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https://www.courtlistener.com/api/rest/v3/opinions/2764120/	[Cite as State v. Netter, 2014-Ohio-5668.] IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT State of Ohio, : Plaintiff-Appellee, : No. 14AP-544 v. : (C.P.C. No. 99CR-6674) Gregory Netter, : (ACCELERATED CALENDAR) Defendant-Appellant. : D E C I S I O N Rendered on December 23, 2014 Ron O'Brien, Prosecuting Attorney, and Laura R. Swisher, for appellee. Gregory Netter, pro se. APPEAL from the Franklin County Court of Common Pleas CONNOR, J. {¶ 1} Defendant-appellant, Gregory Netter, appeals from a judgment of the Franklin County Court of Common Pleas denying his motion to vacate his conviction and sentence. For the reasons that follow, we affirm the judgment of the trial court. A. Facts and Procedural History {¶ 2} On January 31, 2000, a Franklin County Grand Jury indicted appellant on charges of aggravated murder with a death penalty specification, murder, aggravated robbery, and kidnapping. Each of the charges contained a firearm specification. Appellant was also charged with having a weapon while under disability. On November 16, 2000, appellant entered a plea of guilty to aggravated murder with a 3-year firearm specification. Pursuant to a plea agreement, the prosecutor withdrew all other counts in the indictment and all other specifications, including the death penalty specification. The No. 14AP-544 2 trial court convicted appellant of aggravated murder and sentenced him to a prison term of 20 years to life, with an additional 3 years for the firearm specification. {¶ 3} On August 31, 2012, more than 11 years after the trial court imposed sentence, appellant filed a motion with the trial court seeking to overturn his conviction and sentence. The stated grounds for the motion are that Crim.R. 11(C)(3) and R.C. 2945.06 require a three-judge panel to determine his guilt of the charge of aggravated murder and to pronounce sentence. Appellant claimed that because the trial court failed to comply with the statute and rule, his conviction and sentence are void. {¶ 4} On June 19, 2014, the trial court denied appellant's motion. Appellant filed a timely notice of appeal to this court on July 14, 2014. B. Assignments of Error {¶ 5} App.R. 16(A) requires that an "appellant shall include in its brief, under the headings and in the order indicated * * * [a] statement of the assignments of error presented for review, with reference to the place in the record where each error is reflected," and a "statement of the issues presented for review, with references to the assignments of error to which each issue relates." App.R. 16(A)(3) and (4). Appellant's brief does not satisfy either of these requirements. {¶ 6} Nevertheless, the assignment of error is readily discernible from appellant's argument and appellee's brief contains a response to appellant's "assignment of error." (Appellee's brief, 3.) There being no prejudice to appellee resulting from appellant's failure to comply with App.R. 16(A)(3) and (4), we will review this appeal based on the following assignment of error: I. The trial court erred when it denied appellant's motion to vacate his conviction and sentence. C. Standard of Review {¶ 7} As a general rule, "[w]here a criminal defendant files a 'motion for sentencing' arguing a denial of rights and seeking to void a judgment and vacate sentencing subsequent to his or her direct appeal, the motion will be treated as a petition for postconviction relief." State v. Draughon, 10th Dist. No. 13AP-345, 2014-Ohio-1460, citing State v. Bankston, 10th Dist. No. 13AP-250, 2013-Ohio-4346, ¶ 7. The appropriate standard for reviewing a trial court's decision to dismiss a petition for post-conviction No. 14AP-544 3 relief, without an evidentiary hearing, involves a mixed question of law and fact. Id. citing State v. Tucker, 10th Dist. No. 12AP-158, 2012-Ohio-3477, ¶ 9. This court must apply a manifest-weight standard in reviewing a trial court's findings on factual issues underlying the substantive grounds for relief, but we must review the trial court's legal conclusions de novo. Id. Inasmuch as appellant's challenge to his conviction and sentence raises a purely legal issue, we will apply a de novo standard of review. D. Legal Analysis {¶ 8} R.C. 2945.06 provides in relevant part as follows: In any case in which a defendant waives his right to trial by jury and elects to be tried by the court under section 2945.05 of the Revised Code, any judge of the court in which the cause is pending shall proceed to hear, try, and determine the cause in accordance with the rules and in like manner as if the cause were being tried before a jury. * * * If the accused pleads guilty of aggravated murder, a court composed of three judges shall examine the witnesses, determine whether the accused is guilty of aggravated murder or any other offense, and pronounce sentence accordingly. (Emphasis added.) {¶ 9} Crim.R. 11(C)(3) states in pertinent part: With respect to aggravated murder * * * If the indictment contains one or more specifications that are not dismissed upon acceptance of a plea of guilty or no contest to the charge, or if pleas of guilty or no contest to both the charge and one or more specifications are accepted, a court composed of three judges shall: (a) determine whether the offense was aggravated murder or a lesser offense; and (b) if the offense is determined to have been a lesser offense, impose sentence accordingly; or (c) if the offense is determined to have been aggravated murder, proceed as provided by law to determine the presence or absence of the specified aggravating circumstances and of mitigating circumstances, and impose sentence accordingly. (Emphasis added.) {¶ 10} Appellant argues that Crim.R. 11(C)(3) and R.C. 2945.06 required a three- judge panel to determine his guilt and to pronounce sentence because he was indicted for No. 14AP-544 4 aggravated murder with a death penalty specification. Appellant claims that the trial court's failure to comply with the statute and rule renders his conviction and sentence void ab initio. Appellee argues that a three-judge panel is not required where the state dismisses the death penalty specification pursuant to a plea agreement. The trial court agreed with appellee and denied appellant's motion. {¶ 11} This court recently decided a case involving a similar violation of Crim.R. 11(C)(3) and R.C. 2945.06 in State v. Hayden, 10th Dist. No. 14AP-361, 2014-Ohio-5107. In that case, the defendant filed a "Motion for Issuance of a Final Appealable Order" more than 20 years after the trial court convicted him and pronounced sentence. Therein, the defendant asserted that the trial court erred in failing to convene a three-judge panel to accept his guilty plea and pronounce his sentence and that his conviction and sentence were rendered void. Relying on our prior decision in State v. Mack, 10th Dist. No. 13AP- 884, 2014-Ohio-1648, we held that res judicata barred defendant from obtaining relief from his conviction and sentence "regardless of how the petition is characterized." Hayden at ¶ 8. In so holding, we set forth our reasoning as follows: "Although res judicata does not preclude review of a 'void' sentence, the doctrine 'still applies to other aspects of the merits of a conviction, including the determination of guilt and the lawful elements of the ensuing sentence.' " State v. Ragland, 10th Dist. No. 13AP-451, 2014-Ohio-798, ¶ 14, quoting State v. Fischer, 128 Ohio St.3d 92, 2010-Ohio-6238, paragraph three of the syllabus. Thus, the doctrine bars attacks on voidable judgments but not void judgments. Appellant did not raise his sentencing arguments in a direct appeal. Therefore, even if the court erred in the manner appellant claimed, this error would render his judgment voidable, not void. In Pratts v. Hurley, 102 Ohio St.3d 81 (2002), the Supreme Court of Ohio determined the failure to convene a three-judge panel must be raised on direct appeal and "does not constitute a lack of subject matter jurisdiction that renders the court's judgment void ab initio and subject to collateral attack." State v. Tucker, 10th Dist. No. 12AP–158, 2012-Ohio-3477, ¶ 7, 13 (judgment that does not comply with R.C. 2945.06 and Crim.R. 11(C) is voidable, not void). * * * Because appellant's sentence was not void, the trial court properly found his arguments should have been raised on direct appeal. No. 14AP-544 5 Id. at ¶ 8-9. {¶ 12} Appellant's motion raises the same issue we addressed in Hayden, and under virtually the same facts. Here, as in Hayden, appellant failed to raise the alleged sentencing errors in a direct appeal from his conviction and sentence. In fact, the record shows that we denied appellant's motion for delayed appeal on January 22, 2002. Accordingly, under Hayden, even if we were to accept appellant's assertion that the trial court erred by failing to convene a three-judge panel to determine his guilt and to impose sentence, such an error would render the conviction and sentence voidable, not void. Because the conviction and sentence are not void, appellant should have raised his arguments in a direct appeal to this court. Appellant's failure to do so bars him from raising the issues by way of a post-conviction motion, regardless of how the motion is characterized. Hayden, Mack. {¶ 13} Based upon the foregoing, we find that res judicata barred appellant from raising a violation of Crim.R. 11(C)(3) and R.C. 2945.06 as a basis for obtaining relief from his conviction and sentence. Thus, we conclude that the trial court did not err in denying appellant's motion, albeit for different reasons. Appellant's sole assignment of error is overruled. E. Conclusion {¶ 14} Having overruled appellants' sole assignment of error, we affirm the judgment of the Franklin County Court of Common Pleas. Judgment affirmed. SADLER, P.J. and DORRIAN, J., concur. _________________	01-03-2023	12-23-2014
https://www.courtlistener.com/api/rest/v3/opinions/2764121/	[Cite as State v. Morgan, 2014-Ohio-5661.] IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT State of Ohio, : Plaintiff-Appellee, : No. 13AP-620 (C.P.C. No. 12CR-5458) v. : (REGULAR CALENDAR) Raymond Morgan, : Defendant-Appellant. : D E C I S I O N Rendered on December 23, 2014 Ron O'Brien, Prosecuting Attorney, and Seth L. Gilbert, for appellee. Timothy Young, Ohio Public Defender, and Charlyn Bohland, for appellant. APPEAL from the Franklin County Court of Common Pleas LUPER SCHUSTER, J. {¶ 1} Defendant-appellant, Raymond Morgan, appeals from a judgment entry of the Franklin County Court of Common Pleas finding him guilty, pursuant to a guilty plea, of one count of burglary, two counts of felonious assault with accompanying firearm specifications, and one count of aggravated robbery with accompanying firearm specification. For the following reasons, we affirm in part and reverse in part. I. Facts and Procedural History {¶ 2} This case originated as three separate complaints in the Franklin County Court of Common Pleas, Division of Domestic Relations, Juvenile Branch ("juvenile court") alleging appellant was a delinquent child. The first complaint charged appellant with two counts of felonious assault, second-degree felonies, in violation of R.C. No. 13AP-620 2 2903.11(A)(2) if committed by an adult, with accompanying firearm specifications attached to each count. The second complaint charged appellant with one count of aggravated robbery, a first-degree felony, in violation of R.C. 2911.01(A)(1) if committed by an adult, one count of robbery, a second-degree felony, in violation of R.C. 2911.02(A)(1) if committed by an adult, one count of felonious assault, a second-degree felony, in violation of R.C. 2903.11(A)(1) if committed by an adult, and one count of kidnapping, a first-degree felony, in violation of R.C. 2905.01(A)(2) if committed by an adult, with accompanying firearm specifications attached to each count. The third complaint charged appellant with one count of receiving stolen property, a fifth-degree felony, in violation of R.C. 2913.51(A) if committed by an adult. Appellant was 16 years old at the time of the commission of the offenses and at the time the state filed the three complaints. {¶ 3} By motions filed March 5, 15, and 27, 2012, the state moved the juvenile court, pursuant to Juv.R. 30 and R.C. 2152.12(B), to relinquish its jurisdiction and transfer the three cases to the general division of the common pleas court for criminal prosecution of appellant as an adult. {¶ 4} At a hearing on June 14, 2012, appellant expressed a desire to the juvenile court to have his attorney removed from the case "[b]ecause he's not trying to help me go home." (June 14, 2012 Tr. 5.) The juvenile court determined appellant's counsel was providing adequate and appropriate representation for appellant and directed that appellant's counsel continue on in the case. {¶ 5} The juvenile court conducted probable cause hearings for each of the three complaints and found there was probable cause to believe that appellant committed all of the charged offenses. {¶ 6} On October 24, 2012, the juvenile court conducted an amenability hearing for each of three complaints. Appellant was represented by counsel at the hearing but did not have a parent or guardian present; his father died in January of that year and his mother died shortly before the amenability hearing. The juvenile court noted it had considered the psychological evaluation of Dr. Barbara Bergman recommending appellant is amenable to care and/or rehabilitation in the juvenile system. The court nonetheless noted "the particularly egregious nature of this gun violence crime spree," and concluded No. 13AP-620 3 appellant is not amenable to care or rehabilitation in the juvenile system. (Oct. 24, 2012 Tr. 17.) The juvenile court sustained the state's motion to relinquish jurisdiction to the general division of the common pleas court in an October 24, 2012 entry. {¶ 7} Upon transfer, the general division of the common pleas court consolidated all three juvenile cases into a single case number. Following transfer of jurisdiction, the Franklin County Grand Jury returned a 13-count indictment reflecting the same charges listed in the juvenile court complaints. {¶ 8} Appellant initially entered a plea of not guilty. On April 30, 2013, appellant entered a guilty plea to an amended complaint of one count of burglary, two counts of felonious assault enhanced with firearm specifications, and one count of aggravated robbery enhanced with a firearm specification. At the plea hearing, the prosecutor recited the pertinent facts. {¶ 9} According to the stipulated facts, the offenses contained in appellant's indictment occurred in four separate incidents over the course of two days. On February 8, 2012, police received a report from Craig Youngman that someone had broken into his residence and stolen two semiautomatic handguns, a camera, and a camera lens. Later that same day, Bruce Sedlock was walking into his home through his front door when he heard a gunshot and realized he had been shot in the leg. He located a spent bullet on the kitchen floor, called police, and was transported to Grant Medical Center by ambulance. {¶ 10} Approximately 30 minutes later, Eric Hayes exited his vehicle on Steward Avenue when he saw two males walk by him. He heard two gunshots and realized he had been shot. Hayes was also transported to Grant Medical Center where he underwent surgery to remove his spleen as a result of the gunshot wounds. Hayes did not get a clear look at the person who shot him. {¶ 11} The next day, February 9, 2012, Jimmy White was walking alone on East Whittier Street when he passed appellant, R.D., and Joshua Morgan, appellant's brother. When White looked over his shoulder, he saw Joshua approaching him with a handgun which he pointed at White and demanded White's property. White pulled a utility knife from his pocket and stabbed Joshua in the neck while at the same time trying to wrestle the gun away from him. During the struggle for the gun, White was shot in the left leg. No. 13AP-620 4 White eventually succeeded in grabbing Joshua's gun only to realize appellant and R.D. were approaching him and R.D. was also holding a gun. White shot R.D. as he approached, and appellant and Joshua fled the scene. {¶ 12} Through the course of their investigation, police were able to determine that appellant and R.D. were responsible for all four incidents while Joshua was only involved in the February 9, 2012 incident. The firearm used to shoot Sedlock, Hayes, and White was one of the weapons reported stolen from Youngman's residence. Additionally, police recovered Youngman's camera at the shared residence of appellant and Joshua. {¶ 13} The trial court accepted appellant's guilty plea and sentenced him at a May 22, 2013 sentencing hearing to 3 years for the burglary conviction, 3 years each for the two felonious assault convictions with additional 3-year firearm specifications attached to each, and 3 years for the aggravated robbery conviction with an additional 3- year firearm specification. The trial court further ordered the 3-year burglary sentence to run concurrent with the two felonious assault and one aggravated robbery sentences, which are to be served consecutive to each other for a total sentence of 18 years imprisonment. The trial court journalized appellant's convictions and sentence in a May 23, 2013 judgment entry. Appellant did not timely appeal but requested leave to file a delayed appeal pursuant to App.R. 5(A). We granted appellant's motion for leave to file delayed appeal. State v. Morgan, 10th Dist. No. 13AP-620 (Jan. 16, 2014) (memorandum decision). II. Assignments of Error {¶ 14} Appellant assigns the following five assignments of error for our review: I. The juvenile court committed plain error when it failed to appoint a guardian ad litem for [appellant's] amenability hearing, in violation of Juv.R. 4(B)(1) and R.C. 2151.281(A)(1). II. The trial court abused its discretion when it transferred [appellant's] case for criminal prosecution, in violation of R.C. 2152.12(B); Fifth and Fourteenth Amendments to the U.S. Constitution, and Article I, Section 10, Ohio Constitution. III. The juvenile court erred when it failed to investigate [appellant's] claim of ineffective assistance of defense counsel, in violation of the Sixth and Fourteenth Amendments to the No. 13AP-620 5 U.S. Constitution; and, Article I, Section 10, Ohio Constitution. IV. The trial court erred when it sentenced [appellant] to consecutive sentences without complying with R.C. 2929.14(C)(4), in violation of his right to due process as guaranteed by the Fourteenth Amendment to the U.S. Constitution; and, Article I, Section 16, Ohio Constitution. V. [Appellant] was denied the effective assistance of counsel, in violation of the Sixth and Fourteenth Amendments to the U.S. Constitution; Section 10, Article I, Ohio Constitution. III. First Assignment of Error – Guardian Ad Litem {¶ 15} In his first assignment of error, appellant argues it was reversible error for the juvenile court to fail to appoint a guardian ad litem for him at his amenability hearing. {¶ 16} The parties disagree over the standard we should apply in reviewing the juvenile court's failure to appoint a guardian ad litem for appellant prior to the amenability hearing. Appellant asserts that because both R.C. 2151.281(A)(1) and Juv.R. 4(B)(1) use mandatory language for the appointment of a guardian ad litem when a juvenile has no parents, the juvenile court's failure to appoint a guardian ad litem is reversible error as a matter of law. The state responds that appellant did not request the appointment of a guardian ad litem, so we may review only for plain error. {¶ 17} R.C. 2151.281 governs the appointment of a guardian ad litem in juvenile court proceedings. In relevant part, the statute provides that "[t]he court shall appoint a guardian ad litem, subject to rules adopted by the supreme court, to protect the interests of a child in any proceeding concerning an alleged or adjudicated delinquent child or unruly child when * * * [t]he child has no parent, guardian, or legal custodian." R.C. 2151.281(A)(1). Similarly, Juv.R. 4(B)(1) states that "[t]he court shall appoint a guardian ad litem to protect the interests of a child or incompetent adult in a juvenile court proceeding when * * * [t]he child has no parents, guardian, or legal custodian." {¶ 18} This court has never addressed the issue of whether the juvenile court's failure to comply with the mandates in R.C. 2151.281(A)(1) and Juv.R. 4(B)(1) is reversible error as a matter of law or whether an appellate court can review only for plain error where there is no objection to the trial court's failure to comply with the statute and rule. No. 13AP-620 6 However, we have previously considered a trial court's failure to appoint a guardian ad litem in other circumstances. In State v. Kendrick, 10th Dist. No. 98AP-1305 (Sept. 30, 1999), we analogized the failure to appoint a guardian under Civ.R. 17(B) to the failure to appoint a guardian in the juvenile system under Juv.R. 4 and reviewed only for plain error where no request for a guardian ad litem was made. Id. Similarly, we applied a plain error analysis to an incompetent adult's failure to object to the level of participation of the guardian ad litem at trial. In re K.J.D., 10th Dist. No. 12AP-652, 2013-Ohio-610, ¶ 50. {¶ 19} We have found plain error in matters involving a guardian ad litem in juvenile court proceedings " 'only in the extremely rare case involving exceptional circumstances where error seriously affects the basic fairness, integrity, or public reputation of the judicial process itself.' " In re A.L., 10th Dist. No. 07AP-638, 2008-Ohio- 800, ¶ 24, quoting In re McLemore, 10th Dist. No. 03AP-714, 2004-Ohio-680, ¶ 11. Stated another way, we will conclude the juvenile court committed plain error by failing to appoint a guardian ad litem for appellant "only if we conclude that the alleged error seriously affected the 'basic fairness, integrity, or public reputation' of the proceedings below." Id., citing Goldfuss v. Davidson, 79 Ohio St.3d 116 (1997), syllabus. {¶ 20} This court has consistently declined to find plain error in matters involving a guardian ad litem where the record does not demonstrate prejudice to the appellant. In Kendrick this court stated: "the failure to appoint a guardian ad litem does not constitute reversible error where no request for a guardian ad litem is made or defendant cannot show prejudice" and noted "the record fails to even hint at that which a guardian ad litem could contribute, or how defendant was prejudiced by the lack of one." Similarly, in K.J.D. this court concluded that even if the limited level of the guardian ad litem's participation at trial amounted to error, the appellant "has not pointed to anything in the record suggesting the [guardian ad litem's] not participating in proceedings prejudiced her, much less demonstrated the level of prejudice necessary for plain error." Id. at ¶ 50, citing In re Amber G. & Josie G., 6th Dist. No. L-04-1091, 2004-Ohio-5665, ¶ 17 (declining to presume prejudice and determining that even where a guardian ad litem was not appointed but clearly should have been, whether the error constitutes reversible error depends on "whether there was any prejudice by the failure to appoint a guardian ad litem"). No. 13AP-620 7 {¶ 21} We are cognizant that some other appellate districts have concluded that an appellant need not object to the trial court's failure to appoint a guardian ad litem in order to warrant reversal. In re K.B., 170 Ohio App.3d 121, 2007-Ohio-396, ¶ 12 (8th Dist.) (concluding that "the absence of an objection does not preclude a reversal due to the juvenile court's failure to appoint a [guardian ad litem] when required under R.C. 2151.281(A)(2) or Juv.R. 4(B)(2)"), citing In re Etter, 134 Ohio App.3d 484, 492 (1st Dist.1998); In re Cook, 11th Dist. No. 2003-A-0132, 2005-Ohio-5288, ¶ 30 (stating "the absence of an objection does not preclude a reversal due to the juvenile court's failure to appoint a guardian ad litem when required under R.C. 2151.281(A)(2) or Juv.R. 4(B)(2)," and determining the juvenile court abused its discretion when it did not appoint a guardian ad litem where "[a]n examination of the record clearly demonstrates at least the strong possibility of a conflict between appellant and his father"). Id. at ¶ 32. However, neither these cases nor the cases from this court squarely address the issue of a juvenile court's failure to appoint a guardian ad litem specifically under R.C. 2151.281(A)(1) or Juv.R. 4(B)(1). As the Fourth District recently explained, "[s]ome courts have held that a juvenile need not request a trial court to appoint a guardian ad litem or object to a court's failure to appoint one when a mandatory duty to do so exists." In re D.A.G., 4th Dist. No. 13CA3366, 2013-Ohio-3414, ¶ 45, citing In re Dennis, 11th Dist. No. 2006-A-0040, 2007- Ohio-2432, ¶ 29. "Other courts have reviewed an appellant's failure to request the trial court to appoint a guardian ad litem or to object using a plain error analysis." Id., citing In re M.T., 6th Dist. No. L-09-1197, 2009-Ohio-6674, ¶ 14-15; In re A.K., 9th Dist. No. 09CA0025-M, 2009-Ohio-4941, ¶ 8, rev'd on other grounds, In re Cases Held for the Decision in D.J.S., 130 Ohio St.3d 253, 2011-Ohio-5349; In re Smith, 3d Dist. No. 14-05- 33, 2006-Ohio-2788, ¶ 35; In re McHugh Children, 5th Dist. No. 2004CA00091, 2005- Ohio-2345, ¶ 37. The Fourth District has taken an approach less strict than plain error. In re Slider, 160 Ohio App.3d 159, 2005-Ohio-1457, ¶ 11 (4th Dist.). Thus, we recognize there is a lack of consistency among the various appellate districts throughout Ohio on this issue. However, given this court's precedent on matters more generally involving a guardian ad litem, we will review only for plain error and will not reverse unless appellant can demonstrate he suffered prejudice from the juvenile court's error. No. 13AP-620 8 {¶ 22} The record indicates appellant's father died in January 2012. Appellant's mother had attended each of appellant's hearings before the amenability hearing on October 24, 2012. However, at the October 24, 2012 hearing, appellant's counsel informed the juvenile court that appellant's mother had recently died. A woman who identified herself as appellant's "godsister" was present at his amenability hearing and appellant's counsel described her as "[a] very close friend of the family who's taken over the role of mom since her * * * recent death," but there is no indication in the record that this woman was appellant's legal guardian or custodian following the death of appellant's mother. (Oct. 24, 2012 Tr. 12.) {¶ 23} Because appellant had no parent, guardian or legal custodian at the time of his amenability hearing, he falls within the provisions of R.C. 2151.281(A)(1) and Juv.R. 4(B)(1). Additionally, because the statute and rule both use mandatory language for the appointment of a guardian ad litem in this situation, we agree with appellant that it was error for the trial court to fail to appoint a guardian ad litem. See, e.g., Smith at ¶ 34-35 (concluding that "because R.C. 2151.281(A) and Juv.R. 4(B) are mandatory, the juvenile court[']s failure to appoint a guardian ad litem when these provisions are applicable would constitute reversible error," but where the appellant failed to object to the absence of an appointed guardian ad litem, an appellate court will review only for plain error). We must next determine whether that error caused appellant to suffer prejudice sufficient to reverse on the basis of plain error. {¶ 24} The state first argues there was no prejudice to appellant because appellant was represented by counsel. As the state acknowledges, however, "[t]he duty of a lawyer to his client and the duty of a guardian ad litem to his ward are not always identical and, in fact, may conflict." In re Baby Girl Baxter, 17 Ohio St.3d 229, 232 (1985). "The role of guardian ad litem is to investigate the ward's situation and then to ask the court to do what the guardian feels is in the ward's best interest," while "[t]he role of the attorney is to zealously represent his client within the bounds of the law." Id. Nonetheless, the state argues the roles of attorney and guardian ad litem can often coincide and that they do so here. The state relies on the Sixth District's decision in M.T. for the proposition that there is no prejudice from the juvenile court's failure to appoint a guardian ad litem where counsel safeguard's the client's rights and advocates in accordance with the client's No. 13AP-620 9 wishes. Id. at ¶ 17. The state argues that "[i]t is difficult to imagine that a [guardian ad litem] would have recommended anything other than that [appellant] should not be bound over—which is exactly what [appellant's] counsel argued at the amenability hearing," so there was no indication that appellant's "best interests" conflicted with counsel's role in protecting appellant's substantive and procedural rights. (Appellee's Brief, 15.) Thus, the state would have us conclude that because appellant "failed to demonstrate how a guardian ad litem would have acted differently or produced a different result," appellant is unable to establish prejudice sufficient to warrant reversal under a plain error standard. M.T. at ¶ 18. {¶ 25} We agree generally that a guardian ad litem for appellant probably would have advocated for appellant's retention in the juvenile system rather than transfer to the general division of the common pleas court. Additionally, we have no way of knowing what a guardian would have argued because one was not appointed. See, e.g., State v. Roush, 10th Dist. No. 12AP-201, 2013-Ohio-3162, ¶ 42 (concluding that in considering an ineffective assistance of counsel claim, "[b]ecause we do not know what [an uncalled witness] would have said if he testified at trial, we cannot find that the absence of the [witness'] testimony prejudicially affected the outcome of defendant's trial"). While appellant articulates in a general sense the important function that a guardian ad litem provides in juvenile court, outlining the general requirements set forth in Sup.R. 48(D), appellant does not articulate how, specifically, the juvenile court's failure to appoint a guardian ad litem here prejudiced him. In addition to being represented by counsel who advocated that appellant not be bound over for criminal prosecution, appellant also had the comprehensive and favorable psychologist's report from Dr. Bergman. Taking these considerations together, we agree with the state that appellant is unable to demonstrate prejudice from the juvenile court's failure to appoint him a guardian ad litem. {¶ 26} Second, the state argues that the presence of appellant's self-identified "godsister" at the amenability hearing alleviated the necessity to appoint a guardian ad litem. While the extent of the godsister's role in appellant's life is unclear, we agree with the state that appellant cannot demonstrate "that the basic fairness of [his] trial was undermined or that its result was affected by the fact that" a family friend appeared to support appellant instead of a parent, guardian or legal custodian. In re J.J., 10th Dist. No. 13AP-620 10 No. 06AP-495, 2006-Ohio-6151, ¶ 26. While we are sympathetic to the fact that appellant faced the amenability hearing without a parent, guardian or legal custodian, we are reluctant to find plain error where appellant does not articulate how the juvenile court's error resulted in any prejudice to appellant. {¶ 27} Appellant argues that even if we do not find reversible error from the trial court's failure to appoint a guardian ad litem, we must nonetheless reverse for the trial court's failure to comply with the notice requirements of R.C. 2152.12(G). Under R.C. 2152.12(G), for transfer of cases from juvenile court, the juvenile court "shall give notice in writing of the time, place, and purpose of any hearing * * * to the child's parents, guardian, or other custodian and to the child's counsel at least three days prior to the hearing." Similarly, Juv.R. 30(D) requires that "[n]otice in writing of the time, place, and purpose of any hearing held pursuant to this rule shall be given to the state, the child's parents, guardian, or other custodian and the child's counsel at least three days prior to the hearing, unless written notice has been waived on the record." {¶ 28} The record shows the juvenile court sent notice of the amenability hearing to appellant's mother on October 19, 2012. While the exact date of appellant's mother's death is unclear from the record, appellant's counsel filed a motion for a continuance on October 18, 2012, one day prior to the notice of amenability hearing, for the stated reason of "[f]uneral service for [j]uvenile's mother." However, even if we were to agree with appellant that the juvenile court erred in not complying with the notice provisions of R.C. 2152.12(G) and Juv.R. 30(D), appellant once again does not demonstrate prejudice from this error. As this court has noted, the purpose of R.C. 2152.12(G) is "to protect juveniles by informing their caregivers of any pending actions involving the juveniles so that the caregivers can offer assistance, guidance, and support to the juveniles." State v. Reynolds, 10th Dist. No. 06AP-915, 2007-Ohio-4178, ¶ 12. Appellant does not suggest he was unaware of the hearing or unprepared, nor does he articulate how the outcome of the proceeding would have been different had his mother received proper notice before her death. {¶ 29} The statutory requirement to appoint a guardian ad litem in R.C. 2151.281(A)(1) is mandatory. However, given that this court has required some indication of prejudice in cases involving the failure to appoint a guardian ad litem, and there is no No. 13AP-620 11 indication that appellant suffered any prejudice from the juvenile court's failure to appoint a guardian ad litem here, we cannot conclude this is one of those rare, exceptional cases in which the public's confidence in the judicial system has been undermined. Accordingly, because appellant cannot demonstrate plain error from the juvenile court's failure to appoint a guardian ad litem, we overrule appellant's first assignment of error. IV. Second Assignment of Error – Transfer of Jurisdiction {¶ 30} In his second assignment of error, appellant argues the juvenile court abused its discretion when it transferred appellant's case to the general division of the common pleas court for criminal prosecution. R.C. 2152.12 governs the transfer of cases from juvenile court. Under R.C. 2152.12(A), certain cases are subject to mandatory bindover to the common pleas court. As applicable here, appellant was subject to the discretionary bindover provisions under R.C. 2152.12(B). An appellate court reviews a juvenile court's transfer of a case to the common pleas court for an abuse of discretion. State v. Erwin, 10th Dist. No. 09AP-918, 2012-Ohio-776, ¶ 7, citing State v. Steele, 10th Dist. No. 00AP-499 (June 28, 2001), and In re A.J.S., 120 Ohio St.3d 185, 2008-Ohio- 5307, ¶ 39. An abuse of discretion connotes a decision that is unreasonable, arbitrary or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). {¶ 31} Pursuant to R.C. 2152.12(B), the juvenile court may transfer a juvenile to common pleas court if the juvenile court finds all of the following: (1) The child was fourteen years of age or older at the time of the act charged. (2) There is probable cause to believe that the child committed the act charged. (3) The child is not amenable to care or rehabilitation within the juvenile system, and the safety of the community may require that the child be subject to adult sanctions. The statute further requires the juvenile court, in making the amenability determination, to consider whether the factors indicating the case should be transferred outweigh the factors indicating the case should remain in juvenile court. R.C. 2152.12(B)(3). Here, appellant argues the trial court abused its discretion in making its amenability finding under R.C. 2152.12(B)(3). No. 13AP-620 12 {¶ 32} R.C. 2152.12(D) lists the following factors that a juvenile court must consider in favor of transferring a juvenile to the general division of the common pleas court: (1) The victim of the act charged suffered physical or psychological harm, or serious economic harm, as a result of the alleged act. (2) The physical or psychological harm suffered by the victim due to the alleged act of the child was exacerbated because of the physical or psychological vulnerability or the age of the victim. (3) The child's relationship with the victim facilitated the act charged. (4) The child allegedly committed the act charged for hire or as a part of a gang or other organized criminal activity. (5) The child had a firearm on or about the child's person or under the child's control at the time of the act charged, the act charged is not a violation of section 2923.12 of the Revised Code, and the child, during the commission of the act charged, allegedly used or displayed the firearm, brandished the firearm, or indicated that the child possessed a firearm. (6) At the time of the act charged, the child was awaiting adjudication or disposition as a delinquent child, was under a community control sanction, or was on parole for a prior delinquent child adjudication or conviction. (7) The results of any previous juvenile sanctions and programs indicate that rehabilitation of the child will not occur in the juvenile system. (8) The child is emotionally, physically, or psychologically mature enough for the transfer. (9) There is not sufficient time to rehabilitate the child within the juvenile system. {¶ 33} The juvenile court must then weigh the factors in R.C. 2152.12(D) against the factors listed in R.C. 2152.12(E) that weigh against transfer of jurisdiction, including: (1) The victim induced or facilitated the act charged. No. 13AP-620 13 (2) The child acted under provocation in allegedly committing the act charged. (3) The child was not the principal actor in the act charged, or, at the time of the act charged, the child was under the negative influence or coercion of another person. (4) The child did not cause physical harm to any person or property, or have reasonable cause to believe that harm of that nature would occur, in allegedly committing the act charged. (5) The child previously has not been adjudicated a delinquent child. (6) The child is not emotionally, physically, or psychologically mature enough for the transfer. (7) The child has a mental illness or is a mentally retarded person. (8) There is sufficient time to rehabilitate the child within the juvenile system and the level of security available in the juvenile system provides a reasonable assurance of public safety. {¶ 34} In addition to considering the factors listed in R.C. 2152.12(D) and (E), the juvenile court "shall order an investigation into the child's social history, education, family situation, and any other factor bearing on whether the child is amenable to juvenile rehabilitation, including a mental examination of the child by a public or private agency or a person qualified to make the examination." R.C. 2152.12(C). {¶ 35} Appellant argues the juvenile court abused its discretion because it discounted Dr. Bergman's psychological report finding appellant was amenable to treatment and, instead, placed too great of weight on the nature of the offenses committed. "Although the seriousness of the crime is not a factor specified under R.C. 2152.12(D), the juvenile court is permitted to consider it in making a discretionary bindover decision." Erwin at ¶ 11, citing State v. Watson, 47 Ohio St.3d 93 (1989), syllabus. No. 13AP-620 14 {¶ 36} We are mindful that "the juvenile court enjoys wide latitude to retain or relinquish jurisdiction." Watson at 95. Further, courts can look to whether "the totality of the evidence supports a finding that the juvenile is not amenable to treatment." Id. The hearing transcript indicates the juvenile court expressly considered and weighed the factors both in favor of and against transfer. The court found four factors in favor of transfer: those listed in R.C. 2152.12(D)(1), (4), (5), and (8). By contrast, the juvenile court found no factors that weighed against transfer. Although appellant argues the juvenile court did not place enough emphasis on Dr. Bergman's report, the transcript indicates the juvenile court acknowledged Dr. Bergman's report but specifically found other factors outweighed her report, including "the nature of the acts," the fact that the "guns were acquired as a result of an [a]ggravated [b]urglary," and that the subsequent acts were "almost immediate and were totally random in nature resulting in * * * three gunshot[] victims." (Oct. 24, 2012 Tr. 16.) Ultimately, the juvenile court determined these acts showed a "blatant disregard for life, health and the safety of others in the community," and found "the need to secure and protect the safety of the community." (Oct. 24, 2012 Tr. 16-17.) In light of those other factors, the juvenile court "significantly discount[ed] the conclusions" of Dr. Bergman. (Oct. 24, 2012 Tr. 17.) {¶ 37} While appellant disagrees with the juvenile court's decision to largely discount the findings of Dr. Bergman, the juvenile court "is not bound by expert opinion, and may assign any weight to expert opinion that it deems appropriate." State v. West, 167 Ohio App.3d 598, 2006-Ohio-3518, ¶ 30 (4th Dist.) The statutory scheme does not dictate how much weight must be afforded to any specific factor and, instead, rests the ultimate decision in the discretion of the juvenile court. Appellant's disagreement with the weight afforded the various statutory factors does not amount to an abuse of discretion. {¶ 38} Appellant further argues the trial court abused its discretion in determining appellant acted as part of organized criminal activity under R.C. 2152.12(D)(4). Appellant argues that just because the complaints alleged appellant admitted to participating with co-defendants, that admission does not automatically suggest organized criminal activity. However, this court has previously concluded that a defendant's participation in an aggravated robbery along with one or more co-defendants is sufficient to find the incident No. 13AP-620 15 occurred as part of organized criminal activity. See State v. Allen, 10th Dist. No. 10AP- 487, 2011-Ohio-1757, ¶ 30 (concluding defendant's participation in propping open the door at a restaurant where he worked to allow his armed co-defendants to enter the restaurant, take money from the cash registers and safe, and hold restaurant employees against their will was sufficient to conclude the incident occurred as part of organized criminal activity under R.C. 2929.12(B)(6) and (7)); State v. Lucas, 10th Dist. No. 10AP- 923, 2011-Ohio-3450, ¶ 25 (concluding defendant's participation in an aggravated robbery of waiting in the car with another juvenile while two adults entered a home to rob the occupants was sufficient to determine the robbery occurred as part of organized criminal activity under R.C. 2152.12(D)(4)). Thus, we are not persuaded by appellant's argument that the juvenile court abused its discretion in determining R.C. 2152.12(D)(4) weighed in favor of appellant's transfer to the general division of the common pleas court. {¶ 39} Additionally, appellant argues the juvenile court should not have found R.C. 2152.12(D)(5) weighed in favor of transfer because there was not sufficient evidence before the juvenile court that it was appellant who actually possessed a firearm. We note that it is unclear from the record whether appellant was the principal offender or whether he was complicit in the offenses, but the transcript indicates the state did not foreclose either possibility. It is undisputed, however, that three victims suffered gunshot wounds as a result of these crimes. Even if appellant was not the one to brandish or discharge the weapon, he was nonetheless complicit in the commission of the crimes. R.C. 2923.03(F) (Ohio's complicity statute, stating that "[w]hoever violates this section is guilty of complicity in the commission of an offense, and shall be prosecuted and punished as if he were a principal offender"). Thus, we do not agree with appellant that the trial court acted unreasonably in finding R.C. 2152.12(D)(5) weighed in favor of transfer. {¶ 40} Lastly under this assignment of error, appellant argues the trial court acted unreasonably in failing to conclude that R.C. 2152.12(E)(3) applied to weigh against transfer because appellant was not the principal actor. However, the state explicitly stated its theory for probable cause was that the state did not know which of the co-defendants was the shooter, but that the state was proceeding against appellant as though "he was complicit and/or the shooter." (Aug. 9, 2012 Tr. 9.) Thus, the record did not preclude the possibility that appellant was the principal offender, and we do not conclude the juvenile No. 13AP-620 16 court abused its discretion in failing to conclude R.C. 2152.12(E)(3) applied to weigh against transfer. {¶ 41} Based on the foregoing reasons, we conclude the juvenile court did not abuse its discretion in determining appellant was not amenable to treatment within the juvenile system and in transferring appellant to the general division of the common pleas court for criminal prosecution. Accordingly, appellant's second assignment of error is overruled. V. Third Assignment of Error – Failure to Investigate Alleged Ineffective Assistance of Counsel {¶ 42} In his third assignment of error, appellant argues the juvenile court erred when it failed to investigate appellant's claim of ineffective assistance of counsel. {¶ 43} " 'Where, during the course of his trial for a serious crime, an indigent accused questions the effectiveness and adequacy of assigned counsel * * , it is the duty of the trial judge to inquire into the complaint and make such inquiry a part of the record.' " State v. Johnson, 112 Ohio St.3d 210, 2006-Ohio-6404, ¶ 68, quoting State v. Deal, 17 Ohio St.2d 17 (1969), syllabus. This " 'limited judicial duty arises only if the allegations are sufficiently specific; vague or general objections do not trigger the duty to investigate further.' " Id., quoting State v. Carter, 128 Ohio App.3d 419, 423 (4th Dist.1998). The inquiry may be brief and minimal. State v. Erwin, 10th Dist. No. 09AP- 918, 2010-Ohio-3022, ¶ 8. {¶ 44} "To discharge a court-appointed attorney, the defendant must show a breakdown in the attorney-client relationship of such magnitude as to jeopardize the defendant's right to effective assistance of counsel." State v. Coleman, 37 Ohio St.3d 286, 292 (1988), paragraph four of the syllabus. " '[M]ere hostility, tension and personal conflicts between attorney and client do not constitute a total breakdown in communication if those problems do not interfere with the preparation and presentation of a defense.' " Erwin, 2010-Ohio-3022, at ¶ 7, quoting State v. Furlow, 2d Dist. No. 03CA0058, 2004-Ohio-5279, ¶ 12. {¶ 45} At a hearing on June 14, 2012, appellant's appointed counsel informed the juvenile court that during his meeting with appellant, appellant told the attorney that he intended to ask the court to have his counsel removed and for new counsel to be No. 13AP-620 17 appointed. Appellant's counsel asked the juvenile court to address appellant's concerns on the record. When the juvenile court gave appellant the opportunity to explain his concerns with his attorney, appellant stated his counsel was "not trying to help me go home" and that "it's everybody['s] story against mine[ ]." (June 14, 2012 Tr. 6.) The juvenile court then asked appellant if he had anything else he wished to add, and appellant gave a non-verbal response. After giving appellant the opportunity to explain his concerns with his counsel, the juvenile court indicated its own favorable impression of appellant's counsel, and stated: [Y]ou may be frustrated that you think this case is taking as long as it's taking but this is a prosecution not a persecution. You have the right to be represented by counsel. I think you're being adequately and appropriately represented. We're going through a lot of process here that is inures to your benefit. If we short circuit the process that could be very detrimental to you. I don't want that for you. You shouldn't want that for yourself. And I'm sure [appellant's counsel] doesn't want that to you. So on the basis of [appellant's counsel's] not trying to let me go home, I'm going to ignore your request and I'm going to direct that [appellant's counsel] continue to be your appointed counsel. (Sic passim.) (June 14, 2012 Tr. 7.) {¶ 46} First, we agree with the state that appellant's statement that his counsel was not trying to help him go home did not articulate sufficiently specific facts to trigger the juvenile court's duty to inquire. Erwin, 2010-Ohio-3022, at ¶ 11 (finding defendant's complaint that he "did not think [appointed counsel] was looking out for his best interest" was too general to require the inquiry contemplated in Deal, and noting the defendant did not "allege any specific instances where his court-appointed attorney inadequately represented him"). Additionally, even though appellant's remarks were not specific enough to require an inquiry, the juvenile court nonetheless gave appellant the opportunity to specifically explain his dissatisfaction with his counsel, which appellant declined to do. Erwin, 2010-Ohio-3022, at ¶ 10, citing State v. Hibbler, 2d Dist. No. 2001-CA-43, 2002-Ohio-4464, ¶ 15, citing State v. Harris, 6th Dist. No. L-92-039 (Nov. 27, 1992) (stating "[t]he accused bears the duty of announcing the grounds of the No. 13AP-620 18 motion" to have his counsel removed). Therefore, we conclude the juvenile court did not err in not conducting a more specific inquiry into appellant's dissatisfaction with his appointed attorney. Accordingly, we overrule appellant's third assignment of error. VI. Fourth Assignment of Error – Consecutive Sentences {¶ 47} In his fourth assignment of error, appellant argues the trial court erred when it sentenced him to consecutive sentences without making the necessary findings required by R.C. 2929.14(C)(4). {¶ 48} Initially, we note that appellant did not object to the imposition of consecutive sentences at the sentencing hearing, so our review is limited to plain error. Crim.R. 52(B); State v. Wilson, 10th Dist. No. 12AP-551, 2013-Ohio-1520, ¶ 8. {¶ 49} Under R.C. 2929.14(C)(4), when a trial court sentences a defendant to consecutive sentences for multiple offenses, it must make specific findings of fact. In relevant part, the statute reads: If multiple prison terms are imposed on an offender for convictions of multiple offenses, the court may require the offender to serve the prison terms consecutively if the court finds that the consecutive service is necessary to protect the public from future crime or to punish the offender and that consecutive sentences are not disproportionate to the seriousness of the offender's conduct and to the danger the offender poses to the public, and if the court also finds any of the following: (a) The offender committed one or more of the multiple offenses while the offender was awaiting trial or sentencing, was under a sanction * , or was under post-release control for a prior offense. (b) At least two of the multiple offenses were committed as part of one or more courses of conduct, and the harm caused by two or more of the multiple offenses so committed was so great or unusual that no single prison term for any of the offenses committed as part of any of the courses of conduct adequately reflects the seriousness of the offender's conduct. (c) The offender's history of criminal conduct demonstrates that consecutive sentences are necessary to protect the public from future crime by the offender. No. 13AP-620 19 {¶ 50} Before imposing consecutive sentences, the trial court is required, under R.C. 2929.14(C)(4), to make three findings: " '(1) that consecutive sentences are necessary to protect the public from the future crime or to punish the offender; (2) that consecutive sentences are not disproportionate to the seriousness of the offender's conduct and to the danger the offender poses to the public; and (3) that one of the subsections (a), (b), or (c) apply.' " State v. Ayers, 10th Dist. No. 13AP-371, 2014-Ohio-276, ¶ 12, quoting State v. Roush at ¶ 76. While the trial court "need not use talismanic words to comply with R.C. 2929.14(C)(4) before imposing consecutive sentences, the trial court must make clear on the record that it made the required findings." State v. Jones, 10th Dist. No. 14AP-80, 2014-Ohio-3740, ¶ 13, citing State v. Revels, 10th Dist. No. 12AP-831, 2014-Ohio-795, ¶ 10, citing State v. Boynton, 10th Dist. No. 12AP-975, 2013-Ohio-3794, ¶ 9. {¶ 51} Here, the state concedes the trial court did not make the necessary findings under R.C. 2929.14(C)(4). The state argues there is no plain error here because appellant cannot show his sentence would have been different but for the trial court's failure to make the statutory findings. This court, however, has consistently determined a trial court's failure to make the findings required by R.C. 2929.14(C)(4) renders the " 'appellant's sentence * * contrary to law and constitutes plain error.' " Jones at ¶ 16, quoting Ayers at ¶ 15, quoting Wilson at ¶ 18. See also State v. Smith, 10th Dist. No. 14AP-123, 2014-Ohio-3700, ¶ 7; State v. Bailey, 10th Dist. No. 12AP-699, 2013-Ohio- 3596, ¶ 46; State v. Fair, 10th Dist. No. 13AP-901, 2014-Ohio-2788, ¶ 22; State v. Adams, 10th Dist. No. 13AP-783, 2014-Ohio-1809, ¶ 7; State v. F.R., 10th Dist. No. 13AP-525, 2014-Ohio-799, ¶ 25. The record here demonstrates the trial court did not make the requisite statutory findings before imposing consecutive sentences. {¶ 52} The state acknowledges this court's precedent but disagrees with this court's approach of finding plain error as a matter of law for a trial court's failure to make the findings required by R.C. 2929.14(C)(4). Additionally, the state argues R.C. 2953.08(C)(1) precludes appellate review of appellant's sentence because the trial court could have imposed the same 18-year sentence solely for the aggravated robbery conviction plus the 9 years imposed for the firearm specifications. The state relies on State v. Chavez, 8th Dist. No. 99436, 2013-Ohio-4700, ¶ 47, which held that "R.C. 2953.08(C)(1) limits review of consecutive sentences to situations where the combined consecutive sentence is greater No. 13AP-620 20 than the maximum sentence for any one conviction." In pertinent part, R.C. 2953.08(C)(1) states: In addition to the right to appeal a sentence granted under division (A) or (B) of this section, a defendant who is convicted of or pleads guilty to a felony may seek leave to appeal a sentence imposed upon the defendant on the basis that the sentencing judge has imposed consecutive sentences under division (C)(3) of section 2929.14 of the Revised Code and that the consecutive sentences exceed the maximum prison term allowed by division (A) of that section for the most serious offense of which the defendant was convicted. Upon the filing of a motion under this division, the court of appeals may grant leave to appeal the sentence if the court determines that the allegation included as the basis of the motion is true. {¶ 53} The state asserts, based on the Eighth District's decision in Chavez, that the reference to subsection (C)(3) in the above-quoted language is a clerical error and the General Assembly must have intended to refer to R.C. 2929.14(C)(4). Id. Even assuming we agree with the state that the reference to subsection (C)(3) is a clerical error, we do not agree with the state's position that R.C. 2953.08(C)(1) precludes appellate review in this case. Based on the plain language of the statute, the right to appeal a sentence conferred by R.C. 2953.08(C)(1) is a right "[i]n addition to the right to appeal a sentence under division (A) or (B) of this section." (Emphasis added.) Thus, R.C. 2953.08(C)(3) does not limit the right to appeal under R.C. 2953.08(A) and (B), but, rather, provides additional grounds for relief. {¶ 54} As relevant here, R.C. 2953.08(A)(4) specifically allows a defendant to appeal a sentence as a matter of right when "[t]he sentence is contrary to law." This court's precedent, outlined above, has made it clear that when a trial court imposes consecutive sentences without making the requisite findings in R.C. 2929.14(C)(4), that sentence is contrary to law. Accordingly, consistent with this court's precedent, we agree with appellant that the trial court committed plain error when it imposed consecutive sentences without first making the necessary findings in R.C. 2929.14(C)(4). Accordingly, we sustain appellant's fourth assignment of error. No. 13AP-620 21 VII. Fifth Assignment of Error – Ineffective Assistance of Counsel {¶ 55} In his fifth and final assignment of error, appellant argues he was denied the effective assistance of counsel. Specifically, appellant argues his counsel was ineffective at the amenability hearing in the juvenile court proceedings. Appellant does not argue he received ineffective assistance of counsel during the bindover proceedings in the general division of the common pleas court. {¶ 56} In order to prevail on a claim of ineffective assistance of counsel, appellant must satisfy a two-prong test. First, he must demonstrate that his counsel's performance was deficient. Strickland v. Washington, 466 U.S. 668, 687 (1984). This first prong requires appellant to show that his counsel committed errors which were "so serious that counsel was not functioning as the 'counsel' guaranteed the defendant by the Sixth Amendment." Id. If appellant can so demonstrate, he must then establish that he was prejudiced by the deficient performance. Id. To show prejudice, appellant must establish there is a reasonable probability that, but for his counsel's errors, the result of the trial would have been different. A "reasonable probability" is one sufficient to undermine confidence in the outcome of the trial. Id. at 694. {¶ 57} In considering claims of ineffective assistance of counsel, courts indulge in a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance. State v. Conway, 109 Ohio St.3d 412, 2006-Ohio-2815, ¶ 101. Appellant contends his trial counsel was ineffective in failing to call any witnesses to testify on his behalf at the amenability hearing. More specifically, appellant asserts his counsel should have (1) requested an expert witness to testify about the effects of the traumatic events in appellant's life, and (2) called character witnesses to demonstrate appellant's good character and explain why he should be retained in the juvenile system. {¶ 58} First, we do not agree that appellant's counsel's failure to call an expert witness at the amenability hearing amounts to ineffective assistance of counsel. The juvenile court had before it Dr. Bergman's very thorough report that included the very information that appellant argues an expert witness would have provided. Additionally, the juvenile court had the presentence investigation report that contained additional information regarding appellant's background and the traumatic events of his life. Appellant does not articulate what additional information a supplementary expert would No. 13AP-620 22 have provided. In re H.D.D., 10th Dist. No. 12AP-134, 2012-Ohio-6160, ¶ 59 (finding no ineffective assistance of counsel from trial counsel's failure to call an expert toxicologist where the appellant provided no information either in the trial court or on appeal as to what the expert's testimony might have been), citing In re Graves, 11th Dist. No. 99-G- 2219 (June 23, 2000) (stating "[a]ppellant fails to demonstrate either by suggestion or through the record what favorable evidence existed which was not presented by counsel"). {¶ 59} To the extent appellant argues his counsel was ineffective in failing to call Dr. Bergman to testify in person, this decision may have been a strategic one on the part of counsel to introduce only the favorable information in the report and avoid any unfavorable information or surprises at the hearing. "Tactical or strategic trial decisions, even if ultimately unsuccessful, will not substantiate a claim of ineffective assistance of counsel." State v. Ryan, 10th Dist. No. 08AP-481, 2009-Ohio-3235, ¶ 77, citing In re M.E.V., 10th Dist. No. 08AP-1097, 2009-Ohio-2408, ¶ 34. {¶ 60} Second, appellant's argument that his counsel was ineffective in failing to call a character witness at the amenability hearing similarly fails. Again, "counsel's decision whether to call a witness falls within the rubric of trial strategy and will not be second-guessed by a reviewing court." State v. Rippy, 10th Dist. No. 08AP-248, 2008- Ohio-6680, ¶ 14, citing State v. Treesh, 90 Ohio St.3d 460, 490 (2001). Further, appellant merely speculates as to what a hypothetical character witness may have said during his or her testimony, but mere speculation as to what a witness might have testified to and how such testimony would have affected the hearing's outcome is insufficient to establish a claim of ineffective assistance of counsel. Id., citing State v. Wiley, 10th Dist. No. 03AP-340, 2004-Ohio-1008, ¶ 30, citing State v. Bradley, 42 Ohio St.3d 136 (1989). {¶ 61} Accordingly, appellant is unable to demonstrate his counsel was ineffective, nor does appellant demonstrate any prejudice from his counsel's alleged inadequacies. Because appellant has failed to satisfy the Strickland test, we overrule appellant's fifth and final assignment of error. VIII. Disposition {¶ 62} Based on the foregoing reasons, we conclude the juvenile court did not commit plain error in not appointing a guardian ad litem, the juvenile court did not abuse No. 13AP-620 23 its discretion in transferring appellant to the general division of the common pleas court for criminal prosecution, the juvenile court did not err in failing to investigate appellant's claim of alleged ineffective assistance of counsel, and appellant did not receive ineffective assistance of counsel during his amenability hearing. However, we also conclude the trial court committed plain error when it imposed consecutive sentences without first making the statutory findings required by R.C. 2929.14(C)(4). Having overruled appellant's first, second, third, and fifth assignments of error, and having sustained appellant's fourth assignment of error, we affirm in part and reverse in part the judgment of the Franklin County Court of Common Pleas and remand the matter to that court for resentencing. Judgment affirmed in part, reversed in part, and cause remanded with instructions. SADLER, P.J., and BROWN, J., concur.	01-03-2023	12-23-2014
https://www.courtlistener.com/api/rest/v3/opinions/8312900/	Gary Feinerman, United States District Judge KMK Group, LLC sues Helco Corp. and its mortgage trustee Chicago Title Land Trust Company (together, "Helco"), alleging that by not timely responding to KMK's request to amend the parties' contract, Helco breached the contract and interfered with KMK's prospective economic advantage. Doc. 1. Helco moves to dismiss under Civil Rule 12(b)(6). Doc. 20. The motion is granted in part and denied in part. Background In resolving Helco's Rule 12(b)(6) motion, the court must accept the complaint's well-pleaded factual allegations, with all reasonable inferences drawn in KMK's favor, but not its legal conclusions. See Zahn v. N. Am. Power & Gas, LLC , 815 F.3d 1082, 1087 (7th Cir. 2016). The court must also consider "documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice," along with additional facts set forth in KMK's brief opposing dismissal, so long as those additional facts "are consistent with the pleadings." Phillips v. Prudential Ins. Co. of Am. , 714 F.3d 1017, 1019-20 (7th Cir. 2013) (internal quotation marks omitted). The facts are set forth as favorably to KMK as those materials permit. See Domanus v. Locke Lord, LLP , 847 F.3d 469, 478-79 (7th Cir. 2017). In setting forth the facts at this stage, the court does not vouch for their "objective truth." Goldberg v. United States , 881 F.3d 529, 531 (7th Cir. 2018). KMK, a California commercial real estate manager, and Helco, an Illinois corporation, own separate parcels in McHenry Plaza, a shopping center in McHenry, Illinois. Doc. 1 at ¶¶ 1-3, 6, 12, 15, 21. The Second Amended Operation and Easement Agreement ("OEA") governs the relationship among KMK, Helco, and the other parcel owners. Id. at ¶¶ 7, 26. The OEA identifies the parcel owners as "Parties." Ibid. ; Doc. 1-1 at 5, 7. Section 6.5 of the OEA, which governs circumstances where a Party must obtain consent or approval from another Party, provides: 6.5 Approval Rights. (A) Nothing contained in this OEA shall limit the right of a Party to exercise its business judgment, or act, in a subjective manner, with respect to any matter as to which it has been specifically granted such right, or the right to act in its sole discretion or sole judgment, whether "objectively" reasonable under the circumstances .... (B) Unless otherwise herein provided, whenever a consent or approval (the "approval") is required, such approval shall not be unreasonably withheld or delayed. Unless provision is made for a specific time period, each response to a request for an approval shall be given by the Party to whom directed within thirty (30) days of receipt of such request. Any disapproval shall be in writing and the reasons therefor shall be clearly stated. 794If a response is not given within the required time period, the requested Party shall be deemed to have given its approval. (C) If the Approving Parties' approval is requested, unanimous approval must be given. Doc. 1-1 at 39. In essence, Section 6.5(B) provides as a general matter that a Party must give its approval or disapproval within thirty days of a request, or else be deemed to have approved, and must justify any disapproval in writing. Section 6.8(E), which governs amendments, provides: "This OEA may be amended by, and only by, a written agreement signed by all of the then current Approving Parties." Id. at 40. Section 1.1 provides that one "Approving Party" shall represent the "Developer Tract" and another shall represent the "Target Tract," and that each shall be "designated from time to time to make certain decisions and/or give certain approvals pursuant to the terms of [the] OEA." Doc. 1 at ¶ 29; Doc. 1-1 at 5-6. Helco is the Approving Party for the Developer Tract, while non-party Illinois Realty, LLC is the Approving Party for the Target Tract. Doc. 1 at ¶¶ 13, 30, 32. In December 2017, KMK entered into an agreement with Chicago Bread, a Panera Bread franchisee, to redevelop and lease KMK's parcel. Id. at ¶¶ 38-39, 41. A condition precedent to the agreement was the adoption of an OEA amendment that would permit the redevelopment. Id. at ¶ 44. In early 2018, a proposed redevelopment plan was distributed to the other property owners, and Hamra Enterprises, the property development company that controlled and managed Chicago Bread, id. at ¶ 39, discussed amending the OEA with them. Id. at ¶¶ 50-51. On June 7, 2018, KMK and Chicago Bread amended their redevelopment/lease agreement to provide that Chicago Bread could terminate the agreement if it could not in good faith secure the OEA amendment by August 6, 2018. Id. at ¶¶ 46-49. On June 13, 2018, Hamra Vice President Ben Kaplan emailed all parcel owners a proposed Third Amendment to the OEA. Id. at ¶ 55. The email stated that Chicago Bread would terminate its agreement with KMK if it could not secure the amendment by August 6, 2018. Ibid. The proposed amendment designated the area in which the planned redevelopment would take place, required KMK's parcel to leave twenty-four parking spaces available to Panera customers, and replaced a provision allowing KMK's former tenant Arby's to post Arby's signs with one permitting any restaurant occupant of KMK's parcel to post its signs. Id. at ¶¶ 57-59; Doc. 1-1 at 62. None of these changes would have negatively affected any other store in the shopping center. Doc. 1 at ¶ 56. On July 7, 2018, Kaplan sent an email to all parcel owners attaching a revised proposed Third Amendment, noting in bold and underlined font that all parties had "agreed in concept to the attached, with the one owner exception of [Helco President] Heather Mooney," from whom Kaplan had received no comment. Id. at ¶¶ 20, 61. Kaplan stated that he hoped to finish the amendment process by July 20. Id. at ¶ 61. On July 12, Kaplan told KMK that all parcel owners other than Helco had agreed to the proposed amendment. Id. at ¶ 63. No later than July 13, 2018, Mooney sent Kaplan suggested revisions to the proposed amendment and expressed her belief that two Helco tenants, a Sears Outlet store and a Great Clips hair salon, had "approval rights" over OEA amendments. Id. at ¶¶ 63-64. Mooney stated that she did not want to ask the tenants for approval until the proposed amendment was finalized. 795Id. at ¶ 64. The OEA did not require Helco to obtain its tenants' approval before signing an amendment. Id. at ¶ 70. In a July 13 email, Kaplan attached a final draft proposed amendment incorporating Mooney's suggestions and asked Mooney to "immediately go[ ] to her two tenants to seek approval," reminding her of the August 6 "drop dead date" and asking all Approving Parties to execute the amendment by July 27. Id. at ¶ 64. All parcel owners except Helco approved the proposed Third Amendment by July 27, 2018. Id. at ¶¶ 65-68. On July 31, Kaplan told the parcel owners in an email that he "ha[d] been told that [Mooney] went to the two tenants" and had "heard ... from a local official" that the tenants "have no issue and would welcome Panera to the center." Id. at ¶ 69. Kaplan again reminded Mooney about the August 6 deadline. Ibid. Kaplan emailed Mooney again on August 1, asking her if Helco would sign the amendment if Sears and Great Clips consented. Id. at ¶ 71. Mooney responded, "Our attorney already explained this to you." Ibid. By August 3, Helco still had not approved the proposed amendment, so KMK and Chicago Bread amended their redevelopment/lease agreement to extend the "drop dead date" to August 20, 2018. Id. at ¶ 74. Kaplan told Mooney about the new deadline in an August 7 email, adding that the deadline would not be extended further and that Chicago Bread would terminate the agreement if it could not secure the OEA amendment. Id. at ¶ 75. Mooney did not respond. Id. at ¶¶ 76-77. On August 14, a representative from Sears told McHenry officials that it had approved the proposed OEA amendment, McHenry's mayor relayed this information to Kaplan, and Kaplan called Mooney and left a message on her voicemail. Id. at ¶ 78. Mooney did not call back that day. Ibid. In an August 15 phone call, Mooney told Kaplan that she would approve the proposed amendment only if Chicago Bread agreed to indemnify Helco against any claims brought by Sears against Helco due to the redevelopment. Id. at ¶ 79. Kaplan refused. Ibid. That day, Kaplan called Mooney's primary contact at Sears. Id. at ¶ 80. The Sears contact told Kaplan that Sears was not required to consent to OEA amendments under its agreement with Helco, but said that Sears would consent if Helco reduced its rent. Id. at ¶¶ 81-82. Helco refused to reduce Sears's rent or to sign the amendment without Sears's approval. Id. at ¶¶ 81-82. Sears later emailed McHenry's mayor to say that it did not "want [McHenry] to suffer" because the deal fell through, but that it "was not required to sign" and Helco did not "need to ask [Sears] to sign" a consent to the amendment. Id. at ¶ 83. Sears stated that it hoped Helco would "sign the consent form without involving" Sears. Ibid. Kaplan emailed Mooney the next day to say that Sears did not believe it had to agree to the amendment and asking why Mooney refused to sign the amendment, but Mooney did not respond. Id. at ¶¶ 86-87. Mooney did not approve or disapprove the amendment or provide any updates to KMK or Chicago Bread between August 16 and August 20. Id. at ¶ 88. On August 20, Chicago Bread terminated its agreement with KMK. Id. at ¶ 89. On August 21, the day after the August 20 deadline, Mooney told Kaplan that Sears had consented to the amendment and asked him to "[l]et [Helco] know the status of the transaction." Id. at ¶ 93. Mooney never explained in writing why she believed her approval of the amendment was contingent on Sears's consent. Id. at ¶ 91. KMK alleges that Helco used Sears's unwillingness to consent as a pretext, and that Helco delayed 796approving the proposed OEA amendment in bad faith. Id. at ¶ 92. Discussion KMK alleges that Helco breached Section 6.5(B) of the OEA by not approving or disapproving the amendment or justifying any disapproval in writing within thirty days. Id. at ¶¶ 97-129. KMK also alleges that Helco intentionally interfered with KMK's prospective economic advantage by delaying its approval in bad faith until after Chicago Bread terminated the redevelopment/lease agreement with KMK. Id. at ¶¶ 130-38. KMK moves to dismiss both claims. Doc. 20. I. Breach of Contract Claim The parties agree that Illinois law governs KMK's contract claim. Doc. 21 (citing Illinois law); Doc. 28 (same). An Illinois breach of contract plaintiff must allege: "(1) the existence of a valid and enforceable contract; (2) substantial performance by the plaintiff; (3) breach of contract by the defendant; and (4) resultant injury to the plaintiff." Avila v. CitiMortgage, Inc. , 801 F.3d 777, 786 (7th Cir. 2015). "The basic rules of contract interpretation under Illinois law are well settled. In construing a contract, the primary objective is to give effect to the intention of the parties." Right Field Rooftops, LLC v. Chi. Cubs Baseball Club, LLC , 870 F.3d 682, 689-90 (7th Cir. 2017). "A court must initially look to the language of a contract alone, as the language, given its plain and ordinary meaning, is the best indication of the parties' intent." Id. at 690 (quoting Gallagher v. Lenart , 226 Ill.2d 208, 314 Ill.Dec. 133, 874 N.E.2d 43, 58 (2007) ). "Moreover, because words derive their meaning from the context in which they are used, a contract must be construed as a whole, viewing each part in light of the others." Gallagher , 314 Ill.Dec. 133, 874 N.E.2d at 58. Illinois courts strive to "adopt[ ] an understanding of the [contract] language that is natural and reasonable." Land of Lincoln Goodwill Indus., Inc. v. PNC Fin. Servs. Grp., Inc. , 762 F.3d 673, 679 (7th Cir. 2014). Where a specific contract provision "arguably conflicts with a more general provision," "the more specific provision ... governs." Aeroground, Inc. v. CenterPoint Properties Tr. , 738 F.3d 810, 816 (7th Cir. 2013) (citing Grevas v. U.S. Fid. & Guar. Co. , 152 Ill.2d 407, 178 Ill.Dec. 419, 604 N.E.2d 942, 944 (1992) ); see also Aircraft Owners & Pilots Ass'n v. Hinson , 102 F.3d 1421, 1425 (7th Cir. 1996) ("[I]t is a well-established rule that specific provisions trump general ones."); Medcom Holding Co. v. Baxter Travenol Labs., Inc. , 984 F.2d 223, 227 (7th Cir. 1993) (same). "If the words in the contract are clear and unambiguous, they must be given their plain, ordinary and popular meaning." Right Field Rooftops , 870 F.3d at 690 (quoting Cent. Ill. Light Co. v. Home Ins. Co. , 213 Ill.2d 141, 290 Ill.Dec. 155, 821 N.E.2d 206, 213 (2004) ). In that event, the court must evaluate the sufficiency of the plaintiff's allegations in light of the contract's plain meaning. See id. at 691 (affirming dismissal where the defendants' theory of breach could not be reconciled with the "plain language" of the contract). By contrast, "[i]f the language of the contract is susceptible to more than one meaning, it is ambiguous," and "a court may consider extrinsic evidence to ascertain the parties' intent." Gallagher , 314 Ill.Dec. 133, 874 N.E.2d at 58. In that event, "construction of the agreement is a question of fact." Cannon v. Burge , 752 F.3d 1079, 1088 (7th Cir. 2014). As noted, KMK alleges that Helco breached Section 6.5(B) by unreasonably withholding its approval of the proposed 797OEA amendment and by not explaining in writing its reasons for approving or disapproving the amendment within thirty days. Doc. 1 at ¶¶ 97-129. According to KMK, Section 6.5(B) reasonably can be read "to apply in all situations where a party has been asked to give 'a formal sanction to' a request under the OEA," including a request to agree to a proposed OEA amendment. Doc. 28 at 11 (emphasis added) (quoting Approve , Black's Law Dictionary (10th ed. 2014)). Thus, KMK argues, a reasonable jury could find that Helco was obligated to respond to Chicago Bread's request to approve the proposed OEA amendment in the manner set forth in Section 6.5(B). Ibid. Helco responds that Section 6.8(E), not Section 6.5(B), governs requests to approve proposed OEA amendments, and therefore that it could not have breached Section 6.5(B) in connection with the request to approve the proposed amendment. Doc. 21 at 4-11. Helco is correct as a matter of law: Under the general/specific canon referenced above, Section 6.5(B) does not govern requests to approve OEA amendments. As noted, Section 6.5(B) provides that if a party does not respond to a request for approval within thirty days, "the requested party shall be deemed to have given its approval." Doc. 1-1 at 39. If a request to sign a proposed OEA amendment were governed by Section 6.5(B), then an Approving Party that did not respond to such a request would be deemed to have approved the amendment. Section 6.8(E), however, provides that the OEA can be amended "by, and only by, a written agreement signed by all of the then current Approving Parties." Doc. 1-1 at 40 (emphasis added). Therefore, Section 6.5(B) contemplates a general method of approval (silence) that Section 6.8(E) precludes in the specific context of proposed OEA amendments. For that reason, Section 6.8(E), not Section 6.5(B), applies to requests to approve amendments. See Aeroground , 738 F.3d at 816 (holding that the plaintiff was required under a specific contract provision to pay for "floor repairs" even though a more general provision required the defendant to pay for "damage"). KMK cites no authority to counter Helco's invocation (Doc. 121 at 8) of the general/specific canon to resolve whatever tension exists between Sections 6.5(B) and 6.8(E), thereby forfeiting any such argument. See M.G. Skinner & Assocs. Ins. Agency v. Norman-Spencer Agency, Inc. , 845 F.3d 313, 321 (7th Cir. 2017) ("Perfunctory and undeveloped arguments are waived, as are arguments unsupported by legal authority."); G & S Holdings LLC v. Cont'l Cas. Co. , 697 F.3d 534, 538 (7th Cir. 2012) ("We have repeatedly held that a party waives an argument by failing to make it before the district court."); Alioto v. Town of Lisbon , 651 F.3d 715, 721 (7th Cir. 2011) ("We apply [the forfeiture] rule where a party fails to develop arguments related to a discrete issue ...."). KMK instead questions the premise underlying Helco's invocation of the canon by arguing that there is in fact no tension to resolve between Section 6.5(B) and Section 6.8(E). According to KMK, the OEA contemplates a two-step amendment process: The Approving Parties first must approve the proposed amendment under Section 6.5(B), and then must "final[ize]" the amendment by drawing up and signing a written agreement under Section 6.8(E). Doc. 28 at 10-11. KMK's interpretation of the OEA cannot be reconciled with its text. The reason is simple: By providing that the OEA "may be amended by, and only by, a written agreement signed by all of the then current Approving Parties," Doc. 1-1 at 40, Section 6.8(E) plainly conveys that a written agreement signed by the Approving 798Parties is not only necessary, but also sufficient, to effectuate an amendment. Section 6.8(E) thus leaves no role for Section 6.5(B) to play in the amendment approval process. Nor is KMK's reading a "natural" or "reasonable" construction of Section 6.8(E) in the context of the OEA as a whole. Land of Lincoln , 762 F.3d at 679. KMK does not explain, and the court cannot imagine, what function the supposed Section 6.5(B) pre-amendment approval process would serve that an amendment signed under Section 6.8(E) would not. Would an Approving Party be bound by a pre-amendment approval under Section 6.5(B), even if the Approving Party were deemed to have approved only because it failed to respond within thirty days to a request for approval? If not, then the supposed pre-amendment approval process would be superfluous to the process under Section 6.8(E). If so, the supposed pre-amendment approval process would frustrate the purpose of Section 6.8(E), which is to ensure that no Approving Party is bound by an amendment without agreeing to it in writing. KMK also argues that because Section 6.8(E) provides that a proposed amendment can go into effect only with the agreement of the "Approving Parties," requests to approve proposed amendments must be governed by Section 6.5(B). Doc. 28 at 12. That argument fails to persuade. Section 6.5(B) does not use the term "Approving Parties," a fact that itself defeats KMK's submission that Section 6.8(E)'s reference to "Approving Parties" necessarily refers back to Section 6.5(B). The OEA uses the term "Approving Party" not to invoke Section 6.5(B), but simply to identify precisely who must agree to a proposed amendment: the representative from the Target Tract (currently, Indiana Realty) and the representative from the Developer Tract (currently, Helco), as distinct from all "Parties" to the OEA. In some circumstances, such as under Section 6.8(E), the Approving Parties' role is to decide whether to approve something, while in others, the Approving Parties have no authority to approve or disapprove the action in question. E.g. , Doc. 1-1 at 13 ("[E]ach Party reserves the right to create a temporary staging and/or storage area in the Common Area on its Tract .... [A] Party shall give the Approving Parties at least thirty (30) days prior notice of the proposed location of such staging and/or storage area ....") (emphasis added). Thus, by providing that a proposed amendment requires the approval of the two Approving Parties, Section 6.8(E) simply identifies which Parties' approval is required for a proposed amendment; it does not subject requests to approve a proposed amendment to the Section 6.5(B) process. Finally, KMK argues that Helco violated the duty of good faith and fair dealing by failing to respond reasonably or without delay to KMK's requests to amend. Doc. 28 at 13-14 (citing Hilfiker Square, LLC v. Thrifty Payless, Inc. , 2016 WL 7031283, at 4 (D. Or. Nov. 29, 2016) ). That argument fails because, under Illinois law, "there is no inherent duty of good faith with respect to contract formation." Citadel Grp. Ltd. v. Washington Reg'l Med. Ctr. , 692 F.3d 580, 592 (7th Cir. 2012). Although parties can agree to negotiate in good faith, such an agreement is made only if "[l]anguage in the relevant document ... indicate[s] that good faith negotiations were contemplated," and a court may "not read into the agreement terms that do not exist." Ibid. There is no basis in the OEA to conclude that the parties agreed to negotiate amendments to the OEA, particularly since, as shown above, Section 6.5(B) does not apply to amendments. 799In sum, the OEA is unambiguous: Section 6.5(B) does not apply to proposed amendments to the OEA, and Helco therefore could not have breached Section 6.5(B) by refusing to respond, or to respond in a certain way, to KMK's request that Helco agree to its proposed amendment. Accordingly, KMK's breach of contract claim is dismissed. II. Intentional Interference with Prospective Economic Advantage Claim "The elements of [an intentional interference with prospective economic advantage] claim are: (1) the plaintiff's reasonable expectation of entering into a valid business relationship; (2) the defendant's knowledge of the plaintiff's expectancy; (3) purposeful or intentional interference by the defendant that prevents the plaintiff's legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from the interference." Cromeens, Holloman, Sibert, Inc. v. AB Volvo , 349 F.3d 376, 398 (7th Cir. 2003). Helco moves to dismiss KMK's intentional interference claim on the ground that the complaint's allegations establish that Helco's conduct was privileged. Doc. 21 at 12-15. Illinois law "recognize[s] a privilege in [certain tort] cases where the defendant was acting to protect an interest which the law deems to be of equal or greater value than the plaintiff's contractual rights." HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc. , 131 Ill.2d 145, 137 Ill.Dec. 19, 545 N.E.2d 672, 677 (1989). The privilege extends to a business's interference with another business's prospective economic advantage in the course of pursuing its own financial interests. See Dawson v. Gen. Motors Corp. , 977 F.2d 369, 375 (7th Cir. 1992) (observing that "[i]nterference designed to protect one's financial interest is generally privileged"); IK Corp. v. One Fin. Place P'ship , 200 Ill.App.3d 802, 146 Ill.Dec. 198, 558 N.E.2d 161, 172 (1990) ("Interference [in a prospective economic advantage] is ... justified to protect one's financial interest."), superseded by statute in other part as recognized in Royal Imperial Grp., Inc. v. Joseph Blumberg & Assocs., Inc. , 240 Ill.App.3d 360, 181 Ill.Dec. 105, 608 N.E.2d 178 (1992) ; Bank Computer Network Corp. v. Cont'l Ill. Nat. Bank & Tr. Co. of Chi. , 110 Ill.App.3d 492, 66 Ill.Dec. 160, 442 N.E.2d 586, 592 (1982) (holding that the defendant's alleged interference with the plaintiff's prospective economic advantage "was a privileged action taken to protect its own present, existing economic interest"). "If the defendant's interference is privileged, the plaintiff bears the burden of proving that the defendant's conduct was malicious." Delloma v. Consol. Coal Co. , 996 F.2d 168, 171 (7th Cir. 1993). The defendant's conduct is malicious, and the privilege is overcome, if the defendant acts "intentionally and without justification." Ibid . ; see also Stafford v. Puro , 63 F.3d 1436, 1442 (7th Cir. 1995) (same); HPI Health Care , 137 Ill.Dec. 19, 545 N.E.2d at 677 (same). "Illinois courts have not provided a definitive answer" concerning whether privilege must be asserted as an affirmative defense or whether the plaintiff must prove that no privilege applies, but there is no need to resolve that question at the pleading stage if the plaintiff's "allegations overcome the privilege." Webb v. Frawley , 906 F.3d 569, 578 (7th Cir. 2018). KMK does not deny that Helco enjoys a privilege to pursue its own financial interest, but instead argues that the complaint's allegations give rise to the inference that Helco acted with malice. Doc. 28 at 16. Helco responds that the complaint shows that it acted to protect its own financial interests by taking steps to 800ensure that Sears would not sue it due to the amendment. Doc. 21 at 13-15. KMK has the better of the argument. First, KMK pleads facts allowing a reasonable inference that Helco's refusal to agree to the proposed OEA amendment in a timely manner was "without justification," Delloma , 996 F.2d at 171, serving as a pretext for its tortious conduct. KMK alleges that the proposed OEA amendment-which would have allowed an operational restaurant to replace a defunct one and to post signs and maintain parking spaces-were minor and would not have negatively affected the shopping center's other stores. Doc. 1 at ¶¶ 57-59. KMK also alleges that Sears repeatedly stated that it was not opposed to the amendment, id. at ¶ 69 (alleging that Chicago Bread told Mooney that it had learned that Sears had "no issue and would welcome Panera to the center"); id. at ¶ 78 (alleging that Sears told McHenry officials that it approved of the amendment); id. at ¶ 83 (alleging that Sears told McHenry's mayor that it hoped Helco would agree to the amendment without involving Sears), and that Helco did not need to secure Sears's consent to agree to the amendment, id. at ¶¶ 80-83. One could infer from these facts that the proposed OEA amendment would not have created a meaningful risk of liability to Helco and that Helco was not obligated secure Sears's consent before agreeing to it. If so, then one could reasonably infer that Helco's purported justification for not agreeing to the amendment was no justification at all. See McCoy v. Iberdrola Renewables, Inc. , 760 F.3d 674, 679-80, 685-86 (7th Cir. 2014) (where the defendant asserted that its alleged tortious interference was a result of the plaintiff's own breach of contract, holding that the plaintiff adequately pleaded malice by alleging that it had not breached the contract and that the defendant's assertions to the contrary were in bad faith); Capital Options Investments, Inc. v. Goldberg Bros. Commodities , 958 F.2d 186, 189-91 (7th Cir. 1992) (analyzing the circumstances surrounding the defendant's proffered business justification to determine whether the justification was offered in bad faith). The complaint's allegations give rise to the further inference that Helco "intentionally" delayed its approval decision. Delloma , 996 F.2d at 171. The complaint alleges that Helco delayed maliciously and in bad faith, states of mind that may be alleged generally. See Armstrong v. Daily , 786 F.3d 529, 547 (7th Cir. 2015) ("Rule 9(b) allows states of mind [including bad faith] to be alleged generally."); see also Delloma , 996 F.2d at 171 ("Privilege exists if the defendant acted in good faith to protect an interest or uphold a duty.") (emphasis added). Specific allegations in the complaint buttress the point. Helco was slow and unresponsive through every step of the amendment process despite Chicago Bread's repeated reminders that time was of the essence, while the other parcel owners were willing and able to approve the amendment well before the deadline. Doc. 1 at ¶¶ 61, 64-68, 76-78, 86-88. Helco's dilatory approach lends support to KMK's theory that the delay was intentional. Moreover, when confronted by Chicago Bread, Helco did not even attempt to explain why it insisted on getting Sears's consent despite the allegedly minimal litigation risk and comments from Sears that arguably should have allayed any remaining concerns. Id. at ¶¶ 71, 86-87. It is reasonable to infer that Helco did not answer Chicago Bread's questions because it could not provide a reasoned justification, which in turn supports an inference that Helco's proffered justification was a pretext. Finally, Helco was suddenly and inexplicably able to secure a satisfactory consent from Sears the day after Chicago *801Bread terminated its agreement with KMK, a feat it supposedly was unable to accomplish in all the weeks and months before. Id. at ¶ 93. It is reasonable to infer that whatever Helco did to resolve its concerns with the proposed OEA amendment could have been done at least twenty-four hours, if not days or weeks, sooner. Considered along with the general allegations of bad faith, these factual allegations are sufficient to plead intentional conduct. Because a reasonable jury could infer from the allegations in KMK's complaint that Helco delayed intentionally and without justification, KMK has met its burden to allege malice and thus to overcome Helco's asserted privilege at the pleading stage. Helco also argues that an independent source of privilege arises from various OEA provisions reserving the right of parcel owners to make business judgments even if those judgments are not objectively reasonable. Doc. 21 at 13-14; Doc. 30 at 12. Because Helco cites no authority for the proposition that a contract provision can itself give rise to a privilege defense to an intentional interference claim, the argument is forfeited for purposes of this motion. See M.G. Skinner , 845 F.3d at 321. In any event, even if an OEA contract provision privileged Helco's conduct, privilege can be overcome by showing that the defendant acted maliciously, as Helco is alleged to have done. See Delloma , 996 F.2d at 171-72. Helco's intentional interference with a prospective economic advantage claim therefore survives dismissal. Conclusion Helco's motion to dismiss is granted as to KMK's contract claim and denied as to its intentional interference with prospective economic advantage claim. The contract claim is dismissed without prejudice to KMK filing an amended complaint. See Runnion ex rel. Runnion v. Girl Scouts of Greater Chi. & Nw. Ind. , 786 F.3d 510, 519 (7th Cir. 2015) ("Ordinarily, ... a plaintiff whose original complaint has been dismissed under Rule 12(b)(6) should be given at least one opportunity to try to amend her complaint before the entire action is dismissed."). KMK has until May 28, 2019 to file an amended complaint. If it does not do so, the dismissal of the contract claim will convert automatically to a dismissal with prejudice. If KMK repleads, Helco will have until June 18, 2019 to respond to the amended complaint.	01-03-2023	10-17-2022
https://www.courtlistener.com/api/rest/v3/opinions/1725806/	721 So. 2d 370 (1998) STATE of Florida, Appellant, v. David GRAY, Appellee. No. 97-4342. District Court of Appeal of Florida, Fourth District. October 28, 1998. Robert A. Butterworth, Attorney General, Tallahassee, and Myra J. Fried, Assistant Attorney General, West Palm Beach, for appellant. Richard L. Jorandby, Public Defender, and Marcy K. Allen, Assistant Public Defender, West Palm Beach, for appellee. WARNER, Judge. The state appeals from an order that it characterizes as a downward departure sentence, which was imposed after the court found that the appellee had violated his community control. Since the trial court modified the conditions of appellee's community control but did not revoke it, we conclude that the state may not appeal from such an order. Section 948.06(1), Florida Statutes (1997), provides, in pertinent part, that after a probation violation hearing, the court may "revoke, modify, or continue the probation or community control." Only where the court revokes probation must the court impose a sentence. See id. Even when an appellant admits a probation violation, the court is not required to revoke the probation and sentence the offender on the underlying charge. See id. Pursuant to Florida Rule of Appellate Procedure 9.140(c)(1), the state can appeal an illegal sentence or a downward departure sentence. However, we can find no authority for the state to appeal a modification of probation since the court does not "sentence" a probationer when it modifies probation. We agree with State v. Blackman, 488 So. 2d 644, 644 (Fla. 2d DCA 1986), that the rules permit only a defendant to appeal an order *371 revoking or modifying probation; the rules do not allow the state to do so. Dismissed. GUNTHER and STEVENSON, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346365/	280 S.C. 167 (1984) 311 S.E.2d 922 The CITY OF MYRTLE BEACH; The City of North Myrtle Beach; The City of Surfside; as bodies politic and representing a class of citizens and taxpayers of Horry County, South Carolina, Appellants, v. Julian RICHARDSON, Bob Childs, Dick Elliott, Lacy Hucks, W.G. Hucks, Jr., Jimmy Johnson, Ernest Johnson, Jr., Arthur Marlow, and Braxton Watson, as Members of Horry County Council, Respondents. Cheffo JOLLY, W. Daily Strickland, Harold R. Elvington, Carl Elliott, James E. Hayes, Robert B. Battle, A.L. Causey, Rafe Grainger, Arthur Hayes, W. E. Grantham, Eugene Strickland, Ollie Strickland, Ellis Hammond, Edward F. Hammond, Gene A. Hammond, Anderson Hammond, taxpayers of Horry County, South Carolina, Appellants, v. Julian RICHARDSON, Bob Childs, Dick Elliott, Lacy Hucks, W.G. Hucks, Jr., Jimmy Johnson, Ernest Johnson, Jr., Arthur Marlow, and Braxton Watson, as Members of Horry County Council, Respondents. 22034 Supreme Court of South Carolina. January 19, 1984. 168 James B. Van Osdell, of Van Osdell, Lester, Stewart & McCutchen, Myrtle Beach, for appellants. John P. Henry, of Thompson, Henry & Lovelace, Conway, for respondents. Jan. 19, 1984. LEWIS, Chief Justice: In March 1979, Horry County Council adopted a resolution establishing a fire protection system under the terms of Sections 4-19-10 and 4-19-20, Code of Laws of South Carolina, 1976 (originally adopted as 1974 Act No. 1167, effective July 9, 1974). Thereafter, two actions were commenced to contest the validity of this Act. The first case was brought by the cities of Myrtle Beach, North Myrtle Beach and Surfside as plaintiffs, and the second by a number of taxpayers. The actions were consolidated for trial, resulting in a judgment upholding the statute in question and the validity of the actions of County Council in creating the fire protection district. The cities and the taxpayers have appealed. 169 At the outset, the challenge to the standing of the cities to maintain their action was overruled by the trial court. We reverse this determination, concluding that their suit should have been dismissed. The issue here concerns the creation of a fire protection district to secure citizens outside the limits of the cities. Under no circumstances could the cities have a governmental right to interfere with the creation of such districts. The action by the cities is accordingly dismissed, leaving for determination those issues arising under the action by the taxpayers. This appeal turns upon a single question: was 1974 Act 1167 repealed by implication through the subsequent adoption of 1975 Act 283, popularly known as the Home Rule Act and codified as Sections 4-9-10, et seq., Code? The trial court correctly approached this issue by nothing that implied repeal of statutes is not favored and any reasonable construction will be adopted to avoid such a result. In construing the two statutes, however, the trial court overlooked a fundamental conflict, which precludes any reconciliation of their provisions. We find a clear repugnancy between these two enactments, and thus we cannot escape a repeal by implication. In our view, this conclusion is reached directly from comparison of the statutes in their express terms, making it unnecessary to determine whether or not the Home Rule Act is a general or comprehensive scheme impliedly intended to override previous similar enactments. Act 1167 authorizes the governing body of each county to establish fire protection systems for areas within the county not offered such service by existing special purpose districts or municipalities. There is a substantial dispute in this record as to the existence and nature of fire protection service already offered by the plaintiff cities to the areas encompassed by the 1979 Horry County plan. In resolving this appeal, we do not express any view of these factual issues. Act 1167 clearly grants all authority in this matter to the governing body of the given county. The power to designate "service areas" is set forth in Section 2(b) of the Act, Section 4-19-10(b), Code, and is subject only to procedural limitations imposed by Section 2-A of the Act, Section 4-19-20, Code, which we quote in full 170 Prior to the imposition of ad valorem taxes upon any service area, the governing body shall have complied with the following requirements of this section. (1) The governing body shall, by resolution duly adopted, order a public hearing to be held for the purpose of making a determination as to the area to be included in the service area to be taxed. (2) Notice of the foregoing action shall be published once a week for three successive weeks in a newspaper of general circulation in the county, and such notice shall state: (i) The time of the public hearing, which shall be not less than sixteen days following the first publication of the notice; (ii) The place of the hearing; and (iii) The area included in the service area to be taxed, including a brief description of the boundary lines. (3) Such hearing shall be conducted publicly and both proponents and opponents of the proposed action shall be given full opportunity to be heard. (4) Following the hearing the governing body shall, by resolution, make a finding as to whether the service area shall be established as a taxing district. (5) The governing body shall thereupon cause notice of its action to be published once a week for two successive weeks in a newspaper of general circulation within the county which shall state the results of its action. (6) Any person affected by the action of the governing body may, by action de novo instituted in the court of common pleas for such county, within twenty days following the last publication of the notice prescribed by paragraph (5) above, but not afterwards, challenge the action of the governing body. The record reveals that Horry County Council did comply with the requirements of Section 4-19-20, Code. Subsequent to a public hearing the County Council did by resolution find that the service area would be "established as a taxing district" as directed by Section 4-19-20(4), Code. In describing 171 the new service area, the resolution interchangeably employs the terms "taxing district" and "special district." Were it not for the provisions of 1975 Act 283, one could hardly sympathize with any complaint in this case. Particularly would this be so in light of Section 4-19-20(6), Code, which bars challenge to the action of the governing body made more than twenty days after the last publication of the resolution. In this instance, the plaintiffs had until the latter part of April 1979, to bring their actions. The suit by the plaintiff cities was not commenced until February 1980, and that of the taxpayers until May 1980. The trial court determined that the actions were barred under § 4-19-20(6), Code, a holding premised upon his rejection of the plaintiff's argument that 1974 Act 1167 had been repealed. This Court has said many things about the scope of the Home Rule Act, not always speaking with a single voice, to be sure. See Infinger v. Edwards, 268 S.C. 375, 234 S.E. (2d) 214; Torgerson v. Craver, 267 S.C. 558, 230 S.E. (2d) 228; Duncan v. County of York, 267 S.E. 327, 228 S.E. (2d) 92. There can be no disagreement, however, as to the plain meaning of the following emphasized excerpt from the fifth enabling clause of Section 2 of the Act, codified as Section 4-9-30(5), Code, by its terms, each county government is empowered: to assess property and levy ad valorem property taxes and uniform service charges, including the power to tax different areas at different rates related to the nature and level of governmental services provided and make appropriations for functions and operations of the county, including, but not limited to, appropriations for general public works, including roads, drainage, and other public works; water treatment and distribution; sewage collection and treatment; courts and criminal justice administration; correctional institutions; public health; social services; transportation; planning; economic development; recreation; public safety, including police and fire protection, disaster preparedness, regulatory code enforcement; hospital and medical care; sanitation, including solid waste collection and disposal; elections; libraries; and to provide for the regulation and enforcement of the above; provided, however, that prior 172 to the creation of any special tax district for the purposes enumerated herein, one of the following procedures shall be required: (a) An election, initiated by a petition of the majority of the freeholders in the proposed tax district, shall be held in which a majority of the electors in that area must approve the creation of the special tax district, the nature of the services to be rendered and the level of taxes to be levied; or (b) When fifteen percent of the freeholders in a proposed special tax district sign a petition requesting the creation of such a district, a referendum and election shall be held. Separate boxes shall be maintained to receive the votes of the freeholders voting in the referendum and those of the electors voting in the election. A majority of electors and a majority of the freeholders in the proposed special tax district must approve the creation of that district, the nature of the services to be rendered and the level of the taxes to be levied; or (c) When a petition is submitted to the county governing body signed by seventy-five percent or more of the freeholders owing at least seventy-five percent of the assessed valuation of real property in the proposed special tax district. The petition shall contain a designation of the boundaries of the proposed special tax district, the nature of the services to be rendered and the level of the taxes to be levied. After one of the above procedures has been completed and the result is favorable for creation of a special tax district, such district shall be created by council ordinance.... There is no avoiding the conclusion that after the adoption of the Home Rule Act the creation of any special tax district became a matter of free holder initiative. The procedure provided by 1974 Act 1167, whereby such power resides exclusively in the county governing body, is wholly at odds with the plain and direct language just quoted from 1975 Act 283. Not only has the initiative for fire protection districts been 173 passed from the hands of a county government, but the power to approve designated boundaries, specified services and levels of taxation now rests with freeholders and/or electors. Under the terms of 1974 Act 1167, such power resided solely in the county governing body. See Section 4-19-10(j) and (l), Code. In light of the complete repugnancy between these two enactments, we are compelled to find that 1975 Act 283 repealed by implication the grant of power to county governing bodies contained in 1974 Act 1167, in the interest of Shaw, 274 S.C. 534, 539, 265 S.E. (2d) 522; Garey v. City of Myrtle Beach, 263 S.C. 247, 256, 209 S.E. (2d) 893; City of Spartanburg v. Blalock, 223 S.C. 252, 262-263; 75 S.E. (2d) 361; McCollum v. Snipes, 213 S.C. 254, 268, 49 S.E. (2d) 12; State v. Hood, 181 S.C. 488, 491, 188 S.E. 134; S.C. Tax Commission v. Brown, 154 S.C. 55, 62, 151 S.E. 218 (and cases cited). The Home Rule Act contains no general savings clause nor is this Court guided by any general saving statute, such as exists in a number of jurisdictions. Sutherland on Statutory Construction (4th Edition) Section 23.33 and 23.37. This Court is left to determine the operation and effect of the implied repeal here found to have occurred, although we are not utterly without the benefit of settled rules. Vested rights, for example, are not destroyed by repeal of a statute. South Carolina Mental Health Commission v. May, 226 S.C. 108, 115-116, 83 S.E. (2d) 713. It has been soundly stated that, "in cases of alleged repeals by implication, the consequences of such repeal may be taken into consideration." 73 Am. Jur. (2d) Statutes Section 400, P. 513. Equally useful in the present context is the view that, "Even where no question of vested rights is involved, the presumption is that repeal of a statute does not invalidate the accrued results of its operative tenure..." 82 C.J.S. Statutes Section 435, p. 1011. The record before us amply demonstrates "accrued results" in the form of expenditures and contractual obligations on the part of Horry County. This Court is not blind to the equities in this matter, particularly since the plaintiffs have sought a Declaratory Judgment and injunctive relief. Justice will be served in this instance by a finding that the Home Rule Act repealed by implication the provisions of *174 1974 Act 1167, a finding which shall be limited in its operation to the establishment of fire protection systems commenced after the filing of this opinion. Accordingly, judgment is granted to the plaintiff taxpayers to the extent that 1974 Act 1167, codified as Sections 4-19-10, et seq., Code, is held repealed by 1975 Act 283, Sections 4-19-10, et seq., Code, as to actions of county governing bodies commenced after the filing of this opinion. All other relief is hereby denied. Suit by the plaintiff cities is dismissed. LITTLEJOHN, NESS and HARWELL, JJ., and JOSEPH R. MOSS, Acting Associate Justice, concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346366/	135 Cal. App. 2d 757 (1955) THE PEOPLE, Respondent, v. DANIEL LUNA RODRIQUEZ, Appellant. Crim. No. 5355. California Court of Appeals. Second Dist., Div. Two. Sept. 29, 1955. James S. Fitzpatrick for Appellant. Edmund G. Brown, Attorney General, and Marvin Gross, Deputy Attorney General, for Respondent. FOX, J. A jury found defendant guilty of violating section 11500 of the Health and Safety Code in that he sold a quantity of heroin. The jury also found to be true the charge that he had suffered a prior conviction for violating the same code section. Defendant appeals from the judgment of conviction. At about 5:15 on the afternoon of June 30, 1954, Deputy Sheriff Stoops, accompanied by Posa Ayana, drove up in front of defendant's home. Officer Stoops honked his horn and defendant emerged from the house and came to the passenger side of the car, where, after some conversation, he was asked by Miss Ayana for "half a gram." While defendant was conversing with Miss Ayana he held a "finger stall" which he eventually began to untie, and which contained approximately 10 capsules. He then took five capsules out of this stall and put them into a cellophane bag which the officer held in his hand. Miss Ayana gave defendant $15, whereupon the officer drove away. The contents of these capsules proved to be heroin. Deputy Sheriff McHaney was sitting in his car about a 759 half block away. He saw a person leave the house in question and walk to the passenger side of Officer Stoops' car; this person stood beside the door for a few minutes and then walked away. Officer McHaney testified that defendant admitted he was addicted to the use of narcotics and that he had peddled narcotics to support his habit, but that he never sold more than a gram a day and then only to persons he knew. He first denied and then stated that he did not remember making a sale to Officer Stoops. On the witness stand defendant denied making any sale to Stoops or Miss Ayana, and also denied making any admissions to Officer McHaney. He did admit, however, a previous conviction for a similar offense. Defendant also claimed that on the day in question he did not get home until between 5:30 and 5:45 in the afternoon. As nearly as we can determine from defendant's brief (he has completely disregarded rule 15(a) of the Rules on Appeal), he asserts prejudicial error: (1) in receiving evidence of an accusatory statement which he denied; and (2) the admission in evidence of statements regarding his prior dealings with narcotics. There is no merit in either of these contentions. [1] The general rule is that accusatory statements which are denied by the defendant are inadmissible as hearsay. [2] However, failure to object to the admission of a hearsay statement, or to move to strike it upon that ground, is a waiver of such objection. (People v. Millum, 42 Cal. 2d 524, 528 [267 P.2d 1039]; People v. Stepp, 82 Cal. App. 2d 49, 51 [185 P.2d 417]; People v. Peterson, 66 Cal. App. 2d 420, 424 [152 P.2d 347].) In the instant case defendant's trial counsel [fn. ] objected to the admission of the accusatory statements on the ground of immateriality. This objection was properly overruled. Counsel did not raise the question that such statements were hearsay. [3] Defendant may not now predicate prejudicial error in the admission of evidence on a ground he did not even suggest to the trial court. (People v. Renek, 105 Cal. App. 2d 277, 283 [233 P.2d 43]; People v. Goff, 100 Cal. App. 2d 166, 172 [223 P.2d 27]; People v. Calliham, 81 Cal. App. 2d 928, 933 [185 P.2d 342].) [4a] It was not error to admit statements of defendant to the investigating officers relative to his previous activities in selling narcotics. [5] "It is well settled that if evidence 760 in a criminal case tends logically, naturally and by reasonable inference to establish any fact material for the People, or to overcome any material matter sought to be proved by the defense, it is admissible whether it embraces the commission of another crime or not and whether it be part of a single design or not." (People v. Coefield, 37 Cal. 2d 865, 869 [236 P.2d 570].) [6] Thus evidence of other acts of a similar nature may be admitted when not too remote, where it tends to show motive, scheme, plan or pattern of conduct, or to show guilty knowledge and intent. (People v. MacArthur, 126 Cal. App. 2d 232, 238 [271 P.2d 914]; People v. Haywood, 131 Cal. App. 2d 259, 262 [280 P.2d 180].) [4b] In this case, defendant denied making the sale in question, hence evidence which tended to show his scheme and plan or pattern of operation in habitually selling narcotics tended to establish a fact material to the case of the prosecution. (People v. Coefield, supra; People v. Torres, 98 Cal. App. 2d 189, 192 [219 P.2d 480].) The judgment is affirmed. Moore, P. J., and McComb, J., concurred. NOTES [fn. ] *. Defendant has new counsel on appeal.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346364/	45 Cal. 2d 307 (1955) 288 P.2d 859 In re SHIRLEY ANN FLODSTROM, on Habeas Corpus. Docket No. Crim. 5689. Supreme Court of California. In Bank. October 21, 1955. Byron J. Snow, Stephen P. Gazzera and Sidney L. Berlin for Petitioner. Edmund G. Brown, Attorney General, Clarence A. Linn, Chief Assistant Attorney General, Arlo E. Smith and Raymond M. Momboisse, Deputy Attorneys General, and N.J. Menard, District Attorney (Santa Clara), for Respondents. SHENK, J. This is a proceeding in habeas corpus. In a complaint filed in the Municipal Court for the San Jose-Alviso Judicial District, County of Santa Clara, the petitioner, Shirley Ann Flodstrom, was charged with the murder of her infant son. The preliminary examination was held on October 22, 1954. The petitioner was held to answer to the superior court where she moved to set aside the information under Penal Code, section 995, which provides that an information "must be set aside by the court in which the defendant is arraigned, upon his motion" if before the filing of the information "the defendant had been committed without reasonable or probable cause." The motion was denied. The petition herein was filed in the District Court of Appeal, First District, Division Two. It alleged that there was not sufficient competent evidence before the magistrate to support the holding order. In this she was sustained. The court considered the showing made by the petitioner and the return to the writ, concluded that the petitioner was 308 in custody without warrant of law and pursuant to an opinion filed on December 14, 1954, ordered her discharge. (134 Cal. App. 2d 871 [277 P.2d 101].) On a petition for hearing filed by the attorney general the matter was transferred to this court. We have concluded that the order of transfer was improvidently made and that the proceeding should be dismissed. Prior to 1927 there was no appeal from an order of the superior court discharging a petitioner in a proceeding in habeas corpus (Matter of Hughes, 159 Cal. 360 [113 P. 684]) nor was there any provision in law for a petition for hearing in the Supreme Court after an order of a District Court of Appeal discharging a petitioner in such a proceeding originally instituted in that court. (Matter of Zany (1913), 164 Cal. 724 [130 P. 710].) This was said to result from the concurrent constitutional power in habeas corpus vested in the superior court, the District Courts of Appeal, and the Supreme Court. It was stated in the Zany case at pages 726 and 727: "The result has been that, with reference to such [habeas corpus] proceedings, the supreme and superior courts, to each of which was given the power to issue writs of habeas corpus, stood upon the same plane, neither being inferior to the other in any other sense than that a superior court in determining any such matter would naturally follow a precedent established by the highest court in the state, if any such precedent had been established. It however had the power to disregard it, and its determination, whether in accord with the law as laid down by the supreme court or not, was an end of the particular proceeding, and in case of a discharge of the petitioner from custody was final and conclusive. Such is still the law with relation to the superior court of the state, as was recently decided by this court in Bank, Mr. Justice Shaw writing the opinion. (See In re Hughes, 159 Cal. 360 [113 P. 684].) Where a petitioner was remanded to custody by a superior court, and the proceeding instituted in that court was thus terminated and was no longer a matter pending therein, he could inaugurate a new proceeding for relief in another court and can still do so, but is now limited in the making of a new application by statutory provision to a higher court, either the district court of appeal having jurisdiction, or the supreme court. Such was the only remedy afforded by our law to the petitioner when remanded, and as we have said, a discharge from custody by a superior court was final and conclusive. "When our district courts of appeal were established, 309 power was expressly conferred upon them by the constitution `to issue writs of . . habeas corpus' within their respective jurisdictions. As was already the situation with reference to justices of the supreme court, each of the justices of the court of appeal was given power to issue such writs returnable `before himself.' It is self-evident that by these provisions it was intended to place such courts and the justices thereof in the same position with reference to habeas corpus matters, that the supreme and superior courts were already in. It is not conceivable that it was intended that these appellate courts should have less power than the inferior superior courts in such matters, as would be the case if their determination in habeas corpus proceedings were reviewable by the supreme court. As a matter of fact, the power to issue writs of habeas corpus was conferred in practically the same language as is used with reference to superior courts, and the supreme court, and the language used must be taken as indicating the intention to confer the same power that had already been given to the superior and the supreme courts, with all the incidents thereof." The court then went on to hold at page 729 that a proceeding in habeas corpus was not a "cause" transferable to the Supreme Court after decision by a District Court of Appeal as contemplated by the Constitution. The necessary result of the ruling in the Zany case was that it was within the power of the superior court or a District Court of Appeal on habeas corpus to discharge from custody an inmate of a state's prison, even for an insufficient reason, without the right of appeal by the People in the one case or the right of the People to petition for a hearing in the Supreme Court, in the other. In 1927 the Legislature took a hand in the matter by enacting section 1506 of the Penal Code. That section as originally enacted provided in substance, and as amended in 1951 now provides, that "An appeal may be taken to the district court of appeal by the people from a final order of a superior court made upon the return of a writ of habeas corpus discharging a defendant after his conviction in all criminal cases ...; and in all criminal cases ... after conviction of the defendant where an application for a writ of habeas corpus has been heard and determined in a district court of appeal, either the defendant or the people may apply for a hearing in the Supreme Court...." (Emphasis added.) In In re Alpine (1928), 203 Cal. 731 [265 P. 947, 58 A.L.R. 310 1500], which was the first decision of this court construing section 1506, it was said at page 745, that it "is clear from the language of said section that an appeal is only allowable after conviction. ... In In re Zany, 164 Cal. 724 [130 P. 710], this court held upon the law as it then existed that the decision of any court in a habeas corpus proceeding, provided the court had jurisdiction, could not be reviewed by any other court." It was stated in In re Chessman, 44 Cal. 2d 1 at page 4 [279 P.2d 24], that this court has consistently denied "an appeal where the habeas corpus order was not made after conviction in a criminal case prosecuted by indictment or information." (See Loustalot v. Superior Court, 30 Cal. 2d 905 [186 P.2d 673]; Thuesen v. Superior Court, 215 Cal. 572 [12 P.2d 8]; In re Bruegger, 204 Cal. 169 [267 P. 101].) The power of the Legislature to enact section 1506 has never been successfully challenged. It is observed that pains were there taken to limit the instances in which an appeal from the superior court in habeas corpus proceedings would be allowed and in which petitions for hearing in the Supreme Court would be available after decision by a District Court of Appeal. [1] Definitely and without the slightest ambiguity the right of appeal and right to petition for hearing are limited to cases arising after conviction in all criminal cases. In In re Page, 214 Cal. 350 [5 P.2d 605], the petitioner was convicted in the municipal court for violation of a municipal ordinance, a misdemeanor. He appealed to the appellate department of the superior court, contending that the ordinance was unconstitutional. The judgment was affirmed. The defendant filed an original application for the writ of habeas corpus in the District Court of Appeal where the ordinance was declared unconstitutional and the petitioner was discharged. A petition by the People for a hearing in this court was granted. The petitioner objected to a determination of the matter on the merits on the ground that this court was without jurisdiction. The objection was sustained on the ground that the case did not come within the class of cases provided for in section 1506 in which a hearing could be granted. This court refused to extend the application of that section to cases not coming specifically within its terms. It was there decided in effect that the petition for hearing had been improvidently granted and an order of dismissal was entered. That is the legal situation here. The petitioner is being prosecuted on a felony charge, but there has been 311 no conviction for the obvious reason that there has as yet been no trial. Under established law the order of the District Court of Appeal discharging the petitioner from custody was final when made and the matter was improperly transferred to this court. For that reason the proceeding is dismissed. Gibson, C.J., Edmonds, J., Carter, J., Traynor, J., Schauer, J., and Spence, J., concurred.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346605/	199 N.W.2d 795 (1972) Eugene J. PETERS, et al., Respondents, v. Clarence J. FENNER, et al., Appellants. No. 43424. Supreme Court of Minnesota. July 21, 1972. Lang & Pauly and William W. Warren, Minneapolis, for appellants. Mansur & Mansur, St. Paul, for respondents. Heard before KNUTSON, C. J., and OTIS, KELLY, and GUNN, JJ. PER CURIAM. This is an action by the purchasers under a contract for deed to require the vendors to specifically perform the contract. The issues are (1) whether the contract permits prepayment of the purchase price; and (2) whether the purchasers were entitled to attorneys' fees. The trial court held that the purchasers were entitled to prepay the contract, as to which we affirm, and awarded the purchasers attorneys' fees, as to which we reverse. The earnest money contract entered by the parties provided in part as follows: "* * * [T]he seller, has this day sold to the buyer for the sum of Thirty-Four Thousand and no/100 ($34,000.00) DOLLARS, which the buyer agrees to pay in the following manner: Earnest money herein paid ($100.00 and $4,900.00, cash on or before ____) and $29,000.00 by Contract for Deed at 8% per annum, $223.84 payable on October 1, 1969 and $223.84 each month thereafter for 300 months until paid in full." 796 The contract for deed subsequently executed contained the following language, "Payable in monthly installments of not less than Two Hundred Twenty-Three and 84/100 ($223.84) Dollars commencing on the first day of October, 1969 * *." (Italics supplied.) The purchasers tendered the full balance due on the contract and demanded a deed, which the vendors declined to deliver. 1. Citing Fleisher Engineering & Constr. Co. v. Winston Bros. Co., 230 Minn. 554, 42 N.W.2d 396 (1950); and Restatement, Contracts, §§ 230, 235, 238, 240, the vendors contend that the earnest money contract contained no prepayment provision and that the contract for deed must be read in conjunction with the earnest money contract. We hold that the terms of the agreement were merged in the contract for deed and that under the doctrine of integration the language of the contract for deed governs. Bernard v. Schneider, 264 Minn. 104, 107, 117 N.W.2d 755, 757 (1962). The words "not less than" conferred on the purchasers an unqualified right to prepay the entire balance as a part of any monthly installment. 2. The purchasers rely on Indianhead Truck Line, Inc. v. Hvidsten Transport, Inc., 268 Minn. 176, 195, 128 N.W.2d 334, 348 (1964), to support their claim for attorneys' fees. There, however, the court found that the party against whom the fees were assessed "wrongfully and without cause or justification sought to avoid performance of its obligations under the agreement." In allowing attorneys' fees, we relied on Bergquist v. Kreidler, 158 Minn. 127, 196 N.W. 964 (1924). The Bergquist case involved fraud, and we noted that we did not intend to hold that in all cases the expense of litigation following torts or breaches of contract was recoverable. 158 Minn. 133, 196 N.W. 966. The general rule denies the right to recover attorneys' fees. Midway Nat. Bank v. Gustafson, 282 Minn. 73, 82, 165 N.W.2d 218, 224 (1968). Where the refusal to perform is based on a mistaken but good-faith dispute over the interpretation of a contract, it is not an appropriate case for the allowance of attorneys' fees. Accordingly, the trial court is reversed as to that issue. No costs shall be allowed to either party on this appeal. Affirmed in part and reversed in part. MacLAUGHLIN, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/463101/	780 F.2d 1029 U.S.v.Scripter 85-4037 United States Court of Appeals,Ninth Circuit. 12/5/85 1 E.D.Wash. AFFIRMED	01-03-2023	08-23-2011
https://www.courtlistener.com/api/rest/v3/opinions/1346609/	40 Mich. App. 597 (1972) 199 N.W.2d 252 CASTLE v. LOCKWOOD-MACDONALD HOSPITAL Docket No. 10318. Michigan Court of Appeals. Decided May 24, 1972. Dreyer & Porter, for plaintiff. Clare L. Gillett, for defendants. Before: FITZGERALD, P.J., and R.B. BURNS and TARGONSKI,[] JJ. TARGONSKI, J. This case involves a wrongful death action. The deceased was a patient in the intensive care room on one of the upper floors of the defendant Lockwood-MacDonald Hospital. During the night of May 17, 1967, the deceased fell or jumped to death from a window in the room. Thereafter, the following sequence of events transpired. 599 On May 14, 1970, pursuant to her petition, Emma Castle, widow of the deceased, was appointed special administratrix of her husband's estate by the Otsego County Probate Court.[1] Then, on May 15, 1970, Emma Castle, as personal representative of the estate, commenced a wrongful death action in the Emmet County Circuit Court against the defendants, alleging: that the defendant hospital was negligent in maintaining in the room an open, low-silled window without any screen or bar, and without proper observation of the deceased; that defendant Dr. Drake, the deceased's personal physician, failed to exercise due care and skill in allowing Mr. Castle to be placed in a dangerous location, next to an open, unguarded window, and in failing to remove the deceased from the room or requiring the correction of the dangerous condition. On May 16, 1970, service of process was made on both the defendant hospital and the defendant doctor. Subsequently, on May 21, 1970, Dr. Drake filed a motion for accelerated judgment pursuant to GCR 1963, 116.1(5) claiming the plaintiff's action is barred by the two-year statute of limitations for actions charging malpractice. On June 3, 1970 the defendant hospital filed a motion for accelerated judgment pursuant to GCR 1963, 116.1(1), (2), and (5), claiming the circuit court lacked jurisdiction of the person of the defendant, the subject matter, and that the alleged claim was barred by the statute of limitations. Following this motion, the defendant hospital then filed an amended motion on June 5, 1970, for accelerated judgment adding as a ground GCR 1963, 116.1(3), that the plaintiff lacked the legal 600 capacity to sue. The defendant hospital specifically relied on the records of the probate court for the County of Otsego which show: that even though Emma Castle was appointed special administratrix on May 14, 1970, the reason for the appointment being, "the chief asset of said estate is a cause of action for the death of said deceased, upon which the Statute of Limitations shortly runs", that at no time before the filing of the motion for accelerated judgment was an order entered by the probate court granting the special administratrix authority to institute this lawsuit. Following this motion, on June 11, 1970, Otsego County Probate Judge Boyd C. Baird entered an order reading: "That on May 14, 1970 a petition for appointment of special administrator was filed in this court on the above captioned matter. That on that date Emma Castle was appointed special administrator. "That at the time of filing the aforesaid petition it was expressly indicated to this court and understood by this court that the sole reason for the appointment of said special administrator was for the purpose of instituting suit for the wrongful death of the deceased, upon which cause of action the statute of limitations would shortly run. "That it was the express purpose of this court in appointing the special administratrix that she take legal action pending the appointment of a general administrator. "It is ordered that the said Emma Castle specifically institute suit on the cause of action for wrongful death of the decedent. "It is further ordered that such order shall be effective nunc pro tunc as of May 14, 1970". Then on June 15, 1970, Judge Baird appointed Emma Castle general administratrix of her husband's estate. 601 Finally, in a written opinion dated August 31, 1970 Emmet County Circuit Judge Edward H. Fenlon made the following five findings: "(1). That Emma Castle as personal representative of the Estate of Stanley B. Castle, deceased, at the time of instituting the said action on May 15, 1970, was without the capacity to sue. That her authority was limited as provided by MCLA 702.61 [MSA 27.3178(131)]. "(2). That the nunc pro tunc order of the Probate Court for the County of Otsego issued on June 11, 1970, following defendants' motion for accelerated judgment, was and is invalid. "(3). That as to defendant Lockwood-MacDonald Hospital, the statute of limitations applicable to this action was three years from the date the cause of action arose, or from May 17, 1967, the statute thus having run on May 17, 1970. MCLA 600.5805(7) [MSA 27A.5805(7)]. That on said date, plaintiff was without capacity to sue and the said order of June 11, 1970, did not toll the statute. "(4). That as to defendant, Gerald A. Drake, M.D., if plaintiff's action is predicated on the theory of ordinary negligence, the three-year statutes and findings above noted are applicable. "(5). That if the said action is one alleged malpractice, the statute of limitations is two years, MCLA 600.5805(3) [MSA 27A.5805(3)] from May 17, 1967, or if plaintiff's allegation of concealment is accepted, the statute commenced running on June 6, 1967, and expired on June 6, 1969." In conformance with his findings, on September 9, 1970, Judge Fenlon ordered that each of the defendants' motions for accelerated judgment be granted and the cause dismissed with prejudice. Thereafter, plaintiff took this appeal. Plaintiff's first argument is that as special administratrix, even though she failed to procure the proper court order, she had the capacity to sue in this wrongful death action. Plaintiff advances 602 three separate theories for this proposition. First, that her failure to procure the order could not be collaterally attacked in a wrongful death action. Second, that the nunc pro tunc order[2] of the probate court was valid as such and not subject to collateral attack. Third, that the nunc pro tunc order[3] was a valid order which effectively "related back" to her appointment as special administratrix apart from the concept of nunc pro tunc. On account of the merits found in this last argument, we find it unnecessary to consider the merits of the first two contentions. Our analysis follows. On May 14, 1970, plaintiff was validly appointed special administratrix in accordance with MCLA 702.60; MSA 27.3178(130). However, as plaintiff concedes, MCLA 702.61; MSA 27.3178(131) calls for a special administrator to obtain an order of the probate court before commencing actions and that such an order was not obtained in this case before the statute of limitation applicable to wrongful death actions expired.[4] MCLA 702.61; MSA 27.3178(131) reads as follows: "Such special administrator appointed according to the provisions of the preceding section [MCLA 702.60; MSA 27.3178(130)] shall collect all the goods, chattels and debts of the deceased, and preserve the same for the executor or administrator who may afterwards be appointed, and for that purpose, upon order of the probate court, may commence and maintain actions as an administrator, and may sell such perishable and other personal estate as the probate court may order to be sold. All personal actions, the cause of which does by law survive and which may be pending either for or against the deceased, may be proceeded with and be 603 prosecuted by or against such special administrator, and the same proceedings taken as are or may hereafter be provided by law relating to such actions in cases where an executor or general administrator has been appointed." (Emphasis added.) Plaintiff contends that even though such an order of the probate court authorizing the commencement of this wrongful death action was not obtained prior to the apparent running of the statute of limitation on May 17, 1970, the June 11, 1970 order of the probate court granting permission "related back" to the date of appointment on May 14, 1970, so as to cure any defects subsequent to that appointment. The doctrine of "relation back" is not new. It is generally applied in the following situation: "[W]henever letters of administration or testamentary are granted, they relate back to the intestate's or testator's death, and all previous acts of the representative that were beneficial in their nature to the estate, and that were in their nature things that he could have performed had he been duly qualified at the time, are validated." 31 Am Jur 2d, Executors and Administrators, § 162, p 94. Further, in a great majority of the cases in this country when the doctrine of "relation back" has been considered, it has been held that such an appointment made after the statute of limitation has run against a claim will relate back to validate actions taken on the claim within the statutory period by the person subsequently appointed administrator thus barring reliance upon the defense of limitations by the party against whom the claim is asserted on behalf of the estate. Such result has been reached in wrongful death actions. Kiley v Lubelsky, 315 F Supp 1025 (1970). See 3 ALR3d 1234. The apparent reason for the application 604 of the doctrine of relation back as a means of defeating the defense of the statute of limitation is the desire of the courts not to have valid claims avoided by legal technicalities provided the administrator acted in good faith and had some reasonable grounds for believing he had been duly appointed. See Kiley v Lubelsky, supra; 3 ALR3d 1234. A review of the many cases which follow the majority view by accepting the doctrine of "relation back" would unduly lengthen this discussion. Some of these decisions include: Graves v Welborn, 260 NC 688; 133 SE2d 761 (1963); Griffin v Workman, 73 So 2d 844 (Fla, 1954); Douglas v Daniels Bros Coal Co, 135 Ohio St 641; 22 NE2d 195 (1939). Representative cases taking the minority view include: Kiley v Lubelsky, supra; Glenn v E I Dupont De Nemours & Co, 254 SC 128; 174 SE2d 155 (1970); Pearson v Anthony, 218 Iowa 697; 254 NW 10 (1934). Although there are many decisions that either accept or reject this doctrine, the doctrine of "relation back" is a relatively novel concept in this state.[5] Some consideration of this theory and application 605 is found in Whiting v Neuman, 11 Mich App 201 (1968). In Whiting, the administratrix was appointed by an order of the Ingham County Probate Court. She commenced a malpractice action in Ingham County Circuit Court under the wrongful death act. Later, it was discovered that neither plaintiff's decedent nor the defendant were residents of Ingham County at the time of death but rather of Eaton County. Upon its own motion, the Ingham County Probate Court revoked the letters of administration granted to the plaintiff. Thereafter, plaintiff was appointed administratrix in Eaton County and began an identical suit in Eaton County. Subsequently, the Ingham County trial judge granted the defendant's motion for summary and accelerated judgments on the grounds that the court had no jurisdiction over the subject matter of the action inasmuch as there was not and never had been a party plaintiff having the capacity to maintain the action in that court. The plaintiff appealed the dismissal in Ingham County. Both the majority and the dissenting opinions stated that the valid appointment of the administratrix by the Eaton County Probate Court related back to the date of the decedent's death and hence validated the action in the Ingham County Circuit Court.[6] Turning now to the instant case, we think that the reasoning behind the doctrine of "relation back" is sound and applicable to the present facts, even though the facts here are at a slight variance 606 with those usually associated in cases involving this doctrine.[7] It is uncontested that plaintiff was validly appointed special administratrix before the applicable three-year statute of limitation ran. However, plaintiff, in good faith and with reason, apparently mistakenly believed herself equipped with the necessary legal authorization to institute suit as special administratrix. The reason behind this confusion is readily apparent from the language of the June 11, 1970 probate court order, in which the probate court stated, "that at the time of filing the aforesaid petition, it was expressly indicated to this court and understood by this court that the sole reason for the appointment of said special administrator was for the purpose of instituting suit for the wrongful death of the deceased, upon which cause of action the statute of limitations would shortly run", and "that it was the express purpose of this court in appointing the special administratrix that she take legal action pending the appointment of a general administrator". The basis of defendant hospital's motion for accelerated judgment alleging the lack of legal capacity to sue is purely technical. It has not been prejudiced by the course of events. Defendant hospital has received appropriate notice within the statutory three-year period that it must be prepared to defend against this suit. Therefore, we hold that when a validly appointed special administratrix institutes a wrongful death action, under the mistaken belief that she has been specifically authorized to so act, but thereafter discovers her error and procures the proper authorization by 607 probate order in satisfaction of MCLA 702.61; MSA 27.3178(131) after the expiration of the applicable statute of limitation, the probate order will relate back to the commencement of the wrongful death action and the action will be deemed properly commenced within the time limited by statute.[8] Having established that plaintiff's wrongful death action against defendant hospital is not barred by the statute of limitation, we must now determine whether the period of limitation has expired as to defendant Dr. Drake. Plaintiff contends that the three year period of limitation on actions to recover damages for injuries to persons and property provided for in MCLA 600.5805(7); MSA 27A.5805(7) is applicable to Dr. Drake as well as the hospital since the complaint sounds in general negligence as well as malpractice. However, if MCLA 600.5805(3); MSA 27A.5805(3), limiting actions charging malpractice to two years, applies,[9] then the plaintiff argues that the statute does not begin to run until the date of discovery, citing Winfrey v Farhat, 382 Mich 380 (1969). Further, she argues that there was fraudulent concealment by Dr. Drake which tolled the period of limitation, citing Eschenbacher v Hier, 363 Mich 676 (1961), and Johnson v Caldwell, 371 Mich 368 (1963). In light of the previous discussion, we begin by stating that if it is determined that any part of plaintiff's complaint sufficiently alleges general negligence against Dr. Drake for which the period 608 of limitation is three years,[10] then that part of the complaint will not be barred by the statute of limitation defense. However, any and all allegations that go to malpractice claims will be barred by the two-year statute of limitation found in MCLA 600.5805(3); MSA 27A.5805(3) for the following reasons.[11] Plaintiff's argument that the statute of limitation on malpractice claims does not begin to run until the date of discovery is totally incorrect. In DeHaan v Winter, 258 Mich 293 (1932), the Court held that the statute of limitations commenced running with the last treatment. But in Johnson v Caldwell, supra, the Court changed the DeHaan rule for the "discovery rule" holding that "the limitation statute or statutes do not start to run until the date of discovery, or the date when, by the exercise of reasonable care, plaintiff should have discovered the wrongful act". Then the Revised Judicature Act, in MCLA 600.5838; MSA 27A.5838, effective January 1, 1963, adopted the "last treatment rule" of the DeHaan case. That statute reads as follows: "A claim based on the malpractice of a person who is, or holds himself out to be a member of a state licensed profession accrues at the time that person discontinues 609 treating or otherwise serving the plaintiff in a professional or pseudo-professional capacity as to the matters out of which the claim for malpractice arose." This return to the DeHaan rule by statute was recognized in Winfrey v Farhat, supra. However, the Court applied the discovery rule established in Johnson v Caldwell, supra, because the plaintiff's claim arose out of an act done prior to January 1, 1963, the effective date of the Revised Judicature Act. Plaintiff in the present case seeks to apply the "discovery rule" based on the Winfrey decision without regard to the effect of the Revised Judicature Act, more particularly, MCLA 600.5838; MSA 27A.5838. But since the act out of which plaintiff's claims arise in the present case occurred in 1967, years after the effective date of the Revised Judicature Act, the "last treatment rule" of MCLA 600.5838; MSA 27A.5838 controls. Next, we find that plaintiff's contention of fraudulent concealment is equally without merit. Fraudulent concealment is a completely distinct concept, apart from the ordinary rules found in malpractice cases. Johnson v Caldwell, supra. The effect of fraudulent concealment is also a subject of the Revised Judicature Act, in MCLA 600.5855; MSA 27A.5855, which reads as follows: "If a person who is or may be liable for any claim fraudulently conceals the existence of the claim or the identity of any person who is liable for the claim from the knowledge of the person entitled to sue on the claim, the action may be commenced at any time within 2 years after the person who is entitled to bring the action discovers, or should have discovered, the existence of the claim or the identity of the person who is liable for the claim, although the action would otherwise be barred by the period of limitation." Plaintiff, in effect, argues that because Dr. 610 Drake indicated to her that he thought the deceased's death was due to suicide rather than by accidental fall which was listed on the death certificate, Dr. Drake was attempting to conceal the true facts surrounding the death. However, the fraud sought to be remedied by MCLA 600.5855; MSA 27A.5855 consists of the concealment of the existence of a claim or the identity of a potential defendant. DiGiovanni v Yacenick, 9 Mich App 590 (1968). The guidelines followed in determining whether or not a statute of limitation has been tolled by fraudulent concealment by the party charged with the concealment are found in DeHaan v Winter, supra, 296: "Fraudulent concealment means employment of artifice, planned to prevent inquiry or escape investigation, and mislead or hinder acquirement of information disclosing a right of action. The acts relied on must be of an affirmative character and fraudulent." Eschenbacher v Hier, supra, 681; Draws v Levin, 332 Mich 447, 453 (1952); DiGiovanni v Yacenick, supra, 596. The facts here do not fall within these guidelines. Plaintiff concedes that the death certificate lists death as due to accidental fall. Furthermore, if Dr. Drake had entertained any thoughts of fraudulently concealing plaintiff's cause of action for malpractice based upon an accidental fall, it is hardly likely that he would have written the letter to plaintiff in which he described the deceased as being in a condition totally opposite to that of a potential suicide victim, minutes before he was found missing. On the contrary, this description of the deceased's condition would lead one to doubt any suicidal attempt. Thus, there being nothing to substantiate any fraudulent concealment of a cause of action for malpractice in relation to the 611 deceased's death, plaintiff is precluded from relying upon MCLA 600.5855; MSA 27A.5855 as a bar to the defense of the statute of limitation. Turning now to an examination of the complaint so as to determine what allegations have been brought against defendant Dr. Drake, we find that paragraphs number 10 through 14 pertain to Dr. Drake. They read as follows: "10. That the defendant, Gerald A. Drake, M.D. was, and still is, a physician licensed to practice medicine in the State of Michigan and represented himself as competent and skilled in the treatment of human ailments, diseases and injuries. "11. That shortly before May 17, 1967, decedent consulted and employed defendant as such physician, for compensation paid and to be paid therefore, to attend and treat him for the alleviation of a certain ailment with which he was then afflicted. "12. That the defendant, Gerald A. Drake, M.D., thereupon accepted such employment, and pursuant thereto, undertook and entered upon the treatment of decedent. "13. That it thereupon became, and was, the duty of defendant, Gerald A. Drake, M.D., in treating plaintiff, to exercise due care and skill according to the common and good practice of competent skilled physicians, and in particular to prevent decedent from being placed in a position which was dangerous to him and contrary to good practice. "14. That, disregarding his duty on the premises and contrary to the common and good practice of competent and skilled physicians, defendant was guilty of one or more of the following negligent, and unskillful acts and omissions in the treatment of decedent, to-wit: "A. Defendant doctor allowed decedent to be placed in a dangerous location, that is next to an open, unguarded window. "B. Defendant doctor allowed decedent to be maintained in said dangerous location and failed to move said decedent from said dangerous location or to direct 612 the removal of said decedent or the correction of said dangerous condition. "C. Defendant doctor had knowledge or reasonably should have had knowledge that decedent was in a location dangerous to the decedent. "D. Defendant doctor failed to maintain proper observation of decedent." Upon a thorough analysis, we find that the above-listed allegations have been drafted solely with the intent to allege malpractice. While the specific negligent acts and omissions alleged in paragraph number 14 are not matters which involve any medical skill, as they pertain to the allegedly dangerous condition of the open, unguarded window and the lack of proper observation of the deceased, they are prefaced by the language, "disregarding his duty on the premises and contrary to the common and good practice of competent and skilled physicians",[12] which can only imply malpractice here. It is unfortunate in that if plaintiff intended to allege the general negligence of Dr. Drake as a separate and distinct claim from the degree of negligence involved in malpractice, her complaint was not drafted more skillfully to reflect that desire. For the above reasons, accelerated judgment granted to defendant Dr. Drake is affirmed. However, accelerated judgment granted to defendant Lockwood-MacDonald Hospital is reversed and this case is remanded to the circuit court for appropriate action in accordance with this opinion. Costs are awarded to plaintiff in respect to defendant hospital. All concurred. NOTES [] Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968. [1] Bond was filed and letters of special administration were issued. [2] Of June 11, 1970. [3] Id. [4] The three-year statute of limitation, MCLA 600.5805(7); MSA 27A.5805(7), applies to wrongful death actions. Rhule v Armstrong, 384 Mich 709 (1971). [5] This statement is deserving of some qualification. While the doctrine of "relation back" is a relatively novel concept in respect to deficiencies in the proper appointment of administrators and executors, relation back is a very important concept in our court rules dealing with pleadings. See Doan v Chesapeake & O R Co, 18 Mich App 271 (1969). The doctrine of "relation back" is specifically found in GCR 1963, 118.4 stating that: "Except for the purpose of demanding a trial by jury under subrule 508.2, the amendment relates back to the date of the original pleading whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading." The doctrine of "relation back" was devised by the courts to associate amendments with the date of the original pleading, so that it would not be barred by the statute of limitation whenever the claim or defense asserted in the amendment arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading. Furthermore, the application of this doctrine in pleadings satisfies the basic policy of the statutes of limitation, because the transactional base of the claim must still be pleaded before the statute runs, thereby giving defendant notice within the statutory period that he must be prepared to defend against all claims for relief arising out of that transaction. 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 416. [6] However, this case did not involve the expiration of the statute of limitation. [7] Although we feel that this factual situation receives a stronger support from the doctrine of "relation back" than the usual factual situation where there was not an initial appointment of an administrator. [8] Plaintiff contends that the probate order should relate back to the date of her appointment as special administratrix. However, we feel that relation back to the date of the commencement of the action is the better result. [9] Upon a finding that any general negligence has not sufficiently been pled and, consequently, the three-year limitation period is inapplicable. [10] MCLA 600.5805(7); MSA 27A.5805(7). [11] Even though in cases involving injuries to persons and property it has been held that the three year statute of limitation, MCLA 600.5805(7); MSA 27A.5805(7), applies. * * * "(3) The period of limitations is 2 years for actions charging malpractice. * * * "(7) The period of limitations is 3 years for all other actions to recover damages for injuries to persons and property." (Emphasis added.) Consequently, any allegations of malpractice in this wrongful death action are governed by the two-year period of limitations. [12] This language is also present in paragraph number 13 of the complaint.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346611/	388 S.C. 394 (2010) 697 S.E.2d 551 Martha Lewin ARGOE, Appellant, v. THREE RIVERS BEHAVIORAL CENTER AND PSYCHIATRIC SOLUTIONS, Its Successor; Phyllis Bryant-Mobley, MD; Glenn Hooker, MD; Aiken Regional Medical Center, Aurora Pavilion; David A. Steiner, MD; Cheryl C. Dodds, MD; Doris Ann Burrell, RN; Carolina Care Plan; James F. Walsh, Jr.; G. Lewis Argoe, Jr.; and George L. Argoe, III, Defendants, Of Whom James F. Walsh, Jr. is the Respondent. No. 26844. Supreme Court of South Carolina. Heard March 17, 2010. Decided July 26, 2010. Rehearing Denied September 2, 2010. 397 Charles M. Black, Jr. and Mitchell C. Payne, both of Warner Payne & Black, of Columbia, for Appellant. M. Dawes Cooke, K. Michael Barfield, and John W. Fletcher, all of Barnwell Whaley Patterson & Helms, of Charleston, for Respondent. 398 Chief Justice TOAL. In this case, Martha Lewin Argoe (Appellant) appeals the trial court's order granting summary judgment to Attorney James F. Walsh, Jr. (Respondent). We affirm. FACTS/PROCEDURAL BACKGROUND Appellant filed the underlying lawsuit against Respondent arising out of his representation of her husband, Lewis M. Argoe, Jr. (Husband), and son, G. Lewis Argoe, III (Son). Although now divorced, Appellant and Husband were experiencing marital difficulties at the time Respondent represented Husband and Son.[1] Husband and Son entered into an attorney-client relationship with Respondent, informing him that they were seeking his help in protecting Appellant from her own irresponsible and erratic behavior. They told Respondent that Appellant was acting strangely and had become financially irresponsible.[2] Specifically, Husband and Son informed Respondent that Appellant had taken out a loan against a condominium she owned in Beaufort County, South Carolina (the Beaufort Property). Appellant told no one about the loan, allowed it to go into default, and the Beaufort Property was about to enter foreclosure. Respondent learned that Son was Appellant's attorney-in-fact pursuant to a Durable Power of Attorney executed by Appellant on April, 20, 2004.[3] In order to avoid financial disaster, Respondent assisted Son in the transfer of title to the Beaufort Property to a trust for the benefit of Appellant. Son was the residual beneficiary to the trust and would receive legal title to the Beaufort Property in the event 399 of Appellant's death. Pursuant to Appellant's then-existing estate plan, Son was already to receive the property upon her death. Thus, the creation of the trust at issue was consistent with the status quo. Appellant alleges that Husband orchestrated the transfer of title to the Beaufort Property and her involuntary commitment because he feared she was going to divorce him. Husband and Son maintain these actions were taken to protect Appellant from herself. Respondent understood Husband and Son's motivations to be benevolent and there is no evidence in the record to indicate that he had reason to believe otherwise. On August 15, 2006, Appellant filed an action against Respondent in Beaufort County asserting various causes of action, including setting aside influenced transactions, professional negligence, breach of fiduciary duty, breach of trust, invasion of privacy, intentional infliction of emotional distress, violation of civil rights, conspiracy, conversion, and abuse of process. On June 6, 2007, Appellant filed another action in Lexington County arising out of the same facts and circumstances, but naming additional defendants. The two lawsuits were combined in Lexington County. Respondent filed a motion for summary judgment, which was granted by the trial court as to all causes of action. ISSUES Appellant timely filed a notice of appeal and presents the following issues for review: I. Did the trial court err in granting summary judgment because it found no legally cognizable duty owed by Respondent to Appellant? II. Did the trial court err in granting summary judgment as to Appellant's cause of action for intentional infliction of emotional distress? III. Did the trial court err in granting summary judgment as to Appellant's cause of action for legal malpractice? IV. Did the trial court err in granting summary judgment as to Appellant's cause of action for abuse of process? V. Did the trial court err in granting summary judgment because it found no conflict of interest between Respondent and Appellant? 400 STANDARD OF REVIEW Appellate courts review the grant of summary judgment under the same standard applied by the trial court. Houck v. State Farm Fire & Cas. Ins., 366 S.C. 7, 11, 620 S.E.2d 326, 329 (2005). Summary judgment is appropriate where there are no genuine issues of material fact and it is clear the moving party is entitled to a judgment as a matter of law. Rule 56(c), SCRCP. In determining whether any triable issues of fact exist, the evidence and all inferences that reasonably can be drawn from the evidence must be viewed in the light most favorable to the nonmoving party. Hansson v. Scalise Builders of S.C., 374 S.C. 352, 355, 650 S.E.2d 68, 70 (2007). ANALYSIS I. Duty Appellant argues she had an attorney-client relationship with Respondent arising out of his representation of Son. Therefore, Appellant asserts that the transfer of title to the Beaufort County Property without her knowledge breached a duty of care Respondent owed to her. We disagree. "Generally, `an attorney is immune from liability to third persons arising from the performance of his professional activities as an attorney on behalf of and with the knowledge of his client.'" Pye v. Estate of Fox, 369 S.C. 555, 564, 633 S.E.2d 505, 509 (2006) (quoting Gaar v. N. Myrtle Beach Realty Co., Inc., 287 S.C. 525, 528, 339 S.E.2d 887, 889 (Ct.App.1986)). Further, an attorney owes no duty to a non-client unless he "breaches some independent duty to a third person or acts in his own personal interest, outside the scope of his representation of the client." Stiles v. Onorato, 318 S.C. 297, 300, 457 S.E.2d 601, 602 (1995). We find that Appellant was not Respondent's client and, therefore, was not owed a duty of care arising from such a relationship. The April 20, 2004 Durable Power of Attorney executed by Appellant unequivocally appointed Son as her attorney-in-fact to act on behalf of Appellant "in all matters pertaining to [her] care and maintenance." Specifically, Appellant appointed Son to act in her name and gave him broad 401 powers with respect to her estate, including the power to convey real estate.[4] Because Respondent represented Son and not Appellant in the Beaufort Property transaction, the only duty of care arising out of that relationship was owed to Son. Thus, we agree with the trial court's finding that Respondent did not owe a duty of care to Appellant. II. Intentional Infliction of Emotional Distress Appellant argues that the trial court erred in granting Respondent's motion for summary judgment with respect to Appellant's cause of action for intentional infliction of emotional distress. We disagree. In order to recover for intentional infliction of emotional distress, a plaintiff must establish: 1. The defendant intentionally or recklessly inflicted severe emotional distress, or was certain, or substantially certain, that such distress would result from his conduct; 2. The conduct was so "extreme and outrageous" so as to exceed "all possible bounds of decency" and must be regarded as "atrocious, and utterly intolerable in a civilized community;" 3. The action of the defendant caused plaintiff's emotional distress; and 402 4. The emotional distress suffered by the plaintiff was "severe" such that "no reasonable man could be expected to endure it." Hansson, 374 S.C. at 356, 650 S.E.2d at 71. The trial court granted Respondent's motion for summary judgment with respect to Appellant's cause of action for intentional infliction of emotional distress because it found no evidence in the record to suggest that Respondent's conduct was "so extreme and outrageous as to exceed all bounds of decency." Id. Appellant argues that Respondent's conduct was sufficiently extreme and outrageous to survive a summary judgment motion because he owed Appellant a duty of care arising out of an attorney-client relationship, thus breaching a duty owed to Appellant. Because we find that Appellant was not owed a duty of care arising out of an attorney-client relationship with Respondent, this argument is without merit. Thus, we affirm the trial court's grant of summary judgment as to Appellant's cause of action for intentional infliction of emotional distress. III. Legal Malpractice Appellant argues that the trial court erred in granting Respondent's motion for summary judgment as to the cause of action for legal malpractice. We disagree. A plaintiff in a legal malpractice action must establish four elements: 1. The existence of an attorney-client relationship; 2. A breach of duty by the attorney; 3. Damage to the client; and 4. Proximate cause of the plaintiff's damages by the breach. Rydde v. Morris, 381 S.C. 643, 647, 675 S.E.2d 431, 433 (2009) (citing Smith v. Haynsworth, Marion, McKay & Geurard, 322 S.C. 433, 435 n. 2, 472 S.E.2d 612, 613 n. 2 (1996)). Appellant cannot satisfy the first element of this cause of action because, as discussed above, there is no evidence in the record to suggest that an attorney-client relationship existed between Respondent and Appellant. Thus, the trial court correctly 403 granted Respondent's motion for summary judgment with respect to the cause of action for legal malpractice. IV. Abuse of Process Appellant argues the trial court erred in granting summary judgment as to her cause of action for abuse of process. We disagree. "The essential elements of abuse of process are an ulterior purpose and a willful act in the use of the process not proper in the conduct of the proceeding." Hainer v. Am. Med. Intern., Inc., 328 S.C. 128, 136, 492 S.E.2d 103, 107 (1997) (citing Huggins v. Winn-Dixie Greenville, Inc., 249 S.C. 206, 153 S.E.2d 693 (1967)). The abuse of process tort provides a remedy for one damaged by another's perversion of a legal procedure for a purpose not intended by the procedure. Food Lion, Inc. v. United Food Commercial Workers Int'l Union, 351 S.C. 65, 69, 567 S.E.2d 251, 253 (Ct.App.2002). We find no evidence in the record to suggest that Respondent had an "ulterior purpose" to his actions, let alone a "willful act in the use of the process not proper in the conduct of the proceeding." Hainer, 328 S.C. at 136, 492 S.E.2d at 107. In fact, the record indicates the contrary: Respondent acted with Appellant's best interests in mind, transferring her property to a trust for her benefit so that she might not bring financial harm to herself. Thus, we affirm the trial court's grant of summary judgment as to Appellant's cause of action for abuse of process. V. Conflict of Interest Appellant argues the trial court erred in granting summary judgment because there was evidence that Respondent had a conflict of interest with her. We disagree. Appellant's argument as to conflict of interest is predicated on the assumption that she was Respondent's client for the purposes of the Beaufort Property transaction. For the aforementioned reasons, no such attorney-client relationship existed, thus Appellant's argument is without merit. Nonetheless, Appellant also argues Respondent had a conflict of interest with her arising out of an alleged self-gift to Son effectuated by the creation of the trust. The logic of this 404 argument is puzzling because even if the creation of the trust effectuated a self-gift to Son a conflict of interest between Respondent and Appellant could not exist absent the existence of an attorney-client relationship. Nonetheless, addressing the argument raised, there is no evidence in the record indicating a self-gift to Son was effectuated by the creation of the trust. In responding to Appellant's allegations concerning a self-gift to Son, the dissent recognizes "an attorney may be liable to a third party where he conspires with a client against a third." However, the dissent goes too far when it states evidence in the record suggests a conspiracy between Respondent and Son against Appellant, and this evidence is sufficient to survive a motion for summary judgment in this matter. The record indicates Son retained Respondent to represent him in his capacity as Appellant's attorney-in-fact for the purpose of protecting Appellant's assets. Specifically, Son wanted to protect the Beaufort Property from Appellant's financial irresponsibility, an action permitted pursuant to Appellant's Durable Power of Attorney. The creation of the trust for the benefit of Appellant achieved the goal of protecting the Beaufort Property from Appellant's irresponsible behavior and there is no evidence in the record to suggest the transfer was intended as, or effectively created, a self-gift to Son. The fact that Son was the named residuary beneficiary of the trust does not compromise the legality of the transfer, or suggest a conspiracy between Son and Respondent. As residuary beneficiary, Son did not obtain legal title to the property and none of the powers that would accompany such an ownership interest. Additionally, naming Son the residuary beneficiary of the trust paralleled Appellant's estate plan and such a decision was presumably made because it mirrored Appellant's desires for the Beaufort Property. Thus, the record does not suggest Son and Respondent engaged in a conspiracy against Appellant resulting in a self-gift to Son, but rather indicates that Son and Respondent intended to protect Appellant's assets from her infirmities while honorably considering her intentions for the property as manifested in her estate plan. 405 Additionally, the dissent would create a rule that would extend an attorney's liability to those in privity with his or her client. We disagree with this general rule and vehemently oppose its adoption as it would apply in this situation. The Durable Power of Attorney at issue in this case was executed by Appellant so that Son could protect her interests from her poor judgment and erratic behavior. This type of arrangement is commonplace and serves a good purpose: the protection of the infirm from their own infirmities. The fact that an infirm principal of a Durable Power of Attorney does not appreciate an action taken by an attorney-in-fact pursuant to the power she willfully gave him, as is the case here, does not create liability for the attorney facilitating a transaction that is called into question.[5] Recognizing a duty owed to a third-party, even one in privity to an attorney's client, would undermine the good and common practice of executing Durable Powers of Attorney that are intended to provide the principal protection from their own infirmities. For the aforementioned reasons, we find no conflict of interest existed between Respondent and Appellant and that no self-gift was effectuated by the creation of the trust. CONCLUSION Respondent did not owe any duty to Appellant arising out of his representation of Son in the Beaufort Property transaction; thus, the trial court's order granting summary judgment with respect to all causes of action should be affirmed. Additionally, no conflict of interest existed between Respondent and Appellant. Therefore, the trial court's order is affirmed. BEATTY, KITTREDGE and HEARN, JJ., concur. PLEICONES, J., dissenting in a separate opinion. 406 Justice PLEICONES. I respectfully dissent. In my view, there are genuine issues of material fact which preclude summary judgment here. I agree that, generally, where an individual who holds a power of attorney hires an attorney, that attorney's client is the attorney-in-fact and not the principal who executed the power. E.g., Estate of Keatinge v. Biddle, 789 A.2d 1271 (Me.2002). I also agree that, in general, an attorney who acts in good faith with the authority of his client is not liable to a third party for the performance of his professional services. E.g., Gaar v. North Myrtle Beach Realty, Inc., 287 S.C. 525, 339 S.E.2d 887 (Ct.App.1986). However, an attorney may be liable to a third party where he conspires with a client against that third party, see Stiles v. Onorato, 318 S.C. 297, 457 S.E.2d 601 (1995), or where his professional negligence injures a party in privity with his client. Gaar, supra. In other words, I largely agree with the majority on the applicable law. Where I disagree, however, is with the consequences, at least for the purposes of summary judgment, of respondent's advice and assistance to Son to exercise his authority as Appellant's attorney-in-fact to transfer title to the Beaufort Property from Appellant's name into a trust. Unlike the majority, I am not persuaded that, because at the time the property was transferred to the trust, Son was also the devisee under Appellant's current will, it can be said that this transfer was, as a matter of law, not a self-gift.[6] Until the transfer of title to the trust, Appellant had the right to dispose of the property during her lifetime or to change her testamentary disposition of the Beaufort Property. Once the trust was established, however, she could no longer dispose of this property during her lifetime or in her will.[7] In my opinion, the evidence here is sufficient to withstand respondent's motion for summary judgment on appellant's *407 claims of legal malpractice and conflict of interest. I would reverse. NOTES [1] The legal issues presented in this case arise out of Respondent's representation of Son. However, Respondent also assisted Husband in the filing of an Application for Involuntary Emergency Hospitalization for Mental Illness, which caused Appellant to be admitted against her will to the South Carolina Department of Mental Health Psychiatric Hospital. [2] In addition to sharing details about Appellant's financially irresponsible behavior, Husband and Son told Respondent that Appellant claimed to be tormented by demons and witches and had become paranoid. [3] Prior to April 20, 2004, Husband was Appellant's attorney-in-fact. Appellant claims she made Son her attorney-in-fact because she feared husband would use this power to harm her. [4] Specifically, by way of the April 20, 2004 Durable Power of Attorney, Appellant empowered Son to: [A]llot, assign, buy, care for, collect, contract with respect to, continue any business of [hers], convey, convert, endorse, deal with, dispose of, enter into, exchange, hold, improve, incorporate any business of [hers], invest, endorse, cash, lease, manage, mortgage, grant and exercise options with respect to, take possession of, pledge, receive, release, repair, sell, sue for and in general, to exercise all the powers in the management of [her] affairs and estate which any individual could exercise in the management of similar property owned in his own right, upon such terms and conditions as [her] attorney-in-fact may seem best, and to execute and deliver any and all instruments and to carry and to do any and all acts which [her] attorney-in-fact may deem proper or necessary to care for [her] in a manner and to the same degree of comfort to which [she] ha[s] become accustomed to living. [5] To be clear, third-party liability in a situation such as this could arise if it is shown that an attorney "breaches some independent duty to a third person or acts in his own personal interest, outside the scope of his representation of the client." Onorato, 318 S.C. at 300, 457 S.E.2d at 602. There is no evidence in the record to support a claim that Respondent acted in any manner that would create liability to third parties, including Appellant. [6] It appears that the majority and I agree that Son's power of attorney did not contain a provision permitting Son to make a gift to himself. See e.g. Loftis v. Eck, 288 S.C. 154, 341 S.E.2d 641 (Ct.App.1986). [7] It appears that the trust has been dissolved and fee simple title to the property returned to Appellant as part of a settlement between her and Husband and Son. In my view, while this fact may affect Appellant's damages it does not impact Respondent's potential liability.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346621/	199 N.W.2d 424 (1972) Christopher ALLEN, a minor, by Robert Allen, his father and natural guardian, and Robert Allen, individually, et al., Respondents, v. James GANNAWAY et al., Appellants. No. 43381. Supreme Court of Minnesota. June 30, 1972. 425 Maun, Hazel, Green, Hayes, Simon & Aretz and M. C. Green, St. Paul, for appellants. Joseph H. Rivard, David W. Nord, St. Paul, for respondents. Heard and considered en banc. KNUTSON, Chief Justice. This is an appeal from an order of the District Court of Washington County denying defendants' motions for summary judgment and for certain interlocutory orders, 426 but certifying to this court that the questions presented by the motions are important and doubtful, which permits review under Rule 103.03(i), Rules of Civil Appellate Procedure. The actions have been consolidated for hearing here. The appeal presents a single question which is decisive, namely, whether Nevada law or Minnesota law should control in the trial of the lawsuit. This question is important because Nevada has a guest statute and we have none.[1] The facts are not seriously in dispute.[2] On March 23, 1970, five young men, all approximately 19 to 20 years of age, departed from Minnesota on a trip that was to take them across the central United States, through Denver and San Francisco, with their ultimate destination a small ranch near Spokane, Washington. The trip was never completed. On March 25, about 6:15 a. m., the automobile in which the five were riding went off a Nevada highway and rolled over. One of them, Russell Johnson, a plaintiff in this action, was thrown free of the car, was injured seriously, and was hospitalized in Reno. The other plaintiff, Christopher Allen, was also injured and hospitalized in Reno. The depositions do not detail the extent to which these two were injured or whether the others suffered any injuries at all. The automobile used for the trip was a Chevy II station wagon owned by James Gannaway, one of the five who made the trip and a codefendant in both actions. It was licensed, insured, and normally garaged in Minnesota. Robert Hobbs, the other codefendant, was driving at the time of the accident. The fifth young man, Bruce Pinke, is not a party to either action, but his deposition was taken as a witness. The trip which ended with the accident in Nevada had sprung from Hobbs' suggestion to Pinke that they go to Spokane and help one John Boe, whom Hobbs had met in the Marine Corps, set up a ranch. Pinke communicated the idea to Gannaway, with whom Pinke attended the University of Minnesota at Morris. Pinke also recruited Johnson, a friend from high school, when they met in a restaurant in Cottage Grove. Gannaway enlisted Allen, who was an off-and-on student at Morris and lived in the same building as Gannaway. All of the participants agreed to start out from the Cottage Grove area. Gannaway left his parents' home in St. Paul Park, and picked up the others, three of them from Pinke's parents' home and Hobbs from his parents' home in St. Paul Park, sometime between 8 and 10 a. m. that Monday morning, March 23, 1970. The plan was to share the expenses and the driving among the five of them. Each of the young men had his own thoughts about how long he would stay in Washington; each also had individual connections with Minnesota and the other states. In light of the "contacts" theory of conflicts of law, these need to be set out: (1) James Gannaway, owner of the car and codefendant, was domiciled in Minnesota at the time the trip began, living either in Morris, at school, or with his parents. His driver's license and draft registration were in Minnesota, and he stated that he considered his parents' house his home. After the accident in Nevada he returned home. He then went to Spokane, staying about a month at John Boe's ranch, the original destination of the ill-fated trip, after which he returned to Minnesota. He had no connection whatsoever with Nevada, nor were connections with any other state brought out in the deposition. (2) Bruce Pinke was also domiciled in Minnesota prior to the trip. He also attended school at Morris, and his parents 427 lived in Cottage Grove, which he felt was his home prior to the trip. He stated that he left with the intention of staying in Spokane, at least for a while; and in fact after the accident he continued to San Francisco and then to Spokane. Except for short visits in Minnesota, he has remained in Washington since then; he now goes to school there and considers that his home. On April 1, 1971, he obtained a Washington driver's license, but his draft registration is still at Stillwater, Minnesota. He has no connection with the State of Nevada. (3) Christopher Allen, one of the plaintiffs, stated that his home at the time the trip began was Needham, Massachusetts, where his parents lived at that time, although just prior to the trip he had been living in Morris, Minnesota, and West Salem, Wisconsin. He was apparently not domiciled in Minnesota. After the accident he remained in Nevada for a time, then returned to Wisconsin. Thereafter he made a short trip to Reno to visit persons he had met when he was there earlier, and then returned to Morris. When he left on the trip here involved, he had no definite plans to stay in Washington, to return to school, or to do something other than that; rather, he was waiting to see how it worked out. Allen had no apparent connections with Nevada prior to the accident but became acquainted with people while he was in Reno recovering from his injuries and waiting for Russell Johnson's release from the hospital. (4) Robert Hobbs, the driver at the time of the accident, had been in the Marine Corps and had returned to Minnesota, where he lived either with his parents or in apartments in the Twin Cities. John Boe, whose father owned the property near Spokane, had been a friend of Hobbs in the service. Hobbs had visited him at about Christmas time in 1969 and had returned to Minnesota with the idea of going back and setting up the ranch with Boe. When Hobbs left on the trip, he had made no specific plans as to how long he would stay in Washington, but had thought he would stay the summer or longer. As it turned out, he spent 3 weeks in Washington after the accident and then returned to Minnesota. He apparently had never established any domicile other than Minnesota. He indicated no connections with Nevada or any state other than Minnesota or Washington. (5) Russell Johnson lived with his parents in Cottage Grove both prior to and after the trip. He looked on the trip as a short vacation, planning to return to Minnesota in about 2 weeks. He was domiciled in Minnesota and had no connections with any other state. In a number of cases Minnesota has adopted the "center of gravity of the contacts" theory of conflicts of law. The law has been so thoroughly explored in prior decisions that we see no need of repeating here what we have already said. An examination of the following cases shows both the law we formerly followed and what we have now adopted. Phelps v. Benson, 252 Minn. 457, 90 N.W.2d 533 (1958), applied the lex loci delicti theory of conflicts formerly followed by this court. Beginning with Balts v. Balts, 273 Minn. 419, 142 N.W.2d 66 (1966), and followed in Kopp v. Rechtzigel, 273 Minn. 441, 141 N.W.2d 526 (1966); Schneider v. Nichols, 280 Minn. 139, 158 N.W.2d 254 (1968), and Bolgrean v. Stich, Minn., 196 N.W.2d 442 (1972), we abandoned the lex loci delicti theory, at least where the facts bring the case within the center-of-gravity-of-the-contacts theory, which we have discussed in the later cases. The only substantial difference between the case now before us and the others mentioned above is that one of the parties, Christopher Allen, had no definite domicile in the State of Minnesota; but apparently he had no definite domicile anywhere else either. At that time his parents lived in Massachusetts and he spent some time in West Salem, Wisconsin; but immediately prior to the ill-fated trip he was 428 at least a part-time student at Morris, Minnesota. Consequently, having no contacts with the State of Nevada, except that the accident happened there, he had more contacts with Minnesota than with any other state. We think the theory announced in our prior cases would bring him within the rule permitting recovery in an action brought in this state. It might also be arguable that the facts in this case might distinguish it from any of those we have recited before since the young men involved in this excursion had no definite plans to return to Minnesota, at least not for some time. In most of the other cases involving this question, the trip usually encompassed a short drive into another state, with the intention of returning to Minnesota. Irrespective of this difference, it would seem that there are substantial contacts with Minnesota and none with Nevada. We think the rule announced in our former decisions should be followed here even though some of the parties may have intended to remain in the State of Washington for indefinite periods of time had they reached their destination without incident. In examining the contacts which the various states involved have in this case, it is apparent that only Minnesota had more than passing interest in this action. Unlike Schneider v. Nichols, supra, where the accident occurred in the state of the driving defendant's residence, the mishap in the present case occurred in a state where none of the principals resided. Defendants' main thrust is that we should return to the lex loci delicti theory, in which event Nevada law would apply. We decline to do so. It might be argued that Washington law should be applied because that was the intended destination. But the fact remains that the young men never arrived there, and Washington has no other connection with the incident and no other interest in the lawsuit. We are satisfied that the trial court determined correctly that the law of Minnesota should apply. Costs and disbursements are disallowed for failure to comply with Rule 132.01, Rules of Civil Appellate Procedure. Affirmed. MURPHY, J., took no part in the consideration or decision of this case. MacLAUGHLIN, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case. NOTES [1] See, Nev.Rev.Stat. § 41.180 (1969). [2] There has been no trial in either case; therefore the "transcript" consists of the depositions of the five persons involved in the accident.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346736/	199 N.W.2d 713 (1972) 189 Neb. 92 STATE of Nebraska ex rel. Harry P. ANDERSEN et al., Appellants, v. Eugene A. LEAHY, Mayor of the City of Omaha, et al., Appellees. No. 38433. Supreme Court of Nebraska. August 4, 1972. 714 Warren S. Zweiback, Mark L. Laughlin, Omaha, for appellants. Herbert M. Fitle, City Atty., Frederick A. Brown, Seymour L. Smith, Omaha, for appellees. Heard before WHITE, C. J., SPENCER, BOSLAUGH, McCOWN, NEWTON, and CLINTON, JJ., and RONIN, District Judge. WHITE, Chief Justice. This is a mandamus action. The essential question is whether the ordinance annexing the City of Millard to Omaha may be attacked and repealed by a vote of the electors of Omaha on an initiative petition. The district court denied relief and we affirm. The background history of this litigation is as follows. On December 5, 1967, the city council of Omaha passed ordinance No. 24496, annexing Millard. This ordinance, by its terms, became effective 16 days after passage, or on December 21, 1967. It was attacked by suit in district court, judgment being against Millard. This court affirmed June 5, 1970. City of Millard v. City of Omaha, 185 Neb. 617, 177 N.W.2d 576. An appeal to the United States Supreme Court was rejected March 8, 1971 (401 U.S. 951, 91 S. Ct. 975, 28 L. Ed. 2d 234). Motion for rehearing was overruled April 19, 1971 (402 U.S. 925, 91 S. Ct. 1366, 28 L. Ed. 2d 664). On December 13, 1967, a temporary injunction was allowed, containing reciprocal restraints. It was allowed by agreement of the parties, and had no provisions preventing the circulation of a referendum petition during the statutory 15 days allowed therefor. On May 3, 1971, the petitions in suit were filed with the demand that the city clerk examine the petitions to ascertain the number of qualified electors signing same; and that if the number of signatures were sufficient the council proceed to repeal ordinance No. 24496, or submit the question of its repeal to the electors of Omaha, as it exists, with Millard annexed. In holding the Millard annexation valid, this court stated the basic law applicable, which is the law of this case, as follows: 715 "`* * * The state, therefore, at its pleasure may modify or withdraw all such powers, may take without compensation such property, hold it itself, or vest it in other agencies, expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the charter and destroy the corporation. All this may be done, conditionally or unconditionally, with or without the consent of the citizens, or even against their protest. In all these respects the state is supreme, and its legislative body, conforming its action to the state Constitution, may do as it will, unrestrained by any provision of the Constitution of the United States.' This language was reaffirmed in Sailors v. Board of Education, 387 U.S. 105, 87 S. Ct. 1549, 18 L. Ed. 2d 650." (Emphasis ours.) City of Millard v. City of Omaha, supra. Therein we also said: "The protection of such persons and property is a matter of state concern and in fulfillment of its duties in this respect, the state must fix the rules and regulations pertaining to annexation procedures. * * * "Municipal corporations are legislative creations and as such, subject to dissolution by legislative action. See Burger v. City of Beatrice, 181 Neb. 213, 147 N.W.2d 784." Under section 14-117, R.R.S.1943 (metropolitan cities annexation statute), the former territory of the City of Millard became annexed to and a part of Omaha on or about December 21, 1967. The record shows extensive assumptions of obligation by Omaha of governmental powers and responsibilities including police, health, and fire protection duties and the merging of fiscal and tax authority. It is conceded that no referendum petition was filed as prescribed by section 14-211, R.R.S.1943, and therefore it appears under the express terms of that statute that no action was taken to delay the effectiveness of the annexation ordinance. The petition herein was filed under section 14-210, R.R.S.1943, relating to initiative petitions which provides in pertinent part: "The right to enact ordinances for any metropolitan city is hereby granted to the qualified electors of such city, but such grant is made upon the following conditions and in addition to the right herein granted to the council to legislate: * * ." Extensive argument is made as to whether an initiative process may be used to repeal an ordinance or statute. It appears that it may be so used. See, Klosterman v. Marsh, 180 Neb. 506, 143 N.W.2d 744; 82 C.J.S. Statutes § 120, p. 199; Annotation, 33 A.L.R. 2d 1118. We do not reach that question in resolving the issue in this case. It appears conclusively from what we have said that Millard became annexed and incorporated into the City of Omaha on December 21, 1967. It has been a part of Omaha, Nebraska, since then, and its residents legal voters and electors of that city as the petitions relied upon by relators demonstrate. So the question here becomes whether the initiative process may be used to detach or deannex that portion of Omaha which was Millard prior to the time the annexation ordinance went into effect. There is no doubt that the detachment of territory from a municipal corporation, like annexation, is a matter of statewide concern, and not one of local or municipal concern. In Village of Niobrara v. Tichy, 158 Neb. 517, 63 N.W.2d 867, this court said: "A municipal corporation may not, without the sanction of the state by constitutional provision or legislative enactment, annex territory to its corporate area or change its boundaries." (Emphasis ours.) In MacGowan v. Village of Gibbon, 94 Neb. 772, 144 N.W. 808, it was held: "The power to change lawfully established boundaries of a municipality and to define the terms on which territory may be detached therefrom is legislative." See, also, 716 2 McQuillin (1969 Rev.Ed.), Municipal Corporations, s. 724, p. 400. The Legislature, in delegating this power, specifically did not grant power to cities of the metropolitan class (Omaha) to detach or contract its boundaries. It only grants power to extend (annex) its boundaries. A little reflection on the chaotic practical effects of permitting whimsical or ill-considered detachment or de-annexation reveals the strong policy considerations for such a denial by the Legislature. We point out that section 17-414, R.R.S.1943, does permit detachment to cities of the second class and villages, an obviously different situation. Neither did the original metropolitan cities act, enacted in 1921, now sections 14-117 to 14-125, R.R.S.1943, or any subsequent statute, permit such detachment or contraction of Omaha's boundaries. This being true, we reach the crucial holding in this case. It is that an ordinance proposed by the electors of a city under the initiative law must constitute such legislation as the city council or the legislative body of the city has the power to enact under the delegated powers granted and defined by the state Legislature. 5 McQuillin (1969 Rev.Ed.), Municipal Corporations, s. 16.54, p. 208; 42 Am.Jur.2d, Initiative and Referendum, s. 7, p. 655; Dewey v. Doxey-Layton Realty Co., 3 Utah 2d 1, 277 P.2d 805; Gamrin v. The Mayor and Council of Englewood, 76 N.J. Super. 555, 185 A.2d 55; Lindsley v. Dallas Consol. St. Ry. Co. (Tex.Civ.App.), 200 S.W. 207; 2 McQuillin (1969 Rev.Ed.), Municipal Corporations, s. 7.24, p. 400; Newsom v. Board of Supervisors (Cal), 261 P. 990; Village of Beachwood v. Board of Elections, 167 Ohio 369, 148 N.E.2d 921; Pittsburgh, C., C. St. L. Ry. Co. v. City of Anderson, 176 Ind. 16, 95 N.E. 363; 62 C.J.S. Municipal Corporations § 454, p. 872; Custer City v. Robinson, 79 S.D. 91, 108 N.W.2d 211. The relators' contention, at bottom, is based on the untenable premise that annexation is a matter of statewide concern, under the Legislature's direction but that detachment is a matter of local concern. Such a position flies in the face of our decisions to the contrary, is logically inconsistent, and would enable the local electorate to harass and whimsically destroy the Legislature's statewide law-making power under the Constitution. We therefore hold that after Millard became legally annexed, the initiative process provided for under section 14-210, R.R.S.1943, could not be invoked to detach or de-annex the territory that was formerly Millard and that the district court was correct in denying mandamus to compel the honoring of the petitions and the placing of the issue on the ballot. In light of our decision it is not necessary to pass on the numerous other issues extensively argued in the briefs. The judgment of the district court is correct and is affirmed. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346739/	199 N.W.2d 5 (1972) 188 Neb. 673 The EXCHANGE BANK, Gibbon, Nebraska, a Corporation, Appellee, v. MID-NEBRASKA COMPUTER SERVICES, INC., a Corporation, et al., Appellants. No. 38342. Supreme Court of Nebraska. June 23, 1972. 6 Knapp, Tarrell, State & Yeagley, Kearney, for appellants. Tye, Worlock, Tye, Jacobsen & Orr, Kearney, for appellee. Heard before SPENCER, SMITH, and NEWTON, JJ., and LYNCH and MORAN, District Judges. LYNCH, District Judge. This is an action to foreclose two separate mortgages on the same property. The defendants filed a general denial. The plaintiff proved execution of the notes and mortgages, defaults, and amounts due. The instruments were received in evidence and canceled and merged in judgment. Defendants' counsel cross-examined only as to amounts due and interest and offered no testimony. A decree in proper form was entered which included findings that certain amounts were due to plaintiff. The defendants' motion for new trial, based upon four general allegations of error, was overruled. At an ex parte hearing in chambers, defendants' counsel tendered a supersedeas bond conditioned pursuant to subsection (3) of section 25-1916, R.S.Supp., 1971. The court required a bond under subsection (1) of that statute. On appeal the defendants contend that: (1) There was not competent evidence to support the allegation that no proceedings at law had been instituted for the recovery of the debts; and (2) the court erred in requiring a bond pursuant to subsection (1) of section 25-1916, R.S.Supp., 1971. Concerning defendants' first argument, the case of Nielsen v. Central Nebraska Land & Investment Co., 87 Neb. 518, 127 N.W. 897, is controlling: "If there is some circumstantial evidence which tends to sustain the allegation in a petition for the foreclosure of a mortgage that no proceedings at law have been had for the recovery of the debt, and nothing appears to show that the defendant has been prejudiced by the omission of direct proof, this court will observe the provisions of section 145 of the code, and the judgment will not be reversed merely by reason of such defect." Section 145 of the code is now section 25-853, R.R.S.1943. Dicta in the Nielsen case states: "The allegation is negative in its nature, and we have said that where there is some evidence tending to support the allegation, and no contrary showing is attempted, a decree of foreclosure will be affirmed." Also, "The record fails to show that this objection was called to the attention of the district court. No error affecting defendants' substantial rights is apparent." In the instant case there was some circumstantial evidence tending to support the negative allegation in the petition; there was no contrary showing attempted; there was no proof of prejudice; and the objection was not called to the attention of the trial court. Therefore, this assignment of error is not well taken. All of defendants' citations are distinguishable. In support of their second assignment of error, the defendants rely solely upon section 25-1916, R.S.Supp., 1971, and the case of Kountze v. Erck (1895), 45 Neb. 288, 63 7 N.W. 804, which was an appeal from an order confirming the sale of real property. In that case the court held that: "* * * the penalty of a supersedeas bond on appeal from the order of confirmation is not required to be double the amount of the deficiency judgment, but must be in such sum as the court or judge shall fix, and conditioned as prescribed by the third subdivision of section 677 of the Code of Civil Procedure." Section 677 of the code is similar to the present section 25-1916, R. S.Supp., 1971. The court further stated: "The defendant has not appealed, nor attempted to do so, from the amount of the deficiency judgment, but merely from the order confirming the sale of the mortgaged premises, which order does not direct the payment of any sum of money whatever. It is true a deficiency judgment was rendered in the case at the same time, but the defendant had a perfect right to have either or both reviewed at his election." In the case of State ex rel. Baker v. Baxter (1903), 4 Neb. Unof. 869, 96 N.W. 647, the court held: "Where a decree awards the plaintiff a personal judgment against the defendants, and also directs the sale of pledged property by way of foreclosure, the defendants may supersede that portion of the decree providing for foreclosure of the pledge without superseding the money judgment." In 5A C. J. S. Appeal and Error § 1635, p. 188, it is stated: "The exercise by the trial court of its discretion with respect to * * * fixing the terms and conditions of a supersedeas bond, will not be interfered with on appeal unless there has been a manifest abuse of discretion or injustice has resulted." In State v. Kidder, 169 Neb. 181, 98 N.W.2d 800, this court held: "A defective appeal bond which has been approved by the court rendering the judgment confers jurisdiction on the appellate court to have the defect corrected, and the appellate court is required to permit an amendment of the bond or to order the filing of a new bond in the furtherance of justice." It is concluded that in superseding a decree of foreclosure which orders the sale of land, the bond should be conditioned as set out in subsection (3) of section 25-1916, R.S.Supp., 1971, and the amount of the pledge or penalty a matter of judicial discretion; and, in appealing from a decree which directs the payment of money and also orders the sale of real estate, the trial court may require a supersedeas bond in an amount computed as specified in subsection (1) and conditioned as provided in subsections (1) and (3) of the statute. In the instant case it appears that defendants appealed from the money judgments and the order of sale. There has been no showing of prejudice or abuse of discretion either as to the amount or the conditions of the bond. A copy of the supersedeas bond is not included in the record; however, if it does not contain the conditions prescribed in subsection (3) of section 25-1916, R.S.Supp., 1971, it should be amended if requested by the plaintiff. Applicable to both aspects of defendants' appeal is section 25-853, R.R.S. 1943, which requires the court to disregard defects not affecting the substantial rights of the adverse party. The case of Jacobitz v. Bussinger, 179 Neb. 524, 138 N.W.2d 839, holds that, "* * * an appeal bond or undertaking is within the purview of the statute." The judgment of the trial court is affirmed. Defendants directed to amend bond if requested by plaintiff. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1644114/	4 So. 3d 1242 (2009) JOSEPH v. STATE. No. 5D08-3340. District Court of Appeal Florida, Fifth District. February 24, 2009. Decision without published opinion. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346559/	205 Wis. 2d 183 (1996) 556 N.W.2d 90 STATE of Wisconsin, Plaintiff-Respondent-Petitioner, v. George C. LOHMEIER, Defendant-Appellant. No. 94-2187-CR. Supreme Court of Wisconsin. Oral argument September 10, 1996. Decided November 29, 1996. 186 For the plaintiff-respondent-petitioner the cause was argued by William C. Wolford, assistant attorney general, with whom on the briefs was James E. Doyle, attorney general. For the defendant-appellant there was a brief by Dennis P. Coffey and Coffey, Coffey & Geraghty, Milwaukee and oral argument by Dennis P. Coffey. 187 Amicus curiae was filed by Edward F. Thompson, James P. Martin and Clair Law Offices, S.C., Delavan for Rosanne Belair, The Victim's Mother. N. PATRICK CROOKS, J. The State of Wisconsin seeks review of a published decision of the court of appeals,[1] which reversed a judgment of the circuit court for Walworth County, the Honorable James L. Carlson presiding, convicting George C. Lohmeier of two counts of homicide by operation of a vehicle while under the influence of an intoxicant contrary to Wis. Stat. § 940.09(1)(a) (1991-92).[2] The State argues that the circuit court judge did not effectively deny Lohmeier a meaningful opportunity for consideration by the jury of his statutory affirmative defense under Wis. Stat. § 940.09(2), by instructing the jury that "[i]t is no defense to a prosecution for a crime that the victim may have been contributorily negligent." We conclude that in light of the entire proceedings, there does not exist a reasonable likelihood that the contributory negligence instruction, in combination with Wis JICriminal 1185, 1186, and 1188, misled the jury into believing it could not consider the conduct of the two young women who were killed in relation to the affirmative defense. Accordingly, we reverse the decision of the court of appeals. 188 I. On June 10, 1993, George C. Lohmeier struck Renee Belair and Stacie Rogers with his car as they were walking on Willis Bay Road in Walworth County. Lohmeier left the scene of the collision, but later returned and admitted to police that the vehicle he was driving struck the young women. Police arrested Lohmeier at the scene after he failed a field sobriety test. Lohmeier was subsequently charged with six counts, including two counts of homicide by operation of a vehicle while under the influence of an intoxicant contrary to Wis. Stat. § 940.09(1)(a), two counts of homicide by operation of a vehicle with a prohibited alcohol concentration contrary to Wis. Stat. § 940.09(1)(b), and two counts of hit and run causing death contrary to Wis. Stats. §§ 346.67, 346.74(5). A jury trial was held November 1 through November 4, 1993. Evidence at the trial indicated Lohmeier's blood alcohol content was 0.186% at the time of the accident. Michael Sugrue testified that as he passed the young women, they were walking toward him on the other side of the road, one on the edge of the road and the other toward the ditch. Three to five seconds after this, Sugrue passed Lohmeier, who was driving in the opposite direction. Sugrue testified that Lohmeier's car was "far over on the edge of the road" toward the ditch line. (R. 51 at 172.) Sugrue watched Lohmeier's car in his rear-view mirror, and said he was surprised Lohmeier was not "getting over" as he approached the young women. (R. 51 at 172-73.) After seeing a white object fly over Lohmeier's car, Sugrue turned around and drove to the site, where he found one of the young women lying in the road. Both young women died as a result of the collision. 189 At the trial, Lohmeier attempted to establish the statutory affirmative defense of Wis. Stat. § 940.09(2)[3] to the four vehicular homicide counts. In particular, he presented evidence that the young women were walking on the right side of the road as prohibited by statute. See Wis. Stat. § 346.28(1). Lohmeier further argued that the young women had moved from the side of the road into the traffic lane, and supported this with evidence that they were hit on the roadway. Lohmeier also presented evidence of similar behavior by the young women on other occasions. In addition, Lohmeier presented the opinion of an expert in accident reconstruction. The expert testified that most people would not have been able to avoid the accident even if they were exercising due care and were not under the influence of an intoxicant. On rebuttal, the State presented expert testimony that a sober person exercising due care could have stopped and avoided striking the young women. At the conclusion of the trial, the court read Wis JICriminal 1185,[4] which provided with respect to Lohmeier's § 940.09(2) defense: If you are satisfied beyond a reasonable doubt that the defendant caused the death of Stacie Rogers and Renee L. Belair by operating a vehicle while the defendant was under the influence of an intoxicant, you must determine whether the defendant has a 190 defense to this crime by considering the following: Would the death of Stacie Rogers and Renee L. Belair have occurred even if the defendant had been exercising due care and had not been under the influence? Wisconsin law provides that it is a defense to the crime charged in this case if you are satisfied to a reasonable certainty by a greater weight of the credible evidence that the death would have occurred even if the defendant would have been exercising due care and had not been under the influence. . . . If you are satisfied to a reasonable certainty by the greater weight of the credible evidence that the death of Stacie Rogers and Renee L. Belair would have occurred even if the defendant had been exercising due care and had not been under the influence, then you must find the defendant not guilty. . . . (R. 51 at 634-35.) Similarly, the court read Wis JICriminal 1186, which relates to the homicide by prohibited alcohol concentration charge, and corresponds in substance with Wis JICriminal 1185 regarding Lohmeier's affirmative defense. Immediately following this, the court read the following special instruction[5] over Lohmeier's objection: "You are further instructed as to these four counts that it is no defense to a prosecution for a crime that the victim may have been contributorily negligent." (R. 51 at 639.) The State requested this instruction based on Wis. Stat. § 939.14.[6] 191 The jury subsequently found Lohmeier guilty on all counts. Consistent with Wis. Stat. § 940.09(1m),[7] the court entered a judgment of conviction and sentence for two counts of homicide by intoxicated use of a vehicle under § 940.09(1)(a), as well as two counts of hit and run causing death under §§ 346.67, 346.74(5).[8] The court of appeals reversed in part and remanded, holding that the contributory negligence instruction deprived Lohmeier of a meaningful opportunity for consideration by the jury of his affirmative defense under § 940.09(2), because there existed a "probability" that the jury was misled and therefore did not consider the young women's conduct in regard to Lohmeier's statutory affirmative defense. Lohmeier, 196 Wis. 2d at 444. II. [1] Initially, we consider the applicable standard of review. Lohmeier's claim is essentially based on due process, because he contends that the circuit court denied him a meaningful opportunity for consideration by the jury of his defense. See State v. Heft, 185 Wis. 2d 288, 302-03, 517 N.W.2d 494 (1994). This is a question 192 of constitutional fact, which we review de novo. See id. at 296. In addition, in cases involving challenged jury instructions, appellate courts generally apply harmless error analysis to determine whether reversal is required. See, e.g., State v. Zelenka, 130 Wis. 2d 34, 387 N.W.2d 55 (1986); State v. Dyess, 124 Wis. 2d 525, 370 N.W.2d 222 (1985); State v. Paulson, 106 Wis. 2d 96, 315 N.W.2d 350 (1982). However, harmless error analysis is not applicable in this case, because Lohmeier is not contending that the contributory negligence instruction is an erroneous legal statement. Instead, Lohmeier is arguing that the instruction, when coupled with Wis JICriminal 1185, 1186, and 1188, was confusing and therefore subject to misinterpretation by the jury. Accordingly, the focus in this case is not whether there was error, and if so, whether it is harmless, because the instruction concededly is not erroneous. We therefore must determine the proper inquiry for appellate courts to apply when considering whether the interplay of challenged jury instructions violated a defendant's constitutional rights by misleading the jury. Admittedly, the applicable standard is not clear from our previous cases. For example, in State v. Schulz, 102 Wis. 2d 423, 307 N.W.2d 151 (1981), we stated, "When a jury charge is given in a manner such that a reasonable juror could have misinterpreted the instructions to the detriment of a defendant's due process rights, then the determination of the jury is tainted." Id. at 427 (emphasis added). On the other hand, we have also determined that where a defendant argues a challenged jury instruction misled the jury into imposing a lesser burden than reasonable doubt upon the state in a criminal case, the proper standard 193 is whether there is a "reasonable likelihood" that the jury was misled. State v. Avila, 192 Wis. 2d 870, 889, 532 N.W.2d 423 (1995) (emphasis added). [2-4] We conclude that the proper standard for Wisconsin courts to apply when a defendant contends that the interplay of legally correct instructions impermissibly misled the jury is whether there is a reasonable likelihood that the jury applied the challenged instructions in a manner that violates the constitution. In so doing, we are following the standard set forth by the United States Supreme Court in Boyde v. California, 494 U.S. 370, 378-81 (1990), and in Estelle v. McGuire, 502 U.S. 62, 72-73 (1991). See also Victor v. Nebraska, 511 U.S. 1 (1994); Williams v. Chrans, 945 F.2d 926, 938 (7th Cir. 1991), cert. denied, 505 U.S. 1208 (1992); Avila, 192 Wis. 2d at 889. We find the Boyde Court's rationale persuasive, in particular: This "reasonable likelihood" standard, we think, better accommodates the concerns of finality and accuracy than does a standard which makes the inquiry dependent on how a single hypothetical "reasonable" juror could or might have interpreted the instruction. . . . Jurors do not sit in solitary isolation booths parsing instructions for subtle shades of meaning in the same way that lawyers might. Differences among them in interpretation of instructions may be thrashed out in the deliberative process, with commonsense understanding of the instructions in light of all that has taken place at the trial likely to prevail over technical hairsplitting. Boyde, 494 U.S. at 380-81. Thus, Wisconsin courts should not reverse a conviction simply because the jury possibly could have been misled; rather, a new trial 194 should be ordered only if there is a reasonable likelihood that the jury was misled and therefore applied potentially confusing instructions in an unconstitutional manner. Furthermore, in making this determination, appellate courts should view the jury instructions in light of the proceedings as a whole, instead of viewing a single instruction in artificial isolation. See id. at 378, 383. III. Before applying the reasonable likelihood standard to the case at hand, we consider the relationship between the § 940.09 affirmative defense and the contributory negligence rule of § 939.14, because this issue understandably caused confusion during the trial. Throughout the proceedings, the parties disputed whether the young women's conduct could constitute the basis for Lohmeier's § 940.09(2) affirmative defense, in light of § 939.14. Likewise, the circuit court indicated it was troubled by this issue, although it ultimately allowed Lohmeier to try to establish the defense based on the young women's actions, and instructed the jury on it. [5] In State v. Caibaiosai, 122 Wis. 2d 587, 596, 363 N.W.2d 574 (1985), this court stated that § 940.09(2) "provide [s] a defense for the situation where there is an intervening cause between the intoxicated operation of the automobile and the death of an individual." Although it is correct that § 940.09(2) provides an affirmative defense where there is an intervening cause, this defense can also be understood by focusing on the language of the statute itself, which makes no reference to an intervening cause. Under § 940.09(2), "A defendant has a defense if he or she 195 proves by a preponderance of the evidence that the death would have occurred even if he or she had been exercising due care and he or she had not been under the influence of an intoxicant. . . ." With this in mind, we conclude that a victim's conduct can be the basis of the § 940.09(2) affirmative defense. Clearly, situations can arise where, because of the victim's conduct, an accident would have been unavoidable even if the defendant had been driving with due care and had not been under the influence.[9] [6] Moreover, the § 940.09 affirmative defense is not inconsistent with the contributory negligence rule of § 939.14. It is widely recognized that contributory negligence is not a defense in a criminal prosecution. See People v. Tims, 534 N.W.2d 675, 681 (Mich. 1995) (citing several cases following this "universal rule"). Yet, it is important to recognize that this rule has a specific legal meaning. Section 939.14 "makes it clear that the rule sometimes prevailing in civil actions to the effect that a person injured by wrongful conduct has no standing in court if he was in pari delicto or contributorily negligent does not apply to criminal actions." V WISCONSIN LEGISLATIVE COUNCIL JUDICIARY COMMITTEE REPORT ON THE CRIMINAL CODE, at 9 (quoted 196 in Wis JICriminal 926 cmt.);[10]see also WAYNE R. LAFAVE & AUSTIN W. SCOTT, JR., SUBSTANTIVE CRIMINAL LAW, § 5.11(c), at 692-93 (1986). In other words, § 939.14 provides that a defendant is not immune from criminal liability simply because the victim may have been negligent as well. [7] However, this rule does not mean that evidence of a victim's negligence is irrelevant in a criminal proceeding. It was relevant here to the affirmative defense, and it is often relevant on the issue of causation. See, e.g., Tims, 534 N.W.2d at 681; State v. Crace, 289 N.W.2d 54, 59-60 (Minn. 1979); see also LaFave & Scott, supra, at 692-93. In fact, we implicitly recognized this in Hart v. State, 75 Wis. 2d 371, 249 N.W.2d 810 (1977), when we noted the general rule that contributory negligence is no defense, but went on to indicate that the victim's negligence was relevant to determining whether the defendant's intoxicated driving was a substantial factor in causing the victim's death. Id. at 398. Thus, the contributory negligence rule of § 939.14 and the § 940.09 affirmative defense are not inconsistent concepts. Nevertheless, we recognize that this legal distinction is complex. Accordingly, it would have been 197 better practice for the circuit court judge to have given a bridging instruction, explaining the relationship between contributory negligence and the § 940.09(2) affirmative defense. In fact, without a bridging instruction, the contributory negligence instruction was potentially confusing when coupled with Wis JI Criminal 1185, 1186, and 1188.[11] We nonetheless find that it is not reasonably likely that the challenged instructions misled the jury into thinking it could not consider the young women's actions in relation to Lohmeier's affirmative defense, in light of the context of the entire proceedings. Specifically, the jurors sat through a four day trial. Nearly all of the evidence presented by Lohmeier related to his affirmative defense. Lohmeier's attorney emphasized in his opening statement and closing argument that the accident would have been unavoidable even if Lohmeier had not been intoxicated and had been driving with due care. Moreover, Lohmeier's attorney never referred to the young women's conduct as contributory negligence, or even negligence for that matter. Furthermore, even the State extensively addressed Lohmeier's affirmative defense in its closing and rebuttal arguments.[12] 198 The court then instructed the jury. Initially, the court told the jury, "In applying these instructions, keep in mind the following: First, you should consider all instructions. Second, you should consider the instructions as a whole and apply them to the evidence." (R. 51 at 630; see Wis JICriminal 100.) The court went on to instruct the jury twice on Lohmeier's affirmative defense. The court specifically told the jury two times, "If you are satisfied to a reasonable certainty by the greater weight of the credible evidence that the death of Stacie Rogers and Renee L. Belair would have occurred even if the defendant had been exercising due care and had not been under the influence, then you must find the defendant not guilty."[13] (R. 51 at 634-35, 638-39.) [8] After all of this, the court instructed the jury, "[I]t is no defense to a prosecution for a crime that the victim may have been contributorily negligent." (R. 51 at 639.) We find it is not reasonably likely that the jurors would believe this single instruction transformed all of the prior proceedings into a "virtual charade." See Boyde, 494 U.S. at 383 (quoting California v. Brown, 479 U.S. 538, 542 (1987)). Thus, we conclude that a reasonable likelihood does not exist that the contributory negligence instruction, in combination with Wis JICriminal 1185, 1186, and 1188, misled the jury into believing it could not consider the young women's conduct in regard to Lohmeier's statutory affirmative defense. 199 IV. Finally, although we also conclude that a new trial is not warranted because it is not reasonably likely that the jury was misled, we nonetheless acknowledge that the contributory negligence instruction is potentially confusing when coupled with Wis JI Criminal 1185, 1186, and 1188. Therefore, we recommend that the Criminal Jury Instruction Committee adopt a jury instruction that sets forth the law as contained in § 939.14, to the effect that it is no defense to a prosecution for a crime that the victim was contributorily negligent. The instruction also should contain an explanation of this rule, in particular that it means the defendant is not immune from criminal liability merely because the victim may have been negligent as well. See Hart, 75 Wis. 2d at 398. In addition, we recommend that the Committee adopt a bridging instruction to be given when a court gives a contributory negligence instruction along with Wis JICriminal 1188, 1185, and/or 1186. The instruction should explain to the jury that although the victim's contributory negligence is not a defense, the jury may consider the acts of the victim in relation to the defendant's § 940.09(2) defense. It is further recommended that the Committee in its comments caution circuit court judges so that they will not, without clear justification, give a contributory negligence instruction in a criminal case. We conclude that these instructions will clarify the relationship between contributory negligence and the § 940.09(2) defense, preventing possible confusion on this issue in future cases. In summary, we find that in light of the entire proceedings, there does not exist a reasonable likelihood that the contributory negligence instruction, 200 in combination with Wis JICriminal 1185, 1186, and 1188, misled the jury into thinking it could not consider the young women's conduct in relation to Lohmeier's statutory affirmative defense. Accordingly, we conclude that the circuit court did not, by its instructions to the jury, violate Lohmeier's due process rights by denying him a meaningful opportunity for consideration by the jury of his § 940.09(2) affirmative defense. Nonetheless, we recognize that the contributory negligence instruction is potentially confusing when coupled with Wis JICriminal 1185, 1186, and 1188. Thus, we recommend that the Criminal Jury Instruction Committee adopt a contributory negligence instruction that explains the general rule, as well as a bridging instruction detailing the relationship between contributory negligence and the § 940.09(2) affirmative defense. By the Court.The decision of the court of appeals is reversed. JANINE P. GESKE, J. (dissenting). I dissent because I believe that there is a reasonable likelihood that the contributory negligence instruction, in combination with Wis JICriminal 1185 and 1186, misled the jury into believing it could not consider the young women's conduct in regard to Lohmeier's statutory affirmative defense. I would affirm the court of appeals and hold that there is a reasonable likelihood that the contributory negligence instruction misled the jury, for several reasons. First, the defense essentially conceded these elements of the charges under Wis. Stat. § 940.09(1)(a) and Wis. Stat. § 940.09(1)(b): intoxication, driving, and 201 death.[1] Therefore, the only real jury question was one of causation. The question posed by the affirmative defense instruction was whether the victims' deaths would have occurred even if the defendant had been exercising due care and was not under the influence of intoxicants. Lohmeier's affirmative defense went directly to causation. Second, the circuit court never defined the concepts "negligence" and "contributory negligence" for the jury. The jury was told "In weighing the evidence, you may take into account matters of your common knowledge and your observations and experiences in the affairs of life." Wis JICriminal 195 Juror's Knowledge. A layperson's view of negligence could be characterized as the careless action of a person, including that of a victim. Third, the circuit court gave no explanatory instruction to the jury to clarify the relationship between the affirmative defense instruction and the instruction that contributory negligence is not a defense. Without such an explanation, the probability is great that the jurors were misled into disregarding Lohmeier's affirmative defense. Proper jury instruction is a crucial component of the fact-finding process. State v. Schulz, 102 Wis. 2d 202 423, 426, 307 N.W.2d 151 (1981). The jury must determine guilt or guiltlessness in light of the jury charge, and the validity of that determination is dependent upon the correctness of the instructions given. Schulz, 102 Wis. 2d at 426-27. In the Schulz case, the taint of the faulty jury instruction was critical because there, intoxication was the major, if not the only, defense the defendant had to the charge of first-degree murder. Id. at 431. The charge given was not a standard instruction but emphasized, incorrectly, that the defendant had the burden of proof on the defense of intoxication. Id. at 432-33. We found in Schulz that the jury instructions could have reasonably been misunderstood by the jury to place the burden of proof of intoxication on the wrong party. Id. at 435. Such an error violated the defendant's right to a presumption of innocence and to have the state prove beyond a reasonable doubt every essential element of the crime charged against him. Id. at 435-36. I agree with the court of appeals that as long as the given jury instruction fully and fairly informs the jury of the applicable law, the circuit court has discretion in choosing which instruction to give. State v. Lohmeier, 196 Wis. 2d 432, 441, 538 N.W.2d 821 (Ct. App. 1995). I also agree with the majority that we consider jury instructions in light of the proceedings as a whole. But the circuit court does not have discretion to give an instruction which clouds or even nullifies the applicable law. And it is precisely by looking at the instructions in context that the harm to the defendant is demonstrated. The pertinent instructions were given in the following order: 1185 Homicide by Operation of Vehicle While Under the Influence Sec. 940.09(1)(a). 203 1186 Homicide by Operation of Vehicle While Blood Alcohol Content is 0.10% or More Sec. 940.09(1)(b). (Both jury instructions 1185 and 1186 described the defendant's affirmative defense as set out in Wis JI1188 Homicide by Intoxicated User of Vehicle, Firearm, or Airgun: Affirmative Defense Under § 940.09(2).) A contributory negligence instruction based on Wis. Stat. § 939.14.[2] The circuit court instructed the jury on the affirmative defense and immediately thereafter instructed the jury that contributory negligence of the victims was not a defense. Unfortunately, the judge did not give any explanation of the relationship between the contributory negligence instruction and Lohmeier's affirmative defense. Based partly on sequence, and primarily on the actual instruction language, it is reasonably likely that the cumulative effect of those instructions was to mislead the jurors. The jurors were misled into believing that the law forbade them to consider the acts of the victims, which may or may not 204 have legally constituted contributory negligence, when they assessed causation. In Hart v. State, 75 Wis. 2d 371, 249 N.W.2d 810 (1977), where the negligence of the victim was undisputed, we stated that the question for the jury was whether, considering the negligence of the victim along with the other circumstances of the case, the negligence of the defendant was nevertheless an operative factor having a substantial effect in producing the victim's death. Hart, 75 Wis. 2d at 399. The circuit court below could have said as much in its instructions, but did not. The very essence of Lohmeier's defense was that it was not his intoxication, but the victims' carelessness in walking in or stepping out into the roadway that was the cause of the accident. As Lohmeier's counsel told the circuit court at the instructions conference, "[T]his is not a matter where we are attempting to establish contributory negligence as a defense. What we are saying is that the intervening fact is this movement of the girls. My problem with the instruction is that the legislature gives us the defense (in Wis. Stat. § 940.09(2)) and then if you give that (contributory negligence) instruction you are in essence telling the jury, don't listen to what the Defense has presented." Mr. Lohmeier's defense did not hinge on whether the girls' actions legally constituted contributory negligence, but rather asserted that their movement onto the roadway was an intervening event. The record demonstrates that the circuit court itself had doubts as to the clarity of the instructions 205 proposed.[3] Lohmeier argued at the instructions conference that the two statutes, and the instructions based on them, were not consistent. The circuit court eventually agreed to give the contributory negligence instruction after the affirmative defense instructions, because the affirmative defense concerned causation: "I don't really see any error in giving this instruction we are talking about because we are not talking about negligence or contributory negligence, we are talking about cause, nothing to do with negligence. So what has to be established is this independent. You can argue your cause and even if the Court gives this instruction because it releases what I fear to be a problem in assessing the jury, assessing relative wrong here which is not 206 their duty or function, not at all. They must be satisfied that there was some type of cause that excuses responsibility for drinking and causing death. Those are given facts when you give an affirmative defense and may not take simple contributory negligence of a victim. What they have to have is an intervening cause and I think you can argue to that very simply your theories about movement without talking about contributory negligence or being in any way deterred by that. So I think I will give this instruction. Despite the circuit court's recognition of inconsistency, it failed to instruct the jury that the independent causation defense was not a question of contributory negligence. Although Lohmeier's counsel objected to the contributory negligence instruction, neither counsel offered an explanatory, or bridging, instruction to resolve the inconsistency. The jury was left on its own to sort out these undefined legal terms. Argument of counsel further clouded the relationship between the affirmative defense and the contributory negligence instruction. The majority notes that Lohmeier's attorney never referred to the young women's conduct as contributory negligence. Majority op. at 196. However, the district attorney's closing argument included these statements: Well I guess something that might come to mind is, well, hold it, this is a real world Mr. Koss and we have got girls walking the wrong way on the highway. I imagine everybody knows you don't do that. I agree, but first there's an instruction that says you are not to consider contributory negligence of a victim. It's not a defense. That's by law in Wisconsin. Moreover, and this is crucial, walking facing traffic or not facing traffic, that law is not for 207 the benefit of the driver. That law is not for the benefit of the driver." In sum, the circuit court gave the contributory negligence instruction without a proper explanation of the relationship between that instruction and the instruction regarding the affirmative defense. Because I conclude that such an omission was erroneous, and created a reasonable likelihood that the jury was misled into disregarding Lohmeier's affirmative defense, I respectfully dissent. Lohmeier should be granted a new trial. "It may well be that the defendant is guilty of the offense charged against him, but he is entitled to a fair trial according to the established rules of procedure and principles of law." Boldt v. State, 72 Wis. 7, 17, 38 N.W. 177 (1888), cited in Hart v. State, 75 Wis. 2d 371, 395, 249 N.W.2d 810 (1977)(footnote omitted). I am authorized to state that Chief Justice Shirley S. Abrahamson and Justice William A. Bablitch join this dissenting opinion. NOTES [1] State v. Lohmeier, 196 Wis. 2d 432, 538 N.W.2d 821 (Ct. App. 1995). [2] All further references are to the 1991-92 Statutes unless otherwise noted. [3] Section 940.09(2) provides, "The defendant has a defense if he or she proves by a preponderance of the evidence that the death would have occurred even if he or she had been exercising due care and he or she had not been under the influence of an intoxicant or did not have a blood alcohol concentration described under sub. (1)(b) or (bm) or (1g)(b)." [4] The court substituted Wis JICriminal 1188 for the last two paragraphs of Wis JICriminal 1185 and 1886. [5] The Criminal Jury Instruction Committee has not adopted a pattern jury instruction for contributory negligence, and recommends that no instruction be given. See Wis JI Criminal 926 and comments. [6] Section 939.14 provides: "It is no defense to a prosecution for a crime that the victim also was guilty of a crime or was contributorily negligent." The State requested the instruction for the purpose of informing the jury that Lohmeier was not immune from criminal liability simply because the young women were contributorily negligent by walking on the wrong side of the road. [7] Section 940.09(1m) provides: "If [a] person is found guilty of both sub. (1)(a) and (b). . . for acts arising out of the same incident or occurrence, there shall be a single conviction for purposes of sentencing. . . ." [8] The convictions for the two counts of hit and run causing death contrary to §§ 346.67, 346.74(5) are not before this court. [9] The "dart-out" fact pattern is an illustrative example of when the defense could be established through the victim's conduct. However, it is worth noting that the affirmative defense would not be applicable simply because a victim did not take a precautionary measure, like wearing a seat belt. In such a case, it cannot be said that the accident would have been unavoidable, even if the defendant was sober and driving with due care. See State v. Turk, 154 Wis. 2d 294, 453 N.W.2d 163 (Ct. App. 1990). [10] During the criminal code revision process of the 1950's, the Wisconsin Legislative Council drafted 1953 Assembly Bill No. 100. The preceding quotation is taken from the comment to proposed § 393.13 of that bill, which provided, "It is no defense to a prosecution for a crime that the victim also was guilty of a crime or was contributorily negligent." This proposed section was adopted verbatim by the legislature in 1955 Wis. Laws 696, and renumbered § 939.14. Accordingly, the comment to proposed § 393.13 is persuasive authority regarding the legislature's intent in enacting § 939.14. [11] As we stated in State v. Dix, 86 Wis. 2d 474, 486, 273 N.W.2d 250, cert. denied, 444 U.S. 898 (1979), "A jury should not be required to guess at the meaning of technical words. . . ." 86 Wis. 2d at 487. Accordingly, in part V, we recommend that the Criminal Jury Instruction Committee adopt a bridging instruction explaining the relationship between contributory negligence and the § 940.09(2) affirmative defense. [12] The dissent points to a passing reference in the lengthy arguments of the district attorney, wherein he mentions the contributory negligence instruction. His closing and rebuttal arguments focused, extensively, on Lohmeier's affirmative defense, not on the instruction. [13] The second time, the court substituted the phrase "had not had a prohibited alcohol concentration" for "had not been under the influence of an intoxicant." (R. 51 at 638.) [1] The jury instruction for Wis JICriminal 1185, Homicide by Operation of Vehicle While Under the Influence Sec. 940.09 (1)(a) reads in part: "The second element requires that the defendant's operation of a vehicle caused the death of Stacie Rogers and Renee L. Belair. `Cause' means that the defendant's operation of a vehicle was a substantial factor in producing the death. It is not required that the death was caused by any drinking of alcohol or by any negligent or improper operation of the vehicle. What is required is that the death was caused by the defendant's operation of the vehicle." [2] The majority acknowledges that the Criminal Jury Instruction Committee recommends that no contributory negligence instruction be given. Majority op. at 189, n.5. The Committee recognized the very problem present in this case: "The rule as stated is an accurate statement of the law, but can create problems if literally applied. That is, evidence that may indicate negligence on the part of a victim may be relevant to an element of the crime especially the cause element or to a defense. In such a situation, the evidence is admissible despite § 939.14." Wis JICriminal 926 Comment. Here, of course, the harm to Lohmeier arose not from an evidentiary ruling, but from the confusing juxtaposition of the affirmative defense instructions with the instruction precluding contributory negligence as a defense. [3] At the instruction conference the court commented on the proposed contributory negligence instruction, "I don't see how you can say that it couldn't be something that the victim did. I don't know. I mean that argument could be made, but I'm not sure I want to inject that in there." Later, "Because I just don't think I don't think that this defense was suppose[d] to come up, at least I don't think so anyway. It's not clear to just general contributory negligence of a victim. If that would apply, then that would apply if a drunk driver went off the road and the other driver was going over the speed limit. I don't think that would apply." After further discussion with counsel the court said, "I really have no doubt that this would be appropriate other than the little specter of a doubt that I have that it's a possibility it could be inconsistent with a defense and the use of the wording in Caibaiosai that says the intervening fact may be independent or it may be dependent." Additionally, "I think the cautious thing would be quitely (sic) frankly to not give the instruction and let the attorneys argue it. I think you can argue it." The circuit court ultimately gave the contributory negligence instruction.