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https://www.courtlistener.com/api/rest/v3/opinions/2265691/ | 341 Pa. Super. 26 (1985)
491 A.2d 130
Theodore PADEZANIN, Appellant,
v.
Dorothy PADEZANIN.
Supreme Court of Pennsylvania.
Argued October 25, 1984.
Filed March 29, 1985.
*27 Debra A. Genevie, Beaver Falls, for appellant.
*28 Thomas W. Minett, Assistant District Judge, Elwood City, for appellee.
Before SPAETH, President Judge, and BROSKY and OLSZEWSKI, JJ.
SPAETH, President Judge:
This is an appeal from an order distributing marital property and awarding counsel fees and alimony to appellee. We reverse and remand for further proceedings.
The trial court determined that appellant's vested Railroad Retirement Pension was marital property and valued it at $64,090. The court let appellant keep his pension but it compensated appellee by distributing to her other marital property equal in value to one-half the value of the pension. Appellant argues that his pension may not be distributed as marital property, and that therefore other marital property may not be distributed to appellee to compensate her because he kept the pension. We agree. In Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S. Ct. 802, 59 L. Ed. 2d 1 (1979), the Supreme Court held that § 231m of the Railroad Retirement Act, 45 U.S.C. § 231m, which provided that creditors could not attach a Railroad Retirement Pension and that the pension could not be anticipated, prevented distribution of the pension to the railroad employee's former spouse, and also prevented an offsetting award of other property to the former spouse. Id. at 585-90, 99 S. Ct. at 810-13. Since here the trial court made an offsetting award, we must reverse its order and remand so that it may reconsider its property distribution. We note that on remand the court should consider the effect of a 1983 Amendment to the Railroad Retirement Act that allows at least some of the benefits to be valued as marital or community property and then distributed upon divorce. See 45 U.S.C. § 231m (b)(2).[1]
*29 Appellant also argues that the trial court abused its discretion in requiring him to pay alimony and one-half of so much of appellee's counsel fees as were attributable to the divorce and property distribution. We do not address these arguments, for on remand the trial court will have to reassess the respective positions of the parties, and in light of that reassessment will have to reconsider the issues of alimony and counsel fees. We shall, however, address two other arguments appellant makes regarding counsel fees, for they will no doubt arise again on remand and judicial economy will be served by addressing them now.
The master recommended that appellant pay a percentage of counsel fees attributable to a divorce action filed by appellee in 1978 but dismissed before the commencement of this action. The master also recommended that appellant pay a percentage of appellee's counsel fees attributable to a prior support action by appellee. Appellant's exceptions to the master's report challenged both these recommendations. The trial court agreed with appellant that counsel fees attributable to the prior divorce action should not be awarded, but it awarded counsel fees attributable to the prior *30 support action. Incident to this decision, the court, without hearing and on the basis of its own examination of the record of the prior divorce action, found that the value of appellee's counsel's services in the prior divorce action was $200. It then subtracted that amount from the amount of counsel fees awarded appellee as attributable to this action.
In a divorce action, a trial court may award reasonable counsel fees and expenses. See 23 P.S. § 502. However, the fees and expenses awarded must be attributable to the divorce action. A proceeding for support is a separate action, authorized by 48 Pa.C.S. § 131 (suspended as to procedure by Pa.R.C.P. 1910.31, 42 Pa.C.S.). The support law does not authorize the award of counsel fees and expenses. A court is therefore powerless to award counsel fees and expenses in a support action. See Drummond v. Drummond, 414 Pa. 548, 200 A.2d 887 (1964).
The trial court reasoned that it nevertheless could award appellee counsel fees attributable to the prior support action because the prior support action was "related to" this divorce action in that in this divorce action appellee counterclaimed to recover support arrearages. Slip op. of tr. ct. at 8. We are not persuaded by this reasoning. A claim to recover support arrearages is not a proper counterclaim to a divorce complaint. Pa.R.C.P. 1920.15 (counterclaim in divorce action "may set forth any other matter which under the Divorce Code may be joined with an action of divorce").
On remand, therefore, the trial court shall make no award of counsel fees and expenses attributable to the prior support action. Moreover, we agree with appellant that the court acted improperly in finding, without any hearing, that the value of appellee's counsel fees attributable to the prior divorce action was $200. On remand the court shall determine appellee's reasonable counsel fees and expenses attributable to the present action alone, without reference either to the prior divorce action or to the prior support action.
*31 Reversed and remanded for proceedings consistent with this opinion. Jurisdiction is not retained.
NOTES
[1] § 231m as amended provides:
§ 231m. Assignability; exemption from levy
(a) Except as provided in subsection (b) of this section and the Internal Revenue Code of 1954 [26 U.S.C.A. § 1 et seq.], notwithstanding any other law of the United States, or of any State, territory, or the District of Columbia, no annuity or supplemental annuity shall be assignable or be subject to any tax or to garnishment, attachment, or other legal process under any circumstances whatsoever, nor shall the payment thereof be anticipated.
(b)(1) This section shall not operate to exclude the amount of any supplemental annuity paid to an individual under section 231a(b) of this title from income taxable pursuant to the Federal income tax provisions of the Internal Revenue Code of 1954 [26 U.S.C.A. § 1 et seq.].
(2) This section shall not operate to prohibit the characterization or treatment of that portion of an annuity under this subchapter which is not computed under section 231b(a), 231c(a), or 231c(f) of this title, or any portion of a supplemental annuity under this subchapter, as community property for the purposes of, or property subject to, distribution in accordance with a court decree of divorce, annulment, or legal separation or the terms of any court-approved property settlement incident to any such court decree. The Board shall make payments of such portions in accordance with any such characterization or treatment or any such decree or settlement.
This section as amended became effective with respect to annuity amounts payable for months beginning after the date of its enactment (August 12, 1983) Id. note. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265700/ | 341 Pa. Super. 64 (1985)
491 A.2d 150
COMMONWEALTH of Pennsylvania, Appellee,
v.
Larry BRUNNER, Appellant.
Supreme Court of Pennsylvania.
Argued November 28, 1984.
Filed March 29, 1985.
*66 Nancy J. Hopkins, Norristown, for appellant.
Ronald T. Williamson, Assistant District Attorney, Norristown, for Commonwealth, appellee.
Before WIEAND, MONTEMURO and CERCONE, JJ.
WIEAND, Judge:
Larry Brunner and Woodrow Wilson Murphy were tried before a jury and were found guilty of burglary and conspiracy. On direct appeal, the Superior Court ordered a new trial for Murphy but affirmed the judgment of sentence imposed upon Brunner. Commonwealth v. Brunner, 305 Pa.Super. 411, 451 A.2d 714 (1982). The Supreme Court granted Brunner's petition for allocatur and thereafter vacated the judgment of sentence and remanded "to the court of common pleas for an evidentiary hearing to determine whether petitioner was afforded effective assistance of counsel." Commonwealth v. Brunner, 502 Pa. 358, 466 A.2d 991 (1983). The court of common pleas, after an evidentiary hearing, found that Brunner's counsel had not been ineffective and denied relief. The case is now before this Court on appeal from the order denying relief.
