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17 Cal.Rptr.3d 514 (2004)
121 Cal.App.4th 878
ESTATE OF Edward U. REGLI, deceased.
Michael Muessig, Plaintiff and Respondent,
v.
Julia R. Muessig, Objector and Appellant.
Nos. A104772 & 105254.
Court of Appeal, First District, Division Two.
August 17, 2004.
Alan Goldberg, Law Offices of Alan Goldberg, Beverly Hills, Attorney for Objector and Appellant.
*515 Victor T. Schaub, Law Offices of Victor T. Schaub, Arcata, Attorney for Plaintiff and Respondent.
HAERLE, J.
I. INTRODUCTION
Appellant, Julia Muessig, and respondent, Michael Muessig, are the Estate of Regli's only remaining potential beneficiaries. They have filed a motion seeking a "stipulated partial reversal" of several probate court orders. Because this request does not meet either the statutory guidelines set out in Code of Civil Procedure, section 128, subdivision (a)(8),[1] or rule 8 of this court's local rules, the motion is denied.
II. FACTUAL AND PROCEDURAL BACKGROUND
On October 29, 2003, the probate court issued an order settling the final account of David Hitchcock, the estate's administrator, and ordered the estate's final distribution. At the same time, the court also rejected objections filed by appellant and respondent, both of whom contended that there were discrepancies in various accountings filed by Hitchcock. In two separate orders, the court ruled that these objections were time-barred, because appellant and respondent had both received notice of the matters to which they were now objecting. These orders are the subject of the appeals in A104772 and A105254.
III. DISCUSSION
David Hitchcock, whose activities both appellant and respondent unsuccessfully challenged below, was removed as the estate's administrator on March 18, 2004. Respondent became the estate's administrator. Respondent and appellant, as we have earlier noted, are the estate's remaining two beneficiaries. Respondent and appellant now seek this court's approval of a stipulated reversal of those portions of the trial court's orders finding that their earlier objections to Hitchcock's accountings were untimely and approving the final reports of the administrator and ordering the administration of the estate concluded. We decline to do so.
Section 128, subdivision (a)(8), provides that an appellate court may accept and confirm the stipulated reversal or vacation of a judgment only if it finds that "(A) There is no reasonable probability that the interests of nonparties or the public will be adversely affected by the reversal. [¶] (B) The reasons of the parties for requesting reversal outweigh the erosion of public trust that may result from the nullification of a judgment and the risk that the availability of stipulated reversal will reduce the incentive for pretrial settlement." Additionally, this court's local rules provide that the parties seeking the stipulated reversal must file with their motion a joint declaration that "(1) describes the parties and the factual and legal issues presented at trial; (2) indicates whether the judgment involves important public rights or unfair, illegal or corrupt practices, or torts affecting a significant number of persons, or otherwise affects the public or a significant number of persons not parties to the litigation (if the judgment is against a state licensee, the declaration must also disclose whether it exposes such person to any possible disciplinary proceeding); and (3) discloses whether the judgment sought to be reversed may have collateral estoppel *516 or other effects in potential future litigation and, if so, whether any third parties who might be prejudiced by stipulated reversal of the judgment have received notice of the motion therefor." (Ct.App., First Dist., Local Rules, rule 8 (Local Rule 8).)
The motion before us does not satisfy these requirements. First, the approval of this motion would adversely affect David Hitchcock, the former administrator of the estate, who is a nonparty.[2] The probate court's approval of the final accounting, should it survive these appeals, is "conclusive as to [the administrator's] veracity and [his] exercise of due care." (Lazzarone v. Bank of America (1986) 181 Cal. App.3d 581, 592, 226 Cal.Rptr. 855; see also Prob.Code, § 11605.) Were we to grant the motion, the probate court's implicit finding that Hitchcock acted with due care would be open to challenge and Hitchcock would be exposed to potential litigation concerning his administration of the estate. Because Hitchcock would be adversely affected by the proposed stipulated reversal, the motion cannot be granted. (§ 128, subd. (a)(8).).
The moving parties acknowledge this possibility. Their response is: "[N]either the general public nor any non-parties to these consolidated appeals could be adversely affected with the exception of anyone found to have wrongly taken or lost estate assets, who have no right, of course, to be shielded from the legal consequences of such conduct." This response misses the point. The administrator does have an interest in the finality of the estate, not in order to shield himself from the consequences of any wrongdoing, but in order to protect himself from having to defend his actions beyond a reasonable point in time namely, after the court's approval of the final accounting.
Further, the proposed stipulated reversal did not come about as part of the settlement of any dispute between appellant and respondent. In fact, appellant and respondent have identical interests: they wish to pursue a claim against the estate's former administrator, a claim the probate court concluded was barred because appellant and respondent did not make their objections known in time. Nor is there any other interest advanced in granting the motion that would outweigh the erosion of public trust inherent in stipulated reversals. The fact that the stipulated partial reversal does not actually settle a dispute but, instead, stirs one up, supports denial of the motion. In the very few published cases in which a motion for a stipulated reversal has been granted, there was no negative impact on a nonparty and settlement saved resources and advanced important interests. (See In re Rashad H. (2000) 78 Cal.App.4th 376, 92 Cal.Rptr.2d 723 [reversal granted in order to speed up pace of dependency proceeding]; Union Bank of California v. Braille Inst. of America, Inc. (2001) 92 Cal. App.4th 1324, 112 Cal.Rptr.2d 604 [two charities sought reversal in order to settle dispute about appointment of co trustees].) This is not the case here.[3]
*517 IV. DISPOSITION
The motion is denied.
We concur: KLINE, P.J., and RUVOLO, J.
NOTES
[1] All further statutory references are to the Code of Civil Procedure, unless otherwise noted.
[2] The moving parties were required under this court's Local Rule 8 to give Hitchcock notice of this motion. Their failure to do so is a ground for denial of this motion.
[3] We note that the probate court, in its order appointing respondent as special administrator of the estate (for the purpose of representing the estate in appealing the order approving the final accounting) stated that respondent is "prohibited from opposing the two appeals now pending in this estate. . . . ." The court went on to state that it is in the beneficiary's best interests that the appeals be successful. The moving parties attempt to argue that the court's description of the appeal represents a kind of blessing of a stipulated partial reversal. In reality, the probate court seems to have been simply describing the purpose for which it was appointing respondent. In any event, this language has no bearing on this court's determination of whether the motion meets the statutory requirements set out in section 128, subdivision (a)(8).
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46 Md. App. 631 (1980)
421 A.2d 85
WILLIAM JOSHUA LEONARD
v.
STATE OF MARYLAND.
No. 44, September Term, 1980.
Court of Special Appeals of Maryland.
Decided October 10, 1980.
*632 The cause was argued before MOORE, LOWE and WILNER, JJ.
Joseph H. Rouse, Assigned Public Defender, for appellant.
Maureen O'Ferrall, Assistant Attorney General, with whom were Stephen H. Sachs, Attorney General, Warren B. Duckett, Jr., State's Attorney for Anne Arundel County, and Stephen R. Beard, Assistant State's Attorney for Anne Arundel County, on the brief, for appellee.
WILNER, J., delivered the opinion of the Court.
Appellant was charged in a twelve-count indictment with armed robbery and various related offenses, all arising out of the robbery of a Texaco service station on February 12, 1979. After a jury trial in the Circuit Court for Anne Arundel County, he was convicted on seven of the twelve counts and, after merging two of the seven, the court sentenced him on the remaining five counts for a total of thirteen years.
Brenda Bates, the manager of the station on duty at the time of the robbery, testified that appellant walked into the station office on the day in question, engaged her in conversation for some twenty minutes, and then demanded money. In the absence of a response from Ms. Bates, appellant reached across the counter and attempted to pull out the cash drawer. Ms. Bates slammed the drawer shut, whereupon appellant pulled a gun and fired at her. Fortunately, she was not hit, although it appears that either the bullet or the gaseous discharge grazed her neck, leaving a bruise. Appellant then fled, taking with him $5.00 that had been in the cash drawer.
Ms. Bates identified appellant in court as her assailant *633 and also identified a tan jacket that she said he was wearing at the time of the robbery. Gary Lee Jones, a friend of appellant, said that later that afternoon (of the 12th) he saw appellant wearing the same tan jacket. Appellant was upset and asked Jones if he could exchange his tan jacket for a maroon jacket owned by Jones. The next evening, February 13, Detective Beans, of the Annapolis police department, returned Jones' maroon coat and retrieved appellant's tan jacket. Beans testified that he found the maroon coat in appellant's car when he arrested appellant on the 13th.
There was a good bit of other evidence connecting appellant to the incident at the Texaco station, but, for the purpose of considering the issues necessary to be discussed in this appeal, what has heretofore been recited will largely suffice.
(1) "Was the Trial Judge incorrect in his ruling on July 17, 1979 in refusing to dismiss the indictment against the Appellant since he had not been tried within one hundred twenty days as mandated by Rule 746 of the Maryland Rules of Procedure?"
Maryland Rule 746 a, as it read in June, 1979, provided that "[w]ithin 30 days after the earlier of the appearance of counsel or the first appearance of the defendant before the court pursuant to Rule 723 ..., a trial date shall be set which shall be not later than 120 days after the appearance or waiver of counsel or after the appearance of defendant before the court pursuant to Rule 723...." On June 25, 1979, the Court of Appeals filed an Opinion in State v. Hicks, 285 Md. 310 (1979), in which it concluded that (1) the requirement that a case be brought to trial within 120 days, absent a postponement "for extraordinary cause shown," was mandatory and not directory, and (2) the sanction for its violation was dismissal of the charges lodged against the defendant. See 285 Md. at 318.[1]
*634 Appellant, as noted, had been arrested on February 13, 1979. He was indicted on February 26, and arraigned on March 12, at which time the public defender entered his appearance. On July 17, 1979, the morning of trial, appellant moved to dismiss the indictment on the ground that he had not been brought to trial within 120 days, as then required by Rule 746 a. The court found as a fact that trial had been scheduled within the 120-day period, that the State was prepared to go ahead at that time June 12, 1979, that defense counsel had requested and obtained a postponement, and that the 120-day period had elapsed because of that postponement. Accordingly, the court concluded that appellant had waived the benefit of the rule.
The simple answer to appellant's first contention is that the sanction of mandatory dismissal, which emanates solely from Hicks, is not applicable to this proceeding. As the Court of Appeals subsequently concluded, 285 Md. at 334, 338, the mandatory sanction of dismissal applies "only to future criminal prosecutions and only to those pending cases where, as of our mandate in this case, there have been no appearances of counsel or first appearances of defendants pursuant to Rule 723." The Court's mandate in Hicks issued on July 25, 1979; that is the effective date of the Hicks interpretation of Rule 746.
Whether the court was correct or incorrect in its conclusions as to waiver, the fact is that appellant was not entitled to a dismissal of the indictment because of the failure to bring the case to trial within 120 days. We therefore find no error in the refusal of the court to dismiss the indictment by reason of the violation of Rule 746 alleged in this case.
(2) "Was the Appellant denied the right of confrontation by the Trial Judge when his counsel was refused the right to see the victim's written statement after she had admitted on cross examination of giving one and as a consequence was then not able to cross examine her from it?"
*635 During the cross-examination of Ms. Bates, this colloquy occurred:
"Q Now, you've testified with regard to this case, after you were after the police came, did at any time you give a written statement to the police?
A Just that night after it happened.
Q You gave a written statement that you signed?
A Well, they wrote it and I signed it.
MR. ROUSE [Defense Counsel]: May I have a copy of that?
MR. BEARD [State's Attorney]: May we approach the Bench, Your Honor?
COURT: Yes.
(BENCH CONFERENCE OUT OF HEARING OF JURY)
MR. BEARD: Your Honor, this is the first time Mr. Rouse has formally asked me for this document and he's conducting what I think to be a fishing expedition. If he's got a prior inconsistent statement in mind, he's certainly not laying a foundation for it. He's just grabbing at straws, and this is not how one approaches a properly admitted prior inconsistent statement.
MR. ROUSE: I understand in the case law, Your Honor, that once the witness has testified I am entitled to any prior statement she might have given to the police in regard to the case.
COURT: If it's exculpatory.
MR. ROUSE: Well, Your Honor, I have never seen the statement. I don't know.
COURT: Well, you
MR. ROUSE: I might point out to his Honor that Mr. Beard has previously approached the Bench and said to Your Honor, during the course of the discussion about the jacket, that the woman said in *636 his office that that was the jacket, and she's denied that on the stand, and that's certainly exculpatory.
MR. BEARD: She said it was in my office, that Detective Harrington showed her the jacket.
COURT: Yes, nothing nothing inconsistent about what she said and what Mr. Beard said.
MR. ROUSE: She never said she identified it in the office.
COURT: Well, she said she
MR. ROUSE: So, in any event, I am requesting his Honor to order the State's Attorney to give me a copy of the lady's statement she written statement she gave with regard to this case to the police right after
COURT: No, I'm not going to do that. It [sic] it's anything in there that's exculpatory, you are entitled to see it. If it's not I'll read it if you want me to.
MR. ROUSE: Do you want us to stay up here while you're reading the statement?
COURT: No.
(END OF BENCH CONFERENCE)
MR. ROUSE: May we approach the Bench again, Your Honor?
COURT: Yes.
(BENCH CONFERENCE OUT OF HEARING OF JURY)
MR. ROUSE: I assume then you're going to deny me the right to look at that statement?
COURT: The Court's read the statement and finds no exculpatory material in it. All right?
MR. ROUSE: Well, Your Honor, just for the record, that it is not my understanding that even though there is nothing exculpatory, there may be something in the statement that could be very well inconsistent with what she's saying now, and under those cases that say that if I'm entitled to her *637 statement, I would so ask for it, whether it's exculpatory or not is not the point. It's whether it would make a prior inconsistent statement so that we have the opportunity to cross-examine her from that.
COURT: All right.
MR. ROUSE: You're denying it?
COURT: Yes.
(END OF BENCH CONFERENCE)
MR. ROUSE: Just so the record's clear, would you mark that as part of the file, Your Honor?
COURT: I'll see that it gets in the record."
Relying on Carr v. State, 284 Md. 455 (1979), appellant contends that the court erred in not permitting counsel to inspect the statement given by Ms. Bates to the police. He argues that the appropriate test is not whether the statement was exculpatory, as suggested by the court, but rather whether it was in any way inconsistent with Ms. Bates' testimony and thus might have value for purposes of cross-examination.
Two distinct questions are raised: one, did the court apply the correct standard in deciding to withhold the statement, and two, did it utilize the correct procedure in making that decision. The answer to both is "no."
Carr makes clear beyond question that a defendant's right, at trial, to inspect the prior statement of a State's witness who has testified is not necessarily limited (1) by the rules pertaining to pretrial discovery, or (2) to statements that are merely exculpatory. When confronted with the actual testimony of a critical witness and the knowledge that the witness has given a prior statement bearing on a material issue in the case, counsel is not engaged in a mere "fishing expedition" in seeking access to the prior statement. At that point, it becomes more than a matter of casting a seine over the State's files to see what turns up, but of directly confronting the witness; and the statement thus assumes a specific importance and relevance beyond its general *638 value for trial preparation. See Carr, 284 Md. at 472. The test clearly is whether the statement is, or may be, inconsistent with the witness' trial testimony, and thus usable in cross-examination. To the extent that the court judged, or appeared to judge, the issue exclusively in terms of whether the statement was exculpatory, it was plainly in error.
Even if, as the State suggests, the court tacitly considered the question of inconsistency as well, we believe that it nevertheless erred in denying counsel's request to inspect the statement. Although, in Carr, the Court did not adopt wholesale the discovery rules initially laid down for the Federal courts in Jencks v. United States, 353 U.S. 657 (1957),[2] it did, at pp. 460-61 of 284 Md., quote with apparent approval this passage from the Jencks Opinion, which, we feel, states but a truism in any event:
"Every experienced trial judge and trial lawyer knows the value for impeaching purposes of statements of the witness recording the events before time dulls treacherous memory. Flat contradiction between the witness' testimony and the version of the events given in his reports is not the only test of inconsistency. The omission from the report of facts related at the trial, or a contrast in emphasis upon the same facts, even a different order of treatment, are also relevant to the cross-examining process of testing the credibility of a witness' trial testimony." (Emphasis supplied.)
These more subtle aspects of potential inconsistency, intrinsically subjective, have to be viewed from the defendant's perspective, and can be properly weighed only by defense counsel (with the assistance of his client). A screening of the statement by the court cannot suffice as an effective substitute. The court cannot be expected to view in the same context as defense counsel these more latent and *639 subtle gaps or differences; nor should it purport to do so. It is for that reason as well that the court erred. If any weight is to be given to the aforequoted considerations, as we think the Court of Appeals intended, it is incumbent upon the court, under the circumstances evident here, to permit counsel to inspect the statement and determine for himself whether it is or is not usable for cross-examination. The court still retains, of course, the ultimate right to determine whether the statement, or any part of it, is admissible in evidence, either as a document or through questions propounded to the witness. The issue here is not admissibility but inspection for possible use in cross-examination.
The statement in question was subsequently included in the record, as the court promised. We have reviewed it and, although it is generally consistent with Ms. Bates' testimony, we cannot conclude that, when judged against the principles noted in Jencks, it is entirely so, to the point of making the court's error harmless beyond a reasonable doubt.[3]
In light of this conclusion, it is necessary that the convictions be reversed. It therefore becomes unnecessary to address the remaining issues raised by appellant, none of *640 which concern the sufficiency of the evidence to sustain the convictions.
Judgments reversed; case remanded to Circuit Court for Anne Arundel County for new trial; costs shall not be reallocated, pursuant to Maryland Rule 1082 f.
NOTES
[1] The rule has since been amended to allow 180 days rather than 120. Moreover, by Laws of Maryland, 1980, ch. 378, effective July 1, 1980, the standard for permissible continuance is "good cause shown" rather than "extraordinary cause shown."
[2] See Yuen v. State, 43 Md. App. 109, 116 (1979), cert. den. 286 Md. 756 (Sept. 10, 1979), cert. den. 444 U.S. 1076.
[3] This case illustrates well and precisely the importance of the considerations mentioned in Jencks.
In her statement to the police, Ms. Bates related the incident as follows: "As he entered the gas station I was putting up the cigarettes behind the counter. The suspect approached me and asked me `Do you need any help? I told him no because I just had hired someone lately. The suspect then stated Do you own the place'? I told him No that I am just the manager. The suspect then said give me your money.' I said No.' The suspect stated that you better give me all your money.' I said that I did not have any.' The suspect said I know you have money in the middle drawer and reached over the counter and stuck his finger into the middle drawer."
It would appear from this recitation that the confrontation was a rather quick one. Yet, in her trial testimony, Ms. Bates said that she and appellant were engaged in conversation for 15 or 20 minutes, and that "fact" was stressed by the prosecutor in arguing the reliability of her identification of appellant.
Similarly, in her police statement, Ms. Bates described the gun as "a dark colored revolver about two inch barrel," but she stated at trial that she didn't see the gun and was unable to describe it.
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777 F.Supp. 923 (1991)
James D. MEREDITH, and Esther L. Meredith, Plaintiffs,
v.
HEALTH CARE PRODUCTS, INC., d/b/a Anderson Pharmacals; Barbara W. Larkins as an Officer and Agent of Health Care Products, Inc., d/b/a Anderson Pharmacals; Elbert Carl Anderson, Jr., as an Officer and Agent in Health Care Products, Inc., d/b/a Anderson Pharmacals; Ronald E. Anderson, as an Officer and Agent of Health Care Products, Inc., d/b/a Anderson Pharmacals; Barbara W. Larkins as an Officer and Agent of Anderson Pharmacals; Elbert Carl Anderson, Jr., as an Officer and Agent of Anderson Pharmacals; Ronald E. Anderson, as an Officer and Agent of Anderson Pharmacals; Health Care Products, Inc., d/b/a Cal-Ban 3000; Barbara W. Larkins as an Officer and Agent of Health Care Products, Inc., d/b/a Cal-Ban 3000; Elbert Carl Anderson, Jr., as an Officer and Agent of Health Care Products, Inc., d/b/a Cal-Ban 3000; Ronald E. Anderson, as an Officer and Agent of Health Care Products, Inc., d/b/a Cal-Ban 3000; Health Care Products, Inc., d/b/a Florida Regional Advertising; Barbara W. Larkins, as an Officer and Agent of Health Care Products, Inc., d/b/a Florida Regional Advertising; Elbert Carl Anderson, Jr., as an Officer and Agent of Health Care Products, Inc., d/b/a Florida Regional Advertising; Ronald E. Anderson, as an Officer and Agent of Health Care Products, Inc., d/b/a Florida Regional Advertising; Barbara W. Larkins, Individually; Elbert Carl Anderson, Jr., Individually; and Ronald E. Anderson, Individually, Defendants.
No. 91-CV-0086-B.
United States District Court, D. Wyoming.
November 7, 1991.
*924 Andrew W. Hutton, Michaud, Hutton & Bradshaw, Wichita, Kan., and Michael K. Shoumaker, Sheridan, Wyo., for plaintiffs.
Patrick J. Murphy, Williams, Porter, Day & Neville, Casper, Wyo., for defendants.
Kevin H. Graham, Shumaker, Loop & Kendrick, Tampa, Fla., for individual defendants Larkins, Elbert C. and Ronald E. Anderson.
ORDER
BRIMMER, Chief Judge.
This matter comes before the Court on defendants' motions. The Court, having considered the materials on file both in support of and in opposition to the motions, having considered the arguments of counsel, and being fully advised in the premises, FINDS and ORDERS as follows:
BACKGROUND
The plaintiffs' claims arise out of the purchase and consumption of the dietary supplement known as Cal-Ban 3000. The Food and Drug Administration has prohibited any further sales of this product. The plaintiffs brought this personal injury action against, among others, Barbara W. Larkins, Elbert Carl Anderson, Jr. and Ronald E. Anderson (the "individual defendants"). These individual defendants are the owners, directors and officers of Health Care Products, Inc. (HPC). HPC is the corporation that marketed, advertised, distributed and sold Cal-Ban 3000. The three (3) individual defendants are the sole owners of HPC and as such are in exclusive control of the corporation. The individual defendants' only contact with the State of Wyoming is the sale of Cal-Ban 3000 within the state. The plaintiffs also named HPC as a party, but that entity subsequently filed a petition for Chapter 7 bankruptcy protection.
The plaintiffs allege that the individual defendants have ignored the corporate formalities, participated in fraudulent and tortious conduct and have stripped the corporation of assets. The plaintiffs contend that the individual defendants operated under the guise of a shell corporation without the necessary assets to cover reasonably foreseeable liabilities. Thus, the plaintiffs believe the individual defendants cannot be shielded from personal liability for the acts of HPC.
The individual defendants have filed a Motion to Dismiss for lack of personal jurisdiction as well as a Motion for Summary Judgment. These individual defendants contend that the case against them should be dismissed on the grounds that they do not have the necessary minimum contacts with this forum to justify this Court exercising personal jurisdiction over them. In the alternative, they claim that they are not individually responsible for the acts of HPC and should be entitled to summary judgment.
STANDARDS FOR REVIEW
In considering a motion to dismiss, this Court must take the allegations of the *925 pleadings as true and must construe them most favorably to the plaintiff. This Court will not grant a motion to dismiss unless it appears beyond doubt that the plaintiff could prove no set of facts supporting its claim which would entitle it to relief. Huxall v. First State Bank, 842 F.2d 249, 250-51 (10th Cir.1988).
Summary judgment should be granted if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c).
In considering a party's motion for summary judgment, the court must examine all evidence in the light most favorable to the nonmoving party. Barber v. General Elec. Co., 648 F.2d 1272, 1276 n. 1 (10th Cir.1981).... Under [Rule 56], the initial burden is on the moving party to show the court "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). The moving party's burden may be met when that party identifies those portions of the record which demonstrate the absence of a genuine issue of material fact. Id. at 323, 106 S.Ct. at 2553.
Once the moving party has met these requirements, the burden shifts to the party resisting the motion. The nonmoving party must "make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. at 2552; see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The party resisting the motion "may not rest upon the mere allegations or denials of his pleadings" to avoid summary judgment. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. The mere existence of a scintilla of evidence will not avoid summary judgment; there must be sufficient evidence on which a jury could reasonably find for the nonmoving party. Id. at 251, 106 S.Ct. at 2511.
Manders v. Okl. ex rel. Dept. of Mental Health, 875 F.2d 263, 265 (10th Cir.1989).
DISCUSSIONS
The individual defendants have moved to dismiss for lack of personal jurisdiction. The starting point for analyzing any personal jurisdiction issue is the United States Supreme Court's decision in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The International Shoe court held that to exercise personal jurisdiction over a party it must be shown that the party has certain "minimum contacts" with the forum state so as not to "offend traditional notions of fair play and substantial justice." Id. at 316, 66 S.Ct. at 158. The plaintiffs must make a prima facie showing that the individual defendants have the requisite minimum contacts in order for this case to proceed. Hayworth v. Beech Aircraft Corp., 690 F.Supp. 962 (D.Wyo.1988).
Originally, the plaintiffs argued that jurisdiction over these individual defendants could be obtained through piercing the corporate veil. Subsequently, the plaintiffs have argued that the Court need not even address the piercing issue to obtain jurisdiction. The plaintiffs cite Energy Reserves Group, Inc. v. Superior Oil Co., 460 F.Supp. 483 (D.Kan.1978), for the proposition that piercing the veil is not necessary to obtain personal jurisdiction in this instance.
In Energy Reserves, Chief Judge Theis[1] held "alter ego" principles no longer play any proper role in the analysis of the constitutional propriety of the exercise of jurisdiction. Id. at 490. The Energy Reserves case involved obtaining jurisdiction over a subsidiary corporation which had transacted business in the state of Kansas through its parent corporation. The parent corporation wholly owned the subsidiary corporation.
Judge Theis held the jurisdiction question could be resolved "on concepts of fundamental *926 fairness and substantial justice" without addressing whether to pierce the corporate veil. Id. at 489. The issue of piercing "may be appropriately reserved, if necessary, until the trial on the merits of this action." Id. at 490.
In Grimandi v. Beech Aircraft Corp., 512 F.Supp. 764 (D.Kan.1981), Judge Theis once again held that piercing the veil was unnecessary to obtain jurisdiction in a case involving a subsidiary corporation transacting the business of its parent/owner. In Grimandi, the parent owned over 97% of the subsidiary's stock, exercised extensive control, the subsidiary had very limited assets and the subsidiary only transacted business through the parent. The court held that it was improper to resolve the question of piercing when attempting to determine jurisdiction. Id. at 769. The court found that the out-of-state defendant had "purposefully sought and foreseeably benefitted from its active relationship with an affiliated corporation that transacted business in the forum giving rise to the plaintiffs' claims." Id. at 769 (citing Energy Reserves, 460 F.Supp. at 514). Thus, personal jurisdiction over the defendant was proper.
In Hoffman v. United Telecommunications, Inc., 575 F.Supp. 1463 (D.Kan.1983), the court held that:
[T]he alter ego and minimum contacts tests bear little relation to each other. Although the factors which indicate those circumstances under which a subsidiary corporation and its parent or owner may be treated as one for purposes of liability are significant in gleaning from the record whether the formal corporate separation has been maintained, these factors have little relation to those which bear upon the due process fairness question of requiring a defendant to answer in the forum.
Id. at 1470-1471. Judge Saffels determined that the corporate factors represent only one aspect of the non-resident's ties to the jurisdiction. Id. at 1471. The other factors include: (1) inconvenience to the defendant of the forum; (2) concerns of fair and orderly administered laws; (3) whether the claim asserted arose in the forum; (4) the amount of revenue the non-resident derives from the affiliated corporation's business in the forum; and (5) the amount of direction the non-resident gives the affiliated corporation. Id. Thus, a balancing of factors is required to determine the jurisdictional question.
"The existence of jurisdiction under International Shoe depends on a `sufficient connection between the defendant and the forum state as to make it fair to require defense of the action in the forum.'" Energy Reserves, 460 F.Supp. at 502 (quoting Kulko v. Superior Court, 436 U.S. 84, 91, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978)). It is the court's duty to weigh the relevant factors to determine if it is reasonable and fair to require the defendant to answer in the forum. Id. Because the jurisdictional question requires the balancing of many factors, the formal separation of corporate identities does not alone raise a bar to the court exercising jurisdiction. Id. at 490.
In this case, if the Court accepts plaintiffs' allegations to be true, the balancing factors lean toward the Court finding personal jurisdiction exists. The individual defendants were the sole owners of HCP, just as the parents were the owners of the subsidiary corporations in the above-cited cases. The individual defendants were in exclusive control of HCP. HCP did transact business in the forum. It has been further alleged that these individual defendants have used the corporation as a mere shell to defraud creditors. The plaintiffs also allege that the individual defendants have improperly converted HCP's assets.
Weighing all these factors, the Court finds that the exercise of jurisdiction over these individual defendants is proper. The plaintiffs could prove the necessary facts to allow jurisdiction. Thus, the Court must deny the individual defendants' motion to dismiss for lack of personal jurisdiction.
The defendants also moved for summary judgment against the claims of the plaintiffs. Defendants' motion is based primarily on the same claims as the motion to dismiss. These defendants allege that they cannot be held individually liable for the *927 acts of the corporation. The defendants are correct contending that generally individuals cannot be held responsible for the acts of their corporation. In this case, however, the defendants may be individually liable.
The Tenth Circuit has recognized the doctrine of piercing the corporate veil. See Doyn Aircraft v. Wylie, 443 F.2d 579 (10th Cir.1971). The Doyn court held that:
The doctrine of alter ego "fastens liability on the individual who uses a corporation merely as an instrumentality to conduct his own personal business, such liability arising from fraud or injustice perpetrated not on the corporation but on third persons dealing with the corporation. Under it the court merely disregards corporate entity and holds the individual responsible for his acts knowingly and intentionally done in the name of the corporation."
Id. at 584 (quoting Kilpatrick Bros., Inc. v. Poynter, 205 Kan. 787, 473 P.2d 33, 42 (1970)).
In this case the plaintiffs have raised several issues relating to these defendants using HCP merely to conduct their personal business. The plaintiffs have alleged several facts which could justify piercing the corporate veil. Among these allegations are that the defendants undercapitalized HCP and that they withdrew all the assets of the corporation for their own personal use. They further allege fraud and misrepresentation on the part of the individual defendants.
Such allegations present a question of material fact which must be determined by the jury. Thus, it would be improper for the Court to grant defendants' motion for summary judgment. THEREFORE IT IS
ORDERED that the individual defendants' motion to dismiss for lack of subject matter jurisdiction be, and the same hereby is, DENIED. IT IS FURTHER
ORDERED that the individual defendants' motion for summary judgment be, and the same hereby is, DENIED.
NOTES
[1] At the time of the opinion in Energy Reserves, Judge Theis was the Chief Judge for the District of Kansas. Judge Theis is currently a Senior Judge for the District of Kansas.
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491 Pa. 493 (1980)
421 A.2d 653
DALE MANUFACTURING CO., Appellant,
v.
Edith BRESSI and Workmen's Compensation Appeal Board.
Supreme Court of Pennsylvania.
Argued April 15, 1980.
Decided September 22, 1980.
Reargument Denied November 14, 1980.
*494 Ronald M. Katzman, Harrisburg, for appellant.
Bruce E. Cooper, Harrisburg, for appellee (claimant).
Before EAGEN, C.J., and O'BRIEN, ROBERTS, NIX, LARSEN, FLAHERTY and KAUFFMAN, JJ.
*495 OPINION OF THE COURT
O'BRIEN, Justice.
Allocatur brings for review an order of the Commonwealth Court that affirmed an order of the Workmen's Compensation Appeal Board, hereinafter "Board". Edith Bressi, claimant/appellee, injured her back during the course of her employment with employer/appellant, Dale Manufacturing Company, on January 23, 1970. As a result of her injury claimant suffered a ruptured disc, and on February 18, 1970, she underwent an operation for the removal of the disc. The parties entered into an open compensation agreement under which claimant was to receive weekly compensation plus medical and hospital expenses.
Claimant did not recover as her physician had predicted, and an infection developed which prevented the proper and speedy healing of the surgical wound. In March, 1971, claimant underwent a second operation during which her physician discovered that he had failed to remove a cottonoid pad from the wound during the initial operation. Six months later claimant filed a complaint in trespass alleging her physician's negligence. This action resulted in a $30,000 pre-trial settlement.
Pursuant to the compensation agreement, employer made medical payments for the two surgical operations and also made weekly compensation payments to claimant during the period between the two operations. On June 25, 1973, employer filed a Petition to Suspend Payments and to Determine Subrogation Rights. Employer alleged that the negligence of claimant's physician aggravated the initial injury. He therefore claimed that he was entitled to subrogation with respect to the settlement in order to recover previously paid compensation and medical expenses and to receive a credit for future payments to the extent of the remaining balance of the settlement. In claimant's responsive pleading she asserted that the disability resulting from her doctor's negligence lasted for a one-year period and terminated when the cottonoid pad was removed and the *496 wound finally healed. She further alleged that her continuing disability was the result of the original injury.
A hearing before a referee was held on February 20, 1975. The only evidence proffered by employer was a copy of the complaint claimant had filed against her physician in the malpractice action. Based only upon this complaint the referee found in favor of employer and directed subrogation. The Board reversed the referee, and Commonwealth Court affirmed the Board's decision. Dale Manufacturing Company v. Workmen's Compensation Appeal Board, 34 Pa. Cmwlth. 31, 382 A.2d 1256 (1978).
Employer's claim to subrogation is based upon Section 319 of The Pennsylvania Workmen's Compensation Act, hereinafter "Act", Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671, which provides, in pertinent part:
"Where the compensable injury is caused in whole or in part by the act or omission of a third party, the employer shall be subrogated to the right of the employe . . . against such third party to the extent of the compensation payable under this article [footnote omitted] by the employer. . . ."
Employer correctly asserts that the rationale for this right of subrogation is threefold: to prevent double recovery for the same injury by the claimant, to ensure that the employer is not compelled to make compensation payments made necessary by the negligence of a third party, and to prevent a third party from escaping liability for his negligence. Stark v. Posh Construction Co., 192 Pa.Super. 409, 162 A.2d 9 (1960). As Judge Spaeth has noted, "[t]his result is just, because the party who caused the injury bears the full burden; the employee is `made whole,' but does not recover more than what he requires to be made whole; and the employer, innocent of negligence, in the end pays nothing." Arnold v. Brobonus, 257 Pa.Super. 110, 116, 390 A.2d 271, 274 (1978) (Judge Spaeth concurring and dissenting). Thus, where a third party's negligent conduct causes injury to an employee actually engaged in the business of his employer, there is a clear, justifiable right to subrogation under Section 319 of the Act.
*497 In the case at issue, however, the third party's negligent conduct occurred subsequent to the original, compensable injury. In order for employer to establish a right of subrogation in this case, the Commonwealth Court has said, "the employer must show he is compelled to make payments by reason of the negligence of a third party and the fund to which he seeks subrogation was for the same compensable injury for which he is liable under the Act." Dale Manufacturing Company v. Workmen's Compensation Appeal Board, supra, 34 Pa.Cmwlth. at 35, 382 A.2d at 1259.
The above assertion is based upon the rationale behind Section 319 of the Act as was noted in Stark v. Posh Construction Company, supra, and the distinction drawn in Savage v. Jefferson Medical College Hospital, 7 Pa.Cmwlth. 35, 298 A.2d 694 (1972). The court in Savage drew a distinction between new and independent injuries caused by a third party and those that aggravate or extend the initial compensable injury, holding that only the latter entitled an employer to subrogation rights. Appellant argues that this distinction is an artificial, improper one and should be abandoned. Given the dearth of evidence presented in the instant case, we are unable to evaluate such a claim.
As noted above, the sole evidence that employer submitted at the hearing before the referee, the fact finder, was the civil complaint claimant had filed against her physician. Employer offered no medical evidence to explain the effect of the medical treatment upon the original compensable injury nor did he request the appointment of an independent medical examiner. Employer, relying upon Tops Apparel Manufacturing Company v. Rothman, 430 Pa. 583, 244 A.2d 436 (1968), asserts that the averments contained in claimant's complaint against her doctor constituted "judicial averments" and may not now be contradicted.[1]
*498 In Tops Apparel, we declared, "[a]dmissions of this type, i.e., those contained in pleadings, stipulations, and the like, are usually termed `judicial admissions' (footnote omitted) and as such cannot later be contradicted by the party who has made them." (footnote omitted.) Id., 430 Pa. at 587, 244 A.2d at 438, citing, Wigmore, Evidence § 1604(2) (3d ed. 1940). However, it is equally true that such pleadings are conclusive only in the cause of action in which they are filed. Ham v. Gouge, 214 Pa.Super. 423, 257 A.2d 650 (1969). As the Superior Court stated, "[a] prior inconsistent statement in another action does not estop the party from taking a different position in a subsequent independent suit." Id., 214 Pa.Super. at 428, 257 A.2d at 653.
In the present case, employer seeks to establish evidence from pleadings which were filed in an unrelated case in which he was not a party and where factual issues were never determined because the case was settled out of court. Thus claimant may assume a different position from that taken in the prior action since there has been no adjudication or other binding action by the parties.
In a termination proceeding the employer has the burden of proving that the disability has ceased. Empire Kosher Poultry, Inc. v. Workmen's Compensation Appeal Board, 43 Pa.Cmwlth. 394, 402 A.2d 561 (1979). Our scope of review where, as here, the party with the burden of proof has prevailed before the referee and the Board has not taken additional evidence is limited to a determination of whether constitutional rights were violated, an error of law was committed or necessary findings of fact were unsupported by substantial and competent evidence. Workmen's Compensation Appeal Board v. Bernard S. Pincus Co., 479 Pa. 286, 388 A.2d 659 (1978). Accord, Katz v. Evening Bulletin, 485 Pa. 536, 403 A.2d 518 (1979).
Employer failed to offer medical testimony in support of his position and chose instead to rely solely on claimant's third party complaint. There is nothing in the complaint to establish that the subsequent medical treatment necessitated *499 by the forgotten cottonoid pad either aggravated the original injury or caused a new and independent one.[2] Clearly, employer has not sustained his burden of proof by clear and convincing evidence; thus, there is not substantial and competent evidence upon which the referee's factual findings may be based. Accordingly, the Order of the Commonwealth Court is affirmed.
NOTES
[1] Employer also argues that whether claimant may contradict the averments is irrelevant; the important fact is that she did not. We disagree. To suggest claimant did not contradict averments made in the complaint is directly contradictory to statements contained in claimant's responsive pleading.
[2] Such evidence is necessary for any evaluation of the Commonwealth Court's holding in Savage v. Jefferson Medical College Hospital, supra. It is impossible (1) to determine whether claimant's subsequent injuries were new and independent or merely an aggravation of the original compensable injury or (2) to analyze the correctness in such a distinction, when there is a lack of competent evidence of record tending to establish either.
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777 F.Supp. 1400 (1991)
UNITED STATES of America, Plaintiff,
v.
Pasquale MARCY, a/k/a Pat Marcy, and Fred Roti, Defendants.
No. 90 CR 1045.
United States District Court, N.D. Illinois, E.D.
September 6, 1991.
*1401 Terence Gillespie and Edward Genson, Genson, Steinback & Gillespie, Chicago, Ill., for Pasquale Marcy a/k/a Pat Marcy.
Dan Webb and Steve Molo, Winston & Strawn, Chicago, Ill., for Fred Roti.
Tom Durkin and Michael Shepard, Chicago, Ill., for the Government.
MEMORANDUM OPINION AND ORDER
ASPEN, District Judge:
Defendants Pasquale "Pat" Marcy and Fred Roti have filed a motion to dismiss the indictment and to suppress all wiretap evidence against them. Marcy and Roti submit various theories as to the impropriety of certain wiretap authorizations secured by the government in connection with its investigation underlying this case. Specifically, they argue that the government failed to establish probable cause for "surreptitious electronic surveillance" of Marcy's telephone conversations, that violations of 18 U.S.C. § 666 (1988) may not be prosecuted with wiretap evidence, that the government violated 18 U.S.C. § 2517(5) (1988), and that there was no genuine need for the wiretaps at the Counselor's Row Restaurant ("Counselor's Row") frequented by Marcy and Roti in Chicago.[1] As set forth below, we reject each of these contentions and deny the motion.
I. ANALYSIS
A. Probable Cause for Wiretap
Marcy and Roti's first argument is that the government lacked probable cause with respect to Marcy on the very first of its nine applications for electronic surveillance. The November 4, 1988 application and authorization named several persons, including Marcy, as possible targets. Marcy and Roti maintain that the information in the application affidavit concerning Marcy is so "sparse, vague and dated" that it could not establish probable cause to believe that Marcy was engaging in particular criminal conversations over the phone lines listed in the application and authorization. Evidence from the November 4, 1988 surveillance should therefore be suppressed, they contend, and, because the other eight wiretaps were authorized by information from the November 4 wiretap, "all derivative evidence must be suppressed" as well.
*1402 This first argument is fundamentally flawed. As the government points out, it is immaterial whether or not Marcy is a properly named "interceptee" in the November 4, 1988 application and authorization. The government need not establish probable cause with respect to each and every person named in a wiretap order. United States v. Martin, 599 F.2d 880, 884-85 (9th Cir.) (the statute "describes those persons who must be named in the application"; "a judge [may] issue an authorization order upon a showing that probable cause exists with respect to an individual; it does not expressly require a similar showing with respect to each person named in the application") (emphases in original), cert. denied, 441 U.S. 962, 99 S.Ct. 2407, 60 L.Ed.2d 1067 (1979); see also United States v. Dorfman, 542 F.Supp. 345, 377-78 n. 30 (N.D.Ill.) (adopting holding in Martin), aff'd, 690 F.2d 1217 (7th Cir.1982). In fact, the government had no obligation to even name Marcy in the application. United States v. Donovan, 429 U.S. 413, 435-38, 97 S.Ct. 658, 672-73, 50 L.Ed.2d 652 (1977).
The bottom line, as the government suggests, is that Marcy and Roti do not argue that there was insufficient probable cause for the issuance of the authorization with respect to any of the persons named in the application except Marcy. Thus, with law enforcement personnel "properly authorized to intercept [Person X]'s conversations over [Person X]'s home telephones, ... it is difficult to understand how the agents could not also be authorized to intercept [Person X]'s conversations with Marcy. If such intercepted conversations appear to contain evidence of criminality, the conversations may be properly intercepted whether or not Marcy is named as an interceptee," Response at 9, or whether or not there was probable cause specifically as to him.
In correctly pointing out the permutations of wiretap law not acknowledged by Marcy and Roti, the government does not abandon the probable cause ship. Indeed, we agree that the November 4, 1988 affidavit, read as a whole, is sufficient to establish probable cause for believing that Marcy was engaging in particular criminal conversations over the phone lines listed in the application and authorization.
Marcy and Roti's remaining contention that the Counselor's Row wiretaps (authorized March 16, 1989, May 16, 1989, and June 19, 1989) lacked probable cause because they were in some way tainted by the "improper" November 4, 1988 wiretap fails because the November 4 wiretap was not, in fact, improper.
B. Alleged 18 U.S.C. § 666 Violations
Marcy and Roti next maintain that the government's wiretap evidence cannot be used to prove alleged violations of 18 U.S.C. § 666 because § 666 "is not a crime for which interception is authorized." Memorandum at 5 (citing 18 U.S.C. § 2516(1)(a)-(n) (1988)). The defendants cite United States v. Millstone Enterprises, Inc., 684 F.Supp. 867 (W.D.Pa.), rev'd on unrelated grounds, 864 F.2d 21 (3d Cir.1988), in support of their position.
In Millstone, a Pennsylvania state court judge authorized wiretaps on a finding of probable cause that a certain person was violating state prostitution and racketeering statutes. Id. at 869. That person, facing contempt charges in federal court for failing to respond to a summons, argued that the wiretaps were illegal because "they were approved for the investigation of crimes not within the scope permitted by 18 U.S.C. § 2516(2)." Id. at 869-70.[2] That section permits wiretapping for the investigation of
murder, kidnapping, gambling, robbery, bribery, extortion, or dealing in narcotic drugs, marihuana or other dangerous drugs, or other crime dangerous to life, limb, or property, and punishable by imprisonment for more than one year, ... or any conspiracy to commit any of the foregoing offenses.
*1403 18 U.S.C. § 2516(2); see also Millstone, 684 F.Supp. at 870. A federal judge agreed that, because the alleged crimes cited as a basis for the wiretapping authorization were not among the offenses enumerated in § 2516(2), the wiretaps were illegal. Millstone, 684 F.Supp. at 870.
That case has only limited applicability here, however. In Millstone, the wiretap application did not list any crime other than ones not covered by statute. Id. at 869. Here, the government's wiretap application alleged probable cause to believe that certain named persons were violating 18 U.S.C. §§ 1962(c), (d) (1988), crimes enumerated under § 2516(1)(c). That evidence concerning alleged violations of 18 U.S.C. § 666 was also obtained during the course of a lawful wiretap does not mean that such evidence cannot be used to prove the alleged § 666 violations. In fact, as the government points out, not only is this not the type of situation confronting the court in Millstone, other federal courts have made it clear that the government may use lawfully obtained wiretap evidence to prove crimes not specified in the wiretap order, and may do so even if those are crimes not specifically targeted by Title III. See United States v. Pacheco, 489 F.2d 554, 564 (5th Cir.1974) (discussing § 2516(2) and finding that "[a]dditional offenses discovered during the course of a proper intercept may be prosecuted regardless of the nature of the offense or the prescribed punishment"), cert. denied, 421 U.S. 909, 95 S.Ct. 1558, 43 L.Ed.2d 774 (1975); see also United States v. Lanza, 341 F.Supp. 405, 412-13 (M.D.Fla.1972).
Further, it would be absurd to suppose that the government could not seize evidence allegedly relating to "non-enumerated" criminality merely because it happened to discover such evidence during the course of otherwise lawful electronic surveillance. See United States v. Williams, 737 F.2d 594, 605-06 (7th Cir.1984) (rejecting defendants' argument that governmental review of "lawfully recorded conversations for evidence of a charge not alleged in the Title III application" is unconstitutional), cert. denied, 470 U.S. 1003, 105 S.Ct. 1354, 84 L.Ed.2d 377 (1985); United States v. Johnson, 539 F.2d 181, 188 (D.C.Cir.1976) ("Officers attending a properly authorized, limited, and supervised wiretap have no obligation to close their ears to unexpected incriminating information on matters unrelated to their immediate investigation.... Like an officer who sees contraband in plain view from a vantage point where he has a right to be, one properly overhearing unexpected villainy need not ignore such evidence."), cert. denied, 429 U.S. 1061, 97 S.Ct. 784, 50 L.Ed.2d 776 (1977).
C. Alleged Violations of 18 U.S.C. § 2517(5)
Marcy and Roti also contend that the government violated 18 U.S.C. § 2517(5) (1988) when it charged them with crimes not listed in the wiretap application. They rely heavily on United States v. Brodson, 528 F.2d 214 (7th Cir.1975), in arguing that the indictment must be dismissed.
United States District Judge Ilana Rovner recently rejected a similar contention in United States v. Shields, No. 90 CR 1044, slip op. at 68-76, 1991 WL 239579 (N.D.Ill. July 30, 1991). We adopt Judge Rovner's analysis without repeating it here, and find that, particularly where the government has brought a superseding indictment after obtaining a § 2517(5) disclosure order, dismissal of the indictment or suppression of certain wiretap evidence is not appropriate.
D. Counselor's Row Wiretaps
The defendants assert that the affidavits submitted in connection with the Counselor's Row wiretap applications "fail[ed] to establish a genuine need for the highly intrusive technique of wiretapping." Memorandum at 13. This is essentially a claim that the government did not make a sufficient showing of necessity pursuant to 18 U.S.C. § 2518(1)(c) (1988). That section requires "a full and complete statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous." 18 U.S.C. § 2518(1)(c).
*1404 In this Circuit, however, "`the government's burden of establishing its compliance with [subsection 2518(1)(c)] is not great.'" United States v. Anderson, 542 F.2d 428, 431 (7th Cir.1976) (brackets in original); see also United States v. Farmer, 924 F.2d 647, 652 (7th Cir.1991) ("The government's burden of proving `necessity' [under § 2518(1)(c)] is not high."); United States v. Zambrana, 841 F.2d 1320, 1329 (7th Cir.1988) (quoting United States v. Anderson, supra). The government's application is satisfactory if it contains a factual predicate for a determination that other, perhaps less intrusive, investigative techniques are not feasible. Zambrana, 841 F.2d at 1330.
The legislative history of § 2518(1)(c), discussed in this Circuit's leading cases, is quite pertinent here:
Subparagraph (c) requires a full and complete statement as to whether or not normal investigative procedures have been tried and have failed or why these are unlikely to succeed if tried, or to be too dangerous. This requirement is patterned after traditional search warrant practice and present English procedure in the issuance of warrants to wiretap by the Home Secretary. [Citation omitted.] The judgment would involve a consideration of all the facts and circumstances. Normal investigative procedure would include, for example, standard visual or aural surveillance techniques by law enforcement officers, general questioning or interrogation under an immunity grant, use of regular search warrants, and the infiltration of conspiratorial groups by undercover agents or informants. Merely because a normal investigative technique is theoretically possible, it does not follow that it is likely. [Citation omitted.] What the provision envisions is that the showing be tested in a practical and common sense fashion.
S.Rep. No. 1097, 90th Cong., 2d Sess. 101 (1968), cited in Anderson, 542 F.2d at 431.
Employing common sense, and reading the affidavit as a whole, it is clear that electronic surveillance was necessary for three reasons: "normal investigative techniques" had met with only limited success or had failed, the nature of the activities under investigation namely, the activities of the Chicago organized crime operation known as the La Cosa Nostra suggested that normal investigative techniques would be unlikely to succeed in the future, and that normal investigative techniques would be too dangerous. Response Exh. 2. We therefore reject Marcy and Roti's suggestion that § 2518(1)(c) necessity has not been shown.
E. Minimization
Finally, Marcy and Roti seem to contend that is, they raise the issue in their motion but not in their memorandum of law in support of that motion[3] that the wiretap evidence should be suppressed because the government failed to minimize the interception of communications not subject to interception and, further, failed to record all communications which were monitored and overheard. There can be little doubt that the government followed procedures sufficient to establish a prima facie case of reasonableness. See United States v. Dorfman, 542 F.Supp. at 390-91.
Minimization instructions were given by the supervising attorney to the monitoring agents before the Counselor's Row wiretaps were activated. The agents also received a copy of the interception order, the supporting affidavit, and a fairly detailed memorandum outlining the procedures to be followed. See Response Exh. 7. An additional memo provided supplementary instructions regarding special issues raised *1405 by the interception and minimization of oral conversations. Id. at Exh. 8.
Additionally, the supervising assistant United States attorney submitted detailed reports to the Chief Judge on the tenth and twentieth days of the interception and attached to those reports copies of the logs maintained by the monitoring agents. Id. at Exhs. 9, 10. The monitoring agents updated these logs as calls were intercepted, and described each call in some detail the time made, its duration, nature (incoming or outgoing), and a brief summary of the agent's contemporaneous understanding of the substance of the call and identity of the participants. Significantly, the monitoring agents also recorded whether they deemed the particular conversation pertinent, and whether the interception was minimized.
These reports, combined with the internal supervision of the assistant United States attorney, his reports to the Chief Judge, and the Chief Judge's overall supervision of the surveillance are sufficient to establish a prima facie case of the reasonableness of the government's minimization efforts.
II. CONCLUSION
We deny Marcy and Roti's motion to dismiss the indictment and suppress all wiretap evidence against them. First, defendants' probable cause argument relating to the first wiretap application fails as a matter of law. Second, the government may use wiretap evidence to prove alleged violations of 18 U.S.C. § 666, even though that section is not among the enumerated offenses for which electronic surveillance is specifically targeted. Third, we adopt Judge Rovner's analysis of defendants' 18 U.S.C. § 2517(5) argument, and reject that argument as insufficient to merit dismissal of the indictment or suppression of certain evidence. Fourth, we find that there was § 2518(1)(c) "necessity," particularly given the nature of the government's burden in that respect here in the Seventh Circuit. Finally, the government has established prima facie reasonableness regarding its efforts to minimize the interception of nonpertinent conversations. It is so ordered.
NOTES
[1] We also address a minimization argument raised by Marcy and Roti in their motion.
[2] Section 2516(1) relates to wiretap authorizations brought to federal judges. Subsections (a)-(n) enumerate the various offenses for which interception may be authorized. Section 2516(2) relates to wiretap authorizations brought to state court judges.
[3] The defendants' posture relates to the burden of proof on minimization. Initially, as they note, the government has the burden to make a prima facie case of reasonableness; defendants then bear the ultimate burden of persuasion. United States v. Suquet, 547 F.Supp. 1034, 1042 n. 19 (N.D.Ill.1982) (citing United States v. Quintana, 508 F.2d 867, 875 (7th Cir.1975)). Marcy and Roti suggest that they merely raise the minimization issue and that, "[i]f the government establishes a prima facie case of compliance with minimization requirements, then, of course, the defendants will respond and rebut accordingly." Motion at 3. There has been to date no such response or rebuttal subsequent to the government's response, filed August 7, 1991.
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18 Cal.Rptr.3d 444 (2004)
121 Cal.App.4th 1453
In re Jackie Don WHITE, On Habeas Corpus.
In re Melvin Richard Pena, On Habeas Corpus.
In re Renee Harris-Anderson, On Habeas Corpus.
Nos. C045684, C046271, C046677.
Court of Appeal, Third District.
September 1, 2004.
*446 Richard H. Dangler, Sacramento, for Petitioners Jackie Don White, Melvin Richard Pena and Renee Harris-Anderson.
No appearance for Respondent, the People.
Anthony L. Dicce for Richard H. Dangler, Jr., on contempt and sanctions.
*445 THE COURT.[*]
In these proceedings, we must decide what an appellate court can and should do when confronted by a petition for writ of habeas corpus that is frivolous because "it indisputably has no merit," i.e., "when any reasonable attorney would agree that the [petition] is totally and completely without merit." (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650, 183 Cal.Rptr. 508, 646 P.2d 179.)
The numerous petitions for writs of habeas corpus filed by inmates incarcerated for criminal convictions are a staple of the workload of an appellate court. Each petition receives careful review by this court regardless of whether the petition is prepared and filed by the inmate, as in most cases, or by an attorney representing the inmate. Established rules of law favor the finality of judgments. Thus, it is not easy to show that an inmate is entitled to a writ of habeas corpus, and most petitions must be denied for the failure to state a prima facie case for relief. Yet, history demonstrates that the petition for writ of habeas corpus, often referred to as the Great Writ, has resulted in monumental rulings in favor of incarcerated inmatesrulings *447 that have improved our legal system. (See, e.g., Gideon v. Wainwright (1963) 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799.)
Due to the importance of the Great Writ in our system of justice, it is critical not to impede such access to the courts or to deter, for fear of personal liability, the vigorous assertion of an inmate's rights. (In re Marriage of Flaherty, supra, 31 Cal.3d at p. 647, 183 Cal.Rptr. 508, 646 P.2d 179.) At the same time, Congress and the courts have recognized that inmates must not be allowed to abuse the habeas corpus process to unjustifiably delay the finality of judgments and thereby undermine public confidence in our legal system. (See McCleskey v. Zant (1991) 499 U.S. 467, 111 S.Ct. 1454, 113 L.Ed.2d 517; In re Clark (1993) 5 Cal.4th 750, 21 Cal.Rptr.2d 509, 855 P.2d 729.)
Before us are three habeas corpus proceedings in which the process has been abused, not by the three inmates but by the attorney who was retained to prepare and file the petitions. As will become clear in this opinion, the attorney abused the writ process, and his clients, by filing frivolous habeas corpus petitions that have absolutely no chance of success. Not only has the attorney conceded that the petitions are patently frivolous and that one petition is also contemptuous, the attorney has admitted that before signing them and having them filed, he did not even read the petitions, which were prepared by law students or by another lawyer working in what can be characterized as the attorney's "writ mill." Simply stated, the attorney not only took money from these inmates and their families under false pretenses, he gave them false hope that they had some possibility of successhope that we must now dash because, as even the attorney concedes, the writ petitions are doomed to fail.
Thus, besides denying the writ petitions, we are faced with the question, does this court have the authorityas well as the responsibility to our legal system and to the inmates and families who retained this attorneyto sanction the attorney who abused the habeas corpus process by filing frivolous writ petitions? As we will explain, the answer to this question is "yes," with the understanding that sanctions should be imposed sparingly, in only the most egregious case, so as not to discourage use of the Great Writ.
These are such egregious cases. Consequently, we will sanction the attorney, Richard H. Dangler, Jr., by ordering him (1) to return to the clients who retained him the amount of money he received to file petitions for writs of habeas corpus in state courts on behalf of the three inmates, and (2) to pay monetary sanctions to this court to compensate it in part for the cost of processing, reviewing, and deciding the writ petitions and the orders that we issued directing Dangler to show cause why sanctions should not be imposed.
SUMMARY OF PROCEDURAL BACKGROUND
In December 2003, Attorney Richard H. Dangler, Jr., filed in this court a petition for writ of habeas corpus on behalf of his client, Jackie Don White. Our review of the 96-page petition reveals it contains gross misstatements of fact, misrepresentations of law, and repetitions of appellate contentions long ago resolved against White. In addition, the petition accuses this court of ignoring the law and ruling against White in his earlier appeal because the court was biased in favor of the prosecution.
As reflected in our findings of fact, post, Dangler is not unfamiliar to this court. After being admitted as a member of the State Bar of California in 1988, he occasionally *448 was appointed to represent indigent defendants on appeal in the Court of Appeal, Third Appellate District. In three appeals decided in 1991 and one decided in January 1992, this court found Dangler repeatedly misrepresented the facts of the cases and raised contentions that were frivolous on the merits or were barred for failure to raise them in the trial court.
Concluding that Dangler's work fell below the standard to be expected of reasonably competent appointed counsel, this court directed that Dangler be removed from the panel of attorneys who are appointed to represent indigent defendants on appeal in this district. Thereafter, Dangler continued to represent inmates before this court as retained counsel, and continued to raise misleading and meritless claims of error.
Over time it began to appear to this court that Dangler might be systematically misleading clients and abusing the writ process for his own pecuniary gain. This suspicion came to a head with Dangler's filing of the petition for writ of habeas corpus on behalf of inmate White that indisputably has no merit. The fact the White petition is so patently frivolous led this court to conclude that we must determine whether some action against Dangler is necessary to protect both his clients and the judicial system against his abuses of the writ process.
Consequently, this court ordered Dangler to show cause why he should not be required to pay monetary sanctions for filing a frivolous petition for writ of habeas corpus on behalf of White. And because the writ petition contains statements alleging that this court's rulings against White in his earlier appeal were based not on the law but on this court's bias in favor of the prosecution, Dangler was ordered to show cause why he should not be adjudged guilty of contempt of court and punished accordingly.
In his return to the order to show cause (OSC), Dangler concedes the writ petition is patently frivolous and contemptuous on its face. Acknowledging he has no defense to the imposition of sanctions for filing a frivolous writ petition, he offers "factors in mitigation in setting the amount of the monetary sanction." As to contempt, he tenders a defense that the writ petition was written by a lawyer who was working for Dangler and that because Dangler simply signed the petition without writing it or reading it, he did not have the mental state necessary for a finding of contempt.
After he filed the writ petition on behalf of White, but before we issued the OSC in the White proceeding, Dangler filed in this court a petition for writ of habeas corpus on behalf of his client, Melvin Richard Pena. Our review of the 37-page petition reveals it contains frivolous claims of error. Hence, we ordered Dangler to show cause why he should not be required to pay monetary sanctions for filing a frivolous petition for writ of habeas corpus on behalf of Pena. Dangler concedes the writ petition is patently frivolous, acknowledges he has no defense to the imposition of sanctions, and offers factors in mitigation with respect to the amount of monetary sanctions that should be imposed.
After we issued the OSC in the White proceeding, Dangler filed in this court a petition for writ of habeas corpus on behalf of his client, Renee Harris-Anderson. Our review of the 53-page petition reveals it contains frivolous claims of error. Hence, we ordered Dangler to show cause why he should not be required to pay monetary sanctions for filing a frivolous petition for writ of habeas corpus on behalf of Harris-Anderson. Dangler concedes the writ petition is patently frivolous and acknowledges he has no defense to the *449 imposition of sanctions. Again, he offers factors in mitigation with respect to the amount of monetary sanctions that should be imposed.
We consolidated the three cases for a hearing and ruling on the petitions and the OSCs. An extensive hearing was conducted on April 27, May 4, May 26, and June 30, 2004. Dangler appeared with counsel, who called and cross-examined witnesses, and presented documentary evidence. And the court compelled the attendance and testimony of certain witnesses.
SUMMARY OF FINDINGS AND DISPOSITION
During the hearing, this court's questioning of witnesses revealed that Dangler has for some time been operating a writ mill, in which attorneys and essentially unsupervised law students have written petitions for writs of habeas corpus for filing in state and federal courts under Dangler's name. Dangler signed a great number of the petitions without reading them, and on some occasions a clerical employee signed Dangler's name on the petitions. Dangler generally received a $7,250 retainer to pursue habeas corpus relief. He paid law students up to $2,000 for their virtually unsupervised work on a client's case, or paid attorneys up to $2,500 per client. Thus, from each client, Dangler kept close to $5,000, less other overhead, for personally providing no legal service whatsoever.
In operating this habeas corpus writ mill, Dangler failed to supervise non-lawyers performing legal work, aided the unauthorized practice of law, and acted as a detrimental role model for a number of law students and young attorneys. Moreover, Dangler admitted that rather than depositing in a trust account the funds received from his clients, he deposited those funds in the general business account of an attorney named Roman Rector, whose office is in the same building as is Dangler's office.
Evidence also revealed Dangler had a State Bar of California (State Bar) disciplinary action pending against him.
During the course of the writ of habeas corpus proceedings in this court, Danger voluntarily resigned, with charges pending, from the State Bar. Dangler asked, and this court agreed, that we would take into account his resignation from the State Bar and, in the interests of justice, we would discharge the OSC re contempt in the White proceeding.
Finding that the three petitions for writs of habeas corpus filed by Dangler on behalf of White, Pena, and Harris-Anderson are frivolous and fail to state a prima facie case for relief, we will deny them without prejudice, and further order that each petitioner may file a new petition for writ of habeas corpus in the superior court, and that the period of time between the date the petitioner retained Dangler and the date upon which this decision becomes final will not be counted against the petitioner with respect to the delay in filing a new habeas corpus petition in the superior court.
Finding that the petitions for writs of habeas corpus are patently frivolous, we will impose monetary sanctions against Dangler as follows: (1) within 30 days after this opinion becomes final, Dangler must refund to each client in the White, Pena, and Harris-Anderson cases the amount of money Dangler received from the client to file petitions for writs of habeas corpus in state courts ($7,250 to each of the three clients, for a total of $21,750); and (2) within 30 days after this opinion becomes final, Dangler must pay to this court the sum of $25,000 to compensate the court in part for the cost of processing, reviewing, and deciding the three writ petitions *450 and the orders to show cause why sanctions should not be imposed.
In the interests of justice, as stated above, we will discharge the OSC re contempt in the White proceeding.
FACTS AND FINDINGS
1. Dangler's Court-appointed Appellate Practice in This Court
Dangler was admitted as a member of the State Bar in 1988. Thereafter, he occasionally was appointed to represent indigent defendants in criminal cases on appeal before this court.[1]
While testifying at the hearing in this court on the OSCs, Dangler claimed this was the first time he had ever been told by a court that a petition or pleading he filed was frivolous.
However, it later was revealed that in three appeals decided in 1991, this court issued opinions explicitly finding that Dangler had repeatedly misrepresented facts of the cases and raised contentions that were frivolous or were barred by the failure to raise them in the trial court. For example, in one case, this court stated that an appellate contention asserted by Dangler constituted a "gross mischaracterization of the record," and that other claims of error were "disingenuous" and "frivolous contentions that are nothing more than figments of appellate counsel's imagination." (People v. Hale (Mar. 4, 1991, C007733) [nonpub. opn.]; see also People v. Rueda (Mar. 19, 1991, C008621) [non-pub. opn.]; People v. Munoz (Nov. 26, 1991, C008492) [nonpub. opn.].)
And in January 1992, this court issued an opinion in another appeal in which Dangler represented an indigent defendant. Once again, this court found Dangler's performance was appalling. After describing his claims of error, in order, as "frivolous," "utterly baseless and grossly misrepresent[ing] the record," "trifl[ing] with this court," "another frivolous contention," "another instance of misleading this court," "a baseless assertion," and "flagrantly misrepresent[ing] the record," the opinion stated that Dangler was either "unable to comprehend the record or [was] intentionally attempting to mislead this court." The opinion concluded that Dangler had repeatedly mischaracterized the record, engaged in unprofessional conduct, undermined his own credibility, failed to further his client's interests, and set a bad example for his client, a minor. (In re Richard J. (Jan. 3, 1992, C010255) [non-pub. opn.].)
On January 7, 1992, then-Presiding Justice Robert K. Puglia wrote to the director of the Central California Appellate Program (CCAP), which oversees appointment of counsel on appeal, informing CCAP that Dangler's work fell below the standard to be expected of reasonably competent appointed counsel (as demonstrated by the decisions in Richard J., Munoz, Rueda and Hale), and directing CCAP to remove Dangler from the panel of attorneys available for appointment to represent indigent defendants in appeals before this court.
2. Dangler's Habeas Corpus Practice in This Court
Following his removal from CCAP's appointed-counsel panel, Dangler continued representing inmates before this court, albeit as retained counsel in habeas corpus proceedings.
During the hearing on the OSC, Dangler testified that "through a lot of hard personal work," he has obtained favorable results for "a number of" his clients in habeas corpus proceedings. In support of this claim, he introduced into evidence a list of *451 the petitions for writs of habeas corpus that he has filed in this court.[2]
The list shows that from December 1992 to April 2004, Dangler filed 53 habeas corpus petitions in this court, including the three admittedly frivolous petitions filed in these consolidated actions. As to the other 50 petitions, this court summarily denied 47 of them, without having ordered opposition from the Attorney General, because each petition failed to state a prima facie case for relief.[3] One of the petitions was summarily denied after the receipt of opposition from the Attorney General. (In re Jack, C035659.) As to another petition, this court issued an order to show cause returnable to the superior court; however, that habeas corpus petition was actually drafted by the petitioner inmate in propria persona, who simply substituted in Dangler as his attorney after this court determined that the petition stated a prima facie case and requested opposition from the Attorney General. (In re Smith, C034372.)[4] With respect to the remaining petition, this court summarily rejected six of seven contentions, but remanded the matter to the trial court to exercise sentencing discretion pursuant to People v. Superior Court (Romero) (1996) 13 Cal.4th 497, 53 Cal.Rptr.2d 789, 917 P.2d 628. (In re Jones, C038074.)
In other words, contrary to his claim that he has obtained favorable results for "a number of" his habeas corpus clients in this court, Dangler achieved success in only one of the 53 petitions he filed over nearly a 12-year period. Of course, as we have noted, because rules of law favor the finality of judgments, it is not easy to show that an inmate is entitled to a writ of habeas corpus. Hence, we do not necessarily equate the failure to state a prima facie case for relief with frivolousness, or with incompetence of the attorney representing the petitioner. However, Dangler's lack of success is relevant to these proceedings for two reasons: (1) it impeaches his testimony during the hearing on the OSCs and thus bears generally upon his credibility in other respects, and (2) it demonstrates why it appeared to this court that he might be systematically misleading his clients and abusing the writ process for pecuniary gain.[5]
And, as described below, this is not the first habeas corpus proceeding in which Dangler has faced an accusation of contempt, a fact of relevance to this proceeding for reasons that follow.
*452 3. Dangler's Prior Contempt Hearing in This Court
In December 2000, this court issued an order directing Dangler and Eric Wagner, an employee of Dangler's, to show cause to why they should not be held in contempt for Dangler's allowing Wagner, an attorney suspended from the State Bar, to appear for Dangler in oral argument before this court. (People v. Lepeilbet, C033832.) After a hearing, an order was issued on February 6, 2001, holding Wagner in contempt but finding Dangler not guilty of contempt.
Although absolving Dangler of contempt, this court expressed grave concern about Dangler in the following words: "The record suggests Mr. Dangler may have been grossly negligent or reckless in hiring Mr. Wagner in January 1998, retaining him for nearly three years until late December 2000, and allowing him to perform oral argument in this court on December 12, 2000; Mr. Dangler did not know Mr. Wagner was an active attorney entitled to practice law; and Mr. Dangler knew or should have known [that] Mr. Wagner was not actively licensed to practice law. The record suggests Mr. Dangler made virtually no effort, either before or after hiring Mr. Wagner, to establish whether Mr. Wagner was in fact an actively licensed attorney. [¶] The record also indicates Mr. Dangler's health problems continue to severely impair his ability to oversee the day-to-day operations of his law practice and to supervise his attorney and non-attorney staff. Mr. Dangler asserts he is `too sick to run a business, yet still well enough to supervise it and keep it going from the sickbed, as it were.' He contends his law office is `just so set up that it has been able to meet all its obligations in spite of [Mr. Dangler] being unable to work in the office in the normal way.' The validity of his assurances is doubtful." (People v. Lepeilbet, C033832, order filed Feb. 6, 2001, pp. 13-14; fns. omitted.)[6]
4. Proceedings Against Dangler Before the State Bar
In his return to the initial OSC in these proceedings, Dangler disclosed that there was a disciplinary action pending against him before the State Bar, and included a copy of a letter he received from its office of the chief trial counsel. The letter reflects that, in exchange for a proposal by the State Bar to settle four disciplinary matters pending against him, Dangler agreed he had committed several violations of the Rules of Professional Conduct and the Business and Professions Code. Specifically, he admitted that he (1) violated Business and Professions Code section 6090.5 by "requesting that [a certain] State Bar matter be dismissed in exchange for money," (2) violated the Rules of Professional Conduct, rule 3-310(F) by "accepting money from [a] third party without informed consent," (3) violated Business and Professions Code section 6068, subdivision (m) by "fail[ing] to [c]ommunicate" with a client, and (4) violated the Rules of Professional Conduct, rule 3-110(A) by "fail[ing] to properly supervise office staff."
5. Dangler's Representation of White in the Superior Court
(a) The Superior Court Habeas Corpus Petition
In September 2000, Dangler signed an attorney's employment agreement with Ralph White, the brother of Jackie Don White, providing that for payment by Ralph White to Dangler of $7,250, Dangler *453 would file a petition for writ of habeas corpus on behalf of Jackie Don White in the superior court and then, if necessary, in the California Court of Appeal and the California Supreme Court. At some point, Ralph White had lunch with Dangler and Attorney James Locke. During lunch, Dangler said that Locke would be the attorney handling most of the work on the habeas corpus petition.[7]
Dangler had hired Locke in the beginning or middle of 2001, i.e., prior to June or July 2001, to draft habeas corpus petitions. Locke had a history of suspensions by the State Bar. On September 1, 2001, a few months after Dangler hired him, the State Bar placed Locke on inactive status, and then suspended him from the practice of law from October 10, 2001, until March 10, 2002.
Despite this court's then-recent criticism of Dangler for employing another inactive attorney who performed legal services,[8] Dangler failed to notify the State Bar, as required by rule 1-311(D) of the Rules of Professional Conduct of the State Bar of California, that he employed Locke at the time Locke was made inactive and then was suspended.[9]
Locke worked on the superior court habeas corpus petition prior to the summer of 2002, when Dangler fired Locke because he was not getting much work done. At this point, the petition was turned over to law student Brian Haddix for formatting, spell checking, and clerical preparation. Haddix made no substantive changes to the petition. The petition then sat in the office copy room for some time before it was copied and bound for filing in the superior court.[10]
Dangler admits he did not read the 112-page petition and memorandum of points and authorities, but nonetheless signed it. Dangler dated the petition October 24, 2002, and filed it in the San Joaquin County Superior Court on October 30, 2002. He also admits he did not tell White, or his brother Ralph, that he signed and filed the petition without reading it. The superior court habeas corpus petition is quite similar to the petition later filed on White's behalf in this court, and includes the same contemptuous language, which we will discuss in detail later in this opinion.
(b) Dangler's Reasons for Signing the Petition Without Reading It
Dangler testified that he knew it was "wrong" and negligent for him to sign a habeas corpus petition he had not read, but he offered three reasons for having done so with the White petition filed in the superior court.
*454 First, Dangler testified he thought he could rely on Locke, whom he viewed as an experienced attorney. However, the evidence showed that Locke had a history of suspensions by the State Bar before Dangler hired him. And the State Bar placed Locke on inactive status and then suspended him for nearly six months shortly after Dangler hired him. Nevertheless, Locke apparently worked on the superior court habeas corpus petition on behalf of White during that time.[11]
Second, Dangler testified he signed the petition without reading it because he employed a "writ manager," an attorney named Angela Kung, who was supposed to review the petition before Dangler signed it. He described Kung as a competent attorney who provided "experienced supervision." However, he acknowledged that Kung was not admitted to the State Bar until December 3, 2001, and thus had been an attorney for only about 10 months when the White petition was filed in the superior court. Moreover, Dangler admitted he does not know whether Kung actually reviewed the petition. Indeed, Haddix testified credibly that it was not Kung's job to review the habeas corpus petition written by Locke, as Locke was himself an attorney.
Third, Dangler testified he signed the petition without reading it because of his health problems. According to Dangler, he suffered some cognitive problems after sustaining a head injury in June 2000. In early 2001, he thought his health was improving and he would be fine. But later in 2001, he began to suffer dizziness, fatigue, and pain, and doctors tested him for multiple sclerosis. He was having dizzy spells and difficulty focusing, which greatly impaired his ability to read anything. He testified that "sometimes" he was incoherent.
In support of his testimony, Dangler introduced a letter from a neurologist, dated February 25, 2002, stating (1) Dangler said he continued "to have difficulties at work"; (2) testing showed Dangler's memory for acquisition and recall was normal, but his "[d]elayed recall" was in the poor range; and (3) Dangler had some degree of impulsivity and problems with attention and organization. The neurologist opined Dangler suffered from "a significant degree of cognitive impairment that is most likely related to previous head injury, but possibly from demyelinating multiple sclerosis."
Dangler also provided substantial medical documentation that he began to suffer from back pain in August 2002, which was the onset of a debilitating spinal infection, vertebral osteomyelitis. His condition left him bed-ridden in December 2002. The condition was not diagnosed until January 2003, when he was hospitalized. While bed-ridden at home, he received intravenous antibiotics and was treated by a home healthcare nurse for about eight weeks, starting in January 2003. By May 2003, Dangler told his doctor that he had minimal back pain, and denied having any numbness or weakness.
In addition, Dangler presented an April 2003 radiology report of the results of a nuclear medicine "brain SPECT study," which states its findings are "highly suggestive of Alzheimer's disease." Despite this report and the intervening year since it was issued, Dangler did not introduce any evidence that a doctor has diagnosed him with Alzheimer's disease.
Although Dangler introduced substantial evidence that he has suffered from severe health problems, he did not present evidence or argue that his health problems *455 resulted in cognitive impairment that precluded him from recognizing his ethical and professional obligations as an attorney. In fact, while testifying, Dangler demonstrated an ability to recall specific details regarding his work on past cases when those details served his own interests. Nothing in his demeanor, his manner of testifying, or the content of his testimony suggested that he failed to understand, or has been incapable of understanding, his duties to his clients.
In any event, even if we credit Dangler's testimony that his ability to read was impaired at times due to his health problems, this fails to explain why Dangler did not ensure that a competent attorney in his employ reviewed and signed the petition, or why he did not associate competent counsel to do so.
6. Dangler's Law Practice Since 2001
In part, Dangler attempts to shift the blame onto his staff for his law firm's failings. In Dangler's words, after his health declined, "the quality of my staff much to my deep regret, declined as well"; "people who came to work there stopped listening to me, following direction, or paying . . . attention"; "people weren't taking their jobs very seriously sometimes when I wasn't well enough to be there to see that they should"; and "[p]eople just didn't seem to want to work hard enough."
To the contrary, the evidence establishes that Dangler failed to supervise his non-attorney staff and failed to make arrangements for their supervision. He admitted that, for the last few years, he has signed numerous habeas corpus writ petitions without first reading them, and that he has done so in perhaps 50 percent of his cases. And evidence showed that many of the petitions Dangler admittedly signed without reading, including the White petition filed in this court, were drafted or revised by law students without attorney supervision.
Dangler hired law student Frederick Charles Thomas as a law clerk in September 2001.[12] When Thomas was hired, Angela Kung was employed by Dangler as the writ manager. Thomas would draft habeas corpus petitions and give them to Kung for her review; Kung provided him with guidance and answered his questions. He believed that Kung was an attorney. As he gained experience, Thomas assumed that the petitions he wrote were ready for filing, absent further input from his supervisor. He never spoke to Dangler about the petitions he drafted; he never received in writing any criticisms or editing from Dangler on the petitions; and he was unaware whether Dangler read any of them.[13] Dangler did, however, sign the writ petitions that Thomas drafted.
Kung did not actually become an attorney until December 3, 2001. Dangler testified he employed Kung in 2001, before she was admitted to the State Bar, but he claimed that Kung did not become writ manager until after she became an attorney. However, Thomas's testimony establishes that Kung was supervising him when he started working for Dangler in September 2001.
*456 Thus, for at least a three-month period at the end of 2001, Dangler had a non-attorney supervising a non-attorney in preparing habeas corpus petitions for filing in courts, without any attorney supervision.
Dangler employed law student Brian Haddix as a law clerk from approximately February through August 2002. Haddix was assigned the clerical task of preparing for filing between 15 and 20 habeas corpus petitions drafted by James Locke. Although Haddix asked Kung for help when he had questions about submitting a petition, he did not give the 15 to 20 writ petitions to her for review before filing because they had been drafted by another attorney, Locke. According to Haddix, while it is possible he may have submitted some of the petitions to Kung, he normally would tell Dangler when one of Locke's petitions was prepared and ready to go. Haddix would leave only the signature page of the petition for Dangler to sign, and then would incorporate the signature page into the finished writ petition.
In May 2002, Dangler hired another law student, Carolyn Stacey Livingston, who worked for him until March 2004. Livingston was admitted to the State Bar on December 3, 2003, while still working for Dangler. Livingston testified that before she became an attorney, she worked on close to 50 habeas corpus petitions for Dangler, including redrafting the White petition that was filed in this court. Dangler knew Livingston was not an attorney at the time she redrafted the White petition.
Livingston thought that Dangler did not read the majority of the many habeas corpus petitions she had drafted or redrafted. She would leave them for him in a back room, and he would sign them. She assumed that Dangler did not read them because Livingston first submitted the petitions to a writ manager, who would read them and return them to her, and because Dangler never made any changes to the petitions.
Dangler paid Livingston $250 to redraft habeas corpus petitions for refiling in an appellate court after the original petitions were denied by the superior court. She was paid more for drafting the original petitions for filing in the superior court.
In September 2002, law student Cecilia Tsang began working for Dangler as a law clerk. Tsang testified that Attorney Roman Rector interviewed her and told her she was hired. Rector also wrote out her paychecks, but Tsang understood she was working for Dangler. Rector told Tsang she would be writing and filing writ petitions. When Tsang started work, Angela Kung was the writ manager and the sole attorney working for Dangler. Rector had his own law firm, handling personal injury and bankruptcy actions. Rector did not involve himself in the filing of habeas corpus petitions, but he did attend two hearings set in habeas corpus proceedings because Dangler was unavailable. In his testimony, Dangler conceded that Rector had no experience with habeas corpus.[14]
As a law clerk before she was admitted to the State Bar, Tsang drafted original habeas corpus petitions for filing in trial courts. Kung provided some training for Tsang regarding how to spot issues, find legal arguments, and prepare and file petitions. *457 Dangler also talked to Tsang about specific cases and issues on occasion.
Tsang testified that although Dangler signed the petitions she prepared, she saw him read only one of themthe very first petition she worked on in September or October 2002. Throughout her employment by Dangler, she took her completed writ petitions to him, if he was available, and he would sign them without reading them. When Dangler was not in the office, Tsang took the petitions to a non-attorney employee named Jim, who would sign Dangler's name on the petitions, also without reading them. Tsang was aware that other law clerks also had Jim sign Dangler's name on habeas corpus petitions.
In response to Tsang's testimony, Dangler stated, "I don't know who she's talking about," and denied that a non-attorney named Jim signed habeas corpus petitions in his absence. But later in his testimony, Dangler admitted he employed a bankruptcy paralegal named Jim Moore. When asked what Moore would say if called as a witness, Dangler responded, "I have no idea what he'll tell you." Dangler also testified that he had authorized Angela Kung and another attorney in the past to sign his name on petitions.
We find Dangler's denial that he authorized his paralegal to sign habeas corpus petitions in his absence is not credible given Dangler's demeanor during this testimony, his other prevarications, and the inconsistency in his first testifying that he had no idea whom Tsang was talking about, but later admitting that he employed a paralegal named Jim.
Angela Kung left Dangler's office in the middle to late December 2002. Cecilia Tsang was not admitted to the State Bar until March 2003. During the three-month time period between December 2002 and March 2003, no attorney was employed in Dangler's office and Dangler was absent due to illness. Nevertheless, Tsang and three law students working for Dangler continued to prepare habeas corpus petitions and to file them in courts.
Tsang was not promoted to writ manager until May 2003. Thus, her testimony established that from the middle of December 2002 until May 2003, Dangler's law clerks continued to prepare and file writ petitions outside the supervision of any member of the State Bar, other than Dangler. And during that time period, Dangler would sign the petitions without reading them if he was in the office; otherwise, the paralegal, Jim, would sign Dangler's name to them.[15] Even after Tsang became writ manager, the law students would get Dangler or Jim to sign their petitions.
Tsang testified that at some point after Kung left the office, Tsang became concerned that no one was in charge, mail was coming in, and no work was being done on cases. Tsang learned deadlines had been missed in several cases that had been left sitting on Kung's desk. Thus, Tsang approached Rector and offered to become writ manager. Rector agreed to promote her to writ manager in May 2003, and Tsang received a pay raise.
Tsang proposed to Rector that, as writ manager, she would be responsible for organizing case files and calendaring cases. Tsang testified that neither Rector nor *458 Dangler told her she was to review the substance of habeas corpus petitions written by the law students. Rather, Dangler explained that she was to keep in contact with clients and make sure petitions were timely filed. Tsang also was responsible for answering questions asked her by the law students.
According to Tsang, if during her tenure as writ manager, a law student employee asked her a question about a habeas corpus petition, she would answer it; the law student would prepare the petition and, although Tsang would make sure it was timely filed, she would not review the legal analysis or writing of the petition. Dangler testified he told Tsang that, as writ manager, she was responsible for reading and reviewing every petition and that she was supposed to inform him if there was a problem with a petition. Haddix, who worked for Dangler before Tsang began her employment in the office, testified that every writ petition had to be reviewed and approved by a supervising attorney. Livingston, who rewrote the White petition for filing in this court, testified that while she was a law clerk for Dangler before becoming an attorney, she "generally" submitted "most of" her work to a writ manager who read it and returned it to her. However, Tsang testified that she never read the White petition.
The evidence revealed that Dangler was not around the office very often from December 2002 through May 2003, but that he was in the office more often toward the end of 2003. On occasion, Tsang would call Dangler at home with questions. When she spoke with him, Dangler seemed mentally competent to address legal issues and to deal with the business of law. At the end of November 2003, Rector told Tsang she would no longer be the writ manager because Dangler intended to take a more active role in overseeing the writ petitions. Tsang ceased working for Dangler in December 2003.
During the 15 months she worked for Dangler as a law student and then an attorney, Tsang prepared approximately 30 original writ petitions for filing in the superior court. She also redrafted petitions for filing in higher courts, and she took over some cases when other employees left Dangler's firm. During the seven months she served as writ manager, Tsang oversaw the filing of "a good number of cases," up to 100 petitions, many of which were prepared by law students.
Dangler paid Tsang on a contract basis. Before Tsang was admitted to the State Bar, Dangler paid her a flat fee of $1,500 to prepare and file a habeas corpus petition in a superior court, and $250 to redraft a petition for filing in a state appellate court. After Tsang was admitted to the State Bar, Dangler paid her $2,000 for each original petition prepared and filed in a trial court, plus $250 for each "subsequent filing." When Tsang was promoted to writ manager, Dangler paid her an additional $1,500 per month. Dangler testified this was his customary arrangement with his employees, i.e., he paid law clerks $1,500 and attorneys $2,000 for original superior court habeas corpus petitions, and paid an additional $250 for each "refiling" in a state appellate court.
Dangler testified his standard retainer fee was $7,250 per habeas corpus petition, which included filing an original petition in the superior court and then, if necessary, refiling a petition in the California Court of Appeal and the California Supreme Court.[16] He charged a "separate and similar" fee to file petitions for writs of habeas *459 corpus in the federal courts. Even before examining the trial or appellate court records, Dangler agreed to file a habeas corpus petition in every case in which a client paid the $7,250 fee. Dangler could not recall ever determining that there was no basis for a petition after accepting the retainer. According to Dangler, he offered his clients the option of paying him only $2,500 to review the record, and then an additional $6,000 if he recommended the filing of a petition, but most of them opted to pay him $7,250 to go ahead and file a petition.
Dangler testified that, in March 2002, he sold his bankruptcy practice to Rector, who since then has paid Dangler a "pension" of $300 per month. In about June or July 2002, Dangler closed his own bank accounts and began to use Rector's general business account. Dangler would deposit funds received from clients into Rector's general account, which was not a client trust account, and would have Rector pay Dangler's expenses, including employee compensation, from Rector's account. Because Dangler took the position that his employees were independent contractors, he did not withhold taxes or pay Social Security.[17]
7. Dangler's Representation of White in This Court
(a) The Petition for Writ of Habeas Corpus
On December 17, 2003, Dangler filed in this court a 96-page petition for writ of habeas corpus and memorandum of points and authorities with supporting exhibits on behalf of White in In re White, C045684. The cover of the petition contains Dangler's name as "Attorney for Petitioner." The petition contains a verification signed by White, but both the petition and its memorandum of points and authorities contain Dangler's signature, and are dated, in handwriting, November 26, 2003. The petition contains a proof of service dated December 17, 2003. Dangler initially testified he was uncertain whether the signature on the petition was his, but in later testimony he said he was sure he signed the petition.
(i) The Petition's Contemptuous Language
At pages 14 and 15, the petition states: "The Third District Court of Appeals [sic] ignored these findings of the trial court when they [sic] issued their [sic] rulings [sic]. The Appellate Court admitted that they [sic] did not have the authority to apply the felony murder rule to Petitioner because the deceased Gray was a co-conspirator to the January 17, 1992, robbery. (People v. White (1995) 35 Cal.App.4th 758, 763-764, 41 Cal.Rptr.2d 510.) Instead of dismissing the first-degree murder charge against Petitioner, the Third District Court of Appeals [sic] stepped in and held that the Petitioner was actually guilty of `implied malice' because of the acts of the Petitioner and co-Defendant Herbert. (Ibid.) Further, the Court opined that the use of the felony murder rule this [sic] was `harmless error.' (Ibid.) Thus, the *460 Third District Court of Appeals [sic] ameliorated the effects of the malpractice of the District Attorney at the expense of `logic' and reputation of the California Courts. Instead of demonstrating a `neutral' posture, the Third District Court of Appeals [sic] bent over backward to come to the aid of a fallen comrade, which is the San Joaquin County District Attorney. The California Appellate Courts are paying a high price for the loss of reputation when they abjectly and blindly side with the District Attorney despite the fact that the wounds the District Attorney sustained were entirely self-inflicted. The decision of the Third District Court of Appeals [sic] was not based on logic; it was based on a need to shore up the District Attorney's mistakes."
Dangler concedes this language constitutes contempt of court.
(ii) The Petition's Contentions
The petition sets out 25 contentions that are organized under 10 captions numbered roman numerals II to XI, discussed below.
In most respects, the petition filed in this court is the same as the petition filed on White's behalf in the superior court, but there are several differences. The table of contents pages are formatted and lettered differently. The table of contents page for the petition filed in this court contains an additional argument at VIII.C, regarding the population of San Joaquin County, yet that argument is not included in the body of the petition filed in this court. Although the petition filed in the superior court contains arguments why it is not time-barred, the petition filed in this court contains a template for such arguments but no substantive arguments (see discussion, post).
The petition filed in the superior court had 64 footnotes, many of them lengthy, all of which were removed from the petition filed in this court. The petition filed in this court contains a substantial modification of a claim made in the superior court that trial counsel was ineffective for failing to test the contents of a certain piece of evidence. A claim of ineffective assistance of trial counsel in failing to investigate a witness named Rossiter was added to the petition filed in this court. And the petition filed in this court argues we should issue a subpoena duces tecum, another contention that was not included in the petition filed in the superior court.
Most significantly, although the petition filed in the superior court contains the verbatim contemptuous language found on pages 14 and 15 of the petition filed in this court, the petition filed in the superior court includes a cite to "(Exhibit DDD, Appellate Opinion, hereafter, `Exhibit DDD')" at the end of the first sentence of the passage, while that cite has been deleted from the contemptuous language in the petition filed in this court.
And, the petition filed in this court includes an additional argument addressing the superior court's order denying the petition. This additional argument repeats an edited version of the language that Dangler concedes is contemptuous.
(b) Dangler's Concession that the White Petition is Frivolous
During the hearing on the OSCs, Dangler repeatedly conceded that the contentions raised in the White petition are patently frivolous in that they indisputably have no merit (In re Marriage of Flaherty, supra, 31 Cal.3d at p. 650, 183 Cal.Rptr. 508, 646 P.2d 179), and further conceded that he can be ordered to pay monetary sanctions deemed appropriate by this court for his filing the frivolous petition.
*461 As previously noted, Dangler admits he was paid $7,250 to represent White in the habeas corpus proceedings.
(c) His Defense to the Charge of Contempt
As we have noted, Dangler concedes that the language quoted above (pt. 7(a)(i), ante) is contemptuous, and he apologizes for its presence in the White petition. However, he argues he cannot be held in contempt of court because, although he signed the petition, he did not know the contemptuous language was included in it.
According to Dangler's testimony, the contemptuous language was drafted by Locke and included in the superior court petition; Livingston reviewed the case for refiling in this court, added an argument to the end of the brief, and incorporated the contemptuous language into the petition filed in this court, but neglected to read the contemptuous language; and Tsang, the writ manager at the time who was responsible for reviewing all petitions, either neglected to do so in this case or neglected to inform Dangler of the contemptuous language.
After being confronted with the fact someone made numerous changes to the writ petition that had been filed in the superior court before it was "refiled" in this court, including editing the contemptuous passage (as outlined above), Dangler speculated that the changes were made either by Haddix, Livingston, or Tsang.
Haddix, of course, could not have made the changes because he left his employment with Dangler before the petition was filed in the superior court.
Livingston testified that at the time she worked on the petition for filing in this court, she was a law student awaiting the results of the State Bar examination. According to Livingston, to prepare the petition for "refiling" in this court, she followed her usual practice of incorporating the language from the petition filed in the superior court, reading the superior court's order denying the petition, and adding one final argument to the petition to address the superior court's reasons. She claimed that although she incorporated the superior court writ petition into the petition to be "refiled" in this court, she did not read the entire petition, and that in drafting the final argument, she simply copied language from earlier portions of the petition and pasted that language into the final argument, again without reading the language.[18] As to the numerous differences between the petition filed in this court and the petition filed in the superior court, Livingston suggested that they were likely the result of her using a nonfinal draft of the superior court petition, found on the office computer, when she prepared the petition for "refiling" in this court. Although she earlier testified that the petitions she prepared usually were read by an attorney, who sometimes would make changes, Livingston opined that Tsang, the writ manager, made no changes to the White petition filed in this court because if Tsang had done so, she would have told Livingston.
Tsang testified she was still the writ manager on November 26, 2003, the date Dangler signed the White petition for filing in this court. Claiming her job duties as writ manager did not include reading all of the petitions drafted by law students, Tsang denied reading or working on the White petition. She testified that if she had read the petition, she immediately would have recognized that the language *462 on pages 14 and 15 was contemptuous and she would have changed it.
8. Dangler's Representation of Pena in This Court
On March 5, 2004, while the White petition was pending in this court but before he was served with the OSC in that proceeding, Dangler filed a petition for writ of habeas corpus on behalf of Melvin Richard Pena, in case No. C046271. The petition and attached memorandum of points and authorities contain Dangler's signature. They raise two contentions, both of which were rejected on Pena's direct appeal. As described below, one part of the Pena petition plagiarizes from the appellant's opening brief drafted by another attorney in Pena's direct appeal, and another part of the petition relies on appellate authority that has been overruled.
(a) His Concession that the Pena Petition is Frivolous
During the hearing on the OSC in the White proceeding, this court served Dangler with an OSC why he should not be ordered to pay monetary sanctions for filing a frivolous petition on behalf of Pena.
Dangler concedes that the contentions raised in the Pena petition are patently frivolous in that they indisputably have no merit, and further concedes that he can be ordered to pay monetary sanctions deemed appropriate by this court for his filing the frivolous petition. He presented no evidence as to who drafted the petition and whether he read it before signing the petition.
Dangler admits he was paid $7,250 to represent Pena in the habeas corpus proceedings.
9. Dangler's Representation of Harris-Anderson in This Court
On April 21, 2004, about a month after this court served him with the OSC in the White proceeding, Dangler filed a habeas corpus petition on behalf of Renee Harris-Anderson, in case No. C046677. The petition and its memorandum of points and authorities contain Dangler's signature. Among other things, discussed below, the petition misrepresents the appellate record and relies on overruled appellate authority.
(a) His Concession that the Harris-Anderson Petition is Frivolous
During the hearing on the OSC in the White proceeding, this court served Dangler with an OSC why he should not be ordered to pay monetary sanctions for filing a frivolous petition on behalf of Harris-Anderson.
Dangler concedes that the contentions raised in the Harris-Anderson petition are patently frivolous in that they indisputably have no merit, and further concedes that he can be ordered to pay monetary sanctions deemed appropriate by this court for his filing the frivolous petition. He presented no evidence as to who drafted the petition and whether he read it before signing the petition.
Dangler admits he was paid $7,250 to represent Harris-Anderson in the habeas corpus proceedings.
10. Dangler's Resignation From the State Bar
On May 26, 2004, during the hearing on the OSCs, Dangler asked us to discharge the OSC re contempt in the interests of justice because, he said, he intended to resign immediately from the State Bar.
Dangler was advised that this court has no authority over his status as a member of the State Bar and that the purpose of the proceedings on the OSCs is not to require him to resign from the State Bar. Dangler acknowledged that his decision to *463 resign was his own idea and that he had made this decision knowingly, intelligently, and voluntarily, after a full opportunity to consult with counsel, and with no coercion by this court.
Dangler has subsequently presented us with an order of the California Supreme Court, filed on August 4, 2004, which specifies, "The voluntary resignation of RICHARD HALE DANGLER, JR., State Bar No. 133362, as a member of the State Bar of California is accepted without prejudice to further proceedings in any disciplinary proceeding pending against [Dangler, i.e., State Bar Court Case No. 04-Q-12632] should he hereafter seek reinstatement," and which orders him to comply with the duties imposed upon a person who resigns from the State Bar. (Cal. Rules of Court, rule 955.)
11. Continuance for Further Evidence and Argument
At the conclusion of the hearing on May 26, 2004, this court stated that in light of Dangler's intention to voluntarily resign from the State Bar, we would, in the interests of justice, discharge the OSC re contempt upon the conclusion of these proceedings.
We then continued the hearing for one month to allow Dangler to present any additional evidence or argument he may have regarding the imposition and amount of sanctions for the filing of these three frivolous petitions for writs of habeas corpus.
On June 30, 2004, Dangler presented argument but no additional evidence, and the matter was taken under submission.
CONTEMPT
We accept Dangler's concession that the above quoted language included at pages 14 to 15 of the White petition filed in this court is contemptuous.
"[I]t is the settled law of this state that an attorney commits a direct contempt when he impugns the integrity of the court by statements made in open court either orally or in writing. [Citations.] Insolence to the judge in the form of insulting words or conduct in court has traditionally been recognized in the common law as constituting grounds for contempt. [Citation.]" (In re Buckley (1973) 10 Cal.3d 237, 248, 110 Cal.Rptr. 121, 514 P.2d 1201, fn. omitted.) "[T]he power of a court to punish by contempt an act which impugns its integrity exists independent of statute." (Id. at p. 248, fn. 14, 110 Cal.Rptr. 121, 514 P.2d 1201.) Thus, it is not necessary that the contemptuous statement interrupted the due course of a trial or other judicial proceeding. (Ibid.)[19]
Accordingly, it is contemptuous for an attorney to say or imply that the court knows the law but has deliberately chosen not to follow it. (See, e.g., In re Buckley, supra, 10 Cal.3d at p. 250, 110 Cal.Rptr. 121, 514 P.2d 1201 [upholding contempt finding against attorney who said in open court, "`This Court obviously doesn't want to apply the law'"].) It is likewise contemptuous for an attorney or *464 party to make the unsupported assertion that the court is acting out of bias toward a party. (See, e.g., Hume v. Superior Court (1941) 17 Cal.2d 506, 510-511, 515, 110 P.2d 669 [attorney held in contempt for filing civil complaint and affidavit asserting the trial judge conspired with the Attorney General]; Blodgett v. Superior Court, supra, 210 Cal. at pp. 6-8, 15-16, 290 P. 293 [in propria persona plaintiff held in contempt for asserting in pleading that the trial judge acted corruptly in the interest of a party]; Sears v. Starbird (1888) 75 Cal. 91, 92, 16 P. 531 [appellant's opening brief contemptuously implied the judge acted "from a love of the parties or their counsel"]; McCann v. Municipal Court (1990) 221 Cal.App.3d 527, 538, 270 Cal.Rptr. 640 [attorney's statement to judge, "`you're not going to convict my client'," contemptuously implied the court had assumed the role of the prosecutor].)
The language included in the petition at pages 14 and 15 is contemptuous for the following reasons. The claim that, in its opinion affirming White's conviction, "[i]nstead of demonstrating a `neutral' posture, [this court] bent over backward to come to the aid of a fallen comrade, which is the San Joaquin County District Attorney" directly implies this court acted out of bias toward a party. The assertion that the court "blindly side[d] with the District Attorney" patently makes the unfounded assertion that the court acted out of bias toward a party. The assertion that the court's decision "was not based on logic; it was based on a need to shore up the District Attorney's mistakes," implies both that the court knowingly ignored the law and that it acted out of bias toward a party. And the assertion that the court "ameliorated the effects of the malpractice of the District Attorney at the expense of `logic' and reputation of the California Courts" implies that the court did not follow the law because of bias toward a party.
Dangler's defense is premised on (1) his claim that an attorney cannot be held in contempt for language in a written document signed by the attorney and filed in a court if the attorney did not read the document and, thus, did not know the contemptuous language was included in it, and (2) his alleged ignorance of the contemptuous language in the White petition for this reason.
We need not determine whether this is a correct statement of the law or decide whether Dangler's claimed ignorance is credible. Because Dangler has resigned from the State Bar, we will, in the interests of justice, discharge the OSC re contempt.
SANCTIONS FOR FILING FRIVOLOUS PETITIONS
"On a party's or its own motion, a Court of Appeal may impose sanctions, including the award or denial of costs, on a party or an attorney for: [¶] (A) taking a frivolous appeal or appealing solely to cause delay; [¶] (B) including in the record any matter not reasonably material to the appeal's determination; or [¶] (C) committing any other unreasonable violation of these rules." (Cal. Rules of Court, rule 27(e)(1); further rule references are to the California Rules of Court.) Rule 27(e) is derived without substantive change from former rule 26(e), and now expressly recognizes the court's authority to impose sanctions on its own motion. (Judicial Council of Cal., Advisory Com. com. (2003), reprinted at 23 pt. 1, West's Ann.Codes, Rules (2004 Supp.) foll. rule 27, pp. 138-139.)
Because rule 53 makes "[t]hese rules" applicable to original proceedings, former rule 26 (now rule 27) extends to original writ petitions filed in the Court of Appeal. (Jones v. Superior Court (1994) 26 Cal. *465 App.4th 92, 96-97, 31 Cal.Rptr.2d 264.) The authority to impose sanctions under rule 27(e) is independent of Code of Civil Procedure section 907. (Id. at p. 96, 31 Cal.Rptr.2d 264.)[20]
This court may find a writ petition to be frivolous and order sanctions if we conclude the petition was prosecuted for an improper motive or the petition is indisputably without merit, i.e., any reasonable attorney would agree the petition is completely without merit. (In re Marriage of Flaherty, supra, 31 Cal.3d at p. 650, 183 Cal.Rptr. 508, 646 P.2d 179.)
Dangler concedes that sanctions can be imposed against him for filing these three frivolous habeas corpus petitions. We accept his concession, but do not do so lightly. Courts must be careful not to deter, for fear of personal liability, an attorney's vigorous assertion of an inmate's rights. (In re Marriage of Flaherty, supra, 31 Cal.3d at p. 647, 183 Cal. Rptr. 508, 646 P.2d 179.) Thus, sanctions should be imposed sparingly, in only the most egregious case, so as not to discourage use of the Great Writ. And we are mindful it is not easy to obtain a writ of habeas corpus. Particularly when a criminal conviction has been affirmed on appeal, the petitioner faces a steep uphill battle in collaterally attacking that judgment. The petitioner has the burden of stating a prima facie case for relief, and the burden of proving the facts upon which the claim is based. (In re Bower (1985) 38 Cal.3d 865, 872, 215 Cal.Rptr. 267, 700 P.2d 1269.) Moreover, a contention may be barred procedurally because it is untimely, repetitive, or raises issues that were, or could have been, raised on direct appeal. (In re Clark, supra, 5 Cal.4th at pp. 765, 767, 21 Cal.Rptr.2d 509, 855 P.2d 729; In re Harris (1993) 5 Cal.4th 813, 829, 21 Cal. Rptr.2d 373, 855 P.2d 391.) Hence, we do not necessarily equate the failure to obtain habeas corpus relief with frivolousness, or with incompetence of the attorney representing the petitioner.
But here we are presented not just with writ petitions that fail to state a prima facie case for relief or raise contentions that are procedurally barred; we have been required to address petitions that grossly and repeatedly misrepresent both the law and the facts of the cases, causing this court to divert its time and resources from legitimate matters to respond to contentions that no reasonable attorney would have raised.
1. The White Petition is Patently Frivolous
Having examined at length the petition for writ of habeas corpus submitted by Dangler on behalf of Jackie Don White, we find each of its 25 contentions to be patently frivolous. Because Dangler himself concedes the petition is frivolous, it is not necessary to discuss every contention. We write further simply to highlight a few of the most egregious aspects of the petition.
(a) Frivolous Contentions Regarding Procedural Bars
Jackie Don White was convicted of murder and other offenses, and was sentenced in May 1993. This court affirmed the judgment on appeal in June 1995, in a published opinion. (People v. White (1995) 35 Cal.App.4th 758, 41 Cal.Rptr.2d 510.)
In October 1999, White filed in this court a pro se habeas corpus petition raising *466 19 separate contentions regarding his conviction, which this court denied in December 1999. (In re White, C033987.)
More than 10 years after White's conviction, Dangler filed the instant habeas corpus petition in this court. It is procedurally barred because it is untimely. The petition also is successive and repetitive, and raises contentions that were, or could have been, raised on direct appeal. The petition is without merit because of these procedural bars. And it is patently frivolous in the manner in which it addresses the procedural bars.
A petition for writ of habeas corpus must explain and justify any significant delay in seeking relief. (In re Clark, supra, 5 Cal.4th at p. 765, 21 Cal.Rptr.2d 509, 855 P.2d 729 (hereafter Clark).) An exception to the rule barring untimely petitions applies where the petitioner shows "error of constitutional magnitude led to a trial that was so fundamentally unfair that absent the error no reasonable judge or jury would have convicted the petitioner." (Id. at p. 797, 21 Cal.Rptr.2d 509, 855 P.2d 729.)
The White petition filed by Dangler contends it is not barred as untimely, in part, because it raises claims of ineffective assistance of trial and appellate counsel, which are errors of constitutional magnitude meeting the exception set out in Clark.
But in fact, the petition tenders no cognizable claim of ineffective assistance of appellate counsel. Although it contains a boilerplate assertion that appellate counsel was ineffective, it leaves ellipses where the arguments regarding ineffectiveness of counsel should have been inserted. We quote the petition in this respect: "[Petitioner] received ineffective assistance of appellate counsel, when his appellate counsel: (a) failed to ...; (b) failed to raise ...; and (c) ...." Amazingly, the petition omits any references to how appellate counsel purportedly was ineffectivean omission that dooms the claim of error.
And the petition's seven claims of ineffective assistance of trial counsel duplicate nearly verbatim the claims that were raised and rejected in the pro se habeas corpus petition filed by White in 1999.[21]
In addition, the petition fails to address why it is not barred given that the vast majority of the contentions raised in the petition either were, or could have been, raised on direct appeal. All of the 15 contentions raised at pages 12 to 78 of the petition are based entirely on matters contained within the appellate record, and thus could have been raised on appeal. And the petition repeats two contentions that were rejected on direct appeal, i.e., the claim the evidence of the commission of provocative acts was insufficient, and the claim the trial court erred in admitting evidence that petitioner may have lied at his preliminary examination in asserting he was not present at the scene of the crimes. (See People v. White, supra, 35 Cal.App.4th at pp. 765-768, 770-773, 41 Cal.Rptr.2d 510.)
Any reasonable attorney familiar with the facts and the law would have recognized Dangler's contentions regarding procedural bars are indisputably without merit.
(b) Frivolous Contentions Based on Misrepresentations
The case against White was tried under the "provocative act" murder theory. In *467 its published opinion on appeal, this court pointed out that the felony-murder doctrine does not apply when, as in the case against White, an accomplice is killed by a crime victim. (People v. White, supra, 35 Cal.App.4th at pp. 763-765, 41 Cal.Rptr.2d 510.) And the decision concluded that the case against White was properly tried as a provocative act murder. (Id. at pp. 765-770, 41 Cal.Rptr.2d 510.)
Several contentions in the White petition are premised on the misrepresentation that the trial court erroneously instructed the jury with felony-murder rule instructions. This assertion is patently false. The trial court instructed the jury with CALJIC No. 8.12, the provocative act murder instruction, and did not give a felony-murder instruction. No one requested a felony-murder instruction (CALJIC No. 8.21). Indeed, the People argued to the jury only the provocative act theory, that White was responsible for the death of his accomplice, Gray, because one of the victims of the attempted robbery and burglary, Byrd, was reasonably provoked by White's acts into killing Gray. White's provocative acts included using a stun gun on the victims Byrd and Martz, striking Martz in the face near the right eye, and forcing the men onto the floor in a vulnerable position. Finally, this court did not find the trial court committed harmless error in instructing on felony murder; the decision's sole reference to the felony-murder doctrine was the statement that felony murder is not invoked when an accomplice is killed by a victim or peace officer. (People v. White, supra, 35 Cal.App.4th at pp. 763-764, 41 Cal.Rptr.2d 510.)
The White petition contains numerous other misrepresentations of fact and law.
For example, claiming the trial court committed "Wheeler error" (People v. Wheeler (1978) 22 Cal.3d 258, 148 Cal. Rptr. 890, 583 P.2d 748), the petition premises this contention on the assertion that the court excused from the jury an African-American juror identified as Ms. Dunham. But the appellate record plainly shows that Dunham served on the jury.
In another glaring example, the petition claims the prosecutor was guilty of misconduct for "plant[ing]" Jamie Lee Williams as a witness. But the appellate record shows that no such person was called as a witness.
The petition claims the trial court misinstructed the jury on the provocative act doctrine because the instructions did not explain the difference between an act necessary to perpetrate robbery and a provocative act, and did not indicate that the acts of the deceased accomplice could not be considered as provocative acts. But the appellate record clearly shows the jury instructions did explain that the provocative act must be beyond the acts necessary to commit the crime itself, and did indicate that the deceased accomplice's acts could not be considered provocative acts.
In another contention concerning the provocative act doctrine, the petition relies on the decision in People v. Antick (1975) 15 Cal.3d 79, 123 Cal.Rptr. 475, 539 P.2d 43 for the proposition that the surviving accomplice's provocative acts may not be imputed to the defendant. In fact, Antick holds just the opposite. (Id. at pp. 88-89, 123 Cal.Rptr. 475, 539 P.2d 43.)
And the petition repeatedly asserts that the jury improperly imputed to White the malicious acts committed by his accomplice, Gray, who was shot and killed during the offenses. This contention ignores that the jury was instructed it could not use provocative acts committed solely by Gray as a basis for finding White guilty of murder.
*468 Any reasonable attorney familiar with the facts and the law would have recognized Dangler's contentions based on the aforesaid misrepresentations are indisputably without merit.
2. The Pena Petition is Patently Frivolous
Dangler concedes that the habeas corpus petition he filed on behalf of Melvin Richard Pena is patently frivolous. Having reviewed the petition at length, we agree. We write further to emphasize the especially egregious nature of this petition.
Pena was convicted of failing to notify authorities of a change of address by a registered sex offender (Pen.Code, § 290, subd. (f)). The trial court found true three prior serious felony convictions under the "three strikes law," and sentenced Pena to 25 years to life.
On February 25, 2000, this court affirmed the judgment on appeal, in an unpublished opinion, rejecting Pena's contentions that (1) Penal Code section 290 is unconstitutionally vague as applied to him, given the statute's failure to define "residence"; and (2) his sentence is cruel and unusual under the state and federal Constitutions. (People v. Pena (Feb. 25, 2002, C031169) [nonpub. opn.].)
On May 10, 2000, the California Supreme Court denied Pena's petition for review, which raised the same two contentions rejected by this court (S087139).
On October 10, 2000, the United States Supreme Court denied Pena's petition for writ of certiorari, in which Pena again raised the same two contentions (99-10098).
On March 5, 2004, nearly six years after Pena's conviction, Dangler filed a habeas corpus petition in this court on Pena's behalf. The petition raises the same two contentions this court rejected more than four years ago, and which were denied review by the California Supreme Court and United States Supreme Court.
Even more troubling is that much of the petition's argument asserting that Penal Code section 290 is unconstitutional was copied nearly verbatim from Pena's opening brief on appeal. That brief, filed in Pena's direct appeal in this court, was written by Attorney Christopher Blake, who was appointed to represent Pena on appeal. Thus, for the most part, Dangler simply plagiarized Blake's argument from Pena's prior unsuccessful opening brief on appeal, changing the green cover used for an appellant's opening brief to the red cover used for a writ petition.
The petition's cruel and unusual punishment argument deviates somewhat from the analysis of Pena's appellant's opening brief, in that the petition rests much of its analysis on two Ninth Circuit Court of Appeals decisions that were reversed by the United States Supreme Court before Dangler filed the Pena habeas corpus petition in this court. (Andrade v. Attorney General of State of California (9th Cir. 2001) 270 F.3d 743 (hereafter Andrade), rev. in Lockyer v. Andrade (2003) 538 U.S. 63, 123 S.Ct. 1166, 155 L.Ed.2d 144; Brown v. Mayle (9th Cir.2002) 283 F.3d 1019, vacated and remanded in Mayle v. Brown (2003) 538 U.S. 901, 123 S.Ct. 1509, 155 L.Ed.2d 220, and then reversed by the Ninth Circuit in June 2003 in an unpublished opinion (see 66 Fed.Appx. 136).) Thus, it is apparent Dangler was unaware that the authority on which he relied had been overruled.
Any reasonable attorney familiar with the facts and the law would have recognized Dangler's contentions in the Pena petition are indisputably without merit.
3. The Harris-Anderson Petition is Patently Frivolous
Dangler concedes that the habeas corpus petition he filed on behalf of Renee *469 Harris-Anderson is patently frivolous. Having reviewed the petition at length, we agree.
In February 1999, Harris-Anderson pled no contest to three counts of robbery, admitted several sentencing enhancements, and admitted one prior serious felony conviction charged under the three strikes law, with the understanding that other charges would be dismissed, she would receive a stipulated sentence of 25 years in prison, and she would be allowed to challenge on appeal the trial court's denial of her "Boykin-Tahl" motion.[22]
In March 2000, this court decided Harris-Anderson's appeal, held that the Boykin-Tahl issue was cognizable on appeal despite her no contest plea, and remanded the matter to the trial court with directions to conduct an evidentiary hearing on her Boykin-Tahl motion. (People v. Harris (Mar. 8, 2000, C031953) [nonpub. opn.].)
On April 21, 2004, more than five years after Harris-Anderson's conviction, Dangler filed a habeas corpus petition in this court on her behalf.
Among other things, the petition contends Harris-Anderson's trial attorney was ineffective for misadvising her that she could raise the Boykin-Tahl issue on appeal. The contention completely overlooks this court's holding that she could raise the issue on appeal, a holding that fatally undermines the premise of Dangler's claim of error.
The petition also asserts that Harris-Anderson's sentence of 25 years in prison is cruel and unusual punishment, in part because it constitutes a sentence of life in prison without parole, and also based upon the Ninth Circuit Court of Appeals' decision in Andrade (see discussion, ante).) This claim of error misrepresents the facts (Harris-Anderson was not sentenced to a life sentence, and she had stipulated to the sentence in order to avoid further punishment on other charges) and misrepresents the law (Andrade was reversed by the United States Supreme Court before Dangler filed the Harris-Anderson habeas corpus petition in this court). Once again, Dangler demonstrated he was unaware that the authority on which he relied had been overruled.
The remaining contentions of the petition are that Harris-Anderson's trial attorney failed to advise her of her right to a trial on the prior conviction allegations; her appellate attorney was ineffective for not raising on appeal claims of ineffective assistance of trial counsel; the trial court erroneously denied her motion for new counsel; and the trial court failed to advise her of her right to a hearing regarding her prior convictions. Each of these contentions is belied by the appellate record.
Any reasonable attorney familiar with the facts and the law would have recognized Dangler's contentions in the Harris-Anderson petition are indisputably without merit.
4. Dangler's Arguments on Mitigation of the Amount of Sanctions
During the hearing on the OSCs, Dangler argued that the amount of sanctions, which he concedes he should pay, should be mitigated for the following reasons: (1) his poor health; (2) his having made provisions for "writ managers" to supervise the *470 work of his non-attorney staff; (3) his financial inability to pay, particularly given that he has now resigned from the State Bar; (4) letters from members of the State Bar and other citizens who attest to good work he performed in his bankruptcy practice; and (5) his claim that much of this court's time and resources in these proceedings have been spent on the contempt charge, rather than the sanctions charge, because Dangler concedes the three habeas corpus petitions are frivolous.
Although he suffered from serious health problems, Dangler neither argued nor presented evidence that those problems precluded him from understanding his professional and ethical obligations. His health problems provide no excuse for his admittedly signing numerous habeas corpus petitions, including the White petition, without reading them. His health problems provide no excuse for his authorizing a paralegal to sign his name on habeas corpus petitions that Dangler did not read. His health problems provide no excuse for his allowing law students to prepare and file habeas corpus petitions without attorney supervision.
Moreover, the evidence presented by Dangler indicates his debilitating spinal infection had not yet rendered him bed-ridden at the time he filed the White petition in this court, and he had recovered from the infection long before he filed the Pena petition and the Harris-Anderson petition in this court. Indeed, Dangler presented no evidence as to the circumstances of the preparation and filing of the Pena and Harris-Anderson petitions. Nor did he present evidence that his health problems played a role in the frivolousness of those petitions.
We give no credence to Dangler's contention that the amount of sanctions should be mitigated because he employed writ managers to supervise the work of law clerks. Evidence shows he employed suspended attorneys, Locke and Wagner, without notifying the State Bar; he did not provide attorney supervision for his law students during extended periods of time; he allowed law students to prepare and file habeas corpus petitions with no attorney supervision; he employed as his writ managers recent admittees to the State Bar who were not sufficiently experienced to provide supervision and who were not even willing to sign the habeas corpus petitions they purportedly supervised; and he either did not require his writ managers to read petitions drafted by law students or did not adequately communicate that requirement to his writ managers.[23]
In any event, it is undisputed that a law student, Livingston, redrafted the White petition for filing in this court, without attorney supervision, and that Dangler signed the petition without reading it. And Dangler presented no evidence that anyone other than he was responsible for the frivolous contentions in the Pena and Harris-Anderson petitions.
In sum, Dangler deserves no credit for being such a deplorable supervisor and *471 disgraceful role model to the law students and the young attorneys he employed.
Dangler has presented no evidence of financial inability to pay monetary sanctions. He testified he had no personal income in 2002, other than a "pension" paid him by Rector, and he received no money from his writ practice in 2003 because his practice was "going in the hole." But he did not introduce any financial records to substantiate his testimony, and he did not present any evidence regarding his financial holdings.
We find that Dangler's testimony about his ability to pay monetary sanctions lacks credibility, in part because evidence presented at the hearing on the OSCs shows that, during the past few years, he has collected $7,250 each from at least 100, perhaps more, habeas corpus petitioners or family members, and that after paying law students or lawyers who actually worked on the petitions, he has kept for himself close to $5,000, less other overhead costs, from each $7,250 retainer.
The letters Dangler provided us from members of the State Bar regarding his conduct and practice in bankruptcy proceedings, and his good moral character, ring hollow in light of the shameful habeas corpus practice that he maintained.
We agree with Dangler that the time the justices and staff of this court have spent in the examination of the contempt charge should not be considered in determining the amount of sanctions. However, the time spent prior to his concession that the petitions are frivolous is relevant to determining the amount of sanctions. And the time spent with respect to the hearing on the OSCs is directly relevant to evaluating Dangler's claim that these frivolous petitions were sui generis, in evaluating aspects of his defenses regarding the amount of sanctions, and in understanding the reasons for his filing patently frivolous petitions in this court.
Accordingly, we conclude that $25,000 is a reasonable and responsible monetary sanction to compensate this court in part for the cost of processing, reviewing, and deciding the writ petitions and the orders directing Dangler to show cause why sanctions should not be imposed.
DISPOSITION
Having found that the petitions for writs of habeas corpus in In re White, C045684, In re Pena, C046271, and In re Harris-Anderson, C046677, fail to state a prima facie case for relief, we deny them without prejudice. We further order that each petitioner may file a new petition for writ of habeas corpus in the superior court, and that the period of time between the date the petitioner retained Dangler and the date upon which this decision becomes final will not be counted against the petitioner with respect to the delay in filing a new habeas corpus petition in the superior court.
Having found that the three petitions for writs of habeas corpus are patently frivolous, in that they indisputably have no merit, we order the attorney for petitioners, Richard H. Dangler, Jr., to (1) within 30 days after this opinion becomes final, refund in full $7,250 to Ralph Whitethe amount of the retainer for filing habeas corpus petitions on behalf of Jackie Don Whiteand file with this court written proof, under penalty of perjury, that Dangler has done so, (2) within 30 days after this opinion becomes final, refund in full $7,250 to the person from whom Dangler or his office received the retainer to file habeas corpus petitions on behalf of Melvin Richard Pena, and file with this court written proof, under penalty of perjury, that Dangler has done so, (3) within 30 *472 days after this opinion becomes final, refund in full $7,250 to the person from whom Dangler or his office received the retainer for the habeas corpus petitions for Renee Harris-Anderson, and file with this court written proof, under penalty of perjury, that Dangler has done so, and (4) within 30 days after this opinion becomes final, pay to this court $25,000 in monetary sanctions to compensate the court in part for the cost of processing, reviewing, and deciding the writ petitions and orders to show cause why sanctions should not be imposed; this payment must be made in full to the court's Clerk/Administrator, unless within 30 days after this opinion becomes final, Dangler and the Clerk/Administrator agree in writing to a specific plan for the payment of this sanction in installments.
The order to show cause re contempt is discharged in the interests of justice.
This opinion constitutes a written statement of our reasons for imposing sanctions. (Bach v. County of Butte (1989) 215 Cal.App.3d 294, 313, 263 Cal.Rptr. 565.) Pursuant to the requirements of Business and Professions Code section 6086.7, subdivision (a)(3), a copy of this opinion will be sent to the State Bar of California.
NOTES
[*] Arthur G. Scotland, P.J., George Nicholson and Harry E. Hull, Jr., JJ.
[1] He also maintained a bankruptcy practice in federal courts.
[2] Dangler also testified that he achieved favorable results for habeas corpus clients in 13 cases in other state and federal courts.
[3] Case Nos. C014919, C015426, C015763, C018983, C019601, C021809, C026503, C026878, C027005, C027078, C027113, C027226, C028162, C028387, C029938, C031021, C031581, C032001, C033144, C033555, C034498, C035068, C036434, C037125, C037289, C037490, C037619, C037897, C037932, C040214, C042015, C042520, C042677, C043486, C043487, C043489, C043887, C044019, C044312, C044380, C044750, C045540, C045541, C046095, C046267, C046329, C046444.
[4] Dangler filed a reply to the Attorney General's opposition, but the reply simply repeated and expanded on a meritorious issue identified in the pro se habeas corpus petition.
[5] In the hearing on the OSCs, Dangler raised a due process objection, asserting we "blindsided" him with evidence about his legal career and practice. The objection has no merit. The pleadings and opinions filed by this court are public matters, of which both Dangler and this court were obviously aware. And Dangler put his legal career and practice at issue by falsely testifying he had never before been notified by a court that he had filed a frivolous petition or other pleading, and further testifying that he had obtained favorable results for a number of his habeas corpus clients and introducing a list of every habeas corpus petition he had filed in this court.
[6] We take judicial notice of the record in People v. Lepeilbet, C033832.
[7] This court was unable to obtain any evidence from Locke regarding his work on the petition, and Dangler's knowledge thereof, because Locke is deceased.
[8] See Dangler's Prior Contempt Hearing in This Court, ante.
[9] Dangler testified he was unaware that Locke was suspended by the State Bar. But Brian Haddix, one of the law students whom Dangler hired as law clerks, testified he remembers hearing through "general office talk" that Locke was suspended from the practice of law.
[10] It appears that Locke worked on the White petition while he was suspended from the practice of law. Haddix, who worked for Dangler from February to August 2002, testified he never met Locke, who was not in the office, "was already on his way out when [Haddix] got there," and "wouldn't be returning." Haddix was sent into Locke's office to retrieve completed habeas corpus petitions from Locke's computer, which Haddix would then prepare for filing. Another law clerk, who started working for Dangler in May 2002, also testified Locke was not working in the office at that time.
[11] See footnote 9, ante.
[12] Thomas initially testified Dangler hired him in September 2002, but he later recalled he started working for Dangler in September 2001, at the time of the terrorist attacks on the World Trade Center.
[13] The only substantive discussion Thomas recalled having with Dangler about a habeas corpus petition occurred when a hearing in federal district court was scheduled. Dangler gave Thomas a brief overview of the substance of the habeas corpus petition and asked him to help Roman Rector prepare to appear at the hearing because Dangler was ill.
[14] We take judicial notice of records of the State Bar, posted on its official website, which show Christopher Roman Rector, State Bar No. 212244, was admitted to practice law in California on January 10, 2001, and he is employed by the Law Office of C. Roman Rector, at 3102 "O" Street, Sacramento. [http:// members.calbar.ca.gov/search/member_detail.aspx?x+212244] Dangler's law office also is located at 3102 "O" Street.
[15] Dangler testified he had attorneys working in his office between December 2002 and March 2003, and he had an attorney supervising the law clerks between December 2002 and May 2003. However, when pressed to identify any attorney he employed during this time period, Dangler was unable to name anyone, other than Roman Rector. Yet, Dangler conceded that Rector did not have either the knowledge or the experience to supervise persons working on habeas corpus petitions.
[16] Dangler testified that he charged between $8,000 and $8,500 in a few cases and $12,500 in one case, but that his customary retainer fee has been $7,250 for state court filings.
[17] Although the issue remains unsettled (see Vapnek et al., Cal. Practice Guide: Professional Responsibility (The Rutter Group 2003) ¶¶ 9:107-9:109, pp. 9-13 to 9-15), one court has held that an attorney's failure to maintain advance payment retainer fees in a separate client trust account until earned violates rule 4-100(A) of the State Bar Rules of Professional Conduct and, thus, constitutes a breach of fiduciary duty and professional negligence. (T & R Foods, Inc. v. Rose (1996) 56 Cal. Rptr.2d 41, 47 Cal.App.4th Supp. 1, 6-8.) In any event, Dangler's act of depositing his clients' payments into another law firm's general business account raises questions of other potential ethical and tax violations that are beyond the scope of this proceeding.
[18] We find Livingston's testimony that she incorporated the contemptuous language into the petition without reading it was not credible.
[19] The California Supreme Court has long held that the inclusion of a contemptuous statement in a document filed in a court is a contempt committed in the immediate presence of the court and thus constitutes a direct contempt. (See, e.g., In re Ciraolo (1969) 70 Cal.2d 389, 393, 74 Cal.Rptr. 865, 450 P.2d 241 [contemptuous affidavit]; Blodgett v. Superior Court (1930) 210 Cal. 1, 9, 290 P. 293 [contemptuous points and authorities filed in opposition to demurrer]; Lamberson v. Superior Court (1907) 151 Cal. 458, 459-460, 91 P. 100 [contemptuous affidavits; court also cites with approval finding of direct contempt in case involving contemptuous petition for rehearing filed in Supreme Court].)
[20] Authority to impose sanctions in habeas corpus proceedings does not derive from Code of Civil Procedure section 907, which extends, pursuant to Code of Civil Procedure section 1109, only to petitions for writs of mandate, prohibition, or review. (See Jones v. Superior Court, supra, 26 Cal.App.4th at p. 96, 31 Cal.Rptr.2d 264.)
[21] The petition additionally states its claims of prosecutorial misconduct and insufficiency of the evidence are not time-barred because they are errors of constitutional magnitude. However, the petition fails to explain why the specific prosecutorial misconduct claims rise to this level. Moreover, claims of insufficiency of the evidence are generally not cognizable on habeas corpus. (See, e.g., In re Lindley (1947) 29 Cal.2d 709, 723, 177 P.2d 918.)
[22] Harris-Anderson had filed a motion in the trial court to set aside the prior conviction allegations because, she alleged, she was convicted without being advised of her rights to a jury trial, to confront witnesses, and to refuse to testify. (Boykin v. Alabama (1969) 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274; In re Tahl (1969) 1 Cal.3d 122, 81 Cal.Rptr. 577, 460 P.2d 449.)
[23] The evidence is overwhelming that Dangler aided non-attorneys in the unauthorized practice of the law, in violation of his ethical obligations under the Rules of Professional Conduct of the State Bar of California, rule 1-300(A). (See also Bus. & Prof.Code, § 6127, subd. (b) [contempt to practice law when not an active member of the State Bar]; Bus. & Prof.Code, § 6126, subd. (a) [misdemeanor to practice law when not an active member of the State Bar]; Geibel v. State Bar (1938) 11 Cal.2d 412, 414, 422-424, 79 P.2d 1073 [attorneys aided unauthorized practice of law by signing without reading complaints prepared by unlicensed persons]; In re Valinoti (2002) 4 Cal. State Bar Ct. Rptr. 498, 2002 WL 31907316 [attorney aided nonattorneys in unauthorized practice of law by allowing them to prepare and file immigration applications, pleadings and other documents].)
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279 Pa. Superior Ct. 451 (1980)
421 A.2d 286
COMMONWEALTH of Pennsylvania, Appellant,
v.
Dennis GOLDWIRE.
Superior Court of Pennsylvania.
Submitted September 13, 1979.
Filed July 18, 1980.
*452 Steven H. Goldblatt, Deputy District Attorney, Philadelphia, for Commonwealth, appellant.
Neil P. Greenberg, Philadelphia, for appellee.
*453 Before CERCONE, President Judge, and WATKINS and HOFFMAN, JJ.
CERCONE, President Judge:
The Commonwealth appeals from the order of the lower court that granted appellee-defendant's post-trial motions and discharged defendant on the basis that his speedy trial rights under Pa.R.Crim.P. 1100 had been violated. We reverse the order of the lower court and remand for further proceedings.
Criminal complaints were filed against appellee on April 28, 1977 and May 6, 1977, charging him with robbery, conspiracy, assault, theft, and unauthorized use of an auto. According to Pa.R.Crim.P. 1100(a)(2),[1] the Commonwealth had to bring appellee to trial on these complaints by October 25, and November 6, 1977, respectively. Appellee's trial on both complaints began on December 1, 1977, which was outside the time period of the 180 day rule. Therefore, the burden rested on the Commonwealth to prove that the time beyond the 180 day period was properly excluded from the run period by the Commonwealth's timely filing of a petition to extend,[2] or by other exclusionary provisions of Rule 1100.[3]Commonwealth v. Clark, 256 Pa.Super. 456, 390 A.2d 192 (1978).
*454 Although the record is confused, the following sequence of events appears to have occurred in this case. On October 24, 1977, the Commonwealth originally filed two petitions for extensions of time as to both complaints. These were timely filed before the run date of October 25 as to the first complaint. Appellee did not file an answer to the petitions nor is there any indication or argument that appellee or his counsel were improperly served with a copy of these petitions. A hearing was held on November 4, 1977, and an extension granted until November 9, 1977.
On November 4, 1977, the Commonwealth petitioned for a second extension of time as to both cases. Once again, appellee failed to answer the petition. A hearing was allegedly held on November 28, 1977, and either the extension was granted or the hearing continued until December 2, 1977.[4] On December 1, 1977, trial began as to both complaints. On December 5, 1977, the third day of trial, defense counsel moved for a mistrial on the basis that Rule 1100 may have been violated. He contended that the record indicated that the Commonwealth's petition to extend filed on November 4 had been granted when, in reality, no extension was granted and the hearing on that petition had been continued until December 2, 1977. Defense counsel argued that this is why he had not contested the petition, since he expected to have that opportunity on December 2. The motion for mistrial was denied and appellee was convicted on all counts.
On December 14, appellee's counsel filed post-trial motions alleging detailed Rule 1100 violations. The lower court judge arrested judgment and ruled that the petitions for extension of time by the Commonwealth were improperly granted and that defendant's "failure to answer and deny petitions as general and empty as [those filed by the Commonwealth] meant nothing." Based on this finding, along with additional reasons as to why the extensions should not have been granted, the trial court discharged appellee.
*455 On appeal, the Commonwealth argues that any contention that Rule 1100 was violated has been waived by defense counsel's failure to either answer the Commonwealth's petitions for extension or file a petition to dismiss pursuant to Rule 1100(f). The rule itself and numerous cases support the Commonwealth's position. Rule 1100(f) provides that:
"(f) At any time before trial, the defendant or his attorney may apply to the court for an order dismissing the charges with prejudice on the ground that this Rule has been violated. A copy of such application shall be served upon the attorney for the Commonwealth, who shall also have the right to be heard thereon. Any order granting such application shall dismiss the charges with prejudice and discharge the defendant."
At no time was there an attempt to file a motion to dismiss pursuant to this rule. In such situations our court has held that failure to file a written motion, or orally move to dismiss, constitutes a waiver of the accused's right to a speedy trial under Rule 1100. Commonwealth v. Jackson, 261 Pa.Super. 355, 396 A.2d 436 (1978); Commonwealth v. Lewis, 253 Pa.Super. 442, 385 A.2d 420 (1978); Commonwealth v. Yancey, 251 Pa.Super. 478, 380 A.2d 880 (1977). This alone would be a sufficient basis to rest a decision for waiver and therefore a reversal of the lower court's order.
Additionally, defense counsel did not respond to the Commonwealth's two petitions to extend. In this situation our cases have also held that such failure acts as a waiver. Commonwealth v. Taylor, 473 Pa. 400, 374 A.2d 1274 (1977); Commonwealth v. Jackson, supra. Admittedly, the Commonwealth's form petitions are not to be condoned. Commonwealth v. Ray, 240 Pa.Super. 33, 360 A.2d 925 (1976). However, neither of these factors excuses defense counsel's failure to respond to the petitions to extend or at least register some objection at the hearings, regardless of how short they may have been.[5]Commonwealth v. Burton, 246 *456 Pa.Super. 498, 371 A.2d 946 (1977). Thus, for the reasons that defense counsel failed to answer or contest the Commonwealth's petition for extension and failed to file a petition to dismiss, any contention that defendant's speedy trial rights were violated was waived, Commonwealth v. Wilson, 258 Pa.Super. 231, 392 A.2d 769 (1978).
Appellant argues that if we make a finding of waiver, then his trial counsel was ineffective for failing to challenge the Commonwealth's petitions to extend the Rule 1100 period. His thrust in this argument is that the Commonwealth did not prove that it had been duly diligent in bringing appellant to trial and, therefore, the extensions should not have been granted.
The standard for determining whether counsel was ineffective is whether or not a particular course of action chosen by counsel had some reasonable basis designed to effectuate the client's interests. The test is not one of hindsight, but simply whether some reasonable basis existed. Commonwealth ex rel. Washington v. Maroney, 427 Pa. 599, 235 A.2d 349 (1967); Commonwealth v. Jackson, 262 Pa.Super. 151, 396 A.2d 690 (1978); Commonwealth v. Byrd, 250 Pa.Super. 250, 378 A.2d 921 (1977). When applying this standard to the case before us, we must first determine whether appellant's claim that the Commonwealth was not duly diligent in bringing him to trial was meritorious. If it was, then counsel may be deemed ineffective since it would appear that counsel would have no reasonable basis for failing to object to a meritorious speedy trial claim. Commonwealth v. Byrd, supra. However, if the claim is not meritorious, trial counsel was not required to raise a frivolous motion and consequently, his action, or inaction in this case, could not have been held to constitute ineffectiveness. Commonwealth v. Sherard, 483 Pa. 183, 394 A.2d 971 (1978).
*457 The record before us reveals that the Commonwealth filed "form" petitions to extend the time for trial which merely claimed the Commonwealth had been duly diligent in bringing appellant to trial. Although these petitions have been condemned, and conclusory allegations of due diligence will not support extensions of time, Commonwealth v. Antonuccio, 257 Pa.Super. 535, 390 A.2d 1366 (1978), there were hearings on the petitions for extension at which time the Commonwealth could have supported its allegations. Commonwealth v. Myers, 259 Pa.Super. 196, 393 A.2d 785 (1978). At these hearings, the judge merely looked at the recorded docket entries and found due diligence. The Commonwealth was not asked to come forward with any additional evidence other than the record itself since the petition was uncontested and unanswered. Now, however, the Commonwealth contends that it could have presented several arguments to support the extension, including judicial delay from July 8 through August 16, 1977, appellant's request that the suppression hearing judge recuse herself, and the subsequent delay in scheduling the trial after that. Allegedly, these facts were known to the Rule 1100 hearing judge as well as to appellant's trial counsel, but the record before us does not permit us to make a judgment on the merits of this contention. In light of the incompleteness and conflicting versions of facts allegedly known to the parties and counsel, we are constrained to remand to the lower court for clarification of the record and for an evidentiary hearing on the effectiveness of appellant's trial counsel, especially as to his particular knowledge of the circumstances surrounding the petitions to extend. Commonwealth v. Hubbard, 472 Pa. 259, 372 A.2d 687 (1977); Commonwealth v. Irwin, 254 Pa.Super. 166, 385 A.2d 578 (1978).
Order of the lower court reversed and case remanded.
NOTES
[1] Pa.R.Crim.P. 1100(a)(2) reads:
"Trial in a court case in which a written complaint is filed against the defendant after June 30, 1974 shall commence no later than one hundred eighty (180) days from the date on which the complaint is filed."
[2] Pa.R.Crim.P. 1100(c) reads:
"(c) At any time prior to the expiration of the period for commencement of trial, the attorney for the Commonwealth may apply to the court for an order extending the time for commencement of trial. A copy of such application shall be served upon the defendant through his attorney, if any, and the defendant shall also have the right to be heard thereon. Such application shall be granted only if trial cannot be commenced within the prescribed period despite due diligence by the Commonwealth. Any order granting such application shall specify the date or period within which trial shall be commenced."
[3] See, e.g., Rule 1100(d)(1) & (2).
[4] The Commonwealth brief states that the Rule 1100 hearing itself was continued until December 2. Since trial had already begun, consideration of the petition was never resumed. This discrepancy in the file is mentioned during the trial on December 5.
[5] We specifically note that defense counsel was present for the brief hearings on Rule 1100 and offered no testimony. This fact disallows the possibility that appellant or counsel was not properly notified of the hearing date which would constrain us to remand for an evidentiary hearing on that ground. Commonwealth v. Jones, 258 Pa.Super. 50, 391 A.2d 667 (1978); Commonwealth v. Wareham, 256 Pa.Super. 23, 389 A.2d 581 (1978).
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421 A.2d 1291 (1980)
Clyde CAMPBELL
v.
HEINRICH SAVELBERG, INC. and American Fidelity Company.
No. 405-79.
Supreme Court of Vermont.
September 9, 1980.
*1292 Gary R. Brown, Woodstock, for plaintiff.
Theriault & Joslin, Montpelier, for defendants.
Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.
DALEY, Justice.
This is a claim by a carpenter against his employer, Heinrich Savelberg, Inc., for benefits under our Workmen's Compensation Act, 21 V.S.A. ch. 9. Because the parties were unable to agree on compensation, claimant filed a "Notice and Application for Hearing" with the Commissioner of Labor and Industry. Id. § 663. This document alleged that claimant had suffered aggravation of preexisting pulmonary disease and a myocardial infarction from exposure to heavy varnish and paint fumes in a poorly ventilated workplace. After a hearing, the Commissioner issued findings, conclusions and an order which denied an award. Id. § 664. Claimant filed a timely appeal to the superior court, id. § 670, and the Commissioner certified three questions to the court, id. § 671. Because the second question deals with the extent of disability, an issue not contested on appeal, only questions one and three are relevant here:
1. Is the claimant's myocardial infarction a personal injury by accident under the Workmen's Compensation Act?
. . . . .
*1293 3. Was there aggravation of the claimant's pulmonary disease due to exertion and stress resulting from work in a poorly ventilated area in the presence of heavy varnish and paint fumes?
Both at the outset of the case and at the close of claimant's evidence, the employer moved to strike question # 3 essentially because it did not state a claim of personal injury by accident under the Workmen's Compensation Act. For the same reason, the employer also made a motion for a directed verdict on question # 1 at the close of the claimant's case. The court denied these motions, and allowed the case to go to the jury, id. § 670, which, by interrogatories, answered both questions in the affirmative. This result was certified to the Commissioner by order of the superior court, id. § 671, and the employer promptly appealed to this Court, id. § 672.
The appeal challenges the denial of employer's motions. In substance, the employer claims that the medical testimony was not sufficiently certain to support a jury finding that the fumes caused the alleged injuries; that neither the aggravation of claimant's bronchitis nor the myocardial infarction raise a legal claim for compensation because neither constitute a "personal injury by accident" within the meaning of 21 V.S.A. § 618; and that the aggravation of claimant's chronic bronchitis is an occupational disease, not a personal injury by accident, and is therefore compensable under the Occupational Disease Law, 21 V.S.A. ch. 11, but not under the Workmen's Compensation Act.
The evidence showed that in April and May of 1977 claimant was working for his employer on the construction of a large house, which was behind schedule. To speed up the job, the painters began work while some areas of the house were still being completed by the carpenters, and some of the furniture was moved into the house while this work was going on. Since the usual practice was for the carpenters to complete their work before the painters arrived, this particular job created an unusual situation in which the carpenters were exposed to fumes from paint and varnish. Furthermore, because it was necessary to close the windows to protect the furniture and fresh paint from dust, the lack of ventilation created an unusually high concentration of fumes in the air.
According to the claimant's experts, claimant had arteriosclerosis and mild to moderate chronic bronchitis prior to his exposure to these fumes. Although the evidence is somewhat conflicting, it appears that claimant was exposed to the fumes for approximately four to six weeks. By the last week of this exposure, claimant's condition had deteriorated to the point where his severe shortness of breath and increased production of sputum were consistent with a change from chronic to acute bronchitis. On May 10 and 11, claimant worked in a closed garage over open paint cans and adjacent to a hallway which was being freshly varnished. On these days claimant's condition was especially bad, and at times he had to step outside to get fresh air. At about three o'clock on the afternoon of the eleventh, claimant began experiencing severe chest pains. Although he was able to complete the day's work and to get to his doctor's office, he then suffered cardiac arrest.
The medical testimony of two doctors was that, to a reasonable degree of medical certainty, the fumes caused the change from chronic to acute bronchitis. Both doctors further testified that the diminished oxygen supply caused by the aggravated bronchial condition probably resulted in the death of part of the heart muscle, and the myocardial infarction. This testimony meets the legal standard of reasonable probability required of expert opinions, see State v. Bishop, 128 Vt. 221, 232, 260 A.2d 393, 400 (1969) (Holden, C. J., concurring); Howley v. Kantor, 105 Vt. 128, 133, 163 A. 628, 631 (1933), and therefore the employer's objections are not well taken on this issue.
The principal question raised by the employer is whether either certified question states a claim, under the evidence as developed, of personal injury by accident *1294 within the meaning of the Workmen's Compensation Act. See 21 V.S.A. § 618. For the purposes of the Act, an accident is "`an unlooked for mishap or an untoward event which is not expected or designed.'" Giguere v. E.B. & A.C. Whiting Co., 107 Vt. 151, 157, 177 A. 313, 316 (1935) (quoting Fenton v. Thorley & Co. [1903] A.C. 443, 448); accord, Masterson v. Rutland Hospital, Inc., 129 Vt. 91, 92, 271 A.2d 848, 849 (1970). Certainly, it cannot be said that the aggravation of claimant's bronchitis or the myocardial infarction was either expected or designed. Clover, Clayton & Co. v. Hughes, [1910] A.C. 242, 245-46; see Laird v. State Highway Department, 112 Vt. 67, 86, 20 A.2d 555, 564-65 (1941). Furthermore, while it is common to think of an accident as an external event such as an explosion or a fall, it has long been established that an accident "`may also be something going wrong within the human frame itself, such as the straining of a muscle or the breaking of a blood vessel.'" Giguere v. E.B. & A.C. Whiting Co., supra, 107 Vt. at 160, 177 A. at 317 (quoting Clover, Clayton & Co. v. Hughes, supra, A.C. at 246); accord, Laird v. State Highway Department, supra, 112 Vt. at 85, 20 A.2d at 564. In this case, the experts testified that the exposure to heavy fumes constituted a new injury to the mucosa which line the bronchial tubes. This new irritant caused the severe swelling and fluid production that brought on the rapid change from a relatively stable chronic bronchitis to acute bronchitis. This injury, in turn, diminished the supply of oxygen to the heart and brought on the myocardial infarction. In short, the human frame broke down unexpectedly under work-related strain. This constitutes a personal injury by accident under the Act.
The fact that claimant had pre-existing bronchial and arterial diseases does not undermine this conclusion. We have long held that the aggravation or acceleration of a pre-existing condition can constitute a personal injury by accident under the Act. Marsigli Estate v. Granite City Auto Sales, Inc., 124 Vt. 95, 103, 197 A.2d 799, 805 (1964); Laird v. State Highway Department, supra, 112 Vt. at 86, 20 A.2d at 565; Morrill v. Charles Bianchi & Sons, Inc., 107 Vt. 80, 87-88, 176 A. 416, 419-20 (1935).
Claimant's employer places great emphasis on the argument that no accident is shown because the exposure to fumes was over an extended period of time. We have previously relied on the absence of a brief and fortuitous event to deny compensation, see Masterson v. Rutland Hospital, Inc., supra, 129 Vt. at 92, 271 A.2d at 850, but in Masterson the claimant contracted tuberculosis after nine months of exposure under normal working conditions. Any reading of Masterson to require a brief event would therefore rely on dicta, which we now disapprove. "[I]njury, to be accidental, need not be instantaneous." 1B A. Larsen, Workmen's Compensation Law § 39.20, at 7-304 (1980). In fact, as Professor Larsen notes, the trend towards recognizing longer periods as sufficiently definite has "carried the permissible duration of the cause far beyond a few hours or days, to weeks or even months in some instances." Id. In light of this, we find that four to six weeks of exposure to intense fumes is a sufficiently specific trauma to constitute an accident under the Act.
The employer's argument that claimant's affliction is an occupational disease rather than a personal injury by accident is without merit. An occupational disease is "a disease which is due to causes and conditions which are characteristic of and peculiar to a particular trade, occupation, process or employment, and to which an employee is not ordinarily subjected or exposed outside of or away from his employment, and which arises out of and in the course of such employment." 21 V.S.A. § 1002 (emphasis added). In discussing a statute similar to ours, the Supreme Judicial Court of Maine has said that, "[t]o be within the purview of the Law, the disease must be so distinctively associated with the employee's occupation that there is a direct causal connection between the duties of the employment and the disease contracted." Russell v. Camden Community Hospital, 359 *1295 A.2d 607, 611-12 (Me.1976). The evidence in this case makes it clear that claimant's exposure to fumes was unusual for the trade of carpentry, and that therefore the fume-induced acute bronchitis and myocardial infarction are not distinctively associated with, or characteristic of, claimant's occupation. Accordingly, contrary to the employer's contention, the claim for benefits did not properly belong under the Occupational Disease Law.
Judgment affirmed. Let the mandate be certified to the Windsor Superior Court and to the Commissioner of Labor and Industry.
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777 F.Supp. 1290 (1991)
UNITED STATES of America, Plaintiff,
v.
Luther R. BARTRUG, Defendant.
No. C.R. 91-00078-01-R.
United States District Court, E.D. Virginia, Richmond Division.
November 21, 1991.
John C. McDougal, Special Asst. U.S. Atty., Richmond, Va., for plaintiff.
Luther R. Bartrug, pro se.
John A. Gibney, Jr., Shuford, Rubin, Gibney & Dunn (court appointed), Richmond, Va., for defendant.
MEMORANDUM OPINION
RICHARD L. WILLIAMS, District Judge.
This matter is before the Court on the defendant's motions to arrest judgment, notice of counsel issue, legal reason why sentence cannot be pronounced: regulation lacking legal force and effect, and declaration of legal cause to show why judgment should not be pronounced against him on *1291 verdict of conviction. For the reasons discussed below, the defendant's motions will be DENIED.
FACTUAL BACKGROUND
On September 17, 1991, the defendant was convicted by a jury on three counts of tax evasion, in violation of Title 26, United States Code, Section 7201. The defendant is an adherent to the general philosophies of those groups that style themselves as "tax protestors." And like members of those groups, he has throughout his criminal prosecution raised various hackneyed and frivolous arguments about the existence and validity of an "income tax" and the Court's jurisdiction to hear his case. The present motions, by and large, represent more of the same. The present motions were filed either in anticipation of or on the date of his sentencing. The Court took these motions under advisement and sentenced Mr. Bartrug on November 18, 1991.
DISCUSSION
I. Motion to Arrest Judgment
The defendant forwards three grounds in support of this motion. The first two renew issues the Court has ruled on previously; the third raises a new issue.
A. Indictment Fails to Charge an Offense
The defendant reasserts his primary and long standing claim that he can not defend himself because of the insufficiency of the indictment. He argues that the indictment is insufficient because it cites only a penalty provision, 26 U.S.C. § 7201, and not the section of the Code that the Defendant violated. As such, he argues, the indictment fails to inform him of the nature and cause of the accusation against him. The government argues that Section 7201 is not merely a penalty provision but itself defines a violation, to wit, a willful attempt to evade or defeat a tax imposed by the title.[1] Additionally, each count of the indictment explicitly states that the tax that the defendant evaded was "income tax."
The standard for the sufficiency of an indictment is two pronged: The indictment "must contain the elements of the offense and apprise the defendant of the nature of the charge." United States v. Hooker, 841 F.2d 1225 (4th Cir.1988). The Defendant expressly claims that the indictment is insufficient to inform him of the nature and cause of the charges against him and thus prevents him from preparing his defense. In a strikingly similar case, the Seventh Circuit held that "[t]he indictment was sufficient to inform Mr. Sloan of the charges against him. The indictment cited the statute he was accused of violating (26 U.S.C. § 7201) and identified the specific tax (the income tax) he was obligated to pay." United States v. Sloan, 939 F.2d 499, 501-02 (7th Cir.1991). In the present case, the indictment's references to 26 U.S.C. § 7201 provide sufficient notice of the crime and of the nature of the charge against the defendant. Moreover, the indictment clearly states that the offense charged is the evasion of income tax. The indictment also sets out the affirmative actions the Defendant was alleged to have taken to evade his income tax. Similarly, the indictment sets out the elements necessary to constitute the offense. "[T]he elements of § 7201 are willfulness; the existence of a tax deficiency; and an affirmative act constituting an evasion or attempted evasion of the tax." Sansone v. United States, 380 U.S. 343, 351, 85 S.Ct. 1004, 1010, 13 L.Ed.2d 882, 888 (1965). Each of these elements is explicitly set out in each count of the indictment.
B. The Court Lacks Subject Matter Jurisdiction
This is a rehashing of the defendant's long-standing claim that there is no such thing as an income tax that the "income tax" is merely an indirect, excise tax on certain taxable activities. As with the *1292 first ground, the Court has previously, and repeatedly, rejected this argument. The law is clear that the income tax as applied by the IRS is legal and constitutional. See, e.g., United States v. Sloan, 939 F.2d 499, 499-501 (7th Cir.1991) ("One such fundamental and immutable principle, he maintains, is that the revenue laws of the United States do not impose a tax on income. But we have squarely rejected this tax protestor argument before, holding that the Internal Revenue Code imposes a tax on all income...."); United States v. Connor, 898 F.2d 942, 943-44 (3d Cir.1990), and the cites therein. In fact, the arguments made by the defendant are so lacking in merit that courts have repeatedly upheld the imposition of sanctions based on the frivolous nature of litigating these arguments. See, e.g., Coleman v. Commissioner, 791 F.2d 68, 70 (7th Cir.1986) ("The contentions raised in this case are objectively frivolous. They have been raised and rejected so often that this circuit now handles almost all similar cases by unpublished orders. The Tax Court and the IRS were entitled to impose sanctions. We, too, regularly impose sanctions in these cases."); Kelly v. United States, 789 F.2d 94, 97 (1st Cir.1986).
C. Statute of Limitations
The defendant also argues that the crimes for which he was convicted are barred by the statute of limitations. The statute of limitations for tax evasion is six years. 26 U.S.C. § 6531(2). The relevant date for calculating the running of the statute of limitations is not the date the tax was originally due, as argued by the defendant, but the date of the last affirmative act of evasion. United States v. De Tar, 832 F.2d 1110, 1113 (9th Cir.1987) ("Even if the taxes evaded were due and payable more than six years before the return of the indictment, the indictment is timely so long as it is returned within six years of an affirmative act of evasion."); United States v. Ferris, 807 F.2d 269, 271 (1st Cir.1986), cert. denied, 480 U.S. 950, 107 S.Ct. 1613, 94 L.Ed.2d 798 (1987); United States v. Trownsell, 367 F.2d 815, 816 (7th Cir.1966).
The indictment in this case was handed down on June 17, 1991. The acts of evasion started sometime after September 4, 1985. On September 18, 1985, a revenue officer met with the defendant to discuss his jeopardy assessments. The defendant's attempts to hide his assets and evade his taxes continued and accelerated after this encounter. Since all of these dates are well within the six year period set by statute, the prosecutions were clearly not barred.
II. Notice of Counsel Issue
This appears to be merely a recitation of the defendant's claim that he was denied counsel of his choice and that he had incompetent and unwanted counsel forced upon him. The purpose of this pleading appears to be the preservation of these issues on appeal. As such, the pleading does not seem to require any action by the Court. To the extent, however, that it constitutes a motion requiring a ruling by this Court, it is denied.
The first element of the defendant's claim is that incompetent and undesired counsel was forced upon him. The defendant was allowed, at his request, to serve as his own counsel. He did not have counsel forced upon him. Mr. Gibney was merely appointed as standby counsel to aid the defendant when and if the defendant desired to seek his assistance. Mr. Bartrug, at all times had the option of seeking retained counsel or of asking the Court to appoint him counsel.[2]
To the extent that this motion is based on the Court's refusal to appoint a tax expert, there is no error. Cf. Wheat v. United States, 486 U.S. 153, 159, 108 S.Ct. 1692, 1697, 100 L.Ed.2d 140 (1988) ("[W]hile the right to select and be represented by one's preferred attorney is comprehended by the Sixth Amendment, the essential aim *1293 of the Amendment is to guarantee an effective advocate for each criminal defendant rather than to ensure that a defendant will inexorably be represented by the lawyer whom he prefers."); United States v. Weninger, 624 F.2d 163, 166 (10th Cir.) (no sixth amendment right to counsel who agrees with defendants' views on the invalidity of the tax laws), cert. denied, 449 U.S. 1012, 101 S.Ct. 568, 66 L.Ed.2d 470 (1980).
Finally, to the extent that the defendant's motion is based on an inability to retain counsel until he is informed of the nature and cause of the charges against him, the motion is without merit for the reasons discussed in Section IA, supra.
III. Legal Reason Why Sentence Cannot Be Pronounced: Regulation Lacking Legal Force and Effect
The defendant argues that he can not be prosecuted because the federal income tax regulations governing the filing of income tax returns are invalid. He argues that the regulations are invalid because they do not bear the required OMB control numbers, as required by 44 U.S.C. § 3501 et seq. Similarly, he argues that tax return forms after 1985 are invalid because they failed to have expiration dates, as required by 44 U.S.C. § 3501 et seq. While somewhat newer in origin, these arguments have also become part of the hackneyed tax protester's refrain. It, like the other scripted arguments, is frivolous and meritless. To begin with, the defendant misconstrues the charges against him. He is charged with violating 26 U.S.C. § 7201 tax evasion. He is not charged with failing to file a return under 26 U.S.C. §§ 6012 or 7203. The first two counts against him do not directly impact his failure to file a return. The third count merely touches on the failure to file a return as one of the attempted means of evasion. But even in regards to suits based on the requirement to file a return, the defendant's arguments have been repeatedly rejected. To begin with, "the regulations do not need a number because the requirement to file a tax return is mandated by statute, not by regulation.... See 26 U.S.C. §§ 6012 and 7203. The Paperwork Reduction Act, therefore, does not apply to the statutory requirement, but only to the forms themselves, which contained the appropriate numbers." United States v. Wunder, 919 F.2d 34, 38 (6th Cir.1990). As to the forms themselves, the defendant argues that after 1985 they lacked the required expiration dates. The defendant's basis for requiring an expiration date is questionable. But even assuming, arguendo, that such a requirement existed, the 1040 forms would meet that requirement. See United States v. Collins, 920 F.2d 619 (10th Cir.1990) (stating that since the 1040 forms bear the relevant year on them, they would plainly meet any alleged requirement of an expiration date), cert. denied, ___ U.S. ___, 111 S.Ct. 2022, 114 L.Ed.2d 108 (1991).
IV. Defendant's Declaration of Legal Cause to Show Why Judgment Should Not Be Pronounced Against Him on Verdict of Conviction
The defendant's final motion is a claim that the Court has no grant of jurisdiction to hear criminal matters involving internal revenue. This claim is also patently frivolous. "The district courts of the United States shall have original jurisdiction, ..., of all offenses against the laws of the United States." 18 U.S.C. § 3231; United States v. Eilertson, 707 F.2d 108 (4th Cir.1983) (per curium).
NOTES
[1] Section 7201 provides:
Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony.... 26 U.S.C. § 7201.
[2] The defendant was clearly aware that he could seek outside counsel. This was evidenced by his repeated assertion that he desired to seek retained counsel but could not do so until he was informed of the nature of the charges against him.
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175 N.J. Super. 608 (1980)
421 A.2d 607
MARY HANN, PLAINTIFF,
v.
J. WALTER HANN, DEFENDANT.
Superior Court of New Jersey, Chancery Division Mercer County.
Decided August 25, 1980.
*609 John A. Hartmann, III, for plaintiff (Pellettieri, Rabstein & Altman, attorneys).
Laurence I. Tomar for defendant (Tomar, Kamensky & Smith, attorneys).
TAMS, J.S.C.
In this suit for separate maintenance the parties have been married for 40 years, during which time they resided in Pennsylvania and raised their six children. Plaintiff left defendant and moved to New Jersey. She filed her complaint in this court for separate maintenance, alleging that she was obliged to leave the *610 marital home because of defendant's extreme cruelty. Defendant was personally served with the complaint at the marital home in Pennsylvania.
Plaintiff filed a motion for pendente lite relief seeking primarily financial relief; however, she also sought to enjoin defendant from communicating with her in any manner and from harassing and threatening her. In her supporting affidavit plaintiff alleged that she has observed defendant drive around her place of employment many times and up and down the street where she resides. She further alleged that defendant has threatened to kill her.
Defendant countered plaintiff's motion with a motion to dismiss her complaint for lack of jurisdiction over his person, pursuant to R. 4:6-2(b), and to deny her application for pendente lite relief. Defendant did not file an answer to plaintiff's complaint; however, under R. 4:6-2(b) his motion to dismiss accompanied by a memorandum of law was procedurally proper. Defendant's affidavit in support of his motion and in opposition to plaintiff's motion was addressed primarily to the financial relief sought by plaintiff, denying that she demonstrated any need for support. His essential assertion in support of his claim of lack of personal jurisdiction was that neither plaintiff nor defendant had ever lived in New Jersey during the course of the marriage. His accompanying brief further addressed the jurisdictional issue.
A plenary hearing was held August 20, 1980 as to certain facts which, while alleged in affidavits, needed to be presented at an evidentiary hearing where they were subject to regular proof with cross-examination. From that hearing I determine as follows.
The parties were married on July 31, 1939 and lived their whole married life in Pennsylvania until plaintiff left defendant on February 8, 1980, allegedly as a result of his extreme cruelty to her. She came to live in New Jersey on that date and has lived in this State since, earning an income as a teacher in the public school system in Bordentown, New Jersey, as she had for some ten years before. During their marriage the parties *611 purchased two homes in joint names in New Jersey. The first, a single-family home on the waterfront in Salem, was bought in 1977 and was intended as a future retirement home; the other is a three-apartment house in Beverly. In connection with the Salem home, defendant and plaintiff made many trips there to do renovation work and to visit neighbors who had become friends. As to the Beverly house, they made numerous trips together and performed extensive work renovating the three apartments contained in the house. Both properties have been rented since their acquisition although they do little more than carry their own expenses.
I further find that after the parties separated defendant made a substantial number of excursions by car into New Jersey for the purpose of checking up on the activities of plaintiff, and that during this time he made several threats on plaintiff directly or impliedly by his actions and statements.
The issue presented is whether this court may exercise jurisdiction, either in personam or quasi in rem, in this matter.
Drobney v. Drobney, 146 N.J. Super. 317 (App.Div. 1977), is similar to the present case. There the parties were divorced in Colorado where they had resided during marriage. Pursuant to an agreement incorporated in the divorce judgment, the wife retained custody of two of the four children of the marriage and received $50 a week per child in child support. She also received half of the proceeds of three mortgages on properties located in New Jersey. The wife then relinquished custody of one child and returned with the youngest child to New Jersey where she filed a complaint for increased child support and served the defendant personally in Colorado. She sought by pendente lite motion to have the increased child support satisfied out of defendant's share of the mortgage proceeds. Defendant as in this case filed a cross-motion to dismiss the complaint for lack of personal jurisdiction, accompanied by an affidavit addressed to the merits. The trial judge granted defendant's cross-motion to dismiss. The Appellate Division, after discussing the various bases of jurisdiction, found that quasi in rem jurisdiction existed and was sufficient to afford plaintiff the relief she requested. Upon finding the requisite quasi in rem jurisdiction, the Appellate *612 Division held that the trial judge should have regarded plaintiff's application as one for issuance of a writ of attachment and proceeded accordingly. The court also declined, in view of its finding of quasi in rem jurisdiction, to address the issue of whether defendant was amenable to long-arm in personam jurisdiction on the basis of sufficient minimal contacts in New Jersey. Id. at 325.
Drobney, while clearly similar to the present case, is not dispositive of it since the facts and the relief requested differ substantially. In Drobney the wife sought to satisfy an award of increased child support out of the husband's share of the mortgage proceeds. In the present case the financial relief sought by plaintiff is not requested to be satisfied out of defendant's share of the income from the parties' jointly owned New Jersey properties. Further, plaintiff herein is seeking to restrain defendant from harassing and threatening her. This relief is clearly personal in nature and may only be granted if this court has in personam jurisdiction over the defendant. It was held in Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), that the presence in the state of property alone will not support the state's jurisdiction where the property is unrelated to the cause of action. Id. at 208-209, 97 S.Ct. at 2581-2582. Certainly the presence of jointly owned property in New Jersey is unrelated to the restraints sought against the defendant. Thus, while the court in Drobney, supra, found it unnecessary to address the issue of long-arm in personam jurisdiction, this court must do so to determine whether the relief here requested may be granted.
In Roland v. Modell's Shoppers World of Bergen Cty., 92 N.J. Super. 1, (App.Div. 1966), the court enunciated New Jersey's view of long-arm in personam jurisdiction:
... [T]he law has been that "due process required only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.' International Shoe Co. v. State of Washington, 326 U.S. 310, 316 [66 S.Ct. 154, 158, 90 L.Ed. 95]," 92 N.J. Super. at 6."
Our Supreme Court stated in J.W. Sparks & Co. v. Gallo, 47 N.J. 295 (1966):
*613 International Shoe made it clear that the test is "fundamental fairness" to the defendant in light of his contacts with the forum state, its legitimate interests, and the interests of trial convenience . .. [at 301]
Drobney, supra, holds that jurisdictional bases of personal jurisdiction, including long-arm personal jurisdiction, apply to matrimonial actions as well as other civil actions 146 N.J. Super., at 324. Thus, in the instant case defendant's contacts in the State of New Jersey must be examined in light of "traditional notions of fair play and substantial justice." International Shoe, supra.
Here, defendant's contacts with New Jersey consist in part of his joint ownership with his wife of property in New Jersey. In Drobney the court declined to decide whether such ownership represented sufficient minimal contacts to support in personam jurisdiction. However, in a discussion of that case Skoloff, New Jersey Family Law Practice (3 ed. 1976), states:
... [T]he Appellate Division ... does not reach the question as to whether or not a defendant is amenable to an exercise of long arm in personam jurisdiction on the basis of sufficient minimal contacts in New Jersey. It would seem that this issue is now ripe for determination by our Appellate Courts, and based upon many reported decisions allowing long arm jurisdiction, it would seem that a defendant with minimal contacts in New Jersey will be susceptible to long arm personal service. [at A26]
There are other factors in the present case not found in Drobney which are supportive of this court's exercise of long-arm in personam jurisdiction over defendant. As previously determined, defendant has had significant personal contacts in this State while driving around plaintiff's place of employment and up and down the street where she resides. Previous contacts occurred during the time the parties came to New Jersey to work on their properties in Salem and Beverly. Defendant has been frequently present in our State for various reasons and most particularly for many purposes closely associated with plaintiff and defendant in their personal relationship. These contacts clearly support in personam jurisdiction and do not offend any "traditional notions of fair play and substantial justice" (see International Shoe, supra), and this court so finds.
Because of the evidence of defendant's threats to plaintiff, he is enjoined from harassing or threatening plaintiff by *614 any action or communication and until further order of this court.
As to defendant's cross-motion that plaintiff has failed to set forth a cause of action for separate maintenance, if she proves the charges of extreme cruelty alleged in her complaint, then there may be a constructive desertion, see Gutmann v. Gutmann, 70 N.J. Super. 266 (App.Div. 1961); and the fact that she supports herself as a school teacher does not prove that she has sufficient money and is not entitled to separate maintenance support. See Capadonno v. Capadonno, 58 N.J. 113 (1971), where the wife (a school teacher) sued for separate maintenance, and the court stated:
... a wife's income is not, as the defendant contends, the sole factor to be considered. His ability to pay, the duration of the marriage, and the age of the parties must also be considered. The extent to which the wife's earnings should be applied in diminution of the husband's obligation will depend on all the circumstances. [at 119]
Finding the constructive desertion to be well pleaded by plaintiff and considering the Capadonno guideline for determining the requested separate maintenance, I deny defendant's motion to dismiss. See Ridgefield Park v. Bergen Cty. Bd. of Taxation, 31 N.J. 420, 425; see, also, J.H. Becker, Inc. v. Marlboro Tp., 82 N.J. Super. 519, 524 (App.Div. 1964).
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17 Cal.Rptr.3d 26 (2004)
121 Cal.App.4th 282
Frank T. VEGA, Plaintiff and Appellant,
v.
JONES, DAY, REAVIS & POGUE, Defendant and Respondent.
No. B170659.
Court of Appeal, Second District, Division Eight.
August 2, 2004.
Rehearing Denied August 30, 2004.
Review Denied October 27, 2004.[*]
*28 Manuel R. Ramos, Lo Jolla, for Plaintiff and Appellant.
Gibson, Dunn & Crutcher, James P. Fogelman, Joel M. Tantalo and Sarah R. Long, Los Angeles, for Defendant and Respondent.
*27 BOLAND, J.
SUMMARY
A shareholder in a company acquired in a merger transaction sued the law firm which represented the acquiring company for fraud. He alleged the law firm concealed the so-called toxic terms of a third party financing transaction, and thus defrauded him into exchanging his valuable stock in the acquired company for "toxic" stock in the acquiring company. The law firm demurred. It contended it made no *29 affirmative misstatements and had no duty to disclose the terms of the third party investment to an adverse party in the merger transaction. We conclude the complaint stated a fraud claim based on nondisclosure. The complaint alleged the law firm, while expressly undertaking to disclose the financing transaction, provided disclosure schedules that did not include material terms of the transaction.
FACTUAL AND PROCEDURAL BACKGROUND
Frank T. Vega (Vega), a 23 percent shareholder in a company known as Monsterbook.com, sued Jones, Day, Reavis & Pogue (Jones Day), a law partnership, for fraud and negligent misrepresentation in connection with a merger transaction. In the merger transaction, Jones Day represented Transmedia Asia Pacific, Inc., which acquired Monsterbook. Monsterbook and Vega were represented by the law firm of Heller, Ehrman, White & McAuliffe (Heller Ehrman).
The terms of the acquisition included Vega's receipt of restricted stock in Transmedia in exchange for his interest in Monsterbook. Monsterbook and Vega accepted the merger offer on March 8, 2000. Closing occurred on April 13, 2000, when the two companies exchanged stock based on a $15 million valuation of Monsterbook. Vega thus exchanged stock valued at $3.45 million for the restricted Transmedia stock.
During the weeks between Vega's acceptance of the merger offer on March 8 and the closing on April 13, Transmedia, which "[e]verybody knew . . . was an iffy company," sought and secured $10 million in investment financing from a third party.[1] The terms of Transmedia's $10 million third party financing transaction included so-called toxic stock provisions, under which the investors received convertible preferred stock that seriously diluted the shares of all other Transmedia stockholders. Both Transmedia and Jones Day knew that "toxic" stock financing is a "desperate and last resort of financing for a struggling company" and that 95 percent of companies who engage in such financing end up in bankruptcy.
Jones Day prepared a two-page disclosure schedule that clearly described and properly disclosed the "toxic" provisions of the $10 million investment, but did not send the disclosure to Vega, Monsterbook or Heller Ehrman. Jones Day knew that a full disclosure of the "toxic" terms of the financing would have "killed the acquisition," without which Transmedia would not have obtained the financing and would have gone out of business. Instead, Vega, Monsterbook and Heller Ehrman were told, on about March 16, 2000, that the $10 million financing then being negotiated was "standard" and "nothing unusual" and that Jones Day and Transmedia would supply additional documents to support these characterizations of the financing.[2]*30 No documents showing the "toxic" nature of the investment were provided; instead, Jones Day supplied Heller Ehrman with "a different sanitized version" of the disclosure schedule which did not include the "toxic" stock provisions.
Jones Day also prepared, and Transmedia sent to Monsterbook and Vega, a consent form concerning the $10 million investment, which Vega signed. The consent form stated that the $10 million investment would be convertible into an aggregate maximum of 6,815,000 shares of common stock, "thus misrepresenting that it fell within the 20% dilution `toxic' cap mandated by NASD Rule 4350(i)(1)(D)." On March 28, 2000, two weeks before the closing of Transmedia's acquisition of Monsterbook, Jones Day filed a "Certificate of Designation" with the Delaware Secretary of State, certifying the creation of the convertible preferred stock. This document, available to the public, contained all the terms of the financing, including the "toxic" provisions.
The closing of the Monsterbook acquisition occurred on April 13, 2000. Eight months later, on December 14, 2000, Vega learned for the first time, through a press release issued by Transmedia, about the "toxic" stock provision of the $10 million financing. Several legal actions ensued.
First, on October 2, 2001, Monsterbook's former majority shareholder, William H. McKee, who had owned 70.125 percent of Monsterbook's stock, sued Heller Ehrman for legal malpractice. In a first amended complaint on November 21, 2001, McKee and a second shareholder, Paul R. Estrada, who had held a 1.486 percent interest in Monsterbook, also named Transmedia and Jones Day as defendants, alleging causes of action for fraud and negligent misrepresentation.
Second, on December 14, 2001, another shareholder, John Cuero, who had held a 2 percent interest in Monsterbook, sued Heller Ehrman, Jones Day, and Transmedia. This suit was consolidated with McKee's lawsuit. In the consolidated actions, Jones Day sought and obtained summary judgment, and judgment was entered in its favor on August 23, 2002.[3] Estrada waived his right to appeal; McKee abandoned his appeal; and Cuero's appeal was dismissed at his request.
*31 Third, on May 12, 2003, Vega filed this lawsuit against Jones Day and Transmedia, and Jones Day demurred.[4] The demurrer to the fraud claim was sustained, without leave to amend, on multiple grounds, as follows:
♦ The claim did not allege an actionable, affirmative misstatement by Jones Day;
♦ Vega could not justifiably have relied on the statements allegedly made by Jones Day;
♦ Because Jones Day owed Vega no duty to disclose, Vega could not state a claim based on omission or nondisclosure;
♦ Vega did not allege damages proximately caused by Jones Day;
♦ Vega had no standing to bring the claim because it was derivative in nature;
♦ The claim was barred by the statute of limitations; and
♦ The claim was barred by res judicata.
Jones Day's demurrer to the negligent misrepresentation claim was sustained on the same grounds and, in addition, because a negligent misrepresentation claim cannot be based on an omission or nondisclosure. The court also concluded Vega failed to plead both causes of action with the requisite specificity.
The trial court's order sustaining the demurrers and dismissing Vega's complaint with prejudice was filed August 5, 2003, and this appeal followed.[5]
DISCUSSION
Vega's allegations may be summarized as follows. Jones Day hid the existence of the "toxic" stock provisions with the intent to induce Vega to give up his valuable stock in Monsterbook in exchange for Transmedia's "toxic" and worthless stock. Jones Day knew about the "toxic" stock provisions, and knew the acquisition would not occur if Monsterbook, Vega and their lawyers discovered them. Jones Day deliberately concealed the "toxic" stock provisions by telling Heller Ehrman the transaction was "standard" and "nothing unusual," by failing to provide the proper written disclosure it prepared, and by instead providing a different, sanitized version of the disclosure. Vega did not know, and had no reason to suspect, that the financing contained "toxic" provisions, and would not have given up his valuable stock in Monsterbook had he known. As a result of Jones Day's concealment of the "toxic" terms of the financing, Vega lost his $3.45 million interest in Monsterbook.
We agree with Vega that the complaint properly states a fraud claim.
Before we analyze the elements of the claim, we note the governing legal principles. A fraud claim against a lawyer is no different from a fraud claim against anyone else. "`If an attorney commits actual fraud in his dealings with a third party, the fact he did so in the capacity of attorney for a client does not relieve him *32 of liability.'" (Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107 Cal.App.4th 54, 69, 131 Cal. Rptr.2d 777 (Shafer), quoting Jackson v. Rogers & Wells (1989) 210 Cal.App.3d 336, 345, 258 Cal.Rptr. 454.) While an attorney's professional duty of care extends only to his own client and intended beneficiaries of his legal work, the limitations on liability for negligence do not apply to liability for fraud. (Ibid.) Accordingly, a lawyer communicating on behalf of a client with a nonclient may not knowingly make a false statement of material fact to the nonclient (Shafer, supra, 107 Cal.App.4th at p. 69, 131 Cal.Rptr.2d 777), and may be liable to a nonclient for fraudulent statements made during business negotiations. (Cicone v. URS Corp. (1986) 183 Cal. App.3d 194, 202, 227 Cal.Rptr. 887 ["the case law is clear that a duty is owed by an attorney not to defraud another, even if that other is an attorney negotiating at arm's length"].)
With these principles in mind, we turn to the elements of fraud, which are: "(1) representation; (2) falsity; (3) knowledge of falsity; (4) intent to deceive; and (5) reliance and resulting damage (causation)." (5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 668, p. 123.) Active concealment or suppression of facts by a nonfiduciary "is the equivalent of a false representation, i.e., actual fraud." (Id., § 678, p. 136, italics omitted.) We treat the various elements, and the bases for the trial court's decision, in turn.
1. False representation.
We agree with Jones Day that a mere statement that the $10 million financing then being negotiated was "standard" and "nothing unusual" is not itself an actionable misrepresentation. While expressions of professional opinion are sometimes treated as representations of fact, a "casual expression of belief" is not similarly treated. (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 408, 11 Cal.Rptr.2d 51, 834 P.2d 745, quoting Gagne v. Bertran (1954) 43 Cal.2d 481, 489, 275 P.2d 15.) Moreover, no party to a major transaction could reasonably rely on a casual statement by counsel for another party to the transaction.[6]
More problematic, however, is the question of active concealment or suppression of facts, which is the equivalent of a false representation. Vega alleges that Jones Day, after telling Heller Ehrman that Transmedia was about to close a $10 million private stock transaction which it wanted to include in its disclosure schedules, prepared a proper disclosure schedule containing the pertinent terms, but provided a "different sanitized version" of the schedule, without the "toxic" stock provisions. Thus, Vega alleges that Jones Day "deliberately or with a reckless disregard of the truth concealed the `toxic' stock provisions" from Vega, Monsterbook and Heller Ehrman. These allegations state an "active concealment or suppression of facts."[7] (5 Witkin, Cal. Procedure, *33 supra, § 678, p. 136, italics omitted.) So long as the remaining elements of a fraud claim are met (see discussion post), we are unable to conclude these allegations are deficient.
Jones Day contends that fraud based on concealment requires that the defendant have a duty to disclose the suppressed fact, and that as counsel for the adverse party in a merger, Jones Day owed no duty to disclose to Vega or Monsterbook the terms of the third party $10 million investment. Thus, the disclosure schedule, they contend, "is entirely irrelevant" because Jones Day had no duty to provide it to Monsterbook or Vega or Heller Ehrman. We disagree. Jones Day specifically undertook to disclose the transaction and, having done so, is not at liberty to conceal a material term. Even where no duty to disclose would otherwise exist, "where one does speak he must speak the whole truth to the end that he does not conceal any facts which materially qualify those stated. [Citation.] One who is asked for or volunteers information must be truthful, and the telling of a half-truth calculated to deceive is fraud." (Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 201, 227 Cal.Rptr. 887; Shafer, supra, 107 Cal.App.4th at p. 72, 131 Cal.Rptr.2d 777.)
Jones Day insists this case is controlled by B.L.M. v. Sabo & Deitsch (1997) 55 Cal.App.4th 823, 64 Cal.Rptr.2d 335 (B.L.M.), and that B.L.M. held that defendant attorneys owed no duty of care to the adverse party when they provided an opinion on a material aspect of the transaction at issue. Jones Day misconstrues B.L.M., a case with which we have no quarrel. The defendant lawyers in B.L.M. specifically stated an opinion on a material point in the transaction on which third party B.L.M. relied. The court concluded that "it would be inappropriate to hold an attorney liable to a third party for a legal opinion which the third party could not, under the Rules of Professional Conduct, have contracted to obtain from that attorney." (B.L.M., supra, 55 Cal. App.4th at p. 839, 64 Cal.Rptr.2d 335.) The court therefore held that B.L.M.'s reliance on the legal opinion of another party's lawyers "was not justifiable under the facts alleged . . . ." (Ibid.) The court specifically stated: "We do not suggest that an attorney should be exempt from liability for negligent misrepresentation under circumstances in which a nonattorney could be held liable; we merely decline to extend professional liability under a negligent misrepresentation theory to individuals who are not clients of the attorney." (Ibid., fn. omitted.)
B.L.M. is entirely inapposite. First, plaintiff B.L.M.'s claims were grounded solely in professional negligence not fraud. On appeal, B.L.M. argued it should be permitted to proceed against the attorneys under a theory of negligent misrepresentation not fraud. The court reviewed that contention, and ultimately concluded B.L.M. failed to sufficiently allege that the lawyers had the intent to induce B.L.M.'s reliance on their representations, or that the reliance of B.L.M. was justifiable "under the circumstances of the case." (B.L.M., supra, 55 Cal.App.4th at p. 835, 64 Cal.Rptr.2d 335.) Second, as the court in B.L.M. pointed out, third parties may recover against an attorney under a negligent misrepresentation theory, in cases involving misrepresentations of fact rather than legal opinions. (Id. at pp. 839-840, 64 Cal.Rptr.2d 335.) The case under review involves the lawyers' alleged concealment *34 of a material fact in a transaction the lawyers undertook to disclose not the expression of an inaccurate legal opinion as in B.L.M. Consequently, Jones Day can take no comfort from B.L.M., which is in no way inconsistent with our conclusion here. Certainly Jones Day had no professional duty of care to Vega as an adverse party in the merger transaction. However, as in Shafer, supra, Jones Day did have the same duty others have "`not to defraud another, even if that other is an attorney negotiating at arm's length.'" (Shafer, supra, 107 Cal.App.4th at p. 71, 131 Cal.Rptr.2d 777, quoting Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 202, 227 Cal.Rptr. 887.)
Jones Day contends that Shafer is irrelevant, and suggests the result there was due to "the peculiar circumstances." In Shafer, the court held that an attorney, who was retained by an insurance company to provide coverage advice in a lawsuit against its insured, could be held liable to the plaintiffs in that lawsuit for making a fraudulent statement about coverage. (Shafer, supra, 107 Cal.App.4th at p. 59, 131 Cal.Rptr.2d 777.) This case is different, Jones Day says, because Vega has not alleged an affirmative misstatement of fact made to him by Jones Day, and because Vega cannot allege any "special circumstances that would give rise to an independent duty of disclosure owed by Jones Day to him."[8] Neither of these asserted differences assists Jones Day. First, Shafer indeed involved an affirmative false statement, while this case involves the concealment or suppression of material facts. However, we can deduce no reason why a lawyer may be liable for one form of fraud but not the other. (See Lovejoy v. AT & T Corp. (2001) 92 Cal.App.4th 85, 97, 111 Cal.Rptr.2d 711 [it is established by statute "`that intentional concealment of a material fact is an alternative form of fraud and deceit equivalent to direct affirmative misrepresentation,'" quoting Stevens v. Superior Court (1986) 180 Cal. App.3d 605, 608, 225 Cal.Rptr. 624]; 5 Witkin, Cal. Procedure, supra, § 678, p. 136 [active concealment or suppression of facts is the equivalent of a false representation].) Second, Jones Day's invocation of the principle that fraud based on nondisclosure requires an "independent duty of disclosure" is erroneous. In some but not all circumstances, an independent duty to disclose is required; active concealment may exist where a party "[w]hile under no duty to speak, nevertheless does so, but does not speak honestly or makes misleading statements or suppresses facts which materially qualify those stated."[9] (BAJI *35 No. 12.37; Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 201, 227 Cal.Rptr. 887["[o]ne who is asked for or volunteers information must be truthful, and the telling of a half-truth calculated to deceive is fraud"].) Providing a disclosure schedule which deliberately omitted material facts seems clearly to fit this category.
2. Justifiable reliance.
Jones Day argues that publicly available information cannot form the basis for a concealment claim, and Vega, with reasonable diligence, could have known about the "toxic" stock provisions. Jones Day points out that Vega had notice, in the consent form he signed, that a "Certificate of Designation" regarding the $10 million investment and its terms would be filed with the Delaware Secretary of State at some time in the future, and that this certificate, containing all the financing terms, was in fact filed two weeks before the merger closed.[10]
Jones Day's argument fails on two counts. First, the contention that publicly available information cannot form the basis for a concealment claim is mistaken. The mere fact that information exists somewhere in the public domain is by no means conclusive. (See, e.g., Seeger v. Odell (1941) 18 Cal.2d 409, 414-415, 115 P.2d 977 [a plaintiff is not barred by constructive notice of a public record which would reveal the true facts].) Second, the question in a nondisclosure case is whether the defendant knows of material facts, and also knows that those facts are neither known nor readily accessible to the plaintiff.[11] (See BAJI, No. 12.36, ¶ 4.) In this case, Jones Day knew about the "toxic" provisions of the financing, and knew those facts were unknown to Vega unless, and only to the extent that, Jones Day and/or Transmedia disclosed those terms. Indeed, the point of disclosing material information in a transaction is that it is not otherwise available to the other side. Jones Day stated its desire to disclose the $10 million financing transaction, and then allegedly provided a sanitized disclosure, without the "toxic" terms. Questions as to whether Jones Day intentionally concealed that information in order to induce Vega to believe the transaction was "standard," and whether the consent form indicating that a certificate regarding the investment and its terms would be filed in Delaware in the future made the "toxic" terms reasonably *36 accessible to Vega, are questions of fact to be resolved on the evidence, not as a matter of law on a demurrer.
3. Reliance and causation.
Jones Day argues Vega cannot establish that nondisclosure of the "toxic" terms of the $10 million third party financing resulted in any damage. This is because (1) Vega agreed to exchange his Monsterbook stock for Transmedia stock on March 8, 2000, before the third party financing transaction arose and before he consented to it, and (2) Vega "concedes" in his complaint that Transmedia "would have gone out of business" without the $10 million investment. This claim is puzzling at best. First, while Vega agreed to exchange his stock on March 8, he may have had good grounds to rescind the agreement if the "toxic" terms of the financing had been disclosed. This is not a point that can be determined on a demurrer. Second, Jones Day quotes only part of the sentence in which Vega "concedes" Transmedia would have gone out of business without the financing. The complaint alleges that disclosure of the "toxic" terms of the financing "would have killed the acquisition," and that "[w]ithout the acquisition," Transmedia would not have obtained the financing and would have gone out of business. We fail to see how these allegations show Vega was not harmed by the failure to disclose the "toxic" terms of the financing. Quite the contrary. Vega alleges that had full disclosure been made, he would not have exchanged his valuable Monsterbook stock for the "toxic" Transmedia stock. Those allegations, if true, show the nondisclosure resulted in damage.
4. Requisite particularity.
The trial court also sustained the demurrer on the ground Vega failed to allege the cause of action "with the requisite degree of specificity." Jones Day argues Vega has not alleged "(1) who, (2) said what, (3) to whom, (4) when, and (5) in what manner," and waived the opportunity to replead.[12] Again we disagree. The pertinent question in a concealment case is not who said what to whom; the question, among others, is whether Jones Day, in undertaking to disclose the $10 million financing, intentionally concealed its "toxic" terms from Vega and Monsterbook so that they would proceed with the transaction. The complaint sufficiently apprises Jones Day of the facts of Vega's fraud claim to allow Jones Day to prepare its defense. (See Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216, 197 Cal.Rptr. 783, 673 P.2d 660.)
5. Standing to sue.
Jones Day contends Vega has no standing to sue Jones Day for fraud because his claims are "derivative" claims. In a tortuous argument, Jones Day concludes that because Vega agreed to accept Transmedia stock before the third party financing transaction arose, the gravamen of his complaint "must be for the diminution in *37 the value of the Transmedia stock" he acquired, which was caused by Transmedia's entering into the private stock transaction. This, Jones Day asserts, is a classic example of a derivative claim because the harm to Vega is the same harm suffered by every other Transmedia or Monsterbook shareholder.
Jones Day is mistaken. A derivative suit is a suit brought on behalf of a corporation for injury to the corporation, often for breach of fiduciary duty, mismanagement or other wrongdoing by corporate officers or directors, or for wrongs against the corporation by third parties. (See Friedman, Cal. Practice Guide: Corporations (The Rutter Group 2004) ¶¶ 6:602 & 6:603, pp. 6-128.1 to 6-128.2.) An action is derivative "`if the gravamen of the complaint is injury to the corporation, or to the whole body of its stock and property without any severance or distribution among individual holders, or it seeks to recover assets for the corporation or to prevent the dissipation of its assets.'" (Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 106, 81 Cal.Rptr. 592, 460 P.2d 464, citing Gagnon Co., Inc. v. Nevada Desert Inn, Inc. (1955) 45 Cal.2d 448, 453, 289 P.2d 466.) This is not such a case. Vega alleges that Jones Day deceived him into exchanging his valuable stock in Monsterbook for worthless stock in Transmedia. As in Jones, Vega "does not seek to recover on behalf of the corporation for injury done to the corporation" by Jones Day. (Jones v. H.F. Ahmanson & Co., supra, 1 Cal.3d at p. 107, 81 Cal.Rptr. 592, 460 P.2d 464.) Instead, "the gravamen of [his] cause of action is injury to [himself]. . . ." (Ibid.)[13]
6. Statute of limitations.
Jones Day argues that Vega's fraud claim is barred by the three-year statute of limitations.[14] Again, we disagree.
Vega alleged he first discovered the "toxic" terms of the $10 million financing transaction on December 14, 2000, when a Transmedia press release revealed that the terms of the financing had included a "toxic" stock provision. He filed suit on May 12, 2003. Jones Day argues the three-year statute expired no later than March 28, 2003, three years after the filing in Delaware of the "Certificate of Designation" containing all the terms of the transaction. Jones Day recognizes that the statute of limitations in a fraud action does not begin to run "until the discovery, by the aggrieved party, of the facts constituting the fraud. . . ." (Code Civ. Proc., § 338, subd. (d).) However, it argues Vega should have discovered the "toxic" terms of the financing on March 28, 2000, since the filing of the certificate in Delaware put him on inquiry notice.
*38 The rule is that the statute commences to run "only after one has knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry." (Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 412, 437, 159 P.2d 958.) The means of knowledge are equivalent to knowledge "only where there is a duty to inquire, as where plaintiff is aware of facts which would make a reasonably prudent person suspicious."[15] (Hobart v. Hobart Estate Co., supra, 26 Cal.2d at p. 438, 159 P.2d 958.) We cannot say, as a matter of law, that Vega's knowledge that the $10 million financing transaction would occur, standing alone, should have made him "suspicious of fraud," or suspicious that the transaction might contain "toxic" terms. Whether other circumstances exist which, in conjunction with knowledge of the existence of the financing transaction, would have made a prudent person suspicious is a question that cannot be resolved on demurrer.
7. Res judicata.
Finally, Jones Day contends that Vega's claims are barred by the doctrine of res judicata, because Jones Day obtained summary judgment in its favor on fraud claims in earlier lawsuits brought by three other shareholders, who subsequently waived, abandoned and dismissed their respective appeals. Jones Day argues Vega was in privity with each of those three shareholders, because he is also a former shareholder in Monsterbook, his fraud claim is the same as their claims, he knew about their lawsuits, and he is using the same attorney. This relationship, Jones Day contends, is sufficiently close to justify application of the principle of preclusion. Again, we cannot agree.