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1346629/	41 Mich. App. 238 (1972) 199 N.W.2d 833 CONERLY v. LIPTZEN. Docket No. 11760. Michigan Court of Appeals. Decided May 30, 1972. Edward Grebs, for plaintiffs. Sugar, Schwartz, Silver, Schwartz & Tyler (by Charles C. Warner and Hayim I. Gross), for defendant. Before: FITZGERALD, P.J., and McGREGOR and O'HARA,[] JJ. Leave to appeal denied, 388 Mich. 779. FITZGERALD, P.J. Norma Conerly, hereinafter plaintiff, went to visit a friend who lived in an apartment building at 329 Holbrook, Detroit. She rode the elevator to the fourth floor, found her friend not home, and returned to the elevator. When she pushed the button for the main floor, sparks flew, she smelled something like rubber burning, and the elevator plummeted. The elevator came to an abrupt stop just below the first floor, throwing plaintiff to her knees and rendering her momentarily unconscious. She next remembered a man pushing the outside button in an attempt to raise the elevator to floor level so that he could assist her. The elevator moved haltingly upwards and the man assisted her from the elevator. The police were then called and plaintiff was taken to the hospital. She sustained injuries to her 240 back and right wrist, leg and foot. Plaintiff and her husband sued for damages. The manager of the apartment building testified that the elevator in question was the only one servicing the 84 units in the building. After the plaintiffs and defendant rested their cases, the latter renewed a motion for a directed verdict, the motion was denied, and the jury awarded Mr. and Mrs. Conerly $60,000. Defendant subsequently made a motion for judgment notwithstanding the verdict or new trial, which motion was denied by the trial judge. Two issues arise on appeal. First, did plaintiffs offer sufficient proof of the elements of a cause of action for negligence to survive defendant's motion for a directed verdict? Defendant contends that plaintiffs did not show that there was a defect in the elevator of which the defendant should have had notice. Citing a series of cases which supposedly stand for the proposition that "[t]here must either be a showing of active negligence * * * or there must be a showing of notice, whether actual or constructive, of a defect", defendant further argues, under issue 2, infra, that, since proof was offered that the elevator could not have fallen, it was the duty of plaintiffs to show how it could have happened; in other words, plaintiff was obligated to demonstrate what caused her injuries, and mere testimony that the elevator fell was not sufficient to sustain that burden. Plaintiff responds that she showed that the elevator was old and constantly malfunctioning; the defendant was thus on notice that the machinery "had previously shown inefficiency" and "dangerous irregularities". Notice was a fact question for the jury, she says, and there was sufficient evidence 241 from which the jury could have inferred negligent conduct on the part of the defendant. She claims plaintiffs did not have to prove the precise cause of the accident, since an elevator does not usually fall if it is properly maintained and since the elevator was in the exclusive control of the defendant. Finally, the so-called "conjectural cause" cases are not applicable since defendant did not submit a theory of causation but attempted to prove the elevator could not have fallen. The instant case does not require a foray into the jungles of proximate cause. If there was a fall-related defect in defendant's elevator, it was certainly foreseeable that an injury might have been caused thereby. Instead, the case turns upon an application of the three essential ingredients of a cause of action for negligence duty, lack of reasonable care, and cause in fact. The duty which a landlord owes to his tenants and his tenants' guests with regard to the so-called common areas of the building, that is, those areas the control of which has been retained by the landlord, is analogous to that which is owed an invitee. Prosser delineates this obligation more fully in his discussion of the duty owed invitees; "The occupier is not an insurer of the safety of invitees, and his duty is only to exercise reasonable care for their protection. But the obligation of reasonable care is a full one, applicable in all respects, and extending to everything that threatens the invitee with an unreasonable risk of harm. The occupier must not only use care not to injure the visitor by negligent activities, and warn him of latent dangers of which the occupier knows, but he must also inspect the premises to discover possible dangerous conditions of which he does not know, and take reasonable precautions to protect the invitee from dangers which are foreseeable 242 from the arrangement or use." (Prosser, Torts [3d ed], § 61, pp 402-403; footnotes omitted; see also, Lipsitz v Schechter, 377 Mich. 685 [1966], infra.) It is important to note that the rules set out above go only to the existence of a duty and the conduct which is necessary to fulfill that duty; in short, they go only to what is generally thought of as negligence. Presumably, it is still necessary for a plaintiff to show that defendant's negligence caused, or substantially caused, the injury. Michigan does not purport to follow the doctrine of res ipsa loquitur, but it achieves the same result by allowing negligence to be inferred from circumstantial evidence. The recent leading cases in this regard are Gadde v Michigan Consolidated Gas, 377 Mich. 117 (1966), and Lipsitz v Schechter, 377 Mich. 685 (1966). According to the latter (p 690), "[t]he question * * * is whether, in the light of all of the evidence circumstantial, direct, or whatsoever it may be, the plaintiff has produced sufficient evidence from which a jury might make a finding of negligence". Robinson v Wright & Co, 94 Mich. 283 (1892), Elsey v J L Hudson Co, 189 Mich. 135 (1915), and Bradley v Burdick Hotel Co, 306 Mich. 600 (1943), each involved the sudden drop or fall of an elevator. In Robinson, although there was testimony that a certain hook had slipped and a pin which held the wheel on the axle had become dislodged, the former was a result, not a cause, of the fall, and there was no evidence that the pin was out or loose before the accident or that ordinary use might have loosened it. According to the Court (p 287), "[t]he sudden breaking or giving way of a piece of machinery, properly constructed, is not sufficient to justify the conclusion of negligence". In Elsey, the trial court's directed verdict for the 243 defendant was upheld, since "no cause was shown why the elevator dropped" and "there was no evidence that there had been any previous trouble with it". In Bradley, on the other hand, plaintiff did offer evidence that the elevator was not equipped with effective, modern safety devices, and an expert witness also questioned whether the devices which were used had been properly installed. The Court held that it was proper to allow the jury to consider the factual question of defendant's negligence. On three occasions in recent years, the Supreme Court has reversed decisions of the trial court or this Court holding that plaintiff had not established defendant's negligence or the cause of plaintiff's injury. Those cases are Gadde v Michigan Consolidated Gas, supra; Lipsitz v Schechter, supra, and Schedlbauer v Chris-Craft Corp, 381 Mich. 217 (1968). In each of these cases, however, there was evidence of, or the evidence permitted an inference of, a relatively specific cause of defendant's injury; plaintiff, in other words, showed more than a mere accident. In Gadde, the explosion which injured plaintiff was caused by a gas leak; in Lipsitz, the screen which fell on plaintiff was quite possibly the result of loose fastenings; in Schedlbauer, there was evidence that the explosion which sank plaintiffs' boat was the result of a defective fuel pump diaphragm. In Cusumano v Stroh Brewery Co, 26 Mich. App. 549 (1970), plaintiff was injured by an exploding beer bottle, and a directed verdict for defendant was reversed. Although this Court hypothesized as to how the explosion might have occurred, there is no indication that plaintiff offered any proof on the point. However, the Court noted that "defendant had control over both the charging and inspection 244 of the bottles"; stated differently, it was almost impossible for plaintiff to demonstrate the cause of the accident after it occurred. In this regard, a statement of the Court in Schedlbauer, supra, is instructive: "In every action for negligence it is the duty of the plaintiff to prove by the most accurate evidence that is reasonably available to him the particular defect or act or omission which to him was the cause of the injury for which he would recover. [Citations omitted.] That is precisely true of evidence which is within his control." (p 231.) A similar holding appears in Martin v King Riding Device Co, 14 Mich. App. 480 (1968). Plaintiff was injured when the cable on an amusement park ride broke. He produced expert witnesses who noted that certain load bearing cables were visibly cracked and who opined that "abrasions found on one of the cables would not have been present had the cable been properly fastened". Even with this proof, the Court felt that the following point should be made: "We have not invariably thrown upon the injured passenger the often impossible burden of pointing out by direct evidence on his main case the specific breach of duty by the carrier resulting in injury, especially where the carrier is in sole possession of the facts." (p 485; quoting Mitcham v Detroit, 355 Mich. 182, 189 [1959].) These cases lead us to the conclusion that the trial court properly denied the motion for a directed verdict. Issue two asks whether reversible error was committed when plaintiffs' attorney, during cross-examination and final argument, represented defendant 245 as a wealthy absentee landlord, not concerned about the suit. It is contended that plaintiffs' attorney attempted to characterize defendant "as an absentee slum landlord, who owns numerous buildings in the area, which in fact was not true, and to characterize him as a man so unconcerned with the course of this lawsuit that he could not even be bothered to return from Florida during the course of the trial". The trial judge included in his instructions to the jury these charges: "As the court indicated, members of the jury, it is your duty to determine the facts and evidence received in open court. You are to apply the law to the facts and in this way decide the case. You may not let sympathy or prejudice influence you in your decision whatsoever. * * "The landlord here is entitled to the same fair and unprejudiced treatment as the plaintiff, who is an individual, and anyone under like circumstances, and it is your duty to decide the case with the same impartiality you would use in deciding a case between other individuals." A review of the record indicates that a reversal is not mandated for the following reasons: (1) the jury was thrice instructed that its verdict should in no way be based on sympathy for plaintiff or defendant's superior economic status, thus curing any prejudice (see Owen v Birmingham Federal Savings, 27 Mich. App. 148 [1970]); (2) the only objection raised to plaintiffs' final arguments was to plaintiffs' implication that defendant was not ill; there was no objection to plaintiffs' reference to defendant's absence, but defendant's attorney instead chose to try to explain his client's absence during his (attorney's) own final argument; (3) the 246 evidence of defendant's wealth was minimal; plaintiffs are correct in pointing out that the building manager responded negatively when asked if defendant owned other buildings on the block; (4) defendant adduces no substantial authority for his argument. For the foregoing reasons, the jury verdict is affirmed. Costs to appellees. All concurred. NOTES [] Former Supreme Court Justice, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264453/	879 F.Supp. 416 (1994) ILAN-GAT ENGINEERS, LTD., Plaintiff, v. SHELTER SYSTEMS CORP., Defendant. Civ. No. 94-814 (CSF). United States District Court, D. New Jersey. December 22, 1994. 417 Ravin, Sarasohn, Cook, Baumgartner, Fisch & Baime by Bruce Buechler, Roseland, NJ, for plaintiff. Dilworth, Paxson, Kalish & Kauffman by Bruce W. Kauffman, Thomas E. Groshens, Westmont, NJ, for defendant. OPINION CLARKSON S. FISHER, District Judge. This case raises questions of a contractual nature, including the construction of a choice-of-forum clause in a contract between a United States firm and an Israeli enterprise. Plaintiff, Ilan-Gat Engineers, LTD., moves this court for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure in connection with its contractual dispute with defendant, Shelter Systems Corp., Inc. For the reasons expressed below, the motion is denied. By contract executed December 13, 1990 (the agreement), Ilan-Gat Engineers, LTD. (Ilan-Gat), an Israeli housing contractor, agreed to purchase approximately $2 million in prefabricated housing units from Shelter Systems Corp. (Shelter), a New Jersey company that manufactures and sells such units. Shelter shipped the housing units in early 1991, after which Ilan-Gat assembled them pursuant to a contract with the Israeli Ministry of Housing, such contract known as Tender 315. Shelter alleges that in default of its express obligation under the agreement, Ilan-Gat was six months late in paying for these housing units. By letter dated May 3, 1991, Patrick F. Carr, chief financial officer for Shelter, acknowledged payment in full in connection with Tender 315, but did not disclose when it had received payment. Ilan-Gat maintains that its letter of credit for payment in full was timely received by Shelter. Apparently, the parties contemplated that Shelter would supply Ilan-Gat with additional housing units in connection with future tenders by the government of Israel. Accordingly, the agreement stipulated that Ilan-Gat would be Shelter's exclusive agent in Israel for the sale of prefabricated housing units. Paragraph 13 of the agreement, captioned "Exclusivity," states: Shelter hereby appoints Ilan-Gat as its sole and exclusive representative in the State of Israel for the sale, distribution, erection and assembly of prefabricated houses in the State of Israel similar to the Houses for a period of one year after the date hereof (the "Exclusivity Period"). The parties acknowledge that Ilan-Gat shall receive a payment equal to 6% of the sales price F.O.B. of each house sold during the exclusive period promptly after payment of such sales price to Shelter and such payment has already been taken into 418 account of the calculation of the PPH and shall be taken into account in the calculation of the PPH with respect to any additional Order. Notwithstanding the above, in the Exclusive Period, Shelter shall be entitled to sell the House Components to other Israeli builders and [in] such event, Ilan-Gat shall be entitled to a payment equal to 3% of the sales price F.O.B. of each house sold during the Exclusive Period. If Ilan-Gat is in default of any payment owing and due to Shelter pursuant to this Contract, for more than 14 days, this exclusivity clause shall be null and void. In January 1991, representatives of Shelter met with representatives of Ephraim Fleiner Construction and Investment Co. (Fleiner) to discuss Fleiner's purchase of prefabricated housing from Shelter for use in an upcoming project by the Israeli government designated as Tender 321. Ilan-Gat received a letter dated February 17, 1991, from a Nelson Joyner (Joyner). The letter was written on letterhead bearing the name "Shelter Systems." The letter states that Ilan-Gat was entitled to a 6% commission for the housing sold to Fleiner. Shelter, for its part, denies that Joyner had authority to make such a representation. Shelter also claims that even if the letter was binding, any commission was contingent on Ilan-Gat's obtaining all necessary regulatory approvals required by the Israeli government in connection with Tender 321. Shelter maintains that because Ilan-Gat breached this agreement, it is not entitled to the 6% commission even if Joyner had authority to modify the agreement. In September 1991, Shelter and Fleiner executed a contract for Fleiner's purchase of approximately 200 housing units for a total price of $1,653,000. In December 1991, Ilan-Gat demanded 6% of the total purchase price of Shelter's sale to Fleiner, which demand Shelter refused. Ilan-Gat then sued Shelter in Israel. In light of the forum selection clause contained in the agreement, the Israeli tribunal dismissed the case, and Ilan-Gat refiled its claim in this court. That forum selection clause provides: Any claim brought by Shelter, against Ilan-Gat, shall, be tried exclusively in the state of Israel before an Israeli court or arbitrator. Any claim brought by Ilan-Gat against Shelter shall be tried exclusively in the United States, before a U.S. court or arbitrator. Ilan-Gat argues that the facts which Shelter has admitted justify the entry of judgment in its favor in the amount of $99,180, based on its entitlement to the 6% commission for the Fleiner sale. In the alternative, Ilan-Gat asserts that it is entitled under the agreement to at least a 3% commission of $49,590, as the houses were sold to Fleiner, not affiliated with Ilan-Gat. In addition, Ilan-Gat maintains that the forum selection clause precludes Shelter from asserting any counterclaims or defenses to payment in this court. Shelter alleges a number of defenses to payment. Shelter alleges that Ilan-Gat breached the agreement by failing to make timely payments for houses purchased in connection with Tender 315. Shelter alleges that in violation of the exclusivity clause of the agreement, Ilan-Gat began competing with Shelter in the prefabricated housing business in Israel. Ilan-Gat directs the court to a clause in Paragraph 13, which reads as follows: For avoidance of any doubt, Shelter acknowledges that it is aware that Ilan-Gat is the exclusive agent of Timber Tuss Housing Systems. Ilan-Gat maintains that the above-quoted language illustrates that Shelter acknowledged and agreed all along that Ilan-Gat could serve as Shelter's exclusive agent and as the exclusive agent of one of Shelter's competitors. Shelter maintains that Ilan-Gat is precluded from receiving any commission payments under the agreement for its alleged failure to provide all necessary regulatory approvals for the homes sold pursuant to the Fleiner sale. Shelter asserts that Ilan-Gat's failure to represent Shelter's interests in connection with Tender 321 constituted a breach the agreement, defeating any right to commission payments that Ilan-Gat may otherwise have had in connection with Shelter's sale to Fleiner. In its answer, 419 Shelter contends that the alleged breaches on the part of Ilan-Gat entitle it to a judgment of $465,000 plus interests and costs. Judgment on the pleadings pursuant to Rule 12(c) is not warranted "unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law, ... view[ing] the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to the nonmoving party." Hayes v. Community General Osteopathic Hospital, 940 F.2d 54, 56 (3d Cir.1991) (quoting Society Hill Civic Ass'n v. Harris, 632 F.2d 1045, 1054 (3d Cir.1980)). As set forth supra, under the forum selection clause in the agreement, any claim by Shelter against Ilan-Gat must be tried exclusively in Israel. Ilan-Gat contends that the forum selection clause is both fair and reasonable and must be construed as disallowing Shelter from asserting its defenses and counterclaims in this court. The court disagrees and will allow Shelter to present its defenses and counterclaims in this court. Ilan-Gat argues that Shelter's allegations are not affirmative defenses but, rather, counterclaims and, as such, are barred by the terms of the forum selection clause. The court believes that regardless of whether Shelter's allegations are characterized as counterclaims, either mandatory or permissive, or affirmative defenses, enforcement of the forum selection clause in this context would be unfair, unreasonable, and an unnecessary waste of judicial resources. In the Third Circuit, [a] forum selection clause is presumptively valid and will be enforced by the forum unless the party objecting to its enforcement establishes (1) that it is the result of fraud or overreaching (2) that enforcement would violate a strong public policy of the forum, or (3) that enforcement would in the particular circumstances of the case result in litigation so seriously inconvenient as to be unreasonable. Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709 F.2d 190, 202 (3d Cir.), cert. denied, 464 U.S. 938, 104 S.Ct. 349, 78 L.Ed.2d 315 (1983). Plaintiff would have defendant assert its allegations in an Israeli court, while plaintiff maintains its action in this court. Essentially, Ilan-Gat asks this court to bifurcate the parties' claims and defenses between two judicial systems, let alone courtrooms, literally a world apart. The court believes that doing so would be so inconvenient as to be patently unreasonable on the facts of this case, where the resolution of plaintiff's claims depends largely on the validity of the allegations asserted by defendant. Whether Ilan-Gat is entitled to receive the commission payment it seeks depends on the resolution by this court of Shelter's allegations as set forth in its answer. Given that the court finds that Shelter shall be permitted to assert its allegations in this court, it is clear that Ilan-Gat's Rule 12(c) motion must be denied. Ilan-Gat requests judgment on the pleadings in the amount of $99,180, or 6% commission on the Fleiner sale. Shelter admits that the Fleiner sale took place, and that its was paid for such sale. Paragraph 13 of the agreement states that "Ilan-Gat shall receive a payment equal to 6% of the sales price F.O.B. of each house sold during the Exclusive Period promptly after payment of such sales price to Shelter." Thus, Ilan-Gat contends, because Shelter has admitted to the two conditions which entitle it to a 6% commission under the agreement, judgment on the pleadings is appropriate. Further, Ilan-Gat argues that the Joyner letter is binding on Shelter, as Shelter's silence in the face of such letter manifests an adoption of the letter. Shelter has defended on the basis of those affirmative defenses detailed above. Shelter's agency argument alone is enough to defeat this Rule 12(c) motion. It is beyond dispute that "[u]nless otherwise agreed, an agent is subject to a duty not to compete with the principal concerning the subject matter of the agency." United Board & Carton Corp. v. Britting, 63 N.J.Super. 517, 524, 164 A.2d 824 (1959) (quoting Restatement of Agency § 393). Under paragraph 13, Shelter clearly acknowledged that Ilan-Gat was the exclusive agent for one of 420 its competitors. However, Shelter maintains that Ilan-Gat itself not only sold but also manufactured prefabricated houses in Israel, in violation of the agency agreement. Whether the parties agreed that Ilan-Gat could compete with Shelter in the manufacture of prefabricated housing in Israel, whether Ilan-Gat did, in fact, manufacture such houses and whether such manufacturing would constitute a breach of the agency relationship are questions which cannot be resolved with the information presently before the court. Shelter also contends that Joyner had no authority to modify the agreement. Again, the court is not in a position to determine at this stage the extent of Joyner's authority and whether any of Shelter's actions with respect to the Joyner letter amount to an adoption of the content of the letter. The court believes that discovery is necessary in order to determine the validity of the defenses asserted by Shelter. As to Ilan-Gat's alternative prayer for a 3% commission on the Fleiner sale, judgment on the pleadings is also unwarranted. Under the agreement, where houses are sold during the exclusive period to Israeli builders other than Ilan-Gat, "Ilan-Gat shall be entitled to a payment equal to 3% of the sales price F.O.B. of each house sold during the exclusive period." The exclusivity clause of the agreement states that "[i]f Ilan-Gat is in default pursuant to this contract, for more than 14 days, this exclusivity clause shall be null and void." If, as Shelter alleges, Ilan-Gat was in default by its alleged failure to make timely payments on houses purchased in connection with Tender 315, then the exclusivity clause is null and void under the agreement. Plaintiff has submitted the certification of its Israeli counsel, in which it claims Shelter never disputed that payment was made in full and on time. However, the Patrick Carr letter, which acknowledged payment in full in connection with Tender 315, is dated May 3, 1991, approximately six months after payment was due. The court is not in a position, based on the papers that have been submitted, to determine whether such payment in full was timely made. The court is satisfied that the defenses asserted by Shelter warrant the denial to plaintiff of judgment on the pleadings. Accordingly, plaintiff's motion for judgment on the pleadings is denied. An order accompanies this opinion. ORDER AND NOW, this 22nd day of Dec., 1994, upon consideration of the Motion of plaintiff Ilan-Gat Engineers, Ltd. for Judgment on the Pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, and the response of defendant Shelter Systems Corp. thereto, it is hereby ORDERED that plaintiff's Motion is DENIED.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347442/	48 N.W.2d 73 (1951) 154 Neb. 394 RUPLINGER v. RUPLINGER et al. No. 32978. Supreme Court of Nebraska. June 1, 1951. 74 W. H. Kirwin, Scottsbluff, Eugene D. O'Sullivan, Omaha, for appellant. Mothersead, Wright & Simmons, Scottsbluff, for appellees. Heard before CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ. CARTER, Justice. This is an action by plaintiff, Richard B. Ruplinger, to recover for the fraudulent conversion of property and money by the defendants, Edward J. Ruplinger and Emma F. Ruplinger. Defendants filed general demurrers to the petition last filed, which were sustained by the trial court. Plaintiff failed to plead further, and a judgment of dismissal was entered. Plaintiff appeals. The allegations of the petition are substantially as follows: Plaintiff and Edward J. Ruplinger are brothers. The defendants are husband and wife. In 1920 plaintiff constructed a warehouse in Scottsbluff, Nebraska. The two brothers and James A. Dunlay organized a corporation known as the Platte Valley Storage Company. Plaintiff transferred the warehouse to the corporation and his brother contributed cash. Stock in the corporation was issued to Edward F. Ruplinger at the book value of $26,000; to Richard B. Ruplinger in the amount of $13,000; and to Dunlay in the amount of $100. It was agreed that $7,000 of the stock issued to Edward was to be held by him for transfer to Richard when it was paid for. Edward was named president of the corporation, Richard was named vice president, and Dunlay became secretary-treasurer. The salary of the president was fixed at $100 a month and that of the vice president at $50 a month. Edward was to manage the business. Richard was not to be active in the business and shortly thereafter he moved to California. The petition alleges that in 1929 Richard paid the $7,000 for the stock held for him by Edward, but that it was not transferred to him. In August 1926, the name of the corporation was changed to the Ruplinger Storage and Transfer Company. No new stock was issued and salaries were paid until August 1935. No salary was thereafter paid to Richard until 1940 when an adjustment of back salary was made. On October 14, 1943, Edward refused to make further payments of salary and Richard then demanded an accounting of the property and profits of the corporation. On October 16, 1944, plaintiff discovered through the office of the Secretary of State that the Ruplinger Storage and Transfer Company was dissolved by the defendants in 1934 and that the warehouse and lots upon which it stood were conveyed prior to the dissolution to Edward by Edward and Emma Ruplinger as officers of the corporation. Plaintiff alleges that this property was transferred to Edward without his knowledge or consent. The prayer of the petition is that the court determine the 75 value of his undivided interest in the property and render judgment against the defendants for the amount so found. The defendants contend that a stockholder has no legal title to the property of a corporation until a dividend is declared, or a division is made on the winding up or dissolution of the corporation. It is urged that the petition shows on its face that the suit is by one stockholder against another to recover his share of the corporate property alleged to have been fraudulently conveyed by the corporation to the defendant Edward J. Ruplinger. The petition clearly shows that this was the nature of the suit. The question raised by the demurrers is whether a stockholder may sue in his own name in such a case, or whether, as contended by the defendants, the suit must be brought by or on behalf of the corporation. The corporation was formed in 1920. Under the law existing until 1934, the date of the claimed dissolution, it required a vote of two-thirds of its members to dissolve the corporation. Section 24-211, Comp.St.1929. The petition shows that plaintiff was at all times the owner of more than one-third of the stock of the corporation. It would appear that a valid dissolution could not be had by the action of stockholders without the consent of the plaintiff. In any event, the corporation even if dissolved could sue to recover upon a cause of action accruing in favor of the corporation. Section 24-112, Comp.St.1929. Lincoln Butter Co. v. Edwards-Bradford Lumber Co., 76 Neb. 477, 107 N.W. 797. Such corporation could likewise be sued in its corporate name after dissolution. Section 24-113, Comp.St.1929. Heenan & Finlen v. Parmele, 80 Neb. 514, 118 N.W. 324. No statutory bar has been pointed out which would prevent the corporation from maintaining the suit, or to its being made a party to the suit if a stockholder brought the action in a representative capacity. A stockholder may not bring an action in his own name to recover for wrongs done to the corporation or its property. Such a cause of action is in the corporation and not the stockholders. The right of a stockholder to sue is derivative in its nature and can be brought only in a representative capacity for the corporation. Rettinger v. Pierpont, 145 Neb. 161, 15 N.W.2d 393. The controlling rule is well set out in Wilhelm v. Consolidated Oil Corporation, 10 Cir., 84 F.2d 739, 748, wherein it is said: "The Prairie Companies have not been dissolved. If such agreement, conveyances and transfers were wrongful, the direct injury was to the corporations and their properties. The right of action for such an injury is in the corporation and not in its stockholders; and suit thereon must be brought by the corporation or by a stockholder as a derivative suit. This suit is not brought by the Prairie Companies or by their stockholders as a derivative suit. The bill does not seek restoration to the Prairie Companies of the property conveyed and transferred but seeks recovery thereof to the stockholders of such companies. It seeks relief solely in behalf of the stockholders in their own right and not in behalf of the Prairie Companies as a derivative right. No demand upon and refusal by the Prairie Companies to bring the suit, nor facts excusing such demand and refusal are alleged. The Prairie Companies would be necessary parties to a derivative suit and they are not joined." The general rule is that actions to enforce corporate rights or to redress injuries to the corporation cannot be maintained by a stockholder in his own name. The injury in such instances is to the corporation and it does not give an individual right of action to a stockholder. Brictson v. Woodrough, 8 Cir., 164 F.2d 107; Hodge v. Meyer, 2 Cir., 252 F. 479; Cullum v. General Motors Acceptance Corp., Tex.Civ.App., 115 S.W.2d 1196. Under the rules announced in the foregoing cases the plaintiff cannot maintain an action in his own name under the facts set out in his petition. The remedy under the facts stated is a suit by the corporation, or, if the corporation refuses to sue, by a suit brought on behalf of the *76 corporation. The action of the trial court in sustaining the demurrers and dismissing the suit is therefore correct. The judgment is affirmed. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347450/	888 P.2d 372 (1994) Gerald R. TRAVERS and Oderia R. Mitchell, Defendants-Appellants and Cross-Appellees, v. Rhett K. RAINEY, Defendant-Appellee and Cross-Appellant. No. 93CA0026. Colorado Court of Appeals, Div. V. December 29, 1994. 373 The Law Firm of Samelson, Dodge & Currey, P.C., Kirk S. Samelson, Colorado Springs, for defendants-appellants and cross-appellees. The Law Firm of Guy M. McCready, Guy M. McCready, Colorado Springs, for defendant-appellee and cross-appellant. Opinion by Judge BRIGGS. Gerald R. Travers and Oderia Mitchell appeal the judgment in favor of Rhett K. Rainey terminating his liability for post-dissolution partnership obligations. Rainey cross-appeals the award of attorney fees to Travers and Mitchell and the denial of his motion for attorney fees. We reverse the judgment as to the post-dissolution obligations and remand for further proceedings. We affirm the judgment in all other respects. The parties entered into a partnership in 1989 to run a physical therapy clinic. In their individual names, they jointly leased commercial premises and equipment and obtained a bank loan evidenced by a note. On January 4, 1991, Rainey gave notice to the partnership that he had been called into active duty in the army reserve. He stated that he would send no further patients to the clinic and added: Per the Soldiers and Sailors [Civil] Relief Act, I am exempt from my lease requirements and will not have further obligations regarding my fixed income and lease requirements.... It is possible that you may request the leasing company regarding the equipment and the building to be decreased by 1/3 since I have been called on active duty. As part of litigation with the lessor of the premises, Travers and Mitchell cross-claimed against Rainey for his share of partnership expenses incurred both before and after January 1991. The trial court granted Rainey's motion for partial summary judgment as to expenses incurred after his notice, including the lease obligations. The court determined that the January 1991 notice "constituted a dissolution of the partnership and an avoidance on the part of ... Rainey of future obligations to the partnership for future partnership liability on the leases...." After a trial on Travers' and Mitchell's claim for Rainey's share of partnership expenses incurred before the notice, the trial court entered judgment in favor of Travers and Mitchell and, finding Rainey's defense to be groundless, also awarded them attorney fees for that claim. The court denied Rainey's request for an award of his attorney fees. I. Travers and Mitchell contend that the trial court erred in terminating Rainey's post-January 1991 liabilities. We agree. 374 Summary judgment is proper only when the pleadings, affidavits, depositions, and admissions show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c); Civil Service Commission v. Pinder, 812 P.2d 645 (Colo.1991). Colorado partnership law provides that dissolution of a partnership does not of itself discharge the existing liability of any partner. Section 7-60-136(1), C.R.S. (1986 Repl. Vol. 3A); see Black v. First Federal Savings & Loan Ass'n, 830 P.2d 1103 (Colo.App. 1992), aff'd sub nom. La Plata Medical Center Associates, Ltd. v. United Bank, 857 P.2d 410 (1993); Wester & Co. v. Nestle, 669 P.2d 1046 (Colo.App.1983). In this appeal, Travers and Mitchell do not dispute the trial court's determination that the partnership was dissolved in January 1991. However, that dissolution, without more, did not determine Rainey's remaining obligations to his partners. See § 7-60-136, C.R.S. (1986 Repl.Vol. 3A). Rather, Rainey's obligations are dependent upon a variety of factual and legal issues, such as his right to dissolve the partnership and the propriety of Travers' and Mitchell's actions in winding-up or continuing the partnership. See generally §§ 7-60-129 to 7-60-141, C.R.S. (1986 Repl. Vol. 3A). The pleadings and affidavits submitted to the trial court show that material facts concerning such issues are in dispute. Hence, the trial court erred in entering summary judgment for Rainey. See McCormick v. Diamond Shamrock Corp., 175 Colo. 406, 487 P.2d 1333 (1971). Further, Rainey cannot avoid his liability to his partners under the Soldiers' and Sailors' Civil Relief Act (SSCRA), 50 U.S.C. app. § 501, et seq. (1988). In 50 U.S.C. app. § 534 (1988), the SSCRA does provide that a lease for professional purposes executed by a person who, after execution of such a lease, enters military service, may be terminated. However, termination is accomplished by providing notice in writing to the lessor. Here, it is undisputed that Rainey gave notice only to his partners. At no time did he or any of his partners provide notice to the lessor. Therefore, even if we were to assume that proper notice might have terminated the lease at least as to Rainey, see J.C.H. Service Stations, Inc. v. Patrikes, 181 Misc. 401, 46 N.Y.S.2d 228 (N.Y.City Ct.1944), because of the failure to provide such notice, Rainey may not rely on the SSCRA to avoid his liability either to the lessor or to his partners. II. On cross-appeal, Rainey contends that the trial court erred in awarding Travers and Mitchell attorney fees. We disagree. A claim or defense is groundless if it is not supported by any credible evidence. Western United Realty, Inc. v. Isaacs, 679 P.2d 1063 (Colo.1984). The determination whether a claim or defense is groundless under § 13-17-102, C.R.S. (1987 Repl.Vol. 6A) is within the discretion of the trial court, and its decision will not be disturbed on appeal if supported by the record. Schoonover v. Hedlund Abstract Co., 727 P.2d 408 (Colo.App.1986). Here, the trial court found that Rainey failed to present any credible evidence to support his defense that the partners had changed their agreement for sharing expenses. On Rainey's motion for reconsideration, the court also found that Rainey failed to present any evidence of damages to support his counterclaim. Lacking a transcript of the trial, we have no basis for review of those findings and must presume that the order was correct. See Alessi v. Hogue, 689 P.2d 649 (Colo.App.1984). Therefore, we will not disturb the award. We also reject Rainey's contention that the court's earlier denial of Travers' and Mitchell's motion for summary judgment precluded the finding that Rainey failed to present any credible evidence. After the trial on the merits, and having had the opportunity to assess the credibility of the parties' testimony, the trial court concluded that Rainey's version of the agreement was incredible. In contrast, in ruling on the motions for summary judgment, the trial court was precluded from assessing the credibility 375 of the parties. See Crouse v. City of Colorado Springs, 766 P.2d 655 (Colo.1988). We therefore perceive no conflict between the two rulings. Rainey's final argument on this issue is that he was the "prevailing party" because Travers and Mitchell did not recover the full amount claimed, and so no award of fees could be based on his defense and counterclaim. However, when a claim exists for a violation of a contractual obligation, the party in whose favor the decision or verdict on liability is rendered is the prevailing party for purposes of awarding attorney fees. Dennis I. Spencer Contractor, Inc. v. City of Aurora, 884 P.2d 326 (Colo.1994); see also Harrison v. Smith, 821 P.2d 832 (Colo.App. 1991). The trial court therefore did not err in awarding attorney fees against Rainey. III. Rainey next contends that the trial court erred in denying his claim for attorney fees. We find no grounds for reversal. In his motion for fees, Rainey argued that he was the "prevailing party" at trial, even though judgment was entered in favor of Travers and Mitchell. That argument is erroneous. See Dennis I. Spencer Contractor, Inc. v. City of Aurora, supra. He also asserted that Travers and Mitchell testified that they agreed to pay his fees if he prevailed. As we have not been provided with a copy of the trial transcript, we must reject that assertion. See Alessi v. Hogue, supra. Further, to the extent that Rainey claimed fees because he prevailed on his partial summary judgment motion, that claim is now moot. The judgment is reversed as to Travers' and Mitchell's cross-claim for Rainey's post-dissolution obligations, and the cause is remanded for further proceedings consistent with the views expressed in this opinion. In all other respects, the judgment is affirmed. TAUBMAN and VAN CISE,[] JJ., concur. NOTES [*] Sitting by assignment of the Chief Justice under provisions of the Colo. Const. art. VI, Sec. 5(3), and § 24-51-1105, C.R.S. (1994 Cum.Supp.).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1725814/	406 S.W.2d 434 (1966) Ex Parte Jack FAVOR. No. 39712. Court of Criminal Appeals of Texas. October 5, 1966. Aultman & Riley, by Ronald Aultman, Fort Worth, for appellant. Doug Crouch, Dist. Atty., William R. Magnussen and Truman Power, Asst. Dist. Attys., Fort Worth, and Leon B. Douglas, State's Atty., Austin, for the State. OPINION BELCHER, Commissioner. This is an appeal from an order entered in a habeas corpus proceeding remanding appellant to custody for extradition to the State of Louisiana. At the hearing on the writ, the state introduced in evidence the executive warrant issued by the Governor of Texas. The warrant recites that appellant "stands charged by complaint, warrant, supporting papers before the proper authorities, with the crime of murder" committed in the State of Louisiana; and that the Louisiana demand for his return is accompanied by copies of said complaint, warrant and supporting papers. The executive warrant of the Governor of Texas, which appears regular on its face, made out a prima facie case authorizing the remand of appellant to custody for extradition. Ex Parte Carroll, 171 Tex. Crim. 462, 351 S.W.2d 228; Ex Parte Fant, Tex.Cr.App., 400 S.W.2d 332. *435 Appellant insists that the evidence is not sufficient to authorize extradition in that no indictment was included with the accompanying papers, and there was no evidence that a capital case could be prosecuted in Louisiana upon a complaint. Section 3 of Art. 1008a, Vernon's Ann. C.C.P., authorizes the Governor of Texas to grant extradition where the demand is accompanied by a copy of a complaint together with a copy of any warrant issued thereon. The failure to show that Louisiana could prosecute for a capital offense on a complaint is not here material. Ex Parte Stanley, Tex.Cr.App., 377 S.W.2d 650; Ex Parte Young, Tex.Cr.App., 397 S.W.2d 74. The other contentions presented have been considered and they do not reveal error. The trial court was authorized to conclude as he did and remand the appellant for extradition. The judgment is affirmed. Opinion approved by the Court.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2430005/	326 S.W.2d 490 (1959) STATE FARM MUTUAL AUTOMOBILE INS. CO., Plaintiff in Error, v. William K. RICE, Defendant in Error. Supreme Court of Tennessee. June 5, 1959. Spears, Moore, Rebman & Williams, Chattanooga, for plaintiff in error. Massey, Stone & Kirkland, Chattanooga, for defendant in error. SWEPSTON, Justice. The sole determinative question is the proper interpretation of an exclusionary clause in a public liability automobile insurance policy. The case was tried on a stipulation of facts and a judgment rendered below in favor of William K. Rice against State Farm Mutual Insurance Company. The parties will be hereinafter referred to as in the trial court as plaintiff and defendant respectively. The two assignments of error are: (1) The trial court erred in the construction it gave to T.C.A. §§ 50-914 and 50-1004 of the Workmen's Compensation Law; and 491 (2) The trial court erred in the construction it gave to "Coverage C-Medical Payments" and "Exclusions: (g)" of the insurance contract. The substance of the stipulation of facts is as follows: The defendant, William K. Rice, on December 12, 1956, while walking along the street in Chattanooga was struck by an automobile being driven by one Skipper and as a result sustained personal injuries. The Skipper automobile was covered by a public liability and property damage policy issued by the defendant, State Farm Mutual Automobile Insurance Company. At the time of the accident plaintiff was employed by Manufacturers Outlet as a regular employee and said parties were operating under the Workmen's Compensation Act of Tennessee. The employer was insured by Standard Accident Insurance Company. Plaintiff was entitled to recover Workmen's Compensation benefits from his employer. Said employer's insurer did pay to plaintiff weekly benefits totalling $750 and was obligated to pay hospital and medical benefits, although it did not pay any. (The stipulation does not state why the medical benefits were not paid). Plaintiff sued the tort feasor, Skipper, and obtained a final judgment for $4,500, which was paid into the registry of the court by the defendant, State Farm Mutual Insurance Company. Upon the entry of this judgment the compensation insurer, Standard Insurance Company, filed its notice of lien under subrogation claim as provided by T.C.A. § 50-914 to recover its $750 compensation benefits that had been paid to plaintiff. Out of this $750 the attorneys for the plaintiff in the damage suit were allowed a fee of $250 as provided by T.C.A. § 50-1019 as amended by Ch. 121, Public Acts of 1957, for services in obtaining this subrogation recovery. The public liability policy, supra, issued by defendant herein on the Skipper automobile, in addition to the public liability provision, contained an additional provision up to the amount of $500 coverage, which reads as follows: "Coverage CMedical Payments: To pay reasonable expenses incurred within one year from date of accident for necessary medical, surgical, dental, ambulance, hospital, professional nursing and funeral services and prosthetic devices, to or for each person who sustains bodily injury caused by accident, while in, on or upon, entering into or alighting from, or through being struck by the automobile provided the automobile is being used by the named assured or his spouse if a resident of the same household, or with the permission of either." Said policy under the head of "Exclusions" states that the policy does not apply under "(g) coverage C, to bodily injury to any person: "(1) if benefits therefor are in whole or in part either payable or required to be provided under any workmen's compensation law;". Plaintiff incurred medical and hospital expenses in excess of $500. The trial judge in a short memorandum in disposing of the case, in part, made the following statement: "Apparently the plaintiff is not benefitted in any way by the full compensation law as he was prohibited from collecting the full amount of his judgment by the workmen's compensation company who had not actually paid him anything or are they required to pay him. Therefore, the defendant could not excuse itself from paying the $500 medical benefit for that reason." We are unable to agree with the trial court's reasoning in this matter. Under T.C.A. § 50-1004 the employer was bound to furnish and the employee was bound to 492 accept medical and hospital services. The record is not clear whether the employer and his insurer declined to furnish same or whether the employee declined to accept same. It is immaterial, because the plaintiff Rice is a third party beneficiary under the insurance contract between Skipper and the defendant insurance company in the present case and Rice is bound by all of the conditions of the contract. If his employer-insurer failed to provide these services, then he should have brought an action to enforce the same and if he simply declined to accept them, that was likewise up to him; but in no event can the plain language of this exclusion be changed by the failure of Rice to avail himself of the provisions of the compensation act. There is no ambiguity about the exclusionary clause. It is so held in Employers Liability Assur. Corp. v. Owens, Fla. 1955, 78 So. 2d 104; 50 A.L.R. 2d 107. The language in that case is exactly the same as in this. In the other two cases cited on page 107 in the Annotation in A.L.R.2d, the language is not identical but the disposition made in each case is enlightening somewhat in the present situation. Our Compensation Law plainly requires that these services be provided, which falls strictly within the language of this exclusionary clause. It is no answer to say, as did the trial judge, that the employer-insurer did not pay the medical and hospital expenses; nor to say that the plaintiff was not benefitted by the Compensation Law. Of course, in the absence of this exclusionary clause the plaintiff could have maintained this suit directly against the tort feasor's insurer just as he did the damage suit against the tort feasor, under T.C.A. § 50-914. Counsel for Rice cites Kopp v. Home Mutual Insurance Co., 6 Wis. 2d 53, 94 N.W.2d 224. That case is not applicable, among other reasons, because no exclusion clause was involved. Also cited is Bonney v. Citizens Mutual Automobile Insurance Company, 333 Mich. 435, 53 N.W.2d 321, 323. That case is rather in support of the defendant insurance company in this case. The exclusion clause there was, "any person to or for whom benefits are payable under any workmen's compensation law". The trial court had held that the insurance company could not defend on that clause, because it did not have jurisdiction to determine whether the claimant was covered by workmen's compensationthe jurisdiction being ordinarily in the state commission. On appeal the appellate court remanded the case for determination of that very question by the trial court and said this: "Any one who is eligible for benefits under any workmen's compensation law is intended to be excluded from participation in benefits under medical payment coverage. No where does this contract require the beneficiary, in order to be excluded, to actually receive payments but merely that benefits must be payable." The court further said: "Plaintiff contends that this clause has to mean benefits are payable under the Michigan Compensation Law when an award to that effect has been made and becomes final and enforceable under the provisions thereof. "An ambiguous contract must be construed against the party who prepared it. (Citing cases) However, we find no ambiguity in the language of the exclusion clause. Under plaintiff's theory we would be required, on the other hand, to read into the insurance contract additional words so that the exclusion clause would say benefits payable under an award of the compensation commission. We can neither make a new agreement for the parties nor, by addition, give it a meaning contrary to its express and unambiguous terms." *493 Finally, counsel for plaintiff rests his case upon Pitts v. Glens Falls Indemnity Co., 222 S.C. 133, 72 S.E.2d 174. The plaintiff was entitled to and was offered $200 for funeral expenses under the Workmen's Compensation Law. In addition, the plaintiff's intestate had an automobile policy which provided for as much as $500 medical expense, which paragraph included funeral expenses; but the exclusion clause did not expressly mention funeral expenses. A recovery was allowed the plaintiff for funeral expense. The court based its decision upon the usual rule of construing an ambiguity against the company writing the policy. We think that case is of no benefit in the present case whatever. We are, therefore, constrained to reverse the judgment below and dismiss the plaintiff's suit.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1725821/	675 So. 2d 1087 (1996) Allen H.A. BEGNAUD v. DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT, Linda Easley, and Geico. Linda Page EASLEY v. STATE of Louisiana, DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT (OFFICE OF HIGHWAYS). No. 96-C-1244. Supreme Court of Louisiana. June 21, 1996. Denied. WATSON, J., would grant the writ. LEMMON, J., not on panel; recused.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347710/	446 S.E.2d 150 (1994) 115 N.C. App. 725 STATE of North Carolina v. Cory Grant MAYFIELD, Defendant. No. 9410SC120. Court of Appeals of North Carolina. August 2, 1994. 151 Atty. Gen. Michael F. Easley, by Asst. Atty. Gen., Mary Jill Ledford, Raleigh, for the State. John T. Hall, Raleigh, for defendant-appellant. GREENE, Judge. Defendant's appeal involves three cases. On 28 July 1992 defendant entered a plea of no contest to the offense of breaking and entering in Wilson County Case No. 91 CRS 9541. Defendant was sentenced to ten years imprisonment, suspended, and five years supervised probation. Probation was transferred to Wake County and was assigned Wake County Case No. 92 CRS 92670. In Wake County Case No. 91 CRS 74187, defendant entered a plea of guilty to the offense of possession of stolen property. On 19 August 1992, pursuant to a plea arrangement, defendant was sentenced to five years imprisonment, suspended, with three years supervised probation. On 17 December 1992 defendant entered a plea of guilty to breaking and entering and larceny in Wake County Case No. 92 CRS 76921 and was sentenced to five years imprisonment pursuant to a plea arrangement. At the time of the third sentencing on 18 December 1992, the probationary sentences in the two earlier cases were revoked. Defendant was ordered to begin serving his sentences on 28 December 1992. On 23 December 1992 defendant gave notice of appeal from the conviction in Case No. 92 CRS 76921, and the revocation of probation in Case Nos. 92 CRS 92670 and 91 CRS 74187. Counsel for defendant filed a brief with this Court stating that he was "unable to identify any issue with sufficient merit to support a meaningful argument for relief on appeal ... [and requesting this Court] to review the record and to conduct a full examination for prejudicial error and to grant the appropriate relief, if any, to which the defendant may be entitled." In the brief the attorney acknowledged that he had not sent to the defendant "a copy of the transcript of the hearing, a copy of the Brief or notice to the defendant that he is entitled to submit a brief." Counsel for defendant states that he has made reasonable efforts to locate the defendant and has been unable to do so. Specifically, he states in his brief that there is currently an outstanding warrant for defendant's arrest issued upon his failure to report for the beginning of his sentence on 28 December 1992; mail sent to defendant's last known address has been returned; inquiry with the U.S. Postal Service reveals that defendant no longer resides at his last known address, and that he has provided no forwarding address; and repeated inquiries made with the North Carolina Department of Corrections reveal that defendant is not in custody in this State. 152 The issue presented is whether review of this case is permitted even though the defendant has not been given the necessary documents to conduct his own review of the case. An attorney for a criminal defendant who believes that his client's appeal is without merit is permitted to file what has become known as an Anders brief. See Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493, reh'g denied 388 U.S. 924, 87 S.Ct. 2094, 18 L.Ed.2d 1377 (1967). As a general rule, the defendant must be given "the necessary documents to conduct his own review of the case," State v. Bennett, 102 N.C.App. 797, 800, 404 S.E.2d 4, 5 (1991); see State v. Kinch, 314 N.C. 99, 102, 331 S.E.2d 665, 667 (1985) (counsel provided defendant with a copy of counsel's brief, the record, the transcript, and the State's brief), and "time... to raise any points [with the appellate court] that he chooses." Anders, 386 U.S. at 744, 87 S.Ct. at 1400, 18 L.Ed.2d at 498. However, delivery of the necessary documents to the defendant is not required if the defendant's attorney has, after a diligent effort, been unable to locate the defendant and deliver the documents. See Peacock v. State, 404 So.2d 1059 (Fla.1981) (where notification to defendant was returned marked "return to sender," the record was nonetheless ripe for consideration); People v. Goodman, 23 Ill.App.3d 252, 318 N.E.2d 635 (1974) (where the notice to the defendant of his opportunity to provide a brief on his own behalf was returned marked "address unknown," the appeal was nonetheless ripe for appellate review). In this case, defendant's attorney has used all due diligence in attempting to notify defendant of his right to pursue his appeal pro se, and the fault of counsel's failure to so notify defendant must lie with defendant. Accordingly, defendant's counsel has fully complied with the holding in Anders, and the appeal is ripe for appellate review upon the record and briefs before us. Pursuant to Anders and Kinch, we have conducted a full examination of all the proceedings in this case, and determine that this appeal is wholly frivolous. No error. ARNOLD, C.J., and MARTIN, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347698/	213 Ga. App. 793 (1994) 446 S.E.2d 204 ROUNDTREE v. THE STATE. A94A0093. Court of Appeals of Georgia. Decided June 13, 1994. Reconsideration Denied July 12, 1994. Saia, Richardson & Meinken, Joseph J. Saia, Lloyd W. Walker, for appellant. John C. Pridgen, District Attorney, for appellee. BLACKBURN, Judge. The appellant, Deon Roundtree, was indicted for trafficking in cocaine after more than 200 grams of a cocaine mixture were found in the car in which he was a passenger. The trial court denied Roundtree's motion to suppress the evidence seized during a warrantless search of the vehicle, and this interlocutory appeal followed. On November 23, 1993, at approximately 8:00 p. m., an officer with the Dooly County Sheriff's Department stopped an automobile that was following the vehicle in front of it too closely. The vehicle was driven by Fontella Snipes. After the officer explained to Snipes why he had stopped the car, Snipes apologized and stated that the car belonged to Roundtree's brother. The officer then spoke with Roundtree, who indicated that his daughter's mother, Sonya Smith, owned the vehicle. Roundtree and Snipes also stated they were returning to Atlanta from a trip to Florida, but gave conflicting information as to the duration of their trip. Upon further questioning, Snipes denied knowing Sonya Smith. Because of the conflicting information he received from Snipes and Roundtree, and because Snipes appeared to become increasingly nervous, the officer requested permission from Snipes to search the car. He explained to Snipes that she did not have to consent, and when Snipes refused to consent to the search, the officer told her that due to the circumstances he was going to call for a narcotics detection dog to conduct an exterior search of the vehicle. The officer then asked Roundtree to step to the rear of the vehicle, where he explained the situation to him. At that time, Roundtree verbally consented for him to go ahead and search the vehicle, but the officer told him that he would rather wait for the drug dog. The officer requested the dog at 8:19 p. m., and the dog arrived on the scene at 8:34 p. m. The drug dog alerted three times when walking around the car, and a search of the trunk revealed a shoe box in which there 794 were several plastic bags containing cocaine. On appeal, Roundtree contends that his motion to suppress should have been granted, on the grounds that the arresting officer's true motivation had been to develop an opportunity to search the vehicle, and that there was no probable cause to detain him beyond the limited time allowed for a brief investigative stop. "In determining when an investigatory stop is unreasonably pretextual, the proper inquiry is not whether the officer could validly have made the stop but whether under the same circumstances a reasonable officer would have made the stop in the absence of the invalid purpose." (Citation and punctuation omitted.) Caster v. State, 210 Ga. App. 809, 810 (437 SE2d 608) (1993). The standard for pretextual stops is measured by "an objective assessment of the officer's actions in light of the facts and circumstances confronting him at the time, and not on the officer's actual state of mind at the time the challenged action was taken." (Citations and punctuation omitted.) United States v. Bates, 840 F2d 858, 860 (4) (11th Cir. 1988). In the instant case, the officer testified at the suppression hearing that he pulled the vehicle over for following another vehicle too closely and that such stops were made to warn the following driver of the dangers caused by such driving. We find a reasonable officer would have stopped Roundtree's vehicle under the facts presented here. See State v. Chambers, 194 Ga. App. 609, 611 (391 SE2d 657) (1990); Boggs v. State, 194 Ga. App. 264 (390 SE2d 423) (1990). Further, there was no evidence that the arresting officer developed any suspicions of drug trafficking until after he decided to stop the vehicle. Upon stopping the car, the officer's suspicions of illegal activity were aroused by the inconsistencies in the explanations given by Snipes and Roundtree concerning the ownership of the car and the duration of their trip to Florida, and Snipes' increasing nervousness. Under such circumstances, the officer's suspicions were reasonable, and justified the brief investigative stop that grew out of the lawful traffic stop. See generally Murrell v. State, 200 Ga. App. 231 (407 SE2d 460) (1991); Claybrooks v. State, 189 Ga. App. 431 (375 SE2d 880) (1988). Approximately 19 minutes passed from the time the arresting officer initiated the traffic stop until the officer requested the drug dog. The drug dog was brought to the scene within 15 minutes of that request. The length of the investigatory stop was not unreasonable and did not go beyond the minimal intrusion authorized by Terry v. Ohio, 392 U. S. 1 (88 SC 1868, 20 LE2d 889) (1968). Mann v. State, 196 Ga. App. 730 (397 SE2d 17) (1990); but compare Schmidt v. State, 188 Ga. App. 85 (372 SE2d 440) (1988). Additionally, because the drug dog alerted to the automobile, the officer had probable cause to believe 795 that contraband was contained therein. See Boggs, supra; Donner v. State, 191 Ga. App. 58, 60 (380 SE2d 732) (1989). Accordingly, the trial court correctly denied Roundtree's motion to suppress. Judgment affirmed. Birdsong, P. J., and Senior Appellate Judge Harold R. Banke concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347715/	531 N.W.2d 190 (1995) STATE of Minnesota, Respondent, v. Marvin Rudolph FREEMAN, Appellant. No. C5-94-22. Supreme Court of Minnesota. April 28, 1995. 191 John M. Stuart, State Public Defender, Lawrence W. Pry, Asst. Public Defender, St. Paul, for appellant. Hubert H. Humphrey, III, Atty. Gen., Margaret Chutich, Asst. Atty. Gen., St. Paul, and Alan Mitchell, St. Louis County Atty., Duluth, for respondent. Heard, considered and decided by the court en banc. OPINION ANDERSON, Justice. Defendant, Marvin Rudolph Freeman, was indicted on three counts of first-degree murder in the shooting death of his ex-wife, Sherry Kadin. At trial, Freeman proffered an alibi defense, maintaining that his car's malfunctioning condition prevented him from being at the crime scene. The trial court allowed the state to present evidence that Freeman's car was operable. The state obtained this evidence by inspecting Freeman's car, which involved testing various aspects of the car's electrical and mechanical systems. At the end of the trial, the jury found Freeman guilty of first-degree premeditated murder in violation of Minn.Stat. § 609.185(1) (1992). The court sentenced Freeman to a mandatory term of life imprisonment. On appeal, Freeman maintains that the state's inspection irreparably altered his car's condition and thereby limited his ability to conduct subsequent tests, the results of which might have supported his alibi. Freeman claims that the state violated Minn. R.Crim.P. 9.01, subd. 1(4), by failing to give him notice before inspecting his car, and that the trial court abused its discretion by allowing the state to present evidence relating to the condition of his car. We hold that the court did not abuse its discretion in admitting evidence relating to the condition of Freeman's car, and we affirm. In April 1984, defendant, Marvin Rudolph Freeman, married Sherry Kadin. They had two daughters and lived in Duluth, Minnesota. The couple reportedly experienced a turbulent marriage, which ended in divorce in February 1987. After the divorce, Freeman's relationship with Kadin remained turbulent, and at times, it became contentious. For example, Freeman quarrelled with Kadin regarding child support and visitation arrangements. Pursuant to the divorce decree, Kadin had custody of the children, and Freeman was awarded visitation rights. On one occasion, when Kadin arrived late to exchange custody of the children, Freeman reportedly shook his fist at Kadin and yelled, "I'm really gettin' tired of this, having to chase you around to get the girls. I wish you'd get your shit together * * one of these days * * * if you don't get your shit straightened out * * * I'm gonna kill you." On June 16, 1992, Kadin reported to the Internal Revenue Service that Freeman had claimed exemptions on his tax return that he was not entitled to receive. As a result of the consequent audit, the IRS disallowed certain exemptions that had been claimed on the tax return and assessed $6,537 in additional tax and penalties. A short time later, Freeman called Kadin, informed her he knew she had reported him to the IRS, and warned her that she "better watch out." On January 1, 1993, Freeman moved from his parents' home in Duluth to an apartment located in White Bear Lake, Minnesota. He moved because he was beginning a new job in the Twin Cities metropolitan area. On Friday afternoon, January 29, 1993, Freeman left work early because he planned to travel from his home in White Bear Lake to Duluth, and he needed to make some repairs on his car before the trip. Although 192 Freeman maintained that he intermittently worked on his car in the parking lot of his apartment complex from approximately 3:30 p.m. to 8:30 p.m., a resident of his apartment complex, who wanted to ask Freeman a question, testified that Freeman's car was not present in the parking lot on any of the several occasions when she looked for it that afternoon and evening. That afternoon, Freeman pumped $11.50 worth of gasoline into his car, a blue-grey 1984 Oldsmobile Cutlass Ciera, presumably in anticipation of his trip. Freeman was going to Duluth to pick up his children because it was his weekend for visitation. Freeman and Kadin's divorce agreement designated a gas station located in Duluth as the site where they were to exchange custody of their children. Because he would not be able to arrive in Duluth by the designated pick-up hour of 6:00 p.m., Freeman arranged for his parents to pick up the children. Kadin had moved that day from Duluth to Floodwood, Minnesota, and had asked Freeman to pick up the children in Floodwood, but Freeman objected to the change, and sent his parents to the court-designated Duluth exchange spot. At approximately 6:40 p.m., Freeman's mother called him and informed him that Kadin had failed to bring the children to the designated exchange spot. Freeman called both the St. Louis County sheriff's office and the 911 nonemergency number to complain about the incident, but was instructed to consult his attorney because it was a civil matter. At 8:03 p.m., Freeman called his mother and told her what he had been told and also informed her that he would wait until the next morning to drive the nearly 142 miles from White Bear Lake to Duluth because it was too late to leave that night. Meanwhile, Kadin had finished bringing the last of her belongings to Floodwood, and was preparing to go to work at Generations House. Generations House is a residential health care facility for paraplegic patients, located in Duluth on the corner of Second Street and North 19th Avenue East. Kadin worked as a personal care attendant for Jack Zenda, one of the three paraplegic patients residing at Generations House. Zenda lives in the upstairs apartment of Generations House, while two other patients live in the lower level's two apartments. During November, December and January, Kadin always worked the night shift from 11:30 p.m. to 7:30 a.m. She typically walked the short distance from her apartment to work, stopping at a friend's home along the way. But on this evening, January 29, 1993, instead of walking, Kadin drove her mother's car to her friend's home, arriving at approximately 10:00 p.m. She left at approximately 11:20 p.m., driving the short distance to Generations House. Jennifer Johnson also worked as a personal care attendant for a Generations House resident living in one of the two downstairs apartments. Sometime between approximately 1:30 a.m. and 2:00 a.m., now Saturday morning, January 30, 1993, she reportedly heard footsteps outside on the snow-covered deck that partly surrounds the first floor apartments. At approximately 2:00 a.m., three blocks away from Generations House, a woman reportedly looked out the window of her home and saw a blue-grey car driving slowly down Fifth Street. The driver, dressed all in black, parked the car across the street from the woman's home, quietly shut the door, then quickly ran off, hunched over. Zenda was having difficulty sleeping that night. Consequently, at 2:00 a.m. he was lying awake in his bed. His bedroom has no door on it, but instead, the doorway is covered by a blanket, which is usually pushed open. The only outside access to Zenda's upstairs apartment is from a ramp leading from Second Street. An interior stairway leading from the downstairs also provides access to the upstairs. As he lay awake, Zenda heard someone enter his apartment from the Second Street ramp. Then he heard Kadin scream, "Marv!" Then he heard a male voice say "I'll teach you," and then he heard two gun shots, separated by what sounded like the loading of a pump shotgun. Following the shots, Zenda heard the male voice say, "there," and finally he heard the person exit the apartment. 193 Johnson heard the shots from downstairs. She ran up the interior stairway, and once upstairs, she discovered Kadin lying face-down in front of the open door to the outside deck. Johnson yelled downstairs to the other personal care attendant and instructed the attendant to call 911 for an ambulance. This 911 call was received at 2:19 a.m. Within minutes, paramedics arrived at the scene and used the ramp leading from Second Street to enter Zenda's apartment. Upon arrival, the paramedics smelled gunpowder, realized the apartment was an unsecured potential homicide scene, and called for police backup. Efforts to resuscitate Kadin were unsuccessful. An autopsy revealed Kadin died instantaneously from two bullet wounds to the back of her head. One bullet exited Kadin's head through her right eye, and the other was found in her brain during the autopsy and was seized as evidence. Officers from the Duluth Police Department arrived on the scene at approximately 2:30 a.m. They, too, entered Zenda's apartment using the ramp leading from Second Street. On the floor near Kadin's body, police found a .22 caliber lead bullet and a brass.22 caliber shell casing, which was marked with the Winchester flying "W" headstamp. Police also observed a bullet hole in the ceiling, and later seized a .22 caliber lead bullet from the attic. Upon learning that, shortly before the shooting, Johnson had heard footsteps on the deck outside the first floor apartments, police photographed several shoeprints located in that area. These shoeprints were left in approximately one-quarter of an inch of snow and gave the impression that the person who made them had attempted to look in the windows of the downstairs apartments. Because emergency personnel and police officers had repeatedly walked on the ramp leading from Second Street to Zenda's apartment, no identifiable shoeprints remained on the ramp. While at Generations House, Sergeant Dennis Moyle of the Duluth Police Department learned that, just before the gunshots, Zenda had heard Kadin scream, "Marv!" This motivated Sergeant Moyle to call a phone number for a "Marv" that he had found in Kadin's purse. A few minutes before 4:00 a.m., Sergeant Moyle called the number. Freeman's father answered the phone and informed Sergeant Moyle that Freeman's first name was Marvin and that Freeman had been married to Kadin. Sergeant Moyle requested and obtained the phone number to Freeman's apartment in White Bear Lake, which he immediately called. Sergeant Moyle let the phone ring repeatedly until a phone company recording intervened and instructed him to hang up and to dial again. After hanging up, Sergeant Moyle called the White Bear Lake Police Department and requested that they pick up and hold Freeman as a suspect in Kadin's murder. Officer Bruce Weber of the White Bear Lake Police Department responded to Sergeant Moyle's request at approximately 4:04 a.m. Officer Weber drove to Freeman's address in White Bear Lake, gained access to the apartment complex, and went to Freeman's apartment door, where he knocked and listened for any noise that might be emanating from inside. At approximately 4:10 a.m., Sergeant Moyle again called Freeman's apartment while Officer Weber was still at Freeman's apartment door. Officer Weber heard Freeman's phone ring repeatedly, but no one answered the phone and no one came to the door. Officer Weber returned to his squad car, obtained the license number and a description of Freeman's car, and began driving around the neighborhood in a spiral pattern in search of Freeman's car. At approximately 5:20 a.m., Officer Weber spotted a 1984 grey-blue Oldsmobile Cutlass Ciera, which he identified as Freeman's car, and he followed it to the parking lot of Freeman's apartment complex. Freeman drove into the parking lot and parked in a space at an angle. Once stopped, Officer Weber shined his very powerful spotlight at Freeman. Freeman got out of his car, glanced in the direction of Officer Weber's squad car, and walked around his still-open driver's-side door to the front left corner of his car, in the direction of a large park. Officer Weber reported that, while walking, Freeman put his hands in the air with his 194 forearms extended at approximately ninety degrees from his elbows. Concerned that Freeman intended to flee through the park, Officer Weber called out, "Marvin," identified himself as a police officer, and instructed Freeman to put his hands all the way up. Officer Weber then ordered Freeman to the rear of Freeman's car, where Officer Weber arrested him. Backup officers arrived at the arrest scene, and in a snowbank located approximately two feet in front of Freeman's car, one of the officers found an empty cardboard box of Winchester Wildcat brand .22 caliber long-rifle cartridges. It appeared to the officer that someone had stepped on the box to push it into the snowbank, leaving one end visible and the rest covered by snow. Although snow covered much of the box, the cardboard was firm, not damp. During cross-examination at trial, Freeman denied that he had dropped the box in the snowbank and also denied that he had attempted to conceal it, but Freeman did not deny that the box was his, stating, "I never said that it wasn't my that it wasn't my box." In addition to the empty cartridge box found at the arrest scene, the police obtained two boxes of Winchester Wildcat .22 caliber long-rifle cartridges from Freeman's gun cabinet located at his parents' home. One of these boxes was full, containing 50 cartridges, and the second contained 47 cartridges. The police impounded Freeman's car. To preserve its condition, the car was transported from White Bear Lake to Duluth on a roll-back wrecker. A search of the trunk, made pursuant to a warrant, revealed only one item, a brown paper grocery bag. The grocery bag contained the following items: one pair of Turntec athletic shoes, one pair of brown pants, one black jacket with red stripes around the neck and lettering on the front, one light blue shirt, one black stocking ski mask, one black and pink baseball hat, one rag, one used handiwipe, one pair of apparently used latex gloves, and two pair of apparently unused latex gloves. Most of these items were slightly damp. The floor of the trunk of the car had been lined with a bottom layer of brown paper grocery bags taped together with duct tape, and a top layer of white plastic garbage bags, which were also taped together. Freeman testified that he had lined his trunk to determine whether moisture in his trunk was caused by condensation or by leaking. But in rebuttal, a state's witness testified that the sealing gasket surrounding the perimeter of the trunk was perfectly intact, and no water staining indicating prior leakage existed in any part of the trunk area. A search of the car's interior passenger compartment revealed many items that are typically stored in the trunk of a car. At trial, the prosecutor hypothesized that these items had been removed from the trunk and placed in the passenger compartment. In addition to these items, the search of the passenger compartment revealed what the prosecutor referred to as a "murder kit." This kit included, among other things, one pair of high-power binoculars, one partial roll of carpeting, an empty plastic rifle case, a large hunting knife, a smaller buck knife, a wrecking bar, two fabric web belts, a large flashlight, a roll of clear tape, and a set of court papers relating to child support. At trial, the state's theory of the case was that Freeman drove from White Bear Lake to Duluth shortly after 8 p.m. on Friday night, intending to abduct Kadin as she walked to work. He had packed a murder kit, and he had removed the items kept in the trunk of his car and placed them in the passenger compartment. Finally, he had lined the trunk in preparation for transporting Kadin's body, but he had to change his plan when Kadin unexpectedly drove to work. At trial, Freeman asserted an alibi defense, maintaining that on the night of Kadin's murder, he fell asleep at his apartment in White Bear Lake after informing his mother that he intended to leave for Duluth early the next morning. He later awoke, and while it was still dark outside, he began to drive to Duluth. Freeman testified that he was unsure of the time he began his trip because he did not look at a clock before he left. He maintained that, as he drove north on interstate 35, a warning light located on 195 his car's dashboard lit up several times and his headlights grew dim. He testified that these events motivated him to pull over to the side of the road. Concerned that his car's battery was not being properly charged because of a loose alternator belt, and concerned that driving the car might seriously damage its engine, Freeman maintained that he turned around at the first opportunity and returned to his apartment in White Bear Lake. Although over the course of the investigation Freeman stated inconsistent estimates of how long he had been driving before he turned around, he ultimately testified that he had been driving for approximately forty-five minutes before deciding to return to White Bear Lake. Several items of evidence undermined Freeman's alibi defense. A forensic scientist at the Minnesota Bureau of Criminal Apprehension crime laboratory compared the size, angles and tread elements of the Turntec athletic shoes, which were found in the trunk of Freeman's car, with the photographs of the shoeprints found on the snow-covered deck at Generations House. The scientist determined that the shoeprints depicted in the photos corresponded very well to Freeman's Turntec shoeprint in size, shape and tread pattern, and concluded that Freeman's shoes could have made the shoeprints in the snow at the scene of the crime.[1] A Federal Bureau of Investigation special agent assigned to the Elemental and Metals. Analysis Unit in Washington, D.C. compared the metal composition of the three bullets fired at Generations House on January 30, 1993 (two bullets found at the crime scene and the one obtained during Kadin's autopsy) with eight bullets randomly selected from the full box of fifty cartridges retrieved from Freeman's gun cabinet.[2] The FBI special agent determined that the three[3] bullets found at the scene of Kadin's murder were of close compositional association with two of the eight bullets randomly selected from the full box of 50 cartridges retrieved from Freeman's gun cabinet.[4] The agent concluded that the three bullets found at the murder scene were manufactured by Winchester on the same day as the two bullets from the box of 50 cartridges retrieved from Freeman's gun cabinet. This box of 50 cartridges contained the same loading code, 2TB90L, as the empty cartridge box found in the snowbank at the scene of Freeman's arrest. This loading code indicated that the cartridges contained in both boxes were manufactured on February 9, 1982, during the second shift at Winchester's plant located in East Alton, Illinois.[5] On February 1, 1993, Fred Friedman, Chief Public Defender for the Sixth Judicial District, visited Sergeant Moyle at the Duluth Police Department to encourage the police 196 to examine Freeman's car. Although Mr. Friedman was not representing Freeman, he had visited Freeman as a favor and had learned that Freeman wanted somebody to inspect his car to verify his alibi that its malfunctioning prevented him from driving to Duluth. Mr. Friedman made the decision to tell the police that Freeman wanted his car inspected immediately. Consequently, the police expedited the inspection that had been planned for Freeman's car. On February 5, 1993, Paul Brand, the state's automotive expert in this case, inspected Freeman's car at the Duluth Police Department garage. Because Freeman had reported that his car's charge light had lit up several times on the night of the murder and had complained that his car's headlights had grown dim, both indicative of an electrical system problem, Brand first tested the car's battery. Videotaping his inspection, while narrating into a remote microphone, Brand first removed the battery cables. Brand tested the battery, found it to be fully charged, and determined that the electrical and charging system was working normally. Brand then examined the condition of the car's alternator belt. The alternator belt was shiny and was virtually new. It appeared to be somewhat loose, but not dramatically so, and there was no visual evidence of slippage, heat or wear. Using a metal dental pick and a felt-tipped pen, Brand marked the location of the pulley to preserve a record of the amount of tension existing in the alternator belt. Based on his inspection, Brand concluded that Freeman's car could have been driven round-trip from White Bear Lake to Duluth. On February 22, 1993, Freeman moved for an order allowing his automotive expert to inspect his impounded car. Although Freeman's motion was granted on February 26, 1993, Freeman's automotive expert, Bradley Williams, first inspected Freeman's car on September 8, 1993. Williams had been provided with several police reports, Brand's automotive inspection report, and the narrated videotape that had been taken of Brand's inspection. Although Williams criticized Brand for conducting only the least important one of four tests that a battery must undergo to be considered a good battery, Williams testified that the car's starting system and charging system passed all the tests that he conducted on September 8.[6] Williams noted, however, that the battery and alternator belt had been replaced.[7] Williams criticized Brand for not conducting a voltage drop test before removing the battery cables. By removing the battery cables and then reconnecting them, Williams explained, "cleaning" occurred, which precluded subsequent tests to determine the battery's precleaning voltage. Williams testified that a slipping alternator belt and a poor or corroded battery cable connection could have caused voltage fluctuations that would have manifested themselves in a manner consistent with Freeman's description of his car's malfunctioning. Nevertheless, Mr. Williams could not conclude that the car's hypothesized malfunctioning condition would have prevented Freeman from driving round-trip from White Bear Lake to Duluth. Based on the state's failure to give him notice prior to inspecting his car, an alleged discovery violation, Freeman moved to exclude any evidence derived from the inspection that related to the condition of his car. The trial court denied Freeman's motion and allowed the state to present evidence that the car was operable.[8] Freeman now contends 197 he is entitled to a new trial, claiming that the court abused its discretion in admitting the evidence. I. In the present case, the state used several devices to conduct mechanical and electrical tests of Freeman's car. Although the state went to great lengths to return Freeman's car to the condition it was in before it was examined, the state's removal of the car's battery cables resulted in "cleaning" any faulty or corrosion-affected connection. Freeman maintains that the state's automotive tests irreversibly altered the condition of his car, thereby limiting the ability of his automotive expert to conduct subsequent tests, the results of which might have corroborated Freeman's alibi.[9] Because the state failed to give him notice before inspecting his car, Freeman claims the state violated Minn.R.Crim.P. 9.01, subd. 1(4). Minn.R.Crim.P. 9.01, subd. 1(4) requires the state to give notice to a defendant before conducting any scientific test or experiment that may preclude any further tests or experiments. Cf. State v. Carlson, 267 N.W.2d 170, 175 n. 4 (Minn.1978) (observing that when chemical analysis of a bloodstain may require the total exhaustion of the available physical evidence, the better practice dictates that the defendant be notified of the proposed testing so that the defendant's own expert can be present, if the defendant so desires), reh'g denied (Minn., July 12, 1978). The rule provides: Reports of Examinations and Tests. The prosecuting attorney shall disclose and permit defense counsel to inspect and reproduce any results or reports of physical or mental examinations, scientific tests, experiments or comparisons made in connection with the particular case. If a scientific test or experiment of any matter, except those conducted under Minn.Stat. Ch. 169, may preclude any further tests or experiments, the prosecuting attorney shall give the defendant reasonable notice and an opportunity to have a qualified expert observe the test or experiment. Although we have not had the opportunity to interpret the scope of the notice requirement found in Rule 9.01, subd. 1(4),[10] we need not do so in the present case because even if the state's failure to give Freeman prior notice violated Rule 9.01, subd. 1(4), we conclude that the trial court did not abuse its discretion in admitting evidence obtained during the inspection. Once a discovery violation has occurred, the trial court is particularly suited to determine the appropriate 198 remedy and has wide discretion in deciding whether to impose sanctions. State v. Lindsey, 284 N.W.2d 368, 373 (Minn.1979), reh'g denied (Minn., Sept. 11, 1979). In exercising its discretion, the court should consider all relevant factors, including the reason why notice was not given and the extent to which the violation prejudiced the opposing party. See State v. Smith, 367 N.W.2d 497, 502 (Minn.1985). Absent a clear abuse of discretion, a reviewing court will not overturn the trial court's decision. State v. Lindsey, 284 N.W.2d at 373. Furthermore, although Freeman correctly contends that Minnesota discovery provisions are stricter, in some respects, than their federal counterparts, the preclusion of evidence is a severe sanction that should not be lightly invoked. State v. Kaiser, 486 N.W.2d 384, 386 (Minn. 1992); State v. Rasinski, 472 N.W.2d 645, 649 (Minn.1991); State v. Lindsey, 284 N.W.2d at 374. One of the objectives pretrial discovery serves is to avoid surprise. State v. Lindsey, 284 N.W.2d at 372. Within one day of his arrest, Freeman told Chief Public Defender Friedman that he wanted the police to inspect his car to verify his alibi that his car's malfunctioning prevented him from driving from White Bear Lake to Duluth. Because Freeman maintained from the time of his arrest that he had experienced car difficulties, it is unlikely that he was surprised by the state's evidence relating to his car's condition. The state expedited its inspection of Freeman's car in an attempt to verify Freeman's alibi. Nothing in the record indicates that the state acted in bad faith in failing to give Freeman notice prior to inspecting his car, and nothing indicates that the state denied Freeman's automotive expert access to the car. Although Freeman had been given permission on February 26, 1993, to inspect the car, Freeman waited until September 8, 1993, to have his automotive expert, Williams, inspect the car for the first time. Freeman fails to explain why he delayed in attempting to inspect the car. Notwithstanding Freeman's delay, the state provided Williams with copies of or access to various police reports, automotive inspection reports, and the narrated video-tape taken during the state's inspection of Freeman's car. That material allowed Freeman to cross-examine the state's automotive expert, Brand, on his testing procedure and also allowed Freeman to rebut the propriety of Brand's testing procedure with the testimony of Williams. Williams was able to opine at trial that the corrosion he observed on the battery cables of Freeman's car could have caused voltage fluctuations that would have manifested themselves in a manner consistent with Freeman's description of his car's malfunctioning. Freeman's ability to cross-examine Brand, as well as his ability to present Williams's testimony in rebuttal, remedied the state's failure to give Freeman notice prior to inspecting his car. Notwithstanding any real or hypothesized malfunctions, both automotive experts concluded that Freeman's car could have been successfully driven round-trip from White Bear Lake to Duluth on the night of January 29, 1993. Thus, even if the state had provided Freeman with notice prior to inspecting his car, the results of any additional tests conducted at that time, at most, would have merely served to corroborate Freeman's description of his car's malfunctioning condition. Comparable corroboration resulted from Williams's testimony and from Freeman's cross-examination of Brand. Moreover, any additional tests would not have addressed the state's contention that Freeman's car was capable of being driven round-trip from White Bear Lake to Duluth. Considering the relevant factors, we conclude that the trial court did not abuse its discretion in refusing to exclude the state's evidence that Freeman's car was operable. II. Even if Freeman's contention that the trial court abused its discretion had merit, that error was harmless beyond a reasonable doubt. To remedy a discovery violation, a reviewing court ordinarily should not order a new trial if no reasonable probability exists that the outcome of the trial would have been different if the evidence had been available. State v. Clobes, 422 N.W.2d 252, 255 (Minn. 1988), reh'g denied (Minn., May 9, 1988). 199 The state's evidence relating to the condition of Freeman's car might have undermined the credibility of Freeman's alibi defense. Once again, however, both automotive experts concluded that Freeman's car could have been successfully driven round-trip from White Bear Lake to Duluth. Moreover, a great deal of properly admitted evidence linked Freeman to the killing, and overall, we consider the trial court's rulings on evidentiary objections to have been fair and evenhanded. Thus, if the court abused its discretion in admitting the evidence, the jury would not have arrived at a different verdict had the evidence not been admitted, and any error was harmless. III. Freeman also requests that we grant him a new trial in the interests of justice. Even when prejudice to the defendant is not clear, this court, on limited occasion, has awarded a new trial in the exercise of its supervisory powers "in the interests of justice." See State v. Kaiser, 486 N.W.2d 384, 387 (Minn.1992) (conceding that it was arguable whether the defense was prejudiced by the prosecutor's failure to disclose potentially exculpatory evidence, but nevertheless, awarding a new trial, "in the interests of justice," when the prosecutor's failure to comply with the discovery rules was clear); State v. Schwantes, 314 N.W.2d 243, 245 (Minn.1982) (awarding a new trial "in the interests of justice" because of prosecutor's negligent failure to disclose information useful to defendant in deciding whether to waive marital privilege, even though the evidence of defendant's guilt was strong). Although this court has ordered a new trial in the interests of justice even when the prosecutor's failure to comply with the discovery rules was inadvertent, prophylactic reversals in the interest of justice have been limited to circumstances in which the prosecution's failure to comply with the discovery rules is clear. See, e.g., State v. Kaiser, 486 N.W.2d at 387; State v. Schwantes, 314 N.W.2d at 245. In the present case, it is unclear that a discovery violation has occurred. In addition, the state commendably attempted to preserve the condition of Freeman's car. Finally, Freeman failed to have his own expert inspect his car until more than seven months after the state's inspection. All of these factors support our conclusion that a new trial is not needed in the interests of justice. Affirmed. NOTES [1] This type of Turntec shoe was sold between 1987 and 1989, and only eleven pair of this particular brand and size of shoe were sold in Minnesota, through one distributor in Duluth. [2] By analyzing six trace elements found in lead bullets, it is possible to determine whether two bullets have a common origin. The six trace elements include antimony, which bullet manufacturers purposefully include in lead bullets in specific desired percentages, and copper, arsenic, tin, silver, and bismuth, which are incidental contaminants. Because the neuron activation analysis testing technique is extremely precise and sensitive, and because trace elements are not homogenous, even in the same batch of lead, if two bullets show the same number of elements in exactly the same amounts, they are either analytically indistinguishable or of close compositional association. Significantly, when two bullets have a close compositional association, that indicates they were made on the same day, from the same part of the same batch of lead. Comparisons between bullets from the same box of cartridges always reveal a few bullets having close compositional association. But comparisons between bullets manufactured at the same factory on different days reveal totally different compositions because the compositions change so quickly. Moreover, these differences increase significantly between bullets made by different manufacturers. [3] Although Zenda reported hearing two shots the night of Kadin's murder, three shots were apparently fired. [4] The composition of the three bullets fired at Generations House was totally different from six bullets randomly selected from the box of 47 cartridges that was also obtained from Freeman's gun cabinet located at his parents' home. The box of 47 cartridges, however, was not packaged on the same date as the box of 50. [5] Also, both boxes were labelled with a Target price tag indicating a cost of $1.39. [6] If someone had told him they were having trouble with their alternator and their charge light came on, Williams would have checked the car's alternator output, the charging system, and the battery, which is consistent with what Brand did. [7] The police had removed the original battery from the car because, after six months of nonuse, parasitic loads had drained it so low that it would no longer hold a charge. Williams examined the original alternator belt, which the police had preserved in its original condition, and agreed that the belt appeared to be new, manifesting no signs of slipping. The belt's condition, however, did not mean slipping had not occurred. [8] The trial court conditioned its denial, directing the state to disclose to Freeman its documents and reports related to its automotive inspection. The state fully complied with that directive, providing both Freeman's attorney and Freeman's automotive expert with copies of or access to various police reports, automotive inspection reports and the videotape taken during the state's inspection of Freeman's car. [9] When the state's automotive expert, Brand, removed the cables from the battery of Freeman's car, Brand erased any trouble codes that might have been recorded in the car's computer. Computer trouble codes are numerical indicators stored in the computer any time a problem arises with engine devices such as the engine management system. Freeman's brief criticized Brand for failing to check the car's computer for trouble codes before erasing them by disconnecting the battery cables. At oral argument, however, Freeman abandoned any contention that he is entitled to a new trial because the state might have erased trouble codes. [10] We have interpreted the scope of the disclosure requirement found in Rule 9, subd. 1(4) in cases involving scientific analysis of physical evidence, which falls under the clear letter and intent of the rule's notice and disclosure requirements. See State v. Schwartz, 447 N.W.2d 422, 427 (Minn.1989) (holding that because forensic samples are often so small that the entire sample must be used to procure a reliable result, access to the data, methodology, and actual results of the state's DNA tests is crucial for the defendant to have at least an opportunity for independent expert review) reh'g denied (Minn., Dec. 11, 1989); State v. Smith, 367 N.W.2d 497, 502 (Minn.1985) (concluding the prosecutor's failure to disclose that it possessed a latent fingerprint that had been left in the victim's living room and that matched defendant's known prints clearly violated the disclosure requirement contained in Minn.R.Crim.P. 9.01, subd. 1(4)); State v. Mattson, 359 N.W.2d 616, 618 (Minn.1984) (resolving that the state complied with its disclosure obligation under Minn.R.CrimP. 9.01, subd. 1(4) by providing defendant with a copy of the controlled substance testing report prepared by the state's chemist); State v. Caldwell, 322 N.W.2d 574, 584 (Minn.1982) (stating Minn.R.Crim.P. 9.01, subd. 1(4) requires the prosecutor to disclose and provide defendant access to results or reports of fingerprint identification); State v. Moss, 262 N.W.2d 422, 424 (Minn.1978) (requiring disclosure of report of blood tests under Minn. R.Crim.P. 9.01, subd. 1(4)).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264460/	14 Cal.App.4th 422 (1993) 17 Cal. Rptr.2d 552 ANTONIO G., a Minor, Petitioner, v. THE SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent; THE PEOPLE, Real Party in Interest. Docket No. D018333. Court of Appeals of California, Fourth District, Division One. March 22, 1993. 424 COUNSEL Francis J. Bardsley, Public Defender, Philip W. Harry, Assistant Public Defender, Bill Boyland, Steven J. Carroll, Thomas Palmer, Susan Gaskins and Graciela Zavala, Deputy Public Defenders, for Petitioner. Lloyd M. Harmon, Jr., County Counsel, Anthony Albers, Diane Bardsley, and R. Mark Beesley, Deputy County Counsel, for Respondent. No appearance for Real Party in Interest. OPINION FROEHLICH, J. This petition is on behalf of a juvenile ward of the court. It seeks a ruling from this court reversing the denial by the superior court judge of a peremptory challenge filed on behalf of the minor. The challenge was filed in connection with a juvenile court hearing of a supplemental petition brought under Welfare and Institutions Code[1] section 777, which alleged that the minor's previous disposition on probation had not been effective in his rehabilitation. We granted a stay of the juvenile court proceedings and issued an order to show cause why the petition should not be granted.[2] Being now fully briefed on the issue, and having entertained oral argument from the petitioner and the real party in interest (RPI), we conclude that the minor is not entitled to a peremptory challenge under the circumstances of this case, and therefore deny the petition. BACKGROUND The history of the case leading to the hearing in question is as follows: The minor was made a ward of the court in 1989 after a finding that he had unlawfully possessed a controlled substance for sale. In October 1992 a supplemental petition under sections 602 and 777 was filed which alleged violation by the minor of Penal Code section 12101, unlawful possession of a firearm, and other probation violations. Judge Melinda Lasater presided over the detention hearing held with reference to these charges. Based on an admission of one of the charges a violation finding was made and at the 425 subsequent disposition hearing the minor was committed to the California Youth Authority. Execution of this commitment was stayed, however, pending a review hearing set for March 12, 1993, in Judge Lasater's court. Before this hearing could be held another supplemental petition was filed, on January 28, 1993, alleging the minor had tested positive for cocaine and phencyclidine (PCP) use. The detention hearing resulting from this petition was held before the same judge who had presided at the prior hearing and who was scheduled to administer the upcoming review hearing, Judge Lasater. A written peremptory challenge was filed prior to the hearing. The judge denied the challenge on the ground that the hearing on the supplemental petition was a continuation of prior hearings in the case, as distinguished from a determination of any new criminal charge, and hence the new hearing did not give rise to an opportunity to interpose a peremptory challenge. CONTENTIONS Petitioner contends that each hearing resulting from the filing of a supplemental petition constitutes a new and original proceeding, and that the minor is clothed with all constitutional rights in connection with such new proceeding including the right to utilize a peremptory challenge. RPI argues that the paramount issue in the hearing is the present status of the minor in light of the terms and conditions of his probation, and hence this is more a continuation of the previous proceeding than the initiation of a new matter. Accordingly, there should be no opportunity to interfere with the judge's continuing jurisdiction over the case by means of a peremptory challenge. RPI also contends a contrary rule would undermine the purposes and objectives of juvenile law which are promoted by continuing a case in the jurisdiction of the judge who first issued the terms of probation and who is familiar with the background of the case. DISCUSSION (1a) A peremptory challenge may not be interposed to forestall a hearing which is no more than the continuation of prior proceedings. (Jacobs v. Superior Court (1959) 53 Cal.2d 187 [1 Cal. Rptr.2d 9, 347 P.2d 9]; McClenny v. Superior Court (1964) 60 Cal.2d 677 [36 Cal. Rptr.2d 459, 388 P.2d 691].) Our task, therefore, is to decide whether the hearing in this case was simply a new installment of the continuing administration of the wardship of this minor, or whether it was the commencement of litigation of new and independent charges.[3] (2) The purpose of a section 777 supplemental petition and the hearing which results from it is to establish that by reason of events occurring after 426 the grant of probation the "previous disposition has not been effective in rehabilitation...." In considering the petition the court is limited to the facts alleged in the petition, and these facts also are restricted to events occurring after the grant of probation. (In re Angel E. (1986) 177 Cal. App.3d 415, 419 [223 Cal. Rptr. 4]; In re Ronnie P. (1992) 10 Cal. App. 4th 1079, 1084-1086 [12 Cal. Rptr.2d 875].) (3) In determining the truth of the allegations in the supplemental petition the trial court must accord to the minor all procedural trial rights. As stated in In re Arthur N. (1976) 16 Cal.3d 226, 240 [127 Cal. Rptr. 641, 545 P.2d 1345]: "[I]f the charged acts of misconduct or crimes are proved the juvenile may be removed from his parents' custody and may as a result of this adjudication, either presently or in the future, be institutionalized locally or committed to the Youth Authority. This reality compels the conclusion that the hearing cannot be equated either to a dispositional hearing or to a probation revocation hearing. The due process clause of the Fourteenth Amendment to the United States Constitution therefore requires that the standard of proof of the charged acts of misconduct or crimes be proof beyond a reasonable doubt.... [T]he juvenile [must be] accorded the same constitutional and statutory rights that he has on an original petition." The issue in Arthur N. was not, however, the availability of a peremptory challenge for the supplemental hearing; it was whether the standard of proof of violation of law or the terms of probation should be proof beyond a reasonable doubt. An important point of the case was its distinction of adult probation revocation hearings, in which proof need be only by clear and convincing evidence, on the ground that the results of the adult probation hearing cannot be punishment any greater than that provided for the original offense, while proof of child misconduct can subject the minor to increasingly severe custody impositions. (In re Arthur N., supra, 16 Cal.3d at pp. 236-237.) (4) It is true that a modification of the custody terms of a minor charged with misconduct or the commission of a crime by a supplemental petition may be ordered only upon a finding of new acts or circumstances involving the minor. The ultimate conclusion to be reached by the court, however, is 427 that these new acts or circumstances demonstrate that "the previous disposition has not been effective in the rehabilitation or protection of the minor." (§ 777, subd. (a)(2).) Thus it is obvious that in determining the present status of the minor in light of his current transgressions reference must be made to his prior history and the objective of the probation grant he was then enjoying. (See In re Joe A. (1986) 183 Cal. App.3d 11, 28-29 [227 Cal. Rptr. 831], in which the minor's proved misconduct was deemed not serious in light of the facts giving rise to his probation.) (1b) Hence, although the original focus of a section 777 hearing is upon newly alleged misconduct, the ultimate disposition of the minor depends upon an analysis of his original problems and his history on probation. We believe it is most beneficial to the effort to achieve consistent and wise administration of the wardship of wayward juveniles that the same judge preside at recurrent hearings which review their progress. That constitutional procedural protections may be brought to bear by certain of these hearings, thus requiring a high burden of proof, representation by counsel and such, does not undermine this objective.[4] The philosophy of juvenile court proceedings and their relationship to constitutional rights was explained in T.N.G. v. Superior Court (1971) 4 Cal.3d 767, 775 [94 Cal. Rptr. 813, 484 P.2d 981] as follows: "The purpose of the Juvenile Court Law has long been `to secure for each minor under the jurisdiction of the juvenile court such care and guidance, preferably in his own home, as will serve the spiritual, emotional, mental, and physical welfare of the minor and the best interests of the State....' (Welf. & Inst. Code, § 502.) The process of the juvenile court involves determination of the needs of the child and society, provision for guidance and treatment for the juvenile, and protection of the child from punishment and stigma. "In recent years the courts, while preserving the beneficial aspects of the juvenile process, have held that certain procedural protections must be observed in order to guarantee the fundamental fairness of juvenile proceedings. [Citations.] Gault, Winship and the other decisions which insure such procedural fairness in juvenile proceedings do not, however, suggest a surrender of the salutary protections of the juvenile court system. As we observed in In re Dennis M. [(1969)] 70 Cal.2d 444, 456 [75 Cal. Rptr. 1, 450 *428 P.2d 296], `even after Gault' juvenile court proceedings `retain a sui generis character' and are `conducted for the protection and benefit of the youth in question.'" It fosters the general objectives of the juvenile court system, we conclude, for the judge who has imposed probationary conditions upon the terms of custody of a minor ward of the court to preside over supplemental hearings involving the minor. We would therefore disfavor, as a matter of policy, the adoption of a rule which would permit the interposition of peremptory challenges in the midst of continued hearings involving the development, character and conduct of the minor. We should not encourage forum shopping in such case.[5] We therefore conclude that a hearing on a supplemental petition under section 777, which alleges misconduct of a minor in violation of the terms of his probation, is not a new or original proceeding, but instead is a continuation of the court's supervision over the minor.[6] Accordingly, the peremptory challenge provision of Code of Civil Procedure section 170.6 is not available for such proceeding. The petition is denied. The stay of superior court proceedings issued on February 11, 1993, is vacated. Kremer, P.J., and Huffman, J., concurred. Petitioner's application for review by the Supreme Court was denied June 24, 1993. NOTES [1] All statutory references are to the Welfare and Institutions Code unless otherwise specified. [2] The denial of a peremptory challenge is not an appealable order and may be reviewed only by peremptory writ. (Code Civ. Proc., § 170.3, subd. (d).) [3] There appears to be no authority directly in point. In re Byron B. (1979) 98 Cal. App.3d 330 [159 Cal. Rptr. 430] involved the denial of a peremptory challenge filed against a judge who was to conduct a section 777 hearing. The ruling against the petitioner was based, however, not on general considerations, but rather upon a conclusion that the petitioner had waived whatever right he may have had to a peremptory challenge by virtue of commencing the hearing without objection. No suggestion is made as to what the rule should be when the challenge is timely interposed, at least in terms of the commencement of the new section 777 hearing. [4] We note that the right to a peremptory challenge is not a constitutional right, but is derived only from statute. No one has suggested that the exercise of a peremptory challenge is based upon any fundamental right so as to bring due process concepts into play. (See, e.g., In re Laura H. (1992) 8 Cal. App.4th 1689, 1695, fn. 6 [11 Cal. Rptr.2d 285].) [5] It is of note that appellant's brief cites as presumed support for the motion to disqualify the judge peremptorily that "Judge Lasater has consistently and systematically proven herself to be without leniency in these types of proceedings." While a contention of this sort might support a motion for challenge for cause under Code of Civil Procedure section 170.3, it is surely not a basis for urging a broad policy change in the use of peremptory challenges which would encourage judge shopping in juvenile court. [6] The trial court considered that a section 777 hearing held to determine misconduct short of criminal activity might involve lesser procedural requirements than one in which the perpetration of a specific crime was alleged (here the alleged misconduct, a bad drug test, was not alleged to be nor was it treated as a crime). To the extent one relies on the reasoning set forth in In re Arthur N., supra, quoted in the text, 16 Cal.3d at page 240, this distinction would seem misplaced. Also, our above analysis suggests no distinction between the availability of a peremptory challenge in supplemental hearings in which crimes are charged, as distinguished from such hearings involving only misconduct not rising to the level of crime. However, we recognize that we deal here not with a hearing to establish the perpetration of a crime by the minor ward, but only a hearing to demonstrate his noncriminal violation of the terms of probation.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264466/	14 Cal.App.4th 562 (1993) 17 Cal. Rptr.2d 577 ENRIQUETA SILVA, Petitioner, v. THE SUPERIOR COURT OF SACRAMENTO COUNTY, Respondent; THOMAS HEERHARTZ, as Acting Executive Director, etc., Real Party in Interest. Docket No. C014832. Court of Appeals of California, Third District. March 23, 1993. 566 COUNSEL Paul Spackman and Russell Iungerich for Petitioner. No appearance for Respondent. Daniel E. Lungren, Attorney General, and Richard D. Marino, Deputy Attorney General, for Real Party in Interest. OPINION SIMS, Acting P.J. Petitioner Enriqueta Silva, M.D., seeks a writ of mandate directing respondent superior court to set aside its order denying her petition for writ of administrative mandamus. The real party in interest, the Medicial Board of California (Board), obtained an administrative interim order suspending Silva's medical license, pursuant to Government Code section 11529.[1] Although Silva asserts numerous challenges to the administrative action, the primary issue raised by this petition is the correct standard of proof to be applied in a proceeding brought under section 11529. The administrative law judge (ALJ) hearing the cause applied a preponderance of the evidence standard. We shall conclude the appropriate standard is by clear and convincing evidence to a reasonable certainty. We shall therefore issue a writ directing the trial court to stay the suspension order. I FACTS AND PROCEDURAL HISTORY Silva is a licensed physician in the State of California. In January 1991, Silva signed a "stipulated settlement decision and order," which settled an accusation filed against her by the Board. Pursuant to that order, Silva agreed that her license would be revoked, but the revocation would be stayed and Silva placed on probation for seven years. One term of Silva's probation requires that she "shall not permit Salvador Francisco Cano ... to enter the 567 premises at any location where [Silva] practices medicine, treats patients, maintains a medical practice, or at any facility where patients are treated or medicine is practiced and at which [Silva] has any interest of any kind." Cano, who is Silva's husband, is not licensed to practice medicine in this state. An additional term of Silva's probation provides that should Silva violate her probation in any respect, the Board, after providing notice and an opportunity to be heard, may revoke probation and carry out the disciplinary order that was stayed. In October 1992, the Board filed with its Division of Medical Quality (Division) an amended petition for an interim order suspending Silva's license, pursuant to section 11529.[2] The amended petition alleges in substance that Silva permitted her husband, Cano, to practice medicine at clinics 568 where Silva maintains a medical practice or in which she has a financial interest. An ALJ designated by the Division conducted a hearing on the petition for interim suspension order. In his decision, the ALJ found that Silva's husband, Cano, practiced medicine at one of Silva's medical clinics on June 25, July 9 and 29, and August 20, 1992, and that, from the whole record, it is inferred Silva knew her husband was seeing patients at her practice and intended to permit him to continue to do so. The ALJ indicated, "[Silva's] repeated course of conduct in allowing her unlicensed husband to see her patients notwithstanding custom and the law, as well as repeated orders to the contrary by lawfully constituted authority, raise an inference of contumacious misconduct so gross in degree as to justify an order of interim suspension notwithstanding the financial detriment she will suffer in the normal course of such suspension." The ALJ concluded the Board established "by a preponderance of the evidence" that Silva engaged in and will continue to engage in acts or omissions constituting violations of the Medical Practice Act by committing unprofessional conduct, as defined by Business and Professions Code section 2234, subdivision (a), in that she failed to comply with the lawful terms of her probation. Moreover, the ALJ indicated, permitting Silva to practice medicine will endanger the public health and safety. Accordingly, the ALJ ordered Silva's license suspended pending the resolution of an accusation to be filed against her by the Board. In accordance with section 11529, subdivision (h) (see fn. 2, ante), Silva then filed in the respondent court a petition for writ of administrative mandamus. Silva subsequently filed a document entitled "ex parte application for temporary stay of interim suspension order." Following the filing of opposition by the Board, the respondent court denied the application for issuance of an alternative writ and the application for a temporary stay order. Silva sought review of the respondent court's order by petition for writ of mandate in this court. We notified the parties we were considering issuing a peremptory writ of mandate in the first instance and that any further opposition to the petition was to be timely filed. We also stayed enforcement of the interim suspension order pending receipt of opposition and further order of this court. The Board has filed opposition. 569 II STANDARD OF PROOF UNDER SECTION 11529 Section 11529 is silent as to the standard of proof to be applied by the ALJ at the hearing on the Board's application for an interim order. (See fn. 2, ante.) (1a) Silva contends the ALJ erroneously applied the preponderance of the evidence standard of proof at her section 11529 hearing. We agree. In Ettinger v. Board of Medical Quality Assurance (1982) 135 Cal. App.3d 853, 856 [185 Cal. Rptr. 601], the court held the "clear and convincing proof to a reasonable certainty" standard of proof applies at Board administrative proceedings to revoke or suspend a medical license. The Ettinger court explained that the higher "clear and convincing" standard has been applied in disciplinary proceedings against other professional licensees, such as real estate brokers and attorneys. Although attorney discipline proceedings have a "nature all their own, neither civil nor criminal," nevertheless the purpose of attorney discipline proceedings and doctor license suspension proceedings is identical. "Since it is apparent that the underlying purpose of disciplining both attorneys and physicians is protection of the public, it would be anomalous to require a higher degree of proof in disciplinary hearings involving attorneys or real estate agents than in hearings involving physicians." (Id. at pp. 855-856.) The Ettinger court distinguished cases applying the preponderance of evidence standard to compensation benefits hearings and public employee discipline hearings. "A careful examination of these cases shows a difference between the policy considerations and interests involved there and those connected with the instant case. Neither Perales [v. Department of Human Resources Dev. (1973) 32 Cal. App.3d 332 (108 Cal. Rptr. 167)], Pereyda [v. State Personnel Board (1971) 15 Cal. App.3d 47 (92 Cal. Rptr. 746)], nor Skelly [v. State Personnel Bd. (1975) 15 Cal.3d 194 (124 Cal. Rptr. 14, 539 P.2d 774)] was dealing with the revocation or suspension of professional licenses. Both Skelly and Pereyda involved action taken by the state against its employees. It seems only logical to require a higher standard of proof when dealing with revocation or discipline of a professional licensee as opposed to mere termination of state employment. The former affects one's right to a specific professional employment, while the latter involves only the right to be employed by a specific employer. It is the totality of professional employment opportunity involving vested interest 570 rights which requires the higher standard." (Ettinger v. Board of Medical Quality Assurance, supra, 135 Cal. App.3d at p. 857.)[3] There is no logical distinction between the physician's interests affected by the license suspension or revocation procedure discussed in Ettinger and the section 11529 interim suspension procedure at issue here. In Ettinger, the Board suspended the physician's license for one year, but stayed the suspension and placed the physician on probation for one year. (135 Cal. App.3d at p. 854.) Here, the ALJ suspended Silva's physician's license which obviously has a greater impact on her interests than the probationary order in Ettinger. (2a) (See fn. 4.), (1b) We have no occasion to determine if the rule stated in Ettinger is of constitutional origin. The Legislature has expressly declined to apply the preponderance of evidence standard in section 11529 interim proceedings.[4] The Legislature added section 11529 as part of the "Medical Judicial Procedure Improvement Act" (Stats. 1990, ch. 1597, §§ 35, 39) by enacting Senate Bill No. 2375, 1989-1990 Regular Session.[5] As initially introduced, section 11529 would have established a "preponderance of competent evidence" standard of proof for interim order proceedings. (Sen. Bill No. 2375, 1st reading Feb. 28, 1990 (1989-1990 Reg. Sess.) § 30.) However, the Senate amended section 11529 to delete the preponderance of evidence standard. (Sen. Bill No. 2375, as amended Apr. 24, 1990 (1989-1990 Reg. Sess.) § 38.) (2b) "The rejection by the Legislature of a specific provision contained in an act as originally introduced is most persuasive to the conclusion that the act should not be construed to include the omitted provision. [Citations.]" (Rich v. State Board of Optometry (1965) 235 Cal. App.2d 591, 607 [45 Cal. Rptr. 512]; see also California Mfrs. Assn. v. Public Utilities 571 Com. (1979) 24 Cal.3d 836, 846 [157 Cal. Rptr. 676, 598 P.2d 836]; Madrid v. Justice Court (1975) 52 Cal. App.3d 819, 825 [125 Cal. Rptr. 348].) (1c) We must conclude the Legislature did not intend that the preponderance of the evidence standard would apply in interim order proceedings. Moreover, the Legislature was presumably aware of the decision in Ettinger v. Board of Medical Quality Assurance, supra, 135 Cal. App.3d 853 and enacted section 11529 in light thereof. (Stafford v. Realty Bond Service Corp. (1952) 39 Cal.2d 797, 805 [249 P.2d 241].) By expressly rejecting the preponderance of evidence standard, and by failing to prescribe a standard other than clear and convincing evidence, the Legislature presumably intended that the clear and convincing evidence standard should apply to section 11529 interim proceedings. For these reasons, we conclude the ALJ should have applied a clear and convincing evidence standard. III REMEDIES We need not address the parties' arguments regarding whether the evidence warrants suspension of Silva's license under the clear and convincing evidence standard of proof. Except in circumstances not present here, the role of an appellate court does not include making factual findings. "[W]e are not in position to assume that the [trier] would make the same findings under [section 11529] which it made using the preponderance of evidence test." (In re Terry D. (1978) 83 Cal. App.3d 890, 899 [148 Cal. Rptr. 221] [reversing judgment sustaining petition to declare children free from parental custody and control where trial court erroneously applied preponderance of evidence rather than clear and convincing evidence test]; see also Lillian F. v. Superior Court (1984) 160 Cal. App.3d 314, 317 [206 Cal. Rptr. 603] [issuing writ of mandate to compel trial court to apply clear and convincing rather than preponderance test without discussion whether evidence sufficient under more stringent test].) (3a) Moreover, we will not direct the respondent court to analyze the evidence under the clear and convincing evidence test. In Ettinger v. Board of Medical Quality Assurance, supra, 135 Cal. App.3d 853, the appellate court reversed the superior court's order denying a petition for writ of mandamus to review the Board's order suspending the physician's license. Ettinger recognized that the superior court's function on writ review of a medical license suspension proceeding is to analyze the evidence under the weight of 572 the evidence test set out in Code of Civil Procedure section 1094.5, subdivision (c), which is synonymous with the preponderance of the evidence test. (Id. at p. 858.) Hence, rather than directing the superior court to consider the evidence under the clear and convincing evidence test, which the superior court is not authorized to do, the appellate court ordered the issuance of the mandamus writ "directing the Board to reinstate the certificate here in issue until such time as it redetermines the cause." (Ibid.) This analysis was explained in Gardner v. Commission on Professional Competence (1985) 164 Cal. App.3d 1035 [210 Cal. Rptr. 795]. There, the appellate court rejected a fired teacher's contention that the administrative agency reviewing his termination should have applied the clear and convincing, rather than preponderance of evidence, standard of proof. (Id. at pp. 1038-1040.) In a footnote, the court explained: "We agree with Gardner that if the Commission had been required to apply the higher standard of proof, he would be entitled to a new hearing even though the superior court must employ the basic preponderance of the evidence test.... The findings of the agency come to the trial court, even in the `independent judgment' context `"with a strong presumption of their correctness ..."' [citations]. Therefore, an administrative agency is required to apply the proper standard of proof. (See Ettinger v. Board of Medical Quality Assurance, supra, 135 Cal. App.3d at p. 856.)" (Gardner v. Commission on Professional Competence, supra, 164 Cal. App.3d at p. 1039, fn. 2.) However, unlike the context of an accusation license suspension proceeding, as in Ettinger, here a specific statutory provision limits the remedies available to the reviewing court. Subdivision (h) of section 11529 provides in pertinent part: "The relief which may be ordered shall be limited to a stay of the interim order." Thus, we may not direct the respondent court to issue a writ of mandamus directing the Division or its ALJ to reconsider the evidence under the clear and convincing evidence test. (4) (See fn. 6.), (3b) We must, instead, order respondent court to stay the interim order.[6] 573 Because we conclude a stay of the interim order must issue, we need not address Silva's additional arguments regarding whether exigent circumstances are required for a section 11529 interim order, the existence of less onerous sanctions than interim suspension, whether the suspension order was a punitive abuse of discretion, and the extent of discovery authorized in a section 11529 proceeding. (5) Nor do we believe petitioner is entitled to an award of attorney fees under section 800. The ALJ's application of the preponderance of evidence standard was an error of law, but "erroneous interpretation of the law does not necessarily mean the [ALJ's] action was arbitrary or capricious." (Burdick v. Board of Retirement (1988) 200 Cal. App.3d 1248, 1256 [246 Cal. Rptr. 555].) We find nothing in the record to suggest the ALJ acted arbitrarily or out of caprice. (6a) Finally, assuming the Board's contention is correct that Silva's petition for writ of mandate was improperly verified because on information and belief (but see Fall River Joint Unified School Dist. v. Superior Court (1988) 206 Cal. App.3d 431, 436 [253 Cal. Rptr. 587]), nevertheless, on January 25, 1993, Silva filed a supplemental verification, without objection, which recites under penalty of perjury that the allegations of the petition are true of Silva's own knowledge. (7) "Mandamus is issued `to compel the performance of an act which the law specially enjoins....' (Code Civ. Proc., § 1085.) Although mandamus does not generally lie to control the exercise of judicial discretion, the writ will issue `where, under the facts, that discretion can be exercised in only one way.' (Babb v. Superior Court (1971) 3 Cal.3d 841, 851 [92 Cal. Rptr. 179, 479 P.2d 379]; Hurtado v. Superior Court (1974) 11 Cal.3d 574, 579 [114 Cal. Rptr. 106, 522 P.2d 666].)" (Robbins v. Superior Court (1985) 38 Cal.3d 199, 205 [211 Cal. Rptr. 398, 695 P.2d 695].) "Mandamus is appropriate `where there is not a plain, speedy, and adequate remedy, in the ordinary course of law.' Code Civ. Proc., § 1086." (6b) As it appears the respondent court intended no further action on the mandamus petition filed below, respondent's order denying the application for alternative writ of mandamus is appealable. (Covina-Azusa Fire Fighters Union v. City of Azusa (1978) 81 Cal. App.3d 48, 56-57 [146 Cal. Rptr. 155]; Kingston v. Dept. of Motor Vehicles (1969) 271 Cal. App.2d 549, 551-552 [76 Cal. Rptr. 614].) However, "when the remedy by appeal is rendered inadequate in the context of a specific case, this court may, in its discretion, *574 permit an aggrieved party to bypass the appellate process and pursue extraordinary relief." (California Trial Lawyers Assn. v. Superior Court (1986) 187 Cal. App.3d 575, 579 [231 Cal. Rptr. 725].) "`[T]he issues presented are of great public importance and must be resolved promptly[,]'" and we shall therefore exercise our original mandamus jurisdiction. (California Educational Facilities Authority v. Priest (1974) 12 Cal.3d 593, 598 [116 Cal. Rptr. 361, 526 P.2d 513], quoting County of Sacramento v. Hickman (1967) 66 Cal.2d 841, 845 [59 Cal. Rptr. 609, 428 P.2d 593]; see also Robbins v. Superior Court, supra, 38 Cal.3d at p. 205; Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 699-700 [166 Cal. Rptr. 331, 613 P.2d 579].) Having complied with the procedural requirements delineated in Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171 [203 Cal. Rptr. 626, 681 P.2d 893], we are authorized to issue a peremptory writ of mandate in the first instance. DISPOSITION Let a peremptory writ of mandate issue directing the respondent superior court to vacate its order of November 24, 1992, denying petitioner's application for temporary stay and issuance of an alternative writ, and to enter a new order issuing a stay of the underlying interim order pursuant to section 11529, subdivision (h). Upon this decision becoming final, the stay previously issued is vacated. Nicholson, J., and Raye, J., concurred. A petition for a rehearing was denied April 21, 1993, and the opinion was modified to read as printed above. The petition of real party in interest for review by the Supreme Court was denied June 10, 1993. NOTES [1] Further statutory references to sections of an undesignated code are to the Government Code. [2] Section 11529 provides in relevant part: "(a) The Division of Medical Quality and the California Board of Podiatric Medicine, and the administrative law judge as designated in subdivision (a) of Section 11371, sitting alone, may issue an interim order suspending a license, or imposing drug testing, continuing education, supervision of procedures, or other license restrictions. Interim orders may be issued only if the affidavits in support of the petition show that the licensee has engaged in, or is about to engage in, acts or omissions constituting a violation of the Medical Practice Act or the appropriate practice act governing each allied health profession, and that permitting the licensee to continue to engage in the profession for which the license was issued will endanger the public health, safety, or welfare. "(b) All orders authorized by this section shall be issued only after a hearing conducted pursuant to subdivision (d), unless it appears from the facts shown by affidavit that serious injury would result to the public before the matter can be heard on notice. Except as provided in subdivision (c), the licensee shall receive at least 15 days' prior notice of the hearing, which notice shall include affidavits and all other information in support of the order. "............................ "(d) For the purposes of the hearing conducted pursuant to this section, the licentiate shall, at a minimum, have the following rights: "(1) To be represented by counsel. "(2) To have a record made of the proceedings, copies of which may be obtained by the licentiate upon payment of any reasonable charges associated with the record. "(3) To call, examine, and cross-examine witnesses. "(4) To present and rebut evidence determined to be relevant. "(5) To present oral argument. "(e) The Division of Medical Quality shall hear any petition requesting an interim order and conduct the hearing pursuant to subdivision (d), or may, in its sole discretion, delegate any such matter to be heard by an administrative law judge as designated in subdivision (a) of Section 11371. "............................ "(g) Where an interim order is issued, a written decision shall be prepared within 15 days of the hearing, by the division or the administrative law judge as designated in subdivision (a) of Section 11371, or by the California Board of Podiatric Medicine including findings of fact and a conclusion articulating the connection between the evidence produced at the hearing and the decision reached. "(h) Notwithstanding the fact that interim orders issued pursuant to this section are not issued after a hearing as otherwise required by this chapter, interim orders so issued shall be subject to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure. The relief which may be ordered shall be limited to a stay of the interim order. Interim orders issued pursuant to this section are final interim orders and, if not dissolved pursuant to subdivision (c) or (f), may only be challenged administratively at the hearing on the accusation...." [3] Ettinger distinguished the public employee cases for two more reasons: "Additionally, the goals of the court in Skelly and those involved in the case at hand are fundamentally different. As was noted in Skelly, the civil service system attempts to abolish the political spoils system and promote the efficiency of state employees. [Citation.] These concerns are neither present nor relevant to the instant case. Further, state employees may be disciplined or terminated on grounds which would be insufficient to attack them in their licensed professions. [Citation.]" (Ettinger v. Board of Medical Quality Assurance, supra, 135 Cal. App.3d at p. 858.) [4] "Assistance in construing a statute can be obtained by reference to the legislative history or purpose of the statute." (People v. Yoshimura (1976) 62 Cal. App.3d 410, 415 [133 Cal. Rptr. 228]; see also People v. Superior Court (Guerrero) (1962) 199 Cal. App.2d 303, 310 [18 Cal. Rptr. 557].) [5] Silva requests judicial notice of a variety of legislative materials pertaining to the Medical Judicial Procedure Improvement Act. Although the Board has not objected to our taking judicial notice, we find the materials to have no relevance to the question of the standard of proof at a section 11529 proceeding, and therefore decline to take judicial notice of them. [6] The Board argues that we must defer to the respondent court's order denying the application for temporary stay because subdivisions (g) and (h) of Code of Civil Procedure section 1094.5 give the superior court discretion to deny a writ challenging administrative action where a stay is against public interest. Subdivision (h) does not apply to section 11529 proceedings because section 11529 does not provide for "a hearing required ... to be conducted under the provisions of the Administrative Procedure Act" (APA) (§ 11500 et seq.); although section 11529 is part of the APA, it provides for its own hearing procedures rather than the hearing procedures of the APA. (Cf. Medical Bd. of California v. Superior Court (1991) 227 Cal. App.3d 1458 [278 Cal. Rptr. 247] [issuing writ of mandate to overturn temporary stay of medical license revocation order, following accusation, because no showing that agency unlikely to prevail, as required by subd. (h)].) Moreover, subdivision (g) of Code of Civil Procedure section 1094.5 is inapplicable here because the respondent court's order did not merely deny a request for temporary stay but effectively denied Silva's mandamus petition in toto. Finally, it goes without saying that a trial court's discretion to deny a request for stay cannot take precedence over its mandatory duty to ensure that administrative agencies conduct proceedings in accordance with law; in this case, that is, under the clear and convincing evidence standard of proof.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347922/	192 Wis. 2d 305 (1995) 531 N.W.2d 369 STATE of Wisconsin, Plaintiff-Respondent, v. Michael G. DONNER, Defendant-Appellant.[] No. 94-0339-CR. Court of Appeals of Wisconsin. Submitted on briefs June 15, 1994. Decided March 1, 1995. 308 On behalf of the defendant-appellant, the cause was submitted on the briefs of Robert J. Vander Loop of Vander Loop Law Office of Oshkosh. On behalf of the plaintiff-respondent, the cause was submitted on the brief of John A. Jorgensen, assistant district attorney. Before Anderson, P.J., Nettesheim and Snyder, JJ. NETTESHEIM, J. Michael G. Donner appeals from a judgment of conviction for operating a motor vehicle while under the influence of an intoxicant pursuant to § 346.63(1)(a), STATS.[1] On appeal, Donner 309 raises four issues: (1) evidence of his refusal to submit to a blood test was improperly received into evidence, (2) the State improperly commented on his refusal to submit to the blood test, (3) an expert witness for the State was not qualified to give an opinion that all persons with a .09% blood alcohol concentration (BAC)[2] are physically impaired to some degree, and (4) a police officer improperly testified that he detected the odor of marijuana when he stopped Donner. We reject all of Donner's arguments and affirm the judgment of conviction. FACTS AND TRIAL COURT PROCEEDINGS The facts germane to the appellate issues are not disputed. On June 21, 1993, at approximately 2:00 a.m., City of Oshkosh police officer Steve Kaiser 310 noticed a motor vehicle straddling the center line of the roadway as it traveled north on South Main Street. Kaiser stopped the vehicle and detected the odor of intoxicants coming from inside the vehicle. Kaiser established that Donner was the driver of the vehicle. While Donner was performing field sobriety tests and answering further questions, Kaiser detected the odor of marijuana on Donner's breath. Kaiser then had Donner blow towards his face. Again the officer detected the odor of marijuana. After Donner was placed in Kaiser's squad car, the officer again smelled the odor of marijuana. Kaiser transported Donner to the city police department. There, Kaiser read to Donner an informing the accused form pursuant to the implied consent law, § 343.305, STATS. Donner submitted to an intoxilyzer test which produced a BAC reading of .09%. Kaiser then asked Donner to submit to a blood test. Donner refused. Despite Donner's refusal to submit to the blood test, the State did not pursue a revocation hearing pursuant to the implied consent law.[3] Prior to the commencement of the jury trial, Donner brought a motion in limine asking the trial court to preclude evidence of his refusal to submit to the blood test. In support, Donner argued that he had in fact complied with the implied consent law because he had submitted to the intoxilyzer test. The court rejected Donner's motion in limine, observing that § 343.305(3)(a), STATS., authorizes a law enforcement 311 officer to request one or more samples of a suspect's breath, blood or urine. In accord with the trial court's ruling, Kaiser was permitted to testify before the jury that Donner had refused the blood test, and the prosecutor was permitted to comment on that refusal during the closing argument. In addition, the trial court permitted Kaiser to testify that he smelled the odor of marijuana emanating from Donner. The court also permitted the State's expert on alcohol metabolism to testify that persons with a BAC of .09% are impaired to some extent. REFUSAL TO SUBMIT TO THE BLOOD TEST The trial court permitted Kaiser to testify that Donner refused to submit to the blood test. As a consequence, the State was permitted to argue this fact to the jury. Donner argues that the court's evidentiary ruling and the ensuing argument were reversible error. We address both of these issues in a single discussion. [1-3] Ordinarily, a trial court's decision to admit or exclude evidence is a discretionary determination. We will not upset the ruling on appeal if the court had a reasonable basis for the ruling and if it was made in accordance with accepted legal standards and in accordance with the facts of record. State v. Johnson, 181 Wis. 2d 470, 484, 510 N.W.2d 811, 815 (Ct. App. 1993). Here, however, the fundamental question is whether the trial court admitted the evidence of Donner's refusal in accord with the implied consent law. Thus, the inquiry is whether the court properly construed and applied the implied consent law to the facts of this case. This presents a question of law which we review independently of the trial court's ruling. See Chang v. 312 State Farm Mut. Auto. Ins. Co., 182 Wis. 2d 549, 560, 514 N.W.2d 399, 403 (1994). In the trial court, Donner argued, inter alia, that he was not obligated to submit to a blood test because he had already submitted to the intoxilyzer test.[4] However, as the trial court correctly noted, § 343.305(3)(a), STATS., expressly permits the law enforcement officer to request "one or more samples of [the suspect's] breath, blood or urine." (Emphasis added.) In addition, the statute states, "Compliance with a request for one type of sample does not bar a subsequent request for a different type of sample." Id. Moreover, § 343.305(2) provides that "[a]ny person who ... operates a motor vehicle upon the public highways of this state ... is deemed to have given consent to one or more tests of his or her breath, blood or urine." (Emphasis added.) [4] We therefore conclude that the implied consent law permitted Kaiser to request Donner to submit to a further test. Donner next argues that the State's failure to pursue a revocation hearing pursuant to the implied consent law barred the State from using the refusal evidence in this case. Again, we disagree. This court stated in State v. Algaier, 165 Wis. 2d 515, 478 N.W.2d 292 (Ct. App. 1991): In State v. Bolstad, 124 Wis. 2d 576, 370 N.W.2d 257 (1985), the supreme court held that evidence of a refusal to submit to a chemical test was admissible in an OAWI trial. The court ruled "[t]hat refusal evidence is relevant, because it makes more probable the crucial fact of intoxication, 313 because ... [a] reasonable inference from refusal to take a mandatory [blood alcohol] test is consciousness of guilt." Algaier, 165 Wis. 2d at 518, 478 N.W.2d at 293 (quoted source omitted). However, in State v. Zielke, 137 Wis. 2d 39, 403 N.W.2d 427 (1987), the supreme court cautioned that: The same due process considerations operating in Crandall lead this court to conclude that the fact of refusal cannot be used in a subsequent trial involving operating a motor vehicle while intoxicated if the defendant has not been duly advised under [the implied consent law] .... Thus, to obtain the benefit of using refusal evidence in the criminal prosecution for the substantive offense involving intoxicated use of a vehicle, police must provide the warnings set forth in sec. 343.305. Zielke, 137 Wis. 2d at 50-51, 403 N.W.2d at 432. Here, the State admittedly did not pursue a formal revocation hearing under the implied consent law. However, the evidence establishes that Kaiser advised Donner of the implied consent law using an informing the accused from. Donner raises no appellate claim that he was not properly advised under the implied consent law. [5] The crux of the supreme court's due process ruling in Zielke is that a suspect must be properly informed under the implied consent law before evidence of a refusal may be admitted at the subsequent trial. Zielke, however, does not hold that the inquiry must necessarily be conducted within the context of a formal revocation hearing under the implied consent law. 314 [6] Here, the question of whether Donner was properly informed under the implied consent law was explored both at the motion in limine hearing and during the trial. Thus, Donner received the equivalent of an implied consent hearing within the context of the pretrial and trial proceedings. As such, Donner was accorded the protections guaranteed by Zielke before evidence of his refusal was used against him.[5] Therefore, pursuant to Bolstad, the trial court properly admitted evidence of Donner's refusals.[6] 315 EXPERT TESTIMONY ON IMPAIRMENT Donner argues that the trial court improperly qualified Mary MacMurray, a chemist employed by the Wisconsin Department of Transportation (DOT), as an expert witness in the field of alcohol metabolism. Alternatively, Donner argues that even if properly qualified, MacMurray went beyond the bounds of her expertise when giving her opinion. MacMurray testified that all persons are physically impaired to some extent at a BAC level of .09%.[7] Donner begins his discussion of this issue with an analysis of the United States Supreme Court's recent decision in Daubert v. Merrel Dow Pharmaceuticals, Inc., 509 U.S. , 113 S. Ct. 2786 (1993). Prior to Daubert, the rule for admissibility of scientific evidence in the federal courts was the so-called "general acceptance" test set out in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923). This test required that the proffered scientific evidence must "have gained general acceptance in the particular field in which it belongs." Daubert, 509 U.S. at , 113 S. Ct. at 2793 (quoting Frye, 293 F. at 1014). In Daubert, the Court held that "the Frye test was superseded by the adoption of the Federal Rules of Evidence." Daubert, 509 U.S. at , 113 S. Ct. at 2793. Thus, the Court held that Rule 702 of the Federal Rules 316 governing scientific evidence did not include the Frye threshold requirement for "general acceptance." Daubert, 509 U.S. at ,113 S. Ct. at 2794. Instead, the Court held that Rule 702 required only that such evidence must: (1) be scientific knowledge, and (2) assist the trier of fact to understand or determine a fact in issue. Daubert, 509 U.S. at , 113 S. Ct. at 2795-96. To assure that this more relaxed standard is not abused, Daubert envisions a more active role for the trial court in preliminarily assessing the witness and the evidence. See id. at , 113 S. Ct. at 2796-98; see also Daniel Blinka, Scientific Evidence in Wisconsin After Daubert, WIS. LAW., Nov. 1993, at 10, 12-13. Donner urges that we adopt Daubert. [7] However, before Daubert, the Frye test was not the law in Wisconsin. See State v. Walstad, 119 Wis. 2d 483, 518-19, 351 N.W.2d 469, 486-87 (1984). To that extent, Wisconsin law and Daubert coincide. Blinka, supra, at 12. Beyond that, Wisconsin law holds that "[a]ny relevant conclusions which are supported by a qualified witness should be received unless there are other reasons for exclusion." Walstad, 119 Wis. 2d at 518, 351 N.W.2d at 487 (quoted source omitted). Stated otherwise, expert testimony is admissible in Wisconsin if relevant and will be excluded only if the testimony is superfluous or a waste of time. Id. at 516, 351 N.W.2d at 486. [8] Assuming that Daubert in its application represents something beyond Walstad, we observe that we are principally an error-correcting court and we are bound to follow our supreme court case law. See State v. McMahon, 186 Wis. 2d 68, 92, 519 N.W.2d 621, 631 (Ct. App. 1994). Walstad is the Wisconsin law on this point. 317 Therefore, we address Donner's appellate issue under Walstad and related cases. [9, 10] The question of an expert witness's qualifications is a matter resting in the sound discretion of the circuit court, and unless it is shown that the court misused its discretion, its ruling will stand. State v. Robinson, 146 Wis. 2d 315, 332, 431 N.W.2d 165, 171 (1988). If the witness is qualified, Walstad next requires that the evidence itself be relevant. Walstad, 119 Wis. 2d at 516-19, 351 N.W.2d at 485-87. Relevancy is satisfied if the evidence assists the trier of fact in understanding the evidence or a fact in issue. See § 904.01, STATS.; see also State v. Pittman, 174 Wis. 2d 255, 267, 496 N.W.2d 74, 79, cert. denied, 510 U.S. , 114 S. Ct. 137 (1993). The State presented MacMurray as an expert witness in the area of alcohol metabolism. After the trial court ruled that she qualified as an expert witness, she was permitted to testify that all persons are impaired to a varying degree at a BAC level of .09%. We first summarize MacMurray's training and experience. At the time of her testimony, she had been employed as a chemist with the DOT for seven and onehalf years. In addition to her undergraduate training, MacMurray had received extensive training and education in the area of BAC testing, particularly as it related to impairment studies. She had previously testified as an expert witness regarding alcohol metabolism. Most importantly, MacMurray had conducted and participated in "dosing" experiments in which alcoholfree persons ingest volumes of alcohol and the degree of their resulting impairment is then noted. MacMurray performs these experiments in her role as an instructor of standardized field sobriety tests for the DOT. 318 Based on this evidence, the trial court determined that MacMurray was properly qualified as an expert witness and permitted her to opine that persons with a BAC of .09% are impaired to some degree. We uphold the court's ruling. MacMurray's substantial experience in the area of alcohol metabolism together with her "dosing" experiments offered the court a solid basis upon which to recognize MacMurray as an expert and to allow her "impairment" opinion.[8] Donner contends, however, that MacMurray's testimony ran afoul of State v. Bailey, 54 Wis. 2d 679, 196 N.W.2d 664 (1972). There, the supreme court held that a chemist was properly barred from testifying as to the effect of a .23% BAC. The supreme court held that the question was beyond the range of the chemist's expertise because the chemist "acknowledged that he had never observed the donors of blood from whom the blood alcohol samples were taken." Id. at 684-85, 196 N.W.2d at 667. Here, there is no such void in MacMurray's experience. Unlike the chemist in Bailey, MacMurray testified to her substantial experience and observations regarding persons who had participated in the "dosing" experiments. We see Bailey as supporting, rather than damaging, the trial court's ruling in this case. We also see Robinson as on point. There, a worker from a rape crisis center was properly qualified as an expert witness. Robinson, 146 Wis. 2d at 333, 431 N.W.2d at 171. Based on that experience, the witness was permitted to testify regarding the emotional reactions 319 of sexual assault victims generally. Id. at 333, 431 N.W.2d at 172. However, the witness did not offer any specific inferences or opinions about the complainant. Id. The supreme court held that the testimony was properly admitted in light of the defendant's suggestion to the jury that the victim, when reporting the assault, had acted in a manner inconsistent with a recent sexual assault. Id. at 335, 431 N.W.2d at 172.[9] [11] Here, MacMurray's opinion testimony was generic as to all persons. It was not specific as to Donner. In addition, MacMurray acknowledged that the degree of impairment might vary with a person's drinking experience. We conclude that the trial court properly exercised its discretion when admitting MacMurray's expert opinion testimony. EVIDENCE OF THE ODOR OF MARIJUANA The trial court permitted Kaiser to testify that he detected the odor of marijuana on Donner's breath. Donner contends that this was error because he had been smoking cigars shortly before he encountered the 320 officer.[10] Donner reasons that Kaiser mistook the odor of cigar smoke for that of marijuana. Thus, he concludes that the jury was permitted to base its guilty verdict "on an incredibly uncertain inference." We construe Donner's appellate argument to raise two issues: (1) the trial court erred by admitting the evidence; and (2) if properly admitted, the evidence was insufficient to sustain the conviction. [12] We do not address this issue on the merits. As we observed in the opening footnote, § 346.63(1)(a), STATS., creates three instances of illegal operation while under the influence: (1) under the influence of an intoxicant, (2) under the influence of a controlled substance, and (3) under the influence of a combination of both an intoxicant and a controlled substance. Here, the State charged Donner in a one-count complaint with the three discrete offenses contemplated by § 346.63(1)(a). The verdict echoed this charge in a single question. Donner never raised any objection that the complaint was potentially duplicitous because it joined two or more distinct offenses in a single count. See State v. Seymour, 183 Wis. 2d 683, 693 n.8, 515 N.W.2d 874, 879 (1994). [13] However, the judgment of conviction recites a conviction only for Donner's operation of a motor vehicle while intoxicated. Donner raises no argument regarding the sufficiency of the evidence to support the conviction recited in the judgmentoperating while under the influence of an intoxicant. Nor does Donner argue that the admission of evidence pertaining to the 321 odor of marijuana taints the evidence supporting the conviction for operating while intoxicated. Thus, even if we assume that the admission of Kaiser's testimony was error, or if we alternatively assume that the evidence would not support a conviction for operating while under the influence of a controlled substance, the error does not affect the offense for which Donner stands convicted. By the Court.Judgment affirmed. NOTES [] Petition to review denied. [1] Donner was charged in a single count complaint with a violation of § 346.63(1)(a), STATS. This statute prohibits the operation of a motor vehicle in three situations: (1) while under the influence of an intoxicant, (2) while under the influence of a, controlled substance, and (3) while under the influence of a combination of an intoxicant and a controlled substance. Here, the complaint charged in a single count all three situations of operating while under the influence. Tracking the complaint, the verdict inquired in a single question whether Donner was guilty or not guilty of operating a motor vehicle while under the influence of an intoxicant or a controlled substance or both. Donner never contended that the complaint was duplicitous by joining two or more distinct and separate offenses in a single count. See State v. Seymour, 183 Wis. 2d 683, 693 n.8, 515 N.W.2d 874, 879 (1994). However, the judgment of conviction recites a conviction for only operating while intoxicated. [2] In the trial court, the parties sometimes represented that Donner's BAC reading was .08%; at other times, they represented that it was .09%. This confusion persists in the parties' briefs on appeal. We use the .09% figure because that was the testimony of the officer who administered the test. [3] The State explained that it did not pursue the implied consent revocation hearing against Donner because the necessary paper work was not completed. However, Kaiser also testified that he was not certain whether Donner had refused the test within the meaning of the implied consent law because he had submitted to the intoxilyzer test. [4] Donner does not expressly renew this issue on appeal. We address it nonetheless since the general issue before us is the application of the implied consent law to the facts. [5] The procedure in this case afforded Donner not only the protections of an implied consent hearing, but also shielded him from the perils of such a proceeding, to wit, revocation of his operating privileges. See § 343.305(10), STATS. [6] Donner raises two collateral issues. First, Donner appears to argue that because the intoxilyzer breath test detects only evidence of intoxicants, it was unfair for the trial court to permit evidence of his refusal regarding the blood test which detects for evidence of both intoxicants and controlled substances. We are not entirely clear as to the basis for this argument. We think that Donner is contending that Kaiser was obligated to ask for the blood test first. If that is the argument, we see nothing in the implied consent law which obligates the officer in an "overlap" situation such as this to select an initial test which might detect both suspected conditions. If that is not Donner's argument, we do not know what it is. Second, Donner contends that Kaiser did not have a reasonable suspicion within the meaning of State v. Seibel, 163 Wis. 2d 164, 179, 471 N.W.2d 226, 233, cert. denied, 502 U.S. 986 (1991), to request a blood test. After citing Seibel, Donner's argument on this point is limited to one general sentence. We may decline to review issues inadequately briefed. State v. Pettit, 171 Wis. 2d 627, 646, 492 N.W.2d 633, 642 (Ct. App. 1992). We deem the issue inadequately briefed. [7] Since Donner's BAC reading was below the statutorily prohibited level, the State did not charge Donner with operating a motor vehicle with a prohibited blood alcohol concentration pursuant to § 346.63(1)(b), STATS. Instead, the State charged the more "generic" offense of operating while under the influence of an intoxicant or controlled substance pursuant to subsec. (1)(a) of the statute. MacMurray's "impairment" testimony was presented in support of the State's claim that Donner was under the influence within the meaning of this subsection. [8] The criticisms which Donner levels at MacMurray's testimony (that is, her experiments were not published nor subjected to peer review) go to the weight and credibility of her testimonynot its threshold admissibility. [9] It is not clear from the Robinson decision whether the disputed evidence was admitted as part of the State's case-in-chief or as rebuttal evidence. Here, although MacMurray's evidence was part of the State's case-in-chief, it was offered, at least in part, as a response to Donner's contention that he was not intoxicateda matter already suggested by his prior cross-examination of Kaiser. MacMurray's testimony was also responsive to Donner's opening statement to the jury which stressed that his BAC did not satisfy the statutory level for intoxication. [10] Actually, the evidence does not directly show that Donner had been smoking cigars. Rather, the evidence shows that Donner told Kaiser he had been smoking cigars.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347928/	446 S.E.2d 451 (1994) Caleb Daniel HUGHES v. COMMONWEALTH of Virginia. Record No. 1135-91-4. Court of Appeals of Virginia. June 21, 1994. 453 Peter D. Greenspun (Gary Moliken, Peter D. Greenspun & Associates, P.C., on brief), for appellant. Eugene Murphy, Asst. Atty. Gen. (Stephen D. Rosenthal, Atty. Gen., on briefs), for appellee. Present: MOON, C.J., and BAKER, BARROW, BENTON, COLEMAN, KOONTZ, WILLIS, ELDER and BRAY, JJ. 452 UPON REHEARING EN BANC. MOON, Chief Judge. Caleb Daniel Hughes was convicted of the abduction with the intent to defile of a five-year-old female child who disappeared from a Christmas party in 1989 and has never been found. We granted a rehearing en banc from a panel decision holding that the evidence was sufficient to prove abduction but insufficient to prove the intent to defile. Hughes v. Commonwealth, 16 Va.App. 576, 431 S.E.2d 906 (1993). On rehearing, Hughes contends: (1) the evidence was insufficient to support a finding that he abducted the child with the intent to defile her; (2) the trial court erred in admitting evidence that clothing fibers found in the appellant's car were similar to fibers in the child's clothing and her mother's clothing; (3) the trial court erred in admitting fibers found in the carpet of the appellant's car that were similar to fibers in the child's home; (4) the trial court erred in admitting Hughes's pre-arrest statements to the police; (5) the Commonwealth failed to comply with a discovery order to turn over to Hughes certain exculpatory statements made by witnesses to the police; and (6) the trial court erred in refusing to grant a new trial based upon after-discovered evidence. We find that the clothing fiber evidence and the statements made by the appellant to police were admissible for the reasons set forth in the panel's decision. Hughes, 16 Va.App. at 587-90, 431 S.E.2d at 914-15. We find that the carpet fiber evidence, which the panel majority held to be inadmissible, was admissible for the reasons set forth in Judge Coleman's concurring and dissenting opinion. Id. at 602-04, 431 S.E.2d at 921-23. For the reasons stated in the panel's majority opinion, we hold that the evidence was sufficient to prove that the appellant abducted the female child victim. See id. at 580-85, 431 S.E.2d at 910-12. However, contrary to the panel's majority opinion, we hold that the evidence was sufficient to prove that appellant abducted the female child with the intent to defile her. We further hold that the Brady[1] material that the Commonwealth failed to produce before trial probably would not have brought about a different trial result had it been produced and that the purportedly newly discovered evidence likewise probably would not have produced a different trial result. For these reasons, we affirm the judgment of the trial court. I. FACTS The five-year-old victim, who was shy and afraid of strangers, arrived with her mother at a Christmas party in their apartment complex club room on a bitterly cold evening between 7:15 and 7:30 p.m. on December 3, 1989. As many as 115 people may have attended the party at various times. The 454 child disappeared at about 10:00 p.m. and remains missing to this day. The appellant arrived at the same party at about 7:30 p.m. He had been working at the apartment complex for several weeks as a groundskeeper. He had no work duties at the party but was invited by the apartment complex assistant manager. The child's mother first noticed appellant when she was sitting at a table and saw him staring at her. She had never previously met appellant. Later that evening, the appellant came to the table where the child, her mother, and another woman were sitting. He stayed about thirty minutes. During the stay, the appellant asked the mother whether the child was her daughter, if she was an only child, and how old she was. He also commented that her daughter was pretty. One witness stated that appellant had the child on his lap. When the child asked her mother for a brownie, the appellant went to the bar and brought a cupcake back to her. While the child was playing nearby, she came back to the table a "couple of times" and appellant spoke to her each time. During the evening, the child played with three other children in a corridor adjacent to the main party room. The corridor contained doors to a coat room, the women's and men's restrooms, and a door to the utility room. Later in the evening, the child's mother took the child and two small boys to the bathroom. The appellant, who was coming out of the men's room, asked the child's mother if she wanted him to take the children to the bathroom for her. The mother refused the offer. Except when he was at the table where the child and her mother were seated, appellant stood at the bar nearly the entire evening. At one point, appellant told the apartment complex manager, Lori Keefer, and resident manager, Leslie Moore, that he was "going to get real drunk." When Keefer asked appellant to run an errand during the party, he replied, "I'm not going unless you go." Appellant also remarked to another male guest, whom he had just met, that there were "nice looking women" at the party and that he would "like to go to bed with them." Appellant also boasted of his marital infidelity, stating, "what she doesn't know won't hurt her." He also asked a woman whom he had just met to go dancing with him that evening. The woman declined the offer. At about 10:00 p.m., the child's mother told her that it was time to leave the party. The child went to the coat rack and put on her jacket. She then asked her mother whether the child could get some potato chips before leaving, and her mother agreed. The mother watched her daughter go toward the table where the potato chips were located. She saw appellant approach and speak to the child, but the child ignored him. The appellant continued walking down the ramp which led from the party room to the exit doors. The mother saw the child pick up the chips, put them on a plate, and start back up the ramp toward her mother. When the child was half way across the room, the mother and the child smiled at each other. The mother then saw appellant kneel down on the ramp as the child walked by. The child kept walking past appellant, so appellant stood and walked back down the ramp toward the bar. The mother then turned to get her coat and to say goodbye to her friends. They exchanged a few words, and when the mother looked up, she saw neither the child nor appellant. She first looked for the child in both the women's and men's bathrooms but could not find her. She then discovered the door to the utility room was unlocked. She looked in the room and discovered that a full-length window, which had been closed earlier that evening, was cranked wide open. The window was large enough that someone could have stepped through it onto the ground outside. The mother then began to scream that her daughter was missing, and a search for the child began. The managers of the apartment complex called the police and also tried to contact everyone who had been at the party to determine whether anyone had seen the child. Other apartment complex employees tried to reach appellant several times during the following two and one-half to three hours. A police officer called the appellant's home shortly before 11:00 p.m., and an assistant manager also called the appellant's home at about 10:30 p.m., 11:00 p.m., and again at 455 12:30 a.m. Neither caller was able to reach him; both spoke only to the appellant's wife. At about 12:30 a.m., a Fairfax County police officer went to the appellant's home. The officer did not see the appellant's car, a maroon Honda, at the time. The appellant's wife testified that appellant came into their bedroom at approximately 12:20 a.m. She was "very upset" and told him of the numerous inquiries as to his whereabouts. Instead of returning the telephone calls to the police and apartment manager immediately, appellant first took a shower. The appellant's wife said that she heard the clothes dryer running about this time and that it was making a lot of noise because the appellant's sneakers were in it. She said that it was not unusual for the appellant to do his laundry late at night. At about 1:00 a.m., the appellant called the clubhouse from his home. Appellant spoke with the police officer who was coordinating the search for the child. At first, according to the officer, "he [appellant] was very agitated, very upset that the police were bothering his wife and why we were calling. He couldn't understand why we were calling his house." The officer explained that a small child who had attended the party was missing and they were attempting to contact everyone who had been at the party to see if anyone could help in any way to locate the child. The officer described the child to the appellant. The appellant said that he did not know the child and had not spoken to her. The appellant told the officer that he had left the party about ten minutes after ten o'clock and had slowly driven home. When asked if he had stopped on the way home, the appellant said that he had not stopped but had taken the long way home. The distance from the clubhouse to the appellant's home, using the route described by the appellant, was 9.7 miles. A police officer testified that the appellant's wife told him that her car had been driven fifty-one miles between the time she let her husband drive it to the party and the time when she drove it to work the next morning. After the officer asked appellant several times why it had taken him so long to get home, the appellant finally said that he stopped at High's convenience store near his home to buy some beer. When the officer asked what he did for the rest of the time, the appellant did not reply. The following morning, the police went to appellant's home and found the clothes he wore the previous evening to the party, along with his sneakers, in his dryer. The sneakers were examined and tested. Police found the sneakers cut and gouged along the side of the shoes "by a single blade tool, such as a knife." Although the expert's opinions were conflicting concerning stains on one of the shoes, one expert said that tests revealed that the stains were a human serum protein that he believed came from human blood. The following morning, appellant's wife drove to work the car that he had used the previous night. The police went to her workplace and received permission to take her car in order to examine it. The police searched the automobile, where they found human hairs, carpet fibers, and clothing fibers. The hair and fibers were similar to hair and carpet fiber found at the child's home. The clothing fibers were similar to fibers found in clothing identified as being like the clothing the child had worn the night she disappeared. In the back seat of the appellant's car, the police found a six-pack of beer which had not been in the car the previous evening when the appellant's wife had driven it. Later that day, the police telephoned the appellant and asked him to come to the police station. The appellant agreed to do so if his wife could come with him and if the police would transport them to the police station because the police had his car. A police officer picked up the appellant and his wife and drove them to the station. At the station, the appellant took a polygraph examination. The officer performing the examination informed the appellant that he was not under arrest, that he did not have to take the polygraph test, and that he was free to leave at any time. Accordingly, the appellant was not advised of the Miranda rights. During the pre-test interview, the appellant asked the officer, "Did you find any blood on my clothes or in the car; am I guilty yet?" When asked about the cuts on his sneakers, the appellant responded, "I 456 don't know what you are talking about. You must have cut the sneakers." When a police officer accused the appellant of abducting the child, the appellant said, "Prove it." A human hair with the same microscopic characteristics as fine hairs found on a hairbrush the child used was found on the floor mat of the driver's side of appellant's car. An expert testified that the hair could not, however, be identified as the child's hair to the exclusion of anyone else, unlike fingerprint identification. Two dyed rabbit hairs were found on the passenger's seat of the appellant's car. They were microscopically consistent with, and contained the same dye components as the rabbit hairs in a coat the child's mother wore to the party and the rabbit hairs found on one of the child's nightshirts. A comparison of the rabbit hairs in the car and those from the mother's rabbit fur coat, using thin-layer chromatography, revealed no differences between the dye components used to color the hairs. Immediately before the child disappeared, she had put on her coat. Underneath the coat, the child wore a blue sweater with a Big Bird emblem on the chest. About fifty blue acrylic clothing fibers were found on the passenger's seat and one blue acrylic clothing fiber was found on the driver side of the appellant's car. These fibers were microscopically consistent with blue acrylic fibers found on the blazer worn by the child's mother to the party, blue acrylic fibers found on a hairbrush used by the child, and blue acrylic fibers found on one of the child's coats. The police obtained a duplicate of the outfit worn by the child on the evening she disappeared, the sweater and a red plaid skirt. The duplicate outfit had been purchased from the J.C. Penney catalog at about the same time the child's grandmother had ordered the child's outfit from J.C. Penney. The blue fibers found on the passenger's seat and driver's seat of the appellant's car were microscopically consistent with those in the duplicate outfit. In addition, the chemical composition of the fibers found in the car matched that of the fibers taken from the duplicate outfit. An expert testified that, in his opinion, the blue acrylic fibers found on the child's coat, the child's hairbrush, the mother's blazer, and the front seat of the appellant's automobile "could have originated from" a sweater outfit like the duplicate outfit. An expert also testified that a primary transfer of fibers from the child's sweater to the passenger seat of appellant's car had occurred. Primary transfer occurs when two surfaces come in direct contact. Secondary transfer occurs when a hair or fiber adheres to a different surface before being transferred to a third surface. Ten red cotton fibers microscopically consistent with and matching red fibers in the skirt of the duplicate outfit were found on the passenger side of the appellant's car. An almost colorless trilobal carpet fiber found in appellant's car was determined to be microscopically consistent with a carpet fiber taken from the child's nightshirt. An expert testified that these fibers "could have originated from the same source." II. SUFFICIENCY OF THE EVIDENCE TO CONVICT APPELLANT OF ABDUCTION WITH INTENT TO DEFILE We agree with the panel majority for the reasons stated in its opinion that the evidence supports the finding that the appellant abducted the female child. We now decide whether the evidence was sufficient to support the jury's finding that appellant had an intent to defile her. On appeal, the evidence must be viewed in the light most favorable to the Commonwealth and accorded all reasonable inferences to support a criminal conviction. Higginbotham v. Commonwealth, 216 Va. 349, 352, 218 S.E.2d 534, 537 (1975). The jury's verdict should not be set aside unless it is "plainly wrong or without evidence to support it." Id.; see Code § 8.01-680. Although the evidence in this case is entirely circumstantial, circumstantial evidence alone is sufficient to support a conviction. Johnson v. Commonwealth, 2 Va.App. 598, 604-05, 347 S.E.2d 163, 167 (1986). 457 All necessary circumstances proved must be consistent with guilt and inconsistent with innocence; they must exclude every reasonable hypothesis of innocence; the chain of these circumstances must be unbroken; and the "circumstances of motive, time, place, means, and conduct must all concur to form an unbroken chain" linking the appellant to the crime beyond a reasonable doubt. Bishop v. Commonwealth, 227 Va. 164, 169, 313 S.E.2d 390, 393 (1984). Not all circumstances must be proved beyond a reasonable doubt, but the circumstances that are proved must concur in pointing to the appellant's guilt beyond a reasonable doubt. See Stevens v. Commonwealth, 8 Va.App. 117, 118, 379 S.E.2d 469, 470-71 (1989). The Commonwealth was required to prove that the appellant "by force, intimidation or deception, and without legal justification or excuse," seized, took, transported, detained, or secreted the missing child with intent to deprive her of her personal liberty or to withhold or conceal her "from any person, authority or institution lawfully entitled to [her] charge." Code § 18.2-47; see Coram v. Commonwealth, 3 Va.App. 623, 625, 352 S.E.2d 532, 533 (1987). Further, in order for the Commonwealth to prove that the abduction was with the intent to defile, it had to prove that the appellant abducted the child with the specific intent to sexually molest her. Simms v. Commonwealth, 2 Va.App. 614, 617, 346 S.E.2d 734, 735 (1986). "Intent is the purpose formed in a person's mind which may, and often must, be inferred from the facts and circumstances in a particular case." David v. Commonwealth, 2 Va.App. 1, 3, 340 S.E.2d 576, 577 (1986) (quoting Ridley v. Commonwealth, 219 Va. 834, 836, 252 S.E.2d 313, 314 (1979)). The state of mind of an accused may be shown by his conduct and by his statements. Long v. Commonwealth, 8 Va.App. 194, 198, 379 S.E.2d 473, 476 (1989). However, where an offense consists of an act combined with a particular intent, the intent must be established as a matter of fact, and "[s]urmise and speculation as to the existence of the intent are not sufficient." Dixon v. Commonwealth, 197 Va. 380, 382, 89 S.E.2d 344, 345 (1955). "[T]he question of [appellant's] intent must be determined from the outward manifestation of his actions leading to usual and natural results, under the peculiar facts and circumstances disclosed. This determination presents a factual question which lies peculiarly within the province of the jury." Ingram v. Commonwealth, 192 Va. 794, 801-802, 66 S.E.2d 846, 849 (1951). "[T]he [jury] may consider the conduct of the person involved and all the circumstances revealed by the evidence." Wynn v. Commonwealth, 5 Va.App. 283, 292, 362 S.E.2d 193, 198 (1987). Indeed, "[t]he specific intent in the person's mind may, and often must, be inferred from that person's conduct and statements." Martin v. Commonwealth, 13 Va.App. 524, 527, 414 S.E.2d 401, 402 (1992) (citing Hargrave v. Commonwealth, 214 Va. 436, 437, 201 S.E.2d 597, 598 (1974)). While the circumstantial evidence, particularly the fiber and hair evidence, proves beyond a reasonable doubt that the appellant abducted the child, the circumstances surrounding the child's disappearance, the fact that she has not been found, and the conduct of the appellant both before and after the child's disappearance support the conclusion that he abducted the child with the intent to defile her and thereafter disposed of her in an effort to avoid detection. See Epperly v. Commonwealth, 224 Va. 214, 294 S.E.2d 882 (1982). From the evidence, the jury readily and reasonably could have concluded the following: The missing child disappeared from the Christmas party at approximately the same time as the appellant. The appellant paid an inordinate amount of attention to the child up until the moment of her disappearance. Even though appellant lived slightly less than ten miles from the apartment complex he drove about fifty miles before arriving at home and did not arrive home until two and one-half to three hours after he left the party. When he finally arrived home some time after 12:30 a.m., and his wife told him of the calls from the police and apartment manager inquiring about his whereabouts, appellant became agitated about the calls. Before returning the calls, he washed the clothes and sneakers he was wearing in 458 the washing machine, and he then took a shower. When appellant returned the police officer's calls and spoke with an officer, he expressed annoyance that the officers called, and he deceitfully denied any knowledge of the child. He denied that he drove other than a direct route home and said he stopped only to buy beer. Although appellant offered evidence that washing his clothes late at night was not unusual, the jury could have reasonably inferred that it was highly unusual that he would wash his sneakers and his clothes at that late hour. Also, the jury was entitled to consider the fact that after the appellant washed his sneakers, an examination of them revealed a gouge mark caused by a sharp edge instrument and an analysis showed a trace of human protein believed to have come from human blood. Furthermore, the jury could find it unusual that, although appellant was very agitated about calls from the police to his home regarding the missing child, he showered before calling the clubhouse at 1:00 a.m., at which time he protested the calls. Appellant denied knowing the child, lied about his activities after her disappearance, and blamed the police for cutting his sneakers.[2] These are factors from which the jury could infer that appellant was concealing his guilt. See Speight v. Commonwealth, 4 Va.App. 83, 88, 354 S.E.2d 95, 98 (1987). Similarly, appellant's questions to the police, "Did you find any blood on my clothes or in the car; am I guilty yet," would allow the jury to infer that appellant was worried that the child's blood might be on his clothes. The fiber evidence found in the appellant's vehicle strongly supports the finding that the appellant abducted the child, and also, because of the clothing from which it came, tends to show that the abduction was with the intent to defile. The combination of so many different fibers associated with the child, along with appellant's actions before and after the child's disappearance, was sufficient for a rational finder of fact to believe beyond a reasonable doubt that the fibers were from the child's clothing. It stretches credulity too far to explain, as a mere coincidence, the combination of so many fibers related to the child being in the car without her ever having been there. Furthermore, the abduction occurred on a bitterly cold evening, and it would have been unusual for the child to have taken her coat off under normal circumstances. Thus, the presence of the child's clothing fiber, clothing other than the coat she wore, gave rise to a permissible inference that her coat had been removed for some purpose. In Ingram v. Commonwealth, 192 Va. 794, 66 S.E.2d 846 (1951) the Supreme Court of Virginia found that the intent to rape could be inferred from an assault upon a woman, although the assailant made no sexually evocative statements or acts to suggest the intent to rape. The Court held that no hypothesis other than attempted rape was conceivable under the circumstances. Id. at 803, 66 S.E.2d at 851. Significantly, the Court found that the evidence negated any attempt by the accused to commit murder, arson, robbery, or mere assault and battery and held that the 459 more natural and probable motive for an attack by a man of a lone woman at night was sexual in nature. In this case, we find the circumstances even more compelling than those in Ingram. A five-year-old female child is abducted by a male stranger. No effort is made at ransom and theft. Robbery, parental abduction, or personal animosity are excluded as motives. The only natural and reasonable explanation that flows from the evidence is that the abduction was for sexual reasons. Furthermore, the appellant's intense interest in sexual matters that evening at the Christmas party shows his state of mind. The Commonwealth had the burden of excluding the reasonable hypotheses that the appellant abducted the child for a reason other than with the intent to defile her. The hypothesis that the abduction was with intent to defile must be one that reasonably and naturally follows from the evidence presented. However, the hypotheses that must be excluded are those that reasonably flow from the evidence and not from the imagination of defendant's counsel. Turner v. Commonwealth, 218 Va. 141, 148, 235 S.E.2d 357, 361 (1977). Appellant argues that even if the evidence were sufficient to prove that he abducted the child, the Commonwealth has failed to exclude as a reasonable hypothesis that he may have (1) abducted the child because he liked children, found the child in his car, panicked, and then disposed of the child out of fear, (2) that he abducted the child for a childless couple, (3) that he abducted the child for ransom, (4) that he abducted the child for the child's father, or (5) that he abducted the child just to murder the child. We hold a rational finder of fact could have found all of these hypotheses to have been excluded by the evidence. If appellant "liked" children in the normal, instead perverse sense, that does not explain why he abducted and disposed of the child in some manner that must have been most cruel and traumatic for the child. All of his actions make such an hypothesis ludicrous. The jury could have readily concluded that appellant did not like the child in a normal sense if he abducted the child and never returned her to her mother. Indeed, appellant's annoyance, instead of concern, when told the child was missing and his denial of having spoken to or even having seen the child, are inconsistent with the contention that appellant paid excessive attention to or abducted the child due to an innocent fondness of children. Regarding the hypotheses that he might have kidnapped the child to give her to a childless couple, kidnapped her for ransom, or kidnapped her for her father, abduction for such purposes usually entails some preplanning, as opposed to a spontaneous and opportunistic action. Appellant's words and actions on the night of the abduction do not suggest any preplanning. He expressed a desire to get drunk that night and tried to pick up two women. He commented at the Christmas party that he would like to have sex with several women there, and he boasted of his marital infidelity. His acts were inconsistent with a preplanned kidnapping; rather, his words and conduct showed his desire for sexual activity as a priority that evening. Regarding the theory of kidnapping the child for the child's father, the only evidence about the father was that he lived on the west coast and was so poor that he could only visit the child when the child traveled to Arkansas to visit her maternal grandparents. No evidence was presented that the father ever sought to obtain custody of the child or that child custody had been a problem. The likelihood that the father could or would have engaged an east coast surrogate to kidnap the child is a fanciful suggestion that has no basis in the evidence presented at trial. None of the suggested hypotheses that the appellant may have had an intent other than to defile the child explains why after the party it was necessary for the appellant at 1:00 a.m. to wash his sneakers and his clothes and to shower before returning urgent calls concerning the child. Furthermore, regarding the hypothesis of kidnapping for ransom, no evidence was presented that the child represented any economic status that would have been attractive to a kidnapper for ransom. 460 Finally, the appellant suggests that the evidence does not exclude the hypothesis that if he abducted the child, he did so for the sheer, non-sexual pleasure of killing her, so that under an indictment charging abduction with the intent to defile, appellant could be found guilty of no more than the lesser-included offense of simple abduction. Nothing in the evidence supports the hypothesis that the abduction was merely to kill for killing's sake. Of course, the evidence does not exclude the hypothesis that appellant killed the child, and the evidence suggests that he may well have. However, if appellant killed the child, that inference supports the conclusion that he abducted her for sexual defiling and killed her in order to hide the evidence of the defiling. "Inferences and deductions from human conduct may be properly drawn when they follow naturally from facts proven." Ingram, 192 Va. at 803, 66 S.E.2d at 851. The evidence in this case proves that appellant had a sexual motive that evening as opposed to any other motive. Appellant expressed his sexual desires by both word and act before the abduction. Appellant spent much of his time at the Christmas party standing alone staring at women, including the child's mother. The evidence showed that when he talked to a male, he talked about his sexual infidelity and pointed out women who sexually attracted him. He also asked two women to leave the party with him. From all of this, the jury could believe that appellant was sexually focused up until he abducted the child. The removal of the coat of a shy child who was afraid of strangers on such a bitterly cold night is a circumstance consistent with abducting the child with the intent to defile her. Appellant would have the court consider otherwise innocent circumstances in isolation and conclude that each circumstance standing alone proved nothing concerning his guilt. But that approach denies reality. Circumstances do not exist in isolation of one another but exist together with every other proven fact and circumstance in the case. The fact that appellant abducted a five-year-old female child who was a stranger to him and who has never been heard from since, when no other purpose reasonably flows from the evidence, supports the inference that his abduction was with the intent to defile the child. When the circumstances surrounding the abduction are considered, appellant's inexplicable guilt-implying behavior and comments to the police, and his general attitude after the abduction, the jury's finding that he abducted the child with the intent to defile her is amply supported by credible evidence. Like Ingram, not only does the evidence here exclude any other reasonable hypothesis, it leaves the defiling motive as the sole, reasonable hypothesis arising from the evidence. Therefore, we hold that the facts and circumstances support the finding that appellant abducted the child with the intent to defile her. III. DISCOVERY OF EXCULPATORY EVIDENCE Next, appellant argues that the Commonwealth failed to disclose exculpatory evidence pursuant to court order or as required by Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963). The panel held that upon retrial the Commonwealth should disclose all of their "lead sheets," particularly a letter written by Hilton Cobb, a government lawyer, statements appellant made to a police officer while he took a polygraph exam, and statements he made to two apartment complex managers. The panel also held that the Commonwealth should have disclosed statements made by three persons who were present when the abduction took place. Because we are not reversing and remanding on whether the evidence proved an intent to defile, we address the issue whether appellant is entitled to a new trial because these statements were not produced at or before trial. Under principles established in Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963), the Commonwealth must turn over evidence favorable to an accused that is material to either guilt or punishment. Id. at 87, 83 S.Ct. at 1196-97. In United States v. Bagley, 473 U.S. 667, 105 S. Ct. 3375, 87 L. Ed. 2d 481 (1985), the Court set forth the test for materiality, finding that evidence is material, "only if there is a reasonable 461 probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different." Id. at 682, 105 S.Ct. at 3383. The [Bagley] Court also made clear that the defendant has the burden of demonstrating that the State withheld favorable evidence and ... that defendant would have obtained a different result had he use of the evidence. Maynard v. Dixon, 943 F.2d 407, 417 (4th Cir.1991), cert. denied, ___ U.S. ___, 112 S. Ct. 1211, 117 L. Ed. 2d 450 (1992) (emphasis added). "A defendant cannot simply allege the presence of favorable material and win reversal of his conviction." United States v. Balliviero, 708 F.2d 934, 943 (5th Cir.1983). Rather, a defendant must prove the favorable character of evidence he claims has been improperly suppressed. Speculative allegations are not adequate. See United States v. Barshov, 733 F.2d 842, 848 (11th Cir.1984), cert. denied, 469 U.S. 1158, 105 S. Ct. 904, 83 L. Ed. 2d 919 (1985). See also Black v. Collins, 962 F.2d 394, 406-07 (5th Cir.), cert. denied, ___ U.S. ___, 112 S. Ct. 2983, 119 L. Ed. 2d 601 (1992). In Lowe v. Commonwealth, 218 Va. 670, 239 S.E.2d 112 (1977), cert. denied, 435 U.S. 930, 98 S. Ct. 1502, 55 L. Ed. 2d 526 (1978), the Supreme Court of Virginia held that at the core of the due process rule concerning exculpatory evidence "is that the evidence must be exculpatory, favorable to the accused." Id. at 679, 239 S.E.2d at 118. The Court held that that "critical basic fact" may not be assumed by the appellate court where it is not demonstrated in the record and that conjecture is insufficient to establish a claim of a Brady violation. Id. Relying on Lowe, the Supreme Court of Virginia in Ramdass v. Commonwealth, 246 Va. 413, 437 S.E.2d 566 (1993), held: In order to establish that the Commonwealth has violated a defendant's Brady rights, the record must indicate that the undisclosed evidence was in fact exculpatory and material either to guilt or to punishment. Id. at 420, 437 S.E.2d at 570 (emphasis added). The Ramdass Court found that the defendant's speculation about "potentially exculpatory evidence" contained in accomplices' polygraph tests was inadequate to establish the claim. Id. In this case, the police received over 900 leads from persons who called or wrote them and offered help, information, or suggestions about finding the child. The Commonwealth disclosed those leads which claimed actual sightings of the child. The panel held that the Commonwealth's "refusal to disclose all of the lead sheets as ordered undermines judicial authority." However, the record shows that the trial judge did not require the Commonwealth to turn over "those [lead] sheets which were out of time with the facts or were patently unreliable." Nevertheless, the panel found the Commonwealth should have turned over to appellant the lead sheet of Hilton Cobb, a government lawyer. Cobb had reported to the police that he was on the Metro the day after the kidnapping and had gotten a glimpse of a child fitting the description of the missing child. Cobb said he only got a "glimpse" of the child's face when a flap of a large coat used to cover the child accidently fell away from her face. He could not describe or identify the child. For that reason, the police officer who took Cobb's statement said that he did not give it enough credence to mandate a follow-up investigation. Cobb subsequently called the police back on two separate occasions. The first time he called to follow up on the progress of his lead. However, because he was unable to provide any substantial description of the child, except that she was a white female whom he had seen just momentarily, the police did nothing to investigate the information. Cobb later called back to follow-up on his lead, at which time he questioned several of the police department's procedures and strategies regarding the investigation. He suggested that the police should investigate whether the child had been made a slave. Cobb expressed his desire to assist the police directly in the investigation. Because Cobb 462 provided the police with no factual information from which they could work, no further investigation of his "lead" occurred. Sometime later, but before the trial, Cobb wrote a lengthy letter addressed to the child's mother. He mailed it to the police with instructions to forward it to the mother. In the letter, contrary to what he had told the police, Cobb wrote that he was "absolutely certain" he saw the child. Cobb wrote that the woman who purportedly held the child appeared not to want him to approach the area where she and a man were seated. He also wrote that the woman got off the Metro with the child and had on her face a look "as though she had accomplished what she wanted." He also wrote that the child's head had been shaved, a fact which had never been mentioned to the police. Cobb then proceeded to criticize the police investigation because they had not followed up on various investigative techniques that he had suggested they take on the day after his report. The letter concluded in a bizarre manner, assuring the child's mother that her daughter would return.[3] When the police questioned Cobb about the letter in detail, he "backed up ... and kind of recanted" his previous assertions, stating, "Well, maybe it wasn't her." The police officer found Cobb to be inconsistent and unreliable, and, thus, the Commonwealth did not turn the letter over to appellant. Several months after the trial, Cobb mailed a copy of the letter to appellant's lawyer. At the hearing on the motion to set aside the verdict based on Cobb's letter, the appellant did not call Cobb as a witness. The appellant only introduced Cobb's letter and a statement by Cobb that he stood by the letter. The Commonwealth called the police officer who dealt with Cobb to establish that Cobb was not credible. We find Cobb's telephone calls and letter laden with inconsistencies. His statements provided no facts that gave the account credibility. Furthermore, at trial, the appellant put on six witnesses who testified that they had seen a person who looked like the child at a Pizza Hut following the abduction. The jury chose not to believe their testimony. Similarly, there was no showing that Cobb's testimony probably would have been believed. In view of the other evidence, we cannot find that the jury would probably have reached a different result. The police spoke with three witnesses who were present at the approximate time of the abduction, one of whom testified at trial. The record indicates that appellant had been advised of the substance of their statements. There is no reasonable probability that, had the evidence been disclosed, a different result would have occurred. Bagley, 473 U.S. at 683, 105 S.Ct. at 3384. While taking a polygraph exam, appellant made statements to Fairfax police officer Danielle. Appellant also spoke with the apartment complex managers, Keefer and Moore, at some point during the investigation. Neither statement was disclosed to appellant. We also find that appellant's statements made to the apartment complex managers, along with the statement he made to the police officer during the polygraph exam, were inculpatory and not exculpatory. Moreover, the Commonwealth was not required to disclose the statements he made to Moore and Keefer because they are not law enforcement officers. Rule 3A:11(b)(1)(i); Jeffries v. Commonwealth, 6 Va.App. 21, 27, 365 S.E.2d 773, 777 (1988). Furthermore, the statements made to Keefer and Moore were not used by the Commonwealth at trial. Therefore, the failure to disclose these statements, even if in violation of the discovery requirements, was harmless and probably would not have resulted in a different trial outcome. 463 IV. DISCOVERY Appellant argues that the Commonwealth failed to turn over six items in discovery and that the trial court erred in failing to provide a discovery cut-off date. Before trial, appellant sought and obtained orders requiring the Commonwealth to produce certain materials for discovery and inspection under Rule 3A:11. "When a discovery violation does not prejudice the substantial rights of a defendant, a trial court does not err in admitting undisclosed evidence." Davis v. Commonwealth, 230 Va. 201, 204-05, 335 S.E.2d 375, 377-78 (1985). If the defendant shows no prejudice, he can claim no error. Id. at 205, 335 S.E.2d at 378. Here, appellant failed to show how a failure to produce this evidence, or the denial of a discovery cut-off date, caused any prejudice. Assuming that these documents were exculpatory, as the panel found, we hold that in view of all of the other evidence and circumstances proved, the record does not support a finding that they would probably have led to a different result. Accordingly, the judgment of the trial court is affirmed. Affirmed. BAKER, WILLIS and BRAY, JJ., concurred. COLEMAN, Justice, concurring. As a member of the panel that first considered Caleb Hughes's appeal, I voted to reverse his conviction on the ground that the evidence was insufficient to prove that he intended to defile the female child when he abducted her. See Hughes v. Commonwealth, 16 Va.App. 576, 602, 431 S.E.2d 906, 922 (1993). I am now persuaded that this view was incorrect. I erroneously concluded that, because the evidence did not exclude an intent by Hughes to commit acts against the child other than to defile her, the evidence was insufficient to prove the charged crime. I am now persuaded that by applying the correct legal principles, the evidence is sufficient to prove beyond a reasonable doubt that Caleb Hughes intended to defile the child when he abducted her. Because my vote is pivotal to decide this issue en banc, I write separately in order to explain the reasons that compel me to change my vote. I joined in the panel's majority decision to reverse the conviction for abduction with the intent to defile because the evidence "did [not] eliminate other possible motives" for the abduction. Id. at 587, 431 S.E.2d at 913. I reasoned that because the evidence and inferences reasonably deducible therefrom equally supported the conclusion that Hughes may have intended other unlawful acts against the child, in addition to the intent to defile her, the Commonwealth had not satisfied its burden of proving the specific intent to defile, to the exclusion of an abduction for other purposes. More specifically, I reasoned that because the evidence was as susceptible to a reasonable inference that Hughes abducted the child intending to kill her, rather than to sexually molest her, the conviction could not stand. I was wrong. Where specific intent is an element of an offense, particularly where it is the element that differentiates the degree of the crime, the Commonwealth must prove beyond a reasonable doubt that the accused at the time harbored that specific intention. Ridley v. Commonwealth, 219 Va. 834, 836, 252 S.E.2d 313, 314 (1979). The proof cannot leave indifferent what the accused may have intended. Id. However, a person often acts with two or more criminal intentions. A person may commit a crime with more than one purpose, and the fact that the act is done with two or more specific objectives does not mean that the Commonwealth has failed to prove the specific intent to commit the charged crime. Thus, when the Commonwealth proves beyond a reasonable doubt that an accused has committed a criminal act with both a primary and a secondary purpose in mind, both or either of which purposes are criminal, the Commonwealth has met its burden of proving the element of specific intent. See, e.g., United States v. Snow, 507 F.2d 22, 24 (7th Cir.1974); O'Neal v. United States, 240 F.2d 700, 702 (10th Cir.1957). By proving that an accused harbored two or more specific criminal intents, the Commonwealth has excluded every reasonable hypothesis of "innocence." It is only where the proof leaves indifferent what the purpose or intentions 464 of the accused were that the Commonwealth's proof fails or is insufficient to establish the element of specific intent. The Commonwealth satisfies its burden of proof when it establishes that the accused had the specific intent to commit the crime charged, even though the proof may equally support an inference that the accused intended to commit, or did commit, the crime with other purposes in mind, some of which may not have been criminal. See id. Although I was unpersuaded by that part of the panel's opinion which held the evidence and reasonable inferences that could be drawn therefrom "did [not] eliminate other possible motives," such as "to extort money," or "for the purpose of concubinage or prostitution," or "parental abduction," Hughes, 16 Va.App. at 587, 431 S.E.2d at 913, I concluded that because the child had never been found, the evidence and reasonable inferences equally supported the conclusion that Hughes abducted the child and killed her. See Epperly v. Commonwealth, 224 Va. 214, 229, 294 S.E.2d 882, 891 (1982). Applying this same line of reasoning, I concluded that, because the evidence equally supported the inference of an intent to kill, the evidence did not prove beyond a reasonable doubt an intent to defile. I did not fully agree with the reasoning in the panel's opinion that the evidence equally supported the other possible motives that Hughes may have had for abducting the child, because neither the circumstances that existed between the accused and the victim nor any other evidence in the record tended to prove that Caleb Hughes may have had extortion, parental kidnapping, selling children, concubinage, or prostitution as reasons for abducting the child. Nevertheless, because I found that the evidence supported the conclusion that Hughes abducted the child intending to kill her, as strongly as that he intended to defile her, I erroneously concluded that the Commonwealth had failed to exclude every reasonable hypothesis except that Hughes was guilty of abduction with the intent to defile. For the reasons stated in the en banc opinion, I agree that the evidence and inferences that reasonably can be drawn from a man abducting a young girl who was a stranger to him, and who has not been seen since, when considered in light of all the surrounding circumstances, proved that Hughes abducted the child for the purpose of sexually molesting her, even though he may have had other reasons for the abduction. For the foregoing reasons, I concur in the decision to affirm Caleb Hughes's conviction for abduction with intent to defile. BARROW, Justice, with whom KOONTZ, Justice, joins, dissenting. The evidence does not, in my opinion, support an inference that the defendant abducted the child with the specific intent to sexually molest her. The facts that the defendant abducted the child and that she has not been found do not mean that the defendant did so intending to molest her. The evidence provokes speculation but does not provide a reasonable basis for inferring what the defendant specifically intended to do, or in fact did, with the child. The Commonwealth had the burden of proving not only that the defendant abducted the child, but that he did so with the intent to sexually molest her. See Simms v. Commonwealth, 2 Va.App. 614, 617, 346 S.E.2d 734, 735 (1986). This intent "may, and often must, be inferred from the facts and circumstances in a particular case." David v. Commonwealth, 2 Va.App. 1, 3, 340 S.E.2d 576, 577 (1986) (quoting Ridley v. Commonwealth, 219 Va. 834, 836, 252 S.E.2d 313, 314 (1979)). A person's conduct and statements may reveal a person's intent. Long v. Commonwealth, 8 Va.App. 194, 198, 379 S.E.2d 473, 476 (1989). However, where an offense consists of an act combined with a particular intent, the intent must be established as a matter of fact, and "[s]urmise and speculation as to the existence of the intent are not sufficient." Dixon v. Commonwealth, 197 Va. 380, 382, 89 S.E.2d 344, 345 (1955) (sexually suggestive telephone calls made prior to a burglary are insufficient evidence of breaking and entering with intent to commit rape). Although the majority concludes that the jury could have found "as a matter of fact" that the defendant intended to sexually molest the child, in my opinion, it could have done so only through "surmise and speculation." The majority relies on the circumstances surrounding the child's disappearance, the fact that she has not been found, 465 and the conduct of the defendant both before and after the child's disappearance to conclude that the defendant sexually molested the child. In my opinion, these facts fall short of proving the defendant's intent beyond a reasonable doubt. The only circumstance surrounding the child's disappearance, as distinguished from the defendant's conduct, relied upon by the majority, is the fibers found in the defendant's car. The presence of so many fibers consistent with those identified with the child permits an inference that she was in the defendant's car in the passenger seat where the fibers were found. This inference supports a finding of abduction but not sexual molestation. The presence of fibers like those from clothing similar to the child's may permit one to infer that she leaned against the seat without her jacket, but it does not permit one to find, beyond a reasonable doubt, that this event occurred as a result of sexual molestation, rather than from her jacket pulling up in the back when she sat down or from her removing her jacket for some other reason. The fact that the child has not been found does not give rise to an inference that the defendant intended to sexually molest the child. Had she been found, but with no evidence of actual or attempted sexual molestation, a jury could not have speculated, with no more evidence than in this case, that the defendant had intended to sexually molest her. The failure to find the child does not enhance this possibility. To the contrary, the fact that she has not been found may, along with other circumstances, be evidence of her death by a criminal act or agency of another. See Epperly v. Commonwealth, 224 Va. 214, 229, 294 S.E.2d 882, 891 (1982). It is not evidence that she was sexually molested. The defendant's conduct is suspicious. He took an unusually long time to get home, he drove an unnecessary distance going home, and then he washed his clothes and sneakers when he arrived home. This behavior tends to support the finding that he abducted the child. It does not, however, indicate what he did or intended to do with the child. The condition of the defendant's shoes adds little, if anything, relevant to his intent. The Division of Consolidated Laboratories did not find blood on them, and the examiner could not recall cut marks being on the sneakers when she examined them. The marks were present when the sneakers were introduced into evidence, and testimony indicated they were present when the police received the sneakers from the defendant. Even if the jury inferred from this evidence that the defendant cut the sneakers, it could not infer from this fact that the defendant intended to molest the child. The police did not find the child's blood on the defendant, his shoes, or in his car. Although a prosecution witness testified that blood on a tissue found in the defendant's car was the same type as the child's blood type, a later prosecution witness established through a DNA test that this blood was not the child's. The majority places significance on the defendant's interest in adult women at the party. He told the resident manager of the apartment complex, a woman, that he would not run an errand unless she went with him. He remarked to another man, while also boasting of his marital infidelity, that the women at the party were "nice looking" and that he would "like to go to bed with them." Finally, he asked one women present if she would go dancing with him. Although these remarks were crude and inappropriate, I do not agree with the majority's characterization of them as reflecting an "intense interest in sexual matters." More importantly, without a better knowledge of the psychodynamics involved, a jury cannot infer from the defendant's crudely expressed interest in adult members of the opposite sex that he intended to molest a child. Not only does the evidence fail to show affirmatively that the defendant intended to sexually molest the child, it also fails to eliminate other possible motives. He may have abducted the child for ransom and, for some unknown reason, changed his mind and killed her to avoid detection. He may have abducted her to give or sell to someone else. The possibility of parental kidnapping motivated by the estranged father, although not proven, was not eliminated by the prosecution's case. The defendant has no burden to prove any of these possibilities. The prosecution, however, having failed to produce affirmative evidence *466 of an intent to sexually abuse the child, was required to eliminate all other possibilities before the jury could reasonably infer a specific intent to sexually molest the child. In essence, I read the majority to say that a jury may infer an intent to sexually molest a child from the fact that an adult male, who has expressed crude sexual remarks about adult women, has abducted a female child. Our desire to protect a small child from such a fate may justify an enhanced penalty for such an offense, and the General Assembly could provide that a greater penalty be imposed whenever an adult abducts an infant of which he or she is not a parent. However, the tragic circumstances of this case do not justify the creation of an inference based on an uninformed assumption regarding human behavior. Such an unwarranted inference will generate disparate application of the law. The inference will be seized upon by triers of fact in some cases, while in other like cases it will not be. Therefore, I would reverse the judgment of conviction and remand the proceeding for a new trial, leaving to the prosecution to more appropriately indict the defendant, if the facts so justify. See Epperly v. Commonwealth, 224 Va. at 229, 294 S.E.2d at 891. In addition, for the reasons stated in the panel's majority opinion, I would further hold that the evidence of the trilobal fiber found in the defendant's car was too remote to have any probative value and should not have been admitted. Because I would reverse for other reasons, I do not address whether this error was harmless. Finally, also for the reasons stated in the panel's opinion, I would hold that certain material identified in the panel's opinion should have been produced by the prosecution; however, because I would reverse for other reasons, I do not address the materiality of the items. BENTON, Justice, dissenting. I join in the discussion and conclusion in Judge Barrow's dissenting opinion that the evidence did not prove beyond a reasonable doubt "intent to defile," a necessary element of the charged offense. Code § 18.2-48. Because I do not believe that the evidence proved beyond a reasonable doubt that Hughes abducted the child, I do not join in the entirety of Judge Barrow's dissent. For that reason and for the reasons stated in my opinion concurring in and dissenting from the opinion of the panel that first considered this appeal, see Hughes v. Commonwealth, 16 Va.App. 576, 597-602, 431 S.E.2d 906, 919-22 (1993) (Benton, J., concurring and dissenting), I would reverse the conviction. ELDER, Justice, dissenting in part and concurring in part. I join in Judge Barrow's dissenting opinion except as it relates to evidence of the trilobal fiber found in the defendant's car. I join the majority in holding that evidence admissible. Because I would reverse on the sufficiency issue and because the defendant now has the disputed evidence, it is not necessary to address that issue in detail. However, of particular concern is the failure of the prosecution to divulge the lead sheet regarding Hilton Cobb. Not only is this evidence exculpatory and material, but the trial judge had ordered that lead sheets of this type be disclosed. Just as it is not the province of this Court to determine the credibility of witnesses, it is not the Commonwealth Attorney's role to unilaterally determine that Mr. Cobb's information is unreliable. NOTES [1] Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963). [2] On the morning following the child's disappearance, Hughes was asked at the police station if he would provide the clothes that he was wearing on the night before. Hughes agreed and went with Officer Promisel to Hughes's home where Hughes directed Promisel to the basement where the washer and dryer were located. "[Hughes] removed a pair of jeans, a gray jacket, a Polo-like shirt, a pair of socks and then there was a hesitation, a very brief hesitation, and [Promisel] asked him what shoes he would have been wearing." Hughes looked "quizzical." There was a "hesitation" and Hughes responded that he would either have been wearing his work boots or a pair of sneakers. Promisel, noticing that Hughes was wearing boots, asked Hughes to look back into the dryer, "at which point, he did and he removed the sneakers from the dryer." Promisel noticed the marking on the insteps of the sneakers. Promisel said that he did not cut the sneakers or do anything to them once he got them. Promisel took the shoes back to the police department and handed them to Officer Grogan, who noticed that there were several cuts on them. Later, Officer Whidlin asked Hughes if Hughes had cut the sneakers and Hughes said "I don't know what you're talking about. You must have cut the sneakers." John Lewoczko, a tool mark expert, described the lefthand shoe as having "an elongated cut towards the back, on the side of the sole, and on the front portion, as well." He described the righthand shoe as having "an elongated gouged out cut area on the inside of the sole." It was his opinion that the gouge and cut marks were produced by a "single bladed tool, such as a knife." [3] Cobb's letter concluded: "Finally, I am not going to say what I'm about to say to try and make you feel better or to give you hope. I shall say it because I really do believe it. I believe that Melissa is in good shape and in good hands. I mentioned the look of joy on that woman's face. There was indeed such a look on her face. I believe that she is taking good care of Melissa and that Melissa will be returned to you safe and sound."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347976/	199 Ga. App. 384 (1991) 404 S.E.2d 809 WAYNE COUNTY BOARD OF EDUCATION et al. v. TYRE et al. A90A2112. Court of Appeals of Georgia. Decided March 13, 1991. Rehearing Denied March 28, 1991. 387 Fortson & White, Bruce H. Beerman, Beth H. Paradies, J. Alvin Leaphart, for appellants. Nathan & Nathan, Ivan H. Nathan, for appellees. McMURRAY, Presiding Judge. Brint Tyre, by and through his parents as next friends, designating themselves and their son as plaintiffs, sued Wayne County Board of Education, Wayne County High School and a school official (defendants) and alleged that Brint Tyre is a student at Wayne County High School and that his due process rights were violated as a result of a three-day disciplinary suspension. Plaintiffs further alleged that they were damaged because Brint Tyre missed important school work during the three-day suspension and that defendants were "negligent" in "failing to allow an appeal." Defendants denied the material allegations of the complaint and later filed a joint motion for summary judgment. Plaintiff Brint Tyre's deposition was filed in support of the joint motion for summary judgment and evidence adduced therein and in supporting affidavits revealed the following: On Saturday, October 15, 1988, plaintiff Brint Tyre was participating in an outdoor "marching competition" with the Wayne County High School marching band. Plaintiff and about 180 other members of the marching band were transported, via school bus, to the "marching competition." The students were supervised by Wayne 385 County High School teachers and the school's band director. After the band had completed its performance and while plaintiff Brint Tyre was standing with other band members and a color guard instructor for the band, he "slung" a large insect which had appeared on his hand. A fellow band member, Regina Lewis, retrieved the insect and exhibited it to plaintiff. Plaintiff "grabbed [Regina Lewis'] wrist and shook it and the insect fell." Plaintiff then crushed the insect with his foot and the creature's insides "splattered" in the direction of the color guard instructor and soiled instructor's clothing (shoes and pants leg). The instructor ordered plaintiff to clean the creature's body from her clothing. Plaintiff did not respond to the order. Instead, he turned away and ignored the instructor's command. The band director then approached plaintiff and asked plaintiff if he was refusing to obey the instructor's direct order. Plaintiff responded, "no, sir, I'm just not going to clean it up because it's not my place." The band director then made it clear to plaintiff that he would have to answer to the high school's assistant principal on Monday morning when they returned to school, and that he would then be facing a disciplinary suspension for insubordination. (Plaintiff's testimony is unclear regarding the band director's statements on the night of the incident, but plaintiff affirmed that he was fully aware that he would be visiting the assistant principal on the charge of insubordination for disobeying the color guard instructor for the band.) Plaintiff Brint Tyre was called to the assistant principal's office on Monday morning. The assistant principal asked plaintiff if he had attended the "marching competition" on the previous Saturday evening. Plaintiff responded affirmatively. The assistant principal also asked plaintiff if he had crushed a bug while on the field trip. Plaintiff responded affirmatively. The assistant principal then asked plaintiff if he refused to obey the color guard instructor's order to clean up the mess caused by plaintiff's squashing of the bug. Plaintiff said that he did refuse to comply with the instructor's directions. However, he did not then explain why he refused to obey the instructor's orders. The assistant principal informed plaintiff that he had been insubordinate and that the punishment would be suspension from school for three days. Plaintiff asked the assistant principal to call his father. The assistant principal complied and informed plaintiff's parents telephonically that plaintiff was suspended from school for three days for disobeying the color guard instructor's directions. Plaintiff complied with the three-day suspension and missed an important school test as a result of the suspension. Defendants' joint motion for summary judgment was denied and the trial court certified the order for interlocutory review. Defendants filed an application for review and we granted an appeal. Held: 1. Defendants first contend the trial court erred in denying their *386 joint motion for summary judgment. "Goss v. Lopez, 419 U.S. 565, 581 (95 SC 729, 42 LE2d 725) sets forth the principles relative to a student's constitutional rights: `Students facing temporary suspension have interests qualifying for protection of the due process clause and due process requires, in connection with a suspension of ten days or less, that the student be given oral or written notice of the charges against him and, if he denies them, an explanation of the evidence the authorities have and an opportunity to present his side of the story. The clause requires at least these rudimentary precautions against unfair or mistaken findings of misconduct and arbitrary exclusion from school.'" Dillard v. Fussell, 160 Ga. App. 382 (287 SE2d 96). The undisputed circumstances of the case sub judice show that plaintiff Brint Tyre was afforded the minimum procedural requirements of Goss v. Lopez, supra. Plaintiff was made aware of the charges against him shortly after the incident which gave rise to his suspension and plaintiff was given an opportunity to answer the charges that he refused to obey an instructor's order. This eliminated all genuine issues of material fact regarding plaintiffs' claim that plaintiff Brint Tyre was not afforded procedural due process. Plaintiff Brint Tyre's version of the incident which led to his suspension may be viewed as supporting plaintiffs' claim that plaintiff Brint Tyre was treated unfairly by school officials, but it does not raise elements vital to plaintiffs' cause of action. See Dillard v. Fussell, 160 Ga. App. 382, 383 supra. Consequently, the trial court erred in denying defendants' motion for summary judgment. 2. Plaintiffs contend that plaintiff Brint Tyre was denied "due process protection at the school level ..." because the administrative review procedures provided by OCGA §§ 20-2-753 and 20-2-754 were not implemented. OCGA §§ 20-2-753 and 20-2-754 make provisions for disciplinary hearings before an authorized school official, panel or tribunal in cases involving assault and battery by a student and in cases involving substantial damage alleged to be intentionally caused by a student on school premises to personal property belonging to a teacher, other school official, employee or student. See OCGA § 20-2-753 (a). Plaintiff Brint Tyre was not charged with any such offenses. Consequently, he was not entitled to review by the disciplinary hearing process of OCGA §§ 20-2-753 and 20-2-754. This contention is without merit. 3. It is unnecessary to address defendants' remaining enumeration of error. Judgment reversed. Sognier, C. J., and Carley, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347979/	199 Ga. App. 309 (1991) 404 S.E.2d 463 BEAMON v. GEORGIA POWER COMPANY. REACH ALL, INC. v. BEAMON. A90A1598, A90A1599. Court of Appeals of Georgia. Decided March 13, 1991. Rehearing Denied March 27, 1991. Kelly, Denney, Pease & Allison, Paul R. Bennett, Billy E. Moore, for Beamon. Hatcher, Stubbs, Land, Hollis & Rothschild, Richard Y. Bradley, Clay D. Land, for Georgia Power. 314 Hurt, Richardson, Garner, Todd & Cadenhead, Frederick N. Gleaton, Judith I. Harris, for Reach All. COOPER, Judge. Appellant sustained electrical burns while repositioning an electrical transformer on a utility pole owned by appellee Georgia Power Company ("Georgia Power") in an aerial lifting device or "bucket truck" manufactured by cross-appellant Reach All, Inc. ("Reach All"). Appellant brought an action against Georgia Power alleging negligence in failing to properly assemble and maintain its electrical power pole and power lines and against Reach All for strict liability, breach of implied warranty and negligence for defects in the bucket truck. Both defendants filed motions for summary judgment, and without making findings, the trial court granted summary judgment 310 to Georgia Power and denied Reach All's motion. Appellant directly appealed the grant of summary judgment to this court, and Reach All filed a cross-appeal of the denial of its motion pursuant to OCGA § 5-6-38. Before the accident occurred, appellant, who had been working as a lineman on a bucket truck for three weeks and had no formal training, and his co-worker, an 18-year journeyman lineman, were attempting to secure the release of the transformer from the pole using collar ropes and hoist hooks. Appellant placed a rope collar around the top of the pole from which the transformer would be suspended and lowered into position. Immediately above the workers were three uninsulated phase wires and a neutral wire carrying 25,000 volts, and despite instructions that they were to wear rubber-insulated gloves while in the bucket and to apply rubber "hoses" to energized lines in their vicinity, neither worker was wearing gloves nor were hoses placed on the exposed lines. The lowest phase was approximately 54 inches above the transformer. Appellant admitted not wearing gloves, contending that it was not uncommon for workers to fail to do so as the gloves were hot and cumbersome when handling small objects and when one is not close to phase wires. The workers maintained that they were not within reach of the phase wires, and as a consequence, the wires were not covered at the time of the accident. Appellant was holding a hook in his left hand which was attached to the top of the transformer, and with the belief that the transformer had been disconnected from wires attached to it but realizing it was still attached to the pole, appellant held a second hook in his right hand which was to be attached to the collar rope. As appellant attempted to connect the hook to the collar rope, his right arm came in contact with a phase wire, and he received a full electrical shock. Appellant asserts that immediately preceding the accident, he was not within arm's reach of the phase wires and contends that the bucket must have lurched upward to put him in contact with the energized wires. Case No. A90A1598 In his sole enumeration of error, appellant contends the trial court erred in granting summary judgment to Georgia Power and charges that the company negligently bolted its transformer to the power pole such that the transformer contacted a ground wire in violation of Georgia Power's own specifications, resulting in serious bodily injury. Appellant maintains that the incident was reasonably foreseeable and that he did not assume the risk of such injury. "A power company is charged with the duty of exercising ordinary care in the construction and maintenance of its wires, poles, transformers and equipment. Ordinary care is that reasonable care 311 and caution which an ordinary cautious and prudent person would exercise under the same or similar conditions. [Cit.]" Collins v. Altamaha E.M.C., 151 Ga. App. 491 (1) (A) (260 SE2d 540) (1979). High voltage lines must be maintained "in such a manner and at such a location as not to injure persons who might be reasonably expected to come in contact with such lines." Carden v. Ga. Power Co., 231 Ga. 456, 457 (202 SE2d 55) (1973). In support of its contention that Georgia Power was negligent, appellant submitted the affidavit of Clayton Beamon ("Beamon"), appellant's father and a construction foreman with self-professed familiarity with Georgia Power overhead power lines dating back 20 years, wherein he alleged that appellant was injured as the result of the improper mounting of the transformer to the utility pole over a metal ground wire in violation of certain "Georgia Power Distribution Specifications" which were attached to the affidavit. Georgia Power countered with an affidavit stating that Beamon did not set forth sufficient training or experience to enable him to interpret the specifications and draw the conclusions reached in his affidavit; that Beamon took the specifications out of context and arrived at erroneous conclusions; that, nevertheless, the bonding of the ground wire and the transformer did not violate specifications; and that had appellant been in compliance with safety rules, he would not have been injured. Generally, "`[n]egligence issues are not susceptible of summary adjudication except in plain, palpable and indisputable cases. (Cits.)' [Cit.] `The evidence must be construed most favorably to the party opposing the motion for summary judgment; this party must be given the benefit of all favorable inferences and reasonable doubts which may arise from the evidence. (Cits.)' [Cit.]" Padgett v. M & M Super Market, 195 Ga. App. 799, 800 (395 SE2d 245) (1990). In the instant case, Georgia Power contends that the evidence demonstrates that it breached no duty to appellant; however, in view of the well-established rule stated above and the evidence proffered by appellant, we are constrained to conclude that on this issue there are factual questions to be resolved by a jury. Id. However, the inquiry does not end here; there is no liability "`unless the negligence alleged is the proximate cause of the injury sustained.' [Cit.]" Dilworth v. Boeckler, 187 Ga. App. 241 (370 SE2d 17) (1988). Appellant's injury was not merely the result of the alleged improper mounting of the transformer but appellant alleged that his injury was also caused by a defect in the bucket truck which elevated him to the phase wire. Moreover, appellant admits not exercising care for his own safety by failing to wear safety gloves and to insulate the energized wires. "`"[T]he causal connection between an original act of negligence and injury to another is not broken by the `intervening' act . . . if the nature of such intervening act was such that it could reasonably have been anticipated or foreseen by the original wrongdoer."'" Collins, 312 supra at 492. In light of the evidence presented, it is unreasonable that Georgia Power would have anticipated that someone, in the ordinary and usual course of working on its transformer, either lawfully or negligently, would have been involuntarily lifted several feet above the transformer in an allegedly defective bucket truck. "`"`A prior and remote cause can not be made the basis of an action if such remote cause did nothing more than furnish the condition, or give rise to the occasion by which the injury was made possible, if there intervened between such prior or remote cause and the injury a distinct, successive, unrelated, efficient cause of the injury. If no danger existed in the condition except because of the independent cause, such condition was not the proximate cause.' [Cit.]"' [Cit.]" Wanless v. Winner's Corp., 177 Ga. App. 783, 785 (3) (341 SE2d 250) (1986). We find, therefore, that the alleged improper mounting of the transformer was not the proximate cause of appellant's injury. "The conduct of [Georgia Power] could have done nothing more than give rise to the occasion which made [appellant's] injuries possible. Other circumstances preponderated in causing [appellant's] injuries." Id. Specifically, the evidence was undisputed that had appellant been wearing insulated gloves or had the wires been properly covered, his injury would not have occurred. This court has adhered to the rule that only where the evidence is plain and palpable will "negligence, contributory negligence or the exercise of ordinary care for one's own safety" be decided by the court as a matter of law, Fort v. Boone, 166 Ga. App. 290, 292 (304 SE2d 465) (1983), and such is the legal situation in this case. Accordingly, the trial court did not err in granting summary judgment to Georgia Power. See Mathews v. Ga. Power Co., 175 Ga. App. 441 (333 SE2d 631) (1985); Jones v. Central of Ga. R. Co., 192 Ga. App. 806 (386 SE2d 386) (1989). Case No. A90A1599 In its cross-appeal, Reach All enumerates as error the denial of its motion for summary judgment, charging that the admissible evidence demonstrates that the bucket truck did not malfunction. Relying on the testimony of Beamon's co-worker, Montfort, his own testimony and his own conclusions of the cause of the accident given the distance between the transformer and the wires, cross-appellee Beamon proposed that the bucket either rose on its own, indicating defectiveness, or the uncovered controls were inadvertently bumped causing the bucket to rise. A review of the testimony reveals that there had been no reports of mechanical problems or unexpected movement of the truck or the bucket prior to the accident; that Beamon and Montfort were the only two persons in the bucket; that Montfort had turned away from Beamon at the time to reach for his *313 safety gloves; that Beamon has no recollection of any of the events after attaching the hook to the collar rope; and that neither Beamon nor Montfort were in the vicinity of the controls or inadvertently activated them. Montfort stated that the bucket did not move and that he would have felt the movement had it occurred. Beamon does not recall the bucket moving and admits he does not know what caused the bucket to rise, nevertheless, he insists that it did move based upon the height of the wires relative to the transformer and the bucket. "Mere conclusions are not sufficient to withstand specific facts. `A party opposing a motion for summary judgment, where the moving party has presented evidence of the necessary certitude, must, in his opposing affidavits, set forth specific facts showing a genuine issue to be decided by a jury.' [Cits.]" West Side Loan Office v. Electro-Protective Corp., 167 Ga. App. 520 (306 SE2d 686) (1983). Beamon submitted affidavits from experts who alleged that the bucket truck was designed in violation of national standards because the controls faced the bucket's interior and were susceptible to inadvertent activation because they were not covered; however, there was no evidence that the controls were touched. In our view, Beamon failed to set forth specific facts supporting his contention that the bucket truck malfunctioned or was defective, and giving Beamon the benefit of all inferences, there are no genuine issues of material fact. Where a "defendant, as movant for summary judgment, produces evidence conclusively establishing a fact or facts which negate one or more essential elements of plaintiff's action, . . . the movant is entitled to a summary judgment as a matter of law. [Cit.]" Calhoun v. Eaves, 114 Ga. App. 756, 759 (152 SE2d 805) (1966). This, Reach All has succeeded in doing, and the trial court erred in denying Reach All's motion for summary judgment. Having concluded that the court erred in failing to grant summary judgment to Reach All, we need not consider Reach All's contention that the trial court erred in failing to conclude that Beamon's failure to exercise ordinary care for his own safety constituted assumption of the risk. Judgment affirmed in Case No. A90A1598. Judgment reversed in Case No. A90A1599. Banke, P. J., and Birdsong, P. J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1347974/	404 S.E.2d 216 (1991) NATIONAL RAILROAD PASSENGER CORPORATION v. CATLETT VOLUNTEER FIRE COMPANY, INCORPORATED, et al. Record No. 901527. Supreme Court of Virginia. April 19, 1991. 