The issues requiring consideration are two in number. First, was trial counsel ineffective for failing to make an objection or move for a mistrial when a principal Commonwealth witness testified that Murphy, the co-defendant, *67 used an alias because he had "jumped parole?"[1] The second issue is whether counsel was ineffective, after having produced an alibi witness, for failing to request a jury instruction regarding the significance of the alibi evidence.
"Before a claim of ineffectiveness can be sustained, it must be determined that, in light of all the alternatives available to counsel, the strategy actually employed was so unreasonable that no competent lawyer would have chosen it." Commonwealth v. Miller, 494 Pa. 229, 431 A.2d 233 (1981). We inquire whether counsel made an informed choice, which at the time the decision was made reasonably could have been considered to advance and protect defendant's interests. See Commonwealth v. Hill, 450 Pa. 477, 301 A.2d 587 (1973). Thus, counsel's assistance is deemed constitutionally effective once we are able to conclude the particular course chosen by counsel had some reasonable basis designated to effectuate his client's interests. The test is not whether other alternatives were more reasonable, employing a hindsight evaluation of the record. Commonwealth ex rel. Washington v. Maroney, 427 Pa. 599, 604, 235 A.2d 349 (1967). We presume counsel is effective. Moreover, the burden of establishing counsel's ineffectiveness rests upon his client.
Commonwealth v. Litzenberger, 333 Pa.Super. 471, 481-482, 482 A.2d 968, 973 (1984), quoting Commonwealth v. Dunbar, 503 Pa. 590, 596, 470 A.2d 74, 77 (1983).
Appellant's trial counsel testified that after a pre-trial motion to sever the Brunner and Murphy cases had been unsuccessful, he adopted a trial strategy which included keeping Brunner "as far away from Mr. Murphy as I could." A part of the stolen property had been found in Murphy's house. The Commonwealth's case against Murphy, therefore, was stronger than its case against Brunner, who was connected to the burglary only by the testimony of *68 Alice Maxwell, an admitted accomplice. When Maxwell testified that Murphy had "jumped parole," the prejudice attached to Murphy. Consistently with the strategy of Brunner's trial counsel, he and his client remained aloof from the ensuing Murphy objection.[2] In this manner counsel attempted to foster a belief on the part of the jurors that it was Murphy, not Brunner, who had been responsible for the burglary.
This course had a reasonable basis designed to effectuate Brunner's interests. We will not determine whether, in hindsight, it would have been more reasonable to join the objection of the co-defendant.
In determining that counsel did not handle this aspect of the trial ineffectively, it is not without significance that at least one Justice of the Supreme Court has suggested that Brunner was not so prejudiced by the fact that Murphy had "jumped parole" as to entitle him to a new trial. Commonwealth v. Brunner, supra (Hutchinson, J., Dissenting Opinion). The strategy employed by counsel, therefore, cannot be said to be so unreasonable that no lawyer would have chosen it.
Counsel's failure to request an alibi instruction after having introduced evidence of an alibi defense, however, was unreasonable. The Commonwealth's witness, Alice Maxwell, testified that Murphy, Brunner and she had looked around and burglarized a house "around noontime" on August 10, 1979. Marie Minotto was called as an alibi witness by Brunner's attorney and testified that on August 10, 1979, between noon and 12:30 p.m., she had observed Brunner working at an ice cream parlor at High and Franklin Streets in Pottstown. Counsel did not request a jury instruction regarding alibi evidence, and the trial court gave *69 none. The court's only reference to Marie Minotto's testimony was as follows:
"The defense called one witness, Miss Minotto, who is Larry Brunner's girlfriend. She remembered, by her testimony, August 10, 1979, because she had ice cream in his stand on that date, at his place of business."
After the court had instructed the jury, counsel made no request for further instructions regarding Brunner's alibi defense and did not object to the court's failure to give any instruction on the significance of alibi testimony.
The rule followed by the courts of this jurisdiction was stated in Commonwealth v. Bonomo, 396 Pa. 222, 151 A.2d 441 (1959) as follows:
The Commonwealth has the burden of proving every essential element necessary for conviction. If the defendant traverses one of those essential elements by evidence of alibi, his evidence will be considered by the jury along with all the other evidence. It may, either standing alone or together with other evidence, be sufficient to leave in the minds of the jury a reasonable doubt which, without it, might not otherwise exist. It will be the duty of the trial judge to carefully instruct the jury as to the relationship of the evidence of the prosecution and the evidence of the defendant as each bears upon the essential elements of the crime charged.
Id., 396 Pa. at 231-232, 151 A.2d at 446.[3] Where an alibi defense is presented, the trial court must instruct the jury that it should acquit if the alibi evidence, even if not wholly *70 believed, raises a reasonable doubt as to the presence of the defendant at the scene of the crime at the time when the offense was committed. "[S]uch an instruction is necessary due to the danger that the failure to prove the defense will be taken by the jury as a sign of the defendant's guilt." Commonwealth v. Pounds, 490 Pa. 621, 633-634, 417 A.2d 597, 603 (1980). A failure to give a specific alibi instruction, where warranted, is error requiring a new trial. Commonwealth v. Pounds, supra; Commonwealth v. Van Wright, 249 Pa.Super. 451, 378 A.2d 382 (1977). General instructions on the Commonwealth's burden of proving each element of a crime beyond a reasonable doubt is not an adequate substitute for a specific alibi instruction. Commonwealth v. Pounds, supra 490 Pa. at 634, 417 A.2d at 603. Similarly, a general charge on assessing the credibility of witnesses will not suffice. Commonwealth v. Van Wright, supra 249 Pa.Super. at 458, 378 A.2d at 386.
In the case sub judice, appellant's only witness had been an alibi witness. A correct jury instruction, therefore, was vital. Appellant's counsel, however, did not request such an instruction; and when the court gave none, counsel failed to object.
In the face of this obvious dereliction, appellant's counsel testified at the P.C.H.A. hearing that he didn't request a specific alibi instruction because he didn't believe the alibi witness. Neither he nor the Commonwealth has been able to explain how the failure to request an alibi instruction after the alibi witness had testified could reasonably be calculated to serve the best interests of counsel's client. The witness had testified; the alibi evidence was before the jury; and appellant was entitled to a specific instruction from the court regarding its significance. When the trial court failed to deliver the required instruction, counsel had a duty to request it to do so and, if the request was denied, to preserve the court's error by an appropriate objection. To fail in this respect was so unreasonable that it must be equated with constitutionally ineffective assistance.
The P.C.H.A. court, although apparently recognizing this deficiency in counsel's stewardship, refused relief because *71 "to now grant a new trial on this isolated issue of not requesting an alibi charge to the jury would be grievous error." We disagree. Appellant's only defense was alibi. Nevertheless, the jury was never told the significance of the evidence introduced to support this defense. This was the grievous error. No competent lawyer would have overlooked it.
Reversed and remanded for a new trial. Jurisdiction is not retained.
