Nov. 30, 1956.
Byron Arnold, George I. Hoffman, Lansburgh, Hoffman, Arnold & Schiller and Lansburgh, Hoffman & Schiller for Appellants Bert Metz and Vivian Metz.
Theodore M. Monell for Appellant Letsinger.
Ralph Wertheimer for Respondent.
Chandler P. Ward, as Amicus Curiae on behalf of Respondent.
SHENK, J.
Separate appeals have been taken by the defendants from a judgment for the plaintiff in an action to recover secret profits in a real estate transaction.
The defendants Bert Metz and Dewey Letsinger and another real estate broker, William W. Mogan, shared office space in San Francisco but each carried on an independent real estate business. There is substantial evidence that, beginning in the early part of 1951, they engaged in the following activities.
The defendant Letsinger represented one Desiano who owned income property on Scott Street in San Francisco which he wished to sell for $165,000 net to himself, less a $5,000 bonus to Letsinger if he could arrange for the sale within a specified time. Letsinger's associate Mogan represented one Rinas who owned property on Bay Street which he wished to exchange for more valuable income property. Rinas had been unsuccessful in attempts to sell the property for $110,000 and even $100,000, and for purposes of exchange valued the property at $100,000. Accordingly Letsinger and Mogan attempted to arrange for an exchange of the Scott Street for the Bay Street property and $60,000 in cash but Desiano was not interested in acquiring additional property.
It became obvious that in order for Letsinger and Mogan to consummate negotiations on the terms required by their principals and to provide commissions for themselves it would be necessary for them to sell the Bay Street property at a price in excess of the $100,000 valuation placed on it by its owner, Rinas. Acting together they advertised it for $115,000. Desiano know nothing of these activities. Rinas knew of the *401 advertised price for his property but believed that no one would accept at that figure and that if a buyer was found that he, Rinas, would share in the increase over his named price.
Meanwhile the defendant Bert Metz learned of the pending transactions from his associates. He advised the plaintiff, a widow whom he had represented for a number of years, that he had an advantageous deal for her whereby she could acquire a valuable property in excellent condition for $115,000; that she could use property she owned on Fulton Street valued at $50,000 in partial payment on a trade, and that she probably could secure a loan upon the execution of a deed of trust on the Bay Street property for the difference. He assured the plaintiff that the owners were asking $115,000 and that they "wouldn't budge" from that price. She entered into an agreement with Metz wherein he was authorized to arrange for the exchange of her property according to the terms he suggested to her. No explanation was made to her by Metz that a multiparty transaction was involved, nor that a price of $15,000 over and above Rinas' demands had been set by the brokers so that they could recover their commissions from the fund which would be realized upon the consummation of all the transactions involved. The plaintiff agreed to execute a second deed of trust in favor of Metz in payment of his commission for services rendered to her.
The exchange of properties suggested by the plaintiff's offer of exchange would not, of course, supply the necessary funds to consummate the transaction contemplated. Accordingly, each of the three brokers participated in obtaining bids for the plaintiff's property and a purchaser, Mrs. Lukes, was found who was willing to pay $49,500 for it. On June 28, 1951, the transactions were closed by means of five grant deeds: The Scott Street property from Desiano to Rinas, the Bay Street property from Rinas to Desiano and from Desiano to the plaintiff, and the Fulton Street property from the plaintiff to Desiano and from Desiano to Lukes. In addition the following transfers of funds were made: Mrs. Lukes paid into escrow $49,500, the plaintiff paid $65,000, Rinas paid $60,000, and Desiano received $160,000 less minor costs and fees. Commissions paid through the title company to the three brokers totaled $11,984.50, including Letsinger's bonus. In addition to other commissions received by Metz the plaintiff executed her note to him, secured by a second deed of trust on *402 the Bay Street property, in the sum of $3,000, $2,500 of which represented commissions. Certain other costs and fees absorbed the balance of the fund placed in the brokers' hands.
Letsinger and Metz testified that the three brokers had acted "in concert" and "as a team" in negotiating the "three cornered deal," and that they had cooperated in showing and obtaining buyers for the property of Rinas and of the plaintiff. Each knew that the price the plaintiff paid for the Bay Street property had not been set by the owner, Rinas. The record shows that each of the brokers was fully aware of the nature of all transactions.
Shortly after the sale was consummated the plaintiff learned that Rinas had been asking only $100,000 for his property. She thereupon commenced this action for $15,000 and punitive damages against Metz, joining Letsinger, Mogan and Mrs. Vivian Metz as codefendants. The amended complaint alleges facts based on three different legal theories. Count I alleges fraud and the making of false representations to the plaintiff by the defendant Metz in his personal capacity and as agent of each of the other defendants, for the purpose of fraudulently inducing the plaintiff to purchase certain property at a price of $15,000 in excess of the owner's willingness to accept. Count II incorporates allegations of Count I as to the status of the parties and ownership of the properties involved, including an allegation that the defendant Metz acted for himself, as agent for the plaintiff, and as agent for each of the other defendants. It then alleges that Metz, in effecting the exchange of the properties involved "retained, and does now retain, monies, property and secret profits received by him for the use of and belonging to plaintiff herein in the sum of Fifteen Thousand ($15,000.00) Dollars, no part of which has been paid to plaintiff, and the same is now due, owing and unpaid." Count III incorporating all of the allegations of Count I, alleges that the three brokers conspired to defraud the plaintiff in the sum of $15,000. Punitive damages were prayed for as to Counts I and III. The action was tried by a court sitting without a jury. The defendant Mogan died prior to the trial and no further proceedings were taken as to his alleged part in the transaction.
The court made only two findings, namely: "I. The allegations set forth in plaintiff's amended complaint on file herein are True. II. The defendants and each of them conspired to obtain from plaintiff, and did assist each other in obtaining, by means of the fraudulent conduct more fully set forth in *403 the findings of fact herein and in violation of the fiduciary duty owed by defendant Bert Metz to plaintiff, the sum of $15,000." Judgment was entered against the defendants Bert Metz, Vivian Metz and Dewey Letsinger in the sum of $15,000, together with interest at the rate of 7 per cent from June 28, 1951, and in the sum of $2,500 as punitive damages in favor of the plaintiff against the defendants Letsinger and Bert Metz.
From its general finding that the allegations of the amended complaint are true, it is not readily ascertainable upon which of the theories pleaded the court based its judgment. [1] It is well established that a complaint may plead different theories on which relief is sought with legal propriety. (Faulkner v. California Toll Bridge Authority, 40 Cal.2d 317, 328 [253 P.2d 659]; Tanforan v. Tanforan, 173 Cal. 270, 273 [159 P. 709].) It is noted that here each of the counts is based upon the same allegations of fact and that there are no contradictory or antagonistic facts. (Cf. Faulkner v. California Toll Bridge Authority, supra, 40 Cal.2d 317, 328; Beatty v. Pacific States Sav. & Loan Co., 4 Cal.App.2d 692, 696 [41 P.2d 378].) [2] If the plaintiff makes no election or is not otherwise estopped (Steiner v. Rowley, 35 Cal.2d 713, 720 [221 P.2d 9]) the election as to which cause of action is sustained is, after the taking of all the evidence, a matter for the judge or the jury. (Tanforan v. Tanforan, supra, 173 Cal. 270, 274.) [3] Where an appeal is taken from such a judgment the reviewing court has the power to disregard particular theories and findings and to affirm the judgment on a theory which is supported by the finding and evidence in order that causes may be disposed of by a single appeal and without further proceedings in the trial court. (Wallace Ranch Water Co. v. Foothill Ditch Co., 5 Cal.2d 103, 118 [59 P.2d 929]; Baird v. Ocequeda, 8 Cal.2d 700, 703 [67 P.2d 1055]; cf. Block v. D. W. Nicholson Corp., 77 Cal.App.2d 739, 747 [176 P.2d 739].) The main issue on this appeal, therefore, is whether the findings and the judgment may be sustained by the pleadings and proof as to any of the causes of action stated.
It is plain that by its general finding that the allegations of the complaint were true the intent of the court was to find the material facts against the defendants and in favor of the plaintiff. [4] As usual in actions of this sort the evidence is conflicting. However, as so often stated, all intendments are in favor of the judgment and this court must accept as *404 true the evidence which tends to establish the correctness of the findings as made, taking into account as well all inferences which might reasonably have been drawn by the trial court. The test, of course, is not whether there is a substantial conflict in the evidence but whether there is substantial evidence in favor of the respondent. (Estate of Teel, 25 Cal.2d 520, 527 [154 P.2d 384]; Estate of Teed, 112 Cal.App.2d 638, 644 [247 P.2d 54]; Witkin, Procedure, p. 2250.)
It is claimed that the judgment must be reversed for the reason that there is no evidence as to the actual damages sustained by the plaintiff. Section 3343 of the Civil Code provides that one "defrauded in the purchase, sale or exchange of property is entitled to recover the difference between the actual value of that with which the defrauded person parted and the actual value of that which he received. ..." The trial court refused to permit either party to introduce evidence on questions of value and this refusal is claimed to constitute prejudicial error. (See Bagdasarian v. Gragnon, 31 Cal.2d 744, 763 [192 P.2d 935].) While it may be argued with some reason that an application of the Bagdasarian case would require a reversal of the judgment on the theory of recovery stated in Counts I and III, it is not necessary to decide that question as the judgment may be affirmed on the theory pleaded in Count II.
[5] Count II is in the nature of a common count for money had and received. By such a pleading the principal waives the tort of the agent and asserts a right to recover any secret profits made by him out of his agency. Her right to do this is well recognized. (Philpott v. Superior Court, 1 Cal.2d 512, 518 et seq. [36 P.2d 635, 95 A.L.R. 990]; McCall v. Superior Court, 1 Cal.2d 527, 530-531 [36 P.2d 642, 95 A.L.R. 1019].)
[6] In Savage v. Mayer, 33 Cal.2d 548, it was stated at page 551 [203 P.2d 9] that an agent "is not permitted to make any secret profit out of the subject of his agency. [Citations.] All benefits and advantages acquired by the agent as an outgrowth of the agency, exclusive of the agent's agreed compensation, are deemed to have been acquired for the benefit of the principal, and the principal is entitled to recover such benefits in an appropriate action." [7] As to the applicability of section 3343 of the Civil Code it was there stated: "It follows that the principal's right to recover does not depend upon any deceit of the agent, but is based upon the duties incident to the agency relationship and upon the fact that all *405 profits resulting from that relationship belong to the principal. Thus section 3343 of the Civil Code, which provides the measure of damages in a suit based upon fraud in the sale or exchange of property, does not operate to limit a principal's recovery to those damages even though the profits may have been acquired through fraudulent representations to him ... see also recent cases which allowed full recovery of secret profits without discussing section 3343: Kinert v. Wright, 81 Cal.App.2d 919 [185 P.2d 364]; Thompson v. Stoakes, 46 Cal.App.2d 285 [115 P.2d 830]; Schwarting v. Artel, 40 Cal.App.2d 433 [105 P.2d 380]."
[8] Here the whole transaction was tainted by a breach of duty and the entire $15,000 may be recovered as secret profits from those who jointly received it while acting in concert in a fiduciary relationship. A clear showing of agency on the part of Metz and the defendant Letsinger is reflected by the record. It is not necessary to restate all the evidence in support of the finding on this material allegation. However, no evidence of agency is shown insofar as the defendant Vivian Metz is concerned. Her sole connection with the transaction appears to be that she is a named promisee in the note and the named beneficiary in the deed of trust securing the note given by the plaintiff in payment of commissions to Metz on the sale of the Fulton Street property.
[9] The cause of action stated in Count II is supported by the general finding and the judgment for compensatory damages, but does not entitle the plaintiff to punitive damages. Such an award may not be granted in an action based on a breach of contract even though the defendant's breach was wilful or fraudulent. (Civ. Code, 3294; Brewer v. Second Baptist Church, 32 Cal.2d 791, 801 [197 P.2d 713]; Chelini v. Nieri, 32 Cal.2d 480, 486-487 [196 P.2d 915]; Mother Cobb's Chicken Turnovers, Inc. v. Fox, 10 Cal.2d 203, 205 [73 P.2d 1185].) [10] Where a trial court erroneously awards both compensatory and exemplary damages for a breach of contract a reviewing court may, instead of reversing the entire judgment, make an order of modification striking that portion relating to punitive damages and affirm the judgment as so modified. (Chelini v. Nieri, supra, 32 Cal.2d 480, 488; Wolfsen v. Hathaway, 32 Cal.2d 632, 651 [198 P.2d 1]; 14 Cal.Jur.2d p. 828.)
It is therefore ordered that the judgment against the defendant Vivian Metz be and the same is hereby reversed; that *406 as to the defendants Dewey Letsinger and Bert Metz the judgment is modified by striking therefrom that portion in which the plaintiff is awarded $2,500 as punitive damages, and as so modified the judgment as to them is affirmed, no party to recover costs on appeal.
Gibson, C.J., Carter, J., Traynor, J., Schauer, J., Spence, J., and McComb, J., concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314965/ | 200 Ga. App. 560 (1991)
408 S.E.2d 797
COOPER
v.
THE STATE.
A91A0347.
Court of Appeals of Georgia.
Decided June 10, 1991.
Reconsideration Denied July 19, 1991.
Michael L. Bankston, for appellant.
J. Brown Moseley, District Attorney, Donald E. Henderson, Assistant District Attorney, for appellee.
COOPER, Judge.
Appellant was convicted in a jury trial of child molestation and appeals the denial of his motion for new trial.
1. Appellant contends the trial court erred in allowing Patricia Cooper ("Patricia"), the mother of the victim, to sit behind the victim during the victim's testimony. Patricia and the victim were appellant's wife and child, respectively, and the evidence demonstrated that the couple had been having marital problems before the alleged incident occurred. Appellant argues that Patricia manipulated the 11-year-old to accuse him of molestation to prevent him from proceeding with his threat to take their four children away from her and that her presence in the courtroom and in such close proximity to the victim influenced the victim's testimony. Before the victim testified, the trial court asked if she would be more comfortable with her mother sitting behind her. The court directed Patricia to sit quietly behind the victim and warned her not to attempt to communicate in any way with the victim. The victim sat, with her back to Patricia, facing the jury and the attorneys. Counsel for appellant made a timely objection to Patricia's presence and placement in the courtroom; however, he did not state the basis for the objection, nor did he raise the issue appellant now asserts on appeal. "Issues raised for the first time on appeal will not be considered by this court. [Cits.]" Vick v. State, 194 Ga. App. 616 (1) (391 SE2d 455) (1990).
2. Appellant next enumerates as error the admission of certain expert testimony on the child abuse syndrome. Appellant specifically argues that the trial court erred in allowing a psychologist, who had examined the victim, to testify as to his conclusion that she suffered from child abuse syndrome. Relying on Allison v. State, 256 Ga. 851 (6) (353 SE2d 805) (1987), appellant contends this testimony was tantamount to stating the victim was abused, the ultimate issue to be decided by the jury. The psychologist's testimony included a discussion of characteristics of sexually abused children and his observations of the victim after having had 15 sessions with her. Such expert testimony is competent evidence under OCGA § 24-9-67. The psychologist was asked by the State, "Does she fit the child abuse syndrome?" to which the psychologist replied, "Yes, she does." In Allison, the court held that a clinical psychologist's testimony that the *561 victim not only fit the syndrome but that she had in fact been abused was an inadmissible inference which the jurors could draw for themselves. Id. In the instant case, the testimony was not a conclusion that the victim was in fact abused; that issue was left to the jury to determine. Thus, the trial court did not err in admitting the testimony. Appellant's reliance on Allison, supra, is misplaced.
3. Finally, appellant raises the general grounds and contends the State failed to establish venue and jurisdiction. Viewing the evidence in a light to support the jury's verdict, it appears that there were two instances in which the victim had been molested, one of which occurred on Halloween in 1987 in a house in which the family lived in Mitchell County, Georgia. In an interview with a caseworker with the Department of Family & Children Services, the victim diagramed the family home and indicated that the assault took place on a sofa in the living room when Patricia was away from the home. The victim revealed that appellant had touched her in private places and placed his penis in her vagina and anus. She had a great deal of difficulty relating the events, and what she had difficulty saying she wrote down. She also circled the genital areas on both male and female diagrams and the hands on the male diagram to indicate where she had been touched and with what. The victim testified at the trial that appellant removed both her clothes and his clothes, touched her private parts and placed his penis in her vagina. A physician testified that his examination revealed that the victim had been penetrated. Based on the foregoing, we conclude that a rational trier of fact could have found appellant guilty of the offense of child molestation in Mitchell County beyond a reasonable doubt. Jackson v. Virginia, 443 U. S. 307 (99 SC 2781, 61 LE2d 560) (1979); Adsitt v. State, 248 Ga. 237 (2) (282 SE2d 305) (1981).
Judgment affirmed. Birdsong, P. J., and Pope, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314967/ | 544 F.3d 542 (2008)
Rita MILLER
v.
CLINTON COUNTY; Honorable Richard Saxton
Honorable Richard N. Saxton, Appellant.
No. 07-2105.
United States Court of Appeals, Third Circuit.
Argued May 13, 2008.
Opinion filed: October 1, 2008.
*545 A. Taylor Williams, Esq. (Argued), Administrative Office of PA Courts, Philadelphia, PA, for Appellant Honorable Richard N. Saxton.
Joseph P. Green, Esq. (Argued), Lee, Green, & Reiter, Inc., Bellefonte, PA, for Appellee Clinton County.
Joseph F. Orso, III, Esq. (Argued), Casale & Bonner, Williamsport, PA, for Appellee Rita Miller.
Before: McKEE, ROTH, Circuit Judges, and PADOVA, District Court Judge.[*]
OPINION
McKEE, Circuit Judge.
Rita Miller, a former employee of the Clinton County Probation office, brought this civil rights action against the President Judge of the Court of Common Pleas of Clinton County, Pennsylvania, Richard Saxton, pursuant to 42 U.S.C. § 1983. Miller's complaint asserts that Judge Saxton terminated her employment in violation of her First Amendment right to free speech, and her Fourteenth Amendment right to due process.[1]
Judge Saxton moved to dismiss Miller's complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Alternatively, he claimed that he was entitled to qualified immunity even if Miller's complaint stated a cause of action. He also moved for a more definite statement pursuant to Fed.R.Civ.P. 12(e) in order to resolve any issue of fact that may have precluded a grant of qualified immunity. The district court denied Judge Saxton's motion to dismiss as well as his Rule 12(e) motion for a more definite statement and this appeal followed. For the following reasons, we will reverse.
I. Factual Background
Miller was employed as an Adult Probation Officer by the Clinton County Probation Office. The Probation Office's employees had a collective bargaining *546 agreement with the County. According to Miller, one of her supervisors was ineffective and unprofessional. The supervisor allegedly referred to probationers as "scum," and openly stated that they did not deserve the money that the Probation Office spent on them.
On January 22, 2006, Miller wrote a letter to Judge Saxton expressing her dissatisfaction with the Probation Office. The letter was very short. In the letter, Miller stated:
[T]he reason I am writing to you now is that I can no longer work under the stressful conditions which must endure since Mrs. Foresman has become my supervisor. I have tolerated intimidation and hostility from Mr. Rosamilia numerous times throughout my employment with the county. I know that you are friends with both of them and you may not appreciate my candor but I believe that the time has come to explain my position to the court.
Miller also complained that Supervisor Foresman asked her to identify probationers whose restitution payments were in arrears, and she complained about Foresman suspending her because her clients were delinquent in those payments. She claimed that there was a difference in philosophy between herself and Foresman. According to the letter, that difference was that Miller "believes in rehabilitation for most clients, [whereas Foresman] believes [the clients] are scum and no money should be wasted on them.
Judge Saxton fired Miller immediately after receiving her letter. Soon thereafter, Miller brought this suit under § 1983. She alleged a constitutionally protected property interest in her continued employment, and claimed that the failure to provide her with adequate notice and opportunity to respond was a violation of the Fourteenth Amendment's guarantee of due process. She also asserted that her expression was protected under the First Amendment's guarantee of free speech and that she had been improperly terminated for exercising her right to free speech.
As we noted at the outset, Judge Saxton moved to dismiss Miller's claims under Federal Rule of Civil Procedure 12(b)(6). He also claimed immunity from suit. For reasons that are not at all apparent on this record, Miller did not attach her letter to her complaint. However, Judge Saxton appended it to his motion to dismiss and asked the court to convert that motion to a motion for summary judgment in the alternative. In addition, he asked the court to require Miller to provide a more definitive statement of the basis for her claim pursuant to Fed.R.Civ.P. 12(e), if his motion to dismiss or for summary judgment was denied.
The district court denied Judge Saxton's 12(b)(6) motion and refused to convert it to a summary judgment motion. The court concluded that Judge Saxton had not established that he was entitled to qualified immunity because the record did not support his claim that he had not violated Miller's clearly established constitutional rights. Although the court also ruled that the pleadings were insufficient to determine if Miller's termination was the result of retaliation for protected speech, the court refused to consider Miller's letter appended to Judge Saxton's motion to dismiss. The district court ruled that the letter did not sufficiently supplement the record to allow for summary judgment. The court also denied Judge Saxton's Rule 12(e) motion. Finally, the court concluded that Miller's due process claim could not be dismissed at the pleading stage because she alleged that the terms of her employment were governed by the terms of a collective bargaining agreement. This appeal followed.
*547 II. Jurisdiction and Standard of Review
A denial of qualified immunity is a "final judgment" subject to immediate appeal within the meaning of 28 U.S.C. § 1291. Behrens v. Pelletier, 516 U.S. 299, 307, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996). Thus, we have jurisdiction to review the district court's denial of Judge Saxton's motion to dismiss or for summary judgment. Our review is plenary. Doe v. Groody, 361 F.3d 232, 237 (3d Cir.2004).
III. Discussion
The doctrine of qualified immunity shields government officials performing discretionary functions "from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). Qualified immunity is not merely a defense, but is "an entitlement not to stand trial or face the other burdens of litigation." Saucier v. Katz, 533 U.S. 194, 200, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001) (citation omitted). Therefore, any claim of qualified immunity must be resolved at the earliest possible stage of litigation. Id. at 201, 121 S.Ct. 2151.
In Saucier, the Supreme Court made clear that claims for qualified immunity are to be evaluated using a two-step process. Id. at 201, 121 S.Ct. 2151. "First, [we] must decide whether the facts, taken in the light most favorable to the plaintiff, show a constitutional violation. If the plaintiff fails to make out a constitutional violation, the qualified immunity inquiry is at an end; the officer is entitled to immunity." Bennett v. Murphy, 274 F.3d 133, 136 (3d Cir.2002). "Once it is determined that evidence of a constitutional violation has been adduced, courts evaluating a qualified immunity claim move to the second step of the analysis to determine whether the constitutional right was clearly established." Id.
Based on our phased inquiry under Saucier, we conclude the district court erred in not dismissing Miller's complaint because her allegations do not establish either a violation of her right to free speech under the First Amendment, or a denial of due process. As the Court explained in Saucier, "[i]f no constitutional right would have been violated were the allegations established, there is no necessity for further inquiries concerning qualified immunity." 533 U.S. at 201, 121 S.Ct. 2151.
A. First Amendment Retaliation Claim
In Pickering v. Bd. of Educ., 391 U.S. 563, 570, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968), the Supreme Court first held that a public employee does not relinquish First Amendment rights to comment on matters of public interest by virtue of government employment. Thus, a public employer may not discharge an employee for a reason that infringes upon that employee's constitutionally protected interest in the freedom of speech. Rankin v. McPherson, 483 U.S. 378, 383, 107 S.Ct. 2891, 97 L.Ed.2d 315 (1987). Nevertheless, public employers are still employers, and they therefore have the same concern for efficiency and the need to review and evaluate employees as any other employer in order to ensure that the actions of employees do not interfere with the performance of public functions. Id. at 383-89, 107 S.Ct. 2891. On the other hand, the Court recognized that "the threat of dismissal from public employment is ... a potent means of inhibiting speech." Id. at 384, 107 S.Ct. 2891 (quoting Pickering, 391 U.S. at 574, 88 S.Ct. 1731).
Thus, in order to determine if a public employer's termination of an employee *548 violates the constitutional guarantee of free speech, we must "balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the [public employer], in promoting the efficiency of the public services it performs through its employee." Pickering, 391 U.S. at 568, 88 S.Ct. 1731; see also Connick v. Myers, 461 U.S. 138, 140, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983).
That balance turns on a three-prong inquiry. Watters v. City of Philadelphia, 55 F.3d 886, 892 (3d Cir.1995). Accordingly, in order for Miller to establish an unconstitutional firing, she must establish that her speech was protected, and that it was a motivating factor in the alleged retaliatory dismissal. Id. (citations omitted). If she does so, Judge Saxton must then establish that he would have taken the same employment action "even in the absence of the protected conduct." Id. (citation omitted).
At this stage, we are only concerned with the first part of that inquiry whether the speech was protected; and that is solely a question of law. To be protected, the speech must implicate a matter of public concern and must outweigh the employer's interest in the effective operations of its public services. Speech implicates a matter of public concern if the content, form, and context establish that the speech involves a matter of political, social, or other concern to the community. Connick, 461 U.S. at 146-48, 103 S.Ct. 1684. If the speech touches on a matter of public concern, we must then balance the employee's interest in engaging in her speech with the employer's countervailing interests, including the employer's prerogative of removing employees whose conduct impairs performance; and concerns for the morale of the workplace, harmonious relationships among co-workers, and the regular operation of the enterprise. Id. at 151, 103 S.Ct. 1684. The balancing we must undertake is a fact-intensive inquiry that requires consideration of the entire record, and must yield different results depending on the relative strengths of the issue of public concern and the employer's interest. Id. at 152, 103 S.Ct. 1684. No one factor controls the inquiry.
Our inquiry is guided by the Supreme Court's resolution of these competing interests in Connick, supra. Sheila Myers was an Assistant District Attorney in New Orleans who strongly opposed the District Attorney, Harry Connick, in his plan to transfer her to another district. She voiced that opposition to Connick's policies to her direct supervisor who told her that others did not share her concerns. Myers responded by distributing a questionnaire that solicited the view of her fellow staff members concerning office transfer policy, office morale, the need for a grievance committee, the level of confidence in supervisors, and whether employees felt pressured to work on political campaigns. Sometime after the questionnaire was circulated, Myers' supervisor told Connick that it was causing a mini-insurrection in the office. Connick responded by firing Myers for refusing to accept the transfer. He also told her that circulating the questionnaire was an act of insubordination. Myers responded by bringing a civil rights action under § 1983 in which she alleged that the firing violated her First Amendment right of free speech. The district court agreed and ordered her reinstated with compensation including attorney's fees. The court concluded that she had actually been fired for circulating the questionnaire, that the questionnaire involved matters of public concern, and that the "state had not `clearly demonstrated' that [it] `substantially interfered' with the operations of the District Attorney's office." Id. at 142, 103 S.Ct. 1684. Connick appealed *549 to the United States Court of Appeals for the Fifth Circuit, which affirmed on the basis of the district court's opinion. Connick then sought review in the Supreme Court by way of certiorari, which was granted.
The Supreme Court began its analysis by stating that "[f]or at least 15 years, it has been settled that a state cannot condition public employment on a basis that infringes the employee's constitutionally protected interest in freedom of expression." Id. The Court then explained that in order to resolve Myers' claim, it must (as explained in Pickering), "seek a balance between the interests of the [employee], as citizen, in commenting upon matters of public concern and the interest of the State, as an employer." Id. (internal quotation marks omitted). The Court recognized the state's interest as employer in "`promoting efficiency of the public services it performs through its employees[.]'" Id. (quoting Pickering, 391 U.S. at 568, 88 S.Ct. 1731).
After examining Myers' questionnaire, and the surrounding circumstances, the Court concluded that questions pertaining to the transfer policy, her fellow employees' confidence and trust in their supervisors, office morale, and the need for a grievance committee were merely extensions of Myers' dispute over her transfer. Id. at 147-48, 103 S.Ct. 1684. Those questions were not intended to shed light on any actual or potential wrongdoing or breach of the public trust by the district attorney's office. Rather, they were merely an expression of Myers' personal grievance against Connick. Accordingly, they did not constitute matters of public concern. Id.
The Court believed that the only expression touching upon a matter of public concern was the inquiry into whether Connick pressured employees to work on political campaigns. Id. at 149. However, after viewing the statement in context and considering the circumstances in which she circulated it, the Court held that one expression of public concern did not outweigh the District Attorney's interest in the efficient operation of his office because the questionnaire as a whole was of such limited value to the public. Id. at 154. Taken as a whole, it challenged the authority of Myers' supervisor, questioned the application of a transfer policy as applied to her, and undermined the close working relationships necessary for the effective functioning of the District Attorney's office. Id. That did not outweigh the employer's right to terminate Myers.[2]Id.
Here, Miller's statements that the Clinton County Probation office was being run ineffectively, and that her supervisors called probation clients "scum" undoubtedly refer to matters of public concern. Connick, 461 U.S. at 146, 103 S.Ct. 1684 stating that speech involves a matter of public concern if it can be fairly considered as relating to any matter of political, social, or other concern to the community. Indeed, the public concern over the manner in which a probation office supervises probationers in the criminal justice system is obvious.
*550 Connick and its progeny illustrate the extent to which we must view Miller's statements in context with the entire letter. We can not "cherry pick" something that may impact the public while ignoring the manner and context in which that statement was made or that public concern expressed. Our inquiry must also consider the form and circumstance of the speech in question.
The district court refused to consider the entirety of Miller's letter because it did not believe that Judge Saxton's appending the letter to his motion was sufficient to convert the motion to dismiss into a motion for summary judgment. We disagree. A "court may consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993).[3]
Miller's claims are undisputably based on her January 26, 2006 letter to President Judge Saxton, and only upon that letter. Moreover, in her complaint, Miller appropriately makes numerous references to the letter as the entirety of her speech is contained in it.[4] We find no reason why the district court should not have considered the letter in deciding the motion to dismiss, or in converting the motion to a motion for summary judgment. We will therefore consider the entirety of the letter in this appeal. See Pension Benefit Guaranty Corp. v. White Consolidated Industries, Inc., 998 F.2d at 1196-97 (considering a document on appeal that the district court did not consider while deciding a motion to dismiss).[5]
Upon considering the entirety of Miller's letter it is obvious that, although a small portion of the letter touches upon a matter of public concern, the context in which the statement occurs establishes that the speech is not protected. Miller's letter focused upon her private grievances as an employee. Her statements about the ineffective operation of the Probation Office, and her concerns about her supervisor's comments that the probationers are "scum," are collateral to the thrust of her complaint. She quite clearly states: "[T]he reason I am writing to you now is that I can no longer work under the stressful conditions which must endure since Mrs. Foresman has become my supervisor." That declaration provides the context for all that follows. Miller was upset with Foresman's supervision of her, and could no longer tolerate being supervised by her. In that context, the brief references to an issue of public concern she can hardly be interpreted as manifesting anything other than a multi-faceted personal "gripe" not unlike that voiced in Myers' questionnaire. See Connick, 461 U.S. at 153, 103 S.Ct. 1684 ("Myers acknowledges that it is no coincidence that the questionnaire followed upon the heels *551 of the transfer notice.") The personal context in which Miller's letter arose, in addition to the tangential connection between the issues of public concern and the overall thrust of the letter so minimizes any public concern in the subject of her expression as to tip the First Amendment balance in favor of her employer.
Miller's letter harshly criticizes two of her direct supervisors. She accuses her immediate supervisor of lying on two separate occasions and taking credit for the work of other co-workers. Miller also seemingly offers an ultimatum to the Chief Judge, stating that "she is not sure she can return [to her job] as long as Mr. Rosamilia and Mrs. Foresman continue to work there." Miller's letter is even disrespectful to Judge Saxton. In one exchange, she accuses her supervisor of lying and performing her job inadequately, but summarizes the passage by telling the Judge, "apparently that is the kind of Probation Officer you and Mr. Rosamilia [another supervisor] admire."
Miller's letter is therefore analogous to the speech at issue in Connick. In launching into an attack on management and her supervisors, Miller's letter did manage to brush ever so gently against a matter of public concern just like Myers' questionnaire in Connick. However, that seemingly serendipitous encounter does not convert her personal grievance into protected speech.[6]
Since Miller's speech is unprotected, she cannot establish a First Amendment retaliation claim. That cause of action should therefore have been dismissed because Judge Saxton is entitled to qualified immunity. Her due process claims also fail to state a constitutional violation and should have been dismissed for the same reason.
B. Due Process Claims[7]
The District Court also erred in not dismissing Miller's due process claim. Miller alleged that her termination occurred without notice or opportunity to respond, and resulted in a deprivation of her property interest in continued employment "without due process of law" in violation of the Fourteenth Amendment.
The first step in analyzing a due process claim is to determine whether the "asserted individual interest ... [is] encompassed within the [F]ourteenth [A]mendment's protection of life, liberty, or property." Alvin v. Suzuki, 227 F.3d 107, 116 (3d Cir.2000) (internal citations and quotations omitted). Judge Saxton contends that Miller possessed no interest in her employment protected by the Fourteenth *552 Amendment because, under Pennsylvania law, as a public employee her employment was at-will. In Elmore v. Cleary, 399 F.3d 279 (3d Cir.2005), we held that an public employee does not have any property interest in her employment within the meaning of the Fourteenth Amendment because such an employee serves solely at the pleasure of her public employer, and can be dismissed at anytime for any legal reason or for no reason at all. But see Clark v. Modern Group Ltd., 9 F.3d 321, 323, 327-28 (3d Cir.1993) (recognizing exception for terminations against public policy, such as for a discriminatory purpose).
In fact, we concluded in Elmore that Pennsylvania law precludes local governments from employing workers on any term other than as an at-will employee unless explicit enabling legislation to the contrary is enacted by the Pennsylvania General Assembly. Id. at 282-83 (citing Stumpp v. Stroudsburg Mun. Auth., 540 Pa. 391, 658 A.2d 333, 334 (1995)). We stated, "tenure in public government, in the sense of having a claim to employment which precludes dismissal on a summary basis is, where it exists, a matter of legislative grace." Id. at 283 (quotation omitted). Therefore, we rejected the argument that a personnel policy handbook conferred employment that could be only be terminated for just-cause.
Here, Miller cites no enabling legislation that would exempt workers in Clinton County from the general rule that public employees are at-will employees. Instead, Miller attempts to rely on the existence of a collective bargaining agreement which contains a provision that termination can occur only for "just cause" and argues that the agreement gives rise to a protected property interest in her employment. The district court accepted that argument and denied Judge Saxton's motion to dismiss on that basis. It erred in doing so.
Pennsylvania's Public Employe Relations Act ("PERA"), 43 P.S. §§ 1101.101 et seq., which allows collective bargaining between public employees and local governments, limits the matters that can be subject to collective bargaining to "wages, hours, and other terms and conditions of employment." See 43 P.S. § 1101.701. The PERA does not undermine the general rule that public employees in Pennsylvania are at-will employees. See Stumpp v. Stroudsburg Mun. Auth., 540 Pa. 391, 658 A.2d 333, 335 (1995) (holding that the rule that a public employee is an employee-at-will "has not been abrogated by either this Court or by the legislature").[8]
Moreover, Pennsylvania courts have interpreted the statutory scheme at issue, and have conclusively held that a court employee's right to collectively bargain does not affect the inherent right of judges to hire, discharge, and supervise their employees. County of Lehigh v. Pennsylvania Labor Relations Bd., 507 Pa. 270, 489 A.2d 1325, 1327 (1985). In fact, the Supreme Court of Pennsylvania has explicitly *553 stated on separate occasions that "matters affecting the hiring, discharge, and supervisory powers of the public employer are not subject to collective bargaining," and that the rights of judges to hire, discharge, and supervise court employees are not affected by collective bargaining. Id. at 1329; see also Ellenbogen v. County of Allegheny, 479 Pa. 429, 388 A.2d 730, 734 (1978). Miller's due process argument completely ignores this body of law.
Accordingly, the collective bargaining agreement that Miller relies upon could not confer any property interest in her employment or elevate her to something other than an employee-at-will under Pennsylvania law, and she cannot, therefore, establish the violation of a constitutional right which is a condition precedent to a claim under § 1983.[9]
IV. Conclusion
For the reasons set forth above, we conclude that Miller cannot establish that Judge Saxton's conduct violated her constitutional rights, and that Judge Saxton is therefore entitled to qualified immunity. We will therefore vacate the order of the district court, and remand with instructions to dismiss Miller's complaint.
NOTES
[*] The Honorable John R. Padova, Senior District Judge, United States District Court for the Eastern District of Pennsylvania, sitting by designation.
[1] The First Amendment guarantee of free speech is incorporated into the Fourteenth Amendment's due process clause and therefore applicable against the states. See Phillips v. Keyport, 107 F.3d 164, 183 (3d Cir. 1997). Miller also stated a separate cause of action for an alleged due process violation. She argues that she has a property interest in her employment and that she was deprived of that interest without due process of law in violation of the Fourteenth Amendment.
[2] The Court explained that the inquiry necessarily involves a sliding scale. The employer has no obligation to wait for the disruption to occur to terminate the employee, so long as the speech has significant potential to cause disruption relative to its value. Id. at 152, 103 S.Ct. 1684. On the other hand, the Court stated that if the questionnaire more substantially involved issues of public concern, a greater showing of disruption would have been needed to justify Myers' termination. Id. In other words, the amount of disruption a public employer has to tolerate is directly proportional to the importance of the disputed speech to the public.
[3] In Pension Benefit Guaranty, we reasoned that any other rule would allow a "plaintiff with a legally deficient claim to survive a motion to dismiss simply by failing to attach a dispositive document on which it relied." Id.
[4] Neither the authenticity, nor the accuracy of that document was in dispute.
[5] Our conclusion that the district court should have considered Miller's entire letter makes it unnecessary to decide whether the district court should have granted Judge Saxton's motion under Rule 12(e) for a more definitive statement. However, we take this opportunity to reemphasize the importance of granting a motion under Rule 12(e) where it furthers the considerations underlying qualified immunity. Thomas v. Independence, 463 F.3d 285, 301 (3d Cir.2006) (highlighting the usefulness of Rule 12(e) motions as part of a district court's obligation to "avail itself of the procedures available under the Federal Rules to facilitate an early resolution of the qualified immunity issue.")
[6] We nevertheless think it imperative to caution that we in no way suggest that speech which is otherwise public in nature can be sanctioned merely because it arises in the context of personal dissatisfaction or a personal grievance. In fact, common sense suggests that most employees will not speak out and criticize their employer if all is going well for them personally and they have no "axe to grind." Nor do we suggest that an employer can rely solely upon the disruption that may follow when an employee speaks on a matter of public concern merely because the employee is motivated by personal dissatisfaction with his/her employment. It is not the grinding of the proverbial axe that removes the protection of the First Amendment, it is the private nature of the employee's speech. Care must always be taken not to confuse the two inquiries. See O'Donnell v. Yanchulis, 875 F.2d 1059, 1061, 1062 (3d Cir.1989) ("[I]t would be absurd to hold that First Amendment generally authorizes corrupt officials to punish subordinates who blow the whistle simply because the speech somewhat disrupted the office.").
[7] As noted earlier, Miller claims a right to notice and an opportunity to be heard before being terminated as well as a substantive due process property interest in employment. Our discussion pertains equally to both aspects of her due process claim.
[8] We note that in Com., Labor Relations Bd. v. Franklin Twp. Municipal Sanitary Auth., 395 Pa.Cmwlth. 10, 395 A.2d 606, 608 (1978), the Commonwealth Court held that the statutes authorizing collective bargaining between public employees and local government units "clearly contemplate[ ] that public employers may agree in a collective bargaining agreement to limit its otherwise unfettered power to dismiss employees at will." However, in light of the Pennsylvania Supreme Court's statement in Stumpp, 658 A.2d at 335, that the legislature has not abrogated the general rule that public employees are employees-at-will, we do not believe that the Commonwealth Court's statement in Franklin Twp. changes our analysis of Miller's due process claim. Indeed, in Stumpp, the Pennsylvania Supreme Court expressly stated: "municipal entities lack the authority to confer employment tenure by contract." 658 A.2d at 335.
[9] The existence of a termination for just cause only provision in the collective bargaining agreement does not does not change this result. The power to appoint necessary personnel is inherent in the judicial power. Sweet v. Pennsylvania Labor Relations Board, 457 Pa. 456, 322 A.2d 362 (1974). "The authority to supervise and to discharge court-appointed employees is not only a necessary corollary to this appointment power but is also essential to the maintenance of an independent judiciary." County of Lehigh, 489 A.2d at 1327 (citing Commonwealth ex rel. Bradley v. Pennsylvania Labor Relations Board, 479 Pa. 440, 388 A.2d 736 (1978), and Ellenbogen v. County of Allegheny, 479 Pa. 429, 388 A.2d 730 (1978)). In Pennsylvania, county commissioners "are the exclusive representative of management in representation proceedings and collective bargaining under [the PERA] involving court employees paid from county funds." Ellenbogen, 388 A.2d at 735. However, the exclusive authority of county commissioners to negotiate "wages, hours, and other terms and conditions of employment," 43 P.S. § 1101.701, does not affect the inherent right of judges to hire, discharge and supervise court employees. Id.; see also County of Lehigh, 489 A.2d at 1329 ("[C]ounty commissioners are not prohibited from negotiating `wages, hours and other terms and conditions of employment' provided such terms do not impinge upon judicial control of hiring, discharge, and supervision in some concrete manner."). Moreover, "the judiciary has the inherent power to prevent any actual impairment of its independence created by the collective bargaining process." County of Lehigh, at 1329 (citations omitted). Therefore, even if the parties to the collective bargaining agreement here intended to grant "just cause" employment status to court employees, there is absolutely no authority to do so. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314909/ | 408 S.E.2d 876 (1991)
104 N.C. App. 216
STATE of North Carolina ex rel. UTILITIES COMMISSION; Piedmont Natural Gas Company, Inc. (Applicant); Public Staff-North Carolina Utilities Commission; and Lacy H. Thornburg, Attorney General
v.
CAROLINA UTILITY CUSTOMERS ASSOCIATION, INC.
No. 9010UC1294.
Court of Appeals of North Carolina.
October 1, 1991.
*877 Byrd, Byrd, Ervin, Whisnant, McMahon & Ervin, P.A. by Sam J. Ervin, IV, for intervenor-appellant.
Brooks, Pierce, McLendon, Humphrey & Leonard by Jerry W. Amos, for applicant-appellee.
EAGLES, Judge.
CUCA argues that the Commission's 13 February 1990 order should be reversed inter alia because there were insufficient findings of fact and conclusions of law and because the order was issued outside a general rate making proceeding. However, we do not reach the issues CUCA raises because we hold that CUCA is not a party aggrieved by the order currently before us and as such has no standing to appeal from this order.
N.C.Gen.Stat. § 62-90 provides in pertinent part:
(a) Any party to a proceeding before the Commission may appeal from any final order or decision of the Commission within 30 days after the entry of such final order or decision, ..., if the party aggrieved by such decision or order shall file with the Commission notice of appeal and exceptions which shall set forth specifically the ground or grounds on which the aggrieved party considers said decisions or order to be unlawful, unjust, unreasonable or unwarranted, and including errors alleged to have been committed by the Commission.
In order to have standing to appeal, a party must not only file notice of appeal within 30 days, but must also be aggrieved.
This court recently addressed the meaning of "aggrieved" in State ex rel. Comm'r of Ins. v. N.C. Rate Bureau, 102 N.C.App. 809, 403 S.E.2d 597 (1991). There we stated:
Under the Administrative Procedure Act, a "person aggrieved" is defined as "any person or group of persons of common interest directly or indirectly affected substantially in his or its person, property, or employment by an administrative decision." G.S. 150B-2(6). Under the Judicial Review Act, the predecessor to the Administrative Procedure Act, the Supreme Court said: "The expression `person aggrieved' has no technical meaning. What it means depends on the circumstances involved." In re Halifax Paper Co., 259 N.C. 589, 595, 131 S.E.2d 441, 446 (1963).
Id. at 812, 403 S.E.2d at 599. "Our Supreme Court has held that `person aggrieved' means [one] `adversely affected in respect of legal rights, or suffering from an infringement or denial of legal rights.'" (Citation omitted.) In re Wheeler, 85 N.C.App. 150, 153, 354 S.E.2d 374, 376 (1987). Where a party is not aggrieved by an order his appeal will be dismissed. Compare Gaskins v. Blount, 260 N.C. 191, 195, 132 S.E.2d 345, 347 (1963).
Here, CUCA has not shown that its interest in person, property, or employment has been substantially adversely affected, directly or indirectly. As Piedmont's brief correctly points out, Piedmont did not increase its rates under the 13 February 1990 order of the Commission. On the contrary, Piedmont reduced its rates by a total of $1.2659 per dekatherm.
CUCA contends, however, that they are an aggrieved party because the order would allow Piedmont to increase its rates in the future to the extent necessary to offset previous reductions under this order. We disagree. While under this order Piedmont *878 may file, and in fact has filed to make subsequent increases, those proposed increases are not before us. The subsequent proposed increases were effected through later filings in separate dockets which are subject to appellate review at an appropriate time. Those orders are not before us in this appeal.
Appeal dismissed.
JOHNSON and PARKER, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314924/ | 408 S.E.2d 630 (1991)
Mary Catherine LUSK, guardian of Stephen Lusk, A juvenile under the age of eighteen, Plaintiff,
v.
IRA WATSON COMPANY, d/b/a Watson's Backroom, A Delaware corporation authorized to do business in West Virginia, Defendant.
No. 19894.
Supreme Court of Appeals of West Virginia.
Submitted May 15, 1991.
Decided July 18, 1991.
*631 Richard G. Rundle, Pineville, for plaintiff.
Martin R. Smith, Jr. and Luci R. Wellborn, Charleston, for defendant.
WORKMAN, Justice:
The United States District Court for the Southern District of West Virginia, Bluefield Division, certified the following question to this Court:
Whether an owner of merchandise, his employee having called the police to the premises to investigate a possible shoplifting, is liable for an unreasonable detention of a suspected shoplifter by local police officers under West Virginia Code § 61-3A-4?
Upon review of the arguments of the parties and the records submitted to this Court, we find that an owner of merchandise so situated is not liable for an unreasonable detention of a suspected shoplifter by local police officers.
I
On March 30, 1989, the plaintiff Stephen Lusk, age twelve at that time, was a customer of the defendant Ira A. Watson Company, d/b/a/ Watson's Backroom, also known as Watson's (hereinafter referred to as Watson's) at Welch, McDowell County, West Virginia. Employees of Watson's submitted affidavits indicating that they observed Mr. Lusk behaving in what they determined to be a suspicious manner in the men's department of the store. Specifically, the employees observed Mr. Lusk wandering through the store and walking back and forth in front of a sales rack containing biker shorts. Carla Sue Colombo, a sales associate at Watson's, submitted an affidavit indicating that she observed Mr. Lusk remove a pair of biker shorts from a hanger. She looked away from Mr. Lusk for a moment to speak with a customer and then observed Mr. Lusk walking out of the men's department. Ms. Colombo indicated that the empty hanger was on the rack and that she did not see the biker shorts.
Judy Wyatt, another sales associate at Watson's, also submitted an affidavit indicating that she observed Mr. Lusk "behaving mischievously, holding his arm tightly to his side, looking around the store nervously and whispering to his companion while staring at the rack with the biker shorts." Ms. Wyatt counted the biker shorts on the sales rack after Mr. Lusk left the men's department and discovered that one pair of shorts was missing. Ms. Wyatt then instructed Ms. Colombo to continue to observe Mr. Lusk's activities, and Ms. Wyatt telephoned the Welch Police Department to notify them of a possible shoplifter.
Upon the arrival of Welch Police Department Officers William Worley and Richard Van Dyke, Watson's assistant manager Sandra Proffitt informed the officers that merchandise was discovered missing and that it was believed that the loss of merchandise was the result of shoplifting. Ms. Proffitt further informed the officers that Watson's employees had not actually observed Mr. Lusk take or conceal any merchandise.
The officers then escorted Mr. Lusk to a stockroom on the third floor of the store and questioned him concerning the possible shoplifting of merchandise. When Mr. *632 Lusk inquired as to why he was taken to the stockroom, he contends that he was informed that he should know and that someone from Watson's had called the police and stated that there had been a possible shoplifting. The officers then asked Mr. Lusk what he knew about a pair of stolen biker shorts. Mr. Lusk informed the officers that he knew nothing about any such biker shorts and that he did not have in his possession anything belonging to Watson's. The officers then directed Mr. Lusk to remove his jacket, raise his shirt, and remove his pants. Upon finding no stolen merchandise, the officers informed Mr. Lusk that he was free to leave the premises. Approximately twenty minutes elapsed from the time the employees observed suspicious behavior by Mr. Lusk until he was released by the police. The employees of Watson's did not participate in the investigation of suspected shoplifting and were not present during any action taken by the officers.
A civil action was instituted in the Circuit Court of McDowell County, West Virginia, by the plaintiff Mary Catherine Lusk, as guardian of Stephen Lusk, against Watson's. The action was removed to the United States District Court for the Southern District of West Virginia by reason of diversity of citizenship. The complaint asserts that Mr. Lusk was subjected to embarrassment, humiliation, and abuse and that he has "suffered great mental suffering, nervousness, and distress...." Watson's moved for summary judgment based upon its claim of immunity from suit pursuant to W.Va.Code § 61-3A-4 (1989)[1] contending that its employees had reasonable grounds to believe it necessary to notify the police of a suspected shoplifting and that it is not liable for any actions of Officers Worley or Van Dyke in their detention of Mr. Lusk. The question set forth above was subsequently certified to this Court.
II
In discussing W.Va.Code § 61-3A-4 in State v. Muegge, ___ W.Va. ___, 360 S.E.2d 216 (1987), we explained the following:
The primary purpose of this statute is to temper the common law's harsh rule of civil liability in actions for false imprisonment. At common law, a merchant detaining someone he suspected of stealing his goods was subject to liability if it turned out the accused party was not guilty.
360 S.E.2d. at 218.
In contrast to common law, W.Va.Code § 61-3A-4 provides that a merchant cannot be deemed liable to the person detained so long as the merchant had a "reasonable ground to believe that a person has committed shoplifting ... [and] detain[ed] such person in a reasonable manner and for a reasonable length of time not to exceed thirty minutes...." The allegation of misconduct in the present case is directed toward the actions of the police officers after they arrived on the premises, rather than toward any specific action of the merchant or its employees. This incident occurred in two separate, identifiable stages. First, the suspicions of the employees prompted them to notify the police; and second, the police arrived and proceeded to detain and interrogate the suspect.
The certified question before us addresses the potential liability of the merchant for the actions of the police. While this Court has not previously addressed this issue, the question of merchant liability for police action has been addressed by various other jurisdictions. In Quinones v. Mater & Berkele, Inc., 192 Ga.App. 585, 385 S.E.2d *633 719 (1989) cert. vacated, 259 Ga. 875, 390 S.E.2d 594 (1991), a case quite similar to the present one, customers filed a civil action for defamation, false imprisonment, intentional infliction of emotional stress, and wrongful seizure against the merchant and the police officer who questioned and allegedly detained the customers.[2] A judgment in favor of the merchant and the officer was rendered in the lower court, and the customers appealed to the Court of Appeals of Georgia. The court determined that the merchant could not be held responsible for the actions of the officer because the evidence was insufficient to establish that the officer acted "in any manner at the direction of or according to the policies and operating procedures of ... [the store]." Id. 385 S.E.2d at 723.
Similarly, in Welton v. Georgia Power Co., 189 Ga.App. 17, 375 S.E.2d 108 (1988), a robbery suspect brought a false imprisonment claim against a power company when agents of the power company caused him to be detained as a robbery suspect. The court held that the company was not liable for false imprisonment. 375 S.E.2d at 110-11. Again, the police officer involved worked as a part-time security officer for the power company. The court examined the capacity in which the officer was working when the alleged false imprisonment occurred and determined that the officer was on duty as a police officer twenty-four hours a day, was vested with authority to make arrests by the City of Atlanta, and had no authority to make arrests on behalf of the power company. Id.
The appellant had also argued that the power company was liable for false imprisonment on the theory that the police officer had acted under the direction and control of power company agents. Id. at 111. The court found that the evidence did not support the contention that power company agents instigated or directed any detention. The court explained the distinction between direct involvement in instigating criminal proceedings by police officers and merely relaying facts to police officers who subsequently take independent action. Id. The potential liability of the owner or merchant hinges upon the category into which the owner or merchant activity falls. Id. (citing Baggett v. National Bank & Trust Co., 174 Ga.App. 346, 347, 330 S.E.2d 108, 109-10 (1985)).
In Troupe v. Superx Drugs Corp., 659 S.W.2d 276 (Mo.App.1983), the Missouri Court of Appeals held that the involvement of the merchant in the actions of the police officers was significant enough to provide a foundation for liability of the merchant. The Missouri rule on this issue was reiterated as follows:
`If the defendant directs a police officer to take the plaintiff into custody, he is necessarily liable to respond in damages for a resulting false imprisonment; but if, to the contrary, the defendant merely states the facts to the officer, leaving it with him and his superiors to act or not, as they see fit, the defendant is not liable.'
659 S.W.2d at 279 (quoting Vimont v. F.S. Kresge Co., 291 S.W. 159, 160 (Mo.App.1927)).
The Troupe court also explained that "[t]here is no fixed test to measure acts constituting instigation of an arrest. Each case necessarily depends upon its own particular facts and circumstances." Id. The court found that the facts of the Troupe case supported the conclusion that the agent of the merchant not only "instigated the plaintiff's arrest but further that defendant's agents actually ordered or directed the plaintiff's arrest." Id. The employees in Troupe did more than simply summon the police to the store and report the facts as they had unfolded. The security officer employed by the merchant identified the plaintiff to the police as the person he had chased the previous day, the security officer had multiple dialogues with the police officers at the scene of the arrest, and the store manager testified that the security *634 officer had informed him "`that he had called the police and had ... [the plaintiff] arrested for the incident that happened a day or two before.'"Id. Consequently, the extensive involvement of the merchant's agent with the police activity supported a finding of merchant liability.
We concur with the reasoning of these cases and hold that absent evidence that the police officers in the present case acted at the direction of the merchant, the merchant cannot be deemed liable for any actions taken by the officers. The act of summoning police officers to the scene of a reasonably suspected shoplifting is not sufficient to invoke liability upon the merchant for any subsequent independent actions of the police officers. Watson's did not independently detain Mr. Lusk; he was only detained by police officers once those officers arrived. Thus, no question can be raised regarding the reasonable nature or length of detention by the merchant. To attempt to hold Watson's liable for actions committed independently by the police officers is inappropriate and inconsistent with the object of W.Va.Code § 61-3A-4.
Based upon the foregoing, we answer the certified question in the negative, and conclude that an owner of merchandise, his employee having called the police to the premises to investigate a possible shoplifting, is not liable for any unreasonable detention of a suspected shoplifter by local police officers under W.Va.Code § 61-3A-4. Having answered the certified question, we order this case dismissed from our docket.
Certified question answered and dismissed.
NOTES
[1] West Virginia Code § 61-3A-4 provides the following:
An act of shoplifting as defined herein, is hereby declared to constitute a breach of peace and any owner of merchandise, his agent or employee, or any law-enforcement officer who has reasonable ground to believe that a person has committed shoplifting, may detain such person in a reasonable manner and for a reasonable length of time not to exceed thirty minutes, for the purpose of investigating whether or not such person has committed or attempted to commit shoplifting. Such reasonable detention shall not constitute an arrest nor shall it render the owner of merchandise, his agent or employee, liable to the person detained.
[2] The police officer in Quinones also served as a part-time security officer for the merchant. 385 S.E.2d at 720. The court found, however, no evidence indicating that the police officer was acting within the scope of authority as a part time security officer. The officer was found to have acted only in the capacity of a city police officer. Id. at 723. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314926/ | 280 S.E.2d 270 (1981)
W. VA. TRACTOR & EQUIPMENT CO., etc.
v.
David C. HARDESTY, Jr., State Tax Commr. and
WRIGHT-THOMAS EQUIPMENT CO., etc.
v.
David C. HARDESTY, State Tax Commr.
Nos. 14426, 14427.
Supreme Court of Appeals of West Virginia.
July 14, 1981.
*271 Chauncey H. Browning, Atty. Gen., Michael G. Clagett, Asst. Atty. Gen., Charleston, for appellant.
Spilman, Thomas, Battle & Klostermeyer and G. Thomas Battle, Charleston, for appellee.
*272 NEELY, Justice.
These cases were consolidated in this Court to determine whether certain lease and lease/purchase agreements should be considered as sales or rentals for the purposes of the State's Business and Occupation Tax. The transactions in question involve heavy machinery used in construction and surface mining. Both appellees engage in the sales, service and rental of such machinery. Many of the customers of appellees cannot afford to buy new equipment when needed, either because of the large down payment required, or because incurring debts of that magnitude would make prequalification and bonding for state road projects more difficult and expensive. To facilitate sales in these situations the appellee companies follow the trade practice of allowing their customers to lease the equipment initially. In general, the customer is required to keep the equipment and pay rent for at least six months. However, at any time during the six month period the customer may buy the equipment outright and apply to the down payment all of the rental payments already made.
If the customer does not buy the equipment during the first six months and wants to keep it longer, he may continue to lease it from month to month while retaining an option to buy. Both appellees transfer title to customers when the sum of monthly payments equals the initial purchase price of the equipment plus a finance charge. Such sales are called lease payouts. In effect, then, there are two methods by which equipment can be purchased: the exercise of the option to buy and the lease payout. Most of these agreements are oral, but at times they are written. While the written agreements specifically disclaim any purchase options, both appellees demonstrate that this disclaimer is routinely waived orally.[1]
*273 During the contract period the appellees retain title to the equipment but they require their customers to insure it. The customers pay all personal property taxes for the equipment while it is in their possession. Appellees do not take depreciation on the equipment nor do they take investment tax credits, and their customers treat their payments as expenditures for capital, not rent payments, for federal tax purposes. The Internal Revenue Service characterizes these lease agreements as sales because the purchase option is exercisable within a period clearly less than the expected life of the equipment and the rental payments cover a substantial portion of the costs of the equipment, see I.R.C. § 162(a) (1976); Rev.Rul. 540, 1955-2 C.B. 39. The conclusion that the parties intend sales to transpire is supported by the fact that 95% of the equipment leased by appellee Wright-Thomas eventually is sold to lessees and 70% of appellee West Virginia Tractor's dollar sales volume is derived from what were initially lease agreements.
If these agreements are sales, they enjoy a lower tax rate under W.Va.Code, 11-13-2c [1971] than if they are leases of equipment, Code, 11-13-2i [1971]. Taxpayers prevailed in their appeal to the Circuit Court of Kanawha County from a ruling by the State Tax Commissioner which held these transactions to be leases. The circuit court concluded, however, that the substance and not the form of a transaction is decisive for tax purposes and it held that the lease/purchase arrangements should be taxed at the lower sales rate. The Tax *274 Commissioner now appeals from that decision. We disagree with the circuit court's ruling and therefore we reverse.
I
Appellees claim that for all practical purposes they consider these agreements sales, not the furnishing of property for hire. They conclude, therefore, that their income from the lease transactions should be taxed at the rate for wholesale sales, Code, 11-13-2c [1971] because in substance they are sales, or alternatively, because they are necessary to and thus included in the business of wholesale sales. Appellant Tax Commissioner claims, however, that regardless of the parties' intentions, the transactions are leases and should be taxed at the higher rate set for the leasing of property, Code, 11-13-2i [1971]. While the leases may be convenient for appellees, they are not part of the business of selling at wholesale.
Appellees' argument is essentially that their tax should be assessed on the basis of the substance of their transactions, not the form. However, tax law is a creature of statute and it is the statute which determines the issue. It is well settled in this State that when a tax statute is clear and free from ambiguity, it will be applied and not construed. State ex rel. Hardesty v. Aracoma-Chief Logan No. 4523, V.F.W., 147 W.Va. 645, 129 S.E.2d 921, 924 (1963); J. D. Moore, Inc. v. Hardesty, 147 W.Va. 611, 129 S.E.2d 722, 724-25 (1963). In Code, 11-13-1 [1971], sales are defined to include "any transfer of the ownership of or title to property." It is clear that appellees are not engaged in sales because the transactions by their own terms do not involve the transfer of ownership or title in the property. Unless the lessee chooses to buy the equipment at the end of the rental period he has received nothing for his money other than the use of the equipment during the rental period. Moreover, the written agreements in the record all call themselves leases and disclaim any options to buy.[2]
In other cases we have noted that the actual rights and duties owed to third parties and the rest of the world which are established by the terms of taxpayers' transactions are controlling for purposes of the Business and Occupation Tax, see, e. g., Frazee Lumber Co. v. Haden, 156 W.Va. 844, 197 S.E.2d 634 (1973) (since contract between taxpayer and third party clearly identifies taxpayer as timber producer, he is liable as such under Code, 11-13-2a); State ex rel. Hardesty v. Aracoma-Chief Logan No. 4523, V.F.W., 147 W.Va. 645, 129 S.E.2d 921 (1961) (when fraternal lodge holds itself out to public as caterer for profit, in competition with commercial restaurants and caterers, income from such catering is not exempt from tax on sales, Code, 11-13-2c, as income of charitable organization, Code, 11-13-3). In the cases before us, the rights and duties of appellees are established in the agreements they chose to call leases, not sales. The terms of the agreements provide for the customers' use of the equipment, not ownership. The agreements do not provide the customers with any interest in the property. Appellees cannot complain now that the State Tax Commissioner takes them seriously.