217 Stephen Earl Baril, John L. Walker, III (Samuel W. Hixon, III, George W. Marget, III, Williams, Mullen, Christian & Dobbins, Richmond, on briefs), for appellant. Julia B. Judkins (Richard H. Lewis, Fairfax, Kevin Lee Locklin, Merrifield, Randolph E. Trow, Jr., Richmond, Lewis, Trichilo & Bancroft, Fairfax, Slenker, Brandt, Jennings & Johnson, Merrifield, Poole & Poole, Richmond, on brief), for appellees. Present: All the Justices. CARRICO, Chief Justice. Following a railway crossing collision between a passenger train and a fire truck, National Railroad Passenger Corporation (Amtrak), owner of the train, filed a complaint in the United States District Court for the Eastern District of Virginia against Catlett Volunteer Fire Company, Incorporated, owner of the fire truck (Catlett), and the estate of Mark Jay Miller, a volunteer fireman who was operating the fire truck and who was killed in the collision (Miller). In the complaint, Amtrak sought recovery of the sum of $910,000 for property damage allegedly sustained by the train in the collision. In the District Court, Catlett and Miller's estate filed answers alleging they were immune from liability under the doctrine of sovereign immunity. Later, Catlett and Miller's estate filed motions for summary judgment on the immunity issue. The court granted Catlett's motion for summary judgment in full. Initially, the court denied the motion filed by Miller's estate but, upon reconsideration, granted the motion in part, holding that the estate could be held liable only if Miller's conduct constituted gross negligence. Upon appeal to the Fourth Circuit, Amtrak filed a motion for certification of state law questions to this Court pursuant to our Rule 5:42, and Catlett and Miller's estate filed a response in support of the motion. Accordingly, the Fourth Circuit certified to this Court the following questions: a. [Is] Catlett ... immune from suit pursuant to Virginia Code § 27-23.6, 1950 as amended? b. [Does] Miller [have] qualified immunity and can only be liable if his actions are found to constitute gross negligence? The pertinent facts are set forth in the Fourth Circuit's order of certification: On September 28, 1989, members of Catlett responded to the scene of a car fire on private property adjacent to Route 28 in Fauquier County, Virginia. Miller, the volunteer fireman who was driving the lead fire truck, discovered through radio communications that he had driven past the driveway leading into the property where the car fire was burning. He then turned around and proceeded back on the same highway towards the driveway entrance. Again, Miller overshot the driveway. He stopped the fire truck just beyond the driveway entrance to his right and backed up in order to make a right turn. He then made a wide right turn into the driveway. The driveway is unpaved and crosses over the railroad tracks. After Miller turned onto the driveway, he drove slowly up the drive's incline towards the train tracks and proceeded to cross. The truck's emergency lights and headlights were operating at all times during the response to this call. As the fire truck was crossing the railroad tracks, it was hit by a southbound Amtrak train. Prior to the accident, Catlett required its member drivers, including Miller, to undergo extensive in-house training as to the safe operation of the fire company's 218 vehicles. Clyde M. Lomax, the fire company's chief, instructed the volunteer firemen of the company that they must obey all traffic laws without exception when responding to a call. Lomax specifically recalls instructing his drivers, including Miller, to stop and look both ways before crossing any railroad tracks. Catlett is a non-profit corporation that exists independently of Fauquier County (the "County"). Catlett's members are volunteers, whom neither Catlett nor the County compensates for firefighting. Catlett owns its station house and the vehicles that it uses. The County does not control or supervise the daily operations of Catlett and the County is not involved in the selection of Catlett's members, officers or drivers. The County provides no direct funding to Catlett. The only cash disbursement that Catlett receives from the County is a one-thirteenth (1/13) share of a lump sum grant that the County makes available to the Fauquier County Fire and Rescue Association (the "Association"), an unincorporated association that is comprised of appointed members from the thirteen volunteer fire and rescue companies that operate within the County. The County neither directs the Association as to how this grant should be distributed nor requires the Association to account for how the grant is disbursed. The remaining expenditures that the County makes on behalf of the Association are for the payment of bills that the Association submits to the County. I. Is Catlett Immune from Suit Pursuant to Code § 27-23.6? In pertinent part, Code § 27-23.6 provides as follows: Any county may contract with any volunteer fire-fighting companies or associations in the county or towns therein for the fighting of fire in any county so contracting.... If any contract be entered into by a county the fire-fighting company shall be deemed to be an instrumentality of the contracting county and as such exempt from suit for damages done incident to fighting fires therein. Amtrak contends that Code § 27-23.6 does not exempt Catlett from liability because the statute requires the existence of a contract between Catlett and the County and no contract was entered into between these parties. Amtrak also contends that the statute only applies when property is damaged incident to the actual fighting of a fire and, hence, does not apply to damage caused by the negligent operation of a fire truck en route to the scene of a fire. A. The Contract Question In granting summary judgment in favor of Catlett and Miller's estate, the District Court held that there was no express contract between Catlett and the County but that an implied contract existed between them. Amtrak argues that the District Court correctly found that no express contract existed between Catlett and the County yet "erred in imposing an implied-in-fact contract between them to the detriment of Amtrak." In finding the existence of an implied-in-fact contract, the district judge stated: Where an express contract is not made, but might have been, or in equity and good conscience should have been made, the law will impose the duty and infer the necessary promises to effect a contractual relation between the parties. Virginia Block Co. v. Virginia Mutual Insurance Agency, Inc., 16 B.R. 771 (W.D.Va.1982), quoting from volume 4B Mich.J., Contracts, Section 99. After making this statement, the district judge surveyed the Virginia statutes concerning volunteer fire companies, reviewed the evidence supplied by Catlett concerning "the ongoing [close working] relationship between Catlett and [Fauquier County]," and noted the requirement in Acts 1970, ch. 187, of which Code § 27-23.6 is a part, that "the Act shall be liberally construed." Concluding, the judge said: "Liberally construing Section 27-23.6 in light of the evidence before this court regarding the relationship 219 between Fauquier County and Catlett, the Court finds an implied contract does indeed exist between these two parties." We think the District Court correctly stated Virginia law on the subject of implied contracts. See Hendrickson v. Meredith, 161 Va. 193, 200-01, 170 S.E. 602, 605 (1933); Norfolk v. Norfolk County, 120 Va. 356, 361-62, 91 S.E. 820, 821-22 (1917). We also think the Court properly applied that law to the evidence before it. Accordingly, for the purpose of responding to the remaining questions relating to the application of Code § 27-23.6, we will adopt the District Court's views as our own and find the existence of a contract between Catlett and Fauquier County. B. The Meaning of "Incident To" One of the remaining questions relating to the application of Code § 27-23.6 is whether the exemption from suit for "damages done incident to fighting fires" encompasses damages resulting from the operation of a fire truck en route to a fire. Amtrak argues that the statute "only exempts a volunteer fire company from suit for property damages `done incident to' the actual act of fighting a fire." (Emphasis in original.) Amtrak draws this argument from a number of related statutes. Amtrak cites Code § 27-20, which authorizes a fire chief to destroy property in order to prevent the spread of fire, and Code §§ 27-21 and -22, which establish a procedure for recovery of such property damage from the city, town, or county involved. Then, Amtrak cites Code § 27-41, which provides financial relief to volunteer fire fighters killed or injured while fighting fire or "while responding to an alarm or returning from the scene of a fire." "This distinction," Amtrak states, "demonstrates that the drafters of Section 27-23.6 intended for the limited language `incident to fighting fires' to literally mean fighting fires and to exclude a fire company member's operation of a fire truck to and from the scene of a fire."[1] We disagree with Amtrak's argument concerning the operation of a fire truck en route to the scene of a fire. The word "incident" is defined as [s]omething dependent upon, appertaining or subordinate to, or accompanying something else of greater or principal importance, something arising or resulting from something else of greater or principal importance. Used both substantively and adjectively of a thing which, either usually or naturally and inseparably, depends upon, appertains to, or follows another that is more worthy. Used as a noun, it denotes anything which inseparably belongs to, or is connected with, or inherent in, another thing, called the `principal.' Black's Law Dictionary 762 (6th ed. 1990) (citation omitted). We think that both definition and common sense compel the conclusion that the operation of a fire truck en route to the scene of a fire is incident to fighting the fire. Accordingly, we hold that Catlett is entitled to the exemption from suit for damages provided by Code § 27-23.6, and we answer the first certified question in the affirmative. II. Does Miller Have Qualified Immunity?[2] Amtrak contends that Miller was not entitled to sovereign immunity because the exemption from suit contained in Code § 27-23.6 is provided to fire-fighting companies but not to individual members of those companies. Amtrak also contends that even if the exemption provided by 220 Code § 27-23.6 is applicable, Miller is not entitled to immunity because driving across railroad tracks without stopping is not the sort of discretionary act upon which immunity may be based. A. Nature of the Exemption It is true that Code § 27-23.6 does not in specific terms extend its exemption from suit to individual members of fire-fighting companies. But that does not end the inquiry. If a contract exists between a fire-fighting company and a county, Code § 27-23.6 makes the fire-fighting company "an instrumentality of the contracting county and as such exempt from suit for damages done incident to fighting fires." To this extent, the company would be entitled to the cloak of the county's sovereign immunity and, in turn, the cloak may be available to the company's members. Amtrak argues, however, that the exemption provided fire companies by Code § 27-23.6 is something less than the immunity enjoyed by the county under general law. Amtrak says that Code § 27-23.6 "is an `exemption from suit' statute, the effect of which is to limit the remedy of a property owner whose property is destroyed in the course of actual firefighting [and for] this reason, the statute does not bestow sovereign immunity on Catlett." We disagree with Amtrak concerning the effect of Code § 27-23.6. While it does limit a property owner's remedy, it also has the wholesome effect of encouraging the provision of fire protection services on a voluntary basis in those areas of the Commonwealth where such services might not otherwise be made available. These public policy considerations no doubt prompted the General Assembly to include in the statute the clause granting exemption to fire companies from suits for damages done incident to fighting fires. The real question, therefore, is whether the exemption provided by the statute is different from the immunity provided by general law. We perceive no legal difference between the terms exemption and immunity. "Exemption" is defined as "[f]reedom from a general duty or service; immunity from a general burden, tax, or charge. Immunity from service of process or from certain legal obligations, as jury duty, military service, or the payment of taxes. See also Immunity." Black's Law Dictionary at 571. "Immunity" is defined as "[e]xemption, as from serving in an office, or performing duties which the law generally requires other citizens to perform; e.g. exemption from paying taxes. Freedom or exemption from penalty, burden, or duty. Special privilege. See also Exemption." Id. at 751. We have used the terms "exemption" and "immunity" interchangeably in several of our decisions. See Forst v. Rockingham, 222 Va. 270, 276, 279 S.E.2d 400, 403 (1981); Penn v. Manns, 221 Va. 88, 92, 267 S.E.2d 126, 129 (1980); Hospital Association v. Wise County, 203 Va. 303, 307, 124 S.E.2d 216, 219 (1962). And a court in a sister state has said that "[a]fter a search of several standard dictionaries, legal dictionaries and other definitions found in numerous cases, the Court finds that the most common synonym for the word "exemption" is the word "immunity." Coombs v. Beneficial Finance Co., 549 S.W.2d 327, 328 (Ky.Ct.App.1977). We, too, think that the terms "exemption" and "immunity" are synonymous. We hold, therefore, that the exemption provided Catlett as an "instrumentality" of Fauquier County is the equivalent of sovereign immunity to the extent of damages done incident to fighting fires. Referring to a statement we recently made in Colby v. Boyden, 241 Va. 125, 400 S.E.2d 184 (1991), Amtrak argues that "an emergency vehicle operator who is not a governmental employee (such as Miller) may be civilly liable upon a showing of simple negligence for his failure to use reasonable care in the operation of such a vehicle under Code § 46.2-920." Consequently, Amtrak says, "no basis exists for Miller's claim that he is exempt from suit under § 27-23.6." 221 Colby involved a Virginia Beach police officer who, while pursuing a motorist who had run a red light, himself ran a red light and struck another motorist, causing her serious injury. The trial court sustained the officer's plea of sovereign immunity and held that the plaintiff's evidence failed to make out a prima facie case of gross negligence. 241 Va. at 127, 400 S.E.2d at 186. We affirmed.[3] Code § 46.2-920 (formerly § 46.1-226), mentioned in Amtrak's argument, figured prominently in the Colby decision. The Code section provides in subsection (A) that the driver of an emergency vehicle, under prescribed conditions, may, without subjecting himself to criminal prosecution, disregard certain traffic regulations such as speed limits. Subsection (B) provides that "[n]othing in this section shall release the operator of any such vehicle from civil liability for failure to use reasonable care in such operation." The plaintiff in Colby argued that subsection (B) imposes civil liability for acts of simple negligence. In support of her position, she cited our decisions in Pullen & McCoy v. Nickens, 226 Va. 342, 310 S.E.2d 452 (1983), Smith v. Lamar, 212 Va. 820, 188 S.E.2d 72 (1972), White v. John Doe, 207 Va. 276, 148 S.E.2d 797 (1966), and Virginia Transit Co. v. Tidd, 194 Va. 418, 73 S.E.2d 405 (1952). We said, however, that "none of [those] cases held that proof of simple negligence was sufficient to impose civil liability for acts covered under § 46.1-226 [now § 46.2-920] and its predecessors." 241 Va. at 131, 400 S.E.2d at 188. We also said: Defining the defendant's duty of care is the first step in determining liability. A second step involves determining whether the conduct alleged ... amounts to the degree of deviation from that dutysimple or gross negligence, willful and wanton conduct, or intentional misconductrequisite to establish civil liability in the circumstances of the case. Id. at 131-32, 400 S.E.2d at 188. It was in the next paragraph that we made the statement, cited in Amtrak's argument, about the status of the operator of an emergency vehicle: Code § 46.1-226 [now § 46.2-920] neither establishes nor speaks to the degree of negligence necessary to impose civil liability on one to whom the section applies. The degree of negligence required to impose civil liability will depend on the circumstances of each case. For example, § 46.1-226 is not limited to governmental officers or employees. Therefore, if the operator of a vehicle in an emergency situation is not a governmental employee, he may be protected under § 46.1-226 from criminal prosecution, but he may be civilly liable upon a showing of simple negligence because the defense of sovereign immunity is unavailable to him. Id. at 132, 400 S.E.2d at 188. Here, however, Miller was a member of a fire company that was made an "instrumentality" of the county with which the company had contracted for the fighting of fire. Further, on the occasion in question, Miller was the "officer ... in charge." Given the nature of Miller's position, we see no legal distinction between his status and that of the police officer involved in Colby, at least insofar as the availability of the defense of sovereign immunity is concerned. B. Use of Judgment and Discretion Amtrak argues that under the fourth factor of the test enunciated in Messina v. Burden, 228 Va. 301, 321 222 S.E.2d 657 (1987), Miller is entitled to invoke the defense of sovereign immunity only if "the act complained of involved the use of judgment and discretion." Id. at 313, 321 S.E.2d at 663. Amtrak says that "the act complained of [here] is Miller's act of driving a fire truck across a railroad crossing without first stopping as required by state law,[4] Catlett's By-Laws, and Catlett's internal safety policies." Hence, Amtrak concludes, "Miller's crossing the railroad tracks without first stopping ... was a ministerial act, not a discretionary act to which sovereign immunity attaches." We disagree with Amtrak. In Colby, the plaintiff made an argument similar to Amtrak's here, viz., "that [the police officer's] actions involved in the pursuit of a speeding automobile were not entitled to the protection of sovereign immunity because they were ministerial acts and not acts which involved judgment and discretion." 241 Va. at 128, 400 S.E.2d at 186. Further, similar to the situation here, the police officer in Colby did not stop for a red light, as required by law. In addition, as Catlett did with its firemen here, "[t]he City exercised administrative control and supervision over [the] activities [of its police officers] through the promulgation of guidelines governing actions taken in response to emergency situations." Id. at 129, 400 S.E.2d at 187. What we said there is equally pertinent here: [The City's] guidelines do not, and cannot, eliminate the requirement that a police officer, engaged in the delicate, dangerous, and potentially deadly job of vehicular pursuit, must make prompt, original, and crucial decisions in a highly stressful situation. Unlike the driver in routine traffic, the officer must make difficult judgments about the best means of effectuating the governmental purpose by embracing special risks in an emergency situation. Such situations involve necessarily discretionary, split-second decisions balancing grave personal risks, public safety concerns, and the need to achieve the governmental objective. Id. at 129-30, 400 S.E.2d at 187. We cannot logically distinguish the act of crossing a railroad track without stopping in order to extinguish a fire from running a red light in order to apprehend a traffic offender. We think both acts involve the exercise of judgment and discretion. We hold, therefore, that Miller is entitled to invoke the defense of sovereign immunity and is liable only for gross negligence.[5] Accordingly, we answer the second certified question in the affirmative. First Certified QuestionAnswered in the Affirmative. Second Certified QuestionAnswered in the Affirmative. NOTES [1] Because the damage in this case occurred while the fire truck was en route to the scene of a fire, we do not consider Amtrak's further argument that Code § 27-23.6 excludes the operation of a fire truck when returning from a fire scene. [2] For an individual governmental official or employee, the defense of sovereign immunity is not absolute. He or she may be held liable, but only for gross negligence. See James v. Jane, 221 Va. 43, 53, 282 S.E.2d 864, 869 (1980). [3] Heider v. Clemons, 241 Va. 143, 400 S.E.2d 190 (1991), was decided the same day as Colby. In Heider, a deputy sheriff had served process at a residence in Fairfax County and had returned to his automobile parked on the shoulder of the road. Pulling out, he struck the plaintiff's motorcycle. The jury awarded the plaintiff a verdict, and the deputy appealed. We affirmed, holding that the deputy's "simple operation of [his] automobile did not involve special risks arising from the governmental activity, or the exercise of judgment or discretion about the proper means of effectuating the governmental purpose of the driver's employer." Id. at 145, 400 S.E.2d at 191. [4] Code § 46.2-885 provides that, except in cities and towns, whenever a person driving a vehicle approaches a railroad grade crossing under certain circumstances, he shall stop "and shall not proceed until he can do so safely." [5] Both sides to this controversy cite Meagher v. Johnson, 239 Va. 380, 389 S.E.2d 310 (1990). Meagher was a personal injury action against a Richmond police officer whose cruiser struck and injured a person he was attempting to apprehend. We reversed a judgment for the plaintiff because the evidence was insufficient to prove gross negligence. As noted in Colby, 241 Va. 129 n. 1, 400 S.E.2d 187 n. 1, Meagher did not involve the issue of the applicability of sovereign immunity.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348024/	963 P.2d 30 (1998) 154 Or. App. 343 QUALITY CONTRACTORS, INC., dba Fred's Contracting and Fred Janke, Respondents, v. Sandra K. JACOBSEN, aka Sandy Jacobsen, Appellant, and Beneficial Oregon Inc., dba Beneficial Mortgage Company, Defendant. 92-CV-0247-TM; CA A96425. Court of Appeals of Oregon. Argued and Submitted December 16, 1997. Decided June 10, 1998. Robert L. Nash, Bend, argued the cause and filed the briefs for appellant. Michael B. McCord, Bend, argued the cause and filed the brief for respondents. Before De MUNIZ, P.J., and HASELTON and LINDER, JJ. 31 HASELTON, Judge. Defendant[1] appeals from a judgment awarding plaintiffs $11,884 in attorney fees in a contractual dispute. Defendant contends that the judgment is erroneous primarily because (a) the award includes fees incurred after defendant made an ORCP 54, subd. E offer of compromise that precluded the recovery of such fees; (b) the award exceeds the amount of fees plaintiffs actually incurred with respect to defendant. We affirm. This case, which arises out of a home remodeling dispute, is before us for the second time. See Quality Contractors, Inc. v. Jacobsen, 139 Or.App. 366, 911 P.2d 1268, rev. den. 323 Or. 691, 920 P.2d 550 (1996) (Quality Contractors I). In February 1992, plaintiff contractors brought a breach of contract action against defendant homeowner for nonpayment of remodeling services, seeking damages that were approximately $10,500, plus prejudgment interest and contractual attorney fees. Plaintiffs also joined, and asserted a claim for nonpayment against, defendant's lender, Beneficial Oregon, Inc. Defendant answered, asserting counterclaims for defective and incomplete work. On September 22, 1993, defendant served plaintiffs with an offer of compromise pursuant to ORCP 54, subd. E. That offer stated, in part: "Defendant Sandra Jacobsen offers to allow judgment to be entered in favor of plaintiff for the sum of $3,000, including attorney's fees, costs and disbursements, in full satisfaction of all claims which have been or could be alleged by plaintiff in this action against both defendants." Plaintiffs never accepted that offer. On March 28, 1994, plaintiffs entered into a settlement with Beneficial. Under that settlement, Beneficial agreed to pay plaintiffs $2,000, which would be offset against any judgment plaintiffs might obtain from defendant; plaintiffs and Beneficial agreed to bear their own costs and attorney fees. Beginning March 29, 1994, the case was tried to a jury, which awarded plaintiffs $1,507 in damages and rejected defendant's counterclaims. In accordance with the agreement between plaintiffs and Beneficial, the court offset the $2,000 settlement against the $1,507 verdict and entered a compensatory judgment of $0: "Plaintiffs are awarded judgment against Defendant for $1,507 plus costs to be reduced by the $2,000 paid by Defendant Beneficial, for a net Judgment for Plaintiffs and against Defendant of $0.00." In determining plaintiffs' alleged entitlement to attorney fees, the court construed the attorney fees provision of the parties' construction contract, which provided: "If either party becomes involved in litigation arising out of this Agreement, the court shall award costs, expenses including attorney fees to the party justly entitled to them." The trial court reasoned that "party justly entitled" was not equivalent to "prevailing party" as used in ORS 20.096, but instead empowered the court to make "a determination based on fairness and equity" as to who, if anyone, should recover fees. Applying that standard, the trial court concluded that, because each party had convinced the jury as to some, but not all, of its claims, neither was entitled to fees. In Quality Contractors I, we focused on, and reversed, the trial court's construction and application of the contractual attorney fee provision. We concluded that plaintiffs should have been awarded fees because the phrase "party justly entitled" in the parties' contract is equivalent to "prevailing party" and that "[t]he trial court's finding that plaintiffs prevailed is supported by the record." Quality Contractors I, 139 Or.App. at 372, 911 P.2d 1268. Consequently, we remanded to the trial court for determination of a reasonable amount. Id. On remand, plaintiffs filed a motion for entry of judgment for attorney fees and costs. In that motion, plaintiffs did not seek a particular sum of attorney fees, but rather stated that they would rely on "the cost bill 32 and affidavits submitted previously regarding attorney fees and costs." Defendant objected, on a variety of grounds, including those discussed below. The trial court, without explanation, awarded $11,884. Defendant requested reconsideration and findings. That request was denied. On appeal, defendant raises four "assignments of error," which were actually four broad arguments challenging the propriety of the same ruling, viz., the award of attorney fees: (1) Defendant's ORCP 54, subd. E offer of compromise precluded plaintiffs from recovering their attorney fees incurred after the date of that offer; (2) the trial court's attorney fee award ($11,884) exceeded the fees that plaintiffs actually incurred with respect to defendant; (3) the award was, in all events, unreasonable, given the services rendered; and (4) the court erred in failing to render particular findings and conclusions as to attorney fees. Defendant first argues that the trial court erred in awarding plaintiffs any fees incurred after September 22, 1993, the date she tendered her ORCP 54, subd. E offer of compromise, because plaintiffs did not better their position at trial after rejecting that offer. ORCP 54, subd. E provides in part: "If the offer is not accepted and filed within the time prescribed * * * and if the party asserting the claim fails to obtain a more favorable judgment, the party asserting the claim shall not recover costs, prevailing party fees, disbursements, or attorney fees incurred after the date of the offer[.]" Defendant asserts that her $3,000 offer of compromise, which included attorney fees and costs, exceeded "the sum of the [trial] award plus the costs and recoverable attorney fees incurred up to the time of service of the offer." See Carlson v. Blumenstein, 293 Or. 494, 504, 651 P.2d 710 (1982) (describing application of antecedent of ORCP 54, subd. E, former ORS 17.055). Plaintiffs respond at two levels. First, they contend that the trial court resolved that issue in their favor before the first appeal and that we affirmed that holding in Quality Contractors I. Thus, they reason, "law of the case" principles preclude reexamination of the effect of the offer of compromise. Second, plaintiffs argue that there was sufficient evidence in the record for the trial court, on remand, to conclude that the amount of damages they obtained at trial plus their pre-offer attorney fees exceeded $3,000. Plaintiffs' "law of the case" argument fails. After the trial on the merits, and before the first appeal, plaintiffs petitioned for fees. Defendant objected on a variety of grounds, including that her offer of compromise precluded plaintiffs from recovering fees. The trial court issued a written opinion describing its intended disposition of the fee issue: "Plaintiff [sic] on the face of the verdict is the prevailing party in this case. Defendant contends that plaintiff is not, because it was agreed the `verdict' would be reduced by $2,000, the amount paid by Beneficial. The prior correspondence indicates the agreement was to be to reduce the Judgment by $2,000. The hasty and unfortunate use of the term `verdict' at deposition does not persuade me that Plaintiff is not the prevailing party on the verdict. Defendant contends the offer to settle for $3,000 prevents the award of fees to Plaintiff. It does not, because if Plaintiff is entitled to attorney fees, the judgment including attorney fees will exceed that amount." (Emphasis added.) The court went on, however, to conclude that, under its construction of the contract, neither party was "justly entitled" to attorney fees and it was that holding that we later reversed in Quality Contractors I. Following the court's letter opinion, plaintiffs submitted a proposed judgment that included the following language: "Plaintiffs would be entitled to attorney fees despite the payment by Defendant Beneficial and the offer of compromise on file herein if the contract provided for attorney fees to the `prevailing party'." However, before signing the judgment, the trial court crossed out that language. Thus, the judgment did not include a ruling about the effect of the offer of compromise. We did not address any issue pertaining to the 33 effect of the offer of compromise in our subsequent opinion in Quality Contractors I.[2] Plaintiffs' present "law of the case" argument is based solely on the language of the letter opinion, without acknowledging that the court explicitly excised parallel language from the judgment. Given those circumstances, we conclude that the language of the letter opinion is not entitled to any preclusive "law of the case" effect. See, e.g., Beardsley v. Hill, 219 Or. 440, 442, 348 P.2d 58 (1959) (court's letter "memorandum opinion * * does not become effective until it is reduced to a proper order, judgment or decree and entered in the [record]"); Schunk and Schunk, 14 Or.App. 74, 76, 511 P.2d 1240 (1973) (same). Defendant argues that her $3,000 offer of compromise precluded any award of post-offer fees because the total of plaintiffs' pre-offer fees plus the amount of their recovery at trial was less than $3,000. Defendants' principal argument in that regard is that, although the jury awarded plaintiffs damages of $1,507 against defendant, the trial court ultimately offset that award by the $2,000 Beneficial settlement and, thus, entered a judgment of $0. No one disputes that, if, for purposes of the ORCP 54, subd. E comparison, the "award" at trial is properly deemed to be $0 rather than $1,507, plaintiffs failed to better the offer of compromise. We disagree with defendant that the Beneficial settlement, or any offset resulting from that settlement, can be taken into account in determining whether plaintiffs obtained a "more favorable judgment" than the offer of compromise. As the Supreme Court explained in Carlson, the purpose of the offer of compromise mechanism "was undoubtedly to encourage the settlement of cases and reduce court congestion by penalizing a plaintiff who fails to accept what, in retrospect, is seen to have been a reasonable offer." 293 Or. at 503-04, 651 P.2d 710. Here, the Beneficial settlement occurred on the day before trial, over six months after defendant tendered her offer of compromise. Accordingly, at the time that plaintiffs rejected defendant's offer, they did not, and could not, know that any recovery against defendant at trial would be ultimately offset by $2,000. To allow defendant to benefit from that subsequent settlement by a codefendant would, effectively, give defendant a windfall with respect to the Rule 54, subd. E calculus, eliminating her exposure for plaintiffs' post-offer attorney fees while concomitantly "punishing" plaintiffs for that settlement. Although Carlson's "retroactive reasonableness" principle assumes a degree of "20/20 hindsight," it does not sanction such a result.[3] Plaintiffs' "award" at trial was $1,507. Consequently, the effect, if any, of the offer of compromise depends on whether plaintiffs' pre-offer fees and costs incurred with respect to defendant exceed $1,493. Defendant contends that plaintiffs' pre-offer costs and fees did not exceed $1,493 for two reasons. First, defendant asserts that, in submitting their fee petition, plaintiffs so substantially discounted the fees of their original attorney, Patricia Campbell, for services rendered before the offer of compromise that the total of those fees and the pre-offer fees of plaintiffs' subsequent counsel, the Bryant, Emerson firm, was less than $1,493. In particular, defendant asserts that plaintiffs' petition discounted Campbell's fees from $1,250 to $553. We disagree. Plaintiffs' original fee petition documented and sought $1,174 for Campbell's pre-offer services and $408 for the Bryant, Emerson firm's pre-offer servicesa total of $1,582. Second, defendant asserts that both Campbell's and the Bryant, Emerson firm's pre-offer fees included fees for services rendered with respect to Beneficial, rather than defendant. However, there was a considerable, albeit not complete, overlap of issues pertaining to both Beneficial and defendant. Moreover, in preparing and submitting their fee petition, plaintiffs generally discounted their requested fees for pre-offer (and post-offer) services on matters relating to Beneficial. *34 From those circumstances, the trial court could reasonably conclude that, to the extent that the petition against defendant identified Beneficial-related matters, recovery was sought only to the extent that services pertained to matters and issues common to defendant. Cf. Aylett v. Universal Frozen Foods Co., 124 Or.App. 146, 154, 861 P.2d 375 (1993) (amount of attorney fees attributable to a particular claim is a question of fact; we may not reverse the trial court's calculation of that amount unless there is no evidence to support it). Accordingly, those fees were properly attributable to defendant for purposes of the Rule 54, subd. E calculus. Because the sum of plaintiffs' pre-offer fees ($1,582) plus the jury's award ($1,507) exceeded $3,000, defendant's offer of compromise did not preclude plaintiffs' recovery of their reasonable post-offer fees. Defendant next argues that, even if her offer of compromise did not preclude recovery of post-offer fees, the attorney fee award of $11,884 exceeded the fees plaintiffs actually incurred with respect to defendant. In particular, defendant asserts that plaintiffs sought total fees of only $10,000 and that their recovery could not exceed that request. As support for that argument, defendant points to plaintiffs' counsel's argument at the fee hearing following the remand in Quality Contractors I: "[S]ubstantially more than $10,000 in attorney fees was incurred in total, and all we're asking for is $10,000 which reflects some reduction for the fact that those claims against Beneficial were eventually resolved." At first blush, counsel's remarks would, indeed, seem to limit plaintiffs' requestand recoveryto $10,000. However, in context, that is less clear. The record shows that, following trial, plaintiffs submitted two fee petitions: an initial petition, dated April 5, 1994, seeking $10,000, and a supplemental petition, dated April 27, 1994, documenting an additional $1,884 in fees incurred in services rendered after the submission of the initial petition, including the preparation of the original statement of attorney fees. The documentation submitted with the original petition showed total fees of $11,852, which were then discounted to $10,000. In that context, the trial court could reasonably understand counsel's "$10,000" remark during oral argument to refer solely to the original petition, and the discounting reflected in that petition, and not to the recoverability of the additional fees requested in the supplemental petition.[4] We have reviewed, and reject without further discussion, defendant's remaining argument. Affirmed. NOTES [1] "Defendant" in this opinion refers to defendant Sandra Jacobsen. A second defendant, Beneficial Oregon, Inc.Jacobsen's mortgage companywas dismissed pursuant to stipulation before trial. [2] In the original appeal, no party assigned or cross-assigned error to the trial court's failure to adjudicate the effect of the offer of compromise. [3] We note, without further comment, that the analysis might very well be different if a codefendant's settlement of common liabilities occurs before the offer of compromise. [4] Defendant also raises a secondary argument that the court's award improperly included post-offer fees incurred with respect to Beneficial. We reject that argument for the reasons noted previously with respect to the determination of plaintiffs' pre-offer fees. 154 Or.App. at 350, 963 P.2d at 33.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348025/	144 Wis. 2d 272 (1988) 423 N.W.2d 862 STATE of Wisconsin, Plaintiff-Respondent, v. Robert W. CUNNINGHAM, Defendant-Appellant. No. 87-0742-CR. Supreme Court of Wisconsin. Argued March 30, 1988. Decided June 2, 1988. 273 For the defendant-appellant there were briefs (in court of appeals) and oral argument by Steven D. Phillips, first assistant state public defender. For the plaintiff-respondent the cause was argued by Thomas J. Balistreri, assistant attorney general, with whom on the brief was (in court of appeals) Donald J. Hanaway, attorney general. SHIRLEY S. ABRAHAMSON, J. This is an appeal from a judgment of the circuit court for Racine county, Emmanuel J. Vuvunas, circuit judge. The defendant was convicted of being a convicted felon in possession of a firearm and of resisting an officer in violation of secs. 941.29(1)(a) and 946.41, Stats. 1985-86. The appeal is before this court on certification from the court of appeals. Sec. 808.05(2) and sec. (Rule) 809.61. The court of appeals stated the issue in its certification as follows: Is confronting the defendant with physical evidence of a crime the functional equivalent of interrogation so that subsequent statements of the defendant must be suppressed if made prior to receiving a Miranda warning? 274 The defendant asserts that the statements he made to the arresting officers following their seizure of a revolver from his bedroom should have been suppressed because they were the product of custodial interrogation and were not preceded by Miranda warnings. The defendant contends that the police officers engaged in the "functional equivalent" of express questioning by showing him the revolver. In Rhode Island v. Innis, 446 U.S. 291 (1980), the United States Supreme Court set forth the applicable test for determining what conduct or words by a law enforcement officer constitutes the functional equivalent of express questioning. Applying the Innis test, we conclude that a police officer's confronting the accused with physical evidence of a crime may be, but is not necessarily, the functional equivalent of express questioning. Each case must be considered upon its own facts.[1] We conclude that under the circumstances present in this case the police officer's words and conduct in showing the defendant the revolver were not the functional equivalent of express questioning. Accordingly we affirm the conviction. The facts of this case are undisputed. On April 24, 1986, three officers executed a search of the defendant's 275 apartment for cocaine pursuant to a lawful search warrant. The officers knew the defendant was a convicted felon and that he routinely carried a firearm. When the officers entered the apartment, the defendant ran into the bedroom in an attempt to grab or discard items near the head of the bed. In the course of a struggle with the officers, the defendant scattered cocaine around the room. The officers subdued the defendant, handcuffed him, and placed him under arrest for resisting an officer. The officers did not read him any Miranda warnings. After the defendant was placed under arrest and removed from the bedroom, two officers returned to the bedroom to conduct a search for cocaine. They found a loaded revolver between the mattress and box spring, two to four feet from the headboard and about one foot from the side of the bed. One officer unloaded the revolver and then showed it to the defendant, advising him where it had been found and saying to the other officer, "This was apparently what Mr. Cunningham was running into the bedroom for." Upon seeing the revolver and hearing the officer's comment, the defendant stated something to the effect that it was his bedroom and that he had a right to have a gun. These statements were made prior to any Miranda warning. At the hearing to suppress the defendant's statements, the officer denied that he had intended to interrogate the defendant when he showed the defendant the revolver. The officer testified that his intention was to advise the defendant that the officers had recovered the revolver so that the defendant did not later assert that the officers had planted the revolver. The state and the defendant agree that the defendant was in custody when he made the statements 276 and that he had not been given Miranda warnings. The sole issue is whether the police officer engaged in the functional equivalent of interrogation when he showed the defendant the revolver. If the officer's conduct was the functional equivalent of interrogation, the statements should be suppressed. [1] We begin by summarizing the relevant legal principles applicable to this case. The Fifth Amendment to the federal Constitution provides that no "person ... shall be compelled in any criminal case to be a witness against himself." The Supreme Court has held that the Fourteenth Amendment requires observance of this privilege in state court proceedings. Malloy v. Hogan, 378 U.S. 1 (1964). In Miranda v. Arizona, 384 U.S. 436 (1966), the Court established that the state may not use a suspect's statements stemming from custodial interrogation unless the state demonstrates the use of procedural safeguards effective to secure the privilege against self-incrimination. Included among those safeguards are the now-familiar Miranda warnings. The Court clarified the Miranda case in Rhode Island v. Innis, 446 U.S. 291 (1980), by further defining interrogation. In Innis, a murder suspect was arrested the given the Miranda warnings. He asked for a lawyer. While driving the suspect to the police station, the police officers discussed the possibility that children attending a nearby school for the handicapped might injure themselves if they found a loaded gun. Upon hearing this conversation, the suspect said he would show the officers the location of the gun. The Court concluded that the suspect's statements were admissible. 277 The Innis Court held that interrogation includes not only express questioning of a suspect in custody, but also conduct or words which are the "functional equivalent" of express questioning. Thus, according to Innis, Miranda safeguards are implicated when a person in custody is subjected to either express questioning or its functional equivalent. Not all police conduct that may cause a defendant to speak constitutes interrogation. The Supreme Court explained the functional equivalent of express questioning as follows: "We conclude that the Miranda safeguards come into play whenever a person in custody is subjected to either express questioning or its functional equivalent. That is to say, the term `interrogation' under Miranda refers not only to express questioning, but also to any words or actions on the part of the police (other than those normally attendant to arrest and custody) that the police should know are reasonably likely to elicit an incriminating response from the suspect. The latter portion of this definition focuses primarily upon the perceptions of the suspect, rather than the intent of the police. The focus reflects the fact that the Miranda safeguards were designed to vest a suspect in custody with an added measure of protection against coercive police practices, without regard to objective proof of the underlying intent of the police. A practice that the police should know is reasonably likely to evoke an incriminating response from a suspect amounts to interrogation. But, since the police surely cannot be held accountable for the unforeseeable results of their words or actions, the definition of interrogation can extend only to words or actions on the part of police officers that they should have known were 278 reasonably likely to elicit an incriminating response." (Footnotes omitted.) Innis, 446 U.S. at 300-301. [2] The generally accepted statement of the Innis test is that the "functional equivalent" of express questioning is "any words or actions on the part of the police (other than those normally attendant to arrest and custody) that the police should know are reasonably likely to elicit an incriminating response from the suspect." Innis, 446 U.S. at 301. This language implies an objective foreseeability test. The test is whether an objective observer could foresee that the officer's conduct or words would elicit an incriminating response. Another way of stating the objective foreseeability test is to ask whether the police officer's conduct or speech could reasonably have had the force of a question on the suspect. The Court qualified the objective foreseeability standard by stating that "any knowledge the police may have had concerning the unusual susceptibility of a defendant to a particular form of persuasion might be an important factor in determining whether the police should have known that their words or actions were reasonably likely to elicit an incriminating response from the suspect." Innis, 446 U.S. at 302 n. 8. An officer's specific knowledge about the suspect may indicate that the officer should have known his or her conduct or words would have had the force of a question on the suspect. Thus the Innis test reflects both an objective foreseeability standard and the police officer's specific knowledge of the suspect. The Innis test can be stated as follows: if an objective observer (with the same knowledge of the suspect as the police officer) could, 279 on the sole basis of hearing the officer's remarks or observing the officer's conduct, conclude that the officer's conduct or words would be likely to elicit an incriminating response, that is, could reasonably have had the force of a question on the suspect, then the conduct or words would constitute interrogation. Several rules emerge from the Innis decision that are important to bear in mind when applying the Innis test. First, administrative routine questioning of all arrestees who are booked or processed is not the equivalent of express questioning. Innis, 446 U.S. at 301. Second, the words "incriminating response" mean any response"whether inculpatory or exculpatory that the prosecution may seek to introduce at trial." Innis, 446 U.S. at 301, n. 5. Third, the focus of the Innis test is "primarily upon the perceptions of the suspect." Innis, 446 U.S. at 301. The Innis test is directed toward ascertaining whether the officer's conduct or words could reasonably have had the force of a question on the suspect. This focus reflects the fact that the Miranda safeguards were designed to vest a suspect in custody with an added measure of protection against coercive police practices, without regard to objective proof of the underlying intent of the police. Innis, 446 U.S. at 301. If an officer knows of a suspect's unusual susceptibility to a particular form of persuasion, and the officer's conduct or words play on that susceptibility, the officer's conduct or words might be an important factor in determining whether the police should have known that their words or actions were reasonably likely to elicit an incriminating response. Innis, 446 U.S. at 302 n. 8. The police cannot be held accountable 280 for the unforeseeable results of their words or actions. Innis, 446 U.S. at 301-302. Fourth, the Innis test is not directed at the subjective intent of the police officer. Nevertheless, "where a police practice is designed to elicit an incriminating response from the accused, it is unlikely that the practice will not also be one which the police should have known was reasonably likely to have that effect." Innis, 446 U.S. at 302, n. 7. See also Innis, 446 U.S. at 303, n. 9. Even where the officer testifies that his or her actions had some purpose other than interrogation, the action must be viewed from the suspect's perspective to determine whether such conduct was reasonably likely to elicit a response. If an impartial observer perceives the officer's purpose to be something other than eliciting a response, the suspect is also likely to view the officer's purpose that way. Lastly, in interpreting and applying the Innis test, a court must keep in mind the evils addressed by Miranda. The court's definition of interrogation should be responsive to the concerns expressed in the Miranda decision. Thus in Innis the court explained that express questioning exists when the police officer's conduct or words coupled with the "interrogation environment" are likely to "`subjugate the individual to the will of his examiner' and thereby undermine the privilege against compulsory self-incrimination." Innis, 446 U.S. at 299, quoting Miranda, 384 U.S. at 457. Justice Powell, writing for the Court in Arizona v. Mauro, ___ U.S. ___, 107 S. Ct. 1931, 1936-37 (1987), explained that the purpose of Miranda and Innis is to prevent "government officials from using the coercive nature of confinement to extract confessions that would not be given in an unrestrained environment." In other words, Miranda procedures are designed to 281 protect a suspect in custodial situations where the compulsion to confess may be present. Several commentators have expressed concerns about the Innis decision.[2] They contend, as did Chief Justice Burger in his concurrence in Innis, that the decision does not provide objective guidelines for proper police conduct and thus imposes practical difficulties on the police. Innis, 446 U.S. at 304-305. The commentators complain that the Supreme Court failed to enumerate specific factors a court should examine in determining (1) whether the police officers should have known that their words or conduct would elicit an incriminating response and (2) whether a suspect was unusually susceptible to a given form of persuasion. Although the commentators are correct that Innis did not set forth a comprehensive list of factors to consider when deciding whether a particular police practice is the functional equivalent of interrogation, the Innis court considered at least two factors to reach its conclusion that the police conduct in Innis was not the functional equivalent of interrogation. First, the Innis court considered the length of conversation between the officer and the suspect in determining whether the police officer should have known that his words would elicit an incriminating response. Second, the Innis court looked to the emotional state of the suspect in determining the suspect's unusual susceptibility. We must apply the Innis test to the facts of this case. On appeal the circuit court's findings of evidentiary 282 or historical facts will not be upset unless they are clearly erroneous. Sec. 805.17(2), Stats. 1985-86. The determination of whether the facts of the case satisfy the legal standard articulated in Innis is a question of law which this court may determine independently of the circuit court. The defendant contends that the police officer, by showing him the revolver, effectively summarized the state's case against him. The defendant urges this court to hold that whenever an officer confronts a suspect with incriminating physical evidence, or verbally summarizes the state's case against the suspect, the officer engages in the functional equivalent of express questioning. The Innis decision does not adopt this per se rule. [3] We hold that under the circumstances in this case, the officer's words and conduct in presenting the revolver to the defendant are not interrogation under the Innis test. We conclude that an objective observer (knowing what the officer knew about the defendant) would not, on the sole basis of hearing the officer's words and observing the officer's conduct, conclude that the officer's conduct or words would be likely to elicit an incriminating response. The officer's conduct and words lasted a very short time. There was no indication that the defendant was unusually susceptible to the officer's words and conduct in displaying the gun. Although the defendant had engaged in an altercation with the officers and attempted to destroy the cocaine, the record does not indicate that at the time he made the statements the defendant was unusually disoriented or upset or that the police officer knew of any unusual susceptibility of the defendant. *283 In deciding whether particular police conduct or words are interrogation, the court must keep in mind the purpose behind the Miranda and Innis decisions. These decisions were designed to prevent law enforcement officers from using the coercive nature of confinement to extract confessions that would not be given in an unrestrained environment. Arizona v. Mauro, ___ U.S. ___, 107 S. Ct. 1931, 1936-1937 (1987). The officer's conduct and words in this case do not implicate this purpose. The facts of this case are stronger for the prosecution than those in Innis. The police officer's conduct and words in this case were not as provocative as the officer's comments in Innis. While we acknowledge that the presentation of evidence may in some cases be the functional equivalent of express questioning, the facts of this case do not compel such a determination. We affirm the judgment of the circuit court holding that the statements made by the defendant after having been shown the revolver were not the product of express questioning or its functional equivalent. By the Court.The judgment of the circuit court is affirmed. NOTES [1] Several cases discuss the issue of whether the presentation of evidence or a summary of the evidence constitutes the functional equivalent of express questioning. The decision in each case turns on the facts of the case. See, e.g., United States v. Gay, 774 F.2d 368, 379 (10th Cir. 1985); United States v. Thierman, 678 F.2d 1331, 1334 n. 3 (9th Cir. 1982); United States v. Bennett, 626 F.2d 1309 (5th Cir. 1980); State v. Conover, ___ Md. ___, 537 A.2d 1167 (1988); People v. Ferro, 63 N.Y.2d 316, 472 N.E.2d 13 (1984); State v. Krajger, 182 Conn. 497, 438 A.2d 745 (1980); Maughan v. State, 473 So. 2d 1140, 1143 (Ala. Crim. App. 1985); State v. Guayante, 63 Or. App. 212, 663 P.2d 784 (1984); People v. Benjamin, 101 Mich. App. 637, 300 N.W.2d 661 (1981). [2] For a discussion of the Innis case, see, e.g., 1 LaFave & Israel, Criminal Procedure sec. 6.7 (1984); White, Interrogation Without Questions: Rhode Island v. Innis and United States v. Henry, 78 Mich. L. Rev. 1209 (1980); Comment, Rhode Island v. Innis, 9 Hofstra L. Rev. 691 (1981).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348066/	404 S.E.2d 887 (1991) STATE of North Carolina v. Eddie Lee SHAW. No. 9016SC202. Court of Appeals of North Carolina. Heard September 27, 1990. Decided June 18, 1991. Atty. Gen. Lacy H. Thornburg by Asst. Atty. Gen. Mary Jill Ledford, Raleigh, for State. Musselwhite, Musselwhite & McIntyre by David F. Branch, Jr., Lumberton, for defendant-appellant. PARKER, Judge. Defendant pled guilty to the charge of felonious possession of a controlled substance in violation of N.C.G.S. § 90-95(a)(3), reserving his right to appeal, pursuant to N.C.G.S. § 15A-979(b), the trial court's denial of his motion to suppress. Defendant based his motion to suppress one bag of psilocybin, a Schedule 1 substance, on the allegation that the search warrant leading to discovery of the evidence was based on information obtained in violation of federal wiretapping statutes. 888 The trial judge denied the motion, holding that Rickenbaker v. Rickenbaker, 290 N.C. 373, 226 S.E.2d 347, aff'g as modified 28 N.C.App. 644, 222 S.E.2d 463 (1976), the leading case in this State upholding the suppression of evidence under the federal wiretapping statutes, was distinguishable. We find that Rickenbaker is controlling and that defendant's motion was improperly denied. We, therefore, reverse. The search warrant in this case was issued to Detective John Moore. Detective Moore's application for the warrant and his accompanying affidavit relied on the contents of a tape-recorded telephone conversation between defendant and another young man to establish probable cause to believe that defendant was in possession of a controlled substance. The other man's mother had obtained the tape recording on her own initiative, apparently by attaching a microcassette tape recorder to a telephone extension line in her house. She called the police after listening to the recorded conversation, part of which involved the speakers' plans to get together about "shrooms," the street name for mushrooms (psilocybin). The mother played the tape for Detective Moore and identified the speakers as her son and defendant. Evidence at the suppression hearing suggested that the woman's son and defendant did not know about, and had not consented to, the taping of their phone conversation. Neither the mother nor defendant testified on voir dire. The sole question on appeal is the legality under the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. 2510 et seq. (Title III), of the surreptitious tape recording of defendant's telephone conversation by the parent of his telephone partner and the admissibility of evidence obtained pursuant to a warrant issued on information contained in the audiotape. In Rickenbaker, the estranged husband had an extension line from the telephone in the marital home installed in a closet in his downtown office. Husband installed a recording device on this extension and, unknown to his wife, recorded her telephone conversations. The Supreme Court reasoned that such interception did not fall within any of the exceptions to the wiretapping prohibitions enumerated in the statute, specifically the exception for telephone lines used "in the ordinary course of ... business." 18 U.S.C. § 2510(5)(a)(i). In Rickenbaker the Court based its holding on the express provisions of Title III, and stated unambiguously that Title III is to be interpreted from its plain language. "Where the statutory language is clear, there is no need to refer to legislative history." 290 N.C. at 382, 226 S.E.2d at 352. Rickenbaker quoted 18 U.S.C. § 2515 in support of its decision that the husband's unconsented recordings had to be suppressed, unless his wiretapping fell within a stated statutory exception. No part of the contents of such communication and no evidence derived therefrom may be received in evidence at any trial, hearing, or other proceeding in or before any court ... if disclosure of that information would be in violation of this chapter. 290 N.C. at 382, 226 S.E.2d at 352 (emphasis in original). Rickenbaker also quoted the following language from Title III as relevant to its determination. [A]ny person who(a) willfully intercepts... any wire or oral communication;... (b) willfully uses any ... mechanical or other device to intercept any oral communication when(i) such device is affixed to, or otherwise transmits a signal through, a wire, cable, or other like connection used in wire communication... shall be fined not more than $10,000.... 18 U.S.C. § 2511(1) (1968). By implication, the Supreme Court held that "any person" means exactly what it says. And in fact the statutory definition of "person" includes "any individual." 18 U.S.C. § 2510(6). Significantly, Rickenbaker did not follow the line of cases that the State now 889 urges this Court to adopt as the better position in two opposing lines of federal authority. The cases preferred by the State involve tape recording in the home of telephone conversations of other family members. Analogizing recording from a home extension line to eavesdropping on an extension line, which is not prohibited by Title III, these courts have found such taping not to violate Title III. Anonymous v. Anonymous, 558 F.2d 677 (2d Cir.1977); Simpson v. Simpson, 490 F.2d 803 (5th Cir.), cert. denied, 419 U.S. 897, 95 S. Ct. 176, 42 L. Ed. 2d 141 (1974); Perfit v. Perfit, 693 F. Supp. 851 (C.D.Cal.1988); London v. London, 420 F. Supp. 944 (S.D.N.Y.1976); see also Note, All's Fair: No Remedy under Title III for Interspousal Surveillance, 57 Fordham L.Rev. 1035 (1989) (authored by Cori D. Stephens). However, these cases give no satisfactory explanation for not including "any family member" within Congress' inclusive language of "any individual." Consistent with this line of cases, the State argues that 18 U.S.C. § 2510(5)(a)(i) creates an exception for taping conversations within the privacy of one's own home. The exception in section 2510(5)(a)(i) is worded, however, as follows: (5) "electronic, mechanical, or other device" means any device or apparatus which can be used to intercept a wire, oral, or electronic communication other than (a) any telephone ... (i) furnished to the subscriber or user by a provider of wire or electronic communication in the ordinary course of its business and being used ... in the ordinary course of [subscriber's or user's] business; or furnished by such subscriber or user for connection to [such] facilities.... 18 U.S.C. § 2510(5)(a)(i) (1988) (emphasis added). There was no evidence before the trial court that the mother used a microcassette recorder "in the ordinary course of business." Even if section 2510(5)(a)(i) were applicable to tape recorders when the exception refers only to "any telephone," there was also no evidence in this case that the electronic device was supplied to the mother "by a provider of [telephone] communication" in the ordinary course of its business. The State concedes in its brief that Title III makes no express exception for electronic surveillance between family members. Because Rickenbaker directs us to interpret Title III by its express language, rather than by examination of legislative history or interpretation of congressional intent, the case law authority presented by the State is inapplicable in North Carolina to the facts in this case. The United States Supreme Court has similarly observed that "[t]he purpose of the [wiretapping] legislation ... was effectively to prohibit ... all interceptions of oral and wire communications, except those specifically provided for in the Act...." United States v. Giordano, 416 U.S. 505, 514, 94 S. Ct. 1820, 1826, 40 L. Ed. 2d 341, 353 (1974). We conclude, therefore, that the activity by the mother is prohibited by Title III, which states that any exceptions to its prohibitions are "specifically provided in this chapter." 18 U.S.C. § 2511(1). See also Kempf v. Kempf, 868 F.2d 970 (8th Cir.1989); Pritchard v. Pritchard, 732 F.2d 372 (4th Cir.1984); United States v. Jones, 542 F.2d 661 (6th Cir.1976); United States v. Harpel, 493 F.2d 346 (10th Cir. 1974); Heggy v. Heggy, 699 F. Supp. 1514 (W.D.Okla.1988); Nations v. Nations, 670 F. Supp. 1432 (W.D.Ark.1987); Kratz v. Kratz, 477 F. Supp. 463 (E.D.Pa.1979). Reversed. JOHNSON and EAGLES, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348081/	423 N.W.2d 398 (1988) STATE of Minnesota, Appellant, v. Brandt Edward STORVICK, Respondent. No. CX-87-2281. Court of Appeals of Minnesota. May 3, 1988. Review Granted June 23, 1988. 399 Hubert H. Humphrey, III, Atty. Gen., St. Paul, Paul G. Morreim, Freeborn County Atty., Albert Lea, for appellant. Fred W. Wellman, Gerald S. Weinrich, Austin, for respondent. Heard, considered and decided by KALITOWSKI, P.J., and RANDALL and CRIPPEN, Judge. OPINION CRIPPEN, Judge. The state appeals a pre-trial ruling suppressing evidence seized and statements made as a result of the warrantless search of defendant's home. Because the police lacked exigent circumstances to enter the home, we affirm the suppression order and the dismissal of those charges which were founded on the illegally obtained evidence. FACTS Shortly after 9:00 p.m. on May 27, 1987, Carol Marie Jensen was struck by a hit-and-run driver on a county road, and she died of her injuries soon thereafter. A witness who was walking with her at the time stated that the car that struck Ms. Jensen was traveling at a high rate of speed and continued down the road without slowing or stopping after the impact. The witness made an approximate identification of the car by size, color and year. Police arrived at the scene shortly afterwards. They retrieved pieces of glass and bits of plastic broken from the vehicle. They observed no braking marks at the scene. At the hospital where Ms. Jensen was taken, one officer obtained her right tennis shoe. Police determined from the debris found that the vehicle was a Ford manufactured after March 1985. At about 11:15 p.m., an officer driving near the accident scene encountered a newer model Ford that fit the description of the hit-and-run vehicle. The right front of the car was damaged and what appeared to be human hair was found on the broken part. Another officer compared the pieces found at the scene with the car and determined that they matched. The driver of the Ford was Larry Brandt, respondent Brandt Storvick's brother-in-law. He told police that he had just picked up the car at Storvick's house, which was nearby. Brandt said he took the keys from Storvick's bedroom where Storvick was sleeping. The police proceeded to Storvick's house. Meanwhile, they learned from Brandt that Storvick might have firearms at his house. When the police officers arrived at Storvick's house, they saw a shoe in the driveway which was later determined to be the mate to Ms. Jensen's. The officers knocked on the door and rang the doorbell; but got no answer. The house was dark but one of the officers said he heard a noise coming from upstairs. Two officers then entered the garage, and repeatedly called for Storvick. The officers then entered the lower level of the house through the door in the garage. They identified themselves and eventually Storvick responded. The sheriff asked him if they should go upstairs or if Storvick would come down; Storvick said he would come down. Storvick came downstairs to the lower level. He was upset and asked if it was proper for the officers to be in the house. 400 The sheriff commented that they had been invited in by him. The officers asked Storvick about the accident several times. He was not responsive, and said the whole thing was too scary and he had nothing to say. The officers noted a strong odor of liquor about Storvick. The officers arrested Storvick for leaving the scene of a personal injury accident. They read him the Miranda warning, and Storvick did not acknowledge whether he understood. When the officers mentioned the odor of alcohol, Storvick said "I had something to drink after I got home." One officer accompanied Storvick while he got dressed upstairs, and looked around in the upstairs bedrooms for evidence of alcohol consumption. Meanwhile the other officer looked into some kitchen cupboards, in the kitchen garbage bag, and in a garbage can in the garage. Neither found any empty bottles or other evidence of drinking. The officers took respondent to a nearby hospital where they took a blood sample from him, over Storvick's objection, at 12:03 a.m. His blood alcohol content was .19. In the next few days, the police interviewed a number of people who saw Storvick that evening before 9:00. All of them stated that he showed no signs of intoxication and that they did not see him drinking, with the exception of one beer while he and his family were boating between 7:45 and 8:30. Several of the witnesses saw Storvick between 8:30 and 9:00. One woman saw Storvick drive by and waved to him shortly after 9:00, about 1500 feet from the scene of the accident. She also stated he was not driving erratically. Storvick's wife told the police she searched their house the day after the accident for evidence of his drinking. In a locked cupboard in the basement, she found two empty flasks, which she said had contained some whiskey and vodka four days before the accident. Storvick was originally charged as follows: Count I, criminal vehicular operation resulting in death (gross negligence), Minn. Stat. § 609.21, subd. 1(1) (1986); Count II, criminal operation resulting in death (while under the influence of alcohol), section 609.21, subd. 1(2) (1986); Count III, gross misdemeanor DWI, section 169.121, subds. 1(a), 3(a) (Supp.1987); Count IV, leaving the scene of a crash resulting in a fatality, section 169.09, subds. 1, 14(a)(1) (1986); and Count V, failure to notify law enforcement agency of a crash resulting in a fatality, section 169.09, subds. 6, 14(a)(1) (1986). At the omnibus hearing, the prosecutor was permitted to amend the complaint to include Counts VI and VII: criminal vehicle operation resulting in death (with a blood alcohol concentration of .10 or more), Minn. Stat. § 609.21, subd. 1(3) (1986); and driving a motor vehicle while having an alcohol concentration of .10 or more, section 169.121, subds. 1(d), 3(a) (Supp.1987). After the omnibus hearing the trial court suppressed "all evidence obtained by the police as a result of their illegal warrantless entry into Defendant's home;" including Storvick's statements to the police, the police officers' observations that he smelled of alcohol, and the results of the blood test. The court dismissed the consumption-related charges, Counts II, III, VI, and VII of the amended complaint, for lack of probable cause. The trial court stated that the warrantless search violated the fourth amendment because it was neither consensual nor justified by exigent circumstances. Suppression of the evidence left the state inadequate evidence to establish probable cause that respondent was intoxicated at the time of the accident, so the trial court dismissed counts relating to his intoxication. The state appeals. ISSUE Did the trial court err in suppressing the evidence and dismissing the charges related to intoxication? ANALYSIS When the state appeals from a pretrial suppression order, on appeal we are to reverse the determination of the trial court only if the state demonstrates clearly and unequivocally that the trial court has erred 401 in its judgment and that, unless reversed, the error will have a critical impact on the outcome of the trial. State v. Webber, 262 N.W.2d 157, 159 (Minn.1977). The paramount interest protected by the fourth amendment to the U.S. Constitution is the sanctity of the home. The fourth amendment "prohibits the police from making a warrantless and nonconsensual entry into a suspect's home in order to make a routine felony arrest." Payton v. New York, 445 U.S. 573, 576, 100 S. Ct. 1371, 1375, 63 L. Ed. 2d 639 (1980). Lacking consent, the police entry into respondent's home can be justified only if exigent circumstances existed at the time. The officers have a heavy burden to sustain a warrantless search or arrest in the home because these acts are per se unreasonable absent exigent circumstances. State v. Lohnes, 344 N.W.2d 605, 610 (Minn.1984). The United States Supreme Court has not specifically defined "exigent circumstances." Id. However, the widely followed case of Dorman v. United States enumerates six factors which must be met to justify a warrantless entry. Dorman, 435 F.2d 385, 392-94 (D.C.Cir.1970). The Minnesota Supreme Court expressed its agreement with the factors: First, that a grave offense is involved, such as a crime of violence; second, that the suspect is believed to be armed; third, that there be a clear showing of probable cause to believe the suspect committed the crime; fourth, strong reason to believe the suspect is on the premises; fifth, a likelihood the suspect will escape if not swiftly apprehended; sixth, that although the entry may not be with consent it must be peaceable. State v. Lasley, 306 Minn. 224, 232, 236 N.W.2d 604, 609 (1975). More recently, the supreme court stated that rather than adopting an inflexible list of six possible factors, Minnesota courts should "consider the totality of the circumstances surrounding the entry and the seizure." Lohnes, 344 N.W.2d at 611. The six factors are useful as guidelines in deciding whether exigent circumstances existed. The strongest reason justifying the entry was the seriousness of the offense. The police knew a victim had been severely and probably fatally injured. In addition, it is evident police had probable cause to conclude respondent was asleep at home. The police officers' entry into the house appeared to be peaceful, although they were not let in the door and they were armed when they entered Storvick's house. The fact that Storvick was asleep in bed and it was nighttime made the officers' entrance somewhat more threatening. The case presents more difficult questions as to fear appellant was armed, knowledge that he was the driver of the car involved in the incident, and anticipation that he might escape. As for dangerous weapons, the instrument that caused the death, Storvick's car, was in the custody of the police. The police knew Storvick was home and not out driving while possibly intoxicated. As the trial court stated, "[w]hile the charges are of a serious nature, there was no gun, knife or weapon used in the commission of the crime." The police were informed that Storvick might have guns in his house, but they had no reason to believe the guns presented a danger to them. Appellant was not known to have a criminal reputation, there was no evidence an intentional homicide had occurred, and there was no other evidence appellant was apt to be violent. On the other hand, it was Storvick's brother-in-law who mentioned the guns, and his closer knowledge of Storvick adds credibility to any warning he might have given the police. The police had some cause to believe that Storvick had driven the hit-and-run vehicle. First, the police had found the likely hit-and-run vehicle. Witnesses had identified the crash car as similar in model, year and color; the vehicle had damage consistent with the impact, and what looked like human hair had been found on it. Storvick's brother-in-law told the police that the car was one Storvick borrowed from a dealership and that Storvick had been driving the car earlier that evening. He also told police 402 that he had found the car at Storvick's house and the keys in Storvick's clothing in his bedroom, where Storvick was asleep. When they arrived at Storvick's house, the police found a tennis shoe in the driveway that could have been the victim's. A witness saw Storvick shortly before the accident, driving about 1500 feet from the scene of the impact, but the police did not interview her until the next morning. On the other hand, the police talked to the brother-in-law, Larry Brandt, more than two hours after the accident, so his statement as to when Storvick was driving was not necessarily accurate. Further, it would have been reasonable for the police to suspect Brandt was the hit-and-run driver because he was driving the suspected car. It is not clear whether Brandt voluntarily encountered the police. The officer testified that when he approached the Ford with his lights flashing, the car stopped. When the officer got out of his squad car, Brandt then got out of his car. The officer did not indicate that Brandt showed any signs of intoxication, but it would have been logical to check. Brandt insisted to the officer that he had not been driving the car earlier, and that Storvick had. The police were clearly not in hot pursuit of Storvick; they had not been following or chasing him and he had not just left the scene of the accident. There was no imminent danger to human life, because Storvick was not driving and the police had the car. Furthermore, before they entered his house, the police had no evidence that Storvick was intoxicated. There was no indication that Storvick might flee the area; he was asleep in bed in his home and making no effort to hide. Because Storvick was known to live nearby, the police knew he was not a stranger in town who would likely run from the area. A related concern is the possibility of imminent destruction of the evidence. The state argued that a large percentage of serious highway accidents are caused by drivers influenced by chemicals and therefore it was imperative for the police to determine whether Storvick was intoxicated. The trial court rejected this argument for two reasons: the police did not have sufficient evidence Storvick was driving the vehicle at the time of the accident, and during the lapse of time between the accident (just after 9:00 p.m.) and the police arriving at Storvick's house (between 11:15 and midnight) the evidence of alcohol would have dissipated to some extent. The state must meet a heavy burden to sustain a warrantless search, and we must affirm trial court judgment on the question which is not clearly wrong. Without more likely use by Storvick of a dangerous weapon, and where the police were not in hot pursuit of someone likely to escape, there were not sufficient exigent circumstances to compel reversing the trial court decision. The totality of the circumstances do not require a different result. See Lohnes, 344 N.W.2d at 611. DECISION We conclude the state did not meet its burden of showing exigent circumstances that would justify intrusion into appellant's home. The trial court correctly excluded evidence seized and statements respondent made as a result of the warrantless entry. Without this evidence there was insufficient evidence of respondent's intoxication, and the trial court correctly dismissed the charges relating to intoxication.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348086/	423 N.W.2d 729 (1988) In re the MARRIAGE OF Mary Ann STEFFAN, petitioner, Appellant, and James N. Steffan, Respondent. No. C0-87-2113. Court of Appeals of Minnesota. May 24, 1988. 730 Becky Skinner Toevs, Wayzata, for petitioner, appellant. Earle T. Anderson, Golden Valley, for respondent. Heard, considered and decided by FORSBERG, P.J., and FOLEY and NORTON, JJ. OPINION NORTON, Judge. This appeal is from an order denying appellant's motion to vacate a dissolution judgment and decree, or in the alternative, to set aside the underlying stipulation. We affirm in part, reverse in part and remand. FACTS Appellant Mary Ann Steffan commenced dissolution proceedings in January 1985. Respondent James N. Steffan is employed as vice president, secretary and treasurer of a Twin Cities' company. At the time the dissolution was commenced in 1985, his base salary was $60,000 per year. He additionally earned a bonus from the company and dividends from his stocks. The following year respondent's salary was raised to a base salary of $70,000. He additionally earned a net bonus of approximately $8600. At the time of the final hearing in January 1987, his base salary had increased to $77,000 per year. In June 1987, respondent received a net bonus of approximately $22,000. Appellant was unemployed at the time of the final dissolution hearing, and had been for some time prior to the commencement of the proceedings. In 1975, it was discovered that appellant had an aneurysm. Surgery was performed which resulted in eye damage as well as a stroke in early 1976. Appellant was left with permanent damage, including cognitive deficits resulting in difficulty with her short term memory, organization, word finding and reading ability. She is in chronic pain and has a continuing problem with depression. Both parties agree that appellant's condition is permanent and that she is essentially unemployable. At the trial in January 1987, respondent testified that he expected to receive a bonus in June. He was not asked to estimate the amount of the bonus. The parties settled in the afternoon and a stipulation was read into the record. The stipulation provided appellant with permanent maintenance in the amount of $1500 per month. After subtracting joint debts of the parties paid by respondent, each party received approximately 50% of the assets. There was no mention in the stipulation of respondent's 1987 bonus. 731 When questioned by her attorney and the trial court, appellant never agreed or disagreed with the proposed stipulation. Appellant was concerned that $1500 per month maintenance would not adequately provide for her and cover her extra medical expenses. Appellant had no further questions after it was explained that she had lifetime maintenance, medical insurance, and could move for modification at a later date. Appellant took the proposed findings of fact and conclusions of law to another attorney prior to giving her counsel approval to finalize the stipulation. The stipulation was incorporated into the judgment which was entered in February 1987. Respondent's 1987 bonus was not included or mentioned in the stipulation and decree. In July 1987, appellant moved to vacate the judgment due to fraud on the court and the administration of justice. Alternatively, appellant moved to vacate the underlying stipulation due to fraud, duress, mistake or incompetent counsel. Appellant additionally asked for an evidentiary hearing regarding spousal maintenance, allocation of debt and property, and payment of attorney fees. The trial court denied appellant's motion in all respects. This appeal followed. ISSUES I. Did the trial court abuse its discretion in refusing to set aside the stipulation? II. Did the trial court abuse its discretion in refusing to vacate the judgment and decree? ANALYSIS I. Courts favor stipulations, particularly in dissolution cases. They cannot be repudiated or withdrawn by one party without the consent of the other party except by leave of the court for cause shown. Courts may set aside stipulations for fraud, duress or mistake. A trial court's determination not to vacate a stipulation will not be disturbed absent an abuse of discretion. Tomscak v. Tomscak, 352 N.W.2d 464, 466 (Minn.Ct.App.1984). This court has set forth factors to determine whether a stipulation was properly accepted by the trial court: (1) whether the party was represented by competent counsel; (2) whether extensive and detailed negotiations occurred; (3) whether the party agreed to the stipulation in open court; and (4) whether when questioned by the judge the party acknowledged understanding the terms and considering them fair and equitable. Kroeplin v. Haugen, 390 N.W.2d 872, 875 (Minn.Ct.App.1986), pet. for rev. denied (Minn.Sept. 25, 1986). Examination of these factors establishes that the stipulation was properly accepted. (1) Appellant first claims that her counsel was incompetent, because he failed to do sufficient discovery to ascertain respondent's true assets, debts and income, and because he did not fully understand the nature of her medical condition. There is no evidence before this court that appellant's former counsel was derelict in his duty. Appellant was represented by competent counsel during the dissolution proceeding. (2) The record next shows that extensive and detailed negotiations regarding maintenance and property division occurred. From the correspondence, it appears that the parties had been discussing distribution of the assets and maintenance for over a year. (3) It is true that appellant never explicitly agreed to the stipulation in open court as required by the third factor. However, this court has held that parties may acquiesce to a stipulation even though they may not have actually stated such agreement in open court. See Pekarek v. Wilking, 380 N.W.2d 161, 164 (Minn.Ct.App. 1986) (acquiescence can be shown by the party waiting several weeks before executing the final stipulation); Yeager v. Yeager, 405 N.W.2d 519, (Minn.Ct.App.1987) (party acquiesced to stipulation by generally 732 not objecting to the stipulation, waiving right to counsel, and approving of a default hearing). In this case, we believe that appellant acquiesced to the agreement by taking the stipulation to another attorney before giving her attorney approval to complete the stipulation. Additionally, more than two weeks elapsed between the time of the stipulation and the time of the final judgment. (4) Appellant finally argues that she did not understand the stipulation as evidenced by her questions to the trial court. But the trial court specifically answered all of her questions regarding maintenance and medical insurance. The record shows that she understood the terms of the stipulation, and was only concerned that $1500 may not sufficiently cover her medical bills which were not covered under her medical insurance. Appellant has not shown that the trial court erred in denying her motion to vacate the stipulation. II. This court may set aside a divorce judgment and decree under circumstances which amount to fraud on the court and administration of justice. See Lindsey v. Lindsey, 388 N.W.2d 713, 716 (Minn.1986). A finding of fraud upon the court and the administration of justice must be made under the peculiar facts of each case. Id. Appellant argues that for the administration of justice, the judgment should be set aside due to the inequitable property distribution. She specifically argues that the trial court improperly gave respondent credit for debts he incurred after the separation in the amount of approximately $10,000. However, this amount appears to represent payments on joint debts and purchase of stock. Because the property settlement is within an equitable range, it will not be disturbed. Appellant next argues that her mental condition rendered the judgment and decree a fraud on the court. In Lindsey, 388 N.W.2d 713, the woman had severe mental illness and was a manic depressive. The trial court had modified the judgment because the woman received only $12,500 as a lien on the homestead even though the value of the home had increased to $107,000. The supreme court found sufficient evidence of fraud on the court and the administration of justice to warrant setting aside the judgment where the woman: clearly lacked the capacity to validly enter into a stipulated dissolution decree. Her mental and emotional condition at the time of the dissolution precluded her from being able to fairly and reasonably understand the matters under consideration. Id. at 716 (citation omitted). In this case, appellant's mental condition is not as severe as was the woman's in Lindsey. Although appellant does suffer from depression, both she and her psychologist state that she is able to comprehend information. Appellant also claims that fraud upon the court was committed when respondent did not disclose his 1987 bonus, which he received in June 1987. This court has stated that: Facts alleged to constitute fraud on the court must be evaluated by trial courts on a case by case basis. A breach of the duty to disclose, depending on the extent of the failure, amount of property involved, seriousness, and willfulness may support allegations of fraud serious enough to justify setting aside a judgment. Adams v. Adams, 393 N.W.2d 508, 510 (Minn.Ct.App.1986), pet. for rev. denied (Minn. Nov. 19, 1986). In Adams, this court held that the husband's nondisclosure of numerous stock holdings and dividend income totaling more than $33,000 was not fraud upon the court. We therefore refused to vacate the judgment and stipulation even though the wife did not fully understand the agreement due to her psychological problems. Respondent's actions in this case do not amount to fraud. Respondent has disclosed his net bonuses from 1979-1986. Respondent said he expected to receive a bonus in June, but was not asked to estimate 733 the expected amount. The trial court did not abuse its discretion in finding no fraud on the court in regard to respondent's 1987 bonus. Nevertheless, we believe that the bonus is a marital asset which should have been divided by the trial court. Characterization of property as either marital or nonmarital is a question of law upon which we exercise independent judgment. Van de Loo v. Van de Loo, 346 N.W.2d 173, 175 (Minn.Ct.App.1984). In Janssen v. Janssen, 331 N.W.2d 752, 754 (Minn.1983), the supreme court held that a nonvested, unmatured pension constituted marital property in Minnesota, because it is "more than a mere expectancy it becomes a chose in action, a contractual right: a property interest." (emphasis deleted). Following Janssen, this court held that stock options given as part of an employment agreement, but subject to forfeiture if employment terminated before the exercisable dates, were marital assets. Salstrom v. Salstrom, 404 N.W.2d 848, 850-51 (Minn.Ct.App.1987). Respondent's bonus in this case was similarly subject to forfeiture if he terminated his employment with the company prior to March 1987. In February 1987, at the time the judgment was entered, respondent had more than an expectancy to his bonus; he had a property interest. Because we conclude that the bonus is a marital asset, it should have been included in the property settlement, and apportioned between the parties. See id. at 851. We recognize that it would have been more appropriate if appellant had brought a motion to the district court for modification to include any property of value not specified in the decree. See Steele v. Steele, 304 N.W.2d 34, 35 (Minn.1981). On remand, the trial court should consider it as such. Appellant may only be entitled to half of the value of the bonus earned prior to entry of judgment; the percentage of the bonus earned after the dissolution would be nonmarital property. See Salstrom, 404 N.W.2d at 851-52. DECISION The trial court did not abuse its discretion in refusing to vacate the stipulation. The trial court did not abuse its discretion by not vacating the judgment for fraud on the court, but it should have modified the judgment to include the 1987 bonus which was not specified in the decree. We therefore remand to the trial court to divide respondent's 1987 bonus as a marital asset, which was excluded from the property settlement. Affirmed in part, reversed in part and remanded.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2435894/	967 N.E.2d 501 (2008) 382 Ill. App. 3d 1221 359 Ill. Dec. 771 PEOPLE v. HOWARD. No. 3-06-0484. Appellate Court of Illinois, Third District. May 14, 2008. Rev'd & rem.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1725819/	275 N.W.2d 32 (1979) COLUMBIA HEIGHTS MOTORS, INC., Respondent, v. ALLSTATE INSURANCE COMPANY, Appellant. No. 48431. Supreme Court of Minnesota. January 12, 1979. 33 Meagher, Geer, Markham, Anderson, Adamson, Flaskamp & Brennan & Gary M. Hagstrom and J. Richard Bland, Minneapolis, for appellant. Rischmiller, Wasche & Knippel, Minneapolis, for respondent. Heard before PETERSON, YETKA, and WAHL, JJ., and considered and decided by the court en banc. YETKA, Justice. This is an appeal by defendant Allstate Insurance Company from an order of the Hennepin County District Court granting summary judgment to plaintiff Columbia Heights Motors, Inc., and from judgment entered October 27, 1977. We affirm. Plaintiff is a corporation engaged in the sales and service of automobiles. In 1973, plaintiff contracted with defendant for business insurance, and defendant issued its Business Package Policy No. 11 599 944BP to plaintiff, effective June 1, 1973. The policy provided several types of coverage, including general liability, garage liability, automobile liability, automobile physical damage, loss of business income, and loss or damage to property. Premiums were computed on an annual basis; the policy period ran from June 1, 1973 to June 1, 1976. During the policy period plaintiff sustained a loss through the dishonest activities of one of its employees. The yearly breakdown of that loss was as follows: June 1, 1973 to May 30, 1974 $ 1,543.21 June 1, 1974 to May 30, 1975 $31,386.50 June 1, 1975 to May 30, 1976 $29,819.76 Defendant acknowledges that the type of loss incurred is covered by the policy, but argues that because the loss was caused by the activities of only one employee, maximum liability under the policy is $25,000 for the entire policy period. Plaintiff contends that the policy covers the loss up to $25,000 per year for each of the three years. 34 After a hearing on cross motions for summary judgment on the issue of the limits of defendant's liability, the district court granted plaintiff's motion for summary judgment on the basis that the policy was ambiguous with respect to the amount of coverage.[1] Judgment was entered pursuant to the order, and defendant appealed. The legal issue posed in this appeal is whether the trial court erred in finding that the language of the insurance policy was ambiguous and in resolving that ambiguity in favor of the insured. Whether the language of an insurance policy is ambiguous is a question of law to be decided initially by the trial court. This court, on appeal, must determine whether the trial court was correct in finding ambiguity. ICC Leasing Corp. v. Midwestern Machinery Co., 257 N.W.2d 551, 554 (Minn.1977). If the language of the policy is reasonably subject to more than one interpretation, there is ambiguity. Id. If it is not reasonably subject to more than one interpretation, there is no ambiguity. A court may not "read an ambiguity into the plain language of a policy in order to provide coverage." Farkas v. Hartford Accident and Indemnity Co., 285 Minn. 324, 327, 173 N.W.2d 21, 24 (1969). In interpreting the policy language, a court is to give the terms "their plain, ordinary, and popular meaning." Ostendorf v. Arrow Insurance Co., 288 Minn. 491, 495, 182 N.W.2d 190, 192 (1970). In this case, four policy provisions are relevant to determining appellant's liability: (1) Condition 10 of the General Provisions, which states: "10. Application of Aggregate Limits of Liability "Any limit of Allstate's liability stated in this policy as `aggregate' shall apply separately to each consecutive annual period." (2) Insuring Agreement IA of the Comprehensive Crime Form, which provides that "Allstate agrees to pay for:" "Loss of Money. Securities and other property which the Insured shall sustain, to an amount not exceeding in the aggregate the amount stated in the Table of Limits of Liability applicable to this Insuring Agreement IA through any fraudulent or dishonest act or acts committed by any of the Employees, acting alone or in collusion with others." (3) the Table of Limits of the Comprehensive Crime Form, which indicates that the limit of liability under Insuring Agreement IA is $25,000; and (4) Section 11 (Limits of Liability) of the Comprehensive Crime Form, which provides that "Payment of loss under Insuring Agreement IA, IB or V shall not reduce Allstate's liability for other losses under the applicable Insuring Agreement whenever sustained. Allstate's total liability (a) under Insuring Agreement IA for all loss caused by any Employee or in which such Employee is concerned or implicated, (b) under Insuring Agreement IB as to each Employee or (c) under Insuring Agreement V for all loss by forgery or alteration committed by any person or in which such person is concerned or implicated, whether such forgery or alteration involves one or more instruments, is limited to the applicable amount of insurance specified in the Table of Limits of Liability or endorsement amendatory thereto. The liability of Allstate for loss sustained by any or all of the Insured shall not exceed the amount for which Allstate would be liable had all such loss been sustained by any one of the Insured. "Except under Insuring Agreements IA, IB and V the applicable limit of liability stated in the Table of Limits of Liability in the Schedule is the total limit of Allstate's liability with respect to all loss of property of one or more persons or organizations arising out of any one occurrence. All loss incidental to an actual or attempted fraudulent, dishonest or criminal act or series of related acts at 35 the Premises, whether committed by one or more persons, shall be deemed to arise out of one occurrence. "Regardless of the number of years this form shall continue in force and the number of premiums which shall be payable or paid, the limit of Allstate's liability as specified in the Table of Limits of Liability in the Schedule shall not be cumulative from year to year or period to period." There seems to be no dispute as to the meaning of Condition 10; the meaning of Insuring Agreement IA is not in dispute insofar as both parties apparently agree that defendant may, in some circumstances, be liable for up to $25,000 per year; and there is no dispute that the Table of Limits of Liability limits liability to $25,000. Section 11 is the provision in dispute. Defendant contends that this provision limits total liability for the entire policy period for all loss caused by a single employee. Plaintiff argues that this provision states a $25,000 limit per "consecutive annual period." The trial court's memorandum of law, accompanying its findings, is brief and to the point, so we will set it out in full herein: "A reading of the disputed insurance policy reveals that ambiguities exist. The ambiguities which give rise to the present motion can be summarized as follows: "A. 1. Form U8003B [hereinafter referred to as the general provisions] page GPP 1 provides: "The following conditions apply to Sections I-VI except as specifically indicated therein. Additional Conditions or Modifications of the following Conditions may appear in the policy Sections.' 2. Form U8112B [hereinafter referred to as the Comprehensive Crime Form] page PCC 2 provides: `This form is subject to the provisions and stipulations herein and endorsed hereon, the schedule(s) of this form, the Declarations and the applicable General Provisions of this Policy.' "B. 1. Insuring Agreement 1A of the Comprehensive Crime Form provides that: `[Allstate agrees to pay] loss . . . which the insured shall sustain, to an amount not exceeding in the aggregate the amount stated in the Table of Limits of Liability [$25,000.00] . . .' 2. Condition/Limitation Section 11 of the Comprehensive Crime Form which provides: `Allstate's total liability (a) under Insuring Agreement 1A for loss caused by an Employee, or in which such Employee is concerned or implicated . . . is limited to the applicable amount of insurance specified in the Table of Limits of Liability . . .' And further, `Regardless of the number of years this form shall continue in force and the number of premiums which shall be payable or paid, the limits of Allstate's liability as specified in the Table of Limits of Liability in the Schedule shall not be cumulative from year to year or period to period.' "The ambiguity which has precipitated this dispute comes from the interrelation of A & B above. This arises as follows: "1. Condition 10 (GPP4) states that: `Any limit of Allstate's liability stated in this policy as "aggregate" shall apply separately to each consecutive annual period.' "Plaintiff contends that this condition is made applicable by the language cited from Form U8003B, page GPP1. Plaintiff thus contends that when Insuring Agreement 1A (cited above) uses this term, the construction supplied by Condition 10 should apply. "2. Defendant contends that the definition of `Aggregate' supplied by Condition 10 does not apply by reason of: a. The language from form U8112B page PCC 2 (cited above); and, b. The limiting language of Section 11 of the Comprehensive Crime Form (cited above). 36 "At this state then, it seems undeniable that a real ambiguity does exist. The initial insuring agreement appears to provide $25,000 of employee dishonesty commercial blanket coverage per year; a limiting condition appearing some 7 pages later purports to cut that coverage from $25,000 per year, to a total of $25,000 regardless of the number of years. "In the construction of insurance contracts, the courts are guided by a multitude of rules, maxims and cannons [sic]. When ambiguities are present in a policy, specific rules of law control. The Minnesota Court has recently and unequivocally affirmed its position that: `Ambiguities are to be resolved against the insurer and in accordance with the reasonable expectations of the insured. Caledonia Community Hospital v. St. Paul Fire and Marine Insurance Company, 307 Minn. 352, 239 N.W.2d 768, 770 (1976), citing Northwest Airlines, Inc. v. Globe Ind. Co., 303 Minn. 16, 26, 225 N.W.2d 831, 837 (1975); Casperson v. Webber, 298 Minn. 93, 98, 213 N.W.2d 327, 330 (1973).' This is a well known and accepted principle of law as shown by the authorities collected in 1 Couch, Cyclopedia of Insurance Law 2nd § 15:73. Additionally, as succinctly summarized by Mr. Justice Scott in Hennen v. St. Paul Mercury Ins. Co., 312 Minn. ___, 250 N.W.2d 840, 844 (1977) the Courts must heed: `. . . Minnesota's strong policy of extending coverage rather than allowing coverage to be restricted by confusing or ambiguous language . . .' Applying these rules to the instant factual situation, it becomes apparent that Plaintiff's position must be sustained. "As a conclusion, it should be added that the Court is aware that it must fastidiously guard against the invitation to `create ambiguities' where none exist (Farkas v. Hartford Acc. & Indem. Co., 285 Minn. 324, 173 N.W.2d 21 (1969). However, a careful and thorough reading of the instant policy reveals a real ambiguity on a crucial matter. In light of the foregoing, that ambiguity must be resolved in favor of the insured." We agree with the trial court that certainly the policy is subject to more than one interpretation. Were we to accept one interpretation, plaintiff's interpretation would appear to be the more reasonable. Both the general conditions and the insuring agreement use the word "aggregate" to refer to an annual limitation on defendant's liability; the insuring agreement and the table of limits of liability, read together, limit defendant's liability for any particular year to $25,000. In addition, the last paragraph of section 11 of the comprehensive crime form would appear to prevent cumulation of any portion of the $25,000 annual limit unpaid in previous years. However, we need not decide which interpretation is the more accurate. The reference in section 11 to a limitation on "total" liability and the reference in the insuring agreement to a limitation on annual liability raise a reasonable doubt regarding the limitations of liability. The general rule in Minnesota is that any reasonable doubt as to the meaning of the language of an insurance policy must be resolved in favor of the insured. Farkas v. Hartford Accident and Indemnity Co., supra, 285 Minn. at 327, 173 N.W.2d at 24. Since such a reasonable doubt exists, the trial court correctly found for plaintiff. Affirmed. OTIS, J., took no part in the consideration or decision of this case. NOTES [1] The actual amount of plaintiff's loss and defendant's liability is yet to be litigated.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348469/	963 P.2d 511 (1998) 125 N.M. 434 1998-NMSC-018 STATE of New Mexico, Plaintiff-Appellee, v. Dion HENDERSON, Defendant-Appellant. No. 23475. Supreme Court of New Mexico. June 11, 1998. Monica Munoz, Albuquerque, for Defendant-Appellant. Hon. Tom Udall, Attorney General, William McEuen, Assistant Attorney General, Santa Fe, for Plaintiff-Appellee. OPINION FRANCHINI, Chief Justice. {1} Dion Henderson appeals his convictions for one count of first-degree murder contrary to NMSA 1978, § 30-2-1(A) (1994), and one count of second-degree murder with a firearm enhancement, contrary to Section 30-2-1(B) (second-degree murder) and 512 NMSA 1978, § 31-18-16(A) (1993) (firearm enhancement). The Defendant raises several claims on appeal including the claim that he was denied a fair trial by the judge's actions and comments. Because we hold that the Defendant was denied a fair trial by the judge's actions and comments, we do not reach the other claims raised in this appeal. Facts. {2} Jared Newman and Loren Jack were shot and killed by the Defendant at a party on August 28, 1994. Several weeks earlier a friend of the Defendant's, Chris, was beaten up by a friend of the victims. The State proceeded on the theory that the Defendant came to the party to avenge the beating of his friend. {3} Evidence was introduced that, moments before the shootings, the victims acted aggressively toward the Defendant and one of his friends. The Defense argued that the Defendant shot Newman and Jack in self-defense or in defense of another. The victims were football players who were larger and taller than the Defendant and his friend. Discussion. {4} The judge, during voir dire and during the trial, made comments and acted in a manner which the Defendant claims denied him a fair trial under the Fourteenth Amendment of the United States Constitution and Article II, Section 18 of the New Mexico Constitution. During voir dire, the judge made several comments about the judicial system and the case itself. At one point a potential juror stated that he had a problem with the laws of the State of New Mexico since his son's murderer's conviction was overturned. The judge interrupted and explained that, because the man's son had not died within a year of his injuries, the conviction could not stand under the common law. The judge went further, telling the panel that the law had been changed, but that it could not be applied retroactively to this man's son because "people in Santa Fe I guess just don't do that." The judge continued, "I don't want the fact that I am sitting here as a judge to suggest that I'm an apologist or a proponent of our system. In fact, I've become more and more critical of it myself but it's what we've got." {5} Our Code of Judicial Conduct requires that "[a] judge shall respect and comply with the law and shall act at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary." Rule 21-200(A) NMRA 1998. A judge who is critical of the legal system before a panel of prospective jurors, and who implies that the system is determined by the whims of the legislature rather than well-settled principles, is not promoting confidence in the system of which he is a part as the Code requires. {6} We have indicated that a defendant's claim that the judge's conduct denied him or her a fair trial may be sustained by showing that, by exhibiting such conduct as "undue interference," or unreasonable "impatience," or an excessively "severe attitude," the judge prevented the "proper presentation of the cause or the ascertainment of the truth." State v. Gurule, 90 N.M. 87, 93, 559 P.2d 1214, 1220 (Ct.App.1977). In this case the judge's comments during voir dire alone do not rise to that level. By themselves they may be considered "expressions of impatience, dissatisfaction, annoyance and even anger, that are within the bounds of what imperfect men and women, even after having been confirmed as ... judges, sometimes display." Liteky v. United States, 510 U.S. 540, 555-56, 114 S. Ct. 1147, 127 L. Ed. 2d 474 (1994) (holding disqualification was not required). The judge's comments to the juror whose son had been murdered were not proper, but alone they do not warrant reversal. {7} During voir dire the Prosecutor informed the panel that it should not consider the consequences of its verdict and asked whether anyone would be unable to decide the issue of guilt or innocence without considering the consequences. The judge then informed the panel that it offends my sense of intelligence, some of the things I am supposed to tell jurors, as if it is a blank slate out there .... Also, I am gonna tell you something. If there is a conviction for each count, because I have 513 no discretion, there is a thirty-year sentence, and that is without good time and without parole. Now the sentences could be imposed concurrently or consecutively, but the reason I share with you the sentence, even though you are told not to consider it, is that the legislature has already imposed sentence. I just sit here as a gatekeeper on these cases where they have taken away the discretion of the court. So I think it is inappropriate and stupid in our system to have mandatory sentences and not tell the jury the consequence of the deal. I expect you as an intelligent concerned citizen who has involved himself in that process to exercise that judgment fully informed. At the end of the trial, when he charged the jury, the judge instructed them not to consider the consequences of the verdict without explanation or reference to his earlier remarks. {8} In State v. Brown, 1997-NMSC-029, ¶¶ 12-17, 123 N.M. 413, 415-15, 941 P.2d 494, 496-97, cert. denied, ___ U.S. ___, 118 S. Ct. 426, 139 L. Ed. 2d 327 (1997), this Court restated the long established rule that the jury must not consider the consequences of its verdict. Id. It is the providence of the judge to impose the sentence and that of the jury to determine guilt or innocence. To blur the distinct roles of judge and jury is to manipulate one of the basic principles of our system of justice. Our system is flexible so as to meet the changing needs, and sometimes the changing mores, of our society. But change is accomplished through established procedure. It is made thoughtfully and deliberately, because, as a people, we have determined that this is the manner in which we prefer to implement change in our system. It is not within the powers of a single judge to unilaterally implement change in his or her courtroom. A defendant is entitled to a trial which proceeds according to established rules which can be relied on by the defense. {9} In reviewing the comments of the judge we conclude that he improperly and intentionally allowed jurors to consider the consequences of the verdict. Based on the judge's comments, it is possible that a juror may have improperly believed it was his or her duty to consider the consequences of the verdict. {10} In addition to the incidents during voir dire, the Defendant claims that he was denied a fair trial during the cross-examination of one of the State's witnesses. Defense Counsel was cross-examining a friend of the Defendant and the brother of Chris, whose beating the State offered as its theory for the motive behind the killings in this case. Defense Counsel examined the witness about the extent of the injuries to his brother and the State objected that this testimony had been asked and answered. The judge inquired as to Defense Counsel's line of questioning and Defense Counsel responded that he was "cross-examining." During the exchange that followed the judge said: Let me just tell you Mr. Harrison, when I ask you where you are going and you say you are cross-examining, I know what part of the trial we are in, and if you want to get smart about it we'll take it outside the presence of the jury .... Don't you go parading around and don't you go mouthing off; now pipe down right now. Defense Counsel asked if he could get counsel and left the room. Although Defense Counsel was not present, the judge allowed the State to ask the witness approximately a half a dozen additional questions concerning who was being aggressive just before the shootings. {11} The judge then addressed the Defendant directly: Mr. Henderson, your attorney, as far as I am concerned, misbehaved in his addressing the court and did not respond to my questions. Now you have a right to counsel and he has decided to split, and I intend to proceed with the trial, and it may be he is just trying to set this up for some, I do not know what he is trying to do. So that you will understand, when I asked him where he was going [in his cross-examination], this is the same issue we had gotten into as to how badly somebody got beat up, and once we get passed a layman's description of it like "beat up pretty bad," that was as far as I was going to go with layman testimony. Then I ask him what he is doing and he says "cross-examining" 514 which is a smart as answer cause I know that, that was what it was his turn to do. Ah, what would you have me do Mr. Henderson? The Defendant replied, "Well, I really do not know about too much about this stuff." The judge then said: And I am not prepared to make you your own, the only reason I let her [the Prosecutor] proceed is that she is going over the same stuff. Ah and I didn't know why he said he was going to go and get counsel, I didn't threaten him with contempt, I just told him to shut up and sit down. {12} At this point the State suggested that the jury be excused. The judge responded, "I'll give Mr. Henderson a chance to go find Mr. Harrison. I don't even want him to apologize, I just want him to do what he damn well should, and not get flippant with me." Turning to the Defendant the judge said, "Why don't you go find your lawyer and figure out what he wants to do. I don't intend to mistry this thing I'm not going to get into this crap." {13} The jury was then excused and a discussion was held between the State, Defense Counsel, and the judge. Defense Counsel explained that he had sought legal advice because he was concerned that the jury had been prejudiced against his client by the judge's hostility. The State suggested a curative instruction. The jury was recalled. {14} After the jury returned, the judge said, referring to the witness, "Where is our guy who wanted to get drunk and get laid?" The judge then addressed the jury: Stop for a minute and let me say folks this is an intense business, and when we started out I said this a very serious business, and these are very serious charges, and people take their jobs very seriously both for the State and for the Defense, and everybody is on edge, and these things sometimes happen, and just as I instructed you earlier, the fact that the State or the Defense makes objections you should not think they are trying to hide something from you or that they are trying to be obstructionists. Nor if we get a little testy with one another, that is what trial lawyers do. We're back in business now and what just transpired is neither here nor there. It is, at this point, ancient history. {15} We conclude that, in the incidents just described as well as those during voir dire, the judge behaved and spoke improperly and that his behavior and comments accumulated to deny the Defendant a fair trial. In State v. Martin we stated: A trial judge must exercise great care to assure a criminal defendant a fair and impartial trial. This required fairness and impartiality may often run counter to natural human reaction, particularly where the case involves a heinous crime.... Nonetheless, fairness and impartiality are required of a judge and necessitate that the judge "be patient, dignified and courteous to litigants, jurors, witnesses, lawyers and others with whom he deals in his official capacity." (Citations omitted.) State v. Martin, 101 N.M. 595, 603, 686 P.2d 937, 945 (1984) (quoting NMSA 1978, Code of Judicial Conduct, Canon 3(A)(3) (Repl. Pamp.1983) (currently codified as Rule 21-300(B)(4) NMRA 1998 (as amended 1995))). The judge transgressed these basic principles. {16} Many New Mexico cases that examine the standards for determining whether a defendant has received a fair and impartial trial focus on the judge's prejudice in favor of or against a party, or they concern the judge's own interest in the outcome of the litigation. See generally State v. Fernandez, 1994-NMCA-058, 117 N.M. 673, 677, 875 P.2d 1104, 1108 (citing State v. Hernandez, 1993-NMSC-007, 115 N.M. 6, 20, 846 P.2d 312, 326). There is no allegation that the judge in this case had a particular interest in the outcome of the trial. {17} It is also improper for a judge to comment on the evidence. See State v. Sanchez, 112 N.M. 59, 65, 811 P.2d 92, 98 (Ct.App.1991). In Sanchez, our Court of Appeals ordered the defendant's conviction reversed and remanded for a new trial after the judge referred to a witness's testimony as "worthless." Id. It is improper for a judge to comment on the credibility of a witness. Id. at 66, 811 P.2d at 99. In referring 515 to a witness as the "guy who wanted to get drunk and get laid," the judge improperly conveyed to the jury that this witness's credibility was in question. {18} The State argues that, even if the judge's comment was about the witness's credibility, the comment would have the effect of damaging the State's case and assisting the defense. We do not agree. The witness testified that he was a friend of the Defendant, and, although he was called by the State, the jury's perception of him could directly affect their view of the case and indirectly affect their view of the Defendant's credibility. It may not be possible to prove the effect of the judge's comment on the jury, but it is the rule that "[d]uring the course of a trial a judge should not make any unnecessary comments or take any unnecessary action which might prejudice the rights of either of the parties." State v. Caputo, 94 N.M. 190, 192, 608 P.2d 166, 168 (1980). {19} We note that it was improper for the judge to allow the State to question a witness while Defense Counsel was out of the room. However, because we are reversing on other grounds, and because we do not believe this issue will arise on retrial, we do not analyze it here. Conclusion. {20} Judges have wide discretion in controlling the proceedings before them and a defendant is not entitled to a perfect trial. In this case, however, we hold that the behavior and comments made by the trial judge improperly deprived the Defendant of a fair trial. We reverse and remand for a new trial. {21}IT IS SO ORDERED. BACA and SERNA, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264474/	879 F. Supp. 1254 (1995) BRITISH STEEL PLC, Plaintiff, v. UNITED STATES, Defendant. USINAS SIDERURGICAS de MINAS GERAIS, S.A., et al., Plaintiffs, v. UNITED STATES, Defendant. INLAND STEEL INDUSTRIES, INC., et al., Plaintiffs, v. UNITED STATES, Defendant. LTV STEEL CO., INC., et al., Plaintiffs, v. UNITED STATES, Defendant. LACLEDE STEEL CO., et al., Plaintiffs, v. UNITED STATES, Defendant. LUKENS STEEL CO., INC., et al., Plaintiffs, v. UNITED STATES, Defendant. Slip Op. 95-17. Court Nos. 93-09-00550-CVD, 93-09-00558-CVD, 93-09-00567-CVD through 93-09-00570-CVD. United States Court of International Trade. February 9, 1995. 1255 1256 1257 1258 1259 Regarding British Steel plc v. United States, Consol. Court No. 93-09-00550-CVD: Steptoe & Johnson (Richard O. Cunningham, Peter Lichtenbaum), (Sheldon E. Hochberg, William L. Martin, II), on brief, (Richard O. Cunningham, Sheldon E. Hochberg), on oral argument, for British Steel plc; Morgan, Lewis & Bockius (Mark R. Joelson), (Marcela B. Stras, Roger C. Wilson), on brief, for the Government of the United Kingdom, et al.; Dewey Ballantine (Michael H. Stein), (Alan Wm. Wolff, Martha J. Talley, John A. Ragosta, John R. Magnus, Jeffrey D. Nuechterlein, Guy C. Smith, Philip Karter), on brief, (John A. Ragosta, Martha J. Talley, Philip Karter), on oral argument, for Geneva Steel, et al.; Skadden, Arps, Slate, Meagher & Flom (John J. Mangan, Robert E. Lighthizer), (D. Scott Nance, Barry J. Gilman), on brief, (D. Scott Nance, Barry J. Gilman), on oral argument, for Geneva Steel, et al. Regarding Usinas Siderurgicas de Minas Gerais, S.A., et al. v. United States, Consol. Court No. 93-09-00558-CVD: Willkie Farr & Gallagher (Christopher S. Stokes), (William H. Barringer, Nancy A. Fischer), on brief, (Christopher S. Stokes), on oral argument, for USIMINAS; Dickstein Shapiro & Morin (Arthur J. Lafave, III, Douglas N. Jacobson), for Companhia Siderurgica Nacional; Skadden, Arps, Slate, Meagher & Flom (Robert E. Lighthizer, John J. Mangan), (Barry J. Gilman, D. Scott Nance), on brief, (Barry J. Gilman, D. Scott Nance), on oral argument, for Gulf States Steel, Inc., et al.; Dewey Ballantine (Michael H. Stein), (Alan Wm. Wolff, Martha J. Talley, John A. Ragosta, John R. Magnus, Guy C. Smith, Jeffrey D. Nuechterlein), on brief, (John A. Ragosta), on oral argument, for Gulf States Steel, Inc., et al. Regarding Inland Steel Industries, Inc. et al. v. United States, Consol. Court No. 93-09-00567-CVD: Dewey Ballantine (Michael H. Stein), (Alan Wm. Wolff, Martha J. Talley, John A. Ragosta, John R. Magnus, Jeffrey D. Nuechterlein), on brief, (John A. Ragosta, Martha J. Talley, John R. Magnus), on oral argument, for Inland Steel Indus., Inc., et al.; Skadden, Arps, Slate, Meagher & Flom (John J. Mangan, Robert E. Lighthizer), (D. Scott Nance), on brief, (Barry J. Gilman, D. Scott Nance), on oral argument, for Inland Steel Indus., Inc., et al.; Weil, Gotshal & Manges (Stuart M. Rosen), (M. Jean Anderson, Jeffrey P. Bialos, Diane M. McDevitt, Scott Maberry; and Stuart M. Rosen, Mark F. Friedman, Jonathan Bloom), on brief, (M. Jean Anderson, Stuart M. Rosen), on oral argument, for Usinor Sacilor, Sollac and GTS. Regarding LTV Steel Co., Inc., et al. v. United States, Consol. Court No. 93-09-00568-CVD: Dewey Ballantine (Michael H. Stein), (Alan Wm. Wolff, Martha J. Talley, John A. Ragosta, Jeffrey D. Nuechterlein, Guy C. Smith, O. Julia Weller), on brief, (John A. Ragosta, Martha J. Talley, O. Julia Weller), on oral argument, for LTV Steel Co., et al.; Skadden, Arps, Slate, Meagher & Flom (John J. Mangan, Robert E. Lighthizer), (D. Scott Nance), on brief, (D. Scott Nance), on oral argument, for LTV Steel Co., et al.; Sharretts, Paley, Carter & Blauvelt, P.C. (Gail T. Cumins), for Thyssen Stahl AG, et al.; LeBoeuf, Lamb, Greene & MacRae, L.L.P. (Pierre F. de Ravel d'Esclapon, Mary Patricia Michel), for AG der Dillinger Hüttenwerke; Hogan & Hartson (Lewis E. Leibowitz), for Fried, Krupp AG Hoesch-Krupp, et al. Regarding Laclede Steel Co., et al. v. United States, Consol. Court No. 93-09-00569-CVD: Dewey Ballantine (Michael H. Stein), (Alan Wm. Wolff, Martha J. Talley, John A. Ragosta, John R. Magnus, Jeffrey D. Nuechterlein), on brief, (John A. Ragosta, Martha J. Talley), on oral argument, for Laclede Steel Co., et al. Armco Steel Co., et al. and Bethlehem Steel Corp., et al.; Skadden, Arps, Slate, Meagher & Flom (John J. Mangan, Robert E. Lighthizer), (D. Scott Nance), on brief, (D. Scott Nance), on oral argument, 1260 for Laclede Steel Co., et al., Armco Steel Co., et al., and Bethlehem Steel Corp., et al.; Morrison & Foerster (Donald B. Cameron), (Julie C. Mendoza, Craig A. Lewis, M. Diana Helweg, Sue-Lynn Koo, Carl R. Sanchez), on brief, (Donald B. Cameron, Julie C. Mendoza), on oral argument, for Dongbu Steel Co., et al. Regarding Lukens Steel Co., et al. v. United States, Consol. Court No. 93-09-00570-CVD: Dewey Ballantine (Alan Wm. Wolff, Martha J. Talley, John A. Ragosta, Jeffrey D. Nuechterlein, Guy C. Smith, Scott L. Forseth), on brief, (John A. Ragosta, Martha J. Talley, Scott L. Forseth), on oral argument, for Lukens Steel Co., et al.; Skadden, Arps, Slate, Meagher & Flom (John J. Mangan, Robert E. Lighthizer), (D. Scott Nance), on brief, (D. Scott Nance), on oral argument, for Lukens Steel Co., et al.; Shearman & Sterling (Jeffrey M. Winton), (Robert E. Herzstein, Joseph A. Jiampietro), on brief, for Altos Hornos de Mexico, S.A. de C.V. Regarding Geneva Steel, et al. v. United States, Consol. Court No. 93-09-00566-CVD: Dewey Ballantine (Michael H. Stein), (Alan Wm. Wolff, Martha J. Talley, John A. Ragosta, Michael R. Geroe), on brief, (John A. Ragosta, Martha J. Talley, Michael R. Geroe), on oral argument, for Geneva Steel, et al.; Barnes, Richardson & Colburn (Gunter von Conrad), for Fabrique de Fer de Charleroi, S.A.; LeBoeuf, Lamb, Greene & MacRae (Melvin S. Schwechter), for S.A. Forgess de Clabecq; O'Melveny & Myers (Peggy A. Clarke), for Sidmar N.V. and TradeARBED, Inc. Regarding Empresa Nacional Siderurgica, S.A. v. United States, Consol. Court No. 93-09-00625-CVD: George V. Egge, Jr., P.C. (George V. Egge, Jr.), for Empresa Nacional Siderurgica, S.A., et al.; Dewey Ballantine (Michael H. Stein), (Alan Wm. Wolff, Martha J. Talley, John A. Ragosta, Scott L. Forseth), on brief, (John A. Ragosta, Martha J. Talley, Scott L. Forseth), on oral argument, for Bethlehem Steel Corp., et al. Frank W. Hunger, Asst. Atty. Gen. of the U.S.; David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, (A. David Lafer), (Marc E. Montalbine, Jeffrey M. Telep), on brief; Stephen J. Powell, (Terrence J. McCartin, Robert E. Nielsen, David W. Richardson, Elizabeth C. Seastrum, Marguerite Trossevin), on brief, Office of Chief Counsel for Import Admin., U.S. Dept. of Commerce, of counsel, for defendant. TABLE OF CONTENTS INTRODUCTION ............................................................ 1261 STANDARD OF REVIEW ...................................................... 1263 SECTION ONE: PRIVATIZATION .............................................. 1263 I. CERTAIN STEEL PRODUCTS FROM MEXICO ............................. 1264 BACKGROUND ..................................................... 1264 CONTENTIONS OF THE PARTIES ..................................... 1266 A. The Foreign Producers .................................. 1266 B. The Domestic Producers ................................. 1267 C. The Department of Commerce ............................. 1268 DISCUSSION ..................................................... 1270 II. CERTAIN STEEL PRODUCTS FROM BRAZIL ............................. 1277 BACKGROUND ..................................................... 1277 CONTENTIONS OF THE PARTIES ..................................... 1278 A. The Foreign Producers .................................. 1278 B. The Domestic Producers ................................. 1278 C. The Department of Commerce ............................. 1279 DISCUSSION ..................................................... 1279 III. CERTAIN STEEL PRODUCTS FROM THE UNITED KINGDOM ................. 1280 BACKGROUND ..................................................... 1280 CONTENTIONS OF THE PARTIES ..................................... 1280 A. The Foreign Producers .................................. 1280 B. The Domestic Producers ................................. 1281 C. The Department of Commerce ............................. 1281 DISCUSSION ..................................................... 1282 IV. CERTAIN STEEL PRODUCTS FROM GERMANY ............................ 1283 BACKGROUND ..................................................... 1283 1261 CONTENTIONS OF THE PARTIES .................................... 1284 A. The Domestic Producers ................................. 1284 B. The Foreign Producers .................................. 1284 C. The Department of Commerce ............................. 1285 DISCUSSION .................................................... 1285 V. MOTION FOR SUMMARY JUDGMENT BASED ON ISSUE PRECLUSION ......... 1288 CONCLUSION .................................................... 1288 SECTION TWO: ALLOCATION METHODOLOGY .................................... 1289 BACKGROUND .................................................... 1289 ISSUE PRESENTED ............................................... 1290 CONTENTIONS OF THE PARTIES .................................... 1290 A. Plaintiffs ............................................. 1290 B. Defendant .............................................. 1292 C. Defendant-Intervenors .................................. 1292 DISCUSSION .................................................... 1293 CONCLUSION .................................................... 1298 SECTION THREE: THE GRANT METHODOLOGY ................................... 1299 BACKGROUND .................................................... 1300 A. The Rate of Return Shortfall Method .................... 1300 B. The Grant Methodology .................................. 1300 C. Equity Infusions in Brazil, France, and Korea .......... 1301 ISSUES PRESENTED .............................................. 1302 CONTENTIONS OF THE PARTIES .................................... 1302 A. Plaintiffs ............................................. 1302 B. Defendant .............................................. 1304 C. Defendant-Intervenors .................................. 1305 DISCUSSION .................................................... 1306 A. Commerce's Abandonment of the RORS Methodology ......... 1306 B. Commerce's Adoption of the Grant Methodology ........... 1307 CONCLUSION .................................................... 1309 SECTION FOUR: SALES DENOMINATOR ........................................ 1310 BACKGROUND .................................................... 1310 ISSUE PRESENTED ............................................... 1311 CONTENTIONS OF THE PARTIES .................................... 1311 A. Plaintiffs ............................................. 1311 B. Defendant .............................................. 1312 C. Defendant-Intervenors .................................. 1314 DISCUSSION .................................................... 1315 A. Agency Explanation of the Tying Presumption ............ 1315 B. Adoption of the Tying Presumption ...................... 1316 C. Motion to Strike Portions of Plaintiffs' Reply Brief ... 1317 D. Motion to Strike Plaintiffs' Supplemental Memorandum ... 1318 CONCLUSION ................................................... 1319 SECTION FIVE: DISPROPORTIONALITY ...................................... 1320 BACKGROUND ................................................... 1320 CONTENTIONS OF THE PARTIES ................................... 1322 A. The Korean Respondents ................................. 1322 B. The Department of Commerce ............................. 1323 C. The Domestic Producers ................................. 1324 DISCUSSION .................................................... 1324 CONCLUSION .................................................... 1328 OPINION CARMAN, Judge: The following actions were consolidated by order of the Court of International Trade (CIT) dated February 4, 1994: British Steel plc v. United States, Court No. 93-09-00550-CVD and Geneva Steel, et al. v. United States, Court No. 93-09-00572-CVD consolidated as British Steel plc v. United States, Consol. Court No. 93-09-00550-CVD; Usinas Siderurgicas de Minas Gerais, S.A. v. United States, Court No. 93-09-00558-CVD, Gulf States Steel, Inc. of Alabama, et al. v. United States, Court No. 93-09-00574-CVD, and Usinas Siderurgicas de Minas Gerais, S.A. v. United States, Court No. 93-09-00578-CVD 1262 consolidated as Usinas Siderurgicas de Minas Gerais, S.A. v. United States, Consol. Court No. 93-09-00558-CVD; Inland Steel Industries, Inc., et al. v. United States, Court No. 93-09-00567-CVD, Usinor Sacilor, et al. v. United States, Court No. 93-09-00588-CVD, Usinor Sacilor, et al. v. United States, Court No. 93-09-00589-CVD, Usinor Sacilor, et al. v. United States, Court No. 93-09-00590-CVD, and Usinor Sacilor, et al. v. United States, Court No. 93-09-00591-CVD consolidated as Inland Steel Industries, Inc., et al. v. United States, Consol.Court No. 93-09-00567-CVD; LTV Steel Co., Inc., et al. v. United States, Court No. 93-09-00568-CVD, Thyssen Stahl AG, et al. v. United States, Court No. 93-09-00585-CVD, AG der Dillinger Hüttenwerke v. United States, Court No. 93-09-00596-CVD, and Fried, Krupp AG Hoesch-Krupp and Krupp Hoesch Stahl AG v. United States, Court No. 93-09-00603-CVD consolidated as LTV Steel Co., Inc., et al. v. United States, Consol.Court No. 93-09-00568-CVD; Laclede Steel Co., et al. v. United States, Court No. 93-09-00569-CVD, Pohang Iron & Steel Co., Ltd. v. United States, Court No. 93-09-00579-CVD, Dongbu Steel Co. Ltd., et al. v. United States, Court No. 93-09-00580-CVD, Dongbu Steel Co. Ltd., et al. v. United States, Court No. 93-09-00581-CVD, and Pohang Iron & Steel Co., Ltd. v. United States, Court No. 93-09-00582-CVD consolidated as Laclede Steel Co., et al. v. United States, Consol.Court No. 93-09-00569-CVD; Lukens Steel Co., et al. v. United States, Court No. 93-09-00570-CVD, Altos Hornos de Mexico, S.A. de C.V. v. United States, Court No. 93-09-00618-CVD, and Industrias Monterrey S.A. de C.V. v. United States, Court No. 93-09-00632-CVD consolidated as Lukens Steel Co., et al. v. United States, Consol.Court No. 93-09-00570-CVD;[1] and Geneva Steel, et al. v. United States, Court No. 93-09-00566-CVD and Fabrique de Fer de Charleroi v. United States, Court No. 93-09-00599-CVD, consolidated as Geneva Steel, et al. v. United States, Consol.Court No. 93-09-00566-CVD.[2] After several scheduling conferences and upon review and consideration of the minutes of the December 15, 1993, scheduling conference and upon agreement of all parties and pursuant to U.S. CIT R. 42(a), the Court entered the scheduling order governing the joint proceeding in the above-captioned cases. As a convenience to the parties, the Court used British Steel plc v. United States, Consol.Court No. 93-09-00550-CVD to identify this joint proceeding and to establish the guidelines set forth in the February 18, 1994 scheduling order. In accordance with that order, the parties were jointly ordered to brief five general issues which were divided into two groups. General Issues Group One pertains to: (a) the Department of Commerce's use of a fifteen-year allocation period to determine the benefit from several nonrecurring countervailable grants; (b) the Department of Commerce's use of a grant methodology to countervail equity infusions into an unequityworthy company whose shares are not publicly traded; and (c) the Department of Commerce's treatment of privatization and restructuring regarding previously received subsidies, including the Department's use of a repayment methodology. General Issues Group Two pertains to: (a) the Department of Commerce's determination of the appropriate sales denominator to be used in subsidy calculations when a respondent's total sales include not only sales of domestically produced merchandise, but also sales of merchandise produced in one or more foreign countries; and (b) the Department of Commerce's treatment of disproportionality for the purpose of evaluating the specificity of a potentially countervailable program. The Scheduling Order directed all questions of law and issues of fact regarding the five general issues to be briefed solely in 1263 the context of the briefs on these issues. All parties were prohibited from re-briefing or re-arguing any of these questions or issues in the context of the briefs on the country-specific issues. The Court has jurisdiction over all of these matters pursuant to 28 U.S.C. § 1581(c) (1988). STANDARD OF REVIEW The appropriate standard for the Court's review of a final determination by Commerce is whether the agency's determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1988). "Substantial evidence is something more than a `mere scintilla,' and must be enough reasonably to support a conclusion." Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 405, 636 F. Supp. 961, 966 (1986), aff'd, 5 Fed.Cir. (T) 77, 810 F.2d 1137 (1987) (citations omitted). The Court must accord substantial weight to the agency's interpretation of the statute it administers. American Lamb Co. v. United States, 4 Fed.Cir. (T) 47, 54, 785 F.2d 994, 1001 (1986) (citations omitted). While Commerce has discretion in choosing one interpretation over another, "[t]he traditional deference courts pay to agency interpretation is not to be applied to alter the clearly expressed intent of Congress." Board of Governors of the Fed. Reserve Sys. v. Dimension Fin. Corp., 474 U.S. 361, 368, 106 S. Ct. 681, 686, 88 L. Ed. 2d 691 (1986), cited in Ceramica Regiomontana, S.A., 10 CIT at 405, 636 F. Supp. at 966 ("[T]his Court will not allow an agency, under the guise of lawful discretion, to contravene or ignore the intent of the legislature or the guiding purpose of the statute.") (further citation omitted). SECTION ONE: PRIVATIZATION On the general issue of privatization, British Steel plc, Usinas Siderurgicas de Minas Gerais, S.A., and Altos Hornos de Mexico, S.A. de C.V. (collectively "Foreign Producers") have filed a joint motion for partial judgment on the agency record and supporting memoranda contesting the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,259-73 (Dep't Comm.1993) (final determ.) (General Issues Appendix), as well as the application of the General Issues Appendix in Certain Steel Products from Brazil, 58 Fed.Reg. 37,295 (Dep't Comm.1993) (final determ.) (Brazilian Final Determination),[3]Certain Steel Products from Mexico, 58 Fed. Reg. 37,352 (Dep't Comm.1993) (final determ.) (Mexican Final Determination),[4] and Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm. 1993) (final determ.) (British Final Determination).[5] The Government of the United Kingdom of Great Britain and Northern Ireland, as plaintiff-intervenor, has filed a brief challenging the administrative determination on the issue of privatization in the British Final Determination, in support of the Foreign Producers' motion. AK Steel Corporation,[6] Bethlehem Steel Corporation, Geneva Steel, Gulf States Steel Incorporated of Alabama, Inland Steel Industries, Incorporated, Laclede Steel Company, LTV Steel Company, Incorporated, Lukens Steel Company, National Steel Corporation, Sharon Steel Corporation, U.S. Steel Group a Unit of USX Corporation, and WCI Steel, Incorporated (collectively "Domestic Producers") have filed a joint motion for partial judgment on the agency record and supporting memoranda contesting the General Issues Appendix as well as the application of the General Issues Appendix in the Brazilian 1264 Final Determination, the Mexican Final Determination, the British Final Determination, and Certain Steel Products from Germany, 58 Fed.Reg. 37,315 (Dep't Comm. 1993) (final determ.) (German Final Determination).[7] AG der Dillinger Hüttenwerke has moved for summary judgment in LTV Steel Co., Inc. et al. v. United States, Consol.Court No. 93-09-00568-CVD, one of the consolidated cases under the Court's scheduling order governing this joint proceeding. I. CERTAIN STEEL PRODUCTS FROM MEXICO BACKGROUND The Department of Commerce's (Commerce) period of investigation (POI) of Altos Hornos de Mexico, S.A. de C.V. (AHMSA)[8] is calendar year 1991. Mexican Final Determination, 58 Fed.Reg. at 37,354. The product covered by Commerce's investigation is certain cut-to-length carbon steel plate. Id. at 37,353.[9] In the Mexican Final Determination, Commerce confirmed its preliminary determination and found AHMSA equityworthy in 1977 and unequityworthy from 1979 through 1987. Id. at 37,355. Commerce also found AHMSA unequityworthy for 1990 and 1991 and uncreditworthy from 1983 to 1986. Id. Commerce then concluded that the Government of Mexico was providing subsidies to AHMSA in certain years through various programs including equity infusions, assumption of debt, debt restructuring, short-term pre-export financing, short-term import financing, long-term loans, joint venture research and development, and pre-privatization lay-off financing. Id. at 37,356-61. Commerce also determined that AHMSA, a government-owned company, was privatized: "In November 1991, the [Government of Mexico (GOM)] sold all of its ownership interest in AHMSA. Prior to privatization, AHMSA was almost entirely owned by the GOM. Since November 1991, the GOM holds no stock in AHMSA." Id. at 37,355. Accordingly, Commerce applied the privatization and repayment methodologies set forth in General Issues Appendix to the privatization of AHMSA. Commerce explained, In these final determinations, we have decided that a portion of the price paid for a formerly government-owned company represents partial repayment of prior subsidies. We calculated the portion of the purchase price attributable to repayment of prior subsidies. We then reduced the benefit streams for each of the prior subsidies by the ratio of the repayment amount to the net present value of all remaining benefits from those prior subsidies at the time of privatization.... The subsidies allocated to the POI for AHMSA reflect, where appropriate, the application of the privatization methodology. Id. at 37,355. The nature of the General Issues Appendix is as follows. In the July 9, 1993, issue of the Federal Register Commerce published a series of countervailing duty (CVD) final determinations for twelve countries. Several broad methodological issues that were "not case-specific but rather general in nature" were common to many of the investigations involved in the twelve determinations. Certain Steel Products from Austria, 58 Fed. Reg. 37,217, 37,219 (Dep't Comm.1993) (final determ.). Commerce addressed this situation by creating a General Issues Appendix, appended to the first determination in the series, in which Commerce set forth its positions 1265 and analyses and addressed interested party comments on the several general issues consisting of allocation, denominator, equity, prepension program issues, privatization, and restructuring. See generally General Issues Appendix, 58 Fed.Reg. at 37,225-73. Commerce then invoked by reference and applied its methodologies as set forth in the General Issues Appendix, in each of the CVD determinations where those issues arose.[10] In the General Issues Appendix discussion of privatization, Commerce set forth its methodology for analyzing the privatization of some or all of a government-owned company. General Issues Appendix, 58 Fed.Reg. at 37,259-73. Commerce began by analyzing the nature of countervailable benefits and concluded that the relevant statutory authority, legislative history, judicial opinions, and Commerce's regulations "do not permit" Commerce to take into account the use to which subsidies are put or their effect on the recipient's subsequent performance. Id. at 37,260-61. Instead, CVD law requires Commerce "to countervail an allocated share of the subsidies received by producers, regardless of their effect.... [T]he statute embodies the irrebuttable presumption that subsidies confer a countervailable benefit upon goods produced by their recipients." Id. at 37,260. "Accepting that the CVD law does not require a subsidy bestowed on a steel producer to confer a demonstrable competitive benefit on that producer in order to be countervailable," Commerce turned to the specific issue of privatization. Id. at 37,261 (internal quotations omitted). Commerce rejected arguments that privatization automatically extinguishes prior subsidies and concluded that such arguments are contrary to CVD law. Instead, under Commerce's methodology, "some portion of the prior subsidies received by the seller `travel[s] (with the productive unit) to its new home.'"[11]Id. at 37,268. Commerce explained, [T]he countervailable subsidy (and the amount of the subsidy to be allocated over time) is fixed at the time the government provides the subsidy. The privatization of a government-owned company, per se, does not and cannot eliminate this countervailability. ... [T]he statute does not permit the amount of the subsidy, including the allocated subsidy stream, to be reevaluated based upon subsequent events in the marketplace." Id. at 37,263. Commerce, however, rejected arguments that after privatization, only a full repayment by the new company can extinguish past subsidies.[12] Instead, Commerce announced a repayment methodology: "[A] private party purchasing all or part of a government-owned company (e.g., a productive unit) can repay prior subsidies on behalf of the company as part or all of the sales price.... [T]o the extent that a portion of the price paid for a privatized company can reasonably be attributed to prior subsidies, that portion of those subsidies will be extinguished." Id. at 37,262-63. 1266 Under Commerce's repayment methodology, Commerce examines the proportion of the privatized company's subsidies to the company's net worth from 1977[13] to the date of privatization. Id. at 37,263. To calculate this proportion, Commerce takes the simple average of the ratios of subsidies to net worth for each year. Commerce averages those ratios to reach the "historical surrogate for the percent that subsidies constitute of the overall value, i.e., net worth of the company." Id. Commerce then multiplies the average ratio by the privatization purchase price "to derive the portion of the purchase price attributable to repayment of prior subsidies." Id. Finally, Commerce reduces "the benefit streams of the prior subsidies by the ratio of the repayment amount to the net present value of all remaining benefits at the time of privatization." Id. CONTENTIONS OF THE PARTIES A. The Foreign Producers The Foreign Producers contend that Commerce erred by not finding, as compelled by the evidence, "that the production of a company that has been privatized in an arm's-length transaction or otherwise at market value is not subsidized by reason of preprivatization grants or other untied capital subsidies that may have been provided to the state-owned enterprise." (Resp'ts' J.Br. in Supp. of Mot. for Partial J. on R., Vol. I at 2). The Foreign Producers contend that the true inquiry here is a statutory one. To impose a countervailing duty under 19 U.S.C. § 1671(a)(1), Commerce must find a benefit to the company under investigation. According to the Foreign Producers, the benefit from a subsidy is a financial one, that is, the benefit of operating with funds for which the recipient does not have to pay market price. Because the companies at issue were privatized at arm's length, the fair market value paid included the payment, at market price, of the value of the subsidies. Thus, the Foreign Producers contend, A privatized company operating with full, market-oriented capital costs does not have an artificial, subsidized cost of capital as did the state-owned enterprise. Its production does not realize any such subsidy benefits and, accordingly, there is no basis under the statute for [Commerce] to determine that such production "is subsidized" because of those past subsidy funds. (Id. at 40). The Foreign Producers further contend that Commerce, contrary to law, erected an "irrebuttable presumption that no subsequent event including a privatization can affect a subsidy allocation stream created by the Department under its methodology for allocating subsidies over time." (Id. at 50). The Foreign Producers argue that no basis to erect such a presumption exists in the statute. Furthermore, they contend, the presumption contradicts the non-punitive nature of countervailing duties intended by Congress and is inconsistent with judicial precedent and Commerce's own practice. Moreover, the Foreign Producers argue, under the irrebuttable presumption the value of countervailable benefits attributed to the privatized company exceeds the market value of the entire company in some cases. Alternatively, the Foreign Producers contend that if the Court ultimately affirms Commerce's determination concerning the countervailability of privatized companies for pre-privatization subsidies, the Court should hold Commerce's repayment methodology arbitrary and capricious. The Foreign Producers claim Commerce adopted this methodology without notice and comment, the preclusion of which is sufficient to justify a remand. Furthermore, they claim, the repayment methodology contains fundamental flaws rendering the methodology arbitrary and capricious. With regard to the privatization of AHMSA, the Foreign Producers[14] admit that 1267 Commerce made no specific finding regarding whether AHMSA was privatized at arm's length. (AHMSA's Resp. to Ct.'s Questions at 1). The Foreign Producers contend, however, "the evidence on the record demonstrates that the privatization of AHMSA was accomplished through a fair, open and transparent, competitive auction.... The privatization was ... a non-preferential arm's-length transaction." (Id.). Therefore, because the purchaser "paid fair market value for the items it purchased in a fair and competitive auction, it fully paid for the entire value it received.... [T]here is no basis for finding that [the purchaser] or its steel-making operations were in any way subsidized." (Resp'ts J.Br. in Supp. of Mot. for Partial J. on R., Vol. II Tab B at 13). Furthermore, in their response to this Court's post-oral argument questions, the Foreign Producers contend Commerce "found that the post-privatization entity was fundamentally different" from pre-privatization AHMSA. (AHMSA's Resp. to Ct.'s Questions at 4). The Foreign Producers claim "[a]s [Commerce] recognized, the privatization created a new consolidated ... entity, which had to be treated as a `single business enterprise.' This new consolidated entity was clearly different from the preprivatization state-owned entity of which [the purchaser] had not been a part." (Id. (quoting General Issues Appendix, 58 Fed. Reg. at 37,262)). To support these assertions, the Foreign Producers maintain that "facts demonstrate that the new entity created by the privatization process was physically different from the entity that existed before." (Id.). Furthermore, even if no physical changes occurred, "privatization would still have made a fundamental change in the company.... [T]he payment of the purchase price by [the purchaser] in the privatization imposed new costs and obligations on AHMSA" thus eliminating any continuing benefit from pre-privatization subsidies. (Id. at 5 (footnote omitted)). B. The Domestic Producers The Domestic Producers contend Commerce properly determined in its final determinations that privatization itself does not render non-countervailable subsidies bestowed upon government-owned companies prior to privatization. (Pls.' J.Br. in Supp. of Mot. for J. on R. at 20). Instead, the Domestic Producers challenge as unsupported by substantial evidence and not in accordance with law Commerce's determination that privatization could result in a partial repayment of pre-privatization subsidies. (Id. at 20). The Domestic Producers contend that CVD statutes do address repayment of subsidies and issues raised by privatization. According to the Domestic Producers, the CVD statutes require Commerce to countervail subsidies provided and specifically limit the instances in which Commerce may decrease subsidies otherwise countervailable. The specific instances allowing for offsets do not include repayment as a result of privatization. In addition to contending that Commerce did not act in accordance with law, the Domestic Producers argue Commerce's "interpretation of the statute as requiring the conclusion that subsidies are partially repaid as a result of privatization at fair market value is not reasonable." (Id. at 31). According to the Domestic Producers, Commerce's interpretation is inconsistent with both Commerce's conceptual models of subsidies and its practice of not considering "subsequent events" in calculating the amount of duties imposed. (Id. at 36). Furthermore, Commerce's repayment methodology ignores the fact that, in a privatization by sale of stock, "[a]ll that change[s] hands [are] literally `pieces of paper,' the certificates evidencing ownership of the company. The company itself [is] not affected by the privatization in and of itself." (Id. at 42). Because "[e]ach of the transactions at issue here involved the sale by a government of stock in a state-owned company to private investors," none of the subsidies were repaid. (Id. at 42). The Domestic Producers also contend that the repayment methodology itself is fundamentally 1268 flawed on both legal and economic grounds. Finally, while the Domestic Producers agree with Commerce's determination that in a corporate restructuring a portion of those subsidies allocable to the various productive units "travels" with the units, the Domestic Producers dispute the manner in which those subsidies are allocated across the various corporate entities benefitted. Specifically, the Domestic Producers dispute Commerce's use of relative asset values as the basis for allocating the subsidies. Citing the inherent subjectivity of asset valuations and their susceptibility to manipulation, the Domestic Producers argue that Commerce must use sales values in its calculations. With regard to the privatization of AHMSA, the Domestic Producers contend Commerce's determination that AHMSA's privatization could result in a partial repayment of pre-privatization subsidies is not supported by substantial evidence and is not otherwise in accordance with law. See id. at 2, 13-14.[15] As to the privatization transaction itself, the Domestic Producers "make no representations as to whether [any of] the privatization transactions occurred at fair market value, because it is not relevant to the law, which does not concern itself with whether the new shareholders benefit as a result of the change in the subsidized company's ownership." (AK Steel Corp., et al., Answers to Ct.'s Questions at 3).[16] The Domestic Producers do contend, however, that AHMSA is "in all material and commercial respects the same" company that received pre-privatization subsidies. (Id. at 4 (stating that all of "the companies under investigation are in all material and commercial respects the same companies that received the subsidies")). In the case of AHMSA, "the privatization[] ... involved a straightforward sale of shares." (Id. at 17). In fact, "all of the privatizations under review here involved the sale of shares in the company that had received subsidies, so that the company continued in existence and operations were completely uninterrupted or changed under the new ownership." (Id. at 16-17). C. The Department of Commerce Commerce contends that although neither the statutes nor the legislative history provides specific guidance on the issue of privatization, Congress "has directed Commerce to countervail subsidized imports when it is determined that a domestic industry has been injured by reason of such imports." (Def.'s Br. in Opp'n to Mots. for J. on R. at 10-11). Accordingly, Commerce reasonably continued to countervail subsidies of public corporations subsequent to the privatizations of those corporations. Commerce maintains it has broad authority both to interpret CVD statutes and to pursue subsidies. Commerce defends its "irrebuttable presumption" as reflective of the basic concept that subsidies confer countervailable benefits. (Id. at 77-100). Furthermore, Commerce contends, Congress intended the agency to countervail subsidies aggressively. Using its broad statutory authority 1269 and in accordance with congressional intent, Commerce determined it must measure subsidies on the date those subsidies are bestowed. The statutory scheme does not require Commerce to remeasure the competitive benefits of subsidies due to subsequent events such as privatization. Commerce argues that contrary to this Court's opinions in Saarstahl, AG v. United States, 18 CIT ___, 858 F. Supp. 187 (1994), and Inland Steel Bar Co. v. United States, 18 CIT ___, 858 F. Supp. 179 (1994), legislative history clearly shows Congress did not want Commerce to engage in an "effects" analysis. Instead, Commerce reasons: When untied subsidies are bestowed upon a company, they are presumed to benefit the entire company and are allocated across the total sales of the company. This means, in effect, that each of the various productive parts of the subsidized company derive benefits from those subsidies. Therefore when a company is sold, those previously bestowed subsidies continue to be allocable to it. (Def.'s Br. in Opp'n to Mots. for J. on R. at 14). Commerce further argues it reasonably concluded that "because a portion of the value of the company is due to prior subsidies, it was reasonable to consider that some or all of the sale price could constitute repayment for those prior subsidies." (Id. at 15). Commerce contends its repayment concept does not contradict Commerce's position that it is not required to take into account subsequent effects. Rather, Commerce argues, the repayment methodology "merely represents an allocation of the remaining unamortized subsidies between the seller ... and the private purchaser." (Id.). Finally, Commerce defends its use of asset values as the basis for allocating subsidies to a productive unit of a government-owned company when that unit is sold to a private party. (Id. at 71-77). Commerce explains that because its definition of a productive unit does not require a unit to be a profit center, "the value of a productive unit's sales may not be identifiable." (Id. at 76 (citing General Issues Appendix, 58 Fed.Reg. at 37,268)). In order to eliminate the necessity of artificially constructing a productive unit's sales value, Commerce reasonably chose to use book value for assets. (Id.). With regard to AHMSA, Commerce maintains that AHMSA was privatized by a bidding process through which "the Government of Mexico sold all of its ownership interest in AHMSA in November 1991." (Id. at 8 (citing the Mexican Final Determination, 58 Fed.Reg. at 37,355)). Grupo Acerero del Norte (GAN), the purchaser of AHMSA, "is a holding company formed by a group of private investors for the purpose of purchasing AHMSA." (Def.'s Resp. to Ct.'s Questions at 13). Commerce maintains "[t]he record reflects that the privatization represented a complete transfer of assets from the GOM to [GAN], the ultimate purchaser." (Id. at 6-7). Commerce, however, makes no specific assertions concerning whether AHMSA's privatization was effected through an arm's-length transaction. (Id. at 2, 3).[17] Instead, Commerce maintains that in all of the determinations under review, its "principal concern was whether a legitimate sale had taken place." (Id. at 2). Commerce explains, Commerce applied its privatization methodology only in instances where there were legitimate sales. Commerce stated that a legitimate sale `must involve unrelated parties, one of which must be privately owned.' Given this focus, Commerce made no specific findings that the privatizations in the Brazil, Germany, Mexico, and United Kingdom certain steel CVD investigations were necessarily of arm's-length transactions. (Id. at 2 (citations to the General Issues Appendix omitted)). While making no specific assertion concerning whether AHMSA's privatization was at arm's length, Commerce does, however, contend that "the record reflects that the GOM sold AHMSA to the lower bidder in 1270 terms of cash received." (Id. at 3). Commerce explains that because the Mexican Government was concerned with production of quality steel for domestic use, the GOM's bid valuation methodology valued post-privatization committed investment at 50% of the investment. (Id. at 3-4). As a result, "[t]he cash portion of the winning bid was lower than the cash amount offered by the losing bid." (Id. at 4). DISCUSSION The threshold issue this Court must determine is whether, if AHMSA was privatized, Commerce properly determined subsidies previously bestowed upon AHMSA continued to be countervailable after AHMSA's privatization. For the reasons that follow, the Court remands to Commerce to reconsider its determination in light of the Court's analysis in this opinion. In Saarstahl, AG v. United States, 18 CIT ___, 858 F. Supp. 187 (1994), this Court examined the issue of whether pre-privatization subsidies bestowed upon a government-owned corporation could be attributed to a purchaser after privatization through an arm's-length transaction. This Court pointed to the non-punitive nature of the CVD laws' legislative intent requiring Commerce to use reasonable methods of allocating the value of subsidies and to relate "the benefit of the commercial advantage to the recipient." Saarstahl, 18 CIT at ___, 858 F.Supp. at 193 (quoting H.R.Rep. No. 317, 96th Cong., 1st Sess. 75 (1979) and citing S.Rep. No. 249, 96th Cong., 1st Sess. 85-86 (1979) U.S. Code Cong. & Admin.News 1979, pp. 381, 471-472 (Methods for allocating the value of non-recurring subsidy grants or loans must be "based on the commercial and competitive benefit to the recipient as a result of the subsidy.") (emphasis added)). Accordingly, this Court concluded that a new owner who pays fair market value for a productive unit cannot be the "recipient" of a subsidy because the buyer has paid for all that it is to receive. Id. at ___, 858 F.Supp. at 193. In other words, by paying fair market value for all it has received the new owner has not gained any recognizable[18] commercial or competitive benefit as a result of the transaction. Therefore, if Commerce were permitted to countervail a purchaser who has paid fair market value, Commerce's actions would directly violate the overriding purpose of the CVD laws "to assess countervailing duties against those goods entering the U.S. on an uneven playing field." Id. at ___, 858 F.Supp. at 194 (emphasis added) (citing British Steel Corp. v. United States, 9 CIT 85, 95, 605 F. Supp. 286, 294 (1985) (further citations omitted)). Further analysis of the CVD statutes supports this Court's analysis in Saarstahl and gives the Court the opportunity to further articulate its reasoning and holding in Saarstahl. Precedent informs this Court that "if the statute is silent or ambiguous with respect to the specific issue, the question 1271 for the court is whether the agency's answer is based on a permissible construction of the statute." Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S. Ct. 2778, 2782, 81 L. Ed. 2d 694 (1984) (footnote omitted). In its review of the agency's answer, "a court may reject an agency interpretation that contravenes clearly discernible legislative intent," but "its role when that intent is not contravened is to determine whether the agency's interpretation is `sufficiently reasonable.'" Grupo Industrial Camesa v. United States, 18 CIT ___, ___, 853 F. Supp. 440, 442 (1994) (quoting American Lamb Co. v. United States, 4 Fed.Cir. (T) 47, 54, 785 F.2d 994, 1001 (1986) (citations omitted)). The statutory authority governing countervailing duties does not speak directly to privatization and the imposition of countervailing duties upon privatized corporations. In fact, congressional input is sorely lacking. Commerce has virtually no statutory framework under which to administer the CVD laws with respect to the complex and universally important issue of privatization.[19] However, as this Court discussed in Saarstahl and reiterates above, congressional intent concerning the overriding purpose of the CVD laws as a whole is clearly discernible. Commerce's interpretation of the CVD statutes to allow the countervailing of pre-privatization subsidies bestowed upon government-owned corporations after any and all types of privatization transactions can result in punitive duties directly violative of that congressional purpose. Additionally, even if Commerce's interpretation did not contravene clearly discernible legislative intent, for the reasons that follow, Commerce's interpretation of what little statutory framework is relevant to privatization is unreasonable. In 19 U.S.C. § 1677, Congress defines "subsidy" in part as follows: (A) In general The term "subsidy" has the same meaning as the term "bounty or grant" as that term is used in section 1303 of this title, and includes, but is not limited to, the following: .... (ii) The following domestic subsidies, if provided or required by government action to a specific enterprise or industry, or group of enterprises or industries, whether publicly or privately owned and whether paid or bestowed directly or indirectly on the manufacture, production, or export of any class or kind of merchandise: (I) The provision of capital, loans, or loan guarantees on terms inconsistent with commercial considerations. (II) The provision of goods or services at preferential rates. (III) The grant of funds or forgiveness of debt to cover operating losses sustained by a specific industry. (IV) The assumption of any costs or expenses of manufacture, production, or distribution. 19 U.S.C. § 1677(5)(A) (1988). In 19 U.S.C. § 1677, Congress sets forth the following rule concerning subsidies: (B) Special rule In applying subparagraph (A), the administering authority, in each investigation, shall determine whether the bounty, grant, or subsidy in law or in fact is provided to a specific enterprise or industry, or group of enterprises or industries.... 19 U.S.C. § 1677(5)(B) (1988); see also 19 U.S.C. § 1671(a)(1)(B) (1988) (discussing the administering authority's determination of whether a relevant entity "is providing, directly or indirectly, a subsidy"). While these statutory provisions do not speak directly to the privatization issue, Congress has worded § 1677(5)(B) such that the administering authority must determine if a subsidy is provided "to a specific enterprise or industry, or group of enterprises or industries." This implies that the recipient of a subsidy must be a person or artificial person, such as a corporation carrying on a specific enterprise or industry, capable of holding a property interest such as a subsidy. Indeed, this was conceded by parties including the government at oral argument. See, e.g., Tr. at 496-97, 530. Contrary to the government's argument, a subsidy cannot be 1272 provided to a "productive unit" or "travel" with it unless the "productive unit" is itself an artificial person capable of receiving a subsidy. To reason otherwise leads to absolute absurdity. Who would suggest, for example, that a subsidy could be provided to an inanimate object such as a chair. If a subsidy recipient, then, must be capable of receiving a subsidy, when a foreign government bestows a subsidy upon a corporation, it follows logically that the corporation, and not the corporation's individual assets, receives the subsidy. In other words, it is with the corporation and not its several parts that the subsidy resides. Accordingly, as discussed in Saarstahl, when a purchaser pays fair market value in an arm's-length transaction based upon commercial considerations for an asset or several assets of a subsidized corporation, the purchaser receives no gift or subsidy at all because the purchaser paid full monies worth.[20] Furthermore, the subsidy cannot travel with the asset or several assets because the asset or several assets did not receive the subsidy; the corporation received the subsidy.[21] Therefore, the subsidy continues to reside in the subsidized asset-selling corporate entity as holder of the subsidy benefits received.[22] As discussed implicitly in Saarstahl, a different result may arise depending upon 1273 what is purchased and the nature of the purchase transaction. For example, where a purchaser buys all or part of a subsidized corporation through a simple stock purchase, the purchaser is buying an interest in the very entity in which the subsidy resides under § 1677(5)(B). The stock purchase merely evidences a change in the identity of the shareholders who hold ownership interests in the subsidized corporation.[23] The stock purchase does not affect the life or nature of the corporate entity purchased.[24] In other words, the entity that received the subsidy continues to survive as does Commerce's authority to countervail that entity. Contrary to Commerce's position, Commerce does not have the ability to countervail in such a situation because subsidies "travel." Rather, Commerce has the ability to countervail because the subsidy continues to reside in the entity in which the subsidy was bestowed and because the subsidy and the entity continue to exist. Commerce has consistently maintained that it does not measure the effects of subsidies once they have been determined by Commerce.[25] In other words, subsequent events are irrelevant. This Court, for the purposes of this proceeding, has no quarrel with that practice.[26] The question confronting the Court is not the measurement of the subsidies, but the question of the location of the subsidies after privatization has taken place. Commerce, after having analyzed the nature of countervailable benefits, relevant statutory authority, legislative history, judicial opinions, and the regulations of Commerce, concluded those authorities do not permit Commerce to take into account the use to which subsidies are put or their effect upon the recipient. General Issues Appendix, 1274 58 Fed.Reg. at 37,260-61. It is not the effect upon the recipient that is presented by the general issue of privatization, but the identity of the recipient. The CVD laws are remedial in purpose and are designed to correct as much as possible artificial distortions in the marketplace occasioned by the inputs of subsidies, grants, or other types of gifts by governments or others to foreign companies exporting goods to the United States. Under these general principles, where a private investor pays fair market value in an arm's-length transaction based upon commercial considerations for an asset or assets of a corporation, "there is no benefit conferred to the purchaser and therefore, no countervailable subsidy within the meaning of 19 U.S.C. § 1677(5)." Saarstahl, 18 CIT at ___, 858 F.Supp. at 193.[27] Commerce cannot do that which is in direct opposition to congressional intent, that is, countervail where no subsidy has been given in commercial terms. See American Lamb Co. v. United States, 4 Fed.Cir. (T) 47, 54, 785 F.2d 994, 1001 (1986) ("[A] court may reject an agency interpretation that contravenes clearly discernible legislative intent....") (citation omitted); Ceramica Regiomontana S.A. v. United States, 10 CIT 399, 405, 636 F. Supp. 961, 966 (1986), aff'd, 5 Fed.Cir. (T) 77, 810 F.2d 1137 (1987) ("[T]his Court will not allow an agency ... to contravene or ignore the intent of the legislature or the guiding purpose of the statute.") (citations omitted). If, however, a purchaser buys into the subsidized corporate entity itself so that the subsidized entity continues in its corporate existence in whole or in part, Commerce may properly continue to countervail that entity in accordance with legislative intent. This analysis is consistent with both the common law of corporations[28] and public policy favoring facilitation of the alienability of property.[29] Turning to the privatization of AHMSA, Commerce reported its conclusion in the 1275 Mexican Final Determination that AHMSA was privatized in 1991. See Mexican Final Determination, 58 Fed.Reg. at 37,355 ("In November 1991, the GOM sold all of its ownership interest in AHMSA. Prior to privatization, AHMSA was almost entirely owned by the GOM. Since November 1991, the GOM holds no stock in AHMSA."). Commerce specifically declined, however, to determine whether the privatization of AHMSA was an arm's-length transaction. See General Issues Appendix, 58 Fed.Reg. at 37,264 ("Given the Department's methodology ... concerns regarding whether or not the sale of AHMSA was at a fair market price are irrelevant."); Def.'s Resp. to Ct.'s Questions at 2 ("Commerce made no specific findings that the privatizations in the Brazil, Germany, Mexico, and United Kingdom certain steel CVD investigations were necessarily of arm's-length transactions."). Instead, Commerce simply "passed through" the government-owned corporation's pre-privatization subsidies to the privatized corporate entity. Commerce also seems to have stated no finding in the Mexican Final Determination concerning the nature of the privatization transaction involved in that determination. In the General Issues Appendix, Commerce did address party comments involving the manner in which AHMSA was privatized. See General Issues Appendix, 58 Fed.Reg. at 37,264-65. Commerce, however, did not address these comments by making any findings concerning the privatization transaction.[30] As discussed above and in Saarstahl, privatization as such does not cause subsidies to travel. If privatization is effected through an arm's-length transaction for fair market value based upon commercial considerations in which the subsidized corporate entity does not continue to survive, Commerce's ability to countervail that entity also ceases to exist.[31] Similarly, if privatization takes place by a sale in an arm's-length transaction for fair market value based upon commercial considerations of the corporation's several assets, nothing "travels," and Commerce has no recourse against the purchaser of those assets because it received no subsidy.[32] If, however, privatization is effected through, for example, a simple stock transfer, Commerce may continue to countervail because the entity subsidized continues to exist.[33] However, the mere conclusion that a corporation was privatized is not determinative of 1276 whether Commerce's ability to countervail continues to exist. Therefore, insofar as Commerce's privatization methodology holds that subsequent to any privatization transaction, Commerce may countervail a privatized company for pre-privatization subsidies regardless of how privatization takes place, that methodology is unlawful.[34] Commerce appears to have made no findings in the Mexican Final Determination as to the nature of the transaction involving AHMSA, other than the finding that AHMSA was privatized in 1991. Accordingly, this Court remands the Mexican Final Determination to Commerce so that Commerce, in its expertise, may make findings in accordance with the above analysis concerning the nature of the transaction which resulted in the privatization of AHMSA. These findings should include: (1) whether the privatization transaction at issue was effected at arm's-length, for fair market value, and based upon commercial considerations; (2) whether the transaction at issue involved a privatization or partial privatization; (3) the terms and substance of the transaction at issue, and whether the transaction involved a sale of an asset or several assets, or consisted entirely of a sale of shares; (4) whether, under the Court's analysis set forth above, if a privatization or partial privatization took place, the privatized entity continues to be, for all intents and purposes, the same entity that received subsidies prior to the transaction; and (5) whether, under the Court's analysis, Commerce may properly continue to countervail AHMSA. Commerce is further directed to perform and report to the Court the following calculations: (1) Commerce will calculate any countervailing duties due, if any, by any transferor and transferee subsequent to a privatization; (2) if, under the Court's analysis set forth above, Commerce determines that post-transaction AHMSA continues to be, for all intents and purposes, the same entity that received subsidies prior to the transaction at issue, Commerce will calculate any and all countervailing duties due on that surviving entity; and (3) Commerce will calculate any and all countervailing 1277 duties due on account of any other type of privatization transaction. In its calculations Commerce shall, where applicable, make any corrections necessary on account of allocation and/or sales denominator adjustments occasioned by the respective remands on those issues. The Court does not reach the issue of the repayment methodology adopted by Commerce because of the several remands to Commerce on issues pertaining to privatization. Such discussion would be premature. The Court observes, nevertheless, even where a bona fide purchaser in an arm's-length transaction pays full value to a corporate transferor on an asset by asset basis that the purchase payment would not seem in any way to extinguish the gift or subsidy previously given to the corporate transferor by its government. It would seem at best the only way to extinguish such a previously given gift or subsidy would be to repay the gift or subsidy to the original donor government. Furthermore, when a bona fide purchaser in an arm's-length transaction buys only all or some of the stock of a government-owned corporation, none of the subsidy is repaid by that purchase. The corporation still has the subsidy. All that has changed is who owns a beneficial interest in the corporation, evidenced by ownership in the corporation's common stock. There appears to be nothing in the record that demonstrates any corporate transferor returned anything to its original donor government. It is conceivable that foreign governments, transferors, and transferees could try to structure their privatization transactions to evade potential tariff liability under United States' CVD laws. Perhaps Congress will provide guidance pertaining to such potential problems. In any event, Commerce, using its considerable expertise and insisting that such transactions be based upon good faith commercial considerations, should be able to ferret out sham transactions.[35] The Court observes, however, it is beyond the scope of this opinion to speculate upon how parties may endeavor to structure future privatization transactions or whether such structuring would be consonant with present CVD statutes. II. CERTAIN STEEL PRODUCTS FROM BRAZIL BACKGROUND The period for which Commerce measured subsidies for purposes of the final determination concerning Usinas Siderurgicas de Minas Gerais, S.A. (USIMINAS) is calendar year 1991.[36]Brazilian Final Determination, 58 Fed.Reg. at 37,296. The products covered by Commerce's investigation of USIMINAS are certain hot-rolled carbon steel flat products, certain cold-rolled carbon steel flat products, and certain cut-to-length carbon steel plate. Id. In the Brazilian Final Determination, Commerce set forth its determination that USIMINAS was unequityworthy from 1980 to 1988 and that equity infusions provided by the government of Brazil in those years were inconsistent with commercial considerations. Id. at 37,297. Commerce further determined that USIMINAS was uncreditworthy during the period 1980-1988. Id. Commerce then determined the amount of net subsidies provided under various government programs. Id. at 37,298-300. Without elaboration, Commerce also determined that in 1991, USIMINAS was partially privatized. Id. at 37,297. Accordingly, Commerce applied its privatization and repayment methodology set forth in the General Issues Appendix: In these final determinations, we have decided that a portion of the price paid for a formerly government-owned company represents partial repayment of prior subsidies. We calculated the portion of the purchase price attributable to repayment of prior subsidies. We then reduced the benefit streams for each of the prior subsidies 1278 by the ratio of the repayment amount to the net present value of all remaining benefits from those prior subsidies at the time of privatization. A further explanation of the Department's determination on privatization and these calculations can be found in the Privatization section of the General Issues Appendix. The subsidies allocated to the POI for USIMINAS reflect, where appropriate, the application of the privatization methodology. Id. CONTENTIONS OF THE PARTIES A. The Foreign Producers The Foreign Producers' contentions concerning the general issue of privatization as set forth in the General Issues Appendix and applied in the relevant determinations in the CVD series published in the Federal Register on July 9, 1993, are described above in the Court's discussion of the Mexican Final Determination. Specifically with regard to Commerce's application of its privatization methodology to USIMINAS, the Foreign Producers contend that USIMINAS was privatized by public auction in October 1991 at an arm's-length market price for fair market value. (Resp'ts' J.Br. in Supp. of Mot. for Partial J. on R. (Resp'ts' J.Br.), Vol. I at 6, Vol. II Tab C at 1-3, 6; Resp'ts' Answers to Ct.'s Questions (Resp'ts' Answers) at 15). The Foreign Producers acknowledge that Companhia Vale do Rio Doce (CVRD), a company majority-owned by the government, purchased 15% of USIMINAS' common shares at auction. (Resp'ts' J.Br., Vol. II Tab C at 4). The Foreign Producers maintain, however, that CVRD bought those shares on terms consistent with other auction purchases. (Id.). The Foreign Producers also acknowledge that the Brazilian government retained an ongoing residual ownership interest in USIMINAS. (Id. at 5; Resp'ts' Answers at 16 n. 15). They argue, however, that this equity interest is "nominal" and confers no leverage over USIMINAS. (Resp'ts' Answers at 16 n. 15; Resp'ts' J.Br., Vol. II Tab C at 5). In sum, the Foreign Producers contend any alleged subsidy benefits received by USIMINAS prior to privatization were extinguished by the sale of the controlling interest in USIMINAS at a bona fide market price. (Resp'ts' J.Br., Vol. II Tab C at 1-8). B. The Domestic Producers The Domestic Producers' contentions concerning the general issue of privatization as set forth in the General Issues Appendix and applied in the applicable determinations in the CVD series published in the Federal Register on July 9, 1993, are described above in the Court's discussion of the Mexican Final Determination. Specifically in regard to USIMINAS, while the Domestic Producers dispute Commerce's determination that privatization results in a partial repayment of pre-privatization subsidies, the Domestic Producers support Commerce's determination that USIMINAS was only partially privatized. (Def.-Intervenors' Resp. at 90-92). According to Domestic Producers, the partial privatization of USIMINAS "involved a straightforward sale of shares." (AK Steel Corp. et al., Answers to Ct.'s Questions at 17). Prior to privatization, the Brazilian Government owned 94.6% and 87.7% of the common and preferred shares of USIMINAS. (Id.). Through an auction of USIMINAS' shares, various parties purchased "almost all" of the Brazilian Government's common shares and 32% of its preferred shares. (Id.). These purchasers, however, included CVRD, a government-owned mining company that bought 15% of USIMINAS' common shares at auction. (Id. at 5). Additionally, "[s]tate-owned entities ... held 44% of the non-voting preferred shares. SIDERBRAS [Siderurgia Brasileira, S.A.], the state-owned steel holding company, retained ownership of 17% of the preferred shares, while BNDES [Banco Nacional de Desenvolvimento Economico e Social], the state-owned development bank, held another 15%." (Id. (footnotes omitted)). The Domestic Producers argue "USIMINAS has admitted that government-owned entities continued to own a substantial portion of USIMINAS' shares after privatization" and thus the Foreign Producers have not shown Commerce's determination that USIMINAS was only partially privatized to be unsupported 1279 by substantial evidence. (Def.-Intervenors' Resp. at 91-92). C. The Department of Commerce The Department of Commerce's contentions concerning the general issue of privatization as set forth in the General Issues Appendix and applied in the applicable determinations in the CVD series published in the Federal Register on July 9, 1993, are described above in the Court's discussion of the Mexican Final Determination. With regard to USIMINAS, Commerce maintains that after benefitting from equity infusions and other subsidies, USIMINAS was partially privatized in 1991. (Def.'s Br. in Opp'n to Mots. for J. on R. at 3-4). This partial privatization was effected through an auction of USIMINAS' voting stock and a second auction of USIMINAS' non-voting stock. (Id.). Subsequent to both auctions, SIDERBRAS and BNDES retained a 17% and 15% interest respectively of USIMINAS' nonvoting preferred shares. (Id. at 4). Also, CVRD, a state-owned mining company, purchased 15% of USIMINAS' common shares at auction. (Id.). Commerce has made no findings and makes no assertions, however, as to whether the sales of USIMINAS' shares at auction were carried out at fair market value. (Def.'s Resp. to Ct.'s Questions at 3 (citing Commerce's statement in the General Issues Appendix that "whether or not the sale of USIMINAS was made at a fair market price was not relevant under the Department's methodology," General Issues Appendix, 58 Fed.Reg. at 37,265). Additionally, Commerce made no finding and makes no assertions as to whether the partial privatization of USIMINAS was necessarily an arm's-length transaction. (Def.'s Resp. to Ct.'s Questions at 2). DISCUSSION In the Brazilian Final Determination, Commerce appears to have concluded that USIMINAS was partially privatized. Brazilian Final Determination, 58 Fed.Reg. at 37,297 ("USIMINAS was partially privatized in 1991."); see also General Issues Appendix, 58 Fed.Reg. at 37,265 (responding to party comments regarding USIMINAS by stating that Commerce's privatization methodology "has been applied to all total and partial privatizations at issue in these investigations"). Because Commerce determined that a partial privatization took place, Commerce applied its privatization methodology. See Brazilian Final Determination, 58 Fed.Reg. at 37,297 ("The subsidies allocated to the POI for USIMINAS reflect, where appropriate, the application of the privatization methodology."). Commerce, however, failed to explicate in the Brazilian Final Determination what it means to be "partially privatized" and how USIMINAS was "partially privatized." From the parties' papers, the Court surmises that an auction of USIMINAS' shares took place. The circumstances of this transaction, however, are not articulated in the Brazilian Final Determination. Accordingly, this case is remanded to Commerce with instructions to examine and report to the Court if and how a partial privatization took place. Specifically, Commerce should report to the Court the following: (1) whether the privatization or partial privatization transaction at issue was at arm's length, for fair market value, and based upon commercial considerations; (2) whether the transaction at issue involved a privatization or partial privatization; (3) the terms and substance of the transaction at issue, and whether the transaction involved a sale of an asset or several assets, or consisted entirely of a sale of shares; (4) whether, under the Court's analysis set forth above, if a privatization or partial privatization took place, the privatized entity continues to be, for all intents and purposes, the same entity that received subsidies prior to the transaction; and (5) whether, under the Court's analysis, Commerce may properly continue to countervail USIMINAS. Commerce is further directed to perform and report to the Court the following calculations: (1) Commerce will calculate any countervailing duties due, if any, by any transferor and transferee subsequent to a privatization; (2) if, under the Court's analysis, Commerce determines that post-transaction USIMINAS continues to be, for all intents and purposes, the same 1280 entity that received subsidies prior to the transaction at issue, Commerce will calculate any and all countervailing duties due on that surviving entity; and (3) Commerce will calculate any and all countervailing duties due on account of any other type of privatization transaction. In its calculations Commerce shall, where applicable, make any corrections necessary on account of allocation and/or sales denominator adjustments occasioned by the respective remands on those issues. III. CERTAIN STEEL PRODUCTS FROM THE UNITED KINGDOM BACKGROUND The period for which Commerce measured subsidies for purposes of the final determination in the British Final Determination is April 1, 1991, through March 31, 1992. British Final Determination, 58 Fed.Reg. at 37,394. The product covered by Commerce's investigation is certain cut-to-length carbon steel plate. Id. The only respondent company for the class or kind of merchandise subject to investigation in the British Final Determination is British Steel plc (BS plc). Id. According to Commerce, BS plc is the "corporate successor" to British Steel Corporation (British Steel), a company that was wholly-owned by the British Government. Id. Commerce explains, In 1988, the UK government sold [British Steel] through a public offering of shares. With the exception of a Special Share which represents approximately 0.000017 percent of the total number of shares issued and which is intended to prevent persons, or persons acting in concert, from having an interest of 15 percent or more in the company, the UK government currently holds no ownership interest in BS plc. Id. In the British Final Determination, Commerce found that British Steel was both uncreditworthy and unequityworthy from 1977-1978 through 1985-1986. Id. at 37,395. Commerce further determined that British Steel had received subsidies from a variety of programs such as government equity infusions, cancelled debt, and regional development programs. Id. at 37,395-97. At the conclusion of each discussion of the various countervailable government programs providing benefits to British Steel, Commerce explained that it had calculated the benefit and net subsidy under that program for BS plc for the period of investigation. See id. In other words, Commerce had applied its privatization and repayment methodology by countervailing BS plc for subsidies bestowed upon British Steel because BS plc was British Steel's "corporate successor." In its brief discussion of privatization, Commerce explained once again: In this final determination, we have determined that a portion of the price paid for a formerly government-owned company represents partial repayment of prior subsidies. We calculated the portion of the purchase price attributable to repayment of prior subsidies. We then reduced the benefit streams for each program by the ratio of the repayment amount to the net present value of the remaining benefits at the time of privatization. A further explanation of the Department's determination on privatization and these calculations can be found in the Privatization section of the General Issues Appendix. The subsidies allocated to the [period of investigation] for BS plc reflect, where appropriate, the application of the privatization methodology. Id. at 37,394. CONTENTIONS OF THE PARTIES A. The Foreign Producers The Foreign Producers' contentions concerning the general issue of privatization as set forth in the General Issues Appendix and applied in the applicable determinations in the CVD series published in the Federal Register on July 9, 1993, are described above in the Court's discussion of the Mexican Final Determination. With regard to the privatization of British Steel, the Foreign Producers contend that British Steel, a Crown corporation, was privatized in 1988. (Resp'ts' J.Br. in Supp. of Mot. for Partial J. on R. (Resp'ts' J.Br.), Vol. I at 6). To effect privatization, "the U.K. Government created a new company limited by shares called British Steel plc ... to 1281 which all of the Crown corporation's property, rights and liabilities were transferred" pursuant to the British Steel Act of 1988. (Id. at 5-6; see Resp'ts Answers at 4). The British Steel Act also authorized the sale of ordinary shares in BS plc to the public. (Resp'ts' Answers to Ct.'s Questions (Resp'ts' Answers) at 4). On November 23, 1988, two billion shares in BS plc were offered for sale. (Resp'ts' J.Br., Vol. II Tab A at 6). The Foreign Producers further maintain that since 1988, the U.K. government has held two types of ownership interests in BS plc. (Id. at 7-8). First, the United Kingdom's "Secretary of State for Trade and Industry retained a single Special Share in BS plc on behalf of the government.... intended to prevent any alteration of specified Articles of Association." (Id. at 7). The Special Share was redeemed at par in 1993. Second, the U.K. government retained 34,088 shares of BS plc "to deal with the logistical problems." (Id.). The Foreign Producers contend, however, "[t]he U.K. Government intends to dispose of these remaining shares in due course." (Id. at 8). The Foreign Producers contend that BS plc's shares were transferred "at a price reflecting the fair market value of the entire company." (Resp'ts' J.Br., Vol. I at 6; see Resp'ts' Answers at 2-3). Specifically, the Foreign Producers argue that "arm's-length transaction" and "fair market value" are closely linked concepts. (Resp'ts' Answers at 1). In the determinations under review, they argue, Commerce "implicitly recognized that all the privatization transaction in these cases reflected the companies' actual value." (Id. at 2 (quoting Commerce's statement that a "privatized company now has an obligation to provide to its private owners a market return on the company's full value," General Issues Appendix, 58 Fed.Reg. 37,262)). The Foreign Producers thus contend that "[i]f the owners have paid the `full value' of the company, [Commerce] necessarily must have found that the transactions occurred at arm's length and involved payment for the market value of the company." (Id.). The Foreign Producers argue, furthermore, that in the investigation Commerce verified facts supporting the finding that the privatization at issue was effected at fair market value. (Id.). B. The Domestic Producers The Domestic Producers' contentions concerning the general issue of privatization as set forth in the General Issues Appendix and applied in the applicable determinations in the CVD series published in the Federal Register on July 9, 1993, are described above in the Court's discussion of the Mexican Final Determination. With regard to the privatization of British Steel, the Domestic Producers contend that BS plc is in all material and commercial respects the same company that received subsidies. (AK Steel Corp., et al., Answers to Ct.'s Questions at 4; see also id. at 13 (quoting Commerce's statement in the British Final Determination that BS plc "is the corporate successor to British Steel Corporation") (footnote omitted)). The Domestic Producers maintain that when all of British Steel's property, rights, and liabilities were transferred to BS plc under the British Steel Act, BS plc "became the legal owner of [British Steel's] assets, both tangible and intangible." (Id. at 15). British Steel and BS plc "from the perspective of the British Government and in all significant commercial respects ... were the same company." (Id.). To privatize the company now named BS plc, the company simply issued and sold shares. (Id. at 14, 16). Thus, "[t]he privatization reflected a change in the owners of the shares of British Steel plc only." (Id. at 16 (emphasis omitted)). The Domestic Producers take no position, however, on whether the transaction occurred at fair market value. The Domestic Producers claim that whether a privatization is effected at fair market value "is not relevant to the law, which does not concern itself with whether the new shareholders benefit as a result of the change in the subsidized company's ownership." (Id. at 3). C. The Department of Commerce The Department of Commerce's contentions concerning the general issue of privatization as set forth in the General Issues Appendix and applied in the applicable determinations 1282 in the CVD series published in the Federal Register on July 9, 1993, are described above in the Court's discussion of the Mexican Final Determination. With regard to the privatization of British Steel, Commerce maintains British Steel was privatized in 1988 through a public offering of shares. (Def.'s Br. in Opp'n to Mots. for J. on R. at 8 (stating that "British Steel plc ... became the corporate successor to British Steel Corporation ... when the British Government sold [British Steel] through a public offering of shares"); see also Def.'s Resp. to Ct.'s Questions at 4). Commerce contends that prior to the offering, British Steel became BS plc under the terms of the British Steel Act of 1988. (Def.'s Resp. to Ct.'s Questions at 10). According to evidence on the record, Commerce maintains, the British Steel Act of 1988 acted as a statutory instrument whereby British Steel's assets vested into BS plc. (Id. at 11 (citations omitted)).[37] Record evidence further shows that the British Steel Act "`was to change the legal status of British Steel from a public corporation to a public limited company but it was intended that the successor company should be regarded for all practical commercial purposes as the same company.'" (Id. (citation omitted) (emphasis added by Commerce)). Commerce makes no representation and claims to have made no findings as to whether the privatization transaction occurred at arm's length or for fair market value. (Id. at 2, 4). Commerce explains that it only applied its privatization methodology where "legitimate sales" took place. (Id. at 2). A legitimate sale, according to Commerce, "`must involve unrelated parties, one of which must be privately-owned.'" (Id. (quoting General Issues Appendix, 58 Fed. Reg. at 37,266)). Because Commerce focused only on the "legitimate sale" question, the agency claims it did not need to determine whether the transaction occurred at arm's-length or for fair market value. (Id. at 2-4). DISCUSSION In the British Final Determination, Commerce appears to have concluded that "BS plc is the corporate successor to the British Steel Corporation[,] ... a company that was wholly-owned by the UK government." British Final Determination, 58 Fed.Reg. at 37,394. Commerce also appears to have determined that a privatization took place. See id. Because Commerce determined a privatization occurred, it applied its privatization methodology. See id. ("The subsidies allocated to the [period of investigation] for BS plc reflect, where appropriate, the application of the privatization methodology."). Commerce failed, however, to explicate in the British Final Determination how British Steel was privatized other than to state that, In 1988, the UK government sold [British Steel] through a public offering of shares. With the exception of a Special Share which represents approximately 0.000017 percent of the total number of shares issued and which is intended to prevent persons, or persons acting in concert, from having an interest of 15 percent or more in the company, the UK government currently holds no ownership interest in BS plc. Id. Other than in this passage, Commerce did not articulate the circumstances of the transaction at issue in the British Final Determination. Commerce made no determination as to whether the transaction took place at arm's length for fair market value based upon commercial considerations. See Def.'s Resp. to Ct.'s Questions at 2, 4. Furthermore, Commerce did not explain in the British Final Determination if, by stating that "BS plc is the corporate successor" to British Steel, Commerce found that BS plc is for all intents and purposes the same corporation as British Steel.[38] 1283 Accordingly, the British Final Determination is remanded to Commerce with instructions to examine and report to the Court if and how privatization took place. If privatization occurred, the Court instructs Commerce in its remand determination to advise the Court as to the nature of the privatization transaction. Commerce argues to this Court that British Steel became BS plc, and subsequently shares of BS plc were sold. See Def.'s Resp. to Ct.'s Questions at 10. If this is so, Commerce should inform this Court: (1) whether British Steel and BS plc, prior to any sale of BS plc's shares, were for all intents and purposes the same entity; and (2) whether, after any sale of BS plc's shares, BS plc continued to be for all intents and purposes the same corporate entity that existed prior to the sale, that is, if privatization took place, whether privatized BS plc was for all intents and purposes the same corporate entity as pre-privatization BS plc. Commerce is also to inform this Court: (1) whether each aspect of the transaction was at arm's length, for fair market value, and based upon commercial considerations; (2) whether each aspect of the transaction involved a privatization or partial privatization; (3) the terms and substance of each aspect of the transaction and whether each transaction involved a sale of an asset or several assets or consisted entirely of a sale of shares; and (4) whether, under the Court's analysis, Commerce may properly countervail BS plc. Commerce is further directed to perform and report to this Court the following calculations: (1) Commerce will calculate and report any countervailing duties due, if any, by any transferor and transferee subsequent to privatization; (2) if, under the Court's analysis, Commerce determines it may properly countervail BS plc as a surviving corporate entity, Commerce will calculate any and all countervailing duties due; and (3) Commerce will calculate any and all countervailing duties due on account of any other type of privatization transaction arising. In its calculations Commerce shall, where applicable, make any corrections necessary on account of allocation and/or sales denominator adjustments occasioned by the respective remands on those issues. IV. CERTAIN STEEL PRODUCTS FROM GERMANY BACKGROUND In April 1989, the Government of Saarland and a French company, Usinor Sacilor, reached an agreement whereby Saarstahl Volklingen GmbH (Saarstahl), a government-owned company, and AG der Dillinger Hüttenwerke (Dillinger) were transferred to a newly created holding company, Dillinger Hütte Saarstahl AG (DHS). German Final Determination, 58 Fed.Reg. at 37,320. In the German Final Determination, Commerce characterized the transaction as follows: Under the terms of this agreement, Saarstahl and Dillinger became wholly-owned subsidiaries of DHS. The Government of Saarland contributed the assets of Saarstahl and DM 145.1 million in cash in return for 27.5 percent ownership of the holding company, DHS. Usinor Sacilor contributed its shares of Dillinger to DHS in return for 70 percent ownership of the holding company.... Pursuant to the purchase agreement, the Governments of Germany and Saarland forgave all of the outstanding debts owed to them by Saarstahl.... In addition, private creditors forgave debt amounting to DM 217.1 million as part of the restructuring of the two companies. Id. Commerce found the forgiveness of debt by the Governments of Germany and Saarland to constitute a countervailable benefit. Id. Commerce also found the private debt forgiveness countervailable "because it was required by the governments as part of a 1284 government-led debt reduction package, and because the two governments guaranteed the future liquidity of Saarstahl, thereby implicitly assuring the private banks that the remaining portion of Saarstahl's outstanding loans would be repaid." Id. Commerce further determined that Saarstahl benefitted from the debt forgiveness and attributed those benefits to DHS as the purchaser of Saarstahl: "[T]he debt forgiveness provided by the Governments of Germany and Saarland and the private creditors, provided benefits to Saarstahl which were then passed through to DHS with the 100 percent spin-off of Saarstahl to DHS." Id. Accordingly, Commerce apparently applied the methodologies set forth in the General Issues Appendix and reduced the amount of subsidies attributable to DHS based on the notion that a portion of the sales price paid for Saarstahl repaid part of the subsidies. Id.; see id. at 37,316; see also General Issues Appendix, 58 Fed.Reg. at 37,269 ("[C]onsistent with the Department's position regarding privatization, the Department will analyze the spin-off and acquisition of productive units to assess what portion of the sale price of the productive unit repays prior subsidies given to the seller of the productive unit.").[39] CONTENTIONS OF THE PARTIES A. The Domestic Producers The Domestic Producers' contentions concerning the general issue of privatization as set forth in the General Issues Appendix and applied in the applicable determinations in the CVD series published in the Federal Register on July 9, 1993, are described above in the Court's discussion of the Mexican Final Determination. The Domestic Producers contend that Commerce's application of the privatization and repayment methodology to the creation of DHS, thus reducing the amount of subsidies attributable to DHS, is not supported by substantial evidence and is not otherwise in accordance with law. (Pls.'s J.Br. in Supp. of Mot. for J. on R. at 61). The Domestic Producers argue that the subsidy at issue, the forgiveness of certain debts incurred by Saarstahl, was provided to DHS, not to Saarstahl, in the course of the creation of DHS. (Reply Br. of Def.-Intervenors at 54). By its own terms, the Domestic Producers maintain, for Commerce's repayment methodology to apply subsidies must have been bestowed prior to the transaction at issue. (Id. at 55). Here, however, "the subsidy was the debt forgiveness that occurred at the time of the transaction and was a condition to the transaction itself. In this context, by definition, DHS was the original beneficiary." (Id. at 56 (footnote omitted)). Furthermore, even if the Court should disagree with the Domestic Producers' contention that Commerce's repayment methodology does not apply because the subsidy was provided to DHS during the course of its creation, the Domestic Producers argue Commerce's determination that the creation of DHS was a privatization is not supported by factual evidence on the record. (Id.). B. The Foreign Producers The Foreign Producers maintain that Commerce "does not dispute that fair market value was paid in the 1989 Transaction by which Dillinger and Saarstahl became subsidiaries of the holding company, DHS." (Resp'ts' Answers to Ct.'s Questions at 10; see also id. at 12 ("Dillinger submits that the Government perhaps misspoke when it included the German transaction among those about which it stated that no specific arm's-length finding was made.")).[40] Pursuant to 1285 the transaction, Saarstahl was fully privatized and its new owner was DHS. (Id. at 12). While the Government of Saarland owned a 27.5% "non-controlling interest" in DHS, Commerce "found that the Government's interest in the new entity had been acquired on commercially consistent terms, which were established by the independent accountants." (Id.). Furthermore, the Foreign Producers argue, Commerce "has never suggested that, after the privatization, DHS, or Saarstahl, was the same entity as the privatized company while under Government ownership." (Id. at 14). C. The Department of Commerce The Department of Commerce's contentions concerning the general issue of privatization as set forth in the General Issues Appendix and applied in the applicable determinations in the CVD series published in the Federal Register on July 9, 1993, are described above in the Court's discussion of the Mexican Final Determination. With regard to the corporate transaction relevant to the German Final Determination, Commerce maintains it properly applied its privatization methodology. Commerce contends that the transaction resulting in the formation of DHS was not an internal corporate restructuring, but instead resulted in an independent, joint-venture company. (Def.'s Br. in Opp'n to Mots. for J. on R. at 101, 103). Commerce maintains that under the April 1989 agreement, DHS became the holding company for both Saarstahl and Dillinger. (Id. at 103). Saarstahl was thus privatized when the Government of Saarland sold Saarstahl to DHS. (Id. at 104). Citing this Court's decision in Saarstahl, Commerce contends the argument that privatization could not have occurred because the Government of Saarland still owned 27.5% of the purchaser, DHS, does not change the analysis. (Id.). Finally, Commerce contends it properly determined that countervailable benefits in the form of debt forgiveness were provided originally to Saarstahl, not DHS. (Id. at 106-07). Commerce maintains, however, it made no specific finding regarding whether fair market value was paid in the transaction, or whether the transaction took place at arm's length. (Def.'s Resp. to Ct.'s Questions at 2, 3). Commerce does reiterate its statement in the German Final Determination that "`[t]he Government of Saarland contributed the assets of Saarstahl and DM 145.1 million in cash in return for 27.5 percent ownership of the holding company, DHS.'" (Id. at 6 (citation omitted)). Commerce claims, however, to have "made no ... specific finding regarding the nature of Saarstahl either before or after privatization." (Id. at 16). DISCUSSION In Saarstahl, AG v. United States, 18 CIT ___, 858 F. Supp. 187 (1994), this Court held that the attribution of subsidies, consisting of the forgiveness of debt by the government and private banks, previously bestowed upon Saarstahl to DHS after DHS acquired Saarstahl in an arm's-length transaction was unlawful. Id. at ___, 858 F.Supp. at 191. As discussed above, this Court reasoned in Saarstahl that Saarstahl was privatized in an arm's-length transaction in which DHS paid for all that it received. Id. at ___, 858 F.Supp. at 192. DHS, therefore, did not realize any countervailable benefit and any countervailable duty assigned to it amounts to a penalty. Id. at ___, 858 F.Supp. at 192-93. This Court's decision and analysis in Saarstahl is consistent with the analysis set forth in the Court's present opinion. As discussed above, Commerce may only countervail a privatized company for pre-privatization subsidies if the privatized company is the same or partially the same entity that received those subsidies. Whether the privatized company is the entity that received the subsidy depends upon the nature of the privatization transaction undergone. If, for example, a company is privatized through a simple stock transfer carried out at arm's-length for fair market value based upon commercial 1286 considerations, only the ownership interests in that corporation have changed; the corporation itself still exists and may continue to be countervailed. If, however, a government-owned company is privatized through a sale of that company's several assets, Commerce cannot countervail the purchaser of those assets as long as the purchaser pays fair market value at arm's length based upon commercial considerations. In that case, Commerce cannot countervail for pre-privatization subsidies not only because the purchaser has paid for all which it is to receive, but also because the purchaser/transferee is not the same entity that received the subsidies. Commerce could, however, continue to countervail the transferor.[41] It appears from the German Final Determination Commerce found that Saarstahl was privatized in a transaction involving a sale of Saarstahl's several assets: "The Government of Saarland contributed the assets of Saarstahl and DM 145.1 million in cash in return for 27.5 percent ownership of the holding company, DHS." German Final Determination, 58 Fed.Reg. at 37,320 (emphasis added). Commerce also appears to have determined that Saarstahl was the original recipient of the subsidies. Id. The Domestic Producers, however, characterize the transaction as a "reorganization" of Saarstahl followed by a sale of its shares. (Answers of AK Steel Corp., et al., to Ct.'s Questions at 7-8 ("Saarstahl was reorganized as DHS Dillinger Hütte Saarstahl.... The Government of Saarland acquired a 27.5 percent ownership interest in the enlarged DHS in exchange for a cash contribution of DM 145.1 million.") (footnote omitted)). Domestic Producers also claim that, because the loan forgiveness occurred during the transaction and as a requirement of DHS's creation, the benefit vested in DHS, not in Saarstahl. See Pls.'s J.Br. in Supp. of Mot. for J. on R. at 9, 11. If in fact Commerce has interpreted the evidence to conclude that the loan forgiveness constituted a subsidy to Saarstahl and not to DHS, and that Saarstahl was privatized through a sale of its several assets, as long as those interpretations are supported by substantial evidence they will stand. See, e.g., Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S. Ct. 1018, 1026, 16 L. Ed. 2d 131 (1966) ("[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence.") (citations omitted). However, other than setting forth the conclusory statements that "the debt forgiveness ... provided benefits to Saarstahl which were then passed through to DHS," and "the Government of Saarland contributed the assets of Saarstahl," Commerce does not appear to have explicated how it reached its determinations in the German Final Determination. German Final Determination, 58 Fed.Reg. at 37,320. In oral argument before this Court, Commerce informed the Court that the privatization of Saarstahl was at fair market value. See Tr. at 483 ("Other than Brazil and Mexico, for all the remaining countries the Commerce Department determined that the transactions were made at ... fair market value."). Commerce also informed this Court during the course of the Saarstahl proceeding that the privatization of Saarstahl was an arm's-length transaction. Saarstahl, 18 CIT at ___, 858 F.Supp. at 192 (("In response to the Court's question "was this an arm's length transaction," the government responded, "Yes, it was.") (citing Saarstahl Tr. at 19)). Indeed, the very holding of 1287 Saarstahl was premised in substantial part upon the proposition that "Saarstahl was privatized in an arm's length transaction." Id. at ___, 858 F.Supp. at 192. Commerce now informs this Court, however, that it did not in fact make such findings. See, e.g., Def.'s Resp. to Ct.'s Questions at 2, 3, 13. Commerce also claims to have made no specific finding as to whether the privatized entity is the same entity as the company that received subsidies. (Id. at 16). The Foreign Producers inform this Court in their response to this Court's post-oral argument questions on privatization that Commerce has made a specific finding that the 1989 Transaction was at arm's length. (Resp'ts' Answers to Ct.'s Questions at 10). The Foreign Producers take the position that Commerce first made these findings in Certain Hot Rolled Lead and Bismuth Carbon Steel Products from Germany, 58 Fed.Reg. 6233, 6234, 6235-37 (1993) (Leaded Bar), in which Commerce stated: We believe that the equity infusion made by the Government of Saarland into DHS was on terms consistent with commercial considerations.... [W]e determine that the equity infusion made by the Government of Saarland into DHS was made on terms consistent with commercial considerations. (Id. at 10 (quoting Leaded Bar, 58 Fed.Reg. at 6236)). The Foreign Producers maintain that this Court upheld Commerce's "findings of an arm's-length and fair market value transaction on appeal of the Leaded Bar determination." (Id. (citing Saarstahl, 18 CIT at ___, 858 F.Supp. at 192-93)). Furthermore, they argue, Commerce has carried forward its determination into the instant case and is defending its determination in this litigation. (Id. at 11). It is the position of this Court that because Commerce has specifically informed this Court that: Commerce made no specific findings that the privatizations in the Brazil, Germany, Mexico, and United Kingdom certain steel CVD investigations were necessarily of arm's-length transactions[;] .... ... Commerce made no specific finding regarding whether fair market value was paid[;] ... On further review of the record, Commerce respectfully must correct the suggestion it initially made to the Court regarding whether Commerce had made a specific finding that a fair market value was paid in the privatization of Saarstahl. Commerce made no such specific finding[;] .... ... Commerce made no ... specific finding regarding the nature of Saarstahl either before or after privatization[;] (Def.'s Resp. to Ct.'s Questions at 2, 3, 13, 16), the German Final Determination must be remanded so that Commerce may properly make these findings and report them to this Court with articulated reason and consistency. Accordingly, the German Final Determination is remanded to Commerce. Specifically, Commerce is to report to this Court the following: (1) whether the privatization transaction at issue was effected at arm's length, for fair market value, and based upon commercial considerations; (2) whether the transaction at issue involved a privatization or partial privatization; (3) the terms and substance of the transaction at issue, and whether the transaction involved a sale of an asset or several assets, or consisted entirely of a sale of shares; (4) whether, under the Court's analysis, if a privatization or partial privatization took place, the privatized entity continues to be, for all intents and purposes, the same entity that received subsidies prior to the transaction; and (5) whether, under the Court's analysis, Commerce may properly countervail DHS or any other party. Commerce is further directed to perform and report to this Court the following calculations: (1) Commerce will calculate any countervailing duties due, if any, by any transferor and transferee subsequent to a privatization; (2) if, under the Court's analysis, Commerce determines that any privatized or partially privatized entity continues to be, for all intents and purposes, the same entity that received subsidies prior to the privatization transaction, Commerce will calculate any and all countervailing duties due on such surviving 1288 entity; and (3) Commerce will calculate any and all countervailing duties due on account of any other type of privatization transaction involved. In its calculations Commerce shall, where applicable, make any corrections necessary on account of allocation and/or sales denominator adjustments occasioned by the respective remands on those issues. V. MOTION FOR SUMMARY JUDGMENT BASED ON ISSUE PRECLUSION Under LTV Steel Co., Inc. et al. v. United States, Consol. Court No. 93-09-00568-CVD, one of the consolidated cases under the Court's scheduling order governing this joint proceeding, AG der Dillinger Hüttenwerke (Dillinger) has moved for summary judgment based on a claim of issue preclusion. LTV Steel involves an appeal from the administrative determination in Certain Steel Products From Germany, 58 Fed.Reg. 37,315 (Dep't Comm.1993) (final determ.). Dillinger contends that this Court's decision in Saarstahl, AG v. United States, 18 CIT ___, 858 F. Supp. 187 (1994), warrants the granting of summary judgment in the present case. In Saarstahl this Court adjudicated on the merits the appeal of an administrative determination involving Dillinger's former sister company, Saarstahl AG. Dillinger maintains that the administrative determination appealed in Saarstahl involved "virtually identical facts" as the administrative determination in the present case. (Def.-Intervenor's Mot. for Summ.J. at 3). Dillinger claims the source of the subsidy and the countervailable event are the same in both final determinations, as well as the parties, and the time period. Dillinger also argues that the central issues in both appeals are identical. (Id. at 5). Accordingly, Dillinger argues this Court's decision in Saarstahl should be applied in favor of Dillinger and its parent company DHS. (Id. at 8). Commerce does state in its response that "there is no dispute that the privatization transaction involved in Saarstahl is the same involved here." (Def.'s Opp'n to Mot. for Summ.J. at 4). From the parties' briefs in the joint proceeding addressed in this opinion as well as the Federal Register determination itself, however, the Court discerns that the issues sought to be precluded may be somewhat obfuscated. The transaction that resulted in DHS holding Dillinger and Saarstahl as subsidiaries was a complicated one not fully explained by Commerce. See, e.g., German Final Determination, 58 Fed.Reg. at 37,320 ("The Government of Saarland contributed the assets of Saarstahl.... Usinor-Sacilor contributed its shares of Dillinger to DHS...."). This Court cannot discern from the German Final Determination or the parties' briefs whether the issues to be determined are identical. The Court has issued general remand instructions on the issue of privatization. The remand will presumably yield clarifying results. Accordingly, Dillinger's motion for summary judgment based on issue preclusion is denied. CONCLUSION After considering the arguments of all parties, the Court makes the following holdings on the issue of privatization: (1) Commerce's privatization methodology as set forth in the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed. Reg. 37,225, 37,259-74 (Dep't Comm.1993) (final determ.) and applied in Certain Steel Products from Brazil, 58 Fed.Reg. 37,295 (Dep't Comm.1993) (final determ.), Certain Steel Products from Mexico, 58 Fed.Reg. 37,352 (Dep't Comm.1993) (final determ.), Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm. 1993) (final determ.), and Certain Steel Products from Germany, 58 Fed.Reg. 37,315 (Dep't Comm.1993) (final determ.), to the extent it states pre-privatization subsidies bestowed upon government corporations continue to be countervailable after all types of privatization transactions and that purchasers of discrete assets of subsidized corporations at arm's length for fair market value based upon commercial considerations may be attributed with subsidies previously received by the subsidized seller corporations, is unlawful; (2) Commerce's determination in the Mexican Final Determination, insofar as it pertains to the application of Commerce's privatization methodology, is remanded pursuant 1289 to the instructions in this opinion and its accompanying order; (3) Commerce's determination in the Brazilian Final Determination, insofar as it pertains to the application of Commerce's privatization methodology, is remanded according to the instructions in this opinion and its accompanying order; (4) Commerce's determination in the British Final Determination, insofar as it pertains to the application of Commerce's privatization methodology, is remanded according to the instructions contained in this opinion and its accompanying order; (5) Commerce's determination in the German Final Determination, insofar as it pertains to Commerce's application of its privatization methodology, is remanded according to the Court's instructions in this opinion and its accompanying order; and (6) the motion of AG der Dillinger Hüttenwerke for summary judgment in LTV Steel Co., Inc. et al. v. United States, Consol. Court No. 93-09-00568-CVD, is denied in all respects. SECTION TWO: ALLOCATION METHODOLOGY Usinor Sacilor and Sollac (Usinor Sacilor) and British Steel plc (collectively "plaintiffs") jointly move for partial judgment on the agency record pursuant to U.S. CIT R. 56.2 and for an order declaring that aspect of the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed. Reg. 37,225, 37,225-31 (Dep't Comm.1993) (final determ.) (General Issues Appendix)[42] pertaining to the allocation methodology[43] employed by Commerce to amortize countervailable benefits as set forth in the General Issues Appendix and applied in the final countervailing duty determinations in Certain Steel Products from France, 58 Fed. Reg. 37,304 (Dep't Comm.1993) (final determ.) (French Final Determination)[44] and Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm. 1993) (final determ.) (British Final Determination)[45] to be unsupported by substantial evidence on the record and not otherwise in accordance with law. Defendant, the Department of Commerce (Commerce), opposes plaintiffs' motion and asserts Commerce's determinations are based on substantial evidence on the administrative record and are otherwise in accordance with law. AK Steel Corporation, Bethlehem Steel Corporation, Geneva Steel, Gulf States Steel Incorporated of Alabama, Inland Steel Industries, Incorporated, Laclede Steel Company, LTV Steel Company, Incorporated, Lukens Steel Company, National Steel Corporation, Sharon Steel Corporation, U.S. Steel Group a unit of USX Corporation, and WCI Steel, Incorporated (collectively "defendant-intervenors") oppose plaintiffs' motion and argue Commerce's determinations are fully supported by substantial evidence and are not contrary to law. BACKGROUND In allocating the economic benefits of nonrecurring subsidies, Commerce apportions the value of the subsidies over a number of years beginning with the year of receipt. See S.Rep. No. 249, 96th Cong., 1st Sess. 85-86 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 471 ("[I]n the case of nonrecurring subsidy grants or loans ... [r]easonable methods of allocating the value of such subsidies over the production or exportation of the products benefiting from the subsidy must be used."). The countervailing duty statute is silent, however, as to the methodology to be employed in allocating subsidy benefits. Commerce erected an allocation methodology using the Internal Revenue Service's 1977 Class Life Asset Depreciation Range 1290 System[46] (IRS tax tables) as a proxy. General Issues Appendix, 58 Fed.Reg. at 37,227. As explained by Commerce, Since 1982, it has been the Department's practice to allocate benefits from nonrecurring subsidies, such as grants and equity, over the average useful life of renewable physical assets, as set out in the U.S. Internal Revenue Service's Class Life Asset Depreciation Range System.... After careful consideration of the comments made by the interested parties, and our own internal examination of this policy, we have concluded that the allocation period traditionally used by the Department is the most reasonable. Furthermore, our use of the IRS tax tables ... is consistent with the Guidelines Adopted By The GATT Committee On Subsidies And Countervailing Measures: Guidelines on Amortization and Depreciation (GATT Doc. No SCM/64 of July 11, 1985). Id. In each of the investigations under review, Commerce "determined that the average useful life of renewable assets in the steel industry is 15 years, as set out in the IRS [tax] tables." Id. at 37,230. Thus, the agency found "the allocation period in these investigations is 15 years, which the Department considers to be reflective of the average useful life of assets in the steel industry." Id. (citing 54 Fed.Reg. 23,366, 23,384 (Dep't Comm.1989) (to be codified at 19 C.F.R. § 355.49(b)(3)) (proposed May 31, 1989) (Proposed Regulations)). The nonrecurring grants at issue in the French Final Determination are the conversion of "loans with special characteristics" to common stock received by Usinor and Sacilor in the amount of French francs (FF) 13.8 billion in 1981 and FF12.6 billion in 1986. French Final Determination, 58 Fed.Reg. at 37,307. Commerce determined Usinor Sacilor to be unequityworthy from 1978 through 1988 and therefore "consider[ed] the conversion of PACS to common stock in 1981 and 1986 to constitute equity infusions on terms inconsistent with commercial considerations." Id. Usinor Sacilor's conversion of "Fonds d'Intervention Sidérurgique" bonds to common stock in 1986 and 1988 were also construed as nonrecurring grants by Commerce. Id. Commerce's treatment of Usinor Sacilor's conversions of the FIS instruments paralleled the agency's treatment of the company's PACS conversions. Thus, because Commerce found Usinor Sacilor unequityworthy in 1986 and 1988, Commerce "consider[ed] the conversion of FIS bonds to common stock in 1986 and 1988 to constitute equity infusions on terms inconsistent with commercial considerations." Id. In the British Final Determination, Commerce determined British Steel Corporation (British Steel) was unequityworthy from 1977-78 through 1985-86. British Final Determination, 58 Fed.Reg. at 37,395. Therefore, the equity infusions provided to British Steel by the U.K. Government between 1977-78 through 1985-86 were on terms inconsistent with commercial considerations. Id. In addition, the agency found British Steel wrote-off capital invested in the corporation by the U.K. Government under several Iron and Steel Acts in the amount of £3.0 billion in 1981, £1.0 billion in 1982, and £2.98 billion in 1988. Id. These equity infusions and debt write-offs constituted nonrecurring grants subject to the 15-year allocation period employed by Commerce. Id. at 37,396. ISSUE PRESENTED Whether Commerce's use of a 15-year allocation period to amortize the benefits conferred by nonrecurring countervailable subsidies is supported by substantial evidence on the record and is otherwise in accordance with law. CONTENTIONS OF THE PARTIES A. Plaintiffs Plaintiffs first argue the 15-year allocation period is improper because it ignores that an infusion of fungible capital benefits a company's overall operations and not only the acquisition of depreciable physical assets. 1291 (Pls.' Br. at 15). Plaintiffs contend Commerce must "allocate the benefits from a nonrecurring subsidy over a `reasonable period' that reflects the duration of the `commercial and competitive benefit' of the subsidy to the recipient." (Pls.' Br. at 5 (quoting S.Rep. No. 249, 96th Cong., 1st Sess. 85-86 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 471-72)). Plaintiffs claim it is unreasonable to assume benefits extend through the life cycle of the steel industry's depreciable physical assets and therefore, Commerce's depreciable physical assets methodology is not a "reasonable proxy for the actual duration of the commercial and competitive benefits." (Id. at 8). As plaintiffs explain, a "company's operations necessarily require the allocation of capital to many other areas, the impact of which may be appropriately attributable to the year of expenditure or to a period of significantly shorter duration than the depreciation period for renewable physical assets." (Id. at 9 (footnote omitted)). Plaintiffs assert Commerce cites to "no empirical evidence supporting its `industry life cycle' concept.... Indeed, there is no mention whatsoever of supporting evidence in the record" establishing the reasonableness of the depreciable physical assets methodology. (Id. at 10-11; see Pls.' Reply Br. at 8). Second, plaintiffs argue Commerce itself has acknowledged the arbitrariness of the methodology because Commerce has "repeatedly and explicitly acknowledged in past cases that the average useful life of assets does not necessarily bear any relation to the economic benefit conferred by subsidy funds." (Pls.' Br. at 12; see id. at 13 (quoting Certain Carbon Steel Products from Mexico, 49 Fed.Reg. 5142, 5150 (Dep't Comm.1984) (prelim. determ.) (Carbon Steel Products from Mexico); Cold-Rolled Steel Flat Products from Argentina, 49 Fed.Reg. 18,006, 18,018, 18,021 (Dep't Comm.1984) (final determ.) (Flat Products from Argentina))). Plaintiffs emphasize Commerce's earlier finding that "`the average life of equipment is arguably no more accurate a measure than simply choosing a number.'" (Id. at 13 (quoting Carbon Steel Products from Mexico, 49 Fed.Reg. at 5150)). Plaintiffs quote from Flat Products from Argentina, where Commerce stated: [W]e recognize first that the physical assets are often a fairly small part of the costs of doing business, and second that even in highly capital intensive industries the benefit of funds received ... has no particular relationship to the life of the machinery.... We originally chose the average useful life of assets because we believed the benefits of a grant somehow had a life approximating the life of assets. ... We now consider this belief wrong.... (Id. at 12 (emphasis omitted) (quoting Flat Products from Argentina, 49 Fed.Reg. at 18,018, 18,021)). Because Commerce correctly recognized that physical assets are often a "small part of the costs of doing business," plaintiffs contend Commerce cannot justify its allocation methodology which purports to "treat[] all such capital as if it were used to acquire depreciable physical assets." (Id. at 15-16). This approach fails to recognize that capital "is used for a range of corporate purposes, e.g., to cover cash losses, finance working capital needs (net receivables and inventory), finance research and development, and fund the closure of facilities." (Id. at 15). Plaintiffs assert Commerce "must adopt a reasonable allocation approach that reflects the fact that an infusion of fungible capital provides a company with a financial benefit that flows to the company's overall operations and funds all corporate purposes." (Id. at 16). Finally, plaintiffs allege the physical assets methodology was "unequivocally rejected by this Court eight years ago." (Id. at 13 (citing British Steel Corp. v. United States, 10 CIT 224, 238, 632 F. Supp. 59, 69 (1986) (British Steel II))). In British Steel II, the Court found Commerce's methodology to be unreasonable and not in accordance with the law and remanded for "further consideration of other `viable options' that may more reasonably reflect the benefit of the subsidies in question." British Steel II, 10 CIT at 238, 632 F. Supp. at 69-71; see also Ipsco, Inc. v. United States, 12 CIT 359, 372, 687 F. Supp. 614, 625-26 (1988) (quoted in Pls.' Br. at 13-14). 1292 B. Defendant Commerce advances several claims in support of its use of the 15-year allocation period. Commerce argues the allocation period conforms with the practice the agency has developed over the last ten years. Commerce recognizes the congressional mandate that "the allocation period must reasonably reflect `the commercial and competitive benefit to the recipient.'" (Def.'s Br. at 5 (quoting S.Rep. No. 249 at 85-86, reprinted in 1979 U.S.C.C.A.N. at 381, 471-72)). Commerce contends, however, several reasonable options exist "that could form the basis for estimating the commercial and competitive benefits and none is clearly superior to the others." (Id.). Commerce explains that "[a]fter careful consideration of the comments ... and our own internal examination of this policy, we have concluded that the allocation period ... is the most reasonable." General Issues Appendix, 58 Fed.Reg. at 37,227. Commerce asserts it "bases its amortization methodology upon the average useful life of assets because, given that benefits can continue indefinitely, it is reasonable to assume that benefits extend at least throughout a single `life cycle' within the industry." (Def.'s Br. at 6 (footnote omitted)). Commerce analogizes "average life cycle" to "average life expectancy," arguing the "average useful life of renewable assets is, in a sense, an average industrial life expectancy because ... `if the assets are not renewed, operations would cease.'" (Id. at 7 (citing General Issues Appendix, 58 Fed.Reg. at 37,230)). The industry lifetime, Commerce continues, "is a finite period that enables Commerce reasonably to measure the impact of the subsidy." (Id.). Commerce rejects plaintiffs' assertion that the allocation methodology treats all grants as if they were used to acquire depreciable physical assets, stating it "reveals a fundamental error in plaintiffs' perception of the methodology." (Id. at 7 (citing Pls.' Br. at 15)). Commerce's use of the average useful life of assets as the basis for its allocation period is not premised upon treating all non-recurring grants as if they were used to purchase physical assets.... [I]t is merely a means of reducing the indefinite to a finite period that can reasonably be used to measure the benefits of the grant over time regardless of how the funds are used. (Id. at 8). Furthermore, Commerce notes that "amortizing benefits over the average useful life of assets has the added advantage of promoting consistency and predictability in the administration of the countervailing duty law." (Id. at 11). C. Defendant-Intervenors Defendant-Intervenors contend the British Steel and Ipsco decisions do not prohibit Commerce from using the 15-year allocation period, but instead require that Commerce's chosen allocation methodology satisfy two criteria: "(1) the allocation period must be reasonably related to the period of commercial and competitive benefit enjoyed by the recipient; and (2) the Department's determination must relate to the record evidence." (Def.-Intervenors' Br. at 11). Defendant-Intervenors argue Commerce's application of its allocation methodology satisfies these criteria and is therefore supported by substantial evidence and is otherwise in accordance with law. (Id.). Additionally, defendant-intervenors contend the Court's decision in Ipsco, Inc. v. United States, 13 CIT 335, 710 F. Supp. 1581 (1989) (Ipsco III), rev'd in part on other grounds, 8 Fed.Cir. (T) 80, 899 F.2d 1192 (1990), upheld Commerce's "use of an allocation methodology based on the average useful life of renewable physical assets" and therefore such a methodology is acceptable under the law. (Id. at 4-5; see id. at 11). Defendant-Intervenors also assert Commerce's allocation methodology is "eminently reasonable, given the inherent limitations upon any methodology." (Id. at 14). As defendant-intervenors explain, [B]ecause it is impossible to know how long the benefits from a subsidy truly exist, it is reasonable to assume that they extend at least as long as if they were used to purchase physical assets. This approach satisfies the requirement enunciated by the Court, that [Commerce] relate any allocation period to the period over 1293 which a subsidy recipient enjoys the benefits of the subsidy. (Id. (footnote omitted)). Because "[t]here is no economic theory that would allow an identification of the actual period of subsidy benefits," defendant-intervenors continue, Commerce's approach "has identified the average useful life of assets as being a reasonable estimate of that period." (Id. at 15). Therefore, defendant-intervenors argue Commerce's methodology produces a "reasonable period related to the commercial and competitive benefits of subsidies." (Id.). Turning to the IRS tax tables upon which Commerce's methodology is based, defendant-intervenors defend the use of the tables as "a reasonable measure of the useful life of assets in the steel industry." (Id. at 17). Defendant-Intervenors point out that the IRS tax tables are the result of "extensive and repeated research of the actual depreciation periods used within the steel industry" and have been "vigilantly scrutinized, studied, and updated" over the last 30 years. (Id. at 16 (footnotes omitted)). Specifically, defendant-intervenors cite two United States Department of Treasury studies[47] providing "information of record" that, defendant-intervenors contend, supports Commerce's conclusion that "`the IRS tax tables are an accurate representation of the experiences of U.S. steel producers.'" (Id. at 17 (quoting General Issues Appendix, 58 Fed.Reg. at 37,230)). Finally, defendant-intervenors contend Commerce's allocation methodology is "reasonably related to the actual experience of the recipient of the subsidy," citing calculations made by domestic producers demonstrating "British Steel used a depreciation period of between 19 and 21 years for plant machinery, equipment, and vehicles." (Id. at 18-19 (citation omitted)). Drawing on information in Usinor-Sacilor's 1986 annual report, defendant-intervenors note that "Usinor-Sacilor adopted a 15 year amortization period." (Id. at 19 (footnote omitted)). This "evidence of record," defendant-intervenors claim, "establishes that [Commerce's] methodology satisfies the criteria for an allocation methodology that it be related to the actual benefit to the foreign recipient." (Id. (footnote omitted)). DISCUSSION It is unnecessary for this Court to belabor the various arguments advanced by Commerce and defendant-intervenors in support of Commerce's methodology. The government has unsuccessfully advocated similar positions before the CIT on numerous occasions. Specifically, in Ipsco, Inc. v. United States, 12 CIT 1128, 701 F. Supp. 236 (1988) (Ipsco II), the Court rejected the government's contentions regarding the reasonableness of Commerce's methodology. Ipsco II, 12 CIT at 1130-31, 701 F. Supp. at 238-39. There the Court reasoned, "[e]ven assuming arguendo that ITA may adopt any allocation period which it determines to be `reasonable,' it is unclear from the record why ITA believes that the IRS depreciation schedule for replaceable physical assets is a reasonably accurate indicator of economic reality in the light of plaintiffs' verified financial records." Id. at 1130, 701 F. Supp. at 238 (footnotes omitted). Likewise, in Ipsco, Inc. v. United States, 12 CIT 359, 687 F. Supp. 614 (1988) (Ipsco I), the Court rejected the government's rationale that Commerce's method produces consistency and predictability because such attributes do not "ensure the reasonableness of either the method, or the resulting period, in this or any other particular case." Ipsco I, 12 CIT at 372, 687 F. Supp. at 625. Moreover, in British Steel Corp. v. United States, 10 CIT 224, 632 F. Supp. 59 (1986) (British Steel II), the Court reached the conclusion that, [L]inking the commercial and competitive benefit of the subsidies at issue to the 15-year average useful life of capital assets in the U.S. steel industry, while administratively convenient, is unreasonable and not in accord with Congressional intent that the benefits be allocated over a period of time reflecting the commercial and combpetitive 1294 benefit of the subsidy to the recipient. British Steel II, 10 CIT at 236, 632 F. Supp. at 68. Although the Court must accord substantial weight to Commerce's interpretation of the statute it administers, American Lamb Co. v. United States, 4 Fed.Cir. (T) 47, 54, 785 F.2d 994, 1001 (1986), the Court must not defer to an agency interpretation "to alter the clearly expressed intent of Congress," Board of Governors of the Fed. Reserve Sys. v. Dimension Fin. Corp., 474 U.S. 361, 368, 106 S. Ct. 681, 685, 88 L. Ed. 2d 691 (1986). Simply put, "[t]he judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent." Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 n. 9, 104 S. Ct. 2778, 2781 n. 9, 81 L. Ed. 2d 694 (1984). The legislative history of the Trade Agreements Act of 1979 clearly sets forth Congress' intent with respect to allocating benefits of subsidies over time: There is a special problem in determining the gross subsidy with respect to a product in the case of nonrecurring subsidy grants or loans, such as those which aid an enterprise in acquiring capital equipment or a plant. Reasonable methods of allocating the value of such subsidies over the production or exportation of the products benefiting from the subsidy must be used. In particular, a reasonable period based on the commercial and competitive benefit to the recipient as a result of the subsidy must be used. For example, allocating a subsidy in equal increments over the anticipated 20-year useful life of capital equipment purchased with the aid of the subsidy would not be reasonable if the capital equipment gave the recipient of the subsidy an immediate significant competitive benefit compared to what would be the situation without the capital equipment and compared to the competitive benefit the equipment would likely provide in the later stages of its useful life. S.Rep. No. 249, 96th Cong., 1st Sess. 85-86 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 471-72 (emphasis added). As the foregoing legislative history makes clear, Congress intended Commerce to amortize the value of subsidies a firm receives in a manner reflecting the actual "commercial and competitive benefit" of the subsidies to the firm. Commerce's failure to allocate subsidy benefits in the manner Congress intended underlies the Court's previous holdings in the Ipsco and British Steel cases.[48] The CIT struck down Commerce's use of the IRS 1295 tables in those cases because nothing on the record demonstrated the IRS tables reflected "the commercial and competitive benefit to the recipient" as Congress intended. In Ipsco II, the Court noted "ITA has made no attempt to explain the figure it obtained from the IRS tables in relation to the facts of this case, so that the result might be said to reflect the economic reality of these particular plaintiffs." Ipsco II, 12 CIT at 1131, 701 F. Supp. at 239. Similarly, the Court in Ipsco I concluded, ITA has failed to provide a non-arbitrary basis for its decision to use a 15 year period that was derived from standardized IRS data on the useful life of equipment in the U.S. Steel industry, rather than a period that could be derived from verified information pertaining to the country and company under investigation in this case. Ipsco I, 12 CIT at 372, 687 F. Supp. at 626 (footnote omitted). Likewise, in British Steel II, the Court underscored that the "ITA failed to adequately explain why a 15-year allocation period is reasonable based on the commercial and competitive benefit of the subsidies in question to [the recipient firm]." British Steel II, 10 CIT at 236, 632 F. Supp. at 68; cf. Ipsco, Inc. v. United States, 13 CIT 335, 336, 710 F. Supp. 1581, 1583 (1989) (Ipsco III), rev'd in part on other grounds, 8 Fed.Cir. (T) 80, 899 F.2d 1192 (1990) (upholding an allocation methodology, different from the methodology at issue here, as supported by evidence on the record because it reflected "the economic useful life of all of Ipsco's replaceable physical assets"). The same deficiencies infect Commerce's determinations in these cases. Little on the record suggests Commerce considered whether and to what extent the 15-year useful life period prescribed by the IRS tax tables and incorporated into the agency's allocation methodology reflects the commercial and competitive benefits received by the firms under investigation as a result of nonrecurring grants and equity infusions.[49] Commerce correctly quotes Ipsco II's holding that the "Department's use of the 15-year period set out in the IRS table must be supported by substantial evidence in record." General Issues Appendix, 58 Fed.Reg. at 37,230 (citing Ipsco II); see also Memorandum from ITA Staff to Joseph A. Spetrini, Acting Assistant Secretary for Import Administration and Barbara R. Stafford, Deputy Assistant Secretary for Investigations, The Appropriate Period Over Which to Allocate the Benefits from Nonrecurring Subsidies 9 (stamped May 17, 1993; dated May 21, 1993) (ITA Allocation Memo), reprinted in Pls.' Br.App. Tab 3) ("From IPSCO II we know that the Department can continue to use the figures from the U.S. tax tables only if there is evidence in the record establishing that those tables are a `reasonable indicator of economic reality' for the respondents."). Commerce fails, however, to abide by this stricture and fails to point to substantial evidence on the record to justify its methodology notwithstanding its claim that "[s]uch evidence exists in the record of these determinations." General Issues Appendix, 58 Fed.Reg. at 37,230. The evidence cited by Commerce includes an explanation that the IRS tax tables employed in the allocation methodology are based on a study of the U.S. steel industry. ... [That] information can also be used as a reasonable estimate of the useful life of steel industry assets throughout the world.... [b]ecause we have no reason to 1296 believe, nor has any respondent claimed, that the general type of facilities and equipment used to produce steel in foreign countries is substantially different from that used in the United States, or that its useful life would be substantially different. Id. As additional evidence, Commerce notes this "conclusion is supported by information on the record in these investigations." Id. The information on the record cited by Commerce, however, is cursory and fails to provide this Court with record evidence upon which Commerce's allocation methodology may be upheld. Ostensibly, the evidence to support the methodology is Commerce's finding that "[a]nalysis of data on the depreciation of assets from the annual reports of several foreign companies currently under investigation demonstrates that 15 years is a reasonable estimate of the average useful life of assets in the steel industry worldwide." Id. (citing Memorandum from Joseph A. Spetrini, Acting Assistant Secretary for Import Administration to ITA Staff, The Appropriate Period Over Which to Allocate the Benefits from Nonrecurring Subsidies (stamped May 20, 1993) (Spetrini Allocation Memo), reprinted in Pls.' Br.App. Tab 3).[50] Commerce fails to clarify, however, which annual reports it examined, how it analyzed the data contained therein, and how this examination led Commerce to conclude its methodology is reasonably based on record evidence and is tied to the commercial and competitive benefits enjoyed by the foreign producers under investigation.[51] During oral argument, the Court asked Commerce to identify "the attributes of the methodology ... showing the commercial and competitive advantage to the recipient." (Tr. at 316). Commerce referred to a Department of Treasury study[52] of the "factors affecting prescribed capital cost, recovery allowance of steel industry equipment." (Id. at 318). The Treasury study was one of several studies confirming the "accuracy of the IRS class life for steel industry assets." (Petitioners' General Issues Case Br. Before the Int'l Trade Admin. (Apr. 28, 1993), reprinted in Def.-Intervenors' Br.App. Tab 1 at 30). At oral argument, Commerce argued the study gives us a window on the industry. We can look in at the industry and say what is happening. .... [A]mong several of the factors ... that were considered [in the study], were the historical retention periods, technical obsolescence, economic conditions, all ... of those factors are indicative of commercial 1297 and competitive benefits ... which led to the conclusion ... regarding the fifteen-year life cycle. And, consequently, there is support there is support in the record. (Id. at 318-19).[53] Beyond this general statement, there appears to be little pertinent evidence on the record explaining how the IRS tax tables or the Department of Treasury Study provide substantial evidence demonstrating the allocation methodology comports with the "commercial and competitive benefit" of the subsidies to the foreign steel producers. Commerce appears to have recognized this weak link in the record evidence when it stated in an internal memorandum, The 15 years in the tax table is based on a study of the U.S. industry to determine the actual AUL [actual useful life].... If the steel industry uses essentially the same physical assets worldwide, then the 15-year AUL should be consistent worldwide. There is some evidence on the record to support that conclusion, and respondents have not challenged using the IRS's 15-year AUL for subsidies used to purchase physical assets. Petitioners have done an analysis of annual report information for British Steel Corp. and for two of the largest German steel producers, which does appear to support the conclusion that 15 years is the AUL of assets in the industry. Whether that limited analysis constitutes "substantial evidence" that the 15 years in the tax tables is equally representative of the AUL worldwide is a close call .... Additionally, an analysis of the data for the other countries may not support the 15 years, which would probably render reliance on the tax tables indefensible. ITA Allocation Memo at 9-10, reprinted in Pls.' Br.App. Tab 3 (emphasis added). The Court notes further Commerce does not explain how its allocation methodology, in particular the use of the depreciation tables therein, reflects the commercial and competitive benefits of nonrecurring subsidies to other types of legitimate corporate commercial activity such as advertising, personnel management concerns, logistics of supplies, etc.[54] It is clear to this Court that the allocation methodology adopted by Commerce does not meet the test as set out in British Steel II to allocate subsidy benefits "over a period of time reflecting the commercial and competitive benefit of the subsidy to the recipient." British Steel II, 10 CIT at 236, 632 F. Supp. at 68 (emphasis omitted). 1298 It is not the role nor function of this Court to prescribe to Commerce which allocation methodology it should employ so long as the methodology applied is reasonable and conforms to Congress' intent.[55] However, Commerce must provide a clear statement of the evidence upon which the agency based its methodology as applied to each firm under investigation and that statement must be supported by substantial evidence on the record and be otherwise in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B) (1988); Alhambra Foundry v. United States, 9 CIT 632, 636, 626 F. Supp. 402, 408 (1985) ("[A]ny methodology employed must reasonably accurately reflect factual information in the administrative record.") (quoted in British Steel II, 10 CIT at 235, 632 F. Supp. at 68). The Court recognizes the apparent difficulty in allocating subsidy benefits in a manner reflecting the commercial and competitive benefit to the recipient while simultaneously refraining from tracing the use or effect of subsidies. See British Steel Corp. v. United States, 9 CIT 85, 95-96, 605 F. Supp. 286, 294-95 (1985) ("[I]t is unnecessary to trace the use of such funds or to find such funds or to find that they are directly related to enhances product competitiveness.") (citing Michelin Tire Corp. v. United States, 4 CIT 252, 255, 1982 WL 2251 (1982), vacated on agreed statement of facts, 9 CIT 38, 1985 WL 17682 (1985)). The Court observes that Commerce may find that after engaging in a case by case examination of the relevant commercial and competitive factors of the firms under investigation and making a clear pronouncement of those findings, the IRS tax tables as employed in the agency's allocation methodology still may properly serve as a proxy in allocating subsidy benefits. The Court cautions, however, the agency must demonstrate that the tax tables, in conjunction with other factual evidence on the record, reflect the commercial and competitive advantage enjoyed by the firms receiving nonrecurring subsidies.[56] The Court holds Commerce has failed to allocate the benefits of the subsidies received by the firms under investigation in a manner reflecting the actual "commercial and competitive benefit" of the subsidies to the companies, thus the Court concludes the determinations conflict with Congress' clearly expressed intent. See S.Rep. No. 249 at 85-86, reprinted in 1979 U.S.C.C.A.N. at 381, 471-72. As a result, this Court also concludes Commerce's use of a 15-year allocation period based solely on the IRS tax tables is "unsupported by substantial evidence on the record [and is] otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B). Accordingly, the Court holds the allocation methodology as set forth in the General Issues Appendix to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,225-31 (Dep't Comm.1993) (final determ.) to be unlawful. CONCLUSION The Court remands the general issue of the allocation methodology. Insofar as Certain Steel Products from France, 58 Fed. Reg. 37,304 (Dep't Comm.1993) (final determ.) is concerned, that determination is remanded to Commerce to reexamine the 1299 allocation methodology as employed therein for a case by case examination of the relevant commercial and competitive factors of the firms under investigation occasioned by receipt of the nonrecurring subsidies at issue. After having examined such factors, Commerce is directed to determine if those factors, when examined with or without a proxy such as the IRS tax tables, lead to a method of allocating the benefits of nonrecurring subsidies that reasonably reflects the commercial and competitive advantages enjoyed by the firms receiving such subsidies. Insofar as Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm.1993) (final determ.) (British Final Determination) is concerned, if Commerce should find in its remand determination on the general issue of privatization that any party is liable for countervailing duties, Commerce is directed to reexamine the allocation methodology as applied to those parties against whom countervailing duties have been assessed for a case by case examination of the relevant commercial and competitive factors of the firms under investigation occasioned by receipt of the nonrecurring subsidies. After having examined such factors, Commerce is directed to determine if those factors, when examined with or without a proxy such as the IRS tax tables, lead to a method of allocating the benefits of nonrecurring subsidies that reasonably reflects the commercial and competitive advantages enjoyed by the firms receiving such subsidies. Should Commerce find in its remand determination of the British Final Determination on the general issue of privatization that no parties are liable for countervailing duties, then the agency need not revisit the general issue of the allocation methodology. SECTION THREE: THE GRANT METHODOLOGY Plaintiffs Pohang Iron & Steel Company, Ltd. (POSCO), Usinas Siderurgicas de Minas Gerais, S.A. (USIMINAS), Usinor Sacilor and Sollac (Usinor Sacilor) and plaintiff-intervenor Companhia Siderurgica Nacional (CSN) (collectively "plaintiffs") jointly move for partial judgment on the agency record pursuant to U.S.CIT R. 56.2 and for an order declaring that aspect of the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,239-44 (Dep't Comm.1993) (final determ.) (General Issues Appendix)[57] pertaining to the grant methodology employed by Commerce to countervail equity infusions into unequityworthy companies set forth in the General Issues Appendix and applied in the final countervailing duty determinations in Certain Steel Products from Korea, 58 Fed. Reg. 37,338 (Dep't Comm.1993) (final determ.) (Korean Final Determination),[58]Certain Steel Products from Brazil, 58 Fed.Reg. 37,295 (Dep't Comm.1993) (final determ.) (Brazilian Final Determination),[59] and Certain Steel Products from France, 58 Fed. Reg. 37,304 (Dep't Comm.1993) (final determ.) (French Final Determination)[60] to be unsupported by substantial evidence on the record and not otherwise in accordance with law and to remand these determinations for new determinations in accordance with law. Defendant, the Department of Commerce (Commerce), opposes plaintiffs' motion and asserts that Commerce's determinations are based on substantial evidence on the record and are otherwise in accordance with law. AK Steel Corporation, Bethlehem Steel Corporation, Geneva Steel, Gulf States Steel Incorporated of Alabama, Inland Steel Industries, Incorporated, Laclede Steel Company, LTV Steel Company, Incorporated, Lukens Steel Company, National Steel Corporation, Sharon Steel Corporation, U.S. Steel Group a unit of USX Corporation, and WCI Steel, Incorporated (collectively "defendantintervenors") 1300 oppose plaintiffs' motion and argue Commerce's determinations are fully supported by substantial evidence and are not contrary to law. BACKGROUND A. The Rate of Return Shortfall Method From 1982 to 1993 Commerce used the rate of return shortfall (RORS) methodology to measure the countervailable benefit received by an unequityworthy company that received an equity infusion.[61] Commerce employed RORS in those instances where a company under investigation did not have a market benchmark; that is, a publicly-traded price by which to measure the value of the company's stock at the time of the government infusion. General Issues Appendix, 58 Fed.Reg. at 37,239. Under the RORS methodology, Commerce measures the benefit of equity investments in "unequityworthy" firms by comparing the national average rate of return on equity with the company's rate of return on equity during each year of the allocation period. The difference in these amounts, the so-called rate of return shortfall ... is then multiplied by the amount of the equity investment to determine the countervailable benefit in the given year. Certain Steel Products from France, 57 Fed. Reg. 57,785, 57,787 (Dep't Comm.1992) (preliminary determ.) (French Preliminary Determination); see also 54 Fed.Reg. 23,366, 23,385 (Dep't Comm.1989) (to be codified at 19 C.F.R. § 355.49(e)(1)) (proposed May 31, 1989) (Proposed Regulations) (setting forth the RORS methodology). B. The Grant Methodology In the preliminary determinations of the final determinations under review, Commerce abandoned RORS and adopted the grant approach or grant methodology believing it to be "the most appropriate methodology to use in measuring the benefit from equity infusions made or provided on terms inconsistent with commercial considerations." General Issues Appendix, 58 Fed.Reg. at 37,239. Under the grant methodology, Commerce "treats equity infusions into unequityworthy companies as grants." Id. at 37,241.[62] In applying the grant methodology, the first step is for Commerce to determine if the company receiving the infusion is equityworthy. If the company is equityworthy, Commerce does not consider the equity infusion countervailable. If the company is unequityworthy, however, Commerce declares the equity infusion a countervailable subsidy. In the second step of the grant methodology, Commerce calculates the benefit using a declining balance method and allocates equal portions of the equity infusion to the unequityworthy companies over a 15-year period. The methodology employs a discount rate to add to the amount the interest accrued in each year on the unallocated balance remaining from the previous year. Commerce summarized both the rationale and implementation of the grant methodology: The key aspect of this approach is the Department's interpretation of its equityworthiness determination. Using the grant methodology for equity infusions into unequityworthy companies is based on the premise that an unequityworthiness finding by the Department is tantamount to saying that the company could not have attracted investment capital from a reasonable 1301 investor in the infusion year based on the available information. Thus, neither the benefit nor the equityworthiness determination should be reexamined post hoc since such information could not have been known to the investor at the time of the investment. Therefore, the grant methodology, when used for equity infusions into unequityworthy companies and for grants to all companies, should not be adjusted based on subsequent events (e.g., dividends, profits). Id. at 37,239. C. Equity Infusions in Brazil, France, and Korea Commerce determined that the government of Brazil (GOB) made equity infusions into USIMINAS, Companhia Siderurgica Paulista (COSIPA), and CSN in the following years: USIMINAS, 1980 through 1988; COSIPA, 1977 through 1989 and 1991; and CSN, 1977 through 1991. Brazilian Final Determination, 58 Fed.Reg. at 37,298. Commerce then examined the three companies in the relevant years and determined that "the GOB's equity infusions into USIMINAS between 1980-1988, into CSN between 1977-1991, and into COSIPA from 1977-1989 and in 1991, were made on terms inconsistent with commercial considerations, and thus countervailable." Id. The Government of France's (GOF) equity infusions relevant in this proceeding flow from a 1978 restructuring plan. One facet of the plan allowed bonds previously issued on behalf of the steel companies to be converted into prêts à caractéristiques spéciales (PACS) or "loans with special characteristics." French Preliminary Determination, 57 Fed.Reg. at 57,788; French Final Determination, 58 Fed.Reg. 37,306-07. The conversion process enabled the companies to trade in their former obligations on loans and bonds for new obligations based on the PACS. French Final Determination, 58 Fed.Reg. at 37,306-07. Between 1978 and 1991, Usinor Sacilor and its predecessors used PACS to refinance debt on several occasions: "In 1978, Usinor and Sacilor converted 21.1 billion French francs (FF) of debt into PACS. From 1980 to 1981, Usinor and Sacilor issued FF8.1 billion of new PACS." Id. at 37,307. The companies later converted "PACS in the amount of FF13.8 billion, FF12.6 billion and FF2.8 billion ... into common stock in 1981, 1986 and 1991, respectively." Id. Commerce determined PACS were debt and not equity when issued, but that Usinor Sacilor received benefits when the PACS were eventually converted to common stock. Id. Commerce's treatment of the PACS conversions turned on Usinor Sacilor's equityworthiness at the time of the conversions. The agency determined Usinor Sacilor to be unequityworthy from 1978 through 1988 and therefore "consider[ed] the conversion of PACS to common stock in 1981 and 1986 to constitute equity infusions on terms inconsistent with commercial considerations." Id. Because Usinor Sacilor was equityworthy in 1991, however, Commerce determined "the PACS-to-equity conversion in 1991 ... [was] consistent with commercial considerations." Id. The second facet of the GOF's debt restructuring plan relevant here is the "Fonds d'Intervention Siderurgique" or Steel Intervention Fund (FIS) created by the government in 1983. The FIS worked in tandem with the 1981 Corrected Finance Law which authorized Usinor and Sacilor to issue convertible bonds. French Preliminary Determination, 57 Fed.Reg. at 57,788. The companies "issued convertible bonds to the FIS, which, in turn, with the GOF's guarantee, floated bonds to the public and to institutional investors." French Final Determination, 58 Fed.Reg. at 37,307. "In 1983, 1984, and 1985, Usinor and Sacilor issued convertible bonds to the FIS. These FIS bonds were converted to common stock in 1986 and 1988." Id. Commerce's treatment of Usinor Sacilor's conversions of the FIS instruments paralleled the agency's treatment of the company's PACS conversions. Thus, because Commerce found Usinor Sacilor unequityworthy in 1986 and 1988, Commerce "consider[ed] the conversion of FIS bonds to common stock in 1986 and 1988 to constitute equity infusions on terms inconsistent with commercial considerations." Id. 1302 In the Korean Final Determination, Commerce determined in 1978 and 1980 the Government of Korea (GOK), through the Ministry of Finance and the Korea Development Bank, provided equity infusions to POSCO on terms inconsistent with commercial considerations. Korean Final Determination, 58 Fed.Reg. at 37,339. In a 1984 determination, Commerce determined POSCO was unequityworthy during 1978 and 1980. Id. (citing Cold-Rolled Carbon Steel Flat Products from Korea, 49 Fed.Reg. 47,284, 47,286 (Dep't Comm.1984) (final determ.)). Commerce stated in the Korean Final Determination that neither POSCO nor the GOK contested Commerce's previous unequityworthiness determination and that Commerce found "no new information to repudiate this determination." Id. Thus, because the 1978 and 1980 equity infusions from the GOK were made to POSCO when POSCO was unequityworthy, Commerce determined the infusions bestowed countervailable benefits on POSCO. Id. ISSUES PRESENTED Whether Commerce's decision to abandon the rate of return shortfall methodology and whether its decision to adopt a grant methodology and its implementation of that grant methodology to measure the value of benefits of equity infusions into companies deemed to be unequityworthy is supported by substantial evidence on the record and is otherwise in accordance with law. It is critical to be clear what is not being challenged here. The parties apparently agree the equityworthiness test is not under review in this proceeding.[63] That is, the question of whether Commerce properly determined that a company was unequityworthy during the period of investigation when equity infusions were made is not challenged here and consequently will not be reviewed. CONTENTIONS OF THE PARTIES A. Plaintiffs Plaintiffs contend there are several infirmities in Commerce's adoption of the grant methodology to value the benefits of equity infusions into unequityworthy companies and the agency's concomitant decision to abandon the RORS methodology. Plaintiffs assert the grant methodology employed by Commerce "fails to measure the actual benefits associated with a government investments [sic] during the period of investigation" and "relies on a series of unstated assumptions that are unreasonable and otherwise unsupported by substantial evidence in the record." (Id. at 3-4; see also id. at 25-33, 43-46). In addition, plaintiffs claim Commerce's "decision to abandon [RORS] was based on perceived problems with the RORS methodology that do not withstand scrutiny. Specifically, none of the six concerns identified by [Commerce] warrants a rejection of the RORS methodology." (Id. at 7 (footnote omitted); see also id. at 47-54; Pls.' Reply Br. at 41-55). Plaintiffs contend Commerce failed in its grant methodology to "properly identify the 1303 nature of the benefit that an equity infusion may or may not bestow." (Pls.' Br. at 25). It is critical to identify the nature of the benefit, plaintiffs argue, because only then can Commerce "properly estimate[] the value of the particular subsidy" as required by law. (Id. at 24; see also id. at 21 n. 38 (citing 19 U.S.C. §§ 1671(a), 1671d(a); 19 C.F.R. § 355.20)). By equating an equity infusion into an unequityworthy company with a grant, plaintiffs maintain, Commerce ignores the simple fact that, unlike receiving a grant, there is a cost to the firm issuing equity. As explained by plaintiffs: [F]rom the standpoint of the company, one of the costs of selling equity to an investor is the obligation to operate its firm in such a way to generate a short- or long-term return ... on the equity investment.... In addition, in exchange for equity, the company conveys a claim on its assets to the investor. In connection with this claim, the company has a continuing obligation to preserve and or enhance the value of the investor's claim on the assets. (Id. at 27). Thus, plaintiffs argue the financial benefit of an equity infusion can be calculated only by determining whether the recipient enjoys any relief from the financial costs or obligations flowing from receipt of an equity infusion, that is, the obligation to generate a return on the investor's equity infusion and the obligation to enhance the value of the investor's claim on the assets. By failing to examine whether the recipient is relieved of these obligations, plaintiffs argue, the grant methodology "necessarily overstates the benefits of an infusion except in the rare instance in which the investor does not receive any return on its investment, and in fact loses the full value of the investment." (Id. at 5). Plaintiffs construe Commerce's grant methodology as erecting an "irrebuttable presumption that an equity investment into an unequityworthy company never has a cost." (Id. at 30 (emphasis omitted)). This presumption prevents Commerce "from detecting and measuring the actual costs [of an equity purchase] during the POI" thereby rendering Commerce's grant methodology "an unreasonable technique of valuing the benefit from an alleged subsidy." (Id. at 33). In addition, plaintiffs assert the grant methodology is flawed because it precludes an examination of post-infusion events thereby presuming "there is no conceivable manner in which the government and company could cure or diminish the value of the benefit bestowed by the original subsidy event." (Id. at 34 (footnote omitted)). Coupled with its argument that the grant methodology employed by Commerce is unreasonable, plaintiffs assert the RORS methodology should be reinstated because it is a "reasonable methodology that has enabled [Commerce] to correctly value the benefits of equity infusions since 1982." (Id. at 46). Plaintiffs advance their support of RORS stating, [T]he RORS methodology permits [Commerce] to distinguish between the benefits associated with a grant, and the continuing obligations that attach to an equity investment. Specifically, RORS enables [Commerce] to quantify the cost of that obligation during the POI, and compare that cost to a national average, to determine if the company benefitted in any way during the POI. (Id. at 47). Furthermore, plaintiffs challenge Commerce's criticism of the RORS methodology as unjustified and not supported by the record. (Id. at 47-54; Pls.' Reply at 41-55). In effect, plaintiffs argue Commerce has failed to provide an adequate explanation of its departure from RORS and therefore the agency has abrogated its responsibility to "`either conform itself to its prior decisions, or explain the reasons for its departure.'" (Pls.' Br. at 47-48 (quoting Hussey Copper, Ltd. v. United States, 17 CIT ___, ___, 834 F. Supp. 413, 418-19 (1993) (internal citation omitted))). Plaintiffs contend each of Commerce's criticisms of RORS are unexplained, unnecessary, or unclear. (Id. at 48-53). Because Commerce did not adequately explain its reason for abandoning RORS, plaintiff argues Commerce acted contrary to law. Plaintiffs conclude by asserting that even if Commerce's grant methodology is sustained, it must be revised to account for the offsetting costs of certain post-infusion events including 1304 "the return of capital to the government through a privatization, the issuance of dividends, and the retention of retained earnings." (Id. at 54). As construed by plaintiffs, one effect of privatization is that it "eliminate[s] any financial benefit to the company associated with the government's claim on that equity." (Id. at 55). The grant methodology must therefore be revised to "accommodate this elimination of the alleged benefit through privatization." (Id.). Similarly, because plaintiffs argue dividend payments "reduce or eliminate the benefit from the government's equity infusions," the grant methodology should be adjusted to count these "dividend payments as payments against the remaining countervailable balance from the equity infusions." (Id. at 55, 62). Finally, plaintiffs contend retained earnings should be treated similarly and "be netted against any gross benefit calculated using [Commerce's] grant methodology." (Id. at 64). B. Defendant Commerce argues it has statutory authority to levy countervailing duties against merchandise exported to the United States from a country whose government has bestowed a subsidy in the form of the "`provision of capital ... on terms inconsistent with commercial considerations." (Def.'s Br. at 6-7 (quoting 19 U.S.C. § 1677(5)(A)(ii)(I) (1988))). Commerce asserts an equity infusion into an unequityworthy company provides capital on terms inconsistent with commercial considerations and therefore such an infusion is countervailable. Because the statute is silent on the manner in which Commerce is to calculate the benefit from equity infusions, Commerce contends it properly exercised its discretion by adopting a grant measurement of equity infusions into unequityworthy companies. In the determinations under review, Commerce rejected the RORS methodology because it found the methodology deficient and unable to accurately measure the benefit of equity investments in unequityworthy firms. (Id. at 9-11). The crux of Commerce's rationale for rejecting the RORS methodology is that an equity investment in an unequityworthy company is tantamount to a grant and should be valued as a grant. (Id. at 18). As explained by the agency, [A]n unequityworthiness finding by Commerce means that the firm could not have attracted capital from a reasonable investor at that time, based on the information then available. "If a company cannot attract capital, then equity for all purposes is a grant." The most appropriate method to measure the benefit to the recipient firm which it derives from the equity infusion is the grant approach, because it corresponds with the meaning of unequityworthiness i.e., a reasonable private investor could not expect a reasonable rate of return at the time of the government's equity infusion. (Id. (quoting Memorandum from The Equity Issues Team to Joseph A. Spetrini, Acting Assistant Secretary for Import Administration and Barbara R. Stafford, Deputy Assistant Secretary for Investigations, Options for Calculating the Benefit from Equity Infusions into Unequityworthy Companies 8 (stamped May 18, 1993) (ITA Equity Infusions Memo), reprinted in Def.'s App. Tab 2 and citing General Issues Appendix, 58 Fed. Reg. at 37,241)). Commerce shifted from RORS to the grant methodology because it identified at least six flaws in RORS. General Issues Appendix, at 37,240-41. Commerce found these were not "minor flaws," but rather were fundamental to the RORS methodology and could not be "rectified without abandoning the RORS methodology outright." Id. at 37,241. The identification of these flaws in the RORS method as well as other factors[64] led Commerce 1305 to adopt the grant methodology in these determinations. (Def.'s Br. at 33-42). Finally, Commerce rejects plaintiffs' arguments that the grant methodology, if sustained by the Court, should be revised to account for post-infusion events. (Id. at 42-47). As stated by Commerce, the focus should not be on events subsequent to the original equity infusion, but rather "Commerce must focus upon the benefit to the recipient at the time the subsidy is conferred." (Id. at 43). C. Defendant-Intervenors Defendant-Intervenors assert plaintiffs have failed to carry their burden of showing Commerce's grant methodology to be unsupported by substantial evidence or otherwise not in accordance with law. (Def.-Intervenors' Br. at 10). Defendant-Intervenors contend plaintiffs raise "irrelevant matters" including a defense of the RORS methodology as preferable to the grant methodology. (Id.). The question of which method is "more reasonable" is not before the Court, defendant-intervenors argue, and furthermore is not dispositive as to the validity of the grant methodology. (Id. at 11 (citing Wheatland Tube Corp. v. United States, 17 CIT ___, ___, 841 F. Supp. 1222, 1234 (1993); Matsushita Elec. Indus. Co. v. United States, 3 Fed.Cir. (T) 44, 54-55, 750 F.2d 927, 936 (1984); and Vitro Flex, S.A. v. United States, 13 CIT 430, 447, 714 F. Supp. 1229, 1242-43 (1989)); see also id. at 24-25). To sustain Commerce's grant methodology, defendant-intervenors contend, the Court need only find the methodology "reflects a `permissible' interpretation of the statutory phrases, `inconsistent with commercial considerations' and `net subsidy.'" (Id. at 11-12 (citing 19 U.S.C. §§ 1677(5)(A)(ii)(I), 1671, 1677(6) (1988))). Defendant-Intervenors argue the proper measurement of a subsidy benefit is the benefit to the recipient; if there is no difference between a grant and an equity infusion into an unequityworthy company, "it is reasonable to use the same measurement methodology for both." (Id. at 14 (footnote omitted)). Defendant-Intervenors suggest there is no material difference, from the perspective of an unequityworthy company, between receiving an equity infusion or a grant. (Id. at 14, 32-40). In both instances, the company receives infusions from the government that otherwise would be unavailable from private investors. (Id. at 14-15).[65] Furthermore, according to defendant-intervenors, "the company incurs no new obligations as a result of that [equity] infusion, but rather continues to owe all of its (enhanced) earnings to its owners ... exactly as it would in the case of a grant of equal magnitude." (Id. at 15; see id. at 15-18, 33-37). Defendant-Intervenors contend Commerce has "adequately explained its methodological choice" and therefore the grant methodology is "due all of the deference of any agency adopted methodology." (Id. at 19). Defendant-Intervenors claim the grant approach was fully litigated when Commerce first adopted the grant methodology and abandoned RORS in a previous final determination. (Id. at 22 (quoting Certain Hot Rolled Lead and Bismuth Carbon Steel Products from the United Kingdom, 58 Fed.Reg. 6237, 6241 (Dep't Comm.1993) (final determ.) (Hot Rolled Lead from U.K.))). Notwithstanding Hot Rolled Lead from U.K., defendant-intervenors argue the lengthy procedural steps taken by Commerce in applying the grant methodology to the determinations under review coupled with Commerce's comprehensive discussion and analysis in the General Issues Appendix, "more than satisfies the `reasonable clarity' standard of SCM Corp. 1306 and the `reasoned justification' standard of Rust." (Id. at 24 (quoting SCM Corp. v. United States, 84 Ct. Cust. 227, 232, 487 F. Supp. 96, 100 (1980) (internal quotations omitted); Rust v. Sullivan, 500 U.S. 173, 187, 111 S. Ct. 1759, 1769, 114 L. Ed. 2d 233 (1991))). Defendant-Intervenors further reject plaintiffs' arguments that equity investments impose certain costs on the recipient that should be netted from the subsidy benefit. Plaintiffs' contention that dividends and retained earnings should be treated as subsidy offsets, defendant-intervenors argue, is prohibited by 19 U.S.C. § 1677(6) (1988), which contains an exclusive list of permitted subsidy offsets. Defendant-Intervenors maintain Commerce correctly determined the benefit from an equity subsidy is the "full amount of the equity provided, and that `no earnings of the company in subsequent years should be used to offset the benefit.'" (Id. at 30-31 (quoting Certain Steel Products from Austria, 57 Fed.Reg. 57,781, 57,783 (Dep't Comm.1992) (prelim. determ. and alignment of final determs.) and citing General Issues Appendix, 58 Fed.Reg. at 37,239)). To hold otherwise, defendant-intervenors suggest, would "run afoul of the prohibition on post hoc analysis" of a subsidy's effects as established by statute, legislative history, agency practice, and decisional law. (Id. at 31 (citing S.Rep. No. 189, 103d Cong., 1st Sess., 42-43 (1993); Saarstahl, A.G. v. United States, 18 CIT ___, ___, 858 F. Supp. 187, 193 (1994); British Steel Corp. v. United States, 9 CIT 85, 95-96, 605 F. Supp. 286, 294-95 (1985))). Finally, defendant-intervenors agree with Commerce that the RORS methodology is hopelessly flawed and reject plaintiffs' arguments for an alternative methodology as legally irrelevant. (Id. at 43-49; see also id. at 10-12). DISCUSSION The Court's review of Commerce's grant methodology can be separated into two inter-connected inquiries. First, did Commerce err in its abandonment of the RORS methodology. See Hussey Copper, Ltd. v. United States, 17 CIT ___, ___, 834 F. Supp. 413, 418 (1993) ("It is `a general rule that an agency must either conform itself to its prior decisions or explain ... its departure.'") (quoting Citrosuco Paulista, S.A. v. United States, 12 CIT 1196, 1209, 704 F. Supp. 1075, 1088 (1988)). Second, is the application and implementation of the new grant methodology to countervail equity infusions made into unequityworthy companies based upon substantial evidence on the record and otherwise in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B) (1988). The Court holds Commerce adequately examined and explained its departure from the RORS methodology and the Court holds further the application by Commerce of its grant methodology to countervail equity infusions made into unequityworthy companies is sustained as based upon substantial evidence on the record and as otherwise in accordance with law. A. Commerce's Abandonment of the RORS Methodology The posture of a court reviewing a change in agency practice is aptly summarized in Mantex, Inc. v. United States, 17 CIT ___, 841 F. Supp. 1290 (1993), where the Court stated, The mere fact that an agency reverses a policy, or a statutory or regulatory interpretation does not indicate the agency's decision is unreasonable, arbitrary, or capricious. It is well-settled that such reversals are entitled to deference from the courts. Mantex, 17 CIT at ___, 841 F.Supp. at 1302-03 (citing Rust v. Sullivan, 500 U.S. 173, 186, 111 S. Ct. 1759, 1768-69, 114 L. Ed. 2d 233 (1991) (citation omitted)). As explained by the United States Supreme Court in Rust, [A] revised interpretation deserves deference because an initial agency interpretation is not instantly carved in stone and the agency, to engage in informed rule-making, must consider varying interpretations and the wisdom of its policy on a continuing basis.... An agency is not required to establish rules of conduct to last forever ... but rather must be given ample latitude to adapt its rules and policies 1307 to the demands of changing circumstances. Rust, 500 U.S. at 186-87, 111 S. Ct. at 1769 (citations and internal quotations omitted). The agency's ability to deviate from prior practice is tempered, however, by the requirement that "`the ground[s] for the departure from prior norms ... must be clearly set forth so that the reviewing court may understand the basis of the agency's action and so may judge the consistency of that action with the agency's mandate.'" Hussey Copper, 17 CIT at ___, 834 F.Supp. at 419 (quoting Atchison, Topeka & Santa Fe Ry. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 808, 93 S. Ct. 2367, 2375, 37 L. Ed. 2d 350 (1973)). As directed by the Supreme Court, an agency must adequately explain its departure from prior norms and sufficiently spell out the legal basis for its decision. Secretary of Agric. v. United States, 347 U.S. 645, 653-54, 74 S. Ct. 826, 832, 98 L. Ed. 1015 (1954) (stating agency must explain its decision "with the simplicity and clearness through which a halting impression ripens into reasonable certitude") (citations omitted). The Court finds Commerce sufficiently explained on the record its abandonment of the RORS methodology to value the benefits of equity infusions made into unequityworthy companies. In the General Issues Appendix and in its papers before the Court, Commerce explained the factors it considered in reaching the conclusion that the RORS methodology does not effectively measure the value of subsidy benefits. See General Issues Appendix, 58 Fed.Reg. at 37,240-41; Def.'s Br. at 33-42. Commerce summarized the short-comings of the RORS methodology: First, when measuring the rate of return in the period of investigation (POI), [Commerce] does not account for the effect of current subsidies on the company's return. These subsidies could affect the rate of return, thereby distorting the RORS analysis.... Second, the RORS method only measures the rate of return in the POI, thereby allowing poorly-performing companies which by chance experience a profitable year in the POI to escape countervailability.... Third, RORS does not measure the rate of return on each of the government's equity infusions but rather the rate of return in the POI on the firm's total equity. If the equity is near zero, a very small profit will result in a negative countervailability finding. Fourth, [RORS] does not adequately account for the expectation held by a potential investor (at the time of the infusion) of the company's rate of return on equity. Fifth, RORS is biased because it is only applied when [Commerce] finds a company unequityworthy. Finally, and perhaps most importantly, RORS implies a "cost to government" standard rather than a "benefit to recipient" standard. General Issues Appendix, 58 Fed.Reg. at 37,240-41. It is not for the Court to fault Commerce's decision if the agency's rationale may not be the most reasonable. Commerce provided a detailed explanation of its decision to abandon the RORS methodology and to adopt the grant methodology in internal memoranda made part of the record. See id. at 37,239.[66] In light of the deference granted to agency changes in practice, the Court holds Commerce has provided a reasoned analysis explaining its departure from RORS. See Rust, 500 U.S. at 187, 111 S. Ct. at 1769; Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S. Ct. 1018, 1026-27, 16 L. Ed. 2d 131 (1966). B. Commerce's Adoption of the Grant Methodology The scope of judicial review of agency methods and practices was outlined by the Court in Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 636 F. Supp. 961 (1986), aff'd, 5 Fed.Cir. (T) 77, 810 F.2d 1137 (1987), where the Court held: The deference granted or extended to the agency's interpretation of its statutory mandate also applies to the methodology that the agency employs in fulfilling its lawfully delegated mission.... In order for [Commerce] effectively to administer 1308 the countervailing duty laws, it is necessary to permit some methodological flexibility. As long as the agency's methodology and procedures are reasonable means of effectuating the statutory purpose, and there is substantial evidence in the record supporting the agency's conclusions, the court will not impose its own views as to the sufficiency of the agency's investigation or question the agency's methodology. Ceramica Regiomontana, 10 CIT at 404-05, 636 F. Supp. at 966 (citations omitted); see also GMN Georg Muller Nurnberg AG v. United States, 17 CIT ___, ___, Slip Op. 93-54 at 5, 1993 WL 129804 at 2 (Apr. 20, 1993) ("It is well-established that Commerce is granted flexibility in selecting the appropriate methodology.") (citing ICC Indus., Inc. v. United States, 5 Fed.Cir. (T) 78, 84-85, 812 F.2d 694, 699 (1987) and Consumer Prods. Div., SCM Corp. v. Silver Reed America, Inc., 3 Fed.Cir. (T) 83, 90, 753 F.2d 1033, 1039 (1985)). It is not the role nor function of the reviewing court to determine which agency practice is most reasonable or most accurate. See Wheatland Tube Corp. v. United States, 17 CIT ___, ____, 841 F. Supp. 1222, 1234 (1993) ("Commerce has broad discretion to choose a methodology to satisfy the statutory mandate."); Hercules, Inc. v. United States, 11 CIT 710, 726, 673 F. Supp. 454, 469 (1987) ("[T]his Court may not substitute its judgment for that of Commerce when the choice is between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.") (quoting Penntech Papers, Inc. v. NLRB, 706 F.2d 18, 22-23 (1st Cir.), cert. denied, 464 U.S. 892, 104 S. Ct. 237, 78 L. Ed. 2d 228 (1983) (further citation omitted)) (internal quotations omitted). Rather, the role of this Court is to examine the agency determination to determine if it is based on substantial evidence on the record and is otherwise in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B) (1988). To determine if the "agency's methodology and procedures are reasonable means of effectuating the statutory purpose," the starting point is an examination of the countervailing duty statute. See Ceramica Regiomontana, S.A., 10 CIT at 404-05, 636 F. Supp. at 966. The reasonableness of the grant methodology turns on the definition of the term subsidy and whether an equity infusion into an unequityworthy company can be countervailed in the same manner as an outright grant to the company. The countervailing duty statute includes a definitional section, which provides in relevant part: (5) Subsidy (A) In general .... (ii) .... (I) The provision of capital, loans, or loan guarantees on terms inconsistent with commercial considerations. 19 U.S.C. § 1677(5)(A)(ii)(I) (1988) (emphasis added). The thrust of Commerce's grant methodology is to treat equity infusions into unequityworthy companies as "inconsistent with commercial considerations" because no reasonable investor expecting a reasonable rate of return would have invested in an unequityworthy company. See General Issues Appendix, 58 Fed.Reg. at 37,239; Def.'s Br. at 18. Such equity infusions are therefore countervailable under Commerce's grant methodology. As explained by Commerce, The key aspect of [the grant methodology] is the Department's interpretation of its equityworthiness determination. Using the grant methodology for equity infusions into unequityworthy companies is based on the premise that an unequityworthiness finding by the Department is tantamount to saying that the company could not have attracted investment capital from a reasonable investor in the infusion year based on the available information. General Issues Appendix, 58 Fed.Reg. at 37,239. In applying the grant methodology to equity infusions made into unequityworthy companies, Commerce properly focuses on the benefit to the recipient of the equity infusions and not on the cost to the donor making the equity infusion. See British Steel Corp. v. United States, 9 CIT 85, 97, 605 F. Supp. 286, 295 (1985) ("Fundamentally, the value of a subsidy must be measured in accordance 1309 with its benefit to the recipient...."); S.Rep. No. 249, 96th Cong., 1st Sess. 85-86 (1979), reprinted in 1979 U.S.S.C.A.N. 381, 381, 471-72 (requiring, in the context of nonrecurring subsidy grants, "a reasonable period" over which to allocate the value of subsidies "based on commercial and competitive benefit to the recipient") (emphasis added). When the benefit to the recipient is the focus, it is clear from the perspective of the unequityworthy company, there is little difference between receiving an equity infusion and receiving a grant. Plaintiffs stridently argue there is a difference between equity infusions and grants to an unequityworthy company and that Commerce has failed to properly distinguish between the two in its grant methodology. The Court is unpersuaded by plaintiffs' arguments. In particular, the Court is unconvinced by the argument that equity infusions impose costs on recipient firms, costs that differentiate equity infusions into unequityworthy companies from grants. For purposes of valuing the benefit to the recipient, Commerce's methodology of equating the benefit received by an unequityworthy company from an equity infusion with the benefit conferred by receipt of an outright grant is a "permissible construction of the statute." See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S. Ct. 2778, 2782, 81 L. Ed. 2d 694 (1984) (standing for the principle that in the absence of statutory language to the contrary, a reasonable agency interpretation will be upheld). Commerce's methodology provides a reasonable method of allocating the value of subsidy benefits from the bestowal of equity infusions into unequityworthy companies. For all of the foregoing reasons, the Court concludes Commerce's application and implementation of its grant methodology to countervail benefits arising from the infusion of equity into unequityworthy companies is supported by substantial evidence on the record and is otherwise in accordance with law. Furthermore, the Court rejects plaintiffs' argument that Commerce's grant methodology must be revised to account for the offsetting costs of certain post-infusion events including privatization, the payment of dividends, and the retention of retained earnings. In valuing the benefits of subsidies, Commerce's determination that its grant methodology need not consider events subsequent to the original equity infusion is reasonable. Moreover, the statute provides an exclusive list of offsets that may be deducted from the amount of a gross subsidy to yield the net subsidy and an offset for the payments of dividends is not included in the statute. See 19 U.S.C. § 1677(6) (1988). The Court therefore rejects plaintiffs' arguments to revise the grant methodology. The Court sustains the methodology as applied and implemented by Commerce in the determinations under review. CONCLUSION The Court holds Commerce's abandonment of the rate of return shortfall (RORS) methodology as set forth in the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,239-44 (Dep't Comm.1993) (final determ.) and applied in the final countervailing duty determinations in Certain Steel Products from Korea, 58 Fed.Reg. 37,338 (Dep't Comm.1993) (final determ.), Certain Steel Products from Brazil, 58 Fed.Reg. 37,295 (Dep't Comm.1993) (final determ.), and Certain Steel Products from France, 58 Fed. Reg. 37,304 (Dep't Comm.1993) (final determ.) was reasonable and is sustained as based upon substantial evidence on the record and as otherwise in accordance with law. The Court holds the grant methodology employed by Commerce to countervail equity infusions into unequityworthy companies as set forth in the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,239-44 (Dep't Comm.1993) (final determ.) and applied in the final countervailing duty determinations in Certain Steel Products from Korea, 58 Fed.Reg. 37,338 (Dep't Comm.1993) (final determ.), Certain Steel Products from Brazil, 58 Fed.Reg. 37,295 (Dep't Comm. 1993) (final determ.), and Certain Steel Products from France, 58 Fed.Reg. 37,304 (Dep't Comm.1993) (final determ.) is reasonable and is sustained as based upon substantial evidence 1310 on the record and as otherwise in accordance with law. SECTION FOUR: SALES DENOMINATOR Usinor Sacilor, Sollac, GTS, and British Steel plc (collectively "plaintiffs") jointly move for partial judgment on the agency record pursuant to U.S. CIT R. 56.2 and for an order declaring that aspect of the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,231-36 (Dep't Comm.1993) (final determ.) (General Issues Appendix)[67] pertaining to the appropriate sales denominator employed by the Department of Commerce (Commerce) as set forth in the General Issues Appendix and applied in the final countervailing duty determinations in Certain Steel Products from France, 58 Fed.Reg. 37,304 (Dep't Comm.1993) (final determ.) (French Final Determination)[68] and Certain Steel Products from the United Kingdom, 58 Fed. Reg. 37,393 (Dep't Comm.1993) (final determ.) (British Final Determination)[69] to be unsupported by substantial evidence on the record and not otherwise in accordance with law. Defendant opposes plaintiffs' motion asserting Commerce's determinations are based upon substantial evidence on the administrative record and are otherwise in accordance with law. AK Steel Corporation, Bethlehem Steel Corporation, Geneva Steel, Gulf States Steel Incorporated of Alabama, Inland Steel Industries, Incorporated, Laclede Steel Company, LTV Steel Company, Incorporated, Lukens Steel Company, National Steel Corporation, Sharon Steel Corporation, U.S. Steel Group a unit of USX Corporation, and WCI Steel, Incorporated (collectively "defendant-intervenors") oppose plaintiffs' motion arguing Commerce's determinations are fully supported by substantial evidence and are not contrary to law. Defendant-Intervenors move for an order to strike an affidavit contained in the appendix to plaintiffs' reply brief along with certain other documents in the reply brief making reference to or discussing non-record evidence. In addition, defendant-intervenors move for an order to strike plaintiffs' supplemental memorandum and allege the memorandum violates the Court's scheduling order, or in the alternative, defendant-intervenors move for leave to file an expanded supplemental memorandum. BACKGROUND In general terms, the computation of a net subsidy requires Commerce to divide the benefits attributable to subsidies received by a company by the sales of the company's products. See 54 Fed.Reg. 23,366, 23,383-84 (Dep't Comm.1989) (to be codified at 19 C.F.R. § 355.47) (proposed May 31, 1989) (Proposed Regulations). After identifying subsidies, Commerce divides the net countervailable benefit allocable to the period of investigation (POI) the numerator by the company's sales of benefitting merchandise during the POI the denominator. The result is the per-unit subsidy rate expressed as an ad valorem rate: Total Subsidy Allocable to POI - Offsets Ad Valorem Rate of ____________________________________ = Countervailable Benefit Firm's Sales of Benefiting During POI Merchandise During POI The factual determination of the appropriate denominator to be used in the equation is at the heart of the sales denominator issue. If the subsidy at issue is deemed tied to domestic production, Commerce allocates the benefit of the subsidy fully to the sales of domestically produced merchandise and uses domestic sales as the denominator. General Issues Appendix, 58 Fed.Reg. at 37,231. If the subsidy is deemed untied, however, Commerce allocates the benefit of the subsidy to total worldwide sales and uses worldwide sales as the denominator. Id. 1311 In making the factual determination of whether a particular subsidy at issue is tied to domestic production, Commerce begins with the approach it employed in Certain Hot Rolled Lead and Bismuth Carbon Steel Products from France, 58 Fed.Reg. 6221 (Dep't Comm.1993) (final determ.) (France Bismuth). Under this approach, the "focus is on resolving the factual question of whether the subsidies at issue are tied to the recipient firm's production of merchandise domestically in the country under investigation or, alternatively, untied." (Def.'s Br. at 4). France Bismuth marked the first time Commerce decided the appropriate sales denominator when a respondent's total sales included not only sales of domestically produced merchandise, but also sales of merchandise produced in one or more other countries. General Issues Appendix, 58 Fed.Reg. at 37,231. In the French Final Determination and the British Final Determination, Commerce modified the sales denominator analysis it employed in France Bismuth by erecting a rebuttable presumption to be employed when deciding the factual question of tying. As explained by Commerce, [U]nder [Commerce's] refined "tied" analysis, [Commerce] will begin by presuming that a subsidy provided by the government of the country under investigation is tied to domestic production. However, this presumption is not irrebuttable. A party may rebut this presumption by presenting evidence tending to show that the subsidy was not tied to domestic production. Id. To rebut the presumption that subsidies are tied to domestic production, Commerce declared, Relevant evidence may include the nature of the program at issue, whether the subsidy was bestowed specifically to provide other than a domestic benefit, communications between the government and the respondent relating to the subsidy provided pursuant to the program at issue, the government's ownership interest, if any, in the respondent, and any other evidence addressing the likely beneficiaries of the subsidy.... [T]he above list of evidentiary criteria is not exhaustive, nor can any one or several of these factors necessarily give decisive guidance in all cases. Id. Commerce makes its tied determination "based upon record evidence showing the likely effects of the subsidies, i.e., the likely uses or beneficiaries determined as of the time the subsidies were bestowed by the subsidizing government." (Def's Br. at 4). Commerce does not consider evidence of subsequent events demonstrating the actual effects of the subsidies. France Bismuth, 58 Fed.Reg. at 6230-31. ISSUE PRESENTED Whether Commerce's determination of the appropriate sales denominator to be used in subsidy calculations when a respondent's total sales include not only sales of domestically produced merchandise, but also sales of merchandise produced in one or more foreign countries is supported by substantial evidence on the record and is otherwise in accordance with law. CONTENTIONS OF THE PARTIES A. Plaintiffs Plaintiffs argue Commerce's new presumption-based methodology to calculate the sales denominator is unsupported by substantial evidence and is contrary to law and therefore should be reversed. Specifically, plaintiffs contend Commerce departed from its practice of treating equity and other capital infusions as untied benefits and allocating them over total sales. (Pls.' Br. at 4, 19-24). The foundation for this practice is the inherent fungibility of money, which plaintiffs argue is reflected in Commerce's Proposed Regulations. Plaintiffs maintain Commerce erred by departing from its established fungibility principle and creating a new exception for multinational companies. (Id. at 4-5, 29-31). Plaintiffs further argue Commerce's adoption of its refined tying analysis constitutes a departure from longstanding agency practice and requires a reasoned analysis that Commerce failed to provide. (Id. at 24-26). Plaintiffs contend "[t]here is no rational basis for distinguishing between foreign and domestic production when allocating otherwise 1312 untied subsidies," and even if one exists, plaintiffs believe Commerce has failed to set it forth on the record. (Id. at 28). In challenging the new tying presumption, plaintiffs assert the presumption is not supported by substantial evidence and is contrary to law because it has no foundation in logic, fact, or economic reality. Alleging the presumption relies on the presumed intent of a foreign government and produces results contrary to the remedial purpose of the countervailing duty law, plaintiffs maintain the sole basis for the presumption is Commerce's generalized and undefined "administrative experience." (Id. at 5-6; see id. at 32-41). Plaintiffs also contest Commerce's claim that the presumption is rebuttable and argue the presumption is virtually irrebuttable, (id. at 43-51), because the types of rebuttal evidence cited by Commerce that could refute the presumption exclude "the most probative evidence that a subsidy is not tied i.e., evidence that the capital subsidies, by nature, are financial benefits to the entire company," (id. at 7). Plaintiffs maintain Commerce "may not decide a critical legal and factual issue by resorting to an irrebuttable presumption as a substitute for engaging in reasoned decisionmaking and basing its findings on evidence in the record." (Id. at 44-45 (citing NLRB v. St. Francis Hosp., 601 F.2d 404, 416 (9th Cir.1979); Charles I. Koch, Jr., Administrative Law and Practice § 6.43 (Supp.1992); and Jacob A. Stein, et al., Administrative Law § 24.04 (1994))). In addition, plaintiffs contend, the presumption impermissibly shifts the burden of proof onto respondents. (Id. at 48 n. 49, 51-52). Plaintiffs claim Commerce first announced its presumption-based tying methodology in the final determinations under review and in the General Issues Appendix "thereby depriving the parties of the opportunity to submit evidence to rebut the presumption." (Id. at 7; see id. at 52-55). From plaintiffs' viewpoint, the agency "committed legal error and violated considerations of fundamental fairness by its untimely adoption of its new presumption and its failure to afford respondents either prior notice of its new rule or the opportunity to develop the facts on the record necessary to prove the presumption invalid." (Id. at 54 (footnote omitted)). If Commerce had considered such evidence, plaintiffs suggest, that evidence of record could have successfully rebutted the presumption. (Id. at 64-66). Finally, plaintiffs raise the objection that Commerce's "decision to establish and find `unrebutted' the new tying presumption was contrary to the substantial evidence of record established in the French investigation." (Id. at 8). Plaintiffs argue Commerce failed to construe evidence on the record showing the subsidies bestowed on Usinor Sacilor benefitted Usinor Sacilor's worldwide production and that such subsidies were not tied to domestic production. B. Defendant Commerce responds that it "did not deviate from past practice because it had not previously addressed how to treat equity infusions in the multinational production setting, except in France Bismuth, where it found them capable of being tied." (Def's Br. at 25). Contrary to plaintiffs' assertion, Commerce insists it has not developed a per se rule that equity infusions are untied, only that equity infusions are capable of being tied. (Id.) Commerce rejects plaintiffs' argument that equity infusions should, as a matter of law, be treated as untied. (Id. at 36). Plaintiff has missed the point, Commerce claims, by ignoring that other forms of subsidies, such as grants and loans, are equally fungible, yet Commerce has found them to be tied in certain cases.[70] Thus, the fungibility of equity infusions does not preclude Commerce from tying equity infusions to domestic production just as other forms of subsidies are found to be tied. (Id. at 37). In addition, Commerce argues, the "basic underlying principle of Commerce's traditional tying analysis is that it is appropriate to make 1313 exceptions to the fungibility of money principle in certain circumstances." (Id.) As explained previously by Commerce, If Congress had intended that we universally apply the fungibility concept, we would have to countervail export subsidies on sales to countries other than the United States, allocate export subsidies on U.S. sales over total sales instead of over only export sales, and dilute benefits tied to a product under investigation by allocating them over total sales. (Id. at 38 (quoting Industrial Nitrocellulose from France, 51 Fed.Reg. 5386, 5387 (Dep't Comm.1986) (prelim. admin. review))). Commerce maintains the agency is now creating a third exception to the fungibility of money approach,[71] one "which would recognize the possibility that a subsidy could be tied to domestic production." (Id. at 39). Commerce rejects plaintiffs' argument that the agency has not articulated the basis for its new tying approach and has failed to reconcile the new approach with the "established rule" that equity infusions are inherently fungible. (Id. at 41). Commerce argues it clearly spelled out in France Bismuth why it treated firms with multinational production different from firms with only domestic production. In France Bismuth, Commerce stated it was "`not prepared to conclude automatically ... that otherwise untied domestic subsidies to a holding company with both domestic and foreign subsidiaries ... benefits [sic] not only domestic production, but also foreign production.'" France Bismuth, 58 Fed.Reg. at 6230. Commerce contends the rationale for raising the tying presumption is founded upon the agency's belief that "a government normally would provide subsidies to a firm with multinational production only for decidedly domestic purposes." (Id.). The agency's adoption of the rebuttable presumption on the factual question of tying is reasonable, Commerce contends, considering the agency's "extensive administrative experience with foreign subsidies." (Id. at 8 (citing General Issues Appendix, 58 Fed.Reg. at 37,231)). As summarized by Commerce, "[o]n the basis of our past administrative experience, we believe that it is reasonable to presume that the government of a country normally provides subsidies for the general purpose of promoting the economic and social health of that country and its people." (Id. (quoting General Issues Appendix, 58 Fed. Reg. at 37,231)). Commerce defends the adoption of a rebuttable presumption and argues it is both consistent with the intent of the relevant statute and based on "some rational connection between the facts proved and the facts then presumed." (Id. at 49 (citing Republic Aviation Corp. v. NLRB, 324 U.S. 793, 804-05, 65 S. Ct. 982, 988-89, 89 L. Ed. 1372 (1945); Luria v. United States, 231 U.S. 9, 34 S. Ct. 10, 58 L. Ed. 101 (1913); Rhone Poulenc, Inc. v. United States, 8 Fed.Cir. (T) 61, 67-68, 899 F.2d 1185, 1191 (1990); United Scenic Artists v. NLRB, 762 F.2d 1027, 1034 (D.C.Cir.1985); and NTN Bearing Corp. v. United States, 15 CIT 75, 78, 757 F. Supp. 1425, 1428 (1991), aff'd, 10 Fed.Cir. (T) ___, 972 F.2d 1355 (1992))). Commerce contends the tying presumption is consistent with one of the basic purposes of the countervailing duty statute because the presumption attempts to measure the subsidies benefitting the merchandise under investigation. (Id. (citing Certain Steel Products from Belgium, 47 Fed.Reg. 39,304, 39,320 (Dep't Comm. 1982) (final determ.); Industrial Nitrocellulose from France, 52 Fed.Reg. 833, 835 (Dep't Comm.1987) (final admin. review))). In addition, Commerce claims "there is a rational connection between the facts proved, i.e., that the government ... has provided a subsidy to a firm with multinational production, and the facts presumed, i.e., that the subsidy is tied to the firm's domestic production." (Id. at 50). Commerce rejects plaintiffs' claim of procedural unfairness in the agency's adoption of the rebuttable presumption. First, Commerce 1314 argues it sought all information relevant to the tying question in the questionnaires sent to the French and U.K. respondents. (Id. at 73-74). Although the questionnaires did not use the term "tied," Commerce claims the questions still "would elicit all information relevant to Commerce's determination of whether a particular subsidy program is tied to ... domestic production." (Id. at 73). Second, Commerce contends after the agency issued the preliminary determinations in these cases plaintiffs "were aware that tying was one of two possible theories upon which Commerce would rely in its final determination" yet plaintiffs did not attempt to supplement their questionnaire responses. (Id. at 77). When Commerce issued the France Bismuth final determination in January 1993, Commerce maintains it "identified specifically which of the two rationales it was relying upon to limit the denominator to sales of domestically produced merchandise." (Id.). Commerce states the parties received copies of France Bismuth one day before the regulatory deadline for the parties to submit factual information in the present cases. Even if plaintiffs did not know in advance about the tying presumption or about their evidentiary burden, Commerce insists plaintiffs were not prejudiced because: (1) the record already contained all relevant evidence on the question of tying; and (2) plaintiffs were aware that Commerce would be determining, as a factual matter, whether the subsidies at issue were tied to domestic production. (Id. at 78-79). C. Defendant-Intervenors Defendant-Intervenors support Commerce's position by arguing the agency reasonably presumed domestic subsidies may be tied to domestic production and furthermore, Commerce "determined with or without a presumption the subsidies here were in fact tied to domestic production." (Def.-Intervenors' Br. at 12 (footnote omitted)). Defendant-Intervenors maintain Commerce did not depart from its past practice arguing the agency had never considered this particular tying question before France Bismuth and "therefore `had no prior practice' to depart from." (Id. at 22 (citing General Issues Appendix, 58 Fed.Reg. at 37,235)). Defendant-Intervenors contend Commerce's adoption of a rebuttable presumption was reasonable and "solidly based on record evidence and administrative experience." (Id. at 15; see id. at 14-21). First, defendant-intervenors assert the presumption is based on the common understanding that governments are not generally motivated to assist foreigners at a cost to their own taxpayers. Second, Commerce's exhaustive analysis of the domestic subsidies at issue here "informs and supports the Department's decision concerning how to fashion this rebuttable presumption." (Id. at 16). Finally, defendant-intervenors contend Article 11 of the GATT Subsidies Code endorses Commerce's presumption that domestic subsidies are "purely national in scope." (Id. (footnote omitted) (citing Agreement on Interpretation and Application of Articles VI, XVI, and XXIII on the General Agreement on Tariffs and Trade, Art. 11 (1979))). Defendant-Intervenors reject plaintiffs' criticism that factual presumptions are disfavored and viewed with great skepticism by courts and claim that agencies have "broad discretion to apply a factual presumption so long as it is, both in principle and in application, rebuttable." (Id. at 19; see id. at 17-21). In addition, defendant-intervenors contend Commerce's use of an initial presumption is "fully consistent with the agency's investigatory mandate" and is not an unalterable rule, but one allowing for "decisions `on a case-by-case basis.'" (Id. at 19, 20 (footnote omitted)). Defendant-Intervenors disagree with plaintiffs' argument that the late adoption of the tying presumption abridged plaintiffs' due process rights. Defendant-Intervenors contend that although "the presumption analysis was a new development in the determinations presently before the Court, the allocation of subsidies to domestic production was not." (Id. at 36). The tying presumption raised here, defendant-intervenors insist, is "merely a complementary means of reaching the same allocation result reached in [France Bismuth]" and thus, plaintiffs had sufficient opportunity for notice and comment. (Id.) Indeed, in the preliminary 1315 French determination, defendant-intervenors declare Commerce found the subsidies to be tied domestically, and "within a month, all parties knew exactly why." (Id. at 38 (citing Certain Steel Products From France, 57 Fed.Reg. 57,785, 57,788 (Dep't Comm.1992) (prelim. determ.))). That is, one of the grounds Commerce relied upon, according to defendant-intervenors, was "an explicit reaffirmance of [France Bismuth]'s factual tying finding." (Id. (citing General Issues Appendix, 58 Fed.Reg. at 37,236)). Finally, defendant-intervenors suggest that insofar as Commerce's "explanation as opposed to the result in the Final Determinations varied from that set out [in the preliminary determination], the Department has the discretion to modify its findings or methodology in a final determination." (Id. at 39 (citing Cementos Anahuac del Golfo, S.A. v. United States, 12 CIT 525, 557, 689 F. Supp. 1191, 1216 (1988), aff'd sub nom. Cementos Guadalajara, S.A. v. United States, 7 Fed.Cir. (T) 113, 879 F.2d 847 (1989), cert. denied, 494 U.S. 1016, 110 S. Ct. 1318, 108 L. Ed. 2d 494 (1990))). DISCUSSION A. Agency Explanation of the Tying Presumption Ordinarily, an agency may revise its interpretation of the statutory requirements it enforces and enjoy deference from the courts. Rust v. Sullivan, 500 U.S. 173, 186, 111 S. Ct. 1759, 1769, 114 L. Ed. 2d 233 (1991). Such deference, however, is predicated on a finding that the agency revised its interpretation with "a reasoned analysis." See Rust, 500 U.S. at 187, 111 S. Ct. at 1769 (deferring to the agency's revised statutory interpretation because "the Secretary amply justified his change of interpretation with a `reasoned analysis'") (citing Motor Vehicles Mfrs. Ass'n of United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42, 103 S. Ct. 2856, 2866, 77 L. Ed. 2d 443 (1983)). Commerce's traditional practice with respect to domestic subsidies, as set forth in the Proposed Regulations, is to treat them as untied benefits. 54 Fed.Reg. 23,366, 23,384 (Dep't Comm.1989) (to be codified at 19 C.F.R. § 355.47(c)(2)) (proposed May 31, 1989) (Proposed Regulations); see also Carbon Steel Structural Shapes, Hot-Rolled Carbon Steel Plate, and Hot-Rolled Carbon Steel Bar from the United Kingdom, 47 Fed. Reg. 39,384, 39,391 (Dep't Comm.1982) (final determ.) ("[W]hen a government buys equity in a company, it is providing funds for the corporation as a whole, not for particular divisions or projects."). The reasoning supporting this practice is well settled: equity investments benefit a company's overall operations. See British Steel Corp. v. United States, 9 CIT 85, 96, 605 F. Supp. 286, 294-95 (1985) (finding it "unnecessary to trace the use of such funds or to find that they directly related to enhanced product competitiveness" because equity investments in the company under investigation benefitted "all of its remaining manufacturing and exporting operations"); see also Stainless Steel Plate from the United Kingdom, 51 Fed.Reg. 44,656, 44,658 (Dep't Comm.1986) (final admin. review) (reasoning that "[r]egardless of the particular uses" to which the equity infusions at issue were put, "it is clear that these funds provide[d] long-term benefits, bolstering all phases and aspects" of the receiving company's production). In France Bismuth, Commerce addressed, apparently for the first time, the "issue of the appropriate sales denominator to be used in subsidy calculations when a respondent's total sales include not only sales of domestically produced merchandise, but also sales of merchandise produced in one or more foreign countries." General Issues Appendix, 58 Fed.Reg. at 37,231. Commerce determined the subsidies at issue in France Bismuth were tied to domestic production. Commerce found: In making this determination, consistent with our existing methodology, we examined whether the subsidies were bestowed specifically to benefit domestic production.... On the record before us, after reviewing the programs from which the subsidies at issue arose ... we concluded that the [Government of France] was seeking to promote domestic social policy and domestic economic activities and therefore to encourage domestic production. France Bismuth, 58 Fed.Reg. at 6231 (citation omitted). 1316 When it faced the issue of the appropriate sales denominator for respondents with foreign sales six months later in the determinations under review, Commerce explained: We have decided to continue using a "tied" analysis to resolve this issue, although we have refined the analysis that we used in France Bismuth.... [U]nder the Department's refined "tied" analysis, the Department will begin by presuming that a subsidy provided by the government of the country under investigation is tied to domestic production. However, this presumption is not irrebuttable. A party may rebut this presumption by presenting evidence tending to show that the subsidy was not tied to domestic production. General Issues Appendix, 58 Fed.Reg. at 37,231. Commerce justified this modification of its tied analysis and its adoption of the rebuttable presumption by reasoning the changes reflect what the agency has observed over the years: On the basis of our past administrative experience, we believe that it is reasonable to presume that the government of a country normally provides subsidies for the general purpose of promoting the economic and social health of that country and its people, and for the specific purposes of supporting, assisting or encouraging domestic manufacturing or production and related activities (including, for example, social policy activities such as the employment of its people). Conversely, that same government would not normally be motivated to promote, at what would be considerable cost to its own taxpayers, manufacturing or production or higher employment in foreign countries. Id. In describing its apparent departure from the Proposed Regulations, which provide that "the Secretary will treat equity infusions as untied benefits," Proposed Regulations, 54 Fed.Reg. at 23,384 (to be codified at 19 C.F.R. § 355.47(c)(2)), Commerce observed the Proposed Regulations do not "contemplate[] the possibility that the subsidy would be bestowed upon a respondent with multinational production," General Issues Appendix, 58 Fed.Reg. at 37,234. Commerce stated it "concluded in France Bismuth that § 355.47(c)(1) simply did not contemplate a respondent with multinational production. We reaffirm that conclusion here." Id. There is little doubt Commerce has reviewed, analyzed, and decided numerous cases involving the identification and allocation of equity infusions, grants, and other subsidies in countervailing duty investigations. The Court finds no fault with Commerce's claim that it has "past administrative experience" in these matters. Additionally, Commerce's explanation that its tying presumption is consistent with the intent of the relevant statute because the presumption aids Commerce in determining the appropriate denominator appears reasonable on its face. On the basis of the record evidence produced thus far in this action, it appears Commerce has sufficiently explained its adoption of the tying presumption. As explained below, however, it is premature for the Court to decide whether Commerce has provided a reasoned analysis for adopting the tying presumption because interested parties had neither notice of the new presumption nor the opportunity to present evidence to rebut the presumption. B. Adoption of the Tying Presumption In adopting the rebuttable presumption, Commerce insists it has not changed its practice, but rather has "refined" the methodology it first set forth in France Bismuth. Because France Bismuth was the first time Commerce confronted the determination of the appropriate sales denominator for a multinational company receiving subsidies, Commerce declares it had no prior practice and therefore its refinement as explained in the General Issues Appendix was not a departure from an established agency practice. There is no question Commerce first raised the tying presumption in the final determinations under review here. Commerce concedes this point. Irrespective of whether Commerce adopted the tying presumption by a change in agency practice, through informal rulemaking, or by some other means, fundamental fairness dictates 1317 Commerce should have given plaintiffs due notice of the agency's decision to adopt the tying presumption as well as afforded plaintiffs the opportunity to submit evidence to rebut the tying presumption. Commerce is not required to afford interested parties an unlimited opportunity to comment on each modification of the agency's practice or procedure. To provide otherwise would be to unnecessarily burden the agency with an unending cycle of notices, comments, and responses. Fundamental fairness demands, however, that in certain circumstances, an interested party be given at least the opportunity to be heard on agency actions that may adversely impact upon the party's interests. In the countervailing duty final determination challenged in Sigma Corp. v. United States, 17 CIT ___, 841 F. Supp. 1255 (1993), Commerce shifted from applying a company-specific margin in its preliminary determination to a country-wide margin in the final determination. The plaintiff in Sigma claimed Commerce failed to afford the plaintiff notice or opportunity to comment on the agency's change. The Court responded: [I]t goes against all fairness for Commerce to say one thing in the preliminary results and then to have plaintiffs rely on this fact and not argue its case any further. Then, when plaintiffs cannot argue any further, Commerce changes its position and issues a final determination saying the complete opposite. Sigma, 17 CIT at ___, 841 F.Supp. at 1267. Plaintiffs in these final determinations face a similar predicament. In the preliminary determinations, Commerce did not discuss or analyze the use of a rebuttable presumption that subsidies are tied to domestic production in certain instances. See Certain Steel Products From France, 57 Fed.Reg. 57,785 (Dep't Comm.1992) (preliminary determ.); Certain Hot Rolled Lead and Bismuth Carbon Steel Products from the United Kingdom, 57 Fed. Reg. 42,974 (Dep't Comm.1992) (preliminary determ.). Thus, plaintiffs had neither notice that Commerce intended to erect a tying presumption nor the opportunity to submit evidence to rebut that presumption. The Court is unconvinced by Commerce's claim that plaintiffs had sufficient notice of Commerce's tying methodology merely by the questions posed by the agency in the verification forms. It is certainly true that plaintiffs had notice that Commerce sought some evidence relevant to a factual determination of whether subsidies provided were tied to domestic production. There is a large leap, however, from having notice of the agency's need for evidence relevant to tying to having notice of the need to submit evidence to rebut a newly raised presumption that domestic subsidies are tied to domestic production. The Court finds Commerce failed to give plaintiffs the opportunity to submit evidence specifically to rebut the presumption erected by Commerce. Furthermore, the Court finds Commerce failed to afford plaintiffs notice and the opportunity to comment on the agency's adoption of the presumption that subsidies are tied to domestic production. C. Motion to Strike Portions of Plaintiffs' Reply Brief Defendant-Intervenors, with consent of Commerce, move pursuant to U.S. CIT R. 12(f) for an order striking portions of plaintiffs' reply brief and allege certain portions were "not part of the administrative record below." (Def.-Intervenors' Mot. to Strike Portions of Foreign Producers' Reply Br. on the General Issue of Denominator at 2). In particular, defendant-intervenors object to the affidavit of Richard Hewitt, Manager in Management Accounting at British Steel plc, included in the appendix to plaintiffs' reply brief arguing: (1) there was no basis for allowing non-record evidence designed to show what plaintiffs would have submitted to Commerce below if plaintiffs had been aware of its relevance at that time; (2) the affidavit contains no information bearing on an issue currently before this Court; (3) the grant subsidy discussed in the affidavit is apparently not one of the subsidies disclosed to and countervailed by Commerce; and (4) plaintiffs had ample opportunity to submit the newly proffered information below even after formal closure of the administrative record. (Id. at 3-7). 1318 Defendant-Intervenors also object to plaintiffs' reference to three materials that were not part of the record below, namely: (1) D. Salvatore, International Economics (3d ed. 1990) (cited in Pls.' Reply Br. at 21 nn. 32-33); (2) R. Caves, J. Frankel, & R. Jones, World Trade and Payments (5th ed. 1990) (cited in Pls.' Reply Br. at 21 n. 33); and (3) U.S. Department of Commerce, North American Free Trade Agreement: Generating Jobs for Americans (1991) (cited in Pls.' Reply Br. at 21, 22 n. 34 and accompanying text). Defendant-Intervenors allege these three secondary sources were not made part of the record below and furthermore "they have nothing to do with the issues currently before this Court." (Id. at 8). Plaintiffs oppose defendant-intervenors' motion to strike portions of plaintiffs' reply brief arguing plaintiffs do not claim with respect to either category of documents that they have factual evidence in the administrative record, or that they should be added to the administrative record, or that the ITA relied on them. Nor do Plaintiffs contend that the Court should rely on the extra-record evidence to substitute its judgment for that of the agency on factual issues. Rather, Plaintiffs have cited these documents simply for the purposes described, and ask that the Court take judicial notice of them for those purposes. (Pls.' Resp. to Def.-Intervenors' Mot. to Strike Portions of Pls.' Reply Br. at 5). Plaintiffs concede the challenged documents are not part of the administrative record and plaintiffs do not seek to make them a part of that record. Rather, plaintiffs request that the Court take judicial notice of these documents for a limited purpose to show plaintiffs have evidence that could have been used to rebut Commerce's tying presumption if plaintiffs had known about the presumption before the final determinations. The Court declines to take judicial notice of the challenged documents because to do so would be inconsistent with the general principles of judicial notice.[72] The Court will allow, however, the challenged documents to remain as part of plaintiffs' papers for the sole and limited purpose of establishing plaintiffs' offer to produce evidence that may or may not rebut the tying presumption raised by Commerce. Defendant-Intervenors' motion to strike the challenged documents and certain references in plaintiffs' reply papers is granted in all other respects. D. Motion to Strike Plaintiffs' Supplemental Memorandum Defendant-Intervenors, with consent of Commerce, move pursuant to U.S. CIT R. 12(f) for an order striking plaintiffs' supplemental memorandum, which was filed in response to questions from the Court following oral argument. Defendant-Intervenors assert that the scheduling order governing this joint proceeding adopts Fed.Cir.R. 32(a), which requires all briefs to be double-spaced. The plaintiffs, however, submitted a supplemental memorandum "which is almost completely single-spaced." (Def.-Intervenors' Mot. to Strike Foreign Producers' Supplemental Mem. at 2 (footnote omitted)). Furthermore, if plaintiffs' memorandum had been double-spaced, defendant-intervenors contend, it would be "approximately 18 pages in length" and therefore would contravene the Court's instructions that responses to the Court's questions be no more than ten pages in length. (Id.). Defendant-Intervenors claim "[h]aving adhered to the Court's instructions in preparing their own supplemental memoranda, [defendant-intervenors] have been unfairly prejudiced by Foreign Producers' decision to ignore those instructions." (Id. at 3). If the motion to strike is denied, defendant-intervenors request in the alternative "leave to expand their own supplemental 1319 denominator submission by eight pages." (Id.) The Court notes, first, plaintiffs' response is nine pages in length and therefore is within the ten-page limit set by the Court. Second, given that plaintiffs' supplemental memorandum, when reformatted into the traditional text-and-footnote format, is still within the Court's ten-page limit, defendant-intervenors' claim of unfair prejudice is unavailing. Third, the Court notes that the granting of a motion to strike "constitutes an extraordinary remedy, and should granted only in cases where there has been a flagrant disregard of the Rules of this Court." Fujitsu General, Ltd. v. United States, 15 CIT 432, 433, 1991 WL 164482 (1991) (citing Jimlar Corp. v. United States, 10 CIT 671, 673, 647 F. Supp. 932, 934 (1986)). For all of the foregoing reasons, the Court holds plaintiffs did not flagrantly disregard the rules of this Court and no prejudice was suffered by defendant-intervenors or Commerce. Therefore, defendant-intervenors' motion to strike plaintiffs' supplemental memorandum is denied. CONCLUSION The Court holds Commerce did not permit plaintiffs a reasonable opportunity to be heard on the issue of Commerce's adoption of the presumption that subsidies are tied to domestic production for companies with multinational production in Commerce's determination of the appropriate sales denominator. Notwithstanding the deficiencies, if any, in Commerce's determination of the appropriate sales denominator, the Court holds further that Commerce did not provide plaintiffs an adequate opportunity to submit evidence to rebut the presumption erected by Commerce in its determination of the appropriate sales denominator. The Court remands the general issue of the sales denominator. Insofar as Certain Steel Products from France, 58 Fed.Reg. 37,304 (Dep't Comm.1993) (final determ.) is concerned, Commerce is directed to give interested parties notice and the opportunity to comment on the agency's adoption of the tying presumption. If, after consideration of such comments Commerce determines the tying presumption is an appropriate means to calculate the sales denominator, the agency is ordered to give interested parties notice and the opportunity to submit evidence on the record for the purpose of rebutting the tying presumption. Commerce shall then examine the submitted evidence to determine whether it is sufficient to rebut the tying presumption. If Commerce finds the evidence submitted is sufficient to rebut the tying presumption, the agency is directed to make all necessary and appropriate findings and calculations consistent with this opinion. Insofar as Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm.1993) (final determ.) (British Final Determination) is concerned, if Commerce should find in its remand determination on the general issue of privatization that any party is liable for countervailing duties, Commerce is directed to give interested parties against whom countervailing duties have been assessed notice and the opportunity to comment on the agency's adoption of the tying presumption. If, after consideration of such comments Commerce determines the tying presumption is an appropriate means to calculate the sales denominator, the agency is ordered to give interested parties notice and the opportunity to submit evidence on the record for the purpose of rebutting the tying presumption. Commerce shall then examine the submitted evidence to determine whether it is sufficient to rebut the tying presumption. If Commerce finds the evidence submitted is sufficient to rebut the tying presumption, the agency is directed to make all necessary and appropriate findings and calculations consistent with this opinion. Should Commerce find in its remand determination of the British Final Determination on the general issue of privatization that no parties are liable for countervailing duties, then the agency need not revisit the general issue of the sales denominator. The Court holds defendant-intervenors' motion to strike certain documents in plaintiffs' reply brief is granted except that the challenged documents shall remain as part of plaintiffs' papers for the sole and limited purpose of establishing plaintiffs' offer to produce evidence that may or may not rebut 1320 the tying presumption raised by Commerce. The Court denies defendant-intervenors' motion to strike plaintiffs' supplemental memorandum. SECTION FIVE: DISPROPORTIONALITY On the general issue of disproportionality, Plaintiffs Dongbu Steel Company, Ltd., Pohang Iron & Steel Company, Ltd. (POSCO), Pohang Coated Steel Company, Ltd., Pohang Steel Industries Company, Ltd., and Union Steel Industries Company, Ltd. (collectively "Korean Respondents") have filed a joint motion for partial judgment on the agency record and supporting memoranda challenging the general issue of Commerce's treatment of disproportionality for the purpose of evaluating the specificity of a potentially countervailable program in Certain Steel Products from Korea, 58 Fed.Reg. 37,338 (Dep't Comm.1993) (final determ.) (Korean Final Determination).[73] Defendant the Department of Commerce (Commerce) and defendant-intervenors AK Steel Corporation, Bethlehem Steel Corporation, Geneva Steel, Gulf States Steel Incorporated of Alabama, Inland Steel Industries, Incorporated, Laclede Steel Company, LTV Steel Company, Incorporated, Lukens Steel Company, National Steel Corporation, Sharon Steel Corporation, U.S. Steel Group a unit of USX Corporation, and WCI Steel, Incorporated (collectively "Domestic Producers") have responded in support of Commerce's determination. BACKGROUND Commerce's period of investigation in the Korean Final Determination is calendar year 1991. Korean Final Determination, 58 Fed.Reg. at 37,339. The products covered by Commerce's investigation are certain hot-rolled carbon steel flat products, certain cold-rolled carbon steel flat products, certain corrosion-resistant carbon steel flat products, and certain cut-to-length carbon steel plate. Id. In the Korean Final Determination, Commerce confirmed its preliminary determination that the Government of Korea (GOK) "effectively controls long-term lending practices in Korea." Id. at 37,340; see Certain Steel Products from Korea, 57 Fed.Reg. 57,761, 57,764-65 (Dep't Comm.1992) (prelim. determ.). Commerce also found evidence on the record to support a finding of GOK control over the Korean financial system through the following means: "(1) Control of lending practices pursuant to authority granted to the GOK under the General Bank Act; (2) The appointment of banking officials; (3) Informal intervention in the allocation of loans; and (4) The strict regulation of interest rates." Korean Final Determination, 58 Fed.Reg. at 37,340. Commerce concluded that a finding of GOK control of long-term lending institutions in Korea was "sufficient to establish a government program" under Commerce's own regulations, and constituted "government action" under § 771(5)(A)(ii) of the Tariff Act of 1930, as amended. See 54 Fed.Reg. 23,366, 23,379 (1989) (to be codified at 19 C.F.R. § 355.2(r)) (proposed May 31, 1989) (Proposed Regulations) (defining "program" to mean "any act or practice of a government"); Tariff Act of 1930, § 771(5)(A)(ii), 19 U.S.C. § 1677(5)(A)(ii) (1988) (defining "subsidy" to include certain domestic subsidies "if provided or required by government action"). Having determined that GOK control of long-term lending in Korea constitutes government action, Commerce had to address the question of whether the Korean Respondents received industry specific benefits from that action under 19 U.S.C. § 1677(5)(B). Korean Final Determination, 58 Fed.Reg. at 37,342; see 19 U.S.C. § 1677(5)(B) (1988) ("[T]he administering authority, in each investigation, shall determine whether the bounty, grant, or subsidy in law or in fact is provided to a specific enterprise or industry, or group of enterprises or industries."). To do so, Commerce reasoned that it was obligated to determine "whether, despite the removal of certain de jure preferences provided to the steel industry, there has been a de facto change in the patterns of lending to this industry from the time ... which GOK officials acknowledged was a period during 1321 which the GOK actively favored the steel industry ... through the provision of subsidized long-term financing." Korean Final Determination, 58 Fed.Reg. at 37,342 (quoting 19 U.S.C. § 1677(5)(B) (1988)). To determine whether the government action provided de facto selective benefits, Commerce turned to § 355.43(b)(2) of its proposed regulations which instructs Commerce to consider: (i) The extent to which a government acts to limit availability of a program; (ii) The number of enterprises, industries, or groups thereof that actually use a program; (iii) Whether there are dominant users of a program, or whether certain enterprises, industries, or groups thereof receive disproportionately large benefits under a program; and (iv) The extent to which a government exercises discretion in conferring benefits under a program. Proposed Regulations, 54 Fed.Reg. at 23,379 (1989) (to be codified at 19 C.F.R. § 355.43(b)(2)); Korean Final Determination, 58 Fed.Reg. at 37,342-43. Commerce explained the analysis it had to perform: The facts in this case do not show that the program has been selectively limited to a small number of users; likewise, there is no dominant user of the program. However, if the lending patterns to the steel industry have not changed since the HCI drive, i.e., if the GOK continued to target the steel industry for government-controlled long-term loans during the [period of investigation (POI)], a finding of de facto specificity may be made, if the steel industry receives a disproportionate share of the benefits. Korean Final Determination, 58 Fed.Reg. at 37,343. Commerce then explained how a comparison based on gross domestic product (GDP) was appropriate for its disproportionality analysis: An appropriate test for measuring whether the Korean steel industry has continued to receive a disproportionate share of the benefits from government controlled long-term loans is to compare the share of long-term loans held by the steel industry over the relevant time period (1977-1991) with the share of gross domestic product ... accounted for by this industry.... In this case, comparing the steel industry's share of long-term loans with its share of GDP is an appropriate measure of disproportionality. The program under investigation, government controlled longterm lending in Korea, is a "nationwide program," i.e., a program in which virtually every segment of the economy in the market naturally participates to some extent. Accordingly, given the broad, nationwide nature of this program, share of GDP is an appropriate point of comparison because it is a reasonable and objective nationwide measure of the expected share of restricted credit, all else being equal. Id. Applying this analysis to the facts, Commerce determined that: [W]hile the basic metals industry's share of GDP has remained relatively constant ... since the early to mid-1980s, the industry's share of long-term loans has actually risen slightly since the de jure preferences were terminated at this time. This trend is characteristic of both long-term Korean won loans and domestic foreign currency loans.... It is especially true concerning the largest source of long-term lending in the country, the Korea Development Bank [(KDB)]. The basic metals industry's share of long-term (equipment) loans from the KDB more than doubled from the date of the termination of de jure key industry targeting ... to the POI. In 1991 alone, this industry received over 20 percent of new KDB loans to the manufacturing sector. Id. Commerce also noted it had been informed during verification that industries specifically named in one provision of the Korea Development Bank Act (KDB Act),[74] including the iron and steel industries, received 1322 preferential access to KDB funds at least until 1985, despite the addition of another provision to the KDB Act nominally permitting all other industries access to those loans. Id. Furthermore, as to POSCO, the KDB had provided loans that were "not always in accordance with the KDB's lending guidelines, and ... POSCO had received KDB funds at a lower interest rate than its KDB credit rating would justify." Id. Finally, in addition to finding countervailable the GOK's provision to the Korean steel industry of preferential access to favorable domestic credit markets,[75] Commerce determined the GOK had provided preferential access to foreign credit markets as well. Id. at 37,344. Commerce further determined the GOK program of preferential foreign credit market access conferred de facto selective benefits upon the respondent steel companies: "The steel industry has received a volume of direct foreign loans that is overwhelmingly higher than that received by any other industry in Korea." Id.[76] Commerce concluded: "Based on the sum of this evidence, we determine that the GOK has provided the steel industry with preferential access to medium- and long-term credit from government and commercial banking institutions." Id. at 37,345. CONTENTIONS OF THE PARTIES A. The Korean Respondents The Korean Respondents criticize Commerce's use of GDP in relation to disproportionality on two principal grounds. First, the Korean Respondents maintain Commerce's GDP analysis is not a reasonable measure of disproportionality because "there is, in fact, no logical or economic relationship between GDP and long-term lending." (Pls./Def-Intervenors' R. 56.2 Br. at 5; see id. at 15-36). The Korean Respondents argue that, for a government action to be countervailable, substantial evidence must show selectivity. Here, however, no meaningful relationship has been shown between the government action countervailed and the test used to determine whether selectivity exists. Other than providing a "minimalist" explanation, Commerce failed "to adequately articulate the grounds for adopting a per se disproportionality test in this case," (id. at 23), the application of which resulted in the substitution of a mechanical, per se test for the case by case analysis dictated by Commerce's long-established practice, (id. at 27-29). Furthermore, the Korean Respondents argue, the per se GDP test does not measure disproportionality "because there is no relation between GDP and expected shares of credit." (Id. at 29 (emphasis omitted)). The Korean Respondents maintain the GDP test as a measure of output is inappropriate as a measure of expected use of input and ignores creditworthiness as a factor in lending decisions. Second, the Korean Respondents maintain that, as demonstrated by substantial evidence on the record, long-term loans were not in fact disproportionately supplied to the Korean steel industry. The Korean Respondents argue Commerce's analysis is not based upon substantial evidence because 1323 Commerce has not shown a causal link between GOK financial policies and their alleged effects on the steel industry. Furthermore, the Korean Respondents contend record evidence shows Commerce erred in finding long-term loans to the Korean steel industry were disproportionate. Instead, information on the record indicating the relatively high capital requirements of the steel industry indicates that lending to the steel industry was not in fact disproportionate. In addition, Commerce failed to take into account the level of investment by the Korean industry and the extent to which it was financed internally as significant indicators of the steel industry's expected share of loans. B. The Department of Commerce Commerce agrees that, to countervail a government action, Commerce must make a finding of specificity on a case by case basis. See Def.'s Mem. in Opp'n at 19-20 ("[T]he specificity test cannot be reduced to a precise mathematical formula. Instead, the Department must exercise judgment and balance various factors in analyzing the facts of a particular case.") (citing Proposed Regulations, 54 Fed.Reg. at 23,368 (preamble to provision to be codified at 19 C.F.R. § 355.43(b)(2)) (proposed May 31, 1989)). Commerce contends, however, that based upon the facts of this case, Commerce selected a proper methodology by which to measure de facto specificity. In this case, "plaintiffs have admitted subsidization in the past." (Id. at 23). Accordingly, Commerce compared the Korean steel industry's percentage share of restricted credit during the time subsidization was admitted to the period during which the de jure subsidizations were allegedly terminated. Upon performing this comparison, Commerce argues it found "[t]he steel industry's percentage share of credit did not decrease, it actually increased slightly, indicating that even though the laws had changed, the actual lending patterns had not changed." (Id. at 22-23 (citing Korean Final Determination, 58 Fed.Reg. at 37,343)). Based on this evidence, Commerce maintains it properly concluded "that the GOK must still have been de facto directing a disproportionate share of the available credit to the steel industry." (Id. at 23). Thus, Commerce argues, GDP was not the sole basis for Commerce's finding of disproportionality. Instead, "Commerce's method for determining that the Korean steel industry received a disproportionate share of the restricted amount of available credit is primarily based upon an analysis of the patterns of long-term lending to the iron and steel industry over an extended period of time." (Id. at 21 (citation omitted)). In addition to performing this analysis, "Commerce further compared the ratio of the steel industry's share of GDP with its percentage share of loans over time ... as a general check to see if there might be other reasons for the absence of a change in the lending patterns." (Id. at 23). Commerce argues the Korean Respondents have taken quotations pertaining to the GDP analysis out of context to support the Korean Respondents' argument that the GDP comparison was the sole basis for Commerce's finding of disproportionality. Commerce counters by pointing to other passages in the Korean Final Determination indicating "Commerce performed a much more intricate analysis." (Id. at 29 (citing Korean Final Determination, 58 Fed.Reg. at 37,343)). Furthermore, Commerce defends its use of GDP as relevant to its disproportionality analysis because GDP may be used as a litmus test of the relative position of the steel industry within the economy as a whole. There does not need to be a relationship between shares of loans and GDP for Commerce to use GDP as an indicator of changes in the relative economic size of the industry. (Id. at 28). Finally, Commerce contends it properly considered and rejected the Korean Respondents' proposed factors for testing disproportionality. As to capital-intensiveness, Commerce claims "the relative capital-intensiveness of an industry in Korea does not provide any guidance in determining the amount of loans an industry should be expected to receive." (Id. at 25). Similarly, as to internal financing, "the fact that an industry maintains substantial internal financing has no bearing upon the share of external funds which it receives." (Id. at 26). 1324 C. The Domestic Producers The Domestic Producers urge this Court to uphold Commerce's determination as reasonable and defend Commerce's de facto specificity analysis. The Domestic Producers contend "evidence that a government directs credit to an industry or evidence that a program allocates benefits in a disproportionate fashion is sufficient for a finding of specificity." (Def.-Intervenors' Br. in Opp'n at 12). In this case, because Commerce "found de facto specificity on the basis of government direction of credit to the steel industry," Commerce did not have to find de facto specificity on any other basis. (Id. at 13). Commerce did, however, analyze disproportionate use, and that analysis was "[c]onsistent with long-standing practice." (Id. at 14). Furthermore, the Domestic Producers contend Commerce's disproportionality test was not arbitrary. Instead, "[c]ombined with the extensive record evidence of governmental direction of loan program benefits to the steel sector, the results of the Department's GDP analysis easily support the Department's conclusion that the GOK provided de facto selective benefits" to the Korean Respondents. (Id.). The Domestic Producers also dispute the Korean Respondents' criticisms of Commerce's disproportionality analysis. The Domestic Producers contend the Korean Respondents confuse the purpose of the disproportionality test when arguing that it was inappropriate for Commerce to use GDP to measure whether long-term loans were provided to the steel industry: "[T]he disproportionality test measures whether the pattern of benefits not any pattern of loans reveals distribution of government largess on a selective basis." (Id. at 18). The Domestic Producers also reject what they characterize as the Korean Respondents' assertion "that the steel industry has received a disproportionate share of loans only because loan programs are particularly well suited to the needs of the steel industry," and argue "[t]hat a government program may be well suited to a particular group of industries is irrelevant when assessing specificity." (Id. at 21 (footnotes omitted)). The Domestic Producers also dispute the Korean Respondents' contentions concerning creditworthiness and levels of internally-sourced funds. Finally, the Domestic Producers argue Commerce was not required as a matter of law to find that the GOK program had the effect of directing a disproportionate amount of loans to the steel industry, and contend that "the Department repeatedly has held that there is no need to demonstrate `purposeful government action' or `targeting' i.e. direction of credit to demonstrate de facto specificity." (Id. at 24 (footnote omitted)). DISCUSSION Under 19 U.S.C. § 1677(5)(B), Commerce, to countervail a bounty or grant, must determine whether the bounty, grant, or subsidy in law or in fact is provided to a specific enterprise or industry, or group of enterprises or industries. Nominal general availability, under the terms of the law, regulation, program, or rule establishing a bounty, grant, or subsidy, of the benefits thereunder is not a basis for determining that the bounty, grant, or subsidy is not, or has not been, in fact provided to a specific enterprise or industry, or group thereof. 19 U.S.C. § 1677(5)(B) (1988). A finding of de facto specificity "requires a `case by case' analysis to determine whether `there has been a bestowal upon a specific class.'" PPG Indus., Inc. v. United States, 9 Fed.Cir. (T) 71, 80, 928 F.2d 1568, 1577 (1991) (quoting and discussing Cabot Corp. v. United States, 9 CIT 489, 620 F. Supp. 722 (1985), dismissed as unappealable, 4 Fed.Cir. (T) 80, 788 F.2d 1539 (1986)); see Roses Inc. v. United States, 15 CIT 465, 467, 774 F. Supp. 1376, 1379 (1991) ("The court continued to adhere to the principle that the statute requires a case by case analysis to determine whether there has been a bestowal of benefits upon a specific class, i.e., it remains paramount that a discrete class of beneficiaries exist.") (footnote omitted). As discussed above, Commerce determined in the Korean Final Determination that the GOK "controls the long-term lending institutions in Korea." Korean Final Determination, 58 Fed.Reg. at 37,342; see also id. at 37,340 (stating that "the GOK directly controls 1325 a majority of long-term lending in Korea," and "[i]nformation on the record indicates that the GOK also controls the Korean financial system through several other means"). Commerce also determined that "the GOK has intervened in the market to direct credit available in favorable markets to the steel industry" and that the Korean steel industry thus received a countervailable benefit in the form of "relative access to those long-term credit markets that offer favorable interest rates compared with the rates prevailing in other long-term credit markets." Id. at 37,345. In the case of access to favorable domestic credit markets, Commerce appears to have based its determination regarding direction of credit on the finding, among other findings, that the basic metal industry's "share of long-term loans has ... risen slightly since the de jure preferences were terminated," while "the basic metal industry's share of GDP has remained relatively constant at approximately 2-2.5 percent since the early to mid-1980s." Id. at 37,343; see also id. at 37,345 ("[W]e have based this determination on the disproportionate share of government-regulated loans obtained by the steel industry in relation to that industry's share of GDP."). In the case of access to favorable foreign credit markets, Commerce appears to have based its conclusion regarding direction of credit "on the disproportionate share of foreign loans obtained by the steel industry in relation to all other industries." Id. at 37,345. The Korean Respondents maintain the "GDP test" cannot measure disproportionality because there is no demonstrated relationship between shares of GDP and lending. Commerce argues that GDP was not the sole basis for finding disproportionality in the case of access to favorable domestic credit markets. Instead, Commerce maintains it determined that the Korean steel industry received a disproportionate share of the restricted amount of available credit, based upon an analysis of the patterns of long-term lending to the iron and steel industry over a long period of time. The GDP analysis, Commerce argues, was a further, "general check to see if there might be other reasons for the absence of a change in the lending patterns." (Def.'s Mem. in Opp'n at 23). In short, Commerce appears to be using GDP as a sort of measuring stick. While this Court might prefer that Commerce use a different methodology, the Court will, nevertheless, defer to Commerce and its expertise in designing and implementing a methodology that is reasonable. See Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 404, 636 F. Supp. 961, 966 (1986) ("The deference granted or extended to the agency's interpretation of its statutory mandate also applies to the methodology that the agency employs in fulfilling its lawfully delegated mission.") (citations omitted), aff'd 5 Fed.Cir. (T) 77, 810 F.2d 1137 (1987). However, even if the Court were to accept all of the findings set forth in the Korean Final Determination, the Court sees no nexus between these findings, singularly or together, that would permit this Court to hold that Commerce could reasonably conclude the Korean steel industry was or was not receiving benefits from subsidies. Commerce does not sufficiently explain in the Korean Final Determination the connection between the government de facto program and the steel companies' alleged preferential access to specific sources of credit. Assuming the steel companies at issue did have significant access to domestic credit markets offering favorable interest rates, Commerce has not presented enough evidence nor has it sufficiently explained the evidence presented to enable this Court to hold that the agency could reasonably conclude the control of the GOK over long-term lending institutions in Korea caused the respondent steel companies to receive preferential access to favorable domestic credit markets.[77] 1326 Commerce urges that the share of loans and the access to loans is disproportionate compared to that received by other commercial endeavors in the Korean economy. Commerce, however, does not seem to address reasons that may explain why respondent steel companies have such a large share. For example, the steel industry may have been expanding during the period of investigation, or there may have been a special need for increased capital investment in the steel industry necessitating loans at that time, as distinguished from other heavy industries. Perhaps there were other reasons based on commercial considerations. Commerce does briefly discuss and dismiss the Korean Respondents' arguments concerning capital intensity and internally-sourced funding. See Korean Final Determination, 58 Fed.Reg. at 37,343-44. Commerce does not, however, invite the Court's attention to any evidence that draws one to reasonably conclude there is a nexus between a Korean program and the significant access to credit the respondent steel companies appear to enjoy. There is no question that whether a de jure or de facto subsidy is to be countervailed, it must be industry specific. To be industry specific, Commerce must show, at a minimum, the existence of a program and that, because of the program, a specific industry received a subsidy. Commerce has failed to do so in this case. In the Korean Final Determination, Commerce cited its decision in Certain Softwood Lumber Products from Canada, 57 Fed.Reg. 22,570, 22,580-81 (Dep't Comm.1992) (final determ.) to argue that "[t]he regulations do not require a finding of a `purposeful government action' as a prerequisite to conducting a specificity analysis." Korean Final Determination, 58 Fed.Reg. at 37,342 (citing parenthetically Certain Lumber Products from Canada, 57 Fed.Reg. at 22,580-81: "[N]either `purposeful government action' nor government `targeting' is necessary in order to establish a government act or practice."). Similarly, in papers submitted to this Court, the Domestic Producers argue the Korean Respondents' "assertions that the Department must find that there is a government policy to provide subsidized credit to the steel industry is not correct as a matter of law." (Def.-Intervenors' Br. in Opp'n at 25). This Court will not require Commerce to find purposeful government action in order to countervail. Commerce must show, however, that some causal link, whether purposeful or not, exists between a government program of general control and the alleged subsidy received. Without such a link, it cannot be determined whether the alleged donee has received a subsidy at all or whether a government program of general control has resulted in the provision of benefits to a specific industry. Here, for example, even if the Court accepts Commerce's finding that the steel companies at issue had access to specific sources of credit, access alone does not constitute a subsidy just as mere possession or receipt of any asset or benefit does not necessarily evidence a subsidy. Mere access to credit is not sufficient to indicate the steel companies were in fact receiving preferential access to domestic credit markets offering favorable interest rates under a GOK program. Therefore, while the Court will defer to Commerce's chosen methodology where it is reasonable, this Court holds that even with the evidence presented and its application to that methodology, Commerce's determination that the Korean steel industry received countervailable benefits from subsidies in the form of preferential access to favorable domestic credit markets was unreasonable because Commerce has failed to show a nexus between the government action and the alleged benefits bestowed. The Court holds Commerce's determination is not supported by substantial evidence and is not otherwise 1327 in accordance with law.[78] In regard to preferential access to direct foreign loans, Commerce notes that the Ministry of Finance, as part of the GOK's economic policy, exercises oversight of foreign capital through the Foreign Capital Inducement Act. Korean Final Determination, 58 Fed.Reg. at 37,344. The Ministry of Finance at verification explained that to secure foreign loans, a company had to be able to negotiate a direct foreign currency loan with a creditor at or below a set ceiling established by the Ministry of Finance. Id. If a company could not negotiate a loan with an interest rate below the ceiling, it was not permitted to borrow on foreign currency markets. Id. This program was apparently directed at all commercial enterprises in Korea, and not just the respondent steel companies. Id. Commerce also notes the Ministry of Finance at verification acknowledged that in the mid-1980s it intentionally lowered the allowable ceiling so that, in effect, very few companies could qualify to receive direct foreign loans. Id. According to the Ministry of Finance, this apparently was done to force most companies to borrow foreign currency domestically in order to recycle the current account surplus that existed at that time, and in order to protect Korea's international credit standing by permitting only the most creditworthy companies to borrow directly on foreign capital markets. Id. It appears from the Korean Final Determination that Commerce believes this program provided de facto selective benefits to the respondent steel companies during the POI. Id. Commerce appears to base this conclusion largely on the steel industry's receipt of "a volume of direct foreign loans that is overwhelmingly higher than that received by any other industry in Korea." Id. (stating further that "the iron and steel industry has received approximately 60 percent of all direct foreign loans to the manufacturing sector since 1985, and over 40 percent of all direct foreign loans to all industries since this time"); see id. at 37,345 (explaining Commerce based its determination concerning the direction of credit to the steel industry in the case of access to favorable foreign markets "on the disproportionate share of foreign loans obtained by the steel industry in relation to all other industries"). As with its analysis of domestic credit market access, Commerce has failed to direct the Court's attention to other reasons that may explain why respondent steel companies have such a large share of direct foreign loans.[79] Commerce has failed to point out or to invite the Court's attention to evidence on the record to permit the Court to conclude there is substantial evidence in the record to support the conclusion of Commerce that this program bestowed industry-specific benefits on respondent steel companies.[80] 1328 Accordingly, this Court remands the Korean Final Determination to Commerce with the following instructions. Commerce is to explain, if it is able, what evidence on the record demonstrates that programs existed during the period of investigation to benefit the respondent steel companies by giving them preferential access to both domestic and direct foreign credit markets, and how the respondent steel companies received that access to credit. Commerce is directed to advise the Court whether the GOK's control over long-term lending in Korea and the program concerning alleged preferential access to direct foreign loans administered by the Ministry of Finance were industry specific, and point out what evidence on the record, if any, demonstrates specificity. Commerce is further directed to explain in both cases, if it is able, why the large share of loans and access to loans by the respondent steel companies is attributable to an industry specific program of the GOK, and not to some other reason, such as expanding capital needs or other reasons consistent with commercial considerations. Commerce should also calculate what countervailing duties, if any, should be imposed upon the respondent steel companies consistent with this opinion.[81] CONCLUSION After considering all arguments submitted by the parties, the Court holds Commerce's final determination in Certain Steel Products from Korea, 58 Fed.Reg. 37,338 (Dep't Comm.1993) (final determ.) is remanded so that Commerce may, consistent with this opinion, point out what evidence, if any, on the record demonstrates that GOK programs existed during the period of investigation to specifically benefit respondent steel companies by giving them preferential access to domestic and foreign credit and explain its rationale. Commerce is further directed to calculate that benefit where applicable. ORDER These consolidated actions in this joint proceeding having been duly submitted for decision, after due deliberation, it is hereby ORDERED that the Department of Commerce's determination in Certain Steel Products from Mexico, 58 Fed.Reg. 37,352 (Dep't Comm.1993) (final determ.), insofar as it pertains to Commerce's application of its privatization methodology, is remanded; and it is further ORDERED that the Department of Commerce's determination in Certain Steel Products from Brazil, 58 Fed.Reg. 37,295 (Dep't Comm.1993) (final determ.), insofar as it pertains 1329 to Commerce's application of its privatization methodology, is remanded; and it is further ORDERED that the Department of Commerce's determination in Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm.1993) (final determ.), insofar as it pertains to Commerce's application of its privatization methodology, is remanded; and it is further ORDERED that the Department of Commerce's determination in Certain Steel Products from Germany, 58 Fed.Reg. 37,315 (Dep't Comm.1993) (final determ.), insofar as it pertains to Commerce's application of its privatization methodology, is remanded; and it is further ORDERED that in each of the above remands, Commerce will determine and report to this Court the following: (1) whether each transaction was at arm's length, for fair market value, and based upon commercial considerations; (2) whether each transaction involved a privatization or partial privatization; (3) the terms and substance of each transaction and whether each transaction involved a sale of an asset or several assets or consisted entirely of a sale of shares; (4) whether, under the Court's analysis set forth in the attached opinion, if a privatization or partial privatization took place, the privatized entity continues to be, for all intents and purposes, the same entity that received subsidies prior to the privatization or partial privatization transaction; and (5) whether, under the Court's analysis set forth in the attached opinion, Commerce may properly countervail the privatized or partially privatized corporation at issue in each determination; and it is further ORDERED that the Department of Commerce's determination in Certain Steel Products from France, 58 Fed.Reg. 37,304 (Dep't Comm.1993) (final determ.) is remanded for a reexamination of the allocation methodology as employed in that determination and as explained in the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,225-31 (Dep't Comm.1993) (final determ.) for a case by case examination of the relevant commercial and competitive factors of the firms under investigation occasioned by receipt of the nonrecurring subsidies at issue. After having examined such factors, Commerce is directed to determine if those factors, when examined with or without a proxy such as the IRS tax tables, lead to a method of allocating the benefits of nonrecurring subsidies that reasonably reflects the commercial and competitive advantages enjoyed by the firms receiving such subsides; and it is further ORDERED that insofar as the Department of Commerce's determination in Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm.1993) (final determ.) is remanded on the general issue of privatization, if Commerce should find in its remand determination that any party is liable for countervailing duties, Commerce is directed to reexamine the allocation methodology as applied to those parties against whom countervailing duties have been assessed for a case by case examination of the relevant commercial and competitive factors of the firms under investigation occasioned by receipt of the nonrecurring subsidies at issue. After having examined such factors, Commerce is directed to determine if those factors, when examined with or without a proxy such as the IRS tax tables, lead to a method of allocating the benefits of nonrecurring subsidies that reasonably reflects the commercial and competitive advantages enjoyed by the firms receiving such subsides. Should Commerce find in its remand determination of Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm.1993) (final determ.) on the general issue of privatization that no parties are liable for countervailing duties, then the agency need not revisit the general issue of the allocation methodology; and it is further ORDERED that Commerce's abandonment of the rate of return shortfall (RORS) methodology as set forth in the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,239-44 (Dep't Comm.1993) (final determ.) and applied in the final countervailing duty determinations in Certain Steel Products from Korea, 58 Fed.Reg. 37,338 (Dep't Comm.1993) (final determ.), Certain Steel Products from Brazil, 58 Fed.Reg. 37,295 1330 (Dep't Comm.1993) (final determ.), and Certain Steel Products from France, 58 Fed. Reg. 37,304 (Dep't Comm.1993) (final determ.) is sustained as based upon substantial evidence on the record and as otherwise in accordance with law; and it is further ORDERED the grant methodology employed by Commerce to countervail equity infusions into unequityworthy companies as set forth in the General Issues Appendix appended to Certain Steel Products from Austria, 58 Fed.Reg. 37,225, 37,239-44 (Dep't Comm.1993) (final determ.) and applied in the final countervailing duty determinations in Certain Steel Products from Korea, 58 Fed.Reg. 37,338 (Dep't Comm.1993) (final determ.), Certain Steel Products from Brazil, 58 Fed.Reg. 37,295 (Dep't Comm. 1993) (final determ.), and Certain Steel Products from France, 58 Fed.Reg. 37,304 (Dep't Comm.1993) (final determ.) is sustained as based upon substantial evidence on the record and as otherwise in accordance with law; and it is further ORDERED that insofar as the Department of Commerce's determination in Certain Steel Products from France, 58 Fed. Reg. 37,304 (Dep't Comm.1993) (final determ.) is remanded on the general issue of allocation, Commerce is further directed in its remand determination to give interested parties notice and the opportunity to comment on the agency's adoption of the tying presumption. If, after consideration of such comments Commerce determines the tying presumption is an appropriate means to calculate the sales denominator, the agency is ordered to give interested parties notice and the opportunity to submit evidence on the record for the purpose of rebutting the tying presumption. Commerce shall then examine the submitted evidence to determine whether it is sufficient to rebut the tying presumption. If Commerce finds the evidence submitted is sufficient to rebut the tying presumption, the agency is directed to make all necessary and appropriate findings and calculations consistent with this opinion; and it is further ORDERED that insofar as the Department of Commerce's determination in Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm.1993) (final determ.) is remanded on the general issue of privatization, if Commerce should find in its remand determination that any party is liable for countervailing duties, Commerce is directed to give interested parties against whom countervailing duties have been assessed notice and the opportunity to comment on the agency's adoption of the tying presumption. If, after consideration of such comments Commerce determines the tying presumption is an appropriate means to calculate the sales denominator, the agency is ordered to give interested parties notice and the opportunity to submit evidence on the record for the purpose of rebutting the tying presumption. Commerce shall then examine the submitted evidence to determine whether it is sufficient to rebut the tying presumption. If Commerce finds the evidence submitted is sufficient to rebut the tying presumption, the agency is directed to make all necessary and appropriate findings and calculations consistent with this opinion. Should Commerce find in its remand determination of Certain Steel Products from the United Kingdom, 58 Fed.Reg. 37,393 (Dep't Comm.1993) (final determ.) on the general issue of privatization that no parties are liable for countervailing duties, then the agency need not revisit the general issue of the sales denominator; and it is further ORDERED that after examination and implementation of the remand instructions, and after reexamination of all applicable methodologies remanded: (1) Commerce will calculate and report any countervailing duties due, if any, by any transferor and transferee subsequent to privatization; (2) if, under the Court's analysis set forth in the attached opinion, Commerce determines that any privatized or partially privatized entity continues to be, for all intents and purposes, the same entity that received subsidies prior to a privatization or partial privatization transaction, Commerce will calculate any and all countervailing duties due on the surviving entity; and (3) Commerce will calculate any and all countervailing duties due on account of any other type of privatization transaction arising in the individual determinations remanded; and it is further 1331 ORDERED that on the issue of disproportionality, Commerce's final determination in Certain Steel Products from Korea, 58 Fed. Reg. 37,338 (Dep't Comm.1993) (final determ.) is remanded with the following instructions. Commerce is to explain, if it is able, what evidence on the record demonstrates that programs existed during the period of investigation to benefit the respondent steel companies by giving them preferential access to both domestic and direct foreign credit markets, and how the respondent steel companies received that access to credit. Commerce is directed to advise the Court whether the Government of Korea's (GOK) control over long-term lending in Korea and the program concerning alleged preferential access to direct foreign loans administered by the Ministry of Finance were industry specific, and point out what evidence on the record, if any, demonstrates specificity. Commerce is further directed to explain in both cases, if it is able, why the large share of loans and access to loans by the respondent steel companies is attributable to an industry specific program of the GOK, and not to some other reason, such as expanding capital needs or other reasons consistent with commercial considerations. Commerce should also calculate what countervailing duties, if any, should be imposed upon the respondent steel companies consistent with this opinion; and it is further ORDERED that Defendant-Intervenor AG der Dillinger Hüttenwerke's motion for summary judgment in LTV Steel Co., Inc. et al. v. United States, Consol. Court No. 9309-00568-CVD, is denied in all respects; and it is further ORDERED that defendant-intervenors' motion to strike certain documents in plaintiffs' reply brief on the general issue of sales denominator is granted except that the challenged documents shall remain as part of plaintiffs' papers for the sole and limited purpose of establishing plaintiffs' offer to produce evidence that may or may not rebut the tying presumption raised by Commerce; and it is further ORDERED that defendant-intervenors' motion to strike plaintiffs' supplemental memorandum on the general issue of sales denominator is denied; and it is further ORDERED that Commerce shall report its remand determinations within 70 days from the entry of this Order by the Clerk of the Court of International Trade; comments or responses by the parties to the remand results are due within 30 days thereafter; any rebuttal comments are due within 15 days of the date responses or comments are due. All comments or responses, and all rebuttal comments are limited to 40 pages. NOTES [1] Industrias Monterrey S.A. de C.V. v. United States, Court No. 93-09-00632-CVD, was consolidated under Lukens Steel Co., et al. v. United States, Consol. Court No. 93-09-00570-CVD, by order of this Court on December 9, 1994. [2] The Court notes that Empresa Nacional Siderurgica, S.A. v. United States, Court No. 93-09-00625-CVD, was also a part of this joint proceeding. See British Steel plc v. United States, Consol.Court No. 93-09-00550-CVD at 11 (CIT Feb. 18, 1994) (scheduling order). The Court further notes that the parties represented in Empresa Nacional Siderurgica, S.A. v. United States, Court No. 93-09-00625-CVD, filed a voluntarily stipulated dismissal pursuant to which that action was dismissed on January 25, 1995. [3] Commerce amended the Brazilian Final Determination on August 17, 1993. See Certain Steel Products from Brazil, 58 Fed.Reg. 43,751 (Dep't Comm.1993) (order and am. final determ.). [4] Commerce amended the Mexican Final Determination on August 17, 1993. See Certain Steel Products from Mexico, 58 Fed.Reg. 43,755 (Dep't Comm.1993) (order and am. final determ.). [5] Commerce amended the British Final Determination on August 17, 1993. See Certain Steel Products from the United Kingdom, 58 Fed.Reg. 43,748 (Dep't Comm.1993) (order and am. final determ.). [6] At the time of the filing of this motion, AK Steel Corporation was named Armco Steel Company, L.P. The Court will refer to the company as AK Steel Corporation throughout this opinion. [7] Commerce amended the German Final Determination on August 17, 1993. See Certain Steel Products from Germany, 58 Fed.Reg. 43,756 (Dep't Comm.1993) (orders and am. final determ.) [8] Three companies were involved in the Mexican Final Determination: Industrias Monterrey, S.A. de C.V.; Hojalata y Lamina, S.A. de C.V.; and AHMSA. Mexican Final Determination, 58 Fed. Reg. at 37,353. Because only the investigation of AHMSA involves issues of privatization and Commerce's privatization and repayment methodologies, the Court will address the final determination only as it pertains to AHMSA. [9] Certain corrosion-resistant carbon steel flat products were also covered by Commerce's investigation as the investigation related to Industrias Monterrey, S.A. de C.V. and Hojalata y Lamina, S.A. de C.V. Mexican Final Determination, 58 Fed.Reg. at 37,353. As discussed, supra note 8, the Court will not address these aspects of Commerce's investigation. [10] See, e.g., Certain Steel Products from Austria, 58 Fed.Reg. 37,217, 37,219 (Dep't Comm.1993) (final determ.); Certain Steel Products from Belgium, 58 Fed.Reg. 37,273, 37,274 (Dep't Comm. 1993) (final determ.); Brazilian Final Determination, 58 Fed.Reg. at 37,296; Certain Steel Products from France, 58 Fed.Reg. 37,304, 37,305 (Dep't Comm.1993) (final determ.); German Final Determination, 58 Fed.Reg. at 37,315; Certain Steel Products from Italy, 58 Fed.Reg. 37,327, 37,328 (Dep't Comm.1993) (final determ.); Certain Steel Products from Korea, 58 Fed.Reg. 37,338, 37,339 (Dep't Comm.1993) (final determ.); Mexican Final Determination, 58 Fed. Reg. at 37,354; Certain Steel Products from New Zealand, 58 Fed.Reg. 37,366, 37,366-67 (Dep't Comm.1993) (final determ.); Certain Steel Products from Spain, 58 Fed.Reg. 37,374, 37,375 (Dep't Comm.1993) (final determ.); Certain Steel Products from Sweden, 58 Fed.Reg. 37,385, 37,386 (Dep't Comm.1993) (final determ.); British Final Determination, 58 Fed.Reg. at 37,394. [11] Commerce established a minimum threshold for allocating subsidies because the agency determined it would be administratively infeasible to allocate subsidies to each individual asset. "In order to be considered a productive unit, the spun-off operation must be capable of (1) generating sales and (2) operating independently." General Issues Appendix, 58 Fed.Reg. at 37,268. [12] Commerce explained: "To adopt [that] rationale ... would create a test that would elevate form over substance and produce incentives for foreign governments merely to alter the form of the privatization to satisfy this artificial distinction." General Issues Appendix, 58 Fed.Reg. at 37,262. [13] Commerce explained that it used 1977 as a measuring point because it was "the earliest point at which subsidies with benefits remaining countervailable in this investigation could have been bestowed." General Issues Appendix, 58 Fed.Reg. at 37,263. [14] The Foreign Producers' Memorandum in Support of Their Motion for Partial Judgment on the Agency Record includes individual submissions by AHMSA, Usinas Siderurgicas de Minas Gerais, S.A. (USIMINAS), and British Steel plc. See Resp'ts J.Br. in Supp. of Mot. for Partial J. on R., Vol. II. Additionally, AHMSA submitted an individual response to this Court's post-oral argument questions concerning privatization. This opinion, however, will refer textually to all submissions made by Foreign Producers, collectively or individually, as made by Foreign Producers. [15] The Domestic Producers have not made this statement directly. The Domestic Producers inform this Court, however, that they challenge both the Mexican Final Determination and whether Commerce's "determination that the privatization of a state-owned company could result in the partial repayment of subsidies bestowed upon the company before its privatization was without support of substantial evidence, and was otherwise contrary to law." (Pls.' J. Br. in Supp. of Mot. for J. on R. at 2; see also id. at 13-14 (setting forth the facts of the Mexican Final Determination)). [16] The Court notes that the Domestic Producers did argue in the underlying investigation that AHMSA was not sold at fair market value. See General Issues Appendix, 58 Fed.Reg. at 37,264; AK Steel Corp., et al., Answers to Ct.'s Questions at 3 n. 4. The Domestic Producers argued that AHMSA's auction sale price "was not the fair market value of AHMSA because the highest bid did not win the auction.... [B]y considering promises of post-privatization investment, the GOM considered factors other than the fair market value of AHMSA.... [T]he highest bid selected was not the highest cash bid." General Issues Appendix, 58 Fed.Reg. at 37,264. The Domestic Producers explain to this Court, however, that their argument below "was made solely in response to the Mexican Producers' claim; the issue is not germane under [Commerce's] privatization/repayment methodology or Domestic Producer's [sic] position on the legal consequences of a change in ownership." (AK Steel Corp., et al., Answers to Ct.'s Questions at 3 n. 4). [17] In fact, in the General Issues Appendix, Commerce states that "[g]iven the Department's methodology, petitioners' and respondents' concerns regarding whether or not the sale of AHMSA was at a fair market price are irrelevant." General Issues Appendix, 58 Fed.Reg. at 37,264. [18] While one may argue that the new owner has received a commercial and/or competitive benefit because the opportunity to purchase the assets would not have existed but for the foreign government's organization and subsidization of the government-owned corporation, the Court notes Commerce has rejected this line of argument. In the General Issues Appendix, Commerce addressed party comments as follows: Petitioners have argued that subsidies cannot be expunged through privatization because the distortion created by past subsidization still continues (lives on) in the productive capacity of the company.... In their view such assets would not have existed except for the bestowal of subsidies. Therefore, privatization, because it cannot now re-allocate to their most efficient use the resources used in the past which created the capacity at issue, can have no effect on prior subsidies. The distortion continues even though a purchaser pays a market price, precisely because the excess capacity continues to exist in the company the day after privatization exactly as it did the day before. .... We disagree with petitioners' position. While the CVD law contains an irrebuttable presumption that subsidies bestow a competitive benefit upon the production of a company, it does not follow that the statute requires us to somehow "correct" market distortions which may have occurred due to the provision of subsidies, beyond countervailing the benefits received. The CVD law is designed to provide remedial relief as a result of subsidies; it is not intended to recreate the ex ante conditions that existed prior to the bestowal of such subsidies. ... The fact that the productive capacity may have been created or continues to exist is an irrelevant inquiry and beyond the scope of the law. General Issues Appendix, 58 Fed.Reg. at 37,264. [19] See infra note 34. [20] The purchaser cannot be the recipient of a subsidy because by paying fair market value for an asset or assets of a subsidized corporation the private purchaser does not receive "[t]he provision of capital, loans, or loan guarantees on terms inconsistent with commercial considerations," "[t]he provision of goods or services at preferential rates," "[t]he grant of funds or forgiveness of debt to cover operating losses sustained by a specific industry," "[t]he assumption of any costs or expenses of manufacture, production, or distribution," or any other commercial or competitive benefit constituting a subsidy. 19 U.S.C. § 1677(5)(A)(ii)(I)-(IV) (1988). It could be argued that in an arm's-length transaction a purchaser of one or several assets of a subsidized corporation could discount its purchase price for "subsidies liability under the CVD laws" and therefore the subsidies could be accounted for in this manner. Congress could have but did not authorize such a result. In fact, Congress does not appear to ever have considered it. Furthermore, it would seem such an approach would cause ponderous burdens upon the free flow of commerce. One can only contemplate the frustrations of subsequent bona fide purchasers for value as they negotiate to buy one or several assets, absent recording statutes, in trying to evaluate actual and/or inchoate CVD liabilities. What if the last owner did not trade with the United States but the new owner plans to do so? One can imagine valuation problems especially where there is no statutory guidance. Absent express congressional authorization this Court observes Commerce would be wise to avoid such an approach. [21] One could argue, however, that a subsidy, once bestowed upon a corporation, attaches to the assets of the corporation much like a lien or a mortgage. This way, when a purchaser buys a corporation's asset or assets, the countervailing duty liability could "travel" with that asset or assets. Thus, through its purchase, the purchaser has, in a sense, taken subject to or assumed the countervailing duty liability. Of course, mortgage liens, mechanic liens, vendor liens, and other such liens are authorized by statute. There is no statutory authorization for such treatment of CVD actual or inchoate liability. It would seem that such a mechanism would be extremely cumbersome and would impede the free flow of commercial activity. In any event, unless Congress chooses to enact such a statutory scheme, this Court will not allow Commerce, absent authority from Congress, to administratively create one. Therefore, this Court completely rejects such an analysis. [22] The Court notes that in a recent General Agreement on Tariffs and Trade (GATT) Panel ruling, the European Community argued a position consistent with the Court's analysis here. See United States Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in France, Germany and the United Kingdom: Report of the Panel ¶¶ 137-44 (Oct. 14, 1994) (GATT Panel Ruling). In that ruling, a GATT Panel examined Commerce's countervailing of United Engineering Steels Limited (UES), a joint venture company formed by British Steel Corporation (British Steel), a government-owned company, and Guest, Keen & Nettlefolds (GKN), a private company. Id. at ¶ 16. Both British Steel and GKN contributed "productive units," accounts receivables, cash, and inventories in return for shares in UES. Id. Commerce had determined a portion of subsidies received by British Steel prior to the formation of UES were attributable to UES because UES had acquired one of British Steel's "productive units." Id. ¶ 407 (quoting Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from the United Kingdom, 58 Fed.Reg. 6237, 6238-40 (Dep't Comm.) (final determ.)). The European Community (EC) argued in part that under the Preamble and Article 11 of GATT a benefit must be shown to exist to an entity before that entity could be considered to be subsidized.... The EC was of the view that ... the fact that UES had paid a market price for the assets in an arm's length transaction meant that UES did not benefit from the subsidies provided to the previous owner of the assets and thus precluded any possibility of a pass through of those subsidies to UES. A private company which paid market value to purchase an asset from a subsidized state-owned company had no competitive advantage over other companies. Id. at ¶ 413. The EC's general arguments concerning the purchase of a government-owned company's assets in an arm's-length transaction, as long as the sale is for fair market value based upon commercial considerations, are consistent with the Court's analysis in this opinion. The GATT Panel, however, made no pronouncements on whether the sale of a "productive unit" at market price precludes a "pass-through" of previously-bestowed subsidies. Id. at ¶ 427. Instead, the GATT Panel ultimately determined that because Commerce had not taken into account the purchase price paid by UES for the productive unit, Commerce's finding "of a `pass through' of subsidies from [British Steel] to UES was not a sufficient basis to support a finding, required under Article 1 of [GATT], that a subsidy was bestowed on the production of merchandise by UES." Id. at ¶ 429. [23] The Court notes the Foreign Producers' admission to this Court: "In a privatization, when the shares of a company are sold, the new shareholders then own all of the assets and liabilities of that company." (Resp'ts' Answers to Ct.'s Questions at 16). [24] The Court finds unpersuasive the Foreign Producers' argument that because a newly privatized corporation now has an obligation to provide shareholders with a return on their investments, the corporation is fundamentally different. The Court assumes neither private nor public shareholders desire corporations in which they hold stock to perform poorly or provide a low rate of return on corporate equity. Furthermore, the fact that one person or a group of persons owns common stock in a corporation does not by itself change the essence of the corporate entity. [25] For example, Commerce maintains that, Nothing in the statute requires Commerce to consider the actual use to which subsidies are put or their effect, i.e., the competitive benefit, on the recipient company's subsequent performance in order to find them countervailable. Rather, the statute requires Commerce to countervail an allocated share of the subsidies received by producers, regardless of their effect. (Def.'s Br. in Opp'n to Mots. for J. on R. at 27-28; see also id. at 14 ("[O]nce subsidies are identified and measured as of the date of bestowal, Commerce makes no attempt to ... try to determine what effect the subsidies have on the company. Nor does Commerce engage in an analysis of any alleged effects on a subsidy from a subsequent even, such as privatization.")). [26] The Court does note, however, the disingenuousness of Commerce's argument that it is not required to engage in an effects analysis such that "when a company is sold ... previously bestowed subsidies continue to be allocable to it." (Def.'s Br. in Opp'n to Mots. for J. on R. at 14). It is hard to imagine how any purchaser of assets only of a corporation could have anticipated "traveling subsidies" and the treatment by Commerce of privatization in general absent any prior notice by Commerce or any direction from Congress. [27] The Court notes that Commerce itself has advanced arguments before this Court on the general issue of grant methodology consistent with the Court's analysis here. Under that general issue, Commerce defended its abandonment of the rate of return shortfall (RORS) methodology used to calculate the benefits to an unequityworthy company that receives an equity infusion. In the General Issues Appendix, Commerce explained it abandoned RORS because "[f]inally, and perhaps most importantly, RORS implies a `cost to government' standard rather than a `benefit to recipient' standard." General Issues Appendix, 58 Fed.Reg. at 37,241. [28] a corporation which purchases the assets of another corporation does not thereby become liable for the selling corporation's obligations. Most courts have recognized four exceptions: (1) Where the successor expressly or impliedly assumes the liabilities of the predecessor; (2) Where the transaction is a de facto merger or consolidation; (3) Where the successor is a mere continuation of the predecessor (same shareholders, directors, and officers); and (4) Where the transaction is a fraudulent effort to avoid liabilities of the predecessor. Harry G. Henn & John R. Alexander, Laws of Corporations and Other Business Enterprises 967 (3d ed. 1983) (footnote omitted); see, e.g., Golden State Bottling Co. v. NLRB, 414 U.S. 168, 182 n. 5, 94 S. Ct. 414, 424 n. 5, 38 L. Ed. 2d 388 (1973) (citations omitted); Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1424 (7th Cir.1993) ("The general rule in Illinois as elsewhere is that the purchaser of assets does not acquire the seller's liabilities unless he agrees to do so.") (citations omitted); Seetransport Wiking Trader Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala, 989 F.2d 572, 580 (2nd Cir.1993) ("[T]he law in this country is clear that where one company transfers all its assets to another company, the latter is responsible for the debts and liabilities of the transferor if ... the transferee expressly or impliedly agrees to assume such debts or the purchasing corporation is merely a continuation of the transferor.") (citations omitted); Russell v. Sun-America Securities, Inc., 962 F.2d 1169, 1175-76 (5th Cir.1992) (citation omitted). [29] the liabilities always went with the assets, it would be difficult to sell assets because the purchaser would not know what he was getting. He might be "buying" a lawsuit the expected cost of which exceeded the value of the asset purchased, yet it would be too late for him to back out of the sale or renegotiate the price.... The rule permitting assets to be sold separately from liabilities is part of a large family of rules aimed at facilitating transactions by clearing clouds on titles. Chaveriat, 11 F.3d at 1424 (Posner, C.J.) (citation omitted); see Upholsterers' Int'l Union Pension Fund v. Artistic Furniture of Pontiac, 920 F.2d 1323, 1325-26 (7th Cir.1990) ("The general common law rule, designed to maximize fluidity of corporate assets, is that `a corporation that merely purchases for cash the assets of another corporation does not assume the seller corporation's liabilities.'") (emphasis added) (citation omitted). [30] For example, the Domestic Producers argued that, because the highest bid did not prevail in an auction of AHMSA, fair market value was not paid for AHMSA. General Issues Appendix, 58 Fed.Reg. at 37,264. The Foreign Producers contended that fair market value was paid. Id. In answering these comments, Commerce made no findings concerning the auction or other aspects of the privatization transaction. Instead, Commerce only answered as follows: As outlined above, we determine that some portion of the remaining subsidies received prior to privatization will be repaid through privatization (as long as the company is not given away). The methodology described above has been applied to all total and partial privatizations at issue in these investigations. Given the Department's methodology, petitioners' and respondents' concerns regarding whether or not the sale of AHMSA was at a fair market price are irrelevant. To the extent that the purchase price may have been lower than the offer made by a different bidder, correspondingly less of any pre-existing subsidies were repaid. Id. [31] Presumably the subsidy would stay with the shareholders on dissolution. See Saarstahl, 18 CIT at ___, 858 F.Supp. at 193. It would seem direction from Congress in this area would be helpful. Some obvious questions immediately present themselves. If the shareholders continue to do business in the United States in the steel or another industry, how should they be treated? How should the subsidy be measured? What provision is necessary to enable Commerce to effectively discover sham-type transactions? [32] Again, legislative guidance in this scenario is crucial. What if the government-owned corporation continues to exist, but no longer exports to the United States? Suppose the government-owned corporation indirectly supports other types of exports to the United States. Would special attribution rules be needed? [33] Another example of a situation in which Commerce may properly continue to countervail would be in the presumably unusual event of a subsidized public or private corporation donating the subsidized benefit to another commercial entity. Because the subsequent corporate entity did not pay monies worth for the benefit, the subsidy is not extinguished. Precisely how Commerce would implement its requirement to countervail is left to the expertise of that agency. [34] The Court notes that Congress has recently enacted legislation touching upon privatization issues discussed in this opinion. The relevant provision of the statutory implementation of the Uruguay Round states as follows: (F) CHANGE IN OWNERSHIP. A change in ownership of all or part of a foreign enterprise or the productive assets of a foreign enterprise does not by itself require a determination by the administering authority that a past countervailable subsidy received by the enterprise no longer continues to be countervailable, even if the change in ownership is accomplished through an arm's length transaction. Uruguay Round Agreements Act, Pub.L. No. 103-465, § 251(a), 108 Stat. 4809, 4903 (1994) (to be codified at 19 U.S.C. § 1677(5)(F)). The Court notes that this provision is consistent with the Court's analysis in this opinion. As discussed above, the mere change in ownership of a government-owned corporation, by itself, does not render subsidies non-countervailable that have been received antecedent to privatization. Similarly, it is correct that a sale at arm's length of an asset or assets of a subsidized corporation does not, by itself, render subsidies previously received non-countervailable. As discussed above, if a purchaser pays fair market value at arm's length and based upon commercial considerations for an asset or several assets of a subsidized corporation, none of the subsidies "travel" with the assets or several assets and the subsidy stays with the selling corporation. Commerce may continue to countervail the selling corporation that originally received the subsidy. The Court further notes that the intent of Congress as expressed in the legislative history of § 251(a) of the Uruguay Round Agreements Act is very consistent with the purport of this opinion. The legislative history explains that § 251(a) is being added to the Act to clarify that the sale of a firm at arm's-length does not automatically, and in all cases, extinguish any prior subsidies conferred. Absent this clarification, some might argue that all that would be required to eliminate any countervailing duty liability would be to sell subsidized productive assets to an unrelated party. Consequently, it is imperative that the implementing bill correct and prevent such an extreme interpretation. The issue of the privatization of a state-owned firm can be extremely complex and multifaceted. While it is the Committee's intent that Commerce retain the discretion to determine whether, and to what extent, the privatization of a government-owned firm eliminates any previously conferred countervailable subsidies, Commerce must exercise this discretion carefully through its consideration of the facts of each case and its determination of the appropriate methodology to be applied. H.R.Rep. No. 826, 103d Cong., 2d Sess., pt. 1, at 110 (1994), reprinted in 1994 U.S.C.C.A.N. 3773, 3882. [35] Presumably, if the only reason governments are structuring privatization transactions is to evade countervailing duties, and do so without commercial considerations, Commerce will look upon such transactions with disfavor. [36] In the Brazilian Final Determination, Commerce set forth the results of its investigation of three companies. Only the USIMINAS investigation, however, involved privatization issues. Therefore, only USIMINAS will be considered in the Court's discussion of privatization. [37] Commerce informs this Court that "[a]n exception to what was transferred from [British Steel] to BS plc were [sic] tax losses." (Def.'s Resp. to Ct.'s Questions at 11). Commerce indicates the record shows that British Steel's accumulated tax losses were reduced from £ 1.9 billion to a carried forward balance of approximately £ 171 million. (Id. at 11-12 (citations omitted)). [38] Under Commerce's discussion of government equity infusions into British Steel, Commerce did state that: A second capital reconstruction of [British Steel] tool place in 1988 in accordance with the British Steel Act of 1988. The purpose of this second reconstruction ... was to prepare [British Steel] for privatization by bringing it into a form appropriate for a Public Limited Company (i.e., "plc"). British Final Determination, 58 Fed.Reg. at 37,395. Without a clearer and more explicative statement concerning the entire privatization transaction, however, the Court cannot discern whether Commerce properly determined it could countervail BS plc for subsidies received by British Steel. [39] It appears from the papers submitted to this Court in regard to the motion for summary judgment in LTV Steel, Co., Inc. et al. v. United States, Consol.Court No. 93-09-00568-CVD, that once Commerce determined the subsidy benefits had passed through to DHS, Commerce allocated the benefits deemed received by DHS over the sales of its new subsidiaries, Saarstahl and Dillinger. See Def-Intervenors' Mot. for Summ. J. at 4, 6. In the case of Dillinger, the allocation was pursuant to the German Final Determination at issue here. See id. [40] In their response brief, the Foreign Producers did not answer the Domestic Producers' contentions concerning Commerce's application of its repayment methodology to the DHS-Dillinger-Saarstahl transaction. However, AG der Dillinger Hüttenwerke and Dillinger Hütte Saarstahl did submit answers to the Court's post-oral argument questions on the issue of privatization relevant to the dispute at issue. See generally Resp'ts' Answers to Ct.'s Questions. [41] If the "old" public corporation goes out of business and the "new" privatized corporation is going into business, should not Commerce seek to countervail all prior subsidies that were given? Are not those tariffs somehow lost? In light of the purposes of the CVD statutes, the answer to both questions would seem to be no. The intent of Congress has been given implementation. The "new" privatized entity has received no bounty or grant because it has paid full value for the assets it has received. The "old" entity will follow one of several routes. For example, if the "old" corporation is out of business it is not competing with the advantages of subsidies. If the "old" corporation continues to do business with the United States it will be countervailed for the subsidies it has received. It certainly can be argued that governments may endeavor to structure privatization transactions to avoid countervailing tariffs. Commerce, with its considerable expertise should have the ability to ferret out sham transactions. [42] See supra note 10 and accompanying text describing the nature of the General Issues Appendix. [43] In their papers, the parties also refer to the allocation methodology as an amortization methodology. In this opinion, the Court refers to the allocation methodology as a method employed by Commerce to allocate over time the benefits flowing from nonrecurring subsidies. [44] Commerce amended the French Final Determination on August 17, 1993. See Certain Steel Products from France, 58 Fed.Reg. 43,759 (Dep't Comm.1993) (order and am. final determ.). [45] Commerce amended the British Final Determination on August 17, 1993. See Certain Steel Products from the United Kingdom, 58 Fed.Reg. 43,748 (Dep't Comm.1993) (order and am. final determ.). [46] Rev.Proc. 77-10, 1977-1 C.B. 548, superseded by Rev.Proc. 83-35, 1983-1 C.B. 745, made obsolete by Rev.Proc. 87-56, 1987-2 C.B. 674. [47] Thomas Koerner, U.S. Department of the Treasury, The Steel Industry: A Study of Factors Affecting Prescribed Capital Cost Recovery Allowances of Steel Industry Equipment (1977); Office of Industrial Economics, U.S. Department of the Treasury, The Steel Industry: A Supplemental Addendum Report to the OIE Study of the Steel Industry of October 1977 (1979). [48] The Ipsco cases also emphasize Commerce had not "promulgated a regulation regarding allocation of subsidy benefits used for the purchase of capital assets that incorporates the IRS tables." Ipsco II, 12 CIT at 1132, 701 F. Supp. at 240. In the absence of such a regulation, "ITA must explain the basis for its decision based on the facts of [the] case." Ipsco I, 12 CIT at 372, 687 F. Supp. at 626. In addition, because Commerce had not followed the rule-making procedures prescribed by the Administrative Procedures Act (APA) in 5 U.S.C. § 553 (1982), the Ipsco II Court concluded the agency could not properly rely on the "rate rule" reflecting the IRS tables. Ipsco II, 12 CIT at 1132, 701 F. Supp. at 240. The Court considers the provisions set forth in the Proposed Regulations, except where Commerce has indicated otherwise, as statements of the agency's position with respect to the matters addressed in the provisions. See Proposed Regulations, 54 Fed.Reg. at 23,366 (indicating the ITA proposes to establish "regulations codifying the methodology used to determine the existence and value of countervailable subsidies"). Because the agency has not yet published the provisions contained in the Proposed Regulations in a final form pursuant to the APA, 5 U.S.C. § 553 (1988), the Court does not regard the provisions as a codification of the agency's practice, but rather as merely published notice of its intent to codify those provisions. See Ipsco II, 12 CIT at 1131, 701 F. Supp. at 239 ("ITA has the power to enact rules, but when doing so must meet the guidelines of the APA as set out in 5 U.S.C. 553 [sic] (1982)."). Consequently, this Court will consider whether the agency based its decision on the facts presented in these particular cases. See Ipsco I, 12 CIT at 372, 687 F. Supp. at 626 ("ITA must explain the basis for its decision based on the facts of [the] case" in the absence of a promulgated final regulation). Because Commerce has not yet promulgated final regulations with regard to its allocation methodology, this Court does not regard the agency's use of the IRS tables in these cases as the application of a firm rule. Ipsco II, 12 CIT at 1132, 701 F. Supp. at 240. The Court, therefore, must consider the evidentiary basis supporting Commerce's decision to use the IRS tax tables. [49] In light of Commerce's and defendant-intervenors' assertion that Commerce's methodology is consistent with the GATT Guidelines on Amortization and Depreciation GATT Doc. No. SCM/64 (July 11, 1985), see Def.'s Br. at 9 n. 11, Def.-Intervenors' Br. at 14 n. 40, it is instructive to note a recent GATT Panel Ruling declaring Commerce's 15-year allocation methodology in violation of the GATT Guidelines. See United States Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in France, Germany and the United Kingdom: Report of the Panel, ¶ 632 (Oct. 14, 1994). The Panel found Commerce's "reasoning was insufficient for the Panel to conclude that a 15 year period for the average useful life of assets was reasonable for the firms being investigated." Id. The Panel also noted Commerce failed to respond to respondents' argument that the IRS tables were outdated despite Commerce's admission of the same in the preamble to the Proposed Regulations. Id. at ¶ 629 (citing Proposed Regulations, 54 Fed.Reg. at 23,377 ("Although the IRS tables provide consistency and predictability, the Department is concerned that those tables are dated.")). [50] There is no mention in the General Issues Appendix, the final determinations under review, or Commerce's papers of the "analysis of data" the agency purports to have undertaken. Although defendant-intervenors provide some evidence on the record discussing the average amortization periods for British Steel, see Def.-Intervenors' Br.App. Tab 3, Commerce provides only the bare statement that "analysis of data ... from the annual reports ... demonstrates that 15 years is a reasonable estimate." General Issues Appendix, 58 Fed.Reg. at 37,230. Evidence on the record as to how the agency performed its analysis is sorely lacking. [51] Defendant-Intervenors argue this Court upheld the central assumption of Commerce's methodology by holding in Ipsco III that "amortizing grants over the average useful life of renewable physical assets is an acceptable methodology when based on record evidence." (Def.-Intervenors' Br. at 13 (citing Ipsco III, 13 CIT at 337, 710 F. Supp. at 1584) (emphasis added); see id. at 15). Ipsco III's holding is of little use here as the allocation methodology reviewed in that case was based on "data taken from Ipsco's 1984 Annual Report" that allowed Commerce to calculate the average depreciation period by "subtracting from the total value of [Ipsco's] replaceable physical assets the value of construction in progress ... and then divid[ing] this result by the net depreciation charged during the year." Ipsco III, 13 CIT at 335-36, 710 F. Supp. at 1582. Commerce provides no evidence that it invoked a comparable analysis in these cases. In the methodology under review, Commerce simply used the IRS tax tables as a proxy to measure the benefit of the subsidies and does not appear to have examined record evidence to develop a methodology to "`accurately reflect the commercial and competitive benefit'" received by the firms under investigation. See id. at 335, 710 F. Supp. at 1582 (citing Ipsco II). As stated by the Court in Ipsco III, Commerce must "utilize[] information of record in applying its chosen methodology." Id. at 337, 710 F. Supp. at 1584. [52] Thomas Koerner, U.S. Department of the Treasury, The Steel Industry: A Study of Factors Affecting Prescribed Capital Cost Recovery Allowances of Steel Industry Equipment (1977). [53] Mr. A. David Lafer, arguing for Commerce, stressed that the Treasury study supported the agency's use of the allocation methodology under review: COURT: So, what you're saying to me ... is that you're dealing with, I think you used the word "proxy" or "surrogate" vehicle, meaning the depreciable assets, and you're using that as your measure, and the competitive and commercial advantage is reflected in the depreciation schedules which were developed by the United States Internal Revenue Service, MR. LAFER: Correct. COURT: and the Internal Revenue Service developed those depreciation schedules after having made a study of the steel industry, certainly domestically, and possibly beyond that, as to the useful life of assets for depreciation purposes. Is that right? MR. LAFER: Could not have said it better, Your Honor. COURT: You did say it. I just wanted to understand what your position is. MR. LAFER: Precisely. .... MR. LAFER: And, specifically, it is this study, which buttresses the Agency's conclusion that ... utilizing ... the useful life of depreciable assets is a reasonable method of allocating non-recurring grants. (Tr. at 319-20). [54] As explained by plaintiffs, Commerce has stated that its rationale flows from the fact that "if the assets are not renewed, operations would cease." The undeniable necessity of renewing assets, however, bears no logical relationship to the duration of benefits from fungible subsidy funds, which are available for all corporate activities, both long- and short-term. In other words, the fact that renewable physical assets may last for fifteen years does not provide a basis for presuming that subsidy benefits will last that long. (Pls.' Reply Br. at 9 (citing Pls.' Br. at 9-10 and Certain Hot Rolled Lead and Bismuth Carbon Steel Products for the United Kingdom, 58 Fed. Reg. 6237, 6240 (Dep't Comm.1993) (final determ.) ("The subsidies provided to a company presumably are utilized to finance operations and investments in the entire company....") (additional footnote omitted))); see Pls.' Br. at 15-16 (discussing the wide range of uses of subsidy funds). [55] Although plaintiffs have put forth several alternative allocation approaches it recommends Commerce employ in place of the current methodology, see Pls.' Br. at 16-17; Pls.' Reply Br. at 12-13, and both Commerce and defendant-intervenors challenge such alternatives, see Def.'s Br. at 10-11; Def.-Intervenors' Br. at 19-23, the Court declines to entertain a discussion of alternative methodologies. See Wheatland Tube Corp. v. United States, 17 CIT ___, ___, 841 F. Supp. 1222, 1234 (1993) ("Commerce has broad discretion to choose a methodology to satisfy the statutory mandate."); Hercules, Inc. v. United States, 11 CIT 710, 726, 673 F. Supp. 454, 469 (1987) ("[This C]ourt may not substitute its judgment for that of [Commerce] when the choice is between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.") (quoting Penntech Papers, Inc. v. NLRB, 706 F.2d 18, 22 (1st Cir.), cert. denied, 464 U.S. 892, 104 S. Ct. 237, 78 L. Ed. 2d 228 (1983)) (internal quotations omitted). [56] It seems evident that where Commerce investigates a noncapital intensive industry, the agency might choose to employ a proxy other than the IRS tax tables. Whatever form that proxy might take Commerce must examine the commercial and competitive factors, which when taken into account with the proxy adopted, reflect the commercial and competitive advantages enjoyed by the firms receiving the nonrecurring subsidies in question. [57] See supra note 10 and accompanying text describing the nature of the General Issues Appendix. [58] Commerce amended the Korean Final Determination on August 17, 1993. See Certain Steel Products from Korea, 58 Fed.Reg. 43,752 (Dep't Comm.1993) (orders and am. final determ.). [59] Commerce amended the Brazilian Final Determination on August 17, 1993. See Certain Steel Products from Brazil, 58 Fed.Reg. 43,751 (Dep't Comm.1993) (order and am. final determ.). [60] Commerce amended the French Final Determination on August 17, 1993. See Certain Steel Products from France, 58 Fed.Reg. 43,759 (Dep't Comm.1993) (order and am. final determ.). [61] See, e.g., Certain Steel Products from Belgium, 47 Fed.Reg. 39,304, 39,319 (Dep't Comm.1982) (final determ.) (adopting RORS methodology); Certain Hot Rolled Lead and Bismuth Carbon Steel Products from the United Kingdom, 58 Fed. Reg. 6237, 6241-42 (Dep't Comm.1993) (final determ.) (Hot Rolled Lead from U.K.) (adopting grant methodology). [62] The grant methodology is used only when a company receiving an equity infusion does not have a market benchmark by which to measure any countervailable benefit. See General Issues Appendix, 58 Fed.Reg. at 37,239 (The grant methodology is "intended for use only when the company in question does not have a market benchmark by which to measure any countervailable benefit, i.e., a publicly-traded price or an infusion by a private investor at the time of the government's infusion."); see also Pls.' Br. at 9 n. 9 ("This brief will not addresses [sic] the Department's methodology where a market price for the shares is available."). [63] In their papers, plaintiffs challenge Commerce's equityworthiness determination as it is employed in the new grant methodology, (Pls.' Br. at 35-42), and the interpretation of the equityworthiness determination in the context of the grant methodology, (Pls.' Br. at 42-46). Plaintiffs do not, however, "challenge the reasonableness of the Department's equityworthiness determinations per se," nor do plaintiffs address "any issues related to the Department's actual calculations in applying the grant methodology." (Pls.' Br. at 3 n. 3). Commerce and defendant-intervenors apparently concur. (Def.'s Br. at 16; Def.-Intervenors' Br. at 3). Presumably, such issues may be raised in subsequent country-specific proceedings. See Pls.' Br. at 3 n. 3. In addition, at oral argument counsel for plaintiffs, Commerce, and defendant-intervenors described the issue under review solely as the grant methodology. Counsel for plaintiffs stated at oral argument: "I do not quarrel with an equityworthiness determination that's based on an analysis of whether a reasonable investor would have invested in a company. That's not the issue here today." (Tr. at 444). Commerce's counsel informed the Court: "Plaintiffs have not challenged ... the un-equityworthy [sic] finding of the Commerce Department. Consequently, there's no contest that the subsidy was provided. This is solely a challenge to the valuation of that subsidy." (Id. at 414). Counsel for defendant-intervenors explained, "the issue is the reasonableness of the Department's grant methodology ... as applied to countervailable equity infusions. That is the only issue before the Court." (Id. at 422). Therefore, it is the Court's understanding that Commerce's equityworthiness test is not under review. [64] Commerce cites several sources to demonstrate Commerce "thoroughly considered and explained on the record" its rejection of RORS. (Def.'s Br. at 33; see id. at 35-36 (citing ITA Equity Infusions Memo, reprinted in Def's Br. App. Tab 2; Memorandum from Joseph A. Spetrini, Acting Assistant Secretary for Import Administration to ITA Staff, Equity Infusions Section of the General Issues Appendix (stamped June 21, 1993), reprinted in Def.'s App. Tab 1; Alan F. Holmer, Susan A. Haggerty, and William D. Hunter, Identifying and Measuring Subsidies under the Countervailing Duty Law: An Attempt at Synthesis, in The Commerce Department Speaks 310, 443-45, 558 n. 165 (1984))). [65] In its analysis, defendant-intervenors appear to equate the determination under the equityworthiness test that a "reasonable investor" would not invest in the firm to a finding that the firm could attract no capital. (Def.-Intervenors' Br. at 14-15). At oral argument and in their briefs, plaintiffs challenge this aspect of the determination and allege Commerce impermissibly changed its equityworthiness test by moving from an examination of whether a reasonable investor would invest in the company to an examination of whether any investor would invest. (Tr. at 402-08; Pls.' Br. at 36-37; Pls.' Reply at 23-26, 33). Plaintiffs argue Commerce "changed [its] equityworthiness test here and they haven't admitted to it." (Tr. at 407). As discussed above, however, plaintiffs inform this Court that they do not challenge the equityworthiness test per se as a general issue in this joint proceeding. See supra note 63. [66] "We considered several methodologies offered by interested parties and generated internally (For a complete discussion of those options, see [ITA Equity Infusions Memo at 8, reprinted in Def.'s App. Tab 2])." General Issues Appendix, 58 Fed.Reg. at 37,239. [67] See supra note 10 and accompanying text describing the nature of the General Issues Appendix. [68] Commerce amended the French Final Determination on August 17, 1993. See Certain Steel Products from France, 58 Fed.Reg. 43,759 (Dep't Comm.1993) (order and am. final determ.). [69] Commerce amended the British Final Determination on August 17, 1993. See Certain Steel Products from the United Kingdom, 58 Fed.Reg. 43,748 (Dep't Comm.1993) (order and am. final determ.). [70] Commerce cites to several final determinations including Carbon Steel Buttweld Pipe Fittings from Thailand, 55 Fed.Reg. 1695, 1697 (Dep't Comm. 1990) (final determ.) and New Steel Rail, Except Light Rail, from Canada, 54 Fed. Reg. 31,991, 31,994 (Dep't Comm.1989) (final determ.). (Def.'s Br. at 37 n. 25 (other citations omitted)). [71] Prior to France Bismuth, Commerce made two exceptions to the general principle of the fungibility of money: (1) where a domestic subsidy is tied to a particular product or products; and (2) where an export subsidy is tied to a particular market. General Issues Appendix, 58 Fed.Reg. at 37,234 (citing Proposed Regulations, 54 Fed.Reg. at 23,383-84 (to be codified at 19 C.F.R. § 355.47(a), (b))). [72] Judicial notice permits a court to admit certain facts into evidence without the usual requirements of proof when those facts are "not subject to reasonable dispute" either because such facts are generally known (e.g., the sun rises in the east) or because they are readily verifiable by reliable sources (e.g., at sea level water boils at 212° F). See generally Christopher B. Mueller & Laird C. Kirkpatrick, Federal Evidence § 51 at 266 (2nd ed. 1994) (discussing Fed.R.Evid. 201(b)(2)). The Hewitt affidavit, two textbooks, and the agency document challenged here are not proper subjects for judicial notice because they contain assertions of fact that are neither generally known nor readily verifiable. [73] Commerce amended the Korean Final Determination on August 17, 1993. See Certain Steel Products from Korea, 58 Fed.Reg. 43,752 (Dep't Comm.1993) (orders and am. final determ.). [74] The Korea Development Bank Act created the KDB in 1954 "with capital wholly subscribed by the government." Korean Final Determination, 58 Fed.Reg. at 37,340. [75] Commerce explained: The benefit we have identified relates to preferential access to specific sources of credit. It is not access to credit per se, but the relative access to those long-term credit markets that offer favorable interest rates compared with the rates prevailing in other long-term credit markets. In the case of domestically available loans, the more favorable credit markets are those that offer government-regulated interest rates. The more favorable credit markets for long-term foreign currency loans are those that offer loans from foreign banks at world market rates.... The existence of more favorable and less favorable credit markets is to a large extent the result of actions taken by the GOK. The dichotomy in the interest rates among the various credit markets in Korea has created excess demand for loans in the more favorable credit markets. The competition for access to these favorable credit markets means that while some industries may have complete access to the favorable markets, others will be locked out either partially or completely from them. Korean Final Determination, 58 Fed.Reg. at 37,345. [76] Commerce explained: "[T]he iron and steel industry has received approximately 60 percent of all direct foreign loans to the manufacturing sector since 1985, and over 40 percent of all direct foreign loans to all industries since this time." Korean Final Determination, 58 Fed.Reg. at 37,344. [77] The Court notes Commerce appears to have acknowledged the need for a link in the Korean Final Determination. In its specificity analysis, Commerce reasoned: [I]f the lending patterns to the steel industry have not changed since the HCI drive, i.e., if the GOK continued to target the steel industry for government-controlled long-term loans during the POI, a finding of de facto specificity may be made, if the steel industry receives a disproportionate share of the benefits. Korean Final Determination, 58 Fed.Reg. at 37,343 (emphasis added). While Commerce did analyze "if the steel industry receiv[ed] a disproportionate share" of access to loans, Commerce did not explicate in the Korean Final Determination what evidence would support the conclusion that "the GOK continued to target the steel industry for government-controlled long-term loans." Commerce further fails to explain or demonstrate that merely because the respondent steel companies appear to have extensive loan access ability, that fact is attributable to a GOK loan program and not other factors based on commercial considerations such as economic expansion or other reasons not associated with the GOK. [78] Commerce has clearly shown, however, that the GOK controls the Korean financial system. That control is extensive and pervasive. Commerce has shown, furthermore, that the respondent steel companies have a large share of the loans and access to credit when analyzed using GDP as a measuring device. Commerce has further demonstrated that the respondent steel companies have a slightly greater percentage of loans since the de jure program was terminated. [79] The Court notes Commerce determined that POSCO was unequityworthy during 1978 and 1980. See Korean Final Determination, 58 Fed. Reg. at 37,339. In the present opinion, this Court has sustained Commerce's use of the grant methodology to countervail equity infusions into unequityworthy companies as applied in the Korean Final Determination. See supra Section Three: The Grant Methodology. The Court has not, however, ruled upon the question of whether Commerce properly determined that POSCO was unequityworthy. See supra note 63 and accompanying text. [80] The Court notes that the parties have not specifically addressed the issue of specificity with regard to access to direct foreign loans. See, e.g., Tr. at 750 (In response to the Court's question "[D]omestic loans, and that's all I'm dealing with in this case," counsel for the Domestic Producers responded, "Yes. We don't believe that there's really any serious challenge to the foreign loans."); see generally Pls./Def-Intervenors' R. 56.2 Br. (challenging Commerce's use of GDP in relation to disproportionality and arguing that substantial evidence on the record demonstrates long-term loans were not in fact disproportionately supplied to the Korean steel industry). However, in their motion for partial judgment on the agency record, the Korean Respondents ask this Court to declare the Korean Final Determination unlawful, void, and of no effect, and to remand that determination "with respect to the issue of ... Commerce's treatment of disproportionality for the purpose of evaluating the specificity of a potentially countervailable program." (Mot. of Pls./Def.-Intervenors for Partial J. on the R. at 2). The Court has concluded that just as Commerce has failed to show a nexus in regard to favorable domestic credit markets access, it has similarly failed to show a nexus with regard to foreign credit markets access. Accordingly, this Court has ordered a remand on the issue of specificity with regard to foreign credit market access as well. [81] The Court notes that Commerce's proposed regulations pertaining to the determination of whether benefits are specific, see Proposed Regulations, 54 Fed.Reg. at 23,379 (1989) (to be codified at 19 C.F.R. § 355.43(b)(2)), have recently been codified in the statutory implementation of the Uruguay Round as follows: (iii) Where there are reasons to believe that a subsidy may be specific as a matter of fact, the subsidy is specific if one or more of the following factors exist: (I) The actual recipients of the subsidy, whether considered on an enterprise or industry basis, are limited in number. (II) An enterprise or industry is a predominant user of the subsidy. (III) An enterprise or industry receives a disproportionately large amount of the subsidy. (IV) The manner in which the authority providing the subsidy has exercised discretion in the decision to grant the subsidy indicates that an enterprise or industry is favored over others. In evaluating the factors set forth in subclauses (I), (II), (III), and (IV), the administering authority shall take into account the extent of diversification of economic activities within the jurisdiction of the authority providing the subsidy, and the length of time during which the subsidy program has been in operation. Uruguay Round Agreements Act, Pub.L. No. 103-465, § 251(a), 108 Stat. 4809, 4904 (1994) (to be codified 19 U.S.C. § 1677(5)(A)(D)(iii)). The Court notes that even if these provisions were in force at the time relevant to the present case, this fact would not alter the Court's decision because Commerce has failed to point to evidence on the record to permit the Court to conclude there is substantial evidence in the record taken together with analysis by Commerce to support a conclusion by Commerce that the GOK program bestowed industry-specific benefits on respondent steel companies.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264480/	879 F. Supp. 878 (1995) AMGEN INC., Plaintiff, v. KIDNEY CENTER OF DELAWARE COUNTY, LTD., Defendant. No. 94 CV 7135. United States District Court, N.D. Illinois, Eastern Division. March 22, 1995. 879 Richard J. Prendergast, Joseph E. Tighe, Richard J. Prendergast, Ltd., William J. Harte, William J. Harte, Ltd., Chicago, IL, William M. Shields, Monteverde & Hemphill, Philadelphia, PA, Gerald T. McLaughlin, Cooley, Godward, Castro, Huddleson & Tatum, Palo Alto, CA, for petitioner. Jeffrey D. Colman, Jenner & Block, Chicago, IL, Michael G. Tierce, Schnader, Harrison, Segal & Lewis, Philadelphia, PA, for respondent. MEMORANDUM OPINION AND ORDER GETTLEMAN, District Judge. Plaintiff Amgen Inc. and Ortho Pharmaceutical Corp. have been involved in arbitration proceedings in Chicago since 1989. The Honorable Frank J. McGarr, former chief judge of this court, has acted as arbitrator throughout those proceedings. There have been two extended trials, and a third trial is scheduled to commence in May 1995. In connection with the arbitration proceedings, and as part of the preparation for the scheduled May 1995 trial, Judge McGarr determined 880 that certain documents and information in possession of third persons not parties to the arbitration proceedings were relevant. He issued a subpoena to Kidney Center of Delaware County, Ltd. ("KCDC," the defendant in this action) to produce documents and a representative to testify at a deposition for use in the arbitration. Amgen served KCDC with the subpoena in the same manner as a subpoena under the Federal Rules of Civil Procedure as required by the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq. KCDC refused to honor the subpoena, and instead submitted objections to Judge McGarr, arguing that the arbitrator did not have authority to issue the subpoena and that the documents sought were confidential. Judge McGarr determined that he did have authority to issue the subpoena under the FAA, and ordered the documents produced pursuant to a protective order. KCDC again refused to comply, and on September 8, 1994, Amgen filed a motion in the United States District Court for the Eastern District of Pennsylvania (the district in which KCDC is located and where the deposition was to take place) to compel compliance. KCDC opposed the motion on several grounds, including that Amgen had petitioned the wrong court for relief. The court determined that pursuant to Section VII of the FAA, Amgen was required to file its petition for relief in the court in the district in which the arbitrator is located and, therefore, transferred the action to this court. Amgen has once again moved to compel production. KCDC has opposed, arguing that under the FAA the arbitrator has no authority to subpoena persons who are located outside of the district in which he sits or beyond 100 miles of the site of the arbitration. For the reasons set forth below, the court grants Amgen's motion to compel compliance with the arbitrator's subpoena. DISCUSSION Section VII of the FAA, 9 U.S.C. § 7, provides in part: The arbitrators selected either as prescribed in this title or otherwise, or a majority of them, may summon in writing any person to attend before them or any of them as a witness in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case. The fees for such attendance shall be the same as the fees for witnesses before masters of the United States courts. Said summons shall issue in the name of the arbitrator or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a majority of them, and shall be directed to the said person and shall be served in the same manner as subpoenas to appear and testify before the court;.... While the statute appears to allow an arbitrator to summon a third person only to testify at trial, as opposed to a pretrial discovery deposition, courts have held (and KCDC has not disputed) that implicit in the power to compel testimony and documents for purpose of a hearing is the lessor power to compel such testimony and documents for purposes prior to hearing. Meadows Indemnity Co., Ltd. v. Nutmeg Insurance Co., 157 F.R.D. 42 (M.D.Tenn.1994) (citing Stanton v. Paine Webber Jackson & Curtis, 685 F. Supp. 1241 (S.D.Fla.1988)). Nor has KCDC argued that it is not subject to a summons[1] because it is not a party to the arbitration, for the statute is specific that any person (not just parties) may be so summoned. See, e.g., Meadows, 157 F.R.D. at 43. What KCDC does argue, despite the "any person" language, is that there is a territorial limitation to the arbitrator's power to summon any person before him. In contrast, Amgen argues that "any person" means just what it says, and relies upon that language in arguing that this court should determine that Judge McGarr's subpoena is enforceable and compel KCDC to produce the documents and attend the deposition. According to Amgen, the plain language of the statute is clear: "any person" may be summoned. The statute, according to Amgen, clearly contains no territorial limits on the scope of an arbitrator's authority 881 to summon third parties to appear and provide evidence at arbitration or in pretrial discovery.[2] Amgen maintains that any territorial limitation would have to be implied, which would be improper given the clarity and the plain wording of the statute. See Estate of Cowser v. Commissioner of Internal Revenue, 736 F.2d 1168, 1171 (7th Cir. 1984). In response, KCDC argues that the subpoena issued by Judge McGarr is void ab initio because he lacked power to issue it. Specifically, KCDC argues that an arbitrator's subpoena power reaches only as far as the subpoena power of the district court in which the arbitration is pending. Because a federal district court's subpoena power encompasses only the district in which the court sits or extends 100 miles from the courthouse, Fed.R.Civ.P. 45, KCDC argues that an arbitrator may compel only the attendance of witnesses (and the attendant production of documents) found within the district in which the arbitration is being conducted, or within 100 miles of the site of the arbitration proceeding. To support this argument, KCDC cites Commercial Solvents Corp. v. Louisiana Liquid Fertilizer Co., 20 F.R.D. 359, 362-63 (S.D.N.Y.1957). Commercial Solvents, however, did not hold that arbitrators could not compel the attendance of witnesses who are not within the district or within 100 miles of the place of the hearing; it merely suggested that "perhaps" they could not. Id. at 362-63. The holding in Commercial Solvents was that for matters of procedure relating to hearings before arbitrators, the court refers not to the Federal Rules of Civil Procedure, but to the rules pursuant to which the parties had agreed to arbitrate. Id. In the instant case, however, the parties have agreed to arbitrate pursuant to the Federal Rules of Civil Procedure and, therefore, Commercial Solvents is of little guidance. In this court's view, the issue is not whether the arbitrator has the power to issue the subpoena in question, for the statute is specific in stating that the arbitrator may summon any person. There is no territorial limitation on that ability. The issue is how (or perhaps if) that subpoena can be enforced. Couched in these terms, the issue, as far as this court can ascertain, is novel. Aside from the District Court for the Eastern District of Pennsylvania which transferred the case here, and a Florida court in a companion matter[3] this court is aware of no cases which have dealt directly with this particular issue. The court writes, therefore, with a clean slate, but not without guidance. Interpretation of any statute begins with the language of the statute itself. If the wording is unambiguous, the court must enforce the congressional intent embodied by the statute. Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188 (7th Cir.1993). The procedure for enforcement of an arbitrator's subpoena is also set forth in Section VII of the FAA, 9 U.S.C. § 7, which provides in relevant part: [If] any person or persons so summoned to testify shall refuse or neglect to obey such summons, upon petition to the United States District Court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States. Thus, it is clear, as the Florida and Pennsylvania courts held, that any petition to enforce the subpoena must be brought to this court, because the arbitrator is located in Chicago. Under the statute this court may compel KCDC's attendance (or punish 882 KCDC for failure to attend) in the same manner that it would secure the attendance of any witness in this court. Id. The problem arises because of the difference in the way the Federal Rules provide for the issuance of subpoenas for depositions and for trial. Under Fed.R.Civ.P. 45(a)(2), a subpoena commanding attendance at trial shall issue from the court for the district in which the trial is to be held, while a subpoena for attendance at a deposition shall issue from the court for the district designated by the notice of deposition as the district in which the deposition is to be taken. In the instant case, the deposition is to be taken in the Eastern District of Pennsylvania. That court, however, correctly refused to issue a subpoena because under Section VII of the FAA only this court can determine the enforceability of the arbitrator's subpoena. KCDC argues that because of the incompatibility of the wording of Section VII of the FAA and Fed.R.Civ.P. 45, it simply is not subject to the subpoena power of the arbitrator at all. In essence, it argues that a gap in the law exists, and that it has slipped through that gap. Thus, under KCDC's view, only this court can enforce the arbitrator's subpoena, but this court cannot compel KCDC to attend depositions scheduled in the Eastern District of Pennsylvania. Amgen, on the other hand, argues that the territorial limits of a district court's subpoena do not apply to an arbitrator's subpoena. Amgen suggests that a witness who refuses to comply with an arbitrator's summons or subpoena can and must be brought before the court in the district in which the arbitration is pending, regardless of where the witness resides. Amgen does not explain how this Court can accomplish that feat, however, when its subpoena power is subject to the territorial limits of Fed.R.Civ.P. 45(b)(2), which provides that a subpoena "may be served at any place within the district of the court by which it is issued, or any place without the district that is within 100 miles of the place where the trial ... is to take place." The court disagrees with both parties' positions. KCDC's argument is unavailing because it leaves a gap in the law, which is contrary to Congressional intent, and unnecessary. By definition, the FAA applies only to actions involving interstate commerce, 9 U.S.C. § 2; indeed, the Act itself is based on congressional power to regulate interstate commerce. Seymour v. Gloria Jean's Coffee Bean Franchising Corp., 732 F. Supp. 988 (D.Minn.1990). By enacting the FAA, Congress declared a national policy favoring arbitration. Perry v. Thomas, 482 U.S. 483, 107 S. Ct. 2520, 96 L. Ed. 2d 426 (1987). The arbitration of any action affecting interstate commerce is likely to involve parties and witnesses located in more than one district or state. To find that the wording of the FAA precludes issuance and enforcement of an arbitrator's subpoena of a witness outside the district in which he or she sits, particularly where, as here, such discovery is agreed upon by the parties to the arbitration, would likely lead to rejection of arbitration clauses altogether. That would be contrary to the intent of Congress in enacting a national policy favoring arbitration. Amgen's position is equally unavailing. It suggests that Section VII of the FAA gives the court the power to order any person, no matter where he or she may be located or resides, to appear before the arbitrator (or at least appear for a deposition), but, once again, although the Act allows the arbitrator to subpoena anyone, it also provides that this court may enforce the arbitrator's subpoena only in the same manner that it would compel attendance before the court. This, of course, is done according to Fed. R.Civ.P. 45, which does not provide the court with any extraterritorial power. Rule 45 does provide that "[w]hen a statute of the United States provides therefor, the court, upon proper application and cause shown, may authorize the service of a subpoena at any other place," but those statutes providing for extraterritorial service do so explicitly. For example, the Commerce and Trade Act provides: "In any suit, action or proceeding brought by or on behalf of the United States subpoenas for witnesses who are required to attend a court of the United States in any judicial district in any case, *883 civil or criminal, arising out of the antitrust laws may run into any other district; Provided, that in civil cases no writ of subpoena shall issue for witnesses living out of the district in which the court is held at a greater distance than 100 miles from the place of holding the same without the permission of the trial court being first had upon proper application and cause shown." 15 U.S.C. § 23 (1914); see also the Veteran's Benefits Act, 38 U.S.C. § 1984(c). The FAA contains no such provision and, therefore, the court concludes that Section VII does not provide for extraterritorial service or extra-territorial enforcement. Having rejected both parties' positions, the court nonetheless concludes that the arbitrator's subpoena is both valid and enforceable. Ortho and Amgen agreed to arbitrate their dispute pursuant to the Federal Rules of Civil Procedure. By so doing, they agreed to the liberal discovery allowed by those rules, and agreed that Judge McGarr in essence would act as and with the power of a judge applying those rules. Those rules (which were adopted well after the enactment of the FAA) contemplate and provide both for a mechanism for nationwide discovery, and preserving the testimony of witnesses unavailable at trial because they are outside the district, by use of evidence depositions. Under Fed.R.Civ.P. 45(a)(3)(B), an attorney authorized to practice in the court in which the trial is being held may issue and sign a subpoena on behalf of a court for a district in which a deposition or production is to take place. The subpoena has the case name and number of the case pending before the court where trial is to take place. It is enforced, however, by the district court for the district in which the deposition is to take place. That is precisely what Amgen attempted to do when it petitioned the court in the Eastern District of Pennsylvania for enforcement. That court, because of the wording of the FAA, could not enforce an arbitrator's subpoena. It can, however, enforce a subpoena issued by Amgen's attorney with the name and number of a case pending before this court. Because this court concludes that the arbitrator's subpoena is enforceable, it directs Amgen's attorney to issue a subpoena to KCDC under this case name and number as set forth in Fed. R.Civ.P. 45(a)(3)(B). CONCLUSION The court concludes that the arbitrator's subpoena is valid and enforceable in the manner set forth above. Amgen's motion to compel compliance is, therefore, granted. This case will remain pending until KCDC has complied with the subpoena. The parties are directed to inform the court when that has been accomplished. NOTES [1] It appears for purposes of applying the FAA that the term "summons" is used to refer to what should be referred to as a "subpoena" under the Federal Rules of Civil Procedure. [2] Ortho and Amgen have agreed to arbitrate pursuant to the Federal Rules of Civil Procedure and, therefore, have agreed to the liberal discovery allowed under those rules. [3] The arbitrator also issued a summons to IV-One Service, a company located in the Middle District of Florida. IV-One Service also challenged the summons and the Florida district court, taking its cue from the Pennsylvania court, also held that only this court can enforce the arbitrator's summons. Thus, the district court in Florida did not reach the present issue.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264446/	879 F.Supp. 889 (1994) Richard & Heddy WILLIS, Plaintiffs, v. UNITED STATES of America, Defendant. No. 93-1027. United States District Court, C.D. Illinois, Peoria Division. September 14, 1994. 890 Robert G. Day, Jr., Day & Day, Rodney R. Nordstrom, Peoria, IL, for plaintiffs. Gerard A. Brost, Asst. U.S. Atty., Peoria, IL, for defendant. ORDER McDADE, District Judge. Before the Court is a Report and Recommendation of United States Magistrate Judge Robert J. Kauffman [Doc. # 18] that Defendant's Rule 12(b)(1) Motion to Dismiss [Doc. # 9] be denied. Defendant's Motion to Dismiss presents the question of whether the time limitations applicable to the Federal Tort Claims Act implicate the Court's subject matter jurisdiction or are merely affirmative defenses. Defendant has filed an objection to the Magistrate Judge's recommendation. Accordingly, the Court shall make a de novo review of those portions of the Magistrate Judge's recommendation to which Defendant has objected. 28 U.S.C. § 636(b)(1)(C). The Court, having reviewed the record and pleadings in this case, finds that the Magistrate Judge's Report and Recommendation must be rejected. The present case involves a suit filed by Plaintiffs, Richard and Heddy Willis, against Defendant, the United States of America ("the United States"), seeking compensatory damages for injuries allegedly incurred by Plaintiffs. Plaintiffs claim that doctors employed by the Department of Veterans Affairs ("the VA") negligently failed to inform Plaintiffs of the long-term side effects of neuroleptic medications, negligently failed to monitor Willis after prescribing such medications to him, negligently failed to prescribe proper amounts of the medication, and negligently allowed Willis to continue receiving the medication after knowing that continued use of the medication would result in tardive dyskinesia. Plaintiffs filed their suit pursuant to Federal Tort Claims Act 28 U.S.C. § 2671 et seq ("the FTCA"). The United States has filed a Motion to Dismiss Plaintiffs' Complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. In its motion, the United States argues that the Court lacks subject jurisdiction over Plaintiffs' suit because Plaintiffs failed to file an administrative claim within two years of discovery of their injury as required by 28 U.S.C. § 2401(b).[1] The United 891 States argues that the requirements of § 2401(b) are jurisdictional prerequisites to maintaining a suit under the FTCA, and Plaintiffs' failure to satisfy these prerequisites deprives this Court of subject matter jurisdiction over the present suit. Plaintiffs have responded to Defendant's Motion to Dismiss by contending that the time limits contained in § 2401(b) are not jurisdictional in nature, but rather, are merely affirmative defenses. As such, Plaintiffs argue that Defendant cannot maintain a Rule 12(b)(1) motion on the basis of a failure to meet the requirements of the applicable time limits, but instead, Defendant must file a motion for summary judgment to raise such a timeliness issue. Plaintiffs also argue that they did in fact comply with the time limits contained in § 2401(b). Upon considering the arguments of Plaintiffs and Defendant, the Magistrate Judge concludes that Defendant's Motion to Dismiss should be denied and that this Court should hold an evidentiary hearing pursuant to Rule 42(b) of the Federal Rules of Civil Procedure to make factual and credibility findings in relation to the date Plaintiffs discovered their injuries. In so concluding, the Magistrate Judge cites Irwin v. Department of Veterans Affairs, 498 U.S. 89, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990) and states that implicit in the Supreme Court's holding in that case is the proposition that statutes of limitations in suits against the federal government are not jurisdictional, but rather, are subject to tolling. The Magistrate Judge finds that the effect of Irwin is to relax the doctrine of strict subject matter jurisdiction in suits brought against the federal government and that as a result, the time limits associated with such suits are no longer jurisdictional. In support of his finding, the Magistrate Judge cites three cases decided after Irwin which he contends have held that statutes of limitations in government suits are no longer jurisdictional: Schmidt v. United States, 933 F.2d 639 (8th Cir.1991); Oropallo v. United States, 994 F.2d 25 (1st Cir.1993); and Diltz v. United States, 771 F.Supp. 95 (D.C.Del.1991). The Magistrate Judge's citation to Oropallo as support for his position is highly questionable. Indeed, Oropallo appears to support the contrary view that time limitations associated with waivers of sovereign immunity are jurisdictional prerequisites which may, in the wake of Irwin, be subject to equitable tolling. 994 F.2d at 26-31. It is true that Diltz, Schmidt, and a number of other cases all within the Eighth Circuit[2] have held that limitations periods embodied within waivers of sovereign immunity are not jurisdictional. However, the Court is persuaded that the Eighth Circuit and the District Court in Diltz have read Irwin too broadly. The Court cannot accept the Magistrate Judge's recommendation in this case. The Court does not agree that the effect of Irwin is to alter the jurisdictional stature of the time limitations applicable to the FTCA and other waivers of sovereign immunity. Irwin held only that a rebuttable presumption of equitable tolling applies to suits against the United States just as it does in suits against private defendants. The Supreme Court stated in Irwin that such an application would amount to little, if any, broadening of a congressional waiver of sovereign immunity. The Supreme Court did not, however, state that the waiver of sovereign immunity embodied in the FTCA and the time limitations which are part and parcel of that waiver ceased to be of a jurisdictional dimension. Indeed, the Supreme Court's discussions and holdings in United States v. Dalm, 494 U.S. 596, 110 S.Ct. 1361, 108 L.Ed.2d 548 (1990) and McNeil v. United States, ___ U.S. ___, 113 S.Ct. 1980, 124 L.Ed.2d 21 (1993) belie such an intent. Dalm, a case decided only nine months prior to Irwin, was authored by Justice Kennedy and joined in by Chief Justice Rehnquist and Justices White, Blackmun, O'Connor, and Scalia. In Dalm, the Supreme Court stated: 892 Under settled principles of sovereign immunity, "the United States, as sovereign, `is immune from suit, save as it consents to be sued ... and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit.'" United States v. Testan, 424 U.S. 392, 399[, 96 S.Ct. 948, 953, 47 L.Ed.2d 114] (1976) (quoting United States v. Sherwood, 312 U.S. 584, 586[, 61 S.Ct. 767, 769, 85 L.Ed. 1058] (1941)). A statute of limitations requiring that a suit against the Government be brought within a certain time period is one of those terms. 494 U.S. 596, 608, 110 S.Ct. 1361, 1368, 108 L.Ed.2d 548 (1990). In McNeil, the Supreme Court affirmed the judgment of the Court of Appeals for the Seventh Circuit which affirmed the district court's holding that it lacked subject matter jurisdiction over the case because the plaintiff failed to comply with the jurisdictional requirements of the FTCA including the statute of limitations contained in § 2675(a). Justice Stevens delivered the opinion of a unanimous Court in McNeil. The Irwin opinion was authored by Chief Justice Rehnquist and joined by Justices Blackmun, O'Connor, Scalia, and Kennedy. It is difficult to believe that these Justices who composed five of the six members of the Court joining the Dalm opinion and who joined in the McNeil decision intended the decision rendered in Irwin to be construed as altering the jurisdictional nature of the statutes of limitations contained in the FTCA. In addition, the case law of the lower federal courts at the time Irwin was decided was virtually unanimous in holding that the FTCA statutes of limitations implicated a court's subject matter jurisdiction.[3] Given this extensive body of case law, the Court believes that the Supreme Court would have made explicit in Irwin any intent to alter the jurisdictional nature of the time limitations contained in the FTCA and other waivers of sovereign immunity. Thus, the Court finds that the effect of Irwin is not to alter the stature of the FTCA time limitations from jurisdictional prerequisites to mere affirmative defenses. Rather, the Court concludes that the effect of Irwin is to allow courts to consider equitable tolling of time limitations in the context of suits brought against the federal government while maintaining the jurisdictional quality of the time limitations.[4] The weight of case law following the Supreme Court's decision in Irwin supports the Court's conclusion that time limitations contained in the FTCA and other waivers of sovereign immunity remain jurisdictional in nature. Several cases decided after Irwin have found that the limitations period in § 2401(b) of the FTCA as well as other waivers of sovereign immunity are of jurisdictional stature. See De Casenave v. United States, 991 F.2d 11 (1st Cir.1993); Cizek v. United States, 953 F.2d 1232 (10th Cir.1992); Williams v. United States, 947 F.2d 37 (2nd Cir.1991); Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765 (4th Cir.1991); Gualtier v. United States, 837 F.Supp. 360 (D.Kan.1993); Carroll v. United States, 149 F.R.D. 524 (W.D.La.1993); Whittaker v. United States, 815 F.Supp. 764 (D.Vt.1993); Severtson v. United States, 806 F.Supp. 97 (E.D.La.1992); Romero v. United States, 806 F.Supp. 569 (E.D.Va.1992); De Casenave v. United States, 797 F.Supp. 86 (D.P.R.1992); Lumpkin v. United States, 791 893 F.Supp. 747 (N.D.Ill.1992)[5]; see also Ahmed v. United States, 30 F.3d 514 (4th Cir.1994) (failure to file an administrative claim within § 2401(b) period is jurisdictional defect); Kendall v. Army Bd. for Correction of Military Records, 996 F.2d 362 (D.C.Cir.1993) (compliance with limitations period in 28 U.S.C. § 2401(a) is a condition of federal court jurisdiction.). In addition, at least one treatise addressing the issue treats the limitations periods in the FTCA as prerequisites to a court's jurisdiction. See Lester S. Jayson, Handling Federal Tort Claims: Administrative and Judicial Remedies, Vol. II, §§ 275.01 and 275.02 (1991). The depth and breadth of the above sources is persuasive as to the continued jurisdictional effect of time limitations contained in waivers of sovereign immunity generally and those contained in the FTCA particularly. The Court also finds persuasive cases decided within the Seventh Circuit both prior and subsequent to the Supreme Court's decision in Irwin which addressed the jurisdictional effect of time limitations contained in the FTCA. Seventh Circuit case law prior to Irwin held that statutes of limitations in most suits against the federal government were jurisdictional and, in particular, that the time limitation in § 2401(b) was jurisdictional. See Barnhart v. United States, 884 F.2d 295 (7th Cir.1989); Crawford v. United States, 796 F.2d 924 (7th Cir.1986); Charlton v. United States, 743 F.2d 557 (7th Cir.1984); Marks v. Turnage, 680 F.Supp. 1241 (N.D.Ill. 1988). In Misany v. United States, 826 F.2d 612 (1987), the Seventh Circuit stated that "... the FTCA is, in effect, a jurisdiction statute...." Subsequent to Irwin, the court in Lumpkin v. United States found that "[s]ection 2401(b) of the Federal Tort Claims Act creates a jurisdictional question." 791 F.Supp. 747, 749 (N.D.Ill.1992).[6] The law in the Seventh Circuit prior to Irwin clearly holds § 2401(b) to be a jurisdictional prerequisite, and the Court finds that Irwin did nothing to alter the jurisdictional nature of § 2401(b). Plaintiffs have not argued equitable tolling, and there is no evidence in the record that would justify applying that doctrine to this case. The Supreme Court in Irwin stated that the application of the equitable tolling doctrine is, in the usual case, reserved for "situations where the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period, or where the complainant has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass." 498 U.S. at 94-96, 111 S.Ct. at 457-58. Such is not the situation in this case, and the doctrine of equitable tolling has no application in the present case. Plaintiffs' efforts to circumvent the time bar contained in § 2401 by converting the equitable tolling doctrine into a burden shifting affirmative defense is to no avail. It is still Plaintiffs' burden to bring their action within the time requirements of § 2401 to give a district court jurisdiction over his claim. The only question raised by Defendant's motion to dismiss is whether or not Plaintiff timely instituted his claim within two years after the accrual of his claim. A failure to do so bars the claim. "A claim accrues when the plaintiff becomes aware of both the existence and the cause of his injury." U.S. v. Kubrick, 444 U.S. 111, 117, 100 S.Ct. 352, 356, 62 L.Ed.2d 259 (1979); see also Barnhart, 884 F.2d at 298. The critical issue then is to determine when Plaintiffs first acquired knowledge of Mr. Willis' condition and its cause. The parties differ on when this occurred and an evidentiary hearing is needed to assist the Court in making this ascertainment. As discussed in Cada v. Baxter Healthcare Corp., 920 F.2d 446, 450 (7th Cir.1991): Accrual is the date on which the statute of limitations begins to run. It is not the date on which the wrong that injures the *894 plaintiff occurs, but the date often the same, but sometimes later on which the plaintiff discovers that he has been injured. The rule that postpones the beginning of the limitations period from the date when the plaintiff is wronged to the date when he discovers he has been injured is the "discovery rule" of federal common law, which is read into statutes of limitations in federal-question cases.... Given the Court's finding that institution of a claim within the limitations period contained in § 2401 is a prerequisite to a court's subject matter jurisdiction, the Court finds that an evidentiary hearing on Defendant's Motion to Dismiss is necessary. See Crawford, 796 F.2d at 928-29; Lumpkin, 791 F.Supp. at 749. Defendant's Motion to Dismiss made pursuant to Rule 12(b)(1) motion shall be decided based upon such evidentiary hearing and the materials which have been filed in support of those motions. IT IS THEREFORE ORDERED that the Report and Recommendation of the Magistrate Judge [Doc. # 18] is REJECTED. An evidentiary hearing before this Court in person is set for October 6, 1994, at 2:00 p.m. NOTES [1] 28 U.S.C. § 2401(b) states: (b) A tort claim against the United States shall be forever barred unless it is presented in writing to the appropriate Federal agency within two years after such claim accrues or unless action is begun within six months after the date of mailing, by certified or registered mail, of notice of final denial of the claim by the agency to which it was presented. [2] See Krueger v. Saiki, 19 F.3d 1285 (8th Cir. 1994); Slaaten v. United States, 990 F.2d 1038 (8th Cir.1993); Arigo v. United States, 980 F.2d 1159 (8th Cir.1992). [3] See Handling Federal Tort Claims: Administrative and Judicial Remedies, Vol. 2, Lester S. Jayson, § 275.02, p. 14-9 through 14-10 (1991). [4] The Court recognizes that its finding may be regarded as being contrary to the holdings in cases such as Smith v. Chicago Heights, 951 F.2d 834, 838-839 (7th Cir.1992), Cada v. Baxter Healthcare Corp., 920 F.2d 446, 451 (7th Cir. 1990), and Hardin v. City Title & Escrow Co., 797 F.2d 1037, 1040-41 (D.C.Cir.1986). However, these cases all involved suits between private individuals, and as the panel stated in Central States Pension Fund v. Navco, 3 F.3d 167, 173 (7th Cir.1993): Only the rules limiting the commencement of actions against the United States itself have been given the "jurisdictional" treatment, on account of sovereign immunity rather than some principle distinguishing statutory from common law rights. Even the doctrine protecting the national government from tolling a period of limitations crumbled recently. (Citing Irwin). [5] In an unpublished order, the Tenth Circuit found that a plaintiff's failure to sue within the period of limitations contained in § 2401(a) deprives a court of subject matter jurisdiction. Urabazo v. United States, 947 F.2d 955 (10th Cir. 1991). [6] Although not suitable to be cited or used as precedent pursuant to Seventh Circuit Rule 53(b)(2)(iv), the Court notes with interest the Seventh Circuit's decision in Cole v. United States, 21 F.3d 430 (7th Cir.1994).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264450/	239 P.3d 51 (2010) Todd L. MITCHELL, Appellee/Cross-appellant, v. PETSMART, INC., Appellant/Cross-appellee, Royal & Sun Alliance Insurance Company, Appellee/Cross-appellee, and Travelers Property and Casualty Company of America, Appellant/Cross-appellee. No. 99,528. Supreme Court of Kansas. September 10, 2010. 54 Lyndon W. Vix, of Fleeson, Gooing, Coulson & Kitch, of Wichita, argued the cause, and Brian R. Collignon, of the same firm, was with him on the briefs for appellant/cross-appellee Petsmart, Inc., and appellant/cross-appellee Travelers Property and Casualty Company of America. Terry J. Torline, of Martin, Pringle, Oliver, Wallace & Bauer, L.L.P., of Wichita, argued the cause, and Timothy A. Emerson, of the same firm, was with him on the briefs for appellant/cross-appellee Petsmart, Inc., and appellee/cross-appellee Royal & Sun Alliance Insurance Company. Michael L. Snider, of Snider & Seiwert, of Wichita, argued the cause and was on the briefs for appellee/cross-appellant Todd L. Mitchell. The opinion of the court was delivered by BILES, J.: This appeal comes on cross-petitions for review following a workers compensation award. Todd L. Mitchell, the injured employee, challenges the Workers Compensation Board's method for calculating his permanent partial disability award. His first issue is whether the Board erred in combining his multiple left arm and right arm injuries into a scheduled injury for each arm at the shoulder level. We hold it was error to combine these injuries. A variation of this issue is decided in Redd v. Kansas Truck Center, ___ Kan. ___, 239 P.3d 66 (2010). Mitchell's second issue attacks the Board's decision to deduct the number of weeks awarded for temporary total disability from the number of weeks allotted on the K.S.A. 44-510d schedule to calculate his permanent partial disability award. We hold the Board properly deducted the weeks of temporary total disability. Finally, each of the two insurance carriers involved seeks to shift responsibility to the other by challenging the decision to impose joint and several liability for certain injuries suffered by Mitchell. We hold the Board's order imposing joint and several liability should be affirmed because the evidence supports the Board's finding that Mitchell's repetitive trauma injuries resulted from a combination of the initial injury that began these proceedings and subsequent work activities. FACTUAL AND PROCEDURAL BACKGROUND The facts are not in dispute. On December 31, 2003, Mitchell fell while working at Petsmart, Inc., and broke his left thumb. He underwent surgery and returned to work with a cast on his left arm. He did not miss any work. Mitchell's job responsibilities included building displays, transporting merchandise 55 to the sales floor, and stocking the shelves with dog food weighing up to 50 pounds. Mitchell testified he wore the cast on his left arm for about 12 weeks but continued to complete his regular job tasks using primarily his right arm. When Mitchell broke his left thumb, Petsmart was insured by Royal & Sun Alliance Insurance Company. But on February 1, 2004, 1 month after the injury, Travelers Property and Casualty Company of America began insuring Petsmart. On March 2, 2004, Mitchell filed his first workers compensation claim (No. 1,015,618) against Petsmart, naming Royal as the insurer. Mitchell alleged the December 31, 2003, fall caused his work-related injury. He claimed injuries to his "hand, thumb, arm and all parts affected thereby." Later, this claim was amended to allege the date of accident for purposes of the statutory claims process included subsequent aggravations after December 31, 2003. The amendment also expanded the claimed injuries to include "bilateral hands, shoulders, arms and all other body parts affected." On April 5, 2004, which appears to be the date the cast was removed, Mitchell was released at maximum medical improvement. He testified he continued to rely on his right arm for most lifting activities for at least another month after the cast was taken off because his left arm remained stiff and weak. Dr. Pedro Murati examined Mitchell for complaints of left thumb and hand pain and weakness. For the left thumb, Dr. Murati determined Mitchell suffered a 20 percent impairment for lateral instability and a 14 percent impairment for loss of motion, which Dr. Murati converted to 8 and 6 percent hand impairments, respectively. He assigned an additional 12 percent hand impairment for sensory deficits in the thumb. For the weakness in Mitchell's left hand, Dr. Murati assigned an 11 percent hand impairment. Dr. Murati then combined these for a total of 32 percent impairment to the left hand. He did not convert this into a left upper extremity impairment. Dr. Murati's recommended restrictions were to "work as tolerated and use common sense." On July 18, 2004, Mitchell reported pain in his right arm. Petsmart sent Mitchell to Dr. Mark Dobyns, who treated Mitchell with Ibuprofen and a cortisone shot. Mitchell testified Dr. Dobyns restricted him from lifting more than 10 pounds with his right arm, so Mitchell switched back to primarily using his left arm to complete his job duties. Dr. Murati also evaluated Mitchell for right shoulder pain. He diagnosed probable right carpal tunnel syndrome with pain in his right shoulder, right rotator cuff sprain or tear, and right shoulder pain with instability. Dr. Murati attributed these impairments to a work-related injury occurring on July 23, 2004. This appears to be an error because July 23 does not have any other significance to this litigation. Dr. Murati probably meant to refer to the date Mitchell reported right arm pain, July 18, 2004. On October 20, 2004, Mitchell notified Petsmart his left arm and shoulder hurt. On October 25, 2004, Mitchell filed a second claim against Petsmart and Royal (No. 1,019,828) for overuse of extremities, listing an accident date of July 18, 2004, the date Mitchell initially reported pain in his right arm and each day worked thereafter. This second claim alleged injury to "bilateral hands, shoulders, and all parts affected." Travelers was substituted later as the insurance carrier for this claim. In November 2004, Dr. Bernard Hearon diagnosed Mitchell with a superior labum anterior to posterior (SLAP) lesion on his right shoulder, and surgery was performed in January 2005. On February 24, 2005, Dr. Hearon diagnosed a SLAP lesion on Mitchell's left shoulder and restricted overhead work on the left side. Dr. Hearon recommended surgery to treat the second SLAP lesion, but Mitchell refused. Petsmart terminated Mitchell for poor attendance on July 19, 2005. His last day worked was July 15, 2005. The same day he was terminated, Mitchell returned to Dr. Hearon, complaining of bilateral upper extremity tingling and numbness. He was diagnosed with bilateral carpal tunnel syndrome and possible bilateral cubital tunnel syndrome (cubital relates to the elbow). A nerve conduction test confirmed cubital tunnel 56 syndrome for his right upper extremity. Nerve tests did not support a finding for left cubital tunnel syndrome. On August 15, 2005, Dr. Hearon performed right carpal tunnel release surgery followed by physical therapy. Mitchell was released without restrictions on September 27, 2005. Mitchell returned to Dr. Murati on December 21, 2005, with continued complaints of right and left shoulder pain, pain in his left hand, and right hand weakness. Dr. Murati diagnosed him with a 36 percent right upper extremity impairment for the status postright carpal tunnel release, status postright subacromial decompression, status postright distal clavicle excision, right ulnar cubital syndrome, and loss of shoulder motion. Dr. Murati then converted this to a 22 percent whole body impairment. Dr. Murati also found a 15 percent left upper extremity impairment for left carpal tunnel syndrome and mild glenohumeral crepitus of the left shoulder, which he converted to a 9 percent whole body impairment. Finally, Dr. Murati combined the 22 and 9 percent whole body calculations into a 29 percent whole person impairment. He found the injuries were caused by a work-related injury occurring on July 18, 2004 (the date the injury was reported), and every day thereafter. The ALJ Award The administrative law judge (ALJ) consolidated Mitchell's two workers compensation claims. In both cases, the parties entered into stipulations. In No. 1,015,618, pertaining to the left thumb injury, the parties agreed Mitchell injured his thumb on December 31, 2003, because of his employment. They also stipulated Mitchell's average weekly wage was $560.90, excluding fringe benefits. Petsmart and Royal denied Mitchell suffered any other injury for which they would be responsible. In the second claim, No. 1,019,828, the parties agreed that Travelers insured Petsmart during the time period at issue in the case and that Mitchell's wage was $576.32, including fringe benefits. Petsmart and Travelers did not stipulate Mitchell was injured during Travelers' coverage period. The ALJ ordered an independent medical evaluation with Dr. Pat Do, who diagnosed: (1) status postright carpal tunnel release; (2) status postleft thumb ulnar collateral ligament repair; (3) status postright shoulder subacromial decompression, rotator cuff repair, distal clavicle excision, and SLAP repair; and (4) left shoulder pain. Dr. Do concluded that all of these injuries resulted from the December 31, 2003, left thumb break and were the natural consequence of overuse following surgery of the uninvolved extremity. The ALJ found Mitchell suffered an injury on December 31, 2003, and provided the following description of events: "The claimant in this case was stepping backwards to get clear of a truck of some kind that was working in the isle [sic] of the store at Petsmart. But as he stepped backwards he tripped and put out his left hand to catch himself and his left thumb was broken and bent severely. He never lost work over that particular injury even though a screw was later put in [his left hand] that was done on his days off and he continued to work and continued to use the right hand more than he did the left hand as he was favoring the left hand because of the thumb injury. From that he had several other problems including but not limited to carpal tunnel on the right hand and he had surgery on it. Then he had shoulder problems and then he had elbow problems so the whole right upper extremity and part of the left extremity had several arthroscopic surgeries and he continued to have all kinds of problems." The ALJ then calculated Mitchell's injuries as a general body disability under K.S.A. 44-510einstead of using the scheduled injuries set out in K.S.A. 44-510d. The ALJ then averaged the impairment ratings given by Drs. Murati and Do, which resulted in a permanent partial disability award of $85,354.09. The ALJ did not award temporary total disability. The ALJ's order did not specifically address whether the secondary injury rule, which permits compensation for a subsequent injury if it is a natural and probable consequence of the primary injury, applied to the 57 bilateral shoulder and right elbow injuries. But such a determination is implied in the ALJ's finding that the accident date was December 31, 2003, which is when Mitchell fell and broke his left thumb. Finally, the ALJ imposed joint and several liability on Royal and Travelers, explaining: "The law is clear that if [insurance carriers] have a disagreement among themselves as to who the responsible carrier is, that should be decided in the District Court . . . [because] we are not authorized to make that determination in the Comp Court." Traveler's sought review of the ALJ's order before the Board. Travelers challenged the nature and extent of Mitchell's disabilities, the joint and several liability determination, and the ALJ's failure to award a scheduled injury under K.S.A. 44-510d. Royal and Mitchell did not cross-appeal. The Board's Order The Board did not agree with the ALJ's calculations for Mitchell's injuries as a general body disability under K.S.A. 44-510e. The Board held Mitchell's injuries to both his arms and shoulders must be compensated under the schedules set out in K.S.A. 44-510d, citing Casco v. Armour Swift-Eckrich, 283 Kan. 508, 154 P.3d 494 (2007) (See Syllabus Paragraph 7Scheduled injuries are the general rule and nonscheduled injuries are the exception. If an injury is on the schedule, the amount of compensation is determined under K.S.A. 44-510d.). The Board then addressed each claimed injury. For Mitchell's left thumb, the Board found he suffered a 44.5 percent impairment and awarded Mitchell 26.70 weeks of permanent partial disability at a rate of $373.95, totaling $9,984.47. The Board found Royal solely liable for the left thumb injury award. This finding is not challenged on appeal. For the remaining injuries, the Board found Mitchell suffered repetitive trauma injuries, including bilateral carpal tunnel syndrome, right cubital tunnel syndrome, and bilateral shoulder injuries. The Board explained that when Mitchell returned to work after the thumb surgery, he used his right arm to unload pallets of dog food until the right arm became symptomatic. Then, Mitchell went back to using his left arm to compensate for the right shoulder pain, and the left arm also became symptomatic. The Board also expressly found Mitchell's arm and shoulder injuries, which occurred after he broke his left thumb, resulted from a combination of Mitchell's work duties and his initial thumb injury. The Board referenced Dr. Murati's testimony as establishing Mitchell's routine work activities contributed to his subsequent injuries. It also cited Mitchell's and Dr. Do's testimony that the left thumb break was a contributing factor. The Board held: "[I]t cannot be said those additional repetitive trauma injuries to claimant's arms and shoulders would have occurred without the strenuous work that claimant performed after his thumb surgery. Likewise, it cannot be said claimant would have developed these injuries without the initial thumb injury. Consequently, the Board finds and concludes the combination of claimant's work activities and his initial thumb injury resulted in claimant developing bilateral carpal tunnel syndrome, right elbow symptoms, and bilateral shoulder injuries." (Emphasis added.) But the Board disagreed over how to calculate Mitchell's compensation. A majority combined the separate injuries to each upper extremity and then made one award each for the right and left upper extremities. They listed the date of injury as Mitchell's last day worked, July 15, 2005. For the right upper extremity, the Board awarded $29,238.19-$6,706.44 temporary total disability benefits and $21,651.86 permanent partial disability benefits. Mitchell was awarded $6,706.44 in permanent partial disability for his left upper extremity. Two dissenters disagreed with the majority's method of combining injuries. They argued Mitchell's disabilities should be calculated at each level specified in the statutory schedule that contained an injury because K.S.A. 44-510d does not contain any language authorizing the Board to combine injuries. Under the minority's approach, each injury to the fingers, hand, forearm, arm, and shoulder would be compensated separately under the schedule regardless of 58 whether the injuries occur separately, simultaneously, or are progressive. This disagreement over combining impairments under K.S.A. 44-510d when there are multiple injuries to scheduled members is a recurring controversy. See Redd, ___ Kan. at ___- ___, 239 P.3d 66. Finally, the entire Board agreed with the ALJ and ordered joint and several liability against Royal and Travelers for the medical treatment and disability compensation for Mitchell's bilateral carpal tunnel syndrome, right elbow symptoms, and bilateral shoulder injuries. The Board reasoned that joint and several liability was appropriate based on its factual finding that Mitchell's initial left thumb injury and subsequent work activities combined to cause those injuries. Travelers appealed. It contended the Board erred by finding more than one date of injury, arguing the secondary injury rule applied and that Mitchell's extremity impairments were the natural and probable consequence of the left thumb injury. This error, Travelers claimed, led the Board to mistakenly impose joint and several liability on Travelers and Royal because Royal was the insurer at risk when the left thumb was broken. Mitchell filed a cross-appeal. He argued the dissenting board members were correct in finding he should have received separate awards at each injury level and the Board majority erred by combining his injuries to the highest level for the right and left extremities on the statutory schedule. He also claimed the Board erred by deducting the weeks of temporary total disability from the 225 weeks allotted on the schedule. The Court of Appeals held: (1) The secondary injury rule did not apply because there was sufficient evidence supporting the Board's decision that a combination of the left thumb break and Mitchell's subsequent work activities caused his injuries; (2) it was appropriate to combine Mitchell's extremity impairments to the highest level of the extremity because the K.S.A. 44-510d schedule is progressive, i.e., the higher up the extremity the more weeks are awarded; and (3) K.A.R. 51-7-8 allows for the credit of temporary total disability paid when a claimant is awarded those temporary benefits followed by a permanent partial disability. Mitchell v. Petsmart, Inc., 41 Kan.App.2d 523, 203 P.3d 76 (2009). The Mitchell panel also affirmed the joint and several liability imposed on the two insurance carriers, presumably because the panel believed its decision on the secondary injury rule resolved that controversy. But the panel's decision is not specific as to this point. Both Travelers and Mitchell filed petitions for review, which we granted. Jurisdiction is proper under K.S.A. 20-3018(b) (review of a Court of Appeals' decision). We address the issues raised in the following order: (1) whether the Board erred in calculating Mitchell's permanent partial disability award by combining his extremity impairments to the highest level of the extremity; (2) whether the Board erred by deducting Mitchell's temporary total disability in calculating his permanent partial disability; and (3) whether the Board erred by assigning joint and several liability to both Royal and Travelers. ISSUE ONE: PERMANENT PARTIAL DISABILITY CALCULATION Mitchell argues the Board majority improperly combined his multiple left and right arm injuries into one scheduled injury for each arm at the shoulder level. Instead, Mitchell argues his injuries should have been compensated separately according to the schedule in K.S.A. 44-510d at the level corresponding to each injury. Travelers asserts it was proper to combine these injuries into two awards, noting the number of weeks assigned to each arm at the shoulder level on the statutory schedule includes the value of the lower members. The Mitchell panel agreed with Travelers. 