The doctrine of res judicata precludes parties or their privies from relitigating issues decided in a prior action in which a final judgment on the merits was entered. While Jones Day obtained summary judgment on fraud claims by three other shareholders, Vega was not a party to those lawsuits. The concept of privity has been expanded to include "a relationship between the party to be estopped and the unsuccessful party in the prior litigation which is `sufficiently close' so as to justify application of the doctrine of collateral estoppel." (Clemmer v. Hartford Ins. Co. (1978) 22 Cal.3d 865, 875, 151 Cal.Rptr. 285, 587 P.2d 1098.) However, "[n]otwithstanding expanded notions of privity," due process requirements must be satisfied. (Ibid.) The cases uniformly state that, in addition to an identity or community of interest between the party to be estopped and the losing party in the first action, and adequate representation by the latter, "the circumstances must have been such that the party to be estopped should reasonably have expected to be bound by the prior adjudication." (Clemmer v. Hartford Ins. Co., supra, 22 Cal.3d at p. 875, 151 Cal. Rptr. 285, 587 P.2d 1098.)
We discern no basis for concluding Vega "should reasonably have expected to be bound by" the adjudication of lawsuits in which he did not participate in any way, in which he had no proprietary or financial interest, and over which he had no control *39 of any sort. (See Lynch v. Glass (1975) 44 Cal.App.3d 943, 949, 119 Cal.Rptr. 139 ["it cannot be said that appellants should reasonably have expected to be bound by the prior adjudication"; although appellants "were fully aware of the prior litigation, the appearance of one of them as a witness gave them no power to control any aspect of the case"]; Aronow v. LaCroix (1990) 219 Cal.App.3d 1039, 1052, 268 Cal.Rptr. 866 [where plaintiff was litigant, attorney and witness at various stages of prior case, but did not participate throughout, her connection with prior case "though falling short of the power to control, was so close that she should reasonably expect to be bound by the result"].) The only relationship between Vega and the prior lawsuit is that he and the plaintiffs in those suits were shareholders in the same company. We are aware of no precedent for finding this to be a "sufficiently close" relationship to justify application of the principle of preclusion, and we decline to create one.
DISPOSITION
The order dismissing the complaint, construed as a judgment of dismissal, is reversed and the cause is remanded for further proceedings. Appellant is entitled to recover his costs on appeal.
We concur: COOPER, P.J., and RUBIN, J.
NOTES
[*] Chin, J., dissented.
[1] Transmedia's Form 10-K annual report for fiscal year 1998, filed with the Securities and Exchange Commission, indicated Transmedia's working capital deficit raised "substantial doubt about its ability to continue as a going concern," and that its ability to do so was dependent on its ability to continue to effect sales of equity securities and issue of debt. Its annual report for fiscal year 1999, filed January 13, 2000, showed a slightly larger working capital deficit, decreased revenues and an increased net loss.
[2] On March 16, 2000, Heller Ehrman sent an e-mail informing Monsterbook and Vega as follows:
"On another note, I received a call from the lawyers for Transmedia. . . . There are a couple of disclosure issues relating to Transmedia that came up. Specifically, they are revising their most recent 10K (annual report) and are also about to close a private stock financing. Neither of these were included in the disclosure schedules that they sent to us, and they want them includedwhich means that they have to wait until they sort out their books. I have not spoken directly with their attorneys, we've just traded phone messages. Tom Stromberg who has been working on this deal also gave them a call. Neither we nor Transmedia's attorneys think that this is a big deal as it relates to the MonsterBook acquisition, but it will delay closing."
[3] The complaint in McKee's lawsuit, unlike Vega's complaint, did not allege that Jones Day prepared a complete disclosure of the $10 million financing, but provided Heller Ehrman with a sanitized version of the disclosure schedule without the toxic stock provisions. The trial court in the McKee case (Judge James C. Chalfant) concluded that: (1) Jones Day's statements that the preferred stock offering was "no big deal" and "standard" were nonactionable expressions of opinion. Because Jones Day's loyalty was owed only to Transmedia, not to Monsterbook's shareholders, Jones Day had no duty to disclose the details of the transaction. The statement was also nonactionable because of its casual nature, so that it could not be relied on by anyone. (2) The consent form prepared by Jones Day and signed by Transmedia and McKee was not a representation by Jones Day; and there was no evidence that the consent formconcerning the aggregate maximum of 6,815,000 shareswas a misrepresentation or a misleading half-truth. Therefore, Jones Day had no duty to disclose other terms of the preferred stock transaction. (3) McKee and the other shareholders could not have justifiably relied on Jones Day's opinions; any reliance on Jones Day's opinion that the transaction was "standard" or "no big deal" would have been unreasonable as a matter of law.
[4] Transmedia's default was entered on October 2, 2003.
[5] The trial court's order dismissed Vega's complaint with prejudice, but no judgment was entered for Jones Day in accordance with the order. Since the case is fully briefed, in the interests of judicial economy we will construe the order as a judgment of dismissal. (See Smith v. Hopland Band of Pomo Indians (2002) 95 Cal.App.4th 1, 3, fn. 1, 115 Cal. Rptr.2d 455 [premature appeal from order sustaining demurrer and granting motion to dismiss; "[a]lthough we fail to understand why the clearly established law on this point continues to be disregarded, in the interest of judicial economy, we shall deem the order to incorporate a judgment of dismissal"].)
[6] The demurrer to Vega's cause of action for negligent misrepresentation was properly sustained by the trial court, since such a claim requires a positive assertion. (Wilson v. Century 21 Great Western Realty (1993) 15 Cal. App.4th 298, 306, 18 Cal.Rptr.2d 779 [negligent misrepresentation is a species of fraud requiring a positive assertion; an implied assertion or representation is not enough].) Since no positive assertions are alleged, other than the comments that the financing was "standard" and "nothing unusual," no claim for negligent misrepresentation is stated.
[7] See Civil Code sections 1710, subdivision 3 (defining deceit as including "[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact"), and 1572, subdivision 3 (defining actual fraud in a contract setting to include the "suppression of that which is true, by one having knowledge or belief of the fact").
[8] In Shafer, supra, 107 Cal.App.4th 54, 131 Cal.Rptr.2d 777, the Shafers recovered a judgment against an insured, and asked the insurer to satisfy the judgment. The insurer's lawyer told the Shafers that the insurer had not agreed to provide indemnity for willful acts, while in fact, as the lawyer well knew, the insurer had agreed to such indemnification; the lawyer made the false statement to induce the Shafers to forgo full payment on the judgment. (Shafer, supra, 107 Cal. App.4th at p. 66, 131 Cal.Rptr.2d 777.) The court observed that the lawyer "owed the Shafers a duty not to make fraudulent statements about the insurance coverage provided by [the insurer]." (Id. at p. 67, 131 Cal. Rptr.2d 777.) Jones Day says that in Shafer, the applicable provisions of the insurance code gave rise to a "special relationship" and "independent duties" to the plaintiffs since they were third party beneficiaries of the insurance contract. However, Shafer nowhere requires, or suggests the need for, a "special relationship" as a predicate to a fraud claim against a lawyer. Indeed, while the facts in Shafer are different, the principle it applied was not new. Shafer refers to sources citing cases from 28 states holding that an attorney can be liable to a nonclient, even an adversary in litigation, for fraud or deceit. (Shafer, supra, 107 Cal.App.4th at p. 75, 131 Cal. Rptr.2d 777.)
[9] See also Pavicich v. Santucci (2000) 85 Cal. App.4th 382, 398, 102 Cal.Rptr.2d 125 ("[t]his is not a situation where we are required to apply the rule that a `duty to disclose a material fact normally arises only where there exists a confidential relation between the parties or other special circumstances require disclosure. . . .' [Citation.] This is because of the principle that `where one does speak he must speak the whole truth to the end that he does not conceal any facts which materially qualify those stated'") quoting Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 201, 227 Cal.Rptr. 887.
[10] While both parties refer to the consent form, it is not a part of the record in this case.
[11] Jones Day cites several cases in connection with its statement that Vega could have discovered, with reasonable diligence, the "toxic" provisions of the financing. These cases reject fraudulent concealment claims where the information in question was readily accessible, or plaintiff was on inquiry notice of the allegedly concealed information. (E.g., Stevenson v. Baum (1998) 65 Cal.App.4th 159, 75 Cal.Rptr.2d 904 [affirming summary judgment; the plaintiffs could not state cause of action for fraudulent nondisclosure of a pipeline easement as a matter of law, because the purchase contract put the plaintiffs on notice that they took title subject to easements of record]; Clayton v. Landsing Pacific Fund, Inc. (N.D.Cal. May 16, 2002) 2002 U.S. Dist. Lexis 9446 [no claim for fraudulent concealment of the decline in value of plaintiff's investment, where value of shares was publicly available, and in addition letter from the defendants actually disclosed the decrease in the value of the plaintiff's investment].)
[12] The trial court stated it was "willing to sustain [the demurrer] without leave to amend and just get this on the short track up to the court of appeal," although its general practice was to "give the other side a chance to amend if they think they can amend to cure the defect in the complaint. [¶] So it is up to you [Vega]." Vega's counsel responded, "Well, if the reason for the demurrer sustaining it without leave to amend is that the court feels that there is somehow a different duty vis-à-vis Jones, Day as there is with Transmedia." The court replied, "Well, that is one of the reasons." Counsel then said, "All right. Then I think it is better to take it up now. I don't want to fight Gibson, Dunn for a year and then be back here."
[13] Jones Day relies on Nelson v. Anderson (1999) 72 Cal.App.4th 111, 117, 124, 84 Cal. Rptr.2d 753, which held that the plaintiff the minority shareholder in a two-shareholder corporation had no standing as an individual to bring an action for breach of fiduciary duty against the majority shareholder. The plaintiff had no standing as an individual because the obligations allegedly violated which amounted to negligence and misfeasance in managing the corporation's business were "duties owed directly and immediately to the corporation." (Id. at p. 125, 84 Cal.Rptr.2d 753.) In this case, by contrast, the "duty" not to defraud another person is not a duty owed only to the corporation. Indeed, Nelson expressly states that "the same facts regarding injury to the corporation may underlie a personal cause of action, such as . . . fraud . . . [but] Nelson has not alleged or proved the elements" of a fraud cause of action. (Id. at pp. 124-125 & fn. 6, 84 Cal. Rptr.2d 753.)
[14] Since Vega's negligent misrepresentation claim has been disposed of on other grounds (see fn. 6, ante), we need not consider whether it is governed by and barred by a shorter statute of limitations.
[15] "`Where no duty is imposed by law upon a person to make inquiry, and where under the circumstances "a prudent man" would not be put upon inquiry, the mere fact that means of knowledge are open to a plaintiff, and he has not availed himself of them, does not debar him from relief when thereafter he shall make actual discovery. The circumstances must be such that the inquiry becomes a duty, and the failure to make it a negligent omission.'" (Hobart v. Hobart Estate Co., supra, 26 Cal.2d at p. 438, 159 P.2d 958, quoting Tarke v. Bingham (1898) 123 Cal. 163, 166, 55 P. 759, italics omitted.)
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2259584/
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777 F.Supp. 508 (1990)
Richard ROPER, Administrator, Plaintiff,
v.
CONSURVE, INC., d/b/a BankAmericard Center and Deposit Guaranty National Bank, Defendants.
Civ. A. No. J81-0508(W).
United States District Court, S.D. Mississippi, Jackson Division.
June 15, 1990.
*509 Toxey Hall Smith, Biloxi, Miss., W. Robert Wilson, Jr., Jackson, Miss., Robert P. Denniston, Frederick G. Helmsing, Mobile, Ala., for plaintiff.
Vardaman S. Dunn, William F. Goodman, Jr., Jackson, Miss., for defendants.
MEMORANDUM OPINION AND ORDER
WINGATE, District Judge.
This is a class action suit brought pursuant to 28 U.S.C. § 1331. The named plaintiffs, two "BankAmericard" bank cardholders, sued the defendant national bank which issued the bank credit cards contending that certain charges made by defendant bank were usurious under the National Bank Act, 12 U.S.C. §§ 85 and 86. This case was appealed to the Fifth Circuit Court of Appeals, Roper v. Consurve, Inc., 578 F.2d 1106 (5th Cir.1978), and thereafter to the United States Supreme Court, Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980), on a procedural issue relative to class certification. Subsequently, in an order dated November 10, 1980, this Court certified plaintiffs' class as:
All holders of bankamericard credit cards issued by Deposit Guaranty National Bank by whom finance charges were paid during the period between September 17, 1969, and January 7, 1974.
The parties have filed cross motions for partial summary judgment on the issue of defendants' liability under 12 U.S.C. §§ 85 and 86 of the National Bank Act, which incorporates by reference state usury laws.
Essentially, plaintiffs contend that defendants' finance charges to the consumer cardholders exceeded the eight percent (8%) per annum maximum amount of interest allowable under Mississippi law at the time. Defendants counter that under the "most favored lenders" doctrine and the retroactive application of § 75-17-1, et seq., Miss. Code Ann. (Supp.1975), defendants were entitled to the interest rate Mississippi afforded its most favored lender and, thus, not in violation of the usury laws as claimed by plaintiffs.
Having thoroughly considered the briefs and arguments of the parties and being fully advised in the premises, the Court finds for the defendants for the reasons that follow.
INTEREST RATES CHARGED
On behalf of BankAmerica cardholders who paid finance charges during the period of September 17, 1969, to January 7, 1974, plaintiff cardholders brought this case against Deposit Guaranty National Bank and its wholly owned subsidiary, Consurve, Inc., d/b/a BankAmericard Center. In the normal sequence of the BankAmerica card's use, plaintiffs bought merchandise or services from merchants who had previously contracted with the bank to permit such credit purchases. The merchant would then sell the credit instrument to the bank at a discount. Thereafter, the bank billed the cardholder and charged interest on the unpaid balance, if the balance owed was not paid within a certain time frame. Roper v. Consurve, Inc., 578 F.2d 1106, 1109 (5th Cir.1978), affirmed 445 U.S. 326, 100 S.Ct. 1166, 63 L.Ed.2d 427, rehearing denied 446 U.S. 947, 100 S.Ct. 2177, 64 L.Ed.2d 804 (1980). The process for computation *510 of the charges to the credit card holders was described by the Fifth Circuit as follows:
During the period in question, the bank made a monthly service charge of 1½% on the unpaid balance of each account. However, each customer was allowed 30 days within which to pay his account without any service charge; if payment was not received within that time, the computer added to the customer's next bill 1½% of the unpaid portion of the prior bill, which was shown as a new balance. This is the charge contended to be usurious. Thus, if a customer brought merchandise and the charge slip for this was received by the bank the day after a monthly bill had been mailed to him, he would not be billed for the new charge for almost 30 days and would then have 30 more days within which to make payment in full without incurring the service charge. On the other hand, an item might be received by the bank on the day before the new statement was prepared, yet the service charge for it would be computed on the same basis as if it were received at the beginning of the month. (When he received his bill, the customer might also elect to pay it in installments, in that case, the service charge was made on unpaid installments).
About 35% of the bank's customers did not incur a service charge. For the 65% who did the rate was always 1½% on the unpaid balance; if the effective rate was computed based on the number of days from the date the bank received each charge until it was paid, that effective rate would vary for each customer each month. (Emphasis added).
Roper, supra, at 1109-1110.
The controversy between the parties evolves from plaintiffs' argument that under Mississippi law the maximum rate of interest which defendants could have legally charged bank cardholders was eight percent (8%) per annum. Inasmuch as defendants charged eighteen percent (18%) per annum, plaintiffs contend that defendants' rate was usurious. In opposition, defendants claim that it was entitled to charge 1½% monthly interest or finance charge (18% per annum) pursuant to the retroactive application of the 1974 amendment to the Mississippi interest statute, Miss.Code Ann. § 75-17-1, et seq. (Supp.1975). Additionally, defendants argue that under the "most favored lender doctrine," it is entitled to charge the maximum interest rate permitted by Mississippi for the state's most favored lender.
STATE LAW
The rate of interest that a national bank may charge is ultimately a question of federal law, and the matter is governed by 12 U.S.C. § 85. Fisher v. First National Bank of Omaha, 548 F.2d 255 (8th Cir. 1977). By its own terms, 12 U.S.C. § 85 recites:
§ 85. Rate of interest on loans, discounts, and purchases. Any association may take, receive, reserve, and charge on any loan or discount made, or upon any notes, bills of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State, Territory or District where the bank is located, or at a rate of 1 per centum in excess of the discount rate on ninety-day commercial paper in effect at the Federal reserve bank in the Federal reserve district where the bank is located, whichever may be greater, and no more, except where by the laws of any State a different rate is limited for banks organized under State laws, the rate so limited shall be allowed for associations organized or existing in any such State under this chapter .... (Emphasis added).
Thus, section 85 plainly provides that a national bank may charge interest at the rate allowed by the laws of the state in which the bank is located. Marquette National Bank of Minneapolis v. First of Omaha Service, 439 U.S. 299, 99 S.Ct. 540, 54 5, 58 L.Ed.2d 534 (1978).
A determination of the rate of interest allowed by state law has been accomplished by reference to the state court's interpretation of the state's constitution *511 and statutes. First National Bank in Mena v. Nowlin, 509 F.2d 872, 876 (8th Cir.1975), citing Citizens National Bank v. Donnell, 195 U.S. 369, 374, 25 S.Ct. 49, 50, 49 L.Ed. 238 (1904). As such, 12 U.S.C. § 85 does not merely incorporate the numerical rates established by the state, but adopts and encompasses the entire body of case law interpreting the state's limitation of usury. Nowlin, 509 F.2d at 876.
Under § 75-17-1, et seq., Miss.Code Ann. (1972 and its supplement), each provision of the statute establishes a maximum interest rate for various types of loan or credit transactions. Allied Chemical Corporation v. MacKay, 695 F.2d 854, 857 (5th Cir.1983). Plaintiffs rely on the Mississippi Code of 1942, as amended, Section 36, Laws 1966, Chapter 317, Section 1, effective from and after passage (approved June 15, 1966), which stated that:
The legal rate of interest on all notes, accounts and contracts shall be six percent (6%) per annum but contracts may be made, in writing, for a payment of a rate of interest as great as eight percent (8%) per annum.
Thus, plaintiffs contend that the 8% maximum contract rate of interest governs the entire 1969 to 1974 period involved in this litigation. To the contrary, defendants rely on Paragraph (6) of § 75-17-1, Miss.Code Ann. (Supp.1975), which establishes the maximum interest rate for extensions of credit that are incidental to retail sales. Allied Chemical, 695 F.2d at 857. Paragraph (6) of the 1974 amendment to the Mississippi interest rate statute, Chapter 564, Laws of 1974 (now appearing as § 75-17-1, et seq.), provides:
(6) Notwithstanding the foregoing and any other provision of law to the contrary, any retail seller, and any lender or issuer of credit cards may lawfully contract for and receive a finance charge for credit sales of goods, services or merchandise certificates or for cash advanced or other credit extended pursuant to a revolving charge agreement by applying a periodic rate no greater than one and one half percent (1½%) per month to:
(a) the average daily balance of the account, exclusive of finance charge, in each billing period;
(b) an amount that shall not exceed the balance of the account exclusive of the finance charge, on the first day of each billing period without adding purchases or miscellaneous debits to the account during the billing period; or
(c) any balance of the account during each billing period which does not produce an amount of finance charge in excess of that permitted by (a) or (b). Notwithstanding the foregoing, the maximum finance charge which may be charged or collected on any balance in excess of Eight Hundred Dollars ($800.00) shall be determined by applying a periodic rate no greater than one and one quarter percent (1¼%) per month to that portion of the applicable balance which is in excess of Eight Hundred Dollars ($800.00) but not greater than Twelve Hundred Dollars ($1,200.00) and by applying a periodic rate not greater than one percent (1%) of the principal balance which exceeds Twelve Hundred Dollars ($1,200.00) ....
Additionally, Paragraph (9) defines finance charge in the 1974 amendment:
(9) The term "finance charge" ... means the amount of rate paid or payable, directly or indirectly, by a debtor for receiving a loan or incident to or as a condition of the extension of credit, including but not limited to interest, ... finance charges, ... discount, ... service charges, transaction charges, activity charges, carrying charges ... or any other cost or expense to the debtor for services rendered or to be rendered .... A licensee under the Small Loan Regulatory Act ... and the Small Loan Privilege Tax Law ... may contract for and receive finance charges as authorized by paragraph (7) hereof regardless of the purpose for which the loan or other extension of credit is made.
Finally, defendants argue that the retroactive application of Chapter 564, Laws of 1974 [which appeared as section 75-17-1, et seq., (Supp.1975) ] brings the interest rates *512 charged within the provisions of the statutes so as to defeat the contentions that the charges by defendants were usurious.
Supportive of its argument of retroactivity, defendants cite the Mississippi Supreme Court's ruling in Cappaert v. Bierman, 339 So.2d 1355, 1357 (Miss.1976), that the 1974 amendment to the interest rate statute applied retroactively.
In Cappaert, plaintiff brought suit against a defendant on the ground that the note sued on was part of a usurious transaction. The Court stated:
Mississippi Code Annotated section 75-17-1 (1972) established the maximum lawful interest at a rate of eight percent per annum. Section 75-17-1 was amended by Chapter 564, Laws of 1974 [now appearing as § 75-17-1, et seq.] and became effective July 1, 1974. Chapter 564 increased the legal rate of interest, for loans of this nature, to a maximum of ten percent per annum. The judgment appealed from was dated December 19, 1974. The trial judge was of the opinion that it was immaterial which law governed the transaction, because in his opinion the transaction was usurious under either law.
Section 7, Chapter 564, Laws of 1974 [now appearing as Mississippi Code Annotated section 75-17-17 (Supp.1975)], states:
Loans made and credit extended prior to the effective date of this act shall continue to be governed by the provisions of laws governing such loans and extensions of credit which were in force at the time such loans or extensions of credit were made, including laws repealed hereby except that finance charges contracted for or received prior to the effective date of this act shall not be unlawful if the finance charge contracted for or received conforms with the provisions of this act or other law then in effect. Any loan or note renewed, refinanced, deferred or otherwise extended or altered on or after the effective date of this act shall conform with the provisions of this act. (Emphasis supplied in the original).
We hold that the 1974 statute as written applies retroactively, and that the ten percent yield provided in that law should be applied to the present case in determining whether usury was stipulated for or received.
Cappaert, 339 So.2d at 1357.
Defendants also cite a Tennessee district court's ruling to corroborate its contention that the interest rate charged was not usurious because of the retroactive application of § 75-17-1, et seq., Miss.Code Ann. (Supp.1975). Walters v. First National Bank of Memphis, No. 74-267-M (W.D. Tenn., June 12, 1985). In Walters, plaintiff, a Mississippi resident and BankAmericard bank cardholder, filed an action seeking damages pursuant to 12 U.S.C. §§ 85 and 86 alleging that interest charged was usurious under Tennessee law. Ruling that Mississippi law applied, the Tennessee Court held that the charges were not usurious under the usury statutes of either Mississippi or Tennessee. Citing § 75-17-17, Miss.Code Ann. (Supp.1975), the Tennessee court stated:
The disputed transactions were, according to defendant, tailored to fit the law of Mississippi at the time. Whether or not this is true is irrelevant since the retroactivity provision brings the charges here squarely within the law .... Finally, while plaintiff is correct in asserting that federal law controls in cases concerning national banks, 12 U.S.C. §§ 85 and 86, both incorporate by reference state usury laws. Thus, the federal rates are keyed to the state rates and must change as the respective states see fit, even retroactively. Federal law has long recognized that the retroactive lifting of usury limits is permissible since usury laws are generally remedial, rather than substantive. Ewell v. Daggs, 108 U.S. 143 [2 S.Ct. 408, 27 L.Ed. 682] (1883). The fact that 12 U.S.C. § 86 provides a penalty for the violation of a usury limit does not in any way unhinge it from state usury laws. To rule otherwise would place national banks on an unequal footing with state banks, contrary to the intent of the drafters of the National Bank Act. See, Tiffany v. National *513 Bank of Missouri, 18 Wall. 409 [21 L.Ed. 862] (1874).
Walters, supra, at 5-8.
Thus, defendants' primary position is that the Cappaert ruling of the retroactivity of § 75-17-1, et seq., must be applied to defendant national bank so as to place it on an equal basis with all other lenders of credit in Mississippi in the spirit of the "most favored lender doctrine" espoused under 12 U.S.C. § 85 of the National Bank Act. Plaintiffs do not dispute that Cappaert expressly upholds the retroactive application of § 75-17-1, et seq., Miss.Code Ann. (Supp.1975), but argues that such retroactive application is contra to the dictates of the federal savings statute, 1 U.S.C. § 109.
Section 109 of Title 1 of the United States Code provides that the repeal of any statute shall not have the effect to release or extinguish any penalty, forfeiture, or liability incurred under the repealed statute unless the repealing Act expressly provides and that the repealed statute shall be treated as still in force for a proper action or prosecuting for the enforcement of such penalty, forfeiture, or liability.
The federal Act pertaining to this case adopts not only the numerical interest rates set by state statute, but also the entire case law of the state interpreting the state's limitations on usury. First National Bank In Mena v. Nowlin, supra, at page 876, 12 U.S.C. § 85. Mississippi law has expressly stated that newly enacted statutes, with no saving clause specifically included in any repealed or modified statutes extinguished any accrued right in the usury statute. Deposit Guaranty Bank & Trust Co. v. Williams, 193 Miss. 432, 9 So.2d 638 (Miss.1942). The Mississippi Supreme Court stated:
Many decisions in this state have affirmed the rule, which generally prevails, that the effect of a repealed statute is to abrogate the repealed statute as completely as if it had never been passed, and that a statute modifying a previous statute has the same effect as though the statute had all the while previously existed in the same language as that contained in the modified statute, unless the repealing or modifying statute contains a saving clause. (Citations omitted).
The result of this rule is that every right or remedy created solely by the repealed or modified statute disappears or falls with the repealed or modified statute unless carried to final judgment before the repeal or modification, save that no such repeal or modification shall be permitted to impair the obligation of a contract or abrogate a vested right .... Rights of action or defenses on account of usury are not a part of the common law. They are solely the creations of statute, and such statutes are in the nature of regulations in the public interest. Although a right conferred solely by statute in the public interest may have accrued before the repeal or modification, it does not follow that the accrued right in such cases is a vested right, in the constitutional sense. There is no vested right in the usury laws which, therefore, may be repealed or changed so as to affect causes of action and defenses even in pending suits. 12 C.J., p. 974; 16 C.J.S., Constitutional Law, § 254. By the great weight of authority, the legislature may repeal a usury law and no one has any vested right to take advantage of such laws. 12 Am.Jur. p. 65.
Deposit Guaranty Bank & Trust Co. v. Williams, 9 So.2d at 640.
Similarly, the United States Supreme Court has held that the repeal of a usury law, without a savings clause, operated retrospectively to cut off the defense for the future, even in actions on contracts previously made, thereby rejecting all arguments of deprivation of vested rights or impairment of the obligation of contract. Ewell v. Daggs, 108 U.S. 143, 151, 2 S.Ct. 408, 413, 27 L.Ed. 682 (1883).
Consequently, the Court finds no conflict between 1 U.S.C. § 109, a federal savings statute, and the retroactive application of Miss.Code Ann. § 75-17-1 (Supp.1975). Section 109 of Title 1 of the United States Code is applicable to the repeal of any federal statute. This in no way imposes a *514 restriction upon the power of a state to repeal, modify, or make retroactive its usury statute merely because 12 U.S.C. § 85 adopts the maximum rate of interest allowable by the state.
"MOST FAVORED LENDER" DOCTRINE
Derivative of 12 U.S.C. § 85 the "most favored lender" doctrine, was first established in Tiffany v. The National Bank of the State of Missouri, 18 Wall. 409, 85 U.S. 409, 21 L.Ed. 862 (1873). In Tiffany, the United States Supreme Court held that national banks were authorized under 12 U.S.C. § 85 to charge interest at the maximum rate permitted by state law for the state's most favored lender. Tiffany, 18 Wall. at 411. Tiffany resolved the issue of whether the 30th section of the act of Congress of June 3, 1864 (presently 12 U.S.C. § 85), prohibited national banking associations in the State of Missouri from charging a greater rate of interest than eight percent (8%) which was the rate limited by the laws of the state for banks organized under its laws. Id. at 410. Finding that the State of Missouri allowed all persons, except banks organized under the state laws, to charge ten percent (10%) per annum as interest, the Court held that defendant Bank of Missouri charges of nine percent (9%) on loans made were not usurious. Thus, reasoning that national banks were not restricted to the rate allowed to banks of the state where a greater rate was allowed to individual lenders generally, the Court stated:
It cannot be doubted, in view of the purpose of Congress in providing for the organization of national banking associations, that it was intended to give them a firm footing in the different states where they might be located. It was expected they would come into competition with state banks, and it was intended to give them at least equal advantages in such competition. In order to accomplish this they were empowered to reserve interest at the same rates, whatever those rates might be, which were allowed to similar state institutions. This was considered indispensable to protect them against possible unfriendly legislation ... unfriendly legislation might make their existence in the state impossible .... The only mode of guarding against such contingencies was that which, we think, Congress adopted. It was to allow national associations the rate allowed by the state to natural persons generally, and a higher rate, if state banks of issue were authorized to charge a higher rate. This construction accords with the purpose of Congress, and carries it out .... National banks have been national favorites .... In harmony with this policy is the construction we think should be given to the 30th section of the Act of Congress we have been considering. It gives advantages to national banks over their state competitors .... The result of this is that the defendants in receiving nine percent interest upon the loans made by them have not transgressed the Act of Congress and consequently they are under no liability of the plaintiff.
Tiffany, supra, at 412-413.
It is defendants' contention that the Tiffany ruling, 12 U.S.C. § 85 of the National Bank Act, accorded national banks the right to charge the interest rate afforded state competitors, whether such competitors were state banks or non-bank lenders. Northway Lanes v. Hackley Union National Bank & Trust Co., 464 F.2d 855 (6th Cir.1972).[1]
In 1974, the Mississippi Legislature, pursuant to House Bill No. 819, Chapter 564, amended the state's usury statute, Miss. *515 Code Ann. § 75-17-1 (Supp.1975). The preamble to the Act recites that it is:
AN ACT to simplify and modernize the laws governing the lending of money, usury, extending credit, and the making of credit sales; to protect consumers against unfair practices by suppliers of credit and to provide rate ceilings; to permit and encourage the development of sound consumer credit practices and to insure an adequate supply of credit.
Section 75-17-1 was amended to permit rates of interest on all notes, accounts, and contracts of six percent (6%) except that contracts could be made in writing for payment of finance charges as otherwise provided by the Act. Miss.Code Ann. § 75-17-1 (Supp.1975). Section 75-17-1(2) permitted any borrower to contract for payment of a finance charge of ten percent (10%) per annum for any loan or other extension of credit made directly or indirectly to the borrower. The amendment also provides that domestic or foreign corporations and non-profit corporations organized to own, operate, or finance an educational facility could agree to pay any rate of finance charge in excess of the maximum rate provided under § 75-17-1, but not to exceed fifteen percent (15%) per annum on any contract or other obligation under which the principal balance to be repaid exceeded $2,500.00. Miss.Code Ann. § 75-17-1(2), (3) (1975 Supp.). Section 75-17-1(6) under the Act provided that any lender or issuer of credit cards may lawfully contract and receive a finance charge from one percent (1%) to one and one half percent (1½%) per month. For any loan or extension of credit made by a licensee under the Small Loan Regulatory Act and Small Loan Privilege Tax Law, the Act provided that the licensee could contract for and receive finance charges from twelve percent (12%) to thirty-six percent (36%) per annum depending on balances to be repaid. § 75-17-1(7)(a)-(d). The retroactive provision of the Act provided loans made or credit extended prior to the Act's effective date, July 1, 1974, would be governed by the laws in force at the time such loans or credit were extended except that finance charges contracted for or received prior to the Act's effective date would not be unlawful if the finance charge complied with the provisions of the Act or other law then in effect. Chapter 564, Laws of 1974 [now appearing as section 75-17-17 (Supp.1989)].
CONCLUSION
Inasmuch as Mississippi's usury statute is highly penal in nature, it must be strictly construed in favor of the creditor. Allied Chemical Corp. v. McKay, 695 F.2d 854, 857 (5th Cir.1983). Accordingly, the court is of the opinion that the retroactive application of Mississippi's 1974 amendment to its usury statute, Cappaert v. Bierman, 339 So.2d 1355 (Miss.1976), and the application of the most favored lender doctrine pursuant to the retroactive statute, see, Tiffany, 18 Wall. 409, entitled the defendants to lawfully charge a maximum interest rate of one and one-half percent per month on unpaid credit card balances. This determination disposes of the question of usury. However, the defendants alternatively contend, pursuant to the most favored lender doctrine and Mississippi's 1958 Small Loan Act, that a national bank could lawfully charge twelve (12) percent to thirty-six (36) percent per annum on unpaid credit card balances. In light of the court's determination that the defendants did not engage in usurious practices, it is not necessary to dispose of this issue. However, in passing, the court has considered the recent Mississippi Supreme Court decision in Denley v. Peoples Bank of Indianola, 553 So.2d 494 (Miss.1989), with regard to the defendants' contention that they were entitled to claim most favored lender status under the 1958 Small Loan Act. The Mississippi Supreme Court quoted a recent statement of Comptroller of the Currency regarding the most favored lender doctrine:
A national bank may charge interest at the maximum rate permitted by State law to any competing State-chartered or licensed lending institution. If State law permits a higher interest rate on a specific class of loans, a national bank making such loans at such higher rate is subject *516 only to the provisions of State law relating to such class loans that are material to the determination of the interest rate. For example, a national bank may lawfully charge the highest rate permitted to be charged by a State-licensed small loan company or Morris plan bank, without being so licensed. (Citations omitted).
* * * * * *
Bank and Amici misread the (most favored lender) doctrine to provide that if any lender in the state may engage in a practice regarding interest rates or finance charges, a bank covered by the doctrine may seize upon the state authority and employ it across the board even to credits in no way of the class covered by the state enactment and notwithstanding that any state-chartered competitors are prohibited the rates.
553 So.2d at pages 503, 504.
This court is not prepared to rule that small loans and credit card charges are the same class of credits. Moreover, the plaintiffs do not assert that the defendants' alleged usury occurred in connection with small loan transactions. The court sees the 1958 Small Loan Act question as a separate issue unrelated to the allegations of credit card usury in this case.
Finally, the defendants' claim to be absolved of usury pursuant to the combined mandates of the time-price doctrine and the most favored lender doctrine. A solidly embedded principle of Mississippi law, the time-price doctrine has been explained by the Mississippi Supreme Court as follows:
Where property is sold on credit, the fact that the difference between the credit price and the cash price exceeds the percentage permitted by the usury laws will not render a transaction usurious if the parties acted in good faith. A vendor may fix on his property one price for cash and another for credit, and the mere fact that the credit price exceeds the cost price by a greater percentage than is permitted by the usury laws is a matter of concern to the parties but not to the courts, barring evidence of bad faith. If the parties have acted in good faith, such a transaction is not a loan, and not usurious.
The Court is of the opinion that the time-price differential or the time-price doctrine is inapplicable to the case sub judice. A review of Mississippi case law sustaining the doctrine reveals that the doctrine has exclusively been applied to installment sales contracts for a fixed term of repayment. The differential between the cash price quoted to a consumer and the credit price selected by the consumer was not considered interest by the Mississippi Supreme Court. Mullins v. Merchandise Sales Company, 192 So.2d 700, 704 (Miss. 1966); Bryant v. Securities Investment Company, 102 So.2d 701, 702 (Miss.1958).
Thus, the court finds that the 1974 amendment to Miss.Code Ann. § 75-17-1, et seq., applies retroactively to preclude the plaintiffs' usury claims. The court further finds that the time-price doctrine does not apply to the circumstances of this case.
IT IS, THEREFORE, ORDERED AND ADJUDGED that the motion of the plaintiffs for partial summary judgment is hereby denied, and the motion of the defendants for summary judgment is hereby granted in accordance with this opinion. A separate judgment shall be entered in accordance with the local rules.
SO ORDERED.
NOTES
[1] The "most favored lender" status for national banks under Tiffany has since been incorporated into the regulations of the Comptroller of Currency. See 12 C.F.R. § 7.7310(a) which recites:
(a) A national bank may charge interest at the maximum rate permitted by State law to any competing State-chartered or licensed lending institution. If State law permits a higher interest rate on a specified class of loans, a national bank making such loans at such higher rate is subject only to the provisions of State law relating to such class of loans that are material to the determination of the interest rate.
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280 Pa. Superior Ct. 187 (1980)
421 A.2d 468
COMMONWEALTH of Pennsylvania
v.
William RUSCHEL, Appellant.
Superior Court of Pennsylvania.
Submitted December 6, 1979.
Filed August 15, 1980.
Jonathan Blum, Assistant Public Defender, Wilkes-Barre, for appellant.
Chester B. Muroski, District Attorney, Wilkes-Barre, for Commonwealth, appellee.
*188 Before WICKERSHAM, BROSKY and EAGEN, JJ.[*]
PER CURIAM:
On March 19, 1979, appellant, William Ruschel, pleaded guilty to the charges of theft and criminal conspiracy to commit burglary. The court imposed a prison sentence of two and one-half years less one day to five years less one day to commence at the expiration of the prison sentence Ruschel was then serving.[1] He was ordered to pay the costs of prosecution and to serve the sentence in the Luzerne County Prison. This appeal followed.
Ruschel's sole claim is that the sentence was excessive. This issue has been waived.
Rule 302(a) of the Pennsylvania Rules of Appellate Procedure[2] provides that issues not raised in the trial court are waived and cannot be raised for the first time on appeal. Ruschel's complaint of sentence excessiveness was not raised until this appeal. It is therefore waived.
Prior to July 1, 1978, there was no established procedure for appellate review of a sentence within authorized limits.[3] In Commonwealth v. Riggins, 474 Pa. 115, 377 A.2d 140 (1977), this matter was referred to the Procedural Rules Committee, and, as a result, Pa.R.Crim.P. 1410 was drafted and later adopted by the Supreme Court. This rule establishes the correct procedure for that review.[4]
The proper procedure to preserve a challenge to a sentence is to file in the trial court a written motion to *189 modify sentence within ten days of the imposition of sentence.[5] The purpose of this rule is to initially provide the sentencing court with the opportunity to modify the sentence. This follows the general principle of Commonwealth v. Clair, 458 Pa. 418, 326 A.2d 272 (1974) that a specific, timely objection will insure a trial court an opportunity to correct its own errors and not place the appellate court in the position of deciding an issue on which the trial court has not ruled.
Since Pa.R.Crim.P. 1410 became effective on July 1, 1978 and Ruschel was sentenced on April 4, 1979, a motion to modify sentence was the proper procedure to preserve the issue of the excessiveness of the sentence. Since Ruschel did not follow the procedure mandated by the rule, the issue has not been preserved.
Judgment of sentence affirmed.
NOTES
[*] Chief Justice MICHAEL J. EAGEN of the Supreme Court of Pennsylvania, is sitting by designation.
[1] At this time, Ruschel had been recommitted for parole violations.
[2] Pa.R.A.P. 302(a).
[3] Ruschel does not contest the lawfulness of the sentence but merely the duration thereof.
[4] Even before this procedural rule existed, the Supreme Court held in Commonwealth v. Walls, 481 Pa. 1, 4, 391 A.2d 1064, 1065 (1978), that a failure to object to the sentence during sentencing waived the issue.
[5] Pa.R.Crim.P. 1410.
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279 Pa. Superior Ct. 413 (1980)
421 A.2d 267
COMMONWEALTH of Pennsylvania
v.
Curt THOMAS, Appellant.
Superior Court of Pennsylvania.
Argued March 18, 1980.
Filed July 11, 1980.
*414 Dennis H. Eisman, Philadelphia, for appellant.
Ann Lebowitz, Assistant District Attorney, Philadelphia, for Commonwealth, appellee.
Before HESTER, WICKERSHAM and LIPEZ, JJ.
WICKERSHAM, Judge:
On December 24, 1977, Germaine Stewart, age 18, was exiting from Wimpys at Broad and Girard Streets in the City of Philadelphia. She was intending to go to her mother's *415 home in the West Oak Lane area, when she encountered Curt Thomas, one of the co-defendants and the appellant herein. He identified himself as a hack or taxi and offered to take her to her destination. They reached his car a block away, and as Germaine began to enter the car on the passenger side, she was pushed into the back seat by co-defendant.
She was threatened, told to be quiet, and her right arm was squeezed. The three drove to a vacant building at 15th and Girard Avenues and she was forcibly taken inside and up to a third floor apartment containing only a mattress.[1]
She was fondled, her clothes were removed, and she was pushed onto the mattress. She cried, protested and resisted. She feared for her life. The appellant, Curt Thomas, had or attempted intercourse with her four times and co-defendant twice. They tried to force oral sex on her and anal sex over a two and one half hour period.
The victim, upon leaving the premises, immediately reported the crime to the police. She identified the vehicle and she picked both defendants from separate line-ups. She took the police to the scene and made positive in-court identification of both defendants in the jury trial before the Honorable Joseph P. Braig of the First Judicial District of Pennsylvania. Neither defendant testified and after jury deliberation both were convicted of rape, attempted involuntary deviate sexual intercourse, simple assault, aggravated assault and criminal conspiracy.
The defendants were sentenced to twelve and one-half to thirty years, and Curt Thomas, appellant, has filed this direct appeal.[2]
Appellant, who is represented by private counsel in this appeal, and who was represented at trial by an Assistant Public Defender, raises seven issues in seeking a new trial.[3]
*416 Through cross-examination of Commonwealth witnesses, the defense attempted to establish consent as a defense.[4]
The crime of rape is defined as:
A person commits a felony of the first degree when he engages in sexual intercourse with another person not his spouse:
(1) by forcible compulsion;
(2) by threat of forcible compulsion that would prevent resistance by a person of reasonable resolution;
(3) who is unconscious; or
(4) who is so mentally deranged or deficient that such person is incapable of consent.
1972, Dec. 6, P.L. 1482, No. 334, § 1, eff. June 6, 1973, 18 Pa.C.S.A. § 3121.
In Commonwealth v. Rough, 275 Pa.Super. 50, 418 A.2d 605 (1979) we said at pages 56-57 of 275 Pa.Super., at 608-609 of 418 A.2d:
"The only element appellant disputes was sufficiently proved is forcible compulsion. The force necessary to support *417 a rape conviction need only be such as to establish a lack of consent, and it is relative depending upon the particular circumstances. Commonwealth v. Irvin, 260 Pa.Super. 122, 393 A.2d 1042 (1978). `[C]onsent is an act of free will. It is not the absence of resistance in the face of actual or threatened force inducing a woman to submit to a carnal act'; active opposition is not a prerequisite to finding lack of consent. Commonwealth v. Hayden, 224 Pa.Super. 354, 356-57, 307 A.2d 389, 390 (1973). See Commonwealth v. Moskorison, 170 Pa.Super. 332, 85 A.2d 644 (1952). Outcry, struggle and fresh complaint need not be proven to sustain a rape conviction, but are merely factors to be weighed by the trier of fact. Johnson Appeal, 445 Pa. 270, 284 A.2d 780 (1971); Commonwealth v. Hornberger, 199 Pa.Super. 174, 184 A.2d 276 (1962). In the present case, the victim's testimony as to her fear and appellant's forceful treatment of her demonstrated sufficient lack of consent to sustain the verdict."
The trial judge fully and fairly charged the jury in this regard and expanded his charge to the jury after request of defense counsel. (N.T. 322 et seq.)
Next, appellant contends that trial counsel was ineffective for failing to object to alleged improper remarks made by the prosecutor during his summation.
The ineffectiveness claim is not waived since, as noted above, new counsel represents Thomas for the first time at the post conviction state. Commonwealth v. Triplett, 476 Pa. 83, 381 A.2d 877 (1977).
We have carefully examined the closing arguments of counsel as set forth in the record. (N.T. 199-269.) The proper test is set forth in Commonwealth v. Anderson, 490 Pa. 225, 415 A.2d 887 (1980), wherein Chief Justice Eagen said:
"We have repeatedly said the district attorney is a quasi-judicial officer representing the Commonwealth, and his duty is to seek justice, not just convictions. See Commonwealth v. Mayberry, 479 Pa. 23, 387 A.2d 815 (1978); Commonwealth v. Gilman, 470 Pa. 179, 368 A.2d 253 (1977). The *418 district attorney must limit his remarks to facts in evidence and legitimate inferences therefrom. Commonwealth v. Mayberry, supra; Commonwealth v. Gilman, supra; Commonwealth v. Goosby, 450 Pa. 609, 301 A.2d 673 (1973); Commonwealth v. Principatti, 260 Pa. 587, 104 A. 53 (1918). The district attorney may not ask the jury to draw unwarranted deductions from the evidence. Commonwealth v. Touri, 295 Pa. 50, 144 A. 761 (1929). During summation, the district attorney must present the facts in a manner which allows the jury to dispassionately and objectively evaluate the testimony in a sober frame of mind and which produces a verdict warranted by the evidence, not one inspired by emotion. Commonwealth v. Harvell, 458 Pa. 406, 327 A.2d 27 (1974). Finally, we have condemned remarks by the district attorney which stigmatize a defendant."
We have examined the remarks of the District Attorney closely and find no error. What was said in Commonwealth v. Stoltzfus, 462 Pa. 43, at 61, 337 A.2d 873 (1975), is pertinent:
But even where the language of the district attorney is intemperate, uncalled for and improper, a new trial is not necessarily required. Commonwealth v. Crittenton, 326 Pa. 25, 31, 191 A. 358 (1937); Commonwealth v. McHugh, 187 Pa.Super. 568, 577, 145 A.2d 896 (1958). The language must be such that its "unavoidable effect would be to prejudice the jury, forming in their minds fixed bias and hostility toward the defendant, so that they could not weigh the evidence and render a true verdict." Commonwealth v. Simon, 432 Pa. 386, 394, 248 A.2d 289, 292 (1968). See also Commonwealth v. Myers, 290 Pa. 573, 139 A. 374 (1927). The effect of such remarks depends upon the atmosphere of the trial, Commonwealth v. Dickerson, 406 Pa. 102, 110, 176 A.2d 421 (1962); Commonwealth v. Del Giorno, 303 Pa. 509, 519, 154 A. 786 (1931), and the proper action to be taken is within the discretion of the trial court. Commonwealth v. Silvis, 445 Pa. 235, 237, 284 A.2d 740 (1971); Commonwealth v. Simon, supra. Viewing the remarks complained of as inspired, at least in part, by the *419 conduct of defense counsel, we conclude the trial court did not abuse its discretion in refusing to declare a mistrial.
Defendant's final contentions again center on the alleged ineffectiveness of trial counsel, which contentions we find to be without merit.
"Defendant protests that trial counsel was ineffective because he failed to file a Bighum motion, thereby preventing defendant from taking the witness stand (Brief for Appellant at 15-16). This allegation was belatedly asserted after the disposition of post-verdict motions (N.T. 9/12/78, 80) when defendant, dissatisfied with his conviction and the denial of his post-trial claims, apparently engaged in a hindsight analysis of his earlier strategic decisions. However, absent evidence of impropriety on the part of trial counsel, defendant must bear the burden of his decision not to testify and he cannot shift the blame to his attorney. Cf. Commonwealth v. Boyd, 461 Pa. 17, 30, 334 A.2d 610 (1975) (appellant cannot shift blame for decision to waive jury trial).
"Section 4-5.2(a) of the ABA Standards Relating to the Administration of Criminal Justice, Standards Relating to the Defense Function (Approved Draft, 1979) provides that:
Certain decisions relating to the conduct of the case are ultimately for the accused and others are ultimately for defense counsel. The decisions which are to be made by the accused after full consultation with counsel are (i) what pleas to enter; (ii) whether to waive jury trial; (iii) whether to testify in his own behalf.
(emphasis supplied). The language of this section is unchanged from that approved in 1971 when the commentators observed that:
In making these decisions . . . the accused should have the full and careful advice of his lawyers. Although counsel should not demand that his own view of the desirable course be followed, he is free to engage in fair persuasion and to urge his considered professional opinion on his client.
*420 ABA Standards, The Defense Function, § 5.2, Commentary at 237-238 (emphasis supplied). There is no evidence here that trial counsel exercised any undue influence over defendant's decision not to testify. While defendant conceded that his counsel advised him not to take the stand (N.T. 9/12/78, 80-81), defendant was apparently quite happy to accept this advice until the jury rendered an adverse verdict. It was only then that defendant began to reconsider his earlier tactical choices with an eye toward assessing the blame to his lawyer's supposed ineffectiveness. See Commonwealth v. Boyd, supra.
"Moreover, the record indicates that trial counsel instructed defendant regarding the guidelines of Bighum (N.T. 9/12/78, 81), and that counsel reasonably determined that a Bighum motion would have been frivolous in view of defendant's criminal record. The notes of testimony from the sentencing hearing reveal that defendant had just been paroled on a recent robbery conviction when he committed this offense (N.T. 9/12/80, 53). Under these circumstances, counsel cannot be found ineffective for his failure to litigate a spurious Bighum motion.13 As this Court said recently in Commonwealth v. Connor, 258 Pa. Super. 246, 250, 392 A.2d 776, 779 (1978):
counsel will not be deemed ineffective for failing to request the court to indulge in collateral evidentiary hearings in the absence of some affirmative evidence that such hearings will be beneficial to his client's case.
Defendant's allegation that counsel was ineffective for failing to file adequate post-trial motions is equally meritless. Although defendant makes the bald assertion "several important issues were lost to the defendant" as the result of counsel's alleged post-trial inadequacy (Brief for Appellant at 17), defendant fails to enumerate the supposedly meritorious issues which trial counsel failed to include in post-verdict motions. Cf. Commonwealth v. John C. Johnson, 274 Pa.Super. 440 at 444-445, 418 A.2d 487 at 489 (1980) (failure to file post-verdict motions not per se ineffective; defendant bears burden of specifying errors *421 or omissions which demonstrate ineffectiveness). One must therefore assume that defendant relies on the substantive claims which form the basis of his remaining allegations of ineffectiveness. Since these underlying claims are each without even arguable merit, trial counsel cannot be found ineffective for failing to include them in his post-verdict motions. Commonwealth v. Ramsey, 259 Pa.Super. 240, 252, 393 A.2d 806, 813 (1978)."[5]
Defendant's final contention, which we find to be equally without merit, is that his trial counsel was ineffective for failing to interview and "possibly subpoena" certain unnamed witnesses in his defense. This bare assertion of error does not warrant the grant of appellate relief.
Judgment of sentence is affirmed.
NOTES
[1] Trial record pages 36-49.
[2] Trial record pages 49-79 and docket entries.
[3] The Statement of Questions Involved are framed thusly:
"I. Is Appellant entitled to a new trial due to the inadequacy of the Court's charge on the defense of consent to the crimes of rape and involuntary deviate sexual intercourse?
(Answered in the negative by the Court below)
II. Is Appellant entitled to a new trial due to the fundamental error of the trial court in permitting the prosecutor to make prejudicial remarks.
(Not answered by the Court below)
III. Is Appellant entitled to a new trial due to ineffective assistance of counsel for the following reasons which appear in the record on this case:
A. Failing to conduct adequate pre-trial hearings
B. Failing to object to prejudicial remarks of the prosecutor
C. Failing to object to the charge of the court
D. Failing to file adequate post-trial motions to preserve issues for appeal.
(Not answered by the Court below)
IV. Is Appellant entitled to a new trial since he did not receive effective assistance in preparation and investigation of his defense.
(Not answered by the Court below)"
([Page 4, Appellant's Brief).]
[4] No defense witnesses were presented.
[5] Taken with approval from Commonwealth's Brief, pages 8-9.
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17 Cal.Rptr.3d 489 (2004)
121 Cal.App.4th 864
SANTA BARBARA COUNTY FLOWER AND NURSERY GROWERS ASSOCIATION, INC., Plaintiff and Appellant,
v.
COUNTY OF SANTA BARBARA, Defendant and Respondent.
No. B170027.
Court of Appeal, Second District, Division Six.
August 17, 2004.
*490 Price, Postel & Parma LLP and David K. Hughes, Santa Barbara, for Plaintiff and Appellant.
Stephen Shane Stark, County Counsel, Alan L. Seltzer, Chief Assistant County Counsel, for Defendant and Respondent.
PERREN, J.
The California Coastal Commission (Commission) directed the County of Santa Barbara (County) to submit a proposed amendment to its local coastal plan (LCP) concerning greenhouse development in the Carpinteria Valley, together with an environmental assessment of such development. As its environmental assessment, the County prepared and processed an environmental impact report (EIR) in accordance with the California Environmental Quality Act (CEQA). (Pub. Resources Code, § 21000 et seq.)[1] Santa Barbara Flower and Nursery Growers Association, Inc. (Association), challenged the adequacy of the EIR by filing a petition for writ of mandate.
After the petition was filed, the County realized that the EIR had been prepared unnecessarily because the approval of LCP amendments by the Commission is exempt from the EIR requirements of CEQA. (§§ 21080.5, 21080.9.) The County asserted the exemption as a defense to the petition.
The trial court denied the petition, agreeing with the County that the approval of the LCP amendment was exempt from EIR requirements. The court also concluded that the Association's petition was premature because the Commission's process for approving the LCP amendment had not been completed. The Association appeals the judgment, contending that the County waived the EIR exemption by preparing an EIR and submitting it to the Commission.
We conclude that the California Coastal Act of 1976 (Coastal Act) (§ 30000 et seq.) and CEQA empower the Commission to approve LCP amendments pursuant to a regulatory program that is exempt from the EIR requirements of CEQA. (§§ 21080.5, 21080.9.)[2] The preparation of *491 an EIR by the County did not waive the exemption or preclude the Commission from approving the County's LCP amendment pursuant to the standards of its regulatory program. We do not consider the Association's contention that the Commission waived the exemption through its own conduct because the Commission is not a party to the action, and because there has been no administrative decision by the Commission concerning the LCP amendment. We affirm.
FACTS AND PROCEDURAL HISTORY
In 1982, the Commission certified the County's LCP for portions of the County in the coastal zone. Policy 8-5 of the LCP required discretionary approval of greenhouse developments of 20,000 square feet or more, and stated that the impact of greenhouse development on the coastal resources of Carpinteria Valley needed further study. Policy 8-5 directed the County to conduct a "master environmental impact assessment" to determine the level of greenhouse development that the Carpinteria Valley could support without adverse environmental impact. Policy 8-5 provided that if the assessment was not completed within three years, "greenhouse development ... shall automatically become a conditional use on Agricultural I designated lands in the Carpinteria Valley. If, however, the County and Coastal Commission agree on land use designation or policy changes based on the County's assessment of adverse environmental impacts of greenhouses gathered through the permit process, conditional use permits shall not be required for greenhouse development."
When the master environmental impact assessment had not been completed by the late 1990's, the Commission expressed its concern in a July 27, 1998, letter to the County. After noting that a number of greenhouse facilities had been approved without the benefit of the master environmental assessment promised by policy 8-5 of the LCP, the letter directed the County to complete the assessment and prepare an LCP amendment to regulate future greenhouse development. The letter also stated that "it is problematic" whether the Commission would approve any more greenhouse facilities until the County submitted its environmental assessment and an LCP amendment with proposed changes in land use designations for greenhouse development.
In February 1999, the County released a "Carpinteria Valley Greenhouse Study Options Paper" that provided various options for greenhouse development in the Carpinteria Valley. Thereafter, the County *492 prepared an EIR to assess the impact of these options and to fulfill its obligation to the Commission set forth in policy 8-5 and the July 27, 1998, letter.
The project covered by the EIR was defined as the "Carpinteria Valley Greenhouse Study." A draft of the EIR was completed in August 1999, and a proposed final EIR was issued in March 2000. In February 2002, the County certified the final EIR and adopted an amendment to the County's LCP implementing ordinances to regulate future greenhouse expansion. The LCP amendment and the EIR were submitted to the Commission for review and approval. At the time the petition was filed and at all times prior to the judgment, the approval process for the LCP amendment was actively pending before the Commission.
In March 2002, the Association filed a petition for writ of mandate challenging the adequacy of the EIR under CEQA standards. The petition alleged that the EIR did not adequately discuss the environmental effects of open field agriculture or alternatives to the project, or adequately analyze the project "in relation to applicable state policies, general and regional plans, and local ordinances, and any inconsistencies that might exist with such plans and ordinances."
In April 2003, the trial court denied the petition. The court found that the "activities and approvals by the County that are the subject of this Petition are exempt from CEQA, because they were necessary for the preparation and adoption of a local coastal program, making the Project statutorily exempt. [Citations.] The County had no statutory duty to comply with CEQA in adopting and submitting its proposed LCP amendments to the Commission." The decision also stated that "[p]etitioner has not exhausted all administrative remedies in that the Coastal Commission has not yet certified the proposed amendments to the local coastal program."
DISCUSSION
Association Contentions
The Association contends that the trial court erred in denying its petition without ruling on the merits. The Association argues that the EIR exemption set forth in sections 21080.5 and 21080.9 is discretionary, and that by electing to prepare an EIR, the County waived the exemption and obligated itself to comply with all EIR requirements. The Association further contends that the Commission ratified the County's election to rely on the EIR process when it accepted the EIR as satisfying the County's obligation to conduct an environmental assessment of future greenhouse development in the Carpinteria Valley. The Association argues that by making this decision, the Commission failed to comply with its own regulatory program and became obligated to comply with EIR requirements in approving the County's LCP amendment. The Association also asserts various procedural and equitable reasons why the trial court should not have applied the EIR exemption.
Statutory Scheme
The Coastal Act is a comprehensive statutory scheme to protect the environment of California's coastal zone. (Citizens of Goleta Valley v. Board of Supervisors (1990) 52 Cal.3d 553, 571, 276 Cal.Rptr. 410, 801 P.2d 1161.) In general, the Act gives the Commission regulatory authority to carry out its policies.
Among other things, the Coastal Act requires the implementation of LCP's that embody statewide standards for preserving the coastal zone. (Citizens of Goleta Valley v. Board of Supervisors, supra, 52 *493 Cal.3d at p. 571, 276 Cal.Rptr. 410, 801 P.2d 1161; §§ 30001.5, 30108.6; see also §§ 30500, 30511-30514.) Local government has the initial responsibility to prepare an LCP or LCP amendment covering the coastal zone within its jurisdiction. (§ 30500.) The local government then submits the LCP or amendment to the Commission. (§ 30510.) The submission must include a complete environmental review and satisfy other policies and regulations of the Commission. (§§ 30510-30514.)
An LCP or LCP amendment cannot take effect unless approved by the Commission. To be approved, the Commission must certify that it conforms to the environmental protection policies of the Coastal Act. (§§ 30001.5, 30500, 30511-30514; Citizens of Goleta Valley v. Board of Supervisors, supra, 52 Cal.3d at pp. 571-572, 276 Cal.Rptr. 410, 801 P.2d 1161; see Cal.Code Regs., tit. 14, §§ 13115, 13119, 13321.) Commission decisions are subject to judicial review under a special section of CEQA. (§ 21080.5, subd. (g).)[3]
Although CEQA generally requires an EIR prior to the approval of any project that may have a significant adverse effect on the environment, an EIR is not required for the approval of an LCP or LCP amendment by the Commission. CEQA authorizes state agencies with environmental responsibilities, including the Commission, to operate under their own regulatory programs that replace the EIR process with a comparable form of environmental review. (§ 21080.5, subds.(a), (c); Mountain Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 113, 65 Cal.Rptr.2d 580, 939 P.2d 1280; San Mateo County Coastal Landowners' Assn. v. County of San Mateo (1995) 38 Cal.App.4th 523, 552, 45 Cal.Rptr.2d 117.)
To qualify for the EIR exemption, a regulatory program must be certified by the California Resources Agency. (§ 21080.5, subds.(a), (c); Environmental Protection Information Center, Inc. v. Johnson (1985) 170 Cal.App.3d 604, 611, 216 Cal.Rptr. 502.) To obtain certification, the program must satisfy statutory criteria that assure environmental review that is functionally equivalent to the EIR process. (§ 21080.5, subd. (d);[4]Mountain Lion *494 Foundation v. Fish & Game Com., supra, 16 Cal.4th at pp. 126-127, 65 Cal.Rptr.2d 580, 939 P.2d 1280.)
The Commission obtained certification of its regulatory program in 1979, and the LCP approval process has been exempt from EIR requirements ever since. (Cal.Code Regs., tit. 14, § 15251, subd. (f); La Costa Beach Homeowners' Assn. v. California Coastal Com. (2002) 101 Cal.App.4th 804, 819, 124 Cal.Rptr.2d 618; San Mateo County Coastal Landowners' Assn. v. County of San Mateo, supra, 38 Cal.App.4th at p. 552, 45 Cal.Rptr.2d 117.) As stated in the CEQA Guidelines, "(a) CEQA does not apply to activities and approvals pursuant to the California Coastal Act ... by: [¶] (1) Any local government ... necessary for the preparation and adoption of a local coastal program .... [¶] (c) This section shifts the burden of CEQA compliance from the local agency ... to the California Coastal Commission...." (Cal.Code Regs., tit. 14, § 15265.) Accordingly, neither the Commission nor the County was required to prepare an EIR prior to the approval of the County's LCP amendment. (§§ 21080.5, 21080.9.)
No Waiver of EIR Exemption
It is undisputed that the section 21080.5 exemption applied to the County's preparation of its LCP amendment and the Commission's review and approval process. The County could have fulfilled its obligation to make an environmental assessment of greenhouse expansion in a form other than an EIR as long as it complied with the Commission's certified regulatory program. Nevertheless, for reasons not explained in the record, the County chose to prepare an EIR, satisfy the procedural requirements for approval of the EIR, and submit the approved EIR to the Commission as its environmental assessment.
The Association focuses on this choice as the basis of its argument that the section 21080.5 exemption does not apply. The Association contends that the exemption is "discretionary," and applies only when a local government submits to the Commission environmental review documents other than an EIR. The Association argues that a local governmental entity has the power to waive the Commission's EIR exemption and that the County waived the exemption and obligated itself to comply with EIR requirements merely by preparing an EIR as its environmental assessment. We disagree.
Nothing in CEQA or the Coastal Act gives local government the power to opt out of the Commission's regulatory program and choose to be governed by CEQA's regulatory scheme. To the contrary, the section 21080.5 exemption is necessary to facilitate the Commission's legislative mandate under the Coastal Act to implement statewide policies for coastal zone development rather than local policies that would be critical to an EIR for a local project. (§ 30004; Gherini v. California Coastal Com. (1988) 204 Cal.App.3d 699, 709-710, 251 Cal.Rptr. 426; City of Chula *495 Vista v. Superior Court (1982) 133 Cal.App.3d 472, 489, 183 Cal.Rptr. 909.)
The Association also appears to treat the County's obligation to prepare an environmental assessment for its LCP amendment as a separate project from the Commission's review and approval process. There is no statutory or judicial authority that permits the approval of an LCP amendment to be separated into two projects, one subject to judicial review under the EIR provisions of CEQA (§ 21167) and the other subject to judicial review under a state agency's certified regulatory program. (§ 21080.5, subd. (g).)
The Association attempts to overcome the flaws in these arguments by focusing on the Commission's acceptance of the EIR as the County's environmental assessment. The Association contends that, by accepting the EIR, the Commission made its own discretionary choice to waive the section 21080.5 exemption independently of the County's decision to prepare the EIR.
The Association argues that by accepting the EIR, the Commission ratified the County's reliance on the EIR process and elected not to comply with its own certified regulatory program. Consequently, CEQA standards became binding on the Commission and obligate the Commission to approve the County's LCP amendment in accordance with an EIR that is adequate under CEQA standards.
Nothing in the record supports these assertions, and the Association's arguments regarding the Commission's regulatory program are conjecture. Although a determination by the Commission may be overturned on appeal if it fails to strictly comply with its regulatory program (Mountain Lion Foundation v. Fish & Game Com., supra, 16 Cal.4th at p. 132, 65 Cal.Rptr.2d 580, 939 P.2d 1280), the record does not suggest that the mere acceptance of an EIR as the County's environmental assessment violates the Commission's regulatory program. Neither the content of the regulatory program nor the Commission proceedings regarding the County's LCP amendment are part of the administrative record. The Association's petition and the administrative record focus exclusively on the content and approval of the County's EIR.
Furthermore, the Commission would be an indispensable party if this action were expanded to consider factual questions affecting the Commission's regulatory discretion. (See Kaczorowski v. Mendocino County Bd. of Supervisors (2001) 88 Cal.App.4th 564, 568, 106 Cal.Rptr.2d 14.) Unless the Commission is a party, a judgment that limits the Commission's discretion in the LCP proceeding would be ineffective against the Commission and subject to collateral attack. (Id., at p. 570, 106 Cal.Rptr.2d 14; Sierra Club, Inc. v. California Coastal Com. (1979) 95 Cal.App.3d 495, 501-502, 157 Cal.Rptr. 190.)
In addition, judicial review is premature because there has been no final Commission determination approving or disapproving the LCP amendment. (Alta Loma School Dist. v. San Bernardino County Com. on School Dist. Reorganization (1981) 124 Cal.App.3d 542, 554-557, 177 Cal.Rptr. 506.) In the context of administrative proceedings, a controversy is not ripe for adjudication until the administrative process is completed and the agency makes a final decision that results in a direct and immediate impact on the parties. (Pacific Legal Foundation v. California Coastal Com. (1982) 33 Cal.3d 158, 170-172, 188 Cal.Rptr. 104, 655 P.2d 306; Alta Loma, at pp. 554-557, 177 Cal.Rptr. 506.)
In essence, the Association is asking the court to decide a different case than the *496 case set forth in the administrative record and the petition, and without the proper parties and relevant administrative decision. Such a determination is beyond the authority of the court.
Association's Equitable Arguments Lack Merit
The Association also asserts several procedural and equitable reasons why the trial court should not have considered the EIR exemption. We reject these claims.
First, the trial court had authority to base its decision on the EIR exemption even though the issue was not raised until shortly before trial. The trial court correctly concluded that the record and statutory framework established as a matter of law that the conduct of the County did not deprive the Commission of its exemption, and that the effect of the Commission's conduct on the exemption could not be determined in the instant action. (See Gentry v. City of Murrieta (1995) 36 Cal. App.4th 1359, 1407, 43 Cal.Rptr.2d 170; Napa Valley Wine Train, Inc. v. Public Utilities Com. (1990) 50 Cal.3d 370, 377-383, 267 Cal.Rptr. 569, 787 P.2d 976.)
Second, the County did not waive its ripeness claim by failing to allege it as an affirmative defense. The Association had the burden of establishing that the administrative proceeding had been completed and administrative remedies exhausted. Also, exhaustion of administrative remedies is jurisdictional, not a matter of judicial discretion. (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 293, 109 P.2d 942; see Leff v. City of Monterey Park (1990) 218 Cal.App.3d 674, 680-681, 267 Cal.Rptr. 343.)
Third, the County is not estopped from raising the exemption and ripeness issues. Under the doctrine of equitable estoppel, a party cannot deny facts that it intentionally led another to believe if the party asserting estoppel is ignorant of the true facts, and relied to its detriment. (City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 488-489, 91 Cal.Rptr. 23, 476 P.2d 423.) The section 21080.5 exemption is a statute, not a fact. Nothing in the record shows that the Association was unaware of the exemption, or that the County's decision to prepare an EIR prevented the Association from ascertaining the applicable law. Also, estoppel cannot be applied against a governmental entity if it would nullify a policy adopted for the benefit of the public. (Id., at p. 493, 91 Cal.Rptr. 23, 476 P.2d 423.) Protection of the coastal zone environment by the Commission is a state policy benefiting the public.
Fourth, the Association's argument that the County failed to follow statutory procedures for claiming the exemption repeats its principal waiver argument.
Finally, the trial court's decision to take judicial notice of a March 2003 Commission staff report had no prejudicial effect. The staff report illustrates applicable statutory law and duplicates other information in the administrative record regarding the submission of the EIR to the Commission.
CONCLUSION
Here, the County unnecessarily prepared an EIR and the Association unnecessarily participated in the approval process applicable to EIR's. The Association understandably may have been dismayed that a significant administrative proceeding was conducted through error. Nevertheless, the court cannot provide a remedy to the Association without interfering with the statutory authority and established regulatory process of the Commission. Furthermore, the Association does not establish that it was prejudiced in any material respect. The Association remains *497 free to seek judicial review of any decision by the Commission regarding the County's LCP amendment and to challenge the adequacy of the environmental assessment supporting that decision. (§ 21080.5, subd. (g).)
The judgment is affirmed. Costs are awarded to respondent.
We concur: YEGAN, Acting P.J., and COFFEE, J.
NOTES
[1] All statutory references are to the Public Resources Code.
[2] Section 21080.5, subdivisions (a) and (c) provide in pertinent part: "(a) ... when the regulatory program of a state agency requires a plan or other written documentation containing environmental information and complying with paragraph (3) of subdivision (d) to be submitted in support of an activity listed in subdivision (b), the plan or other written documentation may be submitted in lieu of the environmental impact report required by this division if the Secretary of the Resources Agency has certified the regulatory program pursuant to this section. [¶] ... [¶] (c) A regulatory program certified pursuant to this section is exempt from Chapter 3 (commencing with Section 21100), Chapter 4 (commencing with Section 21150), and Section 21167...."
Section 21080.9 provides in pertinent part: "This division shall not apply to activities and approvals by any local government ... as necessary for the preparation and adoption of a local coastal program or long-range land use development plan pursuant to [the Coastal Act]; provided, however, that certification of a local coastal program or long-range land use development plan by the California Coastal Commission pursuant to [the Coastal Act] shall be subject to the requirements of this division. For the purpose of Section 21080.5, a certified local coastal program or long-range land use development plan constitutes a plan for use in the California Coastal Commission's regulatory program."
[3] Section 21080.5, subdivision (g) provides: "An action or proceeding to attack, review, set aside, void, or annul a determination or decision of a state agency approving or adopting a proposed activity under a regulatory program that has been certified pursuant to this section on the basis that the plan or other written documentation prepared pursuant to paragraph (3) of subdivision (d) does not comply with this section shall be commenced not later than 30 days from the date of the filing of notice of the approval or adoption of the activity."
[4] Section 21080.5, subdivision (d) provides: "To qualify for certification pursuant to this section, a regulatory program ... shall meet all of the following criteria: [¶] (1) The enabling legislation of the regulatory program does both of the following: [¶] (A) Includes protection of the environment among its principal purposes. [¶] (B) Contains authority for the administering agency to adopt rules and regulations for the protection of the environment, guided by standards set forth in the enabling legislation. [¶] (2) The rules and regulations adopted by the administering agency for the regulatory program do all of the following: [¶] (A) Require that an activity will not be approved or adopted as proposed if there are feasible alternatives or feasible mitigation measures available that would substantially lessen a significant adverse effect that the activity may have on the environment. [¶] (B) Include guidelines for the orderly evaluation of proposed activities and the preparation of the plan or other written documentation in a manner consistent with the environmental protection purposes of the regulatory program. [¶] (C) Require the administering agency to consult with all public agencies that have jurisdiction, by law, with respect to the proposed activity. [¶] (D) Require that final action on the proposed activity include the written responses of the issuing authority to significant environmental points raised during the evaluation process. [¶] (E) Require the filing of a notice of the decision by the administering agency on the proposed activity with the Secretary of the Resources Agency.... [¶] (F) Require notice of the filing of the plan or other written documentation to be made to the public and to a person who requests, in writing, notification.... [¶] (3) The plan or other written documentation required by the regulatory program does both of the following: [¶] (A) Includes a description of the proposed activity with alternatives to the activity, and mitigation measures to minimize any significant adverse effect on the environment of the activity. [¶] (B) Is available for a reasonable time for review and comment by other public agencies and the general public."
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280 Pa. Superior Ct. 550 (1980)
421 A.2d 1069
COMMONWEALTH of Pennsylvania,
v.
Alfonso POSTELL, Appellant.
Superior Court of Pennsylvania.
Submitted December 6, 1979.
Filed August 1, 1980.
*551 John W. Packel, Chief, Appeals, Assistant Public Defender, Philadelphia, for appellant.
Eric B. Henson, Assistant District Attorney, Philadelphia, for Commonwealth, appellee.
Before BROSKY, WICKERSHAM and EAGEN, JJ.[*]
BROSKY, Judge:
Appellant, Alfonso Postell, was convicted by a judge sitting without a jury of robbery, aggravated assault and conspiracy. Following the denial of post-trial motions, he was sentenced to a term of imprisonment of two to five years.[1] This appeal followed.
Appellant contends that the lower court erred in granting the Commonwealth's petition, filed pursuant to Pa.R.Crim.P. 1100, to extend the time for commencement of trial. We agree and, for the reasons set forth herein, reverse the judgment of sentence and order appellant discharged.
Appellant was arrested by complaint filed on August 30, 1977. His trial, therefore, should have commenced on or before February 26, 1978. However, on February 23, 1978, the Commonwealth timely petitioned the court for an order *552 extending the time for commencement of trial.[2] A hearing on that request was scheduled for March 16, 1978 to determine whether the Commonwealth had exercised due diligence in its efforts to commence trial within the prescribed 180-day period.
Following "hearing"[3] the court issued a finding of due diligence and extended the final trial date to April 3, 1978.[4] The trial court's finding was based upon two notations appearing in the court records.[5] They indicated that on December 20, 1977 the case was "Ready-Not Reached", and thus continued to January 24, 1978, on which date it was further continued to February 15, 1978 because the complainant arrived after the court had adjourned.
Contrary to appellant's contention that the lower court erred in relying upon such court records, this court has impliedly permitted such use. Commonwealth v. Gibson, 248 Pa.Super. 348, 375 A.2d 132 (1977); Commonwealth v. Kollock, 246 Pa.Super. 16, 369 A.2d 787 (1977). Nevertheless, a review of the total record fails to reveal a sufficient display of due diligence by the Commonwealth.
*553 In addition to the above notations recited by the trial court, the court records also disclose that the case was twice continued-on February 15, 1978 and February 22, 1978-solely as a result of the Commonwealth's failure to notify necessary witnesses.[6] It was, in fact, the latter postponement which gave rise to the petition for extension at issue.
No explanation was offered by the Commonwealth for such failure. Nor was evidence presented to show why, despite the unavailability of its witness on February 15 and February 22, 1978, the case could still not be commenced on or before February 26, 1978.
Since it is the Commonwealth which has the burden of establishing due diligence and, on the record before us, it has not done so, we are compelled to conclude that the lower court erred in granting the Commonwealth's petition for extension.
Judgment of sentence reversed, and appellant discharged.
WICKERSHAM, J., files a dissenting opinion.
WICKERSHAM, Judge, dissenting:
I dissent.
Once again, due to a too restricted interpretation of Rule 1100 we find a convicted mugger not in jail to which he was sentenced and where he belongs, but rather out on the streets of Philadelphia.
"Defendant was arrested on August 30, 1977, and charged with criminal conspiracy, aggravated and simple assault, and robbery, as of October Session, 1977, Information Nos. 848-850. These charges arose from the mugging of William Brown in the early morning hours of August 30, 1977, in the 5100 block of Baltimore Avenue in Philadelphia. Mr. Brown was walking home when he was approached by two men. One of them, later identified as Gregory Bush, spun Mr. Brown around, while the other assailant, defendant Alfonzo Postell, punched Mr. Brown *554 in the face, knocking him to the ground. The two men continued to beat Mr. Brown while he was down and emptied his pockets (N.T. 3/30/78, 10-11, 14). Within minutes after the mugging, police apprehended Gregory Bush and returned him to the scene of the crime where he was positively identified (N.T. 3/30/78, 15-16). After obtaining a description of the second assailant, a police officer drove Mr. Brown around the neighborhood. About ten minutes later, defendant was spotted standing in a doorway approximately two blocks from the scene of the crime. Mr. Brown thereupon identified defendant as the second robber (N.T. 3/30/78, 16-17).
On February 23, 1978, following several delays, the Commonwealth timely filed a petition for extension under Pa.R.Crim.P. 1100(c). A hearing was conducted on March 16, 1978 before the Honorable Edward J. Blake, after which the Commonwealth's petition was granted and the time for commencement of trial was extended to April 3, 1978. A hearing on defendant's motion to suppress identification was thereafter held before the Honorable Bernard Snyder on March 30, 1978. The motion was held under advisement, necessitating the filing of a second petition for extension of time for the commencement of defendant's trial. This petition, filed on April 3, 1978, was litigated on April 21, 1978; Judge Blake granted this petition and extended the Rule 1100 run date to May 30, 1978.
On May 23, 1978, prior to the expiration of the amended Rule 1100 run date, Judge Snyder denied defendant's motion to suppress, and defendant immediately thereafter waived his right to a trial by jury. On that same date, defendant was jointly tried with co-defendant Gregory Bush before Judge Snyder, and was convicted of all charges. Following the denial of post-verdict motions on August 24, 1978, defendant was sentenced on Information No. 848 (criminal conspiracy) to a term of imprisonment of two to five years. Concurrent terms of 7 years probation were imposed on Informations Nos. 849 (aggravated assault) and 850 (robbery).
*555 In defendant's appeal from the judgments of sentence, the sole issue raised is whether Judge Blake erred in granting the Commonwealth's first petition for extension under Rule 1100(c) and in extending the period for commencement of trial from the original February 27, 1978 run date to April 3, 1978."[1]
Rule 1100 Rules of Criminal Procedure
CHAPTER 1100. TRIAL
Rule 1100. Prompt Trial
(a)(1) Trial in a court case in which a written complaint is filed against the defendant after June 30, 1973 but before July 1, 1974 shall commence no later than two hundred seventy (270) days from the date on which the complaint is filed.
(2) Trial in a court case in which a written complaint is filed against the defendant after June 30, 1974 shall commence no later than one hundred eighty (180) days from the date on which the complaint is filed.
(b) For the purpose of this Rule, trial shall be deemed to commence on the date the trial judge calls the case to trial.
(c) At any time prior to the expiration of the period for commencement of trial, the attorney for the Commonwealth may apply to the court for an order extending the time for commencement of trial. A copy of such application shall be served upon the defendant through his attorney, if any, and the defendant shall also have the right to be heard thereon. Such application shall be granted only if trial cannot be commenced within the prescribed period despite due diligence by the Commonwealth. Any order granting such application shall specify the date or period within which trial shall be commenced.
(d) In determining the period for commencement of trial there shall be excluded therefrom such period of delay at any stage of the proceedings as results from:
*556 (1) the unavailability of the defendant or his attorney;
(2) any continuance in excess of thirty (30) days granted at the request of the defendant or his attorney, provided that only the period beyond the thirtieth (30th) day shall be so excluded;
(e)
(1) When a trial court has granted a new trial and no appeal has been perfected, the new trial shall commence within one hundred and twenty (120) days after the date of the order granting a new trial.
(2) When an appellate court has granted a new trial, or has affirmed an order of a trial court granting a new trial, the new trial shall commence within one hundred and twenty (120) days after the appellate court remands the record to the trial court. The date of remand shall be the date as it appears in the appellate court docket.
1218
Rule 1100
TRIAL
(f) At any time before trial, the defendant or his attorney may apply to the court for an order dismissing the charges with prejudice on the ground that this Rule has been violated. A copy of such application shall be served upon the attorney for the Commonwealth, who shall also have the right to be heard thereon. Any order granting such application shall dismiss the charges with prejudice and discharge the defendant.
(g) Nothing in this Rule shall be construed to modify any time limit contained in any statute of limitations.
This rule was interpreted in Commonwealth v. Mitchell, 472 Pa. 553, 372 A.2d 826 (1977), Opinion by Chief Justice Eagen, where it was said, 472 Pa. at 564, 372 A.2d at 826:
Initially, we rule that the Commonwealth has the burden of proving the requisites of Section (d) in order to *557 avail itself of an exclusion and must do so by a preponderance of the evidence. Compare Commonwealth v. Ewell, 456 Pa. 589, 319 A.2d 153 (1974). Furthermore, in reviewing a hearing court's ruling that the Commonwealth has met its burden, we shall consider only the evidence presented by the Commonwealth and so much evidence as presented by the defense as, fairly read in the context of the record as a whole, remains uncontradicted. See Commonwealth v. Smith, 470 Pa. 220, 368 A.2d 272 (1977); Commonwealth v. Johnson, 467 Pa. 146, 354 A.2d 886 (1976).
"Since this defendant was arrested on August 30, 1977, Rule 1100(a)(2) of the Pennsylvania Rules of Criminal Procedure required that he be brought to trial no later than 180 days from the date on which the complaint was filed against him. Rule 1100(c), however, permits extensions of time for commencement of trial "if trial cannot be commenced within the prescribed period despite due diligence by the Commonwealth," and where the application for an order granting an extension is made prior to the expiration of the prescribed period.
In the instant case, the mandatory period commenced running on August 30, 1977, when defendant was arrested and a complaint was filed against him. One hundred eighty days from that date was February 26, 1978; however, since the 180th day fell on a Sunday, that day was omitted from the computation in accordance with 1 Pa.C.S. § 1908, making February 27, 1978 the relevant run date. See Commonwealth v. Jones, 258 Pa.Super. 50, 391 A.2d 667 (1978). On February 23, 1978, four days prior to the expiration of the mandatory period, the Commonwealth filed a petition for extension under Rule 1100(c). Defendant filed an answer to the petition on March 15, 1978, and after a hearing on March 16, 1978, Judge Blake granted the Commonwealth's petition, and extended the period for commencement of trial to April 3, 1978. Defendant argues that this extension was erroneously *558 granted "in the absence of a showing of due diligence by the Commonwealth" (Defendant's Brief at 6).[2]
The criminal transcript in the instant case indicates that on four occasions between September 7, 1977 and October 6, 1977, the Commonwealth was unable to proceed due to continuances caused by either this defendant, the court, or the co-defendant.[3]
The official court record also shows that on December 20, 1977, the Commonwealth was again ready to proceed; however the case was not reached by the court and was continued to January 24, 1978. On that date, the presence of the complainant was impeded by transportation problems caused by snow, and the case was continued to February 15, 1978. Notations on the court continuance sheet signed by the Honorable Thomas White, indicate that the complainant finally arrived after court was adjourned, the delay having been caused by an accident on the "L" (i.e., elevated train).
While none of the above recited delays are automatically excludable from the computation of the prescribed period for commencement of trial, they nevertheless may justify an extension under Rule 1100(c), upon timely application. See e.g., Commonwealth v. Brett, 262 Pa.Super. 326, 396 A.2d *559 777 (1978) (delay caused by co-defendant even though not agreed to by defendant, may provide sufficient grounds for extension of time); Commonwealth v. Mayfield, 469 Pa. 214, 364 A.2d 1345 (1976) (a reasonable extension of time may be granted the prosecution on the basis of judicial delay); Commonwealth v. Brown, 252 Pa.Super. 365, 381 A.2d 961 (1977) (extension granted where defendant's preliminary hearing was continued on three occasions for purposes beyond the control of the Commonwealth); Commonwealth v. Ehredt, 485 Pa. 191, 195, 401 A.2d 358, 361 (1978) (plurality decision) and Commonwealth v. Brown, 252 Pa.Super. 369, 381 A.2d 961 (the unavailability of a Commonwealth witness may be the basis of an extension of time for commencement of trial).
In the instant case, the rescheduling of defendant's preliminary hearing on four occasions between September 7 and October 6, 1977, for reasons beyond the control of the Commonwealth, caused a delay of 29 days. The overcrowded court docket which caused defendant's case to be continued from December 20, 1977, to January 24, 1978, resulted in an additional delay of 35 days. And finally, the unavailability of the complainant on January 24, 1978, due to the snow and transportation difficulties, resulted in a further delay of 22 days.
Thus, for reasons entirely beyond the control of the Commonwealth defendant's trial was delayed 86 days. Yet, the extension granted to the Commonwealth, from February 27, 1978 to April 3, 1978, amounted to only 35 days.
Defendant nevertheless argues that it was improper for Judge Blake to rely on the entries in the Quarter Sessions file. This contention is without merit."[4]
I would affirm the judgment of sentence of Judge Edward J. Blake and I would find the limited extension granted by Judge Blake was reasonable and proper.
NOTES
[*] Chief Justice MICHAEL J. EAGEN of the Supreme Court of Pennsylvania, is sitting by designation.
[1] The term of imprisonment was imposed for the conspiracy conviction. Appellant also received concurrent seven-year probationary periods on each of the other charges.
[2] Rule 1100(c) provides: "At any time prior to the expiration of the period for commencement of trial, the attorney for the Commonwealth may apply to the court for an order extending the time for commencement of trial. A copy of such application shall be served upon the defendant through his attorney, if any, and the defendant shall also have the right to be heard thereon. Such application shall be granted only if trial cannot be commenced within the prescribed period despite due diligence by the Commonwealth. Any order granting such application shall specify the date or period within which trial shall be commenced." (Emphasis added)
[3] The transcript reveals only the most cursory of "hearings". The lower court referred to select portions of the record; however, no testimony was presented despite the filing of an answer to the petition specifically denying the exercise of due diligence by the Commonwealth.
[4] A subsequent petition for extension was filed by the Commonwealth and granted on April 21, 1978 further extending the final trial date to May 30, 1978; however, the propriety of that extension is not before us.
[5] Form no. 30-92 (Rev. 11/75), which reflects the action taken at each case's various listings for trial.
[6] Those same records indicate the defense ready to proceed on each occasion.
[1] Commonwealth's brief, pages 1-2.
[2] Defendant does not contest the subsequent extension of time granted by Judge Blake on April 21, 1978, upon timely application by the Commonwealth. This second petition for extension filed on April 3, 1978, was necessitated by the failure of the pre-trial motions court to decide defendant's motion to suppress prior to that date. Such "judicial delay" may justify the granting of a timely application for an extension of time in which to bring an accused to trial. See Commonwealth v. Shelton, 469 Pa. 8, 364 A.2d 694 (1976). In any event, this precise issue is not before this Court as defendant does not challenge this second extension.
[3] Notations on the criminal transcript, confirmed by defendant in his Answer to Petition to Extend, indicate the following:
9/7/77 Defense request lineups Cont. to 9/21/77
9/21/77 Judge unavailable Cont. to 9/28/77
9/28/77 Co-def's atty. FTA Cont. to 10/5/77
10/5/77 Co-def's atty. not available Cont. to 10/6/77
[4] Commonwealth's brief, pages 2-3-4.
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574 S.E.2d 359 (2002)
258 Ga. App. 283
JONES
v.
The STATE.
No. A02A2056.
Court of Appeals of Georgia.
November 6, 2002.
Jon P. Carr, Tom C. Moore, Milledgeville, for appellant.
Steven Askew, Dist. Atty., Samuel H. Altman, Asst. Dist. Atty., for appellee.
JOHNSON, Presiding Judge.
A jury found Ronald Edward Jones guilty of vandalism of a place of worship. In his sole enumeration of error, Jones contends the trial court erred in denying his motion in limine and allowing testimony referencing paint seen on his clothing and shoes. We find no error and affirm Jones' conviction.
In cases involving the review of the grant or denial of a motion in limine, we must construe the evidence most favorably to uphold the findings and judgment of the trial court.[1] "It is the trial court's duty to resolve *360 conflicts in the evidence, and its findings of credibility and fact will not be disturbed on appeal unless they are clearly erroneous."[2]
Applying this standard to the present case, the record shows that Jones was accused of entering the Tennille Christian Church and spray painting, among other things, red and blue satanic messages in the fellowship hall, chapel, and other areas of the church. Jones was pastor of the church at the time. According to Jones, he was attacked by two males with spray paint who knocked him to the floor, caused his head to strike a table, kicked him, and knocked him unconscious. When Jones awoke, he called 911. However, the two officers who responded to the scene observed no injuries to Jones and observed red paint on his clothes. In addition, Jones received medical attention where various registered nurses observed no injuries to Jones. The nurses observed red paint under the nail and around the outside of Jones' right index or trigger finger and removed the paint, turning it over to police. The nurses also observed red paint on Jones' pants and blue paint on his tennis shoes.
Police recovered Jones' clothing and sent it to the state crime lab for testing. Paint samples from the church were also sent to the state crime lab. The state crime lab report concluded that "considering the size and condition of the questioned samples, the possibility that the questioned samples and the paint standards originated from the same source cannot be absolutely eliminated." It was later discovered that Jones had just been rejected by one of the young single girls of the church.
Jones moved in limine to prevent the state from mentioning any paint purportedly seen on his clothing or shoes because the state crime lab lost or misplaced those items and he could not inspect the items or run his own testing regarding the paint on those items. The trial court conducted a two-part analysis in determining whether the lost evidence should be excluded, and it concluded that (1) Jones failed to show that the evidence was lost because of connivance or bad faith on the part of the state, and (2) Jones was not prejudiced by the loss of the evidence.[3] The trial court, therefore, denied Jones' motion in limine. We find no error.
"In dealing with the failure of the state to preserve evidence which might have exonerated the defendant, a court must determine both whether the evidence was material and whether the police acted in bad faith in failing to preserve the evidence."[4] Here, neither the materiality of the clothing and shoes nor the bad faith of the state was shown.
On the issue of bad faith, Jones has not alleged that the evidence was lost due to any intentional action on the part of the state. And, we can find no evidence in the record that the state in bad faith attempted to deny Jones access to evidence that it knew would be exculpatory.[5] "Unless a criminal defendant can show bad faith on the part of the police, failure to preserve potentially useful evidence does not constitute a denial of due process of law."[6]
In addition, Jones has not shown that his clothing and shoes were material. To be material, the evidence must have had an apparent exculpatory value before it was lost, and be of such a nature that the defendant cannot obtain comparable evidence by other reasonable means.[7] Jones cites the case of Sabel v. State[8] in support of his argument *361 that his clothing and shoes were material. In Sabel, the defendant argued that the paint on his hands was not the same paint as the paint on the state-owned property. He requested that the paint samples be tested by his own expert, but the trial court denied his request. The Supreme Court of Georgia reversed the defendant's conviction because he was not permitted to have his own expert test and compare the samples of paint taken from his hands and those taken from the state-owned property. The Supreme Court found that the paint samples were "critical" and subject to varying expert opinions. Thus, the defendant was entitled to have his own expert test the paint samples. This case is inapposite.
In the present case, Jones does not dispute that the paint found on his clothing and shoes is the same paint that was used to vandalize the church. In fact, he admits he was at the church, arguing he was attacked by two men with spray paint and that he probably brushed up against the paint. Jones' sole argument supporting his motion to suppress the evidence of paint on his clothing and shoes is that he cannot duplicate the incident to see if the paint was a result of mist in the air or droplets. He argues that it is impossible to ascertain how the paint got on his clothing because he cannot view the clothing and see the location of the paint or the extent of the paint. This argument does not show that the clothing had any exculpatory value.
The state did not introduce expert testimony showing how the paint got on Jones' shirt. Rather, it merely presented testimony from witnesses who described the paint they saw on Jones' clothing. Clearly, a witness may testify as to what the witness personally observes. Thus, the officers and registered nurses in the present case were properly permitted to testify that they saw paint on Jones' clothing and under his trigger fingernail, even though they were not able to speculate as to how the paint got there. Since this testimony was obviously relevant and material, denying the motion in limine was not error.[9] Jones' arguments regarding how the paint got on his clothing are merely thatarguments that can be made to a jury. Moreover, Jones does not dispute that the paint found under his trigger fingernail was properly preserved by the state crime lab. The trial court did not err in denying Jones' motion in limine to exclude evidence of the paint seen on his clothing and shoes.
Judgment affirmed.
BLACKBURN, C.J., and MILLER, J., concur.
NOTES
[1] Wells v. State, 227 Ga.App. 521, 489 S.E.2d 307 (1997).
[2] (Citation omitted.) Thompson v. State, 234 Ga. App. 74(1), 506 S.E.2d 201 (1998).
[3] See West v. State, 251 Ga. 458, 460(3), 306 S.E.2d 909 (1983); Benford v. State, 189 Ga.App. 761, 763-764(1), 377 S.E.2d 530 (1989).
[4] (Citations and punctuation omitted.) Brannan v. State, 275 Ga. 70, 74(2)(c), 561 S.E.2d 414 (2002).
[5] See Walker v. State, 264 Ga. 676, 680(3), 449 S.E.2d 845 (1994).
[6] (Citations and punctuation omitted.) Milton v. State, 232 Ga.App. 672, 679(6), 503 S.E.2d 566 (1998); see also Penny v. State, 248 Ga.App. 772, 774(1), 547 S.E.2d 367 (2001).
[7] Brannan, supra; Walker, supra at 681, 449 S.E.2d 845.
[8] 248 Ga. 10, 16(6), 282 S.E.2d 61 (1981), overruled on other grounds, Rower v. State, 264 Ga. 323, 324(5), 443 S.E.2d 839 (1994).
[9] See Harris v. State, 196 Ga.App. 796, 797(3), 397 S.E.2d 68 (1990); OCGA § 24-2-1.
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497 P.2d 1204 (1972)
STATE of Oregon, Appellant,
v.
Randall Murphy DARRIEN, Respondent.
Court of Appeals of Oregon, Department 1.
Argued and Submitted May 15, 1972
Decided June 15, 1972.
*1205 Thomas H. Denney, Asst. Atty. Gen., Salem, argued the cause for appellant. With him on the brief were Lee Johnson, Atty. Gen., and John W. Osburn, Solicitor Gen., Salem.
Lee M. Zittenfield, Portland, argued the cause for respondent. With him on the brief were Lekas, Dicey & Marandas, Portland.
Before LANGTRY, P.J., and FOLEY and FORT, JJ.
LANGTRY, Judge.
The state appeals from a trial court order suppressing evidence in a case charging the receiving and concealing of stolen property.
The essential facts are: Defendant was on probation from a former conviction and had in two respects violated the terms of his probation. His probation officer was searching for him in order to arrest for the violations. When he saw defendant and a woman companion alighting from a vehicle in a parking lot, he hailed the defendant who turned and saw him and upon recognition handed the woman companion a wallet which he had in his hands. The officer came rapidly upon them, ordered defendant to stand and took the wallet from the woman's hands. At this point, or at most seconds thereafter, the contents of the wallet spilled. The officer picked them up and put them in one of his pockets. The contents indicated that the wallet and contents belonged to another person and this, coupled with information that the wallet had been stolen, resulted in the charge of receiving and concealing stolen property.
Before trial defendant moved to suppress the evidence because of its alleged illegal seizure. The trial court's order contained written findings and conclusions that defendant was a probation violator; that when he was hailed he recognized the officer and handed his companion the wallet; that the officer did not have probable cause to believe or grounds for reasonable suspicion that a crime was being committed in his presence; that there was not a voluntary consent from the companion to the probation officer to take the wallet and that defendant has standing to raise the issue of illegal search and seizure.[1] The *1206 trial court further found there was no abandonment by the defendant of the wallet and that the seizure was beyond the scope of a search incident to lawful arrest of defendant.
If the defendant was being validly arrested and jailed as a probation violator, which he obviously knew was the fact, he could expect that the personal property he then possessed would certainly be taken into police custody incident to the arrest. ORS 142.210 so requires. See State v. Whitewater, 251 Or. 304, 445 P.2d 594 (1968), and State v. Riner, 6 Or. App. 72, 485 P.2d 1234 (1971). Passing the property to his companion under these circumstances appears to us to be essentially no different than if he had sought, in full view of the officer, to destroy the property or secrete it in such a way that the officer could not retrieve it. If the defendant had thrown the wallet into a fire or into a river and the officer recovered it before it was destroyed, its contents could have been used against the defendant. Furthermore, if defendant had wished to leave property with someone while he was detained, stemming from an innocent desire to keep it from being in police hands during that time, his method used here is inconsistent with the innocent motive.
The evidence raises an inference that the defendant knew he was going to be immediately arrested as a probation violator and that he knew he had on his person incriminating evidence of other crime. Getting rid of the property for a time on the spur of the moment for the purpose of evading responsibility for possessing it does not qualify as an abandonment.[2] In *1207 this respect we concur in the trial judge's conclusions.
As a probationer defendant did not have the expectation of privacy one not on probation might have, particularly with reference to his probation officer. In State v. Davis/Travis, Or. App., 94 Adv.Sh. 1457, 496 P.2d 923 (1972), which also dealt with a probationer, we quoted with approval from In re Martinez, 1 Cal.3d 641, 647 n. 6, 83 Cal. Rptr. 382, 463 P.2d 734, cert. denied, Martinez v. Craven, 400 U.S. 851, 91 S.Ct. 71, 27 L.Ed.2d 88 (1970):
"`* * * The conditional nature of a parolee's freedom may result in some diminution of his reasonable expectation of privacy and thus may render some intrusions by parole officers "reasonable" even when the information relied on by the parole officers does not reach the traditional level of "probable cause." A diminution of Fourth Amendment protection, however, can be justified only to the extent actually necessitated by the legitimate demands of the operation of the parole process * * *.' * * *." 94 Adv.Sh. at 1460-1461, 496 P.2d at 925.
In the case at bar, a legitimate demand of the probation process was in progress when defendant sought to evade responsibility for possession of the wallet. Defendant had no reasonable expectation of privacy under the Fourth Amendment with reference to the wallet. See State v. Purvis, 249 Or. 404, 438 P.2d 1002 (1968); and Comment, Oregon Search and Seizure, 1968-1972, 8 Will.L.J. 210, 241 (1972). We need not decide questions of "standing" raised in the briefs and the trial court's findings.
The order of the trial court is reversed and the case is remanded for further proceedings consistent with this opinion.
NOTES
[1] Defendant urges that he had standing to assert his companion's Fourth Amendment rights because the seizure from her was directed at him. This is a bootstrap argument under the facts of this case. Our holding obviates necessity to reach the question of standing. However, we note that in Jones v. United States, 362 U.S. 257, 80 S.Ct. 725, 4 L.Ed.2d 697 (1960), and Alderman v. United States, 394 U.S. 165, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969), the United States Supreme Court has held that defendants in somewhat similar situations have no standing to assert the right. This appears to be the majority rule in federal and state courts; and in State v. Hartman, 5 Or. App. 156, 483 P.2d 107 (1971), we indicated that we would apply the rule. See also State v. Laundy, 103 Or. 443, 204 P. 958, 206 P. 290 (1922); State v. Hilton, 119 Or. 441, 249 P. 1103 (1926); State v. Hoover, 219 Or. 288, 347 P.2d 69 (1959).
Some states have adopted a stricter rule favorable to the defendant under proper circumstances. People v. Martin, 45 Cal.2d 755, 290 P.2d 855 (1955); Kaplan v. Superior Court of Orange County, 6 Cal.3d 150, 98 Cal. Rptr. 649, 491 P.2d 1 (1971). A New York statute concerning standing has been construed as codifying the California rule. New York Code of Criminal Procedure § 813-c (McKinney Supp. Sept. 1971); People v. Smith, 35 Misc.2d 533, 230 N.Y.S.2d 894 (Kings County Ct. 1962). The current draft of the proposed revision of criminal procedure in Oregon made by the Criminal Law Revision Commission contains such a provision:
Section 40. "(1) A motion to suppress may be made by any defendant against whom things seized are to be offered in evidence at a criminal trial no matter from where or from whom seized." Part II. Pre-arraignment Provisions, Art. 5, Search and Seizure, Preliminary Draft No. 3, May 1972. (This proposed draft is still under consideration by the commission, and is subject to change. If it is not changed, it may be expected to face the uncertainties of legislative consideration.)
In this connection see also Comment, Oregon Search and Seizure, 1968-1972, 8 Will.L.J. 210, 234-6 (1972); United States v. Berryhill, 445 F.2d 1189 (9th Cir.1971); White and Greenspan, Standing to Object to Search and Seizure, 118 Pa.L.Rev. 333, 354 (1970); Binkiewicz v. Scafati, 281 F. Supp. 233, 237 (D.Mass. 1968) (defendant granted standing to object to introduction of evidence seized illegally from apartment of codefendant); United States v. Birrell, 242 F. Supp. 191 (S.D.N.Y. 1965) (alternative holding), rev'd on other grounds 400 F.2d 93 (2d Cir.1968) (defendant granted standing to object to introduction of documents seized illegally from his attorney).
[2] Defendant's companion testified that he handed the wallet to her and said "Here, take these a minute. It's my parole officer." (Emphasis supplied.) This evidence stands uncontroverted from defendant's own witness. He is bound by it. We believe that the only conclusion that can be drawn from this evidence is that defendant constructively possessed the wallet after he handed it to her. He controlled its disposition and intended to regain its physical custody in "a minute." The companion held it subject to defendant's control of it. See State v. Oare, 249 Or. 597, 599, 439 P.2d 885 (1968), and n. 1 in State v. Harp, 6 Or. App. 85, 485 P.2d 1123 (1971).
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327 Mich. 200 (1950)
41 N.W.2d 524
MacGRIFF
v.
VAN ANTWERP.
McGRIFF
v.
TOY.
WADE
v.
McNALLY.
Docket Nos. 23, 24, 25, Calendar Nos. 44,422, 44,423, 44,424.
Supreme Court of Michigan.
Decided March 1, 1950.
Davidow & Davidow, for plaintiffs.
Julius C. Pliskow, for defendants McNally, Scott and Long.
BUTZEL, J.
Jack Edwards MacGriff, Floyd McGriff and Joe V. Wade each began a separate but similar suit against the defendants. Similar facts are alleged in the declaration filed in each case. After motions duly made, an order of dismissal as to defendants James N. McNally, Edwin Scott and William Long was entered in each case. We designate them herein as appellees. By agreement of counsel and order of the court the 3 cases were consolidated for the purpose of an appeal, and they will be so considered. The sole question involved is *202 whether the declaration in each case states a cause of action against appellees. In each declaration it is alleged that defendant McNally was prosecuting attorney for Wayne county and defendants Scott and Long were his assistants. As no testimony was taken, we assume for purposes of this appeal that all averments properly and sufficiently made in the declaration are true.
Among other defendants named in the declarations are Eugene F. Black, attorney general of the State of Michigan, Louis M. Nims, commissioner of the Michigan sales tax department, Henry C. Schroeder, field supervisor of Michigan sales tax department, James F. Moore, executive director of the Michigan unemployment compensation commission, as well as many other officials and officers of the city of Detroit, or Wayne county, police officers, detectives, accountants, et cetera.
Plaintiff Floyd McGriff alleges in his declaration that one of the chief police officers of Detroit became angry at him because, as editor of certain newspapers circulated in the suburbs of Detroit, he had criticised the activities of the police officer in attempting to stop bingo games conducted, as was alleged, for the benefit of the Society of Good Neighbors, a Michigan nonprofit organization. McGriff further alleged that subsequent actions were also motivated by a councilman of the city of Detroit whose candidacy McGriff's newspapers had opposed. Investigations followed as to the activities of the Society of Good Neighbors. Evidently charges of misappropriation of money collected for this society, also of nonpayment of Michigan sales tax and of unemployment compensation taxes had been made. This all culminated in a petition being filed by James N. McNally as prosecuting attorney for Wayne county and Eugene F. Black, attorney general of the State of Michigan, for a one-man grand *203 jury to investigate the commission of crimes in the city of Detroit. The petition was filed in the recorder's court for the city of Detroit and the Hon. Gerald W. Groat, judge of recorder's court for the city of Detroit, sitting as a one-man grand jury, conducted an investigation and issued process against Morrison T. Wade and Bessie Lou Tanner Wade of the township of Redford, county of Wayne, State of Michigan, charging them with fraud and misappropriation in collecting large sums of money for the Society of Good Neighbors on the pretext that the moneys were to be used for charitable purposes but that instead they were used for the private benefit of these defendants. The warrant or process further charged that the Wades conspired with each other and with a very large number of others, including the plaintiffs in the 3 cases at bar, in order to carry out the frauds complained of. The warrant or process is attached to appellants' brief.
The declaration of Jack Edwards MacGriff differs from that of Floyd McGriff only to the extent that Jack Edwards MacGriff describes himself as acting editor of the newspapers of which his father was editor. Joe V. Wade, in his declaration, states that after his honorable discharge from the army he was identified with 2 nonprofit corporation, the names of which signify that they were formed for philanthropic purposes. He avers that he had no association with the Society of Good Neighbors except that the 2 corporations with which he was identified advanced moneys to the Society of Good Neighbors so that the latter corporation could continue its charitable work.
Motions were made to dismiss the actions as to the 3 appellees on the ground that the declarations were insufficient in substance and form, indefinite, so uncertain and incomplete as not to state causes of action against these 3 defendants, that the declarations *204 did not set forth specific allegations so as to reasonably inform the defendants of the nature of the causes that they were called upon to defend, that thus they violated Court Rule No 19, § 1 (1945). Appellees further claimed the cases were begun against them as public officials who had carried out their duties in accordance with the law, and that whatever they did was absolutely privileged under the law.
The court granted the orders of dismissal. After a very careful examination of the declarations we must conclude that the judge correctly ordered dismissals as to these 3 defendants. The declarations, in accordance with the theory of plaintiffs, charged a conspiracy on the part of the defendants to defame and injure the good name, fame and reputation of the respective plaintiffs, and they also charged that defendants severally and jointly caused the plaintiffs to be charged as coconspirators in the action in the recorder's court, notwithstanding that the charges were untrue and false and made for the purpose of injuring the good name, fame and reputation of the plaintiffs. The declarations failed to show any act of conspiracy on the part of appellees. The declarations show a succession of events in which various officials performed their duties. The declarations do not show any act or acts by the appellees except such as it was their duty to perform.
The declarations also savor of libel but it is not shown where the libels were published or their contents, nor are there the necessary allegations and averments necessary in a libel declaration against appellees herein. There is possibly an intimation in the declaration that some defendants, without specifying which ones, furnished the newspapers with a copy of the warrant and a statement of the charges a few hours before the warrant and process was issued by the grand jury. There is no direct *205 charge of a violation of the oath of secrecy as to what occurred before the grand jury. It would be unnatural if there was not much comment by the press in regard to a case of this public character. However, the declarations are wholly indefinite as to the so-called publication. It is difficult to understand plaintiffs' charges. We do not believe that plaintiffs contend that the petition for the calling of a one-man grand jury or the subsequent process that issued under the seal of the court is libelous. The 3 suits were begun prior to our decision in Society of Good Neighbors v. Mayor of Detroit, 324 Mich 22, wherein we held that bingo games were unlawful. Some of the facts stated in the opinion in that case show some of the claims of plaintiffs in the cases at bar.
It was the duty of the prosecuting attorney to file or join in filing the petition for the one-man grand jury. CL 1948, §§ 767.3, 767.20, 767.22 (Stat Ann §§ 28.943, 28.960, 28.962). What was done by appellees in their official capacity is privileged. Mundy v. McDonald, 216 Mich 444 (20 ALR 398); Reycraft v. McDonald, 194 Mich 500. The mere assertion that appellees joined in a conspiracy is not sufficient. Specific illegal acts on their part must be shown: Roche v. Blair, 305 Mich 608.
The declarations were properly dismissed as to 3 appellees and the order of the court in so doing is affirmed, with costs to be assessed only in the consolidated case to the appellees.
BOYLES, C.J., and REID, NORTH, DETHMERS, CARR, BUSHNELL, and SHARPE, JJ., concurred.
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421 A.2d 1295 (1980)
David W. GILBERT
v.
DEPARTMENT OF EMPLOYMENT SECURITY.
No. 403-79.
Supreme Court of Vermont.
September 9, 1980.
David W. Gilbert, pro se.
Brooke Pearson and Matthew R. Gould, Montpelier, for defendant.
Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.
PER CURIAM.
The claimant is appealing a decision of the Vermont Employment Security Board (Board) denying his claim for unemployment compensation. We affirm.
Claimant was employed as a tutor for migratory school aid children under the federally funded Rural Tutorial Program. He was paid an hourly wage. His duties consisted of teaching or tutoring the children of migrant farm workers. He worked in the St. Albans School District from October 1978 to June 8, 1979. In June of 1979, he received verbal assurance that he would be offered his position for the 1979-1980 academic year. This was confirmed in writing.
From these findings the Board concluded that the claimant performed services in an instructional capacity for an educational institution and had a reasonable assurance that he would perform services in the same *1296 capacity for the succeeding academic year. He was denied compensation benefits pursuant to 21 V.S.A. § 1343(d).
We would first note that the claimant has made no objection to any of the findings of the Board.
He argues that "reasonable assurance" as found in § 1343(d) must be interpreted to mean a contract and not a verbal or written understanding. 21 V.S.A. § 1343(c) denied benefits based on instructional service if the individual had a contract to perform services in the succeeding academic year or term. 21 V.S.A. § 1343(d) was enacted in 1977. It denied benefits after December 31, 1977, to any individual performing service after December 31, 1977, "in an instructional . . . capacity for an educational institution . . . if there is a contract or a reasonable assurance that such individual will perform services . . . ." (emphasis added). In Herrera v. Industrial Commission, 197 Colo. 23, 593 P.2d 329, 331 (1979), the Colorado Supreme Court concluded that "reasonable assurance" was intended to mean "a written, verbal, or implied agreement that the employee will perform services in the same capacity during the ensuing academic year or term." We sustain the conclusion of the Board that the claimant had "reasonable assurance" of employment for the next year. No written contract is necessary. The claimant can take nothing from this argument.
He also argues that 21 V.S.A. § 1343(d) discriminates against him as a teacher and thus denies him the equal protection guaranteed by the Fourteenth Amendment to the United States Constitution. As to his claim he has failed to demonstrate that the class to which he belongs is protected, or that the statute impinges on a fundamental interest. We then must only determine whether the statute, as amended and applied, has a rational relation to a legitimate governmental interest. We hold that it does. Herrera v. Industrial Commission, supra.
Judgment affirmed.
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777 F.Supp. 1175 (1991)
Lisa DANGLER, on Behalf of Justin DANGLER, her minor son, Plaintiff,
v.
YORKTOWN CENTRAL SCHOOLS, John V. Doherty, Superintendent of Schools (sued in his official and individual capacities), and Michael Frischman, Principal, Yorktown High School, (sued in his official and individual capacities), Defendants.
No. 91 Civ. 3469 (GLG).
United States District Court, S.D. New York.
November 21, 1991.
*1176 Michael H. Sussman, Goshen, N.Y., for plaintiff.
Ahmuty, Demers & McManus, Albertson, N.Y. (Michael J. Rabus, of counsel), for defendants.
OPINION
GOETTEL, District Judge:
Our federal court system is being brought into ridicule and our Constitution is being debased by persons who proclaim themselves to be its strongest supporters: civil rights advocates and attorneys purportedly working in the public interest. By attempting to elevate mere personal desires into constitutional rights and claiming denial of their civil rights whenever their desires are not realized, these persons are demeaning the essential rights and procedures that protect us all.
Justin Dangler, a third year student at Yorktown High School, and his parents wanted him admitted to the High School National Honor Society, believing that this accolade would promote his acceptance at prestigious colleges. To become a member of the National Honor Society, a high school student must have a grade average above a certain level and qualify in three other categories: leadership, service, and character. In addition, the Yorktown chapter stresses the qualities of honesty and exemplary character. Selections to the National Honor Society are made by a Faculty Admission Committee upon recommendations by teachers in the high school familiar with those students who have academic eligibility. Justin Dangler met the academic standards. However, of all of the third year students who so did, he received the poorest ratings from the faculty who knew him. Two teachers who knew him well spoke against his nomination at the Committee meeting. The Faculty Admission Committee, some of whom also knew the applicant personally, unanimously decided that he had not met all the criteria for membership. (One or two other students were also rejected.) A letter was written informing Justin of his rejection, but advising that he could apply again the following semester and urging him to "strive to attain a high quality of character, leadership, and service."
The Dangler family was outraged by this rejection. They demanded an explanation and the intervention of school officials in this decision. They also disputed various aspects of Justin's high school record. The Danglers succeeded in having the high school principal conduct an investigation of the selection process but, when he declined to intervene and pleas to other school officials were unsuccessful, commenced this suit. (The facts leading up to the commencement of suit are set forth in more detail in an earlier decision. See Dangler v. Yorktown Cent. Schools, 771 F.Supp. 625 (S.D.N.Y.1991)).
The plaintiff in the action was Lisa Dangler, Justin's mother, who sued on his behalf, alleging three causes of action under 42 U.S.C. § 1983. The first claim was that Justin was deprived of property without due process of law. That was clearly a frivolous claim since there exists no property right giving rise to a constitutional claim to membership in the National Honor Society. *1177 Federal courts have so previously held. As we noted in our earlier opinion, 771 F.Supp. 625, at 628:
Justin is not the first student to litigate this issue and unanimously, courts have concluded that membership in the National Honor Society does not give rise to a property interest which entitled one to due process of law.
That claim was dismissed prior to trial.
Two other claims were alleged, predicated on the first amendment. First, plaintiff alleged that the refusal of the school authorities to select Justin Dangler for membership in the honor society was done in retaliation for his father's actions with respect to the school on numerous matters concerning both his children and the operation of the school, in general. Second, plaintiff claimed that the school authorities retaliated against Justin for publishing an article indicating the existence of racial prejudice among students at the high school. These allegations, if supported by evidence, were colorable constitutional claims. However, the evidence presented at trial showed the claims to be factually baseless.
To begin, the article written by Justin Dangler, which was not as adverse to the student body as claimed by him and which was published with school approval, did not come out until after the decision to deny his admission to the honor society had been made. With respect to his father's activities, it was established at trial that Mr. Dangler had filed numerous complaints with the school, civil rights agencies and the courts concerning Yorktown High School.[1] These activities clearly did not endear the family to the administration at Yorktown High School. However, there was a total absence of proof that any of this had impact on the recommendations of the teachers or the decision of the Faculty Selection Committee.
At the conclusion of the evidence, the court dismissed the case as to the Superintendent of Schools (who took no positive action with respect to the application for membership) and reserved decision as to the other two defendants, the School District, and the high school principal, Michael Frischman. The jury then returned a verdict in favor of those defendants.
All defendants now seek an award of reasonable attorney's fees and costs. Section 1988 of Title 42 authorizes a district court to award reasonable attorney's fees to the prevailing party in a civil rights litigation such as this. The Supreme Court has put a gloss on this, however, with the result that plaintiff is awarded attorney's fees even if he or she prevails on only part of the case and even though a small benefit is derived while a prevailing defendant may obtain attorney's fees only "upon a finding that the plaintiff's action was frivolous, unreasonable or without foundation, even though the action was not brought in subjective bad faith." Christiansburg Garment Co. v. Equal Employment Opportunity Commission, 434 U.S. 412, 422, 98 S.Ct. 694, 700, 54 L.Ed.2d 648 (1978) (Title VII), accord Hughes v. Rowe, 449 U.S. 5, 14, 101 S.Ct. 173, 178, 66 L.Ed.2d 163 (1980) (§ 1988). In this circuit, defendant's attorney's fees have been awarded where the plaintiff's civil rights claims are groundless and unreasonable. See Davidson v. Keenan, 740 F.2d 129 (2d Cir.1984); Harbulak v. County of Suffolk, 654 F.2d 194 (2d Cir.1981). Other circuits make similar awards. See, e.g., Bernstein v. Menard, 728 F.2d 252 (4th Cir.1984) (awarding fees in a § 1983 action against a principal and the school district where the action was found to be frivolous and vexatious).
Plaintiff's counsel argues that fees should not be awarded to a prevailing defendant since "such a practice would chill plaintiffs from filing civil rights suits." Plaintiff's Brief in Opposition, at 1. Indeed, a chilling effect is a real consideration. Accordingly, in recognition of the fact that a plaintiff with a meritorious civil rights claim may nevertheless lose in court, the Supreme Court set a stricter standard for the award of attorney's fees to a prevailing defendant. Thus, the Christiansburg standard for attorney's fees has the effect of preventing a chilling effect while penalizing those whose suits are frivolous. *1178 Moreover, the fact that one claims to be litigating a civil rights case which would benefit the public is no shield from Christiansburg. We applaud the accomplishments of those who litigate in the public interest. But, there is no civil right to make false allegations. It is simply not in the public's interest to have frivolous cases litigated. The award of attorney's fees to a prevailing defendant under the Christiansburg standard thus protects the public from those who irresponsibly claim to be acting for the public good.
Plaintiff's counsel further argues that because the court did not grant summary judgment to the defendants (no motion was made), or direct a verdict in their favor, the case must have had sufficient merit to avoid deeming the action frivolous. Summary judgment is a disfavored remedy in this Circuit so long as there are disputed facts.[2] Directed verdicts are also disfavored because they require a retrial if improvidently granted.[3] Nothing in this court's rulings throughout the trial in any way indicated that this court believed the factual allegations or claims of the plaintiff. On the plaintiff's motion for a preliminary injunction we noted that the record "strongly suggests that no improper motives" were involved, but since questions of motive cannot be decided on motion because credibility is an issue of fact, a "specter of a factual question" had been raised. Dangler, 771 F.Supp. at 631.
To underscore the lack of merit in plaintiff's case, we note that had the jury returned a verdict in the plaintiff's favor, this court would have set it aside. The evidence overwhelmingly established that the Faculty Selection Committee evaluated Justin Dangler's application on its merits and without any consideration of an article which had not been published or read by them or the litigious activities of Justin Dangler's father. Indeed, the evidence at trial brought out substantial adverse information concerning Justin Dangler which was not known to the Faculty Selection Committee and which, had it been known, would have even more strongly justified its decision not to select him. On the basis of all of the foregoing, we conclude that the defendants are entitled to attorney's fees in this case.
The defendants' firm claims that 465.5 hours of time were expended during the several months that this case was being prepared for trial and tried. We consider those hours claimed to be only slightly excessive for the work involved. With respect to the hourly rates, defendants' counsel charged their client no more than $105 per hour for a partner's time and only $50 per hour for an associate's time. For a firm practicing in the New York metropolitan area, these charges are unusually low. (Their explanation for these low rates is that they have to charge them in order to get the work.) Consequently, they seek a 50% increase in their time charges, which they claim would be a fair and reasonable fee and the prevailing market rate. It is true that the Supreme Court, in Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984), held that prevailing market rates in the community should be used for setting fees. However, that was in connection with Legal Aid Society representation where the client had not been charged a fee. Moreover, the court in that case refused to increase the rates based on other considerations. In Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct. 939, 103 L.Ed.2d 67 (1989), the Supreme Court held that the attorney's fees awarded to a prevailing plaintiff should not be capped by a contingency fee agreement between plaintiff and its counsel. However, where we are considering fees awarded to a prevailing defendant, there is no need to go beyond the contractual relationship, as in Blanchard, in order to create a special incentive for the civil rights issues to be fully explored. Therefore, defendants' award will be made at the billing rates. Consequently, of the $60,736 of billed time, we award an attorney's fee of $60,000.
*1179 In addition, defendants seek $5,699.29 in out-of-pocket costs. Most of this is for witness expenses. Certain portions of this and the other out-of-pocket costs are appropriately billed as court costs and should not be sought as part of an award of attorney's fees and costs at this time. We therefore restrict our award of attorney's fees and costs to the $60,000 mentioned above and will allow defendants to bill costs in the appropriate manner. The Clerk may enter judgment accordingly.
SO ORDERED.
NOTES
[1] He was successful in some of these matters and unsuccessful in others. Some concerned matters as trivial as changing a single grade of his daughter from an A to an A+.
[2] Even in an application for Rule 11 sanctions against an attorney, the denial of a summary judgment motion does not create an immunity from an award. Healey v. Chelsea Resources Ltd., 947 F.2d 611 (2d Cir.1991).
[3] In theory, at least, the trial court retains the ability to set aside unwarranted jury verdicts and, consequently, matters should be left to the jury's initial determination.
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280 Pa. Superior Ct. 65 (1980)
421 A.2d 406
Teresea Alper RUPEL
v.
Ronald BLUESTEIN, Esquire, Appellant.
Superior Court of Pennsylvania.
Argued September 12, 1979.
Filed July 25, 1980.
*66 *67 *68 Elwood S. Levy, Philadelphia, for appellant.
Albert Momjian, Philadelphia, for appellee.
Before SPAETH, HESTER and CAVANAUGH, JJ.
SPAETH, Judge:
This appeal arises from an order granting appellee's petition for a preliminary injunction.
On September 25, 1978, appellee filed a complaint in equity alleging that by order of an Indiana court she had been given custody of her two children; that her ex-husband had abducted her children from her custody; and that appellant knew her ex-husband's whereabouts and was aiding him in fleeing from legal authority. The complaint requested, among other things, that appellant be compelled to disclose to appellee her ex-husband's location. Also on September 25, appellee filed an ex parte petition for a preliminary injunction, which the lower court granted the same day. The lower court's order stated:
Defendant, Ronald Bluestein, Esquire, is hereby restrained and enjoined from informing . . . [appellee's husband], his agents, servants or employees, in any manner whatsoever, whether directly or indirectly, whether by himself or through his agents, servants or employees, as to the institution of these proceedings or the pendency thereof.
*69 On September 28, the lower court ordered that the preliminary injunction continue in effect until a hearing could be held on October 6, and also ordered, for the first time, that appellee file bond in the amount of $100, which appellee did the same day. On October 6, a hearing limited to legal argument was held. The hearing was ultimately continued until October 10, the lower court ordering the preliminary injunction to continue in effect meanwhile. However, no hearing was held on the 10th, and on October 11, the court, with the consent of the parties, rescheduled the hearing for October 31; the court also ordered the preliminary injunction to continue in effect.[1] On October 12, appellant filed preliminary objections to the complaint, and on October 23, this appeal was filed.[2]
I
Does the lower court have jurisdiction to entertain this action?
Appellant argues that the lower court lacks jurisdiction to entertain appellee's action because the sole objective of the action is to obtain discovery from appellant, and no other action is at present pending in the Pennsylvania courts to which the discovery could be relevant. See Cole v. Wells, 406 Pa. 81, 177 A.2d 77 (1962); see also T.C.R. Realty Co. v. Cox, 472 Pa. 331, 372 A.2d 721 (1977); Einhorn v. Phila. Electric Co., 410 Pa. 630, 190 A.2d 569 (1963).
There can be no doubt that appellee had the right to invoke the Uniform Child Custody Jurisdiction Act, 11 P.S. §§ 2301 et seq. (1979-80 Supp.), to enforce the order of the *70 Indiana Court giving her custody of her two children. Section 2314 of the Act provides:
The courts of this State shall recognize and enforce an initial or modification decree of a court of another state which had assumed jurisdiction under statutory provisions substantially in accordance with this act or which was made under factual circumstances meeting the jurisdictional standards of the act, so long as this decree has not been modified in accordance with jurisdictional standards substantially similar to those of this act.
Section 2316(a) provides:
A certified copy of a custody decree of another state whose decrees are recognized under section 14 may be filed in the office of the prothonotary of any court of common pleas of this State. The prothonotary shall treat the decree in the same manner as a custody decree of the court of common pleas of this State. A custody decree so filed has the same effect and shall be enforced in like manner as a custody decree rendered by a court of this State.
Section 2321(a) provides:
Upon request of the court of another state the courts of this State which are competent to hear custody matters may order a person in this State to appear at a hearing to adduce evidence or to produce or give evidence under other procedures available in this State or may order social studies to be made for use in a custody proceeding in another state. A certified copy of the transcript of the record of the hearing or the evidence otherwise adduced, any psychological studies and any social studies prepared shall be forwarded to the requesting court.
Appellee's counsel, for reasons best known to himself, apparently has not invoked these provisions. There is no evidence of record that a certified copy of the Indiana custody decree has been filed with the prothonotary of the lower court pursuant to section 2316(a), nor is there evidence that the Indiana court has requested the Pennsylvania courts to conduct discovery in connection with custody proceedings *71 before it. Instead, counsel has filed the present complaint in equity. It is therefore arguable that the lower court lacked jurisdiction either for the reason appellant assigns, i.e., that appellee's action was an improper bill of discovery, or for the reason that appellee has failed to exhaust her statutory remedies. See generally 5 Goodrich-Amram § 1509(b):1. Since the existence of an exclusive statutory remedy is normally a non-waivable objection, id., we should consider both issues.
A
It is difficult to believe that the drafters of the Uniform Child Custody Jurisdiction Act intended the act to be the exclusive remedy for a parent who is trying to regain the custody of children who have been abducted by the other parent. Section 2302(a) of the act provides:
The general purposes of this act are to:
* * * * * *
(5) deter abductions and other unilateral removals of children undertaken to obtain custody awards;
* * * * * *
(7) facilitate the enforcement of custody decrees of other states:
(8) promote and expand the exchange of information and other forms of mutual assistance between the courts of this State and those of other states concerned with the same child . . . .
Subsection (b) of the same provision states:
This act shall be construed to promote the general purposes stated in this section.[3]
*72 The act does not state that it is to be the exclusive remedy to regain custody of abducted children, nor does there appear to be any public policy that would justify such a limitation. In other cases courts have recognized that in creating a statutory remedy the Legislature does not always intend to displace traditional equitable remedies, but sometimes intends to make the statutory remedy permissive or alternative only. E.g., DeLuca v. Buckeye Coal Co., 463 Pa. 513, 345 A.2d 637 (1975). Here, the Legislature must have intended the remedies provided by the act to be alternative, and thus cumulative, to the traditional equitable remedies, for that would be the best way to achieve its general purposes of "deter[ring] abductions" and "facilitat[ing] the enforcement of custody decrees of other states."
B
This conclusion reached, the question becomes whether appellee's action is maintainable under the principles governing traditional actions in equity.
*73 It has been held that equitable jurisdiction attaches "when an individual equity-plaintiff has shown that the wrongdoer's acts, in addition to violating the criminal law, are also interfering with that individual plaintiff's property rights . . . . or with that individual plaintiff's personal or civil rights." Pa. S.P.C.A. v. Bravo Enterprises, 428 Pa. 350, 359, 237 A.2d 342, 347 (1968). See also Commonwealth ex rel. Costa v. Boley, 441 Pa. 495, 272 A.2d 905 (1971); Lackey v. Sacoolas, 411 Pa. 235, 191 A.2d 395 (1963); Everett v. Harron, 380 Pa. 123, 110 A.2d 383 (1955); Rankin v. Chester-Upland School Dist., 11 Pa.Cmwlth. 232, 312 A.2d 605 (1973). More generally, it has been stated that "[c]ourts of equity . . . have the power to prevent or restrain the commission or continuance of acts contrary to law and prejudicial to the interests of the community or the rights of individuals." Bruhin v. Commonwealth, 14 Pa.Cmwlth. 300, 304, 320 A.2d 907, 910 (1974). See also 17 P.S. § 282 (1962), repealed by the Judiciary Act Repealer Act, 42 Pa.C.S.A. § 20002(a) [152] (1979 Pamphlet) (present provision at 42 Pa.C.S.A. § 931 (1979 Pamphlet)). Courts in equity are also competent to exercise jurisdiction over cases of fraud, Safeguard Mutual Ins. Co. v. Huggins, 241 Pa.Super. 382, 361 A.2d 711 (1976); Maccabees v. Cappas, 164 Pa.Super. 317, 64 A.2d 513 (1949), and cases involving tortious conspiracy. Benjamin v. Foidl, 379 Pa. 540, 109 A.2d 300 (1954).
Appellee's complaint alleges that appellant "has knowingly counseled [appellee's ex-husband] in the commission of a felony, to wit: child stealing, and continues to knowingly aid and abet [appellee's ex-husband] in the commission of a crime and in the violation of court orders of the State of Indiana." These allegations have not been proved, but if proved, the conduct they describe is the sort of wrongful conduct that a court in equity is competent to enjoin. Indeed, the jurisdiction of the lower court would be established even without allegations of abetting the commission of a crime and the violation of court orders. In an analogous area the Supreme Court has held that an action in equity will lie to enjoin wrongful interference by third *74 parties with existing contractual relationships. Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 482 Pa. 416, 393 A.2d 1175 (1978), appeal dismissed, 442 U.S. 907, 99 S.Ct. 2817, 61 L.Ed.2d 272 (1979). Given this holding, it is clear that an action in equity will lie to enjoin interference with the more important relationship of a parent's legal custody of her children.
It should also be noted that appellant's assertion that appellee's complaint asks only for discovery of the whereabouts of appellee's ex-husband and children is inaccurate. The complaint asks not only for discovery, but for general equitable relief. General relief certainly could encompass, upon adequate proof, restraints on appellant to prevent his abridgement of appellee's custody rights in any way whatsoever.
II
Did appellee demonstrate her right to a preliminary injunction?
Appellant argues that the procedure followed by counsel for appellee was defective in two respects: the complaint was improperly verified, see Pa.R.Civ.P., R. 1024, and the petition for a preliminary injunction was not verified at all, see Pa.R.Civ.P., R. 206. In appellant's view, the result of these defects was to oust the jurisdiction of the lower court.
The defects were not jurisdictional. Verification is required only for the protection of the parties. Monroe Contract Corp. v. Harrison Square, Inc., 266 Pa.Super. 549, 557, 405 A.2d 954, 959 n. 5 (1979). Moreover, the petition for a preliminary injunction did not have to be verified because it did not contain allegations of fact, but merely incorporated the allegations of the complaint and alleged that immediate and irreparable harm would result if appellant communicated with appellee's ex-husband regarding the institution or pendency of the action. See Pa.R.C.P. 206; 2 Goodrich-Amram 2d § 1024(a):1 at 213 ("If the pleading adds no new facts, denies no facts already pleaded, but raises only issues of law, there is no purpose in an oath and none is required").
*75 B
The question remains, however, whether the lower court should have issued a preliminary injunction even though it had the power-jurisdiction-to do so.
Pa.R.C.P. 1024(c) requires a complaint to be verified by one or more of the parties filing the pleading unless all the parties (1) lack sufficient knowledge or information, or (2) are outside the jurisdiction of the court and the verification of none of them can be obtained within the time allowed for filing the pleading. In such cases, the verification may be made by any person having sufficient knowledge or information and belief and shall set forth the source of his information as to matters not stated upon his own knowledge and the reason why the verification is not made by a party.
Here the complaint was not verified by appellee, but by her attorney as follows:
ALBERT MOMJIAN, being duly sworn according to law, deposes and says that he is one of the attorneys representing plaintiff in the instant action, that he is authorized to take this Affidavit on behalf of plaintiff as set forth in a certain Affidavit of Authorization given by plaintiff and dated July 28, 1978 and attached hereto, and that the facts set forth in the within Complaint in Equity are true and correct to the best of his knowledge, information and belief.
As appellant points out, this verification was defective in two respects: It did not state why appellee was unable to verify the complaint herself; and it did not state the source of counsel's information as to matters not stated upon counsel's own knowledge.
Improper verification of a complaint may not be brushed aside as a mere "legal technicality," cf. Madigan Appeal, 434 Pa. 361, 367, 253 A.2d 271, 274 (1969), and may result in the waiver of rights by the pleader. Warren v. *76 Williams, 370 Pa. 380, 88 A.2d 406 (1952).[4] On the other hand, we must also be cognizant of the admonition in Pa.R.Civ.P., R. 126 that "[t]he rules [of civil procedure] shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The court at every stage of any such action or proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties." "Courts should not be astute in enforcing technicalities to defeat apparently meritorious claims . . . . The procedural rules are not ends in themselves, but means whereby justice, as expressed in legal principles, is administered; they are not to be exalted to the status of substantive objectives. . . ." General Mills, Inc. v. Snavely, 203 Pa.Super. 162, 167, 199 A.2d 540, 543 (1964) (citations omitted). See also Provco Leasing Corp. v. Safin, 265 Pa.Super. 423, 402 A.2d 510 (1979); Milford Traumbauersville Area Sewer Authority v. 0.753 Acres of Land, 25 Pa.Cmwlth. 13, 358 A.2d 450 (1976).
In Monroe Contract Corp. v. Harrison Square, Inc., supra, counsel's verification stated that his client "lacked sufficient knowledge to make verification" but did not state that the client also "lacked sufficient information." We held that although "counsel may verify only in those cases in which the conditions delineated in Rule 1024 are present," counsel's error was de minimis error, and that the petition in question should not be dismissed. Similarly, in Safeguard Invest. Co. v. Davis, 239 Pa.Super. 300, 361 A.2d 893 (1976), where appellant's attorney improperly verified a petition to open a confessed judgment entered on one of two mortgage bonds, we held that the defect was inconsequential because appellant had properly verified a second petition to open the confessed judgment that had been entered on the other mortgage bond.
*77 In the present case, the defect in the verification of the complaint is more serious than the defect present in Monroe. In Monroe, we had little trouble finding that counsel had the right to verify the petition to open or strike judgment. Here, however, counsel's right to verify the complaint is very doubtful. Nothing in the record suggests that appellee lacked sufficient knowledge or information to verify the complaint. Indeed, all indications are to the contrary. Moreover, while it appears that appellee resided outside Pennsylvania, she could avoid the duty to make personal verification of the complaint only if she was outside the jurisdiction of the court and her verification could not be obtained within the time allowed for filing of the pleading. 2 Goodrich-Amram 2d § 1024(c):1 at 220 n. 39. Again, nothing in the record suggests the satisfaction of these conditions.[5] The defect in the verification of the complaint is also more serious than the defect present in Safeguard. In Safeguard, the appellant had filed a second, properly verified, petition ("the virtual twin of the first"). Here, no properly verified complaint has ever been filed. In addition, as previously noted, counsel's verification here had a further defect, not present in either Monroe or Safeguard, in that it did not state which allegations were made on the basis of counsel's own knowledge or the source of counsel's information as to matters not stated on his own knowledge.
Were we presented with the issue of whether the improper verification required dismissal of the complaint, we might well be reluctant to dismiss. Appellee's affidavit authorizing her counsel to act on her behalf is attached to the complaint. The affidavit states that appellee is the mother of two children, that her ex-husband has removed the children from Indiana and secreted himself and the children from her, that the whereabouts of her ex-husband and the *78 children are unknown to her, and that appellant has information concerning the whereabouts of the ex-husband and the children. Taken together, the affidavit of authorization and the exhibits attached to the complaint indicate the basis upon which appellee's counsel made his verification.[6] The issue before us, however, is not whether the improper verification required dismissal of the complaint, but rather whether a preliminary injunction should have issued, given the defective complaint, and given appellee's failure to present any evidence (other than the complaint) in support of the preliminary injunction.
It is well-established that in order to receive the benefit of a preliminary injunction appellee was required to demonstrate 1) that her right to relief was clear; 2) that her need for relief was immediate; 3) that her potential injury was irreparable; and 4) that she had no adequate remedy at law. E.g., Township of South Fayette v. Commonwealth, 477 Pa. 574, 385 A.2d 344 (1978); Safeguard Mutual Ins. Co. v. Williams, 463 Pa. 567, 345 A.2d 664 (1975); Roberts v. School Dist. of Scranton, 462 Pa. 464, 341 A.2d 475 (1975); Berman v. Philadelphia, 425 Pa. 13, 228 A.2d 189 (1967); Wolf v. Baltimore, 250 Pa.Super. 230, 378 A.2d 911 (1977). This demonstration could have consisted of "the averments of the pleadings or petition . . .[,] affidavits . . . [,] or any other proof which the court may require." Pa.R.C.P. 1531(a). See also Minit-Man C.W. Corp. v. B. & C.T. Council, 411 Pa. 585, 192 A.2d 378 (1963).
In permitting a preliminary injunction to issue solely upon the averments in a complaint, the present rules of civil *79 procedure manifest a dramatic departure from the strict evidentiary requirements existing under prior practice:
One of the major changes in practice effected by these Rules is the elimination of affidavits as a condition precedent to the issuance of a preliminary injunction. Subdivision (a) of Rule 1531 eliminates entirely any mandatory requirement that any affidavit need be filed as a condition precedent to the grant of any type of injunction. The plaintiff's initial pleading, or his petition for a preliminary injunction, will be verified in every case. This verification will give the sanction of an oath to the plaintiff's papers. Supporting affidavits furnish no more guarantee of the truth of the plaintiff's position than his sworn complaint or petition.
Further, the real protection to the defendant is not the possible penalty for perjury in making a false affidavit; it is the bond which the plaintiff must file under subdivision (b) of Rule 1531. Accordingly, subdivision (a) of Rule 1531 permits the court to grant a preliminary or special injunction, whether with or without notice, on the basis of "the averments of the pleadings" or of "such proof" as the court may require. Under this flexible standard, affidavits of the parties or of third persons have been made optional. The plaintiff may file affidavits if he wishes and the court may demand further supporting proof if it wishes. But the obligatory affidavit requirements of former Equity Rule 38 have been removed entirely.
Under former equity practice a preliminary injunction would not issue unless persons other than the plaintiff supported the averments in the bill with their own affidavits and these were filed with the court. The former Equity Rules did not indicate how many should be filed, but there were numerous instances in which the court refused to grant the preliminary injunction because only one affidavit had been filed. Two or more were usually required.
In addition, a special affidavit was required if an ex parte injunction was to be entered prior to any preliminary *80 hearing. This affidavit, which could be executed by the plaintiff, was for the purpose of certifying that irreparable loss or damage would result to plaintiff unless the injunction was issued immediately.
5 Goodrich-Amram 2d § 1531(a):3 at 269-70 (footnotes omitted).
See also 8 Stand.Pa.Prac.-Ch. 36 §§ 93-99 (1961).[7]
As this statement makes clear, the premise upon which the evidentiary requirements for the issuance of a preliminary injunction have been liberalized is that an injunction still may not issue without some sworn evidence justifying the issuance. It is easy to understand this insistence on sworn evidence; it represents a necessary precaution to ensure that the extraordinary powers of a court of equity *81 will not be misused by a party to the detriment of an innocent person. Thus the Supreme Court has often emphasized that because it is so drastic a remedy, a preliminary injunction should be issued only when all essential prerequisites to issuance have been met. Credit Alliance Corp. v. Philadelphia Minit-Man Car Wash Corp., 450 Pa. 367, 301 A.2d 816 (1973). See also Rick v. Cramp, 357 Pa. 83, 53 A.2d 84 (1947); Cardamone v. Univ. of Pittsburgh, 253 Pa.Super. 65, 384 A.2d 1228 (1978); Rush v. Airport Commercial Properties, Inc., 28 Pa.Cmwlth. 51, 367 A.2d 370 (1976).
Here, it cannot be maintained that all essential prerequisites to the issuance of a preliminary injunction were met. As already mentioned, the lower court received no testimony at all-although no reason appears why appellee could not have appeared before the court. The only sworn statements by appellee presented to the court were that her two children had been taken from Indiana by her ex-husband and secreted from her, and that appellant has information concerning the whereabouts of the ex-husband and the children. There were no averments that in removing the children her ex-husband had committed an unlawful act, or that her custody rights in the children had been violated, or that she otherwise had a right to have the children. The complaint, of course, purported to establish these matters, but the complaint was not sworn to by appellee but was improperly verified by appellee's attorney, and none of the exhibits attached to the complaint, except perhaps one,[8] was certified or otherwise authenticated.
This insistence upon at least a properly verified complaint may seem "technical," but no apology need be made for that. The rules are clear, and their requirements easily satisfied. Appellee's violation of the rules-more accurately, her counsel's *82 violation-is equally clear. Given that appellee sought the most extraordinary relief that a court can grant, no reason appears why she should not be required to abide by the rules. Furthermore, we are an appellate court. To sanction appellee's and the lower court's ignoring of the rules could only represent a most troublesome precedent. One may concede the likelihood that appellee could have produced sworn evidence as required by the rules before a preliminary injunction may issue; the point is that she did not. To hold that her unexplained and unexcused noncompliance is unimportant could only encourage noncompliance by others, and laxity on the part of the lower courts.
The order of the lower court is reversed, the preliminary injunction dissolved, and the case remanded for further proceedings.[9]
CAVANAUGH, J., concurs in the result.
HESTER, J., files a dissenting opinion.
HESTER, Judge, dissenting:
This bizarre case is presently before the court on appeal by Ronald Bluestein, attorney, from the issuance of a temporary restraining order and special injunction dated September 25, 1978 and continued in full force and effect by order dated September 28, 1978, subsequently reissued on October 6, 1978 and again continued in full force and effect by agreement of the parties and their counsel by order dated October 11, 1978.
The grant of appellee's request for injunctive relief which is the subject matter of the instant appeal accompanied the filing of a complaint in equity wherein the appellee has sought primarily:
*83 (a) to enjoin appellant-attorney, his agents, servants or employees, in any manner whatsoever whether directly or indirectly; the fact that the instant proceeding has been brought or that the instant proceedings are pending; and
(b) to order appellant-attorney to reveal to appellee any and all information which he may have concerning the present whereabouts of Alper and/or the children and the whereabouts of Alper and/or the children for the past year.
Obviously the theory underpinning the instant action is that upon learning of the bringing of this action, Alper would likely again flee with the children and attempt to further conceal their whereabouts.
The factual posture of this case was capsulized by the lower court in its opinion and must be restated here:
The facts set forth in the complaint depict a harrowing and tragic tale of a broken marriage terminated by a decree of dissolution on December 30, 1976 in Tippecanoe County, Indiana. Custody of the two children born of the marriage, ages 11 and 9, was given to mother-appellee with visitation rights to the father, Anatole Alper. On July 15, 1977, the father secured possession of the children for visitation of six weeks. During the early part of that period, he moved leaving no forwarding address. Since that time, the appellee has been unable to learn the whereabouts of the father or children and she has thus been deprived of any contact of any kind whatsoever with her children since July, 1977.
In August, 1977, appellee became aware that appellant-attorney here represented her former husband by means of a letter sent to a banker, bearing on the imprinted letterhead her husband's name and the appellant's office address and telephone number. Numerous other letters bearing the same imprint were sent to other persons in the community. Appellant-attorney, himself, sent support payments to appellee's former counsel.
The complaint further alleged that appellant has represented that he is a repository for mail for Anatole Alper and that he, appellant, talked to Alper on a monthly basis.
*84 On August 26, 1977, appellee's former husband was indicted by the Grand Jury of Tippecanoe County, Indiana, upon two counts of child stealing and on November 28, 1977, the Superior Court of Tippecanoe County issued certain findings and orders in which the court found, inter alia, that Anatole Alper had concealed his whereabouts since August 12, 1977; that he had violated the custody and visitation orders of the court; that he was in contempt of court and that he had fled the jurisdiction to prevent enforcement of the custody-visitation orders.
The court ordered a fine and punitive damages of $100 per day and imprisonment, until Alper purges himself of contempt by returning the children to appellee. A warrant for Alper's arrest was issued.
The complaint further alleges that appellant has knowledge of the present whereabouts of Alper and accuses appellant of knowingly counseling Alper in the commission of a felony, to-wit, child stealing, and that he continues to aid and abet Alper in the commission of a crime and in violation of the court orders of Indiana.
Appellant raises four issues on appeal, to-wit: (1) the lower court's jurisdiction to hear this matter; (2) that the injunction was improperly issued without bond; (3) the applicability of the attorney-client privilege; and (4) a defect in the affidavit accompanying the Complaint in Equity.
Our learned colleagues in their majority opinion appear to conclude that the lower court has jurisdiction to entertain the instant action pursuant to the Uniform Child Custody Jurisdiction Act (supra), as well as pursuant to its general equity powers. However, the majority opinion reversing the Order of the lower court and dissolving said Preliminary Injunction concluded that a Preliminary Injunction should not have issued because of a purportedly improperly verified Complaint.
I disagree and therefore respectfully dissent.
*85 I am convinced that the lower court properly exercised its equitable powers in issuing said Order and Preliminary Objection notwithstanding the absence of testimony and/or supportive evidence. The majority opinion accurately demonstrates that a Preliminary Injunction may issue solely upon the averments contained in a complaint. I believe that the operative facts in the instant case which caused-no, compelled-the lower court to issue its Order and Preliminary Injunction, were of such significance that it was convinced beyond doubt that its actions were absolutely essential if Appellee was to be afforded even the remotest of possibilities of locating her children. I believe the Complaint in Equity verified by Appellee's attorney in accordance with Appellee's personal affidavit of authorization dated July 28, 1978, satisfies the requirements of Pa.R.C.P. 1024(c). I feel that if scrutinized closely the affidavit of authorization certainly satisfies the verification requirements of Pa.R.C.P. 1024(c).
I find that Appellant's third issue on appeal that the September 25, 1978 injunction was improperly issued, since no bond was filed, is without merit. Three days later, the lower court continued said injunction with bond. Whatever defect therefore existed in the first instance was cured on September 28 when bond was posted. I am not convinced by Appellant's argument that without a bond, the Preliminary Injunction issued September 25, 1978 was a nullity which could not have life breathed into it by the posting of a bond three days later.
Finally, appellant also contends that the attorney-client privilege is applicable. (The majority did not address itself to this issue). The Act of 1887, P.L. 158 § 5(d), 28 P.S. § 321. We conclude that it is not. The privilege does not apply to representations or communications secured in furtherance of intended, present, or continuing illegality, even if the attorney is completely unaware that his advice is being sought towards that end. In re Westinghouse Electric Corp. Uranium Contracts Litigation, 76 F.R.D. 47 (USDC W.D.Pa. 1977).
*86 Although our research reveals no Pennsylvania case which is factually similar to this case wherein the attorney-client privilege was raised, a New York court in, In Re Jacqueline F., 94 Misc.2d 96, 404 N.Y.S.2d 790, noted the general rule as follows:
"As a general rule, an attorney may be compelled to disclose the name and address of his client on the theory that his knowledge as to these matters did not flow from a confidential communication." 404 N.Y.S.2d at 794.
As to the applicability of the privilege, the court went on to state:
"An attorney may validly assert the privilege as to his client's name or address in the limited instance where the client intended such information to be confidential and further provided that protecting this cloak of secrecy will not aid in carrying out an unlawful purpose." 404 N.Y. S.2d at 795 (Emphasis added).
However, the court noted strong disapproval of a disappointed custody litigant's placing his desire to obtain custody above the law and held:
"However, an attorney's duty to his client is limited to rendering such legal assistance and advice as is the bounds of the law. It cannot extend to aiding and abetting the client to evade the impact of the court either by acts of commission or omission." 404 N.Y.S.2d at 795. (Emphasis added).
In the instant case, we conclude appellant's failure to disclose Alper's whereabouts is not within the ambit of his lawful representation of Alper and therefore same is not protected by the attorney-client privilege.
As the lower court opined:
We . . . believe it is now time, and that this is the proper case, in which all of the well prepared and capably argued objections interposed by (appellant) should be swept aside so that this court can address itself to the overriding human question of the best interests of the children, and in doing so make clear to all who will listen that the courts of this Commonwealth will not assist those who take the *87 law into their own hands in matters of child custody and that we will do all that is possible to bring matters such as these back into the proper court where the personal interest of the absconding parent will rightfully be relegated to a lesser position than that accorded the welfare and best interests of the children.
We believe that it is in keeping with the modern trend of law as evidenced by broad acceptance of the Uniform Child Custody Jurisdiction Act aimed directly at this kind of heinous behavior on the part of parents dissatisfied with the decisions reached by the courts of our land. (P. 33).
I agree.
I therefore respectfully dissent and would affirm the issuance of the Preliminary Injunction and remand to the lower court with instructions that it proceed forthwith with a trial on its merits.
NOTES
[1] The record supports appellant's assertion that at the October 6 hearing he agreed only to the continuance of the hearing; he did not agree to the court's "reissuance" of the preliminary injunction.
[2] We exercise jurisdiction over this appeal pursuant to 42 Pa.C.S.A. § 742 (1979 Pamphlet) and Pa.R.A.P. Nos. 311, 701. It may be noted that appellee does not argue that this appeal is premature and therefore should be quashed, see Roth v. Columbia Distributing Co., 371 Pa. 297, 89 A.2d 825 (1952); United Elec., Radio & Machine Workers of America v. Sherman, 352 Pa. 133, 41 A.2d 860 (1945), and we do not consider the issue.
[3] Our attention has been called to sections 2304(a)(1), (2), and (3) of the Uniform Child Custody Jurisdiction Act. These provisions are:
A court of this State which is competent to decide child custody matters has jurisdiction to make a child custody determination by initial or modification decree if:
(1) this State:
(i) is the home state of the child at the time of commencement of the proceeding; or
(ii) had been the child's home state within six months before commencement of the proceeding and the child is absent from this State because of his removal or retention by a person claiming his custody or for other reasons, and a parent or person acting as parent continues to live in this State;
(2) it is in the best interest of the child that a court of this State assume jurisdiction because:
(i) the child and his parents, or the child and at least one contestant, have a significant connection with this State; and
(ii) there is available in this State substantial evidence concerning the child's present or future care, protection, training, and personal relationships;
(3) the child is physically present in this State, and:
(i) the child has been abandoned; or
(ii) it is necessary in an emergency to protect the child because he has been subjected to or threatened with mistreatment or abuse or is otherwise neglected or dependent . . . .
These provisions are inapplicable to the present case. They only confer jurisdiction on the courts of this Commonwealth to make child custody determinations; here, the lower court was not asked to make such a determination. Rather, it was asked to compel appellant to disclose the whereabouts of appellee's ex-husband and children, so that the existing court orders of the Indiana courts could be enforced.
[4] In Warren, the defendant argued that the plaintiff's failure to deny allegations in preliminary objections constituted an admission that the defendant did not reside at the address where service was made. The Court rejected this argument on the ground that the preliminary objections were improperly verified.
[5] Indeed, one can only be puzzled by counsel's failure to secure appellee's verification of the complaint. Counsel was able to secure appellee's verification to the Affidavit of Authorization on July 28, 1978. Counsel's verification to the complaint is dated August 15, 1978. Furthermore, apparently there was no need to file the complaint immediately, for it was not filed until September 25, 1978.
[6] The exhibits included a copy of the Indiana decree divorcing appellee from her ex-husband and giving her custody of the children; a copy of an article that appeared in an Indiana newspaper regarding appellee and her ex-husband's illegal detention of the children; a copy of a letter purportedly written by appellee's ex-husband with appellant's address printed at the top; copies of two letters written by appellant, which stated that he was acting on the instructions of appellee's ex-husband; copies of criminal indictments returned by an Indiana grand jury against appellee's ex-husband for child-stealing; and a copy of an Indiana court order holding the ex-husband in contempt and revoking his visitation rights.
[7] It should be recalled that in the present case, no bond was filed when the lower court granted appellee's petition ex parte on September 25; the lower court did not order the filing of bond until September 28. Because of the conclusion reached infra, we need not reach appellant's argument that without a bond, the preliminary injunction was a nullity, which could not have life breathed into it by a tardy bond. But see 5 Goodrich-Amram 2d § 1531(b):6 at 284-85; see also Grosso v. Englert, 381 Pa. 351, 113 A.2d 250 (1955); Bowman v. Gum, Inc., 327 Pa. 403, 193 A. 271 (1937).
It is to be noted, however, that the court's order requiring appellee "to post bond in the amount of one hundred dollars ($100.00)" was deficient in that the order did not condition the continued effect of the preliminary injunction that had already issued upon the posting of the bond. Rose Uniforms, Inc. v. Lobel, 408 Pa. 421, 422, 184 A.2d 261 (1962). Also, at the hearing on October 6, the lower court, recognizing the possibility that its earlier orders were invalid, stated:
I am going to take this rule to show cause and request for temporary restraining order and the petition for temporary restraining order and special injunction as being filed now, and I am going to continue in full force and effect the bond that is already entered in this case.
R. at 58a.
However, in its order dated October 11, the court did not dissolve its orders of September 25 and 28 and then enter a new order granting a preliminary injunction upon plaintiff's prior posting of bond. Rather, the lower court's order states:
AND NOW, to wit, this 11 day of October, 1978, by agreement of the parties and their counsel, this matter is continued to Oct. 31, 1978, at 9:30 A.M. in Room 517 City Hall, Phila., and the Special Injunction issued on September 25, 1978 and reissued on October 6, 1978, will remain in full force and effect until hearing.
[8] Along with the copy of the purported criminal indictment against appellee's ex-husband, the complaint contains a copy of what appears to be a certification of the indictment by the clerk of an Indiana Circuit Court ("appears" since the certification, though containing the same caption and number as the caption and number on the indictment, does not specifically certify the indictment, but rather "an order of said Court, in the above titled cause").
[9] Because of the conclusion that the lower court abused its discretion in granting appellee's petition for a preliminary injunction, we do not reach appellant's argument that the attorney-client privilege bars the relief sought in appellee's complaint and that therefore the issuance of the preliminary injunction lacked an equitable basis. We have, however, considered appellant's argument that the preliminary injunction violated due process because appellee's ex-husband had not been joined as a party to this action, and have found it without merit.
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41 N.W.2d 847 (1950)
152 Neb. 571
PETERSON
v.
PETERSON.
No. 32748.
Supreme Court of Nebraska.
March 23, 1950.
*848 Hamer, Tye & Worlock, Kearney, for appellant.
Minor & Minor, Kearney, for appellee.
Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.
CHAPPELL, Justice.
Plaintiff was granted an absolute divorce from defendant upon the ground of extreme cruelty, and awarded $4,500 permanent alimony, payable $75 a month beginning October 1, 1949, and continuing until paid in full. Defendant's motion for new trial was overruled, and he appealed, assigning as error solely that the judgment for alimony was excessive under the evidence, and was an abuse of judicial discretion. We affirm the judgment of the trial court as modified.
An appeal lodged in this court from a decree rendered in a suit for divorce brings the case here for trial de novo upon the issues presented by such appeal as in other equity actions. Section 25-1925, R.R.S.1943; Westphalen v. Westphalen, 115 Neb. 217, 212 N.W. 429; Lippincott v. Lippincott, 141 Neb. 186, 3 N.W.2d 207, 140 A.L.R. 901.
This court has held that: "Permanent alimony is founded upon the right of the wife to such support from her husband as she would be reasonably entitled to expect, considering all of the circumstances. Its amount rests upon the sound discretion of the court." Swolec v. Swolec, 122 Neb. 837, 241 N.W. 771, 772. It has also been held that: "Whether a wife should be granted permanent alimony, where there is no accumulated property from the marriage, is not a question solely of the necessities of her situation, but equally one of fairness and justice, as between the parties, under all the circumstances." York v. York, 138 Neb. 224, 292 N.W. 385. See, also, Barton v. Barton, 126 Neb. 835, 254 N.W. 561, 566.
It has been generally held that in the division of property and allowance of alimony in a divorce action, the court, in the exercise of judicial discretion, should consider the estate of the parties, if any, at the time of the marriage and their contributions since; the duration of the marriage; the wife's loss of interest in the husband's property by virtue of the divorce; the social standing, comforts, and luxuries of life which the wife would probably have enjoyed; the conduct of the parties leading up to the divorce; to which party the divorce was granted; the age, condition of health, and earning ability of the parties; and all other relevant facts and circumstances; and make such award as appears to be fair and equitable. Marquardt v. Marquardt, 151 Neb. 583, 38 N.W.2d 403; Wade v. Wade, 149 Neb. 502, 31 N.W.2d 420; Green v. Green, 148 Neb. 19, 26 N.W.2d 299; Haussener v. Haussener, 147 Neb. 489, 23 N.W.2d 700; Munsell v. Munsell, 147 Neb. 590, 24 N.W.2d 566.
In the light of the foregoing principles, we have examined the record. Plaintiff, 20 years of age, a high school and business college graduate, lived in Kearney with her parents, while employed at the Kearney Air base in a secretarial capacity, with civil service rating of $2,799 a year. There she met defendant, a captain, A. U. S., only living child of his parents, 27 years of age, 6 feet 1 inch tall, a high school graduate with 3 years college training at William and Mary. After an arduous courtship from March 13 to December 3, 1948, they became engaged. They were to be married sometime in April. However, four times, at defendant's insistence, the marriage date was advanced, and they were married on February 5, 1949, at an invitation church wedding in Kearney. In the meantime, defendant had told plaintiff, or plaintiff and her parents, that he owned $7,000 or more in bonds, approximately enough so that he could pay cash for a home they contemplated buying for $8,250, but that he preferred getting a G. I. loan; that he had $30,000 life insurance, of which he intended to make plaintiff the beneficiary; and that he would inherit one-half million dollars from his parents. He also told plaintiff *849 after the marriage, while they were in California, that he had talked with his father about signing some of the bonds over to plaintiff.
At the trial, however, on June 25, 1949, defendant admitted that he told them he had $7,000 in bonds, which "was slightly exaggerated," since he did have approximately that much in bonds two years ago, purchased for him by his mother out of monthly allotments of $125 from his pay while overseas, but that he had spent it all, "especially in the last four months," and that he was then in debt and without any money. He also testified that he had only $10,000 of life insurance, and inferentially belittled his parents' wealth. He further testified that he owned an automobile which he was paying for by the month. Plaintiff testified that at the time of the marriage she knew that defendant had an allotment of $75 each month taken from his salary, which was sent back to San Diego and put in his savings account.
Both parties liked athletics, and during the courtship they swam, bowled, danced, and attended numerous social functions. Approximately six months prior to the marriage, however, defendant was informed that plaintiff was diabetic, which apparently did not affect her health or activity. Thereupon, defendant entered no objections but made a study of diabetes. He consulted with physicians relative to plaintiff's health and her ability to bear healthy children. Prior to the marriage he went to the base hospital at Kearney and talked with a physician. There, at defendant's request, insulin was requisitioned through the army base for plaintiff. Plaintiff, prior to the marriage, left her employment, withdrew her retirement pay, and spent approximately $600 in preparation for the wedding. Some of the debts for the wedding were not yet paid at the time of the trial.
After the marriage ceremony on February 5, 1949, they left for a planned three-weeks honeymoon in San Diego, California. The trip was a very happy one and they arrived at the home of the defendant's parents in San Diego on February 8, 1949. While there plaintiff visited with defendant's parents daily, but left the home with them only once and met only one of defendant's friends. However, defendant was considerate and affectionate as usual, and they were happy for a few days. Then he became a "changed person" and on February 15, 1949, told plaintiff that they should return to Kearney because "he wasn't happy about our marriage; he thought we should get a divorce;" that "we were not suited for each other." He also mentioned her health. In that regard, his own testimony was: "Part of my decision to cancel the marriage was because life in the military service is rather fast and rather active, and I didn't think that Betty would actually fit into that fast-moving life as well as some people might." Plaintiff's persistent pleas that he reconsider met with absolute refusal, and on February 16 they started back to Kearney. Contrary to plaintiff's wishes, defendant's mother accompanied them. As stated by defendant, "I brought my mother with me because Betty was very upset, and I was afraid that she might try to do something which would be very serious, and I wanted my mother there as a buffer." Upon their arrival, defendant's mother stayed in Kearney one night at a local hotel, and left for San Diego the next day without seeing plaintiff again.
During the course of the return trip, defendant refused to live with plaintiff, and she occupied a room with his mother. Upon their arrival in Kearney on February 19, 1949, he took plaintiff to the home of her parents, where he told them, "it was a bad deal," that he "had decided to call it off," that "that was the way it was going to be,that was all there was to it." There she was left by him, and although plaintiff continuously thereafter up until the time of the trial sought a continuance of the marriage relation, defendant refused.
Prior to the marriage plaintiff and defendant had rented and furnished an apartment in Kearney. After their return, he refused to permit her to live there. Without plaintiff's knowledge he sold the furniture in the apartment, except that personally belonging to plaintiff, and kept the money. However, he stayed in the apartment and used plaintiff's furniture until he *850 was presently transferred to a Texas air base. Before leaving for that assignment, he told plaintiff, "If you don't put in for a divorce, I will go down to Texas and set up a residency and get one myself." Therefore, on February 24, 1949, plaintiff filed this action.
During the trip to San Diego defendant gave plaintiff $15, and upon their return, before this action was started, he gave her $100 at one time and $105 at another with which to reinstate her civil service rating and retirement pay. Upon her return to Kearney plaintiff was without dispute grieving, nervous, sleepless, depressed, humiliated, and embarassed in the presence of friends and former fellow employees. Therefore, on March 22, 1949, she accepted employment at Offutt Air Force Base in Omaha, with the same rating. There, without sufficient funds of her own, and in debt, the disaster befalling her marriage impaired her health and efficiency.
Defendant testified at the time of the trial that he was then receiving as captain's base pay at least $253 a month, which was to be increased 5% by longevity in August 1949. He was also admittedly receiving at least $21 a month sustenance allowance for himself, and since the marriage has drawn an additional $111 a month for sustenance and quarters by reason of the marriage. In that regard, on February 25, 1949, by stipulation, defendant was ordered to pay plaintiff $100 suit money and $100 a month, beginning March 1, 1949, as temporary alimony while she was unemployed, to be reduced to $75 a month upon her employment. Since her employment began on March 22, 1949, defendant paid her only $75 for that month, and has paid $75 a month since. We call attention to the fact, however, that the difference between $111 received by him because he was still married, and $75 paid to plaintiff, was $36, representing a net monthly profit for him resulting from the marriage. The final decree, which awarded plaintiff $4,500, payable $75 a month, was not superseded and defendant still continues to receive such profit.
The record discloses that plaintiff did her full marital duty, and was entirely blameless. Only defendant's undisputed, inexplicable cruelty destroyed the marriage, depriving plaintiff of its compensations, undermining her health and efficiency, and leaving her an unhappy and disillusioned young woman.
We are convinced that defendant at the time of the trial still had approximately $7,000 or more in bonds. His simple explanation that he had spent it lacks any corroboration or credence. Fairness and justice demand that he pay plaintiff one-half of their value, or $3,500, as permanent alimony.
For the reasons heretofore stated, we conclude that the judgment of the trial court awarding plaintiff alimony should be and hereby is modified only to the extent that plaintiff have and recover from defendant the sum of $3,500, payable in the same manner as provided in the original decree. All costs are taxed to defendant.
Affirmed as modified.
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497 P.2d 231 (1972)
83 N.M. 720
Juan VALDEZ, Petitioner,
v.
STATE of New Mexico, Respondent.
No. 9432.
Supreme Court of New Mexico.
May 19, 1972.
*232 Joan M. Friedland, Santa Fe, for petitioner.
David L. Norvell, Atty. Gen., Jay F. Rosenthal, Asst. Atty. Gen., Santa Fe, for respondent.
OPINION
STEPHENSON, Justice.
Mr. Valdez (defendant) appealed from a judgment and sentence following conviction of assault with intent to commit a violent felony, § 40A-3-3, N.M.S.A., 1953, and false imprisonment, § 40A-4-3, N.M.S.A., 1953.
The Court of Appeals affirmed and we granted certiorari. While affirming the result reached by the Court of Appeals, we differ with its reasoning in respect to the motion for a change of venue. Although the record is by no means clear, it seems that the State did not file its motion for change of venue within the time prescribed by § 21-5-3(B), N.M.S.A., 1953.
We have held that defendants seeking a change of venue must make a timely filing. State v. Aull, 78 N.M. 607, 435 P.2d 437 (1967), cert. den., 391 U.S. 927, 88 S.Ct. 1829, 20 L.Ed.2d 668 (1968). See also State v. Tapia, 81 N.M. 365, 467 P.2d 31 (Ct.App.1970) and State v. Lindsey, 81 N.M. 173, 464 P.2d 903 (Ct.App.1969), cert. den., 398 U.S. 904, 90 S.Ct. 1692, 26 L.Ed.2d 62 (1970).
Defendant's counsel makes the point that a defendant ought not be held to a higher standard of compliance with these statutes than the State. We agree. What we have said in other cases concerning timely filing being mandatory by defendants applies with equal force to motions for change of venue filed by the State. Of course, delayed filing by both the defendant and the State may be allowed under the provisions of § 21-5-7, N.M.S.A., 1953.
The position adopted by the Court of Appeals is scarcely strengthened by Hanson v. State, 79 N.M. 11, 439 P.2d 228 (1968), which it cites. That case states in pertinent part:
"* * * [A] strong, although rebuttable, presumption exists after the verdict in support of constitutional regularity and that official duties in court *233 proceedings have been regularly performed; and a person seeking relief has the burden of overcoming this presumption. * * *"
No such presumption can obtain here. The State's motion was not timely filed.
However, we agree with the reasoning of the Court of Appeals that a trial court, in a proper case and in the exercise of its discretion, has the power to order a change of venue sua sponte. This power existed at common law, Crocker v. Justices of Superior Court, 208 Mass. 162, 94 N.E. 369 (1911) and the common law is the rule of practice and decision in New Mexico. Section 21-3-3, N.M.S.A., 1953. Although § 21-5-3, supra, and related statutes completely cover the ground as to how, when and by what procedures a party may seek a change of venue, we find nothing in these statutes which precludes sua sponte action by the trial court. The common law is only abrogated or repealed by a statute which is directly and irreconcilably opposed to the common law. Southern Union Gas Company v. City of Artesia, 81 N.M. 654, 472 P.2d 368 (1970).
With the record in the condition described by the Court of Appeals, we must presume that the motion was actually granted sua sponte by the trial court. Here, the quoted portion of Hanson v. State, supra has application.
We would add some cautionary comment. Trial courts should order changes of venue sua sponte only in exceptional cases. This was such a case, as is amply demonstrated by the trial court's findings of fact which are quoted by the Court of Appeals in its opinion and which were not attacked.
The judgment and sentence is affirmed.
It is so ordered.
COMPTON, C.J., and McMANUS and OMAN, JJ., concur.
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256 Wis. 440 (1950)
TESKE and others, Plaintiffs in error,
vs.
THE STATE, Defendant in error.
YOUNG, Plaintiff in error,
vs.
SAME, Defendant in error.
Supreme Court of Wisconsin.
February 6, 1950.
March 7, 1950.
*441 For the plaintiffs in error there was a brief by Martin, Clifford, Dilweg, Warne & Duffy of Green Bay, and oral argument by Lloyd O. Warne.
For the defendant in error there was a brief by the Attorney General, William A. Platz, assistant attorney general, and O. B. Strossenreuther, district attorney of Shawano county, and oral argument by Mr. Platz.
GEHL, J.
For about a month prior to July 1, 1949, the employees of the Badger Consolidated Co-operative of Shawano had been on strike. Defendant Young was secretarytreasurer and the other defendants were either members of or acting in the interests of the striking union. For a few days prior to July 1st there had been some dispute as to *442 the activities of the union's pickets particularly those which appeared to interfere with the operation of the railroad trains carrying goods in and out of the employer's plant upon tracks leading to the Sawyer street entrance to the plant. A meeting attended by Young and some of the city and county enforcement officers was held at which it was agreed that the pickets would maintain a distance of eight to ten feet apart, and that upon the approach of a train at the crossing on Sawyer street the officer in charge would ascertain from the crew of any approaching train if they desired to enter the employer's yard. They agreed also that if the train crew desired to enter the yard the pickets would stand aside and permit the train to enter.
On June 30th while the men were picketing at the crossing a train arrived there. The undersheriff directed the pickets to disperse. He was reminded by Young of the agreement and contacted the train's conductor who told him that the train would not go through unless there were eight feet of clearance from the center of the tracks. After some delay the train was pulled away.
In the forenoon of July 1st the sheriff met Young and told him that the union would not be permitted to picket at the railroad entrance and that if the pickets did so a barricade would be erected. Young protested that the erection of a barricade would not be legal nor in accordance with the agreement referred to, and stated that he had been advised that the loitering statute did not apply to a public street. The sheriff replied that a barricade would be erected and that the had been ordered to keep the pickets off the street.
In the afternoon of July 1st there was picketing at the Sawyer street railroad crossing and also at the Andrews street crossing, about a block away. The sheriff and another officer informed the pickets at the latter crossing that they had no right to picket there. They left and joined those at the Sawyer street crossing. There the pickets were walking *443 in single file across the railroad tracks. There is a dispute as to the number of men so engaged, the state contending that there were from fifty to seventy-five, and the defendants that there were no more than about fifteen or twenty. The state's witnesses testified that the pickets walked in a continuous circle, with a very short distance between the men, back and forth across the railroad tracks ahead of an approaching train so as to interfere with its movement. Some of defendants' witnesses testified that the purpose of the pickets was to obstruct the movement of a train, that the sheriff had instructed them to let the train go through but that he had not told them that the crew of the train approaching at the time of the fracas wanted to go through as he had previously agreed that he would.
As a train approached the sheriff ordered the pickets to disperse. They refused and the officers formed a "human chain" and pushed the pickets aside. They assembled again and continued picketing. When the train drew nearer the officers again attempted to disperse them and push them away from the tracks. The officers were not successful and threw tear-gas bombs into the crowd. This dispersed them momentarily, but they resumed the picketing. Again the officers pushed them away from the tracks. The officers formed a line by holding each other's hands for the purpose of pushing the pickets from the tracks. Their maneuver was resisted, the pickets pushing the officers onto the rails and going under and around the line and back onto the tracks. They were warned that further resistance would result in arrest. The pickets continued to push the officers. Arrests were made.
There was testimony by the state's witnesses that defendant Young told the pickets while they were walking on the railroad tracks to "keep moving. Keep that line going," that he directed the pickets to get on the tracks, and that he said further to the pickets, "Come on. Pressure. Get going, boys."
*444 The undersheriff testified for the state that two hours or better were consumed in the fracas of July 1st.
Not all of the facts recited above are undisputed, but from the verdict it must be assumed that the jury believed that they existed.
For the sake of brevity we will refer to the defendants other than Young as the "pickets."
The pickets contend that they had the legal right to picket the railroad crossing. That is conceded, but it would not relieve them of the duty to refrain from disorderly conduct. The statute, sec. 348.35, provides:
"Any person who shall engage in any violent, abusive, loud, boisterous, vulgar, lewd, wanton, obscene, or otherwise disorderly conduct tending to create or provoke a breach of the peace or to disturb or annoy others, whether in a public or a private place, shall be punished by a fine of not more than $100 or imprisonment not over 30 days. . . ."
The pickets urge that acts of a person are not prohibited by its provisions, that they reach only language of the character described. The words of the statute must be read in the disjunctive, that is, they make it an offense to use such language or to engage in disorderly conduct tending to the result described. The statute was enacted in 1947, undoubtedly to supply an omission in the existing law and to reach such acts as are here charged. If it had been intended to prohibit only offensive language there would have been no need for the use of the words, "otherwise disorderly conduct."
Disorderly conduct is defined in 17 Am. Jur., Disorderly Conduct, p. 99, sec. 1, as follows:
"While it is impossible to state with accuracy just what may be considered in law as amounting to disorderly conduct, the term is usually held to embrace all such acts and conduct as are of a nature to corrupt the public morals or to outrage the sense of public decency, whether committed by words or acts." (Italics supplied.)
*445 The jury was warranted in believing the testimony that the proximity of the pickets to the train impeded its movement, that they pushed the officers onto the rails, that they had been told to discontinue their resistance to the officers in their effort to maintain the peace, that one of them pushed an officer against the train, that some of them forced their way through the cordon formed by the officers to permit movement of the train, that one of them came through the cordon "swearing and cursing."
Such conduct, if it were not otherwise disorderly, is expressly prohibited by sec. 111.06 (2) (f), Stats., which declares that it is an unfair labor practice:
"To hinder or prevent, by mass picketing, threats, intimidation, force, or coercion of any kind the pursuit of any lawful work or employment, or to obstruct or interfere with entrance to or egress from any place of employment, or to obstruct or interfere with free and uninterrupted use of public roads, streets, highways, railways, airports, or other ways of travel or conveyance."
The constitutional right to freedom of speech, relied upon by appellants, does not include the right to engage in conduct such as the jury found was practiced in this case. Seen v. Tile Layers Protective Union, 301 U. S. 468, 57 Sup. Ct. 857, 81 L. Ed. 1229.
There was sufficient evidence, manifestly believed by the jury, to sustain the charge of disorderly conduct on the part of the pickets and their conviction.
Defendant Young was convicted of violation of sec. 346.39, Stats., which provides:
"Any person who shall knowingly resist any sheriff, deputy sheriff, constable, marshal, conservation warden, or other ministerial officer, while engaged in the lawful execution of any civil or criminal process issued by any court, body, board, or officer authorized to issue the same, or in lawfully doing any act as such officer, or who shall, in any way, knowingly and intentionally counsel, advise, or procure *446 any other person to resist any such officer so lawfully engaged in the execution of such process or in lawfully doing such other act as such officer, shall be punished by imprisonment in the county jail not more than one year or by fine not exceeding three hundred dollars."
He contends that since the pickets were acquitted of the charge of resisting an officer the verdict is perverse, that the jury having found that the pickets did not resist, Young may not be found guilty of the charge that he counseled, advised, or procured them to do so. Applying the contention to the general proposition, it would be easy to imagine a situation where one might advise or counsel another to resist an officer and the other person refuse to follow the advice or counsel. Could it be said in that case that merely because the person advised has refused, that the advisor has not violated? The answer is obvious. If, as defendant Young contends, the verdict were inconsistent in that the pickets were in the same trial acquitted of the charge of resisting an officer and he was convicted of advising such alleged resistance, the inconsistency would not be fatal. Sec. 353.05, Stats., provides:
"Every person concerned in the commission of an offense, whether he directly commits the offense or aids or abets in or hires, counsels, or otherwise procures its commission, may be indicted or informed against as principal and tried thereon either separately or with others concerned, and may be convicted of and sentenced for any degree of the offense charged or any offense included in the charge, whether the person directly committing the offense has been convicted or acquitted, or convicted of some other degree of the offense or of some other offense based upon the same occurrence, or has not been apprehended or is not amenable to justice or for any other reason has not been tried, or is a corporation not subject to prosecution for the offense. It shall not be deemed a variance if a person indicted or informed against for the commission of an offense shall be proved to have aided or abetted in or hired, counseled, or otherwise procured its commission by another, nor shall proof of the guilt *447 or innocence of the person directly committing the offense be required for the conviction of any other person concerned therein."
Logical consistency in verdicts in criminal cases has not been required by this court. Gundlach v. State, 184 Wis. 65, 198 N. W. 742; State v. Lloyd, 152 Wis. 24, 139 N. W. 514; State v. DeHart, 242 Wis. 562, 8 N. W. (2d) 360; nor by the United States supreme court, Dunn v. United States, 284 U. S. 390, 52 Sup. Ct. 189, 76 L. Ed. 356.
We have quoted, in substance, the statements made by Young directing the activities of the pickets. Except for the use of the expressions "more pressure," "come on, pressure," and if there had been no evidence of improper conduct on the part of the pickets, it might be successfully contended that he indicated no purpose by the language he used except to direct the activities of the men picketing, legal or illegal, and that he did not advise or counsel resistance to the officers.
The testimony with respect to the conduct of the pickets heretofore referred to would support a finding of resistance on their part, and, under those circumstances, permit the jury to construe Young's words as a direction or advice to resist.
True, the jury acquitted the pickets of the charge of resisting, but, as has been pointed out, the apparently inconsistent verdict is not fatalit is quite probable that the jury in a spirit of compromise concluded that a conviction of disorderly conduct would permit sufficient penalty for them.
Counsel for defendant Young cite and quote from State v. Welch, 37 Wis. 196, 200, as authority for their contention that the mere use of words without acts of resistance does not constitute violation of the statute. It must be observed that in that case the defendants were charged with resistancehere Young was convicted of counseling the act. To *448 counsel or advise it is not necessary to participate by any physical act in the resistance itself.
What has been said disposes of counsels' objection to the judge's charge to the effect that the jury might find Young guilty because of what he said to the pickets.
By the Court.Judgments affirmed.
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310 S.C. 529 (1992)
426 S.E.2d 313
BURRY & SON HOMEBUILDERS, INC., Appellant
v.
Denny FORD, Respondent.
23757
Supreme Court of South Carolina.
Submitted October 27, 1992.
Decided December 14, 1992.
William C. Cleveland of Haynsworth, Marion, McKay & Guerard, Charleston, for appellant.
Charles S. Goldberg and J. Kevin Holmes of Steinberg, *530 Spitz, Goldberg, Pearlman, Holmes, White & O'Neill, Charleston, for respondent.
Submitted Oct. 27, 1992.
Decided Dec. 14, 1992.
TOAL, Justice:
The issue presented in this appeal is whether the trial court erred in refusing to grant the plaintiff's motion for a voluntary dismissal and in granting the defendant's motion for summary judgment on the basis that the plaintiff, an unlicensed residential builder, could not maintain this suit for breach of contract. We affirm.
FACTS
Appellant, Burry & Sons Homebuilders ("Burry"), brought this action for breach of contract, asserting that Denny Ford ("Ford") contracted with Burry for residential improvements on his home after Hurricane Hugo. Ford answered by way of a general denial, and further asserted Burry was not entitled to enforce the contract since Jim Burry, the president and major shareholder of Burry, is an unlicensed residential builder. Ford also alleged Burry's defective workmanship required subsequent work entitling him to a set-off. On January 11, 1991, Ford filed a motion to amend his answer to assert a counterclaim for damages resulting from Burry's defective workmanship. Ford also moved for summary judgment on Burry's complaint. In support of his motion for summary judgment, Ford submitted an affidavit in which a special investigator for the South Carolina Residential Builders' Commission declared Jim Burry is not licensed. The affiant further declared one hourly employee of Burry is licensed, but this employee worked on the house only two days and did not use his license to do the work. On January 29, Burry filed a motion for a voluntary dismissal without prejudice.
A hearing was held on July 25, 1991, on all three motions. The parties orally argued the voluntary dismissal issue. The trial court denied Burry's motion for voluntary dismissal, granted Ford's motion to amend to assert a counterclaim, and granted Ford's motion for summary judgment. Burry appeals *531 the denial of the voluntary dismissal and the granting of the summary judgment.
LAW/ANALYSIS
Generally, the plaintiff is entitled to a voluntary nonsuit without prejudice as a matter of right unless legal prejudice is shown by the defendant or important issues of public policy are present. Bowen & Smoot v. Plumlee, 301 S.C. 262, 391 S.E. (2d) 558 (1990).[1] Once legal prejudice is found, the granting or denial is within the discretion of the trial court. Moore v. Berkeley County, 290 S.C. 43, 348 S.E.(2d) 174 (1986). Here, the prejudice alleged and relied upon by the trial court was the fact that Ford would have to bring his counterclaim in the county of Burry's residence. We agree that the loss of proper venue in one's county of residence suffices to establish legal prejudice. We find no abuse of discretion in this case. We, therefore, affirm the denial of Burry's motion for voluntary dismissal.
Dismissal of Burry's Action by Summary Judgment
First, Burry asserts this issue was not argued below, therefore, not before the trial judge. However, it is clear from the record before us that all three motions were addressed during the hearing. Burry merely failed to present any counter affidavits or arguments.
Second, Burry argues that the action should not have been dismissed by summary judgment. Section 40-59-130 provides in part:
Any residential builder or residential specialty contractor who undertakes or attempts to undertake the business of residential building or residential specialty contracting without first having procured a valid license... is guilty of a misdemeanor....
A residential builder who does not have a license or residential specialty contractor who is not certified or registered as required may not bring any action either at law or in equity to enforce the provisions of any contract *532 for residential building or residential specialty contracting which he entered into in violation of this chapter.[2]
Burry argues his use of licensed employees constituted substantial compliance with this provision.
The party responding to a summary judgment motion may not rest on the allegation in the pleadings, but rather he must set forth specific facts showing a genuine issue for trial. Rule 56(e) SCRCP. Since Burry submitted no counter affidavits, the facts before the Court indicate that one hourly employee worked on the house for two days, but did not use his license. The mandate of this statutory provision is clear and unambiguous. Duckworth v. Cameron, 270 S.C. 647, 244 S.E. (2d) 217 (1978) Even if this Court were to adopt the substantial compliance doctrine, these facts fail to raise even a colorable argument for substantial compliance. Cf., Spry v. Miller, 25 Wash. App. 741, 610 P. (2d) 931 (1980) (held unlicensed contractor substantially complied with similar statutory provision by hiring an independent licensed contractor who performed the work with no supervision or control by the unlicensed contractor). To allow recovery under these facts would fail to provide any protection to the homeowners and, therefore, undermine the purpose of the statute. Watson v. Harmon, 280 S.C. 214, 312 S.E. (2d) 8 (Ct. App. 1984). Thus, we AFFIRM the granting of summary judgment.
HARWELL, C.J., and CHANDLER, FINNEY and MOORE, J.J., concur.
NOTES
[1] Under Rule 41(a)(1) of the South Carolina Rules of Civil Procedure, the plaintiff may dismiss the action without leave of court before the defendant files an answer or motion for summary judgment.
[2] We note that if the action had been dismissed, Burry could not have sought licensure and then refiled this action, as this provision clearly indicates licensure status is determined as of the date of contracting. Duckworth v. Cameron, 270 S.C. 647, 244 S.E. (2d) 217 (1978).
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603 So.2d 309 (1992)
Larry L. WILKINS
v.
STATE of Mississippi.
No. 89-KA-0266.
Supreme Court of Mississippi.
June 3, 1992.
*310 Robert E. Clark, Vidalia, for appellant.
Michael C. Moore, Atty. Gen., Charles W. Maris, Jr., Sp. Asst. Atty. Gen., Jackson, for appellee.
Before HAWKINS, P.J., and SULLIVAN and McRAE, JJ.
HAWKINS, Presiding Justice, for the Court:
Larry L. Wilkins appeals his conviction of murder in the circuit court of the First Judicial District of Panola County and sentence to life imprisonment. Because of the *311 admission of inadmissible hearsay testimony through the guise of "impeaching" a State witness, we reverse and remand. We find no other error.
FACTS
Sue and the late Willie Nesbit "Woody" Garner lived in a double trailer in Longtown, a community in the northwest corner of Panola County.
Garner apparently was Sue's (whose maiden name was Wilkins) third husband. Her marital union to a man named Jimmy Ray Barnes, Sr., produced three children, namely: Jimmy, Jr., Lisa and David, who were grown. A subsequent marriage to a man named Clifton Leroy Dyer produced Glenn Dyer, who in November, 1987, was thirteen years old. She married Garner January 12, 1978. On Tuesday, November 3, 1987, an election day, she was employed at the F.O. James Gas Company in Crenshaw, and went to work at 2:00 p.m. and got off work at ten that night.
Sue Garner's son Glenn was staying at the home of his sister Lisa, who, along with her husband David and baby girl Shelly, was living with his parents, DeLayne and Anna Mayo, in the Sarah community in the extreme Southwest corner of Tate County. Sue was in the Mayo home a few minutes that evening, and then drove to her own residence about five miles distance, arriving with Glenn around eleven o'clock that night.
A glance at the map reveals that Batesville, the county seat of the First Judicial District of Panola County, is 22 miles South of Senatobia in Tate County, and that Senatobia in turn is five miles South of Coldwater. Como is 15 miles North of Batesville, and Longtown is about ten miles due West of Como. Senatobia is approximately twenty miles driving distance from Longtown.
Sue has two brothers, Barry and Larry L. Wilkins. On November 3, 1987, Barry and his wife Katie were living in the Senatobia Trailer Park, also called "City Trailer Park."
As noted, Sue's daughter, Lisa, was married to David Mayo, and on November 3 they were, with their few-months-old baby girl, Shelly, living at the home of his parents.
David Barnes was married to Susan Leigh Barnes, also twenty years of age. They had a few-months-old baby boy, Dustin, and on November 3 she and David were separated. She was living in the same trailer park as Barry Wilkins, but because she had no heat, her mother was keeping the baby.
David Mayo owned a 1979 400 model Honda motorcycle that on November 3 had been loaned to David Barnes. On November 3 Barnes and his uncle, Larry L. Wilkins, were staying in the Sandman Motel in Senatobia.
On October 29 previous, Sue, accompanied by her son, David Barnes, drove to Memphis where her brother Larry Wilkins was staying, and the three returned to the Howard Johnson Motel in Senatobia, where she rented a room for Larry and David. On the next day they checked out and Larry and David moved in for a day or two with her brother Barry. The two then checked into the Sandman Motel November 1.
On the night of November 3, Susan Barnes was driven to the Sandman Motel by a friend, Ronald Kolb, arriving there precisely at 11:00 p.m., as told to do by her brother, David. When she got there Barry and David were in the room, David drinking Old Charter whiskey, and Barry drinking Busch brand beer. Larry was not there, and the motorcycle that David had borrowed was gone.
Barry remained a few minutes and left. Susan remained another hour or hour and a half, as she estimated she had no watch arguing over their baby, Dustin. Susan then left the motel and walked to the trailer park about a mile away, arriving again according to her estimation around 1:00 a.m.
About two hours later David rode to her trailer on his motorcycle and they talked about fifteen minutes. David then rode off.
*312 Susan wanted to talk to David some more, so she walked back to the Sandman Motel and knocked on the door. When David opened the door she noticed the motorcycle parked in the room and Larry coming out of the shower, clad in shorts. She noted a knee bruise and some scratches on his leg, which he told her he received in a wreck while riding the motorcycle.
David called a truck stop for hamburgers and french fries, and drove the motorcycle to get the food. When he returned, the three ate. According to Susan, Larry was not really sleepy and wanted to talk. The three eventually went to sleep.
Susan was awakened by the telephone ringing, which David answered. It was Lisa calling, who told David that Garner had been shot. She said David was telling Lisa, "No, I don't believe it, I'll be there in a minute, tell mama it's all right," and "things like that."
At trial Susan testified that when Larry heard this news, "He fell out of bed laughing." Larry made no statements, however.
David put his clothes on, told them he would be back before 10:00 a.m., and left on the motorcycle. David had a ten o'clock appointment to try to get aid for Susan and Dustin to help with their bills. After he left, Larry and Susan "got everything together and packed it and got it ready to move."
David returned some time later in Garner's truck, and the three put the belongings in the truck, got gas and drove to Batesville where Larry checked into the Comfort Inn. They took boxes, two or three bags, and a garment bag into the room. They then drove and got some food, and returned to the motel and ate.
Susan and David then left in the truck, Susan driving as told to by David, to some dumpsters on Interstate Highway 55 at the Coldwater exit. David told her to pull up beside the third dumpster. David then got out of the truck and got a sack that Larry had given him out of the back of the truck. It was a grocery sack, and appeared to Susan to be about half full. David placed the sack inside the dumpster, poured motorcycle oil on top of it and set it on fire. They left immediately. They met a state trooper, turned the truck around, and then David drove. He drove down a gravel road between Highways 55 and 51 back to Senatobia.
Susan asked David what was in the sack, and he replied it contained clothes "that had blood and brains on them."
Susan testified that it did not take too much to figure out what had happened. She asked David why they had done it, and had Larry "done it?" She said David nodded his head "yes." He then told her to be quiet and quit asking questions or he would have to hurt her.
They returned to Susan's trailer in Senatobia where some of her furniture was loaded and it was taken to Susan's mother's residence.
Moving back in time to the Garner's residence, on Tuesday night, November 3, Sue told highway patrol investigator C.B. (Creekmore) Wright that she got home about 10:30. Her husband was sitting at the kitchen table drinking, and he told her she had been walking in the yard. She told him he was crazy, and they went to bed about 11:30.
At trial Sue testified she arrived home around 11:00 p.m. She corrected her statement to Wright by saying that Garner told her that he heard her walking in the yard and she told him he was crazy. Garner went to bed and she did, too, around 11:15. They lived in a double trailer with three bedrooms, all on the front side of the house. Glenn's bedroom was next to hers. Garner woke her up getting out of bed, saying he had heard a racket and was going to investigate. She rolled over, and as she did, she "heard a pop," which made her "jump up." She heard Garner call her for help:
[A]nd I jumped to go help, but before I could leave the bedroom, I heard another pop, and I says, no, maternal instincts took over, and I stopped at my son's bedroom, and I took a quilt and throwed it over him and throwed him over in the floor, and I rolled up in it with him, and *313 we stayed there just as still as we could stay until it got quiet enough.
(Vol. IV, p. 283)
The telephone was in the kitchen. Sue had no idea how long she and Glenn remained rolled in the quilt. About 25-30 minutes later, she telephoned her uncle, Joel Hufstickler, and then her son-in-law, David Mayo. According to her, she told Mayo there had been some shooting outside, but she did not know what happened. She also told him to bring some help, not to come alone, and she thought "Woody" had been shot. She heard no motorcycle.
Glenn, called as a defense witness, testified he heard a shot, and then Garner call out, "Sue, come help me." Sue then came into his room and threw him under the covers on the floor. He heard more shots, "and then a great big shot." Then everything got quiet and "we got brave enough to crawl back to the phone and call Uncle Joel and David Mayo." He said the telephone was "in mama's bedroom." He heard no motor vehicle.
D.M. Haynes lived about a quarter of a mile south of Garner. On the night Garner was killed, he heard a shot, went to the door and as he did, he looked at his clock. It was 1:25 a.m.