It does not matter for State Business and Occupation Tax purposes that the Internal Revenue Service may treat these agreements as sales, not leases. The I.R.S. would tax appellees at the same rate whether their income were from sales or leases. Their concern is with whether appellees' customers may deduct their expenditures as rent and the I.R.S. is specifically required by statute to go behind the form of agreements to look at their substance for *275 that purpose. In this regard the structure of the federal tax law differs explicitly from the State law since in the State system there is no express or implied authority to look at substance. Thus I.R.C. § 162(a) (1976) provides that:
There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including
. . . . .
(3) rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity.
For the I.R.S. to determine whether appellees' customers may take this deduction, they must determine that those customers neither have nor are taking title nor have an equity interest in the equipment. This requires an evaluation of the substance of the agreements and the intentions of the parties. Since the avowed purpose of the objective trade practice is to provide appellees' customers with equity in the equipment to facilitate purchases by them, this is an easy case for the United States to deny rental deductions. It is clear from the terms of these agreements that the lessee/purchaser is paying rent at a rate which affords him an opportunity to achieve an equity position and thus the rental payments are in excess of "ordinary and necessary" payments for the mere use of equipment.
However, the State Business and Occupation Tax does differentiate between rental and sales income and it has no similar implied mandate to go beyond the form of the transaction to determine its underlying characteristics. Since Code 11-13-2c hinges on whether ownership or title (not equity) has passed (as opposed to could potentially pass in the future), this is an equally easy case for the State of West Virginia to impose the tax at the rental, not sales, rate. Unless a separate sale takes place, the lessee does not gain title or ownership.
II
It is irrelevant that a large number of the lease agreements result in sales. Such sales are subsequent to the leases, not consequences of them. Also, a portion of them never result in sales, despite the parties' intentions at the outset. Apparently the business of leasing machinery is neither a necessary nor a sufficient precondition to the sale of such equipment and so is not an incident of the business of wholesale sales. Cf. Appalachian Elec. Power Co. v. Koontz, 138 W.Va. 84, 76 S.E.2d 863 (1953) (income derived from late payment surcharges is incidental to business as public utility so taxable under Code, 11-13-2d, not at miscellaneous service rate, Code, 11-13-2h). Leasing the equipment is not the equivalent of use by the appellees nor is it done for demonstration purposes. This contrasts with Illinois Road Equip. Co. v. Dep't of Revenue, 32 Ill. 2d 576, 207 N.E.2d 425 (1965), relied upon by appellees (similar transaction held to fall under exceptions to State use tax as either interim use or use for demonstration by retailer).
We cannot conclude, therefore, that appellees' rental businesses are part of their wholesale sales businesses. Rather, leasing constitutes a separate component of their overall business and should be taxed separately, as established by J. D. Moore, Inc. v. Hardesty, 147 W.Va. 611, 129 S.E.2d 722 (1963). By the same token, the principles of J. D. Moore dictate that once the lease ends and a sale is consummated, the income from the sale should be taxed at the wholesale sales rate. Inasmuch as there are two distinct transactions, they constitute different components of appellees' businesses and are taxable separately. Thus once a sale transpires through exercise of the purchase option, further payments under the agreement should be taxed as sales under Code, 11-13-2c [1971].
We recognize that there are sound business reasons for appellees to want to structure their transactions in the way they have. We noted earlier that their customers *276 find leasing makes bonding and prequalification requirements cheaper and simpler for state road projects. Similarly, appellees may benefit from leasing rather than financing sales of the equipment should their customers go into bankruptcy. Appellees would be stayed from proceedings to recover the equipment if ownership had passed to the customer under a sale but not if possession passed under a lease, see 11 U.S.C. § 362(a) (1979 Supplement).[3]
Accordingly, the judgment of the Circuit Court of Kanawha County is reversed and the case is remanded for further proceedings consistent with this opinion.
Reversed and remanded.
McHUGH, J., deeming himself disqualified did not participate in this decision.
NOTES
[1] The following is an example of the standard form lease used by appellee West Virginia Tractor:
LEASE AGREEMENT
THIS LEASE, Made this 19 day of August 1975 by and between WEST VIRGINIA TRACTOR & EQUIPMENT COMPANY, a corporation, of the City of Charleston, State of West Virginia, hereinafter called the Lessor, and Pigeon Creek Coal Company, of the City of Pigeon Creek, State of West Virginia hereinafter called the Lessee:
WITNESSETH:
That whereas the Lessee requires the use of the property hereinafter described for the purpose of _______________________________________________ __________________________________________________ and the Lessor is willing to lease said property for said purposes;
NOW, THEREFORE, It is agreed between the Lessor and Lessee as follows:
1. In consideration of the payment of the rentals hereinafter described, when and as due, and the performance of the covenants and agreements hereinafter set forth, the Lessor hereby leases to the Lessee the following described property, viz,
1New Murphy Model 872 CT Diesel Generator 360 KW, 240 volt, 60 cyclo.
Engine S/N A-916, Generator S/N XXXXXXXXX
F.O.B. cars at Charleston, W. Va. for a term of Thirty months, commencing on the date hereof a rental of Two Thousand Dollars ($2,000.00), of which $2,000.00 is payable on the signing of this agreement, being the first month's rental, and the balance of said rental is payable as follows:
Monthly in advance as billed and the Lessee promises to pay said rentals to said Lessor, its successors or assigns.
2. It is further understood and agreed that the rental rate herein set forth is to cover what is considered a normal day's work and, for time in excess of normal day's work during any thirty-day period will be paid for by the Lessee on a pro rata basis based on the above monthly rate, lessors [sic] liability for rental to be computed to date of return of equipment to Lessor, freight paid.
3. The Lessee acknowledges receipt of the above described property in good order and condition, and upon the expiration of the term of this lease, or upon the earlier termination thereof by the Lessor, as hereinafter provided, the Lessor shall be entitled to the immediate possession of said property, and the Lessee shall immediately deliver same, transportation charges paid, to the Lessor at its place of business in Charleston, West Virginia, in good order and condition, ordinary use, wear and tear thereof excepted.
4. The Lessee shall have the right to make any reasonable and lawful use of said machinery, and shall take proper care thereof, and at Lessee's own cost and expense shall make all necessary repairs and replacements, and shall keep the same in proper repair at all times.
5. The said property will not be moved from Mingo County, State of W. Va., without the written consent of the Lessor.
6. If said equipment shall be lost, destroyed, damaged, rendered unfit for service or not returned for any reason, then the Lessee shall pay to the Lessor the value thereof, which is $49,958.00.
7. The Lessee shall keep the said property insured against loss or damage by fire in an amount not less than the value thereof, with proper loss payable clause to the Lessor therein.
8. The Lessor shall not in any case or under any circumstances be held liable to the Lessee or any other persons for any loss or damage of any kind or character whatsoever to persons or property arising from, or in any manner connected with, the possession, use or operation of said property.
9. The Lessor has made no warranties other than such as are endorsed hereon in writing.
10. THIS TRANSACTION IS NOT A CONDITIONAL SALE, OR SECURITY AGREEMENT, BUT IS A LEASE of the aforesaid property and the title thereto shall remain in the Lessor and shall not pass to the Lessee, and said Lessee shall not nor shall he have the option of becoming the owner of said leased property.
11. In the event the Lessee defaults in the payment of any above mentioned rental installments, or a proceeding in bankruptcy, receivership or insolvency be instituted by or against the Lessee or Lessee's property, or if the Lessee shall make an assignment for the benefit of creditors, the Lessor shall be entitled to immediate possession of the leased property.
12. If the Lessee fails to make the aforesaid payments when they become due, or fails to keep or perform the conditions, covenant and agreements herein provided to be kept and performed, or in any way violates the same, then the Lessor, at its option, and without notice or demand, may take any and all lawful ways and means to collect all money due to the Lessor hereunder; or, if the Lessor shall deem it to its best interest so to do in order to secure itself against loss or damage, then the Lessor, without notice or demand, may enter upon the premises where the said property, or any part thereof, may be, and take possession thereof, and remove the same therefrom and thereafter hold the same absolutely free from all claims of Lessee; and, at its option, the Lessor may terminate this agreement, and thereupon the Lessee will deliver the said property to the Lessor on demand and pay to the Lessor all the aforesaid rentals, together with all costs and expenses incurred in and about the retaking of said property, and the return thereof to the Lessor, including attorneys fees incurred for consultations, in any action that may be instituted for the recovery of said property, or the enforcement of any of the Lessor's rights.
13. The Lessor shall have the right to enforce one or more remedies hereunder, successively, or concurrently, and such action shall not operate to prevent it from pursuing any further remedy which it may have hereunder or under the laws of the State in which said property may be located.
14. Executed in quadruplicate, one copy of which was delivered to and retained by the Lessee, this 19 day of August, 1975.
PETITIONER'S EXHIBIT NO. 2 B40 WEST VIRGINIA TRACTOR & EQUIPMENT COMPANY
By E. B. Basham (s)
Its V. P.
Pigeon Creek Coal Company (SEAL)
By Jerry Hoffman (s)
Lessee
Address Attn: Elliott Maynard
Mingo County Courthouse
Williamson, West Virginia
[2] See clause 10 in n.1, supra. Also, the following comes from the standard form contract used by appellee Wright-Thomas.
THIS IS A CONTRACT OF LEASE ONLY, NO REPRESENTATIONS, UNDERSTANDINGS, PROMISES, OPTIONS TO PURCHASE OR AGREEMENTS, ORAL OR WRITTEN, EXPRESS OR IMPLIED, HAVE BEEN MADE BY EITHER PARTY WITH RESPECT TO THE SUBJECT MATTER OF THIS LEASE AND THE EQUIPMENT LEASED HEREUNDER, EXCEPT AS EXPRESSLY PROVIDED. ANY ALTERATION OR MODIFICATION OF THIS LEASE SHALL BE IN WRITING AND SIGNED BY THE PARTIES HERETO.
[3] See Clauses 11 and 12, n.1, supra, and the following clause from the Wright-Thomas Lease.
10. FAULT AND REMEDIES: If LESSEE fails to pay the rental or any other sums payable hereunder when the same become due or if LESSEE should default in or fail to perform any other term or condition hereof; or if a trustee shall be appointed for LESSEE or its property; or if LESSEE shall make an assignment for the benefit of creditors; or should LESSEE be the subject of any proceeding under the Bankruptcy Act or become insolvent or attempt to remove, sell, transfer, encumber, sublet or part with the possession of the Equipment or do any act or thing tending to impair the title of LESSOR, each such event being termed an event of default by the LESSEE under the Lease, LESSOR may:
A. Proceed by appropriate court action or actions, either at law or in equity, to enforce performance by LESSEE of the applicable covenants and terms of this Lease or to recover damages for the breach of such covenants and terms hereof; or
B. Terminate this Lease, whereupon all right, title and interest of LESSEE to or in the Equipment shall absolutely cease and determine as though this Lease had never been made; and thereupon LESSOR may, directly or by its agent, enter upon the premises of LESSEE or other premises where the Equipment may be or supposed to be and take possession thereof and thenceforth hold, possess and enjoy the same free from any right of LESSEE or its successors or assigns, including any receiver, trustee in bankruptcy or creditor of LESSEE, to hold and use said Equipment for any purposes whatever; but LESSOR shall nevertheless have a right to recover from LESSEE any and all amounts including rents, which under the terms of this Lease, may be then due and unpaid hereunder for use of said Equipment together with any damages in addition thereto which LESSOR shall have sustained by reason of the breach of any covenant of this Lease.
C. The remedies provided by this Agreement in favor of LESSOR shall be cumulative and shall be in addition to all other remedies in LESSOR's favor existing at law or in equity.
D. In any event, LESSOR may recover a reasonable sum for attorney's fees and such expenses as shall be expended or incurred in the seizure of items of Equipment, in the collection of any amount due hereunder, in the enforcement of any other right or privilege hereunder, or in any consultation or action in connection with any of the foregoing. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314927/ | 408 S.E.2d 385 (1991)
Jerry Ray BLEVINS, Plaintiff Below, Appellant,
v.
BECKLEY MAGNETITE, INC. Defendant Below, Appellee.
No. 19654.
Supreme Court of Appeals of West Virginia.
Submitted May 8, 1991.
Decided July 29, 1991.
Rehearing Denied September 5, 1991.
*387 Richard E. Hardison, Beckley, for appellant.
Clyde A. Smith, Jr., Beckley, for appellee.
*386 WORKMAN, Justice:
This case is before the Court upon the appeal of Jerry Ray Blevins from a June 9, 1989, final order from the Circuit Court of Raleigh County, which granted the appellee's, Beckley Magnetite Inc., motion to set aside the jury verdict and enter judgment for the appellee notwithstanding the jury verdict. The appellant asserts that the lower court committed the following errors:
1) The circuit court erred in its finding of facts and in its conclusion thereon that appellee, Beckley Magnetite, Inc., did not have knowledge of the high degree of risk and strong probability of injury as a result of the specific unsafe working condition that existed in the workplace;
2) The circuit court erred in finding that the appellee did not have subjective realization and appreciation of the existence of an unsafe working condition and that it presented a high risk and strong probability of serious injury; [and]
3) The circuit court erred in its application of the statute and its concomitant conclusion that the employer did not act with a consciously, subjectively and deliberately formed intention to injure the appellee.
Based upon a review of the petition, the briefs and oral arguments, and all other matters of record, we conclude that no error was committed by the lower court, and accordingly, affirm the lower court's decision.
The facts of this case reveal that on February 16, 1985, at approximately 1:15 a.m., the appellant was working as a dryer-hopper operator, a position that he had held for about a year, when he was severely injured. The injury occurred when his left hand and arm were pulled into and crushed in the pinch-point of a self-cleaning conveyor tail pulley. The appellant testified that this accident happened as he was cleaning up ore spillage around the tail pulley so that it would not back up on the conveyor belt. The appellant indicated that clean-up of the spilled ore occurred three to four times a shift.
The appellant's testimony further indicated that "I went down and opened the gate.... I was up here shoveling materials on to the belt and while I saw [sic] shoveling, my coveralls must have got caught in the tail pulley and pulled me in." The appellant testified that he was instructed by William Dugger, the owner of Beckley Magnetite, to keep the conveyor systems running when cleaning up the spillage. The appellant also testified that he had not received any safety instruction regarding the operation of the machinery and that he only had been shown how to operate the dryer-hopper on one occasion before he started running it.
The appellant also offered the testimony of Dr. Wayne J. Wasson, the Federal Mine Safety and Health inspector who investigated the accident just after it occurred. Dr. Wasson testified that approximately one year prior to the accident, on February 21, 1984, he had issued a citation to Beckley Magnetite, for "the lack of a guard or a self-cleaning tail pulley on a conveyor." He testified that by guard he meant "a device to prevent persons from contacting moving machinery, getting caught up in or caught by or somehow [coming into] contact with moving machinery." Additionally, Dr. Wasson's testimony indicated that if in order to clean up the ore spillage, the person had to go into the guarded area, then there was a federal regulation that required the operation to be "turned off and locked out.... That's throwing the main disconnect and assuring that the power was off and applying a pad lock to the disconnect handle in such a manner that the power cannot be turned back on." Dr. *388 Wasson's testimony further revealed that the appellee immediately installed the requisite guard. He further testified that the guard installed by the appellee met the safety standards set by the Mine Enforcement Safety Administration (hereinafter referred to as MSHA) and accordingly, the MSHA inspector terminated and abated the citation previously issued.
Finally, Dr. Wasson testified that he investigated the appellant's accident and determined that the cause of the accident was "the injured [worker] working on or near the unguarded tail pulley without first shutting the conveyor down." He also testified that it was the responsibility of the appellant at the time he went into the guarded area to clean up the ore spillage to first turn off the power and lock out the machinery. While his testimony indicated that at the time of the appellant's injury he did issue a citation to the appellee, it also indicated that the citation was abated approximately fifteen minutes after it was issued when employees were reinstructed never to remove guards from around machinery or to enter a guarded area while the machinery was in operation.
The appellant also presented the testimony of Jimmy Ray Lilly, Charles Lilly, Leslie Lilly and Brady Allen Lilly, all former employees of appellee and all relatives of one another. Jimmy Ray Lilly had worked at Beckley Magnetite for approximately two weeks running the dryer-hopper. His employment occurred prior to the guard being placed around the machinery. Charles Lilly was hired primarily as a truck driver, but also occasionally worked on the dryer-hopper and unloaded material from the railroad cars. Leslie Lilly had driven trucks and worked on the dryer-hopper also at a time prior to the guard being installed. Finally, Brady Allen Lilly worked for the appellee running the dryer-hopper for only twenty-seven days. His employment ended shortly after the guard was installed. All of these witnesses testified that they were never instructed by the appellee to turn off the conveyor belt prior to shoveling ore spillage back onto the belt. However, none of them testified that they had ever been affirmatively instructed not to turn it off. Nor did any of them testify that they ever made the employer aware of the practice of not turning off the belt.
The appellant also offered the testimony of Dr. Russell Rex Haynes, president and chief engineer of Tech Engineering and Design Incorporated, a forensic consulting engineering firm. It is important to note that most of his testimony concerning the Code of Federal Regulations which had allegedly been violated was premised upon his opinion that the fence which had been erected by the appellee was not a guard. Consequently, he opined that the dryer-hopper on which the appellant was injured was unguarded on the day of the injury. Dr. Haynes also testified that the difference between a fence and a guard was that "a guard is more closely attached to the problem ... [and] is so arranged and sufficient in scope that a person can't even get in behind it accidentally." Haynes testified based upon this opinion that the appellee was operating in violation of the following provisions found in the Code of Federal Regulations: (1) 30 C.F.R. § 55.9-7 which is a mandatory provision providing that "[u]nguarded conveyors with walkways shall be equipped with emergency stop devices or cords along their full length;" (2) 30 C.F.R. § 55.14-1 which is a mandatory provision providing that "[g]uards, sprockets, chains, drive head, tail and take up pulleys, fly wheels, couplings, shafts, saw blades, fan inserts and similar exposed moving machine parts which may be contacted by persons and which may cause injury to persons shall be guarded;" (3) 30 C.F.R. § 55.14-3 which mandates that "[g]uards at conveyor drive, conveyor head and conveyor tail pulleys, shall extend a distance sufficient to prevent a person from accidentally reaching behind the guard and becoming caught between the belt and the pulley;" (4) 30 C.F.R. § 55.14-7 which mandates that "[g]uards shall be of substantial construction and properly maintained;" and (5) 30 C.F.R. § 55.14-29 which states that "[r]epairs or maintenance shall not be performed on machinery until the power is off and the machinery is blocked against motion, except where machinery *389 motion is necessary to make adjustments."
In addition, Dr. Haynes testified that even though the machinery was fenced in, it constituted "a very hazardous working condition if you were to enter the fence with the belt running ... " Finally, Haynes testified that a violation of both state and federal statutes, along with a violation of a commonly accepted business safety standard, occurred if "Mr. Blevins were told to go inside the fence while the belts or belt was operating in order to perform a task or clean up...."
The appellee's case consisted of three witnesses including William Dugger, Lloyd Stover and Okey Blevins. First, Lloyd Stover's testimony indicated that he was responsible for the safety training of employees at Beckley Magnetite. Stover's records regarding safety training reflected that he had met and discussed "[h]azard recognition, electrical hazard, [and] prevention of accidents" with the appellant on November 11, 1984, and again on December 28, 1984.[1] Stover testified that he instructed the appellant that if he had to go into the guarded conveyor area, he was to shut the conveyor belt down first. He also testified that while he knew the conveyor system was to be turned off prior to someone entering the guarded area, he did not know that the system had to be locked out also.
Next, William Dugger testified that since the installation of the conveyor and tail pulley involved in the accident in 1978, there had been no injuries involving that machinery until the appellant's. Dugger also testified on cross-examination in response to the appellant's question of whether he ever ordered the appellant to go inside that gate and clean up ore spillage without turning off the power first that "[m]y memory says I did not."[2]
The last witness' testimony offered by the appellee was that of Okey Blevins, who was working as foreman the night the appellant was injured. His testimony revealed that he only worked on the dryer-hopper when something broke down, and that his main job was to run the plant. Further, he could not remember whether there was a guard around the dryer-hopper the night of the appellant's accident, but he did indicate that he had received safety instruction and part of that instruction was "[w]hen you're working on the dryer system up there, you take and go down in the mill room down there and turn the main breaker off down there. At that time we had a bolt that went through there that holds the main breaker down." Finally his testimony revealed that while this was the proper procedure, he had witnessed employees shoveling ore spillage back onto the belt while the belt was operating. The witness was not asked by either side what action, if any, he took to halt the practice.
Additional evidence presented by the appellee through cross-examination of the appellant's witnesses revealed that the appellant was apparently the only person who testified that he was affirmatively instructed by the management to clean up the ore spillage while the conveyor belt was still running. The other witnesses for the appellant testified only that they were never instructed by the appellee to turn off the conveyor belt while cleaning up spillage. Moreover, none of the appellant's former employee witnesses was actually working at Beckley Magnetite at the time the accident occurred, and none of them had worked for the appellee since before the guard was installed with the exception of Brady Allen Lilly, who worked there for only about two days after the guard was installed. Finally, there was absolutely no evidence presented by the appellant, that on the night of the accident he was ordered, directed or even had it suggested to him that he was to go inside the gate and *390 clean up the ore spillage while the machine was in operation. The appellant's testimony only indicated that when he first started working there he was instructed to keep the dryer-hopper going at all times and that Mr. Dugger reminded him of this every so often.
At the close of presentation of all the evidence in the case, the appellee renewed a motion for directed verdict previously made after the plaintiff finished its case-in-chief. The court took the motion under advisement, deciding to let the case go to the jury and treat the motion as one to set aside the verdict if one was returned in favor of the plaintiff. The jury found for the plaintiff-appellant, assessing damages at $150,000.00. Subsequent to that verdict, the court granted the appellee's motion for judgment notwithstanding the verdict.
The statutory framework surrounding a Mandolidis[3]-type action essentially provides for two separate and distinct methods of proving `deliberate intention.' See Syl.Pt. 1, Mayles v. Shoney's, Inc., ___ W.Va.___, 405 S.E.2d 15 (1990). First, West Virginia Code § 23-4-2(c)(2)(i) (1983, 1991) provides that
(2) The immunity from suit provided under this section and under section six-a [§ 23-2-6a], article two of this chapter, may be lost only if the employer or person against whom liability is asserted acted with `deliberate intention.' This requirement may be satisfied only if:
(i) [i]t is proved that such employer or person against whom liability is asserted acted with a consciously, subjectively and deliberately formed intention to produce the specific result of injury or death to an employee. This standard requires a showing of an actual, specific intent and may not be satisfied by allegation or proof of (A) conduct which produces a result that was not specifically intended; (B) conduct which constitutes negligence, no matter how gross or aggravated; or (C) willful, wanton or reckless misconduct;....
It is apparent through the five special interrogatories submitted to the jury, that in the present case the appellant attempted to prove deliberate intention by utilizing the second method of proof by offering evidence of the five specific requirements found in W.Va.Code § 23-4-2(c)(2)(ii) (1983, 1991). This statutory provision states that a plaintiff proves deliberate intention where
(ii) The trier of fact determines, either through specific findings of fact made by the court in a trial without a jury, or through special interrogatories to the jury in a jury trial, that all of the following facts are proven:
(A) That a specific unsafe working condition existed in the workplace which presented a high degree of risk and a strong probability of serious injury or death;
(B) That the employer had a subjective realization and an appreciation of the existence of such specific unsafe working condition and of the high degree of risk and the strong probability of serious injury or death presented by such specific unsafe working condition;
(C) That such specific unsafe working condition was a violation of a state or federal safety statute, rule or regulation, whether cited or not, or of a commonly accepted and well-known safety standard within the industry or business of such employer, which statute, rule, regulation or standard was specifically applicable to the particular work and working condition involved, as contrasted with a statute, rule, regulation or standard generally requiring safe workplaces, equipment or working conditions;
(D) That notwithstanding the existence of the facts set forth in subparagraphs (A) through (C) hereof, such employer nevertheless thereafter exposed an employee to such specific unsafe working condition intentionally; and
(E) That such employee so exposed suffered serious injury or death as a direct and proximate result of such specific unsafe working condition.
*391 I.
The appellant's first assignment of error concerns whether the trial court erred in determining that a specific unsafe working condition did not exist in the workplace which presented a high degree of risk and strong probability of serious injury or death. See W.Va.Code § 23-4-2(c)(2)(ii)(A). The appellant contends that the trial court disregarded overwhelming evidence in reaching the following conclusion:
A. A specific unsafe working condition existed in the workplace at dryer-conveyor tail pulley assembly,[4] which, because of the lack of a history or record of injury because of such condition, did not bring to the employer's attention an appreciation of its potential high degree of risk and a strong probability of serious injury.
The appellant argues that the unsafe working condition which existed in the workplace was the appellant working in and around an unguarded tail pulley and corresponding pinch points on an operating conveyor belt assembly. The overwhelming evidence establishing this condition, according to the appellant, includes the citation issued by MSHA one year prior to the accident which, the appellant alleges, put the appellee on notice of the danger of serious injury created by not having a guard around the pinch points of the conveyor belt system while it was in operation. Further, the appellant maintains that the appellee had actual knowledge of the unsafe working condition and the high degree of risk of serious injury based upon the testimony of William Dugger, who recognized that working around the tail pulley area of the conveyor systems was dangerous.
The appellee, however, maintains that originally, the unsafe working condition was the unguarded tail pulley portion of the conveyor belt system. This unsafe working condition was rectified, to MSHA's satisfaction, by the erection of a fence. Moreover, the later citation which was issued concerning appellant's accident was not for an unguarded tail pulley, but rather only required Beckley Magnetite to reinstruct and recaution employees not to remove guards or enter a guarded area while machinery was in operation. A specific unsafe working condition, therefore, only existed when the appellant went into the guarded area, without first turning off the equipment, to clean up the ore spillage, failing to comply with safety procedures. Furthermore, the MSHA inspector's testimony that the cause of the appellant's injury was his working on or near the unguarded tail pulley without first shutting off the conveyor, and his further testimony that it was the appellant's duty to turn off the conveyor, demonstrated that the appellant failed to show a specific unsafe working condition existed, other than the one the appellant created by removing the guard, which presented a high degree of risk or strong probability of serious injury to employees.
In Mayles, the injured worker satisfied the requirement of proving a specific unsafe working condition presenting a high degree of risk and a strong probability of harm or serious injury by offering evidence which showed that hot grease was disposed of by carrying it in an open container down a grassy slope in order to discard the material in fifty-five-gallon drums. 405 S.E.2d at 21. The plaintiff in the Mayles case was injured when he slipped and fell on the grassy slope while disposing of the hot grease and was severely burned when the grease splashed out of the container and fell onto him. Id. at 16.
In the present case, however, the trial court properly concluded that the plaintiff failed to prove the existence of a specific unsafe working condition which presented a high degree of risk and the strong probability of injury or death to employees. The evidence demonstrates that the tail pulley portion of the conveyor belt system was guarded in a way which was accepted and approved by the MHSA inspector. Further, the evidence indicated that it only became unsafe when the guard was removed *392 and a worker entered the unguarded area while the machinery was in operation. By the appellant's own evidence, it was the responsibility of the dryer-hopper operator to turn the machinery off while cleaning ore spillage.
II.
The appellant's next assignment of error concerns whether the circuit court erred in finding that the appellee did not have subjective realization and appreciation of the existence of an unsafe working condition and that it presented a high risk and strong probability of serious injury. See W.Va.Code § 23-4-2(c)(2)(ii)(B). The lower court found that:
B. Because of the erection of the guard fence by the employer and its approval by the MSHA authority; and because no previous injury had occurred in the same workplace under the same circumstances as that of the plaintiff; the court does not find under such circumstances that the employere [sic] had a subjective realization and an appreciation of the existence of the dryer-conveyor tail pulley assembly as a specific unsafe working condition and that the same presented a high degree of risk and a strong probability of serious injury or death to an employee.
The appellant argues that the erection and existence of the fence guard is of no consequence, since one of the appellee's witnesses, Okey Blevins, testified that he had observed employees entering the fence guard and shoveling ore spillage while the belt was running. Consequently, the appellant further contends the actual observation of this practice constituted knowledge sufficient to show the employer had a subjective realization and appreciation of the danger involved. Finally, the appellee points out that the appellant was instructed to shut down the conveyor before going into the guarded area and moreover, the appellee never instructed the appellant to deviate from those safety instructions.
We considered the type of evidence required to prove the subjective realization and appreciation by the employer of the existence of an unsafe working condition and the high degree of risk and strong probability of serious injury presented to an employee by such condition in Mayles,405 S.E.2d at 21-22. In Mayles, not only was it clearly established that it was the general practice of employees to take the hot grease out the back door and down the grassy slope without a lid, but it was also established that the employer encouraged a "`do everything right now'" policy that mandated such unsafe practice. Id. at 21. A former manager even testified that it was the restaurant's policy to dump the grease while it was hot. Id, at 17. Further, the manager at the time the accident occurred testified that he had heard "`rumors'" that the hot oil was being disposed of before it was cooled and while he had made plans to change that practice, no such action had been taken prior to the accident. Id. at 21. Also, other employees had gone to management and complained that the manner in which the hot grease was disposed was unsafe. Finally, another employee, who was also a former manager, had been injured in the same manner a few months prior to the accident involving Mayles. Id. at 22.
In contrast, the evidence in the instant case reflects that there had been no prior injuries on the dryer-hopper which would have given the appellee a subjective realization and appreciation of the unsafe working condition. Further, there was evidence the employer had instructed the employees to turn the dryer-hopper off before entering the guarded area to clean up spillage. Even the appellant's own expert testified it would be the worker's responsibility to do so. There was no evidence that any employee brought to the employer's attention any information to put the employer on notice that an unsafe working condition or a high degree of risk to employees existed. While the appellant relies upon the issuance of a citation regarding the unguarded conveyor, the appellee points out that the citation was terminated and abated by the erection of the fence, which was accepted by the MSHA inspector. Accordingly, it is clear that the jury was not presented with sufficient evidence to establish the *393 type of proof necessary to show that the employer had a subjective realization and appreciation of the existence of an unsafe working condition.
Even in Mayles, where the plaintiff's evidence was very strong, we indicated it would probably not have fallen within the parameters of "the extremely narrow concept of deliberate intent enunciated in Mandolidis." See Mayles, 405 S.E.2d at 23 (citing Mandolidis, 246 S.E.2d at 907). However, the Legislature liberalized the concept first enunciated by this Court in Mandolidis by enacting the statute which provided the alternative means of proving deliberate intention through the five requirements found in W.Va.Code § 23-4-2(c)(2)(ii).
It is clear however, that given the statutory framework of W.Va.Code§§ 23-4-2(c)(2)(i) and (ii) which equates proof of the five requirements listed in W.Va.Code § 23-4-2(c)(2)(ii) with deliberate intention, a plaintiff attempting to impose liability on the employer must present sufficient evidence, especially with regard to the requirement that the employer had a subjective realization and an appreciation of the existence of such specific unsafe working condition and the strong probability of serious injury or death presented by such specific unsafe working condition. This requirement is not satisfied merely by evidence that the employer reasonably should have known of the specific unsafe working condition and of the strong possibility of serious injury or death presented by that condition. Instead, it must be shown that the employer actually possessed such knowledge. The evidence in the instant case was tenuous at best.
Consequently, we must conclude that the trial court was correct in granting the appellee's motion notwithstanding the verdict based upon West Virginia Code § 23-4-2(c)(2)(iii)(B) which specifically provides for such a determination by the trial court in the following pertinent provision:
(B) Notwithstanding any other provision of law or rule to the contrary, and consistent with the legislative findings of intent to promote prompt judicial resolution of issues of immunity from litigation under this chapter, the court shall dismiss the action upon motion for summary judgment if it shall find, pursuant to Rule 56 of the Rules of Civil Procedure that one or more of the facts required to be proved by the provisions of subparagraphs (A) through (E) of the preceding paragraph (ii) do not exist, and the court shall dismiss the action upon a timely motion for a directed verdict against the plaintiff if after considering all the evidence and every inference legitimately and reasonably raised thereby most favorably to the plaintiff, the court shall determine that there is not sufficient evidence to find each and every one of the facts required to be proven by the provisions of subparagraph (A) through (E) of the preceding paragraph (ii).[5]
In upholding the trial court's decision to grant the appellee's motion, it is important to remember that the ultimate goal of W.Va.Code § 23-4-2(c)(2)(ii) is to offer an alternative method of proof for a plaintiff to establish that his injury was deliberately intended by the employer. See Syl.Pt. 2, Mayles, 405 S.E.2d at 15 (emphasis added). Thus, when a plaintiff utilizes the five requirements found in West Virginia Code § 23-4-2(c)(2)(ii), his evidence must be strong enough that it essentially equates to a showing that "the employer ... against whom liability is asserted acted with `deliberate intention.'" Id. § 23-4-2(c)(2). In the present case, the evidence offered to demonstrate the existence of deliberate intention on the part of the employer was weak at best.
III.
The last assignment of error raised by the appellant is that the circuit court erred in its application of the statute and its concomitant conclusion that the employer did not act with a consciously, subjectively and deliberately formed intention to injure the appellant. The appellant argues *394 that the circuit court applies the incorrect statutory requirement to the evidence introduced at trial in making this determination.
As previously held by this Court in syllabus point 1 of Mayles "[t]he statute creating a legislative standard for loss of employer immunity from civil liability for work-related injury to employees found in W.Va.Code § 23-4-2 (1983) essentially sets forth two separate and distinct methods of proving `deliberate intention'." 405 S.E.2d at 15. Additionally, we held that "[a] plaintiff may establish `deliberate intention' in a civil action against an employer for a work-related injury by offering evidence to prove the five specific requirements provided in W.Va.Code § 23-4-2(c)(2)(ii)." Mayles, 405 S.E.2d at 23 and Syl.Pt. 2.
While the lower court does state that "[t]he court, under the foregoing circumstances, and irrespective of the correctness of its Ruling A, B and C[6], supra, does not find that the employer, upon the totality of all of the evidence, acted with consciously, subjectively and deliberately formed intention to produce the specific result of injury to the plaintiff," it is apparent from our review of the record that the lower court did correctly evaluate each requirement listed in West Virginia Code § 23-4-2(c)(2)(ii). The lower court merely went one step further and also evaluated the case under the alternative method of proof of deliberate intention found in W.Va.Code § 23-4-2(c)(2)(i). Just because the lower court evaluated the case under both methods of proof of the deliberate intention requirement offered by the statute does not create error in the lower court's decision.
Based upon the foregoing opinion, we accordingly affirm the decision of the Circuit Court of Raleigh County.
Affirmed.
NOTES
[1] The appellant testified that he began work at Beckley Magnetite in March 1983.
[2] Dugger did testify that it was his understanding of the law that "a guarded conveyor can be cleaned up while in operation...." (emphasis added) His testimony indicated that "in [the] case of our No. 1 belt that, that's inclined at the working level we were cited for not having a handrail. We installed a handrail on it and it's permissible today to shovel under that belt over the handrail onto the belt while it's in operation."
[3] See Mandolidis v. Elkins Indus., Inc., 161 W.Va. 695, 246 S.E.2d 907 (1978).
[4] The lower court indicated that this specific unsafe working condition was "the cleaning of spillage around the dryer conveyor tail pulley while the conveyor was operating."
[5] For a discussion of the procedural standards in deciding motions for summary judgment, directed verdict and judgment notwithstanding the verdict under this statute, see Sias v. W-P Coal Co., ___ W.Va.___, 408 S.E.2d 321 (1991).
[6] The lower court's rulings A and B are found supra in the text of this opinion. Ruling C made by the lower court was that "[t]he court does find that the injury to the plaintiff occurred because of his failure to turn off the dryer-conveyer before cleaning up the spillage around the tail pulley which was a violation of the cited MSHA safety regulations." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314984/ | 158 Ga. App. 441 (1981)
280 S.E.2d 848
HENSON
v.
FOREMOST INSURANCE COMPANY.
61352.
Court of Appeals of Georgia.
Decided April 16, 1981.
Rehearing Denied May 4, 1981.
Glyndon C. Pruitt, for appellant.
John D. Carey, T. Michael Tennant, for appellee.
BIRDSONG, Judge.
In 1973 the appellant Henson purchased a house trailer. In the summer of 1978, Henson became five months in default on the installment payments due on the underlying note executed as payment for the trailer. The creditor (First Federal Savings & Loan) sent Henson a notification of intention to repossess and sell the trailer at private sale (as authorized by the security agreement). The trailer was repossessed and sold. The sale was confirmed and resulted in a deficiency of slightly more than $4,000. The appellee Foremost Insurance made the creditor whole and took an assignment of the note and deed. Foremost then brought suit against Henson seeking to recover the deficiency.
The only real question in this case involves the sufficiency of the notice given to Henson by the creditor (the bank) that the trailer was to be sold at private sale. The evidence shows that the bank mailed *442 Henson notice by certified mail to the trailer park address with return receipt requested. The post office returned that letter with the notation thereon "Moved, Left No Address." At the time the creditor mailed the notice, the creditor was aware that Henson had abandoned the trailer and was not at that time living in the trailer. The facts further show that an investigator for the creditor went to the manager of the trailer park in an effort to ascertain Henson's forwarding address. With no success from that source, the investigator made inquiry of a former neighbor, again without learning Henson's whereabouts. It is not controverted that Henson did not leave a forwarding address either at the trailer park or with the post office. Though there was a dispute as to whether the investigator knew of Henson's new location, this was left to the jury to reconcile. The trial court presented the issue of sufficiency of notice and reasonableness of the creditor's efforts to determine Henson's address to the jury. The jury found in favor of the creditor and returned a verdict in the amount of the deficiency with interest.
While appellant Henson enumerates five alleged errors, they all hinge upon the question of the reasonableness of the bank's efforts to give notice to Henson. Henson urges that there never can be adequate notice when the creditor deliberately mails notice to an address which it knows is not the present address of the debtor. Held:
The Uniform Commercial Code requires the seller (creditor) to give the buyer (debtor) reasonable notification of an intended private sale. Code Ann. § 109A-9-504 (3). The requirement involved is one of the creditor giving the debtor reasonable notification as distinguished from the debtor receiving such notification. Steelman v. Assoc. Discount Corp., 121 Ga. App. 649, 651 (175 SE2d 62). In interpreting the sufficiency of notice, this court has held that in cases of repossession after default: "`. . . in accordance with Georgia Code Chapter 109A-9-5, the seller or holder shall not be entitled to recover a deficiency against said buyer unless within 10 days after said repossession he forwards by registered or certified mail to the address of the buyer. . . a notice of the seller's or holder's intention to pursue a deficiency claim against said buyer.' Under this statute, there was no other way the bank could give notice and comply with the statute." Slocum v. First Nat. Bank, 152 Ga. App. 632, 634 (263 SE2d 516). In effect Henson does not disagree that the creditor in this case followed the only legal way of giving notice. Henson rather argues that considering the bank's (appellee's predecessor in the security deed) existing knowledge that Henson was no longer residing at the trailer park, the mailing of notice to the trailer address without more extensive effort to ascertain Henson's new address did not amount to "reasonable" efforts to send notice to Henson's last known *443 address.
In this latter regard, this court concluded in the Slocum case, supra, that the plaintiff therein made a good faith effort to notify the defendant by sending a notice letter a second time after it was returned as unclaimed. In the case sub judice, the bank did not know Henson's new address. It complied with the statute by mailing notice by certified mail to Henson's address last known to it. Upon being informed by the post office that Henson had moved without leaving a forwarding address, the creditor made two more efforts to determine Henson's new address. This certainly constitutes more extensive effort towards location than in Slocum. We agree with the jury's conclusion that the bank made a good faith effort to notify Henson. Slocum v. First Nat. Bank, supra, p. 634. As observed by appellee in its brief: "To hold as Appellant is urging would convert secured parties into detective agencies in the business of locating lost persons. To stretch the `reasonable notification' requirements of the Uniform Commercial Code to such an extent would be . . . judicially unmanageable." There being ample evidence to support the jury's conclusion that the creditor's efforts to notify Henson were reasonable, we will not disturb that conclusion. Thompson v. Hill, 143 Ga. App. 272, 276 (238 SE2d 271).
Judgment affirmed. Shulman, P. J., and Sognier, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315002/ | 158 Ga. App. 432 (1981)
280 S.E.2d 856
JOHNSON
v.
THE STATE.
61434.
Court of Appeals of Georgia.
Decided May 1, 1981.
*434 W. Jason Uchitel, for appellant.
Joseph H. Briley, District Attorney, Craig M. Childs, Assistant District Attorney, for appellee.
BIRDSONG, Judge.
Simple assault. Grady Johnson was convicted of simple assault and fined $100. Accepting the facts most favorable to the verdict, we find the trial court was authorized to conclude that Johnson was at the entrance to a private road leading to a Georgia-Pacific industrial plant. Johnson was one of several strikers picketing the plant. The alleged victim, the personnel manager of the local plant, was bringing three "strike breakers" in his personal auto through the picket lines. The evidence shows that the auto slowed at the intersection of a county road and the private road, turned into the private road and proceeded slowly among the pickets. The picketing employees were approximately 15 to 20 feet from the auto. As the auto proceeded slowly among the pickets, Johnson allegedly walked toward the auto and reached a point approximately five feet from the auto. There is no evidence that he made any attempt to come closer or made any overtly threatening gesture with any observable weapon. None of the three passengers observed anything out of the ordinary other than some pickets on the side of the road. While standing about five feet *433 from the car while the car was still moving forward, Johnson raised his hand and pointed or shook his finger at the victim and said "We are going to get you." Nothing more was said or done and the vehicle drove on to the plant. No evidence was offered that the victim felt endangered at the moment or that he fled to avoid any danger or that Johnson was ever in a position to inflict any injury at that moment. Johnson brings this appeal enumerating several errors, of which only one needs any discussion. Held:
Johnson urges that the acts which the state alleged, and, arguendo, proved to have occurred do not constitute a cognizable crime. We agree. The court erred in failing to dismiss the charge and thereafter-failing to enter a judgment of acquittal. The evidence at most showed nothing more than a threat to commit some undefined act, perhaps of violence, in the future. Johnson stood outside a moving auto, pointed his finger at the car and communicated mere words; even if those acts are assumed to be threatening, this does not constitute simple assault.
The offense of simple assault as set forth in Code Ann. § 26-1301 is complete if there is a demonstration of violence, coupled with an apparent present ability to inflict injury so as to cause the person against whom it is directed reasonably to fear that he will receive an immediate violent injury unless he retreats to secure his safety. The evidence in this case fails in several particulars. There is a complete absence of evidence to establish that Johnson had the present ability to inflict a violent injury. He had no weapon and never was within arm length of the moving vehicle. There is a complete failure to show that the "victim" had any fear of an immediate injury or that Johnson's act or words would cause a reasonable person to fear immediate injury. Hise v. State, 127 Ga. App. 511 (194 SE2d 274). Even assuming a threat to commit a violent injury upon the person of the victim, without more this is not sufficient to constitute an assault. Harrison v. State, 60 Ga. App. 610 (4 SE2d 602). Even if the victim was apprehensive that at sometime in the future Johnson would carry out the threat, the only reasonable reading of the evidence shows this was not the apprehension of immediate violent injury but rather a future injury. Under the facts of this case, even accepting conclusively that the acts alleged by the state were fully established to the trial court, the same do not authorize a judgment of guilt on the charge of simple assault. Hudson v. State, 135 Ga. App. 739, 741 (218 SE2d 905). The trial court erred in not dismissing the charge at the end of the state's evidence.
Judgment reversed. Shulman, P. J., and Sognier, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1314991/ | 280 S.E.2d 299 (1981)
STATE of West Virginia
v.
Spencer T. MYERS.
No. 14383.
Supreme Court of Appeals of West Virginia.
July 17, 1981.
Lawrence B. Lowry, Barrett, Chafin, Lowry & Hampton, Huntington, for Myers.
Chauncey H. Browning, Atty. Gen., Paul Dean Maas, Asst. Atty. Gen., Charleston, for the State.
PER CURIAM:
The defendant, Spencer T. Myers, was convicted of first degree arson in the Circuit Court of Cabell County and was subsequently sentenced to an indeterminate term of two to twenty years in the State Penitentiary. In this appeal he contends, among other things, that the circuit court erred in failing to comply with W.Va.Code, 27-6A-1, which provides for the determination of competency of a defendant to stand trial, and for a determination of criminal responsibility. For the reasons set forth below, we find defendant's contention to be without merit and we affirm the trial court.
On July 12, 1977, prior to the commencement of defendant's trial, his counsel and the prosecuting attorney made a joint motion *300 for a mental and physical examination pursuant to W.Va.Code, 27-6A-1. The motion was granted and the defendant was subsequently transported to Huntington State Hospital for the examination where he refused to be tested. On July 28, 1977, a hearing was held in the circuit court and there it was ascertained that the defendant had refused to be examined because the doctor would not write down his name and because the defendant wanted to know why he was being examined. After the defendant's reasons for refusing the testing had been heard, the court made the statement that: "You certainly don't have to have it [the examination] if you don't want it. Your attorney made a motion on the 12th of July for an examination for you, and if you don't want that examination I am not here to force you. Do you want an examination or not?" The defendant responded in the negative and at that point the hearing was concluded. His counsel made no objection nor did he seek to renew the motion or disclose to the court any reasons why there was reason to believe that the defendant was incompetent to stand trial. He did state that the defendant's refusal to undergo an examination was against his advice. The defendant was subsequently tried and convicted for the arson of his mother's Huntington, West Virginia home in which he also resided. No issue of insanity was raised at the trial.
The defendant claims that the court erred in failing to proceed under W.Va.Code, 27-6A-1 when his competency was placed before the court in a motion requesting that he undergo a mental and physical examination. Specifically, the defendant argues that this case comes directly within our holding in State v. Milam, W.Va., 226 S.E.2d 433 (1976). However, the defendant's reliance on Milam is misplaced since it dealt with the right to a pretrial hearing in regard to incompetency to stand trial, where psychiatric reports raised a question as to the defendant's competency to stand trial.
Here, the issue is whether the court erred in refusing to require a mental examination when the defendant initially refused to cooperate and there was nothing presented to the court to suggest that the defendant was mentally incompetent. This issue is controlled by Syllabus Point 4, in part, of State v. Demastus, W.Va., 270 S.E.2d 649 (1980) which states: "When a trial judge is made aware of a possible problem with defendant's competency, it is abuse of discretion to deny a motion for psychiatric evaluation."
In Syllabus Point 3 of State v. Arnold, W.Va., 219 S.E.2d 922 (1975), we had stated:
"Whether a formal inquiry as to the mental capacity or competency of a defendant should be ordered is a question to be resolved within the sound discretion of the trial court."
Obviously the teaching of Demastus is that the trial court's discretion is limited and where there is some showing initially that the defendant is mentally incompetent, a psychiatric examination should be ordered. Here there was nothing shown to the trial court which would suggest that the defendant was mentally incompetent.
The defendant cites United States v. Johnson, 527 F.2d 1104 (4th Cir. 1975) where the court held that it is error to defer to the wish of a defendant who opposes a psychiatric examination where there is reasonable cause to believe that he is insane or mentally incompetent. The evidence in that case amply showed there was reasonable cause to believe the defendant was insane or incompetent.
The court in Johnson pointed out that with evidence of incompetency in the record, the trial court could not refuse to order an examination on the basis that the defendant resisted it because his resistance might be a further indication of his mental problems. Here there is no initial showing of mental incompetency; consequently, Johnson is distinguishable.
We therefore conclude that the trial court did not abuse its discretion. We find the defendant's remaining assignments to be without merit, and for the reasons set forth above, the judgment of the trial court is affirmed.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315003/ | 200 Ga. App. 385 (1991)
408 S.E.2d 173
STEIN ENTERPRISES et al.
v.
CHATHAM COUNTY.
A91A0617.
Court of Appeals of Georgia.
Decided July 9, 1991.
Clark & Clark, Fred S. Clark, for appellants.
Emily E. Garrard, Edward T. Brennan, for appellee.
COOPER, Judge.
Appellant, Sommers Company, appeals the denial of its motion for new trial in a condemnation action in which the jury awarded the condemnees, appellant as lessee and Stein Enterprises as owner, $30,350 for the partial taking of a convenience store and gasoline station.
*386 1. Appellant first claims that the trial court erred in allowing appellee's counsel on cross-examination to ask appellant's chief operating officer whether it was true that the officer founded a group of businesses that earned $85,000,000 in annual revenues. Appellant contends that this statement was so prejudicial that the trial court was obligated, even without objection by appellant, to have given curative instructions. We disagree. "In this state it is necessary to object to evidence at the time it is actually offered, and failure to do so amounts to a waiver of any objection which the party might have had. (Cit.)" (Punctuation omitted.) Georgia Power Co. v. Ga. Public Svc. Comm., 196 Ga. App. 572 (2) (396 SE2d 562) (1990). See also Wright v. Wright, 222 Ga. 777 (4) (152 SE2d 363) (1966). Inasmuch as appellant failed to make a timely objection to the question or request curative instructions, this enumeration of error is without merit.
2. Appellant in its second enumeration of error argues that the trial court erred in failing to excuse for cause a juror who stated that he had formerly worked with one of the real estate appraisers testifying on behalf of appellee and that he and appellee's witness presently owned some property jointly. During voir dire, the prospective juror first stated that he did not know if he could be "totally independent." The trial court then questioned the juror as to his ability to set aside his association and make a decision based on the evidence heard in the courtroom without being affected by his knowledge and business association with appellee's witness. The juror responded that based upon his appraisal experience, he could probably be fairly analytical about it. The trial judge decided not to excuse the juror because the juror had indicated that he could be objective based upon his experience as an appraiser. "The trial judge has a discretion in determining whether a juror can decide the case in accordance with the evidence presented during the trial and without bias or partiality or outside influences. Unless there is manifest abuse we cannot require a new trial. [Cit.]" Hill v. Hosp. Auth. of Clarke County, 137 Ga. App. 633 (1) (b) (224 SE2d 739) (1976). Inasmuch as the juror indicated that he could be fairly analytical about the evidence, we find no manifest abuse of discretion in this instance. See Decubas v. Norfolk Southern Corp., 197 Ga. App. 768 (399 SE2d 512) (1990).
3. In its third enumeration of error, appellant contends that the trial court erred in sustaining the objection of appellee's attorney that appellant's attorney was leading its witness on direct examination when questioning him as to the uniqueness of the location of the condemned property. "The trial court is permitted to exercise its discretion in granting the right to the party calling the witness to ask leading questions, and reversible error occurs only if that discretion has been abused to the extent that the appealing party has been prejudiced and injured. [Cits.]" Blue Cross of Ga./Columbus v. *387 Whatley, 180 Ga. App. 93 (7) (348 SE2d 459) (1986). Our review of the record indicates that the trial court did not abuse its discretion as appellant's attorney did, in fact, ask its own witness a leading question. Moreover, after the objection was sustained and appellant's attorney rephrased his question, the witness was able to testify in great detail as to his opinion about the uniqueness of the location of the property. Accordingly, this enumeration of error is without merit.
4. In its fourth enumeration of error, appellant argues that the trial court improperly charged the jury that in determining the measure of damages the actual value of a loss in a condemnation proceeding is ordinarily the same thing as market value. Appellant claims that because the evidence adduced at trial showed the unique nature of the site, its profitability, and the projected business loss to be suffered as a result of the condemnation, the correct measure of damages should have been the business losses which result in a decrease in the value of the business. However, appellee also presented evidence at trial that appellant would suffer no business loss as a result of the partial taking. "`"Where there is any evidence, however slight, upon a particular point, it is not error for the court to charge the law in relation to that issue." (Cit.)'" Kelley v. Foster, 192 Ga. App. 95 (3) (383 SE2d 646) (1989). Hence, this enumeration of error is without merit.
5. In enumerations five and six, appellant argues that the trial court erred in failing to give two jury charges on the valuation of unique property in condemnation proceedings. Inasmuch as the trial court's charges adequately covered substantially the same ground as those requested by appellant, it was not error for the trial court to refuse to charge the jury in the specific language requested by appellant. Fong v. Department of Transp., 194 Ga. App. 702 (2) (391 SE2d 704) (1990). Therefore, appellant's enumerations of error are without merit.
Judgment affirmed. Birdsong, P. J., and Pope, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315007/ | 248 Ga. 274 (1981)
280 S.E.2d 352
TRIBBLE
v.
THE STATE.
37344.
Supreme Court of Georgia.
Decided September 21, 1981.
Rehearing Denied October 8, 1981.
McAllister & Roberts, J. Dunham McAllister, for appellant.
Robert E. Keller, District Attorney, Jack Wimbish, Assistant District Attorney, for appellee.
PER CURIAM.
The Georgia Court of Appeals has certified the following two questions to this court:
"1. Does a `Brady Motion' (Brady v. Maryland, 373 U.S. 83 (83 SC 1194, 10 LE2d 215) (1963)) by a defendant `generally' for `all information which is in its (the State's) possession or purview... which could in any way [be] exculpatory, favorable or arguably favorable to defendant's defense,' require a trial court to conduct an in camera inspection of the prosecutor's files? [Cits.]
"2. If the answer to the first question is negative, does a `Brady Motion' which `specifically' requests access to an item of evidence or information require the trial court to conduct an in camera inspection of the prosecution's files? [Cits.]"
1. "In many cases ... exculpatory information in the possession of the prosecutor may be unknown to defense counsel. In such a situation he may make no request at all, or possibly ask for `all Brady material' or for `anything exculpatory.' Such a request really gives the prosecutor no better notice than if no request is made. If there is a *275 duty to respond to a general request of that kind, it must derive from the obviously exculpatory character of certain evidence in the hands of the prosecutor. But if the evidence is so clearly supportive of a claim of innocence that it gives the prosecution notice of a duty to produce, that duty should equally arise even if no request is made. Whether we focus on the desirability of a precise definition of the prosecutor's duty or on the potential harm to the defendant ... there is no significant difference between cases in which there has been merely a general request for exculpatory matter and cases ... in which there has been no request at all." United States v. Agurs, 427 U.S. 97, 106-107 (96 SC 2392, 49 LE2d 342) (1976).
The duty of the prosecution to provide exculpatory material to the criminal defendant must be distinguished from the "duty" of the trial court to conduct an in camera inspection. The two are not coextensive. While "Brady imposes an affirmative duty on the prosecution to produce at the appropriate time ... evidence which is materially favorable to the accused..." Williams v. Dutton, 400 F2d 797, 800 (5th Cir. 1968), the in camera inspection is merely a procedure which has been employed by the courts of this state as a means of accommodating the interest of the state in the effective prosecution of criminal cases and the interest of the accused in the preparation of his defense. See, e.g., Strong v. State, 246 Ga. 612 (272 SE2d 281) (1980); Fleming v. State, 236 Ga. 434, 438 (224 SE2d 15) (1976); Jarrell v. State, 234 Ga. 410, 418 (216 SE2d 258) (1975); Payne v. State, 233 Ga. 294, 296 (210 SE2d 775) (1974); see also United States v. Harris, 458 F2d 670, 677 (5th Cir. 1972). We hold that a trial court is not required to conduct an in camera inspection of the state's file in connection with a "general" Brady motion unless, after the state has made its response to the motion, the defense makes a request for such an inspection. State v. Shepherd Const. Co., 248 Ga. 1 (281 SE2d 151) (1981); Hamby v. State, 243 Ga. 339, 341 (253 SE2d 759) (1979); Houser v. State, 234 Ga. 209, 213 (214 SE2d 893) (1975).
In Hicks v. State, 232 Ga. 393, 396 (207 SE2d 30) (1974), this court held: "The appellant has the burden of showing how his case has been materially prejudiced, even when the trial court declines to make an in camera inspection." (Emphasis supplied.) See also Pryor v. State, 238 Ga. 698, 706 (234 SE2d 918) (1977); Street v. State, 237 Ga. 307, 316 (227 SE2d 750) (1976); Coachman v. State, 236 Ga. 473, 475 (224 SE2d 36) (1976). To the extent this language implies that a trial court may decline to make an in camera inspection notwithstanding a proper request, it will not be followed. However, we do not retreat from the rule that "a defendant bears the burden of showing prejudice to his case resulting from the prosecution's refusal to turn over documents or evidence." Id. at 475; Dickey v. State, 240 *276 Ga. 634, 636 (242 SE2d 55) (1978); Durham v. State, 239 Ga. 697, 700 (238 SE2d 334) (1977); Payne v. State, supra at 296-297.
2. Consistent with our holding in Division 1 of this opinion, we hold that the trial court is not required to conduct an in camera inspection of the state's file in connection with a "specific" Brady motion unless, after the state has made its response, the defense makes a request therefor. See Wilson v. State, 246 Ga. 62, 65 (268 SE2d 895) (1980); State v. Shepherd Const. Co., supra. We note that, even in the absence of a motion for in camera inspection, if the prosecution possesses specifically requested evidence and "if the subject matter of such a request is material, or indeed if a substantial basis for claiming materiality exists, it is reasonable to require the prosecutor to respond either by furnishing the information or by submitting the problem to the trial judge. When the prosecutor receives a specific and relevant request, the failure to make any response is seldom, if ever, excusable." United State v. Agurs, supra at 106.
3. Our holding in this case should not be construed as requiring reversal of a conviction solely on account of the trial court's failure to conduct an in camera inspection. Assuming material information has not been wrongfully withheld, "this error ... [generally] could be cured by post-trial examination..." Rini v. State, 235 Ga. 60, 65 (218 SE2d 811) (1975).
4. In summary, we hold as follows: a) The trial court is not required to conduct an in camera inspection under a "general" Brady motion. b) After the state has made its response to the motion, the defendant may request an in camera inspection, and the trial court must comply with this request. c) The same rules apply with respect to a "specific" Brady motion.
Both certified questions answered in the negative with the qualifications stated. Jordan, C. J., Hill, P. J., Marshall, Clarke, Smith and Gregory, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315004/ | 146 Cal. App. 2d 86 (1956)
JAMES JACOB GROVER, Respondent,
v.
SAN MATEO JUNIOR COLLEGE DISTRICT OF SAN MATEO COUNTY (a Corporation), Appellant.
Civ. No. 16888.
California Court of Appeals. First Dist., Div. One.
Nov. 19, 1956.
Keith C. Sorenson, District Attorney, Wallace & Parker and Charles F. Parker for Appellant.
J. Adrian Palmquist and Francis T. Cornish for Respondent.
PETERS, P. J.
Respondent, while a student at San Mateo Junior College, was seriously injured when an airplane in which he was riding crashed. The plane was then being operated by Harry D. Cranston, Jr., who ran a flying school under the name of Cranston Air Service. The flight in which respondent was injured was arranged and paid for by the college, being a noncompulsory part of an aeronautics course given by the college and in which respondent was enrolled. Respondent brought this action against the college district and Cranston. The jury brought in a verdict of $100,000 against both defendants. On motion for a new trial respondent agreed to a remission of part of the judgment so as to reduce it to $75,000. From that reduced judgment the college district appeals.
It is conceded on this appeal that the implied finding of the jury that the crash was proximately caused by the negligence of Cranston in the operation of the plane is supported by the evidence. The sole contention of appellant is that Cranston was not the employee of appellant, but an independent contractor for whose negligence appellant is not responsible. Appellant recognizes that to prevail on this point it must establish, as a matter of law, that Cranston was an independent contractor, and that, insofar as the question is one of fact, it has been adversely decided against it by the jury.
It is admitted that appellant's liability, if any, is predicated upon section 1007 of the Education Code. That section imposes liability on any school district "for any judgment against the district on account of injury to person or property arising because of the negligence of the district, or its officers, or employees," where a claim has been filed. A claim was here filed. *88
The partial reporter's transcript contains the following evidence relating to the issue involved:
Respondent at all times here relevant was a student at appellant college, enrolled in a course entitled "Aeronautics I." That course was described in the official catalogue of the college as follows:
"Objective: To give a general background to the subject of Aviation."