41 Kan.App.2d at 537, 203 P.3d 76. But the Board has used, and other Court of Appeals panels have affirmed, conflicting methods for calculating an award under similar circumstances. See, e.g., Redd v. Kansas Truck Center, 2008 WL 4149955, at 12 (Work. Comp. Bd., No. 1,020,892, filed August 27, 2008); Conrow v. Globe Engineering Co., No. 99, 718, 2009 WL 744086, unpublished Court of Appeals opinion filed March 59 13, 2009. This statutory interpretation issue is a question of law over which we have unlimited review. See Redd, ___ Kan. at ___-___, 239 P.3d 66; Ft. Hays St. Univ. v. University Ch., Am. Ass'n of Univ. Profs., 290 Kan. 446, 457, 228 P.3d 403 (2010). The Mitchell panel interpreted K.S.A. 44-510d to allow compensation at the highest level of injury when multiple injuries occur within a single extremity. It noted the statutory structure of the scheduled injuries is progressive, meaning an injured worker is entitled to more weeks if the injury occurs at a higher level, i.e., 200 weeks for a forearm, but 210 weeks for the loss of an arm. 41 Kan.App.2d at 537-38, 203 P.3d 76. The panel also relied upon Casco, 283 Kan. at 522, 154 P.3d 494, which found that if an injury is on the schedule, the amount of compensation stated in the statutory schedule includes compensation for the complete loss of the member or the partial loss of the member. The panel then reasoned that because the number of weeks is reduced by the percentage of the loss, "the principle of compensating an extremity at the highest level affected applies regardless of whether the loss is total or partial." 41 Kan.App.2d at 537, 203 P.3d 76. In the end, this justified the Board majority's statutory interpretation, which the Mitchell panel found was entitled to judicial deference. 41 Kan.App.2d at 538, 203 P.3d 76. But in Redd, a Board majority awarded an injured worker five scheduled injuries to his left hand, left forearm, left arm, right forearm, and right arm. The employer argued the Board was required to combine the individual impairment ratings into a whole body impairment because K.S.A. 44-510d(a)(23) requires loss of a scheduled member be based on the permanent impairment of function to that member as determined using the American Medical Association Guides to Evaluation of Permanent Impairment (4th ed. 1995) (Guides). The Guides instruct physicians to generate a whole body impairment rating as part of a recommended three-step evaluation process. We agreed that this created an ambiguity in the statute, but we rejected the employer's statutory interpretation in Redd, ___ Kan. at ___-___, 239 P.3d 66, because it rendered meaningless the statutory schedules set out in K.S.A. 44-510d(a)(1)-(22). To reach this conclusion, we analyzed the governing statutes from the Workers Compensation Act; K.S.A. 44-501 et seq.; the case law interpreting those statutes; the Guides; and the legislative history for K.S.A. 44-510d(a)(23). We found the legislature created its own statutory mechanism to calculate permanent partial disability awards in K.S.A. 44-510d and K.S.A. 44-510e. Thus, the more reasonable interpretation for K.S.A. 44-510d(a)(23) was that the legislature meant to adopt the evaluation requirements and methods for combining impairments to the same statutorily specified level, but not the Guides' process for combining multiple scheduled injuries occurring at different levels or on different members. Redd, ___ Kan. at ___-___, 239 P.3d 66. For example, if there are several injuries causing impairment to an injured worker's thumb, those injuries should be combined to generate a total impairment to the thumb because it is specifically identified in K.S.A. 44-510d. But the thumb injury should not be combined with a scheduled injury to the hand, which also is specifically identified in the statute. This view, we reasoned in Redd, ___ Kan. at ___, 239 P.3d 66, maintains the Guides' purpose of bringing greater objectivity to the physician's task of estimating the magnitude of permanent impairments but also allows for application of the scheduled injury calculations specified in the statute. See K.S.A. 44-510d(a)(1)-(22). In Redd, we also touched on the Mitchell panel's decision to combine impairments to the highest level of the extremity, by stating: "Admittedly, [the Mitchell] approach does not render the statutory schedule meaningless, but it does read something into K.S.A. 44-510d(a)(1)-(22) that does not exist. The schedule does not contain any language requiring the combination of scheduled injuries, and the panel does not explain where it finds the authority permitting the Board to combine injuries in the manner the panel approved." (Emphasis added.) Redd, ___ Kan. at ___, 239 P.3d 66. 60 While in Redd we found that the adoption of the Guides in K.S.A. 44-510d(a)(23) created an ambiguity in the statute, the schedule's plain language helps us resolve the arguments made by Travelers and adopted by the Court of Appeals' panel in this case. See Higgins v. Abilene Machine, Inc., 288 Kan. 359, 362, 204 P.3d 1156 (2009) (Canons of statutory construction are used to resolve an ambiguity only if the plain reading of a statute yields an ambiguity or lack of clarity.). We find the statutory schedule plainly does not authorize the combining of impairment values to be found for the specific scheduled members identified in K.S.A. 44-510d(a)(1)-(22). K.S.A. 44-510d defines a permanent partial disability as a disability "partial in character but permanent in quality." K.S.A. 44-510d(a) then states permanent partial disability compensation "is to be paid for not to exceed the number of weeks allowed" in the following schedule: "(1) For the loss of a thumb, 60 weeks. . . . . "(12) For the loss of a forearm, 200 weeks. "(13) For the loss of an arm, excluding the shoulder joint, shoulder girdle, shoulder musculature or any other shoulder structures, 210 weeks, and for the loss of an arm, including the shoulder joint, shoulder girdle, shoulder musculature or any other shoulder structures, 225 weeks. . . . . "(21) Permanent loss of the use of a finger, thumb, hand, shoulder, arm, forearm, toe, foot, leg or lower leg . . . shall be equivalent to the loss thereof. For the permanent partial loss of the use of a finger, thumb, hand, shoulder, arm, toe, foot or leg, or the sight of an eye or the hearing of an ear, compensation shall be paid as provided for in K.S.A. 44-510c . . . per week during that proportion of the number of weeks in the foregoing schedule provided for the loss of such finger, thumb, hand, shoulder, arm, toe, foot or leg, or the sight of an eye or the hearing of an ear, which partial loss thereof bears to the total loss of a finger, thumb, hand, shoulder, arm, toe, foot or leg, or the sight of an eye or the hearing of an ear; but in no event shall the compensation payable hereunder for such partial loss exceed the compensation payable under the schedule for the total loss of such finger, thumb, hand, arm, toe, foot or leg, or the sight of an eye or the hearing of an ear, exclusive of the healing period. As used in this paragraph (21), `shoulder' means the shoulder joint, shoulder girdle, shoulder musculature or any other shoulder structures." (Emphasis added.) There are three relevant points apparent from the statute. First, it does not contain a provision treating multiple injuries differently than singular injuries. Second, it also does not expressly provide for the combination of impairment values. Third, K.S.A. 44-510d(a)(21) states that the permanent partial loss of the "finger, thumb, hand, [arm, or shoulder]" shall be compensated by the number of weeks which the "partial loss thereof bears to the total loss of [the] finger, thumb, hand, [arm, or shoulder]. . . ." It does not provide that the permanent partial loss shall be compensated by the percentage of loss of the extremity. Unlike the arguments made in Redd, the Mitchell panel did not rely upon the adoption of the Guides as justification for combining impairments. It found the statute's progressive nature, which allots more weeks for the higher levels of the extremity, justified the Board majority's decision to combine Mitchell's injuries under the operative construction doctrine, which allows judicial deference to an administrative agency's statutory interpretation when it is supported by a rational basis. Mitchell, 41 Kan.App.2d at 537-38, 203 P.3d 76. But this ignores this court's recent decisions recognizing there is little utility for such deference given the long-standing admonition that appellate courts are always free to substitute their judgment for that of the administrative agency when reviewing a question of law. Ft. Hays St. Univ., 290 at 457, 228 P.3d 403 ("In this matter, an appellate court exercises unlimited review on the determinative question of statutory interpretation without deference to [the agency's] 61 view as to its own authority."); Higgins, 288 Kan. at 361, 204 P.3d 1156 ("No significant deference is due [an administrative law judge's] or the [Workers Compensation] Board's interpretation or construction of a statute."). Indeed, when an agency applies the same statute in conflicting ways, as the Board has on this question, any judicial deference is stymied. Redd, ___ Kan. at ___, 239 P.3d 66. Therefore, the Mitchell panel's rationale is not compelling. Travelers presents a better argument in its brief by contending that the number of weeks contained on the schedule compensates the injured worker for the complete loss of the body member. For example, when a claimant suffers an amputation at the level of the shoulder, the 225 weeks on the schedule necessarily includes the loss of the entire arm. Since the number of weeks for the complete loss is simply reduced by the percentage of loss in partial loss cases, Travelers argues the number of weeks assigned to the highest level must include the lower parts of the member. But this argument also fails because it is contrary to the plain language of the statute and reads a rule into the schedule that does not exist. We find the Act requires that an injured worker is entitled to an award at each separate level for multiple injuries to the same extremity corresponding to the statutory schedule set out in K.S.A. 44-510d. Redd, Syl. ¶ 5. We reverse the Board's and the Court of Appeals' determinations combining the multiple scheduled injuries/impairments to the same extremity, and this case is remanded to the Board for a recalculation of Mitchell's award consistent with this opinion. ISSUE TWO: THE PERMANENT PARTIAL DISABILITY REDUCTION Mitchell was awarded 18 weeks of temporary total disability for injuries sustained to his right upper extremity. He also received a permanent partial disability award. Under the K.S.A. 44-510d(a)(13) schedule, an injured worker is typically awarded 225 weeks for the loss of the arm at the shoulder. In calculating Mitchell's permanent partial disability award, the Board first reduced the 225 weeks assigned under K.S.A. 44-510d(a)(13) by the 18 weeks of temporary total disability. Then, the Board multiplied the reduced weekly total by Mitchell's functional impairment rating. Mitchell argues it was improper to deduct the 18 weeks of temporary total disability. K.A.R. 51-7-8(b)(1) expressly provides for this deduction. But Mitchell argues a different interpretation to the regulation, citing the preceding section, K.A.R. 51-7-8(a)(1) to contend the regulation was misapplied. K.A.R. 51-7-8 states in relevant part: "(a)(1) If a worker suffers a loss to a member and, in addition, suffers other injuries contributing to the temporary total disability, compensation for the temporary total disability shall not be deductible from the scheduled amount for those weeks of temporary total disability attributable to the other injuries. . . . . "(b) If a healing period of 10% of the schedule or partial schedule is granted, not exceeding 15 weeks, it shall be added to the weeks on the schedule or partial schedule before the following computations are made. (1) If a loss of use occurs to a scheduled member of the body, compensation shall be computed as follows: (A) deduct the number of weeks of temporary total compensation from the schedule; (B) multiply the difference by the percent of loss or use to the member; and (C) multiply the result by the applicable weekly temporary total compensation rate." (Emphasis added.) Mitchell claims K.A.R. 51-7-8(a)(1) pertains to workers with both scheduled and nonscheduled injuries and that it prohibits the deduction of temporary total disability paid from a claimant's permanent partial disability award for the scheduled member. We agree the plain language of K.A.R. 51-7-8(a)(1) prohibits the deduction of temporary total disability from the permanent partial disability awardif the temporary total is caused by both a scheduled injury and some other injury. But these are not the facts in this case because all of Mitchell's injuries are 62 scheduled. Mitchell's argument misses the relevant point that K.A.R. 51-7-8(b)(1) explicitly provides for the calculation employed in his case when a loss of use occurs to a scheduled member, which is what happened here. We find Mitchell's argument to be without merit under these facts. In the alternative, Mitchell argues K.A.R. 51-7-8 is void because allowing the deduction for temporary total disability paid contradicts K.S.A. 44-510c and K.S.A. 44-510d. The Mitchell panel upheld the Board's calculation, finding K.A.R. 51-7-8 was a valid regulation and the deduction of the temporary total disability weeks approved by previous case law, citing another Court of Appeals decision, Cowan v. Josten's American Yearbook Co., 8 Kan.App.2d 423, 427, 660 P.2d 78 (1983). Mitchell, 41 Kan.App.2d at 538-39, 203 P.3d 76. We note a second Court of Appeals panel addressed this issue in a later decision and adopted the same conclusion. Barbury v. Duckwall Alco Stores, 42 Kan. App.2d 693, Syl. ¶ 3, 215 P.3d 643 (2009). Regulations an administrative agency is authorized to adopt are presumed valid, and the party challenging a regulation bears the burden to establish its invalidity. In re Tax Appeal of City of Wichita, 277 Kan. 487, 495, 86 P.3d 513 (2004). It is undisputed the director of workers compensation is authorized to adopt regulations administering and enforcing the Act. K.S.A. 44-573 and K.S.A. 74-717. The only remaining issue then is whether the regulation is inconsistent with the relevant statutes. Because Mitchell received temporary total disability followed by an award for permanent partial disability, the relevant statutes are K.S.A. 44-510c and K.S.A. 44-510d. K.S.A. 44-510c governs compensation for temporary and permanent total disability. It states a claimant can only receive medical benefits during the first week the claimant is totally disabled, unless the claimant is disabled a minimum of 3 weeks. After the first week, "weekly payments shall be made during such temporary total disability." K.S.A. 44-510c(b)(1). K.S.A. 44-510c(c) then states that the scheduled injury statute, K.S.A. 44-510d, governs when a permanent total or temporary total disability is followed by a permanent partial disability contained on the schedule. As discussed above, K.S.A. 44-510d governs compensation to injured workers who are permanently, but not totally, disabledif their injury appears on the schedule. It begins by restricting an injured worker to medical benefits during the first week of injury. Thereafter, compensation is to be paid according to the schedule, and the award is calculated using the statutorily provided formula. The statute then goes on to state disability is presumed to exist immediately after the injury if permanent disability is awarded and "compensation is to be paid for not to exceed the number of weeks allowed in the following schedule." (Emphasis added.) K.S.A. 44-510d(a). K.S.A. 44-510d(b) provides: "Whenever the employee is entitled to compensation for a specific injury under the foregoing schedule, the same shall be exclusive of all other compensation except the [medical] benefits provided . . ., and no additional compensation shall be allowable or payable for any temporary or permanent, partial or total disability." (Emphasis added.) The Barbury panel did a persuasive job of reconciling these statutes. It began by noting the injured worker clearly was entitled to temporary total disability under K.S.A. 44-510c, but that the statute directed the Board to K.S.A. 44-510d to calculate the award. The panel continued by explaining that K.S.A. 44-510d indicates the disability exists immediately following the injury. This suggests the number of weeks on the schedule encompasses the entire award for an injury to that scheduled member. Further, the panel reasoned the concluding statement in the statute that compensation is not to exceed the number of weeks on the schedule further emphasizes that the number of weeks contained on the schedule is designed to cover the entire award for an injury to a member, whether it is calculated as a total or a permanent award. 42 Kan.App.2d at 697, 215 P.3d 643. In Barbury, the injured worker received temporary total disability followed by permanent 63 partial disability to his leg. The panel's analysis concluded: "[T]he legislature has set an overall compensation limit for a scheduled injury to the leg of 200 weeks, part of which may have been provided as a temporary-total-disability compensation under K.S.A. 44-510c. Although K.S.A. 44-510c lets the employee receive temporary-total-disability compensation, it defers to K.S.A. 44-510d to determine compensation when a permanent scheduled injury follows a temporary total disability. And K.S.A. 44-510d explicitly provides that the compensation provided there `shall be exclusive of all other compensation' except medical benefits and amputation cases." 42 Kan.App.2d at 697, 215 P.3d 643. We find this reasoning logically follows the statutory language. K.A.R. 51-7-8 is in keeping with that reasoning. But Mitchell poses a final challenge to this view by urging this court to contrast these provisions with K.S.A. 44-510e, which establishes how an unscheduled permanent partial disability award is calculated. That provision requires the deduction of temporary total disability in the following calculation: "(2) find the number of disability weeks payable by subtracting from 415 weeks the total number of weeks of temporary total disability compensation was paid, excluding the first 15 weeks of temporary total disability compensation that was paid, and multiplying the remainder by the percentage of permanent partial general disability as determined under this subsection [a]." K.S.A. 44-510e(a)(2). Admittedly, this is a very clear instruction, and the above analysis of K.S.A. 44-510c and K.S.A. 44-510d is more difficult. But as the Barbury panel considered, this distinction is not surprising based on the differences in these statutory schemes. 42 Kan.App.2d at 698, 215 P.3d 643. K.S.A. 44-510e provides detailed instructions on how to calculate general body disability awards, i.e., injuries not on the schedule. K.S.A. 44-510c and K.S.A. 44-510d do not. Without doubt, the legislature could have made the instructions for calculating a scheduled injury more explicit, but that does not alter the analysis suggesting the legislature intended deducting temporary total disability awards. As such, K.A.R. 51-7-8 does not violate the statutes. The Board did not err by reducing the number of weeks assigned for Mitchell's permanent partial disability award by the number of weeks of temporary total disability awarded. ISSUE THREE: JOINT AND SEVERAL LIABILITY As discussed above, the Board found that both the overcompensation for the initial injury and the sustained repetitive work over a longer period of time after that injury combined to cause Mitchell's left and right extremity impairments. It assigned Mitchell's last day worked as the date of accident under the Act. But Travelers argues the secondary injury rule applies, which would make the date of accident under the statute December 31, 2003the date Mitchell suffered the initial thumb injury. The issue underlying this argument is which insurance carrier is liable. Travelers believes that if the secondary injury rule applies the date of accident is within Royal's coverage period. We first consider whether the secondary injury rule applies. Travelers argues the subsequent bilateral shoulder, carpal tunnel, and right elbow injuries flowed as a direct and natural result from the original thumb injury. Citing Dr. Do's testimony, Travelers claims the facts show the residual effect from the initial left thumb injury led to the right upper extremity injury, which in turn led to the left upper extremity injury. Travelers argues the secondary injury rule applies because the subsequent injuries were the natural and probable consequence of the left thumb break, so the date of injury for all impairments was the date the left thumb broke. Royal argues the subsequent injuries were new and distinct. Royal notes Mitchell began developing bilateral hand numbness 7 months after the break, even though Travelers claims Mitchell was overusing the right extremity as a result of trying to protect his initial thumb injury. Royal finds support for these arguments in the testimony of Mitchell and Dr. Murati. Royal further notes Mitchell 64 was released to return to work with no cast and no restrictions on April 15, 2005, which was 2 months before Mitchell first noticed right extremity problems. In dealing with Travelers' arguments, the Mitchell panel held the secondary injury rule did not apply because there was sufficient evidence supporting the Board's decision that a combination of the thumb injury and Mitchell's subsequent work activities caused his injuries. Therefore, the panel concluded the Board did not err in determining the dates of accident for each of Mitchell's repetitive trauma injuries were separate and distinct from the date of accident for his initial thumb injury. 41 Kan.App.2d at 533, 203 P.3d 76. As to the evidence regarding the cause of Mitchell's subsequent injuries, the panel found Travelers mistaken in its arguments that the evidence was undisputed. The panel noted Dr. Do's testimony, which Travelers relies upon, was arguably inconsistent and contradicted by other medical testimony that concluded Mitchell's subsequent injuries resulted from both the left thumb break and repetitive mini traumas each day he engaged in work activities. See 41 Kan.App.2d at 531-33, 203 P.3d 76. The panel concluded: "[C]ontrary to Travelers' suggestion, the Board did not ignore evidence establishing that Mitchell's repetitive trauma injuries were the natural and probable consequence of the initial thumb injury. Instead, the Board found that repetitive work and overcompensation contributed equally to cause Mitchell's injuries." (Emphasis added.) 41 Kan.App.2d at 533, 203 P.3d 76. We apply the standard of review applicable at the time of the agency action under review. K.S.A. 77-621(a)(2); see K.S.A.2009 Supp. 77-621(a)(2); Redd, Syl. ¶ 1. At the time at issue in this appeal, K.S.A. 77-621(c)(7) required review of the agency's factual determinations for evidence "that is substantial when viewed in light of the record as a whole." Case law defines substantial evidence as evidence possessing something of substance and relevant consequence to induce the conclusion that the award was proper, furnishing a basis to act from which the issue raised could be easily resolved. Graham v. Dokter Trucking Group, 284 Kan. 547, 553-54, 161 P.3d 695 (2007). Under this analysis, the Board's decision should be upheld if supported by substantial evidence, even though there is other evidence in the record supporting contrary findings. 284 Kan. at 554, 161 P.3d 695. We agree with the panel and hold the Board's findings are supported by substantial competent evidence in light of the record as a whole. As correctly noted by the panel, Dr. Do's opinion was conditioned on factors that both Mitchell and other medical experts disputed. The Board made a factual determination based upon that disputed testimony, which we will not disturb on appeal based on this record. The evidence supports a finding that Mitchell's subsequent bilateral shoulder, carpal tunnel, and right elbow injuries were the combined result of both repetitive work and overcompensation use from the initial thumb injury. Now we must determine the date of accident under the statutory scheme. K.S.A.2009 Supp. 44-508(d), which was amended effective July 1, 2005 (L.2005, ch. 55, sec.1), and was thus applicable prior to Mitchell's last day worked, establishes the date of accident for work-related injuries caused by a series of events, repetitive use, cumulative traumas, or microtraumas. It states: "[T]he date of accident shall be the date the authorized physician takes the employee off work due to the condition or restricts the employee from performing the work which is the cause of the condition. In the event the worker is not taken off work or restricted as above described, then the date of injury shall be the earliest of the following dates: (1) The date upon which the employee gives written notice to the employer of the injury; or (2) the date the condition is diagnosed as work related, provided such fact is communicated in writing to the injured worker. In cases where none of the above criteria are met, then the date of accident shall be determined by the administrative law judge based on all the evidence and circumstances; and in no event shall the date of 65 accident be the date of, or the day before the regular hearing." Kansas appellate courts have set as a bright-line rule that in repetitive microtrauma situations like carpal tunnel syndrome, the date of injury is the last day worked. See Kimbrough v. University of Kansas Med. Center, 276 Kan. 853, 855-57, 79 P.3d 1289 (2003). The Board's decision to set the date of accident for Mitchell's repetitive trauma injuries as his last day worked is in agreement with the statute and our case law. We hold the Board correctly recognized the date of accident for Mitchell's subsequent injuries (other than the initial left thumb) as July 15, 2005, i.e., Mitchell's last day of work for Petsmart. Given this particular factual scenario, we next consider the Board's decision to impose joint and several liability. Royal argues its coverage ended on January 31, 2004. It claims it would be unfair to impose joint and several liability when Royal no longer had a contractual obligation to provide coverage, especially since Mitchell's wage had increased and any benefits awarded would be higher than anticipated by the premium collected from Petsmart. Royal also argues joint and several liability cannot be imposed because the Kansas Workers Compensation Act does not provide for it. The Board found the injuries to Mitchell's left thumb and the repetitive activities he engaged in for his work combined to cause Mitchell's subsequent bilateral shoulder, carpal tunnel, and right elbow injuries. The Mitchell panel treated Travelers' and Royal's challenges to joint and several liability as separate issues for each insurer. It refused to address Royal's argument that Travelers was solely responsible because Royal failed to file a cross-appeal, depriving the panel of jurisdiction to consider this argument under K.S.A. 60-2103(h) (appellee must file notice of cross-appeal from adverse rulings in order to obtain appellate review of those issues). 41 Kan.App.2d at 528, 203 P.3d 76. We note Royal also did not seek this court's review of the panel's jurisdictional determination. Therefore, we have no jurisdiction to hear any challenge to the joint and several liability order as it relates to Royal's arguments because it failed to appeal from the Board's ruling. Turning to Travelers' argument, the insurance carrier predicates its entire attack against the Board's joint and several liability holding on the basis of its factual dispute with the Board's decision that Mitchell's subsequent injuries resulted from both the initial thumb injury and regular job activities. But we have upheld the Board's factual determinations, so Travelers' premise fails at its starting point. The argument is without merit. Finally, we agree generally with the notion expressed by the ALJ and in the case law that insurance carriers should not litigate disputes about their respective liabilities for the compensation awarded to an injured worker in the compensation proceedings. Instead, these matters should be decided in separate proceedings between the carriers brought for such purposes and outside the Board's jurisdiction. See Kuhn v. Grant County, 201 Kan. 163, Syl. ¶¶ 3-5, 439 P.2d 155 (1968) (discussing the hardship that may confront a claimant when insurance carriers litigate claims and equities existing between themselves during the injured worker's compensation process); Hobelman v. Mel Krebs Construction Co., 188 Kan. 825, 830-33, 366 P.2d 270 (1961) (where employee of two employers is injured, degrees of liability between employers and their carriers are not to be decided in workers compensation proceedings); Tull v. Atchison Leather Products Co., 37 Kan.App.2d 87, 93-94, 150 P.3d 316 (2007) (not an erroneous application of law when an ALJ or the Board embraces the general rule stated in Kuhn). We affirm the Board's judgment assigning joint and several liability to Royal and Travelers. CONCLUSION We reverse the Board and the Court of Appeals in their determinations that Mitchell's multiple injuries should be combined at the highest level of the scheduled injury. Instead, the Board is required to calculate Mitchell's permanent partial disability as separate injuries under the schedule set out 66 in K.S.A. 44-510d, as more fully explained in this opinion and Redd v. Kansas Truck Center, ___ Kan. at ___-___, 239 P.3d 66. We remand the case for the purpose of making that recalculation consistent with this ruling. We affirm the Board's deduction of the weeks of Mitchell's temporary total disabilities benefits from the permanent partial disability award. We affirm the Board's factual findings that Mitchell's subsequent repetitive trauma injuries resulted from the combination of his work activities and his initial thumb injury. We also affirm the Board's decision to assign joint and several liability to both Royal and Travelers for Mitchell's subsequent bilateral shoulder, carpal tunnel, and right elbow injuries. Affirmed in part, reversed in part, and remanded with directions. DAVIS, C.J., not participating.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264386/	879 F.Supp. 165 (1995) Efrain RIVERA-VEGA, Acting Regional Director for Region 24 of the National Labor Relations Board, for and on Behalf of the NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CONAGRA, INC. and/or Conagra Grain Processing Companies, Inc. and Molinos de Puerto Rico, Inc., Respondents. Civ. No. 94-1798-DRD. United States District Court, D. Puerto Rico. March 6, 1995. 166 Antonio F. Santos-Bayron, N.L.R.B., Region 24, Hato Rey, PR, for petitioners. Roger J. Miller, McGrath, North, Mullin & Kratz, P.C., Omaha, NE, for defendant ConAgra, Inc. Angel Munoz-Noya, Lespier & Munoz-Noya, San Juan, PR, for defendant Molinos de Puerto Rico, Inc. OPINION AND ORDER DOMINGUEZ, District Judge. Pending before this Court is defendants' Motion to Stay Judgement (Docket # 24) and Petitioners' opposition thereto (Docket # 26). I. STAY STANDARDS The standard that guides trial courts on stay motions under FRCP Rule 62(c) was set forth by the Supreme Court in the case of Hilton v. Braunskill, 481 U.S. 770, 776-77, 107 S.Ct. 2113, 2119, 95 L.Ed.2d 724 (1987). We examine basically four criteria (1) whether applicant makes a strong showing of success on the merits; (2) whether applicant will be irreparably injured absent relief; (3) whether issuance of the stay will injure the other parties; (4) where public interest lies. Different Rules of Procedure govern the power of district courts and courts of appeals to stay an order pending appeal. See Fed.Rule Civ.Proc. 62(c); Fed.Rule App.Proc. 8(a). Under both Rules, however, the factors regulating the issuance of a stay are generally the same: (1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies. See, e.g., Virginia Petroleum Jobbers Assn. v. FPC, 104 U.S.App. D.C. 106, 110, 259 F.2d 921, 925 (1958); Washington Metropolitan Area Comm'n v. Holiday Tours, Inc., 182 U.S.App.D.C. 220, 221-222, 559 F.2d 841, 942-844 (1977); Garcia-Mir v. Meese, 781 F.2d 1450, 1453 (CA11 1986); Accident Fund v. Baerwaldt, 167 579 F.Supp. 724, 725 (WD Mich.1984); see generally 11 C. Wright & Miller, Federal Practice and Procedure Sect. 2904 (1973).[1] II. LIKELIHOOD TO SUCCEED We first examine the criteria of "likelihood to succeed." In evaluating defendants' probable likelihood of success we consider that in addressing a 10(j) petition by a NLRB Regional Director, a district court focuses on two issues (1) whether there is "reasonable cause to believe that a respondent has violated the Act" and "whether temporary injunctive relief is just and proper." Asseo v. Pan American Grain Co., 805 F.2d 23, 25 (1st Cir.1986). As to the criteria of "reasonable cause to believe that the Act has been violated," the district court needs only to find that the Board's position is "fairly supported by the evidence." Asseo v. Centro Medico del Turabo, 900 F.2d 445, 450 (1st Cir.1990), Maram v. Interamericana de Puerto Rico, Inc., 722 F.2d 953, 958-959 (1st Cir.1983); Asseo v. Pan American Grain Co., Inc., supra. The district court should not resolve contested factual issues and should defer to the Board's version of the facts if "within range of rationality," Maram v. Universidad Interamericana, supra. The trial court upon resolving a 10(j) petition is not authorized to decide whether an unfair labor practice actually occurred. Asseo v. Centro Medico del Turabo, supra, at 450. Hence, our role is limited under the above set guidelines. A. Duty to Provide Financial Information Defendants insist that the facts of the instant case conform to the fact pattern under the case of Nielsen Lithographing Co., 305 NLRB 697, 1991 WL 253920 (1991). Defendants aver that their bargaining position is based not on a "could not" claim but under a "would not" claim. The ALJ, the ultimate trier of facts, upon an examination based on the record as a whole and after weighting all the evidence may decide that the instant case falls in the category of "would not" under the Nielsen case. However, the role of the court in examining the record is narrower. Our role is limited to determine if the assertions of the Regional Director are "fairly supported by the evidence." Asseo v. Centro Medico del Turabo, supra. In the instant case there are facts on the record that fairly support[2] the conclusion that Respondent was under obligation to disclose financial data under the doctrine of the Shell Co., 313 NLRB No. 12, 1993 WL 491815 (1993)[3]; or under Teleprompter Corp. v. NLRB, 570 F.2d 4 (1st Cir.1977).[4] Since the record contains facts that "fairly support" the Regional Director's version that the case may fall under the doctrine of the case of Shell Co., supra, and/or under the case of Teleprompter v. NLRB, supra, Respondent does not have a high probability of ultimate success on the issue on appeal. B. The Impasse Respondents claim that the parties reached an impasse because notwithstanding that the Union on October 29, 1993 decreased its demands from its previous position and stated that "we have even more flexibility" the Union never agreed to a reduction in wages and/or terms and conditions under the expired agreement as urged by Respondent. There is evidence on the record, however, that fairly supports the Regional Director's theory that there was no valid impasse. 168 Firstly, bad faith bargaining caused by failure to disclose pertinent information, bars a valid impasse. Bolton-Emerson, Inc. v. NLRB, 899 F.2d 104 (1st Cir.1990); NLRB v. Herman Sausage Inc., 275 F.2d 229 (5th Cir.1960); United Contractors, 244 NLRB 72, 1979 WL 9409 (1979), enforced 713 F.2d 1322 (7th Cir.1983); Palomar Corp. & Gateway Serv. Co., 192 NLRB 592 (1971) (refusal to disclose data barred impasse). Secondly, Respondents in their Motion to Stay understate the interchange of communications of both parties leading to the alleged claimed impasse of October 28, 1993. The Union decreased its demands and stated that "the Union has offers to make that are different." Management then countered in writing stating that "the time to bargain is over" and declined the Union invitation to meet and further negotiate (Joint Exhibit 29)[5]. Latter, the Union on October 29, 1992 stated in a letter that "we still have more flexibility." Under the above fact scenario, the conclusion that there was no de facto impasse urged by the NLRB Regional Director is "fairly supported" by the record and grounded under the case of Teamsters Local Union No. 639 v. NLRB, 924 F.2d 1078, 1084 (D.C.Cir.1991). "If either negotiating party remains willing to move further toward an agreement, an impasse cannot exist; the parties' perception regarding the progress of the negotiations is of central importance to the Board's impasse inquiry." C. Union Waiver to Receive Information by Failing to Address Respondents Confidentiality Concern Respondents allege that the Union waived its right to receive the requested information when it failed to address the Company's concern of confidentiality based on the Union's representation of employees working for Respondents' competitors.[6] The argument fails when Respondent refused unconditionally to provide the requested information. Management in a letter of December 29, 1993 denied unequivocally and unconditionally to provide the following information: a) Financial Statements b) Profit margins of ConAgra Group Feed Industries. c) Salaries and benefits of all companies that make up ConAgra. d) All ConAgra collective bargaining agreements for the last ten years.[7] After a review (JE # 96) of the record, the Court understands that the offer to disclose information made by the Company subject to a confidentiality agreement on the meeting of February 23, 1994 refers to "financial information" and not to other requested information described in the previous paragraph.[8] (Profit margins of other ConAgra Co.; salaries & benefits of other ConAgra companies; ConAgra collective bargaining agreements) Further, the disclosure of information offered by Respondent was again conditioned on relevancy which had previously been met by Respondents' own comparison of Molinos' operation to other ConAgra continental corporations. We, therefore, reject the allegation of waiver claimed by Respondent. III. IRREPARABLE DAMAGES Respondents have failed to prove that the concession of the 10(j) relief will 169 cause to Respondent irreparable damages. Repossessing former employees in their jobs to replace temporary replacement employees at a higher labor cost fails to meet the irreparable damages standards. The Court further finds speculative that Respondents will "permanently lose customers market share and sales volume" as claimed. On the other hand, in Kaynard v. Bagel Bankers Council of Greater N.Y., 57 Lab. Cas. (CCH) P. 12, 499 No. 29, the Court held that an eleven-month lockout produced serious harm to the Union, the employees and the bargaining process. "The effects include the drifting away of union membership, the debilitation of the union's bargaining vigor, and the loss of revenue necessary to sustain its administration and the benefits it is committed to provide its members. The public at large, too, has suffered loss through the undermining and rendering nugatory of provisions of the Act." See also Silverman v. Reinauer Transportation, 130 LRRM 2505, 2507, 1988 WL 159172 (D.N.Y.1988) affd. unpub., 880 F.2d 1319 (2nd Cir. June 23, 1989), wherein the court found that union members without work for nine months may suffer irreparable damages by being forced to find new jobs and/or by relocation and by further waiting until the NLRB makes a final decision and until the decision is enforced by an order from a Circuit Court of Appeals.[9] Finally in Asseo v. Pan American Grain Co., Inc., supra, at 27-28 in affirming a 10(j) injunction the First Circuit in ordering the reinstatement of four employees, found irreparable harm to the employees and the bargaining process. Quoting from Eisenberg v. Wellington Hall Nursing Home Inc., 651 F.2d 902, 906 (3rd Cir.1981) the court stated: "If union supporters are excluded from the bargaining process, pending resolution of unfair labor practice charges, the position of the designated bargaining representative will in all likelihood be substantially undermined. All members of the bargaining unit may be affected by such an erosion of union support. Furthermore, the discharge of "active and open union supporters ... risk[s] a serious adverse impact on employee interest in unionization." Kaynard v. Palby Lingerie, Inc., 625 F.2d 1047, 1053 (2d Cir.1980)." IV. THE PUBLIC INTEREST The First Circuit has reiterately held that the public interest is served by the granting of interim 10(j) relief thereby strengthening the collective bargaining process. Asseo v. Centro Medico del Turabo, 900 F.2d 445, 455 (1st Cir.1990); Asseo v. Pan American Grain Co., 805 F.2d at p. 28.[10] "Finally, we agree with the district court's conclusion that the public interest will be furthered by the imposition of the interim injunctive relief. If the goal of the labor laws and regulations is to strengthen the bargaining process, see Asseo v. Pan American Grain, supra at 28, then ordering bargaining to commence cannot be contrary to public interest." CONCLUSION Having examined the governing criteria for a stay under FRCP 62(c) set forth under the Supreme Court case of Hilton v. Braunskill, supra, the Court DENIES THE STAY requested by Respondent. NOTES [1] We note that Respondent also urges a stay by the posting of a bond. However, "this kind of stay may not be obtained in injunction cases, receivership cases or in patent infringement cases, in which an accounting has been ordered. In those three classes of cases it is discretionary with the court whether to allow stay". See generally 7c Wright & Miller & Kane, Federal Practice and Procedure, Section 1905, (1973). [2] The facts are described at 876 F.Supp. 1350, 1365-66 of the Opinion and Order entered on 10 February 1995. [3] Apparent Respondents claim of lack of competitiveness but in reality the "essential core" bargaining position is grounded on assertions of a present threat to the employer's survival and an inability to pay at the present time or during the term of the successor agreement. [4] The employer itself puts profitability in contention; in the case at bar the employer claimed that its feed business was losing money, that sales had declined and that it needed deep concessions to survive. [5] Letter of Respondents of October 28, 1993. [6] The request of Respondent is also based according to the Company on the Union's "proclivity to gratuitously divulge competitive labor costs" garned by Respondents. (See Motion to Stay, p. 15-16) [7] The requested information (profit margins, salaries and benefits, and collective bargaining agreements of ConAgra) became relevant when on the first bargaining session Respondents' representative stated: "... our company will now be measured different from what we were measured in the past. This is because the Grain Processing Company (ConAgra) has more than sixty companies and they will be comparing us to them, not with results of the other companies in the island." [8] At the February 23, 1994 meeting the parties discussed other requested information and described them specifically, when discussing potential disclosure the same was limited to "financial information". [9] We note that at the meeting of February 3, 1994, J.F., 96, Respondents informed their intentions to litigate the instant case up to the Supreme Court, if necessary, for a time that could take according to Respondent up to five years. [10] "Finally we find that the public interest will not be adversely affected by the granting of injunctive relief", Pan American Grain Co., Inc., at p. 28.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264396/	9 Cal.Rptr.3d 29 (2004) 114 Cal.App.4th 1296 Patricia HENLEY, Plaintiff and Respondent, v. PHILIP MORRIS INC., Defendant and Appellant. No. A086991. Court of Appeal, First District, Division Four. January 20, 2004. Review Granted April 28, 2004. 38 Shook, Hardy & Bacon, Gerald V. Barron, Lucy E. Mason, San Francisco, Mordecai Dempsey Boone, Tampa, FL, Arnold & Porter, Ronald C. Redcay, Los Angeles, Murray R. Garnick, Robert A. McCarter, Washington, DC, for Appellant. Law Offices of Daniel U. Smith, Daniel Upham Smith, Los Angeles, Ted W. Pelletier, Wartnick, Chaber, Harowitz, Smith & Tigerman, Harry F. Wartnick, Law Offices of Madelyn J. Chaber, Madelyn Joyce Chaber, San Francisco, for Respondent. SEPULVEDA, J. Plaintiff brought this action for personal injuries allegedly sustained as a result of defendant's tortious misconduct in the manufacture and marketing of cigarettes. The jury returned a special verdict awarding plaintiff $1.5 million in compensatory damages and $50 million in punitive damages. The trial court denied defendant's motions for new trial and judgment notwithstanding the verdict, except that it ordered a new trial on punitive damages unless plaintiff consented to reduce the punitive award to $25 million. Plaintiff consented to the reduction, and defendant filed a timely appeal. In our original opinion we affirmed the judgment in its entirety. (Henley v. Philip Morris (2001) 93 Cal.App.4th 824, 113 Cal.Rptr.2d 494, review granted Jan. 29, 2002, S102941 (Henley I).) The Supreme Court granted review and ultimately retransferred the matter to us with directions to "vacate [our] decision and to reconsider the cause in light of Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 123 Cal.Rptr.2d 40, 50 P.3d 751 [(Myers)]), and Naegele v. R.J. Reynolds Tobacco Co. (2002) 28 Cal.4th 856, 123 Cal.Rptr.2d 61, 50 P.3d 769 [(Naegele)])." We concluded that many of defendant's objections, including its claims of error under those cases, had not been preserved for appeal. (See pt. I., below.) Defendant again petitioned the California Supreme Court, which again remanded the matter for reconsideration, this time in light of State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (Campbell). In that case the United States Supreme Court elaborated considerably upon the federal constitutional principles constraining civil punitive damage awards. We have concluded that in light of that decision, the $25 million in punitive damages awarded in this matter cannot be sustained on the present record, but that an award of $9 million would satisfy the constitutional standards enunciated in that case. Accordingly we will reverse for a new trial on punitive damages unless plaintiff agrees to a reduction of the judgment to reflect such smaller award. Following a further transfer from the Supreme Court, we have made certain technical corrections to the 39 dispositional language. In all other respects we reiterate our previous decision. INTRODUCTION AND BACKGROUND We begin with a fundamental principle overlooked by defendant: "A judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error." (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 349, p. 394.) Thus in ascertaining the underlying facts for purposes of appellate analysis, the reviewing court "must consider the evidence in the light most favorable to the prevailing party, giving him the benefit of every reasonable inference, and resolving conflicts in support of the judgment." (Id. at § 359, p. 408, italics in original.) Viewed most favorably to the judgment, the evidence shows that plaintiff, who was born in 1946, began smoking cigarettes in 1961 or 1962, at the age of 15, when she "lit up" with some school friends outside a dance. At that time she felt smoking was "cool" and "grown up," provided the pleasure of the forbidden, made her look older, and served as a "rite of passage." Then and for some years thereafter, nobody told her that cigarettes could cause her serious disease. There were no warnings on cigarette packages or in advertisements. Plaintiff was not taught in school about the dangers of tobacco. As a result she believed that cigarettes, which contained "[t]obacco, pure and simple," were "not a harmful product." Nor did she know that cigarettes or nicotine could be addicting. Nothing in the advertising she saw suggested that if she started smoking she might be unable to stop. The jury could also find that starting no later than December 1953, defendant and other cigarette manufacturers agreed to act together to counter mounting scientific evidence about the health risks of cigarette smoking. By the time plaintiff began smoking, defendant knew that tobacco contained numerous carcinogenic substances as well as flavoring additives that also produced carcinogenic compounds upon combustion. Tobacco manufacturers were also aware of epidemiological studies that showed a strong correlation between smoking and the incidence of lung cancer. Yet they launched a concerted public relations campaign to deny any link between smoking and serious illness. A major part of this strategy was the creation of a "research institute" that would, as the public was told, attempt to find the truth about smoking and health though in fact it was permitted to conduct very little research that might confirm a link, serving mainly, as the jury was entitled to find, to gather ammunition against tobacco's detractors. Other strategies included manipulating the mass media to suppress or make light of adverse news developments, such as new studies or reports. The jury could also find that defendant engaged in saturation advertising, much of it consciously targeting the teenage audience from which new ("replacement") smokers had to come. Defendant knew that persons who did not begin smoking during their teen years were unlikely to do so. In particular, defendant sold the brand of cigarette plaintiff preferred, Marlboro, using symbols of the independence, autonomy, and mature strength for which teenagers were understood to yearn. The jury could find that these targeted teenage consumers possessed less critical judgment, and were more receptive to marketing manipulation generally, than might be the case with adults. The jury 40 could find that teenagers who went past the experimentation phase became addicted to tobacco, as a result of which they found it extremely difficult to stop smoking and often suffered impaired judgment with respect to the consequences of continuing to do so.[1] The jury could find that the strategy of marketing to teenagers and causing them to become addicted to its products was central to the tremendous success and profitability of the Marlboro brand in particular, helping defendant to become one of the largest and most successful corporations in the world. In 1966, as evidence of health risks mounted, Congress required that cigarette packages bear the relatively mild warning that smoking "may be hazardous." In 1969, Congress required a somewhat stronger warning and required that it appear in advertising as well as on packages. At the same time, Congress explicitly preempted any state law imposing a "requirement or prohibition with respect to advertising or promotion" of cigarettes language that has since been construed to preempt many but not all common-law tort claims. Although the warnings have since been further strengthened, this partial federal immunity remains in place, and is one of defendant's major defenses here. (See pt. II., below.) In 1988 the tobacco industry acquired a safe harbor under California law when, riding the coattails of a legislative compromise, tobacco was listed among "common consumer products" in former section 1714.45, a statute construed the following year to create an almost complete "immunity" from tort liability.[2] The Legislature repealed that protection effective January 1, 1998, but defendant contended below that it nonetheless applied to bar most or all of plaintiff's claims. (See pt. I., below.) The jury would have been entitled to find that well before these legislative defenses became applicable, plaintiff had become an addicted smoker with sharply impaired judgment and will where cigarettes were concerned. Plaintiff testified that on the subject of cigarette smoking and health, "my brain wasn't going to register anything that anybody said." When she saw the first package warnings, she minimized the perceived "degree[ ] of danger," thinking to herself that it was also "dangerous to walk across the street." She testified that while she heard the United States Surgeon General was saying things about cigarettes, she also knew "that the tobacco companies were saying different." As a result, the package warning "didn't faze me one way or the other. I wasn't going to give the cigarettes up at that point." Plaintiff's first regular brand of cigarettes was Marlboro, and it remained her favorite brand throughout almost all of her 35-year smoking history. From age 15 until she was about 43 years old (around 1989), she apparently smoked one-and-a-half to two packs a day of "Marlboro Red," a brand rated to deliver relatively high amounts of tar and nicotine. At that age, however, she switched to Marlboro Lights, a lower-tar brand, on what the jury was entitled to view as the direct advice of a Philip Morris agent. Plaintiff testified 41 that around that time she began to hear that "low-tar cigarettes were better. You wouldn't get as much tar and nicotine and, you know, their advertising on the low-tar cigarettes was really out there. [¶] I'm thinking, `Well, okay. Maybe there's something to this.' So when I was approximately 43, I decided that, `Well, I'll check into this and maybe I'll change from the Reds to the Lights.' [¶] So I did indeed call the Marlboro, Philip Morris company and expressed, you know, my concerns as to, `Is it really true? Is there less tar in this or less nicotine?' [¶] And I was assured at the time that if I was concerned that, yes, I could switch to the Lights...." She did so and, in a few weeks, had more or less doubled her intake, to three-and-a-half packs a day. By mid-October 1997 plaintiff "was feeling really bad" and "down for the count with what I thought was heavy-duty flu." She was diagnosed in February 1998 with small-cell carcinoma of the lung. The jury was more than entitled to find that this affliction was directly caused by cigarette smoking. ANALYSIS I. "IMMUNITY" UNDER FORMER SECTION 1714.45 A. Substantive Background. As in effect from 1988 through the end of 1997, former section 1714.45 granted tobacco manufacturers "immunity" from most claims for personal injury caused by their products.[3] By amendments effective January 1, 1998, the Legislature repealed that protection. In Myers the Supreme Court held that the repeal was "not retroactive," but was "prospective only." (Myers, supra, 28 Cal.4th 828, 847, 123 Cal.Rptr.2d 40, 50 P.3d 751; see Naegele, supra, 28 Cal.4th 856, 861, 123 Cal.Rptr.2d 61, 50 P.3d 769.) Specifically, the repeal did not operate to impose liability for conduct that was protected by the statute when it occurred. However, the repeal "removed the protection that the Immunity Statute gave to tobacco companies for their conduct occurring before [former section 1714.45's] effective date." (Myers, supra, at p. 847, 123 Cal.Rptr.2d 40, 50 P.3d 751, italics omitted.) The net result is that the former statute "continues to shield defendant tobacco companies in product liability actions but only for conduct they engaged in during the 10-year period when the Immunity Statute was in effect. The liability of tobacco companies based on their conduct outside the 10-year period of immunity is governed by general tort principles." (Id. at p. 848, 123 Cal.Rptr.2d 40, 50 P.3d 751, italics omitted; see Naegele, supra, 28 Cal.4th at p. 867, 123 Cal.Rptr.2d 61, 50 P.3d 769.) In Naegele the court considered the scope of the protection afforded by the former statute for conduct while it was in effect. It summarized its conclusions as follows: "[T]he Immunity Statute bars plaintiff's claims, however labeled, where they allege no more than personal injury caused by dangers or risks inherent in the consumption of tobacco products such as cigarettes. But the Immunity Statute does not bar plaintiff's claims that the defendants adulterated the cigarettes plaintiff smoked with additives that exposed him to dangers not inherent in cigarette smoking. Nor does the Immunity Statute shield tobacco companies from liability for conduct outside the immunity period." (Naegele, supra, 28 Cal.4th at p. 867, 123 Cal.Rptr.2d 61, 50 P.3d 769.) 42 B. Preservation of Issues for Appeal. In our original opinion we held that defendant had not preserved any contention that former section 1714.45 afforded anything less than a complete defense. We noted that defendant had only asserted the statute in the trial court as a basis for a nonsuit or directed verdict, i.e., as a complete defense to plaintiff's entire action, except her claim for breach of express warranty, which was expressly exempted by the statute itself.[4] We wrote that the trial court's denial of the motion for nonsuit or directed verdict was the only "specific and reviewable ruling" before us. (Henley I, typed opn. at p. 6.) We held that defendant had failed to preserve various other claims of error suggested in its briefs.[5] We noted this failure again when we later addressed defendant's argument that the abolition of the former immunity would offend the prohibition against ex post facto laws. We reasoned that this argument could at most operate to preclude the imposition of punitive damages based on conduct that was immunized when it occurred. We held that, as so understood, the ex post facto argument had not been preserved for appeal.[6] We concluded that the trial court did not err in denying defendant's motions for nonsuit and directed verdict because the repeal of former section 1714.45 permitted plaintiff to pursue her claims at least in part. Since defendant had not asserted any more limited defense based on the former statute, we did not reach the question whether some such limited defense might exist. In Myers and Naegele the Supreme Court held that the repeal of former section 1714.45 left intact a time-limited immunity that precludes consideration, in support of most theories of liability, of a 43 tobacco manufacturer's conduct while the former statute was in effect, i.e., from January 1, 1988 through December 31, 1997. At the same time, the court confirmed our own prior conclusion that the former statute no longer affords a complete defense where, as here, the plaintiff's injuries are attributable to tortious conduct both within and without the immunity period. As applicable here, the rule of Myers/Naegele means that, upon request, defendant would have been entitled to prevent the jury from considering its conduct during the immunity period in support of punitive damages or in support of most theories of compensatory damages. However the rule of those cases does not affect our previous conclusion that the trial court correctly denied defendant's motions for nonsuit or directed verdict. The question now before us is whether defendant has preserved any claim of error predicated on the time-limited immunity afforded under Myers/ Naegele. Although our prior opinion may be understood to answer this question in the negative, we have revisited the issue de novo in light of the Supreme Court's vacation of that opinion. After reviewing the parties' supplemental briefs and the applicable principles of appellate procedure, we have once again concluded that defendant has failed to preserve for appeal any claim of a partial defense under former section 1714.45, including the time-limited immunity conferred by Myers/Naegele. C. Failure to Raise Point Below. Defendant's basic complaint under Myers/Naegele is that the jury was permitted to consider conduct during the immunity period in support of plaintiff's claims for both compensatory and punitive damages. At its core this is a contention concerning the lack of relevancy, or limited relevancy, of such evidence. Yet at no time prior to the verdict did defendant so much as hint to the trial court that section 1714.45 might operate to restrict the admissibility of such evidence or the purposes for which it could be considered by the jury. Defendant could have raised such a point by several means, including motion in limine, contemporaneous objection to evidence (with request for admonition if the evidence was admissible for a limited purpose), motion to strike (if the evidence came in before an objection could be lodged), and appropriate instructions at the end of trial. Defendant invoked none of these remedies or devices. Instead defendant cited section 1714.45 solely as the basis for an all-or-nothing defense, and sat mute while plaintiff introduced, and the jury heard and considered, evidence of conduct during the immunity period. The record discloses no explanation for this conduct. It does not suggest, for example, that defendant was compelled to forego a more limited application of former section 1714.45 in order to raise the statute as a complete bar. On the contrary, it appears that defendant was entirely free to assert both positions in the alternative, i.e., that the former statute continued to afford a complete defense but, failing that, rendered conduct during the immunity period inadmissible or admissible only for limited purposes. Ordinarily the failure to raise a legal theory by appropriate objection or motion in the trial court precludes consideration of that theory on appeal. (Vikco Ins. Services, Inc. v. Ohio Indemnity Co. (1999) 70 Cal.App.4th 55, 66-67, 82 Cal.Rptr.2d 442 ["As a general rule, issues or theories not properly raised or presented before the trial court will not be considered on appeal."]; see 9 Witkin, Cal. Procedure, supra, § 394, p. 444.) This rule may not bar consideration of at least some 44 objections that are deemed "jurisdictional." (See 9 Witkin, Cal. Procedure, supra, § 398 at p. 450 [rule does not bar consideration of "[a] noncurable defect of substance where the question is one of law, such as lack of jurisdiction"]; see Vikco Ins. Services, Inc. v. Ohio Indemnity Co., supra, 70 Cal.App.4th at p. 67, 82 Cal.Rptr.2d 442 [court would exercise its discretion to consider "a jurisdictional issue of first impression"].) However, at oral argument counsel for defendant disclaimed any contention that the claimed error here is jurisdictional in this sense. He contended that the cognizability of the point is affected by the heightened judicial oversight employed with respect to punitive damage awards, but no authority has been cited to or found by us suggesting that otherwise noncognizable error in the admission of evidence or instructions concerning it can be raised on appeal without a predicate objection in the trial court. (Cf. Adams v. Murakami (1991) 54 Cal.3d 105, 109-110, 115 fn. 5, 284 Cal.Rptr. 318, 813 P.2d 1348 [failure to require evidence of defendant's financial condition cognizable on appeal despite absence of predicate objection because absence of such evidence thwarts effective appellate oversight of award]; Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1283-1286, 31 Cal.Rptr.2d 433 [to same effect].) We turn to the question whether defendant has brought itself within any other exception to the rule generally barring points on appeal that were not raised by appropriate objection in the trial court. D. Newly Decided Point of Law. We first consider whether defendant is excused from the requirement of a predicate trial court objection because the authority on which it now relies was only decided after trial. Defendant contends that its failure to raise the concept of an immunity window in the trial court is "excusable as a matter of law given that, at the time of trial, the proper scope of immunity was unsettled." The implication is that whenever a previously unsettled issue of law is authoritatively resolved after trial, a party benefiting from the new rule may assert it on appeal whether or not any relief consistent with that rule was requested in the trial court. Such a proposition is not borne out by the cases. Although courts may choose to consider a new point on appeal where it rests on newly decided authority, this exception does not properly apply unless it appears that the new rule could not fairly be anticipated at the first trial, or its assertion would have been futile because it conflicted with then-governing law.[7] 45 Defendant quotes the broad statement in In re Marriage of Moschetta (1994) 25 Cal.App.4th 1218, 1227, 30 Cal.Rptr.2d 893 (Moschetta), that "a court will consider on appeal a new point of law decided while the appeal is pending." Read in context, however, that statement is entirely consistent with the qualifications we have just noted. The Moschetta court went on to quote, and apply in this context, Witkin's statement of the parallel exception to the rule against changing one's "theory of trial" on appeal: "`A court may refuse to follow the doctrine [of not hearing new arguments on appeal] where, after trial, there is a change in judicially declared law which validates a theory that would have been rejected if presented under the case law as it existed at the time of trial. [Citation.]'" (Moschetta, supra, 25 Cal.App.4th at p. 1227, fn. 12, 30 Cal.Rptr.2d 893, italics added, bracketed material in original; see now 9 Witkin, Cal. Procedure, supra, § 406, at p. 457; Marsango v. Automobile Club of So. Cal. (1969) 1 Cal.App.3d 688, 694, 82 Cal.Rptr. 92.) Moreover the newly raised issue in Moschetta the enforceability of surrogate parent contracts was "a matter of intense public and legal concern." (Moschetta, supra, 25 Cal.App.4th at pp. 1227-1228, 30 Cal.Rptr.2d 893.) In addition, the court's consideration of the point did not necessitate a retrial because the court rejected the newly asserted objection on the merits. (Id. at p. 1231, 30 Cal.Rptr.2d 893.) As the court noted, "One of the reasons parties are not normally allowed to raise new issues on appeal is that it is unfair to their opponents who did not have the opportunity to attack that theory factually or legally in the trial court, and to the trial court itself, which may be required to retry issues that might have been handled more efficiently the first time around." (Id. at p. 1227, 30 Cal.Rptr.2d 893.) The latter danger was obviated in Moschetta by the fact that the new point lacked merit and reversal was not required. Here, in contrast, the successful assertion of the newly asserted objections would necessitate a new trial. A similar factor distinguishes the second case cited by defendant, in which the court relied on newly available authority to direct entry of judgment for the appellant. (Arntz Contracting Co. v. St. Paul Fire & Marine Ins. Co. (1996) 47 Cal.App.4th 464, 493, 54 Cal.Rptr.2d 888; see Claremont Imp. Club v. Buckingham (1948) 89 Cal.App.2d 32, 33, 200 P.2d 47 [judgment upholding racially restrictive covenant reversed based on intervening holding that such covenants are judicially unenforceable; had intervening decision been rendered before trial, "judgment for the defendants would have followed necessarily"; in light of decision "the whole purpose of the litigation fails"].) These cases address pure issues of law on undisputed, or materially undisputed, facts. In such a situation consideration of the newly raised point will not necessitate a retrial; rather a final judgment will be entered in favor of one of the parties. Permitting the point to be raised therefore does not implicate the considerations of economy and fairness on which the requirement of predicate objections is based.[8] 46 Indeed, we have found no case in which a judgment was reversed for a new trial after an appellant failed to raise appropriate objections in the trial court, even where the point rested on newly issued judicial clarifications of previously unsettled law.[9] For such a result to obtain, it would have to appear not simply that new authority would have mandated somewhat different proceedings at trial, but that the balance of fairness and judicial economy weighed distinctly in favor of excusing the appellant from the usual rule. This is not such a case. Defendant has offered no excuse for not raising the concept of an immunity window prior to the verdict. The enactment and subsequent repeal of tobacco company immunity in section 1714.45 raised delicate issues of statutory construction, but the possible answers to the question took only three shapes: (1) the repeal could have been wholly ineffective to reinstate tobacco company liability, such that tobacco defendants could only be liable for conduct taking place after the statute was repealed; (2) the repeal could have utterly abolished the defense, as though the former immunity had never existed; or (3) the repeal could have been held to have an intermediate effect. The most obvious rule in the third category is the one adopted by the Supreme Court in Myers/Naegele, i.e., that the former statute continued to shield conduct which was undertaken under the protection of the statute, i.e., while the statute was in effect. This outcome gives the 1998 repeal a substantial effect by restoring the application of basic tort law to a great deal of tobacco company conduct. At the same time, it protects the reliance interests which lie at the heart of the judicial aversion to "retroactive" changes in substantive law. The Supreme Court has summarized the governing jurisprudential concern as follows: "[T]he presumption against retroactive legislation is deeply rooted in our jurisprudence, and embodies a legal doctrine centuries older than our Republic. Elementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and to conform their conduct accordingly; settled expectations should not be lightly disrupted. For that reason, the `principle that the legal effect of conduct should ordinarily be assessed under the law that existed when the conduct took place has timeless and universal appeal.'" (Landgraf v. USI Film Products 47 (1994) 511 U.S. 244, 265, 114 S.Ct. 1483, 128 L.Ed.2d 229, italics added, fns. omitted, quoting Kaiser Aluminum & Chemical Corp. v. Bonjorno (1990) 494 U.S. 827, 855, 110 S.Ct. 1570, 108 L.Ed.2d 842 (conc. opn. of Scalia, J.).) Defendant cannot claim to have been unaware of this concern; it quoted the foregoing passage in its memorandum in support of nonsuit. Similarly it quoted language from a federal district court order holding the repeal of section 1714.45 "not retroactive" in the sense that the tobacco defendants there were "`immune from liability for Plaintiff's tobacco-related personal injuries caused by conduct occurring during the effective period of the 1987 statutory amendment.'" (Italics added, underlining removed.) Yet defendant at no time prior to verdict suggested to the trial court that the net effect of the repealed immunity might be to render certain evidence inadmissible or to place limitations on the purposes for which such evidence could be admitted. Defendant argued only that the former statute continued to afford the same categorical defense it provided before its repeal.[10] Any doubt about the foreseeability of the Myers/Naegele immunity window is dispelled by defendant's own allusion to this concept immediately after trial. In its new trial memorandum, defendant asserted for the first time that, "[a]t a minimum, the jury should have been instructed that it could not consider Defendant's conduct during the 1988-1997 period in determining Philip Morris' liability and in computing Plaintiff's damages. Since the jury was permitted to impose liability for compensatory and punitive damages on the basis of conduct that was immunized when it occurred, Philip Morris was prevented from having a fair trial." Of course a motion for new trial is no substitute for timely objections during trial. (See Stevens v. Owens-Corning Fiberglas Corp. (1996) 49 Cal.App.4th 1645, 1653-1654, 57 Cal.Rptr.2d 525 [rejecting claim that "legal challenges may be presented for the first time by way of posttrial motion and will be treated as if raised before the verdict"]; id. at p. 1654, 57 Cal.Rptr.2d 525 [distinguishing Hoffman-Haag v. Transamerica Ins. Co. (1991) 1 Cal.App.4th 10, 1 Cal.Rptr.2d 805, as involving "a question of law on undisputed facts"].) Here the chief relevance of the motion is to show that, five weeks after the jury returned its verdict, defendant was fully cognizant of the possibility of an immunity window. Nothing in the record suggests that this constituted a new realization, let alone that any putative failure to recognize it earlier was excusable.[11] Even if defendant had not demonstrated its own awareness of a possible immunity window, we would conclude that such a possibility was apparent, if not obvious, from the nature of the issues presented. Indeed in our prior opinion we ourselves twice alluded to that possibility once in response to defendant's argument that the repeal of former section 1714.45 should not 48 be given "ex post facto" effect, and once in connection with defendant's argument that "conduct immunized by section 1714.45 should not be considered in support of a punitive damages award." The rule of Myers/Naegele was not an unforeseeable departure from existing law but one of two or three obvious possibilities in a patently unsettled area. Defendant has not shown that it could not be expected to anticipate this rule or, indeed, that it did not actually anticipate it. Defendant has thus failed to bring itself within the cases permitting a new point to be raised on appeal based on the effect of an intervening change in law. We also note that few if any cases invoking the exception for points based on new authority rely on that exception alone. Instead, most or all of them present additional grounds for exception, such as that the new point raises pure issues of law on undisputed facts or affects a matter of public interest or policy, or both.[12] Neither of these additional factors is present here. The application of section 1714.45 does not raise a pure question of law on undisputed facts but affects only the admissibility of evidence or the purposes for which it may be considered. If defendant's newly asserted objections were to succeed on appeal, the necessary result would be a retrial of liability or punitive damages, or both. Nor does the question implicate the public interest or public policy. The major issues concerning the application of former section 1714.45 have now been authoritatively resolved by Myers and Naegele. Our consideration of the merits would therefore relate almost solely to the issue of prejudice. (See Bihun v. AT & T Information Systems, Inc., supra, 13 Cal.App.4th 976 at p. 999, 16 Cal.Rptr.2d 787 [point "arguably raise[d] an issue of great public importance," but since intervening authority had decided the point "it is not necessary for this court to address the issue" (italics omitted)], disapproved on another point in Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 664, 25 Cal.Rptr.2d 109, 863 P.2d 179.) E. Futility. Defendant asserts that it would have been futile to argue for an immunity window because the trial court's rulings show that it would have rejected any such argument. This argument takes two slightly different forms. The first variation, which appears primarily in the briefs, is that the trial court's rulings show that it would in fact have rejected the idea of an immunity window if that idea had been presented to it. The second variation, which defendant pressed at oral argument, is that the idea of an immunity window is logically incompatible with the trial court's supposed ruling that section 1714.45 was "not retroactive," such that the trial court could not have given the instruction now sought by defendant without contradicting itself. 49 Nothing cited by defendant or found by us substantiates the assertion that the trial court would have rejected a proper request for relief based on an immunity window. According to defendant, "the trial court ... held that [in repealing former section 1714.45] the Legislature ... intended to abolish all of Philip Morris' immunity...." (Italics defendant's.) Defendant provides no record citation for this assertion. Elsewhere defendant cites a six-page portion of the proceedings in support of a claim that the trial court held "that the Repeal Statute was retroactive and, therefore, eliminated any right of Philip Morris to assert immunity." (Italics added.) Defendant cites the same six pages for the premise that "[i]n denying the motion [for nonsuit], the trial court found that the Repeal Statute operated retroactively and, therefore, that no aspect of Philip Morris' immunity survived." (Italics in original.) Nowhere in the cited proceedings did the trial court issue any such categorical ruling, or indeed express any relevant legal opinion. The court's only comment with respect to the motions for nonsuit and directed verdict was, "The court is denying each of the defense motions." Defendant must rely on what it contends was implicit in the trial court's rulings. The only necessary implication of those rulings was the trial court's rejection of defendant's contention that former section 1714.45 afforded it a complete defense so as to require judgment in its favor. That ruling was entirely sound. The record is similarly devoid of support for defendant's contention that in ruling on defendant's motion for new trial, the trial court necessarily repudiated any idea of an immunity window. It is true, as we have noted, that defendant's memorandum in support of a new trial alluded to such a concept. However the trial court's order denying the motion for new trial discussed former section 1714.45 only as defendant had presented it during trial, i.e., as an assertedly complete bar to liability.[13] Defendant emphasizes that plaintiff did not assert, and the trial court did not find, that defendant had waived the claim of an immunity window. We reject any notion that a point not otherwise preserved becomes cognizable on appeal merely because the opposing party fails to assert waiver in the trial court. The purpose of the rule is to avoid needless retrials and to encourage parties to make their best case when the opportunity is presented to them.[14] An objection which should 50 have been raised prior to the verdict, but was not, is no more worthy of consideration on motion for new trial than it is on appeal. (See Stevens v. Owens-Corning Fiberglas Corp., supra, 49 Cal.App.4th at p. 1655, 57 Cal.Rptr.2d 525.) The trial court was entitled to ignore defendant's belated suggestion of instructional error without explicitly finding a waiver of the point. At oral argument defendant asserted that the concept of an immunity window conflicts irreconcilably with the trial court's implicit holding that the repeal was "retroactive." This argument assumes that "retroactivity" is a single fixed characteristic which is either present or absent in a particular statute. In fact the term has many meanings and shades of meaning, and whether a particular application of a given statute is "retroactive" may depend on what exact meaning is intended. In Landgraf v. USI Film Products, supra, 511 U.S. at pp. 268, 114 S.Ct. 1483, the court frankly acknowledged that "deciding when a statute operates `retroactively' is not always a simple or mechanical task." Rather, "[t]he conclusion that a particular rule operates `retroactively' comes at the end of a process of judgment concerning the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event. Any test of retroactivity will leave room for disagreement in hard cases, and is unlikely to classify the enormous variety of legal changes with perfect philosophical clarity." (Id. at p. 270, 114 S.Ct. 1483, italics added.) Defendant treats the trial court's rulings as implicitly holding the 1998 repeal "retroactive" in all respects and for all possible purposes. This treatment is unwarranted. Former section 1714.45 was only offered to the trial court as a complete defense, i.e., as though the 1998 repeal had no effect whatever on the application of the former statute. Indeed defendant stated as much, writing in its nonsuit memorandum that "[T]he September [1997] amendment [i.e., repeal] has no bearing on the present action." (Italics added.) Thus the only question before the trial court was whether the repeal of that statute was "retroactive" in the broad sense that it permitted plaintiff to assert some claims that would have been barred under the former statute. The trial court correctly answered that question in the affirmative. In doing so it did not need to decide, and did not purport to decide, whether the repeal might be less than wholly retroactive, such that some claims barred under the former statute remained barred, or limited, after the repeal. Accordingly the court did not decide, in fact or by necessary implication, that no immunity window existed. Nothing in this record substantiates the claim that it would have been futile to request the instruction defendant now contends was erroneously omitted. F. Affirmative Misdirection. Defendant also contends that we may entertain its claim of "instructional error," despite the lack of appropriate objection below, because the trial court "gave instructions that were affirmatively erroneous" when it "instructed the jury to `consider all of the evidence bearing upon every issue." (Italics defendant's.) Defendant thus invokes the rule that instructions 51 affirmatively misstating the law may be challenged on appeal even though the complaining party did not object to them in the trial court. (See Lua v. Southern Pacific Transportation Co. (1992) 6 Cal.App.4th 1897, 1904-1905, 9 Cal.Rptr.2d 116; Code Civ. Proc., § 647.) The cited rule applies only to instructions containing "an incorrect statement of the law, in contrast to a claim that the instruction is too general or incomplete." (U.S. Roofing, Inc. v. Credit Alliance Corp. (1991) 228 Cal.App.3d 1431, 1447, 279 Cal.Rptr. 533; see National Medical Transportation Network v. Deloitte & Touche, supra, 62 Cal.App.4th 412 at p. 428, 72 Cal.Rptr.2d 720.) Here the challenged instruction, which is part of BAJI No. 2.60, told the jury that it "should consider all of the evidence bearing upon every issue, regardless of who produced it." (Italics added.) This is a correct statement of law as far as it goes. It does not tell the jury to give any effect it chooses to evidence that has been stricken or admitted for a limited purposes. It merely tells the jury to consider all evidence "bearing upon" a given issue. The manifest purpose and effect of the instruction is to discourage the jury from arbitrarily disregarding evidence. Here, had defendant sought and obtained an instruction concerning the immunity window, the jury would have understood that evidence of immunized conduct did not "bear[ ] upon" some of plaintiff's claims. At worst the cited instruction was "too general or incomplete" on the point now asserted by defendant.[15] Furthermore, defendant expressly invited the court to give this instruction. As discussed in greater detail in the following part, defendant joined in a stipulation that, with two exceptions, all of the court's instructions were deemed to have been requested by both parties. Defendant contends that it preserved its objection to the claimed "instructional error" by raising former section 1714.45 in its motions for nonsuit and directed verdict. As we have noted, however, nothing in those motions or otherwise before the court suggested that the jury should be instructed as to an immunity window. If defendant wished to raise such a point, it was required under the stipulation to do so by specific contemporaneous objection. Indeed it made such an objection with respect to a conceptually similar point, i.e., that the court should limit the jury's consideration of plaintiff's conspiracy theory to the period before July 1969, as it did with the failure to warn theory. Defendant has never offered any reason for not making a similar point with respect to the jury's consideration of conduct during the immunity period. It follows that the cited sentence from BAJI No. 2.60 was given at the stipulated request of both parties. Under the doctrine of invited error, a party 52 "cannot complain of an erroneous instruction where he requested the instruction given or one substantially similar to it." (9 Witkin, Cal. Procedure, supra, § 384 at p. 435, italics omitted.) Having requested the instruction now challenged, defendant cannot complain of it. In sum, the trial court did not err in rejecting defendant's only request for relief under section 1714.45 its motions for nonsuit or directed verdict. The argument for error now made that the court erroneously permitted the jury to hear evidence of immunized conduct without instructing the jury on the limited purposes for which it could consider that evidence was never suggested to the trial court by a request that it should withhold such evidence from the jury or instruct it on such limited purposes. Defendant has offered no excuse for this failure and has pointed to no facts either bringing it within the usual exceptions to the requirement of predicate trial court objections or justifying the creation of a new exception. Accordingly, no cognizable error appears in connection with the application of former section 1714.45 in this case. II. FEDERAL PREEMPTION Defendant contends that many or all of the legal grounds on which the jury was permitted to impose liability were preempted by the Public Health Cigarette Smoking Act of 1969, title 15 United States Code section 1331 et seq. (the 1969 Act). The only specific errors suggested are that (1) the court erroneously permitted the jury to consider evidence made inadmissible by the 1969 Act, and (2) the trial court gave an instruction overstating the extent to which the jury could find liability consistent with federal law.[16] The suggestion of evidentiary error is too vague for appellate consideration. No particular ground of exclusion is offered. We may infer that defendant relies on the premise that preemption rendered certain evidence irrelevant, but we will not address errors at the very nature of which we are forced to guess. Furthermore defendant makes no attempt to establish that any pertinent objection has been preserved for appeal by timely interjection in the trial court. (See Evid.Code, § 353.) We therefore pass this claim without further consideration. Defendant waived much of its instructional objection by express consent and invitation. Defendant stipulated in open court that all instructions actually read to the jury were given at the "request and the invitation" of both parties except insofar as objections were embodied or expressed (1) in certain dispositive motions denied just before the stipulation was entered; (2) by express statement immediately after entry of the stipulation; or (3) immediately after the reading of instructions, insofar as any party might assert that the instructions as read did not conform to those called for by the stipulation. 53 Defendant does not claim to have asserted federal preemption as a ground for any of the motions to which the stipulation referred, and appears not to have done so. This stands to reason since preemption by the 1969 Act furnishes no defense to claims arising before its effective date. As for express objections voiced after the stipulation was entered, defendant lodged exactly one: namely, that the instructions were erroneous insofar as they allowed a verdict for plaintiff based on a theory of conspiracy to conceal after July 1, 1969. Counsel stated that defendant's "only objection" was that the instructions failed "to incorporate the July 1, 1969 limitation as it relates to the conspiracy to conceal claim." (Italics added.) No party will be heard to complain of an error it invited. (Jentick v. Pacific Gas & Elec. Co. (1941) 18 Cal.2d 117, 121, 114 P.2d 343 ["a party cannot successfully take advantage of error committed by the court at his request."]; see Lynch v. Birdwell (1955) 44 Cal.2d 839, 847, 285 P.2d 919.) Defendant is not relieved of this rule by Code of Civil Procedure section 647, which states that jury instructions are among judicial actions "deemed excepted to" without an express exception. (Code Civ. Proc., § 647.) The statute only means that "an appellant is deemed to have excepted to the instructions he has not requested or agreed to." (Pugh v. See's Candies, Inc. (1988) 203 Cal.App.3d 743, 759, 250 Cal.Rptr. 195, italics added; see Stevens v. Owens-Corning Fiberglas Corp., supra, 49 Cal.App.4th 1645 at pp. 1653-1654, 1655, 57 Cal.Rptr.2d 525; id. at p. 1653, 57 Cal.Rptr.2d 525, quoting Mesecher v. County of San Diego (1992) 9 Cal.App.4th 1677, 1686, 12 Cal.Rptr.2d 279 ["The invited error doctrine applies `with particular force in the area of jury instructions.'"].) By the express terms of the stipulation, defendant "request[ed] and invit[ed]" the instruction complained of except insofar as it allowed recovery for conspiracy to conceal after 1969. Defendant cannot enlarge this objection on appeal so as to argue that the jury was improperly permitted to consider other theories in connection with post-1969 events and conduct. With the issue thus narrowed, we find it unnecessary to decide whether the instruction accurately states the scope of federal preemption because it is impossible to say that the verdict was probably affected by any cognizable error. "To prevail on a claim of instructional error, the appellant must show a reasonable probability of a more favorable result in the absence of the error." (Daum v. SpineCare Medical Group, Inc. (1997) 52 Cal.App.4th 1285, 1313, 61 Cal.Rptr.2d 260.) In considering whether it "`"seems probable" that the error "prejudicially affected the verdict,"'" a reviewing court "should consider not only the nature of the error ..., but the likelihood of actual prejudice as reflected in the individual trial record, taking into account `(1) the state of the evidence, (2) the effect of other instructions, (3) the effect of counsel's arguments, and (4) any indications by the jury itself that it was misled.'" (Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 983, 67 Cal.Rptr.2d 16, 941 P.2d 1203, quoting Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580-581, 34 Cal.Rptr.2d 607, 882 P.2d 298.) The burden is on the complaining party to "demonstrate [that] a miscarriage of justice arose from the erroneous instruction." (Rutherford, supra, 16 Cal.4th at p. 983, 67 Cal.Rptr.2d 16, 941 P.2d 1203.) Defendant's showing here falls far short of demonstrating that an instruction barring liability for conspiracy to conceal after 1969 would probably have affected 54 the outcome. The jury found for plaintiff on all eight legal theories embodied in the instructions, i.e., (1) supplying a product that failed to perform as safely as an ordinary consumer would expect it to perform; (2) supplying a product before 1969 while failing to give adequate warning of its dangerousness; (3) simple negligence; (4) breach of express warranty; (5) intentional misrepresentation; (6) fraudulent concealment; (7) fraudulent promise; and (8) negligent misrepresentation. The jury also found that defendant committed conspiracy to defraud by concealment, suppression, or misrepresentation of the health effects of cigarette smoking. Only one of these findings (conspiracy to commit fraudulent concealment) is affected by the alleged error before us, and it is only partially affected; a holding in defendant's favor would only mean the jury could not find for plaintiff on that theory on the basis of post-1969 conduct. On the face of the special verdict alone, it appears unlikely that such a limitation would have had any effect on the ultimate finding of liability. Defendant argues that the court's error with respect to preemption was prejudicial in that it caused the court to "improperly allow[ ] into evidence a mass of documents and testimony" concerning post-1969 advertising, failures to warn, and concealment of health risks. This is not a showing of "prejudice," but an attempt to charge evidentiary error without laying the necessary foundation. (See Evid.Code, § 353.) Defendant makes no coherent showing that this evidence was not admissible for a proper purpose unrelated to concealment, e.g., to establish scienter in support of a claim for fraud. Fraud is outside the preemptive scope of the 1969 Act. (Cipollone v. Liggett Group, Inc. (1992) 505 U.S. 504, 528, 112 S.Ct. 2608, 120 L.Ed.2d 407 (Cipollone).) Defendant's next claim of prejudice is that in argument to the jury, plaintiff's counsel relied heavily on the supposedly preempted theory embodied in the challenged instruction. The passages cited by defendant, however, concern not conspiracy to conceal after 1969, but inadequate package warnings before 1969. In her first allusion to package warnings counsel said, "[W]hen Patricia started smoking at age 15 in 1961, there was nothing on the package. There was no warning." (Italics added.) Counsel went on to argue that given the health risks posed by cigarettes, "you'd expect to see a skull and crossbones on it (indicating). You'd expect to see the word `Poison' on it." Counsel next alluded to package warnings in connection with the first warning mandated in 1965, which counsel denounced as inadequate to deter plaintiff, by this time "a regular smoker [who] needed her cigarettes." Federal law posed no impediment to this argument, and defendant does not suggest otherwise. (Cipollone, supra, 505 U.S. at pp. 519-520, 112 S.Ct. 2608.) The specific passage cited by defendant echoed the earliest one in its reference to a skull and crossbones, and also followed, if at slightly greater distance, explicit references to plaintiff's original acquisition of the smoking habit. Thus counsel conceded plaintiff's inability to specify a date and advertisement that caused her to begin smoking Marlboros. Instead, counsel said, plaintiff had started smoking Marlboros because of a" `cute guy at school'" who "`looked like the Marlboro Man.'" Counsel then discussed defendant's use of the "Marlboro Man" as a symbol of independence particularly appealing to teenagers. To support this argument counsel read aloud from, apparently, a 1976 Philip Morris memorandum quoting a 1969 source which itself was apparently derived from an earlier source. Counsel argued that 55 defendant exploited the symbolism of the Marlboro Man in order to induce teenagers to start smoking its products: "You don't become the No. 1 cigarette brand because you don't appeal to teenagers. That's the only way that you get starters. Starters equal children. And children do not make informed choices. [¶] And had that [apparently indicating image of skull and crossbones] appeared on the pack, there's a greatly [sic] likelihood that somebody would see that, instead of a red and white color package that looks so nice.... That's the kind of warning that would be paid attention to...." Given this context we find it curious that defendant characterizes these remarks as having been made "without any distinction as to time." Indeed plaintiff's counsel told the jury, if somewhat elliptically, that it could not predicate liability on a failure to warn after 1969. She went on to argue that the jury should find for plaintiff on a consumer expectations theory because the years preceding 1969 were "the time frame when [plaintiff] was ... becoming hooked." Nothing in counsel's argument provides any basis to think that the jury relied on a theory of post-1969 conspiracy to conceal, or that had it been expressly forbidden to do so it would have found for defendant on any other theory let alone all of them. III. STRICT PRODUCTS LIABILITY A. Post-1969 Defect Under "Consumer Expectations Theory." Defendant contends that, for a variety of reasons, plaintiff was not entitled to judgment on her theory of strict tort liability for manufacture of a defective product. The jury was instructed by stipulation that this claim was established if, as pertinent to this appeal, plaintiff was injured as the result of a design defect in a product manufactured by defendant. A product is defective, the jury was told, if (1) it "fails to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner"; or (2) its use in a foreseeable manner involves a substantial danger not readily recognized by the ordinary user, the danger was known or knowable at the time of manufacture in light of generally recognized and prevailing scientific and medical knowledge, and the manufacturer "failed to give an adequate warning of that danger before July 1, 1969." Defendant asserts that the trial court erred by permitting plaintiff's "consumer expectations" claim to go to the jury without restricting it to the time before the effective date of the 1969 Act. We have serious reservations about the soundness of this argument, which sounds in federal preemption, but we need not decide the issue because the point is barred by the parties' stipulation. (See pt. II., above.) Defendant argues that it preserved the point by objecting to the portion of the instructions permitting the jury to find conspiracy to conceal after 1969. We fail to see how. Under the stipulated portions of the instructions the jury was free to return a verdict for plaintiff if it found that the cigarettes smoked by her were at any time more dangerous than the ordinary consumer of cigarettes would expect. The jury obviously made such a finding, which was supported by overwhelming evidence. B. Failure to Heed Warnings. Defendant asserts two related arguments to the effect that the presence of package warnings barred recovery on a products liability theory as a matter of law. First, defendant contends that a product labeled with mandatory warnings 56 "cannot" be found to "fail California's consumer expectations test." Insofar as this argument hints at federal preemption it is not cognizable on appeal for the reasons already stated. We address it solely as a proposition of California tort law. We find no persuasive basis for it in the cases cited by defendant. In Papike v. Tambrands Inc. (9th Cir.1997) 107 F.3d 737, cert. denied, the court affirmed a summary judgment for a tampon manufacturer on a claim that its product caused the plaintiff to suffer toxic shock syndrome. Defendant cites the case for its disposition of the plaintiff's consumer expectations claim in two terse sentences: "Tambrands' warnings met the federal requirements and Papike's design defect claim therefore fails the `consumer expectation' test. To rule otherwise would allow the anomalous circumstance that a consumer is entitled to expect a product to perform more safely than its government-mandated warnings indicate." (Id. at p. 743.) We are unpersuaded that these comments conform to California law, at least if taken outside the facts of that case. The warnings there might well have justified summary judgment for the defendant, because they explicitly notified the user of the very danger at issue and there is no suggestion of any countervailing evidence raising a genuine material issue of fact as to the likely expectations of consumers. The court's unilluminated statement that liability would be "anomalous" does not furnish a sufficient ground to take the matter from the jury. In Macias v. State of California (1995) 10 Cal.4th 844, 42 Cal.Rptr.2d 592, 897 P.2d 530, the court held that insecticide makers had no duty to issue warnings to the public in connection with an emergency insect eradication program, where the state had already issued warnings required by applicable statutes. (Id. at p. 857, 42 Cal.Rptr.2d 592, 897 P.2d 530.) The holding did not rest on some presumption that the mandatory warnings were adequate as a matter of law, but on the injudiciousness of requiring private parties to "interfere with" the state's emergency efforts. (Ibid.) In Temple v. Velcro USA, Inc. (1983) 148 Cal.App.3d 1090, 1094, 196 Cal.Rptr. 531, the court affirmed a summary judgment on the ground that the warning given there was sufficient as a matter of law, as shown by the evidence. Nothing in that decision suggests that a government-mandated warning categorically bars liability for a product otherwise shown to be more dangerous than ordinary consumers expect. Other cases cited by defendant do not purport to apply California law, and are not persuasive on the point at issue. (See Haddix v. Playtex Family Products Corp. (7th Cir.1998) 138 F.3d 681, 686 [tampons came within Illinois rule for "simple products," and were not unreasonably dangerous given specificity of warnings and plaintiff's admission that she read them]; Lescs v. Dow Chemical Co. (W.D.Va.1997) 976 F.Supp. 393, 399 [federal labeling act preempted claim under Virginia law that insecticide was defective under consumer expectations theory].) Defendant's second argument concerning package warnings is that plaintiff's supposed failure to heed warnings precludes, as a matter of law, a finding that any defect in the product was a proximate cause of her injuries. This argument seems to proceed as follows: (1) where a product bears government-mandated warnings, they must be presumed sufficient to apprise the user of the steps necessary to avoid injury; (2) where a plaintiff fails to take such steps, his or her conduct is a superseding cause of any injury she suffers; (3) had plaintiff quit smoking in compliance with package warnings, "she 57 almost certainly would not have developed lung cancer from smoking"; therefore (4) any defect in defendant's product was not a proximate cause of plaintiff's injuries. In support of the first point defendant cites four cases for a proposition they do not remotely support, i.e., that "[u]nder California law, a plaintiff's failure to heed a product warning negates any potential liability because, under such circumstances, the plaintiff's own conduct, not a product defect, is the proximate cause of the plaintiff's injury." In Schwoerer v. Union Oil Co. (1993) 14 Cal.App.4th 103, 110-111, 17 Cal.Rptr.2d 227, the court reversed a summary judgment for a defendant based on its claim that its product warnings were adequate as a matter of law; the court assumed the proposition, conceded by the plaintiff, that "where adequate warnings have been passed along from manufacturer or seller to the ultimate consumer, there can be no liability." (Italics in original.) It cited Persons v. Salomon North America, Inc. (1990) 217 Cal.App.3d 168, 174, 178, 265 Cal.Rptr. 773, where a jury verdict for a ski binding maker was affirmed over the plaintiff's argument that the defendant breached a duty to warn as a matter of law; the court held that the defendant's duty was discharged by giving appropriate warnings to the ski shop that installed the bindings. Similarly, in Carmichael v. Reitz (1971) 17 Cal.App.3d 958, 989, 991, 95 Cal.Rptr. 381, the court affirmed a jury verdict for a drug manufacturer despite a failure to warn the plaintiff, where adequate warnings were given to her physician. Defendant apparently cites Oakes v. E.I. Du Pont de Nemours & Co., Inc. (1969) 272 Cal.App.2d 645, 649, 77 Cal.Rptr. 709, for its general discussion of failure to warn as a species of product defect. Aside from the inaptness of this discussion to the question of proximate cause, portions of the decision contradict defendant's position. Most notably, the court said that a product bearing an adequate warning, "`which is safe for use if it is followed, is not in defective condition, nor is it unreasonably dangerous.'" (Ibid., quoting Rest.2d Torts, § 402A, com. j, italics added.) Defendant points to only one warning here that ever gave any instruction to be "followed" a statement that "Quitting Smoking Now Greatly Reduces Serious Risks to Your Health." This warning was not adopted until October 12, 1984, and was not required to appear until one year after enactment. (Pub.L. No. 98-474 (Oct. 12, 1984) 98 Stat. 2202.) Plaintiff had then been smoking for some 23 years. We are directed to no evidence concerning the medical probability that quitting in 1985 would have affected the course of her illness. In any event Oakes does not support the point for which it is cited. Likewise Luque v. McLean (1972) 8 Cal.3d 136, 145, 104 Cal.Rptr. 443, 501 P.2d 1163, is concerned not with proximate cause but with the kind of contributory negligence that will constitute a defense to a product liability claim." `For such a defense to arise,'" the court wrote, "`the user or consumer must become aware of the defect and danger and still proceed unreasonably to make use of the product.'" (Ibid., italics added; see id. at p. 145, fn. 9, 104 Cal.Rptr. 443, 501 P.2d 1163 [discussing Rest.2d Torts, § 402A, com. n, and other authorities on "`assumption of risk'" in strict liability cases].) Defendant apparently waived any such defenses; the stipulated instructions included none on these subjects. The Luque decision therefore has no bearing on this appeal. C. Reliance on Expert Testimony. Defendant also contends that the jury's finding of liability on a consumer expectation theory rests impermissibly on 58 expert testimony. This argument depends upon a misconstruction of Soule v. General Motors Corp., supra, 8 Cal.4th 548 at p. 567, 34 Cal.Rptr.2d 607, 882 P.2d 298, concerning the general impropriety of relying on expert witnesses to establish the expectations of the ordinary consumer. The actual holding is that "where the minimum safety of a product is within the common knowledge of lay jurors, expert witnesses may not be used to demonstrate what an ordinary consumer would or should expect." (Ibid., italics added.) In a footnote, the court confirmed, in the context of "specialized" products, the implied corollary of the above rule: "[I]f the expectations of the product's limited group of ordinary consumers are beyond the lay experience common to all jurors, expert testimony on the limited subject of what the product's actual consumers do expect may be proper." (Id. at pp. 568-569, fn. 4, 34 Cal.Rptr.2d 607, 882 P.2d 298.) This rationale would seem to authorize the admission of expert testimony at least for the purpose of establishing what smokers expected at various times in the past, most particularly during the critical period when plaintiff began to smoke and became "hooked."[17] Defendant extracts from Soule the proposition that "[b]y using experts, plaintiff disqualified herself as a matter of law from relying on a `consumer expectations' theory...." In other words, by merely proffering expert testimony, plaintiff waived her consumer expectations theory. The proposition is absurd if only because expert witnesses may well be called on issues having nothing to do with consumer expectations. (Soule, supra, 8 Cal.4th at p. 567, 34 Cal.Rptr.2d 607, 882 P.2d 298.) Furthermore, the argument again rests on supposed evidentiary and instructional errors that are not separately stated or sufficiently demonstrated on appeal and are not shown to have been raised below. If defendant's argument was sound, the remedy was to attempt to exclude the expert testimony or withhold the consumer expectations theory from the jury not to suffer admission of the testimony, stipulate to the jury's consideration of the theory, and then seek reversal on appeal. D. Inherently Dangerous Product: Comment i and BAJI No. 9.00.6. Defendant next asserts that plaintiff's product liability claims were barred by the doctrine stated in comment i to section 402A of the Restatement Second of Torts (comment i) and BAJI No. 9.00.6. Two distinct errors seem to be asserted. One is that the claims were barred as a matter of law and thus, by implication, should not have been submitted to the jury at all. The other is that the court committed "instructional error" by refusing a supposed request to give BAJI No. 9.00.6. The claim of instructional error has been waived. Defendant asserts in its reply brief that it requested the instruction in connection with all of plaintiff's product liability theories. No such request is cited. Instead, at the cited point in the transcript, both counsel agreed with the court's statement "that the defense did request that the court give 9.006 [sic] on the risk/benefit prong of Barker versus Lull." 59 This was an allusion to a specific theory of product liability asserted by plaintiff. (See Barker v. Lull Engineering Co. (1978) 20 Cal.3d 413, 143 Cal.Rptr. 225, 573 P.2d 443.) In response to that limitation, plaintiff expressly abandoned the Barker theory. As a result, the court did not give BAJI No. 9.00.6. If defendant was in any way surprised by this, it was required under the parties' stipulation to object no later than immediately after the instructions were read. It did not do so. In the face of this record defendant states that "[f]or reasons not explained on the record, the trial court was willing to give BAJI 9.00.6 had plaintiff proceeded to trial on a risks/benefits design defect theory, but refused to give the instruction on the consumer expectations and failure to warn claims...." The court did not "refuse" to do anything; it omitted an instruction that it apparently believed defendant had only requested conditionally. Its reasons were anything but unexplained: the condition under which defendant requested the instruction had ceased to exist. If the court was mistaken, it was up to defendant to say so, not let the matter pass and then offer it on appeal as grounds for a retrial. This leaves defendant's argument that the doctrine embodied in comment i and BAJI No. 9.00.6 entitled defendant to judgment as a matter of law. Defendant cites six motions or memoranda raising related points; none raises this specific argument. Nonetheless, this is the kind of argument that, if limited to its potential as a complete bar to liability, we may consider on appeal notwithstanding the failure to raise it below. The problem with defendant's many other arguments of similar nature is that they depend on factual predicates, such as package warnings, that do not pertain to the entire period at issue in this suit. As a result they raise only a partial defense. If comment i actually raised a categorical bar, as defendant now contends, the bar might well extend to the entire period at issue. Defendant's argument fails, however, because to the extent comment i reflects California law, it does not furnish a categorical defense but a question of fact or multiple questions of fact for the trier of fact. Comment i is a gloss on the general rule that "[o]ne who sells any product in a defective condition unreasonably dangerous to the user or consumer ... is subject to liability for physical harm thereby caused...." (Rest.2d Torts, § 402A, subd. (1).) The entire point of comment i is to emphasize and enlarge upon the requirement that the product must be "unreasonably dangerous."[18] This requirement 60 "was added to foreclose the possibility that the manufacturer of a product with inherent possibilities for harm (for example, butter, drugs, whiskey and automobiles) would become `automatically responsible for all the harm that such things do in the world.'" (Cronin v. J.B.E. Olson Corp. (1972) 8 Cal.3d 121, 132, 104 Cal.Rptr. 433, 501 P.2d 1153, quoting Prosser, Strict Liability to the Consumer in California (1966) 18 Hastings L.J. 9, 23.) In Cronin, supra, 8 Cal.3d at pp. 134-135, 104 Cal.Rptr. 433, 501 P.2d 1153, the court held that the "unreasonably dangerous" requirement is not part of California's law of strict product liability. This holding remains good law. (See Barker v. Lull Engineering Co., supra, 20 Cal.3d 413 at p. 417, 143 Cal.Rptr. 225, 573 P.2d 443; Brown v. Superior Court (1988) 44 Cal.3d 1049, 1057, 245 Cal.Rptr. 412, 751 P.2d 470; American Tobacco v. Superior Court (1989) 208 Cal.App.3d 480, 489, 255 Cal.Rptr. 280 (American Tobacco).) Indeed, except as modified by section 1714.45 (see pt. I., above), it has been legislatively ratified. (§ 1714.45, subd. (d).) Defendant acknowledges this while still asserting that comment i, which serves only to illuminate this inapplicable requirement, states the rule applicable to this case. Defendant cites no California case since Cronin that has applied the comment or endorsed its application. (Cf. Harris v. Belton (1968) 258 Cal.App.2d 595, 608, 65 Cal.Rptr. 808; Oakes v. E.I. Du Pont de Nemours & Co., Inc., supra, 272 Cal.App.2d 645, 648, 77 Cal.Rptr. 709.) Not only does comment i explicate a rule that is not part of our law, it does not by its terms support the categorical bar to recovery defendant would have us adopt. The comment states that to warrant liability, the product must be "dangerous to an extent beyond that which would be contemplated by the ordinary consumer." (Rest.2d Torts, § 402A, com. i, italics added.) This invites a showing by an injured smoker that while cigarettes may have been generally known or believed to pose hazards, they were in fact far more dangerous than was "contemplated by the ordinary consumer." In arguing otherwise, counsel misrepresents applicable authority. In the reply brief counsel writes, "Under Comment i, it is not necessary that the ordinary consumer know or understand every possible risk associated with smoking, so long as cigarettes are `known to be unsafe.' See American Tobacco, 208 Cal.App.3d at p. 490, 255 Cal.Rptr. 280 (there is `no requirement ... that consumers fully appreciate all the risks involved')." (Italics added.) The quoted passage actually states: "As to the second and third claims, there is no requirement under this statute [former § 1714.45] that consumers fully appreciate all the risks involved in the use or consumption of the products within the purview of this section. In order to be covered by this statute it is sufficient that the ordinary consumer knows the product is `unsafe.'" (American Tobacco, supra, 208 Cal.App.3d at pp. 489-490, fn. 5, 255 Cal.Rptr. 280, original italics omitted, new italics added.) The court then goes on to say that but for the statute, the situation could well be different: "Evidence that the risks are greater than those anticipated, either because the product contains unknown dangerous elements or because it may be used in conjunction with substances that unknowingly increase the risks involved, could possibly be used to support a claim that the product is defective under the standards outlined in Barker v. Lull Engineering Co., supra, 20 Cal.3d 413, 143 Cal.Rptr. 225, 573 P.2d 443 (see Discussion, ante, at fn. 4, p. 489, 143 Cal.Rptr. 225, 573 P.2d 443).)" (Ibid., italics added.) 61 Defendant has failed to demonstrate any entitlement to judgment as a matter of law on the authority of comment i. E. Generally Recognized Danger: Comment j. Next defendant contends that it should receive some kind of appellate relief on the authority of comment j to Restatement Second of Torts section 402A, which concerns the effect on a failure-to-warn theory of common knowledge of a product's risks. Defendant does not mention in this context any proceedings in the lower court by which this issue was raised or preserved for appeal. We observe, however, that it was one basis for a motion for judgment notwithstanding the verdict. Even viewing the brief as containing an adequate specification of error, the argument on this point is woefully deficient, as epitomized in the assertion that "[b]ecause plaintiff knew of and accepted the risks of smoking, PM cannot be strictly liable to her." Plaintiff denied that she "knew of and accepted the risks of smoking" as they affected her, and indeed presented evidence that few people outside the research community and the tobacco industry appreciated the risks of smoking at the time she was becoming "hooked." In the absence of a compelling showing to the contrary, we presume the jury accepted this testimony and otherwise made any findings necessary to reject defendant's factual premise. Defendant's one-page argument on appeal does not include a compelling showing. IV. FRAUDULENT MISSTATEMENT A. Misstatement. Defendant contends that plaintiff failed to establish two elements of her claims for fraudulent misstatement and fraudulent promise, i.e., a false representation of fact (or actionable false promise) and actual reliance by plaintiff. As defendant puts it, plaintiff presented "no evidence of a misrepresentation of material fact" and "no evidence of actual reliance or causation." A claim of "no evidence" is a claim of insufficient evidence to support the challenged findings. One raising such a claim assumes a "daunting burden." (In re Marriage of Higinbotham, supra, 203 Cal.App.3d 322, 328-329, 249 Cal.Rptr. 798.) We must presume that the record contains substantial evidence to support every finding necessary to support the judgment. (In re Marriage of Fink (1979) 25 Cal.3d 877, 887-888, 160 Cal.Rptr. 516, 603 P.2d 881.) To overcome this presumption, the party challenging a finding "must summarize the evidence on that point, favorable and unfavorable, and show how and why it is insufficient. (Trailer Train Co. v. State Bd. of Equalization (1986) 180 Cal.App.3d 565, 587-588 [225 Cal.Rptr. 717].)" (Roemer v. Pappas (1988) 203 Cal.App.3d 201, 208, 249 Cal.Rptr. 743, italics added.) Where a party presents only facts and inferences favorable to his or her position, "the contention that the findings are not supported by substantial evidence may be deemed waived." (Oliver v. Board of Trustees (1986) 181 Cal.App.3d 824, 832, 227 Cal.Rptr. 1.) Defendant makes no attempt to provide a fair summary of the evidence on which the findings of fraudulent misrepresentation and reliance might (and presumptively do) rest. We recognize that the record is exceptionally large, the scope of proof vast, and the limitations on brief length constraining. Fairness might require relaxation of the foregoing requirement if defendant had made a good faith effort to comply with it by at least identifying the evidence most favorable to the 62 judgment. Defendant, however, has made no attempt to set forth the evidence most supportive of the finding and to "show how and why it is insufficient." (Roemer v. Pappas, supra, 203 Cal.App.3d at p. 208, 249 Cal.Rptr. 743.) Our review of the record satisfies us that there was substantial evidence, which defendant does not cogently dispute for purposes of this appeal, that it engaged in a conscious, deliberate scheme to deceive the public, and individual smokers and potential smokers (many or most of whom it knew to be adolescents), about the health hazards and addictive effects of cigarette smoking. The jury could properly find that commencing no later than 1953 and continuing at least until the time of plaintiff's diagnosis, defendant and other cigarette manufacturers acted both in concert and individually to issue innumerable false denials and assurances concerning the dangers of smoking, deliberately fostering a false impression by the public, or more precisely by smokers and prospective smokers, that assertions of health risk were overblown products of puritanical prejudice, that any real hazards had yet to be shown, and that the industry itself was acting and would act diligently to discover the scientific truth of the matter and promptly disclose its findings, good or bad. The jury could also find that plaintiff heard of these false assurances and denials, if only indirectly, and was falsely led to believe, as defendant intended, that there was a legitimate "controversy" about whether cigarettes actually caused cancer or carried any other serious health risks. As a consequence of that information and the distorted judgment brought about by addiction, she was unaffected by reports of adverse health effects because she was unpersuaded they were true or reliable enough to warrant any action by her. Defendant contends that many of the statements alleged by plaintiff were matters of opinion and thus not actionable. This argument relies on the general rule that statements of opinion will not support an action for fraud, while ignoring the exception on which the jury was instructed, and which it presumptively found applicable to any statements of opinion: "`[W]hen one of the parties possesses, or assumes to possess, superior knowledge or special information regarding the subject matter of the representation, and the other party is so situated that he may reasonably rely upon such supposed superior knowledge or special information, a representation made by the party possessing or assuming to possess such knowledge or information, though it might be regarded as but the expression of an opinion if made by any other person, is not excused if it be false.'" (Harazim v. Lynam (1968) 267 Cal.App.2d 127, 131, 72 Cal.Rptr. 670 quoting Haserot v. Keller (1924) 67 Cal.App. 659, 670-671, 228 P. 383.) Further, if a statement of opinion "`misrepresents the facts upon which it is based or implies the existence of facts which are nonexistent, it constitutes an actionable misrepresentation.'" (Id. at p. 133, 72 Cal.Rptr. 670, quoting Seeger v. Odell (1941) 18 Cal.2d 409, 414, 115 P.2d 977.) The jury here was entitled to find that insofar as any of defendant's statements constituted opinions, they implied the existence of superior knowledge as well as a state of facts that did not exist. B. Reliance and Causation. Defendant contends that even if plaintiff showed an actionable misrepresentation, she failed to show that she actually and reasonably relied on anything defendant said or failed to say. Likewise defendant suggests that plaintiff failed to show the closely related element of causation. 63 Defendant incorrectly asserts that "[t]here is no evidence that plaintiff ever saw or heard ... any ... statements by [defendant] (or other cigarette manufacturers) relating to the health risks of smoking." Defendant ignores plaintiff's testimony that while she recalled "listening and seeing things that the Surgeon General was saying," she was also aware "that the tobacco companies were saying different." (Italics added.) Thus, she testified, package warnings never "faze[d] me one way or the other. I wasn't going to give the cigarettes up at that point." The jury was entitled to find that by this time, in her addicted state, plaintiff was easy prey for defendant's disinformation campaign and readily clutched at the industry's caricature of objective inquiry. Contrary to defendant's implicit contention, plaintiff did not have to prove that she heard these matters directly from defendant, or from any of its coconspirators. It was enough that the statements were, as the jury was entitled to find, issued to the public with the intent that they reach smokers and potential smokers, and that plaintiff, as a member of that class, heard them. As the jury was correctly instructed, "One who makes a misrepresentation or false promise or conceals a material fact is subject to liability if he or she intends that the misrepresentation or false promise or concealment of a material fact will be passed on to another person and influence such person's conduct in the transaction involved." (See Rest.2d Torts, § 533; Geernaert v. Mitchell (1995) 31 Cal.App.4th 601, 605, 37 Cal.Rptr.2d 483 [summarizing principles and noting that "if defendant makes the representation to a particular class of persons, he is deemed to have deceived everyone in that class"]; Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1098, 23 Cal.Rptr.2d 101, 858 P.2d 568 [confirming principle but noting inapplicability where plaintiff unaware of misrepresentation]; Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1548, 76 Cal.Rptr.2d 101 [citing and following Geernaert]; Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 219, 197 Cal.Rptr. 783, 673 P.2d 660 [applying principle to misleading advertising]; cf. Gawara v. United States Brass Corp. (1998) 63 Cal.App.4th 1341, 1351, 1355, 74 Cal.Rptr.2d 663 [indirect reliance not shown by evidence].) Here the jury was entitled to find that defendant's and its coconspirators' misrepresentations concerning the unsettled state of relevant knowledge, and by implication the unreliability of evidence of a cigarette-cancer link, were made with the intention and expectation that they would circulate among and influence the conduct of all smokers and prospective smokers. They were passed to plaintiff, who knew that while the Surgeon General was saying one thing, the industry was "saying different." This brings her within the cited rule. Defendant attempts to characterize and then attack plaintiff's fraud theory as "fraud on the market," a concept developed under federal securities law, which the court in Mirkin, supra, 5 Cal.4th 1082, 23 Cal.Rptr.2d 101, 858 P.2d 568, refused to import into our common law of torts. "Fraud on the market" has nothing to do with this case. Its essential principle is that an investor in a security, the price of which has been influenced by fraud, may be deemed to have relied on the fraud. (Id. at p. 1089, 23 Cal.Rptr.2d 101, 858 P.2d 568, citing Basic Inc. v. Levinson (1988) 485 U.S. 224, 241-247, 250, 108 S.Ct. 978, 99 L.Ed.2d 194.) Neither that rule nor its context-specific rationale has any bearing on fraud contended to have been practiced on a vast group of consumers, causing many of them to sustain personal 64 injuries. The facts of this case might be more accurately called "fraud on the public," but even that it is misleading. Plaintiff herself was an intended target and victim of the fraud, through precisely the mechanisms of transmission intended by defendant and its coconspirators. Defendant has failed to show any defect in the jury's verdict on the affirmative fraud claims. V. BREACH OF EXPRESS WARRANTY Defendant contends that plaintiff offered "no evidence of an express warranty," such that the judgment in her favor "on this claim" must be reversed. The gist of this argument is that plaintiff showed no express "affirmation of fact," as distinct from an implication, opinion, or general commendation of goods, of which she was personally aware, or on the basis of which she personally acted. Defendant also asserts that there was insufficient evidence to establish that any warranty the jury might have found was actually the basis of any bargain between plaintiff and defendant. Defendant has failed to meet its burden as a party challenging the sufficiency of the evidence. In a footnote, defendant references plaintiff's simplest evidence of a direct, express warranty from defendant. Plaintiff testified that at some point prior to the late 1980s she began to hear that "low-tar cigarettes were better" and that by smoking them "[y]ou wouldn't get as much tar and nicotine." Accordingly she decided to" `check into this,'" thinking, "`Maybe I'll change from the Reds to the Lights.'" She "did indeed call the Marlboro, Philip Morris company and expressed, you know, my concerns as to, `Is it really true? Is there less tar in this or less nicotine?' [¶] And I was assured at the time that if I was concerned that, yes, I could switch to the Lights, which presented a real problem, because approximately a month or two after switching to Lights, I went from two packs of cigarettes to three and a half packs of cigarettes a day." Defendant fails to "show how and why [this evidence] is insufficient" (Roemer v. Pappas, supra, 203 Cal.App.3d at p. 208, 249 Cal.Rptr. 743) to establish an express warranty. In a footnote it mischaracterizes the testimony as confirming only "that if plaintiff wanted to smoke cigarettes with less tar and nicotine, she could switch to light cigarettes." (Italics added.) We presume the jury did not adopt this interpretation. The least that the testimony reasonably could be understood to mean was that defendant represented to plaintiff that she would take in less tar and nicotine if she switched to Lights. This proved false (the warranty was breached) when (as defendant knew was common) plaintiff simply increased the number of cigarettes she smoked. Further, even though plaintiff's trial testimony about this conversation was somewhat ambiguous, it supported an inference that defendant's representative expressly assured plaintiff that Lights eliminated or reduced whatever risks smoking might otherwise pose. That is, the assurance as stated at trial was that switching to Lights would address some unspecified "concern[s]." The jury could infer that the "concerns" discussed were related to what plaintiff said motivated the call, i.e., that she had heard "low-tar cigarettes were better." By "better," the jury could infer, plaintiff meant "healthier." Even if defendant had carried its burden of showing that the record lacks substantial evidence of an express warranty, no prejudice appears. We see no reasonable likelihood that the jury's consideration 65 of this theory had any effect on its findings on other matters, notably the fraud and strict liability claims. VI. FRAUDULENT CONCEALMENT Defendant contends that the jury verdict for plaintiff on the issue of fraudulent concealment cannot be sustained because (1) plaintiff and the public were aware of the health risks of smoking at all relevant times; (2) "plaintiff did not prove" that she relied on any mistaken beliefs that would have been dispelled by the posited disclosures; and (3) any reliance would have been unreasonable as a matter of law. Again defendant fails to meet its burden as a party challenging the sufficiency of the evidence to support a particular finding in this case the jury's implied finding that neither plaintiff nor the public was aware of, or adequately appreciated, the health risks of smoking. Defendant singles out two favorable passages of deposition testimony and uses them to assert that plaintiff "was aware of the material fact that she claims was not disclosed to her that smoking cigarettes can damage one's health." In the first plaintiff answered affirmatively the question whether "throughout the time that you smoked, you had heard that there were risks associated with smoking, or you had heard people say things about smoking and health; you just didn't want to believe them." (Italics added.) In the second she acknowledged that there was a warning on every pack she picked up after 1966. Neither of these passages constitutes a binding or compelling admission that when plaintiff began smoking in 1961, or at any particular time thereafter, she knew of, understood, or appreciated the dangers of cigarette smoking. In any event, citing favorable testimony is not enough; defendant must cite the evidence supporting a contrary finding the finding presumptively made by the jury and show "how and why it is insufficient." (Roemer v. Pappas, supra, 203 Cal.App.3d at p. 208, 249 Cal.Rptr. 743.) Plaintiff testified, among other things, that when she began smoking at age 15 she did not "understand there were dangers about smoking cigarettes." Defendant disregards this particular question and answer, but goes on to assert that plaintiff's trial testimony "is simply not credible." It then singles out testimony in response to the question, "When were you first aware that cigarette smoking could cause lung cancer?" Plaintiff's actual response was, "I think my first complete awareness that cigarette smoking could cause lung cancer was when a doctor came in and told me that I had lung cancer." She testified that she was "baffled" by this information, which she "made them repeat to me several times." She continued: "I just know that I must have seen the warnings, but to be fully aware or believe that this really did cause this, it didn't register in my brain." She was inclined to believe, and preferred to believe, that her lung cancer was the result of asbestos exposure, and she repeatedly questioned doctors about this alternative possibility. So complete was her "denial," as she repeatedly described it, that even after her diagnosis she still sought ways to disbelieve it, in part to keep open the option of taking up smoking again some day. Thus when a friend brought to her attention a report that cigarettes contained ammonia a substance to which plaintiff had a conditioned aversion based on a childhood trauma plaintiff denounced the report as "`some kind of propaganda against the tobacco company.'" We see nothing in this testimony that permits us to substitute our own judgments 66 of credibility for those of the jury. Based on this and other evidence, the jury was entitled to find that plaintiff, first because of her youth and inexperience and then because of her addiction, did not believe the package warnings but thought all information about the health risks of smoking was "propaganda" against the tobacco companies. Nor will we debate the evidentiary minutiae over whether the public adequately appreciated the health risks of smoking to excuse defendant from a duty to disclose. Instead we will presume in support of the judgment that the jury found on substantial evidence that even if there was ample information in the public domain to convince reasonable observers of the hazards of smoking, defendant and its fellows deliberately interfered with the assimilation of that information, particularly by smokers and prospective smokers. It was this class to whom defendant presumably owed a primary duty of disclosure. Nonsmokers were far less directly affected by the issue. At least one of the cases cited by defendant on this subject and the only California one actually supports an argument in favor of the judgment. In Wawanesa Mutual Ins. Co. v. Matlock (1997) 60 Cal.App.4th 583, 587, fn. 3, 70 Cal.Rptr.2d 512, the court noted that tobacco had long had detractors but acknowledged that much of the opposition seemed to rest on concerns of morality or aesthetics, not on any demonstrated health hazard. The court cited and defendant apparently placed in evidence here King James I's famous 1604 "Counterblaste to Tobacco," in which he pronounced smoking "[a] custome loathsome to the eye, hatefull to the Nose, harmefull to the brain, dangerous to the Lungs, and in the blacke, stinking fume thereof, neerest resembling the horrible Stigian smoke of the pit that is bottomlesse." By the late nineteenth century, as the Wawanesa court observed, smoking had come to be associated with "general licentiousness" and "cheesy dens of iniquity." (60 Cal.App.4th at p. 587, fn. 3, 70 Cal.Rptr.2d 512.) This provided fertile ground for the tobacco companies' disinformation campaign, since it predisposed addicted smokers (and adolescent presmokers chafing under adult authority) to attribute criticism of smoking to puritanical prejudice rather than sound scientific evidence. It hardly establishes widespread knowledge among smokers or others that, as a matter of scientific and medical fact, smoking poses severe risks to health. Defendant likewise fails to carry its threshold burden on the subject of actual and reasonable reliance. Defendant states, "plaintiff effectively admitted that any disclosures by PM regarding the health risks of smoking would have been immaterial to her decision." But plaintiff plainly testified that she was unmoved by package warnings only because they failed to indicate how dangerous cigarette smoking was, and because she knew they did not originate from the companies. As plaintiff said, "[T]here's a lot of different degrees of danger. It's dangerous to walk across the street. When you're hooked on something and you have the need to have that, you don't you don't listen to that type of warnings. [¶] Maybe if the tobacco company had come out and said: `Our product is dangerous.' [¶] But I was listening and seeing things that the Surgeon General was saying that the tobacco companies were saying different." (Italics added.) Defendant has failed to carry its burden of showing that there was "no evidence," or insufficient evidence, to support each finding necessary to the verdict on the fraudulent concealment theory. 67 VII. NEGLIGENCE We do not address defendant's attack on the jury's finding of simple negligence because the judgment is amply supported by other theories of liability and nothing that occurred in connection with the negligence claim is reasonably likely to have affected the outcome as to those claims. VIII. PUNITIVE DAMAGES A. Sufficiency of Evidence. Defendant contends that "There Is No `Clear and Convincing' Evidence to Support the Predicate For Punitive Damages." This is another challenge to the sufficiency of the evidence, and once again defendant has failed to carry its burden on appeal. The jury may award punitive damages "where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice." (Civ.Code, § 3294, subd. (a).) "`Malice' means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others." (Id., subd. (c)(1).) "`Oppression' means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights." (Id., subd. (c)(2).) "`Fraud' means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury." (Id., subd. (c)(3).) We assume that the correct standard for review of a finding of oppression, fraud, or malice is as stated in Hoch v. Allied-Signal, Inc. (1994) 24 Cal.App.4th 48, 60, 29 Cal.Rptr.2d 615, i.e., whether evidence of sufficient substantiality was presented that a reasonable jury "could find [that] the plaintiff ha[d] presented clear and convincing evidence on the disputed issue." (See Tomaselli v. Transamerica Ins. Co., supra, 25 Cal.App.4th at p. 1287, 31 Cal.Rptr.2d 433 ["all we are required to find is substantial evidence to support a determination by clear and convincing evidence"]; cf. Patrick v. Maryland Casualty Co. (1990) 217 Cal.App.3d 1566, 1576, 267 Cal.Rptr. 24 ["clear and convincing evidence" standard guides only trial court and does not affect reviewing court, which continues to apply the substantial evidence standard]; Cloud v. Casey (1999) 76 Cal.App.4th 895, 911, 90 Cal.Rptr.2d 757.) Under this standard, however, defendant still bears the burden of fairly summarizing the evidence favoring the challenged finding and affirmatively demonstrating its insufficiency. (See Roemer v. Pappas, supra, 203 Cal.App.3d at p. 208, 249 Cal.Rptr. 743.) Defendant's presentation fails to fairly characterize the most damaging evidence or address its effect. Defendant first seeks to categorically exclude two bodies of evidence from consideration in support of the punitive damage award. First, it disingenuously asserts that conduct after July 1, 1969, cannot be considered in light of the federal preemption "with limited exceptions" of claims based on conduct after that time. The primary "limited exception" is that the 1969 Act does not affect state law claims for fraud. (Cipollone, supra, 505 U.S. at p. 528, 112 S.Ct. 2608.) Defendant also asserts that under Myers/ Naegele, the jury should not have been permitted to consider conduct immunized by former section 1714.45 in support of a punitive damages award. As we have concluded in part I., above, 68 defendant failed to preserve this argument for appeal. It is therefore unnecessary to decide whether the punitive damage award is likely to have been affected by evidence of conduct during the "immunity window." Defendant's silence with respect to such a theory prevented both the trial court and plaintiff from obviating the objection by one or more steps such as prophylactically withholding or excluding evidence, instructing the jury as to the limited purposes for which such evidence was admitted, or attempting to bring plaintiff's claims within the exceptions to the former immunity noted in Myers/Naegele. Defendant also attacks the trial court's opinion explaining its denial of defendant's motion to set aside the punitive damages award. The court found the evidence "fully sufficient" to support express or implied jury findings that defendant willfully and consciously marketed its cigarettes to teenagers, violated promises and representations to the public by concealing and suppressing information known to it concerning the addictive and harmful properties of its product, and "affirmatively misled the American public by advertising that there was genuine and legitimate controversy in the scientific community on the subject of smoker health, when in fact there was no such controversy." In responding to these points defendant fails to fairly summarize or address the evidence underlying the judgment. Defendant asserts that the finding of "targeting of teenagers" rested on the rationale that "Most people who become cigarette smokers begin smoking by age 19, so cigarette companies must target teenagers." This is not a fair characterization of the record or of the trial court's opinion. Defendant attacks various documents cited by the trial court on the ground that they were not shown to have been authored by a corporate officer, director, or managing agent. But even if we accept this premise which again, is not demonstrated but simply asserted as a fact the primary relevance of these materials was not to show conduct by their authors but as admissions of corporate conduct and circumstantial evidence of the mental state of corporate officers, directors, and managers.[19] As defendant concedes, the particular document it most vigorously attacks was a draft presentation to defendant's Board of Directors. It was not deprived of all evidentiary force by its "draft" status. A "draft" is defined and understood as "[a] preliminary sketch or rough form of a writing or document, from which the final or fair copy is made." (4 Oxford English Dict. (2d ed.1989) p. 1008.) From the existence of a draft, the existence of a "final fair copy" may be reasonably inferred. And where a draft document is relevant for its central theme (rather than some incidental feature), it may be inferred that the theme survived into any final version. Defendant offers the notion that marketing its products to "teenagers" does not establish reprehensible conduct because 18 and 19-year olds are "teenagers" who may lawfully purchase and consume cigarettes. The argument is unsound. Moreover none 69 of the documents cited by the trial court limits itself to 18 and 19-year olds. They discuss smoking habits and "market penetration" among children as young as 12 without the slightest acknowledgment of legal niceties such as defendant now asserts. One document reviews the history of Marlboro's success and the business risks posed by a coming decline in the number of teenagers, and includes the statement, "Because of our high share of the market among the youngest smokers, Philip Morris will suffer more than the other companies...." (Italics added.) Defendant asserts that its attempts to prevent the official classification of nicotine as a "drug" cannot support an award of punitive damages. Defendant directs us to no indication that plaintiff, the trial court, or the jury placed any reliance on such conduct. It is true that plaintiff played a videotaped excerpt from testimony before Congress in which a Philip Morris executive apparently stated that he did not believe nicotine to be addictive. Elsewhere in its brief defendant contends that this evidence was inadmissible. We do not decide the question because we do not think there is any significant possibility that it affected the outcome. Defendant contends that its failure to disclose that cigarettes are addictive does not support a punitive award because "it is, at bottom, a quibble over definitions." If so, it is a quibble of which the tobacco industry is the chief author and beneficiary. The question is not whether the term "addictive" applies to cigarettes in some narrow medical sense but whether a reasonable effort should have been made to bring home to defendant's mostly teenage "starters" market the extreme difficulty they were likely to encounter in any future attempt to stop smoking. To borrow language used in 1965 congressional hearings, "For many people, the choice to smoke, once it has been made, may as a practical matter be irrevocable." (Cigarette Labeling and Advertising Hearings before Sen. Com. on Commerce on Sen. Nos. 559 and 547, 89th Cong., 1st Sess., at p. 500 (1965).) We have examined defendant's remaining points concerning the evidence of oppression, fraud, or malice, and find them to be insufficient to carry defendant's burden of showing that the finding on that subject was marred by error. B. Size of Award Federal Constitutional Constraints. In our previous opinion we rejected defendant's intertwined arguments that the award was the product of passion and prejudice and was excessive under state and federal law. We are now called upon to reconsider in light of Campbell, supra, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585, whether the award exceeded the federal constitutional limits articulated in that case. We have concluded that the present award cannot be sustained consistent with Campbell, but that an award of $9 million is permissible and appropriate on this record. "The Due Process Clause of the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor." (Campbell, supra, 123 S.Ct. at pp. 1519-1520; see BMW of North America, Inc. v. Gore (1996) 517 U.S. 559, 562, 116 S.Ct. 1589, 134 L.Ed.2d 809 (Gore).) This constraint derives from the fundamental unfairness inherent in arbitrary deprivations of life, liberty, or property, and in the imposition of punishment without fair notice. (Campbell, supra, at p. 1520; Gore, supra, at p. 574, 116 S.Ct. 1589 ["[e]lementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice not only of the conduct that will 70 subject him to punishment, but also of the severity of the penalty that a State may impose."].) Because civil punitive damage awards present a significant risk of arbitrary punishment exceeding that of which the defendant had fair notice, the Supreme Court has undertaken to "constitutionalize" the field by adopting a variety of substantive and procedural safeguards against excessive awards. Among the procedural safeguards is the requirement, which we assume applies to the present case, that appellate scrutiny of punitive awards be governed by a "de novo" standard of review. (Campbell, supra, at p. 1520; cf. Cooper Industries, Inc. v. Leatherman Tool Group, Inc. (2001) 532 U.S. 424, 431, 436, 121 S.Ct. 1678, 149 L.Ed.2d 674 (Cooper Industries).) In determining the sustainability of a punitive award the constitutional "guideposts" to be considered are (1) the degree of the defendant's culpability, i.e., the reprehensibility of his or her conduct, (2) the ratio between the punitive award and the harm to the victim caused by the defendant's actions, and (3) the sanctions imposed in other cases for comparable misconduct. (Campbell, supra, at p. 1520; Cooper Industries, supra, 532 U.S. 424 at pp. 447-448, 121 S.Ct. 1678, 149 L.Ed.2d 674; see Gore, supra, 517 U.S. at p. 575, 116 S.Ct. 1589.) The "most important" of the three guideposts is the degree of reprehensibility of the defendant's conduct. (Campbell, supra, 123 S.Ct. at p. 1521.) The record reflects that defendant touted to children what it knew to be a cumulatively toxic substance, while doing everything it could to prevent them and other addicts and prospective addicts from appreciating the true nature and effects of that product. The result of this conduct was that millions of youngsters, including plaintiff, were persuaded to participate in a habit that was likely to, and did, bring many of them to early illness and death. Such conduct supports a substantial award sufficient to reflect the moral opprobrium in which defendant's conduct can and should be held, and warrants something approaching the maximum punishment consistent with constitutional principles. The Supreme Court has identified several subsidiary factors which pertain to the degree of reprehensibility of a defendant's conduct: (1) whether the defendant inflicted bodily as opposed to merely economic injury; (2) whether its tortious conduct "evinced an indifference to or a reckless disregard of the health or safety of others"; (3) whether "the target of the conduct had financial vulnerability"; (4) whether the conduct "involved repeated actions or was an isolated incident"; and (5) whether the harm was "the result of intentional malice, trickery, or deceit, or mere accident." (Campbell, supra, 123 S.Ct. at 1521.) Each of these factors supports finding a high degree of reprehensibility here. The gist of plaintiff's claim was not that defendant inflicted an economic harm but that its conduct caused her severe bodily injury in the form of lung cancer. Defendant's malicious infliction of such an injury is, in that respect, substantially more reprehensible than the conduct at issue in Campbell (bad faith denial of insurance claim), Gore, supra, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (intentional concealment of repair history in sale of "new" automobile), or Cooper Industries, 532 U.S. 424, 121 S.Ct. 1678, 149 L.Ed.2d 674 (unfair competition, including false advertising, in sale of competing product). Further, defendant's conduct arguably betrayed an attitude characterized not by mere indifference or recklessness, but by a conscious acceptance of the injurious results. 71 Moreover defendant consciously exploited the known vulnerabilities of children, who by its own words comprised its "traditional area of strength." (See fn. 19, above.) The court in Campbell and Gore stated the third reprehensibility subfactor in terms of financial vulnerability, but that characterization undoubtedly reflects the origins of those opinions in torts of an essentially economic nature. In other cases, such as this one, it makes sense to ask whether and to what extent the defendant took advantage of a known vulnerability on the part of the victim to the conduct triggering the award of punitive damages, or to the resulting harm.[20] It thus appears that all five of the subfactors in Campbell, supra, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585, point to a high degree of reprehensibility. However defendant emphasizes the court's criticism of the award there under review for resting in major part on conduct which did not resemble, and had no concrete connection with, the conduct which injured the plaintiffs. Justice Kennedy criticized the punitive claim there for not relying on the insurer's wrongful "conduct toward the Campbells," but for instead having been "used as a platform to expose, and punish, the perceived deficiencies of State Farm's operations throughout the country." (Id. at p. 1521, italics added.) The court went on to identify three categories of conduct which should have been considered with caution, if at all. It first noted that a state "cannot punish a defendant for conduct that may have been lawful where it occurred." (Ibid.; see id. at pp. 1522-1523 [jury should be instructed "that it may not use evidence of out-of-state conduct to punish a defendant for action that was lawful in the jurisdiction where it occurred"].) Such conduct "may be probative when it demonstrates the deliberateness and culpability of the defendant's action in the State where it is tortious, but that conduct must have a nexus to the specific harm suffered by the plaintiff." (Ibid.) Second, a similar constraint will often apply to unlawful out-of-state conduct, given that a state ordinarily has no legitimate interest in "imposing punitive damages to punish a defendant for unlawful acts committed outside of the State's jurisdiction." (Id. at p. 1522.) And finally, punitive damages cannot permissibly rest on "dissimilar acts" that "b [ear] no relation to the [plaintiff's] harm." (Id. at p. 1523.) Defendant contends that these limitations render the award here unconstitutional because the jury heard substantial evidence of wrongful conduct outside California, conduct that may have been lawful where (and when) it occurred, and conduct having no causal connection to the harm suffered by plaintiff. Unlike the defendant in Campbell, however, defendant made no attempt to anticipate the Supreme Court's direction by objecting to the evidence or seeking a limiting instruction. (See Campbell, supra, 123 S.Ct. at pp. 1518, 1519.) Defendant also substantially overstates this aspect of Campbell by suggesting that it rendered such evidence categorically inadmissible. On the contrary, the court acknowledged that such evidence may be considered if a sufficient "nexus" is shown to the plaintiff's claim. (Id. at p. 1522; see Gore, supra, at pp. 572-573, 116 S.Ct. 1589, italics added [state "does not have the power ... to punish [a defendant] 72 for conduct that was lawful where it occurred and that had no impact on [the forum state] or its residents"].) In any event we believe that any error in the consideration of this evidence is sufficiently redressed by the conditional modification we direct here, which reduces the punitive award to a level below which we believe no properly instructed jury was reasonably likely to go. The effect of the evidence affected by these concerns is not nearly as dramatic here as it was in Campbell, supra, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585. There the plaintiffs' own cause of action rested on a delay in allowing a single insurance claim, and associated conduct; yet the claim for punitive damages rested on a wholesale attack on many aspects of the defendant's nationwide business practices, including even its assertedly malicious treatment of its employees. (Id. at p. 1524.) Plaintiff's claims, in contrast, rest on a quintessential "mass tort," i.e., a course of more-or-less uniform conduct directed at the entire public and maliciously injuring, through a system of interconnected devices, an entire category of persons to which plaintiff squarely belongs. This brings us to a consideration of the Campbell court's discussion of the second Gore factor, which is the relationship between the actual damages suffered by the plaintiff and the punitive damage award. It is on this point that we believe the present award of $25 million cannot be sustained. Although the Campbell court reiterated its earlier refusals to "impose a bright-line ratio which a punitive damages award cannot exceed" (Campbell, supra, 123 S.Ct. at p. 1524, citing Gore, supra, at p. 582, 116 S.Ct. 1589; TXO Production Corp. v. Alliance Resources Corp. (1993) 509 U.S. 443, 458, 113 S.Ct. 2711, 125 L.Ed.2d 366), it went on to suggest several concrete numerical guidelines for considering whether a particular award violates constitutional restraints. Specifically, it stated that (1) "few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process"; (2) a "4-to-1 ratio" may typically be "close to the line of constitutional impropriety"; (3) higher ratios may be appropriate where "`a particularly egregious act has resulted in only a small amount of economic damages,'" where "`the injury is hard to detect,'" or where "`the monetary value of noneconomic harm might have been difficult to determine'"; (4) lower ratios perhaps as low as 1 to 1 may "reach the outermost limit of the due process guarantee" where "compensatory damages are substantial"; but (5) the "precise award in any case ... must be based upon the facts and circumstances of the defendant's conduct and the harm to the plaintiff." (123 S.Ct. at p. 1525, quoting Gore at p. 582, 116 S.Ct. 1589.) The court found the award there, which was 145 times the compensatory damages awarded, constitutionally infirm for a number of reasons: (1) the plaintiffs had been fully compensated by a substantial award of compensatory damages; (2) the harm arose from an economic transaction, "not from some physical assault or trauma," and resulted in no physical injuries; (3) the actual economic damages suffered were "minor" because the defendant insurer had ultimately paid the judgment its conduct caused the plaintiffs to suffer; and (4) the compensatory damages thus probably already included an award for "outrage and humiliation," which was then duplicated in the punitive award. (Campbell, supra, at p. 1525.) The court rejected the Utah Supreme Court's conclusion that the award was justified by other factors, notably the wealth of the defendant and the likelihood, according to expert testimony, that other misconduct by the defendant 73 would go unpunished. (Ibid.) The court rejected the Utah Supreme Court's justification of the award on grounds that, under the third Gore"guidepost," it was proportionate to other sanctions which might have been imposed.[21] (Id. at p. 1526.) The court concluded that the award there "was neither reasonable nor proportionate to the wrong committed, and it was an irrational and arbitrary deprivation of the property of the defendant." (Ibid.) It remanded the matter to the Utah courts for a "proper calculation of punitive damages under the principles we have discussed." (Ibid.) In light of Campbell we do not believe the 17-to-1 ratio reflected in the present judgment can withstand scrutiny. As we read that case, a double-digit ratio will be justified rarely, and perhaps never in a case where the plaintiff has recovered an ample award of compensatory damages. Indeed, where a plaintiff has been fully compensated with a substantial compensatory award, any ratio over 4 to 1 is "close to the line." (Campbell, supra, 123 S.Ct. at p. 1525.) Nonetheless we believe a higher ratio (6 to 1) is justified here by the extraordinarily reprehensible conduct of which plaintiff was a direct victim. There is no reason to believe that the compensatory damages were inflated so as to duplicate elements of the punitive award. Moreover, as we have noted, plaintiff's injuries were not merely economic, but physical, and nothing done by defendant mitigated or ameliorated them in any respect. C. Size of Award State Law Constraints. Under California law, a punitive damage award may be reversed as excessive "only if the entire record, viewed most favorably to the judgment, indicates the award was the result of passion and prejudice." (Stevens v. Owens-Corning Fiberglas Corp., supra, 49 Cal.App.4th 1645 at p. 1658, 57 Cal.Rptr.2d 525.) "The purpose of punitive damages is a public one to punish wrongdoing and deter future misconduct by either the defendant or other potential wrongdoers. The essential question for the jury, the trial court, and the appellate courts is whether the amount of the award substantially serves the public interest in punishment and deterrence. The California Supreme Court has established 74 three criteria for making that determination: (1) the reprehensibility of the defendant's misdeeds; (2) the amount of compensatory damages, though there is no fixed ratio for determining whether punitive damages are reasonable in relation to actual damages; and (3) the defendant's financial condition. [Citations.] The wealthier the wrongdoer, the larger the punitive damage award must be to meet the goals of punishment and deterrence. [Citations.]" (Ibid.) Defendant correctly notes that the constitutional soundness of the third consideration has been rendered uncertain by Campbell's seemingly categorical rejection of the Utah Supreme Court's reliance on the defendant's "`massive wealth'" as one justification for the award there. (Campbell, supra, 123 S.Ct. at pp. 1525, 1519, quoting Campbell v. State Farm Mut. Auto. Ins. Co. (Utah 2001) 65 P.3d 1134, 1153.) The court declared that "[t]he wealth of a defendant cannot justify an otherwise unconstitutional punitive damages award." (123 S.Ct. at p. 1525.) We need not determine the precise effect of this declaration on California law, however, because in view of our downward reduction of the verdict we do not believe an instruction on this point would have produced a judgment more favorable to defendant. Defendant also contends that the award is excessive in light of the potential for other actions like this one in which punitive damages may also be awarded, magnifying the deterrent effect. California courts have previously acknowledged the potential multiplicity of awards as a factor that may be weighed, and on proper presentation presumably should or must be weighed, in fixing a punitive damage award. (See Stevens v. Owens-Corning Fiberglas Corp., supra, 49 Cal.App.4th at p. 1661, 57 Cal.Rptr.2d 525; Vossler v. Richards Manufacturing Co. (1983) 143 Cal.App.3d 952, 969, 192 Cal.Rptr. 219, disapproved on other grounds in Adams v. Murakami, supra, 54 Cal.3d 105 at pp. 115-116, 284 Cal.Rptr. 318, 813 P.2d 1348; Delos v. Farmers Insurance Group (1979) 93 Cal.App.3d 642, 667, 155 Cal.Rptr. 843; Rest.2d Torts, § 908, com. e; 6 Witkin, Summary of Cal. Law (9th ed. 1988) Torts, § 1328, p. 786.) The implementation of Campbell will presumably diminish the significance of this factor, however, because it will constrain courts and juries to tailor punitive awards more closely to the harm done to individual plaintiffs, substantially reducing the risk that multiple punitive awards will rest on the same facts and conduct so as to constitute multiple punishment. Again, however, we need not closely consider the issue because we have already weighed the risk of duplicative punishment in further reducing the award. The trial court did likewise, expressly citing the possibility of future awards as one reason to reduce the jury's award from $50 million to $25 million. The court predicted that numerous suits would be filed against defendant, that the costs of defense and any resulting judgments would be substantial, that punitive damages "undoubtedly will be requested and may well be awarded in many such suits," and that this reinforced the court's conclusion "that $25 million is enough to punish and deter in the present context." Defendant has argued that that the award should have been reduced even further, and with our remittitur today it has. We also reiterate our earlier observation that the risk of multiple punitive awards against defendant remains highly speculative. The extent to which other plaintiffs may succeed remains to be seen, particularly in light of Myers and Campbell. Insofar as the award is challenged under California law, we cannot say that, as reduced 75 by the trial court and further reduced by this court, it is the product of passion and prejudice. DISPOSITION The judgment is affirmed in all respects except as to the amount of punitive damages. With respect to that issue, the judgment is modified to reduce the award to $9 million dollars provided plaintiff files a timely consent to such reduction in accordance with rule 24(d), California Rules of Court. If plaintiff does not file such consent, the judgment is reversed with respect to the amount of punitive damages only and remanded for a new trial on that issue. The parties shall bear their own costs on appeal. We concur: KAY, P.J., and REARDON, J. NOTES [1] We use the term "addicted" as shorthand without meaning to declare as a judicial fact that tobacco is addictive in any settled medical sense. That question is not before us. The jury here presumptively found that tobacco was addictive in a sense supported by the evidence and supportive of the judgment. [2] All references to former section 1714.45 are to the version in effect from January 1, 1988, to January 1, 1998. [3] Following the Supreme Court's example, we use the term "immunity" guardedly to describe the defense conferred by former section 1714.45. (See Naegele, supra, 28 Cal.4th at p. 860, fn. 2, 123 Cal.Rptr.2d 61, 50 P.3d 769.) [4] Defendant also raised section 1714.45 in its motion for new trial, and there suggested for the first time that the jury should have been told not to consider defendant's conduct during the immunity window in support of most of plaintiff's theories of liability, or in support of a punitive damages award. As we discuss below, this belated assertion of a time-limited immunity was ineffectual to preserve the issue for appeal; it is relevant here only as evidence that defendant was actually aware of such a theory very soon after the jury returned its verdict. [5] We wrote, "Defendant's claim of erroneous admission of evidence is not cognizable in the absence of an objection below on the ground now asserted. (Evid.Code, § 353, subd (a).) Defendant's statement that the evidence was admitted `despite objection' is somewhat disingenuous: the cited objections had nothing to do with the issue now under discussion. Defendant's complaint that the trial court should have instructed the jury to disregard evidence of conduct supposedly immunized by the statute founders on the acknowledged fact that no such instruction was proffered or requested. Nor does the cited authority (Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal.App.4th 306, 333-334, 5 Cal.Rptr.2d 594) support defendant's claim that the court was required to give such an instruction on its own motion. Finally, in ruling on post-trial motions the trial court was entitled to consider objectionable evidence to which no objection was asserted. (3 Witkin, Cal. Evidence (4th ed. 2000) Presentation at Trial, § 393, p. 484; Cal. Law Rev. Com. com., West's Ann. Evid.Code, § 140.)" (Henley I, typed opn. at p. 7, fn. 4.) [6] We wrote, "We are directed to no evidence that defendant requested an instruction informing the jury that it could not award punitive damages based on conduct during the time the immunity was in effect (the immunity window). Indeed we are directed to no evidence that defendant ever sought to separate the ex post facto issue, as it arose under section 1714.45, from the claim of a total defense based on that statute. Since the ex post facto argument could at most warrant relief affecting punitive damages, and in that regard only to limit the evidence that the jury could consider, it was not adequately presented by a motion for nonsuit, and is not properly before us." (Henley I, typed opn. at p. 22.) [7] See Guardianship of Stephen G. (1995) 40 Cal.App.4th 1418, 1422-1423, 47 Cal.Rptr.2d 409, and cases cited ("Courts have often entertained new arguments on appeal when they rest on new authority that the appellant could not fairly be expected to anticipate"; argument entertained because new authority marked "an unforeseeable departure from prior law"); Fisher v. City of Berkeley (1984) 37 Cal.3d 644, 654, fn. 3, 209 Cal.Rptr. 682, 693 P.2d 261 (antitrust challenge to ordinance entertained where, prior to new decision, challenge "could not reasonably have been expected to survive demurrer"); In re Marriage of Higinbotham (1988) 203 Cal.App.3d 322, 334, 249 Cal.Rptr. 798 (new rule of law viewed as example of principle that point is not lost if it "could not have been raised in the court below"); Clemens v. Regents of University of California (1970) 8 Cal.App.3d 1, 20, 87 Cal.Rptr. 108 (reversing for reconsideration of new trial motion in light of intervening authority where new theory "was not open to [appellant] at the time of trial"; appellant should not be "unfairly penalize[d] ... for a lack of extrasensory perception"); cf. Bihun v. AT & T Information Systems, Inc. (1993) 13 Cal.App.4th 976, 999, 1000, 16 Cal.Rptr.2d 787, brackets in original (point not entertained where, inter alia, it was not one which, prior to new decision, "`could not reasonably have been expected to [succeed]'"; appellant "could have argued by analogy" from existing authorities); Camsi IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1542, 282 Cal.Rptr. 80 (court was "wholly unpersuaded" that prior to rendition of intervening decision, appellant "could not have pursued a nuisance theory"). [8] The Arntz case is also distinguishable because, as noted in a subsequent decision on substantially identical facts, the instruction at issue there purported to enumerate the elements of a tort while leaving out a "material element" as articulated in an intervening Supreme Court decision. (National Medical Transportation Network v. Deloitte & Touche (1998) 62 Cal.App.4th 412, 439, 72 Cal.Rptr.2d 720.) The resulting misdefinition of the tort constituted affirmative misdirection that could be asserted on appeal without an objection in the trial court. (Ibid.) Here there was no misdescription of the elements of any cause of action, and as noted below, no other affirmative misstatement of law. Rather the alleged error consisted of a failure to instruct the jury on a point of evidence. [9] The nearest thing to a reversal for new trial is found in Clemens v. Regents of University of California, supra, 8 Cal.App.3d at p. 20, 87 Cal.Rptr. 108, where the court essentially delegated the question of disposition to the trial court by remanding for reconsideration of the appellant's motion for new trial. The court declared that such a remedy was available and justified "in the narrow circumstances of this case," because the trial court's ruling was "vitally affected" by intervening authority and either an affirmance or a remand for retrial would have been "grossly unjust to the parties." A similar concern for fairness and judicial economy is reflected in In re Marriage of Higinbotham, supra, 203 Cal.App.3d 322, 249 Cal.Rptr. 798, where this division reversed a domestic relations order based on intervening changes in law. Justice Poche took pains to narrow the precedential effect of that disposition by noting that the matter was "being remanded in any event" based on another error, and that as a result "consideration of the [newly asserted] point introduces no significant judicial inefficiency." (Id. at p. 335, 249 Cal.Rptr. 798.) [10] Thus, in its memorandum supporting nonsuit, defendant wrote: "Immunity under Section 1714.45 does not depend on the peculiar circumstances of each case, but rather is `automatic' and justifies judgment on the pleadings in any claim for product liability against tobacco suppliers. [Citation.]" (Italics added.) "[B]ecause the statutory immunity ... was in effect at all times relevant to Plaintiff's claims, she is barred from bringing this personal injury action." (Italics added.) "Section 1714.45 affords Philip Morris virtually absolute immunity for acts committed prior to January 1, 1998." (Italics added.) [11] At oral argument, counsel for defendant disclaimed any contention that something happened after trial to cause defendant to raise the point. [12] E.g., Hattersley v. American Nucleonics Corp. (1992) 3 Cal.App.4th 397, 402, 4 Cal.Rptr.2d 331 (point rested on "intervening clarification of the law" and resolution of issue depended on undisputed facts); Fisher v. City of Berkeley, supra, 37 Cal.3d 644 at p. 654, fn. 3, 209 Cal.Rptr. 682, 693 P.2d 261 (pure question of law, undisputed facts, important questions of public policy); Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 24, 44 Cal.Rptr.2d 370, 900 P.2d 619 ("question of law based on undisputed facts"); In re Marriage of Higinbotham, supra, 203 Cal.App.3d 322, at p. 335, 249 Cal.Rptr. 798 ("question of law determinable from a factual situation already present in the record"); Moschetta, supra, 25 Cal.App.4th 1218, 1227-1228, 30 Cal.Rptr.2d 893 ("matter of intense public and legal concern"). [13] The court wrote: "Philip Morris urges that California's ten year exemption of tobacco manufacturers from liability, as reflected in former Civil Code § 1714.45, bars most of plaintiff's claims. This Court disagrees. Whereas the exemption was in effect between 1988 and the end of 1997, plaintiff smoked, and became addicted to, Philip Morris' cigarettes in the decades before the exemption went into effect and was first diagnosed with lung cancer after the exemption was lifted. It would be an odd and illogical result, unsupported by the law, if an exemption were to bar an action brought by a person who (a) became addicted to a product as a result of wrongful conduct occurring before the commencement of the exemption, and (b) was diagnosed with disease only after its termination. Moreover, present Civil Code § 1714.45(f) evidences the clear legislative intent to hold tobacco manufacturers accountable in situations such as that presented in the case at bar." (Italics added.) [14] As the court observed in Marsango v. Automobile Club of So. Cal., supra, 1 Cal.App.3d 688 at p. 695, 82 Cal.Rptr. 92, the opportunity to retry newly raised issues after a reversal on appeal is not enough to secure "fairness to the litigants": "Litigation is an adversary process contemplating an element of risk to all parties. To permit a change of theory on appeal is to allow one party to deal himself a hole card to be disclosed only if he loses. Even if that device does no more than give him a second chance, it has unbalanced the inherent risk of the litigation and put the other party at a disadvantage. Such a process is to be allowed if at all only under unusual circumstances as for example where the question is purely one of law so that it cannot be said that the balance of litigation risk was altered by the failure to raise it at trial." (See Curcio v. Svanevik (1984) 155 Cal.App.3d 955, 961, 202 Cal.Rptr. 499 [quoting this passage in context of stipulation withdrawing issue from jury].) [15] To conclude otherwise would cause this boilerplate standard instruction to overturn the rule, codified at Evidence Code section 353, that a party may not complain of the erroneous admission of evidence unless he or she lodges an appropriate objection at trial. Defendant implicitly concedes that it cannot complain of the admission of evidence of immunized conduct since it raised no objection to that evidence when it was introduced and sought no contemporaneous admonition as to the limited purposes for which it could be considered. Defendant's claim of "instructional error" is really a claim that such an admonition should have been given at the conclusion of trial. We question whether a party can sit mute while objectionable evidence is admitted for all purposes and then claim an entitlement to a jury instruction, which amounts in effect to a belated admonition as to limited admissibility. We need not decide the point, however, because defendant neither objected to the evidence when it was admitted nor requested the instruction to which it now asserts an entitlement. [16] As italicized in defendant's brief, the challenged instruction provided in part: "[B]ecause of federal law, and except only as stated below, you may not base any findings of liability on a determination that (a) defendant Philip Morris, through its advertising or promotional practices, neutralized, minimized or undermined the effect of the federally-mandated warnings after July 1, 1969, or (b) defendant Philip Morris, after July 1, 1969, failed to disclose, or concealed or suppressed, information about the health risks of smoking. [¶] The federal law does not limit the potential liability of Philip Morris against claims that it made misrepresentations about the health risks of smoking or that it conspired with other cigarette companies to conceal, suppress, or misrepresent information regarding the health effects of smoking." [17] We do not consider two related questions, not presented in Soule, concerning the applicability of its holding where (1) the ordinary user of a product may be predisposed by psychological and pharmacological factors associated with its use to perceive its risks differently than do other members of the public, and (2) the "minimum safety" of the product is a matter of public controversy as to which consumers have been exposed to a variety of conflicting opinions, assertions, and sophisticated propaganda techniques intended to neutralize any perception of danger. [18] Comment i provides: "i. Unreasonably dangerous. The rule stated in this Section applies only where the defective condition of the product makes it unreasonably dangerous to the user or consumer. Many products cannot possibly be made entirely safe for all consumption, and any food or drug necessarily involves some risk of harm, if only from over-consumption. Ordinary sugar is a deadly poison to diabetics, and castor oil found use under Mussolini as an instrument of torture. That is not what is meant by `unreasonably dangerous' in this Section. The article sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics. Good whiskey is not unreasonably dangerous merely because it will make some people drunk, and is especially dangerous to alcoholics; but bad whiskey, containing a dangerous amount of fu[ ]el oil, is unreasonably dangerous. Good tobacco is not unreasonably dangerous merely because the effects of smoking may be harmful; but tobacco containing something like marijuana may be unreasonably dangerous. Good butter is not unreasonably dangerous merely because, if such be the case, it deposits cholesterol in the arteries and leads to heart attacks; but bad butter, contaminated with poisonous fish oil, is unreasonably dangerous." [19] The documents cited by the trial court amply showed knowledge by defendant that its Marlboro cigarettes were particularly successful among children. Another document shows that this was no accident, but the deliberate result of symbols consciously manipulating the adolescent mentality: "Marlboro's traditional area of strength has, of course, been young people because the principal message its imagery delivers is independence. For young people who are always being told what to do, the Marlboro man says, `I'm in charge of my life. [¶].... [¶] [T]he maturity of the Marlboro man makes him representative of the ideal smoker self confident and secure." [20] Obviously defendant's conduct was also particularly reprehensible on the fourth and fifth axes, i.e., it "involved repeated actions" rather than "an isolated incident," and it inflicted harm by "intentional malice, trickery, or deceit," rather than "mere accident." (Campbell, supra, 123 S.Ct. at p. 1521.) These factors are present even when we focus on the conduct contributing to plaintiff's own injuries. [21] The court noted that the existence of criminal penalties was of doubtful significance, particularly where the likelihood of a criminal sanction was remote. (Campbell, supra, at p. 1526.) The "most relevant civil sanction" under Utah law was a fine of $10,000, "an amount dwarfed by the $145 million punitive damages award." (Ibid.) The court rejected "speculat[ion]" about sanctions such as license revocation and disgorgement of profits, noting that "here again [the Utah court's] references were to the broad fraudulent scheme drawn from evidence of out-of-state and dissimilar conduct." (Ibid.) We place limited reliance on the proportionality factor here, but note that defendant's earlier arguments on this point seemed to backfire. Defendant suggested analogizing its conduct to furnishing tobacco to a minor under California law (Bus. & Prof.Code, § 22958 [civil penalty from $200 for first offense to $6,000 for fifth offense]; Pen.Code, § 308 [penal fine of $200 for first offense up to $1,000 for third offense]) or to violations of the 1969 Act (15 U.S.C. § 1337 [$10,000 per violation]). By our calculations, and in light of the repetitive nature of defendant's conduct, these statutes could support fines in the range of $6.6 million to $11 million, respectively. Assuming plaintiff smoked for three years before reaching the age of 18, and assuming defendant (by its own analogy) furnished cigarettes to her every day of that time, its conduct would seemingly constitute nearly 1,100 violations of the two California statutes cited, and would arguably constitute as many violations of the federal statutes. Assessing the maximum civil penalties of $6,000 and $10,000, respectively, would yield a total state penalty of some $6.6 million and a federal penalty of some $11 million.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/827107/	Order Michigan Supreme Court Lansing, Michigan September 6, 2011 Robert P. Young, Jr., Chief Justice 143110 Michael F. Cavanagh Marilyn Kelly Stephen J. Markman Diane M. Hathaway Mary Beth Kelly PEOPLE OF THE STATE OF MICHIGAN, Brian K. Zahra, Plaintiff-Appellee, Justices v SC: 143110 COA: 302730 WENDELL LEE TAYLOR, Kent CC: 10-000593-FC Defendant-Appellant. _________________________________________/ On order of the Court, the application for leave to appeal the April 11, 2011 order of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court. I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court. September 6, 2011 _________________________________________ h0829 Clerk	01-03-2023	03-01-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348175/	199 Ga. App. 244 (1991) 404 S.E.2d 600 WILSON v. VALENTINE. A90A1961. Court of Appeals of Georgia. Decided March 5, 1991. Rehearing Denied March 25, 1991. Downey, Cleveland, Parker & Williams, G. Lee Welborn, for appellant. 246 Waln & Miningham, William M. Miningham III, for appellee. BANKE, Presiding Judge. The appellee filed this action to recover for personal injuries allegedly sustained when a motor vehicle in which she was riding was struck by another vehicle. Named as defendants are the driver of the vehicle in which the appellee was riding, who is the appellant herein, the driver of the other vehicle, whose name is Rackley, and Rackley's employer. The appellee settled her claims against Rackley and his employer, following which the appellant moved for summary judgment. The case is before us on interlocutory appeal from the denial of that motion. Although the appellee neither filed a written response to the appellant's motion for summary judgment within the time required by Uniform Superior Court Rule 6.2 nor requested oral argument on the motion, a hearing was nevertheless scheduled; and on the day of the hearing, the appellee filed her own and Rackley's depositions. The trial court's denial of the motion for summary judgment was based on a determination that Rackley's deposition raised a jury issue as to whether the appellant had been negligent. Held: 1. The appellant contends that he was entitled to summary judgment based on the appellee's failure to file a written response to the motion within the time required by Rule 6.2. This contention is without merit. "There is no such thing as a `default summary judgment.' By failing to respond to a motion for summary judgment, a party merely waives his right to present evidence in opposition to the motion. It does not automatically follow that the motion should be granted. `A motion for summary judgment should not be granted unless it affirmatively appears from the pleadings and the evidence that 245 the party so moving is entitled to prevail.' [Cits.]" McGivern v. First Capital Income Prop., 188 Ga. App. 716, 717 (373 SE2d 817) (1988). 2. The appellant alternatively contends that the trial court erred in considering Rackley's deposition because it was not timely filed. However, the record does not reflect that the appellant objected to the filing of the deposition or to the trial court's consideration of it in ruling on the motion for summary judgment. Accordingly, this contention provides no ground for reversal. Accord O'Quinn v. Southeast Radio Corp., 190 Ga. App. 608, 610 (1) (380 SE2d 487) (1989). 3. The appellant contends that the evidence established without dispute that the collision was not proximately caused by any negligence on his part. The evidence showed that the appellant was in a left turn lane on Atlanta Road at the time the collision occurred, proceeding towards an intersection at a speed of 10 to 15 miles per hour. He testified that the traffic light at the intersection was green in his direction and that as he was preparing to make his left turn, he was struck on the right passenger door by Rackley, who had just turned left onto Atlanta Road from a side street. The appellant testified that he had observed Rackley edging out onto Atlanta Road and that "[h]e [Rackley] just looked to the right and then pulled out without looking to the left at all." The appellee similarly testified that she did not observe Rackley look to his left before he pulled out onto Atlanta Road and further stated that the appellant had not acted in a negligent manner. However, Rackley maintained that he had in fact looked to his left before pulling out onto the roadway. "`"It is generally a question for a fact-finding body to determine questions of negligence and whose negligence and what negligence involved is the sole proximate cause of the injury. It is only where the negligent conduct alleged is susceptible of but one inference that it becomes a question of law for the court to determine."' [Cits.]" Lewis v. Duggan, 184 Ga. App. 563, 565 (362 SE2d 73) (1987). We believe the evidence of record in the present case, including the appellee's own testimony, conclusively negates any allegation that the collision was proximately caused by negligence on the part of the appellant and establishes as a matter of law that Rackley simply drove directly into the appellant's vehicle from a side street. We accordingly hold that the trial court erred in denying the appellant's motion for summary judgment. Judgment reversed. Birdsong, P. J., and Cooper, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348188/	199 Ga. App. 99 (1991) 404 S.E.2d 123 MOSELEY v. COASTAL PLAINS GIN COMPANY, INC. A90A1901. Court of Appeals of Georgia. Decided February 20, 1991. Rehearing Denied March 13, 1991, and March 15, 1991. Dennis, Corry, Porter & Thornton, Robert E. Corry, Jr., William E. Gray II, for appellant. Reinhardt, Whitley & Wilmot, Bob Reinhardt, Glenn Whitley, for appellee. SOGNIER, Chief Judge. Coastal Plains Gin Company, Inc. brought suit against W. Grant Moseley, Sr., d/b/a Moseley & Associates seeking actual and punitive damages for Moseley's failure to procure requested insurance coverage. The jury returned a verdict in favor of Coastal Plains, and Moseley appeals. Evidence was adduced at trial that when appellee came into existence and began construction in February 1985 on its ginning facilities, appellant approached appellee's president, Randy Dunn, told Dunn that he was an expert in the area of insuring cotton gin facilities, and solicited appellee's insurance business. Dunn testified that due to his own inexperience in the area, he decided in May 1985 to place appellee's insurance through appellant because of appellant's expertise. Dunn testified that among the many coverages he requested was a gin stock floater policy, which he stated encompassed cotton on the yard and baled cotton until deposited at a bonded warehouse, excluding only the period when the cotton was actually being processed in the gin. Appellee paid the premium requested by appellant, including an amount Dunn testified he thought represented a premium for the gin stock floater policy. Appellee's employees were instructed by appellant regarding maintenance of the extensive records needed for gin stock floater coverage. When appellee determined it would enter the module business (whereby cotton is packed on cotton wagons in the fields), Dunn testified he checked with appellant and was advised the gin stock floater policy also would insure appellee from any damage to the cotton in the field, and recalled appellant telling him that appellee was "covered like an umbrella." Appellant also inspected appellee's facilities, which were completed in September 1985, and gave advice to Dunn and others regarding the treatment of the cotton, at one point advising Dunn to keep the newly baled cotton out of the warehouse for 48 hours. Pursuant to appellant's instructions, the baled cotton was stored at the loading docks to the gin house. In November 1985 the gin house burned, along with 100 most of the baled cotton inside. Although the evidence conflicted whether appellee had received a binder from appellant indicating no gin stock floater policy had been purchased, it is uncontroverted that appellee did not receive the insurance policies themselves from appellant until after the fire, at which time appellee discovered appellant had not obtained the gin stock floater policy appellee had requested. The major issues in this case were (1) whether appellant undertook to procure gin stock floater coverage for appellee; (2) if so, whether appellant was guilty of fraud or negligence in his performance of that undertaking; (3) and if so, whether appellee knew from viewing the binder or otherwise that the coverage had not been procured; (4) but if not, whether the policy appellant was to obtain pursuant to the terms agreed upon by the parties would have covered the loss suffered by appellee. It thus appears that appellant's expertise in the area of insurance for cotton gin facilities was relevant only in regard to the fourth issue because had appellee learned of the policies obtained by appellant it could have determined for itself the presence or absence of the gin stock floater policy and the limits of coverage under that policy. See Greene v. Lilburn Ins. Agency, 191 Ga. App. 829 (383 SE2d 194) (1989). 1. We find no error in the trial court's denial of appellant's motions for judgment notwithstanding the verdict and new trial. (a) Appellant's main argument is that the policy the parties agreed appellant would procure would not have covered the loss for which appellee brought suit, so appellee failed to prove it was damaged by appellant's negligence. Appellant bases this argument on a standard industry gin stock floater policy and the terms of appellee's current policy, neither of which apparently would have covered the damage appellee sustained. However, the issue was not the extent of coverage appellee's requested gin stock floater policy might have provided had appellant obtained a standard industry policy, or whether appellee, upon receiving the nonexistent policy, would have realized the coverage did not apply to the cotton on the loading docks and perhaps requested additional coverage. Since it is uncontroverted that appellee never received any of its policies so that it could have determined for itself what a gin stock floater policy covered, the relevant coverage is not what is or may be provided in standard industry policies but rather what coverage appellee requested and appellant represented had been provided in the policy the parties agreed upon, which appellee never received. "Where one undertakes to procure insurance for another and is guilty of negligence in his undertaking, he is liable for loss or damage to the limit of the agreed policy." (Citations and punctuation omitted.) Ga. Farm &c. Ins. Co. v. Arnold, 175 Ga. App. 850, 851 (1) (334 SE2d 733) (1985). Since there is some evidence that the policy the 101 parties agreed appellant would procure would have covered the loss sustained by appellee, the trial court did not err by denying appellant's motions for judgment n.o.v. and new trial. See generally Milam v. Attaway, 195 Ga. App. 496, 497-498 (1) (393 SE2d 753) (1990). (b) In view of the testimony by appellee's employee, Norma Jean Warren, that the records detailing the cotton destroyed by the fire excluded the 47 bales of burnt cotton, which Warren testified was the only cotton appellee was able to salvage from the fire, we find no merit in appellant's argument that the trial court should have granted its motions because appellee failed to prove the after value of the damaged goods. (c) We find no merit in appellant's arguments that the trial court erred by denying its motions as to the award of punitive damages and expenses of litigation. See Speir Ins. Agency v. Lee, 158 Ga. App. 512, 514 (3), (4) (281 SE2d 279) (1981). 2. Appellant contends the trial court erred by giving the jury appellee's requested charge, which provided that "should you find that [appellant] held himself out to [appellee] as an expert and highly skilled insurance adviser and further that he undertook to advise the insured who relied on such advice, he would be obligated to provide to [appellee] a higher standard of care that could reasonably be expected of someone possessing such expertise." We agree that the giving of this charge was reversible error. First, even giving the jury credit for ordinary intelligence, see Smaha v. Moore, 193 Ga. App. 23, 24 (387 SE2d 13) (1989), we cannot agree with appellee that the average juror could possibly have interpreted "higher standard of care" to mean the higher "level of performance" appellee expected appellant to provide because of his alleged expertise. We note that the use of the "higher standard of care" language did not qualify as a verbal slip of the tongue since the record reveals that trial court's charge tracked the language in appellee's request to charge no. 7. Second, the authorities cited by appellee in support of the giving of its charge reveal that the charge was not requested as a discussion of the performance level expected from an expert. Appellee cited European Bakers v. Holman, 177 Ga. App. 172, 175 (4) (338 SE2d 702) (1985) and the federal district court case discussed therein, which involve the standard of care to which an insurance expert is held, not the quality of service an insurance expert should provide. However, we do not agree with appellee that as to the standard of care of insurance agents representing themselves as experts, that anything in European Bakers supports giving of the above charge in the language employed. In European Bakers, this court reversed the denial of a motion for directed verdict made by the client of an insurance agent and his 102 agency, on the basis that they were acting as the client's agent, thereby creating a fiduciary relationship between the parties. Id. at 174 (2). In the course of discussing other matters that would possibly recur upon retrial of the case, we disapproved an instruction which reflected an incomplete statement of the law as asserted in two foreign authorities. Id. at 175 (4). European Bakers did not change the well established law that "[t]he standard of ordinary and reasonable care is invariable, such care being that of every prudent man. [Cit.] But the care of a prudent man varies according to circumstances dependent upon the degree of danger. [Cits.] `What is the precise legal intent of the term "ordinary care" must, in the nature of things, depend upon the circumstances of each individual case. It is a relative and not an absolute term.'" Central R. &c. Co. v. Ryles, 84 Ga. 420, 430 (11 S.E. 499) (1890). Consistent with the relative nature of ordinary care we have held that "[t]he law imposes upon persons of professional standing performing ... skilled services, pursuant to their contracts made with their clients, an obligation to exercise a reasonable degree of care, skill and ability, such as is ordinarily exercised under similar conditions and like circumstances by persons employed in the same or similar professions. [Cits.]" Mauldin v. Sheffer, 113 Ga. App. 874, 880 (150 SE2d 150) (1966). We find the language relied upon by appellee in European Bakers, supra, to be a consistent, but incomplete, statement of the above law. Hence, while an agent who holds himself out as possessing expertise over and above that possessed by the average insurance agent may be held, relative to the nonexpert insurance agent, to a higher standard of care than the nonexpert, nonetheless the standard of care as to the expert is that of ordinary care employed by like experts. Indeed, rather than creating a higher standard of care for insurance experts, as the given charge seems to indicate, European Bakers actually was seeking only to add to the list of professionals and specialists who are held to the degree of care ordinarily exercised under similar conditions by other professionals in that area, such as those set forth in Mauldin, supra, those insurance agents who hold themselves out as possessing particular skill or expertise. See Hardt v. Brink, 192 FSupp. 879, 880-881 (W.D. Wash. 1961) and Nowell v. Dawn-Leavitt Agency, 617 P2d 1164, 1167 (Ariz. App. 1980), both cited in European Bakers, supra. Although the trial court subsequently charged the jury on the standard of ordinary care, no instruction explaining the "higher standard of care" language in the contested charge was given so as to make that improper charge comply with the correct law, as discussed above. "When an error in the charge of the court is shown to exist, it is presumed to be prejudicial and harmful, and this court will so hold unless it appears from the entire record that the error is harmless." (Citation and punctuation omitted.) Hopkins v. First Union Bank, 103 193 Ga. App. 109, 112 (2) (a) (387 SE2d 144) (1989). We hold that a reasonable jury may have construed the standard of care erroneously because of the contested charge or may have construed the sentence to render askew the standard of care set forth subsequently in the trial court's proper charge on that issue. Compare Clemons v. Atlanta Neurological Institute, 192 Ga. App. 399, 402 (384 SE2d 881) (1989). We therefore conclude the giving of this charge constituted reversible error. 3. Appellant enumerates error regarding the giving of three other charges. (a) Our review of the evidence adduced at this trial reveals that all of appellant's actions, advice, and representations in issue in this case were undertaken by appellant for the purpose of obtaining or maintaining appellee's business, for which appellant expected compensation. We therefore agree with appellant there was no evidence to support the giving of a charge on gratuitous promise, and the giving of such a charge under the facts adduced at this trial was error. See generally Don Swann Sales Corp. v. Edward, 194 Ga. App. 807, 808 (2) (392 SE2d 29) (1990). (b) Read and considered as a whole, see generally Department of Transp. v. Hillside Motors, 192 Ga. App. 637, 640 (3) (385 SE2d 746) (1989), we find no error in the trial court's charge on compensatory and punitive damages. (c) As to the charge based on OCGA § 33-23-79, regarding an agent's treatment of premiums, we note that it is not reversible error to charge an entire Code section even though only a part of it may be applicable. Kelley v. Foster, 192 Ga. App. 95-96 (2) (383 SE2d 646) (1989). In view of the evidence regarding appellee's possible overpayment of premiums and appellant's failure to return the excess funds to appellee, we cannot say there was no evidence to support the giving of this charge. It is well settled that "an instruction is not inapplicable where there is any evidence, however slight, on which to predicate it. [Cit.]" Ellis v. Dalton, 194 Ga. App. 114 (1) (389 SE2d 797) (1989). 4. Appellant contends the trial court erred by failing to give three requested charges. Contrary to appellant's contention, the transcript reveals that the trial court did charge the jury on avoidance and comparative negligence and that the language it employed was substantially similar to that in appellant's requested charges. No error is therefore presented. See generally Hornsby v. Phillips, 190 Ga. App. 335, 341 (6) (378 SE2d 870) (1989). Because the evidence was undisputed that appellee never received any insurance policies prior to the fire, there was no evidence to support appellant's requested charge regarding the duty of an insured to read his policy. A requested charge need be given only when it embraces a correct and complete principle of the law and is pertinent and adjusted to the facts of the *104 case, see Money v. Daniel, 188 Ga. App. 215, 216 (1) (372 SE2d 305) (1988), and thus no error is presented. In view of the conflicting evidence on appellee's access to the insurance binder we note that the giving of a modified version of appellant's charge regarding such binders, as appellant admits in his brief the trial court charged the jury in this case, would be proper on retrial. Judgment reversed. McMurray, P. J., and Carley, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348249/	404 S.E.2d 188 (1991) 103 N.C. App. 69 Edna D. WORRELLS, Plaintiff, v. NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Defendant. No. 904SC165. Court of Appeals of North Carolina. May 21, 1991. 189 S. Reginald Kenan, Warsaw, for plaintiff-appellee. Anderson, Cox, Collier & Ennis by Donald W. Ennis and William T. Corbett, Jr., Wrightsville Beach, for defendant-appellant. JOHNSON, Judge. This case arises from a dispute involving the payment of fire insurance proceeds. The following facts are undisputed. On or about 28 December 1984, Willie Lee Worrells and defendant North Carolina Farm Bureau Mutual Insurance Company (Farm Bureau) entered into an insurance contract which provided fire insurance for a house situated on land owned by Willie Lee and Edna Worrells, as tenants by the entirety. At that time Mr. Worrells was married to, but separated from, Edna Worrells and he lived on and maintained the property. The policy at issue listed Mr. Worrells as the named insured on the declarations page and included the following exclusionary clause: "[t]hroughout this policy `you' and `your' refer to the `named insured' shown in the Declarations and the spouse if a resident of the same household[.]" (Emphasis added.) On 28 November 1985, the house was destroyed by fire. On 19 December 1985, Mr. Worrells submitted a sworn proof of loss as required by the policy to recover the full amount of damage to the house and further complied with all other policy requirements in connection with his claim. On 7 January 1986, plaintiff and Mr. Worrells were granted an absolute divorce. On 26 April 1986 and 8 January 1987, defendant Farm Bureau presented Mr. Worrells with two separate checks totaling about $28,000 as complete payment for both real property and personal property losses. This money was paid to Mr. Worrells over the objections of plaintiff and her attorney. On 25 June 1987, plaintiff brought suit against Farm Bureau to recover one-half of the proceeds as a tenant in common. She alleged breach of contract, conversion, unfair trade practices and bad faith refusal to settle. Plaintiff moved for summary judgment. By order dated 31 October 1989, the court granted, inter alia, plaintiff's motion for summary judgment on the issue of whether Edna Worrells was a named insured on the insurance policy and by judgment dated 11 December 1989 ordered that plaintiff recover one-half of the actual cash value of the repairs to the house. From this judgment, defendant appeals. Initially, we note that neither side argues the effect, if any, of an equitable distribution judgment which appears to have been made prior to the payments to Mr. Worrells and in which plaintiff was granted one-half the value of the house. See Lamb v. Lamb, 92 N.C.App. 680, 375 S.E.2d 685 (1989). The only evidence in the record of this equitable distribution judgment appears in the transcript of the summary judgment hearing and the mere mention of it in the affidavit of Edna Worrells. This issue is not properly before us and we did not address it. Defendant's sole contention on appeal is that the trial court erred as a matter of law in ruling that plaintiff was an insured under the homeowner's policy. Farm Bureau argues that the insurance policy at issue is a personal contract between the named insured and the insurer and that the exclusionary clause is valid as to the plaintiff-spouse. Defendant points to the exclusionary clause as distinguishing the instant case from the leading case of Carter v. Insurance Co., 242 N.C. 578, 89 S.E.2d 122 (1955). In Carter, our Supreme Court considered, in a case of first impression, 190 whether a wife, living separate and apart from her husband, could collect on an insurance policy taken out by him alone on entireties property. In that case, the husband and wife owned a house as tenants by the entirety. They separated, and at all relevant times afterward the husband lived in and had possession of the insured house while the wife lived elsewhere. After the separation, the husband took out a fire insurance policy on the house. The policy was issued in his name alone and he paid the premiums. At some point, fire caused a loss in excess of the policy amount. Husband demanded payment in the full amount of the policy. Wife demanded that she be paid one-half of the insurance proceeds. After the fire, but before payment was made, the parties were granted an absolute divorce. The trial judge granted the full amount to the husband and the wife appealed. The Supreme Court stated the issue to be "whether a husband's interest in an estate by the entirety is insurable for his benefit alone, as a separate moiety apart from the entire estate owned by him and his wife." Id. at 579, 89 S.E.2d at 123. The Court held that it was not and that the loss benefits created by the insurance policy inured to the benefit of the entire estate as owned by both husband and wife. In its discussion, the Carter Court noted that the policy at issue was a "standard form policy" which contained no special provision excluding the wife from coverage. Id. at 580, 89 S.E.2d at 124. In its analysis the Court relied on the "fundamental principles governing this peculiar estate of the husband and wife." Id. at 579, 89 S.E.2d at 123. Thus the Court looked not to contract law but to the characteristics of the entireties estate for the solution. Cf. McDivitt v. Pymatuning Mut. Fire Ins. Co., 303 Pa. Super. 130, 449 A.2d 612 (1982) (criticizing Carter for "missing the mark" by relying on the special nature of the entirety relationship; emphasized instead the personal nature of the insurance contract). In Lovell v. Insurance Co., 302 N.C. 150, 274 S.E.2d 170 (1981), also a case of first impression, our Supreme Court adopted the "innocent spouse" doctrine as developed in other jurisdictions. In Lovell, the wife owned property with her husband as tenants by the entireties. The property was insured by a policy issued to the husband, the named insured. The husband intentionally burned the entirety property and the insurer refused to pay any amount to the wife, claiming that she was barred by the intentional act of her husband. The Court of Appeals agreed, applying the law relating to tenancies by the entirety as well as the provision of the policy which excluded recovery for an intentional burning. The Supreme Court, applying the "more relevant rules of insurance and contract law," reversed and held that the wife was entitled to recover from the insurance company to the extent of one-half the value of the policy. Lovell, 302 N.C. at 152, 274 S.E.2d at 171. The Lovell Court adopted the view of the New Jersey court in Howell v. Ohio Cas. Ins. Co., 130 N.J.Super. 350, 327 A.2d 240 (App.Div.1974), that the contract rights are several, not joint, and able to be possessed separately and individually by each spouse. Lovell, 302 N.C. 150, 274 S.E.2d 170. The Lovell Court declined to accept their appellee's argument that the wife has no rights under the policy when only the husband is named as insured and beneficiary. The Court noted: [f]irst, the case law in North Carolina clearly establishes that the wife is also an insured party, if the property is held by the entirety, even though only the husband's name appears on the policy. Carter v. Insurance Co., 242 N.C. 578, 89 S.E.2d 122 (1955). Second, by enacting G.S. 58-180.1 [now G.S. 58-44-45] the legislature apparently intended to resolve the related question of whether a policy insuring entirety property was void if issued solely in the name of either husband or wife. That statute, coupled with the clear rule of law established by case precedent, was sufficient notice to defendants that by insuring the interest of the husband it also insured the interest of plaintiff wife. Lovell, 302 N.C. at 153, 274 S.E.2d at 172. Thus the Lovell Court did not appear to see a conflict between the application of contract and insurance law to the innocent spouse situation and the application of entireties law to the Carter situation. *191 We find that the decision in Lovell is a consequence of the particular inequities which would otherwise result were entireties law applied to the innocent spouse situation. No such inequities exist in the case sub judice and thus the Carter case controls. The insured property in the instant case was owned by the Worrells as tenants by the entireties. "These two individuals, by virtue of their marital relationship, acquire the entire estate, and each is deemed to be seized of the whole, and not of a moiety or any undivided portion thereof." Carter, 242 N.C. at 579, 89 S.E.2d at 123, quoting Davis v. Bass, 188 N.C. 200, 203, 124 S.E. 566, 568 (1924). Once such an estate is established, neither spouse can sever it by his or her sole act. Davis, 188 N.C. 200, 124 S.E. 566. The exclusionary clause in the insurance contract was thus ineffective to exclude Mrs. Worrells as a named insured. Upon the granting of the absolute divorce, the entireties estate was converted into a tenancy in common and the cash proceeds were personal property held as tenants in common. Carter, 242 N.C. at 580, 89 S.E.2d at 124. We affirm the judgment of the court below holding that plaintiff is an insured under the defendant's fire insurance policy and is entitled to one-half of the actual cash value of the repairs to the subject property. Affirmed. PARKER and ORR, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264498/	14 Cal. App. 4th 1348 (1993) 18 Cal. Rptr. 2d 900 DEPARTMENT OF EDUCATION, DIVISION OF STATE SPECIAL SCHOOLS, CALIFORNIA SCHOOL FOR THE DEAF, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and THELMA SWAIN GILL, Respondents. Docket No. A056407. Court of Appeals of California, First District, Division Five. March 16, 1993. 1350 COUNSEL Krimen, Hershenson, Klein, Da Silva & Daneri and Don E. Clark for Petitioner. Langer & Murray and John J. Murray for Respondents. OPINION PETERSON, P.J. In this case, we hold that the Workers' Compensation Appeals Board (Board) did not have jurisdiction to alter the permanent and stationary date of the earliest industrial injury sustained by respondent Thelma Swain Gill (applicant), in order to apply the principles enunciated in Wilkinson v. Workers' Comp. Appeals Bd. (1977) 19 Cal. 3d 491 [138 Cal. Rptr. 696, 564 P.2d 848] (Wilkinson) and to award applicant a single combined permanent disability (PD) rating of 100 percent for her three successive industrial injuries. Even though the threshold prerequisites of Wilkinson are met and the medical evidence credibly supports a finding that applicant is totally and permanently disabled, apportionment of PD is appropriate pursuant to Fuentes v. Workers' Comp. Appeals Bd. (1976) 16 Cal. 3d 1 [128 Cal. Rptr. 673, 547 P.2d 449] (Fuentes) because the award of PD for applicant's earliest injury is final and cannot be disturbed. For the reasons discussed below, we are compelled to annul and remand the decision of the Board. I. FACTUAL AND PROCEDURAL BACKGROUND Applicant, while employed as a cook by petitioner California School for the Deaf (CSD), sustained four successive industrial injuries, as follows: (1) 1351 on December 2, 1966, to her back (OAK 38781); (2) on October 9, 1970, to her back (OAK 38782); (3) on May 19, 1987, to her head, back, and right leg (OAK 157587); and (4) from 1970 to January 31, 1988, to her back and legs (OAK 159231). On August 8, 1972, findings and award issued in the first two injury cases. All of the PD emanated from the second injury sustained on October 9, 1970, in OAK 38782.[1] Applicant was awarded a 7 1/2 percent PD rating, the monetary equivalent of $1,459.50, payable at $48.65 per week pursuant to the statutory scheme in effect at the time of the 1970 injury. (Lab. Code,[2] § 4658.) Subsequently, applicant timely petitioned to reopen the October 1970 injury, claiming new and further disability. The petition was granted. On June 27, 1975, applicant was awarded, as pertinent, an additional PD rating for the injury of October 9, 1970, of 20 percent, the monetary equivalent of $3,892, payable at $48.65 per week commencing on March 29, 1975. No further petitions to reopen the injury claim of October 9, 1970, were filed by applicant. The award of June 27, 1975, was final. On September 26, 1991, findings and award issued in the latter two injury cases (OAK 157587, 159231). The workers' compensation judge (WCJ) found applicant permanently, totally disabled as a result of all three injuries. The WCJ relied on medical opinion that applicant's condition resulted in a limitation to semisedentary[3] or sedentary[4] work, expert vocational testimony that applicant was not feasible for vocational rehabilitation pursuant to LeBoeuf v. Workers' Comp. Appeals Bd. (1983) 34 Cal. 3d 234 [193 Cal. Rptr. 547, 666 P.2d 989], and applicant's credible testimony regarding her level of pain, physical limitations, and inability to work. These findings are not contested on review. 1352 The WCJ further determined that the three industrial injuries were to the same part of the body and became permanent and stationary at the same time. Relying on Harold v. Workers' Comp. Appeals Bd. (1980) 100 Cal. App. 3d 772 [161 Cal. Rptr. 508] (Harold), he issued a single combined PD award of 100 percent for all three injuries pursuant to the principles enunciated by Wilkinson, supra, 19 Cal. 3d 491. The PD was ordered payable at the PD rates in effect at the time of the last cumulative injury ending on January 31, 1988. This resulted in a total PD award to applicant for the balance of her life in the weekly amount of $224 (see §§ 4452.5, subd. (a); 4453, subd. (a)(2); 4658, subd. (a)), with monetary credit for all prior payments, including the original PD awards of 7 1/2 and 20 percent for the earliest injury in October 1970. CSD filed a petition for reconsideration. On November 5, 1991, the WCJ submitted to the Board his report on petition for reconsideration, recommending that the petition be denied. Pertinent to the issues on review, the WCJ stated: "The findings and award in OAK 38782 [1970 injury] cannot be altered now, but it may nonetheless be combined with the new cases, so long as the carrier is given credit for all it has already paid toward applicant's 100 percent rating. [Citation to Harold, supra, 100 Cal. App.3d at pp. 786-787.] Thus, even though applicant's condition may have been permanent and stationary at some point in the past, the new injuries destabilized the old injury, which contributed significantly to the new [PD]. Accordingly, they should all be combined together into an overall rating, but credit given to [CSD] for what they have already paid. [¶] They are not, however, entitled to `credit' for that old award under [citation to Fuentes, supra, 16 Cal. 3d 1], as [CSD] requests. [Record Citation.] The Fuentes approach is used where apportionment is justified by the evidence, the Wilkinson one where it is not. Here, the evidence does not warrant apportionment for the reasons stated above." On December 16, 1991, the Board issued its order denying reconsideration, stating: "Based on our review of the record, and for the reasons stated in said report which we adopt and incorporate, we will deny reconsideration." CSD timely seeks review of the Board's decision in this court. Applicant has filed an answer. The sole issue to be determined is whether the Board has jurisdiction to alter the permanent and stationary date of the October 1970 injury in order to apply Wilkinson, rather than Fuentes, in assessing applicant's PD entitlement. 1353 II. DISCUSSION A. Apportionment of PD Under Fuentes Fuentes, supra, 16 Cal. 3d 1, concerned the appropriate method of assessing an employer's liability for PD for an industrial injury where a portion of the injured employee's overall PD was attributable to a nonindustrial disability preexisting April 1, 1972.[5] (1) Applying section 4750,[6] the Supreme Court held that, where apportionment of a preexisting PD is appropriate, the proper method of converting the PD rating to a number of weeks of compensation under section 4658 is to apportion the disability by first subtracting the percentage, not the monetary value, attributable to the preexisting disability from the total PD rating. (Fuentes, supra, 16 Cal.3d at pp. 5-6.) The remaining percentage of PD attributable to the industrial injury, directed the court, is then converted to its monetary equivalent. (Ibid.) Although Fuentes concerned apportionment of a preexisting nonindustrial PD, it may be applied in cases involving apportionment to a preexisting industrial PD. In these apportionment cases, the Fuentes approach results in a lower monetary recovery to injured employees in light of the graduated PD rate scale set forth in section 4658. However, the impact of Fuentes in certain successive industrial injury cases has been notably restricted, commencing with the Supreme Court's decision in the landmark Wilkinson case. B. Wilkinson and Its Progeny (2) (See fn. 7.), (3) Where successive industrial injuries to the same part of the body become permanent and stationary[7] at the same time, the injured employee is entitled to a PD award based upon the combined disability at the 1354 PD rates applicable at the time the last injury of the successive injuries giving rise to such benefits occurred. (Wilkinson, supra, 19 Cal.3d at p. 494; Stoiber v. Workers' Comp. Appeals Bd. (1992) 5 Cal. App. 4th 1403, 1407-1408 [7 Cal. Rptr. 2d 470] (review den. July 16, 1992) (Stoiber); Fremont Indemnity Co. v. Workers' Comp. Appeals Bd. (1989) 208 Cal. App. 3d 914, 917-918 [256 Cal. Rptr. 413]; Rielli v. Workers' Comp. Appeals Bd. (1982) 134 Cal. App. 3d 721, 724 [184 Cal. Rptr. 825]; Volomino, supra, 118 Cal. App.3d at p. 272; Norton v. Workers' Comp. Appeals Bd. (1980) 111 Cal. App. 3d 618, 625 [169 Cal. Rptr. 33]; Harold, supra, 100 Cal. App.3d at pp. 784-786, 788, fn. 9; Fullmer v. Workers' Comp. Appeals Bd. (1979) 96 Cal. App. 3d 164, 166 [157 Cal. Rptr. 735]; Taylor v. Workers' Comp. Appeals Bd. (1979) 95 Cal. App. 3d 139, 146-148 [156 Cal. Rptr. 906]; Nuelle, supra, 92 Cal. App.3d at p. 249; Rumbaugh v. Workers' Comp. Appeals Bd., supra, 87 Cal. App.3d at p. 914; Aten v. Workers' Comp. Appeals Bd. (1977) 75 Cal. App. 3d 113, 118 [142 Cal. Rptr. 42]; Bauer v. County of Los Angeles (1969) 34 Cal.Comp.Cases 594, 598-599 [Board in bank opn.].) "If the worker incurs successive injuries which become permanent at the same time, neither [PD] is `previous' to the other, and section 4750 hence does not require apportionment." (Wilkinson, supra 19 Cal.3d at p. 497, italics in original.)[8] Here, relying on Harold's application of Wilkinson, and credible medical evidence that the 1970, 1987, and 1988 injuries became permanent and stationary at the same time after the 1988 injury, the Board determined that apportionment of applicant's PD under Fuentes is inappropriate. Instead, the Board awarded applicant a single combined PD of 100 percent payable at the PD rates in effect in 1988. (4) Harold, however, is not controlling. To the contrary, the consolidated PD award for all three injuries is flawed because the Board lacks jurisdiction to alter the previously determined permanent and stationary date for the October 1970 injury. 1355 C. Application of Wilkinson Must Adhere to Continuing Jurisdictional Time Limitations Sections 5410, 5803, 5804, and 5805[9] govern the entire spectrum of the Board's continuing jurisdiction. (Sanchez v. Workers' Comp. Appeals Bd. (1990) 217 Cal. App. 3d 346, 353 [266 Cal. Rptr. 21].) Section 5410 provides, as pertinent: "Nothing in this chapter shall bar the right of any injured worker to institute proceedings for the collection of compensation ... within five years after the date of the injury upon the ground that the original injury has caused new and further disability.... The jurisdiction of the appeals board in these cases shall be a continuing jurisdiction within this period." Section 5804 provides, as pertinent: "No award of compensation shall be rescinded, altered, or amended after five years from the date of the injury except upon a petition by a party in interest filed within such five years...." Turning to Harold, careful examination reveals that the court fully adhered to the statutory continuing jurisdictional time limitations when applying Wilkinson principles to the facts before it. In Harold, the injured employee sustained two successive industrial injuries to her right lower extremity in 1971 and 1973. (100 Cal. App.3d at p. 775.) In 1972, she was awarded a PD of 4 percent for the 1971 injury, payable at the weekly PD rate of $52.50 then in effect. In 1973, after Harold sustained her second injury, she not only filed a claim for that injury, but also timely petitioned in 1974 to reopen the PD awarded for the 1971 injury. In 1975, prior to Wilkinson, the WCJ granted the petition to reopen and increased the PD to 32 1/2 percent for the 1971 injury. (Harold, supra, 100 Cal. App.3d at p. 783.) Additionally, Harold was awarded a separate PD of 33 percent for the 1973 injury, payable at the weekly PD rate of $70 due to the amendments to section 4658 effective April 1, 1972. (Harold, supra, 100 Cal. App.3d at p. 783.) Significantly, at the same time in 1975, when the Board had jurisdiction over both the 1971 and 1973 injuries, the WCJ also found that the two injuries became permanent and stationary at the same time. (Ibid.) The Board granted reconsideration and annulled the WCJ's findings. On review for the first time, the appellate court reversed, determining that the Board improperly disregarded the WCJ's findings because there was no evidence of considerable substantiality contrary to the WCJ's finding that both injuries became permanent and stationary at the same time. (100 Cal. App.3d at p. 786.) 1356 Subsequently, the Supreme Court decided Wilkinson. On October 5, 1977, following the issuance of Wilkinson, Harold filed a petition to reopen the 1973 injury claim to take advantage of Wilkinson's effect on her PD computation. (Harold, supra, 100 Cal. App.3d at p. 783.) Harold did not petition to reopen the 1971 injury award because more than five years had elapsed since the date of injury, and the Board no longer had continuing jurisdiction to reopen that case. (Ibid., citing §§ 5410, 5803, 5804.) On review for a second time pertinent to the issues herein, the court initially confirmed that Harold correctly did not petition to reopen the 1971 injury award insomuch as the Board was without jurisdiction to act. (Harold, supra, 100 Cal. App.3d at pp. 775, 786.) The court emphasized, however, that the jurisdictional bar against reopening the 1971 injury case did "not prevent the court from applying Wilkinson, Nuelle, Taylor and Fullmer to the 1973 injury award to the extent possible." (Id. at p. 787; accord, Stoiber, supra, 5 Cal. App.4th at pp. 1409-1410.) Accordingly, the court awarded one consolidated PD of 65 1/2 percent payable for 349 1/2 weeks. Next, reconciling the jurisdictional bar involving the 1971 injury, Harold ordered PD payments for the first 130 weeks (representing the 32 1/2 percent PD previously awarded for the 1971 injury) payable at the 1971 rate of $52.50, resulting in full credit for the prior payment in same amount. (100 Cal. App.3d at pp. 787-788.) The court then ordered the balance of 219.5 weeks payable at $70 per week, allowing for monetary credit for all prior payments at the lower PD rate, but also resulting in a larger monetary recovery for the overall PD awarded. (Id. at p. 788.) Turning to the matter before this court, the Board relies on Harold as justification for its application of Wilkinson. We disagree. In Harold, unlike the instant matter, jurisdictional time limitations were not exceeded when the permanent and stationary date for the earlier 1971 injury was altered in reaching the final PD award. Rather, Harold only applied Wilkinson to the fullest extent allowable by law. The Board's reliance on Harold is misplaced. Its error is traceable to a subtle yet critical factual distinction neglected in its otherwise careful analysis. Volomino, supra, illustrates this distinction. In Volomino, the injured employee suffered three successive industrial injuries to the same part of the body, as required by Wilkinson: (1) a specific injury on October 18, 1963; (2) a cumulative injury from April 1970 to April 9, 1975; and (3) a specific injury on April 9, 1975. In 1969, the Board found that the 1963 injury was permanent and stationary, and awarded a PD of 52 percent payable at $52.50 per week for 208 weeks pursuant to the appropriate statutory rates in effect at the time of injury. (Volomino, supra, 118 1357 Cal. App.3d at pp. 269-270.) A petition to reopen the 1963 injury was not filed within the five-year statutory time limitation period. Accordingly, the Board's continuing jurisdiction over the 1963 injury expired. Nonetheless, the Board subsequently determined pursuant to updated medical evidence that all three of Volomino's injuries, including the 1963 injury, became permanent and stationary at the same time, applied Wilkinson principles, and awarded a 100 percent PD, payable in weekly benefits for life at $119, the rate in effect at the time of the last injury in 1975. (Volomino, supra, 118 Cal. App.3d at p. 270.) On review, the appellate court reversed. Distinguishing Harold, the Volomino court determined that the Board had erroneously applied Wilkinson to include the earliest of three successive industrial injuries in one combined PD rating. The Board, held Volomino, lacked continuing jurisdiction to alter the earlier injury. (118 Cal. App.3d at p. 275.) The court articulated as follows: "In Harold the injured worker within five years of the date of the 1971 injury had filed a petition to reopen the award for such injury. Thus, when the WCAB in Harold found that Harold's 1971 injury and 1973 injury became permanent and stationary at the same time the WCAB was still properly exercising its continuing jurisdiction over the 1971 injury. Here, [Volomino's] 1963 injury award became final in 1969, and has never been reopened. Thus, at the time of the filing of the claims for the 1975 specific injury and the cumulative trauma injury, the award for the 1963 injury had long since become final. It was improper for the WCAB to alter the permanent and stationary date for the 1963 injury to bring it up to when the current injuries became permanent and stationary so as to apply the doctrine in Wilkinson. Nothing in Harold permits the modification of the permanent and stationary date after the WCAB has lost jurisdiction; to the contrary Harold demonstrates that the WCAB has exceeded its jurisdiction and failed to give res judicata effect to the now final 1963 injury award." (Volomino, supra, 118 Cal. App.3d at pp. 274-275, italics added; accord, Stoiber, supra, 5 Cal. App.4th at p. 1410.[10]) Reviewing the instant record, we find the same pivotal fact which required Volomino to distinguish Harold. Applicant did not file, within five years of 1358 the date of injury, a petition to reopen the 7 1/2 percent PD and the 20 percent supplemental PD previously awarded for the October 1970 injury. The Board did not have continuing jurisdiction over the October 1970 injury on September 26, 1991, when the WCJ altered the permanent and stationary date for the 1970 injury, determining that the three successive industrial injuries became permanent and stationary at the same time. This action clearly exceeds the Board's continuing jurisdictional powers. (Volomino, supra, 118 Cal. App.3d at pp. 274-275; Harold, supra, 100 Cal. App.3d at p. 786; Stoiber, supra, 5 Cal. App.4th at p. 1410.) To then award applicant a combined 100 percent PD for all three injuries based upon the rates in effect at the time of the last injury in 1988 disregards the finality of the 1970 injury case. (Volomino, supra, at p. 275; Harold, supra, at p. 787; Stoiber, supra, at p. 1410.) Nothing in Harold permits the Board to exceed statutorily mandated jurisdictional time limitations so that Wilkinson may be applied whenever updated medical evidence credibly indicates that successive industrial injuries become permanent and stationary at the same time. Hence, we hold that the Board did not have jurisdiction to alter the permanent and stationary date for the 1970 injury. (§§ 5410, 5804; Volomino, supra, 118 Cal. App.3d at pp. 273-275; Harold, supra, 100 Cal. App.3d at pp. 786-787; Stoiber, supra, 5 Cal. App.4th at p. 1410.) On the five-year anniversary date of the 1970 injury October 9, 1975 the Board's awards therein were final and, as such, must be given res judicata effect. (Harold, supra, 100 Cal. App.3d at pp. 786-787, citing Dow Chemical Co. v. Workmen's Comp. App. Bd. (1967) 67 Cal. 2d 483, 491 [62 Cal. Rptr. 757, 432 P.2d 365].) III. CONCLUSION Applicant is not entitled to one consolidated PD award of 100 percent for all three injuries payable at $224 per week for life. Because the prior awards for the 1970 injury are final and the Board is without jurisdiction to alter 1359 them in any way, the PD attributable to that injury is preexisting under section 4750. Apportionment of PD, therefore, is appropriate pursuant to Fuentes. Accordingly, the Board order denying reconsideration dated December 16, 1991, is annulled, and the cause remanded for further proceedings consistent with the views expressed herein. King, J., and Haning, J., concurred. NOTES [1] Although applicant sustained four successive injuries, it was determined that the first injury did not result in any PD and that all of the PD resulted from the second injury in OAK 38782. Thus, we will reference only the three successive injuries which resulted in the PD at issue herein. [2] All subsequent statutory references are to the Labor Code. [3] A "Disability Resulting in Limitation to [S]emi-Sedentary [W]ork" falls under category g of the "Guidelines for Work Capacity" (hereafter Guidelines) in the schedule for rating permanent disabilities (hereafter Rating Schedule), and is assigned a standard PD rating of 60 percent before modification for occupation and age. (Rating Schedule, p. 1-A.) It "contemplates the individual can do work approximately one half the time in a sitting position, and approximately one half the time in a standing or walking position, with a minimum of demands for physical effort whether standing, walking or sitting." (Ibid.) [4] A "Disability Resulting in Limitation to Sedentary Work" falls under category h of the Guidelines and "contemplates the individual can do work predominantly in a sitting position at a bench, desk or table with a minimum of demands for physical effort and with some degree of walking and standing being permitted." (Rating Schedule, p. 1-A.) [5] Prior to April 1, 1972, section 4658 provided that an injured employee was entitled to four weeks of compensation for each 1 percent of industrial PD. (Stats. 1949, ch. 1583, § 1, p. 2833.) Effective April 1, 1972, section 4658 was amended to provide a graduated or progressive PD rate scale, whereunder the number of weekly PD benefits increases in proportion to the percentage of PD. (See Rumbaugh v. Workers' Comp. Appeals Bd. (1978) 87 Cal. App. 3d 907, 910 [151 Cal. Rptr. 563].) [6] Section 4750 provides: "An employee who is suffering from a previous [PD] or physical impairment and sustains permanent injury thereafter shall not receive from the employer compensation for the later injury in excess of the compensation allowed for such injury when considered by itself and not in conjunction with or in relation to the previous disability or impairment. [¶] The employer shall not be liable for compensation to such an employee for the combined disability, but only for that portion due to the later injury as though no prior disability or impairment had existed." [7] "A disability is considered permanent after the employee has reached maximum improvement or his condition has been stationary for a reasonable period of time." (Cal. Code Regs., tit. 8, § 9735.) Termination of temporary disability status is not determinative of permanent and stationary status per se because it considers solely the injured employee's ability to work. (Huston v. Workers' Comp. Appeals Bd. (1979) 95 Cal. App. 3d 856, 868 [157 Cal. Rptr. 355]; accord, Harold, supra, 100 Cal. App.3d at p. 785.) Rather, permanent and stationary status refers to medical rehabilitation. (Ibid.) Thus, an injured employee may be fully capable of working when the medical condition is not yet permanent and stationary. (Ibid.) Moreover, the Wilkinson rule applies even where one of the injuries was previously rated for PD, if substantial medical evidence indicates that such injury actually was getting progressively worse until the time that all the injuries became permanent and stationary. (Harold, supra, 100 Cal. App.3d at p. 786; Nuelle v. Workers' Comp. Appeals Bd. (1979) 92 Cal. App. 3d 239, 246 [154 Cal. Rptr. 707] (Nuelle); accord, Liberty Mut. Ins. Co. v. Workers' Comp. Appeals Bd. (1981) 118 Cal. App. 3d 265, 272 [173 Cal. Rptr. 349] (Volomino).) In the matter before this court, the Board's finding that the latter two industrial injuries became permanent and stationary at the same time is not challenged. [8] In contrast to Fuentes, under Wilkinson for example, where one back injury occurred when the PD rate was $52.50 per week and the second back injury occurred when the PD rate was $70 per week, the injured employee is entitled to a consolidated PD award for the total percentage of PD from both injuries at the $70 per week rate, with monetary credit allowed for any prior PD payments. (Volomino, supra, 118 Cal. App.3d at p. 272; accord, Harold, supra, 100 Cal. App.3d at pp. 781-783, 788.) [9] Section 5803 provides, as pertinent: "The appeals board has continuing jurisdiction over all its orders, decisions, and awards.... At any time ... the appeals board may rescind, alter, or amend any order, decision, or award, good cause appearing therefor." Section 5805 provides: "Any order, decision, or award rescinding, altering or amending a prior order, decision, or award shall have the effect herein provided for original orders, decisions, and awards." [10] In Stoiber, supra, the employee sustained, as pertinent, two successive industrial back and psyche injuries on September 13, 1979, and November 8, 1983. (5 Cal. App.4th at p. 1405; all citations in this footnote are to Stoiber.) On February 13, 1987, when the Board had proper jurisdiction over both injuries, the WCJ determined that the injuries became permanent and stationary at the same time. (Ibid.) Wilkinson was applied, and Stoiber was awarded a PD of 97 1/4 percent, payable for 599 1/4 weeks at $130 per week, the rate in effect at the time of the latter 1983 injury. Liability was divided equally between the two injuries. A life pension also was awarded to commence after payment of the PD. (Ibid.) On October 25, 1988, Stoiber filed a petition to reopen for new and further PD. (Id. at p. 1406.) The WCJ determined that the 1979 injury could not be reopened because it was barred by the jurisdictional time limitations in sections 5410 and 5804. Regarding the 1983 injury, the WCJ granted the petition. Although finding Stoiber 100 percent disabled, the WCJ did not award a PD of 100 percent payable at the higher rate of $196 per week for life because of the jurisdictional bar. (5 Cal. App.4th at p. 1406.) Accordingly, after apportionment of the PD for the 1979 injury, 51 1/4 percent PD at the weekly rate of $130 was awarded for the 1983 injury with monetary credit for prior payments. (Ibid.) The Board granted reconsideration and rescinded the WCJ's decision. In view of the prior award for a combined PD under Wilkinson, the Board held that Stoiber was entitled to one-half the monetary value of $196 for a permanent, total disability in the amount of $98 per week for life for the 1983 injury. (Ibid.) On review, the court annulled the Board decision, relying on Harold. Like Harold, stated the court, the Board had jurisdiction over both injuries when it found that they were permanent and stationary at the same time. (Id. at p. 1410.) Therefore, held the court, Wilkinson was to be applied to the extent possible. (Id. at pp. 1409-1410.) Accordingly, Stoiber received a 100 percent PD award payable at $196 per week for life once 299.63 weeks of PD indemnity at $130 per week, previously paid for the 1979 injury, accrued. (Id. at p. 1410.)	