Tom and Sheila Pollen lived across the road from Haynes. Something woke them, and they heard two shots. It was 1:25 a.m. They also heard a motorcycle coming from Garner's, heard it turn around in their drive, head back towards Garner's residence, and then come back and for the second time turn around in their drive. It then headed north towards Garner's and "kept going." It was "pretty loud." Pollen, who had some experience with motorcycles, testified that a "colored boy" in the neighborhood owned a motorcycle, but it was not that loud.
David Mayo received Sue's telephone call at 2:00 a.m. He put his clothes on and drove to Garner's. He found the body of Garner lying beside his eighteen-wheeler truck, face down almost under the front wheel. Mayo noticed the head "just about gone."
He turned to the house, went to the open front door and yelled for Sue. When she answered, he went inside and turned on the lights. He found her in Garner's bedroom "down beside the bed." He called the police department at Crenshaw and got night watchman Lewellyn, who told him that he could not come. Mayo then telephoned Leo Parrish, town marshal of Crenshaw. After reporting to Parrish, Mayo went inside and drove his car with its headlights on so he could better see the body. He went inside, got a sheet and covered the body. In a matter of minutes, Parrish arrived, and shortly thereafter J.C. Sexton, deputy sheriff of Panola County.
Ralph Sanders, a long time friend of Garner's, drove to Garner's home around 11:00 a.m., November 4. After visiting about thirty to forty-five minutes, he left. About two and a half or three miles from the home, he noticed a blue bag out in the road. He stopped and inspected it and noticed inside a white towel, a partially filled bottle of Old Charter whiskey, and a pack of menthol cigarettes. There was also a red flashlight in the bag. The towel had a strong odor of women's perfume.
Then, further along on a bridge, he noticed a pull-over t-shirt, size 18. It was dusty. That afternoon he delivered the bag and its contents and the shirt to Parrish.[1]
Sanders was not through. The next day, Thursday, November 5, he, along with Jimmy Gregory, Charles Wilkerson and Cecil Hall, three other friends of Garner's, went investigating. About a half mile beyond the location of the bag, as they crossed a bridge, Wilkerson noticed a shotgun down in the creek. One of them left and law enforcement officers were summoned. Some time later law enforcement officers *314 came to the creek and recovered the shotgun and also a pistol. Because of the markings on the shotgun, it was easily identified as the 12-gauge pump shotgun belonging to Garner. By later measurement by Wright, it was determined that the bag was 3.9 miles from Garner's and the creek where the weapons were found was 4.6 miles distance.
On the morning of November 4, Sue gave David, her son, some money in order for Wilkins to buy some clothes. There is nothing in the record indicating that Wilkins ever came to the Garner home that day.
Wright's investigation revealed that Larry Wilkins had first stayed in the Howard Johnson Motel in Senatobia, then spent a night with his brother Barry in the trailer park, and on October 31 through November 4, he was checked into Room 35 at the Sandman Motel.
David Barnes was questioned and arrested on November 5. On Friday, November 6, at approximately 3:00 p.m., Wright went to Room 106 at the Comfort Inn and arrested Wilkins. In the room he found a baseball cap with blood stains on it, a fifth of seven-year-old Old Charter whiskey, a half pint of gin, and three packs of Richland brand menthol cigarettes.
Barnes was placed in the Panola County jail and over a period of several days, one Sidney Layne McKenzie, who had been arrested on some sexual deviancy charge, was in an adjoining cell to Barnes.
On February 28, 1988, the grand jury of the First Judicial District of Panola County indicted Wilkins for the murder of Garner. David Barnes was also indicted as an accessory after the fact to Garner's murder. In late September, 1988 (the record does not give the exact date), Barnes was tried and convicted. Wilkins' trial began October 3, 1988.
At trial through the testimony of Linda Walker, cashier at the Sandman Motel restaurant, Whit Allen and Lynn Still, it was developed that late in the afternoon of November 3, Wilkins bought ten cokes and told her that he was going to have a party that night with some friends, and asked her if she had a car. He wanted to get something to drink. He later invited her from his room to have a drink with him, which she declined. She called Whit Allen, who drove Wilkins to Still's liquor store in Como after the polls closed. At the liquor store he purchased two fifths of Old Charter whiskey and a half pint of gin. He gave the gin and four dollars to Allen. Wilkins then went to the beer store and purchased a case of Budweiser bottled beer. Allen drove Wilkins back to the Sandman Motel, and saw a motorcycle at Wilkins' room.
Stephen T. Hayne, M.D., the pathologist who examined Garner's corpse, testified Garner had been shot six times with a small caliber weapon and once with a shotgun. Five of these wounds were lethal. He had recovered four .22 caliber bullets from the body. He said that some of the wounds received were with the muzzle and skin in contact, some two to two and one-half inches away, and some a greater distance. He could not give the distance of the shotgun wound because of massive destruction to the head. Garner was shot once in the temple, another just below it another to the chin, another to the left side of the back of his head, another in the neck, another on the back of the left shoulder, and another in the left rib cage.
At trial the pistol recovered from the creek was identified as being a wooden-handled H & R .22 caliber seven and one-half inch barrel pistol, "just like" the pistol owned by DeLayne Mayo, Jr., brother to David. His mother, Mrs. Anna Mayo, had noticed the pistol on the seat of her husband's pickup in late September, 1987, and took it into the house, where she put it in the top dresser drawer in her bedroom.
It was also developed at trial that Glenn Dyer was later in this room and David Barnes was in the Mayo house as well, and had an opportunity to take the pistol. No one ever testified, however, that either in fact did take the pistol.
John M. Allen, ballistics expert with the Mississippi Crime Laboratory, testified that the bullets recovered from Garner's body bore the same characteristics as bullets *315 fired from the recovered .22 pistol, although it could not be positively established that they in fact could only have been fired from it.
David Barnes was called to the stand as a witness for the State, and when asked by the district attorney if he and Sue had gone to Memphis to pick up Wilkins on or about October 29, 1987, he took the Fifth Amendment. The circuit judge ordered him to answer the question.
Robert H. Broome, who had represented Barnes in his trial, but was not the attorney for Wilkins, asked to be heard. The circuit judge then conducted a hearing in chambers.
Broome informed the court that Barnes had just been convicted but not sentenced, and the appeal process had not been completed, and objected to the court's ordering him to testify.
The State responded by granting Barnes complete immunity from any charge as a principal to the murder, and also stated that any testimony he gave could not be used against him on retrial of his case if it were reversed on appeal. The district attorney also informed the court that during Barnes's trial on the Friday of the previous week, Barnes had taken the stand as a witness in his own defense where he testified at length under direct examination of Broome, and then was cross-examined by the district attorney.
The circuit judge directed Barnes to answer the questions, but stated he would determine, based on the questions asked, if Barnes had a right to invoke the Fifth Amendment. Broome objected to requiring Barnes to answer the State's questions. Counsel for Wilkins also objected to the State's questioning of Barnes.
As a witness for the State, Barnes testified that he and his mother had gone to Memphis on October 28 or 29, picked up Wilkins, returned to Senatobia and checked into the Howard Johnson Motel. He and Wilkins stayed there one night, and then went to his Uncle Barry's and spent another night. Then he and Wilkins went to the Sandman Motel. He testified that Wilkins got Allen to drive him to the liquor store in Como and purchased two fifths of Old Charter whiskey and some Budweiser beer. He had borrowed Mayo's motorcycle on Friday night, October 30, and had it on November 3. He did not know whether Wilkins smoked Richland menthol cigarettes or not. On the night of November 3, he and Wilkins had sat around watching television, and he, Barnes, had drunk some whiskey. Wilkins left some time after dark on the motorcycle. He did not know what time because they had no clock. When Wilkins returned, he took a shower, and while he was in the shower Susan Barnes came to the room.
The district attorney asked Barnes if Wilkins had told him when he left that he was going to do something illegal and would not tell him what it was, and Barnes denied having been told that. He was shown the blue bag found by Sanders on the road, and said he did not believe he had ever seen it. He testified that after Wilkins had taken a shower he rode the motorcycle to get some food.
Barnes further testified that the next morning when he received the telephone call that Garner had been killed, he reported this to Wilkins and Susan, and then drove the motorcycle to Garner's. He denied ever asking Wilkins if he had killed Garner.
After Barnes returned from Garner's home, he admitted that he and Susan drove to the Coldwater exit where he put "garbage" in the dumpster, but he said he never saw any bloody clothes, and he denied telling Susan that Wilkins had killed anybody. He testified that he and Susan took Wilkins to the Comfort Inn in Batesville.
The State then questioned Barnes about statements he had made to McKenzie and Highway Patrol Investigator Wright.
He first testified that he and McKenzie were in adjoining cells. He was then asked if he had any conversations with McKenzie and replied: "Not much, because one of the trusties told me he was in there for being gay, so I didn't talk to him much at all." He denied telling McKenzie that Wilkins *316 had killed Garner, and denied ever discussing the slaying with him. He denied telling McKenzie that he had destroyed some bloody clothes. He denied that Wilkins asked him to destroy clothes. He denied telling Wright that he had taken bloody clothes to the dumpster. He denied telling Wright that Wilkins had told him that he had killed Garner.
Following Barnes's testimony, the State called as the next three witnesses McKenzie, Susan and Wright. The defense objected to McKenzie testifying as to what Barnes had told him, and the State argued that under Rules 613 and 801(d)(1) Mississippi Rules of Evidence (MRE), they were entitled to bring out prior inconsistent statements as part of their case.
The court ruled:
So, as I read the Williamson case [Williamson v. State, 512 So.2d 868 (Miss. 1987)] and as I read the Rules of Evidence, clearly this is now a classic case of an effort to impeach testimony. I think it's permissible, and I'll permit it. Based on the record and based on what the testimony of Barnes is, I feel like the procedure is proper, so the objection has been made, and it will be overruled.
(Vol. IV, 388-89)
McKenzie testified that he and Barnes had been in jail together around ten days. He testified that Barnes told him that he had nothing to do with killing Garner, but that Wilkins had killed Garner. He said Barnes told him that he took some bloody clothes that Wilkins had worn, put them in a box and took them to a Dempsey Dumpster where he put oil on them and set them on fire. He testified Barnes said that his wife Susan was with him. He testified that Barnes told him Wilkins had gone to the house on the motorcycle:
A. And got to the house and called Woody out. Woody come out; he started shooting him, and Woody caught up with him and got him down on the ground and was choking him out, and then he believed that his mother come out with a shotgun because it was broken and she had put it up and didn't want the kids to play with it and shot him because Woody had Larry down on the ground choking him.
He said Barnes related that Wilkins had told him he emptied the.22 caliber pistol at Wilkins.
Susan testified to the facts as above related.
Wright testified that Barnes related that Wilkins had told him that he had killed Garner, and that Wilkins had asked him to take his clothes that had blood and brains on them and get rid of them for him. He then drove the truck to the dumpster, at the Coldwater exchange, got out and put the sacks in the dumpster and poured oil on them and set them afire. He said that the blue bag found by Sanders was identified by Barnes as being the bag Wilkins had when he left, and in it was a fifth of Old Charter whiskey and some other things.
Sue Garner's testimony indicated that she had a $25,000 life insurance policy on the life of Garner.
The defense offered David Chambers and Barry Wilkins as alibi witnesses.
Wilkins did not testify.
The court instructed the jury through Instruction C-12 that Wright's testimony regarding Barnes's statement could only be used for impeachment purpose and not as substantive evidence.
In both the opening and rebuttal arguments of the prosecution (Vol. VI, 653; 680), the testimony of Barnes was weighed against that of Wright and McKenzie, and the jury told that either Barnes was lying or the others were. The jury was asked to determine which was lying, Barnes, who had every reason to, or Wright or McKenzie, who had no reason whatever to do so.
The jury found Wilkins guilty and he was sentenced to life imprisonment. He has appealed.
LAW
CALLING BARNES AS A WITNESS FOR PURPOSE OF IMPEACHMENT
As noted, during the course of the trial, Barnes was called as a witness for the *317 State, and over defense objection, testimony as to pretrial statements and conduct elicited from him as a predicate to having it contradicted in succeeding order by Susan Barnes, McKenzie and Wright. Wilkins complains this was error.
The State had a right to call Barnes as a witness, and to ask him any questions it chose relevant to this murder. This does not necessarily mean, however, that the State had the right to ask him about any contradictory pretrial statement he made and upon his denial to offer these pretrial statements in evidence, all as part of its case in chief.
Although Wilkins made no complaint on appeal as to Susan Barnes's testimony of statements Barnes made to her, because some question might be raised on retrial, we hold such testimony was not hearsay and was competent evidence under MRE 801(d)(2)(E): "[A] statement by a co-conspirator of a party during the course and in furtherance of the conspiracy."
In driving to the Coldwater exit and dumping and burning the sack in the dumpster, Barnes was acting in furtherance of a conspiracy with Wilkins to destroy evidence of Wilkins' guilt of murder. Any statements he made to Susan during this time were competent evidence as part of the State's case in chief. Ponthieux v. State, 532 So.2d 1239, 1243 (Miss. 1988); Williamson v. State, 512 So.2d 868, 879 (Miss. 1987); Mitchell v. State, 495 So.2d 5, 11 (Miss. 1986). MRE 801(d)(2)(E) places the statements to Susan in a different category than those of McKenzie and Wright.
Neither does Wilkins complain on appeal of the extensive testimony of McKenzie as to statements made to him by Barnes when they were both in the Panola County jail. We therefore do not address the competency of this evidence. Miss.S.Ct.R. 28(a)(1)(3); Read v. State, 430 So.2d 832, 838 (Miss. 1983); Prueitt v. State, 261 So.2d 119, 125 (Miss. 1972).
Wilkins does complain of the State's calling Barnes as a witness, asking him whether Wilkins had told him he had killed Garner, and if he had taken bloody clothes to the dumpster, and upon his denial that this had occurred, asking him if he had not made contrary statements to Wright, and upon his denial that he had made such statements, calling Wright as a witness and permitting him to testify that Barnes indeed had told him Wilkins admitted killing Garner, and that he (Barnes) had taken bloody clothes to the waste disposal dumpster at Coldwater.
Was this testimony by Wright competent evidence? We hold that it was not. In order to explain our conclusion, it is necessary to examine the historical basis for our holding and the confusion which has resulted from the United States Congress's adoption of the Federal Rules of Evidence, subsequently adopted by this Court as the Mississippi Rules of Evidence, and in particular, Rule 607.
A. THE FACT FINDING PROCESS
The factfinder, whether it be jury or judge, or both of them, has two objectives in evaluating the testimony of any witness:
1. How much does the witness really know of the events he relates as facts; and
2. Is he accurate and truthful in his relation of the events?
Factfinders want evidence that is reliable, trustworthy.
The purpose of a trial is to furnish the factfinder the best opportunity, the best basis possible to reach these objectives.
These objectives and this purpose of a trial never change, but are always the same.
The lawyer's role in this enterprise varies, however. With the run-of-the-mill witness, questioning by the attorney who calls him seeks to demonstrate that the witness does indeed have first-hand knowledge of what he relates and that he is truthful and accurate.
The role of the adversary is to show, if possible, that one or both these objectives has not been satisfied.
Yet it often happens that while some of the facts the witness observed are *318 favorable, others are not. The lawyer therefore knows that by placing this witness in the witness chair, the factfinder is going to hear testimony that does not help his client's case. Quite naturally, the lawyer attempts to minimize the unfavorable, frequently by attempts to nudge his witness away from the unfavorable testimony. Courts have not permitted a party to call a disinterested witness, and after eliciting favorable testimony from him, attempt to cross-examine him as to the testimony that is unfavorable. Moffett v. State, 456 So.2d 714, 718 (Miss. 1984); Gardner v. State, 368 So.2d 245, 249 (Miss. 1979); Manning v. State, 188 Miss. 393, 195 So. 319 (1940). Courts have called this the "voucher rule." Moffett, 456 So.2d at 718. It is something in the nature of an estoppel to place a totally disinterested witness on the stand and ask the factfinder to believe that which is favorable to your case, yet reject that which is unfavorable.
A different rule prevails where a party, in order to prove his case, must call the adverse party or a clearly hostile witness to the stand. In such instance, courts allow leading questions to be addressed to such witnesses. Miss. Code Ann. § 13-1-53, repealed Ch. 573, § 141 Laws 1991; MRE Rule 611(c).
Finally, there is the witness who unexpectedly on the witness stand becomes hostile to the party calling him, or who relates a story completely different from his pretrial statements. In such instances the lawyer, caught by surprise, is permitted to ask leading questions. Moffett, 456 So.2d at 718.
Courts have had to struggle not only with the manner in which a witness may be questioned by the party calling him, but also the weight which the factfinder is authorized to give to a pretrial contradictory statement at odds with the witness's trial testimony. May the pretrial out-of-court statement be considered as substantive evidence of the fact it relates? And, if it cannot be considered as substantive evidence, how can a court be sure the jury did not in fact so consider it?
If Wilkins told Barnes that he killed Garner, this was an admission and would have been competent evidence for Barnes as a witness to relate. It was admissible as an exception to the hearsay rule, or indeed as we have held in Yawn v. State, 220 Miss. 767, 71 So.2d 779, 780 (1954), was not hearsay but direct evidence. "However, it has never been the rule that voluntary admissions of a defendant himself made either in or out of court are hearsay. They are admissions against interest." Yawn, 220 Miss. at 771, 71 So.2d at 780. And obviously, if Barnes had testified that he did transport a bag of bloody clothes to a dumpster and set it afire, this was not hearsay but direct evidence of facts of which Barnes had personal knowledge.
Wright's testimony as to what Barnes told him was hearsay, however. It was not admissible under our pre-rules decisions in the absence of showing that the State had been "surprised" by Barnes's testimony at trial. Then, and only then would the State have been permitted to offer such statements to Wright solely to impeach Barnes's credibility as a witness, and not as substantive evidence of the facts related in pretrial statements. Moffett, 456 So.2d at 718-19; Allison v. State, 447 So.2d 649, 650 (Miss. 1984); Shelton v. State, 445 So.2d 844, 847 (Miss. 1984); Davis v. State, 431 So.2d 468, 473 (Miss. 1983); Gardner v. State, 368 So.2d 245, 249 (Miss. 1979); Denton v. State, 348 So.2d 1031, 1034 (Miss. 1977); Murphy v. State, 336 So.2d 213, 216-217 (Miss. 1976); Magee v. Magee, 320 So.2d 779, 783 (Miss. 1975); Sims v. State, 313 So.2d 388, 391 (Miss. 1975); Hammons v. State, 291 So.2d 177, 179 (Miss. 1974); Hooks v. State, 197 So.2d 238, 240 (Miss. 1967) (reversible error to admit such testimony in absence of showing surprise); Hall v. State, 250 Miss. 253, 165 So.2d 345, 350 (1964); Manning v. State, 188 Miss. 393, 398, 195 So. 319, 320 (1940); Bove v. State, 185 Miss. 547, 554, 188 So. 557, 558 (1939); State of Mississippi v. Durham, 444 F.2d 152, 156 (5th Cir.1971); Ellis & Williams, Mississippi Evidence § 4-8 (1983).
*319 Courts generally made a further restriction upon the introduction of inconsistent pretrial statements, namely: the inconsistent statement had to be about a material, not a collateral matter. Because Barnes would have been competent to testify to these facts as a willing witness, this was a material, not a collateral matter. White v. State, 532 So.2d 1207, 1217 (Miss. 1988); Price v. Simpson, 205 So.2d 642, 643 (Miss. 1968); Jones v. State, 180 Miss. 210, 177 So. 35, 37 (1937); Witt v. State, 159 Miss. 478, 132 So. 338 (1931); Williams v. State, 73 Miss. 820, 19 So. 826 (1896).
The reasoning behind the courts' reluctance to permit a party to introduce prior inconsistent statements made by his own witness was the fear that an accused might be convicted upon unsworn pretrial statements. United States v. Morlang, 531 F.2d 183 (4th Cir.1975). Judges have endeavored to minimize this danger by instructing a jury that the unsworn pretrial statements could not be considered as "substantive" evidence, but only to impeach the credibility of a witness who by his testimony has ambushed the party calling him.
It has also been of chronic concern to courts whether a jury would or could "divest their minds of the statement" proved to have been made by the witness, and not treat it as substantive evidence. As stated in Williams, 73 Miss. at 826, 19 So. at 327:
If the jury believed that he made such statement, would it be natural for them to obey the instruction of the court, and restrict their consideration of it to the impeachment of the witness? They might endeavor to do so, and believe they were doing so, and still be involuntarily and unconsciously influenced thereby.
See also, Moffett, 456 So.2d at 720.
Indeed, permitting a jury to hear such testimony and then instructing it not to consider it except for "impeachment" has been called by one scholar "a pious fraud." Morgan, Hearsay Dangers and the Application of the Hearsay Concept, 62 Harv. L.Rev. 177, 193 (1948).
Clearly there was no element of surprise in this case. The State did not claim surprise; Barnes had testified in his own defense in his own trial a week previously, and was cross-examined. While his testimony in his own trial is not in this record, it is inconceivable that he did not then make the same denials as to the statements to Wright and McKenzie that he made in Wilkins' trial. Had he testified in his own trial that he had made such statements to Wright and McKenzie and they were correct, he would have been admitting guilt on the witness stand to being an accessory after the fact, for which he had been indicted. Also, while the State cross-examined Barnes at length about the statements he purportedly had made to Wright and McKenzie, there was a conspicuous absence of any cross-examination as to inconsistent testimony from his own trial.
There being no surprise to the State in Barnes's testimony, under all our pre-rules decisions it was not competent to allow Wright's testimony as to the pretrial statements.
Having said all this, it should also be noted that we observed in Moffett that "the rule is not in favor," 456 So.2d at 718, thus signaling that changes might be made. There have been critics of the rule.[2] As observed by Judge Learned Hand in DiCarlo *320 v. United States, 6 F.2d 364, 368 (2nd Cir.1925):
If, from all that the jury see of the witness, they conclude that what he says now is not the truth, but what he said before, they are none the less deciding from what they see and hear of that person and in court.
In "Employing Inconsistent Statements for Impeachment and as Substantive Evidence: A Critical Review and Proposed Amendments of Federal Rules of Evidence 801(d)(1)(A), 613 and 607," Professor Graham in his seminal article in 75 Michigan Law Review 1565, 1573 (1977) states:
In summary, the opponents of the Orthodox Rule argue that, so long as the witness is in court and subject to cross-examination, the hearsay problems are eliminated and prior inconsistent statements of the witness should be substantively admissible. They contend further that substantive admissibility is desirable because the proximity of prior statements to the event in question makes them more trustworthy than in-court testimony and because substantive admissibility protects parties from turncoat witnesses. Finally, they urge that the Orthodox Rule does not accomplish its primary purpose because juries are unable or unwilling to distinguish between statements admitted substantively and those admitted solely as evidence of the witness' credibility.
B. CONFUSION CREATED BY FEDERAL RULES OF EVIDENCE
The critics of the orthodox rule initially prevailed because the rules of evidence recommended by the federal advisory committee and submitted by the United States Supreme Court to Congress for approval would have permitted a party to freely impeach his own witness and use it as substantive evidence.
Rules 607 and 801(d)(1)(A) as proposed read:
Rule 607. Who May Impeach
The credibility of a witness may be attacked by any party, including the party calling him.
Rule 801. Definitions
The following definitions apply under this article.
(d) Statements which are not hearsay. A statement is not hearsay if:
(1) Prior statement by witness. The declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement, and the statement is (A) inconsistent with his testimony.[3]
After deliberation in both houses of Congress, Rule 607 as proposed was approved. Rule 801(d)(1)(A), however, was amended to read:
(d) Statements which are not hearsay
A statement is not hearsay if
(1) Prior statement by witness
The declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement, and the statement is (A) inconsistent with his testimony, was given under oath subject to the penalty of perjury at a trial, hearing, or other proceeding, or in a deposition. (Emphasis added)
The concern of Congress, especially the House committee, was that a prior inconsistent statement would be abused in its use against a criminal defendant, and whether or not the "prior statement was indeed made and that subtle influence, coercion, or deception has not impaired its reliability." Graham, 75 Mich.L.Rev. at 1582. Wright & Graham, § 6093 at 497. Therefore, to remove the hearsay objection from a prior inconsistent statement and permit its use as substantive evidence, it was necessary that the prior statement had been given under oath in a testimonial setting.
The Congressional intent can be easily ascertained as to pretrial inconsistent statements given under oath in a testimonial *321 setting. This is not hearsay, and if properly introduced under Rule 613 may be considered as substantive evidence by the factfinder.
But what about all other pretrial inconsistent statements? Rule 607 must be read in conjunction with Rule 801(d)(1)(A) as enacted by Congress. By changing proposed Rule 801(d)(1)(A) and adopting Rule 607 as proposed, Congress created an ambiguity which legal commentators have struggled with since the adoption of the Federal Rules of Evidence, Pub.L. 93-593, Jan. 2, 1975, 88 Stat. 1929. By amending proposed Rule 801(d)(1)(A) did Congress intend to reduce the sweep of 607? Because Congress did in fact significantly change Rule 801(d)(1)(A) from the proposed rule, the weight of authority among them is that in one way or another, either by interpreting or amending Rule 607 to so read, or by interpreting Rule 403 to require it, the pre-rules requirement of surprise and damage should be present before an inconsistent statement is competent.[4]
Without giving this as the specific reason for their doing so, federal courts in applying Rule 607 have in fact generally refused to permit a party to impeach his own witness in the absence of showing surprise using language such as: "We conclude that it was error to allow the government to misuse Gonzalez' testimony as a `subterfuge' to get otherwise inadmissible testimony before the jury." United States v. Crouch, 731 F.2d 621, 624 (9th Cir.1984). Or, as in United States v. Miller, 664 F.2d 94, 97 (5th Cir.1981), where the Court noted: "Of course, the prosecutor may not use such a [prior inconsistent] statement under the guise of impeachment for the primary purpose of placing before the jury substantive evidence which is not otherwise admissible." (Brackets added; emphasis added)
And, as stated in United States v. Hogan, 763 F.2d 697, 702 (5th Cir.1985):
The prosecution, however, may not call a witness it knows to be hostile for the primary purpose of eliciting otherwise inadmissible impeachment testimony, for such a scheme merely serves as a subterfuge to avoid the hearsay rule.
Also, United States v. Fay, 668 F.2d 375, 379 (8th Cir.1981); United States v. DeLillo, 620 F.2d 939, 946 (2nd Cir.1980), cert. denied 449 U.S. 835, 101 S.Ct. 107, 66 L.Ed.2d 41 (1980); United States v. Sebetich, 776 F.2d 412, 427-28 (3rd Cir.1985).
The trouble with this rationale is first, as perceptively noted in the dissenting opinion in Cooper v. State Farm Fire & Cas. Co., 568 So.2d 687, 700 (Miss. 1990) (Robertson, J., dissenting), it makes admissibility of evidence depend on what is in the attorney's head, a rather difficult undertaking; and second, if there is in fact no surprise, the only possible motive for attempting to impeach one's own witness is to get otherwise inadmissible testimony into evidence. Administering the rules of evidence would be much easier if the Federal courts of appeal had, as the commentators suggested, directly interpreted Rule 607 as requiring surprise before permitting a party to impeach his own witness with an unsworn prior inconsistent statement, rather than reaching the identical result by indirection.[5]
C. MISSISSIPPI RULES OF EVIDENCE
The Mississippi Supreme Court in promulgating the Mississippi Rules of Evidence in September, 1985, adopted Rules 607 and Rule 801(d)(1)(A) identically as *322 written in the Federal Rules. The bench and bar would have been better served had the ambiguity created by reading Federal Rule 607 in conjunction with Federal Rule 801(d)(1)(A) been removed in our rules, either by use of different language or by a comment to the rules.[6]
Be that as it may, our decisions since the adoption of the Mississippi Rules of Evidence have followed the rationale of the federal courts, and have not permitted the introduction of prior inconsistent statements in the absence of a showing of surprise. Thus in Cooper v. State Farm Fire & Cas. Co., 568 So.2d at 691, in reversing a case in which prior inconsistent statements to three insurance company representatives were admitted in the circuit court, we held:
An extensive and careful reading of the record as a whole ... shows that State Farm, knowing all the while what the responses would be, offered the testimony of Susie Arnett for no other reason than to impeach her denials with the hearsay testimony of McClain, Brown and Lomenick [the insurance company representatives]. As such, the testimony of McClain, Brown and Lomenick was offered "under the guise of impeachment for the primary purpose of placing before the jury substantive evidence" in its case in chief which was "not otherwise admissible as a device to avoid the hearsay rule." The admission of this testimony was error. [Brackets added]
And, in Brown v. State, 556 So.2d 338 (Miss. 1990), a case in which the only evidence pointing to the defendant's guilt was a prior inconsistent statement of a State's witness, we reversed and rendered a conviction, after quoting at length Moffett, our pre-rules decision, as major authority therefor, and never bothered to mention the Mississippi Rules of Evidence. We held in Brown that unsworn pretrial inconsistent statements of a witness could never be used as substantive evidence.
Harrison v. State, 534 So.2d 175 (Miss. 1988), does hold that Rule 607 permits a party to impeach his own witness, but since it was never argued on appeal in that case that the purpose of the State in introducing prior inconsistent statements was to get otherwise inadmissible evidence before the jury as a subterfuge, we affirmed.
To remove any doubt as to the meaning of Rule 607, we hold today that in its application, just as in our pre-rules decisions, before a party will be authorized to introduce for impeachment purposes an unsworn pretrial inconsistent statement of his own witness, it will be necessary that he show surprise or unexpected hostility, and that such statement can never be used as substantive evidence. We also hold that under the "unfair prejudice, confusion of the issues, or misleading of the jury" provisions of Rule 403, the circuit judge should consider whether a cautionary instruction to the jury will be sufficient to keep the jury from treating the unsworn pretrial inconsistent statement as substantive evidence, and if not, the statement should not be introduced.[7]
*323 D. REFUSAL TO PERMIT DEFENSE IMPEACHMENT OF McKENZIE
McKenzie had been arrested and jailed on an unnatural intercourse charge. At the time of Wilkins' trial, he had not been convicted, and the record does not show whether he in fact had even been indicted.
The State moved for and secured an order in limine preventing defense counsel from cross-examining McKenzie about this charge. Wilkins now claims that the court's refusal to permit him to attack McKenzie's credibility by asking him about this charge was error.
In Blanks v. State, 451 So.2d 775, 778 (Miss. 1984), we held that a witness cannot be cross-examined regarding his involvement with crimes for which he has not been convicted, and in Vick v. Cochran, 316 So.2d 242, 251 (Miss. 1977), that a witness cannot be impeached by showing merely that he has been charged with a crime. Also, Barlow v. State, 233 So.2d 829, 832 (Miss. 1970).
Even where a witness has been convicted of a crime, under Rule 609(a) of the MRE it is now discretionary with the trial court whether to permit cross-examination as to such conviction for impeachment purposes. Saucier v. State, 562 So.2d 1238, 1245 (Miss. 1990); McInnis v. State, 527 So.2d 84, 88 (Miss. 1988); Johnson v. State, 525 So.2d 809, 811 (Miss. 1988); Peterson v. State, 518 So.2d 632, 636 (Miss. 1987).
Defense counsel offered no other purpose for attempting to cross-examine McKenzie than to impeach his credibility, and the court did not err in refusing to permit this line of cross-examination.
REVERSED AND REMANDED.
ROY NOBLE LEE, C.J., DAN M. LEE, P.J., and PRATHER, ROBERTSON, SULLIVAN, BANKS and McRAE, JJ., concur.
PITTMAN, J., concurs in result only.
NOTES
[1] When the contents of the bag were emptied and inspected by investigator Wright, he found the Old Charter, seven years on the label, a red plastic handle flashlight, loose gum, a Richland brand green package of 25 menthol cigarettes, a cigarette lighter, some matches, and a half pint of gin. The pull-over shirt was then in the bag as well. These were all made exhibits and introduced into evidence at trial.
[2] See generally McCormick's Handbook of the Law of Evidence § 251 (2d ed. E. Cleary 1972) [hereinafter cited as McCormick]; 4 J. Weinstein & M. Berger, Weinstein's Evidence ¶ 801(d)f (1) [01] (1976) [hereinafter cited as [Weinstein]; 3A J. Wigmore, Evidence §§ 1018 & 998 n. 3 (J. Chadbourn ed. 1970); Falknor, The Hearsay Rule and Its Exceptions, 2 U.C.L.A. L.Rev. 43 (1954); McCormick, The Turncoat Witness: Previous Statements as Substantive Evidence, 25 Texas L.Rev. 573 (1947); Morgan, Hearsay Dangers and the Application of the Hearsay Concept, 62 Harv.L.Rev. 177 (1948); Reutlinger, Prior Inconsistent Statements: Presently Inconsistent Doctrine, 26 Hastings L.J. 361 (1974); Silbert, Federal Rule of Evidence 801(d)(1)(A), 49 Temp.L.Q. 880 (1976). [brackets original]
Graham, "Employing Inconsistent Statements for Impeachment and as Substantive Evidence: A Critical Review and Proposed Amendments of Federal Rules of Evidence 801(d)(1)(A), 613, and 607," 75 Mich.L.Rev. 1565, 1568 n. 10 (1977).
[3] Rules of Evidence for United States Courts and Magistrates, 56 F.R.D. 183, 293 (1972); Graham, 75 Mich.L.Rev. at 1575.
[4] Graham, "Employing Inconsistent Statements," 75 Mich.L.Rev. 1565; Graham, "Examination of a Party's Own Witness Under the Federal Rules of Evidence: A Promise Unfilled, 1976" 54 Tex.L.Rev. 917, 979; Ordover, "Surprise! That Damaging Turncoat Witness is Still with Us: An Analysis of Federal Rules of Evidence 607, 801(d)(1)(A) and 403," 5 Hofstra L.Rev. 65 (1976); Graham, "The Relationship Among Federal Rules of Evidence 607, 801(d)(1)(A), and 403; A Reply to Weinstein's Evidence," 55 Tex.L.Rev. 573 (1977); 3 J. Weinstein & M. Berger, Weinstein's Evidence 607(1) at 19-21; Wright & Graham, § 6093 Federal Practice & Procedure (1989); Luisell & Mueller, Federal Evidence, § 209 (1981).
[5] It is interesting to note that the Supreme Court of Appeals of West Virginia has interpreted its Rule 607 precisely as the advisory committee to the U.S. Supreme Court intended it. State v. Kopa, 173 W. Va. 43, 311 S.E.2d 412 (1983).
[6] With the alarm already having been sounded several years previous by leading scholars on evidence, fn. 2, supra, and the misunderstanding of the application of Rule 607 encountered in the federal courts, this Court could either have adopted Rule 801(d)(1)(A) as originally proposed by the United States Supreme Court, which permits unsworn prior contradictory statements to be admitted as substantive evidence, or made it plain that Rule 607 was not to be considered a departure from our pre-rules decisions, not left the bench and bar dangling somewhere in between.
Indeed, in Moffett, 456 So.2d at 718, a pre-rules decision, we stated:
We recognize today that the rule [against impeaching one's own witness] is not in favor... . It has been abrogated altogether in civil cases. Rule 43(b)(4) Miss.R.Civ.P., effective January 1, 1982, provides that the "credibility of a witness may be attacked by any party, including the party calling him." (Emphasis added)
Rules 43(b)(4) and 607 containing identical language, the statement in Moffett suggested that what the State in fact did in this case would, after the adoption of the Mississippi Rules of Evidence, be entirely proper.
[7] MRE Rule 403 states:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
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777 F.Supp. 890 (1991)
Sophia FARR, Violet Farr, Kevin Farr, Kelly Farr, Walter J. Stotler, Jr., Cathy Stotler, Francis Wellnitz, Mary M. Wellnitz, M.W. Markley, Dema Marsh, Marlene Markley, Walter Markley, Marcia Guard, Donald G. Guard, Don DeLong and Mary Lou DeLong, Plaintiffs,
v.
DESIGNER PHOSPHATE AND PREMIX INTERNATIONAL, INC., Tim Tobiason, Emil Tobiason, Wayne Loseke, Terry Vavrina, Kenneth Bach, Daniel Kellner, James Kellner, Thomas Kaiser, LaVine Kumm, Todd Tobiason, Donald Jacobson, Thomas Mrkvicka and Charles W. Allphin, III, Defendants,
v.
Lloyd FARR, Third Party Defendant.
No. 90-4180-S.
United States District Court, D. Kansas.
November 12, 1991.
*891 Michael E. Francis, Thomas J. Wilder, Alan V. Johnson, Sloan, Listrom, Eisenbarth, Sloan & Glassman, Topeka, Kan., for plaintiffs.
Joseph R. Colantuono, Polsinelli, White, Vardeman & Shalton, Overland Park, Kan., Darren R. Carlson, Walentine & O'Toole, Omaha, Neb., Weston A. Sechtem, Robert J. Bjerg, Miller Law Firm, Kansas City, Mo., Rudolph H. Beese, Richmond M. Enochs, Wallace, Saunders, Austin, Brown & Enochs, Overland Park, Kan., Joe Rebein, Shook, Hardy & Bacon, Kansas City, Mo., Barbara A. Harmon, Shook, Hardy & Bacon, Overland Park, Kan., David Lee Heinemann, Robert O. Lesley, Stinson, Mag & Fizzell, Kansas City, Mo., for defendants.
MEMORANDUM AND ORDER
SAFFELS, Senior District Judge.
This matter is before the court on motions to dismiss by defendants Emil Tobiason, Wayne Loseke, Don Jacobson, and Todd Tobiason (Doc. 105), defendants Terry Vavrina, Kenneth Bach, Daniel Kellner, James Kellner, Thomas Kaiser, LaVine Kumm, and Thomas Mrkvicka (Doc. 136), and defendant Charles Allphin ("Allphin") (Doc. 124). Defendants Terry Vavrina, Kenneth Bach, Daniel Kellner, James Kellner, Thomas Kaiser, LaVine Kumm and Thomas Mrkvicka also request dismissal for lack of subject matter jurisdiction and failure to allege the claims with particularity. In the alternative, these same defendants request transfer of the case to the District of Nebraska.
The issue of personal jurisdiction was previously before this court on defendants Emil Tobiason and Wayne Loseke's motion to dismiss. In a Memorandum and Order filed March 27, 1991, this court allowed the plaintiffs to amend their complaint because it did not make clear the basis for jurisdiction over each defendant. Defendants were given leave to renew their motion to dismiss for lack of personal jurisdiction once the complaint had been amended.
The first amended complaint states that this court has personal jurisdiction over all of the plaintiffs pursuant to K.S.A. 60-308(b)(2), and, in addition, over defendants Designer Phosphates and Premix International ("DPPI"), Tim Tobiason, and Charles Allphin under federal statutes subjecting them to nationwide service of process. As stated in this court's previous order, for defendants properly served under federal law, the jurisdictional analysis must be one of due process minimum contacts under the Fifth Amendment. For those defendants served under the Kansas long-arm statute, the court must do a statutory jurisdictional analysis under K.S.A. 60-308(b) and a Fourteenth Amendment due process minimum contacts analysis. Neither DPPI nor Tim Tobiason have filed motions to dismiss for lack of personal jurisdiction. Therefore, the court's analysis will be under the Kansas long-arm statute and the Fourteenth Amendment for each defendant except Charles Allphin for whom the court must only establish minimum contacts under the Fifth Amendment due process clause, Allphin having been served under the federal statute conferring nationwide service of process. The jurisdiction of this court over Charles Allphin will be addressed separately later in the opinion.
KANSAS LONG-ARM STATUTE
The Kansas statute reads in pertinent part:
*892 Any person, whether or not a citizen or resident of this state, who in person or through an agent or instrumentality does any of the acts hereinafter enumerated, thereby submits the person and, if an individual, the individual's personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of these acts:
....
(2) commission of a tortious act within this state....
In the plaintiffs' first amended complaint they allege that "[a]ll of the defendants were aware that DPPI and the Designer Companies were selling stock to Kansas residents, and all of the defendants acquiesced in such sales." Later in the complaint, plaintiffs allege the defendants knew or should have known of misstatements or omissions made by other defendants.
The Kansas Supreme Court has addressed the circumstances under which non-resident defendant directors have submitted to the jurisdiction of Kansas courts. In Schlatter v. Mo-Comm Futures, Ltd., 233 Kan. 324, 662 P.2d 553 (1983), the court analyzed whether two name-only, non-participating directors transacted business or committed a tortious act in Kansas. The plaintiffs were Kansas residents and the directors were both residents of Missouri. The plaintiffs purchased in Kansas some shares of stock in a limited partnership. The corporation was the general partner in the limited partnership. The plaintiffs alleged that biographical information about the defendants was published in the preorganization subscription agreement that went out to potential investors, and that the defendants knew about the publication. The plaintiffs brought a lawsuit for damages under the Kansas securities laws.
The Schlatter court made the following finding:
While defendants were lax in not assuming their duties as directors and in allowing their appointment and continuation as directors when they obviously had no control or say in the management of the corporation, we cannot say that such nonfeasance constitutes the doing of business or commission of a tortious act in Kansas. 662 P.2d at 561.
Therefore, the court found the directors had committed no affirmative act in the state related to the sale of securities by which the court could find it had personal jurisdiction over the defendant directors. 662 P.2d at 563. The court further noted that jurisdiction over the corporation did not confer personal jurisdiction over the directors. 662 P.2d at 561.
In the present case, the plaintiffs only allege the defendant directors were aware of the sale of securities in Kansas and that they acquiesced in such sales. Under Schlatter, such nonfeasance is not enough to subject the defendant directors to personal jurisdiction under the Kansas long-arm statute. While the plaintiffs must only make a prima facie showing of jurisdiction at this stage of the litigation, Carrothers Constr. Co. v. Quality Serv. & Supply, 586 F.Supp. 134, 135-36 (D.Kan. 1984), the court finds that plaintiffs have not met their burden of establishing that this court has personal jurisdiction over the defendants. The letters to which plaintiffs cite to establish that the directors took an active role in the sale of securities are too vague to give rise to an inference that each individual director's actions satisfy the requisite minimum contacts with this forum. There is no indication who the board members were at the time the letters were written, what the board members' involvement consisted of, and whether the board members were even at the stockholders' meetings referred to in the letters. Further, it is not clear that the letters were even written during the time frame the cause of action leading to this lawsuit arose. Thus, the court is left merely with allegations that the defendant directors knew about and acquiesced in the sale of securities in Kansas. Such nonfeasance was not enough to subject the defendants in Schlatter to the jurisdiction of the court and it is not enough here.
Accordingly, the court finds it has no personal jurisdiction under the Kansas *893 long-arm statute, K.S.A. 60-308(b)(2), over defendants Emil Tobiason, Wayne Loseke, Don Jacobson, Todd Tobiason, Terry Vavrina, Kenneth Bach, Daniel Kellner, James Kellner, Thomas Kaiser, LaVine Kumm, and Thomas Mrkvicka.[1] Because there can be no jurisdiction over the defendants under the Kansas long-arm statute, there is no need to proceed to a constitutional due process minimum contacts analysis.[2]
DEFENDANT CHARLES ALLPHIN
In analyzing whether defendant Charles Allphin is subject to this court's jurisdiction, the court may consider affidavits and other documentary evidence submitted by the parties. Thermal Insulation Sys. v. Ark-Seal Corp., 508 F.Supp. 434, 437 (D.Kan.1980). Allegations in the complaint are accepted as true to the extent they are uncontroverted by submitted affidavits. Behagen v. Amateur Basketball Ass'n, 744 F.2d 731, 733 (10th Cir. 1984), cert. denied, 471 U.S. 1010, 105 S.Ct. 1879, 85 L.Ed.2d 171 (1985). Where there are conflicting affidavits, factual disputes are resolved in favor of the plaintiff, and plaintiff's prima facie showing withstands the moving party's presentation. Behagen, 744 F.2d at 733. Thus, the plaintiffs are entitled to the benefit of any factual doubts. Ammon v. Kaplow, 468 F.Supp. 1304, 1309 (D.Kan.1979).
As stated in this court's previous opinion, if the defendant is properly served under a federal statute's nationwide service of process provision, the analysis is then one of Fifth Amendment due process minimum contacts. The factors which must be considered include:
(1) the burden imposed upon defendant by litigation in the forum state; (2) defendant's reasonable expectation and the foreseeability of litigation in the forum state; (3) plaintiff's interest in convenient and effective relief; (4) the federal judicial system's interest in efficiently resolving controversies; and (5) the forum state's interest in having a court, within the forum state, adjudicate the dispute. Landmark II, 674 F.Supp. at 325 (citation omitted).
The court finds Charles Allphin was properly served under the federal statute. Among other things, the plaintiffs allege Allphin participated in a board meeting encouraging consolidation of DPPI and sale of securities; Allphin failed to register the common and preferred stock and then used interstate commerce and the mails to sell the unregistered securities in violation of federal law; and Allphin used interstate commerce and the mails to sell and deliver the securities, which were not preceded or accompanied by a prospectus in violation of federal law.
The court must then turn to the Fifth Amendment due process minimum contacts analysis, with due consideration of the factors enumerated above. The burden on the defendant Allphin to litigate in Kansas is not a decisive factor. This case consists of Kansas plaintiffs and Nebraska defendants. Based upon argument by the defendants, most of the witnesses will be from Nebraska. All defendants have employed local counsel who must travel to Nebraska for the purposes of discovery. The burden is the same for plaintiffs' counsel who must also travel to Nebraska for part of the discovery. If the litigation were to take place in Nebraska, however, the plaintiffs would be inconvenienced. Therefore, the court finds this is not a decisive factor. Allphin's reasonable expectation and foreseeability of having to litigate in Kansas as *894 a major factor in determining whether the exercise of jurisdiction over him comports with traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The first amended complaint alleges Allphin, at a board meeting in Nebraska, encouraged the Kansas plaintiffs to buy shares of stock. It is also alleged that Allphin sold and delivered unregistered securities in interstate commerce and through the mails without being preceded or accompanied by a prospectus. Allphin's alleged activities with a company he knew was selling securities in Kansas, make it reasonably foreseeable that he could be haled into court in Kansas.
In addressing the third factor regarding whether litigating in Kansas will further the plaintiffs' interest in convenient and effective relief, the court must look at whether the plaintiff will be able to join all parties in one suit. Landmark II, 674 F.Supp. at 326. Having already determined that 11 of the 14 defendants must be dismissed for lack of personal jurisdiction, this factor weighs against litigating in Kansas. Although the plaintiffs' choice of forums is entitled to consideration, the plaintiffs' claims cannot be fully litigated in Kansas. This factor is closely connected to the fourth factor regarding the federal judicial system's interest. Exercising jurisdiction over defendant Allphin would not promote an efficient resolution of the controversy, because 11 of the defendants are not subject to this court's jurisdiction.
Finally, this court must address Kansas' interest in adjudicating the dispute. All of the plaintiffs are Kansas residents and have alleged, among other claims, violation of the state's securities laws. Plaintiffs contend Kansas law will be applied to the common law claims against Allphin, while defendants contend Nebraska law must be applied to some of the claims. The court does not deem it necessary to herein decide the conflict of laws question. Nebraska may well have some interest in adjudicating the dispute, but there is no question Kansas has an interest in protecting its residents from violations of the state securities laws. It should be noted, however, that Kansas' interest may be best served by having the action adjudicated in Nebraska, since 11 of the defendants against whom violation of state securities laws have been alleged are being dismissed from this action. Therefore, the alleged violations would be more fully addressed in a forum which has jurisdiction over all of the defendants.
The court finds that when considered as a whole, it is proper to decline to exercise jurisdiction over defendant Charles Allphin. This court has already found 11 of the defendants are beyond the court's jurisdiction. Although Allphin could reasonably foresee being haled into court in Kansas, it would not facilitate efficient adjudication of the dispute nor further this state's interest to exercise personal jurisdiction. Accordingly, defendant Charles Allphin will be dismissed from this action.
IT IS BY THE COURT THEREFORE ORDERED that the motion to dismiss defendants Emil Tobiason, Wayne Loseke, Don Jacobson, and Todd Tobiason for lack of personal jurisdiction is granted (Doc. 105).
IT IS FURTHER ORDERED that the motion to dismiss defendants Terry Vavrina, Kenneth Bach, Daniel Kellner, James Kellner, Thomas Kaiser, LaVine Kumm, and Thomas Mrkvicka for lack of personal jurisdiction is granted (Doc. 136).
IT IS FURTHER ORDERED that the motion to dismiss defendant Charles Allphin is granted (Doc. 124).
IT IS FURTHER ORDERED that defendant Donald Jacobson's motion to dismiss the plaintiffs' first amended complaint as to Jacobson is denied as moot (Doc. 222).
NOTES
[1] Because of the court's disposition on the motion to dismiss, the other issues raised by defendants Terry Vavrina, Kenneth Bach, Daniel Kellner, James Kellner, Thomas Kaiser, LaVine Kumm and Thomas Mrkvicka will not be addressed.
[2] The plaintiffs argue that the result in Schlatter should be contrasted to the result in Wichita Fed. Sav. & Loan v. Landmark Group, Inc., 674 F.Supp. 321 (D.Kan.1987) (Landmark II). Plaintiffs' reliance on Landmark II is misplaced, however, because jurisdiction under federal statutory nationwide service of process was established and the court was performing the Fifth Amendment due process analysis. In Schlatter the court determined jurisdiction could not be established under the Kansas long-arm statute, a prerequisite to finding jurisdiction for defendants served under the Kansas statute.
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279 Pa. Superior Ct. 395 (1980)
421 A.2d 257
COMMONWEALTH of Pennsylvania
v.
William Clifford DUNCAN, Appellant.
Superior Court of Pennsylvania.
Argued November 13, 1979.
Filed July 11, 1980.
*396 Donald Calaiaro, Pittsburgh, for appellant.
Kemal Alexander Mericli, Assistant District Attorney, Pittsburgh, for Commonwealth, appellee.
Before PRICE, HESTER and CAVANAUGH, JJ.
CAVANAUGH, Judge:
This is an appeal from a judgment of sentence imposed following appellant's conviction by a jury on charges of statutory rape, indecent assault, indecent exposure and corruption of minors. Appellant was sentenced to a term of imprisonment of not less than two and one half years nor more than five years.
According to testimony at trial, on June 23, 1978 Duncan, age 54, forced C.C., age 13, and two other minors into his automobile. He took the girls to his apartment where he had sexual intercourse with C.C. while the others watched. After giving the girls money and cautioning them not to tell anyone of the incident, he drove the girls home. The *397 following day, C.C.'s mother learned that appellant had intercourse with her daughter and informed the police.
Appellant's argument on appeal is that he was denied procedural due process when the trial court erred in denying the admission of testimony as to the minor victim's past sexual conduct with a third person.[1] Duncan sought permission to testify that prior to the commission of the offenses charged he had inadvertently caught C.C. engaging in sexual intercourse with a third person; that Duncan informed the victim's cousin, who in turn related the information to Mrs. C. Mrs. C. later telephoned Duncan concerning the incident. Duncan maintains that the evidence was relevant and admissible for the limited purpose of showing that the victim's bias caused her to fabricate the charges against him.
Appellant admits that under the Pennsylvania "Rape Shield Law," 18 Pa.C.S.A. § 3104, evidence of the victim's past sexual conduct is not admissible in a rape case, including statutory rape cases. 18 Pa.C.S.A. § 3104 provides, in relevant part:
Evidence of victim's sexual conduct.
(a) General rule. Evidence of specific instances of the alleged victim's past sexual conduct, opinion evidence of the alleged victim's past sexual conduct, and reputation evidence of the alleged victim's past sexual conduct shall not be admissible in prosecutions under this chapter except evidence of the alleged victim's past sexual conduct with the defendant where consent of the alleged victim is at issue and such evidence is otherwise admissible pursuant to the rules of evidence.
Despite this language appellant makes the argument that evidence to show bias is always relevant and that, therefore, the trial court erred in refusing the proffered testimony. *398 Duncan cites Commonwealth v. Covil, 474 Pa. 375, 378 A.2d 841 (1977), for the proposition that evidence inadmissible for one purpose, but admissible for another, may be received into evidence for that limited proper purpose. Thus, he asserts, that whereas C.C.'s prior sexual conduct would not have been admissible to show her general reputation, it should have been admitted to show her bias. However, appellant's argument ignores the fact that in enacting 18 Pa.C.S.A. § 3104 the legislature has determined that evidence of past sexual conduct by the victim with third persons is not admissible for any purpose. The statute does not state that the evidence is admissible except for the purpose of showing the victim's reputation. Rather it generally prohibits the admission of such evidence for any purpose except in the sole instance where consent is at issue and the evidence relates to conduct of the victim with the defendant. Where, as here, the words of the statute are clear, the letter thereof will not be disregarded under the pretext of pursuing an unstated legislative intent. 1 Pa.C. S.A. § 1921(b); City of Pittsburgh v. Royston Service, Inc., 37 Pa.Cmwlth. 394, 390 A.2d 896 (1978). See also Commonwealth v. Rieck Investment Corporation, 419 Pa. 52, 213 A.2d 277 (1965). Because the evidence as to the bias of a victim of statutory rape does not fit within the sole exception to the exclusionary rule, the trial court was not in error in disallowing the testimony.[2]
Although this court is precluded from deciding constitutional issues sua sponte,[3]Wiegand v. Wiegand, 461 Pa. *399 482, 337 A.2d 256 (1975), because the statute in question appears to severely restrict the ability of the accused to cross-examine his accuser, we observe that there may be some question as to the constitutionality of subpart (a) of the Pennsylvania rape shield law. The Sixth Amendment to the United States Constitution provides: "In all criminal prosecutions, the accused shall enjoy the right . . . to be confronted with the witnesses against him." U.S.Const. amend. VI. The same right is protected by the Pennsylvania Constitution: "In all criminal prosecutions the accused hath a right to be heard by himself and his counsel, to demand the nature and cause of the accusation against him, to meet the witnesses face to face . . ." Pa.Const. art. 1, § 9. The facts of the instant case are especially appropriate in highlighting the problem created by such a statute in the face of this fundamental right to confrontation.
Here the defendant sought to admit evidence of bias to show that the charges against him were fabricated by the victim. Assuming its admissibility,[4] such evidence, if believed, may have exculpated the defendant. Thus, the situation here involves a balancing of the accused's fundamental right to confrontation against the rights to the victim not to be treated as a defendant[5] nor to be unnecessarily embarrassed *400 or traumatized.[6] While we recognize the need for protection of a rape victim from harassment and undue inquiries into her private life, such protection may not jeopardize the accused's right to a fair trial.
Other jurisdictions have considered the constitutionality of rape shield laws similar to that of Pennsylvania's and have held them to unconstitutionally infringe on the right to confrontation. West Virginia v. Green, 260 S.E.2d 257 (W.Va. 1979); Oregon v. Jalo, 27 Or.App. 845, 557 P.2d 1359 (1976); but see Smith v. Kentucky, 566 S.W.2d 181 (Ky.App. 1978) (rape shield law upheld despite challenge on Sixth Amendment grounds). Oregon v. Jalo, supra, involved a factual situation similar to the instant case. There it was held that in a prosecution for first-degree sodomy and attempted first degree rape, the application of the shield law precluding evidence of previous sexual conduct of the victim infringed upon the defendant's constitutional right to confrontation as applied to prohibit evidence of the victim's ulterior motive for making a false charge. In so holding the Oregon court relied on the United States Supreme Court case of Davis v. Alaska, 415 U.S. 308, 94 S.Ct. 1105, 39 L.Ed.2d 347 (1974).
Although the Supreme Court has not decided the constitutionality of a rape shield law, in Davis v. Alaska, supra, the *401 Court considered the constitutionality of a juvenile shield law. There the defense was unable to show that a key witness, a juvenile offender on probation, was biased because of the statute prohibiting disclosure of juvenile criminal records. The evidence sought to be admitted tended to create a basis for an inference of undue pressure on the witness to testify as he did because of his vulnerable status as a probationer as well as his concern that he himself may be a possible suspect. The court held that the right of confrontation is paramount to the State's policy of protecting a juvenile offender, and that the defendant should not be required to bear the full burden of vindicating the State's interest in the secrecy of juvenile criminal records.
In view of the above, this Court, in affirming the judgment of sentence, is cognizant of the constitutional difficulties that 18 Pa.C.S. § 3104(a) presents in its application to situations such as that presently before us.
Judgment of sentence affirmed.
NOTES
[1] We note that the appellant confines his argument to the trial court's error in applying the statute in question and does not challenge the constitutionality of the Rape Shield Law itself. In any event, a challenge to the constitutionality of the Rape Shield Law has not been sufficiently preserved. See note 3, infra.
[2] Subpart (b) of § 3104 provides in part:
A defendant who proposes to offer evidence of the alleged victim's past sexual conduct pursuant to subsection (a) shall file a written motion and offer of proof at the time of trial.
Although an offer of proof was made by appellant at the time of trial, a written motion was not filed. However, the offer of proof was made and considered by the trial judge who refused to allow the proposed testimony.
[3] Neither the defendant nor the Commonwealth has briefed or argued the issue of the constitutionality of the rape shield law. Even if the issue had been raised on appeal, we would not be free to decide the case on constitutional grounds unless defendant had first raised it in the trial court, see Commonwealth v. Warren, 475 Pa. 379 A.2d 561 (1977); Commonwealth v. Blair, 460 Pa. 31, 331 A.2d 213 (1975); Commonwealth v. Ashford, 268 Pa.Super. 225, 407 A.2d 1328 (1979), and had complied with Rule 521, Pa.R.A.P., requiring that notice of a constitutional challenge to a statute be given to the Attorney General. See Commonwealth v. Ashford, supra, 268 Pa.Super. at 231 n. 3, 407 A.2d at 1330 n. 3.
[4] The record is not clear as to whether the defendant could show that C.C. had the requisite knowledge that the defendant had observed her engaging in sexual intercourse and that he had indirectly informed her mother. Without this knowledge, of course, bias could not be proven. However, because the lower court disallowed the testimony on the basis of the statute, we will assume for the purpose of this opinion that such knowledge could have been proven.
[5] The following remarks were made by Senator Jubelirer noting the passage of the Rape Shield Law:
The evidence of a victim's prior sexual conduct is no longer a subject of proper cross examination in either statutory rape or in forcible rape. We should have, Mr. President, a situation now where the victim of the heinous crime of rape is no longer treated as the defendant and that the defendant can still receive a very fair trial under the laws of evidence as we have attempted to do here today.
Legislative Journal-Senate, p. 1462 (April 6, 1979).
[6] In Commonwealth v. Strube, 274 Pa.Super. 199, 418 A.2d 365 (1979) this court held subpart (b) of the Pennsylvania Rape Shield Law to be constitutional. (This section of the act requires disclosure at trial of evidence relating to the victim's past sexual conduct to determine its admissibility). Writing for the court, Judge Price recognized that the introduction of evidence at trial of the victim's past sexual conduct "has a highly traumatic and embarrassing effect on the complaining witness," 274 Pa.Super. at 208, 418 A.2d at 369, and that "[t]he raison d'etre of 18 Pa.C.S. § 3104, and similar rape shield laws in other jurisdictions, is to partially correct the manner in which our system has approached the victim of sexual assault." Id., 274 Pa.Super. at 204, 418 A.2d at 367.
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280 Pa. Superior Ct. 106 (1980)
421 A.2d 427
Courtney B. DAVIS, Ronald Fogel, Thomas Swartley, Calvin Wolfgang, Thomas Tolson, Individually and Trading as the Post Group, Appellants,
v.
Rodney T. BUCKHAM.
Courtney B. DAVIS, Ronald Fogel, Thomas Swartley, Calvin Wolfgang, Thomas Tolson, Individually and Trading as the Post Group
v.
Rodney T. BUCKHAM, Appellant.
Superior Court of Pennsylvania.
Argued December 3, 1979.
Filed July 25, 1980.
*107 *108 Michael Minkin, Philadelphia, for appellants (at No. 666) and for appellees (at No. 725).
Robert A. Naragon, Doylestown, for Rodney T. Buckham.
Before SPAETH, CAVANAUGH and O'KICKI, JJ.[*]
SPAETH, Judge:
These are two appeals from an order dismissing exceptions to the chancellor's adjudication and decree nisi. In Appeal No. 666, the appellants are Courtney Davis, Ronald Fogel, Thomas Swartley, Calvin Wolfgang, and Thomas Tolson, individually and trading as the Post Group; the *109 appellee is Rodney Buckham. In Appeal No. 725, Buckham is the appellant, and the Post Group is the appellee. The issue on both appeals is whether the chancellor properly construed and enforced a covenant by Buckham not to compete with the Post Group.
On November 10, 1969, Buckham, Davis, Fogel, and Swartley[1] entered into a partnership agreement for the practice of physical therapy as the Post Group. Buckham was the only senior partner,[2] and upon his withdrawal he was entitled under paragraph 12 of the agreement to an amount equal to three times his income for the last calendar year before his withdrawal, payment to be made in 260 weekly installments. The agreement also provided, in paragraph 14, that upon withdrawing from the Post Group, Buckham was not to engage in the practice of physical therapy within a fifteen mile radius of Doylestown, Pennsylvania, for a period of five years.
On November 4, 1970, Buckham withdrew from the Post Group. Since his income for the previous calendar year had been $24,187.44, under paragraph 12 the Post Group became liable to him for $72,562.32, payable in 260 weekly installments. The Post Group paid the installments as they became due. In 1974, however, after having paid Buckham approximately $61,000, the Post Group became aware that Buckham was practicing physical therapy within a fifteen mile radius of Doylestown. It thereupon brought the present action in equity, in the meantime placing the balance due under paragraph 12 in escrow pending resolution of the action. The theory of the action is that the payment provided by paragraph 12 was consideration for the covenant *110 in paragraph 14 not to compete, and that by breaching the covenant, Buckham forfeited his right to the payment.
A hearing was held on December 8, 1977, and the chancellor filed her adjudication and decree nisi on September 29, 1978. The chancellor held that Buckham had violated paragraph 14 but that the Post Group had failed to prove any damages. She also held that the paragraph 12 payment was not consideration for the paragraph 14 covenant. She therefore awarded the Post Group damages of $1 and ordered it to pay Buckham the balance due under paragraph 12. The chancellor went further, however, and entered an order enjoining Buckham from engaging in the practice of physical therapy for a period of five years from the date of the decree nisi. Both sides filed exceptions but these were dismissed by the court en banc. These appeals followed.
It is settled that "the findings of fact of the [c]hancellor who heard the testimony without a jury, approved by the court en banc, are entitled to the weight of a jury's verdict; that such findings are controlling and that the court's decree should not be reversed unless it appears that the court abused its discretion or that the court's findings lack evidentiary support or that the court capriciously disbelieved the evidence." Barbet v. Ostovar, 273 Pa.Super. 256, 259-260, 417 A.2d 636, 638 (1979), quoting Bogosian v. Foerderer Tract Committee, 264 Pa.Super. 84, 89, 399 A.2d 408, 411 (1979); Chatham Communications, Inc. v. General Press Corp., 463 Pa. 292, 297, 344 A.2d 837, 840 (1975). It is also settled, however, that "[w]hen a finding of fact is simply a deduction from other facts and the ultimate fact in question is purely a result of reasoning, the appellate court may draw its own inferences and arrive at its conclusions from the facts as established." In Matter of Estate of McKinley, 461 Pa. 731, 734 n.1, 337 A.2d 851, 853 n.1 (1975), citing, Publicker Estate, 385 Pa. 403, 410, 123 A.2d 655, 660 (1956). Indeed, the court on appeal need not give deference to the legal conclusions of the chancellor. Snow v. Corsica Construction Co., Inc., 459 Pa. 528, 329 A.2d 887 (1974); Yuhas v. Schmidt, 434 Pa. 447, 258 A.2d 616 (1969).
*111 Our review of the arguments made by the parties to the appeals in this case indicates that the chancellor's findings of fact are not disputed but that the legal conclusions drawn from those findings are disputed. As to the chancellor's findings, we are bound; as to her conclusions, we shall render our own decision.
-Appeal No. 666-
In its appeal the Post Group argues that the chancellor erred in her conclusion that its promise, in paragraph 12, to pay Buckham upon his withdrawal was not consideration for Buckham's promise, in paragraph 14, not to compete. It is the Post Group's view that the promise to pay was consideration for the promise not to compete; that by competing, Buckham forfeited his right to the payment; and that he should be required to repay the same $61,000 that he has been paid.
Paragraph 12 provides:
12. The partnership hereby created may be dissolved by mutual consent or by any partner giving the other partners three months' written notice to the last known address of each of the other partners.
The interest of the withdrawing senior partner shall be three times his income of the last previous calendar year, payable in weekly installments over a period of two hundred and sixty (260) weeks, the first payment to be made one (1) week subsequent to the termination of the three (3) months written notice provision provided for in this paragraph.
Paragraph 14 provides:
14. In the event that Buckham shall withdraw from the partnership, Buckham agrees and covenants that he will not engage in the practice of physical therapy within the Borough of Doylestown, or within a radius of fifteen (15) miles thereof, for a period of five (5) years from the date of said withdrawal.
It will be noted that neither paragraph contains a cross-reference to the other. Moreover, no portion of the payment *112 promised in paragraph 12 is described or defined or otherwise referred to as consideration for the promise in paragraph 14 not to compete. Nor is there any provision for liquidated damages. Thus, the Post Group's reliance upon this court's decision in Ebright v. Shutter, 254 Pa.Super. 509, 386 A.2d 66 (1978), is misplaced, for in that case we permitted an award based upon a contractual provision that specifically provided that a portion of a payment was consideration for the covenant not to compete. And see Stover v. Spielman, 1 Pa.Super. 526 (1896) (where actual damages for breach of covenant not to compete are difficult of ascertainment, stipulated damages provision will be enforced).
The payment promised in paragraph 12 is not only not described as consideration for the promise in paragraph 14 not to compete, but it is described as "[t]he interest of the withdrawing senior partner," to be computed upon the senior partner's income. Thus, the promise to pay was tied to the success of the partnership during the senior partner's participation. When so regarded, the promise to pay is seen to be in return for-in consideration of-the senior partner's surrender of his right to participate in the partnership, and not in consideration of his promise not to compete after his withdrawal. We recognize that the payout period, 260 weeks, is the same as the covenant period of five years, but given the other features of the agreement, that fact does not by itself justify the conclusion that the payment was consideration for the covenant.[3]
We thus conclude, as did the chancellor, that the payment due under paragraph 12 was not related to the covenant set forth in paragraph 14. The order requiring that the balance due under paragraph 14 be paid will therefore be affirmed.
-Appeal No. 725-
In his appeal Buckham argues that the chancellor erred in concluding that he had violated the covenant not to compete, *113 and in enjoining him from engaging in the practice of physical therapy for an additional five year period.
Buckham's first argument is without merit. The evidence was that Buckham maintained an office in Doylestown, listed himself as a physical therapist in the Doylestown telephone directory, billed patients from that office, and treated patients at a clinic within a radius of fifteen miles of Doylestown. This evidence was sufficient to support the chancellor's conclusion that Buckham had violated the covenant not to compete.[4]
Buckham's second argument, however, has merit. In Hayes v. Altman, 438 Pa. 451, 266 A.2d 269 (1970), the lower court enjoined the plaintiff's former employee from engaging in the practice of optometry under a three year restrictive covenant after the three year period had expired. Reversing, the Supreme Court held that "[a]n injunction will not be granted to enforce a restrictive covenant when the restrictive period has by its terms expired." Id., 438 Pa. at 455, 266 A.2d at 271, citing, Meeker v. Stuart, 188 F.Supp. 272 (D.D.C. 1960), aff'd, 289 F.2d 902 (D.C. Cir. 1961) (former partner violates restrictive covenant; remaining partner may not get injunction after period has expired but is limited to damages). See DeLong v. Lucas, 176 F.Supp. 104 (S.D.N.Y. 1959), aff'd, 278 F.2d 804 (2d Cir. 1960); Sherman v. Pfefferkorn, 241 Mass. 468, 135 N.E. 568 (1922); Wedin v. Atherholt, 298 Mich. 142, 298 N.W. 483 (1941); Goldberg v. Goldberg, 205 App.Div. 435, 200 N.Y.S. 3 (1923); Abalene Pest Control Service, Inc. v. Hall, 126 Vt. 1, 220 A.2d 717 (1966). Here, similarly, since the five year period has expired, no injunction may issue. In Hayes, the Court recognized cases in which the time for performance was extended, but it noted that "in each of these cases, if the court had not granted the extension some harm would have befallen the moving party," 438 Pa. at 456, 266 A.2d at 271, adding that *114 in the case before it, the period "ha[d] long since passed when the restrictive covenant . . . could be of any protection," id. The cases cited by the Court in Hayes in which extensions were granted all involved actions for specific performance of a sales contract after the contract period had expired; none involved a covenant not to compete. See McFarland v. Gregory, 322 F.2d 737 (2d Cir. 1963) (sale of realty); Erkess v. Eisenthal, 354 Pa. 161, 47 A.2d 154 (1946) (semble); Levin v. Pittsburgh U. Corp., 330 Pa. 457, 199 A. 332 (1938) (stock); Bloshinski v. Falaz, 168 Pa.Super. 565, 79 A.2d 798 (1951) (realty). Since covenants not to compete must be strictly construed, see Hayes v. Altman, supra, 438 Pa. at 454, 266 A.2d at 271, it is questionable whether in any case a chancellor would be justified in extending the period of the restriction. Assuming arguendo that such a case might arise, this is not it, for given the Post Group's failure to prove any damages because of Buckham's violation, we cannot conclude that an extension could be justified as necessary for the Post Group's protection.
We realize that the chancellor did not state that she was extending the period of the restriction by enjoining Buckham after the period had expired but instead maintained that she was merely enforcing the intent of the agreement as being to restrict competition during "a period of five years," not necessarily the five year period that started from the date of withdrawal. This construction of the agreement, however, is not acceptable. The provision in question reads, "for a period of five (5) years from the date of said withdrawal." In our opinion this clearly manifests the intent to prevent competition by Buckham for the first five years after withdrawal, not for some unspecified later five year period. Moreover, we note that apparently the chancellor herself was of this opinion, for she specifically found that Buckham had violated the covenant during the first five years, and on that basis assessed damages (albeit nominal) against him. Indeed, when the chancellor's decree nisi is considered as a whole, it becomes apparent that she effectively made the five year covenant a thirteen year covenant, for instead of restricting Buckham's competition only from *115 November 1970, the date of his withdrawal, to November 1975, she extended the covenant to September 1983, i.e., five years from the date of her decree nisi of September 29, 1978, and almost thirteen years from the date of withdrawal. Our courts have often reformed overly broad restrictive covenants by interpreting their terms narrowly. See Sidco Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250 (1976) (collecting cases). Here, the chancellor did the opposite.
The order of the lower court in Appeal No. 666 is affirmed.
The order of the lower court in Appeal No. 725 is affirmed except that that portion of the decree enjoining Buckham from engaging in the practice of physical therapy for five years from the date of the chancellor's decree nisi is vacated.
NOTES
[*] President Judge JOSEPH O'KICKI, of the Court of Common Pleas of Cambria County, Pennsylvania, is sitting by designation.
[1] Wolfgang and Tolson became associated with the Post Group later.
[2] The agreement provided:
2. The partnership shall initially be composed of one senior partner and three junior partners. Buckham shall be the senior partner and Davis, Fogel and Swartley, the junior partners. It is understood and agreed, however, that Davis shall become a senior partner five years from the effective date of this agreement, that Fogel shall become a senior partner seven years from said date, and that Swartley shall become a senior partner ten years from said date.
[3] We also recognize that Buckham stated below that the payment under paragraph 12 was consideration for the covenant in paragraph 14. This statement, however, was made arguendo in support of Buckham's claim that the covenant not to compete was unenforceable. See Randall v. Quetsch, 44 Wash.Co. 204 (1964).
[4] The Post Group does not dispute the chancellor's conclusion that it failed to prove any damages because of Buckham's violation. Buckham has made no argument concerning the propriety of the chancellor's award of $1 in damages.
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777 F.Supp. 1157 (1991)
MEDICAL SOCIETY OF the STATE OF NEW YORK, American Medical Association, and Isadore Rosenfeld, M.D., Plaintiffs,
v.
Mario M. CUOMO, Governor of the State of New York, and David M. Axelrod, M.D., Commissioner of New York Department of Health, each individually and in their official capacities, Defendants.
No. 90 Civ. 8289 (CSH).
United States District Court, S.D. New York.
November 12, 1991.
*1158 Steven M. Bierman, Sidley & Austin, New York City, Jack R. Bierig, David F. Graham, James C. Dechene, Richard D. Raskin, Sidley & Austin, Chicago, Ill., for plaintiffs; Donald R. Moy, Medical Soc. of State of N.Y., Lake Success, N.Y., Kirk B. Johnson, Edward B. Hirshfeld, Michael L. Ile, American Medical Ass'n, Chicago, Ill., of counsel.
Robert Abrams, Atty. Gen. of State of N.Y., New York City, for defendants; Brian T. McGovern, Asst. Atty. Gen., of counsel.
Rita Shapiro, New York Legal Assistance Group, New York City, Bonnie Ray, New York StateWide Sr. Action Council, Inc., Albany, N.Y., Cheryl A. Houston, New York State Council of Sr. Citizens, Suleika Cabrera Drinane, Institute for Puerto Rican/Hispanic Elderly, Shirley Genn, Brooklyn-Wide Intragency Council of the Aging, Caryn Resnick, JPAC for Older Adults, Carol Wallace, New York State Coalition of the Concerned for Older Americans, New York City, Richard Kirsch, Citizen Action of New York, Albany, N.Y., for amici curiae.
MEMORANDUM OPINION AND ORDER
HAIGHT, District Judge:
Plaintiffs Medical Society of the State of New York et al. ("Plaintiffs") move for summary judgment pursuant to F.R.C.P. 56. Plaintiffs contend that Chapter 572 of the Laws of New York (codified at N.Y. Public Health Law § 19) is (1) preempted by the Health Insurance for the Aged Act ("Medicare Act;" the "Act"), 42 U.S.C. § 1395 et seq. and (2) violative of the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Defendants Mario M. Cuomo and David M. Axelrod, M.D., respectively the Governor of New York and at the pertinent times its Commissioner of Health, contest plaintiffs' assertions, and cross-move for summary judgment. For the reasons stated below, this Court finds that Chapter 572 is not preempted by the federal statute, nor does it violate the Fourteenth Amendment.
BACKGROUND
The federal Medicare program was established in 1965 with the enactment of the Medicare Act. Persons 65 years and older are eligible under the provisions of the Act, as well as certain disabled individuals, regardless of ability to pay. § 1395c.
Part B of the Medicare Act ("Supplementary Medical Insurance Benefits for the Aged and Disabled"), § 1395j-1395w, provides an insurance plan under which medical services for eligible persons are paid by the Federal Supplementary Medical Insurance Trust Fund via a local carrier. In most instances, the program covers 80% of the "reasonable charge"[1] for services rendered, *1159 with the beneficiary paying the remainder.
Two billing methods were devised for payment of benefits. § 1395u(b)(3)(B). The first method provides for payment "on the basis of an itemized bill." This method, commonly known as "balance billing," is the source of the controversy at bar. Balance billing allows a physician to bill a Medicare beneficiary an amount in excess of the reasonable charge, with the local carrier reimbursing the beneficiary for 80% of the reasonable charge. The second method, "assignment," restricts a physician's fee to the reasonable charge, with the physician being reimbursed by the local carrier for 80% of the fee and the remaining 20% being paid by the beneficiary.
Under both payment plans, Medicare pays for 80% of the reasonable charge. The difference lies in the actual fee. Balance billing "provides a `safety valve' for physicians who believe that the fee schedule does not adequately reflect the quality of services they provide." Physician Payment Review Commission ("PPRC"), 1989 Annual Report to Congress at 137. Supporters of balance billing argue that it gives beneficiaries access to quality medical services. Although the total cost of medical services is higher than the reasonable charge level, they say that Medicare pays a large enough portion of the physician's fee to justify the excess cost.
Not surprisingly, opponents of balance billing assert that "extra bills become out-of-pocket liabilities." PPRC, 1988 Annual Report to Congress at 130. They also note that many beneficiaries are unaware of their insurance options and so may not learn that their physicians balance bill until after the medical services are performed. The beneficiaries only learn of their personal liability after the fact when it is too late to make other arrangements.
Recognizing the growing concern over balance billing, Congress, in the mid to late 1980's, adopted several plans to remedy the situation. In 1984, Congress initiated the "Participating Physician's Program." This program required physicians to either accept assignment for all billings in the coming year (a "participating physician"), or decide whether to balance bill on a case-by-case basis (a "non-participating physician"). To encourage physicians to participate and agree to assignment of all claims, several incentives were created: (1) participating physicians were listed in a special directory distributed to beneficiaries; (2) a higher reasonable charge was allowed for participating physicians, § 1395u(b)(4)(A)(iv); and (3) a freeze was placed on the amount physicians could balance bill § 1395u(j)(1).
In 1986, the freeze was lifted and replaced with a "maximum allowable actual charge" ("MAAC"), which capped the yearly increase allowed for physicians who balance bill. § 1395u(j)(1). In addition, the PPRC was established to "make recommendations to Congress ... regarding adjustments to the reasonable charge levels for physicians' services ... and changes in the methodology for determining the rates of payments, and for making payment, for physicians' services ..." § 1395w-1(b)(1).
Finally, in 1989, balance billing was capped at a "limiting charge." Under the new provisions, a cap of 25% (or in some instances 40%) above the "recognized payment amount"[2] was imposed for 1991. The cap was lowered to 20% for 1992 and 15% beginning in 1993. § 1395w-4(g)(2).
In 1990, New York passed Chapter 572. Under that Chapter, the limiting charge for physicians who balance bill federal Medicare beneficiaries was capped at 15% above the federal reasonable charge for 1991. In 1993 the cap will be reduced to 10%, and 5% if claims billed at or below the reasonable charge do not increase in 1992 by 5% from their 1989 level. Physicians who violate this provision are subject to fines following a hearing. First-time violators may be *1160 fined a maximum of $1,000, while subsequent violations within five years trigger a maximum fine of $5,000. In addition, the physician must refund to the beneficiary the excess money collected. Chapter 572, unlike the federal statute, has no requirement of willfulness or knowledge on the part of the violator. Compare with 42 U.S.C. § 1395w-4(g)(1).
At the same time that Congress was considering changes in the balance billing program, various states considered, and in several cases adopted, their own restrictions on balance billing. Massachusetts prohibited the practice altogether in 1985. Physicians who failed to comply with the new state law could not obtain or renew their Massachusetts medical license. 243 C.M.R. 2.07(15); Mass.G.L. c. 112, § 2. In addition, disciplinary action could be taken against violators. 243 C.M.R. 103(8), 1.05(5); Mass.G.L. c. 112, § 5 (1986 Supp.). The legislation prompted a legal challenge, but in Massachusetts Medical Society v. Dukakis, 815 F.2d 790 (1st Cir.1987), cert. denied 484 U.S. 896, 108 S.Ct. 229, 98 L.Ed.2d 188 (1987), the First Circuit upheld the state statute, ruling that it was not preempted by the Medicare Act.
In the years that followed, Congress enacted the amendments discussed above. After passage of the 1989 Amendments, Pennsylvania enacted its own law prohibiting balance billing. In Pennsylvania Medical Society v. Marconis, 755 F.Supp. 1305 (W.D.Pa.1991), the district court upheld the state statute against a challenge, on preemption grounds, by the Pennsylvania Medical Society. The Third Circuit affirmed. 942 F.2d 842 (3d. Cir.1991).
DISCUSSION
I. Preemption
The Supremacy Clause of the United States Constitution, Article IV, Cl. 2, lies at the heart of this case. It provides:
This Constitution, and the Laws of the United States which shall be made in pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.
The case at bar involves a law the Medicare Act that has been promulgated by the United States Congress. As its constitutionality has not been challenged, it is presumptively made "in pursuance" of the Constitution and is thus the "Supreme Law of the Land." What remains to be decided is whether Congress meant to permit the states to promulgate legislation in the same general area.
The initial inquiry is whether Chapter 572 addresses an area traditionally occupied by the states. This is an important preliminary determination because when Congress legislates in a field historically within the police power of the states, the party arguing preemption carries the heavy burden of showing that preemption was the "clear and manifest purpose of Congress." Pacific Gas & Electric v. State Energy Resources Comm'n, 461 U.S. 190, 206, 103 S.Ct. 1713, 1723, 75 L.Ed.2d 752 (1989) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947)); see also General Motors Corp. v. Abrams, 897 F.2d 34, 41-42 (2d Cir.1990) ("compelling evidence" of an intention to preempt must be shown where the area is traditionally regulated by the states). This arises from the related assumption that Congress does not normally intend to displace state law. Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 2129, 68 L.Ed.2d 576 (1981). See also Laurence H. Tribe, American Constitutional Law § 6-25, at 479-80 (2d ed. 1988) ("The question whether federal law preempts state action, cannot be reduced to general formulas, but there does appear to be an overriding reluctance to infer preemption in ambiguous cases. Such reluctance seems particularly appropriate in light of the Supreme Court's repeated emphasis on the central role of Congress in protecting the sovereignty of the states.").
Chapter 572 clearly involves a matter traditionally within the police powers of *1161 the state: the regulation of public health and the cost of medical care. Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 719, 105 S.Ct. 2371, 2378, 85 L.Ed.2d 714 (1985) ("the regulation of health and safety matters is primarily, and historically, a matter of local concern."); Great Atlantic and Pacific Tea Co. v. Cottrell, 424 U.S. 366, 371, 96 S.Ct. 923, 928, 47 L.Ed.2d 55 (1976); Rebaldo v. Cuomo, 749 F.2d 133, 138 (2d Cir. 1984), cert. denied, 472 U.S. 1008, 105 S.Ct. 2702, 86 L.Ed.2d 718 (1985); Pennsylvania Medical Society v. Marconis, 942 F.2d 842, 847 (3d Cir.1991) ("The licensing and regulation of physicians is a state function."). The balance billing regulations are designed to provide the elderly and disabled with a high level of health care at an affordable price. Despite the plaintiffs' arguments to the contrary, I see no reason to distinguish between the present case and the blood plasma regulation statutes at issue in Hillsborough.[3]
Accordingly Chapter 572 is presumptively valid. Plaintiffs must show that Congress had the "clear and manifest purpose" to displace it. The task at hand is to determine whether such a purpose existed.
The Supreme Court has observed that there are three ways in which Congress manifests an intent to preempt state law. See, e.g., Schneidewind v. ANR Pipeline, 485 U.S. 293, 300, 108 S.Ct. 1145, 1151, 99 L.Ed.2d 316 (1988); California Fed. Savings & Loan Ass'n v. Guerra, 479 U.S. 272, 280, 107 S.Ct. 683, 689, 93 L.Ed.2d 613 (1987). The first, "express preemption," occurs when Congress declares its intention to preempt state law by so stating. Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977). No such express provision appears here. The second, "implied preemption," occurs where Congress has impliedly precluded state regulation by "occupying the field" through the structure or objectives of federal law. Intent to supersede state law altogether may be found where the scheme of federal regulation "is sufficiently comprehensive to make reasonable the inference that Congress `left no room' for supplementary state regulation." Guerra, 479 U.S. at 280-81, 107 S.Ct. at 689. As a third alternative, in those areas where Congress has not completely displaced state regulation, federal law may nonetheless preempt state law to the extent that the one conflicts with the other. This is "conflict preemption." Such a conflict occurs either because "compliance with both federal and state regulations is a physical impossibility," or because the state law stands "as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Guerra, 479 U.S. at 281, 107 S.Ct. at 689 (quoting Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S.Ct. 1210, 1217-18, 10 L.Ed.2d 248 (1963) and Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941)).
A. Implied Preemption: Occupation of the Field
Because the Medicare Act itself does not explicitly deal with preemption, the parties seek to infer Congress' intent from the comprehensiveness of the Act. Plaintiffs argue that the federal regulation is so pervasive that Congress must have intended to preclude state supplementation. Defendants rely on the complexity of the legislation to draw the opposite conclusion: If Congress took the time and effort to draft such elaborate legislation, it surely would have included a clause denoting preemption if its intent was to preempt.
In attempting to demonstrate that Congress intended preemption, the plaintiffs offer two occupation-of-the-field arguments. The first looks to the scope of Congress' commitment to Medicare. Plaintiffs note the billions of dollars the federal *1162 government spends on Medicare and the program's "exclusively federal nature." In their second argument, the plaintiffs assert that Congress left no room for state legislation of balance billing when it enacted such an elaborate and pervasive Medicare statute. The intricate detail of the statute and its recent amendments, plaintiffs contend, reveal that Congress intended the fine tuning of billing procedures be performed by Congress not by the states.
While both of plaintiffs' arguments have surface appeal, neither is convincing. As the Third Circuit Court of Appeals observed in Marconis, Congress appropriates large sums of money to many programs without intending preemption. 942 F.2d at 850. For example, although Congress distributes large sums for highway construction, traffic regulations remain primarily state matters. Id.
Health care regulations have also been, as a matter of tradition, primarily state matters. The fact that Congress passed an elaborate law governing health care is not enough to uproot that tradition. Plaintiffs' effort to use the bill's complexity as a springboard to displacement is unconvincing. They must show a clear and manifest purpose to preempt; merely exploring the exact contours of the bill does not suffice. "[T]he subjects of modern social and regulatory legislation often by their very nature require intricate and complex responses from the Congress, but without Congress necessarily intending its enactment as the exclusive means of meeting the problem." Hillsborough County v. Automated Medical Labs, 471 U.S. 707, 715, 105 S.Ct. 2371, 2376, 85 L.Ed.2d 714 (1985). In the absence of an express provision indicating Congress' desire to preempt, I decline to let the breadth of the federal act strip the state of its power to legislate.
Such an outcome is further compelled by the Act's own language. To use the Act's scope and complexity as evidence of a Congress bent on extending federal power, as the plaintiffs seek to do, is to disregard the many instances where Congress has conveyed the very opposite intention. Congress repeatedly concedes state sovereignty on health issues in the text, enumerating "the practice of medicine," "the manner in which medical services are provided," "the compensation" of any provider, and "the administration or operation" of any health care provider as areas in which it does not purport to control or supervise. 42 U.S.C. § 1395. Accord, Massachusetts Medical Society v. Dukakis, supra, 815 F.2d at 791 ("The first section of the Medicare Act explicitly states the contrary intent to minimize federal intrusion into the [field of fee regulation of medical services for the elderly]"). The Act reveals Congress' intent not to preempt the role of the states in supplementing federal regulation, but rather an intent to preserve it.
In Marconis, both the district and circuit courts read meaning not only in what Congress said, but in what it did not say. The plaintiffs vehemently object to such an approach, noting the historical reluctance of courts to impute significance to silence. This caution is understandable. Attempting to find import in silence is frequently speculative.
But, as the Third Circuit noted in Marconis, this is an unusual situation with unambiguous Supreme Court precedent:
The appellants [Pennsylvania Medical Society] cannot overcome the fact that, at the time of the Medicare amendments in 1989, and since then, Congress was and has been undisputedly aware of the fact that at least four states had balance billing restriction statutes and that similar restrictions had been considered by some 18 states.... This information was included in the PPRC report submitted to Congress in 1989. But in the face of this information, Congress did not include a specific preemption provision in the 1989 amendments to Medicare, nor has it done so since. The Supreme Court in a precedent we are not free to disregard has noted that when Congress remains silent regarding the preemptive effect of its legislation on state laws it knows to be in existence at the time of such legislation's passing, Congress has failed to evince the requisite clear and manifest purpose to supersede *1163 those state laws. California Fed. Savings & Loan Ass'n v. Guerra, 479 U.S. at 287-88, 107 S.Ct. at 692-93. Furthermore, in this case the silence is particularly indicative of congressional intent, given the extraordinary oversight of the Medicare program as evidenced by the very existence of the PPRC with its annual reports to Congress and by the frequent amendment of the Medicare Act. Congress has simply not preempted state balance billing restrictions.
942 F.2d at 850.
Massachusetts prohibited balance billing in 1985 and its power to do so was upheld by the First Circuit in 1987. Massachusetts Medical Society v. Dukakis, supra. Yet Congress declined to preempt explicitly, even as it was further amending Medicare in subsequent years.
These facts make Congress' silence significant. Congress affirmatively considered the interaction of the state and federal laws on balance billing and failed to act. This silence strongly supports the inference that it did not intend to displace state regulation.
Defendants and amici urge this Court also to attach significance to a statement in the House Ways and Means Committee Report prepared before the Medicare Act was passed. If truly representative of Congress' intentions on preemption, the statement expressly underscores federal reluctance to preclude state regulation: "The Committee intends that nothing in this section would prejudice the right of any State to require assignment on Medicare claims as a condition of licensure in the State." H.R. Report No. 247, 101st Cong., 1st Sess. 1008 (1989), reprinted in 1989 U.S.Code & Cong.Admin.News 1906, 2479 (App. 164). Plaintiffs insist that this "snippet of legislative history" be given no weight at all. Because Congress never adopted the passage in the bill, and even the Committee Report was superseded by a Conference Report that did not incorporate the comment, they urge me to discount the statement completely.
Plaintiffs have the better of this argument. Despite the Circuit Court's opinion in Marconis, I decline to attribute value to a comment issued only at the beginning of the bill's long journey to final adoption. All that can be said about the comment is that it was not approved by the entire Congress. Justice Scalia has persuasively observed the pitfalls of relying on small bits of legislative history:
As anyone familiar with modern-day drafting of congressional committee reports is well aware, the references ... were inserted, at best by a committee staff member on his or her own initiative, and at worst by a committee staff member at the suggestion of a lawyer-lobbyist; and the purpose of those references was not primarily to inform the Members of Congress what the bill meant ... but rather to influence judicial construction....
Blanchard v. Bergeron, 489 U.S. 87, 98-99, 109 S.Ct. 939, 946-47, 103 L.Ed.2d 67 (1989) (concurring opinion).[4]
The Third Circuit in Marconis, however, was impressed by the uniqueness of the Committee passage. "[T]his is the only legislative statement of which we are aware clearly indicating congressional intent regarding preemption and it strongly indicates that preemption was not intended." 942 F.2d at 851. I do not agree. The statement may express preemption disapproval but, at least in my view, it does not express Congress' disapproval. Therefore, like the district court in Marconis, 755 F.Supp. at 1310 n. 1, I find the statement insignificant for the purposes of judicial construction.
Even without the support of the Committee statement, however, defendants have easily rebutted plaintiffs' arguments on implied preemption. Plaintiffs have not met the applicable legal standard: They have failed to show compelling evidence of a clear and manifest purpose by Congress to occupy the field of Medicare billing procedures. Therefore, Chapter 572 is not impliedly preempted by the Medicare Act.
*1164 B. Conflict Preemption: Obstacle to Federal Purpose
Conflict preemption requires a state law to be struck down if (1) it is impossible to comply with both the federal and state statutes, or (2) the state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Guerra, 479 U.S. at 281, 107 S.Ct. at 689. Because physicians can comply with both the New York and federal statutes, the first prong of conflict analysis is not applicable.
The case at bar implicates the second prong. The plaintiffs contend that the overriding purpose of Congress in its regulation of balance billing was to strike a careful and precise balance among competing objectives. The Medicare Act represents Congress' effort both to provide beneficiaries with medical services they can afford, and to allow access to physicians who charge higher fees commensurate with their experience and ability. The balance billing scheme is thus a kind of "safety valve."
Plaintiffs argue that Chapter 572 turns this safety valve tighter than Congress intended. By limiting the amount physicians can charge below the federal level, New York has upset the balance assigned by Congress. Plaintiffs assert that if Congress had believed tighter restrictions were necessary, it would have enacted such restrictions.
The flaw in this argument is the assumption that Congress' safety valve was meant to bind each and every state. Congress did, to be sure, strike a careful balance between affordability and access. Congress' "purposes and objectives" clearly included defining a mix for the nation that would prevent doctors from abandoning Medicare patients, while also containing costs.
But there is no evidence that the design of Congress encompassed national uniformity. As has already been discussed, Congress left room for the states to regulate physician costs. The fact that Chapter 572 does not precisely conform with the Medicare Act is not itself enough to warrant preemption.[5] As the district court stated in Marconis, "[w]hether it is wise to stop the federal government from closing all `safety valves' throughout the nation, is of course, an entirely different question from whether it is wise to prevent states from closing one safety valve where it would serve the local interest." 755 F.Supp. at 1312.
There is no reason to ascribe to Congress the desire to disturb New York's fee structure. Congress may have struck a delicate balance but, without more compelling evidence, I will not impose that balance upon the state of New York. Because Chapter 572 does not "stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," I reject plaintiffs' preemption challenge.
II. Due Process
Plaintiffs assert two Due Process claims. They argue (1) that Chapter 572 is void for vagueness and (2) that the absence of any requirement of scienter renders Chapter 572 unconstitutional.
A. Vagueness
In Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 2298, 33 L.Ed.2d 222 (1972), the Court held that "an enactment is void for vagueness if its prohibitions are not clearly defined." To render an enactment "vague," a court must ascertain whether or not the statute "gives the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly." Id.
When the statute in question is civil rather than criminal, the threshold required to make a finding of "vagueness" is a more stringent one. Village of Hoffman Estates, Inc. v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 499, 102 S.Ct. 1186, *1165 1193-94, 71 L.Ed.2d 362 (1982). To invalidate a civil statute, a reviewing court must find that "no standard of conduct is specified at all." Coates v. City of Cincinnati, 402 U.S. 611, 614, 91 S.Ct. 1686, 1688, 29 L.Ed.2d 214 (1971).
Chapter 572 surely specifies a standard of conduct: a fee in excess of "the reasonable charge for that service as determined by the United States secretary for health and human services." Medicare physicians have access to a report from the local Medicare carrier that details the "customary" and "prevailing" charges[6] for a given medical service. Mongiardo Aff. Ex. F. A physician of ordinary intelligence can then calculate the statutory cap on balance billing.
Even if special factors are present that require adjustment of the reasonable charge, this is the exceptional case. And when such an occasion arises, there is still a standard of conduct that is easily understood. A physician can obtain the new figure with little effort.
There is plainly no set of facts that could invalidate this law for vagueness. The standard is unambiguously set forth by Chapter 572 and is not "impermissibly vague in all of its applications." Hoffman Estates, 455 U.S. at 495, 102 S.Ct. at 1191. Plaintiffs' vagueness challenge is therefore rejected.
B. Scienter
The plaintiffs assert that Chapter 572 is unconstitutional due to the lack of a scienter requirement. The need to show that an individual has an "evil-meaning mind with an evil-doing hand," Morissette v. United States, 342 U.S. 246, 251, 72 S.Ct. 240, 244, 96 L.Ed. 288 (1952), is indeed a fundamental tenet of our judicial system.
Not all offenses, however, require scienter. It is not necessary if the case involves an offense against the state's authority and if (1) "The accused ... usually is in a position to prevent it with no more care than society might reasonably expect and no more exertion than it might reasonably expect from one who assumed his responsibilities," and (2) "penalties commonly are relatively small and conviction does no grave danger to an offender's reputation." Id. at 255-56, 72 S.Ct. at 246.
Chapter 572 meets these requirements. It is unquestionably a regulatory measure designed to achieve "some social betterment rather than the punishment of the crimes as in cases of mala in se." United States v. Balint, 258 U.S. 250, 252, 42 S.Ct. 301, 302, 66 L.Ed. 604 (1922). The law aims to provide quality medical care to the elderly and disabled, regardless of financial ability. Physicians can obtain the reasonable charge easily, and violation of the statute carries a relatively small penalty: a maximum fine of $5,000 for repeat offenders. Because the law does not run afoul of any scienter requirement, I reject plaintiffs' constitutional challenge.
CONCLUSION
For the reasons stated above, plaintiffs' motion for summary judgment is denied and defendants' cross-motion is granted.
The Clerk of Court is directed to dismiss the complaint with prejudice.
It is SO ORDERED.
NOTES
[1] "Pursuant to section 1395u(b), and the regulations promulgated thereunder, the reasonable charge is equal to the lowest of the following: (1) the actual charge billed by the physician; (2) the "prevailing charge" for similar services in the same locality, 42 C.F.R. § 405.504; and (3) the treating physician's `customary charge.' Id. § 405.503(a)." Cosgrove v. Bowen, 898 F.2d 332, 333 (2d Cir.1990).
[2] § 1395w-4(g)(2)(D) defines "recognized payment amount" for services rendered in 1991 as "the prevailing charge (or fee schedule amount) for nonparticipating physicians for that year." For services rendered after 1991 it is "the fee schedule amount determined under subsection (a) of this section". Id.
[3] Plaintiffs rely heavily on the Supreme Court's decision in Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 108 S.Ct. 1145 (1988), in which the Court held that a state statute regulating natural gas was preempted by federal law. Schneidewind is, however, distinguishable from the case at bar. The regulation of natural gas has a much firmer basis of Congressional power under the Constitution's Commerce Clause than does the regulation of public health and welfare. The latter lies historically within the state sphere.
[4] The majority opinion did not address the specific concerns raised by Justice Scalia.
[5] It is noteworthy that in the two circuit cases rejecting preemption, Massachusetts Medical Society and Marconis, the state statutes at issue completely prohibited balance billing. In the case at bar, the New York statute permits balance billing but at slightly lower levels than the Medicare Act.
[6] These are two components of the reasonable charge figure. The third is the actual charge, which the physician obviously knows. See supra note 1.
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280 Pa. Superior Ct. 155 (1980)
421 A.2d 452
COMMONWEALTH of Pennsylvania
v.
Earl TOWNSEND, Appellant.
Superior Court of Pennsylvania.
Submitted December 6, 1979.
Filed August 29, 1980.
*156 *157 John W. Packel, Chief, Appeals, Assistant Public Defender, Philadelphia, for appellant.
Eric B. Henson, Assistant District Attorney, Philadelphia, for Commonwealth, appellee.
Before BROSKY, WICKERSHAM and EAGEN, JJ.[*]
PER CURIAM:
Earl Townsend, appellant, was convicted in a non-jury trial in the Court of Common Pleas of Philadelphia of unauthorized use of an automobile, possession of an instrument of crime, robbery, and aggravated assault. Post-verdict motions were denied, and concurrent judgments of sentence of three to seven, one to two, and two and one-half to five years imprisonment were imposed. This appeal followed.
There is one assignment of error, namely, the court's permitting into evidence at trial the testimony of Josephine Brown who said she witnessed the crimes and identified Townsend as the guilty party. In pertinent part, the record discloses this.
Townsend filed a timely pre-trial motion to suppress Brown's testimony identifying Townsend, and a hearing on this motion was held on April 3, 1978. Brown testified to witnessing the crimes, to giving a description of the criminal to the police shortly thereafter, and to identifying Townsend *158 later in the police station. The hearing judge ruled the confrontation in the police station occurred under impermissibly suggestive circumstances and ordered Brown's testimony as to this suppressed. However, this judge refused to rule on the admissibility of any other testimony Brown might give in court identifying Townsend. The judge then recused himself from the case.
About two weeks later or on April 28, 1978, a second hearing was conducted before another judge to determine if any in-court testimony by Brown identifying Townsend should be suppressed. At the conclusion of this hearing, this judge refused to order suppression of Brown's in-court testimony. Brown was permitted to testify at trial, to describe the occurrence, and to identify Townsend as the perpetrator. The court concluded Brown's in-court identification had a source sufficiently independent of the police station confrontation and was not tainted thereby.
It was the Commonwealth's burden to establish by clear and convincing evidence that Brown's in-court identification testimony had a basis independent of the police station confrontation. Cf. Commonwealth v. Fowler, 466 Pa. 198, 352 A.2d 17 (1976). Since the suppression court ruled this was the case, in evaluating the correctness of this ruling, we consider only the Commonwealth's evidence and so much of the evidence presented by the defense as, fairly read in the context of the record as a whole, remains uncontradicted. Commonwealth v. Mitchell, 477 Pa. 274, 383 A.2d 930 (1978). In sum, the issue is this: was the evidence clear and convincing that Brown's in-court identification testimony stemmed from Brown's original observations of Townsend at the scene of the crime and was purged of any taint stemming from the primary illegality of the unduly suggestive confrontation.[1]Commonwealth v. Connolly, 478 *159 Pa. 117, 385 A.2d 1342 (1978). The factors to be considered in determining whether the in-court identification testimony was purged of any primary illegality are: (1) the prior opportunity to observe the criminal act; (2) any discrepancy between any pre-confrontation description and Townsend's actual appearance; (3) any identification of anyone other than Townsend; (4) any failure to identify Townsend; (5) the lapse of time between the criminal act and the confrontation; (6) Brown's degree of attention; and, (7) the degree of certainty in identifying Townsend. See Commonwealth v. Scott, 469 Pa. 258, 365 A.2d 140 (1976).
The evidence established the following:
On December 24, 1977 at approximately 10:30 a.m., Phillip Upshur, the victim, while parking his automobile in the driveway of his garage, was approached by Townsend who asked Upshur if he wished to buy any tools. When Upshur responded in the negative, Townsend struck him with a hacksaw and knocked him to the ground. Townsend then entered Upshur's automobile and started to back it out of the driveway.
As Townsend was backing the vehicle out of the driveway into an alley and then onto a nearby street, Brown was passing by and heard Upshur scream for help. She observed Townsend for approximately 15 to 20 seconds in the automobile as he was backing out of the driveway. During most of this period, Brown observed the back of Townsend's head but did view his face for a matter of seconds from a very short distance.[2]
On the day of the crimes, Brown described Townsend to police as dark-skinned with a mustache, wearing a ring in his left ear and a blue ski jacket.[3]
*160 During the next morning, Brown went to the police station where she observed Townsend talking to an officer in a detectives' room and immediately identified him.[4] This identification was made without any suggestion or prompting from police.
On January 24, 1979, Brown again identified Townsend at a preliminary hearing. Further, during the suppression hearing of April 3, 1978, Townsend was not seated next to his attorney when Brown identified him. The court allowed Townsend to be seated among the spectators to avoid any misidentification because previously the victim had identified someone other than Townsend as his attacker. While testifying, Brown made an immediate, unhesitating, and certain identification[5] of Townsend when asked to do so.[6]
Considering the foregoing, we conclude the Commonwealth met its burden of proof and the court did not err in ruling the in-court identification testimony was admissible. While Brown's description of Townsend to the police immediately following the occurrence was general, it was not contrary to Townsend's appearance. Brown never identified anyone other than Townsend and never failed to identify *161 him. The lapse of time between the criminal act and the confrontation at the police station was only one day. Brown's attention during the crimes was clearly drawn to the events by Upshur's scream, and each of her identifications of Townsend was certain. In particular, the suppression court found her identification at the identification procedure conducted at the suppression hearing to be immediate, unhesitating, and certain. Finally, while she observed Townsend for only a matter of seconds, she did so in daylight from a short distance and with a full view of his face without obstruction.
While the time period during which Brown viewed Townsend's face is shorter than in many cases wherein an independent basis for an in-court identification has been found, compare Commonwealth v. Connolly, supra (fifteen minutes) and Commonwealth v. Cox, 466 Pa. 582, 353 A.2d 844 (1976) (three to five minutes) with Commonwealth v. Holland, 480 Pa. 202, 389 A.2d 1026 (1978) (independent basis found despite only a momentary facial view), Brown's observation of Townsend was particularly attentive because of Upshur's scream and was unobstructed. Compare Commonwealth v. Taylor, 472 Pa. 1, 370 A.2d 1197 (1977) (view of accused obstructed). Accordingly, we cannot say the court erred in denying the motion to suppress the in-court identification testimony. See Commonwealth v. Holland, supra (independent basis found where accused walked by witness despite witness' failure to identify accused at a preliminary hearing).
Judgments of sentence affirmed.
NOTES
[*] Chief Justice MICHAEL J. EAGEN of the Supreme Court of Pennsylvania, is sitting by designation.
[1] We need not consider whether the Commonwealth, which did not appeal the suppression order regarding the confrontation at the police station, may now argue the confrontation was not unduly suggestive because, assuming it was unduly suggestive, we have determined the in-court identification testimony was properly admitted into evidence.
[2] The testimony at the second suppression hearing established Brown viewed Townsend's face from a distance of one inch. At trial, the distance was established as about five to ten feet.
[3] At trial, Brown indicated she had also described Townsend as between 19 and 20 years of age.
[4] Brown was mistakenly taken into the detectives' room, rather than to a waiting room. This identification was suppressed.
[5] The suppression court noted that most of the approximately thirty persons in the courtroom would clearly have to be excluded when considering the accuracy of this identification because of their apparent official status or female sex, but that there was a sprinkling of black males in the courtroom when Brown identified Townsend. The court also noted that of the black males present none were "particularly similar to the defendant."
[6] Townsend's brief suggests we should consider only the evidence presented at the April 28, 1978 hearing to resolve the issue presented, and not the evidence presented at the April 3, 1978 suppression hearing or at trial. No argument to support disregarding the suppression hearing evidence is made, and our recount of the evidence, unless otherwise noted, is derived from both suppression hearings. We need not reach the trial evidence because, even limiting our consideration to the evidence at the suppression hearings, we are satisfied the court did not err in permitting Brown's in-court identification testimony.
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491 Pa. 354 (1980)
421 A.2d 174
QUEEN CITY ELECTRICAL SUPPLY CO., INC., Appellant,
v.
SOLTIS ELECTRIC CO., INC., Defendant,
and
The Cement National Bank, Appellee.
Supreme Court of Pennsylvania.
Argued April 21, 1980.
Decided September 22, 1980.
*355 Robert M. Davison, Bethlehem, for appellant.
Howard E. Snyder, Allentown, for appellee Soltis Electric Co., Inc.
*356 Irving W. Coleman, Allentown, for appellee The Cement Nat. Bank.
Before EAGEN, C.J., and O'BRIEN, ROBERTS, NIX, LARSEN, FLAHERTY and KAUFFMAN, JJ.
OPINION BY THE COURT
KAUFFMAN, Justice.
This appeal is from an order of the Superior Court reversing the Court of Common Pleas of Lehigh County and opening a default judgment entered against a garnishee.[1] The issue here presented is whether a court should open a snap default judgment entered without notice against a garnishee one day after the time allowed for filing answers to interrogatories had expired where (1) the garnishee is a stranger to the underlying transaction, (2) the default was excusable, (3) the answers to interrogatories were filed one day after the default judgment was taken, (4) the garnishor would reap a windfall in excess of $20,000.00, and (5) although the petition to open was not filed for twenty months, the garnishor sustained no prejudice from the delay.
On July 15, 1974, appellant, Queen City Electrical Supply Co., Inc. ("Queen City" or "garnishor"), obtained a judgment by confession in an assumpsit action against defendant, Soltis Electric Co., Inc. ("Soltis"), in the sum of $24,759.17.[2] Queen City sought to execute upon the judgment by garnishing an account Soltis maintained with appellee, The Cement National Bank ("the bank"). A praecipe for writ of attachment execution and interrogatories were filed by Queen City on August 9, 1974 and served on the bank on August 12, 1974.
On August 15, 1974, the bank sent the interrogatories to its attorney, Jerome W. Burkepile, Esquire ("Burkepile"), *357 along with all information necessary to prepare answers. The completed answers, which revealed that Soltis' account contained $1,762.56, were delivered to the bank on August 21, 1974, and were promptly executed and returned to Burkepile the same day.[3]
Burkepile, who was in poor health and working only part time, failed to file the promptly completed answers within the twenty day period required by Rule 3144(b) of the Pennsylvania Rules of Civil Procedure. At 9:51 a.m. on September 4, 1974, the first day after service of the answers was due, Queen City, without any notice, entered a snap default judgment against the bank in the amount of $24,759.17.[4] Later that day, Queen City's counsel, Howard S. Epstein, Esquire ("Epstein"), notified the bank that the default judgment had been taken. The bank's answers, showing that Soltis' account contained only $1,762.56, were filed the very next day.[5]
To further complicate matters, Soltis was adjudicated a bankrupt on the same day that the bank's answers to the interrogatories were filed. An associate of Epstein's law firm, Howard E. Snyder, Esquire ("Snyder"), was appointed trustee in bankruptcy for Soltis at the first meeting of *358 creditors on November 14, 1976.[6] Despite the fact that his law firm also represented garnishor, Snyder, on behalf of the bankruptcy estate, directed a letter to the bank requesting payment of the balance of the Soltis account.
Uncertain as to whom it owed the money in view of the conflicting demands of the garnishor and the bankruptcy estate,[7] the bank consulted the attorney who had assumed responsibility for Burkepile's unfinished legal business, William A. Steckel, Esquire ("Steckel"). On January 16, 1975, Steckel advised the bank that the bankruptcy estate was entitled to the Soltis account. He further advised, however, that such payment would not affect the default judgment. With respect to that judgment, Steckel wrote:
Several courses are open to the Bank at this time. The first would be a Petition to open the judgment against the Bank on the grounds that the payment, if it had been made, would have been a preferential one voidable by the subsequently appointed Trustee in Bankruptcy. This, however, requires positive action and with attendant publicity on the part of the Bank. The second course would be to do nothing since Attorney Epstein has assured me he will contact me before moving in the matter, if he, in fact, will move at all. I believe this course would be advisable at the moment, since the interpretation of Rule 3148(b), providing for execution "generally" on the judgment, in my opinion permits such execution only to the extent of the amount of the deposit and not to the entire amount of the judgment. It is the interpretation of this Rule that presently is delaying any action on the part of Attorney Epstein.
On January 17, 1975, in accordance with Steckel's advice, the bank paid the proceeds of the Soltis account to the trustee in bankruptcy, but took no further action with respect to the default judgment.
*359 By letter dated January 21, 1975, Epstein advised Steckel that he believed that Queen City had a valid judgment under Rule 3148(b) of the Pennsylvania Rules of Civil Procedure against the bank for the full amount of its judgment against Soltis, i.e., $24,759.17, but that he was willing to negotiate. Steckel failed to communicate Epstein's position to the bank until May 18, 1976, following receipt of a letter dated May 7, 1976, in which Epstein for the first time in twenty months threatened execution if the judgment was not paid. At that time, Steckel informed the bank that his representation of the Burkepile estate possibly conflicted with his continued representation of the bank, and new counsel was immediately retained for the bank.
When it became clear for the first time in May of 1976 that Epstein intended to execute on the snap default judgment he obtained 20 months earlier and attempt to collect not only the $1,762.56 which had been in the Soltis account, but also a windfall in excess of $20,000.00, the bank's new counsel promptly filed a petition to open the default judgment. By order dated April 27, 1977, the Court of Common Pleas of Lehigh County dismissed the petition on the ground that the bank's failure to act until June 1976 was "inexcusable and of such duration as to recommend the permanency of plaintiff's [Queen City's] judgment." Queen City Electrical Supply Co. v. Soltis Electric Co., 37 Lehigh L.J. 225 (1977).
The Superior Court reversed the order of the Court of Common Pleas and opened the judgment. We agree that the trial court's refusal to open the judgment was a manifest abuse of discretion because (1) the bank's excusable default was cured without prejudice to garnishor only one day after the snap judgment, which was entered by Epstein without notice at 9:51 a.m. of the first day after the interrogatory answers were due; (2) the bank as garnishee was an innocent stranger to the underlying controversy between garnishor and Soltis, and held only $1,726.56 in the Soltis account; (3) there was considerable legal confusion regarding the respective rights of the parties following the *360 bankruptcy of Soltis and payment by the bank of the Soltis account to Epstein's associate, the bankruptcy trustee; (4) garnishor permitted twenty months to elapse before making any attempt to execute on the judgment; (5) the bank moved promptly through new counsel to open the judgment upon first receipt of notice that garnishor seriously intended to execute for the full $24,759.17; (6) dismissal of the bank's petition would result in a windfall to garnishor in excess of $20,000.00; and (7) garnishor was not prejudiced by the bank's delay in moving to open the judgment.
In making the determination whether to open a default judgment, three factors usually are considered: (1) whether the default was excusable; (2) whether the party seeking to open the judgment has shown a meritorious defense, and (3) whether the petition to open has been promptly filed. In re McCauley's Estate, 478 Pa. 83, 88, 385 A.2d 1324, 1327 (1978); Broad Mountain Club, Inc. v. Lazur, 461 Pa. 668, 669, 337 A.2d 599, cert. denied, 423 U.S. 1020, 96 S.Ct. 458, 46 L.Ed.2d 392 (1975); Ruszynski v. Jesray Construction Corp., 457 Pa. 510, 512, 326 A.2d 326, 328 (1974); McCoy v. Public Acceptance Corp., 451 Pa. 495, 498, 305 A.2d 698, 700 (1973); Balk v. Ford Motor Co., 446 Pa. 137, 140, 285 A.2d 128, 130-31 (1971). In light of Burkepile's illness and the diligence which the bank showed (1) in promptly forwarding the interrogatories and the information necessary to answer them to Burkepile, (2) promptly executing the answers prepared by Burkepile and returning them to him, and (3) promptly notifying Burkepile of the entry of the default judgment, no serious contention can be made that Burkepile's two-day delay in filing the answers was an inexcusable default on the part of the bank. See Zehr v. March, 407 Pa. 471, 181 A.2d 428 (1962); Brooks v. Surman Dental Lab, Inc., 262 Pa.Super. 369, 396 A.2d 799 (1979). See also Stephens v. Bartholomew, 422 Pa. 311, 220 A.2d 617 (1966); St. Joe Paper Co. v. Morc Box Co., 260 Pa.Super. 515, 394 A.2d 1045 (1979). Further, there is no dispute that the total amount held by the bank in the Soltis account at the time of the garnishment was $1,762.56. Thus, the bank had *361 an obviously meritorious defense to a claim by the garnishor for $24,759.17.
The sole remaining issue, then, is whether the petition to open was promptly filed. This is always an equitable determination which must be made in light of what is reasonable under the circumstances. Indeed, it is well established that where equitable circumstances exist, a default judgment may be opened regardless of the time that may have elapsed between entry of the judgment and filing of the petition to open. See Baranofski v. Malone, 371 Pa. 479, 482, 91 A.2d 908, 909 (1952).
At the outset, we note that snap judgments taken without notice are strongly disfavored by the courts.[8] As this court stated in Kraynick v. Hertz, 443 Pa. 105, 277 A.2d 144 (1971):
The true purpose of the entry of a default is to speed the cause thereby preventing a dilatory or procrastinating defendant from impeding the plaintiff in the establishment of his claim. It is not [a] procedure intended to furnish an advantage to the plaintiff so that a defense may be defeated or a judgment reached without the difficulty that arises from a contest by the defendant.
Id., 443 Pa. at 111, 277 A.2d at 147. See also Safeguard Investment Co. v. Energy Services Associates, Inc., 258 Pa.Super. 512, 515-16, 393 A.2d 476, 477-78 (1978); Ashton v. Ashton, 257 Pa.Super. 134, 138-40, 390 A.2d 282, 285 (1978); Silverman v. Polis, 230 Pa.Super. 366, 370-71, 326 A.2d 452, 454-55 (1974).
We also note that the courts of this Commonwealth, in recognition of the potential for injustice from requiring a stranger to the underlying controversy to pay a claim for which he had no original responsibility, have expressed a greater willingness to relieve a defaulting garnishee than a defaulting defendant. See, e.g., Globe and Republic Insurance *362 Co. v. Davis, 125 Pa.Super. 91, 95-96, 190 A. 175, 177 (1937); Modern Home Heating Co. v. Diehl, 92 Pa.Super. 571, 574 (1927); McFadden v. Millerstown Deposit Bank, 28 Pa.Super. 583, 584-85 (1903); Potts v. Harmer, 19 Pa.Super. 252, 254 (1902); Goodfriend v. Diamond Chemical Co., 25 D. & C.2d 321, 324, aff'd per curiam, 196 Pa.Super. 319, 175 A.2d 537 (1961).
Here, the delay in filing the petition to open resulted substantially from the legal confusion produced by the conflicting demands made upon the bank by the garnishor and the trustee in bankruptcy.[9] Contributing to this confusion in no small part was the dual role played by the law firm representing the garnishor.[10] Pursuant to advice of counsel, the bank delivered the total balance of the Soltis account to the trustee in bankruptcy and took no affirmative action to open the default judgment. Garnishor's attorney did not threaten execution for the full $24,759.17 until May 7, 1976, and made no effort to enforce the judgment. We conclude that the bank's failure to file its petition to open the default judgment until June 15, 1976 was reasonable under the circumstances.
Accordingly, the trial court's dismissal of the bank's petition to open was a manifest abuse of discretion.
Order affirmed.
ROBERTS, J., filed a dissenting opinion in which LARSEN, J., joins.
ROBERTS, Justice, dissenting.
I dissent. I would not permit the judgment to be opened to its full extent of $24,759.17. This record reflects an uncontested, valid judgment against appellee-garnishee in the sum of $1,762.56. Thus, unlike the majority, I would not *363 permit appellee-garnishee to open this portion. As to the remainder of the judgment, this record reveals an inordinate delay on the part of appellee-garnishee in seeking to open judgment. I am satisfied, however, that appellant-judgment creditor suffered no prejudice as a result. See e.g., Vallish v. Rapoport, 364 Pa. 25, 70 A.2d 616 (1950); Joseph Melnick Bldg. & Loan Ass'n. v. Melnick, 361 Pa. 328, 64 A.2d 773 (1949); 7 Std.Pa.Prac. Ch. 30 (Relief From Judgments), § 79 at p. 102. Accordingly, I would permit the remainder of the judgment to be opened, in the sum of $22,996.61.
LARSEN, J., joins in this dissenting opinion.
NOTES
[1] Jurisdiction is vested in this Court pursuant to the Judicial Code, Act of July 9, 1976, P.L. 586, No. 142, § 2, 42 Pa.C.S.A. § 724(a) (Pamph. 1979).
[2] The judgment was based upon a note executed by Soltis in favor of Queen City in the amount of $21,351.78 plus interest and costs.
[3] A copy of the executed answers simultaneously was sent by the bank directly to Soltis.
[4] The default judgment was entered pursuant to Rule 3146(a) of the Pennsylvania Rules of Civil Procedure, which provides:
If the garnishee within the time allowed by these rules fails to file an answer to interrogatories containing a notice to answer, the prothonotary on praecipe of the plaintiff shall enter judgment in favor of the plaintiff and against the garnishee in the same amount as the judgment of the plaintiff against the defendant, together with interest and costs.
Pa.R.Civ.P. 3146(a) (emphasis supplied). We note that the Pennsylvania Rules of Civil Procedure now require prior notice of intent to enter a default judgment except in two limited instances. See Pa.R. Civ.P. 237.1.
[5] This case should not be confused with those in which defaults were permitted to remain uncured until the tardy petitions to open were filed. See, e.g., In re McCauley's Estate, 478 Pa. 83, 385 A.2d 1324 (1978); Myers v. Mooney Aircraft, Inc., 429 Pa. 177, 240 A.2d 505 (1967).
[6] Burkepile, whose poor health had permitted him to work only part time since the summer of 1974, was hospitalized on October 11, 1974 and died on November 8, 1974.
[7] While Epstein represented the garnishor, his associate, Snyder, was trustee in bankruptcy for Soltis.
[8] In fact, Rule 237.1 of the Pennsylvania Rules of Civil Procedure, adopted by this Court on December 14, 1979 and made effective on February 1, 1980, requires prior notice of intent to enter a default judgment in cases such as that presented herein. See note 4 supra.
[9] It should be emphasized that there was no delay in curing the excusable default. The bank's answers to interrogatories were filed the very next day after the default judgment was entered without any notice whatsoever.
[10] See note 7 supra.
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777 F.Supp. 1229 (1991)
UNITED STATES of America
v.
James A. BORDINARO.
Crim. No. 91-84-01.
United States District Court, E.D. Pennsylvania.
November 4, 1991.
*1230 *1231 Timothy P. Crowley and John P. Yatsko, Trial Attys., Antitrust Div., Philadelphia, Pa., for plaintiff.
William H. Kettlewell, Dwyer Collora & Gertner, Boston, Mass., for defendant.
OPINION
VAN ANTWERPEN, District Judge.
On October 11, 1991, in Easton Pennsylvania, this court, sentenced the defendant James A. Bordinaro to twelve months imprisonment and imposed a fine of $55,000 based on a two-count guilty plea. After reviewing the presentence report, counsel's memoranda, and all arguments presented at the sentencing hearing, the court made specific findings on the record and imposed sentence pursuant to the federal sentencing guidelines. To ensure that the defendant's rights are fully protected, we issue this opinion.
FACTUAL BACKGROUND
On March 4, 1991, the defendant James A. Bordinaro was named in a two-count information filed in the Eastern District of Pennsylvania. Count I charges Bordinaro with conspiring to rig bids on frozen seafood contracts awarded by the Defense Personnel Support Center (DPSC) between 1981 and September 1989 in violation of the Sherman Act (15 U.S.C. § 1 et seq.). Count II charges Bordinaro with conspiring to submit false statements to the DPSC concerning the origin of the fish used to fulfill DPSC contracts during the period of May 1986 to September 1989 in violation of 18 U.S.C. §§ 371 and 1001.
a. The Antitrust Conspiracy.
The DPSC, located in Philadelphia, Pennsylvania, is one of six purchasing centers operated by the United States Department of Defense (DOD). The DPSC is responsible, inter alia, for purchasing frozen seafood products, the subjects of this information. Regulations require that each bidder certify that its bids are independently determined and not the product of consultation, communication, or agreement with any other bidder.
In 1981, the defendant, James A. Bordinaro of Empire Fish Company (Empire), and one of his co-conspirators, Francis J. O'Hara of F.J. O'Hara and Sons, Inc., began discussing and fixing DPSC bids with other fish processors.[1] Each week, Bordinaro and O'Hara conferred by telephone. The two men would agree which company would be the designated low bidder and what the low bid would be. The companies would then submit bids to DPSC on their designated items at the set prices and would submit complementary bids, that is, intentionally high and unsuccessful bids, on those items allotted to other co-conspirators. This intra-company conspiracy continued until September 1989.
b. Conspiracy to Submit False Statements.
During the period covered by the information, DPSC required that all seafood sold to the DOD be of United States origin. This meant that the seafood must have been caught by a United States fishing vessel, landed in a United States port, and processed in a plant in the United States.
In the early 1980's fish producers found it increasingly difficult to supply DPSC with American-landed fish. Fish stocks were dwindling, and a 1984 World Court decision allocated better fishing grounds to Canada. As a result in early 1986, Empire began to fill their DPSC contracts with Canadian-landed fish. Bordinaro conspired with others at Empire to conceal this wrongdoing by falsely certifying to DPSC that the fish was American-landed. Bordinaro acted independently from certain other bid rigging co-conspirators who also supplied *1232 Canadian origin fish to DPSC. This internal company conspiracy continued until September 1989.
c. The Information and Sentencing.
On April 12, 1991, Bordinaro appeared before this Court and pursuant to a written plea agreement entered pleas of guilty to both counts of the Information. At that time, the court ordered that a presentence report be completed, and on August 21, 1991, Bordinaro set forth seven objections to the report. On October 11, 1991, this court heard oral argument on these objections and imposed sentence. Defendant's objections to the presentence report are the subject of this memorandum.
DISCUSSION
The defendant James A. Bordinaro raises seven objections to the presentence report. First, the defendant argues that his antitrust and false statement offenses are "closely-related" and should be grouped together for sentencing, pursuant to § 3D1.2. Second, the defendant argues that under the guidelines for antitrust offenses, he should be subject to a fine ranging from $20,000 to $250,000 rather than a fixed fine of $250,000 as set forth in the presentence report. Finally, the defendant raises five objections to the facts presented in the presentence report. As discussed below, we find no merit to these objections.
1. Considering Multiple Counts.
The defendant has pled guilty to both counts of the information against him. In the case of multiple offenses, the court shall first determine whether any of the offenses should be grouped together as "closely-related counts." § 3D1.2. Where the court determines that a group of counts are "closely-related," the defendant's offense level will be the offense level applicable to the count with the highest offense level in the group. § 3D1.3; see United States v. Cusumano, 943 F.2d 305, 312 (3d Cir.1991). Alternatively, where the court determines that a group of counts are not "closely-related," the defendant's offense level will be the offense level applicable to the count with the highest offense level, increased by varying levels for each additional offense, according to an enhancement table. § 3D1.4.
Counts are "closely-related" where the offenses involve "substantially the same harm." § 3D1.2. Section 3D1.2 provides in pertinent part:
All counts involving substantially the same harm shall be grouped together into a single Group.... Counts involve substantially the same harm within the meaning of this rule:
(a) When counts involve the same victim and the same act or transaction.
(b) When counts involve the same victim and two or more acts or transactions connected by a common criminal objective or constituting part of a common scheme or plan....
(c) When one of the counts embodies conduct that is treated as a specific offense characteristic in, or other adjustment to, the guideline applicable to another of the counts.
(d) Counts are grouped together if the offense level is determined largely on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature and the offense guideline is written to cover such behavior.
Offenses covered by the following guidelines are specifically included under this subsection:
... 2F1.1; ... 2R1.1; ....
The offenses involved in this case, conspiring to submit non-competitive bids in violation of the antitrust laws and conspiring to make false statements to a federal agency, arise from separate transactions which cannot be grouped under § 3D1.2(a); nor does this case present a situation in which one of the counts embodies conduct that is the basis for a sentence enhancement as called for under § 3D1.2(c). Thus, our inquiry narrows to whether the offenses should be grouped under either subsection (b) or (d) of § 3D1.2.
*1233 a. Section 3D1.2(b).
Pursuant to § 3D1.2(b), counts involving "the same victim and two or more ... transactions connected by a common criminal objective or ... a common scheme or plan" should be grouped together. § 3D1.2(b) (emphasis added). The defendant argues that the antitrust charges and the false statement charges involved the same victim the DPSC and a common criminal objective maximizing sales and profits for frozen fish products. We reject these arguments.
The defendant's offenses did not involve the same victim as required by § 3D1.2(b). The victim of an offense is the "one person who is directly and most seriously affected by the offense...." § 3D1.2, application note 2. The defendant argues that the DPSC was, as the government agency who received non-competitive bids and false statements, the "person ... most seriously affected" by these offenses. We disagree.
The question of who has been "most seriously affected" by an offense cannot be divorced from the interest invaded by an offense. All parties agree that the victim in the antitrust offense is the DPSC, acting on its own behalf as a market participant, since the conspiracy to rig bids deprived the agency of competitive bids, thereby increasing agency costs. In contrast, we found at sentencing that American fisherman and American fish processors were the victims[2] of the defendant's conspiracy to submit false statements.[3] Title 18 U.S.C. § 1001, prohibiting the submission of false statements to a government agency, was not designed to protect the DPSC from inferior quality fish, but was intended to ensure that DOD regulations, enacted for the benefit of society, would be implemented without interference. In this case, 18 U.S.C. § 1001 ensures that taxpayer funds ear-marked for American fisherman and American fish processors, i.e. the American economy, are not diverted to Canada. Accordingly, we find that since the defendant's offenses did not involve the same victim, § 3D1.2(b) is inapplicable.
Similarly, we find that the defendant's offenses are not "connected" by a common criminal objective, plan or scheme. While we do not doubt that both conspiracies were designed to maximize the defendant's sales and profits, the defendant failed to present any evidence that the conspiracies were connected or that he conspired to submit false statements to the DPSC in furtherance of the bid rigging conspiracy. Rather, all evidence suggests that the defendant's offenses were independent and distinct instances of criminal behavior involving different harms.
The antitrust conspiracy, from early 1981 until September 1989, was formed as part of a concerted action among a group of seafood processors to rig bids submitted to DPSC, in hopes of inflating market prices and increasing the industry's profits. In contrast, the conspiracy to submit false statements, from May 1986 until September 1989, was formed among Empire's employees in order to circumvent regulations *1234 requiring that all DOD contracts be filled with fish of domestic origin, in hopes of increasing Empire's profits. There is no evidence that the conspiracies were anything but independent.[4] Each conspiracy evidences a separate culpable harm not proven to be part of a single ongoing plan of misconduct, and therefore, we have two separate, rather than "substantially similar," harms. Accordingly, we find that it would be inappropriate to group the defendant's offenses pursuant to § 3D1.2(b).[5]
b. Section 3D1.2(d).
The defendant argues that, since the fraud and antitrust provisions, §§ 2F1.1 and 2R1.1 respectively, are singled out in a list of offenses which are specifically susceptible to grouping, the plain meaning of § 3D1.2(d) requires that this court group the defendant's offenses. We disagree. While subsection (d) may provide a list of those offenses which are appropriate for grouping, the language of this subsection is precatory and not mandatory. United States v. Ballard, 919 F.2d 255, 257 (5th Cir.), cert. denied, ___ U.S. ___, 111 S.Ct. 1429, 113 L.Ed.2d 481 (1991); United States v. Egson, 897 F.2d 353, 354 (8th Cir.1990); United States v. Pope, 871 F.2d 506, 510 n. 4 (5th Cir.1989) (each refusing to group offenses specifically enumerated in § 3D1.2(d)). Any grouping decision requires careful analysis of all the facts and circumstances.
Subsection (d) requires more than similar offense level calculations and more than ongoing or continuous offense behavior; there must be some link between defendant's offenses before grouping is appropriate. United States v. Manuel, 912 F.2d 204, 206-207 (8th Cir.1990). Having found, above in our discussion of § 3D1.2(b), that the defendant's fraud and antitrust violations do not even satisfy the primary requirement of § 3D1.2 that they involve "substantially the same harm," we cannot now group these offenses under subsection (d).[6]Ballard, 919 F.2d at 257.
c. Computing Defendant's Combined Offense Level.
Having found that it would be inappropriate to group the defendant's offenses under § 3D1.2, we must combine the defendant's offense levels pursuant to § 3D1.2. Section 3D1.4 directs that two (2) points be added to the count with the highest offense *1235 level, resulting in this case in a combined offense level of thirteen (13).[7] Given the defendant's acceptance of responsibility, the offense level is adjusted downward two (2) levels, leaving a final offense level of eleven (11). § 3E1.1.
Having considered the history, character, and condition of the defendant as well as all potentially mitigating factors presented at the sentencing hearing,[8] we sentenced the defendant to twelve (12) months imprisonment, within a guideline range of eight (8) to fourteen (14) months.
While we recognize that the defendant has made significant amends for his offenses and has an exemplary reputation in the community, he was never-the-less the architect, along with Frank O'Hara, of a highly successful conspiracy to rig bids to the DPSC that lasted over eight years. The defendant was equally successful orchestrating a conspiracy to submit false statements to the Government. In an effort to make money at the expense of others, the defendant endangered the jobs of hundreds of employees, absconded tax-payer dollars, and endangered the already failing New England Economy. For these reasons, we find a split sentence of incarceration and home detention to be inappropriate, and we sentence the defendant to twelve (12) months imprisonment.[9]
2. Computation of Appropriate Fine.
The defendant submits that the appropriate fine range for an antitrust offense is $20,000 to $250,000 as set forth in the text of 2R1.1(c).[10] We disagree. The parties have agreed that Empire's volume of commerce for the antitrust conspiracy was $15 million. Therefore, under the guidelines, the defendant faced a fine range of $600,000 to $1,500,000, that is, four to ten percent of the affected volume of commerce. Since a guideline range will only begin at $20,000 if four percent of the volume of commerce falls below this minimum, the $20,000 minimum is inapplicable to the defendant.
Since the maximum statutory fine for an individual under 15 U.S.C. § 1 is $350,000 and since no guideline fine can exceed the statutory maximum, we find that the appropriate fine range for the defendant's antitrust violation is $350,000. The defendant does not dispute that the appropriate fine range for the false statement offense is $500 to $5,000. § 5E1.2.
Having reviewed the defendant's financial condition and ability to pay, we imposed a fine of $50,000 on Count I and a fine of $5,000 on Count II.
*1236 3. Factual Objections.
The defendant raised five objections to the facts presented in the presentence report. Addendum to Presentence Report. These factual disputes have absolutely no bearing on our sentencing decision. Even if these five objections, concerning the identity and depth of participation of various co-conspirators (Nos. 2, 3), the alleged altruistic purpose of the conspiracy (No. 4), the exact length of the "breakdown" periods (No. 5), and the exact termination date of the conspiracy (No. 6), are warranted, they are irrelevant in the grand scheme of a highly successful bid rigging scheme that spanned a period of eight years.
There is no dispute that the conspiracy continued past November 1987, the effective date of the guidelines. There is no dispute as to the defendant's paramount role in the conspiracy nor as to the amount of commerce affected. And however altruistic the defendant's goals may have been, the law is the law. Accordingly, we find no material facts of the presentence report to be in dispute.
CONCLUSION
Having reviewed the presentence report, each party's sentencing memoranda, and counsels' arguments, we find that (1) it is inappropriate to group the defendant's antitrust and fraud offenses pursuant to § 3D1.2; (2) under the guidelines, $250,000 is the appropriate fine for the defendant's antitrust violation; and (3) the defendant's factual objections are not material to our sentencing decision.
NOTES
[1] The following companies were involved with the bid rigging conspiracy at various times: Empire Fish Company, F.J. O'Hara and Sons, Inc., Ocean Crest Seafood, Inc., Channel Fish Co., Channel Fish Processing Co., Inc., Maine Fisheries, Tichon Seafood Corporation, Inc., Cozy Harbor Seafood, Inc., Anthony Parco, Edward McCollum, Jr., Leonard Parco, Roy Zaffiro, John Zaffiro, Sebastian Milano, Roy Silvestro, David Bergson, David Harmon, Daniel Tichon, and John Norton, Jr.
[2] In many ways, a false statement offense is a "victimless" crime, a crime for which "society at large is the victim." § 3D1.2, application note 2. Submitting false statements to the government, in an effort to circumvent a regulation promulgated for the benefit of society at large, is akin to the victimless crimes of obstructing justice, stealing government documents, or illegally procuring food stamps. See e.g. United States v. Egson, 897 F.2d 353, 354 n. 2 (8th Cir.1990); United States v. Berkowitz, 712 F.Supp. 707, 710 (N.D.Ill.1989), rev'd on other grounds, 927 F.2d 1376 (7th Cir.1991). The victim for purposes of a victimless crime is "the societal interest that [has been] harmed." § 3D1.2, application note 2.
[3] Even if we were to agree with the defendant that the DPSC was the victim of the false statement offense, the result would be the same. Circuits have held that, where the "victim" appears to be the United States, as represented by an agency, the victim is defined by the governmental interest which has been violated. United States v. Reyes, 908 F.2d 281, 289 (8th Cir.), cert. denied, ___ U.S. ___, 111 S.Ct. 1111, 113 L.Ed.2d 220 (1991); United States v. Kim, 896 F.2d 678, 687 (2d Cir.1990). While we recognize that both Reyes and Kim involved offenses against the United States as represented by different government agencies, we see no reason why this reasoning should not apply to offenses against the United States, as represented by one government agency.
[4] Contrary to the defendant's assertions, the fact that each of the defendant's co-conspirators were also charged with conspiring to submit false statements is irrelevant. Although they faced similar charges, there is no evidence that the co-conspirators conspired with each other to make false statements. Rather, the co-conspirators conspired collectively to rig bids, and each co-conspirator conspired independently with his own company to make false statements.
[5] Accord United States v. Channel Fish Processing Co., Inc. et al., No. 91-00159 (E.D.Pa. July 25, 1991) and United States v. Zaffiro, No. 91-00158 (E.D.Pa. September 27, 1991) (related cases in which the court refused to group the antitrust and false statement offenses, pursuant to § 3D1.2(b), in sentencing defendant's co-conspirators); contra United States v. F.J. O'Hara & Sons, Inc., Nos. 90-00026-B and 90-00027-B, 1991 WL 286175 (D.Me. September 13, 1991) (a related case finding that the two offenses, although separate, were part of the defendant's scheme to sell fish to DPSC as much fish product as he could at the greatest possible profit to his company). For the reasons discussed above we believe that the reasoning of Channel Fish and Zaffiro is most persuasive.
[6] Even if we were to consider the language of § 3D1.2(d) more closely, we find that the defendant's base offense levels are not calculated in a similar way nor was his behavior ongoing and continuous. While both offense levels are determined monetarily, the severity of the anti-trust offense is measured by the total volume of commerce attributable to the bid-rigging scheme and the severity of the fraud offense is measured by the amount of loss to the victim. Moreover, offenses resulting from continuous conduct can only be grouped if the offense guidelines specifically provide for upward adjustments in the offense level for repeated behavior. United States v. Pilgrim Mkt. Corp., 944 F.2d 14, 19-20 (1st Cir.1991). There are no such adjustments under §§ 2F1.1 and 2R1.1.
[7] Antitrust Violation:
Base offense level 9 § 2R1.1(a)
Bid Rigging + 1 § 2R1.1(b)(1)
Volume of Commerce + 1 § 2R1.1(b)(2)
________
Total 11
False Statement Offense:
Base offense level 6 § 2F1.1(a)
More than minimal planning + 2 § 2F1.1(b)(2)
________
Total 8
[8] Defendant's counsel presented the following factors: the defendant was the second co-conspirator to accept responsibility for his offenses; the defendant arranged to sell his company so that ninety (90) percent of his employees could retain their jobs; all unsecured and secured creditors of the company have been paid; and the United States Government has been paid. Moreover, the defendant has primary responsibility for his aged father.
[9] We are mindful that at least one goal of the guidelines is to minimize disparities in sentences. United States Sentencing Commission, Guidelines Manual, Part A (Introduction and General Application Principles). However, we find our sentence to be in keeping with those imposed on the defendant's co-conspirators. Judge Green, Eastern District of Pennsylvania, sentenced John Zaffiro, a minor player in the conspiracy, to eight (8) non-split months. Judge Gawthrop, Eastern District of Pennsylvania, sentenced Roy Zaffiro, a more active participant, to ten (10) non-split months.
While Judge Hornby, District of Maine, sentenced John O'Hara, the defendant's ring-leader, to six (6) months, Judge Hornby's sentence was based largely on his decision to group the defendant's offenses under § 3D1.2, a decision we disagree with.
[10] Section 2R1.1(c) provides in pertinent part:
The guideline fine range for an individual conspirator is from 4 to 10 percent of the volume of commerce, but not less than $20,000.
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17 Cal.Rptr.3d 442 (2004)
121 Cal.App.4th 754
CALIFORNIA-NEVADA ANNUAL CONFERENCE OF the UNITED METHODIST CHURCH et al., Plaintiffs and Respondents,
v.
ST. LUKE'S UNITED METHODIST CHURCH et al., Defendants and Appellants.
No. F041778.
Court of Appeal, Fifth District.
August 13, 2004.
Review Denied December 1, 2004.[*]
*444 Doyle, Penner, Bradley & Watson, Peter Sean Bradley and Randall M. Penner, Fresno, for Defendants and Appellants.
Lewis, Brisbois, Bisgaard & Smith, Robert M. Shannon and Claudia J. Robinson, Sacramento, for Plaintiffs and Respondents.
*443 OPINION
ARDAIZ, P.J.
This case involves the issue of who controls a local church's property when the local church (here, appellant St. Luke's United Methodist Church) ends its affiliation with a national or worldwide religious denomination (here, the United Methodist Church). After a non-jury trial, the trial court ruled that the local church held the church property in trust not only for the use and benefit of the local church, but also for the use and benefit of the United Methodist Church. The court also ruled that the local church could not revoke that trust. The trial court's ruling was based largely on its understanding of the meaning of subdivisions (c) and (d) of Corporations *445 Code section 9142. On this appeal, the local church contends that (1) the court erred in concluding that a trust existed in favor of the United Methodist Church, and (2) even if such a trust existed, the local church could and did revoke that trust. As we shall explain, we agree that the evidence presented at trial supports the trial court's conclusion that a trust in favor of both churches was created. But we disagree with the trial court's conclusion that St. Luke's could not revoke the trust in favor of the United Methodist Church. We agree with St. Luke's contention that it could and in fact did revoke the trust which had existed in favor of the United Methodist Church.
We publish because Corporations Code section 9142, subdivisions (c) and (d) do not appear to have been analyzed in any detail in any other published cases, and because the meaning of these subdivisions may well be of particular importance to churches which now are, or in the future will be, experiencing difficult doctrinal disputes among their members. As we shall explain in part "II" of this opinion, we hold that (1) subdivision (c)(2) of Corporations Code section 9142 does not authorize a general church to create a trust interest for itself in property owned by a local church simply by issuing a rule declaring that such a trust exists, and (2) a local church's creation of a trust interest in favor of the general church, including a trust interest created by the local church's agreement to a general church's rule calling for the local church to hold property in trust for the general church, may be revoked by the local church unless the local church has expressly declared that trust to be irrevocable.
FACTS
A. Events Prior to Trial
Although the trial of this matter spanned 10 days, the evidence presented at trial was essentially undisputed. In 1948 St. Luke's United Methodist Church (then called "St. Luke's Methodist Church") was incorporated under California's General Non-Profit Corporation Law. Its articles of incorporation describe its purposes as follows:
"(1) To establish and maintain a church in the County of Fresno, State of California, as a part of and/affiliated with the Methodist Denomination, and in connection therewith to establish and maintain suitable and customary public religious worship, study and training, according to the articles, rules, usage and discipline of the Methodist Denomination;
(2) To acquire, manage and hold in trust for the benefit of said St. Luke's Methodist Church, property of every kind and nature, both real and personal; to receive bequests, to lease, mortgage, sell and convey any property belonging to said corporation, and to do all things necessary or convenient to carry out the purpose of said corporation as herein set forth."
What was then known as The Methodist Church united with the Evangelical United Brethren Church in 1968 to form the United Methodist Church. In 1973 St. Luke's Methodist Church amended its articles of incorporation to change its name to St. Luke's United Methodist Church of Fresno. The "Book of Discipline" (sometimes called simply "the Discipline") is "the instrument setting forth the laws, plan, polity, and process by which United Methodists govern themselves. . . ." The basic unit of the Book of Discipline is the "paragraph" (as opposed to a page, chapter, or section). The organizational structure of the United Methodist Church includes what are called a General Conference, jurisdictional conferences, central conferences, *446 annual conferences, and charge conferences. We need not describe these in detail here, except to note that "annual conferences" are described in the Book of Discipline as "the fundamental bodies of the Church" and have certain supervisory responsibilities over the local churches. Paragraph 118 of the Book of Discipline states in part: "`The United Methodist Church' as a denominational whole is not an entity, nor does it possess legal capacities and attributes. It does not and cannot hold title to property, nor does it have any officer, agent, employee, office, or location. Conferences, councils, boards, agencies, local churches, and other units bearing the name `United Methodist' are, for the most part, legal entities capable of suing and being sued and possessed of legal capacities."
Paragraph 2501 of the Discipline provides in part that "titles to all properties held ... by a local church ... shall be held in trust for the United Methodist Church and subject to the provisions of its Discipline." Paragraph 2503 sets forth specific trust language to be used in "instruments of conveyance by which premises are held or hereafter acquired for use as a place of divine worship for members of The United Methodist Church or for other church activities. . . ." Subparagraph 6 of paragraph 2503 states in part that "the absence of a trust clause ... in deeds and conveyances previously executed shall in no way exclude a local church or church agency from or relieve it of its connectional responsibilities to the United Methodist Church."
Over the years, St. Luke's acquired title to nine parcels of property: three in 1949, one in 1951, one in 1954, one in 1955, two in 1997, and one in 1998. Five of the nine grant deeds contained trust clauses in favor of the United Methodist Church. Four of the deeds did not. A standardized form on which the St. Luke's board of trustees submitted annual reports to a higher church authority (the charge conference) specifically asked, about the local church property, "Does each deed contain trust clause (Para.2503)?" Annual reports for the years 1988, 1989, and 1991 through 1998 were received into evidence. On each such report, the question about the trust clause was answered "Yes." The president of the St. Luke's board of trustees, Vince LaNovara, testified that he did not personally check to see if the trust clauses were on the deeds, but that nevertheless the absence of the trust clauses was brought to his attention by the district superintendent, Rev. Vickie Healy, in June of 2000 after St. Luke's used its real property as security for a line of credit it obtained from a bank in the spring of 2000 for church renovations.[1] In connection with this transaction, a deed was recorded in May of 2000 in which "St. Luke's Methodist Church" granted three parcels of property to "St. Luke's United Methodist Church" to reflect the aforementioned 1973 name change of the local church. But this deed omitted the trust language that had been included in the deeds to the same property when that property had been deeded to "St. Luke's Methodist Church" years earlier. LaNovara testified that the board of trustees "had no intention of that happening" and that the deletion of the trust language was "an oversight" and "a mistake." He further testified that it was his and the board's intention that the trust clauses should remain in, that the trustees reviewed what they were given by the bank and the title company, and that he told the escrow department at the bank that the trust clause *447 needed to be put back into the deed. LaNovara told Healy that the omission of the trust clause was a mistake, that "steps were underway to get it rectified," and that new deeds containing trust clauses were in fact prepared.
A doctrinal dispute arose within the United Methodist Church during 1999 and 2000. Many members of St. Luke's, including its pastor, were on one side in the dispute. Their bishop, Bishop Melvin G. Talbert, was on the other. In August of 2000 Bishop Talbert replaced St. Luke's pastor, David Wainscott, with another pastor, Doug Norris. Reverend Healy brought Norris to St. Luke's on August 15, 2000 and introduced him to various people at the church. When Norris returned to St. Luke's the next day, he found that the lock had been changed and his key did not work. After this escalation of the doctrinal dispute, the corrected deeds containing the trust language were never recorded. The deed without the trust language, and a deed of trust, were recorded to secure the line of credit from the bank. Also in response to the doctrinal dispute, St. Luke's United Methodist Church leased the church facilities to a newly incorporated entity called St. Luke's Community Church. The lease was subsequently voided by the two parties after about one month.
B. The Start of Litigation
This litigation began when the California-Nevada Annual Conference of the United Methodist Church (a nonprofit, religious corporation and a regional body of the United Methodist Church, hereinafter the Annual Conference), Bishop Talbert (the bishop responsible for oversight of local churches within the geographical area of the Annual Conference, including St. Luke's), and Reverend Healy (the District Superintendent for the Fresno District of the Annual Conference) sued St. Luke's United Methodist Church ("St. Luke's"), LaNovara and Reverend Wainscott for breach of a charitable trust. The action sought injunctive relief (which we will shortly describe) and damages. Wainscott was soon thereafter dismissed as a defendant. St. Luke's filed a cross-complaint against the Annual Conference, Bishop Talbert and Reverend Healy. The cross-complaint was a declaratory relief action seeking a declaration that the cross-defendants had no interest in the property, and that St. Lukes could revoke any trust interest which might exist in the real property by recording grant deeds (prepared and attached as exhibits to the cross-complaint) by which St. Lukes would deed the real property to itself, without any trust language.)
C. Subsequent Events
While the litigation was pending, and before the trial began, St. Luke's amended its articles of incorporation to state a change in the purposes of the religious corporation. Its purposes became "to establish and maintain a church ... which ... shall follow the tenets of Methodism, but which shall not be subject in any manner to the articles, rules, usage, discipline, or jurisdiction of the United Methodist Church or any organization or other entity which is part of and/or affiliated with the United Methodist Church" and "to acquire, manage, and hold in trust for the sole benefit of this Corporation property of every kind and nature, both real and personal. . . ." In short, St. Lukes would not be affiliated with the United Methodist Church and would hold its property in trust for itself only.
D. The Trial Court's Decision
After the evidentiary phase of the trial, the court received further briefing from *448 the parties before rendering its decision. We should note here, for purposes of clarity, that the parties agreed that the subject of the litigation was the St. Luke's real property, and not any personal property. Also, the three plaintiffs did not contend that St. Luke's had forfeited its interest in the property. Their contention was that, in accordance with the Book of Discipline, real property held by an incorporated local church "shall be held by ... the corporate body in its corporate name, in trust for the use and benefit of such local church and of the United Methodist Church." The main issues at trial were (1) whether the United Methodist Church had any trust interest in the St. Luke's real property at all (since the St. Luke's articles of incorporation, both in 1948 and as amended in 2000, did not expressly state the existence of such a trust) and (2) if such a trust existed, whether St. Luke's had successfully revoked that trust. The trial court concluded that (1) there was a trust interest in favor of the United Methodist Church, and (2) St. Luke's could not and did not unilaterally revoke that trust. The court found no liability on the part of defendant LaNovara. It awarded injunctive relief in favor of the plaintiffs and against St. Luke's, but no monetary damages. The injunctive relief directed St. Luke's to (1) prepare, execute and record deeds to the St. Luke's property containing trust language in favor of the United Methodist Church, (2) grant access to the St. Luke's property to duly authorized representatives of the United Methodist Church, refrain from interfering with United Methodist ministry and worship at St. Luke's, and refrain from permitting any use of the property by persons not affiliated with the United Methodist Church without the written consent of the Annual Conference, and (3) remove the designation "St. Luke's Community Church" from signage on the property, and to restore the "St. Luke's United Methodist Church" signage on the property. The court further ruled that St. Luke's "shall take nothing by virtue of the Cross-Complaint."
I.
THE TRIAL COURT'S FINDING THAT A TRUST INTEREST WAS CREATED IN FAVOR OF THE UNITED METHODIST CHURCH IS SUPPORTED BY SUBSTANTIAL EVIDENCE
We deal here with the events which occurred prior to St. Luke's December 2000 disaffiliation from the United Methodist Church. St. Luke's contends that the plaintiffs made an insufficient evidentiary showing of the existence of a trust in favor of the United Methodist Church. As we shall explain, there was substantial evidence to support the trial court's conclusion that a trust was created in favor of both the general church and the local church.
A. The Resolution of Church Property Disputes
In the leading case of Protestant Episcopal Church v. Barker (1981) 115 Cal.App.3d 599, 171 Cal.Rptr. 541 (Barker), the court reviewed legal theories which courts had utilized to resolve disputes over church property when religious groups split into different factions and each faction asserted a claim of right to the property. One was the hierarchical theory, utilized in Watson v. Jones (1871) 80 U.S. (13 Wall.) 679, 20 L.Ed. 666. Under the hierarchical theory, civil courts would defer to the authority of ecclesiastical tribunals in disputes over church property. Another theory was the implied trust theory. Under this theory, "church property was the subject of an implied trust in favor of those who adhered to the faith of the *449 founders of the church." (Presbytery of Riverside v. Community Church of Palm Springs (1979) 89 Cal.App.3d 910, 928, 152 Cal.Rptr. 854.) The Presbytery of Riverside case described but did not utilize this theory, instead noting that a "concomitant of this implied trust doctrine was the necessity for the court to examine in great detail questions of religious doctrine in its determination as to which group of claimed beneficiaries continued to adhere to the `true' faith and which had departed from the `true' doctrine. [Citation.]" (Id. at pp. 928-929, 152 Cal.Rptr. 854.) A third was the "neutral principles of law" theory explained in Jones v. Wolf (1979) 443 U.S. 595, 99 S.Ct. 3020, 61 L.Ed.2d 775. In Jones, the court held that the First Amendment does not require civil courts to defer to a church's own resolution of a property dispute, and instead, "a State is constitutionally entitled to adopt neutral principles of law as a means of adjudicating a church property dispute." (Jones v. Wolf, supra, 443 U.S. at p. 604, 99 S.Ct. 3020.) The First Amendment "prohibits civil courts from resolving church property disputes on the basis of religious doctrine and practice" and "requires that civil courts defer to the resolution of issues of religious doctrine or polity by the highest court of a hierarchical church organization," but "[s]ubject to these limitations, ... the First Amendment does not dictate that a State must follow a particular method of resolving church property disputes." (Jones v. Wolf, supra, 443 U.S. at p. 602, 99 S.Ct. 3020.)
The Jones court also made it clear that the prohibited considerations of "religious doctrine and practice" do not include church rules on ownership of property. (Jones v. Wolf, supra, 443 U.S. at p. 602, 99 S.Ct. 3020.) Citing Maryland & Va. Churches v. Sharpsburg Church (1970) 396 U.S. 367, 90 S.Ct. 499, 24 L.Ed.2d 582, the Jones court stated:
"The neutral-principles approach was approved in Maryland & Va. Churches, supra, on appeal from a judgment of the Court of Appeals of Maryland settling a local church property dispute on the basis of the language of the deeds, the terms of the local church charters, the state statutes governing the holding of church property, and the provisions in the constitution of the general church concerning the ownership and control of church property. Finding that this analysis entailed `no inquiry into religious doctrine,' the Court dismissed the appeal for want of a substantial federal question." (Jones v. Wolf, supra, 443 U.S. at pp. 602-603, 99 S.Ct. 3020.)
The Jones court further observed that "[t]he neutral-principles method, at least as it has evolved in Georgia, requires a civil court to examine certain religious documents, such as a church constitution, for language of trust in favor of the general church." (Id. at p. 604, 99 S.Ct. 3020.)
The Barker court concluded that "California has adopted neutral principles of law as the basis for resolution of church disputes." (Barker, supra, 115 Cal.App.3d at p. 615, 171 Cal.Rptr. 541.) Barker noted that Presbytery of Riverside v. Community Church of Palm Springs, supra, 89 Cal.App.3d 910, 152 Cal.Rptr. 854, had reached the same conclusion. The parties here also appear to agree that the neutral principles of law theory is applicable in California, or at least that the hierarchical and implied trust theories do not apply. The Barker court added, "Simply put, the issue is whether the local churches expressly hold their property in trust for the benefit of members of [the general church]." (Barker, supra, 115 Cal.App.3d at p. 620, 171 Cal.Rptr. 541.) And Barker *450 appears to have relied on the above quoted language from Jones v. Wolf to state:
"In determining the presence or absence of an express trust in specific church property a court will look at four general sets of facts: (1) the deeds to the property, (2) the articles of incorporation of the local church, (3) the constitution, canons, and rules of the general church, and (4) relevant state statutes, if any, governing possession and disposition of such property. In Jones v. Wolf [, supra, 443 U.S. at pp. 600, 603, 99 S.Ct. 3020], the United States Supreme Court noted approvingly that both the Georgia Supreme Court and the Maryland Court of Appeals employed these factors to resolve church property disputes." (Barker, supra, 115 Cal.App.3d at p. 621, 171 Cal.Rptr. 541, fn. omitted.)
The trial court evaluated each of these four considerations and concluded that a trust interest existed in favor of the United Methodist Church.
B. The Standard of Review
"[N]ormally, the question whether the parties in their dealings have created a trust is one of fact to be determined largely by ascertaining the intent of the parties [citations]. Where ... the trial court's determination of fact is based on conflicting evidence, or at least evidence giving rise to conflicting inferences, the substantial evidence rule applies, and the trial court's determination will not be disturbed on appeal." (Presbytery of Riverside, supra, 89 Cal.App.3d at p. 931, 152 Cal.Rptr. 854.)
St. Luke's contends that the plaintiffs failed to demonstrate by clear and convincing proof that a trust existed in favor of the United Methodist Church. St. Luke's relies on Evidence Code section 662, which states: "The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof." This is really nothing more than an argument that the finding of the existence of a trust was not supported by substantial evidence. "`The sufficiency of evidence to establish a given fact, where the law requires proof of the fact to be clear and convincing, is primarily a question for the trial court to determine, and if there is substantial evidence to support its conclusion, the determination is not open to review on appeal.'" (Nat. Auto. & Cas. Co. v. Industrial Acc. Commission (1949) 34 Cal.2d 20, 25, 206 P.2d 841; Crail v. Blakely (1973) 8 Cal.3d 744, 750, 106 Cal.Rptr. 187, 505 P.2d 1027; accord, 9 Witkin, Cal. Proc. (4th ed. 1997) "Appeal," § 365.) Here, there was substantial evidence of the existence of a trust.
C. Substantial Evidence Supports the Trial Court's Finding of the Creation of a Trust in Favor of the United Methodist Church
As for the deeds, there was no dispute that five of the nine deeds contained the trust language. The testimony of LaNovara was undisputed that even as late as the spring or summer of 2000, he understood that the Book of Discipline required the trust clause to be on the deeds, and that the St. Luke' board of directors intended and attempted to restore that language. It was not until the doctrinal dispute escalated in August of 2000 with the arrival of Pastor Norris that the board held off on recording corrected deeds and then ultimately (in December 2000) disaffiliated St. Luke's from the United Methodist Church. St. Luke's never contended that the omission of the trust language from four of the nine deeds was intentional or was any expression of disagreement with the requirement of the Book of Discipline, *451 paragraph 2503, that the trust clauses appear on the deeds.
As for the original articles of incorporation of St. Luke's (i.e., those in effect before the December 2000 amendment to disaffiliate from the United Methodist Church), they did state that a purpose of the corporation was to acquire, manage and hold property "in trust for the benefit of said St. Luke's Methodist Church." The articles did not also expressly say "and also for the benefit of the United Methodist Church." But they did also state that a purpose of the corporation was to establish and maintain a church "as a part of and affiliated with the Methodist Denomination" and "to do all things necessary or convenient to carry out the purpose of said corporation." To be affiliated with the Methodist Denomination, St. Luke's was required to adhere to the "articles, rules, usage and discipline of the Methodist Denomination" (also expressly noted in the articles of incorporation). And it was undisputed that although the Book of Discipline is updated every four years, the Book of Discipline already required trust clauses in property deeds when St. Luke's was incorporated in 1948.
As for the rules of the general church, we have already pointed out that paragraph 2537 of the Book of Discipline required an incorporated local church's real property to be "held by and/or conveyed to the corporate body in its corporate name, in trust for the use and benefit of such local church and of The United Methodist Church" and that "[e]very instrument of conveyance of real estate shall contain the appropriate trust clause as set forth in the Discipline (§ 2503)."
As for "relevant state statutes, if any, governing possession and disposition of such property" (Barker, supra, 115 Cal.App.3d at p. 621, 171 Cal.Rptr. 541), St. Luke's makes no showing of the existence of any statute that would render erroneous the trial court's conclusion that a trust in favor of both churches was created. St. Luke's calls our attention to the above quoted Evidence Code section 662, and then argues that the evidence of the creation of a trust was not clear and convincing because the trial court did not give sufficient weight to the provision of the St. Luke's articles of incorporation stating that a purpose of the corporation was to hold property "in trust for the benefit of said St. Luke's Methodist Church." St. Luke's candidly acknowledges, however, that those same articles of incorporation also stated that a purpose of the corporation was to maintain a church "affiliated with the Methodist Denomination" and "according to the articles, rules, usage and discipline of the Methodist Denomination." It also acknowledges that even in 1948 the Book of Discipline required trust clauses in favor of both the local church and the general church. St. Luke's could not simultaneously both (a) hold its real property in trust only for the benefit of itself and (b) hold its real property in trust for the benefit of itself and of the general church. The trial court harmonized the above quoted clauses of the St. Luke's articles of incorporation by concluding that the articles of incorporation themselves did not require St. Luke's to hold property in trust only for the benefit of itself. Thus although St. Luke's correctly points out that the Book of Discipline serves as the functional equivalent of corporate bylaws (see Metropolitan Philip v. Steiger (2000) 82 Cal.App.4th 923, 932, 98 Cal.Rptr.2d 605), and that a bylaw or portion thereof that is in conflict with the articles of incorporation is void (see Morris v. Richard Clark Missionary Baptist Church (1947) 78 Cal.App.2d 490, 493, 177 P.2d 811), St. Luke's did not demonstrate that the Book of Discipline was in conflict with the St. Luke's articles of incorporation.
*452 II.
ST. LUKE'S COULD AND DID REVOKE THE TRUST IN FAVOR OF THE UNITED METHODIST CHURCH
The plaintiffs contended, and the trial court agreed, that Corporations Code section 9142 barred St. Luke's from revoking any trust which existed in favor of the United Methodist Church. The trial court relied on subdivisions (c) and (d) of Corporations Code section 9142. These subdivisions state:
"(c) No assets of a religious corporation are or shall be deemed to be impressed with any trust, express or implied, statutory or at common law unless one of the following applies:
"(1) Unless, and only to the extent that, the assets were received by the corporation with an express commitment by resolution of its board of directors to so hold those assets in trust.
"(2) Unless, and only to the extent that, the articles or bylaws of the corporation, or the governing instruments of a superior religious body or general church of which the corporation is a member, so expressly provide.
"(3) Unless, and only to the extent that, the donor expressly imposed a trust, in writing, at the time of the gift or donation.
"(d) Trusts created by paragraph (2) of subdivision (c) may be amended or dissolved by amendment from time to time to the articles, bylaws, or governing instruments creating the trusts. However, nothing in this subdivision shall be construed to permit the amendment of the articles to delete or to amend provisions required by Section 214.01 of the Revenue and Taxation Code to a greater extent than otherwise allowable by law."
The parties agree that nothing in subdivision (c)(1) or (c)(3) would operate to recognize any trust interest in favor of the United Methodist Church. The plaintiffs contend, however, that under subdivision (c)(2) the Book of Discipline created a trust in favor of the United Methodist Church. This is because the Book of Discipline is a "governing instrument" of the general church. Subdivision (d) provides that a trust created by subdivision (c)(2) "may be amended or dissolved by amendment ... to the ... governing instruments creating the trust." The Book of Discipline has not been amended so as to change or delete its paragraph 2537 requirement that the real property of an unincorporated local church be held "in trust for the use and benefit of such local church and of The United Methodist Church." Thus, the plaintiffs say, the trust in favor of the United Methodist Church has not been dissolved.
St. Luke's, on the other hand, argues that nothing in Corporations Code section 9142 was intended to supplant basic principles of trust law, one of which is that "[u]nless a trust is expressly made irrevocable by the trust instrument, the trust is revocable by the settlor." (Prob.Code, § 15400.) As we shall explain, we agree with St. Luke's.
A trust is "a fiduciary relationship with respect to property, subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it." (Rest.2d Trusts, § 2, p. 6.) "A trust is created by a manifestation of intention of the settlor to create a trust, trust property, a lawful trust purpose, and an identifiable beneficiary." (Chang v. Redding Bank of Commerce (1994) 29 Cal.App.4th 673, 684, 35 Cal.Rptr.2d 64.) "An express *453 trust is generally created in one of two ways: (1) a declaration of trust, by which the owner of property declares that he holds it as trustee for some beneficiary; (2) a transfer in trust, by which the owner transfers to another as trustee for some beneficiary, either by deed or other transfer inter vivos, or by will." (11 Witkin, Summary of Cal. Law (9th ed. 1990) Trusts, § 26(a), p. 911; see also Prob. Code, § 15200; Rest.2d Trusts, § 17.) In the present case, there appears to be no dispute that St. Luke's purchased the properties that are the subject of the present dispute. If the properties were held in trust for the benefit of the United Methodist Church, it is because St. Luke's manifested in a number of different ways its intention to so hold the properties. "Unless a trust is expressly made irrevocable by the trust instrument, the trust is revocable by the settlor. This section applies only where the settlor is domiciled in this state when the trust is created, where the trust instrument is executed in this state, or where the trust instrument provides that the law of this state governs the trust." (Prob.Code, § 15400.) California's rule that a trust is presumed to be revocable differs from the rule in many other states where trusts are presumed to be irrevocable unless the settlor reserves the right to revoke. (See 18 Cal.Law Revision Com. Rep. (1986) p. 565.) But the presumption of revocability has been the rule in California since 1931 and applies to trusts created since a 1931 amendment to the former Civil Code, section 2280. (See Witkin, supra, § 201, p. 1054.)
"The person who creates a trust is the settlor." (Rest.2d Trusts, § 3, p. 12.) Because this trust was created by St. Luke's manifested intention to hold the property in trust for the benefit of itself and of the United Methodist Church, we see no conclusion other than that St. Luke's was the settlor, and that St. Luke's could and did revoke the trust when it amended its articles of incorporation in December of 2000 to disaffiliate itself from the "discipline ... of the United Methodist Church" and to declare that it would hold property "in trust for the sole benefit of this Corporation." (See Prob.Code, § 15401.)
The trial court's decision that the trust was irrevocable rested on its reading of subdivisions (c) and (d) of Corporations Code section 1942. Although the trial court found that a trust existed in favor of the United Methodist Church by considering the Barker factors, the court also found that subdivision (c)(2) itself created a trust in favor of the United Methodist Church. It concluded that the Book of Discipline was the "governing instrument" creating the trust. And since that governing instrument had not been amended to eliminate the Book of Discipline's requirement that a local church's property be held in trust for the benefit of both the local church and the United Methodist Church, a trust in favor of the United Methodist Church still existed and could not be revoked by the local church. In other words, the "amendment" referred to in subdivision (d) did not exist and so the trust had not been revoked. Under the trial court's (and the plaintiffs') reading of the statute, only the general church could revoke the trust which existed in its favor. And since the general church had not done so, there was no revocation. We thus turn to the key question in this case: what do subdivisions (c)(2) and (d) of Corporations Code section 9142 mean?
"When construing a statute, we must `ascertain the intent of the Legislature so as to effectuate the purpose of the law.' (DuBois v. Workers' Comp. Appeals Bd. (1993) 5 Cal.4th 382, 387 [20 Cal.Rptr.2d 523, 853 P.2d 978].) The *454 words of the statute are the starting point. `Words used in a statute ... should be given the meaning they bear in ordinary use. [Citations.] If the language is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature....' (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735 [248 Cal.Rptr. 115, 755 P.2d 299] (Lungren).) If the language permits more than one reasonable interpretation, however, the court looks `to a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part.' (People v. Woodhead (1987) 43 Cal.3d 1002, 1008 [239 Cal.Rptr. 656, 741 P.2d 154].) After considering these extrinsic aids, we `must select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute, and avoid an interpretation that would lead to absurd consequences.' (People v. Jenkins (1995) 10 Cal.4th 234, 246 [40 Cal.Rptr.2d 903, 893 P.2d 1224].)" (Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 977-978, 90 Cal.Rptr.2d 260, 987 P.2d 727.)
The plaintiffs' reading of Corporations Code section 9142, (c)(2) appears to be that this statute enables a general church to create a trust, in favor of itself, with the trust property being the local church's property. In plaintiffs' view, the general church (or "superior religious body") can do this by so providing in the general church's "governing instruments." Such a statute would appear to be sharply at odds with other general principles of trust law. A trust can be created by a "declaration by the owner of property that the owner holds the property as trustee." (Prob. Code, § 15200, subd. (a); see also Rest.2d Trusts, § 17, p. 59.) We know of no principle of trust law stating that a trust can be created by the declaration of a nonowner that the owner holds the property as trustee for the nonowner. A more reasonable reading of the statute is that subdivision (c)(2) was intended to be a codification of or recognition of Barker, supra. This is especially so since subdivisions (c) and (d) were enacted shortly after Barker was decided. Barker was decided in January of 1981. Subdivisions (c) and (d) of Corporations Code section 9142 were enacted in 1982, and took effect in 1983. (Stats.1982, c. 242, p. 784, § 1.) Nothing in Barker supports the view that a general church can create a trust in favor of itself simply by enacting a rule stating that a local church holds property in trust in favor of the general church. Barker involved four local churches and one general church. The general church adopted a rule (canon 10.06), which declared that on dissolution of a local church its property became distributable to the general church. The court nevertheless concluded that no trust in favor of the general church existed for three of the four local church properties. "At the times the three earlier churches were incorporated and acquired their property, nothing in the general church constitution, canons, and rules operated to create an express trust in local church property in favor of the general church." (Barker, supra, 115 Cal.App.3d at p. 624, 171 Cal.Rptr. 541.) These three local churches "did not subject themselves to express restraints on their property by reason of the constitution, canons, and rules of" the general church. (Id. at p. 625, 171 Cal.Rptr. 541.) In contrast to this, the fourth local church "was incorporated subsequent to the adoption of Diocesan Canon 10.06." (Ibid.) This fact, plus language in the fourth local church's articles *455 of incorporation, caused the court to conclude that "under neutral principles of law the property of [the fourth local church] was subject to an express trust in favor of" the general church. (Id. at pp. 625, 171 Cal.Rptr. 541.)
The language of subdivision (c) of Corporations Code section 9142 indicates that its purpose was to limit, and not to expand, the circumstances in which the assets of a religious corporation would be "impressed with any trust, express or implied, statutory or at common law." (Corp.Code, § 9142, subd. (c).) This limiting purpose is also apparent from various legislative history materials, such as the "digest" of the Assembly Third Reading of the bill (Sen. Bill No. 1178 (1981-1982 Reg. Sess.)), which stated in pertinent part: "The bill's purpose is to limit a religious corporation's property subject to a charitable trust. It requires certain actions to take place in order for a gift of property to be considered a charitable trust." Although the bill appears to have been concerned primarily with assets of a religious corporation which had been donated to that corporation, subdivision (c) of the statute begins with "No assets of a religious corporation" and not with "No donated assets of a religious corporation." Nevertheless, nothing in the statute appears to have been intended to create a new kind of trust which had not previously existed.
Korean United Presbyterian Church v. Presbytery of the Pacific (1991) 230 Cal.App.3d 480, 281 Cal.Rptr. 396 describes Corporations Code section 9142 as providing "presumptive rules for religious trusts." (Korean United Presbyterian Church, at p. 508, 281 Cal.Rptr. 396.) This language appears to have come from a treatise (Ballantine & Sterling, Cal. Corporation Laws (4th ed.1962)) in which the authors state: "It is not always entirely clear to what extent the assets of a religious corporation are impressed with a trust beyond a somewhat generalized charitable religious trust for the general purposes of the organization. In an effort to clarify this situation, Corp.Code § 9142 was amended effective January 1, 1983, to provide presumptive rules as to these trusts and to prescribe the circumstances under which they could be amended or modified." (Ballantine & Sterling, supra, § 418.01(3)(c), pp. XX-XXX-XX-XXX and 19-478 (5/02) (fns.omitted).) Nothing in the statute itself, however, uses the word "presumption" or "presumed."
The Book of Discipline did not, by itself, "create" the trust. The trial court found that the local church's articles of incorporation, and the presence of trust language on five of the nine deeds, demonstrated an intent to be bound by the rules of the Book of Discipline, i.e., an intent to hold the property in trust for the benefit of both the local church and the United Methodist Church. Thus if the trust in favor of the United Methodist Church was a trust "created by paragraph (2) of subdivision (c)" (Corp.Code, § 9142, subd. (d)), that trust could be amended or dissolved by amending the St. Luke's articles of incorporation to expressly state that St. Luke's would not be "affiliated with" or "subject ... to the ... discipline ... of the United Methodist Church," and that it would hold property "in trust for the sole benefit of this Corporation." That is exactly what St. Luke's did.
We acknowledge that our decision in this case appears to be at odds with the Second Appellate District's recent opinion in Guardian Angel Polish Nat. Catholic Church of Los Angeles, Inc. v. Grotnik (2004) 118 Cal.App.4th 919, 13 Cal.Rptr.3d 552. In Guardian Angel the board of directors of the local church "voted ... to sever all ties with" the general church. (Id. at p. 926, 13 Cal.Rptr.3d 552.) The *456 trial court found that the church property belonged to the local church. The court of appeal reversed. The appellate court relied upon provisions of the general church's constitution to conclude that acts of the local church's board were "unauthorized and consequently a nullity" because the general church's constitution required "diocesan approval of its [the local church's board's] election" and there had been no such diocesan approval. (Id. at p. 927, 13 Cal.Rptr.3d 552.) The appellate court then cited the four Barker factors (deeds, articles of incorporation of the local church, rules of the general church, and relevant state statutes, if any), stated that it was applying neutral principles of law, and then concluded that the property belonged to the general church because provisions of the constitution of the general church called for this result. (Guardian Angel Polish Nat. Catholic Church of Los Angeles, Inc. v. Grotnik, supra, 118 Cal.App.4th at pp. 930-931, 13 Cal.Rptr.3d 552.) The Guardian Angel court also stated that it was relying on the local church's bylaws calling for this result (id. at p. 931, 13 Cal.Rptr.3d 552), but this was only after the court concluded that the board of directors' repeal of those same bylaws had been ineffectual because the board itself had not been approved by the diocese as required by the general church's constitution. (Id. at pp. 926-927, 13 Cal.Rptr.3d 552.)
A general church may certainly view a local church's board of directors as being "unauthorized" and not in compliance with the general church's rules. This is an ecclesiastical matter, and not a matter with which a civil court would interfere. (Jones v. Wolf, supra, 443 U.S. 595, 99 S.Ct. 3020, 61 L.Ed.2d 775.) But we respectfully disagree with the view that acts of a board of directors of a lawfully formed corporation may be viewed by a civil court to be a nullity simply because those acts are deemed unauthorized not by any recognized rule of state law, but rather only by the general church's own rules. In Barker the court stated: "Essentially, the hierarchical theory subordinates civil control of church property to ecclesiastical control of church property. Under this theory the canons and rules of a general church override general principles of legal title in the resolution of church controversies over property." (Barker, supra, 115 Cal.App.3d at p. 612, 171 Cal.Rptr. 541.) Although the hierarchical theory has supposedly been rejected in California, it will nevertheless live on under the label of "neutral principles of law," if a church's own rules are viewed as trumping state statutes.
DISPOSITION
The judgment is reversed. Costs on appeal are awarded to appellant.
WE CONCUR: GOMES and DAWSON, JJ.
NOTES
[*] Baxter, J., did not participate therein. Kennard and Moreno, JJ., dissented.
[1] A district superintendent is appointed by a bishop to assist the bishop. Healy was superintendent of the Fresno District of California-Nevada Annual Conference.
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777 F.Supp. 906 (1991)
Steve SANCHEZ and Donald Sandoval, Plaintiffs,
v.
Gilbert SANCHEZ, Allen Jahner and Wilton Rogers, Defendants.
No. CIV 87-1258 JC.
United States District Court, D. New Mexico.
November 8, 1991.
*907 *908 James A. Burke, Santa Fe, N.M., for plaintiffs.
John L. Lenssen, Lenssen & Mandel, Santa Fe, N.M., for defendants.
MEMORANDUM OPINION AND ORDER
CONWAY, District Judge.
THIS MATTER came on for consideration of the defendants' Motion for Judgment Notwithstanding the Verdict, or, In the Alternative, For a New Trial, filed February 11, 1991. The Court has reviewed the memoranda submitted by the parties and the relevant authorities. The Court has further examined those sections of the file pertinent to the issues presented, the proposed instructions of both the plaintiffs and defendants, the objections to the instructions after submission of the case to *909 the jury and the special verdict form as answered by the jury. After a great deal of reflection, I find that the motion is not well-taken and will be denied.
Plaintiffs Sanchez and Sandoval are former employees of New Mexico Highlands University. At the time of their discharges, plaintiffs had been employed at Highlands University for approximately 15 years and 17 years respectively. In addition to their jobs as locksmith and purchasing agent, the plaintiffs also served as coaches of the University wrestling team.
Defendants Sanchez and Jahner are the University President and Vice-President respectively. When the plaintiffs were terminated in 1987, defendant Rogers held the position of Personnel Director. The defendant University officials claim that the terminations of plaintiffs were due solely to the reorganization of the University and its elimination of the wrestling program.
After an eight-day trial on the merits, the jury found that the defendants had discharged both plaintiffs because they had circulated a petition critical of the Highlands University administration. These retaliatory actions were found to be violations under Section 1983 of the plaintiffs' constitutional rights to freedom of speech. Further, on the special verdict form the jury indicated that the defendants had conspired to violate the plaintiffs' constitutional rights and that their rights to procedural and substantive due process were also infringed.
The jury awarded awarded compensatory and punitive damages in the following amounts:
Plaintiff Sanchez Plaintiff Sandoval
Defendant Compensatory Punitives Compensatory Punitives
Sanchez $6,750 $90,000 $74,695 $90,000
Jahner 6,750 90,000 74,695 90,000
Rogers 1,500 20,000 16,599 20,000
Entry of a J.N.O.V. is appropriate "only when the evidence points but one way and is susceptible of no reasonable inferences which may sustain the position against whom the motion is made." EEOC v. Prudential Federal Savings & Loan Ass'n., 763 F.2d 1166, 1171 (10th Cir.1985). In order to grant a new trial, however, the Court must find that the verdict is against the weight of the evidence, that the damages are excessive or that the moving party did not receive a fair trial. See Brown v. McGraw-Edison Co., 736 F.2d 609 (10th Cir.1984). Because I find that the instructions to the jury adequately set forth the correct law to be applied and that the jury's decision is supported by substantial evidence, this Court will not disturb the verdict.
The motion sets forth thirteen assertions of error in the case. Defendants maintain that the refusal by the Court to instruct the jury regarding qualified immunity is the most significant of the alleged errors. Defendants' brief at 2-3. As shown in Section I of this opinion, the defendants are confused on the qualified immunity issue in part because of the guidance the Tenth Circuit has provided to the lower courts. Section II addresses the other alleged errors.
I. Qualified Immunity
Like the indomitable Terminator in the movie of that name, the question of the defendants' entitlement to qualified immunity will not be put to rest. The defendants initially raised this issue on a motion for summary judgment which the Court denied, finding that questions concerning the defendants' motives precluded a finding of qualified immunity. The defendants took an interlocutory appeal from this Order to the Tenth Circuit Court of Appeals. In an unpublished per curiam decision, the panel affirmed this court's denial of qualified immunity, stating:
It is axiomatic that the university officials must be held to the knowledge that *910 employees of the university could not be terminated in retaliation for exercise of speech protected by the first amendment....
The university officials base their defense of qualified immunity on their position that, since their actions with regard to plaintiffs' employment in the summer of 1987 were not in retaliation for the circulation of the petition, the actions were objectively reasonable.
After a complete review of the record on appeal, we agree with the district court. There are material issues of fact vigorously disputed and documented by competent pretrial evidence to support both parties' contentions. "[W]hen all inferences from the evidence are drawn in the plaintiff[s'] favor, plaintiff[s have] raised a genuine issue of material fact as to whether [their] exercise of protected First Amendment activity was a substantial or motivating factor in her termination." Laidley v. McClain, 914 F.2d 1386, 1392 (10th Cir.1990) (citing Mt. Healthy City School Dist. v. Doyle, 429 U.S. 274 [97 S.Ct. 568, 50 L.Ed.2d 471] (1977)). Under the circumstances of this case, summary judgment must be denied, and the matter must proceed in the district court.
Sanchez & Sandoval v. Sanchez, Jahner & Rogers, No. 89-2214, slip op. at 6-7 (10th Cir. October 19, 1990).
Prior to trial the defendants submitted a proposed jury instruction addressing the issue of qualified immunity; at trial, they strenuously argued for inclusion of the instruction in the packet of instructions tendered to the jury. Following its earlier rulings, this Court refused to give the qualified immunity jury instruction. In doing so, the Court indicated that it had already ruled: 1) that the speech at issue was protected speech and that at the time of the incidents underlying this action it was clearly established law that the plaintiffs could not be terminated in retaliation for the speech in question; and 2) that whether the employees had been terminated in violation of such rights was an issue of fact for the jury. The jury, consistent with the plaintiffs' theory of the case, found that the plaintiffs had been terminated in violation of their First Amendment rights.
Neither beaten nor even hardly wearied, the defendants indefatigably raise the issue yet again, contending that the "major error is still the failure not to instruct the jury regarding qualified immunity." Defendants' brief at 2-3. The defendants have cause to be persistent. The issue has become unnecessarily confused. There is no doubt that it is both nettlesome and important. The Court will therefore set forth its reasoning in some detail.
A.
At the outset, the Court notes that it would have thought that this issue had been resolved by Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985), in which the United States Supreme Court noted that the availability of the qualified immunity defense is a question of law. Id. at 527-28, 105 S.Ct. at 2816. Any first year law student knows that questions of law do not raise jury issues, since a jury acts only as the trier of fact. Indeed, the Tenth Circuit has stated unequivocally that because qualified immunity is a legal issue, "this issue should not ... be[] submitted to the jury." Melton v. City of Oklahoma City, 879 F.2d 706, 726 (10th Cir.1989). See Lutz v. Weld County School District No. 6, 784 F.2d 340, 343 (10th Cir.1986);[1]see also, Wegener v. City of Covington, 933 F.2d 390, 392 (6th Cir.1991); Hughes v. Meyer, 880 F.2d 967, 994 (7th Cir.1989); Alvarado v. Picur, 859 F.2d 448, 451 (7th Cir.1988); Poe v. Haydon, 853 F.2d 418, 424 (6th Cir.1988), cert. denied, 488 U.S. 1007, 109 S.Ct. 788, 102 L.Ed.2d 780 (1989); Jones v. Chicago, 856 F.2d 985, 994 (7th Cir.1988); Rakovich v. Wade, 850 F.2d *911 1180, 1201-02 (7th Cir.), cert. denied, 488 U.S. 968, 109 S.Ct. 497, 102 L.Ed.2d 534 (1988); Holt v. Artis, 843 F.2d 242, 245-46 (6th Cir.1988); and Garionis v. Newton, 827 F.2d 306, 309 (8th Cir.1987).[2] Nevertheless, the defendants insist that they were entitled to the requested instruction.
The defendants' theory of their qualified immunity defense is straightforward. The defendants asserted at trial that the plaintiffs were terminated not because of their petition but as a result of a university-wide reorganization. They argued that based on the evidence presented at trial, the jury could conclude that the defendants had acted in an "objectively reasonable" manner and thus find that they were entitled to qualified immunity. Essentially, then, the defendants contended that they would be entitled to qualified immunity unless the jury found that they had terminated the plaintiffs in retaliation for exercising their First Amendment rights.[3] In light of the Tenth Circuit's remand of this Court's determination that factual issues precluded summary judgment, the defendants argue that the Tenth Circuit transformed the qualified immunity issue in this case into a question of fact and intended for the issue to be decided by the jury. Therefore, the defendants insist, they were entitled to a qualified immunity instruction.
The flaw in the defendants' analysis derives from their failure to distinguish between the subjective element of a plaintiff's substantive constitutional claim and the question of a defendant's state of mind as it has arisen in the context of the qualified immunity defense. As the Third Circuit Court of Appeals stated in an analogous case:
When a § 1983 action is based on defendants' misuse of criminal process by the initiation of criminal charges against plaintiff without probable cause or for personal animosity ..., it is necessary to distinguish between the alleged lack of probable cause or malice underlying the criminal charges as an element of plaintiff's substantive § 1983 claim, and the allegation of malice sufficient to preclude defendants from summary judgment on their qualified immunity defense. The issues are analytically distinct, see Barker v. Norman, 651 F.2d 1107, 1123-24 (5th Cir.1981); S. Nahmod, Civil Rights & Civil Liberties Litigation § 3.02, at 64 (1979).
Losch v. Borough of Parkesburg, Pa., 736 F.2d 903, 907 (3d Cir.1984). See generally, S. Balcerzak, Note, Qualified Immunity *912 for Government Officials, 95 Yale L.J. 126 (1985). As will be seen, however, the defendants perspective reflects a not uncommon error.
B.
In many cases, facially neutral acts will form the basis of a constitutional claim. Such is the case here: the plaintiffs' termination was an entirely neutral act. However, impermissible motive will transform these otherwise innocuous acts into constitutional torts. In such cases the existence of a constitutional violation is dependant upon proof of unlawful intent. See Gutierrez v. Municipal Court of the Southeast Judicial District, County of Los Angeles, 838 F.2d 1031, 1050 (9th Cir. 1988). In this case the plaintiffs could prevail on their substantive constitutional claims only by proving that they were discharged in retaliation for exercising their First Amendment rights. Since the jury found in favor of the plaintiffs it is obvious that the plaintiffs satisfied their burden of proof. Logically then, the jury determination of liability negates the defendants' qualified immunity defense. Cf. Wade v. Hegner, 804 F.2d 67, 72 (7th Cir.1986); Hobson v. Wilson, 737 F.2d 1, 29-30 (D.C.Cir.1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 142 (1985); Wood v. Sunn, 852 F.2d 1205, 1208 (9th Cir.1988), vacated, 880 F.2d 1011 (9th Cir. 1989).
Every court that has directly confronted this issue has determined that the subjective element of a plaintiff's substantive claim is distinct from the question of a defendant's entitlement to qualified immunity on the basis of his "objective reasonableness." See Auriemma v. Rice, 910 F.2d 1449, 1453-54 (7th Cir.1990); Feliciano-Angulo v. Rivera-Cruz, 858 F.2d 40, 45-47 (1st Cir.1988); Gutierrez, supra, 838 F.2d at 1047-51; Musso v. Hourigan, 836 F.2d 736, 741-43 (2d Cir.1988); Wade v. Hegner, 804 F.2d 67, 69-70 (7th Cir.1986); Losch, supra, 736 F.2d at 907; Goodwin v. Circuit Court of St. Louis County, Mo., 729 F.2d 541, 545-46 (8th Cir.1984); Mody v. City of Hoboken, 758 F.Supp. 1027, 1033 (D.N.J.1991); Garcia v. Williams, 704 F.Supp. 984, 997-98 (N.D.Cal.1988); Lacey v. Borough of Darby, Pa., 618 F.Supp. 331, 337 (E.D.Pa.1985); cf. McMillan v. Svetanoff, 793 F.2d 149, 155 n. 3 (7th Cir.1986).
The Eighth and Ninth Circuits have gone so far as to hold that qualified immunity is simply not available as a defense in these cases. In Goodwin the Eighth Circuit, rejecting the contention that the defendants were entitled to a qualified immunity jury instruction, stated:
If the jury finds that intentional discrimination has occurred, and if, as in this case, the evidence is sufficient to support that finding, "good faith" on the part of the defendant is logically excluded.
Id. at 546. The Ninth Circuit trenchantly analyzed the issue in Gutierrez:
If the plaintiff fails to establish that the discrimination was intentional, the claim fails. If the plaintiff does establish such intent, there can be no qualified immunity. Thus, it seems simpler to say that qualified immunity is not a defense in such cases, rather than that the defense prevails where proof of intentional discrimination is not established.
Id. at 1051, n. 29. The First Circuit underscored the reasonableness of this analysis in Feliciano-Angulo when it concluded that "[i]t may well be that once [the question of subjective intent is] settled, there will be no real immunity issue left to decide." Id. at 47.
The Seventh Circuit undertook the most extensive discussion of this issue in Wade v. Hegner, supra. Wade charged Hegner with intentional racial discrimination; to prevail under the substantive law of his claim, Wade was required to prove that Hegner had been motivated by impermissible considerations. In response to the defendant's claim that Harlow barred inquiry into his state of mind, the court stated:
Hegner confuses the "intent" issues in applying the Harlow standard. Two separate intent or state of mind issues exist in this case. One is related to the offense and the other is related to the defense. For purposes of the "offense" (whether Hegner discriminated) plaintiffs' supported allegations are assumed *913 true, including intent. Once those allegations demonstrate a constitutional violation, the issue of intent is put aside. Then the "defense" (qualified immunity) is analyzed without any reference to intent, as mandated by Harlow. Intent is relevant to the threshold question of whether the defendant violated plaintiffs' constitutional rights but is ignored for a question of whether that right was "clearly established" at the time of the incident.
Id. at 69-70. The court concluded that:
the district court must conduct a two-part analysis: (1) Does the alleged conduct set out a constitutional violation? and (2) Were the constitutional standards clearly established at the time in question? But appellate review of a denial of summary judgment on the issue of qualified immunity is limited to the legal question of whether the law was well established at the time of the conduct. Intent is relevant to (1) but not to (2).
Id.
The United States Supreme Court has not yet reached this issue. However, in Siegert v. Gilley, ___ U.S. ___, 111 S.Ct. 1789, 114 L.Ed.2d 277 (1991), Chief Justice Rehnquist clearly indicated that courts should determine whether the plaintiff has satisfactorily alleged a violation of his constitutional or statutory rights before going on to consider whether a defendant is entitled to qualified immunity. The Chief Justice wrote that,
We granted certiorari in order to clarify the analytical structure under which a claim of qualified immunity should be addressed. We hold that the petitioner in this case failed to satisfy the first inquiry in the examination of such a claim; he failed to allege the violation of a clearly established constitutional right.