"Content: History of aviation, aircraft structures and problems of flight, navigation and meteorology for an air-age world, community problems, vocational problems, national and international aspects of aviation. Flight experience will be provided for those who have not flown previously."
Respondent testified that he was interested in aeronautics; that he intended to follow it as a career; that this affected his choice of San Mateo Junior College as a school; and that the opportunity for flying led him to enroll in the course here involved. Flight training was an integral, but optional, part of this course. Grades in the course were in no way dependent upon taking the flight. Students were graded the same whether or not they took the flight.
The instructor in the course was George Van Vliet, admittedly an employee of the appellant. He was a qualified pilot, with a special secondary teaching credential in aviation, and was licensed as a commercial flight instructor. Prior to making the arrangement with Cranston, he had taken students up in planes rented by the appellant school district, because the college never owned any planes. The purpose of the flights was to give the students a practical demonstration of the theories that they had learned in the classroom. Because, after 1950 or 1951, Van Vliet no longer had the time to fly the students in a rented plane, arrangements were entered into with Cranston to conduct these orientation flights. These arrangements were made by Van Vliet on behalf and with the approval of appellant, and the appellant paid Cranston for the services rendered. The arrangement between Van Vliet and Cranston was that the latter would be paid by appellant $5.00 per hour per student, that there would be three students in each flight, and that each flight would be planned to cover about three hours. The length, nature and general coverage of the flights were worked out by Van Vliet and Cranston at the beginning of the relationship. They talked over what things Cranston should cover in the indoctrination of these students, so that the practical demonstration would fit in with *89 the theory discussed in class. Van Vliet told Cranston that he considered the cross-country flight a "valuable" part of the course. It was agreed that the time of the flights would be arranged between Van Vliet, the students, and Cranston, so as to fit everyone's convenience. The students were to select the place they would like to go and, under the general supervision of Van Vliet, were to make up a flight plot. Cranston, however, was empowered to alter these plans if flying conditions did not warrant carrying out the flight as suggested by the students. Van Vliet did not go along on these flights, but, normally, when three students determined when and where they wanted to go, Van Vliet made the arrangements.
These arrangements between appellant and Cranston were oral. Customarily, Van Vliet would prepare a list of the students who wanted to take the flights and then send it to appellant's business office. That office would issue a work order authorizing the flights. After the flight Cranston or his company would send in a bill and this bill, periodically, was paid by the college district.
Cranston was a licensed flying instructor approved by both the Civil Aeronautics Administration and the State Department of Education. As already pointed out, he operated as the Cranston Air Service.
On the particular flight here involved, the three students, including respondent, decided upon the day they would like to go, and communicated this fact to Van Vliet, who made the arrangements with Cranston. The students worked out in class a detailed flight plan under Van Vliet's supervision, but, when they arrived at the airport, Cranston, because of adverse weather conditions in the area plotted, suggested a change in route which was agreed upon by the students. They took off in the plane and followed this new flight plan. Cranston explaining the operation of the plane, permitting the students to fly it in the air, and discussing with them the other matters agreed upon with Van Vliet. As a result of the negligence of Cranston in the operation of the plane, it crashed, and respondent was injured.
On these facts, the sole question now presented is whether Cranston, as a matter of law, was an independent contractor for whose negligence appellant is not liable.
Much has been written on the subject of what facts make a person an independent contractor and what facts make him an employee. There are many things to be considered. The problem most frequently arises either under the workmen's *90 compensation or similar law, or in tort cases where it is sought to impute the negligence of one person to another. While the same general test to determine the nature of the relationship is used in the various situations involved, it is quite clear that the emphasis to be placed upon any particular factor may vary, dependent upon which of the two general situations is being considered in the particular case. Certainly, the public policy and legislative purpose behind the workmen's compensation act are different from those behind statutes such as section 1007 of the Education Code imposing liability on school districts for the negligence of its employees. In the tort situation a very important question may be the relationship between the person injured and the one sought to be held as an employer, a problem not usually present in the normal workmen's compensation case.
In the present case, the relationship was between a student enrolled in a regular college course and the college that conducted that course. While the flying part of the course was not compulsory, it was clearly an integral and regular part of the course, an inducement to take the theory part of the course, and was paid and arranged for by the college. So far as the students were concerned, Cranston was just as much the instructor in that class as was Van Vliet. The students did not seek, select, or solicit Cranston for the flight training. They went to the college, and, if they took this course, they had to take Cranston for this purpose. Cranston was offered to the students by the college as the instructor in the flying part of the course. No student had any right to designate or select who should teach them the flying part of the course, any more than they could select the teacher to teach the theory part of the course. The student depended upon appellant to select the flying instructor, and to arrange and pay for the flights. Thus, the furnishing of the flights was part of the school's function. From the students' standpoint, Cranston was in no different position than Van Vliet, who was admittedly an employee of the appellant. Thus, the fact that appellant made no income deduction from Cranston's compensation for social security or income tax, while a factor in determining how Cranston and appellant looked upon the relationship, is not conclusive in the over-all picture so far as respondent is concerned.
The parties argue as to whether or not section 1007 of the Education Code imposes liability on the district for negligent acts of "agents" of the college as well as "employees." The *91 section imposes liability for the negligence of the "district, or its officers or employees" and does not specifically enumerate "agents." It can be argued that imposing liability on the "district" includes all manner of ways in which the "district," an artificial entity, can be liable, that is, by the acts of its "agents" as well as by the acts of its "officers or employees." This construction seems reasonable in view of section 3 of the Education Code which declares that the provisions of that code "are to be liberally construed, with a view to effect its objects and to promote justice." (See Kline v. San Francisco Unified Sch. Dist., 40 Cal. App. 2d 174 [104 P.2d 661, 105 P.2d 362].) Apparently the Legislature believed that section 1007 included a liability for the acts of "agents" because when it came to provide for the expenditure of public funds for insurance coverage for the liability created by section 1007 it provided for such coverage for "the negligent act by the district, or by a member of the board, or any officer, agent, or employee when acting within the scope of his office, agency or employment." (Ed. Code, 1029.)
Regardless of this issue, however, it is quite clear that there is ample and substantial evidence to sustain the finding that, so far as section 1007 of the Education Code is concerned, Cranston was the employee of the appellant. All the cases concede that the basic question involved on this issue is the nature and extent of the control exercised by the one sought to be held as employer. (Sudduth v. California Emp. Stab. Com., 130 Cal. App. 2d 304 [278 P.2d 946]; Empire Star Mines Co. v. California Emp. Com., 28 Cal. 2d 33 [168 P.2d 686]; Isenberg v. California Emp. Stab. Com., 30 Cal. 2d 34 [180 P.2d 11], and cases cited therein; see also Rest., Agency, 220.)
[1] In the instant case the evidence shows that the appellant district had sufficient "control" over Cranston to make him an employee. The control here involved is not the minute control over the actual operation of the airplane. The objective of the relationship was the orientation of the students to the principles governing cross-country flights, that is, to practically demonstrate some of the theories taught in the classroom. The evidence shows that the appellant district had the contractual right to determine how that was to be done, and what subjects Cranston should talk about to the students while on the flight. Had appellant desired to do so, it could have ordered flights over designated routes, subject to due considerations being given to the weather, and in other *92 obvious ways have controlled the method by which the desired result was to be obtained. In this respect the instant case is no different in principle from Isenberg v. California Emp. Stab. Com., 30 Cal. 2d 34 [180 P.2d 11], in which it was held that free lance jockeys, engaged separately for each race, were employees within the meaning of the Unemployment Insurance Act.
The legal and factual situation here involved is also not substantially different from that involved in Smith v. Fall River Joint Union High Sch. Dist., 118 Cal. App. 673 [5 P.2d 930]. There the plaintiff was a high school student. The school furnished the students bus transportation, and plaintiff was injured while riding in the bus as a result of the negligence of the driver. This bus was owned and operated by one Fitzwater, who had a written contract with the district obligating him to transport students to and from the school, which contract was terminable at any time by the school district. It was held that the court properly submitted to the jury the question of whether Fitzwater was an employee or an independent contractor, and that its finding that Fitzwater was an employee was supported. The appellate court found the necessary control in the right of the school district to terminate the contract at will--a right clearly existent in the instant case. In so holding, the appellate court stated (p. 681):
"... The primary consideration which leads to this conclusion is the right reserved by the district to terminate the agreement at will. It is not the actual exercise of control, but the right of control--that is to say, the potential power of control--which is important in a determination of whether or not the status of an employee or independent contractor exists. [Citing a case.] A circumstance tending to negative the independence of the driver is the right to terminate the employment at any time. [Citing a case.] In New York Indemnity Co. v. Industrial Acc. Com., 80 Cal. App. 713 [252 P. 775, 776] the court said: 'Coincident with the right of control is the right of either the employer or the employee to terminate the relation without liability. This is but another way of stating the rule, for the right to immediately discharge involves the right of control.'"
"As was stated in the case of Press Pub. Co. v. Industrial Acc. Com., 190 Cal. 114, 121 [210 P. 820, 823]: 'One of the means of ascertaining whether or not this right to control exists is the determination of whether or not, if instructions were given, they would have to be obeyed. In the instant case *93 it is undisputed that the Press Publishing Company had the power to hire and the power to discharge its carriers for unsatisfactory service, and in this regard Benefiel was in no better position than the other carriers. This power of discharge made obligatory any instructions given, for it gave to the Press Publishing Company the power to require obedience to those instructions and insured their being carried out.'"
"By retaining the power of discharge the district was virtually in a position to control every act of the driver."
For the foregoing reasons the judgment appealed from is affirmed.
Bray, J., and Wood (Fred B.), J., concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315020/ | 280 S.E.2d 104 (1981)
STATE of West Virginia
v.
John Lewis YOUNG.
No. 14642.
Supreme Court of Appeals of West Virginia.
July 7, 1981.
*105 John G. Anderson, Winfield, Barry Casto, Point Pleasant, for plaintiff in error.
Chauncey H. Browning, Jr., Atty. Gen., Dennis M. Abrams, Asst. Atty. Gen., Charleston, for defendant in error.
McHUGH, Justice:
This case is before this Court upon the petition of John Lewis Young for a writ of error and supersedeas from an order of the Circuit Court of Cabell County, West Virginia, entered upon a jury verdict, adjudging Young (hereinafter defendant) guilty of the offense of burglary. Consequently, this Court has before it the petition for a writ of error, all matters of record, including a transcript of the defendant's trial, and the memoranda of law filed by counsel.
By separate indictments returned by a Mason County, West Virginia, grand jury during the January, 1977, term of Court, the defendant was charged with murder and burglary. Both of these charges arose from the death of Mary Lucille Berry at her home in Mason, West Virginia. Upon the defendant's motion for a change of venue, the defendant's murder trial was transferred from Mason County to Wood County, West Virginia, whereupon a jury verdict was returned in November, 1977, and the defendant was convicted of second degree murder.
The defendant also moved for a change of venue with respect to his burglary trial. Accordingly, this trial was transferred from Mason County to Cabell County, West Virginia, where on September 13, 1978, the jury found the defendant guilty of burglary. By order entered October 12, 1978, the Cabell County trial judge sentenced the defendant upon the burglary conviction to confinement in the penitentiary for not less than one nor more than fifteen years. This sentence was to run concurrently with the defendant's sentence upon the murder conviction.
The allegations against the defendant, briefly stated, are that on December 1, 1976, the defendant and Terry Lee Brainard, his nephew, forced their way into the home of Mary Lucille Berry for the purpose of committing a theft. At that time, the defendant fatally stabbed Ms. Berry, whereupon he and Brainard fled to Ohio. Shortly thereafter, the defendant was arrested and indicted.
It is from the defendant's Cabell County conviction for burglary that the defendant seeks review in this Court.
As stated in his memorandum of law filed in support of the petition for appeal, the defendant asserts several grounds for the reversal of his burglary conviction. These grounds include, among others, the issue of double jeopardy, the admission of improper evidence prejudicial to the defendant, and the failure to try the defendant within the proper time subsequent to his indictment. As indicated below, however, one particular issue is dispositive of this appeal, and the remaining grounds asserted by the defendant need not be considered.
In his appeal to this Court, the defendant asserts that he was not brought to trial within the proper time subsequent to his indictment. This assertion raises issues relating to this State's one-term and three-term rules. The one-term rule, W.Va.Code, 62-3-1, provides that unless good cause be shown to the contrary, a criminal defendant shall be tried in the same term of court in which he is indicted. The three-term rule, W.Va.Code, 62-3-21, provides that, subject to enumerated exceptions, a criminal defendant shall be discharged from prosecution if not tried within three terms of court *106 after presentment, indictment or appeal from an inferior tribunal.[1]
Involved in this action are court terms of the Circuit Court of Mason County and court terms of the Circuit Court of Cabell County. Pursuant to statutory authority, Mason County and Cabell County each have three court terms per year, and these terms begin in January, May and September. W.Va.Code, 51-2-1f, and W.Va.Code, 51-2-1cc.[2]
During the January term, 1977, the defendant was indicted for burglary in the Circuit Court of Mason County. During that term, the defendant, in a separate indictment, was charged with murder. As indicated above, the defendant's trial for murder was transferred from Mason County to Wood County upon a motion filed by the defendant for a change of venue. In Wood County in November, 1977, the defendant was convicted by a jury of second degree murder.
With respect to the defendant's burglary trial, venue was changed from Mason County to Cabell County, and the defendant was not brought to trial until September 12, 1978, the September term of court. It is obvious, therefore, that more than three terms passed between the term of the defendant's indictment for burglary and the term in which the defendant was brought to trial. The only justification for such a delay within the meaning of W.Va.Code, 62-3-21 is the possibility that this trial was prevented by the application of one or more of the statutory exceptions to the three-term rule. Otherwise, reversal of the defendant's 1978 burglary conviction is, by statute, mandatory.[3]
As this Court recently reaffirmed in State ex rel. Shorter v. Hey, No. 15068 (W.Va. March 17, 1981), the three-term rule, W.Va.Code, 62-3-21, is the legislative adoption or declaration of what ordinarily constitutes a speedy trial within the meaning of U.S.Const., amend. VI and W.Va. Const., art. III, § 14.[4] In fact, numerous decisions of this Court have recognized that *107 the three-term rule is associated with a defendant's constitutional right to a speedy trial.[5]
The defendant was not brought to trial upon the burglary charge in either the Circuit Court of Mason County or the Circuit Court of Cabell County during the January, May and September, 1977, terms or the January and May, 1978, terms.
The facts contained in the record indicate that by order entered March 25, 1977, the Circuit Court of Mason County, upon the defendant's motion, continued the defendant's murder and burglary actions from the January, 1977, term to the May, 1977, term wherein the defendant was to be tried on May 9, 1977. The record further indicates that the defendant moved for or brought about other continuances of his burglary trial between the time of indictment and his trial which began on September 12, 1978. However, it must be emphasized that these latter continuances of the defendant related to periods of time within certain terms and did not involve substantial periods of time. Nothing in the record indicates that the defendant delayed his trial from one term to another, other than from the January, 1977, to the May, 1977, term in the Circuit Court of Mason County.
During the September, 1977, term, the Circuit Court of Mason County continued the defendant's burglary trial from the September, 1977, to the January, 1978, term. This continuance was brought about by motion of the State and without objection by the defendant.
Accordingly, in the January, 1978, term of court the defendant's burglary trial was pending in the Circuit Court of Mason County. However, the defendant was not tried during this term. Rather, by order entered February 14, 1978, the defendant's trial was transferred to Cabell County. This transfer was brought about by motion of the defendant for a change of venue. That motion was initially made by the defendant during the January, 1977, term. Subsequently, the defendant renewed the motion.
Nevertheless, the defendant was not tried by the Circuit Court of Cabell County during the January or May, 1978 terms.
As indicated above, the defendant did not object to the State's motion to continue the burglary trial from the September, 1977, to the January, 1978, terms. However, without regard to the September, 1977, term, it is clear that the three-term rule has been violated, and the defendant was denied his right to a speedy trial.
Specifically, this Court is of the opinion that the defendant is entitled to count the May, 1977, the January, 1978, and the May, 1978 terms for purposes of the three-term rule. Upon a careful consideration of the record, this Court must conclude that the statutory exceptions to the three-term rule, contained in W.Va.Code, 62-3-21, are not applicable to these terms, and the defendant should have been discharged from prosecution upon the burglary indictment.
Consequently, the defendant was not brought to trial within three terms subsequent to the term of his indictment in Mason County in January, 1977. The failure by the State to bring the defendant to trial within three terms did not fall within one of the statutorily enumerated exceptions to the three-term rule.
*108 On a step by step basis, the record is not clear as to the reason the defendant was not tried upon the burglary charge until September, 1978. However, as this Court stated in State ex rel. Browning v. Oakley, 157 W.Va. 136, 138, 199 S.E.2d 752, 753 (1973). "... it is a well recognized principle of law that courts of record can speak only by their record and what does not so appear does not exist in law." Moreover, in Syl. pt. 1, State v. Lacy, 232 S.E.2d 519 (W.Va.1977), we stated that "[t]his Court subscribes to the view that it is the duty of the prosecution to provide a trial without unreasonable delay rather than the duty of the accused to demand a speedy trial." State ex rel. Stines v. Locke, 220 S.E.2d 443, 446 (W.Va.1975).
Finally, we are well aware that the discharge of the defendant from further prosecution upon the burglary indictment is a harsh remedy in this case. However, in this decision we are simply giving effect to the defendant's federal and state constitutional right to a speedy trial and the mandatory provisions of W.Va.Code, 62-3-21.
For the above reasons, the final order of the Circuit Court of Cabell County adjudging the defendant guilty of burglary is reversed, and the defendant is discharged from further prosecution upon that charge.
Reversed.
NOTES
[1] W.Va.Code, 62-3-1, provides, in part, as follows:
When an indictment is found in any county, against a person for a felony or misdemeanor, the accused, if in custody, or if he appear in discharge of his recognizance, or voluntarily, shall, unless good cause be shown for a continuance, be tried at the same term.
W.Va.Code, 62-3-21, provides as follows:
Every person charged by presentment or indictment with a felony or misdemeanor, and remanded to a court of competent jurisdiction for trial, shall be forever discharged from prosecution for the offense, if there be three regular terms of such court, after the presentment is made or the indictment is found against him, without a trial, unless the failure to try him was caused by his insanity; or by the witnesses for the State being enticed or kept away, or prevented from attending by sickness or inevitable accident; or by a continuance granted on the motion of the accused; or by reason of his escaping from jail, or failing to appear according to his recognizance, or of the inability of the jury to agree in their verdict; and every person charged with a misdemeanor before a justice of the peace, city police judge, or any other inferior tribunal, and who has therein been found guilty and has appealed his conviction of guilt and sentence to a court of record, shall be forever discharged from further prosecution for the offense set forth in the warrant against him, if after his having appealed such conviction and sentence, there be three regular terms of such court without a trial, unless the failure to try him was for one of the causes hereinabove set forth relating to proceedings on indictment.
[2] W.Va.Code, 51-2-1f, provides for terms of court as follows: "For the county of Cabell, on the first Monday in January and May, and on the second Monday in September."
W.Va.Code, 51-2-1cc, provides for terms of court as follows: "For the county of Mason, on the first Monday in January, May and September. For the county of Putnam, on the first Monday in March, and on the second Monday in July and November."
[3] As the provisions of W.Va.Code, 62-3-21, supra, indicate, a defendant "shall be forever discharged" upon a violation of the three-term rule.
[4] U.S.Const., amend. VI, provides, in part, as follows: "In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial...."
W.Va.Const., art. III, § 14, provides, in part, as follows: "Trials of crimes, and misdemeanors, unless herein otherwise provided, shall be by a jury of twelve men, public, without unreasonable delay...."
[5] State v. Lacy, 232 S.E.2d 519, 522 (W.Va. 1977); State ex rel. Stines v. Locke, 220 S.E.2d 443, 446 (W.Va.1975); State ex rel. Wren v. Wood, 156 W.Va. 32, 36, 190 S.E.2d 479, 482 (1972); Town of Star City v. Trovato, 155 W.Va. 253, 257, 183 S.E.2d 560, 562 (1971); State ex rel. Farley v. Kramer, 153 W.Va. 159, 170, 169 S.E.2d 106, 113, cert. denied, 396 U.S. 986, 90 S. Ct. 482, 24 L. Ed. 2d 451 (1969); State ex rel. Smith v. DeBerry, 146 W.Va. 534, 538, 120 S.E.2d 504, 506 (1961); State v. Underwood, 130 W.Va. 166, 169, 43 S.E.2d 61, 63 (1947); Hollandsworth v. Godby, 93 W.Va. 543, 546, 117 S.E. 369, 370 (1923); Ex Parte Bracey, 82 W.Va. 69, 72, 95 S.E. 593, 595 (1918); Ex Parte Chalfant, 81 W.Va. 93, 96, 93 S.E. 1032, 1033 (1917); Denham v. Robinson, 72 W.Va. 243, 254, 77 S.E. 970, 975 (1913). See also, Cooper v. King, 303 F. Supp. 876, 878 (N.D.W. Va.1969) and Raleigh v. Coiner, 302 F. Supp. 1151, 1154 (N.D.W.Va.1969). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315040/ | 200 Ga. App. 511 (1991)
408 S.E.2d 509
KING
v.
THE STATE.
A91A0658.
Court of Appeals of Georgia.
Decided July 16, 1991.
Virgil L. Brown & Associates, Virgil L. Brown, Eric D. Hearn, Bentley C. Adams III, for appellant.
W. Fletcher Sams, District Attorney, William H. Stevens, Assistant District Attorney, for appellee.
McMURRAY, Presiding Judge.
Via a three-count accusation, defendant was charged with driving under the influence of alcohol in violation of OCGA § 40-6-391 (a) (1) (Count 1) and OCGA § 40-6-391 (a) (4) (Count 2). He was also charged with driving a motor vehicle without effective insurance. Counts 2 and 3 were dismissed by the State and Count 1 was submitted to a jury. Defendant was found guilty on Count 1 of the accusation and a sentence of 12 months and a fine of $1,000 were imposed. *512 Defendant appeals. Held:
1. OCGA § 40-6-391 is not unconstitutionally vague. Steele v. State, 260 Ga. 835 (400 SE2d 1). The trial court did not err in overruling defendant's "motion to dismiss and plea in bar" and "motion to quash" the accusation.
2. The evidence was sufficient to enable any rational trier of fact to find defendant guilty of driving under the influence beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307 (99 SC 2781, 61 LE2d 560); Ragan v. State, 191 Ga. App. 374, 375 (2) (381 SE2d 589).
3. The trial court erred in charging the burden-shifting language of OCGA § 40-6-392 (b) (3). Simon v. State, 182 Ga. App. 210, 212 (4) (355 SE2d 120); Peters v. State, 175 Ga. App. 463, 466 (2) (333 SE2d 436). This error requires the reversal of defendant's conviction inasmuch as he was tried only for violating OCGA § 40-6-391 (a) (1). Cf. Simon v. State, 182 Ga. App. 210, 212 (4), supra.
We cannot accept the minority's harmless error analysis. In determining whether a constitutionally infirm charge is harmless beyond a reasonable doubt, we examine a two-prong test: (1) whether the charge pertained to a matter which the jury had to decide and, if so, (2) whether the charge so invaded the province of the jury that we would have to say that the court, rather than the jury, tried the case. Lewis v. State, 180 Ga. App. 890, 891 (351 SE2d 100).
It is obvious that the trial court's charge pertained to a matter which the jury needed to address. The first prong of the test is clearly satisfied.
As to the second prong, we are not prepared to say that the trial court's charge did not influence the jury's deliberations. True, there was evidence which would lead the jury to conclude that defendant operated a car under the influence of alcohol to the extent that it was less safe for him to drive: The arresting officer testified that defendant smelled of alcohol, swayed and perspired, had red eyes and a flushed face. But the evidence did not demand such a conclusion. The officer acknowledged, for example, that there were other reasons for defendant to be red in the face and to perspire. (After all, the incident took place in Pike County, Georgia, on July 30, 1989.) More importantly, the officer admitted that he talked with defendant for "several minutes" before he decided that defendant was under the influence of alcohol.
We cannot say the trial court's erroneous, burden-shifting charge was harmless beyond a reasonable doubt. Accordingly, defendant's conviction must be reversed.
4. The remaining enumerated errors are unlikely to occur upon retrial.
Judgment reversed. Sognier, C. J., Banke, P. J., Birdsong, P. J., Carley, Pope and Cooper, JJ., concur. Beasley, J., concurs in Divisions *513 1, 2 and 4, and in the judgment. Andrews, J., dissents.
ANDREWS, Judge, dissenting.
I agree that it was error for the trial judge to charge the burdenshifting language of OCGA § 40-6-392 (b) (3). Sandstrom v. Montana, 442 U.S. 510, 517 (99 SC 2450, 61 LE2d 39) (1979); Francis v. Franklin, 471 U.S. 307 (105 SC 1965, 85 LE2d 344) (1985); Simon v. State, 182 Ga. App. 210, 212 (355 SE2d 120) (1987). However, the error was harmless under the facts of this case. See Rose v. Clark, 478 U.S. 570 (106 SC 3101, 92 LE2d 460) (1986).
The jury was instructed: "If there was at the time an alcohol concentration of 0.10 grams or more, it shall be presumed that the person was under the influence of alcohol as prohibited by paragraphs (1), (2), and (3) of subsection (a) of code section 40-6-391. Now I charge you that a statutory inference, an evidentiary inference is an inference of law. It is a conclusion and an inference which the law draws from given facts. The inference may be rebutted by proof." The jury was also charged that the defendant was presumed innocent, and that the state carried the burden of proving every element of the offense beyond a reasonable doubt.
This type of rebuttable presumption was characterized in Francis v. Franklin, supra, as a mandatory rebuttable presumption, and though "`less onerous' than the [conclusive presumption] charge in Sandstrom, [the Court] found it `no less unconstitutional' because it `relieves the State of the affirmative burden of persuasion on the presumed sumed element by instructing the jury that it must find the presumed element unless the defendant persuades the jury not to make such a finding.'" Williams v. Kemp, 255 Ga. 380, 385 (338 SE2d 669) (1986) (quoting from Francis v. Franklin, supra at 317). Were this strictly a conclusive presumption charge, I would agree with the majority that the conviction should be reversed, but the additional charge that the presumption may be rebutted by proof makes application of the harmless error rule appropriate, in light of the overwhelming evidence in the record. Compare Waters v. State, 195 Ga. App. 288, 292 (393 SE2d 280) (1990) (Birdsong, J., dissenting) (same charge given, but jury not advised that the presumption was rebuttable).
The distinction between conclusive and rebuttable presumptions requires differing applications of the harmless error rule to such burden-shifting charges. Mandatory conclusive presumptions are disapproved not only because they conflict with the accused's presumption of innocence, but also because they "invade (the) factfinding function which in a criminal case the law assigns solely to the jury." Sandstrom v. Montana, supra at 523. (Citation and internal quotations omitted.) In Connecticut v. Johnson, 460 U.S. 73 (103 SC 969, 74 LE2d 823) (1983), the Court examined application of the harmless *514 error rule to a conclusive presumption charge. "Under the plurality reasoning, the trial judge's instruction to the jury, that the elemental fact or facts are conclusively presumed if the predicate fact or facts are proved, is the `functional equivalent' of the direction of a verdict on this issue. Since this would result in the jury's failing to consider whether there was any evidence on the issue, the plurality held that even overwhelming evidence on the point would not render harmless the giving of the instruction as to the conclusive presumption. As stated by the plurality, `(a)n erroneous presumption on a disputed element of the crime renders irrelevant the evidence on the issue because the jury may have relied upon the presumption rather than upon that evidence.'" Williams v. Kemp, supra at 383 (quoting from Connecticut v. Johnson, supra at 84-85). Thus, where such a conclusive presumption is involved a Sandstrom error can be harmless only in those "rare situations in which the reviewing court can be confident that [such] error did not play any role in the jury's verdict." Connecticut v. Johnson, supra at 87.
The harmless error rule is more widely applicable to the mandatory rebuttable presumption at issue here because, although it also conflicts with the presumption of innocence, it does not destroy the factfinding function of the jury by removing from the case the issue of whether the defendant was under the influence of alcohol to the extent that it was less safe for him to drive. "A mandatory rebuttable presumption does not remove the presumed element from the case if the State proves the predicate facts, but it nonetheless relieves the State of the affirmative burden of persuasion on the presumed element by instructing the jury that it must find the presumed element unless the defendant persuades the jury not to make such a finding." Francis v. Franklin, supra at 317. In the present case the jury was instructed that the presumption may be rebutted by proof. This charge extended the fact finding function of the jury to a consideration of all the evidence, rather than instructing it to ignore the evidence in favor of a conclusive presumption. In considering application of the harmless error rule to a rebuttable presumption charge, the court in Rose v. Clark, supra, used the traditional standard set out in Chapman v. California, 386 U.S. 18 (87 SC 824, 17 LE2d 705) (1967). "`Chapman mandates consideration of the entire record prior to reversing a conviction for constitutional errors that may be harmless.' The question is whether, `on the whole record . . . the error . . . (is) harmless beyond a reasonable doubt' . . . [T]he inquiry is whether the evidence was so dispositive [of the element to be presumed] that a reviewing court can say beyond a reasonable doubt that the jury would have found it unnecessary to rely on the presumption." (Citations omitted.) Id. at 583. See Carella v. California, 491 U.S. 263 (109 SC 2491, 105 LE2d 218, 226-227) (1989) (Scalia, J., *515 concurring) (more expansive traditional harmless error analysis of Rose v. Clark, supra, for rebuttable presumptions, not acceptable for conclusive presumptions which preclude jury's factual determination of presumed element).
The evidence here shows that a police officer found King at the scene where his car was resting in a ditch off the side of the road. King admitted he was the driver of the car, and told the officer he fell asleep and ran off the road. Physical evidence at the scene showed the path of the car as it ran off the road for about 200 feet before coming to rest in the ditch. The officer testified that King had the odor of alcohol about his person, was staggering, had red eyes, a flushed face, and was perspiring. The state-administered breath test, given approximately an hour later, showed King to have an alcohol concentration of 0.13 grams. King presented no evidence in his defense. The evidence overwhelmingly establishes, beyond a reasonable doubt, that King was under the influence of alcohol while driving the car to the extent that it was less safe for him to drive. The erroneous instruction was harmless because, beyond a reasonable doubt, the jury found the facts necessary to support the conviction, rather than relying on the presumption. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260592/ | 125 Cal.Rptr.2d 445 (2002)
101 Cal.App.4th 1395
David CUNDIFF et al., Plaintiffs and Appellants,
v.
GTE CALIFORNIA INCORPORATED et al., Defendants and Respondents.
No. B151296.
Court of Appeal, Second District, Division Three.
September 12, 2002.
Rehearing Denied October 15, 2002.
Review Denied December 18, 2002.[**]
*447 Hadsell & Stormer and Dan Stormer, Pasadena; Law Offices of Marc Coleman and Marc Coleman, Long Beach, for Plaintiffs and Appellants.
Munger, Tolles & Olson, Henry Weissmann, Richard Drooyan and A. Tali Zer-Ilan, Los Angeles, for Defendants and Respondents GTE California Incorporated and Verizon California Inc.
Certified for Partial Publication.[*]
*446 CROSKEY, Acting P.J.
Plaintiffs David Cundiff, Jennifer Cundiff, John Debruin, and Eva Debruin ("plaintiffs") appeal from an order of dismissal entered after the trial court sustained, without leave to amend, the demurrer of defendants GTE California Incorporated and Verizon California, Inc. ("GTE California," "Verizon California," collectively "defendants") to plaintiffs' first amended complaint.[1]
Defendants are in the business of supplying telephone service to portions of the State of California. Part of their business includes supplying telephone equipment to their customers, including telephones. This suit concerns defendants' rental charges for such telephones. Plaintiffs, who seek certification as a class on behalf of all persons similarly situated to themselves, contend defendants charge their customers for obsolete or nonexistent telephones, and have imposed such charges, either intentionally or negligently, for over 15 years, without their customers' knowledge.[2]
Defendants' demurrer was sustained when the trial court ruled that section 1759 of the Public Utilities Code gives the Public Utilities Commission ("the commission") either exclusive or primary jurisdiction over the matters alleged in the amended complaint.[3] Plaintiffs contend this case is not governed by section 1759, but rather by Public Utilities Code section 2106, and therefore original jurisdiction is proper in the trial court.[4] Plaintiffs also contend the doctrine of primary jurisdiction does not bar this suit, nor require its stay.
Our examination of the relevant statutes and cases leads us to conclude that (1) the commission does not have exclusive jurisdiction *448 over this case, (2) it was an abuse of discretion to find that the commission has primary jurisdiction over this case, and (3) plaintiffs have stated facts sufficient to constitute multiple causes of action. Therefore, we will reverse the order of dismissal and remand this case for further proceedings.
BACKGROUND OF THE CASE
1. The Amended Complaint
a. The Alleged Facts of the Case
This suit was filed in October 2000. According to the amended complaint (hereinafter "the complaint"), defendants have enjoyed a virtual monopoly of all residential telephone customers within that part of California to which defendants provide telephone service. David and Jennifer Cundiff have been customers of defendants since at least 1984, while John and Eva DeBruin have been defendants' customers since at least 1972. Plaintiffs seek class certification for defendants' customers who have, within the four years prior to the filing of the complaint, paid defendants' monthly "equipment rental" charge, which plaintiffs describe as being a charge for "obsolete or non-existent telephones." Plaintiffs define "obsolete" as "any rotary or other telephone provided by [d]efendants for which the residential customer has been charged rental fees for more than five years."
The complaint alleges that in 1984, telephone companies were required to deregulate, which enabled telephone customers to purchase telephone equipment from sources other than their telephone service provider. Prior to that, residential telephone customers were required to rent telephones from their telephone service provider, such as GTE California. Between 1985 and 1988, other telephone companies, such as Pacific Bell, eliminated their telephone rental program; GTE California, however, continued to bill its customers for rental telephones.[5]
Since 1988, the rates set by defendants and the information provided by them, for residential customers, for telephone rentals, have not been regulated by the government. Since 1988, defendants have billed residential customers on a monthly basis for telephone rental by using the term "equipment rental" on their bills. Defendants' monthly statements, however do not explain the "equipment rental" charge. Nor have defendants periodically advised their customers that the equipment rental charge is for telephones. Defendants bill their customers for unreturned or unaccounted for-rental telephones, *449 particularly rotary telephones, that cost less than $20, even though the rental charges have added up to hundreds of dollars (and in some cases over a thousand dollars), without informing their customers of this ever-growing expense and of alternative options the customers have. Moreover, the rental rates are grossly high.
Plaintiffs assert that by characterizing the rental of such telephones as "equipment rental," defendants have deceptively represented to their customers that the customers possess such rental equipment and are actively using it, and that the rental has some value to them. Such characterization fails to inform customers of the cost v. benefit nature of the charge. Such business practices have unjustly enriched defendants by tens of millions of dollars, and the burden has fallen primarily on senior citizens because this is the largest group of customers who had rotary telephones.
b. Plaintiffs' Causes of Action
Based on this alleged failure of defendants to inform their residential customers of the true nature and benefit of their monthly "equipment rental" charges, plaintiffs alleged defendants violated certain sections of the Business and Professions Code, namely section 17200 et seq. (which addresses unfair competition), and section 17500 (which addresses false or misleading statements in connection with the provision of services and goods). Plaintiffs further alleged entitlement to relief under Civil Code section 1750 et seq. (the Consumers Legal Remedies Act) and Civil Code sections 1709 and 1710 (which address fraud and negligent misrepresentation). Plaintiffs prayed for certification of a class, declaratory and injunctive relief, damages, including prejudgment interest, attorney's fees, and other relief deemed appropriate by the court.
2. The Demurrer
In their demurrer, defendants asserted that under section 1759, the commission has exclusive jurisdiction to hear this case. Alternatively, defendants asserted that even if the trial court did not lack jurisdiction to hear it, the trial court should defer to the jurisdiction of the commission, under the primary jurisdiction doctrine, "because that agency has special competence and a regulatory interest in regulating the provision of rental telephone services" and because "[i]nvoking the primary jurisdiction doctrine would also advance the goals of uniformity and consistency." The demurrer was filed on November 27, 2000, and the hearing was ultimately held on April 19, 2001, at which time the court sustained the demurrer without leave to amend on the ground that section 1759 "gives the public utilities commission exclusive and/or primary jurisdiction over the alleged matters." Thereafter, plaintiffs dismissed the other defendants without prejudice (GTE Corporation and Bell Atlantic Corporation), and the case was dismissed by the trial court on June 4, 2001. This timely appeal followed.[6]
3. Defendants' Requests for Judicial Notice
Defendants sought and obtained judicial notice of administrative complaints filed with the commission, by two of defendants' customers, respecting defendants' policy of including a telephone rental charge on *450 such customers' bills and labeling the charge with a description that does not specifically identify it as being for rental of a telephone. In both of the complaints, the customers stated that defendants have been charging them such rental fees since or before 1987, and that they have been unaware that they were paying rent on telephones. They demanded a refund of the charges. One complaint was filed in January or February 2000, and GTE California was directed by the commission to answer it. That complaint was ultimately dismissed by the complainant, Wilma Ker, later that year. However, the record does not reflect whether the complaint was settled or adjudicated by the commission prior to the dismissal. The record reflects that the other complaint, by a Robert Kaveney, was filed in November 2001, and the commission directed Verizon California to answer it. That complaint has recently been adjudicated by the commission, and we address that adjudication later in this opinion.
Judicial notice was also taken of a February 2000 "consumer advisory" issued by the commission entitled "Renting Vs. Buying Your Phone." The written advisory notes that since the mid-1980's, some customers of telephone companies may have replaced their rental telephones with ones they purchased for themselves and yet did not return the rentals to the telephone company, in which case the customers may still be paying the company's monthly rental fee. The notice advises consumers who own their own telephone to review their current telephone bill to see if they are being charged for a rental telephone, to look for language such as "phone rental," or "equipment rental," and to contact their telephone company and stop the charges if they appear on the bill. The notice also advises consumers that if they are renting their telephone, they may wish to consider the cost effectiveness of returning it to the telephone company and purchasing their own telephone because renting a telephone for a year may be more expensive than purchasing one.
In February 2000, the commission also initiated a proceeding "to establish rules for protecting consumer rights in today's competitive telecommunications services marketplace," and invited the public to "file comments on the analyses and recommendations contained in a report prepared by our Telecommunications Division, and to present alternative ideas and proposals ... to promote consumer protection in the telecommunications industry." The commission's "Order Instituting Rulemaking" states that the Telecommunications Division sought to have the commission recognize certain consumer rights, including the right to (1) clear and complete terms and conditions for service agreements between consumers and a provider, and (2) be accurately billed for services they authorize.
CONTENTIONS ON APPEAL
On appeal, plaintiffs contend the commission does not have exclusive jurisdiction over their claims, and the primary jurisdiction doctrine neither bars this suit nor warrants a stay of it. Additionally, plaintiffs assert that the facts alleged in each of the counts in their complaint are sufficient to state a cause of action.
DISCUSSION
I
Standard of Review
A demurrer tests the sufficiency of the allegations in a complaint as a matter of law. (Pacifica Homeowners' Assn. v. Wesley Palms Retirement Community (1986) 178 Cal.App.3d 1147, 1151, 224 Cal. Rptr. 380.) We review the sufficiency of the challenged complaint de novo. (Coopers & Lybrand v. Superior Court (1989) 212 Cal.App.3d 524, 529, 260 Cal.Rptr. *451 713.) We accept as true the properly pleaded allegations of fact in the complaint, but not the contentions, deductions or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.) We also accept as true facts which may be inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403, 44 Cal. Rptr.2d 339.) We consider matters which may be judicially noticed, and we "give the complaint a reasonable interpretation, reading it as a whole and its parts in their context." (Blank v. Kirwan, supra, 39 Cal.3d at p. 318, 216 Cal.Rptr. 718, 703 P.2d 58.) We do not concern ourselves with whether the plaintiffs will be able to prove the facts which they allege in their complaint. (Parsons v. Tickner (1995) 31 Cal.App.4th 1513, 1521, 37 Cal.Rptr.2d 810.)
The judgment or order of dismissal must be affirmed if any of the grounds for demurrer raised by the defendants is well taken and disposes of the complaint. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967, 9 Cal. Rptr.2d 92, 831 P.2d 317.) It is error to sustain a general demurrer if the complaint states a cause of action under any possible legal theory. (Ibid.) It is an abuse of the trial court's discretion to sustain a demurrer without leave to amend if there is a reasonable possibility the plaintiffs can amend the complaint to allege any cause of action. To prove abuse of discretion, plaintiffs must demonstrate how the complaint can be amended. Such a showing can first be made to the reviewing court. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal. App.3d 1371,1386, 272 Cal.Rptr. 387.)
II
This Suit Is Authorized by Section 2106, Not Precluded by Section 1759
Section 2106 and section 1759 address different things. Section 1759 defines and limits the power of courts to pass judgment on, or interfere with, what the commission does. Section 2106, on the other hand, confirms the full power of the courts to pass judgment on what utilities do. Section 2106 "explicitly authorizes California courts to hear claims against public utilities for damages." (Cellular Plus, Inc. v. Superior Court (1993) 14 Cal.App.4th 1224, 1245, 18 Cal.Rptr.2d 308.) The similarity between the two statutes is that they both dictate which courts have jurisdiction to engage in these activities. Only appellate courts can review decisions and orders of the commission and interfere with its actions, whereas suits for relief against utilities can be brought in the trial court.
However, our Supreme Court has recognized that a plaintiffs attempt to obtain relief under section 2106 may have the effect of interfering with the commission's regulation of utilities. In Waters v. Pacific Telephone Co. (1974) 12 Cal.3d 1, 4, 114 Cal.Rptr. 753, 523 P.2d 1161, the court stated that section 2106 "must be construed as limited to those situations in which an award of damages would not hinder or frustrate the commission's declared supervisory and regulatory policies."[7] The plaintiff in Waters sued the defendant, under section 2106, for damages of $750,000, alleging defendant failed to provide her with adequate telephone service and such failure caused her damages. *452 The court held the plaintiffs action was barred by section 1759 because it interfered with the commission's policy "of limiting the liability of telephone utilities for ordinary negligence to a specified credit allowance, and [the commission] has relied upon the validity and effect of that policy in exercising its rate-making functions." (Id. at p. 10,114 Cal.Rptr. 753, 523 P.2d 1161.) In a subsequent case, the court stated: "Under the Waters rule, ... an action for damages against a public utility pursuant to section 2106 is barred by section 1759 not only when an award of damages would directly contravene a specific order or decision of the commission, i.e., when it would `reverse, correct, or annul' that order or decision, but also when an award of damages would simply have the effect of undermining a general supervisory or regulatory policy of the commission, i.e., when it would `hinder' or `frustrate' or `interfere with' or `obstruct' that policy." (San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 918, 55 Cal. Rptr.2d 724, 920 P.2d 669.) Thus, trial courts have concurrent jurisdiction with the commission "`over controversies between utilities and others not inimical to the purposes of the Public Utility Act' ( [Vila v. Tahoe Southside Water Utility (1965) 233 Cal.App.2d 469,] 477, [43 Cal. Rptr. 654], italics added.)" (San Diego Gas & Electric Co. v. Superior Court, supra, 13 Cal.4th at p. 944, 55 Cal.Rptr.2d 724, 920 P.2d 669.)
Assuming arguendo that the amount of money defendants charged each month as rent for telephones was approved by the commission, we do not perceive the thrust of plaintiffs' complaint to be a challenge to that amount. Nor do we perceive this as a suit challenging the commission's decision to allow defendants to rent telephones to their customers. Rather, plaintiffs are challenging the manner in which defendants billed them for rental of telephones, specifically, the alleged lack of information given to plaintiffs about the rental charge made each month by defendants. The gist of this suit is the alleged deception, intentional or negligent, resulting in plaintiffs unknowingly paying rent month after month, year after year for telephones they do not use, or for telephones whose value is less than the cumulative rent plaintiffs paid to defendants for them. The gist of the suit is that if plaintiffs had been adequately informed about the nature of the equipment rental charge that they repeatedly paid, they would have chosen to not pay it.
In this respect, the instant case is similar to Cellular Plus, Inc. v. Superior Court, supra, 14 Cal.App.4th 1224, 18 Cal. Rptr.2d 308, where two cellular telephone companies were sued by their customers and others for price-fixing. The plaintiffs alleged the two defendants engaged in wholesale and retail price-fixing of cellular telephone service in that the prices charged by the defendants had remained almost identical for several years because the defendants agreed to that status and had not sought lower rates. The court ruled that section 1759 did not preclude the plaintiffs' suit. It noted that the plaintiffs did not challenge the commission's right to set rates for cellular service, and did not seek to have the commission change its rates, but rather sought damages and injunctive relief, under the Cartwright Act, for the alleged price-fixing. (Id. at p. 1245, 18 Cal.Rptr.2d 308 et seq.)
Also of interest is Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 83 Cal. Rptr.2d 548, 973 P.2d 527, which, like the instant case, involved claims of unfair competition violative of section 17200 et seq. of the Business and Professions Code. The defendant was in the business of selling *453 cellular telephones and providing cellular telephone service. The plaintiffs' business was selling cellular telephones; they were not licensed to provide cellular telephone service. Plaintiffs alleged defendant engaged in unfair competition when it sold cellular telephones below cost and made up for the loss of money on such sales by its increased sales of services. Plaintiffs alleged they were harmed by defendant's marketing strategy because they were not able to fairly compete with defendant's below-cost sales of telephones. The Supreme Court observed that the commission had previously rescinded its prohibition against "bundling," that is, selling cellular equipment and service as a package and discounting the price of the package. The prohibition was lifted even though the commission was aware that such packaging could result in cellular equipment dealers being unable to compete if below-cost equipment sales were involved in the bundling, but the commission's order permitting bundling included a directive that state and federal laws respecting below-cost pricing and consumer protection were incorporated into its order. Despite this prior activity by the commission on the subject of bundling, the Supreme Court ruled that permitting the plaintiffs' case to go forward would not infringe on the commission's regulatory authority and responsibilities. (Id. at pp. 170-171, 83 Cal. Rptr.2d 548, 973 P.2d 527.) The court noted that the commission itself had two years earlier issued an opinion in which it stated that it is the courts, and not the commission that "`ha[ve] jurisdiction to determine violations of anti-trust laws.'" (Id. at p. 171, 83 Cal.Rptr.2d 548, 973 P.2d 527.) The commission went on to say that "`while [it] would, of course, review a below-cost allegation brought before [it] in an appropriate proceeding, [it is] certainly not the primary enforcer of below-cost pricing law.' [Citation.]" (Ibid.) To that we add our observation that the commission is not the primary enforcer of consumer protection laws in general.
Cellular Plus, Inc. and Cel-Tech Communications, Inc. support plaintiffs' assertion that section 1759 does not preclude this suit. Additionally, plaintiffs can reasonably argue that the suit actually furthers policies of the commission because it seeks to force defendants to bill their customers in such a way that the customers are fully informed of the nature of defendants' charges. Indeed, the abovementioned consumer advisory notice issued by the commission in February 2000 demonstrates both the commission's desire that consumers be fully informed about charges they may be paying for the rental of their telephones, and the commission's concern that consumers may not be aware they have been paying rental charges which they would not have paid if they knew the facts about such charges.
In Hartwell Corp. v. Superior Court (2002) 27 Cal.4th 256, 115 Cal.Rptr.2d 874, 38 P.3d 1098, the court reviewed suits by customers of certain water companies. The suits alleged the companies had, for many years, supplied the customers with water that did not meet the government's water quality standards and the commission's standards for water quality service, resulting in personal injuries to the plaintiffs. Plaintiffs also, in effect, challenged the adequacy of the standards. The court ruled that while the challenge to the standards themselves was barred because it attempted to interfere with a broad regulatory program of the commission, the portion of the suit seeking damages for defendants' alleged failure to meet water quality standards was not barred by section 1759. (Id. at pp. 275-279, 115 Cal.Rptr.2d 874, 38 P.3d 1098.) The court observed that any redress of alleged violations that the commission itself might pursue would be "essentially *454 prospective in nature" because the statutory remedies the commission can seek are "designed to stop the utilities from engaging in current and ongoing violations and do not redress injuries for past wrongs." (Id. at p. 277, 115 Cal.Rptr.2d 874, 38 P.3d 1098.) The court stated that because the commission cannot award damages for past violations, the plaintiffs' causes of action for damages "would not interfere with the [commission] in implementing its supervisory and regulatory policies to prevent future harm." (Ibid.)
In the instant case, defendants have not shown that the commission has authority to give plaintiffs the relief that plaintiffs can obtain under section 2106, that is, restitution or damages based on defendants' alleged violations of the aforecited provisions of the Business and Professions Code and the Civil Code, including exemplary damages for willful wrongful acts. Although defendants contend that section 734 of the Public Utilities Code can be applied here to afford such relief, we reject that contention.[8] Section 734 addresses complaints filed with the commission concerning rates charged for products and services, and it permits the commission to order a public utility to make reparations to a person who files such a complaint if the commission determines the public utility "has charged an unreasonable, excessive, or discriminatory amount therefore in violation of any of the provisions of [certain portions of the Public Utilities Act]." (§ 734, italics added.) Here, plaintiffs are not challenging defendants' rates, only their billing disclosure practices. Moreover, defendants do not explain what violation of the provisions of the Public Utilities Act they are alleged to have committed that would make section 734 applicable.
Nor have defendants persuaded us that this case is precluded by the commission's having already been presented with administrative claims, by two of defendants' customers, that challenge the very billing practice at issue in the instant case. As noted previously, it does not appear from the record whether one of the claims was even addressed by the commission prior to its dismissal, and while the other claim (filed by Robert Kaveney) was recently decided by the commission, that decision has no impact on this case.[9]
*455 Moreover, even when the commission's investigation of a public utility results in a favorable outcome for the utility, such a determination does not necessarily preclude a suit from going forward against that utility. In Hartwell Corp. v. Superior Court, supra, 27 Cal.4th 256, 115 Cal.Rptr.2d 874, 38 P.3d 1098, the commission made an investigation of water companies, including the defendant water companies in that suit, after the plaintiffs filed the suit charging personal injuries from unsafe drinking water. Such investigation caused the commission to make a retrospective finding that the water companies had, for the previous 25 years, substantially complied with the drinking water standards of California's State Department of Health Services. Nevertheless, the Hartwell court said the finding was not part of an "identifiable 'broad and continuing supervisory or regulatory program of the commission' [citation], related to such routine [commission] proceedings as ratemaking" and rulemaking; nor was the commission's determination part of an enforcement proceeding. (Id. at pp. 276-277, 115 Cal.Rptr.2d 874, 38 P.3d 1098.) Thus, said the court, although an award by a jury, supported by a finding that the defendants did violate governmental water quality standards, would be contrary to the commission's own decision, "it would not hinder or frustrate the [commission's] declared supervisory and regulatory policies, [and u]nder the provisions of section 1759, it would also not constitute a direct review, reversal, correction, or annulment of the decision itself. Accordingly, such a jury verdict would not be barred by the statute." (Id, at pp. 277-278, 115 Cal.Rptr.2d 874, 38 P.3d 1098.) Additionally, said the court, although a commission finding of past compliance, or noncompliance, might be part of a future remedial/regulatory program, such program would not be interfered with by the plaintiffs' suit since *456 the remedies and enforcement options available to the commission do not include awarding damages to persons harmed by water companies that did not comply with drinking water standards.[10](Id. at p. 277, 115 Cal.Rptr.2d 874, 38 P.3d 1098.)
Here, defendants have not demonstrated that if the commission were to find that their method of billing for telephone rentals complied with the commission's 1985 decision/interim order and opinion for billing such rentals (see fn. 5, ante), such a finding would be part of a broad and continuing supervisory or regulatory program related to routine commission proceedings such as ratemaking or rulemaking. In contrast is the case of Day v. AT & T Corp. (1998) 63 Cal.App.4th 325, 74 Cal. Rptr.2d 55, which impacted the commission's ratemaking program. The plaintiffs in Day, who alleged deceptive advertising in the way the defendants sold prepaid telephone cards to the public, were precluded from stating a cause of action for damages because under the "filed rate doctrine," plaintiffs were presumed to know the rates the defendants had filed with the Federal Communications Commission, and therefore plaintiffs could not have suffered damages when they paid the filed rates.[11]
We thus conclude that section 1759 does not preclude plaintiffs' case from proceeding under section 2106. This case does not challenge the right of telephone utilities to rent telephones to their customers; nor does it challenge rates. It would not have the effect of reversing, correcting or annulling any decision or order of the commission that we know of, including the commission's 1985 decision/interim opinion and order concerning the rental of telephones, by telephone utilities, to their customers.
III
The Doctrine of Primary Jurisdiction Does Not Prohibit This Case From Going Forward
The doctrine of primary jurisdiction of regulatory agencies (also known as the doctrines of prior resort and preliminary jurisdiction) is concerned with situations where an issue should be addressed by an administrative agency for its initial determination because there is a need for (1) uniformity of application of administrative regulations and uniformity of answers to administrative questions, and (2) the expert and specialized knowledge of the *457 relevant agency, i.e., the expertise that a regulatory agency can bring to a conflict. (Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 386-390, 6 Cal. Rptr.2d 487, 826 P.2d 730.) In Farmers Ins. Exchange, the court examined several federal cases that addressed the doctrine. In two cases, the doctrine was found to require redress initially to an agency. One case concerned allegedly unreasonable rates charged by a common carrier for interstate commerce, and the other concerned construction of a railroad tariff that involved an appreciation of intricate matters of transportation. Cases not requiring examination by an agency in the first instance included a suit that addressed the interpretation of a railway tariff where the expertise of a regulatory agency and resolution of disputed facts were not involved, and a suit that involved a plaintiff who was sold a confirmed airline ticket on an overbooked flight, and who alleged fraudulent misrepresentation. (Ibid.)
"[T]he primary jurisdiction doctrine advances two related policies: it enhances court decisionmaking and efficiency by allowing courts to take advantage of administrative expertise, and it helps assure uniform application of regulatory laws. [Citations.]" (Farmers Ins. Exchange v. Superior Court, supra, 2 Cal.4th at p. 391, 6 Cal.Rptr.2d 487, 826 P.2d 730.) There is no rigid formula for when the doctrine is applied. "Instead, resolution generally hinges on a court's determination of the extent to which the policies ... are implicated in a given case [Citations.]." (Ibid.) Courts will also consider whether applying the doctrine presents an inadequate remedy to litigants, such as whether there would be an unreasonable expense and delay. (Id. at pp. 391-392, fn. 9, 6 Cal.Rptr.2d 487, 826 P.2d 730.) "This discretionary approach leaves courts with considerable flexibility to avoid application of the doctrine in appropriate situations, as required by the interests of justice." (Id. at pp. 391-392, 6 Cal.Rptr.2d 487, 826 P.2d 730, fn. omitted.)
The doctrine of primary jurisdiction is related to the doctrine of exhaustion of administrative remedies in that both involve the question whether an administrative agency should first hear (or rehear) a dispute prior to it being presented to a court. (Farmers Ins. Exchange v. Superior Court, supra, 2 Cal.4th at p. 390, 6 Cal.Rptr.2d 487, 826 P.2d 730.) The exhaustion of administrative remedies doctrine is applied where an administrative agency must be the first body to consider a matter; the doctrine of primary jurisdiction applies where a claim can originally be addressed in a court, but would be better addressed first by an administrative body. (Ibid.) The latter doctrine does not preclude judicial consideration of the case, but rather suspends judicial action pending the administrative agency's views. (Ibid; Wise v. Pacific Gas & Electric Co. (1999) 77 Cal.App.4th 287, 295-296, 91 Cal. Rptr.2d 479.)
Applying these parameters of the primary jurisdiction doctrine, we conclude that the trial court abused its discretion when it determined the doctrine should be applied here to require plaintiffs to first seek relief from the commission. The subject of this suit, whether addressed in causes of action based on statutes or on basic common law, is deceptiondefendants' alleged intentional or negligent misrepresentation about the true nature of their equipment rental charges. This is not a topic about which the commission would have more expertise than the trial court, or even as much expertise. Actions based on alleged deceit are not known to be within the technical expertise of the commission. Nor is there evidence that the commission "has at [its] disposal a *458 `pervasive and self-contained system of administrative procedure' [citation] to deal with the precise questions involved herein." (Farmers Ins. Exchange v. Superior Court, supra, 2 Cal.4th at p. 396, 6 Cal. Rptr.2d 487, 826 P.2d 730.)
Moreover, this case, as it is presented by plaintiffs, does not involve matters that require a uniformity in application of regulatory law. It does not involve, for example, rates, but rather truth in the charging and billing of such rates, and it involves what these plaintiffs knew about the "equipment rental" charge they paid.
We are unimpressed with defendants' argument that the commission has initiated proceedings to establish rules for protecting consumer rights. Defendants have reference to the commission's February 2000 "order initiating rulemaking." Defendants have not advised us how this specific activity of the commission relates to plaintiffs' contention that defendants' prior billing gives rise to a cause of action. Regulations that are the result of such commission proceedings would only affect future bills. Moreover, even if the commission's activities could affect plaintiffs' rights vis-à-vis these decades-old bills, for how long should plaintiffs have to wait until the commission finalizes the activities on its 2000 interim rules?
For all of these reasons, and since it is the courts, and not the commission, that can award damages to plaintiffs, this case should proceed in the trial court.
IV[**]
DISPOSITION
The order of dismissal from which plaintiffs have appealed is reversed and the cause is remanded for further proceedings consistent with the views expressed herein. Costs on appeal to plaintiffs.
We Concur: KITCHING, and ALDRICH, JJ.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of part IV of the Discussion.
[**] Werdegar, J., and Chin, J., did not participate therein.
[1] According to the parties, GTE California and Verizon California are actually the same entity, in that the latter was formerly known as the former, with the name change occurring in June 2000.
[2] In our use of the word "plaintiffs" throughout this opinion, we include the members of the proposed class.
[3] Public Utilities Code section 1759 (" § 1759") states: "(a) No court of this state, except the Supreme Court and the court of appeal, to the extent specified in this article, shall have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties, as provided by law and the rules of court.
"(b) The writ of mandamus shall lie from the Supreme Court and from the court of appeal to the commission in all proper cases as prescribed in Section 1085 of the Code of Civil Procedure."
[4] Public Utilities Code section 2106 (" § 2106") states in relevant part: "Any public utility which does, causes to be done, or permits any act, matter, or thing prohibited or declared unlawful, or which omits to do any act, matter, or thing required to be done, either by the Constitution, any law of this State, or any order or decision of the commission, shall be liable to the persons or corporations affected thereby for all loss, damages, or injury caused thereby or resulting therefrom. If the court finds that the act or omission was willful, it may, in addition to the actual damages, award exemplary damages. An action to recover for such loss, damage, or injury may be brought in any court of competent jurisdiction by any corporation or person." (Italics added.)
[5] The trial court judicially noticed exhibit B to defendants' demurrer. Exhibit B is an August 1985 decision of the commission respecting the detariffing of "customer premises equipment" ("CPE"). Telephone companies were directed to dispose of the telephones being used by their customers by abandoning them in place (that is, transferring title to the customers) or by transferring the equipment to nonregulated accounts, departments or subsidiaries, or by a combination of such methods. After detariffing CPE, telephone companies could bill their customers for rental of CPE provided that the charges are "separately identified." (The phrase "separately identified" appears in the commission's interim order. In its related "interim opinion," the commission also used the phrase "separately stated and clearly identified" in its discussion of how telephone rental charges should be made by telephone companies.) Additionally, the companies were to have a sales program for telephones, including bill inserts or mailers to explain the program, and installment purchase plans having 12 monthly installments with no interest. With those various options, the commission concluded that a uniform statewide plan for detariffing CPE was not required.
The parties treat the interim opinion and the interim order as the operative opinion and order for this case.
[6] Plaintiffs appealed both from the order of dismissal and from the minute order sustaining respondent's demurrer without leave to amend. The latter is not an appealable order. (Timberidge Enterprises, Inc. v. City of Santa Rosa (1978) 86 Cal.App.3d 873, 878, 150 Cal. Rptr. 606.)
[7] The Waters court noted that section 2106 does not insulate such policies of the commission from review. Rather, under Public Utilities Code section 1756 et seq., reviewing courts have "jurisdiction to review . . . the lawfulness of any order or decision of the commission in accordance with the procedures set forth in those sections." (Waters v. Pacific Telephone Co., supra, 12 Cal.3d at pp. 4-5, 114 Cal.Rptr. 753, 523 P.2d 1161.)