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264499/	879 F. Supp. 615 (1995) Dixie Lee HONEY, Plaintiff, v. UNITED PARCEL SERVICE, Defendant. Civ. A. No. 3:94CV440LN. United States District Court, S.D. Mississippi, Jackson Division. March 13, 1995. 616 Barry W. Gilmer, Gilmer Law Firm, for plaintiff. B. Stevens Hazard, Daniel, Coker, Jackson, MS, for defendant. MEMORANDUM OPINION AND ORDER TOM S. LEE, District Judge. This cause is before the court on the motion of defendant United Parcel Service (UPS) for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiff Dixie Lee Honey has responded to the motion and the court, having considered the memoranda of authorities, together with attachments, submitted by the parties, concludes that the motion is well taken and should be granted. This case stems from a January 2, 1994 accident on the premises of UPS in which plaintiff was injured when struck by a UPS vehicle. At the time of the accident, plaintiff was employed by Express Services, Inc. (Express), a temporary employment agency which, pursuant to an agreement with UPS to provide temporary employees for various jobs at UPS, had placed plaintiff in a job position at UPS. Following the accident, plaintiff filed a workers' compensation claim against Express, which under its contract with UPS had agreed to carry workers' compensation 617 insurance for Express employees. She also filed the present tort action against UPS, alleging that UPS's negligence proximately caused the accident and her injuries. UPS now seeks summary judgment, contending that plaintiffs claim is barred by Miss. Code Ann. § 71-3-9, the exclusivity provision of Mississippi's Workers' Compensation Act, which states in pertinent part that "[t]he liability of an employer to pay compensation shall be exclusive and in place of all other liability of such employer to the employee...." The plaintiff, however, maintains that UPS was not her employer for workers' compensation purposes, and that it is, instead, "any other party" within the meaning of Miss.Code Ann. § 71-3-71, which states: The acceptance of compensation benefits from or the making of a claim for compensation against an employer or insurer for the injury or death of an employee shall not affect the right of the employee or his dependents to sue any other party at law for such injury or death.... The question for the court, then, is whether UPS was a statutory employer protected from suits such as this, or whether it was a third party which is subject to suit at law for plaintiffs injuries. UPS advances two separate arguments in support of its position that it was plaintiffs statutory employer. Its first argument is premised on Miss.Code Ann. § 71-3-7, which makes "every employer to whom this chapter applies" liable for and to secure payment "to his employees of the compensation payable under its provisions," and which further mandates that a "contractor" secure the payment of workers' compensation to employees of a subcontractor unless the subcontractor has itself secured such payment. Citing several Mississippi cases holding that in accordance with this section, general or prime contractors are properly considered statutory employers of their subcontractors' employees,[1] UPS reasons that it, in effect, occupies the position of a "contractor" who, by having "secured" the payment of workers' compensation to plaintiff by requiring Express to carry workers' compensation insurance for temporary employees like the plaintiff, must be deemed a statutory employer. Though UPS's position on this point is of dubious merit, the court need not dwell on the issue since it concludes that UPS's next argument is well taken.[2] UPS submits that during her tenure at UPS, plaintiff was a dual employee of UPS and Express, and that consequently, under Mississippi law, both Express and UPS are immune from tort liability for her 618 injury.[3] Mississippi has long embraced the concept of "dual employment," see Biggart v. Texas Eastern Transmission Corp., 235 So. 2d 443 (Miss.1970) ("[a]n employee may be employed by more than one employer while doing the same work"); thus, "`when an employee is engaged in the service of two (2) employers in relation to the same act (dual employment), both employers are exempt from common law liability, although only one of them has actually provided workmen's compensation insurance.'" Ray v. Babcock & Wilcox Co., Inc., 388 So. 2d 166, 167 (Miss.1980) (quoting Robertson v. Stroup, 254 Miss. 118, 180 So. 2d 617 (1965)). Closely related to this concept of dual employment is the doctrine of the "borrowed servant," which recognizes that "[o]ne may be in the general service of another, and, nevertheless, with respect to particular work, may be transferred, with his own consent or acquiescence of a third person, so that he becomes the servant of that person with all legal consequences of the new relation." Standard Oil v. Anderson, 212 U.S. 215, 29 S. Ct. 252, 53 L. Ed. 480 (1909) (quoted in Gaudet v. Exxon Corp., 562 F.2d 351, 356 (5th Cir. 1977), cert. denied, 436 U.S. 913, 98 S. Ct. 2253, 56 L. Ed. 2d 414 (1978)); see also Lott v. Moss Point Marine, Inc., 785 F. Supp. 600, 602 (S.D.Miss.1991). Though the borrowed servant concept was initially established as a means for holding the borrowing employer vicariously liable under respondeat superior for the negligence of the borrowed employee, see Standard Oil, 212 U.S. 215, 29 S. Ct. 252, its application expanded into the field of workers' compensation, where it is now generally accepted. V.S. Dunn, Mississippi Workmen's Compensation, § 186 (3d ed. 1990) ("the `loaned servant' doctrine is generally considered applicable in the compensation field"). Though there have been no Mississippi cases purporting to apply this doctrine in a workers' compensation context, the court has no doubt that the Mississippi court would do so if presented with the opportunity. In determining whether a borrowed servant relationship exists, the Mississippi Supreme Court uses the factors identified by the Fifth Circuit in Ruiz v. Shell Oil Co., 413 F.2d 310, 312-13 (5th Cir.1969). See Texaco, Inc. v. Addison, 613 So. 2d 1193, 1201 (Miss. 1993) (adopting Ruiz factors). These are: (1) Who has control over the employee and the work he is performing, beyond mere suggestion of details or cooperation? (2) Whose work was being performed? (3) Was there an agreement, understanding, or meeting of the minds between the original and the borrowing employer? (4) Did the employee acquiesce in the new work situation? (5) Did the original employer terminate his relationship with the employee? (6) Who furnished tools and place for performance? (7) Was the new employment over a considerable length of time? (8) Who had the right to discharge the employee? (9) Who had the obligation to pay the employee? In Capps v. N.L. Baroid-NL Industries, Inc., 784 F.2d 615 (5th Cir.), cert. denied, 479 U.S. 838, 107 S. Ct. 141, 93 L. Ed. 2d 83 (1986), the Fifth Circuit, in the context of a claim under the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. § 901-950, concluded upon application of these factors that an employee furnished by a company that "specializ[ed] in the supplying of general laborers to companies in need of temporary help" became the borrowed servant of the company to which the employee's services were provided. Id. at 616. The court thus concluded that the exclusivity bar of the LHWCA, the terms of which are identical to the exclusive remedy provision of Mississippi's workers' compensation act, precluded the employee's tort suit against the borrowing employer. The court's observations in Capps are highly instructive, and lead the court to conclude that Honey, like 619 the employee in Capps, was a borrowed servant of UPS.[4] "The first, and most important factor is: Who has control over the employee and the work [s]he is performing, beyond mere suggestion of details or cooperation?" Capps, 784 F.2d at 617; see also Texaco, Inc. v. Addison, 613 So. 2d 1193, 1201 (Miss.1993) (citing Ruiz and Capps) ("the first factor is weighed most heavily in determining whether an employee is a borrowed servant"). Based on the evidence of record, it is plain that UPS controlled plaintiff in the performance of her work. The proof shows that a contractual arrangement existed between UPS and Express pursuant to which Express agreed to supply temporary employees for various jobs at UPS when UPS required the services of such employees. When UPS needed the services of an Express employee, it communicated this need to Express by sending a job assignment order identifying the job hours, duration of the job, job description and a start date. Upon receiving the request, Express would assign an employee to the position. In the case of Honey, Express made the initial selection of her as the employee to fill the subject position at UPS and communicated with her concerning the job. However, the record discloses that other than telling the plaintiff in general terms what her duties would be while at UPS, and advising her of the initial hours of work and to whom she was to report at UPS, no one with Express gave plaintiff any explicit direction; no on-site supervision was provided by Express, nor did Express have any direct input into or control over the plaintiffs day-to-day duties or the performance on the job. Plaintiff did indicate in her deposition testimony that she stayed in contact with her Express supervisor, calling her sometimes as often as once or twice a week. However, she explained that her purpose in doing this was "to let them know how things were going on the job and what they (UPS) thought of [her] work and so forth so [she] could kind of keep them (Express) abreast of how things were going on the job." As in Capps, the second inquiry, which asks whose work is being performed, can be answered directly: "All of the work [Honey] performed furthered [UPS's] business. In fact, [Express'] business existed solely to furnish employees to other companies so that the employees could perform the work of the borrowing employer." Id. There was an agreement or understanding between the original employer, Express, and the borrowing employer, UPS, concerning the plaintiffs services. They had an explicit agreement by which Express provided UPS with temporary employees when UPS's business required them and a request was made. Cf. Capps, 784 F.2d at 617 (though no written agreement, lending and borrowing employers had understanding that lending employer would furnish employees when requested by borrowing employer). The third factor, then, supports a finding that Honey was a borrowed employee. The fourth factor is also met, in that Honey "acquiesced in the new work situation." In the words of the Capps court: Since [Honey] worked for a company that loaned temporary employees, [she] knew [Express] would send [her] into new work situations. Thus, going into new work situations was [Honey's] work situation. When [she] went to work for [Express], [she] acquiesced to the fact that [Express] would constantly send [her] into new work situations. Id. at 617. And, as in Capps, "[t]he fifth factor Did the original employer terminate his relationship with the employee? also weighs in favor of [finding that Honey was a borrowed servant]." In Capps, the court explained that this factor does not require a lending employer to completely sever his relationship with the employee. Such a requirement would effectively eliminate the borrowed employee doctrine as there could never be two employers. The emphasis 620 when considering this factor should focus on the lending employer's relationship with the employee while the borrowing occurs. In the instant case, [Express] exercised no control over [Honey] while [she] worked for [UPS] and placed no restrictions on [UPS] with respect to [Honey's] employment conditions. Thus, while [Honey] worked for [UPS], [Express] had temporarily terminated its relationship with [her]. Id. The sixth question asks who furnished tools and place for performance. Obviously, UPS furnished the place for performance. And while the agreement between UPS and Express recited that Express would supply all "labor, supervision, materials, supplies, equipment, transportation, tools, permits and services for the work to be performed," it is apparent that this was not the way the parties' arrangement worked in fact. Rather, while Express did provide Honey's labor, UPS provided all the equipment, supplies and materials necessary for Honey's performance of her job. The next factor asks whether the employment was over a considerable length of time. In the job order for the position filled by plaintiff, UPS requested someone to fill a clerical slot commencing November 8, 1993 and to last for an "indefinite" duration, which, according to the testimony of Dan Gunderson, Express' representative, meant that the job could last "anywhere from a day to a year."[5] In Capps, the Fifth Circuit explained that this factor is "significant only when the special employer employs the employee for a considerable length of time. In the case where the length of employment is considerable, this factor supports a finding that the employee is a borrowed employee; however, the converse is not true." Id. at 618. In the latter case, "the factor provides a neutral assessment...." Id. Here, then, the factor "provides a neutral assessment." The eighth factor inquires: Who has the right to discharge the employee? It is undisputed that UPS had the right to discharge Honey from her employment at UPS, but it did not have authority to terminate her employment with Express. However, in considering who has the right to discharge the employee, the "proper focus," according to the Capps court, is on whether the borrowing employer had the right to terminate the employee's services with itself, and not on whether it had the right to discharge the employee. And, "[s]ince [UPS] had the right to discharge [Honey] from [her] association with [UPS]," this factor also supports a finding that she was UPS's borrowed servant. The focus of the final factor is on who had the obligation to pay the employee. Here, as was the case in Capps, "[w]hile [Express] had the obligation to pay [Honey], [Express] received the funds to pay [Honey] from [UPS]. Since [UPS] paid [Express] at an hourly rate for [Honey's] work, and then [Express] paid [Honey] at a lower hourly rate, then [UPS] in essence paid [Honey]." Id. Consequently, the last factor does not detract from the conclusion that Honey was a borrowed employee. Id.[6]See also 1B A. Larson, Workmen's Compensation Law § 48.23 (1994) (employer obtaining workers from labor service such as Manpower, Inc. is statutory employer with liability for workers' compensation and immunity from common law liability). A similar conclusion was reached by the court in Lott v. Moss Point Marine, Inc., 785 F. Supp. 600 (S.D.Miss.1991). There, as in Capps, the court determined that the LHWCA's exclusivity provision barred a tort action by an injured worker against his borrowing employer. In accordance with an arrangement similar to that involved in the case at bar, the lending employer, CESI, provided Lott's, the employee's, services pursuant to a contract to provide industrial labor personnel to the borrowing employer, MPM, 621 at its shipyard. Although Lott was an employee of CESI, he was furnished to work under MPM's direct supervision and CESI did not provide anyone to supervise Lott while at MPM's place of business. Applying the Ruiz factors, the court concluded that even though Lott remained under some control of CESI, he was MPM's borrowed servant and thus precluded from maintaining a common law tort action against MPM. Id. at 603. The court indicated, alternatively, that "even if Mississippi law were the controlling precedent," Lott's claim still would be barred under Mississippi's "dual employment" doctrine since Lott was "subject to the control of both MPM and CESI." Id. at 604. Likewise, in the case at bar, whether the court applies Mississippi's traditional dual employment doctrine or the borrowed servant doctrine, which this court believes would be adopted and applied by the Mississippi Supreme Court to cases involving workers' compensation, the conclusion is the same. UPS was Honey's statutory employer and is therefore immune from tort liability for her on-the-job injury. Therefore, it is ordered that UPS's motion for summary judgment is granted. A separate judgment will be entered in accordance with Rule 58 of the Federal Rules of Civil Procedure. ORDERED. NOTES [1] See, e.g., Doubleday v. Boyd Constr. Co., 418 So. 2d 823 (Miss.1982) (prime contractor which required its subcontractor to carry workers' compensation insurance for its employees held to be statutory employer of subcontractor's employees; thus, general contractor could not be sued as third party in common law negligence action by subcontractor's employee); Mosley v. Jones, 80 So. 2d 819 (1955) (general contractor which secured workers' compensation coverage for employees of subcontractor which failed to provide such coverage not a "third party" subject to common law suit but rather a statutory employer protected by exclusivity bar of compensation act). But see footnote 2 and cases cited therein. [2] The court's view as to the lack of merit in UPS's position derives from such cases as Falls v. Mississippi Power & Light Co., 477 So. 2d 254 (Miss.1985). In Falls, the Mississippi Supreme Court rejected Mississippi Power & Light's argument that it was a statutory employer entitled to protection from tort liability for the job-related death of an independent contractor's employee since it had contractually required that independent contractor to carry worker's compensation coverage for the decedent. The court explained that under § 71-3-7, the statute upon which UPS's argument is based, a company is only liable to secure workers' compensation covering a worker if the company qualifies as a prime contractor. Id. at 256. The statute does not apply simply because an owner or principal requires an independent contractor to secure workers' compensation insurance; rather, the statute is limited to owners or principals who actually qualify as a general or prime contractors, and they do not qualify just because they may contract a portion of their work to others. Id. at 257. And while no statute or case has defined the terms "contractor" and "subcontractor" as used in this statute, it is apparent that in this case, UPS would not qualify as a "prime" or "general" contractor. See Nash v. Damson Oil Corp., 480 So. 2d 1095 (Miss.1985) (one who is a "contractor" in the "generic sense" but who "lies outside the general understanding of such terms as `prime contractor' or `general contractor,'" is "not the sort of `contractor' within the meaning and contemplation of Section 71-3-7."). [3] The court notes that while plaintiff submitted a brief in opposition to UPS's motion, her response was directed solely to UPS's argument based on Miss.Code Ann. § 71-3-7. She did not address, or even so much as acknowledge UPS's additional argument. [4] Whether an employee is a borrowed servant is a question of law for the court to decide. Capps v. N.L. Baroid Indus., Inc., 784 F.2d 615, 617 (5th Cir.1986) (district court decides issue as a matter of law and "if sufficient basic factual ingredients are undisputed, the court may grant summary judgment"); Lott v. Moss Point Marine, Inc., 785 F. Supp. 600, 602 (S.D.Miss.1991). [5] The plaintiff was also asked about her understanding of how long the job was to last. On this topic, she explained that when she was first told of the position by Express, she was advised that "it may last until the first of the year," but "once [she] got there ... the [UPS] supervisor advised [her] it would be indefinite...." [6] It is also of note that under the arrangement between UPS and Express, while Express was contractually required to maintain worker's compensation insurance for its employees, the cost for that coverage was ultimately passed on to UPS.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264500/	744 A.2d 523 (1999) Jerry KRIM, Plaintiff, v. PRONET, INC., Jackie R. Kimzey, David J. Vucina, Max D. Hopper, Harvey B. Cash, and Edward E. Jungerman, Defendants. C.A. No. 15873. Court of Chancery of Delaware, New Castle County. Submitted: June 16, 1999. Decided: September 14, 1999. 525 Irving Morris of Morris and Morris, Wilmington, Delaware; of counsel: Law Firm of Harvey Greenfield, New York, New York, for Plaintiffs. James L. Holzman and Ronald A. Brown, Jr. of Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, Delaware; of counsel: Charles W. Schwartz of Vinson & Elkins, Houston, Texas, for Defendants. OPINION STEELE, V.C. In his Amended Complaint ("Complaint"), shareholder Jerry Krim ("Plaintiff") alleges that the directors of ProNet, Inc. ("ProNet") breached their fiduciary duty by failing to secure a higher exchange ratio for ProNet shares in a merger with MetroCall Inc. ("MetroCall"), and by placing their personal interests above the interests of ProNet stockholders during the negotiations with MetroCall. Later, in his Answering Brief to Defendant's Motion to Dismiss, plaintiff also alleges that the defendant directors breached their duty of disclosure, a subset of the duty of loyalty, by failing to discuss in proxy materials whether or not ProNet had engaged in merger discussions with any companies besides MetroCall, and by failing to include the details of any such discussions if they occurred. Defendants seek dismissal of all claims and a stay of discovery pending my decision on their Motion to Dismiss. Specifically, defendants argue that plaintiff's contention that the terms of the merger were unfair fails to state a claim, and that plaintiff's conflict of interest allegations are groundless as the interests of the director defendants did not conflict with the interests of the ProNet stockholders. Defendants add that plaintiff failed to plead the disclosure claim in his Complaint, and imply that I should therefore not entertain it. Alternatively, defendants argue that even if I choose to examine plaintiff's disclosure claim, I should deem it "totally meritless" as plaintiff offers no current factual support for the claim, and merely intends to engage in a "fishing expedition" by conducting discovery to find support for a baseless contention. I have considered the parties' positions and examined the Complaint, and the Joint Statement/Prospectus, dated November 7, 1997 ("the Proxy Statement"). I am convinced that: (a) the defendant directors did not breach their fiduciary duties in effecting and recommending the merger with MetroCall; (b) Delaware law does not mandate an auction or shopping of ProNet; (c) neither the vesting of defendant directors' stock options upon consummation of a merger nor the fact that several ProNet directors would retain seats on the board of the merged entity created a conflict between the interests of the defendant directors and the interests of the ProNet stockholders; and (d) plaintiff's speculative disclosure claim concerning the existence, or lack thereof, of merger discussions with third parties does not save plaintiff's complaint where plaintiff pleads no facts regarding other suitors; and, the failure to support the claim with relevant facts relegates plaintiff's disclosure claim to a mere attempt to seek additional discovery in hopes of uncovering facts that would prove helpful in crafting a new cause of action. Therefore, the complaint fails to state a claim and should be and therefore is dismissed. I. LEGAL STANDARD In evaluating Defendants' Motion to Dismiss, I assume the truthfulness of all well-pleaded, nonconclusory allegations found in the Complaint and extend the benefit of all reasonable inferences that can be drawn from the pleading to the 526 non-movant, plaintiff.[1] To dismiss a claim, I must find that plaintiff has either utterly failed to plead facts supporting an element of the claim[2] or that under no reasonable interpretation of the facts alleged in the Complaint (including reasonable inferences) could plaintiff state a claim for which relief might be granted.[3] Notwithstanding Delaware's permissive pleading standard, I am free to disregard mere conclusory allegations made without specific allegations of fact to support them.[4] With this standard in mind, I examine plaintiff's allegations that defendant directors breached their duty of care by failing to secure a higher exchange ratio and to conduct an auction, breached their duty of loyalty by placing personal interests ahead of stockholders' interests, and breached their duty of disclosure by omitting material facts from the Proxy Statement. II. BACKGROUND A. Facts On August 12, 1997, ProNet and MetroCall announced a stock-for-stock merger. Plaintiff filed this lawsuit the following day. Defendants moved to dismiss the plaintiff's original complaint arguing plaintiff failed to state a claim. On November 7, 1997, ProNet mailed the Proxy Statement to its stockholders in connection with a special meeting to be held on December 17, 1997 to vote on the merger. Plaintiff filed an amended class action complaint, moved for expedited discovery, and sought to have the case set down for a hearing on a preliminary injunction to enjoin the stockholders meeting. I denied both of plaintiff's requests.[5] At the December 17, 1997 meeting, Pro-Net stockholders voted overwhelmingly in favor of the merger with MetroCall. The merger was consummated on December 30, 1997. B. Contentions of the Parties Plaintiff alleges in this shareholder class action that defendant directors breached their duties of care and loyalty by approving, and recommending that ProNet shareholders approve, the merger of ProNet into MetroCall with each ProNet shareholder receiving 0.90 shares of MetroCall for each share of ProNet. The purported breach of the duty of care focuses on the exchange ratio. Plaintiff contends a better ratio could have been achieved. The purported breach of the duty of loyalty centers on options held by defendant directors that vested upon merger of ProNet, which plaintiff alleges created a "substantial conflict," and that the merger would allow defendant directors "to preserve their positions of prestige and continue to enrich themselves as directors of the merged entity." Plaintiff also alleges that proxy statements delivered to ProNet shareholders omitted material information concerning ProNet's merger negotiations, if any, with third party suitors prior to recommendation of the merger with Metrocall. 527 III. PLAINTIFF'S CLAIMS Generally, plaintiff's claims will be considered with the following well established principles in mind. Delaware courts make a rebuttal presumption that directors are informed and act in good faith.[6] Delaware law also requires that once a change of control of a company is inevitable the board must assume the role of an auctioneer in order to maximize shareholder value.[7] This duty, however, does not apply to stock-for-stock strategic mergers of publicly traded companies, a majority of the stock of which is dispersed in the market.[8] Directors also have a duty of loyalty, and accordingly, can not place their interests above the interests of the stockholders.[9] Finally, to state a claim for breach by omission of the duty of disclosure, plaintiff must plead facts identifying (1) material (2) reasonably available (3) information that (4) was omitted from proxy materials.[10] Failure to plead facts showing any one of the above elements would make plaintiff's complaint susceptible to a motion to dismiss.[11] A. Breach of duty of care claim The business judgment rule generally protects the actions of directors, affording them the presumption directors act on an informed basis and in the honest belief they acted in the best interest of the corporation.[12] To overcome the presumption of the business judgment rule, the burden is on the plaintiff to show the defendant directors failed to act (1) in good faith, (2) in the honest belief that the action taken was in the best interest of the company or (3) on an informed basis.[13] In the present case, I find plaintiff has failed to demonstrate any reason why the presumption of the business judgment rule should not be afforded the defendant directors. The only allegation made by plaintiff which I can interpret as an attempt to overcome the presumption of the business judgment rule is the ProNet directors' alleged conflict of interest, which I will discuss below. Plaintiff argues the defendant directors had a duty to implement "a bidding mechanism to foster a fair auction of ProNet to the highest bidder or the exploration of strategic alternatives which will return greater or equivalent value to the plaintiff and the class." I find the latter part of this claim legally baseless as the defendant directors may avail themselves of the benefit of the business judgment rule, as discussed above, regarding their decision to recommend the terms of the merger with MetroCall. The former part of the claim is clearly an attempt by plaintiff to hold the defendant directors to the auctioneer duties articulated in Revlon Inc. v. MacAndrews & Forbes Holdings, Inc. ("Revlon duties"). In Revlon, the Delaware Supreme Court declared that a board must assume the role of auctioneer 528 once a takeover becomes inevitable.[14] The Court, however, later clarified this duty by holding Revlon duties are not triggered when ownership remains with the public shareholders and no change of control results.[15] Since the public shareholders retained control after the MetroCall Pro-Net merger, I find Revlon duties do not apply and that the defendant directors did not breach their duty of care by failing to hold an auction or otherwise engaging in "shopping" of ProNet. B. Breach of duty of loyalty claim Defendant directors disclosed in the Proxy Statement that their options would vest and some ProNet directors would retain board seats in the merged entity. Plaintiff makes no allegation of any undisclosed conflict. I note neither the vesting of the options nor the fact some ProNet directors retained board seats in the merged entity created a "substantial conflict" as plaintiff claims.[16] Accordingly, I find ProNet's stockholders had the benefit of complete disclosure of any potential conflicts when they voted overwhelmingly to approve the merger with MetroCall. Therefore, defendant directors neither breached their duty of loyalty nor any duty of disclosure in this regard. C. Breach of duty of disclosure claim Plaintiff did not raise his claim of breach of the duty of disclosure by omission in his original or amended complaint; he waited until his Answering Brief to the Defendant's Motion to Dismiss to do so. Notwithstanding plaintiff's belated assertion of the disclosure claim, and subtle urging from the defendants to do otherwise, I will very briefly examine the substance of plaintiff's disclosure claim. Corporate fiduciaries, including corporate directors, majority stockholders, and presumably minority controlling stockholders, have a duty to disclose all material facts when seeking stockholder action.[17] Material facts are those facts for which "there is a substantial likelihood that a reasonable person would consider them important in deciding how to vote."[18] Corporate fiduciaries can breach their duty of disclosure in several ways by making a materially false statement, by omitting a material fact, or by making a materially misleading partial disclosure.[19] Krim alleges that the defendant directors' failure to confirm or deny that discussions took place with suitors besides MetroCall and failure to provide details if such discussions did occur constituted an omission of material facts. Plaintiff offers only conclusory allegations about other "discussions or negotiations," and fails to plead any specific facts regarding potential suitors besides MetroCall.[20] Moreover, even if such "discussions or negotiations" did exist, they 529 need not be disclosed.[21] I can only conclude that what the plaintiff is really trying to do by asserting the disclosure claim is to prolong discovery in the hope of framing a new cause of action. In the absence of any factual assertion to support the claim either in the Complaint or in the brief, I find that the plaintiff fails to state a claim that the defendant directors breached the duty of disclosure. IV. CONCLUSION For the reasons stated above, I find that plaintiff's complaint fails to state claims upon which relief might be granted and grant defendants' motion to dismiss. Defendants' motion to stay discovery need not be addressed. IT IS SO ORDERED. NOTES [1] Loudon v. Archer-Daniels-Midland Co., Del. Supr., 700 A.2d 135, 140 (1997). [2] Cincinnati Bell Cellular Sys. Co. v. Ameritech Mobile Phone Serv. of Cincinnati, Inc., Del.Ch., C.A. No. 13389, mem. op., 1996 WL 506906, at 2, Chandler, V.C. (Sept. 3, 1996), 1996 Del.Ch. Lexis 116, at 6 ("when the nonmoving party has the ultimate burden of proof on its claims, this Court may grant summary judgment if the moving party can demonstrate a complete failure of proof on an essential element of a claim.") [1996 WL 506906, at 2, 1996 Del.Ch. Lexis 116, at 4] [3] Delaware State Troopers Lodge v. O'Rourke, Del.Ch., 403 A.2d 1109, 1110 (1979) ("A complaint should not be dismissed upon such a motion unless it appears to a certainty that under no set of facts which could be proved to support the claim would the plaintiff be entitled to relief.") [4] Wolf v. Assaf, Del.Ch., C.A. No. 15339, mem. op., 1998 WL 326662, at 1, Steele, V.C. (June 16, 1998), 1998 Del.Ch. Lexis 101, at 3-4. [5] Krim v. ProNet, Inc., Del.Ch., C.A. No. 15873, Steele, V.C. (Dec. 5, 1997) (Bench Ruling), Tr. At 45-47. [6] Aronson v. Lewis, Del.Supr., 473 A.2d 805, 812 (1984). [7] Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., Del.Supr., 506 A.2d 173, 182 (1985). [8] Arnold v. Society for Savings Bancorp, Inc., Del.Supr., 650 A.2d 1270, 1289-90 (1994); Paramount Communications, Inc. v. Time, Inc., Del.Supr., 571 A.2d 1140, 1150 (1989); see also Paramount Communications, Inc. v. QVC Network, Inc., Del.Supr., 637 A.2d 34, 47 (1994). [9] Guth v. Loft, Inc., Del.Supr., 23 Del. Ch. 255, 5 A.2d 503 (1939). [10] Wolf, supra, Del.Ch., C.A. No. 15339, mem. op., 1998 WL 326662, at 1, Steele, V.C. (June 16, 1998), 1998 Del.Ch. Lexis 101, at 4-5. [11] Cincinnati Bell, supra, Del.Ch., C.A. No. 13389, mem. op., 1996 WL 506906, at 17, Chandler, V.C. (Sept. 3, 1996), 1996 Del.Ch. LEXIS 116, at *27-28. [12] Aronson, 473 A.2d at 812. [13] Id. [14] Id. at 182. [15] Paramount Communications, Inc. v. Time, Inc., Del.Supr., 571 A.2d at 1150 (1989). [16] The vesting of options does not create a conflict as a high exchange ratio for ProNet shares benefits the option-holding directors as much as, if not more than, the regular stockholders. Further, the fact that several directors would retain board membership in the merged entity does not, standing alone, create a conflict of interest. See Grobow v. Perot, Del.Ch., 526 A.2d 914, 921-24 (1987) (discussing plaintiff's allegations of directors' interest in "self-perpetuation in office"). [17] Malone v. Brincat, Del.Supr., 722 A.2d 5, 11 & n. 21 (1998). [18] Rosenblatt v. Getty Oil Co., Del.Supr., 493 A.2d 929, 944 (1985). [19] In re Walt Disney Co. Derivative Litig., Del. Ch., 731 A.2d 342, 376 (1998). [20] Plaintiff also failed to plead causation and identify actual quantifiable damages as is required if plaintiff seeks more than nominal damages. O'Reilly v. Transworld Healthcare Inc., Del.Ch., C.A. No. 16507, mem. op. at 23, 1999 WL 693166, Steele, V.C. (August 20, 1999). [21] Bershad v. Curtiss-Wright Corp., Del.Supr., 535 A.2d 840, 847 (1987) ("[e]fforts by public corporations to arrange mergers are immaterial under the Rosenblatt v. Getty standard, as a matter of law, until the firms have agreed on the price and structure of the transaction.").	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264507/	879 F. Supp. 379 (1995) PHILIP MORRIS INCORPORATED, Plaintiff, v. STAR TOBACCO CORPORATION, Defendant. No. 95 Civ. 321 (CSH). United States District Court, S.D. New York. March 21, 1995. 380 381 Anthony L. Fletcher, Kristen H. Sorenson, Hunton & Williams, New York City, for plaintiff. Henry F. Schuelke, Lawrence H. Wechsler, S. Robert Sutton, Janis, Schuelke & Wechsler, Washington, DC, William M. Brodsky, Baden, Kramer, Huffman & Brodsky, New York City, for defendant. MEMORANDUM OPINION AND ORDER HAIGHT, District Judge: In this Lanham Act case to which common and state law claims are appended, one manufacturer of cigarettes sues another for alleged infringement of trade dress and seeks a preliminary injunction. Background Plaintiff Philip Morris Incorporated ("Philip Morris") manufactures and sells cigarettes under the brand name MARLBORO.[1] In December 1955, Philip Morris changed the MARLBORO brand from unfiltered to filtered cigarettes. It devised a new advertising format featuring pictures of a cowboy, which during the next decade was one of several elements featured in the marketing of MARLBOROs. Since 1964, the brand has been marketed almost exclusively by advertising featuring cowboys and evoking the American West, with an emphasis upon the great outdoors. A typical early ad of this genre, attached as Exhibit A to the complaint, depicts a cowboy astride his horse in open country, lighting up a cigarette. The ad copy says: "Come to where the flavor is ... Come to MARLBORO COUNTRY." A later ad, playing off a blessed season of the year, shows a cowboy riding a horse through falling snow, leading another horse encumbered with a Christmas tree; the copy reads: "Merry Christmas from Marlboro Country." Packs of MARLBORO cigarettes sometime, but not always, display a picture of a cowboy. The print advertisements for the brand invariably do.[2] Philip Morris's objective, one gathers, is to cause MARLBORO cigarettes to be equated in the public mind with vitality, virility, clean air, and good health. The MARLBORO COUNTRY campaign has achieved a smashing success, seemingly triumphing over the Surgeon General's health-related warnings tobacco companies are mandated to display on their products and in their advertising. In 1994, between 6 and 7 billion packs of MARLBORO cigarettes were sold in the United States. In 1974 MARLBORO became the world's best-selling cigarette brand. In 1974 it became the best-selling brand in the United States, a position it still maintains, currently with 28% of the domestic market. MARLBORO is aggressively marketed. During the past two decades MARLBORO domestic media advertising costs have exceeded $1.8 billion. Defendant Star Tobacco Corp. ("Star") also manufactures and sells cigarettes. Star was incorporated in 1990. Until 1994 its principal business consisted of contract manufacturing of cigarettes and little cigars for private label marketers and exporters. In 1993 Star began to consider entering the cigarette marketplace under its own brand name. The result was a cigarette called GUNSMOKE, which Star began to test market in California in July 1994 and wishes to continue marketing on an expanded basis. Jonnie R. Williams, Star's president, says in an affidavit that throughout the development of the GUNSMOKE concept he was 382 "well aware of Philip Morris' Marlboro brand and its use of a Western theme employing a `Marlboro man' to market its product." Id. at ¶ 4. Williams says that in selecting a theme and brand name for Star's new cigarette, he "was attracted to a Western motif and believed there was room in the marketplace for a product that developed its own specific Western image or niche." Id. Williams characterizes the advertising and promotional efforts to market GUNSMOKE as an attempt "specifically to portray ourselves ... as a competitor of Marlboro," thus implementing Star's intention "to make it perfectly clear that we were in competition with Marlboro and not associated with them." Id. at ¶ 17. What Star actually did was to market GUNSMOKE cigarettes in packs featuring a drawing of a heavily armed cowboy, holding a rifle in his right hand and with his left hand resting upon a holstered pistol. The phrase "western blend" appears on the front of the pack.[3] Advertisements for GUNSMOKE cigarettes display, next to the cowboy figure, the phrase "New Man in Town."[4] One ad in a trade magazine, which Star says has not been repeated, said: "Welcome to Gunsmoke Country." Star contends that these marketing phrases were intended to tell the consumer that the GUNSMOKE man was a "new" man, hence not the MARLBORO man; and that the "GUNSMOKE Country" to which the consumer is welcomed is a place other than "MARLBORO Country." The Williams affidavit also says that Star made available to "certain of our distributors" vans displaying the GUNSMOKE man and GUNSMOKE woman graphics and including the phrase: "Gunsmoke vs. Marlboro Taste the Difference." Id. at 17. A photograph of such a vehicle appears as Exhibit F to the Williams affidavit. Philip Morris does not regard Star's marketing strategies as a good-faith effort to educate cigarette consumers that GUNSMOKE is not associated in any way with MARLBORO. On the contrary: Philip Morris regards Star as engaging in bad-faith trade dress infringement and related acts of unfair competition. On November 4, 1994 counsel for Philip Morris wrote to Star to demand "that you cease selling GUNSMOKE cigarettes and cease using MARLBORO's western motif for the trade dress or advertising of any cigarette." Star refused to comply. Philip Morris commenced this action. The complaint pleads seven claims for relief. The first four are based upon § 43(a) of the Lanham Act, 15 U.S.C. § 1125 (Supp. 1994). Claims One and Two are for injunctive relief and money damages arising out of trade dress infringement in violation of § 43(a)(1)(A). Claims Three and Four are for injunctive relief and money damages arising out of false advertising in violation of § 43(a)(1)(B). Claims Five and Six allege common law palming off. Claim Seven alleges a violation of the New York Anti-Dilution statute, New York Business Law § 368-d. Philip Morris moves for a preliminary injunction, which Star opposes. Discussion While Philip Morris also asserts a Lanham Act false advertising claim,[5] it bases this motion for a preliminary injunction upon the Lanham Act trade dress infringement and New York Anti-Dilution Act claims. A movant for a preliminary injunction must show both (1) irreparable harm in the absence of the requested relief and (2) either (a) a likelihood of success on the merits or (b) a sufficiently serious question going to the merits combined with a balance of hardships tipping decidedly in favor of the movant. See, e.g., Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979). 383 The Lanham Act Claim for Trade Dress Infringement (a) The Merits The Lanham Act, which governs plaintiff's federal claims, was intended to make "actionable the deceptive and misleading use of marks" and "to protect persons engaged in ... commerce against unfair competition." § 45, 15 U.S.C. § 1127. § 43(a) of the statute provides in pertinent part: Any person who, on or in connection with any goods ... uses in commerce any word, term, name, symbol, or device, or any combination thereof, ... which (1) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person. "Trade dress" is a form of mark protectible under § 43(a)(1). "The `trade dress' of a product is essentially its total image and overall appearance." Blue-Bell Bio-Medical v. Cin-Bad, Inc., 864 F.2d 1253, 1256 (5th Cir.1989), cited and quoted by the Supreme Court in Two Pesos, Inc. v. Taco Cabana, Inc., ___ U.S. ___, 112 S. Ct. 2753, 120 L. Ed. 2d 615 (1992) (hereinafter "Two Pesos"). See also LeSportsac, Inc. v. K Mart Corp., 754 F.2d 71, 75 (2d Cir.1985) (trade dress comprises "the total image of a product."). A product's image may be created by "words, symbols, collections of colors and designs, or advertising materials or techniques that the purchasing public has come to associate with a single source." Harlequin Enterprises Ltd. v. Gulf & Western Corp., 503 F. Supp. 647, 649 (S.D.N.Y.1980), aff'd 644 F.2d 946 (2d Cir.1981). Trade marks are often classified in categories of increasing distinctiveness. They may be (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful. See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir.1976) (Friendly, J.) (cited in Two Pesos ___ U.S. at ___, 112 S.Ct. at 2757). Trade dress is subject to those categories of classification. Two Pesos at ___, 112 S.Ct. at 2757 (involving trade dress of a chain of fast-food restaurants serving Mexican food). "The latter three categories of marks, because their intrinsic nature serves to identify a particular source of a product, are deemed inherently distinctive and are entitled to protection" under § 43(a) of the Lanham Act. Id. To merit protection, trade dress, like any mark, must be nonfunctional. "Only nonfunctional, distinctive trade dress is protected under § 43(a)." Two Pesos at ___, 112 S.Ct. at 2760. Merely descriptive marks do not qualify for protection under the Act unless they have acquired secondary meaning of a sort to make them distinctive of a particular source in commerce. Two Pesos at ___, 112 S.Ct. at 2757. But inherently distinctive trade dress is protectible under § 43(a) without proof that the trade dress has secondary meaning. That is the holding of Two Pesos. Id. at ___, 112 S.Ct. at 2761.[6] In the case at bar, since 1973 Philip Morris by its packaging and advertising of MARLBORO cigarettes has created an image of the American West made up of geographical ("Marlboro Country") and individualized (the cowboy as the "Marlboro Man") components. This trade dress is inherently distinctive. Philip Morris says without contradiction that no cigarette manufacturer had evoked the image of the American West for the purpose of selling a particular brand until the Marlboro Man saddled up and rode into Marlboro Country. The juxtaposition of product and setting is entirely arbitrary, perhaps even fanciful. Accordingly the MARLBORO trade dress is protectible under § 43(a) of the Lanham Act, without (under the Two Pesos holding) any showing of secondary meaning. All this counsel for Star professes to concede.[7] Star bases its defense upon the second 384 issue common to Lanham Act trademark infringement claims. It is not enough for a Lanham Act plaintiff to establish that his mark or trade dress is entitled to the protection of the Act. "It is, of course, also undisputed that liability under § 43(a) requires proof of the likelihood of confusion." Two Pesos ___ U.S. at ___, 112 S.Ct. at 2758. Star contends that the differences between GUNSMOKE's trade dress and that of MARLBORO are so great that only the Western motif is common to both. That leads, Star's argument continues, to the conclusions that consumers will not confuse the two brands; and that Philip Morris' evocation of the West the sole point of similarity is so diffuse as to be unprotectible. In evaluating the likelihood of consumer confusion, courts frequently apply those nonexclusive factors articulated by Judge Friendly in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961), cert. denied, 368 U.S. 820, 82 S. Ct. 36, 7 L. Ed. 2d 25 (1961). Adapting the Polaroid factors to trade dress analysis, they are: (1) strength of the prior user's trade dress; (2) degree of similarity between the two trade dresses; (3) proximity of the products; (4) likelihood that the prior user will bridge the gap; (5) actual confusion; (6) defendant's good faith; (7) quality of defendant's product; and (8) sophistication of the consumers. I will consider these factors. However, to define the context for that consideration, I will first deal with the several kinds of confusion the Lanham Act seeks to prevent; and the scope of the trade dress protection Philip Morris claims. When similar products compete directly with each other in the retail marketplace, several potential forms of consumer confusion arise. First, consumers may mistake the product of the junior trademark or trade dress user for that of the senior user. Second, consumers may mistakenly believe that there is an association between the two products: in the case at bar, that GUNSMOKE is a price-discounted version of MARLBORO. Third, and most pertinent to this case, there is that kind of confusion "that is likely to work to plaintiff's detriment that is, defendant's ability to gain a foothold in plaintiff's market by exploiting subliminal or conscious association with plaintiff's well-known name." Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 486 F. Supp. 414, 428 (S.D.N.Y.1980) (Sofaer, J.) (name of defendant's "adult" magazine PLAYMEN infringed name of plaintiff's popular and well-known magazine PLAYBOY). In a trade dress case, that kind of confusion takes the form of a defendant's effort to gain a foothold in plaintiff's market by exploiting subliminal or conscious association with plaintiff's well-known trade dress. A commercial competitor determined to gain that unfair foothold is assisted by human nature. Trade dress, like a trademark, "is a merchandising short-cut which induces a purchaser to select what he wants, or what he has been led to believe he wants." To that end, the trademark [and trade dress] owner makes "every effort to impregnate the atmosphere of the market with the drawing power of a congenial symbol." If he succeeds, the trademark or trade dress owner "has something of value"; and if "another poaches upon the commercial magnetism of the symbol he has created, the owner can obtain legal redress." Mishawaka Rubber & Woolen Manufacturing Co. v. S.S. Kresge Co., 316 U.S. 203, 205, 62 S. Ct. 1022, 1023, 86 L. Ed. 1381 (1942). That is so, even in the absence of proof of actual consumer confusion. Id. at 204, 62 S. Ct. at 1023. Such poaching is possible because the "commercial magnetism" of a "congenial symbol" creates a favorable impression in the minds of consumers. That is the whole purpose of the exercise. It is the purpose that explains the existence of the advertising industry, marketing consultants, product pollsters, and related types. The consumer may not be fully aware of the effect of these efforts upon him, but he need not be. In the 385 words of District Judge Gurfein (as he then was): "The consumer does not memorize the mark. He has a feeling about it from past exposure. That feeling may be vague, subliminal it is said, but it comes to consciousness when the article is seen with the trademark affixed." Londontown Manufacturing Co. v. Cable Raincoat Company, 371 F. Supp. 1114, 1118 (S.D.N.Y.1974) (name of defendant's raincoat, SMOG, infringed name of plaintiff's well-known coat, LONDON FOG). In Dreyfus Fund, Inc. v. Royal Bank of Canada, 525 F. Supp. 1108 (S.D.N.Y.1981), that form of consumer confusion led to a holding that defendant's use of a lion logo to advertise its financial services infringed plaintiff's familiar lion symbol. "Since the Bank's `Edge' campaign was designed to create a similar subliminal association with a lion, it is likely to be confused with the Dreyfus lion and to dilute the existing associations of such lions with Dreyfus." Id. at 1123. Dreyfus cites Londontown Manufacturing Co. and Grotrian, Helfferich, Schulz, Nachf v. Steinway & Sons, 365 F. Supp. 707, 717 (S.D.N.Y.1973), for the proposition that consumer confusion need not "be overt or obvious to warrant preliminary relief." 525 F. Supp. at 1123. The Second Circuit affirmed Grotrian. 523 F.2d 1331 (2d Cir. 1975). The court of appeals upheld the district court's injunction in favor of the American manufacturer of the well-known Steinway piano against a German exporter into the United States of pianos bearing the trademark "Grotrian-Steinway." The Second Circuit quoted with approval this analysis in Judge MacMahon's opinion for the district court: "It is the subliminal confusion apparent in the record as to the relationship, past and present, between the corporate entities and the products that can transcend the competence of even the most sophisticated consumer. Misled into an initial interest, a potential Steinway buyer may satisfy himself that the less expensive Grotrian-Steinweg is at least as good, if not better than a Steinway. Deception and confusion thus work to appropriate defendant's good will. This confusion, or mistaken beliefs as to the companies' interrelationships, can destroy the value of the trademark which is intended to point to only one company." 523 F.2d at 1341. Relying on these and comparable cases, the main thrust of Philip Morris's trade dress infringement claim is that Star, seeking entry into the retail cigarette market, achieves an unfair advantage by means of a trade dress playing off consumers' consciousness, albeit perhaps subliminal, of the MARLBORO trade dress. Secondly, Star argues that Philip Morris's trade dress infringement claim impermissibly stakes out the entire American West as its preserve. The argument is more rhetoric than substance. Philip Morris's MARLBORO trade dress does not focus widely upon the entire American West qua West. If it did, there might be some force to Star's defense that the dress is too diffuse to support injunctive relief. Compare Dreyfus, 525 F.Supp. at 1114 ("Plaintiffs are not entitled to protection from all lion marks."); Londontown, 371 F.Supp. at 1118 ("A manufacturer cannot preempt all weather as his exclusive mark, but by using an element in a fanciful sense he can appropriate an approximate synonym in popular use."). In the case at bar, Philip Morris paints with that more narrow and legally protectible brush. The trade dress Philip Morris seeks to protect consists of specific manifestations of a Western motif: the picture of a cowboy on a cigarette pack; figures of cowboys who have come over time to be known as the "Marlboro Man"; and those evocative stretches of the Western landscape, not to be found on any map or ordnance survey, called "Marlboro Country." The issue in this case is whether Star's trade dress for GUNSMOKE cigarettes infringes upon those particular manifestations of the Western motif chosen by Philip Morris for MARLBORO's trade dress. I now turn to the Polaroid factors. 1. Strength of Philip Morris's Trade Dress The strength of the MARLBORO trade dress appears sufficiently from the previous 386 discussion. Cigarettes are not inherently associated with cowboys or the West. Accordingly the trade dress is arbitrary or fanciful, and at the upper end of the strength scale. Furthermore, the duration and extent of the MARLBORO campaign and its commercial success are sufficient to establish a powerful secondary meaning, were that required. This factor weighs in Philip Morris's favor. 2. Degree of Similarity Between the Two Trade Dresses GUNSMOKE's trade dress is similar to that of MARLBORO in respect of the three key aspects discussed supra. One of the MARLBORO line of cigarettes displays a picture of a cowboy on the pack; so do the GUNSMOKE packs. GUNSMOKE ads feature the phrase "New Man in Town," a phrase evocative of the Marlboro Man. One GUNSMOKE ad welcomed the consumer to "Gunsmoke Country," equally evocative of "Marlboro Country." While that particular ad, appearing in a trade publication, has apparently not been repeated, counsel for Star declined at oral argument to foreswear using the "Gunsmoke Country" phrase in the future. In addition, GUNSMOKE cigarettes are sold in packs the predominant color of which is red, as are MARLBOROs. The typeface used for the word "GUNSMOKE" on the packs is similar to that used for the word "MARLBORO" on those packs. Counsel for Star stress differences in the aspects of the cowboys. The MARLBORO cowboys, appearing in photographs, are clean-shaven, wholesome-appearing, and unarmed. The GUNSMOKE cowboy, appearing in an artist's sketch, is slit-eyed, messily unshaven, brandishes a rifle, and projects an air of menace. Star also says that it did not copy all the details of the MARLBORO pack and that other brands use packs or boxes that are predominantly red in color. These points may be conceded, but they do not materially detract from the overall similarity of the trade dresses. In that regard, I reject Star's contention that the advertising phrases "New Man in Town" and "Gunsmoke Country" proclaim to consumers with sufficient clarity that GUNSMOKE is an entirely different and competing product. A competitor may use another product's trade name for the purpose of comparative advertising, so long as the advertising claims are not false. See Castrol, Inc. v. Quaker State Corp., 977 F.2d 57 (2d Cir.1992). Star's proclamation on vans making deliveries to distributors of GUNSMOKE's superiority over MARLBORO is a legitimate form of comparative advertising. But the packaging and print advertisements, directed at retail consumers, cannot be so characterized. They can readily be regarded as efforts to trade upon the consumers' subliminal awareness of MARLBORO. The similarities between the trade dresses of MARLBORO and GUNSMOKE weigh in Philip Morris's favor. 3. Proximity of the Products The products are identical.[8] That is also a factor weighing in Philip Morris's favor on the likelihood of consumer confusion. 4. Bridging the Gap This Polaroid factor seeks to protect the senior user's interest in being able to enter a related field at some future time. Lois Sportswear, Inc. v. Levi Strauss & Co., 799 F.2d 867, 874 (2d Cir.1986). It is not a relevant consideration in the case at bar. 5. Actual Confusion On this motion Philip Morris offers no evidence of actual confusion, either anecdotal or by consumers' surveys. The only evidence directly addressing the issue comes from Star, which produced two letters from consumers apparently reflecting an awareness that the products were different. Nonetheless, in the circumstances of this case I decline to draw an inference against Philip Morris based on the lack of proof of actual confusion. Where, as in the instant case, the junior user's product has been on the market a relatively short time, 387 lack of proof of actual confusion does not warrant an inference against the senior user on the issue of probable confusion. Hasbro, Inc. v. Lanard Toys, 858 F.2d 70, 78 (2d Cir.1988); Jordache Enterprises, Inc. v. Levi Strauss & Co., 841 F. Supp. 506, 518 (S.D.N.Y.1993). In addition, there is sufficient evidence in the record from which to infer that Star intentionally copied Philip Morris's MARLBORO trade dress. That circumstance justifies a presumption of confusion, even in the absence of actual proof. Perfect Fit Industries, Inc. v. Acme Quilting, Inc., 618 F.2d 950, 954 (2d Cir.1980). A "reasonable likelihood" of consumer confusion entitles the senior user to equitable relief, although there is no proof that particular purchasers were actually deceived. Mishawaka Rubber & Woolen Manufacturing Co v. S.S. Kresge Co., 316 U.S. at 204, 62 S. Ct. at 1023. 6. Star's Good Faith The junior user's good faith in selecting a trade name, mark or dress is a significant factor because the granting or withholding of injunctive relief turns upon principles of equity. "Evidence of intentional copying by a junior user may be indicative of an intent to create a confusing similarity between the products." Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1044 (2d Cir.1992). In his affidavit Williams, Star's president, describes his desire to take advantage of the current commercial popularity of all things Western. Williams concedes his familiarity with MARLBORO cigarettes and that brand's western motif, but says he intends GUNSMOKE cigarettes to compete with MARLBORO not to imitate them. He describes the manner in which he came up with the name "GUNSMOKE" for a cigarette; a word inspired by a personal hunting incident, and also reminiscent in William's mind of the popular television program of some years ago (starring James Arness as Marshal Matt Dillon). Williams describes the steps leading up to the artistic creation of the cowboy drawing used as part of GUNSMOKE trade dress. These protestations of good faith are all very well as far as they go. But they do not go very far. They fall well short of explaining why Star chose to associate a cigarette with a cowboy, and to embark upon an advertising campaign whose slogans closely resemble Philip Morris's. The present record contains evidence from which a factfinder could without difficulty draw the inference that Star acted with "an intent to create a confusing similarity between the products." Thus this Polaroid factor also weighs in Philip Morris's favor. 7. Quality of Defendant's Product There is no evidence in the record concerning the precise blends, mixes or characteristics of the tobaccos used in these two brands of cigarettes. Philip Morris has not attempted to show that the GUNSMOKE brand is a distinctly inferior product. Presumably Star would not concede that to be the case. Assuming arguendo that the quality of GUNSMOKE cigarettes is as good as that of MARLBOROs, there is authority for the proposition that the good quality of the alleged infringer's product actually may increase the likelihood of confusion as to source. Lois Sportswear U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 875 (2d Cir. 1986). I think that proposition applies to the case at bar, and accordingly conclude that this factor favors Philip Morris. 8. Sophistication of Buyers It is generally held that unsophisticated consumers in the relevant market "aggravate the likelihood of confusion." Hasbro v. Lanard Toys, Ltd., 858 F.2d 70, 78 (2d Cir.1988). Nevertheless, it is also recognized that the sophistication of consumers, while usually militating against a finding of a likelihood of confusion, "might on occasion increase the likelihood of confusion, depending upon the circumstances of the market and the products." Centaur Communications, Ltd. v. A/S/M Communications, Inc., 830 F.2d 1217, 1228 (2d Cir.1987). In the case at bar, the relevant consumers are purchasers of cigarettes at retail. That is to say, we are not dealing with distributors 388 of cigarettes, who presumably know from whom they purchase their inventories. One does not immediately think of cigarette buyers as particularly sophisticated as a group. But the remarkable commercial success of Philip Morris's MARLBORO brand indicates that a very large number of regular consumers view the MARLBORO trade dress the cowboy transformed into the "Marlboro Man" inhabiting "Marlboro Country" with sufficient approval to influence their purchasing decisions. And if one characterizes that sort of consumer decision making as "sophisticated", then it is a form of sophistication that actually increases the likelihood that these consumers would be confused by GUNSMOKE's similar trade dress. Compare Lois Sportswear U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d at 875 ("[W]e believe that it is a sophicated jeans consumer who is most likely to assume that the presence of appellee's trademark stitching pattering on appellant's jeans indicates some sort of association between the two manufacturers. Presumably it is these sophicated jeans buyers who pay the most attention to backpocket stitching patterns and their `meanings.'"). I find that in the circumstances of the case, this factors favors Philip Morris. * * * * * I conclude that Philip Morris has demonstrated the likelihood of succeeding on its Lanham Act claim that the trade dress designed by Star for GUNSMOKE cigarettes infringes upon the trade dress of MARLBORO cigarette. I base that conclusion upon the likelihood that the similarities in trade dress will give Star an unfair advantage in the market place through consumers' confusion, perhaps subliminal, between the two brands; and consumer's association, again perhaps subliminal, of Star's brand with that of Philip Morris. I further conclude that consideration of the Polaroid factors increases the likelihood of confusion, and hence the likelihood that Philip Morris will succeed on its Lanham Act claim. (b) Irreparable Harm Philip Morris has demonstrated the likelihood of success on the merits of its Lanham Act Claim. Accordingly I need not reach the second prong of the standard governing the issuance of a preliminary injunction. However, I must consider whether Philip Morris has demonstrated irreparable harm, since that is a requisite element for obtaining a preliminary injunction under either prong of the standard. It is well settled that "[i]n the preliminary injunction context, a showing of likelihood of confusion as to source or sponsorship establishes the requisite likelihood of success on the merits as well as risk of irreparable harm." Standard & Poor's Corp. v. Commodity Exchange, Inc., 683 F.2d 704, 708 (2d Cir.1982). Such circumstances give rise to a logical presumption that the senior user will be harmed in the market place. Because the value of the harm resulting from consumer confusion is difficult to quantify, "irreparable injury will almost always be found when there is a high probability of confusion." Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 486 F.Supp. at 429. See also LeSportsac, Inc. v. K Mart Corp., 754 F.2d 71, 79 (2d Cir.1985) ("Likelihood of confusion is itself strong evidence that in the absence of an injunction [plaintiff] might face irreparable harm."). An infringement plaintiff's significant delay in applying for injunctive relief "tends to neutralize any presumption that infringement alone will cause irreparable harm pending trial, and such delay alone may justify denial of a preliminary injunction." Citibank, N.A. v. Citytrust, 756 F.2d 273, 276 (2d Cir.1985). Applying these principles to the case at bar I conclude that Philip Morris has made the requisite showing of irreparable harm. I further conclude that Philip Morris sought a preliminary injunction with reasonable dispatch after becoming aware of the scope and nature of Star's marketing strategies. Accordingly there is no basis for rebutting the presumption that Philip Morris will suffer irreparable harm as a result of Star's infringing trade dress. *389 The State Law Anti-Dilution Claim Philip Morris also asserts a claim under New York General Business Law § 368-d. The statute entitles a party to injunctive relief where there is a "[l]ikelihood of dilution of the distinctive quality of a mark or a trade name ... notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services." To sustain a claim under the statute, the senior user must show that: (1) its trademark, trade name or trade dress is either distinctive or has acquired secondary meaning; (2) the similarity between its mark and the junior user's mark results in a "whittling down" of the identity or reputation of the senior user's mark or dress; and (3) the junior user acted with "predatory intent." McDonald's Corp. v. McBagel's, Inc., 649 F. Supp. 1268, 1280 (S.D.N.Y.1986) (citing cases); Sally Gee, Inc. v. Myra Hogan, Inc., 699 F.2d 621, 625-26 (2d Cir.1983). My findings and conclusions with respect to Philip Morris's Lanham Act claim also serve to demonstrate its entitlement to a preliminary injunction under the New York statute. An injunction will issue on the basis of that statute as well. Security Rule 65(c), Fed.R.Civ.P., provides that no preliminary injunction shall issue except upon the giving of security by the movant, "in such sum as the court deems proper for the payment of such costs and damages as may be incurred or suffered by any party who is found to be wrongfully enjoined or restrained." It is clear that the issuance of a preliminary injunction, bringing to a halt the present forms and expressions of Star's efforts to market GUNSMOKE cigarettes, will have an adverse economic impact upon Star. The parties were entirely unable to agree on the appropriate amount of security. The record does not contain hard economic evidence on the issue. Having considered the supplemental written submissions of the parties, I will require Philip Morris to post a bond in the amount of $5 million. Conclusion For the foregoing reasons, plaintiffs motion for a preliminary injunction is granted. Counsel for plaintiff are directed to settle an order of preliminary injunction consistent with this opinion on seven (7) days' notice. In addition to the amount of security referred to above, the injunction must also provide for a stay of its effect for ten (10) days. Application by the defendant for any further stay must be made to the court of appeals. The foregoing is SO ORDERED. NOTES [1] The factual account in text is derived from the pleadings, together with the affidavits and exhibits submitted on plaintiff's motion for a preliminary injunction. Neither party saw the need for discovery for an evidentiary hearing. No issue occurs to the Court which in my view would require an expanded factual record. [2] Owing to health concerns, the Federal government does not permit tobacco companies to advertise their products on television. [3] Philip Morris says without contradiction that the tobacco industry knows no such thing as a "western blend." [4] Star also sells cigarettes in packs displaying a female figure in Western garb, holding a lariat (or some might say, a bullwhip). [5] The complaint alleges at ¶¶ 31-32 that Star's advertising falsely claims that GUNSMOKE cigarettes "feature no fillers or reconstituted tobacco," whereas in fact they contain not less than 10% and as much as 19% reconstituted tobacco. [6] The Supreme Court's holding in Two Pesos specifically disapproved a line of cases in the Second Circuit, which had denied protection for even inherently distinctive trade dress in the absence of proof of secondary meaning. See discussion at ___ U.S. at ___-___, 112 S.Ct. at 2759-2760. [7] Counsel for Star stated at oral argument: Philip Morris maintains that it's Marlbobo [sic] trade dress is arbitrary and inherently distinctive. We don't dispute that. As a matter of fact, while in the wake of the Supreme Court decision in Two Pesos it is no longer necessary for this analysis, I'm perfectly happy to concede that Philip Morris's Marlbobo [sic] dress has achieved secondary meaning. Tr. 24. [8] I mean by that only that MARLBORO and GUNSMOKE are both cigarettes. The tobacco blends employed may be different, but that is not material.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264509/	744 A.2d 804 (2000) William F. LAWSON, Petitioner, v. PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE, Respondent. Commonwealth Court of Pennsylvania. Argued December 7, 1999. Decided January 19, 2000. 805 Christopher M. Roe, Philadelphia, for petitioner. Sallie A. Rodgers, Harrisburg, for respondent. Thomas G. Servodidio, Philadelphia, for intervenor, Homemaker Service of the Metropolitan Area, Inc. Before SMITH, J., FLAHERTY, J., and NARICK, Senior Judge. NARICK, Senior Judge. The issue presented is whether William F. Lawson (Petitioner) was denied due process because he did not receive a de novo hearing on his appeal from a decision by Homemaker Services of the Metropolitan Area, Inc. (Homemaker) to terminate his attendant care services. We hold that the Commonwealth of Pennsylvania, Department of Public Welfare, Bureau of Hearings and Appeals (Bureau) applied the wrong standard of review and did not conduct a de novo hearing on Petitioner's appeal and thus denied Petitioner due process. Therefore, we reverse the order of the Bureau and remand this case with the instruction that the Bureau reexamine the record under the correct standard. The facts of this case are as follows. Petitioner is a 48-year old man who lives alone and is a C-5 quadriplegic. Petitioner was receiving attendant care services from Homemaker who is a contractor selected by the Department of Public Welfare (DPW) to provide attendant care services to eligible persons. Petitioner had been a consumer with Homemaker for many years receiving both basic and ancillary services. 806 On September 17, 1996, Petitioner and Homemaker signed forms wherein each party acknowledged its rights and responsibilities and what primary responsibilities each would assume in regards to the attendant care services listed. On February 28, 1997, "A Home Care Bill of Rights and Responsibilities for Consumers" listing, among other things, the consumer's responsibility to treat all employees of Homemaker with respect and dignity and not to verbally, physically or sexually harass any employee of Homemaker, was singed by Petitioner. On March 25, 1998, an attendant, who serviced Petitioner on only this date, filed an incident report indicating that Petitioner verbally abused her character, offended her with sexual slurs, and used profanity. On March 30, 1998, said attendant signed a statement she dictated to the Homemaker Executive Director (Director) detailing her accusations. Director then conducted an investigation, which included interviewing other attendants who had serviced Petitioner. The investigation discovered five (5) attendants who cited their reasons for refusing to continue to service Petitioner as verbal insults, perceived physical threats, abusive and/or demeaning language, and/or improper and/or offensive behavior. As a result of the interviews, three additional incident reports were prepared by two attendants relating how they felt threatened, demeaned, wrongfully accused and/or abused by Petitioner. Petitioner did not participate in any part of this investigation. On April 8, 1998, Director delivered a letter to Petitioner proposing to discontinue the services provided by Homemaker effective April 13, 1998 because in Homemaker's professional judgment Petitioner's behavior jeopardized the safety of the attendants. On April 10, 1998, Petitioner filed a timely appeal of Homemaker's decision. A Hearing Officer for the Bureau presided over the appeal. The hearing was held over four days, two in January and two in March of 1999. In an Order and Adjudication dated June 3, 1999, the Hearing Officer denied Petitioner's appeal of Homemaker's decision to terminate his attendant care services. That order was affirmed by a Final Administrative Action Order dated June 7, 1999. On June 21, 1999, Petitioner filed both a petition for review and an application for stay pending appeal with this Court. On June 23, 1999, an order was issued granting Petitioner's application for stay pending appeal. Under consideration now is Petitioner's petition for review. On appeal,[1] Petitioner argues that he was denied due process because the Hearing Officer failed to conduct a de novo examination of the legal and factual issues. We agree. The guarantee of due process, in Pennsylvania jurisprudence, emanates from a number of provisions of the Declaration of Rights, particularly Article I, Sections 1, 9, and 11 of the Pennsylvania Constitution. Our Supreme Court has recognized as well established the principle that "due process if fully applicable to adjudicative hearings involving substantial property rights...." Soja v. Pennsylvania State Police, 500 Pa. 188, 193, 455 A.2d 613, 615 (1982). At stake in the case at bar are state-provided, statutory-based attendant care services which are a property interests deserving of due process. Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970) (termination of welfare benefits without pre-termination hearing is a violation of due process). While not capable of exact definition, the basic elements of procedural due process are adequate notice, opportunity to be heard, and the chance to defend oneself before a fair and impartial tribunal having 807 jurisdiction of the case. Commonwealth v. Thompson, 444 Pa. 312, 281 A.2d 856 (1971). Before a state agency may make an adjudicatory determination depriving an individual of a state protected interest, the agency must provide a hearing before an impartial adjudicator to conduct a de novo examination of all the factual and legal issues. Concrete Pipe and Products of California, Inc. v. Construction Laborers Pension Trust for Southern California, 508 U.S. 602, 113 S. Ct. 2264, 124 L. Ed. 2d 539 (1993). We hold that the Hearing Officer in the case at bar gave improper deference to the investigation and conclusions of Homemaker. First, in the adjudication the Hearing Officer defines the term "substantial evidence" which is an "appellate standard of review and not a standard of evidence applied by a fact finder to determinations of whether a burden of proof has been satisfied." Samuel J. Lansberry, Inc. v. Pennsylvania Public Utility Commission, 134 Pa.Cmwlth. 218, 578 A.2d 600, 602 (1990). The Hearing Officer then applied the substantial evidence test stating, "This Hearing Officer concludes that substantial evidence has not been presented to overturn the Homemaker Executive Director's decision in re the validity of the statements of the two attendants with felony convictions, nor to discredit their testimonies." The adjudication also states: In light of the above discussion, this Hearing Officer concludes that substantial evidence does not exist to support the [Petitioner's] contention that Homemaker's proposal to discontinue his attendant care services is based on the intensity of his needs.... However, substantial evidence exists to support Homemaker's contention that the [Petitioner] violated said agency's service agreement and consumer responsibilities agreed upon by himself and Homemaker. The substantial evidence standard of review requires that the reviewer not weigh the evidence or substitute her judgment for that of the initial factfinder. Samuel J. Lansberry, Inc. In this case, the initial factfinder was Homemaker who decided to investigate the allegations against Petitioner and terminate his attendant care services. Second, the Hearing Officer reviewed the investigation and conclusions of Homemaker for an "abuse of discretion" or an "arbitrary and capricious action." With regard to Homemaker's investigation, the Hearing Officer stated the following in the adjudication: Homemaker's Executive Director's modus operandi in conducting his investigation stemming from the allegations brought forth by a staff person on March 25, 1998, and subsequent proposal to discontinue Agency attendant care services to the [Petitioner] leads this Hearing Officer to conclude that he reasonably exercised his professional judgment, not acting out of haste or on only a single incident, or without discretion in weighting factors that comprise the employee-reported incidents, or with prejudice or motive to oust the Appellant from the Attendant Care Program. There is no evidence of an abuse of discretion or of an arbitrary and capricious action. (Emphasis added.) The Hearing Officer does not make any finding of fact as to whether the allegations against Petitioner are true but rather concludes that Director reasonably exercised his professional judgement to reach his conclusions. Since the Hearing Officer applied an appellate court standard of review, giving deference to the findings of fact and credibility determinations of Homemaker, the investigation by Homemaker served both a prosecutorial and adjudicatory function, which is a violation of due process. Lyness v. Commonwealth of Pennsylvania, State Board of Medicine, 529 Pa. 535, 605 A.2d 1204 (1992). 808 Although this case must be remanded back to the Bureau with the instruction to conduct a de novo hearing, we do not see the need for the Bureau to require any further testimony. Contrary to Petitioner's argument, he was given adequate opportunity to cross-examine witnesses and present evidence. Thus, on remand the Bureau need only to review the extensive record that was developed at the first hearings and then make its own credibility determinations and findings of fact giving no deference to the conclusions reached by Homemaker. ORDER AND NOW, this 19 th day of January, 2000, the order of the Pennsylvania Department of Public Welfare in the above-captioned matter is vacated and the case is remanded to the Bureau with the instruction to conduct a de novo hearing. On remand the Bureau need only to review the extensive record that was developed at the first hearings and then make its own credibility determinations and findings of fact giving no deference to the conclusions reached by Homemaker. Jurisdiction relinquished. NOTES [1] Our review is limited to a determination of whether the agency adjudication is in violation of constitutional rights, or is not in accordance with the law or that any finding of fact made by the Bureau and necessary to the adjudication is not supported by substantial evidence. Hallgren v. Department of Public Welfare, 712 A.2d 776 (Pa.Cmwlth. 1998).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2632600/	103 P.3d 209 (2004) CITY OF SEATTLE, Appellant, v. Kyla TERMAIN, Respondent. No. 52967-6-I. Court of Appeals of Washington, Division 1. December 20, 2004. 210 James Kevin Kenny, City of Seattle/Public & Comm. Safety Div., Seattle, for Appellant. Christine Anne Jackson, Seattle, for Respondent. GROSSE, J. A charging document alleging a violation of a domestic violence order must identify the order the defendant is alleged to have violated, or at least include sufficient facts to apprise the defendant of his or her actions giving rise to the charge(s). Here, the challenged complaint merely tracks the language of the ordinance, other than setting forth dates of the charging period. The complaint does not identify the specific order alleged to have been violated or the court granting the order. Further, it fails to contain any other factual basis for the charges. The decision of the trial court dismissing the charges is affirmed. 211 FACTS On May 5, 2002, the King County Superior Court issued a protection order prohibiting Kyla Termain from having contact with M.L. The order was served on Termain in court. On June 11, 2002, and again on June 16, 2002, there was alleged lewd name calling or gesturing from Termain to M.L. while both were on Seattle streets. On July 18, 2002, the City charged Termain with two counts of violating a domestic violence order. The charging document alleged two counts using identical language with the exception of handwritten arrows and dates of "6/11" printed above Count I and "6/16" above Count II. The language of the charging document is as follows: Between June 11, 2002 and June 16, 2002, in the City of Seattle, King County, Washington, the above-named defendant did commit the following offense(s): Count 1 [or Count 2] Commit the crime of VIOLATION OF A DOMESTIC VIOLENCE ORDER by knowingly violating a restraint provision, a provision excluding him or her from a residence, workplace, school or daycare or a provision prohibiting him or her from knowingly coming within or knowingly remaining within a specified distance of a location of an order granted under Seattle Municipal Code Chapter 12A.06 by Seattle Municipal Court or of an order granted under Revised Code of Washington Chapter 10.99, Chapter 26.09, Chapter 26.10, Chapter 26.26, Chapter 26.50, Chapter 74.34 or an equivalent ordinance by a court of competent jurisdiction or knowingly violating a provision of a foreign protection order specifically indicating that a violation will be a crime issued by a court having jurisdiction over him or her and the person protected by the order and the matter under the law of the state, territory, possession, tribe or United States military tribunal, Contrary to Seattle Municipal Code Section(s): 12A.06.180-A The matter was tried to a jury, which found Termain guilty on both counts. Termain appealed to the superior court, alleging for the first time that the language of the charging document was insufficient. The superior court agreed and held: Appellant [Termain] challenges the sufficiency of the complaint filed in this matter. Since the issue is first raised on appeal, the court must first determine if an essential element is missing. If it is, then the court must determine whether the missing element may be fairly implied from the language of the charging document. Appellant was charged and convicted of two counts of violating a domestic violence protection order. An essential element of this crime is the order alleged to have been violated. State v. Clowes, 104 Wash.App. 935, 18 P.3d 596 (2001). Although the complaint herein recites a litany of statutes under which the alleged protection order could have been issued, the charging document contains no reference whatsoever to the actual order the defendant is accused of violating. Thus, appellant is left to guess at the crime he is alleged to have committed. Moreover, since the complaint does not recite the statute pursuant to which the order was issued, the date of issuance or the name of the protected person, accordingly, the missing element may not be fairly implied from the language on the face of the complaint. Accordingly, the judgment from below is reversed and remanded for a new trial. State v. Kjorsvik, 117 Wash.2d 93, 812 P.2d 86 (1991). Given the disposition of this matter, appellant's remaining assignment of error need not be addressed. The City sought discretionary review, which was granted. ANALYSIS The issue presented here is whether the charging document in a violation of a domestic violence order must identify the order the defendant is alleged to have violated, or at least include sufficient facts to apprise the defendant of his or her actions giving rise to the charge(s).[1] 212 A charging document must describe the essential elements of a crime with reasonable certainty such that the accused may prepare a defense and plead the judgment as a bar to any subsequent prosecution for the same offense.[2] The essential elements rule requires that the information "allege facts supporting every element of the offense, in addition to adequately identifying the crime charged."[3] Again, the purpose of this rule is to "apprise the defendant of the charges against him or her and properly allow the accused to present a defense."[4] Here, however, Termain did not challenge the information before or during trial, but waited until the appeal. Where the challenge is made for the first time on appeal, the court construes the charging document(s) more liberally in favor of validity than does a trial court when the charging documents are initially challenged before the rendering of a verdict.[5] The Supreme Court adopted a two-pronged inquiry in such cases. First, do the necessary facts appear in any form, or by fair construction can they be found in the charging document? If so, can the defendant show that he or she was nonetheless actually prejudiced by the inartful language which caused a lack of notice? If the charging document fails the essential elements test, the prejudice test is not reached.[6] Termain does not attempt to show prejudice, arguing only that the information is facially insufficient. If the charging document is found to be constitutionally defective the remedy is dismissal without prejudice to the prosecution for the refiling of charges.[7] In the instant case, the information charged that Termain knowingly violated a restraint provision of an order granted under the Seattle Municipal Code (SMC) or a number of other chapters of the RCWs, or violating a provision of a foreign protection order, all contrary to SMC 12A.06.180-A. The complaint tracks the language of the ordinance, but other than setting forth the dates of the charging period, the complaint fails to specifically identify the order claimed to be violated or the court granting the order. Further, the charging document does not contain any factual basis for the charges or identify the victim, even by using initials. Some courts have held that the statute does not require the inclusion of either of these as an element of the offense. However, mere recitation of the statutory language is not always sufficient.[8] The core holding in Leach requires that a defendant be apprised of the elements of the charged crime and the conduct of the defendant which is alleged to have constituted the crime.[9] These critical facts must be found within the four corners of the charging document.[10] The City's reliance on State v. Snapp[11] is misplaced. Snapp does not hold that the specific restraint provision is never necessary to charge a felony violation of a no-contact order. Instead, the Snapp court held that the charging language in that case was sufficient. There, the State specifically accused Snapp of violating an identified no-contact order when he assaulted his wife by hitting or kicking her. Those facts certainly were sufficient to apprise Snapp of the underlying crime charged. 213 In domestic violence cases, the culpable act necessary to establish the violation of a no-contact order is determined by the scope of the predicate order.[12] The no-contact order is essential to prosecute the violation of the order. A conviction cannot be obtained without producing the order as it will identify the protected person or location and any allowance for contact or the expiration date.[13] The superior court and Termain relied on the holding of State v. Clowes.[14] There, the defendant challenged a charging document for the first time on appeal. Clowes addressed the facts necessary to charge the crime of interfering with the reporting of a domestic violence offense. Clowes was charged with two counts. Count I charged a felony violation of a no-contact order, contrary to RCW 10.99.050, "by assaulting [the victim]."[15] Count II charged the interfering with the reporting of a crime of domestic violence (contained in Count I) and preventing or attempting to prevent it from being reported. In Clowes, the State did not dispute the argument that Count II, standing alone, was insufficient, but argued that Count II should be construed in conjunction with Count I, an argument the court rejected.[16] The Clowes court held that a court will not fill voids in a defective count with facts located elsewhere.[17] Although the Clowes case concerned two different counts, its reasoning nevertheless applies. Here, as in Clowes, the information lacks essential elements. As stated in Clowes, where there is no reference to the identity of the victim or to the underlying domestic violence order or facts of the crime, the information lacks an essential element.[18] The City argues that Clowes is distinguishable because the relevant statute, interfering with the reporting of a domestic violence crime, necessitates that the victim and crime must be listed in the charging document but that the identity of the victim does not have to be disclosed in the information. But the definition of interfering with the reporting of domestic violence is no more specific than that for violation of a no-contact order. The City also argues that Clowes cannot be read to hold that a charging document, in general, is defective because it does not name the victim. It is true that the cases cited by the City hold that the victim's name is not an essential element of a crime.[19] Those cases hold that the victim's identity is not an essential element of the crimes of assault, second degree murder, or accepting the earnings of a common prostitute. But those crimes involve an act involving another person, but not a specific person as does the violation of a nocontact order. The City is correct that criminal statutes which protect a particular class of persons do not require that the particular victim be named. But, in contrast, the violation of a no-contact order is only committed by contact with a particular person or location. And while we agree that the name of the victim may not be necessary in the information, identification of the specific no-contact order, the issuance date from a specific court, the name of the protected person, or sufficient other facts must be included in some manner. The charging document here is awkwardly worded and vague. Frankly, it is gobbledygook. It charges the language of the statute *214 but it does not recite the specific statute pursuant to which the underlying order was issued, the number of the order, the date of issuance, or any underlying facts or the name of the protected person. There are many simple ways the City could have included bare facts in the charging document so that Termain could fairly imply what actual conduct was being charged. To fail to do so makes Termain guess at the crime alleged to have committed. The City should change its ways of charging these crimes. The decision of the trial court is affirmed. WE CONCUR: COLEMAN and AGID, JJ. NOTES [1] It appears from the record that there are judges of the superior court who have differing views on how this question should be answered. Thus, we have determined to publish this decision. [2] State v. Leach, 113 Wash.2d 679, 689, 782 P.2d 552 (1989). Both statutory and implied elements must be included. State v. Kjorsvik, 117 Wash.2d 93, 102, 812 P.2d 86 (1991). [3] Kjorsvik, 117 Wash.2d at 98, 812 P.2d 86 (emphasis omitted) (quoting Leach, 113 Wash.2d at 689, 782 P.2d 552). [4] State v. Goodman, 150 Wash.2d 774, 784, 83 P.3d 410 (2004) (citing State v. Vangerpen, 125 Wash.2d 782, 787, 888 P.2d 1177 (1995)). [5] Kjorsvik, 117 Wash.2d at 102, 812 P.2d 86. [6] City of Auburn v. Brooke, 119 Wash.2d 623, 636, 836 P.2d 212 (1992). [7] State v. Simon, 120 Wash.2d 196, 199, 840 P.2d 172 (1992). [8] Kjorsvik, 117 Wash.2d at 98-99, n. 4, 812 P.2d 86; Leach, 113 Wash.2d at 688-89, 782 P.2d 552. (The statutory language is sufficient only when the statute defines the offense with certainty.) [9] Kjorsvik, 117 Wash.2d at 98, 812 P.2d 86. [10] Kjorsvik, 117 Wash.2d at 106, 812 P.2d 86. [11] 119 Wash.App. 614, 82 P.3d 252 (2004). [12] City of Seattle v. Edwards, 87 Wash.App. 305, 308, 941 P.2d 697 (1997). [13] Edwards, 87 Wash.App. at 308, 941 P.2d 697. [14] 104 Wash.App. 935, 18 P.3d 596 (2001). [15] Clowes, 104 Wash.App. at 942 n. 3, 18 P.3d 596. [16] Clowes, 104 Wash.App. at 942, 18 P.3d 596. [17] Clowes, 104 Wash.App. at 942, 18 P.3d 596 (citing State v. Gill, 103 Wash.App. 435, 442, 13 P.3d 646 (2000)). [18] At oral argument counsel for Termain indicated that a recitation of the specific order by its number as well as an indication of the court that imposed the order would be sufficient to apprise a defendant of the charge. We agree. [19] See State v. Plano, 67 Wash.App. 674, 678-80, 838 P.2d 1145 (1992); State v. Johnston, 100 Wash.App. 126, 134, 996 P.2d 629 (2000); State v. Larson, 178 Wash. 227, 228-29, 34 P.2d 455 (1934).	01-03-2023	11-01-2013
https://www.courtlistener.com/api/rest/v3/opinions/1725849/	675 So. 2d 1023 (1996) W.G.T., Father of C.B.T., a minor child, Appellant, v. B.C., Appellee. No. 95-4541. District Court of Appeal of Florida, First District. June 25, 1996. Arlene C. Huszar, Florida Institutional Legal Services, Inc., Gainesville, for Appellant. D. Randall Briley of Harris, Guidi, Rosner & Mordecai, P.A., Jacksonville, for Appellee. *1024 PER CURIAM. W.G.T., who is presently incarcerated on Death Row at Florida State Prison, appeals an order denying his petition seeking visitation with his minor son, C.B.T., and other relief. We affirm the denial of visitation, but remand to the trial court for consideration of W.G.T.'s request that he be provided information about his child's welfare. By order dated December 23, 1993, C.B.T. was placed in the temporary custody of his maternal aunt and uncle. Visitation between W.G.T. and his son had been suspended pending approval of the child's therapist to reinstate supervised visitation, and the order provided that "contact with the father shall be pursuant to the recommendation of the therapist or further Court Order." However, the order authorized the therapist to provide W.G.T.'s attorney with information concerning the child's therapy and required the therapist "to accept input from counsel for the father." W.G.T.'s petition requests visitation with his son and alleges that his son's therapist has indicated "that she cannot convey any information regarding the health, welfare, or overall well-being of the child to the petitioner without a court order directing her to do so." Notably absent from W.G.T.'s petition is an allegation that the therapist recommends that contact between the father and son be resumed. We affirm the trial court's denial of visitation, because there has been no allegation that visitation or contact has been recommended by the child's therapist, a prerequisite for this relief. However, we remand to the trial court for reconsideration of W.G.T.'s request that he be provided "with up-to-date information regarding the child's health, education, and overall well-being on a monthly basis, and occasional photographs of the child" by C.B.T.'s therapist. We believe that the order of December 23, 1993, authorizing the therapist to provide information to counsel for the father, may fairly be read to allow W.G.T. to receive reports about his son's welfare through counsel. The contents and in-depth nature of these reports, as well as the frequency at which they are provided, are matters to be determined by the trial court. AFFIRMED in part, REVERSED in part, and REMANDED for further proceedings consistent with this opinion. BOOTH, JOANOS and VAN NORTWICK, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2441507/	5 A.3d 1133 (2010) 195 Md. App. 53 DUMBARTON IMPROVEMENT ASSOCIATION, INC., et al. v. DRUID RIDGE CEMETERY COMPANY, et al. No. 824, Sept. Term, 2008. Court of Special Appeals of Maryland. September 29, 2010. 1134 Michael R. McCann, Towson, MD, for appellant. 1135 Robert S. Brennen, Baltimore, MD and Jennifer R. Lazenby, Towson, MD (John R. Fischel, Miles & Stockbridge PC, Whiteford, Taylor & Preston, LLP, on the brief) for appellee. Panel: MEREDITH, WOODWARD, CHARLES E. MOYLAN, JR. (Retired, specially assigned), JJ. MEREDITH, J. The Druid Ridge Cemetery is located in Baltimore County in Pikesville, Maryland, on an approximately 200-acre parcel of real property between Reisterstown Road and Park Heights Avenue, north of Old Court Road. The impetus for the current litigation was the plan of the owner-operator of the cemetery to sell a developer 36 acres to be used for construction of 56 semi-detached dwellings. A number of neighboring property owners joined with several persons who had purchased burial rights in the cemetery, asking the Circuit Court for Baltimore County to issue a declaratory decree that the cemetery property could be used solely for cemetery purposes.[1] The circuit court concluded: (1) that the restrictive covenant in the 1913 deed for the cemetery does not preclude the proposed sale of 36 acres for residential development; and (2) even if the scope of the restrictive covenant had originally been intended to prevent the proposed development, there has been such a radical change in the vicinity since 1913 that the restriction is no longer enforceable as to the proposed sale of the isolated 36 acres that are the subject of this suit. The opponents of the sale argue in this appeal that the circuit court erred in its construction of the restrictive covenant and in concluding that the restriction should be limited due to changed circumstances. We perceive no error, however, in either of the circuit court's conclusions. Because either conclusion would provide an adequate basis for upholding the judgment of the circuit court, we shall affirm. Background When the Druid Ridge Cemetery held its opening ceremonies in 1898, its planners were praised for ushering in a new era in cemetery design, one in which the grounds were laid out like a park. The original owners and developers of the cemetery ran into financial difficulties, however, and in 1910, creditors forced insolvency proceedings that ultimately led to a court-ordered sale of the cemetery real estate to the current owner of record, Druid Ridge Cemetery Company. The 1913 deed to Druid Ridge Cemetery Company contains restrictive language that is the source of the argument against the currently proposed sale of a portion of the land. In the deed, the grantee covenants and agrees: "That the said property be maintained and operated as a cemetery." After reviewing the extensive evidence that was presented in this case relative to events leading up to the 1913 deed, the trial judge, Judge Kathleen Gallogly Cox, 1136 recounted the history of the Druid Ridge Cemetery in a written opinion that we will quote at length as follows (omitting citations to trial exhibits): The origins of the Cemetery date back to the late 1800s when Charles Tyler entered into an Agreement dated January 14, 1896 with the Druid Ridge Cemetery of Baltimore County for the sale of a portion of his land. As part of that Agreement, the parties covenanted: That the said lands, or such parts thereof as may from time to time be required for Cemetery purposes, shall be surveyed and sub-divided into lots or plats of suitable size for burial and ornamental purposes, with such Avenues, paths, alleys and walks as may be proper and that when so surveyed and subdivided the use of said lots and plats shall be sold and conveyed. ... Pursuant to this Agreement, 10,000 shares were to [be] issued, with Charles Tyler retaining 7,000 of those shares. The Agreement was binding upon the parties and their successors and assigns. However it also reserved the right of the parties to alter or amend its provisions by a two-thirds vote. On May 23, 1897, the Deed contemplated by the Agreement was executed to convey approximately 200 acres of the Tyler land from Charles Tyler to the Druid Ridge Cemetery Company of Baltimore County. The recitals in that Deed state: To Have and To Hold the tract or parcel of land and premises above described and mentioned, and hereby intended to be conveyed, together with the rights privileges, appurtenances and advantages thereto belonging or appertaining unto the proper use and benefit of the said "Druid Ridge Cemetery of Baltimore County," its successors and assigns in fee simple. This 1897 Deed contains no restriction on the use of the Property, and it contains no reference to any intent to create a cemetery. The Cemetery was dedicated on June 11, 1898, and it was hailed as "one of the handsomest burial places in the State of Maryland." As stated in the dedication ceremony, "Druid Ridge Cemetery marks a new era in resting places of the dead, and is to be conducted on a new principle. It is to be a departure from old methods to the newer, more cheerful, broader and at the same time more perfect method of disposing of departed friends." Legislation was enacted in 1900 to permit the use of this large tract of land for a cemetery. Pursuant to the legislation, Druid Ridge Cemetery of Baltimore County was empowered to "purchase, hold or use for the purpose of burial two hundred acres of land in said County, and to perpetuate its charter." However celebrated the dedication and initial operation may have been, the financial aspects of the business quickly deteriorated. A receivership action was filed on October 19, 1910. As reflected throughout the documents that remain from those proceedings, the receivership was complicated by the need to balance the concerns of interred parties and of plot holders with the rights of the business, its investors, and its creditors. As recommended in the May 1, 1911 Report of the Receivers: Your Receivers further recommend that this Honorable Court in any decree for the sale of the property will be justified in requiring that the purchaser not only continue the Cemetery but to provide in some reasonable way for the perpetual care of lots already sold. This requirement would be reasonable we submit, because the 1137 property is more valuable for Cemetery purposes than any other at the present time with the Cemetery well established; and the perpetual care of the lots already sold will be an insignificant item, and a necessary requirement in order to give the Cemetery a reasonable neat and clean appearance. Given the competing interests and demands, the Court scheduled a hearing on the receivership. Testimony reflected that by 1911 approximately 11 acres of the parcel were used for cemetery plots, with approximately 60 to 65 acres of lawn. Another 40 acres of the parcel was used actively as farmland. Approximately 12 to 13 acres adjacent to Park Heights Avenue, known as the Park Hill Plot, remained wooded. Thus a relatively small percentage of the land was used for burial purposes. Following the proceedings, the Honorable Frank I. Duncan issued an Opinion and stated: It is seldom that a case comes before the Courts involving more conflicting interests or presenting a more complicated situation than the case at bar and for the reason that the Defendant corporation has its origin in a most novel (and in Maryland) most unusual contract, i.e., the contract of the Cemetery Company with Tyler, the owner of the land to be used for cemetery purposes. * * * My judgment therefore is that the land of the corporations consisting of about 200 acres, more or less, and all personal property should by the Receivers be sold as and for a cemetery upon such terms as the Receivers in their discretion shall deem most advantageous... except that the purchaser will be required to set apart and invest out of the purchase price the sum of $40,000 to provide for the perpetual care of the lots already sold and to covenant to set apart a sufficient sum from lots by the purchaser thereafter sold to invest for the permanent maintenance thereof. The ensuing Order dated March 21, 1912, reflected this provision. The Receivers then petitioned the Court to modify the language of the decree in order to promote the appropriate disposition of the property. As the Receivers stated: "Criticism has been made that it will not be necessary or desirable to use the whole 189 acres as a cemetery, but that a considerable part of it can be much better used for other purposes, without injury to the Cemetery property." Therefore the Receivers requested the Court to modify the provisions of its Order. In response, on April 19, 1912, the Court struck from its Order the requirement that the property be maintained and operated as a cemetery and the provision requiring investment of certain portions of the proceeds from lot sales for perpetual care of the lots. The Court "reserv[ed] for future determination the question of how much, if any, of said property shall be required to be maintained as a Cemetery and also what portion, if any of the proceeds of lots hereafter sold must be invested for the perpetual maintenance and care of said lots." In the meantime, the Receivers had advertised the property for sale, subject to the provisions of the original Court Order. The Report of Sale of the Property to the Druid Ridge Cemetery Company describes the land as follows: The property conveyed by said deed of January 14, 1896, comprises 200 acres, through which about 2 ½ miles of 20 foot roads have been laid off, and of which about 11 ¼ acres have been sold as burial lots. A plat showing the 1138 mode of laying out the cemetery, the lots already sold, and the property unsold, can be seen. ... The property has been beautifully laid out and developed for cemetery purposes; and 2 ½ miles of avenues have been built, a marble mausoleum ... and other fine improvements have been constructed, and the property is in everyway [sic] for successful operation as a cemetery. The property will be sold ... subject to the following conditions: (1) That it be maintained and operated as a cemetery. The ensuing Deed reflected these conditions, as previously noted. Various interested parties appealed the receivership proceedings. The restrictions in the Deed were not addressed on appeal. However the Court noted that the interest held by plot owners placed them in the position of a creditor only, and did not entitle them to an actual interest in the real property. The Court also affirmed the provisions in the sale that required funds to be set aside for perpetual care of the property as a proper use of the court[']s equitable powers. As it noted, had no such provision been made, the distribution of the receivership estate might have been complicated by the presentation of other claims based upon the contracts between the company and the plot owners. Thus the provisions advanced the equitable resolution of conflicting claims. Gregory v. Chapman, 119 Md. 495, 497-99 [87 A. 523] (1913). Eighty-six years after acquiring the cemetery land from the receivers, the Druid Ridge Cemetery Company entered into a contract in 1999 to sell approximately 36 acres of the cemetery property to Druid Ridge, L.L.P., a developer that proposed to construct 56 semi-detached dwellings upon the property. The acreage that is the subject of the proposed development is separated from the currently developed portion of the cemetery by a large wooded tract and a stream. Opponents of the proposed development filed suit, seeking declaratory and injunctive relief. At trial, the individual appellants testified that the cemetery has long been used as a public park, and they have enjoyed visiting the cemetery for recreational activities such as walking, ice skating, picnicking, jogging, and bicycling. They testified that their use of the cemetery would be impaired by the proposed residential development because of an increase in traffic and the change from the current park-like setting. Nearby residents testified that the increase in traffic would have a negative impact upon them as well. Owners of burial plots testified that they were issued a booklet explaining the rules and regulations of the cemetery at the time of their purchases. The rules and regulations include the following statement: "This cemetery is dedicated and shall be used only for cemetery purposes." The developer introduced testimony showing that little of the development would be visible from the currently improved areas of the cemetery because of the barrier the woods provide. In addition, experts testified that the woods and stream separating the parcel pose logistical and environmental challenges to developing the parcel as grave sites. Representatives of the cemetery testified that no graves would need to be moved if the parcel was developed, and the public would be able to continue to visit and enjoy the remainder of the cemetery in the same way they currently do. One expert testified that the main portion of the cemetery has sufficient space to meet demand for grave sites for approximately the next century. Another expert opined that, if the 1139 parcel proposed for development was used for burial sites instead of homes, the burial spaces provided by the 36 acres would be consumed in twenty-seven years. An expert in the field of "real estate economics," who had been "asked to write a report showing statistically the nature and magnitude of the change in the economic and demographic environment around the cemetery parcel between 1913 and today," testified: "[S]ince 1913 there have been tremendous changes in the economic and demographic environment across multiple dimensions." He commented: "I think we can agree that you don't have to be an economist[;] any layperson can figure out there have been significant shifts since 1913." He noted: "As late as 1930, one hundred percent of [Baltimore] County's population was deemed to be rural." Between 1910 and the time of trial, the population of Baltimore County had grown from 122,000 to nearly 800,000. "Pikesville's population has expanded by leaps and bounds." The witness did not have data showing the population of the Pikesville area in 1913, but noted that, according to one source, the population of the Pikesville area was only 175 in 1881; the population of the Pikesville area was approximately 31,000 in 2008. The economics expert also noted that the construction of the Baltimore Beltway in 1962, just north of the cemetery property, had made the neighborhoods surrounding the cemetery "more attractive for both residential and commercial development." When asked whether he had been "able to determine whether there had been a change in the economic and demographic landscape in the areas surrounding the cemetery from 1913 to the present," the expert replied: "I think the data speak very clearly on this, that there has been a radical or dramatic shift in the economic and demographic environment since 1913. And that shift continues to this day." Because of the change in the area surrounding the cemetery, "leaving [the 36-acre parcel] as surplus cemetery land would be suboptimal. Leaving this as surplus cemetery land from a public policy perspective doesn't make much sense." The expert explained that, at the time the cemetery was established, because of the rural nature of Baltimore County, landowners did not then have the same kind of concerns about efficient land utilization that developers do today. After the trial, Judge Cox issued a written opinion, in which she concluded that the appellants "are not entitled to relief on any of the claims set forth in the Petition." She summarized her conclusions as follows: The covenant at issue was not intended to restrict alienation of all undeveloped land encompassed in the 1913 Deed. Further, given the radical changes in the surrounding community, the covenant is no longer viable. Accordingly, the Petition seeking a declaration that defendants be prohibited from selling the Development Parcel for purposes of residential development must be denied. With respect to the trial court's conclusion that the covenant in the 1913 deed "[t]hat the said property be maintained and operated as a cemetery" should not be construed to preclude all of the acreage from being used for any purpose other than a cemetery, the court explained that the rules governing construction of a covenant were summarized by the Court of Appeals in Belleview v. Rugby Hall, 321 Md. 152, 157-58, 582 A.2d 493 (1990), as follows: In construing covenants, "[i]t is a cardinal principle ... that the court should be governed by the intention of the parties as it appears or is implied from the instrument itself." Live Stock Co. v. 1140 Rendering Co., 179 Md. 117, 122, 17 A.2d 130 (1941). The language of the instrument is properly "considered in connection with the object in view of the parties and the circumstances and conditions affecting the parties and the property. ..." Levy v. Dundalk Co., 177 Md. 636, 648, 11 A.2d 476 (1940). This principle is consistent with the general law of contracts. See Anne Arundel County v. Crofton Corp., 286 Md. 666, 673, 410 A.2d 228 (1980) (court, in construing agreement, must first determine from the language of the agreement itself, what a reasonable person in the position of the parties would have meant at the time the agreement was effectuated). If the meaning of the instrument is not clear from its terms, "the circumstances surrounding the execution of the instrument should be considered in arriving at the intention of the parties, and the apparent meaning and object of their stipulations should be gathered from all possible sources." Live Stock Co. v. Rendering Co., supra, 179 Md. at 122, 17 A.2d 130. If an ambiguity is present, and if that ambiguity is not clearly resolved by resort to extrinsic evidence, the general rule in favor of the unrestricted use of property will prevail and the ambiguity in a restriction will be resolved against the party seeking its enforcement. Martin v. Weinberg, 205 Md. 519, 526, 109 A.2d 576 (1954); Himmel v. Hendler, 161 Md. 181, 187, 155 A. 316 (1931); Guilford Ass'n Inc. v. Beasley, 29 Md. App. 694, 699, 350 A.2d 169, cert. denied, 277 Md. 735 (1976). The rule of strict construction should not be employed, however, to defeat a restrictive covenant that is clear on its face, or is clear when considered in light of the surrounding circumstances. The courts seem to have generally recognized that there is no public policy against a fair and reasonable construction, in the light of surrounding circumstances, of restrictions designed, in general, to accomplish the same beneficial purposes as zoning. Martin v. Weinberg, supra, 205 Md. at 527, 109 A.2d 576. The courts, it would seem, are under a duty to effectuate rather than defeat an intention which is clear from the context, the objective sought to be accomplished by the restriction and from the result that would arise from a different construction. Guilford Ass'n, Inc. v. Beasley, supra, 29 Md.App. at 700, 350 A.2d 169. Judge Cox concluded that the language of the cemetery covenant in the 1913 deed "reflects an intent to burden the land with a requirement that the cemetery operation be preserved." Nevertheless, she determined that the restrictive language was ambiguous as to its scope because "[i]t is unclear the extent to which the `said property' is to be maintained and operated as a cemetery." The court noted that, at the time the 1913 deed was executed, "large portions of the nearly 200 acre parcel were not used as a cemetery." Because the deed did not expressly state "the extent and nature" of the required cemetery usage, the trial court sought to determine from the evidence the parties' intent on that point. The court stated: The determination of intent in this case is complicated by this procedural posture, as this [1913] Deed was not the subject simply negotiated by parties to a contract. Rather, the Deed was issued by receivers, overseen by the Court, following fairly complex proceedings attempting to balance competing rights and claims. It is noteworthy that there was no restriction in the original 1896 Deed from Tyler to Druid Ridge Cemetery of Baltimore County that restricted the use of the Property for cemetery 1141 purposes. In the receivership proceedings, the suggestion of use as a cemetery was seemingly made to protect against claims and to preserve the reasonable expectations of plot owners. In addition, it was perceived at that time that use as a cemetery was the most advantageous disposition. However as soon as the Receivers indicated that the restriction for use as a cemetery might actually impede the sale, the Court struck the provision from the order authorizing the sale of the property. In a receivership proceeding, it is not the function of the Court to make a value judgment concerning the appropriate use of the property. Rather, the proceeding allows the Court to appoint temporary receivers or trustees to take charge of the assets and operate the business pending final determination concerning dissolution and distribution of property. The intent is to preserve, maximize, and appropriately dispose of property, and to allow for the orderly distribution of assets among creditors and investors. Having weighed and considered the evidence presented, including the documents from the receivership proceedings discussed above, I do not believe that the Court intended to require the Receivers to limit the scope of use of the entire parcel for cemetery purposes only. Rather, I find that the Court intended to require the continued operation of the existing cemetery in a manner that provided for the maintenance and care of the graves and attendant structures, and that honored the obligations to existing plot owners. The entire 200 acres has never been used as a "cemetery." Although a large segment of the property had been developed as a lawn surrounding the burial sites by 1913, nearly two thirds of the parcel remained unused or was used for other purposes. In fact, part of the land at that time was still actively being farmed. There is nothing in the record to suggest that the Court, through the receivers, intended to restrict all such other uses. This conclusion is buttressed by actions taken since the time of the sale. There have been a number of other transactions where portions of the property have been sold, or easements granted for uses other than as a cemetery.[Trial Court's Footnote]7 Testimony established that a nursery was operated for some period of time on the Development Parcel. [Trial Court's Footnote 7:] Six conveyances from the original parcel were identified in the testimony, including a 1921 fee simple conveyance, a later conveyance to a railway company, a 1967 deed to Martex properties, along with a 1993 ground lease to Martex for parking, a 1999 conveyance to Maryland National Bank, and a 1989 drainage easement for the Fields of Stevenson community. It also is extremely unlikely that the full 200 acres will ever be used actively as a cemetery. There is already an inventory of developed property that will meet the need for the sale of plots, at the present rate, well into the future. While projections of the rate of use border on sheer speculation, particularly in light of changes in the death care industry and the increased use of cremation alternatives, the evidence was abundantly clear that the current inventory of available sites is likely sufficient to last through this century. * * * There simply was never any intent to restrict all 200 acres for use as a cemetery only. Rather, the intent at the time was to require continued operation of the existing cemetery, and to provide for perpetual care of the grounds and graves. There was no intent to restrict 1142 alienation of the other undeveloped portion of the parcel. Based upon that finding as to the intent of the parties to the 1913 deed, the trial court held that the proposed sale of the 36-acre parcel was not precluded by the covenant. In the alternative, the trial court found that there had been a radical change in the neighborhood, citing Bowie v. MIE, 398 Md. 657, 687, 922 A.2d 509 (2007) ("Our cases establish that chief among the factors considered in evaluating the present circumstances relevant to determining the continuing validity of a restrictive covenant is whether there has been a `radical change in the neighborhood causing the restrictions to outlive their usefulness.' Chevy Chase Village v. Jaggers, 261 Md. 309, 316 275 A.2d 167, 171 (1971)...."). The trial court made reference to the Bowie opinion's comment that "the question of validity is a combination of a reasonable period of elapsed time and frustration of purpose in light of changed circumstances occurring over that time." Id. at 691, 922 A.2d 509. The trial judge observed that the parties had presented conflicting evidence as to whether the parcel proposed for residential development would ever be used for burial purposes and whether there had been a radical change in the neighborhood. The court found that the evidence on both points weighed against enforcing the restriction to preclude the sale of the 36-acre parcel. The court stated: [T]he ability to develop property that includes any type of wetland has become enormously more complicated in recent years. While it may be conceivable that Druid Ridge [Cemetery Company] could engineer a solution that would allow them to bridge the stream and access the Development Parcel to put graves in that area, it is neither practical nor remotely likely to occur. In the first instance, the Cemetery Company has no need, either now or in the foreseeable future, to expand the usable cemetery space. Even if they had such a need, there is still abundant other undeveloped property within the Cemetery that does not pose environmental challenges with their attendant costs. There is no reasonable likelihood that the Development Parcel will ever be put to use for burial purposes. The evidence of "radical change" in the surrounding area also exists. The time frame at issue in this case is nearly a century. While it was undoubtedly predictable in the early 1900s that development would continue gradually along the roadway spokes leading out of Baltimore City, the extent of that change and its impact on the rural areas outside the city could not have been expected. Population growth, transportation changes, the explosion of commercial and retail development, and the increases in housing density are just the tip of the iceberg. There is nothing about this area now that is even remotely similar to the rural setting that existed when this Deed was executed. ... The intent of the covenant in the Deed was to protect the cemetery operation and to guarantee its continued existence. That purpose is fulfilled without restricting the use of land in the Development Parcel. Discussion Although we are persuaded that the trial court's analysis was correct on both the construction of the scope of the covenant as well as its continued validity, we turn first to the ruling based upon the court's finding that there had been a radical change in the neighborhood. As the Court of Appeals noted in Bowie, supra, 398 Md. at 692, 922 A.2d 509: "We do not 1143 disturb a trial court's findings of fact on the question of changed circumstances absent clear error." See Maryland Rule 8-131(c). In the present case, there was ample evidence in the record to support the trial judge's finding that there had been a radical change in the neighborhood of Druid Ridge Cemetery subsequent to the receivers' sale of the cemetery in 1913. That finding was not clearly erroneous. There was also evidence to support the trial judge's finding that there was "no reasonable likelihood" that the 36-acre parcel "will ever be put to use for burial purposes." Given those findings, the trial court's refusal to apply the covenant to preclude a sale of the 36-acre parcel satisfies the "`changed circumstance' standard for covenant analysis" announced by the Court of Appeals in Bowie, 398 Md. at 687, 922 A.2d 509. On this basis alone, we would affirm the judgment of the circuit court even if we did not agree with the court's analysis of the proper interpretation of the 1913 covenant. But we also agree with the trial court's analysis that there is ambiguity in the covenant with respect to the nature and extent of the restriction. As the Court of Appeals explained in Calomiris v. Woods, 353 Md. 425, 436, 727 A.2d 358 (1999), "a written contract is ambiguous if, when read by a reasonably prudent person, it is susceptible of more than one meaning." The Court noted that the question of whether language is ambiguous is a question of law that considers the purpose of the contract and the facts and circumstances of the parties at the time the contract was made. Id. at 435-36, 727 A.2d 358. If the appellate court agrees with the trial court's conclusion that the language is ambiguous, "it will apply a clearly erroneous standard to the trial court's assessment of the construction of the contract in light of the parol evidence received." Id. at 435, 727 A.2d 358. Although the covenant "[t]hat the said property be maintained and operated as a cemetery" clearly reflects a commitment to continue cemetery operations upon the land, the deed does not specify that 100% of the property be utilized solely or exclusively for cemetery purposes in perpetuity. As the Court of Appeals observed in SDC 214, LLC v. London Towne Prop. Owners Ass'n, 395 Md. 424, 437, 910 A.2d 1064 (2006), "`it is not the province of this Court to supply a missing' word or phrase in a restrictive covenant." (Quoting Sowers v. Holy Nativity Church, 149 Md. 434, 442, 131 A. 785 (1926)). Nor does the deed include any reverter language or other cautionary statement about using some portion of the property for purposes other than a cemetery. Given the circumstances of the parties when the deed was executed, including the fact that a substantial portion of the property was being used at that time as a farm, one reasonable reading of the covenant would have been that the requirement to use the property to maintain and operate a cemetery did not extend to every square foot of the nearly 200 acres. Rather, under the circumstances, a reasonable person in the position of the purchaser might have read the covenant as requiring that the area that was then being utilized as a cemetery would be restricted to being used for the maintenance and operation of a cemetery. When the trial court considered extrinsic evidence to resolve the ambiguity as to nature and extent of the cemetery restriction, the court found that it could not have been the intent of the parties to mandate that the entirety of the acreage be used solely for cemetery purposes and no other use. This finding was supported by the evidence that 40 acres of the "said property" was being used for farming operations *1144 at the time of the conveyance. Accordingly, the trial court was not clearly erroneous in finding that "[t]here simply was never any intent to restrict all 200 acres for use as a cemetery only." Nor was there clear error in the trial court's finding that, although "the intent at the time was to require continued operation of the existing cemetery, and to provide for perpetual care of the grounds and graves[, t]here was no intent to restrict alienation of the other undeveloped portion of the parcel." Accordingly, we agree with the trial court's construction of the restrictive covenant as not barring the sale of the 36-acre parcel that is the subject of this litigation. Appellants also raised an issue challenging the trial court's dismissal of Stewart Enterprises, Inc. (the parent company of Druid Ridge Cemetery Company) at the close of the plaintiffs' case. The motion to dismiss was granted pursuant to Rule 2-519(b) because there was no evidence that the parent company was an owner of the any cemetery land or a party to the contract to sell the 36-acre parcel. In light of our conclusion that the circuit court did not err in granting no relief to the appellants, the issue appears moot at this point. JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY IS AFFIRMED. COSTS TO BE PAID BY APPELLANTS. NOTES [1] The appellants are the plaintiffs who filed the complaint: Doris Miller, owner of a crypt and burial lots in the cemetery; Albert and Janet Nahum, owners of a crypt; Henry and Babette Gutman, owners of a burial lot; Sharon Rosen, owner of neighborhood property; Howard and Alice Moffet, owners of neighborhood property; the Dumbarton Improvement Association, Inc., a community association representing a neighboring community; and the Long Meadow Association, Inc., a community association representing neighboring property owners. The appellees are the defendants named in the complaint: Druid Ridge Cemetery Company, the corporation that has owned and operated the Druid Ridge Cemetery since purchasing the property in March 1913; Stewart Enterprises, Inc., a corporation that owns the Druid Ridge Cemetery Company; and Druid Ridge, L.L.P., the contract purchaser of 36 acres land from Druid Ridge Cemetery Company.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2632601/	103 P.3d 1285 (2005) CITY OF BREMERTON, Respondent, v. Ledell TUCKER, Appellant. No. 31206-9-II. Court of Appeals of Washington, Division 2. January 11, 2005. Eric Michael Fong, Rovang Fong & Associates, Port Orchard, WA, for Petitioner. Kenneth W. Bagwell, Kitsap Co. Prosecutors Office, Port Orchard, WA, for Respondent. 1286 HUNT, J. Ledell Tucker appeals his mandatory, 24-month, statutory minimum sentence enhancement for driving-under-the-influence (DUI), based on a prior deferred DUI prosecution. He argues that the sentence enhancement violates due process because it relieves the State of its burden to prove all criminal conduct beyond a reasonable doubt. Holding that the DUI sentence-enhancement statute does not violate due process, we affirm. FACTS I. FIRST DUI DEFERRED PROSECUTION In 1996, Ledell Tucker requested and received a deferred prosecution for DUI in Kitsap County District Court. As a condition of his deferred prosecution, he stipulated to facts in the police report and admitted he had been driving while under the influence of alcohol as follows: "I had consumed intoxicants on this occasion and at the time of driving my vehicle, my ability to drive was impaired and I was under the influence of the intoxicant." Clerk's Papers (CP) at 24. He also stipulated to admission of police reports and statements showing that he had failed a field sobriety test, registered a .211 on a Portable Breath Test, and exhibited explicit signs of intoxication. In 1999, after finding that Tucker had successfully completed the deferred prosecution conditions, the district court dismissed his DUI charge, entering no conviction on his record. II. SECOND DUI PLEA AND SENTENCE ENHANCEMENT On November 8, 2002, the City of Bremerton charged Tucker with another DUI, accompanied by a special enhanced sentence allegation based on his refusal to take a breathalyzer test. Tucker pled guilty as charged. The municipal court imposed the mandatory minimum sentence for a DUI offender with one "prior offense,"[1] based on Tucker's previous deferred DUI prosecution, under RCW 46.61.5055.[2] Tucker appealed to Kitsap County Superior Court, which affirmed. Tucker next sought discretionary review by the Washington Supreme Court. The Supreme Court granted review and transferred the case to us to review whether RCW 46.61.5055 violates due process by increasing the mandatory minimum DUI sentence based on a successfully completed, prior deferred prosecution, thereby relieving the State of its burden to prove all criminal conduct beyond a reasonable doubt. We find no due process violation inherent in this sentencing procedure. ANALYSIS Tucker argues that former RCW 46.61.5055(11)(a)(vii) (2002), which counts deferred DUI prosecutions as prior offenses, violates due process by imposing a mandatory sentence enhancement based on an unproven charge, namely his 1996 dismissed, deferred DUI prosecution in Kitsap County District Court. We disagree. I. STANDARD OF REVIEW Whether a statute is constitutional is a question of law, which we review de novo. State v. Shultz, 138 Wash.2d 638, 643, 980 P.2d 1265 (1999). We presume a statute to be constitutional. Thus, Tucker has the burden of proving the statute unconstitutional beyond a reasonable doubt. State v. Ward, 123 Wash.2d 488, 496, 869 P.2d 1062 (1994). He fails to meet this burden here. II. DUE PROCESS "Due process requires fair notice of proscribed criminal conduct and standards to prevent arbitrary enforcement." City of Richland v. Michel, 89 Wash.App. 764, 770, 950 P.2d 10 (1998). We hold that (1) the deferred prosecution statute, Chapter 10.05 RCW, and the DUI sentence enhancement statute, former RCW 46.61.5055(11)(a)(vii) (2002), provide fair notice of both the proscribed conduct and the corresponding penalties; 1287 (2) there is no evidence of arbitrary enforcement here; and (3) former RCW 46.61.5055(11)(a)(vii) is constitutional. A. The Legislature's Mandate Our Legislature has mandated that if a person convicted of DUI has had a "prior offense" within the previous seven years, the trial court must impose a higher minimum sentence for a new DUI conviction than it would impose for a person with no prior DUI offenses. For a first DUI conviction, RCW 46.61.5055(1)(b) mandates a minimum $500 fine and two days in jail, or 30 days of electronic home monitoring.[3] For a second DUI offense, however, RCW 46.61.5055(2)(b) mandates a minimum $750 fine and 45 days in jail, plus 90 days of electronic home monitoring. By statute, a "prior offense" includes "[a] deferred prosecution under chapter 10.05 RCW granted in a prosecution for a violation of RCW 46.61.502, 46.61.504, or an equivalent local ordinance." Former RCW 46.61.5055(11)(a)(vii). This statutory definition of a "prior offense" includes Tucker's 1996 deferred DUI prosecution. B. Deferred DUI Prosecution Tucker argues that former RCW 46.61.5055(11)(a)(vii) improperly allows the State to use an unproven charge for which he was never convicted, namely a prior DUI charge dismissed following a deferred prosecution, as the predicate for an enhanced sentence for a subsequent DUI. He relies heavily on State v. Shaffer, 113 Wash.App. 812, 55 P.3d 668 (2002), in which Division One of our court held a different section of the statute, former RCW 46.61.5055(11)(a)(v) (2002), unconstitutional. In so holding, the Shaffer court reasoned that former RCW 46.61.5055(11)(a)(v) mandated a sentence enhancement for a vehicular homicide conviction based on a prior DUI charge that had been reduced to reckless driving and, therefore, lacked DUI proof.[4]Shaffer, 113 Wash.App. at 822, 55 P.3d 668. The statute and facts at issue here, however, differ significantly. Thus, Shaffer does not apply. First, Shaffer did not involve a prior deferred DUI prosecution under Chapter 10.05 RCW, the statute at issue here. Second, the constitutional flaw highlighted in Shaffer was not merely the lack of a prior DUI conviction supported by the State's proof, but also the lack of an admission by Shaffer that he had committed a prior DUI.[5] In contrast, Tucker's prior DUI charge was not reduced to reckless driving, and he admitted having committed DUI. When Tucker accepted the State's offer of a deferred DUI prosecution, he admitted on the record under oath that he had driven under the influence of alcohol.[6] His admission to having committed the charged DUI was a prerequisite to the State's granting him a deferred prosecution.[7] Tucker misconstrues the Legislature's purpose in providing the opportunity for deferred DUI prosecution: Deferred prosecution is designed to encourage treatment of culpable people whose conduct is caused by a treatable condition, like alcoholism. Such people are given an opportunity to avoid conviction if they successfully complete treatment. Deferred prosecution is not equivalent to a guilty plea or a conviction. It is a form of preconviction sentencing or probation under 1288 which an accused must allege under oath that the culpable conduct charged is the result of alcoholism, drug addiction or mental problems. The accused must execute a statement that acknowledges his or her rights, stipulates to the admissibility and sufficiency of the facts in the police report, and acknowledges that the statement will be entered and used to support a finding of guilt if the deferred prosecution is revoked. City of Kent v. Jenkins, 99 Wash.App. 287, 289-90, 992 P.2d 1045, review denied, 141 Wash.2d 1007, 10 P.3d 1073 (2000) (emphasis added) (citations omitted); see also, RCW 10.05.020. Conversely, if the accused refuses to admit guilt or professes innocence, "the court will not accept a petition for deferred prosecution." RCW 10.05.020(3). Third, as part of the deferred prosecution process, Tucker received fair notice "that an enhanced sentence was a consequence of his [deferred prosecution] agreement" if he committed another DUI.[8]Michel, 89 Wash.App. at 770, 950 P.2d 10. Tucker knew the deferred prosecution offered him an opportunity for alcohol treatment, in hopes of preventing further DUI violations, and for a DUI-conviction-free record. Tucker also knew, however that in spite of his treatment, if, he drove again while under the influence, his penalty for the new DUI would be more severe than it would have been had the new DUI been his first offense. We hold that Tucker has failed to show lack of notice or any due process violation when the trial court used his prior deferred DUI prosecution to enhance his sentence under former RCW 46.61.5055(11)(a)(vii). C. Constitutionality of Statute Division III of our court addressed a similar constitutional challenge to the same statutory subsection in Michel. 89 Wash.App. at 769-70, 950 P.2d 10. Michel argued that former RCW 46.61.5055(8)(a)(vii) (1996):(1) denied him due process[9] in failing to warn that a deferred DUI prosecution could be used for sentencing enhancement at a later time, and (2) violated equal protection[10] by treating a DUI charge dismissed after successful completion of deferred prosecution the same as a DUI conviction. Michel, 89 Wash.App. at 769-70, 950 P.2d 10. The court held that the Legislature's inclusion of a deferred prosecution as a "prior offense" did not violate due process or equal protection. Michel, 89 Wash.App. at 770, 772, 950 P.2d 10. Two years later, Division I of our court addressed a related statutory interpretation argument that a charge dismissed following a deferred prosecution is not a "prior offense." Jenkins, 99 Wash.App. at 289, 992 P.2d 1045. The court held that the Legislature meant exactly what it said: It intended that a successfully completed, deferred prosecution should count as a prior offense for sentencing purposes in a subsequent DUI offense. Jenkins, 99 Wash.App. at 290-91, 992 P.2d 1045. Rejecting Tucker's analogy to Shaffer, we adopt Jenkins and Michel. We hold, therefore, that former RCW 46.661.5055(11)(a)(vii) does not violate due process by increasing the penalty for a second DUI where a defendant has previously admitted to having committed a prior DUI under a deferred prosecution (even though that prior DUI charge was dismissed following successful completion of the deferred prosecution conditions). The Legislature's intent in providing deferred 1289 prosecution was to encourage people with severe alcohol addictions to seek treatment in the hope that they would never drive under the influence again. Where, however, such treatment has not curtailed a defendant's drinking and driving, the Legislature has expressed in this statute its intent to protect the public from the grave danger of repeated drunken driving. Accordingly, we affirm Tucker's enhanced DUI sentence. We concur: MORGAN, A.C.J., and ARMSTRONG, J. NOTES [1] As defined in former RCW 46.61.5055(11)(a)(vii) (2002). [2] The municipal court sentenced Tucker to 45 days in jail, 90 days home detention, and five years probation, and it imposed $1,405 in fines. [3] RCW 46.61.5055(1)(b)(i) provides: "In lieu of the mandatory minimum term of imprisonment required under this subsection (1)(b)(i), the court may order not less than thirty days of electronic home monitoring." [4] For vehicular homicide sentence enhancement purposes, former RCW 46.61.5055(11)(a)(v) allowed the State to elevate a prior reckless driving conviction to a DUI conviction if the reckless driving had originally been charged as a DUI. The Shaffer court held that the statute's failure to require any proof of the prior DUI charge allowed a conviction without proof beyond a reasonable doubt by the State. Shaffer, 113 Wash.App. at 818-19, 55 P.3d 668. But such is not the case here. [5] Shaffer had been convicted of only the lesser charge of reckless driving. Shaffer, 113 Wash.App. at 817, 55 P.3d 668. [6] The trial court expressly found that Tucker's statements were knowing and voluntary. [7] Conversely, he would not have qualified for deferred prosecution if he had maintained that he was not guilty of the charged DUI. See RCW 10.05.020(3), discussed infra. [8] We recognize that in Michel, former RCW 10.05.120 (1992) specifically provided that a sentencing court can consider prior deferred prosecutions for enhancement purposes. Michel, 89 Wash.App. at 769, 950 P.2d 10. Though the amended version of RCW 10.05 in effect at the time of Tucker's deferred prosecution did not specifically warn of the possibility of an enhanced sentence, former RCW 46.61.5055(11)(a)(vii) (2002) specifically contemplated such a result. Furthermore, in holding that Michel received fair notice that an enhanced sentence was a consequence of deferred prosecution, the court reasoned, "Unlike the case with guilty pleas, the deferred prosecution statute does not require written notice of all consequences of the agreement." Michel, 89 Wash.App. at 770, 950 P.2d 10. We agree, adopt the holding in Michel, and apply it to the slightly varied facts of Tucker's case. [9] U.S. Const. amend. V; Wash. Const. art. I, § 3. [10] U.S. Const. amend. XIV, § 1; Wash. Const. art. I, § 12.	01-03-2023	11-01-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264748/	14 Cal.App.4th 1526 (1993) 18 Cal. Rptr.2d 416 LINDA THIELE, Plaintiff and Appellant, v. RML REALTY PARTNERS et al., Defendants and Respondents. Docket No. B064221. Court of Appeals of California, Second District, Division Seven. April 15, 1993. 1527 COUNSEL Nebenzahl & Kohn, James A. Kohn and Elizabeth M. Matthias for Plaintiff and Appellant. Irsfield, Irsfield & Younger, Ross R. Hart and Nancy Miller for Defendants and Respondents. OPINION JOHNSON, J. The plaintiff, Linda Thiele (Thiele), appeals from a judgment of the superior court dismissing her complaint following the sustaining of defendant American Arbitration Association's (AAA) demurrer without leave to amend. The central issue on appeal is whether the immunity shielding arbitrators from civil liability extends to organizations sponsoring arbitrations, and, if so, to what extent. We hold that it does and affirm. FACTS AND PROCEEDINGS BELOW For purposes of appeal, we accept as true the properly pleaded factual allegations of the complaint. In December of 1990 the appellant Thiele commenced arbitration proceedings with the respondent AAA. Thereafter a hearing was held and the matter was submitted to an arbitrator for decision. On June 21, 1991, the appellant, outside of the arbitration proceeding, agreed to settle the matter with respondents in the arbitration proceedings for $250,000. On the same day appellant informed the AAA of this development and instructed it not to release an arbitration award. 1528 On July 2, 1991, the AAA sent out the arbitrator's award, which was less than the settlement amount. After receiving the award, respondents in the arbitration proceedings took the position the matter had not been settled. Thiele filed a complaint against the AAA on August 20, 1991, alleging negligence and breach of contract stemming from the AAA's delivery of the arbitration award contrary to her instructions. The AAA demurred, claiming it was immune from civil liability under the arbitral immunity doctrine. The trial court sustained the demurrer and later granted a motion to dismiss. On January 17, 1992, appellant timely filed a notice of appeal. DISCUSSION I. Statutory and Case Law Extend Arbitral Immunity to Sponsoring Organizations. (1) Appellant argues the case of Baar v. Tigerman (1983) 140 Cal. App.3d 979 [211 Cal. Rptr. 426, 41 A.L.R.4th 1004] clearly states the immunity provided arbitrators from civil liability does not extend to organizations sponsoring the arbitration proceeding. In Baar the court limited arbitral immunity for sponsoring organizations only to those situations in which the arbitrator was immune as well. (Id. at p. 986.) Thus, in Baar, arbitral immunity did not protect the sponsoring organization from civil liability because the arbitrator was not immune for his act of failing to render an award. (Id. at pp. 982-986.) In direct response to Baar, the Legislature adopted Code of Civil Procedure section 1280.1 to supersede the holding in that case and to expand arbitral immunity to conform to judicial immunity. (American Arbitration Assn. v. Superior Court (1992) 8 Cal. App.4th 1131, 1133 [10 Cal. Rptr.2d 899], citing Coopers & Lybrand v. Superior Court (1989) 212 Cal. App.3d 524, 535 [260 Cal. Rptr. 713].) Code of Civil Procedure section 1280.1 provides that "[a]n arbitrator has the immunity of a judicial officer from civil liability when acting in the capacity of arbitrator under any statute or contract." Division One of this district suggested in American Arbitration Assn., supra, that since Code of Civil Procedure section 1280.1 was enacted specifically to confer immunity where Baar said there was none, and Baar involved the immunity of a sponsoring organization, it would follow the immunity created for the arbitrator also serves to shield the sponsoring organization from civil liability. (American Arbitration Assn. v. Superior Court, supra, 8 Cal. App.4th at p. 1133.) Therefore, the court held, the AAA 1529 was immune from liability for reopening a case after it had given notice the matter would be closed. (Id. at p. 1132.) Therefore, it is recognized application of arbitral immunity is not limited to individual arbitrators. (8 Cal. App.4th at p. 1132; Cort v. American Arbitration Association (N.D.Cal. 1992) 795 F. Supp. 970, 971.) "To urge that the immunity should be limited to the arbitrators would be similar to arguing that judicial immunity should go no farther than the judge." (Corbin v. Washington Fire and Marine Insurance Co. (D.S.C. 1968) 278 F. Supp. 393, 398.) Also, it must necessarily extend beyond the arbitrators themselves if arbitration is to be an effective means of resolving disputes. (Ibid.) Accordingly, courts have on the whole extended arbitral immunity to sponsoring organizations. (See Annot. (1992) 41 A.L.R.4th 1013.) In fact, it has been specifically extended to the AAA. (American Arbitration Assn. v. Superior Court, supra, 8 Cal. App.4th at p. 1132.) The conclusion to extend immunity to the sponsoring organization is a natural and necessary product of the policies underlying arbitral immunity. (Corey v. New York Stock Exchange (6th Cir.1982) 691 F.2d 1205, 1211.) As the court noted in American Arbitration Assn. v. Superior Court, supra, 8 Cal. App.4th at page 1133, "a refusal to extend immunity to the sponsoring organization would make the arbitrator's immunity illusory ... it would shift liability rather than extinguish it." (See also Corey v. New York Stock Exchange, supra, 691 F.2d at p. 1211.) Appellant, however, urges the statutory scheme allowing for arbitral immunity shows the Legislature intended to limit the grant of arbitral immunity in Code of Civil Procedure section 1280.1 to individual arbitrators. The appellant first points out sponsoring organizations are specifically not referred to in Code of Civil Procedure section 1280.1. Second, appellant argues language which would have extended immunity to sponsoring organizations was suggested to the Legislature before enactment of Code of Civil Procedure section 1280.1 but was not adopted. Last, appellant contends Business and Professions Code section 6200, subdivision (f) has specific language providing arbitral immunity for sponsoring organizations. All this the appellant contends demonstrates legislative intent to limit the immunity provided in Code of Civil Procedure section 1280.1 only to individual arbitrators. The court in American Arbitration Assn., confronted with a similar argument regarding the statutory scheme, ruled this was not dispositive. (American Arbitration Assn. v. Superior Court, supra, 8 Cal. App.4th at p. 1134.) The court stated that "[w]here, as here, the intent to include sponsoring 1530 associations within section 1280.1 is clear, the failure to expressly state that inclusion is immaterial." (Ibid.) We find this reasoning convincing. II. Arbitral Immunity Protects All Acts Within the Scope of the Arbitral Process. (2) In the alternative, appellant argues that if arbitral immunity does exist for sponsoring organizations, the act complained of here sending out the award contrary to express instructions was administrative and was not part of the decisionmaking process. Consequently, it was not within the scope of arbitral immunity. We disagree. In Austern v. Chicago Bd. Options Exchange, Inc. (2d Cir.1990) 898 F.2d 882, 886, appellants argued the acts of improper notice and scheduling of the arbitration hearing and improper selection of arbitrators were ministerial or administrative in nature, and, therefore, were outside the scope of arbitral immunity. Essentially, appellants attempted to distinguish judicial or discretionary duties from ministerial or administrative activities. In rejecting appellants' argument, the court stated "semantically categorizing the challenged acts as `ministerial' or administrative, as opposed to `discretionary,' in large part misses the mark, since the scope of arbitral immunity is `defined by the functions it protects and serves.'" (Ibid., italics in original; see also Dobranski, The Arbitrator as a Fiduciary Under the Employee Retirement Income Security Act of 1974: A Misguided Approach (1982) 32 Am.U.L.Rev. 65, 79, fn. 64 [arbitration involves a function that in no way resembles the exercise of managerial or administrative authority].) Arbitral immunity shields all functions which are "integrally related to the arbitral process." (Austern v. Chicago Bd. Options Exchange, Inc., supra, 898 F.2d at p. 886; see also Domke on Commercial Arbitration, § 23.01 (rev. ed.) [arbitrators or quasi-arbitrators are exempt from civil liability for failure to exercise care or skill in the performance of their arbitral functions].) The court in Austern concluded the acts complained of were sufficiently associated with the adjudicative phase of the arbitration to justify immunity. (Austern v. Chicago Bd. Options Exchange, Inc., supra, 898 F.2d at p. 866.) We find the rationale in Austern convincing. Furthermore, we find the act of sending out the arbitral award to be in the same category as the notice and scheduling activities Austern held to be "integrally related to the arbitral process." Accordingly, we reject appellant's argument this act was administrative, and hold that sending out the arbitral award was sufficiently associated with the adjudicative phase of the arbitration to justify immunity. 1531 III. Public Policy Favors Immunity From Civil Liability for Arbitrators and Organizations Sponsoring Arbitrations. Arbitration has evolved into a favored method for the resolution of disputes. (Domke on Commercial Arbitration, supra, § 2.01.) The California Legislature has found arbitration to be an efficient method of relieving the burden on the congested court system. (Code Civ. Proc., § 1141.10.) California courts have similarly viewed arbitration with favor. (Lehto v. Underground Constr. Co. (1977) 69 Cal. App.3d 933, 939 [138 Cal. Rptr. 419] [the policy of the law is to favor arbitration]; Pacific Inv. Co. v. Townsend (1976) 58 Cal. App.3d 1, 9 [arbitration is highly favored as a method of settling disputes]; Player v. Geo. M. Brewster & Son, Inc. (1971) 18 Cal. App.3d 526, 534 [96 Cal. Rptr. 149] [one of the principal purposes which arbitration proceedings accomplish is to relieve that congestion and to obviate the delays of litigation].) Federal policy is in accord, as section 2 of the Federal Arbitration Act, 9 U.S.C. § 2, evidences a congressional declaration of a liberal federal policy favoring arbitration agreements. (Moses H. Cone Hospital v. Mercury Constr. Corp. (1982) 460 U.S. 1, 24 [74 L.Ed.2d 765, 103 S.Ct. 927]; Corbin v. Washington Fire and Marine Insurance Co., supra, 278 F. Supp. at p. 398.) This strong policy has created the need for independent judgments which are free from fear of legal action. (Corey v. New York Stock Exchange, supra, 691 F.2d at p. 1211.) Arbitral immunity furthers this need. (Ibid.) "[T]he independence necessary for principled and fearless decision-making" is best achieved by shielding persons involved in the arbitral process from "bias or intimidation caused by the fear of a lawsuit" arising out of the exercise of arbitral functions. (Id. at p. 1209.) The existence of arbitral immunity is also in part due to the resemblance of arbitration proceedings to judicial proceedings. (691 F.2d at p. 1211.) As scholarly commentary has pointed out, "although arbitration is a proceeding different from a court proceeding and the functions performed by the arbitrator are somewhat different from those of the judge, arbitration is as much an adjudicatory process as the judicial process." (Dobranski, supra, 32 Am.U.L.Rev. at p. 79, fn. 64.) This comparability in functions creates a similar necessity for independence in decisionmaking. (Corey v. New York Stock Exchange, supra, 691 F.2d at p. 1211.) Thus, it is reasonable to use arbitral immunity just as judicial immunity does in the judicial arena, to protect the decisionmaking process from reprisals by dissatisfied litigants. (Ibid.; Domke on Commercial Arbitration, supra, § 23.01; see also Baar v. Tigerman, supra, 140 Cal. App.3d at p. 982 [arbitral immunity, like judicial immunity, promotes fearless and independent decisionmaking].) 1532 Regardless, appellant alleges this rationale does not apply to the case at hand because the amount of an award is not at issue, only the act of issuing it. This act, appellant claims, should not be immune from liability. The strong public policy favoring arbitration, the facilitation of this policy by arbitral immunity, and the liberal construction of arbitral immunity persuade this court to reject appellant's argument. (Corbin v. Washington Fire and Marine Insurance Co., supra, 278 F. Supp. at p. 397; Austern v. Chicago Bd. Options Exchange, Inc., supra, 898 F.2d at p. 886.) The act of sending out the award is as much a part of the arbitral process as is determining the award. Not extending immunity for these acts to the AAA, an entity as indispensable to the arbitrator's job of arbitrating as are the courts to the judge's job of judging, would frustrate the purpose and effectiveness of arbitral immunity. (American Arbitration Assn. v. Superior Court, supra, 8 Cal. App.4th at p. 1134.) DISPOSITION The judgment is affirmed. Lillie, P.J., and Woods (Fred), J., concurred.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264452/	238 P.3d 801 (2008) CHURCHILL COUNTY FED. CREDIT UNION v. SCHWALL. No. 50261. Supreme Court of Nevada. February 27, 2008. Decision Without Published Opinion Dismissed-Stipulation.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264462/	744 A.2d 1146 (2000) 162 N.J. 375 Arthur WILDONER, Plaintiff-Respondent, v. The BOROUGH OF RAMSEY, Ramsey Police Department, Officer Kane Zuhone and Officer Brian O'donahue, Defendants-Appellants, and Helen Gannon and Margaret Diefert, Defendants. Supreme Court of New Jersey. Argued October 13, 1999. Decided January 31, 2000. 1147 Thomas A. Keenan, for defendants-appellants (Harwood Lloyd, attorneys, Hackensack; Eileen P. Kuzma, on the brief, Brooklyn, NY). Thomas L. Ferro, Ridgewood, for plaintiff-respondent. Lawrence S. Lustberg, for amicus curiae, New Jersey Coalition for Battered Women (Gibbons, Del Deo, Dolan, Griffinger & Vecchione, attorneys, Newark; Mr. Lustberg and Lori Outzs Borgen, on the brief, Brooklyn, NY). The opinion of the Court was delivered by GARIBALDI, J. Plaintiff, Arthur Wildoner, was arrested for domestic violence against his wife, Cecilia Wildoner, by Borough of Ramsey Police Officers Kane Zuhone and Brian O'Donahue. This appeal arises out of plaintiff's action against the Borough of Ramsey (the "Borough"), the Ramsey Police Department (the "Department") and Officers O'Donahue and Zuhone, under state common law and 42 U.S.C.A. Section 1983 ("Section 1983"), for false arrest, false imprisonment, mistreatment, and malicious prosecution. The central issue in this appeal is what circumstances constitute probable cause, or would justify a reasonably objective police officer in believing in the existence of probable cause, to effectuate an arrest under the Prevention of Domestic Violence Act, N.J.S.A. 2C:25-17 to -33 (the "Act" or "Domestic Violence Act"). Specifically, did police officers acting on a concerned citizen's report, supported by the officers' analysis of the totality of the circumstances, act reasonably when they arrested an alleged perpetrator even though the victim and the alleged perpetrator deny that an act of domestic violence occurred. I. Plaintiff, seventy years old at the time of his arrest, resided with his wife in the Woodlands Senior Home, a senior citizens' complex in Ramsey. On September 15, 1993, plaintiff's neighbor, Helen Gannon, reported to the apartment complex's manager, Margaret Diefert, that she had heard plaintiff using loud and abusive language and that he was threatening to throw knives at his wife. Diefert called the police. A short while later, Officers Zuhone and O'Donahue arrived at the complex in response to Diefert's complaint. The officers first spoke with Gannon and Diefert. At that time Gannon confirmed her initial report. The officers then proceeded to plaintiff's apartment, which Mrs. Wildoner allowed them to enter. The officers observed a knife on the kitchen floor and a red mark on Mrs. Wildoner's arm. The officers arrested plaintiff and wheeled him out of the apartment in a wheelchair, covered by a blanket. He was transported to the police station in an ambulance. A criminal complaint charging simple assault pursuant to N.J.S.A. 2C:12-1(a) was signed by Officer Zuhone against plaintiff. Because Cecilia Wildoner refused to sign a domestic violence complaint against her husband, Officers O'Donahue and Zuhone applied to the Ramsey Municipal Court for a temporary restraining order ("TRO") pursuant to N.J.S.A. 2C:25-21 of the Domestic Violence Act. By order dated September 15, 1993, the Municipal Court granted a TRO restraining plaintiff from going back to his home, and ordered the Wildoners to appear for a formal hearing in the Superior Court. Plaintiff was released that same day to his son, Arthur Wildoner, Jr., a Garfield police officer, who was allowed to take his father home without having to post bail. 1148 The next day, after hearing testimony from Mrs. Wildoner only, the Law Division vacated the TRO. On the order vacating the TRO, the court made a hand-written notation: "Testimony in Court. No Complaint filed by Plaintiff. Police improperly obtained TRO." The assault complaint filed in the municipal court was dismissed at the end of the State's case. On December 8, 1993, plaintiff filed a timely Notice of Claim pursuant to N.J.S.A. 59:8-4. On September 14, 1995, plaintiff filed this action against the Borough, the Department, and Officers O'Donahue and Zuhone, alleging false arrest and imprisonment, mistreatment, and malicious prosecution, in violation of his federal constitutional and state common-law rights. He also sought compensatory and punitive damages. Both Gannon and Diefert initially were also named as defendants, but plaintiff executed stipulations dismissing them both. Depositions were taken of the officers, the Wildoners and their son. The accounts of the parties differ on what occurred when the officers arrived at the Wildoners' apartment. A. The Officers' Account According to the officers, Mrs. Wildoner informed the police that plaintiff had been drinking and that an argument had ensued between them because Mrs. Wildoner did not want her husband to drive. Consistent with Gannon's report, the officers observed a knife in plain view on the kitchen floor. They also saw a red mark on Mrs. Wildoner's arm that she stated her husband had caused. Mrs. Wildoner also informed the officers that there had been a pattern of abuse throughout the forty-eight years of the couple's marriage. Plaintiff was then arrested for a domestic violence assault. The officers assisted plaintiff into a wheelchair and covered him with a blanket. Because plaintiff complained of dizziness, he was taken to the Ramsey Police Station in an ambulance. Plaintiff declined an offer from paramedics to examine him, however, indicating that he did not need medical attention. Plaintiff was charged with simple assault and released that same day to his son, Arthur Wildoner, Jr. B. The Wildoners' Account Plaintiff concedes that Gannon made a report to police claiming that she had heard plaintiff being loud and abusive and threatening to throw a knife at his wife. According to Mrs. Wildoner's deposition (which was taken in her husband's presence), however, the couple had not been arguing that day. Instead, plaintiff was, at times, "talking loud" about their grandchildren and, later, he was angry and shouting because Gannon had telephoned three times that day out of concern for Mrs. Wildoner's safety. Gannon's third call was to let Mrs. Wildoner know that she had called the police. When the police arrived, one officer told Mrs. Wildoner to wait in the bedroom; when the officer returned he indicated that they were going to arrest plaintiff. According to Mrs. Wildoner, the police had her husband's hands behind his back and he was saying, "You're hurting me, you're hurting me." Mrs. Wildoner attempted to help her husband put on his pants. In attempting to do so, she bruised her arm on the edge of a table. At some point, Mrs. Wildoner gave up trying to get her husband's pants on and the police took her husband away in a wheelchair, clad only in a t-shirt and his underwear. Mrs. Wildoner denied having told police that her husband had been drinking, slapped her with a cane, verbally abused her, or thrown a knife at her. She admitted having told police that her husband was angry. She also conceded that a knife was in plain view, but said that it was on the table, not the floor. Finally, Mrs. Wildoner testified that her husband could not possibly have beaten her "because I'd run like hell." 1149 Plaintiff, in his deposition, stated that when the police arrived, he was seated at the kitchen table tapping a knife on the table. He agreed that at one point it may have flown out of his hands and landed on the kitchen floor, but he stated that his wife was in the bedroom at that time. According to plaintiff, one of the officers said "we don't have nothing here," and was going to leave, but one officer then abruptly returned, said "I'm going to try something," read plaintiff his rights, and twisted his hands behind his back to handcuff him. Aside from trying to get his arms behind his back to handcuff him, plaintiff concedes that the police did nothing else to him physically. Moreover, although plaintiff claims the police told him that he was "bluffing" about being unable to walk, he also concedes that the police did get him a wheelchair and did not try to force him to walk. An ambulance transported him to the police station. Plaintiff, who was seventy years old, testified that he had been wounded in the knee in World War II and had never recovered the full use of his legs. For the last eight to nine years he had had trouble bending the knee and had developed arthritis in the other leg, making it difficult for him to walk. He testified that he needed a cane and it took him a long time to get out of a chair. According to plaintiff, he could not possibly have attacked his wife because "[s]he could give me a shove and that would be the end of it." In March, 1997, Arthur Wildoner, Jr. was deposed by defendants' attorneys concerning his knowledge of the incident. Wildoner, Jr., a Garfield police officer for twenty-one years, testified that at the time of the September 1993 incident, his parents had resided at the Ramsey apartment for approximately one to two years. Prior to that time, they had resided in a private residence in Garfield for approximately twenty-one years. Wildoner, Jr. worked as a Garfield police officer for about the last nineteen of his parents' twenty-one years' residence in Garfield. During that time, Wildoner, Jr. testified, the Garfield police had been called to his parents' home in connection with domestic disturbances on approximately five occasions. Wildoner, Jr. believed that the altercations were verbal and that, to his knowledge, no physical assaults had been alleged, nor any domestic violence complaints filed, in connection with any of those incidents. According to Wildoner, Jr., the verbal altercations between his parents continued after they moved to Ramsey. The Wildoners' loud arguments had given rise to complaints by other tenants and the couple had been threatened with eviction. Wildoner, Jr. also stated that, when asked what happened, plaintiff told him that "he had a fight with mommy and a couple of other choice words out of his mouth and he said they arrested me." That same evening Wildoner, Jr. asked his mother what happened. She told him that "they were fighting, he is drinking, she took his keys away and ... he threw a knife at her." Wildoner, Jr. testified that his mother had reported that plaintiff had "hit her a few times" over the years, but Wildoner, Jr. stated that he was not concerned about the altercations because his mother was in better physical condition and his father could not throw a knife "with any velocity or substance behind it." Asked whether he, in his experience responding to domestic violence complaints, would have arrested a "frail" elderly man such as his father who had reportedly assaulted a "woman that's basically strong and healthy," Wildoner, Jr. replied, "Yes. If the law states that there is a victim who claims she was assaulted with a knife that was thrown at her, whether the guy is frail or not, he was arrested for domestic violence." II. Upon the completion of discovery, defendants filed a motion for summary judgment seeking dismissal of the Complaint. In support of that motion, as required by Rule 4:46-2, defendants provided a list of 1150 material undisputed facts, and plaintiff, in opposing the motion, indicated the facts he disputed: 1. On September 15, 1993, the Ramsey Police Department received a telephone call from Margaret Diefert, Manager of Woodlands Senior Homes. 2. On September 15, 1993, Plaintiff, Arthur Wildoner, Sr. and his wife, Cecilia Wildoner, resided at the Woodlands Senior Homes Complex in Apartment 300. 3. Helen Gannon, the Wildoner's neighbor in the complex, called Mrs. Diefert to report "that Plaintiff was threatening to throw knives at his wife and was loud and abusive." 4. Officers Kane Zuhone and Ryan [sic] O'Donahue of the Ramsey Police Department were dispatched to the Woodlands Senior Homes after receiving a call from Ms. Diefert regarding the domestic situation in the Wildoners' apartment. 5. Officers Zuhone and O'Donahue consulted Ms. Diefert and Ms. Gannon before investigating the Wildoners' residence. 6. Upon the officers' arrival, Mrs. Wildoner admitted the officers into her apartment and told them that Plaintiff had been drinking, and that she did not want him to drive the car. Plaintiff denies. 7. Officers Zuhone and O'Donahue observed a red mark on Mrs. Wildoner's arm. 8. When Mrs. Wildoner was questioned about the red mark on her arm, she pointed to Plaintiff and said, "He did it to me." Plaintiff denies. 9. Mrs. Wildoner reported that he husband had thrown a knife at her. Plaintiff denies. 10. Officers Zuhone and O'Donahue observed a knife on the kitchen floor of the Wildoners' apartment. Plaintiff denies. 11. After being placed under arrest, Plaintiff was wheeled out of the apartment in a wheelchair, covered by a blanket. 12. Complaining of dizziness, Plaintiff was driven to the Ramsey Police Station in an ambulance. Plaintiff denies. 13. A criminal complaint charging simple assault (N.J.S.A. 2C:12-1a) was signed by Officer Zuhone against Plaintiff Wildoner. 14. Cecilia Wildoner refused to sign a domestic violence complaint. 15. Ramsey Police Officers applied to the Municipal Court Judge for a Temporary Restraining Order. A TRO was issued for Mrs. Wildoner's protection. 16. Plaintiff was released into the custody of his son, Arthur Wildoner, Jr., a police officer of 21 years. 17. Mrs. Wildoner told her son that her husband threw a knife at her that evening. Plaintiff denies. 18. Plaintiff never mentioned his "treatment" by the Ramsey police to his son. Plaintiff denies. The Law Division granted defendants' motion and dismissed plaintiff's complaint. The court found that the facts not in disputethat the police had acted in response to a citizen's complaint, and that when they arrived at the apartment they observed, consistent with Gannon's report, a knife in plain view and a red mark on Mrs. Wildoner's armnot only supported the officers' objective good faith but also established probable cause for them to believe that plaintiff had committed an offense. The court observed that Mrs. Wildoner's declining to sign a complaint did not preclude the officers' action; to the contrary, the court found that the Domestic Violence Act was specifically designed to protect victims in the not uncommon situation in which an alleged victim says "I don't want him out of the house." The court concluded that "[t]o deny police the right to protect citizens from injury, especially from those closest to them, would make a mockery, in my opinion, of the Domestic Violence Statute." Accordingly, 1151 the court held that defendants were immune from liability under Section 1983 and N.J.S.A. 59:2-1, 3-3, and 9-2(d). Plaintiff appealed, and the Appellate Division reversed, in part, the dismissal of plaintiff's claims. 316 N.J.Super. 487, 720 A.2d 645 (1998). The Appellate Division concluded that plaintiff raised genuine issues of material facts necessary to determine whether there was probable cause for his arrest and whether defendants were protected by good faith immunity under § 1983. Because plaintiff's claims of false arrest and false imprisonment depend on whether there was probable cause for the arrest, it was error to dismiss those claims and the claim for malicious prosecution. We affirm the dismissal of the state-law claim for damages for pain and suffering against all defendants and affirm the dismissal of the claim for punitive damages and malicious prosecution against the Ramsey Police Department and the Borough of Ramsey. [Id. at 492-93, 720 A.2d 645.] The Appellate Division held, however, that the punitive damages claims against the individual officers could go forward on remand. Id. at 508, 720 A.2d 645. The Appellate Division based its conclusion that plaintiff submitted evidence sufficient to allow a jury reasonably to find that the police lacked probable cause to arrest plaintiff principally upon the Wildoners' denials that any act of domestic violence had occurred and the differing versions of the police investigation presented by defendants and the Wildoners. For example, although defendants maintain that Mrs. Wildoner initially told police that her husband was intoxicated and had attacked her, Mrs. Wildoner denies ever making those allegations. Although police contend that Mrs. Wildoner initially told police that her husband caused the red mark on her arm, Mrs. Wildoner denies making that statement and claims she sustained the red mark by hitting her arm on the table. Although police allege that they observed a knife on the kitchen floor upon their entry into the apartment and plaintiff concedes that there might have been a knife on the floor, Mrs. Wildoner denies that a knife was on the floor and plaintiff asserts that he accidentally dropped the knife while his wife was out of the room. Id. at 499-500, 720 A.2d 645. In addition, the Appellate Division found that "plaintiff's poor physical condition was a circumstance which a reasonable police officer should have considered," noting that the Wildoners and their son all agreed that plaintiff is physically incapable of inflicting injury upon his wife. Id. at 500, 720 A.2d 645. Those factors, the court concluded, raised genuine issues of material fact regarding the existence of probable cause sufficient to preclude summary judgment. We granted defendants' petition for certification. 158 N.J. 75, 726 A.2d 938 (1999). III. This appeal arises out of plaintiff's action seeking damages under state common law and Section 1983 for false arrest, false imprisonment, mistreatment, and malicious prosecution. We first discuss plaintiff's Section 1983 claim. A. Section 1983 Section 1983 provides in pertinent part: Every person who, under color of any statute, ordinance, regulation, custom, or usage of any State ... subjects, or causes to be subjected, any citizen of the United States ... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. [42 U.S.C.A. § 1983] To establish a valid claim, plaintiff must prove that defendants acted under color of state law and deprived him of a well-established federal constitutional or statutory 1152 right. There is no dispute that the rights asserted by plaintiff are clearly established for purposes of Section 1983 or that the officers acted under color of law. Under Section 1983, even if probable cause does not exist in fact, defendants may be entitled to assert a defense of qualified immunity if they reasonably believed that probable cause existed. The Supreme Court set forth the defense of qualified (or good-faith) immunity and its purpose as follows: [W]e conclude today that bare allegations of malice should not suffice to subject government officials either to the costs of trial or to the burdens of broad-reaching discovery. We therefore hold that government officials performing discretionary functions generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known. Reliance on the objective reasonableness of an official's conduct, as measured by reference to clearly established law, should avoid excessive disruption of government and permit the resolution of many insubstantial claims on summary judgment. [Harlow v. Fitzgerald, 457 U.S. 800, 817-18, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396, 410 (1982) (citations and footnote omitted).] In Malley v. Briggs, 475 U.S. 335, 337, 106 S.Ct. 1092, 1094, 89 L.Ed.2d 271, 276 (1986), a case similar to the present case, the Supreme Court considered "the question of the degree of immunity accorded a defendant police officer in a damages action under 42 U.S.C. § 1983 when it is alleged that the officer caused the plaintiff[ ] to be unconstitutionally arrested ... [without] probable cause." The Court, concluding that an officer applying for a warrant is entitled to assert qualified but not absolute immunity, observed that the defense of qualified immunity provides ample protection to all but the plainly incompetent or those who knowingly violate the law.... Under the Harlow standard ... an allegation of malice is not sufficient to defeat immunity if the defendant acted in an objectively reasonable manner.... Defendants will not be immune if, on an objective basis, it is obvious that no reasonably competent officer would have concluded that a warrant should issue, but if officers of reasonable competence could disagree on this issue, immunity should be recognized. [Id. at 341, 106 S.Ct. at 1096, 89 L.Ed.2d at 278.] In Kirk v. City of Newark, 109 N.J. 173, 536 A.2d 229 (1988), we adopted Harlow`s "objective reasonableness" standard for determining whether law enforcement officials are entitled to the qualified immunity defense in Section 1983 actions. In that case, we found that a law enforcement official can defend a section 1983 claim by establishing either that he or she acted with probable cause, or even if probable cause did not exist, that a reasonable police officer could have believed in its existence. [Id. at 184, 536 A.2d 229.] We also recognized that the Supreme Court has interpreted Section 1983 "to limit the rights of plaintiffs and to encourage disposition of the actions as a matter of law, at least when these actions arise out of an alleged unlawful arrest, search, or seizure by a law enforcement officer." Id. at 179, 536 A.2d 229. Qualified immunity "is an immunity from suit rather than a mere defense to liability" that is effectively lost if the case is allowed to go to trial. Mitchell v. Forsyth, 472 U.S. 511, 526, 105 S.Ct. 2806, 2815, 86 L.Ed.2d 411, 425 (1985); see also Kirk, supra, 109 N.J. at 182, 536 A.2d 229 (holding that in the future we expect that similar cases will be determined by motions for summary judgment). For that reason, a defendant's entitlement to qualified immunity is a question of law to be decided early in the 1153 proceedings as possible, preferably on a properly supported motion for summary judgment or dismissal. B. N.J.S.A. 59:3-3 of the Tort Claims Act Plaintiff also claims damages under the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 to-12-3. N.J.S.A. 59:3-3 states: A public employee is not liable if he acts in good faith in the execution of enforcement of any law. Nothing in this section exonerates a public employee from liability for false arrest or false imprisonment. The same standard of objective reasonableness that applies in Section 1983 actions also governs questions of good faith arising under the Tort Claims Act, N.J.S.A. 59:9-3. Lear v. Township of Piscataway, 236 N.J.Super. 550, 553, 566 A.2d 557 (App.Div.1989); Hayes v. Mercer County, 217 N.J.Super. 614, 621-22, 526 A.2d 737 (App.Div.) (holding marked similarities between facts known about indicted man and facts known about plaintiff coupled with plaintiff's refusal to submit to photographic identification established objective reasonableness of investigator's initiating investigation against wrong man), certif. denied, 108 N.J. 643, 532 A.2d 226 (1987). C. N.J.S.A. 2C:25-22 of the Domestic Violence Act In addition to the good-faith immunity provided by the Tort Claims Act, defendants also are shielded by the specific immunity provided under N.J.S.A. 2C:25-22 of the Domestic Violence Act. Plaintiff's arrest was made pursuant to the Domestic Violence Act. Domestic violence remains a serious problem in our society. Cesare v. Cesare, 154 N.J. 394, 397, 713 A.2d 390 (1998). In Cesare, we outlined the legislative history of the Domestic Violence Act and confirmed New Jersey's strong policy against domestic violence. Id. at 398-400, 713 A.2d 390. See N.J.S.A. 2C:25-18; Preamble, L. 1994, Joint Resolution No. 2 reprinted at N.J.S.A. 2C:25-17. The purpose of the Domestic Violence Act is "to assure the victims of domestic violence the maximum protection from abuse the law can provide." N.J.S.A. 2C:25-18. The Legislature specifically addressed the need to counter prevailing societal views regarding acts of domestic violence. Ibid. The Legislature particularly sought to cure the reluctance on the part of police to arrest alleged perpetrators of domestic violence that had contributed to the underenforcement of the domestic violence laws. Ibid. Indeed, the legislative findings underlying the Domestic Violence Act assert: It is the intent of the Legislature to stress that the primary duty of a law enforcement officer when responding to a domestic violence call is to enforce the laws allegedly violated and to protect the victim. [Ibid.] As part of the Act the Legislature encouraged the training of police and judicial personnel "in the procedures and enforcement of the Act, and about the social and psychological context in which domestic violence occurs." Ibid. The Act also broadened the discretion of a police officer to arrest an alleged perpetrator, even when the victim did not corroborate the incident, provided that the officer had probable cause to believe the incident occurred. N.J.S.A. 2C:25-21(b). The purpose of this broadened authority to arrest was not to punish the perpetrator, but to protect the victim. Carfagno v. Carfagno, 288 N.J.Super. 424, 434, 672 A.2d 751 (Ch.Div.1995). With those provisions, the Legislature attempted to assure that more arrests would be made, and more victims protected, from domestic violence. To ensure protection for law enforcement officers and others who in good faith report a possible incident of domestic violence, 1154 the Legislature enacted N.J.S.A. 2C:25-22, which provides: A law enforcement officer or a member of a domestic crisis team or any person who, in good faith, reports a possible incident of domestic violence to the police shall not be held liable in any civil action brought by any party for an arrest based on probable cause, enforcement in good faith of a court order, or any other act or omission in good faith under this act.[1] [N.J.S.A. 2C:25-22 (emphasis added).] IV. Because probable cause is an absolute defense to Plaintiff's false arrest, false imprisonment, and malicious prosecution claims, and his Section 1983 claims, the central issue in this appeal is whether there was probable cause, or, alternatively, whether it was objectively reasonable for the officers to believe that probable cause existed at the time of plaintiff's arrest. Probable cause exists if at the time of the arrest "the facts and circumstances within [the officers'] knowledge and of which they had reasonably trustworthy information were sufficient to warrant a prudent man in believing that the [suspect] had committed or was committing an offense." Beck v. Ohio, 379 U.S. 89, 91, 85 S.Ct. 223, 225, 13 L.Ed.2d 142, 145 (1964), see also State v. Waltz, 61 N.J. 83, 87, 293 A.2d 167 (1972) (describing probable cause as a "well-grounded" suspicion that a crime has been or is being committed). Although it eludes precise definition, probable cause "is not a technical concept but rather one having to do with `the factual and practical considerations of every day life' upon which reasonable men, not constitutional lawyers, act." Waltz, supra, 61 N.J. at 87, 293 A.2d 167 (quoting Brinegar v. United States, 338 U.S. 160, 175, 69 S.Ct. 1302, 1310, 93 L.Ed. 1879, 1890 (1949)). Thus, "the common and specialized experience and work-a-day knowledge of police [officers] must be taken into account." State v. Contursi, 44 N.J. 422, 431, 209 A.2d 829 (1965). Moreover, "[a]bstract contemplation will not suffice because the decisions of police officers must be made on the spur of the moment and cannot be viewed fairly from the vantage point of twenty-twenty hindsight." Sanducci v. City of Hoboken, 315 N.J.Super. 475, 481, 719 A.2d 160 (1998). "The answer must instead be found `in the tumult of the streets.'" Ibid. (quoting State v. Gerardo, 53 N.J. 261, 264, 250 A.2d 130 (1969)). V. In applying those principles to this case, we recognize that in reviewing a summary judgment disposition, we must view the competent evidential materials presented in the light most favorable to the nonmoving party. Brill v. Guardian Life Ins. Co., 142 N.J. 520, 523, 540, 666 A.2d 146 (1995); R. 4:46-2(c). "Although `genuine' issues of material fact preclude the granting of summary judgment, R. 4:46-2, those that are `of an insubstantial nature' do not." Brill, supra, 142 N.J. at 530, 666 A.2d 146 (quoting Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 75, 110 A.2d 24 (1954)). Probable cause to arrest can be based on the statement of a witness or informant. Generally, some verification of an anonymous informant's disclosures of criminal activity, as well as a demonstration of his trustworthiness, are necessary in order to establish his credibility, so that such information may fairly and reasonably 1155 be assimilated as a proper basis for appropriate police action. [Sanducci, supra, 315 N.J.Super. at 482, 719 A.2d 160]. A report by a concerned citizen, however, generally has not been viewed with the same degree of suspicion that applies to a tip by a confidential informant. "Different considerations obtain ... when the informer is an ordinary citizen." State v. Davis, 104 N.J. 490, 506, 517 A.2d 859 (1986) (holding police entitled to rely as basis for investigatory stop on telephone call from member of Springfield First Aid Squad reporting that two individuals were "hanging around" closed gasoline service station at midnight and noting that officer "might well have been derelict in his duties had he not stopped and questioned the defendant"). There is an assumption grounded in common experience that such a person [a concerned citizen], in reporting criminal activity, would be motivated by factors which are consistent with law enforcement goals. Such indicia of reliability are heightened still further when the citizen provides the police with a sworn statement, thus subjecting himself or herself to potential civil or criminal liability. Here the police were not dealing with a faceless member of the criminal milieu, but instead with an ordinary citizen who claimed to be the victim of a frightening crime. The police cannot be faulted for acting upon the information received. [Sanducci, supra, 315 N.J.Super. at 482, 719 A.2d 160.] In State v. Lakomy, 126 N.J.Super. 430, 435, 315 A.2d 46 (App.Div.1974), the court explained why a "different rationale exists for establishing the reliability of named `citizen-informers' as opposed to the traditional idea of unnamed police contacts or informers who usually themselves are criminals." Information given by the criminal informant is usually given in exchange for some "concession, payment or simply out of revenge against the subject," whereas an ordinary citizen acts with "an intent to aid the police in law enforcement because of his concern for society or for his own safety. He does not expect any gain or concession in exchange for his information." Lakomy, supra, 126 N.J.Super. at 435-36, 315 A.2d 46 (quoting State v. Paszek, 50 Wis.2d 619, 184 N.W.2d 836, 842-43 (1971)). Under the circumstances of this case, the officers properly placed substantial reliance on Gannon's statement. Gannon did not phone in an anonymous tip; rather, she waited at the scene and confirmed her report to police, conduct that eventually led to her also being named as a defendant in this suit. There was no allegation that Gannon reported the incident out of any motivation other than concern for Mrs. Wildoner's safety. Moreover, because this arrest occurred "in a context where the reactive measures taken are for the limited purpose of neutralizing a dangerous situation," Lakomy, supra, 126 N.J.Super. at 436, 315 A.2d 46, the police appropriately relied on the report as a factor in their decision to arrest. That an officer may enjoy broad discretion in effecting an arrest to separate an alleged victim from an alleged perpetrator is illustrated by this Court's decision in Kirk, supra, 109 N.J. 173, 536 A.2d 229. The plaintiff in Kirk alleged that the defendant police detective had caused him to be arrested without probable cause in connection with the detective's investigation of the scalding of a three-year-old child. Kirk was arrested based on the Division of Youth and Family Service's investigation and a doctor's report that found the injuries to be "of `questionable origin.'" Id. at 176, 536 A.2d 229. A month later, the detective spoke for the first time with the doctor and requested a more detailed report. The doctor informed the detective that the burns were accidental in nature, consistent with the plaintiff's initial written statement that the burns resulted from the breaking of a 1156 bathroom sink pipe. Id. at 177, 536 A.2d 229. The Court in Kirk recognized that "[p]rior to filing the complaint, defendant made no attempt to interview either the child, the mother, Dr. Fuller or attending nurses, nor did she visit plaintiff's apartment or inquire whether photographs had been taken." Id. at 187, 536 A.2d 229. Nevertheless, the Court rejected the plaintiff's claim that Kirk was unreasonable in failing to investigate further or exercise due diligence. In so holding, the Court was "mindful ... that the investigation focused on the possibility of the scalding of a three-year-old child by a man living with the child's mother." Ibid. Under those circumstances, the Court concluded, the investigator had been objectively reasonable in promptly effecting the plaintiff's arrest. Similarly, the arrest in this case was effected for the principal purpose of removing the alleged perpetrator from the victim's presence and to allow the parties time to cool off. It is well documented that, for a number of reasons, victims of domestic violence often do not report their abuse to law enforcement officers. Many victims deny the abuse when questioned. According to estimates from National Crime Victimization Survey data, only fifty-six percent of battering incidents are reported to police. Understanding Violence Against Women 117 (Nancy A. Crowell & Ann W. Burgess, eds., 1996). Other research suggests that the reporting rate is even lower, and that as few as seven to fourteen percent of battering incidents are reported. Ibid. See also American Medical Association, When Someone You Love Hurts You, 280 JAMA 488 (1998) (estimating that as few as five percent of battered women are identified and treated by emergency department staff). Accounts of concerned citizensoften neighborswho have seen or heard domestic violence nearby, and who report it to the police, are therefore a crucial tool in combating domestic violence. Courts, too, have recognized that victims of domestic violence do not often report their abuse to law enforcement agencies. Indeed, this Court has noted "the high incidence of unreported abuse [and that]... the FBI and other law enforcement experts believe that wife abuse is the most unreported crime in the United States." State v. Kelly, 97 N.J. 178, 191, 478 A.2d 364 (1984). See also Tierney v. Davidson, 133 F.3d 189, 198-99 (2d Cir.1998) (finding police officers had acted reasonably in conducting limited search of premises of alleged domestic violence incident even though victim's statements suggested that she did not want police to pursue their investigation, the court finding that victim's statements were contradicted by neighbors' independent reports of dispute and that victim's statements were self-contradictory); United States v. Bartelho, 71 F.3d 436, 442 (1st Cir.1995) (recognizing that "the police were not required to take [the victim's] statements at face value, given her demeanor, their training regarding domestic violence, and [a neighbor's] report."). See, e.g., Lawrence W. Sherman, Policing Domestic Violence 226-230 (1992) (discussing role of neighbors in reporting and countering domestic violence in chronic cases). We find that the failure of the victim and the alleged perpetrator to corroborate the allegations did not create a material issue of fact defeating probable cause. In certain cases, lack of corroboration can defeat the reliability of an informant's tip as a basis for probable cause. In the totality of circumstances here, however, Gannon's report was sufficient. She was plaintiff's neighbor who heard plaintiff yelling and threatening to throw knives at his wife, and she reported those specific details directly to the police. Moreover, although plaintiff and his wife did not corroborate Gannon's report to the police, the police were able to corroborate adequately the details of the report through their independent investigation. It is undisputed that when the police were at the apartment, 1157 they saw a knife in plain view and a red mark on Mrs. Wildoner's arm. Combined with Gannon's report, the officers had, at a minimum, an objectively reasonable belief in the existence of probable cause. That the police acted in good faith is underscored by the fact that, unlike in Kirk, where the plaintiff remained incarcerated for four days until bail was posted, plaintiff was merely held until his son arrived to take him home, with no bail having been imposed. We find little merit in plaintiff's arguments that his physical condition precluded his being arrested because his wife, being in better physical condition, could have gotten away or physically resisted him before he inflicted any serious injury. As this Court has recognized, women in abusive situations do not always take measures to protect themselves, even when those measures appear to be self-evident and readily available. See Kelly, supra, 97 N.J. at 187, 478 A.2d 364 (recognizing admissibility of battered women's syndrome evidence). Moreover, the Wildoners have been married since 1945, and a pattern of spousal abuse could have been well entrenched by the time of this incident. Although the police officers did not know that at the time of the arrest, the deposition of Wildoner, Jr. confirms the history of abuse. "Perpetrators of domestic violence can be found in all age, racial, socioeconomic, educational, occupational, and religious groups.... They do not fit into any specific personality diagnosis." The Maryland Institute for Continuing Professional Education of Lawyers, Inc., Domestic Violence Training Manual Chap. I, § III. A. 1. (1995). As one doctor who has counseled hundreds of batterers has said: "We just can't tell the perpetrators by looking at them." Donald G. Dutton with Susan K. Golant, The Batterer 5 (1995). The simple fact of plaintiff's physical condition thus does not indicate that he could not commit an act of domestic violence. Nor does his age. In one research study, the battered women interviewed ranged in age from seventeen to seventy-six, while the batterers ranged from sixteen to seventy-six. Lenore E. Walker, The Battered Woman 31, 36 (1979). Indeed, in 1997, there were 897 domestic violence assaults reported in New Jersey against elderly individuals 60 years of age or over. New Jersey Department of Law and Public Safety, Fifteenth Annual Domestic Violence Offense Report 11 (1997). Of the 897 victims, 264 were assaulted by their spouses, and in 72% of these assaults, the victim was the wife. Id. There were also 268 reported cases of harassment by a spouse and, 69% of the time, the wife was the victim. Id. A factor crucial to determining whether the officers reasonably believed that they had probable cause here is the underlying incident of domestic violence. As a result of the Domestic Violence Act, police officers have received training in the procedures and enforcement of the Act in order to further the Legislature's intention to "communicate the attitude that violent behavior may not be excused or tolerated." N.J.S.A. 2C:25-18. See N.J.S.A. 2C:25-20 (mandating domestic violence training for police). In determining whether they have probable cause to arrest perpetrators of domestic violence, police must be able to rely on their training and knowledge of domestic violence, including the unwillingness of many victims to tell them what has happened, if the Act's goals are to be served. See Sanducci, supra, 315 N.J.Super. at 481, 719 A.2d 160 (noting that "the common and specialized experience and work-a-day knowledge of police [officers] must be taken into account" in determining whether police had probable cause) (quoting Contursi, supra, 44 N.J. at 431, 209 A.2d 829). The decision by police to arrest plaintiff was a valid judgment call that was consistent with the "no tolerance" policy of the Legislature regarding incidents of domestic violence. Indeed, if probable cause to arrest cannot be based upon the reliable report of a concerned citizen, as supported by an officer's review of the totality of the circumstances, then law enforcement officers' 1158 willingness to make such arrests may be chilled by fear of civil liability for their actions. Such a chilling effect would not further the goals of the Domestic Violence Act. The Act is remedial in nature, and "is to be liberally construed to achieve its salutary purposes." Cesare, supra, 154 N.J. at 400, 713 A.2d 390. A broad interpretation of the Act better conforms to the public policy against domestic violence and is in accordance with New Jersey's place "in the forefront of states that have sought to curb domestic violence." Brennan v. Orban, 145 N.J. 282, 299, 678 A.2d 667 (1996). VI. Given the dynamics of domestic violence and the frequency with which victims themselves do not reach out to the police for assistance, it is critical that law enforcement officers be able to rely on concerned citizens' reports of domestic violence, as verified by a review of the totality of the circumstances, in order to arrest an alleged abuser. Certainly, an officer should consider the statement of a victim when reviewing the totality of the circumstances. However, where the officers investigating an alleged incident of domestic violence observe a weapon at the scene and an injury to the victim, and where statements other than that of the victim support a belief that a domestic violence incident occurred, the law enforcement officer could reasonably conclude that there is probable cause to arrest the alleged batterer. We reverse the judgment of the Appellate Division and reinstate the order of the trial court dismissing the complaint. For reversal and reinstatement Chief Justice PORITZ, and Justices O'HERN, GARIBALDI, STEIN, COLEMAN, LONG and VERNIERO7. OpposedNone. NOTES [1] The version of this statute in effect in September 1993 did not contain the language "or any person who, in good faith, reports a possible incident of domestic violence to the police." Those words were added by L. 1994, c. 94, § 2, effective August 11, 1994. The clear intent of the amendment was to expand the immunity by enlarging the class of persons covered to include persons who report, in good faith, a possible incident of domestic violence to the police.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265378/	262 N.J. Super. 96 (1992) 619 A.2d 1332 BRAMBLEWOOD INVESTORS, LTD., PLAINTIFF AND DEFENDANT ON THE COUNTERCLAIM; THIRD PARTY PLAINTIFF ON CLAIM AGAINST MORTENSON, FLEMING, GRIZZETTI & BOIKO, v. C & G ASSOCIATES, ROBERT S. MORTENSON, RICHARD J. GRIZZETTI, JOHN A. BOIKO, DENNIS M. GAITO, KENNETH M. GOLDMANN, AND ANGELO J. COPPOLINO, DEFENDANT/COUNTERCLAIMANTS, THIRD PARTY PLAINTIFFS, BRAMBLEWOOD ASSOCIATES, LTD., UNITED CAPITAL SECURITIES, INC., UNITED CAPITAL CORPORATION, UNITED CAPITAL PROPERTIES, INC., UNITED CAPITAL INVESTMENTS, INC., POFF CONSTRUCTION, INC., PCI MANAGEMENT, INC. AND UNIVERSAL CONSTRUCTORS, INC., THIRD PARTY DEFENDANTS, MORTENSON, FLEMING, GRIZZETTI, & BOIKO, THIRD PARTY DEFENDANTS ON CLAIM ASSERTED BY PLAINTIFF BRAMBLEWOOD INVESTORS, LTD. Superior Court of New Jersey, Law Division Union County. Decided June 26, 1992. 99 Frank E. Ferruggia, and Gregory M. Dyer, for plaintiff Bramblewood (McCarter & English attorneys). Russell L. Hewit, and Daniel R. Lindemann, for defendants/counterclaimants/third party plaintiffs C & G Associates, Robert S. Mortenson, Richard J. Grizzetti, John A. Boiko, Dennis M. Gaito, Kenneth M. Goldmann, & Angelo J. Coppolino (Dughi & Hewit attorneys). Anthony Malanga, Jr., for third party defendants Bramblewood Associates Ltd., Poff Construction Inc., and PCI Management Inc. (Gaccione, Pomaco & Beck attorneys). ALLEY, J.S.C. Plaintiff Bramblewood Investors, Ltd. ("Bramblewood") seeks summary judgment for $67,358.82 as the amount allegedly due and owing on three promissory notes executed by defendant C & G Associates. At relevant times, the individual defendants were partners in C & G. On or about April 17, 1985, Bramblewood offered limited partnership interests pursuant to a Confidential Private Offering Memorandum (sometimes abbreviated as "Memorandum") to raise money for the construction and operation of an apartment complex in High Point, North Carolina. On May 22, 1985, C & G, a New Jersey general partnership, acquired three limited partnership interests in Bramblewood, executing the promissory notes which are the subject of plaintiff's complaint. C & G allegedly defaulted on the notes in May 1989. 100 The defendants filed a counterclaim and third party complaint against Bramblewood and others alleging misrepresentation and breach of duty. They further claim that Bramblewood failed to register the offering of limited partnership interests as allegedly required by the New Jersey Bureau of Securities. Defendants also submit that they have the right to rescind the transaction because United Capital Securities Inc. (an affiliate of United Capital Investment Inc., the general partner of Bramblewood) did not register as an "agent" under the New Jersey Uniform Securities Law. For the reasons that follow, plaintiff's motion for summary judgment is granted in all respects, dismissing defendants' affirmative defenses and counterclaims. The summary judgment motion of the third party defendants involves essentially the same issues and is granted for the same reasons. Defendants' motion for summary judgment is denied in all respects. I. Defendants' counterclaim is barred by the statute of limitations. Any claim that Bramblewood was required to register the offering of limited partnership interests under N.J.S.A. 49:3-60(b) is time-barred by N.J.S.A. 49:3-71(e).[1] Under the "discovery rule", the time to file suit is triggered when the plaintiff "learns, or reasonably should learn, the existence of a state of facts that may equate in law with a cause of action." Vispisiano v. Ashland Chem. Co. 107 N.J. 416, 426, 527 A.2d 66 (1987). (citations omitted). The purpose of the rule is to "... avoid harsh results that otherwise would flow from mechanical application of a statute of limitations." Id. N.J.S.A. 49:3-71(e), as amended in 1986, provides in pertinent part that: 101 "No person may sue under this section more than two years after the contract of sale, or within two years of the time when the person aggrieved knew or should have known of the existence of his cause of action, whichever is later." Defendants here knew as early as the Spring of 1985 that the Bramblewood offering was not registered with federal or state securities authorities. The cover page of the Confidential Private Offering Memorandum states: The offer and sale of limited partnership interests covered by this confidential private offering memorandum have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended ... or the securities authorities of other states, pursuant to the securities laws of other states, pursuant to the securities laws of ... such other states, in reliance upon certain exemptions from registration under such laws. Under the "Investment and Inducement" letter signed by Angelo Coppolino, a partner of C & G, "[t]he undersigned acknowledges being informed by the Issuer that the securities being purchased... are unregistered." Mr. Coppolino's execution of those documents in the partnership name binds C & G and its partners (N.J.S.A. 42:1-9, "[e]very partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership ..."). Moreover, C & G's partners explicitly authorized Mr. Coppolino to act as representative and signator on behalf of the partnership. Significantly, Mr. Coppolino admits that he read and signed the Investment and Inducement letter. Coppolino dep., T92:9-24. From the record presented, the court finds that no genuine issue of fact exists on the question whether defendants knew (or should have known) that the limited partnership offerings were unregistered. It is indisputable that they were aware of a "... state of facts which may equate in law with a cause of action" when the Memorandum was reviewed and the Investment and Inducement letter was signed by Mr. Coppolino in 1985. Vispisiano, 107 N.J. at 426, 527 A.2d 66. Applying 102 N.J.S.A. 49:3-71(e), the statute of limitations ran in 1987, because defendants knew or should have known of the existence of a cause of action, if any, when the relevant documents were reviewed and signed in 1985. Two years after defendants had the knowledge necessary to equate in law with a state of facts upon which a cause of action could be based, they still had not asserted their claims, which are thus time-barred. Defendants' reliance on Petruzzi v. Kobrin, 241 N.J. Super. 439, 575 A.2d 80 (Law Div. 1989), is mistaken. In Petruzzi, plaintiff filed a securities fraud action on February 9, 1987, based on a transaction that occurred on or before July 30, 1984. Defendant moved to dismiss certain claims as barred by the two-year statute of limitations of N.J.S.A. 49:3-71(e) prior to its amendment. The transactions took place prior to the effective date of the discovery rule and the complaint was filed over two and one-half years after the transaction. The court, however, stated, "This amendment occurred before plaintiff's time to file under the original time period had run," and that "the timeliness of this filing is measured as of when a cause of action became known or should have become known to plaintiff." Id. at 442, 575 A.2d 80. Accepting, arguendo, the reasoning of Petruzzi as binding here, defendants have still failed to show that their claims are saved by the discovery rule. The discovery rule, under N.J.S.A. 49:3-71(e), became effective April 9, 1986. Even if the court were to apply the discovery rule as of April 9, 1986, defendants still did not assert a claim until October 4, 1990, or well after the two-years allowed by the statute had expired. And if the timeliness of a filing is measured from the date a cause of action became known (as Petruzzi suggests), defendants nevertheless are unable to establish the basic premise on which the discovery rule is grounded, their unawareness of a state of facts upon which to state a cause of action. Defendants claim the existence of facts that could have been equated in law with a cause of action. They failed to do so, and thus any claim they assert for violation of the state securities laws is barred by N.J.S.A. 49:3-71(e) for 103 failure to file suit within the applicable two-year statute of limitations and any discovery rule which may apply thereto. II. Even if defendants' counterclaim was not in all respects barred by the statute of limitations, defendants' claims and defenses based on alleged violations of the Uniform Securities Law are without merit. In 1985, when the Bramblewood offering was made, N.J.S.A. 49:3-60(b) provided that an offering or sale of securities need not be registered with the Bureau of Securities if: the security or transaction is not subject to, or is exempted from, the registration requirements of the Securities Act of 1933 and the rules and regulations thereunder; other than by reason of section 3(a) of such act and the rules and regulations under said section 3(a). It is beyond legitimate dispute that the Bramblewood offering was exempt from the registration requirements of the 1933 Act by reason of Sections 3(b) and 4(2). The offering was made in accordance with Rules 505 and 506 of Regulation D, 17 C.F.R. § 230.501 et. seq. Rule 505 requires that the aggregate offering price of the offering not exceed $5,000,000.00. 17 C.F.R. § 230.505(b)(2)(i). The cover page of the Memorandum plainly states that the Bramblewood Offering consisted of 45 interests priced at $52,000.00 each, for an aggregate price of $2,340,000.00. The rule further requires that the issuers reasonably believe that there are not more than 35 purchasers of the securities. 17 C.F.R. § 230.505(b)(2)(ii). In calculating the number of purchasers, "accredited" investors are not included. 17 C.F.R. § 230.501(e)(1)(iv). Plaintiff, in its "Notice of Sales of Securities pursuant to Regulation D or Section 4(b)" (filed with the SEC), indicates that 11 of the investors were "accredited" and the remaining 29 were "un-accredited," making the total number of investors for the purposes of § 230.505(b)(2)(ii) well under 35. Thus, plaintiff complied with the requirements of Rule 505. Plaintiff's offering was also exempt under Rule 506, 17 C.F.R. § 230.506. That provision places no ceiling on the 104 aggregate offering price, but limits the number of purchasers to 35 and requires that the issuer reasonably believe immediately prior to making any sale that "each purchaser who is not an accredited investor either alone or with his purchaser representative(s) has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment." 17 C.F.R. § 230.506(b)(2)(ii). The proof shows that plaintiff made this determination with respect to each unaccredited investor who invested in Bramblewood. Defendant has offered no contradictory proof sufficient to create any fact issue. Under § 230.502(b), certain information, which under 17 C.F.R. § 230.501 through 503 should be furnished to unaccredited investors prior to sale, must be supplied to all Bramblewood investors. Under § 230.502(c), the issuer may not offer or sell its securities through any form of general solicitation or advertising. The uncontradicted proofs established that plaintiff complied with this requirement. Plaintiff met the requirements of both rules 505 and 506 at the time of the offering and was exempted from federal registration requirements. Since Bramblewood qualified for exemption under federal law, it was also exempted by N.J.S.A. 49:3-60(b) from the registration requirements of the New Jersey Uniform Securities Law. Defendants' attempt to find technical deviations from the requirements of the applicable Regulation D exemptions in an effort to create a material issue of fact is futile because, even if such a deviation were found to exist, the offering would still be exempt by reason of Section 4(2) of the 1933 Act, which exempts "transactions by an issuer not involving any public offering." 15 U.S.C. § 77d(2). See Preliminary Note 3 to Regulation D, 17 C.F.R. § 230.501 et seq. The facts outlined above and set forth fully in the record entitle plaintiff to this statutory exemption as well. There is absolutely no evidence 105 before the court in this case that this was anything but a private offering. III. It is irrelevant whether sales were made to New Jersey Investors by "unregistered agents". Defendants assert they are entitled to rescission and damages pursuant to N.J.S.A. 49:3-71(a)(1) because the Bramblewood offering involved sales to New Jersey investors, who are not parties to this case, through an unregistered agent in alleged violation of N.J.S.A. 49:3-56(a). Even accepting these allegations as true, and even assuming for the moment that they are not time-barred, the facts presented by defendants in support of these allegations are not material because they have no nexus to the defendants' claim. Defendants argue that a United Capital representative in North Carolina was required to register as an agent under New Jersey law. They claim that a meeting took place in New Jersey at which a prospective investor (a Mr. Anton) and a purported United Capital representative were both present. The United Capital representative allegedly spoke at this meeting, but no selling of the security or offer of sale there was established.[2] 106 The Uniform Securities Law applicable to agent registration requirements shows that the only activities at all relevant to a determination of the provisions' applicability are those activities engaged in by a person selling or offering to sell securities in the State of New Jersey. N.J.S.A. 49:3-56(a) provides as follows: It shall be unlawful for any person to act as a broker-dealer, agent or investment advisor in this State unless he is registered under this act; (emphasis added). Similarly, N.J.S.A. 49:3-51(a) provides: Sections 5, 8, 9(a) [49:3-56], 13 and 24 of this act apply to persons who sell or offer to sell when (1) an offer to sell is made in this State, or (2) an offer to buy is made or accepted in this State; (emphasis added). The activities which defendants allege violated New Jersey law occurred in North Carolina, not in New Jersey, and thus did not involve a violation of New Jersey law, contrary to their assertions.[3] IV. Defendants have admitted there are no facts to support their counterclaims and third party complaint. Defendants assert without factual support numerous claims, including that plaintiff and the third-party defendants 107 made material misrepresentations in connection with the subject offering; that these parties inflated real estate and rental values to induce C & G's investment; that excessive fees were paid by and between these parties for various services rendered in connection with the offering; and that certain agreements entered into between these parties were not negotiated at "arm's-length". The assertion that these are material facts that preclude summary judgment against defendants is completely without merit, as is shown by defendants' own testimony. Defendants admitted in depositions, for example, to having no knowledge of any misrepresentations on the part of plaintiff or any third party defendant at the time of the offering.[4] With respect to the other claims in defendants' counterclaim and third-party complaint and the allegations that certain unidentified agreements between entities involved in the offering were not negotiated at "arm's-length," and that excessive fees were paid to entities involved in the offering, defendants also admitted lack of knowledge, and the evidence showed without contradiction that defendants' claims and defenses in this action are groundless.[5] 108 V. Defendant's other claims and defenses are meritless. Defendants further assert (1) that the Memorandum falsely states that the offering is registered in New Jersey, and (2) that they were not informed of an alleged "glut" in the relevant North Carolina housing market at the time of their purchase of interests in Bramblewood. Defendants claim that these alleged misrepresentations and omissions entitle them to rescind their purchase of interests in Bramblewood. But as indicated earlier, the evidence indisputedly shows that defendants were aware that the offering was not registered in New Jersey. Indeed the sixth page of the "Cover Page" in the Offering Memorandum, contains the following statement: FOR NEW JERSEY RESIDENTS; THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. THE FILING OF THE WITHIN OFFERING WITH THE BUREAU OF SECURITIES DOES NOT CONSTITUTED [SIC] 109 APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OR THE DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. There is no genuine factual basis for concluding that the quoted language amounts to an affirmative representation that the offering was registered in New Jersey.[6] As a matter of law, its plain purpose is to notify prospective investors that any filing of the offering with state securities authorities does not constitute approval or endorsement of any kind by those authorities. Indeed, the clause, by its very language, alerts the potential investor to the risks associated with the investment. There can be no genuine material fact to support the claim that the plaintiff misrepresented that the offering was registered in New Jersey based solely on the language just quoted, in light of the overwhelming number of disclosures in the Offering Memorandum itself, as well as other documents which the defendants reviewed prior to purchase, that the offering was not registered in any state. The cover page of the Memorandum explicitly states in capital letters that: THE OFFER AND SALE OF LIMITED PARTNERSHIP INTERESTS COVERED BY THIS CONFIDENTIAL PRIVATE OFFERING MEMORANDUM HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED ... OR THE SECURITIES AUTHORITIES OF OTHER STATES, PURSUANT TO THE SECURITIES LAWS OF ... SUCH OTHER STATES, IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION UNDER SUCH LAWS. (emphasis added). Page 4 of the Cover page states that: 110 BECAUSE THESE SECURITIES ARE BELIEVED EXEMPT FROM REGISTRATION UNDER FEDERAL LAWS AND STATE LAWS, THEY HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY STATE COMMISSION AND HAVE NOT BEEN APPROVED OR DISAPPROVED BY ANY SUCH COMMISSION. (emphasis added). The Memorandum explained that "the Partnership is offering the Interests in reliance upon certain exemptions from registration and qualification requirements of federal and state securities laws." (Id. at page 1-1). Page 15-2 of the Memorandum recites that: As to the distribution of these partnership interests, each investor must understand and acknowledge the following: (i) that the interests being offered hereby are not being registered under any federal or state securities law by virtue of applicable registration exemptions ... The Investment and Inducement Letter given to each investor shows that "[t]he undersigned acknowledges being informed by the Issuer that the securities being purchased ... are unregistered." (pgs. 3-7, 1st ¶ 3.) Finally, the Purchaser Questionnaire given to each investor states that "the Interest(s) will not be registered under the [1933] Act or under any such state securities laws." (pg. E-16, 1st ¶ .) These uncontradicted disclosures preclude as a matter of law defendants' assertion that the plaintiff misrepresented the fact of registration. Moreover, under the civil liabilities section of the New Jersey Uniform Securities Law, relied upon by defendants in this action, the defendants must prove that the plaintiff intended to deceive the defendants by its inclusion of the subject provision. See N.J.S.A. 49:3-71(a). Defendants have offered no proof concerning fraudulent intent of plaintiff in including the subject language in the Memorandum. (Defendants do not explain why, if plaintiff intended to deceive New Jersey investors into believing that the offering was registered, it included so many disclosures to the contrary.) The defendants did not, moreover, rely upon any representation that the offering was registered when making their 111 investment decision, and they have affirmatively admitted that they knew the security was unregistered. Defendant Angelo Coppolino, C & G's authorized representative for purposes of the Bramblewood purchase, acknowledges being informed at the time of purchase that the securities were unregistered. Coppolino dep. 12/17/91, T92:9-24. There is no fact issue to the contrary.[7] 112 VI. Summary: Based on the facts and reasons set forth above, plaintiff's motion for summary judgment, and the motion for summary judgment by third party defendants, are granted in all respects. Defendant's cross-motion for summary judgment is denied in all respects. NOTES [1] The court need not determine, for the purposes of this motion, whether to apply the current version of N.J.S.A. 49:3-71(e) or the version in existence prior to 1986. The court will apply the discovery rule (as defendant submits must be done). [2] Defendants refer in some detail to a trip to North Carolina by two non-party investors (Messrs. Anton and McCarthy) to view the Bramblewood property and to meet with this United Capital representative. A "sales pitch" allegedly was utilized by this individual in North Carolina, and defendants state that the three New Jersey investors' investment decisions were not made until after the "full pitch." The witnesses indicate that this North Carolina meeting and the information it yielded caused the three investors to invest. Mr. McCarthy stated that as a result of the discussion with the United Capital representative in North Carolina, three New Jersey investors were made more informed and confident about the investment. Messrs. Anton, Madalone, and McCarthy decided to purchase interests in Bramblewood as a result of this visit to North Carolina. Mr. Anton, after the short meeting with a United Capital representative in New Jersey, was uncertain whether to invest in Bramblewood because he was not satisfied with the information he had received about the investment. Only after meeting with the representative in North Carolina, visiting the subject property, and meeting an on-site manager did he decide to invest in Bramblewood. [3] It is also dispositive that none of defendants' assertions about the United Capital representative's alleged activities with the other investors has anything whatsoever to do with sales to defendants. Defendants assert that liability attaches by operation of law to sales of securities transacted in violation of the state securities law, citing Cola v. Terzano, 129 N.J. Super. 47, 57, 322 A.2d 195 (Law Div. 1974), and that a single sale by an unregistered agent constitutes a violation of the statutes requiring registration of participants. See Carrousel North, Inc. v. Chelsea Moore Co., 9 Ohio App.3d 344, 460 N.E.2d 316 (1983). But if defendants' assertions were factual, and anyone were thereby entitled to rescission, the plaintiffs would be Anton and McCarthy, not the defendants in this case. Defendants lack standing to assert this claim because the governing statute, N.J.S.A. 49:3-71(a)(2), makes the seller liable "to the person buying the security from him." Plainly and simply, defendants cannot assert this wrong allegedly done to another. They have no claim under the statute for sales by an unregistered broker because they did not purchase from one. [4] The court outlined this testimony in detail in its original opinion filed June 26, 1992, but these facts can be summarized as follows in this abbreviated and revised version of that opinion, rather than being set forth at length. [5] Furthermore, the evidence showed that all relevant information concerning defendants' claims was fully disclosed to defendants in the offering Memorandum which they received prior to purchasing interests in Bramblewood. For example, the fees which the United Capital entities were to receive for services rendered in connection with the offering were set forth in the Memorandum. In addition, the document plainly discloses that certain agreements and fees negotiated by the entities involved in the offering would not be negotiated at arm's length. Significantly, any claim by defendants that they were in some way "duped" into investing in Bramblewood is in stark contrast to their own participation in the Memorandum's preparation. The partners of C & G Associates, defendants herein, are also partners in the accounting firm that prepared the report of financial forecasts for Bramblewood which forms part of the Memorandum. In preparing this report, defendants evaluated the reasonableness of Bramblewood's financial forecasts with respect to the investment and concluded that these forecasts were reasonable, and after reviewing the reasonableness of Bramblewood's forecasts in connection with their accounting engagement, the defendants concluded that Bramblewood was a "sound investment". It is indisputable that, as accountants retained by Bramblewood to perform this function, defendants were privy to more information about the investment than the typical investor. Their decision to invest in Bramblewood was based on the knowledge they acquired in their capacity as accountants retained by Bramblewood as well as upon their own review of the offering Memorandum in their capacity as private investors, and in fact, the evidence made plain that defendants' accounting firm had worked with United Capital on several other private offerings prior to its engagement on the Bramblewood deal. The extent of defendants' knowledge with respect to Bramblewood and the United Capital entities is demonstrated by the following testimony of Mr. Coppolino: Q. Was any one particular partner of C & G charged with doing due diligence on Bramblewood or were all of you, basically, looking into it? A. We relied on Dick Grizzetti because he had all the information on Bramblewood. He had been involved in a few other deals that the promoter or the broker/dealer was responsible for. So he was familiar with the scenario as far as the real estate investment, how it was formed, the two-tier partnership, all the inner workings of how these deals came to be. Coppolino dep. 12/17/91, T30:14-24. [6] Bramblewood and the other parties who have filed these motions against defendants are also entitled to summary judgment with respect to C & G's claims under N.J.S.A. 56:8-2, because the Consumer Fraud Act does not apply to the sale of securities. See Stella v. Dean Witter Associates, 241 N.J. Super. 55, 75, 574 A.2d 468 (App.Div.), certif. denied, 122 N.J. 418, 585 A.2d 412 (1990) (Consumer Fraud Act was not intended to create a cause of action for fraud in connection with the sale of securities.) [7] Defendants also claimed that plaintiff omitted material facts in not disclosing that there was an alleged "glut" or oversupply of apartment units in the North Carolina market. But they are faced with their complete failure to prove that there was, in fact, any materiality to such a statement. Plaintiff contends that defendants have offered no competent evidence to prove that the alleged "glut" actually existed. Without that proof, there could not have been any misrepresentation. (Interestingly, the same person not one of the parties to this action to whom the "glut" statement allegedly was made, actually purchased his interest. That would be surprising, to say the least, if the "glut" statement had been made, was true, and was believed by the non-party to be true.) Undisputed evidence showed the lack of materiality of this statement, even assuming that there was a scintilla of evidence that a "glut" existed in the relevant market area. First, the prospective investor to whom the statement was made bought his interest anyway. The "glut" statement, moreover, did not occur until after defendants had already agreed to purchase their interests. In addition, these factors, combined with the inside knowledge of defendants, and the other evidence on the motion, establish beyond dispute that defendants did not genuinely rely on any alleged misstatements. The evidence on these issues was examined at length in the court's original opinion and will not be repeated at length here. It will suffice to say that the abundance of disclosures in the Offering Memorandum, combined with the admissions in defendants own testimony by which they are bound, show as a matter of law the lack of reliance on the alleged misstatements, and show that the defendants were fully aware of the risks associated with this investment. No competent evidence has been proffered to overcome these compelling facts and show either reliance, or the materiality of any purported "glut" of apartment units in the North Carolina market was hidden from the defendants, even assuming defendants had established a scintilla of evidence as to a "glut". Proof of materiality, of reliance, and thus of fraud, are absent as a matter of law. (Of course, even the persons on whom defendants rely so heavily do not raise a genuine fact issue that there was actually a "glut" in the market in North Carolina at the time of the Bramblewood offering. The opponent of a motion for summary judgment "... must set forth specific facts showing there is a genuine issue for trial." R. 4:46-5(a). Defendants have failed to do so and, moreover, are bound by their witness's admission that he was not told there was a "glut". The mere allegation that one unidentified individual may have made some statements which may amount to a misrepresentation, unsupported by any other evidence, and which in any event was not material, is insufficient to preclude the granting of summary judgment at this juncture.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349029/	172 Ariz. 74 (1992) 834 P.2d 160 In the Matter of the APPEAL IN MARICOPA COUNTY JUVENILE ACTION NO. JV-123196. No. 1 CA-JV 91-051. Court of Appeals of Arizona, Division 1, Department C. May 28, 1992. 75 Richard M. Romley, Maricopa County Atty. by Gaye E. Cochran, Deputy County Atty., Phoenix, for appellee. Dean W. Trebesch, Maricopa County Public Defender by John W. Melvin, Deputy Public Defender, Phoenix, for Juvenile. KLEINSCHMIDT, Judge. The appellant, a juvenile, was adjudicated delinquent for committing an aggravated assault in violation of Ariz. Rev. Stat. Ann. ("A.R.S.") § 13-1204(A)(8). He raises two issues on appeal: (1) whether the evidence was sufficient to prove that he was the assailant; and (2) whether the facts will support a finding that the assault was aggravated because it was committed upon one whose capacity to resist was substantially impaired. We hold that the identification evidence was sufficient but that the assault was not aggravated because, even if the victim was substantially impaired, whatever impairment occurred was the result of the assault and did not exist before the assault began. FACTS The victim, himself a juvenile, was riding his bicycle near his home when he heard another bicycle approaching him from the rear. As the victim turned to look, the approaching rider, who was on a blue bicycle, sprayed him in the face with an unknown substance contained in a canister. The victim closed his eyes in time to avoid most of the spray, but a small amount of the spray entered one eye, causing tears to form. He also felt a burning sensation on the skin around the eye. The victim rode a little further and then stopped. The assailant ordered him to get off his bicycle, and when the victim refused, the assailant sprayed him again on the other side of the face, again causing tears to form and a burning sensation around the eye. The victim feared that the assailant was going to beat him up and take his bicycle. Although his vision was blurred which made it difficult to ride, the victim rode fast for home. He was followed for a short distance by the assailant, who broke off the chase when the victim tried to flag down a passing motorist for help. The victim went home and flushed his face with water. Within a half hour of the assault, he and his mother began driving around the neighborhood looking for the assailant. The victim told his mother that the assailant was wearing a white T-shirt with black polka dots on it, that he had a yellow ribbon tied around his wrist, and that he was riding a blue bicycle. The victim and his mother spotted the juvenile dressed as described and riding a blue bicycle. They stopped and asked what he had sprayed in the victim's face. The mother saw a white canister in the juvenile's pocket and asked him what it was. The juvenile denied having anything, and he rode away on his bicycle. The victim and his mother were unable to follow him. Later that same day, they again saw the juvenile on the blue bicycle when they were on the way to the grocery store. Within a week of the incident, the victim again saw the juvenile at school and learned his name from friends. During the same week, the victim's mother also saw the juvenile standing in front of a house with some other boys. The victim's mother supplied the police with the juvenile's name and the address of the house where he had been seen, and the police arrested the juvenile. Ten days after the assault, the victim identified the juvenile from a photo lineup. The defendant was charged with an act of delinquency. The juvenile judge found that the juvenile was the assailant and that 76 the assault was aggravated because it had been committed upon a person whose capacity to resist had been substantially impaired. THE PROOF OF IDENTITY WAS SUFFICIENT The juvenile argues that the evidence does not prove beyond a reasonable doubt that he was the assailant. Citing Neil v. Biggers, 409 U.S. 188, 93 S. Ct. 375, 34 L. Ed. 2d 401 (1972), he lists the factors to be considered in evaluating the reliability of an identification: (1) the opportunity of the witness to view the criminal at the time of the crime; (2) the degree of the witness' attention; (3) the accuracy of the witness' prior description of the criminal; (4) the level of certainty demonstrated by the witness at the confrontation; and (5) the length of time between the crime and the confrontation. An analysis of these factors leads to the conclusion that the identification of the juvenile as the perpetrator in this case was entirely adequate. The juvenile makes much of the argument that the victim was very upset by the attack and that if the victim's vision was blurred to the point that his ability to resist was substantially impaired, he could not have seen the juvenile well enough to identify him later. These arguments are not particularly convincing. The victim got a good look at the juvenile between the first and second time he was sprayed in the face. He described how his assailant was dressed, and he described the bicycle he was riding. When, shortly after the assault, the victim and his mother saw someone matching that description, they both had an opportunity to observe the juvenile for several minutes. They both saw the juvenile several times in the following week, the victim picked him out of a photo lineup, and both the victim and his mother made a positive identification at trial. The identification evidence, far from being infirm, was solid. THE FACTS DO NOT CONSTITUTE AN AGGRAVATED ASSAULT Assault, in Arizona, may be committed in three different ways. The statute, A.R.S. § 13-1203 provides: A. A person commits assault by: 1. Intentionally, knowingly or recklessly causing any physical injury to another person; or 2. Intentionally placing another person in reasonable apprehension of imminent physical injury; or 3. Knowingly touching another person with the intent to injure, insult or provoke such person. The juvenile was charged under A.R.S. § 13-1204(A)(8) with aggravated assault. That statute reads: A. A person commits aggravated assault if such person commits assault as defined in § 13-1203 under any of the following circumstances: .... 