Id. 111 S.Ct. at 1793. This case came before the Court in the context of a defendant's claim for qualified immunity. Although the Court's opinion indicates that it is discussing the proper procedure to be followed in addressing a claim for qualified immunity, it is clear that the court affirmed dismissal of the claim because Siegert's complaint failed to state a valid claim for relief, not because Gilley was entitled to qualified immunity.[4] The case by analogy thus supports the approach taken by the circuit courts in the cases discussed above.
As the reasoning in these cases demonstrates, where the right is clearly established, a defendant to a claim requiring proof of impermissible motive is not entitled to qualified immunity. If the plaintiff is unable to prove that the defendant's facially neutral acts were tainted by an unlawful motive, then the defendant's conduct does not "set out a constitutional violation." Wade v. Hegner, supra, at 70; cf. Siegert v. Gilley, supra, 111 S.Ct. at 1793. Having committed no unlawful act, there is no liability from which the defendant need claim immunity. Conversely, if the plaintiff does prove that the defendant acted with the requisite unlawful intent, then the defendant has violated the clearly established law and cannot claim immunity under Harlow. Finally, if after discovery a genuine issue of fact exists concerning the defendant's intent under the substantive law governing the plaintiff's claim, then that question (the question of liability) must be resolved by the jury. It follows a fortiori that under such circumstances it would be inappropriate to tender to the jury an instruction on qualified immunity.
Carefully distinguishing between the qualified immunity analysis and the subjective element of the substantive constitutional claim in no way diminishes the efficacy *914 of the qualified immunity defense. First, a public official will always be entitled to qualified immunity whenever a particular plaintiff fails to demonstrate that clearly established law prohibited the defendant's allegedly unlawful conduct. Second, just as a court can limit discovery to the issue of the defendant's intent when the inquiry proceeds under the rubric of "qualified immunity," see, e.g., Martin v. D.C. Metropolitan Police Department, 812 F.2d 1425, 1436-38 (D.C.Cir.1987), so too can discovery be limited to that very same issue when it proceeds in an effort to determine liability rather than qualified immunity. Finally, a defendant will be entitled to summary judgment on the merits after the close of the limited discovery permitted by the court whenever a plaintiff is unable to show that there are genuine questions of fact concerning the subjective element. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); and Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). This procedure will, therefore, neither impede a government official's right to be free of "the cost of trial [and] the burdens of broad-reaching discovery," Harlow v. Fitzgerald, supra, 457 U.S. at 817, 102 S.Ct. at 2738, nor deprive him of his right to "the resolution of many insubstantial claims on summary judgment." Id. at 818, 102 S.Ct. at 2738.
While the analytical distinction emphasized here in no way diminishes the various interests implicated by the qualified immunity defense, it does have the virtue of eliminating the foundation upon which the defendants base their arguments regarding this issue that is, the endemic confusion enveloping this area of the law.
C.
Despite the logical clarity of the law discussed above, in Pueblo Neighborhood Health Centers, Inc. v. Losavio, 847 F.2d 642 (10th Cir.1988), the Tenth Circuit inadvertently lent credence to the contention that under circumstances similar to those presented here, the qualified immunity defense should be submitted to the jury. Pueblo and the line of cases following it have created the mistaken impression that the existence of a genuine question of fact concerning the subjective element of a plaintiff's substantive claim always transforms the issue of qualified immunity into a question of fact. Yet this not only contradicts the authority discussed above, it is inconsistent with the court's admonition in the Pueblo decision itself that "[t]he question for the trial court to resolve is a legal one; the court cannot avoid the question by framing it as a factual issue." Id. at 646.
The trouble can be traced to one particularly thorny aspect of Harlow v. Fitzgerald, supra, 457 U.S. at 800, 102 S.Ct. at 2727. Harlow established a purely objective standard for the determination of qualified immunity. When government officials are performing discretionary functions, they will not be held liable for their conduct unless their actions violate clearly established statutory or constitutional rights of which a reasonable person would have known. See id. at 818, 102 S.Ct. at 2738. As the Tenth Circuit has noted, prior to Harlow,
qualified immunity contained both an objective and a subjective component. Because of its subjective component, qualified immunity was often ineffective in resolving insubstantial suits against government officials before trial.
Pueblo, supra, 847 F.2d at 645.
The pre-Harlow method of analysis had been set forth in Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975), where the Supreme Court articulated a two-pronged qualified immunity analysis. First, the objective prong directed that an official would be stripped of qualified immunity if he knew or reasonably should have known that his actions would violate a clearly established right. Second, under the subjective prong a public official who acted with malicious intent would lose his immunity even if the law was not clearly established. See id. at 322, 95 S.Ct. at 1001. The subjective prong proved to be a not insignificant barrier to disposing of marginal constitutional claims *915 prior to trial. See e.g., Landrum v. Moats, 576 F.2d 1320 (8th Cir.1978) and Duchesne v. Sugarman, 566 F.2d 817 (2d Cir.1977). In Harlow the Supreme Court foreclosed for the purposes of qualified immunity any inquiry into a government actor's state of mind. One effect of the decision is to preclude liability whenever the plaintiff fails to show that the right claimed to have been violated was not clearly established.
This objective analysis potentially conflicted with those claims based on facially neutral acts. As discussed in Part B of this opinion, acts which are otherwise lawful nevertheless violate the Constitution if the actors are motivated by unlawful considerations. Applied literally, the Supreme Court's unequivocal language in Harlow threatened to eviscerate the civil rights remedy in this class of cases. See, e.g., Halperin v. Kissinger, 807 F.2d 180, 183-87 (D.C.Cir.1986). Thus, in the seminal case of Martin v. D.C. Metropolitan Police Department, supra, 812 F.2d at 1425, the court held that in such cases Harlow did not preclude inquiries into subjective intent. See id. at 1433.
The Martin plaintiff alleged that the defendants arrested him in solely to "stop him from vindicating his legal rights." Id. at 1431. Martin's constitutional claim depended entirely upon proof of impermissible motive. The defendants contended that their evidence that they had acted in an objectively reasonable manner absolutely entitled them to qualified immunity. They argued that under Harlow the court was foreclosed from considering any evidence concerning their state of mind. Thus the Martin court was forced to resolve whether, under Harlow, a defendant who has demonstrated that he is entitled to qualified immunity in the absence of inquiry into his state of mind is entitled to foreclose proof by the plaintiff of the subjective element of his constitutional claim. The court rejected this attempt to use qualified immunity as a sword rather than a shield.
The Martin court, however, was not content with simply establishing this important rule of law. Instead, concerned that under its analysis courts might "lose sight of the goal the Harlow Court had in view when it set an objective standard in the qualified immunity context," id. at 1433, the court went on to discuss at length the manner in which courts could "strike a fair balance" between the government's interest in the prompt termination of vexatious suits on summary judgment and the public's interest in the vindication of constitutional rights. Id.
In Pueblo, the Tenth Circuit seized upon the Martin court's discussion of procedure. The plaintiffs' constitutional claims were governed by substantive law requiring proof of a subjective element. As in Martin, the defendants argued that Harlow foreclosed any consideration of their subjective intent and claimed that they were absolutely entitled to qualified immunity based on their showing of objective reasonableness. The Circuit rejected this argument, following Martin's reasoning. The Pueblo court ruled, however, that the defendants were entitled to summary judgment on the issue of qualified immunity because there existed no genuine issue of material fact concerning the subjective element of the plaintiffs' claims. Relying on the Martin dicta, the Circuit in Pueblo went on to discuss the proper analysis to be followed by courts whenever they were confronted with similar motions for summary judgment on the basis of qualified immunity. The Court thus concluded that, henceforth, defendants would be entitled to qualified immunity on a motion for summary judgment whenever "the plaintiff [fails to] point[] to specific evidence that the official's actions were improperly motivated" in those cases "[w]here the defendant's subjective intent is an element of the plaintiff's claim and the defendant has moved for summary judgment based on a showing of the objective reasonableness of his actions...." Pueblo, supra, 847 F.2d at 642.
It is difficult to quarrel with the result in Pueblo. There is nothing unsound about the Circuit's analysis. The defendants moved for summary judgment. In response, the plaintiffs were unable to establish the existence of a genuine issue of *916 material fact concerning one of the essential elements of their claims. Given the posture of the case there is no doubt that the defendant was entitled to judgment as a matter of law. See Celotex, supra, 477 U.S. at 322-23, 106 S.Ct. at 2552-53 and Liberty Lobby, Inc., supra, 477 U.S. at 247-48, 106 S.Ct. at 2509-10. Yet the decision has been criticized,[5] and in the three and one-half years since its publication the case has been cited favorably outside of the circuit only twice, once only in passing by the Ninth Circuit in Branch v. Tunnell, 937 F.2d 1382, 1386 (9th Cir.1991) and once in a concurring opinion. See Collinson v. Gott, 895 F.2d 994, 1002 (4th Cir.1990) (Phillips, J., concurring).
Pueblo's infirmity rests neither in its result nor in its reasoning. The problem with Pueblo, and that part of Martin on which it relies, is that it conflated the question of a defendant's liability under the substantive law governing a claim with the issue of a defendant's entitlement to qualified immunity. Instead of simply holding that the Pueblo defendants could not be held liable based on the uncontradicted evidence then before the court,[6] the court ruled that the same evidence which proved that the defendants had committed no constitutional violation entitled them to qualified immunity.
Yet it should be obvious that one who has done no wrong has no need for any kind of immunity. Regrettably, the Circuit reached its conclusion without directly confronting the distinction between the substantive law controlling the question of liability and the law applicable to the qualified immunity defense. The Pueblo court therefore had no occasion to consider the appropriateness of granting immunity on the basis of evidence that establishes that the immunized officer did not violate the law.[7] The Circuit thus opened the door to precisely the debate raging here. All this in spite of its otherwise unequivocal statements that qualified immunity is purely a question of law to be addressed by the Court, rather than a question of fact to be resolved by a jury.
With all due respect to the Circuit, this Court believes that in Pueblo and its progeny the Circuit has unnecessarily confused the nature of the qualified immunity analysis in cases of this sort. Like the First, Second, Third, Seventh, Eighth and Ninth Circuits, this Circuit should maintain a firm distinction between the plaintiff's burden of proof under the applicable substantive law and a defendant's entitlement to qualified immunity. When there is no proof to support a plaintiff's claim that a facially neutral act was infected by a defendant's constitutionally impermissible motive, the defendant is entitled to summary judgment because he has committed no act for which he can be held liable. In such situations the qualified immunity analysis is simply irrelevant. As discussed *917 above, this approach will protect civil servants from the burden of unwarranted litigation and thus will not undermine the considerations which guide the qualified immunity analysis. Government officials will be entitled to precisely the same panoply of procedural protections against unwarranted and frivolous lawsuits as they are currently.[8] Neither defendants nor plaintiffs will, however, be confused into believing that, through some jurisprudential gimmickry, a doctrine which has heretofore been unequivocally characterized as a question of law has mysteriously metamorphosed into a jury issue.
D.
Many of the issues addressed in this part of this opinion turn on a slight and seemingly insubstantial disagreement. The defendants in this case insist that proof that they did not violate the constitution entitles them to qualified immunity. This Court believes rather that an individual who has not violated the Constitution has no need for immunity. Notably, under either analysis the result will be the same: a failure of proof results in a ruling that the defendants cannot be held liable.[9] Some would say that this result moots the issue. Yet it is in the nature of the law that a seemingly insignificant difference often evolves into a source of tremendous confusion and dissension. Such has been the case here.
In any event, whether the Circuit agrees with this Court's analysis of the qualified immunity defense as it applies to impermissible motive constitutional claims, there is no doubt that under Melton v. City of Oklahoma City, supra, 879 F.2d at 726, the defendants were not entitled to a jury instruction addressing their qualified immunity defense. See also, Goodwin v. Circuit Court of St. Louis County, Mo., supra, 729 F.2d at 545-46.
II. Other Alleged Errors
The petition circulated by the plaintiffs clearly covered areas of public concern, specifically in its allegations of inefficiency and waste on the part of the University administration. See Schalk v. Gallemore, 906 F.2d 491 (10th Cir.1990). Simply because some of the allegations may have been "stale" or "erroneous" does not negate the petition's protected status. Id. at 496. See also Wulf v. Wichita, 883 F.2d 842, 858-59 (10th Cir.1989). On the whole, the issues presented in the petition qualify as those of "public concern" under Connick *918 v. Myers, 461 U.S. 138, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983).
Furthermore, there was no indication that Highland University's "interest in the effective and efficient fulfillment of its responsibilities to the public" was in any way threatened by the plaintiffs' petition. See Melton v. Oklahoma City, 879 F.2d 706, 713 (10th Cir.1989) (citing to Pickering v. Board of Education, 391 U.S. 563, 568, 88 S.Ct. 1731, 1734, 20 L.Ed.2d 811 (1968)). Therefore, the Court properly instructed the jury as to the protected nature of the plaintiffs' speech.
With respect to the qualified immunity analysis, I found that at the time these events took place in 1987 the protected nature of the plaintiffs' speech within the petition was sufficiently clear that the defendants were reasonably on notice that retaliation on the basis of the petition could not be "objectively reasonable." See Melton at 729. Thus, these public officials (the defendants) lost any immunity for actions in their individual capacities for violations of this clearly established law. See id.
The defendants further contend that they were entitled to instructions on the nature of their individual liabilities to the plaintiffs. Surely such an instruction could only serve to introduce sympathy and prejudice on the defendants' behalf. Defendants' assertion that the jury must have contemplated University payment of the punitive damages because of their size is unpersuasive. The jury imposed lower punitive damages as to defendant Rogers. Thus, it seems to have taken individual liability into account by imposing greater punishment on the more culpable defendants Sanchez and Jahner.
Moreover, the Court does not find the damage awards "so excessive as to shock the judicial conscience and to raise an irrestible inference that passion, prejudice, corruption, or other improper cause invaded the trial...." See Southwest Forest Industries, Inc. v. Sutton, 868 F.2d 352, 357 (10th Cir.1989). Little evidence adduced at trial addressed the financial status of the defendants, but enough was presented to aid the jury in its assessment of punitive damages. See plaintiffs' Brief at page 8-9. Although counsel for the defendants objected to the Court's instruction regarding how to assess punitive damages, he failed to provide an alternative. Instead, he indicated "I am not sure there is a standard for it, Your Honor."
Punitive damages are "designed to punish a wrongdoer who has purposely committed an act of extraordinary, outrageous misconduct, and has maliciously deprived another person of his or her rights" and the jury was so instructed. Court's Instruction # 44. A reasonable jury could be outraged by evidence that despite their long services to the University, plaintiff Sandoval was given 30 minutes to pack his belongings, and plaintiff Sanchez was given only one week notice. The jury could reasonably find that the circumstances warranted the imposition of punitive damages in the amounts it determined.
Defendants' objection to the conspiracy instruction is also without merit. See Cameo Convalescent Center, Inc. v. Senn, 738 F.2d 836 (7th Cir.1984). The issue of conspiracy under Section 1983 was litigated with the implied consent of the defendants. Indeed, under the facts of this case, evidence supporting a conspiracy was in fact indistinguishable from evidence under any of the plaintiffs' other theories. Plaintiffs properly tendered the appropriate instruction on a Section 1983 conspiracy. See Dixon v. City of Lawton, 898 F.2d 1443, 1448-49 (10th Cir.1990). Having found under Fed.R.Civ.P. 15(b) that the defendants had a fair opportunity to defend and were not prejudiced by amendment of the pleadings, the instruction on the conspiracy claim was proper.
Insofar as the defendants assert error instructing the jury on theories of substantive and procedural due process, the Court is unpersuaded that its instructions misstate the law of this Circuit. See Brenna v. Southern Colorado State College, 589 F.2d 475 (10th Cir.1978). Defendants object to the verdict's interrogatory *919 which asked whether defendants breached the employment contract between the University and the plaintiffs by not following the discharge procedures outlined in the Employee Manual.
Assuming that a breach of contract claim could only be addressed if the University were a party to the lawsuit, a new trial is still not required. This inquiry was relevant to the due process claims and no instructions were given authorizing an award of breach of contract damages. Even if these due process theories or the interrogatory regarding breach of contract could be said to interpose a false issue, their inclusion did not prejudice the defendants such that a new trial would be required. The court's instructions expressly prohibited duplication of damages or double recovery for injuries. "A fundamental premise of our jury system is that the jury can and will follow the instructions given by the trial court." U.S. v. Brown, 943 F.2d 1246, 1255 (10th Cir.1991).
In summary, issues of law related to the protected nature of the speech and entitlement to qualified immunity were properly decided by the Court. Moreover, the instructions to the jury were sufficiently accurate to guide the jury in its deliberations and any errors do not prejudice the defendants. Because its verdict is supported by evidence adduced at trial, the defendants' motion will be denied.
Wherefore,
IT IS ORDERED, ADJUDGED AND DECREED:
1. Defendant's Motion for Judgment Notwithstanding the Verdict, or in the Alternative for a New Trial, be, and hereby is, denied.
NOTES
[1] In Lutz the Tenth Circuit held that the district court erred when it submitted the qualified immunity defense to the jury. The court suggested, however, that a defendant might be entitled to a qualified immunity defense instruction in those cases presenting a fact issue under the "exceptional circumstances" exception articulated in Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). See id. at 343.
[2] In claims arising under the Fourth Amendment some circuits, including the Tenth Circuit, see Shank v. Naes, 773 F.2d 1121 (10th Cir.1985) and Bledsoe v. Garcia, 742 F.2d 1237, 1241 (10th Cir.1984), have approved submitting the qualified immunity defense to the jury. See Thorsted v. Kelly, 858 F.2d 571, 575 (9th Cir.1988); McElveen v. County of Prince William, 725 F.2d 954, 957-58 (4th Cir.1984); B.C.R. Transport Co., Inc. v. Fontaine, 727 F.2d 7, 10 (1st Cir.1984); Bauer v. Norris, 713 F.2d 408, 411 & n. 6 (8th Cir. 1983). The Court is not aware of any reported cases other than those arising under the Fourth Amendment in which a circuit court has approved submitting this defense to a jury. In light of Anderson v. Creighton, 483 U.S. 635, 107 S.Ct. 3034, 97 L.Ed.2d 523 (1987), treating the qualified immunity defense as a question of fact in 4th Amendment claims may be warranted, but only in those few cases "in which the facts as the jury found them constitute conduct that a reasonably objective official would not have known was unconstitutional." Rudovsky, Qualified Immunity in the Supreme Court, 138 U.Pa. L.Rev. 23, 72 (1989). This is not such a case. Additionally, none of the cases cited above contain an extensive discussion of the principles at issue; indeed, some seem to have proceeded under a misunderstanding of the applicable law. See McElveen, supra, 725 F.2d at 957-58 ("The County ... argues that in Harlow v. Fitzgerald the Supreme Court abolished the subjective element of the good-faith defense. We disagree.").
[3] Alternatively, the defendants may believe that the jury could have found both that the plaintiffs were terminated in retaliation for exercising their First Amendment rights and that the defendants were entitled to qualified immunity because their actions were "objectively reasonable." The Tenth Circuit clearly foreclosed this result in that portion of its opinion in this case quoted above. The absurdity of such a result is patent. The jury, having determined that the plaintiffs were fired for exercising their First Amendment rights, would have necessarily rejected the basis of the defendants' qualified immunity defense that is, the contention that the plaintiffs were terminated only as a part of the university-wide reorganization. It is precisely the possibility of such confusion that is avoided by addressing the qualified immunity defense as a question of law.
[4] Nowhere in its opinion does the Court state directly that the defendant was entitled to immunity, in spite of the fact that the Court clearly indicates that it is discussing an "approach to a claim of immunity." Id. 111 S.Ct. at 1794. Thus the opinion supports the proposition that in response to a motion for qualified immunity a court must first determine whether the plaintiff has made out a valid constitutional claim. Where the plaintiff cannot state a claim, or where (on a motion for summary judgment) his evidence fails to support such a claim, the Court should simply dismiss the case or grant summary judgment on the merits. Only if the plaintiff has satisfied the first test should a court go on to consider the defendant's entitlement to qualified immunity.
[5] See, Rudovsky, supra note 1, at 62 & n. 230.
[6] Given the posture of the case on interlocutory appeal, of course, such a ruling was procedurally unavailable to the court.
[7] This is a not uncommon flaw in many of the opinions addressing this issue. Typically, the court of appeals is presented with the issue after a district court rejects a defendant's motion for judgment based on the qualified immunity defense. The defendants make arguments similar to those advanced by the Pueblo defendants. The circuit court rejects these arguments but nevertheless states that qualified immunity would be appropriate if the plaintiff is unable to prove facts supporting his claim of impermissible intent. Curiously, these courts fail even to address those logical inconsistencies inherent in such a line of reasoning identified by the courts in Gutierrez, Goodwin, Losch, Wade, and Feliciano-Angulo. Thus, for example, Justice Scalia (sitting as Circuit Justice) cogently and extensively explicated Harlow's potential impact on impermissible motive claims in Halperin v. Kissinger, supra, yet never once even noted that the plaintiff's failure to satisfy an essential element of his substantive claim would exonerate the defendant. Thus Justice Scalia never addressed the relevance of the immunity doctrine under these circumstances. Even the Ninth Circuit, without addressing Gutierrez, has fallen prey to this problem. See Branch v. Tunnell, supra, 937 F.2d at 1382. See also, Poe v. Haydon, supra, 853 F.2d at 430-432; Coen v. Runner, 854 F.2d 374, 378 (10th Cir.1988); Martin, supra, 812 F.2d at 1433-38; and Kenyata v. Moore, 744 F.2d 1179, 1185 (5th Cir.1984). As a result, this Court is aware of no case in which any court has held that qualified immunity is available even though the defendant could not be liable under the substantive law.
[8] This methodology might bar interlocutory appeals in some cases. More significantly, in light of the law in this circuit, it might alter the plaintiff's burden in defense of a defendant's motion for summary judgment. After reviewing the plaintiff's evidence, the Pueblo court stated that,
[e]ven if these statements could be construed to allow a plaintiff to remain in court in an ordinary case, they will not be adequate in a case of this type. We agree with the Martin court that "[t]he Supreme Court's `strong condemnation of insubstantial suits against government officials' impels the application of a standard more demanding of the plaintiffs when public officer defendants move for summary judgment on the basis of their qualified immunity."
Pueblo, supra, 847 F.2d at 649 (emphasis added). This and other language throughout the opinion indicates that to resist either a motion to dismiss or a motion for summary judgment on the grounds of qualified immunity a plaintiff must satisfy a steeper burden than is otherwise applicable. Presumably, then, under the analysis proposed in this opinion the plaintiff would need only present evidence deemed sufficient in "an ordinary case." Id. Of course, the Circuit might not hesitate to impose the heightened standard even when the summary judgment issue does not directly reach the qualified immunity defense; obviously, in cases of this kind, the concerns underlying the qualified immunity analysis are implicated as much in an "ordinary" motion for summary judgment as they are in a motion for qualified immunity.
[9] Of course, qualified immunity "is an immunity from suit rather than a mere defense to liability." Mitchell v. Forsyth, 472 U.S. 511, 526, 105 S.Ct. 2806, 2815, 86 L.Ed.2d 411 (1985) (emphasis in original). As this court has taken great pains to demonstrate in the course of this opinion, its disagreement with the defendants would not undermine this concern. A plaintiff who failed to plead facts sufficient to support a claim of impermissible intent would not be able to withstand a motion to dismiss. Discovery can be limited to the issue of the defendant's intent. Summary judgment will be appropriate when a plaintiff cannot produce evidence sufficient to establish a genuine issue of fact regarding the defendant's intent. These are precisely the concerns identified by the court in Pueblo. See Pueblo, supra, 847 F.2d at 646, 649-650.
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777 F.Supp. 289 (1991)
ELITE INC., Petitioner,
v.
TEXACO PANAMA INC., Respondent.
No. 90 Civ. 7913 (JES).
United States District Court, S.D. New York.
November 5, 1991.
*290 Healy & Baillie, New York City, Jack A. Greenbaum, of counsel, for petitioner.
Hill Rivkins Liesberg O'Brien Mulroy & Hayden, New York City, Carlos G.E. Rameh, Douglas R. Burnett, of counsel, for respondent.
MEMORANDUM OPINION AND ORDER
SPRIZZO, District Judge.
Petitioner, Elite Inc., ("Elite") moves to vacate an arbitration award issued by the American Arbitration Association (the "AAA") on November 14, 1990. Respondent, Texaco-Panama Inc. ("Texaco") cross-moves to confirm that award. For the reasons that follow, petitioner's motion is denied, and respondent's motion is granted.
BACKGROUND
On or about May 25, 1988, Texaco chartered the M/T Fantasy L from Elite to transport a cargo of fuel oil and marine diesel oil from Bahia Las Minas, Panama to Cristobal, Panama. See Owner's Pre-Hearing Memorandum, Exhibit 20 of Exhibits in Opposition to Motion to Vacate Award at 1. A dispute arose when samples of the marine diesel oil taken after the voyage reflected contamination by fuel oil. Id. This dispute was arbitrated pursuant to a charter party in front of a three member panel appointed by the AAA, which after eight days of hearings, unanimously awarded $409,532.87 to Texaco. See Verified Petition to Vacate Arbitration Award at ¶ 20.
The issue in contention here is whether an award to Texaco was proper,[1] because Texaco was not the owner of the contaminated cargo. The relationship between Texaco and Texaco Antilles, the actual *291 cargo owner, is set out in a Tanker Transportation Agreement (the "Tanker Agreement"), pursuant to which Texaco charters vessels for Texaco Antilles' petroleum products and Texaco Antilles pays freight to Texaco for each voyage.
Elite argued before the arbitrators that Texaco, since it did not actually own the cargo, could only be entitled to damages from Elite if it had an enforceable obligation to indemnify Texaco Antilles, an obligation which no longer existed because the applicable statute of limitations barred any claim by Texaco Antilles against Texaco.[2] Elite therefore contends that the arbitrators manifestly disregarded the law in not sustaining the statute of limitations defense which Texaco could have successfully asserted against Texaco Antilles and which Caribbean Steamship v. Sonmez, 598 F.2d 1264 (2d Cir.1979), also permits Elite to assert against Texaco.[3]
Texaco refuted Elite's contention before the arbitrators by arguing that any claim that Texaco Antilles might have against Texaco is governed by the six year statute of limitations for contract claims under New York law, and not the one year period set forth in COGSA. They therefore now contend that the arbitrators committed no error in finding that Texaco was entitled to an award, and certainly did not wilfully disregard the law.[4]
DISCUSSION
To find that the arbitrators manifestly disregarded the law, there must have been "something beyond and different from a mere error in the law or failure on the part of the arbitrators to understand or apply the law." Fahnestock & Co. v. Waltman, 935 F.2d 512, 516 (2d Cir.1991) (citations omitted). See Carte Blanche (Singapore) v. Carte Blanche Int'l, 888 F.2d 260, 265 (2d Cir.1989); Merrill Lynch, Pierce, Fenner & Smith v. Bobker, 808 F.2d 930, 933-34 (2d Cir.1986); Siegel v. Titan Indus. Corp., 779 F.2d 891, 892 (2d Cir.1985). The alleged error "must have been obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator," and the governing law alleged to have been disregarded by the arbitrators must be "well defined, explicit, and clearly applicable." Carte Blanche (Singapore) v. Carte Blanche Int'l, 888 F.2d 260, 265 (2d Cir. 1989) (quoting Merrill Lynch, Pierce, Fenner & Smith v. Bobker, 808 F.2d 930, 933-34 (2d Cir.1986). Tested by that standard, Elite has plainly failed to carry its burden of demonstrating that the arbitrators deliberately disregarded clearly applicable law. See Fried, Krupp, GmbH v. Solidarity Carriers, Inc., 674 F.Supp. 1022 (S.D.N.Y.), aff'd, 838 F.2d 1202 (2d Cir.1987).
*292 Elite did not present any case law to the arbitrators which clearly required a one year statute of limitations to be applied. Indeed, Elite's claim that COGSA's one year statute of limitations would apply to a claim between Texaco and Texaco Antilles was based upon an interpretation of a complex series of documents, which incorporate various contracts and documents by reference. Nowhere in any of these documents is it unquestionably evident that the COGSA one year statute of limitations applies so that "the average person qualified to serve as an arbitrator" could not have concluded otherwise. Merrill Lynch, Pierce, Fenner & Smith v. Bobker, 808 F.2d at 933. Since manifest disregard will generally only be found where the arbitrators "`understood and correctly stated the law but proceeded to ignore it,'" Fahnestock, 935 F.2d at 516 (quoting Siegel v. Titan Indus., 779 F.2d 891, 893 (2d Cir.1985), it follows that the arbitrators' decision to award Texaco damages by accepting Texaco's argument that a six year statute of limitations applies cannot be more than "a mere error in law or failure on the part of the arbitrators to understand or apply the law," Saxis Steamship Co. v. Multifacs Int'l Traders, Inc., 375 F.2d 577, 582 (2d Cir.1967), assuming that any error was made at all.[5]
Elite further argues that the arbitrators were guilty of misbehavior and of exceeding the scope of their authority when they accused Elite of attempting to steal cargo by means of "surreptitious" piping. This contention borders on the frivolous. Elite's argument is based on isolated statements by the arbitrators which in fact were made to help clarify the potential source of contamination to the fuel. These statements can hardly be seen as beyond the scope of the arbitrators' authority, especially in light of the fact that the AAA commercial arbitration rules, to which the parties agreed to abide, allow the arbitrators to consider any evidence deemed "necessary to an understanding and determination of the dispute." See AAA Commercial Arbitration Rule 31. Indeed, the Second Circuit has stated that "a court must accord the `narrowest of readings' to the `excess of powers' provision of 9 U.S.C. § 10(d)." Kerr-McGee Refining Corp. v. M.T. Triumph, 924 F.2d 467, 471 (2d Cir.1991) (quoting Andros Compania Maritima, S.A. v. Marc Rich & Co., A.G., 579 F.2d 691, 703 (2d Cir.1978)).
Similarly, there is no merit to Elite's contention that the arbitrators prejudged the merits of the case simply because a statement was made that there is no doubt that contamination did occur, especially since the arbitrator did not express any opinion as to the cause of that contamination, and merely made this observation in an attempt to explain why the panel was inquiring further into the ship's piping layout. See Petition at Exhibit H, pp. 519-524.
Finally, Texaco claims it is entitled to attorneys' fees and costs with respect to the instant motion under Clause 27 of the charter party which provides that "[d]amages for breach of this Charter shall include all provable damages, and all costs of arbitration suit and attorneys' fees incurred in any action hereunder." See Petition at Exhibit A. Elite simply argues, without any support in the language of the charter agreement itself, that a dispute as to the arbitrators conduct is not within that clause. There is no merit to that argument. The language of the charter clearly supports Texaco's claim that attorneys' fees and costs are recoverable with respect to any action arising under that agreement.
CONCLUSION
For the reasons given above, petitioner's motion to vacate the arbitration award is *293 denied, and respondent's cross-motion to confirm the award is granted. The Clerk of the Court is directed to enter a judgment accordingly and to close the above-captioned action.
It is SO ORDERED.
NOTES
[1] There is no dispute that Texaco had standing to seek arbitration because the arbitration was brought pursuant to a charter to which Texaco was a party.
[2] Elite's statute of limitations argument is based on the fact that the Tanker Agreement incorporates the terms of the "TEXACOVOY" form of charter party, which in turn incorporates the Carriage of Goods by Sea Act of the United States ("COGSA"). One provision of COGSA provides that all claims for loss or damage must be brought within one year after delivery, 46 U.S.C. § 1303(6), and more than one year had elapsed prior to the time that the claim was asserted.
[3] Elite's memorandum of law also argues that the arbitrators, by awarding damages to Texaco, exceeded the scope of their authority in violation of 9 U.S.C. § 10(d) (1988), as amended by Act of Nov. 15, 1990, 9 U.S.C.A. § 10(a)(4) (Supp.1991). This argument is refuted by the broad language in the arbitration agreement, which refers to arbitration "any and all disputes of whatsoever nature arising out of this Charter." See Notice of Motion on Petition to Vacate Arbitration Award at Exhibit A. Since federal arbitration policy requires courts to "construe arbitration clauses as broadly as possible," David L. Threlkeld & Co. v. Metallgesellschaft Ltd. (London), 923 F.2d 245, 250 (2d Cir.1991) (quoting S.A. Mineracao da Trindade-Samitri v. Utah Int'l, Inc., 745 F.2d 190, 194 (2d Cir.1984)), and "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration," Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983), the arbitrators clearly did not exceed the scope of their authority in awarding Texaco damages. In any event, Elite waived this argument by submitting the real party in interest issue to the arbitrators, and indeed, by declining to accept the suggestion of the chairman of the panel to seek a stay of arbitration pending judicial resolution of the arbitrability of that issue.
[4] Caribbean Steamship termed the type of claim that Texaco brought an accelerated indemnity claim and allowed it to be asserted so long as there was potential liability on the part of the indemnitor.
[5] Moreover, in claiming a manifest disregard of the law, Elite is assuming that the only ground for the arbitral award was the accelerated indemnity claim. This is not necessarily true. Another basis for the decision could have been that Texaco was entitled to recover in its own right based upon its relationship to Texaco Antilles. Indeed, Texaco presented arbitration cases to the panel wherein chartering affiliates were allowed to recover based upon their close relationship to the cargo owner. Regardless of whether these cases were correct statements of the law, the arbitrators' decision to follow them could likewise amount to no more than an error of law.
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777 F.Supp. 40 (1991)
UNITED STATES of America
v.
Thomas Nathaniel SHORT and Casey Donszell Green.
Crim. No. 91-0500 (JHG).
United States District Court, District of Columbia.
November 5, 1991.
*41 Asst. U.S. Atty. Michael Volkov, Washington, D.C., for U.S.
James L. Lyons, Kellogg, Williams & Lyons, Washington, D.C., for Green.
MEMORANDUM OPINION
JOYCE HENS GREEN, District Judge.
Presently pending is defendant Casey Donszell Green's ("Green") motion to dismiss the indictment without prejudice based on the government's failure to reveal allegedly exculpatory evidence to the grand jury. For the following reasons, Green's motion is granted.
I. BACKGROUND
On August 27, 1991, the grand jury returned a one-count indictment against the defendants for possession of cocaine base, also known as crack, with the intent to distribute, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(B)(iii). The indictment was based on the August 1, 1991 seizure of approximately 9.6 grams of crack found under the floor mat on the driver's side of an automobile that co-defendant Thomas Nathaniel Short ("Short") was driving and in which Green was a passenger.
During the processing of the defendants at the Sixth District following their arrest, co-defendant Short gave a signed statement to the police in which he acknowledged that the cocaine base found in the car was his and that he had bought the substance in Barry Farms, S.E., Washington, D.C. Short also stated that the crack did not "belong to" defendant Green. See Exhibit A to Defendant Green's Motion to Dismiss Indictment Without Prejudice ("Def. Motion"), at 1. Specifically, in response to the question, "Do the narcotics belong to the passenger who was with you?" Short stated, "No." Exhibit A, at 1.[1]
During the presentation of the case to the grand jury, the Assistant United States Attorney asked the government witness, Officer Raymond S. Chairs, whether "any-one [made] any statements." Officer Chairs responded, "Yes, ma'am, Mr. Short." In response to the government's next inquiry, "And what did he say?" Officer Chairs indicated that Short "gave a statement to the vice officer, Officer Dunstan, at which time, he admitted that he knew drugs were in the vehicle when the vehicle pulled off; and that they were, in fact, his drugs." Grand Jury Transcript, Exhibit B to Def. Motion, at 5. With that response, the government concluded its examination of Officer Chairs. Whether inadvertently or intentionally, the government failed entirely to elicit testimony before the grand jury concerning that portion of Short's statement in which he had said that the crack did not "belong to" Green.
II. DISCUSSION
In his motion to dismiss, Green argues that the prosecution has a duty to present "substantial" exculpatory evidence to the grand jury, that the government failed to present such evidence, and that the failure to present the material substantially prejudiced Green. The government argues, in contrast, that even if the Court finds a duty on the part of the government to disclose "substantial exculpatory evidence," the evidence to which Green points *42 does not "substantially" exculpate the defendant. The Court cannot accept the government's position.
There are two views concerning the duty of a prosecutor to present exculpatory evidence to a grand jury. Some courts have held that the government need not disclose such information. See United States v. Adamo, 742 F.2d 927 (6th Cir. 1984), cert. denied, 469 U.S. 1193, 105 S.Ct. 971, 83 L.Ed.2d 975 (1985); United States v. Sears Roebuck & Co., 719 F.2d 1386 (9th Cir.1983), cert. denied, 465 U.S. 1079, 104 S.Ct. 1441, 79 L.Ed.2d 762 (1984). These courts have reasoned that exculpatory evidence need not be presented because "[t]he grand jury does not weigh the guilt or innocence of the accused but acts only to make a preliminary determination whether there is probable cause to believe him guilty of a crime." Sears, 719 F.2d at 1394. Other courts have held that although the government need not present all conceivably exculpatory evidence to the grand jury, it must present evidence that clearly negates guilt. See United States v. Williams, 899 F.2d 898 (10th Cir.1990), cert. granted, ___ U.S. ___, 112 S.Ct. 294, 116 L.Ed.2d 239 (1991); United States v. Flomenhoft, 714 F.2d 708 (7th Cir.1983), cert. denied, 465 U.S. 1068, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984); United States v. Ciambrone, 601 F.2d 616 (2d Cir.1979); United States v. Recognition Equipment, Inc., 711 F.Supp. 1 (D.D.C.1989); United States v. Phillips Petroleum Co., 435 F.Supp. 610 (N.D.Okla.1977).
Although the Court of Appeals for this Circuit has not yet decided the issue, the decisions of the Tenth, Seventh, and Second Circuits follow the sounder rule. While "the prosecutor is not obliged to ferret out and present every bit of potentially exculpatory evidence,"[2] this Court agrees with those jurisdictions that have held that "the prosecution may [not] hide evidence that clearly negates guilt from the grand jury." United States v. Recognition Equipment, Inc., 711 F.Supp. 1, 12 (D.D.C.1989). Such a requirement "promotes judicial economy because `if a fully informed grand jury cannot find probable cause to indict, there is little chance the prosecution could have proved guilt beyond a reasonable doubt to a fully informed petit jury.'" Williams, 899 F.2d at 900 (citing United States v. Page, 808 F.2d 723 at 728 (1987)).
It is clear that the government withheld "substantial" exculpatory evidence from the grand jury. The government failed to present that portion of Short's statement in which he accepted total responsibility for the alleged drug transaction and indicated to the officer that the crack did not "belong to" Green. Such a statement is clearly relevant to a determination of Green's guilt.[3] And although the Court recognizes that the burden of proof at trial is obviously greater than the probable cause finding by the grand jury, the government's presentation to the grand jury surely must be based upon the essential elements of the offense.
Having concluded that the government withheld substantial exculpatory material from the grand jury, the Court must next consider whether Green was prejudiced by the government's failure to disclose such information. Specifically, the Court must determine "whether any violations had an effect on the grand jury's decision to indict. If violations did substantially influence this decision, or if there is grave doubt that the decision to indict was free from such substantial influence, the violations cannot be deemed harmless." Bank of Nova Scotia v. United States, 487 U.S. 250, 108 S.Ct. 2369, 2378, 101 L.Ed.2d 228 (1988).
*43 Applying these principles, it is apparent that the failure of the prosecution to present Short's complete statement to the grand jury could certainly have had a "`substantial influence' on the indictment." Williams, 899 F.2d at 904 (citations omitted). The Court cannot conclude with fair assurance that had the exculpatory evidence been presented, the grand jury would still have indicted Green. First, Officer Chairs had testified before the grand jury that the actions he observed at 58th and Blaine Streets constituted a "possible narcotics deal," not a probable drug transaction. Exhibit B, at 4. Moreover, the crack was allegedly found under the floor mat on the driver's side of the car. Finally, no money was recovered from Green.
Thus, while the government may elect to present Short's complete statement to the grand jury for another determination of probable cause as to Green, the Court cannot allow the present indictment to stand.
III. CONCLUSION
Accordingly, for the reasons expressed above, it is hereby
ORDERED that defendant Green's motion to dismiss the indictment without prejudice is granted.
IT IS SO ORDERED.
NOTES
[1] Short also identified the "passenger" to whom the officer referred as Green. Exhibit A, at 2.
[2] United States v. Page, 808 F.2d 723, 728 (10th Cir.), cert. denied, 482 U.S. 918, 107 S.Ct. 3195, 96 L.Ed.2d 683 (1987).
[3] The defendant urges the Court to consider as "substantial" exculpatory evidence Short's complete statement to the police, testimony that the crack was found under the floor mat on the driver's side of the car, and testimony that no money of any denomination was recovered from Short. Because the Court finds that Short's statement to the police is substantial exculpatory material, it need not decide whether testimony that crack was found on the driver's side of the car or that no money was found on Green is clearly exculpatory.
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280 Pa. Superior Ct. 45 (1980)
421 A.2d 396
William G. HAMILTON, t/d/b/a Hamilton Maintenance
v.
John HARIDA and Sharon Harida, his wife, Appellants,
v.
WOODLAWN BUILDERS, INC.
Superior Court of Pennsylvania.
Argued November 16, 1979.
Filed July 25, 1980.
*46 *47 Sanford S. Finder, Washington, for appellants.
Charles Bell, Washington, for Hamilton, appellees.
Thomas R. Solomich, Pittsburgh, for Woodlawn Builders, appellee.
*48 Before CERCONE, President Judge, and PRICE, SPAETH, HESTER, CAVANAUGH, HOFFMAN and MONTGOMERY, JJ.
SPAETH, Judge:
This is an appeal from an order striking an appeal from an arbitration award for failure to file sufficient recognizance.[1]
On December 22, 1977, an arbitration panel entered an award against appellants in the amount of $1,146.49, with interest and costs. On January 9, 1978, appellants filed a timely appeal from the award and filed a cash bond of $100 with the prothonotary of the lower court; appellants also paid costs of $70.75 and the arbitrators' fee of $105.
Appellee filed a motion to strike the appeal, alleging that appellants' bond was insufficient. In support of its position, appellee cited the lower court's Local Rule L-806-9(a), which states in pertinent part:
A defendant-appellant shall file a recognizance bond, the condition of which shall be that if the plaintiff in the event of a suit shall obtain a judgment for a sum equal to or greater, or a judgment as or more favorable than the award of the Arbitrators, the defendant shall pay all costs of the appeal together with the sum or value of the property or things awarded by the Arbitrators.
This rule is modeled on the Act of June 16, 1836, P.L. 715, § 30, as amended, 5 P.S. § 75 (Purdon's 1963) (repealed 1980), which provides:
If the defendant be the appellant, he shall, by himself, his agent or attorney, with one or more sufficient sureties, in the nature of special bail, be bound in recognizance to the plaintiff, the condition of which shall be, that if the plaintiff, in the event of the suit, shall obtain a judgment *49 for a sum equal to or greater, or a judgment as or more favorable than the award of the arbitrators, the said defendant shall pay all the costs that may accrue in consequence of the said appeal, together with the sum or value of the property or thing awarded by the arbitrators, with one dollar for every day that shall be lost by the plaintiff in attending to such appeal, or in default thereof, that the said defendant shall be surrendered to the jail of the proper county.
Appellants filed an answer to the motion to strike, alleging that the local rule violated the Act of March 20, 1845, P.L. 188, § 1, 42 P.S. § 921 (Purdon's 1966) (repealed 1980), which provides:
In lieu of the bail heretofore required by law, in the cases herein mentioned, the bail in cases of appeal from the judgments of aldermen and justices of the peace, and from the awards of arbitrators, shall be bail absolute, in double the probable amount of costs accrued and likely to accrue in such cases, with one or more sufficient sureties, conditioned for the payment of all costs accrued or that may be legally recovered in such cases against the appellants.
On April 24, 1979, the lower court by "memorandum and order" concluded that the local rule and the Act of 1836 controlled and gave appellants seven days in which to file a recognizance sufficient to comply with them. Appellants refused to do so, and on May 1 the prothonotary struck their appeal. On May 23, appellants appealed to this court.[2]
Since the Act of 1845 does not explicitly repeal the Act of 1836, we may not conclude that it repealed the Act of *50 1836 unless the two statutes are irreconcilable, for it is long-settled that repeals by implication are not favored. Pennsylvania Turn. Com'n v. Sanders & Thomas, Inc., 461 Pa. 420, 336 A.2d 609 (1975) (quoting Parisi v. Philadelphia Zoning Board of Adjustment, 393 Pa. 458, 462, 143 A.2d 360 (1958)); 1 Pa.C.S.A. § 1971 (Purdon's Supp. Pamphlet 1964-1978). Here, however, the two statutes are irreconcilable. Under the Act of 1845 the amount of "bail" required is "double the probable amount of costs," whether the appellant be the plaintiff or the defendant. This provision cannot be reconciled with the provision of the Act of 1836 that "[i]f the defendant be the appellant," "special bail" is required in the amount of "all the costs . . . together with the sum . . . awarded by the arbitrators, with one dollar for every day that shall be lost by the plaintiff." We therefore hold that insofar as the Act of 1836 requires a defendant appealing an arbitration award to file "special bail" in an amount greater than the amount of the "bail" required by the Act of 1845, it was implicitly repealed by the Act of 1845. See Swartz v. Capital Refrig. (No. 1), 62 Pa.D. & C.2d 672 (Cumberland Co. 1973); O'Donnell v. Forgeville Corporation, 45 Pa.D. & C.2d 474 (Chester Co. 1967); Juliano v. Massimo, 17 Pa.D. & C.2d 635 (Dela. Co. 1960); Cf. Shuff v. Morgan, 7 Pa. 125 (1847) (requirement in Act of 1836 that recognizance include one dollar a day for time plaintiff loses implicitly repealed by Act of 1845). It follows that the lower court's local rule was of no effect, for a court may not by local rule impose a requirement that the General Assembly has said may not be imposed. Weber v. Lynch, 473 Pa. 599, 375 A.2d 1278 (1977); Klugman v. Gimbel Bros., Inc., 198 Pa.Super. 268, 182 A.2d 223 (1962).
We note that the cash bond of $100 filed by appellants did not satisfy the requirements of the Act of 1845. In Beth-Allen Sales Co. v. Hartford Ins. G., supra, which involved a plaintiff's appeal under the Act of 1836, this court characterized as "questionable" the argument that a cash bond was an adequate substitute for the appearance of a surety. 217 Pa.Super. at 48, 268 A.2d at 206. See Coates v. *51 Rodemoyer, supra. Here, appellants accompanied their deposit of money with a document by which they bound themselves, "as surety," to pay appellee $100. A principal, however, cannot act as his own surety. Suretyship is a three-party relationship, the surety being distinct from the principal whose debt the surety undertakes to guarantee. See, e.g., Brock's Assigned Estate (No. 1), 312 Pa. 7, 166 A. 778 (1933). Since the Act of 1845 requires "bail . . . in double the probable amount of costs accrued and likely to accrue . . ., with one or more sufficient sureties," it was necessary that a surety appear before the prothonotary to guarantee appellants' obligation under the Act of 1845. The remedy for this failure, however, is not to quash the appeal, but to remand the case to give appellants the opportunity to file proper bail. Beth-Allen Sales Co. v. Hartford Ins. G., supra; Gable v. Chintala, 212 Pa.Super. 471, 243 A.2d 487 (1968); New Castle Metal Products v. Campbell, 131 Pa.Super. 367, 200 A. 118 (1938).
The order of the lower court is reversed and the case is remanded with instructions to reinstate the appeal from the arbitration award upon appellants' filing of bail as required by the Act of 1845.
PRICE, J., files a dissenting opinion in which HOFFMAN, J., joins.
PRICE, Judge, dissenting:
I would quash this appeal. The issue is collateral to the case-in-chief and, therefore, interlocutory. An appeal is not permitted. This principle has been established to prevent the fragmentation of appeals and the unnecessary overburdening of appellate courts on collateral issues. Pugar v. Greco, 483 Pa. 68, 394 A.2d 542 (1978), Gommer v. Kotch, 256 Pa.Super. 20, 389 A.2d 155 (1978). The majority opinion is an example of the possibility of double review by considering the merits of appellants' collateral claim and then remanding for proceedings on the case-in-chief upon filing of proper bond.
*52 Appellants were given the opportunity to post bond, continue with their appeal of the arbitration award having preserved the issue of bond, and after a decision on the case-in-chief take an appeal raising this bond issue plus any others that arose. Appellants refused to take that proper course. Having made that election and having put themselves out of court, they should not be given this second chance.
The appeal should be quashed.
HOFFMAN, J., joins in this opinion.
NOTES
[1] A recognizance is not the same as a bond. A bond is an instrument signed and sealed by the principal and his surety conditioned on the payment of a sum of money; it is said to create a new debt. A recognizance does not create a new debt, but is an acknowledgment of an existing debt; it need not be signed by the parties. See Coates v. Rodemoyer, 41 Pa.D. & C.2d 593 (Mercer Co. 1966).
[2] This appeal is not interlocutory. An order quashing an appeal from arbitration is a final order, which may be appealed. B & B, Inc. v. Home for Accepted, 223 Pa.Super. 518, 335 A.2d 722 (1975); Manton v. Marini, 218 Pa.Super. 298, 280 A.2d 403 (1971); Beth-Allen Sales Co. v. Hartford Ins. G., 217 Pa.Super. 42, 268 A.2d 203 (1970). Although the lower court's order of April 24 did not itself quash the appeal, and might therefore be considered interlocutory, the prothonotary's order of May 1 striking the appeal supplied whatever element of finality was missing.
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777 F.Supp. 1355 (1991)
Ebel GAITAN-CAMPANIONI, et al., Applicants,
v.
Richard THORNBURGH, Attorney General, Respondent.
No. 9:90 CV 157.
United States District Court, E.D. Texas, Lufkin Division.
November 7, 1991.
Stefan H. Krieger, SMU, School of Law, Dallas, Tex., for applicants.
Dane H. Smith, Asst. U.S. Atty., Tyler, Tex., for respondent.
MEMORANDUM OPINION
JUSTICE, District Judge.
Applicants, Ebel Gaitan-Campanioni, Carlos Alberto Prado Torriente, and Victor Kessel Rodriguez (collectively, "applicants") are Mariel Cubans who arrived on the Freedom Flotilla of Cubans to this country in early 1980. Currently, they are being detained in federal prison, by order of the Attorney General, pending their return to Cuba. Cuba, however, refuses to take them back. Applicants have applied for writs of habeas corpus, challenging *1356 their detention by the Attorney General on the grounds, among others, that the Attorney General lacks statutory authority to detain indefinitely an excludable alien; that the nature of their detention constitutes punishment imposed in violation of Fifth and Sixth Amendment guarantees of trial by jury prior to the imposition of criminal punishment; that their detention violates customary international law; that they have a liberty interest in freedom from detention; and that the Attorney General's procedures for awarding parole do not comport with due process. This court has consolidated the claims of the applicants, and appointed counsel. Applicants have moved, in accordance with Rule 6 of the Rules Governing Section 2254 Cases in the United States District Courts [hereinafter Federal Habeas Rules], for an order allowing discovery. For the reasons stated below, the motion will be granted.
I. Authority To Grant Discovery
Rule 6(a) of the Federal Habeas Rules provides:
a party shall be entitled to invoke the processes of discovery available under the Federal Rules of Civil Procedure if, and to the extent that, the judge in the exercise of his discretion and for good cause shown grants leave to do so.....[1]
Although discovery is permitted only by the leave of the court, the court should not hesitate to allow discovery, where it will help illuminate the issues underlying the applicant's claim. Rule 6, Advisory Committee Note ("[d]iscovery may, in appropriate cases, aid in developing facts necessary to decide whether to order an evidentiary hearing or to grant the writ following an evidentiary hearing"). See also Harris v. Nelson, 394 U.S. 286, 89 S.Ct. 1082, 22 L.Ed.2d 281 (1969); Developments in the Law Federal Habeas Corpus, 83 Harv. L.Rev. 1038, 1179-87 (1970).
II. Discovery Sought
In accordance with Rule 6(b), applicants have attached interrogatories and a request for document production that they intend to submit to Respondents. Interrogatories 1-8 seek information regarding: 1) the efforts made by the United States to deport each applicant to Cuba or to a country other than Cuba (Interrogatories 2-3); 2) the reasons for the detention of each applicant (Interrogatory 4); 3) the reasons for the refusal to parole each applicant, including information regarding the applicant's likelihood to commit violence and/or break parole (Interrogatory 5); 4) the applicant's past disciplinary infractions, and psychiatric and psychological reports pertaining to mental health (Interrogatory 6)); 5) the reasons why each applicant was detained in the particular institution in which they were confined (Interrogatory 7); and 6) whether or not the detention is temporary (Interrogatory 8).[2]
In addition, applicants have sought documents regarding 1) the parole determinations and revocations for each applicant (Document Request 1(a)); 2) attempts to deport applicants to Cuba or to other countries (Document Request 1(b)); 3) the decision to detain each applicant (Document Request 1(c)); 4) the manuals, handbooks or guides used in making parole determination and revocation decisions for each applicant (Document Request 2); and 5) documents relating to bilateral talks and discussions with Cuba regarding the Migration Agreement with Cuba (Document Requests 3-4).
III. Good Cause To Award Discovery
All of the above information appears to be relevant to applicants' claims, and it is found that there is good cause to order discovery of this material. The essence of applicants' complaint is that both the Immigration and Nationalization Act (INA) 8 U.S.C. § 1101 et seq., and the constitutional *1357 prohibition on imposing punishment without indictment and trial, prevent the Attorney General from detaining an excludable alien for longer than a reasonable period of time in which to effect the exclusion of the alien. See Amanullah v. Nelson, 811 F.2d 1, 9 (1st Cir.1987); Rodriguez-Fernandez v. Wilkinson, 654 F.2d 1382, 1387 (10th Cir.1981). Applicants, therefore, will seek to demonstrate that their continued detention, over ten years since their arrival, is unreasonable under the circumstances of this case. Apparently, they will endeavor to show that the government has not made reasonable efforts to deport them, see Amanullah, 811 F.2d at 9, or alternatively, that the government has no reasonable prospects of deporting them, and, therefore, that the detention is indefinite, rather than temporary. See Rodriguez-Fernandez, 654 F.2d at 1386. Information gathered from Interrogatories 2, 3 and 8, and Document Requests 1(b), 3, and 4 would be relevant to such a showing.
Applicants also argue that the conditions and length of their detention constitute punishment, which cannot be imposed without a trial and a grand jury indictment. See Bell v. Wolfish, 441 U.S. 520, 535, 99 S.Ct. 1861, 1872, 60 L.Ed.2d 447 (1979) ("under the Due Process Clause, a detainee may not be punished prior to an adjudication of guilt in accordance with due process of law"); Rodriguez-Fernandez, 654 F.2d 1382 (10th Cir.1981). In United States v. Salerno, 481 U.S. 739, 746, 107 S.Ct. 2095, 2101, 95 L.Ed.2d 697 (1987), the Court held that detention without trial was generally permissible only if it was imposed for some regulatory reason other than punishment. See also Schall v. Martin, 467 U.S. 253, 264-74, 104 S.Ct. 2403, 2409-415, 81 L.Ed.2d 207 (1984); Bell, 441 U.S. at 535, 99 S.Ct. at 1872. In determining whether detention was permissible regulation or impermissible punishment, the Salerno Court held that the following factors were relevant: the purpose of the detention; whether the conditions of detention are reasonable in relation to the nonpunitive purpose; the nature of the procedures under which detention may be imposed; and whether the detainees are housed in facilities separate from persons imprisoned after conviction of a crime. Salerno, 481 U.S. at 747-48, 107 S.Ct. at 2101-02. In this case, applicants are seeking to show that their detention is punishment. Clearly, information from Interrogatories 2-7, and Document Requests 1-4 would bear on the factors mentioned in Salerno, and would therefore be relevant to demonstrating punishment.
Respondent opposes discovery primarily on two grounds. First, respondent argues that there is absolutely no merit to the applicants' argument that their detention is punishment imposed without indictment or trial. However, a survey of the applicable case law clearly refutes the respondent's position. In Rodriguez-Fernandez, 654 F.2d 1382 (10th Cir.1981), the Tenth Circuit held that indefinite detention of excludable Mariel Cubans constituted punishment that could not be imposed without due process protections. Other courts have rejected constitutional challenges to the detention of excludable aliens. Alvarez-Mendez v. Stock, 941 F.2d 956, 962 (9th Cir.1991); Jean v. Nelson, 727 F.2d 957, 967-75 (11th Cir.1984) (en banc), aff'd on other grounds, 472 U.S. 846, 105 S.Ct. 2992, 86 L.Ed.2d 664 (1985); Fernandez-Roque v. Smith, 734 F.2d 576 (11th Cir.1984); Palma v. Verdeyen, 676 F.2d 100, 104 (4th Cir.1982). There is, therefore, a split in the judicial circuits regarding whether or not the detention of excludable aliens constitutes punishment. Indeed, in Jean, the Court construed the regulations promulgated under the INA, so as to avoid the question of whether the refusal to parole the detainees violated their rights to due process.[3] 472 U.S. 846, 854, 105 S.Ct. 2992, 2996.
*1358 The Supreme Court's decision in Shaughnessy v. United States ex rel. Mezei, 345 U.S. 206, 215, 73 S.Ct. 625, 630, 97 L.Ed. 956 (1953) is also not dispositive of the issue presented in this case. In Mezei, the Court upheld the detention of an excludable alien at Ellis Island for twenty-one months pending efforts to find another country that would agree to take him. Several factors in Mezei distinguish that case from this one, however. First, the decision to exclude the alien was specifically based on a finding by the Attorney General that the alien's presence in the United States would be a threat to national security. Second, the alien was held in a detention facility on Ellis Island, rather than a federal prison. Third, there was evidence in the record of ongoing efforts to deport the alien to other countries. The court in Rodriguez-Fernandez found that because of these differences, Mezei was not dispositive of the issue of whether indefinite detention of the Mariel Cubans in a federal prison was constitutional. 654 F.2d at 1382.
In sum, one circuit has held that indefinite detention of excludable aliens violates their fifth amendment rights to due process prior to the imposition of punishment. The Supreme Court has not passed on the issue. Furthermore, the Supreme Court indicated recently in Salerno that the legality of detention depended on a highly factbound determination of the purposes and nature of the detention. The applicants' contention that their detention is unconstitutional, therefore, has sufficient support to warrant discovery to bolster their claims.
The applicants' contention that the attorney general lacks statutory authority to detain them indefinitely also has considerable support. The INA specifically authorizes temporary detention of an alien seeking entry, for further inquiry, if the alien is not "clearly and beyond a doubt" entitled to enter. 8 U.S.C. § 1225(b). This detention, however, is only temporary, pending the holding of an exclusionary hearing to determine whether the alien shall be allowed to enter, or shall be excluded and deported. 8 U.S.C. § 1226(a). If the alien is excluded, the alien "shall be immediately deported ... unless the Attorney General ... concludes that immediate deportation is not practicable". 8 U.S.C. § 1227(a)(1). In the event that the alien's country of origin refuses to accept the alien, the Attorney General must direct the alien's deportation to another country that is willing to accept the alien. 8 U.S.C. § 1227(a)(2). The statute is therefore silent regarding the authority of the Attorney General to detain excludable aliens after they have been excluded and the country of origin has refused to accept them. Palma, 676 F.2d at 104 ("[i]t is apparent ... that none of these statutes expressly authorizes the Attorney General to detain an alien indefinitely after an unsuccessful attempt to detain him"). Any such authority must be implied.
In interpreting the statute, the courts have diverged on whether the Attorney General has authority to detain excludable aliens indefinitely. At least two courts have held, on the facts before them, that the attorney general lacked authority to continue to detain excludable Mariel Cubans. Rodriguez-Fernandez v. Wilkinson, 654 F.2d at 1389; Gallego v. Immigration and Naturalization Service, 663 F.Supp. 517 (W.D.Wis.1987). Other courts, while upholding the detention at issue, have held that the INA permits only temporary detention pending deportation, not indefinite detention. Amanullah v. Nelson, 811 F.2d 1, 9 (1st Cir.1987); Fragedela v. Thornburgh, 761 F.Supp. 1252, 1256 (W.D.La.1991). Still other courts have indicated that the Attorney General has implied authority to detain excludable aliens indefinitely. Palma, 676 F.2d at 104; Fernandez-Roque, 734 F.2d at 580 n. 6. In this case, applicants seek information regarding efforts to deport them to Cuba or to other countries, and the status of negotiations with Cuba to effectuate the return of Mariel Cubans to that country. Such *1359 information would be relevant in determining whether the applicants' detention was temporary or permanent. Fragedela, 761 F.Supp. at 1256-57.
A recent amendment to the statute, effective November, 1990, appears to provide more specific authority to the Attorney General to detain aliens who are convicted of a felony if the country of which they are citizens, subjects, nationals or residents refuses to accept them.[4] 8 U.S.C. § 1226(e). See Alvarez-Mendez v. Stock, 941 F.2d 956, 962 (9th Cir.1991). However, it is not clear if, or to what extent, the statute would apply retroactively to the applicants, who filed their petitions, and committed crimes in this country, prior to the amendment.[5]See Alvarez-Mendez, 941 F.2d at 960. In addition, the argument has been made that this amendment authorizes detention only pending a determination of excludability. 941 F.2d at 960. Although the Alvarez-Mendez court rejected this argument, this question, as well as the retroactivity issue, make it unclear whether the 1990 amendment would authorize continued detention in this case.
Therefore, respondent's argument that applicants have no legal support for the legal theories upon which they base their discovery request is itself without merit. In truth, the law is unsettled, and there is ample support for the applicants' claims. Furthermore, discovery from respondent is the most appropriate way to obtain the information that will test the validity of the applicants' claims. As the Rodriguez-Fernandez court observed:
[w]hen an excludable alien in custody tests the detention by writ of habeas corpus ... the burden is upon the government to show that the detention is still temporary pending expulsion, and not simply incarceration as an alternative to departure. Information on this issue is more readily available to the government.
654 F.2d at 1390 (emphasis added). Discovery is, therefore, appropriate for these claims.
Respondent's second argument in opposition to discovery is that, in its answer and return, it has already provided information regarding why each applicant was not paroled. The applicants respond that the information provided is insufficient. In the absence of a contrary indication, it must be assumed that the applicants have made their discovery request in good faith and are not already in possession of all of the information sought. See Fed.R.Civ.P. 11. Furthermore, to curtail discovery would risk denying the applicants relevant information that the government has not, for whatever reason, heretofore provided. Therefore, applicant's discovery will not be restricted based solely on respondent's assertions *1360 that it has already provided all of the relevant information requested. Respondent's answer and return have been examined, and it is noted that the affidavits and exhibits contained therein are not voluminous. Should some of the information sought be duplicative of information already provided in the answer and return, it will not be unduly burdensome simply to reproduce the applicable affidavits and exhibits from respondent's attachments to its answer.
IV. Other Discovery Requests
Two additional discovery requests must be considered. In their answer and return, respondents have attached the declaration of John A. Simon, the INS Deputy Assistant Commissioner for Detention and Deportation, which contains information regarding the detention of Mariel Cubans and sets forth reasons why the present detention policy is prudent and desirable. Document Request Number five seeks all documents used by Mr. Simon in preparation of his declaration. As previously discussed, adjudication of the applicant's Fifth Amendment claim requires an evaluation of whether there is a nonpunitive regulatory purpose to the detention, and whether the nature of the detention "`appears excessive in relation to the alternative purpose'". Salerno, 481 U.S. at 747, 107 S.Ct. at 2101 (quoting, Schall v. Martin, 467 U.S. 253, 269, 104 S.Ct. 2403, 2412, 81 L.Ed.2d 207 (1984). Apparently, the government intends to use the Simon declaration to bolster its contention that the detention of the Mariel Cubans is an appropriate means of effecting a nonpunitive purpose. It is, therefore, fitting that the applicants have access to the documents relied on by John Simon in preparing his affidavit, whereby they may be able effectively to rebut the government's contention, and be in a position to cross-examine Simon, if he should testify. Document Request number five therefore will be approved.
The Simon Declaration also states that 2,618 Mariel Cubans are being detained as of July 6, 1990. Applicants Interrogatory number asks the government to identify how many of these individuals are currently being detained, how many have been paroled, the reasons that the individuals are being detained, and the number of persons detained for each reason. Respondent argues that providing this information would be unduly burdensome. However, respondent itself has made discovery of this information necessary by introducing the Simon Declaration to support detention of the applicants. The interrogatory seeks to update Simon's statement that 2,618 Mariel Cubans were being detained as of a year ago. In addition, Simon makes general observations about the Mariel cubans who are detained and the reasons why they are detained or paroled. Simon Declaration 14-16. The information sought in Interrogatory nine will enable the applicants to test the validity of Simon's general observations. The applicants' motion for discovery therefore shall be granted in a separate order issued concurrently herewith.
NOTES
[1] The Federal Habeas Corpus Rules govern cases brought under 28 U.S.C. § 2254. Although these consolidated actions are brought under 28 U.S.C. § 2241, Rule 1(b) of the Federal Habeas Rules permits the court to apply the rules in habeas cases not brought under § 2254.
[2] Interrogatory one asks Respondent to identify the persons who participate in the preparation of answers to the interrogatories. Clearly, such information is relevant.
[3] In Jean, the detainees were Haitian aliens who claimed that the Immigration and Naturalization Service (INS) had discriminated against them on the grounds of their race and national origin in detaining them and refusing to grant them parole. The court of appeals had held that as excludable aliens, the applicants had no due process rights to be free from detention. 727 F.2d 957, 967-975 (11th Cir.1984). The Court, however, held that it was unnecessary to consider this issue, because INS regulations precluded INS officials from considering race and national origin in making parole decisions. It was therefore necessary to remand the case to the district court, for determination of whether the INS officials had complied with the regulations. 472 U.S. 846, 105 S.Ct. 2992.
[4] 8 U.S.C. § 1226(e) provides: "(1) Pending a determination of excludability, the Attorney General shall take into custody any alien convicted of an aggravated felony upon completion of the alien's sentence for such conviction. (2) Notwithstanding any other provision of this section, the Attorney General shall not release such felon from custody unless the Attorney General determines that the alien may not be deported because the condition described in section 243(g) [8 USCS § 1253(g)] exists. (3) If the determination described in paragraph (2) has been made, the Attorney General may release such alien only after
(A) a procedure for review of each request for relief under this subsection has been established,
(b) such procedure includes consideration of the severity of the felony committed by the alien, and
(c) the review concludes that the alien will not pose a danger to the safety of other persons or to property."
8 U.S.C. § 1253(g) provides: "Upon the notification by the Attorney General that any country upon request denies or unduly delays acceptance of the return of any alien who is a national, citizen, subject, or resident thereof, the Secretary of State shall instruct consular officers performing their duties in the territory of such country to discontinue the issuance of immigrant visas to nationals, citizens, subjects, or residents of such country, until such time as the Attorney General shall inform the Secretary of State that such country has accepted such alien."
[5] Interestingly, Respondent's brief filed in support of its answer and return, filed in March, 1991, argues only that 8 U.S.C. § 1226(b) authorizes the Attorney General to detain excluded aliens indefinitely. Respondent does not argue that the 1990 amendment also provides such authority in this case.
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281 Pa. Superior Ct. 156 (1980)
421 A.2d 1195
Ernest J. NIGRELLI
v.
Richard F. CODY, Appellant.
Superior Court of Pennsylvania.
Argued November 12, 1979.
Filed September 5, 1980.
Reargument Denied December 24, 1980.
*157 Arthur H. Stroyd, Jr., Pittsburgh, for appellant.
Samuel J. Goldstein, Pittsburgh, for appellee.
Before HESTER, MONTGOMERY and LIPEZ, JJ.
LIPEZ, Judge:
The appellant, Richard F. Cody, on April 25, 1958 executed a $10,000 note with a confession of judgment clause, due one year after date, to appellee Ernest J. Nigrelli. In 1977 Nigrelli filed a complaint in confession of judgment, and obtained a judgment for $21,700, including the $10,000 face amount and $11,700 interest. Cody petitioned the court to open or strike the confessed judgment, alleging several defenses. The court below issued a rule on Nigrelli to show cause why the judgment should not be opened or stricken.
Cody took Nigrelli's deposition in order to provide evidence in support of his defenses. Nigrelli refused to answer certain questions relating to whether he had made demand for payment of the note, and whether he had received payment for the note through an arrangement whereby he received regular checks from one of Cody's business ventures, Sunset Memorial Parks, Inc. Cody filed a motion to compel Nigrelli to answer the questions. The administrative judge of the court below entered the following order:
*158 "AND NOW, to wit, this 5th day of October, 1978, it is hereby
ORDERED, ADJUDGED and DECREED
that any further testimony by deposition must be taken within fifteen (15) days of this Order, and the interrogation shall be confined to the judgment which is the subject of this case."
On October 20, 1978, Cody again took Nigrelli's deposition, but Nigrelli refused to answer the same questions. Cody filed a "DEFENDANT'S MOTION TO OPEN JUDGMENT AND TO COMPEL DEPOSITION TESTIMONY," contending in the alternative that Nigrelli's refusal to answer these questions constituted sufficient grounds to open the judgment, or that Nigrelli should be ordered to respond to the questions. In support of the motion, Cody attached his own affidavit describing how he hoped to supply evidence for his defenses through the answers to these questions. During the following weeks, Cody's counsel also filed with the court below the two incomplete Nigrelli depositions, the deposition of another witness, an affidavit by the bookkeeper for Sunset Memorial Parks, Inc. during the period 1958-60, and a letter from a certified questioned document examiner, stating his opinion that the word "(SEAL)" had been typed onto the judgment note after it had been signed by Cody.
After these documents, the next item appearing in the record is the following order signed by the administrative judge:
"AND NOW, to wit, this 13th day of March, 1979, it appearing that affidavits are not admissible as deposition testimony by virtue of Rule 2959(c) for the purpose of determining whether a Rule to Show Cause whether a judgment should be opened and/or stricken should be made absolute or discharged, upon a review of the record properly before the Court, it is
ORDERED, ADJUDGED and DECREED
that the Rule to Show Cause entered by this Court is herewith discharged."
*159 In this appeal from that order, Cody contends that the ruling by the administrative judge was premature because the judge had neither disposed of the outstanding motion to compel further deposition testimony from Nigrelli, nor given any opportunity to Cody to present other evidence in the form of deposition testimony. We agree. We do not understand how the administrative judge could decide the case at that point, since the record contains no indication that the case had even been ordered on the argument list.
The procedure which should have been followed in this case is stated in Pennsylvania Rule of Civil Procedure 209, which provides:
If, after the filing and service of the answer, the moving party does not within fifteen days:
(a) Proceed by rule or by agreement of counsel to take depositions on disputed issues of fact; or
(b) Order the cause for argument on petition and answer (in which event all averments of fact responsive to the petition and properly pleaded in the answer shall be deemed admitted for the purpose of the rule); the respondent may take a rule as of course on the moving party to show cause why he should not proceed as above. If after hearing the rule shall be made absolute by the court, and the petitioner shall not proceed, as above provided, within fifteen days thereafter, the respondent may order the cause for argument on petition and answer, in which all averments of fact responsive to the petition and properly pleaded in the answer shall be deemed admitted for the purpose of the rule.
A unanimous en banc opinion by Judge Spaeth discusses the operation of Rule 209 as follows:
Here, when the lower court ruled on the petition, neither party had taken any action under Rule 209. Neither party had ordered the cause for argument-or, more precisely (since both parties in their praecipes declined oral argument), for decision-on petition and answer. Since Rule 209 places no time limit on respondent's taking of a rule on petitioner, both appellee as respondent and appellant *160 as petitioner had the option (until entry of the lower court's order) to take action. Until one of the parties did act as provided by the Rule, or until some other force spurred matters along, the court should not have acted.
We do not mean that a motions court must wait for the parties to bestir themselves. We have said, "until some other force spurred matters along." The motions court itself may set a timetable for taking of depositions and for decision. If the court does this, however, it must give notice to the parties. In the present case, no notice was given.
Maurice Goldstein Company, Inc. v. Margolin, 248 Pa.Super. 162, 166-67, 374 A.2d 1369, 1371-72 (1977) (footnotes omitted); see also Zinck v. Smashy's Auto Salvage, Inc., 250 Pa.Super. 553, 556-57, 378 A.2d 1287, 1288 (1977); Instapak Corporation v. S. Weisbrod Lamp & Shade Co., Inc., 248 Pa.Super. 176, 181-82, 374 A.2d 1376, 1379 (1977).
Like the motions judge in Maurice Goldstein Company, Inc. v. Margolin, supra, the administrative judge of the court below simply decided the case without notice to the parties, even though neither party had ordered the case for decision. The procedure followed here was an even more flagrant abuse than in Maurice Goldstein, since here the parties had not waived their right to oral argument under Pennsylvania Rule of Civil Procedure 211.[1]
The administrative judge filed no opinion. Pennsylvania Rule of Appellate Procedure 1925(a) provides:
(a) General rule. Upon receipt of the notice of appeal the judge who entered the order appealed from, if the reasons for the order do not already appear of record, shall forthwith file of record at least a brief statement, in the form of an opinion, of the reasons for the order, or for *161 the rulings or other matters complained of, or shall specify in writing the place in the record where such reasons may be found.
On the front of the original record in this case, there is a handwritten note, signed by the administrative judge, stating: "No opinion necessary reason in Order." We do not view this statement as substantial compliance with Rule 1925(a), since the order appealed from does not justify, or even explain, the procedure followed in this case.[2] We also find unhelpful the observation, in the order denying Cody's application for reconsideration, ". . . that every opportunity has been provided Richard F. Cody to establish defenses through admissible means and there must be some point where a determination is made, and, in this case that point has been reached . . . ." After a thorough search of the entire record, we are unable to find any support for this conclusion.[3]
Order vacated, petition to open confessed judgment reinstated, and case remanded for further proceedings consistent with this opinion.[4]
NOTES
[1] Pennsylvania Rule of Civil Procedure 211 provides in pertinent part: "Any party or his attorney shall have the right to argue any motion and the court shall have the right to require oral argument. With the approval of the court oral argument may be dispensed with by agreement of the attorneys and the matter submitted to the court either on the papers filed of record, or on such briefs as may be filed by the parties."
[2] Instapak Corporation v. S. Weisbrod Lamp & Shade Co., Inc., 248 Pa.Super. 176, 182-83, n. 8, 374 A.2d 1376, 1379, n. 8 (1977) discussed the possibility that a local rule could vary the Rule 209 procedure, and even provide for automatic listing on petition and answer. We are unable, however, to locate any such local rule in the Allegheny County Common Pleas Court Manual, a compendium published by the Rules Revision Committee of the Allegheny County Bar Association. While under other circumstances we might have remanded for an opinion explaining the reasons for the action taken below, see, e. g., Mims v. City of Philadelphia, 267 Pa.Super. 129, 130, 406 A.2d 552, 553 (1979), to have done so in this case would not have been helpful, since the administrative judge is no longer on the common pleas bench. We therefore undertook a comprehensive review of the record and the local rules, in order to insure fairness to both parties.
[3] We can well understand the administrative judge's feeling of frustration because of the case's slow progress. However, there were available to him appropriate measures to "spur" the matter along consistent with the Rules. See Maurice Goldstein Company, Inc., supra.
[4] In view of our disposition, it is unnecessary for us to address the parties' additional contentions concerning whether Cody satisfied the standard of proof in Rule of Civil Procedure 2959, whether certain items were admissible for making that determination, and whether certain issues had been waived. The parties did not have the opportunity before the entry of the order appealed from to present their contentions to the court below, which should make the initial disposition of these questions. See Commonwealth v. Glendening, 262 Pa.Super. 357, 362, n. 4, 396 A.2d 793, 796, n. 4 (1979).
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777 F.Supp. 61 (1991)
UNITED STATES of America, Plaintiff,
v.
CITY OF NORTH ADAMS, MA, Defendant.
Civ. A. No. 89-30048-F.
United States District Court, D. Massachusetts.
August 7, 1991.
*62 *63 George Bunsen Henderson, U.S. Attorney's Office, Boston, Mass., for plaintiff.
Robert C. Ware, Freedman, DeRosa & Rondeau, North Adams, Mass., for defendant.
MEMORANDUM AND ORDER
FREEDMAN, Chief Judge.
I. INTRODUCTION
Before the Court are objections by defendant City of North Adams ("North Adams" or "the City") to recommendations of Magistrate Judge Michael A. Ponsor ("Magistrate Judge"). The Magistrate Judge recommended that the Court grant the government's motion for partial summary judgment, and deny the City's motion for summary judgment. United States of America v. City of North Adams, Massachusetts, Civ. Action No. 89-30048-F, Report and Recommendation (March 28, 1991) ("Magistrate Judge's Report"). The government opposes North Adams' objections, and urges the Court to adopt the Magistrate Judge's recommendations. For the reasons stated below, the Court adopts the Magistrate Judge's Report in its entirety.
II. STANDARD OF REVIEW
Because the motions at issue are for summary judgment, the Magistrate Judge's recommendations are subject to de novo review by the district court. See 28 U.S.C. § 636(b)(1). Section 636(b)(1) provides that "[a] judge of the [district] court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." In making a de novo review, the district court must evaluate the record of the proceeding below with sufficient detail to make its own determination with regard to each disputed finding. United States v. Raddatz, 447 U.S. 667, 675, 100 S.Ct. 2406, 2412, 65 L.Ed.2d 424 (1980), citing H.R.Rep. No. 94-1609 at 3 (1976), U.S.Code Cong. & Admin.News 1976, at 6162-6163; Gioiosa v. United States, 684 F.2d 176, 178 (1st Cir. 1982) (collecting cases). However, the district court need not hold an additional hearing or consider new testimony. Raddatz, 447 U.S. at 674-76, 100 S.Ct. at 2411-2413.
III. DISCUSSION
A. Prior Proceedings
In this action, the United States of America alleges that North Adams has violated the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq. ("SDWA"), and regulations promulgated under the SDWA by the Administrator of the Environmental Protection Agency ("EPA"). The complaint charges that the amount of contaminants in the drinking water supplied by North Adams exceeded and continues to exceed the maximum contaminant levels allowed under the relevant federal regulations. 40 C.F.R. §§ 141.13 and 141.14. The complaint further alleges that North Adams failed to monitor the drinking water that it supplied to North Adams residents. 40 C.F.R. § 141.21. The government seeks an injunction to compel North Adams' compliance with federal drinking water standards, and an award of civil penalties.
The parties have not objected to the Magistrate Judge's thorough synopsis of the procedural history of the case; therefore, the Court adopts the Magistrate Judge's summary as contained in his Report and Recommendation as follows.
The United States filed the instant complaint on March 6, 1989. At that time, a parallel proceeding brought by the Massachusetts Department of Environmental Quality Engineering ("the DEQE") against North Adams had been pending in state court for almost two years. Because questions concerning the relative timing and efficacy of these actions are intertwined with the merits of defendant's motion for summary judgment, the court will set forth the salient *64 procedural facts regarding both lawsuits in some detail.[1]
On April 29, 1987 the DEQE filed a civil action against the City of North Adams in Superior Court, Suffolk County, Massachusetts, captioned Department of Environmental Quality Engineering v. City of North Adams and Genesio Breda, Docket No. 87-2322. Pursuant to Mass.Gen.Laws ch. 111, § 160, codified at 310 C.M.R. §§ 22.00 et seq., the DEQE's complaint alleged violations of the state's drinking water statute. More specifically, the state charged the City with repeated violations of the state turbidity MCL [maximum contaminant levels] regulation, 310 C.M.R. 22.08(1). This state primary drinking water standard is substantially similar to the federal MCL regulating turbidity levels that is at issue in this federal enforcement action.[]
However, the parallel state court suit differs from the federal suit in several key respects. First, the state's complaint did not contain a claim for violations of the state's coliform bacteria MCL regulation, 310 C.M.R. 22.05(5). Nor did the DEQE seek injunctive relief for an "imminent and substantial endangerment" of the population served by the North Adams public water system, as the Government does in this case.
Indeed, the only relief initially sought by the state consisted of an injunction ordering the City to construct remedial water filtration facilities. Significantly, no interim relief was requested by the DEQE to protect North Adams consumers prior to the construction of an adequate water filtration plant.
Discovery ensued during 1987, after which the Commonwealth filed an amended complaint alleging continuing turbidity violations. DEQE then moved for summary judgment with respect to liability on both the pre- and post-September 23, 1987 violations. None of these motions had been ruled upon when the Government filed this complaint in United States District Court in March 1989.
Later that month, the City invoked the Colorado River abstention doctrine in an effort to persuade this court to exercise its discretionary power to dismiss or stay the federal enforcement action in light of the parallel action in state court. In its Report and Recommendation of January 17, 1990, this court urged the district court to decline to do so, concluding that "both the factual record and the procedural history of the pending state-court litigation" created substantial doubt that the state suit could pass muster as an "`adequate vehicle for the complete and prompt' resolution of the issues raised by the parallel federal action." Report and Recommendation ("R & R") at 14 [United States v. City of North Adams, Massachusetts, Civ.Action No. 89-30048-F, Report and Recommendation at 14 (January 17, 1990)].
The following factors were among those which weighed most heavily in the court's determination that neither a dismissal nor a stay was appropriate: 1) the enlarged scope of liability as well as the more comprehensive nature of the relief at issue in the federal action, R & R at 5-6 and 7-8; 2) the fact that none of the pending state court motions had been ruled upon as late as September 13, 1989, the date on which the parties to the federal dispute engaged in oral argument on Defendant's Motion to Dismiss or Stay, id. at 6; and 3) the fact that settlement negotiations between the City and the Commonwealth regarding the state court action, conducted from December 1987 through May 1988, had not produced any judicially enforceable results. Id. at 6-7.[2]
*65 On June 7, 1990 Chief Judge Freedman issued a Memorandum and Order adopting the Report and Recommendation in its entirety and denying defendant's motion to dismiss or stay this enforcement action.
Although the City and the DEQE finally arrived at a negotiated settlement of the state civil action in August 1990, a consent decree embodying this settlement was not docketed in state court until after defendant filed its motion for summary judgment here. See Ware Aff. at ¶ 6 and Order dated October 11, 1990, attached as an exhibit to Supplement to Defendant's Motion for Summary Judgment (Docket # 30).
This consent decree requires the City to construct a water filtration plant capable of beginning operation on January 31, 1994. Order at ¶ 3. The decree also provides that the City must notify the DEQE and the Attorney General in the event of any delays, id. at ¶ 4, but that extension of deadlines may be obtained by the written stipulation of the parties. Id. Should the City fail to meet the terms of the decree, the Order also provides for a sliding scale of penalties, based upon the length of the period of non-compliance, which ranges from a minimum of $25 per day to a maximum of $100 per day.[3]Id. at ¶ 6. Significantly, the decree also provides that the Commonwealth will not seek penalties for the past and future violations alleged in its complaint as long as the City remains in compliance with the terms of the order. Id. at ¶ 8.
Magistrate Judge's Report at 2-6.
Subsequent to execution of the consent decree in Superior Court, the parties filed cross-motions for summary judgment in the federal case. The City moves for summary judgment on the entire complaint, whereas the government seeks partial summary judgment. That is, the government seeks judgment on its claims that the City has violated the SDWA because the City's water has contained amounts of turbidity and coliform bacteria in excess of those allowed by federal regulations. The government further avers that the City failed to monitor the water as required under the regulations. Upon consideration of the motions, the Magistrate Judge advised this Court to deny the City's motion and grant the government's motion. Dissatisfied with the Magistrate Judge's recommendation, the City objected pursuant to 28 U.S.C. § 636(b)(1).
B. North Adams' Objections
The City has made twenty-seven specific objections to the Magistrate Judge's Report. Defendant City of North Adams' Objection to the Magistrate's Report and Recommendation at 1-5 (April 12, 1991) ("Defendant's Objections"). While the Court finds none of the objections persuasive, the Court finds that, when considered as a whole, the objections raise four general points that require discussion.[4] The Court will discuss these points in turn.
*66 1. Summary Judgment Standard
The City argues that the Magistrate Judge improperly placed upon it the burden of establishing that genuine issues of material fact exist in the case. The Court finds, however, that the Magistrate Judge properly identified and implemented the summary judgment standards.
The Court must grant a motion for summary judgment if "there is no genuine issue of material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The evidence of record must be considered in a light most favorable to the non-moving party, with all reasonable inferences drawn in his favor. J.I. Corp. v. Federal Insurance Co., 920 F.2d 118 (1st Cir.1990). "To succeed, the moving party must show that there is an absence of evidence to support the nonmoving party's position. Having done so, the burden shifts to the nonmoving party to establish the existence of an issue of fact that could affect the outcome of the litigation and from which a reasonable jury could find for the opponent." Rogers v. Fair, 902 F.2d 140, 143 (1st Cir. 1990) (citations omitted).
However, the Court will not deny summary judgment merely because the nonmoving party has alleged that some facts are in dispute. Rather, upon a motion for summary judgment, the nonmovant has an obligation to "adduce specific, provable facts demonstrating that there is a triable issue." Brennan v. Hendrigan, 888 F.2d 189, 191 (1st Cir.1989); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986).
The authorities make clear that upon consideration of the government's motion for summary judgment, North Adams has the burden of controverting the relevant facts alleged by the government. Should the City, as the nonmovant, fail to bear this burden, summary judgment must enter in favor of the government. The Magistrate Judge found that the City's pleadings, affidavits, and other documents did not create genuine, material factual disputes with regard to the levels of contamination in North Adams' drinking water or North Adams' alleged monitoring violations, and the Court agrees. The documents and allegations offered by the City do not refute the government's evidence of past and continuing violations of the SDWA and attendant regulations. Thus, the Magistrate Judge made no error in articulation or application of the summary judgment standard.
2. Whether North Adams has Violated Federal Turbidity Standards
While North Adams makes numerous arguments with regard to the alleged turbidity violations, the Court finds none of them persuasive. The Court will discuss North Adams' three most fervent arguments seriatim.
First, the City contends that the regulations promulgated under the SDWA require only that the turbidity levels in the entire system must average less than the maximum contaminant level as set by 40 C.F.R. § 141.13.[5] That is, the City argues that when measuring turbidity for purposes of determining compliance with federal maximum contaminant levels, the Court must consider the average turbidity *67 in the water system as a whole, not merely the turbidity as determined at one or two discrete water sources. The Court, however, agrees with the Magistrate Judge and the government that the language of 40 C.F.R. §§ 141.2 and 141.13 requires that the samples taken at the points of entry determine compliance vel non with federal water standards.
Title 40 C.F.R. § 141.13 provides in relevant part that the maximum contaminant levels for turbidity in drinking water must be "measured at a representative entry point(s) to the distribution system...." Similarly, 40 C.F.R. § 141.2 provides that with particular regard to turbidity (as opposed to other kinds of water contaminants), "the maximum permissible level is measured at the point of entry to the distribution system...." Thus, the express language of the applicable regulations direct that the water samples must be measured at one or more representative entry points, and that that measure will determine compliance with the maximum allowable turbidity standards. The regulations do not say that turbidity levels from all entry points must be averaged to determine the average system turbidity. Such a holding would appear contrary to the express language of the regulation, and is contrary to the EPA's interpretation of the regulation.[6] The Court agrees with the government that sections 141.2 and 141.13 decisively establish that turbidity violations are determined by the amount of turbidity at representative points of entry, not throughout the system as a whole. See Reply of United States to Defendant's Opposition to Motion for Partial Summary Judgment at 2 (November 15, 1990) ("Government's Reply"). Simply put, the language of these provisions does not comport with North Adams' interpretation.
Moreover, the Court finds highly relevant the fact that each of the three water sources for the North Adams system serve different water users. Were the Court to adopt North Adams' position, the City could, within the bounds of the regulations, supply water with turbidity in excess of one turbidity unit ("TU") to many users, as long as the water to other users remained clean enough keep the average turbidity in the entire system below one TU. The Court will not interpret the regulations in such a manner absent express language to that effect.
Second, the City contends that section 141.13 is ambiguous in that it does not impose one inflexible standard. The City argues that "[s]ection 141.13 states that the maximum contaminant levels `are' and then goes on to impose three different possible standards, one turbidity unit determined by a monthly average, five turbidity units determined by a monthly average under certain conditions and five turbidity units based on an average of two consecutive days." Defendant's Objections at 14-15. Thus, the City argues that because section 141.13 is ambiguous, summary judgment is inappropriate, and the Court must reserve for trial the question of whether any violation of that section has occurred.
The Court finds the City's argument unavailing. The language of section 141.13 establishes standards for both long-term and short-term measurements of turbidity. In essence, section 141.13 requires that water turbidity never exceed the average of five TU's over two days, or one TU over a month, as measured at system entry points. The unrefuted evidence offered by the government establishes violation of this plain regulation, and the Court hereby adopts the government's position on this issue.
Third, the City argues that the Magistrate Judge mistakenly placed on it the burden of showing it is entitled to an exemption from section 141.13's one TU average monthly turbidity standard. In essence, the City argues that it can prove, in accordance with the language of section 141.13, that it is subject to the "five or *68 fewer" turbidity standard, and is thus in compliance with section 141.13.
Section 141.13(a) provides that the maximum contaminant level for turbidity is one TU, "except that five or fewer turbidity units may be allowed if the supplier of water can demonstrate to the State that the higher turbidity does not" interfere with disinfection or microbiological determinations. The City asserts that the government has the obligation to prove that the City cannot avail itself of the "five or fewer" TU standard, that the government has failed to so prove, and that summary judgment in the government's favor is therefore inappropriate.
The government, on the other hand, argues that section 141.13 places upon the City the burden of proving to the appropriate state agency, that is, the Massachusetts Department of Environmental Protection ("DEP" or "DEQE"),[7] that it is entitled to an exemption from the ordinary one TU standard. Section 141.13(a) clearly requires that the water system must demonstrate to the State that the higher standard should apply. Similarly, 40 C.F.R. § 141.4 provides that a variance or exemption from the one TU standard may be granted only "by the entity with primary enforcement responsibility." The government and the City agree that the City never received an exemption, exception or variance from the DEP, and indeed, the City concedes that it never even applied for one. Thus, the government contends that because the City has not proven to the DEP that it is entitled to an exemption from the one TU standard, the "five or fewer" turbidity standard does not apply to the City, and the Court should determine the City's compliance, based on the evidence of record, according to the one TU standard.
It is undisputed that the City has not proven to the DEP that it is entitled to the "five or fewer" turbidity standard. The City has failed to obtain the DEP's approval for a higher turbidity level, and the City has offered no evidence indicating that the DEP would, in any event, consider allowing North Adams to operate under a higher standard. Indeed, the City engineer, Genesio Breda, stated that DEP officials have steadfastly refused to permit the City to operate under any standard higher than the one TU standard. Affidavit of Genesio Breda at 2 (December 16, 1987). Rather, the DEP has taken the position that the City is in violation of the SDWA whenever turbidity levels exceed one TU. Id. In sum, while it is clear that DEP has not approved the "five or fewer" standard for turbidity, the City has produced no evidence to support its contention that the "five or fewer" standard could apply. In the absence of such evidence, the Court must hold that the City is subject to the one TU standard as established in section 141.13(a), and that the higher "five or fewer" standard does not apply. Such a holding is consistent with the language of the regulations, which put the burden of proving entitlement on the water system, and requires that proof be made to the State, which, in its discretion, "may" allow for higher levels of turbidity.
In short, finding none of North Adams' arguments persuasive, the Court hereby adopts the recommendations of the Magistrate Judge with regard to turbidity violations. The Court grants summary judgment in favor of the government on the turbidity issue.
3. Whether the United States may Prosecute this Action despite the existence of the Superior Court Action and Consent Decree
Without citing any authority for its position, North Adams objects that the Superior Court action, and the existence of the state-monitored consent decree, precludes the government from bringing the instant action. Defendant's Objections at 3, 5. The government, however, contends that section 1414 of the SDWA, 42 U.S.C. § 300g-3, permits the instant action notwithstanding the DEP's initiation and *69 prosecution of the parallel action in Superior Court. The Court finds that the government is correct, and that the City's position is incorrect as a matter of law.
Section 300g-3 provides in relevant part as follows:
(b) Judicial determinations in appropriate Federal district courts; civil penalties; separate violations. The Administrator may bring a civil action in the appropriate United States district court to require compliance with a national primary drinking water regulation ... if
(1) authorized under paragraph (1) of subsection (a) [of section 300g-3]....
Section 300g-3(a)(1) provides that
(A) Whenever the Administrator finds during a period during which a State has primary enforcement responsibility for public water systems ... that any public water system
(i) ... does not comply with any national primary drinking water regulation in effect ...
he shall so notify the State and such public water system and provide such advice and technical assistance to such State and public water system as may be appropriate to bring the system into compliance....
(B) If, beyond the thirtieth day after the Administrator's notification under subparagraph (A), the State has not commenced appropriate enforcement action, the Administrator shall issue an order ... requiring the public water system to comply with such regulation ... or the Administrator shall commence a civil action under subsection (b).
The Court interprets these provisions to mean that while the State has primary enforcement responsibility, the federal government, if it finds that a public water system does not comply with federal drinking water regulations, will so notify the State and the public water system, and will provide whatever assistance is necessary to bring that public water system into compliance with the federal standards. However, should the State fail to commence an appropriate action to compel compliance with the federal standards within thirty days of the notice, and should the public water system continue its non-compliance, the government may commence its own civil action, and may seek whatever remedies it deems necessary and allowable under the SDWA. The thirty day time limit does not operate to preclude an action by either the government or the DEP. Rather, it is a thirty day waiting period during which the entity with primary responsibility for enforcement of the SDWA has an exclusive opportunity to bring public water systems into compliance with federal standards. The government need not bring its action within any particular time frame; the statute provides no period of limitations.
The parties agree, and the Court so finds, that the DEP did not commence an action until well over thirty days after the EPA notified the State and North Adams of the City's non-compliance. The Court now holds that, in keeping with the explicit language of the statute, the government's action is not precluded by the parallel suit filed by DEP in Superior Court.
Furthermore, the action taken by the DEP, even if it had been filed within thirty days of the EPA notice, was not an "appropriate enforcement action" within the meaning of section 300g-3. The instant federal action seeks different and more extensive relief than the Superior Court action. The federal action seeks short term injunctive remedies in addition to civil penalties, neither of which are at issue in the state proceeding. See Brewer v. City of Bristol, 577 F.Supp. 519, 527 (E.D.Tenn. 1983) (where federal public interest suit seeks relief greater than and in addition to monetary and injunctive relief sought in state action, the federal action is not precluded under section 300g-3). Thus, the state court action does not preclude the federal action both because the DEP did not take action within thirty days and because the state action is not an appropriate enforcement action within the meaning of section 300g-3.
4. Whether North Adams has Violated Federal Coliform Bacteria Standards and Monitoring Provisions
The government's complaint charges that North Adams' water supply contained levels *70 of coliform bacteria in excess of those permitted under 40 C.F.R. § 141.14(a) in at least five different months, and that North Adams failed to abide by the coliform monitoring provisions of 40 C.F.R. § 141.21(d). In considering the government's motion for partial summary judgment, the Magistrate Judge relied heavily on the records of water samples kept by the City, and on affidavits of EPA official J. Kevin Reilly. The Magistrate Judge recommended that the Court grant the government's motion for summary judgment with regard to both the coliform bacteria levels and coliform monitoring violations. The City has objected to these recommendations.
With regard to the coliform bacteria levels, the City first argues that Reilly lacks necessary qualifications, and that his mathematical calculations lack the proper evidentiary basis. Second, the City argues that even if the Court should accept Reilly's qualifications and calculations, Reilly's data is flawed because his affidavits do not properly distinguish between routine and check samples.[8]
The Court finds the City's first argument meritless. Reilly's affidavits simply state the number of water samples taken, when taken, and the amount of coliform bacteria per 100 milliliters contained therein. Reilly does not perform any difficult or unusual mathematical calculations. His methodologies do not require further explanation at trial. Rather, Reilly interprets the data collected by and for the City,[9] and states his findings for the Court. Most important, the City has not disputed Reilly's methods of calculation, and, as noted above, cannot contest the validity of the data.
With regard to the City's contention that the government should not use check sample data in determining compliance with the regulations, the government argues, and the Magistrate Judge found, that no matter which samples are included in the section 141.14 calculus, the coliform violations are still established. The evidence and arguments proffered by the government convinces the Court that this is true.
Reilly calculated the amount of coliform bacteria in three different ways. First, he considered all of the samples in his calculation. See Affidavit of J. Kevin Reilly (September 27, 1990). Then, he considered all samples except those designated by the City as "check samples" on the water *71 records. Second Affidavit of J. Kevin Reilly Regarding Coliform Bacteria Violations (November 13, 1990). Lastly, he disregarded any handwritten alterations. Id. at ¶ 30. Under all of these approaches, Reilly's figures indicate that violations of section 141.14 occurred, and the City has offered no calculations or evidence to the contrary. Thus, the Court expressly adopts the Magistrate Judge's findings in this regard, and holds that North Adams violated section 141.14 for the months of October and August of 1986 and November, October and July of 1985. See Magistrate Judge's Report at 37-38.
Similarly, the Court finds that North Adams violated the coliform bacteria monitoring requirements of the Act and regulations. The government brought the instant action in response to alleged violations of the SDWA and regulations promulgated thereunder. The government may recover civil penalties for violations of SDWA regulations pursuant to 42 U.S.C. § 300g-3(b), which provides that the Court may impose civil penalties "if ... there has been a violation of the regulation ... with respect to which the action was brought...."
Title 42 U.S.C. § 300f(1)(D) empowers the EPA to adopt "criteria and procedures to assure a supply of drinking water which dependably complies with such maximum contaminant levels; including quality control and testing procedures to insure compliance...." Pursuant to this provision, the EPA promulgated 40 C.F.R. § 141.21(d)(1), which provides for water sample procedures in the event that the coliform bacteria in a single routine sample exceed four per 100 milliliters.
The government has provided evidence that North Adams violated these monitoring requirements on numerous occasions throughout 1985 and 1986, and North Adams does not dispute this allegation. Rather, the City argues that the EPA lacks the power to promulgate these regulations, or to recover civil penalties pursuant to them. The Court, however, agrees with the Magistrate Judge, and finds that the language of the SDWA quoted above belies the City's assertion. Sections 300f and 300g-3(b) provide the EPA with the authority to enact monitoring requirements, and to seek civil penalties against water systems that fail to comply. Furthermore, the Magistrate Judge's research has revealed, and the Court is so persuaded, that at least three other district courts from around the nation have held that failure to comply with the monitoring provisions imposed by the regulations can result in civil penalties. See Magistrate Judge's Report at 39-40, citing United States v. Boca Chica Water Supply, Inc., 1989 EPA Consent Lexis 7 (S.D.Tex. July 12, 1989); United States v. Town of Bolton, Mississippi, 1989 EPA Consent Lexis 45 (S.D.Miss. March 15, 1989); United States v. Alder Creek Water Co., Civ. Action No. 79-1090-JU (D.Or. April 26, 1984). Thus, the Court finds that the government is entitled to summary judgment with regard to its claim that North Adams violated the monitoring provisions of the regulations.
IV. CONCLUSION
For the reasons stated above, the Court ADOPTS the Magistrate Judge's Report in its entirety. Accordingly, defendant's objections to the Magistrate Judge's Report are OVERRULED, and defendant's motion for summary judgment is DENIED. The government's motion for partial summary judgment is GRANTED.
It is So Ordered.
REPORT AND RECOMMENDATION REGARDING CROSS MOTIONS FOR SUMMARY JUDGMENT[1]
March 28, 1991
MICHAEL A. PONSOR, United States Magistrate Judge.
I. INTRODUCTION
This is an enforcement action brought by the United States ("the Government") *72 against the City of North Adams, Massachusetts ("North Adams" or "the City") pursuant to 42 U.S.C. §§ 300f-300j-11 of the Safe Drinking Water Act ("SDWA" or "the Act"). The Act authorizes the Environmental Protection Agency ("the EPA") to promulgate mandatory national water quality standards for public water supplies based on public health concerns as well as public welfare-based and aesthetic standards.[2] Invoking §§ 1414(b) and 1431 of the Act, the United States seeks both civil penalties (first claim for relief) and injunctive relief (second claim for relief) against the City for continuing violations of three of the national primary drinking water regulation promulgated under § 1412 of the SDWA. Specifically, the Government alleges that between August 1978 and May 1990 North Adams repeatedly violated federal and state regulations setting forth maximum contaminant levels ("MCLs")[3] for turbidity[4] and for coliform bacteria[5] as well as the Act's monitoring requirements with respect to coliform bacteria.[6]
Currently before this court are the parties' cross-motions for summary judgment. For the reasons set forth below, the court will recommend that North Adams' motion be denied and that the Government's motion for partial summary judgment with respect to liability on its first claim for relief be allowed.
II. PROCEDURAL AND FACTUAL BACKGROUND
A. Procedural History.
The United States filed the instant complaint on March 6, 1989. At that time, a parallel proceeding brought by the Massachusetts Department of Environmental Quality Engineering ("the DEQE") against North Adams had been pending in state court for almost two years. Because questions concerning the relative timing and efficacy of these actions are intertwined with the merits of defendant's motion for summary judgment, the court will set forth the salient procedural facts regarding both lawsuits in some detail.[7]
On April 29, 1987 the DEQE filed a civil action against the City of North Adams in Superior Court, Suffolk County, Massachusetts, captioned Department of Environmental Quality Engineering v. City of North Adams and Genesio Breda, Docket No. 87-2322. Pursuant to Mass.Gen.Laws ch. 111, § 160, codified at 310 C.M.R. §§ 22.00 et seq., the DEQE's complaint alleged violations of the state's drinking water statute. More specifically, the state charged the City with repeated violations of the state turbidity MCL regulation, 310 C.M.R. 22.08(1). This state primary drinking water standard is substantially similar to the federal MCL regulating turbidity levels that is at issue in this federal enforcement action.[8]
*73 However, the parallel state court suit differs from the federal suit in several key respects. First, the state's complaint did not contain a claim for violations of the state's coliform bacteria MCL regulation, 310 C.M.R. 22.05(5). Nor did the DEQE seek injunctive relief for an "imminent and substantial endangerment" of the population served by the North Adams public water system, as the Government does in this case.
Indeed, the only relief initially sought by the state consisted of an injunction ordering the City to construct remedial water filtration facilities. Significantly, no interim relief was requested by the DEQE to protect North Adams consumers prior to the construction of an adequate water filtration plant.
Discovery ensued during 1987, after which the Commonwealth filed an amended complaint alleging continuing turbidity violations. DEQE then moved for summary judgment with respect to liability on both the pre- and post-September 23, 1987 violations. None of these motions had been ruled upon when the Government filed this complaint in United States District Court in March 1989.
Later that month, the City invoked the Colorado River abstention doctrine in an effort to persuade this court to exercise its discretionary power to dismiss or stay the federal enforcement action in light of the parallel action in state court. In its Report and Recommendation of January 17, 1990, this court urged the district court to decline to do so, concluding that "both the factual record and the procedural history of the pending state-court litigation" created substantial doubt that the state suit could pass muster as an "`adequate vehicle for the complete and prompt' resolution of the issues raised by the parallel federal action." Report and Recommendation ("R & R") at 14.
The following factors were among those which weighed most heavily in the court's determination that neither a dismissal nor a stay was appropriate: 1) the enlarged scope of liability as well as the more comprehensive nature of the relief at issue in the federal action, R & R at 5-6 and 7-8; 2) the fact that none of the pending state court motions had been ruled upon as late as September 13, 1989, the date on which the parties to the federal dispute engaged in oral argument on Defendant's Motion to Dismiss or Stay, id. at 6; and 3) the fact that settlement negotiations between the City and the Commonwealth regarding the state court action, conducted from December 1987 through May 1988, had not produced any judicially enforceable results. Id. at 6-7.[9]
On June 7, 1990 Chief Judge Freedman issued a Memorandum and Order adopting the Report and Recommendation in its entirety and denying defendant's motion to dismiss or stay this enforcement action.
Although the City and the DEQE finally arrived at a negotiated settlement of the state civil action in August 1990, a consent decree embodying this settlement was not docketed in state court until after defendant filed its motion for summary judgment here. See Ware Aff. at ¶ 6 and Order dated October 11, 1990, attached as an exhibit to Supplement to Defendant's Motion for Summary Judgment (Docket # 30).
This consent decree requires the City to construct a water filtration plant capable of beginning operation on January 31, 1994. Order at ¶ 3. The decree also provides that the City must notify the DEQE and the Attorney General in the event of any delays, id. at ¶ 4, but that extension of deadlines may be obtained by the written stipulation of the parties. Id. Should the City fail to meet the terms of the decree, the Order also provides for a sliding scale of penalties, based upon the length of the period of non-compliance, which ranges *74 from a minimum of $25 per day to a maximum of $100 per day.[10]Id. at ¶ 6. Significantly, the decree also provides that the Commonwealth will not seek penalties for the past and future violations alleged in its complaint as long as the City remains in compliance with the terms of the order. Id. at ¶ 8.
B. Summary Judgment Standard.
The basic inquiry in a summary judgment motion is whether "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material facts and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).
By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.
As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). (Emphasis in original.)
On a motion for summary judgment, the court's function is to determine "whether there is [evidence] upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed." Anderson, 477 U.S. at 252, 106 S.Ct. at 2512. (Emphasis in original.) (Citation omitted.) In assessing cross-motions for summary judgment, the evidence supporting each motion must be viewed in the light most favorable to the non-movant. Moreover, "all justifiable inferences are to be drawn in [the non-movant's] favor." Id. at 255, 106 S.Ct. at 2513, citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-9, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970).
However, as Judge Selya recently emphasized:
The mere existence of a factual dispute ... is not enough to defeat summary judgment. The evidence relied upon must be "significantly probative" of specific facts, Anderson, 477 U.S. at 249-50 [106 S.Ct. at 2510-11], which are "material" in the sense that the dispute over them necessarily "affect[s] the outcome of the suit." Id. at 248, 106 S.Ct. at 2510.
Warren B. Sheinkopf v. John K.P. Stone III, etc., 927 F.2d 1259, 1261-1262 (1st Cir. 1991). He also noted pointedly that courts "... cannot accept, in lieu of documented facts, conclusory assertions, or wholly anticipatory promise[s] to produce admissible evidence at trial ..." Id. at 1262, quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.1990) (Citations omitted).
This admonition is especially appropriate in situations such as the case at bar, where a defendant seeks to forestall summary judgment by directing the court's attention to what it mightor couldhave done to avoid liability. Here, the City relies heavily upon the affidavit of a one of its employees in an effort to demonstrate that North Adams could have established that it was entitled to a statutory exemption from one of the SDWA regulations at issue here. Given the uncontested factdiscussed below that the City never applied for or was granted a variance, such reliance is misplaced.
The First Circuit's warning to litigants in Local No. 48 v. United Brotherhood of Carpenters and Joiners of America, 920 F.2d 1047, 1051 (1st Cir.1990), bears repeating in this context:
Rule 56 does not invite a court the enter the realm of surmise. Evidence that is *75 based on conjecture or farfetched supposition is not sufficient to derail the operation of the rule.... By the same token, "evidence [that] is merely colorable, or [] not significantly probative" cannot forestall summary judgment. See Anderson, 477 U.S. at 249-250 [106 S.Ct. at 2510-11].
C. Facts of Record.
1. Obligations of the Parties Under Fed.R.Civ.P. 56(e) and Local Rule 56.1
With these guidelines in place, the court will now summarize the technical facts relevant to the Government's allegations that North Adams repeatedly violated the SDWA, as set forth in plaintiff's motion for summary judgment and its supporting documents. The most important of these exhibits are the stipulations of the parties and the affidavits of J. Kevin Reilly ("Reilly"), Massachusetts Public Water System Supervision Program Coordinator for the regional office of the EPA. The City has attacked the sufficiency of Reilly's affidavits on three distinct grounds. Because the court's disposition of the parties' cross-motions for summary judgment turns to a large extent on the facts and conclusions offered in these affidavits, the court will address their validity as a threshold matter.
First, the City contends that Reilly lacks the necessary expertise to offer evidence that would be admissable at trial regarding the violations at issue here. See Defendant's Opposition to Plaintiff's Motion for Partial Summary Judgment at 11. Second, the City urges the court not to accept Reilly's summaries of the technical facts, and the conclusions he draws from these summaries, characterizing his calculations as confusing and his analysis of the City's bacteriological reports in particular as unsound. See Defendant's Response to Reply of United States to Defendant's Opposition to Motion for Partial Summary Judgment at 3-4. Finally, the City asserts that several of the exhibits from which Reilly draws his factual conclusions regarding violations of coliform bacteria MCLs at sample sites in North Adams have been altered. Id., citing plaintiff's exhibits F-16-E through F-16-H, F-13-C, F-13-G, F-13-H, F-14-C through F-14-F, and F-15-B to the parties' Stipulations.
The court will dispose of these objections in reverse order. The challenged exhibits cited above consist of twelve of the Bacteriological Analysis Reports which the defendant City has admitted were prepared by it or on its behalf. The City correctly notes that on these twelve reports an unidentified hand has altered the typed designation indicating what kind of water sample was taken with respect to one or more of the sample locations. Specifically, someone has changed some of the designations from "D" (where D = "regular distribution sample") to "C" (where C = "check sample").
The materiality, if any, of these alterations to plaintiff's entitlement to summary judgment with respect to liability for violations of MCLs for coliform bacteria will be discussed more fully below at section III. B.2. For now, suffice it to say that Reilly avers that even excluding the twelve disputed Bacteriological Analysis Reports containing handwritten alterations, the remaining Reports demonstrate that the coliform MCL was exceeded for the months in question.
Regarding the first two objections, it is important to note that there arein fact three Reilly affidavits: one has been appended as an exhibit to the Government's Opposition to the City's Motion for Summary Judgment, a second affidavit was filed in support of the Government's Motion for Partial Summary Judgment with respect to liability, and the third was submitted in response to the defendant's objections.
The criticism of Reilly's alleged lack of qualifications as an environmental expert with specialized knowledge of water pollution verges on the frivolous. Reilly offered ample information regarding his educational and professional background in the first affidavit. Moreover, in response to defendant's challenge, this information was supplemented in his third affidavit. These three affidavits appear, respectively, as appendices *76 A, B, and C to this memorandum.[*] Reilly's evidence may not be rejected simply based on his alleged lack of qualifications.
With respect to the last objection as to methodology, in the third affidavit Reilly reviews his factual sources and clearly explains how he calculated what percentage of the samples used in evaluating monthly compliance exceeded maximum contaminant levels. The City cannot merely challenge these calculations via attorney argument and rest. Both the Rules of Federal Procedure and the Local Rules require more from a party opposing a properly supported motion for summary judgment.
Under Fed.R.Civ.P. 56(e), the City "may not rest upon the mere allegations or denials" of its pleading but "must set forth specific facts showing that there is a genuine issue for trial." Similarly, Local Rule 56.1 formerly Local Rule 18 provides in pertinent part that "opposition to motions for summary judgment shall include a concise statement of the material facts of record as to which it is contended that there exists a genuine issue to be tried, with page references to affidavits, depositions, and other documentation." (Emphasis added.) The local rule also puts litigants on notice that the moving party's facts "will be deemed for purposes of the motion to be admitted by opposing parties unless controverted" by a properly supported statement of disputed facts. (Emphasis added.)
As will be demonstrated below, the City has largely failed, or been unable, to carry this burden with respect to its opposition to plaintiff's motion for summary judgment. Therefore, the following recitation of the facts of record will be drawn primarily from the Government's Local Rule 56.1 Statements (hereafter "LR 56.1") and its supporting exhibits.[11] Disputes will be noted to the extent that they are genuine, material, and cognizable on the record.
2. Relevant Facts Regarding Applicability of and Responsibility for Enforcing the SDWA
The following facts are uncontested:
1) The City of North Adams is a political subdivision of the Commonwealth of Massachusetts and is a "municipality" and a "person" within the meaning of the SDWA, 42 U.S.C. § 300f. Pl's LR 56.1 at 1, citing Stipulations at ¶ 1.
2) North Adams owns and operates a public water system, the North Adams Water Department (the "Water Department"). Id., citing Stipulations at ¶ 2.
3) The Water Department supplies drinking water from three surface water supplies: the Notch Reservoir; the Mt. Williams Reservoir, and Broad Brook. Id., citing [second] Reilly Aff. at ¶ 19.
4) The Water Department has approximately 4,300 service connections and regularly serves approximately 16,000 residents. Id., citing Stipulations at ¶ 3.
5) The Commonwealth has primary responsibility for enforcement of drinking water regulations within its borders. Def's LR 56.1 at 1, citing Complaint at ¶ 8.
6) On March 7, 1986 the Administrator of the EPA, through his delegatee the Regional Administrator for Region I, notified the Commonwealth and the North Adams Water Department that the Water Department was in violation of federal and state primary drinking water standards. Pl's Opp. LR 56.1 at 1, citing first Reilly Aff. at ¶ 5 and Exhibit 1 to Reilly Aff. (Letter to Russell Sylvia, Commissioner of the Massachusetts DEQE, from Paul Keough, Acting EPA Regional Director, dated 3/7/86).
7) The Commonwealth did not commence enforcement action against the City with respect to these violations of drinking water standards until April 29, 1987, more than 30 days after the Administrator of the EPA notified the state of the violations. *77 Id., citing Exhibit B to Defendant's Motion for Summary Judgment (Copy of Complaint filed by the DEQE); Def's LR 56.1 at 1-2, citing Defendant's Exhibits A (Ware Affidavit) and B (Copy of Complaint filed by DEQE).
3. Alleged Violations of MCL for Turbidity
The City concedes that it has never applied for or been granted a turbidity variance or an exemption from the DEQE, as prescribed in Part 310 of the Code of Massachusetts Regulations, §§ 22.13(6) and 22.14(7). Pl's LR 56.1 at 2, citing Stipulations at ¶ 5 and Pl's Exhibit B (Defendant's Response to Request for Admissions) at ¶¶ 30, 31, 32, and 33. Notwithstanding these admissions, North Adams attempts to create a disputed issue of material fact by asserting that it could make the prerequisite factual showing mandated by these regulations if given an opportunity to do so by the DEQE.
More specifically, defendant maintains that it "can demonstrate that turbidity in the city's water system does not 1) interfere with disinfection; 2) prevent maintenance of effective disinfectant agent [sic] throughout the distribution system; or 3) interfere with microbiological determinations." Def's Opp. LR 56.1 at ¶ 2, citing Plaintiff's Exhibit 4, Deposition of Genesio Breda (former Commissioner of the Defendant's Department of Public Services)[12] [no page numbers are cited]. Similarly, the defendant answered "Admitted in part; denied in part" to Government Request for Admissions # 27-29, which state that the Commonwealth has not made any of the above determinations and has not granted the defendant either an exemption or a variance from the state turbidity MCL. Plaintiff's Exhibit 1.
As indicated above, surmise or conjecture regarding what the City might have been able to establish had it properly sought a variance or had it appealed a denial by the DEQE via administrative or judicial channels cannot forestall summary judgment with respect to liability. Moreover, the excerpts from Breda's deposition place the final nail in the coffin of defendant's post hoc attempt to achieve such an exemption, even if this court were empowered to grant one, which it is not.[13]
First, Breda's testimony makes it clear that he was aware that an exemption from the turbidity MCL could be secured only with the approval of the DEQE, Breda Dep. at 26-28, that he thought the defendant's Water System was entitled to such an exemption, id. at 38, but that he never formally applied for one because on several occasions a DEQE official flatly stated that "You'll never get it." Id. at 39 and 98.
Breda also states that, given the DEQE's unwavering opposition, nothing more than a "sort of a half-hearted attempt" was made to set in motion the "initial stages of demonstrating" that the system was "okay." Id. at 99. Finally, and perhaps most damaging to the City's position, is the affidavit itself. Breda specifically avers that:
The City on several occasions has sought to demonstrate to D.E.Q.E. that the turbidity does not interfere with disinfection with its new state-of-the-art chlorination facilities. D.E.Q.E. officials have refused to permit the City to make that demonstration and have insisted that the City is in violation of D.E.Q.E. regulations whenever turbidity levels exceed one turbidity unit (1NTU).[14]*78 Plaintiff's Exhibit 4, Breda Aff. at ¶ 2. See also Plaintiff's Exhibit 5 (Deposition of Mayor John Barrett) at 49-50.
Citing North Adams' Response to Request for Admissions in the state court action, the Government states that between August 1978 and April 1989, the monthly average turbidity levels of water samples taken from defendant's three surface water supplies repeatedly exceeded 1.0, the maximum permissible level for a public water system which has not received a variance. Pl's LR 56.1 at ¶ 11. The Government also asserts that more recent turbidity reports produced by North Adams in response to plaintiff's request for production of documents in this case indicate additional violations for several of the months between June 1989 and May 1990. Id. at ¶ 12. Finally, the Government asserts that the two-day average turbidities of some samples taken from these water supplies ranged between 5.15 and 8.7 turbidity units during April of 1987. Id. at ¶ 13, citing Stipulations and Defendant's Response to Requests for Admissions at ¶¶ 43-49, 55-57, and 63-65.
For its part, the City merely contends that "the average monthly turbidity of the city's water system has not exceeded 1.0 turbidity unit [the federal and state MCL]." Def's Opp. LR 56.1 at ¶ 1. However, North Adams fails to cite any affidavit, deposition, or document in support of this contention.[15]
Instead, North Adams attacks both the constitutionality and the Government's interpretation of the federal regulation governing turbidity levels, 40 C.F.R. § 141.13. Because the City has not disputed the factual accuracy of the above-cited reports, the plaintiff's entitlement to summary judgment with respect to these alleged turbidity violations turns solely on the success or failure of defendant's attempt to persuade this court that the regulation is unconstitutionally vague or, in the alternative, that the Government has misconstrued § 141.13. There is no adequately supported factual dispute.
4. Alleged Violations of Coliform Bacteria MCL
With respect to coliform bacteria, the Government cites the following Bacteriological Analysis Reports, prepared by or on behalf of the City and utilizing the requisite membrane filtration method of analysis, as evidence that the City repeatedly violated the relevant MCL, 40 C.F.R. § 141.14:
a) forty-eight water samples collected from the City's water system in October 1986, Pl's LR 56.1 at ¶ 15, citing Stipulations and Defendant's Response to Request for Admissions at ¶ 68;
b) forty-eight water samples collected from the City's water system in August 1986, Id., citing Stipulations and Defendant's Response to Request for Admissions at ¶ 71;
c) thirty-seven water samples collected from the City's water system in November 1985, Id., citing Stipulations and Defendant's Response to Request for Admissions at ¶ 75;
d) forty-eight water samples collected from the City's water system in October 1985, Id., citing Stipulations and Defendant's Response to Request for Admissions at ¶ 79; and
e) forty-eight water samples collected from the City's water system in July 1985, *79 Id., citing Stipulations and Defendant's Response to Request for Admissions at ¶ 84.
According to the second Reilly affidavit, in each of these months more than 5% of the samples contained more than four coliform bacteria per 100 milliliters, in violation of the applicable MCL. Pl's LR 56.1 at ¶ 20, citing Plaintiff's exhibit 2 at ¶¶ 3-18. [Attached as appendix B to this memorandum.]
As noted above, after defendant challenged the methodology used by Reilly to arrive at this conclusion and pointed to handwritten alterations of the code distinguishing "regular distribution" samples from "check" samples, Reilly submitted a third affidavit. After explaining how he arrived at the 5% violation figure for each of the above 5 months, Reilly acknowledges having made "some minor mathematical and typographical errors" in his second affidavit. But he avers that these errors "do not substantially affect the results." Exhibit 2 to Plaintiff's Reply to Defendant's Opposition to Plaintiff's Motion for Partial Summary Judgment at ¶ 6.
In opposition to this conclusion, the City has offered two facts of record concerning the city census for 1985 and 1986. Mary Ann Abuisi ("Abuisi"), the defendant's City Clerk, states that North Adams' population for those years was 15,742 and 16,434, respectively. Abuisi Aff. at ¶ 2. Relying only on these figures, defendant takes aim once again at Reilly's calculations, offering attorney argument that runs as follows: the City took more samples than was legally required by the Act;[16] therefore, the monthly coliform averages as computed by Reilly in his affidavits are unreliable because they fail to segregate routine samples from check samples. See Defendant's Memorandum in Opposition to Summary Judgment at 11-12.
Defendant has not offered any facts of record to indicate what the "correct" calculation should be, or whether that calculation would conform to the applicable MCL. Moreover, in his third affidavit Reilly recalculates the averages twice. Plaintiff's Exhibit 2 at ¶¶ 4-5. The first recalculation is based upon the corrected figures for all of the Reports cited above. Id. at ¶¶ 7-29. The second excludes the samples reported as "check" samples from the total, in compliance with 40 C.F.R. § 141.21(d)(4). Both recalculations enable Reilly to state unequivocally that "the conclusion that North Adams violated the MCL at 40 C.F.R. § 141.14(a)(3) is not changed." Id. at ¶ 5.
Finally, Reilly indicates that he performed a third calculation in which he ignored the handwritten designations and used the original typed designations on the altered Reports. While conceding that this would change the above percentages, Reilly emphasizes that "the fact of the violations would not change." Id. at ¶ 30. In sum, "the bottom line is that no matter how one does the calculation, the [coliform] MCL was exceeded." Id. The City has offered no facts of record to contradict this conclusion.
5. Alleged Violations of Coliform Bacteria Monitoring Requirements
The Government also asserts that on ten occasions in 1985 and 1986, North Adams failed to comply with the coliform monitoring provision of the Act. This provision requires that two consecutive daily check samples be collected from any sampling point when the coliform bacteria in a single sample taken pursuant to § 141.12(a) has exceeded four per 100 milliliters.
Citing the Stipulations and Defendant's Response to Request for Admissions at ¶¶ 87-106, plaintiff asserts that check samples should have been, but were not, taken for the following dates and locations:
*80
Date of Coliform per
Original 100 Milliliters
Sample Sample Location in Original
10/18/85 Doran's Bar 9
10/18/85 Adams Nursing Home 25
11/15/85 City Hall 6
11/15/85 Texan Restaurant 5
11/15/85 Rock Manor Mobile Park 5
10/1/86 Chaput's Market 7
10/1/86 Doran's Bar 10
10/1/86 Brother's Store 8
10/1/86 Rock Manor Mobile Park 12
10/1/86 East School 6
Pl's LR 56.1 at ¶ 21.
6. Relevant Facts Regarding North Adams' Contention That There is No Basis to Conclude that Its Water System Presents, or May Present, an Imminent and Substantial Endangerment to Water Consumers' Health
In support of its contention that the Government can no longer maintain this federal enforcement action because it lacks evidence of an "imminent and substantial endangerment" of public health, North Adams emphasizes that the plaintiff has not sought a temporary restraining order or a preliminary injunction since this action was commenced in March of 1989. The City also relies heavily upon the procedural history of the parallel state action, especially the recent progress made in arriving at a judicially enforceable timetable for the construction of a filtration facility. See Defendant's LR 56.1 in its entirety.
North Adams further offers its attorney's statement that he is unaware of: 1) any request made by the Governor or the Massachusetts DEQE to the EPA to commence a civil action against the City or 2) any evidence of the plaintiff's which suggests that any person has become ill as a result of contaminants in defendant's water system. Ware Aff. at ¶ 7. Finally, North Adams cites the deposition of Bernard K. Birkland ("Birkland"), defendant's Sanitarian and Health Director, as evidence that no illness has yet been caused to any person as a result of any contaminant in the City's water system. See Defendant's Memorandum in Support of Motion for Summary Judgment at 6, citing Defendant's Exhibit D (Birkland Deposition Excerpts) [no page citations].[17]
In support of its contention that the City's non-compliance with the SDWA may well pose an "imminent and substantial 7 endangerment" to the health of citizens who rely on defendant's water system, the Government asserts the following facts:
a) The water for the North Adams Water Department is supplied by four unprotected surface water sources[18] and two standby groundwater sources. The only water treatment provided by the Water Department is simple chlorination. However, the system does not provide sufficient chlorine contact time, active watershed protection, rapid mix, flocculation,[19] sedimentation[20] or filtration.[21] Pl's Opp. LR 56.1 at *81 ¶ 3, citing [first] Reilly Aff. ("Reilly Aff. # 1") at ¶ 6.
b) Pathogens[22] may be contained in particulate matter. Turbidity measures particulate matter.[23] North Adams has repeatedly violated the MCL for turbidity and such violations are likely to recur. Id. at ¶ 4, citing Reilly Aff. # 1 at ¶ 7.
c) One mode of introduction of pathogens to water is by the excrement of animals. Animal feces contribute to the turbidity of water, especially during rainstorms as the feces are broken up and can be washed into surface water supplies. Id.
d) Wild animals and humans frequent the watersheds around North Adams' surface water supplies. Id. at ¶ 5, citing Deposition of Norman DeGrenier (caretaker of Broad Brook Reservoir) at 14-19 and 24 (Plaintiff's Exhibit 2 to Opposition to Defendant's Motion for Summary Judgment) and Deposition of Mark Thomann (caretaker of Mt. Williams Reservoir) at 32-39 (Plaintiff's Exhibit 3 to Opposition to Defendant's Motion for Summary Judgment).
e) Increased turbidity may shield pathogens from the disinfection process and may reduce the amount of effective chlorine available to disinfect the water. Id. at ¶ 6, citing Reilly Aff. # 1 at ¶ 8.
f) The Water Department has no watershed control program to minimize the potential for contamination. Id. at ¶ 7, citing Reilly Aff. # 1 at ¶ 9.
g) North Adams provides insufficient chlorine contact time to insure disinfection of disease causing micro-organisms in its Water System prior to ingestion of water by consumers. Id. at ¶ 8, citing Reilly Aff. # 1 at ¶ 10.
h) The Water Department also lacks sufficient long-term storage capacity to provide adequate detention time for the settling of particulate matter in its water supply. Id. at ¶ 9, citing Reilly Aff. # 1 at ¶ 11.
i) Because portions of the defendant's Water Department facilities are more than 70 years old and the system operated without appropriate chlorination facilities for many of those years, micro-organisms are seeded in the distribution system. These micro-organisms may interfere with the detection of coliform bacteria in the water system. Id. at ¶ 10, citing Reilly Aff. # 1 at ¶ 12.
j) Giardia a one-cell pathogenic protozoan inhabits the digestive tract of mammals and is transmitted in its cyst stage from mammal to mammal via the fecal-oral route. The excreted fecal matter may then be transmitted to bodies of water. If not properly treated, drinking water derived from a water source that contains such fecal matter may cause giardiasis. Id. at ¶ 11, citing Reilly Aff. # 1 at ¶ 13.
k) Giardia causes giardiasis, a disease characterized by diarrhea, nausea, cramps, bloating, vomiting, loss of appetite, loss of weight and occasionally fever. Giardiasis, one of the most commonly reported waterborne diseases in the United States, is associated with unfiltered water supplies in water systems which have not adequately treated their drinking water. Id.
l) The combination of repeated turbidity violations, an unfiltered water supply, an unprotected watershed area, the lack of long-term storage capacity, micro-organisms seeded in the distribution system, the possible shielding of pathogens by excessive turbidity or reduction of the amount of effective chlorine as a disinfectant agent, and insufficient disinfectant contact time constitutes an ongoing public health threat to North Adams water users. Id. at ¶ 12, citing Reilly Aff. # 1 at ¶ 14.
m) Contaminants which are present in or are likely to enter into the North Adams Water System may be found to present an imminent and substantial endangerment to the health of its customers. Id. at 13, citing Reilly Aff. # 1 at ¶ 15.
*82 III. DISCUSSION
A. Defendant's Motion for Summary Judgment.
Relying in large part on arguments similar to those it made in its unsuccessful effort to persuade this court to dismiss or stay the federal enforcement action in light of the parallel state suit, North Adams contends that it is entitled to summary judgment with respect to both of plaintiff's claims for relief. More specifically, the City maintains that the Government lacks authority to bring this action under either section 300g-3(b) (First Claim for Relief) or section 300i of the Act (Second Claim for Relief). These arguments remain unpersuasive for the reasons set forth below.
1. Arguments Regarding Plaintiff's First Claim for Relief
As the Government notes, North Adams has offered what amounts to a jurisdictional challenge to plaintiff's First Claim for Relief (see Complaint, First Claim for Relief), brought pursuant to 1414(b) of the Act, 42 U.S.C. § 300g-3(b). Having considered these arguments carefully, the court must conclude that defendant's interpretation of the jurisdictional prerequisites of the Act is wrong as a matter of law.
Section 300g-3(b) authorizes the Administrator of the EPA to bring a civil action in United States district court in order to achieve compliance with the SDWA under the conditions set forth in § 300g-3(a)(1) of the Act. These provisions govern situations where, as here, a state has primary enforcement responsibility for ensuring that its public water systems comply with national primary drinking water standards. This section requires that the Administrator must first notify the State and the public water system of any non-compliance. The state then has 30 days either to bring the system into compliance with the regulations or to commence an "appropriate" enforcement action.
This section further provides in pertinent part:
If, beyond the thirtieth day after the Administrator's notification ... the State has not commenced appropriate enforcement action, the Administrator shall issue an order under subsection (b) of this section requiring the public water system to comply with such regulation or requirement or the Administrator shall commence a civil action under subsection (b) of this section.
§ 300g-3(a)(1)(B). (Emphasis added.) Here, it is undisputed that the EPA notified both Commonwealth and the City of noncompliance on March 7, 1986, that the DEQE did not institute a civil action in state court until April 29, 1987, well over thirty days after the EPA notification, and that the EPA did not file this suit until March of 1989.
Citing this chronology, North Adams attempts to construe this subsection as a statute of limitations barring the instant federal action. The City's argument is that the provision requires not the state but the EPA to commence an "appropriate" enforcement action within thirty days. The court agrees with the plaintiff that Congressional intent with regard to this subsection was to provide the Government with the option of judicial action should the delegated state fail to take appropriate enforcement action within 30 days. See United States v. ITT Rayonier, Inc., 627 F.2d 996, 1002 (9th Cir.1980) (construing a similar provision in the Clean Water Act as a thirty-day waiting period for the EPA).
In addition, even if state action had been commenced within the prescribed 30 days, the City would still not be able to meet its burden of demonstrating that the state suit was, or is, indisputably an "appropriate" action within the meaning of the statute, given the procedural and factual record before this court. Indeed, except for the additional facts involving the execution and terms of the consent decree, the City's contentions here with respect to the appropriateness of the state action amount to nothing more than a recycling of its unsuccessful argument in support of its motion to dismiss or stay the federal enforcement action.
While the recent docketing of a consent decree does indicate that significant progress has been achieved in the parallel state action, such progress is not dispositive. *83 Viewing the facts in the light most favorable to the Government, it is undisputed that the consent decree does not address all of the violations and issues raised by the pending federal action. Moreover, the Government seeks more stringent, but not conflicting, relief. See United States v. Cargill, Incorporated, 508 F.Supp. 734, 740 (D.Del.1981) (emphasizing that diligence as well as appropriateness are key factors to consider when evaluating parallel state and federal actions under the Clean Water Act).
Finally, the Government notes that the stipulated penalties for non-compliance with this consent decree are significantly lower than the $1000 per day fines stipulated by the parties in other cases brought by the state against municipalities for violations of other environmental standards.[24] Plaintiff urges this court to draw the not unreasonable inference that absent the federal enforcement action North Adams would have little financial incentive to adhere to the timetable, especially in light of the relatively greater costs of financing the proposed filtration plant.[25]
Equally compelling are the Government's two arguments regarding the procedural history of the two suits, especially the timing of North Adams' decision to cooperate with the state by entering into a judicially enforceable consent decree. See Brewer v. City of Bristol, 577 F.Supp. 519, 527-528 (E.D.Tennessee 1983) (diligence of prosecution of state enforcement effort must be balanced against timing, especially where state effort was not instituted promptly). When viewed in the light most favorable to the non-moving party, this sequence of events raises a reasonable inference that the City's belated willingness to enter into a binding consent decree in August 1990 (only after Chief Judge Freedman adopted this court's Report and Recommendation not to stay or dismiss the federal enforcement action) may well have been the result of pressure generated by this action.
Moreover, as the Government correctly asserts, facts relevant to jurisdiction are properly determined as of the time of filing of the federal complaint. See, e.g., Chesapeake Bay Foundation v. Gwaltney, 890 F.2d 690, 693-94 (4th Cir.1989). The "appropriateness" vel non of the state action should not be measured by progress achieved almost four years after it was initiated and two years after the filing of the parallel federal action. In sum, the jurisdictional attack on plaintiff's first claim for relief must fail.
2. Arguments Regarding Plaintiff's Second Claim for Relief
Equally unavailing is the City's contention that it is entitled to summary judgment under § 300i of the Act because the Government has not sought a temporary restraining order or a preliminary injunction. This section, which sets forth the EPA's Emergency Powers under the SDWA, permits but does not require the Administrator to seek a "restraining order or permanent or temporary injunction" as one of the actions authorized against "imminent and substantial endangerment" to health. 42 U.S.C. § 300i(a)(2). (Emphasis added.)
Similarly, the City's construction of the phrase "imminent and substantial endangerment" as requiring a showing of a) actual harm in the form of reports of human illness, rather than the risk of such harm and b) imminent harm in the sense of "immediate" harm, is unpersuasive and unsupported by either legal authority or the legislative history of the Act. Indeed, excerpts from the legislative history of Section 1431 of the Act cited by the Government indicate that the opposite is true.
*84 Specifically, these excerpts state that "... while the risk of harm must be `imminent' for the Administrator to act, the harm itself need not be." Plaintiff's Memorandum in Opposition to Summary Judgment at 15-16, citing House Rep. No. 93-1185 at 35-36. (Emphasis added.) "Thus ... the Administrator may invoke this section when there is an imminent likelihood of the introduction into drinking water of contaminants that may cause health damage after a period of latency." Id. (Emphasis added.)
Similarly, the City offers no authority in support of its contention that actual reports of human illness are required to establish the presence of a "substantial" endangerment to water consumers. Again, an excerpt from the legislative history offered by the Government lists the following as "among those situations" in which the endangerment may appropriately be regarded as "substantial" within the meaning of the SDWA:
(1) a substantial likelihood that contaminants capable of causing adverse health effects will be ingested by consumers if preventive action is not taken; (2) a substantial statistical probability that disease will result from the presence of contaminants in drinking water; or (3) the threat of substantial or serious harm (such as exposure to carcinogenic agents or others hazardous contaminants).
Id. (Emphasis added.)
Plaintiff cites two cases which construe the term "imminent and substantial endangerment" under the SDWA and other environmental statutes. Both indicate that what must be imminent is not the actual harm itself but the risk of harm if remedial action is not taken. See United States v. Price, 688 F.2d 204, 213-214 (3rd Cir.1982) and United States v. Conservation Chemical Co., 619 F.Supp. 162, 191-197 (W.D.Mo. 1985).
In light of the evidence offered by the Government with respect to the substantial endangerment issue, the City has failed to carry its burden of demonstrating that undisputed facts entitle it to summary judgment as a matter of law with respect to plaintiff's second claim for relief.
To conclude, the court finds that on the record before it the defendant is not entitled to summary judgment with respect to plaintiff's first or second claims for relief.
B. Plaintiff's Motion for Summary Judgment With Respect to Claim One.
The Government argues that it is entitled to summary judgment as a matter of law under §§ 300f-300j-11 of the SDWA with respect to the City's liability for repeated violations of the Act's MCLs for turbidity and coliform bacteria as well as the SDWA's coliform bacteria monitoring requirements. For the reasons set forth below, this court agrees that, even when the record is viewed in the light most favorable to the City and all reasonable inferences are drawn in the City's favor, North Adams cannot carry its burden of establishing that a genuine and material issue of disputed fact precludes summary judgment on plaintiff's first claim for relief.
1. Alleged Turbidity Violations.
The City seeks to avoid summary judgment with respect to liability for continued violations of the federal turbidity MCL by attacking the Government's interpretation of the regulation, by attempting to challenge the validity of the regulation and by asserting that even if the regulation is valid and the Government has properly construed it North Adams escapes liability because it is entitled to a variance or exemption from the prescribed MCL. Significantly, the City does not otherwise dispute the facts offered by the Government in support of its motion. The City's three grounds for avoiding liability for the alleged turbidity violations will be addressed seriatim.
40 C.F.R. § 141.13, the federal regulation setting forth the applicable turbidity MCL, reads as follows:
The maximum contaminant levels for turbidity are applicable to both community water systems and non-community water systems using surface water sources in whole or in part. The maximum contaminant *85 levels for turbidity in drinking water, measured at a representative entry point(s) to the distribution system, are:
(a) One turbidity unit (TU), as determined by a monthly average pursuant to § 141.22, except that five or fewer turbidity units may be allowed if the supplier of water can demonstrate to the state that the higher turbidity does not do any of the following:
(1) Interfere with disinfection;
(2) Prevent maintenance of an effective disinfectant agent throughout the distribution system; or
(3) Interfere with microbiological determinations.
(b) Five turbidity units based on an average for two consecutive days pursuant to § 141.22.[26]
(Emphasis added.)
The City reads this regulation as requiring the Government to establish a monthly average turbidity exceeding one TU for the entire water system, rather than for discrete ground water sources within that system. Noting that the Government has not established monthly turbidity figures for every single supply source for every single month in question, the City therefore contends that the Government has failed to establish that the entire system was in violation for any month but April 1987. See Defendant's Memorandum in Opposition to Summary Judgment at 3-4.
The Government responds by pointing to the text of the regulation, which states that turbidity is to be measured "at a representative entry point(s) to the distribution system," and by asserting that compliance must be determined at the point or points of entry, not throughout the system as a whole. The Government's construction of the regulation is further bolstered by the regulatory definition of "maximum contaminant level," supra n. 3, which expressly directs that turbidity levels be measured not at the point of delivery to the user but at the point[s] of entry into the distribution system.[27]
Moreover, the court agrees with the Government that, having taken such samples pursuant to the applicable federal and state regulations, the City should not now be heard to complain that such samples are not valid evidence of violations of these very regulations.
Nor is the City any more persuasive with respect to its contention that § 141.13 itself is invalid, ambiguous or unconstitutionally vague. See Defendant's Memorandum in Opposition to Summary Judgment at 4-7.
First, the Government correctly notes that § 1448(a) of the SDWA, 42 U.S.C. § 300j-7(a), sets forth the required procedure for challenging a primary drinking water regulation once it has been promulgated by the EPA. In pertinent part, this section provides that "[a]ction of the Administrator with respect to which review could have been obtained under this subsection shall not be subject to judicial review in any civil or criminal proceedings for enforcement or in any civil action to enjoin enforcement."
Second, the Court of Appeals for the District of Columbia has exclusive jurisdiction over challenges to the validity of these regulations. See Halogenated Solvents Industry Alliance v. Thomas, 783 F.2d 1262 (5th Cir.1986). North Adams is therefore precluded from attempting to use the instant enforcement action as a vehicle to mount a belated challenge to the validity of § 141.13.
Finally, defendant's contention that the Government has the burden of establishing that the higher five TU provision of § 141.13 does not apply here is unavailing. As the Government correctly maintains, the plain language of the regulation indicates that the five TU provision becomes operative only if and when the supplier makes the requisite demonstration to the *86 state. Moreover, the EPA's interpretation of the statutory scheme "is entitled to some deference." Halogenated Solvents, 783 F.2d at 1265.
Even were this not the case, the evidence relied on by North Adams regarding its ability to make such a showing ironically undermines its position. Section 141.4 expressly provides that variances or exemptions may be granted pursuant to §§ 1415 and 1416 of the Act only "by the entity with primary enforcement responsibility." It is uncontested that the Commonwealth is that entity in the case at bar. Breda's affidavit as well as his deposition testimony make it clear not only that the state failed to grant the City a variance or exemption but also that the defendant failed even to apply properly for such a variance or exemption. See 42 U.S.C. §§ 300g-4 and 300g-5, prescribing the procedure for application to a state for a variance or an exemption, respectively.[28]
This court concludes thaton the basis of the undisputed facts regarding defendant's repeated violations of the turbidity MCLthe Government is entitled to summary judgment with respect to liability under § 141.13 of the SDWA as a matter of law.
2. Alleged Coliform Bacteria Violations.
The Government next asserts that it is entitled to summary judgment as a matter of law with respect to the coliform bacteria MCL violations alleged in Reilly's affidavits. Section 141.14(a)(3) reads as follows:
The maximum contaminant levels for coliform bacteria, applicable to community water systems and non-community water systems, are as follows:
(a) When the membrane filter technique pursuant to § 141.21(a) is used, the number of coliform bacteria shall not exceed any of the following:
. . . . .
(3) Four per 100 milliliters in more than five percent of the samples when 20 or more are examined per month.
(Emphasis added.)
As noted above, the City has challenged Reilly's qualifications as well as his method of determining what percentage of the samples exceeded four per 100 milliliters. However, with one exception, North Adams has not disputed the accuracy of the underlying bacteriological reports: it takes issue only with Reilly's reliance on the twelve reports which contain handwritten alterations.
40 C.F.R. § 141.21(d)(4) states that determinations of compliance with 141.14 must be based on results "from all coliform bacteria analyses performed pursuant to this sub-part," except for "check samples" or "special purpose samples." (Emphasis added.) As previously noted, in accordance with § 141.21(d)(4) Reilly recalculated the averages twice. First, he excluded all samples recorded as check samples from his computations. Then he ignored the handwritten alterations and recalculated the percentages.
All three calculations demonstrate that for each of the months at issue here: 1) more than 20 regular samples were examined and 2) more than 5% of these routine samples exceeded 4 coliform bacteria per 100 milliliters. Based on Reilly's uncontested affidavits, this court finds as a matter of law that North Adams violated § 141.14 for the following months: October 1986; August 1986; November 1985; October 1985; and July 1985.
3. Alleged Violations of the SDWA's Coliform Monitoring Requirements.
The Government also asserts that North Adams failed to comply with the Act's coliform bacteria monitoring provisions on ten occasions during 1985 and 1986. The version of 40 C.F.R. § 141.21(d)(1) in effect prior to December 31, 1990, reads as follows:
When the coliform bacteria in a single sample exceed four per 100 milliliters (§ 141.14(a)), at least two consecutive daily check samples shall be collected and examined from the same samples *87 point. Additional check samples shall be collected daily, or at a frequency established by the State, until the results obtained from at least two consecutive check samples show less than one coliform bacterium per 100 milliliters.
(Emphasis added.)
The City does not contest these alleged violations. Instead, North Adams states in conclusory fashion that the EPA lacks authority to promulgate such requirements. Moreover, North Adams contends that even if such authority exists, the EPA may not subject water suppliers to civil penalties for violations of this provision.
No caselaw has been cited by either party on this issue, but the Government has offered persuasive excerpts from the legislative history of the Act as well as the SDWA's definitional section in support of its entitlement to seek civil penalties for monitoring violations. Specifically, plaintiff maintains that when Congress authorized the EPA to formulate "national drinking water regulations," this authorization extended not only to the establishment of MCL's but also to the establishment of "criteria and procedures to assure a supply of drinking water which dependably complies with such maximum contaminant levels; including quality control and testing procedures to insure compliance with such levels...." 42 U.S.C. § 300f(1)(D). (Emphasis added.) See Plaintiff's Memorandum in Support of Summary Judgment at 9-10.
Under § 300g-3(b) of the Act, which authorizes the EPA to seek civil penalties by bringing suit under the Act, a court is authorized to impose civil penalties if it determines "that there has been a violation of the regulation or schedule or other requirement with respect to which the action was brought...." Citing this section, the Government maintains that courts may assess a civil penalty "for each day" in which North Adams violated the monitoring regulation.
The court's research has turned up one case and two docketed consent decrees that support the Government's contention that a failure to perform sampling required by the Act can trigger the imposition of civil penalties. See, United States of America v. Alder Creek Water Company, Civil Action No. 79-1090-JU (April 26, 1984 D. Oregon), 21 ERC (BNA) 1300; United States of America v. Boca Chica Water Supply, Inc., 1989 EPA Consent Lexis No. 7 (July 12, 1989 S.D.Tex.); and United States of America v. Town of Bolton, Mississippi, 1989 EPA Consent Lexis No. 45 (March 15, 1989 S.D.Miss.). It is noteworthy, however, that violations of SDWA regulations involving the failure to take required samples have been viewed as less serious than violations of MCL regulations and have therefore resulted in comparatively lower fines. See Alder Creek, supra.
The City's final attempt to evade liability turns once again on its contention that even if such violations occurred, the parallel state action precludes the instant federal enforcement action because the state action has already "resolved" the issues. The court remains unpersuaded and concludes that the Government is entitled to summary judgment as a matter of law with regard to the City's violations of the SDWA's coliform bacteria monitoring requirements.
IV. CONCLUSION
For the foregoing reasons, this court hereby recommends that the defendant's Motion for Summary Judgment be DENIED and that the plaintiff's Motion for Partial Summary Judgment with respect to liability on its first claim for relief be ALLOWED.[29] The court recommends that *88 the district court issue the plaintiff's proposed order, which is attached as Appendix D.[**]
NOTES
[1] The account which follows is identical to the procedural history that appears in th[e Magistrate Judge's] January 17, 1990 Report and Recommendation Regarding Defendant's Motion to Dismiss or Stay, except that it has been updated to include subsequent developments substantiated by the expanded record now before th[e Magistrate Judge].
[2] A judge of the Suffolk Superior Court did meet with counsel for the City and representatives of the DEQE and the EPA on January 8, 1988. At that meeting the parties to the state suit had negotiated a timetable for construction of a water filtration plant by the City. See Exhibit A to Defendant's Motion for Summary Judgment in the case at bar, Affidavit of Attorney Robert C. Ware ("Ware") at ¶ 4. Attorney Ware further avers that since that date, the City has been acting pursuant to the negotiated schedule. Id. at ¶ 5.
[3] of Failure to Comply Penalty Per Day
1st14th day $25.00
15th21st day $50.00
each day thereafter $100.00
The decree also sets forth the procedures governing the City's right to dispute a determination of non-compliance. Order at ¶ 6.
[4] Many of the City's objections come without citations to the Magistrate Judge's Report, without citations to supporting authorities, and without justification or supporting argument of any kind. While the Court has considered each of the City's arguments, the Court will not provide extensive discussion with regard to conclusory and unsupported objections. See Crooker v. Van Higgins, 682 F.Supp. 1274, 1282 (D.Mass. 1988) (Freedman, C.J.) ("Broad yet unsupported objections will not be permitted and failure to make specific and documented objections may foreclose de novo review.").
[5] Title 40 C.F.R. § 141.13 provides in its entirety as follows:
Maximum contaminant levels for turbidity.
The maximum contaminant levels for turbidity are applicable to both community water systems and non-community water systems using surface water sources in whole or in part. The maximum contaminant levels for turbidity in drinking water, measured at a representative entry point(s) to the distribution system, are:
(a) One turbidity unit (TU), as determined by a monthly average pursuant to § 141.22, except that five or fewer turbidity units may be allowed if the supplier of water can demonstrate to the State that the higher turbidity does not do any of the following:
(1) Interfere with disinfection;
(2) Prevent maintenance of an effective disinfectant agent throughout the distribution system; or
(3) Interfere with microbiological determinations.
(b) Five turbidity units based on an average for two consecutive days pursuant to § 141.22.
[6] The EPA's interpretation of a statutory scheme is due substantial deference. United States v. Cannons Engineering Corp., 899 F.2d 79, 91 (1st Cir.1990) (CERCLA); Halogenated Solvents Industry Alliance v. Thomas, 783 F.2d 1262, 1265 (5th Cir.1986) (SDWA).
[7] On August 7, 1990, the Massachusetts legislature changed the name of the Department of Environmental Quality Engineering to the Department of Environmental Protection. 1990 Mass.Acts ch. 177.
[8] Title 40 C.F.R. § 141.14 requires that the public water system take routine samples of its water in order to determine whether the amount of coliform bacteria in the water exceeds the maximum contaminant levels allowed under federal regulations. Section 141.14(a)(3) provides that water supplies shall not contain more than "[f]our [coliform bacteria] per 100 milliliters in more than five percent of the samples when 20 or more are examined per month."
Should the routine samples indicate that the water contains coliform bacteria in excess of that allowed by section 141.14, however, the procedures detailed in 40 C.F.R. § 141.21(d) become applicable. Section 141.21(d)(1) provides that "[w]hen the coliform bacteria in a single sample exceed four per 100 milliliters (§ 141.14(a)), at least two consecutive daily check samples shall be collected and examined from the same sampling point." Any violations confirmed by the check samples must be reported to the State within 48 hours.
Thus, the regulations require the City to take check samples in the event that coliform bacteria levels exceed four per 100 milliliters. However, the regulations further provide that the check samples shall not be used to determine compliance with the maximum contaminant levels for coliform bacteria as established in section 141.14. 40 C.F.R. § 141.21(d)(4). Such compliance will be determined from "all coliform bacterial analyses performed ... except those obtained from check samples and special purpose samples...." Id. (emphasis added).
[9] The regulations impose on the City a duty to take water samples, compile and record data regarding water quality, and report any violations of federal water samples. See 40 C.F.R. §§ 141.21, 141.33(a)(2) and 141.31. Thus, the Court will not entertain the City's arguments that Reilly's data is insufficient to establish coliform bacteria violations when the City itself had the obligation to record the very data necessary to make those determinations. Furthermore, any contention that the handwritten alterations of the records change the sufficiency or reliability of the water records is without merit. The City has produced no evidence that would refute the credibility of the records, and indeed, the City has stipulated to the authenticity of the water records, including those records that contain handwritten alterations. See Defendant's Response to Requests for Admissions ¶ 87-106 (September 9, 1989) (attached as exhibit B to Stipulations (September 13, 1989)).
[1] This matter has been referred to the court for report and recommendation pursuant to Rule 3 of the Rules for United States Magistrates in the United State District Court for the District of Massachusetts, 28 U.S.C. § 636(b)(1)(B).
[2] See Note, The Protection of Groundwater and Public Drinking Supplies: Recent Trends in Litigation and Legislation, 42 Vand.L.Rev. 1649, 1658 (1989).
[3] At 40 C.F.R. § 141.2 the term "maximum contaminant level" is defined as "the maximum permissible level of a contaminant in water which is delivered to the free flowing outlet of the ultimate user of a public water system, except in the case of turbidity where the maximum permissible level is measured at the point of entry to the distribution system."
[4] Turbidity measures particulate matter in water. The federal MCL for turbidity are codified at 40 C.F.R. § 141.13.
[5] Coliform bacteria is an indicator of certain types of microbiological contaminants in water. The federal MCL for coliform bacteria, also referred to as the maximum microbiological contaminant levels, are codified at 40 C.F.R. § 141.14.
[6] At all times relevant to the instant case, the federal requirement for repeat coliform monitoring was codified at 40 C.F.R. § 141.21(d)(1).
[7] The account which follows is identical to the procedural history that appears in this court's January 17, 1990 Report and Recommendation Regarding Defendant's Motion to Dismiss or Stay, except that it has been updated to include subsequent developments substantiated by the expanded record now before this court.
[8] The federal regulation, 40 C.F.R. § 141.13, is construed below at section III.B.1.
[9] A judge of the Suffolk Superior Court did meet with counsel for the City and representatives of the DEQE and the EPA on January 8, 1988. At that meeting the parties to the state suit had negotiated a timetable for construction of a water filtration plant by the City. See Exhibit A to Defendant's Motion for Summary Judgment in the case at bar, Affidavit of Attorney Robert C. Ware ("Ware") at ¶ 4. Attorney Ware further avers that since that date, the City has been acting pursuant to the negotiated schedule. Id. at ¶ 5.
[10] of Failure to Comply Penalty Per Day
1st-14th day $25.00
15th-21st day $50.00
each day thereafter $100.00
The decree also sets forth the procedures governing the City's right to dispute a determination of non-compliance. Order at ¶ 6.
[*] Editor's Note: Appendices A-C omitted from publication by the Court.
[11] Because these are cross-motions for summary judgment, each party has submitted two LR 56.1 statements, one in support of its own motion for summary judgment and one in opposition to its adversary's motion for summary judgment. For ease of reference, the court will refer to these in abbreviated form as Def's LR 56.1, Def's Opp. LR 56.1, Pl's LR 56.1, and Pl's Opp. LR 56.1.
[12] The Breda Affidavit cited by defendant actually appears as an exhibit attached to excerpts from Breda's deposition, submitted as Plaintiff's exhibit 4. This affidavit, dated December 16, 1987, was originally submitted by Breda as part of the state court proceeding. The Department of Public Services includes management of the water system. Breda, who apparently retired in January 1990, had formerly served as City Engineer. Breda Dep. at 7.
[13] See discussion below at Section III. B.
[14] The one unit state maximum is identical to the federal MCL for turbidity, as discussed below in Section III. B.
[15] The City does, however, append the affidavit of Richard R. Boucher ("Boucher"), the general foreman of the North Adams Water Department. Boucher avers that he had "several conversations" with Reilly during visits made by Reilly to North Adams. On one such occasion, Reilly allegedly advised him that: 1) turbidity levels should be reported to the second decimal point, and 2) a turbidity level of 1.4 or less did not constitute a violation of the federal turbidity regulation. Boucher Aff. at ¶¶ 2-3. Boucher also states that based on his "personal measurements of turbidity levels" and his "personal review" of turbidity reports, he knows that there have been "a number of occasions when the turbidity at one of the City of North Adams' surface water sources was between 1.0 and 1.4 turbidity units." Id. at ¶ 4. Because no specific dates, water sources, or reports are referred to, defendant's reliance on this exhibit is unavailing. Boucher's affidavit does not conform to LR 56.1 in that it fails to controvert any of the specific facts relied on by the Government with respect to violations of the turbidity MCL.
[16] 40 C.F.R. section 141.21 sets forth a sliding scale of the minimum number of routine samples that must be taken per month, based on a city's population.
[17] The deposition excerpts cited by North Adams are actually somewhat ambiguous on this point. Birkland indicates that some Giardia tests were done after the City became alarmed about reports of waterborne diseases, but that the tests came back negative. Birkland Dep. at 43-46.
[18] Reilly has apparently included the Mt. Greylock reservoir to arrive at a total of four such sources.
[19] "Flocculation" means a process to enhance agglomeration or collection of smaller floc particles into larger, more easily settleable particles through gentle stirring by hydraulic or mechanical means. 40 C.F.R. § 141.2.
[20] "Sedimentation" means a process for removal of solids before filtration by gravitation or separation. 40 C.F.R. § 141.2.
[21] "Filtration" means a process for removing particulate matter from water by passage through porous media. 40 C.F.R. § 141.2.
[22] Pathogens are disease causing agents, such as bacteria or fungi. The American Heritage Dictionary, 2nd ed. at 910.
[23] See note 4, supra.
[24] The Government has submitted four examples of consent decrees, entered into in 1987-88 and offered as plaintiff's Exhibits 4-7.
[25] According to the Government's computations, the maximum yearly penalty provided for under the consent order docketed in the state court action would amount to $36,500, while the cost of borrowing the $5 million necessary to build the facility could reach well over $250,000 in interest alone. See Plaintiff's Memorandum in Opposition to Summary Judgment at 13, n. 4. The conservative $5 million figure is derived from the deposition testimony of Mayor Barrett at 92-83. The Mayor actually indicated that the cost could reach $7 million. Id.
[26] Section 141.22 prescribes the sampling method to be used.
[27] The logic for measuring turbidity levels at the point[s] of entry into the distribution system is further underscored by the facts of the case at bar. The three surface water supplies in use by the defendant during the time periods relevant to this action service different areas of the City. See Plaintiff's Memorandum at 3, citing Boucher Dep. at 17-21, and 28-29.
[28] Section 300j-7(b)(1), which governs judicial review of actions respecting variances and exemptions, only becomes operative once a variance or exemption has been granted or refused.
[29] The parties are hereby advised that under the provisions of Rule 3(b) of the Rules for United States Magistrates in the United States District Court for the District of Massachusetts, any party who objects to these findings and recommendations must file a written objection thereto with the Clerk of this court within ten (10) days of the party's receipt of this Report and Recommendation. The written objection must specifically identify the portion of the proposed findings or recommendations to which objection is made and the basis for such objection. The parties are further advised that failure to comply with this rule shall preclude further appellate review by the Court of Appeals of the District Court order entered pursuant to this Report and Recommendation. See U.S. v. Valencia-Copete, 792 F.2d 4, 6 (1st Cir.1986); U.S. v. Escoboza Vega, 678 F.2d 376, 379 (1st Cir.1982). See also, Thomas v. Arn, 474 U.S. 140, 154-55, 106 S.Ct. 466, 474-75, 88 L.Ed.2d 435 (1985).
[**] Editor's Note: Appendix D omitted from publication by the court.
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251 Ga. 197 (1983)
304 S.E.2d 391
WELCH et al.
v.
THE STATE.
39754.
Supreme Court of Georgia.
Decided June 29, 1983.
Lawson, Washington & Thornton, Charles S. Thornton, for appellants.
Howard T. Oliver, Solicitor, for appellee.
SMITH, Justice.
This is a criminal case wherein appellants challenge the constitutionality of the public drunkenness statute, OCGA § 16-11-41 (Code Ann. § 26-2607), and also cite as error certain rulings and comments of the court below which they argue deprived them of a fair trial. We affirm.
In February 1982, appellants, who are husband and wife, were traveling aboard a railroad train through Georgia from New Orleans to New York. The record shows that from the time they came aboard at 8:30 a. m. in New Orleans the appellants and members of their party had been buying drinks in the lounge car. During the day they became increasingly loud and profane, and were belligerently uncooperative when asked by the conductor to show their tickets as *198 they neared Atlanta in the evening. Train personnel requested assistance from police and the appellants were arrested in Gainesville at about 9:00 p. m. Both resisted arrest and police had to forcibly subdue the pair to get them off the train. Appellants were charged with public drunkenness and obstruction of a police officer in the lawful discharge of his duties.
1. Appellants first enumerate the general grounds. We find that the evidence was sufficient to support the jury's verdict under the standards of Jackson v. Virginia, 443 U. S. 307 (99 SC 2781, 61 LE2d 560) (1979).
2. Appellants next assert that it was error for the trial court to charge the jury by merely reading OCGA § 16-11-41 (Code Ann. § 26-2607) to them verbatim and to refuse to clarify upon the jury's request. It is well established that the court has a duty to recharge when the jury so requests. Edwards v. State, 233 Ga. 625 (212 SE2d 802) (1975). The record shows that in the present case the court recharged the jury by reciting the applicable statute, although without further explanation, and made clear to them the applicable law. Unlike the cases cited by appellants, the jury here did not demonstrate confusion or misconception as to the applicable law. The record shows that upon conclusion of the recharge, the judge asked the foreman and the jury whether there were further questions. The foreman answered that he had none and no one on the jury responded. Appellants failed to object to the form of the recharge or to request amplifying instruction. Thus, there was no error in not providing such instruction.
3. Appellants enumerate as error the trial court's failure to charge as requested regarding warrantless arrest. This enumeration has no merit. The court need not give the exact language of a request to charge when the same principles are otherwise fairly given to the jury. Jackson v. State, 249 Ga. 751 (295 SE2d 53) (1982); Logue v. State, 155 Ga. App. 476 (271 SE2d 42) (1980). The court properly charged the jury as to the principles of law concerning warrantless arrest.
4. Appellants challenge OCGA § 16-11-41 (Code Ann. § 26-2607), the public drunkenness statute, as vague and overbroad both on its face and as applied. In evaluating such a challenge the U. S. Supreme Court has recently said that it would consider any limiting construction proffered by a state court. Village of Hoffman Estates v. Flipside, Hoffman Estates, 455 U. S. 489 (102 SC 1186, 71 LE2d 362) (1982). We will do the same in our review of the public drunkenness law.
We have construed OCGA § 16-11-41 (Code Ann. § 26-2607) to require that the accused not only be or appear intoxicated, but that *199 he manifest this condition by boisterous, vulgar, loud, profane, or unbecoming language. Scarborough v. State, 231 Ga. 7 (200 SE2d 115) (1975). The Court of Appeals has further held that unless one of these outward manifestations or acts is present, no violation of the law has occurred. Peoples v. State, 134 Ga. App. 820 (216 SE2d 604) (1975).
The void-for-vagueness doctrine as interpreted by the U. S. Supreme Court "requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement." Kolender v. Lawson, 51 USLW 4532, 4533 (May 2, 1983). OCGA § 16-11-41 (Code Ann. § 26-2607), as presently drafted and construed by the courts of this state, contains clear standards for determining whether the conduct of an accused is violative of its terms. See Adams v. State, 153 Ga. App. 41 (264 SE2d 532) (1980). It describes with sufficient particularity the acts prohibited and neither on its face nor in its application does it furnish police a tool for arbitrary encroachment upon constitutionally protected conduct. Accordingly, we find no merit in this enumeration.
5. In their fifth enumeration appellants cite as error the trial court's refusal to allow voir dire to be reopened for a certain juror who stated his occupation as "retired" during questioning of the jurors. He was then asked whether prior to his retirement he belonged to any law enforcement organizations. He answered negatively, but nonetheless was later peremptorily struck. The next day the district attorney informed defense counsel that the prospective juror had been a bailiff of the Superior Court of Hall County. There is no assertion that the district attorney had this knowledge during voir dire.
Appellants requested further voir dire of this juror and sought to establish grounds to challenge for cause. The court denied this request. Appellants assert that, where their peremptory strikes were later exhausted, they were harmed by being forced to use a peremptory strike for a juror who might have been excused for cause.
In Bradham v. State, 243 Ga. 638 (256 SE2d 331) (1979), cited by appellants in support of their contention, the challenged juror stated that he had three sons who were law enforcement officers in another county and he would be inclined to give more credence to a police officer's testimony than a non-police witness. The court refused to dismiss him for cause and the juror was struck peremptorily by the defendant who exhausted his peremptory strikes. We conclude that Bradham is inapposite for two reasons. Defense counsel in this case had ample opportunity to question the juror, discover his status, and *200 challenge him for cause. This was not done. The trial court thus did not refuse to excuse the juror for cause, as was the case in Bradham. Second, no authority is cited, and we know of none, for the proposition that a bailiff is presumptively unable to consider in an impartial and unbiased manner the facts and law of a case presented to him. Unlike the juror in Bradham, the prospective juror here agreed that a law enforcement officer might not always be a truthful or believable witness.
"In Georgia, control of the voir dire examination is vested in the discretion of the trial judge and will not be interfered with unless it is clearly shown that such discretion was abused." Ruffin v. State, 243 Ga. 95, 97 (252 SE2d 472) (1979). In the present case there was no abuse of the trial court's discretion in conducting voir dire and we find no merit in this enumeration.
6. In enumerations six and seven, appellants cite as error the trial court's denial of their motions for mistrial and new trial because of improper remarks and comments by the prosecution during opening argument and summation. This included a characterization of the appellants as "civil rights leaders," uncivilized, and people "used to civil disobedience." Appellants argue that these statements were inflammatory, improper, and highly prejudicial. The trial court appropriately instructed the jury that opening comments are not evidence and are not to be considered as such. The court also admonished and rebuked the state's attorney for these remarks.
OCGA § 17-8-75 (Code Ann. § 81-1009) commits to the judge's discretion the decision to order a mistrial where counsel has made statements of prejudicial matters not in evidence before the jury. This discretion will not be interfered with on appeal unless manifestly abused. Ladson v. State, 248 Ga. 470 (6, 7) (285 SE2d 508) (1981); White v. State, 159 Ga. App. 545 (284 SE2d 76) (1981). No such abuse occurred here and these enumerations are without merit.
7. In enumerations eight and nine appellants argue that various rulings and comments of the trial court, as well as the presence of armed law officers in the courtroom, had the cumulative effect of denying them a fair trial. The record shows that attorneys for both the appellants and the state were zealous in the representation of their clients and frequently objected to evidence offered by the other and disagreed with the court's various rulings during the trial. Nevertheless, the trial was free from irrelevant or prejudicial remarks calculated to stir up racial prejudices and animosity. The cases cited by the appellants involving racially inflammatory comments from the bench or counsel are thus inapposite here. Nor did the court intervene unnecessarily in the trial to address appellant's counsel in such a way as to intimidate him. "The trial judge has broad discretion *201 in handling these matters and we are loath to interfere with that discretion unless it is manifestly abused by clearly demonstrated prejudice or unfairness." Dyke v. State, 232 Ga. 817, 825 (209 SE2d 166) (1974). In this case we find no clearly demonstrated prejudice or unfairness and thus no reason to interfere with the rulings of the court.
As to the question of guards in the courtroom, it is well established that the trial court may in its discretion take the measures it deems reasonably necessary to insure that the courtroom is secure and conducive to the conduct of a fair and safe trial. See Green v. State, 246 Ga. 598 (6) (272 SE2d 475) (1982). There were public demonstrations and rallies by supporters of the appellants during the course of this trial. At least one nationally known person participated in a rally on the appellants' behalf. In these circumstances it was not an abuse of discretion to ensure a safe and orderly proceeding by having present at the trial law enforcement officers.
Appellants contend that it was improper to exempt from the sequestration order two prospective prosecution witnesses, the county sheriff and the police officer who investigated the case. OCGA § 24-9-61 (Code Ann. § 38-1703) gives either party the right to have witnesses sequestered, but it is subject to the discretion of the trial judge who may make exceptions. Davis v. State, 242 Ga. 901 (3) (252 SE2d 443) (1979). We fail to see how these exceptions were an abuse of the court's discretion. The sheriff never testified, and the investigator was shown to be needed to assist the district attorney in the trial of the case, an exception we have previously approved. See McNeal v. State, 228 Ga. 633 (4) (187 SE2d 271) (1972).
Appellants also argue, without a formal enumeration, that it was error to deny a change of venue, in light of highly inflammatory and prejudicial media coverage of the upcoming trial. As we explained in Kesler v. State, 249 Ga. 462 (7) (291 SE2d 497) (1982), widespread and adverse publicity per se does not necessarily warrant a change of venue. The record contains no evidence that publicity prior to and contemporaneous with the trial had a prejudicial impact upon the appellants' case. The record contains only one newspaper article and one editorial, neither of which can conceivably be called inflammatory. The record also shows that, applying the voir dire test of Krist v. Caldwell, 230 Ga. 536 (2) (198 SE2d 161) (1973), the jurors summoned to try this case had not formed fixed opinions as to the guilt or innocence of the accused from reading or hearing of the case. It was not error to deny the motion for change of venue.
8. In enumeration ten appellants contend that it was error to deny them access to the complete pre-trial statements of certain *202 prosecution witnesses. The trial court examined the statements in response to appellants' motion to produce and denied it, ruling that they contained no exculpatory material. Appellants contend that they are entitled to review the statements, regardless of the court's conclusion as to the materiality of their contents, upon service of a notice to produce pursuant to OCGA § 24-10-26 (Code Ann. § 38-801).
As we said in Stevens v. State, 242 Ga. 34 (1) (247 SE2d 838) (1978), witness statements have never been subject to a notice to produce, although exculpatory witness statements are subject to disclosure where requested under Brady v. Maryland, 373 U. S. 83 (83 SC 1194, 10 LE2d 215) (1963). In compliance with Brady and its progeny, the trial court here made an in-camera inspection of the requested statements and found no exculpatory information. In such a case, appellants then have the burden of showing both the materiality and the favorable nature of the evidence sought. Instead, appellants here merely speculate that the statements possibly contain exculpatory information, and thus fail to carry this burden. Although the proponents of the statements were subject to cross-examination during the trial, appellants cite no inconsistencies between the proffered testimony and the statements requested, nor do they assert prejudice from the absence of these statements prior to trial. Appellants have failed to show cause and we need not call for the sealed statements to examine them. See Wilson v. State, 246 Ga. 62 (1) (268 SE2d 895) (1980). We find no error under either Brady or OCGA § 24-10-26 (Code Ann. § 38-801).
9. In enumeration eleven appellants contend that the cumulative prejudicial impact of the errors specified in enumerations three, four, six, seven, eight and nine are such as to require the vacating of the judgment of conviction and the granting of a new trial. We have already considered these enumerations and found them to be without merit. They require no further consideration.
Judgment affirmed. All the Justice concur.
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304 S.E.2d 875 (1983)
Ronald GOUGH and Grace Gough
v.
Manuel LOPEZ and Anne Ice Lopez, and Westinghouse Electric Corporation, a Foreign Corporation Authorized to do Business in the State of West Virginia.
No. 15653.
Supreme Court of Appeals of West Virginia.
July 6, 1983.
*876 Franklin D. Cleckley, Morgantown, Dennis H. Curry and Roger D. Curry, Frank V. Sansalone, Fairmont, for appellants.
Herschel H. Rose, Timothy J. Padden, Rose, Southern & Padden, Fairmont, for appellees.
Alfred J. Lemley, Furbee, Amos, Webb & Critchfield, Fairmont, for Westinghouse.
McHUGH, Justice:
This action is before this Court upon an appeal by the appellants, Ronald Gough and Grace Gough, from a summary judgment entered against them in the Circuit Court of Marion County, West Virginia. That judgment was entered by order on May 20, 1982. This Court has before it the petition for appeal, all matters of record and the briefs of counsel.
The appellee is Westinghouse Electric Corporation. The facts giving rise to these proceedings occurred at a manufacturing plant operated by Westinghouse in Fairmont, Marion County, West Virginia. Appellant, Ronald Gough (hereinafter "Gough"), and Manuel Lopez (hereinafter "Lopez") were employees at the Fairmont plant during the period in question.
Gough asserts that in March, 1978, in or near the Westinghouse parking lot, a collision occurred between motor vehicles driven by Gough and Lopez. Later that day, Lopez made several calls to the Westinghouse plant manager to complain about the collision. The petition for appeal states that the plant manager ultimately "hung up" on Lopez. Gough further asserts that on March 13, 1978, subsequent to the collision, Lopez, without provocation, assaulted Gough in the Westinghouse parking lot with a blunt instrument. Gough contends that he was hospitalized as a result of the assault and became totally and permanently disabled.
Ronald Gough and Grace Gough instituted an action against Manuel Lopez and Anne Ice Lopez in circuit court to recover damages for the motor vehicle collision and for the March 13, 1978, assault. Westinghouse was also a defendant in that action. Gough asserted that Westinghouse, inter alia, negligently failed to warn him of the impending assault by Lopez, (1) despite the allegation that Westinghouse knew or *877 should have known of the vicious propensities of Lopez, and (2) despite the allegation that Westinghouse knew or should have known that Lopez was lying in wait in the parking lot of the Westinghouse plant in preparation for the assault upon Gough.[1]
By order, the circuit court granted the motion of Lopez for a severance between the claim of Gough against Lopez and the claim of Gough against Westinghouse.[2]
With respect to the claim against Westinghouse, Gough indicated that he would seek to introduce at trial evidence that upon three separate occasions in 1973 Lopez assaulted a Westinghouse employee, Myrtle Louise Miller, at the Fairmont plant. Gough asserted that each of the assaults against Miller was unprovoked, two of which resulted in surgery upon Miller. Gough further asserted that each assault against Miller was reported to Westinghouse management.
Gough contended in circuit court, and contends in this Court, that he was entitled to introduce evidence of the 1973 alleged assaults for the purpose of establishing his theory that Westinghouse had notice of the "vicious propensities" of Lopez and negligently failed to warn Gough of the impending assault of March 13, 1978.[3]
As reflected in the final order of May 20, 1982, and in the transcript of a pretrial hearing held on March 1, 1982, the circuit court held that the evidence relating to the 1973 alleged assaults by Lopez upon Myrtle Louise Miller would not be admissible at the trial between Gough and Westinghouse. *878 The circuit court concluded that (1) the 1973 alleged assaults were too remote in time to be relevant to the alleged assault against Gough, (2) inasmuch as Lopez was acquitted during a contested peace bond proceeding in Marion County relating to one or more of the 1973 assaults, that acquittal diminished Gough's justification for introducing the 1973 assaults in his action against Westinghouse and (3) because Westinghouse had no apparent legal basis to discipline or discharge Lopez with respect to the 1973 alleged assaults, particularly in view of the acquittal with respect to the peace bond proceeding, evidence of the 1973 assaults would not be admissible against Westinghouse at trial.
As indicated in its final order, the circuit court further held "that evidence of defendant, Manuel Lopez's, reputation for violence upon the Westinghouse property is admissible, but the `Miller Incidences' can neither be a basis for such reputation evidence nor mentioned in the presence of the jury in the trial against defendant Westinghouse."
It is from the holding of the circuit court, i.e., that the alleged assaults by Lopez in 1973 would not be admissible at the trial against Westinghouse, that Gough appeals to this Court. He asks that we set aside the summary judgment and remand this action to the circuit court for trial. We agree and hold that the circuit court abused its discretion by ruling that the 1973 alleged assaults were not admissible.
First, we conclude that, under the circumstances of this case, remoteness is not a proper ground for the exclusion at the trial against Westinghouse of evidence relating to the alleged assaults.
In Yuncke v. Welker, 128 W.Va. 299, 36 S.E.2d 410 (1945), the jury found in favor of the plaintiff in an action where the plaintiff's injuries allegedly resulted from the negligent operation by the defendant's son of the defendant's automobile. At trial, the circuit court permitted the plaintiff, in establishing his damages, to testify concerning the amount of his earnings as a carpenter within a period of five years prior to the accident. The defendant asserted that such evidence concerning earnings was too remote in time to the accident and that the admission of that testimony thus constituted reversible error. Rejecting the defendant's assertion, this Court held that the circuit court did not abuse its discretion in admitting the plaintiff's testimony with respect to his prior earnings. In syllabus point 5, this Court held as follows:
Whether evidence offered is too remote to be admissible upon the trial of a case is for the trial court to decide in the exercise of a sound discretion; and its action in excluding or admitting the evidence will not be disturbed by the appellate court unless it appears that such action amounts to an abuse of discretion.
However, this Court, citing State v. Yates, 21 W.Va. 761 (1883), elaborated upon the remoteness issue as follows:
This Court, in dealing with this subject, has said that an abuse of discretion is more likely to result from excluding, rather than admitting, evidence that is relevant but which is remote in point of time, place and circumstances, and that the better practice is to admit whatever matters are relevant and leave the question of their weight to the jury, unless the court can clearly see that they are too remote to be material.[4]
128 W.Va. 311-12, 310 S.E.2d at 416.
In M. Marshall, J. Fitzhugh and J. Helvin, The Law of Evidence in Virginia and West Virginia, § 75 (Michie 1954), it is stated:
*879 When the question is one of the remoteness of offered evidence, the decision is necessarily largely within the trial court's discretion, although this discretion is not unbounded, but must be governed by sound legal principles. However, in Virginia and West Virginia, so jealously is the jury's province guarded by the careful separation of the functions of judge and jury that, if the evidence tends even slightly to prove a fact from which a fact in issue may be inferred, it will generally be admitted, the weight to be given it being left to the jury.
That language from The Law of Evidence in Virginia and West Virginia was quoted with approval in Poe v. Pittman, 150 W.Va. 179, 193-94, 144 S.E.2d 671, 681 (1965). Furthermore, this Court stated in Arbogast v. Vandevander, W.Va., 245 S.E.2d 620, 621 (1978), that "[r]emoteness usually goes to the weight rather than the admissibility of evidence...."
Evidence of the alleged assaults by Lopez in 1973 is clearly not remote in terms of "place and circumstances." Gough asserts that the 1973 assaults by Lopez occurred upon Westinghouse premises, as did the assault of March, 1978. Gough further asserts that, as in his case, the 1973 assaults were unprovoked and made upon a Westinghouse employee. With respect to the issue of remoteness in time, we note that although the prior assaults are alleged to have occurred in 1973, three separate assaults at that time by Lopez are asserted to have occurred, two of which resulted in surgery upon Ms. Miller. Although Gough's claim against Westinghouse is based upon negligence or gross negligence, the conduct of Lopez in 1973, and with respect to Gough, is alleged to have been intentional and to have resulted in serious injury. We are of the opinion that, under the circumstances of this case, evidence of the assaults of Lopez in 1973 involves a question of weight before the jury, rather than a question of admissibility.
Nor do we find the acquittal of Lopez upon the contested peace bond proceedings, or the question of the right of Westinghouse to have disciplined or discharged Lopez upon the alleged assaults of 1973, to be sufficient grounds for the circuit court's ruling that the alleged assaults of 1973 are inadmissible in the trial against Westinghouse. There is nothing in the record before this Court to indicate that the acquittal of Lopez upon the contested peace bond proceedings reached the merits of Lopez's three alleged assaults against Ms. Miller. The record before this Court does not indicate whether the existence of the three assaults was even proven or disproven during the peace bond proceedings. Those proceedings and the resulting judgment of acquittal do not, therefore, preclude Gough from submitting evidence with respect to the three alleged assaults by Lopez against Ms. Miller in 1973.
Finally, we do not find the admissibility at trial against Westinghouse of the alleged prior assaults to be dependent upon the question of whether Westinghouse could have disciplined or discharged Lopez for those assaults. The record before this Court is speculative upon the right of Westinghouse to have disciplined or discharged Lopez and thus cannot constitute a sufficient ground for the rejection of Gough's evidence concerning the alleged assaults.
Upon all of the above, the final order of the Circuit Court of Marion County, West Virginia, is hereby reversed, and this case is remanded to that court for proceedings consistent with this opinion.
Reversed and remanded.
NOTES
[1] Although the claim of Gough against Westinghouse is based upon negligence or gross negligence, there is no assertion in the record that the action against Westinghouse is precluded by the laws of this State relating to workers' compensation. See W.Va.Code, 23-1-1, et seq.
[2] It should be noted that, citing Bowman v. Barnes, W.Va., 282 S.E.2d 613 (1981), Westinghouse contends before this Court that the circuit court committed error in granting the severance of the claim of Gough against Lopez from the claim of Gough against Westinghouse. We find that contention to be without merit.
In the action before this Court, the claims against Lopez and Westinghouse are predicated upon separate theories of liability. As count II of the amended complaint indicates, Gough asserts that he was assaulted by Lopez without justification, provocation or excuse and in a willful and malicious manner. No assertion is made with respect to the assault that Lopez was negligent. On the other hand, as count III of that complaint indicates, the claim of Gough against Westinghouse is based upon negligence or gross negligence, i.e., the alleged negligent failure of Westinghouse to warn Gough of the impending assault.
We are of the opinion, therefore, that the granting of the severance was within the discretion of the circuit court. See W.Va.R.Civ.P. 42(c). The Bowman case, supra, although critical of the granting of separate trials, was concerned with comparative negligence and is not dispositive of the severance issue in this appeal.
[3] There is authority for the proposition that one who retains in his employment an employee, whose reputation is such that the employer may foresee that he is likely to make an assault upon other employees, is liable for injury to an employee caused by such an assault. See 53 Am.Jur.2d Master and Servant § 212 (1970).
In Missouri K. & T. Ry. Co. v. Day, 104 Tex. 237, 136 S.W. 435 (1911), the plaintiff, assaulted by a fellow employee, charged his employer, a railway company, with negligence. The plaintiff indicated that the company knew or should have known that the fellow employee was unfit for employment. The negligence of the company, based upon the evidence, was held by the Supreme Court of Texas to be a jury question.
The Supreme Court of Kansas in Murray v. Modoc State Bank, 181 Kan. 642, 313 P.2d 304 (1957), affirmed the trial court's overruling of a demurrer to the plaintiff's petition, where the plaintiff asserted that the defendant bank negligently retained an employee with known violent tendencies. The plaintiff, a bank customer, alleged that he was assaulted by that employee.
Thus, the Murray case did not involve an assault by an employee against a fellow employee. Nevertheless, the Supreme Court of Kansas recognized that the question of the employer's negligence was for determination at the trial court level. As the Kansas court stated:
Construing the pleading most favorably to the petitioner as we must, the issue presented is whether the employer, The Modoc State Bank, was negligent in retaining its managing officer, Breithaupt, who had propensities toward violence. What the evidence will disclose upon trial of the case we are not at liberty to speculate.
181 Kan. at 649, 313 P.2d at 309.
[4] The opinion in State v. Yates, supra, states that:
For, although where a relevant fact has greater or less weight in proportion to its proximity or remoteness in point of time, place and circumstances, it is sometimes held that the court may, in its discretion fix the limit beyond which it becomes of inappreciable weight and reject it as immaterial though relevant, it is a practice liable to abuse, and therefore, unless the court can clearly see that it is too remote to be material, the safer and more satisfactory rule is for the court to admit whatever is relevant and leave the question of its weight to the jury....
21 W.Va. at 764-65.
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304 S.E.2d 671 (1983)
STATE of West Virginia
v.
Clyde Daniel ALDRIDGE.
No. 15600.
Supreme Court of Appeals of West Virginia.
June 23, 1983.
*672 John R. Mitchell, Charleston, for appellant.
Janet F. Steele, Asst. Atty. Gen., Charleston, for appellee.
HARSHBARGER, Justice:
Clyde Daniel Aldridge appeals from a second-degree murder conviction after a second trial in the Circuit Court of Logan County. He was convicted on July 15, 1981 of the February 18, 1979 murder of Brady Burgess, a bootlegger, who conducted business from his residence at Blair, Logan County. Burgess, who was found dead inside his house by a prospective customer at approximately 8:30 p.m., had been seen alive about two hours earlier. Medical testimony established that he died at about 8:00 p.m. from multiple stab wounds, and state police investigators found blood both inside and outside Burgess' house and took samples for analyses.
Aldridge, then a juvenile approaching his sixteenth birthday, was seen with three or four other young men at the victim's residence in the late afternoon on the day of the killing, and was sought for questioning.
At trial two state troopers were asked on direct examination about having seen Aldridge the day after the killing, walking along State Route 17 at Blair. Trooper G.A. Ables, in charge of the investigation, testified that when they recognized Aldridge, they stopped their police car, told him they wanted to ask him some questions, and requested that he be seated in the back of their car. Trooper Ables noted that the temperature was about sixty degrees that afternoon and that Aldridge was wearing gloves. One of the troopers asked him to remove them, he did, and the officers saw a laceration on his right hand. They then drove him to a point near his home and released him. Aldridge had also been seen by other people, in public, with an injured hand.
He was not arrested until after Trooper Ables was informed by one Daniel Lee Wilson on March 5, 1979, that he had seen a cut on one of the fingers of Aldridge's right hand two days after the crime, and that Aldridge had at that time admitted killing Burgess. Aldridge was charged the next day.
The defense objected to the trooper's testimony about the hand wound, but after an in camera hearing, the trial judge ruled that if there was any error in the admission of this testimony, it had already been committed, *673 and refused to instruct the jury to disregard the trooper's observations.[1]
On February 22, 1979, Trooper Ables was informed by the department's chemist that the blood found outside the victim's home was a different type than that found inside. Ables and an assistant prosecutor appeared before the circuit court judge later that day, advised him of the foregoing information, and the judge issued an order authorizing a blood sample to be taken from Aldridge at a nearby hospital, which was done. No affidavit was presented to the judge, and the court order does not affirmatively show that the prosecutor and trooper were under oath. That blood sample was analyzed, but was not introduced at Aldridge's trial.
The defense did not dispute the existence of the hand wound, and introduced evidence that Aldridge cut his hand on a piece of tin while working on a cattle pen at his parent's residence the day before the homicide.
Following the first trial that resulted in a hung jury, a second blood sample was taken from Aldridge on August 23, 1979, upon a search warrant issued by a local magistrate. The blood test results from the second sample were introduced at the second trial, and the State's chemist testified that the blood found outside the victim's home was consistent with Aldridge's blood type, a type found in only 2.2 percent of the general population.
Aldridge moved to suppress any evidence resulting from the second test, contending that the court order authorizing the first blood sample was invalid because it was not supported by evidence given under oath or affirmation, and that this illegality made the test results on the second blood sample inadmissible "fruit of the poisonous tree".[2] Following a pretrial hearing, the trial court overruled his motion to suppress, relying on Schmerber v. California, 384 U.S. 757, 86 S.Ct. 1826, 16 L.Ed.2d 908 (1966).[3]
Aldridge's primary argument is that he was subjected to an unconstitutional nonconsensual search when he was required to remove his gloves, see, e.g., State v. Williams, W.Va., 249 S.E.2d 758 (1978); State v. Thomas, 157 W.Va. 640, 203 S.E.2d 445 (1974), and that the officers' testimony about seeing the wound was therefore inadmissible. He also contends this illegal search tainted subsequent blood tests.
There was no contention either prior to trial, at trial, or in Aldridge's motion for a *674 new trial that the blood testing evidence was tainted by the police officers' observation of Aldridge's hand. The thrust of the argument below went to a claimed Miranda violation.[4]
In State v. Peacher, W.Va., 280 S.E.2d 559, 575 (1981), we recognized that "Fourth Amendment jurisprudence is not a well-settled area of immutable rules ...." Theoretical and analytical difficulties are often present in this frequently litigated, rapidly changing area of constitutional law. Even so, we are convinced that no unreasonable search occurred here.
In State v. Boswell, W.Va., 294 S.E.2d 287 (1982), we discussed whether a police officer had impermissibly seized a defendant by tapping on the window of a van and asking for identification. We concluded that the facts within the officer's knowledge were sufficiently suspicious to warrant the inquiry, and that such inquiry was so minimally intensive that the defendant was not seized.
Our analysis in Boswell relied heavily on a line of decisions by the United States Supreme Court beginning with Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). The significance of Terry, for present purposes, is the Court's recognition that certain limited "seizures" of the person are so substantially less intrusive than arrests that the traditional rule requiring probable cause is simply not applicable. See also Florida v. Royer, ___ U.S. ____, 103 S.Ct. 1319, 75 L.Ed.2d 229 (1983); Lafave, "Street Encounters" and The Constitution: Terry, Sibron, Peters, and Beyond, 67 Mich.L.Rev. 39 (1968).
It is now a basic principle underlying most search and seizure questions that "[t]he Fourth Amendment of the United States Constitution, and Article III, Section 6 of the West Virginia Constitution protect an individual's reasonable expectation of privacy." Syllabus Point 7, State v. Peacher, supra. Aldridge, however, had, at most, only a very limited reasonable privacy interest in keeping a glove on his cut hand.
Also, he had displayed his wound in public after the killing. The Fourth Amendment "provides no protection for what `a person knowingly exposes to the public' ...." United States v. Dionisio, 410 U.S. 1, 14, 93 S.Ct. 764, 771, 35 L.Ed.2d 67, 79 (1973), quoting Katz v. United States, 389 U.S. 347, 351, 576, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967); see generally Davis v. Mississippi, 394 U.S. 721, 723-25, 89 S.Ct. 1394, 1396, 22 L.Ed.2d 676, 679 (1969).
The "fruit of the poisonous tree" doctrine has no application when the government learns about evidence from an independent source. Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963); Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319 (1920); Bynum v. United States, 274 F.2d 767 (D.C.Cir.1960); see Pitler, "The Fruit of the Poisonous Tree", Revisited and Shepardized, 56 Calif.L.Rev. 579 (1968). Facts illegally obtained do not "become sacred and inaccessible. If knowledge of them is gained from an independent source they may be proved like any others ...." Silverthorne Lumber Co., supra, 251 U.S. at 392, 40 S.Ct. at 183, 64 L.Ed.2d at 321. The independent source limitation on the exclusionary rule has been applied to facts learned by the police both before and after an alleged illegal search or seizure. See, e.g., United States v. Bacall, 443 F.2d 1050 (9th Cir.1971); J. Hall, Jr., Search and Seizure § 22.5 (1982); 3 W. Lafave, Search and Seizure § 11.4 (1978). We recognized the independent source doctrine in State v. Peacher, supra, approving a search pursuant to a warrant that had been issued upon a supporting affidavit that had untainted evidence establishing probable cause.