NOTES
[1] It was because of the prejudicial effect of this question and answer that a new trial was awarded to Murphy by the Superior Court. Commonwealth v. Brunner, supra.
[2] At the close of the Commonwealth's case, Brunner's counsel joined a motion for mistrial made on behalf of Murphy. It was argued that the prejudice to Murphy would also be imputed to Brunner. The trial court denied the motion for mistrial. Brunner's counsel did not argue this ruling on appeal, believing it had been waived by the failure to object at the time the question was asked and answered.
[3] The Pennsylvania Standard Jury Instruction is as follows:
Obviously the defendant cannot be guilty unless he was at the scene of the alleged crime. The defendant has offered evidence to show that he was not present at the crime but rather was at (________________). You should consider this evidence along with all the other evidence in the case in determining whether the Commonwealth has met its burden of proving beyond reasonable doubt that a crime was committed and that the defendant himself committed (or took part in committing) it. The defendant's evidence that he was not present, either by itself or together with other evidence, may be sufficient to raise a reasonable doubt of his guilt in your minds. If you have a reasonable doubt of the defendant's guilt you must find him not guilty. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368002/ | 475 P.2d 407 (1970)
John D. RITTER and Everett C. Johnston, Plaintiffs in Error,
v.
The STATE of Oklahoma, Defendant in Error.
No. A-15661.
Court of Criminal Appeals of Oklahoma.
September 23, 1970.
John Connolly, Oklahoma City, for plaintiffs in error.
G.T. Blankenship, Atty. Gen., Hugh H. Collum, Asst. Atty. Gen., for defendant in error.
MEMORANDUM OPINION
BUSSEY, Judge.
John D. Ritter and Everett C. Johnston, hereinafter referred to as defendants, were charged by Information with permitting a gaming table to be set up for gambling purposes on certain premises in Logan County, Oklahoma. They appeared initially before the Associate District Judge of Logan County on October 10, 1969, with counsel and at that time waived reading of the Information and entered pleas of not guilty. They posted surety bonds for bail.
*408 On October 16, 1969, the defendants appeared in court for the purpose of withdrawing their pleas of not guilty and entering pleas of guilty; whereupon the judge advised them that she would consider the recommendation of the District Attorney, but would not be bound thereby and asked the defendants if they still wished to withdraw their pleas of not guilty and enter pleas of guilty. The defendants did enter pleas of guilty and the District Attorney made the following recommendation which appears in the record at page 41:
"BY MR. GRAY: * * * I have talked with Mr. Tom Puckett who is acting for the State Crime Bureau and he has authorized me to make this recommendation to the Court and I make it in all good faith, he also authorized me for other action on the case which I will present after I make my recommendation. I think we have had good communications with the parties out of the club and so forth, I think that at this point according to all of the parties that this communication will take effect, I don't believe this will happen again in Logan County, at least according to the communications that have gone between us, we have had solid communications with the Crime Bureau, so in light of the authorization that the Crime Bureau has given me, and our communications there, this is with the agreement of said Crime Bureau, and the agencies involved on the raid, I would recommend the fine of $250.00 and half the costs for each defendant here, it would be the total cost on the total case.
BY THE COURT: I think the limitation of the fine of $200.00 as a matter of fact it is one to Two Hundred.
BY MR. CONNOLLY: I believe that's right Your Honor.
BY MR. GRAY: Then I would make my recommendations in accordance with that.
BY MR. CONNOLLY: That maximum fine is what we intended I had forgotten what that was.
BY MR. GRAY: I read it Your Honor, yes I would recommend the maximum fine."
The judge then took the matter under advisement until the 20th day of October, 1969, at which time the defendants were sentenced to pay fines of $200.00 and serve thirty day jail terms each.
Before judgment and sentence was pronounced, the judge stated that she had given considerable thought to the matter and could not go along completely with the recommendations of the District Attorney's office. At this point counsel for the defendants made the following statement which appears in the record at page 44:
"BY MR. CONNOLLY: When these cases were filed and I looked into them I concluded that the State would not have sufficient evidence to convict these men but both of them have business out of the State, Mr. Ritter in Los Angeles and Mr. Johnston in Illinois, and I, it was my suggestion that they enter a plea of guilty, more to dispose of the matter and so they would not have to stay here, but with the Court's indication, I think it is my fault, I assured them that in a misdemeanor that the Court would probably, or would follow the District Attorney's recommendation, if I am wrong on that it is not their fault, it is my fault for advising them that way, and if the Court should find not to follow the recommendation of this District Attorney, we would ask the Court to withdraw our plea of guilty and re-enter our plea of Not Guilty and have a trial.
Now it is not the fault of either one of these defendants, I'd have to assume responsibility for that, for I assured them that on a misdemeanor I would not have assured them on a felony, but on a misdemeanor I assured them that the Court would follow the recommendation, whatever the recommendation was of the District Attorney."
The court then refused the request to withdraw the pleas of guilty, and sentenced the defendants to pay fines of $200.00 and *409 serve thirty day jail terms each. A timely appeal has been perfected to this Court.
On March 18, 1970, the Attorney General filed a Motion to Dismiss this appeal for the reason that the defendants had left the jurisdiction of this Court without leave of this Court or the court below during the pendency of this appeal.
It is interesting to note that on the hearing on Application for Suspended Sentence, held on the 31st day of October, 1969, while defendants were on bond, defendants' counsel made the following statement, which appears in the record at page 46:
"BY MR. CONNOLLY: Your Honor there is one circumstance that might interest the Court in my application for suspended sentence, this building is a portable type building, moved onto the property, its on leased property. I got a call from a very fine young lawyer, John C. Harrington, there in Oklahoma City, and he had a client that wanted to buy the property. Mr. Johnston happened to call me last night from Chicago, I told him about it, and he said he would be very much interested. * * *" [Emphasis added].
In the Attorney General's Motion to Dismiss he makes the following requests:
"Wherefore, premises considered, defendant in error moves that the court order the plaintiffs in error to respond to this motion by affirming or denying the allegations herein; that in the event the allegations are denied that the court conduct an evidentiary hearing to make findings of fact on the allegations; that in the event the allegations are admitted or that no response is made within a reasonable time that this appeal be dismissed."[*]
In view of the fact that the trial judge knew and had been advised that the defendants had businesses in other states and was specifically advised that defendant Johnston was in Chicago, it is apparent that the trial court had no objection to their leaving the jurisdiction or she would have advised counsel to have the defendants return to the jurisdiction immediately and not depart therefrom without the permission of the court. For this reason, we are of the opinion that the Motion to Dismiss should be, and the same is hereby, denied.
From the foregoing recital of facts it is readily apparent that the District Attorney, State Crime Bureau and other agencies had negotiated with the defendants through their counsel and had strongly represented that the recommended punishment would be the maximum fine. Obviously, both the District Attorney and defense counsel labored under the mistaken belief that the trial court would undoubtedly follow the recommendation and the statement of defense counsel Connolly made in attempting to withdraw the pleas of guilty prior to the imposition of judgment and sentence, makes it abundantly clear that the defendants would not have entered pleas of guilty unless they were laboring under the same mistaken belief and had so been advised by counsel that the trial court would follow the recommendation of the District Attorney.