8. If such person commits the assault while the victim is bound or otherwise physically restrained or while the victim's capacity to resist is substantially impaired. The juvenile has a dual argument with respect to the application of the aggravated assault statute. He says that the impairment that occurred here was slight, not substantial. He also says that the legislature did not intend "to make an assault aggravated, if in the course of a fight, one party simply gains the upper hand." The Arizona statute appears to be unique, so it is not surprising that neither we nor the parties have found many decisions discussing the precise question that this case presents. We begin with an analysis of State v. Barnett, 101 Ariz.Adv.Rep. 100 (App. Nov. 29, 1991), a case recently decided by Division Two of this court. In Barnett, the victim was sitting outside his office waiting for someone to come and install his telephone. He was approached by the defendant and another man who asked him for the time. When the victim answered, the two men began to walk away. Almost immediately, the defendant 77 turned and hit the victim in the eye with his fist. The victim dropped to his hands and knees in order to get away, and he felt one of the men, later identified as the defendant, on top of him. The victim began to feel a series of electrical shocks on his chest and on his back from what later proved to be a stun gun. The victim tried to stand up and the defendant called to his confederate for help. The confederate began striking the victim from behind. The victim grabbed the defendant and threw him against a car and at this point, both assailants fled. Two of the three judges who considered Barnett held that this conduct constituted an aggravated assault pursuant to A.R.S. § 13-1204(A)(8). They were of the opinion that the victim's testimony supported a finding that the victim was physically restrained when the assault occurred. The specific testimony they relied on was as follows: I was hit and I dropped down on my hands and knees. And one of them was on top of me. I was being I don't know. I thought this gun was underneath my heart and it kept kept hitting up underneath my heart. And I kept feeling like an electrical shock. .... And I struggled, tried to get up. The dissenter in Barnett, Judge Fernandez, reviewed the testimony and considered the evidence regarding stun guns. He noted that a "take down situation" requires that the person against whom the stun gun is used be held while that device is applied to the proper muscle tissues for two to eight seconds. When this is done, the person will be disoriented for up to fifteen minutes. Simply thrusting the device against a person would not be disorienting. Judge Fernandez concluded that the victim in Barnett was not substantially impaired. He went on to conclude that the victim had not been "otherwise restrained," saying: I believe the use of the word "or" in the statute reflects the legislative intent that the physical restraint required be roughly equivalent to the restraint that exists when a victim is bound. .... I believe that the statute requires something more substantial than the momentary restraint that occurred in this case before a class 1 misdemeanor can be elevated to a class 6 felony. We agree with Judge Fernandez. We see neither a restraint, nor a substantial impairment of the victim in Barnett. That case, however, does not, in discrete terms, address one of the arguments which the appellant in the case before us raises that the legislature did not intend to raise a simple assault to an aggravated assault whenever one combatant gained the upper hand. We will address that argument, but we turn first to the question whether the evidence will support the conclusion that the victim was substantially impaired. A. The Victim Was Substantially Impaired The juvenile argues that the victim's capacity to resist was not impaired because he successfully fled from his assailant. The state contends that fleeing from an attack is not an act of resistance. We give the words of a statute their usual and commonly understood meaning. State v. Korzep, 165 Ariz. 490, 493, 799 P.2d 831, 834 (1990). The dictionary defines "substantial," among other things, as "considerable." Websters New World Dictionary, Second College Edition, at 1420 (1982). "Impair" means "to make worse, less, weaker, etc.; damage; reduce." Websters at 703. Thus to be substantially impaired is to be considerably weakened. "Capacity" is the "ability ... to do something," Websters at 209, and "resist," among other things, means to "refuse to submit to." Websters at 1210. We believe that the ability to flee from a situation is included in the concept of capacity to resist. Notwithstanding that conclusion, and notwithstanding that the victim was able to escape, we do not believe that the juvenile commissioner abused her discretion in finding that the victim's capacity to resist was substantially impaired in this 78 case. We will not reweigh the evidence to decide if we would reach the same decision as did the trier of fact. See State v. Williams, 132 Ariz. 153, 157, 644 P.2d 889, 893 (1982). We consider the evidence in the light most favorable to sustaining the verdict, and all reasonable inferences are resolved against the juvenile. See State v. Romanosky, 162 Ariz. 217, 782 P.2d 693 (1989). The evidence clearly showed that after he was sprayed the second time, the victim's vision was blurred to the point where it was difficult for him to ride his bicycle. The fact that he did escape may bear on the degree of impairment, but it is not determinative. B. The Statute Does Not Apply Because the Impairment Did Not Exist Before the Assault Began, and It resulted from the Assault We doubt that the legislature intended that every assault, whether mutual combat or otherwise, that does not cease the instant one party achieves the upper hand constitutes an aggravated assault. We will not give the statute that effect. An ambiguity in a penal statute should be resolved in favor of the defendant. See State v. Pena, 140 Ariz. 545, 549-550, 683 P.2d 744, 748-49 (App. 1983), approved and adopted, State v. Pena, 140 Ariz. 544, 683 P.2d 743 (1984). The reference in the statute to an assault occurring while the victim is bound or physically restrained refers to conditions that would normally preexist an assault, and not to a condition or conditions which occur as a result of the assault. The present statute replaced A.R.S. § 13-245 (1959) (repealed) which provided that an assault was aggravated "when committed by a person of robust health or strength upon one who is decrepit." Decrepitude, like binding or restraining, is a condition that normally exists before an assault begins. See State v. Mendibles, 25 Ariz. App. 392, 543 P.2d 1149 (1976) (to be decrepit is to be disabled, incapable, or incompetent from physical or mental weakness or defect). Of course, binding or otherwise restraining a person against that person's will would be an assault in and of itself, either because such might place the victim in reasonable apprehension of imminent physical injury or might be a touching with an intent to injure. When bonds or restraints or their functional equivalents, like a spray in the face that seriously interferes with the ability of the victim to resist, are used, the statute necessarily contemplates that other assaultive conduct must follow. If such conduct does follow, the assault is an aggravated one. If there is no follow-up, the assault, in the absence of other factors that might raise it to such, would not be aggravated. This is not to say that substantial impairment must always preexist the beginning of an assault before the provisions of A.R.S. § 13-1204(A)(8) apply. For example, if during the course of an ongoing assault the assailant bound the victim, or for that matter sprayed the victim in the eyes with a blinding substance, so that the victim could not resist, and the assailant then committed an additional assault, the assailant would be guilty of a violation of the statute. Here, however, the essence of the assault was the use of the spray. The victim testified that only a little of the first spray got in his eye, and although it blurred his vision, he could still see well out of his other eye. The first spray cannot be said to have substantially impaired the victim, and even if the second spray did substantially impair him, the assault was essentially over at that point. We have considered whether the juvenile's having chased the victim for a short distance after spraying him for the second time might be the kind of follow-up assault that will bring the aggravated assault statute into play. We conclude that it is too closely tied to the original assault, and too fleeting, to serve that purpose. The adjudication of delinquency is affirmed but modified to reflect that it is based upon the commission of assault, a class 1 misdemeanor, instead of upon aggravated 79 assault, a class 6 felony. The disposition of the juvenile court is affirmed. EUBANK, Acting P.J., and HAIRE, J. (retired),[] concur. NOTES [*] NOTE: The Honorable Levi Ray Haire, Retired, was authorized to participate in this appeal by the Chief Justice of the Arizona Supreme Court pursuant to Article 6, Section 20 of the Arizona Constitution and Ariz. Rev. Stat. Ann. § 38-813.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348642/	221 Ga. 353 (1965) 144 S.E.2d 522 McCAIN v. SMITH, Warden. 23138. Supreme Court of Georgia. Argued September 15, 1965. Decided September 22, 1965. Edward T. M. Garland, Reuben A. Garland, Jr., for appellant. ALMAND, Justice. This is an appeal from a judgment refusing to discharge the appellant from the custody of the appellee, Warden of Stone Mountain State Prison Branch, after a hearing on his petition for the writ of habeas corpus. The record discloses that: appellant James A. McCain, Jr., on an accusation issued from the Civil and Criminal Court of DeKalb County pleaded guilty of the misdemeanor offense charged therein; on April 26, 1965, he received a sentence of 12 months to be served on probation, the conditions being that he would not "violate any Federal or State penal statutes or municipal ordinances." After a notice and hearing his service of the sentence on probation was revoked on May 19, 1965, and he is now in the custody of the respondent warden by virtue of the sentence of April 26, 1965. The accusation under which the appellant was sentenced charged that he did on July 31, 1963, "unlawfully, and with force and arms draw, tender and utter a certain bank check of the following tenor and effect, to wit: First National Bank of Atlanta Pay to the Order of DeKalb-Chrysler-Plymouth Eighteen Hundred & Thirty-Six Dollars $1836.00 Dollars, signed James A. McCain and having drawn said check did thereby tender and obtain from DeKalb-Chrysler-Plymouth a certain lot of merchandise, and/or cash, he, the said James A. McCain not then and there having sufficient funds in, or credit with, The First National 354 Bank of Atlanta to pay said check upon presentation, contrary to the laws of said State, the peace, good order and dignity thereof." The accusation purports to charge an offense under Code Ann. § 13-9933 (Ga. L. 1962, p. 593). That Code section in substance provides: "Any person, who with intent to defraud, shall obtain any money, goods, or other property of value, or who shall pay any obligation for wages or salary, by making, drawing, uttering, or delivering any check, draft, or order for the payment of money on any bank or other depository, knowing at the time of such making, drawing, uttering or delivery that the maker of such check, draft, or order has either no funds or insufficient funds on deposit in or credit with such bank or other depository with which such check, draft, or order and all other checks, drafts, or orders upon such funds or credit then outstanding, may be paid in full on presentation" shall be guilty of a misdemeanor (emphasis supplied). It has been held that the essential gravamen of this offense is uttering a check in the manner there provided and that it be done with the intent to defraud. Berry v. State, 153 Ga. 169 (111 S.E. 669, 35 A.L.R. 370). In McCard v. State, 54 Ga. App. 339, 340 (187 S.E. 850) it was held: "One of the essential elements in an offense of the character it was sought to allege is `the intent to defraud.' In fact, the `intent to defraud' is the very gravamen of the offense, and a failure to allege it is fatal. The accusation in this case set forth no offense against the defendant." While a plea of guilty admits the averment of facts in the accusation and waives any defects therein in matters of form and not jurisdictional, such plea does not prevent the defendant from asserting that the facts alleged in the accusation do not constitute a crime. Hilliard v. State, 87 Ga. App. 769, 773 (75 SE2d 173) and cases cited therein. The accusation failing to allege scienter and intent to defraud, it failed to charge the appellant with an offense under Code Ann. § 13-9933 and was void. A person who is held in custody by reason of his conviction under an accusation which fails to charge an offense against the laws of this State may secure his release by habeas corpus. 355 McDonald v. Sowell, 129 Ga. 242 (58 S.E. 860, 12 AC 701); Tollison v. George, 153 Ga. 612 (3) (112 S.E. 896); Riley v. Garrett, 219 Ga. 345 (2) (133 SE2d 367). The appellant being entitled to discharge for the above reason it is not necessary to pass upon the several other grounds which he claims rendered his sentence illegal and void. Judgment reversed. All the Justices concur, except Mobley, J., not participating for providential cause.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348652/	67 Wash. App. 132 (1992) 834 P.2d 39 THE STATE OF WASHINGTON, Respondent, v. DAVID WAYNE HOFFMAN III, Appellant. No. 11481-3-III. The Court of Appeals of Washington, Division Three. July 21, 1992. 133 Mary E. Schultz and Mary E. Schultz & Associates, P.S., for appellant. Donald C. Brockett, Prosecuting Attorney, and Kevin M. Korsmo, Deputy, for respondent. MUNSON, J. David Hoffman III, appeals the order terminating his probation on September 26, 1990. He contends his probation was terminated by an order and certificate of discharge entered on October 22, 1987. On August 28, 1985, Mr. Hoffman pleaded guilty to two charges: third degree statutory rape committed on June 30, 1984 (count 2); and indecent liberties, committed in November 1984 (count 1). He was sentenced on October 14, 1985. The two convictions were imposed under a single cause number and contained in a single charging document; each sentence indicated it was to be served concurrently with the other. Because the third degree rape was committed prior to July 1, 1984, the effective date of the Sentencing Reform Act of 1981 (SRA), Mr. Hoffman's sentence for the conviction on count 2 was governed by RCW 9.95. RCW 9.94A.905. He received a deferred sentence and was placed on 5 years' probation. As to count 1, indecent liberties, Mr. Hoffman was sentenced to 5 months' partial confinement and 2 years' community supervision pursuant to the sentencing option for sex offenders, former RCW 9.94A.120(7)(a), under the SRA. On October 22, 1987, the court entered a "Certificate and Order of Discharge" discharging Mr. Hoffman as required by the SRA, RCW 9.94A.220. The discharge indicated the cause number and did not state that it was limited to the indecent liberties sentence imposed under the SRA. In August 1990, the State alleged Mr. Hoffman had violated the terms of his probation on the statutory rape conviction 134 and obtained a bench warrant. Mr. Hoffman moved for release, contending he had been discharged from both sentences by the 1987 discharge. The court ultimately found there had been no violation and, on September 26, 1990, entered an order terminating Mr. Hoffman's 5-year probation. Mr. Hoffman moved for reconsideration because the effect of the 1990 order was to reject his claim that the 1987 discharge had been effective as to both counts. The court denied his motion for reconsideration and ordered him to register under the sex offender registration statutes, RCW 9A.44.130-.140. Mr. Hoffman has appealed the 1990 order. Mr. Hoffman contends his 5-year probation on the pre-SRA charge was terminated by the certificate and order of discharge entered pursuant to RCW 9.94A.220 on October 22, 1987.[1] Discharge from sentences for crimes committed after July 1, 1984, is governed by RCW 9.94A.220: When an offender has completed the requirements of the sentence, the secretary of the department or his designee shall notify the sentencing court, which shall discharge the offender and provide the offender with a certificate of discharge.... A certificate of discharge is not based on a finding of rehabilitation.[[2]] This statute is applicable only to sentences imposed under the SRA. See Addleman v. Board of Prison Terms & Paroles, 107 Wash. 2d 503, 730 P.2d 1327 (1986); In re Blair, 38 Wash. App. 670, 688 P.2d 532 (1984). [1, 2] The termination of probation imposed for crimes committed prior to July 1, 1984, is governed by RCW 9.95.230: The court ... may at any time, when the ends of justice will be subserved thereby, and when the reformation of the probationer shall warrant it, terminate the period of probation, and discharge the person so held. *135 The court retains jurisdiction to revoke or modify probation until an order terminating probation is entered. State v. Holmberg, 53 Wash. App. 609, 611, 768 P.2d 1025 (1989). An express order of termination is required. See State v. Alberts, 51 Wash. App. 450, 754 P.2d 128, review denied, 111 Wash. 2d 1006 (1988). The 1987 order makes no mention of Mr. Hoffman's probation and thus cannot be construed as terminating it. When an information contains a pre-SRA and a post-SRA charge, the court should not use the "boiler-plate" form for the certificate of discharge. The certificate of discharge should, at least, denote the particular charge being discharged. Affirmed. SWEENEY and WEBSTER, JJ., concur. NOTES [1] Mr. Hoffman has not assigned error to that portion of the order requiring him to register as a sex offender. [2] Mr. Hoffman's claim the 1987 discharge signifies his rehabilitation and thus implies termination of his probation is thus belied by the language of the statute.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348649/	221 Ga. 229 (1965) 144 S.E.2d 96 BROOKS et al. v. HOOKS et al. 23001. Supreme Court of Georgia. Argued June 14, 1965. Decided July 14, 1965. Rehearing Denied July 29, 1965. 230 Spivey & Carlton, Milton A. Carlton, John J. Spivey, for plaintiff in error. Rountree & Rountree, W. E. Rountree, contra. GRICE, Justice. This is a controversy over financing the purchase and feeding of chickens for egg production. It took the form of litigation when a petition was filed in the Superior Court of Emanuel County by Donald J. Hooks and others, trading as the Farmers Feed & Pelleting Company (hereinafter referred to as the plaintiff company), against Ralph M. Brooks, Master Feed and Grain Company, Inc. (hereinafter designated as the Grain Company), and McMillen Feeder Finance Corporation (hereinafter denominated as the Finance Company). The petition sought cancellation of two chattel mortgages and notes, injunction against their transfer or enforcement, damages, and general relief. Upon the overruling of general and special demurrers of the defendants, the trial court, by agreement of the parties, considered the verified petition and answers as evidence and temporarily enjoined the defendants from transferring the mortgages and notes and from attempting to enforce their collection. None of the special demurrers raised any issue as to duplicity. Error is assigned upon the overruling of the demurrers and the grant of the injunction. The petition, insofar as material here, made the allegations which follow. The plaintiffs are engaged in selling feed and other such products. The defendant Brooks is an agent of the defendants Grain Company and Finance Company. The Grain Company is an agent of the Finance Company. 231 In late 1962 or early 1963 Brooks requested that the plaintiff company act as dealer for the Grain Company and the Finance Company's chicken feed, in accordance with a plan, already in effect with others, substantially as follows. Brooks would find farmers with facilities to feed and care for laying chickens and would outline to them a plan whereby a dealer would furnish financing for putting chickens in the houses and feeding them until they began production. The farmer would execute to the dealer a chattel mortgage on the chickens and a note. When production began the dealer would receive 80% of the egg proceeds until the chickens and the feed were paid for, and after such payment all of the proceeds would go to the farmer. As between the dealer and the defendants, the plan was that, when Brooks found farmers who agreed to go into the transaction, he would obtain a financial statement from them and submit it to the Finance Company. If the latter approved the farmer's credit, Brooks would prepare an open-end chattel mortgage and note for a specified amount per chicken and have it executed by the farmer. The note and mortgage would then be transferred by the dealer to the Finance Company which would, upon receipt of them and an invoice showing that the chickens had been delivered to the farmer, send the dealer the proceeds for the note. These proceeds were actually payment for the chickens and some of the feed. Payments on the note would be scheduled so that the Finance Company would be repaid from the first eight months of egg production. The Grain Company would furnish to the dealer, on a 30 day account basis, the concentrate to be used in the feed sold to the farmer. If the farmer was still indebted to the dealer after the dealer paid the note to the Finance Company, it would transfer the note and mortgage back to the dealer. Under this program the dealer was never to own the chickens involved. After studying this program and discussing it at length with Brooks, the plaintiffs decided to undertake it. A number of farmers agreed to participate, some of whom were accepted by the Finance Company and some were turned down. Notes and mortgages as previously outlined were prepared for those accepted; 232 however, Brooks insisted that plaintiffs sign the notes and mortgages as well as the assignment and endorsement of them to the Finance Company. All of those contracts have now been paid out. In early March 1963, Brooks advised Hooks, one of the plaintiffs, that the contracts of J. L. Cowart and E. L. Campbell had been approved and asked Hooks to sign their chattel mortgages and notes, although they had not been filled out. Hooks, having confidence in Brooks and expecting him to fill out and process these as before, signed the blank chattel mortgages and notes and turned them over to Brooks for him to complete as he had the previous ones. Soon afterward the chickens were delivered to Cowart and Campbell and the plaintiff company began furnishing feed as they had in other contracts. In June 1963, Hooks told Brooks that the plaintiffs needed additional financing. A few days later Brooks reported to Hooks that the Finance Company had approved additional financing on the Cowart and Campbell contracts and again asked Hooks to sign blank mortgages and notes, stating that he would get them finished and turn them in to the Finance Company. Several days later plaintiffs received specified amounts on the Cowart and the Campbell chickens, and plaintiffs assumed that Brooks had processed these mortgages and notes as he had indicated and that Cowart and Campbell had signed as principals. In late July 1963, plaintiff company received a notice from the Finance Company outlining payments due on the Cowart and Campbell contracts and noticed that the farmer listed was the plaintiff company and the dealer was the Grain Company. This was the plaintiffs' first indication of trouble with the Cowart and Campbell contracts. Hooks immediately contacted Brooks and called this situation to his attention. Brooks stated that there was nothing to worry about, that it was merely some sort of mixup in the Finance Company's office and he would see that it was straightened out. In August the Cowart and Campbell chickens went into production and the plaintiffs began making the payments called for under the contracts. In early 1964 the plaintiff company found for the first time 233 that the chattel mortgages and notes on the Cowart and Campbell contracts had been made out by Brooks from the plaintiff company to the Grain Company, and had been transferred by the latter to the Finance Company. Plaintiffs later learned that the invoices for the chickens had been altered by Brooks to show that the plaintiff company had purchased the chickens and that its name had been forged on the invoices showing their delivery. Brooks admitted these alterations and forgeries. As soon as the plaintiff company learned of this situation, the Finance Company's credit manager, Hooks and Brooks went to the Cowart farm to discuss this situation with him. There, Cowart's father stated that after Hooks' and Brooks' original talk with Cowart, Brooks had returned alone; that on such later occasion Brooks told Cowart that "they" were now in position to offer another program whereby the farmer would receive 20% of the egg proceeds for caring for the chickens and collecting and processing the eggs; that the farmer would not be liable in any way for the chickens or the feed therefor; and that this was the understanding that Cowart had with Brooks as to his contract. At the time of the foregoing conversation plaintiffs had a larger investment in the Cowart chickens than did the Finance Company since they had been furnishing the feed and had been turning over most of the egg proceeds to the Finance Company, believing that it held a note signed by Cowart as farmer. Thereafter, however, the plaintiff company credited all the egg proceeds to its own account for the Cowart chickens' feed. The same situation was experienced as to the Campbell chickens. The plaintiff company kept insisting to Brooks and the Finance Company's credit manager that some explanation be given for the way these two contracts were handled since it was contrary to their understanding. But no reasonable explanation was ever given. The chickens under these two contracts continued to produce, but little more than the current feed bill. Finally, in August, it was agreed by Hooks, the Finance Company's credit manager, Brooks and another person of the defendant group that the Cowart 234 art and Campbell chickens be sold and the contracts paid out. They were sold, but it took all of the proceeds from the Campbell chickens and most of those from the Cowart chickens to pay the Campbell contract. The balance was applied to the Cowart feed indebtedness to the plaintiff company, leaving a balance of $8,483.39 due it on feed delivered to the Cowart chickens. The defendants have defrauded and deceived the plaintiff company, have made misrepresentations of material facts wilfully to deceive it, have suppressed material facts which were known to the defendants and which they were under an obligation to communicate to the plaintiff company, have altered and forged instruments in connection with their dealings with it, all as hereinbefore fully set forth, and as a result of said actions, the plaintiff company has been damaged in the full amount of the actual loss sustained by it, $8,483.39. The defendants have denied that they are indebted to the plaintiff company in any amount and the Finance Company is now calling upon the plaintiff company to pay the balance due on the notes represented by the Cowart contract, which amount they contend to be $15,210.25. The mortgages and notes in connection with the Cowart contract, as finally filled out by Brooks, are in the defendants' possession and their production upon the hearing in this case is called for. Such notes are null and void and unenforceable because of the facts surrounding their execution, as hereinbefore alleged. The prayers of the petition included recovery of $8,483.39 as actual damages sustained; cancellation of the chattel mortgages and notes in connection with the Cowart contract; temporary and permanent injunction against transferring or attempting to enforce the notes or chattel mortgages; and general relief. Besides general and special demurrers, each defendant filed an answer denying the material allegations of the petition. The recount of events in these answers was diametrically opposed to that of the petition. Each answer denied any fraud whatever and averred that the plaintiffs, not Campbell or Cowart, were primarily liable on the contracts and were liable for the unpaid balance. In the view which we take of the case it is not necessary to make further reference to the answers. 235 1. While the defendants urge several principles in support of their general demurrers, we need deal with only the one which follows. "Where a party who is entitled to rescind a contract on ground of fraud or false representations, and who has full knowledge of the material circumstances of the case, freely and advisedly does anything which amounts to a recognition of the transaction, or acts in a manner inconsistent with a repudiation of the contract, such conduct amounts to acquiescence, and, though originally impeachable, the contract becomes unimpeachable in equity. If a party to a contract seeks to avoid it on the ground of fraud or mistake, he must, upon discovery of the facts, at once announce his purpose and adhere to it. Otherwise he cannot avoid or rescind such contract." Gibson v. Alford, 161 Ga. 672 (5) (132 S.E. 442). See also Manning v. Wills, 193 Ga. 82 (3), 90 (17 SE2d 261). The picture made by the petition is certainly not a pretty one. But, assuming that conduct amounting to fraud appears, repudiation of it is conspicuously absent. There is no allegation that after discovery of the conduct they charge to be fraudulent, the plaintiffs ever repudiated it. On the contrary, the allegations show acts of the plaintiffs which are inconsistent with repudiation. First, in July 1963, the notice from the Finance Company outlining payments due on the Cowart and Campbell contracts listed the plaintiff company, instead of Cowart and Campbell, as the farmer and showed the Grain Company, rather than the plaintiff company, as the dealer. The plaintiffs were content with assurance from Brooks, upon whom they had no right to rely, that this was due to a "mixup" in the Finance Company office and that he would get it straightened out, and they started making the payments called for under the contracts. This state of affairs continued for at least six months. Then, in early 1964, plaintiffs learned as a positive fact that the chattel mortgages and notes on the two contracts had been made out from the plaintiff company to the Grain Company, instead of from Cowart and Campbell to the plaintiff company, and that Brooks had altered the invoices to show that the plaintiff company, not Cowart and Campbell, had purchased the chickens and also had forged the plaintiff company's name *236 thereon to show delivery to it. Consequently, plaintiffs then knew that both of these contracts had been handled by Brooks in a manner different from the plan outlined to the plaintiffs. But, instead of repudiating the transactions and having no further part in them, plaintiffs merely "kept insisting that some explanation be given" for the way these two contracts were being handled. They were given no reasonable explanation but took no repudiatory action. Finally, in August 1964, it was agreed by the plaintiff Hooks, the defendant Brooks, and the defendants' credit manager that the Cowart and Campbell chickens be sold and the proceeds applied toward paying out the Campbell contract, and this was done. This action by the plaintiffs was inconsistent with repudiation. It evidenced that the plaintiffs recognized their liability to the defendants under the chattel mortgages and notes which they now seek to have canceled on the ground of fraud. The allegations of this petition call for application of the rule requiring repudiation as stated in the Alford case, 161 Ga. 672, supra. (a) There being no repudiation of the conduct charged as fraudulent, the petition fails to allege a cause of action for cancellation, injunction or any other equitable relief. (b) Under the facts alleged, discussed above, the petition does not set forth a cause of action for damages representing the unpaid feed balance on the Cowart contract. Whether or not the plaintiffs' failure to take any repudiatory action upon learning of the defendants' fraudulent conduct constituted a waiver of that fraud so as to bar their right to damages, certainly their subsequent active participation in the selling of the chickens was such a waiver. "If the defrauded party, with knowledge of the fraud, does an act in ratifying or affirming the contract which shows his intention to abide by the contract as made, with the fraud in it, and thus waives the fraud, he can not afterwards set up the fraud and recover damages therefor." Tuttle v. Stovall, 134 Ga. 325, 329 (67 S.E. 806, 20 AC 168). 2. Since the petition did not set forth a cause of action for any of the relief sought, it afforded no basis for the interlocutory injunction. Judgment reversed. All the Justices concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348667/	144 S.E.2d 272 (1965) 265 N.C. 431 John ANDERSON, Jr., Employee, v. LINCOLN CONSTRUCTION COMPANY, Employer, and United States Casualty Company, Carrier. No. 120. Supreme Court of North Carolina. October 13, 1965. 274 Hamilton, Hamilton & Phillips, by Luther Hamilton, Morehead City, for plaintiff appellant. Marshall & Williams, by Lonnie B. Williams, Wilmington, for defendant appellees. HIGGINS, Justice. The Commission found the claimant had suffered a total temporary disability by accident arising out of and in the course of his employment and awarded compensation upon the basis of the finding. The employer and its compensation carrier challenged the finding and the award upon the sole ground the evidence is insufficient to show causal relationship between the claimant's accident and his injury. The Superior Court sustained the challenge and reversed the award. The appeal requires this Court to review the evidence and to determine, not what the evidence proves or fails to prove, but to find whether the Commission had before it any competent evidence sufficient to support its finding. The claimant admitted a history of osteomyelitis and an operation therefor about 10 years prior to his accident. Admitting the history, nevertheless, he testified he had worked as a crane operator for at least five years prior to October 3, 1963. "I haven't been to a doctor, haven't been sick a day, haven't been out of work a day and I have worked an average of 40 to 45 hours a week for the last five years. I haven't been able to do anything since the accident." Dr. Gainey, while guarded about what caused the disability, found the claimant entered the hospital the day following the accident, stated he had been in an accident. The doctor found contusions and bruises of the left hip and to less extent of his right hip and of his right lateral chest wall, "and was not able to perform any type of employment." May we say the Commission did not have before it any competent evidence showing causal connection between the accident and the injury? The Workmen's Compensation Act, G.S. § 97-86, vests the Industrial Commission with full authority to find essential facts. The Commission is the sole judge of the credibility of the witnesses and the weight to be given their testimony. The courts may set aside findings of fact only upon the ground they lack evidentiary support. Blalock v. City of Durham, 244 N.C. 208, 92 S.E.2d 758; Creighton v. Snipes, 227 N.C. 90, 40 S.E.2d 612. The court does not have the right to weigh the evidence and decide the issue on the basis of its weight. The court's duty goes no further than to determine whether the record contains any evidence tending to support the finding. Brice v. Robertson House Moving, Wrecking and Salvage Co., 249 N.C. 74, 105 S.E.2d 439. Of course, where there is no evidence of causal relationship between the 275 accident and injury the claim must be denied. Or, if the disability is due to pre-existing physical injuries, it must be denied. But where the evidence is conflicting, the Commission's finding of causal connection between the accident and the disability is conclusive. Tucker v. Lowdermilk, 233 N.C. 185, 63 S.E.2d 109. In this case the evidence was sufficient to support the finding. Hence the Superior Court committed error in vacating the award of temporary disability. The Superior Court will remand the cause to the Industrial Commission for further disposition as the law requires. Reversed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348673/	489 N.W.2d 233 (1992) In re the Petition for DISCIPLINARY ACTION AGAINST William D. SCHUTTER, an Attorney at Law of the State of Minnesota. No. C2-89-1260. Supreme Court of Minnesota. September 21, 1992. ORDER In an order dated November 16, 1989, this court indefinitely suspended William D. Schutter from the practice of law for Schutter's admitted neglect of nine medical malpractice cases and several other litigation matters. In that order, this court held that Schutter could not petition for reinstatement before July 1, 1991, and that Schutter could apply for reinstatement at that time only upon a showing that he had satisfied a number of conditions imposed by the court. On July 10, 1991, Schutter served and filed his petition for reinstatement in this matter. The Director of the Office of Lawyers Professional Responsibility then commenced an investigation pursuant to Rule 18, Rules on Lawyers Professional Responsibility. Upon completion of the Director's investigation, this matter came on for hearing before a Panel of the Lawyers Professional Responsibility Board. On August 24, 1992, the Panel filed its Findings of Fact, Conclusions and Recommendation in this matter in which the panel concluded, among other things, that Schutter has undergone a sufficient moral change to be reinstated to the practice of law and was remorseful for the harm he had caused his clients. The panel recommended that this court reinstate Schutter and place him on supervised probation for a period of 2 years, subject to certain restrictions. The Director concurs with the panel's recommendation and the parties request that this court decide this matter without briefing or further proceedings. In consideration of the Director's Report and Conclusions of Investigation, the Panel's Findings of Fact, Conclusions and Recommendation, and the filings and record herein, IT IS HEREBY ORDERED: 1. That the petition for reinstatement to the practice of law of William D. Schutter hereby is granted subject to the following conditions: a. With regard to the clients Schutter deceived and/or whose files Schutter neglected, Schutter shall make diligent efforts to contact each client and provide the client and/or the client's affected family members a copy of this reinstatement order. b. With regard to the clients Schutter deceived and/or whose files Schutter neglected, Schutter shall make payments to each client in an amount equal to the greater of (1) $2,000 or (2) the out-of-pocket expenses incurred by the client attributable to Schutter's misconduct, including but not limited to the cost of counseling, attorney fees to review and evaluate the neglected case, and expert witness evaluation fees. If Schutter and his clients cannot agree on the amount of out-of-pocket expenses, Schutter shall submit the matter to mediation and/or binding arbitration in accordance with the panel's recommendation. The payments described herein shall not preclude or affect any civil claim the clients may have against Schutter. c. Until further order of this Court, Schutter shall not represent clients in the areas of medical malpractice, personal injury, products liability, or related areas. d. Until further order of this Court, Schutter shall not engage in the solo practice of law. e. Schutter shall maintain malpractice insurance. 2. That, upon reinstatement, Schutter shall be placed on supervised probation for 234 a period of 2 years subject to the following conditions: a. Schutter shall be supervised by a licensed Minnesota attorney, appointed by the Director to monitor compliance with the terms of this probation. Schutter shall provide to the Director the names of four attorneys who have agreed to be nominated as Schutter's supervisor within 2 weeks from the date of this order. If, after diligent effort, Schutter is unable to locate a supervisor acceptable to the Director, the Director shall appoint a supervisor. Until a supervisor has signed a consent to supervise, Schutter shall provide, on the first day of each month, an inventory of active client files to the Director as is described below. Schutter shall make active client files available to the Director upon request. b. Schutter shall cooperate fully with the supervisor in the supervisor's efforts to monitor Schutter's compliance with this probation. Schutter shall contact the supervisor and schedule a minimum of one inperson meeting per calendar quarter. Schutter shall submit to the supervisor an inventory of all active client files by the first day of each month during probation. With respect to each active file, the inventory shall disclose the client name, type of representation, date opened, most recent activity, next anticipated action, and anticipated closing date. The supervisor shall file written reports with the Director at least quarterly, or at such more frequent intervals as the Director reasonably may request. 235	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348672/	221 Ga. 307 (1965) 144 S.E.2d 339 FIELDS v. THE STATE. 23021. Supreme Court of Georgia. Submitted July 12, 1965. Decided September 9, 1965. Rehearing Denied September 22, 1965. Aaron Kravitch, John J. Sullivan, John Wright Jones, for plaintiff in error. Andrew J. Ryan, Jr., Solicitor General, Andrew J. Ryan, III, Arthur K. Bolton, Attorney General, Rubye G. Jackson, Assistant Attorney General, contra. ALMAND, Justice. The defendant, Rufus L. Fields, was tried in the Superior Court of Chatham County for the murder of his wife. The jury returned a verdict of guilty with a recommendation 308 of mercy and the trial judge sentenced the defendant to life imprisonment. His amended motion for new trial having been overruled, the defendant brings his case to this court for review, assigning error on the overruling of this motion. 1. It was not error to overrule the general grounds of the motion for new trial. The undisputed evidence showed that: the defendant was found in the room with his wife's body; the wife had been shot and killed with a rifle which was on the floor; the defendant stated to several persons that he had shot and killed his wife. On the trial of the case the defendant did not deny the killing, but instead based his defense on insanity at the time of the shooting. Several expert witnesses who testified for the defendant stated that he was insane at the time of the shooting. There was no positive testimony as to the sanity of the defendant at the time of the shooting. However, under the ruling in Boyd v. State, 207 Ga. 567 (63 SE2d 394) the jury is free to reject the testimony of expert witnesses as to the sanity of the accused and rely instead on the presumption of sanity. Under this ruling the jury could properly find that the defendant was sane even though there was no positive testimony to that effect. There was evidence to support the verdict and the court did not err in overruling the general grounds of the motion for new trial. 2. In grounds 1 and 2 of the amended motion for new trial it is urged that the court erred in admitting and refusing to strike a portion of the testimony of Dr. A. H. Center, a psychiatrist who testified that the defendant was insane. The testimony in question was elicited from Dr. Center on cross examination and consisted of statements made by the defendant to Dr. Center in the course of his examination of the accused. It is the contention of the defendant that the admission of this testimony violates Code Ann. § 38-418 (5) (Ga. L. 1959, p. 190) which provides that communications between psychiatrist and patient are privileged. Although testimony of this nature is privileged, we are of the opinion that the privilege was waived when the defendant called the doctor as his witness and questioned him as to the mental condition of the accused. In 8 Wigmore, Evidence (McNaughton rev. 1961) § 2390 (2), p. 861, 309 it is said: "To call a physician to the stand, and examine him as a witness to one's physical condition formerly communicated to him, is a waiver of the privilege in regard to all of his knowledge of the physical condition asked about. No reasoning could maintain the contrary." See also 58 Am. Jur. 254, § 450 and 97 CJS 863, § 310 (d). The rule applies to mental condition as well as to physical. By calling the doctor as his witness and allowing him to testify as to the mental condition of the accused the defense waived the right to object to relevant cross examination of the doctor on the ground that such matter was a privileged communication between patient and psychiatrist. It is also urged that the testimony of the doctor as to statements made by the defendant to him was hearsay and thus inadmissible in evidence. This contention is lacking in merit. The statements of the accused were admissible, not for the purpose of establishing the truth or falsity of such statements, but for the purpose of determining the basis of the expert witness' opinion. Moreover, the testimony which the defendant seeks to strike out was favorable to him as it tended to support his claim of insanity. 3. In ground 3 it is urged that the court erred in failing to charge the jury on the burden of proof necessary to convict when the case is dependent on circumstantial evidence. In Bowen v. State, 181 Ga. 427, 429 (182 S.E. 510) it was held that the failure to instruct on circumstantial evidence is not error where the defendant admits shooting the deceased. In the case at bar the defendant told several people shortly after the shooting that he had shot his wife. Under the ruling in Bowen v. State, supra, this was direct evidence of the guilt of the accused, and there being direct evidence, the court did not err in failing to charge the jury on the law relating to circumstantial evidence. 4. In ground 4 of the amended motion it is alleged that the court erred in charging the jury on incriminatory statements. The portion of the charge about which defendant complains is as follows: "If you find further that at the time of such alleged admissions were made he was laboring under a mental condition that caused him to be hazy and uncertain in his actions and 310 inability to comprehend the nature of his actions, then in such case you would have the right either to reject said admissions or to give them only such weight or credit under the circumstances as they then existed." The defendant contends that this charge led the jury to believe that they could believe the incriminating statements even though they found that he did not have the mental capacity to comprehend the nature of his statements. We agree that the charge was unclear and could affect the jury as contended by the defendant. However, we do not think the charge was reversible error under the facts in this case. The defendant's only defense was insanity; no claim was made that he did not shoot his wife. In a case of this nature, where the accused in effect admits the killing and bases his defense on insanity, erroneous instructions by the trial judge as to the weight to be given defendant's statements that he shot the deceased are not harmful, the statements being only evidence of what the accused already concedes. 5. In ground 5 of the amended motion it is contended that the court erred in admitting photographs of the scene of the killing and of the dead woman into evidence. The defense contends that the only purpose of these photographs was to inflame the passions of the jury since they had already admitted those things shown by the photographs and that the photographs were prejudicial to the accused. The photographs are not made a part of the record. Therefore we have no way to determine whether the photographs were prejudicial. It is well settled that this court cannot consider a ground of a motion alleging that certain photographs tended to prejudice the jury when the photographs are not made a part of the motion. See Darden v. State, 208 Ga. 599 (68 SE2d 559) and cases there cited. It is simply impossible to determine the effect of photographs without seeing them. 6. In grounds 6, 8 and 9 of the amended motion it is urged that the court erred in refusing to give certain requested charges. The charge requested in ground 6 was not strictly correct in its terms. Therefore, the refusal to give this charge is not grounds for a new trial. Hunter v. State, 133 Ga. 78 (2) (65) SE 154). 311 The charges requested in grounds 8 and 9 were charges on delusional insanity. There being no evidence in the record that the defendant was the victim of delusional insanity, the court did not err in refusing to give these charges. 7. In grounds 7, 10 and 11 error is assigned because the judge refused to charge the jury that the defendant could not be found guilty if the killing was due to accident or misfortune. None of the evidence supported a theory of accident or misfortune. Therefore, since the requested charge was not supported by the evidence, the court did not err in refusing to give it. 8. In ground 12 error is assigned because the court refused to charge the jury as follows: "However, where the question is whether the defendant had the mental capacity to possess the intention to kill and that the killing was not due to a joint union of act and intent, then in such case the burden to prove that fact would be upon the State and not upon the defendant." This charge is not a correct statement of the law and the court properly refused to give it. The presumption is that all men are same and no burden of proof rests upon the State to establish this fact. The burden of proof is on the defendant to prove insanity and not on the State to prove sanity, as was stated in the requested charge. Rozier v. State, 185 Ga. 317, 319 (195 S.E. 172); Barker v. State, 188 Ga. 332, 335 (4 SE2d 31). 9. In grounds 13 and 14 of the amended motion error is assigned on the court's refusal to charge the jury on voluntary and involuntary manslaughter. There was no evidence to support a theory of voluntary or involuntary manslaughter. This being true, the court did not err in refusing to give the requested charge. 10. In the final ground of the amended motion the defendant claims that the court failed to charge the jury that the burden of proof was upon the State. This contention is lacking in merit. The judge instructed the jury as follows: "I charge you that the defendant entered upon the trial of this case with the presumption of innocence in his favor, and that presumption remains with him throughout the trial of the case, until it is shown by competent evidence that he is guilty to a moral *312 and reasonable certainty and beyond a reasonable doubt." In Claybourn v. State, 190 Ga. 861 (2) (11 SE2d 23), and Swint v. State, 203 Ga. 430 (5) (47 SE2d 65) it was held that this was an adequate charge on burden of proof. The court did not err in overruling defendant's amended motion for a new trial. Judgment affirmed. All the Justices concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348655/	144 S.E.2d 59 (1965) 265 N.C. 298 Harvey McDARIS and P. Novie Pipes v. BREIT BAR "T" CORPORATION and M. Jack Breitbart. No. 122. Supreme Court of North Carolina. September 22, 1965. 60 James S. Howell and Oscar Stanton, Asheville, for plaintiffs. Van Winkle, Walton, Buck & Wall and Herbert L. Hyde, Asheville, for defendants. MOORE, Justice. This is an action in ejectment, instituted 18 October 1963. Defendants appeal from judgment, conforming to the jury's verdict, declaring plaintiffs the owners and entitled to the possession of the land described in the complaint. Plaintiffs' claim of ownership is based on adverse possession "under known and visible lines and boundaries and under color of title, for seven years." G.S. § 1-38; Mobley v. Griffin, 104 N.C. 112, 10 S.E. 142. For color of title plaintiffs rely on a deed from the Board of Tax Supervision of Buncombe County, executed and recorded 29 August 1946. The deed recites: "The property herein was acquired by the party of the first part through foreclosure of tax lien." Plaintiffs went into possession of land in 1946 and continued in possession until 1963 when they were ousted by defendants. Defendants deny that plaintiffs have any title or interest in the land, and assert that plaintiffs' "color of title" was divested by reason of the foreclosure of a subsequent tax lien (lien of taxes for the year 1946). Corporate defendant claims title by virtue of a deed from the Board of Tax Supervision for Buncombe County, dated 20 May 1963. Individual defendant is an agent of corporate defendant. The land is described in plaintiffs' deed as follows: " * * in Buncombe County, North Carolina, to wit: Beginning on a chestnut tree, the beginning corner of lot number one, and runs with the line of lot number one as follows: South 15 degrees West 29 poles to a planted stone; thence South 1 degree West 45 poles to a stake in said S. P. Munday and Rice heirs line, corner of lot number one; thence East with Munday and Rice heirs line, 24 poles to a stake; thence North 20 degrees East 90 poles to a water oak in said Munday and 61 Jump lines; thence North 87 degrees West 12 poles to a chestnut oak; thence North 86 degrees West 35 poles to the beginning; and being the same property described in a certain deed of record in Deed Book 469, page 221, in the office of the Register of Deeds for Buncombe County, N. C., containing twenty acres, more or less, in Reems Creek Township." The same description is incorporated in corporate defendant's deed by reference. The trial below proceeded upon the theory that the sole question for determination is whether plaintiffs acquired ownership by adverse possession under color of title. There are thirty-five assignments of error. Defendants stress their exception to the court's refusal to allow their motion for nonsuit. They contend that plaintiffs introduced no proof that the description in their deed fits the land they held in possession. A deed offered as color of title is such only for the land designated and described in it. Norman v. Williams, 241 N.C. 732, 86 S.E.2d 593; Locklear v. Oxendine, 233 N.C. 710, 65 S.E.2d 673; Barfield v. Hill, 163 N.C. 262, 79 S.E. 677. "A deed cannot be color of title to land in general, but must attach to some particular tract." Barker v. Southern Railway, 125 N.C. 596, 34 S.E. 701. To constitute color of title a deed must contain a description identifying the land or referring to something that will identify it with certainty. Carrow v. Davis, 248 N.C. 740, 105 S.E.2d 60; Powell v. Mills, 237 N.C. 582, 75 S.E.2d 759. "Parol evidence is admissible to fit the description to the land. G.S. § 8-39. `Such evidence cannot, however, be used to enlarge the scope of the descriptive words.'" Baldwin v. Hinton, 243 N.C. 113, 90 S.E.2d 316. The purpose of parol evidence is to fit the description to the property, not to create a description. Thompson v. Umberger, 221 N.C. 178, 19 S.E.2d 484. Plaintiffs are required to locate the land by fitting the description to the earth's surface. Andrews v. Bruton, 242 N.C. 93, 86 S.E.2d 786. When a party introduces a deed in evidence which he intends to use as color of title, he must, in order to give legal efficacy to his possession, prove that the boundaries described in the deed cover the land in dispute. Smith v. Fite, 92 N.C. 319. He must not only offer the deed upon which he relies for color of title, he must by proof fit the description in the deed to the land it coversin accordance with appropriate law relating to course and distance, and natural objects and other monuments called for in the deed. Wachovia Bank & Trust Co. v. Miller, 243 N.C. 1, 89 S.E.2d 765; Skipper v. Yow, 238 N.C. 659, 78 S.E.2d 600; Williams v. Robertson, 235 N.C. 478, 70 S.E.2d 692; Locklear v. Oxendine, supra; Smith v. Benson, 227 N.C. 56, 40 S.E.2d 451. The only evidence in the record, favorable to plaintiffs, bearing upon the boundaries and location of the land described in the deed is certain testimony of Harvey McDaris, one of the plaintiffs. This testimony is in substance as follows (the greater portion is copied from the record verbatim): I am familiar with the lines of the property as contained in the deed introduced here. I had B. B. Bible, a surveyor, to go with me immediately after Marshall Orr and I got the deed. He went over the property with me. I had it surveyed. I was there with Mr. Bible. I knew him real well. He pointed out every corner to me on it. Defendants built a fence around it in 1963, put a narrow gate up and put a lock on the gate. The land lies north and south. It is more of a long strip of land. It goes down on the Reems Creek side below the spring quite a little ways and lies back up on the north side of the Rice Knob. The Scenic Highway runs through it. About a third of the property lies north of the highway. I did not mark the lines by putting a blaze on trees or anything like that. Mr. Bible pointed out each corner. I am not a surveyor. I had Mr. Bible 62 survey the property. He didn't draw a map. He did not write up any report of that survey. Neither I nor Mr. Bible staked any corners. Mr. Bible knew the property. He told me he knew the property. Mr. Bible told me he had been on the property numbers of times and that he knew the property and could point out the corners to me. When he was on that property with me, he had his transit with him. Just the two of us together. Didn't have anyone else. Mr. B. B. Bible was dead at the time of the trial below. Defendants introduced in evidence a deed (recorded in book 469, at page 221, of the Registry of Buncombe County) in their chain of title. It may be inferred from this deed that either B. B. Bible or his wife owned the land or an interest therein in 1934 and prior. It was incumbent upon plaintiffs to show that the evidences of lines and corners on the land corresponded to the designations and descriptive terms in their deed. The description in plaintiffs' deed specifies the lines and boundaries by courses and disstances and refers to natural objects and monuments by which the property may be located and identified"chestnut tree," "the beginning corner of lot number one," "the line of lot number one," "a planted stone," "S. P. Munday and Rice heirs line," "a water oak in Munday and Jump lines," "a chestnut oak." We find in the record no evidence tending to explain, locate or make certain the said calls and descriptive terms of the deed with relation to the land itself. Thus, plaintiffs failed to fit the description to the land according to the usual and accepted mode of trial procedure. Duckett v. Lyda, 223 N.C. 356, 26 S.E.2d 918. We call attention to the following excerpt from the statement of facts in Brown v. Hurley, 243 N.C. 138, 139, 90 S.E.2d 324. "The plaintiff offered the testimony of a surveyor and others tending to fit the description contained in these deeds to the land claimed by him. There was evidence as to the location of corners, marked trees, and other natural objects. One line runs along the top of a ridge. Another line follows an old road. The property was surveyed in 1903, in 1923, and in 1939, and the surveyor's markings were found and identified by the witnesses." See also Holmes v. Sapphire Valley Company, 121 N.C. 410, 28 S.E. 545. Plaintiffs' evidence permits the following inferences: B. B. Bible was a surveyor. In 1934 and prior thereto he, or his wife, owned or had an interest in the land in question. He knew the property and had been on it "numbers of times." He pointed out the corners to McDaris. As a consequence, McDaris is familiar with the lines of the property "as contained in the deed" of plaintiffs. We are of the opinion that this constitutes some evidence that the description fits the landmore than a scintilla. James v. Atlantic & East Carolina R. R., 236 N.C. 290, 72 S.E.2d 682. However, it is certainly the irreducible minimum of evidence on this essential point which will suffice to take plaintiffs' case to the jury. Furthermore, the testimony of McDaris that Bible surveyed the land and pointed out the corners to him, and that he, McDaris, is familiar with the lines of the property "as contained in the deed," was admitted over the objection of defendants. The evidence was not competent for the purpose of fitting the description to the land. "* * * evidence dehors the deed is admissible to `fit the description to the thing' only when it tends to explain, locate, or make certain some call or descriptive term used in the deed. It is the deed that must speak. The oral evidence must only interpret what has been said therein." Duckett v. Lyda, supra. McDaris' statement that he was familiar with the boundaries "as contained in the deed," is a conclusion which the jury might draw from competent 63 evidence, but the witness is not permitted to do so. Memory v. Wells, 242 N.C. 277, 87 S.E.2d 497. Notwithstanding the incompetency of the testimony, we must consider it on the motion for nonsuit. Evidence erroneously admitted will nevertheless be considered on appeal in passing upon the sufficiency of plaintiff's evidence to withstand nonsuit, since the admission of such evidence may have caused plaintiffs to omit evidence of the same import. Early v. Eley, 243 N.C. 695, 91 S.E.2d 919; Midgett v. Nelson, 212 N.C. 41, 192 S.E. 854. On the first (adverse possession) issue, the court instructed the jury as follows: " * * when you come to this first issue, members of the jury, you will remember that the plaintiff has the burden of proof on it and if the plaintiff has satisfied you by the greater weight of the evidence that they (1) received and recorded deed constituting color of title as the Court has instructed you as to the meaning of color of title, conveying the property described in the Complaint, and (2nd) that the plaintiffs have held said property continuously, adversely, notoriously, openly and extensively for a period of seven years following the recording of said deed, then it would be your duty to answer the first issue YES. If the plaintiffs have failed to so satisfy you, it would be your duty to answer the first issue NO." The court erred in failing to charge that plaintiffs must also show that such possession was under known and visible lines and boundaries. G.S. § 1-38. There must be known and visible boundaries such as to apprise the true owner and the world of the extent of the possession claimed. Barfield v. Hill, 163 N.C. 262, 79 S.E. 677. Nowhere in the charge did the court instruct the jury that there must be "known and visible lines and boundaries" or explain the meaning of this phrase. Defendants' exception to this omission is well taken, and they are entitled to a new trial. Other assignments of error are not discussed. The matters involved may not arise upon a retrial. New trial.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348674/	112 Ga. App. 144 (1965) 144 S.E.2d 176 ANDREWS v. SMITH. 41300. Court of Appeals of Georgia. Argued May 3, 1965. Decided July 14, 1965. Rehearing Denied July 27, 1965. 146 N. Forrest Montet, for plaintiff in error. Troutman, Sams, Schroder & Lockerman, William H. Schroder, T. M. Smith, Jr., contra. JORDAN, Judge. 1. It is first contended by the plaintiff that the order of the trial court denying the defendant's motion for nonsuit constituted the law of the case that the plaintiff had presented sufficient evidence to authorize a recovery in her behalf. This contention is without merit. "When a court passes upon a motion for nonsuit it decides only one question, that is, do the allegations and the proof correspond? In sustaining such a motion the court does not hold that the plaintiff is not entitled, under the law, to recover on the facts alleged; 147 neither does the overruling of the motion decide that the plaintiff is entitled under the law to recover." Kelly v. Strouse, 116 Ga. 872 (4d), 883 (43 S.E. 280). 2. It was incumbent upon the plaintiff in order to present an issue for the jury's determination as to the defendant's alleged negligence to produce medical evidence from which the jury could find the want of due care, skill or diligence on the part of the defendant. Hollis v. St. Joseph Infirmary, 108 Ga. App. 309 (132 SE2d 841). This is true for the reason that in an action against a physician or surgeon for malpractice, the presumption is that the medical or surgical services were performed in an ordinarily skillful manner, and the burden is on the plaintiff to show a want of due care, skill or diligence. Shea v. Phillips, 213 Ga. 269, 271 (98 SE2d 552). "The proper standard of measurement for a jury to apply to the acts of a doctor to determine whether he exercised a reasonable degree of care and skill must be established by testimony of physicians, for it is a medical question." Hayes v. Brown, 108 Ga. App. 360 (1b) (133 SE2d 102). It is not necessary, however, that another physician testify that "the defendant was guilty of malpractice" (Wilson v. Kornegay, 108 Ga. App. 318, 321 (132 SE2d 791)), it being sufficient if the court and jury are given a standard of measurement by which they may judge the acts of the defendant to determine whether or not he exercised a reasonable degree of care and skill, such standard of measurement being established by testimony of physicians. Pilgrim v. Landham, 63 Ga. App. 451 (11 SE2d 420); Howell v. Jackson, 65 Ga. App. 422 (16 SE2d 45). When competent expert medical evidence has been received, it is to be considered by the jury only as other evidence in the case. Pilgrim v. Landham, supra, p. 454; Word v. Henderson, 220 Ga. 846 (142 SE2d 244). 3. It is our opinion that the testimony of the plaintiff's medical witness was sufficient to establish a proper standard of measurement by which the jury could determine the issue of the defendant's alleged negligence in "failing to discover the calcium deposits in plaintiff's right shoulder and removing same," and that under the evidence adduced in behalf of the plaintiff, 148 when so measured, a jury question was presented as to the issue of the defendant's negligence and whether it proximately caused or contributed to the plaintiff's subsequent condition. Dr. Martin T. Myers, the doctor who performed the second operation on the plaintiff, testified that the x-rays made at his request on March 12, 1960 (after the operation performed by the defendant and before the operation performed by Dr. Myers), as well as the x-rays made by the defendant on February 23, 1960, disclosed the existence of a calcium deposit of a very hard composition in the plaintiff's right shoulder; and that upon operating he located and removed this deposit which he described as a "thickening of the bursa tissue, measuring about a half an inch long, about an eighth of an inch thick, rather cylindrical in shape," and being "practically the same density of bone, rather hard." Dr. Myers further testified that this calcified bursa was "very palpable, it could be seen with the naked eye"; that, while the incision made in the first operation appeared to be below the area in which the calcium deposit was located, by retraction, the bursa could have been observed during the first surgical procedure; and that the deposit located and removed by him would take many months to form, and in his opinion such deposit existed prior to February 27, 1960, the date of the first operation. Dr. Myers also testified that a surgical procedure of this type was a "simple surgical approach to an underlying growth, which is very easily pressed and could be seen with the naked eye, and there was no difficulty in seeing it." In answer to the following question, "Do you know of any reason why an orthopedic surgeon in exercising ordinary care in performing this type of operative procedure on February 27, 1960, could fail to discover such a deposit as you said you found to exist?" Dr. Myers answered: "If he didn't have the proper landmarks on the bone, he might have missed it that way, overshot the site." The following question was then asked Dr. Myers: "Now, assuming an orthopedic surgeon practicing in Atlanta, Georgia, operates to remove calcified bursa from a shoulder which is previously observed on x-ray prior to the operation and does not find the calcified bursa after opening up the shoulder area, what if anything 149 in your opinion should be done in good medical and surgical practice as regards x-rays of the shoulder prior to closing the incision, assuming that there are x-ray facilities available in the operating room?" (The evidence showed that such facilities were available when the first operation was performed.) Dr. Myers answered: "Only thing to do would be to take it under x-ray outlined by a marker, just where you think the bursa is, if after exploring and having continued in exploring it couldn't be found, then the x-ray would be the last resort." The following examination of Dr. Myers then transpired: "Q. `What would be the purpose of x-ray? A. `To readjust your sites.' Q. `What is your opinion as to whether or not it would be good medical and surgical practice for an orthopedic surgeon practicing in the City of Atlanta, after operating upon the right shoulder and failing to locate the calcium deposits in the right shoulder which were earlier seen on x-ray of the right shoulder, to close the incision without making additional x-rays of the involved area? A. `Well, if one is sure then closure could be gone about safely, if there is any doubt then x-rays should be made.' Q. `Assume that a patient such as Mrs. Andrews was operated on in the right shoulder to remove a calcified bursa and during the course of the operative procedure no solidified mass was found and removed, and the incision was closed up, patient returned to her room, but that the patient continued to complain of the same gritty type pain in her right shoulder as she complained of prior to the performance of the operative procedure, what is your opinion as to whether or not additional x-rays should be taken . . . in good medical and surgical practice of the patient's right shoulder before discharging fer from the the hospital?' A. `If there was still persistent pain in the same location further x-ray studies and examinations should be carried out.'" While the testimony of the defendant and his expert medical witness was in sharp conflict with the expert medical testimony of Dr. Myers, it is clear that the testimony of Dr. Myers, if accepted by the jury in preference to that offered in behalf of the defendant, when considered with the other evidence adduced in behalf of the plaintiff, was sufficient to authorize, though it 150 did not demand, a finding that the defendant did not exercise due diligence in performing the operation in question; and that because of his negligence a second operation was immediately necessary which according to Dr. Myers "probably delayed healing and returning of proper function" of the plaintiff's arm. "And where, measured by the method shown by medical witnesses to be negligence, the evidence shows a bad result, it is the province of the jury to say whether the result was caused by the negligence." Pilgrim v. Landham, 63 Ga. App. 451, 455, supra; Word v. Henderson, 220 Ga. 846, supra. In reaching this conclusion we have not overlooked the well settled rule that a physician or surgeon is not an insurer and cannot always effect a cure. Howell v. Jackson, 65 Ga. App. 422, 423, supra. According to the defendant's own testimony, if a calcium deposit had been found by him during the first operation, dramatic relief could have been obtained for the plaintiff and the record shows that the plaintiff did experience immediate and dramatic relief from the intense pain which she had suffered before and after the first operation when the second operation was performed by Dr. Myers. Nor have we overlooked the testimony adduced in behalf of the defendant or the testimony elicited from Dr. Myers on the skillful cross examination of him by defendant's counsel. It is necessary here only to determine if there was sufficient evidence to present an issue for the jury and not to determine if the evidence demanded a finding for the plaintiff, which it clearly did not do. As stated above, the evidence was in sharp conflict and the jury was authorized to find not only that the defendant was not negligent in failing to effect a successful result in the first operation, but that even if he had been negligent in not locating the calcium deposit and treating or removing it, the plaintiff's subsequent condition was not caused thereby but was wholly due to the negligence of Dr. Myers in the operation performed by him, and not to that of the defendant. On the other hand, a finding was authorized that the defendant was negligent, that because of his negligence a second operation had to be performed to effect a result which should have been accomplished by the defendant in the first operation; and that because 151 of the immediate necessity of performing the second operation, irrespective of how skillfully it was performed, delay in the healing and return to normal function of the plaintiff's right arm and shoulder was thereby occasioned for which the defendant would be responsible. Piedmont Hospital v. Truitt, 48 Ga. App. 232 (172 S.E. 237). The determination of these very close and difficult issues of negligence and proximate cause was for the jury, and the trial court erred in granting the defendant's motion for judgment notwithstanding the mistrial. Judgment reversed. Felton, C. J., and Deen, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348692/	144 S.E.2d 603 (1965) 265 N.C. 506 Carolyn J. VAN EVERY v. Philip L. VAN EVERY. No. 274. Supreme Court of North Carolina. November 3, 1965. 606 Herbert, James & Williams, Charlotte, and Jordan, Wright, Henson & Nichols, Greensboro, for plaintiff appellant. Warren C. Stack, Kennedy, Covington, Lobdell & Hickman, by Frank H. Kennedy, Charlotte, for defendant appellee. HIGGINS, Justice. The plaintiff has appealed from an adverse judgment on the pleadings. The motion for such judgment is in the nature of a demurrer, allowable against the plaintiff only when the complaint as modified by the reply fails to allege facts sufficient to state a cause of action or admits facts which constitute a complete legal bar thereto. When all facts necessary to establish the plea in bar are either alleged or admitted in the plaintiff's pleadings, it becomes the duty of the court to pass on the plea as a matter of law. McFarland v. News & Observer Publishing Co., 260 N.C. 397, 132 S.E.2d 752; Erickson v. Starling, 235 N.C. 643, 71 S.E.2d 384; Adams v. Cleve, 218 N.C. 302, 10 S.E.2d 911; Mitchell v. Strickland, 207 N.C. 141, 176 S.E. 468. Conceding the plaintiff in her complaint states a cause of action for alimony under G.S. § 50-16, nevertheless, by her reply, she admits she executed a separation agreement and property settlement in accordance with the statutory formality required by G.S. § 52-12. At the time she executed the agreement and during the negotiations leading up to its preparation, she was represented by Messrs. Carswell & Justice, Attorneys of Charlotte, who participated for weeks in the negotiations which culminated in the settlement. She admits she received the home and all furnishings in Charlotte; a Cadillac automobile and a station wagon; and in lieu of periodic payments of alimony she received, at her own insistence and request, a lump sum payment of $420,000.00 in cash. The record discloses she received (and still receives) $1,500.00 monthly from a trust fund set up for her by the defendant and his mother. On the argument the plaintiff's present counsel do not deny that the plaintiff's attorneys in the settlement proceeding were highly successful members of the Bar, possessed a high degree of legal learning and business experience. The eminence, experience, and character of counsel who represent the plaintiff in procuring a property settlement bear directly on her subsequent attempt to set it aside as fraudulent. "The presence of able counsel for the wife at the conference resulting in a separation agreement, and at the time she executes and acknowledges a deed of separation, `negatives 607 the inference or contention that she was incompetent to understand the arrangement, and was ignorant of its terms and did not know what she was doing,' (citing authorities). `The courts will subject the wife's claim of fraud, duress, or undue influence to a far more searching scrutiny where she was represented by counsel in the making of the agreement and throughout the negotiations leading up to its execution.'" Joyner v. Joyner, 264 N.C. 27, 140 S.E.2d 714. The plaintiff's pleadings are devoid of any factual allegations which raise an issue of fraud in procuring the separation agreement. The allegation, "(T)he plaintiff was advised (by whom is not disclosed) that the paper did not constitute a permanent settlement because the defendant would return, resume marriage relations, and the money received would be tantamount to a gift," is an insufficient allegation on which to impeach the Clerk's certificate required by G.S. § 52-12. The above allegation reflects more on the plaintiff's good faith than upon the defendant's lack of it. Nor are we impressed with the allegation that the provisions made for the wife are so grossly inadequate as to amount to a total failure of consideration for the contract. According to the plaintiff's allegation, the defendant's salary at the time of their marriage was $30.00 per week. Thirty years later a trust fund of $1,500.00 per month, a furnished home, two automobiles, and $420,000.00 in cash constitute "a total failure of consideration." In the examination of the pleadings to determine whether a plea in bar is established thereby, we may treat the exhibit to the answer (the property settlement and separation agreement) as a part of the pleadings. The plaintiff's reply admits its execution. Sale v. Johnson, Com'r., 258 N.C. 749, 129 S.E.2d 465. A separation agreement in which fair and reasonable provision is made for the wife will be upheld when executed by her in the manner provided by G.S. § 52-12. Kiger v. Kiger, 258 N.C. 126, 128 S.E.2d 235; Bolin v. Bolin, 246 N.C. 666, 99 S.E.2d 920; Archbell v. Archbell, 158 N.C. 408, 74 S.E. 327. A valid separation agreement cannot be set aside or ignored without the consent of both parties. The intent of the parties as expressed in such an agreement is controlling. Bowles v. Bowles, 237 N.C. 462, 75 S.E.2d 413; Lawson v. Bennett, 240 N.C. 52, 81 S.E.2d 162. The statute (G.S. § 52-12) provides that the certificate of the probate officer shall be conclusive. However, the contract may be set aside if induced by fraud. The plaintiff, however, must allege facts which, if found to be true, permit the legitimate inference that the defendant induced the plaintiff by fraudulent misrepresentations to enter into the contract which but for the misrepresentations she would not have done. If the pleading alleges conclusions rather than facts, it is insufficient to raise an issue of actual fraud. When tested by the applicable rules of construction, the plaintiff's allegations are insufficient to overcome the force and effect of her separation agreement. These deficiencies appear upon the face of the pleadings. Judge Riddle properly sustained the plea in bar, denied relief, and dismissed the action. His judgment is Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2755308/	Filed 11/25/14 Valentine v. GEP Cencast CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE MAX VALENTINE, B251737 Plaintiff and Appellant, (Los Angeles County Super. Ct. No. BC488251) v. GEP CENCAST, LLC, dba CENTRAL CASTING, Defendant and Respondent. APPEAL from a judgment of the Superior Court of Los Angeles, Mark V. Mooney, Judge. Affirmed. Law Offices of Nevin Kamath and Nevin Kamath for Plaintiff and Appellant. Fisher & Phillips, John M. Polson, Steven A. Witt, for Defendant and Respondent. ________________________________ Plaintiff and appellant Max Valentine appeals from a judgment of dismissal entered after the court sustained without leave to amend the demurrer of defendant and respondent GEP Cencast, LLC, doing business as Central Casting, to Valentine’s second amended complaint, finding that all causes of action were preempted by the National Labor Relations Act (NLRA) (29 U.S.C. § 151 et seq.). Valentine contends the preemption finding was erroneous and the court abused its discretion in denying leave to amend. We conclude that the court erred in sustaining the demurrer on preemption grounds. We nonetheless affirm the judgment because Valentine has failed to adequately plead any cause of action and has not proposed amendments that would cure the defects in his complaint. FACTUAL AND PROCEDURAL BACKGROUND Acting in propria persona, Valentine filed a form complaint against Central Casting on July 16, 2012. Central Casting demurred, and Valentine filed an amended complaint. The amended complaint alleged that Central Casting unlawfully favored actors who paid additional fees or kickbacks, and that Central Casting colluded with the Screen Actors Guild (SAG) and American Federation of Television and Radio Artists (AFTRA) to force union members to pay for work opportunities. Central Casting again demurred, arguing that the causes of action were preempted under the NLRA, and alternatively, that each claim failed to state a cause of action. On May 14, 2013, the court sustained the demurrer with leave to amend and ordered that “[n]o new causes of action and no new parties are to be added without leave of court.” Valentine filed the operative second amended complaint on June 3, 2013, alleging causes of action for unfair business practices in violation of Business and Professions Code section 17200 et seq., wrongful termination/retaliation for whistleblowing, and 2 intentional infliction of emotional distress.1 Central Casting again demurred, arguing preemption and the failure to state a cause of action. After considering argument from both parties, the court sustained the demurrer without leave to amend, stating, “The Court finds the causes of action are pre-empted by NLRA.” Valentine and Central Casting portray the gravamen of Valentine’s claims differently. In his opening brief, Valentine claims his lawsuit rests on allegations that Central Casting “denied him work because he refused to pay bribes, deceptively marketed services run by ex-Central Casting managers that were supposed to lead to more work but did not, and misrepresented to Valentine that if he volunteered his time for unpaid acting jobs he would be rewarded with paying jobs. Then, when Valentine complained about these unlawful business practices, Central Casting fired him.” Central Casting, on the other hand, characterizes Valentine’s suit as “revolv[ing] around Central Casting’s alleged unlawful scheme to: collude with actors’ unions; violate collective bargaining agreements; force union members to pay ‘kick-backs’ and discriminatory additional fees; provide favorable treatment to certain union members, and discriminate against and target others; force union members to accept non-union pay; purposely cause union members to lose their benefits eligibility under a collective bargaining agreement; and ‘black ball’ and/or terminate union members for complaining of this scheme to management or their union and for seeking union intervention.” Our own reading of the complaint reveals the following relevant allegations: Valentine is a member of the SAG and AFTRA unions, but neither union has an agreement with Central Casting. When selecting actors for background acting jobs, Central Casting favored actors who paid additional fees to third party call-in services, as well as a core group of actors—some of whom were not union members—who paid bribes or kickbacks to Central Casting employees. Central Casting charged union members a $25 registration fee and a $10 imaging fee to register with the company. 1 Valentine dismissed a cause of action for negligent supervision and retention on July 19, 2013. 3 Every couple of years, Central Casting would delete the files of individuals who had already registered, requiring them to pay additional fees to re-register. When union members who did not use the call-in service did obtain work, they would be paid minimum wage rather than union scale, and if they resisted the practice, they would be blacklisted in the industry. If an actor objected to Central Casting’s practices, he or she would be blacklisted. If an actor stopped using the third party call-in services or stopped paying kickbacks, he or she would receive less work through Central Casting, or no work at all. When Valentine refused to participate in the call-in services or other aspects of Central Casting’s scheme, Central Casting withheld him from consideration for the most lucrative or crucial jobs. His inability to obtain work through Central Casting caused him to lose his union benefits. He complained to defendant and Central Casting employees and to union leadership, but the practices continued. Valentine received a termination notice in July 2010, allegedly in retaliation for his refusal to participate in Central Casting’s “unlawful scheme,” for complaining about the scheme, and for his attempts to seek union mediation. DISCUSSION Valentine contends the trial court erred in finding the complaint preempted. He further contends he has adequately stated valid causes of action and the court abused its discretion in denying leave to amend. Preemption Valentine contends on appeal the trial court erred in finding his complaint preempted because the activity which forms the basis of his state law claims is neither arguably protected nor arguably prohibited under the NLRA. We agree. “[W]hether an action is preempted by federal law is a question the appellate court reviews de novo. [Citation.]” (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal. App. 4th 1807, 4 1812.) We keep in mind that “[a] plaintiff may not avoid a demurrer by pleading facts or positions in an amended complaint that contradict the facts pleaded in the original complaint or by suppressing facts which prove the pleaded facts false. [Citation.] Likewise, the plaintiff may not plead facts that contradict the facts or positions that the plaintiff pleaded in earlier actions or suppress facts that prove the pleaded facts false. [Citation.]” (Cantu v. Resolution Trust Corp. (1992) 4 Cal. App. 4th 857, 877, italics omitted.) Under the supremacy clause of the United States Constitution, federal law preempts state law. (U.S. Const., art. VI, § 2.) If a federal law does not include an express preemption provision, courts will uphold a state or local law “‘unless it conflicts with federal law or would frustrate the federal scheme, or unless the courts discern from the totality of the circumstances that Congress sought to occupy the field to the exclusion of the States.’ [Citation.]” (Allis–Chalmers Corp. v. Lueck (1985) 471 U.S. 202, 209.) The NLRA does not contain an express preemption provision, but the United States Supreme Court has “held that Congress implicitly mandated two types of pre- emption as necessary to implement federal labor policy. The first, known as Garmon pre-emption . . . [(San Diego Building Trades Council, etc. v. Garmon (1959) 359 U.S. 236 (Garmon))], ‘is intended to preclude state interference with the National Labor Relations Board’s interpretation and active enforcement of the “integrated scheme of regulation” established by the NLRA.’ [Citation.] To this end, Garmon pre-emption forbids States to ‘regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits.’ [Citation.] The second, known as Machinists pre-emption, forbids both the National Labor Relations Board (NLRB) and States to regulate conduct that Congress intended ‘be unregulated because left “to be controlled by the free play of economic forces.”’ [(Lodge 76, International Association of Machinists and Aerospace Workers, AFL–CIO v. Wisconsin Emp. Rels. Comm’n (1976) 427 U.S. 132, 140 (Machinists).)]” (Chamber of Commerce of United States v. Brown (2008) 554 U.S. 60, 65.) In cases involving Garmon preemption, state courts “must defer to the exclusive competence of the National Labor Relations Board in cases in which the activity that is 5 the subject matter of the litigation is arguably subject to the protections of [section] 7 or the prohibitions of [section] 8 of the [NLRA].” (Linn v. Plant Guard Workers (1966) 383 U.S. 53, 60.) “The United States Supreme Court has addressed what ‘arguable’ means in the context of questions of law and questions of fact. As to questions of law, the party asserting preemption must advance a statutory construction of the NLRA ‘that is not plainly contrary to its language and that has not been “authoritatively rejected” by the courts or the [NLRB]. [Citation.]’ [Citation.] As to questions of fact, the ‘party must then put forth enough evidence to enable the court to find that the [NLRB] reasonably could uphold a claim based on such an interpretation.’ [Citation.]” (Haney v. Aramark (2004) 121 Cal. App. 4th 623, 633-634 (Haney).) To the extent the party seeking preemption contends an activity is “arguably prohibited” under section 8, the United States Supreme Court has cautioned against applying the doctrine of Garmon preemption in a mechanical fashion, when the state has a “substantial interest in regulation of the conduct at issue and the State’s interest is one that does not threaten undue interference with the federal regulatory scheme.” (Farmer v. United Brotherhood of Carpenters & Joiners (1977) 430 U.S. 290, 302; Sears, Roebuck & Co. v. Carpenters (1978) 436 U.S. 180, 188 (Sears).) Courts must examine “not whether the State is enforcing a law relating specifically to labor relations or one of general application but whether the controversy presented to the state court is identical to . . . or different from . . . that which could have been but was not, presented to the [NLRB].” (Sears, supra, at p. 197.) State law claims are not preempted if their adjudication creates “no realistic risk of interference with the [NLRB’s] primary jurisdiction to enforce the statutory prohibition against unfair labor practices.” (Id. at p. 198.) 1. Protected Activity Section 7 of the NLRA protects employees’ rights “to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their 6 own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .” (29 U.S.C. § 157.) Activity by a single employee can be considered concerted activity subject to protection under section 7 if it meets an “objective test requiring some linkage to group action . . . .” (Haney, supra, 121 Cal.App.4th at p. 635, quoting Ewing v. N.L.R.B. (2d Cir. 1988) 861 F.2d 353, 355 (Ewing).) The linkage or nexus requirement can be met three different ways. First, the individual’s act can be based on prior concerted activity. “For example, a single employee’s invocation of rights set forth in a [collective bargaining agreement] is presumed to be concerted activity because the [collective bargaining agreement] was put into effect by group action.” (Haney, supra, at p. 635, fn. 5, citing N.L.R.B. v. City Disposal Systems, Inc. (1984) 465 U.S. 822, 833 (City Disposal).) Second, the linkage or nexus requirement is satisfied “if an individual acts, formally or informally, on behalf of a group.” (Ewing, 861 F.2d at p. 361.) Third, an individual engages in concerted activity if he or she attempts to bring about or prepare for group action, even if those attempts are unsuccessful in achieving group action. (Ibid.) In its demurrer, Central Casting argued Valentine engaged in “concerted activity” by asserting rights under a collective bargaining agreement. Central Casting relies on City Disposal, where a provision of a collective bargaining agreement between the employer and the union stated that the employer would not require employees to drive unsafe trucks. After the employer fired a driver for refusing to drive a truck he honestly and reasonably believed to be unsafe, the court found the driver’s individual refusal constituted concerted activity because he was asserting a right grounded in the collective bargaining agreement. (City Disposal, supra, 465 U.S. at pp. 830-836.) The City Disposal court found an individual’s assertion of rights rooted in a collective bargaining agreement to be a concerted activity because it is an inseparable part of the process giving rise to the agreement itself. “That process—beginning with the organization of a union, continuing into the negotiation of a collective-bargaining agreement, and extending through the enforcement of the agreement—is a single, collective activity. [Footnote omitted.] Obviously, an employee could not invoke a right grounded in a 7 collective-bargaining agreement were it not for the prior negotiating activities of his fellow employees. Nor would it make sense for a union to negotiate a collective- bargaining agreement if individual employees could not invoke the rights thereby created against their employer.” (Id. at pp. 831-832.) For Valentine’s allegations to amount to concerted activity as described in City Disposal, there must be an allegation of a negotiated collective bargaining agreement between Central Casting and a union. Instead, the complaint alleges the opposite: “defendant Central is not a party to an agreement with any union to which Plaintiff is a member.” In making its preemption argument, Central Casting relied solely on attenuated references to an unidentified collective bargaining agreement, and did not ask the court to take judicial notice of any such agreement. Unless the trial court took judicial notice of a collective bargaining agreement, it lacked the factual basis necessary to conclude that Valentine was asserting rights under such an agreement, and therefore erred in finding preemption based on City Disposal. In the Respondents’ Brief, Central Casting contends Valentine’s allegations also meet the third test for concerted activity because he alleges an “attempt[] to bring about or prepare for group action” by seeking assistance and mediation from union leadership. (Haney, 121 Cal.App.4th at p. 635.) It is true that Valentine cites his “numerous attempts to seek mediation with Central by union leaders” as one of three retaliatory reasons underlying his wrongful termination claim. Standing alone, such an allegation might support a finding of preemption, but because he also alleges he was terminated for conduct that would not be protected activity under the NLRA, his cause of action for wrongful termination is not preempted. (See Balog v. LRJV, Inc. (1988) 203 Cal. App. 3d 1343, 1304 [“so long as defendants’ intentional wrongful conduct was motivated by impermissible considerations other than solely a desire or plan to interfere with collective bargaining or unionization, they may be held liable under state law”].) 8 2. Prohibited Activity The allegations of the complaint do not support Central Casting’s contention on appeal that Valentine’s claims are preempted because they center around activities that were arguably prohibited under section 8 of the NLRA. Under section 8, it is an unfair labor practice for an employer to “interfere with, restrain, or coerce employees” in the exercise of their Section 7 rights or to discriminate against employees “in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership” in a union. (29 U.S.C. § 158(a)(1) and (a)(3).) Some of Central Casting’s examples mischaracterize Valentine’s allegations, attempting to shoehorn the complaint into the mold of section 8 prohibited activity. For example, Central Casting points to an allegation that “Central Casting colluded with actors’ unions to develop and run ‘a scheme to harm and defraud’ union members, forcing them to pay additional monthly fees beyond their CBA dues.” Such collusion might be considered arguably prohibited under section 8. (See 29 U.S.C. § 158(a)(3).) However, the singular reference in the complaint to collusion only secondarily implicates the unions, and does not establish that the alleged “collusion” operated to encourage or discourage membership in a union: “Central operates in collusion with the Studios and, ultimately, actors unions to coerce/force actors to pay for work and access to work on top of all the aforementioned fees/dues[.]” Because the alleged collusion affected all actors, regardless of union membership, it is not arguably prohibited activity. Other examples accurately reflect the allegations of the complaint, but still do not demonstrate activity that is arguably prohibited under section 8. For example, the complaint alleges that a disproportionately high number of union engagements were given to members of a core group, to the detriment of general union members. But the allegation that some members of the core group were union members, while others were not, does not establish that the scheme Valentine complains of discriminated in a manner intended to encourage or discourage union membership. 9 We further agree with Valentine that his claims are not preempted under the Sears standard, because his claims regarding Central Casting’s practices are not identical to any claims he might present to the NLRB. The three practices that are at the core of Valentine’s complaint affect union and non-union employees equally: (1) the preference for actors that use a separate call-in service at an additional charge, (2) the practice of accepting bribes or kickbacks, and (3) the practice of requiring actors to repeatedly pay registration and imaging fees to remain in Central Casting’s database. Whether these practices violate state law is a question for the state courts to decide, and Central Casting’s arguments do not convince us that a state court decision on the matter would interfere with the jurisdiction of the NLRB. We therefore conclude, contrary to Central Casting’s demurrer and the trial court’s ruling, that Valentine’s claims are not preempted. Sufficiency of the Complaint Despite the court’s error in finding Valentine’s complaint preempted, Valentine has not demonstrated that the order sustaining the demurrer without leave to amend merits reversal. Valentine’s complaint contains many allegations that are conclusions of law, rather than allegations of fact. Such allegations cannot be relied on to overcome a demurrer. “It is the appellant’s burden to affirmatively demonstrate reversible error. [Citation.]” (California Pines Property Owners Assn. v. Pedotti (2012) 206 Cal. App. 4th 384, 392.) “We affirm the judgment if it is correct on any ground stated in the demurrer, regardless of the trial court’s stated reasons. [Citation.]” (Fremont Indem. Co. v. Fremont General Corp. (2007) 148 Cal. App. 4th 97, 111.) “A demurrer tests the legal sufficiency of factual allegations in a complaint. [Citation.] In reviewing the sufficiency of a complaint against a general demurrer, this court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law. This court also considers matters that may be judicially noticed. When a demurrer is sustained, this court determines whether the complaint states facts sufficient to 10 constitute a cause of action. [Citation.]” (Rakestraw v. California Physicians’ Service (2000) 81 Cal. App. 4th 39, 42-43 (Rakestraw).) 1. Unfair Competition Claim (Bus. & Prof. Code, § 17200) Business and Professions Code section 17200 defines unfair competition as “any unlawful, unfair or fraudulent business act or practice . . . .” The Unfair Competition Law (UCL) recognizes “three varieties of unfair competition: practices which are unlawful, unfair or fraudulent.” (In re Tobacco II Cases (2009) 46 Cal. 4th 298, 311, internal quotation marks omitted.) Valentine’s allegations are insufficient to state a cause of action under any of the prongs. a. Unlawful prong of Unfair Competition Law To state a cause of action under the UCL’s “unlawful” prong, a complaint must state facts sufficient to establish a violation of another law. (Berryman v. Merit Property Management, Inc. (2007) 152 Cal. App. 4th 1544, 1554.) The complaint alleges that Central Casting (1) favored a core group of actors, which is not unlawful in itself, (2) engaged in extortion in violation of Penal Code section 518 by encouraging actors to register with a call-in service that charged a monthly fee, (3) violated Penal Code section 641.3 by soliciting bribes or kickbacks from actors seeking repeated or higher paying acting jobs, and (4) charged registration and imaging fees, while deleting files every couple of years and requiring actors whose files have been deleted to pay additional fees to re-register. To carry his burden of demonstrating reversible error on appeal, Valentine must demonstrate how these allegations amount to a valid cause of action under the UCL. He has not done so. Valentine’s complaint does not allege sufficient facts to establish the legal violations he claims to be the basis for his UCL cause of action. The allegation that a company has extorted payments or accepted bribes to favor certain actors over others is a mere conclusion without any factual support. Our de novo review of the operative 11 complaint reveals no factual allegations linking the assignment of work to the payment of bribes or unauthorized fees. The complaint even acknowledges that some “[u]nion members, unaffiliated with Central’s ‘proxy’, would ‘laboriously’ obtain coveted union engagements . . . .” Because the complaint does not allege any contractual or legal provision preventing Central Casting from charging additional fees, it does not allege the elements for extortion or violating federal RICO laws. (See, e.g., Rothman v. Vedder Park Management (9th Cir. 1990) 912 F.2d 315, 318 [alerting homeowners of possible consequences of failure to act did not constitute extortion or a RICO violation].) Despite Valentine’s protestations to the contrary, monthly fees charged by third parties do not establish that Central Casting violated Labor Code section 1702. Only individual employees can violate Penal Code section 641.3 (commercial bribery) by acting to the detriment of the employer. (See Pen. Code, § 641.3, subd. (a).) b. Unfair prong of Unfair Competition Law “A business practice is unfair within the meaning of the UCL if it violates established public policy or if it is immoral, unethical, oppressive or unscrupulous and causes injury to consumers which outweighs its benefits. [Citations.]” (McKell v. Washington Mut., Inc. (2006) 142 Cal. App. 4th 1457, 1473.) In addition, the alleged injury cannot be “an injury the consumers themselves could reasonably have avoided. [Citation.]” (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal. App. 4th 824, 839.) The only injury Valentine alleges is that he was not considered for most lucrative or crucial jobs, and as a result he lost health and pension benefits. Valentine does not allege that he was entitled to or even qualified for those jobs, thus making his injury allegation speculative and conclusory. Also, because Valentine could have reasonably avoided injury either by refraining from paying the objectionable fees or by searching for acting jobs through other means, he has not stated a cause of action under the “unfair” prong of the UCL. 12 c. Fraudulent prong of Unfair Competition Law A plaintiff pursuing a UCL claim under the fraud prong “must allege he or she was motivated to act or refrain from action based on the truth or falsity of a defendant’s statement, not merely on the fact it was made.” (Kwikset Corp. v. Superior Court (2011) 51 Cal. 4th 310, 327, fn. 10.) In addition, a failure to disclose information does not support a claim under the fraudulent prong of the UCL, unless a duty to disclose exists. (Graham v. Bank of America, N.A. (2014) 226 Cal. App. 4th 594, 614.) Because the complaint does not identify allegedly fraudulent statements or a duty to disclose additional information, Valentine has not stated a cause of action under this prong of the UCL. 2. Wrongful Termination “The elements of a claim for wrongful discharge in violation of public policy are (1) an employer-employee relationship, (2) the employer terminated the plaintiff’s employment, (3) the termination was substantially motivated by a violation of public policy, and (4) the discharge caused the plaintiff harm.” (Yau v. Santa Margarita Ford, Inc. (2014) 229 Cal. App. 4th 144, 154, citing Haney, supra, 121 Cal.App.4th at p. 641.) The second amended complaint fails to allege the first and most crucial element of a wrongful termination claim: an employer-employee relationship. Instead, it only alleges that “[Valentine] received a termination notice dated July 16, 2010” and does not include a copy of the termination notice. Without more, there is no way to determine whether the notice in fact terminated an employment relationship between Valentine and Central Casting. Even if Valentine alleged he was Central Casting’s employee, he has not adequately alleged that Central Casting was substantially motivated by a violation of public policy, because his allegations of unlawful conduct fall short. (See Gantt v. Sentry Insurance (1992) 1 Cal. 4th 1083, 1095 [“courts in wrongful discharge actions may not declare public policy without a basis in either constitutional or statutory provisions”]; but 13 see Green v. Ralee Engineering Co (1998) 19 Cal. 4th 66, 71 [expanding the source of public policy to include certain administrative regulations].) Accordingly, Valentine has not stated a cause of action for wrongful termination in violation of public policy. 3. Intentional Infliction of Emotional Distress To state a claim for intentional infliction of emotional distress, Valentine must allege Central Casting engaged in (1) extreme and outrageous conduct (2) with the intention of causing, or reckless disregard of the probability of causing, emotional distress, and (3) resulting distress. (Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal. 4th 965, 1001.) To be outrageous, the conduct “‘“must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.”’” (Ibid.) Nothing alleged in Valentine’s complaint meets the standard of conduct outside the bounds of what is usually tolerated in a civilized community, and therefore, he has not stated a claim for intentional infliction of emotional distress. Leave to Amend The remaining question is whether the court abused its discretion in denying leave to amend. “It is an abuse of discretion to sustain a demurrer without leave to amend if there is a reasonable probability that the defect can be cured by amendment. [Citation.]” (Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal. App. 4th 75, 81.) “The plaintiff bears the burden of proving there is a reasonable possibility of amendment. [Citation.] The plaintiff may make this showing for the first time on appeal. [Citation.]” (Rakestraw, supra, 81 Cal.App.4th at p. 43.) Appellant must demonstrate “‘in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.’ [Citation.] The assertion of an abstract right to amend does not satisfy this burden. [Citation.]” (Ibid.) “The burden of showing that a reasonable possibility exists that amendment can cure the defects remains with the plaintiff; neither the trial 14 court nor this court will rewrite a complaint. [Citation.] Where the appellant offers no allegations to support the possibility of amendment and no legal authority showing the viability of new causes of action, there is no basis for finding the trial court abused its discretion when it sustained the demurrer without leave to amend. [Citations.]” (Id. at p. 44.) When asked at oral argument what changes Valentine would make to the complaint, his counsel stated he would eliminate all references to a collective bargaining agreement. Although the opening brief mentions a few additional changes, none of the proposed amendments are sufficient to overcome the deficiencies outlined above. Because Valentine cannot identify what new allegations would salvage his claims, and he has already effectively received two opportunities to amend his complaint, we discern no abuse of discretion in denying leave to amend one more time. DISPOSITION The judgment is affirmed. The parties are to bear their own costs on appeal KRIEGLER, J. We concur: TURNER, P. J. GOODMAN, J. * *Judge of the Los Angeles County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. 15	01-03-2023	11-25-2014
https://www.courtlistener.com/api/rest/v3/opinions/2755309/	Filed 11/25/14 P. v. Winston CA2/3 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION THREE THE PEOPLE, B253557 Plaintiff and Respondent, (Los Angeles County Super. Ct. No. TA129252) v. DARRYL TRACY WINSTON, Defendant and Appellant. APPEAL from a judgment of the Superior Court of Los Angeles County, Sean D. Coen, Judge. Affirmed. Daniel R. McCarthy, under appointment by the Court of Appeal, for Defendant and Appellant. No appearance for Plaintiff and Respondent. Defendant and appellant, Darryl Tracy Winston, appeals from the judgment entered following a jury trial which resulted in his conviction of possession for sale of cocaine base (Health & Saf. Code, § 11351.5) and the trial court’s findings he previously had been convicted of possession for sale of cocaine base pursuant to Health and Safety Code section 11370.2, subdivision (a) and had served a term in prison pursuant to Penal Code section 667.5, subdivision (b) following his conviction of several other felonies. The trial court sentenced Winston to nine years in state prison. We affirm. FACTUAL AND PROCEDURAL BACKGROUND 1. Facts. On July 23, 2013, Los Angeles Police Department Detective John Armando was working in the Southeast Narcotics Unit. At approximately 4:50 p.m., the detective, an experienced narcotics officer, was at the Nickerson Gardens Housing Project, a “location [which] has been the subject of a number of narcotic complaints and . . . an area that [the narcotics team] routinely work[s].” At the time, both Armando and his partner, Officer Nicholas Gallego, who also had extensive training and experience in the area of narcotics, were dressed in plain clothes (jeans and T-shirts) and were in a “plain minivan.” Armando had parked the van just south of Nickerson Gardens, facing west on Imperial Highway. He explained he had parked at that particular location because, although “in Nickerson Gardens there is a network of cameras . . . monitored by the police department at [the] Southeast Station[,] [and] [t]hose cameras provide really good coverage of the projects, . . . there are a number of blind spots.” Armando had parked at the location on Imperial Highway next to a parking area just south of 115th Street because it afforded the officers a good view of a problem spot which was not covered by the cameras, but where Armando and Gallego knew narcotics were being sold. Armando was sitting in the driver’s seat and Gallego was in the seat just behind the front passenger seat. Armando and Gallego, who were approximately 100 feet from Winston, used binoculars and were able to see him “seated against a ledge with a couple of other individuals.” In addition, three or four other people were walking among the cars parked in the parking lot. 2 While Armando and Gallego watched, Winston was approached by a Black woman wearing shorts and a black top. The two “seemed to engage in [a] short conversation at which time she handed [Winston] some money.” Winston accepted the money, stood up and walked to a blue storage container sitting on the lawn approximately 10 feet behind him. He opened the blue container, removed a small red container, then motioned the woman to come to him. Winston opened the red container and removed a small plastic bindle from inside. As he handed the object to the woman, Armando could see that it contained an “off-white solid resembling cocaine base.” The woman took the object, closed her hand and walked away in an “eastward” direction. According to Armando, it was “sunny, daylight,” and he had an “unobstructed view of [Winston].” Gallego, too, indicated the light was “bright” and, although there were trees and a trash container in the area, nothing was obstructing his view. After the woman walked away, Armando and Gallego “formed the opinion . . . a narcotic[s] transaction had occurred and [they] attempted to make contact with [the] female.” Armando made a U-turn on Imperial Highway and proceeded North on Success Street. The officers did not, however, see either the Black woman or Winston. They parked the van in a lot of off 115th Street, got out and began to walk through the apartment complex. There, they saw Winston, “ma[d]e contact with him” and Armando placed him under arrest. In the meantime, Gallego searched Winston’s blue container. Along with some clothing and trash, Gallego found a “small red object about the size of a softball,” removed it from the blue container, opened it and found inside two plastic baggies containing “off-white solid[s] resembling cocaine base.” One of the baggies contained “eight individual off-white rock solids resembling cocaine base” and the other contained “13 off-white rock solid[s] resembling cocaine base.” Once the evidence had been recovered from the red container, Armando searched Winston and found four $5 bills in his right front pocket. Winston and the plastic baggies found in his container were transported to the station. There, the plastic baggies were booked into evidence. They were placed in a manila envelope and “labeled with the case number, [Armando’s] name, [and Winston’s] name.” The envelope was then sealed and 3 placed in a secured locker. From the locker it was later taken to the laboratory for analysis. Based on his “background, training, and experience,” Armando was of the opinion Winston possessed rock cocaine for sale. He based his opinion on the fact he had seen what he believed had been the sale of cocaine, the 21 rocks of cocaine found in Winston’s possession which had been cut and packaged in doses which generally sold for $5, and that Winston, himself, was neither smoking cocaine nor carrying with him smoking paraphernalia. Jane Villegas is a criminalist for the Los Angeles Police Department assigned to the “scientific investigation division narcotics analysis unit.” Villegas, a trained forensic scientist, has been analyzing controlled substances since 1991. On July 24, 2013, Villegas examined the contents of an evidence envelope with Winston’s name on it. She had obtained the sealed envelope from the “narcotics storage locker.” Inside the envelope were two “knotted plastic sandwich bag[s] containing off-white solid[s].” The first baggie weighed 1.92 grams. Using the off-white solids from inside that baggie, Villegas “identified the kind of narcotic by using a microcrystal test and an instrumental analysis.” She concluded the baggie contained “cocaine in the form of cocaine base.” Villegas did not test the off-white solids in the second baggie. Since the solids in the second baggie looked “very similar” to those in the first baggie, she did not believe she needed to perform any tests on them. Villegas had no doubt the solids in the first baggie contained cocaine base. 2. Procedural history Following a preliminary hearing, on August 22, 2013 Winston was charged by information with one count of possession for sale of cocaine base (Health & Saf. Code, § 11351.5), a felony. It was further alleged he previously had been convicted of possession for sale of cocaine base within the meaning of Health and Safety Code section 11370.2, subdivision (a) and had served a prison term within the meaning of Penal Code section 667.5 for convictions of assault with a deadly weapon other than a firearm (Pen. 4 Code, § 245, subd. (c)), battery against a police officer (Pen. Code, § 243, subd. (c)(2)) and the federal offense of being a felon in possession of a firearm. Prior to trial, the prosecutor indicated Armando, the arresting officer, intended to exercise his privilege pursuant to Evidence Code section 1040 to withhold information regarding his whereabouts when he observed Winston sell the cocaine base. At an in- camera hearing held in chambers, Armando testified he believed if the “observation post [were to be] revealed, it would surrender a significant tactical advantage” and “endanger a particular resident [of Nickerson Gardens] who [knew of law enforcement’s] actions at that location.” In addition, the detective indicated the location was “the only spot where [officers could] be undetected without going into the projects [and] that [they were] able to see this one [particular] spot [from] where” they knew drugs were being sold. The trial court determined, although Evidence Code section 1040 might otherwise apply, the evidence was material to the defense and “defense [counsel] would have to have an opportunity to cross-examine regarding the location of the narcotics post.” The prosecutor then argued he should be allowed to present evidence pursuant to Evidence Code section 1101, subdivision (b) that, 13 years earlier, Winston had been convicted of possession for sale of cocaine base. In the 13-year-old case, Winston had been in his residence when he was “found to be in possession of a loaded firearm and . . . was near a cutting board that had rock cocaine on it[.]” The prosecutor argued the evidence would be relevant to show a “common plan.” The trial court, however, determined an incident which had occurred 13 years earlier was too far removed from the present action and it was “not going to allow the admission of [the] prior conduct” or conviction. After the prosecution presented its case, defense counsel made a motion to dismiss the matter pursuant to Penal Code section 1118.1. The trial court denied the motion, indicating “the evidence [was] quite sufficient to show the defendant [was] guilty of the charged count . . . .” While the jury was deliberating on the substantive count, Winston decided, if the jury found him guilty of the offense, he would waive his right to have it determine 5 whether he had been convicted of the alleged prior convictions and served the alleged prior prison term. Winston indicated the court, alone, could make those determinations. During their deliberations, the jury sent the following inquiry to the trial court: “ ‘We would like to hear [D]etective Armando’s testimony.’ ” In response, the trial court sent a note to the jury stating, “ ‘Is there a particular portion of that testimony you would like to hear or would you like to hear all of that testimony?’ ” The jury informed the trial court it wished to “hear [the] entire testimony of Officer Armando.” At approximately 10:50 a.m. on November 18, 2013, the jury indicated it had reached a verdict. The court clerk read the verdict as follows: “We the jury in the above- entitled action find the defendant, Darryl Tracy Winston, guilty of the crime of possession for sale of cocaine base, in violation of Health and Safety Code section 11351.1, a felony, as charged in count 1 of the information . . . .” When the jury was polled, each individual juror indicated he or she had reached this conclusion. At proceedings held on December 2, 2013, the trial court was to determine the truth of the allegations of Winston’s prior convictions and prison term and to impose sentence. However, before the court could address those issues, Winston indicated he wished to have a Marsden1 hearing. After everyone except the court, its staff, Winston and his counsel had left the courtroom, Winston indicated that during trial his counsel had failed to present evidence of his alibi: that although the police officers had testified he had been sitting on a ledge with several other individuals, he had actually been at his home talking on the telephone with his girlfriend. Winston indicated he had a “phone record” which showed this and that there existed a video tape which showed him coming out of his house. Winston added that he had been coming from his front door, had been walking around to the parking lot and had been nowhere near “the ledge” when he was “grabbed” by the officers and taken into custody. Winston believed the officers had been “going for” him and had arrested him although he was innocent of the charge. 1 People v. Marsden (1970) 2 Cal. 3d 118. 6 In response, defense counsel indicated, although she had in her possession a video tape which “show[ed] Mr. Winston coming from the area of 115th where he” resides, it also showed him being detained by Armando in essentially the manner testified to by the detective. According to counsel, the video also “show[ed] the area of the blind spot which is the area in between the two buildings.” With regard to Winston’s girlfriend, counsel had an investigator take her statement and she had indicated she was available to testify. However counsel chose not to call her as a witness because “the statement that was made by her was essentially that there was another individual in the area who looks like Mr. Winston who is involved in the same type of activity . . . .” At the preliminary hearing, the detective had been questioned about this other individual and his responses had apparently not been favorable to Winston. The trial court concluded it “appear[ed] quite obvious to [the] court all decisions . . . [by defense counsel had been made] for tactical reasons.” The court determined “there [had] not been a breakdown in [the] relationship between [counsel] and the defendant” of such a kind that it would be “impossible for [counsel] to properly represent [Winston]” and, accordingly, the court denied Winston’s Marsden motion. After the prosecutor returned to the courtroom, Lynda Johnson testified she is a paralegal for the Los Angeles County District Attorney’s Office who reviews records regarding the criminal histories of defendants. As to Winston, Johnson determined from a packet prepared by the Department of Corrections that, on July 20, 2010, he had been convicted of assault with a deadly weapon other than a firearm upon a peace officer (Pen. Code, § 245, subd. (c)), resisting an executive officer in the performance of his or her duties (Pen. Code, § 69) and battery against a peace officer (Pen. Code, § 243, subd. (c)(2)). For his convictions of those offenses, Winston had been sentenced to four years in prison. The trial court took judicial notice of the packet as well as a file indicating that, in another matter, Winston had been convicted of possession of cocaine base for sale in violation of Health and Safety Code section 11351.5. Fingerprint identification expert, Natasha Lerner, had obtained latent prints from Winston earlier that day while he was in the “lockup room.” Winston’s counsel had been 7 present while she had obtained the prints. Lerner had then compared the prints she had taken to a set of prints on another document. Using the “A.C.E.V.”2 method, Lerner concluded the two sets of prints had been “made by one and the same person.” Although her comparison would later be verified by another examiner, Lerner had no doubt both sets of prints had been made by Winston. After evaluating the evidence presented by Johnson and Lerner, the trial court found the alleged prior convictions and prison term “true beyond a reasonable doubt and that Mr. Winston [was] the individual who [had] been convicted of [the] charges [and served the term.]” After reviewing the probation report, reading the People’s sentencing memorandum, hearing argument by the parties and noting Winston had been on parole at the time of the offense, the trial court sentenced him to the upper term of five years in prison for his conviction of count 1, possession for sale of cocaine base (Health & Saf. Code, § 11351.5). The court imposed an additional consecutive term of three years in prison for the finding Winston previously had been convicted of possession for sale of cocaine base pursuant to Health and Safety Code section 11370.2, subdivision (a). With regard to the finding Winston had previously served a term in prison or county jail pursuant to Penal Code section 667.5, subdivision (b), the trial court imposed a term of one year in prison, the term to run consecutive to the other terms imposed. In total, the trial court sentenced Winston to nine years. Relying on the court’s decision in People v. Griffis (2013) 212 Cal. App. 4th 956, the court determined the sentence was to be served in state prison. With regard to fines and fees, the trial court ordered Winston to pay a $280 restitution fine (Pen. Code, § 1202.4, subd. (b)), a stayed $280 parole revocation restitution fine (Pen. Code, § 1202.45), a $40 court operations assessment (Pen. Code, § 1465.8, subd. (a)(1)), a $30 criminal conviction assessment (Gov. Code, § 70373), and 2 In the abbreviation “A.C.E.V.,” the “A” stands for “analysis,” the “C” stands for “comparison,” the “E” stands for “evaluation” and the “V” stands for “verification.” 8 a $50 laboratory analysis fee (Health & Saf. Code, § 11372.5). Winston was then awarded presentence custody credit for 133 days actually served and 132 days of good time/work time, for a total of 265 days. On December 25, 2013, Winston filed a timely notice of appeal. He requested that the record on appeal include “the entire transcript[] including the pre-trial motions [and] the voir dire.” CONTENTIONS After examination of the record, counsel filed an opening brief which raised no issues and requested this court to conduct an independent review of the record. By notice filed August 13, 2014, the clerk of this court advised Winston to submit within 30 days any contentions, grounds of appeal or arguments he wished this court to consider. No response has been received to date. REVIEW ON APPEAL We have examined the entire record and are satisfied counsel has complied fully with counsel’s responsibilities. (Smith v. Robbins (2000) 528 U.S. 259, 278-284; People v. Wende (1979) 25 Cal. 3d 436, 443.) DISPOSITION The judgment is affirmed. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS KITCHING, J. We concur: KLEIN, P. J. ALDRICH, J. 9	01-03-2023	11-25-2014
https://www.courtlistener.com/api/rest/v3/opinions/1348781/	170 Wis. 2d 406 (1992) 489 N.W.2d 631 STATE of Wisconsin EX REL. DEPARTMENT OF NATURAL RESOURCES, and Town of Richmond, Petitioners-Respondents, v. WALWORTH COUNTY BOARD OF ADJUSTMENT, Respondent-Respondent, Linda M. FRIEDMAN, Intervenor-Appellant. No. 92-0170. Court of Appeals of Wisconsin. Submitted on briefs May 29, 1992. Decided July 15, 1992. 409 On behalf of the intervenor-appellant, the cause was submitted on the briefs of David C. Williams of Allen, Harrison, Williams, McDonell & Swatek of Lake Geneva. On behalf of the petitioners-respondents, State of Wisconsin, the cause was submitted on the brief of James E. Doyle, attorney general, and Lorraine C. Stoltzfus, assistant attorney general. On behalf of the petitioners-respondents, Town of Richmond, the cause was submitted on the brief of David J. Nommensen of Seymour, Kremer, Nommensen & Morrissy of Elkhorn. 410 On behalf of the respondent-respondent, Walworth County Board of Adjustment, the cause was submitted on the brief of Dianne M. Soffa, assistant corporation counsel. Before Brown, Anderson and Snyder, JJ. BROWN, J. This is another case in which a landowner and the DNR do battle over the state's shoreland zoning policies. Here, the landowner contends that the DNR has no standing under our statutes to appeal local board of adjustment decisions, and that even if the DNR does have standing, it did not correctly follow the statute in initiating its appeal. Because the DNR is a "trustee" of the navigational waters of this state, it is a "person aggrieved" and has standing to appeal; further, the DNR correctly followed the statute in initiating its appeal. We affirm as to the DNR. The town of Richmond, however, did not follow the statutes; so we reverse as to it. The landowner is Linda Friedman. She owns the Snug Harbor campground on Turtle Lake. Development and use of the land in this area is regulated by the Walworth County Shoreland Zoning Ordinance. In 1967, the circuit court declared the campground a legal, nonconforming use under the ordinance. In 1990, Friedman decided to make major changes to the campground, including removal of existing cottages and the building of new ones. The zoning administrator for the county determined that while Friedman needed to obtain the usual sewer, erosion control, and building permits, she did not need a zoning permit for development of the campground because the 1967 judgment was still in effect, and the county could not restrict the area without a further court order amending the previous judgment. The DNR and the town of Richmond appealed the zoning administrator's decision to the Walworth County 411 Board of Adjustment, arguing that Friedman's plans for the campground constituted an extension, enlargement or substitution of a nonconforming use. The board upheld the zoning administrator. The DNR and the town then sought certiorari review in the circuit court. The court reversed the board and ordered the board to require Friedman to file an application for a Certificate of Compliance if she wanted to continue with her plans for the campground. Friedman appeals.[1] [1] We initially address the standing issue. Section 59.99(4), Stats., provides that appeals of zoning decisions may be taken "by any person aggrieved or by any officer, department, board or bureau of the municipality affected by any decision of the . . . administrative officer." Friedman argues that the DNR lacks standing because it is not a "person aggrieved" or a municipal officer, department, board or bureau. Friedman further contends that sec. 59.971, Stats., permits the DNR to require a county to adopt a shoreland zoning ordinance, but it provides for the county board of adjustment to handle variances and appeals regarding the shorelands. She also argues that according to Just v. Marinette County, 56 Wis. 2d 7, 18, 201 N.W.2d 761, 769 (1972), when the state required counties to pass shoreland zoning ordinances, the state thereby delegated authority over the navigable waters of the state to the county. Friedman concludes that the statutory framework was designed such that the boards of adjustment are the final arbiters of shoreland zoning policy, not the DNR. 412 [2] We conclude that the DNR does have standing to appeal zoning decisions regarding shorelands. The DNR is a "person aggrieved" by a county decision affecting shorelands because it is a trustee of the navigable waters of the state. Our supreme court has recognized that the state has standing to appeal decisions which violate the public trust. State v. Deetz, 66 Wis. 2d 1, 13, 224 N.W.2d 407, 413 (1974). Moreover, according to Just, the DNR has a duty to appeal decisions which do not comply with shoreland zoning requirements. Just, 56 Wis. 2d at 18, 201 N.W.2d at 768. Additionally, both our supreme court and this court have implicitly granted standing to the DNR to appeal county zoning decisions. See State v. Trudeau, 139 Wis. 2d 91, 94-95, 408 N.W.2d 337, 339 (1987), cert. denied, 484 U.S. 1007 (1988); State v. Ozaukee Bd. of Adjustment, 152 Wis. 2d 552, 564, 449 N.W.2d 47, 52 (Ct. App. 1989). [3] This policy is borne out by our state administrative rules. See Wis. Adm. Code sec. NR 115.06(4). Administrative rules have the force and effect of law. Law Enforcement Standards Bd. v. Lyndon Station, 101 Wis. 2d 472, 488, 305 N.W.2d 89, 97 (1981). The state's administrative code gives the DNR the responsibility of monitoring the administration and enforcement of shoreland zoning ordinances and the authority to appeal actions of county zoning officials or county boards of adjustment. Wis. Adm. Code Sec. NR 115.06(4). We hold that the DNR has standing. Regarding the issue of whether the DNR and the town's initial appeals to the board of adjustment were timely, Friedman contends that actual verbal notice of the zoning administrator's decision occurred in November 1990 and that this notice, rather than the written 413 notice in December 1990, controls whether the DNR's and town's appeals were timely filed in January 1991. She points to State ex rel. Brookside Poultry Farms v. Jefferson County Bd. of Adjustment, 131 Wis. 2d 101, 117-18, 388 N.W.2d 593, 599 (1986), where our supreme court concluded that because aggrieved residents received no written notice of the issuance of a building permit, the beginning of the building's construction constituted notice and started the clock running on the right to appeal. Here, Friedman argues that the DNR and the town received notice of the zoning administrator's decision in November because they were told that an erosion control permit and a plumbing permit had been issued by the county. She contends, therefore, that the clock must start running on the right to appeal from the date of that notice. Friedman reads Brookside wrongly. The court in that case was faced with a situation where a county failed to promulgate rules for zoning appeals as required by sec. 59.99(4), Stats. The supreme court was concerned that without such rules, access to judicial review would be hampered. Indeed, the court noted that the aggrieved residents had not received written notice of the zoning administrator's issuance of a building permit. Brookside, 131 Wis. 2d at 114, 388 N.W.2d at 598. Noting that sec. 59.99(4) mandates a "reasonable" time to appeal, the supreme court was troubled by the fact that absent notice of the decision, there was no way to determine a "reasonable" time to appeal. Brookside, 131 Wis. 2d at 113, 388 N.W.2d at 597-98. Rather than allow this absurd result, the court looked to the time when the residents first found out about the building permit, fashioned a constructive notice remedy to start the appeal time running from that date, and thereby resolved the case. 414 Here, we do not have the same facts. In this case, the time for appealing the zoning administrator's decision is clearly specified in sec. 10.5, Walworth County Shoreline Zoning Ordinance. That ordinance states: "[A]ppeals shall be filed . . . within (30) days after the date of written notice of the decision or order of the zoning administrator." Id. (emphasis added). A written decision was issued by the zoning administrator in this case. The appeal was filed based upon that written notice. [4] We read Brookside to say that the appeal time begins on one of two dates. If there is a provision in the ordinance for notice, then the clock begins to run at the time the notice is given. If no such provision exists, then the clock begins to run when the aggrieved parties find out about the decision. This rule is designed to expand access to judicial review rather than to limit it. Even if the law were as Friedman suggeststhat notice is either by actual verbal notice or by written decision, whichever comes firstwe would not accept the facts relied upon by Friedman to argue that actual verbal notice of the zoning administrator's decision was given in November 1990. First, the permits relied upon for constructive notice were not issued by the zoning administrator. They were an erosion control permit and a plumbing permit, and thus were not part of the decision of the zoning administrator sufficient to start the clock running for constructive notice purposes. Second, the facts cited by Friedman are taken from affidavits in the motion to dismiss, not from the record of the proceedings as is required for certiorari review. [5] We conclude that the appeal time started running only when the zoning administrator issued a written 415 decision on December 27, 1990. When the DNR's and the town's appeals were filed with the board of adjustment on January 25, 1991, they were timely. Friedman's final argument concerns the proper statutory procedure for certiorari appeals to the circuit court. She cites sec. 801.02(5), Stats., as a prelude to her argument, which we repeat here: An action seeking a remedy available by certiorari . . . may be commenced under sub. (1), by service of an appropriate original writ on the defendant named in the writ if a copy of the writ is filed forthwith, or by filing a complaint demanding and specifying the remedy, if service of an authenticated copy of the complaint and of an order signed by the judge of the court in which the complaint is filed is made . . . within the time period specified in the order. Friedman also cites Tobler v. Door County, 158 Wis. 2d 19, 461 N.W.2d 775 (1990). In that case, our supreme court held that the phrase "under sub. (1)" refers to the summons and complaint process specified in sec. 801.02(1) for the commencement of all civil actions. Tobler, 158 Wis. 2d at 23, 461 N.W.2d at 776. Section 801.02(1) states: A civil action . . . is commenced . . . when a summons and a complaint . . . are filed with the court, provided service of an authenticated copy of the summons and of the complaint is made . . . within 60 days after filing. [6] Friedman properly reads these statutes together with Tobler. She correctly observes that there are two different procedures which can be used to commence certiorari reviewa complaint procedure and a writ procedure. Furthermore, the complaint procedure can be 416 pursued by one of two alternate methods: the complaint and summons method, in which the respondent has sixty days to answer; or, the complaint and court order method, which is used when the time for service or the time for the respondent's answer needs to be shortened. [7] The commencement of the certiorari appeal is measured differently in the complaint procedure than it is in the writ procedure. If an appellant employs the complaint procedure, commencement of the appeal is measured by the act of filing, provided that the complaint and its accompanying document are served on the respondent within the appropriate time period. In contrast, if an appellant employs the writ procedure, commencement of the appeal is measured by the act of serving the original writ, provided that a copy of the writ is filed "forthwith." When combined with the thirty-day commencement requirement in sec. 59.99(10), Stats., sec. 801.02(1) and (5), Stats., indicates that a complaint must be filed within thirty days, whereas a writ must be served within thirty days. The DNR labeled its appeal a Petition for Certiorari. It filed its petition and a summons in circuit court within thirty days of the board's decision and served both on the board the same day. The town filed a petition for a writ of certiorari also within thirty days of the board's decision. The town obtained the writ the day it filed the petition, but did not serve the writ until more than a month later. Friedman argues that the DNR's appeal to the circuit court was defective because it was designated a Petition for Certiorari, and this is not one of the three methods for initiating review. She argues that the town's appeal was defective because it filed the appeal as a "writ," but it did not meet the service requirements for a 417 writ in two respects: it did not serve the board with the writ until well after the statutory time period of thirty days from the board's decision specified in sec. 59.99(10), Stats.; and it did not serve the original writ, as required by sec. 801.02(5), Stats. Apparently, Friedman argues that the circuit court lacked personal jurisdiction because of these defects. [8] We reject Friedman's argument as to the DNR. The information supplied in the "petition" was the same kind of information that would be supplied in a "complaint." It served the same purposenotice to the other parties of claims for relief. The only difference is in the label. As such, the fact that the appeal was commenced by service of a summons and petition rather than a summons and complaint is precisely that kind of hypertechnical defect that the law chooses to ignore unless there is prejudice. [9] The test regarding whether a defect is hypertechnical or so fundamental as to affect personal jurisdiction is set forth in American Family Mut. Ins. Co. v. Royal Ins. Co., 167 Wis. 2d 524, 533, 481 N.W.2d 629, 632 (1992). The supreme court wrote that "[d]efects are either technical or fundamentalwhere the defect is technical, the court has personal jurisdiction only if the complainant can show the defendant was not prejudiced, and, where the defect is fundamental, no personal jurisdiction attaches regardless of prejudice or lack thereof." Id. [10] Fundamental errors are those errors in which there is a failure to comply with sec. 801.02(1), Stats., i.e., where the complainant fails to file a summons and complaint naming the defendant, where the copy served upon the defendant is not authenticated, or where the 418 service of the authenticated copy of the summons and complaint is not made within sixty days after the filing. American Family, 167 Wis. 2d at 533-34, 481 N.W.2d at 632-33. Thus, it is a fundamental error if a complaint is not filed. To determine what a "complaint" is, we look to sec. 802.02(1)(a), Stats. That section refers to a "pleading" which is: "[a] short and plain statement of the claim, identifying the transaction or occurrence or series of transactions or occurrences out of which the claim arises and showing that the pleader is entitled to relief." This pleading must also contain a "demand for judgment for the relief the pleader seeks." Section 802.02(1)(b). [11] While sec. 801.02(1), Stats., refers to this pleading as a "complaint," it is clear from sec. 802.02(1), Stats., that the name for the pleading is not important; rather, it is the content of the pleading which is important. We conclude that the DNR's summons and petition were the same in content and purpose as if they were called a summons and complaint. Thus, the DNR did not run afoul of sec. 801.02(1). The naming of the pleading as a "petition" was a technical error that did not cause prejudice. Friedman cites State ex rel. Schwochert v. Marquette County Bd. of Adjustment, 132 Wis. 2d 196, 206, 389 N.W.2d 841, 845 (Ct. App. 1986), where we wrote that "the petition is not a complaint." In Schwochert, the appellant did not serve a summons with the petition. Therefore, the petition stood by itself and the error was fundamental. Here, the DNR filed and served a summons with its petition. Therefore, Schwochert is easily distinguished. The DNR's pleading passes muster. We hold, however, that there was error involving the town of Richmond's appeal. The town chose to use a *419 writ rather than a complaint. Having chosen to use a writ, the town was obliged to obtain a writ from the court and serve the original writ upon the board within thirty days of the board's decision. Although the town requested the writ and obtained it from the court in the necessary time, it did not serve the writ on the board until more than two months after the board's decision. [12] The circuit court lacked jurisdiction because the date of service measures the commencement of an appeal by writ. Furthermore, we cannot construe the writ as a summons and complaint procedure because the town did not file a summons. Therefore, we reverse the court's order as to the town. By the Court.Order affirmed in part and reversed in part. NOTES [1] Although named as a respondent, the Walworth County Board of Adjustment filed a brief largely supporting Friedman's arguments. Because the board's arguments are subsumed in Friedman's contentions, we will refer only to Friedman.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348782/	144 S.E.2d 416 (1965) 265 N.C. 477 STATE v. Otis BEST. No. 338. Supreme Court of North Carolina. October 20, 1965. 417 Atty. Gen. T. W. Bruton and Asst. Atty. Gen. James F. Bullock for the State. Braswell & Strickland, by Thomas E. Strickland, Goldsboro, for defendant appellant. PARKER, Justice. The State's evidence shows the following facts: About 9:45 p. m. on 9 January 1965 in the city of Goldsboro defendant drove an automobile out of Slaughter Street and proceeded east on Elm Street at a speed of 50 miles an hour, with his automobile going back and forth across the street. He ran three automobiles meeting him off the street. He ran through a stop sign and a red traffic light. Two police officers of the city of Goldsboro, who were riding in a police car, followed him with their siren blowing, but he did not stop until he reached a service station ten or twelve blocks from where the officers first sounded the siren. The officers went to his automobile, opened the door, and asked him to get out. He did so, took two or three steps, fell up against the side of his automobile and propped himself up. His eyes were very red, he had a very strong odor of intoxicating liquor on his breath, his speech was "slurry," and he could not walk "under his own power." In the back seat of his car were several empty beer cans. In the opinion of the two officers, he was under the influence of intoxicating liquor. The officers arrested him, helped him to walk to their car, carried him to the city hall, and booked him for driving an automobile on a public street in the city of Goldsboro while under the influence of intoxicating liquor or drugs. Defendant's evidence is to this effect: He had had two or three beers, but he was not under the influence of anything intoxicating. He was not unsteady on his feet. He was driving his car normally, and not going back and forth across the street. The State's evidence was amply sufficient to carry its case to the jury. Defendant made no motion for judgment of nonsuit at the close of all the evidence, and makes no contention in his brief that the State's case should have been nonsuited. The prosecuting officer in his argument to the jury said: "Let's take these drunken drivers off of the streets so we can get home tonight." Defendant objected to this statement, and the trial judge promptly instructed the jury not to consider this statement by the prosecuting officer. Defendant assigns as error that the trial court did not go further and instruct the jury that such statement by the prosecuting officer was unfair and prejudicial to him. In our opinion, the prompt action of the trial judge in instructing the jury not to consider this statement by the prosecuting officer corrected any prejudicial effect of such statement, and was to the effect that such statement was improper. So far as the record discloses, defendant was satisfied with the trial court's instruction to the jury, and did not request the trial judge to instruct the jury further that such statement was unfair and prejudicial to him, but makes that contention for the first time in his assignment of error. This assignment of error is overruled. Defendant assigns as error that the court "erred when it failed to state any of the evidence and apply the law thereto." 418 G.S. § 1-180 reads in relevant part: "He [the judge] shall not be required to state such evidence except to the extent necessary to explain the application of the law thereto * * ." The trial court stated no evidence in its charge, but, immediately after defining "under the influence of intoxicating" liquor within the meaning of G.S. § 20-138 in substantially the same language as used in State v. Carroll, 226 N.C. 237, 37 S.E.2d 688, did apply the law to the evidence as follows: "The Court charges you that if you find from the evidence and beyond a reasonable doubt that on the 9th day of January of this year the defendant Otis Best operated a motor vehicle, automobile, on the streets of Goldsboro, and that at that time and place he had previously taken a sufficient quantity of intoxicating beverage of some kind to cause him then and there to have lost the normal control or use of his bodily or mental faculties, either or both, to an appreciable degree of either or both of those faculties, then upon such finding, beyond a reasonable doubt, it would be your duty to return a verdict of guilty. "If you fail to so find, or if you have a reasonable doubt about it, it would be your duty to return a verdict of not guilty." Then, at the end of its charge the record shows the following: "The Court inquires of counsel: `Are there any further instructions desired?' Counsel for defendant and the Solicitor answered: `No sir.'" This Court said in Morris v. Tate, 230 N.C. 29, 51 S.E.2d 892: "The statute [G.S. §§ 1-180], therefore, sensibly requires, on the part of the judge, a statement of the evidence to which he is attempting to apply the law. It is true that our decisions have rationalized the statute so that the statement of the evidence it requires may be dispensed with when the facts are simple; Duckworth v. Orr, 126 N.C. 674, 677, 36 S.E. 150; State v. Reynolds, 87 N.C. 544; State v. Grady, 83 N.C. 643; thus leaving the court another troublesome penumbra to deal with in its line-fixing burdens." See also State v. Thompson, 226 N.C. 651, 39 S.E.2d 823; State v. Thompson, 257 N.C. 452, 126 S.E.2d 58. The evidence was simple and direct and without equivocation and complication. While the charge is not a model to be followed, it is our opinion that under the factual situation here it is a sufficient compliance with the requirements of G.S. § 1-180. This assignment of error is overruled. The warrant charges defendant with unlawfully and wilfully operating an automobile while under the influence of intoxicating liquor or drugs. G.S. § 20-138, inter alia, prohibits the operation of an automobile on a highway within the State while under the influence of narcotic drugs, not under the influence of drugs. As to the duplicity of charging two of the criminal offenses created and defined in G.S. § 20-138, see State v. Thompson, 257 N.C. 452, 126 S.E.2d 58. However, by going to trial without making a motion to quash, defendant waived any duplicity in the warrant. State v. Merritt, 244 N.C. 687, 94 S.E.2d 825; State v. Thompson, 257 N.C. 452, 126 S.E.2d 58. There can be no trial, conviction or punishment without a formal and sufficient accusation. State v. Stubbs, 265 N.C. 420, 144 S.E.2d 262. We have repeatedly said that prosecuting officers should carefully read warrants and indictments before proceeding to trial. The verdict in the instant case was guilty. Every feature of the trial discloses that both the State and defendant considered this criminal prosecution related solely to whether defendant was operating an automobile on a public street in Goldsboro while under the influence of intoxicating 419 liquor. The evidence and the charge do not refer in any way to drugs. The court, in its charge, treated the warrant as charging only one criminal offense, namely, the operation of an automobile on a public street of the city of Goldsboro while under the influence of intoxicating liquor, and whether defendant was guilty of this criminal offense was the only question submitted to the jury. There can be no doubt as to the identity of the criminal offense of which defendant was convicted. What was said in a similar factual situation in State v. Thompson, 257 N.C. 452, 126 S.E.2d 58, is controlling here: "A verdict, apparently ambiguous, `may be given significance and correctly interpreted by reference to the allegations, the facts in evidence, and the instructions of the court.' State v. Smith, 226 N.C. 738, 40 S.E.2d 363; State v. Beam, supra [255 N.C. 347, 121 S.E.2d 558]. `The verdict should be taken in connection with the charge of his honor and the evidence in the case.' State v. Gilchrist, 113 N.C. 673, 676, 18 S.E. 319, and cases cited; State v. Gregory, 153 N.C. 646, 69 S.E. 674; State v. Wiggins, 171 N.C. 813, 89 S.E. 58. When the warrant, the evidence and the charge are considered, it appears clearly the jury, by their verdict, found defendant guilty of operating a motor vehicle on the public street of Graham while under the influence of intoxicating liquor." The solicitor for the State and counsel for defendant agreed upon the case on appeal. All the evidence in the record is by question and answer, and not in narrative form, and therefore does not comply with Rule 19(4), Rules of Practice in the Supreme Court, 254 N.C. 783, p. 800; State v. McNeill, 239 N.C. 679, 80 S.E.2d 680. This Rule is mandatory and may not be waived by the parties. State v. Powell, 238 N.C. 550, 78 S.E.2d 343; State v. McNeill, supra. While defendant has failed to comply with Rule 19(4), Rules of Practice in the Supreme Court, we have discussed seriatim his assignments of error and found them untenable. According to our decisions, the judgment will be affirmed, and the appeal dismissed, as no error appears in the record proper. State v. Powell, supra; State v. McNeill, supra. Judgment affirmed; appeal dismissed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1348827/	112 Ga. App. 209 (1965) 144 S.E.2d 565 RICHMOND COUNTY HOSPITAL AUTHORITY v. McLAIN. 41240. Court of Appeals of Georgia. Submitted April 5, 1965. Decided September 9, 1965. 210 Gould B. Hagler, for plaintiff in error. Harris, Chance, McCracken, & Harrison, Henry T. Chance, Henderson, Salley & Cushman, Julian B. Salley, Jr., contra. DEEN, Judge. Under Code Ann. § 114-101, an employer for Workmen's Compensation purposes includes, as to governmental units, the State of Georgia, all departments and political divisions thereof, counties and municipalities. With certain stated exceptions it does not include any non-profit corporation. Public charities are explicitly excluded under Code Ann. § 114-107. The Richmond County Hospital Authority is a public non-profit corporation. Code Ann. §§ 99-1502 (a), 99-1506. The general rule is that an authority, which is an agency of one or more participating governmental units created by statute for the specific purpose of having delegated to it certain functions governmental in character, is not a political subdivision unless recited to be so in the pertinent constitutional or statutory instruments creating it. N. Y. Leg. Doc. Vol. 5 (1965) p. 63, Legal Character of the Public Authority; Encyclopedia of Ga. Law, Vol. 3, § 4, p. 8, Nature of Authorities. The Hospital Authorities Law (Ga. L. 1941, p. 241 et seq.; Code Ch. 99-15) has no such language. A cursory analysis of its structure indicates that it was intended to create public corporate agencies of the political subdivisions involved, managed by qualified persons appointed by the governing bodies of such political subdivisions, and having a corporate entity so as to 211 be able to contract with them, but without power to tax or to elect officials and without any political geographic area. These latter characteristics are generally inherent in the concept of a political subdivision. Ty Ty Consolidated School District v. Colquitt Lumber Co., 153 Ga. 426 (1) (112 S.E. 561). Ch. 99-15 makes frequent use of the term "political subdivision," always in reference to the creating city, town, municipality or county, and never in connection with the authority itself. The same careful distinction between the political subdivision as creator and the authority as agent is observed in the constitutional framework (Art. VII, Sec. VI) authorizing the establishment of authorities for specified purposes. Code Ann. § 2-5901 (c) provides: "Any city, town, municipality or county of this State, or any combination of the same, may contract with any public agency, public corporation or authority for the care, maintenance and hospitalization of its indigent sick." A different result has been reached only where the statute itself, either in terms or by inference, enlarges the general meaning of the word "authority" so as to make it a political division by definition. See in this connection Comm. of Int. Rev. v. Shamberg's Estate, 144 F2d 998. In DeJarnette v. Hospital Authority of Albany, 195 Ga. 189, 200 (23 SE2d 716) a hospital authority created under Code Ann. § 2-5901 (c) was referred to as an "organization" to carry out the duty owned by the State to its indigent sick. In Knowles v. Housing Authority of Columbus, 212 Ga. 729, 730 (95 SE2d 659, 61 ALR2d 1241) it was referred to as an "instrumentality" of the State. In Stegall v. Southwest Ga. Regional Housing Authority, 197 Ga. 571 (4) (30 SE2d 196) the Supreme Court, dealing with a housing authority, the statute creating which is closely akin to that creating hospital authorities, held that a housing authority "is not a county, municipality, or political division" within the purview of the constitutional provision stating the purposes for which debts may be incurred for governmental purposes. Therefore, neither the language of Code Ch. 99-15 which refers to a hospital authority as a "body corporate and politic" nor that which assigns to it "public and essential governmental functions" is sufficient to constitute it a political *212 division of the State. Since it is not included within any class designated as an employer for purposes of Workmen's Compensation in Code Ann. § 114-101, it follows that an employee of the Richmond County Hospital Authority who sustained an accident arising out of and in the course of her employment by such employer is not entitled to compensation benefits. We readily agree that counties are employers under the Act, that public health and care of the indigent sick are county purposes, and that the Hospital Authority under its contract with Richmond County receives county funds raised by taxation and uses them for this purpose. There is no logical reason why hospital employees are covered when the hospital is operated directly by a city or county, and not covered when it is operated for the benefit of the city or county by an authority created with that particular end in view, but this is a matter which addresses itself to the legislative rather than the judicial branch of government. The Judge of the Superior Court of Richmond County erred in affirming the award. Judgment reversed. Felton, C. J., and Jordan, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349265/	622 N.W.2d 170 (2001) 9 Neb.App. 957 Jose HARO, Appellee, v. BEEF AMERICA, Appellant. No. A-00-683. Court of Appeals of Nebraska. February 13, 2001. 171 Paul M. Smith and Joseph E. Andres, Omaha, for appellant. Todd Bennett, of Rehm & Bennett, Lincoln, for appellee. IRWIN, Chief Judge, and INBODY and CARLSON, Judges. IRWIN, Chief Judge. I. INTRODUCTION Beef America appeals from an order entered by a review panel of the Nebraska Workers' Compensation Court affirming an award of a single judge of the court granting compensation for injury caused to Jose Haro by a work-related accident. Beef America challenges the court's findings regarding temporary total disability and loss of earning capacity. Because we find sufficient evidence in the record to support the court's findings, we affirm. II. BACKGROUND On December 22, 1998, Haro filed a petition in the Nebraska Workers' Compensation Court alleging that he sustained a compensable injury in approximately December 1995. Specifically, Haro alleged injuries to his neck, back, and arms from lifting activities in the course of his employment with Beef America. Haro prayed for temporary disability benefits, permanent disability benefits, payment of medical expenses, vocational rehabilitation, waiting time penalties, attorney fees, and interest. The record indicates that Haro sought medical treatment on November 22, 1995. The record further indicates that Haro's last date of employment with Beef America was November 24. An MRI was performed on Haro on November 29. The record does not contain any medical documentation concerning Haro or his injury between December 1995 and December 4, 1996, when Haro was seen by Dr. James Froggatt. Dr. Froggatt reviewed the MRI results from November 1995 and recommended a surgical procedure. Dr. Froggatt performed a diskectomy and fusion operation on December 10, 1996. Dr. Froggatt's records indicate his opinion that Haro's "cervical injury is aggravated by his work and activities at Beef America on or about November 17, 1995." Dr. Froggatt assigned Haro a 7-percent body as a whole permanent impairment rating. Dr. Froggatt recommended certain permanent work restrictions: Haro's lifting was not to exceed 30 pounds 172 continuously and he was not to "work at or above the shoulder level." Another physician, Dr. Michael O'Neil, expressed his opinion "with reasonable medical certainty that Mr. Haro's work at Beef America aggravated a pre-existing degenerative cervical disc disease ... as well as pre-existing congenital narrowing of the mid-cervical spine." Dr. O'Neil opined that Haro was asymptomatic prior to November 1995. Dr. O'Neil assigned Haro a 9-percent body as a whole permanent impairment rating. Dr. O'Neil recommended permanent work restrictions, including avoiding repetitive work which requires rapid movement of Haro's head and neck in an upper or side-to-side direction. The court appointed a vocational rehabilitation counselor to conduct a loss of earning power evaluation. The counselor indicated that Haro's average weekly wage at the time of the injury was $260. The counselor then evaluated Haro's impairment ratings from Drs. Froggatt and O'Neil, Haro's loss of access to employment markets for skilled and unskilled labor as a result of the restrictions recommended by each doctor, and Haro's loss of future earning capacity under each doctor's findings. The counselor then concluded that based on a preinjury average weekly wage of $260, Haro suffered a 37.7-percent overall loss of earning power under Dr. Froggatt's findings and a 5-percent overall loss of earning power under Dr. O'Neil's findings. On November 24, 1999, the compensation court entered an award granting Haro compensation benefits. The court found that Haro suffered a compensable injury on or about November 17, 1995. The court found that Haro was temporarily totally disabled from November 25, 1995, the day after his last date of employment with Beef America, through December 10, 1997, the date Haro reached maximum medical improvement according to Dr. Froggatt. The court found that Haro suffered a permanent loss of earning power. The court accepted Dr. Froggatt's opinions over those of Dr. O'Neil and concluded that Haro's permanent loss of earning power is 40 percent. The court recognized that 40 percent is "slightly in excess" of the vocational rehabilitation counselor's opinion based on Dr. Froggatt's findings, but justified the increase to 40 percent by noting that the counselor had used the wrong preinjury average weekly wage of $260, rather than the proper figure of $325 that was stipulated to by the parties. The court further ordered Beef America to pay certain medical expenses and deferred ruling on Haro's entitlement to vocational rehabilitation. III. ASSIGNMENTS OF ERROR On appeal, Beef America assigns two errors. First, Beef America asserts that the compensation court erred in finding that Haro's temporary total disability began on November 25, 1995. Second, Beef America asserts that the compensation court erred in finding that Haro sustained a 40-percent loss of earning capacity. IV. ANALYSIS 1. STANDARD OF REVIEW An appellate court may modify, reverse, or set aside a decision of the Workers' Compensation Court only when (1) the compensation court acted without or in excess of its powers; (2) the judgment, order, or award was procured by fraud; (3) there is not sufficient competent evidence in the record to warrant the making of the order, judgment, or award; or (4) the findings of fact by the compensation court do not support the order or award. Owen v. American Hydraulics, 258 Neb. 881, 606 N.W.2d 470 (2000); Brouilette v. DBV Enters., 9 Neb.App. 757, 619 N.W.2d 482 (2000). In determining whether to affirm, modify, reverse, or set aside a judgment of the Workers' Compensation Court review panel, a higher appellate court reviews 173 the findings of the single judge who conducted the original hearing. Owen v. American Hydraulics, supra. Upon appellate review, the findings of fact made by the trial judge of the compensation court have the effect of a jury verdict and will not be disturbed unless clearly wrong. Id. If the record contains evidence to substantiate the factual conclusions reached by the trial judge in workers' compensation cases, an appellate court is precluded from substituting its view of the facts for that of the compensation court. Miller v. E.M.C. Ins. Cos., 259 Neb. 433, 610 N.W.2d 398 (2000). Regarding questions of law, an appellate court in workers' compensation cases is obligated to make its own determinations. Miller v. E.M.C. Ins. Cos., supra; Owen v. American Hydraulics, supra. 2. TEMPORARY TOTAL DISABILITY Beef America's first assigned error is that the compensation court erred in finding that Haro's temporary total disability began on November 25, 1995. Beef America asserts that Haro failed to present any medical evidence to document that he was temporarily totally disabled between November 25, 1995, and December 4, 1996. As such, Beef America asserts that without such medical testimony, the compensation court did not have sufficient competent evidence to support a finding of temporary total disability during that period. Beef America does not specifically challenge the court's finding that Haro was temporarily totally disabled through December 1997, but only specifically challenges the finding concerning the 1 year period between November 1995 and December 1996 during which Haro presented no medical documentation. As such, our discussion is limited to the court's finding of temporary total disability between November 1995 and December 1996. According to the record presented to us, Haro was seen at an emergency room on November 22, 1995. The emergency room records indicate that Haro had previously been seen by Dr. William Becker on November 20 or 21. It appears that Dr. Becker "told [Haro] to rest and ... allowed [him] to return to work." The doctor who saw Haro in the emergency room on November 22 referred Haro to an orthopedic surgeon, Dr. Stephen Smith, and directed Haro to "rest and not work." On November 27, Dr. Smith ordered an MRI and released Haro to work with restrictive duties. It appears that Haro did not return to work, and Beef America's records indicate that Haro's last day of employment was November 24, 1995. The next medical evidence in the record is when Haro was seen by Dr. Froggatt on December 4, 1996. Dr. Froggatt's records indicate his opinion that Haro's degenerative disk problems were aggravated by his employment. Dr. O'Neil also opined that Haro's employment with Beef America aggravated a preexisting degenerative disk disease that had been asymptomatic prior to November 1995. On appeal, Beef America has not assigned as error the compensation court's finding, based on these opinions, that Haro's injury was work related. It has been firmly established in Nebraska that while expert witness testimony may be necessary to establish the cause of a claimed injury, the compensation court does not need to depend on expert testimony to determine the degree of disability but instead may rely on the testimony of the claimant. Cords v. City of Lincoln, 249 Neb. 748, 545 N.W.2d 112 (1996). See, also, Xayaseng v. Chief Indus., 7 Neb.App. 911, 586 N.W.2d 472 (1998); Bryson v. Vickers, Inc., 7 Neb. Ct. App. 595, 584 N.W.2d 44 (1998). As such, although Beef America is correct in noting that there is no medical documentation that Haro was temporarily totally disabled between November 1995 and December 1996, there is medical evidence to establish the cause of Haro's injury as work related, and the compensation court was free to consider Haro's own testimony in assessing whether he was totally disabled during the year in question. 174 Haro testified that he had not returned to work since leaving Beef America. He testified that he feels dizzy or light headed "all the time." He testified that since suffering the injury, he cannot bend without pain from the back of his head down to the middle of his back and that he experiences pain when he sits, lies down, or walks. According to Haro, he suffers pain "all the time." When asked if he was able to work, Haro testified: "I want to work, but I can't work `cause I'm real sick." In his deposition, Haro testified that he had never had problems with his back or neck prior to the injury at Beef America. Finally, on December 10, 1996, Dr. Froggatt's notes report that Haro was not working "because of the functional disability of the neck and arm pain." As noted above, the compensation court was entitled to rely on Haro's testimony in determining the extent of his disability during the year between November 1995 and December 1996. Given our standard of review, the evidence in the record, and the acknowledged authority of the compensation court to make its own determinations of disability, we cannot say that the compensation court erred on this issue. This assigned error is without merit. 3. LOSS OF EARNING CAPACITY Beef America next challenges the compensation court's finding that Haro suffered a 40-percent loss of earning capacity. The court-appointed vocational rehabilitation counselor completed a loss of earning power evaluation. In the evaluation, she concluded that Haro's average weekly wage at the time of the injury was $260. She then considered the permanent impairment ratings and permanent work restrictions recommended by Drs. Froggatt and O'Neil. Because Drs. Froggatt and O'Neil reached different impairment ratings and recommended different permanent physical restrictions, the vocational rehabilitation counselor reached two separate conclusions as to Haro's overall loss of earning capacity. The counselor concluded that based on Dr. Froggatt's opinions, Haro suffered a 37.7-percent overall loss of earning capacity. The counselor concluded that based on Dr. O'Neil's opinions, Haro suffered only a 5-percent overall loss of earning capacity. The compensation court considered the vocational rehabilitation counselor's two different opinions concerning Haro's loss of earning capacity. Of the two opinions, the court chose to "give greater weight to the opinions of Dr. Froggatt." The court concluded that Dr. Froggatt treated Haro over a longer period of time than did Dr. O'Neil and that Dr. Froggatt performed the surgery on Haro, thus making Dr. Froggatt's opinions more credible than Dr. O'Neil's. However, rather than setting Haro's loss of earning capacity at 37.7 percent, as the vocational rehabilitation counselor recommended based on Dr. Froggatt's opinions, the court found Haro's lost earning capacity to be 40 percent. The court attributed this increase to the fact that the vocational rehabilitation counselor based her opinion on the belief that Haro's average weekly wage at the time of the injury was $260, while the parties had specifically stipulated that it was $325. On appeal, Beef America challenges both the court's acceptance of the valuation based on Dr. Froggatt's opinions and the court's increasing of the counselor's opinion from 37.7 percent to 40 percent. There is evidence in the record to support the court's conclusions that Dr. Froggatt treated Haro over a longer period of time and was the physician who performed the surgery on Haro. As such, there is credible evidence in the record to support the court's factual conclusion that Dr. Froggatt's opinions concerning Haro's permanent impairment and physical restrictions were entitled to more weight than those of Dr. O'Neil. As such, given our standard of review and the evidence in the record, we cannot say the *175 compensation court erred in choosing Dr. Froggatt's opinions over Dr. O'Neil's. However, the fact that the court was justified in choosing Dr. Froggatt's opinions does not end our consideration of whether the permanent loss of earning capacity awarded by the court contains support in the record. As noted above, the vocational rehabilitation counselor opined that Haro's permanent loss of earning capacity was 37.7 percent based on Dr. Froggatt's impairment rating and physical restrictions. Because the vocational rehabilitation counselor was operating under the mistaken belief that Haro's average weekly wage at the time of the injury was $260, rather than $325, the court concluded that the 37.7-percent figure needed to be increased "slightly" to 40 percent. Neb.Rev.Stat. § 48-121(2) (Reissue 1998) provides that for permanent partial disability, an employee is entitled to compensation at the rate of "sixty-six and two-thirds percent of the difference between the wages received at the time of the injury and the earning power of the employee thereafter." Using this formula, as well as the vocational rehabilitation counselor's belief that Haro was receiving $260 per week at the time of the injury and the counselor's ultimate conclusion that Haro suffered a 37.7-percent loss of earning capacity, it is apparent that the counselor concluded that Haro's earning capacity after the injury was approximately $161.98 (.623 x $260 = $161.98). Using this formula, as set forth in the statute, Haro would have been entitled to weekly benefits of $65.38 (.667 x ($260-$161.98) = $65.38). Using this formula, as set forth in the statute, the court's increase of Haro's lost earning capacity from 37.7 percent to 40 percent to account for the discrepancy in the wages Haro was earning at the time of the injury appears arbitrary. In fact, if the proper average weekly wage figure of $325 were used in the formula, along with the counselor's opinion that Haro's postinjury earning capacity was $161.98, the actual lost earning capacity would be closer to 49.8 percent. Additionally, using the correct average weekly wage figure and the counselor's opinion concerning Haro's postinjury earning capacity, Haro would have been entitled to weekly benefits of approximately $108.73 (.667 x ($325-$161.98) = $108.73). As such, there is competent evidence in the record to indicate that Haro suffered a loss of earning capacity as high as 49.8 percent. The compensation court awarded benefits for only a 40-percent loss of earning capacity. Although the record indicates the award should have been higher than it was, Haro has not filed a cross-appeal, and the only issue before us is whether the court erred in increasing the loss of earning capacity from 37.7 percent as suggested by the vocational rehabilitation counselor. Because we find the evidence supports a loss of earning capacity of 49.8 percent, we cannot say that Beef America suffered any prejudice from the court awarding a 40-percent loss of earning capacity benefit. This assigned error is without merit. V. CONCLUSION We find no merit to either of Beef America's assigned errors. There is competent evidence in the record to support a finding that Haro's temporary total disability began in November 1995, there is competent evidence in the record to support the court's decision to accept the loss of earning capacity calculation based upon Dr. Froggatt's opinions, and Beef America was not prejudiced by the court's award of benefits based on a 40-percent loss of earning capacity. The compensation court's award is, accordingly, affirmed. AFFIRMED.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/895878/	566 N.W.2d 790 (1997) 1997 ND 138 Rhonda M. REIMCHE, Plaintiff and Appellant, v. Keith R. REIMCHE, Defendant and Appellee. Civil No. 960239. Supreme Court of North Dakota. July 17, 1997. 792 Kelly Ann Dillon, Minot, for plaintiff and appellant. Debra R. Edwardson, of Edwardson Law Office, Minot, for defendant and appellee. NEUMANN, Justice. [¶ 1] Rhonda M. Reimche appealed from a divorce judgment awarding Keith R. Reimche custody of their son, Tyler, and from an order denying her motion for a new trial. We affirm. [¶ 2] Keith and Rhonda were married in 1989. Tyler was born in 1990. Rhonda sued for divorce in 1994. Both parties sought custody of Tyler at trial on July 17, 1996. The trial court awarded custody of Tyler to Keith, and liberal visitation to Rhonda. The trial court denied Rhonda's motion for a new trial and Rhonda appealed the judgment and the order denying her motion for a new trial. I. [¶ 3] Rhonda contends the trial court erred in denying her motion for a new trial on grounds of irregularity and surprise. Rhonda asserts Keith failed to supplement his December 1, 1994, interrogatory answer that he did "not want custody, just reasonable visitation." She argues she was denied a fair trial because she was without sufficient notice of Keith's intent to seek custody of Tyler. [¶ 4] Rule 26(e)(2)(B), N.D.R.Civ.P., requires a party "seasonably to amend a previous response if the party ... knows that the response though correct when made is no longer true and the circumstances are such that a failure to amend the response is in substance a knowing concealment." The purpose of the rule is to eliminate surprise at trial. Dewitz by Nuestel v. Emery, 508 N.W.2d 334, 339 (N.D.1993). To be seasonable, a supplemental response must be made a reasonable time before trial. Id. A determination of reasonableness is within the sound discretion of the trial judge. Id. [¶ 5] On May 16, 1996, Rhonda's attorney filed a certificate of non-readiness. On May 28, 1996, Keith's attorney filed a responsive motion and brief, stating, in part, that "theonly issue of contention between the parties is custody and visitation concerning the parties' minor son, Tyler Justin Reimche." In a letter of July 11, 1996, Keith's attorney informed Rhonda's attorney: "As to visitation and custody, my client proposes the following: "1. That Rhonda have custody on the condition that the minor child reside with Rhonda at Rhonda's place of residence and that Rhonda resume primary caretaking duties. Also, that the minor child shall be clearly informed of his familial relationships. If these conditions are not met, Keith will seek custody at the trial scheduled for July 17, 1996." In a letter of July 15, 1996, two days prior to trial, Keith's attorney formally supplemented Keith's interrogatory answers by stating, "Yes, Keith is planning to seek custody based on the best interests of the child." [¶ 6] In a discussion following closing arguments at trial, Rhonda's attorney said she received Keith's July 11, 1996, proposal on the Friday or Monday before trial. The trial court asked the parties' attorneys: "I am wondering procedurally if either party would feel disadvantaged because of the way they tried their case if I would interpret the pleadings as they are on their face and make a custody determination instead of assuming that custody had been waived by the Defendant." Rhonda's attorney replied that she would ask for the appointment of a guardian ad litem to "look into the allegations ... that Rhonda is not in fact raising her child" and "[t]o look into the relationship Tyler has with his father." The trial court asked of Rhonda's attorney: "[B]ecause of Friday's or Monday's communication, did you do anything to react to that? Would you do anything differently?" Rhonda's attorney responded: 793 "Quite honestly, at that late notice, I didn't know if I could even line up someone to interview the parties and interview the child, look at the child's home, and be able to be here today." [¶ 7] The trial court ruled "that as of at least the first part of this week, all parties were clear that custody was an issue." The court also determined that appointment of a guardian ad litem was not necessary: "That as to the request to supplement the record by a report from the guardian ad litem, I tend to agree with Ms. Edwardson that the issues enumerated by Counsel Dillon that might be addressed by a guardian ad litem have been presented in court and subjected to cross examination. And as to those specific issues, frankly, the answers to those issues I don't find necessarily determinative anyway. Most of the issues that have been presented or inquired about relate to questions that the Court doesn't have." [¶ 8] In denying Rhonda's motion for a new trial, the trial court noted that in a pretrial telephone conference with both attorneys on July 15, 1996, the court was informed Keith was pursuing custody, and was advised in chambers immediately before trial that Keith was seeking custody. The court also noted that "[a]t neither conference did the Plaintiff express surprise or indicate she was not ready to proceed with the trial." [¶ 9] A continuance is the proper remedy for a party claiming unfair surprise. State v. VanNatta, 506 N.W.2d 63, 69 (N.D. 1993); Williston Farm Equip., Inc. v. Steiger Tractor, Inc., 504 N.W.2d 545, 552 (N.D. 1993). "A judgment will not ordinarily be reversed on appeal for surprise at the trial, where no request is made for a continuance at the time and there is no showing of inability to meet the situation." North Dakota Pub. Svc. Comm'n v. Central States Grain, Inc., 371 N.W.2d 767, 780 (N.D.1985). As this court explained in Hamre v. Senger, 79 N.W.2d 41, 47 (N.D.1956): "As a general rule, a party asking for a new trial on the ground of surprise at evidence must have indicated his surprise to the court at the time, and should not have proceeded with the trial and speculated on the chances of a favorable verdict, but should have asked for delay or a continuance to enable him to overcome the effect of such evidence." "A new trial will ordinarily not be granted for surprise or accident unless ... a new trial will probably result in a changed verdict." Id. "A trial court's denial of a motion for a new trial or for relief from the judgment under Rules 59 and 60 is purely discretionary, and we will not disturb its decision on appeal unless there is an affirmative showing of a manifest abuse of discretion." Frafjord v. Ell, 1997 N.D. 16, ¶ 5, 558 N.W.2d 848. [¶ 10] Rhonda knew before trial that Keith was seeking custody of Tyler. She did not object or request a continuance. Rhonda did not show an "inability to meet the situation," Central States Grain, Inc., 371 N.W.2d at 780, or that "a new trial will probably result in a changed verdict." Hamre, 79 N.W.2d at 47. We conclude the trial court did not abuse its discretion in denying Rhonda's motion for a new trial on the ground of irregularity or surprise. II. [¶ 11] Rhonda contends the trial court's custody award is not supported by the weight of the evidence. We exercise a limited review, as "the trial court's findings `come here well armed with the buckler and shield of ... [Rule] 52(a).'" Hirschkorn v. Severson, 319 N.W.2d 475, 479 (N.D.1982) (quoting Horton v. U.S. Steel Corp., 286 F.2d 710, 713 (5th Cir.1961)). Under Rule 52(a), N.D.R.Civ.P., a finding of fact will not be set aside unless it is clearly erroneous. [¶ 12] "In a divorce proceeding, the trial court must award custody of the minor children based upon a determination of the best interests and welfare of the children." Schestler v. Schestler, 486 N.W.2d 509, 512 (N.D.1992). "The trial court is vested with substantial discretion in matters of custody and in the determination of what is in the best interests of the children." Id. A trial court's custody determination is a finding of fact that will not be set aside on appeal unless it is clearly erroneous. Id. "A trial 794 court's findings of fact are presumptively correct." Fenske v. Fenske, 542 N.W.2d 98, 102 (N.D.1996). "The complaining party bears the burden of demonstrating on appeal that a finding of fact is clearly erroneous." Buzick v. Buzick, 542 N.W.2d 756, 758 (N.D.1996), In reviewing findings of fact, we must view the evidence in the light most favorable to the findings. Chaussee v. Thiel, 520 N.W.2d 789, 791 (N.D.1994). "A choice between two permissible views of the evidence is not clearly erroneous." Id. "Simply because we might view the evidence differently does not entitle us to reverse the trial court." Schestler, 486 N.W.2d at 512. A finding of fact is clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made. Id. [¶ 13] Our limited review of findings of fact recognizes that the trial court is in a better position to evaluate evidence than we are: "This limited scope of review recognizes that the trial court, having had the opportunity to observe and assess the demeanor and credibility of the witnesses, is in a much better position to ascertain the true facts than an appellate court, which must rely on a cold record. We will not reexamine findings of fact made by the trial court upon conflicting evidence, and a choice between two permissible views of the weight of the evidence is not clearly erroneous. When reasonable evidence in the record supports the findings, we will not retry the case to substitute findings we might have made for those of the trial court." (Citations omitted.) Buzick, 542 N.W.2d at 758. See also Fenske, 542 N.W.2d at 102. [¶ 14] The trial court found that Tyler, "since the separation of the parties, primarily has been in the care, custody and control of his maternal grandparents." The trial court considered the factors listed in NDCC 14-09-06.2(1) for determining the best interests and welfare of the child. After stating its findings on the factors listed in NDCC 14-09-06.2(1), the trial court made its custody determination: "12. That the Court finds the determination of child custody in this case is a close call. Based on the Court's overview of the facts, the Court's view of the demeanors of the parties, the Court's impression as to which party would pay the most attention to the child, the Court's understanding from reviewing the file and the evidence that perhaps some of [Keith's] inattention was caused by either legal or intentional frustration of visitation by [Rhonda], it is the Court's finding that the best interests of the child is served by placement of the care, custody and control of the child with the father." In announcing its findings after trial, the court said Rhonda's credibility "in the eyes of the Court is very questionable." In denying Rhonda's motion for a new trial, the trial court said Rhonda's "apparent indifference to the child was a significant factor in the decision as well as demeanor of the parties." [¶ 15] Rhonda admitted lying on a number of occasions and, as the trial court observed, Rhonda's "primary answer to any question waswhether it was relevant, not relevant, important or not importantwas: I don't recall." There was evidence: (1) Tyler was living with Rhonda's parents in Ray, while Rhonda lived in Stanley and visited Tyler in her parents' home on days off from work;[1] (2) Rhonda believes Tyler should make custody and visitation determinations; (3) Rhonda has never allowed Keith to take Tyler for overnight visitation;[2] (4) Tyler was "excited to see" Keith when he visited; (5) If Keith were granted custody of Tyler, Tyler would be living with him, Keith would enroll Tyler 795 in Sunday school, and Keith would not expect his family to be Tyler's primary caregivers; and (6) If Keith were granted custody, "[t]here would be no problem" with visitation for Rhonda. [¶ 16] The record evidence supports the trial court's findings. Our review of the entire evidence has not left us with a definite and firm conviction that a mistake has been made. Rhonda has not met her burden of demonstrating that any of the trial court's findings are clearly erroneous. Viewing the evidence in the light most favorable to the trial court's findings, we conclude the trial court's custody determination is not clearly erroneous. [¶ 17] The judgment and the order denying the motion for a new trial are affirmed. [¶ 18] VANDE WALLE, C.J., and NEUMANN, MARING and SANDSTROM, JJ., concur. SANDSTROM, Justice, concurring. [¶ 19] The dissent's criticizing and impugning the father and the trial judge is, I believe, unfair and unwarranted. [¶ 20] Although the dissent seeks to "invoke Justice Levine" as support, only by redetermining the credibility of witnesses and reweighing the evidencethings Justice Levine constantly reminded this Court it cannot docan the dissent reach its result. [¶ 21] Dale V. Sandstrom MESCHKE, Justice, dissenting. [¶ 22] I respectfully dissent. There is much more to this case than the majority opinion imparts. [¶ 23] Rhonda and Keith married November 3, 1989, at Wahpeton, North Dakota, where both had attended college. They soon moved to the farm home of Keith's parents near Harvey, North Dakota, where their son, Tyler, was born June 1, 1990. Shortly after Tyler's birth, they moved to a farm home near Ray, North Dakota. [¶ 24] There, while Keith attended college in Williston, North Dakota for two years and Rhonda worked, her parents helped care for Tyler. Even when he was home, Keith rarely cared for Tyler because Keith had "too much school work." [¶ 25] In September 1992, Keith moved to Bismarck to attend the University of Mary on school loans. Rhonda and Tyler stayed at Ray where she continued to work. Briefly, in the summer of 1993, they reconciled and lived together, but Keith soon returned to college in Bismarck, while Rhonda and Tyler remained at Ray. Even after Keith graduated from the University of Mary in May 1994, they lived apart, and Keith became employed part-time as a respiratory therapist at a medical center in Harvey. [¶ 26] In July 1994, Rhonda and Tyler moved to her parent's double-wide mobile home in Ray, and she sought a divorce. Keith counterclaimed for custody of Tyler or for reasonable visitation. On December 1, 1994, however, Keith answered Rhonda's discovery interrogatory: "Are you planning to seek custody of your minor child?", by responding: "We do not want custody, just reasonable visitation." [¶ 27] In mid-1995, Keith became employed full-time as a respiratory therapist at a Minot medical clinic with a salary over $22,000 a year, and began rooming at his sister's family home in Minot. After becoming employed, Keith paid nothing for Tyler's "room, board, clothing, [or] medical" even during the year before trial when he was employed full-time. [¶ 28] While living with her parents, Rhonda worked at three part-time jobs around Ray earning about $7,500 during 1994. In 1996, she became employed as a life-skills teacher to developmentally disabled patients at a Tri-City Care home in Stanley, North Dakota and made a daily commute of 36 miles. Her hours were in scattered split-shifts over six days a week: from eleven-thirty A.M. to three P.M., Monday through Friday; four-thirty to ten-thirty P.M. on Monday and Tuesday; six to nine P.M. on Friday; and noon to ten P.M. on Saturdays. When her pickup broke down in late winter 1996, her daily commutes often became weekly commutes. Although both of Rhonda's parents also worked, their separate jobs usually made it possible for them to babysit 796 Tyler while Rhonda worked. Rhonda's sister helped sometimes when her mother's school-bus-driving job took both of her parents out of the home at the same time. [¶ 29] Rhonda's earnings were insufficient for her to get health insurance for herself and Tyler at a cost of $250 monthly, although Rhonda believed Tyler had allergies that she could not afford to have tested, and although Tyler needed a retainer to straighten his teeth. Even after Keith graduated and became employed full-time with an income of $24,000 in 1995, Keith sent Rhonda nothing to help support Tyler. In March 1996, when Keith was asked to send $1,000 to pay for Tyler's dental braces, he stalled ("let's wait and see what comes up") and did nothing to help. [¶ 30] Disposition of the divorce was delayed by various things, including each parents' inability to pay their attorneys and each changing attorneys, but all disputes about property and debt allocation were settled before trial. Less than a week before trial, by a letter mailed Thursday, July 11, Keith made an offer to let "Rhonda have custody" upon vague conditions for her custody and his visitation, and blusteringly threatened: "If these conditions are not met, Keith will seek custody at the trial scheduled for July 17, 1996." [¶ 31] In a telephonic pre-trial conference on Monday, July 15, 1996, two days before trial, Keith's counsel again indicated Keith would seek custody if his custody and visitation conditions were not met. The next day, July 16, Keith's Minot counsel posted a July 15 letter to Rhonda's Minot counsel clearly stating for the first time that Keith intended to seek custody of Tyler at the trial imminent on July 17. The letter said: Pursuant to our recent telephone conference, I hereby informally submit supplemental information pursuant to Rule 26(e)(2). ... 97. Custody of child: Yes, Keith is planning to seek custody based on the best interests of the child.... Unfortunately, when the Minot office of Rhonda's counsel received the July 15 letter on July 17th, Rhonda's counsel was at the trial and did not actually get to read the letter until July 18, after her return from the Williston trial. [¶ 32] After the trial on July 17, although there is virtually nothing in the record to support it, the trial court found: Prior to the trial date, [Keith] informed [Rhonda] that he would be seeking custody of the parties' minor child at trial. Apparently the court based this conclusory finding on the activities of Keith's counsel during the last few days before trial, which the court described: The attorneys for the parties made the positions of their respective clients known to the Court during a telephone conference call on Monday, July 15, 1996, and again in chambers just prior to trial on Wednesday, July 17, 1996. [Rhonda] knew that [Keith] was requesting the Court to make a custody determination based on the best interests of the minor child. [Rhonda] made no objection nor did [she] request a continuance of the trial date. [Keith] tried this action as a custody case. It appeared to the Court that [Rhonda] tried this action as a visitation case. Both parties were given a fair opportunity to try their respective cases as they wished. There was no "fair opportunity" for Rhonda. [¶ 33] At the end of the trial, plainly uncomfortable with the posture of the case, the trial court discussed the procedural difficulty with deciding custody when Keith's unsupplemented discovery answers had confined the contested issue to visitation: During a pretrial conference just this morning, I inquired of each of the attorneys as to what the issues were. And counsel for [Rhonda] indicated from her point of view the issue was visitation and how it should be phased in or whatever. The attorney for [Keith] indicated from her point of view there was a counterclaim in which they were asking alternatives. Either their client, [Keith], have custody, or in the alternative, that some visitation commence immediately[,] is the way I understood what the issues were about. 797 Paging through the file subsequently, I did note this reference to whetherin the discovery as to whether the issue was custody or visitation. I am wondering procedurally if either party would feel disadvantaged because of the way they tried their case if I would interpret the pleadings as they are on their face and make a custody determination instead of assuming that custody has been waived by [Keith]. Counsel for Rhonda felt disadvantaged and immediately sought time to develop further evidence on custody if it was to be tried: If that is the way we proceed, procedurally, I would ask that a guardian ad litem be appointed and that the decision of the Court be deferred until the guardian ad litem has had a chance to report to the Court. Rhonda's counsel outlined what she would expect to develop: To look at both parties and, you know, especially to look atto Rhonda'sto look into the allegations that the defense has brought up that Rhonda is not in fact raising her child. Where it is her contention that she is raising her child. That her mother acts as the baby-sitter, essentially. To look into the relationship Tyler has with his father. To look into how that relationship has grown or has not grown. And to evaluate the impact of Tyler being forced into a situation where he has to spend a weekend without the comfort of his mother or hisor the home that he has grown up in. When the trial court asked Rhonda's counsel what she had done to react to "Monday's communication," two days before, "that this may be a custody issue," she replied (reasonably, in my opinion): Quite honestly, at that late notice, I didn't know if I could even line up someone to interview the parties and interview the child, look at the child's home, and be able to be here today. The trial court concluded, "as to the request to supplement the record by a report from [a] guardian ad litem, I tend to agree with [counsel for Keith] that the issues enumerated by Counsel [for Rhonda] that might be addressed by a guardian ad litem have been presented in court and subjected to cross examination." [¶ 34] Incredibly, the trial court downplayed the importance of the factual questions Rhonda's counsel raised about custody: And as to those specific issues, frankly, the answers to those issues I don't find necessarily determinative anyway. Most of the issues that have been presented or inquired about relate to questions that the Court doesn't have. Even more, the court refused time for Rhonda's counsel to develop further evidence on custody despite "the potential that the kinds of information that may be of assistance to the Court would be based upon home studies, psychological examinations, those kinds of professional reports." [¶ 35] In my opinion, the trial court clearly abused its discretion by rushing to judgment on custody without giving Rhonda an opportunity, as the parent disadvantaged by Keith's misleading and unsupplemented discovery answer, to develop her evidence on custody. In view of Keith's flagrant failure seasonably to supplement his misleading answers to interrogatories, Rhonda was entitled to some relief: "A party is under a duty seasonably to amend a previous [discovery] response if ... (B) the party knows that the response though correct when made is no longer true and the circumstances are such that a failure to amend the response is in substance a knowing concealment." NDRCivP 26(e)(2)(part). See Dewitz by Nuestel v. Emery, 508 N.W.2d 334, 339 (N.D. 1993)(to be seasonable, a supplemental response must be made in reasonable time before trial taking into account the purpose of the rule to eliminate surprise at trial). [¶ 36] For failure to supplement interrogatory answers seasonably, a trial court has wide discretion under NDRCivP 37(d) to order any relief for the disadvantaged party that is designated in subsection(b)(2)(A), (B), and (C) or, "[i]n lieu of any order or in addition thereto, the court shall require the party failing to act or the attorney advising that party or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the court finds that the 798 failure was substantially justified or that other circumstances make an award of expenses unjust." (emphasis added). The trial court made no finding that Keith's failure was substantially justified, and exercised no discretion to grant relief to Rhonda for Keith's failure to seasonably supplement his misleading answer. [¶ 37] At the very minimum, relief for Rhonda should have included more time for her, the disadvantaged party, to marshall supplemental evidence on custody. In my opinion, the trial court abused its discretion in not allowing the time requested by Rhonda's counsel to seek and supply the evidence she felt needed for the suddenly changed character of the trial. [¶ 38] While visitation is always a feature of custody, changing custody is certainly not a recognized feature of a visitation dispute. Custody of a child is much too important a subject for summary judicial action without adequate opportunity to prepare and present evidence. I find it impossible to justify this trial court's arbitrary change of custody away from the child's primary caretaker of six years, and to place it with a virtual stranger of a father, who only visited Tyler eighteen times in three years, each visit being only for a few hours at a time. [¶ 39] From the sole care of his mother, assisted by her parents who babysat Tyler while she worked, during the four continuous years before trial, the trial court found Tyler to be "a very impressive child," who was "bright, confident, outgoing, and unafraid." Strangely, the court credited Tyler's absent father, Keith, equally with Tyler's primary-caretaker: "Both [parents] may be able to take some credit because both had some early input." Paradoxically, the court found Keith "failed to provide financially for his child," and found "this strange attitude of not doing something financially to support a child that he professes to care for, in blunt language, to be very crummy." The trial court recognized "to some extent that [Keith] has exhibited a financial abandonment of the child." Keith's physical and financial abandonment of Tyler should have precluded placing custody with Keith, unless the trial court clearly found Rhonda unfit. [¶ 40] The trial court did not, and could not under the evidence, conclude Rhonda was an unfit mother. She had raised "a very impressive child" without any help from Keith. [¶ 41] The trial court found no lack of parental fitness with Rhonda as a mother, but seems to have made its custodial decision on three relatively unrelated factors: (1) Rhonda did not encourage or permit away-from-home-visitation with Tyler's stranger-father; (2) Rhonda let her parents help too much in raising Tyler; and (3) some perceived evasiveness in Rhonda's testimony about her life with Keith. In my opinion, those reasons are wholly insufficient to take custody from a six-year-old boy's sole caretaker to place him with a parent he barely knew. [¶ 42] On credibility, the trial court remarked that Rhonda's "primary answer to any question, whether relevant or not relevant, important or not important, was, `I don't recall.'" The court then "assume[d] this is an indication of either disdain for the trier of fact or an intention not to truthfully lay out the whole past so that the Court could make an informed decision" on custody. It seems not to have entered the court's head that Rhonda's hesitant answers might have been due to lack of adequate preparation with her attorney on the custody question that they had only barely learned would be a subject at the trial. The court never explained what it was in "the whole past" of these parents that it lacked information about for a custody decision, and the court didn't give Rhonda a chance to try a custody case. [¶ 43] The trial court recognized Rhonda's "parents perhaps can take some credit" for Tyler's "bright, confident, outgoing, and unafraid" character "because it appears that they have had the primary responsibility in the last year and a half, at least." The court felt "the child has not effectively resided with either parent for the last year and a half," although the court grudgingly recognized that it "is obvious that the mother has had significantly more recent contact with the minor child and the Court heard no indication that there was not love and affection and 799 emotional ties" between her and Tyler. The trial court found Tyler's "predominant home was the grandparent's home without significant input from the mother." How the trial court reached this sweeping conclusion should be a matter of a great deal of attention in our review. There is little, if any, evidence for it. [¶ 44] If it was attributable to Rhonda's hesitant testimony, the trial court seems to fault her for holding a low-paying, split-shift job 36 miles from home that kept her away from Tyler most of the week, at least from mid-forenoon to late-night except on Sundays, while she lived with, and relied on, her parents to help care for Tyler. A lone mother, unskilled, uneducated, and without either financial or physical help from an absent father, can hardly be expected to give full-time care to a child at home in today's world. We should be very concerned whether the trial court is demonstrating an undesirable bias without satisfactory evidence about the extent of Rhonda's continuous absence from her parent's home. Except for innuendos from the absent father and his even more distant mother, no one questioned who gave daily care to Tyler. [¶ 45] Sometime ago, this court recognized that the "`primary caretaker' ... concept inheres in the statutory factors" for custodial placement, Gravning v. Gravning, 389 N.W.2d 621, 622 (N.D.1986), but we have yet to fully adopt the primary-caretaker presumption. This case, however, surely demonstrates why we ought to. [¶ 46] Justice Levine explained why we should do so in her separate opinion in Gravning: I believe we should adopt the rule that when equally fit parents seek custody of children too young to express a preference, and one parent has been the primary caretaker of the children, custody should be awarded to the primary caretaker. 389 N.W.2d at 624-25 (footnote omitted). Justice Levine told us how to identify the primary caretaker: The primary caretaker is the parent who provides the child with daily nurturance, care and support. For example, the following have been held to be indicia of primary caretaker status: (1) preparing and planning meals; (2) bathing, grooming and dressing; (3) purchasing, cleaning and care of clothing; (4) medical care, including nursing and trips to physicians; (5) arranging for social interaction among peers; (6) arranging alternative care, i.e., babysitting, day-care; (7) putting child to bed at night, waking child in the morning; (8) disciplining child, i.e., teaching general manners and toilet training; (9) educating, i.e., religious, cultural, social, etc.; (10) teaching elementary skills, i.e., reading, writing and arithmetic.... Id. at 624 n. 1 (citations omitted). There is no evidence that Keith did any of this for Tyler, at least for more than four years. It is clear Rhonda did so nearly continuously, even though she didn't get a reasonable opportunity to offer all the proof she wanted to supply on this aspect. [¶ 47] Eventually, I came to fully agree with Justice Levine that the primary caretaker concept had overriding importance, but we never reached a consensus to satisfactorily implement the presumption while she was on the court, although Justice Levine continued to advocate the need for it. See Branson v. Branson, 411 N.W.2d 395, 401 (N.D.1987)(Levine, J., concurring and dissenting); Kaloupek v. Burfening, 440 N.W.2d 496, 500 (N.D.1989)(Levine, J., dissenting). In Dinius v. Dinius, 448 N.W.2d 210, 217-19 (N.D.1989), I joined in Justice Levine's "thoughtful dissent," which urged that the statutory factors, NDCC 14-09-06.2(4) and (5), if "properly construed," "would have[] awarded custody to the primary caretaker, who in this case was the mother." In a brief separate opinion, I agreed, id. at 219: "When factors 4 and 5 are properly weighed, they go to the overriding importance of the stability, continuity, and permanence embodied in a primary caretaker's relationship with the children." [¶ 48] At the very least, the trial court in this case failed to consider the importance of "[e]stablished patterns of care and nurture [which] are relevant factors for the trial court to have considered" in deciding custody. Heggen v. Heggen, 452 N.W.2d 96, 101 800 (N.D.1990). The reasons for applying a primary-caretaker factor are vividly portrayed in this case. [¶ 49] There are at least four main reasons for using the primary-caretaker factor as a presumption, as Justice Levine explained in Gravning. First, "it will generally be in the child's best interest to be in the primary caretaker's custody." 389 N.W.2d at 625. Second, "continuity of care with the primary caretaker is the most objective, and perhaps the only predictor of a child's welfare about which there is agreement and which can be competently evaluated by judges." Id. Third, "the primary caretaker rule will benefit the negotiation process between divorcing parents." Id. That reason is vividly illustrated here, where at the last minute Keith tried to bargain custody of Tyler to get the kind of away-from-home visitation that he was demanding without any transition period of more attention than just an hour or two every two months. [¶ 50] Finally, "on its face, at least, the primary caretaker rule is gender neutral; it may benefit either parent." Id. That would be important here, where the court awarded custody to a distant father who had been physically absent for four years, had done little or nothing to care for Tyler at any time, and abandoned Tyler financially for over four years, including two years of gainful employment. Even more, Keith had done nothing about one of the main premises of the primary caretaker concept"arranging alternative care, i.e., babysitting, day-care"but the trial court accepted Keith's snide criticism of Rhonda's exceptional performance of this important function in primary-caretaking. See Bashus v. Bashus, 393 N.W.2d 748, 751 (N.D.1986)(affirming custody placement with father, the primary caretaker, where his "`extended family' was a factor weighing in his favor" because father's "mother cared for the children while [he] was at work" and "remains available to assist in the care of the children"). Rhonda should be complimented, not condemned, for enlisting her extended family's assistance in raising Tyler to be "a very impressive child." [¶ 51] Instead, the trial court removed custody from a primary care-taker (and her extended family) who had grubbed away at low paying, part-time jobs to support herself and her son, while seeking to save enough money to repair her broken down pickup and to find an affordable home close to her helpful parents. And, instead, the court placed custody with a parent who had physically and financially abandoned the caretaking parent and the child. In weighing these two parents, the trial court astonishingly felt the custody decision in this case was a "close call"! [¶ 52] The trial court rationalized that "perhaps some of [Keith's] inattention [to Tyler] was caused by either legal or intentional frustration of visitation by" Rhonda. However, a change of custody should be the last resort to remedy visitation problems. See Van Dyke v. Van Dyke, 538 N.W.2d 197, 201 (N.D.1995)("we agree, that prior to resorting to a change in custody other methods should be tried to remedy a parent's misbehavior" in frustrating visitation); Alvarez v. Carlson, 524 N.W.2d 584, 591 (N.D.1994)("changing custody to remedy visitation problems is a last resort"). Keith neglected to tell us why an interim order for an appropriate visitation schedule had not been obtained during the two years this case was pending. Keith's appellate brief lamely said, "[d]ue to procedural errors, an interim order was not obtained." [¶ 53] As I read this record, neither Rhonda nor her parents denied Keith's access to Tyler when he came to their home to see him. Instead, Keith complained mainly that Rhonda wouldn't let him take Tyler away to his home for weekends or for extended visits. Keith rationalized his lack of frequent visits by saying, "it gets very hard to drive up, spend three hours on the road, when I am stuck in their house with them watching me all the time" to visit Tyler every six weeks or two months. [¶ 54] Also, considering Keith's inattention to Tyler, both financially and physically, it is not surprising to me that Tyler's mother believed it was desirable for Keith to "come more frequently, yes, and get to know Tyler." Nor is it surprising Rhonda believed it might take eight months of frequent, supervised visits in her home before Tyler would 801 be ready to go for extended visits with his father, a virtual stranger. See In Interest of E.J.H., 546 N.W.2d 361, 363 (N.D.1996)(affirming trial court's change of custody to a "distant" father, but delaying it for a number of months to "provide[] a transitional period of increased visitation before the transfer of custody."). In E.J.H., 546 N.W.2d at 364-65, we said: Some witnesses did express the need for a period of transition before Q.P. obtained custody of T.S.H. and, following the separation, the need for extensive visitation. The trial court addressed these concerns by ordering T.S.H. to remain in the custody of Social Services until August 15, 1995, allowing time for T.S.H. and Q.P. to cultivate their relationship. [¶ 55] It is surprising to me that, without a transition, the trial court placed custody of Tyler with a virtually unknown father, who was rooming in his sister's home where Tyler would be in "an extra bedroom or an extra room for him in my nephew's room [in Keith's sister's home]," and where "[h]e could sleep with him for a little while" until Keith decided how to arrange a home of his own. Also surprisingly, the trial court ignored Keith is a "smoker" who acknowledged "Tyler reacts adversely to cigarette smoke." [¶ 56] I am firmly convinced that it was an abuse of discretion for the trial court to decide custody without giving Rhonda a seasonable opportunity to present custody evidence, and that the court was badly mistaken in removing custody from a fit primary-caretaker to place a six-year-old with a father who had virtually abandoned the child for four years. Therefore, I respectfully dissent. [¶ 57] Herbert L. Meschke NOTES [1] Rhonda explained she had earlier been living in her grandmother's house, but "[t]he plumbing and the furnace went out two years ago," and she does not commute daily to her work in Stanley because her parents' pickup, which she had been driving, "broke down six months ago, roughly." Rhonda testified she is planning to repair the pickup and is planning to get a home of her own. [2] "Visitation between a child and her noncustodial parent is presumed to be in the best interests of the child" and is "a right of the child." Blotske v. Leidholm, 487 N.W.2d 607, 610 (N.D. 1992).	01-03-2023	06-08-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349471/	688 S.E.2d 98 (2010) STATE of North Carolina v. Brandi Ann HAAS. No. COA09-647. Court of Appeals of North Carolina. February 2, 2010. 99 Attorney General Roy Cooper, by Assistant Attorney General Angenette R. Stephenson, for the State. Michael J. Reece, Smithfield, for defendant-appellant. STEELMAN, Judge. Where an audio recording of a prior juvenile proceeding was available to all parties and the contents of the recording were not in question, the best evidence rule was not violated by the admission of a written transcript of the proceeding. I. Factual and Procedural Background Brandi Ann Haas (defendant) and Patrick Haas (Patrick) are the parents of J.P.H., a minor child. J.P.H. was born in 2003. In 2004, following the separation of defendant and Patrick, defendant entered into a relationship with Jeffrey Hill (Hill). On 22 December 2004, defendant, Hill, and J.P.H. arrived at their residence between 9:00 and 9:30 p.m. Hill then left to buy a ferret for defendant as a Christmas gift, while defendant remained at home with J.P.H. Defendant fed J.P.H. and put him to sleep in her bed, vacuumed the residence, and washed dishes. At approximately 11:00 p.m., Hill returned home. Defendant gave conflicting accounts of the events that subsequently transpired. On 23 December 2004, defendant gave a statement to police in which she stated that when Hill returned home, he gave her the ferret. While defendant and Hill were talking, J.P.H. started "screaming at the top of his lungs." Hill and defendant ran into the bedroom where J.P.H. was laying on the bed. J.P.H.'s "legs were locked out, stiff, and his arms were down by his side with clenched fists." Defendant held J.P.H. while Hill called 911. An EMS unit transported J.P.H. to Randolph Hospital. Defendant stated that J.P.H. had just learned to walk and had fallen often prior to this date. Hill's statement to police was virtually identical to defendant's statement. While being treated at the hospital, medical tests revealed a large blood blister on J.P.H.'s brain. Because of swelling of the brain, J.P.H.'s condition was life-threatening. The treating physicians diagnosed that J.P.H.'s injuries were the result of non-accidental trauma, caused by abusive head trauma or shaken impact syndrome. Doctors contacted the Department of Social Services to investigate the possibility of child abuse. In 2005, defendant and Hill testified concerning the incident in juvenile court. This testimony was recorded using four-track audio equipment. A court reporter subsequently transcribed the hearing. The testimony of defendant and Hill was consistent with their statements on 23 December 2004. On 18 April 2005, defendant was indicted for the offense of felony child abuse.[1] On 8 June 2007, police took a second statement from defendant at the request of her attorney. In this statement, defendant recanted a portion of her 23 December 2004 statement. Defendant stated that after she and Hill heard J.P.H. scream, they entered the bedroom and observed J.P.H. "sitting up in the middle of the bed, holding his bottle." J.P.H. starting calling for defendant, so she 100 picked him up, sat down on the bed, and started rocking him. Hill sat down on the other side of the bed and told defendant that he would stay in the room with J.P.H. while defendant finished the dishes. Thereafter, Hill emerged from the bedroom and stated that J.P.H. was asleep. A few minutes later, J.P.H. started to cry again. Hill re-entered the bedroom and partially closed the door. Defendant started to vacuum, heard a "thump", and J.P.H. started to cry. Defendant went into the bedroom and Hill was cradling J.P.H. Defendant asked what was wrong and Hill stated that J.P.H. must have gotten scared. Defendant started to vacuum again. Defendant then heard another thump "that sounded like a car door slamming." Defendant turned off the vacuum and saw Hill walk out of the bedroom and close the door. Defendant heard J.P.H. screaming and asked Hill what was wrong with J.P.H. Hill did not respond. Defendant found J.P.H. nude in the center of the bed in convulsions. Hill stated that defendant had "a retarded young'un [sic] and there's something wrong with hi[m]." Hill then called 911. Prior to trial, defendant filed a motion in limine, objecting to the admission of the transcript from the juvenile hearing. Defendant contended that the best evidence rule required the actual recording of her testimony be presented to the jury rather than a transcript. The trial court denied the motion, but stated that neither party would be precluded from having the jury listen to the recording in addition to reading the transcript. Defendant's trial began on 29 September 2008. Hill testified as a witness for the State. His testimony regarding the events of 22 December 2004 was consistent with his previous statements. The State also requested that the transcript of defendant's testimony at the 2005 juvenile hearing be read into the evidence. Defendant objected and the trial court overruled the objection. Copies of the transcript were distributed to the jury and the transcript was read verbatim into the record. Defendant presented evidence at trial and testified that she had not initially informed the police of Hill's presence in the bedroom with J.P.H. because she was intimidated by Hill and that he had threatened to hurt her if she did not "leave his name out of it[.]" Defendant never offered the recording of the juvenile hearing as evidence nor made a request that the jury hear the tape. On 6 October 2008, the jury found defendant guilty of felony child abuse. The trial court found defendant to be a prior record level II for felony sentencing purposes. Defendant was sentenced to twenty-nine to forty-four months imprisonment. This sentence was suspended and defendant was placed on supervised probation for thirty-six months. Defendant was also sentenced to a six-month term of special probation. Defendant appeals. II. Best Evidence Rule In her sole argument on appeal, defendant contends the trial court erred in admitting the transcript of defendant's prior testimony at a juvenile hearing when the original recording was available. We disagree. Rule 1002 of the North Carolina Rules of Evidence provides that in order "[t]o prove the content of a writing, recording, or photograph, the original writing, recording, or photograph is required, except as otherwise provided in these rules or by statute." N.C. Gen.Stat. § 8C-1, Rule 1002 (2007). This rule generally requires that secondary evidence offered to prove the contents of a recording be excluded whenever the original is available. State v. York, 347 N.C. 79, 91, 489 S.E.2d 380, 387 (1997). However, it is well-settled that Rule 1002 applies only when the content of a writing, recording, or photograph is in question. State v. Martinez, 149 N.C.App. 553, 560, 561 S.E.2d 528, 532 (2002). In Martinez, the defendant argued the trial court had violated Rule 1002 by allowing a witness to testify regarding the contents of a recorded telephone conversation. Id. at 559, 561 S.E.2d at 532. This Court held that the admission of the testimonial summary of the recorded conversation did not violate Rule 1002 because the contents of the recording were not being disputed by the defendant and the *101 defendant never moved at any time to have the tape played for the jury. Id. at 560, 561 S.E.2d at 532. In the instant case, defendant does not contend that there is any question as to the accuracy of the transcript submitted to the jury at trial and concedes in her brief that the recording of the juvenile hearing was authentic: "There is no reason at all that the original recording could not have been played for the jury. It was available and both parties clearly considered it authentic (the Defendant argued for playing it; the State relied upon it for preparation of its `transcript.')" (Emphasis added). Defendant bases her argument solely on the existence of the recording and alleges it was error to admit the transcript. Because the contents of the recording of defendant's prior testimony in the juvenile hearing are not in question, Rule 1002 is not applicable. Martinez, 149 N.C.App. at 560, 561 S.E.2d at 532. Even assuming arguendo that the trial court erred in admitting the transcript prior to the recording, the admission of the transcript did not prejudice defendant. N.C. Gen.Stat. § 15A-1443(a) requires that in order to establish reversible error, a defendant must show that "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) (2007). Defendant argues that the admission of the transcript prejudiced defendant in that the jury was unable to consider her "tone, inflection, and demeanor" as she testified at the juvenile hearing. However, the trial court clearly stated that neither the State nor defendant was precluded from presenting the recording to the jury in addition to reading the transcript. It is undisputed that the original recording had been provided to defendant and could have been offered into the evidence if defendant so desired. Defendant never offered the recording as evidence and did not request that the jury be permitted to hear the recording. As stated above, there is no dispute as to the accuracy of the transcript of the juvenile hearing. Further, we note that defendant has failed to include the recording as part of the record on appeal. Therefore, this Court is precluded from evaluating the recording and any of defendant's arguments pertaining to prejudice. Defendant has failed to show that if the recording had been played, the jury would have reached a different verdict. N.C. Gen. Stat. § 15A-1443(a). This argument is without merit. Defendant failed to argue her remaining assignments of error and they are deemed abandoned. N.C.R.App. P. 28(b)(6). NO ERROR. Judges ELMORE and HUNTER, JR., ROBERT N. concur. NOTES [1] The record indicates that Hill was not charged with felony child abuse.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349463/	386 S.C. 285 (2010) 688 S.E.2d 125 Teresa EDWARDS, Appellant v. LEXINGTON COUNTY SHERIFF'S DEPARTMENT and County of Lexington, Respondents. No. 26758. Supreme Court of South Carolina. Decided January 11, 2010. Heard October 7, 2009. 287 Frederick Arnold Beacham, Jr., of Lexington, and John O'Leary, of O'Leary and Associates, of Columbia, for Appellant. Patrick J. Frawley, of Nicholson, Davis, Frawley, Anderson & Ayer, of Lexington, for Respondents. Justice KITTREDGE. Appellant Teresa Edwards, a domestic violence victim, sued the Lexington County Sheriff's Department and the County of Lexington (collectively, Respondents)[1] after she 288 was attacked by her ex-boyfriend, Allen Baker, in a magistrate's court bond revocation hearing where no security was provided. The bond revocation hearing was scheduled at the request of an employee of the Lexington County Sheriff's Department who was aware of Baker's multiple bond violations and his continuing threats against Edwards. The trial court ruled Respondents owed no duty to Edwards and granted Respondents' motion for summary judgment. Because we conclude Respondents owed a common law duty to Edwards, we reverse and remand. I. Teresa Edwards and Allen Baker were dating in February 2003 when the Lexington County Sheriff's Department (the sheriff's office) responded to a domestic violence call at Edwards' home.[2] Baker was arrested for criminal domestic violence. Baker was released on a personal recognizance bond and ordered not to contact Edwards. On April 25, 26, and 27, Edwards called the sheriff's office to report that Baker was threatening her and her children. On April 28, the sheriff's office arranged for Edwards and her daughters to stay in a hotel for protection and obtained a warrant to be issued against Baker. On April 29, Edwards returned home. That night, Baker went to Edwards' home and was arrested for violating the no-contact order. As a result of violating his bond, Baker was sentenced to thirty days in jail. Subsequently, Baker posted a $5,000 surety bond and was released. Nicole Howland is a domestic violence prosecutor employed by the sheriff's office. Howland contacted Edwards in order to begin prosecuting Baker for the February incident. Edwards informed Howland that Baker was continuing to contact and harass her. Howland instructed Edwards to document any further contact as evidence that Baker was still acting in violation of the no-contact order. 289 Howland then contacted a Lexington County magistrate to request a bond revocation hearing. The magistrate agreed to schedule a hearing and contacted Baker's bondsman on August 4, 2003. The magistrate instructed the bondsman to have Baker appear in court two days later, August 6. Howland informed Edwards of the August 6 hearing and told her to be present and to bring the evidence of Baker's continuing harassment. Edwards told Howland that she feared Baker and was reluctant to attend, but Howland insisted she attend so the evidence could be admitted to prove Baker's violation of the no-contact order. The August 6 bond revocation hearing was held in the magistrate's office, which was temporarily located in a small two-room building. The magistrate was seated at the head of the room behind a desk. Edwards was seated behind a desk on the left side of the room, facing the magistrate. Howland was seated to the right of Edwards. Baker was seated to the right of Howland, behind another desk. No one from the sheriff's office or the County took any steps to ensure security for the bond revocation hearing, and as a result, no officer was present and no other precautionary or security measures were employed. After Howland presented evidence that Baker had violated the no-contact order and Baker had responded, the magistrate found Baker in contempt, revoked his bond, and sentenced him to thirty days in jail. As the magistrate was writing the sentence, Baker rose from his chair, struck Howland at least two times, and then pinned Edwards against the wall and struck her on the head at least three times. The bondsman eventually restrained Baker, and the magistrate sprayed Baker with pepper spray. A staff member called 911. Baker was arrested and Edwards was taken to the hospital and treated for her injuries. Edwards filed a negligence action pursuant to the South Carolina Tort Claims Act alleging Respondents' gross negligence proximately caused her injury. In their answer, Respondents argued they owed no duty specific to Edwards under the public duty rule, contended Edwards' injury was caused by her own negligence, and asserted several exceptions to the waiver of immunity as provided in the Tort Claims Act. 290 The trial court granted Respondents' motion for summary judgment on the sole basis that Respondents owed no duty to Edwards under statutory law or common law. We certified Edwards' appeal pursuant to Rule 204(b), SCACR. II. Summary judgment is appropriate where there is no genuine issue of material fact and it is clear the moving party is entitled to a judgment as a matter of law. Rule 56(c), SCRCP. When reviewing a grant of summary judgment, an appellate court applies the same standard used by the trial court. Lanham v. Blue Cross & Blue Shield of S.C., Inc., 349 S.C. 356, 361, 563 S.E.2d 331, 333 (2002). In this case, summary judgment was granted on the basis of the absence of a duty, which is a question of law for the court to determine. See Doe v. Greenville County Sch. Dist., 375 S.C. 63, 72, 651 S.E.2d 305, 309 (2007) (recognizing that whether a duty exists is a question of law for the courts). We are thus presented with a legal question concerning the presence or absence of a duty under the circumstances presented. III. Establishing a Duty An essential element in a cause of action based upon negligence is the existence of a legal duty of care owed by the defendant to the plaintiff. Doe, 375 S.C. at 72, 651 S.E.2d at 309. Without a duty, there is no actionable negligence. Id. A plaintiff alleging negligence on the part of a governmental actor or entity may rely either upon a duty created by statute or one founded on the common law. Arthurs ex rel. Estate of Munn v. Aiken County, 346 S.C. 97, 104, 551 S.E.2d 579, 582 (2001). When the duty is created by statute, we refer to this as a "special duty," whereas when the duty is founded on the common law, we refer to this as a legal duty arising from "special circumstances." See id. at 109-10, 551 S.E.2d at 585 (explaining that this Court restricts the term special duty to those arising from statutes, whereas a legal duty arising from a "special circumstance" is created under the common law). 291 There is no general duty to control the conduct of another or to warn a third person or potential victim of danger. Faile v. S.C. Dept. of Juvenile Justice, 350 S.C. 315, 334, 566 S.E.2d 536, 546 (2002). However, there are five exceptions to this rule: 1) where the defendant has a special relationship to the victim; 2) where the defendant has a special relationship to the injurer; 3) where the defendant voluntarily undertakes a duty; 4) where the defendant negligently or intentionally creates the risk; and 5) where a statute imposes a duty on the defendant. Id. 1. Statutory Duty Edwards first argues provisions of the Criminal Domestic Violence Act (CDV Act), S.C. Code Ann. § 16-25-10 et seq. (2008), in conjunction with S.C. Code Ann. § 16-3-1525(G) (2008),[3] impose a special duty on Respondents. We disagree. In Parker v. Brown, 195 S.C. 35, 10 S.E.2d 625 (1940), we adopted the "public duty rule." Under this rule, statutes which create or define the duties of a public office create no duty of care towards individual members of the general public. Arthurs, 346 S.C. at 105-06, 551 S.E.2d at 583. South Carolina has followed the public duty rule since 1940, and this rule remains the law of South Carolina today. However, we have carved out a narrow exception to the rule and found a statute imposes a special duty on a governmental entity if the following six-part test is met: (1) an essential purpose of the statute is to protect against a particular kind of harm; (2) the statute, either directly or indirectly, imposes on a specific public officer a duty to guard against or not cause that harm; (3) the class of persons the statute intends to protect is identifiable before the fact; (4) the plaintiff is a person within the protected class; (5) the public officer knows or has reason to know the likelihood of harm to members of the class if he fails to do his duty; and (6) the officer is given sufficient authority to 292 act in the circumstances or he undertakes to act in the exercise of his office. Jensen v. Anderson County Dep't of Soc. Servs., 304 S.C. 195, 200, 403 S.E.2d 615, 617 (1991). "The public duty rule is a rule of statutory construction which aids the court in determining whether the legislature intended to create a private right of action for a statute's breach." Vaughan v. Town of Lyman, 370 S.C. 436, 442, 635 S.E.2d 631, 634 (2006) (recognizing that the dispositive issue is not whether the statute creates a duty, but rather whether the statute was intended to provide an individual a private right of action). Edwards cites to provisions of the CDV Act making it unlawful to injure a household member, but she points to no provision of the CDV Act imposing a specific duty on Respondents that they failed to perform. In short, even if the CDV Act could be the source of a special duty imposed upon law enforcement, Edwards has not alleged a breach of duty created by the Act. Edwards' further reliance on § 16-3-1525(G) in no manner bolsters her position. Section 16-3-1525(G) is merely a general statute that broadly recites the general duty of law enforcement agencies with regard to protecting victims and witnesses and clearly fails the six-part test. See Arthurs, 346 S.C. at 108, 551 S.E.2d at 584 (holding a statute requiring the sheriff's department to patrol the county merely broadly recited general duties and did not create a special duty). Moreover, the Legislature has spoken directly to its intent to foreclose a private cause of action under § 16-3-1525(G), for § 16-3-1565 states no provision in this article "creates a cause of action on behalf of a person against a public employee, public agency, the State, or an agency responsible for the enforcement of rights and provision of services set forth in this article." 2. Special Relationship with Edwards Edwards argues she had a special relationship with Respondents because she was in the "functional custody" of the State, and therefore, Respondents owed her a specific duty. There are no allegations and there is no evidence in the record indicating that Edwards was in custody. Accordingly, we hold 293 Respondents owed no duty of protection to Edwards under her "functional custody" theory. 3. Creating the Risk and Respondents' Relationship with Baker Edwards' final contention, with which we agree, is that Respondents owed her a common law duty because of the "special circumstances" presented. Arthurs, 346 S.C. at 108, 551 S.E.2d at 584 (recognizing that a duty may arise because of "special circumstances"). The special circumstances are Respondents' relationship with Baker and their actions in creating the risk of harm. Respondents were well aware of Baker's unrelenting violent tendencies toward Edwards. Edwards had called the sheriff's office to report Baker's harassment on numerous occasions, and the sheriff's office arranged for Edwards to stay in a hotel after one of the incidents. The sheriff's office and the County, through its agent Howland,[4] arranged the bond revocation hearing at the magistrate's office with no security present. Despite Respondents' awareness that Edwards feared Baker and was reluctant to attend the bond revocation, Respondents strongly encouraged Edwards' presence. Respondents cannot claim lack of knowledge of Baker's violent tendencies towards Edwards since the reason they were seeking to revoke Baker's bond was due to his failure to obey the no-contact order, which was issued as a direct result of his violent actions. We hold Respondents created a situation in which it was foreseeable that Baker would harm Edwards. Compare Miletic v. Wal-Mart Stores, Inc., 339 S.C. 327, 529 S.E.2d 68 (Ct.App.2000) (holding Wal-Mart had no duty to protect a customer from a parking lot attack because Wal-Mart had no notice that the crime would occur). We hold that Respondents owed Edwards a duty solely as a result of the unique facts of this case, i.e., "special circumstances." 294 Respondents created a situation that they knew or should have known posed a substantial risk of injury to Edwards. Moreover, given Respondents' knowledge of Baker's demonstrated threats against Edwards, Respondents owed her a duty. Respondents' duty is one of due care and whether Respondents acted reasonably, negligently or grossly negligently is not before us. We do note that Respondents were not under a duty to guarantee Edwards' safety with absolute certainty. See Madison ex rel. Bryant v. Babcock Center, Inc., 371 S.C. 123, 135, 638 S.E.2d 650, 656 (2006) (rejecting defendants' all or nothing approach with regard to the existence of a duty and noting that this argument "confuses the existence of a duty with standards of care establishing the extent and nature of the duty in a particular case"). IV. We reverse the trial court's grant of summary judgment and remand to the trial court for further proceedings.[5] REVERSED. TOAL, C.J., WALLER, PLEICONES and BEATTY, JJ., concur. NOTES [1] Respondents filed a joint answer to the complaint asserting that the Lexington County Sheriff's Department and Lexington County were "one and the same entity." However, under South Carolina law, the sheriff and sheriff's deputies are State, not county, employees. See Cone v. Nettles, 308 S.C. 109, 112, 417 S.E.2d 523, 524 (1992); Heath v. Aiken County, 295 S.C. 416, 418, 368 S.E.2d 904, 905 (1988). Although Respondents' assertion is inconsistent with settled law, their position that they are the same entity is the law of the case. We therefore do not address the legally settled distinction between a county government and a sheriff's office for liability purposes. [2] The facts are taken from the parties' "Stipulation of Facts" presented in the trial court. [3] Specifically, Edwards refers to § 16-25-20, which makes it unlawful to injure a household member and § 16-25-80, which provides that this article does not replace other criminal offenses. Section 16-3-1525(G) provides that a law enforcement agency "must provide any measures necessary to protect the victims and witnesses, including ... physical protection in the courthouse." [4] Respondents stipulated that Howland was employed by the sheriff's office. Because of Howland's status as a sheriff's office employee, the sheriff's office is charged with Howland's knowledge and actions (or lack of action), and as a result of Respondents' position that the sheriff's office and Lexington County are the same entity, such knowledge is imputed to Lexington County. [5] Respondents argue even if we were to find the existence of a duty, Edwards cannot show the remaining elements of her negligence claim. The trial court granted summary judgment based solely on the absence of a duty. Therefore, under this procedural posture, the record does not permit us to make those fact-driven determinations.