[8] Section 734 states: "When complaint has been made to the commission concerning any rate for any product or commodity furnished or service performed by any public utility, and the commission has found, after investigation, that the public utility has charged an unreasonable, excessive, or discriminatory amount therefore in violation of any of the provisions of this part, the commission may order that the public utility make due reparation to the complainant therefore, with interest from the date of collection if no discrimination will result from such reparation. No order for the payment of reparation upon the ground of unreasonableness shall be made by the commission in any instance wherein the rate in question has, by formal finding, been declared by the commission to be reasonable, and no assignment of a reparation claim shall be recognized by the commission except assignments by operation of law as in cases of death, insanity, bankruptcy, receivership, or order of court."
[9] Robert Kaveney alleged in his administrative complaint that defendants are deceptive in the way they label their telephone rental charge, and therefore he was not aware of the nature of such charges when he paid them. He further alleged that he has provided his own telephone ever since telephone customers were given permission to do so, and he asserted a right to a refund of all telephone rental charges back to that date.
In deciding the complaint, the commission (1) noted Verizon California stated in its defense that it had communicated in writing with its customers to explain their options respecting rental of customer premises equipment, and had done so in "separate mailings, bill inserts, bill messages, brochures and references written in telephone directories," and (2) stated it had "no reason to conclude [Kaveney] did not receive the notices that Verizon California sent to all customers." On the other hand, said the commission, Verizon California did not present evidence Kaveney had in his possession, after 1987, a telephone owned by GTE California, nor evidence that Verizon California checked on the existence of the instrument over the years. The commission rejected Kaveney's assertion he should receive a refund of telephone rental fees going back to 1987. The commission said that Public Utilities Code section 736 precludes giving Kaveney more than 36 months of telephone rental charge reparations absent a tolling of that three-year statute of limitations, and in Kaveney's case, the commission had no evidence that he did not receive notice of his telephone equipment options (that is, his right to rent or purchase the telephone from defendants, or obtain a telephone from another source), after the issuance of the commission's August 1985 directive to telephone companies to provide their customers with those three alternatives.
Section 736 provides that complaints for damages resulting from violations of Public Utilities Code sections 494 or 532 must be filed "within three years from the time the cause of action accrues." Sections 494 and 532 prohibit common carriers (§ 494) and public utilities (§ 532) from charging rates that are different from those provided in their tariffs. However, as noted earlier, plaintiffs do not challenge defendants' rates for renting telephones; they challenge the manner in which defendants bill those rates.
In its decision, the commission did not adjudicate the issue whether defendants' failure to fully describe, in their bills, the nature of their "equipment rental" charge constitutes deceptive billing and violates the provisions in the Civil Code and Business and Professions Code that are cited by plaintiffs in their complaint as a basis for their suit against defendants. Nor did the commission give an indication that its findings were part of a broad and continuing supervisory or regulatory policy or program (San Diego Gas & Electric Co. v. Superior Court, supra, 13 Cal.4th at p. 918, [55 Cal.Rptr.2d 724, 920 P.2d 669]; Hartwell Corp. v. Superior Court, supra, 27 Cal.4th at p. 276-277, [115 Cal.Rptr.2d 874, 38 P.3d 1098]).
[10] Thus, the possibility that the commission, at some future time, may enact a remedial program that addresses confusing and not adequately informative billing does not preclude the instant action from going forward. While it is true that the commission has undertaken to formulate rules regarding telephone companies' billing of services that customers authorize (see discussion about defendants' request for judicial notice, ante), it does not appear to this court that billing matters such as those that are the focus of this suit are also at issue in the formulation of such rules. Moreover, this suit seeks damages and other relief for past billing; plaintiffs do not seek to have the court dictate the precise format of defendants' future bills; rather, plaintiffs seek a finding that the manner in which defendants billed in the past violated various laws.
[11] Although the plaintiffs in Day could not recover damages, the court held the presumption required by the filed rate doctrine did not preclude a cause of action for an injunction to stop defendants' alleged misleading practices. That is, the defendants were entitled to charge plaintiffs their filed rates, but the filed rate doctrine did not entitle them to advertise their prepaid telephone cards in such a manner that they violated consumer protection laws (Bus. & Prof.Code, §§ 17200 et seq. and 17500 et seq.). The court said that granting plaintiffs injunctive relief would not have the effect of permitting them to pay less than defendants' filed rates, and it would not require defendants to charge more or less than such rates. (Day v. AT & T Corp., supra, 63 Cal.App.4th at pp. 329, 336, 74 Cal.Rptr.2d 55.)
[**] See footnote *, ante. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260596/ | 632 F.Supp. 713 (1984)
UNITED STATES of America, Plaintiff,
v.
Stanley P. GIMBEL, Defendant.
No. 84-CR-10.
United States District Court, E.D. Wisconsin.
August 23, 1984.
On Motion For Reconsideration And Clarification March 12, 1985.
*714 G. Roger Markley, Sp. Asst. U.S. Atty., Chicago, Ill., for plaintiff.
William M. Coffey, Coffey Coffey & Geraghty, Milwaukee, Wis., for defendant.
DECISION AND ORDER
CURRAN, District Judge.
I.
Background and Procedure
On January 17, 1984, the grand jury returned a sixteen-count indictment against the defendant, Stanley P. Gimbel, charging him with multiple criminal violations of 18 U.S.C. §§ 2[1] & 1001[2] and 31 U.S.C. *715 § 5313[3] & 5322.[4] Count One of the indictment states that Gimbel, an attorney who represents clients in criminal and tax matters, knowingly, willfully and intentionally falsified, concealed and covered up by a scheme and device material facts which are within the jurisdiction of an agency or department of the United States Government, namely the Internal Revenue Service. (See Appendix A) The remaining counts charge specific instances of violations which occurred between April, 1982 and May, 1983. (See Appendix B)
In common parlance, the government is accusing Gimbel of devising and carrying out a money laundering scheme for certain of his clients, some of whom were engaged in criminal activities. Under this scheme Gimbel or someone acting on his direction would either withdraw or deposit currency[5] totalling over $10,000.00 in a single day *716 through the trust account which Gimbel's law firm maintained at a Milwaukee bank. A financial institution[6] such as a bank[7] is required to file a currency transaction report (CTR) with the Internal Revenue Service for all currency transactions exceeding $10,000.00. Since 1981, banks have been asked to aggregate multiple transactions made by one person in the course of a single day if they are aware of them. The indictment alleges that Gimbel attempted to evade these reporting requirements by breaking up the transactions into amounts of less than $10,000.00 and making multiple deposits or withdrawals in a single day; by naming only himself or his law firm's trust account as the party for whom the transactions were being made; and by advising others to use false names when opening bank accounts and endorsing checks. The indictment implies that the motive for this scheme was to conceal the origin of currency garnered from criminal activity and to evade paying income taxes. Gimbel is also said to have counseled these clients to underreport their income for tax purposes.
On April 30, 1984 the magistrate issued a Recommendation and Order which upheld the Indictment except that portion of Count I, ¶ 5(e) which refers to the underreporting of income. This clause was struck as prejudicial and irrelevant surplusage. The defendant then filed an Objection to and Appeal from Magistrate's Recommendation and Order of April 30, 1984, on the following grounds:
*717 1) the indictment contains misstatements of the law;
2) Count I fails to allege an offense and is insufficient;
3) Count I is unconstitutionally vague;
4) Count I is duplicitous;
5) the charge in Count I under 18 U.S.C. §§ 2 & 1001 is unconstitutional;
6) Count I impermissibly merges with Counts II through XVI;
7) Counts II through XVI fail to allege an offense;
8) Counts II and XVI are unconstitutionally vague;
9) Sections 5313 and 5322 of Title 31 of the United States Code are unconstitutional on their face and/or as applied.
The government appeals from that part of the Magistrate's Recommendation and Order which strikes as prejudicial and irrelevant surplusage that part of Count I, ¶ 5(e) of the Indictment which alleges that the defendant counseled individuals "to report income to the Internal Revenue Service in an amount different than actually received by those persons as an alternative to such evasion and falsity." The government contends that this clause is "highly relevant" toward showing the purpose of the scheme it claims the defendant devised. See Government's Objection to and Appeal from Magistrate's Recommendation and Order of April 30, 1984 at 2.
II.
The Defendant's Objections
The defendant's motions all challenge the sufficiency of the Indictment. Those challenging the constitutionality of the law allegedly violated and those which say that the Indictment fails to state the elements of a crime go to the validity of this court's jurisdiction. "[A] federal court has jurisdiction to try criminal cases only when the information or indictment alleges a violation of a valid federal law; and it is ultimately the court's responsibility to ensure that jurisdiction exists." United States v. Saade, 652 F.2d 1126, 1134 (1st Cir.1981). The motions to dismiss based on duplicity, multiplicity, surplusage, impermissible merger and vagueness of the charges go to the form of setting forth these charges in the Indictment.
The test for the sufficiency of an indictment is whether "[i]t states the elements of the offense intended to be charged with particularity sufficient to apprise the accused of what he must be prepared to meet, and to enable the accused to plead a judgment under the indictment as a bar to any subsequent prosecution for the same offense." Russell v. United States, 369 U.S. 749, 763-64, 82 S.Ct. 1038, 1046-47, 8 L.Ed.2d 240 (1962); United States v. Garcia-Geronimo, 663 F.2d 738, 743 (7th Cir. 1981); United States v. London, 550 F.2d 206, 210 (5th Cir.1977); United States v. Logwood, 360 F.2d 905, 907 (7th Cir.1966); United States v. Raineri, 521 F.Supp. 16, 22 (W.D.Wis.1980). The court may properly decide all questions of law raised by the defendant as grounds for dismissing the indictment. United States v. Jones, 542 F.2d 661, 664-65 (6th Cir.1976); United States v. Higgins, 511 F.Supp. 453, 454 (W.D.Ky.1981).
Because the court must have jurisdiction before this case can proceed, the threshold issue in this appeal from the Magistrate's Recommendation and Order is whether the laws and regulations the defendant is charged with violating are constitutional and, if so, whether the Indictment sufficiently alleges the necessary elements of the crimes charged. See United States v. Conlon, 481 F.Supp. 654, 660 (D.D.C.1979), aff'd in part rev'd. in part, 628 F.2d 150 (D.C.Cir.1980), appeal after remand, 661 F.2d 235 (1981), cert. denied, 454 U.S. 1149, 102 S.Ct. 1015, 71 L.Ed.2d 304 (1982). Although the defendant mounts a due process challenge to the statutes he is charged with violating, the rule of strict necessity would have this court attempt to resolve this motion to dismiss by evaluating the sufficiency of the Indictment rather than by declaring any of the laws in question to be unconstitutional. See Ashwander v. Tennessee Valley Authority, 297 U.S. 288, *718 341, 56 S.Ct. 466, 480, 80 L.Ed. 688 (1936) (Brandeis, J., concurring).
The defendant argues that sections 5313 and 5322 of Title 31 of the United States Code are unconstitutional on their face and/or as applied because they "do not afford a person of reasonable intelligence notice of what they prohibit or require." Defendant's Objection to and Appeal from Magistrate's Recommendation and Order of April 30, 1984 at 23. Following this line of reasoning, the defendant concludes that 18 U.S.C. §§ 2 & 1001, as applied, are also unconstitutionally vague. "If the financial institution has no legal obligation to file such a CTR it cannot be a crime for an individual `to cause' the financial institution to fail to file the CTR." Id. at 22.
The government responds that the carrying out of the scheme allegedly devised by the defendant contradicts his claim that he had no notice or idea that his actions were prohibited. See Government's Response to Defendant's Memorandum Brief at 7. The government also contends that other courts have already found the law in question to be constitutional. See, e.g., California Bankers Association v. Shultz, 416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed.2d 812 (1974); United States v. Dichne, 612 F.2d 632 (2d Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 760 (1980); United States v. Fitzgibbon, 576 F.2d 279 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978). In addition, courts have recognized similar offenses under Title 31 of the United States Code. See, e.g., United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983); United States v. Dickinson, 706 F.2d 88 (2d Cir. 1983); United States v. Kattan-Kassin, 696 F.2d 893 (11th Cir.1983); United States v. Dichne, 612 F.2d 632 (2d Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 760 (1980); United States v. Thompson, 603 F.2d 1200 (5th Cir.1979); United States v. Beusch, 596 F.2d 871 (9th Cir.1979); United States v. Fitzgibbon, 576 F.2d 279 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978).
Reviewing the charges in the Indictment, it appears that the defendant could not be charged with a crime under only one of the statutes cited. The charging sections depend on interlocking two or more federal laws. The cornerstone of the charges, however, is section 5313 of Title 31 of the United States Code. Under that section a financial institution must file a CTR when a person's[8] currency deposit or withdrawal exceeds $10,000 in a single day. If the CTR contains false statements or if material facts are concealed so that no CTR is filed, the person responsible can be charged with filing a false statement under 18 U.S.C. § 1001. Even though a person does not have a direct legal duty to file a CTR, he can be charged as a principal if he causes another not to carry out that duty. 18 U.S.C. § 2. Thus, if section 5313 is not applicable, the defendant cannot be charged under that section, nor under the penalty enhancement section, 31 U.S.C. § 5322, nor under 18 U.S.C. §§ 2 & 1001. Consequently, this court must first rule on the constitutionality of section 5313 in the context of this Indictment.
The defendant asked the magistrate to consider certain discovery materials in regard to his motion to dismiss the Indictment. See Defendant's Objection to and Appeal from Magistrate's Recommendation and Order of April 30, 1984 at 22. The allegations contained in an indictment must be taken as true. United States v. Mann, 517 F.2d 259, 266 (5th Cir.1975). But, in general, a court ruling on the sufficiency of an indictment is limited to considering only the face of the indictment. Id. at 266-67. But see United States v. Jones, 542 F.2d 661, 664 (6th Cir.1976) ("Rules 12(e) and (a) [of the Federal Rules of Criminal Procedure] clearly envision that a district court may make preliminary findings of fact necessary to decide the questions of law presented by pre-trial motion so long as the *719 court's findings on the motion do not invade the province of the ultimate finder of fact."). The court believes that the discovery materials in question are unnecessary to determine the questions of law at issue here.
Sections 5313 and 5322 of Title 31 of the United States Code are part of what is popularly called the Bank Secrecy Act of 1970. The constitutionality of the Act has already been challenged in one case decided by the United States Supreme Court, California Bankers Association v. Shultz, 416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed.2d 812 (1974). The appeal to the Supreme Court was filed on behalf of the California Bankers Association, the Security National Bank, the American Civil Liberties Union (ACLU) as a depositor in a bank subject to the Act and as a representative of its bank customer members, and on behalf of certain bank customers. The appeal challenged the recordkeeping requirements of Title I of the Act and the reporting requirements of Title II of the Act on three grounds: (1) that the requirements constitute an unreasonable search and seizure in violation of the Fourth Amendment; (2) that the requirements constitute a coerced creation and retention of documents in violation of the Fifth Amendment privilege against compulsory self-incrimination; and (3) that the requirements violate the First Amendment rights of free speech and free association. Id. at 43, 94 S.Ct. at 1508. The Court, in an opinion written by Justice Rehnquist, declined to decide whether the Association had standing to make these claims. Id. at 44, 94 S.Ct. at 1509. But the Court did decide that the depositor plaintiffs and the ACLU did not have standing to assert their claims because they were not ripe, that is, these parties had not yet suffered any injury. Id. at 69, 76, 94 S.Ct. at 1521, 1524-25. Thus, the judgment of the Court, upholding the Act against all these constitutional challenges was narrowly drawn.
At the outset the Court stated that "we think it important to note that the Act's civil and criminal penalties attach only upon violation of regulations promulgated by the Secretary; if the Secretary were to do nothing, the Act itself would impose no penalties on anyone." Id. at 26, 94 S.Ct. at 1500. The government's position at that time essentially mirrored this view:
[S]ince only those who violate these regulations may incur civil or criminal penalties, it is the actual regulations issued by the Secretary of the Treasury, and not the broad authorizing language of the statute, which are to be tested against the standards of the Fourth Amendment; and that when so tested they are valid.
Id. at 44, 94 S.Ct. at 1509.
The District Court which heard California Bankers ruled that the domestic reporting requirements were "an invasion of a citizen's right of privacy as amounts to an unreasonable search within the meaning of the Fourth Amendment." Id. at 64, 94 S.Ct. at 1519. But the Supreme Court would not let the plaintiffs below speculate as to hypothetical injuries:
Since, as we have observed earlier in this opinion, the statute is not self-executing, and were the Secretary to take no action whatever under his authority there would be no possibility of criminal or civil sanctions being imposed on anyone, the District Court was wrong in framing the question in this manner. The question is not what sort of reporting requirements might have been imposed by the Secretary under the broad authority given him in the Act, but rather what sort of reporting requirements he did in fact impose under that authority.
Id. Taking this restricted approach, the Court decided that "the Secretary's requirements for the reporting of domestic financial transactions abridge no Fourth Amendment right of the banks themselves." Id. at 66, 94 S.Ct. at 1520. The Fourth Amendment challenge of the depositors was not considered because "the depositor plaintiffs lack standing to challenge the domestic reporting regulations, since they do not show that their transactions are required to be reported." Id. at 68, 94 *720 S.Ct. at 1521. Consequently, the majority did not rule on the issue of whether the domestic reporting requirements of the Act are constitutional in relation to depositors, so this case cannot be used as authority to say that the Act has passed constitutional muster in this respect.
Justice Powell, with whom Justice Blackman joined concurring, made an additional observation on the domestic reporting requirements:
A significant extension of the regulations' reporting requirements, however, would pose substantial and difficult constitutional questions for me. In their full reach, the reports apparently authorized by the open-ended language of the Act touch upon intimate areas of an individual's personal affairs. Financial transactions can reveal much about a person's activities, associations, and beliefs. At some point, governmental intrusion upon these areas would implicate legitimate expectations of privacy.
Id. at 78-79, 94 S.Ct. at 1525-26.
Justice Douglas, dissenting from the Court's opinion, was sharply critical of the Act's reporting requirements:
We cannot avoid the question of the constitutionality of the reporting provisions of the Act and of the regulations by saying they have not yet been applied to a customer in any criminal case. Under the Act and regulations the reports go forward to the investigative or prosecuting agency on written request without notice to the customer. Delivery of the records without the requisite hearing of probable cause breaches the Fourth Amendment.
Id. at 90, 94 S.Ct. at 1531 (footnote omitted). In separate dissents, Justices Brennan and Marshall agreed that the reporting requirements are unconstitutional.
In the two other cases cited by the government, individuals challenged the foreign reporting provision of the Bank Secrecy Act on the ground that it violated their Fifth Amendment privilege against self-incrimination. See United States v. Dichne, 612 F.2d 632 (2d Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 760 (1980). See also United States v. Fitzgibbon, 576 F.2d 279, 285 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978) ("We do not here decide constitutional questions raised because they are not properly before us."). In Dichne the Second Circuit affirmed the trial court's ruling that the reporting requirements did not violate the defendant's right not to incriminate himself because transporting over $5,000 out of the country is "not per se an illegal act" and because the law is aimed at the general public and not at a "highly selective group inherently suspect of criminal activities." Dichne, 612 F.2d at 638. The court relied on a lower court decision which held that because these reports were required when crossing international boundaries, they involve substantial interests of the United States government. These interests outweigh the interest of an individual in avoiding a requirement which presents only a "possibility" of self-incrimination. This decision was later reversed by the Second Circuit. United States v. San Juan, 405 F.Supp. 686, 694-95 (D.Vt.1975), rev'd, 545 F.2d 314 (2d Cir.1976).
The Gimbel case can be distinguished from those cited by the government in that it involves a due process challenge to the domestic reporting provisions of the Bank Secrecy Act. Under the standards set forth in California Bankers, Gimbel would have standing as a customer of a financial institution to attack the constitutionality of the Act because the Indictment alleges that some of his transactions should have been reported. California Bankers Association, 416 U.S. at 68, 94 S.Ct. at 1520-21.
Gimbel is challenging section 5313 on the ground that if it does cover the type of transactions made by him, it is unconstitutionally vague it does not put him on notice that it applies to him. Although, in general, a citizen is charged with knowledge of the law, it is the defendant's position that the law and regulations do not require a lawyer to name the real parties in *721 interest to transactions in currency[9] made through his trust fund. There is no claim that the financial institution notified customers of a contrary interpretation. The Indictment mentions that on at least one occasion "Gimbel assisted in filling out the [CTR] report," but it does not allege that any of the financial institutions involved notified customers of the domestic reporting requirements. Indictment at Count I, ¶ 5(d).
In California Bankers the majority said that:
[W]e do not address ourselves to the necessity of notice to those bank customers whose transactions must be reported. The fact that the regulations do not require the banks to notify the customer of the report violates no constitutional right of the banks, and the banks in any event are left free to adopt whatever customer notification procedures they desire.
California Bankers Association, 416 U.S. at 70, 94 S.Ct. at 1521-22. In San Juan the Second Circuit held that the government should make some effort to bring the foreign reporting requirement to the traveler's attention. United States v. San Juan, 545 F.2d at 319. However, more recently, the Tenth Circuit held that a bank's failure to notify a customer that a CTR will be filed does not violate the customer's expectation of privacy under the Fourth Amendment or his privilege against self-incrimination under the Fifth Amendment. United States v. Kaatz, 705 F.2d 1237, 1242 (10th Cir.1983).
This suggests that the government is not particularly anxious to have bank customers know that the banks are filing the CTR's, lest the customers take the obvious step and structure their transactions into amounts which are unreportable. If this structuring causes the financial institution to file an inaccurate CTR or no CTR, the person responsible can be charged with a crime under certain circumstances. See, e.g., United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983).
The Indictment does not allege that the manner in which Gimbel structured his currency transactions caused a bank not to file a CTR for his law firm's trust account. Counts II through XVI do state that: "This currency was owned by a person or persons other than STANLEY P. GIMBEL." Thus, the government is charging either that an inaccurate CTR was filed which did not name the true owner of the currency or that because the true owner or owners of the currency were not revealed, no CTR was filed on their behalf. The government derives the "requirement" that the true party in interest be identified from that portion of 31 U.S.C. § 5313 which states:
A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made.[10]
*722 On its face, this sentence could be interpreted as requiring that the identity of the true owner of the currency be revealed. However, as California Bankers stated, no part of this statute is self-executing, so the court must examine the implementing regulations to determine whether they would require a financial institution to report the identity of the true party in interest to a currency transaction made through Gimbel's law firm trust account. The key regulation in this regard is found in 31 C.F.R. § 103.22(a) (1982), which states, in part:
Each financial institution shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution, which involves a transaction in currency of more than $10,000. Such reports shall be made on forms prescribed by the Secretary and all information called for in the forms shall be furnished.
Internal Revenue Service Form 4789 is the document the financial institutions are required to file.[11] This form is reproduced here as Court Exhibit A.[12] Part I of this form asks for the identity of the individual who conducts the transaction with the financial institution. Part II calls for the identity of "the individual or organization for whom this transaction was completed." Nowhere does the form require the person conducting the transaction or the individual or organization for whom the transaction was completed to state whether this person is acting as an agent or bailee for the true owner of the currency involved. The regulations, as they are implemented by this form, do not appear to take into account the out-of-the-ordinary situation involved when the account is a lawyer's trust fund.
All jurisdictions in the United States require lawyers to maintain trust accounts. In Wisconsin such an account is mandated by Supreme Court Rule 11.05, which states, in part:
(1) A member of the state bar shall not commingle the money or other property of a client with his or her own, and he or she shall promptly report to the client the receipt by him or her of all money and other property belonging to the client. Unless the client otherwise directs in writing, whenever an attorney collects any sum of money upon any action, claim or proceeding, either by way of settlement or after trial or hearing, he *723 or she shall promptly deposit his or her client's funds in a bank, trust company, credit union or savings and loan association, authorized to do business in this state, in an account separate from his or her own account and clearly designated as "Clients' Funds Account" or "Trust Funds Account," or words of similar import. The attorney, with the written consent of the client, may deposit the client's funds in a segregated client's trust account with all interest accruing thereon to the client. Unless the client otherwise directs in writing, securities of a client in bearer form shall be kept by the attorney in a safe deposit box at a bank, trust company, credit union or savings and loan association authorized to do business in this state, which safe deposit box shall be clearly designated as "Clients' Account" or "Trust Account," or words of similar import, and be separate from the attorney's own safe deposit box.
(2) A member of the state bar shall maintain and preserve for at least 6 years complete records pertaining to client's funds or assets received by him or her which are required to be distributed or segregated by sub. (1). The records shall include his or her trust fund checkbooks and the stubs thereof, statements of the account, vouchers and canceled checks or share drafts thereon or microfilm copies thereof and his or her account books showing dates, amounts and ownership of all deposits to and withdrawals by check or share draft or otherwise from the accounts, and all of the records shall be deemed to have public aspects as related to the member's fitness to practice law. Upon request of the board of attorneys professional responsibility, or upon direction of the supreme court, the records shall be submitted to the board for its inspection, audit, use and evidence under such conditions to protect the privilege of clients as the court may provide. The records, or an audit thereof, shall be produced at any disciplinary proceeding involving the attorney wherever material. Failure to produce the records shall constitute unprofessional conduct and grounds for disciplinary action.
It is obvious that with this type of account the law firm or the lawyer is never the real party in interest to the transactions made. And, although section (2) of this rule requires an attorney to keep records of transactions made through a trust fund, revealing such information to a third party such as a bank might raise ethical questions related to the attorney-client privilege. See Wis.Stat. § 905.03 (1981-1982).
That the regulations do not appear to cover a situation where the signatory to an account is acting as the agent or bailee for another cannot be dismissed as a mere oversight on the part of the Secretary of the Treasury. By way of comparison the Court offers Exhibit B, which is Customs Form 4790. Question 27 of this "Report of International Transportation of Currency or Monetary Instruments" specifically asks the individual: "Were you acting as an agent, attorney or in capacity of anyone in this currency or monetary instrument activity?" If the answer is "yes," the individual is asked to list the name, address, and business activity, occupation or profession of the real party in interest. This form must be sworn to and signed by the individual conducting the transaction.
Under the plain meaning of the regulations implementing the Bank Secrecy Act, Gimbel and others similarly situated would not have notice that they must reveal the identities of the real parties in interest to domestic currency transactions made through their trust accounts. If the reasoning of the prosecution is followed and the enabling statute does create such an obligation, then the Act and the regulations considered together are certainly vague on that point. When a law cannot be evaluated according to its plain meaning, a court may look to legislative history for guidance. See United States v. Anderez, 661 F.2d 404, 406 (5th Cir.1981); United States v. Wander, 601 F.2d 1251, 1257 n. 3 (3d Cir.1979).
*724 The Bank Secrecy Act of 1970 was, in part, a reaction to financial abuses such as kickbacks and bribes. The House of Representatives Report states the purpose behind the domestic reporting requirements:
Criminals deal in money cash or its equivalent. The deposit and withdrawal of large amounts of currency or its equivalent (monetary instruments) under unusual circumstances may betray a criminal activity. The money in many of these transactions may represent anything from the proceeds of a lottery racket to money for the bribery of public officials.
H.R.Rep. No. 91-975, 91st Cong., 2d Sess. 11 (1970), U.S.Code Cong. & Admin.News 1970, pp. 4394, 4396.
Section 5311 of Title 31 of the United States Code also declares the law's purpose:
"It is the purpose of this subchapter (except section 5315) to require certain reports or records where they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings."
The bill drafted by the House envisioned that the customer would be notified of what must be included in a report and would be obliged to sign the report:
The bill requires that reports be filed both by the financial institution involved and by one or more of the other parties to or participants in the transaction, as the Secretary may require. The purpose of this is twofold. First, it permits the prosecution of a person who supplies false information for such a report and signs it. Secondly, it relieves the institution of any pressure the Secretary of the Treasury might otherwise be inclined to exert to require it to submit reports of this type without notifying the customer. The latter procedure raises serious questions in respect to the fiduciary duty of financial institutions to their customers, not to mention the right of privacy or simple fairness.
H.R.Rep. No. 91-975, 91st Cong., 2d Sess., U.S.Code Cong. & Admin.News 1970, 4407 (1970).
The Senate version of the bill contemplated a similar requirement that both the financial institution and a party to the transaction would sign the report:
It is expected that the reports required to be filed by a party to a currency transaction would be filed through the financial institution involved acting as an agent for the Secretary with respect to the collection of such reports. In most cases, a single document signed by the financial institution and the party to the transaction should suffice to satisfy both reporting requirements.
S.Rep. No. 91-1139, 91st Cong., 2d Sess. 6 (1970).
The regulations and form subsequently adopted by the Secretary demonstrate that he did not choose to implement that portion of the enabling act under which he could have required the person conducting the transaction to sign and file the report together with the financial institution. Thus, the legislative history of the Act is at odds with the actual implementation of the law. This tends to bear out the defendant's contention that the law is vague or nonexistent as applied to him.
The government urges the court to consider recent case law which has recognized crimes "similar" to the offenses in question. See Government's Response to Defendant's Memorandum Brief at 4. Of the seven cases cited,[13] four deal with convictions *725 obtained under the foreign transaction reporting provisions of the Bank Secrecy Act. While these opinions could serve to uphold the validity of part of the charging scheme in the Gimbel Indictment, they do not bear on the falsification and concealment charges being discussed here. See United States v. Dickinson, 706 F.2d 88, 91 (2d Cir.1983) (pattern of illegal activity must involve repeated violations of the Act for penalty enhancement provisions to apply); United States v. Dichne, 612 F.2d 632, 641 (2d Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 760 (1980) (foreign reporting requirements of Act not violative of Fifth Amendment privilege against self-incrimination); United States v. Beusch, 596 F.2d 871, 877 (9th Cir.1979) (bank officer causing bank to fail to file foreign transaction report can be charged as principal): United States v. Fitzgibbon, 576 F.2d 279, 283-85 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978). (Provisions of Bank Secrecy Act do not preempt prosecution under false statements statute and are not violative of First and Fourth Amendments).
Three of the cases cited by the government do deal with the domestic currency transaction reporting requirements of the Act. However, United States v. Kattan-Kassin, 696 F.2d 893, 898 (11th Cir.1983) only stands for the proposition that each violation of 31 U.S.C. § 1059 can be prosecuted as a separate felony a point not at issue here. In United States v. Thompson, 603 F.2d 1200 (5th Cir.1979), the Fifth Circuit ruled that the statute and regulations of the Bank Secrecy Act were not vague as applied to the defendant, the chairman of the board of a Texas bank. Id. at 1203. The defendant had arranged for a $45,000 loan to a drug dealer. He structured the loan into five notes, each in the amount of $9,000.00 and each bearing a different maturity date. In the course of one day the defendant personally processed these notes at his bank to obtain cash. The bank had an obligation to file a CTR for currency transactions in excess of $10,000 and the court interpreted the word "transaction" to encompass the aggregate amount of multiple transactions made in a single day by one person. This case arose prior to the revision of Form 4789 to cover such situations.
The Eleventh Circuit in United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983) upheld the conviction of a defendant in a one-count indictment which alleged that:
Tobon concealed and caused to be concealed the existence, source, and transfer of approximately $185,200 in cash by purchasing approximately twenty-one cashier's checks in amounts less than $10,000 from eleven different financial institutions, using a variety of names, including false names, as payees and remitters for the purpose of avoiding the financial institutions' filing of Currency Transaction Reports....
Id. at 1094.
Tobon was convicted under the false statements statute, 18 U.S.C. § 1001, for giving false names and for concealing the fact that he was making currency transactions in excess of $10,000 at a single bank in a single day. The banks were under an obligation to file CTR's for currency transactions of over $10,000 made by one "person," and the Eleventh Circuit found that Tobon and his accomplice acted as a "person" under the "broad definition" in 31 C.F.R. § 103.11. Id. at 1097-98. This regulation defines "person" to include:
An individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, and all entities cognizable as legal personalities.
The court, on its own initiative, included the terms "principal/agent" within this definition of "person." Id. at 1098. But see United States v. Higgins, 511 F.Supp. 453, 455 (W.D.Ky.1981) (broad expansion of statute should not be imposed by judicial decision). These terms do not appear in 31 *726 C.F.R. § 103.11. Because Tobon and his accomplice were considered as a unit fitting the definition of "person," the court did not have to consider whether the accomplice was guilty of causing the bank to file a false statement on those occasions when she used her own name and concealed the identity of Tobon as the true owner of the currency. Id. at 1096. It appears that the concealment charge was primarily directed toward the concealment of the aggregate amount of the transactions through the use of fictitious names and an accomplice.
The Tobon court noted with approval that the Thompson court had "adopted a sensible, substance-over-form approach in dealing with schemes to circumvent financial institution reporting requirements." Tobon-Builes, 706 F.2d at 1098. This court declines to adopt such an approach in the case of the Gimbel Indictment. Although the government and the public have a strong interest in ensuring that not only the letter but also the spirit of a law be observed, this consideration is countered by the familiar and long-standing canon of statutory construction which requires that any ambiguity concerning the ambit of criminal statutes be resolved in favor of lenity. See Rewis v. United States, 401 U.S. 808, 812, 91 S.Ct. 1056, 1059, 28 L.Ed.2d 493 (1971); United States v. Levy, 533 F.2d 969, 973 (5th Cir.1976). See also United States v. Yermian, 468 U.S. 63, ___, 104 S.Ct. 2936, 2947, 82 L.Ed.2d 53 (1984) (Rehnquist J., dissenting) ("I would hold that the rule of lenity is applicable in this case and that it requires the government to prove that a defendant in a § 1001 prosecution had actual knowledge that his false statements were made in a matter within federal agency jurisdiction.").
It is reasonable to require that a question be asked before a person can be accused of answering falsely or of not answering at all. See United States v. Irwin, 654 F.2d 671, 678-79 (10th Cir.1981), cert. denied, 455 U.S. 1016, 102 S.Ct. 1709, 72 L.Ed.2d 133 (1982). The government cannot expect a person making a transaction at a bank to volunteer all manner of information on the chance that it may be required for some government report. This is especially true when the form for the report does not contain any space or directive for supplying such information.
The Bank Secrecy Act is an enforcement tool which is meant to be used in the investigation of other crimes. It requires financial institutions to keep records and file reports on activities which are otherwise innocent acts. Similarly, if government agents were to set up a blockade of the Florida coast to apprehend drug runners, and no law created a legal duty for ship captains to steer a course which would bring them into contact with the government agents, the government could not charge a captain with a crime because he took a route which caused his ship to avoid the blockade. Some captains, whether acting for criminal or innocent motives, would deliberately steer their ships through the holes in the blockade.
Taking the allegations in the Gimbel Indictment as true, which the court must, it appears that this defendant has taken notice of the "blockade," has found a "hole," and is conducting his affairs accordingly. He is not the first to find that the Bank Secrecy Act has many infirmities. The district court in United States v. San Juan, 405 F.Supp. 686, 694-95 (D.Vt.1975), rev'd, 545 F.2d 314 (2d Cir.1976) actually suggested that the defendant could have avoided the foreign reporting requirements by making several trips over the border with amounts of less than $5,000. Another commentator has pointed out that:
[D]rug financiers can readily evade or avoid the reporting requirements of the BSA [Bank Secrecy Act]. The BSA does not cover interbank transfers within the United States and wire transfers with foreign banks; reporting requirements would disrupt the flow of the massive volume of such transactions. For domestic cash deposits, a drug dealer or courier can avoid the CTR filing requirement by making deposits in amounts less than $10,000.00 at a number of banks. *727 Wisotksy, Exposing the War on Cocaine: The Futility and Destructiveness of Prohibition, 1983 Wis. L. Rev. 1305, 1370.
If an individual used the last-mentioned ruse and made currency transactions of less than $10,000.00 at different banks, but these transactions totalled over $10,000.00 on a single day, it could be alleged that the individual structured his transactions for the purpose of avoiding the filing of CTRs. Yet, 31 U.S.C. § 5313 and the accompanying regulations clearly do not impose an obligation on separate financial institutions to aggregate all daily transactions. But would the substance-over-form approach adopted in Thompson and Tobon allow such a person to be convicted because he had violated the spirit of the Bank Secrecy Act?
This hypothetical scenario is directly analogous to the instant situation where a loophole exists in the regulations as to a person's legal duty to identify the real party in interest to a currency transaction when the account holder is holding funds in trust for others. Not to admit that such a loophole exists would be to invite criminal prosecution of the truly unwary.
It is not within the province of the judiciary to fill in gaps in the law. A theory of prosecution cannot do so either. The Secretary of the Treasury has it within his delegated power to revise the regulations and the form to cover the type of conduct alleged in this Indictment. For reasons of economics and customer relations the banks have resisted these regulations from the outset. See generally S.Rep. No. 91-1139 (1970); H.R.Rep. No. 91-975 (1970); Hearings on Foreign Bank Secrecy and Bank Records (H.R. 15073) before the House Committee on Banking and Currency, 91st Cong., 1st and 2d Sess. (1969-1970); Hearings on Foreign Bank Secrecy (S. 3678 and H.R. 15073) before the Subcommittee on Financial Institutions of the Senate Committee on Banking and Currency, 91st Cong., 2d Sess. (1970). Consequently, far from being the broad delegation of power that some feared, this enabling act has never been fully implemented.
Based on the considerations discussed above, the court finds that the Secretary of the Treasury has never implemented by regulations or form that portion of the Bank Secrecy Act, 31 U.S.C. § 5313(a), under which he could have required a participant in a domestic currency transaction who is acting as the agent or bailee for another to identify the person for whom the transaction is being made if that person is someone other than the signatory to the account through which the transaction is being made. If such a requirement is intended, the statute, the regulations and the form, considered together, are vague as applied to this defendant. Because the court finds the charges under 31 U.S.C. § 5313 to be invalid, the charges brought under 31 U.S.C. § 5322 and 18 U.S.C. §§ 2 and 1001 must also fail because they depend upon the applicability of section 5313.
Accordingly, the court ORDERS that Counts I through XVI of the Indictment of Stanley P. Gimbel are DISMISSED WITHOUT PREJUDICE. In issuing this order the court makes no judgment as to the facts of any of the allegations made against this defendant. The government has alleged a pattern of conduct which, if true, suggests a calculated scheme to circumvent the law. This decision should in no way be construed as condoning such conduct. The court simply rules that as a matter of law it is invalid to charge this defendant under section 5313. It is not the province of this court to judge the wisdom of the law as it stands. See Leathers v. United States, 471 F.2d 856 (8th Cir.1972), cert. denied, 412 U.S. 932, 93 S.Ct. 2754, 37 L.Ed.2d 161 (1973) (remedy for closing tax loophole is with Congress).
IT IS FURTHER ORDERED that, in view of this order of dismissal, the evidentiary motions raised by the plaintiff and the defendant are now MOOT and are therefore DENIED.
*728
*729
*730
*731
*732 APPENDIX A
COUNT ONE
1. At all times pertinent to the Indictment herein:
a. Transactions in currency were defined as transactions involving the physical transfer of currency from one person to another, as stated in pertinent part in Title 31, Code of Federal Regulations, Section 103.11.
b. Financial institutions were required to file a report for each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution, which was a transaction in currency of more than $10,000.00, as stated in pertinent part in Title 31, United States Code, Section 5313 (formerly 1081) and Title 31, Code of Federal Regulations, Section 103.22(a).
c. Reports of currency transactions, as described above, were required to be filed on or before the 45th day, prior to July 1980, and on or before the 15th day, after July 1980, following the day on which the reported transaction occurred. Filing was to be made with the Internal Revenue Service on the form prescribed, that is, IRS Form 4789. The reports were required to furnish all information called for in such form, as stated in pertinent part in Title 31, Code of Federal Regulations, Section 103.25.
d. IRS Form 4789 required, among other items, the identity of the individual who conducted the transaction with the financial institution in "Part I" and the individual or organization for whom the transaction was completed in "Part II".
e. A financial institution was required to verify and record the name and address of the individual presenting a transaction in currency, as previously described, as well as the identity of any person or entity for whose or which account such transaction was to be effected, as stated in pertinent part in Title 31, Code of Federal Regulations, Section 103.26.
f. Reports of currency transactions as previously described herein were required to be made for use in criminal, tax, and regulatory investigations and proceedings, as stated in pertinent part in Title 31, United States Code, Section 5311 (formerly 1051) and Title 31, Code of Federal Regulations, Section 103.21.
g. Transactions in currency at a financial institution in one day by or for any one person were required to be reported on IRS Form 4789 as a single transaction when they aggregated over $10,000.00, as stated in pertinent part in the instructions on said form (under "Who Must File").
h. Reports of currency transactions such as previously described herein were required to be signed by the financial institution involved, were required to identify the person on whose behalf the transaction was entered into if the party in the transaction was not acting only for himself, and were required to be made by individuals acting as an agent or bailee for another in a reportable transaction, as stated in pertinent part in Title 31, United States Code, Section 1082, as of October, 1970.
i. A person acting as an agent or bailee for another person for whom a transaction in currency of more than $10,000.00 was conducted was required to make such a report as previously described herein and identify the person for whom the transaction was made, as stated in pertinent part in Title 31, United States Code, Section 5313, as of September, 1982.
j. The First Bank-Milwaukee was a financial institution, as defined by Title 31, United States Code, Section 5312 (formerly 1052) and Title 31, Code of Federal Regulations, Section 103.11.
k. STANLEY P. GIMBEL, defendant herein, was an attorney engaged in the practice of law in the state of Wisconsin and was a person as defined by Title 31, United States Code, Section 5312 (formerly 1052) and Title 31, Code of Federal Regulations, Section 103.11. He also acted in the capacity of a financial institution, a financial agency, and an agent and bailee for other persons for whom he conducted transactions in currency, as defined in Title *733 31, United States Code, Section 5312 and 5313 (formerly 1052, 1081 and 1082) and Title 31, Code of Federal Regulations, Section 103.11.
l. STANLEY P. GIMBEL was a customer at First Bank-Milwaukee whose currency transactions at that bank were not exempt from being reported to the Internal Revenue Service within the meaning of Title 31, Code of Federal Regulations, Section 103.22(b).
m. STANLEY P. GIMBEL had signature authority over and used the trust account of the Gimbel, Gimbel and Reilly firm at First Bank-Milwaukee.
n. STANLEY P. GIMBEL in his practice of law represented various clients in criminal and tax matters in Wisconsin and other locations and used the aforementioned trust account to receive currency, checks and transfers from them to distribute various payments on their behalf in the form of currency, checks or transfers.
2. From on or about November, 1978, to on or about November, 1983, at Milwaukee, in the Eastern District of Wisconsin, and elsewhere,
STANLEY P. GIMBEL,
defendant herein, did knowingly, willfully and intentionally falsify, conceal and coverup, and cause to do so, by scheme and device, material facts within the jurisdiction of an agency or department of the United States, that is, the Internal Revenue Service.
3. The purposes of said scheme and device were to engage in activity to prevent any government agency from knowing in truth and in fact:
a. That persons other than STANLEY P. GIMBEL or his law firm were involved as the real parties in interest in the currency transactions handled on their behalf by STANLEY P. GIMBEL at First Bank-Milwaukee and other financial institutions; and
b. That STANLEY P. GIMBEL was representing various persons, some of whom were involved in criminal activity, and was converting their United States or foreign currency to payments or other distributions to be distributed on their behalf by him without the direct tracing of the payments or distribution to those persons.
4. The aforementioned material facts included that STANLEY P. GIMBEL:
a. Was depositing and withdrawing currency in amounts in excess of $10,000.00 in one day into and from the Gimbel, Gimbel and Reilly law firm trust account at First Bank-Milwaukee (This currency was received from various persons, often in amounts in excess of $10,000.00 in one day); and
b. Was acting as an agent and bailee for other persons in reportable transactions in currency at First Bank-Milwaukee; and that
c. Currency transaction reports filed with the Internal Revenue Service by the First Bank-Milwaukee were caused to be filed inaccurately and improperly by STANLEY P. GIMBEL in regard to "Part II" of the report.
5. The aforementioned scheme and device of STANLEY P. GIMBEL included:
a. The use of the Gimbel, Gimbel and Reilly law firm trust account at First Bank-Milwaukee to falsify, conceal and cover-up material facts;
b. The use of wire transfers and cashier's checks into and from said account to falsify, conceal and cover-up material facts;
c. The use of multiple deposits of currency into said account such that the aggregate of the deposits exceeded $10,000.00 in one day but the transactions were conducted in such a manner as to evade, circumvent and inhibit their reporting to the Internal Revenue Service;
d. The causing of currency transaction reports (IRS Form 4789) to be filed improperly and inaccurately by financial institutions on the occasions that the institution discovered a transaction or the aggregate *734 of transactions exceeding $10,000.00 on one day at one institution by STANLEY P. GIMBEL. This occurred because STANLEY P. GIMBEL did not state any other person's interest in a transaction than that of himself or the Gimbel, Gimbel and Reilly law firm when he assisted in filling out the report; and
e. The counseling and giving of advice to individuals to evade the currency transaction reporting requirements by splitting up amounts of currency exceeding $10,000.00 into amounts less than $10,000.00 at a financial institution, to use false names when opening bank accounts and when endorsing checks, and to report income to the Internal Revenue Service in an amount different than actually received by those persons as an alternative to such evasion and falsity.
6. It was a further part of the scheme and device that STANLEY P. GIMBEL would and did participate on numerous occasions between 1978 and 1983 in activity involving the causing of currency transaction reports to not be filed at financial institutions, the causing of such reports to be filed improperly and inaccurately at financial institutions, the receipt and custody of currency, the deposit and withdrawal of currency, the disbursement of currency, meetings concerning currency, and the receipt and disbursement of cashier's checks. This activity was done in furtherance of the scheme and device to falsify, conceal and cover-up material facts.
In violation of Title 18, United States Code, Section 1001 and 2.
APPENDIX B
COUNT TWO
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about April 22, 1982, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $17,000.00 approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before May 7, 1982. The report was required to be filed in the aggregate amount.
4. On or about May 7, 1982, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $270,000.00 between April, 1982 and April, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT THREE
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
*735 2. On or about May 17, 1982, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $40,000.00 approximately. The transaction consisted of 5 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before June 1, 1982. The report was required to be filed in the aggregate amount.
4. On or about June 1, 1982, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT FOUR
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about May 18, 1982, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $16,000.00 approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before June 2, 1982. The report was required to be filed in the aggregate amount.
4. On or about June 2, 1982, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly *736 1081 and 1059); Title 18, United States Code, Section 2.
COUNT FIVE
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about June 10, 1982, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $15,000.00 approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before June 25, 1982. The report was required to be filed in the aggregate amount.
4. On or about June 25, 1982, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT SIX
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about August 17, 1982, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $15,000.00 approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before September 1, 1982. The report was required to be filed in the aggregate amount.
4. On or about September 1, 1982, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed *737 in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT SEVEN
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about November 12, 1982, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $22,000.00 approximately. The transaction consisted of 3 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before November 27, 1982. The report was required to be filed in the aggregate amount.
4. On or about November 27, 1982, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT EIGHT
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about November 15, 1982, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $23,000.00 approximately. The transaction consisted of 3 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before November 30, 1982. The report was required to be filed in the aggregate amount.
4. On or about November 30, 1982, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report *738 (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT NINE
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about February 22, 1983, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $15,000.00 approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before March 9, 1983. The report was required to be filed in the aggregate amount.
4. On or about March 9, 1983, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT TEN
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about March 2, 1983, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $21,000.00 approximately. The transaction consisted of 3 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before March 17, 1983. The report was required to be filed in the aggregate amount.
*739 4. On or about March 17, 1983, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT ELEVEN
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about March 25, 1983, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of Canadian currency that equalled United States currency in excess of $10,000.00, that is, the aggregate amount of $10,948.00 in United States currency approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before April 9, 1983. The report was required to be filed in the aggregate amount.
4. On or about April 9, 1983, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT TWELVE
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about April 14, 1983, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $29,500.00 approximately. The transaction consisted of 4 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
*740 3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before April 29, 1983. The report was required to be filed in the aggregate amount.
4. On or about April 29, 1983, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT THIRTEEN
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about April 15, 1983, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $29,100.00 approximately. The transaction consisted of 4 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before April 30, 1983. The report was required to be filed in the aggregate amount.
4. On or about April 30, 1983, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT FOURTEEN
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about April 19, 1983, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, *741 that is, the aggregate amount of $15,000.00 approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before May 4, 1983. The report was required to be filed in the aggregate amount.
4. On or about May 4, 1983, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT FIFTEEN
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about April 22 1983, a customer of the First Bank-Milwaukee, that is STANLEY P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $12,140.00 approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before May 7, 1983. The report was required to be filed in the aggregate amount.
4. On or about May 7, 1983, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
COUNT SIXTEEN
The GRAND JURY further charges:
1. Paragraph (1) inclusive of Count One of this Indictment is incorporated by reference herein as if set out in full.
2. On or about May 2, 1983, a customer of the First Bank-Milwaukee, that is STANLEY *742 P. GIMBEL, defendant herein, engaged in a transaction in currency, that is, a deposit, payment and transfer by, through and at the First Bank-Milwaukee, of United States currency in excess of $10,000.00, that is, the aggregate amount of $11,300.00 approximately. The transaction consisted of 2 deposits. Each deposit consisted of an amount of currency under $10,000.00. This currency was owned by a person or persons other than STANLEY P. GIMBEL.
3. A Currency Transaction Report (IRS Form 4789) was required to be filed with the Internal Revenue Service within 15 days from the date of the aforesaid transaction in currency in connection with it, that is, on or before May 17, 1983. The report was required to be filed in the aggregate amount.
4. On or about May 17, 1983, at Milwaukee, in the Eastern District of Wisconsin,
STANLEY P. GIMBEL,
defendant herein, did knowingly and intentionally cause the failure to file of the aforesaid Currency Transaction Report (IRS Form 4789) with the Internal Revenue Service as required by law.
5. The aforementioned failure to file was part of a pattern of illegal activity involving currency transactions exceeding $100,000.00 in any twelve month period, that is, in excess of $277,000.00 between May, 1982 and May, 1983, and was committed in furtherance of and while violating another law of the United States, that is, a violation of Title 18, United States Code, Section 1001, as more fully set forth in Count One of this Indictment.
In violation of Title 31, United States Code, Sections 5313 and 5322(b) (formerly 1081 and 1059); Title 18, United States Code, Section 2.
ON MOTION FOR RECONSIDERATION AND CLARIFICATION
On August 23, 1984, this court dismissed, without prejudice, all sixteen counts of an indictment returned against Stanley P. Gimbel. See page 710-727 (Decision and Order dismissing indictment). Gimbel had been charged with multiple criminal violations of federal banking laws, 31 U.S.C. §§ 5313 & 5322; with causing these offenses to be committed, 18 U.S.C. § 2; and with making false statements to the government or causing them to be made, 18 U.S.C. § 1001. On September 6, 1984, the United States of America (government) filed a Motion For Reconsideration and Clarification to determine whether the court would reinstate the indictment without certain verbiage. This motion is now fully briefed and ready for decision. The facts, background and prior procedure of this case are set forth in the court's Decision and Order of August 23, 1984 and are incorporated here by reference.
POSITIONS OF THE PARTIES
The government's view is that the indictment does not charge Gimbel with any violation that is predicated on his personal duty to file a Currency Transaction Report (CTR). The government contends that:
[T]he indictment's gist and the Government's theory is that he directly concealed and falsified facts and that he caused the concealment and falsification of facts that related to the filing of or the non-filing of CTRs. His capacities as agent and bailee are but part of the role he played in the scheme to conceal and falsify.... His role-in-chief was that of a "causer."
Government's Motion for Reconsideration and Clarification at 2. Moreover, the government asserts that Gimbel was properly charged with causing First Bank-Milwaukee to inaccurately and improperly file a CTR.
The government proposes that the court could strike paragraphs 4b and 5d, the third clause of paragraph h, and paragraphs i and k of Count I of the indictment. This would eliminate explicit reference to Gimbel's role as an agent or bailee and to *743 his being a financial institution. "The Government believes that the semantic changes described above will obviate the need to appeal or reindict." Id. at 4. If not, the government seeks clarification as to whether the court meant to find the indictment improper on any basis other than that dealing with the question of any duty imposed upon an agent or bailee.
In response, the defendant objects to the court's performing what he terms "radical surgery" upon the indictment. He points out that it is a settled rule that an indictment may not be amended except by resubmission to the grand jury, unless the matter is merely a matter of form. See Russell v. United States, 369 U.S. 749, 770, 82 S.Ct. 1038, 1050, 8 L.Ed.2d 240 (1962). The amendments or strike-outs proposed by the government are substantial in the defendant's view. He asserts that the prosecution should not be allowed to speculate as to what portions of the indictment the grand jury relied on in its determination. "To permit the amendments proposed would deprive the defendant of his constitutionally guaranteed right of the intervention of a grand jury." Response to Government's Motion for Reconsideration and Clarification at 6.
In reply, the government observes that the defendant has not responded to the merits of its motion, but instead has chosen to oppose it on technical grounds. The government answers that it is not seeking to amend the indictment, but to reinstate it in part. "The government is seeking to reinstate those parts of the indictment which it believes will still state a crime and will not be susceptible to the defects noted by the Court in its dismissal order." Government's Reply to Defendant's Response to Government's Motion for Reconsideration and Clarification at 3. The government points out that the defendant himself made a motion to strike prejudicial surplusage earlier in these proceedings. Striking some of the verbiage would be permissible in this case, the government argues, because it would result in the indictment charging less rather than more and because it does not substitute any allegations of fact or substitute theories of prosecution. Striking these passages would require the defendant to defend on fewer grounds. "It is inconceivable how the changes sought could be prejudicial to the defendant under the standards of United States v. Cina, 699 F.2d 853 (7th Cir.), cert. denied, 464 U.S. 991, 104 S.Ct. 481, 78 L.Ed.2d 679 (1983), when the government is agreeing that he has not [sic] obligation to voluntarily provide a bank with client information."[1] Government's Reply at 4. The government says that it presented the grand jury with three theories and that the indictment, if reinstated as requested, would still be based upon a grand jury's finding of probable cause on two theories: falsification and concealment. Id. "The grand jury was presented with allegations and facts on every section sought to be reinstated." Id.
Under Cina an amendment or a variance will be allowed to stand if it does not change an "essential" or "material" element of the charge so as to cause prejudice to the defendant. In Berger v. United States, 295 U.S. 78, 82, 55 S.Ct. 629, 630-31, 79 L.Ed. 1314 (1935), the Supreme Court explained that "material" or "substantial" variances are those which trammel the defendant's rightful expectations (1) that he be "definitely informed as to the charges against him, so that he may be enabled to present his defense and not be taken by surprise by the evidence offered at trial; and (2) that he may be protected against another prosecution for the same offense." Modifications which work to change the basic theory of the offense or alter the crime charged are considered to be amendments. See Cina, 699 F.2d at 858.
*744 DECISION[2]
In dismissing the indictment in the Gimbel case, the court held that the acts alleged in the indictment failed to charge an offense under the applicable law:
[T]he secretary of the Treasury has never implemented by regulations or form that portion of the Bank Secrecy Act, 31 U.S.C. § 5313(a), under which he could have required a participant in a domestic currency transaction who is acting as the agent or bailee for another to identify the person for whom the transaction is being made if that person is someone other than the signatory to the account through which the transaction is being made. If such a requirement is intended, the statute, the regulations and the form, considered together, are vague as applied to this defendant. Because the court finds the charges under 31 U.S.C. § 5322 and 18 U.S.C. §§ 2 and 1001 must also fail because they depend upon the applicability of section 5313.
While recognizing the gravity of the charges, the court pointed out that "[a]lthough the government and the public have a strong interest in ensuring that not only the letter but also the spirit of a law be observed, this consideration is countered by the familiar and long-standing canon of statutory construction which requires that any ambiguity concerning the ambit of criminal statutes be resolved in favor of lenity." See Rewis v. United States, 401 U.S. 808, 812, 91 S.Ct. 1056, 1059, 28 L.Ed.2d 493 (1971).
At the outset the court reiterates that it did not dismiss the indictment because it found section 5313 of the Currency and Foreign Transaction Reporting Act to be void for vagueness or ambiguous. To the contrary, section 5313 is quite clear. It requires a financial institution to file a CTR "under circumstances the Secretary [of the Treasury] prescribes by regulation," 31 U.S.C. § 5313(a). The Secretary has prescribed regulations defining "currency," "financial institution," a "bank," "person," and a "transaction in currency." See 31 C.F.R. § 103.11. The Secretary's regulations also set the minimum limit at which currency transaction must be reported at $10,000.00 for a domestic transaction. See 31 C.F.R. § 103.22(a). Following the enactment of this law in 1970, the Secretary has not seen fit to issue any regulation or form requiring that a person acting on behalf of another reveal the identity of the legal owner of the funds. In California Bankers Association v. Shultz, 416 U.S. 21, 26, 94 S.Ct. 1494, 1500, 39 L.Ed.2d 812 (1974), Justice Rehnquist, writing for the majority, said that "we think it important to note that the Act's civil and criminal penalties attach only upon violation of regulations promulgated by the Secretary; if the Secretary were to do nothing, the Act itself would impose no penalties on anyone."
In the charging section of the indictment, the government alleged that the "defendant herein, did knowingly, willfully and intentionally falsify, conceal and cover-up, *745 and cause to do so, by scheme and device, material facts within the jurisdiction or an agency or department of the United States, that is, the Internal Revenue Service." In other words, the defendant is accused of personally falsifying, concealing and covering up material facts and also with causing others to do so. To this end Gimbel is said to have deposited and withdrawn currency in amounts in excess of $10,000.00 in one day into and out of the Gimbel, Gimbel & Reilly law firm trust account at First Bank-Milwaukee. In the course of these currency transactions he caused First Bank-Milwaukee to file CTRs inaccurately and improperly in regard to Part II of the report. The scheme and device included use of the Gimbel, Gimbel & Reilly law firm trust account; use of wire transfers and cashier's checks and use of multiple deposits of currency which totaled more than $10,000.00 in one day; causing CTRs to be filed improperly and inaccurately; counseling others to evade CTR requirements; and counseling others to report income in amounts different from income actually received. Also, in furtherance of the scheme, Gimbel allegedly participated in activity which caused CTRs to be inaccurately filed or not to be filed at all. This activity involved the receipt and custody of currency, the deposit and withdrawal of currency, the disbursement of currency, meetings and receipt and disbursement of cashier's checks.
The remaining fifteen counts charge specific instances of the aforementioned conduct. For example, Count Two states that in a single day Gimbel engaged in a currency transaction which consisted of two deposits totaling approximately $17,000.00. The Indictment says that each deposit was under $10,000.00 and that this currency was owned by a person or persons other than Stanley P. Gimbel.
As explained above, the government is now proposing that the indictment be reinstated by striking out those portions which refer to acts done by Gimbel in the role of a bailee, agent or financial institution. The defendant has objected that this would constitute an impermissible amendment of the indictment. But the court does not find his view of the law to be valid. Under United States v. Diaz, 690 F.2d 1352 (11th Cir. 1982), a court may withdraw distinct portions of a charge in an indictment "if the effect is to narrow the issues a defendant is called on to meet." Id. at 1356. See also United States v. Milestone, 626 F.2d 264, 269 (3rd Cir.), cert. denied, 449 U.S. 920, 101 S.Ct. 319, 66 L.Ed.2d 148 (1980). In Diaz the defendants owned and operated two plasmapheresis centers. The fifty-four count Indictment charged the Diazes with conspiracy to violate the Federal Food and Drug Act and with making false statements to the government. The government was allowed to withdraw the counts related to interstate commerce of adulterated and misbranded drugs and the counts involving false statements made on consent forms. The Diaz court relied on a Supreme Court decision holding that withdrawing a part of a charge from the consideration of the jury does not work an amendment of the indictment, provided nothing is thereby added to the indictment. See Salinger v. United States, 272 U.S. 542, 548-49, 47 S.Ct. 173, 175, 71 L.Ed. 398 (1926).
Similarly, in the instant case, Gimbel is charged with participating in a scheme or device whereby bank reporting laws were violated because false statements or no statements at all were submitted to the government. Under Diaz, the court could strike those passages proposed by the government if they are separable from the rest of the scheme and if this removal would narrow, not add to, the issues the defendant is called upon to meet.
After striking paragraphs 4b, 5d, i, k and part of h in Count I, the indictment would still charge Gimbel with causing concealment of material facts and with falsifying material facts in violation of the laws. The government argues that if this is done: "Count One is now left without the imposition of any duty upon the defendant as an agent or a bailee and is an offense concerned with both two false statements on CTRs in the traditional 1001 sense and a *746 Tobon-Builes[3] type split transactions prosecution." Government's Motion at 4.