While the trial court was not obliged to follow the recommendation of the District Attorney we are of the opinion that her failure to allow the defendants to withdraw their pleas of guilty prior to the imposition of judgment and sentence when it was apparent that they had been misadvised by counsel, constituted an abuse of discretion and that the judgment and sentence rendered thereafter should be, and the same is hereby vacated.
In arriving at this conclusion, we observe that neither of the defendants' cases had been set for jury trial and the only delay *410 occasioned by their being allowed to withdraw their pleas of guilty would have been the four-day delay between October 16th and October 20th, 1969.
For all of the reasons above set forth, the judgments and sentences appealed from should be, and the same are hereby, reversed and remanded with directions that the trial court allow the defendants to withdraw their pleas of guilty heretofore entered and enter pleas of not guilty. Reversed and remanded with instructions.
BRETT, P.J., and NIX, J., concur.
NOTES
[*] In accordance with the request of the Attorney General, this Court directed that a response be filed to the Motion to Dismiss and a Response was accordingly filed admitting temporary absence from the jurisdiction. Nothing further was filed on behalf of the State. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368009/ | 106 Ariz. 266 (1970)
475 P.2d 250
Ben C. BIRDSALL, Judge of the Superior Court of the State of Arizona, in and for the County of Pima and Judge of the Juvenile Court of Pima County, Petitioner,
v.
PIMA COUNTY, a body politic, the Board of Supervisors of Pima County, and Thomas Jay, Dennis Weaver and James J. Murphy, Members of the Board of Supervisors of Pima County, Respondents.
No. 10094.
Supreme Court of Arizona, In Banc.
October 9, 1970.
*267 Molloy, Jones, Hannah, Trachta & Coolidge, Tucson, for petitioner.
Robert N. Hillock, Tucson, for respondents.
HAYS, Justice.
Petitioner, Judge of the Juvenile Court of Pima County, comes before this Court with a petition for special action urging this court to command respondent Board of Supervisors of Pima County to formally approve and put into effect petitioner's order fixing salaries for employees of the Juvenile Court of Pima County.
The following facts are undisputed. Petitioner, on February 4, 1970, met with the members of the respondent Board and advised them that he wished to submit a new salary schedule for employees of the Juvenile Court. This proposed schedule was delivered by petitioner to the Board on March 4, 1970 at which time petitioner urged the Board to act promptly on the matter. After receiving no communication from the Board, petitioner, on March 26, 1970 informed the Board by letter that unless an agreement was reached between petitioner and respondent Board in the meantime, petitioner would adopt the new schedule effective April 15, 1970. Subsequently, on April 13, 1970, petitioner entered an order putting the new salary schedule into effect. Respondent, on April 24, 1970, adopted a resolution ordering its Clerk to petition the State Tax Commission of Arizona for authority to make unanticipated and emergency expenditures for the balance of Pima County's fiscal year ending June 30, 1970. This petition included the increased salaries provided by petitioner's order. On May 20, 1970 the Commission granted respondent authority to exceed its budget for the items set forth in the petition including $18,900 for the increased salaries created by petitioner's order. The Board did not, however, approve and put into effect petitioner's order. Consequently, the employees of the Juvenile Court of Pima County remained on the salary schedule in effect prior to April 13, 1970.
The presiding judge of the juvenile court is empowered under 2 A.R.S. §§ 8-204 and 8-205 to appoint employees of the juvenile court and fix their salaries.[1] The power to appoint employees is set forth in § 8-204 which states:
"A. The judge presiding in the juvenile court may appoint a chief probation officer, a deputy probation officer and such additional deputy probation officers, not exceeding one for each fifty persons on probation, as he deems necessary. In counties of the first class the judge may appoint necessary office assistants."
*268 The power of the judge to fix the salaries of these appointed employees is set forth in § 8-205:
"The salary of the chief probation officer of the juvenile court in each county, his deputies, assistants and all other employees, shall be fixed by the judge presiding in the juvenile court, with the approval of the board of supervisors, and shall be a county charge." (Emphasis added).
In the instant case there is no dispute that Pima County is a county of the first class and that therefore the judge is authorized to appoint necessary office assistants in addition to the various probation officer positions set forth in § 8-204. Nor is there any dispute that the judge may fix the salaries of these employees under § 8-205. The dispute arises over the meaning of the phrase "with the approval of the board of supervisors" in § 8-205. In other words, what is the scope of the Board of Supervisors' authority in approving or disapproving the salaries fixed by the judge.
This Court decided a similar issue in Powers v. Isley, 66 Ariz. 94, 183 P.2d 880 (1947) where § 19-404, A.C.A., 1939, provided that the salaries of court reporters "* * * shall be fixed by the judge of the court with the approval of the board of supervisors of the county * * *." We held there that:
"The province of the Board of Supervisors in connection with the approval of the salary fixed by the judge as provided in § 19-404, is interpreted to be that the Board of Supervisors have the power to approve or disapprove the salary fixed by the judge for the court reporter. That in performing this duty the Board of Supervisors must exercise discretion, but they must act in a reasonable manner and not arbitrarily or capriciously in disapproving such salary. Neither must the judge in fixing the salary act arbitrarily or capriciously or unreasonably." 66 Ariz. at page 106, 183 P.2d at page 888.
More recently, in Mann v. County of Maricopa, 104 Ariz. 561, 456 P.2d 931 (1969) we quoted with approval the following language from Smith v. Miller, 153 Colo. 35, 384 P.2d 738 (1963):
"`We hold that the district judges of the Fourth Judicial District are empowered to fix the salaries of its employees. We further hold, in the absence of a clear showing that the acts of the judges in fixing such salaries were arbitrary and capricious and that the salaries so fixed are unreasonable and unjustified, that it is the ministerial duty of the county commissioners to approve them and to provide the means for payment of such salaries. We further hold that where a question is raised as to the reasonableness of the salaries fixed by the judges or whether their acts in respect thereto are arbitrary and capricious, the burden is on the Board to establish such facts by competent evidence.'" 104 Ariz. at page 565, 456 P.2d at page 935.
In Mann we held that judges of the superior court have the right to request that employees of the court be continued in employment after age seventy for a period of one year and that the Board of Supervisors had a ministerial duty to approve the request absent a clear showing that the judge acted unreasonably, arbitrarily and capriciously in making the request.
It is the opinion of this court that the rationale of Mann is applicable to the instant case. We hold that under § 8-205 the respondent Board had a ministerial duty to approve petitioner's order fixing new salaries for the employees of the Juvenile Court in the absence of a clear showing that petitioner acted unreasonably, arbitrarily and capriciously in fixing the salaries. If the Board of Supervisors makes an allegation that the judge acted unreasonably, arbitrarily and capriciously in fixing the salaries then an adversary hearing must be held to determine the matter. In the instant case, however, such a hearing is not necessary on the issue of the reasonableness of the salaries fixed since respondent has informed this Court that they are not taking issue with petitioner's order but *269 take issue only with the time he wants to implement it.