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349465/	DAVID P. ROSE and KAY-ANN ROSE, Plaintiffs, v. JEFFERY SCOTT FORESTER, D.M. BOWMAN, INC., KAREN L. SHERWIN and THOMAS E. TURNER, Defendants. No. COA09-427. Court of Appeals of North Carolina. Filed November 17, 2009. This case not for publication Leslie C. Rawls and Mauriello Law Offices, by Christopher D. Mauriello, for Plaintiffs. Smith Moore Leatherwood LLP, by Manning A. Connors and James R. Faucher, for Defendant D.M. Bowman, Inc. STEPHENS, Judge. I. Procedural History and Factual Background The facts in this case are undisputed. On 16 June 2008, Plaintiffs David P. Rose and Kay-Ann Rose filed a complaint against four named defendants: Thomas E. Turner, Karen L. Sherwin, Jeffery Scott Forester, and D.M. Bowman, Inc. ("Bowman"). The complaint alleged that on 29 July 2005, Plaintiffs' vehicle was rear-ended by a vehicle owned by Thomas E. Turner and driven by Karen L. Sherwin. The complaint further alleged that Bowman's vehicle, which was being driven by Jeffery Scott Forester, improperly changed lanes, causing Plaintiffs to slow down, leading to the subsequent collision. Prior to filing the complaint, Plaintiffs, through counsel, communicated with Crystal Wampler of Baldwin & Lyons, Inc., a third-party administrator for Bowman. Wampler informed Plaintiffs that Bowman denied any liability for the accident. Bowman is an interstate motor carrier organized and existing under the laws of the State of Maryland. Under the rules of the Federal Motor Carrier Safety Administration, all motor carriers are required to appoint an agent in every state or jurisdiction to, from, or through which they are authorized to operate. Bowman contracts with Service of Process Agents, Inc. ("SPA") to provide it with agents in every state in which Bowman operates. William Pettit is SPA's resident agent in North Carolina and is Bowman's Registered Agent with the North Carolina Department of State. Plaintiffs sent a copy of the complaint, along with a copy of the summons and written discovery request, by certified mail to Mr. Pettit. Although Anna Jones, a receptionist in Mr. Pettit's office, signed for the certified mail package on 23 July 2008, neither Mr. Pettit nor his paralegal, Darlene Rhoden, recall receiving the package. There is no dispute, however, that neither Mr. Pettit nor anyone in his office forwarded a copy of the summons or complaint to Bowman's headquarters. Plaintiffs did not send courtesy copies of the summons or complaint to Ms. Wampler. Bowman did not answer the complaint. On 12 September 2008, Plaintiffs sent a motion for entry of default, along with counsel's duly executed certificate of service, to Mr. Pettit. On 15 September 2008, Plaintiffs filed the motion with the trial court and Joyce O'Neal, an Iredell County Assistant Clerk of Superior Court, entered default against Bowman. On 25 September 2008, Plaintiffs' counsel sent Mr. Pettit a copy of Plaintiffs' application for entry of judgment upon default, along with a copy of the order for entry of default, counsel's duly executed certificate of service, and a notice of hearing on the application scheduled for 3 November 2008. Plaintiffs filed the application for entry of judgment upon default with the trial court on 29 September 2008. On 29 September 2008, Ms. Rhoden forwarded copies of the order for entry of default, application for entry of judgment upon default, and notice of hearing by UPS one-day delivery to Teresa Wagner at SPA. SPA did not receive the package. Although the shipment receipt in Mr. Pettit's possession includes tracking information and instructions regarding delivery information, no further information or explanation of what happened to the shipment was given to the trial court. Ms. Rhoden did not forward copies of the documents to Bowman's headquarters. An evidentiary hearing was held on 3 November 2008. Plaintiffs, who traveled from their home in New York for the hearing, testified and offered documentary evidence. The trial court announced verdicts in favor of Plaintiffs, $50,000 for David Rose and $57,000 for Kay-Ann Rose, and entered judgment upon the verdicts on 6 November 2008. All named defendants were found jointly and severally liable. Plaintiffs' counsel mailed a copy of the judgment to Bowman's headquarters and to Ms. Wampler. At no time prior to receiving the judgment was anyone at Bowman's headquarters aware that the suit had commenced. On 24 November 2008, Bowman moved for relief from the judgment. Bowman did not move to set aside the entry of default. Bowman sought relief under Rule 60(b)(1) for excusable neglect and under Rule 60(b)(6) in the interest of justice. After a hearing on Bowman's motion, the trial court denied the motion by order signed 15 December 2008. From the trial court's entry of default judgment and denial of its Rule 60 motion, Bowman appeals.[1] II. Discussion A. Motion to Dismiss Plaintiffs filed a motion to dismiss Bowman's appeal for failure to adequately state the assignments of error, in violation of the Rules of Appellate Procedure. However, Bowman's motion to amend the record on appeal to restate the assignments of error was allowed by order of this Court entered 6 July 2009. As the restated assignments of error comply with the Rules of Appellate Procedure, Plaintiffs' motion to dismiss Bowman's appeal is denied. B. Rule 60(b)(1) Motion Under Rule 60(b)(1) of the North Carolina Rules of Civil Procedure, a judgment may be set aside when it is shown to the court that the judgment from which relief is sought was the result of excusable neglect. N.C. Gen. Stat. § 1A-1, Rule 60(b)(1) (2007). To justify setting aside a judgment on the ground of excusable neglect, the moving party must show (1) that the judgment rendered against him was due to his excusable neglect, and (2) that he has a meritorious defense. Thomas M. McInnis & Associates, Inc. v. Hall, 318 N.C. 421, 424, 349 S.E.2d 552, 554 (1986). "[O]rdinarily[,] the inexcusable neglect of a responsible agent will be imputed to the principal in a proceeding to set aside a judgment by default." Stephens v. Childers, 236 N.C. 348, 351, 72 S.E.2d 849, 851 (1952). "Whether neglect is `excusable' or `inexcusable' is a question of law which `depends upon what, under all the surrounding circumstances, may be reasonably expected of a party' to litigation." Anderson Trucking Serv., Inc. v. Key Way Transport, Inc., 94 N.C. App. 36, 41, 379 S.E.2d 665, 668 (1989) (quoting McInnis, 318 N.C. at 425, 349 S.E.2d at 555). Questions of law are reviewed by this Court de novo. Staton v. Brame, 136 N.C. App. 170, 174, 523 S.E.2d 424, 427 (1999). Pursuant to N.C. Gen. Stat. § 55D-30, "each foreign corporation . . . authorized to transact business or conduct affairs in this State must continuously maintain in this State . . . [a] registered agent[.]" N.C. Gen. Stat. § 55D-30(a)(2) (2007). "Service of process, notice or demand required or permitted by law to be served on [a corporation] may be served on the registered agent . . . ." N.C. Gen. Stat. § 55D-33(a). "The sole duty of the registered agent to the [corporation] is to forward to the [corporation] at its last known address any notice, process, or demand that is served on the registered agent." N.C. Gen. Stat. § 55D-30(b) (2007). In this case, Bowman's registered agent was Mr. Pettit. As Bowman's agent, Mr. Pettit's "sole duty" to Bowman was to forward copies of the complaint, summons, written discovery, application for entry of judgment upon default, and notice of hearing on the application for entry of judgment to Bowman's last known address. The evidence is undisputed that Mr. Pettit failed to do so. On this record, the negligence of Mr. Pettit was inexcusable and clearly imputable to Bowman. See Stephens, 236 N.C. at 351, 72 S.E.2d at 851[2] (failure of defendant's insurance company to timely hire attorney was inexcusable neglect imputable to defendant); Estate of Teel v. Darby, 129 N.C. App. 604, 611, 500 S.E.2d 759, 764 (1998) (failure of defendant's counsel and deceased insurer to answer complaint was inexcusable negligence imputable to defendant). Defendant argues that the present case is analogous to Townsend v. Carolina Coach Co., 231 N.C. 81, 56 S.E.2d 39 (1949), wherein this Court affirmed the trial court's finding of excusable neglect. We disagree. In Townsend, plaintiff passenger filed a personal injury and property damage action against defendant coach company. Pursuant to N.C. Gen. Stat. § 1-97(1),[3] service of process on a corporation could be obtained by delivering summons "`to the president or other head of the corporation, secretary, cashier, treasurer, director, managing or local agent thereof.'" Id. at 83, 56 S.E.2d at 41 (quoting N.C. Gen. Stat. § 1-97(1)). The statute further provided that "`[a]ny person receiving or collecting money in this state for a corporation of this or any other state or government is a local agent for the purpose of this section.'" Id. (quoting N.C. Gen. Stat. § 1-97(1)). Plaintiff served process upon an employee of the lessees of the bus station who sold tickets for the defendant and other bus lines using the facilities of the station. The employee never notified the defendant that process had been served upon her. Although the employee was statutorily defendant's local agent, the Supreme Court affirmed the trial court's order setting aside the default judgment for excusable neglect, stating, we do not think the mistake, inadvertence or neglect of such an agent is imputable to the corporation so as to deny relief as a matter of law . . . . We think there is a distinction in this respect between officers and agents who represent a corporation as its officers and agents resulting from their official or contractual status and one who is an agent by operation of law. Id. at 83-84, 56 S.E.2d at 41. Unlike the employee in Townsend who was merely the defendant's agent "by operation of law[,]" id. at 84, 56 S.E.2d at 41, in this case, Mr. Pettit is Bowman's registered agent "resulting from their. . . contractual status[.]" Id. Accordingly, contrary to Defendant's contention, Townsend supports the trial court's decision in this case to deny Defendant's Rule 60(b)(1) motion. Bowman further argues that unlike the defendants in Stephens and Childers who had personal notice of the lawsuits against them, Bowman had no notice of the lawsuit until Plaintiffs' counsel sent a copy of the default judgment to Bowman's headquarters. However, Defendant did receive notice of the lawsuit through service upon Mr. Pettit, Defendant's registered agent for the purpose of receiving notice, and that is all the notice that Chapter 55D requires. See N.C. Gen. Stat. §§ 55D-30(b) and 33(a). Regardless, even if a finding of excusable neglect could be made, our case law requires that Defendant demonstrate a meritorious defense before the judgment may be set aside. Kirby, 11 N.C. App. at 132, 180 S.E.2d at 410. "Entry of default against a defendant results in all allegations of plaintiff's complaint being deemed admitted against that defendant, and thereafter, defendant is prohibited from defending on the merits of the case." Estate of Teel, 129 N.C. App. at 607, 500 S.E.2d at 762. In this case, Bowman's Motion for Relief from Judgment seeks only to "set aside the Default Judgment entered in favor of [P]laintiffs David P. Rose and Kay-Ann Rose on November 6, 2008" and does not seek to set aside the 15 September 2008 entry of default. Accordingly, Plaintiffs' allegations of negligence against Bowman are deemed admitted and Bowman "is prohibited from defending on the merits of the case." Id. Thus, Bowman cannot show that it has a meritorious defense. As Bowman has failed to show either excusable neglect or the existence of a meritorious defense, the trial court did not err in denying Bowman's Rule 60(b)(1) motion. C. Rule 60(b)(6) Motion Rule 60(b)(6) of the North Carolina Rules of Civil Procedure permits relief from default judgment for "[a]ny other reason justifying relief from the operation of the judgment." N.C. Gen. Stat. § 1A-1, Rule 60(b)(6) (2007). "A default judgment may be set aside under Rule 60(b)(6) only upon a showing that (1) extraordinary circumstances were responsible for the failure to appear, and (2) justice demands that relief." Anderson Trucking Service, 94 N.C. App. at 42, 379 S.E.2d at 669 (citing Huggins v. Hallmark Enters., Inc., 84 N.C. App. 15, 24-25, 351 S.E.2d 779, 785 (1987)). The decision to grant relief under this rule is discretionary with the trial judge. Id. at 42-43, 379 S.E.2d at 669. This Court "cannot substitute what it consider[s] to be its own better judgment for a discretionary ruling of a trial court, [so] we may not overturn the judge's ruling unless it was manifestly unsupported by reason." Id. (citations and quotation marks omitted). Bowman claims that the following three circumstances require relief from judgment under Rule 60(b)(6): (1) Plaintiffs failed to notify Ms. Wampler of the existence of the lawsuit until after default judgment was entered; (2) the record reveals no evidence why Plaintiffs served the other three defendants by publication; and (3) Bowman did not act or fail to act in a fashion that caused or contributed to its lack of notice. We find these arguments unavailing. First, Plaintiffs had no duty to notify Ms. Wampler of the lawsuit, and the alleged "failure" of Plaintiffs to do so is not a ground that would justify relief under Rule 60(b)(6). See Kennedy v. Star, 62 N.C. App. 182, 302 S.E.2d 497 (relief from default judgment not justified under 60(b)(6) where plaintiff filed suit without notifying insurance carrier and defendant had no actual knowledge of suit), disc. review denied, 309 N.C. 321, 307 S.E.2d 164 (1983). Second, the method by which Plaintiffs notified the other three defendants of the lawsuit is irrelevant to Bowman's action or inaction in responding to the suit, and Bowman cites no legal authority to the contrary. Finally, while no corporate officer located at Bowman's headquarters acted in a fashion that caused or contributed to its lack of notice, Mr. Pettit's status as Bowman's registered agent in North Carolina compels the imputation of his neglect to Bowman, which caused the failure of notice to Bowman's officers. Based on the undisputed facts, we conclude that the trial court did not abuse its discretion in denying Bowman's Rule 60(b)(6) motion. D. Reasonably Foreseeable Finally, Bowman argues that the following conclusion of law is not supported by any evidence: The defendant Bowman's lack of actual notice of the suit was reasonably foreseeable where (1) the defendant Bowman had the option of naming a registered agent interested in the corporation's business and its legal affairs, but did not do so; and (2) the defendant Bowman further shielded itself from actual notice of pending litigation by entrusting the subsequent handling of served process to an out of State firm, with a Washington, D.C. mailing address, representing more than 2,500 other motor carriers. However, whether Bowman's lack of actual notice of the suit was "reasonably foreseeable" is not determinative of whether relief should be granted under Rules 60(b)(1) or (6). Accordingly, we conclude that the trial court properly denied Bowman's Rule 60(b) motion notwithstanding this superfluous conclusion. The trial court's order denying Bowman's motion for relief from judgment is affirmed. AFFIRMED. Judges HUNTER, JR. and BEASLEY concur. Report per Rule 30(e). NOTES [1] Defendants Thomas E. Turner, Karen L. Sherwin, and Jeffery Scott Forester did not make an appearance in this matter, nor are they parties to this appeal. [2] Stephens was decided under the former N.C. Gen. Stat. § 1-220, the precursor to Rule 60 of the Rules of Civil Procedure. However, cases interpreting former section 1-220 remain applicable. Kirby v. Asheville Contracting Co., 11 N.C. App. 128, 180 S.E.2d 407, cert. denied, 278 N.C. 701, 181 S.E.2d 602 (1971). [3] This statute was repealed by Session Laws 1967, c. 954, s. 4 and replaced with N.C. Gen. Stat. § 1A-1, Rule 4.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/900147/	566 N.W.2d 846 (1997) 1997 SD 88 Arlene T. TALLEY, Plaintiff and Appellee, v. Harmon Anthony TALLEY, Defendant and Appellant. No. 19739. Supreme Court of South Dakota. Argued March 24, 1997. Decided July 16, 1997. 848 Randall L. Macy of Buckmaster & Macy, Belle Fourche, for plaintiff and appellee. Frank J. Driscoll of DeMersseman Jensen, Rapid City, for defendant and appellant. MILLER, Chief Justice. [¶ 1.] H. Anthony Talley appeals the trial court's judgment rescinding a series of contracts between him and his mother, Arlene Talley. The court also denied Anthony's counterclaim for specific performance. We affirm. FACTS [¶ 2.] Donald and Arlene Talley owned a 4,300-acre ranch near Opal, South Dakota. Shortly after Donald's death, Arlene employed Anthony, their youngest son, to manage the ranch beginning in the fall of 1985. In return, he was paid a monthly wage, given an agreed number of cattle to start his own herd and provided with a mobile home. Anthony continued to manage the ranch as a cow/calf/yearling operation under this arrangement for five years. [¶ 3.] In 1990, Anthony and Arlene discussed arrangements for Anthony to either purchase or acquire an interest in the ranch. At Arlene's suggestion, Anthony met with an attorney to discuss executing such an arrangement. The attorney drafted four contracts to allow Anthony to lease the ranch and equipment with the option to purchase, provide for grazing and care of Arlene's cattle and provide for the purchase of certain shop tools by Anthony. The contracts were executed by the parties on November 21, 1990, retroactive to November 1, 1990. [¶ 4.] The "real estate lease" gave Anthony the right to lease the ranch for a period of ten years, from November 1, 1990, through October 31, 2000, with the option to purchase during that time for a fixed price with definite terms. Under the terms of the lease and option agreement, one-half of Anthony's lease payments would be credited to the purchase price of the ranch in the event he exercised the purchase option. The lease gave Arlene the right to use and occupy the house and garage located on the ranch rent-free.[1] In addition, the lease required the land be used for ranching purposes consistent with its past use and the buildings and 849 fences on the property be maintained in their current state of repair. [¶ 5.] The "equipment lease" gave Anthony the right to lease all the equipment owned by Arlene necessary to operate the ranch. This agreement was for a term of ten years and provided Anthony the option to purchase during that term. One-half of the payments made by Anthony prior to exercising the option to purchase the equipment was to be credited to the purchase of the equipment. Pursuant to the terms of the lease, Anthony was responsible for the maintenance and repair of the equipment and Arlene was responsible for insuring the equipment. The lease specifically provided for the replacement of equipment and stated: VI. That in the event, during the term of this Equipment Lease with Option to Purchase, any piece of equipment shall become unusable, stolen or destroyed, [Arlene] may, at her option, replace said equipment, which replacement equipment shall become part of this Equipment Lease with Option to Purchase. VII. That in the event, during the term of this Equipment Lease with Option to Purchase, should any piece of equipment be traded in on new equipment or traded in on other equipment, the replaced equipment shall become the property of [Anthony], and [Anthony] shall be responsible to pay to [Arlene] a sum equal to the amount allowed on the trade-in of that piece of leased equipment. The parties agreed the equipment lease would terminate in the event the real estate lease terminated for any reason. [¶ 6.] The third instrument executed by the parties, a "grazing agreement," required Anthony to pasture and care for Arlene's cattle in exchange for sixty percent of her annual calf crop. The agreement commenced on November 1, 1990, and was to continue on a year-to-year basis for a period of ten years. No provision for the costs of wintering Arlene's 1990 calf crop was specifically included in the agreement. The grazing agreement expressly provided for its termination in the event the real estate lease terminated. [¶ 7.] Arlene and Anthony also executed a "tool contract" for the sale of certain shop tools. Pursuant to this contract, Anthony agreed to pay Arlene $20,000 over the course of five years in exchange for the immediate possession of certain tools located on the ranch and clear and marketable title to the tools upon final payment. The tool contract was executed at the same time as the other agreements.[2] [¶ 8.] In the fall of 1991, Arlene sold her 1990 calf crop as yearlings. She paid Anthony fifty percent of the proceeds ($35,180.82). Within two months of paying these proceeds, Arlene realized the 1990 yearlings were not provided for in the grazing agreement. She sent a letter to Anthony and spoke with him about the mistaken payment and requested it be returned. Anthony acknowledged the grazing agreement did not provide for the wintering of the 1990 calf crop but refused to return the money, claiming the payment was made pursuant to an oral agreement reached between the parties while signing the other contracts in November of 1990. [¶ 9.] In 1992, Anthony complained about the condition of Arlene's swather. He informed her a new swather was needed but he was financially unable to purchase one. Arlene testified he convinced her to purchase a new swather by promising he would maintain her herd at one hundred head of cattle until the loan was fully paid. The new swather cost nearly $38,000 after a trade-in allowance for other equipment. Anthony failed to maintain Arlene's herd at the number promised during the duration of the loan. [¶ 10.] In March of 1993, Anthony purchased a new baler. As part of the transaction, he traded Arlene's used baler and received a $5,500 trade-in credit. Arlene was not informed of the purchase or trade-in 850 prior to the transaction. When she discovered Anthony had traded her baler, she requested the $5,500 trade-in credit. Anthony refused, but eventually paid Arlene in full without interest.[3] [¶ 11.] Anthony purchased a new v-rake in June of 1994, and received an $800 trade-in credit for Arlene's rake. Arlene immediately requested payment for the trade-in credit but Anthony refused to pay her for "that piece of junk." Eventually, he paid Arlene in full, without interest, on October 30, 1995.[4] [¶ 12.] Prior to 1994, the respective profits of the parties as outlined by the grazing agreement were calculated by selling the calves and yearlings and dividing the proceeds based on the average price of the animals. In 1994, however, Anthony began physically separating his percentage of calves and yearlings from Arlene's. She was not notified of the physical separation and discovered the change in practice only when she noticed Anthony separating the cattle in the summer of 1994. When she inquired as to what he was doing, he told her to leave and refused to work the cattle until she left the corral area. [¶ 13.] That fall, Anthony separated the yearlings without informing Arlene. He separated nineteen yearlings as Arlene's and informed her he would no longer care for them. As a result, she was forced to sell the yearlings. Her neighbor purchased the yearlings but indicated they were not the same quality as previous years. Arlene confronted Anthony about the low quality of her cattle and he replied, "What did you expect to get, the best of the bunch?" [¶ 14.] Arlene consequently requested she be notified and present for any physical separations of the cattle to ensure she received a fair representation of the herd. She subsequently received a letter informing her that Anthony planned to separate the herd for sale on October 25, 1995. She arrived at the ranch on that date and learned the calves had been separated and shipped before she arrived. Anthony told her he changed his plans and was unable to reach her prior to the separation. He kept sixteen heifer calves and allocated eleven to Arlene. He refused to care for Arlene's cattle and she was forced to sell them.[5] Following the sale, Arlene's herd consisted of seventy-two cows and no replacement heifers.[6] [¶ 15.] In November of 1994, Anthony unilaterally increased the fees for wintering Arlene's cattle. He sent a letter notifying her that the previously agreed price of $15 per head per month was increased to $20 per head per month. There was no discussion or agreement by the parties as to this increase. [¶ 16.] Also that fall, Anthony and a carpenter removed the side of the mobile home provided by Arlene. The door of the mobile home, a window and a nine-to-ten-foot section of an outside wall were removed and thrown away without her knowledge. Supports were placed in the mobile home to keep the roof from collapsing. The mobile home was immovable because of the construction. [¶ 17.] As a result of this series of events, Arlene brought suit against Anthony alleging breach of the contracts. She also sued to recover the money paid to him after the sale of her 1990 calf crop. Immediately after Arlene's commencement of her lawsuit, Anthony notified her that he was exercising his option to purchase the ranch and equipment. She refused to honor his request and he counterclaimed for specific performance and also sought to recover certain unpaid charges for wintering Arlene's calves in 1994-1995.[7] [¶ 18.] The trial court concluded Anthony materially breached the real estate, equipment and grazing contracts and terminated the contracts. The court further concluded that Arlene mistakenly paid Anthony wintering fees after the sale of her 1990 calf crop 851 and ordered him to pay her $20,912.82, the amount of the mistaken payment less reasonable costs for care of the cattle during the winter. The court also determined the contract to purchase the tools was completed and allowed Anthony to retain title to the tools or return them as a $20,000 credit towards the money owed Arlene. Lastly, Anthony's claim for specific performance was denied. He appeals all adverse holdings. STANDARD OF REVIEW [¶ 19.] A trial court's findings of fact will not be disturbed unless they are clearly erroneous. Jasper v. Smith, 540 N.W.2d 399, 401 (S.D.1995); Knudsen v. Jensen, 521 N.W.2d 415, 418 (S.D.1994). Under this standard, we will not disturb the trial court's findings unless, after a review of all the evidence, we are firmly and definitely convinced a mistake has been made. Cordell v. Codington County, 526 N.W.2d 115, 116 (S.D.1994). We review conclusions of law under a de novo standard and give no deference to the trial court's conclusions of law. Id. DECISION [¶ 20.] I. Did Anthony materially breach the contracts? [¶ 21.] Anthony contends the trial court erred by failing to weigh the breaches alleged by Arlene against his actual performance under the agreements. He argues that individually none of the breaches are material in relation to his timely payments and his performance of a majority of the terms of each agreement. He maintains the trial court's cumulative application of the breaches of each individual agreement to support a finding of material breaches of all the agreements was in error. We disagree. [¶ 22.] "The primary rule in the construction of contracts is that the court must, if possible, ascertain and give effect to the mutual intention of the parties." Huffman v. Shevlin, 76 S.D. 84, 89, 72 N.W.2d 852, 855 (1955). Another fundamental rule of construction is that all writings executed as part of a single transaction must be interpreted together. Baker v. Wilburn, 456 N.W.2d 304, 306 (S.D.1990). See also 49 AmJur2d Landlord and Tenant § 56 (1995); Restatement (Second) Contracts § 202 (1981). "[W]hen two or more instruments are executed at the same time by the same parties, for the same purpose and as part of the same transaction, the court must consider and construe the instruments as one contract." GMS, Inc. v. Deadwood Social Club, Inc., 333 N.W.2d 442, 444 (S.D.1983). Writings connected by internal references to each other and involving the same subject matter constitute a single contract for the entire transaction. Baker, 456 N.W.2d at 306 (citing Hampton Roads Shipping Ass'n v. International Longshoremen's Ass'n, 597 F.Supp. 709, 716 (E.D.Va.1984), remanded on other grounds, 746 F.2d 1015 (4th Cir.1984), cert. denied, 471 U.S. 1017, 105 S.Ct. 2022, 85 L.Ed.2d 304 (1985), cert. denied, 471 U.S. 1102, 105 S.Ct. 2327, 85 L.Ed.2d 845 (1985). [¶ 23.] The four contracts executed by Arlene and Anthony cannot be separated and must be considered as one contract for the entire transaction. They were executed simultaneously, by the same parties as part of a transaction to transfer an interest in the ranch, equipment and tools to Anthony and to provide for Arlene and her cattle. Arlene and Anthony agreed this was their intent in executing the contracts. The equipment lease and grazing agreement internally reference the real estate lease and provide for their termination in the event the real estate lease is terminated. Anthony acknowledged that Arlene would not have executed the real estate lease without also executing the equipment lease and grazing agreement. Therefore, we consider these instruments as one contract and, accordingly, a material breach of one aspect of the contract constitutes a material breach of the whole contract. [¶ 24.] The trial court specifically found that Anthony materially breached the contracts by refusing to pay Arlene the appropriate trade-in credits received for her baler and v-rake in a timely fashion; physically separating the herds; refusing to care for Arlene's calves and yearlings; permanently damaging the mobile home; and engaging in a course of conduct contrary to the 852 intent of the executed agreements by unilaterally increasing the wintering fees. These findings have not been challenged as clearly erroneous, only as cumulative. The parties intended and the contracts contemplated that Arlene would be provided for and the family ranch would be operated as in the past. Anthony's performance did not comply with these intentions or the contractual terms. The record supports the trial court's determination that Anthony's breaches of the contracts were material, numerous, and in direct contradiction of the terms and spirit of the parties' agreement. His material breach of one aspect of the contracts constitutes a material breach of the whole contract. See Baker, 456 N.W.2d at 306. The trial court's determination that Anthony materially breached the contracts was not clearly erroneous. [¶ 25] II. Was the trial court's rescission of the real estate lease, equipment lease and grazing agreement proper? [¶ 26.] The trial court concluded the breaches by Anthony justified rescission of the contracts pursuant to SDCL 53-11-2(2).[8] Rescission is an equitable remedy granted in the discretion of the court. Knudsen, 521 N.W.2d at 420; Jones v. Bohn, 311 N.W.2d 211, 213 (S.D.1981). "[R]escission is not generally permitted for casual, technical, or unimportant breaches of the contract. The breach must be substantial and relate to a material part of the contract." S & S Trucking v. Whitewood Motors, Inc., 346 N.W.2d 297, 300 (S.D.1984) (citing Kary v. Arnold, 252 N.W.2d 326, 329 (S.D.1977); Dusek v. Reese, 80 S.D. 96, 102, 119 N.W.2d 656, 660 (1963)). [¶ 27.] The breaches by Anthony were not casual, technical or unimportant. The trial court concluded Anthony systematically reduced his mother's herd through physical separation, reduction in quality, and forced sales. He purposefully failed to abide by the express terms of the equipment lease, which required him to pay Arlene for any trade-in credits received on her machinery. Additionally, he permanently damaged the mobile home and unilaterally acted to increase wintering fees for Arlene's calf crop. His numerous and material breaches of the express terms of the contracts and the spirit and intent of the contracts justified rescission of the real estate lease, equipment lease and grazing agreement in this situation. The trial court's grant of rescission was not an abuse of its discretion. [¶ 28.] III. Is Anthony entitled to specific performance? [¶ 29.] Specific performance is an equitable remedy. Amdahl v. Lowe, 471 N.W.2d 770, 773 (S.D.1991); Wiggins v. Shewmake, 374 N.W.2d 111, 115 (S.D.1985). A party seeking equity in the court must do equity, including entering the court with clean hands. Shedd v. Lamb, 1996 SD 117, ¶ 26, 553 N.W.2d 241, 245. "A [person] who does not come into equity with clean hands is not entitled to any relief herein, but should be left in the position in which the court finds him." Kane v. Schnitzler, 376 N.W.2d 337, 341 (S.D.1985) (citations and quotations omitted). [¶ 30.] Anthony materially breached several substantial terms of the contract. He cannot now seek enforcement of those contractual provisions which benefit him when he has failed to comply with express terms as well as the intent of the parties' contracts. Anthony has not entered the court with clean hands; accordingly, he is not entitled to the equitable remedy of specific performance to compel the sale of the ranch and equipment. [¶ 31.] IV. Was Arlene entitled to a refund of the payment for the sale of her 1990 calf crop? [¶ 32.] Believing the 1990 calf crop to be governed by the agreements executed by the parties in November, 1990, Arlene paid Anthony fifty percent of the proceeds following the sale of the cattle in the fall of 1991. The trial court concluded Arlene was entitled to restitution for this payment less the reasonable 853 costs to Anthony for wintering the 1990 calf crop and entered judgment against Anthony for $20,912.82. [¶ 33.] It is a general principle of equity that a party may not be unjustly enriched at the expense of another party. Thurston v. Cedric Sanders Co., 80 S.D. 426, 429-30, 125 N.W.2d 496, 498 (1963). Enrichment is unjust if it is a result of money paid by mistake. A.G. Edwards & Sons, Inc. v. Northwest Realty Co., 340 N.W.2d 187, 189 (S.D.1983); 66 AmJur2d Restitution and Implied Contracts §§ 3, 8, 118 (1973). Restitution for unjust enrichment is appropriate for "[a] person who has paid another an excessive amount of money because of an erroneous belief induced by a mistake of fact that the sum was necessary for the discharge of a duty[.]" Restatement of Restitution § 20 (1936). [¶ 34.] Anthony contends Arlene is not entitled to restitution because the payment was made voluntarily, not mistakenly, pursuant to an oral agreement by the parties. He claims the oral agreement between the parties required a fifty-fifty split of the 1990 calf crop in exchange for wintering services. Anthony points to Arlene's payment of fifty percent of the total sale, not sixty percent as required by the grazing agreement, as evidence of a separate agreement concerning the 1990 calf crop. Arlene, however, testified that she believed a fifty-fifty split of the proceeds for the 1990 calf crop, rather than the sixty-forty split specified by the grazing agreement, was appropriate because Anthony was feeding her hay to the cattle. [¶ 35.] Each party presented the trial court with a plausible theory as to the circumstances of Arlene's fifty-percent payment to Anthony. The trial court concluded she mistakenly paid half of the proceeds from the 1990 calf crop to Anthony because of her belief that the grazing agreement applied. The trial court specifically found no oral agreement existed concerning the wintering fees for the 1990 calf crop. We will not seek reasons to reverse a trial court's findings of fact. R & S Construction Co. v. BDL Enterprises, 500 N.W.2d 628, 630 (S.D.1993); Insurance Agents, Inc. v. Zimmerman, 381 N.W.2d 218, 219 (S.D.1986). While we may not have resolved the conflicting evidence as the trial court did, we are not firmly convinced the trial court's determination that Arlene mistakenly made the payment was clearly erroneous. In re S.A.H., 537 N.W.2d 1, 5 (S.D.1995). [¶ 36.] Anthony was enriched by Arlene's mistake. He received $35,180.82 for wintering one calf crop. This payment was $20,912.82 more than his normal wintering fees for an equal number of cattle. We find no error in the trial court's determination that this enrichment was unjust. Under the circumstances of this case, the trial court's award of restitution in the amount of $20,912.82 was appropriate.[9] [¶ 37.] Affirmed. [¶ 38.] AMUNDSON, KONENKAMP, and GILBERTSON, JJ., concur. [¶ 39.] SABERS, J., dissents. SABERS, Justice (dissenting). [¶ 40.] THE TRIAL COURT ERRED IN REFUSING TO ALLOW ANTHONY TO EXERCISE HIS OPTION TO BUY, AS DAMAGES, IF ANY, COULD SIMPLY BE ADDED TO THE PURCHASE PRICE. [¶ 41.] I dissent because Anthony's actions under the contracts do not constitute material breaches warranting rescission. Rescission of a contract is governed by SDCL 53-11-2; the trial court held that subdivision (2) controlled: A party to a contract may rescind the same in the following cases only: ... (2) If through fault of the party as to whom he rescinds, the consideration for his obligation fails in whole or in part; ... 854 However, a rescission is permitted only for breaches which are substantial and relate to a material part of the contract: [R]escission of a contract is not generally permitted for a casual, technical, or unimportant breach or failure of performance, but only for a breach so substantial as to tend to defeat the very object of the contract. The same principle applies to rescission based upon partial failure of consideration under our statute. Such a breach must also be substantial or relate to a material part of the contract. Kary v. Arnold, 252 N.W.2d 326, 329 (S.D. 1977) (emphasis added) (citations & internal quotations omitted); accord S & S Trucking v. Whitewood Motors, Inc., 346 N.W.2d 297, 300 (S.D.1984). The "object" of the contract "is the thing which it is agreed, on the part of the party receiving the consideration, to do or not to do." SDCL 53-5-1. Here, the question is whether Anthony defeated the object of the contracts, which was to transfer to him an interest in the ranch, equipment, and tools and to compensate Arlene therefor. [¶ 42.] Under the real estate lease, Anthony agreed, among other provisions, to make payments, with one-half of the payments to be credited to the purchase price of the ranch in the event he exercised the purchase option. It is not disputed that he timely made all payments. The only alleged breach of the real estate lease was the remodeling done to the mobile home. Anthony constructed a walkway between the mobile home and an existing addition. The trial court found this was a breach of the section requiring the buildings to be maintained in their current state of repair. It is unclear how this can constitute a "substantial" breach, when the mobile home was put on the property as living quarters for Anthony and the remodeling neither affected Arlene's home, nor bore any real relation to the object of the contract, i.e., for Anthony to lease the land and manage it as a ranching operation. The lease agreement did not preclude improvements[10] to the buildings unless they resulted in mechanic's or materialmen's liens. There is no claim that any such liens materialized. Arlene claims she was worried the remodeling would prevent a later sale because she might not be able to move the mobile home. If such a speculative and remote concern amounts to a breach, the remedy is generally damages "measured by the reasonable cost of putting the leased premises into the state of repair contemplated by the broken covenant." Regan v. Moyle Petroleum Co., 344 N.W.2d 695, 697 (S.D.1984) (citations omitted). [¶ 43.] Additionally, when a tenant exercises his option to purchase, "the lease and all its incidents, express or implied, are blotted out of existence." 49 AmJur2d Landlord & Tenant § 407, at 351 (1995). The mobile home was obviously part of the package, because the contract provided that Arlene would retain use of the ranch house even after Anthony became owner. Therefore, when Anthony attempted to exercise his option, any "damage" done to the mobile home ceased to be of any concern to Arlene. [¶ 44.] The equipment lease, like the land lease agreement, provided that half of Anthony's rental payments would count toward the purchase price if he exercised his option to purchase the land and the equipment. It is not disputed that Anthony made all payments in a timely fashion. He was delinquent in remitting the trade-in credits on two pieces of equipment. Arlene's remedy in this instance was an easily ascertainable dollar amount totaling $6,300.00, plus interest. The equipment subject to the lease is worth $89,725, according to the agreed sale price. Clearly, late payment of $6,300.00, which amounts to slightly more than 7% of the total value of the equipment, does not constitute a "substantial" breach. More importantly, all such credits have since been paid. The trial court should have simply awarded interest on those delinquent payments.[11] 855 [¶ 45.] The decision not to amend the agreement to include the new swather was made by Arlene. Later, two other pieces of "replaced" equipment were not added to the list either. Regardless, the clear language of the contract indicates new and replaced equipment would be included and Anthony would pay rent on such equipment. The replacement equipment also became part of the machinery included in the option to purchase. [¶ 46.] As for the grazing agreement, it is difficult to understand how the trial court found a breach of the written contract based upon the reduction in Arlene's herd. The agreement expressly provides that Arlene's herd would be reduced from the 112 in existence in November 1990: ... the parties contemplate that during the term of this Agreement, Arlene shall reduce her numbers with a corresponding increase in numbers by Anthony. In fact, by Arlene's own testimony, two months prior to filing this lawsuit,[12] she still had approximately 100 head of cattle in her herd. It was not until November of 1994 that Arlene's herd fell below 100 when Anthony culled 19 bred heifers belonging to Arlene.[13] Arlene sold them to a neighbor, who paid precisely what she asked. [¶ 47.] The second basis upon which the trial court found the grazing agreement was breached was Anthony's alleged unfair separation of the cattle, i.e., that he separated them in such a way as to give Arlene the "lower end of the stock." This allegation by Arlene pertains to the 19 bred heifers discussed above;[14] she testified that, in previous years, Anthony always kept the top end of the stock for Arlene's replacement herd. The trial court held that there was sufficient evidence to support Arlene's allegation that these 19 were of lower quality than the heifers Anthony kept for himself. This "evidence" was Arlene's statement to that effect, coupled with her report of a neighbor's comment that the 19 heifers were not of the same quality as the year before. Anthony testified that the selection was done randomly. As the trial court is in the best position to judge the credibility of the witnesses, we do not second-guess such determinations. However, as noted, this same neighbor paid Arlene's asking price; therefore, she has not established any damages resulting from the alleged unfair separation. This clearly does not constitute a material breach of the grazing agreement. [¶ 48.] Arlene testified that in the fall of 1991, she and Anthony agreed that she would pay him $12.00 per head per month to feed her yearlings. By mutual agreement, this amount increased to $15.00 at some later date. In December of 1994, Anthony informed Arlene the price would increase to $20.00. While Arlene may not have agreed to this, and the trial court may have been correct in concluding it was an unreasonable increase, it is not evidence of a breach of the written contract. The fee was agreed to in a collateral, oral agreement. Arlene continued to pay $15.00; therefore, Anthony owes no repayment to Arlene under this agreement. It was up to Anthony to collect the increased fee, which he attempted in his counterclaim.[15] Clearly, it is not evidence of a breach of the written contracts. [¶ 49.] Even when Anthony's actions are considered as a whole, they do not constitute material breaches. Any damage suffered by Arlene can easily be compensated by monetary damages. In the absence of any specific provision in the contract to the contrary, a breach 856 which goes to only a part of the consideration, which is incidental and subordinate to the main purpose of the contract, and which may be compensated in damages, does not warrant a rescission of the contract; the injured party is still bound to perform his part of the agreement, and his only remedy for the breach consists of the damages he has suffered therefrom. 17A AmJur2d Contracts § 578, at 588 (1991) (collecting cases) (footnotes omitted); see also BankWest, N.A. v. Groseclose, 535 N.W.2d 860, 865 (S.D.1995) ("It is a standing rule that a forfeiture shall not bind, when a thing may be done afterwards, or any compensation may be made. Forfeitures have always been considered as odious in the law.") (citation omitted). [¶ 50.] Arlene was not entitled to rescission, and Anthony should have been granted specific performance for the options to purchase the ranch and the equipment. "[W]here there is no express condition in a lease that in order to exercise an option a lessee cannot be in default, the option to purchase could be exercised despite an asserted breach." 49 AmJur2d Landlord & Tenant § 427, at 367 (1995) (footnote omitted). Here, nothing in any of the contracts precluded Anthony from exercising his option to buy. [¶ 51.] In denying specific performance, the trial court and the majority completely ignore SDCL 21-9-5, which provides:[16] Specific performance cannot be enforced in favor of a party who has not fully and fairly performed all the conditions precedent on his part to the obligation of the other party, except when his failure to perform is only partial, and either entirely immaterial or capable of being fully compensated; in which case specific performance may be compelled, upon full compensation being made for the default. (Emphasis added). Here, Anthony's failure to perform was "only partial" and "capable of being fully compensated." [Delay in initial payment] will not defeat specific performance under SDCL 21-9-5 unless it is material. What constitutes materiality was well analyzed in Vol. 5A, Corbin on Contracts, § 1175, p. 304. There it is stated: But where the plaintiff has promised a performance that constitutes part or all of the exchange for the defendant's return performance, that which he has failed to perform may be material and "of the essence" even though the parties did not expressly or impliedly make it a condition of the defendant's duty. Its essential importance, its materiality, is determined with reference to the purposes for which the contract was made, the proportion that it bears to the rest of the contract, the extent of injury that its nonperformance causes to the defendant, and the practices and feelings of the community in like cases. Using this test we hold that the breach was not material and will not defeat a decree of specific performance. The delay was only of a 17-day duration, the amount involved was only $500 of a $112,200 contract, and the record does not reveal that the defendant was in any way injured by the late payment. What the record does reveal is that the defendant, for personal reasons, realized that he really did not want to sell his land and was using the plaintiff's delay as an excuse for repudiating the contract. Cook v. Rezek, 89 S.D. 667, 671-72, 237 N.W.2d 18, 20-21 (1975). [¶ 52.] The tests in Cook can be rephrased here: 1) How material are the breaches in reference to the purposes for which the contract was made? 2) What proportion do the breaches bear to the rest of the contract? 3) 857 What is the extent of injury that nonperformance caused to Arlene? [¶ 53.] First, the purpose of the contracts was to enable Anthony to manage the ranch while using existing equipment and tools, and eventually to buy the ranch and equipment if he so chose. Not one of the alleged breaches undermined this purpose. He made timely rental payments. He paid $20,000 on the tool contract, the full amount due. [¶ 54.] Second, viewing the evidence in the light most favorable to Arlene, the breaches bear insignificant proportion to the rest of the contract. If Anthony rented the property and the equipment for the full ten-year period, he would pay $220,000.[17] If he exercised his option to buy, the total principal of the contract would be $303,225.[18] Over a 5½ year period, Anthony paid $110,000 under the lease agreements and $20,000 under the tool contract, which amount is being unduly forfeited.[19] Half of the lease payments $55,000would apply toward the purchase of the ranch and equipment under the option to buy. Cf. Groseclose, 535 N.W.2d at 865-66 ("[I]t would be unconscionable to allow repossession of this property without allowing an opportunity to cure the breach where the bulk of the contract price has been paid."). The "damage" to the 20-year old trailer was de minimis, as is any interest owed on the delinquent payment of trade-in credits on equipment. As noted, Arlene proved no damages regarding Anthony's alleged unfairness in separating the cattle. There is simply no comparison between the alleged breaches and the rest of the contract. [¶ 55.] Third, any "injuries" suffered by Arlene are insubstantial and compensable in damages. [¶ 56.] The fact that this mother-son relationship obviously soured should not cause a forfeiture of Anthony's option to buy. In fact, if these contracts were viewed objectively as between strangers, there is little question that the buyer would be allowed to exercise his option. Simply because Anthony apparently caused the breakdown in the relationship is insufficient reason to arbitrarily deny him his contractually unrestricted option to buy. I would reverse and remand to allow Anthony to exercise his option to buy in accordance with the contracts. Damages, if any, should be added to the purchase price. NOTES [1] The lease also reserved all mineral rights to Arlene and required her permission before breaking additional ground for farming. [2] The parties agree the tool contract was fully performed. The trial court's rulings concerning the tool contract are not at issue on appeal. [3] Anthony testified he paid Arlene the trade-in credit because "it was getting to be a problem." [4] Anthony's payment for the v-rake trade-in was made ten months after Arlene filed this lawsuit. [5] Only four of the yearlings sold. The other seven did not sell because of inadequate prices. [6] Arlene's original herd consisted of one hundred twelve cattle. [7] The trial court denied Anthony's claim for alleged unpaid wintering fees. He has not challenged this denial on appeal. [8] SDCL 53-11-2(2) provides for the rescission of a contract "[i]f through fault of the party as to whom he rescinds, the consideration for his obligation fails in whole or in part." [9] Anthony has not challenged the amount set by the trial court for wintering the 1990 calf crop as inappropriate. [10] The majority restates Arlene's argument, i.e., that supports were placed in the mobile home to prevent the collapse of the roof; Anthony testified that the supports were temporary until a new wall could be built. [11] When asked why she did not ask Anthony for interest on the $5,500 trade-in credit on a baler, Arlene replied, "I was just satisfied that I got the fifty-five hundred." Anthony testified that Arlene attempted to return the check to him within moments of receiving it. [12] Arlene hired an attorney in September of 1994 and filed suit in January of 1995; however, she testified that her decision to sue Anthony was made in June of 1994. [13] Neither the trial court's finding that Anthony "began reducing Plaintiff's cow herd in 1994 and 1995," nor the majority's statement that Anthony "systematically reduced his mother's herd" (supra ¶ 27) find support in the record. [14] There were other allegations that Anthony kept the best calves for himself but no evidence was offered to support this claim. Additionally, despite a provision which stated the parties would bear the death loss of their own cattle, Anthony always paid Arlene for her share of calves counted at weaning even though the sale did not occur until they were yearlings, when the numbers might be reduced. [15] Anthony did not appeal the adverse ruling on this issue. [16] The majority relies on the "clean hands" doctrine in support of its conclusion that Anthony was not entitled to specific performance, citing Kane v. Schnitzler, 376 N.W.2d 337, 341 (S.D. 1985) and Shedd v. Lamb, 1996 SD 117, 553 N.W.2d 241. Kane is inapposite, as the parties being denied relief were guilty of fraud. Arlene made no allegation of fraud on Anthony's part. Shedd is also distinguishable, as the parties being denied the right to rescind made gross misrepresentations regarding the general well-being of their business. As SDCL 21-9-5 makes clear, one seeking specific performance is allowed that remedy even if he has not performed, to the letter, every contractual condition. [17] $140,000 rent on the real property (10 years × $14,000); $60,000 rent on the equipment (10 years × $6,000); $20,000 for the tools. [18] Equipment: $89,725; tools: $20,000; land: $193,500 (4300 acres @ $45.00 per acre). [19] In addition to the substantial amount of money invested by Anthony, he had already devoted five years to management of the ranch prior to the contracts being drawn. This decision will result in a forfeiture of an investment of $130,000 and 10½ years.	01-03-2023	06-12-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349813/	870 P.2d 129 (1994) 117 N.M. 167 ANADARKO PETROLEUM CORPORATION, Plaintiff-Appellant, v. Jim BACA, Commissioner of Public Lands, State of New Mexico, Defendant-Appellee. No. 21111. Supreme Court of New Mexico. February 22, 1994. Hinkle, Cox, Eaton, Coffield & Hensley, Richard E. Olson, Charles A. Sutton, Roswell, for appellant. Dahl L. Harris, Sp. Asst. Atty. Gen., Santa Fe, for appellee. OPINION FRANCHINI, Justice. Anadarko Petroleum Corporation (Anadarko) appeals the dismissal of its claim for refund against the Commissioner of Public Lands of the State of New Mexico (Commissioner) for failure to state a claim upon which 130 relief can be granted pursuant to SCRA 1986, 1-012(B)(6). We affirm. Anadarko is the operator of the Langley-Mattix Penrose Sand Unit (the Unit). The State of New Mexico is the lessor and owner of a royalty interest in a number of tracts committed to the Unit. The State took its royalty interest in kind from January 1, 1978 through January of 1981. In 1979, Anadarko's predecessor in interest, Anadarko Production Company, filed suit in the United States District Court for the District of Kansas. Fletcher v. United States Dep't of Energy (In re the Dep't of Energy Stripper Well Exemption Litig.), 763 F.Supp. 498 (D.Kan. 1979) (hereinafter Stripper Well Litigation). This case was consolidated with other similar litigation. See In re Department of Energy Stripper Well Exemption Litigation, 472 F.Supp. 1282 (J.P.M.L.1979). The purpose of the Stripper Well Litigation was to seek a declaration that the injection wells in the unit were stripper wells and therefore Anadarko and other interest owners were entitled to preferential stripper well prices.[1] The federal district court permitted the oil producers to sell oil at the stripper well prices. Nevertheless, the court required the oil producers to deposit into an escrow fund the difference between the prices received on the open market and the regulated price. Ultimately, it was determined that the stripper well price was inappropriate and this decision was affirmed on appeal. Energy Reserves Group, Inc. v. Department of Energy (In re Department of Energy Stripper Well Litigation), 690 F.2d 1375 (Temp.Emer.Ct.App.1982), cert. denied sub nom., Energy Reserves Group, Inc. v. Hodel, 459 U.S. 1127, 103 S.Ct. 763, 74 L.Ed.2d 978 (1983). Thereafter, an audit of the escrow fund was conducted by the Department of Energy (DOE) and a shortfall was found. By reason of the operator's liability doctrine, a doctrine advanced by the DOE and set out in Sauder v. Department of Energy, 648 F.2d 1341, 1347-48 (Temp.Emer.Ct.App.1981), Anadarko was required to pay the full amount of the escrow shortfall, including the Commissioner's portion. On December 21, 1990 Anadarko filed a cross-claim against the State of New Mexico. The claim was ultimately dismissed on Eleventh Amendment grounds and affirmed on appeal. Fletcher v. United States Dep't of Energy (In re Dep't of Energy Stripper Well Litig.), 763 F.Supp. 498 (D.Kan.1991), aff'd sub nom. Anadarko Prod. Co. v. New Mexico (In re Dep't of Energy Stripper Well Litig.), 956 F.2d 282 (Temp.Emer.Ct.App.1992). A stipulated agreement between Anadarko and the DOE was entered into resolving the dispute and determining liability between the parties. The Commissioner was not a party to the stipulated agreement although Anadarko requested that the Commissioner participate in settlement negotiations. Anadarko paid over seven million dollars into the escrow fund. Of this amount, Anadarko claims that $866,658 was attributable to the principal and interest owing on the royalty oil sold by New Mexico, the proceeds for which had been paid directly to the State but which the State had not paid into the escrow account. Thereafter, Anadarko filed a statutory claim for refund pursuant to NMSA 1978, Sections 19-7-59 to -63 (Repl.Pamp.1985 & Cum.Supp.1993) (the Act) for the $866,658 allegedly paid into the escrow fund on behalf of New Mexico. The Commissioner disproved the application and pursuant to Section 19-7-61 filed the application for refund in the district court of Santa Fe County. Anadarko filed a statement of additional facts as set out by Section 19-7-61. A motion to dismiss was filed by the Commission and granted by the district court. 131 I. Anadarko contends that the trial court erred in concluding that Anadarko failed to plead a legally sufficient claim for refund. For purposes of a motion to dismiss for failure to state a claim, we assume the truth of the facts alleged in the complaint. Castillo v. County of Santa Fe, 107 N.M. 204, 205, 755 P.2d 48, 49 (1988). A motion to dismiss should only be granted if it appears that plaintiff cannot recover or be entitled to relief under any state of facts provable under the complaint. Id. at 206, 755 P.2d at 50. Anadarko's claim for refund was made pursuant to Sections 19-7-59 to -63. The statutory requirements necessary to state a cause of action for refund under the Act are proof that "[a]ny money erroneously paid on account of any lease or sale of state lands, which money is not carried in any suspense fund but has been distributed to the proper income or permanent fund, shall be repaid in the manner prescribed in this section." Section 19-7-59(A) (Cum.Supp.1993). Subsections B, C and D further delineate the manner for repayment of a valid claim. Because Anadarko seeks a refund of $866,658, Subsection D governs the manner of refund and "money erroneously paid shall be refunded pursuant to the provisions of Sections 19-7-60 through 19-7-63." Section 19-7-59(D). Section 19-7-60 (Repl.Pamp.1985) specifies that "[a]ny person claiming a refund under the provisions of this act ... shall file with the commissioner of public lands a claim for refund, stating therein the amount claimed to have been erroneously paid, the fund or funds to which such payment was credited and the reasons why such payment was erroneously made." Section 19-7-62 (Repl. Pamp.1985) provides for payment of refunds from the state lands maintenance fund, and Section 19-7-63 (Repl.Pamp.1985) states that refunds shall be made "only out of that part of the state lands maintenance fund distributable to that beneficiary into whose permanent fund the erroneous distribution was made." Anadarko argues that the allegations of its claim fall within the requirements of the Act. In addition, Anadarko contends that it meets the object of the Act as stated in Staplin v. Vesely, 41 N.M. 543, 544-45, 72 P.2d 7, 7 (1937) which is "to authorize the return to the owner of moneys erroneously paid to the Commissioner of Public Lands in the transaction of business when it is covered into his funds in the State Treasury." As grounds for its erroneous payment, Anadarko alleges that the amount claimed arose from Anadarko's payment of an obligation imposed upon it by the federal district court in the Stripper Well Litigation because of the operator's liability doctrine and that the amount claimed in refund was erroneously paid on account of state leases. "Statutory language should be interpreted literally." State ex rel. Stratton v. Serna, 109 N.M. 1, 3, 780 P.2d 1148, 1150 (1989). "Where there is no ambiguity, there is no room for alternative interpretation." Id. When statutory language is clear and unambiguous, "we must give effect to that language and refrain from further statutory interpretation." State v. Jonathan M., 109 N.M. 789, 790, 791 P.2d 64, 65 (1990). Statutes authorizing suits against the state are strictly construed. See Board of Directors of the N.M. Insane Asylum v. Runkel (In re Bogert's Will), 64 N.M. 438, 443, 329 P.2d 1023, 1026 (1958). With these guidelines in mind we hold that Anadarko's allegations lie beyond the scope of the Act because both the plain statutory language and object of the Act require overpayment to the Commissioner, overpayment of amounts due under particular state leases, and payment in error. Anadarko argues that although it had not actually paid dollars to the Commissioner, it has a valid claim for refund because a payment attributed to the Commissioner's benefit meets the requirements of the Act. We believe the Act is clear in requiring that an overpayment must be erroneously made to the Commissioner or to funds administered by the Commissioner. In addition, the plain meaning of "refunds" from a governmental entity is that "[m]oney received by the government or its officers which, for any cause, are to be refunded or restored to the parties paying them." Black's Law Dictionary, 1282 (6th ed. 1990). Here, as the Commissioner did not receive the money which Anadarko 132 alleges is paid to the federal court escrow fund, he cannot properly refund the same to Anadarko. Anadarko argues that it satisfies the Act's requirement of showing overpayment of amounts due on account of particular state leases by alleging a specific amount of overpayment made to discharge an obligation attributed to the state, so long as the leases are specifically named. The procedural mechanisms for refund do not permit the Commissioner to make refunds when he has not received overpayment for certain amounts due under particular state leases. The Act sets out in several provisions that an amount erroneously overpaid on account of a particular state lease can be refunded only from the fund to which it was properly credited or distributed. Section 19-7-59(A) provides that "[a]ny money erroneously paid on account of any lease or sale of state lands, which ... has been distributed to the proper income or permanent fund, shall be repaid in the manner prescribed in this section." Section 19-7-60 sets out the procedure for claiming a refund and requires the claimant to state the amount claimed, the fund or funds to which payment was credited, and why the payment was erroneously made. Other provisions delineate how a valid claim is to be repaid, including deductions from subsequent royalty payments. Section 19-7-59(B), paying out of funds distributable to the fund that received the erroneous payment, Section 19-7-62, and paying "only out of that part of the state lands maintenance fund distributable to that beneficiary into whose permanent fund the erroneous distribution was made[,]" Section 19-7-63. Rather than alleging overpayment of a specific amount of money due for any particular named lease, Anadarko brings a general claim against the State for reimbursement. This general allegation of overpayment does not satisfy the statutory requirements because the Act only permits a refund from that part of the state lands maintenance fund that is distributable to the fund receiving the erroneous payment, see Section 19-7-62, or, in the case of erroneous payment to the permanent fund, from that part of the state lands maintenance fund distributable to the beneficiary whose permanent fund received the erroneous payment. See Section 19-7-63. Anadarko alleged that its overpayment was not carried in any suspense fund but was distributed to the proper income fund, the identity of which was unknown. Anadarko has not met the statutory requirement because its overpayment, as alleged, was not made to the Commissioner, and therefore, there was no money for the Commissioner to distribute to an income or permanent fund and no basis for properly making a refund under the Act. See Sections 19-7-59(A), -60, -62 & -63. Anadarko all but concedes that its claim does not fit within the technical aspects of the statutory procedure for refunds, but it argues that its claim should be treated like one because its claim falls within the spirit or reason of the statute. We disagree. The Act requires money to be "erroneously paid" to the Commissioner. See Staplin, 41 N.M. at 544-45, 72 P.2d at 7. Section 19-7-59(A) provides for repayment of "money erroneously paid on account of any lease or sale of state lands." To authorize a refund under this provision, there must be an error of fact alleged and proved. Staplin, 41 N.M. at 545, 72 P.2d at 8. An error of fact is "`that error which proceeds either from ignorance of that which really exists, or from a mistaken belief in the existence of that which has none.'" Id. at 545-46, 72 P.2d at 8 (quoting Delogny v. Her Creditors, 19 So. 614, 614 (La.1896) (other citations omitted). Here, Anadarko fails to allege facts establishing ignorance or mistaken belief relating to payment of amounts due under any lease or state income or permanent funds. Anadarko demonstrates both knowledge of the circumstances about which it complains, and control, as unit operator, of the pricing and allocation of oil from the Langley-Mattix Penrose Sand Unit during the relevant time. Money paid under the circumstances of this case cannot be refunded because Anadarko's court-ordered payment of money into the escrow fund did not constitute an erroneous payment of money to the Commissioner, as required by the Act and our case law. See id. We fully agree with the district court that: 133 "Anadarko may well have a legitimate claim against the State of New Mexico by reason of its payments into an escrow account for royalties on oil taken by the State in-kind, pursuant to the Unit Agreement. But whatever that claim is, it is not a claim for refund of payments erroneously made to the Commissioner viable under [the Act]." We cannot allow a statutory claim for refund where it neither fits within the provisions of the Act nor meets its object. In view of the foregoing, we affirm the order of the trial court dismissing Anadarko's claim for refund. IT IS SO ORDERED. BACA and MONTGOMERY, JJ., concur. NOTES [1] A "stripper well" indicates a class of wells that average fewer than ten barrels of oil per day in production. See In re Dep't of Energy Stripper Well Exemption Litig., 472 F.Supp. at 1284. "An injection well is a well through which water, natural gas or other material is injected into the ground, thereby creating pressure in the geological formation that forces crude oil out from another well." Id. at n. 1. In 1974, the Federal Energy Administration (a predecessor to the Department of Energy) issued Ruling 1974-29, 39 Fed.Reg. 44,414 (1974) which held that injection wells were not stripper wells for purposes of qualifying for the stripper well exemption from price controls. Id. at 1284. It is that ruling that Anadarko and other oil companies were challenging.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2758216/	12-4764-cv Gayle v. Harry’s Nurses Registry, Inc. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 8th day of December, two thousand fourteen. Present: ROBERT A. KATZMANN, Chief Judge, RALPH K. WINTER, Circuit Judge, VICTOR MARRERO, District Judge.* ________________________________________________ CLAUDIA GAYLE, Individually, On Behalf of All Others Similarly Situated, and as Class Representative, ALINE ANTENOR, ANNE C. DEPASQUALE, ANNABEL LLEWELLYN- HENRY, EVA MYERS-GRANGER, LINDON MORRISON, NATALIE RODRIGUEZ, JACQUELINE WARD, DUPONT BAYAS, CAROL P. CLUNIE, RAMDEO CHANKAR SINGH, CHRISTALINE PIERRE, LEMONIA SMITH, BARBARA TULL, HENRICK LEDAIN, MERIKA PARIS, EDITH MUKANDI, MARTHA OGUNJANA, MERLYN PATTERSON, ALEXANDER GUMBS, SEROJNIE BHOG, GENEVIEVE BARBOT, CAROLE MOORE, RAQUEL FRANCIS, MARIE MICHELLE GERVIL, NADETTE MILLER, PAULETTE MILLER, BENDY PIERRE-JOSEPH, ROSE-MARIE ZEPHIRIN, SULAIMAN ALI-EL, DEBBIE ANN BROMFIELD, REBECCA PILE, MARIA GARCIA SHANDS, ANGELA COLLINS, BRENDA LEWIS, SOUCIANNE QUERETTE, SUSSAN AJIBOYE, JANE BURKE HYLTON, WILLIE EVANS, PAULINE GRAY, EVIARNA TOUSSAINT, GERALDINE JOAZARD, NISEEKAH Y. EVANS, GETTY ROCOURT, * Hon. Victor Marrero, United States District Judge for the Southern District of New York, sitting by designation. CATHERINE MODESTE, MARGUERITE L. BHOLA, YOLANDA ROBINSON, KARLIFA SMALL, JOAN-ANN R. JOHNSON, LENA THOMPSON, MARY A. DAVIS, NATHALIE FRANCOIS, ANTHONY HEADLAM, DAVID EDWARD LEVY, MAUD SAMEDI, BERNICE SANKAR, MARLENE HYMAN, LUCILLE HAMILTON, PATRICIA ROBINSON, Plaintiffs-Appellees, v. No. 12-4764-cv HARRY’S NURSES REGISTRY, INC., HARRY DORVILIEN, Defendants-Appellants. ________________________________________________ For Plaintiffs-Appellees: JONATHAN ADAM BERNSTEIN, Levy Davis & Maher LLP, New York, NY For Defendants-Appellants: RAYMOND NARDO, Mineola, NY (Mitchell L. Perry, White Plains, NY, on the brief) Appeal from the United States District Court for the Eastern District of New York (Garaufis, J. and Sifton, J.). ON CONSIDERATION WHEREOF, it is hereby ORDERED, ADJUDGED, and DECREED that the orders and judgment of the district court be and hereby are AFFIRMED. Defendants-Appellants Harry’s Nurses Registry, Inc. (“Harry’s”) and Harry Dorvilien appeal from a September 18, 2012 judgment of the United States District Court for the Eastern District of New York (Garaufis, J.), which followed four orders (Garaufis, J. and Sifton, J.) that culminated in a grant of summary judgment to the plaintiff class on their unpaid overtime claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201–219. A fifth order (Garaufis, J.) adopted in full a magistrate judge’s report and recommendation to correct the judgment and The Clerk of Court is directed to amend the caption. 2 grant attorneys’ fees, yielding an amended judgment dated October 16, 2013. We assume the parties’ familiarity with the underlying facts, procedural history, and issues on appeal. We review de novo a district court’s grant of summary judgment, resolving all ambiguities and drawing all reasonable inferences in favor of the non-moving party. See Wrobel v. Cnty. of Erie, 692 F.3d 22, 27 (2d Cir. 2012). Summary judgment is appropriate only where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The appellants’ principal contention is that the district court erred in determining that the nurses listed and placed by Harry’s were employees rather than independent contractors. We find that the district court was correct. Whether a worker is treated as an employee or an independent contractor under FLSA is determined not by contractual formalism but by “economic realities.” See Rutherford Food Corp. v. McComb, 331 U.S. 722, 727 (1947) (internal quotation marks omitted). Our analysis of the relationship turns on the economic-reality test, which weighs (1) the degree of control exercised by the employer over the workers, (2) the workers’ opportunity for profit or loss and their investment in the business, (3) the degree of skill and independent initiative required to perform the work, (4) the permanence or duration of the working relationship, and (5) the extent to which the work is an integral part of the employer’s business. Brock v. Superior Care, Inc., 840 F.2d 1054, 1058–59 (2d Cir. 1988). “No one of these factors is dispositive; rather, the test is based on a totality of the circumstances.” Id. at 1059. The relationship between Harry’s and the nurses who are plaintiffs here is nearly indistinguishable from the relationship between Superior Care and the plaintiffs in Brock, whom we held to be employees under FLSA. See id. at 1057–58. The district court here explored the 3 first factor at length, finding that Harry’s exercises significant control over the nurses, both economically and professionally. We agree. Indicia of economic control present here include Harry’s policies that: prohibit a nurse from contracting independently with placements, although its nurses may be listed with other agencies; prohibit a nurse from subcontracting a shift to another nurse; prohibit a nurse from taking a partial shift, although a nurse may decline a whole shift; and prohibit a nurse who is unilaterally terminated from collecting contract damages, expectation damages, or liquidated damages, permitting only unpaid wages as damages. Furthermore, the hourly rate paid is not negotiated but is fixed by Harry’s. Indicia of professional control present here include: the work of Harry’s nursing director and nursing supervisors, who monitor the nurses’ daily phone calls reporting to shifts, collect documents and conduct on-site training four to five hours each month, communicate with doctors to ensure that their prescribed care is being carried out, and handle emergencies; the ability of a nursing supervisor to require a nurse to attend continuing education to maintain their licenses; an in- service manual that nurses had to certify having read and understood; training by Harry’s covering HIV confidentiality, ventilators, oxygen, and other medical subjects; and a requirement that each shift include a comprehensive assessment of the patient in the form “progress notes,” which nurses had to submit to get paid. Another critical factor is that the nurses have no opportunity for profit or loss whatsoever; they earn only an hourly wage for their labor and have no downside exposure. The nurses have no business cards, advertisements, or incorporated vehicle for contracting with Harry’s, and they are paid promptly regardless of whether the insurance carrier pays Harry’s promptly. We agree with the district court that this second factor weighs heavily in favor of the 4 nurses’ status as employees. That the nurses are skilled workers in a transient workforce “reflects the nature of their profession and not their success in marketing their skills independently.” Id. at 1061. Finally, the appellants cavil that the nurses are not integral to Harry’s Nurses Registry, notwithstanding that “Nurses” is—literally—Harry’s middle name. But placing nurses accounts for Harry’s only income; the nurses are not just an integral part but the sine qua non of Harry’s business. Considering all these circumstances, we agree with the district court that these nurses are, as a matter of economic reality, employees and not independent contractors of Harry’s. The remainder of the appellants’ arguments merit less discussion. First, Harry’s again fights its name by arguing that its nurses were not nurses but instead home health aides and were therefore unprotected by FLSA because of its exemption for domestic companionship workers. See Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 161–62 (2007). Having not been raised in the district court, this affirmative defense is waived on appeal, see Saks v. Franklin Covey Co., 316 F.3d 337, 350 (2d Cir. 2003), but it is also wrong: The plaintiffs are all registered nurses (RNs) or licensed practical nurses (LPNs) who do not perform a “companionship service” within the meaning of the exemption at issue. See 29 C.F.R. § 552.6 (“The term ‘companionship services’ does not include services relating to the care and protection of the aged or infirm which require and are performed by trained personnel, such as a registered or practical nurse.”). A related argument advanced by the appellants is that the nurses are not covered by FLSA because they do not meet the threshold requirement of having performed overtime “work,” having often left jobs at hospitals caring for 40 patients to now care only for one patient in a home, a “97.5% reduction in task responsibility.” Appellants’ Br. 43. This argument does violence to the dictionary definition of work as well as to the dignity of nurses, and we reject it emphatically. 5 Second, the appellants misunderstand FLSA’s liquidated damages provision, which presumptively awards “an additional equal amount as liquidated damages,” 29 U.S.C. § 216(b), but provides for an affirmative defense in the event that a liable defendant had a reasonable, good-faith belief of compliance. See Brock v. Wilamowsky, 833 F.2d 11, 19 (2d Cir. 1987) (“Double damages are the norm, single damages the exception.” (internal quotation marks and alteration omitted)). The defendants failed to carry their “difficult” burden to prove this affirmative defense; the nurses’ failure to argue that defendants willfully violated FLSA has no bearing on the entirely proper liquidated-damages award. Id. Third, the appellants suggest that the class of nurses should be decertified because its members lack commonality. This argument contains no citation to the record, and it is unpersuasive in any event. The district court found commonality among the class based on affidavits from some but not all of its members, the kind of “sensible” approach that we endorsed in Myers v. Hertz Corp., 624 F.3d 537, 554–55 (2d Cir. 2010). Using affidavits from five of the thirty-five class members whose time records demonstrated overtime violations was well within the bounds of reason and practicality. See Reich v. S. New England Telecomms. Corp., 121 F.3d 58, 67 (2d Cir. 1997). The defendants took no discovery directed at commonality, which accounts for the appellants’ lack of citations to the record and leaves us without a basis on which to disturb the district court’s initial finding of commonality. The appellants’ fourth subsidiary argument is that the New York State Public Health Law should govern the outcome because Harry’s is governed by Article 36 whereas Superior Care was governed by Article 28. But state law does not trump FLSA, which permits states and 6 localities to exceed its protections with higher minimum wages or lower maximum workweeks but not to weaken its protections in the other direction. See 29 U.S.C. § 218(a). A fifth and final quibble that we discuss arose in the appellants’ reply brief concerning one plaintiff, Willie Evans, who had lodged an unsuccessful complaint alleging overtime violations with the New York State Department of Labor. This argument was not adequately presented in the appellants’ opening brief, which cited Evans as an example but made no argument concerning collateral estoppel. See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998). And its merits fail in any event—an investigator declined to pursue Evans’s complaint, but that is far different from the full adjudication on the merits required for collateral estoppel. See Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 106 (1991). We have considered the appellants’ remaining arguments and find them to be without merit. For the reasons stated herein, the judgment of the district court is AFFIRMED. FOR THE COURT: CATHERINE O’HAGAN WOLFE, CLERK 7	01-03-2023	12-08-2014
https://www.courtlistener.com/api/rest/v3/opinions/2758217/	13-4491 Chhabra v. Holder UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 8th day of December, two thousand fourteen. PRESENT: ROBERT A. KATZMANN, Chief Judge, RALPH K. WINTER, ROBERT D. SACK, Circuit Judges. _____________________________________ VIJAY KUMAR CHHABRA, Petitioner, v. No. 13-4491-ag ERIC H. HOLDER, JR., UNITED STATES ATTORNEY GENERAL, Respondent. _____________________________________ FOR PETITIONER: THOMAS E. MOSELEY, Newark, NJ. FOR RESPONDENT: TIMOTHY G. HAYES, Trial Attorney; Stuart F. Delery, Assistant Attorney General; Cindy S. Ferrier, Assistant Director, Office of Immigration Litigation, Civil Division, United States Department of Justice, Washington, D.C. UPON DUE CONSIDERATION of this petition for review of a Board of Immigration Appeals (“BIA”) decision, it is hereby ORDERED, ADJUDGED, and DECREED that the petition for review is DISMISSED. Petitioner Vijay Kumar Chhabra, a native and citizen of India, seeks review of a November 15, 2013 decision of the BIA denying his motion to reopen proceedings. In re Vijay Kumar Chhabra, No. A035 450 508 (BIA Nov. 15, 2013). We assume the parties’ familiarity with the underlying facts and procedural history in this case. By statute, a party generally may file only one motion to reopen removal proceedings, and must do so no later than ninety days after the date of a final administrative order of removal. 8 U.S.C. § 1229a(c)(7)(A), (C)(i); 8 C.F.R. § 1003.2(c)(2). Chhabra did not dispute that his 2013 motion was both number barred and untimely, but instead asked the BIA to exercise its authority to reopen proceedings sua sponte. 8 C.F.R. § 1003.2(a). We lack jurisdiction to review a decision of the BIA declining to reopen a case sua sponte because such a decision is “entirely discretionary.” Ali v. Gonzales, 448 F.3d 515, 518 (2d Cir. 2006) (per curiam). The BIA, however, has held that sua sponte reopening may be warranted if there has been “a fundamental change in the law,” and not merely “an incremental development,” In re G-D-, 22 I. & N. Dec. 1132, 1135 (BIA 1999), and we may retain jurisdiction to determine whether the BIA erred in declining to exercise its sua sponte authority based on a “misperce[ption of] the legal background,” Mahmood v. Holder, 570 F.3d 466, 469 (2d Cir. 2009). Here, the BIA did not misperceive the law in finding that there has been no “fundamental change in the law” in light of the Supreme Court’s decisions in Moncrieffe v. Holder, 133 S. Ct. 2 1678 (2013), Descamps v. United States, 133 S. Ct. 2276 (2013), and Kawashima v. Holder, 132 S. Ct. 1166 (2012). Any change in the law resulting from the Moncrieffe and Descamps decisions were not material to Chhabra’s claim here. Moncrieffe and Descamps examined the use of the categorical and modified categorical approaches when considering whether a conviction constitutes an aggravated felony. See Moncrieffe, 133 S. Ct. at 1684–85; Descamps, 133 S. Ct. at 2283–86. Chhabra challenges that his conviction under 26 U.S.C. § 7201 constituted a crime involving moral turpitude, but the BIA did not apply the modified categorical approach in reaching its conclusion. The record shows that the BIA considered nothing other than the text of § 7201 and prior precedent in determining that convictions under § 7201 were crimes involving moral turpitude. Because the BIA’s earlier decision did not look to Chhabra’s record of conviction, the BIA therefore did not err in finding that Moncrieffe and Descamps did not effect a fundamental change of law material to Chhabra’s case. The BIA also did not misperceive the legal background when it concluded that the decision in Kawashima did not create a fundamental change in the law. Kawshima stated that “the elements of tax evasion pursuant to § 7201 do not necessarily involve fraud or deceit” and that “it is possible to willfully evade or defeat payment of a tax under § 7201 without making any misrepresentation.” 132 S. Ct. at 1175. Based on those statements, Chhabra contends that his conviction under 26 U.S.C. § 7201 did not constitute a crime involving moral turpitude. While we do not decide at this time whether, in light of Kawashima, a § 7201 violation is a crime involving moral turpitude, the BIA did not err in exercising its discretion and concluding that Kawashima did not constitute a fundamental change in the law. The BIA relied both on the 3 possibility that the key statement in Kawashima regarding § 7201 was dicta and on the failure of Kawashima to specifically address whether § 7201 constituted a crime involving moral turpitude. Accordingly, the BIA did not misperceive the legal background when it concluded that Kawashima did not effect a fundamental change in the law. Because the BIA’s decision declining to reopen proceedings sua sponte was not based on a misperception of the law, we lack jurisdiction to review that decision. Mahmood, 570 F.3d at 469. For the foregoing reasons, the petition for review is DISMISSED. As we have completed our review, any stay of removal that the Court previously granted in this petition is VACATED, and any pending motion for a stay of removal in this petition is DISMISSED as moot. FOR THE COURT: Catherine O’Hagan Wolfe, Clerk 4	01-03-2023	12-08-2014
https://www.courtlistener.com/api/rest/v3/opinions/1353266/	614 S.E.2d 37 (2005) 279 Ga. 466 SHORTER COLLEGE et al. v. BAPTIST CONVENTION OF GEORGIA et al. No. S04G1291. Supreme Court of Georgia. May 23, 2005. Reconsideration Denied June 30, 2005. Bruce Perrin Brown, Thomas Bruno Bosch, McKenna, Long & Aldridge, LLP, Atlanta, David F. Guldenschuh, Smith, Shaw & Maddox, LLP, Rome, for Appellants. Walter H. Bush, Jr., Thomas O. Duvall, Jr., Jason Edward Bring, Andrew Blaine Flake, Arnall, Golden & Gregory, LLP, Richard L. Robbins, Valerie Strong Sanders, Sutherland, Asbill & Brennan, Atlanta, for Appellees. J. Anderson Davis, Brinson, Askew, Berry, Seigler, Richardson & Davis, Rome, Roy E. Barnes, Scott Colley, Newnan, for amici curiae. CARLEY, Justice. In 1959, Shorter College (College) amended its charter to confer on the Baptist Convention of the State of Georgia (GBC) the exclusive authority to name the school's Board of Trustees (Board). As a result of the grant of this power to choose the trustees, GBC assumed the status of a "member" of the College. OCGA § 14-3-140(22). Over the years, GBC and the College collaborated in the trustee selection process. In 2001, however, a conflict arose as to GBC's 38 exercise of its authority under the charter to fill two vacancies on the Board. The controversy was precipitated by the Southern Association of Colleges and Schools, which questioned the College's independence and threatened its accreditation because the power to select trustees was vested in GBC. The dispute culminated in GBC's rejection of candidates proposed by the College and the naming of two new trustees who lacked the prior approval of the school. Contending that GBC's power to select the trustees was an encroachment on the independence of the institution which endangered its accreditation, the Board thereafter sought to amend the bylaws to allow the school some input into the process. However, GBC insisted on continued exercise of the exclusive authority granted to it by the charter, and it named several new trustees to the Board. The College refused to recognize the new trustees selected by GBC. Instead, a majority of the "old" Board approved a plan, denominated as a "dissolution" of the College, whereby all assets of the school, including its name, would be transferred for no consideration to the Shorter College Foundation (Foundation). From the perspective of the "old" Board and its concern about accreditation, this transfer had the desired effect of divesting GBC of its authority to name the trustees, since the Foundation's directors would not be subject to approval or removal by GBC. Thereafter, the College and Foundation filed suit to recover certain pre-dissolution funds that GBC had budgeted for the school's use. GBC answered and counterclaimed, seeking to enjoin the unilateral dissolution of the College by the "old" Board as a void transaction. The validity of the dissolution was addressed on motion for summary judgment, and the trial court granted judgment in favor of the College and Foundation. On appeal, however, the Court of Appeals reversed, concluding that "[t]his corporate reorganization is either a merger or a disposition of assets under the Nonprofit Code. It is not a true dissolution. Absent ... GBC's approval, it cannot stand." Baptist Convention &c. of Ga. v. Shorter College, 266 Ga. App. 312, 319(3), 596 S.E.2d 761 (2004). The College and Foundation (Appellants) applied for certiorari, which we granted in order to determine whether the Court of Appeals correctly held that the Board's effort to effect a "dissolution" of the College was invalid. 1. "[A] corporation is an artificial, not a natural, person." Eckles v. Atlanta Technology Group, 267 Ga. 801, 803(2), 485 S.E.2d 22 (1997). As such, a corporation cannot experience a natural death, but it can undergo a "dissolution," which implies the termination of its existence and its utter extinction and obliteration as an entity or body in favor of which obligations exist or accrue or upon which liability may be imposed. Liquidation of a corporation has been defined to mean the winding up of the affairs of the corporation by reducing its assets, paying its debts, and apportioning the profit or loss. A distribution of all assets is a "winding-up of the affairs" of the corporation and is synonymous with "liquidation." 19 Am.Jur.2d, Corporations, § 2348, pp. 453-454 (2004). This definition of a "dissolution" as the winding up and liquidation of all business affairs applies equally to both for-profit and non-profit corporations in Georgia. OCGA §§ 14-2-1405, 14-3-1406. The transaction at issue in this case would not constitute a "dissolution" in the context of for-profit corporations. The transfer of the assets of the College to the Foundation was not for the purpose of terminating the existence of the school and winding up its affairs, as would have occurred had the intended recipient been another educational institution already having a separate and independent existence, such as Emory, Mercer, Berry or any number of other colleges located in this state. Indeed, the aim of this "dissolution" was the exact opposite. The Board's intent was the preservation of the assets of the College and the continuation of its existence, with the only anticipated result being the transfer of governing authority over the institution to the Foundation and the consequent termination of the power granted by the charter to GBC to select the trustees. As the Court of Appeals noted, the chair of the Board frankly acknowledged that 39 this was the purpose of the "dissolution" in the following excerpt from a letter sent to her fellow trustees notifying them of two proposals that would be submitted for their approval at an upcoming meeting: The first proposal seeks the Board's approval to reorganize the College. This corporate reorganization will be accomplished by dissolving the corporate entity "Shorter College" and simultaneously ... distributing all of the College's assets and assigning all of its liabilities to (the Foundation). The Foundation, which will immediately be renamed "Shorter College," will thereafter carry on all of the business and activities previously conducted by the College. (Emphasis supplied.) Baptist Convention v. Shorter College, supra at 318(3), 596 S.E.2d 761. Such a "reorganization" fails to qualify as a valid "dissolution" of a for-profit corporation because the end result is not the extinction of any former business, but the mere transfer of the same business to another entity which thereafter will continue its operation. The reorganization here attempted did not contemplate the termination of the corporate business, nor liquidation and distribution. It was an attempt to continue the corporate business under a new corporate entity.... This is not a dissolution. [Cit.] Baptist Convention &c. of Ga. v. Shorter College, supra at 318(3), 596 S.E.2d 761 (citing authority applicable to for-profit corporations). Simply put, while the assets of a dissolving for-profit corporation can be transferred, its underlying business cannot survive a "dissolution" since its commercial affairs must be wound up and liquidated. "Bodies corporate are not dead bodies, but living persons. When they die they are annihilated. Among artificial persons there is no resurrection from the dead...." State of Ga. v. The Atlantic and Gulf R. Co., 60 Ga. 268, 274 (1878). Thus, at least in the context of for-profit corporations, "dissolution" and "reorganization" are completely incompatible concepts. It appears, therefore, that resolution of this case depends upon whether there is any legal distinction to be drawn between the dissolution of a for-profit and a non-profit corporation. The current Georgia Nonprofit Corporation Code "was drawn principally from the Georgia Business Corporation Code" and reflects "the desire to conform [it] to the Business Code whenever possible and appropriate...." Comment to OCGA § 14-3-101. See also 2 Kaplan's Nadler, Ga. Corps., Lim. Parts. and Lim. Liab. Cos. (1999 ed.), § 14-2, p. 21. Thus, "`"unless otherwise specifically noted, the fundamental rules and principles of law of profit and business corporations are equally applicable to nonprofit corporations." (Cit.)' [Cit.]" Dunn v. Ceccarelli, 227 Ga.App. 505, 507(1), 489 S.E.2d 563 (1997). See also Southeast Shippers Assn. v. Ga. PSC, 211 Ga. 550, 555(1), 87 S.E.2d 75 (1955) (applying prior law). With specific regard to OCGA § 14-3-1406, nothing in the language of that provision indicates that the meaning of "dissolution" differs in any substantive particular from its for-profit counterpart in OCGA § 14-2-1405. Indeed, the wording of the two statutes is essentially identical, and the Comment to OCGA § 14-3-1406 specifies that it "is based on section 14-2-1405 of the [Georgia] Business [Corporation] Code[, OCGA §§ 14-2-101 et seq.]" As statutes which are in pari materia, OCGA §§ 14-2-1405 and 14-3-1406 must be construed together and harmonized wherever possible. Schrenko v. DeKalb County School Dist., 276 Ga. 786, 790(1), 582 S.E.2d 109 (2003); Georgia Forestry Comm. v. Taylor, 241 Ga.App. 151, 153, 526 S.E.2d 373 (1999). Because the "wind up and liquidate" language of OCGA § 14-3-1406 was borrowed verbatim from OCGA § 14-2-1405, the "dissolution" of non-profit and for-profit corporations must necessarily be analogous in that particular aspect. See Knight v. State of Ga., 992 F.2d 1541, 1545(II)(C)(1) (11th Cir.1993). Therefore, the Court of Appeals correctly held that the effort to reorganize the College, which clearly would not qualify as a dissolution of a for-profit corporation, was likewise not a valid "dissolution" of a non-profit corporation within the meaning of OCGA § 14-3-1406. This is true even though, under OCGA § 14-3-1402(b), the Board had the unilateral power to approve a dissolution of the College. See Baptist Convention &c. of Ga. v. Shorter College, supra at 317(2)(b), 596 S.E.2d 761. 40 The mere fact that, as a procedural matter, a majority of the trustees could and did vote in favor of the "dissolution" is not dispositive. The question is whether the transaction was in fact a legally valid "dissolution," and the nomenclature used by the Board certainly is not controlling in that regard. Instead, a corporate dissolution is a "statutory procedure[ ], [so] the statutory requirements must be complied with to accomplish an effective dissolution." Kaplan's Nadler, supra at § 14-35, p. 62. Under OCGA § 14-3-1406, the winding up and liquidation of the business affairs of the dissolving non-profit corporation is one of those requirements. That statutory prerequisite to the effectiveness of a "dissolution" was not satisfied here, notwithstanding the Board's determination to denominate the transaction as such. Because the transfer of the College's assets to the Foundation did not meet substantive requirements of OCGA § 14-3-1406, the trustees' compliance with any of the procedures applicable to the "dissolution" of a non-profit corporation is immaterial. Appellants urge that, because a non-profit corporation does not have financial goals, it is inequitable to require the same complete destruction of the underlying business as with the dissolution of a for-profit corporation. However, the relevant inquiry is the statutory definition of "dissolution" and, in that regard, the specific wording used by the General Assembly, not general concepts of equity, is the controlling factor. "As long as the [statutory] language is clear and does not lead to an unreasonable or absurd result, `it is the sole evidence of the ultimate legislative intent.' [Cit.]" Ray v. Barber, 273 Ga. 856(1), 548 S.E.2d 283 (2001). Under applicable statutes, the business of a corporation, regardless of whether it is operated for profit or not, cannot survive a valid "dissolution." Pursuant to OCGA § 14-3-1402(b), the trustees had every right to vote to dissolve the College and to transfer its assets intact or piecemeal to other separate and independent educational institutions. Such a transfer would perpetuate the underlying beneficial purpose for which the school was created, notwithstanding its own extinction. Under OCGA § 14-3-1406, however, the Board was not authorized to reorganize the school by transferring its assets to the Foundation for the purpose of maintaining the College as a functioning educational institution. 2. OCGA § 14-3-1406(5) requires that a dissolving non-profit corporation "wind up and liquidate its business and affairs," which is exactly what a dissolving for-profit corporation must do under OCGA § 14-2-1405(5). Also, both of our appellate courts previously have held that legal principles should apply equally to both types of corporations unless otherwise expressly indicated. However, the dissent nevertheless concludes that "the legislature set forth different procedures for dissolving nonprofit and for-profit corporations, [so] it is wrong for this Court to mandate that they be the same." P. 42. As support for this assertion, the dissent notes that, while the assets of a dissolving for-profit corporation are conveyed to its shareholders under OCGA § 14-2-1405(4), OCGA § 14-3-1403(b)(3) provides, in relevant part, that certain specified assets of a dissolving non-profit corporation "shall be transferred or conveyed to one or more domestic or foreign corporations, trusts, societies, or organizations engaged in activities substantially similar to those of the dissolving corporation." Because a non-profit corporation does not have shareholders, the class of recipients authorized to receive its assets upon dissolution obviously cannot be the same as those who have a claim to the assets of a dissolving for-profit corporation. Because the recipients of a dissolving non-profit and for-profit corporation are different, the procedures for distribution of those assets must necessarily also differ. However, the differences in the composition of the class of those who have the ultimate claim on the assets of a dissolving corporation and in the procedures regarding the distribution of the assets to them do not have any material bearing on whether the underlying transaction upon which the distribution is based complies with the substantive requirements for accomplishing a corporate dissolution. Whether the distribution of a corporation's assets constitutes a valid dissolution is not determined by how and to whom the assets were conveyed. 41 As a matter of law, any dissolving corporation, whether or not for-profit, must wind up and liquidate "its business and affairs." (Emphasis supplied.) OCGA §§ 14-2-1405(5), 14-3-1406(5). The General Assembly has not otherwise expressly provided that, unlike for-profit corporations, a dissolving non-profit is entitled to perpetuate its business by means of a transfer of all assets to another corporation which will then continue to carry on the identical pre-dissolution activity as was formerly pursued by the previous corporate entity. Instead, OCGA § 14-3-1403(b)(3) provides that a dissolving non-profit corporation is authorized to distribute its assets to another corporation "engaged in activities substantially similar to those of the dissolving corporation." (Emphasis supplied.) Here, the Board did not comply with that statutory mandate by transferring the assets of the College to another corporation which was actually engaged in activities "substantially similar" to those of the purportedly dissolved corporation. Instead, the assets were transferred to the Foundation, which was incorporated for the express purpose of carrying on precisely the same activities formerly pursued by the corporation which the Board sought to dissolve. That transfer was not pursuant to a valid dissolution accomplished pursuant to OCGA § 14-3-1406(5). It constituted an unauthorized effort on the part of the Board to reorganize the College so as to operate the school as before, but with a new set of trustees. The dissent may be correct insofar as it suggests that the subjective intent of the trustees who approved the transfer was furtherance of the mission of the College. However, advancing the school's educational activities is simply not the legal test for determining whether the transaction satisfied the statutory requirements for a dissolution. A dissolution of the College could be accomplished only when "its" business and affairs were wound up and liquidated under OCGA § 14-3-1406(5) and, pursuant to OCGA § 14-3-1403(b)(3), when its assets had been transferred to another organization already engaged in "activities substantially similar" to those which it no longer was authorized to pursue. 3. The trustees of a non-profit corporation are charged with acting "[i]n a manner [he or she] believes in good faith to be in the best interests of the corporation...." OCGA § 14-3-830(1)(A). In this case, the Board fully complied with this standard of conduct, acting in the good faith belief that it was responding to a threat to the accreditation of the College. However, the underlying good faith of the trustees cannot substitute for objective compliance with applicable statutory requirements. Under OCGA § 14-3-1406, a valid "dissolution" of the College would accomplish a more definite and rapid end to the school's existence than the threatened loss of its accreditation. The only other option available to the trustees was to accede to GBC's insistence on the exercise of its exclusive authority under the charter to name the trustees. The Board did not have the power to fashion its own remedy by unilaterally transferring GBC's status and authority as a "member" of the College to the Foundation for the purpose of continuing to operate the school. Therefore, the Court of Appeals correctly reversed the grant of summary judgment in favor of Appellants and remanded the case to the trial court "with instructions to set aside the dissolution as ultra vires pursuant to OCGA § 14-3-304(c)." Baptist Convention &c. of Ga. v. Shorter College, supra at 319(3), 596 S.E.2d 761. Judgment affirmed. All the Justices concur, except FLETCHER, C.J., SEARS P. J., and HUNSTEIN, J., who dissent. FLETCHER, Chief Justice, dissenting. The majority opinion holds that Shorter College's Board of Trustees complied with its governing documents, the Georgia Nonprofit Corporation Code,[1] and its fiduciary duties in dissolving the College and transferring its assets to the Shorter College Foundation. Nevertheless, the majority opinion holds that because the dissolution failed to pass a fourth testcompliance with dissolution requirements applicable to for-profit corporations 42 it was invalid. Because this fourth test is inapposite to nonprofits and unnecessary to prevent sham dissolutions, I dissent. The majority errs by using a definition supplied by the American Jurisprudence treatise, rather than focusing on the requirements established by the Georgia legislature. The treatise itself cautions against relying on its definition to the exclusion of state statutes: "[w]hen evaluating corporate administrative dissolution statutes that vary widely from state to state, it cannot safely be assumed that the term `dissolution' has any strict meaning independent of the jurisdiction and precise context in which that term is applied."[2] The majority opinion falls into this trap of ignoring context. Because the procedure differs depending on which type of entity is being dissolved, the majority opinion is incorrect that "dissolution" means the same thing in Georgia's for-profit and nonprofit corporation codes. When a for-profit corporation is dissolved, its business ceases to exist and its remaining assets are distributed to its shareholders under OCGA § 14-2-1405(4).[3] When a nonprofit is dissolved, however, there is a different procedure: instead of distributing the nonprofit's assets to its members, they are transferred to a similar business under OCGA § 14-3-1403(b)(3).[4] Therefore, the nonprofit's business does not necessarily cease to exist, but may be carried on by a new corporation. Accordingly, the legislature made a nonprofit dissolution more closely resemble a transfer of assets or a reorganization than a for-profit dissolution. The majority opinion compares the dissolution procedures in OCGA § 14-2-1405 and OCGA § 14-3-1406 and states that "the wording of the two statutes is essentially identical." But one of the ways in which it is not identical is that OCGA § 14-3-1406, applicable to nonprofits, mandates dissolving in accordance with a "plan of dissolution." This plan of dissolution must comply with OCGA § 14-3-1403, and it is that statute that contains the pertinent difference regarding the disposition of assets in nonprofit and for-profit dissolutions. Because the legislature set forth different procedures for dissolving nonprofit and for-profit corporations, it is wrong for this Court to mandate that they be the same. I agree with the majority opinion that the Board complied with the letter of the law by dissolving the College and transferring its assets to the Foundation. It is undisputed that the College's governing documents gave only the Board, and not the Baptist Convention of the State of Georgia (GBC), the right to vote on the College's dissolution. Further, under OCGA § 14-3-1402(b), the Board alone had the right to dissolve the College. Therefore, the dissolution complied with the strict letter of the law. I also agree with the majority opinion that compliance with the letter of the law is not enough in this case. We must also ask whether the dissolution complied with the spirit of the law. The test for this is whether the dissolution violated the Board's fiduciary duties.[5] A "sham" dissolution would violate these duties; a valid dissolution would not. Because the College was a nonprofit, the Board owed its fiduciary duties to the College's mission, not to GBC as a member. GBC's contrary contention mistakenly equates "members" of a nonprofit corporation with "shareholders" of a for-profit corporation. In for-profit corporations, the predominant view is that the board of directors owes its fiduciary duties to the corporation's 43 shareholders.[6] In nonprofit corporations, however, these duties are owed not to the members, but to the nonprofit's mission. It is axiomatic that the board of directors [of a nonprofit] is charged with the duty to ensure that the mission of the charitable corporation is carried out. This duty has been referred to as the "duty of obedience." It requires the director of a not-for-profit corporation to "be faithful to the purposes and goals of the organization," since "[u]nlike business corporations, whose ultimate objective is to make money, nonprofit corporations are defined by their specific objectives...."[7] Therefore, the question is whether the Board's actions furthered or hindered the College's mission. The College's mission was "to provide quality higher education... integrat[ing] Christian values within a nurturing community...." The record shows that the College had real reason to believe that it would lose accreditation if it did not address the accreditor's concerns over GBC's influence. The loss of accreditation would have a devastating effect on any college or university, including an inability to attract the best students and faculty and a loss of essential financial aid for students. By taking the actions it did, the Board addressed the accreditor's concerns over GBC's influence, removed the barrier to reaccreditation, and thereby furthered the College's mission of "providing quality higher education." The Foundation will also carry out the College's religious mission by continuing to promote a nurturing, Christian environment in which students will learn. Accordingly, the dissolution furthered both the College's educational and religious missions, whereas ceding to GBC's wishes would have likely cost it accreditation and severely damaged its educational mission. The Board thus fully complied with its fiduciary duties, as the majority opinion concedes. In sum, despite the dissolution having complied with both the letter and the spirit of nonprofit law, the majority opinion also requires compliance with the procedures for dissolving a for-profit corporation. These procedures are inapposite to nonprofit dissolutions. They are also unnecessary to prevent sham dissolutions; adherence to fiduciary duties accomplishes this purpose. Because the Board complied with the College's governing documents, applicable nonprofit dissolution law, and its fiduciary duties, the College's dissolution was proper and must stand. I am authorized to state that Presiding Justice Sears and Justice Hunstein join in this dissent. NOTES [1] OCGA §§ 14-3-101 et seq. [2] 19 AmJur2d, Corporations, § 2348, at 454 (2004). [3] OCGA § 14-2-1405(4) provides that, after making provision for or discharging its liabilities, a for-profit corporation distributes its "remaining property among its shareholders in accordance to their interests." [4] OCGA § 14-3-1403(b)(3) provides that, after making provision for or discharging its liabilities, a nonprofit corporation's assets "shall be transferred or conveyed to one or more domestic or foreign corporations, trusts, societies, or organizations engaged in activities substantially similar to those of the dissolving corporation." [5] See OCGA § 14-3-830; Developments in the Law-Nonprofit Corporations, 105 HARV. L.REV. 1578, 1591 (1992) ("fiduciary duties are especially important in the nonprofit sector because ... [they ensure] the use of corporate assets for corporate purposes"). [6] See, e.g., Lawrence E. Mitchell, A Theoretical and Practical Framework for Enforcing Corporate Constituency Statutes, 70 TEX. L.REV. 579, 586 (1992) (stating that "[t]here is probably no more frequently articulated principle of corporate law than that directors are fiduciaries of the corporation and its stockholders," but revealing good reasons why these duties should sometimes extend to other constituents as well). [7] Manhattan Eye, Ear & Throat Hosp. v. Spitzer, 186 Misc. 2d 126, 715 N.Y.S.2d 575, 593 (N.Y.Sup.Ct.1999) (emphasis supplied) (citations omitted). See also Summers v. Cherokee Children & Family Services, Inc., 112 S.W.3d 486 (Tenn.Ct.App.2002) (duty of loyalty requires that a director of a nonprofit faithfully pursue the interest of the organization, and its nonprofit purpose, rather than his or her own financial or other interests, or those of another person or organization); Nina J. Crimm, A Case Study of a Private Foundation's Governance and Self-Interested Fiduciaries Calls for Further Regulation, 50 EMORY L.J. 1093, 1140 (2001) ("fiduciary responsibilities require of each director [of a nonprofit] a duty of obedience to fulfill the particular charitable purposes of the corporation..."); Harvey J. Goldschmid, The Fiduciary Duties of Nonprofit Directors and Officers: Paradoxes, Problems, and Proposed Reforms, 23 IOWA J. CORP. L. 631, 641 (1998) (nonprofit directors "are principally concerned with the effective performance of the nonprofit's mission").	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1353258/	614 S.E.2d 47 (2005) 279 Ga. 476 LOVE et al. v. MONEY TREE, INC. No. S04G1474. Supreme Court of Georgia. June 6, 2005. Reconsideration Denied June 30, 2005. Ralph F. Simpson, Tifton, for Appellants. George C. Floyd, Lambert, Floyd & Conger, Bainbridge, David G. Crockett, P.C., Atlanta, for Appellee. Ben Kirbo, Kirbo, Kendrick & Bell, LLC, Bainbridge, Amicus curiae. SEARS, Presiding Justice. We granted certiorari in this case to consider whether the sale of memberships in automobile clubs constitutes the sale of insurance. The Court of Appeals held that it did 48 not,[1] but, for the reasons that follow, we conclude that it does. This conclusion means that we must also address whether the McCarran-Ferguson Act[2] (the "MFA") preempts the Federal Arbitration Act[3] ("FAA") and prohibits the enforcement of a clause in the parties' loan agreement that requires any disputes to be resolved by arbitration. Because the application of the FAA would impair a statute of this State regulating the business of insurance, we conclude that the MFA preempts the FAA and prohibits the enforcement of the parties' arbitration agreement. Accordingly, we reverse the judgment of the Court of Appeals. 1. The appellee, The Money Tree, Inc., is licensed to make consumer loans under the Georgia Industrial Loan Act,[4] and the appellants, Betty Love and Sabrina Hawkins-Bailey, are both customers of The Money Tree. A branch manager of one of The Money Tree stores who closed transactions with both of the appellants submitted an affidavit describing the transactions. He stated that, in addition to loan documents, which contained a provision providing arbitration in the event of a dispute between the parties, both appellants signed a document entitled "Voluntary Insurance Election Form." The branch manager described this form as "our" form, thus indicating that the form was prepared by The Money Tree and not by an insurance company. The form provided an opportunity for the appellants to buy accidental death and dismemberment insurance and/or automobile club membership. Both appellants elected the automobile club membership with the Interstate Motor Club. The membership cost was financed by The Money Tree, and included in the loan documents signed by the appellants. The manager also stated that, at the time of the loan, he had the appellants sign membership agreements with the Interstate Motor Club. Love and Hawkins-Bailey defaulted on their loans, and both were sued by The Money Tree in the Magistrate Court of Decatur County. The magistrate court entered a judgment against Hawkins-Bailey, and she appealed to the Superior Court of Decatur County. Love had her case transferred to superior court before a judgment was entered in magistrate court. In superior court, the appellants contended that Vance Martin is the president and sole owner of The Money Tree, Inc.; that William Martin is the vice-president; that Vance Martin owns 40% of the Interstate Motor Club, William Martin owns 20%, and two children of Vance Martin own 40%; that Vance Martin directs and controls the policies of both companies; that The Money Tree and the Interstate Motor Club share the same office; that the Interstate Motor Club is in the business of selling insurance, but that it does not have an insurance certificate; that in most, if not all, of The Money Tree's loan transactions, it finances a charge for the Interstate Motor Club; that The Money Tree receives 60% of all auto club memberships and the Interstate Motor Club receives 40%; that in the fiscal year 1998, The Money Tree received $701,428 on the sale of auto club memberships; and that The Money Tree, the Interstate Motor Club, and the Martins are engaged in a fraudulent scheme to force borrowers to purchase an auto club membership in order to receive a loan. The Money Tree filed a motion to compel arbitration, arguing that the dispute was governed by the FAA. The trial court granted that motion, and the Court of Appeals affirmed, ruling that the automobile club memberships were not insurance and that the MFA did not preclude the FAA from applying in this case.[5] 2. The appellants contend that the Court of Appeals erred by concluding that the automobile club memberships did not constitute insurance. We agree. The auto memberships provide that, in exchange for a monthly fee, the club will, among other things, pay 50% of moving traffic violations up to $200.00; $50 for emergency 49 road service; $75 for an emergency ambulance service; $200 for an emergency travel service if a member's car became disabled more than 100 miles from her home; up to $100 in attorney fees to collect damages for personal injuries sustained in an auto accident or to defend a member in traffic court; and up to $750 in attorney fees if prosecuted for criminal manslaughter. In Georgia, insurance is defined as "a contract which is an integral part of a plan for distributing individual losses whereby one undertakes to indemnify another or to pay a specified amount or benefits upon determinable contingencies."[6] Here, the auto club undertakes to pay a specified amount of money to its members upon the occurrence of determinable contingencies. Moreover, by enlisting numerous members, the club distributes individual losses among a large group of purchasers. Several courts have considered similar plans to be insurance under definitions similar to the one set forth in OCGA § 33-1-2(2).[7] Moreover, a leading treatise on insurance takes the position that auto club memberships should be considered insurance.[8] In addition, the United States Supreme Court has held that a statute that "explicitly grants national banks permission to `act as the agent for any fire, life, or other insurance company,' to `solici(t) and sel(l) insurance,' to `collec(t) premiums,' and to `receive for services so rendered ... fees or commissions,'" concerns the business of insurance.[9] In the present case, The Money Tree's branch manager stated in his affidavit that it was The Money Tree's practice to sell the memberships at the time of the loan closing, and The Money Tree receives commissions on the memberships so sold.[10] Thus, under the rationale of Barnett Bank, The Money Tree was engaged in the business of insurance by selling memberships to the appellants. For the foregoing reasons, we conclude that the trial court and the Court of Appeals erred by ruling that sale of the auto club memberships did not constitute the sale of insurance. 3. We turn now to the question whether the FAA requires the parties to submit their dispute to arbitration even though OCGA § 9-9-2(c)(3) provides that agreements to arbitrate disputes regarding "contracts of insurance" are invalid in Georgia. For the reasons that follow, we conclude that the MFA prohibits the FAA from preempting OCGA § 9-9-2(c)(3). The FAA provides that agreements to arbitrate in contracts involving commerce are "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."[11] Moreover, this rule requiring the enforcement of arbitration provisions generally preempts state law to the contrary.[12] The MFA, however, prohibits the application of any federal statute when it would "invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance."[13] *50 Accordingly, we must determine whether OCGA § 9-9-2(c)(3) is a State law "enacted for the purpose of regulating the business of insurance" and, if so, whether the application of the FAA would impair OCGA § 9-9-2(c)(3). Numerous courts, including our Court of Appeals, have considered whether a State law that prohibits the arbitration of disputes involving insurance is a State law "enacted for the purpose of regulating the business of insurance." These courts have consistently held such State laws have been enacted for the purpose of regulating insurance; that application of the FAA would impair those laws; and that the MFA thus precludes the FAA from preempting those State laws.[14] We find the reasoning of these cases persuasive. Moreover, as the holdings in the foregoing cases make clear, the issue whether Georgia law forbids the arbitration of an insurance dispute is not an issue that goes to the merits of the parties' underlying dispute, but instead is an issue of arbitrability that may be decided by a court.[15] For the foregoing reasons, we conclude that the MFA precludes the FAA from requiring the arbitration of disputes involving insurance. Judgment reversed. All the Justices concur. NOTES [1] Love v. Money Tree, 267 Ga.App. 96, 598 S.E.2d 846 (2004). [2] See 15 USC §§ 1011-1015. [3] 9 USC §§ 1-16. [4] OCGA §§ 7-3-1 to 7-3-29. [5] Love, 267 Ga.App. at 98-99(2), 598 S.E.2d at 848-849(2). [6] OCGA § 33-1-2(2). [7] Arkansas Motor Club v. Arkansas Employment Sec. Div., 237 Ark. 419, 373 S.W.2d 404, 408-409 (1963); Texas Assn. of Qualified Drivers, v. State, 361 S.W.2d 580, 581-582 (Tex.Civ.App.1962); Continental Auto Club v. Navarre, 337 Mich. 434, 60 N.W.2d 180, 181-182 (1953); People by Abrams v. American Motor Club 133 A.D.2d 593, 520 N.Y.S.2d 383, 385 (N.Y.App.Div.1987). [8] See 1-1 Appleman on Insurance 2d § 1.4; 12-256 Appleman on Insurance § 7003; 19-354A Appleman on Insurance § 10336. [9] Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25, 39, 116 S. Ct. 1103, 134 L. Ed. 2d 237 (1996). [10] A case on which The Money Tree relies, Cody v. Community Loan Corp. of Richmond Co., 606 F.2d 499 (5th Cir.1979), is distinguishable from the present case. In Cody, the plaintiffs did not contend that the finance company did not have the authority to sell the insurance or to include a finance charge for it. Instead, they contended that financial disclosures regarding the insurance were insufficient. Here, on the other hand, the appellants are contending, among other things, that the auto memberships (the insurance) were sold without the authority to do so. [11] 9 USC § 2. [12] McKnight v. Chicago Title Ins. Co., 358 F.3d 854, 857 (11th Cir.2004). [13] 15 USC § 1012(b). See McKnight, 358 F.3d at 857-59; United States Dept. of Treasury v. Fabe, 508 U.S. 491, 113 S. Ct. 2202, 124 L. Ed. 2d 449 (1993). The MFA will not preclude the application of a federal law to a state law enacted for the purpose of regulating the business of insurance if the federal law also relates to that business. 15 USC § 1012(b). The FAA, of course, does not relate to the business of insurance. [14] Continental Ins. Co. v. Equity etc., Trust, 255 Ga.App. 445, 447-448, 565 S.E.2d 603 (2002); McKnight, 358 F.3d at 857-859; Mutual Reinsurance Bureau v. Great Plains Mut. Ins. Co., 969 F.2d 931, 934-35 (10th Cir.1992); Standard Sec. Life Ins. Co. of New York v. West, 267 F.3d 821, 823 (8th Cir.2001); Am. Health & Life Ins. Co. v. Heyward, 272 F. Supp. 2d 578, 581-582 (D.S.C. 2003); Nat'l Home Ins. Co. v. King, 291 F. Supp. 2d 518, 529-530 (E.D.Ky.2003). [15] See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967) (When parties have entered an arbitration agreement, issues that go to the merits of a dispute are for an arbitrator and issues that are a defense to arbitrability may be resolved by a court).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/748243/	129 F.3d 609 Seaberryv.Richeson Mgmt. NO. 95-10387 United States Court of Appeals,Fifth Circuit. Oct 09, 1997 Appeal From: N.D.Tex. ,No.793CV076X 1 Affirmed in part.	01-03-2023	04-17-2012
https://www.courtlistener.com/api/rest/v3/opinions/2204174/	888 N.E.2d 1188 (2008) 227 Ill.2d 594 PEOPLE v. SEVENTEEN THOUSAND THREE HUNDRED FIFTY-ONE DOLLARS ($17,351.00) U.S. CURRENCY. No. 105841. Supreme Court of Illinois. March Term, 2008. Disposition of petition for leave to appeal[]. Denied. NOTES [] For Cumulative Leave to Appeal Tables see preliminary pages of advance sheets and Annual Illinois Cumulative Leave to Appeal Table.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264753/	744 A.2d 691 (2000) 328 N.J. Super. 64 FIRST INDEMNITY OF AMERICA INSURANCE COMPANY, Plaintiff/Respondent, v. David KEMENASH, Defendant/Third-Party Plaintiff/Appellant. Kathleen Kemenash, Nicole Kemenash, Davina Kemenash, and NDK General Contractors, Inc., Defendants/Third-Party Plaintiffs, v. Patrick Lynch, Third-Party Defendant. Superior Court of New Jersey, Appellate Division. Argued November 29, 1999. Decided February 10, 2000. 692 Todd W. Heck, Vineland, for defendant/third-party plaintiff/appellant (Basile & Testa, attorneys; Mr. Heck, on the brief). Robert E. Nies, Roseland, for plaintiff/respondent (Wolff & Samson, attorneys; Mr. Nies, of counsel; Robert L. Tchack, on the brief). Before Judges KEEFE, A.A. RODRIGUEZ and LINTNER. The opinion of the court was delivered by KEEFE, J.A.D. Defendant David Kemenash appeals from an order granting partial summary judgment to plaintiff First Indemnity of America Insurance Company (FIA) in the amount of $3,248,171.17, plus prejudgment interest. The judgment was on "fewer than all the claims as to all parties," but was certified as final. R. 4:42-2. Although defendant did not move for leave to appeal as required by the Court Rules, we now grant leave to appeal on our own motion. See Pressler, Current N.J. Court Rules, comment on R. 2:5-6 and R. 4:42-2(19). We affirm. Defendant owned a corporation, D. Kemenash & Associates, Inc. (DKA), a general contractor. DKA defaulted on two municipal construction projects for which plaintiff had acted as surety. Plaintiff completed the projects under separate takeover contracts with the municipality. Then, relying on an indemnity agreement signed by defendant and his wife, plaintiff alleged it was entitled to reimbursement from defendant and his wife personally. Defendant, however, asserted that he had never provided plaintiff with an indemnity agreement for his construction business, and that the agreement on which plaintiff relied was signed in favor of another surety and placed in the possession of his insurance broker. On appeal, defendant argues that the trial judge erred in denying his summary judgment motion premised on the six year 693 statute of limitations, and erred in granting plaintiff summary judgment because he improperly applied the summary judgment standard, by failing to grant defendant all favorable inferences and ignoring numerous areas of factual dispute. Finally, defendant challenges the judge's award to plaintiff of over $650,000 in prejudgment interest. DKA was a commercial construction company that did a considerable portion of its work on large federal government and public works projects. It was in business from May 31, 1978, until mid-1991 when the company ceased work, having filed for bankruptcy. As a standard requirement for each public works project on which DKA submitted a successful bid, DKA was required to obtain a performance bond. Although the precise date is unclear from the record, from at least the spring of 1984 until the spring of 1989, DKA obtained its bonds exclusively through a bonding agency, Comsur, Inc. ("Comsur"). Also during the same period, Travelers Insurance Company of Hartford ("Travelers") acted as the exclusive bonding company for DKA. As a guarantee for the bonds issued by Travelers, defendant and his wife signed indemnity agreements. Sometime in the spring of 1989, Travelers informed defendant that it no longer would be able to act as commercial surety for DKA because it had sold its surety bonding division. On May 4, 1990, plaintiff executed performance and payment bond # 026696 for DKA in the amount of $5,289,000 on behalf of the Cape May County Municipal Utilities Authority ("MUA"). The space designated for the description of the bonded project is blank, but the parties agree that this project involved construction of a sanitary landfill ("the landfill project"). On May 9, 1990, plaintiff executed performance and payment bond # 026689 for DKA in the amount of $1,848,000 on behalf of the MUA with respect to DKA's construction of a bulky waste sorting/recycling facility and transfer station ("the bulky waste project"). These were the only two performance bonds plaintiff issued on DKA's behalf. On April 2, 1991, defendant and his wife filed a voluntary petition for bankruptcy, and DKA also filed for bankruptcy. At or about the same time, DKA ceased work and abandoned the two MUA projects. Thereupon the MUA declared DKA to be in default, terminated its right to proceed under the contract and demanded that plaintiff, as surety, complete DKA's work on both projects. On June 6, 1991, plaintiff and the MUA entered into takeover contracts whereby plaintiff became the "replacement contractor" and agreed to assume responsibility to complete both projects to the extent of the penal sums of each related bond. The contracts required the MUA to dedicate the remaining construction funds to completion of the projects, specifically the sum of $1,974,004.48 on the landfill contract and $575,849.26 on the bulky waste project, subject to reductions for expenses incurred as a result of DKA's default and the ensuing delay. Plaintiff agreed to discharge any mechanics liens against the project. Plaintiff certified to the trial court in this action that, as to plaintiff's costs on the landfill project, it paid a total of $3,684,233.56 to claimants and received proceeds from the MUA of $1,716,459.51. As to the bulky waste project, it paid $973,444.25 and received $438,734.66 from the MUA. Thus, plaintiff's loss for the two projects totaled $2,502,483.64.[1] 694 In January 1992, defendant was convicted in federal court of submitting fraudulent bank statements and served thirty-nine months in prison. On July 19, 1993, an order was entered denying discharge in the bankruptcy cases. The order was based on the terms of a settlement between defendant and the bankruptcy trustee wherein defendant agreed to consent to the denial of his discharge if he were unsuccessful in appealing his criminal conviction, which he was. On December 30, 1997, plaintiff filed its complaint in this matter asserting that defendant and his wife owed plaintiff over $3,000,000. The basis for its allegations was an indemnity agreement defendant and his wife signed on June 11, 1984. The complaint alleged in paragraph 6 that on "June 11, 1984, in consideration for, and as a precondition of FIA's executing surety bonds on behalf of DKA, Kemenash, his wife and DKA executed an Agreement of Indemnity (the "Indemnity Agreement") in favor of FIA ..." A copy of that agreement was attached to the complaint. It provides: WHEREAS D. KEMENASH & ASSOCIATES, INC. requires or may hereafter require suretyship upon certain bonds or obligations or suretyship and has applied or may hereafter apply to ______(hereafter called the Company) to execute such instruments as surety. NOW THEREFORE, should the company execute or procure the execution of the suretyship for which application is now pending, or which may be hereafter applied for, or other suretyship in lieu thereof, or in lieu of suretyship now outstanding, or in connection therewith, the undersigned, hereinafter called the Indemnitor does ... agree ... Paragraph two of the document reads: [T]he indemnitor will perform all the conditions of each said bond or obligation, and any and all alterations, modifications, renewals, continuations, and extensions, thereof, and will at all times indemnify and save the Company harmless from and against every claim, demand, liability, loss, cost, charge, counsel fee, payable on demand of Surety, whether actually incurred or not, (including fees of special counsel whenever by the Company deemed necessary) expense, suit, order judgment [sic] and adjudication whatsoever, and any and all liability therefor, sustained or incurred by the Company by reason of having executed or procured the execution of said bonds or obligations, and will place the Company in funds to meet same before it shall be required to make payment, and in case the Indemnitor requests the Company join in the prosecution or defense of any legal proceeding, the Indemnitor will, on demand of the Company, place it in funds sufficient to defray all expenses and all judgments that may be rendered therein. It is undisputed that in the copy submitted to the court with plaintiff's complaint, the spaces designated in the document for the name of the surety company and the address to which notification of termination was to be sent both remained blank. On May 15, 1998, plaintiff filed its partial summary judgment motion. Plaintiff specifically relied on an admission defendant made in a deposition in the bankruptcy proceeding in which defendant is the sole named debtor. During this deposition, defendant stated that plaintiff issued the bonds for DKA. When questioned whether he and his wife personally guaranteed the bonds, defendant replied, "I don't believe so, but it could be that we both do guarantee it, but I'm not sure." He was then asked, "Do you guarantee them?" and he replied, "Yes." Plaintiff also included a scheduled list of unsecured creditors dated April 16, 1991, and filed in the bankruptcy proceeding for defendant and his wife. The petition listed both plaintiff and Travelers, each for an "Unknown" amount. In a scheduled list of creditors for DKA, dated May 15, 1991, plaintiff and Travelers were also listed as 695 "contingent" debts for "Unknown" amounts. On June 12, 1998, Carlos Andujar, an attorney for defendants, traveled to plaintiff's offices to inspect a document purported to be the original agreement. The pages of the document were bound along the left-hand margin "in a natural form," unseparated. That document contained plaintiff's name in the designated space, in a typeface different from that used to type "D. Kemenash & Associates, Inc." on the previous line. The document contained the original signatures of defendant and his wife on page three, along with the corporate seal of DKA, dated 1978. Also on page three, "bleeding" through from page four, were notary seals. LeFevre, who in 1984 was employed as a notary public by Comsur, certified that he had notarized the signatures on the June 11, 1984, document. He stated: Although FIA's name had not yet been typed into the first paragraph of the Agreement of Indemnity at the time Kemenash and his wife executed the document, I am certain that this was FIA's standard form of indemnity agreement. As I had notarized numerous other agreements, I know that no other surety company with which Comsur dealt, including the Travelers Indemnity Company, used that form of agreement at that time. On June 16, 1998, defendants submitted papers responding to plaintiff's partial summary judgment motion and papers supporting their cross-motion. In their response to plaintiff's statement of material facts, defendants stated that the "referenced Agreement [of June 11, 1984] was executed in favor of another surety company, not FIA." In his accompanying affidavit, defendant asserted: 7. In 1984, DKA executed a preliminary Indemnity Agreement in connection with its recently-formed business relationship with Travelers. My wife and I joined in the Indemnity Agreement at the request of Comsur Inc., who took possession of the document. 8. This Indemnity Agreement was not executed in favor of the Plaintiff First Indemnity of American Insurance Company ("FIA"). DKA had no business dealings with FIA until the Spring of 1989, after Travelers announced to DKA that it was no longer able to act as commercial surety for DKA.... 15. FIA never obtained an Indemnity Agreement for bonds it issued in favor of DKA from DKA, myself, and/or my wife. This is because when in 1989 DKA first commenced business with FIA, Travelers already had substantial, written indemnity rights against DKA, myself, and my wife (known to both FIA and Comsur at the time) upon numerous then-incomplete construction projects. FIA made a conscious decision at the time to only pursue indemnity agreements from me in connection with the separate DKR [D. Kemenash Equipment Sales & Rentals, Inc.] activities. He also asserted that the version of the indemnity agreement produced during an FIA representative's deposition was "phony" and "nothing less than a fraud." Plaintiff explicitly "[d]isputed that Travelers was the only surety company with whom DKA dealt between the Spring of 1984 and mid-1989." It asserted: In the Spring of 1984, Kemenash and his broker met with FIA's then-lead underwriter to ask FIA to execute a bid bond for an out-of-state project that Travelers would or could not bond. FIA agreed to execute the bond, provided that DKA, Kemenash and his wife execute FIA's standard Agreement of Indemnity. Kemenash agreed, and DKA, Kemenash and Kemenash's wife thereafter executed that Agreement of Indemnity, dated June 11, 1984 (the "Indemnity Agreement"). DKA did not ultimately bid for the out-of-state project, however, and FIA accordingly did not execute a bid bond for that project. 696 Defendant denies that such a meeting ever took place. He admits, however, that he executed an indemnity agreement exactly like the one upon which plaintiff relies in connection with a surety bond issued by plaintiff in 1989 for a different company owned by defendant, D. Kemenash Equipment Sales and Rentals, Inc. I. Defendant argues that the trial judge erred in failing to dismiss the complaint on the ground that it was barred by the six-year statute of limitations. N.J.S.A. 2A:14-1. The trial judge held that plaintiff's action was not barred. He said: "It is clear from a review of all the cases that the plaintiff's cause of action accrued in this matter when the payments were made." The judge observed that plaintiff made its last payment on the bulky waste project on March 14, 1994, and its last payment on the landfill project on February 4, 1994. He thus found that "the amount of the plaintiff's loss was not fixed until after March of 1994." In his primary argument on this issue, defendant asserts that plaintiff's cause of action first accrued on June 6, 1991, when it entered into the takeover contracts with the MUA. Thus, according to defendant, plaintiff's December 30, 1997, complaint was filed almost seven months beyond the expiration of the six-year limitations period. Defendant reasons that, because the terms of the indemnity agreement provided for contractual indemnification "against mere claims, demands, and any liability, and not just loss or damage," plaintiff's cause of action accrued the moment liability was imposed upon it. He contends that at that point, on June 6, 1991, when plaintiff signed the takeover contracts, plaintiff was entitled to maintain an action to recover for breach of the indemnity contract. Plaintiff, on the other hand, contends that the indemnity agreement contained a "bundle of rights," including the "mutually independent" rights to seek "exoneration" from the indemnitor in the form of posted collateral sufficient to cover liability and to "compel indemnifications for any losses actually sustained" by it. It asserts that "the statute of limitations on a claim for indemnification for loss begins to run only upon the occurrence of the loss, which occurs upon settlement of the case, final judgment against the indemnitee, or payment by the indemnitee." Plaintiff argues that, as a practical matter, its cause of action could not accrue until it made payments in excess of the money owed by the MUA on the underlying contract because "if the contract balances [paid by the MUA to plaintiff] had exceeded FIA's payments, FIA would have suffered no loss." It argues that no authority "bars an action for contractual indemnification against losses on statute of limitations grounds because the indemnitee chose not to pursue, or the statutes of limitations already expired on, its right to seek exoneration or indemnification for asserted liability." Recovery on express or implied contractual claims or liability not under seal is governed by N.J.S.A. 2A:14-1, which provides that such action must be commenced within six years "after the cause of any such action shall have accrued." Where the agreement indemnifies for loss, the cause of action accrues at the point that the liability is discharged by payment and the indemnitee suffers an actual loss. Bernstein v. Palmer Chev. & Olds., Inc., 86 N.J.Super. 117, 122, 206 A.2d 176 (App.Div.1965). Where the agreement provides indemnification for liability, the cause of action arises with the liability and the plaintiff is entitled to recover the amount necessary to enable it to discharge the liability itself. North v. North & Son, Inc., 93 N.J.L. 438, 442, 108 A. 244 (E. & A.1919). In this case the agreement included language regarding both loss and liability, stating that plaintiff would be indemnified for "every claim, demand, liability, loss, cost, charge, counsel fee, payable on demand of Surety, whether actually incurred or not...." No New 697 Jersey case has considered the question of whether a party indemnified as to liability and loss in the same agreement may elect to proceed on either basis, with the concomitant different dates for the accrual of the action. We assume for the purpose of this opinion, as defendant has asserted, that FIA's "liability" on the bond was fixed on June 6, 1991, when FIA executed project "takeover agreements" with the MUA for the two public construction contracts. Defendant's assertion that FIA could have instituted action against the indemnitors on that day is correct, but begs the question before us. Undoubtedly, FIA could have instituted suit on June 6, 1991, had it chosen to do so. The question, however, is whether FIA had the choice to sue either on the accrual of its cause of action based upon "liability" or elect to sue on the indemnity agreement when its cause of action for "loss" accrued. Although in some cases the accrual dates may actually be the same, see Winne v. Morrissey, 14 N.J. Misc. 771, 773, 187 A. 36 (Sup.1936), in this case, that is clearly not so. Here, FIA did not sustain a loss under its bond until such time as it paid out more money to subcontractors than it was owed by the MUA. According to the record before us, at the time the takeover agreements were signed, MUA owed $2,055,194.27 on both projects, after withholding $394,384.47 for delay expenses. FIA did not pay more than it was owed on both projects until December 30, 1991, when it made a payment of $353,626.16 to Cacon, Inc., a subcontractor of DKA, with respect to the landfill project. Thus, if FIA had the choice under the indemnity agreement to sue on its right to be indemnified against loss rather than liability, its complaint was timely. Authority on the issue is sparse. In Balboa Ins. Co. v. Zaleski, 12 Conn.App. 529, 532 A.2d 973, 977 (Ct.), certif. denied, 206 Conn. 802, 535 A.2d 1315 (1987), the defendant was a contractor who had individually executed a general indemnity agreement in favor of the plaintiff. Id. at 974. The plaintiff, as surety, had issued a performance bond and a labor and material bond to the town of Chester with respect to the defendant's construction of a school roof. Ibid. On September 21, 1979, in a letter to the defendant and the surety, the town alleged that the defendant had abandoned the project and declared that it was terminating the contract. Ibid. One of the defendant's suppliers thereafter brought suit against the surety for payment under the bond and was awarded judgment on October 27, 1981. Ibid. The surety then commenced suit against the defendant on the indemnity agreement, serving the complaint on October 2, 1985. Id. at 974-75. The defendant argued that the limitations period had begun to run on September 21, 1979, when the plaintiff received notice of the defendant's default. Id. at 975. The plaintiff asserted that it had begun on October 27, 1981, when it incurred its first loss. As in this case, a six-year limitations period applied to the action. Id. at 974. The terms of the parties' agreement indemnified the plaintiff against liability as well as loss. Id. at 977. The court found that the plaintiff's cause of action "arose at once upon its becoming liable on the contractor's bond." Ibid. (quoting Dickson v. United States Fidelity & Guar. Co., 150 Miss. 864, 117 So. 245, 247-48 (1928)). The court held: The immediate right to bring suit against the defendant accrued to the plaintiff upon the defendant's default of its roof replacement contract with the town of Chester. Under the provisions of [the] general indemnity agreement, and under the rule of law concerning a contract which indemnifies against liability as well as loss, the plaintiff's cause of action accrued upon the defendant's default in the underlying performance and labor and material payment bonds. This is so notwithstanding the fact that the plaintiff had not yet suffered a determined or fixed loss. [Ibid.] 698 Thus, the plaintiff's cause of action was barred by the six-year statute of limitations. Ibid. We decline to follow the Balboa court's holding for several reasons. First, the reasoning is flawed. The Mississippi case relied upon was not a statute of limitations case. Rather, it was a case in which the question presented was whether the indemnitee's suit against the indemnitor was premature where the indemnification agreement permitted a suit based upon both liability and loss. The Mississippi court held that the contract between the parties permitted the indemnitee to bring suit when liability occurred irrespective of loss. Dickson, supra. Simply stated, the surety was entitled to the benefit of its bargain. Secondly, and perhaps more significantly, the Connecticut Legislature overruled Balboa by statute. Republic Ins. Co. v. DiNardo Auto Sales, 44 Conn. Supp. 207, 678 A.2d 516, 519 (Ct.1995), aff'd, 41 Conn.App. 686, 677 A.2d 21 (Ct.), certif. denied, 239 Conn. 906, 682 A.2d 1005 (Ct.1996). As the latter case noted, Balboa did not reflect "settled" law in the state at the time it was decided. Id. at 521. The more reasoned approach in our view is expressed by the holding in United States Credit Bureau, Inc. v. Claus, 79 Cal.App.2d 85, 179 P.2d 36, 37 (1947). There, the California appellate court found two separate "covenants" based on language in an indemnity agreement that provided the surety with "the right of immediate action ... for any `loss or liability when ... paid, adjusted, incurred or assumed... whether the same shall have been actually paid or not.'" Ibid. It held that those covenants may be treated as separate agreements. Ibid. The plaintiff thus was permitted to maintain an action for recovery of actual loss even though the time had expired for an action to recover on the covenant to indemnify for liability. Id. at 37-38. In Oaks v. Scheifferly, 74 Cal. 478, 16 P. 252 (1887) and in Globe v. Larkin, 62 Cal.App.2d 891, 145 P.2d 633 (1944), the only other instances in which California courts were presented with the issue at bar, the covenants were held to be distinct from each other. The California courts' repeated affirmation of this principle indicates it is well settled there. The California approach resolves the statute of limitations issue based on sound, fair principles of law. Most importantly, it fulfills the expectations of the parties under the clear terms of their agreement and affords the surety the benefit of its bargain. Defendant admits that the indemnity agreement in question provided FIA protection against both liability and loss. Therefore, defendant cannot claim that he was surprised by FIA's desire to pursue a claim for actual losses sustained by assuming DKA's obligation to the MUA. Quite simply, unlike a suit for indemnification against liability, "[t]his action is for the recovery of actual damages, and could not be maintained if nothing had been paid." Oaks, supra, at 253 (emphasis added). Indeed, a suit against an indemnitor after an indemnitee experiences actual loss is arguably fairer to the indemnitor because the computation of damages in such cases is more precise. On the other hand, when suit is brought by the indemnitee simply because liability has been established the damage claim against the indemnitor may be far less precise because the obligation of the indemnitee to the indemnitor's principal may not yet be fixed. See e.g., Johnson v. Johnson, 92 N.J.Super. 457, 462, 224 A.2d 23 (App.Div.1966); Standard Surety & Casualty Co. of New York v. Caravel Industries Corp., 128 N.J.Eq. 104, 106-07, 15 A.2d 258 (Ch.1940); North v. North & Son, supra, 93 N.J.L. at 442-43, 108 A. 244. The contractual right to proceed against the indemnitor upon liability being established is for the benefit of the surety. A surety negotiates for that right in recognition of the uncertainty as to whether the contractor and/or indemnitor will have sufficient funds "at some distant day" when the surety's loss has been fixed to 699 satisfy the obligation to the surety. Standard Surety & Casualty, supra, 128 N.J. Eq. at 108, 15 A.2d 258. Thus, the right of the surety to proceed when liability is fixed is usually linked with the obligation of the indemnitor to deposit collateral sufficient to satisfy all expenses, judgments, and losses that the surety may incur in the future as a result of its undertaking under the bond. Ibid. This concept is sometimes referred to as the surety's right of exoneration. Stulz-Sickles Co. v. Fredburn Const. Corporation, 114 N.J.Eq. 475, 477, 169 A. 27 (Ch.1933). Therefore, the surety generally is not interested in obtaining a judgment against the indemnitor for a sum certain when it institutes suit upon incurring a liability. Rather, its interest is to secure the benefit of the indemnitor's promise to post collateral sufficient to cover the surety's anticipated future losses. There may be times, however, where it may be impractical for the surety to institute suit in reliance on the indemnification against liability. In cases where as here the indemnitors file for bankruptcy protection, the surety's right of exoneration may not be a realistic benefit because the indemnitors' bankruptcy could place the collateral beyond the surety's reach. It would be unfair to the surety in such circumstances to have the statute of limitations begin to run at that time because the sole aim of the indemnity agreement and the expectations of the parties is to make the surety whole on its bond undertaking. (At the request of the Court, Parts II, III and IV of this opinion have been excluded from publication.) NOTES [1] ($973,444.25 (claims-bulky waste) minus $438,734.66 (proceeds-bulky waste)) plus ($3,684,233.56 (claims-landfill) minus $1,716,459.51 (proceeds-landfill)). In plaintiff's statement of material facts, it alleged that the total losses, aside from prejudgment interest, amount to $2,589,167.01 (Ja60). In its calculation of interest, it noted that only $1,638,026.57 and $430,484.23 were applied to the "principal" and the remaining sums were applied against "interest which had accrued as of the date the recovery was received."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2264711/	14 Cal.App.4th 1533 (1993) 18 Cal. Rptr.2d 420 CATHAY BANK, Plaintiff and Respondent, v. TOM Y. LEE, Defendant and Appellant. Docket Nos. G011829, G012168. Court of Appeals of California, Fourth District, Division Three. April 15, 1993. 1534 COUNSEL Barton, Klugman & Oetting, Dale A. Hudson and John S. Chang for Defendant and Appellant. 1535 Frandzel & Share, Thomas M. Robins III and Peter Csato for Plaintiff and Respondent. OPINION SILLS, P.J. I. This is a loan guaranty case. Appellant Tom Y. Lee guaranteed a $5.2 million loan from Cathay Bank to a hotel firm of which he was the corporate secretary and a director. The loan was secured by a Quality Inn in Buena Park. The hotel firm defaulted, and the bank foreclosed in a private sale. There was a deficiency between the amount realized at the sale and the amount owing on the loan, and the bank obtained a summary judgment for the difference against Lee, who appeals.[1] The dispositive issue before us is whether Lee explicitly waived what might be called the "Gradsky defense" to the deficiency action against him. (1) The Gradsky defense is based on Union Bank v. Gradsky (1968) 265 Cal. App.2d 40 [71 Cal. Rptr. 64], which held that a lender is estopped to recover a deficiency judgment against a guarantor when it elects a particular remedy (nonjudicial foreclosure) which cuts off the guarantor's subrogation rights against the debtor. Thus, even though California's antideficiency statute (Code Civ. Proc., § 580d) does not protect guarantors directly,[2] as a practical matter the "Gradsky defense" precludes deficiency judgments against them unless the lender elects the relatively cumbersome remedy of judicial foreclosure.[3] (2a) If there is any language in the continuing guaranty signed by Lee which expressly waived the Gradsky defense, it is in paragraphs 4 and 5 of 1536 that document. Stripped to its readable essentials, the relevant language in paragraph 4 is: "Guarantor authorizes bank at its sole discretion ... to: ... (h) exercise any right or remedy it may have with respect to the Credit or any collateral securing the Credit ... including... exercise of power of sale ... and Guarantor shall be liable to Bank for any deficiency resulting from the exercise by it of any such remedy, even though any rights which Guarantor may have against others might be ... destroyed."[4] The core sentence from paragraph 5 reads: "Guarantor waives any defense arising by reason of any disability or other defense of Debtor, its successor or endorser or co-maker or other guarantor or by reason of the cessation from any cause whatsoever of the liability of Debtor or endorser or co-maker, or other guarantor."[5] 1537 Our task is to determine whether either of these provisions constitutes an "express" or "explicit" waiver of Lee's estoppel defense based upon the bank's decision to pursue nonjudicial, rather than judicial, foreclosure. (See Union Bank v. Gradsky, supra, 265 Cal. App.2d at p. 48.) This is not an easy question. II. The case law contemplating the explicitness of language which arguably waives the Gradsky defense is rather thin. While a number of cases have dealt in passing with waiver language,[6] our research has uncovered only three cases which have actually held whether particular language was sufficiently explicit. Gradsky is the first of these three cases. There, the court held these words did not constitute an explicit waiver: "I waive... any right to require the holder of this within instrument to proceed against the maker or against any other person or to apply any security it may hold or to pursue any other remedy." (265 Cal. App.2d at pp. 41-42.) The court's explanation was based on two ideas: (1) any waiver must "specifically waive the guarantor's defense based upon an election of remedies which destroys both the guarantor's subrogation rights and his right to proceed against the principal obligor for reimbursement," and (2) the court would "not strain" to imply a waiver where none was "explicit." (265 Cal. App.2d at p. 48.) 1538 Next, in Mariners Sav. & Loan Assn. v. Neil, supra, 22 Cal. App.3d 232, the court held that language which both stated (1) the guarantors waived "any defense based on Section[] 580..." and (2) further waived "any right to require Association to (a) proceed against Borrowers; (b) proceed against or exhaust any security held from Borrowers; or (c) pursue any other remedy in Association's power whatsoever," was explicit. Unfortunately, that was all the court said. (See 22 Cal. App.3d at p. 236.) Finally, in Indusco Management Corp. v. Robertson (1974) 40 Cal. App.3d 456 [114 Cal. Rptr. 47], the guarantor waived "all suretyship defenses and defenses in the nature thereof." (See 40 Cal. App.3d at p. 459.) The court determined that this language could not "fairly be construed to be a specific waiver of the guarantor's defense." (See 40 Cal. App.3d at p. 462.) Alas, again it did not elaborate. The most the court did was to footnote its conclusion with a quotation from a treatise[7] which stated the necessity for a "creditor's standard form waiver [to] contain a specific waiver based on the creditor's creation of a [Code of Civil Procedure section] 580d deficiency bar in favor of the debtor." (See 40 Cal. App.3d at p. 462, fn. 4.) We can only glean a little from an analysis of the actual language at issue in Gradsky, Mariners, and Indusco. The language in Gradsky failed to specifically mention any rights under section 580d; the language in Mariners did.[8] The language in Gradsky failed to specifically inform the would-be guarantor he had subrogation rights that might be destroyed if the lender pursued nonjudicial foreclosure; but neither did the language in Mariners, though at least that language strongly implied the guarantor might actually have a defense based on section 580d. The language in Indusco seems very general indeed, so we can easily understand why it failed to pass muster. In analyzing these cases, however, it is perhaps too easy to stray from the question which must necessarily be the core of whether the Gradsky defense has been waived: what is it, precisely, that the guarantor is being asked to waive? The answer is supplied by Gradsky itself: it is the defense based on estoppel which arises out of the operation of section 580d in the context of a nonjudicial foreclosure. If we keep this basic fact in mind, it becomes clear that it is not enough merely to imply (however strongly or unavoidably) to the guarantor that he or she has a "right" to compel the lender to select a particular remedy (judicial foreclosure) in the event the principal obligor 1539 fails to pay the loan. This does not spell out the true legal consequences of what would otherwise happen if the lender selects another remedy (nonjudicial foreclosure). The guarantor is not told that if the lender selects nonjudicial foreclosure, he or she will have a defense to a deficiency judgment, and it is that defense which the guarantor is now being asked to give up in advance. Judged on this basis, the language in paragraph 4 of this case falls short of constituting an "explicit" or "specific" waiver of the Gradsky defense. While it is true that paragraph 4 tells the guarantor he or she may lose subrogation rights, it does nothing to tell the guarantor that the very fact of the loss of those subrogation rights itself has legal significance namely that it confers an immunity from a deficiency judgment. The closest paragraph 4 comes to such a declaration is the language which states the guarantor "shall be liable to Bank for any deficiency resulting from the exercise by it of any such remedy, even though any rights which Guarantor may have against others might be ... destroyed." But again, the problem with these words is that they are insufficiently specific about the precise rights that are being waived. In effect, all they say is: "You will be liable for a deficiency judgment even if our exercise of one of our remedies destroys your subrogation rights." To find a waiver of the Gradsky defense here one must go beyond the actual words and imply into them two more ideas, namely: (1) that the destruction of subrogation rights creates a defense to a deficiency judgment, and (2) the guarantor is now waiving that specific defense. (3) The first principles of waiver buttress our conclusion. Waiver is the intentional relinquishment of a known right. (BP Alaska Exploration, Inc. v. Superior Court (1988) 199 Cal. App.3d 1240, 1252 [245 Cal. Rptr. 682] [erroneous legal concession not waiver because not intentional and knowing].) "The burden is on the party claiming the waiver to prove it by clear and convincing evidence that `"does not leave the matter doubtful or uncertain...."'" (Pacific Valley Bank v. Schwenke (1987) 189 Cal. App.3d 134, 145 [234 Cal. Rptr. 298], quoting In re Marriage of Vomacka (1984) 36 Cal.3d 459, 469 [204 Cal. Rptr. 568, 683 P.2d 248].) Waiver requires "`sufficient awareness of the relevant circumstances and likely consequences.'" (In re Marriage of Perkal (1988) 203 Cal. App.3d 1198, 1203 [250 Cal. Rptr. 296], quoting In re Marriage of Moore (1980) 113 Cal. App.3d 22, 27 [169 Cal. Rptr. 619].) These principles emphasize actual knowledge and awareness of what is being waived, and require resolution of doubts against waiver. (2b) Here, 1540 the language in paragraph 4 does not provide the reader with any actual awareness of the Gradsky defense (i.e., the legal consequence of the destruction of subrogation rights by nonjudicial foreclosure), and even if the matter is arguable, the doubt should be resolved against waiver. This last point raises the more general issue of how courts should approach waivers of the Gradsky defense in guaranty agreements. The average lawyer would naturally suppose that any ambiguities would be construed against the party who selected the language, who normally is the lender. Cathay Bank, however, cites us to two cases (Brunswick Corp. v. Hays (1971) 16 Cal. App.3d 134 [93 Cal. Rptr. 635], and Berg Metals Corp. v. Wilson (1959) 170 Cal. App.2d 559 [339 P.2d 869]) which indicate otherwise. Each of these cases contains a quotation to the effect that ambiguities in guaranty contracts are interpreted against guarantors. The proposition is unsound, at least as applied to waivers of rights inhering in statutory law. Brunswick Corp. v. Hays, supra, 16 Cal. App.3d at pages 138-139, quoted Berg Metals Corp. v. Wilson, supra, 170 Cal. App.2d at page 571, for the ambiguities-against-the-guarantor rule, which in turn quoted Lean v. Geagan (1912) 20 Cal. App. 260 [128 P. 792]. When we turn to Lean, however, we find it provides no authority for its statement,[9] which is not surprising given that, taken literally, the statement contradicts one of the most fundamental tenets of contract law (see Civ. Code, § 1654). What, one might ask, is so special about guaranty contracts that they are exempt from the rule of contra proferentem? The answer is: nothing. Lean involved a situation where the defendant guaranteed repayment of indebtedness for merchandise sold to a third party "provided the amount due or to become due shall at no time exceed the sum of one thousand dollars." (20 Cal. App. at p. 261.) The lender extended credit in excess of $1,000, the third party paid less than $100, the lender sued the guarantor and prevailed, and the guarantor was granted a new trial on the theory that the guaranty was conditioned on the lender's not extending credit in excess of $1,000. (See 20 Cal. App. at pp. 261-262.) The appellate court rejected the theory on the (hardly surprising) ground that nothing indicated the guarantor "feared that a credit in excess of the amount stated in the instrument would be injurious to her, or that she desired to control the amount of credit" which the lender extended. (20 Cal. App. at p. 263.) It was in the context of showing that the language relied on by the guarantor was 1541 only a limitation on the amount she was guaranteeing, not a condition precedent to her liability, that the court made its ambiguity statement. (See fn. 9 ante.) (4) It is true that guaranty contracts are not contracts of adhesion. (Security Pacific National Bank v. Adamo (1983) 142 Cal. App.3d 492, 497-498 [191 Cal. Rptr. 134].) But that cannot reverse the usual rule that ambiguities are construed against the drafter. Adamo used the phrase "contract of adhesion" to refer to a certain kind of "unenforceable" contract, i.e., one which defeats the reasonable expectation of the adhering party, not to an ordinary garden-variety agreement which, while nonetheless enforceable, still must be construed against the drafter. (See 142 Cal. App.3d at p. 497.) (2c) Finally, our conclusion is buttressed by the absence of any mention of section 580d. It would seem that, even if waiver language did not actually tell the guarantor of the substance of the Gradsky defense, it might at least tell the guarantor that he or she is waiving any defense or benefit based on the underlying statutory basis of the Gradsky opinion, that is, section 580d. Indeed, the section was specifically mentioned in both the language in Mariners (held explicit) and in the form waiver given in a recent treatise, 1 California Real Property Financing (Cont.Ed.Bar 1988). (See § 7.20, p. 320.) We turn now to the language in paragraph 5. On first reading, the core sentence of this paragraph appears absolutely hopeless. The sentence is a disjunctive nightmare, larded with "ors." If we puzzle over the sentence long enough, though, we eventually discover that it is structured around two alternatives. The guarantor waives "any defense" either (1) by reason of any disability or other defense of Debtor, its successor or endorser or co-maker or other guarantor, or (2) by reason of the cessation from any cause whatsoever of the liability of Debtor or endorser or co-maker, or other guarantor. The best one can make of the first alternative is that the guarantor is waiving any "defense based on any defense" of the debtor. This statement, however, is even more general than the "all suretyship defenses" language which was held to be insufficiently explicit in Indusco. It is simply too broad to pass muster as a "specific waiver" of estoppel rights. (See Indusco, supra, 40 Cal. App.3d at p. 462, fn. 4.) The second alternative, centered on the words "cessation from any cause whatsoever of the liability of the Debtor," is even harder to understand. A lawyer, familiar with note and deed of trust practice, might deduce that the words allude to the one-action rule. But even then, so what? The relation between, on the one hand, a defense "by reason" of the debtor's ceasing to *1542 be liable to the lender, and, on the other, an estoppel defense created by court decision based on the destruction of the guarantor's rights by the lender's choice of remedies is hardly self-evident. We dare say the average person would never figure it out. It took Justice Hufstedler several pages to explain the connection in Gradsky. III. We must therefore conclude that the language in paragraphs 4 and 5 of the continuing guaranty agreement cannot, as a matter of law, establish an express waiver of the estoppel defense articulated by Gradsky. Accordingly, the summary judgment in favor of Cathay Bank cannot be sustained. All other issues follow in the wake of this determination, except one should the summary judgment merely be reversed, or should we also direct that judgment be entered in Lee's favor? Lee also brought a motion for summary judgment. The bank defended against Lee's motion on legal grounds, arguing Lee, as a guarantor, was not covered by California's antideficiency legislation, and that Lee was liable for the contents of the guaranty, even if he did not read it before signing. The bank also asserted that the waiver language was sufficient. What the bank did not argue is that Lee had, by his conduct, waived the Gradsky defense. (See generally Consolidated Capital Income Trust v. Khaloghli, supra, 183 Cal. App.3d 107.) We confirmed at oral argument that the bank did not have any facts (beyond, of course, the guaranty itself) on which to base such a waiver. Accordingly, mere reversal would only add to court delay and the parties' legal costs by forcing Lee to bring a second motion for summary judgment, the success of which, given our opinion today, would be a foregone conclusion. We therefore reverse the summary judgment in favor of Cathay Bank and direct that judgment be entered in favor of Lee. Moore, J., and Wallin, J., concurred. Respondent's petition for review by the Supreme Court was denied July 15, 1993. Panelli, J., and Baxter, J., were of the opinion that the petition should be granted. NOTES [1] Because of mathematical errors in the declaration supporting its summary judgment motion, the bank waived all sums (other than attorney fees) over $604,233.38. In addition, it waived late charges of $41,077.61. [2] See Consolidated Capital Income Trust v. Khaloghli (1986) 183 Cal. App.3d 107, 112 [227 Cal. Rptr. 879] ("Guarantors are not specifically protected by the terms of Code of Civil Procedure sections 580b and 580d...."); Mariners Sav. & Loan Assn. v. Neil (1971) 22 Cal. App.3d 232, 236 [99 Cal. Rptr. 238, 49 A.L.R.3d 549] ("The holding in Gradsky clearly pointed out that Code of Civil Procedure section 580d was not directly applicable to the situation of the guarantor."). Any references in this opinion to sections 580, 580b or 580d are to the Code of Civil Procedure. [3] Gradsky is based on the interplay of two ideas: (1) a guarantor can pay a debtor's debt and thereby obtain the same rights against the debtor that the original lender had; and (2) a lender (and therefore a guarantor standing in a lender's shoes) cannot obtain a deficiency judgment against a debtor if the lender elects a nonjudicial foreclosure. (See generally 265 Cal. App.2d at pp. 43-47.) Taken together, the two ideas mean that if a lender elects nonjudicial foreclosure, the lender effectively destroys the guarantor's subrogation rights against the debtor. No security remains and the lender (i.e., the guarantor standing in the lender's shoes) has no further rights against the debtor. From this, the court in Gradsky reasoned that because only the lender has the option of preserving its rights and preserving the guarantor's subrogation rights (by electing judicial foreclosure), the lender must be estopped to pursue the guarantor if the lender elects a remedy which destroys the guarantor's subrogation rights. (See 265 Cal. App.2d at pp. 46-47.) The underlying rationale seems to be that the courts should remedy the basic inequity which occurs when the lender nonjudicially forecloses. (See Com., Guarantors and the California Antideficiency Legislation: Is There Room Under the Umbrella of Protection? (1988) 20 Pacific L.J. 127, 139.) [4] Here is the complete text: "4. Guarantor authorizes Bank at its sole discretion, with or without notice and without affecting its liability hereunder from time to time to: (a) change the time of payment of any Credit by renewal, extension, acceleration or otherwise, (b) alter or change any other provision of any Credit including the rate of interest thereon, (c) release, substitute or add one or more endosers [sic], co-signers or guarantors for any Credit, (d) obtain collateral for the payment of Credit and/or any guaranty thereof, (e) release existing or after acquired collateral on such terms as Bank in its sole discretion shall determine, (f) apply any sums received from Debtor, any other guarantor, endorser or co-signer or from collateral or its proceeds to any indebtedness whatsoever in any order and regardless of whether such indebtedness is guaranteed hereby, is secured by collateral or is due and payable, (g) apply any sums received from Guarantor or from the sale of collateral granted by Guarantor to any of the Credits in any order regardless of whether the Credit is secured by collateral or is due and payable and (h) exercise any right or remedy it may have with respect to the Credit or any collateral securing the Credit or Guaranty including, but not limited to judicial foreclosure, exercise of power of sale or taking of deed or assignment in lieu of foreclosure as to any collateral, and Guarantor shall be liable to Bank for any deficiency resulting from the exercise by it of any such remedy, even though any rights which Guarantor may have against others might be diminished or destroyed." [5] Here is the complete text: "5. Guarantor waives all right to require Bank to: (a) proceed against Debtor or any other person, (b) proceed against collateral granted by Debtor or others before collateral granted by Guarantor, (c) pursue any other remedy in Bank's power whatsoever or (d) disclose any information with respect to the Credit, the financial condition or character of the Debtor, any collateral, other guaranties or any action or non-action on the part of Bank, Debtor or any person connected with the Credit or collateral thereto. Guarantor waives any defense arising by reason of any disability or other defense of Debtor, its successor or endorser or co-maker or other guarantor or by reason of the cessation from any cause whatsoever of the liability of Debtor or endorser or co-maker, or other guarantor. Until all Credit has been paid in full, even though it may be in excess of the liability incurred hereby, Guarantor shall not have any right of subrogation and Guarantor waives any benefit of and any right to participate in the collateral, Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor and notice of acceptance of this guaranty." [6] See Torrey Pines Bank v. Hoffman (1991) 231 Cal. App.3d 308, 324-325 [282 Cal. Rptr. 354] (passing statement that four corners of forbearance agreement did not support any finding of waiver); Consolidated Capital Income Trust v. Khaloghli, supra, 183 Cal. App.3d 107, 116 (dicta that certain language "arguably" constituted an explicit waiver, but noting lender had not considered the waiver argument "worth the effort to set it forth"); see also Krueger v. Bank of America (1983) 145 Cal. App.3d 204, 213 [193 Cal. Rptr. 322] (reference to waiver of guarantor's right to insist that lender exhaust security first, but no discussion of waiver language); Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal. App.3d 101, 155 [135 Cal. Rptr. 802] (conclusory comment that completion guarantee agreement "contained an express contractual waiver of the Gradsky defense"); Union Bank v. Brummell (1969) 269 Cal. App.2d 836, 839 [75 Cal. Rptr. 234] (conclusory statement that after examination of guaranty instrument, it contained no explicit waiver of "rights delineated in Gradsky"). [7] Hetland, California Real Estate Secured Transactions (Cont.Ed.Bar 1970) section 6.54, page 321. [8] In its brief, Cathay Bank charitably speculates that the official reporter or the printer in Mariners omitted the "d" in the reference to section "580," because reference to section 580 in this context would be meaningless. We agree. Section 580, which addresses the relief available on default judgments, has nothing to do with the Gradsky defense. [9] "It is well settled that any ambiguity in a contract of guaranty, concerning the liability of the guarantor, will be resolved in favor of protecting the creditor to the extent of the sum named therein; in other words, that such a provision will be construed as a limitation upon the amount of the guarantor's liability rather than as a condition upon which any liability whatever attaches." (20 Cal. App. at p. 262.)	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349835/	73 Wash. App. 570 (1994) 870 P.2d 323 CHRISTINA L. FLEMING, Respondent, v. GRANGE INSURANCE ASSOCIATION, Appellant. No. 32782-8-I. The Court of Appeals of Washington, Division One. April 4, 1994. 571 William J. Price, Vickie L. Vaska, and Karr Tuttle Campbell, for appellant. David A. Kohles, for respondent. COLEMAN, J. This appeal arises out of a dispute between Appellant Grange Insurance Association and Respondent Christina L. Fleming over the interpretation of an automobile insurance policy issued to Bryan R. Brittain. Grange appeals the trial court's award of summary judgment in favor of Fleming, arguing that Fleming is not within the class of persons entitled to underinsured motorist benefits under Brittain's policy. We agree and reverse. On August 15, 1992, Fleming was injured while riding as a passenger in her own automobile, which was being driven by Brittain. The accident occurred when Michelle M. Bryant's car crossed the center line and struck Fleming's automobile. Fleming's automobile was not covered by an insurance policy at the time of the accident. After Bryant was found to be at fault, Fleming accepted a $25,000 policy limit settlement offered by Bryant's insurance company. In exchange, Fleming released Bryant and her insurance company from any further liability arising out of the accident. Fleming subsequently sought underinsured motorist (UIM) benefits under an insurance policy issued by Grange to Brittain. Grange denied the benefits on the basis that 572 Fleming was not a "covered person" under the Brittain policy. On April 21, 1993, the trial court heard respective motions for summary judgment. The court awarded summary judgment in favor of Fleming, stating that Fleming was within the class of persons entitled to UIM benefits under the Brittain policy. Grange appeals. [1] When reviewing an order of summary judgment, the appellate court must engage in the same inquiry as the trial court. Roller v. Stonewall Ins. Co., 115 Wash. 2d 679, 682, 801 P.2d 207 (1990) (citing Wendle v. Farrow, 102 Wash. 2d 380, 383, 686 P.2d 480 (1984)). An order of summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Roller, at 682 (citing Wendle, at 383). [2, 3] In this case, because the parties do not dispute the facts, Fleming's entitlement to UIM benefits depends solely on the language of the Brittain insurance policy. The interpretation of such language is a question of law. Roller, at 682 (citing State Farm Gen. Ins. Co. v. Emerson, 102 Wash. 2d 477, 480, 687 P.2d 1139 (1984)). This court must therefore review de novo the trial court's decision regarding insurance coverage. Roller, at 682 (citing Inland Empire Distrib. Sys., Inc. v. Utilities & Transp. Comm'n, 112 Wash. 2d 278, 282, 770 P.2d 624, 87 A.L.R. 4th 627 (1989)). The policy should be given a fair, reasonable, and sensible construction such as would be given to the contract by the average person purchasing insurance. Roller, at 682 (citing E-Z Loader Boat Trailers, Inc. v. Travelers Indem. Co., 106 Wash. 2d 901, 907, 726 P.2d 439 (1986)). We initially determine whether Fleming, who was injured while riding as a passenger in her own automobile, is a "covered person" under the UIM endorsement provision of Brittain's Grange policy. Brittain's Grange policy includes UIM coverage for bodily injury sustained by a "covered person". A "covered person" is defined as: 573 1. You or any "family member". 2. Any other person "occupying" your covered auto. 3. Any person for damages that person is entitled to recover because of "bodily injury" to which this coverage applies sustained by a person described in 1. or 2. above. (Italics ours.) Within the second definition of a "covered person" are three words, "your covered auto". These three words are not set off by quotation marks and, as a phrase, are not defined anywhere in the policy. The main policy booklet does, however, provide definitions of these three words either alone or in various combination. The word "you" or "your" is defined as "the insured named on the information page(s) ...". The phrase "your auto" is defined as "[t]he vehicle(s) described on the information page(s) of this policy". Finally, "covered auto" is defined as any of the following: a. Insured auto, owned auto or your auto the vehicle(s) described on the information page(s) of this policy. b. Newly owned auto[.] c. Temporary substitute autosomeone else's auto temporarily used while yours is destroyed, broken down, being serviced or repaired. It must be used by you or a covered person. d. Non owned autosomeone else's auto operated by you or a family member with the owner's permission. It cannot be furnished for the regular or frequent use of you or a family member. Fleming contends that the grant of UIM coverage under this policy is controlled by the phrase "covered auto". In particular, the definition of that phrase provides four categories of vehicles for which Brittain is covered. According to Fleming, because she meets the requirements of one of those categories, i.e., a passenger in a nonowned automobile driven by Grange's insured, she is entitled to UIM coverage as a "covered person". Grange, on the other hand, contends that because the pronoun "your" precedes the words "covered auto", the Brittain policy extends UIM coverage only to passengers occupying a vehicle in which Brittain has an ownership interest. Thus, Grange argues, because Brittain has no ownership 574 interest in Fleming's car, Fleming was not occupying a "your covered auto" within the meaning of the policy. In support, Grange cites Sowa v. National Indem. Co., 102 Wash. 2d 571, 688 P.2d 865 (1984). We agree with Grange's position and find that the analysis applied in Sowa controls the disposition of this case. In Sowa, the Sowas' son, Kevin, purchased a motorcycle and took immediate possession. Sowa, at 572-73. Prior to the formal transfer of title, Kevin was involved in an accident. Sowa, at 572-73. The Sowas subsequently sought UIM benefits under the motorcycle policy of the previous owner. Sowa, at 573. Like the insurance policy in this case, the policy in Sowa included UIM protection for "covered persons". "Covered persons", in turn, were defined as "any other person occupying `your' covered auto". Sowa, at 573. The Sowas argued that their son was entitled to UIM benefits as an individual occupying a "`your' covered auto" because on the day of the accident, the motorcycle was listed on the policy. Sowa, at 575. The insurance company, however, argued that the pronoun "your" required that it only insure vehicles owned by the policy holder. Sowa, at 573. On review, our Supreme Court affirmed the trial court's order denying coverage, finding that the definition of "covered auto" was to be read in conjunction with the policy definitions of "you" and "your". Sowa, at 575-77. Thus, because the policy defined "you" and "your" as the named insured, the policy required the insured to have an ownership interest in the "covered auto". Sowa, at 575-77. [4] As Grange correctly contends, despite the factual differences between Sowa and this case, the court's reasoning nevertheless applies.[1] In particular, when the term "covered auto" is read in conjunction with the term "your", it is clear 575 that the phrase "your covered auto" requires an ownership interest. That is to say, the named insured must be the owner of the vehicle at the time of the accident in order for any person "occupying" the vehicle, other than the named insured, to qualify for UIM coverage. Under the interpretation offered by Fleming, no effect is given to the term "your". Indeed, in order for the policy to comport with Fleming's interpretation, the language would have to read: "a covered auto driven by you". Clearly, under this alternative language, a third party passenger would be entitled to UIM coverage under all four "covered auto" categories. The policy in this case, however, specifically provides that it must be "your covered auto". The pronoun "your" therefore clearly and unambiguously restricts the scope of UIM protection afforded to third party passengers. see Sowa, at 576-77 (stating that courts cannot rule out language included by the parties). Thus, in this case, because Brittain was not driving an automobile that he owned, Fleming was not a person occupying a "your covered auto" at the time of the accident. [5] Fleming contends that this result is illogical because it eliminates coverage with respect to two of the four "covered auto" categories. Fleming fails to recognize, however, that the policy extends UIM protection quite broadly to the insured under all four categories. That is to say, the scope of UIM protection as it relates to an insured and his or her family members does not depend on ownership. An insurance company is entitled, however, to restrict the scope of UIM protection as it relates to nonpremium paying third party passengers. see Blackburn v. Safeco Ins. Co., 115 Wash. 2d 82, 87-88, 794 P.2d 1259 (1990). Our Supreme Court has recognized as much, stating: "`Other insureds' have the option ... to contract with an insurance company and pay a premium for UIM insurance that applies at all times, regardless of their status in a particular vehicle." Blackburn, at 89. [6] Thus, Fleming could have purchased insurance to protect her status as an insured, but she failed to do so. 576 And while the public policy underlying Washington's UIM statute is to maximize the protection afforded by insurance coverage, it does not require insurance companies to provide the coverage for free. Blackburn, at 88. We therefore find that the exclusionary clause in the Grange policy is consistent with Washington's UIM statute and that the trial court erred, as a matter of law, in denying Grange's motion for summary judgment. [7] Because of our disposition, Fleming is not entitled to an award of attorney fees and costs on appeal under the holding of Olympic S.S. Co. v. Centennial Ins. Co., 117 Wash. 2d 37, 811 P.2d 673 (1991) or the frivolous claim statute, RCW 4.84.185. The order of summary judgment is reversed, and the cause is remanded for entry of a judgment in favor of Grange Insurance Association. WEBSTER, C.J., and SCHOLFIELD, J., concur. Reconsideration denied April 28, 1994. Review denied at 125 Wash. 2d 1002 (1994). NOTES [1] Fleming attempts to distinguish Sowa from this case on two grounds. First, the policy in Sowa specifically defined the phrase "your covered auto" as any vehicle shown in the declarations. Second, the policy in Sowa did not contain multiple definitions of the term "covered auto". We find these factual differences to be inconsequential. The basic inquiry in both cases is, as a matter of contract interpretation, the effect of the pronoun "your" on the phrase "covered auto".	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349837/	178 Ariz. 84 (1993) 870 P.2d 1180 Jackie MONTGOMERY, Petitioner, v. SUPERIOR COURT of the State of Arizona, In and For the COUNTY OF MARICOPA, The Honorable Steven D. Sheldon, a judge thereof, Respondent Judge, STATE of Arizona, Real Party in Interest. No. 1 CA-SA 93-0200. Court of Appeals of Arizona, Division 1, Department A. November 18, 1993. Review Granted April 5, 1994. 85 Grant Woods, Atty. Gen. by Paul J. McMurdie, Chief Counsel, Crim. Appeals Section, and Richard M. Romley, Maricopa 86 County Atty. by Arthur Hazelton, Deputy County Atty., Phoenix, for real party in interest. Dean W. Trebesch, Maricopa County Public Defender by James H. Kemper, Deputy Public Defender, Phoenix, for petitioner. OPINION GARBARINO, Presiding Judge. Jackie Montgomery (petitioner) brings this special action from the trial court's denial of his request for an extension of time of file a pro se petition for post-conviction relief and the court's dismissal of his non-existent petition. This court accepted jurisdiction, granted relief, and stated that an opinion would follow. This is that opinion. FACTS AND PROCEDURAL HISTORY Following the petitioner's plea of guilty to burglary in the third degree, the trial court sentenced the petitioner to eight years of imprisonment. The petitioner filed a notice of post-conviction relief, requesting court-appointed counsel. The court appointed the public defender's office to represent the petitioner and ordered that counsel file a petition for post-conviction relief within sixty days. On the sixtieth day, counsel wrote the petitioner, stating that after reviewing the case, he was unable to identify any issues upon which to base a claim for relief. Counsel advised the petitioner that he had the right to file a petition on his own behalf and that counsel would seek additional time from the court to enable the petitioner to do so. On the same day, counsel filed a "Notice of Completion of Post-Conviction Review by Counsel; Request for Extension of Time to Allow Defendant to File Pro Per Petition for Post-Conviction Relief." The court denied the petitioner's request to file a pro se petition and summarily dismissed the non-existent petition. This special action followed. ISSUES 1. Whether the petitioner has a right to file a pro se petition for post-conviction relief after court-appointed counsel has determined that he is unable to identify a meritorious claim; and 2. Whether the petitioner's request to file a pro se petition constitutes good cause to warrant an extension to file the petition. DISCUSSION The petitioner seeks recognition of the right of all Rule 32 litigants to proceed pro se after appointed counsel has made a determination that the petitioner does not have a claim cognizable under Rule 32. The petitioner argues that the trial court lacks discretion to deny him the right to proceed pro se. He cites Rule 32.1, Arizona Rules of Criminal Procedure, which provides in pertinent part that "any person who has been convicted of, or sentenced for, a criminal offense may ... institute a proceeding to secure appropriate relief...." The State argues that Rule 32 does envision a defendant filing a petition when counsel cannot ethically proceed because of the perceived lack of a meritorious claim. The State also contends this would result in hybrid representation, which the law precludes. We first address the State's contention that this case involves hybrid representation. The State is correct in its assertion that the petitioner does not have a right to hybrid representation, that is, to be represented by counsel and to represent himself simultaneously. See State v. Stone, 122 Ariz. 304, 307-08, 594 P.2d 558, 561-62 (App. 1979). Hybrid representation differs from representation by advisory counsel, which involves counsel providing a pro se defendant with technical assistance in the courtroom without participating in the actual conduct of the trial. State v. Rickman, 148 Ariz. 499, 504 n. 1, 715 P.2d 752, 757 n. 1 (1986). Here, counsel clearly indicated he was no longer involved with the case and he informed the petitioner that he should proceed pro se if he chose to do so. At this point, counsel's representation of the petitioner could not be characterized as hybrid representation. He did not withdraw, but he did advise the petitioner that he had completed his review of the file and was unable to find 87 any claims to raise under Rule 32. Counsel explicitly indicated to the petitioner that his active representation of the petitioner had come to an end. The message to the petitioner was clear. If the petitioner had any basis for relief that he wanted to bring to the court's attention, he was going to have to raise it pro se. Because counsel had not withdrawn, he was still available to advise the petitioner, but his active representation had been concluded. Fundamental to our system of justice is the concept that a defendant has a constitutionally protected right of access to the courts. Wolff v. McDonnell, 418 U.S. 539, 556, 94 S. Ct. 2963, 2974, 41 L. Ed. 2d 935 (1974). The right of a defendant to represent himself is also a constitutional right. Faretta v. California, 422 U.S. 806, 836, 95 S. Ct. 2525, 2541, 45 L. Ed. 2d 562 (1975). When counsel advised the petitioner that he was unable to find a justiciable claim to raise, it was then up to the petitioner acting pro se to present whatever claims he felt meritorious. Article 2, section 24, of the Arizona Constitution guarantees to the accused in criminal prosecutions "the right to an appeal in all cases." Rule 32, Arizona Rules of Criminal Procedure, although separate and apart from the right to appeal, State v. Gause, 112 Ariz. 296, 297, 541 P.2d 396, 397 (1975), cert. denied, 425 U.S. 915, 96 S. Ct. 1515, 47 L. Ed. 2d 766 (1976), was enacted as a safeguard "designed to accommodate the unusual situation where justice ran its course and yet went awry." State v. McFord, 132 Ariz. 132, 133, 644 P.2d 286, 287 (App. 1982). Although both Rule 32 proceedings and the right to appeal are designed to ensure that every defendant is afforded due process of law, the procedural rules are different. While we agree with the State that a defendant is not afforded the same rights in a Rule 32 proceeding as on direct appeal, at a minimum, the United States Constitution requires that the states provide every litigant an "adequate opportunity to present his claims fairly." Ross v. Moffitt, 417 U.S. 600, 616, 94 S. Ct. 2437, 2447, 41 L. Ed. 2d 341 (1974). The petitioner in this case was not afforded that opportunity. Here, court-appointed counsel did not withdraw. He merely requested permission from the court to allow the petitioner to file a Rule 32 petition pro se. The petitioner seeks to preserve the same access to the courts offered to a petitioner under the former version of Rule 32 when the petitioner authored the petition and counsel supplemented it, and under the Anders procedure which allows a defendant to supplement a brief filed by court-appointed counsel pursuant to Anders v. California, 386 U.S. 738, 87 S. Ct. 1396, 18 L. Ed. 2d 493 (1967). Oftentimes, a petitioner and counsel will disagree about what the petitioner believes to be a viable basis for a Rule 32 petition. The rationale for allowing a petitioner to proceed pro se is to provide a review of what the petitioner personally believes to be his or her basis for relief. This court has often enough found merit in issues that petitioners have raised pro se that we cannot discount the importance of this option. Ultimately, the court, not counsel or the pro se petitioner, will decide if the claim lacks merit. However meritorious or nonmeritorious the claim may be, it cannot be addressed until the petitioner has had adequate opportunity to present it to the court. If the court determines an issue may have merit, it provides the assistance of counsel to argue the issue prior to making its decision. Allowing counsel to remain of record facilitates this process. Because we have determined that the petitioner is entitled to present his claims pro se in the post-conviction proceeding following his counsel's notification that counsel could not find a meritorious issue, we next consider the petitioner's request for an extension of time within which to file his petition. There is no dispute that the petitioner in this case failed to timely file his petition as required by Rule 32.4(c). Therefore, we must determine whether the petitioner established "good cause" to justify an extension for filing his petition. Rule 32.4(c) provides in pertinent part: 88 In non-capital cases, appointed counsel for the defendant shall have sixty days from the date of appointment to file a petition raising claims under Rule 32.1. A non-capital defendant proceeding without counsel shall have sixty days to file a petition from the date the notice is filed or from the date the request for counsel is denied .... On a showing of good cause, a defendant in a non-capital case may be granted a thirty day extension within which to file the petition. (Emphasis added). The State contends that a petitioner is not entitled to file a petition after the expiration of the time limits as set forth in Rule 32.4. It argues that the judge did not abuse his discretion in this case because the petitioner did not file a timely petition and did not show good cause why an extension should have been granted. The petitioner, however, contends that the trial court erred in denying his request for an extension of time because counsel's last-minute assertion that he could not assist the petitioner constituted "good cause" for an extension to enable him to proceed pro se. We agree that counsel's late notification that he was unable to find a colorable claim constitutes good cause to allow the petitioner an extension of time within which to file a petition pro se should he choose to do so. We do not suggest that pro se litigants should be exempt from the rules. However, in this instance, counsel did not inform the petitioner until the last day within which the petitioner could file a petition for post-conviction relief, pursuant to Rule 32.4(c), that he was unable to find any meritorious arguments. The petitioner was not afforded ample time to raise possible meritorious claims. In a case like this and under the undisputed circumstances, to hold the petitioner to strict time constraints would deny him access to the court system. Accordingly, we find that the petitioner has complied with Rule 32.4(c). Counsel's late notification to the petitioner that he was unable to find a meritorious claim has established "good cause" to justify an extension of time to allow the petitioner to file a Rule 32 petition pro se. CONCLUSION The trial court's order denying the request for an extension of time and dismissing the petition is vacated. The petitioner was given a thirty-day extension by our order dated August 25, 1993, within which time he was to file his petition. KLEINSCHMIDT and FIDEL, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349842/	528 F.3d 176 (2008) BENNINGTON FOODS LLC, d/b/a Bennington Group v. ST. CROIX RENAISSANCE, GROUP, LLP, Appellant in 2254 v. Montrose Global Assets, Inc., Intervenor in D.C./Appellant in 2313. Nos. 07-2254, 07-2313. United States Court of Appeals, Third Circuit. Argued on December 10, 2007. Opinion Filed: June 9, 2008. 177 Kimberly L. Boldt, Esquire, (Argued), Alters, Boldt, Brown, Rash & Culmo, Boca Raton, FL, for Appellee, Bennington Foods, LLC, d/b/a Bennington Group. Joseph P. Klock, Jr. Esquire, (Argued), JuanCarlos Antorcha, Esquire, Epstein, Becker & Green, Miami, FL, Joel H. Holt, Esquire, Christiansted, St. Croix USVI, for Appellant, St. Croix Renaissance Group, Inc. Kenneth A. Novikoff, Esquire, Rivkin Radler, LLP, Christiansted, St. Croix USVI, Warren B. Cole, Esquire, Hunter, Cole & Bennett, Christiansted, St. Croix USVI, for Appellant, Montrose Global Assets, Inc. Before: SMITH, NYGAARD and ROTH, Circuit Judges. OPINION ROTH, Circuit Judge: St. Croix Renaissance Group, LLP (SCRG), appeals the imposition of a preliminary injunction that would allow Bennington Foods, L.L.C., to remove scrap metal from SCRG's property. SCRG is challenging the District Court's findings under both the likelihood of success prong and the irreparable harm prong of the preliminary injunction test. We conclude that this injunction should be vacated because the District Court erred in finding that failure to grant the injunction would cause irreparable harm. I. BACKGROUND This case arose out of the planned dismantling of an aluminum processing plant on St. Croix, U.S. Virgin Islands. The plant is on property owned by SCRG. Montrose Global Assets, Inc., entered into an agreement with SCRG to find a company to remove the plant structure from the property. Montrose contracted with Bennington Group[1] to remove the metals from the dismantled structure at a set price. SCRG, Montrose, Bennington, and Bradford Welding & Truck Equipment, Inc., then entered into the Dismantling Contract that apportioned responsibility for the various tasks that needed to be done in order for the dismantling to take place. In the clauses that are relevant to this litigation, SCRG was required to obtain the necessary permits for the demolition to take place, and Bennington was required to comply with local laws. 178 SCRG applied for a Major Coastal Zone Management (CZM) Permit on March 7, 2006. Before SCRG obtained a permit, it requested that Bennington begin pre-demolition work, without verifying that such work could be performed without a permit. SCRG believed that Bennington could harvest the scrap metal on the ground without a permit. Bennington's contractors began this work on April 2, 2006. On April 26, 2006, the Department of Building Permits informed SCRG that permits, in fact, were needed to perform the pre-demolition activities. SCRG verbally instructed Bennington to stop working. Bennington and its contractors complied for about three weeks. They then resumed working, notwithstanding SCRG's directive. The Department of Planning and Natural Resources (DPNR) Division of Permits issued a Stop Work Order on June 12, 2006. On June 15, the St. Croix Committee of the Virgin Islands CZM Commission issued a Cease and Desist order. After a hearing before DPNR, the CZM Commission issued Notices of Violation and Assessment of Civil Penalties to SCRG, Bennington, and Bennington's sub-contractors. Meanwhile, just after the Stop Work Order was issued on June 13, Montrose determined that Bennington had never provided any proof of insurance as required by the Demolition Contract and that Bennington had defaulted on the contract by failing to abide by the laws of the U.S. Virgin Islands "governing demolition and removal of structures, waste disposal and/or environmental protections" as required by the contract. On June 19, SCRG forcibly evicted Bennington's contractors from the property. Prior to June 19, Bennington had completed preparations to remove and ship approximately 30,000 tons of scrap metal and 50 tons of copper. These metals are the subject of the instant injunction. Bennington initiated an arbitration proceeding against SCRG in New York on June 28, 2006, pursuant to the Sales Contract. SCRG responded by filing, in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, a Complaint/Application To Stay Demand For Arbitration. On September 26, the Florida circuit court judge issued an order granting SCRG's application, finding that neither Bennington nor SCRG was bound by the arbitration clause in the Sales Contract because they were not parties to that contract. On November 22, 2006, Bennington filed a complaint for damages in the District Court for the Virgin Islands. Bennington then sought a preliminary injunction, allowing it to remove the scrap metal and copper that had already been prepared for removal. The injunction was granted after Bennington amended its complaint to seek equitable relief as well as money damages. SCRG appealed. We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291(a)(1). We review an order granting a preliminary injunction for abuse of discretion, the factual findings for clear error, and the determinations of questions of law de novo. See NutraSweet Co. v. Vit-Mar Enterprises, Inc., 176 F.3d 151, 153 (3d Cir.1999). II. DISCUSSION The District Court found that failing to issue a mandatory injunction would cause irreparable harm to Bennington. Specifically, it found that failure to issue the injunction would harm Bennington's reputation for being able to deliver scrap metal on time. However, a plaintiff in a breach of contract case cannot convert monetary harm into irreparable harm simply by claiming that the breach of contract 179 has prevented it from performing contracts with others and that this subsequent failure to perform will harm the plaintiff's reputation. See Frank's GMC Truck Center, Inc. v. General Motors Corp., 847 F.2d 100, 102 (3rd Cir.1989) ("[t]he availability of adequate monetary damages belies a claim of irreparable injury"), In re Arthur Treacher's Franchisee Litigation, 689 F.2d 1137, 1145 (3rd Cir.1982) ("we have never upheld an injunction where the claimed injury constituted a loss of money, a loss capable of recoupment in a proper action at law"). The inability to gain possession of the scrap metal at issue here creates at most a monetary loss. In the event that subsequent failure to deliver scrap metal to others might create a cognizable risk of irreparable harm to the plaintiff's reputation, Bennington has not demonstrated, except by Bennington's president's personal assertions, that the scrap metal business is different from other types of commerce in such a way that normal breach of contract remedies could not provide a remedy. Nor has Bennington identified any contracts to resell the scrap metal which it has been unable to perform, any third parties with whom it has suffered a loss of reputation, or any attempts futile or otherwise it has made to fulfill contracts to deliver scrap metal by obtaining it from other sources. In order to obtain a preliminary injunction we have repeatedly held that the moving party must demonstrate "(1) the reasonable probability of eventual success in the litigation and (2) that the movant will be irreparably injured pendent lite if relief is not granted. Moreover, while the burden rests upon the moving party to make these two requisite showings, the district court `should take into account, when they are relevant, (3) the possibility of harm to other interested persons from the grant or denial of the injunction, and (4) the public interest.'" Instant Air Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 800 (3rd Cir.1989). Moreover, where the relief ordered by the preliminary injunction is mandatory and will alter the status quo, the party seeking the injunction must meet a higher standard of showing irreparable harm in the absence of an injunction. Tom Doherty Associates, Inc. v. Saban Entertainment, Inc., 60 F.3d 27, 33-34 (2nd Cir.1995). As we find that Bennington has not met this heightened standard and that there is no possibility of irreparable harm on the record before us, there is no need to analyze the other prongs of the test. Bennington argues, however, that it has a reputation for delivering scrap metal on time and that this reputation will be irreparably harmed if it is not allowed to remove the scrap metal at issue here. In particular, Bennington claims that its dealings with its suppliers in India are particularly dependent on its reputation. The District Court concluded that this represented an irreparable harm analogous to those faced by the plaintiffs in Pappan Enterprises, Inc. v. Hardee's Food Systems, Inc., 143 F.3d 800 (3d Cir.1998) and Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589 (3d Cir.1979). However, neither of those cases is applicable here. In Pappan, the defendant was enjoined from the continued use of trademarks owned by the plaintiff, 143 F.3d at 803, while in Fitzgerald the defendant racetrack operator was enjoined from suspending the plaintiff trainer and harness racer for allegedly throwing races, 607 F.2d at 593. In both of those cases the reputation of the plaintiff was directly endangered by the defendant's actions the misleading use of trademarks and a suspension based 180 on suspicion of cheating can, in and of themselves, harm plaintiffs' reputations. In contrast, any damage to Bennington's reputation will result only indirectly from SCRG's actions. SCRG is not doing anything (or refraining from doing anything) that will directly harm Bennington's reputation with its suppliers in India. Rather, the claim is a two-step one: (1) because SCRG is not delivering (allegedly breaching the contract), Bennington is unable to deliver, and (2) lack of delivery harms Bennington's reputation with third parties with whom Bennington has contracted to resell the scrap. There is nothing in this case to distinguish it from a myriad of other breach of contract cases. Thus, there is no reason to make the extended causal inferences necessary to find irreparable harm to reputation. Any damage Bennington may suffer as a result of SCRG's alleged breach of contract to the extent it is not speculative can be proven as an element of the breach of contract claim against SCRG. Bennington, however, cites to Blackwelder Furniture co. of Statesville, Inc. v. Seilig Manufacturing Co., Inc., 550 F.2d 189, 197 (4th Cir.1977), a case in which the trial court denied a preliminary injunction. The Fourth Circuit Court of Appeals reversed, holding that the district court's finding of no irreparable harm was clearly erroneous. Id. at 196. In so concluding, the court stated that The harm posed to Blackwelder's general goodwill by its inability to fill outstanding and accumulating orders in excess of $15,000 for furniture listed in its catalogues is incalculable not incalculably great or small, just incalculable. Id. at 197. We are not bound by the holding in Blackwelder and we question whether irreparable harm was sufficiently demonstrated there. In addition, we note that Blackwelder has been distinguished from other preliminary injunction cases on the basis that Blackwelder "involved a manufacturer's refusal to supply its entire product line to a particular retailer, treatment which discriminated against that particular dealer." Advisory Information and Management Systems, Inc. v. Prime Computer, Inc., 598 F. Supp. 76, 78 (M.D.Tenn. 1984). See also Jack Kahn Music Co., Inc. v. Baldwin Piano & Organ Co., 604 F.2d 755, 762 (2d Cir.1979). As we mention above, there is nothing in the record before us to demonstrate that Bennington was unable to fulfill any contracts, was unable to find other sources of scrap metal when the Virgin Islands scrap metal could not be shipped, or lost reputation with any specific customers. III. CONCLUSION For the foregoing reasons, we will vacate the preliminary injunction and remand this case to the District Court for further proceedings consistent with this opinion. NOTES [1] Bennington does business under a registered, fictitious name as Bennington Group, LLC.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1349871/	528 F.3d 674 (2008) UNITED TRANSPORTATION UNION, General Committee of Adjustment GO-386, J.D. Fitzgerald, General Chairman, Plaintiff-Appellant, v. BURLINGTON NORTHERN SANTA FE RAILROAD COMPANY and Longview Switching Company, Defendants-Appellees. No. 07-35066. United States Court of Appeals, Ninth Circuit. Argued and Submitted April 11, 2008. Filed June 9, 2008. 675 David S. Straton, Eugene, OR; David J. Hollander, Hollander, Lebenbaum & Gannicott, Portland, OR, for the plaintiff-appellant. Donald J. Munro, Goodwin Procter LLP, Washington, DC, for the defendants-appellees. Before: CARLOS T. BEA and MILAN D. SMITH, JR., Circuit Judges, and JOSEPH M. HOOD[], Senior District Judge. 676 HOOD, Senior District Judge: In its Complaint, Plaintiff-Appellant United Transportation Union, General Committee of Adjustment GO-386 ("Union") alleged that Defendants-Appellees Burlington Northern Santa Fe Railroad Company ("BNSF") and Longview Switching Company ("LSC") violated the Railway Labor Act ("RLA"), 45 U.S.C. § 151, et seq., by implementing a trackage rights agreement approved through the process prescribed by the Interstate Commerce Act (hereinafter, "ICA"), 49 U.S.C. § 10101, et seq., without bargaining with the Union. The Union objected to the unilateral transfer of certain work to employees of LSC and the cancellation of BNSF jobs, which effected a change in the "terms and conditions of employment" of individuals represented by the Union. In the present appeal, the Union challenges the district court's grant of BNSF and LSC's motion to dismiss on grounds that the court lacked subject matter jurisdiction. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm. I. BACKGROUND LSC is a Class III rail carrier, jointly owned by BNSF and another, non-party railroad, Union Pacific ("UP"). BNSF and UP are Class I rail carriers. LSC has a separate corporate structure, its own employees, and distinct labor agreements from BNSF. The Union represents conductors and other operating employees (except engineers) of all three railroads. Longview and Longview Junction are railyards that are part of a joint facility owned by BNSF and UP. Longview Junction is adjacent to the BNSF main line from Seattle to Vancouver. Longview is approximately ½ mile from Longview Junction and serves various industry customers. Historically, three companies performed switching operations at Longview Junction: LSC, BNSF, and UP. This arrangement created substantial operational inefficiencies because BNSF and UP were forced to take turns doing switching in the Longview Junction yard. One company switched its own cars for approximately twelve hours before giving way to the other for the next twelve hours. LSC also took turns doing its own switching. While one railroad switched its cars, the others remained idle. Ultimately, rail traffic was slowed throughout the region because of the delays which resulted, and the freight traffic of BNSF and UP, as well as Amtrak's passenger service, were affected. On May 30, 2006, BNSF, LSC, and UP entered into an Overhead Trackage Rights Agreement ("Trackage Rights Agreement") which allowed LSC to perform all switching in the yard, eliminated the system of "taking turns," and reduced or eliminated "work events" on the main line.[1] On June 6, 2006, LSC filed a Verified Notice of Exemption with the Surface Transportation Board ("STB") pursuant to 49 C.F.R. § 1180.2(d)(7). The parties attached a copy of the Agreement and stated that BNSF and LSC were agreeable to the imposition of the STB's standard labor protective conditions for trackage rights agreements. The STB issued an order acknowledging the Exemption on June 26, 2006, and providing that, "[a]s a condition to this exemption, any employees affected by the trackage rights will be protected by the conditions imposed in Norfolk & Western Ry. Co. Trackage Rights BN, 354 677 L.C.C. 605 (1978), [modified,] 360 I.C.C. 653 (1980)." On June 29, 2006, the Union filed a petition to stay the exemption with the STB. BNSF filed an objection. The STB denied the petition for stay on June 30, 2006. While the STB noted the Union's argument that STB authorization was not necessary or appropriate because LSC was merely going to perform switching operations, the STB disagreed and held that "[b]ased on the evidence presented, it appears that the transaction at issue does require Board authorization." The STB noted that the Union could seek further relief by virtue of a petition to reject or revoke the notice of exemption. There is no record that the Union filed a petition to reject or revoke the exemption. Neither is there a record that the Union filed an action in the Court of Appeals to enjoin or suspend the STB's order denying the stay. Finally, there is no record that the Union invoked the arbitration procedures available under the labor conditions imposed by the STB. Instead, the Union filed the present suit in the Western District of Washington seeking declaratory and injunctive relief. II. STANDARD OF REVIEW "The district court's factual findings relevant to its determination of subject matter jurisdiction are reviewed for clear error." Ass'n of Flight Attendants v. Horizon Air Indus., Inc., 280 F.3d 901, 904 (9th Cir.2002), citing La Reunion Francaise SA v. Barnes, 247 F.3d 1022, 1024 (9th Cir.2001). The district court's conclusions of law relevant to dismissal for lack of subject matter jurisdiction are reviewed de novo. Id. III. DISCUSSION A. Statutory Framework The jurisdictional question in this case hinges on the relationship between the Interstate Commerce Act ("ICA"), 49 U.S.C. § 11301 et seq.,[2] and the Railway Labor Act ("RLA"), 45 U.S.C. § 151 et seq. The former promotes railroad consolidation to create a more efficient system of interstate rail transportation. See Norfolk & W. Ry. Co. v. Am. Train Dispatchers' Ass'n, 499 U.S. 117, 119-20, 111 S. Ct. 1156, 113 L. Ed. 2d 95 (1991) ("Dispatchers"). The ICA grants the STB exclusive authority to approve or exempt from the standard approval process a variety of transactions involving rail carriers. 49 U.S.C. § 11323. An approved or exempted transaction may be carried out "without the approval of a State authority" and is "exempt from the antitrust laws and from all other law, including State and municipal law, as necessary" to let the involved carriers execute the transaction. 49 U.S.C. § 11321(a). However, the STB must still "impose labor protective conditions on the transaction to safeguard the interests of adversely affected railroad employees." Dispatchers, 499 U.S. at 120, 111 S. Ct. 1156; see also 49 U.S.C. §§ 11326(a) & 10502(g). The RLA, by contrast, aims "to encourage collective bargaining by rail-roads 678 and their employees in order to prevent, if possible, wasteful strikes and interruptions of interstate commerce." Detroit & Toledo Shore Line R.R. Co. v. United Transp. Union, 396 U.S. 142, 148, 90 S. Ct. 294, 24 L. Ed. 2d 325 (1969). "To this end, the RLA establishes elaborate procedures for the negotiation, enforcement, and modification of collective bargaining agreements between railroad carriers and labor unions." Union R.R. Co. v. United Steelworkers of Am., 242 F.3d 458, 463 (3d Cir.2001). "[T]he procedures of the Act are purposely long and drawn out, based on the hope that reason and practical considerations will provide in time an agreement that resolves the dispute." Bhd. of Ry. & Steamship Clerks, etc. v. Fla. E. Coast Ry. Co., 384 U.S. 238, 246, 86 S. Ct. 1420, 16 L. Ed. 2d 501 (1966). The question of whether a labor dispute is governed by STB procedures or by the RLA has important implications. Rail carriers generally prefer the streamlined STB procedures under the ICA because they reduce delay and facilitate the implementation of transactions. See Norfolk & W. Ry. Co. v. Bhd. of R.R. Signalmen, 164 F.3d 847, 852 (4th Cir.1998). Unions tend to prefer the RLA because its negotiation procedures generate substantial delay and thereby increase employee leverage at the bargaining table. Id. The interplay between these statutory schemes also affects federal jurisdiction. Under the ICA, federal courts of appeals have "exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of . . . all rules, regulations, or final orders of the [STB]." 28 U.S.C. § 2342(5); see also 28 U.S.C. § 2321(a). By contrast, at least where the RLA alone applies, a plaintiff may file suit in federal district court under 28 U.S.C. § 1331. See, e.g., Ass'n of Flight Attendants, AFL-CIO v. USAir, Inc., 960 F.2d 345, 347 (3d Cir.1992). With this background in mind, we proceed to the question at hand: whether the ICA required the district court to dismiss the union's action under the RLA for lack of subject matter jurisdiction. For the reasons set forth below, we hold that the ICA deprived the district court of jurisdiction, and therefore affirm. 1. LSC's acquisition of trackage rights is an exempt transaction under 49 U.S.C. § 10502(a). The first step in the analysis is to characterize the trackage rights agreement under the ICA. The parties do not dispute that the agreement is an exempt transaction. Reading 49 U.S.C. § 10502(a) and 49 C.F.R. § 1180.2(d)(7) together confirms that their understanding is correct. Section 10502(a) provides that the STB "shall exempt a transaction whenever the Board finds that the application (1) is not necessary to carry out the transportation policy of section 10101, and (2) either the transaction is of limited scope or the application is not needed to protect shippers from the abuse of market power." 49 C.F.R. § 1180.2(d)(7) in turn provides that "[a]cquisition of trackage rights and renewal of trackage rights by a rail carrier over lines owned or operated by any other rail carrier or carriers" are exempt transactions under § 10502 if they are "(1) based on written agreements, and (2) not filed or sought in responsive applications in rail consolidation proceedings." The statutory exemption provided by § 10502(a) applies because the regulatory requirements of § 1180.2(d)(7) have been satisfied. The parties do not dispute that LSC is an "other rail carrier." The trackage rights agreement, moreover, was "based on written agreement" and "not filed or sought in responsive applications 679 in rail consolidation proceedings." 49 C.F.R. § 1180.2(d)(7). 2. 49 U.S.C. § 11321(a) applies to a transaction made exempt by 49 U.S.C. § 10502(a). One result of the exemption under 49 U.S.C. § 10502(a) and 49 C.F.R. § 1180.2(d)(7) is that the carriers can implement their transaction without obtaining prior approval and authorization from the STB under 49 U.S.C. § 11323(a)(6). See 49 C.F.R. § 1180.2. More importantly to this case, however, the exemption under § 10502(a) triggers the application of 49 U.S.C. § 11321(a). Section 11321(a) permits carriers whose transaction has been "approved or exempted by the Board under this subchapter" to carry out the transaction "without the approval of a State authority." 49 U.S.C. § 11321(a) (referring to Title 49, Chapter 113, Subchapter II). For the designated exempt transaction, the statute also grants an exemption "from the antitrust laws and from all other law, including State and municipal law, as necessary to let [the parties] carry out the transaction." Id. "The authority of the Board under this subchapter is exclusive." Id. The purpose of § 11321 immunity is to ensure that, once the interests of affected employees are accommodated to the greatest extent possible, obligations imposed by laws such as the Railway Labor Act will not prevent carriers from creating a more efficient market in rail transportation. See Dispatchers, 499 U.S. at 133, 111 S. Ct. 1156. Citing Railroad Consolidation ProceduresTrackage Rights Exemption, Ex Parte No. 282, 1 I.C.C. 270 (1985), the Union argues that § 11321(a) does not apply because the trackage rights agreement was not "exempted by the Board under this subchapter." 49 U.S.C. § 11321(a). Railroad Consolidation Procedures interpreted the quoted text as referring to exemptions that originate in what is now Title 49, Chapter 113, Subchapter II. See 1 I.C.C. at 279. Because LSC's exemption had its source in § 10502 and § 10502 is instead located in Chapter 105, the Union reasons, § 11321(a) does not apply on its terms. We reject the Union's interpretation because none of the statutes contained in Subchapter II of Chapter 113 authorizes the STB to exempt a transaction. Section 11321(a) is the only statute in Subchapter II that even mentions exemptions, and the exemptions that may issue under that statute are neither issued "by the Board" nor applicable to "transactions." Instead, § 11321(a) exemptions issue automatically upon satisfaction of the statutory requirements and apply to carriers rather than the transactions in which they may be involved. Compare 49 U.S.C. § 11321(a) ("A rail carrier . . . participating in . . . a transaction . . . exempted by the Board under this subchapter may carry out the transaction . . . without the approval of a State authority.") (emphasis added) with id. ("A rail carrier . . . is exempt from the antitrust laws and from all other law . . . .") (emphasis added); see also Bhd. of Locomotive Engr's v. Boston & Maine Corp., 788 F.2d 794, 801 (1st Cir.1986) ("[T]he [antitrust and other law] exemption provision [in § 11321(a)] . . . is self-executing."). The Union's interpretation is thus at odds with the text of Subchapter II. See 49 U.S.C. §§ 11321-11328. The more reasonable construction of "exempted by the Board under this subchapter" is that § 11321(a) immunity applies if the result of a Board exemption that originates anywhere in the statutory scheme is that a carrier need not comply with a requirement imposed in Subchapter II. This is the construction most recently 680 adopted by the ICC in Rio Grande Industries, Inc.Trackage RightsBurlington Northern Railroad Co., I.C.C. Finance Docket No. 31730, 1991 WL 62169, at 3-4 (Mar. 8, 1991), which clarified Rail Consolidation Procedures and explained that the exemption authority in § 10502 does not "remove transactions exempted from [§ 11323] from the reach of [§ 11321(a)]." Id. at 4; see also Union R.R. Co., 242 F.3d at 466-67 & n. 10 (holding that § 11321(a) applies to transactions exempted under § 10502 and noting the ICC's decision in Rio Grande Industries). Even if § 11321(a) did not unambiguously compel this interpretation, we would be required to follow it as the ICC's reasonable interpretation of the statute. See Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984). We therefore hold that the trackage rights agreement between BNSF, LSC, and UP was "exempted by the Board under [Chapter 113, Subchapter II]" because, even though the statutory source of the transaction's exemption was § 10502, the effect of the exemption was that the carriers did not have to comply with the approval requirements of § 11323, and § 11323 is located in Subchapter II of Chapter 113. The carriers' trackage rights agreement could therefore be carried out "without the approval of a State authority." 49 U.S.C. § 11321(a). The transaction was also "exempt from the antitrust laws and from all other law, including State and municipal law, as necessary to let [the] rail carrier[s] . . . carry out the transaction." Id. 3. The STB's exclusive authority under § 11321(a) deprives the district court of jurisdiction. Finally, we conclude that the application of § 11321(a) deprived the district court of subject matter jurisdiction over the Union's RLA claims. Section 11321(a) makes the "authority of the Board under [Chapter 113, Subchapter II] . . . exclusive." 49 U.S.C. § 11321(a). In Railway Labor Executives Association v. Southern Pacific Transportation Company, 7 F.3d 902, 906 (9th Cir.1993), we interpreted this language to mean that the "ICC has exclusive authority to resolve" a challenge to a transaction immunized under the statute. We also held that § 11321(a) immunity applies against claims brought under the RLA. Id. Because the union in that case had filed an RLA claim challenging a merger to which § 11321(a) applied, it followed that the district court lacked subject matter jurisdiction. Id. Railway Labor Executives compels the same outcome here. See also Norfolk & W. Ry. Co. v. Bhd. of R.R. Signalmen, 164 F.3d 847, 854-55 (4th Cir.1998) (taking a similar approach); Bhd. Ry. Carmen, Div. of Transp. Commc'ns Int'l Union v. CSX Transp., Inc., 855 F.2d 745, 748-49 (11th Cir.1988) (same); Boston & Maine Corp., 788 F.2d at 800-01 (same). The Trackage Rights Agreement in this matter is a regulated Subchapter II transaction under 49 U.S.C. § 11323(a) and 49 C.F.R. § 1180.2. The parties to that transaction filed a Notice of Exemption, expressly referencing § 1180.2(d)(7). The STB granted the exemption from the procedures otherwise required under 49 U.S.C. §§ 11323 and 11324, filing its notice under 49 C.F.R. § 1180.2(d)(7) and imposing Norfolk & Western conditions. As a regulated Subchapter II transaction, the transaction is, thus, subject to 49 U.S.C. § 11321(a) and immune from "all other law," including the abrogation of collective bargaining agreements and the strictures of the RLA as necessary to implement the transaction. Dispatchers, 499 U.S. at 131, 111 S. Ct. 1156; Union R.R., 242 F.3d at 463-64. Any disputes, including labor disputes, 681 necessary to the Trackage Rights Agreement and its implementation and any disputes about whether modifications to the collective bargaining agreements are "necessary" to the transaction are within the exclusive jurisdiction of the STB, not the federal courts, and should be raised there. 49 U.S.C. § 11323(a); Southern Pacific, 7 F.3d at 906-07. We conclude that the district court properly dismissed this matter, having determined that it did not have subject matter jurisdiction. AFFIRMED. NOTES [*] The Honorable Joseph M. Hood, Senior United States District Judge for the Eastern District of Kentucky, sitting by designation. [1] The result was increased fluidity of rail traffic for all users of the track. In implementing the Agreement, BNSF did away with one position that had previously handled some of the switching for the railroad, but no employees were furloughed as a result of the change. All affected individuals were assigned to other work. LSC added one switching job. [2] The ICC Termination Act of 1995, Pub.L. No. 104-88, 109 Stat. 803, abolished the Interstate Commerce Commission ("ICC") (§ 101, 109 Stat. at 804) and transferred its remaining functions to the Surface Transportation Board ("STB") as of January 1, 1996. The Act also resulted in the renumbering of various provisions of the Interstate Commerce Act. 49 U.S.C. § 10505 became § 10502. Section 11341 became § 11321. Sections 11344 and 11345 became §§ 11323 and 11324, respectively. Section 11347 became § 11326. The new sections were enacted without substantive change. We refer to the current section numbering in this opinion and substitute the new numbers where the case law or administrative material refers to the former numbering system.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2271788/	334 S.W.3d 599 (2011) SOUTHERN MISSOURI DISTRICT COUNCIL OF THE ASSEMBLIES OF GOD, INC., Plaintiff-Respondent, v. Paul C. KIRK, and Timbercreek Assembly of God, Inc., Defendants-Appellants. No. SD 28999. Missouri Court of Appeals, Southern District, Division One. January 28, 2011. Motion for Rehearing or Reconsideration and Transfer to Supreme Court Denied February 17, 2011. Application for Transfer Denied April 26, 2011. 600 Jerry L. Reynolds, Springfield, MO, for Appellants. John C. Holstein, Springfield, MO, for Respondent. JEFFREY W. BATES, Judge. Defendants Paul C. Kirk (Kirk) and Timbercreek Assembly of God, Inc. (hereinafter collectively referred to as Timbercreek) appeal from a summary judgment granted in favor of Plaintiff Southern Missouri District Council of the Assemblies of God, Inc. (the District). Timbercreek contends the trial court erred in granting summary judgment in favor of the District. We do not reach the merits of Timbercreek's arguments. For the reasons set out below, we instead grant the District's motion to dismiss this appeal.[1] This lawsuit was filed by the District in February 2007. The petition alleged that, according to the District's bylaws, it became the owner of certain real and personal property in Timbercreek's possession because Timbercreek had severed its relationship with the District. Both parties filed motions for summary judgment. The trial court granted the District's motion and denied Timbercreek's motion. The amended judgment entered on January 31, 2008 determined that the District was the owner of certain real and personal property described therein (hereinafter, "the property"). Immediately after the amended judgment was entered, the parties' attorneys began discussing a transfer of possession of the property to the District. A letter 601 dated February 7, 2008 from the District's attorney to Timbercreek's attorney stated: This will confirm our phone conference on Friday, February 1st, where you called me early in the afternoon in response to my letter of January 31st to inform me that your client would be tendering possession of the premises and all of the personal property located thereon and surrendering all of the keys to all of the buildings on the property in accordance with the Judgment no later than Friday, February 8th. This will confirm that should your client fail to tender possession of the real property and tender all of the keys no later than Friday, February 8th, as you represented in our phone conference on February 1st, and as you confirmed in our phone conference this morning, we will proceed with enforcement of the Judgment by any means we deem necessary. As the above letter indicates, no proceedings to enforce the judgment were then pending. A second letter dated the same day from Timbercreek's attorney to the District's attorneys stated: Pursuant to the Judgment entered by [the trial court] my clients have decided to suffer the Judgment and tender the keys to the church property so that they will not be in contempt of the Judgment. My clients strongly disagree with the Judgment of the Court and intend to appeal the Judgment seeking a complete reversal of the Judgment. Upon the reversal of the Judgment, please deliver these keys directly back to me. Nothing in the materials before this Court indicate that Timbercreek sought to obtain a stay of execution by presenting a supersedeas bond for the trial court's approval, as provided under Rule 81.09.[2] In addition, the possibility of obtaining a stay of execution pursuant to Rule 76.25 was eliminated by Timbercreek's decision to surrender possession of the property prior to any execution being levied. The District obtained possession of the property at 11:40 a.m. on February 8th when a representative of the District's law firm took possession of the keys to the building and the personal property located therein. Timbercreek filed its notice of appeal on February 27, 2008. A threshold question in the appellate review of a controversy is whether the matter has become moot due to subsequent events. See State ex rel. Reed v. Reardon, 41 S.W.3d 470, 473 (Mo. banc 2001). "In deciding whether a case is moot, an appellate court is allowed to consider matters outside the record." Id.; Medlin v. RLC., Inc., 194 S.W.3d 926, 930 (Mo.App.2006). While this appeal was pending, the District filed a motion to dismiss on the ground that Timbercreek's decision to surrender possession of the property rendered this appeal moot. We agree. It is well-settled that a party may be estopped from taking an appeal by performing acts after rendition of the judgment which are clearly inconsistent with the right of appeal. See, e.g., Stevens Family Trust v. Huthsing, 81 S.W.3d 664, 667 (Mo.App.2002). Any voluntary act by a party which expressly or impliedly recognizes the validity of the judgment may create such an estoppel. See Id. In urging dismissal of the appeal as moot, the District relies upon Steen v. Colombo, 799 S.W.2d 169 (Mo.App.1990). We find the principal opinion instructive on the issue presented.[3] In Steen, the 602 parties owned adjoining lots in a subdivision. Due to erroneous boundary markings placed by the developer, the Steens built a house on the lot owned by the Colombos. Id. at 170-71. The trial court's judgment ordered the Colombos to deliver a warranty deed for their lot to the Steens. When the Colombos did so, the Steens were ordered to pay $32,000 for the lot. Id. at 171-72. The Colombos adamantly denied that the trial court had the authority to order the conveyance, and they intended to appeal. Nevertheless, a warranty deed for their lot was executed by them and delivered to the Steens. Id. at 172-73. The Steens' $32,000 payment was used to pay off the debt on the property, and the Colombos placed the remaining funds in escrow. Id. at 173. These post-judgment events occurred prior to the filing of the Colombos' notice of appeal. Id. at 175-76. The Colombos did not request that the trial court fix an amount for a supersedeas bond. Id. at 175. The principal opinion noted that "when the object of a proceeding is to secure possession of a particular tract of land, a voluntary surrender of possession may bar the right to appeal, where the property is surrendered before process to enforce the judgment has issued." Id. Based upon a review of a number of opinions from other jurisdictions, the principal opinion concluded that, "when the judgment is a judgment for possession of a tract of land, voluntary surrender of the land effectively concedes the correctness of the judgment, thereby rendering the appeal moot." Id.[4] The Colombos' appeal was determined to be moot because they voluntarily acquiesced in a judgment against them and thereby waived their right to have the judgment reviewed on appeal. Id. at 176. They could not acknowledge and deny the judgment's validity at the same time. We agree with these principles and find them applicable here. We agree with the District's argument that Timbercreek's decision to surrender possession of its real and personal property was a voluntary acquiescence in the judgment that rendered this appeal moot.[5] The principal purpose of the District's lawsuit was to obtain possession of real and personal property which it claimed to own and which were in Timbercreek's possession. The voluntary surrender of that property, before process to enforce the judgment had been issued, barred Timbercreek's right to appeal because the judgment had been effectively satisfied. This voluntary act impliedly recognized the validity of the judgment and was clearly inconsistent with Timbercreek's attempt to appeal. See Lee v. Ellis, 12 S.W.3d 782, 783-84 (Mo.App.2000) (relying on Steen as authority to dismiss an appeal where the appellant acquiesced in the judgment against her by selling certain property); Steen, 799 S.W.2d at 175-76; First Security Bank of Kalispell v. Income Properties, Inc., 208 Mont. 121, 675 P.2d 982, 985 (1984) (by surrendering property due under a judgment, a party effectively accedes to the correctness of 603 the judgment, and it passes beyond an appellate court's power of review); Ottenheimer v. Mountain States Supply Co., 56 Utah 190, 188 P. 1117, 1119 (1920) (surrendering property pursuant to a judgment was an acquiescence in the judgment, which amounted to a waiver of all litigated questions and precluded the appellate court from reviewing those issues). In response, Timbercreek argues that its surrender of possession was involuntary for three reasons. We find no merit in these arguments. Timbercreek first argues that the surrender of the property was involuntary because the District intended to seek enforcement of the judgment in the event Timbercreek did not act. As Steen notes, however, the relevant inquiry is whether the voluntary surrender of the property occurred before process to enforce the judgment had issued. Steen, 799 S.W.2d at 175. No process to enforce the judgment had issued as of February 8th when the surrender of possession took place. Timbercreek could have availed itself of the right to post a supersedeas bond pursuant to Rule 81.09. Alternatively, it could have waited until execution had issued and then sought a stay pursuant to Rule 76.25. This latter rule only requires a showing of good cause for relief, and it is up to the trial court to decide whether to require a bond. Rule 76.25. By taking neither action, Timbercreek demonstrated its acquiescence in the judgment. Next, Timbercreek argues that its surrender of the property was involuntary because the District knew Timbercreek intended to appeal. This same circumstance was present in Steen, and it did not prevent dismissal of the Colombos' appeal on the ground of mootness. Steen, 799 S.W.2d at 175. Timbercreek could not acknowledge and deny the validity of the judgment at the same time. See Id. Finally, Timbercreek argues that the surrender of its property was involuntary because it was necessary to avoid contempt proceedings. The same argument was made in Braveheart Real Estate Co. v. Peters, 157 S.W.3d 231 (Mo.App. 2004). There, the Peters voluntarily conveyed real property as ordered by the judgment to avoid being held in contempt. Id. at 233. Citing Steen, the eastern district of this Court held that the Peters' voluntary surrender of the property effectively conceded the correctness of the judgment and rendered their appeal moot. Braveheart, 157 S.W.3d at 233-34. This appeal is dismissed. NOTES [1] All other pending motions are denied. [2] All references to rules are to Missouri Court Rules (2008). [3] See Brown v. H & D Duenne Farms, Inc., 799 S.W.2d 621, 628 (Mo.App.1990) (an opinion which lacks the concurrence of a majority of the judges, except as to the result, has only instructive value). [4] The voluntary surrender of personal property as ordered by a judgment also has been held to constitute an acquiescence thereto, which waives the right to appeal. See The Ramsey Financial Corp. v. Haugland, 719 N.W.2d 346, 349-50 (N.D.2006). [5] As requested by the District, the judgment also enjoined Kirk from entering the Timbercreek church building, using the personal property located therein or attempting to act as pastor at that location. The voluntary surrender of the church building and personal property, which demonstrated acquiescence in the judgment, also mooted Kirk's appeal.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2502723/	714 S.E.2d 529 (2011) STATE v. MOORE. No. COA10-1383. Court of Appeals of North Carolina. Filed August 2, 2011. Case Reported Without Published Opinion Affirmed.	01-03-2023	10-30-2013

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