The court, however, sees a number of problems with what would remain of the indictment. For even if all explicit references to Gimbel's participation in the alleged crimes as an agent or bailee are removed from the indictment, this would not eliminate the inference that Gimbel was acting in these roles when he engaged or caused others to engage in currency transactions through his firm's trust account. The indictment states that Gimbel was an attorney in the practice of law; that the real owners of the currency were persons being represented by Gimbel; and that he used the Gimbel, Gimbel & Reilly trust account to "launder" their currency. In representing the true owners of the currency and in using the trust account, Gimbel was acting as an attorney. An attorney is the agent of his client as a matter of law. See Clear View Estates, Inc. v. Veitch, 67 Wis.2d 372, 380, 227 N.W.2d 84, 88-89 (1975). The remaining portions of the indictment do not accuse Gimbel of causing a financial institution to fail to file a CTR in his own name nor in the name of the Gimbel, Gimbel & Reilly trust account. He is accused of causing a financial institution to file inaccurate CTRs or to fail to file CTRs on behalf of his "clients." On more than one occasion Gimbel is supposed to have received money from a client, then taken it to the bank (or had someone else do so) where it was deposited in his law firm's trust account. The government continues to assert that on those occasions when the bank filed a CTR regarding the deposit, Gimbel caused the bank to do so inaccurately by not naming the client as the "individual or organization for whom this transaction was completed" on Part II of Form 4789. In its prior decision the court decided that Gimbel had no obligation to volunteer this information.[4] The form asks for the "identifying number" and for the "account number" of the individual or organization for whom the transaction is completed. This clearly shows that the information sought relates to a customer, not a stranger, to the bank. The court observed that the Secretary of the Treasury had never promulgated a regulation requiring one acting on behalf of another to name the principal or true owner of the currency, even though the Secretary could have done so under the enabling act. See 31 U.S.C. § 5313. Thus, any charges dealing with falsification in this regard are still fatally defective. See Standard Oil Company of Texas v. United States, 307 F.2d 120, 126 (5th Cir.1962) (courts "should not enlarge the reach of enacted crimes by constituting them from anything less than the incriminating components contemplated by the words used in the statute"). Under the facts set forth in the indictment, Gimbel answered with technical accuracy the questions required by Form 4789 and by the regulations. Had Form 4789 contained a section identical to Part IV of Customs Form 4790 which asks: "Were you acting as an agent, attorney or in capacity for anyone in this currency or monetary instrument activity?" he could validly be charged with causing the filing of a false CTR.
The government believes that its Tobon-Builes theory is still viable in that the grand jury found that, on occasion, Gimbel split deposits or withdrawals totaling over $10,000.00 on the same day so that no CTR would be filed. Again, it does not appear that the indictment is concerned with whether the requisite CTRs were filed on behalf of the Gimbel, Gimbel & Reilly trust account. Form 4789 tells the financial institution that: "Multiple transactions by or for any person which in any one day total more than $10,000 should be treated as a single transaction, if the financial institution is aware of them."[5] How does the financial institution become aware of them? The form and the regulations provide no *747 clue. There is no space for the information to be noted on Form 4789. Apparently, the financial institution must compile these records by its own internal procedures.
In United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983), the court affirmed the conviction of an individual who purchased $185,200.00 worth of cashiers checks in amounts of less than $10,000.00 in the course of one day. Tobon and his accomplice went to eleven different banks. At each bank they purchased at least two checks which totaled over $10,000.00. Tobon was charged with concealing the true amount of his transactions in violation of 18 U.S.C. § 1001. The court explained that "concealment violations under § 1001 relate to the nondisclosure of statements required by statute, government regulation or form." Id. at 1096. The trial court found that Tobon was guilty of concealment which caused the bank not to file CTRs, even though he may have had no legal duty to disclose the aggregate amount of his transactions to the bank. The court reasoned that:
[T]he requirement that a defendant must have a legal duty to disclose before he can be convicted of concealment under § 1001 has no application where, as here, the government charged and proved that Tobon willfully and knowingly caused financial institutions not to report currency transactions that they had a duty to report and would have reported if they had known about such transactions.
Id. at 1099.
Because Gimbel did not have a legal duty to reveal the true owners of the currency used in his transactions, he cannot be charged with the crime of concealment under the Tobon-Builes theory. Again, he is not accused of causing First Bank-Milwaukee to fail to file a CTR for the Gimbel, Gimbel & Reilly trust account. Had that bank aggregated his transactions in the course of one day, they would have filed a CTR for the trust account, not the individual clients. Tobon, on the other hand, was an individual "laundering" his own currency. Had he not used fictitious names and merely broken up his transactions to avoid detection, he still could have been (and was) charged with concealment. In Gimbel, however, the defendant did not have a legal duty to name the owners of the currency, so a CTR would not have been filed on their behalf in any case. Thus, the charge of giving false information in regard to ownership of the currency is inextricably bound to the charge of concealing the amount of the transactions. If the first charge fails to state a crime, the second must too. In its prior decision this court declined to adopt the "substance over form" approach of other courts, see, e.g., United States v. Thompson, 603 F.2d 1200 (5th Cir.1979), with a felony violation of a reporting regulation being at issue.
Finally, paragraph 5(e) of Count I states that part of Gimbel's illegal scheme involved:
The counseling and giving of advice to individuals to evade the currency transaction reporting requirements by splitting up amounts of currency exceeding $10,000.00 into amounts less than $10,000.00 at a financial institution, to use false names when opening bank accounts and when endorsing checks, and to report income to the Internal Revenue Service in an amount different than actually received by those persons as an alternative to such evasion and falsity.
This section deals with violations which could have occurred without the intermediate use of the Gimbel, Gimbel & Reilly trust account. Under 18 U.S.C. § 2, Gimbel could be liable as a principal for any crimes committed pursuant to his counseling. However, paragraph 5(e) does not allege all the elements required under the federal party-to-a-crime statute, which provides:
(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.
(b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against *748 the United States, is punishable as a principal.
18 U.S.C. § 2.
There is no allegation in the indictment that anyone acting on Gimbel's advice committed a crime. The commission of a substantive violation is an essential element under § 2, and the absence of this element from the indictment makes this section fatally defective. See United States v. Hollinger, 553 F.2d 535 (7th Cir.1977). The indictment must be specific in its charges and necessary allegations cannot be left to inference. See 1 C. Wright & A. Miller, Federal Practice and Procedure: Criminal § 125 (2d ed. 1982).
In summary, even with the deletions suggested by the government, the indictment is still insufficient to charge Gimbel with committing the offenses enumerated. The law applicable at the time Gimbel was indicted does not reach the type of conduct in which he allegedly engaged. The regulatory scheme implementing the Currency and Foreign Transactions Reporting Act is an imperfect vehicle for enforcing compliance with the purpose and spirit of that Act. The Act is supposed to enable the Internal Revenue Service to monitor the financial transactions of individual private persons, yet it places the onus of filing the reports on the financial institutions and it expects them to do so on the basis of the information from Form 4789. It appears that the government has taken note of this anomoly by enacting section 146 of the Deficit Reduction Act of 1984, Pub.L. No. 98-369, § 146, 98 Stat. 685 (1984), which places the reporting burden directly on the transactor by providing that:
Any person
(1) who is engaged in a trade or business and
(2) who, in the course of such trade or business, receives more than $10,000 in cash in 1 transaction (or 2 or more related transactions)
shall make the return described in subsection (b) with respect to such transaction (or related transactions) at such time as the Secretary may by regulations prescribe.
Had this law been in effect during the time of Gimbel's alleged scheme, the court would have no trouble finding the indictment sufficient.
Nevertheless, for the reasons discussed above, the court has reconsidered and attempted to clarify its Decision and Order of August 23, 1984, and has reached the conclusion that the indictment cannot be reinstated.
NOTES
[1] Title 18 U.S.C. § 2 provides:
§ 2. Principals
(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.
(b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.
[2] Title 18 U.S.C. § 1001 provides:
§ 1001. Statements or entries generally Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.
[3] Title 31 U.S.C. § 5313 provides:
§ 5313. Reports on domestic coins and currency transactions
(a) When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction at the time and in the way the Secretary prescribes. A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made.
(b) The Secretary may designate a domestic financial institution as an agent of the United States Government to receive a report under this section. However, the Secretary may designate a domestic financial institution that is not insured, chartered, examined, or registered as a domestic financial institution only if the institution consents. The Secretary may suspend or revoke a designation for a violation of this subchapter or a regulation under this subchapter (except a violation of section 5315 of this title or a regulation prescribed under section 5315), section 411 of the National Housing Act (12 U.S.C. 1730d), or section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b).
(c)(1) A person (except a domestic financial institution designated under subsection (b) of this section) required to file a report under this section shall file the report
(A) with the institution involved in the transaction if the institution was designated;
(B) in the way the Secretary prescribes when the institution was not designated; or
(C) with the Secretary.
(2) The Secretary shall prescribe
(A) the filing procedure for a domestic financial institution designated under subsection
(b) of this section; and
(B) the way the institution shall submit reports with it.
[4] Title 31 U.S.C. § 5322 provides:
(a) A person willfully violating this subchapter or a regulation prescribed under this subchapter (except section 5315 of this title or a regulation prescribed under section 5315) shall be fined not more than $1,000, imprisoned for not more than one year, or both.
(b) A person willfully violating this subchapter or a regulation prescribed under this subchapter (except section 5315 of this title or a regulation prescribed under section 5315), while violating another law of the United States or as part of a pattern or illegal activity involving transactions of more than $100,000 in a 12-month period, shall be fined not more than $500,000, imprisoned for not more than 5 years, or both.
(c) For a violation of section 5318(2) of this title or a regulation prescribed under section 5318(2), a separate violation occurs for each day the violation continues and at each office, branch, or place of business at which a violation occurs or continues.
[5] "Currency" is defined in 31 C.F.R. § 103.11 as:
The coin and currency of the United States or of any other country, which circulate in and are customarily used and accepted as money in the country in which issued. It includes U.S. silver certificates, U.S. notes and Federal Reserve notes, but does not include bank checks or other negotiable instruments not customarily accepted as money.
[6] A "financial institution" is defined in 31 U.S.C. § 5312(a)(2) as:
(A) an insured bank (as defined in section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h)));
(B) a commercial bank or trust company;
(C) a private banker;
(D) an agency or branch of a foreign bank in the United States;
(E) an insured institution (as defined in section 401(a) of the National Housing Act (12 U.S.C. 1724(a)));
(F) a thrift institution;
(G) a broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);
(H) a broker or dealer in securities or commodities;
(I) an investment banker or investment company;
(J) a currency exchange;
(K) an issuer, redeemer, or cashier of travelers' checks, checks, money orders, or similar instruments;
(L) an operator of a credit card system;
(M) an insurance company;
(N) a dealer in precious metals, stones or jewels;
(O) a pawnbroker;
(P) a loan or finance company;
(Q) a travel agency;
(R) a licensed sender of money;
(S) a telegraph company;
(T) an agency of the United States Government or of a State or local government carrying out a duty or power of a business described in this clause (2); or
(U) another business or agency carrying out a similar, related, or substitute duty or power the Secretary of the Treasury prescribes.
Furthermore, 31 C.F.R. § 103.11 provides:
Each agency, branch, or office within the United States of any person doing business in one or more of the capacities listed below:
(1) A bank (except bank credit card systems);
(2) A broker or dealer in securities;
(3) A person who engages as a business in dealing in or exchanging currency as, for example, a dealer in foreign exchange or a person engaged primarily in the cashing of checks;
(4) A person who engages as a business in the issuing, selling, or redeeming of travelers' checks, money orders or similar instruments, except one who does so as a selling agent exclusively or as an incidental part of another business;
(5) A licensed transmitter of funds, or other person engaged in the business of transmitting funds abroad for others.
[7] A "bank" is defined in 31 C.F.R. § 103.11 as:
(a) Each agency, branch or office within the United States of any person doing business in one or more of the capacities listed below:
(1) A commercial bank or trust company organized under the laws of any State or of the United States;
(2) A private bank;
(3) A savings and loan association or a building and loan association organized under the laws of any State or of the United States;
(4) An insured institution as defined in section 401 of the National Housing Act;
(5) A savings bank, industrial bank or other thrift institution;
(6) A credit union organized under the laws of any State or of the United States; and
(7) Any other organization chartered under the banking laws of any State and subject to the supervision of the bank supervisory authorities of a State.
(b) Each agent, agency, branch or office within the United States of a foreign bank.
[8] A "person" is defined in 31 C.F.R. § 103.11 as:
An individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, a joint venture, or other unincorporated organization or group, and all entities cognizable as legal personalities.
[9] A "transaction in currency" is defined in 31 C.F.R. § 103.11 as:
A transaction involving the physical transfer of currency from one person to another. A transaction which is a transfer of funds by means of bank check, bank draft, wire transfer, or other written order, and which does not include the physical transfer of currency is not a transaction in currency within the meaning of this part.
[10] Although the government states that it is not charging that Gimbel had an obligation to file a CTR himself, see Government's Response to Defendant's Objection and Appeal and Motion for Oral Argument at 2, the Indictment does allege that Gimbel acted as a "financial institution, a financial agency, and an agent and bailee for other persons for whom he conducted transactions in currency." Indictment, Count 1, ¶ 1(k). Whether Gimbel actually acted in any of the forementioned capacities is a question of fact which cannot be determined here. However, the court finds that the plain meaning of the term "financial institution," as it is defined by statute and regulation, see supra note 6, would be strained to cover a person such as Gimbel. But see United States v. Orozco-Prada, 732 F.2d 1076, 1079 (2d Cir.1984) (conviction of individual termed a "financial institution" upheld without discussion). The laws and regulations dealing with domestic currency transactions do not speak of "financial agencies."
[11] In 1980, Form 4789 was revised by the Secretary to include the directive that: "Multiple transactions by or for any person which in any one day total more than $10,000 should be treated as a single transaction if the financial institution is aware of them." The defendant challenges this provision as an instance of unauthorized rulemaking by the Secretary in that it was not validated by regulation and was not promulgated according to the notice and comment provisions set forth in the Administrative Procedure Act, 5 U.S.C. §§ 551-559. He cites a recent unpublished opinion holding that the form used for reports of importing or exporting monetary instruments is invalid because the notice and comment procedures were not observed. See United States v. Two Hundred Thousand Dollars ($200,000) in United States Currency, 590 F.Supp. 866 (S.D.Fla.1984) (Order Granting Claimant Palzer's Motion to Dismiss, Without Prejudice). See also United States v. Levy, 533 F.2d 969, 975 (5th Cir.1976). But see United States v. Holroyd, 732 F.2d 1122, 1124 (2d Cir. 1984).
The enabling act, 31 U.S.C. § 5313, gives the Secretary a broad grant of authority in that:
When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction at the time and in the way the Secretary prescribes.
The Act allows the Secretary to decide the amount and circumstances which generate the mandatory report, so it does not appear that the Secretary has not acted outside of the scope of his delegated authority in requiring that a bank must file a CTR if it is aware that one customer made aggregate transactions totalling over $10,000 in a single day.
[12] Although this form is not included on the face of the Indictment, it is referred to there throughout. See, e.g., Count II at ¶ 4. Thus, the Court takes judicial notice of this form and offers it here as a court exhibit.
[13] The court also reviewed United States v. Orozco-Prada, 732 F.2d 1076 (2d Cir.1984); United States v. Eisenstein, 731 F.2d 1540 (11th Cir. 1984); United States v. Sans, 731 F.2d 1521 (11th Cir.1984); United States v. Puerto, 730 F.2d 627 (11th Cir.1984); United States v. Kaatz, 705 F.2d 1237 (10th Cir.1983); United States v. Hajecate, 683 F.2d 894 (5th Cir.1982); United States v. Anderez, 661 F.2d 404 (5th Cir.1981); United States v. Konefal, 566 F.Supp. 698 (N.D. N.Y.1983). Although these cases deal with criminal proceedings brought under the Bank Secrecy Act, none of them precisely address the issue at hand.
[1] The government notes, however, that it is not conceding that Gimbel "is not liable for falsification of information or the concealment of his banking activity, no matter what the purpose or whose currency it involves."
[2] In reaching its decision, the court has reviewed four recent decisions submitted by the parties: United States v. Cook, 745 F.2d 1311 (10th Cir.1984) (defendant gave fictitious names and social security numbers when making transactions with his own currency); United States v. Denemark, No. 84-185-CR-T-15 (M.D. Fla. January 18, 1985) (order denying defendant's motion to dismiss charges of concealing the aggregate daily amounts of currency transactions); United States v. Giancola, No. 84-71-Cr-Orl-11 (M.D.Fla. October 25, 1984) (order granting motion to dismiss portions of indictment because 31 C.F.R. § 103.22(a), does not impose a legal duty on a financial institution to file a currency transaction report with respect to multiple transactions conducted on the same day at different financial institutions, even though the financial institutions are part of the same banking organization, where no single currency transaction or set of currency transactions on the same day at a given financial institution exceeded $10,000); United States v. Sanchez Vazquez, 585 F.Supp. 990 (N.D.Ga.1984) (indictment ruled sufficient to charge offenses in connection with alleged scheme to cause banks to fail to file required currency transaction reports when defendant engaged in transactions at different branches of the same bank). None of these cases directly applies to the case at hand.
[3] See United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983).
[4] The government says that it now agrees with this conclusion. See Government's Reply at 4.
[5] The defendant challenges this provision as unauthorized rulemaking. See Decision and Order, at 722 n. 11. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1723690/ | 699 So. 2d 346 (1997)
Randy FLETCHER, et al., Appellants,
v.
STATE of Florida, Appellee.
No. 96-3075.
District Court of Appeal of Florida, Fifth District.
September 26, 1997.
James B. Gibson, Public Defender, and Brynn Newton, Assistant Public Defender, Daytona Beach, for Appellant.
Robert A Butterworth, Attorney General, Tallahassee, and Kellie A. Nielan, Assistant Attorney General, Daytona Beach, for Appellee.
PETERSON, Judge.
All of the appellants had been separately convicted of various sex offenses prior to the enactment of the Florida Sexual Predators Act, section 775.21, Florida Statutes (Supp. 1996). Subsequent to enactment, the state invoked the provisions of subsection 775.21(4)(a)2 to have the appellants classified as sexual predators. The appellants claim that: (1) section 775.21 violates the constitutional prohibition against the enactment of ex post facto laws and (2) the trial court had no jurisdiction to label them as sexual predators because the declaration modified their sentences more the 60 days after their imposition in violation of Florida Rule of Criminal Procedure 3.800.
The overriding purpose of the legislation designating certain individuals as "sexual *347 predators" and requiring these individuals to register themselves is to protect the public from repeat sex offenders, sex offenders who use violence, and those who prey on children. See § 775.21(3), Fla. Stat. (Supp. 1996). Courts are almost universal in recognizing that registration requirements for sexual predators are designed to enable the public to protect itself from dangers posed by sexual predators who are widely regarded as having high risks of recidivism. These courts recognize that registration statutes are regulatory in nature and do not constitute punishment subject to constitutional ex post facto challenges. See Doe v. Poritz, 142 N.J. 1, 662 A.2d 367 (1995); State v. Ward, 123 Wash.2d 488, 869 P.2d 1062 (1994); State v. Noble, 171 Ariz. 171, 829 P.2d 1217 (1992); People v. Adams, 144 Ill. 2d 381, 163 Ill. Dec. 483, 581 N.E.2d 637 (1991). Cf. Rowe v. Burton, 884 F.Supp. 1372(D.Alaska 1994) and In re Reed, 33 Cal. 3d 914, 191 Cal. Rptr. 658, 663 P.2d 216 (1983). We hold that section 775.21 violates neither the ex post facto clause nor Rule 3.800 because the designation "sexual predator" is neither a sentence nor a punishment but simply a status resulting from the conviction of certain crimes.
AFFIRMED.
DAUKSCH and HARRIS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315143/ | 158 Ga. App. 371 (1981)
280 S.E.2d 396
HENDRICKS et al.
v.
HUBERT.
61229.
Court of Appeals of Georgia.
Decided April 24, 1981.
Ted B. Herbert, for appellants.
Robert H. Owen, for appellee.
BIRDSONG, Judge.
This is an appeal from the overruling of the defendants-appellants' motion to set aside a judgment. The plaintiff-appellee brought this civil suit in the State Court of Cobb County to recover rent under a lease against the defendants-appellants. When the case came on for trial before a judge without a jury, judgment was entered as follows: ". . . the issues having been duly tried and a decision having been rendered,
"It is Ordered and Adjudged:
"That the Plaintiff O. C. Hubert recover of the Defendants Paul H. Hendricks and Love's Bar B-Q, Inc. [rents, interest, attorney fees and costs]..." The defendants did not appear either personally or by counsel at the call of the case. Code Ann. § 24-3341 authorizes the striking of defendants' answer under such circumstances.
The defendants in their amended motion contended they had defenses to the action and offered excuses as to why their counsel did not appear. In essence the claim is that they failed to demand a jury trial and to appear because of a misunderstanding between two partners in the firm concerning responsibility for handling the case.
The appellants allege the trial court erred in overruling their motion to set aside judgment, and that it was error to enter a judgment against the appellants in favor of the appellee without first striking appellants' pleadings as required by local rules of the State *372 Court of Cobb County, Georgia and Code Ann. § 24-3341.
1. The judgment is not "void on its face" under the provisions of Code Ann. § 24-3341. Rakestraw v. Hamby, 115 Ga. App. 868 (156 SE2d 308); Johnson v. Cook, 130 Ga. App. 575 (203 SE2d 882). The appellants, relying on Sewell v. Leifer, 144 Ga. App. 36 (240 SE2d 584) and Reynolds v. ARC Services, 132 Ga. App. 863 (209 SE2d 653), allege the trial court did not first strike appellants' pleadings without requiring any evidence. In response, the appellee shows that the brief to the trial court opposing the motion to set aside the default judgment, informed the trial court "the motion to strike the defensive pleadings was made by appellee in open court and pursuant to the provisions of Code Ann. § 24-3341 such motion was granted and the defensive pleading was duly struck from the record in open court." A motion made during the trial need not be reduced to writing. Goforth v. Fogarty Van Lines, 143 Ga. App. 432 (238 SE2d 768); Code Ann. § 81A-107 (b) (1). The burden is on the appellant to show legal error. Goforth, supra. The appellant has submitted no transcript to refute the appellee's assertion and has failed to carry its burden.
2. For the reasons expressed in Division 1, supra, appellants' second enumeration that "it was error to allow appellee to present evidence against appellant without first striking the pleadings of the appellants" is likewise without merit.
3. With reference to the appellants' claim of "excusable neglect" (as a basis for opening default (Code Ann. § 81A-155 (b)), we note that "excusable neglect" does not mean "gross negligence," and default should never be opened for capricious or fanciful reasons. Early Co. v. Bristol Steel &c. Works, 131 Ga. App. 775 (206 SE2d 612) (cited in Shulman, Ga. Prac. & Proc. 140-141, § 8-9) provides "if a party, on reading a writ, reaches the wrong conclusion and therefore pays no attention to the process and fails to answer, his neglect is inexcusable and gross, and . . . the trial court has no authority to open a default for reasons which fall short of a reasonable excuse for the negligent failure to answer." Jordan v. Clark, 119 Ga. App. 18, 19 (165 SE2d 922); Early Co. v. Bristol, supra. We find no abuse of the trial judge's discretion in failing to find excusable neglect.
Judgment affirmed. Shulman, P. J., and Sognier, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260583/ | 238 P.3d 123 (2010)
In re the MARRIAGE OF Paula R. REEDER, Petitioner/Appellee,
v.
Edward H. JOHNSON, Respondent/Appellant.
No. 1 CA-CV 09-0247.
Court of Appeals of Arizona, Division 1, Department B.
March 23, 2010.
*124 Joseph C. Richter, PC By Joseph C. Richter, Scottsdale, Attorney for Petitioner/Appellee.
S. Alan Cook, PC By S. Alan Cook, Phoenix, Attorney for Respondent/Appellant.
OPINION
BARKER, Judge.
¶ 1 Respondent/Appellant Edward Johnson appeals from the trial court's denial of his motion for new trial and challenges the court's approval of an Arizona Rule of Family Law Procedure 69 ("Rule 69") settlement agreement in a marriage dissolution action. For the following reasons, we reverse and remand to the family court for proceedings consistent with this opinion.
Facts and Procedural Background
¶ 2 Johnson and Paula Reeder were married on May 19, 1990. Reeder filed a petition for dissolution of their marriage on December 21, 2007. Johnson and Reeder did not have children during their marriage. On April 23, 2008, Johnson and Reeder attended mediation with Barry Brody acting as a paid, private mediator. Brody was also on the *125 superior court's approved list to serve as a judge pro tem at the time the mediation took place, but he had not been assigned by the court to act on this particular case. The parties reached a settlement and then agreed to use Brody as a judge pro tem to put a Rule 69 agreement on the record, using a tape recorder as the recording device.[1] Reeder requested that the court vacate the trial date because of the settlement. She then filed a notice of lodging decree of dissolution of marriage on August 5, 2008.
¶ 3 On August 25, Johnson filed an objection to the notice of lodging and a motion to set aside the Rule 69 agreement. Johnson argued that the division of property was not equitable and the decree did not conform to the Rule 69 agreement. The court heard oral argument then overruled Johnson's objections and signed the decree. The court stated: "If this challenge to the Rule 69 Agreement were sufficient, there really would not be a Rule 69 Agreement that was much worth the paper it was printed on." "As to Respondent's claim for lack of understanding, Mr. Brody, acting as a Judge Pro Tem by agreement of the parties, explained the terms of the agreement very clearly. It was not a very complicated agreement, and Respondent answered affirmatively to all the questions."
¶ 4 Johnson filed a motion for new trial and motion to vacate the decree on October 23, 2008. That motion alleged that there was no valid Rule 69 agreement because the legal requisites were not met. It argued that the parties utilized Brody's services as a mediator and "counsel has looked in the Court's file in this cause and there is no order in the file appointing Barry Brody as a judge pro tempore in this case." The motion also set forth that Johnson never signed a settlement agreement or consent decree. The trial court denied Johnson's motion for new trial.
¶ 5 Johnson filed a timely notice of appeal. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") sections 12-2101(C), (F)(1) (2003).
Discussion
¶ 6 We review de novo the interpretation of rules of procedure. State v. Williams, 209 Ariz. 228, 235, ¶ 30, 99 P.3d 43, 50 (App.2004). "[W]e are not constrained by the legal conclusions from facts found or inferred in the judgment of the trial court nor by findings of the trial court in questions of law or mixed questions of law and fact." Enter. Leasing Co. of Phoenix v. Ehmke, 197 Ariz. 144, 148, ¶ 11, 3 P.3d 1064, 1068 (App.1999).
1. The Applicability of Rule 69
¶ 7 Rules of procedure, including the family court rules, are interpreted according to the principles of statutory interpretation. Ariz. Dep't of Revenue. v. Superior Court, 189 Ariz. 49, 52, 938 P.2d 98, 101 (App.1997). In statutory interpretation, the primary goal "is to find and give effect to legislative intent." Mathews ex rel. Mathews v. Life Care *126 Ctrs. of Am., Inc., 217 Ariz. 606, 608, ¶ 6, 177 P.3d 867, 869 (App.2008). The plain language of the rule is the best indicator of that intent. Id. If the plain language is clear and unambiguous then we give it effect and do not use other methods of statutory interpretation. Id. Where the rule is ambiguous, we consider the rule's "context, subject matter, historical background, effects and consequences, and spirit and purpose." Id. (quoting State v. Ross, 214 Ariz. 280, 283 ¶ 22, 151 P.3d 1261, 1264 (App.2007)).
¶ 8 Rule 69 provides:
Agreements between the parties shall be binding if they are in writing or if the agreements are made or confirmed on the record before a judge, commissioner, judge pro tempore, court reporter, or other person authorized by local rule or Administrative Order to accept such agreements.
Ariz. R. Fam. L.P. 69. The rule is clear in defining two types of agreements in family law matters that are binding: (1) written agreements between the parties, and (2) agreements made or confirmed on the record before a person authorized to accept such agreements, including a judge pro tempore or other person authorized by local rule. Id. Here, Reeder asserts that the agreement is valid because it was made on the record before a judge pro tem. We address what constitutes "on the record before a ... judge pro tem" or "other person authorized by local rule or Administrative Order to accept such agreements."
a. "On the Record" Under Rule 69
¶ 9 Rule 69 is adapted from, yet not identical to, Arizona Rule of Civil Procedure 80(d). Id. cmt. Rule 80(d) states that "[n]o agreement or consent between parties or attorneys in any matter is binding if disputed, unless it is in writing, or made orally in open court, and entered in the minutes." Ariz. R. Civ. P. 80(d). Normally, we would look to case law under Rule 80(d) to help us with the interpretation of Rule 69. See Ariz. R. Fam. L.P. 1 cmt. ("Wherever the language in these rules is substantially the same as the language in other statewide rules, the case law interpreting that language will apply to these rules."). Although the policy behind both rules is the same, the language in Rule 69 is substantially different from that in Rule 80(d). Canyon Contracting Co. v. Tohono O'Odham Housing Auth., 172 Ariz. 389, 393, 837 P.2d 750, 754 (App.1992) ("The policy behind Rule 80(d) is to relieve the trial court from having to resolve factual disputes as to the existence and terms of an alleged settlement agreement."). If not in writing, Rule 80(d) requires that the agreement be "made orally in open court, and entered in the minutes." In contrast, Rule 69 only requires that the agreement be "on the record" before one of the enumerated people. The committee comment to Rule 69 helps to clarify the meaning of "on the record." It states:
A proceeding or agreement is "on the record" if it is conducted or memorialized by a court reporter in accordance with A.R.S. §§ 12-221 to 12-225, or if recorded by any recording device authorized by law. A.R.S. § 38-424 currently authorizes the use of "tape recorders or other recording devices in lieu of reporters or stenographers."
Ariz. R. Fam. L.P. 69 cmt. Under Rule 69, in contrast to Rule 80(d), "on the record" does not mean that the agreement must be made orally in open court. The agreement merely must be memorialized by an authorized recording device, such as the circumstances here. Therefore, we find that the agreement between Reeder and Johnson was "on the record" for purposes of Rule 69.
b. Authority to Accept a Rule 69 Agreement
¶ 10 We next determine if Brody was authorized to accept the agreement either as judge pro tem or mediator. The parties do not dispute that Brody was acting as a mediator until they agreed that he would act as judge pro tem for purposes of putting a Rule 69 agreement on the record. For this reason, we discuss whether Brody was an authorized person under Rule 69 in either capacity.
i. Judge Pro Tempore
¶ 11 A judge pro tem "shall have all the judicial powers of a regular elected judge of the court to which the person is appointed." *127 Ariz. Const. art. 6, § 31. The administrative order appointing Brody as judge pro tem states:
IT IS ORDERED, effective July 1, 2007, designating the attached list of attorneys as Judges Pro Tempore of this Court for the period of July 1, 2007 through June 30, 2008, to hear and decide matters assigned to them as Judges Pro Tempore by the Presiding Judge, by any departmental presiding judges, or by the Judicial Branch Administrator without further written notice.
In re the Appointment of Attorneys as Judges Pro Tempore, Maricopa County Super. Ct. Admin. Order No. 2007-086 (June 25, 2007) (hereinafter "Admin. Order") (emphasis added). Thus, a judge pro tem has the same powers as a regular elected judge to decide those matters assigned to him by the presiding judge, departmental presiding judge, or the judicial branch administrator. "Mediation" is defined as a "voluntary confidential process in which parties enter into... private discussions with a neutral third party to resolve the dispute. Mediation can be conducted by a conciliation court counselor, a mediator assigned by the court from a court roster of mediators, or a private mediator retained by the parties." Ariz. R. Fam. L.P. 66(B)(4). Here, Brody was acting as a paid private mediatorhe was not appointed by the court to serve in that role.
¶ 12 Neither party suggests that Brody was assigned to act as a judge pro tem in the mediation, only that the parties agreed he could act as judge pro tem at the conclusion of the mediation. However, parties cannot stipulate to assign a judge pro tem to their case. One can only imagine the judicial chaos that would occur if parties, on their own, could "assign" a judge pro tem to a matter already presided over by a superior court judge. To serve as a judge pro tem in this matter, Brody would have to have been assigned to it by the presiding judge, departmental presiding judge, the judicial branch administrator, or some person expressly authorized by the court to make that assignment. Because Brody was not assigned to this matter by an appropriate judicial authority, neither he nor the parties could change his status from that of a mediator to that of a judge pro tem in this case or any case.[2]
ii. Mediator
¶ 13 A mediator is not specifically listed in Rule 69 as having authority to place an agreement on the record. However, Rule 69 states that other persons "authorized by local rule or Administrative Order to accept such agreements" also qualify. Ariz. R. Fam. L.P. 69. We turn to the local rules.
¶ 14 The pertinent local rule for Maricopa County states that "[a]ny agreements reached as a result of mediation or open negotiation must be placed in writing, signed by both parties and presented to the court.... Upon the court's entry of a written order to that effect, the mediation agreement shall be considered binding." Ariz. Local R. Prac.Super. Ct. (Maricopa) 6.10(b)(7). Local Rule 6.10(b)(7) requires mediators to place agreements in writing and present them to the court. Id. Thus, by local rule mediators are not extended the authority to create a binding agreement by placing it "on the record."[3]
*128 ¶ 15 Thus, application of the plain language of Rule 69 leads us to conclude that the settlement agreement at issue here was not "made or confirmed" by a person authorized to accept such agreements. Accordingly, it may not be enforced pursuant to that rule.[4]
2. Waiver Arguments
¶ 16 Reeder also argues that Johnson waived any challenge to Brody's authority to accept the agreement by not objecting at the time the agreement was placed on the record. She supports this argument by citing In re Estate of de Escandon, 215 Ariz. 247, 159 P.3d 557 (App.2007). In Escandon, a court commissioner was not appointed as a judge pro tem in the superior court because of an oversight by the Maricopa County Board of Supervisors. Id. at 248, ¶¶ 4-5, 159 P.3d at 558. This court upheld the ruling of the court commissioner under the doctrine of de facto officers because the commissioner was occupying the office of judge pro tem under color of a known appointment that only suffered from a procedural defect. Id. at 250, ¶ 10, 159 P.3d at 560. In that situation, the court found it would be a waste of resources to require "relitigation of matters decided by a competent, unbiased judge." Id. (quoting Gates v. City of Tenakee Springs, 954 P.2d 1035, 1038 (Alaska 1998)).
¶ 17 The facts of Escandon are not analogous to the facts in this case. Here, the challenge to Brody's authority is not a procedural defect regarding his qualifications as a judge pro tem on a matter to which he was assigned. Rather, it is a challenge to the supposed right of the parties to invoke the use of a judge pro tem to act without assignment (or prior approval) by the proper judicial authority. Thus, the waiver argument that we accepted in Escandon is not compelling here.
¶ 18 Reeder additionally asserts that Johnson did not timely object to her proposed form of decree. The trial court found the objection untimely at the time of oral argument. This was error.
¶ 19 The notice of lodging was filed on August 5, 2008. Johnson had ten business days to oppose the motion under Arizona Rule of Family Law Procedure 35(A)(3).[5] Ariz. R. Fam. L.P. 35(A)(3) ("Any *129 party opposing the motion shall file any answering memorandum within ten (10) days thereafter."); id. 4(A) ("When the period of time ... is less than eleven (11) days, intermediate Saturdays, Sundays and legal holidays shall not be included in the computation."). This would have made the objection due by August 19 and untimely. However, Johnson had five extra calendar days in which to file the objection because Reeder served the notice of lodging by mail. Id. 4(D). The fifth day from August 19 was Sunday, August 24. Thus, the filing period ran to Monday, August 25. Id. 4(A) ("The last day of the period so computed shall be included, unless it is a Saturday, a Sunday or a legal holiday, in which event the period runs until the end of the next day which is not a Saturday, a Sunday or a legal holiday."). Therefore, the objection was timely filed on August 25, 2008.[6]
Conclusion
¶ 20 For the foregoing reasons, we reverse the trial court's judgment approving this agreement pursuant to Rule 69 and remand this matter for further proceedings consistent with this opinion.[7] Both Reeder and Johnson request an award of attorneys' fees and costs on appeal pursuant to A.R.S. § 25-324 (Supp.2009). In our discretion, we decline to award fees. As the prevailing party, Johnson is entitled to an award of his costs on appeal. A.R.S. § 12-341 (2003).
CONCURRING: PATRICIA K. NORRIS, Presiding Judge and PETER B. SWANN, Judge.
NOTES
[1] The following dialogue took place at mediation:
[Brody]: The parties to their good credit have resolved and finalized the terms of settlement. They have authorized me by their agreement to act as a Judge pro tem of the Maricopa County Superior Court and to dictate the terms of the settlement on to the record. Let me swear the parties in while I'm thinking about it....
. . . .
[Brody]: Okay. Sir, did you hear each and every term I dictated on to the record?
Edward Johnson: Yes I did.
[Brody]: And did you understand those terms?
Edward Johnson: Yes.
[Brody]: All things considered, are they fair and equitable?
Edward Johnson: Yes.
[Brody]: Did you receive sufficient disclosure from your Wife and her attorney to make an informed decision?
Edward Johnson: Yes.
[Brody]: No one's threatened you today to enter into this agreement?
Edward Johnson: [unintelligible]
[Brody]: Do you wish to be bound by these terms?
Edward Johnson: [unintelligible]
[Brody]: All right. As Judge pro tem of the Maricopa County Superior Court, I do find that there has been sufficient and adequate disclosure of information, that the parties knowingly, freely and intelligently are [sic] entered into this agreement. They wish to be bound by the terms of the agreement and that the agreement is fair and equitable. Accordingly, pursuant to Rule 69 of the Arizona Rules of Family Law Procedure, I do find that the agreement is binding on the parties.
[2] Reeder argues that as the rule permits court reporters to confirm an agreement on the record, it should permit a judge pro tem to do the same thing, whether or not a judge pro tem is assigned to the case. We disagree. As an example of the difference in roles, we doubt that if a court reporter took a tape recording of an agreement, that would be in compliance with the rule. An agreement is confirmed before a court reporter within the meaning of the rule, only if in recording the agreement the court reporter is acting in his or her official capacity and recording the proceeding as he or she would for a deposition or other court proceeding. A.R.S. § 12-223(A) (2003); see Ariz. R. Fam. L.P. 69 cmt. ("This rule also contemplates that the parties may reach binding agreements at the time a deposition is conducted if both parties are present or represented by counsel, and the agreement is recited on the record.").
[3] The limitation on the authority of judges pro tem serves a valuable policy goal. Were private mediators allowed to charge a fee for their services with the understanding that they could transform themselves into judicial officers to place the imprimatur of the court on their work, the rules would effectively authorize judges pro tem to use their official status to leverage their private income. We cannot conceive that the Supreme Court intended to approve such a practice when it drafted Rule 69.
[4] We hold only that the agreement is not enforceable pursuant to Rule 69. We do not address, as the issue is not before us, whether the agreement is valid and enforceable as a matter of contract law. See Emmons v. Superior Court, 192 Ariz. 509, 512, ¶ 14, 968 P.2d 582, 585 (App.1998) (holding, in a case not involving the enforceability of a settlement agreement under a court rule, that "enforcement of settlement agreements . . . are governed by general contract principles"). Further, Johnson also argues that the trial court erred by failing to conduct an evidentiary hearing pursuant to Sharp v. Sharp, 179 Ariz. 205, 877 P.2d 304 (App.1994). Because we have concluded the agreement is not enforceable pursuant to Rule 69, we need not address this argument.
[5] The "notice of lodging" was not a proposed judgment based upon a ruling by the court. See, e.g. Rexing v. Rexing, 11 Ariz.App. 285, 287, 464 P.2d 356, 358 (1970) ("After trial to the court, the judge advised counsel for the plaintiff husband (appellee herein) to prepare a formal written decree. Thereafter, that decree was lodged with the court and with appellant's attorney."); Foster v. Ames, 5 Ariz.App. 1, 2-3, 422 P.2d 731, 733 (1967) (court found appellee entitled to order confirming sale of property, a proposed form of order was filed with the court and mailed to appellant, appellant filed written objections three days later, and then court signed proposed form of order); see also Ross v. White, 46 Ariz. 304, 308-09, 50 P.2d 12, 14 (1935) (court held hearing and denied petition, parties submitted proposed forms of order, and the court signed appellee's proposed form of order). Rather, based on the substance of the pleading, the notice was essentially a motion to enter judgment based upon what one party considered to be a settlement agreement. See Trollope v. Koemer, 106 Ariz. 10, 13, 470 P.2d 91, 94 (1970) (characterizing defendant's Rule 12(b)(6) motion as a motion for a directed verdict); Rodriquez v. Williams, 104 Ariz. 280, 283, 451 P.2d 609, 612 (1969) (holding "we look to substance rather than to form" of pleadings and treating a motion for new trial as a motion to suspend the appeal and to reinstate the trial court's jurisdiction over the case). This is similar to a setting in which courts treat stipulations as joint motions. See Martinez v. Binsfield, 196 Ariz. 466, 467, 999 P.2d 810, 811 (2000) (finding the trial court properly treated the parties' stipulation to extend the arbitration deadline as a joint motion to continue); Powell-Cerkoney v. TCR-Montana Ranch Joint Venture, II, 179 Ariz. 180, 181, 877 P.2d 279, 280 (1994) (treating the parties' stipulation to withdraw petition for review as a motion to withdraw petition for review); Hyman v. Arden-Mayfair, Inc., 150 Ariz. 444, 444, 724 P.2d 63, 63 (App. 1986) (indicating the trial court treated the parties' stipulation to continue the case on the inactive calendar as a motion to continue). As such, Rule 35, pertaining to motions, rather than Rule 81, pertaining to judgments, applies here.
Reeder also asserts that the argument as to the lack of authority of the mediator to act as a judge pro tem was not asserted at that time. Even if true, we nonetheless cannot approve on appeal a process by which a judge pro tem essentially appoints himself to a case without authority from the court that has jurisdiction over the matter. Supra ¶ 12.
[6] Because the objection to the notice of lodging was timely filed, we reject Reeder's argument that the doctrine of laches precludes Johnson from objecting to the settlement.
[7] Neither of the parties challenges the finding that the marriage is irretrievably broken. Accordingly, pursuant to A.R.S. § 25-325(A), the portion of the decree that dissolves the marriage remains in place. All other provisions are vacated. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260917/ | 238 P.3d 1054 (2010)
2010 UT 51
The FUNDAMENTALIST CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS, an association of individuals, Petitioner,
v.
The Honorable Denise P. LINDBERG, Third District Court Judge, Respondent.
No. 20090859.
Supreme Court of Utah.
August 27, 2010.
*1056 Kenneth A. Okazaki, Stephen C. Clark, Richard A. Van Wagoner, Salt Lake City, James C. Bradshaw, Rodney S. Parker, Sandy, for petitioner.
Brent M. Johnson, Salt Lake City, for respondent.
Mark L. Shurtleff, Att'y Gen., Annina M. Mitchell, Randy S. Hunter, Timothy A. Bodily, Asst. Att'ys Gen., Salt Lake City, for State of Utah.
Mark L. Callister, Jeffrey L. Shields, Michael D. Stanger, Spencer E. Austin, Mark W. Dykes, Brandon J. Mark, Salt Lake City, for United Effort Plan Trust by Bruce R. Wisan.
Roger H. Hoole, Gregory N. Hoole, Salt Lake City, for Richard Jessop Ream, et al.
Michael D. Zimmerman, Salt Lake City, for Dan Johnson, Merlin Jessop, and William E. Jessop.
Peter Stirba, Meb W. Anderson, R. Blake Hamilton, Salt Lake City, for Hilldale City, Colorado City, and Helaman Barlow.
J. Ryan Mitchell, Salt Lake City, for Harker Dairy, LLC.
Terry Goddard, Att'y Gen., William A. Richards, Chad B. Sampson, Asst. Att'ys Gen., Phoenix, AZ, for State of Arizona.
DURRANT, Associate Chief Justice:
INTRODUCTION
¶ 1 This case concerns the United Effort Plan Trust ("UEP Trust" or "Trust")a trust originally formed in 1942 by what petitioners characterize as a fundamentalist religious group that was the predecessor of the Fundamentalist Church of Jesus Christ of Latter-Day Saints. The Trust was modified in 1998 so that it qualified as a charitable trust under Utah law. In 2006, the Utah Third District Court issued an order that modified the Trust again. This order was not appealed or otherwise challenged for nearly three years. In a petition for extraordinary writ, an association of members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (the "FLDS Association")[1] challenges the district court's modification and subsequent administration of this Trust as unconstitutional and in violation of Utah law. We hold that because the FLDS Association has delayed this challenge for nearly three years, and because during this time, many parties have engaged in numerous transactions in reliance on the Trust's modification, the FLDS Association's trust modification claims are barred by the equitable doctrine of laches. We also hold that all of the FLDS Association's remaining claims regarding trust administration, except one, are also barred by laches because they involve the same delay and prejudice as the modification claim. The claim that is not *1057 barred by laches is barred because it is not ripe for adjudication.
BACKGROUND
¶ 2 In 1942, the spiritual leadership of a fundamentalist religious movement called the "Priesthood Work" formed the United Effort Plan Trust. The UEP Trust stated that its purpose was "charitable and philanthropic," but conditioned membership in the Trust upon "consecration" of real and mixed property to the Trust. For this fundamentalist grouppredecessors of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (the "FLDS Church" or "Church")consecration was an act of faith whereby members deeded their property to the UEP Trust to be managed by Church leaders. Church leaders, who were also trustees, then used this property to minister to the needs of the members.
¶ 3 In 1986, some Trust property residents sued the UEP trustees for breach of fiduciary duty. The district court rejected those claims, finding that since the UEP Trust was charitable rather than private, the plaintiffs lacked standing to sue. In 1998, we reversed the district court's holding that the Trust was charitable.[2] We first noted that charitable trusts differ from private trusts because "`in a private trust[,] property is devoted to the use of specified persons who are designated as beneficiaries of the trust; whereas a charitable trust has as a beneficiary a definite class and indefinite beneficiaries within the definite class, and the purpose is beneficial to the community.'"[3] We then found that the UEP Trust was not a charitable trust because it was intended, from its inception, to benefit specified persons, namely the Trust's founders.[4]
¶ 4 In response to our decision, Rulon Jeffs, the sole surviving founder and beneficiary of the 1942 Trust, acting for himself and also in his capacity as president and Corporation Sole of the FLDS Church, along with the other trustees, executed the "Amended and Restated Declaration of Trust of the United Effort Plan" (the "1998 Restatement"). It is not disputed that the 1998 Restatement of the 1942 UEP Trust qualifies as a charitable trust. It broadened the class of beneficiaries beyond the founders of the Trust to all of those who "consecrate their lives, time[ ], talents, and resources to the building and establishment of the Kingdom of God on Earth under the direction of the President of the [FLDS] church." The 1998 Restatement provided that "in the event of termination of this Trust, whether by the Board of Trustees or by reason of law, the assets of the Trust Estate at that time shall become the property of the Corporation of the President of the [FLDS Church]."
¶ 5 In 2004, then-FLDS Church president, Warren Jeffs, the Trust, and the FLDS Church were sued in two separate tort actions: the first action alleged child sexual abuse, assault, and fraud primarily against Warren Jeffs; the second alleged civil conspiracy, fraud, breach of fiduciary duties, and other torts against Warren Jeffs, the FLDS Church, and the Trust. Rodney Parker of the law firm of Snow, Christensen & Martineau served as attorney for the Trust and the FLDS Church in these actions until he withdrew because his clients insisted upon a course of conduct with which he fundamentally disagreed, and because his clients had discharged him. Warren Jeffs, as controlling trustee, did not appoint a substitute attorney to defend the Trust in the litigation, leaving the Trust vulnerable to default judgments against it.
¶ 6 With this concern in mind, Mr. Parker filed motions in the district court asking the court to give notice to the Utah Attorney General ("Utah AG") and the Trust land residents before entering a default judgment against the Trust. In response, the Utah AG petitioned the district court for (1) removal of the trustees for breach of fiduciary duty; (2) an order compelling Warren Jeffs and the *1058 other trustees to appear and file an inventory, final report, and accounting of the administration of the Trust; and (3) appointment of a special fiduciary to serve until new trustees were appointed. The Utah AG's petition was filed in May 2005. Personal service was made on those trustees who could be found. Trustees who could not be served personally were served via substitute service. Publications were made where Trust participants resided.
¶ 7 In a June 2005 preliminary injunction, the district court suspended the trustees and appointed a special fiduciary for the Trust. The special fiduciary's powers and authority were outlined in various district court orders. The district court gave the special fiduciary authority to act on behalf of the Trust. The district court also ordered the suspended trustees to prepare an accounting, deliver records, and cooperate with the fiduciary, but the suspended trustees failed to comply with this order. The district court asked the special fiduciary to prepare a memorandum identifying issues the court needed to address before appointing new trustees. Ultimately, the special fiduciary expressed concern in a memorandum filed with the district court that the Trust needed to be reformed if new trustees were to be appointed.
¶ 8 On December 13, 2005, the district court entered an order that concluded the Trust could be reformed so that the special fiduciary could administer the Trust to meet the "just wants and needs" of the beneficiaries according to neutral, nonreligious principles. The district court cited Utah Code section 75-7-413 as its authority to use the doctrine of cy pres to modify the Trust. Cy pres is a common-law doctrine, now adopted by statute in Utah Code section 75-7-413, that courts may apply when a charitable purpose of a trust "becomes unlawful, impracticable, impossible to achieve, or wasteful."[5] Rather than allowing the Trust to fail in these situations, under the common law, courts would apply the trust "`to other charitable objects lawful in their character, but corresponding, as near as may be to the original intention of the [settlor].'"[6] The Utah Code's similar language allows a court faced with a trust whose purpose has become "unlawful, impracticable, impossible to achieve, or wasteful ... to modify or terminate the trust by directing that the trust property be applied or distributed ... in a manner consistent with the settlor's charitable purposes."[7]
¶ 9 The district court listed two reasons for using cy pres to reform the Trust. First, the court found that the trustees had breached their fiduciary duties of loyalty and prudent trust administration. Second, it found several Trust provisions to be "fundamentally flawed and unworkable."
¶ 10 The following three principles guided the district court's reformation of the Trust: First, the court would attempt to preserve the Trust's charitable intent. Second, the court would only give effect to the Trust's legitimate and legal purposes. Finally, the court would employ "neutral principles of law."
¶ 11 To meet its first goal of preserving the Trust's charitable intent, the district court had to first identify that intent. It characterized the 1998 Restatement as having at least two purposes: first, the Trust was to advance the religious doctrines and goals of the FLDS Church; and second, the Trust was to provide for the just wants and needs of the FLDS Church members. The FLDS Association characterizes each of these goals as religious because participation in the Trust was conditioned upon living according to Church principles, with the president of the FLDS Church being the ultimate arbiter of individual righteousness.
¶ 12 Using the second of its principlesto give effect only to the Trust's legitimate and legal purposesthe district court held that it could reform the Trust by excising the purpose of advancing the religious doctrines and *1059 goals of the FLDS Church to the degree that any of these were illegal. As examples of illegal doctrines it could not sanction, the district court listed "polygamy, bigamy, [and] sexual activity between adults and minors." The court instead focused its reformation on preserving the Trust's goal of providing for the just wants and needs of Trust participants, which it held was a "lawful religious purpose[ ]."
¶ 13 Despite finding a "lawful religious purpose," the third of the district court's principles mandated that the court reform the Trust using "neutral principles." The court understood this to mean that it could not resolve property disputes on the basis of religious doctrine. The district court's memorandum decision states,
[C]ourts are prohibited by the First Amendment from resolving "rights to the use and control of church property on the basis of a judicial determination that one group of claimants has adhered faithfully to the fundamental faiths, doctrines and practices of the church ... while the other group of claimants has departed substantially therefrom." In short, courts must separate that which is primarily ecclesiastical from that which is primarily secular, and must defer to ecclesiastical authority for ecclesiastical determinations.
But the district court felt that if FLDS ecclesiastical leaders were able to make ecclesiastical determinations about who participated in the Trust, many former or disaffected members of the FLDS Church who consecrated property to the Trust "could be excluded from consideration notwithstanding their prior consecrations to the Trust." The district court found this unacceptable. It resolved that the Trust needed to be modified so that the role of ecclesiastical leaders would be to provide "non-binding input" to future trustees. These trustees would then use a neutral set of criteria and their own "good judgment"informed but not bound by FLDS ecclesiastical adviceto determine the "just wants and needs" of the beneficiaries.
¶ 14 Ultimately, the district court concluded that implementation of these principles would require modifying each section of the Trust. These modifications included the following: stating that Trust property would only be used in furtherance of "legitimate Trust purposes" as identified by the court; allowing FLDS leaders to offer their nonbinding input, but granting the Board of Trustees the ultimate authority to determine who would be allowed to live on Trust property and what the Trust property residents' just wants and needs were; limiting the Board's power to order relocation or property sharing among Trust property residents to situations where the relocation arrangement was "necessary for legitimate Trust administration reasons"; and deleting or modifying the Trust's requirement that occupants of Trust land live according to Church doctrine. The goal of the district court was unambiguous: "A clear division must exist between the authority of the Board to act with respect to the Trust, and the authority of the priesthood to act with respect to the [FLDS Church] Plan."
¶ 15 The district court decided that the Trust's third section would also need to be modified to strip the FLDS Church president of several powers under the Trust. First, the district court would remove any requirement that the president of the FLDS Church approve any Board action. Since the 1998 Restatement gave the FLDS Church president power to appoint and remove trustees, the district court invited interested parties to suggest Trust modifications that would allow for a different method of appointing and removing trustees. Second, the district court modified the Trust to remove the president of the Church as trustee and as president of the Board of Trustees. The court felt this modification was necessary because it had just suspended Warren Jeffs, the FLDS president, as a trustee and because it wanted to keep the Church and the Church Plan separate from the Trust. Finally, the district court found that a reversionary clause that would cause the Trust to revert to the FLDS president in the event of termination needed to be altered because the court had just suspended the FLDS president's trusteeship for violation of his fiduciary duties to Trust beneficiaries, and because, in the event of reversion, the Trust assets *1060 might be used to further illegal FLDS practices.
¶ 16 In its order, the district court invited suggestions for reformation of the 1998 Restatement. It also formed an advisory board to aid the special fiduciary in administration of the Trust until trustees could be appointed. It was understood that the court would consider the members of the advisory board as candidates to become trustees. There were no active FLDS members on the advisory board. On October 25, 2006, the court entered an order reforming the Trust (the "2006 Reformed Trust"). This order was not appealed.
¶ 17 The 2006 Reformed Trust contains over 175 paragraphs compared to seventeen in the 1998 Restatement. The FLDS Association complains that those who had sued the UEP Trust took the "laboring oar" in drafting the 2006 Reformed Trust, and that their goal was to transform the FLDS culture and to liberate a people they felt belonged to a dangerous cult. The FLDS Association also complains that the religious mission and purpose of the Trust have been removedthat what was "fundamentally a religious institution guided by divine inspiration" is now its "wholly secular mirror image." The FLDS Association feels that the 2006 Reformation suppresses the FLDS Church's role "as the spiritual and economic center of life in the communit[y]."
¶ 18 The district court has retained jurisdiction over the administration of the Trust. It has instituted a process that allows Trust participants to petition to have the houses they live in distributed to them. The district court has expressed in a hearing that FLDS Church members are free to deed their houses over to any religious leader of their choice following distribution. Over the four-and-a-half years of the special fiduciary's administration, he has filed numerous reports with the district court. Some of the challenges the special fiduciary has faced in administering the Trust include the fact that Trust property has not been subdivided and multiple residents often live on one tax parcel. These conditions have complicated liquidation and distribution of Trust property. For instance, because the Trust's real property consists of several large parcels of land often containing several residences, if one of a parcel's residents fails to pay taxes, the parcel's other residents could face tax liens even if they have paid their fair share. The special fiduciary also complains that the suspended trustees' failure to cooperate with him has caused the fiduciary to expend significant time and effort to obtain information and records about the Trust and its property and that he has incurred significant costs and expense in discovering this information. He further asserts that the suspended trustees have actively interfered with his administration of the Trust.
¶ 19 But the FLDS Association, in turn, alleges that the district court and special fiduciary have engaged in religiously discriminatory behavior. The FLDS Association alleges that the special fiduciary has made numerous offensive and religiously discriminatory remarks, including characterizing FLDS Church leaders' determination of "just wants and needs" pursuant to scripture and revelation as the "whim of leadership," and "discriminating on the basis of religion"; referring to himself as the "State-Ordained Bishop" or "SOB" as a way of mocking the FLDS faith; and describing the process of Trust administration as a "sociological and psychological war" with the FLDS Association. The FLDS Association also alleges that, despite claims to the contrary and due to a fear of creating a "UEP II," the district court and the special fiduciary plan to implement a religious test to distribute Trust assets that would award outright deeds to non-FLDS Trust participants, but would impose a spendthrift trust on any Trust participant likely to donate Trust distributions to the FLDS Church.
¶ 20 On October 20, 2009, the FLDS Association brought these allegations to this court in a petition for extraordinary writ, filed under Utah Rule of Civil Procedure 65B. The petition asks this court to do the following: find that the district court's actions have violated FLDS Church members' First Amendment rights and their rights under Utah's constitution, declare that certain sections of Utah's Uniform Trust Code are unconstitutional as applied to the FLDS Association, *1061 enjoin the district court from taking further action in the underlying UEP Trust litigation, declare the district court's reformation of the Trust unconstitutional, terminate the reformed Trust, overturn the district court's authorization to sell certain Trust property deemed sacred by the FLDS Association, terminate the appointment of the special fiduciary, and provide any other appropriate relief. Willie Jessop, a representative of the FLDS Association and a member of the FLDS Church, filed an affidavit with this petition outlining FLDS religious beliefs and what are in his view intrusions by the district court and the special fiduciary into Mr. Jessop's practice of these beliefs. The FLDS Association has also filed a substantially similar lawsuit along with a substantially similar affidavit by Willie Jessop in federal district court.
¶ 21 The original interested individuals who sued the Trust in 2004 (the "Original Interested Individuals"), the Utah AG, the Arizona Attorney General (the "Arizona AG"), and the UEP Trust through the special fiduciary all filed oppositions to the FLDS Association's Petition for Extraordinary Writ. Among other things, they have alleged that the FLDS Association lacks standing, that it has other plain, speedy, and adequate remedies available, and that laches bar the FLDS Association's claims.
¶ 22 The FLDS Association then filed a rule 8A petition with this court for emergency relief. This petition centered around three separate actions taken by the district court and the special fiduciary. First, the district court had allowed the special fiduciary to begin seeking buyers for certain Trust property the FLDS Association claimed was sacred. Second, the special fiduciary had sold some of the Trust's dairy cows subject to a right to repurchase that was set to expire. Third, the district court had entered an order that asked the Utah AG and the special fiduciary to submit suggestions under seal regarding how the Trust could be administered in such a way that might avoid the kind of extensive litigation that continued to ensue. The FLDS Association's petition asked us to stop the sale of the Trust property they deemed sacred, extend the time for repurchase of the dairy cows, and reverse the district court's order that sealed the submissions by the Utah AG and the special fiduciary. The petition for emergency relief drew responses from the special fiduciary on behalf of the UEP Trust, Harker Dairy (the purchaser of the cows), the "Twin Cities" (Hilldale and Colorado City), and the Arizona AG. We denied the FLDS Association's Petition for Emergency Relief.[8]
¶ 23 We now address the FLDS Association's rule 65B Petition for Extraordinary Writ. We have jurisdiction pursuant to Utah Code section 78A-3-102(2) (Supp.2010).
STANDARD OF REVIEW
¶ 24 The FLDS Association bases its petition on rule 65B, which states that, so long as "no other plain, speedy and adequate remedy is available, ... relief may be granted... where an inferior court ... has exceeded its jurisdiction or abused its discretion."[9] Specifically, the FLDS Association alleges that the district court "committed an unprecedented abuse of discretion" when it reformed the UEP Trust. But parties who *1062 file petitions for extraordinary writ under Utah Rule of Civil Procedure 65B have "`no right to receive a remedy that corrects a lower court's mishandling of a particular case.'"[10] So even if the FLDS Association shows that the district court abused its discretion, extraordinary "[r]elief under rule 65B(d)(2) is completely at the discretion of [this court]."[11] Several factors inform our discretion to grant extraordinary relief, including the "`egregiousness of the alleged error, the significance of the legal issue presented by the petition, the severity of the consequences occasioned by the alleged error,' and any additional factors that may be regarded as important to the case's outcome."[12] While "there is no fixed limitation period governing the time for filing [extraordinary writs]," they "should be filed within a reasonable time after the act complained of has been done or refused," and "the equitable doctrine of laches is available to dismiss untimely writs."[13]
ANALYSIS
¶ 25 The FLDS Association's claims fall into two broad categories: first, that the district court's modification of the UEP Trust violated Utah law and the FLDS Association's members' constitutional rights; and second, that during the district court's ongoing administration of the Trust, the district court and the special fiduciary have engaged in conduct that also violates the FLDS Association's members' constitutional rights. In Part I, we hold that the FLDS Association's claims regarding the district court's modification of the Trust are barred by the equitable doctrine of laches. In Part II, we hold that all of the FLDS Association's remaining claims regarding the Trust's administration, except one, are also barred by laches. The claim that is not barred by laches is not ripe for our consideration.