Fault in the authorization for taking the first blood sample (the order was not founded upon affidavit or sworn testimony) did not preclude the State from taking a *675 second valid blood sample.[5] The first blood sample did not lead to the second blood sample; both samples resulted from information about and observation of a laceration on Aldridge's hand.
During the first trial, the state learned of certain inadequacies in its first blood test analyses. Also, by the time of the second trial, the State's criminal investigation laboratory had acquired more sophisticated blood-typing capability involving enzyme testing. There were practical reasons for a second blood test that could have, but did not, work to Aldridge's advantage.
We have considered all remaining assignments of error including those relating to competency to stand trial and evidentiary insufficiency, and find no merit in any of them.
For the foregoing reasons, the judgment of the Circuit Court of Logan County is affirmed.
Affirmed.
NOTES
[1] Trooper Ables testified on direct examination as follows:
"Q. Did you have occasion to talk with Clyde Daniel Aldridge that day?
"A. Yes, sir.
"Q. And where did you talk to him?
"A. In the back of a State Police car.
"Q. At the time you talked to him, did you notice anything unusual about him?
"A. I noticed he had gloves on.
"Q. Why would you consider that unusual?
"A. It was approximately 60 degrees that day. It was a warmer day than it had been.
"Q. And did you notice anything unusual about his hands?
"A. On one hand, on the right hand was a large cut.
"Q. Could you use your own hand to demonstrate to the jury where this cut would have been located on Clyde Daniel Aldridge's hand?
"A. Through this area. [Indicating.]
"MR. MITCHELL: Objection, Your Honor...."
[2] The Fourth Amendment of the United States Constitution and Article III, Section 6 of our Constitution provide that no warrant shall issue except upon probable cause, supported by oath or affirmation.
[3] In Schmerber, the Supreme Court ruled that blood samples are subject to Fourth Amendment scrutiny. As in most reported blood test cases, the blood sample in Schmerber was taken to determine the alcohol content of the blood as a means of establishing intoxication. Because the alcohol level in human blood diminishes rapidly after ingestion of alcohol ceases, the Supreme Court carved out an exception to the warrant requirement because the time necessary to secure a warrant from a magistrate could lead to dissipation of the highly evanescent evidence. Obviously, no such emergency is present where blood typing is the object of the search and seizure. Blood types do not change from hour to hour.
Justice Brennan wrote for the Court that "the Fourth Amendment's proper function is to constrain, not against all [government] intrusions as such, but against intrusions which are not justified in the circumstances, or which are made in an improper manner." 384 U.S. at 768, 86 S.Ct. at 1834, 16 L.Ed.2d 918.
[4] There was no assertion that Aldridge was illegally seized. See, e.g., State v. Stanley, W.Va., 284 S.E.2d 367 (1981); State v. Boswell, W.Va., 294 S.E.2d 287 (1982).
[5] We have recognized or applied the fruit of the poisonous tree doctrine in a number of cases. See, e.g., Note 3, State v. Winston, W.Va., 295 S.E.2d 46 (1982); State v. Hawkins, W.Va., 280 S.E.2d 222, 227 (1981); State v. Stone, W.Va., 268 S.E.2d 50, 54 (1980); Note 2, State ex rel. Williams v. Narick, W.Va., 264 S.E.2d 851 (1980); State v. Williams, W.Va., 249 S.E.2d 758 (1978).
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280 Pa. Superior Ct. 175 (1980)
421 A.2d 462
William B. GETZIK and Ethel Getzik, his wife, in her own right
v.
Raymond D. SPIEGEL, David Gibilovitz and Richard Spiegel, Appellants.
Superior Court of Pennsylvania.
Submitted June 11, 1980.
Filed September 26, 1980.
*176 S. David Fineman, Philadelphia, for appellants.
Louis M. Paul, Philadelphia, for appellees.
Before BROSKY, WATKINS and CIRILLO[*], JJ.
CIRILLO, Judge:
This case arose out of a trespass action brought by the appellees on January 11, 1979. Appellee-plaintiff, William Getzik, alleged that he fell on ice and fractured his wrist while walking on appellants' property. On February 21, 1979, appellants' attorney entered his appearance and filed a Rule on appellees' attorney to file a complaint within twenty days or suffer a judgment of non pros. A letter was then mailed to counsel for appellees advising him that he would be given ten additional days to file a complaint. A complaint was not filed, and on March 27, 1979, a judgment of non pros was entered. The appellees then filed a Petition to Open Judgment in Philadelphia Common Pleas Court on April 23, 1979. The Petition was granted on June 18, 1979, and it is from that Order that this appeal is taken.
The appellants contend that the trial court erred in opening a judgment of non pros where no depositions were taken and where there were contested issues of fact.
*177 This court has held that, pursuant to Pa.R.C.P. 209, when a respondent effectively denies material allegations in a petition to open, the petitioner must either take depositions on disputed factual issues or order the cause for argument on petition and answer, thereby conceding the existence of all facts properly pled in the answer. Zinck v. Smashy's Auto Salvage, Inc., & City of Philadelphia, 250 Pa.Super. 553, 378 A.2d 1287 (1977); Shainline v. Alberti Builders, Inc., 266 Pa.Super. 129, 403 A.2d 577 (1979).
It must be noted that in the absence of a local Philadelphia County rule, the factual averments of a responsive answer may not be taken as true against a petitioner unless the petitioner himself orders the "cause for argument on petition and answer" or, unless the petitioner ignores, for fifteen days, a rule absolute to move for depositions. Instapak Corp. v. S. Weisbrod Lamp and Shade Co., Inc., 248 Pa.Super. 176, 374 A.2d 1376 (1977).
In Instapak, supra, this court faced an almost identical situation in the lower court and found the lower court's action to be premature:
Here, appellee as the moving party did not proceed by rule or by agreement of counsel to take depositions; neither did appellee order the cause for argument on petition and answer; neither did appellant as respondent take a rule on appellee to show cause why it should not either proceed to take depositions or order the cause for argument on petition and answer. Instead, with only the petition and answer, the lower court granted the petition. That decision was premature. The dispositive issue is whether appellee's counsel did or did not have a mistaken belief about the date by which an answer had to be filed, and on that issue the court had before it no evidence, only contradictory pleadings. Such being the case, the court had no proper basis for preferring one party's version to the other party's.
Id., 248 Pa.Super. at 181-182, 374 A.2d at 1379.
Here, the dispositive issue is whether the alleged illness and health of appellees' counsel caused him to miss *178 the notice that he had to file a complaint within a specified time. There was no evidence, only contradictory pleadings, before the lower court on this issue. Therefore, the court's decision was premature, and we hereby remand this case for further proceedings consistent with Pa.R.C.P. 209.
Reversed and remanded.
NOTES
[*] Judge VINCENT A. CIRILLO, of the Court of Common Pleas of Montgomery County, Pennsylvania, is sitting by designation.
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777 F.Supp. 195 (1991)
UNITED STATES of America, ex rel. KREINDLER & KREINDLER, Plaintiff,
v.
UNITED TECHNOLOGIES CORPORATION, Defendant.
No. 87-CV-1626.
United States District Court, N.D. New York.
November 14, 1991.
*196 Kreindler & Kreindler, New York City (David Beekman, of counsel), Washington, D.C. (Patrick Lee, of counsel), for plaintiff.
Claire M. Sylvia, Asst. Counsel, U.S. Senate, Office of Senate Legal Counsel, Robert Michael Long, Asst. Counsel, Washington, D.C., amicus curiae.
Charles Teefer, Asst. Counsel, U.S. House of Representatives, DeGraff Foy Conway Holt-Harris & Mealey, Albany, N.Y. (Christopher Massaroni, of counsel), Crowell & Moring, Washington, D.C., for defendant.
MEMORANDUM-DECISION AND ORDER
McCURN, Chief Judge.
I. Introduction
The plaintiff, Kreindler & Kreindler, known as the "relator" in this type of qui tam proceeding, is a law firm which has filed fraud claims against the defendant, United Technologies Corp. ("UTC"), pursuant to the provisions of the False Claims Act, particularly 31 U.S.C. §§ 3729 and 3730. The relator claims that defendant UTC concealed a design defect in the rotors of helicopters it sold to the U.S. Army. The defendant has filed four separate motions two motions to dismiss and two motions for summary judgment. The defendant moves to dismiss on the grounds that the portions of the False Claims Act which permit relator to sue on behalf of the United States government are unconstitutional inasmuch as they violate the separation of powers doctrine and the Appointments Clause of the U.S. Constitution, and because relator does not have standing to bring the claims. Defendant also moves to dismiss for lack of subject matter jurisdiction because the relator is not an "original source" of the information upon which its claims are based, as required by 31 U.S.C. § 3730(e)(4)(A). Defendant moves for summary judgment, contending that relator's claims are barred by the applicable statute *197 of limitations, and that relator is prohibited from using most of the evidence on which it bases its claims by a settlement agreement and protective order involving the same two parties in a previous wrongful death action.
II. Background
The relator, Kreindler & Kreindler, represented Audrey Bryant, the wife of U.S. Army Warrant Officer Charles Edward Bryant, in a wrongful death action brought in this court as a result of Mr. Bryant's death on August 5, 1982, in the crash of an Army helicopter manufactured by the defendant UTC. That litigation was terminated by a settlement agreement entered into by Mrs. Bryant and Sikorsky Aircraft, a division of UTC, on July 21, 1987. The parties had also previously entered into a stipulation and protective order, dated November 21, 1984, which provided that "the documents, data, information and other materials provided by [UTC] in the defense of this action and/or pursuant to plaintiff's pretrial discovery requests ... shall be used by plaintiff solely for the purposes of this action." The settlement agreement stated: "As a condition to this Agreement, Mrs. Bryant and her attorneys expressly agree to [return the documents and materials and] ... to honor all other terms and conditions of the Stipulation and Protective Order." The settlement agreement stated further that it was "binding upon Mrs. Bryant and United Technologies Corporation and their respective ... attorneys. ..." The settlement agreement was signed by Mrs. Bryant, representatives from UTC, and Francis Fleming, an attorney for Kreindler & Kreindler.
As relator states in the complaint, its claims in the present action are based on information obtained from UTC in discovery in the previous action, Bryant v. United Technologies Corp. Complaint, para. 2, 5. The relator claims that UTC was awarded a contract by the United States government to provide the Army with several hundred UH-60A "Black Hawk" helicopters. One of the features required by the contract was the ability to fold the rotor blades of the helicopters so they could be transported in Army transport planes. Relator claims that in late 1977 or early 1978, UTC discovered that its design to incorporate this feature, in which "blade fold pins" were to be inserted into the "flight control assembly system" to eliminate pressure on the flight control system, was defective in that the prefabricated holes into which the pins were to be inserted did not line up. This aspect of the design proposal has never been corrected by UTC, relator asserts, although approximately 690 Black Hawk helicopters have been delivered by UTC to the Army. Relator alleges that UTC secretly revised its design rather than refabricate the affected components so that the pins could be inserted. Relator alleges that UTC made its design change, which consisted of changing the type of bearing used in the flight control assembly system, without advising the United States that the change was being made or obtaining required approval for the change. Relator also claims that UTC failed to advise the United States that a hazard had been created by the abandonment of the blade fold pin design, and that UTC knew of the hazard. Relator claims that UTC changed the procedure by which rotor blades could be folded, calling for pitch control rods to be disconnected, although this change in procedure would make it impossible for the blade folding process to be completed in the time limits specified in the Army production contract. UTC later informed the Army of an alternative process which entailed inserting a block of wood into the rotor assembly to relieve pressure on the rotor system during the blade folding process. These failures to meet the required specifications and failure to inform the United States about the safety hazard constitute a fraud on the government, relator asserts. In addition, the relator claims, the design defect resulted in the crash of five Black Hawk helicopters between the years of 1982 and 1987.
III. Discussion
The relator brings this qui tam[1] action on behalf of the United States pursuant to *198 provisions of the False Claims Act, 31 U.S.C. §§ 3729 et seq.[2] The False Claims Act was originally enacted in 1863 during the Lincoln Administration, and has been amended twice, in 1943 and 1986. Under all versions of the Act, individuals have been authorized to "bring a civil action for a violation of [the Act] for the person and for the United States Government." 31 U.S.C. § 3730(b)(1).
Briefly, the statute as now amended specifies the following procedure with respect to qui tam actions: The relator must file his complaint in camera where it remains under seal for at least 60 days to allow the government sufficient time to decide whether to enter the action. 31 U.S.C. § 3730(b)(2). If the government decides not to join the action as it did in the instant case the action will proceed in its behalf at the direction of the relator. 31 U.S.C. 3730(c)(3). The government may, however, intervene at a later date upon a showing of "good cause." 31 U.S.C. § 3730(c)(3).
If the government does intervene, it assumes primary responsibility for the prosecution of the case, "and shall not be bound by an act of the person bringing the action." 31 U.S.C. § 3730(c)(1). The relator remains as a party to the action, however, and his participation may be limited only by order of the court. 31 U.S.C. § 3730(c)(2)(C)-(D).
Whether or not the government joins the suit, the qui tam relator is entitled to a portion of the proceeds if the prosecution is successful. If the government participates, the relator will receive no less than 15 percent and no more than 25 percent of the recovery. 31 U.S.C. § 3730(d)(1). If the government does not join in the action, recovery is set at 25 percent to 30 percent. 31 U.S.C. § 3730(d)(2).
The question of the constitutionality of the qui tam provisions of the False Claims Act has been the subject of a number of recent cases in the federal courts, and of great interest to the defense contracting industry, the government, and the public. Several amicus curiae briefs were submitted to the court on the issue, and counsel representing the United States Senate and the House of Representatives presented oral argument to the court on the return date for these motions. Before reaching the question of the statute's constitutionality, however, the motions based on other grounds will be considered, since the court should not decide federal constitutional questions where a dispositive non-constitutional ground is available. Hagans v. Lavine, 415 U.S. 528, 547, 94 S.Ct. 1372, 1384, 39 L.Ed.2d 577 (1974); United States v. Leon, 766 F.2d 77, 78 (2d Cir.1985) ("a court should not reach constitutional issues when there are other, nonconstitutional grounds upon which it can resolve the case"). Of those, the jurisdictional issues plaintiff's standing and the applicability of the statute of limitations will be addressed first.
A. STANDING
The defendant contends that the relator does not have standing to bring this suit, since it has not suffered "some actual or threatened injury as a result of the putatively illegal conduct of the defendant." Gladstone Realtors v. Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 1608, 60 L.Ed.2d 66 (1979). Defendant also argues *199 that Congress cannot eliminate the Constitution's standing requirement by creating a financial incentive for a plaintiff that is not the result of an injury to the plaintiff itself.
Defendant argues that the relator lacks standing because it has no "`personal stake in the outcome of the controversy' ... to ensure ... an adversarial [proceeding] capable of judicial resolution." Sierra Club v. Morton, 405 U.S. 727, 732, 92 S.Ct. 1361, 1364, 31 L.Ed.2d 636 (1972) (quoting Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962)). Of course, Article III of the Constitution limits federal court jurisdiction to the resolution of "cases" or "controversies," and federal courts thus lack the power to render advisory opinions, to resolve political questions, or to entertain friendly suits. See Sierra Club, 405 U.S. at 732 n. 3, 92 S.Ct. at 1365 n. 3.
The standing of a qui tam plaintiff in a False Claims Act action has been upheld in three cases cited to the court by the plaintiff. See United States ex rel. Truong v. Northrop Corp., 728 F.Supp. 615 (C.D.Cal.1989); United States ex rel. Newsham v. Lockheed Missiles and Space Co., 722 F.Supp. 607 (N.D.Cal.1989); United States ex rel. Stillwell v. Hughes Helicopters, Inc., 714 F.Supp. 1084 (C.D.Cal. 1989). As the court notes in Stillwell, Congress may create a legal interest and confer standing to assert that right. Stillwell, 714 F.Supp. at 1096 (citing Trafficante v. Metropolitan Life Insurance Co., 409 U.S. 205, 208-09, 93 S.Ct. 364, 366-67, 34 L.Ed.2d 415 (1972)). If Congress does create statutory standing, the normal requirements of standing particularly the requirement that the plaintiff's injury be individualized and particularized are not considered by the reviewing court. Stillwell, 714 F.Supp. at 1096 (citing Havens Realty Corp. v. Coleman, 455 U.S. 363, 372, 102 S.Ct. 1114, 1120, 71 L.Ed.2d 214 (1982)). Nevertheless, "Congress may not confer standing on a plaintiff who cannot show the constitutional minimum of injury-in-fact." Stillwell, 714 F.Supp. at 1096 (citing Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 488 n. 24, 102 S.Ct. 752, 766 n. 24, 70 L.Ed.2d 700 (1982)).
With respect to the injury-in-fact requirement, the courts in Truong, Newsham and Stillwell note that the various qui tam statutes passed by Congress have survived constitutional challenges based on purported lack of standing. In addition, "[t]here is no constitutional prohibition to the relator's suing, under a statutory grant of standing, on the injury to the United States." Stillwell, 714 F.Supp. at 1098. See also Kingsley Books, Inc. v. Brown, 354 U.S. 436, 441, 77 S.Ct. 1325, 1327, 1 L.Ed.2d 1469 (1957); United States ex rel. Marcus v. Hess, 317 U.S. 537, 541, 63 S.Ct. 379, 383, 87 L.Ed. 443 (1943); see also 13A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3531.13 at 76 (1984) ("if Congress wishes, indeed, it can enact a qui tam statute to enable a private party to invoke the standing of the government to collect a civil penalty"). The court in Truong found that, "[w]here there is evidence of palpable injury to the entity on whose behalf and in whose name the suit is brought, it is superfluous to require that the relator be individually aggrieved." Truong, 728 F.Supp. at 619. The Truong, Newsham and Stillwell courts thus held that Congress properly conferred standing on qui tam relators under the False Claims Act. Truong, 728 F.Supp. at 618-19; Newsham, 722 F.Supp. at 614-15; Stillwell, 714 F.Supp. at 1098-99. The court finds the reasoning in these cases persuasive.
Some injury-in-fact to the government must be present, however. See Truong, 728 F.Supp. at 618; Stillwell, 714 F.Supp. at 1098. Here, the relator alleges that the government has been damaged by defendant's fraud in concealing its unilateral design change in the blade fold system. The government has paid for hundreds of helicopters with this concealed design flaw, plaintiffs aver. This is sufficient to confer standing on the relator. The court in Stillwell also recognized other possible bases for a relator's standing. First, the "statutory bounty" available under the False *200 Claims Act creates a personal stake in the outcome on behalf of the relator, and makes him or her a real party in interest pursuant to Fed.R.Civ.P. 17. Id. at 1098-99. Second, since the relator often has access to the information forming the basis of his claim only through his employment relationship, he or she faces the prospect of loss of employment and benefits if the fraud is disclosed. Id. at 1099. Finally, to the extent the relator is a knowing participant in the fraud and fails to act on it, he or she may be liable in a False Claims Act prosecution. Id. Although the second and third reasons are not applicable to the relator here, since it was not an employee of the defendant, the statutory bounty creates an additional basis for relator's standing.
B. STATUTE OF LIMITATIONS
Defendant moves for summary judgment on the ground that the statute of limitations has run on relator's claim. The applicable limitations period for a false claims action is six years from the date of the violation of the False Claims Act, or three years from the date that the government knew or should have known of the violation. The Act provides:
A civil action under section 3730 may not be brought
(1) more than 6 years after the date on which the violation of section 3729 is committed, or
(2) more than 3 years after the date when facts material to the right of action are known or reasonably known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.
31 U.S.C. § 3731(b) (1986).
The six-year limitations period begins to run "on the date the claim is made or, if the claim is paid, on the date of the payment." Blusal Meats, Inc. v. United States, 638 F.Supp. 824, 829 (S.D.N.Y.1986), aff'd, 817 F.2d 1007 (2d Cir. 1987). As the statute states, the three-year limitations period begins to run from the date "when facts material to the right of action are known or reasonably should have been known" by the government official responsible for such information.
UTC maintains that the relator's fraud claims can, at most, extend to the first 115 Black Hawk helicopters delivered by UTC, since those were the only aircraft delivered with the faulty Fafnir bearing design. UTC contends it ceased using the Fafnir bearing in 1980, and that in 1979 the Army was aware of this design problem and informed its personnel that they must disconnect the pitch control rods before folding the rotor blades. Thus, since 1979, UTC argues, the Army knew of the facts material to relator's claim, and there was no hidden defect. Consequently, the defendant contends, since the government was aware of the alleged defect in 1979, it has no claim under the False Claims Act, since an essential element is that the claim be false or fraudulent. See Boisjoly v. Morton Thiokol, Inc., 706 F.Supp. 795, 808 (D.Utah 1988).
The relator apparently concedes in its responding memorandum that claims based on the first 115 helicopters are barred by the six-year statute of limitations, since the last payments on those aircraft were made in March 1981, and the complaint was filed December 30, 1987.
The relator maintains, however, that the six-year limitations period commenced upon payment for each helicopter delivered to the United States, since the fraud by defendant concealing its unilateral abandonment of the blade fold pin design continued unknown to the government until the commencement of this suit. Relator asserts that the government has continued to purchase Black Hawk helicopters even after the filing of the complaint in this action. Relator also seeks to toll the statute of limitations, asserting that the official with responsibility to act here did not have knowledge of the fraud. The relator contends that the defendant has failed to sustain its initial burden of showing the absence of material issues of fact as to which government official was responsible for the information in this case, when the government *201 had knowledge of the facts constituting the alleged fraud, the nature of the fraudulent claim, and the date the defendant presented claims for payment with knowledge or reckless disregard of the facts constituting fraud. See Celotex v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Relator also claims that it has not had, or was prevented from conducting, adequate discovery in the case so as to develop these factual issues. The granting of a motion for summary judgment assumes that the parties have had ample opportunity for discovery. Anderson v. Liberty Lobby, 477 U.S. 242, 250 n. 5, 106 S.Ct. 2505, 2511 n. 5, 91 L.Ed.2d 202 (1986). However, the nonmoving party need not be given the opportunity to complete discovery if it already has had adequate opportunity for discovery and has not taken advantage of it. Trebor Sportswear Co. v. The Limited Stores, Inc., 865 F.2d 506 (2d Cir.1989).
In Boisjoly v. Morton Thiokol, Inc., 706 F.Supp. 795 (D.Utah 1988), the court considered, among other causes of action, a qui tam claim under the False Claims Act brought by an employee of Morton Thiokol, Inc. ("Morton Thiokol"), the manufacturer of the seal blamed for the 1986 Space Shuttle Challenger explosion. The relator alleged that defects in the seals that could result in accidents were known to Morton Thiokol and to the government, and that during the period Morton Thiokol sold the seals to the National Aeronautics and Space Administration ("NASA"), Morton Thiokol "made false claims for payments knowing that the [seals] did not meet contract specifications." Id. at 809.
The court found that the allegations in relator's complaint that the government knew of the defects in the seals negated his False Claims Act claim. The court observed that other courts have disallowed False Claims Act claims where the government knew, or was in possession at the time of the claim, of the facts that make the claim false. Id. (citing United States v. Fox Lake State Bank, 366 F.2d 962, 965 (7th Cir.1966); Woodbury v. United States, 232 F.Supp. 49, 54-55 (D.Or.1964); United States v. Schmidt, 204 F.Supp. 540 (D.Wis. 1962)). The court stated that "[o]nly if the government gets something less than or different from that which it expected can it be said to have suffered the kind of injury necessary to invoke FCA liability." Id. The court held that the relator failed to state a claim under the False Claims Act because it alleged that "the government knew of those very facts or characteristics which allegedly make the claim false...." Id. at 810. Further, the court rejected the relator's claim that Morton Thiokol's request for an incentive award under its contract terms with NASA was fraudulent because of Morton Thiokol's "failure to adhere to contract requirements." Id. at 811. This claim was likewise negated by allegations that the government knew of the alleged defect. Id.
The defendant submits a number of affidavits in support of its contention that the Army had knowledge of the defect on which relator's claim was based. Harold G. Heiney, who was design manager in charge of flight controls on the Black Hawk helicopter during the development stage from 1974 to 1981, refers to a number of Army documents attached to his affidavit which indicate that the Army was aware, in 1979, that if pitch control rods were not disconnected, limiter bearings could be damaged. Affidavit of Harold G. Heiney, 10/11/89 ("Heiney Affidavit"), ¶ 2-3; Exhibits 1-2. The Army revised the technical manual provisions for the blade folding operations on the Black Hawk as of May 9, 1980, requiring disconnection of the pitch control rods. Heiney Affidavit, ¶ 4; Exhibit 3. On November 6, 1979, defendant initiated an "Engineering Change Notice" with the Army to change the Fafnir limiter bearing to a solid roller, since the Fafnir bearing could develop cracks. The Engineering Change Notice was signed by the Naval Plant Representative Office ("NAVPRO") representative at defendant's manufacturing plant. Heiney states the signature of the NAVPRO representative is the government's approval for the Engineering Change Notice. Heiney Affidavit, ¶ 5-6; Exhibits 4-5.
*202 William E. Gallagher, project manager of special projects at Sikorsky Aircraft, the division of UTC which developed and manufactured the Black Hawk, was involved in the development and testing of the blade folding equipment on the Black Hawk. Gallagher states that blade fold pins, which the relator contends were the element in the rotor design unilaterally eliminated by the defendant, were not used in the prototype Black Hawk tested and evaluated by the Army in 1976. Affidavit of William E. Gallagher, 10/3/89 ("Gallagher Affidavit"), ¶ 6. Nor were blade fold pins referred to or employed in the technical manual for the prototype helicopter submitted to the Army; in the production contract for the Black Hawk; or the equipment in the Air Transportability Kit provided by defendant to the Army as part of the contract. Gallagher Affidavit, ¶ 7-10. The technical manual which details the procedures for blade folding on the production helicopter did not prescribe or mention blade fold pins. Gallagher Affidavit, ¶ 13; Exhibit 6. A pin originally used as a blade fold pin in early prototype models of the Black Hawk was, after 1975, used only as a "rigging pin" for the rigging of controls, and was unrelated to blade folding. Gallagher Affidavit, ¶ 12; Exhibit 5.
The Army conducted tests on the Black Hawk at Fort Campbell, Kentucky on July 11 and July 25, 1979, and addressed, among other questions:
Can the Black Hawk aircraft be loaded on a C-141/C-5A aircraft in specified quantities and times according to technical manual (TM XX-XXXX-XXX-XX-X) with organic tools?
The Army's report on these tests, according to Gallagher, shows that the Army had knowledge of the equipment and procedures used in blade folding, and it did not involve the use of blade fold pins. Gallagher Affidavit, ¶ 14; Exhibit 7. Between November 12-18, 1979, the Army conducted a transport exercise, which was attended by United Technologies representatives. During this exercise, the Army and UTC learned that the Fafnir limiter bearing could crack if pitch control rods were not disconnected during the blade folding procedure. Gallagher Affidavit, ¶ 15-16.
Robert E. Hall was chief of the Airframe Branch of the Technical Management Division of the U.S. Army Black Hawk Project Manager's Office from 1975 to 1981. The Project Manager's Office, an arm of the Army Aviation Systems Command ("AVSCOM"), was responsible for supervision of the "technical configuration" of the Black Hawk helicopter in all respects except the engine. Affidavit of Robert E. Hall, 5/24/90 ("Hall Affidavit"), ¶ 1. Hall states that he was the highest level official at the Project Manager's Office directly involved with management and supervision of Black Hawk air transportability issues, "including such issues as the compliance of blade fold procedures with Army requirements and all components and equipment used, or proposed by Sikorsky to be used, in blade fold." Hall Affidavit, ¶ 1.
Hall states he was aware, in his capacity as chief of the Airframe Branch, and the most senior official in the Project Manager's Office, that:
during the Black Hawk prototype phase ... Sikorsky was considering use of a blade fold pin, in the Black Hawk prototype helicopter, to block blade fold loads out of the mixer assembly. I was also aware during the Black Hawk prototype phase of the operational difficulties inherent in the blade fold pin procedure, specifically that it was difficult to align certain components so that the holes into which the blade fold pins would fit would line up properly....
Sikorsky eventually abandoned the blade fold pin concept. Although I do not remember the precise date when that occurred, I was specifically aware, in my capacity as Chief of the Airframe Branch, of Sikorsky's discarding of the blade fold pin concept, and Sikorsky's reason for doing so, by December 1979 at the latest. Sikorsky did not "secretly" abandon the blade fold pin concept; the U.S. Army Project Manager's Office understood by December 1979 at the latest (1) that the blade fold pin concept was problematic, (2) that it had been discarded by Sikorsky, and (3) the reason *203 it had been discarded by Sikorsky (namely, the alignment difficulty).
Hall Affidavit, ¶ 2-3 (emphasis added).
Charles Musgrave was chief of the AVSCOM Technical Management Division in the Project Manager's Office from 1969 to 1985. According to Musgrave, AVSCOM is responsible for development, source selection, airworthiness qualification, and acceptance of aircraft procured by the Army, including the Black Hawk. The Black Hawk Project Manager's Office has had the responsibility for insuring that the Black Hawk was acceptable to the Army and acting upon information relating to defects in or the safety of the aircraft. Affidavit of Charles Musgrave, 5/24/90 ("Musgrave Affidavit"), ¶ 1. In 1975, during the prototype phase of development of the Black Hawk, Sikorsky decided to raise the rotor head on the helicopter to diminish vibration to the "airframe." This design change made the Black Hawk too tall to fit into the C-141 and C-130 transport aircraft, so the rotor head had to be lowered for transport. The pitch control rods had to be disconnected to lower the rotor head. Musgrave Affidavit, ¶ 2. In December 1979, Musgrave was informed that a problem was discovered when loading the helicopter into the C-5 transport aircraft, which was large enough that the rotor head did not have to be lowered. If the rotor blades were folded without disconnecting the pitch control rods, there was a possibility of damage to the bearing in the mixer assembly. Correspondence identifying the problem was circulated by the Commander of Army Aviation Research and Development Command to all field units using the Black Hawk on December 7, 1979. Musgrave Affidavit, ¶ 4; Exhibit 1.[3]
The relator's claim is based on its contention that defendant, "unilaterally and without government approval, removed an approved design feature on the first production Blackhawk aircraft for its own convenience and then repeated that change on each subsequent aircraft. The change involved the abandonment of the use of circular blade fold pins for blade fold loads because the receptacle holes into which these pins were supposed to be inserted would not line up correctly. Yet Sikorsky falsely claimed and received payment for allegedly fully complying helicopters." Affidavit of Francis G. Fleming, 3/26/90 ("Fleming Affidavit"), ¶ 2. The relator refers the court to a number of documents and deposition testimony it contends contradict some of defendant's contentions, and demonstrate that factual questions exist as to the government's knowledge of the alleged defect.
Relator cites deposition testimony by Heiney; Rudolph Huber, a UTC production manager; Luther Folks, a UTC engineer; and George Karas, a UTC employee, which appear to contradict the assertions by Gallagher that the design, prototype model and initial production model Black Hawk's did not use a blade fold pin. Affidavit of Milton G. Sincoff, 5/17/90 ("Sincoff Affidavit"), ¶ 3-11; Exhibits 5-8. Relator also submits the deposition of Ralph Lightfoot, a former chief engineer for Sikorsky, who states that the original Black Hawk design was to incorporate blade folding without disconnection of any part of the flight control system through the insertion of pins into the control system during blade folding. Affidavit of Ralph Butterworth Lightfoot, 12/15/86 ("Lightfoot Affidavit"), ¶ 13. However, Sikorsky discovered when the first Black Hawk came off the assembly line that the holes designed to accommodate these pins did not line up. Sikorsky then unilaterally abandoned the design concept, rather than attempt to resolve the problem. Lightfoot Affidavit, ¶ 14.
Relator also asserts that defendant did not adequately inform the government of the need for a design change. In fact, the relator claims, the defendant intentionally circumvented the proper Army channels by *204 categorizing its change in the limiter bearings as a "Class II" rather than a "Class I" design change. Sincoff Affidavit, ¶ 15. According to the relator, the defendant was required by Army regulation DOD-STD-480A to notify the government when it discovered the defect in the blade fold pin system of the need for a design change. Sincoff Affidavit, ¶ 15; Exhibit 10. These notifications are to be classified as Class I, which relate to changes which affect function or safety, or Class II, which are less significant engineering changes. See generally Sincoff Affidavit, ¶ 15-26. The defendant submitted a Class II Engineering Change Notice in November 1979 notifying the Army of the change from the Fafnir bearing to a roller bearing. By doing so, the relator maintains, the defendant intentionally caused the change to be routed to lower level Army officials instead of higher officials who should be notified of major design changes. Sincoff Affidavit, ¶ 29-34. This allowed defendant to continue to deliver Black Hawks to the Army without revealing the blade fold pin defect, which would have been costly for defendant to redesign and correct. Sincoff Affidavit, ¶ 38-39.
The submissions on record demonstrate that the original plans for the Black Hawk were to incorporate a blade fold pin, and the Army was aware of this. See, e.g., Plaintiff's Exhibits in Opposition to Defendant's Motion Regarding the Statute of Limitations, Exhibit 4 (Sikorsky's response to Army request for clarification of inspection requirements for folding blades includes reference pins). It is unclear from the documents whether the prototype model Black Hawk or the production model Black Hawk originally used blade fold pins. However, by 1979, the Army Black Hawk Project Manager's Office, responsible for the supervision and management of the entire Black Hawk program, including insuring that the Black Hawk was acceptable to the Army and acting upon information relating to defects, was aware: (1) that during the prototype phase Sikorsky was considering use of blade fold pins; (2) that Sikorsky's original design incorporating blade fold pins was problematic because the blade fold pins would not fit into the production helicopter; and (3) that Sikorsky abandoned the blade fold pin concept. The Army had all of this knowledge by December 1979. See Hall Affidavit, ¶ 2-3. The Army became aware in 1979 that if the rotor blades were folded without disconnecting the pitch control rods, that the Fafnir limiter bearing could break, and informed all field units using the Black Hawk of this problem. See Musgrave Affidavit, ¶ 4.
The intentional concealment from the Army of the abandonment of the blade fold pin concept is the basis of relator's claim. However, it is clear from the record that the senior Army officials responsible for the Black Hawk program were aware of this problem in 1979. Even if the Hall and Musgrave affidavits are controverted, which they are not by the relator's submissions, relator itself contends that blade fold pins were part of the original Black Hawk design, that blade fold pins were referred to in documents submitted to the Army, and that defendant was required under its contract with the Army to supply Black Hawks with the blade fold pin design. However, none of the helicopters delivered to the Army had blade fold pins, a fact that was obvious to Army officials in 1979. There is no question of fact regarding the Black Hawk Project Manager's Office's knowledge of the alleged defect. Accordingly, the relator has no claim under the False Claims Act, since the government "knew of those very facts or characteristics" which allegedly made defendant's claims false. Boisjoly, 706 F.Supp. at 810.
With respect to relator's tolling argument under section 3731(b)(2), relator contends that "the official of the United States charged with responsibility to act in the circumstances" is the contracting officer who would have received the Class I engineering change notice that should have been submitted by the defendant. Since defendant did not submit the notice, the official charged with responsibility to act in the circumstances was not aware of defendant's abandonment of the blade fold pin design, it can be presumed from relator's *205 argument, until relator commenced this action. The statute of limitations would thus be tolled until that time.
There is no caselaw interpreting this phrase in the statute. However, courts interpreting the analogous tolling provision at 28 U.S.C. § 2416(c)[4] have indicated that once officials who could take action recognize the essential elements of the cause of action, the statute is not tolled. See United States v. Boeing Co., Inc., 845 F.2d 476, 481-82 (4th Cir.1988); United States v. Kass, 740 F.2d 1493, 1497-98 (11th Cir. 1984). The court in Boeing rejected the argument that only one Department of Defense contracting officer had responsibility to act on claims for severance pay when several other employees and managers "recognized that a problem existed." Boeing, 845 F.2d at 482.
The court here rejects relator's argument that the contracting officer is the only official charged with responsibility to act in the circumstances. The facts material to relator's cause of action were known in 1979 by the senior officials in charge of the Black Hawk project. Thus, those facts were known, or reasonably should have been known, by officials with the responsibility to act. Presuming, for the sake of argument, that false claims were made to the government, since the argument has been rejected by the court, the statute of limitations began to run in 1979, when payments were made for the first Black Hawks with the allegedly concealed defect. The court is not persuaded by relator's "continuing fraud" theory, i.e., that a fraudulent claim was made with the delivery of each helicopter, since the alleged defect in each helicopter was known to the government in 1979.
With respect to relator's contention that more discovery is needed to demonstrate a lack of knowledge by the government, the relator has been able to submit numerous documents and exhibits to the court on this issue. Further discovery, in the court's opinion, will not enable the relator to controvert the government's knowledge that is clearly established by the existing record.
The defendant's motion for summary judgment on statute of limitations grounds is granted. It is thus unnecessary for the court to consider the remainder of defendant's motions.
Conclusion
Defendant's motion for summary judgment dismissing the complaint on statute of limitations grounds is granted.
IT IS SO ORDERED.
NOTES
[1] The connotation "qui tam" is derived from the Latin phrase "qui tam pro domino rege quam pro se ipso in hac parte sequitur," which means "who brings the action for the king as well as for himself."
[2] Section 3729 provides, in pertinent part, that:
[a]ny person who ... (1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim or payment for approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;
(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid ...
is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus three times the amount of damages which the Government sustains because of the act of that person....
31 U.S.C. § 3729(a).
[3] The relator challenges the use by the defendant of the Hall and Musgrave affidavits, contending that they were improperly obtained since neither individual had permission from the government to testify. The court is persuaded, however, by the arguments submitted by defendant in its memorandum on this issue that the affidavits were properly obtained and may be considered by the court.
[4] Section 2416(c) provides that, for the purpose of computing limitations periods in actions by the United States, the statute of limitations shall be tolled during the time in which:
facts material to the right of action are not known and reasonably could not be known by an official of the United States charged with the responsibility to act in the circumstances. ...
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419 Pa. 435 (1965)
C.I.T. Corporation
v.
Jonnet, Appellant.
Supreme Court of Pennsylvania.
Argued October 4, 1965.
November 23, 1965.
*436 Before BELL, C.J., MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.
Samuel M. Rosenzweig, with him Aaron Rosenzweig, for appellants.
Joseph A. Katarincic, with him Henry W. Fulton, Jr., Harry Woodruff Turner, and Kirkpatrick, Pomeroy, Lockhart & Johnson, for appellee.
OPINION BY MR. JUSTICE MUSMANNO, November 23, 1965:
On January 30, 1961, the Commercial Appliance Company in Pittsburgh, sold to the Miracle Lanes, Inc., under a written conditional sales contract, a quantity of restaurant and bar equipment for the total sum of $33,655. On the same day, Elmer J. Jonnet, Jr., in his individual capacity, guaranteed in writing, as surety, Miracle Lanes' obligations under the contract. The Commercial Appliance Company assigned *437 its rights against Miracle Lanes and Jonnet to the C.I.T. Corporation, which had financed the transaction.
Through installment payments, Miracle Lanes had, by May 29, 1964, paid $19,322.85, leaving an unpaid balance of $12,197.13. The C.I.T. Corporation brought an action of assumpsit for this sum against Miracle Lanes and Jonnet. The defendants filed an answer averring that, beginning with June, 1964 payments "Were to have been made by Penn Hills Center, Inc. assignee of lease for cocktail lounge in which equipment described in these proceedings is located. To defendants' best knowledge and information and belief by the assumption thereof, arrangements were made whereby defendants herein were released from further liability on the documents herein described."
Apparently aware that such a nebulous defense would quickly melt into a judgment for the plaintiff, the defendants filed an amended answer where the nebulosity of the original answer drifted into a rhetorical cloud of different shape but of no greater tangibility. It said: "Defendants further allege and aver that in June of 1964 when Penn Hills Center, Inc., became assignee of the Lease for the Cocktail Lounge Plaintiff through its authorized agent and representative was apprised thereof and consented thereto and payments were made on account of the security agreement by the assignee to the Plaintiff. Defendants also allege and aver that Plaintiff's authorized agent and representative did release the Defendants from further liability therein."
In short order, the court below, upon appropriate motion by the plaintiff, granted judgment on the pleadings in favor of the plaintiff, plus $1,000 for attorneys' fees, stipulated in the conditional sales contract.
The defendants appealed, contending that their averments "were sufficient to bring into issue the question *438 of the existence of a subsequent parol agreement between the parties to modify the original written contract by way of a substitution of a party and the release of the original debtor." Nowhere, however, do the defendants allege cancellation by the plaintiff of the express term of the original conditional sale contract that "no waiver or change in this contract or related note, shall bind such assignee (in this case, the plaintiff) unless in writing signed by one of its officers."
This specific condition stands as a stone wall in the path of the defendants' contention. However, they believe they have found a way around this formidable barrier by citing the case of Kirk v. Brentwood M.H., Inc., 191 Pa. Superior Ct. 488, 492 where the Superior Court said that "Even where the written contract prohibits a non-written modification, it may be modified by subsequent oral agreement." This is true but there must first be a waiver of the requirement which has been spelled out in the contract. Otherwise, written documents would have no more permanence than writings penned in disappearing ink. If this, the defendants' argument, were to prevail, contractual obligations would become phantoms, solemn obligations would run like pressed quicksilver, and the whole edifice of business would rest on sand dunes supporting pillars of rubber and floors of turf. Chaos would envelop the commercial world.
The cited Kirk v. Brentwood case must be read in connection with our case of Wagner v. Graziano Construction Company, 390 Pa. 445, on which it relied. It will be noted that in the Wagner case, we first determined that there was a proper allegation of waiver of the contractual provision before determining the propriety of the alleged oral understanding: "In his complaint Wagner averred: `In directing plaintiff to perform work not within the scope of work to be performed *439 under the written contract, defendant's general superintendent refused to sign written work orders as required by said written contract: he informed plaintiff that written work orders signed by him would not be required and directed him to perform the extra work without the written work orders, informing plaintiff that appropriate adjustments would be agreed upon at a later date.'
"For the purposes of the demurrer, this allegation, together with those averring the superintendent's authority, must be accepted as established fact. Thus, if we assume that the defendant's authorized agent informed Wagner that the requirement for written orders for extra work was being waived, we are then concerned only with a determination of the question as to whether parties to a written contract may alter it by oral understanding."
Thus, in the case at bar, there must be a determination of the existence of a waiver of the contractual written provision that all modifications had to be in writing in order to be binding. The mere statement that the lease had been assigned to another and that the plaintiff's agent was apprised of this and payments had been made by the assignee did not indicate any waiver of the contractual provision in controversy. If such a loose and rambling averment were to be accepted as wiping out a solemn stipulation in a written contract, then such stipulations would last no longer than the vapor writings by airplanes in the sky.
Under the pleadings, the court below could do nothing other than conclude that the defendants' allegations were insufficient to constitute a good defense to the plaintiff's claim for the balance due on the contract and properly entered judgment for the plaintiff.
Affirmed.
Mr. Justice JONES and Mr. Justice COHEN concur in the result.
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17 Cal.Rptr.3d 66 (2004)
121 Cal.App.4th 333
J. Nicholas McINTOSH, Plaintiff and Appellant,
v.
Robert W. MILLS et al., Defendants and Respondents.
No. A101673.
Court of Appeal, First District, Division Two.
August 3, 2004.
*67 Steven J. Brady, Law Offices of Steven J. Brady, San Rafael, Bryce C. Anderson, Clayton, for Appellant.
Coblentz, Patch, Duffy & Bass, Jonathan R. Bass, Howard A. Slavitt, Zuzana Svihra, San Francisco, for Respondents.
RUVOLO, J.
I.
INTRODUCTION
Appellant J. Nicholas McIntosh appeals from a summary judgment entered in favor of respondent Robert W. Mills (Mills).[1] The trial court granted Mills summary judgment after concluding, as a matter of law, that an alleged[2] agreement *68 to share a legal fee (the fee-sharing agreement) entered into between Mills, a member of the State Bar of California, and McIntosh, a nonattorney, was unenforceable.[3] In reviewing the matter de novo, we agree that the fee-sharing agreement was unenforceable under the doctrine of illegality of contract. Further, we conclude that no exception to the general rule of unenforceability applies in that the parties were in pari delicto as a matter of law because (1) McIntosh was represented by counsel, Attorney David Anton, who also negotiated and entered into the fee-sharing agreement on McIntosh's behalf, and (2) McIntosh is equally as blameworthy as Mills.
II.
PROCEDURAL BACKGROUND
In the underlying complaint, McIntosh filed a single cause of action against Mills for breach of contract, alleging that Mills failed and refused to honor an agreement to share attorney fees with McIntosh. No other legal or equitable causes of action were pleaded. The fee-sharing agreement arose out of McIntosh's oral agreement to assist Mills in preparing civil actions against Bank of America in two cases, Carol F. Nickel et al. v. Bank of America National Trust & Savings Association et al. (the Nickel action), and Fisher et al. v. Bank of America National Trust & Savings Association et al. (the Fisher action).[4] In return for his consulting services, McIntosh was to receive 15 percent of all attorney fees Mills earned as a result of the prosecution of either or both actions. The consulting agreement was allegedly entered into in 1994.
The complaint further alleged that the Fisher action was settled in 1999, and Mills received total attorney fees of approximately $7 million. The Nickel action was allegedly settled in 2001, and Mills received total attorney fees of approximately $14.7 million. McIntosh demanded payment under the fee-sharing agreement, but Mills refused to make payment.
Mills filed a motion for summary judgment in October 2002, claiming the fee-sharing agreement was unenforceable as a matter of law because it was illegal. Mills also claimed that McIntosh was barred from seeking relief for the breach of the parties' agreement by the equitable doctrines of unclean hands and judicial estoppel. McIntosh opposed the motion.
On November 27, 2002, the trial court held that Mills was not entitled to summary judgment on the alternative grounds of unclean hands and judicial estoppel.[5]*69 However, the court granted Mills's motion for summary judgment on the ground that the alleged agreement to share attorney fees with McIntosh was illegal, and thus, unenforceable. Judgment was entered on December 16, 2002, and this appeal followed.
III.
DISCUSSION
A. Standard of Review
On appeal from a summary judgment we undertake a de novo review of the proceedings below, and independently examine the record to determine whether triable issues of material fact exist. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767, 107 Cal.Rptr.2d 617, 23 P.3d 1143 (Saelzler); Kids' Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878, 116 Cal.Rptr.2d 158 (Kids' Universe).) We review the trial court's ruling, not its rationale; thus, we are not bound by the trial court's stated reasons for granting summary judgment. (Kids' Universe, supra, 95 Cal.App.4th at p. 878, 116 Cal. Rptr.2d 158.)
The Supreme Court has described our duty as follows: "In ruling on the motion, the court must `consider all of the evidence' and `all' of the `inferences' reasonably drawn therefrom ([Code Civ. Proc.,] § 437c, subd. (c)), and must view such evidence [citations] and such inferences [citations], in the light most favorable to the opposing party." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843, 107 Cal.Rptr.2d 841, 24 P.3d 493.) "All doubts as to whether there are any triable issues of fact are to be resolved in favor of the party opposing summary judgment. [Citation.]" (Ingham v. Luxor Cab Co. (2001) 93 Cal.App.4th 1045, 1049, 113 Cal.Rptr.2d 587.)
"Therefore, if a plaintiff in response to a defendant's summary judgment request demonstrates the existence of a triable dispute with `specific facts' (§ 437c, subd. (o)(2)) by making a prima facie showing of the merit of the complaint, the motion must be denied. There is to be no weighing of evidence. [Citations.]" (Kids' Universe, supra, 95 Cal. App.4th at p. 880, 116 Cal.Rptr.2d 158.) Moreover, equally conflicting evidence requires denial of a summary judgment motion and a trial to resolve the dispute. (Ibid.; see also Lugtu v. California Highway Patrol (2001) 26 Cal.4th 703, 724, 110 Cal.Rptr.2d 528, 28 P.3d 249; Livingston v. Marie Callenders, Inc. (1999) 72 Cal. App.4th 830, 839-840, 85 Cal.Rptr.2d 528.)
B. Summary Judgment Was Properly Granted on the Ground the Subject Agreement to Share Fees Was Illegal and Unenforceable
1. The Facts Adduced on Summary Judgment Concerning the Fee-Sharing Agreement Between McIntosh and Mills[6]
In the late 1980's, McIntosh worked in the Northern California investment group for Security Pacific, which later was merged into Bank of America. The merger became final in 1992, and McIntosh was then terminated for the ostensible reason that he had been recruiting Bank of *70 America accounts (specifically, the "widows and orphans fund") for a new company he was forming. During the years he worked at the bank, McIntosh noticed "several indiscretions" about which he complained.
In early 1994, McIntosh employed Attorney David Anton (Anton) as his agent for the purpose of reaching an agreement with Mills by which McIntosh would provide services assisting Mills in banking-related legal matters Mills either was handling or was going to handle. McIntosh gave Anton "complete power and authority" to negotiate an agreement with Mills relating to McIntosh's work. McIntosh had given Anton "carte blanche" to negotiate with Mills on his behalf because he did not know "how these things worked."
Likewise, Anton told Mills that the financial arrangements were to be negotiated with Anton alone, and that Anton had authority to accept the arrangement without communicating the specifics to McIntosh so that McIntosh, if asked, would be in a position to state he did not know what arrangements existed. This agency relationship between Anton and McIntosh was not in writing.
Mills had first broached the possibility of compensation casually during a meeting at Anton's law office on February 22, 1994. In addition to Mills and Anton, McIntosh and another attorney in The Mills Law Firm were present. Mills mentioned it was apparent that McIntosh had valuable information about what was going on at the bank, and some thought should be given to retaining him.
In his deposition, Anton explained that an agreement to pay McIntosh compensation was reached with Mills as of April 27, 1994, subject to the contingency that Mills's reputation, through references, would reflect that he was the type of person with whom McIntosh should work.[7] At the April 27th meeting, Mills confirmed that he thought McIntosh could be of invaluable assistance in pursuing litigation against Bank of America; however, Mills was unwilling to consider hourly compensation. Mills opposed an hourly arrangement because he did not want a paper trail of payments from him to McIntosh while the cases were pending, and because Mills wanted the rate structure to be contingent on how well Mills did in the litigation. Anton and Mills then discussed Mills's desire that if only a lodestar[8] fee recovery was achieved, McIntosh would receive only 7 percent of the fee.
Anton claimed that the need to keep the agreement secret was first raised by Mills. Mills also did not want the issue of the agreement discussed with anyone else in The Mills Law Firm. He told Anton that because McIntosh was a potentially important *71 witness, it was best that other lawyers in his firm not know about the arrangement. Mills also did not want either side to keep any writings about the agreement, for fear that counsel for the bank might "[g]et wind of something" and subpoena their records. For this reason, neither attorney made any writings about their discussions.[9]
In 1996, Mills reemphasized it was critical that the arrangement be kept secret because his firm might be removed as counsel if the terms of the agreement with McIntosh came to light. His concern stemmed from his belief that the agreement could be viewed as "inappropriate."
Anton had been a practicing attorney in California since 1980. When asked during his deposition if he was aware that sharing a contingency fee between an attorney and a nonattorney might be illegal, Anton stated that he "was aware that something like that existed, but [he] didn't know what the parameters were." He did not research the ethics of the arrangement, although he was aware there were "rules of professional conduct" governing the conduct of attorneys. He really was not concerned since it was Mills's fee that Mills wanted to share, not Anton's fee. Therefore, if there was any cause for apprehension, it was Mills's concern.
From his discussions with Mills, Anton stated there was a "clear meeting of the minds" as to the terms of the fee-sharing agreement. He felt uncomfortable not being able to tell McIntosh what the terms were, but he had no doubt that an agreement had been reached. What he did tell McIntosh was "cryptic." He told him that "things were set and he was to cooperate fully in any way he could with [Mills's] requests [in the bank cases]. . . ." What he intended to communicate to McIntosh was that an agreement had been reached, that there was no way Anton was going to tell McIntosh the terms, but that McIntosh had to cooperate in order to meet his end of the bargain. Based on his interactions with McIntosh, Anton concluded that McIntosh had an expectation or belief that an arrangement had been made but he did not know the specifics of that arrangement.
Prior to being deposed in any of the bank cases, Anton discussed the areas of expected questioning with McIntosh. He considered possible questions about whether McIntosh had authorized anyone to negotiate any form of compensation with Mills. Anton told McIntosh that if that type of question were asked, McIntosh would have to "fess up."
McIntosh testified in his deposition in this case that he knew an agreement had been reached between Anton and Mills in either 1994 or 1995 but he "was never really told the precise details of the agreement." Anton was asked to handle the arrangements since he was an attorney, and he negotiated as McIntosh's agent or representative. At the time Anton was meeting with Mills in 1994 about the agreement, McIntosh was told that the case could be a big one. In response, he told Anton that he was willing to help Mills on the case "but I want a fair piece." From this discussion with Anton, McIntosh knew his "return would be fair and it would be substantial." He figured from internal discussions that the bank's overcharging could be as much as a $100 million, and attorneys get paid anywhere from *72 25-35 percent out of recovery. Therefore, McIntosh concluded that in light of the potential recovery, he expected to receive a "fair percentage out of it." He knew that the harder he worked on the cases, the more the attorneys would get, and the better off he would be; if they did well, he would do well.
McIntosh also testified in this case that in 1994 he did not expect to assist Mills (other than as compelled through legal process) without an agreement for compensation. It was only after he understood that Anton had reached an agreement with Mills that McIntosh began assisting Mills in the cases. The work McIntosh did for Mills included providing Mills's law firm with open access to his own files; fielding "an infinite number" of questions from members of the firm about documents, bank practices, and employee records; and consulting about how to depose bank employees, including what questions to ask.
McIntosh learned of the specific terms of the fee-sharing agreement when he and Anton discussed Anton's May 25, 1999 letter to Mills requesting payment. However, in the years after 1994, McIntosh sought confirmation periodically from Anton that he still had an agreement in place with Mills.
In January 30, 1998, McIntosh was deposed in the bank case entitled Fluty v. Bank of America, during which the following exchange took place:
"Q: Did you ever ask for any compensation for the time that you spent talking with people from the Mills Firm?
"A: I think they bought me lunch once or maybe twice.
"Q: Did you ever ask for any other compensation?
"A: No."
Several days later, McIntosh was deposed in the Fisher action. In attendance were both Anton and a member of The Mills Law Firm. During that deposition, the following exchange took place:
"Q: Have you been promised any payment in connection with this litigation?
"A: No
". . . . . . . . . . . . . . . . . . . .
"Q: Have you been told that there's any possibility that you'll receive any money whatsoever as a result of this lawsuit?
"A: No. Am I missing something?
"Q: I'm just trying to distinguish between being compensated for your time testifying as opposed to any other money you might receive arising out of this lawsuit.
"A: No."
Anton sat in as counsel when Bank of America deposed McIntosh. He heard McIntosh deny there was any possibility he would receive any money whatsoever as a result of that lawsuit. Anton was feeling "very uncomfortable" during this line of questioning, but he did not know what to do. His discomfort stemmed from the fact that he and Mills had worked hard to make this "weird" arrangement, they knew the day would come when they would be confronted with these precise questions to McIntosh, and "damn, they were getting close." When asked during his deposition if he thought McIntosh testified truthfully in the Fisher action, Anton said, "I don't know what I thought about that." The following exchange then took place:
"Q: You didn't think by answering `no' to that question Mr. McIntosh was perjuring himself?
"A: I didn't think about that at the time that way.
"Q: Why not?
"A: Because he was being asked about his thoughts. I don't know. I knew I felt very uncomfortable because I thought he should have expected it to be a `yes.''
*73 McIntosh filed a supplemental declaration in opposition to the motion for summary judgment below. In it McIntosh stated that at the time of the Fisher deposition he knew only that "some sort of agreement" had been reached between Mills and Anton, but he denied having any "specific information that I was to be compensated at all, much less the manner and extent of that compensation."
In May 1999, McIntosh was informed by Anton that Mills had settled the Fisher action, and that Anton and Mills had discussed compensation for McIntosh. In a letter dated May 25, 1999, requesting payment, Anton "confirm[ed] that the Real Estate Partnership cases against Bank of America were cases in which there was an agreement with your firm and Mr. McIntosh for a fee, call it a referral fee." Anton further stated that the terms of the "referral" were for McIntosh to receive 15 percent of the gross attorney fees recovered, and that Anton understood that Mills had settled the class action. Anton concluded the letter by requesting Mills to call him "so that we may review this situation." Mills rejected the demand. Two years later, McIntosh filed this action for breach of contract.
2. The Doctrine of Illegality Applies to the Agreement Between McIntosh and Mills to Divide the Nickels and Fisher Fees
To analyze McIntosh's assignment of error, we must first determine if the doctrine of illegality applies to the fee-sharing agreement between McIntosh and Mills. This is a question of law that we decide de novo. (Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal. App.3d 832, 838, 247 Cal.Rptr. 340; see also Russell v. Soldinger (1976) 59 Cal. App.3d 633, 642, 131 Cal.Rptr. 145.)
"The illegality of contracts constitutes a vast, confusing and rather mysterious area of the law." (Strong, The Enforceability of Illegal Contracts (1961) 12 Hastings L.J. 347 (Strong).) Nevertheless, enacted as part of the original Field Codes, the contractual doctrine of illegality has been codified in this state since 1872, and appears as Civil Code section 1608: "If any part of a single consideration for one or more objects, or of several considerations for a single object, is unlawful, the entire contract is void." Thus, where the illegal consideration goes to the whole of the promise, the entire contract is illegal. (1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 429, p. 386.)[10]
In turning to the question of whether the fee-sharing agreement in the instant case was illegal, we initially determine whether the agreement's subject matter violates a professional ethics rule enacted to govern the conduct of members of the State Bar. (Chambers v. Kay (2002) 29 Cal.4th 142, 148, 126 Cal.Rptr.2d 536, 56 P.3d 645.) Subject to exceptions manifestly inapplicable here, current rule 1-320(A) *74 of the CPRC[11] admonishes with stark brevity: "Neither a member [of the State Bar] nor a law firm shall directly or indirectly share legal fees with a person who is not a lawyer, . . ." This is not an ethics rule of recent vintage, for the State Bar's general prohibition against sharing fees with nonmembers was adopted by the California Supreme Court as part of former rule 3 on December 1, 1944,[12] and was later reenacted as rule 3-102(A), as part of the 1975 CPRC.[13]
While certain legal commentators have criticized perpetuating the ban on most lawyer/layperson fee-sharing agreements,[14] courts have consistently upheld the prohibition based on a number of legitimate concerns. As summarized by the court in Emmons, Williams, Mires & Leech v. State Bar (1970) 6 Cal.App.3d 565, 86 Cal. Rptr. 367 (Emmons): "Prohibited fee-splitting between lawyer and layman carries with it the danger of competitive solicitation (Crawford v. State Bar [1960] 54 Cal.2d 659, 666 [7 Cal.Rptr. 746, 355 P.2d 490] . . .); poses the possibility of control by the lay person, interested in his own profit rather than the client's fate (Utz v. State Bar [1942] 21 Cal.2d 100, 108 [130 P.2d 377] . . .); facilitates the lay intermediary's tendency to select the most generous, not the most competent, attorney (Linnick v. State Bar [1964] 62 Cal.2d 17, 21 [41 Cal.Rptr. 1, 396 P.2d 33] . . .; Hildebrand v. State Bar [1950] 36 Cal.2d 504, 523 [225 P.2d 508] . . ., separate opinion of Traynor, J.). Rule 3's prohibition against lay intermediaries seeks to bar both solicitation and the presence of a party demanding allegiance the lawyer owes his client. (People v. Merchants Protective Corp. (1922) 189 Cal. 531, 539 [209 P. 363]. . . .)" (Emmons, supra, 6 Cal. App.3d at pp. 573-574, 86 Cal.Rptr. 367.)
Attorney ethics panels, both in and out of state, have been moved to embrace rules against fee sharing with nonattorneys out of concern for interference with the attorneys professional judgment, the creation of conflicts of interest, and the unwholesome spectre of attorneys soliciting professional liaisons with laypersons.[15] (See State Bar Compendium on Prof. Responsibility, Bar Assn. of S.F., Ethics *75 Opns. of the Legal Ethics Com., Formal Op. No. 1976-2, pp. IIB-79-86; ABA/BNA Lawyers' Manual on Prof. Conduct [Lawyers' Manual], ABA Formal Ethics Opn. No. 95-392 (Apr. 24, 1995) [applying Model Rule 5.4]; Lawyers' Manual, State Bar of Montana Ethics Opn. No. 950411 (Apr. 11, 1995) [same].) One authority has also suggested that fee sharing tends to increase the total fees charged to clients, presumably in an effort by the attorney to "make up" that portion being paid to the third party. (Vapnek et al., Cal. Practice Guide: Professional Responsibility (The Rutter Group 2003) ¶ 5:510, p. 5-66.14 (rev.# 1, 2003).)
The potential problems associated with fee sharing are perceived to be particularly acute when viewed in the context of class action litigation where unique, and sometimes intractable, conflicts may already exist. These conflicts appear most commonly as "agency issues" resulting from the fact that the attorney is usually retained by a single or small group of named plaintiffs but who also represents a large class of unnamed individuals. Because of the extent of the potential conflicts arising from the settlement of class action litigation, it has been suggested that courts should take special care to ensure accountability by the attorney to nonpresent class members. (Molot, An Old Judicial Role for a New Litigation Era (2003) 113 Yale L.J. 27, 46-58.)
In light of these public interest concerns, and because there is no dispute here that the agreement at issue between McIntosh and Mills clearly violates CPRC, rule 1-320(A), we conclude that the doctrine of illegality applies facially to their fee-sharing agreement. (Cf., Cain v. Burns (1955) 131 Cal.App.2d 439, 442, 280 P.2d 888 (Cain).)
Even if the agreement is illegal because it violates a rule of professional conduct, McIntosh argues that it is illegal only as to Mills because McIntosh is not a member of the State Bar of California, and thus, not subject to the CPRC governing attorney conduct. We disagree.
First, we note that the doctrine of illegality considers whether the object of the contract is illegal. It does not turn on whether the illegality applies to the party seeking to enforce the agreement. For example, an agreement between a licensed adult and an unlicensed minor by which the minor agrees to drive a delivery vehicle for the adult is illegal and unenforceable by the adult despite the fact the party seeking to enforce the agreement (the adult) is a legal driver. As the above authorities make clear, the doctrine of illegality focuses on the object of the contract because it is grounded on considerations of public policy: "The effect to be given to an illegal element of a contract should not depend upon who alleges and proves it nor upon the manner in which it comes to the attention of the court. Rather, it should depend upon how the court can best serve the interest of the public and, when not inimical to the public interest, do justice to the parties." (Strong, supra, 12 Hastings L.J. at p. 350, fn. omitted.)
Furthermore, McIntosh's contention that he should be allowed to enforce the agreement because he is not bound by the rules of legal ethics is really a variation of his argument that his own conduct is less blameworthy than that of Mills, and, therefore, he should be entitled to enforce the parties' agreement despite its facial illegality. It is to this subsidiary argument that we now turn.
3. No Exception to the Unenforceability of Illegal Fee-Sharing Agreements Exists Because the Parties Were In Pari Delicto As A Matter of Law
Because of the harsh results that might be visited on innocent parties to a contract *76 when their agreement is voided for illegality, courts have fashioned exceptions. One court has observed that the need to void contracts in violation of the law must be tempered by the countervailing public interest in preventing a contracting party from using the doctrine to create an unfair windfall. (Lewis & Queen v. N.M. Ball Sons (1957) 48 Cal.2d 141, 152, 308 P.2d 713.)
Thus, a number of exceptions have been recognized. (Wells v. Comstock (1956) 46 Cal.2d 528, 297 P.2d 961 [contract for sale of stock enforced where illegality affecting the transaction is not relied on by the parties]; Calvert v. Stoner (1948) 33 Cal.2d 97, 199 P.2d 297 [attorney fee provision in retainer agreement enforced where illegal provision prohibiting client from settling is severable]; City Lincoln-Mercury Co. v. Lindsey (1959) 52 Cal.2d 267, 339 P.2d 851 [automobile installment contract enforced where statute establishing illegality contains express sanction for violation]; Strauss v. Bruce (1934) 139 Cal.App. 62, 66, 33 P.2d 71 [usurious interest rate inserted into loan agreement by mistake].)
Perhaps the most common exception to the rule of invalidity, and the one McIntosh argues here, is the in pari delicto exception. At its most fundamental level, the exception allows an illegal contract to be enforced "so long as the party seeking its enforcement is less morally blameworthy than the party against whom the contract is being asserted, and there is no overriding public interest to be served by voiding the agreement." (See Strong, supra, 12 Hastings L.J. at p. 362; 1 Witkin, Summary of Cal. Law, supra, Contracts, § 451, pp. 401-402.) The trial court found, as a matter of law, that McIntosh was not entitled to invoke this doctrine because "there is `serious moral turpitude' on the part of the plaintiff and the defendants are not guilty of the greatest moral fault." (Emphasis in original.)
In arguing that he was not in pari delicto as to the fee-sharing agreement at issue in this case, McIntosh attempts to align the facts with those of several decisions that enforced contracts despite their illegality. The first of these is Cain, supra, 131 Cal.App.2d 439, 280 P.2d 888. There, the plaintiff was a private investigator who had performed services for the defendant/attorney in return for which the attorney agreed to pay the investigator/plaintiff one-third of the net attorney fees recovered. The attorney sought to avoid the contractual obligation to pay, claiming the "fee-splitting" agreement violated former rule 3, the predecessor to CPRC, rule 1-320(A). (Id. at p. 441, 280 P.2d 888.)
The court began by observing that, despite the fact that the "fee-splitting agreement" was against public policy, it would be enforceable if the parties were not in pari delicto. (Cain, supra, 131 Cal.App.2d at pp. 442-443, 280 P.2d 888.) It quoted the general exception from the decision in Norwood v. Judd (1949) 93 Cal.App.2d 276, 209 P.2d 24, language which McIntosh refers to with relish in his brief: "`But the courts should not be so enamored with the Latin phrase `in pari delicto' that they blindly extend the rule to every case where illegality appears somewhere in the transaction. The fundamental purpose of the rule must always be kept in mind, and the realities of the situation must be considered. Where, by applying the rule, the public cannot be protected because the transaction has been completed, where no serious moral turpitude is involved, where the defendant is the one guilty of the greatest moral fault, and where to apply the rule will be to permit the defendant to be unjustly enriched at the expense of the plaintiff, the rule should not be applied.' *77 [Citations.]" (Cain, supra 131 Cal.App.2d at p. 444, 280 P.2d 888, italics omitted.)
In considering the relative culpability of the contracting parties, the court noted that the statute (former rule 3) was directed at only members of the State Bar, and it lacked any direct reach over the conduct of laypersons. (Cain, supra, 131 Cal.App.2d at p. 443, 280 P.2d 888.) Accordingly, the court explained that to allow the attorney to assert his own failure to comply with professional rules as a sword to deny otherwise lawful payment to a nonattorney who had indisputably performed under the contract "would put a premium on the attorney's disregard of the rules made for his guidance and conduct." (Id. at p. 444, 280 P.2d 888.)[16]
The second case is Emmons, supra, 6 Cal.App.3d 565, 86 Cal.Rptr. 367, in which the plaintiff law firm preemptively filed a declaratory relief action seeking a declaration "nullifying" its agreement to pay the San Joaquin County Bar Association a portion of a fee earned on a case referred by the association's lawyer referral service. (Id. at p. 567, 86 Cal.Rptr. 367.) After setting forth the general rule of illegality and the exception for circumstances where the parties are not in pari delicto, the court's analysis led it to conclude that the agreement was enforceable despite the ultra vires objective.
Without question, the defining feature in Emmons was that the fee sharing was with a local bar association's legal referral service, an entity devoted to public service and benefit. After chronicling the growth and acceptance of not-for-profit lawyer referral services both in California and nationally, the court concluded: "In its general features . . . the Lawyer Reference Service of the San Joaquin County Bar Association is a manifestation of a general development within the American legal profession. It conforms to the basic outlines of the Minimum Standards [for State Bar sanctioned lawyer referral services]. . . .
"Whether the Minimum Standards actually work a modification of rules 2 and 3 is a question not affecting entitlement to the money in suit. It is enough that the basic features of the San Joaquin County arrangement do not offend the public policy underlying these canons. There are wide differences in motivation, technique and social impact between the lawyer reference service of the bar association and the discreditable fee-splitting featured in the disciplinary decisions. . . ." (Emmons, supra, 6 Cal.App.3d at p. 573, 86 Cal.Rptr. 367.)
After recounting the public interest objectives that would generally be furthered by prohibiting lawyer/layperson fee-sharing agreements (quoted ante at p. 77), the court stated: "None of these dangers or disadvantages characterizes the San Joaquin County Bar Association's lawyer reference activity. The bar association seeks not individual profit but the fulfillment of public and professional objectives. It has a legitimate, nonprofit interest in making legal services more readily available to the public. When conducted within the framework conceived for such facilities, its reference service presents no risks of collision with the objectives of the canons on fee-splitting *78 and lay interposition." (Emmons, supra, 6 Cal.App.3d at p. 574, 86 Cal.Rptr. 367.)
To a large extent Emmons is limited to its unique facts, and is not helpful to a proper resolution of the dispute in this case. If any general principle is to be distilled from the opinion, it is that the doctrine of illegality will not bar enforcement of a contract where the public interests promoting the statute are not advanced by rendering the agreement unenforceable. Indeed, there appears to be little in Emmons that is pertinent to the in pari delicto exception specifically.
Neither is Cain controlling here. To be sure, Cain is properly read as holding that a determination of whether the parties are in pari delicto involves an analysis of the relative culpability of each. (Cain, supra, 131 Cal.App.2d at p. 443, 280 P.2d 888.) However, in considering the facts of this case, we agree with the trial court that, as a matter of law, the parties were in pari delicto.
First, unlike either Cain or Emmons, the agreement was entered into between two members of the State Bar. Anton not only provided legal representation for McIntosh, but also actually entered into the agreement on his behalf as McIntosh's agent.[17] Anton, of course, was directly bound by the CPRC, including rule 1-320(A). Anton's deposition testimony that his concern over the arrangement was ameliorated by his belief that it was only a concern for Mills, whose fee was being shared, was patently incorrect. At least as to the CPRC, Anton had cause for equal concern because the rules specifically prohibited his assistance in Mills' violation of the fee-sharing rule (rule 1-120).[18] Certainly, as an agent, Anton was not obligated to negotiate an illegal agreement for McIntosh. (See generally Rest.2d Agency, § 411.)
As importantly, the extent of Anton's knowledge as to the illegal nature of the fee-sharing agreement is imputed to McIntosh by law. "As against a principal, both principal and agent are deemed to have notice of whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other." (Civ.Code, § 2332.) This doctrine of imputed knowledge was discussed by the court in Columbia Pictures Corp. v. DeToth (1948) 87 Cal.App.2d 620, 197 P.2d 580, in which the court explained: "The fact that the knowledge acquired by the agent was not actually communicated to the principal, as contended by appellant, does not prevent operation of the rule. The knowledge is, in law, imputed to the principal. The agent may have been guilty of a breach of duty to his principal, yet the knowledge has the same effect as to third persons as though his duty had been faithfully performed. The agent acting within the scope of his authority, is, as to the matters existing therein during the course of the agency, the principal himself. [Citations.]" (Id. at p. 630, 197 P.2d 580.)
Thus, unlike Cain, in which the nonlawyer private investigator was presumably unaware of the illegal nature of the fee-sharing agreement, here another member of the State Bar actually entered into the *79 contract with Mills on McIntosh's behalf. Furthermore and separate from that fact, Anton's awareness of the illegality of the agreement is directly imputed to McIntosh. Under these facts, the parties are indeed in pari delicto, and McIntosh is barred from enforcing his agreement with Mills.[19]
Furthermore, unlike Emmons, where the bar association's legal referral program the party seeking to enforce the illegal agreement was wholly without moral blame, McIntosh's own conduct renders him as legally blameworthy as Mills in the pursuit of the contract's objective. Much of McIntosh's briefing on appeal is spent trying to minimize the meaning and effect of his deposition testimony in the underlying litigation against Bank of America. His argument ebbs and flows from first, contending that his testimony under oath was not really disingenuous, or at worst, perjurious, to later arguing the record at least raises a triable issue of fact as to his degree of culpability sufficient to defeat Mills's motion.
If true, the entire affair surrounding the alleged sharing of Mills's attorney fee, based on the testimony of at least McIntosh and Anton, is nothing less than an appalling abuse of this state's civil justice system by all three principals: Mills, Anton, and McIntosh. The summary judgment record reveals that the parties jointly planned a scheme by which McIntosh would illegally share in the potential financial benefits of class action litigation. Special efforts were taken by all to shield McIntosh, not from the fact that he would be compensated for his work in assisting Mills prepare the litigation, but only from the precise details of the fee-sharing arrangement. The purpose of the parties' machinations was a deliberate effort to keep the existence of the fee-sharing agreement, and the details of the deal, from Bank of America and its counsel, and even from Mills's own law partners. Keeping the agreement secret would hopefully avoid the potential impeachment of McIntosh by cloaking his testimony in the class litigation with a false sense of impartiality, and also in preventing the "inappropriate" nature of the agreement from seeing the light of day.
As if this were not enough, McIntosh's dogged determination to stop the existence of the agreement from being revealed to Bank of America apparently led him to lie in his deposition. This is hardly a harsh assessment on our part, particularly given that McIntosh denied unequivocally that he was promised or told he would receive any remuneration as a result of his work on the case for Mills:
"Q: Have you been promised any payment in connection with this litigation?
"A: No.
"[¶] . . . [¶]
"Q: Have you been told that there's any possibility that you'll receive any money whatsoever as a result of this lawsuit?
"A: No. Am I missing something?
"Q: I'm just trying to distinguish between being compensated for your time testifying as opposed to any other money you might receive arising out of this lawsuit.
"A: No."
*80 McIntosh's final lament is that, at worst, there is a triable issue of fact as to his culpability relative to that of Mills sufficient to require denial of the motion for summary judgment, and a jury trial. We disagree. In appropriate cases, the issue of relative wrong very well may be a question of fact. (1 Witkin, Summary of Cal. Law, supra, Contracts, § 455, pp. 406-408.) However, the level and degree of McIntosh's own complicity in his admitted pernicious plot of deception to hide the fact that he was a party to a fee-sharing agreement demands a finding of in pari delicto as a matter of law. Having denied under oath an expectation of receiving compensation from Mills, the law will not countenance McIntosh's reversal of position, and reward his own malfeasance by recognizing a contractual right to compensation now.
IV.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to respondents.
We concur: KLINE, P.J., and HAERLE, J.
NOTES
[1] We refer to respondents throughout this opinion in the singular for clarity's sake, and because the alleged conduct of respondent Mills formed the basis for McIntosh's lawsuit. However, The Mills Law Firm was a defendant below in whose favor summary judgment was also granted, and the firm is a named respondent as well.
[2] Both in the trial court and on appeal, Mills has continued to deny that any agreement to share attorney fees was made with McIntosh. However, for purposes of summary judgment, Mills has assumed the truth of the allegations contained in the first amended complaint and as testified to by McIntosh in his deposition. Likewise, this opinion, which reviews a summary judgment, does, as it must, assume the existence of such a contract.
[3] The process by which an attorney gives a portion of a fee to a nonattorney is referred to in both the California Rules of Professional Conduct (CRPC) and the American Bar Association Model Rules of Professional Conduct (Model Rules) as "fee sharing" (rules 1-320(A) and 5.4(a), respectively). Where a portion of the fee is given to another attorney, both codes use either the verb "divide" (CRPC, rule 2-200) or "division of fee" (Model Rules, rule 1.5(e)). Therefore, we will refer to the promise by Mills to give a portion of his eventual fee in the Bank of America litigation to McIntosh as an agreement to "share fees" or "fee sharing", or the fee-sharing agreement. We will use the terms "fee splitting" or "splitting of fees" only where those phrases are used by other sources or authorities, and then, only when we quote from the text.
[4] Although McIntosh alleged in his complaint that he agreed to provide consulting services in two separate class actions against Bank of America, the parties to this appeal refer to the agreement and his claim in the singular, and we will do likewise, since resolution of the claims involved the same issues.
[5] Because we conclude that the court correctly determined that the agreement was illegal and unenforceable as a matter of law, we need not consider whether the trial court erred in denying Mills's motion on these alternative grounds.
[6] Facts are taken from the record submitted by both sides in connection with Mills's motion for summary judgment. Consistent with the burden on summary judgment, to the extent the evidence may be in conflict, only those facts favorable to McIntosh are discussed.
[7] This contingency was removed in the first half of the following month.
[8] "The use of the lodestar method for calculating attorney fees was established in California in Serrano [Serrano v. Priest (1977) 20 Cal.3d 25 [141 Cal.Rptr. 315, 569 P.2d 1303] (Serrano III)]. As we recently noted, `[i]n so-called fee shifting cases, in which the responsibility to pay attorney fees is statutorily or otherwise transferred from the prevailing plaintiff or class to the defendant, the primary method for establishing the amount of "reasonable" attorney fees is the lodestar method. The lodestar (or touchstone) is produced by multiplying the number of hours reasonably expended by counsel by a reasonable hourly rate. Once the court has fixed the lodestar, it may increase or decrease that amount by applying a positive or negative "multiplier" to take into account a variety of other factors, including the quality of the representation, the novelty and complexity of the issues, the results obtained, and the contingent risk presented.' (Lealao [v. Beneficial California, Inc. (2000)] 82 Cal.App.4th 19, 26 [97 Cal.Rptr.2d 797].)'" (Thayer v. Wells Fargo Bank (2001) 92 Cal.App.4th 819, 833, 112 Cal.Rptr.2d 284.)
[9] Nevertheless, Anton stated in his responses to form interrogatories that in 1996, Mills and Anton corresponded in writing about the terms of the agreement reached in 1994. The record before us includes a letter dated February 13, 1996, from Mills to Anton, but the subject is a division of fees between their respective law firms, not between Mills and McIntosh.
[10] Readers who are schooled in the law may regard this doctrine with nostalgic fondness as they recall being instructed in the "somewhat artificial distinction" between contracts that are malum prohibitum (illegality set by statute), and malum in se (illegality based on base morals). (1 Witkin, Summary of Cal. Law, supra, Contracts, §§ 441 & 447, pp. 396, 399-400; Smith v. Bach (1920) 183 Cal. 259, 262, 191 P. 14.) The principal remaining distinction between the two types of illegal contracts is that malum prohibitum contracts may be enforceable despite their illegality if the parties were not in pari delicto, a legal principle we turn to next, and which is at the heart of McIntosh's claim. There is no question that the agreement at issue in this case is one malum prohibitum, as its illegality derives from violation of statute, and is not grounded in common standards of morality.
[11] This version of CPRC, rule 1-320(A) became effective by order of the Supreme Court as of September 14, 1992.
[12] The pertinent part of former Rule 3 stated: "[N]or, except with a person licensed to practice law, shall he [or she] directly or indirectly share compensation arising out of or incidental to professional employment. . . ." (Rules Prof. Conduct, printed at 26 Cal.2d 32, 34.)
[13] Again, subject to certain enumerated exceptions not material here, that rule stated: "A member of the State Bar or the member's firm shall not directly or indirectly share legal fees except with a person licensed to practice law. . . ."
[14] See Hazard and Hodes, The Law of Lawyering (3d ed. 2001) Part V, § 45.6, p. 45-7; Fischer, Why Can't Lawyers Split Fees? Why Ask Why, Ask When! (1992) 6 Geo. J. Legal Ethics 1.
[15] Defying labels, these concerns can take various forms. For example, the specific concern in one case may be that the attorney not allow the layperson to improperly influence the attorney's handling of the matter out of concern that future referrals from that lay source not be put in jeopardy. In another case, the concern may be that the vigor and diligence with which the layperson will continue to provide support services in the feesharing case will be affected by the amount of the fee the layperson expects. In another case, the layperson's willingness to devote attention to the case may be adversely affected if the attorney's decisions in the case do not comport with the views of the layperson. In yet another case, the concern may be that the attorney's handling of the matter may be adversely affected if the fee-sharing agreement turns out to be disadvantageous to the attorney as the case unfolds.
[16] While certainly the voiding of a fee-sharing agreement may result in the lawyer receiving more of a fee than entitled under the agreement, the court's observation does not address the countervailing factors such as whether the layperson with whom the fees were to be shared is entitled to assert equitable claims, including quantum meruit, against the attorney or the deterrent effect almost certain prosecution by the State Bar will have on attorneys contemplating such arrangements. (Huskinson & Brown v. Wolf (2004), 32 Cal.4th 453, 9 Cal.Rptr.3d 693, 84 P.3d 379.)
[17] While Anton acted as both legal counsel for McIntosh and as his agent, the fact that McIntosh was represented by a member of the State Bar in connection with the transaction is itself sufficient to distinguish this case factually from either Cain or Emmons.
[18] "A member shall not knowingly assist in, solicit, or induce any violation of these rules or the State Bar Act." (CPRC, rule 1-120.)
[19] Yet, McIntosh argues that this rule of imputation does not apply here because the issue of blameworthiness affects his good faith which is premised on the state of his actual knowledge, citing Harte v. United Benefit Life Ins. Co. (1967) 66 Cal.2d 148, 153, 56 Cal.Rptr. 889, 424 P.2d 329. This exception to the exception can hardly be applied here where McIntosh, in conspiracy with two attorneys, deliberately tried to shield himself from his agent's knowledge in an ill-conceived plan to perpetuate an aura of innocence.
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17 Cal.Rptr.3d 481 (2004)
121 Cal.App.4th 793
In re JERRED H., a Person Coming Under the Juvenile Court Law.
Jerred H., Plaintiff and Appellant,
v.
Contra Costa County Children and Family Services Bureau, Defendant and Respondent.
No. A104782.
Court of Appeal, First District, Division Three.
August 16, 2004.
Rehearing Denied September 7, 2004.
Review Denied November 10, 2004.
*482 Marin Williamson, San Francisco, under appointment by the Court of Appeal, for Plaintiff and Appellant.
Silvano B. Marches, County Counsel, and Steven P. Rettig, Deputy County Counsel, for Defendant and Respondent.
POLLAK, J.
Jerred H. appeals from an order of the juvenile court denying his petition to revoke the court's prior order terminating parental rights, and from the denial of his oral motion to declare his stepfather to be his presumed father. The juvenile court summarily denied both requests on the ground that it lacked jurisdiction because the order terminating parental rights was final. Despite our sympathy over Jerred's predicament, with which the juvenile court was equally concerned, we are constrained to agree with its conclusion and therefore must affirm.
Factual and Procedural Background
Jerred, now age 14, was declared a dependent child of the juvenile court on June 15, 2001, when the court sustained a juvenile dependency petition alleging that his mother had a history of substance abuse which impaired her ability to care for him. Jerred was removed from his mother's home and placed with his stepfather, Norman, who was separated from Jerred's mother. Jerred's six half-siblings for whom dependency petitions also had been sustained also were living with Norman, who was being provided family maintenance services through the Contra Costa County Children and Family Services Bureau (the bureau). At the 12-month review hearing on September 27, 2002, the court terminated reunification services for Jerred's mother and set a Welfare and Institutions Code[1] section 366.26 hearing to determine a permanent plan for Jerred.
In the social study report prepared for the section 366.26 hearing, the bureau recommended a permanent plan of long-term foster care. The social worker opined that Jerred was not adoptable and reported that Norman's referral for an adoptive home study was being closed. The social worker reported that "[Norman] is in need of continued support and services from Children and Family Services in order to provide the bare necessities including a clean home with sufficient food and a bed for each of the nine children in his home." Nonetheless, at the section 366.26 hearing, Jerred and Norman requested that parental rights be terminated so that Jerred could be adopted by Norman. The court found that Jerred was adoptable and, on February 11, 2003, ordered termination of parental rights. No appeal was taken from this order.
*483 In a report prepared for the initial adoption review, originally scheduled for August 5 but continued to October 7, 2003, it was reported that Jerred and his siblings had been removed from Norman's home. Norman had not completed the adoptive home study, and his house had been condemned due to hazardous, filthy, and uninhabitable conditions. The bureau subsequently changed its recommendation for Jerred's permanent plan from adoption to long-term foster care. Jerred agreed to the change in plan because he wanted to be considered for adoption only by Norman.
On October 22, 2003, Jerred filed a section 388 petition requesting that parental rights be reinstated. At the November 24 hearing on the petition, Jerred's counsel also requested that Norman be declared Jerred's presumed father. After apologizing to Jerred and assuring him that if there were anything it could do to find him a permanent home it would do so, the court denied both requests on the ground that, despite the equities, it lacked jurisdiction to modify the final termination order. Jerred filed a timely notice of appeal.
Discussion
Section 366.26, subdivision (i), provides, "Any order of the court permanently terminating parental rights under this section shall be conclusive and binding upon the child, upon the parent or parents and upon all other persons who have been served with citation by publication or otherwise as provided in this chapter. After making the order, the court shall have no power to set aside, change, or modify it, but nothing in this section shall be construed to limit the right to appeal the order." Accordingly, a juvenile court lacks jurisdiction to modify or revoke an order terminating parental rights once it has become final. (In re David H. (1995) 33 Cal.App.4th 368, 385, 39 Cal.Rptr.2d 313; In re Ronald V. (1993) 13 Cal.App.4th 1803, 1806-1807, 17 Cal.Rptr.2d 334.) In David H., the court explained, "As a general matter, it would be inimical to the policies underlying the juvenile court law to allow parents to raise a collateral challenge to an order terminating parental rights on the ground that the child's post-termination placement did not meet with the parents' expectations. Such relief is not available, whether the parents expectations were not met because of an uncontrollable turn of fate [citation] or for any other reason...." (David H., at p. 385, 39 Cal.Rptr.2d 313.) In Ronald V., the biological mother of the minor had acquiesced in the termination of her parental rights on the understanding that her son would be adopted by a particular friend. When the friend died before the adoption had occurred she petitioned for a modification of the section 366.26 order, requesting that the permanency plan of adoption be changed to long-term foster care or guardianship and that she be granted de facto parent status. The court held that "[h]aving failed to appeal from the termination order, [the mothers] petition to modify the permanency planning order was in substance a collateral attack on the termination of her parental rights," which the court lacked jurisdiction to consider. (Ronald V., supra, at p. 1806, 17 Cal. Rptr.2d 334.)
Jerred argues that his request to have Norman declared his presumed father is not a collateral attack on the termination order because the order did not terminate Norman's parental rights, but terminated only the rights of Jerred's mother and alleged father.[2] Jerred's position *484 is understandable because the section 366.26 hearing unquestionably focused only on the rights of his mother and alleged father. Norman asserted no parental rights and no consideration was given to terminating any rights he might have; to the contrary, the expectation was that by terminating the parental rights of Jerred's mother and alleged father, Norman would be able to adopt Jerred. At the conclusion of the hearing, the trial court stated only that "[t]he court will terminate parental rights to parents," which conceivably could be understood to apply only to the biological mother and alleged father.
Nonetheless, the section 366.26 order terminating parental rights cannot be interpreted in such a restricted manner. Parental rights are terminated to permit the minor to become free for adoption. (Cal. Rules of Court, rule 1463(g).) Termination may not be ordered unless the court finds by clear and convincing evidence that the minor is likely to be adopted. (366.26, subd. (c)(1).) The termination of all parental rights, including those of an unknown father or of a person who at the time of the hearing is not asserting any parental rights, is necessary to accomplish this objective. "The rights of the mother, any presumed father, any alleged father, and any unknown father or fathers must be terminated in order to free the child for adoption." (Cal. Rules of Court, rule 1463(g).) For this reason, the statute requires that if there is any uncertainty concerning the identity of the parents, notice of the section 366.26 hearing be given to "all persons claiming to be the father or mother of the minor." (Former 366.23, subd. (b)(5); now 294, subd. (f)(8).) Consistent with the statute, notice of Jerred's section 366.26 hearing was given by publication to "father, mother, or all persons claiming to be the father or mother of said child," expressly advising that the court would be considering a permanency plan for Jerred, including possible termination of parental rights. Although not then claiming to be Jerred's presumed father, Norman, represented by counsel, was present at and participated in the section 366.26 hearing. Jerred too, with counsel, was present at the hearing. Although the judge made no verbal reference at the hearing to others who might later claim to have some form of parental rights with respect to Jerred, the written order signed by the judge terminates the parental rights of "the alleged natural father, and of any person claiming to be the father of the child."[3] Accordingly, the order terminating parental rights effectively extinguished Norman's right, and that of any other unknown person, to claim to be Jerred's father, presumed or otherwise. Neither Jerred nor Norman appealed from the order, *485 which had become final when Jerred made his request and therefore was not subject to reconsideration. (In re David H., supra, 33 Cal.App.4th 368, 385, 39 Cal. Rptr.2d 313; In re Ronald V., supra, 13 Cal.App.4th 1803, 1806-1807, 17 Cal.Rptr.2d 334; In re Heather B. (2002) 98 Cal.App.4th 11, 15, 119 Cal.Rptr.2d 59)
In re Elise K. (1982) 33 Cal.3d 138, 139, 187 Cal.Rptr. 483, 654 P.2d 253, is not to the contrary. In Elise K., the court reversed an order terminating parental rights based on the parties' stipulation that events occurring after the order was entered undermined the juvenile court's finding of adoptability. In In re Zeth S. (2003) 31 Cal.4th 396, 413, footnote 11, 2 Cal. Rptr.3d 683, 73 P.3d 541, the court noted that "Elise K. therefore serves as precedent for the proposition that where post-judgment evidence stands to completely undermine the legal underpinnings of the juvenile court's judgment under review, and all parties recognize as much and express a willingness to stipulate to reversal of the juvenile court's judgment, an appellate court acts within its discretion in accepting such a stipulation and reversing the judgment." While the evidence of changed circumstances may have been grounds for a stipulated reversal on the direct appeal from the order terminating parental rights, nothing in Elise K. vests the trial court with authority to revoke on the same grounds an order that has already become final. (See In re Heather B., supra, 98 Cal.App.4th at p. 15, 119 Cal.Rptr.2d 59.)
Jerred argues that jurisdiction to consider the request to designate Norman as his presumed father is conferred by section 7630, subdivision (b), which provides: "Any interested party may bring an action at any time for the purpose of determining the existence or nonexistence of the father and child relationship presumed under subdivision (d) of Section 7611." (Italics added.) However, interpreting this section to authorize proceedings to designate a presumed father after parental rights have been terminated under Welfare and Institutions Code, section 366.26 would undermine the finality of an order terminating parental rights, the importance of which our Supreme Court has emphatically recognized. (See In re Zeth S., supra, 31 Cal.4th at pp. 410-414, 2 Cal.Rptr.3d 683, 73 P.3d 541.) Indeed, if this argument were accepted, it would be possible to seek presumed father status even after a child has been adopted by another father. Section 7630 must be understood to mean that proceedings under that section may be brought at any time before parental rights have been terminated under section 366.26.
We join the trial court and county counsel in observing the harshness of the result we reach. Because the court has no jurisdiction, the shared desire of the minor and of the aspiring presumed father must be frustrated despite the fact that the adoption that was anticipated at the time of the section 366.26 hearing is no longer likely, and regardless of whether granting the request would be in the minor's best interest.[4] In all likelihood, Jerred will be left a "legal orphan," despite the recognized disfavor of such status. (See In re Jayson T. (2002) 97 Cal.App.4th 75, 85-86, 118 Cal. Rptr.2d 228, overruled on other grounds in In re Zeth S., supra, 31 Cal.4th at pp. 413-414, *486 2 Cal.Rptr.3d 683, 73 P.3d 541, In re Albert B. (1989) 215 Cal.App.3d 361, 374, 263 Cal.Rptr. 694.) To avoid such an unhappy consequence, legislation may be advisable authorizing judicial intervention under very limited circumstances following the termination of parental rights and prior to the completion of adoption. However, the wisdom of qualifying the present finality of a section 366.26 order in such a manner is for the Legislature to evaluate. Unless and until it does so, the courts must respect the present system.
Disposition
The order denying Jerred's section 388 petition and his oral request to have Norman declared his presumed father is affirmed.
We concur: McGUINESS, P.J., and PARRILLI, J.
NOTES
[1] All statutory references are to the Welfare and Institutions Code.
[2] Although the denial of the modification petition is included in the notice of appeal, Jerred's briefs do not address this denial. The petition, which requested that the trial court revoke the prior termination order, is clearly without legal support. (See In re Ronald V., supra, 13 Cal.App.4th at pp. 1806-1807, 17 Cal.Rptr.2d 334.)
[3] Jerred contends that to the extent this written order conflicts with the court's oral pronouncement, the oral pronouncement should control. Jerred cites a criminal case that reiterates the well-established rule that the judge's oral pronouncement of a defendant's sentence controls over a conflicting sentence entered in the clerk's minutes. (People v. Martinez (1980) 109 Cal.App.3d 851, 855, 167 Cal.Rptr. 477.) This rule is inapplicable here. This is a dependency proceeding, not a criminal action in which the judge is required to orally pronounce judgment against the defendant. Entry of the judge's written order is not a ministerial act similar to the entry of a sentence in the clerk's minutes. (See In re Jennifer G. (1990) 221 Cal.App.3d 752, 756, fn. 1, 270 Cal.Rptr. 326 [dependency court's written visitation order controls over potentially conflicting statements regarding visitation made during the hearing].)
[4] Perhaps unnecessarily, we emphasize that in view of the court's lack of jurisdiction, we do not consider whether recognizing Norman as Jerred's presumed father would in fact be in Jerred's best interest. We note only that both Jerred and Norman seek such recognition, that the likely consequence of denying Jerred's request is that he will have no father at all, and that our jurisdictional conclusion deprives the court of the power to recognize Norman's status whether or not doing so would be in Jerred's best interests.
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280 Pa. Superior Ct. 575 (1980)
421 A.2d 1081
COMMONWEALTH of Pennsylvania
v.
Melvin SHAW, Appellant.
Superior Court of Pennsylvania.
Submitted December 6, 1979.
Filed September 23, 1980.
Petition for Allowance of Appeal Denied April 21, 1981.
*576 *577 D. Michael Emuryan, Milmont Park, for appellant.
Guy Messick, Assistant District Attorney, Media, Vram Nedurian, Jr., Newtown Square, for Commonwealth, appellee.
Before WICKERSHAM, BROSKY and EAGEN, JJ.[*]
PER CURIAM:
On May 9, 1975, Melvin Shaw was sentenced to concurrent terms of eleven and one-half to twenty-three months imprisonment following his conviction of theft by unlawful taking and conspiracy. He filed a direct appeal therefrom *578 in this court, and we affirmed the judgments of sentence. Subsequently, Shaw was granted parole which ran to September 24, 1977.
On May 31, 1978, a private complaint was filed alleging that Shaw committed criminal offenses on June 22, 1977. Indictments were later returned charging Shaw with theft by failure to make required disposition of funds, theft by unlawful taking, theft by deception, and deceptive business practices. On February 6, 1979, Shaw entered a plea of guilty to deceptive business practices. The other charges were nolle prossed.
On or about February 22, 1979, the Delaware County Probation Office sent Shaw written notice that the guilty plea evidenced a parole violation and that a parole revocation hearing would be conducted on March 13, 1979. This notice was mailed to Shaw, but delivery was refused. However, Shaw was advised by his parole officer by phone of the parole revocation hearing.
At the hearing on March 13, 1979, Shaw appeared and moved that the proceedings be deferred until after disposition of a petition to withdraw his guilty plea of February 6, 1979. This motion was denied and the hearing proceeded.
In connection with the plea to deceptive business practices, Shaw's parole officer testified that, on May 31, 1978, a complaint was filed charging that, on June 22, 1979, Shaw was given a check for $3,000 as payment on account for the purchase of an automobile but neither the car nor the money was delivered, and that, on February 6, 1979, Shaw plead guilty to deceptive business practices and was ordered to make restitution. The parole officer also testified that, in making restitution which was a condition of his parole, Shaw was required to pay $100 per month but had not fulfilled this condition. The record of the guilty plea was then introduced into evidence without objection.
Shaw did not challenge the evidence of the guilty plea at the revocation hearing but challenged the authority of the court to proceed to determine if a parole violation had *579 occurred while the motion to withdraw the guilty plea was outstanding. Shaw then offered to prove that the date of the deceptive business practice was not that shown on the indictment and that he attempted to make payments to resolve what basically was a civil matter. The court declined this offer of proof and adjourned until 2 p.m. The judge directed all parties to return at that time to continue the hearing.
Court reconvened at 2 p.m., but Shaw failed to appear. The court proceeded with another matter and reconvened the parole revocation hearing at 3 p.m. Shaw still had not arrived. The court then revoked Shaw's parole and sentenced him to a term of not less than two nor more than four years imprisonment. A bench warrant was then issued. Three days later, the court, realizing the illegality of the sentence, entered an order vacating the sentence and then resentenced Shaw to pay a fine of ten dollars and the costs of prosecution, and to undergo imprisonment in the county prison for the balance of the term of his original sentence, to wit, ten months and twenty-six days.
On March 23, 1979, Shaw filed a petition for reconsideration of the order revoking parole alleging that the petition to withdraw the guilty plea to deceptive business practices had been granted and the charge had been nolle prossed.
On March 29, 1979, the court entered a citation against Shaw to show cause why he should not be held in contempt of court for his failure to appear at the hearing when it reconvened on March 13, 1979. No answer was ever filed.
At a hearing on the petition for reconsideration of the order revoking parole on April 10, 1979, Shaw's attorney stated that Shaw had gone into hiding on March 13, 1979 and remained in hiding until March 23, 1979, the date of his hearing on the motion to withdraw the guilty plea. Shaw then testified as to the circumstances of his guilty plea. He stated that the district attorney's office had originally agreed to drop the charges made in the private complaint if he would pay the victim by February 5, 1979, the trial date, but he did not and the district attorney then prepared to go *580 to trial; and, that he plead guilty. The court noted that Shaw failed to inform the judge at his hearing to withdraw the guilty plea that he was a fugitive from his parole revocation hearing. The court then denied the petition for reconsideration.
On the same day as the reconsideration hearing, the court held a hearing on the contempt citation. The Commonwealth presented testimony by Shaw's parole officer as to Shaw's failure to return to the parole revocation hearing. The parole officer testified that, several days after the revocation hearing, he received a telephone call from Shaw who indicated he was still in the area and had left the hearing because he wanted to straighten out his business and lessen the burden of business affairs on his wife. The Commonwealth then offered the record of the March 13, 1979 hearing and the record of the reconsideration hearing which contained an admission by Shaw that he consciously did not appear at the reconvening of the revocation hearing.
Shaw then testified as to his reasons for not returning to the March 13, 1979 revocation hearing. He stated that his wife was more important than the court; that he feared jail; that he wanted to straighten out his business; and, that he wanted to lift the burden from his wife. Shaw further stated that he had run his business from a phone booth and did not reappear until March 23, 1979, the date of the hearing on the petition to withdraw his guilty plea. Finally, he admitted that he did not attempt to contact the revocation hearing judge to explain why he did not appear and that he made a conscious decision not to return to the revocation hearing.
The court found Shaw guilty of contempt of court and sentenced him to a term of three months in the county jail. This appeal followed.
Shaw contends the decision to revoke his parole was an abuse of discretion. Shaw first argues the revocation of his parole at the conclusion of his parole revocation hearing was improper because the revocation was based on a guilty plea which was under attack. This argument is meritless.
*581 At the time of the parole revocation order, Shaw stood convicted by his own plea of having committed a crime while on parole. The fact that the guilty plea was subsequently permitted to be withdrawn does not, in itself, render the revocation order illegal. Cf. Commonwealth v. Davis, 234 Pa.Super. 31, 336 A.2d 616 (1975). A fortiori, we find no abuse of discretion here because a valid guilty plea existed at the time of the parole revocation hearing, and sufficient evidence was presented to warrant the revocation.
Shaw next argues that the court abused its discretion in denying his motion for reconsideration because at the time of the reconsideration hearing, the guilty plea had been withdrawn. Shaw therefore contends the evidentiary predicate on which the revocation of parole was based no longer existed.
The resolution of this question depends upon the reason for which the guilty plea was allowed to be withdrawn. Only if the reason for the withdrawal of the guilty plea brought into question the veracity of the admission of involvement in criminal activity included in the plea would the resultant withdrawal destroy the probative value of that admission to evidence criminal activity.
In Commonwealth v. Kates, 452 Pa. 102, 305 A.2d 701 (1973), an incriminating statement given by the parolee was admitted over objection during the revocation hearing. Later, evidence of the statement was suppressed and ruled inadmissible at the trial on the charges admitted therein. The Supreme Court ruled this did not invalidate the revocation order because the suppression was for a reason which did not destroy the probative value of the statement. The same rationale governs here.
Shaw's next contention is that there was insufficient evidence to find him guilty of that type of contempt of court for which imprisonment may be imposed.[1]
*582 Section 4131 of the Judicial Code, 41 Pa.C.S.A., classifies penal contempts, inter alia, as follows:
"The power of the several courts of this Commonwealth to issue attachments and to inflict summary punishments for contempts of court shall be restricted to the following cases:
* * * * * *
(2) Disobedience or neglect by officers, parties jurors or witnesses of or to the lawful process of the court."[2]
Section 4132 of the Judicial Code, 42 Pa.C.S.A., provides the punishment of imprisonment for contempt as provided in 42 Pa.C.S.A. § 4131 "shall extend only to such contempts as shall be committed in open court, and all other contempts shall be punished by fine only." In this regard, failure of a defendant to appear on scheduled dates in a court convened and declared open for the transaction of its proper business has been held to be in "open court," thus permitting that defendant to be punished by imprisonment where that failure is contemptuous, see n. 2. Commonwealth v. Ferrara, 487 Pa. 392, 409 A.2d 407 (1979).
More refined, Shaw's argument is that 42 Pa.C.S.A. § 4132 limits punishment by imprisonment for contempts under 42 Pa.C.S.A. § 4131 to situations wherein the contemptuous conduct occurs in the presence of the court. But 42 Pa.C. *583 S.A. § 4132 limits the use of imprisonment not to conduct occurring in the presence of the court, compare 42 Pa.C.S.A. § 4131(3), but to conduct occurring in open court, and, as we have pointed out, in open court includes the conduct involved herein. Commonwealth v. Ferrara, supra.
Shaw also argues that the failure to provide a jury trial vitiates the contempt finding. However, our Supreme Court has held that, where the sentence actually imposed is not greater than six months, a defendant need not be afforded a jury trial. Commonwealth v. Mayberry, 459 Pa. 91, 327 A.2d 86 (1974).
Shaw next contends that the sentence imposed, after the finding of a parole violation, of ten months and twenty-six days was excessive under the circumstances. We find this claim to be waived. Pa.R.Crim.P. 1410 provides that a motion to modify sentence must be filed within ten days of the imposition of sentence, thereby giving the sentencing court the first opportunity to modify the sentence. This was not done; therefore, the issue has not been preserved for our review. See Commonwealth v. Clair, 458 Pa. 418, 326 A.2d 272 (1974).
Shaw also alleges that his counsel, not present counsel, at sentencing for the parole violation, was ineffective for not making a motion for the sentencing judge's recusal. Shaw argues that the comments of the sentencing judge displayed obvious animosity. Most of the judge's comments which allegedly evidence animosity were made subsequent to March 16, 1979 or the date on which sentence was imposed following revocation of parole. Counsel cannot be faulted for failing to seek recusal at sentencing because of judicial conduct which occurred subsequent to sentencing. As to the comments made at sentencing, they were, for the most part, not such as would have presented counsel with an issue of arguable merit regarding recusal because, given the facts of this case, they merely represented, albeit strongly, what the facts established about Shaw and his conduct, and hence, can be viewed as statements of the reasons for the *584 sentence imposed. Since the recusal issue was not of arguable merit, counsel cannot be faulted for failing to seek recusal of the sentencing judge. Commonwealth v. Hubbard, 472 Pa. 259, 372 A.2d 687 (1977).
Judgments of sentence affirmed.
NOTES
[*] Chief Justice MICHAEL J. EAGEN of the Supreme Court of Pennsylvania, is sitting by designation.
[1] Technically, the contempt order was an independent final order from which a separate appeal should have been filed. But, since the Commonwealth does not advance this position and since the proceedings were intertwined, we shall review the contempt order as if separately appealed.
Also, the Commonwealth argues that the Superior Court does not have jurisdiction from final orders of the Court of Common Pleas in matters of direct criminal contempt. 42 Pa.C.S.A. § 722(4); In re Ebo, 244 Pa.Super. 163, 366 A.2d 1243 (1976). However, Pa.R.A.P. 741 and 24 Pa.C.S.A. § 704 specifically state the time in which an objection to jurisdiction must be filed. Instantly, the Commonwealth did not file its objection timely. Therefore, the jurisdiction of this court may be perfected if we accept jurisdiction. In the interest of judicial economy, we will accept jurisdiction and consider this issue on its merits.
[2] Commonwealth v. Garrison, 478 Pa. 356, 386 A.2d 971 (1978), in reviewing subsection (2), held that contempt under that section is justified only if the contemnor had notice of the specific order and the act constituting the violation was volitional. Instantly, both of these requirements have been met, and Shaw's argument to the contrary is meritless.
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87 Wis. 2d 441 (1978)
275 N.W.2d 112
PRZYBYLA, Plaintiff-Respondent,
v.
PRZYBYLA, Defendant-Appellant.
No. 77-584.
Court of Appeals of Wisconsin.
Argued November 15, 1978.
Decided December 27, 1978.
*443 For the defendant-appellant there were briefs by Harry F. Peck and Roger Pettit of the Wisconsin Civil Liberties Union, Milwaukee, with oral argument by Harry F. Peck.
For the plaintiff-respondent there were briefs and oral argument by Linda A. Leaf, of Milwaukee.
Before Decker, C.J., Cannon, P.J., and Robert W. Hansen, Reserve Judge.
[1] DECKER, C.J.
The only facts which we are permitted to consider are those in the record[4] and they postulate the simple question whether a claim for damages resulting from severe emotional distress can arise from a wife's determination to seek an abortion during the first trimester of her pregnancy without the advice, consent or permission of the child's father, her husband, after she falsely misrepresented and deceived him about her intention to seek an abortion.[5]
Grounding his action upon the fraudulent and intentional misrepresentation of the defendant, the plaintiff contends: "All the factors in Alsteen v. Gehl, 21 Wis. 2d 349 (1963)[6] are present in this case for the recovery of damages for the intentional infliction of emotional distress."[7]
*444 Under the Alsteen rule the plaintiff must demonstrate four factors to recover. The one factor critical to this case is:
2. In addition to being intentional, the defendant's conduct must be extreme and outrageous. The average member of the community must regard the defendant's conduct . . . as being a complete denial of the plaintiff's dignity as a person.[8]
Defendant's right to obtain an abortion without the consent of her spouse is preserved to her by the United States Constitution as interpreted by the United States Supreme Court in Planned Parenthood of Missouri v. Danforth, 428 U.S. 52, 69-71 (1976). Because we view that case as directly controlling the issues in this case, our quotation therefrom is unusually lengthy:
In Roe and Doe we specifically reserved decision on the question whether a requirement for consent by the father of the fetus, by the spouse, or by the parents, or a parent, of an unmarried minor, may be constitutionally imposed. We now hold that the State may not constitutionally require the consent of the spouse, as is specified under § 3(3) of the Missouri Act, as a condition for abortion during the first 12 weeks of pregnancy. We thus agree with the dissenting judge in the present case, and with the courts whose decisions are cited above, that the State cannot "delegate to a spouse a veto power which the state itself is absolutely and totally prohibited from exercising during the first trimester of pregnancy." Clearly, since the State cannot regulate or proscribe abortion during the first stage, when the physician and his patient make the decision, the State cannot delegate authority to any particular person, even the spouse, to prevent abortion during that same period.
We are not unaware of the deep and proper concern and interest that a devoted and protective husband has in his wife's pregnancy and in the growth and development of the fetus she is carrying. Neither has this Court failed to appreciate the importance of the marital relationship *445 in our society. Moreover, we recognize that the decision whether to undergo or to forgo an abortion may have profound effects on the future of any marriage, effects that are both physical and mental, and possibly deleterious. Notwithstanding these factors, we cannot hold that the State has the constitutional authority to give the spouse unilaterally the ability to prohibit the wife from terminating her pregnancy, when the State itself lacks that right.
. . .
We recognize, of course, that when a woman, with the approval of her physician but without the approval of her husband, decides to terminate her pregnancy, it could be said that she is acting unilaterally. The obvious fact is that when the wife and the husband disagree on this decision, the view of only one of the two marriage partners can prevail. Inasmuch as it is the woman who physically bears the child and who is the more directly and immediately affected by the pregnancy, as between the two, the balance weighs in her favor. [Footnotes and citations omitted.]
[2]
We hold that the intentional exercise by a woman and her physician of her right to terminate her pregnancy as protected by the United States Constitution, cannot constitute conduct that is so extreme and outrageous that it meets the Alsteen requirement quoted above.
The order of the circuit court is reversed and the action is remanded with directions to enter an order dismissing the complaint upon its merits.
By the Court.Order reversed and remanded with directions.
NOTES
[4] Sedlet Plumbing & Htg. v. Village Court, Ltd., 61 Wis. 2d 479, 483, 212 N.W.2d 681 (1973).
[5] We note the absence of any allegation of special financial detriment to the plaintiff or gain to defendant.
[6] 124 N.W.2d 312.
[7] Plaintiff's brief, p. 6.
[8] 21 Wis. 2d 349, 360, 124 N.W.2d 312 (1963).
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2007 UT App 173
Kallie J. Sill, Petitioner and Appellee,
v.
Joel Gordon Sill, Respondent and Appellant.
Case No. 20060296-CA.
Utah Court of Appeals.
Filed May 24, 2007.
Christina Inge Miller, David B. Thompson, and Natalie C. Segall, Park City, for Appellant.
David S. Dolowitz, Dena C. Sarandos, and Thomas J. Burns, Salt Lake City, for Appellee.
Before Judges Bench, Billings, and Orme.
OPINION
BILLINGS, Judge.
¶1 Respondent Joel Gordon Sill (Husband) appeals the trial court's grant of Petitioner Kallie J. Sill's (Wife) motion to dismiss Husband's petition to modify the parties' divorce decree. On appeal, Husband contends the trial court erred in concluding that the parties' stipulation, incorporated into the divorce decree, to waive all modification rights divested the court of its statutorily granted jurisdiction to modify the alimony award. See Utah Code Ann. § 30-3-5(8)(g)(i) (Supp. 2006). We reverse and remand.
BACKGROUND
¶2 In March 2000, Husband and Wife agreed to end their eighteen-year marriage, and Wife filed a divorce petition. Both parties retained competent counsel, and Husband and Wife entered into settlement negotiations.
¶3 Eventually, the parties reached a stipulation and property settlement agreement (the Agreement). The Agreement provides that the stipulation "resolves all issues between [the parties]." Under the terms of the Agreement, the parties agreed that in "divid[ing] the marital assets and income, . . . [Husband] w[ould] pay [Wife] the sum of $1,780,000[] within ninety (90) days of execution of th[e] [A]greement." Additionally, the parties agreed as to the division of real and personal properties and the division of Husband's retirement account. The Agreement also provides that Husband will provide Wife with $6000 per month in alimony for a period of ten years and that Husband will pay an additional $8000 per month in alimony (totaling $14,000 per month) for however many months it takes Husband to pay the $1.78 million in full. Finally, the Agreement includes a stipulation specifying that "[t]he provisions of th[e] [A]greement shall be non-modifiable as shall the Decree of Divorce which implements it with the sole exception that if all of the assets have not been disclosed and divided in th[e] [A]greement, those may be brought back before the [c]ourt for appropriate disposition."
¶4 The trial court approved the Agreement and incorporated its provisions into the parties' March 2001 divorce decree (the Decree), determining that "[the Agreement is] a fair and equitable method of resolving all issues between [the parties] and provides for the support of each of the parties and the division of their assets and payment of debts."
¶5 Following the issuance of the Decree, the parties adhered to the Agreement. But on September 13, 2005, Husband filed a petition to modify the Decree, in which he asked the court to reduce the amount of alimony he agreed to pay because he had suffered a substantial decrease in income. Wife moved to dismiss Husband's petition to modify, claiming that in accordance with the Agreement incorporated in the Decree, both parties had waived the right to modify any terms of the Agreement, including the alimony award.
¶6 The trial court agreed with Wife that the parties' waiver of all modification rights barred Husband's request to modify the alimony award and therefore dismissed Husband's petition to modify the Decree.
¶7 Husband appeals.
ISSUE AND STANDARD OF REVIEW
¶8 On appeal, Husband asserts that the trial court erroneously dismissed his petition to modify the Decree. Husband contends that the trial court wrongly determined that the parties' waiver of modification rights divests the court of its jurisdiction to make alimony modifications under Utah Code section 30-3-5(8)(g)(i). See Utah Code Ann. § 30-3-5(8)(g)(i). "`[A]lthough [this court] generally review[s] the determination to modify a divorce decree for an abuse of discretion, insofar as that determination is based on a conclusion of law, we review it for correctness.'" Medley v. Medley, 2004 UT App 179,¶6, 93 P.3d 847 (first alteration in original) (quoting Krambule v. Krambule, 1999 UT App 357,¶10, 994 P.2d 210).
ANALYSIS
¶9 Under section 30-3-5(8)(g)(i), "[t]he court has continuing jurisdiction to make substantive changes and new orders regarding alimony based on a substantial material change in circumstances not foreseeable at the time of the divorce." Utah Code Ann. § 30-3-5(8)(g)(i) (emphasis added).[1] The issue we must decide is whether the non-modification provision that the parties stipulated to in the Agreement, and that the trial court subsequently incorporated into the Decree, usurped the trial court of this continuing jurisdiction to make alimony modifications. We conclude that pursuant to Utah law, the non-modification provision did not divest the court of its continuing jurisdiction under section 30-3-5(8)(g)(i).
¶10 First, we begin by examining the language of the statute itself. See State v. Barrett, 2005 UT 88,¶29, 127 P.3d 682 ("When interpreting statutes, this court first looks to the plain language."). In so doing, "`[w]e presume that the legislature used each word advisedly and give effect to each term according to its ordinary and accepted meaning.'" Id. (quoting C.T. ex rel. Taylor v. Johnson, 1999 UT 35,¶9, 977 P.2d 479). Thus, although section 30-3-5 provides no explicit guidance as to the issue before us now, we note the significance of the legislature's inclusion of the adjective "continuing" to refer to the court's jurisdiction and that the generally accepted definition of continuing is "enduring" or "constant." Merriam Webster Collegiate Dictionary 251 (10th ed. 2004).
¶11 Second, we acknowledge that this court has previously explained that "[w]here the parties' stipulation is accepted by the trial court and incorporated into its [divorce] order, the subject matter of the stipulation is within the continuing jurisdiction of the court." Gates v. Gates, 787 P.2d 1344, 1346 (Utah Ct. App. 1990).
¶12 Third, we highlight that the effect of parties' alimony stipulations, subsequently incorporated into a decree, on a court's jurisdiction to modify alimony is "no longer considered an open question in this [s]tate." Jones v. Jones, 104 Utah 275, 139 P.2d 222, 223-24 (1943).
"In a divorce action the trial court should make such provision for alimony as the present circumstances of the parties warrant, and any stipulation of the parties in respect thereto serves only as a recommendation to the court. If the court adopts the suggestions of the parties it does not thereby lose the right to make such modification or change thereafter as may be requested by either party based on some change or circumstances warranting such modification."
Id. at 224 (quoting Barraclough v. Barraclough, 100 Utah 196, 111 P.2d 792, 793 (1941) (per curiam)); see also Huck v. Huck, 734 P.2d 417, 419 (Utah 1986). That is,
"the law was intended to give the courts power to disregard the stipulations or agreement of the parties in the first instance and enter judgment for such alimony or child support as appears reasonable, and to thereafter modify such judgments when change of circumstances justifies it, regardless of attempts of the parties to control the matter by contract."
Diener v. Diener, 2004 UT App 314,¶5, 98 P.3d 1178 (emphasis added) (quoting Naylor v. Naylor, 700 P.2d 707, 709-10 (Utah 1985)) (affirming trial court's denial of father's petition to modify child support but emphasizing that the parties' prior stipulation as to father's child support obligation was, "standing alone," an insufficient basis for denying the petition to modify because "when presented with a petition to modify a child support order, the trial court may not simply rely upon a prior stipulation entered into by the parties and accepted by the court").
¶13 Finally, we rely on the Utah Supreme Court's decision in Callister v. Callister, 1 Utah 2d 34, 261 P.2d 944 (1953), in which the court considered whether the trial court had the power and jurisdiction under Utah Code section 30-3-5 to modify the parties' divorce decree with regard to alimony payments even if the parties had entered into an agreement, incorporated into the divorce decree, intending for the alimony amount provision to be nonmodifiable. In deciding "that the trial court had power and jurisdiction to modify the decree . . . with respect to the [alimony] payments," id. at 949, the court held that
by approval of the agreement in the decree the court did not divest itself of jurisdiction under the statute to make such subsequent changes and orders with respect to alimony payments as might be reasonable and proper, based upon a change of circumstances. [And the court] hold[s] this to be true even though the provisions of the agreement should be interpreted to mean that the parties intended to stipulate for a fixed and unalterable amount of monthly alimony.
Id. at 948.[2]
¶14 We recognize that at the time of the Callister decision section 30-3-5 read:
"When a decree of divorce is made the court may make such orders in relation to the children, property and parties, and the maintenance of the parties and children, as may be equitable. . . . Such subsequent changes or new orders may be made by the court with respect to the disposal of children or the distribution of property as shall be reasonable and proper."
Id. at 946 (omission in original) (quoting Utah Code Ann. § 30-3-5 (1953) (amended 1969)). But we do not find that the statute's present day language undermines the holding in Callister; rather, we believe the fact that the court decided Callister prior to the legislature's inclusion of the continuing jurisdiction language strongly supports our decision that the parties' non-modification provision did not divest the court of its jurisdiction to make alimony modifications. Further, courts interpret the Callister decision as "hold[ing] in effect that the court has continuing jurisdiction to raise or lower alimony irrespective of any agreement of the parties." Felt v. Felt, 27 Utah 2d 103, 493 P.2d 620, 622 (1972) (noting that this is "a principle which [the court has] consistently . . . espoused").
¶15 We acknowledge, however, Wife's reliance on Kinsman v. Kinsman, 748 P.2d 210 (Utah Ct. App. 1988), for her assertion that "Utah courts have long recognized a party's ability to waive the right to modify the terms of an alimony award contained in a stipulated divorce decree." In Kinsman, the wife sought to modify a divorce decree that incorporated the parties' property settlement agreement, in which they agreed as part of the property distribution to forever waive their rights to alimony payments. See id. at 211. The trial court granted the wife's petition for modification and awarded the wife alimony based upon a substantial change in circumstances. See id. The husband appealed, arguing that the parties' waiver provision barred the wife from obtaining an alimony award. See id. On appeal, this court affirmed the trial court's modification, although it declined to do so based on a change of circumstances, explaining that "to base the award of alimony on changed circumstances ignores the finality of the terms of the stipulation which should only be overturned `with great reluctance and for compelling reasons.'" Id. at 212 (citation omitted). Alternatively, the court "based [its affirmance] on a contract theory" and decided that because the husband "failed to perform [a material] condition precedent" upon which the wife's promise to waive alimony was premised, the alimony waiver stipulation was "no longer enforceable." Id. at 212-13.
¶16 Here, Wife reads the court's language in Kinsman "declin[ing] to hold that a change of circumstances can overcome a knowing and specific waiver in a stipulation," id. at 212, to mean that the court is divested of its continuing jurisdiction to modify alimony where there has been a specific and knowing waiver by the parties to alter the alimony amount. We think Wife reads Kinsman too broadly. The language in Kinsman does not denote that a court is divested of its statutorily granted jurisdiction where parties have waived their right to modify. Rather, Kinsman merely reflects the rule that courts are more reluctant to overturn specific and knowing waivers of property distribution rights and thus require a movant to show more than changed circumstancesi.e., the movant must demonstrate compelling reasonsfor the court to modify and override the parties' waiver. See, e.g., Land v. Land, 605 P.2d 1248, 1251 (Utah 1980) ("[T]he law limits the continuing jurisdiction of the court where a property settlement agreement has been incorporated into the decree, and the outright abrogation of the provisions of such agreement is only to be resorted to with great reluctance and for compelling reasons.").
¶17 In sum, considering section 30-3-5(8)(g)'s continuing jurisdiction language and Utah case law holding that parties cannot by contract divest a court of its statutorily granted subject matter jurisdiction to make alimony modifications, even if the parties intend the alimony provisions to be nonmodifiable, we conclude that the trial court erred in granting Wife's motion to dismiss Husband's petition to modify. We therefore reverse and remand for the trial court to consider Husband's petition to modify on the merits.
¶18 Importantly, however, we agree with the court in Kinsman that a trial court should be reluctant to overturn parties' specific and knowing waivers in agreements governing both property rights and alimony. See Kinsman v. Kinsman, 748 P.2d 210, 212 (Utah Ct. App. 1988). Therefore a movant, such as Husband, must show compelling reasons, see id., to modify a divorce decree that includes a provision that the decree is nonmodifiable.
¶19 We further note that the parties included the alimony stipulation as part of an agreement dividing the parties' property. If on remand the trial court decides to reexamine the alimony issue, determining that compelling reasons exist to support a finding that a substantial change of circumstances has occurred, the court, if requested, should reexamine how any change in alimony would affect the Agreement's property division provisions incorporated into the Decree. The non-modification provision was certainly a part of the bargaining process when the parties agreed to both the alimony and the property division provisions in the Agreement that were incorporated into the Decree. Thus, if the trial court determines on remand that it should modify the alimony awarded in the Decree, then it is reasonable for the court to examine the effect of that modification on the original property division. See Noble v. Noble, 761 P.2d 1369, 1373 (Utah 1988) ("[T]he issues of alimony and property distribution are not entirely separable. `Neither the trial court nor this [c]ourt considers the property division in a vacuum. The amount of alimony awarded and the relative earning capabilities of the parties are also relevant, because the relative abilities of the spouses to support themselves after the divorce are pertinent to an equitable determination of the division of the fixed assets of the marriage.'" (quoting Newmeyer v. Newmeyer, 745 P.2d 1276, 1279 n.1 (Utah 1987))); see also Willey v. Willey, 866 P.2d 547, 551-52 (Utah Ct. App. 1993) ("[T]he trial court should consider [parties'] debt when it reexamines the alimony award on remand, because this debt has a direct bearing on [relevant factors in alimony determination]."); D'Aston v. D'Aston, 808 P.2d 111, 115 (Utah Ct. App. 1990) ("Because we reverse and remand the property division, we also reverse and remand on the issue of alimony."); Davis v. Davis, 2001 UT App 327 (mem.) (holding that "[a]n equitable division of marital property is not purely an independent determination, but must be made in light of the alimony, if any, that is awarded" and deciding that "[b]ecause we vacate and remand the alimony award, we also vacate and remand the marital property division for further consideration"). See generally Burt v. Burt, 799 P.2d 1166, 1172 n.10 (Utah Ct. App. 1990) ("[A]lteration of pivotal portions of the . . . decree may necessitate reassessment and adjustment of other portions of the decree and . . . the trial court has the authority to reconsider its entire decree . . . and to make such adjustments as may be necessary to achieve an equitable overall result.").
CONCLUSION
¶20 Because we conclude that the parties' non-modification provision incorporated into the Decree did not divest the trial court of its statutorily granted continuing jurisdiction to make alimony modifications, we determine that the trial court erred in granting Wife's motion to dismiss Husband's petition to modify. Accordingly, we reverse and remand for proceedings consistent with this opinion.
¶21 I CONCUR: Russell W. Bench, Presiding Judge.
ORME, Judge (concurring specially):
¶22 I agree we should remand for the trial court to exercise its subject matter jurisdiction, and I concur in most of what is said in the lead opinion.[1] I wish, however, to highlight a couple of points that I believe merit emphasis.
¶23 This case presents a conflict between two very important precepts in our jurisprudence: First, parties to litigation are freeindeed, encouragedto stipulate to the resolution of their disputes and, when they do so, the courts of this state will enforce those agreements as written and will not paternalistically substitute their judgment for that of the parties. Second, courts are jealous of their subject matter jurisdiction and strongly disinclined to let private litigants deprive the courts of that jurisdiction via contract. Against the backdrop of this dichotomy, there is nothing, in my opinion, to stop grown adults, represented by competent counsel, from introducing greater predictability and stability into their post-marriage lives by stipulating away their statutory right to have alimony revisited in the future even if their circumstances materially change. See, e.g., Medley v. Medley, 2004 UT App 179,¶10, 93 P.3d 847 (holding that right to future alimony based upon material change in circumstances pursuant to Utah Code section 30-3-5(8)(g) can be waived "by explicit reference to the statute or . . . a clear reference to the concept of future alimony"); Kinsman v. Kinsman, 748 P.2d 210, 212-13 & n.2 (Utah Ct. App. 1988). That said, I agree that parties cannot stipulate away a court's subject matter jurisdiction.
¶24 I agree with my colleagues, then, that the trial court erred in dismissing Husband's modification petition for lack of jurisdiction. I also agree we should remand and direct the court to exercise its jurisdiction. From there, I may part company with the lead opinion. (I say "may" because it is unclear how much wiggle room the majority really believes a trial court should have in finding that "compelling reasons" exist to relieve a party of his or her bargain.) In my view, in exercising its subject matter jurisdiction in such a case, the trial court should routinely enforce the stipulated agreement to the same extent it would any other stipulated agreement, provided only that the intention to waive one's statutory modification rights is "`clear and unmistakable.'" Medley, 2004 UT App 179 at ¶10 (quoting Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 708 (1983)).
NOTES
[1] Generally, "[a] party seeking modification of a divorce decree must demonstrate that a substantial change in circumstances has occurred since entry of the decree [that was] not contemplated in the decree itself." Bayles v. Bayles, 1999 UT App 128,¶12, 981 P.2d 403 (quotations and citations omitted); see also Utah Code Ann. § 30-3-5(8)(g)(i)-(ii) (Supp. 2006). Here, the trial court dismissed Husband's petition to modify for lack of jurisdiction and therefore did not reach the issue of changed circumstances.
[2] Unlike here, the agreement in Callister v. Callister, 1 Utah 2d 34, 261 P.2d 944 (1953), did not expressly involve a non-modification provision. But the court read the parties' agreement in that case to mean that the "parties intended to stipulate for a fixed and unalterable amount of monthly alimony." Id. at 948.
[1] I do think the lead opinion spends way too much time treating Callister v. Callister, 1 Utah 2d 34, 261 P.2d 944 (1953). While an historically important opinion, Callister is essentially irrelevant to the present dispute given that, as the lead opinion recognizes in its footnote 2, that case did not involve an actual stipulation with a non-modification clause. See id. at 945, 948.
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11-01-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2259674/
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777 F.Supp. 1469 (1991)
Donald BRENNAN, Martin Connaughton, Tad Derf, Howard Dobbins, Duane Evavold, Thomas Ojard, and John Soderquist, Plaintiffs,
v.
Jack L. CHESTNUT; Chestnut and Brooks, P.A.; Anthony F. Rico; Edward J. Senff, George Luckenbill; Richard E. Olsen; Andrew J. Sciullo; Jan Ziegler, Robert W. O'Brien, William T. Rogers; Seaway Services Corporation; General Business Services, Inc.; Central Dispatch, Inc.; and, Upper Great Lakes Pilots, Inc., Defendants.
Civ. No. 4-91-288.
United States District Court, D. Minnesota, Fourth Division.
November 4, 1991.
*1470 Gaylord W. Swelbar, Robin C. Merritt, Hanft, Fride, O'Brien, Harries, Swelbar & Burns, P.A., Duluth, Minn., for plaintiffs.
Phillip Cole, Paul C. Peterson, Linda G. Axelrod, Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, Minn., for defendants.
ORDER
DOTY, District Judge.
This matter is before the court on plaintiffs' motion to transfer venue and defendants' motion to dismiss. Based on the file, record and proceedings herein, and for the reasons stated below, defendants' motion to dismiss is granted and plaintiffs' motion to transfer venue is denied.
BACKGROUND
Defendant Upper Great Lakes Pilots, Inc. ("UGLP") is a Minnesota corporation *1471 with its principal place of business in Duluth, Minnesota. UGLP is a government financed monopoly and it was established pursuant to the Great Lakes Pilotage Act of 1960. 46 U.S.C. § 9301 et seq. ("Pilotage Act"). The Pilotage Act requires vessels operating on certain waterways on Lake Superior, Lake Huron, Lake Michigan, the St. Mary's River, the Sault Ste. Marie Locks and approaches into these locks to hire a UGLP pilot. These waterways collectively are known as the Great Lakes District Three ("District Three").
The United States Department of Transportation ("DoT") regulates the UGLP and is responsible for setting pilot rates.[1] DoT determines those rates by analyzing projected amounts of traffic and the anticipated pilotage expenses incurred to serve the traffic. The UGLP provides DoT with the financial and accounting information DoT uses to make those determinations.
The other defendants named in this case are companies and individuals who do business with or are intricately tied in with UGLP. Defendant Seaway Services Corporation is a Minnesota Corporation that was created to lease equipment to UGLP. Defendant Central Dispatch, Inc., an Illinois Corporation, dispatches and assigns pilots to vessels for UGLP. Central Dispatch is a wholly-owned subsidiary of Seaway Services Corporation. Defendant General Business Services, Inc., a Minnesota corporation, provides clerical and accounting services to UGLP, Seaway Services Corporation and Central Dispatch, Inc. Defendants Anthony Rico, Edward Senff, George Luckenbill, Richard Olsen and Andrew Sciullo comprise the board of directors and officers of UGLP. Defendants Jack Chestnut, Jan Ziegler, Anthony Rico, Andrew Sciullo, Robert O'Brien and William Rogers comprise the board of directors and officers of Seaway Services Corporations. Defendants Chestnut and Brooks, P.A. provide legal services for UGLP.
Plaintiffs are pilots who presently perform or in the past have performed pilotage services on behalf of UGLP. Some of these pilots also are minority shareholders of UGLP. All the plaintiffs claim a loss of compensation resulting from defendants' fraudulent schemes. Some of the plaintiffs also allege a loss of their pilot jobs as a result of defendants' fraudulent activities. In particular, plaintiffs allege that UGLP acted with the other defendants named in this suit to fraudulently increase the expenses that UGLP must report on the financial and accounting information it submits to DoT, in an attempt to force the government to increase UGLP's rates. Plaintiffs allege that through common control of the boards of directors and ownership of the UGLP, defendants have entered into contracts and declined to discontinue contractual arrangements between UGLP and the other defendants that are unreasonable, unnecessary and that charge excessive fraudulent fees to UGLP. In so doing, plaintiffs allege that defendants are fraudulently siphoning off UGLP's profits, some of which would be distributed to plaintiffs if available.
Plaintiffs also allege that defendants have maintained their fraudulent scheme through threats, coercion and extortion occurring over a number of years. Plaintiffs allege that the threats included threats of physical violence as well as threats against the plaintiffs' professional and economic interests. Plaintiffs further allege that the threats, coercion and extortion were directed and intended to force plaintiffs to refrain from objecting to the defendants' scheme, seeking assistance from the government, or questioning the financial information provided to plaintiffs as shareholders and employees of UGLP.
Plaintiffs' complaint consists of two counts. The first count asserts claims against defendants for various violations of § 1962(a), (b), (c) and (d) of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-68.[2] Plaintiffs *1472 rely upon mail fraud, 18 U.S.C. § 1341, wire fraud, 18 U.S.C. § 1343, extortion, 18 U.S.C. § 1951, and violations of state law that amount to coercion as the predicate acts of racketeering that bring defendants' activities within the proscription of RICO. See 18 U.S.C. § 1961(1). As such, plaintiffs ask for treble damages and reasonable attorney's fees. 18 U.S.C. § 1964(c). Count II of the complaint asserts a claim against defendants for common law fraud.
Plaintiffs filed the complaint in the Minnesota District Court, Sixth Judicial District, located in Duluth, Minnesota. Defendants petitioned for removal, pursuant to 28 U.S.C. § 1441, on the basis of federal question jurisdiction. Defendants directed their Petition For Removal "to the Judges of the United States District Court for the District of Minnesota, Fifth Division". Defendants' Notice of Filing of Petition and Bond for Removal also designated that defendants "filed their Petition and Bond for Removal ... in the office of the Clerk of the United States District Court for the District of Minnesota Fifth Division". Defendants' Bond on Removal, which designated that the action commenced in the Minnesota District Court, Sixth Judicial District, County of St. Louis, also was petitioned for removal to the Fifth Division. Plaintiffs allege that these filings dictate that this action properly should be tried in the Fifth Division of the United States District Court for the District of Minnesota, and not in the Fourth Division, located in Minneapolis, Minnesota, to which the case is currently assigned.
Consequently, plaintiffs move the court to transfer venue of this case to the Fifth Judicial Division of the United States District Court for the District of Minnesota. Defendants oppose that motion and move to dismiss the case pursuant to Rules 9(b), 12(b)(1), 12(b)(6) and 56 of the Federal Rules of Civil Procedure.[3]
DISCUSSION
Standard of Review
On a motion to dismiss, the court must construe the complaint in the light most favorable to the plaintiff and the complainant's allegations must be accepted as true. In addition, the court must resolve any ambiguities concerning the sufficiency of the claims in favor of the plaintiff. Hughes v. Rowe, 449 U.S. 5, 10, 101 S.Ct. 173, 176, 66 L.Ed.2d 163 (1980) (per curiam); Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 1081, 31 L.Ed.2d 263 (1972) (per curiam). The court must give the plaintiffs "the benefit of every reasonable inference" drawn from the "well-pleaded" facts and allegations in the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n. 6, 83 S.Ct. 1461, 1465 n. 6, 10 L.Ed.2d 678 (1963). Plaintiffs need not necessarily plead a particular fact if that fact may be reasonably inferred from facts properly alleged. See id.; see also Wheeldin v. Wheeler, 373 U.S. 647, 648, 83 S.Ct. 1441, 1443, 10 L.Ed.2d 605 (1963) (inferring fact from allegations of complaint). Thus, courts favorably construe a complaint for the benefit of the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).
*1473 So construed, the "court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984), citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). However, despite the deference the court gives to plaintiffs' allegations, it is not proper for the court to assume that plaintiffs "can prove facts that it has not alleged or that the defendants have violated the ... laws in ways that have not been alleged." Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 902, 74 L.Ed.2d 723 (1983).
Motion to Dismiss
Defendants contend that plaintiffs' complaint must be dismissed because (1) plaintiffs' complaint fails to plead fraud with the particularity required by Rule 9(b) of the Federal Rules of Civil Procedure; (2) plaintiffs lack standing to bring this action; (3) plaintiffs' claims are preempted by federal labor laws; and (4) plaintiffs have not adequately pled a RICO claim. The court finds that the disposition of this motion requires it to address only defendants' third argument that the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq., preempts plaintiffs' RICO claims. The court finds that preemption is proper. Accordingly, the court need not discuss defendants' other arguments for dismissal or plaintiffs' motion to transfer venue.
A. Preemption by the National Labor Relations Act
Defendants argue that the NLRA preempts plaintiffs' RICO claims because the complaint amounts to nothing more than an allegation of a labor dispute regarding management of a corporation. Defendants argue that the proper characterization of plaintiffs' claims as labor issues would dictate that the National Labor Relations Board ("NLRB") retain exclusive jurisdiction over the claims presently before the court. The court finds this argument persuasive.
Congress created the NLRB to settle labor disputes and its jurisdiction over such matters is almost totally exclusive. The Supreme Court stated that the NLRA "preempts state and federal court jurisdiction to remedy conduct that is arguably protected or prohibited by the [National Labor Relations] Act." Amalgamated Ass'n of Street, Elec. Ry. & Motor Coach Employees v. Lockridge, 403 U.S. 274, 276, 91 S.Ct. 1909, 1913, 29 L.Ed.2d 473 (1971) (explaining the labor law preemption doctrine established in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959).
Originally, the NLRB had exclusive jurisdiction to adjudicate allegations of unfair labor practices. Amalgamated Util. Workers v. Consolidated Edison Co., 309 U.S. 261, 264, 60 S.Ct. 561, 563, 84 L.Ed. 738 (1940); Butchers' Union, Local No. 498 v. SDC Inv., Inc., 631 F.Supp. 1001, 1006-07 (E.D.Cal.1986). Now, however, although the NLRB generally has jurisdiction over labor disputes, preemption does not apply if the court can reasonably infer that Congress did not intend the NLRB to have exclusive jurisdiction over a particular labor matter.[4]Vaca v. Sipes, 386 U.S. 171, 179, 87 S.Ct. 903, 911, 17 L.Ed.2d 842 (1967). Therefore, the court must determine whether the RICO claims presented here are exempt from the NLRA's preemption power. See e.g., MHC v. International Union, United Mine Workers of Am., 685 F.Supp. 1370, 1375-77 (E.D.Ky.1988); Brown v. Keystone Consol. Indus., Inc., 680 F.Supp. 1212, 1224-26 (N.D.Ill.1988); Butchers' Union, 631 F.Supp. at 1009-11.
In order to maintain a RICO claim, plaintiffs must sufficiently allege the requisite "pattern of racketeering activity." RICO lists acts, known as predicate acts, that the definition of racketeering activity encompasses. See 18 U.S.C. § 1961(1). Plaintiffs allege that defendants committed mail fraud in violation of 18 U.S.C. § 1341, wire *1474 fraud in violation of 18 U.S.C. § 1343, and extortion in violation of 18 U.S.C. § 1951.[5] Plaintiffs further allege that these violations constitute predicate acts under 18 U.S.C. § 1961(1)(B), are sufficient to demonstrate liability for racketeering activity under RICO, and support RICO claims independent of any labor claims.
Plaintiffs are correct that mail fraud, wire fraud, and extortion are predicate acts under RICO. But in the labor context, assuming that these predicate acts have occurred as alleged, whether a federal court may exercise jurisdiction over the plaintiffs' claims requires additional analysis. Mail fraud, wire fraud, and extortion are merely conduits through which fraud is committed. The court additionally must determine whether the violation of law underlying the fraud is one upon which the court may exercise jurisdiction.
a. Mail and Wire Fraud
The mail and wire fraud statutes prohibit the use of the mail or wires to commit a fraud. However, the statutes do not define fraud, leaving that task to other statutes. Butchers' Union, 631 F.Supp. at 1011.
"Congress enacted § 1341 forbidding and making criminal any use of the mails `for the purpose of executing [a] scheme' to defraud or to obtain money by false representations leaving generally the matter of what conduct may constitute such a scheme for determination under other laws."
Id., citing Parr v. United States, 363 U.S. 370, 389, 80 S.Ct. 1171, 1182, 4 L.Ed.2d 1277 (1960), quoting 18 U.S.C. § 1341. Congress modeled the wire fraud provision, § 1343, after the mail fraud provision and the wire fraud provision has received the same interpretation. Id., citing United States v. Louderman, 576 F.2d 1383, 1387 and n. 3 (9th Cir.1978), cert. denied, 439 U.S. 896, 99 S.Ct. 257, 58 L.Ed.2d 243 (1978), citing United States v. Donahue, 539 F.2d 1131, 1135 (8th Cir.1976). Therefore, use of the mail or wires is an offense only when used as a means to perpetrate a fraud. To determine whether a fraud has been committed, courts must look to other law.
Here, plaintiffs claim that defendants' mail and wire fraud do not involve labor law and imply that the very act of mail or wire fraud is sufficient to sustain an independent RICO claim or that some other law is at the base of the fraud. Plaintiffs' complaint and memorandum in support of their complaint are not clear on this point. If plaintiffs base their RICO claims on the latter theory, plaintiffs failed to cite any other law that could be the basis of their fraud claims. The court finds that this vagueness in the plaintiffs' allegations does not affect the outcome of this case.
Regardless of the theory that plaintiffs' use, the court disagrees with plaintiffs' argument and finds that the underlying wire and mail fraud alleged is predicated upon a violation of labor law. The underlying conduct that forms the core of plaintiffs' complaint is that defendants' have fraudulently deprived them of certain employment benefits. The court finds that it would need to examine the relevant agreements governing pilot compensation, work assignment, layoffs and discharges. Consequently, such an examination would involve issues of labor law and the court finds that these issues fall within the province of the NLRB.
The only violation of federal labor law that is exempt from NLRA preemption *1475 and for which a plaintiff may bring a RICO claim is listed as a separate predicate act under the RICO statute. See Butchers' Union, at 1007. In Butchers' Union, the court found that a violation of 29 U.S.C. § 186,[6] a provision of the Labor Management Relations Act, may be used to support a RICO cause of action because § 186 is listed among the acts that constitute "racketeering activity" under § 1961(1) of RICO. Id. at 1007-08. The court finds that the plaintiffs' claims do not implicate § 186.
b. Extortion
The analysis of plaintiffs' extortion claim is substantially similar to the court's analysis of the mail and wire fraud claim. Assuming that plaintiffs could show that defendants committed extortion under 18 U.S.C. § 1951, the court finds that defendants' underlying conduct is extortionate only by virtue of the labor laws. Plaintiffs' complaint asserts that defendants' extortion forced plaintiffs to refrain from objecting to defendants' activities and to accept unfair working rules and wage agreements, all of which eventually lead to the lay off and subsequent discharge of some of the plaintiffs. The court finds that as with the predicate acts of mail fraud and wire fraud, the court would also be forced to examine the various employment agreements between plaintiffs and defendants in order to resolve plaintiffs' extortion claims. Thus, plaintiffs' claims are within the NLRB's jurisdiction and not the court's jurisdiction.[7] Accordingly, the plaintiffs' RICO claims are dismissed without prejudice.
Common Law Fraud
The court has discretion to hear plaintiffs' common law fraud claim under the doctrine of pendent jurisdiction. United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). However, the Gibbs Court stated that "pendent jurisdiction is a doctrine of discretion, not of plaintiff's right.... [I]f the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well." Id. at 726, 86 S.Ct. at 1139; see also 28 U.S.C. § 1367(c)(3). Here, the court will exercise its discretion under the pendent jurisdiction doctrine and decline to hear the common law fraud claim. The parties will not be prejudiced by having these claims adjudicated in one proceeding before the NLRB.
Accordingly, IT IS HEREBY ORDERED that:
1. The defendants' motion to dismiss the complaint pursuant to Rule 12(b) of the Federal Rules of civil Procedure is granted; and
2. The plaintiffs' motion to transfer venue is denied.
NOTES
[1] DoT has delegated the responsibility for the Great Lakes Pilotage Program to the United States Coast Guard. 49 C.F.R. 1.46. For the purposes of this order, however, the court finds that reference to the Department of Transportation only is appropriate.
[2] Section 1962(a) prohibits a person who has received "income derived ... from a pattern of racketeering activity" to "use or invest" such income in an "enterprise" that is engaged in or "affects interstate or foreign commerce." 18 U.S.C. § 1962(a). Section 1962(b) makes it unlawful to "acquire or maintain" an "interest in or control of" an "enterprise which is engaged in" or affects "interstate or foreign commerce." 18 U.S.C. § 1962(b). Section 1962(c) prohibits a person "employed by or associated with" an "enterprise engaged in" or which affects "interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity...." 18 U.S.C. § 1962(c). Section 1962(d) prohibits a conspiracy to violate § 1962(a), (b) or (c). 18 U.S.C. § 1962(d).
[3] Both plaintiffs and defendants have filed affidavits with the court. To the extent that the court relies on those additional findings in making its determination, defendants' motion will be treated as motions for summary judgment. See Fed.R.Civ.P. 12(b)(6) & 56. Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."
[4] Congress itself has passed some exceptions to the NLRB's exclusive jurisdiction. See Vaca, 386 U.S. at 179, 87 S.Ct. at 911; Butchers' Union, 631 F.Supp. at 1006-07.
[5] In paragraph 37 of their complaint, plaintiffs also allege that defendants' "pattern of racketeering has included acts which are chargeable under state law and punishable by imprisonment for more than one year and which involve acts or threats of extortion (coercion)." Plaintiffs make this coercion claim in order to establish another predicate act upon which a RICO claim may be brought. See 18 U.S.C. 1961(1)(A). Plaintiffs, however, failed to specify the state law that defendants' may have violated. Further, the court finds that even if the plaintiffs had alleged a valid predicate act based on a violation of state law, the court would not have jurisdiction over such a claim. Analysis of any coercion claim based on the facts of this case would involve an analysis of labor issues. Based on the analysis in this order, such a matter would be within the province of the NLRB. Accordingly, the court will limit its analysis of the alleged predicate acts to mail fraud, wire fraud, and extortion.
[6] 29 U.S.C. § 186 covers restrictions on payments and loans to employee representatives, labor organizations, officers and employees of labor organization, and to employees of groups or committees of employees.
[7] The court also takes notice that similar grievances involving at least some of these plaintiffs are currently pending in a NLRB proceeding.
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18 Cal.Rptr.3d 430 (2004)
121 Cal.App.4th 1092
In re ULYSSES D. et al., Persons Coming Under the Juvenile Court Law.
Los Angeles County Department of Children and Family Services, Plaintiff and Respondent,
v.
Walter D., et al., Defendants and Appellants.
No. B170056.
Court of Appeal, Second District, Division Eight.
August 24, 2004.
As Modified on Denial of Rehearing September 8, 2004.
*431 Joseph T. Tavano, under appointment by the Court of Appeal, San Diego, for Defendant and Appellant Walter D.
Tyna Thall Orren, under appointment by the Court of Appeal, Pasadena, for Defendant and Appellant Yvonne M.
Lloyd W. Pellman, County Counsel, and Pamela S. Landeros, Deputy County Counsel, for Plaintiff and Respondent.
Mary Elizabeth Handy, under appointment by the Court of Appeal, for Minors.
Certified For Partial Publication.[*]
RUBIN, J.
Father Walter D., mother Yvonne M., and children Ulysses D. and Lorelie H. appeal from the dependency court's judgment. We modify the judgment and, as modified, affirm.
FACTS AND PROCEDURAL BACKGROUND
Ulysses was born in 1998 and his sister, Lorelei, was born in 2000. In August 2002, the Department of Children and Family Services (the department) filed a petition under Welfare and Institutions Code section 300 alleging mother Yvonne M. had physically abused Ulysses by hitting him.[1] The court detained the children, but shortly thereafter returned *432 them to mother conditioned on her completing a parenting class. In December 2002, father Walter D., who had been in prison when mother hit Ulysses, was released from prison and moved back in with mother and children. Two months later he was rearrested and returned to prison for an offense unrelated to the dependency proceedings.
In the meantime, Glendale police had begun investigating mother and father for taking several photographs of themselves and the children in various states of undress while father was out of prison. (We will describe these pictures in further detail in the Discussion section of this opinion.) Based on the photographs, the police arrested mother, and the department amended its petition to allege parents had engaged in inappropriate sexual behavior in front of the children, putting the children at risk of sexual abuse. Mother and father pleaded guilty to one misdemeanor count each of committing an immoral act before a child and were sentenced to time already served. (Pen.Code, § 273g.)
The dependency court thereafter sustained the department's petition. It found mother had inappropriately disciplined Ulysses by hitting him, thus placing him and his sister at risk of harm. It also found parents had engaged in inappropriate sexual activity in the children's presence, which constituted child sexual abuse. The court placed the children with mother under the department's supervision in the paternal grandmother's home. The court granted father reunification services and visitation, but ordered him not to live with his children. Parents and children filed notices of appeal.
DISCUSSION
1. Photos Were Sexual Abuse
i. The Law
The court's assertion of jurisdiction over parents and children for the photographs rests on a chain of linked statutes and cross-referenced definitions. The overarching statute is Welfare and Institutions Code section 300, subdivision (d) (section 300), which establishes jurisdiction when parents sexually abuse a minor or pose a substantial risk of doing so. That statute looks to Penal Code, section 11165.1 (section 11165.1) to define "sexual abuse." Subdivision (c) of section 11165.1the only subdivision of that statute which the department argues applies hereequates sexual abuse of children with their "sexual exploitation," which it defines in one of three ways. First, hiring a minor to engage in "sexual conduct" in child pornography, or possessing or distributing such pornography. (Pen.Code, §§ 11165.1, subd. (c)(1), 311.2, 311.4, subd. (a).) Second, posing a child to be photographed participating in obscene sexual conduct. (§ 11165.1, subd. (c)(2).) Or third, developing a picture of a child engaged in such conduct. (§ 11165.1, subd. (c)(3).) Section 11165.1, subdivision (c) does not define "sexual conduct," but scattered throughout its clauses are references to Penal Code sections 311.3 and 311.4, which do define "sexual conduct." Among other ways, those statutes describe it as including "exhibition of the genitals . . . for the purpose of sexual stimulation of the viewer." (Pen. Code, §§ 311.3, subd. (b)(5), 311.4, subd. (d)(1).)
People v. Kongs (1994) 30 Cal.App.4th 1741, 37 Cal.Rptr.2d 327 (Kongs), establishes criteria for determining whether a photograph is intended to stimulate a viewer by emphasizing a child's genitals. The Kongs guidelines consider "1) whether the focal point is on the child's genitalia . . .; [¶] 2) whether the setting is sexually suggestive, i.e., in a place or pose generally associated with sexual activity; [¶] 3) whether the child is in an unnatural pose, *433 or in inappropriate attire, considering the age of the child; [¶] 4) whether the child is fully or partially clothed, or nude; [¶] 5) whether the child's conduct suggests sexual coyness or a willingness to engage in sexual activity; [¶] 6) whether the conduct is intended or designed to elicit a sexual response in the viewer." (Id. at p. 1755, 37 Cal.Rptr.2d 327.) The Kongs court explained that its criteria were not equally important and a photograph of a naked child did not need to satisfy each criteria for the photograph to show sexual conduct. The court stated, "With the exception of factor No. 6 [conduct intended to elicit sexual response], a trier of fact need not find that all of the first five factors are present to conclude that there was a prohibited exhibition of the genitals . . .: the determination must be made based on the overall content of the visual depiction and the context of the child's conduct, taking into account the child's age. [Citations.]" (Ibid.)
ii. The Photographs
Mother took the following pictures in which a child appeared:
Photograph 10. Mother took this picture in the living room, where, because the apartment was cramped, she and father slept and had sex. The picture shows father and Ulysses next to each other naked on the couch. Father's legs are open, displaying his penis. Ulysses's hand is on father's abdomen about two inches above father's pubic hair.
Photograph 9. This picture shows Ulysses standing naked with one arm reaching up in a pose reminiscent of a statue.
Photograph 12. Mother took this picture of father lying in the background naked on the bed with a semi-turgid penis. His hand reaches off-camera toward Lorelei, who is in the very near foreground peering into the camera lens.
In addition to the three photographs in which the children appeared, father took on the same roll of film three photographs of mother posing for him in her panties. In two of those pictures, father's penis appeared within the photograph, too. Mother and father admitted they took pictures of mother as foreplay for their sexual arousal.
Father and children contend the photographs of the children do not focus on the children's genitals and therefore were not intended to elicit a sexual response in someone who might see the pictures. The court found differently, however, and substantial evidence supports its conclusion. Ulysses's genitals are not masked in photographs 9 and 10; they are on full display in his fully undressed state. (See Kongs, supra, 30 Cal.App.4th at p. 1756, 37 Cal.Rptr.2d 327 ["exhibition of genitals proscribed by statute `means a depiction which displays or brings forth to view in order to attract notice to the genitals or pubic area of children, in order to excite lustfulness or sexual stimulation in the viewer."].) The photographsparticularly photographs 10 and 12 in which father appears nude, respectively, with Ulysses and Loreleiare not stereotypical family photographs of a young child, say, frolicking in the bathtub, which one might take as a family keepsake. The court was instead entitled to conclude parents took the pictures to arouse themselves or others. The court's conclusion is particularly reasonable because the pictures of the children are on the same roll of film as pictures of panty-clad mother and semi-aroused father, which parents admitted taking for their sexual content.
Appellants contend the photographs warrant court jurisdiction only if *434 they show "obscene sexual conduct." In support of their contention, they cite references to "obscene" conduct in the statute outlawing child pornography. (See § 11165.1, subd. (c).) Pointing to First Amendment principles that use a community standard for defining obscenity as appealing to a prurient interest, appellants assert the photographs are not obscene because they show only nudity, which, by itself, does not appeal to a prurient interest.
The Legislature added the phrases "obscene acts" and "obscene sexual conduct" to then section 11165 (now section 11165.1) in 1982. (Compare Stats.1981 ch. 29, § 1, & ch. 435, § 1, with Stats.1982, ch. 905, § 1). The statute's legislative history does not discuss why the statute facially limited its reach to "obscene" child pornography. One possible explanation, however, is that as of 1982 no California court had decided whether First Amendment obscenity principles applied to child pornography. Perhaps in an abundance of caution (although given the silent legislative history, we admit this is only our educated guess), the Legislature required that the acts or conduct be obscene in order to ensure the statute would survive a First Amendment challenge. If so, the Legislature's caution turned out to be unnecessary because several years later People v. Cantrell (1992) 7 Cal.App.4th 523, 9 Cal.Rptr.2d 188, established that adult obscenity standards do not apply to children. The Cantrell court explained, "The courts of California and other states have generally accorded such material [involving children] less First Amendment protection than is given adult pornography. In New York v. Ferber (1982) 458 U.S. 747 [102 S.Ct. 3348, 73 L.Ed.2d 1113], the benchmark case in this area, the United States Supreme Court upheld a New York statute prohibiting persons from knowingly promoting a sexual performance by a child under the age of 16 by distributing material depicting such a performance, regardless of whether or not the material is obscene. The court held that `child pornography' involving something less than `obscenity' is not presumptively protected by the First Amendment. It said for a number of reasons including a state's `compelling' interest in safeguarding the physical and psychological well-being of a minor, `the States are entitled to greater leeway in the regulation of pornographic depictions of children.'" (Id. at p. 541; New York v. Ferber (1982) 458 U.S. 747, 102 S.Ct. 3348, 73 L.Ed.2d 1113 [same]; see also In re Duncan (1987) 189 Cal.App.3d 1348, 234 Cal.Rptr. 877.)
After Cantrell was decided, the Legislature amended the statutory definition of obscenity to expressly approve the decision. (See Pen.Code, § 311, subd. (h).) The Legislature apparently did not, however, comb through the rest of the Penal Code to remove any lingering, but now inapt, references to "obscene" acts or sexual conduct involving children. The Legislature's intent was nevertheless clear: child pornography need not be obscene to be illegal. We therefore hold section 11165.1's reference to "obscene" acts or conduct is surplusage from a bygone era, which we may safely disregard. Consequently, the photographs' depictions of the children engaged in "sexual conduct" as defined in Penal Code section 311.4, subdivision (d)(1)regardless of whether or not the photographs were obscenejustified the court's exercise of jurisdiction.[2]
*435 2.-4.[**]
DISPOSITION
The count alleging violation of Welfare and Institutions Code 300 subdivision (b) is dismissed. As modified, the judgment is otherwise affirmed.
We concur: COOPER, P.J., and FLIER, J.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts 2, 3, and 4. of the Discussion.
[1] The petition contained other allegations of abuse which were not sustained and are thus irrelevant to this appeal.
[2] We respectfully suggest that, in the interest of clarity, the Legislature consider amending section 11165.1 to delete the word "obscene" as a modifier of "acts" and "sexual conduct."
[**] See footnote *, ante.
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581 S.E.2d 579 (2003)
260 Ga. App. 232
SPARKS
v.
PEASTER.
No. A02A2190.
Court of Appeals of Georgia.
March 13, 2003.
*580 Edwards & Youmas, Lonzy F. Edwards, Macon, for appellant.
Chambless, Higdon & Carson, John J. Makowski, Macon, for appellant.
SMITH, Chief Judge.
Craig Sparks, a resident of the City of Montezuma, Georgia, brought this action for defamation and tortious interference with employment against the city manager, David Peaster. After discovery, the trial court carefully analyzed Sparks's claims and entered a lengthy, meticulous, and thoughtful order granting summary judgment in favor of Peaster. We agree with the trial court that Sparks, a local political activist, is a limited purpose public figure by reason of his extensive participation in city affairs and that Sparks failed to show that Peaster acted with actual malice.[1] We therefore affirm.
The facts of this case were largely developed from pleadings and discovery in a federal district court action brought by Sparks under 42 U.S.C. § 1983. The district court granted summary judgment against Sparks on his federal claims and declined to exercise pendent jurisdiction over the remaining state claims. Sparks promptly filed this action in Macon County Superior Court asserting his state law claims for defamation and tortious interference with employment. The Superior court adopted and incorporated the discovery and pleadings from the federal action.
The record shows that this litigation arose out of persistent difficulties between Sparks and city government officials. The controversy ultimately widened to involve the mayor and city council, the police chief and assistant chief, employees of the city clerk's office, and a local newspaper as well as Peaster. The two matters of which Sparks complains here are a conversation between Peaster and the interim editor of the newspaper and a letter Peaster wrote to Sparks's employer, Weyerhauser. According to the editor, Peaster told her that Sparks has a "serious cocaine habit" and that "his brains are just fried with drugs."[2] The letter was in reference to a city recognition of Weyerhauser for its charitable contributions to Macon County. Peaster apologized to the community relations manager for Weyerhauser that the ceremony did not receive much recognition in a local newspaper, because it was "upstaged by `Robert's Rules of Order' and coverage of a citizen who gives nothing back to the community but has a reputation as a problem maker and not a problem solver."
Sparks is a community activist in Montezuma. He regularly appears at city council meetings and speaks on a variety of issues, including senior citizens' issues, children's recreation, water and sewer bills, salary increases, street and land maintenance, flood relief, and other issues. He acknowledged in his deposition that numerous people approached him, for example, to obtain help with their water bills, and that he made inquiries at city hall on their behalf. He also printed and distributed flyers to the community regarding community issues and on one occasion inquired about a permit for a march.
A local newspaper featured Sparks as the recipient of a "Political Activist Salute," describing him as a "local political watchdog" and recognizing him for "keeping watch over local government activities and for speaking up for those who turn to him for help." Sparks was quoted in the article as wanting to
send a message to government officials, either verbally or by physically attending the meetings, that the taxpayers are concerned about what's going on, how our money is being spent, fairness in government activities, and so forth.... I know I make people at city hall mad, but I don't care. They need to be reminded who they work for. They work for all of usthe taxpayers, the citizens of this community.
In his deposition, Sparks agreed that the article was an accurate characterization of *581 his activities. He was also a regular but unofficial contributor to the same newspaper. According to the interim editor, she had a regular Friday morning meeting with Sparks, at which he informed her of issues and concerns of the community. She also testified that she "steered" Sparks towards investigating certain issues, such as the allocation of flood relief money.[3]
Witnesses testified that Sparks was extremely aggressive in his pursuit of community affairs, and on occasion appeared irrational. According to the police chief, in 1993 the city clerk, Ms. Hardy, complained to him that Sparks "was under the influence of alcoholic beverage at the City Hall and got in some sort of confrontation with" her. The police chief testified that employees at the city clerk's office were fearful of Sparks because of his loud, demanding, and irrational behavior towards them, which they believed rose "to the point of harassment of them personally." Peaster told the police chief that he was in fear of bodily harm from Sparks. The police chief witnessed several encounters between Sparks and the city clerk, and opined that "those conversations have been very heated and that Ms. Hardy is expressing genuine fear." He described Sparks's visits to city hall and to council meetings as "confrontational." On one occasion during a public meeting Sparks "yelled at the council that they were crooks." Sparks acknowledged calling them "a bunch of crooks" and calling the mayor a liar. Asked if he had acted irrationally in conversations with city employees, Sparks denied that he acted irrationally on "initial appearance" but that he became frustrated when he was unable to get the information he wanted. He denied having threatened the clerk.
The police chief also testified that he had received information from two or three telephone callers that Sparks was using cocaine. Peaster had expressed concern to the chief that
sometimes when Mr. Sparks appears before the mayor and council and is up here that he may be high on something and that they are in fear of their lives. That is a genuine fear I think that Mr. Peaster has. And I do know that at one city council meeting we did have the drug task force in the room just because we were fearful that there might be some outburst or, you know, violence take place in the council chambers at a public meeting.
The assistant police chief described an incident in which he was sitting in the break room when "the city clerk just burst through the door and started hollering for Mr. Peaster.... She said something to the effect, you better do something with Craig Sparks, he's coming in here." The assistant chief looked for Sparks but could not find him. He also testified concerning an incident in which he "had a struggle" with Sparks and had to call for backup. Sparks's parents had summoned an ambulance to the house to carry him to the hospital, but he did not want to go. The EMTs were unable to control him and called police. When the assistant chief arrived, Sparks "was hollering and running through the house." The assistant chief was unable to restrain him as Sparks was "slinging [him] around," and he called for additional officers who eventually were able to control Sparks. Sparks's mother told the assistant chief that Sparks "had taken something," and he appeared to be under the influence of some type of drug. Sparks testified that he was ill but felt better after the EMTs gave him a shot, that he did not want to go to the hospital, and that he "can't remember" resisting or struggling with the officers.
Peaster testified that he became concerned about Sparks because his employees felt threatened by Sparks's conduct in the city clerk's office. As a result, he inquired of the police department and was told by the chief and the assistant chief that Sparks had a *582 drug problem. They also told Peaster about the incident at Sparks's house.
1. We first address the issue of whether the trial court correctly held that Sparks was a limited purpose public figure. The leading case on determining an individual's status as a "public figure" is Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). There, the United States Supreme Court noted:
For the most part those who attain this status have assumed roles of special prominence in the affairs of society. Some occupy positions of such persuasive power and influence that they are deemed public figures for all purposes. More commonly, those classed as public figures have thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved. In either event, they invite attention and comment.
Id. at 345, 94 S.Ct. 2997. We recently addressed this area of law in Atlanta Journal-Constitution v. Jewell, 251 Ga.App. 808, 555 S.E.2d 175 (2001). In Jewell, we adopted the three-prong test enunciated in Silvester v. American Broadcasting Cos., 839 F.2d 1491, 1494 (11th Cir.1988), to determine whether a person is a limited purpose public figure: the court "isolate[s] the public controversy, examine[s] the plaintiff's involvement in the controversy, and determine[s] whether the alleged defamation was germane to the plaintiff's participation in the controversy." Jewell, supra at 816-817(3), 555 S.E.2d 175. This is a question of law for the court to resolve. Id. at 817(3), 555 S.E.2d 175. The Supreme Court of Georgia has adopted this analysis in Mathis v. Cannon, 276 Ga. 16, 573 S.E.2d 376 (2002).[4]
Sparks denies that he is a public figure for any purpose, contending that he was merely a citizen who spoke out occasionally on matters concerning himself only and did not otherwise inject himself into public business. He contends he did not acquire any "special prominence" or engage in any "public activity." But Sparks voluntarily became involved in numerous issues of public controversy with the stated intent of influencing their outcome, and an analysis of his activities under the Jewell test supports the trial court's conclusion that Sparks is a limited purpose public figure.
(a) While Sparks contends that Peaster has "failed to identify any public question in which plaintiff acquired `special prominence,'" it is apparent that the public controversy at issue here is the administration of the City of Montezuma, particularly the allocation of municipal funds. The local government issues surrounding this controversy were "already the subject of debate in the public arena," (footnote omitted) Jewell, supra at 817(3)(a), 555 S.E.2d 175, and "resolution of the controversy will affect people who do not directly participate in it." Silvester, supra at 1494-1495. "[I]t is not the global nature of the public's interest that defines a dispute as a public controversy, but rather whether the issue generates discussion, debate, and dissent in the relevant community." Mathis, supra, at 24(3), 573 S.E.2d 376. Administration of the local government entity therefore constitutes the "public controversy" at issue here.
(b) We next examine the extent to which Sparks involved himself in the controversy. "A plaintiff in a libel case must be deemed a public figure if he purposefully tries to influence the outcome of a public controversy or, because of his position in the controversy, could realistically be expected to have an impact on its resolution." (Footnote omitted.) Jewell, supra at 817(3)(b), 555 S.E.2d 175. "One who voluntarily thrusts himself to the forefront of a public controversy in order to influence the resolution of the issues involved is deemed to be a public figure with respect to the controversy." Finkelstein v. Albany Herald Publishing Co., 195 Ga.App. 95, 97(1), 392 S.E.2d 559 (1990). Finkelstein required minimal participation in a public controversy for the appellant to become a limited purpose public figure: he made one appearance on a local television program and was quoted in one newspaper article. In Mathis v. Cannon, *583 supra, the Supreme Court did not rely upon any media exposure but held that the plaintiff voluntarily injected himself into the controversy over a local government authority by facilitating his own business with the authority. Id., at 22(3), 573 S.E.2d 376.
In this case, Sparks was the subject of a feature story in a local newspaper and is quoted in the story acknowledging his political actions on behalf of others and his intention to influence government officials. The story describes Sparks's participation in civic affairs as a "local political watchdog," particularly his role in gathering information on and publicizing others' concerns. In addition, his distribution of flyers, his inquiries about a permit for a march, and his service as a regular consultant or informant for a newspaper which was "steered" by the editor to promote or publicize certain issues, goes well beyond Sparks's characterization of himself as merely a concerned citizen availing himself of the right to attend and speak at city council meetings. Particularly in the "relevant community," Mathis, supra, 24(3), 573 S.E.2d 376, a small town with a population of approximately 4,000, Sparks's outspoken participation in this controversy not only was a purposeful attempt to influence the outcome but also "could realistically be expected to have an impact on its resolution." (Footnote omitted.) Jewell, supra at 817(3)(b), 555 S.E.2d 175. Clearly, Sparks intended to "enter voluntarily into one of the submarkets of ideas and opinions and consent therefore to the rough competition of the marketplace." (Punctuation, and footnote omitted.) Id. at 818, 555 S.E.2d 175.
(c) Finally, Sparks's credibility and motivations for his behavior are relevant to the issues on which he engaged the city, as Sparks himself acknowledges. "[A] publication is germane to a plaintiff's participation in a controversy if it might help the public decide how much credence should be given to the plaintiff." (Footnote omitted.) Jewell, supra, at 820(3)(c), 555 S.E.2d 175. Information regarding Sparks's character and stability is relevant to the amount of trust that the public may place in his statements and assertions. Sparks therefore is a limited purpose public figure.
2. Sparks contends that Peaster remains liable, even if Sparks is determined to be a public figure, because he acted with actual malice. Sparks claims that Peaster "intentionally made defamatory comments about Plaintiff being on drugs when Defendant had absolutely no knowledge of this as a fact." He contends that Peaster "made this story up in order to discredit Plaintiff's character and credibility" so that Sparks would no longer have access to the newspaper and he would be discredited as a source.
The standard of proof of "actual malice" with regard to a public figure is high. As described in Jewell, supra, Sparks has the burden to "show by clear and convincing evidence that false and defamatory statements were published with actual malice." (Footnote omitted.) Id. at 823(7), 555 S.E.2d 175. "Actual malice" in a constitutional sense is not mere spite or ill will; it must be actual knowledge that a statement is false or reckless disregard as to its truth or falsity. Williams v. Trust Co., 140 Ga.App. 49, 56(III), 230 S.E.2d 45 (1976).
Actual or constitutional malice is different from common law malice because knowledge of falsity or reckless disregard of the truth may not be presumed nor derived solely from the language of the publication itself. Reckless disregard requires clear and convincing proof that a defendant was aware of the likelihood he was circulating false information. Thus, it is not sufficient to measure reckless disregard by what a reasonably prudent man would have done under similar circumstances nor whether a reasonably prudent man would have conducted further investigation. The evidence must show in a clear and convincing manner that a defendant in fact entertained serious doubts as to the truth of his statements.
(Citations and punctuation omitted.) Davis v. Shavers, 225 Ga.App. 497, 500-501(3), 484 S.E.2d 243 (1997), aff'd. 269 Ga. 75, 495 S.E.2d 23 (1998).
The record contains evidence not only from Peaster but from other city officials that Sparks's conduct in his dealings with city government was confrontational and at times appeared irrational and dangerous. Peaster testified that his personal observations of Sparks's behavior in council meetings and at *584 city hall led him to make inquiries of the police department in the interest of his employees' safety. The reports he received from police officials gave him reason to believe that Sparks had a problem with drugs. Police officials confirmed these reports and that they had discussed them with Peaster. Under these circumstances, Sparks has failed to meet his heavy burden to show actual knowledge or reckless disregard of truth or falsity, and the trial court correctly concluded that summary judgment was appropriate on Sparks's defamation claim.
Judgment affirmed.
ELDRIDGE and ELLINGTON, JJ., concur.
NOTES
[1] Sparks's motion to withdraw his tortious interference with contract claim on the basis of Culpepper v. Thompson, 254 Ga.App. 569, 571(b), 562 S.E.2d 837 (2002), is granted.
[2] Peaster denies having made the statements as alleged, but on summary judgment all disputed issues of fact are construed against the movant. Fuller v. Jennings, 213 Ga.App. 773, 445 S.E.2d 796 (1994).
[3] This newspaper and its interim editor, who testified on behalf of Sparks regarding Peaster's alleged statements, had a history of conflict with city officials, particularly Peaster. The editor testified that the newspaper had published articles "casting a definite shadow on city government" and attacking the city's handling of various official matters. This eventually spilled over into an acrimonious exchange in the pages of the paper between the interim editor and Peaster. Peaster testified that he believed the paper's hostility was due to its failure to get the city's business from the other newspaper in Montezuma. The interim editor testified that the paper was sold shortly before she left her position and that the new owners of the paper "wanted to keep a lower profile" with the city and "distanced themselves from Craig [Sparks]."
[4] Mathis involved allegations that a private citizen defamed the owner of a local business via messages posted on an Internet "message board." Sparks's contention that the Jewell analysis is limited to "newspaper cases" is therefore without merit.
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581 S.E.2d 593 (2003)
260 Ga. App. 260
LOWERY
v.
The STATE.
No. A03A0218.
Court of Appeals of Georgia.
March 13, 2003.
*594 L. Sanford Cox, III, for appellant.
W. Kendall Wynne, Jr., Dist. Atty., Jeffrey L. Foster, Asst. Dist. Atty., for appellee.
ELLINGTON, Judge.
A Walton County jury convicted Melvin Lowery of three counts of aggravated assault, aggravated battery, kidnapping with bodily injury, two additional counts of kidnapping, armed robbery, burglary, hijacking a motor vehicle, and ten counts of possession of a firearm during commission of a felony. Following the denial of his motion for new trial and the grant of his motion for out-of-time appeal, Lowery appeals, contending he received ineffective assistance of counsel.
To establish ineffective assistance of counsel, a defendant must show that his counsel's performance was deficient and that the deficient performance prejudiced his defense. Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). The test is whether there is a reasonable probability the jury would have reached a different verdict, absent the error of counsel. In analyzing a claim of ineffective assistance of counsel, we note at the outset that a trial court's finding that a defendant has not been denied effective assistance of counsel will be affirmed unless clearly erroneous. Further, [the defendant] must overcome the strong presumption that defense counsel's conduct falls within the broad range of reasonable professional conduct.
(Citations and punctuation omitted.) Harris v. State, 258 Ga.App. 669, 671, 574 S.E.2d 871 (2002). "As a general rule, matters of reasonable tactics and strategy, whether wise or unwise, do not amount to ineffective assistance of counsel." (Citation and punctuation omitted.) Grier v. State, 273 Ga. 363, 365(4), 541 S.E.2d 369 (2001).
Viewed in the light most favorable to the jury's verdict,[1] the evidence showed the following facts. On May 11, 2000, four masked men entered the victims' home in Walton County, threatened the victims with guns, and demanded drugs and money. The assailants bound the three victims with duct tape and moved them from room to room in their search for drugs and money. The assailants beat one victim and burned him repeatedly with an electric iron. After taking $300 from one victim, the assailants left, stealing her truck and taking the burned victim with them. Police later spotted the stolen truck and pursued the assailants. The driver of the stolen truck lost control and crashed the truck. The assailants fled into nearby woods.
Investigators arrested Lavar White in the woods. White admitted his involvement in the home invasion and named Lowery, Jarvis Thomas, and Isaac Pearson as the other assailants. Lowery and Pearson were tried together. White testified against them.
1. Lowery contends his trial counsel's performance was deficient in failing to move to sever his trial from that of co-defendant Pearson. He contends he was prejudiced by the joint trial because Pearson's counsel "was so ineffective that he essentially `dragged down' Defendant Lowery with him." "Although [Lowery's trial counsel] testified at the hearing on motion for new trial, he was not questioned regarding [the] decision [not to seek a severance]. Therefore, the decision is presumed strategic, and strategic choices made after thorough *595 investigation are virtually unchallengeable." (Punctuation and footnote omitted.) Roberts v. State, 257 Ga.App. 296, 298(2)(a), 570 S.E.2d 708 (2002) (failure to request an independent psychological evaluation). See also Duitsman v. State, 217 Ga.App. 435, 437(1), 457 S.E.2d 702 (1995) (failure to call an eyewitness). Accordingly, Lowery failed to carry his burden of showing deficient performance.
Further, by relying on his conclusory assertion that Pearson's counsel was ineffective, Lowery failed to show any reasonable probability that the verdict would have been different had he been tried separately. "[I]t is not enough for a defendant to raise the possibility that a separate trial would have given him a better chance of acquittal; a defendant is entitled to severance only where there is a clear showing of harm or prejudice and a showing that failure to sever would result in the denial of due process." (Citation omitted.) Kelly v. State, 267 Ga. 252, 253(2), 477 S.E.2d 110 (1996). Under the facts of this case, the trial court was authorized to conclude that trial counsel's failure to seek a severance of the parties did not result in a deficient performance by counsel and did not prejudice Lowery under Strickland v. Washington, 466 U.S. at 687, 104 S.Ct. 2052. Kelly v. State, 267 Ga. at 253-254(2), 477 S.E.2d 110.
2. Lowery contends his trial counsel's performance was deficient in failing to object to certain questions Pearson's counsel posed to an investigator which allowed the investigator to testify improperly, giving his opinion to the ultimate issue. "Ordinarily, a witness may not express his opinion as to an ultimate fact, because to do so would invade the province of the jury." (Citation and punctuation omitted.) Amaechi v. State, 254 Ga.App. 490, 494(3)(e), 564 S.E.2d 22 (2002). Specifically, the investigator testified that there was "no doubt in [his] mind" and he believed "[w]ith all [his] heart" that Lowery and his co-defendants committed the acts charged in the indictment. Again Lowery did not question his trial counsel about this decision, and we presume it was strategic. Roberts v. State, 257 Ga.App. at 298(2), 570 S.E.2d 708(a); Duitsman v. State, 217 Ga. App. at 437(1), 457 S.E.2d 702.
Further, even assuming that the failure to object was ineffective assistance, the record does not support a finding of "a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." (Citation and punctuation omitted.) Amaechi v. State, 254 Ga.App. at 494-495(3), 564 S.E.2d 22(e). In context, the investigator was testifying as to why he conducted the investigation as he did. The State's case for conviction was based on the testimony of an accomplice and the victims, and we conclude that it is not probable that the outcome would have been different if the questioned testimony had been excluded. A reversal is not required. Id.
3. Lowery contends his trial counsel's performance was deficient in failing to call Lowery to testify in his own defense. "In Georgia, whether or not to testify in one's own defense is considered a tactical decision to be made by the defendant himself after consultation with his trial counsel[.]" (Footnote omitted.) Mobley v. State, 264 Ga. 854, 856(2), 452 S.E.2d 500 (1995). "[I]f counsel believes that it would be unwise for the defendant to testify, counsel may, and indeed should, advise the client in the strongest possible terms not to testify. The defendant can then make the choice of whether to take the stand with the advice of competent counsel." (Citation omitted.) Id.
At the hearing on Lowery's motion for new trial, Lowery testified that he told his counsel he wanted to testify but his counsel did not want him to take the stand. Lowery's trial counsel testified that he advised Lowery that whether to testify was his (Lowery's) decision, that for strategic reasons he strongly recommended Lowery not testify, and that Lowery ultimately agreed and chose not to testify. It was the function of the trial court at the hearing on the motion for new trial to determine witness credibility and to resolve any conflicts in the testimony between Lowery and his counsel. Mobley v. State, 264 Ga. at 856(2), 452 S.E.2d 500. In this case, the evidence supports a finding that Lowery was well aware of his right to testify but agreed with his attorney's recommendation not to take the stand. Id.
*596 4. Lowery contends his trial counsel's performance was deficient in failing to call an alibi witness. Lowery's counsel testified that he opted not to pursue Lowery's alibi, in part, because Lowery's girlfriend had given a statement to police that the State could have used to rebut Lowery's planned alibi. Trial counsel's strategic decision not to present an alibi which would have opened the door to very damaging evidence did not amount to deficient performance. Allen v. State, 272 Ga. 513, 517(6)(c), 530 S.E.2d 186 (2000); Hall v. State, 243 Ga.App. 804, 806, 534 S.E.2d 196 (2000). In addition, the failure to call the unused alibi witness to testify at the motion for new trial precludes any inference that the failure to call the witness resulted in any prejudice to Lowery. Clark v. State, 258 Ga.App. 347, 348-349(2), 574 S.E.2d 344 (2002); Hall v. State, 243 Ga.App. at 806, 534 S.E.2d 196.
Judgment affirmed.
BLACKBURN, P.J., and PHIPPS, J., concur.
NOTES
[1] Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).
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9 Cal.2d 167 (1937)
SAMUEL L. CARPENTER, Jr., Insurance Commissioner, etc., Appellant,
v.
THE POLICY HOLDERS LIFE INSURANCE ASSOCIATION (a Corporation) et al., Respondents.
L. A. No. 15419.
Supreme Court of California. In Bank.
June 29, 1937.
U.S. Webb, Attorney-General, John L. Flynn, Deputy Attorney-General, Frank L. Guerena and Eugene P. Fay for Appellant.
Charles D. Warner and Charles R. Thompson for Respondents.
SEAWELL, J.
Petitioner Samuel L. Carpenter, Jr., is insurance commissioner of the state of California. Respondents *168 A. J. Scott, A. B. Jones and A. B. Jones, Jr., were president, vice-president, and secretary-treasurer, respectively, of Policy Holders Life Insurance Association, a corporation, in March 1935, when said corporation was ordered into liquidation and the state insurance commissioner named as liquidator by order of the Superior Court of Los Angeles County, as provided by law. Said insurance commissioner appeals from an order thereafter made by said court which decreed that the claims of said officers for salary in the amount of $200 each were preferred claims under section 1204, Code of Civil Procedure. Appellant insurance commissioner contends that the claims of officers for salary are not within said section.
The section is as follows: "When any assignment, whether voluntary or involuntary, and whether formal or informal, is made for the benefit of creditors of the assignor, or results from any proceeding in insolvency or receivership commenced against him, or when any property is turned over to the creditors of a person, firm, association or corporation, or to a receiver or trustee for the benefit of creditors, the wages and salaries of miners, mechanics, salesmen, servants, clerks, laborers, and other persons, for personal services rendered such assignor, person, firm, association or corporation, within ninety days prior to such assignment, or the taking over of such property, or to the commencement of the proceeding when a court action is involved, and not exceeding two hundred dollars each, constitute preferred claims, and must be paid by the trustee, assignee or receiver before the claim of any other creditor of the assignor, insolvent or debtor ..."
Thus the preference given is for the "wages and salaries of miners, mechanics, salesmen, servants, clerks, laborers, and other persons, for personal services". This section, which was embodied in the code of 1872, did not contain the words "and salaries" following "wages", nor the words "other persons" until 1907. In 1931 the word "personal" was inserted before "services". The respondents contend that in the light of these changes, it cannot be held that the claims of corporate officers for salary due them for personal services rendered the corporation are excluded from the priority provided by the section. The use of the word "wages" in statutes not also containing the word "salaries" sometimes *169 has been relied on as indicating an intent to exclude corporate officers from a preference. Respondents also rely on the use of the words "other persons", rather than such a term as "employees", and the words "personal services", rather than "labor", as indicating the inclusion of corporate officers. However, since 1931, the section has referred to the preferred claims as "labor" claims.
By his affidavit in this matter respondent A. J. Scott averred that he was president of the corporation in liquidation until March 6, 1935, at a salary of $700 a month, that a balance of $85 remained unpaid on his salary for February, 1935, and that $115 was due him as salary from March 1 to March 6, 1935, making a total of $200 due him. A. B. Jones, as vice-president, and A. B. Jones, Jr., as secretary-treasurer, filed similar affidavits, each averring a balance of $200 due on salaries of $700 monthly.
[1] We are of the view that it was not within the purposes and objects of section 1204 of the Code of Civil Procedure, to give officials of a corporation, such as a president, vice-president and secretary-treasurer, a preferential claim for an unpaid balance of salaries due them when the corporation passes into liquidation. While it is true that a literal wording of said section might seem to include such officials, we are of the view that they are in a class apart from others who work for the corporation for wages or salaries, and that in the absence of express mention it was not the legislative intent to include them within the class given priority. In Seventh Nat. Bank v. Shenandoah Iron Co., 35 Fed. 436, 442, the court said: "The prominence of such officials in every company named in the statutes precludes the idea that their distinct existence and claims were overlooked and that they were intended to be embraced in some of the designated classes of employees. They seem to have been purposely omitted."
In the absence of an express inclusion it must be held that the legislature did not intend to give a preferred claim over general creditors for their salaries, or any part thereof, to those major officials who have been directing the policy of the corporation and controlling its management as it passed into an insolvent state requiring liquidation for the benefit of its creditors generally. The underlying principle controlling the liquidation of insolvent estates is that there should *170 be a ratable distribution of assets among creditors. In the absence of a clearer expression of intent than is found in section 1204, we are unwilling to hold that this principle of equality has been disturbed in favor of major officers of an insolvent concern who have claims for unpaid salary. The amendments of 1907 made it plain that not only those working for "wages", but persons working for "salaries" should be given priority. The code commissioner's notes to said amendments state that sections 1204-1207 "were rewritten and 1208 added because the first four sections were ambiguous and carelessly drawn. Nothing new is intended by the chapter." The word "personal" placed before "services" in 1931 did not give officers priority.
[2] None of the specific designations in the section--miners, mechanics, salesmen, servants, clerks, laborers--connote an official capacity. Under the rule of ejusdem generis it must be held that the words "other persons" were intended to refer to those in the same general class as those specifically mentioned, that is, other persons not standing in relation to the corporation in an official capacity. Persons in the classes mentioned are generally described as employees. The president, vice- president, and secretary-treasurer, although in a sense employees, are generally regarded as employers, representing the corporation.
We find authority for our conclusion in a number of decisions, which although interpreting statutes differing in wording from our section 1204, nevertheless are persuasive and indicative of the general purpose of such statutes not to accord priority to salary claims of major officials. (Pullis Bros. Iron Co. v. Boemler, 91 Mo. App. 85; Perkins v. Barr, 126 Md. 91 [94 Atl. 533]; Seventh Nat. Bank v. Shenandoah Iron Co., 35 Fed. 436; MacGregor v. Johnson-Cowdin-Emmerich, 26 Fed.2d 311; Weatherby v. Saxony Woolen Co., (N. J. Ch.) 29 Atl. 326; England v. Beatty Organ Co., 41 N. J. Eq. 470 [4 Atl. 307].) Section 64, subdivision 4, of the Federal Bankruptcy Act provides for priority of payment from the bankrupt's estate of "wages due to workmen, clerks, traveling or city salesmen, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed $600 to each claimant". Under this section the president of a corporation has been held not entitled to priority. (In re Grubbs-Wiley *171 Grocery Co., 96 Fed. 183; In re Crown Point Brush Co., 200 Fed. 882; In re Metropolitan Jewelry Co., 216 Fed. 385.)
Respondents find some support for their contrary contention in Buvinger v. Evening Union Printing Co., 72 N. J. Eq. 321 [65 P. 482], Conlee Lumber Co. v. Ripon Lumber etc. Co., 66 Wis. 481 [29 N.W. 285], and in three West Virginia cases, Kimball v. Sundstrom & Stratton Co., 80 W. Va. 522 [92 S.E. 737], Grant v. Cumberland Valley Cement Co., 58 W. Va. 162 [52 S.E. 36], and Richardson v. Norfolk & W. R. Co., 37 W. Va. 641 [17 S.E. 195].
It is our conclusion that under section 1204 of the Code of Civil Procedure, the respondent officers, who are president, vice-president and secretary-treasurer of the corporation in liquidation, are not entitled to priority in payment of any portion of their claims for salary, but must share pro rata with general creditors of the corporation.
The order appealed from is reversed.
Curtis, J., Langdon, J., Sturtevant, J., and Nourse, J., pro tem, concurred.
SHENK, J.,
Dissenting.
I dissent. As the statute originally stood there could be no doubt of the correctness of the conclusion that the salaries of those rendering personal services to corporations as officers thereof were not then preferred claims. But when the statute was amended in 1931 to include the salaries of servants and other persons for "personal" services rendered the assignor "corporation", some significance should be given to those amendments. The majority opinion holds them meaningless. When they are accorded their usual meaning the salaries and wages of those who render personal services for the assignor corporation, whether as officers, servants or employees, would be entitled to the preference to the extent of $200. (See Levitt v. Faber, 20 Cal.App.2d Supp. 758 [64 PaCal.2d 498].) The code commissioner's notes related to the 1907 amendments and appear to have been concerned mainly with arrangement and not so much with substance. Those notes were not concerned at all with the substantive changes in 1931. In my opinion the order should be affirmed.
Edmonds, J., concurred.
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22 Cal.App.2d 75 (1937)
RUTH MOORE, a Minor, etc., Respondent,
v.
ANGELO FRANCHETTI et al., Defendants; BRUNO LUCHI, Appellant.
Civ. No. 5069.
California Court of Appeals. Third Appellate District.
July 19, 1937.
J. O. Kroyer for Appellant.
R. M. Quackenbush for Respondent.
Maxey, J., pro tem.
On December 14, 1929, at about 7 o'clock P. M., Ruth Moore, a minor of the age of seventeen years, was riding in a Ford coupe owned by her father, George E. Moore, and being driven by her sister, Georgia Moore; they were traveling in a general southerly direction on the Redwood highway, from Santa Rosa toward Cotati, at a rate of speed of approximately twenty miles per hour, when their automobile was struck from the rear by an automobile driven by Angelo Franchetti. Immediately following this collision, the car in which plaintiff was riding continued *77 down the highway a distance of thirty or forty feet and stopped on the westerly side of the highway. It was dark and raining and the pavement was wet and slippery.
Immediately following the collision plaintiff and Georgia Moore got out of the automobile in which they were riding for the purpose of investigating the damage done to it, and had some conversation at that time with Mr. Franchetti. Upon examination it was found that the automobile in which plaintiff and her sister were riding had been somewhat damaged, the extent thereof not being ascertained at that time, and, in order to make a further examination as to the mechanical operation, Georgia Moore reentered the automobile which she had been driving and attempted to start the motor. At that time the plaintiff was standing "half on and half off" the highway, along the westerly side of the automobile, with the right door thereof standing open; her position was near the front of the automobile, where she was waiting to see if the motor would start. Between three and five minutes following the collision with the Franchetti automobile, and while the automobile in which plaintiff had been riding was still in the position in which it had stopped following the first collision, a Ford automobile driven by the appellant, Bruno Luchi, approached from the north at a speed of approximately thirty miles per hour and collided with the Moore car, resulting in the striking of the plaintiff, Ruth Moore, either by the Moore car or by the Luchi car, and causing her serious injury.
The case was tried by the court sitting without a jury, and judgment rendered in favor of the plaintiff and against defendant Bruno Luchi, for the sum of $2,000, general damages, and $165.50 special damages.
It is conceded by respondent that the allowance of the special damages in the sum of $165.50 was an oversight upon the part of the court, and that such sum should be stricken from the award as made.