The only issue remaining before this Court, therefore, is whether respondent has the authority to take issue with date of implementation of petitioner's order. In Powers v. Isley, supra, we held that the Board of Supervisors does not "* * * by virtue of the authority for approval, have the right to reduce or increase the salary fixed by the judge of their own right." 66 Ariz. 94, at page 104, 183 P.2d 880 at page 886. See also: Milburn v. Burns, 1 Ariz. App. 147, 400 P.2d 354 (1965). This does not mean, however, that the Board of Supervisors may not take issue with the date of implementation of a judge's order fixing salaries. The date of implementation may go to the question whether the judge's order fixing the salaries is unreasonable, arbitrary and capricious. Although respondent Board could not change the date of implementation "of their own right" they can take issue with it for this purpose.
It may be unreasonable, arbitrary and capricious for a judge to order into effect a new salary schedule during the middle of the fiscal year instead of setting its effective date as the beginning of the next fiscal year. An orderly fiscal policy is a governmental necessity and to order an increase in excess of budget provisions might be unreasonable, arbitrary and capricious. It is unnecessary for us to decide this issue, however, since respondent in his response does not raise the issue. The Board of Supervisors by obtaining authorization from the Tax Commission to exceed its budget to comply with petitioner's order has further mooted the issue.
Petitioner's request for relief is granted and respondent is ordered to approve and put into effect petitioner's salary schedule effective April 13, 1970.
LOCKWOOD, C.J., STRUCKMEYER, V.C.J., and UDALL and McFARLAND, JJ., concur.
NOTES
[1] Effective August 11, 1970, sections 8-201 to 8-239 were repealed by Laws 1970, Ch. 223, § 1. It is now provided in section 8-203, subsec. E, that the salaries of juvenile court employees "in each county shall be fixed by the county board of supervisors." This change was not in effect at the time this action was brought and is therefore not considered in this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265706/ | 341 Pa. Super. 61 (1985)
491 A.2d 148
Joseph SCOPPA, Jr., and Malfalda R. Scoppa, his wife, Carl M. Thompson, Jr., and Sandra L. Thompson, his wife, Guy H. Reeder and Agnes M. Reeder, his wife,
v.
John F. MYERS, Jr. and Sandra Myers, his wife.
Appeal of: Joseph SCOPPA, Jr., and Malfalda R. Scoppa, his wife, Guy H. Reeder and Agnes M. Reeder, his wife.
Supreme Court of Pennsylvania.
Submitted October 17, 1984.
Filed March 29, 1985.
Petition for Allowance of Appeal Denied August 27, 1985.
*62 Malcolm S. Mussina, Williamsport, for appellants.
Carl M. Thompson, Jr., Williamsport, appellee, in propria persona.
Norman M. Lubin Williamsport, for Myers, appellees.
Before WIEAND, DEL SOLE and POPOVICH, JJ.
WIEAND, Judge:
The plaintiffs in this equity action[1] are the owners of adjacent lots, all of which are bounded on the south and rear by a perpendicular twenty foot wide alley. The defendants, John F. Myers, Jr. and Sandra Myers, husband *63 and wife, own a lot which adjoins the twenty foot wide alley on the south. By deed dated August 15, 1980, the defendants acquired title to the bed of the twenty foot alley. They sent written notice to plaintiffs demanding that they cease and discontinue any further use of the alley. They then built a retaining wall, filled in behind the retaining wall to raise the grade of the alley, and planted trees and shrubbery. This has made it impossible for the Scoppas to use the alley as a means of ingress and egress to and from the rear of their property, and has impeded the use thereof by the remaining owners. Plaintiffs responded with demands of their own. When they did not achieve the desired result, litigation followed.
The trial court found that plaintiffs enjoyed an easement or right of way over the twenty foot alley. The court found further, however, that they could achieve access to the rear of their properties if the alley were reduced in width to fifteen feet. The court decreed, therefore, that the Myers should restore a fifteen foot alley. Instead of requiring that the retaining wall be removed and the alley restored to its original grade, moreover, the court directed removal of a fourteen foot section of the wall. This was based on its belief that the removal of the fourteen foot section would permit adequate access for the uses then being made of the dominant tenements.[2] Exceptions were dismissed, a final decree was entered, and plaintiffs appealed. We reverse and remand.
The right of way enjoyed by the plaintiffs was not an easement by necessity. It was an easement created by implication when the prior, common grantor conveyed lots bounded by a twenty foot alley as shown on a subdivision plan. In a conveyance of land where a street or roadway is named as a boundary, the grantee acquires an easement to the use of the street or roadway so long as the grantor owned the fee to the servient tenement. Jones v. Sedwick, *64 383 Pa. 120, 123-124, 117 A.2d 709, 711 (1955); Maier v. Walborn & High, 84 Pa.Super. 522 (1925). See also: McAndrews v. Spencer, 447 Pa. 268, 270-271, 290 A.2d 258, 259 (1972); Quicksall v. City of Philadelphia, 177 Pa. 301, 35 A. 609 (1896); Hoover v. Frickanisce, 169 Pa.Super. 443, 82 A.2d 570 (1951). Because it arises by implication and not by necessity, the easement encompasses the entire right of way. Jones v. Sedwick, supra; Kinzey v. Marolt, 288 Pa.Super. 426, 432 A.2d 234 (1981).
In the instant case, the plaintiffs had an easement over a twenty foot right of way. It was error, therefore, to limit their use to only fifteen feet thereof. Kinzey v. Marolt, supra. Similarly, it was error to permit partial obstruction thereof to continue. Although the trial court obviously attempted to achieve a compromise solution satisfactory to all parties, that solution was not consistent with applicable legal principles. It was achieved at the expense of plaintiffs' legal right to an alley twenty feet in width.
Reversed and remanded for the entry of a decree consistent with the foregoing opinion. Jurisdiction is not retained.
NOTES
[1] The plaintiffs are identified in the complaint as Joseph Scoppa, Jr. and Malfalda R. Scoppa, his wife; Carl M. Thompson, Jr. and Sandra L. Thompson, his wife; and Guy H. Reeder and Agnes M. Reeder, his wife.
[2] The court suggested that at some time in the future, depending upon the needs of the occasion, it might use its equitable powers to require removal of the entire retaining wall. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265713/ | 341 Pa. Super. 101 (1985)
491 A.2d 169
ORMOND REALTY, Agent for Angelina DeBlasiis, Appellee,
v.
John R. NINNIS and Anna C. Ninnis, Appellants.
John R. NINNIS and Anna C. Ninnis, Appellants,
v.
Angelina DeBLASIIS, Appellee.
Supreme Court of Pennsylvania.
Argued April 25, 1984.
Filed March 29, 1985.
Petition for Allowance of Appeal Denied August 5, 1985.
*102 Gordon W. Gerber, Philadelphia, for appellants.
Andrew J. Damico, Media, for Ormond, appellee.
Before McEWEN, BECK and CERCONE, JJ.