I. THE FLDS ASSOCIATION'S CLAIMS REGARDING TRUST MODIFICATION ARE BARRED BY LACHES BECAUSE OF THE FLDS ASSOCIATION'S DELAY IN FILING THE CLAIMS AND THE PREJUDICE THAT HAS RESULTED
¶ 26 Because the FLDS Association has waited nearly three years from the date the district court modified the UEP Trust to challenge its modification and, in the interim, transactions have occurred and other parties have acted in reliance on the Trust's modification, the FLDS Association's claims are barred by the equitable doctrine of laches. The FLDS Association asserts that the district court modified the Trust in violation of Utah law and the federal and state constitutions, and that the continued administration of the Trust violates their constitutional rights. Despite the potential merit of these claims, the district court's order was never appealed, and the FLDS Association has waited nearly three years from the date of the Trust's modification to bring its case to this court. During this time, countless transactions have taken place in reliance on the Trust's modification. Accordingly, we dismiss these claims pursuant to the doctrine of laches.
¶ 27 There is no statute of limitations for bringing a rule 65B claim, but such claims "should be filed within a reasonable time after the act complained of has been done or refused."[14] And although laches is most often thought of as an affirmative defense to untimely claims brought by a plaintiff, we have held that "the equitable doctrine of laches is available to dismiss untimely writs."[15] We have called laches "`delay that works a disadvantage to another.'"[16] So, *1063 laches has two elements: (1) a party's lack of diligence and (2) an injury resulting from that lack of diligence.[17]
¶ 28 The length of time that constitutes a lack of diligence "depend[s] on the circumstances of each case," because "the propriety of refusing a claim is equally predicated upon the gravity of the prejudice suffered... and the length of [the] delay."[18] In determining whether to apply the doctrine of laches, we consider the relative harm caused by the petitioner's delay, the relative harm to the petitioner, and whether or not the respondent acted in good faith.[19] Further, "reasonable delay caused by an effort to settle a dispute does not invoke the doctrine of laches."[20]
¶ 29 In our 1975 case, Papanikolas Bros. Enterprises v. Sugarhouse Shopping Center Associates, we thoroughly explored the way Utah courts apply the doctrine of laches. There we held that a district court did not abuse its discretion in finding that the plaintiffs' claims were not barred by laches.[21] In that case, the defendants built a structure that encroached on a parking easement owned by the plaintiffs.[22] When the plaintiffs noticed the defendants building the structure, they promptly contacted the defendants to object.[23] The parties' lawyers exchanged letters, and significantly, over the next few months, the defendants attempted to negotiate a purchase of the plaintiffs' interest.[24] Eighteen months after first noticing the building of the structure, the plaintiffs sued to enforce the restrictive covenant that created the easement.[25] The defendants urged laches as a bar to enforcement.[26] We held that there was "not the same imminent necessity for early enforcement of demands" as might have existed before the conditions became fixed because the defendants had "openly defie[d] [the plaintiffs'] known rights," without any indication of "assent or abandonment of intent to oppose on the part of [the plaintiffs]," and because the plaintiffs' delay caused "no substantial harm" to the defendants.[27]
¶ 30 The facts of the case now before us could not be more starkly different. The district court finalized its modification of the UEP Trust in October 2006 after nearly a year of discussion and an invitation to interested parties to make suggestions for modification.[28] The order reforming the Trust was never appealed. The FLDS Association filed this petition over four years after the Utah AG had intervened, over four years after the special fiduciary had been appointed, and nearly three years after the district court had modified the Trust. This amounts to at least twice the length of time that the plaintiffs in Papanikolas Bros. waited. The FLDS Association's brief does not explain why the Association waited so long to challenge the Trust's reformation. But the FLDS Association's numerous complaints about the special fiduciary's administration of the Trust make clear it was not because the Association was unaware of the modification. Although the opposition briefs cite the FLDS Association's delay as a reason for this court to dismiss the petition, the FLDS Association does not respond with explanations as to why this delay is reasonable. Where in Papanikolas Bros. it was clear that the plaintiffs' negotiations with the defendants might have given them reason to delay litigation, here there were no discussions held with the district *1064 court until November 2008nearly two years after the Trust had been modified and over three years after the litigation began despite assurances by the court that participation was welcome. This delayed first contact with the district court spawned negotiations between the interested parties, who agreed to stay litigation in an effort to avoid the sale of certain Trust property. But these negotiations do not make the case for applying the doctrine of laches any less compelling. Unlike the prompt negotiations in Papanikolas Bros., these discussions came nearly two years after the act now complained of by the FLDS Associationthe district court's reformation of the Trust. Negotiations entered into nearly two years after events that formed the basis of a complaint do not excuse a nearly three-year delay in petitioning this court for extraordinary relief.
¶ 31 Additionally, the FLDS Association's silence during the Trust reformation process and the Trust's subsequent administration gave the district court every reason to believe that the reformation had occurred without opposition. Indeed, while the FLDS Association disagrees with the district court's application of the law, the court's motive appears to be protection of the beneficiaries' charitable interests, not defiance of FLDS Association members' rights under the Trust.
¶ 32 Because of the three-year delay in the face of invitations by the district court to participate, and because this delay did not occur under circumstances that might excuse it, such as prompt negotiations aimed at avoiding litigation, or under circumstances that might make us otherwise hesitant to apply the doctrine of laches, the FLDS Association has demonstrated a lack of diligence in filing this petition.
¶ 33 This lack of diligence has caused injury to those who relied on the Trust's modification during the FLDS Association's delay. The Utah AG aptly describes how the FLDS Association's delay has worked to the disadvantage of others:
In the meantime, the Special Fiduciary reasonably relied on the presumptively valid appointment and reformation orders. He has made choices over the years, many expressly approved by Judge Lindberg, that cannot be undone. He has incurred irrevocable obligations and expenses for the Trust during the last four years. Other interested persons, including Trust Participants who are not members of the Petitioner association, have also made irreversible decisions and changed their positions based on these unappealed and heretofore unchallenged final orders.
¶ 34 Further, the Original Interested Individuals, whose looming default judgments led to the district court's reformation of the Trust, have expressed that their settlements with the Trust were predicated upon the Trust's reformation. That is, "[h]ad it not been for the UEP Trust's reformation, the Original Interested Individuals would never have settled their lawsuits against the Trust." The FLDS Association's delay in filing this petition has injured the Original Interested Individuals because it has caused the Individuals to change positions on their own claims, and any relief we granted the FLDS Association would operate against the interests of the Original Interested Individuals.
¶ 35 In sum, many individuals have relied upon the district court's final order from over three years ago, and the FLDS Association has given no adequate explanation for its delay in appealing or otherwise petitioning for relief. The FLDS Association has shown a lack of diligence in challenging the modification of the Trust, and this lack of diligence has operated to the detriment of others. The FLDS Association offers no adequate explanation for its delay and no other circumstances exist that might make us otherwise hesitant to apply laches. Accordingly, we dismiss the FLDS Association's Trust modification claims pursuant to the doctrine of laches.
II. THE FLDS ASSOCIATION'S TRUST ADMINISTRATION CLAIMS ARE ALSO BARRED BY LACHES, EXCEPT ONE THAT IS NOT RIPE FOR OUR CONSIDERATION
¶ 36 The FLDS Association's remaining claims, many of which merely recharacterize *1065 its first claim, either suffer from the same lack of diligence as its Trust modification claims and are also barred by laches, except one claim that is barred because it is not ripe for our consideration. The FLDS Association claims that the continuing administration of the Trust violates its members' constitutional rights. The FLDS Association cites Colorado Christian University v. Weavera case that held unconstitutional publicly funded scholarships for students attending public, private, and sectarian, but not pervasively sectarian universities[29]for the propositions that the Establishment Clause forbids discrimination within and among religions, intrusive inquiry into religious matters, and forcing people to choose between their religious beliefs and government benefits. The FLDS Association complains of five actions taken by the district courtcharacterized as pertaining to the administration of the Trustthat the Association feels are constitutionally infirm.
¶ 37 But the first four of these actions either occurred before or as part of the district court's modification of the Trust and, just as the modification claims discussed in Part I, could have been and should have been brought three years ago. For instance, the FLDS Association first claims that the district court did not properly consider the special fiduciary's background and qualifications before selecting him. But the special fiduciary was selected before the Trust was modified. The FLDS Association next claims that the court improperly allowed FLDS detractors to take the "laboring oar" in drafting the reformed Trust. But this claim is really a recharacterization of the claim discussed in Part I, because it goes to the Trust's modification and not its subsequent administration. The FLDS Association's third claim that the Special Fiduciary and the individuals who sued the Trust openly shared with the court that their purpose in reforming the Trust was to transform FLDS culture and liberate the FLDS peoplealso goes to the modification of the Trust rather than its administration. The fourth claim complains that the advisory board that the district court selected consisted of enemies of the FLDS Church. But the advisory board was created by the district court's December 2005 order, issued ten months before the Trust was modified.
¶ 38 To the degree that any of these claims actually go to Trust administration and are not merely recharacterizations of the modification claims, any claims arising out of events that occurred during or before Trust modification suffer from the same defects as the FLDS Association's first claims: a lack of diligence and prejudice resulting from that lack of diligence. Here again, the FLDS Association could have brought these claims at least three years earlier. In the interim, parties have changed their positions, Trust participants have made irreversible decisions, and the special fiduciary has entered into irrevocable transactions and obligations. For the same reasons as discussed in Part I, these claims are barred by the equitable doctrine of laches.
¶ 39 Only the FLDS Association's fifth claim arises from facts that occurred after the Trust was modified. Here the FLDS Association alleges that the district court endorsed a religious test that would give former FLDS members outright deeds to Trust property but would relegate current and practicing FLDS members to receiving spendthrift trusts based on the concern that they might deed their property back to FLDS Church leaders. It alleges that taking FLDS members' religion into consideration when determining eligibility for transfers of property from the Trust violates the members' First Amendment rights by forcing them to choose between their religion and a government benefit.
¶ 40 But even on its face, the FLDS Association's last claim is not ripe. The ripeness doctrine "serves to prevent courts from issuing advisory opinions" on issues that are not ripe for adjudication.[30]
A dispute is ripe when a conflict over the application of a legal provision has sharpened into an actual or imminent clash of *1066 legal rights and obligations between the parties thereto. An issue is not ripe for appeal if there exists no more than a difference of opinion regarding the hypothetical application of a provision to a situation in which the parties might, at some future time, find themselves.[31]
An issue is not ripe, for instance, in a situation where even if we agree with the petitioner's legal analysis of an issue, such an analysis would have no application to the facts the petitioner alleges.[32] Even if we were to agree with the FLDS Association's assertion that district court relegation of FLDS Church members to receiving spendthrift trusts on the basis of their religion would violate the state and federal constitutions, that analysis would not apply to the facts the FLDS Association has alleged.
¶ 41 The FLDS Association does not allege that either the district court or special fiduciary has actually used religion as a factor in determining how to parse out property. It does not cite any instance where an active FLDS member received a lesser delegation of property because of his or her religious beliefs. So, the FLDS Association does not assert an "actual" clash of legal rights. And given the district court's and the special fiduciary's assertions both in district court hearings and at oral argument in this case that a religious test would not be imposeda position the FLDS Association acknowledges the special fiduciary has takensuch a clash does not seem "imminent," but rather merely "hypothetical." At most, the discussions the FLDS Association cites evince a concern shared by the district court and the special fiduciary that, without careful planning, Trust distributions could lead to the creation of a new trust containing many of the same attributes that have, on more than one occasion, landed the UEP Trust in Utah courts. But this does not mean that the district court "actually" has or "imminently" will use religion to discriminate against FLDS members, so this last claim is not ripe for our review.
¶ 42 Because most of the FLDS Association's Trust administration claims suffer from the same lack of diligence and resultant prejudice as its modification claims, those claims are also barred by the equitable doctrine of laches. The FLDS Association's claim that the district court might use religion as a basis for determining property distributions is not ripe because the FLDS Association does not allege that such discriminatory distributions have actually occurred or are imminent.
CONCLUSION
¶ 43 The FLDS Association was not diligent in challenging the district court's modification of the UEP Trust, and that lack of diligence has resulted in prejudice to numerous parties. Therefore, the FLDS Association's Trust modification claims are barred by the equitable doctrine of laches. The FLDS Association's remaining Trust administration claims suffer from the same lack of diligence and resultant prejudice and are similarly barred by laches, except for one claim that is barred because it is unripe for adjudication. Accordingly, we decline to reach the merits of these claims and dismiss the FLDS Association's Petition for Extraordinary Writ.
¶ 44 Chief Justice DURHAM, Justice PARRISH, Justice NEHRING, and Judge THORNE concur in Associate Chief Justice DURRANT'S opinion.
¶ 45 Court of Appeals Judge WILLIAM A. THORNE sat.
NOTES
[1] The FLDS Association currently petitioning is not the FLDS Church, nor the corporation of that church's president. Rather, the association describes itself as "The Fundamentalist Church of Jesus Christ of Latter-Day Saints, an association of individuals."
[2] Jeffs v. Stubbs, 970 P.2d 1234, 1239 (Utah 1998).
[3] Id. at 1252 (emphasis added) (quoting Olivas v. Bd. of Nat'l Missions of Presbyterian Church, 1 Ariz.App. 543, 405 P.2d 481, 485 (1965)).
[4] Id. at 1252-53.
[5] Utah Code Ann. § 75-7-413(1) (Supp.2010); see also In re Gerber, 652 P.2d 937, 939-40 & n. 4 (Utah 1982) (explaining the history of the common-law cy pres doctrine).
[6] Gerber, 652 P.2d at 939 (quoting Late Corp. of the Church of Jesus Christ of Latter-Day Saints v. United States, 136 U.S. 1, 56, 10 S.Ct. 792, 34 L.Ed. 478 (1890)).
[7] Utah Code Ann. § 75-7-413(1)(c).
[8] The FLDS Association's petitions and the responses thereto have spawned additional litigation. The Utah AG has moved to strike the response of the Twin Cities, which we granted to the degree that the Twin Cities brought new claims, and otherwise deferred. The Utah AG also moved to strike a supplement that added Lyle Jeffs and Willie Jessop as named petitioners in this action. We have deferred this motion. The FLDS Association has moved to strike exhibits and related arguments in the Utah AG's and special fiduciary's responses. We have deferred this motion. The Original Interested Individuals have moved to transmit the record of proceedings below. The FLDS Association has opposed this motion, and we have deferred it. Because of our resolution in this case, we find it unnecessary to rule on any of these deferred motions. Additionally, on August 19, 2010, the FLDS Association filed a Petition for Emergency Relief asking this court to enjoin the Third District Court from administering the UEP Trust until we render our decision in this case. The Utah AG, the Arizona AG, and the UEP Trust through the Special Fiduciary opposed this petition. The issuance of this opinion renders ruling on that petition unnecessary.
[9] Utah R. Civ. P. 65B(a), (d)(2) (emphasis added).
[10] State v. Laycock, 2009 UT 53, ¶ 7, 214 P.3d 104 (quoting State v. Barrett, 2005 UT 88, ¶ 23, 127 P.3d 682).
[11] Id. ¶ 8.
[12] Id. ¶ 9 (quoting Barrett, 2005 UT 88, ¶ 24, 127 P.3d 682).
[13] Renn v. Utah State Bd. of Pardons, 904 P.2d 677, 684 (Utah 1995).
[14] Renn v. Utah State Bd. of Pardons, 904 P.2d 677, 684 (Utah 1995).
[15] Id.
[16] Angelos v. First Interstate Bank, 671 P.2d 772, 777 (Utah 1983) (quoting Papanikolas Bros. Enters. v. Sugarhouse Shopping Ctr. Assocs., 535 P.2d 1256, 1260 (Utah 1975)).
[17] Id.
[18] Papanikolas Bros., 535 P.2d at 1260.
[19] See id.
[20] Id.
[21] Id. at 1261.
[22] Id. at 1258, 1260.
[23] Id. at 1260.
[24] Id.
[25] Id.
[26] Id.
[27] Id. at 1260-61 (internal quotation marks omitted).
[28] The district court's memorandum decision stated, "In accord with the order and timetable discussed at the November 7th hearing, all parties in interest are invited to provide the Court with their specific suggestions for reforming the Trust within the framework and principles provided by this Memorandum Decision."
[29] 534 F.3d 1245, 1250, 1269 (10th Cir.2008).
[30] State v. Ortiz, 1999 UT 84, ¶ 2, 987 P.2d 39; see also Clegg v. Wasatch Cnty., 2010 UT 5, ¶ 26, 227 P.3d 1243.
[31] Bodell Constr. Co. v. Robbins, 2009 UT 52, ¶ 29, 215 P.3d 933 (emphasis added) (internal quotation marks omitted); see also Utah Safe to Learn-Safe to Worship Coal., Inc. v. State, 2004 UT 32, ¶ 20, 94 P.3d 217 ("[A]n issue is not ripe for review where there is no actual or imminent clash between the parties." (internal quotation marks omitted)).
[32] See Bd. of Trs. v. Keystone Conversions, LLC, 2004 UT 84, ¶ 32, 103 P.3d 686 (declining to reach the merits of the appellant's argument because the appellant's claim of harm was purely hypothetical and not yet realized). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315152/ | 280 S.E.2d 494 (1981)
In The Matter Of The WILL OF Claudia Hester WOMACK, Deceased.
No. 8017SC1168.
Court of Appeals of North Carolina.
July 21, 1981.
*496 Gwyn, Gwyn & Morgan by Julius J. Gwyn, Reidsville, for propounder appellants.
George B. Daniel and W. Osmond Smith, III, Yanceyville, for caveator appellees.
ARNOLD, Judge.
The issues to be determined on this appeal are whether the caveators presented sufficient evidence of lack of testamentary capacity and of undue influence exerted by the Boswells to withstand the propounders' motions for a directed verdict and for judgment notwithstanding the verdict.
The law in North Carolina presumes that every person has sufficient mental capacity to make a valid will. In re Will of Franks, 231 N.C. 252, 56 S.E.2d 668 (1949); 1 N. Wiggins, Wills and Administration of Estates in N.C. § 53 (1964). Those persons contesting the will, therefore, have the burden of proving that the testator lacked the required mental capacity. In re Will of Brown, 200 N.C. 440, 157 S.E. 420 (1931).
A person has sufficient testamentary capacity within the meaning of the law if he (1) comprehends the natural objects of his bounty; (2) he understands the kind, nature, and extent of his property; (3) he knows the manner in which he desires his act to take effect; and (4) he realizes the effect his act will have upon his estate. It is sufficient for the caveators to negative only one of these essential elements. In re Will of Rose, 28 N.C.App. 38, 220 S.E.2d 425 (1975), disc. rev. denied 289 N.C. 614, 223 S.E.2d 396 (1976).
The caveators rely on evidence that Miss Hester lacked an understanding of the natural objects of her bounty and of the kind, nature and extent of her property. Considering the evidence in the light most favorable to the caveators and giving them the benefit of all reasonable inferences arising on the evidence, we find that they did not present sufficient evidence of lack of testamentary capacity to survive the propounders' motions for a directed verdict.
Caveators' evidence indicated that Miss Hester was 89 years old, physically disabled, and dependent upon others to bring her food and take care of her daily hygiene. She was described as strong-willed and proud and knowledgeable of the family history. Following her last surviving sister's death, she was grief-stricken and felt very strongly about staying in her own home. One of the relatives mentioned a nursing home to her shortly after her sister's death and several relatives were generally known to have discussed a nursing home. The record reflects that she enjoyed a good relationship with most of her relatives and that although they knew someone had to stay with her and take care of her, they were not able to do it because of other obligations.
The only evidence as to Miss Hester's lack of understanding of the kind and extent of her property consisted of testimony that a year or two prior to her death she and Miss Willie, the sister who managed their affairs, were very concerned over the expense of keeping another sister in a nursing home; Miss Hester seldom discussed business affairs; she had been confined to her home for several years and the opinion of Edith Chandler, a second cousin, that Miss Hester did not know the nature and extent of her property.
A nonexpert witness who has shown that he has had the opportunity to form a reasonably reliable appraisal of the mental powers of the testator may give his opinion as to whether the testator had sufficient mental capacity to understand the kind, nature and extent of his property. In re Will of Tatum, 233 N.C. 723, 726, 65 S.E.2d 351, 353 (1951). Edith Chandler testified that she believed that Miss Hester knew there was property, but she did not think that Miss Hester had any business dealings about it. She further testified *497 that Miss Hester "knew where the farm stretched out to" but "didn't understand the full value of the land." On cross-examination, however, she admitted that she had never discussed Miss Hester's business affairs with her and had no way of knowing what she knew about her property. In light of this admission, it is doubtful that Mrs. Chandler's opinion should have been admitted. In any event, even considering this evidence, the caveators' evidence was insufficient to submit the issue of the testator's mental capacity to the jury.
The propounders also argue that the caveators did not present sufficient evidence of undue influence to survive their motions for a directed verdict. To constitute undue influence within the meaning of the law, there must be more than mere influence or persuasion. For the influence to be undue,
"`there must be something operating upon the mind of the person whose act is called in judgment, of sufficient controlling effect to destroy free agency and to render the instrument, brought in question, not properly an expression of the wishes of the maker, but rather the expression of the will of another. It is the substitution of the mind of the person exercising the influence for the mind of the testator, causing him to make a will which he otherwise would not have made.'"
In re Will of Andrews, 299 N.C. 52, 261 S.E.2d 198 (1980), quoting In re Will of Turnage, 208 N.C. 130, 131, 179 S.E. 332, 333 (1935). The burden is on the caveator to show by the greater weight of the evidence that the execution of the will was procured by undue influence. In re Will of Andrews, supra.
Relying on McNeill v. McNeill, 223 N.C. 178, 25 S.E.2d 615 (1943), the caveators contend that the evidence shows that Frank Boswell acted as Miss Hester's agent and as such he enjoyed a confidential relationship with her which raises a presumption of undue influence and shifts the burden to the propounders to show that no undue influence was asserted.
The evidence shows that just prior to Miss Willie's death Frank Boswell helped her with her bank accounts and other business affairs, and after her death he served as Miss Hester's personal representative at the inventory of Miss Willie's safe deposit box. In addition, the evidence shows that four days after Miss Hester's will was written she renounced the administration of Miss Willie's estate in favor of Frank Boswell. There was no evidence of procurement of the will by him. We find that this evidence is insufficient to show the existence of a confidential relationship and raise a presumption of undue influence.
The burden therefore remains on the caveators to show that the will was procured by undue influence. Factors to be considered include:
"1. Old age and physical and mental weakness;
2. that the person signing the paper is in the home of the beneficiary and subject to his constant association and supervision;
3. that others have little or no opportunity to see him;
4. that the will is different from and revokes a prior will;
5. that it is made in favor of one with whom there are no ties of blood;
6. that it disinherits the natural objects of his bounty;
7. that the beneficiary has procured its execution."
In re Will of Mueller, 170 N.C. 28, 30, 86 S.E. 719, 720 (1915).
A prima facie case of undue influence consists of evidence presented by the caveators of a sufficient combination of facts, circumstances and inferences from which a jury could find that the testator's will is not the product of his free and unconstrained act, but rather that it is the result of an overpowering influence exerted on the testator sufficient to overcome his free will and to substitute another's will and wishes, so that the testator executes a *498 will that he otherwise would not have executed. In re Will of Andrews, supra. When such evidence exists, the case must be submitted to the jury.
Examining the record in light of the seven factors previously listed as relevant to the issue of undue influence, we note that the caveators presented no evidence of mental weakness. Miss Hester lived in her own home and had frequent visitors. It was initially at her sister's request and then at her own request that the Boswells came to stay with her. While the Boswells were not direct kin, they were not strangers but had known the Womack sisters most of their lives. Miss Hester had no close surviving relatives and more of her first and second cousins support the will than contest it. Furthermore the devise was not a gratuitous one, but one conditioned upon the rendition of services by the Boswells. The caveators testified that they knew Miss Hester had to have someone to stay with her but for various reasons, none of them could do it. They presented no evidence from which it could be inferred that the Boswells procured the execution of the will. We therefore find that the evidence presented at trial was insufficient to submit the question of undue influence to the jury.
The trial court erred in denying the propounders' motions for a directed verdict as to the issues of mental capacity and undue influence.
Reversed.
VAUGHN and BECTON, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315153/ | 146 Cal.App.2d 37 (1956)
MARGARET B. FOWLER et al., Appellants,
v.
SECURITY-FIRST NATIONAL BANK OF LOS ANGELES (a National Banking Association), as Trustee, etc., et al., Respondents.
Civ. No. 21327.
California Court of Appeals. Second Dist., Div. Two.
Nov. 16, 1956.
Loeb & Loeb and Herman F. Selvin for Appellants.
Chandler, Wright, Tyler & Ward for Respondents.
MOORE, P.J.
Plaintiffs appeal from a judgment in their action to impose a constructive trust upon property left by their deceased father, Warren McGrath. The contentions are that the findings are not supported by substantial evidence, and that the opinion of the trial judge indicates that because of an erroneous conception of the law he refused to consider and weigh the majority of appellants' evidence.
On April 24, 1895, the testator and his first wife, Lottie, were married. During the following 51 years they raised four daughters and accumulated a considerable fortune. Lottie died March 13, 1946, leaving no will. A portion of her separate property which devolved by the law of intestate succession was quitclaimed to the father, Warren, by the four daughters at his suggestion. The testator was then 74 years of age. A little over one year after Lottie's death, he married his secretary, Callie, a woman 28 years his junior. By his final will, executed after his marriage to Callie, Warren left one fourth of his property outright to her; the balance in trust with one half of the oil income and one third of the remaining income to Callie for life, the daughters or their issue to receive the residue of the income until Callie's death and all of the income thereafter. Upon the death of the survivor of them, *40 the trust estate is to go in equal shares to the surviving issue of the daughters per capita.
Alleged Grounds for the Action
The daughters brought this action alleging that the testator and Lottie had entered into a parol contract that the first to die would leave all his property to the survivor, who in turn would bequeath it in equal shares to the daughters; that Lottie died intestate in the belief that her husband would succeed to her estate and in reliance on his promise to make the children his eventual beneficiaries; that the final will of Warren McGrath unconscionably violates his promise in that his second wife and the children of his daughters are given some interest in his estate. Furthermore, they urge that they quitclaimed to their father that portion of Lottie's separate possessions which would have gone to them upon her death in reliance upon his representation that they would eventually inherit Lottie's property in addition to his own estate.
The Findings
The trial court found that no parol contract between Warren and Lottie had ever been formulated; that Lottie had relied on no such agreement at the time of her death in 1946; that Warren did not promise his daughters that he would will all his property to them in return for the quitclaim of a portion of Lottie's separate property.
Evidence of an Oral Contract
Appellants' only evidence of the existence of a parol contract between the testator and Lottie is the various declarations of decedent testified to by the four girls, a friend, a bank executive and two ministers acquainted with Warren. The purport of all these declarations was that Warren and Lottie had an "agreement" as to the manner of the disposition of their property in event of death of both or either, and that the daughters were to have a substantial share in that disposition.
Margaret Fowler testified that Warren had stated in her presence that "Mama and I have always agreed that everything shall go to you girls and it will probably be your responsibility to take care of most of it because the other girls have other interests." Upon another occasion, he remarked that he and "mama" had agreed that everything should go to the four girls after the two of them were gone; "You know mama and I have had that agreement all our lives, everything *41 would go to you girls, we have spent our lives working for everything for you girls, and that is what it is going to be."
Mildred Shank asserted that the decedent had said to her that "Lottie and I have arranged an agreement whereby either one of us will have the estate for our lifetime and at the death of both of us it will be divided between the four of you." The other two daughters recalled similar conversations with their father. According to each of them, Warren had mentioned that he and Lottie "understood" that the girls were to receive a substantial portion or all the property held by the parents. Mr. McGrath at one time told Paul Neushaeffer, vice president of a bank, that he was not interested in setting up any trusts with the bank as trustee since "as long as I am capable I want to attend to my own business because I am looking after my girls. ... My girls are everything that I have and what I have is for them." A similar statement was made by decedent to Mrs. A. C. Pancoast.
Reverend J. Whitcomb Brougher, Jr., testified that Warren McGrath had intimated to him that "he had an obligation, he felt, to ... his daughters because ... it was his and Lottie McGrath's plan to set up a program whereby the estate would fall to his daughters and since Lottie had passed away he said 'I think I should talk with them because they are the ones who are primarily involved [in any plan to contribute to a church building program].' "
Reverend James W. Fifield, Jr., testified that "he told me at that time and on numbers of other times that the plan was that the resources that he and his wife had accumulated in their partnership was to go to the girls, the children, and presumably pass on to the grandchildren ... and he always said that he felt it was his duty and that he felt honor bound with his wife to carry out this program for the children."
In order to prove reliance by Lottie upon such a "contract" as would estop decedent's legatees and devisees from asserting the statutes which require such agreements to be written (Civ. Code, 1624, subd. 6; Code Civ. Proc., 1973, subd. 6), the husband of one of the daughters testified that Lottie told him on her deathbed that she had not made a will nor would she make one because "for years she and Warren had talked about what they wanted to do, that Warren understood her ideas on the subject, that everything was to go to the girls, that was their plan, they had discussed it in detail and everything was as she wished it."
Respondents countered by introducing into evidence, without *42 objection by appellants on any tenable ground, eight previous wills of Warren McGrath. The last one was dated January 18, 1946. These wills, executed during the period that the oral contract between Lottie and Warren supposedly existed, presented a display of testamentary schemes differing in many respects from the alleged oral agreement. To be sure, in all the wills the daughters were extensively provided for; but the testator created various trust schemes, in some of which his grandchildren took a share as well as his daughters. These wills are cogent evidence explaining the meaning of Warren's several statements relative to his "understanding" with Lottie. They indicate either that the testator felt that his discussions with Lottie were not intended by either to be in the nature of a binding contract but rather mere family planning; or that if there was an agreement, its terms did not prevent Warren from utilizing various testamentary schemes to achieve the substance of the agreement which was to provide liberally for his daughters.
Other witnesses testified that in the meetings over the estate which followed the testator's demise, the daughters expressed disappointment over the size of their gifts but were strangely silent relative to any existence of a contract to dispose of the property otherwise. A. Calder Mackay, attorney for Warren McGrath, and C. W. Smith, vice president of a national bank, testified that at no time during the extensive negotiations over the prospective probate of the estate did any of the appellants indicate that they claimed the whole of the estate in contravention of the terms of the will.
On cross-examination, two of the witnesses for the plaintiffs testified that they were intimately acquainted with decedent and that it was their opinion that his character was such as would prevent him from ever violating a promise he had indeed made.
Also on cross-examination, one of the daughters admitted that Lottie McGrath was undoubtedly familiar with the California laws of intestate succession at the time she died. Therefore, she was aware that her property which she held separately would not pass in its entirety to her husband in accordance with the agreement which appellants claim existed at that time. The inference is that Lottie could not have relied upon the asserted oral "understanding" between herself and Warren. A further inference is that if there was such an agreement, its terms did not demand that the spouse first *43 to die must will all the property to the survivor who in turn would will his entire estate to the daughters.
Findings Supported by Evidence
Was the evidence introduced by respondents as beneficiaries of the last will sufficient to support the finding that no oral contract to dispose of his property otherwise had been entered by the testator? [1] Not only are the appellants here under the ordinary burden of persuasion in a civil case, but since they are seeking to impose a constructive trust upon the estate of a deceased person in contravention of his expressed testamentary wish, they must establish "the oral agreement by full, clear, and convincing evidence ... and ... that plaintiff suffered an unjust and unconscionable injury and loss by reason of the failure of decedent to bequeath and devise all ... property [to them]." (Khoury v. Barham, 85 Cal.App.2d 202, 211 [192 P.2d 823], emphasis added; Notten v. Mensing, 3 Cal.2d 469, 477 [45 P.2d 198]; Monsen v. Monsen, 174 Cal. 97, 103 [162 P. 90]; Barham v. Khoury, 78 Cal.App.2d 204, 211 [177 P.2d 579]; Notten v. Mensing, 20 Cal.App.2d 694, 696 [67 P.2d 734].) [2] Therefore, appellants must convince this court not only that they presented the preponderance of the evidence, not only that the evidence was clear and convincing, but that it was error for the trial court not to be so convinced of its verity as to upset the testament. [3] "It must be remembered that testimony of oral declarations or admissions (particularly those of persons who have been silenced by death) form a class of evidence which is not highly favored in the law." (Monsen v. Monsen, supra, p. 103.)
Appellants fully recognize that appellate courts will not reverse findings by a trial court where there is any substantial conflict in the evidence, but point out that "where the great current of evidence is against the verdict [or finding], and we cannot escape the conviction that it is wrong, we should not be deterred from setting it aside. ..." (Field v. Shorb, 99 Cal. 661, 666 [34 P. 504].) It is interesting to note that of the 21 cases cited by appellants in support of this position, 16 reversed judgments in favor of the party with the burden of persuasion. Here the judgment is against that party. No case has been cited reversing the refusal of a trial court to find the existence in the evidence of grounds for a constructive trust.
Consider the very nature of all attempts to impose a constructive trust upon an estate because of an alleged oral agreement. *44 In almost every case it must be very difficult for the proponents of the will to introduce any evidence directly rebutting the existence of such a contract. Plaintiffs claim that the testator made an oral promise to them. Who is alive to testify to the contrary? [4] Respondents here were fortunate to muster the contradictory evidence, namely, the inconsistent wills, the strong, forthright and honest character of decedent, the silence of appellants at a time when they should ordinarily have asserted their claims, and Lottie's death without a will to leave all her property to Warren. Such evidence warrants inferences in conflict with the proof adduced by appellants and is sufficient to support the findings.
Appellants make much of the fact that a short gap existed between the date of the last inconsistent holographic will of decedent and the death of Lottie, and that during this period Warren made some further declarations relative to an "agreement" with Lottie. Therefore, the argument runs, for this critical period of time, appellants' testimony is absolutely uncontradicted. [5] Surely plaintiffs in an action to declare a constructive trust are not entitled to a decision as a matter of law merely because no contradiction exists as to their evidence of occurrences during a short period of an allegedly long and continuous series of interrelated events. If in spite of appellants' testimony of the repeated admissions of a contract made by the testator before January 18, 1946, (the date of the last will before Lottie's death) no contract yet existed, the inference is strong that further similar declarations of the decedent did not evidence the creation of an oral contract between that time and his wife's decease.
The case of Notten v. Mensing, supra, 20 Cal.App.2d 694, is apropos. There appellants attempted to prove an oral contract not to revoke a will. The evidence also consisted of declarations of the decedent relative to an "agreement." The appellate court refused to upset a decision for the proponent of the subsequent will. Khoury v. Barham, supra, 85 Cal.App.2d 202, reached a similar result.
The alleged, oral promise by Warren to will all his property to the daughters in exchange for their quitclaim to him of that portion of Lottie's property which they had inherited was dependent upon the existence of a prior contract with Lottie. If that agreement was not proved, neither was the subsequent quitclaim transaction. The trial court was justified in finding, after hearing evidence of the dominant role Warren McGrath played in the management of family affairs, *45 that his daughters would readily quitclaim to him the small estate left them by Lottie if he should so suggest without the necessity of any return promises.
Findings Not Based on Misapplication of Law
Prior to adopting findings of fact, the trial judge spoke an accompanying opinion from the bench which he prefaced by stating "I think the case before me and the decision I render will warrant an appeal and that it should be taken. ... The first important question here for determination by this Court is whether the evidence is or is not sufficient as a matter of law to sustain the claim that there was a binding agreement among the parents. Now, the mere fact that the trial court accords credibility to the testimony offered and received to sustain a claim or a defense is not yet sufficient if the evidence is not sufficiently specific to meet the controlling rules of law that are applicable. My difficulty here in this case arises right at that point."
[6] The opinion of a trial court is not a part of the findings and thus is not the decision of the court. [7] The opinion is merged in and controlled by the judgment and may not be used to impeach the findings. (Gschwend v. Stoll, 104 Cal.App.2d 806, 809 [232 P.2d 494].) [8] However, where remarks of the trial judge indicate that he decided the case as he did because of a misapprehension of the law and never truly exercised the judicial function of weighing the conflicting evidence, accepting some and rejecting the other, the judgment may be reversed if necessary for a true decision on the evidence. (Estate of Gestner, 90 Cal.App.2d 680, 686 [204 P.2d 77]; Trans-Oceanic Oil Corp. v. Santa Barbara, 85 Cal.App.2d 776, 790 [194 P.2d 148]; Felsenthal v. Warring, 40 Cal.App. 119, 134- 135 [180 P. 67].) Appellants suggest that the opinion of the trial court here indicates that he was of the impression that a contract could not be proved by the subsequent declarations of the contracting parties without direct evidence of the very circumstances wherein the contract was consummated. That is not the law. [9] The admissions, or declarations against interest as the case may be, of a party to a contract may be sufficient under the circumstances to prove the existence and terms of that agreement. (Steinberger v. Young, 175 Cal. 81, 86 [165 P. 432]; Bean v. Wilson, 120 Cal.App.2d 58, 61 [260 P.2d 134]; Airola v. Gorham, 56 Cal.App.2d 42, 47-49 [133 P.2d 78].) However, we do not agree that the trial judge was under *46 this misapprehension of the law or that his findings were indeed based upon such a consideration.
Some of the witnesses presented by plaintiffs are wholly disinterested in the outcome of this action. Their character is such that it would be unthinkable that they would deliberately falsify testimony before a court of law and under oath. As stated by the trial judge, "The recollection of the witnesses in this case may not in all respects be strictly accurate particularly in respect to the language used by the decedent Lottie or the decedent Warren McGrath but I see no reason to doubt the credibility of the witnesses even though the recollection of some of them may not be entirely accurate and therefore may not be entertained." Thus, assuming that appellants' witnesses spoke the truth insofar as they were able, is it yet not possible that respondents were entitled to a decision in their favor?
An important key to the decision is the admonition of the judge that "It is not unusual for parents and their children to have a general family understanding that the surviving parent will take all the assets and that the surviving parent will leave the assets then or pass them on to the children. Discussions are often had to that effect in families but are such discussions to be classed as contracts? My wife has said time and time again 'I want to leave my property to you and I want you to give it to our three daughters.' I said, 'That is exactly my idea of things too.' Have we entered into a contract? I don't think so." To which it may be added, perhaps you have and perhaps you have not. It depends upon the circumstances, the words and phrases employed, the understanding of the parties, the type of family involved. When persons reach the age attained by Lottie and Warren McGrath and accumulate a sizeable fortune, it is natural to suppose that they oftentimes discusss what would happen to their wealth should either die. [10] Whether these spoken "plans," "understandings," or "agreements" are intended by the family members as a binding contract among them is a question of fact for the trial court. Here that court was of the opinion that Mr. McGrath "was a man of unusual attainments and a very forcible character. If he had been requested at any time in his life to enter into an agreement with his wife to the effect that he would be bound to handle all the property after his wife's death toward giving it to the daughters he never would have done it. He was the type of man who had made his way and he was the type of man *47 who could not be thus restricted." Therefore, his family would not be entitled to believe that their normal family planning constituted more than a moral obligation on each member.
[11] A contract is indeed the result of objective manifestations of the parties. [12] If those manifestations are sufficient, the parties' subjective intentions or beliefs are wholly immaterial. (Civ. Code, 1565, subd. 3; Brant v. California Dairies, Inc., 4 Cal.2d 128 [48 P.2d 13]; Rest., Contracts, 3, 19-20.) However, the same interchange of words may or may not be a binding contract depending upon the circumstances under which the words are uttered, the tone of voice used, to whom they are addressed. [13] If words are spoken under circumstances where it is obvious that neither party would be entitled to believe that the other intended a contract to result, there is no contract. As lucidly pointed out by Justice Learned Hand, "the form of utterance chosen is never final; it is always possible to show that the parties did not intend to perform what they said they would, as, for example, that the transaction was a joke ... or that it arose in relations between the members of a family which forbade it. ... It is quite true that contracts depend upon the meaning which the law imputes to the utterances, not upon what the parties actually intended; but in ascertaining what meaning to impute, the circumstances in which the words are used is always relevant and usually indispensable." (New York Trust Co. v. Island Oil & Transp. Corp., 34 F.2d 655, 655-656.) Furthermore, appellants never did prove the "objective manifestations" of this alleged contract. They could only testify to declarations by the decedent that some such manifestations had indeed occurred and that an "agreement" resulted. Therefore, the so-called objective test to be applied to alleged contract transactions does not solve this case.
[14] Before a court of equity will decree "quasi-specific performance" or impose a constructive trust against the estate of a decedent in derogation of his expressed testamentary desires, the plaintiffs must prove that they would be the victims of a "fraud" should the agreement not be enforced. (Walker v. Calloway, 99 Cal.App.2d 675, 681 [222 P.2d 455]; Brown v. Freese, 28 Cal.App.2d 608, 615 [83 P.2d 82]; Kurtz v. de Johnson, 42 Cal.App. 221, 227 [183 P. 588].) [15] The terms of the agreement must be definite and certain. (Bank of America v. O'Shields, 128 Cal.App.2d 212, 215 [275 P.2d 153].) Therefore, appellant was under the burden of convincing *48 the trial court that the various declarations of the decedent indicated definitely and certainly that a fraud would be worked upon the daughters of the testator should their children or the decedent's second wife be allowed to take any share in his estate. As pointed out by the trial judge, "Is there anything unconscionable in what was here done? The decedent left one-fourth of his estate to his widow, Callie McGrath, three-fourths of the estate to his daughters, and their interest was taken subject to a half-interest in the income--I think it was of oil or gas--maybe it was larger--and another half-interest in the income from other properties so the girls, therefore, in effect, if we compute it received the full mother's share when you add it up." The testimony introduced by appellants indicates that the decedent and Lottie felt a strong obligation to see that the survivor of them was well cared-for and that a substantial portion of their estate eventually devolved upon their children. However, the holographic wills of Warren McGrath and the death of Lottie intestate indicate that neither was bound to pursue any particular testamentary method to achieve this objective. To sustain appellants' claim that the "agreement" between Lottie and Warren absolutely required the latter to bequeath and devise all his property in a lump to the daughters would prevent the decedent from achieving considerable tax savings by the formation of a well-considered estate plan. Considering the size of the McGrath estate, it is unlikely that the husband and wife ever intended to reach such a result. Furthermore, so to hold would preclude a subsequent wife of the testator from receiving upon his death any portion of the property which was his to bequeath. [16] Equity is loath specifically to enforce a contract which would prevent a testator from fully providing for his wife, a natural and legitimate object of his bounty. (Owens v. McNally, 113 Cal. 444, 453 [45 P. 710, 33 L.R.A. 369].)
Therefore, the evidence is sufficient to support a finding either that no contract was made, or that its terms were too nebulous to preclude the eventual testamentary disposition actually made by the testator. Consideration of the trial court's remarks from the bench does not change this conclusion.
Admission of Evidence
Appellants introduced into evidence certain statements made by Lottie on her deathbed, out of the presence of the testator, indicating her belief that an "agreement" existed. The trial *49 court allowed such declarations to be introduced solely for the purpose of showing Lottie's state of mind. Appellants now contend that the declarations were against her pecuniary and proprietary interest at the time as known by her and should have been admitted to show the existence of a contract. (Code Civ. Proc., 1870, subd. 4.) The simple answer is that they were self-serving hearsay statements and inadmissible to prove the contract. [17] The statement of a dying declarant that the beneficiary of the declarant's property is contractually bound eventually to distribute all his assets to certain third persons is certainly not against the interest of the speaker.
Appellants' complaint against the introduction of Warren's holographic wills is raised for the first time on appeal. Therefore, it cannot constitute a ground for reversal.
Affirmed.
Fox, J., concurred.
Ashburn, J., did not participate herein. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/488533/ | 818 F.2d 1108
125 L.R.R.M. (BNA) 2477, 106 Lab.Cas. P 12,360
I.T.O. CORPORATION OF BALTIMORE, Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.CERES CORPORATION, Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.MAHER TERMINALS, INC., Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.MAERSK CONTAINER SERVICE CO., INC., Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.BALTIMORE STEVEDORING CO., INC., Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.STEAMSHIP TRADE ASSOCIATION OF BALTIMORE, INC., Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.NATIONAL LABOR RELATIONS BOARD, Petitioner,v.ATLANTIC & GULF STEVEDORES, INC., Chesapeake OperatingCompany, John T. Clark & Sons of Maryland, Inc.,Respondents.
Nos. 86-3550, 86-3551, 86-3553, 86-3557 to 86-3559 and 86-3581.
United States Court of Appeals,Fourth Circuit.
Argued Jan. 5, 1987.Decided May 18, 1987.
Gil A. Abramson (Elaine Patrick; Semmes, Bowen & Semmes) Paul B. Lang (Niles, Barton & Wilmer; Warren M. Davison; Littler, Mendelson, Fastiff & Tichy, Baltimore, Md., Eric A. Sisco; D. Michael Underhill, Joseph Brooks, Morgan, Lewis & Bockius, Washington, D.C., Earle K. Shawe; Eric Hemmendinger, John O. Hennegan, J. Paul Mullen, Richard A. Pearson, Lord, Whip Coughlan & Green, P.A., Baltimore, Md., William C. Miller, Rockville, Md., on brief), for petitioners and cross-respondents.
Frederick C. Havard, N.L.R.B. (William R. Stewart, Deputy Asst. Gen. Counsel; Rosemary M. Collyer, General Counsel; John E. Higgins, Jr., Deputy General Counsel; Robert E. Allen, Associate General Counsel; Elliott Moore, Deputy Associate General Counsel, Washington, D.C., on brief, for respondent and cross-petitioner.
Before WINTER, Chief Judge, ERVIN, Circuit Judge, and KAUFMAN, Senior United States District Judge for the District of Maryland, sitting by designation.
FRANK A. KAUFMAN, Senior District Judge:
Steamship Trade Association of Baltimore, Incorporated (STA) and eight of its employer-members1 appeal from a decision of the National Labor Relations Board (Board) in which the Board concluded that STA and those employer-members had unlawfully refused to bargain with Local No. 953, International Longshoreman's Association, AFL-CIO (Union) and from the Board's Order requiring STA and those employer-members to bargain with the Union. In turn the Board has cross-appealed, petitioning this Court for enforcement of its Order.
The members of STA are employers engaged in maritime commerce in the Port of Baltimore, Maryland. Those employers include steamship lines, steamship agents, stevedoring firms, terminal operators and service companies. Prior to 1982, STA engaged in multiemployer bargaining with the Union on behalf of its stevedore employer-members with regard to checkers, ship runners, ship planners and timekeepers. In 1982, the Union petitioned the Board to authorize the Union to represent certain clerical employees working for the stevedore employer-members of STA and to include those additional employees in the existing multiemployer bargaining unit. Following a representation hearing, the Board's Regional Director concluded that certain of the employees whom the Union sought to include in the existing unit should not be so included because they were office clericals rather than so-called plant clericals, i.e. clericals whose work was closely related to the work of checkers, ship runners, ship planners and timekeepers. On the other hand, the Director determined that several of the additional employees the Union desired to add to the existing unit were plant clericals who worked sufficiently closely with the previously covered employees within the unit so as to have an identity of interests with those already covered employees. Accordingly, the Director granted the Union's petition as to those latter employees and directed that an election be held. The Board affirmed the Regional Director's Decision and Direction of Election, although the Board did determine that STA and two of the within employer-members, Maersk Container Service Corporation and Maher Terminals, Inc., had raised substantial issues with respect to the inclusion of two employees in the voting group. However, the Board permitted those employees to vote in the election, subject to challenge. In a Board-conducted election the additional plant clerical employees elected the Union to represent them as members of the existing bargaining unit. Thereafter, the Board certified the Union as the exclusive bargaining representative for those employees. The Board subsequently concluded that the two employees who had voted in the election subject to challenge should be included in the bargaining unit.
STA and three of the employer-members, ITO Corporation of Baltimore, Ceres Corporation, and Chesapeake Operating Company, do not employ any of the plant clerical employees so added to the existing bargaining unit. However, each of the employer-members does employ one or more persons who are represented by the Union and who are members of the existing unit.
Prior to 1982, STA and all of the eight employer-members had consented to bargain with the Union on a multiemployer basis. The said eight employer-members had also, prior to 1982, authorized STA to bargain on their behalf as to their employees who were members of the then-existing employee bargaining unit. However, promptly after the Union, in 1982, sought to represent the additional plant clericals, the Board of Directors of STA met and agreed that STA did not have authority to bargain with the Union as to any of the plant clericals whom the Union sought in 1982 to add to the existing bargaining unit. Further, none of the eight employer-members consented in 1982 to the inclusion in the bargaining unit of the added plant clerical employees.
After the above-related election and certification, the Union filed an unfair labor practice charge with the Board, alleging that STA and the eight employer-members had unlawfully refused to bargain with the Union regarding the plant clerical employees who had been added to the existing unit. In 1986, the Board granted summary judgment in favor of the Union and ordered STA and the employer-members herein to bargain with the Union. In so doing, the Board noted that the newly added employees shared a sufficient community of interest with the employees in the existing bargaining unit and that, since the employers had previously consented to bargain with the Union on a multiemployer basis with STA acting as their representative, the said employers were obligated to bargain with the Union with regard to the additional employees. In this Court's view, the Board, in so doing, correctly construed and applied appropriate legal principles.
"It is axiomatic that the basis for multiemployer bargaining units is the parties' consent to be bound by group bargaining." Arden Electric Co., 275 NLRB 654, 656 (1985). That view has been approved by the Supreme Court in Charles D. Bonanno Linen Service v. NLRB, 454 U.S. 404, 412, 102 S.Ct. 720, 725, 70 L.Ed.2d 656 (1982), in which Justice White wrote:
1
We agree with the Board and with the Court of Appeals. The Board has recognized the voluntary nature of multiemployer bargaining. It neither forces employers into multiemployer units nor erects barriers to withdrawal prior to bargaining. At the same time, it has sought to further the utility of multiemployer bargaining as an instrument of labor peace by limiting the circumstances under which any party may unilaterally withdraw during negotiations.
2
There is a difference between the formation of a multiemployer bargaining unit, on the one hand, and the expansion of an already existing unit, on the other hand. Further, once a multiemployer bargaining unit is in existence, withdrawal from it is somewhat circumscribed.
3
Any party to a bargaining unit may withdraw prior to the date set for negotiation of a new contract or the date on which negotiations begin, provided that adequate notice is given. Once negotiations for a new contract have commenced, however, withdrawal is permitted only if there is "mutual consent" or "unusual circumstances" exist.
4
Charles D. Bonanno Linen Service, Inc. v. NLRB, 454 U.S. 404, 410-11, 102 S.Ct. 720, 724, 70 L.Ed.2d 656 (1982), citing with approval Retail Associates, Inc., 120 NLRB 388, 395 (1958). Thus, an impasse in bargaining does not justify unilateral withdrawal by an employer in a multiemployer bargaining unit. Id. 454 U.S. at 412-19, 102 S.Ct. at 725-29. In addition, once a multiemployer bargaining unit is in existence, each employer member of that unit is, absent a valid timely withdrawal therefrom, required to bargain with the Union with regard to all employees who have been appropriately added to the existing unit. In other words, once an employer has consented to bargain on a multiemployer basis, that employer cannot limit its consent to the original employees in the unit. Rather, it is the Board which determines the appropriate composition of the unit once that unit has been consensually created by its employer members. This is true whether or not all of the employers employ persons who become the additional employees added to the existing unit.
5
In Steamship Trade Association of Baltimore, Inc., 155 NLRB 232 (1965), the petitioning union which, as in this case, was Local 953, sought to include timekeepers in the existing multiemployer bargaining unit--the same unit involved herein--which then consisted of checkers, ship runners, and ship planners. The Board determined "that the timekeepers' work is integrated with that of the checkers, and that the timekeepers have a substantial community of interest with the checkers, ship runners, and ship planners who compose the existing unit." Id. at 235. The Board rejected the employers' contention that the refusal of the employer-members of STA to grant to STA authority to bargain on their behalf as to the timekeepers required the dismissal of the union's petition. In so doing, the Board wrote:
6
It is true that mutual consent is required to establish multiemployer bargaining. But it is clear that the element of consent relates to the formation of the multiemployer bargaining unit and not to the scope of the duty to bargain once the multiemployer unit is formed, a duty which is measured by the requirements of the Act, one of which is that bargaining must be conducted in the appropriate unit. To hold otherwise would lodge all authority over the composition of the unit in the parties and, in effect, deprive the Board of its duty under Section 9 to decide in each case the appropriate unit that will assure to employees the fullest freedom in exercising the rights guaranteed by the Act.
7
Id. at 234. Thus, "[t]he element of consent relates only to the formation of the multiemployer unit and not to the scope of the duty to bargain once the multiemployer unit is formed." Sacramento Automotive Association, 193 NLRB 745 (1971).2
8
The opposition of the employer-members to the inclusion of the plant clericals in the existing bargaining unit does not negate their initial consent to bargain with the unit. Because each of the said employer-members had consented to bargain with the Union as to the unit as a whole, the addition of new employees to that unit could be ordered by the Board without the consent of the employers. As long as an employer-member of the multiemployer bargaining group employs one or more members of the bargaining unit and has not validly withdrawn from the group, such an employer is required to bargain with that unit--regardless of whether such employer employs persons who are part of the newly added group. To hold otherwise would deprive the Board of its control over the employee composition of a validly formed and existing employee bargaining unit which each employer-member of the multiemployer bargaining group has recognized. Each employer-member, absent timely valid withdrawal from the employer group, is required to continue to negotiate with the union representing the employee bargaining unit, subject to the Board's appropriate exercise of discretionary control. Therefore, STA, ITO, Ceres, and Chesapeake were obligated to bargain with the Union as to the employees in the bargaining unit as a whole, including those employees added to the existing bargaining unit whether or not those employers employ any of those added employees. An employer, having granted to STA authority to bargain with the Union on its behalf as a member of the existing multiemployer bargaining unit, may not limit that authority so as to permit STA to bargain with the Union as to some employee-members of the unit but not as to other employee-members thereof. Rather, STA has both the authority and the duty to bargain with the Union on behalf of all of the employers within the multiemployer group as to all employees (of such employers) who are members of the bargaining unit with the composition of that unit to be determined appropriately by the Board. Accordingly none of the employers can limit, on a unilateral basis, the authority of STA as their designated bargaining agent to a particular group of employees within the employee bargaining unit. Steamship Trade Association of Baltimore, Inc., supra, at 234-35; Sacramento Automotive Association, supra, at 745. A contrary conclusion would impede the Board's statutory duty to determine the appropriate composition of the bargaining unit.
9
The Board's discretion in determining the composition of the bargaining unit is broad.
10
Section 9(b) of the Act vests in the Board authority to determine "the unit appropriate for the purposes of collective bargaining." 61 Stat. 143, 29 U.S.C. Sec. 159(b). The Board's discretion in this area is broad, reflecting Congress' recognition "of the need for flexibility in shaping the [bargaining] unit to the particular case." NLRB v. Hearst Publications, Inc., 322 U.S. 111, 134 [64 S.Ct. 851, 862, 88 L.Ed. 1170] (1944). The Board does not exercise this authority aimlessly; in defining bargaining units, its focus is on whether the employees share a "community of interest." See South Prairie Construction Co. v. Operating Engineers, 425 U.S. 800, 805 [96 S.Ct. 1842, 1844, 48 L.Ed.2d 382] (1976) (per curiam ); 15 NLRB Ann.Rep. 39 (1950). A cohesive unit--one relatively free of conflicts of interest--serves the Act's purpose of effective collective bargaining, Pittsburgh Plate Glass Co. v. NLRB, 313 U.S. 146, 165 [61 S.Ct. 908, 918, 85 L.Ed. 1251] (1941), and prevents a minority interest group from being submerged in an overly large unit, Chemical Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 172-173 [92 S.Ct. 383, 393-394, 30 L.Ed.2d 341] (1971).
11
National Labor Relations Board v. Action Automotive, Inc., 469 U.S. 490, 494, 105 S.Ct. 984, 987, 83 L.Ed.2d 986 (1985).
12
Although no single factor is conclusive in determining whether the employees share such community of interests, relevant factors include:
13
"(1) similarity in the scale and manner of determining the earnings; (2) similarity in employment benefits, hours of work and other terms and conditions of employment; (3) similarity in the kind of work performed; (4) similarity in the qualifications, skills and training of the employees; (5) frequency of contact or interchange among the employees; (6) geographic proximity; (7) continuity or integration of production processes; (8) common supervision and determination of labor-relations policy; (9) relationship to the administrative organization of the employer; (10) history of collective bargaining; (11) desires of the affected employees; (12) extent of union organization."
14
National Labor Relations Board v. Saint Francis College, 562 F.2d 246, 249 (3rd Cir.1977) quoting R. Gorman, Labor Law: Unionization and Collective Bargaining 69 (1976).
15
In the within case the employees who were added to the existing bargaining unit perform functions within the chain of handling cargo in the Port of Baltimore as do the employees who were members of the previously existing bargaining unit. The jobs of the employees added to the unit require them to be in contact with the checkers, and sometimes with other members of the previously existing employee bargaining unit, regarding customs openings, payment for cargo, demurrage, documents, appointments, and other problems arising during the course of their work. Additionally some of the newly added employees are supervised by the same persons who supervise employees who are members of the previously existing employee bargaining unit. Also, several of the newly added employees share a specific common working area with members of the previously existing bargaining unit. Although certain of the relevant factors, such as similarity of wages, were seemingly absent as to some if not all of the added employees, there is substantial evidence in the administrative record to support the Regional Director's conclusion, which was affirmed by the Board, that the added employees share a sufficient community of interest with the employees in the existing bargaining unit to support the Board's decision adding them to the employee bargaining unit. The frequency of contact between the added employees and those already in the previously existing bargaining unit, the integration of the work of the added employees with the work of those already in the previously existing unit, and the desire of the added employees to be part of that unit indicate that the interests of the added employees are sufficiently similar to the interests of the employees in that unit so as to permit the Board to order their inclusion therein.
16
AFFIRMED AND ENFORCEMENT GRANTED.
1
Those eight employer-members are the following stevedoring firms: I.T.O. Corporation of Baltimore; Ceres Corporation; Maher Terminals, Inc.; Baltimore Stevedoring Company, Inc.; Maersk Container Service Corporation; Atlantic and Gulf Stevedores; Chesapeake Operating Company; and John T. Clark & Son of Maryland
2
Cf. National Dairy Products Corp., 127 NLRB 313 (1960), which predates the Board's 1965 decision in Steamship Trade Association of Baltimore, and in which the single employer was not required by the Board to bargain as to employees whose employment had been terminated by the employer for "economic considerations ... totally unrelated to the union activities or membership" of the employees involved. Id. at 314 | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1315157/ | 280 S.E.2d 91 (1981)
Genevieve Mae NEWTON, Extrx., etc., et al.
v.
Richard L. DAILEY, Tax Commr., etc.
No. 14298.
Supreme Court of Appeals of West Virginia.
July 7, 1981.
*92 Chauncey H. Browning, Jr., Atty. Gen., Gene W. Bailey, Asst. Atty. Gen., Charleston, for appellant.
No appearance for appellees.
MILLER, Justice:
The State Tax Commissioner appeals from an adverse judgment of the Circuit Court of Cabell County, which held that the entire amount of a joint debt should be deducted from the deceased's property interest in determining the fair market value of jointly-owned real estate for inheritance tax purposes. We disagree and reverse.
George T. Newton died jointly owning several parcels of real estate with his wife with a right of survivorship. The property had an appraised fair market value of $156,500.00, excluding the joint indebtedness owed on the property, which amounted to approximately $52,400.00. The fiduciary filed the State Inheritance and Transfer Tax Return taking the entire amount of the indebtedness as a deduction from the deceased's one-half share of the property. The Tax Commissioner then issued a deficiency assessment and the estate contested the assessment in the Circuit Court of Cabell County. As previously noted, the judge held that the estate had correctly calculated the net taxable value of the jointly-owned property.