[1] Appellant contends that respondent and her sister, Georgia Moore, were engaged in a joint enterprise at and immediately prior to the accident, and that Georgia Moore was guilty of negligence proximately contributing to the accident, and that such negligence, being imputed to respondent, is a bar to her recovery.
The facts do not bear out such a conclusion. The older sister of respondent, Georgia Moore, had been granted permission *78 by her father to drive his automobile from their home in Cotati to Santa Rosa. Georgia invited respondent to accompany her on this trip. Georgia drove the automobile during the entire time they were traveling, and respondent exercised no control nor management over it. Respondent did not drive the automobile at any time on that occasion nor on that day. The common enterprise consisted solely of the fact that they were riding together. No permission to drive the car had been granted to respondent by her father, but he had expressly granted permission to the driver thereof to use it for the purposes for which it was then being used. Respondent and her sister were not in joint or common possession of the car.
Under the circumstances as disclosed by the testimony in this case, the doctrine of joint enterprise is inapplicable. (Kelly v. Hodge Transportation System, 197 Cal. 598-604 [242 P. 76]; Collins v. Graves, 17 Cal.App.2d 288 [61 PaCal.2d 1198].)
[2] It is contended that respondent was negligent in not removing the automobile in which she had been riding, from the highway. The automobile was under the control and management of Georgia Moore; she was endeavoring to move it, when the second collision occurred in which appellant's automobile was involved. Ruth was standing alongside of the automobile, waiting for her sister to start the motor; there was no reasonable ground to charge her with the duty of its removal; furthermore, she had no opportunity to do so while her sister was attempting to perform that very act. The mere fact that respondent knew how to, and had operated this same automobile previously cast no duty upon her to remove it from the highway following the first collision. If there was any negligence in not removing the Moore car from the highway, such negligence was chargeable to Georgia Moore, and could not in any way be imputed to the respondent. (Dover v. Archambeault, 57 Cal.App. 659-662 [208 P. 178]; Tousley v. Pacific Elec. Ry. Co., 166 Cal. 457-462 [137 P. 31].)
There is evidence in abundance to support the court's findings that respondent was not guilty of negligence that contributed to the accident, nor could any negligence proximately causing said accident be imputed to her.
[3] Appellant further contends that the court erred in denying his motion for a new trial. This motion is based *79 upon the affidavit of the appellant to the effect that he had no notice of the time of trial, and was, therefore, not present, and that his testimony was necessary to a proper determination of the questions involved. The affidavit further sets out a brief statement of what the testimony of appellant would be, together with the further fact that there are no other witnesses whom appellant intended to call or who knew anything of the facts and circumstances surrounding the accident.
At the time the case was called for trial, the attorney for the appellant made this statement: "If your Honor please, I represent the defendant Nieri (Luchi), but I have been unable to locate him for approximately a year. I do not know his whereabouts. I have sent him communications from April down to January of this year and have been unable to locate him. The defendant has not been in my office for over a year and I have not seen him since I filed his answer herein." The court thereupon afforded the attorney for the appellant the right either to withdraw from the case or to proceed with the trial, and the said attorney then elected to proceed with the trial.
The action of the trial court in denying a motion for new trial will not be disturbed except upon a clear showing of an abuse of discretion. (Smith v. Schwartz, 14 Cal.App.2d 160-166 [57 PaCal.2d 1386], and cases cited.)
Unless such a moving party can show that by a retrial of the action, and supporting facts therefor are contained in the affidavit, he could establish an entirely different case favorable to himself in the event that a new trial be granted, it is a thoroughly settled rule that a motion for a new trial will not be granted. (Brandt v. Krogh, 14 Cal.App. 39, 43 [111 P. 275].) In the instant case, the affidavit in support of the motion was unquestionably thoroughly considered by the court, and the conclusion reached that it did not and could not warrant a different judgment than that entered in the instant case.
It is, therefore, our conclusion that the judgment rendered by the trial court herein be modified by striking therefrom the sum of $165.50, and that, as modified, the judgment be affirmed. Respondent to recover costs.
Pullen, P. J., and Plummer, J., concurred.
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21 Cal.App.2d 513 (1937)
DIXWELL L. PIERCE, Appellant,
v.
HARRY B. RILEY, as Controller, etc., Respondent.
Civ. No. 5845.
California Court of Appeals. Third Appellate District.
June 24, 1937.
Devlin, Devlin & Diepenbrock and Horace B. Wulff for Appellant.
T. H. Christiansen and Webb Shadle for Respondent.
The Court.
This is an appeal from a judgment denying a petition for a writ of mandamus and dismissing the proceeding. The writ was sought to compel the state controller to draw a warrant for the petitioner's increase of salary as secretary of the state board of equalization on the theory that his salary was fixed by the board according to the provisions of section 3692, subdivision 12, of the Political Code as amended in 1933. (Stats. 1933, p. 2689.) The respondent contends that the salary which was allowed the secretary by the board was not "effectual and payable" until it was first approved by the department of finance as required by section 675b, now section 675.1, of the Political Code, which approval of the increased portion of his salary was never procured. This proceeding depends upon the construction of the two sections of the code above mentioned, as they then existed.
The petitioner has been secretary of the state board of equalization for several years past. In 1917 his salary was fixed by section 3700a of the Political Code at $4,000 per year. In 1931 section 3700a was repealed. At the same time section 3692 of the Political Code, relating to the powers of the board of equalization, was amended so that subdivision 12 thereof then provided:
"The powers and duties of the state board of equalization are as follows: * * *"
"12. To appoint a secretary, prescribe and enforce his duties. The secretary shall hold his office during the pleasure of the board and shall receive such compensation as may be prescribed by the board with the approval of the department of finance."
This amendment was approved June 9, 1931, and took effect August 14, 1931. (Stats. 1931, p. 1434.) Pursuant to that *516 amendment the salary of the secretary was fixed and approved at $6,600 per year.
At the same time the last mentioned amendment of the code was enacted, section 675b of the Political Code was also adopted. It was approved May 15, 1931, but it took effect August 14, 1931, at the same time the amendment to section 3692 also took effect. (Stats. 1931, p. 843.) Section 675b provided:
"Whenever any state department, board, commission, court or officer fixes the salary or compensation of an employee or officer, which salary is payable out of state funds, the salary shall be subject to the approval of the state department of finance before it becomes effective and payable."
In 1933, subdivision 12 of section 3692 of the Political Code was again amended by omitting therefrom the phrase with relation to the secretary's salary, "with the approval of the department of finance". That section now reads:
"The powers and duties of the state board of equalization are as follows: * * *"
"12. To appoint its secretary, prescribe and enforce his duties. The secretary shall hold his office during the pleasure of the board and shall receive such compensation as may be prescribed by the board."
January 7, 1935, the board of equalization reduced the salary of the secretary to $5,000 per year, which change in his salary was duly approved by the department of finance. But at a meeting on August 7, 1935, the board of equalization, effective August 1, 1935, again increased his salary to the former amount of $6,600 per year, which was payable in equal monthly instalments. This last mentioned action of the board of equalization, which increased the secretary's salary to the amount of $1600 per year over the preceding fixed salary of $5,000 per year, was not approved by the department of finance. The former fixed and approved salary of $5,000 has been fully paid. After having served as secretary for the period of one year following the last mentioned increase of salary, the secretary demanded of the state controller the issuing of a warrant in his favor for the increased amount of his salary to August 1, 1936, in the sum of $1600, which was refused. The last mentioned sum is all that is involved in this proceeding. This petition for a writ of mandamus was then filed in the Superior Court of Sacramento *517 County. The writ was denied, and a judgment was rendered dismissing the proceeding. From that judgment this appeal was perfected.
The questions to be determined are whether the amendment to section 3692, subdivision 12, in 1933, eliminating therefrom the phrase "with the approval of the department of finance" constitutes a special statute which is controlling over the general provisions of section 675b, now 675.1, of the Political Code, with respect to the necessity of procuring the approval of the department of finance before the salary of the secretary which has been fixed by the board of equalization becomes "effective and payable", and whether section 675b of the Political Code was unconstitutional and void for the reason that the subject of the regulation and approval of salaries by the department of finance was not expressed in the title to the act as required by article IV, section 24, of the Constitution of Califorinia.
It will be observed that prior to the amendment of section 3692, subdivision 12, of the Political Code in 1933, both that section and the provisions of section 675b of the Political Code required the approval of the department of finance before the secretary's salary became effective and payable.
It is urged by the petitioner that the act of the legislature amending section 3692, subdivision 12, in 1933 by eliminating the phrase, "with the approval of the department of finance", and by adding thereto the mandatory language that the secretary "shall receive such compensation as may be prescribed by the board" clearly indicates that it was the intention of the legislature to exempt from the law authorizing the fixing of the secretary's salary the necessity of procuring the approval of the department of finance. It is also asserted that section 675b, as it then existed, was unconstitutional and void for the reason above mentioned.
On the contrary, the respondent argues that the elimination of the approval clause of the special statute merely left the general law, which was then found in section 675b, applicable, and that it must be presumed on the principle of upholding both statutes, if they may be reasonably reconciled, that the legislature knew the provision with relation to the approval of the salary by the department of finance, which was found in both sections, was merely cumulative and unnecessary.
The principles applicable to the construction of statutes which are adopted at the same time and which apply to the *518 same subject-matter are so closely related that it is often difficult to determine which one is controlling. The solution of the problem frequently turns upon the application of these well known rules to ascertain if possible the intention of the legislature with relation to the statutes in question.
[1] We have concluded that the amendment of section 3692, subdivision 12, of the Political Code in 1933, eliminating therefrom the phrase "with the approval of the department of finance" was intended by the legislature to and had the effect of relieving the board of equalization from the necessity of securing the approval of the department of finance of the secretary's salary which was fixed by the board subsequent to that amendment, and that his salary fixed by the board pursuant to that amended statute thereafter became effective and payable without the approval of the department of finance.
[2] It is true that statutes which are in pari materia should be construed together and reconciled so as to uphold both of them if it is reasonably possible to do so. This is especially true when such statutes are enacted at the same time, or at the same session of the legislature or when they become effective on the same date. (59 C.J. 1053, sec. 622.) Even when one such statute merely deals generally with a particular subject while the other legislates specially upon the same subject with greater detail and particularity, the two should be reconciled and construed so as to uphold both of them if possible. (Cohn v. Isensee, 45 Cal.App. 531 [188 P. 279].) Section 675b of the Political Code, which was applicable generally to the necessity of procuring the approval of salaries of officers fixed by certain departments did not permanently lose its effectiveness with respect to the salary of the secretary of the board of equalization merely because that approval was also required by the provisions of the special enactment of section 3692, subdivision 12. Upon the repeal or amendment of the last mentioned section, the general provisions of section 675b with respect to that subject might be set in motion and become effective in that regard if it were valid. (Seattle Coal & Transp. Co. v. Thomas, 57 Cal. 197; Lewis v. County Clerk of Santa Clara County, 55 Cal. 604; Ex parte Williamson, 116 Wash. 560 [200 P. 329]; County of Ventura v. Barry, 202 Cal. 550 [262 P. 1081].) *519
[3] But in the present proceeding the following circumstances furnish very persuasive evidence that the legislature did not intend to subject the payment of the salary of the secretary of the board of equalization to the approval clause of the general enactment of section 675b of the Political Code. When the last mentioned section was approved May 15, 1931, the salary of the secretary was then statutory. It was then definitely fixed by section 3700a of the Political Code at $4,000 per year. Section 675b did not assume to apply to salaries of officers which were then definitely fixed by statute. It purports to apply only to salaries fixed by "state departments, boards, commissions, courts or officers". It is true that section 3692, which authorized the board of equalization to fix the secretary's salary was later approved on June 9, 1931, and that it took effect upon the same date when section 675b became effective. [4] It is not conclusive of this problem, but it is recognized as a rule of construction in determining which act is controlling under such circumstances, that the statute last approved particularly if it be a special act applicable to a particular subject, will be controlling over one which was previously approved, on the theory that it is the latest utterance of the legislature. (County of Mariposa v. County of Madera, 142 Cal. 50, 55 [75 P. 572]; Ex parte Sohncke, 148 Cal. 262 [82 P. 956, 113 Am.St.Rep. 236, 7 Ann. Cas. 475, 2 L.R.A. (N. S.) 813].) In the present case it is evident that section 3692, subdivision 12, is a special act applying only to the duties and salary of a particular officer, while section 675b is general in its nature. The rule of construction is established that a special statute ordinarily has precedence over a general act of the legislature. Moreover, it seems clear that by deliberately amending section 3692, subdivision 12, by omitting the language "with the approval of the department of finance", the legislature intended to relieve that statute of the approval clause. (Shearer v. Flannery, 68 Cal.App. 91, 94 [228 P. 549]; United States v. Prentis, 182 Fed. 894; United States v. One Ice Box, 37 Fed.2d 120; San Marcos Baptist Academy v. Burgess, (Tex. Civ. App.) 292 S.W. 626. [5] We must assume the legislature had some definite purpose in view in amending the last mentioned section. The only reasonable result to be attained by that amendment was to relieve the statute of the approval clause. If this statute was deemed to be merely cumulative in its effect with that of *520 section 675b it would appear to be idle and useless to amend one of them, for it certainly did no harm to leave it as it previously existed. The strongest circumstance indicating that the legislature intended by the amendment of section 3692 to relieve it of the approval clause is that this intention would furnish a reasonable purpose and design for the change in the law. Otherwise it was useless and idle to modify the statute. We must assume the legislature had a purpose and design in amending that statute. (People v. Weitzel, 201 Cal. 116, 118 [255 P. 792, 52 A.L.R. 811].) In the case last cited it is said in that regard:
"'Where changes have been introduced by amendment, it is not to be assumed that they were without design; usually an intent to change the law is inferred.' (In re Segregation of School District No. 58, 34 Idaho, 222 [200 P. 138].) In Rieger v. Harrington, 102 Or. 603 [203 P. 576, 580], it was said: 'By amending that statute, the legislature demonstrated an intent to change the pre-existing law, and the presumption must be that it was intended to change the meaning of the statute in all the particulars wherein there is a material change in the language of the amended act.' To the same effect are the following authorities: Springfield Co. v. Walton, 95 Mo. App. 256 [69 S.W. 477]; Duff v. karr, 91 Mo. App. 16; Pierce v. County of Solano, 62 Cal.App. 465, 469 [217 P. 545]; Shearer v. Flannery, 68 Cal.App. 91, 94 [228 P. 549]."
In Lundquist v. Lundstrom, 94 Cal.App. 109, 112 [270 P. 696], it was also held that the legislature must be presumed to have intended to change the effect of a statute by an amendment which deliberately and clearly changes the language substantially.
[6] There is another reason which precludes us from holding that the general provisions of section 675b of the Political Code, as it existed after the amendment of section 3692 in 1933, were not controlling with respect to the necessity of procuring an approval of the salary of the secretary which was fixed at $6,600 on August 1, 1935. We are persuaded that section 675b was unconstitutional and void for the reason that its title contained no reference to the authority of the department of finance to regulate, control or approve salaries of officers. The title to the act merely declared that it was enacted to amend certain sections of the Political Code and to add other sections, including section 675b, "relating to the *521 department of finance". This title gave no intimation that authority was to be conferred upon that department to regulate or approve salaries of officers. Prior to the adoption of that section the department of finance had no such authority. For the reason that the title to section 675b was defective and fails to conform to the mandate of article IV, section 24, of the Constitution of California it was void and may therefore not control the provisions of the special act with regulation to the secretary's salary contained in section 3692, subdivision 12, of the Political Code. The unconstitutionality of section 675b, because of the defective title thereto, was evidently recognized by the legislature by the subsequent repeal of the last mentioned section in 1935 and the adoption of a new section in lieu thereof, designated as section 675.1 of the Political Code. (Stats. 1935, p. 404.) This last mentioned enactment, however, does not affect this proceeding because it was adopted after the petitioner's claim accrued.
It is true that the title to an act should be liberally construed so as to uphold the statute if a reasonable reference to the subject-matter included therein may be ascertained from the language employed, and that it is not necessary to embrace in the title every detail of the subjects of the enactment. (Hecke v. Riley, 209 Cal. 767, 775 [290 P. 451].) It is there said:
"It is now well settled 'that the constitutional provision requiring the subject of the act to be expressed in its title must be liberally construed, and that all that is required to be contained therein in order to meet the constitutional requirement is a reasonably intelligent reference to the subject to which the legislation of the act is to be addressed. It is not necessary that it should "embrace an abstract or catalogue of its contents"'. (Estate of McPhee, 154 Cal. 385, 389 [97 P. 878, 880].)"
In the Hecke case, supra, the title, which was held to adequately comply with the Constitution, after specifying certain sections of the Political Code which were amended, then recites that the provisions are "relating to the department of agriculture and the division of land settlement thereof". (Stats. 1929, p. 677.) These amendments merely modified the provisions of an act creating the department of agriculture of the state and designating the duties of the director of agriculture (Stats. 1919, p. 542; 1 Deering's General Laws of 1931, p. 40, Act 113), with relation to the *522 state land settlement division thereof. The general powers of that division then existed by virtue of the Department of Agriculture Act. The amendments affected only such general authority. Reference in the title to the "department of agriculture and the division of land settlement" was therefore held to be adequate. But in the present case the effort to confer upon the department of finance for the first time in section 675b of the Political Code the authority to regulate and approve all salaries fixed by "departments, boards, commissions, courts or officers" was entirely foreign to any powers previously possessed by the department of finance. That department had previously been authorized by statute to audit all claims, but it had not been permitted to regulate or approve the fixing of any salaries. These added duties are so distinct from the former duties of the department that the title to section 675b would be entirely misleading with regard to the proposed legislation. We are therefore of the opinion that section was unconstitutional and void.
For the foregoing reasons the judgment should be reversed. It is so ordered. The court is directed to grant the writ of mandamus requiring the state controller to issue a warrant in favor of the petitioner in the sum of $1600 as prayed for.
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568 N.W.2d 125 (1997)
224 Mich. App. 15
Dean S. JENNINGS as conservator of the Estate of Cynthia K. Rasmussen, Plaintiff-Appellant/Cross-Appellee,
v.
Richard J. SOUTHWOOD, Bill Boyd, Jr., Dan Daniels, Lake Township, and Lake Township Ambulance Rescue, Defendants-Appellees/Cross-Appellants.
Docket No. 187103.
Court of Appeals of Michigan.
Submitted November 19, 1996, at Grand Rapids.
Decided May 30, 1997, at 9:20 a.m.
Released for Publication September 11, 1997.
*126 Michael D. Marrs, Stevensville, for Plaintiff-Appellant/Cross-Appellee.
Cummings, McClorey, Davis, Acho & Tremp, P.C. by Richard H. Winslow, Battle Creek, for Defendants-Appellees/Cross-Appellants.
Before REILLY, P.J., and MacKENZIE and B.K. ZAHRA,[*] JJ.
AFTER REMAND
PER CURIAM.
This malpractice case involving emergency medical technicians is before this Court for a third time. Plaintiff Dean S. Jennings, as conservator of the estate of Cynthia K. Rasmussen, appeals as of right a circuit court order denying his motion for a new trial on the basis of the court's conclusion that any error in the jury instructions used at trial was harmless and did not result in substantial *127 injustice. Defendants cross appeal as of right from the same order, which also denied defendants' motion for summary disposition because the court concluded that plaintiff presented sufficient facts to permit the jury to decide the case. We reverse in part, affirm in part, and remand for a new trial.
The underlying facts of the case are summarized in this Court's previous opinion, Jennings v. Southwood, 198 Mich.App. 713, 716-717, 499 N.W.2d 460 (1993) (Jennings I), and the Supreme Court's opinion, Jennings v. Southwood, 446 Mich. 125, 521 N.W.2d 230 (1994) (Jennings II), in which the Supreme Court vacated this Court's opinion. The Supreme Court summarized the facts and procedural history of the case as follows:
The plaintiff filed suit in the Berrien Circuit Court on January 15, 1988, against defendant Lake Township Municipality, its ambulance service, Lake Township Ambulance and Rescue, and the individual EMS personnel, Richard Southwood, and Bill Boyd, seeking damages for gross negligence. The plaintiffs key allegation is that the defendants refused to transport thirteen-year-old Cynthia Rasmussen, a diabetic and epileptic, to the hospital on November 25, 1986. As a result of the defendants' refusal, Cynthia slipped into a diabetic coma later that evening and has been unconscious ever since.
By October 1988, the trial court dismissed the municipality, holding that it could not be vicariously liable on grounds of governmental immunity. During the subsequent jury trial, the trial court instructed the jury about gross negligence using the GTLA[[1]] definition. During the instruction, the court gave examples of gross negligence in the context of the criminal law. Plaintiffs counsel specifically objected to the use of such examples.
Following deliberations, the jury reached a verdict of no cause of action, and the trial court denied the plaintiffs motion for a new trial. The plaintiff filed an appeal of right in the Court of Appeals, alleging two errors: (1) an instructional error concerning the use of criminal examples to demonstrate civil gross negligence, and (2) an error regarding the trial court's grant of summary disposition to the municipality on the grounds of governmental immunity.
The Court of Appeals issued a per curiam opinion, affirming the judgments for the defendants on the basis of an issue that it raised sua sponte and resolved against the plaintiffs. 198 Mich.App. 713, 499 N.W.2d 460 (1993). Because the plaintiff failed to plead and prove that Cynthia was negligent before the defendants' negligence, the plaintiff failed to demonstrate gross negligence as defined in Gibbard[[2]], rendering the defendants immune from suit under the EMSA[[3]]. The majority also concluded that the trial court erred in using criminal examples of gross negligence and dismissing the municipality on governmental immunity grounds; it held, however, that these errors were harmless in light of plaintiffs failure to plead and prove gross negligence pursuant to Gibbard, [Id. at 147-148, 521 N.W.2d 230.]
In Jennings II, the Supreme Court overruled Gibbard, thus eliminating the legal foundation of this Court's conclusion in Jennings I that the instructional error and grant of summary disposition in favor of the municipal defendants were harmless. The Court then addressed two remaining issues, which it characterized as follows: "(1) whether governmental immunity under the GTLA bars suit against the defendant municipahty, and (2) whether the trial errors regarding the use of criminal examples for gross negligence and the dismissal of the defendant municipality require a new trial." Jennings II, supra at 148, 521 N.W.2d 230. With respect to the first issue, the Court "affirm[ed] the holding of the Court of Appeals that the dismissal of the defendant municipality on grounds of governmental immunity was erroneous." Id, *128 at 150, 521 N.W.2d 230. With respect to the second issue, the Court reasoned:
While the Court of Appeals determined that the trial court erred in granting summary disposition to the municipality and in using criminal examples in its instructions regarding gross negligence, the panel nevertheless determined that the error was harmless in light of the plaintiffs failure to prove Gibbard's gross negligence. Given that the justification can no longer support this conclusion, we vacate the judgment of the Court of Appeals. We remand the case to that Court for further consideration of whether the errors were harmless. [Id.]
This Court remanded the case to the trial court to "allow plaintiff-appellant to move for a new trial in light of [Jennings II]." Jennings v. Southwood, unpublished order of the Court of Appeals, entered November 30, 1994 (Docket No. 178564).
Following remand to the circuit court, plaintiff moved for a new trial on the basis of instructional error. Defendants moved for summary disposition, claiming that plaintiff had failed to prove that Cynthia had not overdosed on insulin after the EMS personnel left on the evening of November 25, which defendants asserted entitled them to judgment as a matter of law. The trial court denied plaintiffs motion, concluding that the instructional error was harmless because it did not confuse or mislead the jury. The court also denied defendants' motion on the ground that plaintiff had produced sufficient evidence to escape a directed verdict and to take the case to the jury.
Plaintiff now contends that only a new trial can cure the trial court's instructional error because the instructions so confused and misled the jury that a substantial injustice occurred in this case. Plaintiff asserts that the instructions misled the jurors into believing that they had to find that defendants had committed a crime in order to find that defendants had been grossly negligent and that the instructions confused the jurors as to whether plaintiffs burden of proof was by a preponderance of the evidence or beyond a reasonable doubt. We agree with plaintiff that the trial court erred in denying plaintiffs motion for a new trial.
The trial court instructed the jury that the EMS personnel could be held liable for Cynthia's injuries only if they had been grossly negligent, which the court defined as conduct so reckless as to demonstrate a substantial lack, of concern for whether an injury resulted. That portion of the instruction was accurate. Jennings II, at 136, 521 N.W.2d 230. However, the court proceeded to illustrate the differences between unintentional acts, negligence, gross negligence, and intentional acts, by providing the following examples and explanations:
In general, physical acts by human beings have different legal significance, depending on the presence or absence of culpable mental state by the actor at the time of the doing of the act. For example, if someone lives in a highrise building, with a public sidewalk right beside the building, and deliberately drops a heavy chair on a person standing on the sidewalk below, without justification or excuse, and kills the victim, that would be murder, (as well as leading to a civil suit for damages for assault and battery).
If that same person, stubbed his toe, got mad, picked up the chair, and threw it across the room, through the window, falling onto the same victim with the same fatal results, this grossly negligent, or reckless, act would be manslaughter (as well as leading to a civil action for damages).
If that same person is carrying the heavy chair next to a balcony railing, without looking where he is going, knowing that there are childrens [sic] toys all over the floor, and steps on a toy and falls down, thereby dropping the chair over the railing, with the same fatal results to the fellow on the sidewalk, we have no crime, (though a civil suit for negligence would follow).
If lightening [sic] strikes the building and the person carrying the chair is shocked and falls against the window and drops the chair through the window onto the poor fellow below, with the same fatal results, we have no crime, and no civil suit, *129 but rather only an accident or an "act of God" for which no one is liable.
In general the law recognizes several different levels of culpability. The first of these, the lowest level of culpability ordinarily required for legal liability, is negligence. When I use the word negligence, I mean, the failure to do something which a reasonably careful person would do or the doing of something which a reasonably careful person would not do, under the circumstances you find existed in the case. It is for you to decide what a reasonably careful person would do or would not do under such a circumstance.
The next higher level of culpability is referred to as gross negligence. I instruct you that it is the law of this state that gross negligence means: conduct so reckless as to demonstrate a substantial lack of concern for whether an injury results. I will repeat, gross negligence means: conduct so reckless as to demonstrate a substantial lack of concern for whether an injury results. The term reckless means being aware of, and consciously disregarding, a substantial and unjustifiable risk of serious harm. The risk must be of such nature and degree that disregard thereof constitutes a gross deviation from the standard of conduct that a reasonable person would observe in the situation.
We are not bound by this Court's earlier decision in Jennings I, supra, that the trial court erred in instructing the jury with examples taken from the criminal law because the Supreme Court vacated this Court's opinion. Jennings II, supra at 150, 521 N.W.2d 230. However, the Supreme Court implicitly agreed with this Court's determination that the instructions were erroneous when it remanded the case to this Court "for further consideration of whether the errors were harmless." Id.
Therefore, we first consider the issue assigned to this Court by the Supreme Court in Jennings II, i.e., whether the instructional error was harmless. Jury instructions must be reviewed in their entirety, rather than on a piecemeal basis. Mull v. Equitable Life Assurance Society of the United States, 196 Mich.App. 411, 423, 493 N.W.2d 447 (1992), affd. 444 Mich. 508, 510 N.W.2d 184 (1994). Instructional error is harmless unless the error results "in such unfair prejudice to the complaining party that failure to vacate the jury verdict would be Inconsistent with substantial justice.'" Johnson v. Corbet, 423 Mich. 304, 326, 377 N.W.2d 713 (1985), quoting MCR 2.613FA].
Under MCR 2.516(D)(4), a trial court may give additional instructions concerning an area that was not covered in the standard jury instructions as long as these additional instructions accurately state the law and are applicable, concise, understandable, conversational, unslanted, and nonargumentative. Mull, supra at 422, 493 N.W.2d 447. If the instructions confused the jury to the extent that the parties' theories and the applicable law were not fairly and adequately presented to the jury, then a new trial must be granted. Mills v. White Castle Systems, Inc., 199 Mich.App. 588, 591, 502 N.W.2d 331 (1992).
The illustrations used and the inclusion of the definition of "reckless" did not fairly present the law to the jury and unfairly prejudiced plaintiff. The trial court instructed the jury with the correct definition of gross negligenceconduct so reckless as to demonstrate a substantial lack of concern for whether an injury results. Jennings II, at 136-137, 521 N.W.2d 230. However, the examples and the definition of "reckless" provided to the jury had the potential of misleading the jury with respect to plaintiffs burden of proof. First, the examples each involved affirmative conduct by the actor, in contrast to the failure to act that was thebasis of the complaint in this case. The example given for gross negligence, a person getting angry and throwing a chair over the balcony of a high-rise building, suggests a higher level of culpable conduct than is actually necessary for plaintiff to prevail.
The misleading nature of the examples included in the instructions was compounded by inclusion of the definition of "reckless."[4]
*130 By providing a definition of a term used in the definition of gross negligence, the court added an additional element to plaintiffs burden of proof. The correct definition of gross negligence indicates that plaintiff must prove conduct so reckless that the conduct shows a substantial lack of concern for whether an injury results. The definition of gross negligence does not require proof of the mental state of the actors. The focus is on conduct, and the jury is asked to determine whether the conduct indicates a substantial lack of concern whether an injury will result. However, by defining the term "reckless," the trial court indicated that plaintiff was required to prove that the EMS personnel were "aware of, and consciously disregard[ed] a substantial and unjustifiable risk of serious harm." This instruction suggests that plaintiff was required to prove the mental state of the EMS personnel, e.g., awareness of the risk and conscious disregard of the same. This unfairly added a subjective element to plaintiffs burden of proof. Furthermore, the definition of reckless given by the court required plaintiff to show a greater level of harm than that required by the definition of gross negligence. The latter refers to lack of concern whether "an injury" results. The definition of "reckless" provided by the court refers to disregarding a "substantial and unjustifiable risk of serious harm."
When one attempts to incorporate the court's definition of "reckless" into the "conduct so reckless ..." part of the definition of gross negligence, it is unclear what plaintiff was required to prove. Reckless conduct or a reckless mental state? Conduct showing a lack of concern about whether an injury will result or an actual awareness and disregarding of a risk of serious harm? The jury appears to have experienced confusion with regard to this issue, as indicated by the note it sent out during deliberations. The note queried, "Are we to prove gross negligence only?" The court directed the jury to reexamine the written copy of the instructions that was provided to it.[5]
Having reviewed the instructions in their entirety, we are persuaded that the instructional error is sufficiently prejudicial as to undermine confidence in the jury's verdict. Gross negligence is a critical issue in this case. A jury cannot fairly and intelligently decide whether defendants were grossly negligent when the jury is confused or misled regarding what constitutes gross negligence. The instructional error was not harmless, and consequently, plaintiff is entitled to a new trial with appropriate instruction so that the jury may fairly and intelligently determine whether defendants were grossly negligent. The trial court abused its discretion when it denied plaintiffs motion for a new trial. Goins v. Ford Motor Co., 131 Mich. App. 185, 195-198, 347 N.W.2d 184 (1983). The portion of the court's order denying plaintiffs motion for a new trial is reversed.
In Jennings II, the Supreme Court also directed us to consider whether the court's error in the dismissal of the defendant municipality was harmless. The Supreme Court specifically affirmed this Court's holding "that the dismissal of the municipality on grounds of governmental immunity was erroneous." Jennings II, at 150, 521 N.W.2d 230. Given our resolution of the instructional error issue, the dismissal of the municipality cannot be considered harmless error. The ruling of the trial court granting dismissal is, therefore, reversed.
Next, we consider defendants' cross appeal, which challenges the trial court's denial of their motion variously characterized as a summary disposition motion pursuant to MCR 2.116(C)(10) and as a motion for reconsideration of the motion for a directed verdict made at trial. The motion was filed after this Court's remand to the circuit court, which was to "allow plaintiff-appellant to move for a new trial in light of [Jennings II ]." In their motion, defendants argued that the evidence produced at trial showed that *131 Cynthia must have self-administered an intentional insulin overdose after the EMS personnel treated Cynthia the first time and left without transporting her to the hospital. Defendants contended that they have no legal duty to prevent self-inflicted injury and that public policy precludes lawsuits for failure to prevent self-inflicted injuries. The trial court denied defendants' motion and concluded that the case was properly submitted to the jury. On cross appeal, defendants argue that the trial court erred in not granting their motion. We affirm the portion of the court's order denying defendants' motion, but for a different reason.
Defendants' arguments were not properly before the circuit court following this Court's remand order and are not properly before this Court in this appeal following remand. The issues defendants seek to raise should have been raised first either before trial or at the time defendants moved for a directed verdict. Then, if defendants wanted to challenge the circuit court's ruling, the issues could have been raised by way of a cross appeal at the rime plaintiff first appealed the judgment. Defendants did not raise these arguments before the trial court before or during trial,[6] nor did they claim a cross appeal when this case first came before this Court in Jennings I. The Supreme Court's opinion indicates that the issues presented here were also not raised in defendants' cross appeal in Jennings II. The purpose of the Supreme Court's remand to this Court and this Court's remand to the circuit court was to provide an opportunity to assess whether the instructional error and dismissal of the municipal defendant were harmless, not to give defendants an opportunity to raise issues that they neglected to raise in the earlier proceedings. Because defendants failed to raise the issues before the circuit court before or at trial or in the original appeal, and because the motion was outside the scope of this Court's order remanding the case to the circuit court, the circuit court did not err in denying defendants' motion. See VanderWall v. Midkiff, 186 MicLApp. 191,196-202, 463 N.W.2d 219 (1990).
Reversed in part, affirmed in part, and remanded for a new trial. As the prevailing party, plaintiff may tax costs pursuant to MCR 7.219. We do not retain jurisdiction.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] Governmental tort liability act, M.C.L. § 691.1401 et seq.; M.S.A. § 3.996(101) et seq.
[2] Gibbard v. Cursan, 225 Mich. 311, 196 N.W. 398 (1923).
[3] The emergency medical services act applicable to this action was found at M.C.L. § 333.20701 et seq.; M.S.A. § 14.15(20701) et seq. See Jennings II, at 128, n. 1, 521 N.W.2d 230.
[4] Although plaintiff did not specifically object to this part of the instruction, we examine it as part of the context in which the objected-to instruction was given in order to determine whether the instructions as a whole fairly presented the applicable law to the jury.
[5] The lower court record includes the jury's copy of the instructions. On that copy, the phrase, "The term reckless means being aware of, and consciously disregarding" is underscored twice in pencil, presumably by a member of the jury.
[6] When defendants moved for a directed verdict, they argued that plaintiff had not established gross negligence by a preponderance of the evidence. Following the close of proofs, defendants renewed their motion and argued that if Cynthia overdosed after the EMT personnel left, there would be "no proximate cause, because it would not be reasonably foreseeable or natural and probable because [sic] not transporting that she should have overdosed." These arguments differ from those presented to the trial court following remand.
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22 Cal.App.2d 64 (1937)
MILDRED GILMORE, Appellant,
v.
EMSCO DERRICK & EQUIPMENT COMPANY (a Corporation) et al., Respondents.
Civ. No. 11453.
California Court of Appeals. Second Appellate District, Division Two.
July 19, 1937.
Irvin C. Louis and H. B. Pool for Appellant.
Swanwick, Donnelly & Proudfit and Tom W. Henderson for Respondents.
Wood, J.
Plaintiff appeals from a judgment denying her petition for an order directing the individual defendants as officers of defendant corporation to permit plaintiff to examine the share register of the corporation and make extracts therefrom.
Plaintiff purchased ten shares of stock of defendant corporation through a broker on the Los Angeles Stock Exchange. She thereupon made written demand upon defendants to be allowed to inspect the records of the corporation. She was furnished with a statement certified by the secretary of the corporation containing the names of the officers and directors, seven in number, and the amount of shares owned by each. She was not permitted to examine and make extracts from the share register, containing approximately one thousand names. Defendants by their answer allege that "plaintiff's sole purpose in prosecuting the within action is not to secure an examination of the corporate records of defendant Emsco Derrick & Equipment Company for any purpose reasonably related to her interests as a shareholder of said corporation, but for the purpose of procuring the names of the shareholders and other information concerning the corporation in order to carry out a plan designed to result in serious detriment to and harassment of said corporation". *66 The trial court found this allegation to be true. Plaintiff now contends that there is no substantial evidence to sustain this finding.
Plaintiff testified that there had been federal indictments against an eastern corporation in which the directors in defendant corporation were the same as the directors in that corporation, and in which there had been considerable difficulty regarding shareholders of record not being bona fide, that checks had been paid to them, and endorsed and given back to the men who were the major shareholders in this corporation. That she wanted to ascertain whether the record stockholders of defendant corporation are real stockholders, and whether dividends are being paid to bona fide holders of stock; that she had not been requested by any other party to obtain the information sought, had never investigated the corporation or its officers, had no client interested in them, had purchased the stock for herself for an investment and had bought it with her own money. When called as a witness for the defendant, plaintiff testified as follows: "Q. You said your occupation was that of an attorney? A. Yes. Q. How long have you been engaged in the practice of law? A. A little over a year. Q. Are you also connected with the J. N. Pyles National Detective Service? A. Yes, I am their attorney. Q. Are you not also an executive of that company? A. Yes. Q. What is your connection with the J. N. Pyles Detective Agency? A. I am their attorney, and, to a certain extent, act in an executive capacity when Mr. Pyles is out of the City, or engaged so that he cannot act. Q. Do you act as manager of the concern? A. No, I am not the manager. Q. Do you act as investigator for the concern? A. No." Plaintiff's testimony was not contradicted. The secretary of the corporation testified that he had refused permission to make the extracts because he wanted to protect the stockholders. He further testified: "Q. And, for that reason, you claim it does not concern her? A. That is one reason. Q. What other reasons have you? A. There is some ulterior motive back of it. Q. What has she said or done to lead you to that conclusion? A. Her actions all the way through. Q. What actions all the way through? A. They have all been stipulated here. Q. Tell us what she had done to lead you to believe that? A. Her whole environment. Q. What has she done to lead you to believe that? A. Well, she has been an investigator, and has been working for detective *67 agencies, according to her own testimony, throughout the years."
[1] By section 355 of the Civil Code a shareholder of a corporation is given the right to examine the share register of the corporation upon written demand "for a purpose reasonably related to his interests as a shareholder". The inspection includes the right to make extracts. It is manifest that plaintiff must be accorded the right to inspect the list of shareholders and make extracts therefrom unless it be shown that her demand was not for any purpose reasonably related to her interest as a shareholder. The trial court did not find that the demand of plaintiff for an inspection was connected with her employment as a detective or that she desired to obtain information in the course of the business of a detective or investigator. Plaintiff gave a reasonable motive for demanding the inspection of the list of shareholders. She was refused because suspicion was aroused in the mind of the corporation secretary, but this suspicion is not sufficient to sustain the finding of the trial court unless it is based upon adequate facts. The fact that plaintiff was an attorney for a detective agency and acted "to a certain extent in an executive capacity" during the absence of the manager, does not establish that the information was desired for an ulterior purpose in the absence of proof showing that the information was desired for use in the course of the business of the detective agency. The mere fact that a shareholder is connected with a detective agency does not of itself operate to nullify his rights of inspection accorded by law. Plaintiff's allegations showing that her purpose was reasonably related to her interests as a shareholder are amply supported by uncontradicted testimony. Defendant's contrary allegations are not supported by the evidence.
The judgment is reversed.
Crail, P. J., concurred.
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22 Cal.App.2d 198 (1937)
MAUDE STEWART, Respondent,
v.
LULU SHEARMAN, Appellant.
Civ. No. 1847.
California Court of Appeals. Fourth Appellate District.
July 27, 1937.
Osborn and Burum for Appellant.
W. C. Dorris and R. W. Henderson for Respondent.
Barnard, P. J.
The plaintiff brought this action to establish her right and quiet her title in and to one-half of a one-eighteenth interest in certain real property in Kern County, claimed to have been the community property of herself and her former husband Joseph A. Stewart, together with one-half of any proceeds received by the defendant who was the sister of Stewart. The findings and judgment were in favor of the plaintiff and the defendant has appealed.
The respondent married Joseph Stewart in 1913 and they lived together in Bakersfield until April, 1926, acquiring several pieces of community property. Some time in 1926 she went to Nevada and secured a divorce from him, the decree being entered on January 27, 1927. On November 10, 1926, they entered into a written agreement dividing between them certain named community property and each relinquishing any right or interest in or to any property which might thereafter be acquired by the other. No mention of the property in controversy was made in that agreement and the same did not purport to cover any property not listed therein. This property was not mentioned in the divorce proceeding although *200 the complaint alleged that there was no community property and the court so found. The decree made no reference to property rights. Stewart died in 1931, leaving a will in which this appellant was named as his sole legatee and devisee. In 1932 the whole of the estate was distributed to this appellant, this property not being mentioned, and the final decree included the usual omnibus clause distributing all property not known or discovered. On January 11, 1935, the respondent made written demand on the appellant for a conveyance of one-half of an undivided one-eighteenth interest in the property and that she account for all receipts therefrom. The demand was refused and this action followed.
The first and controlling question is whether or not Stewart had any interest in the real property in question. The matter arose out of the organization of a gun club. The appellant contends that several amounts paid by Stewart were in fact merely dues in this club, that he acquired no interest in the real property prior to the divorce, that he acquired merely a license or permission to hunt upon the land, that any possible right owned by him was personal property, that any claim of the respondent is barred by the terms of the decree of divorce and the property settlement, and further barred by her failure to appear and assert her rights in the probate proceedings. It is respondent's contention that she and her former husband possessed a community interest in this real property, that the same was not included in a property settlement agreement, and that upon the entry of the divorce decree they became tenants in common as to this interest in the property.
[1] We think the evidence, with the reasonable inferences therefrom, is sufficient to support the court's findings to the effect that Stewart, during the marriage and while the parties were living together, purchased an undivided one-eighteenth interest in this property; that he paid a part of the purchase price out of wages earned by him during such time; that the interest acquired by him was not a mere license to hunt upon the land; and that the interest acquired was a right to purchase, supported by a valuable consideration, which was recognized by the holders of the legal title who thereafter conveyed in conformity to their contract and obligation and to complete and carry out the agreement. A brief review of the evidence follows: *201
In 1924 one Brantley acquired title to the tract of land, a portion of which is here involved. He organized a gun club intending to have eighteen members, but only ten or twelve "went in". Each of these, as Brantley testified, "paid a down payment of $54.00 and they gave me two notes each of $73.00", the notes being payable in one and two years respectively. Stewart paid $54 toward the end of 1924 or early in 1925 and gave Brantley two notes for $73 each, one payable February 6, 1926, and the other February 6, 1927. He paid the first note when it was due and the second on February 12, 1927. Brantley wrote on the back of the second note "Feb. 12th, 1927 Paid in full. This pays in full for one eighteenth interest in the following described property (here follows description)". He signed this memorandum and redelivered the note to Stewart. In August, 1934, Brantley leased the property to an oil company. On January 4, 1935, Brantley and his wife conveyed a one-eighteenth interest in the property to the appellant as "sole devisee and legatee under the will of Joseph A. Stewart, deceased", the deed reciting "This deed is executed to carry out an unrecorded agreement made by the Grantors with the said Joseph A. Stewart in his lifetime" and that the conveyance was made to the grantee under authority of the decree of distribution entered in Stewart's estate. On January 28, 1935, the first returns from oil under the lease which Brantley had made was received by the appellant and monthly returns continued up to the date of the trial.
The respondent and another witness testified that just before the property settlement agreement was executed and delivered Stewart told the respondent that there was an assessment due on the gun club property and that he intended to let the property go. The appellant testified that shortly before the second note came due Stewart said to her "I think I will give up that membership because I haven't the money to pay it", that she replied "I wouldn't quit anything that I thought would give me pleasure, I think you deserve it and I will give you the money", and that she gave him the full amount of the note.
Brantley testified that he did not acquire the property prior to the organization of the gun club but that he "acquired it for the purpose of the organization"; that he thought he had eighteen members "lined up" but only about ten went in; that Stewart paid him $54 and gave him the two *202 notes which he later paid; that there was no written agreement prior to his delivery of the deed to the appellant except "what is on the back of that note", that there was no conversation between him and Stewart at the time the note was paid, or before that, about conveying the property to Stewart or about his interest in it; that he never executed any contract except the memorandum on the note and the deed later delivered to the appellant; that his wife did not sign any contract other than the deed; that thirteen people who originally started in the gun club made a "down payment" but only three, including Stewart, "paid in their money and consummated their transaction"; that toward the end of 1925 "we had a meeting one night up here and they passed a mosquito abatement around Bakersfield, where you couldn't have a gun club within a certain distance of Bakersfield and this was just outside so they decided they wouldn't go through with it, cost quite a lot of money to put up power line, there had to be power put in you know, so I told them if they didn't want to pay it they didn't have to, which the rest of them didn't except Stewart and two others, and I had the notes for 10 years and they never did pay them; however, Stewart paid his and Clyde George paid his; Sammy Olhmam paid his in a way, I had some notes of his and gave them back to him, and that is the three that paid the money"; that at that meeting the gun club was "practically abandoned"; that after talking about the additional expense and the danger of the mosquito district being extended he asked the men whether they wanted to bear that additional expense or drop the proposition; and that "they dropped it at the meeting". When asked when he told these parties that they could have an interest in the property itself Brantley replied: "Well, I didn't tell them after this--they struck oil out on that place, nobody considered it very seriously, these fellows paid their money and when they struck oil I gave them a deed for their part."
While the appellant lays great stress upon Brantley's testimony that nothing was said at any time about when title was to pass we think the evidence justifies the inference that at the meeting in 1925 the gun club part of the proposition was dropped by everyone, that most of those who had paid a down payment then dropped out completely, but that three of the parties, including Stewart, elected to go ahead and pay their notes. These further payments were for something and it *203 is quite apparent that they were not for dues and assessments in the gun club which had been abandoned. There is no evidence that Stewart or anyone else hunted on the property, or that the payments made by the three who continued to display an interest had anything to do with hunting privileges. The entire evidence supports the conclusion that under the original plan the down payments and the payments represented by notes were intended to pay for an interest in the property, and that in paying his notes Stewart acquired such an interest. While the agreement was informal in many respects the evidence supports the findings to the effect that Stewart acquired and exercised a right to purchase an interest in the property which was recognized by the vendors and confirmed by a subsequent conveyance. It follows that Stewart was the owner of an interest in this real property during the marriage, irrespective of the fact that the first written acknowledgment of his right was signed a few days after the decree of divorce was entered.
[2] The interest thus acquired by Stewart being community property and not having been disposed of by the property settlement agreement was not affected by the decree of divorce entered in Nevada, and became the property of the respondent and Stewart as tenants in common in equal shares. (Taylor v. Taylor, 192 Cal. 71 [218 P. 756, 51 A.L.R. 1074].) [3] The only part of the purchase price which remained to be paid was $73 and some interest. Stewart could not by making this payment deprive the respondent of her right, as a tenant in common, to share in the result of completing the purchase, unless she refused to contribute her share of the cost. She had been led to believe that the property was to be abandoned and so far as the record shows she had no knowledge of the real situation until shortly before this suit was filed. The purchase having been completed without her knowledge the conveyance received inured to her benefit under the usual rules, which are thus set forth in 7 Ruling Case Law, page 857:
"Cotenants stand in such confidential relation to one another in respect to the common property and the common title to it, that it would generally be inequitable to permit one, without the consent of the others, to buy in an outstanding adversary claim or title and assert it for his exclusive benefit, thereby to undermine the common title and injure and prejudice the interests of his cotenants. In such case *204 the purchasing tenant is regarded as holding the claim so purchased in trust for the benefit of all his cotenants, in proportion to their respective interests in the common property, who seasonably contribute their share of his necessary expenditures. This rule is said to be inflexible, without regard to the consideration paid, or the honesty of intent, for the reason that public policy requires it, not only as a shield to the parties represented but as a guard against temptation on the part of representatives. The utmost that can be demanded by one who purchases an outstanding title or lien is contribution from the others toward the expense of any purchase which releases the common interest from embarrassment."
The usual rule that a tenant in common cannot take advantage of any defect in the common title by purchasing an outstanding title or encumbrance and asserting it against his cotenant would especially apply here where all that remained to do was to pay a small balance on the purchase price. By completing the purchase Stewart obtained the right to a title subject to a trust in favor of his cotenant. (Burrow v. Carley, 210 Cal. 95 [290 P. 577].) The court, in its judgment, deducted one-half of the amount paid on the second note and one-half of the expense incurred by appellant in obtaining a conveyance from the amount found due to respondent out of royalties received by the appellant.
[4] Some suggestion is made that the respondent is estopped by the decree of distribution entered in the estate of Joseph A. Stewart from asserting any claim to a share in this property. The property was not mentioned in the probate proceedings which, in any event, would affect only Stewart's interest therein. The interest of respondent as a cotenant with Stewart was not involved in the probate proceedings and was in no way affected thereby.
The judgment is affirmed.
Marks, J., and Jennings, J., concurred.
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581 S.E.2d 306 (2003)
260 Ga. App. 274
PITTS
v.
The STATE.
No. A03A0552.
Court of Appeals of Georgia.
March 13, 2003.
*307 Robert L. Mack, Jr., Lithonia, for appellant.
Keith C. Martin, Solicitor-General, Janet Smith-Taylor, Asst. Solicitor-General, for appellee.
BLACKBURN, Presiding Judge.
Following a bench trial, Antoine K. Pitts appeals his conviction for disrupting a public school, contending that: (1) the evidence was insufficient to support the verdict and (2) the trial court erred by denying his motion in arrest of judgment in which he argued that the indictment against him was void.[1] For the reasons set forth below, we affirm.
1. Pitts contends that the evidence was insufficient to support the verdict. We disagree.
On appeal from a criminal conviction, the evidence must be viewed in the light most favorable to the verdict, and the defendant no longer enjoys the presumption of innocence; moreover, an appellate court does not weigh the evidence or determine witness credibility but only determines whether the evidence is sufficient under the standard of Jackson v. Virginia.[2] Conflicts in the testimony of the witnesses, including the State's witnesses, [are] a matter of credibility for the jury to resolve. As long as there is some competent evidence, even though contradicted, to support each fact necessary to make out the State's case, the jury's verdict will be upheld. The testimony of a single witness is generally sufficient to establish a fact.
(Footnote omitted.) Phagan v. State.[3]
Viewed in this light, the record shows that, on the morning of December 17, 2001, Pitts *308 and another student of North Clayton High School engaged in a fistfight just outside the front entrance of the school. Although classes had not yet begun, students were being dropped off to start the school day at that time, and the altercation between Pitts and the other student began to draw a large crowd of spectators. It took approximately four school administrators and a police officer to stop the fight. This evidence of Pitts' involvement in the altercation was sufficient to support his conviction for disruption of a public school pursuant to OCGA § 20-2-1181.
2. Pitts further contends that the trial court erred by denying his motion in arrest of judgment because the indictment brought against him was void. Again, we disagree.
The record shows that Pitts was indicted for "unlawfully disrupt[ing] and interfer[ing] with the operation of any public school [on December 17, 2001]." Two weeks after a verdict had been entered against him, Pitts filed a written motion in arrest of judgment, contending that the indictment was defective on its face because it failed to specifically state either the nature of Pitts' violation or the name of the public school where the violation occurred.
A motion to arrest judgment due to a defective indictment should be granted only where the indictment is absolutely void. In attacking an indictment after the verdict, every presumption and inference [are] in favor of the verdict. By failing to file a demurrer before trial, [the defendant] waived his right to a perfect indictment.
(Citations and punctuation omitted.) Bowman v. State.[4]
In this case, because we must construe every presumption and inference in favor of the verdict, we can infer that the indictment referred to the fistfight entered into by Pitts at North Clayton High School, the crime for which he was convicted. Dandy v. State.[5] Furthermore, contrary to Pitts' arguments, the indictment, which tracked the exact language of the actual statute he was convicted under, was not void. "The indictment adequately informed appellant of the charge he faced, and appellant could not admit all the allegations of the indictment and be innocent of the offense." Burden v. State.[6]
And, as noted earlier, our Supreme Court has previously ruled that Pitts waived all of the constitutionally based grounds in his motion in arrest of judgment.
Judgment affirmed.
ELLINGTON and PHIPPS, JJ., concur.
NOTES
[1] Pitts also argued that the statutory provision criminalizing disruption of a public school is unconstitutionally vague, both in a separate oral motion and in his motion for arrest of judgment. After transferring this case to the Supreme Court of Georgia under its constitutional question jurisdiction, the Supreme Court found that Pitts waived these constitutionally based arguments on appeal, stating: "[B]ecause the [constitutional] issue was not both raised and `distinctly passed on,' the appeal must be and hereby is returned to the Court of Appeals for a ruling on the other issues properly on appeal.
[2] Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).
[3] Phagan v. State, 243 Ga.App. 568, 569-570(2), 533 S.E.2d 757 (2000).
[4] Bowman v. State, 227 Ga.App. 598, 599(1), 490 S.E.2d 163 (1997).
[5] Dandy v. State, 253 Ga.App. 407, 408, 559 S.E.2d 150 (2002).
[6] Burden v. State, 187 Ga.App. 778, 779(2), 371 S.E.2d 410 (1988).
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21 Cal.App.2d 701 (1937)
ALMADEN VINEYARDS CORPORATION (a Corporation), Appellant,
v.
PAUL ARNERICH et al., Respondents.
Civ. No. 10495.
California Court of Appeals. First Appellate District, Division Two.
July 12, 1937.
Burnett & Burnett, John M. Burnett and David M. Burnett for Appellant.
Arthur G. Shoup and E. L. Maxwell for Respondents.
Sturtevant, J.
From a judgment denying it an injunction the plaintiff has appealed.
The trial court made findings in favor of the defendants. The plaintiff attacks some of the findings and some of the rulings on the exclusion of evidence. Before proceeding the following facts should be stated as forming the controversy between the parties. In March, 1844, a Mexican grant, San Juan Bautisto Rancho, was executed in favor of Jose Augustin Narvaez. That rancho lies in a westerly direction from San Jose and not far distant. Later a patent was issued to the grantee. To the patent was attached a map. Later the southwesterly part of the rancho became vested in Charles Le Franc. In the meantime the city of San Jose sold certain pueblo lands to Catherine Brown. Those lands are immediately west of the Le Franc property and are now owned by the defendant Eva M. Arnerich. Later Kooser Road was established. The course of the road was such that it took a course from north to south, crossing the boundary line between the properties of these parties at an acute angle. In 1886 a railway was laid out. That railway is now known as South Pacific Coast Railway and is operated by the Southern Pacific Company. The course of the railway was from the northwest toward the southeast, and it in turn crossed Kooser Road at an acute angle. As the railway approached Kooser Road it did not follow the boundary line between the ranches above mentioned.
In the early part of 1935, the defendant Eva M. Arnerich started in to lay pipes for conveying irrigation water. The pipe line was intended to be laid in part in Kooser Road within a portion of said road that is crossed by the railway *703 line and also in another portion of said road that is immediately west of the right of way of the railway company. Claiming the fee to both portions, this action was commenced to enjoin the acts of the defendant Eva M. Arnerich.
[1] The plaintiff states that if it is the owner of the fee of that portion of Kooser Road in controversy it is entitled to an injunction to prevent anyone from using the road for any purpose other than general road uses including an injunction to prevent the defendant Arnerich from laying water pipes in the road without the plaintiff's consent. (Gurnsey v. Northern California Power Co., 160 Cal. 699 [117 P. 906, 36 L.R.A. (N. S.) 185].) The defendants do not controvert the proposition of law as stated by the plaintiff, but they do contend that the plaintiff is not the owner of either portion of Kooser Road hereinabove specifically mentioned.
In its second point the plaintiff contends it is the owner of the fee of both of said portions of Kooser Road. The defendants reply that on conflicting evidence the trial court found that the plaintiff was not the owner of either of said portions. To that reply the plaintiff answered that the findings are not sustained by the evidence. In that connection the plaintiff asserts the findings are based on evidence introduced by the defendants as to the location of certain corners and lines and said evidence was incomplete and insufficient.
We will take up first that portion of the lands in dispute which is within Kooser Road but is not crossed by the right of way of the railway company and which lays west of the westerly line of the said right of way. As recited above, the plaintiff's title rests on the title of Le Franc. The title of the latter was bounded on the west by the boundary line of the grant to Narvaez. The question then arises as to the proper location of that boundary line. The defendants called Mr. McMillan, a licensed land surveyor, who testified that he ran the line and marked it on the ground. It fell within the right of way of the railway company throughout the whole course of the properties in dispute. In running the boundary line he commenced at NN18, the southwest corner of the Narvaez rancho. It is marked by a pipe standing in a creek. We do not understand that that monument is disputed at all. From NN18 he ran a straight line to NN19, the southwest corner of the Schofield tract. It is marked by a stake. He testified the residents and owners of property *704 in that neighborhood called it the corner. Plaintiff calls attention to the fact that its surveyor, Mr. Herrmann, set the stake above mentioned five years before and that McMillan was testifying from hearsay. There are several answers to that contention. It appears Herrmann set the stake as the southwest corner of the Schofield property. But it further appears the southwest corner of the Schofield property, as shown by the evidence of both parties, coincides with the northwest corner of the Le Franc property, and if so, McMillan made no error in locating his line. Moreover, there was the oral evidence of two or more witnesses confirming the identity of said corner. McMillan ran the line as straight, claiming he followed the calls of the patent to Narvaez. The plaintiff quotes the language of the patent and asserts the language does not describe a straight line. We have carefully read the description and we think it may not be said that it does not describe a straight line. The plaintiff complains because McMillan did not tie his survey into the bearings mentioned in the description contained in the patent. He was not asked to do so. Furthermore, the bearings mentioned in the patent were of such a nature that it cannot be assumed they necessarily appear on the ground at the present time. It follows that the trial court did not err in holding the plaintiff had no title to the lands above mentioned lying in Kooser Road west of the grant line.
[2] Before the railway was constructed Charles Le Franc, being then the owner, conveyed to A. E. Davis two separate parcels which were afterwards conveyed and are now parts of the right of way of the railway company. One parcel lies immediately north of Kooser Road and the other parcel immediately south of said road. The description of each parcel mentioned the road as a boundary thereof. The plaintiff contends that neither description covered any part or portion of Kooser Road. The defendants contend that when properly construed the legal effect of said descriptions was to extend the fee so conveyed to the middle of Kooser Road and that the two descriptions taken together conveyed the fee to the grantee Davis and his successors in interest. The defendants further call to our attention that since 1886 the railway company has been in possession of and has paid taxes on all of the lands in its right of way between the easterly boundary line thereof and the westerly boundary line. It is statutory that "A transfer of land, bounded by *705 a highway, passes the title of the person whose estate is transferred to the soil of the highway in front to the center thereof, unless a different intent appears from the grant." (Civ. Code, sec. 1112.) The plaintiff's predecessor in interest, Charles Le Franc, executed a grant, bargain and sale deed to A. E. Davis so describing the above-mentioned parcels. The plaintiff does not call our attention to any language contained in the grant deed, and we can find none, showing "a different intent." The grantee, A. E. Davis, conveyed the parcels to the railway company. It entered, constructed a railway, and since that date of nearly fifty years it, or its lessee, has operated the railway, paid all taxes levied or assessed on the land, and claimed to own the fee. The plaintiff has quoted no part of the record, and we find no parts, showing that it, or its predecessors in interest, has or have until very recently asserted any title to any part or portion of said lands. The plaintiff states in its brief the lands are not fenced. That statement is outside of the record and furthermore it is not conclusive. (Smith v. Southern Pac. R. R. Co., 1 Cal.2d 272, 275 [34 PaCal.2d 713].) The plaintiff asserts that the railway company has merely an easement. Its deed refutes the assertion. It owns the fee to the lands conveyed to A. E. Davis as his deed was a grant, bargain and sale conveyance of the lands conveyed. [3] Bearing in mind that this is an action in which the sole relief asked is the granting of an injunction, the plaintiff has not made a sufficient showing. In Willis v. Lauridson, 161 Cal. 106, at page 117 [118 P. 530], the court quoted with approval as follows: "To issue an injunction is the exercise of a delicate power, requiring great caution and sound discretion, and rarely, if ever, should be exercised in a doubtful case. 'The right must be clear, the injury impending and threatened, so as to be averted only by the protecting preventive process of injunction.' (St. Louis S. F. M. Co. v. Sanitary S. F. M. Co., 161 Fed. 725 [88 C.C.A. 585].)" This plaintiff made no such showing and the trial court did not err in denying it an injunction.
[4] When Mr. Frank Herrmann was testifying in rebuttal, in reply to questions propounded by the plaintiff he testified that his father established the business of Herrmann Brothers, civil engineers; that the firm consisted of his father, A. T. Herrmann, and his uncle, Charles Herrmann. The *706 business was established in 1886. Both the father and uncle were deceased and that the witness succeeded to the business; that he was in possession of the notes, field books, maps, etc., kept by the firm of Herrmann Brothers. From those records he produced field notes made by his father in 1870 when making a survey of the west line of Narvaez rancho. The survey, according to the field notes, was made at the request of Mr. Le Franc, Mrs. Catherine Brown, Mr. Schofield and Mr. Harwood, owners of lands bounded by said line. The plaintiff offered the notes in evidence. The trial court sustained the objection of the defendants. The witness then produced a map made at the same time by his father. The plaintiff offered the map in evidence. The defendants objected and the trial court sustained the objection. In the trial court the plaintiff stated its purpose was to show "that there must be, that there is, a bend in the line, regardless of what the government patent showed". In its brief the purpose of the offered evidence is said to be to establish as a fact that "the northwest corner of the original Le Franc tract is not in the southwesterly line of the rancho and also in the southwesterly line of the railway right of way". The ruling of the trial court was in no respect prejudicial error. If the evidence was offered for the purpose of showing a bend in the line in question, it was but cumulative of other evidence which the plaintiff introduced. If it was offered for the purpose of showing that the northwest corner of the Le Franc tract was not in the southwesterly line of the rancho and also in the southwesterly line of the railway right of way, then the evidence was in conflict with the other map exhibits introduced by the plaintiff. The plaintiff cites and relies on Morton v. Folger, 15 Cal. 275. That case does not seem to be authority in support of the plaintiff's position. The notes and maps involved in that case were those made by the surveyor who made the original survey for the government.
We find no error in the record. The judgment is affirmed.
Nourse, P. J., and Spence, J., concurred.
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464 So. 2d 587 (1985)
Patricia WOLACK, Appellant,
v.
STATE of Florida, Appellee.
No. 83-1822.
District Court of Appeal of Florida, Fourth District.
February 6, 1985.
Rehearing Denied March 27, 1985.
*588 Richard L. Jorandby, Public Defender, and Tatjana Ostapoff and Gary Caldwell, Asst. Public Defenders, for appellant.
Jim Smith, Atty. Gen., Tallahassee, and Sarah B. Mayer, Asst. Atty. Gen., West Palm Beach, for appellee.
PER CURIAM.
We affirm appellant's conviction and sentence. In doing so we reject appellant's claims of error in the trial court's disallowance of the testimony of a West Virginia police officer as to the reputation for truth and veracity of a state's witness. It appears that the officer's knowledge of the witness's reputation was gained solely through the officer's official position. We do not believe the trial court erred in ruling this to be an insufficient basis upon which to predicate reputation testimony. See Stripling v. State, 349 So. 2d 187 (Fla. 3d DCA 1977). In addition, we believe any potential error to be harmless in view of the fact that another West Virginia police officer, who had known the state's witness prior to becoming a police officer, testified extensively as to his negative opinion of the witness's truth and veracity and acknowledged that other police officers shared this opinion. We also reject appellant's claim of error in the trial court's refusal to give an instruction to the jury that mere presence at the scene of a crime is insufficient to prove guilt. In our view the import of such an instruction was well covered by the trial court's instruction on principals which clearly would not permit a finding of guilt predicated on a mere showing of presence at the scene. We have also considered the issue raised by appellant in her supplemental brief and we hold that the prosecutor's comment in opening statement about the absence of a missing person's report did not constitute an improper comment on the appellant's constitutional right to remain silent. Cf. Nelson v. State, 416 So. 2d 899 (Fla. 2d DCA 1982).
ANSTEAD, C.J., DELL, J., and GEIGER, DWIGHT L., Associate Judge, concur.
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477 So. 2d 378 (1985)
Lincoln TENG
v.
Hrishikesh SAHA.
84-317.
Supreme Court of Alabama.
October 4, 1985.
Raymond Uhrig, Huntsville, for appellant.
Frederick L. Fohrell and Roscoe Roberts, Jr. of Watts, Salmon, Roberts, Manning & Noojin, Huntsville, for appellee.
TORBERT, Chief Justice.
This appeal arises out of a grant of summary judgment in favor of defendant, Hrishikesh Saha, and against plaintiff, Lincoln Teng, in Teng's action for interference with an employment relationship. Several issues are raised on appeal, but we only need address the statute of limitations issue to decide the case.
Saha argues that Teng's action is barred by the one-year statute of limitations, Code 1975, § 6-2-39(5). Teng argues that the action is governed by the six-year statute of limitations, Code 1975, § 6-2-34(2). The resolution of this issue depends upon whether the wrongful act alleged gives rise to an action in trespass or trespass on the case. Sasser v. Dixon, 290 Ala. 17, 273 So. 2d 182 (1973). In Sparks v. McCreary, 156 Ala. 382, 47 So. 332 (1908), the Court *379 held that an action for wrongful interference with business relationships was in case. The Court reached that conclusion because the wrongful conduct of the defendant did not involve "actual or constructive assumption of possession [of the property of another] or force in any form [and] was, on the averments, purely consequential in the damnifying consequence alleged to have resulted therefrom." Id., 156 Ala. at 386, 47 So. at 334. Teng alleged that Saha contacted Teng's supervisors and attempted to have Teng fired. Saha's alleged wrongful conduct is analogous to the conduct of the defendant in Sparks. Therefore, the action is in case, and § 6-2-39(5) controls. Because the complaint was filed more than one year after the cause of action accrued, the action is time barred, and summary judgment was appropriate.
AFFIRMED.
MADDOX, FAULKNER, JONES, ALMON, SHORES, BEATTY and HOUSTON, JJ., concur.
ADAMS, J., dissents.
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421 A.2d 1307 (1980)
R. Kent STONEMAN, Commissioner
v.
VERGENNES UNION HIGH SCHOOL DISTRICT # 5 and Ferrisburg School District et al.
No. 169-80.
Supreme Court of Vermont.
September 11, 1980.
*1308 M. Jerome Diamond, Atty. Gen., Montpelier, and Geoffrey A. Yudien, Asst. Atty. Gen., Waterbury, for plaintiff.
Susan F. Eaton of Langrock, Sperry, Parker & Stahl, Middlebury, for defendants.
Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.
DALEY, Justice.
This is an appeal from the superior court's decision to grant summary judgment in favor of the plaintiff on defendants' counterclaim. Plaintiff, the Commissioner of the Department of Social and Rehabilitation Services (SRS), is the legal custodian of seven children who were placed in the Kingsland Bay Group Home, located in the defendant Ferrisburg School District. The Ferrisburg School District does not maintain a high school, and therefore it pays tuition to defendant Vergennes Union High School District # 5 (Vergennes School District) for the education of its resident children. 16 V.S.A. §§ 822, 824. Vergennes School District incurred tuition costs for Kingsland Bay children during fiscal years 1977 and 1978, for which it *1309 looked to Ferrisburg School District for payment. Ferrisburg, by vote of its school board, determined that four of the Kingsland Bay children were not residents of the Town of Ferrisburg, and it therefore refused to pay their tuition. In response, the Vergennes School District notified the Kingsland Bay Home that all seven of its children would be expelled from school in January, 1978.
Plaintiff sought a declaratory judgment and an injunction to bar the defendants from expelling the seven children, and defendants Vergennes School District and Ferrisburg School District counterclaimed to recover the tuition costs from SRS. Plaintiff's original claim has been dismissed by court order, and neither party challenges that dismissal on appeal. In regard to the counterclaim, the parties filed cross motions for summary judgment, supported by documents, admissions, answers to interrogatories, and affidavits. The superior court granted plaintiff's motion and denied defendants' motion. From this order, defendants appeal.
Defendants present three theories for recovery of the tuition costs from plaintiff SRS. First, defendants argue that plaintiff is required by 16 V.S.A. § 830 to pay for the tuition of these students who are under plaintiff's care. Second, defendants argue that, if § 830 is not construed to require such payments, then the unequal burden cast upon those communities which have group homes within their borders would violate the Proportional Contribution Clause of the Vermont Constitution. See Vt.Const. ch. I, art. 9. Third, defendants argue that plaintiff must pay for the tuition of these students to avoid unjust enrichment of the plaintiff at defendants' expense.
In response to defendants' claims, the plaintiff raises the "[o]nce venerated, recently vilified, and presently substantially limited" doctrine of sovereign immunity. Board of Trustees v. John K. Ruff, Inc., 278 Md. 580, 584, 366 A.2d 360, 362 (1976). Although the doctrine is limited in scope, see, e. g., 12 V.S.A. § 5601; 29 V.S.A. § 1403; Roman Catholic Diocese of Vermont, Inc. v. City of Winooski Housing Authority, 137 Vt. 517, 519-20, 408 A.2d 649, 650-51 (1979); Blake v. Betit, 129 Vt. 145, 148, 274 A.2d 481, 483 (1971); Marshall v. Town of Brattleboro, 121 Vt. 417, 421-25, 160 A.2d 762, 765-68 (1960), it is not dead, see, e. g., 12 V.S.A. § 5602; Roman Catholic Diocese of Vermont, Inc. v. City of Winooski Housing Authority, supra; Town of South Burlington v. American Fidelity Co., 125 Vt. 348, 350, 215 A.2d 508, 510 (1965); Marshall v. Town of Brattleboro, supra, 121 Vt. at 424, 160 A.2d at 767. We must determine, therefore, whether this is an appropriate case to apply it.
An action against the state cannot be maintained without the state's consent for injuries resulting from the exercise of essentially governmental functions, as opposed to proprietary functions. See, e. g., Roman Catholic Diocese of Vermont, Inc. v. City of Winooski Housing Authority, supra, 137 Vt. at 520, 408 A.2d at 651; Farmer v. Poultney School District, 113 Vt. 147, 149, 30 A.2d 89, 91 (1943). The state has consented to be liable for certain tort claims, 12 V.S.A. ch. 189, and for claims against which it has purchased liability insurance, 29 V.S.A. § 1403. The claims made here do not fall within either of these categories, and therefore if defendants seek recompense for essentially governmental acts, they cannot recover.
Recognizing that in the area of sovereign immunity "labels represent conclusions reached after evaluation of the essential factors, rather than helpful guides to classification," Roman Catholic Diocese of Vermont, Inc. v. City of Winooski Housing Authority, supra, we hold that the acts complained of are essentially governmental in character. Section 830 of Title 16 provides that SRS shall pay the tuition of students who are in its care, but that if there is an insufficient appropriation to cover tuition costs, "the per pupil payment shall be reduced uniformly and equitably." 16 V.S.A. § 830(a), (c). For the fiscal years in question, SRS submitted line item budget requests to fund § 830 tuition payments, as *1310 required by § 830(c). Each of these years, however, the legislature refused to appropriate any money to fund this section. Under these circumstances, the Commissioner was called upon to exercise the discretion vested in him by statute to determine the policies and administer the laws of the department. 33 V.S.A. § 2594. His construction of § 830 was a permissible exercise of these powers, and constituted an act of the sovereign. Accordingly, sovereign immunity extends at least to bar defendants' claim of unjust enrichment, and possibly to defendants' statutory claim.
Although it has been stated that "the courts will adjudge monetary claims founded upon statute, because the Legislature has inferentially indicated an intent to provide the sums needed to make good the statutory scheme," O'Neill v. State Highway Department, 50 N.J. 307, 316 n.1, 235 A.2d 1, 5 n.1 (1967), in this case such an inference is negated by the fact that the legislature denied funding. Where no appropriation has been made, no action for a money judgment can be maintained. Board of Trustees v. John K. Ruff, Inc., supra, 278 Md. at 590-91, 366 A.2d at 366; O'Neill v. State Highway Department, supra, 50 N.J. at 315, 235 A.2d at 5. Therefore, defendants' statutory claim must fail.
Although defendants have not sought a writ of mandamus, we note that this case is distinguishable from Blake v. Betit, supra. In Blake, we held that mandamus would lie against a state official for failure to perform the purely ministerial act of complying with a direct and unequivocal order of the Board of Social Welfare. In response to the official's argument that he was protected by sovereign immunity, we stated that "[i]f the [official] has refused to act in accordance with the duties enjoined upon him by the statutory laws of the State, then mandamus may properly issue." Id. at 148, 274 A.2d at 483. We reaffirm that statement now, but it does not aid the defendants here. First, mandamus would not lie in this case because there is no clear right to relief, and because the duties involved are not purely ministerial. Dowlings, Inc. v. Mayo, 137 Vt. 548, 551-52, 409 A.2d 588, 590 (1979). Second, the Commissioner has not refused to act in accordance with his duties, but has in fact performed the functions required of him by 33 V.S.A. § 2594. Third, as noted above, the absence of an appropriation makes the relief requested highly impracticable.
Finally, defendants raise a constitutional challenge to the combined effect of the statutory scheme if SRS is not required by § 830 to pay the tuition of these students. This claim is not barred by sovereign immunity because of the well-recognized exception to the doctrine for acts performed under an unconstitutional statute. Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 690, 69 S.Ct. 1457, 1461, 93 L.Ed. 1628 (1949).
Section 824(a) of Title 16 requires each school district to pay the tuition of its residents. Under the law as it stood when this action arose, "[t]he residence of a pupil in the care and custody of the department of social and rehabilitation services [was] where the pupil is placed." 1975, No. 48, § 10 (former 16 V.S.A. § 1075). The effect of these provisions is to require Ferrisburg School District to pay Vergennes School District for the tuition of these wards of the state. Ferrisburg claims that this violates the Proportional Contribution Clause of the Vermont Constitution, Vt.Const. ch. I, art. 9, because it casts a heavier fiscal burden on those communities with group homes than those without, and this burden on the few benefits the public generally.
The test of the Proportional Contribution Clause is the rational basis test of the Equal Protection Clause of the United States Constitution. Pabst v. Commissioner of Taxes, 136 Vt. 126, 131 n.2 & 132-33, 388 A.2d 1181, 1184 n.2 & 1184-85 (1978); In re Estate of Eddy, 135 Vt. 468, 472-73, 380 A.2d 530, 534 (1977). Although the scheme of former § 1075 was not, as the legislature recognized when it amended it in 1978, No. 194 (Adj.Sess.), § 1, the best possible arrangement, it is not for that reason unconstitutional. It is plain common sense to *1311 equate abode with residence, and such a definition is neither arbitrary nor unreasonable. The fact that this definition cast the expense of educating these children on the community where they were placed is no more unfair than the fact that locating the group home in Ferrisburg cast the burden of providing fire protection for the home on Ferrisburg. The burden is reasonably related to the purpose of treating these students as normal residents of the community.
Judgment affirmed.
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583 S.E.2d 909 (2003)
261 Ga. App. 886
The STATE
v.
PERRY.
No. A03A1020.
Court of Appeals of Georgia.
June 24, 2003.
*910 Spencer Lawton, Jr., Solicitor-General, Ian R. Heap, Jr., Asst. Solicitor-General, for appellant.
Charles W. Bell, Savannah, for appellee.
ELLINGTON, Judge.
This matter arose out of a fight on school grounds. The State filed an accusation in the State Court of Chatham County charging Ronald Perry with affray, OCGA § 16-11-32; disrupting a public school, OCGA § 20-2-1181; and criminal trespass, OCGA § 16-7-21.
At his arraignment on May 22, 2002, Perry received a copy of the accusation and a list of witnesses and requested a bench trial. Before Perry entered a plea, his counsel informed the court that the school system wanted the charges dismissed and presented a letter from an assistant principal at the school where the fight took place. According to Perry's counsel, the school system reasoned that since Perry had no prior criminal record, intended to enter the military, and had participated in a five-hour hearing before the school board dealing with the matter, he should not be punished further. Over the State's objections, the trial court sua sponte dismissed the charges, stating, "I'm going to dismiss it. I think it's gone far enough."
The State contends that the trial court abused its discretion in dismissing the accusation. According to the State, the reluctance of the school system and the other party to the fight to pursue the charges was not an appropriate grounds for dismissal. For the reasons stated below, we agree and reverse.
"In the district attorney's role as an administrator of justice, he or she has broad discretion in making decisions prior to trial about [whom] to prosecute, what charges to bring, and which sentence to seek." (Footnotes omitted.) State v. Wooten, 273 Ga. 529, 531(2), 543 S.E.2d 721 (2001).[1] "The state has both the duty and the right to protect the security of its citizens by prosecuting crime. Georgia Constitution of 1983, Art. I, § I, Par. II; OCGA § 17-1-2. Because the purpose of criminal law is to serve the public functions of deterrence, rehabilitation and retribution, it is the state, not the victim, that has an interest in criminal prosecutions." (Citation omitted.) Ambles v. State, 259 Ga. 406, 407(1), 383 S.E.2d 555 (1989).[2]
Given the State's interest in criminal prosecution, the State argues that dismissal of *911 the accusation was improper under State v. Colquitt, 147 Ga.App. 627, 249 S.E.2d 680 (1978). In State v. Colquitt, the parties appeared for the sole purpose of hearing the defendant's plea. Id. at 628, 249 S.E.2d 680. Upon being informed that the alleged victim did not want to press charges, however, the trial court ordered the case dead docketed. Id. The trial court said that it was overburdened and did not have time to hear a case involving a reluctant complaining witness, especially when the State was not ready to proceed immediately. Id. This Court held that the trial court had abused its discretion in placing the case on the dead docket because "the power to control the proceeding of the court is subject to the proviso that in so doing a judge does not take away or abridge any right of a party under the law." (Citation omitted.) Id. at 629, 249 S.E.2d 680
In this case, we find the trial court abridged the State's right to prosecute an accused. The record reveals no legal basis for the dismissal.[3] The only reason for the arraignment was for Perry to be advised of the charges against him, enter a plea, and have his case set for trial should he plead not guilty. The arraignment was neither a motion hearing nor a trial, and the State was not required to put on witnesses or produce evidence. By dismissing the case over the State's objection, the trial court deprived the State of its right to present its case against Perry, and thus abused its discretion. State v. Colquitt, 147 Ga.App. at 629, 249 S.E.2d 680.
Judgment reversed.
BLACKBURN, P. J., and PHIPPS, J., concur.
NOTES
[1] See also Grimsley v. State, 233 Ga.App. 781, 782, 505 S.E.2d 522 (1998) ("[T]he decision of whether to prosecute and what charges to file are decisions that rest in the prosecutor's discretion.") (citation omitted); Shire v. State, 225 Ga. App. 306, 308(1), 483 S.E.2d 694 (1997) ("From the beginning of our criminal justice system prosecutors have exercised the power of prosecutorial discretion in deciding which defendants to prosecute.") (citations and punctuation omitted).
[2] See also Bartlett v. Caldwell, 265 Ga. 52, 452 S.E.2d 744 (1995) (a private citizen does not have a judicially cognizable interest in the prosecution or nonprosecution of another).
[3] Although the record was sparse, the primary reason for dismissal seemed to be the trial judge's personal opinion that the case should not be prosecuted. During the hearing, the court made several statements such as, "Sometimes you've got to exercise a little common sense," "Everybody doesn't need to be prosecuted," and "You don't think this case has gone far enough [after] [e]ight hours of hearings?" To the extent these statements reflect a concern that Perry had already been punished in an administrative tribunal, we note that administrative sanctions constitute punishment for double jeopardy purposes only if they are punitive rather than remedial. Simile v. State, 259 Ga.App. 106, 576 S.E.2d 83 (2003). There is no indication in the record as to what, if any, sanctions were imposed on Perry in the school board hearing. Therefore, the trial court was not authorized on this record to find the prosecution was barred on the basis of double jeopardy.
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421 A.2d 51 (1980)
Hilton HAFFORD
v.
Guy E. KELLY, Jr. and Lumbermens Mutual Casualty Co.
Supreme Judicial Court of Maine.
Argued September 15, 1980.
Decided October 16, 1980.
*52 Rudolph T. Pelletier (orally), Madawaska, for plaintiff.
Stevens, Engels & Bishop, Jonathan W. Sprague (orally), Albert M. Stevens, Presque Isle, for defendant.
Before McKUSICK, C. J., and WERNICK, GODFREY, NICHOLS, GLASSMAN and ROBERTS, JJ.
GODFREY, Justice.
Employee Hilton Hafford appeals from a pro forma judgment of the Superior Court which affirmed a Workers' Compensation Commission decree granting a petition for review of incapacity brought by Hafford's employer, Guy E. Kelly, Jr., and ordering compensation for sixty percent partial incapacity.
In November of 1977, while employed as a woodsman in Allagash, Maine, Hafford suffered a work-related injury consisting of an acute lumbar strain and sprain. For one week following the injury Hafford received compensation for total incapacity.
On June 22, 1978, Hafford filed with the Industrial Accident Commission a petition for further compensation, claiming that he was then totally or partially incapacitated. Before any hearings were held on that petition, Hafford and his employer entered into an agreement stating that beginning April 20, 1978, Hafford would be compensated for "total incapacity." That agreement was executed on June 28, 1978, and was approved by the Workers' Compensation Commission on September 29, 1978. Because of the agreement, the Commission dismissed Hafford's petition for further compensation on October 5, 1978.
On June 13, 1979, Kelly filed with the Workers' Compensation Commission a petition for review of Hafford's incapacity. During the hearings on the petition for review, Hafford testified that when requested by the Maine Forest Service he had assisted in fighting forest fires by running a water pump, refueling trucks, or walking the fire lines. That work was only occasional. Hafford had no skills or training for employment other than work in the woods and felt that pain in his back and legs would preclude him from doing such work in the future. He had not looked for steady employment during the six months before the hearings.
Dr. John F. McGinn, a specialist in orthopedic surgery who had treated Hafford for his back pain, also testified at the hearings. Dr. McGinn first examined Hafford on May 9, 1978, after Hafford had become disabled but before the compensation agreement was executed. He examined him on three other occasions after execution of the agreement, namely, on July 11, August 22 and September 19, 1978. Dr. McGinn stated that Mr. Hafford's physical condition did *53 not change during the time he treated him. When the Commissioner inquired whether Hafford's capacity for work had increased since April of 1978, Dr. McGinn replied by saying that Hafford could now perform light to moderate work. However, Dr. McGinn testified further that his opinion concerning Hafford's capacity for work had been formed in May of 1978 and had not changed since then. In short, Dr. McGinn indicated that Hafford had partial capacity for work before and after the compensation agreement was executed and that his capacity had not changed.
On January 4, 1980, the Commissioner issued his decree concerning the employer's petition for review of incapacity. The Commissioner concluded that Hafford's capacity for work had increased since April 20, 1978, the date specified in the compensation agreement as the time when his total incapacity commenced. In the Commissioner's view, Hafford's capacity for work had increased to forty percent of his pre-accident ability. Accordingly, the Commissioner ordered that Hafford be paid compensation for sixty percent partial incapacity.
Hafford contends that the Commissioner made an error of law when he compared Hafford's current capacity for work with his capacity on April 20, 1978, the agreed-on date when his disability commenced, instead of comparing it with his capacity on June 28, 1978, the date when the compensation agreement was executed. Employer Kelly contends that the compensation agreement must be construed as a contract between employee and employer. Since the agreement stated that Hafford's total incapacity commenced on April 20, 1978, Kelly asserts that the Commissioner properly used that date in determining whether Hafford's work capacity had increased.
Where total incapacity has been established through a Commission-approved compensation agreement, on a petition for review of incapacity the employer has the burden of showing that the employee's incapacity has diminished since the time the agreement was executed. Hamilton v. Dexter Shoe Co., Me., 402 A.2d 854, 855-56 (1979); Nelson v. Town of East Millinocket, Me., 402 A.2d 466, 468 (1979); VanHorn v. Hillcrest Foods, Inc., Me., 392 A.2d 52, 54 (1978); Dufault v. Midland-Ross of Canada, Ltd., Me., 380 A.2d 200, 204 (1977). Provided the agreement is later approved by the Workers' Compensation Commission, the extent of the employee's incapacity and the compensability of his injury become conclusively established when the agreement is executed. Once the agreement is approved it has the force of a final adjudication from the date of execution. Dufault v. Midland-Ross of Canada, Ltd., supra, at 203-06. "Only changes in circumstances occurring after the . . . agreement count in support of making a change in compensation payments." Id. at 204. By restricting the scope of a review proceeding to changes occurring after the agreement, this Court seeks "to insure that a petition for review of incapacity can never serve as a tool for prying open matters already settled." Nelson v. Town of East Millinocket, supra, at 468. The Commissioner clearly made an error of law in using a date earlier than the time the agreement was executed as the point of comparison in determining whether Hafford's work capacity had increased.
This Court's reference in Dufault to construing compensation agreements as contracts does not affect our decision. Principles governing the interpretation of contracts serve only to illuminate what matters the agreement purported to settle. Dufault v. Midland-Ross of Canada, Ltd., supra, at 205. See also Robbins v. Bates Fabrics, Inc., Me., 412 A.2d 374, 380 (1980). Such principles do not alter the force of the approved agreement as a virtual judgment. In this case, it was determined, in effect, by the compensation agreement that Hafford was totally incapacitated at the signing of the agreement on June 28, 1978. Hence, on review of incapacity, the employer was required to show a change in Hafford's disability after that date. That was not done.
Normally, we would remand the case with a direction to the Commissioner to apply to the record the legal principles *54 announced in this opinion. In the instant case, however, such action is unnecessary. The only comparative medical testimony produced before the Commissioner was that of Dr. McGinn, and the effect of his testimony was to show that neither Hafford's physical condition nor his capacity for work had changed since the compensation agreement was executed. Accordingly, we must remand the case with an order directing the Commissioner to reinstate Hafford's compensation for total incapacity.
The entry is:
Appeal sustained.
Judgment vacated.
It is ordered that employee Hafford be restored to compensation for total incapacity pursuant to the compensation agreement executed on June 28, 1978.
It is further ordered that employer Kelly pay to employee Hafford $550 for his counsel fees plus his reasonable costs of this appeal.
All concurring.
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280 Pa. Superior Ct. 235 (1980)
421 A.2d 699
COMMONWEALTH of Pennsylvania
v.
Ronald MAXWELL, Appellant.
Superior Court of Pennsylvania.
Argued December 4, 1979.
Filed August 29, 1980.
*236 Allen H. Tollen, Chester, for appellant.
Vram Nedurian, Jr., Assistant District Attorney, Media, for Commonwealth, appellee.
Before SPAETH, CAVANAUGH and O'KICKI, JJ.[*]
SPAETH, Judge:
Appellant was tried before a jury on two counts of rape, two counts of simple assault, one count of unlawful restraint, and one count of involuntary deviate sexual intercourse. The jury found him guilty on one of the two counts of rape, one of the two counts of simple assault, and the one count of unlawful restraint; it acquitted him of the other charges. Post-verdict motions were denied and appellant was sentenced to total concurrent sentences of three to six years imprisonment. On this appeal he argues (1) that the evidence was insufficient to support his convictions; (2) that the lower court erred in refusing to order a new panel of *237 jurors following a comment made by one of the panel members; (3) that the lower court erred in refusing to order lie detector tests; and (4) that the sentences were excessive.[1]
1
The victim testified as follows. On March 20, 1978, while at her home in Toby Farms, she answered a telephone call from appellant. Appellant told her that he was conducting a survey concerning household products, and she agreed to answer some questions over the telephone. He also invited her to a products demonstration that he said he was holding on March 22 at the Howard Johnson's Restaurant in Chester. She agreed to attend, and on March 22 took the bus to the restaurant. Appellant met her there but told her that there would not be a demonstration because too few people had come. When she left the restaurant to wait for the bus, appellant offered her a ride home in his automobile, stating that the next bus would not come for an hour. She accepted his offer and left with him in his automobile. When he drove in a direction away from where she lived, she asked to be let out of the automobile. Appellant screamed at her, shoved her down under the dashboard, and put his foot on top of her back. She was frightened; appellant was much larger than the victim, and he threatened to hurt her baby, who was at home with the victim's sister. Appellant drove to a liquor store and went inside, telling the victim to remain in the automobile or he would hurt her baby. Before she could make up her mind whether or not to attempt to escape, appellant returned to the automobile with a bottle of liquor. He drove away, holding her down with his foot. He stopped at a telephone booth in a relatively deserted area so that the victim could call her husband. Appellant directed her to say that everything was all right. She did so and he then took her to his home in Folcroft, forced her to enter, and once inside forced her to commit oral and vaginal intercourse with him. When they left his home, appellant *238 again pushed her beneath the dashboard. She said that she wanted to go home, but he took her to a tavern. He promised her that he would take her home if she kissed the bartender. She did so and they left but appellant still refused to take her home and instead drove to a spot near the Tinicum marshes, punched her, and forced her to submit again to sexual intercourse. After this he drove her to a spot near her home and let her out of the automobile. She observed the license number of the automobile and reported the incident to the police.[2]
Besides extensively cross-examining the victim as to why she did not escape or notify someone of her predicament when she had a chance at the liquor store, the telephone booth, and the tavern, appellant testified in his own defense, as follows. He did not deny that he engaged in sexual activities with the victim, but maintained that she consented to and initiated the activities. He said the victim called him on March 20 by mistake, but that instead of hanging up their telephones, they talked to each other and decided to rendezvous on March 22. She asked appellant to meet her in his automobile at a store near her home. He did, and together they drove to the liquor store and then to the back door of his home. He testified that she entered voluntarily and that once inside she consented to, and voluntarily engaged in, the sexual activities. Afterwards, he took the victim to a tavern. While there she flirted with the bartender and kissed him. They left the tavern but the victim did not want to go home until appellant had had intercourse with her again. He drove to a spot near the Tinicum *239 marshes and there at her request had intercourse with her. He then drove her to a spot near her home and she got out of the automobile. She was very upset because it was so late and she was worried that her husband would discover her infidelity.
Appellant's testimony was supported in part by one of his neighbors, who testified that on the day in question she saw the victim enter appellant's home with appellant, and that the victim did not appear to have been forced to enter. Also, the bartender testified that after the victim entered the tavern she grabbed him, kissed him, and handed him a note with her name and telephone number on it.
The jury's verdicts may be summarized as finding appellant guilty only of the incident alleged to have occurred near the Tinicum marshes; the jury acquitted appellant of the charges arising out of the incident alleged to have occurred earlier in the day, in appellant's home in Folcroft.
In testing appellant's claim that the evidence was insufficient to support his convictions, we first accept as true all the evidence upon which the finder of fact could properly have reached its verdict, and then, after giving the Commonwealth the benefit of all reasonable inferences arising from that evidence, we ask whether the evidence and the inferences arising from it are sufficient in law to prove beyond a reasonable doubt that the defendant is guilty of the crime or crimes of which he has been convicted. Commonwealth v. Steward, 263 Pa.Super. 191, 197, 397 A.2d 812, 815-16 (1979); Commonwealth v. Madison, 263 Pa.Super. 206, 397 A.2d 818 (1979).
When these principles are applied here, it is apparent that the evidence was amply sufficient to support appellant's convictions, if the victim's testimony concerning the Tinicum incident was believed. Appellant's main argument, therefore, is that this testimony should not have been believed, especially since the jury returned verdicts of not guilty on the Folcroft charges.
Appellant's emphasis on the not guilty verdicts is misplaced. Any inconsistency between the guilty and not *240 guilty verdicts is more apparent than real. The Tinicum and Folcroft incidents were distinct not only as to time but also place, and the evidence concerning each differed. No reason appears why the jury could not be convinced beyond a reasonable doubt that the Tinicum incident had occurred, but find itself with some doubt about the Folcroft incident. Apparently the jury believed the testimony offered by the victim concerning the Tinicum incident and disbelieved that offered by appellant. It is settled that "[w]here the evidence is conflicting the question of the credibility of witnesses is solely for the jury . . . ." Commonwealth v. Rebovich, 267 Pa.Super. 254, 260, 406 A.2d 791, 794 (1979). See Commonwealth v. Zapata, 447 Pa. 322, 290 A.2d 114 (1972); Commonwealth v. Johnson, 263 Pa.Super. 512, 398 A.2d 694 (1979). The fact that the verdicts may be interpreted to reflect the jury's disbelief of, or doubt about, some of the victim's testimony concerning the Folcroft incident does not mean that the jury could not believe the victim's testimony concerning the Tinicum incident. The jury was not required to find all of her testimony either worthy or unworthy of disbelief; it was entitled to believe all, part, or none of the testimony. Commonwealth v. Pitts, 486 Pa. 212, 404 A.2d 1305 (1979); Commonwealth v. Smith, 484 Pa. 71, 398 A.2d 948 (1979).
In any event, even if we were to regard the verdicts as inconsistent, that would not constitute a ground for reversal. Inconsistent verdicts are permitted in criminal cases, provided that the evidence is sufficient to support the charges upon which the defendant was convicted. Commonwealth v. Carter, 444 Pa. 405, 282 A.2d 375 (1971); Commonwealth v. Glendening, 262 Pa.Super. 357, 396 A.2d 793 (1979); Commonwealth v. Love, 248 Pa.Super. 387, 375 A.2d 151 (1977); Commonwealth v. Parotto, 189 Pa.Super. 415, 150 A.2d 396 (1959).
2
During the initial stages of jury selection, when general questions were being asked, one member of the panel *241 stated that she belonged to Women Organized Against Rape. She was excused, but appellant argues that her statement had such a prejudicial impact on the other members of the panel that the lower court erred in refusing his motion to order a new panel.
This argument is without merit. The prospective juror's statement contained no specific comment about the accused, his credibility or character, the merits of the case, or any possible defenses. At most the statement indicated that there was an organization against the crime of rape and that she was a member. Appellant has demonstrated no prejudice, and we are unable to accept his contention that we should infer prejudice from the mere mention of the organization. It seems probable that at least some of the members of the panel already knew that the organization existed, and yet this prior knowledge would not be held sufficient to disqualify them. The fact that the prospective juror stated that she was a member of the organization adds nothing. In support of his argument appellant cites only the Supreme Court's decisions in Commonwealth v. Harkins, 459 Pa. 196, 328 A.2d 156 (1974), and Commonwealth v. Brado, 470 Pa. 306, 368 A.2d 643 (1977), but both of these decisions are inapposite, for in both prejudice was shown. In Harkins, a panel member stated that the accused had stolen his automobile, and in Brado, several panel members were permitted to sit as jurors although they admitted to having read a newspaper article and a cartoon that criticized in very strong terms the very defense the defendant planned to offer.
3
Nor is there any merit in appellant's argument that the lower court erred in refusing to grant his pre-trial motion that the court order him and the victim to submit to lie detector tests, with the results of the tests to be admitted in evidence at trial. In Commonwealth v. Kemp, 270 Pa.Super. 7, 410 A.2d 870 (1979), Justice O'BRIEN, speaking for a panel of this court, set forth the following brief review of the law of the Commonwealth concerning lie detector tests:
*242 It is well settled that the law in Pennsylvania is that reference to a lie detector test or the result thereof which raises inferences concerning the guilt or innocence of a defendant is inadmissible. Commonwealth v. Camm, 443 Pa. 253, 277 A.2d 325 (1971), cert. den. 405 U.S. 1046, 92 S.Ct. 1320, 31 L.Ed.2d 589 (1972); Commonwealth v. Saunders, 386 Pa. 149, 125 A.2d 442 (1956). "Polygraph examinations have not attained acceptance as a reliable means of ascertaining truth or deception." Commonwealth v. Cunningham, 471 Pa. 577, 370 A.2d 1172 (1977), (dissenting opinion by Roberts, J.); Commonwealth v. Brooks, 454 Pa. 75, 309 A.3d 732 (1973) (opinion by O'Brien, J., joined by Pomeroy, J.).
Consequently, the prosecution is forbidden to attempt to rehabilitate a witness who has been impeached by a prior inconsistent statement by introducing evidence that the witness had taken a lie detector test. Commonwealth v. Johnson, 441 Pa. 237, 272 A.2d 467 (1971). Neither may defendant introduce the results of such a test, Commonwealth v. Brooks, supra, (opinion of O'Brien, J., joined by Pomeroy, J.); see, Commonwealth v. Talley, 456 Pa. 574, 318 A.2d 922 (1974) (opinion of O'Brien, J.), or evidence that he was willing to take such a test, Commonwealth v. Saunders, supra.
Id., 270 Pa.Super. at 11, 410 A.3d at 871.
4
Eight days after the lower court imposed the sentences, appellant, pursuant to Pa.R.Crim.P., Rule 1410, filed a motion to modify the sentences. In his motion appellant contended that the lower court had failed to state the reasons for the sentences on the record as required by Commonwealth v. Riggins, 474 Pa. 115, 377 A.2d 140 (1977), see Commonwealth v. Young, 272 Pa.Super. 82, 414 A.2d 679 (1979), and that the sentences were excessive. The lower court took no action on the motion.
It is settled that the imposition of a proper sentence is a matter vested in the sound discretion of the sentencing judge. Commonwealth v. Valentin, 259 Pa.Super. 496, 393 *243 A.2d 935 (1978). In exercising this discretion, however, the judge must rely on full and accurate information and must state on the record the reasons for the sentences imposed. Commonwealth v. Riggins, supra; Commonwealth v. Wicks, 265 Pa.Super. 305, 401 A.2d 1223 (1979). This statement of reasons must show that in imposing sentence, the judge attached weight to the factors set forth in the statutory guidelines for sentencing, and carefully considered the facts concerning the circumstances of the offense and the character of the defendant. Commonwealth v. Wicks, supra. If the sentencing judge fails to state the reasons for the sentences on the record, we will vacate the sentences and remand for resentencing. See Commonwealth v. Young, supra; Commonwealth v. Wicks, supra.
In imposing the sentences in the present case, the lower court failed to state the reasons for the sentences. Because of this failure it violated the rule set forth in Commonwealth v. Riggins, supra. Moreover, without a statement of the reasons for the sentences we cannot effectively treat appellant's further claim that the sentences were excessive.
Appellant's convictions are affirmed, but the sentences are vacated and the case is remanded for resentencing.
NOTES
[*] President Judge JOSEPH O'KICKI of the Court of Common Pleas of Cambria County, Pennsylvania, is sitting by designation.
[1] Appellant also argues that the lower court erred in refusing to grant his pretrial motions with respect to what he alleges were improper duplicative complaints. This argument is without merit and requires no discussion.
[2] The several counts on which appellant was tried were as follows: appellant was charged with rape, assault, unlawful restraint, and involuntary deviate sexual intercourse in connection with the incident alleged to have occurred at his home in Folcroft during the day, and with rape, assault, and unlawful restraint in connection with the incident alleged to have occurred that evening near the Tinicum marshes. Just before the trial was to begin, however, the trial judge concluded that the two unlawful restraint charges covered one continuing offense, and that the second count was therefore unnecessary and duplicative. Thus, one count of unlawful restraint was dropped and appellant tried only on a single count, which covered his activities both in Folcroft and near the Tinicum marshes.
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421 A.2d 1315 (1980)
Leon WHEELER
v.
DEPARTMENT OF EMPLOYMENT SECURITY.
No. 178-79.
Supreme Court of Vermont.
September 16, 1980.
James M. Libby, Jr., Vermont Legal Aid, Inc., Montpelier, for plaintiff.
Brian R. Lyford and Peter J. Monte of Young & Monte, Northfield, for Northfield Wood Products, Inc.
Brooke Pearson and Matthew R. Gould, Montpelier, for Department.
Before DALEY, LARROW, BILLINGS and HILL, JJ., and SMITH, J. (Ret.), Specially Assigned.
*1316 HILL, Justice.
From a decision by the Vermont Employment Security Board (Board) in favor of claimant, the employer appeals. We affirm.
The claims examiner disqualified claimant for unemployment compensation benefits, having found that he was discharged by his last employing unit for work-related misconduct. 21 V.S.A. § 1344. This ruling was upheld by the appeals referee. Claimant appealed to the Board, which, after hearings, made findings of fact and conclusions resulting in a reversal.
The Board found, without objection, that claimant had been employed for three and one-half years by the Northfield Wood Products Co., Inc. (employer). During that time, he received several verbal warnings and a three day suspension for activities related to his work. On the day of his discharge, claimant was receiving strips of walnut being cut on a ripsaw by a co-worker. Claimant's foreman had set the saw so that it would cut the stock in question to certain dimensions. After a few pieces had been cut, claimant told the foreman that the stock was too large, but the foreman gave orders to continue cutting. Claimant was discharged at the end of that day for cutting a quantity of the stock too large.
The employer claims first that the findings and evidence do not support the Board's conclusions and second that the Board failed to make proper findings of fact and conclusions thereon and did not provide appellant with proper notice of its findings, conclusions, ruling of law and decision pursuant to 21 V.S.A. § 1349.
In finding that the employer had not satisfied its burden of establishing grounds for disqualification for unemployment compensation benefits, the Board wrote: "[T]he employer has not shown that the conduct of the claimant amounted to a substantial disregard, either willful or culpably negligent, of the employer's business interests which constitutes disqualifying misconduct. Further, the prior warnings given by the employer to the claimant were in no way related to his alleged final infraction. Consequently, they may not be used as a basis for saying that the claimant was or should have been on notice that his actions (on the day of his firing) could lead to his discharge."
A finding of misconduct must be supported by evidence of substantial disregard of the employer's interests in order to find disqualification for unemployment benefits. 21 V.S.A. § 1344(2), construed in In re Therrien, 132 Vt. 535, 537, 325 A.2d 357, 358 (1974); In re Gray, 127 Vt. 303, 305-06, 248 A.2d 693, 695 (1968). Concerning proof of the requisite support, this Court has noted: "Findings are sufficient if they dispose of the issues presented and make a clear statement of the trier's decision and the basis upon which that decision was made." Frost v. Department of Employment Security, 135 Vt. 39, 40, 370 A.2d 203, 204 (1977). The burden is on the excepting party to show reversible error. Crawford v. State Highway Board, 130 Vt. 18, 25, 285 A.2d 760, 764-65 (1971). Construing the record in a manner most favorable to the Board's conclusions, id. at 25, 285 A.2d at 764, we find that the appellant has not met its burden. While adverse effect upon the employer may be grounds for discharge, see In re Therrien, supra, 132 Vt. at 537, 325 A.2d at 358, it is not necessarily sufficient to support disqualification for unemployment benefits.
Appellant also claims that a reversal of the Board's decision is required because certain conclusions in its opinion were not supported by express findings as required by 21 V.S.A. § 1349. We agree that the Board was lax in delineating specific findings in support of various conclusions reached in its decision. However, the mere fact that a finding of fact is actually a conclusion of law concerning the issue to be decided is a harmless error if the finding is sustained by other facts sufficient to support the conclusion. LaFountain v. Vermont Employment Security Board, 133 Vt. *1317 42, 45, 330 A.2d 468, 470 (1974). The findings cited by claimant, relating to the value and quantity of the materials allegedly spoiled and the normally accepted tolerances in variations, are secondary to the decision. The ultimate findings relating to the issue of substantive disregard of the employer's interests were supported by the record made by the Board and justified the conclusions reached.
The order of the Employment Security Board is affirmed.
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17 Cal.Rptr.3d 467 (2004)
121 Cal.App.4th 773
LA JOLLA COVE MOTEL AND HOTEL APARTMENTS, INC., Petitioner,
v.
The SUPERIOR COURT of San Diego County, Respondent;
Helen H. Jackman, as Trustee, etc., et al., Real Parties in Interest.
No. D043922.
Court of Appeal, Fourth District, Division One.
August 16, 2004.
Review Denied November 10, 2004.[*]
*468 Sparber Rudolph Annen, Richard J. Annen and Todd R. Gabriel, San Diego, for Petitioner.
No appearance for Respondent.
*469 Mazzarella, Dunwoody & Caldarelli, Steven A. Micheli, Michael D. Fabiano, San Diego; Soden & Steinberger, Stephen R. Soden and Jason W. Coberly for Real Parties in Interest.
NARES, J.
In this case we are presented with the issue of whether it is appropriate under the California State Bar Rules of Professional Conduct, rule 2-100[1] for attorneys to contact directors for a represented corporation where the directors' separate counsel consents to the contact, but counsel for the corporation does not. We conclude that under the facts of this case, such contact is not barred by rule 2-100. We further conclude that even if there were a violation of rule 2-100, the court was correct not to order the disqualification of the offending attorneys as there is no evidence that they obtained any confidential information that could give their clients an unfair advantage or impact upon the fairness of the trial or integrity of the judicial system.
This action involves a complaint for dissolution of a corporation, the petitioner La Jolla Cove Motel and Hotel Apartments, Inc. (La Jolla Cove), in which the real party in interest Helen H. Jackman (Jackman), as trustee for the Helen H. Jackman Trust, owns a minority (one-third) interest, and of which her son Lawrence Jackman, Jr. (Lawrence Jackman) was formerly the president (collectively the Jackmans). La Jolla Cove brought a motion to disqualify two members of the law firm representing the Jackmans, Steven Micheli and Michael Fabiano, on the ground that they had had improper ex parte contact with two directors of La Jolla Cove who had been elected to the board by Jackman. In support of the motion, La Jolla Cove pointed to two declarations from the directors that the Jackmans had submitted in support of their application for appointment of a receiver for La Jolla Cove. La Jolla Cove asserted that the Jackmans' counsel's contacts violated rule 2-100.
The court denied La Jolla Cove's motion, finding that (1) assuming counsel made the allegedly improper contacts, there was no evidence that they obtained confidential attorney-client communications; and (2) disqualification was not warranted even if rule 2-100 was violated where there was no showing of disclosure of confidential communications, an unfair advantage having been obtained, or impact upon the fairness of the trial or integrity of the judicial system.
La Jolla Cove filed this petition for writ of mandate, seeking to overturn the court's ruling on the grounds that (1) counsel violated rule 2-100's absolute prohibition against ex parte contacts with active directors of a corporation; and (2) the court should have disqualified attorneys Micheli and Fabiano because of their violation of section 2-100. The petition is denied.
FACTUAL AND PROCEDURAL BACKGROUND
A. Nature of Dispute
La Jolla Cove is a family business, in which Jackman owns a minority one-third interest. The other two-thirds interest is owned by one of Jackman's siblings and the two children of another sibling. Jackman and the other family members are each entitled to vote their one-third interest to appoint two persons to La Jolla Cove's board of directors. Lawrence *470 Jackman was formerly the president of La Jolla Cove and general manager of two hotels owned by La Jolla Cove. Several disputes have arisen among the family members, resulting in three civil actions being filed. In one action, La Jolla Cove sought to recover monies that Lawrence Jackman allegedly improperly took from La Jolla Cove. In another, Lawrence Jackman filed a derivative action against the majority shareholders/directors of La Jolla Cove for their allegedly improper actions in running the corporation. In this action, the Jackmans seek a dissolution of La Jolla Cove, appointment of a receiver and an accounting. In their complaint, the Jackmans alleged that the family members with a controlling two-thirds interest in La Jolla Cove have improperly excluded them and the two directors they appointed to represent their interests, Behram Baxter and Tom Durisoe, from any role in the company. The Jackmans also alleged that under control of the other family members, the hotel properties La Jolla Cove owns had been mismanaged and deteriorated to such an extent that La Jolla Cove was in danger of financial collapse.
B. Alleged Improper Attorney Contacts
After attorney Micheli began his representation of the Jackmans, he sent a letter to La Jolla Cove's attorney, Richard J. Annen, discussing the parties' disputes concerning the running of that entity and a related partnership. In that letter, Micheli stated, "In light of the fact that you have indicated in your letter that you represent the corporation and the partnership, you have not indicated that you represent the individuals, and it would be clearly a conflict of interest for you to represent the entities as well as one side of the disputing factions of the entities, I am forwarding a copy of this letter to some of the other family members. If the other family members are represented by counsel, I would appreciate it if they could contact me so that I could talk to their counsel." Micheli sent a copy of the letter to the controlling family members and directors of La Jolla Cove. Annen objected to Micheli sending the letter to La Jolla Cove directors, calling that action "ethically questionable," and told Micheli that the directors had advised him to tell Micheli not to contact them directly. Micheli responded in a letter that he believed it was proper to contact the directors because Annen only represented the corporation, not the individual directors. Annen in turn sent a letter to Micheli advising him that any further attempt to contact any officers or directors of La Jolla Cove would be considered a violation of rule 2-100.
Thereafter, Lawrence Jackman sent a letter to Krista Baroudi, president and chief executive officer of La Jolla Cove, concerning possible settlement offers. Annen accused Micheli of directing Lawrence Jackman to send the letter. Micheli responded by denying that he had directed Lawrence Jackman to send the letter and questioned Annen's ability to represent individual officers and directors given the dispute among the parties concerning the operation of La Jolla Cove.
After they filed their complaint, the Jackmans brought an ex parte application for appointment of a receiver. In support of the application, counsel for the Jackmans submitted declarations from the Jackmans' representatives on the board of directors of La Jolla Cove, Durisoe and Baxter. In both declarations, they explained that they were elected as board members by a vote of shares owned by the Jackmans. Their declarations discussed the alleged mismanagement of the hotel properties owned by La Jolla Cove, and shareholder and directors meetings. They *471 asserted that improper agreements were made by the majority board members to relieve non-Jackman family members of liability for using corporate assets and that the majority on the board refused to allow them to participate in the running of La Jolla Cove.
C. Motion To Disqualify
La Jolla Cove brought a motion to disqualify the Jackmans' attorneys Micheli and Fabiano, asserting that they had engaged in improper contacts with La Jolla Cove directors and officers without the consent of La Jolla Cove's attorney, in violation of rule 2-100. La Jolla Cove asserted that the Jackmans' attorneys could not contact any board members of that entity, including ones they elected to the board, because the corporation was represented by counsel. As evidence of a violation of rule 2-100, La Jolla Cove pointed to the declarations of Durisoe and Baxter. While La Jolla Cove did not base its motion upon the earlier letters by Micheli and Lawrence Jackman, they pointed to those as evidence that improper contacts would continue if Micheli and Fabiano were not disqualified.
The Jackmans opposed the motion to disqualify, arguing that (1) Lawrence Jackman obtained the declarations of Durisoe and Baxter on his own without direction of counsel; (2) Durisoe and Baxter were not represented by La Jolla Cove's counsel within the meaning of rule 2-100; (3) Durisoe and Baxter were represented by separate counsel who did not object to the Jackmans' use of their declarations; (4) La Jolla Cove had not provided any evidence that any privileged communications were disclosed by Durisoe and Baxter to Fabiano or Micheli; (5) there was no continuing effect of any allegedly improper contact; and (6) disqualification would be inequitable.
Micheli filed a declaration in support of the opposition, stating that Lawrence Jackman delivered the declarations of Durisoe and Baxter and Micheli had his secretary prepare the caption pages. He also stated that he never had any contact with Durisoe or Baxter concerning their declarations, and he had only spoken with Baxter once at a mediation, where they only introduced themselves. He had only spoken with Durisoe briefly at that mediation and at a meeting where he discussed representation of Durisoe's wife. Micheli also stated that he spoke with counsel for Baxter and Durisoe and counsel did not object to him using their declarations in support of the motion for appointment of a receiver. Fabiano also filed a declaration, wherein he stated that that he did not have any contact with Durisoe or Baxter concerning their declarations. The only time he met either Baxter or Durisoe was at a mediation. Lawrence Jackman filed a declaration in opposition to the motion to disqualify, stating that he obtained the declarations of Baxter and Durisoe, he wrote them himself, he had no input from Micheli or Fabiano, and he obtained signatures on the declarations from Durisoe and Baxter. The Jackmans also submitted deposition testimony from Baxter, wherein he denied ever meeting or being contacted by Micheli or Fabiano, and where he stated he had only met Micheli at a mediation.
La Jolla Cove filed reply papers wherein it asserted that it was not believable that Durisoe and Baxter's declarations were obtained without direction from Micheli and/or Fabiano. La Jolla Cove also claimed that as active directors, Durisoe and Baxter were deemed to be represented by La Jolla Cove's attorneys and could not be contacted for any purpose. Counsel for La Jolla Cove denied that Durisoe or Baxter was excluded from management of La Jolla Cove, stating in a declaration that *472 since their election to the board, they had "attended and participated in regularly scheduled Board of Director meetings" and had voted on "a variety of topics." Attorney Annen also stated in that declaration that Durisoe and Baxter, as directors of La Jolla Cove, had received "confidential/attorney-client privileged case status reports relating to litigation concerning La Jolla Cove and [Lawrence Jackman]."[2]
D. Court's Ruling
In February 2004 the court issued its order denying La Jolla Cove's motion to disqualify attorneys Micheli and Fabiano. In doing so, the court found that "[r]ule 2-100 establishes the rule that opposing counsel may not contact presently employed officers, directors or managing agents without the permission of corporate counsel, or the permission of separate counsel in cases where the officer, director or managing agent is represented by personal counsel." The court further found that "[a]ssuming, for the sake of argument, that plaintiff's counsel contacted directors Durisoe and Baxter (as opposed to contact by Mr. Jackman which is not prohibited by Rule 2-100) without the permission of their personal counsel, there is no evidence that plaintiffs obtained confidential attorney client communications during these meetings.... It is questionable whether the drastic measure of disqualification is ever warranted by showing only a violation of rule 2-100, without an additional showing that the violation led to the disclosure of confidential communications protected by the attorney client privilege, or created an unfair advantage, or impacted the fairness of the trial or the integrity of the judicial system."
La Jolla Cove filed a petition seeking to overturn the court's ruling. We issued an order to show cause why the petition should not be granted.
E. Motion To Dismiss Writ
After we issued an order to show cause in this matter, the Jackmans filed a motion to dismiss the petition as moot. They asserted that because attorneys Micheli and Fabiano had substituted out as their counsel of record in this matter, the appeal was moot as the relief requested by La Jolla Cove, disqualification of Micheli and Fabiano, could no longer be granted. La Jolla Cove opposed the motion to dismiss, arguing that the matter was not moot as Micheli and Fabiano might still work on the case behind the scenes and because they represented the Jackmans in two other actions involving the same parties. They also asserted that even if the appeal was technically moot, this court should nevertheless exercise its discretion to hear it on the merits because the issues were likely to recur among the parties and the appeal posed an issue of public interest that was likely to recur.
DISCUSSION
I. Mootness
An appeal will be dismissed if, by reason of events, it has become moot and impossible for the court to render effective judgment for a party. (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.) As the Court of Appeal stated in Wilson v. L.A. County Civil Service Com. (1952) 112 Cal.App.2d *473 450, 453, 246 P.2d 688, "`although a case may originally present an existing controversy, if before decision it has, through act of the parties or other cause, occurring after the commencement of the action, lost that essential character, it becomes a moot case or question which will not be considered by the court.'" However, notwithstanding the fact that a case has been rendered moot by intervening events, we retain the discretion to review such an appeal on the merits where the appeal poses an issue of broad public interest that is likely to recur. (In re William M. (1970) 3 Cal.3d 16, 23, 89 Cal.Rptr. 33, 473 P.2d 737.)
Here, this case has been rendered technically moot because, as attorneys Micheli and Fabiano no longer represent the Jackmans in this action, we cannot order their disqualification. However, we will nevertheless exercise our discretion to resolve the matter on the merits because the appeal raises an issue of public interest that is likely to recur: whether counsel may contact a director for an opposing corporation upon permission of the director's counsel or only upon consent of the corporation's counsel.
II. Motion To Disqualify
A. Standard Of Review
We review the court's decision to disqualify the Jackmans' counsel under the abuse of discretion standard. (Nalian Truck Lines, Inc. v. Nakano Warehouse & Transport Corp. (1992) 6 Cal.App.4th 1256, 1261, 8 Cal.Rptr.2d 467.) This discretion is "`subject to the limitations of the legal principles governing the subject of its action, and subject to reversal on appeal where no reasonable basis for the action is shown. [Citation.]' [Citation.]" (Ibid.)
B. Analysis
1. Was the consent of corporate counsel required to contact the directors?
Recently, in Snider v. Superior Court (2003) 113 Cal.App.4th 1187, 7 Cal.Rptr.3d 119 (Snider), we explained that it was important to have a bright-line test to determine the ethical boundaries of an attorney's contact with opposing parties. "`[O]therwise, an attorney would be uncertain whether the rules had been violated until ... he or she is disqualified. Unclear rules risk blunting an advocate's zealous representation of a client.'" (Id. at pp. 1197-1198, 7 Cal.Rptr.3d 119, quoting Nalian Truck Lines, Inc. v. Nakano Warehouse & Transport Corp., supra, 6 Cal.App.4th at p. 1264, 8 Cal.Rptr.2d 467.) In Snider, we examined whether a former employee's counsel violated rule 2-100, which prohibits an attorney from communicating with an officer, director, or managing agent of a corporation represented by counsel about the subject of the representation without the consent of the other lawyer. (Snider, supra, 113 Cal.App.4th at p. 1209, 7 Cal.Rptr.3d 119.) In that case, we were presented with the issue of whether counsel for an employee sued by his former employer violated rule 2-100(B)(1) by conducting an ex parte interview with a sales manager and a production department supervisor who worked for the employer. (Snider, supra, at p. 1209, 7 Cal.Rptr.3d 119.) We held in Snider that because there was no evidence that the two interviewed employees were managing agents of their corporate employer, there was no violation of rule 2-100 and the lower court erred in disqualifying counsel.
Here, we are presented with a related issue. The issue we are presented with is whether an attorney may contact a director for an opposing corporation when that director's separate counsel gives the *474 attorney permission, but the corporation's counsel has not. Resolution of this issue requires an examination of the relevant ethical rules and cases interpreting their terms.
Rule 2-100 provides in part:
"(A) While representing a client, a member shall not communicate directly or indirectly about the subject of the representation with a party the member knows to be represented by another lawyer in the matter, unless the member has the consent of the other lawyer. [¶] (B) For purposes of this rule, a `party' includes: [¶] (1) An officer, director, or managing agent of a corporation or association, and a partner or managing agent of a partnership; or [¶] (2) An association member or an employee of an association, corporation, or partnership, if the subject of the communication is any act or omission of such person in connection with the matter which may be binding upon or imputed to the organization for purposes of civil or criminal liability or whose statement may constitute an admission on the part of the organization." (Italics added.)
American Bar Association (ABA) Model Rules of Professional Conduct, rule 4.2 (Model Rule 4.2) contains a similar proscription against unauthorized contacts with represented persons or entities, unless counsel consents:
"In representing a client, a lawyer shall not communicate about the subject matter of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order." (Italics added.)
Further, comment 7 to ABA Model Rule 4.2 provides that, in the case of a represented corporation, "If a constituent of the organization is represented in the matter by his or her own counsel, the consent by that counsel to a communication will be sufficient for purposes of this [r]ule."[3]
Thus, although directors such as Durisoe and Baxter ordinarily would be deemed represented members of the corporation that may not be contacted, rule 2-100 carves out an exception where the represented party's separate counsel consents to the contact. Comment 7 to Model Rule 4.2 is even more specific, providing that if members of a corporation such as Durisoe and Baxter are represented by separate counsel, the permission of that counsel, as opposed to corporate counsel, is sufficient to comply with the rule. From the texts of rule 2-100 and Model Rule 4.2, as further explained by comment 7 to Model Rule 4.2, the answer to the issue posed by this petition would appear clear: Because counsel for the Jackmans obtained the permission of Durisoe and Baxter's separate counsel to use their declarations, there was no improper contact with a represented party.
However, La Jolla Cove asserts that notwithstanding Durisoe and Baxter's representation by separate counsel in this litigation and separate counsels' consent to the alleged contacts, as active directors of the corporation, who are potentially privy to confidential communications, the Jackmans' counsel was absolutely prohibited from contacting them without permission from corporate counsel. We conclude that given that this litigation is brought by minority shareholders seeking a dissolution of their corporation, Durisoe and Baxter's role as directors is to represent those *475 minority shareholders' interests in the corporation, and as Durisoe and Baxter are adverse to the corporation with regard to the subject of this litigation, rule 2-100 does not prohibit the alleged contact as Durisoe and Baxter's separate counsel consented.
In representing a corporation, an attorney's client is the corporate entity, not individual shareholders or directors, and the individual shareholders or directors cannot presume that corporate counsel is protecting their interests. (Meehan v. Hopps (1956) 144 Cal.App.2d 284, 293, 301 P.2d 10; Skarbrevik v. Cohen, England & Whitfield (1991) 231 Cal.App.3d 692, 705, 282 Cal.Rptr. 627 [corporate attorney owed no duty to minority shareholder in arranging elimination of preemptive rights to allow majority shareholders to increase their ownership]; Friedman, Cal. Practice Guide: Corporations (The Rutter Group 2004) ¶ 6:3, p. 6-2.) In this regard, rule 3-600 provides in part:
"(A) In representing an organization, a member shall conform his or her representation to the concept that the client is the organization itself, acting through its highest authorized officer, employee, body, or constituent overseeing the particular engagement. [¶] (D) In dealing with an organization's directors, officers, employees, members, shareholders, or other constituents, a member shall explain the identity of the client for whom the member acts, whenever it is or becomes apparent that the organization's interests are or may become adverse to those of the constituent(s) with whom the member is dealing. The member shall not mislead such a constituent into believing that the constituent may communicate confidential information to the member in a way that will not be used in the organization's interest if that is or becomes adverse to the constituent. [¶] ... [¶] (E) A member representing an organization may also represent any of its directors, officers, employees, members, shareholders, or other constituents, subject to the provisions of rule 3-310. If the organization's consent to the dual representation is required by rule 3-310, the consent shall be given by an appropriate constituent of the organization other than the individual or constituent who is to be represented, or by the shareholder(s) or organization members." (Italics added.)
Conflicts of interest between a corporation and its officers, directors and shareholders are particularly problematic for corporate counsel where, as here, the corporation is a closely held one, with few shareholders. (Friedman, Cal. Practice Guide: Corporations, supra, ¶ 6:3.1, pp. 6-2 to 6-3.) Corporate counsel may develop a fiduciary relationship with individual shareholders or directors. However, even in that situation, the attorney's ultimate loyalty is to the corporation, not individual shareholders, officers or directors. (Ibid.) Thus, where an adversarial setting presents itself, pitting the corporation against one or more of its officers, directors or shareholders, corporate counsel may still represent the corporation against those individuals, even though he or she may have received confidential information about them in the course of representing the corporation. (Ibid.; Meehan v. Hopps, supra, 144 Cal.App.2d at p. 293, 301 P.2d 10.)[4]
Further, once a conflict has arisen between a corporation and one or more of its officers, directors or shareholders, corporate *476 counsel may not simultaneously represent the corporation and the adverse officer, director or shareholder. In this regard, rule 3-310(c) provides as follows:
"A member shall not, without the informed written consent of each client: [¶] (1) Accept representation of more than one client in a matter in which the interests of the clients potentially conflict; or [¶] (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict; or [¶] (3) Represent a client in a matter and at the same time in a separate matter accept as a client a person or entity whose interest in the first matter is adverse to the client in the first matter."
Thus, where a shareholder has filed an action questioning its management or the actions of individual officers or directors, such as in a shareholder derivative or the instant dissolution action, corporate counsel cannot represent both the corporation and the officers, directors or shareholders with which the corporation has a conflict of interest. (Forrest v. Baeza (1997) 58 Cal.App.4th 65, 74-75, 67 Cal. Rptr.2d 857; Friedman, Cal. Practice Guide: Corporations, supra, ¶ 6:612, p. 6-131; 1 Witkin, Cal Procedure, supra, Attorneys, § 139, p. 182.)[5]
Likewise, in this case it is undisputed that an actual conflict has arisen between the Jackmans and La Jolla Cove, its majority shareholders, and their representative on the board of directors. La Jolla Cove has sued Lawrence Jackman, alleging he improperly took monies from the corporation. The Jackmans in turn have sued La Jolla Cove twice, once in a shareholder derivative action, and in this action seeking dissolution of the corporation. In these actions the Jackmans allege various improprieties by the majority shareholders/directors, including excluding them and their representatives on the board of directors from any role in managing the corporation.
Likewise Durisoe and Baxter are adverse to La Jolla Cove. They were elected by the Jackmans to represent their interests as minority shareholders. They both allege that the majority has engaged in improper actions, negligently maintained the hotel properties La Jolla Cove owns, and that they have been "frozen out" of the management of the corporation. They have both retained separate counsel to represent them in these disputes.
La Jolla Cove attempts to argue that Durisoe and Baxter are not really adverse as their only role is as directors, not shareholders, and thus their only loyalty is to the corporation. However, this ignores the fact that they were elected to the board by the Jackmans and that they allege that the representatives of the majority shareholders have engaged in improper transactions and have excluded them from any role in overseeing the corporation. In fact, La Jolla Cove submitted no declaration from the majority shareholders or *477 board members denying the veracity of Durisoe and Baxter's declarations.
Under the circumstances, because counsel for La Jolla Cove's duties lie with the entity, not its directors, and an actual conflict has arisen between La Jolla Cove and the minority representatives Durisoe and Baxter, La Jolla Cove's counsel cannot be deemed to be their counsel. In fact, such a representation would be forbidden under ethical rules. (Rule 3-600.) Therefore, to comply with the provisions of rule 2-100, the Jackmans' counsel need only have sought the permission of these directors' separate counsel.
Indeed, it would create an anomalous result if counsel for the Jackmans, in representing them in a dissolution action against the corporation, could not, because the corporation forbade it, contact the directors his clients appointed to the corporation's board. This sort of attempt by a corporation to create an automatic representation of a director, without an actual attorney-client relationship, thereby shielding him or her from informal investigation or discovery, is contrary to attorney ethical rules. "[I]t is clear that not all corporate employees are necessarily encompassed within the attorney-client privilege, just as rule 2-100 does not bar contact with all corporate employees. For example, it is possible in any given case that a corporate officer or director covered by rule 2-100 may not be privy to information protected by the attorney-client privilege, while a lower level employee who is not shielded from contact under rule 2-100 may be in possession of substantial privileged information. However, this does not enable corporate counsel to automatically assert the privilege as to every corporate employee and on that basis enjoin opposing counsel from any and all contact with employees not covered by rule 2-100." (Triple A Machine Shop, Inc. v. State of California (1989) 213 Cal.App.3d 131, 143, 261 Cal.Rptr. 493; see also ABA Formal Ethics Opns., formal opn. No. 95-396 (1995) [general counsel cannot assert blanket representation of all corporate employees]; Terra International, Inc. v. Mississippi Chemical Corporation (N.D.Iowa 1996) 913 F.Supp. 1306, 1317["[A]n employer cannot unilaterally create or impose representation of employees by corporate counsel. . . . `[A]utomatic representation' . . . would . . . impede the course of investigation leading to . . . the filing of a lawsuit"].)
La Jolla Cove asserts that because active directors of corporations like Durisoe and Baxter are intimately involved in the running of the company and may be privy to confidential communications concerning the litigation and divulge them to opposing counsel, an absolute bar should exist as to ex parte communications. This contention is unavailing.
It is true that in the ordinary case a director's interests would be synonymous with that of the corporation, he or she might be privy to confidential information concerning the litigation, and he or she would be deemed to be represented by the corporation's counsel. However, that is not the case where, as here, there is a closely held corporation and an actual conflict has arisen between the corporate majority on the one hand, and the minority, represented by its elected directors. Corporate counsel's duty is first and foremost to the entity, not its directors or officers. Therefore, just as corporate counsel cannot represent the dissident shareholders/directors, corporate counsel also has no duty to disclose privileged information to those with which the corporation has a dispute. Indeed, as discussed above, in such situations corporate counsel may even use any confidential information the corporation obtained from the dissident director/shareholder *478 before the dispute arose. (Meehan v. Hopps, supra, 144 Cal.App.2d at p. 293, 301 P.2d 10 [director/stockholder whose position required divulgence of information to corporate counsel could not disqualify counsel from representing corporation in subsequent suit against director/stockholder].) If there is a concern that a dissident director might disclose confidential communications concerning the litigation, the corporation can form a litigation committee to discuss litigation matters in confidence without the presence of directors or shareholders who are adverse to the corporation's position.
We recognize that even adverse directors continue to owe duties to a corporation, and that there is a potential for the disclosure of confidential information if an adverse director can be contacted by an attorney representing a dissenting shareholder. However, to the extent that attorney-client privileged material is actually passed by a director to counsel suing the corporation, the corporation has remedies regardless of whether rule 2-100 has been violated. As we explained in Snider, regardless of whether there has been a violation of rule 2-100, "If an attorney violates the attorney-client privilege `the court may disqualify him or her from further participation in the case [citation] and, under certain circumstances, may exclude improperly obtained evidence or take other appropriate measures to achieve justice and ameliorate the effect of improper conduct.' [Citation.]" (Snider, supra, 113 Cal.App.4th at p. 1212, 7 Cal.Rptr.3d 119.) If a director, represented by separate counsel because he is in conflict with the corporation, in fact discloses confidential corporate information to a party suing the corporation, the corporation would thus have a remedy against the director and separate counsel. Directors (and their separate counsel) in positions adverse to their corporation must act with prudence to avoid violating remaining fiduciary duties owed to the corporation, and not to divulge confidential information. Separate counsel must ensure that the director recognize and abide by his or her duties to the corporation. In most cases it would be advisable and prudent for separate counsel to consult with the corporation's counsel before allowing the director to have contact with counsel suing the corporation, to ensure that attorney-client privileged communications or other confidential information is not disclosed.
La Jolla Cove cites the case Mills Land & Water Co. v. Golden West Refining Co. (1986) 186 Cal.App.3d 116, 230 Cal.Rptr. 461 (Mills) in support of its position that no active directors may be contacted without the permission of corporate counsel. The Mills case does not support their position based upon on the facts of this case.
In Mills, a case decided under former rule 7-103, the court concluded that the former rule prohibited ex parte contact with a corporation's former president who remained on the board of directors. As the court stated: "As a current director, [the former president] is entitled to attend board meetings where the litigation may be discussed, perhaps with counsel.... The question is not simply whether [the former president] was in a position to bind [the corporation] in some fashion. His position makes him potentially privy to privileged information about the litigation." (Mills, supra, 186 Cal.App.3d at p. 128, 230 Cal.Rptr. 461, italics & fn. omitted.)
However, there are a few facts that easily distinguish the Mills case from the present one. First, the director there did not have separate counsel. Further, there was no indication that the director was adverse to the corporation on the subject matter of the litigation. In that case, the *479 director did not represent the interests of a minority shareholder seeking the dissolution of a corporation. As we emphasized above, in most situations a director of a corporation may not be contacted by opposing counsel without the permission of corporate counsel. It is only in the situation where the director has retained separate counsel that rule 2-100 allows ex parte contact upon consent of that counsel.
Further, Mills was decided under former rule 7-103, the predecessor to rule 2-100, which was interpreted by courts as creating a blanket rule against contact with any constituents of a corporation in order to protect against possible revelation of attorney-client privileged information. (Mills, supra, 186 Cal.App.3d at p. 128, 230 Cal.Rptr. 461; see also Bobele v. Superior Court (1988) 199 Cal.App.3d 708, 714, 245 Cal.Rptr. 144 ["Plaintiffs may not contact ex parte any current employees" of defendant organization].) However, as we noted in Snider, when rule 2-100 was enacted in 1988 to replace rule 7-103, the drafters rejected such a blanket prohibition. Instead, rule 2-100 evidenced the drafters' intent to balance "the competing policies of protecting confidential communications and allowing discovery of factual matters concerning the litigation." (Snider, supra, 113 Cal.App.4th at p. 1211, 7 Cal.Rptr.3d 119.) To the extent that the Mills decision relied upon the blanket proscription against ex parte contacts with any members of a corporation followed under former rule 7-103, it is no longer good law. (Snider, supra, 113 Cal.App.4th at pp. 1211, 1199-1200, 7 Cal.Rptr.3d 119.)[6]
La Jolla Cove also cites to California State Bar Committee Formal Opinion, No.1991-125, which held that it is improper for an attorney to have ex parte contact with a dissident director, represented by separate counsel, without first obtaining the consent of corporate counsel. However, that opinion relied heavily upon the United States Supreme Court's decision in Upjohn Co. v. United States (1981) 449 U.S. 383, 101 S.Ct. 677, 66 L.Ed.2d 584, and Mills, supra, 186 Cal.App.3d 116, 230 Cal.Rptr. 461, in reaching its conclusion. The reasoning of both of those opinions that supported a narrow reading of former rule 7-103 were rejected by the drafters of 2-100, who sought a more balanced approach that considered not only a corporation's desire to protect privileged information, but also an attorney' need for discovery. (Snider, supra, 113 Cal.App.4th at pp. 1211, 1199-1200, 7 Cal.Rptr.3d 119.) Opinion No.1991-125 also rejected, in one sentence, the comment to ABA Model Rule 4.2 that contact is permissible if a corporate constituent's counsel approves. (State Bar Formal Opn., No.1991-125, supra, at p. 2.) The sole basis for its rejection of that comment was the statement that the ABA Model rules "do not supersede the California Rules of Professional Conduct." (Id. at p. 3.) However, as we stated, ante, since there is nothing inconsistent between the language of rule 2-100 and ABA Model Rule 4 .2, the comment to Model Rule 4.2 is persuasive authority. We note finally, as the State Bar opinion itself does, that the opinion was advisory only and not binding upon courts.
We conclude that counsel for the Jackmans, under the facts of this case, did not *480 violate rule 2-100 by obtaining and using declarations from directors Durisoe and Baxter because their separate counsel gave permission for such contacts to the Jackmans' counsel.[7]
2. Evidence of actual disclosure of confidential information
We further conclude that even if counsel's contacts were in violation rule 2-100, the court did not abuse its discretion in refusing to disqualify the Jackmans' counsel, as there is no evidence that any confidential information was disclosed to their counsel, and disqualification is not otherwise necessary to preserve the integrity of the judicial process.
"The attorney-client privilege provides for the nondisclosure of confidential communications between a lawyer and his/her client. (Evid.Code, § 954.) The communication must be intended by the client to be treated in confidence. Confidential communications include not only information ágiven from a client to the attorney, but also the legal opinions and advice tendered by the attorney. (Evid.Code, § 952.)
"Once a party claims the attorney-client privilege, the communication sought to be suppressed is presumed confidential. A party opposing the privilege has the burden of proof to show the communication is one not made in confidence. (Evid. Code, § 917.) However, the party claiming privilege has the burden to show that the communication sought to be suppressed falls within the terms of the statute. [Citations.] It is also established that a communication which was not privileged to begin with may not be made so by subsequent delivery to the attorney. [Citation.]" (Alpha Beta Co. v. Superior Court (1984) 157 Cal.App.3d 818, 824-825, 203 Cal.Rptr. 752.)
Here, the showing made by La Jolla Cove at best demonstrated that Durisoe and Baxter possessed certain information protected by the attorney-client privilege, but was inadequate to prove that any protected communications were divulged by them to the Jackmans' counsel. (Nalian Truck Lines, Inc. v. Nakano Warehouse & Transportation Corp., supra, 6 Cal.App.4th at pp. 1264-1265, 8 Cal.Rptr.2d 467.) "[W]e question whether a protective or suppression order is warranted by showing only a violation of rule 2-100, without an additional showing that the violation led to the disclosure of confidential communications protected by the attorney-client privilege [citation.] or created an unfair advantage, or impacted the fairness of the trial or the integrity of the judicial system." (Continental Ins. Co. v. Superior Court (1995) 32 Cal.App.4th 94, 111, fn. 5, 37 Cal.Rptr.2d 843.)[8]
"Motions to disqualify counsel present competing policy considerations. On the one hand, a court must not hesitate to disqualify an attorney when it is satisfactorily established that he or she wrongfully acquired an unfair advantage that undermines the integrity of the judicial process and will have a continuing effect on the proceedings before the court. [Citations.] On the other hand, it must be kept in mind *481 that disqualification usually imposes a substantial hardship on the disqualified attorney's innocent client, who must bear the monetary and other costs of finding a replacement. A client deprived of the attorney of his choice suffers a particularly heavy penalty where, as appears to be the case here, his attorney is highly skilled in the relevant area of the law." (Gregori v. Bank of America (1989) 207 Cal.App.3d 291, 300, 254 Cal.Rptr. 853.) Based upon the evidence before the court on La Jolla Cove's motion to disqualify, it did not abuse its discretion in refusing to disqualify attorneys Micheli and Fabiano as counsel for the Jackmans in this matter.
DISPOSITION
The petition for writ of mandate is denied. The order staying the application to appoint a receiver issued on March 18, 2004, and the order staying all proceedings in the trial court issued on April 4, 2004, are vacated. The parties are to bear their own costs in the writ proceedings.
WE CONCUR: BENKE, Acting P.J., and HALLER, J.
NOTES
[*] Chin, J., dissented.
[1] All further statutory references are to the California State Bar Rules of Professional Conduct unless otherwise specified.
[2] La Jolla Cove filed a supplemental declaration in support of its motion two days before the court issued its ruling. The court refused to consider that declaration. Because La Jolla Cove does not assert the court erred in refusing to consider that late-filed declaration, we need not address it on this appeal.
[3] Although California has not adopted the model rules, courts have found the rules "helpful and persuasive in situations where the coverage of our Rules is unclear or inadequate." (1 Witkin, Cal. Procedure (4th ed. 1996) Attorneys, § 418, p. 508.)
[4] For a more in-depth analysis of potential conflicts that may arise for attorneys representing small closely held corporations such as La Jolla Cove, see Friedman, California Practice Guide: Corporations, supra, chapter 6.
[5] One earlier California case held that prior to an adjudication that the corporation is entitled to relief against officers or directors with which it has a dispute, the same attorney may represent both. (Jacuzzi v. Jacuzzi Brothers, Inc. (1966) 243 Cal.App.2d 1, 35-36, 52 Cal. Rptr. 147.) However, Jacuzzi has been criticized as "illogical and against the weight of authority" (Forrest v. Baeza, supra, 58 Cal. App.4th at p. 75, 67 Cal.Rptr.2d 857), and later cases bar dual representation in all cases involving actual conflicts. (In re Oracle Securities Litigation (N.D.Cal.1993) 829 F.Supp. 1176, 1186, 1188, fn. 8; 1 Witkin, Cal. Procedure, supra, Attorneys, § 139, pp. 182-184; Patton, Disqualification of Corporate Counsel in Derivative Actions: Jacuzzi and the Inadequacy of Dual Representation (1979) 31 Hastings L.J. 347.)
[6] La Jolla Cove also quotes the recent decision in Koo v. Rubio's Restaurants, Inc. (2003) 109 Cal.App.4th 719, 135 Cal.Rptr.2d 415 for the proposition that opposing counsel cannot have any contact with directors of a corporation. However, the quoted passage came from the Court of Appeal's recitation of one party's contention in that case, not the court's holding. (Id. at pp. 730-731, 135 Cal.Rptr.2d 415.)
[7] We recognize that the Jackmans claim that there was no contact and that Lawrence Jackman obtained the declarations on his own. However, based upon our decision that any alleged contact was not in violation of rule 2-100, we need not decide whether the evidence showed actual ex parte contact between the Jackmans' counsel and Durisoe and Baxter.
[8] Indeed, La Jolla Cove has presented no evidence that anything of any impact to the litigation was disclosed to Durisoe and Baxter or why the evidence allegedly disclosed to them in their roles as directors of the corporation dictates the disqualification of counsel for the Jackmans.
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https://www.courtlistener.com/api/rest/v3/opinions/1308808/
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271 S.E.2d 393 (1980)
Carolyn LEDFORD
v.
Gilmer LEDFORD.
No. 7930DC1148.
Court of Appeals of North Carolina.
October 21, 1980.
*395 Downs & Henning by James U. Downs, Franklin, for plaintiff-appellant.
Louis Wilson, Franklin, for defendant-appellee.
CLARK, Judge.
The challenged ruling of the trial court in granting summary judgment for the defendant-husband should be affirmed on appeal only if the defendant in his supporting affidavit established as a matter of law that he and plaintiff-wife did not live *396 separate and apart for one year as required by G.S. 50-6. Stated another way, the test is whether the defendant presented materials which would require a directed verdict in his favor if presented at the trial. W. Shuford, N.C. Civil Practice and Procedure § 56-7 (1975).
The facts as presented to the court in defendant's affidavit on the one hand and as presented in plaintiff's affidavit and deposition on the other hand are conflicting. Only if these questions of fact are immaterial would summary judgment be appropriate, because summary judgment is warranted only where no genuine issue of material fact exists. Page v. Sloan, 281 N.C. 697, 190 S.E.2d 189 (1972); Fitzgerald v. Wolf, 40 N.C.App. 197, 252 S.E.2d 523 (1979); G.S. 1A-1, Rule 56. In making this determination, the Court must view the evidence in the light most favorable to the non-movant. Brice v. Moore, 30 N.C.App. 365, 226 S.E.2d 882 (1976).
G.S. 50-6 allows the granting of a divorce on the basis of one year's separation. To grant defendant's motion, the trial judge must have concluded that the parties did not as a matter of law live separate and apart as the statute contemplates. Our case law delineates two circumstances under which the law will hold spouses to have failed to satisfy the requirements of a valid separation: first, sexual activity between the parties, Murphy v. Murphy, 295 N.C. 390, 245 S.E.2d 693 (1978); and, second, such association between the parties as to induce others to regard them as living together, In re Estate of Adamee, 291 N.C. 386, 230 S.E.2d 541 (1976).
Though both Murphy and Adamee, supra, deal with the validity of a separation agreement and not with the tolling of the period of separation required in G.S. 50-6, we believe that the following language in the Adamee opinion forestalls any doubt that the cases should apply as well to the "live separate and apart" words in G.S. 50-6:
"The same public policy which will not permit spouses to continue to live together in the same home-holding themselves out to the public as husband and wife-to sue each other for an absolute divorce on the ground of separation or to base the period of separation required for a divorce on any time they live together, will also nullify a separation agreement if the parties resume marital cohabitation. Whether used in a separation agreement or a divorce statute, the words `live separate and apart' have the same meaning. The cessation of cohabitation which provides grounds for divorce and the resumption of cohabitation which will abrogate a separation agreement are defined in the same terms."
291 N.C. at 391, 230 S.E.2d at 545 (dictum).
The first circumstance which would support the judge's granting of summary judgment in this case would be undisputed evidence of sexual activity between the parties. Murphy v. Murphy, 295 N.C. 390, 245 S.E.2d 693 (1978). See Note, Separation Agreements: Effect of Resumed Marital Relations, 1 Campbell L.Rev. 131 (1979) [hereinafter Separation Agreements]; Survey, Developments in North Carolina Law, 1978, 57 N.C.L.Rev. 827, 1095-98 (1979); Note, Isolated Acts of Sexual Intercourse Void Separation Agreements, 16 Wake Forest L.Rev. 137 (1980) [hereinafter Isolated Acts]. In Murphy, supra, Justice Sharp wrote for the Court that "severance of marital relations by a separation agreement and continued sexual intercourse between the parties are essentially antagonistic and irreconcilable notions." Murphy v. Murphy, 295 N.C. at 397, 245 S.E.2d at 698. In light of the foregoing quote from Adamee, it is to be expected that the trial judge would understand the Murphy rationale to suggest that acts of sexual intercourse would not only void a separation agreement but would also toll the statutory period for divorce. See Note, Separation Agreements, 1 Campbell L.Rev. at 139-40; Note, Isolated Acts, 16 Wake Forest L.Rev. at 149. The testimony of the plaintiff, however, was that no intercourse occurred between her and her husband during the period of separation. A jury might well believe her testimony. Indeed, the judge was required to believe this testimony for the purpose of ruling on the *397 motion for summary judgment. Brice v. Moore, supra. Absent sexual intercourse, the Murphy rationale has no applicability to this case and reliance upon sexual intercourse between the parties as grounds for summary judgment, in light of plaintiff's evidence to the contrary, would be error by the trial judge.
The second circumstance which would support the granting of the summary judgment would be an association between the parties "of such character as to induce others who observe them to regard them as living together in the ordinary acceptation of that descriptive phrase." In re Estate of Adamee, supra; Dudley v. Dudley, 225 N.C. 83, 33 S.E.2d 489 (1945). The Adamee court, per Justice Sharp, stated:
"We hold that when separated spouses who have executed a separation agreement resume living together in the home which they occupied before the separation, they hold themselves out as man and wife `in the ordinary acceptation of the descriptive phrase.'"
Adamee, 291 N.C. at 392, 230 S.E.2d at 546. Under this second approach the summary judgment would be warranted if all the evidence considered in the light most favorable to plaintiff established as a matter of law that sometime after the separation of the parties they resumed living together or in some manner "held themselves out as husband and wife living together." Adamee, supra; Dudley v. Dudley, supra.
The affidavit and deposition of the plaintiff tend to show that over the course of more than a year plaintiff:
(1) Drove around town with defendant on a few occasions;
(2) Drove to Georgia with defendant on two occasions;
(3) Approximately twice a month, during half of this period (May to November 1978), visited defendant at their former marital home and while at the house cleaned up and cooked;
(4) Ate at restaurants with defendant on three occasions;
(5) Set up a Christmas tree in the former marital home during December 1978;
(6) On one occasion attended the Prentiss Baptist Church with defendant;
(7) While leaving the church on that occasion failed to protest when defendant referred to her as his wife;
(8) Slept with defendant on the night of 29 December 1977, although they did not engage in sexual activity.
The trial judge apparently viewed these facts as establishing as a matter of law that the parties had not lived "separate and apart" in that they held themselves out to the public as husband and wife.
Considering the first seven of the above listed activities, we see nothing that would warrant finding as a matter of law that the parties held themselves out as man and wife. The acts listed appear to be isolated or occasional and not of a character to be inconsistent with the parties' status as separated spouses. It is true that Murphy held sexual intercourse between the parties to be inconsistent with the notion of separation "whether the resumption of sexual relations be `casual', `isolated', or otherwise," Murphy v. Murphy, 295 N.C. at 397, 245 S.E.2d at 698; but we believe that casual and isolated social acts together must be viewed differently. As pointed out in Murphy, to allow sexual activity outside the cloak of marriage would be to "`sanction and approve, for all practical purposes, illicit intercourse and promiscuous assignation.'" Id., quoting State v. Gossett, 203 N.C. 641, 644, 166 S.E. 754, 755 (1932). There is nothing illicit, however, about casual social intercourse between separated spouses. Indeed, in a state which "recognize[s] and adhere[s] ... to a policy which within reason favor[s] maintenance of ... marriage[s]," Gardner v. Gardner, 294 N.C. 172, 180, 240 S.E.2d 399, 405 (1978), it would appear beneficial to encourage the sorts of social contact which are necessary for spouses to reconcile their differences and effect a meaningful reconciliation. In light of the nature of these activities and their relative infrequency over an extended period of time, we see no way they could reasonably induce others to regard the parties as living together. We note in contrast *398 that cases denying divorce or voiding separation agreements have uniformly required much more substantial activity to find a holding out as living together. See In re Estate of Adamee, supra, (wife moved back into marital domicile and lived with husband for eight months); Dudley v. Dudley, supra, (evidence showed spouses had slept in the same room for two and one-half to three years and in adjoining rooms in the same house for the remainder of the alleged five years' separation); Young v. Young, 225 N.C. 340, 34 S.E.2d 154 (1945) (although husband was in the Navy, the parties stayed together whenever the husband was on leave or stationed near the marital home). We hold, in accord with our earlier holding in the case of Tuttle v. Tuttle, 36 N.C.App. 635, 244 S.E.2d 447 (1978), that, "interruption of the statutory period should not be found ... from the mere fact of social contact between the parties." Id. at 636-37, 244 S.E.2d at 448.
The eighth, and only remaining, circumstance upon which the trial judge might have based his ruling for defendant on the summary judgment motion was the incident on 29 December 1977 when plaintiff and defendant spent the night together in their former marital home. Plaintiff, however, filed a timely motion to amend her complaint for the purpose of eliminating this incident and having the period of separation begin on 1 January 1978. Had this motion been granted, the night the parties spent together would have been outside the period of separation and not subject to consideration on the summary judgment motion. Plaintiff assigns as error the trial judge's denial of her motion to amend her complaint.
Rule 15(a), N.C. Rules Civ.Proc. mandates that after expiration of the time for amendment as of right, "a party may amend his pleading only by leave of court ... and leave shall be freely given when justice so requires." This language in our rule is identical to that of its federal counterpart, Fed.R.Civ.Proc. 15(a). See W. Shuford, N.C. Civil Practice and Procedure § 15-1 (1975). With regard to the Federal Rule, the United States Supreme Court has stated:
"Rule 15(a) declares that leave to amend `shall be freely given when justice so requires'; this mandate is to be heeded. See generally, 3 Moore, Federal Practice (2d ed 1948), ¶¶ 15.08, 15.10. If the underlying facts or circumstances relied upon by plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason-such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. the leave sought should, as the rules require, be `freely given.' Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules."
Foman v. Davis, 371 U.S. 178, 181-182, 83 S. Ct. 227, 229-230, 9 L. Ed. 2d 222, 226 (1962); see Public Relations, Inc. v. Enterprises, Inc., 36 N.C.App. 673, 245 S.E.2d 782 (1978); Gladstein v. South Square Association, 39 N.C.App. 171, 249 S.E.2d 827 (1978). Just as the language in the Federal and North Carolina Rules are identical on this point, so are the policies behind the rules the same, i. e., "to insure, so far as is just to the opposing party, that every case be decided on its merits." Gladstein, supra, at 178, 249 S.E.2d at 831.
In the case sub judice the trial court did not set out a justifying reason for denying plaintiff's motion to amend and no such reason appears in the record on appeal. The United States Supreme Court has held that the trial judge abuses his discretion when he refuses to allow an amendment unless a justifying reason is shown. Foman v. Davis, supra. Nor does the record reveal any attempt on the part of the defendant to *399 show that he would be prejudiced by the amendment. The burden is on the objecting party to show that he would be prejudiced thereby. Vernon v. Crist, 291 N.C. 646, 231 S.E.2d 591 (1977) (dictum); Public Relations, Inc. v. Enterprises, Inc., 36 N.C. App. 673, 245 S.E.2d 782 (1978). It must be concluded that the ruling of the trial court in denying the motion to amend is based on a misapprehension of the law, that the circumstances (listed 1-7 above) were sufficient as a matter of law to warrant summary judgment for defendant rendering the amendment futile. We conclude that the denial of the motion to amend without a justifying reason and no showing of prejudice to defendant, and apparently based on a misapprehension of the law, was an abuse of discretion and reversible error.
It should not be inferred from this ruling on the amendment question that summary judgment for defendant would have been justified solely on the admission by plaintiff that she spent the night with the defendant in the marital home on 29 December 1977. Our ruling on the amendment issue obviates the need for considering and ruling on that question.
The summary judgment for defendant and the order denying plaintiff's motion to amend are vacated and this cause is remanded for proceedings consistent with this opinion.
Vacated and Remanded.
MORRIS, C. J., and HARRY C. MARTIN, J., concur.
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17 Cal.Rptr.3d 486 (2004)
121 Cal.App.4th 835
Lyle R. MINK, Plaintiff, Cross-Defendant, and Respondent,
v.
Dan S. MACCABEE, Defendant, Cross-Complainant and Appellant.
No. B166764.
Court of Appeal, Second District, Division Five.
August 17, 2004.
Review Denied November 17, 2004.[**]
*487 Law Offices of Peter A. Schwartz, Peter A. Schwartz, Law Offices of Dan S. Maccabee, and Dan S. Maccabee, Los Angeles, for Defendant, Cross-Complainant and Appellant.
Lyle R. Mink, in pro. per., for Plaintiff, Cross-Defendant and Respondent.
Certified for Partial Publication.[*]
ARMSTRONG, J.
This case involves two independent lawsuits: attorney Mink's suit against attorney Maccabee for attorney fees pursuant to a retainer agreement, and Maccabee's cross-complaint for an attorney referral fee in a separate matter. The cross-complaint was dismissed after the trial court sustained Mink's demurrer, on the basis that the fee-splitting arrangement was not consented to by the client in accordance with rule 2-200 of the California Rules of Professional Conduct (Rule 2-200). The attorney fees action was tried to a jury, which returned a special verdict concluding that Maccabee had not breached the contract, and awarding no damages. The trial court granted Mink's motion for judgment notwithstanding the verdict, and awarded Mink $9,718.97 in damages.
Maccabee appeals the ruling on the demurrer, arguing that the trial court misinterpreted Rule 2-200. He also appeals the judgment in the attorney fees action, contending that the trial court erred in granting judgment notwithstanding the verdict. We agree that the court erred in sustaining the demurrer to Maccabee's cross-complaint, but find that the court properly entered judgment notwithstanding the verdict.
1. Dismissal of cross-complaint
Maccabee appeals the dismissal of his cross-complaint. That pleading alleges that Maccabee referred a client to Mink, who agreed to pay a fee for the referral. The cross-complaint also alleges that the requirements of Rule 2-200 of the Rules of Professional Conduct, to the effect that the client agree in writing to the referral arrangement, was met, albeit well after the matter had been successfully resolved.[1] The cross-complaint also included a cause of action in quantum meruit.
Mink demurred to the cross-complaint, arguing that the client's belated acknowledgement and consent to the referral arrangement failed to satisfy Rule 2-200 in two particulars: Mink contended the rule requires first that the fee-sharing arrangement be in writing and signed by Mink in order to be enforceable, and second that the client's written consent must be obtained at the outset of the litigation. The trial court determined that the client's *488 late-obtained consent did not satisfy the rule, and so sustained the demurrer.
Interpretation of the rule here at issue is a question of law and thus subject to de novo review. (Margolin v. Shemaria (2000) 85 Cal.App.4th 891, 895, 102 Cal.Rptr.2d 502.)
Rule 2-200 provides: "(A) A member shall not divide a fee for legal services with a lawyer who is not a partner of, associate of, or shareholder with the member unless: [¶] (1) The client has consented in writing thereto after a full disclosure has been made in writing that a division of fees will be made and the terms of such division; . . ." The trial court ruled that the client's written consent, obtained after the conclusion of the representation in the referred matter, did not satisfy the requirements of Rule 2-200. We do not agree.
The rule requires that the client's written consent be obtained prior to any division of fees. This simple dictate cannot reasonably be read to require the client's written consent prior to the lawyers' entering into a fee-splitting arrangement, or prior to the commencement of work, or at any time other than prior to any division of fees. And Rule 2-200 certainly cannot be read, as Mink would have us do, to include a requirement nowhere appearing therein, that the fee-splitting agreement between the attorneys must be in writing.[2] Thus, while we agree with Mink that written agreements are preferable to oral ones, and that written consents obtained early in the process are preferable to those obtained after the fact, those preferences are not contained in Rule 2-200, and therefore cannot invalidate a written consent which complies in all respects with the plain language of the rule.
The trial court also dismissed Maccabee's quantum meruit claim. Shortly thereafter, the Supreme Court issued its opinion in Huskinson & Brown v. Wolf (2004) 32 Cal.4th 453, 9 Cal.Rptr.3d 693, 84 P.3d 379. In that case, the Court considered the issue of whether a lawyer who may not recover under a fee-splitting agreement for lack of the client's written consent may nevertheless recover in quantum meruit. The Court determined that, while a lawyer promised a referral fee may not recover for breach of contract in the absence of the client's consent to the fee-splitting arrangement, he or she may recover under the theory of quantum meruit even in the absence of the client's written consent. Thus, Huskinson & Brown establishes that Maccabee's cause of action in quantum meruit survives demurrer.
Mink argues on appeal that Huskinson & Brown does not apply to the facts of this case because "The trial court implicitly found that Mr. Maccabee's cause of action for quantum meruit was not a genuine attempt to recover for services rendered but instead was a subterfuge to recover a prohibited referral fee." However, since a demurrer does not permit the trial court to make any factual findings at all, including "implicit" ones, the argument is not persuasive.
*489 Because we conclude that Maccabee's cross-complaint states a cause of action for breach of an oral fee-splitting agreement as well as a claim in quantum meruit, we reverse the dismissal of the cross-complaint.
2. Judgment on the complaint[**]
DISPOSITION
The judgment notwithstanding the verdict on the complaint is affirmed. The dismissal of the cross-complaint is reversed. The parties are to bear their own costs on appeal.
We concur: TURNER, P.J. and MOSK, J.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of section 2.
[**] Brown, J., did not participate. Kennard and Chin, JJ., dissented.
[1] According to the pleadings, the referral was made in 1999, Mink received $400,000 as compensation for litigating the referred matter in October or November 2001, and the client signed an acknowledgment and consent to the division of fees on or about February 15, 2002.
[2] As a matter of interest, Los Angeles County Bar Association Formal Opinion 467 (1993) reached these same conclusions some years ago, opining that "There is no requirement that the client's consent be obtained before the lawyer enters into a fee-sharing agreement. The Rule bars division of fees without the client's consent; i.e., it is enough that the client's consent be obtained before the division is made." The opinion also noted that there is no requirement that the fee-sharing agreement itself be in writing and signed by the lawyers.
[**] See footnote *, ante.
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421 A.2d 36 (1980)
George E. SEWALL et al.[1]
v.
SPINNEY CREEK OYSTER CO., INC. and Spencer Apollonio, Commissioner of the Department of Marine Resources.
Supreme Judicial Court of Maine.
Argued June 17, 1980.
Decided October 14, 1980.
*37 Cabanne Howard, Asst. Atty. Gen. (orally), Augusta, for Apollonio, Commissioner, Dept. of Marine Resources.
Skelton, Taintor & Abbott, P. A., Brian M. Dench (orally), Lewiston, for Spinney Creek Oyster Co., Inc.
Craig J. Rancourt (orally), Biddeford, for appellees-intervenors.
Before McKUSICK, C. J., and WERNICK, GLASSMAN and ROBERTS, JJ.
WERNICK, Justice.
The Commissioner of the Department of Marine Resources (Commissioner) and Spinney Creek Oyster Co., Inc. (Spinney Creek) have appealed from a judgment of the Superior Court (York County) adjudicating illegal the Commissioner's award of a lease to Spinney Creek in regard to aquaculture operations on certain parts of the York River. The Superior Court held that the failure of the hearing examiner to have any of the witnesses sworn rendered void the entire proceeding underlying the award of the lease and therefore the lease itself, as well.
We deny the appeal, but we modify the judgment to order the lease set aside rather than to be held void. Affirming the judgment as thus modified, we remand the case for further proceedings.
The facts are not in dispute. In early 1979, pursuant to 12 M.R.S.A. § 6072 (Supp. 1979-80), Spinney Creek applied to the State Commissioner of Marine Resources to be granted a lease to raise oysters in the York River. The Commissioner held a hearing pursuant to subsection (6) of Section 6072, which provides:
"Prior to granting a lease, the commissioner shall hold a hearing. The hearing shall be an adjudicatory proceeding and shall be held in the manner provided under the Maine Administrative Procedure Act, Title 5, chapter 375, subchapter IV and the specific procedures of this section."
The primary purpose of the hearing was to obtain evidence concerning any possible adverse effects of the proposed aquaculture project on the interests of riparian owners or other members of the public in their use of the leased area. See Section 6072(7).
*38 The Administrative Procedure Act, regarding "adjudicatory proceedings", 5 M.R. S.A. § 9057, provides:
"[u]nless otherwise provided by statute, agencies need not observe the rules of evidence observed by courts, but shall observe the rules of privilege recognized by law"
and
"[a]ll witnesses shall be sworn." (emphasis added) Id., at subsections (1) and (3).
Here, all parties agree that in this adjudicatory proceeding each and every witness who gave testimony was unsworn.
Following the hearing, the Commissioner, after reviewing the findings of the hearing examiner and with the advice and consent of the advisory council, awarded a lease to Spinney Creek. Pursuant to the Administrative Procedure Act, 5 M.R.S.A. § 11002 (1979), a petition for review was filed in the Superior Court by nine of the persons who had participated in the public hearing as intervenors, in accordance with Section 9054(1). They were joined by another person who alleged herself to be "aggrieved by final agency action", in accordance with Section 11001. The petition asserted as one of six points on review, that the omission to have sworn each and every witness who testified at the public hearing invalidated that hearing and the award of the lease resulting from it.
The Superior Court denied the petition for review in regard to five of the points it raised. As to the sixth point raised, however, that all of the witnesses who testified at the public hearing were unsworn, the Court decided that this deficiency rendered "void" the public hearing as well as the lease granted in consequence of that hearing.
Both the Commissioner and Spinney Creek immediately moved the Court to alter or amend its judgment pursuant to Rule 59(e) M.R.Civ.P., asserting as the ground therefor that the intervenors had "waived" the swearing of the witnesses by their failure to object to this omission at the hearing. After hearing, the Superior Court justice denied the motion, stating:
"I'm frankly not impressed with a waiver theory in this situation because it is defined as a relinquishment of a known right. And I'm not sure that lay people in this sort of a proceeding can be said to know of that right. Furthermore, all parties ought to be charged-it was just as easy for the winners and the losers to equally-it's just a question of proceeding without the oath."
1.
We discuss, first, certain preliminary issues that arose at the oral argument before this Court.
One such issue is whether the Commissioner of the Department of Marine Resources is a proper party in the case. We conclude that since the Commissioner has the responsibility and authority, under 12 M.R.S.A. § 6072 (1979), as to aquaculture leases, he is a proper party in a proceeding under the Admistrative Procedure Act to review his decision granting or denying such a lease. Where, as here, a state administrative agency (or official) is charged with the administration of a statute, and the action of that agency is subjected to review under the Administrative Procedure Act, notwithstanding that the action is taken in an "adjudicatory proceeding" as defined in that Act and may thus involve the agency as a quasi-judicial tribunal, the agency has a sufficient interest in defending its policies, as reflected in its actions, to entitle it to participate in proceedings to review its actions and policies. The Commissioner of the Department of Marine Resources was thus a proper party to these proceedings for judicial review.
In light of this conclusion, another preliminary question arises regarding the appropriate title to be given this kind of proceeding. When a petition for review of the action of a governmental agency is brought under the Administrative Procedure Act, unless it is otherwise specifically provided, the pleadings should conform to the Maine Rules of Civil Procedure. Rule 10(a) provides:
*39 "(a) Captions; Names of Parties. Every pleading shall contain a caption setting forth the name of the court and county, the title of the action, the docket number, and a designation as in Rule 7(a). In the complaint the title of the action shall include the names of all the parties, but in other pleadings it is sufficient to state the name of the first party on each side with an appropriate indication of other parties. The complaint shall be dated."
The petition for review instituting the instant judicial proceeding for review did not conform to these specifications. In particular, although the petition named the parties in the first paragraph, the caption of the petition gave the proceeding the title "In re Application of Spinney Creek Oyster Co., Inc. . . ." and this was the title used at all stages of the proceeding. Such a title for this case is inappropriate. "In re" is
"the usual method of entitling a judicial proceeding in which there are not adversary parties"
and the action is directed to
"some res concerning which judicial action is to be taken, such as a bankrupt's estate, an estate in the probate court, a proposed public highway, etc." H. Black, Black's Law Dictionary, Rev'd 4th ed., 900 (1968).
Here, there is not such a res. Rather, the subject matter in dispute is the action of an administrative agency as to which there are adversary parties. The action must be given a title reflecting the adversary parties involved in it.
2.
Proceeding to the foundational point raised in this appeal, we conclude that the failure to swear any of the witnesses who testified at the public hearing renders unlawful that hearing as well as the lease that was its product.
We note first that here, as in Paradis v. Webber Hospital, Me., 409 A.2d 672 (1979), the available legislative history affords no guidance as to why the legislature specifically required that in adjudicatory proceedings under the Maine Administrative Procedure Act "[a]ll witnesses shall be sworn." However, the general value and purposes of the oath requirement are well known, i. e., "to bind the conscience of the witness and make him amenable to prosecution if he gives perjured testimony." Wilcoxon v. United States, 231 F.2d 384, 387 (10th Cir. 1956); see Paradis v. Webber Hospital, supra, at 675.
Some authorities have questioned the value of the oath.[2] Yet, when a statute requires an oath courts generally hold, as this Court has recently affirmed, that "[t]he oath provision in a statute is more than a mere technicality." Paradis v. Webber Hospital, supra, at 675. Some courts have gone so far as to deem the swearing of witnesses in particular contexts to be a constitutional requirement, as a component of constitutional due process of law. People v. Hartnett, 124 Misc. 418, 208 N.Y.S. 246, 249 (1925); Commonwealth ex rel. Freeman v. Superintendent of State Correctional Institution, 212 Pa.Super. 422, 242 A.2d 903, 908-909 (1968); contra, State v. Doud, 190 Or. 218, 225 P.2d 400, 408 (1950).
On the other hand, the right of a party to claim entitlement to the benefits deemed to be conferred by a requirement for the swearing of witnesses may be relinquished through a genuine act of waiver, or may be forfeited by procedural default. Cady v. Norton, 31 Mass. (14 Pick.) 236, 237 (1833); Wilcoxon v. United States, supra, at 387 and appropriate cases cited therein.
As to forfeiture by procedural default, however, one important qualification is generally recognized. When a party is not aware, or is not chargeable with responsibility to be aware, of the requirement to swear witnesses, as for example when a party is not represented by counsel, the failure to make timely objection regarding *40 such omission rarely will lead to a forfeiture by procedural default. Hawks v. Baker, 6 Me. 72 (1829); Langford v. United States, 4 Ind.T. 567, 76 S.W. 111, 112 (1903); Gibbons v. Territory, 5 Okl.Cr. 212, 115 P. 129, 138 (1911); Wilcoxon v. United States, supra, at 388 (Murrah, J. dissenting); see Beausoliel v. United States, 107 F.2d 292, 294 (D.C.Cir.1939); Pooley v. State, 116 Ind. App. 199, 62 N.E.2d 484, 485 (1945). In New York, some courts have refused to apply the rule of forfeiture by procedural default in regard to oath requirements. They hold that express consent and a genuine waiver are required, even when counsel is present, to render unsworn testimony admissible, otherwise its admission is reversible error. Napiearlski v. Pickering, 278 App.Div. 456, 106 N.Y.S.2d 28, 29 (1951).
We have examined with care the Commissioner's arguments, and the cases cited, for the proposition that the "modern trend" is to find a waiver, or a forfeiture by procedural default, in situations like that in the case at bar. We can discern no such trend; rather, almost without exception, the cases cited are factually distinguishable from the case now before us.
Most are distinguishable because the party in question was represented by counsel, and the opinions often expressly note that there was no showing that counsel was unaware of the omission to have the witness sworn, so as to excuse the lack of a timely objection. E. g., Wilcoxon v. United States, supra; Beausoliel v. United States, supra; Stores Realty Co. v. City of Cleveland, 41 Ohio St.2d 41, 322 N.E.2d 629 (1975); Brenton State Bank v. Heckmann, 233 Iowa 682, 7 N.W.2d 813, 814-15 (1943); Moore v. State, 96 Tenn. 209, 33 S.W. 1046, 1048-49 (1896); Cady v. Norton, supra. Other cases are distinguishable because there was other sworn testimony sufficient to support the verdict, the unsworn testimony being immaterial or cumulative. E. g., Dunder v. Scuncio, 86 R.I. 370, 134 A.2d 400 (1957); Fetty v. State, 119 Neb. 619, 230 N.W. 440 (1930); State v. Melancon, 163 La. 435, 112 So. 37 (1927). Moreover, in some other cases cited by the Commissioner, the courts found that it was not clear from the record that there was a failure to swear, and therefore the regularity of the proceedings was presumed. E. g., In re Simmons Children, 154 W.Va. 491, 177 S.E.2d 19 (1970); People v. Krotz, 341 Ill. 214, 172 N.E. 135 (1930).
In the present circumstances, then, where (1) the statute expressly requires that the witnesses be sworn, (2) the record is clear that none of the witnesses at the public hearing was sworn and (3) the intervenors were not represented by counsel in a proceeding where there is no right to counsel and representation by counsel is not necessarily encouraged or deemed desirable, we hold that the failure to swear the witnesses is a fatal deficiency. To hold otherwise would be to disregard the importance generally attributed to the oath in our jurisprudence and also the special emphasis the legislature gave it in this particular context by mandating that witnesses be sworn, despite the informality authorized in other respects.
Although we thus decide that the proceedings leading to the award of the lease were fatally flawed and that, therefore, the lease must be set aside, we further conclude that the part of the Superior Court's order declaring the lease to be "voided and of no force or effect" goes too far.[3] Even if now vacated, the lease is not "void" in the sense that it is held an utter nullity from the outset as if never in existence. Rather, the lease did exist as an "operative fact" on which Spinney Creek could reasonably be expected to, and did, rely. See Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 374, 60 S.Ct. 317, 318, 84 L.Ed. 329 (1940), where the Supreme Court of the United States said:
"The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity *41 may have to be considered in various aspects,with respect to particular relations, individual and corporate, and particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. . . . [I]t is manifest ... that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified."
Cf. State v. Higgins, Me., 338 A.2d 159 (1975); Walker v. Birmingham, 388 U.S. 307, 87 S.Ct. 1824, 18 L.Ed.2d 1210 (1967); Lemon v. Kurtzman, 411 U.S. 192, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973).
These considerations are equally applicable when, as in this case, a lease is awarded and is later ascertained to have been awarded pursuant to proceedings violating statutory requirements. Rather than adjudicating the lease "void", and treating it as if it had never been in existence, the justice should have set aside the lease, and he should then have explored the question of fashioning an order to protect reliance interests that may have arisen because the lease had been in existence as an operative fact.
We therefore modify the judgment of the Superior Court accordingly, and we remand the case to that court for further proceedings in accordance with this opinion.
The entry shall be:
(1) Appeal denied;
(2) the judgment of the Superior Court is modified by deleting therefrom the words, "The granting of the lease is voided and of no further effect" and substituting in place thereof the words: "The lease is set aside and is without further effect;"
(3) as thus modified, the judgment of the Superior Court is affirmed;
(4) case remanded to the Superior Court for further proceedings in accordance with the opinion herein.
All concurring.
NOTES
[1] This proceeding at all prior stages bore the title "In re Application of Spinney Creek Oyster Co., Inc." As our discussion hereinafter shows, this title is incorrect. We have therefore changed it to conform to what is appropriate for a proceeding of this kind.
[2] See 6 J. Wigmore, Evidence § 1827 (Chadbourn rev. 1976) and sources cited therein at n. 1.
[3] The judgment reads in this regard:
"[U]nder 5 M.R.S.A. § 11007, subsection 4, the decision of the Commissioner as approved by the Council, is reversed, the granting of the lease is voided and of no force or effect."
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18 Cal.Rptr.3d 306 (2004)
121 Cal.App.4th 1371
ENRIQUE M., Plaintiff and Appellant,
v.
ANGELINA V., Defendant and Respondent.
No. D041780.
Court of Appeal of California, Fourth District, Division One.
August 31, 2004.
*307 Enrique M., in pro. per., for Plaintiff and Appellant.
Olins, Hayes & Miller and Laura H. Miller, San Diego, for Defendant and Respondent.
AARON, J.
Enrique M. (Enrique) filed an order to show cause seeking to modify a stipulated order governing the parenting schedule and schooling of his and Angelina V.'s (Angelina) son, X. The trial court denied Enrique's requests on the ground Enrique had failed to carry his burden of showing a change of circumstances sufficient to justify the modification. On appeal, Enrique contends that he was not required to demonstrate a change of circumstances because he did not seek to modify custody of X. We hold that the standard of proof a parent sharing joint custody must meet to effect a change in parenting time is the best interest of the child, not changed circumstances. We therefore reverse the order and remand for further proceedings.[1]
I
FACTUAL AND PROCEDURAL BACKGROUND
Enrique and Angelina dated from 1995 to 1997. In September 1997, after their relationship had ended, Angelina gave birth to their son, X.
In March 1998, Enrique filed a complaint to establish a parental relationship and child custody and visitation. In the complaint, Enrique alleged that Angelina had refused to allow him to have any involvement with X.
The parties reached a partial agreement in a mediation conducted by Family Court Services (FCS). The parties agreed *308 to a "six-step program of gradually introducing [X.] into his father's life more extensively until such time as the parents are sharing the child fairly equally." After a hearing in April 1998, the trial court entered an order in June 1998 adopting the parties' partial agreement and the FCS recommendations. The court's order stated that the parents would share joint legal custody of the child, that X.'s primary residence would be initially with Angelina, and that Enrique's custody rights would be gradually increased over time until the parents shared joint physical custody.
By the end of 1998, X. was with Enrique from Sunday night through Monday morning, Tuesday night through Wednesday morning, Friday night through Saturday afternoon, and on alternating holidays. X. did well with this arrangement for several years.
Enrique and Angelina were unable to cooperate with each other regarding numerous issues relating to X.'s upbringing. By the time of the entry of the January 2003 order at issue in this appeal, the parties had participated in 17 private mediation sessions, and five mediation sessions with FCS.
In late 2001, a dispute arose over where X. would attend kindergarten the following year. At the time, Angelina lived in San Marcos with her husband and baby daughter, and Enrique lived in San Ysidro with his older daughter from a prior marriage. Angelina was working in Kearny Mesa, and Enrique attended law school at the University of San Diego. Angelina wanted X. to attend Richland Elementary School in San Marcos. She also wanted to modify the parenting schedule once X. started kindergarten so that X. would reside with her during the school week and with Enrique only on the first, third, and fifth weekends of the month. Enrique opposed any change in the parenting schedule, and wanted X. to attend the Language Academy in San Diego, where Enrique's older daughter attended school.
In December 2001, the family court denied a request by Angelina that she be awarded sole legal custody of X. and that Enrique's visitation rights be decreased. The court also ordered that X. be enrolled at Richland Elementary School for kindergarten. In its written order filed in February 2002, the court stated: "[I]t is appropriate to enroll the child in the district of the primary custodial parent. The court sees Mother in that role."
In March 2002, Angelina obtained a temporary restraining order based on her allegation that Enrique had "perpetrated domestic violence" against her by driving his car away while Angelina was leaning into the back window to kiss X. good-bye. Enrique contended that Angelina was exaggerating the incident, and that he had merely "inch[ed]" his car away while Angelina was peeking into the back window.
Concurrently with her application for a temporary restraining order, Angelina filed another request for modification of Enrique's visitation rights. She requested that Enrique's visitation rights be limited to alternating weekends to accommodate X.'s upcoming kindergarten schedule. This was essentially the same request Angelina had made prior to the court's order of December 2001.
Enrique again opposed any change in the parenting schedule. He stated that he was planning to move from San Ysidro to Normal Heights, and he reiterated that he wanted X. to attend The Language Academy with his daughter. In mediation with FCS, the counselor recommended that the parenting schedule be changed once X. entered kindergarten in San Marcos. Specifically, the counselor recommended that *309 when kindergarten started, Enrique's parenting time during the school year be limited to the first, third, and fifth weekends of the month, and one evening per week.
Enrique opposed the FCS recommendation. He submitted a declaration stating that the recommended reduction of his parenting time would be detrimental to his relationship with X. Enrique also requested a continuance in order to allow him time to secure housing in the North Park/Normal Heights area. He contended that once he moved from San Ysidro to North Park, which is closer to San Marcos, he would be able to take X. back and forth to school with no difficulty, even if X. were to remain at Richland Elementary.
On June 19, 2002, the parties entered into a handwritten stipulation and order signed by them and by the family court judge. The parties agreed that they would continue to share joint legal and physical custody, and that X.'s primary residence would be with Angelina. They further agreed that once X. was in school, Enrique would have him from Friday afternoon until Monday morning on the first, third, and fifth weekends of each month. In addition, Enrique would have X. on Thursday evenings preceding each of these weekends, and on Thursdays, overnight, preceding Angelina's weekends. Finally, the parties agreed to share parenting time equally during school breaks, with Enrique having X. on Wednesdays, Thursdays, and alternating weekends, and Angelina having him on Mondays, Tuesdays, and alternating weekends.
In July 2002, X. started kindergarten in Track D at Richland Elementary School, a year-round school with four different tracks, or schedules. Enrique moved to North Park later that month.
In August 2002, Enrique filed the motion underlying this appeal. In his motion, Enrique requested that the parenting schedule be modified to include overnights with him every Tuesday and Thursday. Enrique also requested that X. be enrolled in the Track B schedule at Richland Elementary rather than Track D, so that X.'s school schedule would coincide with Enrique's daughter's school schedule. In the alternative, Enrique requested that he be allowed to enroll X. in The Language Academy.
On January 7, 2003, the court denied Enrique's requests. The court concluded that, due to the stipulation and order of June 19, 2002, "the father bears the burden of showing a substantial and compelling change in circumstances in order to modify the existing order," and that "there isn't evidence of a substantial and compelling change in circumstance that would cause the Court to modify the existing order."
However, the court indicated it would have been inclined to modify the parenting schedule if it were considering the matter in the first instance. The court stated in relevant part:
"By the way, let me say as an aside, I don't really like the current schedule. I don't think it's the best schedule for this child.... The schedule is too complicated for you folks to work through together because you don't cooperate with each other very well.... And, frankly, to be honest with you, I don't think it gives dad enough time with the child....
"Even though I may not think it's the best order for this child and the best order for the child and the father or even the child and the mother, it doesn't matter what I think about it. You've entered into a stipulation that became an order of the court. It became a final order of the court on the issue of custody and visitation. And you haven't *310 shown me enough of a change in circumstance that would allow the Court, as a matter of law, to modify the order.
"If we had to start this from scratch, I'd probably come up with a different plan.... But, again, I don't think, as a matter of law, that I can change this order because I don't think you're shown me thethe level of evidence under the standard of [review] that's required for me to make the change. So that's why I denied the motion.
"The changes that I would impose on this order, if I had the ability to make the change, would not be to add more time with father during the school week. It would be to probably add another weekend.... I'd probably ... [give dad the] first, second, and fourth and give mom the third or something like that. [¶] I'm not doing that, but I'm just telling you that the time that I would add for dad would be weekends time, not school time.
Enrique appeals from the trial court's order of January 7, 2003.
II
DISCUSSION
A. The Trial Court's January 7, 2003 Order is Appealable
We requested supplemental briefing on the appealability of the trial court's January 7, 2003 order. We conclude that the January 7, 2003 order is an appealable order after final judgment.
It is settled that the right to appeal is strictly statutory, and a judgment or order is not appealable unless made so by statute. (H.D. Arnaiz, Ltd. v. County of San Joaquin (2002) 96 Cal.App.4th 1357, 1365-1366, 118 Cal.Rptr.2d 71.) In civil matters, Code of Civil Procedure section 904.1 is the main statutory authorization for appeals. Code of Civil Procedure section 904.1, subdivision (a) provides in relevant part that an appeal may be taken from: a final judgment (subd. (a)(1)); an order made after an appealable judgment (subd. (a)(2)); or "an order made appealable by the provisions of the Probate Code or the Family Code" (subd. (a)(10)).
The Family Code contains no express provision governing appeals of child custody orders, except for those to enforce an order for the return of a child under the Hague Convention on the Civil Aspects of International Child Abduction. (Fam. Code, § 3454.) Thus, the right to appeal a child custody determination is generally limited to final judgments and orders made after final judgments. (Code Civ. Proc., § 904.1, subd. (a)(1) & (2); see In re Marriage of Lasich (2002) 99 Cal.App.4th 702, 705, fn. 1, 121 Cal.Rptr.2d 356, disapproved on other grounds by In re Marriage of Lamusga (2004) 32 Cal.4th 1072, 12 Cal.Rptr.3d 356, 88 P.3d 81 (Lamusga) [finding that trial court's ruling on mother's request for modification of judgment as to custody and visitation was "appealable as an order made after a judgment"].)
In Montenegro v. Diaz (2001) 26 Cal.4th 249, 253-254, 109 Cal.Rptr.2d 575, 27 P.3d 289 (Montenegro), the Supreme Court exercised appellate jurisdiction over an appeal taken from an order entered after a contested hearing on custody. Similarly, in Lamusga, supra, 32 Cal.4th 1072, 12 Cal.Rptr.3d 356 the Supreme Court considered an appeal taken from an order modifying an order entered after a contested hearing on custody. The Lamusga court rejected the argument of one of the parents that there had not "been `a final judicial custody determination,'" reasoning that "[t]he [trial] court's December 23, 1996, `Order After Hearing,' granting joint legal custody to the parties and sole primary *311 physical custody to the mother, constituted a final judicial custody determination. ..." (Id., at p. 1088, fn. 2, 12 Cal. Rptr.3d 356, 88 P.3d 81.)
In this case, as in Montenegro and Lamusga, the trial court initially entered a custody order after a contested hearing. In March 1998, Enrique filed a complaint seeking to establish a parental relationship and requesting child custody and visitation. After a hearing in April 1998, the trial court entered an order which provided that Enrique and Angela would share joint legal custody and that Enrique's physical custody rights would be gradually increased over time until the parents shared joint physical custody. We conclude that the trial court's June 1998 order, entered after a hearing and determining the issues raised in Enrique's complaint, constituted an appealable "final judgment[ ] as to custody." (Montenegro, supra, 26 Cal.4th at p. 259, 109 Cal. Rptr.2d 575, 27 P.3d 289; cf. Lester v. Lennane (2000) 84 Cal.App.4th 536, 559, 101 Cal.Rptr.2d 86 [concluding a temporary custody order is not appealable because it is "interlocutory by definition, since it is made pendente lite with the intent that it will be superseded by an award of custody after trial"].) Accordingly, the January 7, 2003 order is an appealable order after judgment. (See In re Marriage of Lasich, supra, 99 Cal.App.4th at p. 705, fn. 1, 121 Cal.Rptr.2d 356.)
B. The Trial Court Erred in Requiring Enrique to Demonstrate Changed Circumstances to Justify a Modification in the Parties' Parenting Schedule and X.'s School Situation
Enrique claims the trial court erred in requiring him to demonstrate changed circumstances before the court would grant his requests to modify the parties' parenting schedule and X.'s school situation. Enrique maintains that the changed circumstance rule applies only to requests to modify custody, and not to modifications such as those he requested. Enrique's contention as to the appropriate legal standard to apply in ruling on his requests raises a question of law, which we review de novo. (E.g., People v. Butler (2003) 31 Cal.4th 1119, 1127, 6 Cal.Rptr.3d 730, 79 P.3d 1036.)[2]
"In making an initial custody determination, the court must make an award that is in accordance with the best interests of the child." (In re Marriage of Loyd (2003) 106 Cal.App.4th 754, 758, 131 Cal.Rptr.2d 80, citing Burchard v. Garay (1986) 42 Cal.3d 531, 535, 229 Cal. Rptr. 800, 724 P.2d 486; Fam.Code, § 3040.) In Burchard v. Garay, supra, 42 Cal.3d at page 535, 229 Cal.Rptr. 800, 724 P.2d 486, the California Supreme Court *312 explained that the changed circumstance rule is an adjunct to the best interest test in the context of requests to modify custody:
"In deciding between competing parental claims to custody, the court must make an award `according to the best interests of the child.' (Civ.Code, § 4600, subd. (b).) This test, established by statute, governs all custody proceedings. [Citation.] The changed-circumstance rule is not a different test, devised to supplant the statutory test, but an adjunct to the best-interest test. It provides, in essence, that once it has been established that a particular custodial arrangement is in the best interests of the child, the court need not reexamine that question. Instead, it should preserve the established mode of custody unless some significant change in circumstances indicates that a different arrangement would be in the child's best interest. The rule thus fosters the dual goals of judicial economy and protecting stable custody arrangements. [Citations.]"
The California Supreme Court has repeatedly discussed the changed circumstance rule in cases involving requests to modify custody, where granting the request would remove custody from one parent and give it to the other parent. (E.g., Lamusga, supra, 32 Cal.4th at pp. 1081, 1088-1089, 12 Cal.Rptr.3d 356, 88 P.3d 81 [discussing changed circumstance rule where noncustodial parent sought custody of children due to custodial parent's impending move from California to Ohio]; Montenegro, supra, 26 Cal.4th at pp. 253-254, 256, 109 Cal.Rptr.2d 575, 27 P.3d 289 [discussing changed circumstance rule where parents sharing joint physical custody each sought sole physical custody of child]; In re Marriage of Burgess (1996) 13 Cal.4th 25, 37, 51 Cal.Rptr.2d 444, 913 P.2d 473 (Burgess) [concluding "same allocation of the burden of persuasion applies in the case of a custodial parent's relocation, as in any other proceeding to alter existing custody arrangements"]; Goto v. Goto (1959) 52 Cal.2d 118, 122, 338 P.2d 450 ["A showing of changed circumstances is required to support an order changing custody" from one parent to the other].) However, Angelina has not cited, and our research has not uncovered, any published California case in which a court has held that the changed circumstance rule applies to a request to modify the allocation of parenting time, where a preexisting joint custody order was in place and custody was not at issue.
In In re Marriage of Birnbaum (1989) 211 Cal.App.3d 1508, 1513, 260 Cal.Rptr. 210 (Birnbaum), the Court of Appeal expressly held that where a court's order does not change custody, but rather, alters a parenting schedule, the changed circumstance rule does not apply. In Birnbaum, the parents initially shared legal and physical custody of their children. During the school year, the mother had the children during the week, and the father had the children on weekends and Wednesday afternoons. Both the mother and father moved for sole physical custody. The trial court maintained the joint physical custody arrangement, but ordered that the children reside with the father during the week for three out of every four weeks, and with the mother only on weekends and Wednesday nights. (Ibid.)
On appeal, the mother claimed the trial court erred in failing to require the father to demonstrate changed circumstances. The Birnbaum court concluded that the father was not required to demonstrate changed circumstances because there had been no change of custody. The Birnbaum court reasoned:
"[The mother] first asserts that there were no material changed circumstances *313 sufficient to justify a change in custody. `It is settled that to justify ordering a change in custody there must generally be a persuasive showing of changed circumstances affecting the child.' (In re Marriage of Carney (1979) 24 Cal.3d 725, 730, 157 Cal.Rptr. 383, 598 P.2d 36.) The basic deficiency in [the mother's] contention and her appeal from an order she claims changes custody is, whether there were changed circumstances or not, there has been no change of custody. The trial court ordered, `The parties shall continue to have and share joint legal and joint physical custody of their minor children,' just as they did under the prior order. At most there has been a change in what the trial court termed the `co-parenting residential arrangement.'" (Birnbaum, supra, 211 Cal.App.3d at p. 1513, 260 Cal.Rptr. 210.)
The Supreme Court's decision in Burgess is fully consistent with the holding in Birnbaum. In Burgess, the court considered the respective burdens of proof that apply when a parent who has sole physical custody of a child seeks to relocate. (Burgess, supra, 13 Cal.4th at p. 28, 51 Cal. Rptr.2d 444, 913 P.2d 473.) The Burgess court held that the noncustodial parent bears the burden of establishing that a custodial parent's move would cause "prejudice" to the child and that a change in custody is "`essential or expedient for the welfare of the child....' [Citation.]" (Id. at p. 40, 51 Cal.Rptr.2d 444, 913 P.2d 473.) However, the Burgess court further held that even if the noncustodial parent could not carry his or her burden in garnering a change of custody, a trial court could still modify visitation orders:
"Even if `prejudice' is not established and a change in custody is not `"essential or expedient for the welfare of the child"' (In re Marriage of Carney, supra, 24 Cal.3d at p. 730, 157 Cal.Rptr. 383, 598 P.2d 36), however, the trial court has broad discretion to modify orders concerning contact and visitation to minimize the minor children's loss of contact and visitation with the noncustodial parent in the event of a move, e.g., by increasing the amount of visitation with the noncustodial parent during vacations from school, allocating transportation expenses to the custodial parent, or requiring the custodial parent to provide transportation of the children to the noncustodial parent's home. Indeed, such modifications of orders regarding contact and visitation may obviate the need for costly and time-consuming litigation to change custody, which may itself be detrimental to the welfare of minor children because of the uncertainty, stress, and even ill will that such litigation tends to generate." (Burgess, supra, 13 Cal.4th at p. 40, 51 Cal.Rptr.2d 444, 913 P.2d 473.)