*103 BECK, Judge:
On August 15, 1979, appellants John and Anna Ninnis entered into a written agreement of sale with appellee Angelina DeBlasiis for the purchase of appellee's real estate. Appellee seller was represented in the agreement by her agent, appellee Ormond Realty. The agreement, prepared by appellee agent, contained a mortgage contingency clause which required that appellants secure a mortgage commitment by October 20, 1979. The clause provided as follows:
"4. MORTGAGE CONTINGENCY (1-79) this sale and settlement hereunder are NOT conditional or contingent in any manner upon the sale or settlement of any other real estate NOR subject to any mortgaging or financing except as hereinafter provided.
(a) Term and amount of mortgage loan required by Buyer: thirty years, $40,000.00.
(b) Type mortgage and interest rate required by Buyer: Type conventional. Interest Rate 10 1/2% however, buyer agrees to accept the interest rate as may be committed by the mortgage lender (not to exceed the maximum permissible interest rate).
(c) Commitment date for approval of the mortgage: October 20th, 1979.
(d) Mortgage loan application shall be made through the office of Ormond Realty 3801 State Road., who for the purpose of negotiating for the said mortgage loan, shall be considered the agent for the Buyer, and if said mortgage loan cannot be obtained, this agreement shall be NULL AND VOID and all deposit moneys shall be returned to the Buyer on or before date for settlement as provided herein, subject however to the provisions in paragraphs # 4(e) and # 4(f).
(e) Buyer shall make a completed application to a responsible mortgage lending institution for the aforementioned mortgage loan, through the office of the agent named in paragraph # 4(d), within ten (10) days from the Seller's approval hereof. Should the Buyer fail to make such *104 completed application within the specified (10) days, it shall be at the option of the Seller within five (5) days thereafter to:
(1) Declare this agreement NULL AND VOID at which time, all moneys paid on account will be forfeited to Seller as liquidated damages, or
(2) In absence of written notice to the Buyer, by the Seller, declaring this agreement, NULL AND VOID, the condition and contingency herein provided for in paragraphs # 4(a) through # 4(f) together with any other mortgage loan contingencies that may be herein or endorsed hereto, shall no longer prevail, and this agreement shall remain effective according to its terms in the same manner as if the condition and contingency were not a part hereof.
(f) Seller or agent must receive a written commitment, valid until the date of settlement, for the mortgage loan, on or before the date as specified in paragraph # 4(c). If the said commitment is not furnished with the terms as specified herein, or on other terms accepted in writing by the Buyer, on or before the specified date, Seller shall have the option, at that date, or any other time thereafter, during the term of this agreement, until, but not beyond the date of receipt of the commitment by the Seller, or Agent, to declare this agreement NULL AND VOID, by written notice to the Buyer of his decision to cancel, at which time all deposit moneys paid on account shall be returned to the Buyer, subject to the payments required, if any, provided for in paragraph # 7(b), 1, 2, and 3."
Appellants gave Ormond Realty a deposit of $2,000 in cash and a note for $4,600.
Appellants made a good faith effort to obtain a mortgage which would conform with the specifications in the agreement, but were unable to do so by the commitment date, October 20, 1979. On November 2, 1979, appellants wrote to Ormond Realty and stated that appellants' failure to secure a mortgage by the commitment date meant that the *105 agreement was null and void. Appellants requested the return of the deposit moneys; no written response was received, but Ormond Realty told appellants in conversations that they, appellants, were still obligated under the agreement. Sometime after November 28, 1979, Ormond Realty sent appellants a mortgage commitment it had arranged. On December 11, 1979, appellant's counsel sent Ormond Realty a written request for the return of the deposit. On December 14, 1979, Ormond Realty entered judgment against appellants on their note. On December 20, appellants received a notice of the judgment, and on December 26, Ormond Realty informed appellants that their note and cash deposits would not be returned to them.
Appellees scheduled a settlement date on January 18, 1980, but appellants did not attend the settlement, contending that the agreement of sale was null and void as of October 20, 1979. Appellants brought an action in equity for the return of all deposit moneys, and filed a petition to strike or open judgment on the $4,600 note. These cases were consolidated. The lower court found for appellees and held that under the agreement of sale, only the seller had the power to declare the agreement null and void. Appellants filed exceptions which were denied.
In this appeal, appellants claim that the agreement became null and void when after making a bona fide effort they failed to obtain a mortgage commitment by October 20, 1979. We agree, and for the reasons stated below, reverse the order of the lower court.
It is well established that, in interpreting the intent of parties in a written contract, when the words are clear and unambiguous, the intent is to be determined only from the express language of the agreement. Woytek v. Benjamin Coal Co., 300 Pa.Super. 397, 446 A.2d 914 (1982); Litwack v. Litwack, 289 Pa.Super. 405, 433 A.2d 514 (1981). A written agreement will be construed against the party preparing it. Central Transportation v. Board of Assessment Appeals of Cambria County, 490 Pa. 486, 417 A.2d *106 144 (1980); Longenecker v. Matway, 315 Pa.Super. 411, 462 A.2d 261 (1983).
We have examined the mortgage contingency clause in the parties' agreement of sale and note that paragraph 4(d) provides that the failure to obtain a mortgage commitment by October 20, 1979 makes the agreement null and void. Paragraph 4(d) does not contain the additional condition that the seller must elect to treat the agreement as null and void. According to paragraph 4(d), the agreement becomes a nullity simply if a mortgage is not secured by the commitment date: "[I]f said mortgage loan cannot be obtained this agreement shall be NULL AND VOID and all deposit moneys shall be returned to the Buyer."[1] (emphasis added). It is clear that the clause in question is self-executing; the agreement is automatically voided if a mortgage commitment is not secured by the commitment date.
Appellees argue, however, that paragraph 4(d) is expressly subject to paragraphs 4(e) and (f), and claim that paragraph 4(f) restricts to the seller only the right to declare the agreement a nullity. We do not agree. Paragraph 4(f) merely gives the seller the exclusive right to void the agreement if the seller does not receive from the buyer by the commitment date a written commitment valid until the settlement date. All paragraph 4(f) provides is that if appellants obtain a mortgage by the commitment date, but then fail to give written notice to appellees by the commitment date, appellees would at that point have an exclusive right to void the agreement.
It is stipulated that appellants made a timely application to obtain a mortgage commitment by the commitment date. Since appellants made a bona fide effort to secure a mortgage commitment by October 20, 1979, but failed to obtain one, the agreement automatically became null and void by operation of paragraph 4(d). Therefore, the point at which appellees would have had the exclusive right to void the agreement was never reached. See generally Newman v. *107 Sablosky, 268 Pa.Super. 85, 407 A.2d 448 (1979); Tieri v. Orbell, 192 Pa.Super. 612, 162 A.2d 248 (1960).
Since we conclude that the agreement became a nullity on October 20, 1979, we need not address the argument offered by appellees that the mortgage they obtained for appellants after November 28, 1979, substantially complied with the requirements of the agreement of sale.