The Tax Commissioner contends that where there is a surviving spouse W.Va. Code, 11-11-1, imposes an inheritance and transfer tax on not more than fifty per centum of the value of jointly-owned property which has the incidence of the right of survivorship, as provided by subsection (d) of that statute. W.Va.Code, 11-11-1(d).[1]
*93 This controversy arises over an interpretation of W.Va.Code, 11-11-5, which determines the market value of property for purposes of our State inheritance tax. This Code section permits the "deducting [of] debts and encumbrances for which the [property] is liable" from the actual market value of the property.[2]
This statute does not spell out in any detail how debts against jointly-owned real estate are to be deducted. However, we will read related statutes in pari materia. Snodgrass v. Sisson's Mobile Home Sales, Inc., W.Va., 244 S.E.2d 321, 324 (1978). Customary rules of construction dictate that "[s]tatutes which relate to the same subject matter should be read and applied together so that the Legislature's intention can be gathered from the whole of the enactments." Syllabus Point 3, Smith v. State Workmen's Compensation Commissioner, W.Va., 219 S.E.2d 361 (1975). Reading W.Va.Code, 11-11-5, with the following pertinent provisions of W.Va.Code, 11-11-1(d), reveals "that in the case of a surviving spouse, not more than fifty per centum of the value of any transfer [of jointly-owned property with the right of survivorship] shall be included and taxed in any such decedent's estate." This language indicates the Legislature intended to tax jointly-owned survivorship property by including fifty per centum of its value in the deceased spouse's estate.
The question of what is fifty per centum of the value of jointly-owned survivorship property is then answered by W.Va.Code, 11-11-5, which permits the deduction of debts and encumbrances against the actual market value of the property to arrive at its taxable value. This statute, however, qualifies the right to deduct such debt by providing that:
"[A]llowances shall not be made for debts incurred by the decedent, or encumbrances made by him, unless such debts or encumbrances were incurred or created in good faith for an adequate consideration, nor for any debt in respect whereof there is a right to reimbursement from any other estate or person, unless such reimbursement from any other estate or person cannot be obtained." W.Va.Code, 11-11-5.
There is no issue raised as to the good faith nature of the debts. The pivotal issue is the trial court's legal conclusion that there was no right of reimbursement on the joint debt as against the surviving widow. This conclusion was predicated on the court's finding that under W.Va.Code, 48-3-9, a contract between husband and wife is not enforceable unless it is in writing signed by the party to be charged.[3]
It does not appear to be disputed that the debts involved were jointly-executed notes signed by the husband and wife for loans obtained against the property secured by deeds of trust. The notes were contracts in writing signed by the parties and meet the requirements of W.Va.Code, 48-3-9. We discuss below that this written joint obligation gives rise to a right of contribution or reimbursement. We also note that under W.Va.Code, 48-3-8, a married woman may contract with any person and be held liable on such contract.[4]
*94 Under our law, co-obligors on a note are jointly and severally liable. If one co-obligor is required to pay the entire obligation, he may seek contribution or reimbursement from his co-obligor for fifty per centum of the amount paid. Cost v. MacGregor, 124 W.Va. 204, 19 S.E.2d 599 (1942); Bringardner v. Rollins, 102 W.Va. 584, 135 S.E. 665 (1926); McKown v. Silver, 99 W.Va. 78, 128 S.E. 134 (1925); Huffman v. Manley, 83 W.Va. 503, 98 S.E. 613 (1919). This is the rule generally adopted in other jurisdictions. E. g., Matter of the Estate of Linker, 30 Colo.App. 25, 488 P.2d 1128 (1971); McLochlin v. Miller, 139 Ind.App. 443, 217 N.E.2d 50 (1966); Kelley v. Halperin, 390 A.2d 1078 (Me.1978); Fithian v. Jamar, 286 Md. 161, 410 A.2d 569 (1979); Farmington National Bank v. Basin Plastics, Inc., 94 N.M. 668, 615 P.2d 985 (1980); Montsinger v. White, 240 N.C. 441, 82 S.E.2d 362 (1954); Pietro v. Leonetti, 30 Ohio St.2d 178, 283 N.E.2d 172 (1972); In re Kershaw's Estate, 352 Pa. 205, 42 A.2d 538 (1945); Matter of the Estate of Fredie Hoffman, 15 Wash.App. 307, 548 P.2d 1101 (1976); 11 Am.Jur.2d Bills and Notes § 588 (1963); Hart & Willier, Commercial Paper Under U.C.C. § 5.05 (1976).
In three of the foregoing cases, this question arose in the same context as this case, that is, the proper valuation for state inheritance tax purposes of jointly-held property with right of survivorship where both parties had signed on the note which secured the loan on the real estate. Under inheritance tax statutes similar to ours, the courts held that fifty per centum of the amount of the debt should be deducted from the deceased's one-half of the fair market value of the property. Kelley v. Halperin, supra; In re Kershaw's Estate, supra; Matter of the Estate of Fredie Hoffman, supra.
Although the point has not often been discussed, the common law rule, which precluded an action against a deceased co-obligor and required the creditor to sue only the surviving co-obligor, has been changed by statute. W.Va.Code, 55-8-6.[5] This statute now charges the estate for such joint debt to the same extent as the deceased co-obligor would have been charged had he lived. Citizens' Trust & Guaranty Company v. Young, 75 W.Va. 241, 83 S.E. 1007 (1914); Greathouse v. Morrison, 68 W.Va. 714, 70 S.E. 710 (1911); 8A Michie's Jurisprudence, Executors and Administrators § 100 (1977); 1 Am.Jur.2d Abatement, Survival, and Revival § 109 (1962). Consequently, a deceased's estate having a continuing co-obligation on a joint note secured by a deed of trust with a surviving spouse has a right of reimbursement under W.Va. Code, 11-11-5. The estate, therefore, can deduct fifty per centum of the obligation from the one-half of the actual market value of the jointly-owned property taxable in the deceased's estate under W.Va.Code, 11-11-1(d).[6]
There is a fundamental logic to W.Va. Code, 11-11-5, which formulates the market value of property subject to the transfer and inheritance tax as the actual market value less the amount of any bona fide debt owing against the property. Such a debt obviously reduces the market value of the property. Furthermore, where the debt is jointly owed, as is the case here, the *95 deceased has a right of reimbursement against the other co-obligor for fifty per centum of the debt. To this extent, the statute recognizes his right of reimbursement and precludes the taking of the entire indebtedness as a deduction against the decedent's valued share of the property.[7]
For the foregoing reasons, we conclude that the trial court was in error in permitting the entire amount of the indebtedness to be deducted against the decedent's share of the real estate and its judgment is, therefore, reversed.
Reversed.
NOTES
[1] The material portions of W.Va.Code, 11-11-1, are:
"A tax, payable into the treasury of the State, shall be imposed upon the transfer, in trust, or otherwise, of any property, or interest therein, real, personal, or mixed, if such transfer be:
* * * * * *
"(d) by any person who shall transfer any property which he owns, or shall cause any property to which he is absolutely entitled to be transferred to or vested in himself and any other person jointly, with the right of survivorship, in whole or in part, in such other person, a transfer shall be deemed to occur and to be taxable under the provisions of this article upon the vesting of such title in the survivor ... Provided ... that in the case of a surviving spouse, not more than fifty per centum of the value of any transfer mentioned in this subdivision (d) shall be included and taxed in any such decedent's estate." [Emphasis added]
[2] The pertinent portion of W.Va.Code, 11-11-5, is:
"The market value of property is its actual market value after deducting debts and encumbrances for which the same is liable, and to the payment of which it shall actually be subjected. In fixing such market value, allowances shall not be made for debts incurred by the decedent, or encumbrances made by him, unless such debts or encumbrances were incurred or created in good faith for an adequate consideration, nor for any debt in respect whereof there is a right to reimbursement from any other estate or person, unless such reimbursement from any other estate or person cannot be obtained."
[3] The full text of W.Va.Code, 48-3-9, is:
"A contract between a husband and wife shall not be enforceable at law, unless such contract, or some memorandum or note thereof, be in writing and signed by the party to be charged thereby."
[4] W.Va.Code, 48-3-8, provides:
"A married person may make contracts with any person, including his wife or her husband, and shall be liable on such contracts, and for his or her debts contracted during coverture, the same as if unmarried, and such liability may be enforced after the coverture has terminated as well as during its continuance; but any contract made between husband and wife shall be subject to the provisions of section nine [§ 48-3-9] of this article."
[5] W.Va.Code, 55-8-6, provides:
"The representative of one bound with another, either jointly or as a partner, by judgment, bond, note or otherwise, for the payment of a debt, or the performance or forbearance of an act, or for any other thing, and dying in the lifetime of the latter, may be charged in the same manner as such representative might have been charged, if those bound jointly or as partners had been bound severally as well as jointly, otherwise than as partners."
[6] It is obvious that once this debt is deducted against the actual market value of the property, it cannot be taken again as a part of the general obligations for which the estate is liable. 8A Michie's Jurisprudence, Executors and Administrators § 88 (1977).
[7] No claim is made that facts exist to justify the statutory exception to the right of reimbursement, i. e., that "such reimbursement from any other estate or person cannot be obtained." W.Va.Code, 11-11-5. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315160/ | 280 S.E.2d 751 (1981)
STATE of North Carolina
v.
Chester O. SUTTON.
No. 811SC95.
Court of Appeals of North Carolina.
August 4, 1981.
*753 Atty. Gen. Rufus L. Edmisten by Asst. Atty. Gen. Ben G. Irons, II, Raleigh, for the State.
Whitted, Jordan & Matthewson by Louis Jordan and Reginald Kenan, Goldsboro, for defendant-appellant.
CLARK, Judge.
Defendant's attorney violated Rule 28(b)(3) of the North Carolina Rules of Appellate Procedure which requires that exceptions *754 and assignments of error be set out after each question argued in appellant's brief. Although we elect to reach the merits of defendant's case as authorized under Rule 2, we note that defendant, by not referring us to the point in the record where the alleged error occurred, has placed upon this Court the responsibility of searching the record for the exceptions and assignments of error upon which he bases his argument. Defendant will not be heard to protest that a particular argument was addressed to certain objections, exceptions, or assignments of error not attributed to that argument by this Court, since defendant was afforded the opportunity in his brief to direct our attention anywhere in the record he wished, but chose not to do so.
Defendant first argues that his motions to dismiss at the close of the State's evidence, at the close of all evidence, and after the verdict should have been granted because the State failed to offer substantial evidence of each material element of embezzlement. See State v. Seufert, 49 N.C.App. 524, 271 S.E.2d 756 (1980). The elements of embezzlement are as follows: (1) defendant must be the agent of the prosecutor; (2) by the terms of his employment he must receive the property of his principal; (3) he must receive the property in the course of his employment; and (4) he must convert the property to his own use knowing it not to be his own. State v. Ellis, 33 N.C.App. 667, 236 S.E.2d 299, cert. denied, 293 N.C. 255, 236 S.E.2d 708 (1977); State v. Buzzelli, 11 N.C.App. 52, 180 S.E.2d 472, cert. denied, 279 N.C. 350, 182 S.E.2d 583 (1971); see State v. Helsabeck, 258 N.C. 107, 128 S.E.2d 205 (1962). Defendant argues that the fourth element of embezzlement is not supported by substantial evidence. We disagree.
The State presented evidence that defendant improperly operated the cash register so that it would develop a cash surplus for the days for which he was indicted, but that he did not report any surplusage to the manager and he failed to note a surplus on the work sheets. There was also evidence that inventory was leaving the store unaccounted for. From this evidence the jury could reasonably infer that defendant sold this missing inventory, generating a secret surplus, and that this surplus was going into defendant's pocket. This is certainly more than a scintilla of evidence that defendant converted the money to his own use and thus satisfies the substantial evidence test. See State v. Smith, 40 N.C.App. 72, 252 S.E.2d 535 (1979); see also, State v. Agnew, 294 N.C. 382, 241 S.E.2d 684, cert. denied, 439 U.S. 830, 99 S.Ct. 107, 58 L.Ed.2d 124 (1978). It goes without saying that the jury could permissibly infer that defendant knew that money he received in payment for Hardee's inventory was not his own.
It was not necessary for the State to establish defendant's control and possession of the property to the exclusion of all others. State v. Barbour, 43 N.C.App. 143, 258 S.E.2d 475 (1979).
Defendant argues that there is a fatal variance between the indictment and the State's proof. The sufficiency of the indictments is not challenged. Defendant's argument is merely a meritless restatement of his argument that his motions to dismiss should have been granted for lack of substantial evidence.
Defendant argues that his motions to dismiss should have been granted as to the indictments for embezzling coupons, because the State failed to offer evidence that he wrongfully took the coupons with fraudulent intent. On this issue the evidence taken in the light most favorable to the State tended to show that the store had run out of coupons only once before November and December of 1979 and that those back coupons were restored to the employees no later than the first of July 1979. The State also presented evidence tending to show that upon first being confronted with his issuance to himself of unauthorized coupons, defendant said nothing about paying himself back for coupons he had missed in the past, but claimed he was entitled to the coupons because he had worked double shifts on some of the days in November and *755 December 1979. When confronted with time sheets for those months which belied his statement, defendant admitted that he had not worked double shifts.
The evidence was that defendant was authorized to issue himself one coupon per day worked, that he issued more than one coupon per day worked, and that no one ever authorized him to issue more than one. This evidence permitted the inference that defendant knew he was exceeding his authority when he issued himself extra coupons to which he was not entitled. Our holding then is in substantial accord with the holding of this Court in State v. Barbour, 43 N.C.App. 143, 258 S.E.2d 475 (1979):
"We hold the trial court did not err in denying defendant's motions for dismissal. The test to be applied in ruling on a motion to dismiss is whether there is `substantial evidence of all material elements of the offense to withstand the motion to dismiss.' State v. Stephens, 244 N.C. 380, 383, 93 S.E.2d 431, 433 (1956). Such a motion requires consideration of the evidence in the light most favorable to the state; the state is entitled to every reasonable inference which may be drawn from the evidence. State v. McKinney, 288 N.C. 113, 215 S.E.2d 578 (1975). The substantial evidence may be circumstantial or direct, or both. State v. Stephens, supra. The court is not required to find that the evidence excludes every reasonable hypothesis of innocence in denying a defendant's motion to dismiss. To do so would constitute the presiding judge the trier of facts. Substantial evidence of every material element of the crime charged is required before the court can submit the case to the jury. Proof of guilt beyond a reasonable doubt is required before the jury can convict. Id.
* * * * * *
Although it is a basic tenet of our criminal law system that proof of guilt beyond a reasonable doubt is required before the jury can convict, once the trial court finds that substantial evidence exists to take the case to the jury, `it is solely for the jury to determine whether the facts taken singly or in combination satisfy them beyond a reasonable doubt that the defendant is in fact guilty.' State v. Smith, 40 N.C.App. 72, 79-80, 252 S.E.2d 535, 540 (1979). The jury returned a verdict of guilty in this case, and there is no reason for this Court to reverse that verdict."
Id. at 147-49, 258 S.E.2d at 478-79.
Defendant argues that evidence of his monthly payments was irrelevant and highly prejudicial. We hold that evidence which tended to show that defendant was living far and away above the standard to be expected of one earning $265 a week was relevant to establish motive. See 1 Stansbury's N.C. Evidence § 83 (Brandis rev. 1973) and cases cited therein.
Defendant argues that evidence of three large cash transactions in April was not relevant to prove his guilt of embezzlement in the preceding November, December, and January. We disagree. That defendant possessed extensive unexplained wealth would appear relevant to the issue of whether he had taken money from Hardee's. See Annot., 91 A.L.R.2d 1046, 1056 (1963). The fact that these transactions took place over two months after defendant's employment was terminated might somewhat diminish their probative value; however, in light of defendant's income of less than $14,000, in light of the large sums of money involved in the three transactions ($20,000 in $100 bills and a check for $16,000), and in light of the restaurant manager's statement that the shortages had averaged around $1,000 a month from sometime prior to August 1979 until February 1, 1980, we are unable to say that the passage of two short months rendered the transaction so remote as to be devoid of any probative force. Defendant's reliance on obiter dictum in State v. Buzzelli, 11 N.C.App. 52, 180 S.E.2d 472, cert. denied, 279 N.C. 350, 182 S.E.2d 583 (1971), is misplaced for the reason that that case involved a substantially smaller transaction occurring almost seven months after the alleged embezzlement. As the size of the fund embezzled and of the unexplained wealth increase, their probative *756 force increases as well. While lapse of time serves to diminish that probative force, it will not totally vitiate it where as here the unexplained wealth is so grossly disproportionate to the defendant's apparent ability to amass such wealth. This testimony was relevant and properly admitted. The jury was free to consider the remoteness of the transactions as bearing on the weight it wished to attach to the evidence.
Defendant next argues that the court properly allowed a State's witness to testify from records and to introduce certain exhibits without laying the proper foundation. In these assignments, defendant contends that the trial court should not have permitted a private investigator to testify from reports written by him. Defendant contends that the Court allowed the witness to refresh his recollection even though he had not indicated a loss of memory. Defendant concedes that trial counsel did not object to the State's attempt to refresh the recollection of its witness or to the lack of a proper foundation for the introduction of the records. The Defendant's failure to object in either instance constitutes a waiver and the Court properly submitted the evidence to the jury for its consideration. 1 Stansbury's North Carolina Evidence § 27 (Brandis rev. 1973).
In his final argument defendant contends that the Clerk improperly polled the jury. The record indicates that the Clerk stated separately to each juror that that juror had returned a verdict of guilty as to Issue No. 1, guilty as to Issue No. 2, guilty as to Issue No. 3, guilty as to Issue No. 4, and guilty as to Issue No. 5. He then asked that juror whether that was his verdict, to which the juror assented, and whether he still assented thereto, to which the juror replied in the affirmative. This procedure was repeated twelve different times, the only variation was that with the first two jurors the Clerk identified separately each of the five issues as "embezzling money" or "embezzling coupons." Thereafter, with the other ten jurors he denominated the charges only as Issues No. 1, No. 2, No. 3, No. 4 and No. 5. "The important thing is that all jurors clearly indicate their assent to the verdict ...." State v. Fate, 38 N.C.App. 68, 75, 247 S.E.2d 310, 314 (1978). This each juror clearly did. We hold that this procedure was substantially in accord with the requirements of G.S. 15A-1238 and note in passing that defendant made no request at trial that the Clerk be instructed to be more specific in the questions propounded to the jurors. See id.
No error.
ROBERT M. MARTIN and HILL, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315167/ | 280 S.E.2d 912 (1981)
STATE of North Carolina
v.
Bobby Dean RINCK and Ronald Dean McMurry.
No. 45.
Supreme Court of North Carolina.
August 17, 1981.
*917 Atty. Gen. Rufus L. Edmisten by Asst. Atty. Gen. Ralf F. Haskell, Raleigh, for the State.
Robert M. Grant, Jr., Newton, for defendant Bobby Dean Rinck.
Thomas C. Morphis, Hickory, for defendant Ronald Dean McMurry.
COPELAND, Justice.
I
While defendants have filed separate briefs before this court, there are several *918 issues that are argued by both of them. Therefore, for the sake of clarity and convenience, those issues which are raised by both defendants will be addressed first.
A
Defendants argue first that the trial court erred in granting the State's motion to consolidate their cases for trial. The essence of their argument is that by granting the State's motion, the trial court allowed the jury to consider evidence which was competent against only one defendant against both of them. We are compelled to disagree.
Upon the written motion of the prosecutor, charges against two or more defendants may be joined for trial when each of the defendants is charged with accountability for each offense. G.S. § 15A-926(b)(2) (1978). Such motions are addressed to the sound discretion of the trial court and are not reviewable on appeal absent a showing of abuse of discretion. E. g., State v. Hardy, 293 N.C. 105, 235 S.E.2d 828 (1977).
There has been no showing that the trial court abused its discretion. In the case sub judice, each defendant was charged with having committed the same offense at the same time; the first-degree murder of Donald B. Williamson on or about the 19th day of August 1979. Neither defendant acted at trial in such a way as to incriminate the other, and their defenses were not antagonistic. While it is the case that, on occasion, the State presented evidence that was competent only against one of the defendants, the trial court proceeded at those times to instruct the jury that such evidence was competent only against a particular defendant. Compare State v. Clark, 298 N.C. 529, 259 S.E.2d 271 (1979).
B
During its case-in-chief, the State offered the testimony of Mrs. Denise Allen, a dispatcher with the Catawba County Sheriff's Department, concerning a call for assistance which she received at 1:16 a. m. on 19 August 1979. Purporting to be decedent Williamson, the caller said that he had been robbed of his pocketbook which contained thirty-five dollars. Upon inquiry by the dispatcher, the caller identified his assailant as being "Bobby Swink." At the close of the voir dire held to determine the competency of Mrs. Allen's testimony concerning the conversation, the trial court ruled that the testimony was admissible as part of the res gestae of the crime of robbery but not as part of the res gestae of burglary. However, the trial court received the proffered testimony without limiting its consideration by the jury. There was no error.
Initially, we are compelled to observe that defendants are in violation of the Rules of Appellate Procedure. Rule 10(c) provides, in pertinent part, that "[e]ach assignment of error ... shall be followed by a listing of all the exceptions upon which it is based, identified by their numbers and by the pages of the record on appeal at which they appear." The exceptions to the actual receipt of the evidence in question are not so listed. Therefore, the Rules of Appellate Procedure mandate that they are deemed abandoned. N.C.R.App. p. 10(c). However, because of the gravity of this crime and the severity of the punishment imposed, we have elected to exercise our discretion and reach the merits of the argument. See N.C.R.App. p. 2.
We note initially that even if the trial court had committed error in its handling of this matter, that action could not have prejudiced defendant McMurry because the trial judge instructed the jury that it was not to consider the testimony of the dispatcher against him. The record indicates that, upon giving this instruction, the court asked the jury if the instruction was clear, and that all of the jurors nodded affirmatively. That being the case, defendant McMurry has no basis upon which to argue prejudicial error. See State v. Clark, supra.
Similarly, defendant Rinck has no basis upon which to assert error. Defendant *919 Rinck made a series of general objections to the dispatcher's testimony. At no time did he request a special instruction which would limit the jury's consideration of the evidence. Defendant's only motion sought to strike the entire conversation, not an instruction to limit its consideration by the jury. Consequently, the overruling of defendant Rinck's general objection without an appropriate limiting instruction was not error. State v. Montgomery, 291 N.C. 91, 229 S.E.2d 572 (1976).
C
Defendants next contend that the trial court erred in receiving evidence at trial which was obtained as a result of an illegal and unconstitutional arrest. An individual is arrested when law enforcement officers interrupt his activities and significantly restrict his freedom of action. State v. Morgan, 299 N.C. 191, 261 S.E.2d 827, cert. denied, 446 U.S. 986, 100 S.Ct. 2971, 64 L.Ed.2d 844 (1980). No one disputes that defendants were placed under arrest within a matter of minutes after being stopped as they walked along the road near decedent's house. However, defendants argue that there was no basis upon which law enforcement officers could legally detain or search them. If defendants are correct in their position, it follows necessarily that the subsequent arrests were invalid and cannot justify a search of their persons. After careful deliberation, we conclude that this assignment is without merit.
If from the totality of circumstances, a law enforcement officer has reasonable grounds to believe that criminal activity may be afoot, he may temporarily detain an individual. Terry v. Ohio, 392 U.S. 1, 20 L.Ed.2d 889, 88 S.Ct. 1868 (1968); State v. Buie, 297 N.C. 159, 254 S.E.2d 26, cert. denied, 444 U.S. 971, 100 S.Ct. 464, 62 L.Ed.2d 386 (1979); State v. Thompson, 296 N.C. 703, 252 S.E.2d 776, cert. denied, 444 U.S. 907, 100 S.Ct. 220, 62 L.Ed.2d 143 (1979); State v. Streeter, 283 N.C. 203, 195 S.E.2d 502 (1973). If upon detaining the individual, the officer's personal observations confirm that criminal activity may be afoot and suggest that the person detained may be armed, the officer may frisk him as a matter of self-protection. Terry v. Ohio, supra; State v. Buie, supra; State v. Streeter, supra.
In State v. Streeter, supra, the State's evidence tended to show that while they were on routine patrol at approximately 2:45 a. m., two police officers in Greenville, North Carolina observed the defendant walking along a highway roughly four hundred feet from a doctor's office. Because of the time and his proximity to the nearby business offices, defendant was approached by the officers and directed to stop. One of the officers testified that they had stopped the defendant to learn his identity and the reason he was in the area at that hour of the morning. As he talked with the defendant, one of the officers observed a bulge under the defendant's shirt, and he ordered defendant not to move. Thinking that the bulging object was a weapon, the officer touched it and though the object was made of metal. The policeman thereupon reached under the defendant's shirt and found one pair of gloves, one screwdriver, one hammer, one prybar, a flashlight, and a bank bag. Thereupon, the officers seized the items and arrested defendant for the possession of burglary tools. Over the objection of defendant, the trial court received the testimony of one of the officers concerning the encounter, as well as the items that had been seized.
On appeal, this court affirmed the judgment of the Court of Appeals finding no error in the defendant's trial. Writing for the majority, Justice Huskins drew upon the rule and rationale enunciated in Terry v. Ohio, supra, to uphold the officer's conduct in stopping the defendant and subsequently frisking him for weapons. The opinion notes that:
"Crimes of violence are on the increase, and officers are becoming the victims of such crimes in increasing numbers. As a result the necessity for officers to protect themselves and others in situations where probable cause for an arrest may be lacking is now recognized and permitted. Of *920 course, North Carolina has no `stop and frisk' statute although many states do. (Citation omitted.) The lack of such a statute, however, is not fatal to the authority of law enforcement officers in North Carolina to stop suspicious persons for questioning (field interrogation) and to search those persons for dangerous weapons (frisking). These practices have been a time-honored police procedure and have been recognized as valid at common law `as a reasonable and necessary police authority for the prevention of crime and the preservation of public order.'" (Citations omitted.) 283 N.C. at 209, 195 S.E.2d at 506.
It is our conclusion that Streeter controls the case sub judice, and, therefore, we hold that on the facts of this particular case there was nothing illegal about defendants being stopped or searched. It must be remembered that defendants were walking along the road at an unusual hour for persons to be going about their business. In this regard, the present case approximates the situation dealt with in Streeter. However, in one critical respect, there was a more compelling reason for stopping defendants as they walked along the road. The officer who directed them to stop knew that a homicide had been committed within a few hundred feet and within little more than the preceding half hour. While these circumstances do not constitute probable cause for an arrest, they do amount to a reasonable basis for directing defendants to stop and identify themselves.
However, to say that it was lawful to stop defendants as they walked along the road does not end the matter. It must be determined whether it was permissible for the officers to search defendants. Upon seeing them as they walked along the road near decedent's house, Lieutenant Finger turned on his blue light and directed defendants to stop. As we noted above, the officer was acting lawfully in directing the men to stop. Meanwhile, Deputy Sigmon and Lieutenant Burgess arrived at the scene. Both men had been at the Williamson house investigating the homicide, and they had seen the flashing blue light nearby. Lieutenant Burgess thereupon asked defendants to identify themselves. Defendant McMurry identified himself by his given name. However, defendant Rinck said that his name was "Shuford." Deputy Sigmon, who recognized defendants from his earlier encounter, told his fellow officers that defendant Rinck had identified himself earlier as "Swink."
At the same time, Lieutenant Burgess noticed a bulge in the left front pocket of defendant McMurry's pants. The officer also observed defendant McMurry placing his hand in the pocket. Thinking that the bulge was a weapon, Lieutenant Burgess grabbed defendant McMurry's hand and pulled it out of the pocket. The officer then reached in the pocket and retrieved a pill bottle which bore decedent's name. Thereupon, the officers placed both defendants under arrest and searched them.
Again, we perceive nothing unlawful. As we noted earlier, if an officer who has detained an individual has reason to believe that criminal activity may be afoot and that the individual may be armed, the officer may frisk him as a matter of self-protection. Terry v. Ohio, supra; State v. Buie, supra; State v. Streeter, supra. Such was the case here. Defendants had been lawfully stopped in close proximity to the scene of a recent homicide. Nothing else appearing, there were no grounds upon which a search could be justified. However, Officer Burgess observed a bulge in defendant McMurry's pocket. He also saw defendant McMurry put his hand in the pocket. A reasonable man facing the same set of circumstances would have reacted as did Lieutenant Burgess. That the search did not reveal a weapon is irrelevant. Evidence of a crime which is necessarily exposed by a limited weapons search is evidence which is lawfully obtained. State v. Streeter, supra.
Having established that there was adequate justification for stopping defendants as well as searching them, we now turn our attention to the question of whether there was probable cause to arrest defendants. *921 Unless probable cause existed at the time of their seizure, defendant's arrest was constitutionally invalid, State v. Streeter, supra, as well as statutorily prohibited. See G.S. § 15A-401 (Cum.Supp.1979). The existence of probable cause depends upon whether at the time of the arrest there were facts and circumstances within the knowledge of the arresting officer which would justify a prudent man's belief that a suspect had committed an offense. Beck v. Ohio, 379 U.S. 89, 85 S.Ct. 223, 13 L.Ed.2d 142 (1964); State v. Joyner, 301 N.C. 18, 269 S.E.2d 125 (1980); State v. Streeter, supra; see generally J. Cook, Constitutional Rights of the Accused; Pretrial Rights § 17 (1972). The existence of probable cause to arrest an individual is a pragmatic question to be determined in each case in light of the particular circumstances and the particular offense involved. State v. Harris, 279 N.C. 307, 182 S.E.2d 364 (1971).
We conclude from all the facts and circumstances in the case sub judice that there was probable cause to arrest defendants. Deputy Sigmon recognized defendants from his earlier encounter with them at decedent's house. That fact alone does not establish probable cause for an arrest. It is but one fact among several that must be considered. Not only had defendants been seen at decedent's home, they were observed going back into a dwelling where a body was subsequently found. Also, Deputy Sigmon recognized that defendant Rinck gave a different last name in identifying himself to Lieutenant Finger than he had at the house. Defendants' appearance were disheveled and there were stains upon their clothing that appeared to be blood. All of these considerations, coupled with the medicine bottle bearing decedent's name found in defendant McMurry's pocket, would be sufficient to justify a prudent man's belief that defendants had been involved in decedent's death. It, therefore, follows that the arresting officers were acting lawfully by thoroughly searching the person of each defendant and that the items so seized were not subject to being suppressed. Chimel v. California, 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969).
D
Similarly, we find no merit in defendants' contentions that by his questions of witnesses, his comments to counsel, and in his arranging of the evidence before the jury in his charge, the trial judge expressed an opinion as to their guilt in violation of G.S. § 15A-1222 (1978).
A trial judge may properly question witnesses in order to clarify and to promote a proper understanding of the testimony. E. g., State v. Riddick, 291 N.C. 399, 230 S.E.2d 506 (1976). However, such questions constitute prejudicial error if by their tenor, frequency, or persistence, the trial judge expresses an opinion. E. g., State v. Lea, 259 N.C. 398, 130 S.E.2d 688 (1963). In the case sub judice, we find nothing objectionable about the judge's questions. Since they were asked in a detached and neutral fashion, they tended to clarify unclear and confusing testimony.
Nor do we find anything objectionable in the judge's comments to defense counsel during the cross-examination of Deputy Sigmon. They were directed at the form of the questions employed, as well as the proper scope of cross-examination. The comments are straightforward, and they are not demeaning, insulting, or patronizing. See State v. Berry, 295 N.C. 534, 246 S.E.2d 758 (1978).
Defendants' objections to the judge's array of the evidence before the jury are also without merit. It is clear that while the judge spent more time summarizing the evidence for the State than he did the evidence for defendant Rinck,[3] the mere fact that a judge spends more time summarizing the evidence for the State does not amount to an expression of opinion. E. g., State v. Sanders, 288 N.C. 285, 218 S.E.2d 352 (1975), cert. denied, 423 U.S. 1091, 96 S.Ct. 886, 47 L.Ed.2d 102 (1976). *922 While evidence which is brought out on cross-examination is evidence for a defendant, State v. Sanders, 298 N.C. 512, 259 S.E.2d 258 (1979), it is not error for a court to fail to summarize such evidence if it is not of an exculpatory nature which goes to the establishment of a defense. State v. Moore, 301 N.C. 262, 271 S.E.2d 242 (1980). The cross-examination of the State's witnesses elicited no such evidence. Lastly, defendants argue that the trial court erred in failing to state their contentions sufficiently. A trial court is not required to state the contentions of the parties. E. g., State v. Dietz, 289 N.C. 488, 223 S.E.2d 357 (1976). In the present case, the court merely stated that it was the contention of the State that the jury ought to be satisfied of defendant's guilt beyond a reasonable doubt from all of the evidence; and that it was the contention of defendants that the State's evidence ought not to be believed, and that, at the very least, the jury ought to have a reasonable doubt as to their guilt. Nothing more is required, and it is clear from the record that the court gave equal stress to the contentions of the State as well as to those of defendants.
E
Defendants next contend that the trial court erred by submitting burglary to the jury as the underlying felony for first-degree murder on the theory of felony murder. There was no error.
A killing is committed in the perpetration or attempted perpetration of a felony when there is no break in the chain of events leading from the initial felony to the act causing death. State v. Thompson, 280 N.C. 202, 185 S.E.2d 666 (1972). The underlying felony is not deemed terminated prior to the killing merely because the participants have proceeded far enough to be convicted of the underlying felony. State v. Squire, 292 N.C. 494, 234 S.E.2d 563, cert. denied, 434 U.S. 998, 98 S.Ct. 638, 54 L.Ed.2d 493 (1977).
It is our conclusion that State v. Thompson, supra, controls the present case. In Thompson, the defendant broke and entered an apartment and took various articles of property. An accomplice asked the defendant if he had gotten everything he wanted. The defendant replied affirmatively, but he went on to say that he had something "to take care of." Upon further questioning by the accomplice, the defendant said that it was "somebody upstairs." The defendant then went upstairs to the apartment and killed a youth who lived there. On appeal, this Court held that it was not error to have charged the jury on felony murder with felonious breaking and entering and felonious larceny being the underlying felonies.
In the present case, the evidence tends to show a similar factual pattern to that of Thompson. At 1:16 a. m. a caller purporting to be decedent called the Catawba County Sheriff's Department and reported that he had been robbed by Bobby Swink. The dispatcher attempted to call back but the line was constantly busy. Investigating officers who discovered decedent's body found one of the telephones in the house off the hook, and the other telephone had its cord broken off. Defendants were at the scene of the homicide when the first officer arrived at the scene, and they left shortly thereafter. The State's evidence therefore tends to show that while the homicide was not committed to overcome resistance or consummate the crime of burglary, it was committed to silence the decedent and thereby prevent him from identifying defendants. In this respect, the present case is identical to State v. Thompson, supra.
There was no error.
F
Defendants were charged with the crime of first-degree murder. The State proceeded under a felony murder theory, and the trial judge so instructed the jury. Defendants now assert that the trial court erred in failing to charge the jury on the lesser included offenses of second-degree murder and voluntary manslaughter. There was no error.
*923 It is well-established in North Carolina that the trial court is under a duty to instruct the jury upon, and to submit for its consideration, a lesser included offense only when there is evidence tending to show the commission of such lesser included offense. State v. Squire, supra. In particular, where the law and the evidence justify the use of the felony murder rule, the State is not required to prove premeditation and deliberation, and neither is the court required to submit the offenses of second-degree murder or manslaughter unless there is evidence to support it. State v. Warren, 292 N.C. 235, 232 S.E.2d 419 (1977); State v. Swift, 290 N.C. 383, 226 S.E.2d 652 (1976).
Murder in the second degree is the unlawful killing of a human being with malice but without premeditation and deliberation. E. g., State v. Duboise, 279 N.C. 73, 181 S.E.2d 393 (1971). Voluntary manslaughter is the unlawful killing of a human being without malice, express or implied, and without premeditation and deliberation. E. g., State v. Fleming, 296 N.C. 559, 251 S.E.2d 430 (1979).
The State submits, and we agree, that the evidence tends to show that defendants killed decedent in the perpetration of the underlying felony of burglary. Compare State v. Thompson, supra. There is no evidence that decedent was killed other than in the course of the commission of the felony of burglary. There is no evidence in the record which would justify submitting any lesser included offenses. The record establishes that defendants were guilty of first-degree murder or not guilty of any crime. The State has established a prima facie case as to first-degree murder under the felony murder rule. No other crime was made out by the evidence.
There was no error.
II
We next address those assignments of error raised by defendant McMurry.
A
Defendant McMurry first contends that the trial court erred in denying his motion for pretrial discovery of the names of the State's witnesses.
It is well settled that a defendant in a criminal case is not entitled to a list of the State's witnesses who are to testify against him. G.S. 15A-903, which lists the information the State must disclose upon defendant's proper discovery motion, does not alter this rule. State v. Moore, 301 N.C. 262, 271 S.E.2d 242 (1980); State v. Sledge, 297 N.C. 227, 254 S.E.2d 579 (1979); State v. Smith, 291 N.C. 505, 231 S.E.2d 663 (1977). There was no error.
B
By his next assignment, McMurry argues that the trial court erred in failing to more fully set forth the elements of robbery in his charge to the jury. The trial judge defined robbery as follows:
"Robbery is the forcible taking and carrying away personal property of another from his person or in his presence without his consent with the intent to deprive him of its use permanently, the taker knowing that he is not entitled to take it."
This instruction was in compliance with the definitions of common law robbery previously outlined by this Court. State v. King, 299 N.C. 707, 264 S.E.2d 40 (1980); State v. Moore, 279 N.C. 455, 183 S.E.2d 546 (1971).
Defendant alleges that the trial judge should have also submitted an instruction to the jury on the lesser included offenses of non-felonious larceny and non-felonious breaking and entering. We disagree. McMurry was charged in an indictment with first-degree murder under the felony-murder doctrine. The State sought to prove that the murder occurred during the perpetration of the felony of burglary in the first-degree. First-degree burglary is defined as the breaking and entering in the nighttime of an occupied dwelling or sleeping apartment with the intent to commit a felony therein. State v. Simpson, 299 *924 N.C. 377, 261 S.E.2d 661 (1980); State v. Bell, 285 N.C. 746, 208 S.E.2d 506 (1974). The State's evidence tended to show that robbery was the felony that defendants intended to commit at the time of the breaking and entering into the home of Donald Williamson. Thus, the instructions on both burglary and armed robbery were submitted to the jury as part of the murder charge. Under such circumstances, the underlying felonies become part of the first-degree murder charge, prohibiting a further prosecution of the defendant for the underlying felonies. State v. Thompson, supra. Defendant McMurry could not have been lawfully convicted of robbery upon his indictment for first-degree murder. The court was therefore not required to instruct the jury as to the lesser included offenses of robbery. State v. Squire, supra. Defendant's assignment of error is without merit and overruled.
III
We finally address those issues argued solely by defendant Rinck.
A
Rinck submits that the trial court erred in admitting evidence of the telephone conversation between Deputy Denise Allen and a person identifying himself as the decedent, Donald B. Williamson.
Deputy Allen, a dispatcher for the Catawba County Sheriff's Department, testified for the State that she received a telephone call on one of the emergency lines at the Catawba County Communications Center at 1:16 a. m. on 19 August 1979. The caller identified himself as Donald Williamson and stated that he had just been robbed of his pocketbook containing about $35.00. He identified one of his assailants as "Bobby Swink." Upon Deputy Allen's request, the caller gave his address, telephone number, and a description of his house. The entire conversation was tape recorded and retained as part of the records of the Catawba County Sheriff's Department, as are all calls made on the Communications Center's emergency lines. A transcript of the recorded conversation was received into evidence.
Defendant maintains that the evidence of the telephone call was improperly admitted on two grounds; first, because the State was unable to sufficiently identify the caller as Donald Williamson and second, because the statements made in the telephone conversation were hearsay and not admissible under any of the recognized exceptions to the hearsay rule.
Justice Exum, speaking for the Court in State v. Richards, 294 N.C. 474, 480, 242 S.E.2d 844, 849 (1978), summarized the principles of law relevant to establishing the identity of a telephone caller as follows:
"Before a witness may relate what he heard during a telephone conversation with another person, the identity of the person with whom the witness was speaking must be established. State v. Williams, 288 N.C. 680, 698, 220 S.E.2d 558, 571 (1975). If the call was from the person whose identity is in question, the mere fact that he represented himself to be a certain person is not enough to identify him as that person, 1 Stansbury's N.C. Evidence § 96, p. 310 (Brandis Rev. 1973) accord, State v. Williams, supra. Identity of the caller may be established by testimony that the witness recognized the caller's voice, or by circumstantial evidence. State v. Williams, supra, 288 N.C. at 698, 220 S.E.2d at 571. It is not always necessary to prove the identification before introducing evidence of the conversation, particularly in criminal prosecutions where secrecy, anonymity and concealed identity are generally resorted to. In such cases it is only necessary that identity of the person be shown directly or by circumstances somewhere in the development of the case.... State v. Strickland, 229 N.C. 201, 208, 49 S.E.2d 469, 474 (1948)."
Applying these principles to the facts of the case sub judice, we find that there was sufficient evidence presented to identify the caller as Donald Williamson. During the conversation, the caller clearly *925 stated his name, address, and telephone number and gave an accurate description of his house, all of which information was verified by law enforcement officers. Further, although Deputy Allen was not personally familiar with Mr. Williamson's voice so as to recognize it at the time of the conversation, both decedent's daughter, Zonnie Reinhardt, and his granddaughter, Candy Frye, listened to the tape recording of the call at voir dire and were able to immediately and without hesitation identify the male voice on the tape as that of decedent.
We are likewise unpersuaded by defendant Rinck's contention that, assuming the identify of the caller was sufficiently established, Deputy Allen's testimony regarding the substance of that conversation and the transcript of the tape recording of the call were still inadmissible as hearsay not falling within any of the recognized exceptions to the hearsay rule. Whenever a statement of any person other than the witness himself in his present testimony is offered to prove the truth of the matter asserted, the evidence so offered is hearsay. State v. Tilley, 292 N.C. 132, 232 S.E.2d 433 (1977). Stated differently, evidence, whether oral or written, is hearsay "when its probative force depends, in whole or in part, upon the competency and credibility of some person other than the witness by whom it is sought to produce it." State v. Deck, 285 N.C. 209, 213, 203 S.E.2d 830, 833 (1974). Unless it falls within one of the recognized exceptions to the hearsay rule, hearsay evidence is inadmissible. State v. Connley, 295 N.C. 327, 245 S.E.2d 663 (1978), death sentence vacated, 441 U.S. 929, 99 S.Ct. 2046, 60 L.Ed.2d 657 (1979). Indisputably, the content of the telephone conversation between Deputy Allen and the decedent was hearsay, as the evidence was offered to prove the truth of the matters discussed during the call and its probative force depended upon the credibility of the decedent. We hold, however, that this evidence falls within two well-established exceptions to the hearsay rule and was therefore properly admitted.
First, Deputy Allen's testimony regarding the entire conversation was admissible under the res gestae exception. Under that exception, statements made by an individual immediately prior to or during the course of a continuing criminal transaction are admissible despite their hearsay nature. The res gestae doctrine was described in State v. Connley, supra, as follows:
"The rule of res gestae, under which it is said that all facts which are a part of the res gestae are admissible, is a rule determining the relevancy and not the character or probative force of the evidence. If the court determines that the fact offered is a part of the res gestae, it will be accepted, because, as it is said, that fact is then relevant.... Circumstances constituting a criminal transaction which is being investigated by the jury, and which are so interwoven with other circumstances and with the principal facts which are at issue that they cannot be very well separated from the principal facts without depriving the jury of proof which is necessary for it to have in order to reach a direct conclusion on the evidence, may be regarded as res gestae.
These facts include declarations which grow out of the main fact, shed light upon it, and which are unpremeditated, spontaneous, and made at a time so near, either prior or subsequent to the main act, as to exclude the idea of deliberation or fabrication. A statement made as part of res gestae does not narrate a past event, but it is the event speaking through the person and therefore is not excluded as hearsay, and precludes the idea of design." 295 N.C. at 341-2, 245 S.E.2d at 672, quoting from 1 Underhill's Criminal Evidence § 266 (5th Ed. 1956).
For a declaration to be competent as part of the res gestae, the State must show: (a) that the declaration was of such a spontaneous character that it is unlikely that the declarant had the opportunity to reflect and fabricate; (b) that it was spoken contemporaneously with the transaction or so close in *926 time to the transaction as to be practically inseparable therefrom; and (c) it must be relevant to the facts sought to be proved. State v. Vestal, 278 N.C. 561, 180 S.E.2d 755, cert. denied, 414 U.S. 874, 94 S.Ct. 157, 38 L.Ed.2d 114 (1971); Coley v. Phillips, 224 N.C. 618, 31 S.E.2d 757 (1944).
Both Deputy Allen's testimony and the transcript of the tape clearly show that when the decedent called the dispatcher, he immediately stated that he had "just" been robbed. In addition, although the decedent was alive during the phone conversation, the State's evidence indicates that he was killed no more than seventeen minutes after the call, at which time law enforcement officers arrived at his home and found his body. Deputy Allen testified that she called decedent's home immediately after their conversation to verify the call, but was unable to get anything other than a busy signal. The officers who investigated the incident found that decedent's phone had been taken off the hook. This evidence is sufficient to show the spontaneous character of the phone conversation and the fact that it was made contemporaneously with the continuing criminal transaction of the robbery and the homicide. Under these facts, we hold that Deputy Allen's testimony concerning the phone conversation was properly admitted as part of the res gestae. See also State v. Cawthorne, 290 N.C. 639, 227 S.E.2d 528 (1976).
The transcript of the tape recording of the phone call was likewise admissible under the business records exception to the hearsay rule. Business entries made in the regular course of business, at or near the time of the transaction, and which are authenticated by a witness who is familiar with the system under which they are made, are admissible despite their hearsay nature. State v. Connley, supra; 1 Stansbury's N.C. Evidence § 155 (Brandis Rev. 1973). Several witnesses employed by the Catawba County Sheriff's Department testified at voir dire that all calls made on the emergency lines of the Catawba County Communications Center were regularly recorded and stored, and that the call at issue in this case was recorded and stored in the normal manner. The transcript of this conversation was thus admissible as a business entry.
B
Defendant Rinck next argues that the trial court erred in allowing several of the State's witnesses to testify that the decedent, Donald Williamson had often referred to defendant Rinck by the name "Bobby Swink." Defendant complains that such testimony was inadmissible hearsay evidence not falling within any recognized exception to the hearsay rule.
It is well settled that an individual's statements concerning his own state of mind are admissible to prove his state of mind, knowledge and intention, despite the hearsay nature of the statements. 1 Stansbury's North Carolina Evidence § 161 (Brandis Rev. 1973). In the case before us, several witnesses testified that the decedent had referred to defendant as "Bobby Swink" on several occasions prior to his death. This evidence was offered to show the decedent's knowledge of defendant Rinck's identity and to explain why he referred to him as "Bobby Swink" during the telephone call to the Catawba County Police Department at 1:16 a. m. on 19 August 1979. Consequently, the testimony was properly admitted and defendant's allegations to the contrary are without merit.
C
Defendant Rinck further argues that even if the hearsay evidence of the phone call between the deceased and Deputy Allen on 19 August 1979 is admissible under an exception to the hearsay rule, the admission of this evidence is nevertheless a violation of defendant's right under the Sixth Amendment to the United States Constitution to confront the witness presented against him.
In support of his argument, defendant chiefly relies on the recent case of Ohio v. Roberts, 448 U.S. 56, 100 S.Ct. 2531, 65 L.Ed.2d 597 (1980). The Court in Roberts, *927 however did not prohibit the use of hearsay testimony, but merely expressed a strong preference for face-to-face confrontation and suggested a weighing of this preference against considerations of public policy and the necessities of the case. See also Dutton v. Evans, 400 U.S. 74, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970). The court held that hearsay evidence may be used without violating an accused's sixth amendment right of confrontation where: (a) the declarant is unavailable to testify at defendant's trial and (b) where the testimony bears adequate indicia of reliability, which reliability can be inferred where the evidence falls within a firmly established hearsay exception.
In the case sub judice, decedent's death rendered him unavailable to testify at defendant's trial. Furthermore, we held that evidence of the phone conversation between Donald Williamson and Deputy Allen fell into two well recognized exceptions to the rule which renders hearsay evidence generally inadmissible. The fact that the conversation was part of the res gestae of the robbery and homicide offenses indicates its reliability, in that the decedent had not had the opportunity to fabricate his statements. Under these circumstances we find that the necessity of using the hearsay evidence outweighs the preference for in-court confrontation of the witness, and defendant Rinck's assignment of error is without merit.
D
Defendant Rinck finally contends that the trial court erred in sustaining the State's objections to several of his attempts to explain his answers, thereby violating his right to testify in his own behalf pursuant to G.S. 8-54. We disagree.
We find that any error by the trial court in sustaining the State's objections was cured when the evidence sought to be admitted was subsequently admitted without objection. State v. Colvin, 297 N.C. 691, 256 S.E.2d 689 (1979); State v. Milano, 297 N.C. 485, 256 S.E.2d 154 (1979); State v. Holmes, 296 N.C. 47, 249 S.E.2d 380 (1978). Consequently, defendant's assignment of error is overruled.
Defendants received a fair trial free from prejudicial error and we find
NO ERROR.
NOTES
[3] Defendant McMurry did not offer any evidence. The court instructed the jury that they were not to use defendant McMurry's silence against him in any way. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2446180/ | 4 A.3d 191 (2010)
FONSECA
v.
TARTAR.
No. 1313 WDA 2009.
Superior Court of Pennsylvania.
May 13, 2010.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315141/ | 280 S.E.2d 632 (1981)
KIRKPATRICK & ASSOCIATES, INC.
v.
The WICKES CORPORATION, t/a Wickes Lumber and Building Supplies.
No. 8110SC44.
Court of Appeals of North Carolina.
August 4, 1981.
*634 Boyce, Mitchell, Burns & Smith by Lacy M. Presnell III, Raleigh, for plaintiff-appellant.
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan by Nigle B. Barrow, Jr., Raleigh, for defendant-appellee.
HARRY C. MARTIN, Judge.
Summary judgment is appropriate only when the evidence before the court demonstrates that there is no genuine issue as to any material fact and that a party is entitled to a judgment as a matter of law. N.C.Gen.Stat. 1A-1, Rule 56(c). Here, the facts are not controverted. The sole issue on appeal is whether, as a matter of law, plaintiff is entitled to indemnification by defendant under the terms of the contract.
In interpreting a contract of indemnity, the Court's function is to ascertain and give effect to the intention of the parties, and the ordinary rules of contract construction apply. Dixie Container Corp. v. Dale, 273 N.C. 624, 160 S.E.2d 708 (1968). Where the contractual language is clear and unambiguous, the Court must interpret the contract as written. Corbin v. Langdon, 23 N.C.App. 21, 208 S.E.2d 251 (1974). In an indemnity contract, the agreement will be construed to cover all losses, damages, and liabilities which reasonably appear to have been within the contemplation of the parties, but not those which are neither expressed nor reasonably inferrable from the terms. Dixie Container Corp., supra. Indemnity contracts are entered into to save one party harmless from some loss or obligation which it has incurred or may incur to a third party. Id.
We agree with plaintiff's position that the language in the indemnification clause here in question does require defendant to indemnify plaintiff for any claims made in connection with the work that defendant, as subcontractor, agreed to perform, regardless of whether the claims were occasioned by defendant or by third parties. Defendant agreed
to save and indemnify and keep harmless [plaintiff] against all liability, claims, judgments or demands for damages arising from accidents to persons or property, whether occasioned by [defendant], his agents or employees, provided said accidents occur in connection with [defendant's] work or are occasioned by [defendant], his agents or employees, in connection with other work .... [Emphasis ours.]
The agreement clearly covers an accident which occurs in connection with the roofing work defendant contracted to perform. It would also cover accidents occasioned, or caused, by defendant associated with other work. In either event, the undisputed facts show that Clifford Dunn, at the time he was killed, was performing roofing work that was defendant's obligation or was connected with the same. The fact that his status was that of an independent contractor is irrelevant and does not destroy or alter defendant's contractual obligation. The agreement plainly does not require that defendant itself actually cause the injury or loss upon which recovery is sought.
Defendant contends that because plaintiff admitted its own negligence and that such negligence was a proximate cause of Dunn's death, it is barred from recovering under the contract by the doctrine of contributory negligence or assumed risk. The cases cited by defendant, Etheridge v. Light Co., 249 N.C. 367, 106 S.E.2d 560 (1959); Clark v. Freight Carriers, 247 N.C. 705, 102 S.E.2d 252 (1958), and Dalrymple v. Sinkoe, 230 N.C. 453, 53 S.E.2d 437 (1949), do not involve indemnity contracts. Negligence is not an issue in the case sub judice, as plaintiff's action is based not upon allegations of defendant's negligence but upon the existence of the indemnification contract. See Dixie Container Corp., supra.
*635 Defendant cites the language of Hill v. Freight Carriers Corp., 235 N.C. 705, 710, 71 S.E.2d 133, 137 (1952), as authority for its proposition that public policy opposes contracting against liability from one's own negligence:
Contracts which seek to exculpate one of the parties from liability for his own negligence are not favored by the law.... Hence it is a universal rule that such exculpatory clause is strictly construed against the party asserting it.... It will never be so construed as to exempt the indemnitee from liability for his own negligence or the negligence of his employees in the absence of explicit language clearly indicating that such was the intent of the parties.
(Citations omitted.) Hill was decided under Georgia law, and concerned a situation in which the plaintiff leased his tractor to defendant, a common carrier, under a contract including a provision that the plaintiff "will bear the expense of all losses thru fire, theft & collision to said motor vehicle and [the defendant] is not responsible for any of the above said losses." Id. at 706, 71 S.E.2d at 134. While the plaintiff was operating the tractor on business for the defendant, he was involved in an accident with another driver who was on a trip for the defendant under a similar contract. The defendant sought to exculpate itself from liability for damages incurred by the plaintiff under the fellow servant doctrine and the terms of the contract. The Court, in applying the law of Georgia, held that the contract did not relieve the defendant of liability for two reasons: (1) the language used did not clearly indicate such an intent, and (2) it would be contrary to public policy to permit a common carrier to contract against liability for damages caused by its employees' negligence while engaged in operating its vehicles used in interstate commerce.
Hill has no application to the present case. It is well established in North Carolina that "[i]t is not contrary to public policy for an indemnitee to contract with another to save him harmless from liability to a third party." Gibbs v. Light Co., 265 N.C. 459, 467, 144 S.E.2d 393, 400 (1965).
There is a distinction between contracts whereby one seeks to wholly exempt himself from liability for the consequences of his negligent acts, and contracts of indemnity against liability imposed for the consequences of his negligent acts. The contract in the instant case is of the latter class and is more favored in law.
Id. Accord, Cooper v. Owsley & Son, Inc., 43 N.C.App. 261, 258 S.E.2d 842 (1979). Defendant's ultimate liability to plaintiff is in contract, not in tort. See Hargrove v. Plumbing and Heating Service, 31 N.C.App. 1, 228 S.E.2d 461, disc. rev. denied, 291 N.C. 448, 230 S.E.2d 765 (1976). To construe the language of the indemnity clause to be ineffective under the circumstances of this case would render the provision virtually meaningless.[1]Cooper, supra. There are few situations conceivable where a party would be seeking indemnification had it not been guilty of some fault, for otherwise no judgment could be recovered against it. Id.; Hargrove, supra. Plaintiff's admission of negligence does not bar its claim for recovery based upon the indemnity clause.
Defendant further relies on the fact that it was released and discharged by Clifford Dunn's estate from liability resulting from Dunn's death. It argues that the estate thereby implicitly released plaintiff from claims for which plaintiff may have been liable as a result of defendant's acts; therefore any payments made by plaintiff to the estate were merely voluntary. Although the release was apparently before the trial court, it has not been made a part of the record on appeal, and we are unable to determine if, by its terms, it released all other tortfeasors or was limited to defendant. If defendant had believed the estate's claim against plaintiff was based upon the same acts as the claim against itself, it *636 should have assumed and defended the claim by the estate against plaintiff, as plaintiff requested it to do under the indemnity agreement. Defendant apparently believed the claim against plaintiff arose from a separate tort and refused to assume and defend it. Because of its refusal to do so, plaintiff was entitled to make a good faith settlement with the estate, as the law encourages settlements. See Wheeler v. Denton, 9 N.C.App. 167, 175 S.E.2d 769 (1970); 12 Strong's N.C. Index 3d Torts § 7.7 (1978). Dunn's estate filed separate claims against plaintiff and defendant, and the release in favor of defendant had no effect as to the claim against plaintiff. Plaintiff's right to indemnity does not rest upon any theory of subrogation to the rights of the injured party. Strong's, supra, § 3.1. Indemnity assumes derivative fault, not joint fault. Id.; Edwards v. Hamill, 262 N.C. 528, 138 S.E.2d 151 (1964). Defendant's liability for the claim against plaintiff arose solely from its contractual obligation.
A settlement is presumed to be fair and reasonable, and the burden of showing a lack of good faith is upon the party asserting it. Wheeler, supra. In its complaint, plaintiff alleged that its settlement with Dunn's estate was fair and reasonable. Defendant generally denied the allegation, but offered no forecast of evidence to sustain its motion for summary judgment on this issue. Defendant cannot rely on the bald allegation of its pleadings alone, in the face of the presumption of the regularity of settlements. Therefore, there is no genuine issue of fact as to a bona fide settlement, and plaintiff was entitled to judgment as a matter of law on the basis of the indemnification agreement. The trial court erred in granting summary judgment to defendant and denying plaintiff's motion for the same. The actions of the trial court are
Reversed.
HEDRICK and WELLS, JJ., concur.
NOTES
[1] In its brief, defendant argues that, under the construction it urges, there might still be provided indemnity for such acts as mere negligent supervision by plaintiff. While the logic of this conclusion eludes us, we do not believe that the parties could have intended to draw up a contract of indemnity applicable to so narrow an interpretation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1315140/ | 303 P.2d 667 (1956)
Ray E. LUNDAHL, Plaintiff-Appellant,
v.
CITY OF IDAHO FALLS, a municipal corporation, Defendant-Respondent.
No. 8484.
Supreme Court of Idaho.
October 30, 1956.
Rehearing Denied December 4, 1956.
John Ferebauer, Idaho Falls, for appellant.
Albaugh, Bloem, Barnard & Smith, Idaho Falls, Richards, Haga & Eberle, Boise, for respondent.
PORTER, Justice.
The allegations in appellant's amended complaint pertinent on this appeal are generally as follows: That appellant is the owner of certain lots in the City of Idaho Falls and the garage building located thereon, and that there is a public alley immediately adjacent to such garage. That on or about the 22nd day of July, 1952, respondent entered into an employment contract for the construction of a sewer in Special Improvement District No. 23 with Coleman Plumbing & Heating Company, a co-partnership, such construction to include the installation of a sewer line along such public alley adjacent to appellant's garage. That such contract provided for an inspection *668 of the work and materials by respondent.
That on or about the 2nd day of November, 1953, the Coleman Plumbing & Heating Company and their agents, while engaged in excavating for the purpose of sewer construction in said public alley, negligently, recklessly and carelessly, exploded large quantities of explosives at a point in said alley approximately eight feet from the south wall of such garage and "thereby produced great and violent concussions and vibrations of the earth and air which shoot the said land and said building of the plaintiff and the air above and around them and caused great injury to the lava substrata underlying said land and building by cracking and breaking same, and causing great injury to the foundation of said building and whole superstructure, including its walls, windows, ceilings and chimneys, and rendered the same unsafe and uninhabitable. That such carelessness, recklessness and negligence of the defendant was as follows:
"1. Using dynamite in blasting to a greater extent than reasonably necessary.
"2. Using excessive and unduly heavy charges of dynamite in blasting and not protecting it in such a manner as not to damage plaintiff's said property.
"3. Failure to take proper care with regards to the place and surroundings of the blasting complained of.
"4. Failure to take the usual precautions to prevent injury to plaintiff's said property from blasting.
"5. Failure to utilize recongized and available methods of blasting to protect plaintiff's said property.
"6. Failure to use a different method of blasting after warnings and notice of damage to plaintiff's said property."
And that on November 2, 1953, and prior to the above mentioned explosion, appellant advised the Mayor and City Engineer of the City of Idaho Falls of the negligent, careless and reckless manner in which the Coleman Plumbing & Heating Company was conducting the removal and blasting of lava rock in the alley adjacent to such garage, and asked that said blasting be stopped until such operations could be conducted in a manner so as not to endanger plaintiff's property; but that said Mayor and City Engineer of respondent refused to stop the Coleman Plumbing & Heating Company from continuing said blasting.
Respondent filed a demurrer to the amended complaint containing both a general and special demurrer. After a hearing on the demurrer the court entered an Order and Judgment of Dismissal wherein it was ordered and adjudged that defendant's demurrer to plaintiff's amended complaint be sustained, and that said action be and is dismissed. It is apparent that such order and judgment were directed to the general demurrer. No leave to amend was mentioned or granted and nothing was said in such order concerning the special demurrer. From such judgment of dismissal, appeal has been taken to this court.