The Burgess court's statement that a trial court has the discretion to modify visitation orders, without any suggestion that the noncustodial parent would have to demonstrate changed circumstances to justify such changes, is fully consistent with Birnbaum. Further, the Burgess court's statement that such modifications of visitation could serve to obviate time consuming custody litigation illustrates the distinction between requests to modify visitation, or parenting time, and requests to modify custody.
The Burgess court also "suggested that the changed circumstance rule does not apply when the parents have joint custody." (Montenegro, supra, 26 Cal.4th at p. 254, fn. 1, 109 Cal.Rptr.2d 575, 27 P.3d 289; see also Lamusga, supra, 32 Cal.4th at p. 1089, fn. 3, 12 Cal.Rptr.3d 356, 88 P.3d 81 [stating that when parents share joint physical custody "if it is shown that *314 the best interests of the children require modification or termination of the order, the court `must determine de novo what arrangement for primary custody is in the best interest of the minor children,'" citing Burgess, supra, 13 Cal.4th at p. 40, fn. 12, 51 Cal.Rptr.2d 444, 913 P.2d 473].) The Burgess court explained:
"A different analysis may be required when parents share joint physical custody of the minor children under an existing order and in fact, and one parent seeks to relocate with the minor children. In such cases, the custody order `may be modified or terminated upon the petition of one or both parents or on the court's own motion if it is shown that the best interest of the child requires modification or termination of the order.' (Fam.Code, § 3087.) The trial court must determine de novo what arrangement for primary custody is in the best interest of the minor children." (Burgess, supra, 13 Cal.4th at p. 40, fn. 12, 51 Cal.Rptr.2d 444, 913 P.2d 473.)
As the court in Ruisi v. Thieriot (1997) 53 Cal.App.4th 1197, 1203-1204, 62 Cal. Rptr.2d 766, recognized:
"This aspect of the Burgess decision is consistent with the earlier decision in In re Marriage of Birnbaum (1989) 211 Cal.App.3d 1508, 1513, 260 Cal.Rptr. 210, in which the court reasoned that when the parents have joint physical custody, modification of the coparenting arrangements is not a change of custody requiring change of circumstances. Instead, the trial court has wide discretion to choose a parenting plan that is in the best interest of the child. (Id. at p. 1518, 260 Cal.Rptr. 210.)"
The holding in Birnbaum is also consistent with the fact that the changed circumstance rule is based, in part, on the need to protect "stable custody arrangements," which are believed to be in the best interest of the child. (Burchard v. Garay, supra, 42 Cal.3d at p. 535, 229 Cal.Rptr. 800, 724 P.2d 486) The rule promotes stability by preventing the reexamination of final judicial determinations of custody in the absence of "some significant change in circumstances ...." (Ibid.) However, the Supreme Court recently emphasized that "the changed-circumstance rule should be flexible and should reflect the changing needs of children as they grow up ...." (Montenegro, supra, 26 Cal.4th at p. 259, 109 Cal.Rptr.2d 575, 27 P.3d 289.)
In this case, at the time Enrique brought his motion, he and Angelina had stipulated to joint physical custody of X., and the court had entered an order stating that the parties would share joint legal custody. Enrique's requests to alter the parenting schedule and X's school situation did not amount to a request to modify the joint custody arrangement. The order to show cause form Enrique filed with the court distinguishes between requests to modify "custody" and requests to modify "visitation." Enrique did not check the box indicating a desire to modify custody. Further, at the time Enrique made his request, X. was with him on alternating weekends, during the early evening on Thursdays preceding Enrique's weekends, and on Thursdays overnight preceding Angelina's weekends. In his motion, Enrique requested that the parenting schedule be modified to provide him with one extra overnight with X. each week and an additional overnight every other week. Although Enrique's proposed changes would alter the parenting schedule, in terms of potential instability for X., they were not on a par with a request to change physical custody from sole to joint custody, or vice versa.
Although Enrique did not seek to modify custody, the trial court applied the changed circumstance rule in determining *315 Enrique's motion. Further, with respect to Enrique's request regarding the parenting schedule, the court stated that it would have reached a different result if it were considering the issue de novo. We conclude that the trial court erred in applying the changed circumstance rule to Enrique's requests, and that such error requires reversal.
III
CONCLUSION
The trial court's January 3, 2003 order is appealable. The trial court erred in requiring Enrique to demonstrate changed circumstances to justify a change in the parenting schedule and a change in X.'s school situation. Accordingly, we reverse the order and direct the trial court to reconsider Enrique's requests, applying the best interest test.
IV
DISPOSITION
The order is reversed and remanded with directions that the trial court reconsider Enrique's requests, applying the best interest test. Enrique is awarded costs on appeal.
WE CONCUR: McCONNELL, P.J. and O'ROURKE, J.
NOTES
[1] In light of our reversal of the trial court's order, we need not consider Enrique's other claims.
[2] We recognize that in Montenegro, the Supreme Court applied the abuse of discretion standard in considering whether the trial court had erred in utilizing the changed circumstance rule rather than the best interest test in determining a request for custody. (Montenegro, supra, 26 Cal.4th at p. 255, 109 Cal.Rptr.2d 575, 27 P.3d 289 [concluding trial court "did not abuse its discretion by refusing to apply the changed circumstance rule" in the absence of a final judicial custody determination].) However, the issue of which standard of review to apply was not before the Montenegro court. Therefore, its use of the abuse of discretion standard does not constitute authority for the proposition that this is the proper standard of review. (E.g., People v. Salas (2004) 119 Cal.App.4th 805, 819, 14 Cal.Rptr.3d 689 ["It is axiomatic that cases are not authority for propositions not considered"].) In any event, because Enrique would prevail under either the de novo standard of review or the abuse of discretion standard, the question of which standard of review to apply is not dispositive in this case.
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280 Pa. Superior Ct. 535 (1980)
421 A.2d 851
COMMONWEALTH of Pennsylvania, Appellant,
v.
Robert McDERMOTT.
Superior Court of Pennsylvania.
Argued March 19, 1980.
Filed September 19, 1980.
Petition for Allowance of Appeal Denied July 16, 1981.
*536 Neil Kitrosser, Assistant District Attorney, Philadelphia, for Commonwealth, appellant.
George E. Goldstein, Philadelphia, for appellee.
Before HESTER, WICKERSHAM and LIPEZ, JJ.
HESTER, Judge:
This is a Commonwealth appeal from an order of the Court of Common Pleas of Philadelphia County granting appellee's motion to dismiss pursuant to Pa.R.Cr.P. 1100. The procedural history and facts relevant to the issue on appeal are as follows:
Appellee was charged with attempted rape, indecent assault, aggravated assault and simple assault. The alleged crimes took place on February 11, 1978, late in the evening. The investigating officer obtained a warrant for appellee's arrest on February 13, 1978. The officer attempted to execute the warrant from that date until the end of March, 1978 by visiting areas known to be frequented by the appellee. Prior to his entering the hospital, the officer informed the 25th and 26th police districts of the warrant and distributed several photographs of appellee obtained from the police photo lab. The warrant was filed in the East Detective Division, and the information therein was placed in the N.C.I.C. computer on March 22, 1978.
Another officer ascertained the appellee's address to be 3234 Hartfield Street, but upon investigation, appellee's wife informed him that she did not know her husband's whereabouts. This officer also investigated several of appellee's known hangouts, and checked with his employer, Father McGowan. None of these attempts proved successful in locating appellee. Finally, on October 21, 1978, an officer observed appellee sitting on his front porch and arrested him.
*537 However, during the time in question, appellee was arrested twice by the same detective division which had secured the warrant. First, on June 14, 1978, Detective Sippel of East Detective Division was investigating a spouse abuse case at Episcopal Hospital involving appellee's spouse. Appellee was present in an intoxicated and drugged state. Sippel questioned him, then transported him to East Detective Division. Sippel placed appellee's name into the N.C. I.C. police computer, which indicated no outstanding warrants for him. Appellee was then returned to the hospital due to his condition, where he was later discharged.
On July 24, 1979, Officer Hawthorne was ordered to proceed to the Hartfield Street address to arrest appellee due to the fact that he had allegedly given refuge to escaped prisoners. The information had been received from the State Police. Officer Hawthorne ran a computer check which did not disclose an outstanding warrant for appellee. Appellee was later released.
On January 25, 1979, appellee filed a motion to dismiss pursuant to Pa.R.Crim.P. 1100. After hearing testimony on January 30, February 9 and March 13, 1979, the trial court granted appellee's motion finding a lack of due diligence on the part of the police in locating appellee.
Appellant contends the trial court erred in finding a lack of due diligence because of the computer errors on two occasions.
Pa.R.Crim.P. 1100(a)(2) provides:
"Trial in a court case in which a written complaint is filed against the defendant . . . shall commence no later than one hundred eighty (180) days from the date on which the complaint is filed."
Thus, the mandatory period commenced running on February 13, 1978 and would end on August 12, 1978.
However Pa.R.Crim.P. 1100(d)(1) provides:
"(d) In determining the period for commencement of trial, there shall be excluded therefrom such period of delay at any stage of the proceedings as results from:
*538 (1) the unavailability of the defendant or his attorney. . ."
The comment to Rule 1100, quoted with approval in Commonwealth v. Mitchell, 472 Pa. 553, 372 A.2d 826 (1977) provides, in part:
"For purposes of subparagraph (d)(1), in addition to any other circumstances precluding the availability of the defendant or his attorney, the defendant should be deemed unavailable for any period of time during which he could not be apprehended because his whereabouts were unknown and could not be determined by due diligence. . . ."
Appellant maintains that appellee was unavailable from February 13, 1978 until October 21, 1978, when he was arrested. Thus, the question in this case is whether the Commonwealth proved by a preponderance of the evidence that it acted with due diligence in locating and apprehending appellant. Commonwealth v. Mitchell, supra. In approving police procedures as employed in the instant case, our Supreme Court stated in Commonwealth v. Mitchell, supra:
"It is not the function of our courts to second-guess the methods used by police to locate accused persons. The analysis to be employed is whether, considering the information available to the police, they have acted with diligence in attempting to locate the accused. Deference must be afforded the police officer's judgment as to which avenues of approach will be fruitful." (472 Pa. at 566)
Furthermore, in Commonwealth v. Jones, 256 Pa.Super. 366, 389 A.2d 1167 (1978), we held that the Commonwealth is not required to exhaust every conceivable method of locating a defendant. Reasonable steps must be taken. In Jones, the appellant also attempted to prove his availability by introducing evidence that he was apprehended in the same area during the time period in question. Based upon our holding in Jones, supra, we therefore find that the police exercised due diligence in apprehending the appellee.
*539 Accordingly, the order of the trial court is reversed, and the case is remanded for trial.
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649 So. 2d 385 (1995)
Charles TATE
v.
L & A CONTRACTING.
No. 94-C-2834.
Supreme Court of Louisiana.
January 27, 1995.
Denied.
WATSON, J., not on panel.
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I attest to the accuracy and
integrity of this document
New Mexico Compilation
Commission, Santa Fe, NM
'00'04- 09:46:26 2013.04.15
Certiorari Granted, March 29, 2013, No. 34,035
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2013-NMCA-047
Filing Date: January 24, 2013
Docket No. 30,768
TOWN OF EDGEWOOD,
Petitioner-Appellee,
v.
STATE OF NEW MEXICO
MUNICIPAL BOUNDARY
COMMISSION,
Respondent-Appellant.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Raymond Z. Ortiz, District Judge
Robles, Rael & Anaya, P.C.
Marcus J. Rael, Jr.
Robert M. White
Vanessa R. Chavez
Albuquerque, NM
for Appellee
Gary K. King, Attorney General
Mark Reynolds, Assistant Attorney General
Santa Fe, NM
for Appellant
OPINION
KENNEDY, Chief Judge.
{1} The Town of Edgewood (the Town) petitioned the Municipal Boundary Commission
1
(the Commission) to annex unincorporated land that was intermixed with its incorporated
areas. The Commission denied the petition. On certiorari review, the district court of Santa
Fe County reversed the Commission’s decision and ordered the annexation, holding that the
Commission had overstepped its authority and considered matters outside of its statutory
prerogatives. The Commission filed a petition for a writ of certiorari, which our Court
granted. We now reverse.
{2} The Commission has the power to determine the statutory sufficiency of a petition
and may make that determination at any time in the proceedings. The Commission properly
rejected the Town’s petition for failing to establish ownership of roads contained in and
bordering the territory and for accounting for the ownership and consequences of ownership
of roads owned by other government entities in and bordering the territory as required by
NMSA 1978, Section 3-7-18 (1965) and NMSA 1978, Section 3-7-4 (1965). We hold that
the Commission properly denied the annexation.
I. BACKGROUND
{3} The Town filed its petition with the Commission to annex territory in the
unincorporated area of Santa Fe County (the County) in September 2009. NMSA 1978, §
3-7-11(A)(1) (1995); NMSA 1978, § 3-7-13 (1983) (setting out requirements for filing of
a petition to annex and its form). A meeting of the Commission was set in due course as
required by NMSA 1978, Section 3-7-14(B) (1965). At the meeting in November 2009, two
main issues arose: (1) the designation, ownership, and inclusion of roads within and
bordering the territory proposed for annexation by the petition; and (2) whether the Town
can provide municipal services to the annexed area within a reasonable period of time. The
Town’s petition included a map of the territory proposed for annexation, which identified
the territory to be annexed in relation to the Town and surrounding areas. It included roads
both within and bordering the proposed annexation. The Town’s map did not identify who
owned these roads. The Commission questioned whether any roads belonged to the state,
county, or federal governments, and the extent to which the Town had taken such ownership
into account. The Town’s attorney stated that there were some state and county roads on the
map submitted. The Town stated that it had no intention of annexing any roads belonging
to another governmental entity and no intention of maintaining any such roads.
Consequently, the Town did not contact any other government that might own roads within
or bordering the territory it sought to annex. The Town Administrator, Karen Machalick,
provided some testimony regarding who maintained the roads as well as some ownership
information. The Commission denied the annexation petition, holding in part that the Town
had not properly included in its petition all streets located on the boundary of the territory
proposed for annexation and that the map accompanying the petition did not show any
federal, state, or county roads existing within that territory.
{4} The Town sought review by way of certiorari to the district court, which reversed the
Commission, holding that the Commission’s decision was not “in accordance with law.” In
coming to this conclusion, the district court held that the Commission cannot look beyond
2
the two statutory requirements included in NMSA 1978, Section 3-7-15 (1965) in making
its decision, namely, that the territory to be annexed is contiguous to the municipality and
that municipal services may be delivered to the annexed territory. It also held that the maps
attached to the Town’s petition provided fair and sufficient notice of the territory proposed
to be annexed and that the County’s use interest in the roads to be annexed did not create a
bar to annexation, by relying on Santa Fe County Board of County Commissioners v. Town
of Edgewood, 2004-NMCA-111, 136 N.M. 301, 97 P.3d 633. The district court concluded
that the Commission did not have the authority to reject the petition. We granted the
Commission’s petition for a writ of certiorari requesting that this Court review the decision
of the district court.
II. DISCUSSION
{5} The Commission has statutory power to determine the annexation of territory to a
municipality when the municipality brings a petition to annex. Section 3-7-11(A)(1). “On
a writ of certiorari, we employ an administrative standard of review when determining
whether a district court, sitting as an appellate court, erred in its review of an administrative
decision.” Kirkpatrick v. Bd. of Cnty. Comm’rs of Santa Fe Cnty., 2009-NMCA-110, ¶ 10,
147 N.M. 127, 217 P.3d 613. Thus, our standard of review is the same as that employed by
the district court. Mutz v. Mun. Boundary Comm’n, 101 N.M. 694, 697, 688 P.2d 12, 15
(1984). On appeal of the Commission’s decisions, a reviewing court is limited to questions
of law, including whether the administrative body acted fraudulently, arbitrarily, or
capriciously, whether substantial evidence exists to support the decision, and whether the
administrative body acted within its authority. Id. at 702, 688 P.2d at 20. Although it may
correct a misapplication of the law, the reviewing court generally may not substitute its
judgment for that of the administrative agency. Id. at 697, 688 P.2d at 15. “In applying
whole record review, this Court reviews both favorable and unfavorable evidence to
determine whether there is evidence that a reasonable mind could accept as adequate to
support the conclusions reached by the fact finder.” Levario v. Ysidro Villareal Labor
Agency, 120 N.M. 734, 737, 906 P.2d 266, 269 (Ct. App. 1995).
{6} We first address the question of authority and whether the Commission is limited to
considering only the issues of contiguity and the provision of municipal services under
Section 3-7-15. We conclude that, in addition to determining these issues, the Commission
may consider and determine the statutory sufficiency of the petition. We next consider the
sufficiency of the evidence and determine that there was sufficient evidence to support the
Commission’s determination that statutory requirements regarding identification of roads
on the map were not met.
A. The Commission May Determine the Sufficiency of Petitions
{7} Our first concern is whether the Commission is limited to consideration of only the
two issues of contiguity and provision of services. In this case, the issue is whether the
Commission may also consider the requirement of NMSA 1978, Section 3-7-13(A)(3)(b)
3
(1965) for designation of highways and the requirement of Section 3-7-18 that the proposed
annexation include any streets located along the boundary of the territory to be annexed.
{8} A petition to annex must include information about the roads within and along the
boundary of the territory proposed to be annexed. Section 3-7-13(A)(3)(b). Pursuant to the
statute, the petition shall be accompanied by a map of the territory proposed to be annexed,
which must show, among other items, “any federal, state[,] or county highways which may
exist in the territory proposed to be annexed[.]” Id. Territory owned by the federal
government and its instrumentalities, or the State of New Mexico and its political
subdivisions, may be annexed upon consent of that government entity. Section 3-7-4(A).
Finally, “[a]ny municipality annexing any territory shall include in the annexation any streets
located along the boundary of the territory being annexed.” Section 3-7-18 (defining “street”
as “any thoroughfare that is open to the public and has been accepted by the board of county
commissioners as a public right-of-way”). Combined, these statutes require that a petition
to annex territory include all roads in and along the boundaries of the territory, and if they
are owned by government subdivisions, that consent be obtained to annex those roads from
those governments.
{9} Our opinion, in State ex rel. State Highway & Transportation Department v. City of
Sunland Park, 1999-NMCA-143, ¶ 21, 128 N.M. 371, 993 P.2d 85, confirms that an
annexation must comply with all statutory requirements, not just with the provisions of
Section 3-7-15(A). There, we invalidated an annexation for not including an adjacent state
road. City of Sunland Park, 1999-NMCA-143, ¶ 27. Section 3-7-18 requires the annexation
of roads adjacent to the territory to be annexed and failing to include roads adjacent to
territory in an annexation petition rendered the petition invalid. City of Sunland Park, 1999-
NMCA-143, ¶ 24.
{10} In this appeal, the Town, like the district court below, incorrectly relies on our
holding in Edgewood. In that case, we rejected Santa Fe County’s standing to object to an
annexation by the town because it did not own roads within the annexed area. 2004-NMCA-
111, ¶ 8. The question of compliance with Sections 3-7-13(A)(3)(b) and 3-7-18 was not the
issue. Edgewood primarily established that maintaining public roads did not create an
ownership interest in the roads, and a lack of ownership precluded a county’s standing to
object to a road’s annexation. 2004-NMCA-111, ¶¶ 11-14. In the present case, the district
court concluded that the “County’s use interest in the roads to be annexed does not create
a bar to annexation.” However, the issue before us is not the use interest in the road, but
rather whether the Town filed a petition that meets statutory requirements. Edgewood is not
applicable to a determination of the sufficiency of the petition regarding required statutory
representations and inclusions.
{11} The next question is how and when the Commission can consider such defects. The
Town concedes that the Commission is not required to review a petition if its statutory
preconditions are not met, but it asserts that a review of the statutory sufficiency of the
petition must be completed prior to the Commission taking up the merits of the petition. The
4
Town’s rationale seems to be that because a petition may not be denied for any other reason
than those two contained in Section 3-7-15, it cannot be rejected at the end of the
Commission hearing for any other reason. We disagree, as we regard rejection of a petition
that does not comply with statutory form requirements to be different than denial of a
petition based on the merits of the petition itself.
{12} We have evaluated a similar situation and noted that a board, reviewing a petition for
incorporation, may review the statutory sufficiency of the petition at any time. See Citizens
for Incorporation, Inc. v. Bd. of Cnty. Comm’rs, 115 N.M. 710, 713-14, 858 P.2d 86, 89-90
(Ct. App. 1993). There, we held that a board’s determination that the petition was
insufficient should be upheld if supported by substantial evidence. Id. at 714, 858 P.2d at
92. We further held that the sufficiency of the petition is a jurisdictional issue and, therefore,
that the statutory prerequisites for a petition can be raised at any time. Id. at 716, 858 P.2d
at 92. The court in Citizens for Incorporation held that a board may properly determine the
sufficiency of a petition for municipal incorporation and its supporting map. Id. In Citizens
for Incorporation, the sufficiency issue was not raised prior to the hearing on other issues,
but we held that this fact did not bar the board from determining that the petition was
insufficient under applicable statutes. Id. Because the incorporation and annexation statutes
are similarly structured, we adopt the rationale of Citizens for Incorporation and determine
that the Commission may consider the sufficiency of the petition at any time.
{13} The requirements of Sections 3-7-13(A)(3)(b) and -18 are preconditions to a petition
being properly before the Commission. The Commission concluded as a matter of law that
the Town did not include in its annexation request all streets as required by these statutes.
We regard the Commission’s conclusion to be that the petition did not conform with the
legal requirements set forth by the Legislature in its statutes governing annexation.
{14} We conclude that the Commission has the power to review petitions for their
sufficiency and compliance with the annexation statutes. The Commission can request
further detail at any time in the hearing should concerns arise about the petition and its
supporting map. The Commission was free to determine that the petition did not meet the
requirements of Sections 3-7-13 and -18. Having concluded from testimony concerning the
contents of the petition and its supplemental materials that the petition did not meet the
statutory requirements, the Commission could then determine that the petition was invalid.
Because this determination of its jurisdiction must be supported by substantial evidence, we
now review the Commission’s findings and conclusions according to a substantial evidence
standard of review.
B. The Commission’s Determination That the Town Filed a Non-Compliant
Petition Was Supported by Substantial Evidence
{15} In reviewing the Commission’s decision, we look at the entire administrative record
to see if substantial evidence supports the outcome. Mutz, 101 N.M. at 699, 688 P.2d at 17.
At the hearing before the Commission, the Town conceded that its map contained state and
5
county roads. However, the county roads were not designated as such. The Commission
asked if the Town had obtained permission to annex county roads pursuant to Section 3-7-
4(A). The Town responded that it was “not annexing any state or county property” and that
the roads would remain state and county roads unless and until the state and county desired
to dedicate them to the Town.
{16} The Town relied on Section 3-7-4(B), which states that an annexation can be valid
despite containing land belonging to other governmental entities within the territory to be
annexed. The Town testified that about forty-five miles of county road existed within the
area proposed for annexation. Other testimony established that the territory sought to be
annexed was bordered by Old Route 66, which appeared on the Town’s map as State Route
333. Testimony referred to property to be annexed as being bordered by County Road 6C
and Highway 344. The exhibits to the petition included multiple property locations on NM
344 and Old U.S. 66, which suggest the existence of state and county roads within and along
the areas to be annexed.
{17} The Commission’s order denying annexation found that, while the map showed roads
that exist “within and along the boundary of the territory proposed to be annexed,” the map
did not indicate whether the roads were owned by any other government entity. The
Commission found that county and state roads were “within or border the territory proposed
to be annexed” and that the Town was “unable to ascertain who the actual owner is of
several of roads within or on the boundary of the territory.” It also found that the Town had
no intention to annex any federal, state, or county roads, and no intention of having any
government entity owning such a road, to continue to maintain it. The Town did not indicate
any intention of annexing other, presumably private, roads that were not included in the
petition. Based on our review of the exhibits and the testimony given at the hearing, all of
the Commission’s findings are supported by substantial evidence.
{18} Having concluded that substantial undisputed evidence supports both the
Commission’s findings of fact and conclusions of law regarding the non-compliance of the
Town’s petition with applicable statutes, we further conclude that the Commission’s decision
that the Town did not comply with statutory requirements for its petition was not arbitrary
and capricious. Our ruling being dispositive of the appeal, we do not address the issue of
whether the Town would be able to provide municipal services to the annexed area.
III. CONCLUSION
{19} The district court erred in holding that the Commission’s review of the sufficiency
of the petition was limited. The Commission has the power to evaluate the annexation
petition’s compliance with statutory requirements for ownership and documentation of roads.
There is no need to address any further issues because the petition did not warrant further
proceedings before the Commission. We therefore reverse the district court and affirm the
decision of the Commission.
6
{20} IT IS SO ORDERED.
____________________________________
RODERICK T. KENNEDY, Chief Judge
WE CONCUR:
____________________________________
CYNTHIA A. FRY, Judge
____________________________________
CELIA FOY CASTILLO, Judge Pro Tem
Topic Index for Town of Edgewood v. N.M. Mun. Boundary Comm'n, No. 30,768
ADMINISTRATIVE LAW AND PROCEDURE
Administrative Appeal
Arbitrary and Capricious Actions
Standard of Review
Sufficiency of Evidence
APPEAL AND ERROR
Certiorari
Substantial or Sufficient Evidence
GOVERNMENT
Annexation
Counties
Highways
Municipalities
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477 So. 2d 565 (1985)
STATE of Florida, Petitioner,
v.
Robert Gene DAVIS, Respondent.
No. 66081.
Supreme Court of Florida.
October 17, 1985.
Jim Smith, Atty. Gen. and Joan Fowler Rossin, Asst. Atty. Gen., West Palm Beach, for petitioner.
Richard L. Jorandby, Public Defender and Tatjana Ostapoff, Asst. Public Defender, Fifteenth Judicial Circuit, West Palm Beach, for respondent.
OVERTON, Justice.
This is a petition to review Davis v. State, 458 So. 2d 42 (Fla. 4th DCA 1984), remanding respondent's case for resentencing because the trial court used both permissible and impermissible reasons to depart from the sentencing guidelines. The district court certified the following question as a matter of great public importance:
If the scoresheets make provision for prior convictions, can those convictions also constitute clear and convincing reasons for aggravated punishment outside the guidelines?
Id. at 44. We have jurisdiction. Art. V, § 3(b)(4), Fla. Const.
We answered that question in Hendrix v. State, 475 So. 2d 1218 (Fla. 1985), in which we held that, since prior convictions are already factored in as a part of the presumptive guidelines sentence, they may not be used as a clear and convincing reason for departure. See also Deer v. State, 476 So. 2d 163 (Fla. 1985); Gregory v. State, 475 So. 2d 1221 (Fla. 1985).
Accordingly, we approve the decision of the district court.
It is so ordered.
BOYD, C.J., and ADKINS, McDONALD, EHRLICH and SHAW, JJ., concur.
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17 Cal.Rptr.3d 139 (2004)
121 Cal.App.4th 505
CITY OF LOS ANGELES, Plaintiff and Appellant,
v.
FURMAN SELZ CAPITAL MANAGEMENT, L.L.C., Defendant and Respondent.
No. B168916.
Court of Appeal, Second District, Division Five.
August 9, 2004.
Review Denied November 10, 2004.
*140 Rockard J. Delgadillo, City Attorney, Claudia McGee Henry, Senior Assistant City Attorney, Noreen Vincent, Assistant City Attorney, Kim Rodgers Westhoff and Miguel A. Dager, Deputy City Attorneys, for Plaintiff and Appellant.
Sheppard, Mullin, Richter & Hampton and James F. McShane, Century City, for Defendant and Respondent.
GRIGNON, J.
In this case, we are concerned with the interplay between two unrelated provisions of the Revenue and Taxation Code. The first provision imposes a higher net income tax rate on financial corporations in lieu of other taxes, including municipal taxes. (Rev. & Tax.Code, § 23182.) The second provision permits a wholly-owned limited liability company to be disregarded as a separate entity for tax purposes and to be taxed as a division of its parent corporation. (Rev. & Tax.Code, § 23038.) In this case, a municipality imposes a gross receipts tax on limited liability companies doing business within the municipality and is seeking to impose its gross receipts tax on a limited liability company, wholly owned by a financial corporation, whose separate existence has been disregarded for tax purposes. The municipality acknowledges that it could not impose the gross receipts tax on the parent financial corporation, but contends the in lieu tax provisions are not applicable to the limited liability company. We conclude the municipality may not levy taxes on a limited liability company wholly owned by a financial corporation, where the income of the limited liability company has been included in the income of the parent financial corporation and subjected to the higher income tax rate imposed on financial corporations in lieu of other taxes.
PROCEDURAL BACKGROUND
Plaintiff and appellant City of Los Angeles (the City) imposes a business tax measured by gross receipts on limited liability companies doing business within the City. The City levied the tax on defendant and respondent Furman Selz Capital Management, L.L.C. (Furman) for the tax years 1999-2001. Furman disputed the tax. On October 15, 2002, the City filed a complaint against Furman for money due on an unpaid tax assessment. The City sought a total of $279,410.96 in taxes, interest, and penalties. Furman filed an answer that alleged as a defense that it is a limited liability company wholly owned by a financial corporation, whose separate existence has been disregarded for tax purposes and whose net income has been subjected to the higher net income tax rate imposed on financial corporations. A one-day court trial was held on May 19, 2003. The trial court entered judgment in favor of Furman. The City filed a timely notice of appeal.
FACTS
Furman provides money management, investment advice, and other financial services to institutional clients. Furman is a limited liability company formed in 1995 under the Delaware Limited Liability Company Act (Del.Code Ann. tit. 6, § 18-101 et seq.) and authorized to do business in California since 1996. Furman is owned by a single member, ING Furman Selz Asset Management L.L.C. In turn, Asset Management is owned by a single member, ING Financial Holdings Corporation (ING).
*141 ING is a financial corporation under California law. As a financial corporation, ING pays a higher net income tax rate than the standard corporate tax rate and is exempt from most other state, county, and municipal taxes. Furman has elected for tax purposes to have its separate entity disregarded and to be treated as a division of ING. ING's consolidated state income tax return includes Furman's revenues, expenses, and other financial information.
In February 2002, the City assessed a business tax against Furman based on Furman's gross receipts for the period 1999-2001. In April 2002, the City threatened to suspend or revoke Furman's certificate to do business. Furman sent a letter to the City asserting that it was a division of ING for tax purposes and entitled to immunity from the City's tax.
DISCUSSION
Standard of Review
The material facts are undisputed. Where the facts are undisputed, only questions of law confront us and the trial court's findings do not bind us. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799, 35 Cal.Rptr.2d 418, 883 P.2d 960; Mole-Richardson Co. v. Franchise Tax Bd. (1990) 220 Cal.App.3d 889, 894, 269 Cal.Rptr. 662.) We may examine the facts and make our own conclusions and findings. (Gates Rubber Co. v. Ulman (1989) 214 Cal.App.3d 356, 363, 262 Cal.Rptr. 630; Newman v. Franchise Tax Bd. (1989) 208 Cal.App.3d 972, 977, 256 Cal.Rptr. 503.)
Historical Background
Historically, federal statutes severely restricted state taxation of national banks. (Western States Bankcard Assn. v. City and County of San Francisco (1977) 19 Cal.3d 208, 215-216, 137 Cal.Rptr. 183, 561 P.2d 273.) The federal statutory scheme required tax-rate parity between national and state banking institutions. (Ibid.) The federal statutory scheme permitted the states to levy only one tax on national and state banking associations in lieu of all other taxes at a rate no higher than the combined rate of tax imposed on other corporations. (Ibid.) In 1929, California adopted an in lieu tax on net income and made it applicable to all banks within the state. (Cal. Const., art. XIII, § 27; Rev. & Tax.Code, §§ 23181, 23182.) "The end result was that competing state and national institutions received the same benefits and paid taxes at the same rate." (Western States Bankcard Assn. v. City and County of San Francisco, supra, 19 Cal.3d at pp. 215-216, 137 Cal.Rptr. 183, 561 P.2d 273.)
In 1979, the Legislature amended Revenue and Taxation Code section 23182 by extending the in lieu income tax to financial corporations. (California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal.3d 1, 9, 283 Cal.Rptr. 569, 812 P.2d 916.) A financial corporation predominantly deals with money or moneyed capital in substantial competition with banks. (Cal.Code Regs., tit. 18, § 23183, subd. (a).) The purpose of the amendment was to ensure competitive parity between banks and financial corporations by imposing an equivalent tax burden. (California Fed. Savings & Loan Assn. v. City of Los Angeles, supra, 54 Cal.3d at p. 10, 283 Cal.Rptr. 569, 812 P.2d 916.) "The amendment to Revenue and Taxation Code Section 23182 contained in this act reaffirms the Legislature's longstanding purpose of insuring competitive parity between banks and financial corporations by subjecting both types of institutions to an equivalent tax burden. Equal tax treatment of banks and financial corporations promotes the continued existence of both types of institutions thereby affording a full range of financial services at competitive rates. *142 Moreover, taxation of banks and financial corporations at the rate determined under Revenue and Taxation Code Section 23186 insures that their tax burden will be comparable to the combined state and local tax burdens of nonfinancial corporations subject to Revenue and Taxation Code Section 23151. [¶] The Legislature further finds that divergent and competing local tax measures imposed on financial corporations impair the uniform statewide regulation of banks and financial corporations. For this reason and those earlier expressed, the Legislature declares that the state, by this amendment, has preempted such local taxation of financial corporations to the same extent as the state has heretofore preempted local taxation of banks." (Stats.1979, ch. 1150, § 20, p. 4220.)
In short, over the years, the Legislature has attempted to adopt a statutory scheme that achieves a "`tax rate parity,' between federal and state commercial banks, between commercial banks and financial corporations (including savings banks), and between banks and financial corporations and nonfinancial corporations...." (California Fed. Savings & Loan Assn. v. City of Los Angeles, supra, 54 Cal.3d at pp. 18-19, 283 Cal.Rptr. 569, 812 P.2d 916.)
At the same time as the amendment extending the in lieu income tax to financial corporations, the Legislature mitigated the loss to local governments resulting from the elimination of municipal taxes on financial corporations by establishing a fund for a portion of the revenues paid to the state by financial corporations, which was to be allocated to local governments. (California Fed. Savings & Loan Assn. v. City of Los Angeles, supra, 54 Cal.3d at p. 9 & fn. 7, 283 Cal.Rptr. 569, 812 P.2d 916.) However, the Legislature did not renew the fund in 1982 or thereafter. (Ibid.) Cities do not receive any portion of the increased revenues collected by the state from financial corporations. (Id. at pp. 11, 23-24, 283 Cal.Rptr. 569, 812 P.2d 916.) Nevertheless, cities may not impose business license taxes in the form of a gross receipts tax on financial corporations. (Ibid.)
State Taxation of Financial Corporations
Except for banks and financial corporations, every corporation doing business in California that is not expressly exempt from taxation must pay a tax to the state based on the corporation's net income at the rate of 8.84 percent. (Rev. & Tax. Code, § 23151.) Banks and financial corporations must pay a tax to the state based on their net income at the rate of 10.84 percent. (Rev. & Tax.Code, §§ 23181, 23183, 23186.) The higher rate of net income tax imposed on banks and financial corporations is "in lieu of all other taxes and licenses, state, county and municipal, upon the said banks and financial corporations except taxes upon their real property, local utility user taxes, sales and use taxes, state energy resources surcharge, state emergency telephone users surcharge, and motor vehicle and other vehicle registration license fees and any other tax or license fee imposed by the state upon vehicles, motor vehicles or the operation thereof." (Rev. & Tax.Code, § 23182.) Revenue and Taxation Code section 23182 prohibits a city from levying a business tax measured by gross receipts on a financial corporation. (California Fed. Savings & Loan Assn. v. City of Los Angeles, supra, 54 Cal.3d at pp. 18-25, 283 Cal.Rptr. 569, 812 P.2d 916.)
Limited Liability Companies
"A limited liability company is a hybrid business entity that combines aspects of both a partnership and a corporation. It is formed under the Corporations Code *143 and consists of `members' who own membership interests. Members may be individuals, corporations, partnerships, or other limited liability companies. [Citation.] [¶] The company has a legal existence separate from its members. It provides members with limited liability to the same extent enjoyed by corporate shareholders, yet allows members to actively participate in management and control." (9 Witkin, Summary of Cal. Law (2002 supp.) Partnership, § 120, pp. 292-293; Corp.Code, § 17000 et seq.; Warburton/Buttner v. Superior Court (2002) 103 Cal.App.4th 1170, 1187-1188, 127 Cal.Rptr.2d 706.)
Since 1994, California law has permitted the formation of various quasi-corporate entities, such as limited liability companies, and taxed them as partnerships or corporations depending on the number of their corporate characteristics. (Sen. Rules Com., Off. of Sen. Floor Analyses, Rep. on Sen. Bill No. 1234 (1997-1998 Reg. Sess.) as amended Aug. 25, 1997.) Federal tax law was the same. Then the federal tax law was simplified to permit a limited liability company to elect whether to be classified as a corporation for tax purposes. (Ibid.) In 1997, California adopted similar legislation in order to conform California tax law to federal tax law. (Ibid.) A limited liability company may elect whether to be classified as a corporation for tax purposes; however, the company must make the same election for federal and state tax purposes. (Ibid.)
Revenue and Taxation Code section 23038, subdivision (2)(B) was amended in 1997 to read as follows: "For purposes of the preceding subparagraph, the classification of a business entity (including a business trust) as an association taxable as a corporation (under Chapter 3 (commencing with Section 23501)) shall be determined under regulations of the Franchise Tax Board, which shall be consistent with federal regulations as in effect January 1, 1997, that classify a business entity as a partnership or an association taxable as a corporation or disregard the separate existence of certain business entities for tax purposes. [¶] (ii) The classification of an eligible business entity as a partnership or an association taxable as a corporation for purposes of this part, Part 10 (commencing with Section 17001), and Part 10.2 (commencing with Section 18401) shall be the same as the classification of the entity for federal tax purposes. [¶] (iii) If the separate existence of an eligible business entity is disregarded for federal tax purposes, the separate existence of that business entity shall be disregarded for purposes of this part, Part 10 (commencing with Section 17001), and Part 10.2 (commencing with Section 18401), other than Section 17941 (relating to the tax of a limited liability company), Section 17942 (relating to the fee of a limited liability company), Section 18633.5 (relating to the return of a limited liability company), and Sections 17039 and 23036 (relating to tax credits)."
The Franchise Tax Board adopted regulations implementing the legislation. (Cal. Code Regs., tit. 18, § 23038(b).) Under the regulations, unincorporated business entities with a single owner can choose to be recognized or disregarded for tax purposes as an entity separate from their owners. (Id., § 23038(b)-1, subd. (a)(4).) If recognized as an entity separate from its owner for tax purposes, the entity is taxed as a corporation. (Id., § 23038(b)-2, subd. (a).) If disregarded as an entity separate from a corporate parent for tax purposes, the entity's activities are treated in the same manner as a division of its corporate parent. (Ibid.) With certain exceptions, an entity disregarded as separate is disregarded for purposes of the Bank and Corporation Tax Law commencing with Revenue and Taxation Code section *144 23001. (Rev. & Tax.Code, § 23038, subd. (2)(B)(iii).) The enumerated exceptions are: the minimum limited liability company tax (Id., § 17941); the graduated limited liability company fee (Id., § 17942); the requirement to file an information return (Id., § 18633.50); and certain limitations on tax credits (Id., §§ 17039, 23036).
The City's Gross Receipts Tax
The City imposes a business tax on all persons engaged in business within the City. The tax is measured by the gross receipts of the business. Los Angeles Municipal Code section 21.190, subdivision (a) provides: "For every person engaged in any trade, calling, occupation, vocation, profession or other means of livelihood, as an independent contractor and not as an employee of another, and not specifically taxed by other provisions of this article, the tax shall be $106.43 per year or fractional part thereof for the first $18,000.00 or less of gross receipts, plus $5.91 per year for each additional $1,000.00 of gross receipts or fractional part thereof in excess of $18,000.00." A "person" is "any individual, ... firm, partnership, joint venture, club, company, joint stock company, business trust, domestic or foreign corporation, association, syndicate, society, or any group of individuals acting as a unit...." (L.A.Mun.Code, § 21.00, subd. (d).) The business tax is not enforced against financial corporations. (L.A.Mun.Code, § 21.03, subd. (c).) Except where otherwise prohibited by the state Constitution or state statutes, a city may lawfully impose a business tax based on gross receipts on an entity doing business within the city. (Weekes v. City of Oakland (1978) 21 Cal.3d 386, 390-395, 146 Cal.Rptr. 558, 579 P.2d 449.)
Statutory Interpretation
"We begin with the touchstone of statutory interpretation, namely, the probable intent of the Legislature. To interpret statutory language, we must `ascertain the intent of the Legislature so as to effectuate the purpose of the law.' [Citation.]" (California Teachers Assn. v. Governing Bd. of Rialto Unified School Dist. (1997) 14 Cal.4th 627, 632, 59 Cal.Rptr.2d 671, 927 P.2d 1175.) "`Our first step [in determining the Legislature's intent] is to scrutinize the actual words of the statute, giving them a plain and commonsense meaning. [Citations.]' [Citation.]" (Id. at p. 633, 59 Cal.Rptr.2d 671, 927 P.2d 1175.) "`In analyzing statutory language, we seek to give meaning to every word and phrase in the statute to accomplish a result consistent with the legislative purpose....' [Citations.]" (Id. at p. 634, 59 Cal.Rptr.2d 671, 927 P.2d 1175.) "`The words of the statute must be construed in context, keeping in mind the statutory purpose....' [Citation.]" (Kane v. Hurley (1994) 30 Cal.App.4th 859, 862, 35 Cal.Rptr.2d 809.) "`"`If the language [of a statute] is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the [Legislature]....'"' [Citation.]" (People v. Ramirez (1995) 33 Cal.App.4th 559, 563, 39 Cal.Rptr.2d 374.)
Resolving the Issue in This Case
The City contends that it may impose a business tax on a limited liability company wholly owned by a financial corporation, even though the limited liability company has elected to be disregarded as a separate entity for tax purposes and the limited liability company's net income is subject to tax at a higher rate than other corporations in lieu of other state and local taxes. The City argues that the in lieu tax provisions are expressly applicable only to *145 banks and financial corporations and a limited liability company is not a bank or financial corporation. Thus, the City asserts its valid business tax may be imposed against the gross receipts of a limited liability company. We view the issue as one of statutory interpretation.
We start with the propositions that are not in dispute. The City may lawfully impose its gross receipts business tax on limited liability companies doing business within the City, unless otherwise prohibited by the state Constitution or a state statute. The in lieu provisions of Revenue and Taxation Code section 23182 prohibit the City from levying its gross receipts tax on financial corporations. Furman is a limited liability company wholly owned by a financial corporation and has elected to have its separate existence disregarded for tax purposes. As a result of this election, Furman's net income is subject to tax at the higher rate of its parent financial corporation.
The question presented is whether Furman is entitled to the benefit of the in lieu provisions applicable to financial corporations. A careful reading of the relevant statutes convinces us that Furman is entitled to the benefit of the in lieu provisions of Revenue and Taxation Code section 23182. Pursuant to Revenue and Taxation Code section 23038 and the regulations promulgated thereunder, Furman may elect to be disregarded as an entity for tax purposes. If a limited liability company's separate existence is disregarded for tax purposes, the separate existence of the limited liability company is disregarded for purposes of the Bank and Corporation Tax Law. The in lieu provisions of Revenue and Taxation Code section 23182 are part of the Bank and Corporation Tax Law. If a limited liability company is wholly owned by a financial corporation and elects to have its separate existence disregarded for tax purposes, the limited liability company is treated for tax purposes as a division of its parent financial corporation. Its net income is subject to the higher rate of tax imposed on financial corporations. Thus, for purposes of the Bank and Corporation Tax Law, including the in lieu provisions of Revenue and Taxation Code section 23182, Furman's separate existence as a limited liability company is disregarded and the higher rate of tax to which its net income is subject is in lieu of the City's gross receipts business tax.
This conclusion is supported by the clear language of the relevant statutes. It is also supported by the express legislative purpose of adopting a taxation scheme that achieves tax parity between banks, financial corporations, and nonfinancial corporations. Tax parity would not be achieved if a limited liability company were subject to the higher rate of tax imposed on financial corporations and also subject to divergent and competing local tax measures. Our conclusion is also supported by common sense. It is unlikely the Legislature intended to impose the burden of the higher rate of tax on a limited liability company wholly owned by a financial corporation without at the same time affording the limited liability company the benefit of the in lieu provisions.
The City raises two arguments that we address briefly. For the first time on appeal, the City argues that the exceptions to the disregard of a limited liability company's separate existence for tax purposes, permitting the state to impose the minimum limited liability company tax and the graduated limited liability company fee, indicate a legislative intent to permit the City's gross receipts tax. This argument is unavailing. The City did not raise this issue in the trial court and thus may not raise it for the first time on appeal. In addition, there is nothing in the record to *146 inform us as to whether these taxes and fees are in fact imposed on a limited liability company wholly owned by a financial corporation. The City's argument is also unpersuasive. The statute provides that the separate existence of the limited liability company shall be disregarded for tax purposes with four express exceptions. The City's gross receipts business tax is not one of the enumerated exceptions. Had the Legislature intended to adopt other exceptions to the disregard of the separate existence of the limited liability company for tax purposes, it would certainly have so stated. It could have expressly excepted the in lieu provisions of Revenue and Taxation Code section 23182. It did not do so.
Second, relying on Western States Bankcard Assn. v. City and County of San Francisco, supra, 19 Cal.3d 208, 137 Cal.Rptr. 183, 561 P.2d 273, the City argues that Furman is not a financial corporation and thus the in lieu provisions of Revenue and Taxation Code section 23182 are not applicable. As we have seen, by virtue of Revenue and Taxation Code section 23038 and the regulations promulgated thereunder, the in lieu provisions of Revenue and Taxation Code section 23182 are applicable to Furman. Thus, Western States Bankcard is inapposite. In Western States Bankcard, a nonprofit corporation organized by a number of banking associations to administer their credit cards claimed exemption from a city gross receipts business tax on the ground of the in lieu provisions applicable to banks. The Supreme Court concluded that the nonprofit corporation was not entitled to the benefit of the bank in lieu provisions. The Supreme Court noted that the nonprofit corporation was not subject to the higher rate of tax. Here, Furman is subject to the higher rate of tax and is by statute accorded the benefit of the in lieu provisions.
DISPOSITION
The judgment is affirmed. Furman Selz Capital Management, L.L.C. is awarded its costs on appeal.
We concur: TURNER, P.J., and MOSK, J.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2259669/
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17 Cal.Rptr.3d 397 (2004)
121 Cal.App.4th 679
Daniel HUFFMAN et al., Plaintiff and Appellant,
v.
INTERSTATE BRANDS COMPANIES et al., Defendants and Appellants.
No. B160274.
Court of Appeal, Second District, Division Three.
August 12, 2004.
Rehearing Denied September 13, 2004.
Review Denied January 26, 2005.[*]
*400 Paul, Hastings, Janofsky & Walker, J. Al Latham, Jr., Patricia M. Berry and Elizabeth A. Falcone, Los Angeles, for Defendants and Appellants.
Mathews & Rager, Charles T. Mathews, Pasadena, and Jeffrey A. Rager; Law Offices of Roxanne Huddleston and Roxanne Huddleston for Plaintiff and Appellant.
CROSKEY, Acting P.J.
In this case, we must determine whether an industrial injury subsequent to an alleged unlawful demotion is exempt from the exclusivity provisions of the Workers' Compensation Act (WCA) (Lab.Code, §§ 3600, 3602). Interstate Brands Corporation, Inc. (IBC),[1] and its employee Daniel Huffman (Huffman), each appeal from a judgment after a jury awarded Huffman more than $2 million in noneconomic damages after it had found that IBC had unlawfully demoted him from a district sales manager to a division sales manager. The *401 damages awarded included the emotional distress Huffman suffered after his demotion when he injured his knees, which ultimately required that he undergo bilateral knee replacement surgery. Although both parties also raise instructional errors, we are principally concerned here with IBC's challenge to the admission of the evidence related to Huffman's postdemotion knee injury. The trial court concluded that such evidence was admissible to show the emotional distress Huffman suffered following the demotion because the causal chain following the discriminatory act had not been broken. We conclude that the trial court erred in admitting this evidence because it applied an incorrect "but for" standard, that is, but for the demotion, or unlawful act, Huffman would not have suffered emotional distress arising from his subsequent industrial injury. Such a test is an unwarranted expansion of the exemption to the WCA's exclusive remedy provisions. As shall be discussed, we conclude that the trial court should have applied the traditional tort "substantial factor" test in determining whether the unlawful or discriminatory demotion was a substantial factor in causing the emotional distress arising from Huffman's post-demotion knee injury. Applying this test, we conclude that the evidence of Huffman's knee injury and consequent emotional distress should have been excluded. We further find instructional error in reversing the burden of proof on IBC's reasons for the demotion. Because these errors individually or cumulatively were prejudicial, we reverse and remand for a new trial.
FACTUAL AND PROCEDURAL BACKGROUND
In September 1999, IBC demoted Huffman, a 23-year employee and district sales manager, two steps down to a division sales manager. Huffman's salary decreased, he went from a management position to a union position, and he lost management-type benefits that included, for example, the use of a company car. Huffman was 51 years old when he was demoted and claimed that he had been demoted because of his age. Huffman filed suit against IBC and his immediate supervisors. The supervisors were later dismissed, and Huffman proceeded to trial on his claims against IBC for age discrimination in violation of the Fair Employment and Housing Act (the FEHA) (§ 12900, et seq.) and wrongful demotion in violation of public policy. IBC maintained Huffman's demotion was not age-related but rather based on unsatisfactory performance as a district sales manager. As the two principal issues in this appeal are "(1) the burden of proof on IBC's proffered reasons for Huffman's demotion, and (2) the admission of evidence concerning Huffman's injury following his demotion, we set forth the testimony on those issues in some detail to determine whether or not the court's rulings, if erroneous, were prejudicial to IBC.
1. Huffman and His Employment History at IBC
Huffman worked for IBC's Pomona bakery (bakery), which makes and distributes bread products, including Wonder Bread, Home Pride bread, and DiCarlo bread. Huffman was part of the sales team that serviced IBC's customer base of grocery stores and institutional facilities such as military bases and schools. Huffman started working for a previous owner of the bakery in 1976 as a route sales representative. A route sales representative delivers the bread products and stocks the customers' shelves. Huffman was promoted through the sales and management ranks, and continued to work for the bakery when it changed ownership in 1985.
*402 In 1995, IBC bought the bakery. Huffman was one of the bakery's district sales managers. As a district sales manager, Huffman was responsible for overseeing the sales of products in his district, servicing IBC's customers, and implementing product promotions. Huffman supervised a team of division sales managers, who, in turn, managed the route sales representatives. Both the route sales representatives and the division sales managers are represented by a union. The sales team also includes account managers who are assigned to serve as the liaison between a customer, such as Ralphs or Vons, and IBC. Account managers, like the district sales managers, report directly to the bakery's general sales manager and are nonunion employees.
In 1995, Gary Schneider (Schneider) was the general sales manager and Huffman's immediate supervisor. In 1998, a year before IBC saw a change in the bakery's upper management, Schneider gave Huffman a negative performance review, rating him as "adequate" overall, the second lowest score on the performance appraisal scale. In the written portion of the appraisal, Schneider indicated that Huffman needed to improve on, among other things, services issues, follow-up and execution of bakery programs, and distribution of variety bread products.
2. The Bakery Changed Leadership and Related Employment Actions
In approximately January 1999, the upper management at the bakery changed. Mark Cooper (Cooper) became the general manager of the bakery. Cooper was then 41 years old. Cooper replaced Schneider, then 48, with Dennis Laughlin (Laughlin) who was about 40 years old. Laughlin became Huffman's direct supervisor. Laughlin, with Cooper's approval, decided to demote Huffman in September 1999.
a. Cooper Announced the Need to Improve Sales
When Cooper and Laughlin first assumed their positions, they told the sales force that they intended to make changes to improve the bakery's overall sales performance. Huffman confirmed a change in management philosophy. Huffman testified: "Well, [it] started out with a meeting with us, and in that meeting he made reference to something to the effect that we as a sales department had not produced. We were not doing the job, and we needed to correct that, and . . . he made a statement like, something to this effect: This is going to be like a choo choo train going 100 miles an hour. And when it goes off and when it goes around the corner, some of you are not going to be able to hang on. It doesn't matter how long you have been with the company or what you have done with the company. We're starting over." Huffman acknowledged that Cooper's comments were motivated by a "downward spiral" in sales at the bakery.
Almost immediately, and for economic reasons, Cooper restructured the sales districts from five to four, thereby eliminating one of the district sales manager's positions. John Barron's (Barron) position as a district sales manager was eliminated, and he became an account manager.
b. IBC Decision Makers' Reasons for Huffman's Demotion
1) Laughlin Demoted Huffman Because of Customer Complaints and Failure to Execute the Bakery's Promotional Activities
Laughlin, Huffman's immediate supervisor, testified that he demoted Huffman because of his lack of execution and follow through, and his argumentative attitude. Laughlin testified, for example, that he *403 directed Huffman to make sure that Wal-Mart, one of its customers, received service five days a week. After numerous conversations with Huffman on this issue, Huffman failed to provide the requested service.
Laughlin also criticized Huffman because he did not participate in the bakery's promotional events, a key to Cooper's turnaround marketing strategy. For example, according to Laughlin, the bakery had a promotional event over Memorial Day weekend to sell their hamburger and hot dog buns at a reduced price. Huffman had been informed of the promotion six weeks before the event but did not order additional products and/or did not display the products for the promotion in many of the stores in his district. The following month, the bakery had another promotion at Lucky stores where it was given space at no cost to sell additional bread products. According to Laughlin, Huffman again neglected to order additional products to fill the free shelf space.
In August, the bakery launched a campaign to promote Wonder Bread. Laughlin went to check out the displays and found that Huffman's district did not have the promotional displays in several stores. The last straw, according to Laughlin, came later that month, when the bakery worked with Stater Brothers supermarket to promote the grand reopening of the stores it had acquired following the Albertsons and Lucky merger. For this promotional event, IBC bread products were featured in a front-end display in the supermarkets, in addition to the baked goods aisles. Laughlin testified that he walked into the stores in Huffman's district and there was no product on the shelves.
Laughlin also testified that he received numerous complaints about Huffman from IBC's account manager Chris Vukojevich (Vukojevich), who was in charge of the Ralph's supermarket account, and Rachel Williams (Williams), Ralph's bakery merchandiser. Vukojevich also testified that Williams and Ralph's store personnel complained to her that stores in Huffman's district were often out of stock and/or had off-code products, meaning that bread had not been timely removed from the shelves. Vukojevich prepared numerous memoranda to Huffman raising her concerns and asked that he respond directly to Williams. In one such memoranda Vukojevich stated: "[Williams] needs to know, and have confidence in your abilities. . . . The recurring complaints . . . may jeopardize future presentations, and my results with Ralphs Bakery Director." Huffman never directly responded to Williams. In addition to Vukojevich, Leon Lee (Lee), IBC's account manager for Lucky stores, also had complaints about Huffman's failure to timely respond to customer complaints.
2) Cooper Learned About Huffman's Performance Problems
Cooper testified that beginning in February or March 1999, Laughlin began discussing with him Huffman's performance problems. Cooper recalled that Laughlin told him that Huffman was not responsive to customers' complaints and was not adequately executing the bakery's promotions. Cooper told Laughlin to document the specific performance issues, request corrective action, and state that failure to do so would endanger Huffman's job.
c. Huffman Claimed his Sales Figures Were Good and the Performance Issues were a Pretext
Huffman countered this testimony with evidence that his sales performance was good and that sales had stayed the same in his district under his supervision. Huffman took exception to criticism that he *404 failed to execute when his sales remained constant, and produced weekly summaries of his sales activities to attack the testimony that he failed to respond to customers' complaints. Moreover, Huffman pointed out that Laughlin had prepared his performance appraisal earlier that year and did not mention any of the reasons that he now claimed were factors in his demotion.
Huffman directly attacked the written "paper trail" Laughlin created to document his unsatisfactory performance. For example, the written memoranda in which Laughlin criticized Huffman because he was not adequately servicing Wal-Mart supermarkets was addressed and distributed to all the district sales managers. Likewise, although Laughlin addressed a second memorandum on the same subject to Huffman, which identified the lack of execution on the Memorial Day promotion, Laughlin admitted that all the district managers received a memorandum addressing the promotional event and related service issues. Moreover, Laughlin continued to complain about the district sales managers' lack of execution long after Huffman had been removed from the position.
On the issue of failure to follow through with customer complaints, as noted, Huffman produced his weekly management reports that directly addressed steps he had taken to handle those complaints. Huffman also countered Vukojevich's testimony by addressing each of the customer complaints she had raised in her memoranda and by explaining how he had responded directly to her. Moreover, Vukojevich admitted that the problems described in Huffman's district occurred in all the districts but maintained that they occurred more frequently in Huffman's district.
Huffman also presented evidence that the problem in his district was too much shelf space, and that he had suggested that the bakery consider reducing that space in a number of stores. Laughlin would not agree to reduce space, but later did so after Huffman's demotion. Laughlin acknowledged that Huffman had raised the issue but did not recall the exact details of that recommendation.
Finally, Huffman presented testimony of subordinates who stated that they had no problems with Huffman's performance.
3. Conflicting Evidence that Age Was the Reason for Huffman's Demotion
Huffman attempted to show that upon IBC's takeover, the company began a "youth movement" to replace bakery management with younger employees. He pointed out that IBC offered a severance package for older workers. Huffman established that Cooper and Laughlin were younger than the men that they replaced. Cooper had replaced Jim Cook (Cook) who was in his mid-50s. Cook, however, testified that he had voluntarily retired. Laughlin, who was about 40, replaced Schneider who was then 48. Barron, Huffman's replacement was 38 years old in September 1999. Barron, however, remained in that position for about four months before he returned to his account management position.
Huffman also testified that he believed Cooper and Laughlin had an age bias. Huffman believed that Cooper's remarks referring to the "choo choo train" in the first sales meeting in January 1999 were age related. Huffman also testified that during a meeting in which Cooper was discussing sales trends, he turned to Huffman and said, "Oh Huffman's been around forever. You['ve] seen that happen. You['ve] seen this [sales] trend." Laughlin reportedly told Huffman that "I need old guys like you around that have a lot of experience because I'm a new guy." Huffman *405 also overheard Laughlin make ageist remarks about two other employees.
4. Huffman Was Demoted to Division Sales Manager
In September 1999, Huffman was demoted to the position of division sales manager. Both Cooper and Laughlin testified that they did not consider making Huffman an account manager. Cooper testified that they did not do so because there were no vacant positions, they had decided to eliminate the account manager position Barron had vacated, and they would not have considered Huffman to fill the account manager position for fear that they would run into the same problems that led to his demotion.
When Huffman was demoted, his base pay decreased. He returned to a union position, and IBC contributed to the union pension on his behalf.
During the meeting in which he was informed about the demotion, Huffman asked about a severance package. Cooper and Laughlin assured him that he was not being fired and was "too good of an employee to lose."
5. Huffman Suffered an Industrial Injury Following His Demotion and Underwent Bilateral Knee Replacement Surgery
Now as a division sales manager, Huffman had to load and deliver bakery products for delivery to stores. Over objection, Huffman introduced evidence of the injuries he suffered after his demotion to division sales manager.[2]
Huffman testified that his return to the position of division sales manager aggravated his pre-existing knee injuries. Huffman admitted that he had injured his knees in the early 1980s while working as a route sales representative for IBC's predecessor, characterizing the injury as swelling in both knees. He did not report the injury until 1994 when he filed a workers' compensation claim. By that time, Huffman had undergone a total of five surgeries.
When he was demoted, Huffman testified that he told both Cooper and Laughlin that his bad knees prevented him from heavy pushing and lifting. Huffman acknowledged that he was offered a position in which he could work together with another division sales manager, but he did not consider that an option because he would still be required to do the physical work of a division sales manager in that position.
In the spring of 2000, Huffman sought medical treatment for his knees. In August 2000, he reported the problems to IBC. In 2001, he had bilateral knee replacement surgery and remains on medical leave.
Huffman's orthopedic surgeon, Steven Miculak, M.D., testified regarding the knee replacement surgery. Dr. Miculak opined that Huffman's knee problems were "accumulative trauma from the injury he sustained from October 1999 through August of 2000." Dr. Miculak, however, acknowledged *406 that Huffman's knee problems were degenerative, and that his injury was an "exacerbation of arthritis."
In closing argument, Huffman's counsel repeatedly reminded the jury of Huffman's pain and suffering as a result of his knee injury. When addressing the issue of awarding damages, counsel argued: "You know, if we were just talking about a personal injury case and said, because of what the defendant did the plaintiff had to have both knees replaced, we'd be talking about a staggering amount of money in damages. Just to have your knees replaced, to have to walk around with titanium inserts into your knees. Later, Huffman's counsel argued that when the jury determined damages they should consider: "How much do you award for the physical injury and the emotional trauma that came from that [bilateral knee replacement surgery]? Under the jury instructions, consider that here's a guy who is now suddenly thrust into the hospital. Who's got both of his legs cut up and operated on. Yeah, he can walk around now, but, my God, you know darn well he's never going to be the same again."
6. The Jury Returned a Special Verdict in Favor of Huffman
The jury returned a special verdict against IBC and originally awarded Huffman $699,000 in economic damages and $2 million in noneconomic damages. Huffman received $2 million in noneconomic damages attributable to his emotional distress over the demotion, and the pain and suffering he attributed to the knee injury and knee replacement surgery.
IBC moved for a new trial and judgment notwithstanding the verdict, and Huffman moved for attorney fees as the prevailing party. The trial court granted Huffman's attorney fees, denied the motion for judgment notwithstanding the verdict, but conditionally granted the motion for new trial subject to Huffman's consent to remittitur of the economic damages from $699,000 to $155,600.[3] Huffman consented to the remittitur, and the court entered judgment reflecting the remittitur. Both parties timely appealed.
THE PARTIES' CONTENTIONS
IBC contends that along with the erroneous admission of evidence, misstatements of the law in the jury instructions marred the trial and require reversal. One of the misstatements of the law involves a jury instruction that reversed the burden of proof, requiring IBC, and not Huffman, to establish by a preponderance of evidence that it had a legitimate reason for demoting Huffman. As noted, IBC also attacks the admission of Huffman's *407 post-demotion industrial injury and contends that evidence was inadmissible because Huffman's exclusive remedy was under the WCA.[4]
Huffman also asserts instructional error, claiming the trial court erred in instructing the jury that as a matter of law Cooper was not a managing agent.[5]
DISCUSSION
1. Applicable Standards of Review
The trial errors IBC raises require two different standards of review. In reviewing a claim of instructional error, we must "assume the jury might have believed [appellant's] evidence and if properly instructed, might have decided in [appellant's] favor. [Citations.]" (Logacz v. Limansky (1999) 71 Cal.App.4th 1149, 1152, fn. 2, 84 Cal.Rptr.2d 257, quoting Shell Oil Co. v. Winterthur Swiss Ins. Co. (1993) 12 Cal.App.4th 715, 773, 15 Cal.Rptr.2d 815.) Thus, the evidence must be viewed in the light most favorable to IBC. (Henderson v. Harnischfeger Corp. (1974) 12 Cal.3d 663, 674, 117 Cal.Rptr. 1, 527 P.2d 353.)
Ordinarily, in reviewing the erroneous admission of evidence, we are guided by Evidence Code section 353, which provides: "A verdict or finding shall not be set aside, nor shall the judgment or decision based thereon be reversed, by reason of the erroneous admission of evidence unless: [¶] (a) There appears of record an objection to or a motion to exclude or to strike the evidence that was timely made and so stated as to make clear the specific ground of the objection or motion; and [¶] (b) The court which passes upon the effect of the error or errors is of the opinion that the admitted evidence should have been excluded on the ground stated and that the error or errors complained of resulted in a miscarriage of justice." In civil cases, a miscarriage of justice should be declared only when the reviewing court, after an examination of the entire cause, including the evidence, is of the opinion that it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error. (Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1069, 232 Cal.Rptr. 528, 728 P.2d 1163.)
Here, however, the issue presented also deals with the application of the WCA to the facts supporting the verdict. Thus, our initial inquiry is a question of law, namely, whether under these facts, the exclusive remedy provision of the WCA does or does not bar the recovery of civil damages in this action. (Gunnell v. Metrocolor Laboratories, Inc. (2001) 92 Cal.App.4th 710, 718-719, 112 Cal.Rptr.2d 195.)
*408 2. The Trial Court Erred in Permitting the Admission of Evidence of Huffman's Post-demotion Industrial Injury Because Workers' Compensation Provides the Exclusive Remedy
IBC concedes that an unlawful demotion, such as the one the jury concluded occurred here, is not subject to workers' compensation exclusivity, but maintains that the pain and suffering Huffman attributed to his post-demotion knee injury is not exempt from the exclusivity provisions of the WCA, and the testimony and argument on those issues should have been excluded. We agree. As discussed below, we conclude, consistent with well-settled law, that emotional distress caused by IBC's allegedly unlawful decision to demote Huffman is recoverable in a civil action and exempt from the WCA exclusive remedy provisions. Emotional distress caused by a subsequent work-related injury following an alleged discriminatory act, however, is not recoverable in a civil action unless the discriminatory act was a substantial factor in causing the subsequent injury.
a. The Exclusive Remedy Provisions in the WCA
Labor Code section 3600, subdivision (a),[6] provides that subject to certain exceptions and conditions, workers' compensation liability, "in lieu of any other liability whatsoever" will exist against an employer for any injury sustained by his or her employees arising out of and in the course of employment. Specifically, that statute provides in relevant part: "Liability for the compensation provided by this division, in lieu of any other liability whatsoever to any person . . . shall, without regard to negligence, exist against an employer for any injury sustained by his or her employees arising out of and in the course of the employment and for the death of any employee if the injury proximately causes death, in those cases where the . . . conditions of compensation concur . . . ." (§ 3600, subd. (a).) The conditions of compensation that are applicable include: "(1) Where, at the time of the injury, both the employer and the employee are subject to the compensation provisions of this division. [¶] (2) Where, at the time of the injury, the employee is performing service growing out of and incidental to his or her employment and is acting within the course of his or her employment. [¶] (3) Where the injury is proximately caused by the employment, either with or without negligence." (Ibid.)
Subdivision (a) of section 3602 then provides: "Where the conditions of compensation set forth in Section 3600 concur, the right to recover such compensation is . . . the sole and exclusive remedy of the employee . . . against the employer. . . ." Section 5300, subdivision (a) provides that proceedings "[f]or the recovery of compensation, or concerning any right or liability arising out of or incidental thereto" shall be "instituted before the [workers compensation] appeals board and not elsewhere, except as otherwise provided in Division 4 . . . ."
The underlying purpose of these exclusivity provisions is the presumed "`compensation bargain.'" (Shoemaker v. Myers (1990) 52 Cal.3d 1, 16, 276 Cal.Rptr. 303, 801 P.2d 1054.) The bargain according to the Shoemaker court is that "the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability. The employee is afforded relatively swift and certain payment of benefits to cure or relieve the *409 effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort. [Citations.]" (Ibid.)
Certain type of injurious employer misconduct, however, remain outside the bargain. "There are some instances in which, although the injury arose in the course of employment, the employer engaging in that conduct `"stepped out of [its] proper role [ ]"' or engaged in conduct of `"questionable relationship to the employment."' [Citations.]" (Fermino v. Fedco, Inc. (1994) 7 Cal.4th 701, 708, 30 Cal.Rptr.2d 18, 872 P.2d 559.)
b. The Scope of the WCA Exclusivity Provisions
Huffman's position is that his subsequent injury following his alleged unlawful demotion was one of those instances in which the employer acted outside of its proper role. The trial court agreed. It regarded the subsequent injury following Huffman's demotion as injuries flowing from the unlawful act and outside the compensation bargain. We disagree with the trial court's assessment of the nature of the subsequent injury. In resolving whether IBC's acts were within the scope of the exclusivity provisions, we are guided by the analytical framework employed by our Supreme Court in Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 102 Cal.Rptr.2d 562, 14 P.3d 234 (Vacanti).
In Vacanti, the Supreme Court stated that "[i]n determining whether exclusivity bars a cause of action against an employer or insurer, courts initially determine whether the alleged injury falls within the scope of the exclusive remedy provisions. Where the alleged injury is `collateral to or derivative of' an injury compensable by the exclusive remedies of the WCA, a cause of action predicated on that injury may be subject to the exclusivity bar. [Citation.] Otherwise, the cause of action is not barred." (24 Cal.4th at p. 811, 102 Cal.Rptr.2d 562, 14 P.3d 234; see also Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 160, 233 Cal.Rptr. 308, 729 P.2d 743 (Cole).)
"If the alleged injury falls within the scope of the exclusive remedy provisions, then courts must consider whether the alleged acts or motives that establish the elements of the cause of action fall outside the risks encompassed within the compensation bargain," making the injury exempt from the WCA exclusivity provisions. (Vacanti, supra, 24 Cal.4th at pp. 811-812, 102 Cal.Rptr.2d 562, 14 P.3d 234; see also Fermino v. Fedco, Inc., supra, 7 Cal.4th at pp. 717-718, 30 Cal.Rptr.2d 18, 872 P.2d 559.) Typical employer actions "such as demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances" do not by themselves exempt a cause of action from exclusive remedy provisions. (Cole, supra, 43 Cal.3d at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743; Fermino v. Fedco, Inc., supra, at pp. 717-718, 30 Cal.Rptr.2d 18, 872 P.2d 559.) As Cole instructs: "If characterization of conduct normally occurring in the workplace as unfair or outrageous were sufficient to avoid the exclusive remedy provisions of the Labor Code, the exception would permit the employee to allege a cause of action in every case where he suffered mental disability merely by alleging an ulterior purpose of causing injury. Such an exception would be contrary to the compensation bargain and unfair to the employer." (Cole, supra, at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743.)
Employer actions that violate a fundamental public policy, however, are exempt from the exclusive remedy provisions of the WCA because they "cannot *410 under any reasonable viewpoint be considered a `normal part of the employment relationship.'" (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1100, 4 Cal.Rptr.2d 874, 824 P.2d 680, overruled on other grounds in Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 80, fn. 6, 78 Cal.Rptr.2d 16, 960 P.2d 1046; see also City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143, 1154-1155, 77 Cal.Rptr.2d 445, 959 P.2d 752.)[7] With these principles in mind, we must determine the scope of the exclusive remedy provisions of the WCA when a subsequent workplace injury follows an allegedly unlawful demotion that is concededly outside the compensation bargain.[8] Like the Vacanti court, we are presented with a new "twist" in determining the scope of the exclusivity provision when two acts, one of which is exempt from the exclusivity provisions, might be the cause of the alleged injury.
c. The Exclusivity Provisions Apply Unless the Unlawful Employment Action Was a Substantial Factor in the Subsequent Injury
Because this case is the first to address this issue, both parties have proposed a test to determine whether the exclusive remedy provisions apply to a subsequent workplace injury incurred while carrying out the duties of a position in which the employee was placed for an alleged discriminatory reason. IBC proposes that we adopt a direct causation test. Its position is the two acts are separate, and that while the allegedly discriminatory one is exempt from the exclusivity provisions, the second act, in this case, assigning Huffman to perform normal job duties which caused his subsequent knee injury, is not exempt from the exclusivity provisions. According to IBC, in order for the subsequent industrial injury to be exempt, the injury must be directly caused by the unlawful act. Huffman counters that the "but for" test employed by the trial court is the correct one because the two acts (i.e., the demotion and subsequent injury) should be viewed as a "continuing injury" flowing from the allegedly discriminatory act, which falls outside the compensation bargain. Thus, Huffman proposes a rule that would exempt all subsequent injuries from workers compensation exclusivity because the employee in that position initially was placed there for an unlawful reason. Where, as here, there might be two or more reasonable causes for the subsequent injury, we reject both parties' proposed tests in favor of the traditional tort "substantial factor" test.
We conclude that the better approach to determine whether the exclusivity provisions apply to a subsequent injury following an unlawful act, such as a discriminatory demotion, is to determine whether the discriminatory conduct (i.e., the demotion) was a substantial factor in the subsequent industrial injury. We do not attempt to define the word "substantial" but note that the conduct must have an effect in producing the injury or harm *411 to regard it as a cause and that it must be more than slight, theoretical, trivial, or negligible to be a substantial factor.[9] "`If the conduct which is claimed to have caused the injury had nothing at all to do with the injuries, it could not be said that the conduct was a factor, let alone a substantial factor, in the production of the injuries.' [Citation.]" (Mitchell v. Gonzales (1991) 54 Cal.3d 1041, 1052, 1 Cal.Rptr.2d 913, 819 P.2d 872.)
"Not only does the substantial factor instruction assist in the resolution of the problem of independent causes . . . but `[i]t aids in the disposition . . . of two other types of situations which have proved troublesome. One is that where a similar, but not identical result would have followed without the defendant's act; the other where one defendant has made a clearly proved but quite insignificant contribution to the result, as where he throws a lighted match into a forest fire. But, in the great majority of cases, it produces the same legal conclusion as the but-for test. Except in the classes of cases indicated, no case has been found where the defendant's act could be called a substantial factor when the event would have occurred without it; nor will cases very often arise where it would not be such a factor when it was so indispensable a cause that without it the result would not have followed.' [Citation.]" (Mitchell v. Gonzales, supra, 54 Cal.3d at pp. 1052-1053, 1 Cal.Rptr.2d 913, 819 P.2d 872.)
An example will illustrate the application of the substantial factor test we articulate here to determine whether the exclusivity provisions apply where two independent causes might contribute to the subsequent injury. An applicant seeks a white-collar office job, but a discriminatory hiring decision puts him on the loading dock. While working on the loading dock, the employee is injured in a forklift accident. Although the discriminatory hiring decision caused the employee to be present on the loading dock, that decision was not a substantial factor in the industrial injury because it had nothing at all to do with the injury. The job itself (and not the reason he was assigned to the job) caused the injury.[10]
The trial court and Huffman both principally rely on Jones v. Los Angeles Community College, supra, 198 Cal.App.3d 794, 244 Cal.Rptr. 37, as the basis for supporting the proposition that any subsequent injury following an alleged discriminatory act is outside the compensation bargain. Jones, in our view, cannot be read in such a manner.
In Jones, the plaintiff claimed that he was the victim of racial discrimination. He suffered racial insults of his coworker *412 and in retaliation for his complaints to his manager, his workload increased, he was given more oppressive deadlines, and he was singled out to be monitored at work, which he found very humiliating. (198 Cal.App.3d at p. 800, 244 Cal.Rptr. 37.) During this period, Jones sustained an injury to his left knee, that caused him to remain disabled and unable to return to work. (Id. at pp. 801-802, 244 Cal.Rptr. 37.)
The trial court granted summary adjudication of Jones' discrimination claims because those claims were barred by workers' compensation exclusivity. (Jones v. Los Angeles Community College, supra, 198 Cal.App.3d at pp. 803-804, 244 Cal.Rptr. 37.) The Court of Appeal reversed. It concluded that statutory discrimination claims are exempt from the workers' compensation exclusivity. (Id. at pp. 807-809, 244 Cal.Rptr. 37.) As the court reasoned, "the application of the exclusivity provision of the Labor Code would in effect result in no recognition of or compensation for the humiliation and other injuries which Jones suffered before his knee injury." (Id. at p. 809, 244 Cal.Rptr. 37.) This case goes no further and we cannot read it as the trial court did, that is, for the proposition that any subsequent work-related injury following a discriminatory act is exempt from the workers compensation exclusivity provisions.[11] In sum, we conclude that in order to be exempt from the exclusive remedy provisions of the WCA the unlawful act must be a substantial factor in the subsequent injury.
d. Huffman's Injury Is Subject to the Exclusive Remedy Provision
Applying the substantial factor test here, we conclude that Huffman's alleged unlawful demotion was not a substantial factor in his subsequent knee injury. We begin by emphasizing that Huffman alleged, and the jury believed, that IBC unlawfully demoted him because of his age. Had Huffman alleged a disability discrimination or failure-to-accommodate claim, there is no doubt that his emotional distress damages arising from his knee injury would have been exempt from the exclusive remedy provisions. In such a case, unlike the one presented, the unlawful demotion to a position in which the employer knew the employee could not perform because of a physical disability would be a substantial factor in subsequent workplace injury sustained by that employee while attempting to perform his or her job duties. We emphasize that is not the situation here. Huffman claimed, and the jury believed, that he had been demoted because of his age and replaced by a younger man. Although Huffman told Cooper and Laughlin that he could not meet the physical requirements of a division sales manager, he assumed that position and performed that job until the spring of 2000. Huffman then sought medical attention for his knee injury and in August 2000, he reported the injury to IBC. The injury Huffman sustained was because of the physical requirements of the job, which all division sales managers were required to perform, not because he was unlawfully replaced as a district manager by a younger man. Thus, IBC's decision to demote Huffman was unrelated to the subsequent injury and not a substantial factor in that injury. Indeed, to conclude otherwise would unfairly penalize *413 IBC for retaining Huffman as an employee in some position rather than terminating him. Accordingly, the exclusive remedy provisions apply.
We reject Huffman's argument that his physical injury was part of a plan of age discrimination. Huffman asserts that the evidence established IBC demoted him because of his age to a position it knew he could not perform so that he would either be injured (and leave) or quit. As IBC points out, this argument is flawed for the obvious reason that Huffman's discrimination claim was based on his age, not on any physical ability or inability to do the division sales manager job. There is no evidence that Huffman's knee problems were related to his age. Moreover, an age motive to place a younger man in Huffman's position (and thus demote Huffman) does not extend to performing the job duties that every other division manager was required to perform.[12] Indeed, Huffman's age discrimination complaint with the Department of Fair Employment and Housing (DFEH) was filed in September 1999, long before he suffered his knee injury while working as a division sales manager. We therefore conclude that the alleged discrimination Huffman suffered was separate from his subsequent industrial injury after assuming the position of division sales manager.
As we mentioned, although this case presents a new "twist" on the scope of the exclusivity provisions, we find the analysis no different than the one our Supreme Court employed in Cole, supra, 43 Cal.3d at page 160, 233 Cal.Rptr. 308, 729 P.2d 743. Huffman was injured while performing his duties as a division sales manager. There is no evidence that these duties or responsibilities were assigned for an unlawful purpose. Thus, worker's compensation is Huffman's exclusive remedy and bars him from recovering civil damages in this action for pain and suffering connected to his knee injury.
Under Huffman's theory, whenever a discriminatory act occurs, any subsequent work-related injury is exempt from the workers' compensation exclusivity provisions. This theory would permit an employee to circumvent the workers' compensation system by asserting a discrimination claim even if the injury was unrelated and remote in time to the discriminatory conduct. This theory is contrary to the expressed purpose of the WCA and would significantly disturb the compensation bargain. Thus, for the reasons stated above, we conclude that the trial court erred in permitting evidence of Huffman's pain and suffering arising from the exacerbation of his knee injury two years after he was demoted.
For the same reasons, we conclude that the evidence of Huffman's knee injury and bilateral knee replacement surgery was prejudicial, requiring a new trial. We need only look at Huffman's counsel's closing argument to conclude that this evidence was prejudicial. We note that the jury also heard from Huffman's psychiatrist that Huffman required psychotherapy, took antidepressant medication, and that the demotion diminished his self-confidence, and self-esteem. Huffman also testified of the financial difficulties he and his family faced, and the humiliation he experienced after his demotion. This evidence no doubt swayed the *414 jury. Nevertheless, during argument, Huffman's counsel asked the jury to put a price on Huffman's two knees. This argument undoubtedly linked Huffman's pain and suffering stemming from the knee injury directly to his demotion. As we have stated, the post-demotion knee injury was separate and apart from replacing Huffman with a younger worker. We are satisfied that, had this evidence been excluded, there is a reasonable probability that the jury might have rendered a result more favorable to IBC.
3. The Trial Court Committed Prejudicial Instructional Error by Erroneously Reversing the Burden of Proof on Huffman's Age Discrimination Claim
The instructional error we address here prejudicially reversed the burden of proof on Huffman's age discrimination claim. Because of the nature of the error, and the fact that IBC did not propose the instruction or agree to it, as we shall discuss, this is not a case in which the invited error doctrine applies.
a. As Given, BAJI No. 2.60 Erroneously and Prejudicially Reversed the Burden of Proof
Before trial, both parties submitted BAJI No. 2.60 (Burden of Proof and Preponderance of Evidence), a "fill in the blank" instruction. IBC included it among a list of proposed jury instructions but did not include the proposed text of the instruction.[13] Huffman submitted a modified version of the instruction. At issue here is the following portion of the modified instruction Huffman submitted: "The defendant has the burden of proving by a preponderance of the evidence all of the facts necessary to establish that in demoting Dan Huffman its conduct was done in good faith and for a proper business purpose." (Italics added.)[14]
At the final hearing to determine the jury instructions, counsel discussed BAJI No. 2.60. IBC's counsel had previously objected to this instruction as well as others Huffman proposed because it included causes of action for both a violation of the FEHA and for wrongful demotion in violation of public policy. IBC's counsel *415 had asked the trial court to drop one of the claims on the grounds that they were duplicative, but the trial court denied the request. The court asked IBC's counsel if there were any remaining objections to Huffman's proffered instruction and IBC's counsel responded, "No."[15]
IBC's counsel later averred in the motion for new trial that he mistakenly believed that the only issue with the instruction was "the question of which causes of action would be included." The trial court, however, concluded that the invited error doctrine or the doctrine of estoppel applied.[16]
1) IBC Did Not Have the Burden of Proof
BAJI No. 2.60 as given was wrong. A defendant does not carry the burden of persuasion in a discrimination case. (Texas Dept. of Community Affairs v. Burdine (1981) 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207.) As the Burdine court stated, the defendant bears only a burden of production, that is, to articulate, but not prove, a nondiscriminatory reason for the adverse employment action. (Id. at pp. 256-260, 101 S.Ct. 1089.) California courts have adopted this analytical framework for the allocation of the burdens of proof in discrimination cases. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 360-362, 100 Cal.Rptr.2d 352, 8 P.3d 1089; Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 68-69, 105 Cal.Rptr.2d 652.)
Huffman does not dispute that the analytical framework described above is a legally correct one. Instead, he contends that framework applies only in pretext cases, and not in a mixed-motive cases such as the one presented here. Huffman asserts that because this case is a mixed-motive case, IBC's business reasons for its actions constituted an affirmative defense, which IBC had the burden to prove. We *416 disagree with both the factual and legal underpinnings of Huffman's argument.
First, the facts do not support Huffman's position. This case was pled and tried as a pretext case, that is, IBC's decision was a pretext for age discrimination. IBC never raised mixed-motive as an affirmative defense and it was never presented to the jury as a mixed-motive case. Rather, Huffman succeeded at trial in convincing the jury that IBC's stated reasons for its decision were not legitimate and the real reason Huffman was demoted was because of his age. Indeed, in closing arguments Huffman's attorney repeatedly cast doubt on IBC's evidence regarding the reasons for Huffman's demotion and asked the jury to find that IBC's reasons were a pretext for age discrimination. Had this been a true mixed-motive case, the employment decision at issue would have resulted from a mixture of illegitimate and legitimate considerations. (Price Waterhouse v. Hopkins (1989) 490 U.S. 228, 232, 109 S.Ct. 1775, 104 L.Ed.2d 268.) Moreover, neither Huffman nor IBC offered a mixed-motive instruction. Instead, Huffman and IBC offered instructions that set forth the three-part analysis (which included the erroneous second step) of proving through circumstantial evidence that the adverse employment action was a pretext (or single motive) for intentional discrimination.
Second, the law does not support Huffman's position. As discussed, modified BAJI No. 2.60 is not a legally accurate presentation of a mixed-motive affirmative defense. In a true mixed-motive case, such as presented in Price Waterhouse v. Hopkins, supra, 490 U.S. 228, 109 S.Ct. 1775, the plaintiff, Ann Hopkins (Hopkins) had proved that gender played a part in the decision to deny her partnership in the accounting firm. (Id. at pp. 236-237, 109 S.Ct. 1775.) The Supreme Court addressed the question of how to determine if the decision was because of Hopkins' gender if such a decision is based on both legitimate and illegitimate motives.
In such a case, the Supreme Court concluded that an employer may "avoid a finding of liability only by proving that it would have made the same decision even if it had not allowed gender to play such a role." (Price Waterhouse v. Hopkins, supra, 490 U.S. at pp. 244-245, 109 S.Ct. 1775, fn.omitted.)[17] Of particular relevance here, in reaching this conclusion, the Supreme Court stated: "[S]ince we hold that the plaintiff retains the burden of persuasion on the issue whether gender played a part in the employment decision, the situation before us is not the one of `shifting burdens' that we addressed in Burdine. Instead, the employer's burden is most appropriately deemed an affirmative defense: the plaintiff must persuade the factfinder on one point, and then the employer, if it wishes to prevail, must persuade it on another. [Citation and fn. omitted.]" (Id. at p. 246, 109 S.Ct. 1775.)
Accordingly, even in a mixed-motive case, the burden of persuasion does not shift to the employer to prove its stated legitimate reason for the employment decision. Rather, it limits the employer's liability, once a plaintiff has established an unlawful motive, if the employer can show that it would have taken the same action absent the unlawful motive. The latter *417 inquiry is separate from, and subsequent to, a determination, of an unlawful motive. BAJI No. 2.60 does not come close to articulating this affirmative defense.
2) The Error Reversing the Burden of Proof Was Prejudicial
The instructional error here misled the jury. "Article VI, section 13 of the California Constitution provides that error in instructing the jury shall be grounds for reversal only when the reviewing court, `after an examination of the entire cause, including the evidence,' concludes that the error `has resulted in a miscarriage of justice.' The test of reversible error has been stated in terms of the likelihood that the improper instruction misled the jury. [Citation.]" (Weiner v. Fleischman (1991) 54 Cal.3d 476, 490, 286 Cal.Rptr. 40, 816 P.2d 892; Mitchell v. Gonzales, supra, 54 Cal.3d at p. 1054, 1 Cal.Rptr.2d 913, 819 P.2d 872; see also Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580, 34 Cal.Rptr.2d 607, 882 P.2d 298.) Thus, if a review of the entire record demonstrates that the improper instruction was so likely to have misled the jury as to become a factor in the verdict, it is prejudicial and a ground for reversal. (Henderson v. Harnischfeger Corp., supra, 12 Cal.3d at p. 670, 117 Cal.Rptr. 1, 527 P.2d 353.) While there is no precise formula for determining the prejudicial effect of instructional error, we are guided by the five factors enumerated in LeMons v. Regents of University of California (1978) 21 Cal.3d 869, 876, 148 Cal.Rptr. 355, 582 P.2d 946.)[18]
The first factor we consider is the degree of conflict in the evidence on the critical issue at trial, namely the reason for Huffman's demotion. As the trial court acknowledged, this was a close case. There was conflicting evidence on the reasons IBC decided to demote Huffman. Both Laughlin and Cooper testified that Huffman had performance problems. These decisionmakers testified that they were receiving complaints about Huffman's performance from customers and account managers, and Laughlin himself had observed Huffman's failure to execute bakery promotions. Huffman, however, relied on his sales performance to discredit the explanation for the decision to demote him. The jury, based on the instruction given, believed that IBC had to prove by a preponderance of evidence that the decisionmakers' reasons for demoting Huffman were both "in good faith" and "for a proper business purpose." Had the jury been informed, however, that IBC did not have the burden of proof, the jury may well have reached a different result.
Second, we consider the emphasis of the erroneous instruction in argument to the jury. Though Huffman's counsel never directly addressed BAJI No. 2.60, and acknowledged that Huffman had the burden to prove age discrimination, Huffman's counsel repeatedly attacked the reasons IBC's witnesses gave for the demotion and accused them of "lying." It is reasonable to conclude that if the jury doubted IBC's witnesses, this would lead them to conclude that IBC had not met its burden of proof. Had the jury been properly instructed, *418 it would have focused on whether Huffman proved that the decision to demote him was because of his age, instead of on whether IBC's proffered reasons for that decision were legitimate ones.
Third, we consider whether the jury asked for a rereading of the erroneous instruction or of related evidence. During deliberations, the jury questioned the trial court about the instruction on managing agents. From this we infer that had the jury misunderstood the allocation of the burdens of proof, it would have asked for a clarification. Thus, we must assume that they followed the erroneous instruction as given, compounding the prejudice.
Finally, we consider the effect of other instructions in remedying the error.[19] Huffman points to several instructions none of which cured the error. While special instruction number 26, set forth the three-part test to establish age discrimination, that instruction did not specifically state the burden of proof. Rather, it stated that once Huffman established a prima facie case of discrimination, "Defendant may show that it had a reason other than Plaintiff's age for the demotion." In light of BAJI No. 2.60, the only way to correlate this special instruction, as IBC suggests, is to conclude that it means "may be able to prove." That is one way to reconcile these instructions. We agree, however, that "may" as used in the special instruction does not signal to the jury that IBC did not have the burden of proof. Special instructions Nos. 27, 28, and 30, are no help because these instructions simply state that it is irrelevant whether the jury agrees or disagrees with IBC's reasons for the demotion and do not specifically address the applicable burden of proof.
Based on the foregoing factors, it is reasonably probable that a result more favorable to IBC would have been reached had the jury been properly instructed on the burden of proof. The trial court's error, therefore, was prejudicial.
b. IBC Neither Waived Nor Is Estopped from Asserting Instructional Error
We reject Huffman's argument that the doctrine of invited error applies here because IBC's counsel withdrew his objection to the erroneous instruction. When an instruction involves a misstatement of the law on the burden of proof, as it does here, we do not view the invited error doctrine as broadly as Huffman does.
It is well-settled that there is no waiver for failure to object. Code of Civil Procedure section 647 provides, in pertinent part, that the trial court's "giving an instruction, refusing to give an instruction, or modifying an instruction requested . . . [are] deemed to have been excepted to." (See Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal.App.4th 306, 333-334, 5 Cal.Rptr.2d 594.) As we have stated, "when a trial court gives a jury instruction which is prejudicially erroneous as given, i.e., which is an incorrect statement of law, the party harmed by that instruction need not have objected to the instruction or proposed a correct instruction of his own in order to preserve the right to complain of the erroneous instruction on appeal. [Citation.]" (Suman v. BMW of North America, Inc. (1994) 23 Cal.App.4th 1, 9, 28 Cal.Rptr.2d 133.) Thus, because the court's instructions on the burden of proof prejudicially misstated the law, as discussed above, IBC rightfully raised this issue on appeal.
*419 Huffman counters, however, that the situation here is different from a failure to object. He contends that because IBC's counsel's acquiesced to the instruction, IBC is estopped from asserting error based on the invited error doctrine. We disagree.
The invited error doctrine is based on estoppel. "`Where a party by his conduct induces the commission of error, he is estopped from asserting it as a ground for reversal' on appeal." (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403, 87 Cal.Rptr.2d 453, 981 P.2d 79, italics added.)
In support of his argument that acquiescence is sufficient conduct to invoke the invited error doctrine, Huffman cites Electronic Equipment Express, Inc. v. Donald H. Seiler & Co. (1981) 122 Cal.App.3d 834, 856-857, 176 Cal.Rptr. 239, and People v. Duty (1969) 269 Cal.App.2d 97, 105, 74 Cal.Rptr. 606. Those cases are inapposite because neither involved misstatements of the law, which is at issue here.
Instead, we find persuasive Pappert v. San Diego Gas & Electric Co. (1982) 137 Cal.App.3d 205, 212, 186 Cal.Rptr. 847. In that case, the plaintiffs withdrew their objection to an improper instruction. The defendant argued that they were estopped from asserting instructional error on appeal. The Pappert court disagreed, concluding that the invited error doctrine did not apply. (Id. at p. 212, fn. 3, 186 Cal.Rptr. 847.) This is so because the invited error doctrine requires affirmative conduct demonstrating a deliberate tactical choice on the part of the challenging party. (See, e.g., People v. Majors (1998) 18 Cal.4th 385, 408-409, 75 Cal.Rptr.2d 684, 956 P.2d 1137 [defendant could not challenge failure to give lesser-related offense instruction when defense counsel chose not to give the instruction]; People v. McPeters (1992) 2 Cal.4th 1148, 1191, fn. 2, 9 Cal.Rptr.2d 834, 832 P.2d 146 [defendant could not challenge his proffered instruction on appeal].) No such tactical choice appears here. IBC's counsel did not request the instruction,[20] nor is there any evidence that he made the tactical choice to permit the erroneous instruction.[21] Thus, the invited error doctrine does not apply here, and the giving of the erroneous instruction was prejudicial.
CONCLUSION
We conclude that the trial court applied an incorrect causation standard to IBC's allegedly unlawful age-related demotion of Huffman and admitted evidence of emotional distress that should have been excluded because of the exclusivity provisions of the WCA. The admission of such evidence was prejudicial to IBC. We also conclude that the trial court erroneously instructed the jury that IBC had a burden of proof that the law did not impose. This *420 instructional error was prejudicial to IBC. For these two reasons, IBC is entitled to a new trial on all issues.
DISPOSITION
For the reasons expressed herein, the judgment is reversed, and the case is remanded for a new trial. IBC is awarded its costs on appeal.
We Concur: KITCHING and ALDRICH, JJ.
NOTES
[*] George, C.J., did not paticipate therein.
[1] IBC was erroneously sued as Interstate Brands Companies.
[2] IBC moved to exclude the evidence on the grounds that Huffman's exclusive remedy for such injury was under the WCA. The trial court disagreed, and concluded, based on Jones v. Los Angeles Community College Dist. (1988) 198 Cal.App.3d 794, 809, 244 Cal.Rptr. 37, that Huffman could testify regarding the humiliation and other injuries he suffered following his demotion. In reaching its conclusion, the trial court also relied on several cases that it reasoned stood for that proposition. (Accardi v. Superior Court (1993) 17 Cal.App.4th 341, 347, 21 Cal.Rptr.2d 292; B & E Convalescent Center v. State Compensation Ins. Fund (1992) 8 Cal.App.4th 78, 91-92, 9 Cal.Rptr.2d 894; and Flait v. North American Watch Corp. (1992) 3 Cal.App.4th 467, 480, 4 Cal.Rptr.2d 522.)
[3] In its opening brief, IBC pointed out, as it did in the trial court, that the order granting a new trial was procedurally deficient. Code of Civil Procedure section 657 requires that new trial orders state the grounds upon which the new trial is granted. That section also requires that the new trial order state the reasons supporting the grounds. These grounds must be included in the written order. IBC made numerous requests for a written order that complied with the statute, but Huffman's counsel argued against a written order. IBC preemptively raised the procedural defect and asked that we exercise our inherent power to correct the infirm order. Huffman, however, has abandoned his cross-appeal on the motion for new trial, stating: "We also must concede Huffman encouraged the court to forego the written specifications, for this reason, he has not raised the issue in his cross-appeal." We reject any notion that IBC's argument was a "challenge" to the motion for new trial order. Therefore, we conclude that any appeal of this issue has been abandoned, and we do not address the issue.
[4] Since we have concluded that both of these contentions are meritorious and should be resolved in IBC's favor, we need not address IBC's remaining two contentions, namely that the trial court erred by sua sponte modifying a jury instruction, and that the special verdict form contained an incorrect interrogatory that further compounded the instructional error on the applicable burden of proof.
[5] In light of our conclusion to remand for a new trial, we need not address whether the trial court erred by instructing the jury that Cooper was not a managing agent. The trial court apparently did so based on the testimony at trial. Because it is not clear that the exact issue will arise again on remand, we simply note that based on the record before us, the evidence was not sufficient to establish that Cooper was IBC's managing agent. (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 573, 88 Cal.Rptr.2d 19, 981 P.2d 944; Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 166-168, 99 Cal.Rptr.2d 435.)
[6] Unless otherwise indicated, all further statutory references are to the Labor Code.
[7] In his opposition, Huffman cites several cases for the proposition that FEHA claims are exempt from the exclusivity provisions. That issue is well settled. The issue here is whether, and to what extent, a work-related injury following a discriminatory employment action is also barred by the exclusivity provision.
[8] We are not concerned here with whether Huffman's demotion is governed by the exclusive remedy provisions. The jury found that the motive for Huffman's demotion was age discrimination, taking it outside the scope of the compensation bargain. Accordingly, IBC concedes that the emotional distress caused by IBC's decision to demote Huffman would be recoverable in a civil action. Likewise, we are not concerned with whether Huffman's subsequent injury was work related. That point also is conceded.
[9] BAJI No. 3.76, the substantial factor jury instruction, provides: "The law defines cause in its own particular way. A cause of [injury] [damage] [loss] [or] [harm] is something that is a substantial factor in bringing about an [injury] [damage] [loss] [or] [harm]." A related instruction adopted by the Judicial Council in 2003 provides: "A substantial factor in causing harm is a factor that a reasonable person would consider to have contributed to the harm. It must be more than a remote or trivial factor. It does not have to be the only cause of the harm." (CACI No. 430.)
[10] We agree with IBC that this hypothetical closely resembles the facts of this case. Huffman's attempt to distinguish this hypothetical misses the mark. He states: "Suppose a loading dock manager who harbors racial animus uses a forklift to break the knees of a minority employee, hoping to make him quit." This does not accurately address the issue raised here, nor does it aid in our analysis. It is not part of the normal employment relationship to be physically attacked by a coworker. The issue here is when the chain of causation stops following an alleged discriminatory employment decision that places an employee in a certain position, and the employee thereafter suffers a work-related injury while carrying out the duties of that position
[11] Likewise, the other cases the trial court relied on are inapposite. Those cases either involved a FEHA claim or a wrongful termination claim, which are clearly outside the compensation bargain. (Accardi v. Superior Court, supra, 17 Cal.App.4th at p. 347, 21 Cal.Rptr.2d 292 [FEHA]; B & E Convalescent Center v. State Compensation Ins. Fund, supra, 8 Cal.App.4th at pp. 91-92, 9 Cal.Rptr.2d 894 [FEHA and wrongful termination]; and Flait v. North American Watch Corp., supra, 3 Cal.App.4th at p. 480, 4 Cal.Rptr.2d 522 [FEHA].)
[12] As IBC points out, the terms and conditions of Huffman's employment as a division sales manager could not constitute an age discrimination claim because at the time of these events, age discrimination with respect to working conditions was not covered by the FEHA (Esberg v. Union Oil Co. (2002) 28 Cal.4th 262, 267-268, 121 Cal.Rptr.2d 203, 47 P.3d 1069), and Huffman's harassment claim had been dismissed.
[13] In a pretrial meeting of counsel, IBC's counsel presented a text version which stated that plaintiff had the burden of proof based upon a preponderance of the evidence. That instruction referenced only Huffman's age discrimination claim. The court, however, rejected IBC's counsel's position that only Huffman's age discrimination claim should be tried. Huffman's proffered modified BAJI No. 2.60, the one given at trial, contained both causes of action.
[14] BAJI No. 2.60 as given stated: "Plaintiff is seeking damages based upon claims of age discrimination and wrongful demotion in breach of public policy.
"Plaintiff has the burden of proving by a preponderance of the evidence all of the facts necessary to establish the essential elements of each separate claim. The essential elements of each separate claim are set forth elsewhere in these instructions. In addition to these essential elements, plaintiff has the burden of proving by a preponderance of the evidence all of the facts necessary to establish the nature and extent of the damages claimed to have been suffered, the elements of plaintiff's damage and the amount thereof.
"The defendant has the burden of proving by a preponderance of the evidence all of the facts necessary to establish that in demoting Dan Huffman its conduct was done in good faith and for a proper business purpose.
"`Preponderance of the evidence' means evidence that has more convincing force than that opposed to it. If the evidence is so evenly balanced that you are unable to say that the evidence on either side of an issue preponderates, your finding on that issue must be against the party who had the burden of proving it.
"You should consider all of the evidence bearing upon every issue regardless of who produced it." (Italics added.)
[15] Here is the exchange between counsel and the trial court concerning Huffman's proposed BAJI No. 2.60, which became jury instruction No. 23:
"The Court: "Next is 2.60, `burden of proof and preponderance of evidence.'
"The dispute is?
"Mr. Matthews [Huffman's counsel]: There was a series of our instructions that were disputed because we included both causes of action, and Mr. Kelly [IBC's counsel] and I have had this discussion before your honor ruled on whether both would go.
"The Court: Okay. Well, that discussion, then, by the time we had concluded, I think, resolved some of those concerns.
"Mr. Matthews: That's correct. Isn't it that was your concern with our 2.60 that it also included wrongful demotion as well as age discrimination count?
"The Court: The question, Mr. Kelly is: Is there any objection remaining to 2.60 as requested by plaintiff?
"Mr. Kelly: No.
"The Court: Very well.
"Mr. Kelly: With the court's ruling."
[16] Before the ruling, IBC's counsel further stated that his error was inadvertent and that he would not have agreed to such an instruction that improperly gave IBC the burden of proof. The trial court appeared to accept this explanation. Nevertheless, the trial court, reviewed the transcript, in conjunction with IBC's counsel's declaration, analogized the situation as akin to a contract between Huffman's counsel on his client's behalf and IBC's counsel on behalf of his client. IBC's counsel's mistake of fact did not make the contract voidable. As the court reasoned, relying on a legal treatise discussing contract law, mistake of fact is "`not caused by the neglect of a legal duty on the part of the person making the mistake. . . .'" Moreover, the court invoked the invited error doctrine. It reasoned that IBC's counsel's "No" response to any further objection was, in effect, "a request that the court give [BAJI No.] 2.60." Later in its ruling, the court referred to IBC's counsel's "acquiescence" in permitting the giving of BAJI No. 2.60 as constituting either "a waiver, an estoppel against challenge or invited error."
[17] Following the Price Waterhouse decision, Congress enacted the Civil Rights Act of 1991, which, among other things, overruled that portion of the decision that permitted an employer to avoid liability by proving its affirmative defense. Federal law now provides that liability attaches, but restricts the plaintiff's remedies. (Desert Palace, Inc. v. Costa (2003) 539 U.S. 90, 94-95, 123 S.Ct. 2148, 156 L.Ed.2d 84.)
[18] The Supreme Court in LeMons outlined five separate factors that should be considered in order to measure the likelihood of whether the jury had been misled: "(1) the degree of conflict in the evidence on critical issues [citations]; (2) whether respondent's argument to the jury may have contributed to the instruction's misleading effect [citation]; (3) whether the jury requested a rereading of the erroneous instruction [citation] or of related evidence [citation]; (4) the closeness of the jury's verdict [citation]; and (5) the effect of other instructions in remedying the error [citations]." (LeMons v. Regents of University of California, supra, 21 Cal.3d at p. 876, 148 Cal.Rptr. 355, 582 P.2d 946.)
[19] We do not address the fourth factor, that is, the closeness of the jury's verdict, because the jury was not polled.
[20] We summarily dismiss Huffman's argument that the instructions were jointly requested or that IBC proposed a similar instruction. The first argument appears to be based on the trial court's reliance on cases invoking the invited error doctrine when the challenged instruction was jointly requested. That is not the case here. IBC originally designated BAJI No. 2.60, but, as noted, that is a "fill in the blank" instruction, which Huffman, and Huffman alone, erroneously filled in to shift the evidentiary burden to IBC.
[21] As stated, the trial court appeared to accept IBC's counsel's explanation that he made a mistake. Nevertheless, the trial court invoked contract principles to reason that IBC's counsel had entered into a contract with Huffman's counsel by stating that he had no further objection to the proffered instruction, and that mistake of fact would not be sufficient to void the contract. We do not view the analysis of instructional error to be based on contract principles.
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01-03-2023
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10-30-2013
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583 S.E.2d 707 (2003)
Marcel ELUHU, Plaintiff,
v.
Vladimir ROSENHAUS, Defendant.
No. COA02-1167.
Court of Appeals of North Carolina.
August 5, 2003.
*709 Cheshire, Parker, Schneider, Bryan & Vitale, by Jonathan McGirt, Raleigh, for plaintiff-appellant.
Manning, Fulton & Skinner, P.A., by Cary E. Close, Raleigh, for defendant-appellee.
MARTIN, Judge.
Plaintiff brought this action seeking compensatory and punitive damages upon allegations that defendant had alienated the affections of plaintiff's wife. Defendant made a special appearance in the matter in order to file a motion to dismiss for lack of personal jurisdiction. The trial court granted defendant's motion, dismissing the claim for lack of personal jurisdiction over defendant, and plaintiff appeals. We affirm.
In his verified complaint, plaintiff alleged that he is a citizen and resident of the State of Tennessee and that defendant is a resident of the State of California, "and maintains a home in Raleigh, Wake County, North Carolina." He also alleged that an exercise of personal jurisdiction over defendant by the trial court was proper because he committed a tortious act within the State of North Carolina. Aside from general allegations aimed at meeting the elements of the tort of alienation of affections, plaintiff also alleged, "[u]pon information and belief," that defendant and plaintiff's wife developed a "romantic affair that began in 1998 and has continued until the present.... Plaintiff's wife left the marriage and continued her romantic involvement with the Defendant.... For some length of time during the course of his romantic involvement with Plaintiff's wife, Defendant resided in Wake County, North Carolina."
Attached to defendant's motion to dismiss was a sworn affidavit, in which defendant attested that he had been a citizen and resident of California since August 1999, had resided in Nashville, Tennessee, from August 1997 to July 1999, and resided in Raleigh, North Carolina, from August 1991 to July 1997. He stated that after moving to Nashville, his only contacts with North Carolina included (1) the continued residence of his wife and son in Raleigh, where he visited them occasionally until April 1999, (2) a vacation in Atlantic Beach, NC, from 24 to 27 May 1999, and (3) ownership of a house in Raleigh which he rented to a third party from August 1999 to August 2000. Defendant attested that he sold the house in March 2001. Denying that he had ever had a "sexual relationship" with Ms. Eluhu, defendant stated that they worked together in Nashville and "developed a friendship." He further attested that:
[t]he only time I have ever had any contact with Plaintiff's wife in North Carolina was during a three-day vacation to Atlantic Beach in May of 1999, where she was also vacationing, with her three children. During that time, I saw Plaintiff's wife only in public and for a short time at her rented condominium in the presence of her children.
Plaintiff's former wife, Colette Calmelet-Eluhu, stated in an affidavit that she was a citizen and resident of Tennessee and had never lived in North Carolina. Her description of her friendship with defendant and their contact at Atlantic Beach was similar to that contained in defendant's affidavit. She stated that she planned the beach vacation before she knew of defendant's plans to be there at the same time and that her contact with defendant during the beach trip had no effect on her relationship with plaintiff.
Plaintiff's ten assignments of error are organized into two main arguments in his brief. Plaintiff argues (1) the findings of fact in the trial court's order dismissing his complaint were insufficient to permit meaningful appellate review and (2) the trial court erred in *710 finding that federal due process limitations did not permit the exercise of personal jurisdiction over defendant and consequently dismissing plaintiff's complaint. We reject both arguments.
"The trial court's determination regarding the existence of grounds for personal jurisdiction is a question of fact." Adams, Kleemeier, Hagan, Hannah & Fouts, PLLC v. Jacobs, N.C.App. , , 581 S.E.2d 798, 801 (2003) (citations omitted).
Absent a request by a party, a trial court is not required to make findings of fact when ruling on a motion. Rather, on appeal it is presumed that the trial court found facts sufficient to support its ruling. If these presumed factual findings are supported by competent evidence, they are conclusive on appeal.
Filmar Racing, Inc. v. Stewart, 141 N.C.App. 668, 672, 541 S.E.2d 733, 737 (2001) (citations omitted). In the present case, plaintiff has not pointed this Court to any place in the record where he requested such findings and we can find none. "Accordingly, the dispositive issue before us is the sufficiency of the evidence to support [the] determination that personal jurisdiction did not exist." Id.
A determination of personal jurisdiction involves a two-part analysis.
First, the North Carolina long-arm statute must permit the exercise of personal jurisdiction. Second, the exercise of personal jurisdiction must comport with the due process clause of the Fourteenth Amendment of the United States Constitution. However, "when personal jurisdiction is alleged to exist pursuant to the long-arm statute, the question of statutory authority collapses into one inquirywhether defendant has the minimum contacts necessary to meet the requirements of due process."
Id., at 671, 541 S.E.2d at 736 (quoting Hiwassee Stables, Inc. v. Cunningham, 135 N.C.App. 24, 27, 519 S.E.2d 317, 320 (1999)). (citations omitted). In the present case, defendant conceded before the trial court that plaintiff had satisfied the long-arm statute. See N.C. Gen.Stat. § 1-75.4(3) (2003); Godwin v. Walls, 118 N.C.App. 341, 349, 455 S.E.2d 473, 480 (1995) (statute only requires plaintiff to claim listed injuries, not prove them). Therefore, our inquiry focuses on whether there was evidence in the record to support the trial court's determination that "the exercise of personal jurisdiction over Defendant ... would not comport with due process of law."
In order to determine whether the exercise of personal jurisdiction comports with due process, the trial court must evaluate whether the defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278, 283 (1940)).
"Factors for determining existence of minimum contacts include `(1) quantity of the contacts, (2) nature and quality of the contacts, (3) the source and connection of the cause of action to the contacts, (4) the interest of the forum state, and (5) convenience to the parties.'" In cases which arise from or are related to defendant's contacts with the forum, a court is said to exercise "specific jurisdiction" over the defendant. However, in cases ... where defendant's contacts with the state are not related to the suit, an application of the doctrine of "general jurisdiction" is appropriate. Under this doctrine, "jurisdiction may be asserted even if the cause of action is unrelated to defendant's activities in the forum as long as there are sufficient `continuous and systematic' contacts between defendant and the forum state."
Bruggeman v. Meditrust Acquisition Co., 138 N.C.App. 612, 617, 532 S.E.2d 215, 219, (citations omitted) disc. review denied, 353 N.C. 261, 546 S.E.2d 90 (2000).
A trial court ruling on the defendant's challenge to the exercise of personal jurisdiction may either (1) decide the matter based on affidavits, or (2) conduct an evidentiary hearing with witness testimony or depositions. N.C.G.S. § 1A-1, Rule 43(e) (2001). Either way, "the burden is on the plaintiff to prove by a preponderance of *711 the evidence that grounds exist for the exercise of personal jurisdiction over a defendant."
Adams, N.C.App. at , 581 S.E.2d at 801 (citation omitted). The allegations in a complaint are taken as true and controlling unless the defendant supplements its motion to dismiss with affidavits or other supporting evidence, in which case the plaintiff must respond "`by affidavit or otherwise ... setting forth specific facts showing that the court has jurisdiction.'" Bruggeman, 138 N.C.App. at 615-16, 532 S.E.2d at 218 (citation omitted). A "` "verified complaint may be treated as an affidavit if it (1) is made on personal knowledge, (2) sets forth such facts as would be admissible in evidence, and (3) shows affirmatively that the affiant is competent to testify to the matters stated therein."'" Adams, N.C.App. at , 581 S.E.2d at 803 (quoting Spinks v. Taylor and Richardson v. Taylor Co., 303 N.C. 256, 264, 278 S.E.2d 501, 506 (1981)) (citation omitted).
In the present case, plaintiff argues there are grounds to assert both specific and general jurisdiction over defendant. In terms of specific jurisdiction, plaintiff argues that "[t]he contacts between Defendant and North Carolina that are related to or give rise to the specific cause of action were those that occurred during the `three-day vacation' during which Defendant connected with Plaintiff's wife in Atlantic Beach in May 1999." Plaintiff's complaint, however, contains no allegations with respect to this trip, but rather only general allegations as to defendant's relationship with Ms. Eluhu, several of which either contain no reference to place or time or do not qualify as evidentiary statements as they are based only "upon information and belief." See Tompkins v. Tompkins, 98 N.C.App. 299, 304, 390 S.E.2d 766, 769 (1990) (allegations of misconduct, "absent any allegations going to a nexus between such misconduct and this State, are simply insufficient to permit the reasonable inference that personal jurisdiction over defendant could properly be acquired"). Thus, any information concerning the North Carolina beach vacation must be taken from the affidavits of defendant and Ms. Eluhu. Significantly, Ms. Eluhu attested that she "[knew] of no change whatsoever in my relations with Plaintiff, or my relations with Defendant during, right after or because of the beach trip to North Carolina."
The evidence before the trial court, therefore, discloses little, if any at all, connection between defendant's contacts with North Carolina and plaintiff's cause of action. That defendant admitted to seeing Ms. Eluhu at Atlantic Beach does not permit a conclusion that he alienated her affection from plaintiff at that time. Moreover, nothing in plaintiff's verified complaint successfully contradicts Ms. Eluhu's statement that seeing defendant during the beach trip had no effect on her relationship with plaintiff. For our purposes, the statement renders this contact between defendant and North Carolina quite insignificant with respect to plaintiff's claim for alienation of affection. In addition, although North Carolina does have an interest in providing a forum for actions based on torts that occur in North Carolina, the evidence presented to the trial court showed that neither plaintiff nor defendant is a resident of North Carolina and that almost all of the contact between defendant and Ms. Eluhu occurred in Tennessee. Given that the tort of alienation of affection has been abolished in both California and Tennessee, see Dupuis v. Hand, 814 S.W.2d 340 (Tenn.1991), Cal. Civ. Code § 43.5(a) (2003), but not North Carolina, and that it is a transitory tort, to which courts must apply the substantive law of the state in which the tort occurred, see Cooper v. Shealy, 140 N.C.App. 729, 537 S.E.2d 854 (2000), plaintiff's decision to sue defendant in North Carolina smacks of forum-shopping. See Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977). Lastly, defending against a suit in North Carolina would clearly be inconvenient for defendant, who resides in California, and plaintiff, as a resident of Tennessee, has no claim on the State of North Carolina to provide a forum for the settlement of his general disputes. Tom Togs, Inc. v. Ben Elias Industries Corp., 318 N.C. 361, 367, 348 S.E.2d 782, 787 (1986) ("It is generally conceded that a state has a `manifest interest' in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors."). Considering all of these factors, especially *712 the weak connection between defendant's trip to Atlantic Beach and the instant cause of action, in light of "traditional notions of fair play and substantial justice," the trial court did not err in finding defendant's contacts with North Carolina were insufficient to subject him to specific in personam jurisdiction.
In terms of general jurisdiction, the record admittedly discloses continuous contacts between defendant and North Carolina during a period of several years prior to the filing of the complaint. From 1991 to 1997, defendant was a resident of this State. Although he moved to Tennessee in 1997 and lived and worked there until April 1999, his wife and son remained in Raleigh in a home the couple owned, and defendant admittedly traveled back to Raleigh during this period "occasionally" to visit his family. He took a three-day vacation in Atlantic Beach in May 1999. After his family relocated to California, he rented the Raleigh house from August 1999 to August 2000, and he sold it in March 2001. The complaint was filed in October 2001. Taken together, these contacts with North Carolina are more significant than those of the defendant in Fraser v. Littlejohn, 96 N.C.App. 377, 386 S.E.2d 230 (1989). In that case, this Court held that even though the defendant had not resided or worked in North Carolina after 1986, two years prior to the filing of the action in 1988, the substantial contacts he had with North Carolina from 1983 to 1986, along with related minor contacts through 1988, constituted continuous and systematic contacts for purposes of exercising general jurisdiction over him. Id. at 383-387, 386 S.E.2d at 234-237. See also Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 569-70 (1996) ("The minimum contacts inquiry is fact-intensive, and the appropriate period for evaluating a defendant's contacts will vary in individual cases. In general jurisdiction cases, district courts should examine a defendant's contacts with the forum state over a period that is reasonable under the circumstancesup to and including the date the suit was filedto assess whether they satisfy the `continuous and systematic' standard."), cert. denied, 519 U.S. 1006, 117 S.Ct. 508, 136 L.Ed.2d 398 (1996).
However, a finding of continuous and systematic contacts does not automatically authorize the exercise of general personal jurisdiction over a defendant. See Fraser, 96 N.C.App. at 386-87, 386 S.E.2d at 236-37. The exercise of jurisdiction over a defendant may nonetheless violate due process based on inconvenience to the defendant and/or a lack of interest of the forum state in the litigation. Other than the recognition by North Carolina of the claim for alienation of affections, nothing in the record indicates a reason for North Carolina to have an interest in the litigation. While this Court expressed an interest on the part of North Carolina in protecting the institution of marriage in Cooper v. Shealy, 140 N.C.App. 729, 537 S.E.2d 854 (2000), that case involved a resident plaintiff whose marriage was allegedly destroyed by telephone calls and e-mails to her North Carolina resident spouse from the South Carolina defendant. In this case, neither plaintiff nor defendant is a resident of North Carolina; plaintiff's bare allegation concerning the commission of the alleged tort in this State was effectively refuted by the affidavits filed in support of defendant's motion to dismiss. Plaintiff neither alleged nor attested to the existence of witnesses or evidence within North Carolina necessary to his case. Byham v. National Cibo House Corp., 265 N.C. 50, 57, 143 S.E.2d 225, 231 (1965); Cooper, 140 N.C.App. at 736, 537 S.E.2d at 858. Without some showing of interest on the part of North Carolina in adjudicating this dispute, the inconvenience to defendant of defending the matter here is not mitigated. Subjecting defendant to suit in North Carolina under these circumstances would not comport with due process and thus the trial court did not err in refusing to exercise general in personam jurisdiction over defendant.
The trial court's order dismissing plaintiff's action against defendant for lack of personal jurisdiction is affirmed.
Affirmed.
Judge LEVINSON concurs.
Judge TYSON dissents.
*713 TYSON, Judge, dissenting.
Defendant engaged in sufficient minimum contacts within the State of North Carolina to subject him to personal jurisdiction consistent with due process, and to enable plaintiff to survive defendant's motion to dismiss. I respectfully dissent.
In Cooper v. Shealy, 140 N.C.App. 729, 537 S.E.2d 854 (2000) our Court found jurisdiction based upon sufficient contacts that satisfied due process in an action for alienation of affections where an out-of-state defendant called and emailed plaintiff's husband in North Carolina. The out-of-state calls were solicitations within the statutory language of the long-arm statute. Cooper, 140 N.C.App. at 734, 537 S.E.2d at 857; N.C.G.S. § 1-75.4 (2001). This Court noted the minimal requirements established by the federal courts, and held these contacts were sufficient to satisfy due process. Id. at 734-35, 537 S.E.2d at 858 (citing Brown v. Flowers Industries, Inc., 688 F.2d 328 (5th Cir.1982), cert. denied, 460 U.S. 1023, 103 S.Ct. 1275, 75 L.Ed.2d 496 (1983), and J.E.M. Corporation v. McClellan, 462 F.Supp. 1246 (D.Kan.1978) (exercising personal jurisdiction where defendant's only contact with the forum state was a single phone call from out-of-state)). See also, Haizlip v. MFI of South Carolina, Inc., N.C.App. , 583 S.E.2d 427, 2003 WL 21791639 (2003) (finding sufficient minimum contacts where defendant's only contacts were phone calls and mailings to North Carolina).
Defendant and the majority's opinion concedes jurisdiction under the long-arm statute, leaving the issue of minimum contacts for consideration. N.C.G.S. § 1-75.4. The due process test for minimum contacts requires inquiry into the five factors discussed in the majority's opinion. Bruggeman v. Meditrust Acquisition Co., 138 N.C.App. 612, 617, 532 S.E.2d 215, 219, disc. review denied and appeal dismissed, 353 N.C. 261, 546 S.E.2d 90-91 (2000) (citations omitted). The majority's opinion finds evidence to satisfy all requirements except for convenience to the parties and interest of the forum state.
The remaining factors of convenience and interest of the forum state have been termed the "fairness" factors and are viewed secondarily, after finding the existence of sufficient minimum contacts. See Fraser v. Littlejohn, 96 N.C.App. 377, 387, 386 S.E.2d 230, 237 (1989). The majority's opinion concludes that the two "fairness" factors outweigh the others in order to affirm the trial court.
I disagree. Although defendant now lives in California, and may be "inconvenienced" by this litigation, his substantial ongoing contacts and physical presence within North Carolina before, at, and after the time the cause of action arose mitigates against any inconvenience. "There is almost always some hardship to the party required to litigate away from home. But there is no constitutional requirement that this hardship must invariably be borne by the plaintiff whenever the defendant is a nonresident." Byham v. House Corp., 265 N.C. 50, 60, 143 S.E.2d 225, 234 (1965). Although not a "resident" when the complaint was filed, defendant purposefully availed himself of the privileges of residing, raising his family, renting his house, and vacationing in North Carolina. Defendant could fairly anticipate being subject to litigation as a result of those contacts. If this action arose out of an alleged civil assault or battery occurring in North Carolina, there would be little doubt that North Carolina had personal jurisdiction over defendant. Allowing plaintiff to bring his claim will not "offend[ ] `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945)(quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278, 283 (1940), reh'g denied, 312 U.S. 712, 61 S.Ct. 548, 85 L.Ed. 1143 (1941)).
As for the interest of the forum state, this Court in Cooper re-iterated.
It is important to note that plaintiff cannot bring the claims for alienation of affections and criminal conversation in ... (defendant's resident state) since that state has abolished those causes of actions, (citation omitted) Therefore, North Carolina's interest in providing a forum for plaintiff's cause of action is especially great in light of the circumstances. Furthermore, North Carolina's legislature and courts have repeatedly demonstrated the importance of *714 protecting marriage. N.C. Gen.Stat. § 8-57(c) (spouses may not be compelled to testify against each other if confidential information made by one to the other would be disclosed); Thompson v. Thompson, 70 N.C.App. 147, 319 S.E.2d 315 (1984), rev'd on other grounds, 313 N.C. 313, 328 S.E.2d 288 (1985) (attorneys representing a client in a divorce proceeding may not use contingent fee contracts since they tend to promote divorce and discourage reconciliation); Cannon v. Miller, 313 N.C. 324, 327 S.E.2d 888 (1985) (the causes of action for alienation of affections and criminal conversation are still in existence).
Cooper, 140 N.C.App. at 735, 537 S.E.2d at 858.
North Carolina has personal jurisdiction over the defendant due to his "continuous and systematic" quantity and quality of contacts with North Carolina. The quantity and nature of the contacts, North Carolina's interest in the litigation, and the relative inconvenience to the parties complies with due process in finding personal jurisdiction over the defendant. The nature of this tort and the perceived strength of plaintiff's claim should not be considerations in a motion to dismiss for lack of personal jurisdiction. The trial court's dismissal at this early stage of litigation is error. I respectfully dissent.
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583 S.E.2d 726 (2003)
STATE of North Carolina
v.
Buddy Lee LOCKLEAR.
No. COA02-1409.
Court of Appeals of North Carolina.
August 5, 2003.
*728 Attorney General Roy A. Cooper, by Special Deputy Attorney General Isaac T. Avery, III, and Assistant Attorney General Patricia A. Duffy, for the State.
Duncan B. McCormick, Lillington, for defendant appellant.
TIMMONS-GOODSON, Judge.
Buddy Lee Locklear ("defendant") appeals his convictions of second-degree murder, assault with a deadly weapon inflicting serious injury, driving while impaired, and unsafe movement of his motor vehicle. For the reasons stated herein, we find no error by the trial court.
The State presented evidence at trial tending to show the following: On 2 August 2001, at approximately 10:30 p.m., defendant was operating a motor vehicle on Piney Green Road when he collided with a vehicle operated by Joseph Matthews, III ("Matthews"). Joseph Matthews, IV ("Joseph"), Matthews's seven-year-old son, died as a result of injuries sustained in the collision. An autopsy examination of Joseph's body revealed that he suffered contusions to the chest, throat and neck areas. Testimony from Dr. Charles L. Garrett, a forensic pathologist, revealed that Joseph's death resulted from him suffocating when the shoulder belt of the motor vehicle restraint system tore his windpipe and prevented air from entering his lungs. Matthews also sustained numerous injuries to his body as a result of the collision.
Officer Kenneth Smith ("Officer Smith") testified that he observed the front end of defendant's vehicle on the top of the automobile operated by Matthews. Upon questioning defendant about the collision, Officer Smith "noticed a strong odor of alcohol coming from [defendant's person]." Officer Smith then examined defendant's physical appearance and further noticed that defendant's "eyes were red, glassy and watery, his speech was slurred, and defendant was unsteady on his feet." Therefore, Officer Smith arrested defendant for driving while impaired.
Upon his arrival at the police station, defendant was administered an Intoxilyzer test which recorded a breath alcohol concentration of 0.08. Additionally, Officer Smith administered several field sobriety tests at the police station. Officer Smith testified that defendant "swayed the entire thirty (30) seconds" and failed to maintain balance on one leg during the test.
On 9 May 2002, defendant was convicted of second degree murder, assault with a deadly weapon inflicting serious injury, driving while impaired, and unsafe turning of a vehicle. Defendant was sentenced to the following: Two (2) years for driving while impaired and active terms of imprisonment of a minimum term of 125 months to a maximum term of 159 months and ordered to pay $36,000.00 in restitution. Defendant appeals.
Defendant presents four issues for review, contending that the trial court erred in (1) denying defendant's motion to dismiss the charge of second-degree murder; (2) instructing the jury on the definition of malice; (3) excluding evidence regarding the seat belt restraint worn by Joseph; and (4) allowing testimony regarding defendant's prior arrest and conviction for driving while impaired.
We first address the assignment of error in which defendant argues that the trial court erred by denying his motion to dismiss the charge of second-degree murder. Specifically, defendant asserts that there was insufficient evidence to show malice. We disagree.
In considering a motion to dismiss, the trial court must examine the evidence in the light most favorable to the State and give *729 the State the benefit of every reasonable inference that may be drawn from the evidence. State v. Benson, 331 N.C. 537, 544, 417 S.E.2d 756, 761 (1992). The standard of review for a "motion to dismiss based on insufficiency of the evidence is the substantial evidence test." State v. Jones, 110 N.C.App. 169, 177, 429 S.E.2d 597, 602 (1993), cert. denied, 336 N.C. 612, 447 S.E.2d 407 (1994). "The substantial evidence test requires a determination that there is substantial evidence (1) of each essential element of the offense charged, and (2) that the defendant is the perpetrator of the offense." Id. Substantial evidence is defined as the amount of "relevant evidence as a reasonable mind might accept as adequate to support a conclusion." State v. Smith, 300 N.C. 71, 78-79, 265 S.E.2d 164, 169 (1980).
"`Second-degree murder is defined as the unlawful killing of a human being with malice but without premeditation and deliberation.'" State v. Rick, 342 N.C. 91, 98, 463 S.E.2d 182, 186 (1995) (quoting State v. Phipps, 331 N.C. 427, 457-58, 418 S.E.2d 178, 194 (1992)). See also State v. McDonald, 151 N.C.App. 236, 243, 565 S.E.2d 273, 277, disc. review denied, 356 N.C. 310, 570 S.E.2d 892 (2002). Whether the State has carried its burden of proof of malice depends on the factual circumstances of each case. State v. McBride, 109 N.C.App. 64, 67, 425 S.E.2d 731, 733 (1993). In State v. Rich, 351 N.C. 386, 527 S.E.2d 299 (2000), our Supreme Court addressed the precise issue of malice as raised by defendant. Our Supreme Court adopted the position that, "... wickedness of disposition, hardness of heart, cruelty, recklessness of consequences, and a mind regardless of social duty and deliberately bent on mischief ..." are examples, any one of which may provide the malice necessary to convict a defendant of second-degree murder. Id. at 391, 527 S.E.2d at 302.
Our Supreme Court has approved the following definition of "deliberately bent on mischief," one of the attitudinal indices of legal malice.
[The term deliberately bent on mischief] connotes conduct as exhibits conscious indifference to consequences wherein probability of harm to another within the circumference of such conduct is reasonably apparent, though no harm to such other is intended. [It] connotes an entire absence of care for the safety of others which exhibits indifference to consequences. It connotes conduct where the actor, having reason to believe his act may injure another, does it, being indifferent to whether it injures or not. It indicates a realization of the imminence of danger, and reckless disregard, complete indifference and unconcern for probable consequences. It connotes conduct where the actor is conscious of his conduct, and conscious of his knowledge of the existing conditions that injury would probably result, and that, with reckless indifference to consequences, the actor consciously and intentionally did some wrongful act to produce injurious result.
Rich, 351 N.C. at 394, 527 S.E.2d at 303. Further, our Supreme Court announced that any one of the descriptive phrases provided in the malice instruction helps define malice and does not constitute "elements" of malice. Thus, the jury may infer malice from any one of those attitudinal examples. Id. at 393, 527 S.E.2d at 303. It is necessary for the State to prove only that defendant had the intent to perform the act of driving in such a reckless manner as reflects knowledge that injury or death would likely result, thus evidencing depravity of mind.
In the instant case, the State's evidence on the issue of malice tended to show that defendant was driving while impaired with an alcohol concentration of 0.08, which is above the legal limit, and that defendant was on notice as to the serious consequences of driving while impaired as a result of his prior driving while impaired conviction which occurred four years earlier. Examining the evidence in the light most favorable to the State, there was substantial evidence presented from which the jury could find malice and each of the other essential elements of second-degree murder. Thus, the trial court did not err in denying defendant's motion to dismiss the charge of second-degree murder.
In the next assignment of error, defendant challenges the trial court's instructions to the jury on the definition of malice. Specifically, defendant argues that the trial *730 court erred in failing to instruct the jury that the jury was required to find at least one of the attitudinal examples to infer the element of malice. We disagree.
"The charge of the court must be read as a whole ..., in the same connected way that the judge is supposed to have intended it and the jury to have considered it...." Rich, 351 N.C. at 393, 527 S.E.2d at 303 (quoting State v. Wilson, 176 N.C. 751, 754-55, 97 S.E. 496, 497 (1918)). A charge to the jury is viewed contextually, and isolated portions will not be held prejudicial when the charge as [a] whole is correct. Id. at 394, 527 S.E.2d at 303. "If the charge presents the law fairly and clearly to the jury, the fact that some expressions, standing alone, might be considered erroneous will afford no ground for reversal." State v. Lee, 277 N.C. 205, 214, 176 S.E.2d 765, 770 (1970).
After initially charging the jury, the jury deliberated for one hour and returned with a question for the trial court regarding the definition of malice. After a discussion with counsel, the trial court gave the following instruction to the jury:
Malice comprehends not only particular animosity, but also wickedness of disposition, hardness of heart, cruelty, recklessness of consequences and a mind regardless of social duty and deliberately bent on mischief. While there may be no intention to injure a particular person it does not mean an actual intent to take human life. It may be inferred or implied instead of positive as when an act which imports danger to another is done so recklessly or wantonly as to manifest depravity of mind and disregard of human life.
After deliberating for fifty-five minutes, the jury sent the following written question to the trial court: "we are still stuck on malice, specifically, the words `and deliberately bent on mischief.' Where did that come from?" The judge then instructed the jury as follows:
My answer to these questions is this, what I have read to you in my written instructions, and also, I have given additional instructions on circumstances of malice in my clarification, which I gave orally to you. These attitudinal circumstances given in the jury instructions for malice serve as descriptive phrases. These words or phrases are each descriptive of the type or types of thought, attitude, or condition of mind sufficient to constitute malice. The descriptive phrases listed in the instructions for malice serve to help define malice for the jury. They do not constitute elements of malice, which is, itself, an element of second-degree murder. And thus, the State need not prove each and every one of these attitudinal examples of malice in order for the jury to infer the element of malice.
The jury instructions made clear that the State need not prove each and every one of the attitudinal examples of malice. Taken as a whole, the trial court's instruction on "malice" was a correct statement of the law.
In the third assignment of error, defendant contends that the trial court erred in excluding evidence that the deceased victim was improperly restrained by a seat belt. This argument is dismissed. "In order to preserve an argument on appeal which relates to the exclusion of evidence ... the defendant must make an offer of proof so that the substance and significance of the excluded evidence is in the record." State v. Ginyard, 122 N.C.App. 25, 33, 468 S.E.2d 525, 531 (1996). According to North Carolina General Statutes section 8C-1, Rule 103, "[e]rror may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected, and ... [i]n case the ruling is one excluding evidence, the substance of the evidence was made known to the court by offer or was apparent from the context within which questions were asked." N.C. Gen.Stat. § 8C-1, Rule 103 (2001).
In the instant case, the record reveals that defendant failed to produce any witnesses or submit affidavits regarding the seat belt restraint. Defendant failed to make an offer of proof by a competent witness that Joseph would not have suffered a fatal injury if he had been restrained in a different manner. Accordingly, this assignment of error is overruled.
*731 In the last assignment of error, defendant argues that the trial court erred in allowing testimony regarding the facts and circumstances surrounding his prior arrest and conviction for driving while impaired. Specifically, defendant contends that testimony from the arresting officer, Paul Ehrler, ("Officer Ehrler") regarding the events of defendant's 1996 arrest and subsequent conviction, were not probative as to the issue of malice and should have been excluded. We disagree.
Defendant concedes in his brief that the State in its case-in-chief may properly present evidence of a prior conviction for driving while impaired for the purpose of showing malice. Defendant also recognizes that the events and circumstances of a prior driving while impaired arrest may also be admitted if the events are sufficiently similar to the circumstances at issue. The point on which defendant disagrees is whether the facts and circumstances of his prior driving while impaired arrest are sufficiently similar to the present case so as to be admissible.
Evidence of prior convictions may have probative value as long as the incidents are relevant to any fact or issue other than to show character of the accused. Rule 404(b)of the North Carolina Rules of Evidence does not require that these prior incidents be exactly the same in order to have probative value. See State v. Sneeden, 108 N.C.App. 506, 509-10, 424 S.E.2d 449, 451 (1993), affirmed, 336 N.C. 482, 444 S.E.2d 218 (1994). Further, the similarities between the circumstances need not rise to the level of the unique and bizarre but simply "must tend to support a reasonable inference that the same person committed both the earlier and later acts." State v. Stager, 329 N.C. 278, 304, 406 S.E.2d 876, 891 (1991). The evidence reveals several significant similarities between the prior driving while impaired charge and the case at issue. Officer Ehrler's testimony regarding defendant's 1996 arrest revealed that defendant was operating a motor vehicle; had a blood alcohol level above the legal limit; and while operating his vehicle under the influence of alcohol, defendant made an unsafe traffic turn that resulted in a collision. Officer Ehrler testified that defendant performed poorly on sobriety tests and that he resisted arrest by twisting the officer's wrist and cursing the officer. In the present case, the evidence tended to show that while driving with a blood alcohol content of .08, defendant caused a traffic accident by making an improper turn into the path of Matthews's car. We conclude that the circumstances of the 1996 driving while impaired arrest were sufficiently similar so as to have probative value.
Defendant next argues that even if the details surrounding his 1996 driving while impaired arrest have "some limited probative value," the probative value of the evidence is outweighed by the danger of prejudice. Defendant urges this Court to vacate the second-degree murder conviction because of the prejudicial nature of the evidence of defendant's combativeness with the arresting officer during his 1996 arrest. "A defendant is prejudiced ... when there is a reasonable possibility that, had the error in question not been committed, a different result would have been reached at the trial...." N.C. Gen.Stat. § 15A-1443(a)(2001). Assuming arguendo, that it was error to admit testimony that defendant resisted arrest at his prior driving while impaired charge, we conclude that the admission of this evidence was not such that the jury would have reached a different result. See State v. Bruton, 344 N.C. 381, 387, 474 S.E.2d 336, 341 (1996) (concluding that in light of evidence of defendant's guilt, there was no basis for determining that a different result would have been reached). The testimony of defendant's actions in resisting his 1996 arrest did not rise to the level of altering the balance of the scales against defendant in light of all the evidence. Absent the evidence of resisting arrest, the State presented as a whole sufficient evidence that defendant was guilty of second-degree murder. Joseph died as a result of defendant's unsafe operation of his vehicle while driving with a blood alcohol concentration in excess of the legal limit. The second-degree murder charge arose five years after defendant's arrest and conviction for another driving while impaired charge. The prior driving while impaired arrest and conviction should have alerted him to the hazards of driving while impaired.
*732 Therefore, evidence of the events surrounding defendant's 1996 driving while impaired arrest and conviction was admissible to establish malice. We therefore hold that the trial court did not err in admitting the evidence of the events surrounding defendant's prior arrest and conviction for driving while impaired.
For the reasons stated herein, we conclude that the trial court committed no error.
No error.
Judge HUNTER, concurs.
Judge ELMORE, dissents.
ELMORE, Judge, dissenting.
I disagree with the majority on the last assignment of error concerning the testimony of Officer Ehrler of the circumstances of defendant's prior arrest. The admission of the Officer's testimony was in error, and that error was prejudicial.
At trial, Officer Ehrler testified that in May of 1996 he observed the defendant run a red light and weave in the lane, and pulled the defendant over. Officer Ehrler went on to testify in detail of the defendant's demeanor and actions throughout the course of the traffic stop, field sobriety tests, and subsequent arrest. Officer Ehrler testified in part:
Q: So at that point [after field sobriety tests] did you place him under arrest?
A: Yes, I did.
Q: Did you have any difficulty placing him under arrest?
A: I put one handcuff on him, yes, I did, and he turned around and said "what are you doing?" and grabbed my wrist and started twisting it. He started cussing. Luckily, another officer arrived and we had to wrestle him a little bit, not too much, but a little bit to get him into cuffs.
In transport to the police department, according to Officer Ehrler's testimony, defendant was "[c]ussing. Screaming. One minute he begged me to let him go, next thing he'd be cussing me, told me how horrible a police officer I am." In response to questioning by the trial court, the officer noted that defendant had not been speeding, had not left his lane of travel and gone into another lane, and had no trouble producing his license and registration.
Defendant assigns error to the admission of this testimony concerning the details surrounding the 1996 arrest as lacking probative value, and also any probative value would be substantially outweighed by danger of unfair prejudice to the defendant.
State v. Jones, 347 N.C. 193, 213, 491 S.E.2d 641, 653 (1997), provides that an evidentiary ruling by a lower court should only be overturned if the decision was so arbitrary as to be irrational. If there was any rational basis for admitting this evidence, the ruling must stand. Although evidence of prior crimes, wrongs or acts by a defendant is allowed into evidence for purposes of proving malice under Rule 404(b), the admissibility is guided by the constraints of similarity and temporal proximity. State v. Artis, 325 N.C. 278, 299, 384 S.E.2d 470, 481 (1989), judgment vacated on other grounds, 494 U.S. 1023, 110 S.Ct. 1466, 108 L.Ed.2d 604 (1990), on remand, 329 N.C. 679, 406 S.E.2d 827 (1991). "When the features of the earlier act are dissimilar from those of the offense with which the defendant is currently charged, such evidence lacks probative value. When otherwise similar offenses are distanced by significant stretches of time, commonalities become less striking[.]" Id. For example, the evidence is properly admitted when the prior offense and the offense charged are identical. See e.g. State v. McAllister, 138 N.C.App. 252, 530 S.E.2d 859 (2000). Details of the arrest are admissible for the purpose of proving malice only when they have a tendency to demonstrate the defendant knew his conduct was "reckless and inherently dangerous to human life." State v. Jones, 353 N.C. 159, 173, 538 S.E.2d 917, 928 (2000). I disagree with the majority that this officer's testimony had any tendency to prove malice. That defendant had been stopped before in a traffic stop with no other cars involved does not tend to prove that he knew in the incident before us that his actions were inherently dangerous.
Although defendant was intoxicated in both cases, neither the details of how the *733 1996 accident occurred, the facts surrounding his field sobriety tests nor the fact that he resisted arrest are similar or relevant to the case at bar. None of these details have any tendency to demonstrate that defendant was aware that his conduct leading up to the collision at issue was reckless and inherently dangerous to human life. The testimony only tended to make the defendant look uncooperative and belligerent with officials, which had not been the case in the incident at issue here. This evidence was more prejudicial than it was probative. Given all the circumstances of the case, this evidence is of a nature likely to prejudice the jury's consideration. I would vacate the judgment and remand for a new trial.
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327 B.R. 230 (2005)
In re GLOBAL INDUSTRIAL TECHNOLOGIES, INC., et al., Debtors.
Global Industrial Technologies Services Company, Global Industrial Technologies, Inc., GPX Forge-Acquisition, Inc., GPX Forge, Inc., GPX Forge-U, Inc., GPX Corp., and RHI Refractories America Inc., Movants,
v.
Tanglewood Investments, Inc., Respondent.
No. 02-21626JKF.
United States Bankruptcy Court, W.D. Pennsylvania.
July 13, 2005.
*231 Nicholas R. Pagliari, Reed Smith LLP, Paul M. Singer, Reed Smith, Gregory L. Taddonio, Amy M. Tonti, Reed Smith LLP, David Ziegler, Esq., Reed Smith, LLP, Lisa R. Kerszencwejg, Cohen & Grigsby, P.C., Pittsburgh, PA, for debtors.
Peter Nicholas Pross, Eckert, Seamans, Cherin & Mellott LLC, Pittsburgh, PA, for defendant.
MEMORANDUM OPINION[1]
JUDITH K. FITZGERALD, Bankruptcy Judge.
Before the court is Debtors' Objection to *232 Unliquidated Claims[2] of Tanglewood Investments, Inc. ("Tanglewood") and Tanglewood's Motion for Summary Judgment on Objection to Unliquidated Claims of Tanglewood Investments, Inc.
Under Fed.R.Civ.Pro. 56(c), made applicable in these proceedings by Fed.R.Bankr.Pro. Rules 9014 and 7056, summary judgment is appropriate only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In considering a motion for summary judgment, the court must review the record, arguments of counsel, pleadings, and inferences in a light most favorable to Debtors, the party opposing the motion.
Background
As of June 22, 1999 (the "Acquisition Date"), AF Acquisition Company purchased certain assets from UCR Inc., AFC Acquisition, Inc., and GPX Forge f/k/a Ameri-Forge Corporation (the "Old Ameri-Forge") pursuant to the Asset Purchase Agreement ("APA"). Dkt. 3112, Stipulation of Facts (hereafter "SOF") at Exh. A ¶ 1. At some point after the Acquisition Date, purchaser AF Acquisition Company changed its name to Ameri-Forge Corporation (the "New Ameri-Forge"). SOF at ¶ 2. Debtor Global Industrial Technologies, Inc. (principal Debtor in these consolidated cases at Bankruptcy No. 02-21626) is the sole stockholder of Debtor GPX, Inc., (02-21632) and GPX, Inc., is the sole stockholder of Debtor GPX Forge, Inc., (02-21636). SOF at ¶ 3.
The relationship between Tanglewood and the purchaser, New Ameri-Forge, has not been made clear to the court. Tanglewood was not a signatory to the APA. However, there appears to be no dispute among the parties in interest that Tanglewood stands in the place of New Ameri-Forge and possesses whatever rights and obligations New Ameri-Forge obtained in the APA. Therefore, for the purposes of this contested matter, the court will assume that Tanglewood has standing to file the proofs of claim and to bring the summary judgment motion. Further, unless identification of a particular corporate entity is required, the court will refer to the buyer in the APA as Tanglewood and the sellers as Debtors.
On December 22, 2000, 25 employees of Old Ameri-Forge and/or New Ameri-Forge (the "Mendez Plaintiffs") commenced a lawsuit against Tanglewood, Debtor Global Industrial Technologies, Inc., and various of their affiliates and subsidiaries (together, the "Mendez Defendants") as joint defendants in Roberto C. Mendez, et al. v. Ameri-Forge Corporation et al. (Cause No.XXXX-XXXXX) (the "Mendez Suit"), in the 11th Judicial District Court of Harris County, Texas, asserting claims sounding in, inter alia, harassment, disparate treatment/discrimination in wages, assault, harassment/hostile work environment and retaliation. SOF at ¶ 12.
On February 12, 2001, the Mendez Defendants removed the Mendez Suit to the United States District Court for the Southern *233 District of Texas (Houston Div.) (Case No. H-01-0523). SOF at ¶ 13.
Debtors engaged the law firm of Jackson Lewis Schnitzler & Krupman ("JLS & K") to respond to and defend against the Mendez Suit. SOF at ¶ 14. Tanglewood engaged the firm of Locke Liddell & Sapp, LLP ("LLS") to defend against the Mendez Suit. SOF at ¶ 15.
On May 25, 2001, New Ameri-Forge and Tanglewood filed a petition for declaratory judgment in the case styled Ameri-Forge Corp. et al. v. UCR, Inc., et al., Cause No.XXXX-XXXXX (the "Declaratory Judgment Action"). SOF at ¶ 17. On January 28, 2002, New Ameri-Forge and Tanglewood filed a Motion for Summary Judgment in the Declaratory Judgment Action. SOF at ¶ 18.
On February 14, 2002, Global Industrial Technologies, Inc., and certain of its affiliates filed petitions for relief under Chapter 11 of the Bankruptcy Code. Additional affiliates filed voluntary petitions with the court on February 22 and March 19, 2002. These cases are jointly administered for procedural purposes only. The Debtors continue as debtors-in-possession pursuant to §§ 1107 and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in these cases.
As of the petition date, the Mendez Suit was in the discovery stage and no depositions had been taken. Both the Mendez Suit and the Declaratory Judgment Action were stayed pursuant to § 362(a) of the Bankruptcy Code. SOF at ¶ 20-21.
Tanglewood has submitted 13 claims (seven in its own name and six in the name of New Ameri-Forge) seeking contribution and/or indemnification from Debtors in connection with the Mendez Suit and the Declaratory Judgment Action.
Contribution in the Mendez Suit
In the Mendez Suit, current and former employees of the Debtors and Tanglewood seek unspecified damages against the Debtors and Tanglewood for alleged violations of their constitutional and civil rights and for alleged discrimination on the basis of nationality and alleged unlawful termination. In its proofs of claim, Tanglewood seeks contribution against Debtors as joint defendants for the Debtors' proportionate share of damages and other amounts the Mendez Plaintiffs may recover from Tanglewood.
The court notes that Tanglewood has indicated that it has dropped its demand for contribution from the Debtors in the Mendez Suit.
(The Tanglewood Entities have abandoned their efforts to obtain an unsecured claim for any contingent liabilities (such as they may be) to the Plaintiffs in the Mendez Suit.)
Summary Judgment Motion, Dkt. No. 3206 at ¶ 9.
To the extent that there is any ambiguity or irregularity in Tanglewood's abandonment of its contribution demand, the court also finds that § 502(e)(1)(B) of the Bankruptcy Code requires the court to disallow portions of the claims that seek contribution. A claim (or portion of a claim) must be disallowed under § 502(e)(1)(B) if three conditions are met: (i) the claim must be contingent; (ii) the claim must be for reimbursement or contribution; and (iii) the claimant must be co-liable with the Debtor with respect to the claim. In re Pinnacle Brands, Inc., 259 B.R. 46, 55 (Bankr.D.Del.2001). First, a demand for contribution where there has been no determination of liability of the claimant, and thus no liability incurred or funds actually paid out by the claimant, is unquestionably contingent. Second, the proofs of claim at issue in this controversy *234 explicitly seek "contribution" from Debtors for amounts that the Mendez Plaintiffs might recover from Tanglewood. Third, all the proofs of claim seek contribution "against [Debtors] for their proportion of any damages, costs, expenses or other amounts the plaintiffs may ultimately recover from Tanglewood ...,"[3] which can only occur if Debtors and Tanglewood are co-liable on the claim.
Based on the apparent abandonment of the contribution demand by Tanglewood and the provisions of § 502(e)(1)(B) of the Bankruptcy Code, the court sustains the objection of Debtors to those portions of the proofs of claim seeking contribution from the Debtors to Tanglewood.
Indemnification and the LLS Fees
In the Declaratory Judgment Action (identified in the proofs of claim as the Indemnity Action), Tanglewood sought judicial determination that Tanglewood had the right to complete indemnification from the Debtors for all of Tanglewood's liability in the Mendez Suit, including costs, expenses, attorneys' fees and other charges. Tanglewood claims its right to indemnification based on provisions in Article XI of the APA.
Although the Declaratory Judgment Action has been stayed pursuant to § 362 of the Bankruptcy Code, the issues raised in the Declaratory Judgment Action form the core of the summary judgment motion presently before the court.... [A]t this time, the Tanglewood Entities are seeking recovery under the Claims solely for the $321.073.07 in LLS's fees and expenses already incurred in the Mendez Suit, the Declaratory Judgment Action, and these Bankruptcy Cases.
Summary Judgment Motion, Dkt. No. 3206 at ¶ 9 (emphasis in original). Hereinafter, the court will refer to this demand for $321,073.07 in fees and expenses as the "LLS Fees."
As a preliminary matter, the court finds that § 502(e)(1)(B) does not apply to the LLS Fees. These fees have already been incurred and billed and are therefore not contingent. Consequently, Debtors' objection based on § 502(e)(1)(B) to that portion of the claims regarding the LLS Fees is overruled.
Tanglewood bases its claims to indemnification for the LLS Fees on its rights under ¶ 11.2 and the definition of damages in the APA.
11.2. Indemnification and Payment of Damages by Parent [Debtor Global Industrial Technologies, Inc.], GPX and Sellers. Parent, GPX and Sellers, jointly and severally, will indemnify and hold harmless Buyer [Tanglewood] and its Representatives, stockholders, controller persons and other Related Persons (collectively, the "Buyer Indemnified Persons") for, and will pay to the Buyer Indemnified Persons the amount of, any Damages sustained or incurred by any Buyer Indemnified Person to the extent relating to, resulting from or arising out of, or any allegation by any third party of: .... (c) the Excluded Assets or the Excluded Liabilities.
Art I, p. 2 of the APA defines damages to include:... costs, disbursements, or expenses (including, without limitation, fees, disbursements, and expenses of attorneys, accountants and other professional advisors...) of any kind or nature whatever.
After the Mendez Suit was filed, Tanglewood made a demand on the Debtors for indemnification for the cost of defense and *235 any liability arising from the Mendez Suit.[4] In a letter dated February 7, 2001, the Debtors, by their in-house counsel, Michael A. Schalk, agreed that they would "assume defense of the allegations of the 25 individuals in the action titled [the Mendez Case]", but that
Global [the Debtors] reserves its right to disclaim responsibility for one or more of these claims under Texas law or the Asset Purchase Agreement, if it finds in its investigation of the underlying facts that its indemnity for one or more of the underlying claims does not apply.
Letter of Michael A. Schalk to Hanna Fister, February 7, 2001, SOF Exh. B.
In its letter of February 14, 2001, Tanglewood, through its counsel Hanna Fister, stated:
The new Ameri-Forge and Tanglewood accept your assumption of the defense and of the indemnity but do not agree with your reservation of rights. Because of this reservation, the new Ameri-Forge and Tanglewood reserve their rights to have their own counsel, Locke Liddle & Sapp LLP, to represent them and participate in the defense of the suit as co-counsel.
Letter of Hanna Fister to Michael A. Schalk, February 14, 2001, SOF Exh. B.
There is no indication in the record that Debtors replied to Tanglewood's February 14, 2001, letter before Tanglewood sent a followup letter on March 2, 2001. The March 2nd letter contained a formal demand that Debtors withdraw JLS & K as counsel to Tanglewood and that JLS & K be replaced by LLS if Debtors insisted on their reservation of rights. Letter of Hanna Fister to Michael Schalk, March 2, 2001, SOF Exh. B.
On March 5, 2001, Debtors responded to Tanglewood's February 14, 2001, letter in which the Debtors explicitly assumed the defense of Tanglewood, rejected responsibility for the LLS Fees and insisted on their reservation of rights:
I wish to confirm that Global Industrial Technologies has assumed the defense of new Ameri-Forge and Tanglewood Investments, Inc., pursuant to the terms of the indemnification provisions of the Asset Purchase Agreement among the parties....
Global does not intend to, and is not responsible for, the cost of your [i.e., LLS'] representation in that capacity, since that defense is being provided. Moreover, as Global is required to indemnify and defend in this case, a reservation of rights is clearly appropriate in these circumstances until it is certain that the indemnification does indeed apply.
Letter of Michael A. Schalk to Hanna Fister, March 5, 2001, SOF Exh. B (emphasis added).
From the above entries in the record of this contested matter, it is clear that Tanglewood made a demand on Debtors for indemnification for the cost of defense and any liability arising from the Mendez Suit. Debtors explicitly assumed the defense of Tanglewood. In their pleadings, Debtors confirmed that they voluntarily assumed the defense of the Mendez Suit "to the full extent of their responsibility." Debtors' Reply to Motion for Summary Judgment, Dkt. No. 3274 at 2.
*236 Much of the controversy in this matter has concerned the extent of the Debtors' responsibility. The Debtors argue that they are only responsible under ¶ 11.2 for defense of the "Excluded Liabilities." The Excluded Liabilities are defined in APA ¶ 2.2 as "any claims against, or liabilities, commitments, Contracts, agreements or obligations of any nature whatsoever of the Sellers other than the Assumed Liabilities."
Responsibility for indemnification for the Excluded Liabilities is given to the Debtors pursuant to ¶ 11.2. Responsibility for indemnification for the Assumed Liabilities is given to Tanglewood pursuant to ¶ 11.4. These Assumed Liabilities are defined in Article I of the APA as "(a) any current liabilities of Sellers reflected on the Closing Date Balance Sheet (which shall not include any current or deferred Income Tax liabilities) and (b) the Assigned Contracts."
Debtors contend that they were only responsible for defending and indemnifying Tanglewood against damages arising from the Excluded Liabilities, which include only those claims that may be due to Debtors' conduct before the Acquisition Date. Debtors also argue that Tanglewood's Assumed Liabilities include any damages arising from Tanglewood's conduct after the Acquisition Date.
The focus of the arguments, therefore, has been when the conduct that gave rise to potential damages occurred. Both Debtors and Tanglewood have an interest in defending the primary issue of liability in the Mendez Suit. However, their interests separate as to the apportionment of liability, assuming, without deciding, that Plaintiffs meet their burden of proof. JLS & K has an irremediable conflict of interest in representing both Debtors and Tanglewood because it is in the Debtors' interest to show that the allegedly abusive conduct that gave rise to potential damages occurred after the Acquisition Date. Tanglewood's interest, however, is best served by proof that the conduct occurred before the Acquisition Date.
The court finds merit in Tanglewood's argument that JLS & K has an irremediable conflict of interest in representing both Debtors and Tanglewood, assuming that Defendants must put on a defense at all, based on the following findings of fact which are evident on this record:
1. Any damages that might arise from the allegations of abuse by 16 of the 25 Mendez Plaintiffs could only be attributed to the Debtors, because those 16 employees were employed only by Old Ameri-Forge and they were terminated before the Acquisition Date.
2. One of the remaining nine Mendez Defendants (the "Nine Defendants"), Felipe Baron, was terminated by Old Ameri-Forge before the Acquisition Date but was re-hired by Old Ameri-Forge before the Acquisition Date and was terminated by New Ameri-Forge after the Acquisition Date. It is unclear on this record whether, and if, the alleged abuse of any of the Nine Defendants occurred before, during, after or continuously before and after the Acquisition Date.
3. The Debtors and Tanglewood had adverse interests in the Mendez Suit. It would be in Debtors' interests to establish that any abuse of the Nine Defendants occurred, to the greatest extent possible, post-acquisition and in Tanglewood's interests to establish that the abusive conduct occurred, to the greatest extent possible, pre-acquisition. Further, as yet, the record contains no evidence as to whether any abusive *237 conduct might have begun in the pre-acquisition period and continued after the acquisition date, which, if proven, would lead to the even more complex problem of apportioning potential damages between Debtors and Tanglewood.
4. JLS & K, the counsel assigned by Debtors to the defense of Tanglewood, is a Texas law firm subject to the disciplinary rules of professional conduct of the State of Texas. The Texas Disciplinary Rules of Professional Conduct prohibit simultaneous representation of parties with adverse interests without consent of both parties.
(a) A lawyer shall not represent opposing parties to the same litigation.
(b) In other situations and except to the extent permitted by paragraph (c), a lawyer shall not represent a person if the representation of that person:
(1) involves a substantially related matter in which that person's interests are materially and directly adverse to the interests of another client of the lawyer or the lawyer's firm; or
(2) reasonably appears to be or [to] become adversely limited by the lawyer's or law firm's responsibilities to another client or to a third person or by the lawyer's or law firm's own interests.
(c) A lawyer may represent a client in the circumstances described in (b) if:
(1) the lawyer reasonably believes the representation of each client will not be materially affected; and
(2) each affected or potentially affected client consents to such representation after full disclosure of the existence, nature, implications, and possible adverse consequences of the common representation and the advantages involved, if any.
TEX. DISC. R. PROF. COND. 1.06 (a, b & c). Codified at V.T.C.A., Govt.Code T. 2, Subt. G App. A, Art 10, § 9, Rule 106.
5. Tanglewood did not consent to its representation by JLS & K. Rather, Tanglewood actively opposed it.
For all the above reasons, the court concludes that JLS & K can not represent both Debtors and Tanglewood in the Mendez Suit, even only as to the Excluded Liabilities, because the interests of Debtors and Tanglewood were directly and materially adverse in determining the timing and/or apportioning of liability for any abusive conduct allegedly directed toward the Nine Defendants.
Thus, the court agrees with Tanglewood that the Debtors could not fulfill the Debtors' obligation to provide Tanglewood with a defense to the Excluded Liabilities through the law firm of JLS & K. JLS & K can not perform this role under Texas law. Consequently, Debtors did not assume the defense of the Mendez Suit "to the full extent of their responsibility" under ¶ 11.2 of the APA.
The Debtors (i) acknowledged that they were obligated to provide a defense, at least to the extent of the Excluded Liabilities; (ii) appointed as counsel to Tanglewood JLS & K, a law firm that can not represent Tanglewood, even as to the Excluded Liabilities; and (iii) refused to withdraw JLS & K upon demand of Tanglewood. Thus, the court finds that Debtors defaulted on their obligation to defend Tanglewood in the Mendez Suit against damages arising under ¶ 11.2 of the APA and therefore Debtors are liable for reasonable LLS Fees.[5]
*238 The LLS Fees Must Be Reasonable, Incurred Prepetition and After the Right to Indemnification Arose
The Debtors have argued that the LLS Fees are not reasonable in that the LLS Fees were more than four times greater than the fees incurred by JLS & K, the lead counsel. They also argue that LLS may have failed to settle the case for approximately $100,000 and that failure to settle raises questions about the reasonableness of incurring fees substantially in excess of that settlement amount.
Tanglewood addressed the substantive objections of the Debtors to the reasonableness of fees[6], but further argued that neither the APA nor Texas law imposes a reasonableness test on the LLS Fees.
The court finds that Tanglewood is estopped from opposing a reasonableness test on its fees because its proofs of claim demand "reasonable attorneys' fees".
Tanglewood also has the right to complete indemnification from Global for all of Tanglewood's liability (including all costs, expenses, reasonable attorneys' fees and other charges) in the Mendez Suit, pursuant to that one certain Asset Purchase Agreement, dated June 22, 1999 ... executed by Global and certain other of its affiliates/subsidiaries.
Tanglewood Proof of Claim 3006 at 1 (emphasis added). The "reasonable attorneys' fees" demand appears in all claims at issue in this contested matter (Proofs of Claim 3306, 3307, 3308, 3309, 3310, 3311, 3312, 3313, 3314, 3315, 3316, 3317, 3318).
Even if the court were to allow Tanglewood to amend its proofs of claim deleting the "reasonable attorneys' fees" language, the court finds that ¶ 11.9(a) of the APA imposes a duty on the indemnified party to mitigate liability.
11.9(a) Each indemnified party shall make commercially reasonable efforts to mitigate any claim or liability that an indemnified party asserts under this Article. In the event that an indemnified party shall fail to make such commercially reasonable efforts to mitigate any claim or liability, then notwithstanding anything else to the contrary contained herein, the indemnifying party shall not be required to indemnify any indemnified party for any Damages that could reasonably be expected to have been avoided if the indemnified party had made such efforts.
*239 This paragraph of the APA provides that the indemnifying party is not required to indemnify the indemnified party for any damages that could reasonably be expected to have been avoided. Article I of the APA includes the costs of attorneys' fees in its definition of damages. Therefore, the court concludes that ¶ 11.9(a) requires that the LLS Fees be reasonable.
The Debtors have also objected to the LLS Fees on the ground that they may relate to proceedings other than the Mendez Suit. As will be discussed below, the court will disallow any fees and expenses incurred postpetition, which includes the LLS Fees in connection with the motion for relief from stay in this court and the attempt to transfer the Mendez Suit to the bankruptcy court. The court also notes that, by their terms, the claims seek indemnification for costs in the Mendez Suit and the Declaratory Judgment Action. The claims do not seek indemnification for proceedings before the Mendez Suit was commenced on December 22, 2000. However, the time records submitted by Tanglewood date back three months before the filing of the Mendez Suit and do not appear to be within the indemnification that may be owed by Debtors. Thus, Tanglewood must prove that the LLS Fees in the three months preceding the filing of the Mendez Suit are indemnifiable.
The Declaratory Judgment Action was an attempt to enforce Tanglewood's rights under the APA. To the extent that the LLS Fees are reasonable and relate to the Declaratory Judgment Action, they will be allowed. A hearing will be set for that purpose.
Finally, the court must determine if the allowed LLS Fees must be limited to prepetition amounts. There is no binding precedent in the Third Circuit on the issue of whether unsecured creditors may include postpetition attorneys' fees in their claims. The court has reviewed the pleadings, arguments of counsel and the relevant case law.
The court agrees with the majority of courts[7] that unsecured creditors may not include postpetition attorneys' fees in their claims from a bankruptcy estate. See Adams v. Zimmerman, 73 F.3d 1164, 1177 (1st Cir.1996); In re Southeast Banking Corp., 188 B.R. 452, 462-63 (Bankr.S.D.Fla.1995), rev'd on other grounds, 156 F.3d 1114 (11th Cir.1998); In re Waterman, 248 B.R. 567, 573 (8th Cir. BAP 2000); In re Hedged-Investments Associates, Inc., 293 B.R. 523 (D.Colo.2003); In re Loewen Group Intern., Inc., 274 B.R. 427 (Bankr.D.Del.2002); In re Pride Companies, LP, 285 B.R. 366 (Bankr.N.D.Tex.2002); In re Woodmere Investors Ltd. Partnership, 178 B.R. 346, 356 (Bankr.S.D.N.Y.1995); In re Sakowitz, Inc., 110 B.R. 268 (Bankr.S.D.Tex.1989). As discussed in In re Pride Companies, 285 B.R. at 372, the majority of courts rely on four reasons for this position.
First, the majority relies on the maxim of expressio unius est exclusio alterius (the expression of one is the exclusion of the alternatives). Because § 506(b) of the Bankruptcy Code expressly provides for the allowance of postpetition attorneys' fees for oversecured creditors, and neither § 506(b) nor any other provision of the Bankruptcy Code provides for the allowance of such fees for unsecured creditors, it follows that unsecured creditors have no *240 clear entitlement to postpetition attorneys' fees.
Second, a decision of the United States Supreme Court supports the majority position. United Sav. Ass'n of Texas v. Timbers of Inwood Forest Associates, Ltd., 484 U.S. 365, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988). In Timbers, the Supreme Court found that under § 506(b) only oversecured creditors were entitled to postpetition interest on their claims. Timbers, 484 U.S. at 372-73, 108 S.Ct. 626. Because § 506(b) expressly provides for the allowance of both postpetition interest and fees, the majority of courts addressing this issue has applied this reasoning to restrict the allowance of postpetition fees to oversecured creditors only.
Third, § 502(b) of the Bankruptcy Code requires a court to calculate the amount of a claim as of the petition date. It is axiomatic that, as of the petition date, postpetition attorneys' fees have not been incurred. Thus, unsecured prepetition claims cannot include postpetition attorneys' fees.
Finally, it is inequitable to allow certain unsecured creditors to recover postpetition attorneys' fees at the expense of similarly situated claimants. To allow one group of unsecured creditors to recover more than their prepetition debt unfairly discriminates against others because it reduces the pool of assets available to all unsecured creditors pro rata.
For all the above reasons, the court agrees with the majority of courts and will disallow postpetition attorneys' fees in the claims.
Conclusion
The court denies Tanglewood's Motion for Summary Judgment on the ground that there remain significant material issues of fact in dispute concerning the extent to which Tanglewood's claims will be allowed and the reasonableness of the claims.
Based on the abandonment of the contribution demand by Tanglewood and the requirements of § 502(e)(1)(B) of the Bankruptcy Code, the court sustains the objection of Debtors to that portion of the claims seeking contribution from the Debtors to Tanglewood on contingent claims.
The Debtors defaulted on their obligation to defend Tanglewood in the Mendez Suit against damages arising under ¶ 11.2 of the APA and they became liable for reasonable LLS Fees that were incurred prepetition and after the right to indemnification arose. A hearing will be scheduled to determine the extent to which the LLS Fees are reasonable and were incurred prepetition and after the right to indemnification arose. Fees incurred postpetition are disallowed.
An appropriate order will be entered.
ORDER DENYING MOTION FOR SUMMARY JUDGMENT, SUSTAINING IN PART DEBTORS' OBJECTION TO UNLIQUIDATED CLAIMS OF TANGLEWOOD INVESTMENTS, INC., SCHEDULING HEARING, AND REQUIRING CERTAIN ACTIONS
AND NOW, this 13th day of July, 2005, for the reasons expressed in the accompanying Memorandum Opinion, it is
ORDERED that Respondent's Motion for Summary Judgment on Objection to Unliquidated Claims of Tanglewood Investments, Inc. is DENIED; and it is further
ORDERED that Debtors' Objection to Unliquidated Claims of Tanglewood Investments, Inc. is SUSTAINED IN PART as to that portion of the proofs of claim seeking contribution from the Debtors to Tanglewood on contingent claims and that *241 portion of the proofs of claim is DISALLOWED; and it is further
ORDERED that a hearing will be held on September 22, 2005, at 3:00 p.m. in Courtroom A, 54th Floor, 600 Grant Street, Pittsburgh, Pennsylvania, to determine the extent to which the LLS fees and expenses are reasonable, were incurred after the right to indemnification arose, and not incurred postpetition; and it is further
ORDERED that, on or before August 13, 2005, Respondent shall file with the court and serve the United States Trustee, Debtors, all official committees, future claims representatives and their respective counsel, under seal, a fee and expense application in the format approved by the court in its order governing fee applications in this case, together with an unredacted copy of the time or other records of Locke, Liddell & Sapp, LLP upon which Respondent bases its claim for indemnification for the LLS fees and expenses. No party that receives a copy of the fee application and unredacted records of LLS shall use them for any purpose other than objecting, in this contested matter, to the reasonableness or timing of LLS' fees and expenses; and it is further
ORDERED that objections to LLS' fee application must be filed with the court and served on the United States Trustee, Debtors, all official committees, future claims representatives and their respective counsel, under seal, on or before SEPTEMBER 5, 2005. A reply to objections, limited to 5 pages, may be filed and served on or before SEPTEMBER 15, 2005; and it is further
ORDERED that any negotiated and agreed upon fee and expense award shall be filed and served on or before SEPTEMBER 15, 2005.
NOTES
[1] This memorandum constitutes the court's findings of facts and conclusions of law in this contested matter. The court's jurisdiction is not at issue.
[2] Debtors' original objection was asserted against Claims 3306, 3307, 3308, 3309, 3310, 3311 and 3312 (the "Tanglewood Claims"). In their joint Stipulation of Facts. Dkt. No. 3112 at ¶ 25, Debtor and Tanglewood agreed that any order of this court allowing or disallowing the Tanglewood Claims would also apply to Claims 3313, 3314, 3315, 3316, 3317 and 3318 (the "Ameri-Forge Claims" and, together with the Tanglewood Claims, the "claims"). The court adopts this provision of the Stipulation of Facts.
[3] Tanglewood Proof of Claim 3006 at I. Identical language appears in all the claims.
[4] The letter or other communication by which Tanglewood made its demand is not in the record. However, Debtors' letter to Tanglewood on February 7, 2001, is addressed in reply to Tanglewood's "letter of January 23, 2001." SOF Exh. B. A Tanglewood letter or other communication on January 23, 2001, would be consistent with the filing of the Mendez Suit on December 22, 2000.
[5] The above finding that the Debtors defaulted on their obligation under the APA because of the conflict of their appointed counsel, JLS & K, is sufficient, in and of itself, to hold the Debtors liable for the reasonable LLS Fees. Independently of the above analysis, the court also finds that § 11.7(b) of the APA supports the court's finding that the Debtors were required to obtain consent from Tanglewood for any counsel appointed by the Debtors to represent Tanglewood.
11.7(b). If any Proceeding referred to in Section 11.7(a) is brought against an indemnified party and it gives notice to the indemnifying party of the commencement of such Proceeding, the indemnifying party will be entitled to participate in such Proceeding, and, to the extent that it wishes, to assume the defense of such Proceeding with counsel satisfactory to the indemnified party and, after notice from the indemnifying party to the indemnified party of its election to assume the defense of such Proceeding, the indemnifying party will not, as long as it diligently conducts such defense, be liable to the indemnified party under this Article XI for any fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each case subsequently incurred by the indemnified party in connection with the defense of such Proceeding ....
SOF, Exhibit A at § 11.7(b) (emphasis added). Counsel satisfactory to Tanglewood was not offered by the Debtors.
[6] The court does not at this time consider the merits of either Debtors' or Tanglewood's arguments regarding particular examples of reasonableness but defers judgment until the hearing on the LLS Fees.
[7] The court takes note of Tanglewood's argument that there is a split in the Circuits regarding the allowability of postpetition attorneys' fees in unsecured claims. The court has reviewed the cases cited in Tanglewood's pleadings. The court finds the majority opinions cited above more persuasive.
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280 Pa. Superior Ct. 167 (1980)
421 A.2d 458
COMMONWEALTH of Pennsylvania
v.
Raymond Joseph MORETTI, Appellant.
Superior Court of Pennsylvania.
Submitted December 6, 1979.
Filed September 23, 1980.
Petition for Allowance of Appeal Denied December 31, 1980.
*168 Bruce S. Miller, Hazleton, for appellant.
Richard B. Russell, District Attorney, Pottsville, for Commonwealth, appellee.
Before BROSKY, WICKERSHAM and EAGEN, JJ.[*]
WICKERSHAM, Judge:
On January 6, 1977, appellant, Raymond Joseph Moretti, was arrested on a complaint brought by Trooper Peter Zuber of the Pennsylvania State Police charging Moretti with possession of a controlled substance and possession with intent to deliver a controlled substance.[1] Specifically, Moretti was charged with possessing, having under his control and intending to deliver a controlled substance, to wit, approximately thirty pounds of marijuana, a Schedule I drug, not being registered or permitted or allowed to have in his possession such controlled substance.
*169 On January 4, 1978, a jury trial was held before the Honorable Donald D. Dolbin in the Court of Common Pleas of Schuylkill County with Bruce Miller, Esquire, representing the defendant. The jury returned a verdict of guilty as to both charges on January 6, 1978, following which a motion for new trial and in arrest of judgment was filed on behalf of the defendant and subsequently argued. Judge Dolbin, after hearing, denied the post-verdict motions and on August 21, 1978, sentenced the defendant to undergo imprisonment in the Schuylkill County Prison for a period of not less than one year nor more than three years. Notice of appeal was duly filed to the Superior Court of Pennsylvania by appellant's trial counsel who raises five issues before this court.[2]
*170 At trial, Trooper Peter Zuber testified on behalf of the Commonwealth that he was a member of Troop L Vice Squad of the Pennsylvania State Police assigned to investigate drug complaints in Schuylkill County and had eighteen years experience as a police officer and five years experience in Schuylkill County. He had conducted more than three hundred investigations. Shortly after midnight on January 6, 1977, he met with other members of the state police at the Frackville Barracks. From there they went to Magistrate Richards' office to obtain a search warrant for a premises located on South Kennedy Drive in McAdoo Borough, a second-floor apartment. He had information from a Pennsylvania State Trooper named Long that the address was the residency of appellant, Moretti. After announcing their presence, the door was opened and Trooper Zuber and other officers entered the apartment. The search warrant was read to Mr. Moretti and he was advised of his rights (Miranda Warnings).
In a closet in the kitchen of the appellant's apartment the officer found three bricks containing vegetable matter which he presumed to be marijuana along with other paraphernalia. The defendant, Moretti, told the police officer that he rented or leased the Dog House Restaurant downstairs and also leased the apartment where the search was conducted. Subsequent testing at the Pennsylvania State Police Crime Lab proved the seized material to be marijuana packaged in Kilo bricks weighing 2.2 pounds each. Commonwealth witnesses, experienced in drug investigations, testified that in their opinion no individual would have the amount of marijuana that was found in the apartment for one's own personal use but rather would be delivering the same, that is selling the same, to others. For example, Corporal Marinetti testified that on an average, one gram of marijuana would be used in making one cigarette. Further *171 that one could make between twenty to twenty-five cigarettes from an ounce of marijuana. (N.T. 71). Witness Marinetti further testified that the particular type of marijuana seized on January 6, 1977, in his opinion, was probably Columbian which was bringing $40 an ounce at the time. (N.T. 89). Witness Michael Horvath of the Pennsylvania State Police Crime Laboratory in Bethlehem testified that he had examined the material, declared it to be marijuana and identified various exhibits at trial. Exhibit 2, for instance, contained a total weight of marijuana of 5.475 kilograms and he testified that there is roughly 2.2 pounds to a kilogram.
I.
Against the factual background set forth hereinbefore, the first intention we consider of the appellant is that he did not receive a copy of the trial transcript for use in preparation and argument of post-trial motions.
Rule 1123(a) of Pa.R.Crim.P. provides:
"Within ten (10) days after a finding of guilt, the defendant shall have the right to file written motions for a new trial and in arrest of judgment. Only those grounds may be considered which were raised in pre-trial proceedings or at trial, unless the trial judge, upon cause shown, allows otherwise. Argument shall be scheduled and heard promptly after such motions are filed, and only those issues raised and the grounds relied upon in the motions may be argued. If the grounds asserted do not require a transcript, neither the filing nor argument of post-verdict motions shall be delayed for lack of a transcript of the notes of testimony."
Obviously, it is a matter of trial court discretion as to whether or not a transcript is required of the notes of testimony prior to filing and argument of post-verdict motions.
*172 Appellant suggests, however, that the Act of May 1, 1907, directs a contrary result. This statute relating to official stenographers and which was repealed by the Act of 1978, April 28, P.L. 202, No. 53, § 2a (899) effective June 27, 1980, provided as follows:
"The law judges of each of the several courts of oyer and terminer and general jail delivery, and of the courts of quarter sessions of the peace, shall employ the official stenographer or stenographers of the courts of common pleas of the particular county, to report the proceedings of the said court, whenever requested so to do by any defendant or defendants, or his, her or their counsel, before or during the trial of any case in any of said courts: Provided, further, That in all cases tried in the several courts of oyer and terminer and general jail delivery, if the request or requests for a copy of the notes of testimony are made within ninety (90) days from date of verdict, or at any time if in the discretion of the court such request should be granted, the defendant or defendants shall be furnished with a copy of the notes of testimony taken at his, her or their request, which said notes shall be paid for by the county in which said case is tried, except, however, that where the court finds that the defendant or defendants making the request are able to pay for the copies, the cost thereof shall be paid by such defendant or defendants and shall be taxed as costs and paid to the county." 1907, May 1, P.L. 135, § 2; 1911, May 5, P.L. 161, § 1; 1959, June 1, P.L. 340, § 1; 1960, Jan. 8, P.L. (1959) 2116, § 1, 17 P.S. § 1802.
We find nothing inconsistent between the Act of May 1, 1907, and Rule 1123(a) of Pa.R.Crim.P. The request of the defendant was a matter for the exercise of discretion by the trial court and there is no evidence of an abuse of such discretion. Furthermore, we note in passing that a trial transcript has since been prepared and was made available to the defendant for the purposes of taking this appeal and is part of the official record in this case.
*173 II.
The second argument advanced by the appellant relates to the search warrant. More particularly, whether the police gave a proper announcement of identity and purpose before appellant opened his apartment door, whether the police gained entry through subterfuge, whether a nighttime search was appropriate, and finally whether the search warrant was served in accordance with the time limitations indicated on the face of said warrant.
Judge Dolbin, in his Opinion of Court dated July 10, 1978 accurately summarizes the pertinent facts:
"On or about January 5, 1977, the Pennsylvania State Police received information from a confidential informant that the defendant had a quantity of marijuana at his residence in McAdoo, Pennsylvania, and that he was going to deliver most of the marijuana in the early morning of January 6, 1977. Trooper Edward G. Long of the Pennsylvania State Police, Regional One Strike Force, armed with the foregoing information went to the office of Magistrate Norman H. Richards at Hometown, Penna., and under oath, related the said information to Magistrate Richards, gave an affidavit, whereupon a search warrant issued to search the residence of the defendant in McAdoo. At approximately 4:00 A.M. on January 6, 1977, five officers of the Pennsylvania State Police proceeded to 119 South Kennedy Drive, McAdoo, Penna., the residence of the defendant, and executed the search warrant.
"A fair distillation of the Commonwealth's testimony discloses that two of the State Policemen attempted to make a buy from the defendant who requested verification from someone in Allentown, Penna. named "Kish". When this attempt proved unsuccessful, the police returned to the defendant's house whereupon the defendant came to the door and one of the police showed him a badge stating, "We are State Police! We have a search warrant." The defendant then opened the door stating, "I don't want any hassle", following which the search warrant was read to the defendant, he was advised as to his rights and a search of the premises ensued. Approximately *174 thirty pounds of marijuana were found in the defendant's apartment and a set of scales for weighing substances. It was the testimony of Trooper Peter Zuber that the defendant stated that a young lady spending the evening with the defendant was not involved."
(Judge Donald D. Dolbin's Opinion of Court, Pages 1 and 2.)
The trial record clearly indicates that the investigating state police officers followed the mandate of Rules 2002 et seq. of Pa.R.Crim.P. relating to search warrants. They gave proper announcement of identity and purpose. Their nighttime search was authorized and had a reasonable basis. Further, our case is similar to Commonwealth v. Regan, 254 Pa.Super. 555, 386 A.2d 89 (1978) where we held at 254 Pa.Super. 559, 386 A.2d 89, "that police use of a ruse to initiate execution of a search warrant is permissible where it is followed by an announcement of authority and purpose and by peaceful entry."
III.
Prior to trial the defendant requested the identity and whereabouts of the Commonwealth's informer. The lower court correctly held that the informant was not present at the time of the search and arrest when the marijuana was discovered and therefore could not be characterized as a material eyewitness to the crime. Commonwealth v. Garcia, 261 Pa.Super. 296, 396 A.2d 406 (1978).
IV & V.
The remaining two questions concern whether the court erred in denying appellant's demurrer to the Commonwealth's evidence and whether the verdict was against the evidence and the weight of the evidence. We have examined closely the briefs and the record and find no merit in either contention.
Judgment of sentence is affirmed.
NOTES
[*] Chief Justice MICHAEL J. EAGEN of the Supreme Court of Pennsylvania, is sitting by designation.
[1] The Controlled Substance, Drug, Device and Cosmetic Act, 1972, April 14, P.L. 233, No. 64, 35 P.S. § 780-101 (§ 780-113[a][16], [30]).
[2] OF QUESTIONS
"1) WHETHER THE LOWER COURT ERRED IN DENYING APPELLANT'S REQUEST FOR A COPY OF THE TRIAL TRANSCRIPT FOR USE IN PREPARATION AND ARGUMENT OF POST-TRIAL MOTIONS.
"2) WHETHER THE COMMONWEALTH ESTABLISHED BY A PREPONDERANCE OF THE EVIDENCE THAT THE AFFIDAVIT FOR AND EXECUTION OF THE SEARCH WARRANT WAS REASONABLE AND IN ACCORDANCE WITH THE RULES OF CRIMINAL PROCEDURE.
A. WHETHER THE COMMONWEALTH FAILED TO ESTABLISH THAT THE POLICE GAVE THE REQUISITE ANNOUNCEMENT OF IDENTITY AND PURPOSE BEFORE APPELLANT OPENED HIS APARTMENT DOOR.
B. WHETHER SEARCH WAS UNREASONABLE AND IN VIOLATION OF THE RULES OF CRIMINAL PROCEDURE AS THE POLICE GAINED ENTRY THROUGH SUBTERFUGE.
C. WHETHER THE SEARCH WARRANT CONTAINED REASONABLE CAUSE TO JUSTIFY A NIGHTTIME INTRUSION SINCE NO UNDERLYING FACTUAL CIRCUMSTANCES WERE LISTED AND SINCE THE PARTICULAR AVERMENTS THEREOF WERE UNTRUE AND MISLEADING.
D. WHETHER THE SEARCH WARRANT WAS SERVED IN ACCORDANCE WITH THE TIME LIMITATIONS INDICATED ON THE FACE OF SAID WARRANT.
"3) WHETHER THE COURT ERRED IN FAILING TO GRANT APPELLANT'S MOTION FOR THE DISCLOSURE OF THE IDENTITY AND WHEREABOUTS OF THE COMMONWEALTH INFORMER.
"4) WHETHER COURT ERRED IN DENYING APPELLANT'S DEMURRER TO THE COMMONWEALTH'S EVIDENCE.
"5) WHETHER THE VERDICT WAS AGAINST THE EVIDENCE AND THE WEIGHT OF THE EVIDENCE." (Appellant's Brief-Page 2)
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777 F.Supp. 1236 (1991)
The BERGQUIST COMPANY
v.
SUNROC CORPORATION and American Arbitration Association.
Civ. A. No. 90-6153.
United States District Court, E.D. Pennsylvania.
November 15, 1991.
*1237 Thomas P. Wagner, Rawle & Henderson, Philadelphia, Pa., for plaintiff.
Glenn A. Harris, Levin & Hluchan, Voorhees, N.J., for defendants.
OPINION AND ORDER
DITTER, District Judge.
This is a contract dispute over whether or not an arbitration clause appearing on the back of the buyer's purchase order is part of the agreement between the seller and the buyer. After the product sold to the buyer failed to live up to the buyer's expectations, the buyer filed for arbitration. The seller moved to enjoin the arbitration. I denied the seller's motion for a preliminary injunction, because it had failed to show a likelihood of success on the merits and irreparable harm if the arbitration went forward as scheduled. At the arbitration, the buyer was awarded substantial damages. The buyer now moves to confirm the award and the seller moves to vacate the award. Both parties have *1238 also filed cross-motions for summary judgment. They have agreed to have me first resolve the cross-motions. Based upon the evidence introduced at the preliminary injunction hearing, the parties' briefs, additional exhibits, and oral argument, I will deny in part and grant in part the cross-motions for summary judgment and will direct that a jury determine the limited issues I will discuss below.
I. Facts
Plaintiff, The Bergquist Company, is a manufacturer of various products used for the purpose of transferring heat. One of those products is a heat transfer tape called the "Q Pad II." Defendant, Sunroc Corporation, is a manufacturer of stainless steel water coolers. One of its coolers dispenses both hot and cold water. The hot water is heated in a tank surrounded by a metal heating element. Sunroc purchased a large quantity of Bergquist's Q Pad II to use in its water coolers to facilitate the transfer of heat from the heating element to the tank. Sunroc claims the Q Pad II was defective and emitted a foul odor which caused Sunroc to recall some of its water coolers.
Sunroc first learned of Bergquist's heat transfer products in an advertisement Bergquist placed in a trade journal. In response to the advertisement, a Sunroc engineer, Daniel McShane, telephoned Bergquist to request more detailed information. McShane asked for a copy of Bergquist's design guide, a package of information and product samples. Bergquist sent the design guide to McShane.
McShane placed a second phone call requesting additional information and samples. McShane spoke with Robert Scheiber, one of Bergquist's application engineers. McShane told Scheiber what types of products he was looking for and for what purpose he needed the tape. Scheiber described the variety of products available and he sent to McShane additional samples of the Q Pad II.
McShane tested the Q Pad II and determined it would be suitable for use in Sunroc's water coolers. He then sent to Scheiber engineering specifications and a drawing of the tape Sunroc needed for its water cooler. McShane telephoned Bergquist and requested a price quotation.
On March 8, 1988, Bergquist telefaxed a price quotation form to Sunroc. The price quotation form provides a description of the product to be sent, a listing of the available quantities and prices for each amount, a die charge, a delivery date, and shipping terms. It opens with "Quotation from The Bergquist Company. When ordering refer to our quotation. Thank you for your inquiry. We quote as follows." At the bottom, it states: "This quotation is offered for your acceptance within 30 days and is subject to material availability and price in effect at time of shipment unless otherwise noted. Your order must conform to this quotation and refer to quotation No. shown above.... Your order for these items would be appreciated. Thank you."
Sometime later that same day, Sunroc's purchasing manager, Jerry Joyce, telephoned Scheiber at Bergquist. Neither Joyce nor Scheiber remembers the details of their conversation, but they assume Joyce informed Scheiber that he was calling regarding the purchase of 25,000 units of the tape at various delivery dates. He asked Scheiber to confirm the price per unit of the tape and the delivery dates, which Scheiber did. Joyce then gave Scheiber Sunroc's purchase order number for the goods, no. 34754. Joyce testified at the arbitration hearing that he generally considered orders made over the phone to a vendor "placed but not confirmed."
Ten days after the phone call, Joyce sent purchase order number 34754 to Bergquist. It is marked with a "confirming" stamp and Scheiber's name is typed just below the stamp. The purchase order lists the requested product, the quantity, delivery dates, and the price. The price is one half a cent less than that provided on the price quotation.[1] The purchase order lists: *1239 "please supply the following subject conditions on reverse side." The reverse side lists a number of "additional terms and conditions applying to this purchase order." It states:
The Seller, by his acceptance of this order, implies the unconditional acceptance of all of the following conditions....
ARBITRATION Any controversy or claim arising out of or relating to this contract or the breach thereof shall be settled by arbitration in accordance with the Rules of the American Arbitration Association and judgment upon the award rendered by the Arbitrator(s) may be entered in any Court having jurisdiction thereof.
An acceptance copy of the purchase order was also sent to Bergquist for its signature and return to Sunroc. No one at Bergquist read, signed, or returned the acceptance copy. No one at Sunroc requested the return of the acceptance copy.
The tapes referred to on the purchase order were shipped on or about the dates referred to in that document and were paid for by Sunroc.
Nearly ten days after each shipment, Bergquist sent an invoice to Sunroc. The invoice referenced Sunroc's purchase order number and included the relevant terms of their agreement. The invoice provided the following "terms and conditions" on the reverse side:
4. DELIVERIES. The seller will make every effort to fill orders within the time promised. Under no circumstances will the seller assume responsibility or liability for any damage or claims resulting from delays in delivery schedule. Date of shipment shown on our quotation form or promised at any time during the life of the order is based on the seller's best judgment at that time but may be subject to changing conditions, in many cases beyond the seller's reasonable control. No liability on the seller's part shall result in any case.
6. QUOTATIONS. Stenographical or clerical errors subject to correction. The seller reserves the right to revise any prices quoted by the seller without notice at any time prior to the acceptance of an order by the seller. Material price fluctuations are subject to change in accordance with the price of the material on the day an order is accepted by the seller.
10. ACCEPTANCE OF ORDERS. All orders and sales contracts are subject to written approval and acceptance by the seller and are not binding until approved or accepted by the seller. Any terms which are in conflict with these terms and conditions shall not be binding upon the seller unless accepted in writing by the seller. In case of conflict not expressly accepted by the seller, the terms and conditions of sale herein shall be considered as superseding terms stated in the buyer's purchase order or contract.