Accordingly, the order of the lower court is reversed. The agreement is null and void. The appellees shall return to appellants the $2,000 deposit money and the judgment entered by appellees shall be vacated.[2]
NOTES
[1] The commitment date, October 20, 1979, appears in Clause 4(c).
[2] We have not made a provision for payment of interest to appellants. While it is true that interest on principal is awarded in cases where money has been unjustly or unlawfully withheld, Peyton v. Margiotti, 398 Pa. 86, 156 A.2d 865 (1959); Arcuri v. Weiss, 198 Pa.Super. 506, 608, 184 A.2d 24 (1962), the facts of this case indicate a bona fide dispute as to the meaning of a contractual clause. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1095490/ | 504 So. 2d 786 (1987)
Jerome Perry WARING, Appellant,
v.
STATE of Florida, Appellee.
No. 85-2600.
District Court of Appeal of Florida, Second District.
March 25, 1987.
James Marion Moorman, Public Defender and John T. Kilcrease, Jr., Asst. Public Defender, Bartow, for appellant.
Robert A. Butterworth, Atty. Gen., Tallahassee and Gary O. Welch, Asst. Atty. Gen., Tampa, for appellee.
PER CURIAM.
Appellant, Jerome Perry Waring, appeals his judgment and fifteen-year sentence for dealing in stolen property. The issues before this court are whether the trial court erred in revoking appellant's probation and *787 whether it was error to sentence appellant without a sentencing guidelines scoresheet or written reasons for departure. We affirm appellant's conviction and remand to the trial court for resentencing.
The affidavit of violation of probation alleged that appellant violated the conditions of his probation by: (1) failing to file monthly reports, (2) failing to pay costs of supervision, (3) absconding from probation, (4) breaking into a school, (5) theft of meat there, (6) breaking into a home, (7) theft of a television there, (8) burglary of a liquor truck, and (9) failing to pay ordered court costs.
We find that the only allegation supported by evidence is the theft of meat from the school. Appellant, after being advised of his rights, confessed to a police officer that he helped load the stolen meat. The confession, in itself, is sufficient for revocation of probation purposes. The level of evidence required to support a revocation of probation does not call for evidence sufficient to support a criminal conviction. James v. State, 452 So. 2d 1048 (Fla.2d DCA 1984), State ex rel. Russell v. McGlothin, 427 So. 2d 280 (Fla. 2d DCA 1983).
We strike the invalid reasons for revocation of appellant's probation and affirm the trial court's order. See Smith v. State, 380 So. 2d 1175 (Fla. 4th DCA 1980).
In view of the trial court's failure to file a sentencing guidelines scoresheet and to provide written reasons for departure from the guidelines, we remand this action for resentencing. State v. Jackson, 478 So. 2d 1054 (Fla. 1985).
LEHAN, A.C.J., SANDERLIN, J., and BOARDMAN, EDWARD F. (Ret), J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1726353/ | 970 So. 2d 836 (2007)
COOMBS
v.
STATE
No. 3D07-2440.
District Court of Appeal of Florida, Third District.
November 16, 2007.
Decision without published opinion. Mand. denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/808779/ | No. 11-4222-cv
AIG v. Guterman
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 TO 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 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in
the City of New York, on the 19th day of September, two thousand twelve.
PRESENT: GUIDO CALABRESI,
SUSAN L. CARNEY,
Circuit Judges.*
_____________________________________
AMERICAN INTERNATIONAL GROUP,
INC. AMENDED AND RESTATED
EXECUTIVE SEVERANCE PLAN,
Plaintiff –Cross-Defendant–Counter-Defendant–Appellee,
v. No. 11-4222-cv
STEVEN GUTERMAN,
Defendant–Cross-Claimant–Counter-Claimant–Appellant.
_____________________________________
FOR APPELLANT: Paul W. Mollica (Wayne N. Outten, on the brief), Outten
& Golden LLP, Chicago, IL.
*
The third judge originally assigned to the panel was unable to hear the case
because of a health issue. The two remaining members of the panel, who are in
agreement, have decided the case. See 28 U.S.C. § 46(d); 2d Cir. IOP E(b); United
States v. Desimone, 140 F.3d 457, 458–59 (2d Cir. 1998).
FOR APPELLEE: Patrick W. Shea (Marc E. Bernstein, on the brief), Paul
Hastings LLP, New York, NY.
Appeal from the United States District Court for the Southern District of
New York (Laura Taylor Swain, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of the district court is AFFIRMED.
Steven Guterman, a former executive at American International Group, Inc.
(“AIG”), appeals from the District Court’s award of summary judgment to the AIG
Amended and Restated Executive Severance Plan (the “Plan”) in this ERISA
benefits case. We assume the parties’ familiarity with the facts and the record of
prior proceedings.
From 2001 to 2009, Guterman served as a Senior Managing Director and the
Head of Global Business Development for a division of AIG known as AIG
Investments, and, concurrently, as a Vice President of AIG, the parent organization.
In September 2009, as part of a major reorganization, AIG offered Guterman the job
of Global Head of Retail Sales in place of his previous position. The newly-offered
position carried less responsibility than Guterman had enjoyed in his prior roles
and promised reduced (but still substantial) compensation. Guterman did not
accept the new position by the deadline set by AIG, and then left AIG’s employ.
Whether his employment ended pursuant to a termination (as Guterman contends)
or a resignation (as AIG contends) determines Guterman’s entitlement to severance
benefits under the Plan.
2
The Plan is a so-called “top hat” plan, meaning primarily that it establishes
the terms on which the company will make certain deferred compensation
payments (here, severance payments) to highly-compensated executives. See
generally Demery v. Extebank Deferred Comp. Plan (B), 216 F.3d 283, 286-87 (2d
Cir. 2000). Such plans are exempt from many of ERISA’s provisions, and
administrators of such plans are not subject to ERISA’s fiduciary responsibility
obligations. Id. The Plan at issue here assigns the role of administrator to the
Compensation and Management Resources Committee (the “Plan Administrator”) of
AIG’s board of directors. It expressly grants the Plan Administrator authority to
interpret the Plan “in its sole discretion.” Plan § VII.A (Ex. 5.A to Bernstein Decl.,
at 9).
After the events leading up to Guterman’s departure, the Administrator
determined that Guterman had resigned, and, accordingly, denied Guterman
severance benefits under the Plan. Guterman sued. On summary judgment, the
district court upheld the Administrator’s determination, which it examined under
an “arbitrary and capricious” standard of review.
In an ERISA benefits appeal, we review the district court’s grant of summary
judgment de novo, and apply the same legal standards as are required of the
district court on its review of a plan administrator’s determinations. Hobson v.
Metro. Life Ins. Co., 574 F.3d 75, 82 (2d Cir. 2009). When an ERISA plan explicitly
vests its administrator with discretion to interpret the plan, federal courts may
ordinarily overturn the administrator’s benefits determination only upon a finding
3
that the determination is arbitrary and capricious. Id.; see also Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Guterman maintains, however, that
with respect to top hat plans – particularly those administered by entities within
the corporate structure, which in some respect operate under an inherent conflict of
interest – we should apply a less deferential standard of review, even when the plan
expressly vests the administrator with discretion to interpret its terms. This is a
matter of some debate in the circuit courts of appeal. Compare Goldstein v.