The questions to be considered on this appeal are: First, whether or not a municipality is liable for the torts of its officers and employees committed in the construction of a sewer system; and Second, does such liability, if any, include torts committed by an independent contractor? The principles involved are succinctly set out in McQuillin on Municipal Corporations, (3rd Ed.) Vol. 18, pp. 488-492, as follows:
"Although the contrary has also been held by many judicial judgments, which announce that, in performing such function, a city acts in a governmental capacity, it is generally held that a municipality in constructing and maintaining drains and sewers acts in its corporate and ministerial capacity, and, therefore, is liable for negligence resulting in injury relating thereto. * * * A municipality is responsible for damages which accrue to individuals and corporations through negligence *669 in the construction, maintenance or operation of its system of sewers because that system when constructed becomes the property of the municipality and must be so used as not to damage persons or property. This corporate duty imposed upon the municipality cannot be avoided, shifted or cast upon another as by contracting with some third person to perform this municipal obligation."
It is established in this jurisdiction that a municipality, in the absence of a statute imposing liability, is not liable for the torts of its officers and employees when exercising a governmental function and is liable when acting in a proprietary capacity. In Strickfaden v. Greencreek Highway District, 42 Idaho 738, at page 750, 248 P. 456, at page 458, 49 A.L.R. 1057, the rule was set out as follows:
"It is well recognized that there are two kinds of duties imposed or conferred upon municipal corporations; those termed public governmental functions, where the municipality performs certain duties as an agent or arm of the state, and those other municipal activities which are sometimes termed administrative, ministerial, corporate, private, or proprietary functions, performed for the municipality's own benefit, or for the benefit of its citizens, and, while acting in the performance of its governmental functions or in a public capacity as an arm or agency of the state, the municipality is not liable for its failure to exercise these powers or for their negligent exercise, unless such liability has been imposed by statute."
See Boise Development Co. v. Boise City, 30 Idaho 675, 167 P. 1032; Henderson v. Twin Falls County, 56 Idaho 124, 50 P.2d 597, 101 A.L.R. 1151; Hooton v. City of Burley, 70 Idaho 369, 219 P.2d 651; Bingham v. Board of Education of Ogden City, Utah, 223 P.2d 432; Ramirez v. Ogden City, 3 Utah 2d 102, 279 P.2d 463, 47 A.L.R. 2d 539; Davis v. Provo City Corp., 1 Utah 2d 244, 265 P.2d 415; Burnett v. City of San Diego, 127 Cal. App. 2d 191, 273 P.2d 345, 47 A.L.R. 2d 1079.
Some differences arise between the authorities as to liability in specific cases by reason of different definitions of what constitutes a governmental function. In Ramirez v. Ogden City, supra, Headnote 4 sets out one test as to whether an activity is governmental, and reads as follows:
"A `governmental function,' as to which municipality is immune from tort liability, must be something done or furnished for the general public good, and whether there is special pecuniary beneficial profit to municipality and whether activity is of such a nature as to be in real competition with free enterprise are facts to be considered."
In this jurisdiction the definition of governmental functions was set out in Boise Development Co. v. Boise City, supra [30 Idaho 675, 167 P. 1034], as "`legal duties imposed by the state upon its creature, which it may not omit with impunity but must perform at its peril. * * * They are all imposed by statute, and are necessarily mandatory or peremptory functions. * * *'" This definition of governmental functions of a municipality has been followed in Youmans v. Thornton, 31 Idaho 10, 168 P. 1141; Crane v. City of Harrison, 40 Idaho 229, 232 P. 578, 38 A.L.R. 15; Stephenson v. Pioneer Irrigation District, 49 Idaho 189, 288 P. 421, 69 A.L.R. 1225; Henderson v. Twin Falls County, supra.
Boise Development Co. v. Boise City, supra, holds that the grant to the City of Boise of power or authority to maintain a public park enjoins no absolute duty upon the City to do so, but merely confers the privilege by extending the lawful corporate authority of the city in such case, and that the care and maintenance of parks is primarily a private as opposed to a governmental function. While authority is granted to municipalities to construct and maintain sewers, there has been no constitutional or statutory provision brought to our attention requiring and making it mandatory for cities to construct sewer lines.
*670 Barker v. City of Santa Fe, 47 N.M. 85, 136 P.2d 480, on pages 482, 483, contains an excellent discussion of this question wherein it is said, as follows:
"We find from an examination of our statutes that municipalities have authority to build and maintain sewers but there is no imperative legislative command that they do so. Such facilities do not pertain to the administration of government, to say the least, not to state government. See City of Waco v. Branch, 117 Tex. 394, 5 S.W.2d 498. It can hardly be said that a municipality in the construction and maintenance of a sewer system acts for the state-wide public generally. It is a local improvement and is paid for generally by local assessments on the theory of benefits to the properties served and the owners and users thereof."
See also, 38 Am.Jur., Municipal Corporations, p. 330, sec. 629, and p. 334, sec. 633.
In this jurisdiction municipalities have been generally held liable for negligence in the construction and maintenance of drainage and sewer systems and in other activities which the municipalities are empowered but not required to carry out.
In Wilson v. Boise City, 6 Idaho 391, 55 P. 887, Boise City constructed an artificial canal, changing and diverting the course of the waters of Cottonwood Creek through the City of Boise. The city was held liable for constructing such artificial channel of insufficient size to carry such waters whereby the property of others was damaged. In Willson v. Boise City, 20 Idaho 133, 117 P. 115, 36 L.R.A.,N.S., 1158, the same artificial channel was involved and again the city was held liable for damages.
In Dunn v. Boise City, 48 Idaho 550, 283 P. 606, the city had undertaken to channel the waters of Sand Creek through the City of Boise. The city was held liable for damages arising from failure to keep such channel in repair.
In Boise Development Co. v. Boise City, supra, the City of Boise, in the maintenance of a public park diverted the waters of Boise River, causing damage to the land of third parties. The city was held liable for such damage.
In Henderson v. Twin Falls County, supra, a county hospital, built primarily to care for indigent patients, was held to be acting in a proprietary capacity in the treatment of pay patients and was held liable for injury resulting from negligent treatment.
In Schmidt v. Village of Kimberly, 74 Idaho 48, 256 P.2d 515, in considering a combined water and sewer system, we held that the municipality, in the building and operation thereof, was acting in a proprietary capacity.
In Boise Development Co. v. Boise City, 30 Idaho 675, at page 690, 167 P. 1032, at page 1035, it is said:
"Nor does the city's liability in such cases rest solely upon the narrow ground of negligence, but rather upon the broad legal principle that no one is permitted to so use his own property as to invade the property rights, or cause injury or damage to the property, of another."
It will be noted that in Wilson v. Boise City, 6 Idaho 391, 55 P. 887; Dunn v. Boise City, supra; Splinter v. City of Nampa, 70 Idaho 287, 215 P.2d 999, 17 A.L.R. 2d 665 and McGrath v. Basich Bros. Const. Co., 7 Cal. App. 2d 573, 46 P.2d 981, reference is made to the same principle.
In this jurisdiction a municipality must be held to be liable for the torts of its officers and employees committed in the construction of a sewer system.
Respondent urges that although it be granted respondent would be liable in the construction of its sewer system for the negligence of its officers and employees, the amended complaint in this action shows that the Coleman Plumbing & Heating Company was an independent contractor and that the municipality would not be liable for the torts of such independent contractor. Blasting in a populated area and *671 in the vicinity of buildings is dangerous and hazardous and if not done with adequate and proper precautions and by proper means and methods, becomes a nuisance. Colton v. Onderdonk, 69 Cal. 155, 10 P. 395; Munro v. Pacific Coast Dredging & Reclamation Co., 84 Cal. 515, 24 P. 303; McGrath v. Basich Bros. Const. Co., supra; Alonso v. Hills, Cal.App., 214 P.2d 50. The allegations in the amended complaint are that the blasting was being done in such a negligent manner as to create a nuisance and that the respondent, through its proper officers, was notified of such condition and refused to remedy the same. Under such conditions, the city cannot escape liability because the work was being done by an independent contractor.
In 27 Am.Jur., Independent Contractors, p. 512, sec. 33, the rule is laid down as follows:
"* * * On the other hand, the position has been taken, in some jurisdictions, that the employer is bound to adopt preventive or remedial measures whenever he is informed that the contractor is resorting to a method of work which constitutes a nuisance or that dangerous conditions of a more or less permanent nature have been created in the course of the work. The propriety of holding the employer liable is especially clear where the nuisance complained of is one created on premises over which he continues, during the progress of the work, to exercise control concurrently with the contractor. Under such circumstances, the nature and extent of the employer's responsibility is determined by the principle that a person `must not suffer a nuisance to continue on his premises to the injury of others, although he is not responsible for its creation.'"
See also, Annotation, 30 A.L.R. 1532.
The amended complaint of appellant states a cause of action good as against the general demurrer. The various questions raised under the special demurrer were not specifically decided by the trial court and are not presented and discussed by the briefs of counsel. The judgment of dismissal is reversed and the cause remanded to the trial court with instructions to vacate the judgment of dismissal, overrule the general demurrer, decide the questions raised by the special demurrer and to proceed in the premises. Costs to appellant.
TAYLOR, C. J., and KEETON, ANDERSON and SMITH, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3768430/ | {¶ 61} I concur with the majority except for its limited remand for a partial resentencing. I would vacate the entire sentence and remand for a new sentencing hearing on all the convictions which the majority has affirmed. I also find it necessary to remand to require the court to state adequate reasons to support four consecutive sentences. The trial court found that McSwain "committed the worst forms of these offenses" and that the harm caused by the multiple offenses was "so great or unusual," and yet the trial court failed to state its reasons for such a finding to justify four consecutive sentences. | 01-03-2023 | 07-06-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/2260581/ | 125 Cal.Rptr.2d 211 (2002)
101 Cal.App.4th 982
SOUTHERN CALIFORNIA EDISON COMPANY, Petitioner,
v.
The PUBLIC UTILITIES COMMISSION OF THE STATE of California, Respondent;
County of Los Angeles, Petitioner,
v.
The Public Utilities Commission of the State of California, Respondent;
The California Cogeneration Council, Petitioner,
v.
The Public Utilities Commission of the State of California, Respondent;
Independent Energy Producers Association, Petitioner,
v.
The Public Utilities Commission of the State of California, Respondent;
Central Hydroelectric Corporation, Petitioner,
v.
The Public Utilities Commission of the State of California, Respondent.
Nos. B155748, B157031, B157038, B157773, B160717.
Court of Appeal, Second District, Division Seven.
September 4, 2002.
As Modified on Denial of Rehearing September 30, 2002.
Review Denied November 26, 2002.[*]
*213 Stephen E. Pickett, Russell C. Swartz and James B. Woodruff, Rosemead, for Petitioner Southern California Edison Company.
Lloyd W. Pellman, John F. Krattli, Los Angeles, Lillian D. Salinger, and Roger A. Berliner, Washington, Dist of Columbia, for Petitioner County of Los Angeles.
White & Case, Jerry R. Bloom, Los Angeles, Dan Woods, Joseph M. Karp and Karen E. Edmonson, Los Angeles, for Petitioner The California Cogeneration Council.
Ellison, Schneider & Harris, Douglas K. Kerner, Sacramento, for Petitioner Independent Energy Producers Association.
*214 Dale W. Mahon, Elk Grove, for Petitioner Central Hydroelectric Corporation.
Gary M. Cohen, Mary F. McKenzie, San Francisco, and Amy C. Yip-Kikugawa, for Public Utilities Commission of the State of California.
*212 MUNOZ (AURELIO), J.[*]
We issued a writ of review in this case to consider the lawfulness of certain rulings by the Public Utilities Commission (Commission), revising a formula adopted pursuant to Public Utilities Code section 390, subdivision (b), which is used to determine the amount petitioner Southern California Edison (Edison) is required to pay certain providers of small amounts of electricity. We affirm the decisions of the Commission except as modified.
PROCEDURAL BACKGROUND
On March 27, 2001, in Decision No. 01-03-067[1] (Decision) the Commission instituted a new formula by which to measure a portion of a utility's short run avoided costs (SRAC). (Cal.P.U.C. Decision Modifying Decision 96-12-028 (March 27, 2001) Dec. No. 01-03-067.) Edison's petition for rehearing was denied by the Commission in Decision No. 01-12-025, on December 11, 2001. (Cal.P.U.C. Order Modifying Decision 01-03-067 and Denying Rehearing, as Modified (Dec. 11, 2001) Dec. No. 01-12-025.) The petitions for rehearing of the other parties, who are essentially members of a trade association of owners or owners of small electric generation facilities, were denied in Decision No. 02-02-028 on February 8, 2002. (Cal.P.U.C. Order Granting limited Rehearing of Decision 01-03-067 filed by QF Parties (Feb. 7, 2002) Dec. No. 02-02-028.) Petitions for writ of review were filed in this court by Edison, Los Angeles County (County) and the California Cogeneration Council (CCC). (Pub.Util.Code, § 1756.) Petitioner, Independent Energy Producers Association (IEPA) filed its petition for review in the Third District. The Supreme Court ordered that matter transferred to this court for consideration along with the other petitions concerning Decision No. 01-03-067, Decision No. 01-12-025 and Decision No. 02-02-028. (Pub.Util.Code, § 1756.)
The Central Hydroelectric Corporation (CHC) was not a party to the original proceedings, but it became a party when it filed a petition for rehearing of the Decision. (Pub.Util.Code, § 1731, subd. (b).) Thereafter, CHC filed a petition for review directly with the Supreme Court. That court ordered the CHC petition transferred to this court for disposition. We then ordered the CHC petition consolidated with the other pending petitions.[2]
FACTS
1. Federal History and Regulations
In 1978 Congress enacted the Public Utility Regulatory Policies Act of 1978 (PURPA). (Public L. No. 95-617 (Nov. 9, 1978) 92 Stat. 3117.) PURPA was passed in response to the energy crises of the *215 1970's, and was prompted in part by efforts to lessen this country's dependence on foreign energy. In order to prompt the development of more efficient means of providing energy, Congress provided certain benefits and exemptions for qualifying cogeneration facilities[3] and small power production facilities (QFs).[4] The concern of Congress in regards to QFs was stated by the Supreme Court in FERC v. Mississippi (1982) 456 U.S. 742, 750-751, 102 S.Ct. 2126, 72 L.Ed.2d 532, as follows: "Congress believed that increased use of these sources of energy would reduce the demand for traditional fossil fuels. But it also felt that two problems impeded the development of nontraditional generating facilities: (1) traditional electricity utilities were reluctant to purchase power from, and to sell power to, the nontraditional facilities, and (2) the regulation of these alternative energy sources by state and federal utility authorities imposed financial burdens upon the nontraditional facilities and thus discouraged their development." (Fn.omitted.)
In order to alleviate these concerns, Section 210 of PURPA[5] ordered the Federal Energy Regulatory Commission (FERC) to implement the congressional intent and specifically "to encourage cogeneration and small power production." The FERC subsequently adopted those rules, which were codified as 18 C.F.R. part 292 et seq. The regulations require electrical utilities to purchase energy or capacity made available by a QF (18 C.F.R. § 292.303(a)) at prices equivalent to the utilities'"avoided costs." (18 C.F.R. § 292.304(b).) "Avoided costs" are defined as "the incremental costs to an electrical utility of electrical energy or capacity or both which, but for the purchase from the qualifying facility or facilities, such utility would generate itself or purchase from another source." (18 C.F.R. § 292.101(b)(6).) In other words, "... avoided cost is not measured by what the utilities are paid when they sell energy, but instead what they must spend to produce or procure [that] energy in the absence of QFs." Cal.P.U.C. Opinion (Re San Diego Gas and Electric Company (1999) [Dec. No. 99-03-021] p. 11; 1999 Cal.P.U.C. Lexis 384.) The regulations further provide that the costs paid are to be fair and reasonable to the electric consumer of the electric utility and in the public interest and not be discriminatory against the QFs. (18 C.F.R. § 292.304(a).) The same regulation also provides that public utilities need not pay QFs more than the avoided costs. (Ibid.)
2. The Effect of Deregulation in California
The cost of natural gas was one factor considered in determining the avoided cost of the various utilities. Between 1980 and 1996, the Commission had used an administratively determined avoided cost price, but that methodology had been "fraught with contention." (See Dec. No. 96-12-028, Re Biennial Resource Plan Update (1996) 69 P.U.C.2d 546, 552, 1996 WL 764527; See also Dec. No. 91-10-039 Re Biennial Resource Plan Update (1991) 41 P.U.C.2d 484.)
In 1996 the California Legislature enacted Assembly Bill Number 1890, (1995-1996 Reg. Sess.) which restructured and deregulated the electrical industry. (Stats.1996, *216 ch. 854 (A.B.1890), § 10, eff. Sept. 24, 1996.) As part of the restructuring process an Independent Systems Operator (ISO) was created. (Pub.Util.Code, §§ 330(m); 345-352.5.) The ISO was under and subject to the jurisdiction of the FERC (Pub.Util.Code, § 346) and assumed responsibility for scheduling the transmission of power throughout its statewide "control area." (Pub.Util.Code, § 330(m).) The Legislature also created a Power Exchange (PX), which was to work in conjunction with the ISO. The purpose of the PX was to provide an efficient competitive auction for all suppliers. (Pub. Util.Code, § 355.)
In order to determine the SRAC of the public utilities, the Legislature ordered the computations to be based on the clearing price paid by the PX.[6] However, since the PX was not yet operating, the Legislature provided an interim formulistic approach that was to be used until such time as the Commission issued an order declaring the PX was properly functioning. (Pub. Util.Code, § 390 subds. (b)(c).)[7] The Legislative formula set a starting price that was to be adjusted monthly to reflect changes in the natural gas prices at the California border.
The Commission, in compliance with the mandate of the Legislature, issued Decision No. 96-12-028 on December 9, 1996. (Re Biennial Resource Plan Update (1996) 69 P.U.C.2d 546, 1996 WL 764527.) In that ruling, the Commission determined that it was "reasonable to use a simple average of California/Arizona (Topock)[8] indices ... for purposes of calculating monthly changes to SCE's [Edison] and SDG & E's [San Diego Gas & Electric] interim SRAC formula." (Id. at p. 552, italics added.)
It was assumed by most of the parties that the transition formula was to have a short duration. However, by 2000 the power market was in a chaotic state, energy costs were beginning to spiral upward, and the PX had still not been certified as operating properly within the meaning of section 390. In April 2000, the Commission filed a complaint[9] with the FERC which alleged, among other things, that El Paso Natural Gas Company and its affiliates were engaging in "unreasonable and anticompetitive practices" that could end up costing California taxpayers more than $100 million. Specifically, the Commission alleged that traders and transporters of natural gas were exercising their market power to inflate the price of natural gas delivered at the California border.
On July 28, 2000, Edison filed a petition to modify Decision No. 96-12-028. Edison sought a revision of the formula, contending that the SRAC being paid to the QF's was exceeding Edison's actual avoided cost in violation of PURPA. On August 28, 2000, the Office of Ratepayer Advocates (ORA)[10] filed a response generally in support of Edison's position. However, given the Commission's complaint with FERC *217 and other adverse developments that had occurred in the spot market, ORA raised the question whether the Topock Index was sufficiently robust to be used in the transition formula. ORA noted that the cost of transporting natural gas had decreased while the cost of natural gas had tripled. As a result, ORA noted that Edison's ratepayers were experiencing substantially higher natural gas prices "while reeling under a rigidly adopted value of the factor[11] within the SRAC formula." ORA further stated, "Indices that rely upon an abused market are not a reasonable measure of avoided cost."
On August 31, 2000, three days after ORA filed its response, Edison filed the first of two emergency petitions, pursuant to Commission Rule 81, seeking a Commission provisional SRAC "posting" using the lower of the gas price derived from the Topock Index for the month of August 2000, or the current Topock Index for the current posting month. Edison urged immediate action because the price differential[12] increase in gas prices was more than ten times higher than what had caused the Commission to file its complaint with FERC in April. The result to the ratepayer was that the QFs, in the month of August alone, would be paid more than $29 million to which they were not entitled.
The next day, September 1, 2000, the assigned Administrative Law Judge (ALJ) issued a ruling expanding the Edison petition to modify Decision No. 96-12-028 to include the issue of whether the Topock Index was reliable and valid enough to be used as a means of determining Edison's SRAC. On September 5, 2000, the assigned ALJ issued a draft decision setting a briefing schedule and ordering the parties to "comment and provide substantive analysis on the issue of irreparable harm to rate payers or market participants should the Commission choose to adopt a provisional posting." One month later, on October 5, 2000, four Commissioners voted to deny relief finding there was no evidence that ratepayers were being harmed. In dissent, Commissioner Wood stated that the mechanism for determining the SRAC was flawed and favored QFs.
On November 28, 2000, Edison, fearing that the Topock Index was going to be three times higher than it had been in August, filed yet another emergency petition. In that petition, Edison requested the Commission to replace the Topock Index with a new proxy consisting of ten percent of the Topock Index and 90 percent of Edison's core subscription weighted average cost of gas (WACOG). Edison argued that it appeared the payments to QFs were going to increase by about $115 million over the amount of the previous month. This increase would amount to a substantial windfall to some of the QFs, because many QFs used little or no natural gas. Edison also contended that the Topock border point was being subjected to price manipulations. Edison further pointed out that the Topock Index was not a reliable factor for measuring Edison's avoided costs because Edison bought very little natural gas at the Topock spot price. Rather, Edison had several long-term contracts with other suppliers that enabled it to purchase gas at rates more favorable than the Topock spot price. Once again Edison urged the Commission to modify *218 Decision No. 96-12-028 since the transition formula did not measure Edison's avoided costs, which is what is required under PURPA.
On December 15, 2000, the FERC issued a ruling in San Diego Gas & Electric Company, Complainant v. Sellers of Energy and Ancillary Services Into Markets Operated by the California Independent System Operator and the California Power Exchange et al. (12/15/2000) 93 FERC ¶ 61,294 at p. 61,982, 2000 WL 1840337, eliminating the public utilities' mandatory buy and sell requirements from the PX. The FERC also terminated the PX's wholesale rate schedules.
On January 20, 2001, Commissioner Wood issued a draft decision (Draft Decision) granting Edison's motion to modify Decision No. 96-12-028 by replacing the Topock Index with indices published each month for the California-Oregon borderpoint at Malin [13] plus an interstate transportation charge (the Malin Index).
Two months later, on March 15, 2001, the PX filed for protection under the bankruptcy laws. It has not been in operation since that date.[14] Less than a week later, on March 21, 2001, the Commission circulated a revised copy of the Draft Decision calling for legislative repeal of section 390. The reason given was that the "possibility of market power abuse on the El Paso pipeline coupled with reduced liquidity in the Topock market" had convinced the Commission that Topock no longer met the requirements of a robust market that was required in Decision No. 96-12-028.
Six days later, on March 27, 2001, the Commission modified Decision No. 96-12-028 by issuing Decision No. 01-03-067. The Decision is the subject of the writs before this court that we are presently reviewing. The Decision, which was a modified version of the Draft Decision, revised the "factor" in the transition formula and ordered that it be updated on a monthly basis. Decision No. 01-03-067 also modified Decision No. 96-12-028 by substituting the Malin Index for the Topock Index in Edison's transition formula on the ground that the Topock Index was no longer sufficiently robust to serve as a proxy for Edison's avoided fuel procurement cost. There was no mention of a Legislative repeal of section 390.[15]
THE CONTENTIONS OF THE PARTIES
CCC, County of Los Angeles and IEPA each contend that the Decision violates section 390 and PURPA. Additionally, the County alleges the Decision discriminates against QFs, violates due process and amounts to an impermissible taking without due compensation.
Edison contends the Commission is in violation of PURPA because it is forcing Edison to pay more than its avoided costs to the QFs from which it buys electricity.
STANDARD OF REVIEW
This is not a complaint or enforcement proceeding nor is it a ratemaking or licensing decision. Therefore, we review, on the basis of the entire record, whether (1) the order or decision was an abuse of discretion; *219 (2) the Commission proceeded in the manner required by law; (3) the Commission acted without or in excess of its jurisdiction; (4) the decision is not supported by the findings; (5) the order or decision was procured by fraud; and (6) whether the constitutional rights of the petitioners were violated. (Pub.Util.Code, § 1757.1.)
THE IEPA, CCC, AND COUNTY PETITIONS
1. The Decision Did Not Violate section 390
Public Utilities Code section 390(b) states: "(b) Until the requirements of subdivision (c) have been satisfied, short run avoided cost energy payments paid to nonutility power generators by an electrical corporation shall be based on a formula that reflects a starting energy price, adjusted monthly to reflect changes in a starting gas index price in relation to an average of current California natural gas border price indices. The starting energy price shall be based on 12-month averages of recent, pre-January 1, 1996, short-run avoided energy prices paid by each public utility electrical corporation to non-utility power generators. The starting gas index price shall be established as an average of index gas prices for the same annual periods."
The Legislature did not prescribe a specific formula. Rather, it prescribed a general formula to be transitional until such time as the PX was up and running properly. Although not mentioned in either the Decision or in the orders denying rehearing it is now becoming obvious that the PX will never properly function.[16] Thus, it was up to the Commission to arrive at a formula that met the requirements of section 390 and also complied with PURPA.
One of the requirements of the section 390 formulation was that the SRAC was to take into account "current natural gas border price indices." The Commission also noted that more than four years had passed since the original formulas had been in place and it was time to revisit the formula and the components of that formula. That is exactly what the Commission did. After noting the wildly fluctuating prices along the Arizona/California border the Commission "concluded that the Topock Index was no longer robust and could no longer serve as a proxy for utility avoided costs." (Dec. No. 02-02-028, p. 8.) The Commission then concluded that "adopting a Malin border price plus interstate transportation as a temporary replacement for Topock meets the requirements of section 390(b)." (Id., p. 20.) County argues that this was error because Edison does not procure its natural gas from Malin. However, the evidence before the Commission was that Edison buys very little natural gas on the spot market. Using the Topock Index as the basis for the section 390 formulation thus caused Edison's avoided costs to be overstated in violation of PURPA. Whether the Malin or Topock indices or any combination thereof should be used was a decision for the Commission and not for this court. (Eden Hospital Dist. v. Belshe (1998) 65 Cal.App.4th 908, 915, 76 Cal.Rptr.2d 857.)
CCC further argues that section 390 must somehow be contrary to PURPA because, in a revised draft of the Draft Decision, the Commission urged the repeal of section 390. However, CCC overlooks *220 the omission of this request in the final version of the Decision. Only filed decisions are the final opinions or decisions of the Commission. (Pub.Util.Code, § 310.) The argument will be disregarded.
CCC also argues that the Decision violates section 390 "by employing current natural gas transportation prices in the newly resurrected index methodology. This imports post-1996 indices in the starting energy price, contrary to the explicit language of section 390(b)." However, the Commission's ruling did not change the starting price. What was changed was the border index and Edison's energy factor. CCC further argues that section 390requires the components to the formula "shall be based upon on 12 month averages of recent, pre-January 1996 short-run avoid prices." What CCC ignores in its analysis is that section 390 also requires the starting price to be changed monthly to reflect changes in the index. The Commission recognized this in 1996 when it arrived at its original decision on section 390. (Cal.P.U.C.Dec. No. 96-12-028, Re Biennial Resource Plan Update (1994) 69 P.U.C.2d 546, 553-554, 1996 WL 764527.) As the Commission stated in the order granting limited Rehearing "... [T]he transition formula has been in place for over 4 years. It would be unreasonable to believe that this interim formula would still accurately reflect current utility avoided costs." (Dec. No. 96-12-028, p. 12.) To the extent that CCC is arguing that the Commission is forever wedded to the pre-1996 figures and cannot take current prices into account, CCC is in error.
County alleges that there was, and remains, a question as to whether the Malin Index was a proper proxy to replace the Topock Index. The evidence presented to the Commission, however, reveals that the prices at Malin were not spiraling out of control as were the Topock prices. Secondly, when Decision No. 96-12-028 was decided, both Malin and Topock were deemed to be sufficiently robust to meet the requirements of section 390(b). The evidence presented to the Commission was that Topock was no longer robust. There was no evidence indicating that Malin was no longer robust. The fact that Edison did not buy gas from the Malin exchange does not mean Malin could not be used as an index. Rather, as the Commission pointed out in its denial of rehearing, "Section 390(b) does not require that the gas border prices represent where the utility would procure its gas, but rather whether the gas border price is a reasonable proxy for utility's avoided cost." (Dec. No. 02-02-028.)
Finally, CCC and County both argue that they are forced to pay the Topock prices and that it is unfair to allow Edison not to pay the same price they are forced to pay. However, QF's have never been absolutely entitled to a payment to cover their costs. What is being measured is the utilities' SRAC, not that of the QF. As Congress stated in title 16 United States Code Annotated section 824a-3(b), a utility shall not be required to pay a QF more than the utilities' avoided cost. (See also 18 C.F.R. § 292.304(a) (2002).)
2. The Parties' Due Process Rights Were Not Violated Because of a Lack of Hearing
Public Utilities Code section 1708.5(f), which was added in 1999 (Stats. 1999, c. 568 (A.B.301), § 2) provides: "Notwithstanding Section 1708, the commission may conduct any proceeding to adopt, amend, or repeal a regulation using notice and comment rulemaking procedures, without an evidentiary hearing, except with respect to a regulation being amended or repealed that was adopted *221 after an evidentiary hearing, in which case the parties to the original proceeding shall retain any right to an evidentiary hearing accorded by Section 1708." Here, the evidence shows that Decision No. 96-12-028 was a regulation that had been adopted without any evidentiary hearings. Thus, by its terms section 1708.5, subdivision (f), permitted the procedure employed by the Commission in this case.
However, IEPA argues that section 1708.5 is a special section that enables the Commission to "permit interested parties to petition the commission to adopt, amend or repeal a regulation." IEPA further contends that since neither Decision No. 96-12-028 nor the Decision in this case arose out of a petition pursuant to section 1708.5, subdivision (f), simply does not apply. In response, the Commission notes that there are two different types of proceedings covered by Section 1708.5. In subdivisions (a) through (e), the Legislature set up a procedure to allow interested parties to petition the Commission for adopting, repealing or amending regulations. In subdivision (e), the Legislature directed the Commission to amend its Rules of Practice and Procedure to establish procedures for handling petitions under section 1708.5. This the Commission has done in the so-called Wright Petitions procedure.
The Commission further argues that section 1708.5 subdivision (f), was intended to cover not only petitions pursuant to subdivisions (a) through (e), but also any proceeding. This intent is shown by the reference to "any proceeding." We agree with the Commission and have concluded that subdivision (f), applies to proceedings other those initiated by the petition procedure of subdivisions (a) through (e). Had the Legislature intended subdivision (f) to be applicable only to proceedings initiated by petition, then the Legislature would have used language such as "any such proceeding," or "any proceeding initiated by petition" or other limiting language. We must assume that Legislature knew what it was doing and meant the words to be applied as they were written. (City of Ontario v. Superior Court (1993) 12 Cal. App.4th 894, 902, 16 Cal.Rptr.2d 32.) Since the Legislature did not impose any limitation, it would be improper for this court to add words to limit or change the plain meaning of the statute. (People v. Baker (1968) 69 Cal.2d 44, 50, 69 Cal.Rptr. 595, 442 P.2d 675; Cisneros v. Vueve (1995) 37 Cal.App.4th 906, 910, 44 Cal. Rptr.2d 682.) The language of the statute is plain, clear and unambiguous. Therefore, there is no need to resort to statutory construction unless it clearly appears that the language used is contrary to what the Legislature intended. (California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 349, 45 Cal. Rptr.2d 279, 902 P.2d 297; Cisneros v. Vueve, supra, 37 Cal.App.4th 906, 910, 44 Cal.Rptr.2d 682.) Here, there is no evidence that the Legislature meant anything other than what it wrote. Accordingly, there is no need to indulge in statutory construction or resort to other indicia of legislative intent to interpret the statute. (Hale v. Southern Cal. IPA Medical Group, Inc. (2001) 86 Cal.App.4th 919, 924, 103 Cal.Rptr.2d 773.)
IEPA next contends that California Trucking Assn. v. Public Utilities Com. (1977) 19 Cal.3d 240, 244, 137 Cal. Rptr. 190, 561 P.2d 280, mandates that the opportunity to be heard requires at a minimum the right to present evidence. In California Trucking, the court was concerned with the statutory right to be heard as set forth in sections 1701 through 1708. In that instance the Court, based on statutory language, held that when the Commission alters or rescinds a prior order the *222 right to be heard includes a right to present evidence. Here, in section 1708.5, the Legislature has said there is no right to an evidentiary hearing provided that the original regulation was not enacted following an evidentiary hearing. Since Decision No. 96-12-028 was not enacted following an evidentiary hearing, IEPA had no right to an evidentiary hearing prior to the amendment of Decision No. 96-12-028.[17]
3. There Was No Taking Within the Meaning of the Federal and State Constitutions
The County contends the SRAC Decision constitutes a taking because the substitution of the Malin Index for the Topock Index resulted in payments less than the utility's avoided costs in violation of PURPA. Specifically, the County alleges that it and other QFs entered into long-term gas contracts based upon the Topock Index. These QF's have been harmed because they were not given the chance to allow their contracts to be renegotiated or expire. As the Commission stated in its order granting limited rehearing, "Applicants' takings claims are premised on their assertions that the Modified Formula results in SRAC prices below their operating costs. However, SRAC payments were never intended to reflect QF operating costs. Rather PURPA `caps' SRAC payments at the utility's avoided costs. (18 C.F.R. § 292.304(a)(2) (2002).)" (Dec. No. 02-02-028.) County has failed to demonstrate that the SRAC was below Edison's avoided costs and therefore the argument fails.
THE EDISON PETITION
1. Edison Waived Its Right to Complain about The Use of The Malin Index
Edison initially urged the Commission to modify the formula by substituting the Malin Index for the Topock Index. Later, in its emergency motion of November 28, 2000, Edison requested that the Commission adopt a 90-10 formula in place of the Topock Index. Ten percent was to be the Topock indices and 90 percent was to be based on Edison's monthly-published cost of gas. This request was denied in favor of the Malin Index originally requested by ORA and further suggested by Edison. Edison now contends use of Malin was error since the Commission did not make specific findings as required by section 1705. Edison, however, failed to raise this issue in its petition for rehearing. At best, Edison made a request that the Commission make a better record of its reasons. Edison did not protect the use of Malin as error. Rather, Edison apparently seemed to be attempting to have the Commission state that section 390 was either *223 inconsistent with federal law or was unlawful. Having failed to specifically address the alleged error of using the Malin Index to the Commission, Edison may not raise it before this court. (Pub.Util.Code, § 1732.)
2. In Failing to Consider the Retroactive Application of the Modified Formula, the Commission Erred
On November 28, 2000, Edison filed its second motion for relief. This motion, entitled an "Emergency Motion," sought immediate relief from compelled overpayments it was making to QFs because the section 390(b) transition formula payments were "hardwired" to the Topock border price indices. Because of the increase in gas prices at Topock, payments to QFs were likely to increase by $115 million from November for a total of $180 million in December. Edison asked for immediate relief and requested the Commission to act on the request at its December 7, 2000, meeting. Edison further requested a new transition formula that would have had the Topock indices counting for only ten percent of the figure with the other 90 percent being Edison's monthly-published schedule G-CS cost of gas. Finally, Edison requested the Commission to either allow Edison to defer its avoided cost posting until December 7, 2000, or inform the QFs and other interested parties that any modifications to the transition formula would be retroactive to all QF deliveries commencing December 1, 2000.
On December 1, 2000, the two assigned commissioners and two administrative law judges issued an order suspending the avoided cost posting requirements for Pacific Gas and Electric Company (PG & E), San Diego Gas and Electric Company (SDG & E) and Edison until December 7, 2000. The ruling also designated a briefing schedule. On December 7, 2000, a draft decision was issued that would have adopted the relief requested by Edison for Edison, PG & E and SDG & E. On January 10, 2001, Commissioner Wood issued a draft decision granting relief to Edison only, and changed the applicable index from Topock to Malin. Thereafter, more comments were made by interested parties and on March 27, 2001, the Commission issued its Decision (Dec. No. 01-03-067) modifying Decision No. 96-12-028. The Decision replaced the Topock Index with the Malin Indices. Edison and the other parties petitioned for a rehearing. Edison requested that the modification of the transition formula be applied retroactively to December 2000, when the motion had originally been filed. Edison's request was denied on December 17, 2001, with the Commission stating: "Although we have authority to consider retroactive adjustment of SRAC prices, we decline to do so in this instance. A decision to consider retroactive adjustment of SRAC prices could increase the uncertainty in the current QF market, since many QFs appear to have continued operations with the expectancy that they would eventually be "made whole" by the utilities. Moreover, investigation into the robustness of the various indices could require significant commitment of Energy Commission staff due to the potential complexity involved and further strain the Commission's current resources. Furthermore, we have previously declined to allow retroactive downward adjustments of posted prices. (Citations.) While we believe this situation is distinguishable, we believe that the need to provide pricing certainty for QFs, which were articulated in those decisions, also applies in this case. Therefore, under these circumstances, we do not believe retroactive adjustment would be in the public interest." (Dec. No. 01-12-025, p. 4.)
In declining to even consider the request, the Commission erred. In enacting *224 PURPA, the Congress declared that the transmission of electrical power was of national interest and that FERC was to have jurisdiction over the sale of electrical energy in interstate commerce. (16 USCA § 824.) In order to promote the use of QF's and prevent states from imposing onerous obligations upon QF's, FERC was given the exclusive right to license and regulate QF's. (See 16 USCA §§ 824a; 824a-3.) One of the key provisions of PURPA was the requirement that public utilities buy power from QF's. (FERC v. Mississippi supra, 456 U.S. 742, 102 S.Ct. 2126, 72 L.Ed.2d 532.) However, while the public utilities were required to buy QF power, they were not required to pay more than what it would have cost the utility to generate the electricity, or purchase it from another source. (16 U.S.C.A. § 824a-3(d).)
Congress's rationale for adopting this procedure was explained by the FERC in 1995. "men Congress enacted PURPA in 1978, there was very little non-utility generation. In 1978 virtually all new generating capacity was provided by traditional electric utilities. In fact, one of the principal reasons Congress adopted section 210 of PURPA was because electric utilities had refused to purchase power from non-utility producers. In contrast to 1978, non-traditional producers, including QFs, now provide well in excess of half of all new generating resources, and the Commission has determined that there is no longer any dominance in the provision of new generating capacity.
"One of the reasons for the dramatic growth of the QF industry was the Commission's policy decision in 1980 to set the maximum rate permissible under PURPA section 210(b), i.e., a full avoided cost rate. While such rates do not result in direct benefits to ratepayers, they nevertheless are fully consistent with PURPA section 210(b)'s requirement that the rates be just and reasonable to ratepayers and in the public interest. Nevertheless, PURPA does not permit either the Commission, or the States in their implementation of PURPA, to require a purchase rate that exceeds avoided cost." (Re Southern California Edison Company, Re San Diego Gas and Electric Company. 1995) 70 F.E.R.C. § 61,215,1995 WL 169000.)
By 2001 the situation had so drastically changed that the FERC commented, "The Commission has recognized, that as time has passed since the passage of PURPA, the need to ensure that the states are using procedures which will assure that QF rates do not exceed avoided costs has become more critical." (City of Ketchikan, Alaska, Copper Valley Electric Association, Inc., City of Petersburg, Alaska, City of Wrangell, Alaska (2001) 94 F.E.R.C. § 61,293, 62603, fn. 16.) Here, by failing to make a decision as to whether the SRAC prices should be applied retroactively, the Commission ran afoul of the Congressional mandate that public utilities not pay QF's more than the avoided cost.
It may be that the evidence will show the SRAC prices were correct for the period of December 2000 through March of 2001. If the Commission makes this determination and it is based upon substantial evidence, that will end the matter. However, if the evidence shows that the formula in Decision No. 01-03-067 should have been applied retroactively to arrive at a more accurate SRAC, then it is the Commission's duty to apply it retroactively. The Commission does not have the power to thwart Congressional intent by having a policy inconsistent with that set forth in PURPA. (Independent Energy Producers Ass'n, Inc. v. CPUC (9th Cir. 1994) 36 F.3d 848, 854-55.)
*225 DISPOSITION
Decisions Nos. 01-03-067, 01-12-028 and 02-02-028 are affirmed except to the extent that the Commission declines to consider whether the SRAC should be applied retroactively. That portion of those Decisions is annulled.
The matter is remanded back to the Commission for proceedings consistent with this opinion.
We concur: LILLIE, P.J., and WOODS, J.
NOTES
[*] Baxter, J, and Chin, J, did not participate therein.
[*] Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to Art. VI, section 6 of the California Constitution.
[1] The Commission numbers its decisions and rulings by year and month followed by the ruling or decision number, and refers to them as D.00-00-00. In this opinion, we use the same format, as a shortened citation, except that we replace D. with Decision.
[2] The Supreme Court transferred this matter to this court on July 31, 2002. However, this court did not receive the record until August 13, 2002, four days after the August 9, 2002 oral arguments on the other four petitions. Because the arguments in the CHC petition appeared to be the same as in the other petitions, this court sent out a notice notifying all parties that it was proposing to accept the briefing and argument in the previously submitted matters as the briefing and argument in the CHC petition and issue a consolidated opinion disposing of all five petitions. All parties were given five days to object to the proposed consolidation. When no objections were received, this court ordered the CHC petition consolidated with the other petitions.
[3] A "Cogeneration Facility" is a facility that produces energy and steam or forms of useful energy (such as heat) which can be used for industrial, commercial, heating or cooling purposes. (See 16 U.S.C.A. § 796(18)(A).)
[4] A "Small Power Production Facility" is an eligible solar, wind, waste, or geothermal facility which produces electricity. (See 16 U.S.C.A. § 796(17).)
[5] Title 16 United States Code Annotated section 824a-3.
[6] On February 16, 1996, Edison, on behalf of itself, the Independent Energy Producers Association and the California Cogeneration Council had filed a joint proposal for reform of the SRAC based upon a market based energy price. (See Petition by Edison to Modify Transition Formula (July 28, 2000).)
[7] Further references to a section with a number shall be references to the Public Utilities Code.
[8] Topock is on the California/Arizona border and is the entry point for gas from the Southwest into California.
[9] See Public Utilities Commission of the State of California v. El Paso Natural Gas Company et al. (United States Federal Regulatory Commission Docket No. RP00-241-000.)
[10] ORA is a division of the Commission and is charged with advocating consumer interests.
[11] This is a discrete part of the transition formula that is used to determine avoided costs of energy.
[12] The "price differential" is the difference between what the price of gas is at the well head basin and the price at the California border. In April it had been a 30 cents differential. By the time of the filing of the petition, it had risen to almost $3.
[13] Malin is at the California/Oregon border and is the entry point for Canadian gas which was used by PG & E.
[14] For a discussion of the problem see In re California Power Exchange Corp. (9th Cir. 2001) 245 F.3d 1110.
[15] While not a basis for this decision, it is apparent that the Legislature needs to reexamine section 390. In its present form, section 390 acts as a millstone around the Commission's neck.
[16] See footnote 12, supra, and San Diego Gas & Electric Company, Complainant v. Sellers of Energy and Ancillary Services Into Markets Operated by the California Independent System Operator and the California Power Exchange et al. ((12/15/2000) 93 FERC ¶ 61,294 at p. 61,982, 2000 WL 1840337.)
[17] This court is aware that at some point a failure to hold hearings could be a violation of due process. However, that point has not been reached in this case. "Once it is determined that due process applies, the question remains what process is due. It has been said so often by this Court and others as not to require citation of authority that due process is flexible and calls for such procedural protections as the particular situation demands. `[C]onsideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise nature of the government function involved as well as of the private interest that has been affected by governmental action.' (Cafeteria & Restaurant Workers Union v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 1748, 6 L.Ed.2d 1230 (1961).) To say that the concept of due process is flexible does not mean that judges are at large to apply it to any and all relationships. Its flexibility is in its scope once it has been determined that some process is due; it is a recognition that not all situations calling for procedural safeguards call for the same kind of procedure." (Morrissey v. Brewer (1972) 408 U.S. 471, 481, 92 S.Ct 2593, 33 L.Ed.2d 484.) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2260597/ | 238 P.3d 626 (2010)
Joseph ARPAIO, in his official capacity as Maricopa County Sheriff; and Richard M. Romley, in his official capacity as Maricopa County Attorney, Plaintiffs/Appellants,
v.
MARICOPA COUNTY BOARD OF SUPERVISORS and its members; Fulton Brock; Don Stapley; Andrew Kunasek; Max Wilson; and Mary Rose Wilcox, in their official capacities as Maricopa County Supervisors; and the State of Arizona, Defendants/Appellees.
No. 1 CA-CV 09-0456.
Court of Appeals of Arizona, Division 1, Department A.
Redesignated as Opinion and Publication Ordered August 19, 2010.
*628 Ogletree, Deakins, Nash, Smoak & Stewart, P.C. by L. Eric Dowell, Leah S. Freed, Kerry S. Martin, Phoenix, Attorneys for Plaintiffs/Appellants.
Polsinelli Shughart PC by Thomas K. Irvine, Phoenix, Attorneys for Defendant/Appellee Maricopa County.
Terry Goddard, Attorney General by William A. Richards, Assistant Attorney General, Mark P. Bookholder, Assistant Attorney General, Phoenix, Attorneys for Defendant/Appellee State of Arizona.
C. Steven McMurry, Justice of the Peace, Phoenix, Gerald A. Williams, Justice of the Peace, Surprise, Amicus Curiae for Maricopa County Justices of the Peace.
OPINION
WINTHROP, Judge.
¶ 1 The Maricopa County Sheriff and Maricopa County Attorney[1] ("Appellants") challenge a superior court ruling denying Appellants' motion for summary judgment, granting Appellees' cross-motion for summary judgment, and dismissing Appellants' claims. For the following reasons, we affirm the superior court's ruling.
FACTS AND PROCEDURAL HISTORY
¶ 2 In June 2008, the Arizona Legislature passed, and Governor Janet Napolitano signed, House Bill 2275 (the "bill"), which included the Health and Welfare Reconciliation Act. 2008 Ariz. Sess. Laws, ch. 288 (2d Reg.Sess.). Section 10 of the bill required each county to transfer a sum of money, based on population size, to the Arizona Health Care Cost Containment System Administration ("AHCCCS"). Senate Bill 1004 later amended the bill to provide for deposit of the transferred monies into the State's general fund.[2] 2009 Ariz. Sess. Laws, ch. 288, § 10 (1st Spec.Sess.). Maricopa County's share of the reconciliation was $24,168,400, and to comply with the bill, the Maricopa County Board of Supervisors ("Board") voted to designate and transfer sums from twenty-six special revenue funds.[3]Id.
*629 ¶ 3 On February 27, 2009, Appellants filed suit against the Board, its individual members, and the State of Arizona,[4] seeking injunctive relief and a declaratory judgment, alleging the Board unlawfully seized more than $24 million from special revenue funds established for the use and administration of the County Sheriff, the County Attorney, and other Maricopa County elected officials, agencies, and departments. Appellants filed a motion for summary judgment and the State and County filed cross-motions for summary judgment. In a detailed minute entry ruling dated June 10, 2009, the superior court denied Appellants' motion and granted those filed by the State and County. On June 22, 2009, the County transferred $24,168,400 to the State.
¶ 4 Appellants timely appealed, and we have jurisdiction pursuant to A.R.S. § 12-2101 (2003).[5]
ANALYSIS
¶ 5 The Sheriff argues that the superior court erred when it entered judgment in favor of Appellees. Further, he questions the constitutionality of the bill and the superior court's finding that the legislature implicitly amended the enabling statutes of the designated funds when it passed the bill.
¶ 6 We apply a de novo standard of review to grants of summary judgment and when interpreting statutes and constitutional claims. State v. Casey, 205 Ariz. 359, 362, ¶ 8, 71 P.3d 351, 354 (2003) (constitutionality of statute); Bentley v. Building Our Future, 217 Ariz. 265, 270, ¶ 11, 172 P.3d 860, 865 (App.2007) (grant of summary judgment and statutory interpretation).
1. Mootness
¶ 7 The County argues that the issues the Sheriff now presents are moot because it completed the $24,168,400 transfer to the State in June of 2009. "A case becomes moot when an event occurs which would cause the outcome of the appeal to have no practical effect on the parties." Sedona Private Prop. Owners Ass'n v. City of Sedona, 192 Ariz. 126, 127, ¶ 5, 961 P.2d 1074, 1075 (App.1998). Recognizing and declining to rule on moot issues is a "discretionary policy of judicial restraint." Fisher v. Maricopa County Stadium Dist., 185 Ariz. 116, 119, 912 P.2d 1345, 1348 (App.1995).
¶ 8 The County's argument is premised on the fact that any declaratory relief this court might grant the Sheriff would be without practical effect. The funds at issue are no longer within the County's control; they are irretrievable. The Sheriff had notice that such transfer was going to occur, yet did not seek to stay the effect of the superior court ruling, either in that court or in this court. Additionally, despite such notice, the Sheriff did not seek immediate appellate review by way of special action before the funds were transferred.
¶ 9 The Sheriff argues, in part, that the case is not moot, and that the appeal raises issues of "public importance" such that we should ignore the mootness doctrine; however, the relative importance of these issues is arguably a matter of conjecture. Through its budget reconciliation, the legislature mandated a one-time transfer of funds to satisfy a designated year's budgetary shortfall. That fiscal year, 2009, has long passed and in light of the economic realities, we have every *630 reason to believe the State has already spent these funds.
¶ 10 Additionally, following oral argument in this matter, we directed counsel to file supplemental briefs to address whether the operation of Arizona's notice of claim statute, A.R.S. § 12-821.01 (2003), and the fact that no notices of claim had been filed against either governmental entity, also would render the Sheriff's claims moot.
¶ 11 As it relates to any claim against the State, the Sheriff's amended complaint merely sought declaratory relief. We agree with the Sheriff that one who seeks declaratory relief need not comply with A.R.S. § 12-821.01. See Home Builder's Ass'n of Cent. Ariz. v. Kard, 219 Ariz. 374, 381, ¶ 31, 199 P.3d 629, 636 (App.2008). However, even assuming a favorable declaration by this court, to the extent the Sheriff then would seek recovery of some or all of the $24 million from the State, such a claim would indeed constitute the type of claim requiring compliance with the notice of claim statute. Of necessity, the latest date such a claim against the State would have accrued would be the date the County transferred the funds, or June 22, 2009. Accordingly, the deadline for submitting a notice of claima necessary predicate to maintaining a damages claim against the Stateoccurred in December of 2009.
¶ 12 The claims against the County Board of Supervisors and its individual members require a slightly different analysis. The amended complaint, purportedly seeking only declaratory and injunctive relief, does in its formal prayer for relief ask the court to order the Board to "reinstate" the unencumbered status of the subject funds. In the context of the current status of the litigation, however, it is unclear exactly how such relief could be obtained, even assuming a favorable ruling on appeal. Presumably, the Sheriff would contend via further amendment of the complaint or by separate action that these specialty funds would need to be "replenished," with the Board directing the reallocation of other funding within the County's budget. Under these circumstances, it seems logical to treat the Sheriff's contention as the equivalent of a damages claim, seeking recovery of funds he argues were inappropriately taken. Accordingly, such a claim is also subject to the notice of claim statute, and the time for filing that claim has long since passed.
¶ 13 The Sheriff argues, however, that even assuming the notice of claim statute applies, Appellees have waived the protection of the statute by failing to raise the issue in a motion to dismiss the appeal. Consideration of waiver starts with examining Appellees' conduct after the notice of claim deadline has passed. See Jones v. Cochise County, 218 Ariz. 372, 379, ¶ 23, 187 P.3d 97, 104 (App.2008) ("Waiver by conduct must be established by evidence of acts inconsistent with an intent to assert the right" (citation omitted)). Here, such a deadline passed in late December of 2009. The only action taken by Appellees after that date was to appear for an oral argument requested by the Sheriff's counsel and ordered by this court. Under these circumstances, we are reluctant to find that Appellees have waived their right to assert the affirmative bar that § 12-821.01 creates.
¶ 14 At the same time, however, we recognize that application of the mootness doctrine is a discretionary decision. And, while injunctive relief is no longer an issue, declaratory relief can still issue independently of a request or grant of other special relief. Sandblom v. Corbin, 125 Ariz. 178, 182, 608 P.2d 317, 321 (App.1980) (citations omitted). While the Sheriff's contentions in this appeal may indeed be moot, we also recognize that a decision on the substantive issues could affect similar future legislative acts; accordingly, we exercise our discretion to address the merits of the Sheriff's appeal.
2. Board's Authority to Seize/Transfer Funds
¶ 15 The Sheriff argues the superior court erred in finding the Board had the legal authority to seize and transfer the designated funds to the State. We disagree.
*631 a. The Designated Funds Were Public Funds
¶ 16 First, despite the Sheriff's argument to the contrary, the court correctly determined the designated statutory funds ("statutory funds") were public funds and not funds held in trust by the County. "Public funds" are funds belonging to the State, subject to the legislature's power to amend their appropriation. Navajo Tribe v. Arizona Dep't of Admin., 111 Ariz. 279, 281, 528 P.2d 623, 625 (1974). In an affidavit, the County's Finance Director, Shelby Scharbach, said the County treated the statutory funds as "Special Revenue Funds" ("SRFs"), defined as funds "restricted or committed to expenditure for specified purposes other than debt service or capital projects."
¶ 17 Navajo Tribe, the case the Sheriff cites in support of his trust argument, involved federal funds placed into the State's general fund for the State to administer for a particular purpose, not funds belonging to the State and its political subdivisionthe County. Navajo Tribe, 111 Ariz. at 280, 528 P.2d at 624. Although the statutory funds in the present case were SRFs whose revenue was from a specific source and whose expenditures were restricted by law, the funds were not held on behalf of a third party and were therefore not trust funds. See Rios v. Symington, 172 Ariz. 3, 6-7, 833 P.2d 20, 23-24 (1992). As public monies, the statutory funds were subject to the legislature's power to amend their appropriation, as exercised here through the bill.
b. No Requirement to Formally Amend Enabling Statutes
¶ 18 The Sheriff next argues that because the enabling statutes of the funds do not specifically allow for transfers such as that required by Section 10, the Board lacked the authority to encumber and transfer the statutory funds. Again, we reject this argument. Because the legislature established the statutory funds, it can redirect the use of those funds without specifically amending the enabling statutes, provided the change is constitutional. See Rios, 172 Ariz. at 11, 833 P.2d at 28 ("Logically, the power to appropriate includes the power to amend an appropriation, and we agree that such power is also exclusively a legislative function.").
¶ 19 In the bill, the legislature authorized counties to "meet any statutory funding requirements of [Section 10] from any source of county revenue designated by the county." See 2008 Ariz. Sess. Laws, ch. 288 (2d Reg. Sess.) (emphasis added). The superior court held, and we agree, that "[i]n passing the law, the legislature altered the use and purpose of these county statutory funds thereby allowing the funds to be used by the County to meet its obligations to the State." Although the legislature originally reserved the statutory funds for the benefit of specific governmental entities, the funds' enabling statutes did not create "an irrevocable dedication of the monies in the funds such that the Board could not designate them as a source to comply with the Bill."[6]
¶ 20 The superior court correctly concluded, "[T]he restrictions in these [enabling] statutes are not restrictions on the uses the State can make of the monies.... The restrictions are only on the uses the County can make of the money when the money is available for use." Accordingly, the legislature did not need to amend the enabling statutes of the statutory funds to amend their appropriation.
¶ 21 Because the Board was acting on a lawful legislative mandate which temporarily revoked limitations on the funds' use, the superior court properly refused to grant injunctive relief. See A.R.S. § 12-1802 (2003) *632 (precluding injunctive relief to prevent "the exercise of a public or private office in a lawful manner" by an office holder).
3. Constitutional Claims
¶ 22 The Sheriff also challenges the constitutionality of the bill on the grounds that Article 9, Section 22 of the Arizona Constitution requires any act that imposes a new tax, fee, or assessment providing for a net increase in state revenue be passed by a two-thirds super-majority of both houses of the legislature.
¶ 23 We presume statutes are constitutional and must construe them, if possible, to give them a constitutional meaning. Jackson v. Tangreen, 199 Ariz. 306, 309, ¶ 5, 18 P.3d 100, 103 (App.2000) (citation omitted). The party alleging the constitutional violation bears the burden of proof, and "[w]e will declare legislation unconstitutional only if we are clearly convinced that it conflicts with the Arizona or United States Constitution." Id. (citations omitted). The Sheriff therefore was required to show that Article 9, Section 22 prohibited the legislature from passing the bill.[7] He has failed to do so.
¶ 24 Again, we agree with the superior court's assessment: "The intent of Article 9, section 22 was to prevent the legislature from enacting without a super-majority vote any statute that increases the overall burden on the tax and fee paying public." Here, the bill does not increase the burden on the tax and fee paying public; rather, it simply requires a transfer of funds already within the government's possession. As discussed supra, the statutory funds are public fundsfunds belonging to the State. The State, in turn, apportions those funds, in this case to its political subdivision, the County. The funds, however, never lose their characterization as "public" and are thus subject to legislative appropriation or amendment.
¶ 25 This bill does not create new revenue as contemplated by Article 9, Section 22 of the Arizona Constitution, and therefore did not require a super-majority vote of the legislature. The superior court did not err in determining the bill to be constitutional.
CONCLUSION
¶ 26 For the foregoing reasons, we affirm the superior court's judgment.
CONCURRING: DANIEL A. BARKER, Presiding Judge, and DIANE M. JOHNSEN, Judge.
NOTES
[1] Former Maricopa County Attorney Andrew P. Thomas joined Maricopa County Sheriff Joseph Arpaio in initiating this action. Following Thomas's April 6, 2010 resignation, the Maricopa County Board of Supervisors appointed Richard M. Romley as Interim County Attorney. For the purpose of this action, Romley assumes Thomas's role.
[2] Section 10, as amended, reads as follows:
A. Notwithstanding any other law, in fiscal year 2008-2009, counties with a population of two million or more persons shall transfer $24,168,400 and counties with a population of more than eight hundred thousand persons but less than two million persons shall transfer $3,794,400 to the Arizona health care cost containment system administration for deposit in the state general fund.
B. Notwithstanding any other law, a county may meet any statutory funding requirements of this section from any source of county revenue designated by the county, including funds of any county wide special taxing district in which the board of supervisors serves as the board of directors.
C. Contributions made pursuant to this section are excluded from the county expenditure limitations.
[3] Appellants challenge the transfer of monies from six funds: (1) the Criminal Justice Enhancement Fund, Ariz.Rev.Stat. ("A.R.S.") §§ 41-2401 (Supp.2009), 12-116.01 (Supp. 2009); (2) the Jail Enhancement Fund, A.R.S. § 41-2401; (3) the Fill the Gap Fund, A.R.S. § 41-2421 (2004); (4) the Anti-Racketeering Revolving Fund, A.R.S. § 13-2314.01 (2010), § 13-2314.03(D) (2010); (5) the Inmate Services Fund, A.R.S. § 31-121 (Supp.2009); and (6) the Inmate Health Services Fund, A.R.S. §§ 31-161 (Supp.2009), -162 (2002).
[4] Appellants named the State in their amended complaint, pursuant to A.R.S. § 12-1841 (Supp. 2009). Section 12-1841(A) states, "When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration[.]" Other than seeking a declaration that the legislative act was unconstitutional, Appellants sought no affirmative relief against the State.
[5] Following oral argument in this matter, Mr. Romley moved to dismiss the appeal as it relates to the County Attorney's office. With no objection having been received and good cause appearing, we hereby grant that motion, and dismiss the County Attorney as a party in this matter. Accordingly, we need not address any issue raised concerning the County Attorney's role in this action.
[6] The Sheriff directs us to Carr v. Frohmiller, 47 Ariz. 430, 56 P.2d 644 (1936), in support of his argument that, in passing the bill, the legislature unlawfully used the budget process to make substantive changes to existing law. We disagree. See Ariz. Const. art. 4, pt. 2, § 20. In Carr, the legislature, through a general appropriations bill, limited the expenditure of funds that had previously been "levied and collected" for a specific purpose. Carr, 47 Ariz. at 441-42, 56 P.2d at 649. The Carr court found "real, serious fundamental objection to the Legislature's levying and collecting taxes for a specific object and purpose and then prohibiting its expenditure for that purpose and letting it revert to the general fund." Id. at 442, 56 P.2d at 649. Unlike in Carr, the statutory funds at issue in this case were public funds committed to, but not collected for, a specific purpose.
[7] Specifically, Article 9, Section 22 states:
(A) An act that provides for a net increase in state revenues, as described in Subsection B is effective on the affirmative vote of two-thirds of the members of each house of the legislature.
....
(B) The requirements of this section apply to any act that provides for a net increase in state revenues in the form of:
1. The imposition of any new tax.
2. An increase in a tax rate or rates.
....
5. The imposition of any new state fee or assessment. | 01-03-2023 | 10-30-2013 |
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