11. WARRANTY. All goods sold under any order are warranted for 90 days to be free from defects in material and workmanship, and this express warranty is in lieu of and excludes all other warranties, express or implied, by operation of law or otherwise. Seller's only obligation is to replace products proven to be defective in material or workmanship within 90 days after shipment. It is the responsibility of the buyer to determine the suitability and application of the product. The manufacturer will not be held liable for any injury, loss or damage whatsoever resulting in the use or inability to use the product. No warranties or statements which are not contained herein will be binding upon the manufacturer unless in an agreement signed by officers of seller.
On or about July 29, 1988, Joyce telephoned Bergquist about the purchase of additional tapes. He spoke with Gina Henton-Olsen, a Bergquist sales representative. Joyce informed Henton-Olsen that he needed 10,000 more units of the tape, at various delivery dates, and asked her to confirm the price per unit and the delivery dates. She did so. Joyce gave her a purchase *1240 order number, no. 35666. Henton-Olsen made a contemporaneous note of the conversation. It shows a date, Sunroc's and Joyce's name, Sunroc's purchase order number, Bergquist's part number, the quantity requested, the delivery dates, and the price (twenty-nine cents). Neither Joyce nor Henton-Olsen recalls any other details of the conversation. In fact, Henton-Olsen does not remember the call and her testimony was based upon her present interpretation of her note.
On August 1, 1988, Sunroc mailed purchase order 35666 to Bergquist. It, too, included an acceptance copy and the arbitration provision on the reverse side. No one at Bergquist read, signed, or returned the acceptance copy. No one at Sunroc requested the return of the acceptance copy of the purchase order.
The tapes referred to on the purchase order were shipped on or about the dates referred to in that document and were paid for by Sunroc.
On February 13, 1989, Joyce telephoned Scheiber concerning Sunroc's desire to purchase additional tapes from Bergquist. Joyce and Scheiber discussed a new price arrangement and they eventually agreed Sunroc would purchase 21,000 units at twenty-one cents a unit; if Sunroc made payment within ten days of shipment, it would receive a two percent discount; and Sunroc had thirty days to make a final payment. Joyce gave Scheiber Sunroc's purchase order number, no. 37170. Other than the discussion about the price and payment terms, neither Joyce nor Scheiber recall any other details about their conversation.
Sunroc sent its purchase order number 37170 to Bergquist. It has the same arbitration provision on the reverse side. An acceptance copy was provided to Bergquist. No one at Bergquist read, signed, or returned the acceptance copy. No one at Sunroc requested that the acceptance copy be returned.
The tapes were shipped on the approximate dates listed in the purchase order, but were sent back after Sunroc learned of the odor problems coming from tapes received from Bergquist as part of the first two transactions.
After returning the goods relating to the third purchase order, Sunroc filed an arbitration demand with the defendant American Arbitration Association ("AAA"). Bergquist was notified of the demand for arbitration on July 12, 1990. Bergquist's in-house counsel informed the AAA that:
The Bergquist Company demands arbitration in Minneapolis, Minnesota. At the time of writing this letter I have not had the opportunity to research whether there is an arbitration agreement or not, but to the writer's best knowledge there is no arbitration agreement contained in any agreements as noted in the Demand for Arbitration. This matter will have to be determined by further investigation.
The parties each filed documents intended to persuade the AAA to schedule the arbitration in their local area. The AAA selected Philadelphia as the site for the arbitration and gave the parties the opportunity to select an arbitrator. Bergquist retained Philadelphia counsel to represent it in the arbitration. Bergquist's present counsel stated in a letter to the AAA dated September 18, 1990:
Our client, the Bergquist Corporation [sic], wishes an additional extension of time in which to submit its lists of arbitrators because we believe that this matter is not properly subject to arbitration. You told us that you are not in a position to adjudicate that question and you also could not give us an additional extension to time without the agreement of our opponent. We contacted ... [Sunroc's counsel] ..., but he declined to agree that we could have an additional extension to submit the list of arbitrators.
Accordingly, we are submitting the enclosed list of arbitrators in protest, and without waiving our position that this matter is not properly subject to arbitration....
Before an arbitrator was selected, Bergquist filed the instant complaint. The complaint contains four counts for declaratory relief. The requested declarations are as follows: 1) that no valid arbitration *1241 agreement exists; 2) that if one exists, it does not cover Sunroc's products liability claim; 3) that if one exists and covers products liability, it nevertheless excludes Sunroc's strict liability and negligence claims; and 4) that any award from an arbitration must be limited to the cost of replacement goods, excluding lost profits and consequential damages. Bergquist additionally sought to enjoin the scheduled arbitration. I denied this last request, since Bergquist had not shown either that it would likely succeed on the issue of arbitrability, or that it would be irreparably harmed if arbitration went forth as scheduled. The arbitration took place in early 1991, and the arbitrator found for Sunroc. The parties have now returned to this forum. Sunroc moves for confirmation of the award; Bergquist seeks the vacation of the award. Both parties also filed cross-motions for summary judgment which address the merits of Bergquist's complaint. They have asked that I address the summary judgment motions first.
II. Step-Saver Data Systems, Inc. v. Wyse Technology
After full briefing of the motions for summary judgment, I permitted the parties to argue their positions. Subsequent to that argument, the Third Circuit issued its decision in Step-Saver Data Systems, Inc. v. Wyse Technology, 939 F.2d 91 (3d Cir. 1991). After the opinion was released, I requested the parties submit additional memoranda addressing Step-Saver and its relation to the issues before me.
The Step-Saver case is remarkably similar to this one. It directly controls two of the five questions (the conditional acceptance and warranty questions) and provides guidance as to how to analyze two others (the arbitration provision and price quotation questions). In Step-Saver, on a number of occasions, Step-Saver, the buyer, telephoned defendant, The Software Link, Inc. ("TSL"), the seller, and placed an order for copies of TSL's computer program. While on the telephone, TSL accepted the order and promised to ship the programs. After the telephone call, Step-Saver sent a purchase order, detailing the items to be purchased, their price, and shipping and payment terms. With shipment, TSL sent an invoice with similar terms. Step-Saver and TSL did not discuss a warranty disclaimer and the purchase order and invoice are silent on that point. On the top of TSL's packaging box which contained the program, TSL printed a license which included a warranty disclaimer, a limitation on remedies and damages, an integration clause, and a clause attempting to condition the buyer's acceptance to the terms of the license.[2] TSL sought to have the terms on the box-top become part of the agreement between Step-Saver and TSL.
The Step-Saver court first determined a contract had been formed at some point in the relationship between Step-Saver and TSL. Step-Saver, 939 F.2d at 98 and 100-01. "The dispute is, therefore, not over the existence of a contract, but the nature of its terms." Id. at 98. In that circumstance, the court decided Uniform Commercial Code ("UCC") § 2-207[3] provided the *1242 means to determine what the terms of the contract were.
The court next addressed TSL's contention that its box-top license should be considered a conditional acceptance under UCC § 2-207(1). It held a conditional acceptance will only be found where the offeree demonstrates an "unwillingness to proceed with the transactions unless its additional terms were incorporated into the parties's agreement."[4]Id. at 103. TSL did not meet that test. Its box-top was not a conditional acceptance.
TSL also argued the repeated use of the box-top license incorporated its terms into the contract. This "course of dealing" argument was rejected by the Third Circuit. Id. at 103-04. It held:
the repeated sending of a writing which contains certain standard terms, without any action with respect to the issues addressed by those terms, cannot constitute a course of dealing which would incorporate a term of the writing otherwise excluded under § 2-207.
Id. at 104.
Finally, the Third Circuit concluded "that adding the disclaimer of warranty and limitation of remedies provisions from the box-top license would, as a matter of law, substantially alter the distribution of risk between Step-Saver and TSL." Id. at 105. Inclusion of the warranty disclaimer and limitation of remedies provisions would have materially altered the parties' agreement; therefore, they could not become part of the contract under section 2-207(2)(b). The court referred to UCC § 2-207, comment 4, for its definition of those terms that "materially alter" a contract. Id. at 104 n. 44. Terms which work a "surprise or hardship if incorporated without express awareness by the other party" are material alterations. Id. (quoting UCC § 2-207, comment 4).
III. Issues
Guided by the Step-Saver analysis, I conclude Bergquist and Sunroc reached three agreements to sell and buy the Q Pad II. More difficult is knowing what the terms of these agreements were. Price, quantity, payment, and delivery provisions were clearly part of the contracts. Whether other possible terms, such as the arbitration clause, the warranty disclaimer, and the limitation on remedies were also contract provisions depends on whether they would materially alter the basic agreements. If they would not, they must be included in the agreements, because no party filed a proper and timely objection to them. If they would alter the contracts, I must engage in the traditional, contract analysis, i.e., finding the "offer" and "acceptance," an analysis which the Step-Saver court did not need to make. Under the circumstances here, these terms could become part of the agreements if the document which includes each of them is found to be an offer rather than an acceptance or a written confirmation. Therefore, *1243 I must consider whether the price quotation was an offer and whether the purchase order was a counter-offer.
Bergquist's counts II and III seek to limit the scope of the arbitration, if it is determined that arbitration was appropriately ordered. The success of these counts will depend on the language of the arbitration clause. Finally, I must decide if arbitration was otherwise in order because the parties agreed to submit their dispute to arbitration after it arose.
There are seven relevant questions that need be answered:
1. Under section 2-207 of the UCC,[5] would the arbitration provision printed on the reverse side of the Sunroc's purchase order materially alter the parties' basic agreement?
2. Does the arbitration provision, if it is part of the agreement, allow for the arbitration of Sunroc's products liability, strict liability, and negligence claims?
3. Under section 2-207 of the UCC would the warranty and damages limitations appearing on the reverse side of Bergquist's invoice materially alter the parties' basic agreement?
4. Is the price quotation, the initial document sent by Bergquist to Sunroc, an offer as defined in the UCC or is it merely an invitation to submit offers?
5. If the price quotation is an offer, is Sunroc's purchase order a counter-offer or a conditional acceptance under the UCC?
6. Did the parties reach an oral agreement for each transaction?
7. Did Bergquist agree by subsequent writing to submit this dispute to arbitration?
The first and fourth questions cannot be decided on a motion for summary judgment and must be left for a jury to determine. The other questions are ripe for resolution at this stage of the proceedings.[6]
IV. Question 1: The Materiality of an Arbitration Provision.
The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq., is the point of departure for deciding the first issue before me: did the parties contract to arbitrate disputes that arose between them? The Act and the federal law that has developed around it "comprise generally accepted principles of contract." Genesco Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 845 (2d Cir.1987). Under this contract law approach to the arbitration question, the first rule is that no party can be forced into arbitration unless he has agreed to go there. AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986). It is the court's responsibility to determine if a valid arbitration agreement exists between the parties and if the specific dispute falls within the scope of that agreement. Id. at 649, 106 S.Ct. at 1418-19. Section 4 of the FAA provides a court should not order arbitration unless it is "satisfied that the making of the agreement for arbitration ... is not in issue." If the making of the agreement is in issue, then "the trial court shall proceed summarily to the trial of that issue." 9 U.S.C. § 4. See Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., Ltd., 636 F.2d 51, 54 (3d Cir.1980). "Only when there is no genuine issue of fact concerning the formation of the agreement should the court decide as a matter of law that the parties did or did not enter into such an agreement." Par-Knit, 636 F.2d at 54.
As I noted above, Bergquist and Sunroc reached three agreements concerning the sale and purchase of heat tapes. The question is whether or not the inclusion of an arbitration provision would materially *1244 alter the parties' agreements. If the arbitration clause was not a material alteration it became part of the contracts because Bergquist did not seasonably object to its inclusion.[7] UCC § 2-207(2)(c). If it was a material alteration it could only become a part of the contract if Bergquist manifested its assent to its inclusion.[8] A material term is one which would result in "`surprise or hardship if incorporated without express awareness by the other party.'" Step-Saver, 939 F.2d at 104 n. 44 (quoting UCC § 2-207, comment 4). On the limited record before me, I cannot say whether or not the incorporation of this arbitration provision would amount to a material alteration of the basic agreements between Bergquist and Sunroc. The cross-motions for summary judgment will be denied as to this issue.
Bergquist contends the so-called "New York" rule cases which find an arbitration provision to be a per se material alteration, see, e.g., Diskin v. J.P. Stevens & Co., Inc., 836 F.2d 47 (1st Cir.1987); Supak & Sons Mfg. Co., Inc. v. Pervel Industries, Inc., 593 F.2d 135 (4th Cir. 1979); Universal Plumbing & Piping Supply, Inc. v. John C. Grimberg Co., Inc., 596 F.Supp. 1383 (W.D.Pa.1984); Schubtex, Inc. v. Allen Snyder, Inc., 49 N.Y.2d 1, 399 N.E.2d 1154, 424 N.Y.S.2d 133 (1979); Matter of Marlene Industries Corp. (Carnac Textiles), 45 N.Y.2d 327, 380 N.E.2d 239, 408 N.Y.S.2d 410 (1978), should apply in this case. Sunroc argues the more modern approach which favors a case-by-case materiality determination based upon a thorough examination of the surprise and hardship elements, see, e.g., Trans-Aire International, Inc. v. Northern Adhesive Co., 882 F.2d 1254 (7th Cir. 1989); Pervel Industries, Inc. v. T M Wallcovering, Inc., 871 F.2d 7 (2d Cir.1989); N & D Fashions, Inc. v. DHJ Industries, Inc., 548 F.2d 722 (8th Cir.1976); Dale R. Horning Co., Inc. v. Falconer Glass Industries, Inc., 730 F.Supp. 962 (S.D.Ind. 1990); Dale R. Horning Co., Inc. v. Falconer Glass Industries, Inc., 710 F.Supp. 693 (S.D.Ind.1989) (on summary judgment), is far superior to the New York rule. Because the modern approach is more in tune with the UCC and with relevant Third Circuit precedent, particularly Step-Saver, I will adopt it over the New York rule.
The genesis of the New York rule cases is the Marlene decision of the New York Court of Appeals. In Marlene,[9] the buyer retained the seller's form, which contained the arbitration provision, without signing *1245 it. The court purported to rest its decision upon the UCC. The court placed special emphasis on New York precedent which had found "parties to a commercial transaction `will not be held to have chosen arbitration as the forum for resolution of their disputes in the absence of an express, unequivocal agreement to that effect; absent such an explicit commitment neither party may be compelled to arbitrate.'" Marlene, 45 N.Y.2d at 333, 408 N.Y.S.2d 410, 380 N.E.2d 239 (quoting Matter of Acting Sup't. of Schools of Liverpool Central School District, 42 N.Y.2d 509, 512, 399 N.Y.S.2d 189, 369 N.E.2d 746). The sole justification provided by the court for its decision is "by agreeing to arbitrate a party waives in large part many of his normal rights under the procedural and substantive law of the State, and it would be unfair to infer a significant waiver on the basis of anything less than a clear indication of intent." Id., 45 N.Y.2d at 334, 408 N.Y.S.2d 410, 380 N.E.2d 239. The court did not explain what it meant by "normal rights." It also did not address whether the widespread use of the arbitration provision in the textile industry should have alerted the buyer to its presence. Later New York rule cases do not add anything else in the way of explanation for their holdings.
These cases, then, do not follow the UCC. The UCC uses the "surprise" or "hardship" language as definitional terms. UCC § 2-207, comment 4. The New York rule cases merely assume, without explanation, that a hardship would result from arbitration, and completely ignore the surprise element. Moreover, a per se rule is absolutely contrary to the UCC's special emphasis on the particular circumstances surrounding each contractual relationship. The New York rule cases do not leave room for an examination of the parties' course of dealing, trade usage, or, for that matter, any other facts which would shed light on the materiality question. A per se rule cannot be justified under the UCC. Similarly, the Third Circuit's reference in Step-Saver to the surprise or hardship elements in comment 4, Step-Saver, 939 F.2d at 104 n. 44, and its emphasis on the effect the warranty disclaimer had upon the distribution of risk between the parties, i.e., the hardship that would have been worked upon Step-Saver, id. at 105, undercut the viability of the New York rule in this circuit.
The modern, case-by-case approach which focuses on the degree of surprise or hardship that is imposed upon the nonassenting party is a better reasoned method. Under that analysis,
whether an additional term materially alters a contract should not be determined upon a summary judgment motion because the inquiry is merely part of the process to ascertain the parties' bargaining intent.... However, summary judgment may be appropriate when the parties cannot honestly dispute that a term would result in surprise or undue hardship unless both parties agree to its inclusion.
Trans-Aire, 882 F.2d 1254.[10]
On the limited record before me, I cannot determine if the arbitration provision surprised Bergquist. Bergquist has not satisfied its burden of showing surprise; however, it is possible that it can convince a jury that it was, in fact, surprised by the assertion that its agreement with Sunroc contained an arbitration provision. Dale Horning, 730 F.Supp. at 966 n. 2.[11] Bergquist contends it was unaware an arbitration provision appeared upon the reverse side of the purchase order. It avers the purchase order was not read by anyone at *1246 its headquarters until well after the transactions were completed. It alleges the arbitration provision was not discussed at any time. While Sunroc agrees the arbitration provision was not discussed, it argues the arbitration provision is conspicuously referenced on the front side of the purchase order and Bergquist did or should have known of its existence.
This is a close factual question. It appears Bergquist was not initially made aware by Sunroc that its purchase order contained an arbitration clause, but the purchase order clearly and conspicuously alerts the seller that additional terms appear on the reverse side. It may be Bergquist should have known an arbitration clause appeared on the back of the purchase order. If that be the case, Bergquist will be bound by the arbitration provision.
At trial, it will be incumbent upon Bergquist to convince the jury that not only it did not know of the arbitration clause, but that it had no reason to know of it. As the Dale Horning court stated "[c]ourse of dealing and usage of trade ... is properly invoked at this stage, for if the ... [nonassenting party] ... is generally aware that such limitations are imposed in the industry, the buyer cannot be heard to complain of surprise in any individual transaction."[12] 730 F.Supp. at 966. The transactional record between Bergquist and Sunroc gives rise to differing conclusions as to the materiality of the arbitration provision. Over the lengthy period of time between the initial contact and the final transaction, Bergquist and Sunroc may have had different beliefs and understandings as to the nature of their agreements. Neither Bergquist nor Sunroc has introduced any evidence of trade usage, nor have they shown what Bergquist's practice is when it is a buyer rather than a seller. Bergquist may rely on an arbitration provision when it wears the other hat. In a nutshell, I cannot determine what the parties' expectations were at the time the transactions took place. I cannot tell with any degree of certainty whether or not the parties intended to include an arbitration provision in their agreements.
As for hardship, the relevant issues are whether the arbitration provision would impose "substantial economic hardship," Trans-Aire, 882 F.2d at 1262, on the nonassenting party or would "substantially alter the distribution of risk," Step-Saver, 939 F.2d at 105, between the parties. During the preliminary injunction phase of this case, I decided Bergquist had not shown it would be irreparably harmed if it was forced to proceed to arbitration. I concluded arbitration was a speedier, less expensive alternative to the courts and any negatives inherent the process were burdens both parties would bear equally.[13] For example, the limited appeal rights afforded under the FAA work imposes a burden on the loser at arbitration, whether it be plaintiff or defendant. Additionally, I found arbitration to afford the parties the unique opportunity of contributing to the arbitrator selection process. Thus, at that time I would have found forcing Bergquist to arbitration would not work a substantial economic harm upon it or substantially alter the distribution of risk between it and Sunroc. Nevertheless, I have since reconsidered and now find an honest dispute exists over the cost of sending Bergquist to arbitration that prevents my granting summary *1247 judgment on this issue to either party.
On the side favoring arbitration are all the things I mentioned above. In addition, there are the benefits of a limited discovery to prevent the unnecessary protraction of litigation. In many instances the arbitrator is an expert in the particular field and can use his specialized understanding of the area to fashion an appropriate remedy. A court may be unable to appreciate the particular nuances of the trade and to create a remedy that takes those factors into account. Moreover, it is often easier to satisfy a judgment. Because of the limited appeal rights, appeals are less frequent and payment may sooner occur. There are many benefits to arbitration, all of which make it an attractive alternative to the courts.
On the other hand, there are some costs and risks that arise from arbitration. Those "normal rights" the Marlene court spoke of are significant. Arbitration eliminates the right to a jury trial. The forced attendance of uncooperative or geographically distant witnesses is difficult to obtain outside the courtroom. Unlike civil cases, arbitration does not let parties move to curtail or summarily end a suit. At arbitration, an unwilling party must defend the suit, frivolous or not. That party cannot stop the litigation before it comes to a head. Thus, it must incur the arbitration cost, whereas in the civil system motion practice may eliminate much of the trial expense. The right to present certain issues of law that are uniquely within the province of the judiciary, e.g., constitutional or federal statutory questions, is reduced in arbitration. Similarly, the right to an appeal from an arbitration is so limited as to be unrecognizable. The grounds on which an appeal may be taken from an arbitration under the FAA, 9 U.S.C. § 10, are exceedingly restricted. The risk then of an incorrectly decided arbitration remaining uncorrected is far greater than that associated with the judiciary.
On the whole, I find the costs and benefits of arbitration to be in balance. However, the parties may have more to add. I will leave it to the jury to assess the parties' evidence on this question and to decide if forcing Bergquist to arbitration imposed unnecessary hardship.
In sum, the question of whether or not the arbitration provision appearing on the reverse side of Sunroc's purchase order materially altered an existing agreement between Sunroc and Bergquist must be submitted to a jury for resolution. I reject the per se approach of the New York rule cases and adopt the case-by-case method appearing in more recent decisions. I can not determine if Bergquist would have been surprised to find an arbitration provision to be part of its agreement with Sunroc. Additionally, the issue of whether Bergquist faced a hardship when forced into arbitration is not susceptible to resolution by summary judgment. Accordingly, the cross-motions for summary judgment will be denied on this ground.
V. Question 2: Scope of the Arbitration Provision
Assuming, arguendo, arbitration is warranted, Bergquist seeks to limit the scope of the arbitration to exclude many of Sunroc's claims. At the arbitration, Sunroc presented claims for strict liability, products liability, and negligence. Whether Bergquist will succeed in its exclusion argument depends on the language of the arbitration clause. The arbitration clause on the reverse side of Sunroc's purchase order provides: "[a]ny controversy or claim arising out or relating to this contract or the breach thereof shall be settled by arbitration." There is a presumption of arbitrability. PaineWebber Inc. v. Hartmann, 921 F.2d 507 (3d Cir.1990). Only where a court can state with "positive assurance" a particular claim is outside the scope of the valid arbitration agreement should the claim be removed from arbitration. Id. at 511.
Here, the arbitration clause is broad enough to include Sunroc's products liability, strict liability, and negligence claims. Those claims arise out of the same facts that make up the breach of contract claim. The arbitration clause clearly covers "any *1248 controversy or claim." Arbitration is not limited to breach of contract claims, but may include "any controversy arising under or relating to this contract." A products liability, strict liability, or negligence claim is within the broad scope of this arbitration clause. See N & D Fashions, Inc. v. DHJ Industries, Inc., 548 F.2d 722, 728 (8th Cir.1976) (fraud and misrepresentation claims within scope of similarly worded arbitration clause). If an arbitration agreement is part of these contracts between Bergquist and Sunroc, Sunroc properly pursued its products liability, strict liability, and negligence claims at the arbitration. Summary judgment will be granted in favor of Sunroc and against Bergquist on counts II and III of Bergquist's complaint, which deal with the scope of permissible claims at arbitration.
VI. Question 3: The Materiality of a Warranty Disclaimer and Limitation of Remedies Provision
Bergquist's count 4 seeks enforcement of the warranty disclaimer and limitation of remedies provisions contained in its invoice. It is clear under Step-Saver that those provisions are material alterations to the parties' basic agreements and were not part of them. Step-Saver, 939 F.2d at 105. The invoice is similar in language to the box-top license and cannot be distinguished on any other basis. Summary judgment will be granted in favor of Sunroc and against Bergquist on Bergquist's count 4.
VII. Question 4: Was Bergquist's Price Quotation an offer or an Invitation to Submit Offers?
Employing a more traditional offer-acceptance analysis to determine the terms of the contracts here, Bergquist argues I should consider its price quotation an initial offer to sell which was accepted on each occasion by Sunroc's orders. Sunroc responds the price quotation was nothing more than an invitation to make offers to buy, which it made through submitting its purchase orders. Both parties argue their points strenuously because if Bergquist's price quotation was the offer, the arbitration provision in Sunroc's purchase orders became part of each contract, as long as it was not a material alteration.[14] If the Bergquist price quotation was not an offer, Sunroc's purchase orders with their arbitration provisions would be the offers, accepted by Bergquist's shipments unless oral agreements were reached on the telephone before each shipment.[15] Unfortunately, however, the price quotation is not clearly an offer or an invitation to accept offers. It is an ambiguous document. The other evidence of Bergquist's intent to be bound and Sunroc's understanding of the document is equivocal. All this creates a classic jury question.
An offer is "the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it." Corinthian Pharmaceutical Systems, Inc. v. Lederle Laboratories, 724 F.Supp. 605, 609 (S.D.Ind.1989) (quoting H. Greenberg, Rights and Remedies Under U.C.C. Article 2, § 5.2 at 50 (1987)). The general rule is price quotations are not offers, but rather are mere invitations to enter into negotiations or to submit offers. Master Palletizer Systems, Inc. v. T.S. Ragsdale Co., 725 F.Supp. 1525, 1531 (D.Colo.1989), aff'd 937 F.2d 616 (10th Cir.1991); Corinthian, 724 F.Supp. at 609; Maurice Electrical Supply Co., Inc. v. Anderson Safeway Guard Rail Corp., 632 F.Supp. 1082, 1087 (D.D.C.1986). A buyer's purchase order submitted in response to a price quotation is ordinarily considered the offer. Master Palletizer, 725 F.Supp. 1525. However, if detailed enough, a price quotation can amount to an offer which can be accepted. Id. at 1531; Quaker State Mushroom v. Dominick's Finer Foods, 635 F.Supp. 1281, 1284 (N.D.Ill.1986); In re Chemtoy *1249 Corp., 19 B.R. 475, 479 (Bankr.N.D.Ill. 1982).
But to do so, the offer must intend that the contract exist upon acceptance of the offer; that is, it must reasonably appear from the price quotation that assent to that quotation is all that is needed to ripen the offer into a contract.
Quaker State, 635 F.Supp. at 1284. Whether this price quotation is an offer is a question of fact that depends upon the parties' acts, their expressed intent, and the circumstances surrounding each transaction. Maurice Electrical, 632 F.Supp. at 1087.
Bergquist points out many factors which would support a finding that the price quotation is an offer. The price quotation was developed after some negotiation between the parties and after Sunroc had submitted its own specifications. This is not a situation where a price quote was unsolicited; rather, it was a specific response to McShane's request. The price quotation is detailed and includes a description of the product, a listing of various quantities at various prices, a die charge, delivery terms, and payment terms. The price quotation states: "This quotation is offered for your acceptance within 30 days...." (emphasis added). Thus, it appears Bergquist may have intended this price quotation to be an offer inviting acceptance. Quaker State Mushroom, 635 F.Supp. at 1284 n. 4. The "30 days" term usually informs the prospective buyer that the terms of the price quotation are irrevocable for a period of 30 days. See Loranger Plastics Corp. v. Incoe Corp., 670 F.Supp. 145, 146 (W.D.Pa. 1987). Finally, the price paid by Sunroc for the first purchase Q Pad II was that listed in the price quotation rather than the lesser price appearing in Sunroc's purchase order. This certainly shows the parties had the price quotation in mind during the transaction. These facts are all strong evidence the price quotation was an offer.
Yet there is also strong evidence the price quotation was not an offer. It is labelled "price quotation" in six places. The list of quantities and prices available for the Q Pad II resembles a menu rather than a specific offer to sell a particular quantity at a particular price. In that respect, the price quotation is like an invitation to accept Sunroc's offer to buy. Most important is the ambiguous small print at the bottom of the quotation. It states: "This quotation is offered for your acceptance within 30 days and is subject to material availability and price in effect at time of shipment...." Id. (emphasis added). This clause suggests Bergquist did not intend to be bound by the terms of the price quotation, but reserved the right to change the price up to the time of shipment. It is difficult to say with certainty what the legal consequences would be if Sunroc had merely accepted the price quotation because the terms of the resulting "contract" would be indefinite. In Quaker State Mushroom, the price quotation provided: "Prices are subject to change without notice. All orders are subject to final confirmation of this office." 635 F.Supp. at 1282. The court found this document to be a quotation rather than an offer, because the buyer's assent would not have consummated the contract. Id. at 1284. Finally, a purchase order that follows as a response to a price quotation usually constitutes the offer. Master Palletizer, 725 F.Supp. at 1531; Maurice Electrical, 632 F.Supp. at 1087. The same could certainly be said for Sunroc's purchase order. However, as I discussed above the price quotation may or may not be the offer. I will leave this question to the jury to decide based upon the document itself and the surrounding circumstances at the time of its issuance.[16]
*1250 VIII. Question 5: Conditional Acceptance
After reading Step-Saver, Sunroc abandoned its contention that its purchase order was a conditional acceptance. Bergquist does not argue, nor could it given the conditional acceptance rule pronounced in Step-Saver, that its invoice was a conditional acceptance. Neither Sunroc's purchase order nor Bergquist's invoice was a conditional acceptance or a counter-offer.
IX. Question 6: Did the Parties Enter into a Series of Oral Agreements?
At the preliminary injunction hearing, I found Bergquist had failed to prove by clear and convincing evidence the existence of an oral contract with Sunroc. I based my decision upon the fact none of the participants in the telephone conversations (McShane, Joyce, Scheiber, or Henton-Olsen) remembered any of the significant details of those conversations and the fact that Joyce provided Bergquist with a purchase order number. These individuals remembered little more than that they talked to each other. Joyce and McShane assumed their conversations with Bergquist followed their usual pattern of placing orders with vendors. Scheiber did not remember the particulars of any conversation with Sunroc except for the last transaction where he and Joyce dickered over the price and delivery terms. Henton-Olsen did not even remember her conversation with Joyce and merely explained the meaning of her contemporaneous note, which provides little information in any event. The fact that Joyce made a practice of providing Bergquist with Sunroc's purchase order number lent credence to Sunroc's theory that the contract included the purchase order and did not include only the terms discussed over the phone.
To preclude consideration of Sunroc's purchase order, the burden of proof is on Bergquist to show the existence of an oral contract. Viso v. Werner, 471 Pa. 42, 369 A.2d 1185, 1187 (1977). Bergquist must establish its existence and terms by clear and precise evidence. Browne v. Maxfield, 663 F.Supp. 1193, 1197 (E.D.Pa.1987). Bergquist cannot meet this burden and summary judgment must be awarded to Sunroc on this issue.
The evidence introduced during the preliminary injunction hearing was not clear and convincing of the existence or the terms of an oral contract. The witnesses provided little if any knowledge of either. Their assumptions and beliefs as to how the telephone conversations unfolded are not satisfactory proof. Bergquist now places heavy emphasis on the "confirming" stamp in Sunroc's purchase order. Bergquist argues the stamp must refer to a confirmation of an oral contract. However, that is just one possibility. It also could confirm receipt of the price quotation and the purchase order as a response to it; it could confirm an acceptance, or it could confirm an offer to buy. There is simply no way of knowing which is the case, because no one can remember what happened during the conversation that preceded it.
Bergquist presented additional evidence in the form of Joyce's arbitration testimony, which it argues supports the formation of an oral contract. The arbitration transcript provides:
Q. (by Bergquist's counsel) Was each of your orders for those goods placed, as far as you were concerned, as of the phone call, or was it necessary to send the purchase order thereafter in order to order the goods, to place the order for the goods?
A. (by Joyce) In order to complete the placement? Send a purchase order?
*1251 Q. Did you consider the goods ordered as of the phone call?
A. I considered the order placed but not confirmed.
Q. Okay. Suppose you had never sent the purchase order. Would you still expect to have received the goods? ...
A. As a matter of procedure, I sent a purchase order for the record and just to back me up in the event that the goods don't come.
Placing an order is not the same thing as forming a contract. Placing an order may be nothing more than making an offer to buy. For example, Step-Saver "placed an order" which was "accepted" by TSL on the telephone. Step-Saver, at 95-96. The written documents followed the conversation. It appears from the Third Circuit's language that placing an order is something that needs an acceptance in order to blossom into a contract. Thus, the fact that Joyce placed an order, even one that was just a back up, could indicate an offer to buy. Even if placing an order created an oral contract, Bergquist has not shown what the terms of that oral contract were with the requisite modicum of proof. Simply put, Bergquist has not created a genuine issue of material fact as to whether an oral contract existed and, if one did, as to what were its terms. Summary judgment in Sunroc's favor is therefore appropriate as to this issue.
X. Question 7: Is Bergquist Bound by a Subsequent Agreement to Arbitrate?
The FAA provides: "an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable...." 9 U.S.C. § 2. Sunroc contends Bergquist's attorneys agreed in writing to submit this case to arbitration. Sunroc maintains Bergquist agreed to arbitration after it was notified of Sunroc's demand and only raised an objection after the AAA scheduled the arbitration in Philadelphia as opposed to Minneapolis, where Bergquist is headquartered. To make this argument, Sunroc misuses the writings of Bergquist's counsel's. Bergquist did not agree to submit this controversy to arbitration. Bergquist adequately preserved its objection to arbitration.
As I noted in greater detail, supra at p. 1246, Bergquist's counsel stated he did not believe there was an arbitration agreement. This letter was a sufficient objection to cause the AAA to demand a copy of the written arbitration contract. The AAA stated it would withhold further proceedings pending the receipt of the written arbitration contract. Bergquist's counsel's letter dated August 9, 1990, is the strongest evidence in support of Sunroc's position. The letter poses no objections to the arbitration and contains Bergquist's contentions why the arbitration should take place in Minneapolis rather than Philadelphia. However, Bergquist had previously filed its objection to the arbitration. Bergquist did not have to refuse to attend the arbitration and let Sunroc get a default judgment against it. Bergquist could properly proceed with the arbitration mechanics while developing a strategy to prevent arbitration in the end. The letter dated September 18, 1990, from Bergquist's present counsel supports this view. The letter plainly states Bergquist was proceeding with the mechanics of selecting arbitrators in "protest" and despite its "position that this matter is not properly subject to arbitration." Bergquist repeatedly objected to the arbitration. It did not vitiate its objections by participating in the initial phases of the arbitration process. Bergquist had no other choice.
I recognize that at some point it would have been unfair to Sunroc to allow Bergquist to continue in the arbitration process, await an unfavorable decision, and then challenge the arbitration. I need not decide where that point is located. It is clear that Bergquist had not yet reached it. Bergquist went through the motions in "protest" until it was able to formulate and act upon a plan to prevent the arbitration entirely. It sufficiently objected to the arbitration. It did not agree in writing to submit this controversy to arbitration. Bergquist's motion for summary judgment *1252 on this issue will be granted and Sunroc's will be denied.
XI. Conclusion
In summary, I conclude that
(1) the arbitration provision in question is broad enough to cover Sunroc's products liability, strict liability, and negligence claims, making summary judgment for Sunroc and against Bergquist on Counts Two and Three appropriate;
(2) inclusion of the warranty and damage limitations provisions that appear on Bergquist's invoice would have amounted to material alterations of the parties' basic agreements, making summary judgment for Sunroc and against Bergquist on Count Four appropriate;
(3) neither Sunroc's purchase orders nor Bergquist's invoices could be considered conditional acceptances or counter offers;
(4) the parties did not enter into a series of oral contracts; and
(5) Bergquist did not by subsequent conduct agree to the arbitration of Sunroc's claims.
The two remaining questions, whether arbitration provisions would be material alterations of the parties' basic agreements and whether Bergquist's price quotation was an offer or an invitation to submit offers, are questions for a jury to resolve. Hence summary judgment for either party on Count One is inappropriate.
The practical difficulties in presenting these two questions to a jury are obvious. In effect they deal with differing, conflicting theories of contract law and formation. The resolution of the one may or may not make the resolution of the other unnecessary. I will meet with counsel to discuss how we can best proceed.
NOTES
[1] After delivery and acceptance of the tapes, Sunroc paid the price listed on the price quotation and not on the purchase order. There is no evidence from which to infer why Sunroc neglected to include the additional half cent and why Sunroc paid the greater price.
[2] The Step-Saver court stated:
(2) The box-top license, in detail and at some length, disclaims all express and implied warranties except for a warranty that the disks contained in the box are free from defects.
(3) The box-top license provides that the sole remedy available to a purchaser of the program is to return a defective disk for replacement; the license excludes any liability for damages, direct or consequential, caused by the use of the program.
(4) The box-top license contains an integration clause, which provides that the box-top license is the final and complete expression of the terms of the parties's agreement.
(5) The box-top licenses states: "Opening this package indicates your acceptance of these terms and conditions. If you do not agree with them, you should promptly return the package unopened to the person from whom you purchased it within fifteen days from date of purchase and your money will be refunded to you by that person.
Step-Saver, 939 F.2d at 96-97.
[3] Section 2-207 provides:
Additional Terms in Acceptance or Confirmation.
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of the Act.
[4] I question whether under this test it would be possible for an offeree to prove a conditional acceptance if it performs its part of the bargain. It would seem that once it is determined a contract exists based upon the parties' performances, no conditional acceptance could ever be found. In order to show a conditional acceptance, a party must immediately demonstrate its unwillingness to proceed with the transaction. Once a party proceeds with performance, by definition, he expresses a willingness to go forward which defeats his conditional acceptance contention. Perhaps the only way a conditional acceptance could be demonstrated in the face of performance is if the offeree believes incorrectly that the offeror accepted the additional terms, when, in fact, it has not agreed to those terms.
[5] It is unnecessary to decide whether Pennsylvania or Minnesota law applies in this case. Both states have adopted the UCC and more specifically sections 2-206 and 2-207 of the Code. I will simply refer to the UCC section rather than the appropriate state codification.
[6] Actually, Bergquist briefed an eighth issue concerning the arbitrator's conduct during the arbitration. Bergquist did not raise this issue during oral argument. I will reserve judgment on that question until after the trial as it is only relevant if the jury decides the matter is arbitrable and was properly sent to arbitration.
[7] Whether Sunroc's purchase order is considered an offer, an acceptance of an offer, or a written confirmation of an acceptance or of an oral agreement, the UCC permits non-material terms to be made part of the contract unless an objection is noted. This fact underlies the Step-Saver court's emphasis on materiality rather than on the more traditional search for an offer and acceptance. Bergquist did not object to the purchase order's arbitration provision at any time during the three transactions. Its current resistance to arbitration is not a valid objection under the UCC; it is untimely. Moreover, Bergquist's invoice is silent as to arbitration and could not be considered an objection to the arbitration provision in Sunroc's purchase order.
[8] More specifically, the arbitration provision would still be included in the agreements if Sunroc's purchase order is considered as the offer. This, however, is dependent upon the price quotation's not being the offer and upon no oral agreement having been reached over the telephone between Joyce and Scheiber or Joyce and Henton-Olsen. As I will discuss below, I cannot conclude, based on the record before me, whether the price quote is an offer, see infra at 1248-49, but it is clear no oral agreement was reached, see infra at 1250-51. If Sunroc's purchase order was the offer, that provision was part of the contract from the inception and Bergquist accepted that term by making shipment.
[9] Marlene, like many of the cases specifically concerning the materiality of an arbitration provision, is a case arising from a dispute in the textile industries. See also Diskin, Pervel; Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840 (2d Cir.1987); N & D Fashions; Supak; Schubtex; Matter of C.M.I. Clothesmakers, Inc., 85 Misc.2d 462, 380 N.Y.S.2d 447 (Sup.Ct.1975); Frances Hosiery Mills, Inc. v. Burlington Industries, Inc., 285 N.C. 344, 204 S.E.2d 834 (1974). The use of arbitration provisions in the textile industry is apparently widespread. Despite this extensive use, the New York rule cases held its inclusion was a material alteration. See Diskin, 836 F.2d at 50-51. More modern cases find the frequent use of an arbitration provision refutes the argument that the nonassenting party was surprised by the provision. See infra at 1245. Genesco, 815 F.2d at 846.
[10] See also Transamerica Oil Corp. v. Lynes, Inc., 723 F.2d 758, 765 (10th Cir.1983) ("[I]ssue of whether a term materially alters the contract for the purposes of § 2-207(2)(b) is a question of fact that must be determined in light of the facts of the case and the parties' expectations.").
[11] "The burden of showing surprise appears to be on the nonassenting [party] ..., for § 2-207 states that between merchants, such terms become a part of the contract unless they materially alter it. In this case, then, if the buyer presented no evidence on surprise, the Code would add the presumption that the term is part of the agreement. Th[at party] ... thus bears the burden of proof on this matter...." Dale Horning, 730 F.Supp. at 966 n. 2.
[12] In Step-Saver, as I discussed supra at 1242, the court held the mere exchange of documents without a specific reference to the term in issue cannot constitute a course of dealing which would incorporate the term into the parties' agreement. Step-Saver, at 103-04. However, that holding is not as broad as it seems. The Third Circuit did not hold no evidence of the parties' transactions could be admitted. Rather, such evidence is admissible since it goes to prove a parties' intent to be bound by a particular contractual provision.
[13] The Trans-Aire court stated:
It is clear that the term would impose no substantial hardship upon the nonassenting party. True, the term deprived the party of certain rights. However, for all practical purposes, the term had little effect upon the nonassenting party's economic welfare. That is, the nonassenting party still had an opportunity to prosecute or defend its interests albeit in a different forum.
882 F.2d at 1262.
[14] Section 2-207(2)(b) provides additional terms in an acceptance become part of an agreement unless they materially alter the contract or are rejected within a reasonable time.
[15] See supra at 1244.
[16] There is additional evidence that Bergquist did not intend to be bound by the price quotation, although at least for the first transaction Sunroc would not have known of it. The Bergquist invoice, exhibit M10, strongly suggests that Bergquist's usual practice was to take the position that a buyer's purchase order was an offer subject to "approval and acceptance," and that until it was accepted, even prices such as those on a price quotation were subject to change without notice. The relevant paragraphs provide:
4. DELIVERIES. ... Date of shipment shown on our quotation form or promised at any time during the life of the order is based on the seller's best judgment at that time but may be subject to changing conditions, in many cases beyond the seller's reasonable control. No liability on the seller's part shall result in any case.
6. QUOTATIONS. Stenographical and clerical errors subject to correction. The seller reserves the right to revise any prices quoted by the seller without notice at any time prior to the acceptance of an order by the seller. Material price fluctuations are subject to change in accordance with the price of the material on the day an order is accepted by the seller.
10. ACCEPTANCE OF ORDERS. All orders and sales contracts are subject to written approval and acceptance by the seller and are not binding until approved or accepted by the seller. (emphasis added)
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649 So. 2d 333 (1995)
Keith Edward KISER, Appellant,
v.
STATE of Florida, Appellee.
No. 94-837.
District Court of Appeal of Florida, First District.
January 31, 1995.
*334 Keith Edward Kiser, pro se.
Robert A. Butterworth, Atty. Gen., Amelia L. Beisner, Asst. Atty. Gen., Tallahassee, for appellee.
ERVIN, Judge.
The trial court's order summarily denying appellant's motion for post-conviction relief on the ground that it is a successive motion is reversed and the matter is remanded for further proceedings.
Appellant's first post-conviction relief motion was filed solely for the purpose of obtaining a belated appeal. As stated in State v. District Court of Appeal of Florida, First District, 569 So. 2d 439 (Fla. 1990), a motion for post-conviction relief under Florida Rule of Criminal Procedure 3.850 is the appropriate vehicle for seeking a belated appeal based on ineffective assistance of counsel for failing to file a timely notice of appeal. Such motions are not dependent upon a preliminary showing of merit, in that an appeal as a matter of right should be permitted even if it is determined to be without merit or it develops that no arguable issue can be found. See Short v. State, 596 So. 2d 502 (Fla. 1st DCA 1992); Gunn v. State, 612 So. 2d 643 (Fla. 4th DCA 1993). Consequently, once a motion for post-conviction relief has been filed solely for the purpose of obtaining a belated appeal, because counsel was ineffective for not timely filing the notice of appeal, a subsequent 3.850 motion should not be considered successive if it alleges ineffective assistance of counsel on other grounds.
REVERSED and REMANDED.
MINER and WOLF, JJ., concur.
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Court of Appeals
Sixth Appellate District of Texas
JUDGMENT
In Re: Raymond Earl Barnett Memorandum Original Mandamus
Proceeding
No. 06-14-00132-CR
Opinion delivered by Justice Moseley,
Chief Justice Morriss and Justice Carter
participating.
As stated in the Court’s opinion of this date, we find that the petition for writ of
mandamus should be dismissed as moot. Therefore, we dismiss the petition.
RENDERED AUGUST 13, 2014
BY ORDER OF THE COURT
JOSH R. MORRISS, III
CHIEF JUSTICE
ATTEST:
Debra K. Autrey, Clerk
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175 N.J. Super. 614 (1980)
421 A.2d 610
IN THE MATTER OF JANE TIERNEY, AN ALLEGED MENTAL INCOMPETENT.
Superior Court of New Jersey, Law Division Probate Part, Somerset County.
Decided April 25, 1980.
*616 Roger A. Beeman for plaintiff Marie Sayer (Roth, Beeman & Savage, attorneys).
*617 Francis X. Hermes for defendant (Wharton, Stewart & Davis, attorneys).
MEREDITH, J.S.C.
This action comes to the court by way of a complaint entered by Marie Sayer who petitions the court to adjudge Jane Tierney mentally incompetent and grant complainant letters of guardianship. Ms. Tierney has in turn entered a motion to dismiss the incompetency action.
Jane Tierney is 55 years old, an only child of parents now dead. She has never married. She has no aunt or uncle living; apparently six elderly cousins survive. On September 15, 1975 Ms. Tierney was seriously injured in an automobile accident and was as a result hospitalized for many months in the Mercer Medical Center, the Morris Hall Rehabilitation Center and the Kessler Rehabilitation Center. Because of her physical disabilities she still resides in a convalescent home. In June 1979 Ms. Tierney participated in a civil trial in which a jury awarded her $400,000 for personal injuries she suffered as a result of the automobile accident. Ms. Tierney's present assets amount to $405,487.
Plaintiff Marie Sayer, according to her affidavit, was a childhood friend of Ms. Tierney and over the years has assisted the latter with her personal and financial affairs. In January 1978 Ms. Tierney executed a power of attorney to plaintiff and plaintiff's husband. Ms. Sayer presently has control of Ms. Tierney's entire assets which include stock certificates and bank books. Plaintiff is in no way related to Ms. Tierney. Neither is Ms. Tierney in any financial or legal manner obligated to plaintiff. Ms. Sayer does not have any right, title or interest either equitable or legal in Ms. Tierney's assets. (Plaintiff is, however, the principal beneficiary of Ms. Tierney's last will and testament.)
On February 13, 1980, having become concerned that her affairs were not being properly handled, Ms. Tierney executed a power of attorney to her present counsel. It was and is her *618 intention to establish with counsel's assistance an inter vivos trust for her own care and maintenance. Plaintiff has refused to honor the revocation of her own power of attorney over Ms. Tierney's assets and has refused Ms. Tierney's request that $2,500 be paid from those assets to the latter's attorney.
On February 19, 1980 plaintiff filed this complaint. On that same day Ms. Tierney filed in the Chancery Division a complaint which requests the court to direct Ms. Sayer to turn over to Ms. Tierney's attorney all records and accounts of her assets. That proceeding has been stayed pending the outcome of the present action.
After an initial determination that the complaint and medical affidavits submitted by plaintiff do, on their face, bring into question Ms. Tierney's soundness of mind, the court ordered this action be set down for a hearing and that notice be given to the proper parties, pursuant to R. 4:83-4. Briefs have been submitted by both sides. Plaintiff submits that Ms. Tierney is a mental incompetent and as a result cannot govern herself. Ms. Tierney insists that despite her physical disabilities she is of sound mind and is capable of managing her own affairs.
Before reaching the substantive issue of incompetency, the court has considered the question of plaintiff's standing, also raised by Ms. Tierney's counsel. The court concludes that Marie Sayer is not a proper plaintiff to initiate a determination of the incompetency of Jane Tierney and the complaint must therefore be dismissed.
It would appear at first blush that the question of who may institute an incompetency proceeding is answered simply by reference to In re Oswald, 132 N.J. Eq. 325 (Ch. 1942). There it was held that a judicial determination of a person's mental incompetency may not be made upon the application of a "mere stranger": Chancery had only statutory jurisdiction over "lunatics," and the pertinent statutory provision, N.J.S.A. 3:7-35 (now repealed), prohibited the exercise of that jurisdiction upon the petition of a "stranger." The court found that petitioner in that case, who claimed to be a friend of the alleged incompetent (as *619 does plaintiff in the present action), was nevertheless a "stranger to Mrs. Oswald in the eyes of the law." Id. at 326.
In addition to Oswald, supra, the only reported New Jersey case which directly addressed the issue of a proper plaintiff in mental incompetency proceedings,[1] there is a long line of earlier cases in which the New Jersey Chancery Court addressed the standing issue in dicta. See, e.g., In re Covenhoven, 1 N.J. Eq. 19 (Ch. 1830). It is in Covenhoven, according to the Oswald opinion, that "the limitation upon the Chancellor's power in this regard (that is, to entertain an incompetency action upon the application of a mere stranger) was first pointed out in this state ..." Oswald, supra, at 329.
Covenhoven, supra, ruled (among other things) that an attorney for the alleged incompetent, who also held his client's power of attorney, did not have sufficient legal or equitable interest to intervene in the incompetency proceedings. The court wrote in dictum, "It is clear that a stranger has no right to interfere in a proceeding of this nature. He can neither sue out a commission, nor can he make himself a party to it by any application he may make to this court." 1 N.J. Eq. at 21.
In In re Frankish, another case cited in the Oswald opinion, the court, again in dictum, explained that a "stranger" cannot initiate an incompetency proceeding as to another person: "Only relatives who are interested in the welfare of the lunatic may do this." 86 N.J. Eq. 280, 285 (Ch. 1916).
In re Rhodes, 100 N.J. Eq. 370, 373 (Ch. 1927), a 1927 Chancery Court opinion, expanded the category of those who could bring an incompetency action: "While a near relative of the alleged lunatic is the proper person to institute lunacy proceedings," creditors may petition the court "for a commission against their lunatic debtor," and in some instances strangers may enter such a petition upon information by the Attorney General. The nature of that information was not explained. And in In re *620 Sekel, 140 N.J. Eq. 367, 370 (Ch. 1947), a much more recent case, it was explained that the Chancellor also has the power to act upon a petition of a public officer in order to conserve the estate of an alleged incompetent confined in a public institution.
Since 1947 there has been only one reported case in which the issue of a cognizable plaintiff has been touched upon. In In re Schiller, 148 N.J. Super. 168 (Ch.Div. 1977), the court was petitioned by a hospital to determine the mental capacity of a patient to give consent for a necessary surgical procedure. Judge Dwyer, citing Oswald, supra, summarized the general rule that "The complainant [in an incompetency proceeding] must be a relative, creditor, or perhaps have a relationship founded upon contract, trust or confidence, but a stranger may not [make an application]." At 179, n. 3. Again in note 4, the court reiterated that its jurisdiction in such matters is purely statutory; in the absence of a proper plaintiff, it had no inherent power to determine mental incompetency. At 180, n. 4.
Plaintiff in the instant case is neither relative nor creditor nor does she have with Ms. Tierney a relationship based on contract, trust or confidence. Plaintiff is a "mere stranger" to the person whom she is seeking to have declared incompetent. Based on the holding in Oswald, supra, and the dicta in other reported cases, some of which are cited above, Marie Sayer may not be recognized as a proper plaintiff in this proceeding.
Plaintiff suggests, however, that since Oswald et al. were grounded on statutory law which has since been repealed, that opinion and its progenitors are no longer the law of this State. Plaintiff argues that the ancient procedural restrictions memorialized in Oswald no longer preclude the court, as presently constituted, from invoking its broad equity jurisdiction in order to reach the substance of the incompetency determination.
Because of the constitutional, statutory and rule changes since 1942 related to the procedural rules which govern actions to determine mental incompetency, the court believes that a full and up-to-date analysis is necessary in order to properly determine the standing issue raised here.
*621 The common law predecessor, in England and colonial America, of the action to determine mental incompetency, presently outlined in R. 4:83-1 et seq., was the writ de lunatico inquirendo or a commission in the nature of such a writ which upon petition might issue from the Chancellor. Lindsley's Case, 44 N.J. Eq. 564 (E. & A. 1888); 6 N.J. Practice (Clapp, Wills and Administration) (3 ed. 1962), § 743 et seq.
As early as 1794 the New Jersey Legislature confirmed in the Chancellor (at that time the Governor) that jurisdiction over the persons and property of idiots and lunatics, which power had in pre-revolutionary times been accorded the Chancellor in his role as a surrogate of the English King. In March 1804, in a supplement to the 1794 act, the Legislature provided by statute that the procedure to be followed in the determination of idiocy or lunacy would be that "heretofore [that is, before 1804] practiced". In re McLaughlin, 87 N.J. Eq. 138, 140 (Ch. 1916-1917); In re Farrell, 51 N.J. Eq. 353, 359 (Ch. 1893).
The rather vague directive that commissions and writs should issue according to the existing practice remained part of the language of the pertinent statute until 1952. Its most recent form, N.J.S.A. 3:7-35 provided:
Except as otherwise provided by law, the question whether a person is a mental incompetent shall be determined by an inquest upon a commission to be issued out of the court of chancery and returnable thereto, and proceedings thereon shall be as heretofore practiced, in proceedings de lunatico inquirendo and in the nature of de lunatico inquirendo. [Emphasis supplied]
The courts in New Jersey from the earliest days have assumed that the applicable procedural restrictions, "as heretofore practiced," included, among other things, the general rule that a person with no actual legal or equitable interest may not initiate proceedings to determine another's mental incompetency. According to the Chancellor in Oswald, supra:
Neither the English Parliament before the American Revolution nor the New Jersey legislature since that time has granted to the Chancellor the power to issue a writ de lunatico inquirendo upon the application of a mere stranger and no such practice has heretofore been countenanced. [132 N.J. Eq. at 329].
However, there has never been any statutory explanation or definition as to the nature of the procedure "heretofore practiced."
*622 In 1952 the Legislature substantially revised Title 3; N.J.S.A. 3:7-35 was repealed and not re-enacted in the new Title 3A. Herein lies the nub of the question in the present case: Does the repeal of the statute which described, however vaguely, the procedure to be followed in incompetency actions signal the general abandonment of those procedural rules that have had effect for centuries? This court is of the opinion that the answer must be in the negative.
Firstly, the revised statutes do describe, again by reference, the procedural rules which must be followed in actions to determine incompetency. N.J.S.A. 3A:6-35 provides:
In civil actions ... for the determination of mental incompetency ... the trial of the issue of mental incompetency may be had without a jury pursuant to rules of the supreme court, unless a trial by jury is demanded by the alleged mental incompetent or someone in his behalf. [Emphasis supplied]
R.R. 4:102-1, part of the then court rules to which the statute referred, required that the complainant in an incompetency proceeding state his relationship to the alleged incompetent and, if not spouse or next of kin, his interest. Obviously such requirement reflects and substantiates the general rule that a proper complainant must be a relative or a person with a legal or equitable interest in the subject of the action. The court is persuaded that the Legislature and our Supreme Court intended, by way of N.J.S.A. 3A:6-35 and R.R. 4:102-1, to continue those standing restrictions that had been followed since pre-revolutionary times.
The present court rules which pertain to incompetency actions, R. 4:83-1 et seq., use the same language, somewhat contracted, as that in R.R. 4:102: R. 4:83-1 requires that the complainant state his or her relationship to the alleged incompetent and his or her interest in the action. Again, the rule reflects, more simply, those standing restrictions and limitations of the court's power long iterated in the common law of this State.
Secondly, it was long ago settled that English case law and statutes decided or enacted before the American Revolution and practiced in New Jersey before 1776 constitute a part of the *623 common law of this State and remain in force until altered by the Legislature or modified by the court. N.J.Const. (1776), Art. XXII; Scudder v. Trenton Delaware Falls Co., 1 N.J. Eq. 694 (Ch. 1832); Breen v. Peck, 28 N.J. 351 (1958).
In order for a statute to supercede or nullify the common law it must contain some express or specific statement to that effect. State v. Western Union Tel. Co., 12 N.J. 468, 486 (1953), app. dism. 346 U.S. 869, 74 S.Ct. 124, 98 L.Ed. 379 (1953); Long Beach Tp. v. City of New York, 445 F. Supp. 1203 (D.C.N.J. 1978). Obviously mere failure to reenact N.J.S.A. 3:7-35, especially in light of the language of the more recent N.J.S.A. 3A:6-35 and the court rules, cannot be construed as an intentional negation of the standing requirements which are ensconced in the common law.
Finally, it has been said that each time a rule of common law is applied it should be "carefully scrutinized to make sure that the conditions and needs of the time have not so changed as to make further application of it the instrument of injustice." State v. Culver, 23 N.J. 495, 505 (1957). Generally, the courts of this State have not hesitated to reshape the common law "to new thinking as well as to new conditions, when impelled by a strong sense that justice and the public welfare required it." Koplik v. C.T. Trucking Corp., 47 N.J. Super. 196, 203 (App.Div. 1957), rev'd on other grounds 27 N.J. 1 (1958).
The public policy which gave birth to the standing requirements as to incompetency actions is clearly to protect individuals from unwanted interference in their affairs; to shield an individual from the necessity of defending himself or herself from frivolous or insidious incompetency charges. It is the opinion of this court that the general need for such protection has not diminished; certainly the situation presented in the instant case does not call for modification of the standing requirement.
One can imagine that there are instances where a person with no family, who cannot manage to take care of himself or herself, might be denied by the standing requirements the *624 benefits of a guardian's assistance and the assurance of proper care. See In re Schiller, 148 N.J. Super. at 179, n. 3. The instant case, however, does not present such a situation. Jane Tierney is institutionalized; presumably she is adequately cared for. She has sufficient assets to provide for her continued institutionalization if that is necessary. She has made arrangements with her attorney to set up an inter vivos trust which would insure her future maintenance in any case. In no sense is the court, in dismissing this incompetency action, "abandoning" Ms. Tierney or denying her proper care.
NOTES
[1] The Chancellor in Oswald wrote that neither he nor counsel had found any other reported instance in the state of an "outright application by a stranger." 132 N.J. Eq. at 329.
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47 Md. App. 45 (1980)
421 A.2d 982
JOHN HENRY HALEY
v.
STATE OF MARYLAND.
No. 1322, September Term, 1979.
Court of Special Appeals of Maryland.
Decided November 6, 1980.
*46 The cause was submitted on briefs to THOMPSON, MOORE and MASON, JJ.
Submitted by Richard M. Karceski, Assigned Public Defender, for appellant.
Submitted by Diane G. Goldsmith, Assistant Attorney General, Stephen H. Sachs, Attorney General, Andrew L. Sonner, State's Attorney for Montgomery County, and Ann Harrington, Assistant State's Attorney for Montgomery County, for appellee.
MASON, J., delivered the opinion of the Court.
The single issue in this case is whether the Interstate Agreement on Detainers Act, Article 27, section 616A et seq., of the Annotated Code of Maryland is applicable to post conviction proceedings.
John Henry Haley, appellant, was convicted by a jury in the Circuit Court for Montgomery County of armed robbery and related counts. He was committed to the custody of the Division of Correction for a period of twenty years. The judgments of the lower court were affirmed by this Court in Haley v. State, 40 Md. App. 349, 392 A.2d 551 (1978). One of the issues raised in Haley v. State, supra, was whether appellant was present at a bench conference during voir dire examination of several prospective witnesses. Because the record was silent on this issue, we suggested that it be pursued by post conviction proceedings.
On November 22, 1978, appellant, who was then serving a term of imprisonment for an unrelated offense in the Federal Penitentiary at Lewisburg, Pennsylvania, filed a petition in the Circuit Court for Montgomery County seeking post conviction relief. On December 12, 1978, in an apparent response to appellant's petition, the State's Attorney's Office for Montgomery County filed a request for temporary custody of appellant pursuant to section 616E (a) of Article 27, which in pertinent part provides:
"(a) Presentation of request. The appropriate officer of the jurisdiction in which an untried indictment, information or complaint is pending shall be *47 entitled to have the prisoner against whom he has lodged a detainer and who is serving a term of imprisonment in any party state made available in accordance with Article V (a) hereof upon presentation of a written request for temporary custody or availability to the appropriate authorities of the state in which the prisoner is incarcerated; ..."
Appellant was returned to Montgomery County on February 6, 1979; his petition for post conviction relief was heard on March 2, 1979, and on April 16, 1979, he was granted a new trial. Pursuant to a petition filed by the State, the trial court stayed the judgment pending the outcome of the State's application for leave to appeal to this Court. On July 20, 1979, the State's application for leave to appeal was denied. Prior to commencement of the new trial, appellant filed a motion to dismiss the charges. This petition was denied. On October 9, 1979, appellant was again convicted by a jury of armed robbery and related counts. He was sentenced to a term of twenty years, consecutive to the Federal sentence he was serving.
On appeal appellant contends that because he was not brought to trial within one hundred twenty days after his arrival in Maryland from the Federal Penitentiary in Lewisburg, Pennsylvania, the lower court erred in not granting his motion to dismiss the charges. In support of this contention he relies on Article 27, section 616E (c) and (e) which provide:
"(c) Time trial to commence; continuance. In respect of any proceeding made possible by this article, trial shall be commenced within one hundred twenty days of the arrival of the prisoner in the receiving state, but for good cause shown in open court, the prisoner or his counsel being present, the court having jurisdiction of the matter may grant any necessary or reasonable continuance.
* * *
*48 (e) Dismissal of indictment, etc., on which no trial had. If trial is not had on any indictment, information or complaint contemplated hereby prior to the prisoner's being returned to the original place of imprisonment pursuant to Article V (e) hereof, such indictment, information or complaint shall not be of any further force or effect, and the court shall enter an order dismissing the same with prejudice."
As we perceive it, the narrow issue for our resolution is whether the provisions of the Interstate Agreement on Detainers Act, supra, apply to post conviction proceedings. The purpose of the Act as set forth in section 616B is as follows:
"The party states find that charges outstanding against a prisoner, detainers based on untried indictments, informations or complaints, and difficulties in securing speedy trial of persons already incarcerated in other jurisdictions, produce uncertainties which obstruct programs of prisoner treatment and rehabilitation. Accordingly, it is the policy of the party states and the purpose of this agreement to encourage the expeditious and orderly disposition of such charges and determination of the proper status of any and all detainers based on untried indictments, informations, or complaints. The party states also find that proceedings with reference to such charges and detainers, when emanating from another jurisdiction, cannot properly be had in the absence of cooperative procedures. It is the further purpose of this agreement to provide such cooperative procedures."
For cases expressing a similar purpose see Hoss v. State, 266 Md. 136, 292 A.2d 48 (1972); United States v. Mauro, 436 U.S. 340 (1978); United States v. Dixon, 592 F.2d 329 (6th Cir.1979); Esola v. Groomes, 520 F.2d 830 (3rd Cir.1975).
The purpose of this Act and section 616E (a) supra which authorized the transfer of appellant speak in terms of *49 "untried indictments, informations or complaints." At the time appellant was transferred to Maryland there were no "untried indictments, informations or complaints" pending against him. His transfer was not requested by the State for further prosecution of pending charges, but was requested for the benefit of appellant to pursue his application for post conviction relief. Although no Maryland appellate cases have considered the precise issue presented here, cases in other jurisdictions have held that the Interstate Agreement on Detainers Act does not apply to collateral proceedings. In Sable v. State of Ohio, 439 F. Supp. 905 (W.D. Okla. 1977), the court held that the Act did not apply where the basis for the detainer was a parole violator's warrant and there was no "untried indictment, information or complaint." Accord Buchmann v. Michigan Department of Corrections, 212 N.W.2d 745, 746 (Ct. App. Mich. 1973). In Suggs v. Hopper, 234 Ga. 242, 215 S.E.2d 246-247 (1975) the Supreme Court of Georgia, in holding that a detainer based on a violation of probation does not fall within the Act, said:
"The purpose of the statute is to insure speedy trial on pending charges before staleness and difficulty of proof set in. These are pre-trial, and not sentencing, considerations. Suggs' petition is without merit because the statute by its terms relates only to an `untried indictment, information or complaint,' and does not apply to warrants for arrest for probation violation."
In United States v. Dixon, 592 F.2d 329, 337 (6th Cir.1979) the court held that where a detainer was filed to allow the prisoner's counsel the opportunity to meet with him concerning certain charges, the Act was inapplicable. The court reasoned:
"It is readily apparent that the actions of the Assistant United States Attorney here do not present a potential for nor amount to an abuse of the privilege of easy prisoner access for the purpose of disposition of outstanding charges, which Article IV(c) is intended to proscribe. The issuance of the *50 September 13, 1976, writ of habeas corpus ad prosequendum was to allow appellant's counsel the opportunity to meet with his client concerning the kidnapping and air piracy charges. To allow appellant to assert the sanction of Article IV(c) under these facts would permit form to prevail over substance. The transfer of appellant in this case pursuant to a writ of habeas corpus ad prosequendum does not mandate application of a sanction, the purpose of which is to protect prisoners from the abuse of a privilege granted to prosecutors allowing them easy access to the prisoners. Application of the Article IV(e) sanction in the instant case would permit appellant a windfall benefit under circumstances not contemplated by the sanction."
We think the rationale of the cited cases from other jurisdictions applies with equal force to the present case. Consequently, we conclude that the State's request for temporary custody of appellant to allow him to pursue his petition for post conviction relief was not within the ambit of the Interstate Agreement on Detainers Act because there was no "untried indictment, information or complaint" then pending against appellant. Therefore, the lower court did not err in denying appellant's motion to dismiss the charges.
Judgments affirmed.
Costs to be paid by appellant.
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777 F.Supp. 212 (1991)
Joseph DAVID, as administrator of the Estate of Irene David, and on behalf of all others similarly situated, and Salvatore Civillo, individually and on behalf of all others similarly situated, Plaintiffs,
v.
Louis W. SULLIVAN, M.D., in his capacity as Secretary of Health and Human Services, and Group Health Incorporated, Defendants.
No. 79 Civ. 2813.
United States District Court, E.D. New York.
November 13, 1991.
*213 *214 Brown & Seymour by Whitney North Seymour, Jr., Toby Golick, Benjamin N. Cardozo Law School, New York City, for plaintiffs.
Andrew J. Maloney, U.S. Atty., E.D.N.Y. by Bruce H. Nims, Asst. U.S. Atty., Brooklyn, N.Y., for defendants.
MEMORANDUM, FINAL ORDER AND JUDGMENT
WEINSTEIN, District Judge:
After a full hearing of this matter by the court, the Magistrate Judge's recommendations and findings are adopted for the reasons stated in her Report which is attached to, and made a part of, this order.
Plaintiffs' counsel contend that the Magistrate Judge's award of fees is based on rates that are somewhat low by Manhattan standards. The fees awarded are adequate to encourage attorneys to take on the important task of policing government practices. Added to the monetary incentive is the supplemental psychic incentive of recognition for a job well done from the bar, bench, and public, and personal satisfaction for performing a valued public service. Able attorneys in metropolitan New York should be sufficiently beguiled by this package of benefits to continue to pursue public interest litigation of this kind.
This case is closed.
So ordered.
REPORT AND RECOMMENDATION
ALLYNE R. ROSS, United States Magistrate Judge.
This action began over twelve years ago when plaintiffs a class of Medicare beneficiaries who were enrolled in the supplementary medical insurance program established under Part B of the Social Security Act, 42 U.S.C. § 1395j et seq., but who had been denied reimbursement for certain medical costs sued Group Health Incorporated (GHI), the carrier which administers the program in Queens, New York, and the Secretary of Health and Human Services (HHS), who is statutorily authorized to contract with private insurance carriers to administer the Part B claims process. Plaintiffs alleged, in substance, that the "review determination notices," through which GHI supposedly informed plaintiffs of the results of the carrier's internal review of its decision to deny benefits, were inadequate. Although Judge Weinstein resolved the primary issue in 1984, ruling that these notices did not meet due process standards and ordering that they be "changed to provide claimants with comprehensible explanations of the actual reason full reimbursement is denied," David v. Heckler, 591 F.Supp. 1033, 1035 (E.D.N.Y.1984), there have been many subsequent proceedings in which details concerning this original order have been ironed out. In June 1990, plaintiffs moved, pursuant 28 U.S.C. § 2412, to recover the attorneys' fees and costs they incurred during these post-judgment proceedings. After rendering a decision as to certain aspects of this motion, Judge Weinstein referred this matter to me for a report and recommendation concerning all aspects of the fees request.
FACTS
The Procedural History
This class action, brought by plaintiffs' counsel on behalf of "hundreds of thousands of older people in Queens, New York, whose Medicare Part B claims [were] subjected to diminution," principally challenged the adequacy of notices and appeal procedures used by GHI, the insurance carrier who was authorized by HHS to administer the Part B claims process in this area. David v. Heckler, 591 F.Supp. at 1035. The dispute focused on the adequacy of GHI's "review determination notices" (also referred to as "review letters"), which are sent to beneficiaries who challenge GHI's refusal to reimburse them for certain medical costs in order to inform them of the results of GHI's internal review of its initial decision to deny benefits. This dispute was largely resolved following a 1984 bench trial before Judge Weinstein; in David v. Heckler, 591 F.Supp. 1033, the judge ruled that the review determination notices were "constitutionally inadequate" *215 in that they were "incomprehensible to most of the people who receive them" and did "not contain enough information about why reimbursement was denied and how the reimbursable amount was calculated to enable an individual or his or her representative to effectively appeal the decision." Id. at 1042. The judge also found that this lack of information pervaded all aspects of the review process, including the hearing stage, thereby presenting a due process problem which mandated certain modifications in procedures. Id. at 1046-47.
To cure these deficiencies, Judge Weinstein ordered, inter alia, that defendants re-draft the review letters so as to 1) eliminate code words and confusing language and 2) insure that they were sufficiently clear and detailed so that beneficiaries could determine whether or not their reimbursement had been calculated correctly. The judge also directed defendants to furnish plaintiffs' counsel with information necessary to ensure that the Plan B program was being properly administered. In so doing, the court praised plaintiffs' counsel efforts, noting that plaintiffs might otherwise not be represented because 1) the relatively small claims made it uneconomical for them to obtain counsel, 2) no specialized bar, such as that which has developed to effectively protect the rights of Social Security recipients, was likely to develop to protect Medicare beneficiaries, and 3) it was difficult for the elderly to organize effective private organizations with the interest and resources necessary to provide a check on the system. Judge Weinstein stated:
[O]ne organization has shown the interest and capacity necessary to investigate [Medicare violations] and obtain relief Legal Services for the Elderly. In this case the organization provided highly skilled and aggressive representation for the class through Toby Golick, Esq. in conjunction with Julia Spring Esq. and Whitney North Seymour, Esq., acting pro bono in the highest traditions of the bar. Id. at 1048.
Following this decision, plaintiffs moved for an award of attorneys' fees. This motion was withdrawn in May, 1985, however, after the parties reached an agreement on this issue. Their agreement was embodied in a stipulation, entered as an order by Judge Weinstein on May 17, 1985, which provided that plaintiffs would accept $74,500 "in full settlement and discharge of their claim for attorneys' fees and expenses under the Equal Access to Justice Act, 28 U.S.C. § 2412." The motion at bar, therefore, does not seek to recover attorneys' fees or costs related to the trial or pre-trial proceedings, but only to recover expenses relating to post-judgment proceedings which took place in 1987 and thereafter.
Plaintiffs initiated these post-judgment proceedings on April 2, 1987, by moving that defendants be held in contempt for failure to comply with the Court's original July 11, 1984, ruling. Plaintiffs alleged, inter alia, that GHI had failed to simplify the review determination notices, but that HHS's annual reviews had nonetheless found the carrier in perfect compliance with the 1984 order. While Judge Weinstein denied this motion, he directed defendants to produce the review determination letters and other data analyzed during the government's Fiscal Year (FY) 1985 and 1986 reviews.
Although the government subsequently provided plaintiffs' counsel with copies of "scoring sheets" and summaries prepared by the reviewers who evaluated GHI's performance, it could not produce the specific letters analyzed during the FY 1985 review because these were not adequately identified in the reviewer's records. Plaintiffs' counsel thereupon requested that the government repeat its FY 1985 and 1986 reviews using a new random sampling of letters, and that plaintiffs' representatives be permitted to witness the review of these letters. The government denied this request.
On July 21, 1987, plaintiffs filed a second post-judgment motion, seeking to compel production of the letters analyzed during the FY 1985 and 1986 reviews. At the September 23, 1987 oral argument on this motion, Judge Weinstein ruled that no purpose *216 would be served in repeating prior reviews, but ordered defendants to supply plaintiffs, inter alia, with copies of the 60 randomly-selected review determination notices which were reviewed as part of the FY 1987 audit.
On March 18, 1988, based on an extensive review of the letters produced by defendants, plaintiffs renewed their original motion to hold defendants in contempt, asserting that the notices produced were lacking in substantive content and thus failed to comply with the court's original ruling. At the June 27, 1988 oral argument on this motion, Judge Weinstein declined to entertain the contempt question and essentially converted the motion into a request for modification of the original decree. He then ordered defendants, inter alia, to make several alterations on the notices being used and directed the parties to develop a proposal for a system that would provide the beneficiaries with sufficient information to challenge agency determinations.
Over the next few months, plaintiffs' counsel invested substantial effort in developing a proposal for amending the Medicare Part B reimbursement review determination procedure. During this time, the parties appeared before Judge Weinstein in several proceedings pertaining to this proposal, including a September 1988 hearing at which plaintiffs adduced testimony concerning the operation and costs of the proposed system.
These efforts culminated in an Interim Order, signed by Judge Weinstein on December 21, 1988. This order denied plaintiffs' civil contempt motion, with leave to renew, but noted that "[t]he apparent failure of the defendants' actions to rectify prior defects in notice and to fully comply with directions of this Court in the Judgment previously entered necessitate[d] a more precise order to ensure adequate compliance...." The court then directed GHI to implement, for a six-month period, the proposal upon which the parties had agreed and to prepare a written report detailing the results of this test.
On June 29, 1990, following the completion of the six-month test, plaintiffs moved for a final order compelling adoption of the proposed, and recently tested, system. This motion included a request, pursuant to 28 U.S.C. § 2412, for the attorneys' fees that plaintiffs incurred as a result of the post-judgment proceedings. Defendants opposed this fee request, arguing that the plaintiffs had failed to establish, as required by statute, that they were the "prevailing party," or to submit contemporaneous time records. Plaintiffs' counsel replied to the latter argument in a Declaration of Services, dated September 4, 1990, which specified, for each attorney, the dates on which they performed certain work and the hours they expended on these tasks. In addition, this affidavit argued that plaintiffs' counsel should be permitted to recover at market rates, ranging from $350 to $275, because the government had acted in bad faith.
On September 5, 1990, Judge Weinstein entered a final order, directing defendants to comply with all terms of the original Judgment of July 11, 1984 and the Order of January 11, 1985, as set forth in the Interim Order of December 21, 1988. In the course of these proceedings, the judge rebuffed plaintiffs' suggestions that defense counsel's conduct had been improper, stating "the Government's attorneys have handled this [matter] in a perfectly responsible and straightforward way." Transcript of September 5, 1990 Proceedings, p. 7. While the judge conceded that "[t]here ha[d] been stonewalling on the part of the agency," he added, "[t]here almost always is [stonewalling] in these cases." Id. at p. 8.
The judge also ruled on some aspects of the fee request. First, he found that plaintiffs were the prevailing party in the original trial, which resulted in the July 1984 judgment, and in the subsequent contempt proceedings, which had resulted in the final order which had been signed that day. Id. at pp. 23-25. In so ruling, the judge rejected the defense claim that the contempt motions had been unnecessary, stating that he felt it was "appropriate under the circumstances for the plaintiffs to come in *217 and seek further relief"; that "plaintiffs operated in a straightforward and responsible way"; and that there was no "attempt at protracted litigation." Id., pp. 25-26.
While Judge Weinstein also stated that he was "prepared to approve" plaintiffs' request for attorneys' fees and opined that plaintiffs' request for up to $350 an hour in fees seemed reasonable, he ultimately referred this case to me for a report on fees. The judge originally envisioned a report on whether the hourly rates requested and the numbers of hours for which plaintiffs' counsel sought compensation were reasonable. When plaintiffs' counsel pressed for a definitive ruling as to whether the government's conduct was so unreasonable as to permit recovery at market rates, however, the judge requested a full exploration of the fees issue.
Subsequent to this referral, both parties have submitted papers pertaining to the fees issues. Plaintiffs seek to recover attorneys' fees from the government pursuant to both subsections (b) and (d) of 28 U.S.C. § 2412, which were enacted in 1980 as part of the Equal Access to Justice Act (EAJA). First, plaintiffs seek to fit this case within subsection (b) which subjects the federal government and its agents to the common law and statutory exceptions to the "American rule" (requiring that each party pay its own attorneys' fees) claiming that the government acted in bad faith and should be liable for plaintiffs' attorneys' fees under the common law "bad faith exception." Alternatively, plaintiffs seek damages under subsection (d), which provides that a prevailing party in a civil action brought against the United States may recover its "fees and other expenses" from the government "unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). Recognizing that the term "fees and other expenses," as defined in this subsection, restricts attorneys' fees to "$75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee," 28 U.S.C. § 2412(d)(2)(A)(ii), plaintiffs argue both that the government's position was not substantially justified and that a "special factor" exists which justifies awarding fees at market rate.
Defense counsel not only controvert plaintiffs' arguments on the bad faith, substantial justification and special factor issues, but also assert that attorneys' fees should not be awarded for other reasons. First, defendants argue that the May 17, 1985 stipulation, in which plaintiffs agreed to accept $74,500 in "full settlement and discharge of their claim for attorneys' fees and expenses under the Equal Access to Justice Act, 28 U.S.C. § 2412," unambiguously precludes plaintiffs' current motion for fees. Second, defendants contend that, pursuant to New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir.1983), this court should decline to award fees unless plaintiffs can produce contemporaneous time records.
The issues raised in the parties' papers are set forth in detail in the discussion below.
DISCUSSION
The Effect of the April 1985 Stipulation
Defendants initially argue that the terms of an April 2, 1985 stipulation, which embodied the settlement of plaintiffs' initial motion to recover fees incurred before and during the trial, precludes this court from awarding attorneys' fees upon the instant motion. Asserting that the principles governing the construction of contracts are applicable to stipulations, which they characterize as binding contracts between the parties, defendants argue that this court should enforce the unambiguous terms of the stipulation and should not consider extrinsic evidence. Defendants argue that the stipulation's terms, under which plaintiffs agree to accept $74,500 "in full settlement and discharge of their claim for attorneys' fees and expenses under the Equal Access to Justice Act," unambiguously precludes the plaintiffs from seeking additional fees under the EAJA. Plaintiffs, *218 however, contend that the stipulation merely settled plaintiffs' claim for attorneys' fees incurred during the trial phase of the litigation, noting that post-judgment proceedings were not even contemplated at the time the stipulation was signed.
Even accepting, arguendo, defendants' contention that this court should enforce the unambiguous terms of the stipulation, I cannot concur with their assertion that the stipulation unambiguously bars this action. To the contrary, the language of the stipulation clearly provides that plaintiffs were to receive $74,500 to settle their pending claim for attorneys' fees and expenses i.e., the claim for fees and expenses incurred before and during trial. Neither the terms of the stipulation nor any extrinsic evidence suggests that this document was intended to have a preclusive effect on subsequent claims seeking to recover attorneys' fees incurred years after the stipulation.
Plaintiffs' Claim that the Defendants Acted in "Bad Faith"
In the papers filed prior to the September 5, 1990 oral argument and at the argument itself, plaintiffs sought to recover "market rate" attorneys' fees under the "bad faith exception" to the American Rule one of the "common law exceptions" to which the government is subjected by operation of 28 U.S.C. § 2412(b). Plaintiffs contend that defendants have "thumbed their noses" at Judge Weinstein's July 1984 order; they assert that HHS did nothing more than revise some pages in its Medicare Carriers Manual, then deliberately overlooked GHI's disregard of these changes. Defendants, who characterize plaintiffs' contempt motions as frivolous, respond by arguing that plaintiffs' evidence falls far short of the "extraordinary showing" required to invoke the bad faith exception.
An award of attorneys' fees under the bad faith exception is punitive and is to be granted "only in exceptional cases and for dominating reasons of justice." Barry v. Bowen, 825 F.2d 1324, 1333 (9th Cir.1987), quoting other Ninth Circuit authority quoting 6 J. Moore, Moore's Federal Practice, ¶ 54.77[2] (2d ed. 1972). The Second Circuit has held that "an award of fees under the bad faith exception is warranted when `the losing party's claims were "entirely without color and made for reasons of harassment or delay or for other improper purposes."'" Wells v. Bowen, 855 F.2d 37, 46 (2d Cir.1988), quoting Sierra Club v. United States Army Corps of Engineers, 776 F.2d 383, 390 (2d Cir.1985), cert. denied sub nom. New York State Dept. of Transp. v. Sierra Club, 475 U.S. 1084, 106 S.Ct. 1464, 89 L.Ed.2d 720 (1986), quoting Browning Debenture Holders' Committee v. DASA Corp., 560 F.2d 1078, 1088 (2d Cir.1977). While the requisite bad faith may be found in the actions which led to the litigation, as well as in the conduct of the litigation itself, Hall v. Cole, 412 U.S. 1, 15, 93 S.Ct. 1943, 1951, 36 L.Ed.2d 702 (1973), the plaintiff bears the burden in either event of establishing both meritlessness and improper purpose. See Barry v. Bowen, 825 F.2d at 1333; Wells v. Bowen, 855 F.2d at 46.
Plaintiffs in this case have failed to establish an improper purpose underlying either the government actions or inaction which prompted the contempt motions or defense counsel's conduct during those motions. Indeed, at the September 5, 1990 oral argument, Judge Weinstein himself discounted suggestions that government attorneys' had acted improperly, opining, on the basis of the information before him, that defense counsel had handled the post-judgment proceedings "in a perfectly responsible and straightforward way." Moreover, while the judge also noted that "[t]here ha[d] been stonewalling on the part of the agency," he declined to hold the government in contempt of his July 1984 order. His subsequent observation that "[t]here almost always is [stonewalling] in these cases" suggests that the government's inaction was due to bureaucratic inertia rather than any improper purpose. Since plaintiffs' papers do not contain additional, convincing evidence of defendants' bad faith, the bad faith exception should not be applied in this case.
*219 Plaintiffs' Claim for Market Rate Fees under § 2412(d)
Following the September 5, 1990 oral argument, plaintiffs advanced, for the first time, an argument for recovering market rate fees under § 2412(d). In order to recover market rates under this theory, however, plaintiffs must establish 1) that the government's position was not "substantially justified" and 2) that there exists a "special factor" that justifies an hourly rate in excess of $75 per hour.
The Question of Substantial Justification
The EAJA was enacted, in part, to ensure that litigants would "not be deterred from seeking review of, or defending against, unjustified governmental action because of the expense involved in securing the vindication of their rights." House Report No. 99-120, Part 1, p. 4, reprinted in 1985 U.S.Code Cong. & Admin.News, pp. 132-33. Subsection (d) effectuates this purpose by providing that, "unless the court finds that the position of the United States was substantially justified," parties which prevail in civil actions brought by or against the United States government shall be awarded "fees and other expenses" incurred during the action. 28 U.S.C. § 2412(d)(1)(A).
The Second Circuit has long interpreted the term, "substantially justified," as essentially imposing a standard of reasonableness. Cohen v. Bowen, 837 F.2d 582, 586 (2d Cir.1988), citing Environmental Defense Fund, Inc. v. Watt, 722 F.2d 1081, 1085 (2d Cir.1983), and Sierra Club v. United States Army Corps of Engineers, 776 F.2d at 393. This interpretation shared by every other circuit except the District of Columbia was essentially adopted in Pierce v. Underwood, 487 U.S. 552, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988), which defined the term to mean "justified to a degree that could satisfy a reasonable person." Id., 108 S.Ct. at 2550.
Although defendants quote Judge Weinstein's statement that defense counsel handled this litigation in "a perfectly responsible and straightforward way" and argue that the government's positions in this action have always been reasonable, these arguments inappropriately focus on the government's conduct in court rather than the conduct which gave rise to the post-judgment motions in the first place. The purpose behind subsection (d) is to prevent litigation expenses from deterring those who would otherwise seek review of unjustified government actions; accordingly, the focus of the inquiry in this case should be the government's efforts to comply with Judge Weinstein's July 1984 order.
In this case, I cannot find that the government's actions in this case were "substantially justified," since the government failed to effect independently the changes in procedure which were mandated by the court's July 1984 judgment. The interim order, signed by Judge Weinstein on December 21, 1988, stated that "[t]he apparent failure of the defendants' actions to rectify prior defects in notice and to fully comply with directions of this Court in the Judgment previously entered necessitate[d] a more precise order to ensure adequate compliance...." Moreover, in entering the final order, the judge expressly rejected the defense claim that plaintiffs' contempt motions had been unnecessary, stating that it was "appropriate under the circumstances for the plaintiffs to come in and seek further relief." Since the government's inaction necessitated the post-judgment proceedings for which plaintiffs now seek attorneys' fees, the purpose underlying the EAJA dictates that plaintiffs be permitted to recover "fees and other expenses" under subsection (b).
The Question of Special Factors
The "fees and other expenses" which plaintiffs may recover under subsection (b), however, are ordinarily limited to $75 per hour by operation of 28 U.S.C. § 2414(d)(2)(A). This provision defines the term "fees and other expenses" to include "reasonable attorneys fees," but dictates that "attorney fees shall not be awarded in excess of $75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." 28 U.S.C. § 2412(d)(2)(A)(ii). Thus, *220 in order to recover at rates above $75 per hour, plaintiffs must establish that a "special factor" exists.
As recently as 1988, the Supreme Court addressed the question of what constitutes a "special factor" for purposes of this statute specifically considering the example suggested by Congress a "limited availability of qualified attorneys for the proceedings involved." In Pierce v. Underwood, 487 U.S. 552, 108 S.Ct. 2541, the Court ruled that Congress had not meant to communicate, through this example, that the $75 cap should be lifted whenever "lawyers skilled and experienced enough to try the case [were] in short supply." Recognizing that such an interpretation would eviscerate the $75 cap by defining "special factor" in terms of the supply considerations driving market rates, the Court interpreted the Congressional language narrowly, stating:
[T]he exception for "limited availability of qualified attorneys for the proceedings involved" must refer to attorneys "qualified for the proceedings" in some specialized sense, rather than just in their general legal competence. We think it refers to attorneys having some distinctive knowledge or specialized skill needful for the litigation in question as opposed to an extraordinary level of the general lawyerly knowledge and ability useful in all litigation. Examples of the former would be an identifiable practice specialty such as patent law, or knowledge of foreign law or language. Where such qualifications are necessary and can be obtained only at rates in excess of the $75 cap, reimbursement above that limit is allowed. Id., 108 S.Ct. at 2554.
In urging that a "special factor" exists in this case, plaintiffs primarily seek to analogize this case to Pirus v. Bowen, 869 F.2d 536 (9th Cir.1989). In that case, a district court had permitted recovery in excess of the $75 cap by attorneys who had represented the plaintiff class in an action involving the "widow's insurance" provisions of the Social Security Act and who had previously taken a similar class action all the way to the Supreme Court. Although the district court's decision preceded the Supreme Court's 1988 opinion in Underwood, the Ninth Circuit upheld the lower court's ruling as "based on the same kind of factors as the Underwood court identified." Id. at 542. First, the Ninth Circuit found that plaintiffs' counsel had "distinctive knowledge or specialized skill" in social security law, having developed expertise and skills which were "in many ways akin to those developed by a patent lawyer: expertise with a complex statutory scheme; familiarity and credibility with a particular agency; and understanding of the needs of a particular class of clients ... and of how those needs could best be met under the existing statute and regulations." Second, the circuit court found that the attorneys' special expertise was necessary because "the litigation involved a highly complex area of the Social Security Act, with which plaintiffs' attorneys had already developed familiarity and expertise." Third, the Ninth Circuit concluded that the requisite skills could not be obtained elsewhere at the statutory rate, relying on the district court's determination "that there were no lawyers in the Los Angeles area besides Pirus' attorneys who possessed the skills necessary ... and who would take the case for $75 an hour." Id.
Defendants seek to distinguish this case from Pirus on at least two grounds. First, defendants suggest that Pirus is somehow distinguishable by virtue of "the unusual and seemingly persuasive circumstance that plaintiff's attorneys had litigated a virtually identical case all the way to the Supreme Court and, arguably had unique experience with litigation concerning one discrete aspect of widow's insurance benefits." AUSA Nims' letter of July 24, 1991, p. 3. Second, they argue that the skills provided by plaintiffs' counsel in this case are readily available at the $75 rate in New York City, requesting that this court take judicial notice of the "quite numerous" class actions challenging HHS regulations and procedures which have been brought here and in the Southern District of New York by public interest law organizations.
These efforts to distinguish Pirus are not only unpersuasive, but in the case of *221 defendants' first argument actually highlight the similarities between that case and this. First, it appears uncontroverted that plaintiffs' attorneys have "distinctive knowledge or specialized skill" in medicare cases, having developed expertise with a complex statutory scheme, a familiarity with an agency, and an understanding of the needs of the elderly which is similar to that developed by the social security practitioners in Pirus. Second, while counsel in Pirus had previously litigated a virtually identical case involving the same issue, plaintiffs' attorneys in this case had previously argued the exact same case at trial an experience which afforded them the unique familiarity with its procedural history and the knowledge of legal issues which was essential to the post-judgment proceedings. Third, defendants' claim that many other public interest organizations might have originally brought this action is undercut by Judge Weinstein's observation that only "one organization ... show[ed] the interest and capacity necessary to investigate and obtain relief." David v. Heckler, 591 F.Supp. at 1048. Moreover, even assuming that other organizations are now available to bring a similar action, plaintiffs' counsel were nonetheless uniquely suited to handle the post-judgment proceedings in this action efficiently in light of the highly-specialized legal and factual knowledge necessary to undertake them. Accordingly, I conclude that here, as in Pirus, plaintiffs have established there was a "limited availability of qualified attorneys for the proceedings involved" a "special factor" which justifies the recovery of reasonable attorneys' fees in excess of $75 per hour.
The Reasonableness of Plaintiffs' Fee Requests
While the determination that a "special factor" exists permits attorneys' fee awards in excess of the $75 cap, this does not entitle plaintiffs to recover fees at market rates, but to recover "reasonable attorneys fees." "What fee is reasonable is determined by `the prevailing market rates in the relevant community' for `similar services by lawyers of reasonable skill, experience and reputation.'" Huntington Branch NAACP v. Town of Huntington, 749 F.Supp. 62, 64 (E.D.N.Y.1990), quoting Blum v. Stenson, 465 U.S. 886, 895-96 & n. 11, 104 S.Ct. 1541, 1547-48 & n. 11, 79 L.Ed.2d 891 (1984). The "relevant community" is the district in which the district court sits, unless a showing is made that special expertise of counsel from a distant district was required. Huntington Branch NAACP v. Town of Huntington, 749 F.Supp. at 64, citing Polk v. New York State Dept. of Correctional Services, 722 F.2d 23, 25 (2d Cir.1983). The amount to be awarded, however, is not "the highest rate which the attorneys can earn, but such rate as will provide `reasonable payment for the time and effort expended.'" Huntington Branch NAACP v. Town of Huntington, 749 F.Supp. at 65, quoting Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 726, 107 S.Ct. 3078, 3087, 97 L.Ed.2d 585 (1987).
Although plaintiffs have not cited any instances in which recovery in excess of $250 has been permitted by court in this district, they request that the four attorneys who represented them in this matter be compensated at rates ranging from $350 to $275 per hour. First, they request that Whitney North Seymour, Jr. a named partner in a Manhattan law firm and a former U.S. Attorney for the Southern District of New York, who has handled many cases involving Medicare issues be awarded $350 per hour, the rate he charges private clients. Second, they seek $275 per hour for the services of Toby Golick, a clinical professor at Cardozo Law School, and Julia Spring, an associate clinical professor at Columbia Law School both of whom have considerable experience in this area of law. Third, plaintiffs also seek $275 per hour for the services of Craig Landy who appears to have practiced in this area for five or six years and to be associated with Mr. Seymour's firm. While there is no doubt as to the high quality of these attorneys, whom Judge Weinstein commended for providing "highly skilled and aggressive representation," David v. Heckler, 591 F.Supp. at 1048, I concluded that the requested rates are excessive.
*222 In his October 1990 opinion in Huntington Branch NAACP v. Town of Huntington, 749 F.Supp. 62, Judge Glasser surveyed recent attorneys' fees cases in this district and concluded that lead attorneys have rarely, if ever, been awarded fees in excess of $250 per hour. Id. at 64. Moreover, in discussing the only case he cited in which $250 was recovered Palermo v. Board of Educ., No. CV-87-2960 (E.D.N.Y. April 3, 1989) (available on West-law at 1989 WL 35938) Judge Glasser was careful to note that the $250 rate applied only to 18 hours logged by a senior partner; the remainder of the over 200 hours expended in the litigation was logged by associates who were compensated at the much lower rate of $125 per hour. Id. at 64-65. Judge Glasser did not conduct a similar analysis of the rates awarded associates, but cited to a February 1990 survey by the Suffolk Lawyer which concluded that associates earned $100 to $150 per hour.
In light of Judge Glasser's findings and the skill, experience and reputation of Mr. Seymour, I conclude that $250 per hour is reasonable compensation for his services. Since there is nothing to suggest that Ms. Golick is any less skilled in this area than Mr. Seymour, she too should receive $250 per hour. Indeed, this is the precise amount Ms. Golick was awarded in a recent social security case in the Southern District of New York. Hinton v. Sullivan, slip op. at 14, No. 84 Civ. 9276 (CES), 1991 WL 123960 (S.D.N.Y. July 2, 1991) (available on Westlaw at 1991 WL 123960). Ms. Spring, who was an associate professor at the time of the post-judgment proceedings, appears slightly less experienced than Ms. Golick and should be reasonably compensated by $200 per hour. Finally, Mr. Landy, who appears to perform the duties of a senior associate at Mr. Seymour's office, should receive $150.
The Effects of the Failure to Produce Contemporaneous Time Records
A final issue must be resolved prior to determining the hours expended by plaintiffs' counsel and calculating the award: defendants' claim that plaintiffs have failed to produce contemporaneous time records a prerequisite for recovering attorneys' fees in this Circuit. Plaintiffs' counsel have submitted typewritten records, which they refer to as "transcriptions of contemporaneous time records," Plaintiffs' Reply Memorandum, p. 11, and which indicate, for each attorney, the dates on which they performed certain work and the hours they expended on these tasks. Defendants, however, allege that these do not constitute the requisite contemporaneous time records in that they are not the original records, asserting that the production of the "actual time records" is "particularly necessary" here for two reasons. First, they allege that the documents contain "numerous inaccuracies," but identify only one supposed error: entries alleging that, in April 1987, Ms. Golick and Ms. Spring labored three and two hours, respectively, to assist in preparation of a contempt motion which was filed on April 1, 1987. Second, defendants complain that many of the entries are insufficiently specific in that they give a range of dates over which certain work was accomplished. Defendants request that this court either refrain from awarding any fees until these records are produced or reduce the compensable hours by the time it took to prepare this fees application.
In New York Ass'n for Retarded Children v. Carey, 711 F.2d 1136, the Second Circuit ruled:
[A]ny attorney whether a private practitioner or an employee of a nonprofit law office who applies for court-ordered compensation in this Circuit for work done after the date of this opinion must document the application with contemporaneous time records. These records should specify, for each attorney, the date, the hours expended, and the nature of the work done. Id. at 1148.
The reasoning behind this rule is that "courts should not be faced with an impossible chore when making fee determinations, and that lawyers should not be required to expend even more hours reconstructing the past in assembling fee applications." Carrero v. New York City *223 Housing Authority, 685 F.Supp. 904, 909 (S.D.N.Y.1988), aff'd, 890 F.2d 569 (2d Cir. 1989). Attorney affidavits which set forth all charges with the required specificity but which are reconstructions of the contemporaneous records satisfy the rationale underlying Carey and suffice to permit recovery of attorneys' fees. See Carrero v. New York City Housing Authority, 685 F.Supp. 904; Johnson v. Kay, 742 F.Supp. 822, 837 (S.D.N.Y.1990). In such cases, however, courts frequently deny fees for the time spent preparing the fee application as "an appropriate and necessary penalty for omitting to include the time records." Lewis v. Coughlin, 801 F.2d 570, 577 (2d Cir.1986), see Carrero v. New York City Housing Authority, 685 F.Supp. at 909; Johnson v. Kay, 742 F.Supp. at 837.
Where the records submitted are merely typewritten transcriptions of the original handwritten time sheets filled out by the attorneys, on the other hand, these have been treated as contemporaneous records and no such penalty has been imposed. Lenihan v. City of New York, 640 F.Supp. 822 (S.D.N.Y.1986). As the Lenihan court noted, these records are essentially identical to the familiar computerized transcriptions of the billing records which most large law firms now store in computers. Id. at 824. The court implicitly recognized that it would make no sense to penalize a party for attempting to present the contemporaneous records in a form convenient to the court.
In this case, plaintiffs' counsel claim that the typewritten records which they have appended to their September 4, 1990 "Declaration of Services" are "transcriptions of contemporaneous time records." Defendants have not suggested any reason to question plaintiffs' claim. Moreover, since defendants have not adduced any convincing evidence that these transcriptions are inaccurate, I see no reason to examine the original time slips. Although it is clear that the records were transcribed in a manner that consolidated certain entries e.g., stating that Ms. Golick spent 3.5 hours reviewing a government memorandum and preparing a reply declaration sometime between September 1 and 11, 1987 rather than specifying the precise dates on which the work took place and leaving it to this court to perform its own calculations, the purpose underlying the Carey requirement would certainly not be served by penalizing plaintiffs for attempting to present the contemporaneous records in a form convenient to the court.
The Calculation of the Fees
With all the substantive issues in this case resolved, all that remains to be done is the arithmetic. I have reviewed plaintiffs' counsel's time records and conclude that the hours requested appear reasonable in light of the tasks on which the hours were expended. Accordingly, I recommend that attorneys' fees be awarded as follows:
Attorney Hours Rate Total
Mr. Seymour 98.5 $250 $24,625
Ms. Golick 82.35 $250 $20,587.50
Ms. Spring 19.95 $200 $ 3,990.
Mr. Landy 101.66 $150 $15,249.
Any objections to this Report and Recommendation must be filed with the Clerk of the Court within 10 days of receipt of this report. Failure to file objections within the specified time waives the right to appeal the district court's order. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.Pro. 6(a), 6(e); Small v. Secretary of Health and Human Services, 892 F.2d 15, 16 (2d Cir.1989).
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777 F.Supp. 750 (1991)
John G. SMITH, et al., Plaintiffs,
v.
GENELCO, INC., et al., Defendants.
No. 90-1714C(1).
United States District Court, E.D. Missouri, E.D.
June 10, 1991.
*751 Nicholas Higgins, Whaley, Higgins & Associates, Clayton, Mo., for plaintiffs.
Timothy Kellett, Armstrong, Teasdale, Schlafly, Davis & Dicus, St. Louis, Mo., for defendants.
MEMORANDUM
NANGLE, District Judge.
Plaintiffs John Smith, Linda Allen (Smith's legal guardian), St. Louis University, and SSM Health Care, brought this claim under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., and the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), 29 U.S.C. § 1161 et seq. (West Supp.1991), seeking to recover $122,140.74 in health insurance benefits, and to recover statutory damages under ERISA for defendants' alleged failure to provide plaintiff John Smith with required information under COBRA and ERISA. The case is before the Court on plaintiffs' and defendants' cross motions for summary judgment.
I. BACKGROUND
Defendant Paulo Products Company ("Paulo") is a corporation with its principal place of business located in the City of St. Louis. Plaintiff John G. Smith ("Smith") was employed by Paulo from September 8, 1988 through April 13, 1989. Smith voluntarily resigned his employment with Paulo in order to take another job.
At all relevant times during his employment with Paulo, Smith was a member in good standing of the International Brotherhood of Boilermakers and Iron Ship Building, Blacksmiths, Forgers and Helpers, Local No. 27, AFL-CIO (the "Union"). A collective bargaining agreement (the "Agreement") was in effect between Paulo and the Union at all times during Smith's employment. The Agreement stated that Paulo would provide a medical/employee benefits plan to the Union workers by paying the cost of the medical plan and by providing benefits to the Union employees equivalent to those provided by the medical/employee benefits plan currently in place for Paulo's non-union employees. The Agreement relevant to this action was in effect from January 13, 1986 to January 12, 1989, and was renewed, to be effective January 13, 1989 to January 12, 1992.
At all relevant times, Paulo sponsored the Paulo Products Company Group Health Care Plan (the "Plan") which was self-funded by Paulo. The Plan covered union and non-union employees. Defendant Genelco, Inc. ("Genelco"), provided administrative services on behalf of Paulo pursuant to a written agreement. At all relevant times, B. Franklin Rassieur, Jr. ("Rassieur") was the Administrator of the plan.
On July 3, 1989, nearly three months after Smith's last day in Paulo's employ, Smith was seriously injured in an automobile accident. Approximately three weeks after this accident, Sharon S. Nelson ("Nelson"), a Paulo employee and the benefits *752 administrator at Paulo, received a phone call from Smith's stepfather. He inquired whether there were any medical benefits available for Smith through Paulo's Plan under COBRA, which might pay for the medical treatment that had already been provided to Smith by the hospital plaintiffs, St. Louis University and SSM Health Care.
Through an administrative error, Nelson instructed Genelco to mail a notice to Smith stating that he was eligible to elect to continue his group health insurance coverage under the Plan because of the requirements of COBRA. Subsequently, premium payments were made on behalf of Smith to Genelco. When Rassieur learned of the foregoing, he determined that Smith had erroneously been offered COBRA coverage and notified Smith's guardian in writing of his decision.
Rassieur's decision was based upon his interpretation of the effective date of COBRA for group health plans maintained pursuant to a collective bargaining agreement. The Agreement discussed above was in effect on the date of COBRA's enactment, April 7, 1986. The Agreement was ratified on January 13, 1986, and did not expire until January 12, 1989. Rassieur interpreted COBRA to take effect and modify the Plan, as applied to Union employees under the Agreement, as of January 1, 1990, the first day of the first Plan year following January 12, 1989. Plaintiffs believe that COBRA took effect earlier, and that Smith was entitled to the option of continuing his coverage under the Plan, and defendants were obligated to timely provide him with notice of these rights under COBRA and ERISA.
II. SUMMARY JUDGMENT STANDARDS
In determining whether summary judgment should issue, the facts and inferences from these facts are viewed in the light most favorable to the non-moving party and the burden is placed on the moving party to establish both the absence of a genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Once the moving party has met this burden, however, the non-moving party may not rest on the allegations in its pleadings but by affidavit and other evidence must set forth specific facts showing that a genuine issue of material fact exists. Fed. R.Civ.P. 56(e). See also 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2739 (1983).
Recently, the Supreme Court noted that: "Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the federal rules as a whole, which are designed to `secure the just, speedy and inexpensive determination of every action'." Celotex, 477 U.S. at 327, 106 S.Ct. at 2555 (quoting Fed.R.Civ.P. 1). Thus, the non-moving party "must do more than show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, 106 S.Ct. at 1356. "Where the record as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial'." Id. at 587, 106 S.Ct. at 1356. The Eighth Circuit has acknowledged that the "trilogy of recent Supreme Court opinions" demonstrates that the courts should be "more hospitable to summary judgments than in the past" and that a motion for summary judgment "can be a tool of great utility in removing factually insubstantial cases from crowded dockets, freeing courts' trial time for those cases that really do raise genuine issues of material fact." City of Mt. Pleasant, Iowa v. Associated Electric Cooperative, Inc., 838 F.2d 268, 273 (8th Cir.1988).
III. DISCUSSION
A. The Effective Date of COBRA
COBRA was enacted on April 7, 1986. Section 10002 of COBRA amended the ERISA statute, see Pub.L. 99-272 § 10002, *753 100 Stat. 82, 227, reprinted at 1986 U.S.Code Cong. & Ad.News, Vol. 1, at 227, and was codified at 29 U.S.C. § 1161 et seq. (West Supp.1991). Section 10002 manifests the intention of Congress to insure that employees once covered under an employer sponsored employee health care plan will be afforded the option to maintain coverage until such time as they come under the coverage of another employer's medical benefits plan.
Section 10002(d) of COBRA, entitled "Effective Dates" states:
(1) General Rule. The Amendments made by this section shall apply to plan years beginning on or after July 1, 1986.
(2) Special Rule for Collective Bargaining Agreements. In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of enactment of the enactment of this Act [April 7, 1986], the amendments made by this section shall not apply to plan years beginning before the later of
(A) the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or
(B) January 1, 1987.
For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement.
100 Stat. 231-232; 1986 U.S.Code Cong. & Ad.News, Vol. 1, at 231-232; See also 29 U.S.C. § 1161, Hist. & Stat.Notes (West Supp.1991).
Defendants have interpreted this section to mean that COBRA does not apply to Paulo's Union employees covered under the Plan by the terms of the Agreement, until January 1, 1990. This calculation is based on the fact that the collective bargaining Agreement was ratified on January 13, 1986, and therefore was in effect on the date of enactment of COBRA, April 7, 1986. The Agreement continued in effect until January 12, 1989. The Plan under the Agreement ran from calendar year to calendar year, so the first day of the Plan year following the termination of the collective bargaining Agreement was January 1, 1990, and therefore it was on this date that COBRA fully applied to both Union and non-union employees under the Paulo Plan, requiring defendants to afford Union employees the option of maintaining health coverage under the Plan.
The Court agrees with defendants' interpretation of the effective date of COBRA in this matter. Plaintiff Smith was not employed at Paulo and was not covered by the Plan at the time that COBRA became effective as pertains to Union employees covered by the Paulo Plan. Plaintiffs seek to enforce the COBRA amendments to ERISA against defendants, but these amendments were not yet in force when plaintiff Smith left Paulo in April 1989 in order to seek other employment.
B. Plaintiffs' Cause of Action
The Court has determined that plaintiffs have no cause of action under the COBRA amendments to ERISA because these amendments had not yet taken effect as to Paulo's Union employees covered by the group health plan maintained pursuant to its collective bargaining agreement with Smith's Union. The Court does not reach the issue of the proper standard of review of the decision of the Plan's Administrator, Rassieur, to deny plaintiff Smith coverage under the Plan, because the Court finds that this decision was fully supported by Section 10002(d) of COBRA, and therefore survives scrutiny under an arbitrary and capricious standard of review, See Lakey v. Remington Arms Co., 874 F.2d 541 (8th Cir.1989), as well as under a de novo review. Nor does the Court reach the issue of whether plaintiffs have exhausted their administrative remedies as required by ERISA, in that the Court has chosen to *754 proceed directly to the merits for the disposition of this matter.
Plaintiffs further argue that defendants waived the provisions under Section 10002(d) of COBRA setting forth the effective date of the COBRA amendments by amending the terms of the Paulo Plan so as to reflect the COBRA amendments to ERISA. The Court finds nothing of merit in this argument. The amendment in question, Amendment 7 to Article 3 of the Plan, See Deft's Exh. A1, Art. 3, Section D and Amendment 7, does not state that all Union employees of Paulo will be treated the same as non-union employees, and will be afforded the right to continuation of coverage at the same time as non-union employees. Furthermore, the Administrator has uniformly interpreted and applied the Plan so as not to extend continuation of coverage to Union employees in Smith's situation, who left or were terminated from Paulo's employ before the effective date of the COBRA amendments. See Rassieur Affidavit and Rassieur Supp. Affidavit.
Plaintiffs also argue that Nelson's administrative error in sending Smith an election form for the continuation of coverage under the Plan somehow worked as an offer by Paulo to continue coverage for Smith's benefit, which Smith could "accept" by executing this mistakenly mailed election form. The Court draws guidance from the opinion of the Court of Appeals for the Fifth Circuit in Brock v. Primedica, Inc., 904 F.2d 295 (5th Cir.1990), in finding that such error cannot be construed as waiving, modifying or creating rights that have not been extended under the terms of the employee health care plan as it has been interpreted by its administrator. Smith was ineligible to receive continuation of coverage under this group health plan maintained pursuant to the collective bargaining agreement, and it was purely an administrative error that led plaintiffs to believe that Smith could elect to continue his coverage. This error will not be construed by the Court as an offer which Smith could accept to bind over coverage under Paulo's Plan.
IV. CONCLUSION
Therefore, for the reasons stated above, the Court grants defendants' cross motion for summary judgment and denies plaintiffs' cross motion for summary judgment. Judgment be and is entered in favor of defendants and against plaintiffs on Counts I and II of plaintiffs' amended petition.
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777 F.Supp. 1475 (1991)
Freeman McNEIL, Mark Collins, Lee Rouson, Niko Noga, Don Majkowski, Dave Richards, Irvin Eatman and Tim McDonald, Plaintiffs,
v.
NATIONAL FOOTBALL LEAGUE, the Five Smiths, Inc., d/b/a Atlanta Falcons; Buffalo Bills, Inc., d/b/a Buffalo Bills; Chicago Bears Football Club, Inc., d/b/a Chicago Bears; Cincinnati Bengals, Inc., d/b/a Cincinnati Bengals; Cleveland Browns, Inc., d/b/a Cleveland Browns; the Dallas Cowboys Football Club, Ltd., d/b/a Dallas Cowboys; PDB Sports, Ltd., d/b/a Denver Broncos; the Detroit Lions, Inc., d/b/a Detroit Lions; the Green Bay Packers, Inc., d/b/a Green Bay Packers; Houston *1476 Oilers, Inc., d/b/a Houston Oilers; Indianapolis Colts, Inc., d/b/a Indianapolis Colts; Kansas City Chiefs Football Club, Inc., d/b/a Kansas City Chiefs; the Los Angeles Raiders, Ltd., d/b/a Los Angeles Raiders; Los Angeles Rams Football Company, Inc., d/b/a Los Angeles Rams; Miami Dolphins, Ltd., d/b/a Miami Dolphins; Minnesota Vikings Football Club, Inc., d/b/a Minnesota Vikings; KMS Patriots Limited Partnership, d/b/a New England Patriots; the New Orleans Saints Limited Partnership, d/b/a New Orleans Saints; New York Football Giants, Inc., d/b/a New York Giants; New York Jets Football Club, Inc., d/b/a New York Jets; the Philadelphia Eagles Football Club, Inc., d/b/a Philadelphia Eagles; B & B Holdings, Inc., d/b/a Phoenix Cardinals, Pittsburgh Steelers Sports, Inc., d/b/a Pittsburgh Steelers; the Chargers Football Company, d/b/a San Diego Chargers; the San Francisco Forty-Niners, Ltd., d/b/a San Francisco 49ers; the Seattle Professional Football Club, Ltd., d/b/a Seattle Seahawks; Tampa Bay Area NFL Football Club, Inc., d/b/a Tampa Bay Buccaneers; Pro-Football, Inc., d/b/a Washington Redskins; Defendants.
The FIVE SMITHS, INC., et al., Plaintiffs,
v.
NATIONAL FOOTBALL LEAGUE PLAYERS ASSOCIATION, Defendant.
Civ. Nos. 4-90-476, 4-90-261.
United States District Court, D. Minnesota, Fourth Division.
November 21, 1991.
*1477 Edward M. Glennon, Carol T. Rieger, Luke H. Terhaar, Charles J. Lloyd and Lindquist & Vennum, Minneapolis, Minn., Jeffrey L. Kessler, James W. Quinn, Craig Allely, Daniel Rubin and Weil, Gotshal & Manges, New York City, for plaintiffs.
James Fitzmaurice, Patrick J. Schiltz and Faegre & Benson, Minneapolis, Minn., John H. Schafer, Herbert Dym, Jeffrey Pash, Neil Roman, Richard W. Buchanan and Covington & Burling, Washington, D.C., Frank Rothman, and Skadden, Arps, Slate, Meagher & Flom, Los Angeles, Cal., and Shepard Goldfein, and Skadden, Arps, Slate, Meagher & Flom, New York City, for defendants.
ORDER
DOTY, District Judge.
This matter is before the court on a motion to supplement the record made by the plaintiffs in Five Smiths and the defendants in McNeil ("the NFL parties"). Based on a review of the file, record and proceedings herein, the court denies the NFL parties' motions.
BACKGROUND
In an order in the McNeil case dated May 23, 1991, the court held that the National Football League Players Association ("NFLPA") no longer functioned as a collective bargaining representative for the NFL players and thus the nonstatutory labor exemption ended. 764 F.Supp. 1351, 1358-59 (D.Minn.1991).[1] The NFL parties move to supplement the record in McNeil and Five Smiths with evidence allegedly obtained after that order which, they contend, will demonstrate that the NFLPA continues to bargain with the NFL teams *1478 on behalf of the players and that a majority of players support that representation.[2]
DISCUSSION
The NFL parties move to supplement the record pursuant to Federal Rules of Civil Procedure 60(b).[3] In order to justify Rule 60(b) relief, the moving party bears the burden of establishing that:
1. The evidence is actually "newly discovered";
2. The movant exercised due diligence;
3. The evidence is material, not merely cumulative or impeaching; and
4. The evidence would probably produce a different result. See, e.g., Peterson by Peterson v. General Motors Corp., 904 F.2d 436, 440 (8th Cir.1990). Such relief is within the trial court's discretion. See, e.g., Jacobs v. DeShetler, 465 F.2d 840, 843 (6th Cir.1972). A party may also supplement the record after summary judgment has been granted if "the evidence is of such a character that it would probably change the outcome of the proceedings." Fernhoff v. Taho Regional Planning Agency, 622 F.Supp. 121, 122 (D.Nev.1985) (citations omitted) (applying that standard to deny motion to supplement record). The NFL parties proffer various documents which the court will address in turn.
1. The Duberstein Letter
The NFL parties first proffer a letter dated September 19, 1991, from Michael J. Duberstein, research director for the NFLPA, to all of the NFL teams. Duberstein sent "the NFLPA's most recent salary data on NFL players" with the letter and asked all of the general managers to correct "it where it is wrong." The NFL parties argue that Duberstein's letter "raises an issue of fact as to whether the NFLPA has indeed abandoned its role as collective bargaining agent for the players." (NFL parties' Mem.Supp. at 3). The NFL parties concede, however, that when the NFLPA was the players' collective bargaining representative, the NFL parties automatically sent the requested salary information to the NFLPA pursuant to the 1982 Collective Bargaining Agreement. As the NFLPA points out, Duberstein's request for accurate salary information is necessary because the NFLPA no longer collectively bargains on behalf of the NFL players. Moreover, the Duberstein letter is similar to a prior written offer to provide salary information to club managers made by Gene Upshaw, the NFLPA's executive director. Both sides produced copies of the Upshaw letter in the McNeil litigation prior to the court's order of May 23, 1991. The court thus concludes that the Duberstein letter would not "produce a different result" on the labor exemption issue because it undercuts rather than supports the NFL parties' contention that the NFLPA continues to act as the players' collective bargaining representative.
2. The NFLPA's Draftee Salary Data
The NFL parties also contend that two documents prepared by the NFLPA concerning salary information for the 1990 draft establish that "the NFLPA merely accomplishes its bargaining role through its surrogates the players' agents." (NFL parties' Mem.Supp. at 4).[4] The front pages of the proffered documents plainly indicate that they are confidential, and to be used internally by the NFLPA, not to be *1479 released to players or their agents. The NFL parties proffer no other evidence to support their contention that the player agents work in concert with the NFLPA. The record demonstrates that the agents negotiate with the NFL teams solely on behalf of the individual players whom they represent; there is no evidence showing that the player agents have authority to reach any agreement regarding salary or other conditions of employment on behalf of any other players. Based on the foregoing, the court denies the NFL parties' request to supplement the record in McNeil or Five Smiths with the NFLPA's salary data concerning the 1990 draft.
3. The NFLPA Member Contract Advisor Survey
The NFL parties further submit a survey of player agents that the NFLPA conducted in September 1990. The survey asked whether the agents found the salary information provided by the NFLPA to be important or useful in connection with their individual negotiations with the NFL teams on behalf of their clients. The court considered similar evidence regarding the NFLPA's activities in the McNeil case; the fact that the NFLPA conducted the survey or that the agents find the exchange of salary information useful does not alter the court's decision concerning the status of the NFLPA.[5] The NFLPA also concedes that a majority of the NFL players continue to support many of the NFLPA's activities, including its collection and analysis of salary data. As this court previously determined, however, the majority of the players no longer support the NFLPA as their collective bargaining representative and the NFL parties' attempts to convince the court to force the NFLPA or the players to resume a voluntary bargaining relationship are unavailing. See McNeil, 764 F.Supp. at 1356-57.
4. The Upshaw Letter
The NFL parties also seek to supplement the record with a letter dated May 25, 1990, from Gene Upshaw to NFL players asking members of the NFLPA to continue their participation in the NFLPA's group licensing programs. The NFL parties argue that the players' continued support of the NFLPA as a group licensing organization and professional association proves that the NFLPA still functions as a collective bargaining organization. As discussed above, the court rejects this contention, finding that the NFLPA's activities are consistent with those of a professional association not a labor union. See also McNeil, 764 F.Supp. at 1356-57 (listing reasons why the collective bargaining relationship ended).[6]
5. The NLRB's Advisory Opinion
The NFL parties also provide the court with an advisory opinion of the NLRB issued in June 1990, which states that "the NFLPA has not merely disclaimed representative status; it has restructured itself so that it no longer functions as a collective bargaining agent." It is unclear, however, what action the NFL parties want the court to take and the court declines to address the opinion for purposes of these motions because it concludes that the opinion is not properly characterized as newly discovered evidence.
Based on the foregoing, the court finds that none of the proffered evidence meets the requirements of Rule 60(b) because it would not alter the court's ruling on labor exemption issue. The court thus denies the NFL parties' motion to supplement the record in McNeil and Five Smiths.
The NFLPA also seeks to recover their costs, expenses and attorneys' fees incurred when responding to the motions pursuant to 28 U.S.C. § 1927 and Federal Rules of Civil Procedure 11. The NFLPA *1480 argues that the NFL parties' attempt to supplement the record in McNeil and Five Smiths without also seeking a reversal or reconsideration of the court's prior orders demonstrates that the motions to supplement are frivolous. Such sanctions are within the court's discretion, see, e.g., Chambers v. NASCO, Inc., ___ U.S. ___, 111 S.Ct. 2123, 2132-33, 115 L.Ed.2d 27 (1991) (citing Roadway Express, Inc. v. Piper, 447 U.S. 752, 765, 100 S.Ct. 2455, 2463, 65 L.Ed.2d 488 (1980)), and the court declines to impose such sanctions.
NOTES
[1] In that order the court, for convenience, combined one motion that was made in the Powell and McNeil cases with three motions that related solely to McNeil, including a determination on the NFLPA's status as a labor organization. The published version of that order, unfortunately, is captioned only "Powell v. National Football League." 764 F.Supp. 1351. To keep the record straight, the court will refer to that order as McNeil for purposes of the present motion.
[2] The court applied its McNeil holding concerning the status of the NFLPA as precedent in the Five Smiths case in an order dated June 27, 1991. Five Smiths v. National Football League Players Ass'n, No. 4-90-261, slip op. at 2 (D.Minn June 27, 1991). Both sides agree that the court thus incorporated the McNeil holding into the Five Smiths case. The court will assume without deciding that issue for purposes of these motions.
[3] Federal Rules of Civil Procedure 60(b) provides that:
On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons:
... (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)....
[4] The proffered evidence consists of a document entitled "Benchmarks for 1990 Draftee Deals" and a report captioned "1990 Draft Update".
[5] The court also notes that this evidence was produced in McNeil prior to the court's order concerning the status of the NFLPA.
[6] The court also concludes that Upshaw's letter is not newly discovered evidence because it was first produced to counsel for the NFL parties in September of 1990. See, e.g., Taylor v. Texgas Corp., 831 F.2d 255, 259 (11th Cir.1987) (evidence is not considered newly discovered under Rule 60 if it is in the possession of the moving party or the party's attorney).
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777 F.Supp. 1226 (1991)
Sen. Arlen SPECTER, et al.
v.
H. Lawrence GARRETT, III, Secretary of the Navy, et al.
Civ. A. No. 91-4322.
United States District Court, E.D. Pennsylvania.
November 1, 1991.
*1227 David H. Pittinsky, Bruce W. Kauffman, Dilworth, Paxson, Kalish & Kauffman, Philadelphia, Pa., for plaintiffs.
Vincent M. Garvey, Dept. of Justice, Civ. Div., David J. Anderson, Mark W. Batten, U.S. Dept. of Justice, Washington, D.C., for defendants.
MEMORANDUM AND ORDER
BUCKWALTER, District Judge.
I will grant the defendants' motion to dismiss because:
(a) the statute precludes judicial review; and
(b) the political question doctrine forecloses judicial intervention.
A. THE STATUTE PRECLUDES JUDICIAL REVIEW
Plaintiffs have asserted that their right to judicial review for Counts I and II arises under the Administrative Procedure Act, 5 U.S.C. §§ 551-706 (1977), hereafter APA.
The presumption of judicial review of federal agency action under the APA is well established. See Abbott Laboratories v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967). This presumption, like all presumptions used in interpreting statutes, may be overcome by the appropriate showing of congressional intent. Block v. Community Nutrition Institute, 467 U.S. 340, 349, 104 S.Ct. 2450, 2455, 81 L.Ed.2d 270 (1984). The APA specifically provides two methods for overcoming the presumption of judicial review in § 701(a). For purposes of this case, we are concerned only with the first method in § 701(a)(1), which provides for no judicial review under the APA "to the extent that (1) statutes preclude judicial review ..." 5 U.S.C. §§ 701(a)(1) (1977).
In determining whether a statute precludes judicial review, the Supreme Court has instructed courts to look at "specific language or specific legislative history that is a reliable indicator of congressional intent," "the collective import of legislative and judicial history behind a particular statute," and "inferences of intent drawn from the statutory scheme as a whole." Block, 467 U.S. at 349, 104 S.Ct. at 2456. As long as the congressional intent to preclude judicial review is "fairly discernible in the statutory scheme," the presumption favoring judicial review has been overcome. Id. at 351, 104 S.Ct. at 2456.
Applying these standards, the court finds that the Defense Base Closure and Realignment Act of 1990 precludes judicial review for the following reasons. Initially, specific language in the legislative history of the Act indicates a congressional intent to preclude judicial review. The House Conference Report provides:
The rulemaking (5 U.S.C. 553) and adjudication (5 U.S.C. 554) provisions of the Administrative Procedures Act (5 U.S.C. 551 et seq.) contain explicit exemptions for "the conduct of military or foreign affairs function." An action falling within this exception, as the decision to clear and realign bases surely does, is immune from the provisions of the Administrative Procedures Act dealing with hearings (5 U.S.C. 556) and final agency decisions (5 U.S.C. 557). Due to the military affairs exception to the Administrative Procedure Act, no final agency action occurs in the case of various actions required under the base closure process contained in this bill. These actions, therefore, would not be subject to the rulemaking and adjudication requirements, and would not be subject to judicial review. Specific actions which would not be subject to judicial review include the issuance of a force structure plan ..., the issuance of *1228 selection criteria ..., the Secretary of Defense's recommendation of closures and realignments of military installations ..., the decision of the President ..., and the Secretary's actions to carry out the recommendations of the Commission. ...
H.R.Conf.Rep. 101-923, 101st Cong., 2d Sess. 706, reprinted in 1990 U.S.Code Cong. & Admin.News 3110, 3258.
This passage in the legislative history expresses a clear congressional intent to preclude judicial review under the APA of all actions taken pursuant to the Base Closure Act.
Other indicia of statutory intent to preclude judicial review is the Act's concern with "the timely closure and realignment of military installations." Section 2901(b). The House Conference Report stated a desire for the base closure process under the 1990 Act to correct the failings of the base closure process under the then existing law, which included that closures and realignments "take a considerable period of time and involve numerous opportunities for challenge in court." H.R.Conf.Rep. 101-923, 101st Cong.2d Sess. 705, reprinted in 1990 U.S.Code Cong. & Admin.News 3110, 3257. The Report further stated that the new process under the 1990 Act "involving an independent, outside commission will permit base closures to go forward in a prompt and rational manner." Id.
This language in the legislative history indicates that there was concern that judicial review of base closures had been preventing the base closure process from moving forward in a timely manner. The desire to correct this shortcoming under the then existing law further supports the contention that no judicial review was contemplated by the 1990 Act. While the arguments proposed by both sides on this issue are extensive, I have written this memorandum in a rather summary fashion in the interest of time, but not at the expense of a thorough analysis of the arguments on both sides. In brief, I find that the intent to preclude judicial review is "fairly discernible in the statutory scheme."
B. THE POLITICAL QUESTION DOCTRINE FORECLOSES JUDICIAL INTERVENTION
"Our discussion, even at the price of extending this opinion, requires review of a number of political question cases, in order to expose the attributes of the doctrine attributes which, in various settings, diverge, combine, appear and disappear in seemingly disorderliness". Baker v. Carr, 369 U.S. 186, 210, 82 S.Ct. 691, 706, 7 L.Ed.2d 663 (1962).
Based on my own review of cases as well as treatises on the subject, I believe that Justice Brennan's statement in the Baker case, supra, remains as true today as it was 29 years ago. Nevertheless, the Baker case did describe the attributes of a political question and expressed them in the following manner:
It is apparent that several formulations which vary slightly according to the settings in which the questions arise may describe a political question, although each has one or more elements which identify it as essentially a function of the separation of powers. Prominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question.
In a sense, the invoking of the political question doctrine is no more than a correlative of my first conclusion that the Defense Base Closure and Realignment Act of 1990 precludes judicial review.
On the other hand, the doctrine can stand by itself, it seems to me, as one which *1229 recognizes that in certain cases, the concept of separation of powers strongly suggests that the judiciary should defer in certain controversies to one or both of the other branches of government.
In reviewing the formulations in Baker, I felt that the present case represented one which was impossible for the court to resolve independently without expressing lack of respect due the coordinate branches of government.
The respect due to the other branches of government comes in part from a recognition that all branches are deeply concerned with conducting their affairs in the manner which is consistent with the constitution. Indeed, all three branches are involved in interpreting it. It is true, of course, that normally the judicial branch undertakes the ultimate review of laws and in so doing will not always agree with the interpretation of the other branches.
Under the political question doctrine, when should the judiciary defer to the other branches' views as opposed to simply undertaking judicial review and stating its own views, whether or not they differ from the other branches?
Unfortunately, there is no particular guidance in case law for determining the answer to that question as the first quotation from Baker indicates. The simple answer is, RARELY. Nevertheless, one must view the particular setting in which the question is raised. The case now before me comes with a significantly long history of attempts to close military bases and the problems resulting from such attempts. The Act of 1990 is the most recent in a series of efforts by Congress to resolve those problems fairly. Among other things, it provides for a review by Congress of the recommendations of the Commission, thereby giving members of Congress the opportunity to dispute those recommendations. As permitted by the Act, both the President and the Congress have approved the recommended base closures. While plaintiffs view defendants' raising of the political question doctrine as specious, I must disagree. Although I view it as a doctrine which should be used sparingly, this case fairly calls for its invocation.
In conclusion, I believe that it would be impossible to undertake judicial review of the decision on base closures made by the duly elected representatives of this country without expressing a lack of the respect due those branches of government.
Based on the foregoing opinion, the following order is entered:
ORDER
AND NOW, this 1st day of November, 1991, it is hereby ORDERED that defendants' Motion to Dismiss is GRANTED; the court enters judgment for the defendants and the plaintiffs' claims are DISMISSED WITH PREJUDICE.
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777 F.Supp. 244 (1991)
Dr. John J. FARBER, Plaintiff,
v.
ZENITH LABORATORIES, INC., Defendant.
No. 91 CIV. 350 (KMW).
United States District Court, S.D. New York.
October 14, 1991.
Paul Falick, New York City, for plaintiff.
*245 Peter M. Dodson, Cadwalader, Wickersham & Taft, New York City, for defendant.
MEMORANDUM OPINION AND ORDER
KIMBA M. WOOD, District Judge.
Dr. John J. Farber filed this diversity action against defendant Zenith Laboratories, Inc., pursuant to Zenith's by-laws and New Jersey law. Zenith is a New Jersey corporation that manufactures and markets generic pharmaceutical products. Farber, a New York resident, served as chairperson of the board of Zenith, from 1979-1990. He seeks indemnification for legal fees and expenses he incurred in connection with an investigation by the Securities and Exchange Commission. Zenith moves to dismiss the case against it for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2). For the reasons set forth below, the court denies Zenith's motion to dismiss.
DISCUSSION
The parties concede that personal jurisdiction in this action is governed by New York law. See Arrowsmith v. United Press International, 320 F.2d 219 (2d Cir. 1963) (en banc). Farber argues that this court has jurisdiction over Zenith pursuant to New York Civ.Prac. L. & R. (CPLR) § 301 (McKinney) ("§ 301") or pursuant to CPLR § 302(a)(1) ("§ 302(a)(1)"). Because this court finds that there is jurisdiction over Zenith under § 301, the 302(a)(1) arguments are not addressed.
Plaintiff bears the burden of proving that the court has personal jurisdiction over defendant, Hoffritz For Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985). Because no evidentiary hearing was held here, however, Farber need make only a prima facie showing that jurisdiction exists, id. Further, because the court did not hold a hearing or trial on the merits, the court must construe all pleadings and affidavits in the light most favorable to plaintiff and must resolve all doubts in plaintiff's favor. Landoil Resources Corp. v. Alexander & Alexander Services, Inc., 918 F.2d 1039, 1043 (2d Cir.1990); Hoffritz, 763 F.2d at 57.
Section 301 permits a court to exercise jurisdiction over a defendant who is "doing business" in New York. Zenith is a New Jersey corporation located in New Jersey. Farber asserts that Zenith is "doing business" in New York because it regularly conducts a significant portion of its board meetings, executive meetings, and shareholders' meetings ("supervisory meetings") in New York. There is no dispute between the parties that during the period from 1978 to 1989, at least twenty-four out of sixty-seven Board meetings were in New York; at least four out of nine shareholders' meetings were in New York, and at least twelve (and, according to plaintiff, fifteen) out of twenty-two executive meetings were in New York, Affidavit of Ruth M. Wallestad; Letter Affidavit of John J. Farber (Aug. 5, 1991). In addition, Farber alleges that, as an ongoing matter, many of Zenith's commercial activities, negotiations, legal matters, and financial arrangements were conducted in New York, and that at least two of its directors (including himself) lived in New York during the period from 1979-1989, Affidavit of Dr. John J. Farber (April 4, 1991) ¶¶ 3-4. Farber former chairperson of the Board also avers upon information and belief that Zenith products are sold in pharmacies throughout New York, id. at ¶ 8.
Zenith concedes the plethora of supervisory meetings held in New York between 1978 and 1989, but argues that this is not a basis for personal jurisdiction under the "doing business" category. It argues that "Zenith is not in the business of holding board meetings or executive committee meetings. It manufactures and sells pharmaceutical products." Def.'s Reply Memorandum at 6. The parties thus seem to agree that the jurisdictional issue under § 301 turns largely on whether the regular holding of supervisory meetings counts as "doing business" for jurisdictional purposes.
The most probative case on the issue before this court is Pomeroy v. Hocking Valley R. Co., 218 N.Y. 530, 113 N.E. 504 (1916). In that case, the defendant corporation neither owned nor operated any physical property in New York, and, as in this case, several of its supervisory meetings *246 were in New York and two of its key officers (president and secretary) resided in New York. The Court of Appeals thought it highly significant that "several meetings of its board of directors and executive committee are held" in New York, id. at 534, 113 N.E. 504. "It is an indispensable condition and incident to these latter operations and to the conduct of the business that general supervision should be exercised over the management of the corporation by its board of directors, executive committees and executive officials, ...", id., at 536, 113 N.E. 504. Primarily on this basis, the Court found that the defendant corporation was doing business in New York.
Pomeroy directly supports Farber's argument and undercuts Zenith's. Both the holding of that case and its underlying rationale have been followed numerous times. See, e.g., Stark v. Howe Sound Co., 141 Misc. 148, 252 N.Y.S. 233 (Sup.Ct.), aff'd, 234 A.D. 905, 254 N.Y.S. 959 (1931) (foreign corporation doing business in New York if it is "supervised, directed, and controlled by its executive officials" in New York); Stockton v. Goodyear Tire & Rubber Co., 124 Misc. 213, 208 N.Y.S. 209, 211 (Sup.Ct.1924) (following Pomeroy, board meetings in New York a basis for finding "... the defendant is continuously performing a very substantial portion of its business within this jurisdiction ..."). See also Geller v. Macon, 190 Misc. 903, 75 N.Y.S.2d 818, 823 (City Ct.1947) ("[t]he distinguishing feature of the Pomeroy case seems to me to be that there the board of directors and executive committee held several meetings each year within the city of New York, so that it could be fairly inferred that from New York the directors and executive committee exercised supervision over the management and business of the Hocking Valley Company, a supervision not limited to any particular phase or part of its affairs"). In Thompson v. Armour, 68 N.Y.S.2d 475 (Sup.Ct.1947), the court found it important that "formal and informal meetings of the Boards of Directors of these corporations are held in this state ...", id. at 477. Significantly, the court took supervisory meetings into account even though only some, and not all, of those meetings were held in New York. This understanding of Pomeroy was more explicit in Ledermann v. Pennsylvania R. Co., 193 Misc. 941, 85 N.Y.S.2d 485 (City Ct. of N.Y., Spec. Term, New York County 1949). "Added to all this is the fact the defendant's board of directors sometimes holds meetings in New York City, `for the convenience of the three members of the board of directors who reside in New York City.' Thus, in a sense, the defendant's Board, operating from the City of New York, sometimes exercises the management and control over the affairs and business of the defendant, a factor that was thought significant in Pomeroy v. Hocking Valley R. Co." Ledermann, 85 N.Y.S.2d at 487 (cite omitted).
The Second Circuit has also considered the existence of supervisory meetings to be important for "doing business." In Bertha Building Corp. v. Nat'l Theatres Corp., 248 F.2d 833 (2d Cir.1957), the court cited Pomeroy, and quoted the district court's finding that some of the board of directors meetings and executive meetings and corporate meetings were held in New York, id. at 841, n. 3. Based in part on that finding, it stated that "... it is irrefutable that National was amenable to process in New York during the relevant period," id., at 841-42. See also, Ciprari v. Servicos Aereos Cruzeiro do Sul, S.A., 232 F.Supp. 433 (S.D.N.Y.1964) (citing Pomeroy with approval and holding that activities constituting indispensable condition of business count as doing business under New York law).
The Pomeroy line of cases thus favors a finding that the "doing business" category applies to Zenith. It might be objected that Pomeroy and its progeny hold that the presence of supervisory meetings is a factor to be combined with other factors for a finding that the defendant is "doing business" in New York. The presence of supervisory meetings is not a sufficient basis on its own for such a finding, the objection would continue. In support of this point, it must be noted that the Pomeroy cases including Pomeroy itself always mention other contacts with the state *247 of New York beyond the supervisory meetings.
This objection is not well taken. First, as is indicated above, Farber has asserted several other contacts between Zenith and New York, including, for example, negotiations, financial dealings, and the presence of its products in New York pharmacies. These other contacts are factors which do add to a finding that Zenith was doing business in New York. But even if this were not the case, the logic of Pomeroy would still lead to a finding of personal jurisdiction status here. Pomeroy stands for the proposition that holding supervisory meetings is itself doing business. It follows that no other sort of contact is necessary for a conclusion that Zenith is doing business in New York; the question is only whether there were enough contacts of this sort.
Zenith opposes jurisdiction here by citing Joseph Walker & Sons v. Lehigh Coal & Navigation Co., 8 Misc.2d 1005, 167 N.Y.S.2d 632 (Sup.Ct.1957), in which three board meetings in New York were held insufficient for "doing business" status. A close look at Joseph Walker supports Farber's position, however. That case is premised on the general principle that a defendant cannot be subject to personal jurisdiction under § 301 unless it is "`engaged in such a continuous and systematic course of "doing business" here as to warrant a finding of its "presence" in this jurisdiction.'" Landoil, 918 F.2d at 1043 (quoting McGowan v. Smith, 52 N.Y.2d 268, 272, 437 N.Y.S.2d 643, 645, 419 N.E.2d 321, 323 (1981)) (additional citations omitted). It rejected the proposition that jurisdiction could be conferred on the basis of a mere three board meetings on the ground that "this assuredly falls far short of a showing of such conduct which could be construed to be of such permanence or continuity as to constitute a course of doing business here." Joseph Walker, 167 N.Y.S.2d at 634.
Joseph Walker should thus be understood to shape the Pomeroy holding: where the exercise of supervisory control is systematic and continuous (or permanent), it may serve as a basis for a finding that the corporation is doing business in New York for purposes of personal jurisdiction. Obviously, the supervisory control exerted in this case far exceeds that in Joseph Walker. Twenty-three of Zenith's Board meetings and roughly half of its executive and shareholder meetings over the course of more than a decade took place in New York. There were also numerous dealings of Zenith's executives in New York on matters of fundamental importance to corporate supervision. Recognizing that the test under § 301 is pragmatic and depends on the circumstances of the particular case, Landoil, 918 F.2d at 1043, this court holds that on the facts of this case, Zenith's supervisory activities in New York were sufficiently systematic, continuous, and permanent to qualify it as "doing business" in New York. Zenith is thus subject to personal jurisdiction under CPLR § 301.
CONCLUSION
For the reasons stated above, the court denies defendant Zenith's motion to dismiss for lack of personal jurisdiction.
SO ORDERED.
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280 Pa. Superior Ct. 134 (1980)
421 A.2d 442
COMMONWEALTH of Pennsylvania,
v.
John LANDI, Appellant.
Superior Court of Pennsylvania.
Argued March 17, 1980.
Filed July 25, 1980.
*135 *136 *137 Arthur J. King, Assistant Public Defender, Norristown, for appellant.
Ronald T. Williamson, Assistant District Attorney, Norristown, for Commonwealth, appellee.
Before PRICE, CAVANAUGH and WATKINS, JJ.
CAVANAUGH, Judge:
On March 16, 1979 appellant, John Frank Landi, pleaded guilty to seven charges of armed robbery, one charge of attempted robbery and seven charges of conspiracy. Three other defendants, who were involved in the crimes in various stages and capacities, also entered pleas of guilty. On July 13, 1979, appellant and co-defendant, Frank Davis, were sentenced to serve no less than five nor more than ten years in prison on the robbery informations and concurrent five-year terms of probation on the conspiracy and attempted robbery charges to commence upon their release on parole on the robbery sentences. The other two defendants received lesser sentences. Appellant filed a motion to reconsider the sentence which was dismissed on August 6, 1979.[1]
In this appeal, appellant contends that his sentence was unduly harsh and excessive because (1) imprisonment of a paraplegic constitutes cruel and unusual punishment; (2) two co-defendants received lesser sentences; and (3) the district attorney allegedly failed to abide by a pre-plea agreement to recommend a non-jail sentence.
As a result of an automobile accident on November 17, 1971, appellant is paralyzed from the waist down. Although he is confined to a wheelchair, appellant is able to feed, clothe and bathe himself, and can get in and out of an *138 automobile without assistance. Despite his disability appellant participated in the robberies of eight business establishments over a period of three days. The record reveals that appellant took an active role in planning the robberies and supplied co-defendant Frank Davis with a .22 pistol. Davis fired the pistol during three robberies but no one was injured. Appellant remained in the automobile during each incident and acted as a lookout.
Appellant concedes that the trial court made no procedural errors in imposing sentence. Nonetheless, he argues that a sentence of imprisonment for a paraplegic constitutes cruel and usual punishment. We disagree.
Imposition of a proper sentence under the Sentencing Code, 18 Pa.C.S. § 1301 et seq., is a matter vested in the sound discretion of the trial court, whose determination will not be disturbed on appeal but for a manifest abuse of discretion. Commonwealth v. Knight, 479 Pa. 209, 387 A.2d 1297 (1978); Commonwealth v. Martin, 466 Pa. 118, 351 A.2d 650 (1976). The trial court must consider the character and background of the defendant as well a the particular circumstances of the crime in light of the legislative guidelines. The sentence imposed must reflect the minimum sentence consistent with the protection of the public, the gravity of the offense and the rehabilitative needs of the defendant. 18 Pa.C.S. § 1321(b); Commonwealth v. Knight, supra; Commonwealth v. Wicks, 265 Pa.Super. 305, 401 A.2d 1223 (1979).
We perceive no abuse of discretion in the instant case. In imposing sentence, the trial court considered the appropriate factors in accordance with the Sentencing Code. See: Commonwealth v. Riggins, 474 Pa. 115, 377 A.2d 140 (1977). The trial court took due consideration of appellant's physical limitations, but determined that incarceration was necessary in light of the seriousness and number of the offenses, the possession and use of a weapon, the major role appellant took in planning the escapades and appellant's age and background. Appellant would have us hold that a sentence *139 of imprisonment for a paraplegic is excessive per se. Such an absolute rule is repugnant to the individualized sentencing procedures adopted in Pennsylvania. A defendant's physical condition, like that of his mental condition, is just one factor that the trial court may consider in the exercise of its discretion in imposing sentence. See: Commonwealth v. Martin, supra.
Appellant further argues that the trial court should have modified its sentence in accordance with the Act of May 31, 1919, P.L. 356, No. 170 as amended by Act of January 26, 1966, P.L. (1965) 1593, No. 561, § 1, 61 P.S. § 81:
Whenever any convict or person is confined in any jail, workhouse, reformatory, or reform or industrial school, penitentiary, prison, house of correction or any other penal institution, under conviction or sentence of a court, or is so confined while awaiting trial or confined for any other reason or purpose and it is shown to a court of record by due proof that such convict or person is seriously ill, and that it is necessary that he or she be removed from such penal institution, the court shall have power to modify its sentence, impose a suitable sentence, or modify the order of confinement for trial, as the case may be, and provide for the confinement or care of such convict or person in some other suitable institution where proper treatment may be administered. Upon the recovery of such person, the court shall recommit him or her to the institution from which he or she was removed.
This statute clearly applies only to those prisoners who become seriously ill while in prison and, for the benefit of the ill prisoner as well as the rest of the prison population, should be transferred temporarily to a more suitable institution where he or she can be administered properly.
Instantly, although obviously disabled, appellant is not seriously ill and incarceration poses no threat to his physical welfare. Appellant, at the time of the reconsideration hearing, testified that he was confined to the infirmary wing of the State Correctional Institute at Graterford where he is in the company of other inmates, one of whom, *140 ironically, is also a paraplegic. Appellant complained of no specific hardship or deprivation except that he was not involved in any employment rehabilitation programs. Under the circumstances, such treatment is hardly cruel or unusual. Moreover, if appellant is dissatisfied with his prison conditions his remedy is not to attack his sentence as excessive but to petition prison authorities for a transfer to a facility better equipped to attend to his special needs.
Appellant next argues that his sentence is excessive because two co-defendants received lesser sentences. A trial court is not bound to impose a like sentence on all participants of a crime. After considering the circumstances relating to each defendant, the trial court may impose different sentences. Commonwealth v. Burton, 451 Pa. 12, 301 A.2d 675 (1973); Commonwealth v. Andrews, 248 Pa.Super. 1, 373 A.2d 459 (1977).
Here, the disparate sentences imposed by the trial court accurately reflected the degree of culpability and the background of each defendant. Appellant was the oldest of the four, organized the robberies, supplied the weapon, participated in all eight incidents and had a criminal record. Davis, who received an identical sentence, had a criminal record, participated in all robberies and wielded the gun. Hitner, on the other hand, was only involved in three incidents, but did have a criminal record. DeCurtis participated in four incidents, had no previous record, was employed and played the least active role. Thus the trial court was justified in giving appellant and Davis more severe sentences than either Hitner or DeCurtis.
Appellant's final argument is that his sentence is excessive because the district attorney failed to abide by a "plea agreement" in which he promised to recommend a non-jail sentence in return for appellant's cooperation and testimony in another case. Appellant never supplied the Commonwealth with any information nor did he testify as a Commonwealth witness. At sentencing, the district attorney recommended a jail sentence. Nonetheless, appellant contends *141 that since the Commonwealth never contacted him, he should still receive the "benefit of his bargain." At the reconsideration hearing, the Commonwealth asserted that it had contacted appellant but he was unwilling to testify. The trial court declined to resolve this credibility issue but stated that, even if the Commonwealth had made a recommendation of probation, he would not have accepted it.
The Commonwealth has an affirmative duty to fulfill all promises made in exchange for a defendant's plea of guilty. Commonwealth v. Zuber, 466 Pa. 453, 458, 353 A.2d 441, 444 (1976); See also Santobello v. New York, 404 U.S. 257, 92 S.Ct. 495, 30 L.Ed.2d 427 (1971). If the Commonwealth violates a plea bargain, the defendant is entitled, at the least, to the benefit of the bargain. Commonwealth v. Zuber, supra, 466 Pa. at 459, 353 A.2d at 444; Commonwealth v. Zakrzewski, 460 Pa. 528, 533, 333 A.2d 898, 900 (1975). See: Commonwealth v. Alvarado, 442 Pa. 516, 276 A.2d 526 (1971). Strict compliance with plea bargains is necessary in order to avoid the possibility that a defendant may be coerced or fraudulently induced to waive a number of significant constitutional rights by pleading guilty. Commonwealth v. Zuber, supra 466 Pa. at 458-59, 353 A.2d at 444.
While no plea bargain per se was entered into by appellant and the district attorney at the guilty plea colloquy, see Pa.R.Crim.P. 319(b), it is clear from the record that appellant thought he was pleading guilty pursuant to certain "representations" made by the district attorney. It is immaterial whether the trial court would have been influenced by a recommendation by the district attorney. Santobello v. New York, supra. In light of the obligation of the prosecution to honor all promises made to an accused, the trial court at the reconsideration hearing should have received testimony to determine the terms of the alleged agreement and to ascertain whether the parties fulfilled their respective promises.
*142 Therefore, we must remand this issue for an evidentiary hearing so that the trial court can ascertain whether an agreement actually existed and, if so, determine the extent to which the district attorney and appellant were obligated under its terms.
Remanded for an evidentiary hearing consistent with this opinion.
NOTES
[1] Appellant filed a Petition for Reconsideration of Sentence Nunc Pro Tunc because his counsel filed the petition two days after the tenth day from the imposition of sentence. See: Pa.R.Crim.P. 1410. The trial court granted this motion on July 30, 1979. Appellant also filed a Petition for Writ of Habeas Corpus in which he alleged the same issues as in the Petition for Reconsideration. On July 30, 1979, the trial court consolidated both petitions for argument on August 6, 1979.
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777 F.Supp. 1204 (1991)
Barbara LeBRUN, Plaintiff,
v.
Richard THORNBURGH, Esq., et al., Defendants.
Civ. No. 89-2790 (HLS).
United States District Court, D. New Jersey.
November 19, 1991.
*1205 Michael Chertoff, U.S. Atty., Newark, N.J., for Richard Thornburgh.
Dennis J. Cummins, Jr., Fair Lawn, N.J., for Barbara LeBrun.
AMENDED OPINION
SAROKIN, District Judge.
Introduction
Plaintiff, born in France, the daughter of an American World War II soldier, has been denied United States citizenship. Plaintiff's parents were unmarried, and her father returned to the United States after the war. Plaintiff's mother, a French citizen, remained in France with her daughter.
In order for plaintiff to have been eligible for citizenship, it was necessary that she be recognized and acknowledged by her father before she became 21. Plaintiff was not "legitimated" by her father until 1981, the year that he died, at which time she was then 35 years old. In addition to the legitimacy requirement, under the then-applicable law, plaintiff could not become a citizen unless she had already resided in the United States for five years between the ages of 13 and 21 or five years between *1206 the ages of 14 and 28. Not unsurprisingly, plaintiff did not meet these requirements, because her father had not acknowledged his parenthood. The requirements no longer exist, but nonetheless they have been applied to deny plaintiff's application for citizenship. Thus, in effect, plaintiff's father, by his delay in acknowledging his parenthood of plaintiff, has denied her the opportunity for citizenship in this country, and the Immigration and Naturalization Service ("INS") has condoned his conduct by denying plaintiff's application.
The court concludes that the applicable law discriminates against "illegitimate" children, and thereby violates the Equal Protection Clause of the United States Constitution. The law as it then existed and as applied in this matter served to make the citizenship of children born out of wedlock to American fathers, particularly those serving in the armed forces, subject to the personal vagaries and consciences of their fathers. Those who chose to act with honor could confer such citizenship, and those who chose not to, could deny citizenship to their offspring. Even the dilatory father, as in this case, could defeat his child's claim to citizenship merely by delaying the recognition of his responsibility, until it was too late to satisfy the residency requirements.
Those who have no choice in the marital state of their parents should not be so penalized or stigmatized, and their rights to citizenship should not be dependent on the moral fortitude (or lack thereof) of one of their parents. The unfairness is exacerbated by placing such power solely in the hands of the male parent. The law was thus discriminatory in its impact upon children born out of wedlock and sexist in making citizenship dependent upon the acquiescence of the male parent only.
Background
Before the court is defendants' motion for summary judgment.
Plaintiff was born on August 3, 1945, in Paris, France. Her natural parents, who were not legally married at the time, were Renee Foucher, a citizen and national of France, and Frank Pasek, Jr., a citizen and national of the United States. Amended Complaint, ¶¶ 5-7; admitted in Answer. According to the Department of State Passport Agency, records indicate that plaintiff's father acknowledged paternity in correspondence to plaintiff's mother dated November 15, 1945. See Amended Complaint, Exh. D1.[1] It was not until April 10, 1981, that plaintiff's natural father filed an acknowledgment of his paternity of plaintiff in France, thereby "legitimating" plaintiff in accordance with the laws of his domicile, New Jersey. Amended Complaint, ¶ 9. Four months later, Frank Pasek, Jr., died on August 20, 1981.
In November, 1985, plaintiff filed for a Certificate of Citizenship. Plaintiff's application was denied by the INS, District of New York, on November 20, 1986. Amended Complaint, Exh. B. On December 3, 1986, plaintiff appealed the denial to the Regional Commissioner; on July 29, 1987, Thomas W. Simmons, Chief of the INS Administrative Appeals Unit ("AAU"), denied the appeal. Id., Exh. C. Plaintiff had also applied for a passport, in 1986. That application was denied by the Regional Director for the U.S. Passport Agency on March 31, 1987. Id., Exh. D.[2]
An exclusion proceeding which was begun earlier was adjourned several times pending plaintiff's application for a Certificate of Citizenship. Administrative Law Judge ("ALJ") Elstein, on March 7, 1989, terminated the exclusion proceedings against plaintiff, and ordered that she be admitted to the United States as a temporary visitor for business or pleasure, until June 30, 1989. See Def. Reply Brief, Exh. A, at 5. On March 21, 1989, plaintiff appealed to the Board of Immigration Appeals ("BIA"). The BIA denied plaintiff's application on July 18, 1990.
*1207 On August 13, 1990, plaintiff filed the instant action. In the First Count of the Amended Complaint, plaintiff asks that she be admitted to citizenship, that Section 301 of the Immigration and Nationality Act of 1952 (the "Act"), 8 U.S.C. § 1401, not be applied to her, and/or that § 301 be declared unconstitutional. Id. at Exh. E. That section requires a citizen born abroad to reside in the United States for a certain period of time in order to retain citizenship rights. Plaintiff challenges these retention requirements as violative of her Equal Protection and Due Process rights.
Plaintiff raises an additional challenge to the denial of her citizenship rights in the Second Count of the Amended Complaint. Plaintiff alleges that when she was 19 years old she
went to the U.S. Embassy in Paris, France, to find out what she had to do to come to the United States.
She was told by an agent employee at the U.S. Embassy that she had nothing to worry about; that the United States takes care of its "war babies." She was told that she was a citizen and that she would have no problem going to the United States when she was ready.
Relying on this information the plaintiff never sought to enter the United States within the then retention period. Had she been told accurately, it is urged here that she would today be a full fledged United States Citizen.
Amended Complaint, Second Count, ¶¶ 2-4.
Defendants now move for summary judgment, asking this court to dismiss the complaint.
Statutory Framework
In plaintiff's applications for a Certificate of Citizenship and a passport, her claim has been interpreted under the following provisions of the relevant statutes.
The residency requirements for the retention of citizenship for a foreign born citizen that was initially applicable to plaintiff was contained in the Nationality Act of 1940. Section 201(i), codified at 8 U.S.C. § 601, was enacted July 31, 1946.
Sec. 201. The following shall be nationals and citizens at birth:
. . . . .
(i) A person born outside the United States and its outlying possessions of parents one of whom is a citizen of the United States who has served or shall serve honorably in the armed forces after December 7, 1941, and before the date of termination of hostilities in the present war as proclaimed by the President or determined by the joint resolution by the Congress and who, prior to the birth of such person, has had ten years residence in the United States or one of its outlying possessions, at least five of which were after attaining the age of twelve years, the other being an alien: Provided, that in order to retain such citizenship, the child must reside in the United States or its outlying possessions for a period or periods totaling five years between the ages of thirteen and twenty-one years: Provided further, that, if the child has not taken up residence in the United States or its outlying possessions by the time he reaches the age of sixteen years, or if he resides abroad for such a time that it becomes impossible for him to complete the five years' residence in the United States or its outlying possessions before reaching the age of twenty-one years his American citizenship shall thereupon cease.
Section 201(g) of the Nationality Act does not apply to plaintiff, as by its own terms it "shall not apply to a child born abroad whose American parent is at the time of the child's birth residing abroad solely or principally in the employment of the Government of the United States," as plaintiff's father was. Furthermore, the requirement in Section 205 of legitimation by age 21 is not applicable to Section 201(i). See Y.T. v. Bell, 478 F.Supp. 828, 831 (W.D.Pa.1979).
The Nationality Act was repealed by the Immigration and Nationality Act of 1952, and section 301(b), codified at 8 U.S.C. § 1401(b), changed the applicable retention requirement to five years of residence in the United States or its territories between *1208 the ages of 14 and 28. In 1972, the law was again modified to require two years physical presence in the United States or its territories between the ages of 14 and 28. P.L. 92-584 (October 27, 1972). On October 10, 1978, Congress repealed the retention requirements entirely for any foreign born citizens who had not yet reached their 28th birthday. P.L. 95-432 (October 10, 1978).
Section 309 of the Immigration and Nationality Act, codified at 8 U.S.C. § 1409, provided that the relevant subsections of Section 301 apply to a person born out of wedlock if the person is "legitimated" under the age of 21 years, under the law of that person's residence or domicile.
The State Department and Department of Justice, in commenting upon the proposed repeal of § 301, noted that the retention requirements "should be repealed retroactively to May 24, 1934." Letter of Patricia M. Wald, Ass't. A.G., to Peter Rodino, Chair of the House Comm. on the Judiciary (Dec. 12, 1977), Plt.Exh. D1. Unfortunately for plaintiff and others in her situation, the repeal was only enacted prospectively.
Previous Appeals
Plaintiff's various applications for a Certificate of Citizenship and a passport were each decided on different grounds, in some cases applying different sections of the Act. The INS applied § 309 of the Act; the Passport Agency applied § 201; and the BIA primarily discussed, and rejected, plaintiff's estoppel argument. The ALJ's ruling relied upon the earlier decisions in plaintiff's case.
The INS, in its July 29, 1987 decision by the Chief of the Administrative Appeals Unit ("AAU"), denied plaintiff's appeal on the grounds that she did not meet the requirements set forth in § 309 of the Act. Under that section, an "illegitimate" child born on or after January 13, 1941, and prior to December 24, 1952, must have been "legitimated" before age 21 under the laws of the father's domicile; the father must have had the required residence in the United States at the time of the child's birth; and the child must have complied with the residence requirements for retention of citizenship, which mandate physical presence in the United States for periods totaling five years between the ages of 13 and 21 (§ 201) or two years between the ages of 14 and 28 (§ 201 as amended by § 301). While it is unchallenged that plaintiff's father met the required residence, the INS-AAU found that plaintiff had not been properly "legitimated" under the laws of New Jersey. The AAU further found that because plaintiff first entered the United States in July 1980, when she was almost 35 years old, she could not have met the retention requirements.
The Department of State Passport Agency denied plaintiff's application for a passport based on a different section of the Act, § 201(i). That section provides that a person is a citizen at birth if born outside of the United States to a parents one of whom serves in the United States armed forces after December 7, 1941, and the other of whom is an alien. In order to retain such citizenship, under the statute, the child must reside in the United States for five years between the ages of 13 and 21 years.
The Agency found, following Y.T. v. Bell, 478 F.Supp. 828, that the requirement articulated in § 205, that an applicant must have been legitimated by age 21, does not apply as an additional requirement under § 201(i). However, the Passport Agency found that plaintiff had failed to meet the retention requirements of § 201(i). The Agency further noted that plaintiff failed to meet the requirements of § 201 of the Act as amended by § 301(b) of the Immigration and Nationality Act of 1952. Under the amended Act, to retain citizenship rights a person must be physically present in the United States for a period of five years between the ages of 14 and 28.
In its July 18, 1990 denial of plaintiff's application, the BIA dismissed plaintiff's estoppel argument, stating that:
while the United States Supreme Court has not resolved the issue of whether there may be any circumstances in which the government may be estopped from denying citizenship because of the conduct *1209 of its officials, it has made clear that consideration of this issue will not lie absent a showing of `affirmative misconduct.'
Amended Complaint, E1 (citations omitted). The court found that plaintiff's allegations, if true, did not establish affirmative misconduct. The court noted that even if plaintiff had received misinformation from the Embassy, plaintiff did not show detrimental reliance, since she testified that she never had the funds to travel to this country between 1964 and 1974. Amended Complaint, E3, citing Tr. at 56. The decision by the Board also stated that "[n]either the immigration judge nor this Board has any jurisdiction to consider challenges to the constitutionality of the laws that we administer." Amended Complaint, E1 (citations omitted).
Discussion
In order to prevail on a motion for summary judgment, the moving party must show that there are no genuine issues of material fact and that, viewing the facts in the light most favorable to the non-movant, the movant will prevail as a matter of law. Fed.R.Civ.P. 56. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 84 (3d Cir. 1987).
The court will address the parties' arguments in turn.
Dismissal as to Secretary Baker
Plaintiff's Amended Complaint seeks a declaration of citizenship and a declaratory judgment holding the retention requirements in the Act unconstitutional. Plaintiff does not seek redress from the Secretary of State regarding the denial of her application for a passport. Accordingly, the court will grant defendants' motion to dismiss the Amended Complaint as to the Secretary of State for failure to state a claim.
Defendants further argue that plaintiff's action should be dismissed as to the Secretary of State for lack of subject matter jurisdiction. Because of its dismissal as to the Secretary for failure to state a claim, the court need not reach this argument. The court notes that defendants concede that subject matter jurisdiction exists as to defendant the Attorney General, pursuant to the Administrative Procedure Act, 5 U.S.C. § 704, which gives this court jurisdiction to hear appeals from the BIA. See Def. Brief at 22 n. 10, 23.
Standing
Defendants argue that under 8 U.S.C. § 1503(a), plaintiff lacks standing to bring this suit. That section of the statute provides that a person within the United States who claims the right of citizenship and is denied, may institute an action against the head of the department or agency denying her that right, except that no such action may be instituted where the issue of the person's status as a national of the United States (1) arose by reason of, or in connection with an exclusion proceeding, or (2) is an issue in such a proceeding. Defendants argue that because plaintiff's application for citizenship in 1985 grew out of the exclusion proceedings initiated against her in 1985, she cannot maintain a suit under this action.[3]
The court has declined, on the instant motion, to consider plaintiff's application solely as one for citizenship; rather, the court construes the instant action as a challenge to the constitutionality of the Immigration and Nationality Act, as applied to plaintiff. Defendant concedes that plaintiff has standing to bring the constitutional challenge. See Reply Brief at 5 n. 5.
The Supreme Court has allowed constitutional challenges to be maintained by illegal aliens, see, e.g., Plyler v. Doe, 457 U.S. 202, 102 S.Ct. 2382, 72 L.Ed.2d 786 (1982); McNary, Commissioner of Immigration and Naturalization v. Haitian *1210 Refugee Center, Inc., ___ U.S. ___, 111 S.Ct. 888, 112 L.Ed.2d 1005 (1991); so too constitutional challenges brought by persons who may in fact be citizens, and the denial of whose citizenship rights is in question, should be permitted to go forward. The Fourteenth Amendment provides that "[n]o State shall ... deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws." (Emphasis added). The Supreme Court has held that
Whatever his status under the immigration laws, an alien is surely a `person' in any ordinary sense of that term. Aliens, even aliens whose presence in this country is unlawful, have long been recognized as `persons' guaranteed due process of law by the Fifth and Fourteenth Amendments.
Plyler, 457 U.S. at 210, 102 S.Ct. at 2391 (citations omitted). Thus plaintiff, who is not clearly an alien or a non-citizen, should be guaranteed the equal protection of the laws. See Y.T. v. Bell, 478 F.Supp. 828, 832 (W.D.Pa.1979) (distinguishing level of scrutiny for constitutional challenges to statutes by plaintiffs who are "clearly non-citizens" and plaintiffs who have a strong claim to citizenship).
Moreover, plaintiff has met the conditions for standing, as articulated in Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 829-30, 25 L.Ed.2d 184 (1970), to challenge the statute under which she has been denied citizenship. She has demonstrated both injury in fact and that she is within the zone of interests to be protected or regulated by the statute.
Estoppel
Plaintiff argues that the government is estopped from denying her citizenship rights because in failing to meet the retention requirements she was relying on the misinformation given her in the United States Embassy when she was age nineteen. Plaintiff's estoppel argument must fail. While citizenship is not automatically lost where a person was misled by the action of a government official whose duty it was to inform that person, see Matter of S , 8 I. & N. Dec. 226 (BIA 1958), plaintiff relies for her estoppel argument on a conversation with an unidentified employee of the American Embassy in Paris. While plaintiff was allegedly told that she was an American citizen and that she would not encounter any problems entering the United States at a later date, the record does not show that the person with whom plaintiff spoke was a government official.
Nor can plaintiff base her estoppel argument on a theory of government "affirmative misconduct." Whether "affirmative misconduct" by the government would estop it from enforcing the laws is unsettled in the caselaw. See Heckler v. Community Health Services, Inc., 467 U.S. 51, 60, 104 S.Ct. 2218, 2224, 81 L.Ed.2d 42 (1984) ("We have left this issue open in the past, and do so again today."); see also United States Immigration & Naturalization Service v. Hibi, 414 U.S. 5, 94 S.Ct. 19, 38 L.Ed.2d 7 (1973) (government's failure to fully publicize rights accorded those seeking naturalization or its failure to make available authorized naturalization representatives did not constitute "affirmative misconduct"). Plaintiff's allegations as to a conversation with an unidentified individual in the United States Embassy about general citizenship rights is not sufficient to establish "affirmative misconduct" on the part of the government.
Finally, plaintiff cannot claim to fall under the exception to the strict application of the retention requirements by arguing that she was unaware of any claim for citizenship. Indeed, plaintiff's assertion that she went to the United States Embassy to inquire about her citizenship rights precludes such an argument. See Rucker v. Saxbe, 552 F.2d 998 (1977), cert. denied, 434 U.S. 919, 98 S.Ct. 392, 54 L.Ed.2d 275 (1977).
Constitutional Claims
Plaintiff has challenged the constitutionality of the relevant statutes under the Fourteenth Amendment.
The Supreme Court has recognized that any person within the jurisdiction of the United States, including illegal aliens, may *1211 claim the benefit of the Fourteenth Amendment's guarantee of equal protection. Plyler, 457 U.S. at 215, 102 S.Ct. at 2293-94. Under well established doctrine, distinctions in the law that disadvantage "illegitimate" children must be examined by the courts with a close scrutiny. Tribe, Constitutional Law, 277-283 (1978).
In Trimble v. Gordon, the Court established a standard for examining statutes that distinguish between "legitimates" and "illegitimates," under which the question is whether the statute "is carefully tuned to alternative considerations." 430 U.S. 762, 772, 97 S.Ct. 1459, 1466, 52 L.Ed.2d 31 (1977) (citations omitted). The Court took into account "`the lurking problems with respect to proof of paternity,'" but noted that while those problems "`are not to be lightly brushed aside, ... neither can they be made into an impenetrable barrier that works to shield otherwise invidious discrimination.'" Id., 430 U.S. at 771, 97 S.Ct. at 1466 (citing Gomez v. Perez, 409 U.S. 535, 538, 93 S.Ct. 872, 874-75, 35 L.Ed.2d 56 (1973)). While this standard of review is somewhat "narrow," see Fiallo v. Bell, 430 U.S. 787, 796, 97 S.Ct. 1473, 1480, 52 L.Ed.2d 50 (1977), (citing Mathews v. Diaz, 426 U.S. 67, 81-82, 96 S.Ct. 1883, 1892-93, 48 L.Ed.2d 478 (1976)), courts must ensure that the rights guaranteed by the Fifth Amendment have not been violated. Plyler, 457 U.S. at 210, 102 S.Ct. at 2391; Fiallo, 430 U.S. at 809-10, 97 S.Ct. at 1486-87 (Marshall, J., dissenting), and authorities cited therein. Under the standard in Rogers v. Bellei, 401 U.S. 815, 831, 91 S.Ct. 1060, 1069, 28 L.Ed.2d 499 (1971) (discussed infra), this court must ensure that the statute is not unreasonable, arbitrary or unlawful.[4]
The court concludes that § 309 is not "carefully tuned to alternative considerations." Even under a minimum rationality standard, the distinction made in section 309 of the statute must fail. Moreover, under the standard articulated in Rogers v. Bellei, the distinction is not only unreasonable and arbitrary, but it is also, under the Equal Protection Clause, unlawful.
The statute conditions the retention of citizenship upon an official act by the father of "illegitimate" children. Courts have long recognized, however, that the rights of one cannot be made contingent upon the act of another. An individual keeps his citizenship "unless he voluntarily relinquishes it." Afroyim v. Rusk, 387 U.S. 253, 262, 87 S.Ct. 1660, 1665, 18 L.Ed.2d 757 (1967). Not only can plaintiff not be said to have voluntarily relinquished her citizenship, but she has not even been given the chance of retaining it or relinquishing it; her citizenship rights are controlled by the acts of another individual.
In Plyler v. Doe, 457 U.S. 202, 102 S.Ct. 2382, the Supreme Court invalidated a Texas statute which withheld from local school districts any state funds for the education of children who were not legally admitted into the United States, and which authorized local school districts to deny enrollment to such children. The Court held that the statute violated the Equal Protection Clause of the Fourteenth Amendment, stating that children, who were the plaintiffs in the case before it, "`can affect neither their parents' conduct nor their own status.'" Id. at 220, 102 S.Ct. at 245, citing Trimble v. Gordon, 430 U.S. 762, 770, 97 S.Ct. 1459, 1465, 52 L.Ed.2d 31 (1977). The Court held that to punish children for the conduct of their parents "does not comport with fundamental conceptions of justice." Id. The Court went on to cite its ruling in Weber v. Aetna Casualty & Surety Co., 406 U.S. 164, 175, 92 S.Ct. 1400, 1406-07, 31 L.Ed.2d 768 (1972):
"[V]isiting condemnation on the head of an infant is illogical and unjust. Moreover, imposing disabilities on the ... child is contrary to the basic concept of our system that legal burdens should bear some relationship to individual responsibility or wrongdoing. Obviously, no child is responsible for his birth and *1212 penalizing the ... child is an ineffectual as well as unjust way of deterring the parent."
457 U.S. at 220, 102 S.Ct. at 245. See also Levy v. Louisiana, 391 U.S. 68, 88 S.Ct. 1509, 20 L.Ed.2d 436 (1968).
The government has offered neither a compelling state interest for maintenance of the statute, nor even a minimally rational one. Administrative costs cannot be offered by the government as justification, nor a fear of involvement with foreign laws and records. Fiallo, 430 U.S. at 813-814, 97 S.Ct. at 1489 (Marshall, J., dissenting). These justifications, even if they had been offered by the government, are insufficient to justify the statute.
Indeed, there can be no compelling or rational government interest for applying the statute in the instant case. Where it is undisputed that one parent of a foreign born child is a United States citizen, there is no reason to require that the citizen parent file a formal acknowledgment of the child before she reaches majority in order for the child to be considered a citizen. In the case at bar, plaintiff's father acknowledged in correspondence that he was plaintiff's father. Because he nevertheless failed to file a formal acknowledgment, thus "legitimating" her, before she reached the age of 21, under the Act plaintiff cannot be considered a citizen. If she is his daughter and in the instant case there is no dispute that she is why should her citizenship rights depend upon his saying so? It is wrong for a father to have the unilateral ability to confer or deny citizenship to his daughter.
The second requirement of the Act that plaintiff has also failed to meet is the residence retention requirement. The constitutionality of this requirement must be analyzed in light of the court's earlier discussion as to the "legitimation" requirement. As applied to an "illegitimate" child, the residence retention requirements constitute a denial of equal protection to "illegitimate" children, and therefore must likewise be invalidated.
There is no compelling, or even rational justification for the residence retention requirement. Indeed, in the Congressional debate surrounding the repeal of § 301(b) in 1978, Members of Congress indicated that the purpose of the Act, of ensuring that future citizens have a strong tie to this country and preventing a long line of foreign born citizens who have never been in the United States, is fulfilled by the residence requirements placed upon the citizen parent. As one Member of Congress noted during the debate on the repeal of § 301(b),
a U.S. citizen may not transmit citizenship to his children born abroad unless the parent has previously resided in the United States [for the requisite period of time]. H.R. 13349 does not change these transmission requirements.
Sept. 19, 1978 Congressional Record-House at 30130, Plt.Exh. B1. The Members of Congress further asserted that the residence retention requirements placed on the children creates bureaucratic havoc for the agencies, hardships on families of foreign born citizens, and is not necessary to fulfill the purposes of the Act. See id. ("the [Judiciary Committee does not believe that this residence requirement is necessary for the proper administration of our naturalization laws.... These provisions no longer have any significant operative effect."). Members of the House of Representatives further noted that the Departments of State and Justice had reported that the section had been difficult to administer, and that its application had resulted in hardships in some cases. Id. at 30131. The Members urged repeal of the Section in order to "correct an inequity which has developed in our citizenship law." Id. at 30130.
As applied to "illegitimate" children, the requirement is even more unjustifiable. As a factual matter, it is unlikely that a child not recognized by her citizen father would or could travel to this country in order to retain her citizenship rights. Moreover, without the emotional and perhaps financial support of a parent in this country, it is unlikely that a foreign born child would manage to arrive and thrive in the United States at the young age and for *1213 the significant period of time required by the Act.
Furthermore, it would be very difficult for that child to enter this country in order to fulfill the retention requirements: Without a citizen-parent's formal acknowledgment and backing, how would she be able to attain a visa? While some of the cases before the courts under § 309 have involved children who arrived in this country on a student visa, a statute cannot make the retention of citizenship rights contingent upon the possibility that a foreign born citizen will obtain a student visa from the INS for a sufficient number of years, consecutively, during the requisite ages under the Act. In other words, while the Act requires a foreign born citizen to reside in this country in order to retain that citizenship, there is little chance that an "illegitimate" foreign born citizen could meet those requirements.
In Rogers v. Bellei, 401 U.S. 815, 91 S.Ct. 1060, 28 L.Ed.2d 499, the Supreme Court emphasized that Congress' discretion in enacting laws governing the citizenship rights of persons born abroad are very broad. The Court upheld the power of Congress to confer conditional citizenship under § 309. The Court concluded that Fourteenth Amendment rights of citizenship did not extend to persons not literally naturalized in the United States, and thus upheld the congressional condition as "not unreasonable, arbitrary, or unlawful." Id. at 831, 91 S.Ct. at 1069.
However, the instant case is distinguishable. The issue presented by the instant case is a challenge to the constitutionality of the provisions regarding "illegitimates," rather than a challenge to the constitutionality of the conditionality of Congress' grant of citizenship to foreign born persons. Y.T. v. Bell, 478 F.Supp. 828, 832 (W.D.Pa.1979).[5] In Bellei, the petitioner challenged § 309 under the Fifth, Eighth and Ninth Amendments to the United States Constitution; in the instant case, the challenge is under the Equal Protection Clause of the Fourteenth Amendment. The instant case presents a situation that is "unreasonable" and "arbitrary," as well as "unlawful," under the Equal Protection Clause, in contrast to the Court's holding in Bellei.
The discrimination in § 309 between persons on the basis of "legitimacy" is an archaic reminder of past discriminatory treatment of individuals in society, both in terms of the stigma of the label "illegitimate" with which it branded the children of unwed parents, and in terms of the sex discrimination that was reflected in the law that a man could "legitimate" a child, whereas a woman could not. In addition to being inhumane and unfair in this way, a distinction on the basis of "legitimacy" is also an impractical distinction in today's society, where unwed mothers abound, and single parenthood has become a norm. As such, not only is the explicit "legitimate/illegitimate" distinction in the Act unreasonable and unlawful, but also the residence retention requirement in § 301 of the Act is unlawful as applied to "illegitimates," because it promotes the efficacy of the "legitimate/illegitimate" distinction.
Accordingly, the court concludes that the distinction in the Act between "legitimate" and "illegitimate" children is an unconstitutional violation of the Equal Protection Clause. The court further holds that the residence retention requirements in the Act are an unconstitutional violation of the Equal Protection Clause as applied to "illegitimates," because those requirements ultimately sanction and perpetuate a discrimination in the law against "illegitimate" children which the court has found unconstitutional.[6]
*1214 The court concludes that, whether plaintiff's citizenship application is analyzed under § 201, § 301, or § 309, both statutes are unconstitutional as applied to "illegitimate" children. Section 309 is unconstitutional because of its requirement that a foreign born child of a United States citizen be formally "legitimated" by the age of 21, and § 201 and § 301 are unconstitutional because the retention requirements are essentially impossible for an "illegitimate" to meet. Accordingly, plaintiff's case is remanded to the INS for proceedings consistent with this opinion.
NOTES
[1] This correspondence cannot under the law substitute for the filing of a formal acknowledgment of paternity to "legitimate" plaintiff.
[2] To challenge that denial plaintiff filed a complaint with this court, which was dismissed for lack of jurisdiction.
[3] Defendants further note that plaintiff's Amended Complaint is in effect a petition for a Writ of Habeas Corpus, since it amended an earlier habeas petition submitted by plaintiff, which was dismissed in November 1989 because plaintiff's appeal to the BIA was still pending. However, because the instant complaint is not in the proper form of a petition for habeas corpus, the court will not consider it as such.
[4] The court notes the strong dissent of Justice Black in Bellei, in which he criticized the standard used by the majority: "not one of these tests appears in the Constitution." 401 U.S. at 837, 91 S.Ct. at 1072.
[5] The court in Y.T., 478 F.Supp. at 832, stated that "[e]xtending the holdings of Fiallo and Bellei beyond their particular facts might impinge upon other holdings of the Supreme Court to the effect that citizenship derived by naturalization is not inferior to that derived by native birth, Schneider v. Rusk, 377 U.S. 163, 165, 84 S.Ct. 1187, 1188-89, 12 L.Ed.2d 218 (1964), and that citizenship, once granted, is presumably retained unless voluntarily relinquished, Afroyim v. Rusk, 387 U.S. 253, 262 87 S.Ct. 1660, 18 L.Ed2d 757 (1967)."
[6] The court's holding may be analogized to the "disparate impact" doctrine under Title VII, where distinctions are invalidated not only where they unlawfully disadvantage protected groups on their face, but also where distinctions have the impact of discriminating against a protected group. See Griggs v. Duke Power, 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). Although the residency retention requirements are not explicitly based on a distinction violative of the Equal Protection Clause, they effectively maintain in force such a distinction, since "illegitimate" children would have no reason to come to the United States to reside in conformance with the retention requirements, nor would they have any legal right to obtain a visa to do so.
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777 F.Supp. 629 (1991)
HOME LIFE INSURANCE COMPANY, a New York corporation, Plaintiff,
v.
AMERICAN NATIONAL BANK AND TRUST COMPANY, as Trustee under a Trust Agreement dated June 20, 1980 and known as Trust No. 49971, and 300 Michigan Associates Limited Partnership, an Illinois Limited Partnership, Defendants.
No. 91 C 4979.
United States District Court, N.D. Illinois, E.D.
October 23, 1991.
*630 Heidi A. Gerstman, Hopkins & Sutter, P.C., Chicago, Ill., for plaintiff.
John T. Schriver, McDermott, Will & Emery, P.C., Chicago, Ill., for defendants.
*631 MEMORANDUM OPINION AND ORDER
ILANA DIAMOND ROVNER, District Judge.
I. INTRODUCTION
Plaintiff Home Life Insurance Company ("Home Life") has filed a complaint for foreclosure relating to property located at 300 North Michigan Avenue in Chicago, Illinois. Plaintiff alleges that defendants American National Bank and Trust Company ("American National") and 300 Michigan Associates Limited Partnership have defaulted on a Mortgage and Security Agreement and the Mortgage Note secured thereby. Plaintiff now has moved for the appointment of a receiver for the property. The Court will grant plaintiff's motion.
II. ANALYSIS
As authority for its request for the appointment of a receiver, plaintiff relies upon ¶ 15-1701(b)(2) of the Illinois Mortgage Foreclosure Law ("IMFL"), Ill. Rev.Stat. ch. 110, ¶¶ 15-1101 through 15-1706. That statute provides that in cases involving nonresidential real property,
... if (i) the mortgagee is so authorized by the terms of the mortgage or other written instrument, and (ii) the court is satisfied that there is a reasonable probability that the mortgagee will prevail on a final hearing of the cause, the mortgagee shall upon request be placed in possession of the real estate, except that if the mortgagor shall object and show good cause, the court shall allow the mortgagor to remain in possession.
Ill.Rev.Stat. ch. 110, ¶ 15-1701(b)(2). Moreover, ¶ 15-1702(a) of the IMFL provides that "[w]henever a mortgagee entitled to possession so requests, the court shall appoint a receiver." (emphasis added.) Thus, the IMFL creates a presumption in favor of the mortgagee's right to possession of nonresidential real property during the pendency of a mortgage foreclosure proceeding. See Travelers Insurance Co. v. LaSalle National Bank, 200 Ill.App.3d 139, 146 Ill.Dec. 616, 618, 558 N.E.2d 579, 581 (2d Dist.1990); see also Resolution Trust Corp. v. American National Bank, 1991 WL 128683, *1, 1991 U.S.Dist. LEXIS 9481, *2 (N.D.Ill. July 11, 1991) (Conlon, J.); Federal Home Loan Mortgage Corp. v. Dearborn Street Building Associates, Ltd., 1991 WL 18431, *3, 1991 U.S.Dist. LEXIS 1286, *8 (N.D.Ill. Feb. 6, 1991) (Gottschall, U.S.Mag.). To obtain possession of such property, the mortgagee is not required either to allege or to prove "misdeeds or omissions on the part of the mortgagors." Travelers Insurance Co., 146 Ill. Dec. at 619, 558 N.E.2d at 582.
Plaintiff contends that the appointment of a receiver is authorized by the terms of the mortgage in this case. Paragraph 2.03(a) of the Mortgage and Security Agreement provides that in the event of a default and upon the demand of the mortgagee, the mortgagor is required to surrender possession of the property to the mortgagee. (Complaint, Ex. A ¶ 2.03.) In addition, pursuant to ¶ 2.05 of the Mortgage and Security Agreement, Home Life also is entitled to the appointment of a receiver "to take possession of and to operate the Mortgaged Property and to collect and apply the rents, issues, profits and revenues thereof." (Id. ¶ 2.05.) Thus, plaintiff has satisfied the first requirement for appointment of a receiver under ¶ 15-1701(b)(2) of the IMFL, in that it is authorized by the terms of the mortgage to take possession of the property in the event of a default.
Plaintiff also has shown that there is a reasonable probability that it will prevail on a final hearing in this case. Plaintiff has established, and in fact defendants admit, that they have failed to pay the monthly installments of interest, late charges, and real estate tax escrow payments due under the terms of the mortgage on and after June 1, 1991. (Aff. of Dawn Robertson ¶ 2; Answer at 6.) This is sufficient to establish a reasonable probability of prevailing under ¶ 15-1701(b)(2). See Federal Home Loan Mortgage Corp., 1991 WL 18431, at *3, 1991 U.S.Dist. LEXIS 1286, at *9. Having satisfied the conditions for the appointment of a receiver pursuant to the IMFL, plaintiff is afforded the benefit of that statute's presumption in *632 favor of such an appointment. Unless defendants can show "good cause" why their right to possession should not be disturbed, plaintiff's motion for appointment of a receiver must be granted.
Defendants have objected to plaintiff's motion, insisting that there is good cause to keep them in possession of the premises. The Illinois courts have not precisely defined the meaning of "good cause" under ¶ 15-1701(b)(2) (see Resolution Trust Corp., 1991 WL 128683, at *2, 1991 U.S.Dist. LEXIS 9481, at *3), and as a result, defendants submit a number of alleged grounds for "good cause" in this case. First, defendants maintain that there is no more qualified manager for the 300 North Michigan Avenue property than the current manager U.S. Equities Realty, Inc. ("U.S. Equities"). (Aff. of Robert A. Wislow ¶ 8.) Even assuming that such is the case, however, the qualifications of current property management are not an important consideration under the IMFL when the property is in default. Plaintiff is not required to show that the current manager is unqualified or that it is guilty of some misdeed in order to obtain the appointment of a receiver. Such a requirement would be tantamount to shifting the burden of showing good cause onto the mortgagee. Travelers Insurance Co., 146 Ill.Dec. at 619, 558 N.E.2d at 582. It is the mortgagor's burden under the statute to establish that it should remain in possession of the premises, not the mortgagee's burden to show good cause for the appointment of a receiver. The fact that U.S. Equities may be a qualified and experienced property manager does not establish "good cause" where plaintiff has made a showing that the property is in default.
Next, defendants suggest that sensitive negotiations with a prospective tenant for a portion of the property would be jeopardized by the appointment of a receiver. Specifically, defendants represent that U.S. Equities currently is in negotiations with an educational institution and that those negotiations may lead to an equity investment and a commitment for space in the building. (Wislow Aff. ¶ 6.) Defendants contend that if a receiver is appointed, "there is a substantial likelihood that the on-going negotiations with the educational institution will terminate" because the price that the institution would be willing to pay "will be substantially reduced in a foreclosure context." (Id. at ¶ 9.)[1] The alleged possibility of threatened lease negotiations is insufficient to overcome the statutory presumption in favor of the appointment of a receiver. Defendants have produced no evidence to support their assertion that appointment of a receiver would jeopardize pending negotiations. Moreover, the Court agrees with plaintiff that the acceptance of defendants' argument of pending lease negotiations would make it extremely difficult for a mortgagee ever to obtain appointment of a receiver because such an assertion could be made in every case. There similarly has been no showing that plaintiff's designated receiver, Rubloff, Inc. ("Rubloff"), would not adequately manage the property and conduct existing and future lease negotiations on behalf of the property. The mere possibility of existing lease negotiations does not overcome the statutory presumption in favor of the appointment of a receiver. See Travelers Insurance Co. v. 100 LaSalle Associates, 1990 WL 156523, *2, 1990 U.S.Dist. LEXIS 13308, *7-8 (N.D.Ill. Oct. 9, 1990) (Plunkett, J.) (bald assertion that efforts to sell the property would be threatened by appointment of a receiver "is not good cause for the retention of possession in the face of the IMFL's presumption that the mortgagee of non-residential real estate shall be placed in possession" of the property).
Finally, defendants contend that because they have made objection to plaintiff's motion, they are entitled to an evidentiary hearing pursuant to ¶ 15-1706(c) of the IMFL, Ill.Rev.Stat. ch. 110, ¶ 15-1706(c). In particular, defendants contend that a *633 hearing is necessary on the following issues: (a) whether plaintiff needs a receiver for this property; (b) whether the proposed receiver is qualified to manage the property; (c) the fees to be charged by the receiver and whether those fees are reasonable; (d) whether an appointed receiver should be required to post a bond; and (e) whether the mortgagor and its agent are qualified to remain in possession of the property. (Defendants' Mem. at 2.) The Court does not agree that a further evidentiary hearing is required in this case. Such a hearing would only serve to delay the inevitable resolution of plaintiff's motion.
The statutory provision relied on by defendants to establish their right to a hearing, ¶ 15-1706(c), provides as follows:
After reasonable notice has been given to all other parties, the court shall promptly hold a hearing and promptly rule on a request that a mortgagee be placed in possession or that a receiver be appointed, except that, if no objection to the request is made prior to the time specified for the hearing, the court shall rule without a hearing.
Ill.Rev.Stat. ch. 110, ¶ 15-1706(c). This provision does not require a further evidentiary hearing in this case. Plaintiff filed its motion for appointment of a receiver on September 16, 1991, and the Court conducted a hearing on that motion on September 19, 1991. At that hearing, defendants objected to the appointment of a receiver and sought the opportunity to show good cause why they should remain in possession of the property. Therefore, the Court set a briefing schedule on plaintiff's motion to provide defendants that opportunity. The Court has concluded above that defendants failed to establish good cause either in the September 19 hearing or in their brief before this Court. A further hearing would not alter this determination.
In particular, the Court concludes that a hearing is not required with respect to any of the five issues delineated by defendants above. First, plaintiff's need for a receiver is not a relevant consideration under the IMFL. A hearing, therefore, is not required on this issue. Similarly, the Court previously has determined that any exemplary qualifications of defendants and their agent U.S. Equities are insufficient to establish good cause. As to the qualifications of the proposed receiver and the fees that it will charge, defendants have not established their need for a hearing on these issues. Defendants have not suggested that Rubloff is unqualified to manage the property or that its fees will be excessive. Pursuant to ¶ -1702(b) of the IMFL, the mortgagee is entitled to designate the receiver to be appointed, and the Court should reject that designation only when the mortgagor objects to the designation and shows good cause, or if the Court itself does not approve of the designee. The Court has no objection to the appointment of Rubloff, and defendants have not shown good cause why Rubloff should not be appointed in this case. Thus, there is no need for a hearing on Rubloff's qualifications or the fees that it will charge.
Finally, defendants contend that a hearing is required on the issue of whether the receiver should post a bond. No hearing is required on this issue, however, because plaintiff makes no objection to the posting of a bond. (Plaintiff's Reply Mem. at 5.) Therefore, the Court concludes that a bond would be appropriate in this case. Accordingly, plaintiff's receiver will be required to post a bond pursuant to ¶ 15-1705(b) of the IMFL, Ill.Rev.Stat. ch. 110, ¶ 15-1705(b), and ¶ 2-415(a) of the Illinois Code of Civil Procedure, Ill.Rev.Stat. ch. 110, ¶ 2-415(a). Once such a bond is posted and approved by the Court, an order will enter appointing Rubloff as receiver.
III. CONCLUSION
For the reasons set forth above, plaintiff's motion for the appointment of a receiver is granted. Once plaintiff posts an appropriate bond and that bond is approved by the Court, the Court will appoint Rubloff, Inc. as the receiver of the 300 North Michigan Avenue property.
NOTES
[1] Wislow goes on to state that "[m]y experience as well as industry practice has taught me that third-party purchasers of commercial property will wait until a foreclosure sale rather than commit their funds through arms-length negotiation. I do anticipate that the pending negotiations will be concluded within the next four (4) weeks." (Id.)
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