Johnson & Johnson, 251 F.3d 433, 441-44 (3d Cir. 2001) (holding Firestone Tire
analysis inapplicable to top hat plans), with Comrie v. IPSCO, Inc., 636 F.3d 839,
842 (7th Cir. 2011) (applying Firestone Tire and rejecting Goldstein’s analysis). We
have not previously addressed this question head-on. See Paneccasio v. Unisource
Worldwide, Inc., 532 F.3d 101, 108-09 (2d Cir. 2008) (applying arbitrary and
capricious review to administrator’s determination to terminate top hat plan
without examining whether a different standard of review might apply). We do not
reach this question here, however, because, even making a de novo determination
on the administrative record, we reach the same conclusion as did the
Administrator.
The record provides ample grounds for concluding that Guterman’s departure
from AIG constituted a resignation for purposes of the Plan. As a part of the
reorganization, AIG was willing to continue Guterman’s employment. It offered
Guterman a substantial position, albeit one with less responsibility and lower
compensation. Guterman had sufficient opportunity to accept the newly-offered
4
position. He failed to do so by the deadline reasonably established by AIG, and
which had already been extended once on Guterman’s request. Moreover, the Plan
expressly precludes departing employees from asserting constructive discharge in
support of a severance benefits claim. It also provides that only those employees
with the rank of Senior Vice President – which Guterman did not have – maintain
eligibility for severance benefits when resigning for “Good Reason” (a term defined
by the Plan to include “[a] diminution in the Eligible Employee’s duties or
responsibilities” or a “material reduction” in base salary or bonus opportunity).
Plan §§ IV, IV.K (Ex. 5.A to Bernstein Decl., at 2, 8). Applying these Plan terms to
the undisputed facts, we too conclude that Guterman “resigned,” making him
ineligible for a Plan severance payment. He could have remained at AIG in a lesser
role, yet he failed to accept the offered position by an established deadline.
Guterman’s argument that he had been inadequately informed of the specifics of
the new job is beside the point: the job he was offered had a title and compensation
terms, and was his to accept or reject. By his actions, he rejected it.
For the foregoing reasons, the judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
5 | 01-03-2023 | 09-19-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/2265694/ | 163 Cal. App. 4th 669 (2008)
THE PEOPLE, Plaintiff and Appellant,
v.
JEFFREY GARRETT MAUCH, Defendant and Respondent.
No. G038602.
Court of Appeals of California, Fourth District, Division Three.
June 3, 2008.
*672 Tony Rackauckas, District Attorney, and Gregory J. Robischon, Assistant District Attorney, for Plaintiff and Appellant.
Marylou Hillberg, under appointment by the Court of Appeal, for Defendant and Respondent.
OPINION
ARONSON, J.
The district attorney challenges the trial court's order reducing Jeffrey Garrett Mauch's conviction, following a guilty plea, for felony cultivation of marijuana (Health & Saf. Code, § 11358) to a misdemeanor. We agree the trial court lacked authority to reduce the offense from a felony to a misdemeanor, and we therefore vacate defendant's plea and direct the trial court to reinstate the charge as a felony.
*673 I
FACTUAL AND PROCEDURAL BACKGROUND
Acting on an anonymous tip, police investigators discovered 19 ounces of marijuana and smoking paraphernalia in Mauch's home, plus a large marijuana plant, nutrients, fertilizers, hydroponic cultivation equipment, and marijuana cultivation textbooks. The prosecutor charged Mauch and his stepson, Shawn Thorin, with marijuana possession, a misdemeanor (Health & Saf. Code, § 11364, subd. (c)), and marijuana cultivation, a felony. After Mauch and Thorin moved to exclude statements each had made to the police, the trial court severed their trials, proceeding first with Mauch's.
The trial court empaneled a jury before the noon recess. Following informal discussions with the court during the recess, defendant agreed to plead guilty over the prosecutor's objection. The trial court accepted defendant's plea, which included defendant's admission as the factual basis for the plea: "[O]n 11/19/05, I willfully & unlawfully aided and abetted S. Thorin in the cultivation of marijuana and in the possession of more than one ounce of marijuana." Another term in the guilty plea form stated, with respect to the marijuana cultivation charge, "Count 1 reduced to a misdemeanor."
After defendant waived both arraignment on the plea and preparation of a probation and sentencing report, the trial court proceeded to sentencing. The court "designate[d] the maximum potential punishment" as "365 days in the Orange County jail thereby making count 11358 [sic] a misdemeanor by virtue of the court's indication of a maximum potential sentence." The court proceeded to suspend imposition of sentence for three years, ordering informal probation instead. Among the terms and conditions of probation, the court included a $500 fine.
The deputy district attorney objected to the court's disposition, arguing, "I think the appropriate result in this case if Mr. Mauch is to plead is that he be given some kind of sentence, then at the end of that sentence or ... probation[,] he comes back pursuant to Penal Code [section] 1203.4 for early termination and expungement. I think that is within the court's power. [¶] I think what we're doing today ... is in fact illegal...." The trial court overruled the objection, concluded sentencing, and the district attorney now appeals.
*674 II
DISCUSSION
(1) The district attorney contends the trial court lacked authority to reduce the felony marijuana cultivation offense to a misdemeanor. We agree. Health and Safety Code section 11358 provides: "Every person who plants, cultivates, harvests, dries, or processes any marijuana or any part thereof, except as otherwise provided by law, shall be punished by imprisonment in the state prison." (2) Any crime punishable by death or incarceration in a state prison is a felony. (Pen. Code, § 17, subd. (a); all further undesignated section references are to this code.) (3) "Fixing the penalty for crimes is the province of the Legislature, which is in the best position to evaluate the gravity of different crimes and to make judgments among different penological approaches." (People v. Martinez (1999) 76 Cal. App. 4th 489, 494 [90 Cal. Rptr. 2d 517] (Martinez).) Phrased differently: "The definition of crime and the determination of punishment are foremost among those matters that fall within the legislative domain." (People v. Mills (1978) 81 Cal. App. 3d 171, 176-177 [146 Cal. Rptr. 411]; accord, Tracy v. Municipal Court (1978) 22 Cal. 3d 760, 765 [150 Cal. Rptr. 785, 587 P.2d 227] ["the Legislature has the power and duty to define and classify crimes and offenses"].) Because the Legislature has classified cultivation of marijuana as a felony without providing for alternate punishment, the trial court exceeded its jurisdiction in purporting to reduce the offense to a misdemeanor.
(4) The trial court's reliance on section 17, subdivision (b), was misplaced. That provision invests the trial court with discretion to treat a felony "punishable ... by imprisonment in the state prison or by fine or imprisonment in the county jail" as a misdemeanor in certain circumstances. (§ 17, subd. (b).) The Legislature's use of the disjunctive "or" establishes that subdivision (b) only applies to offenses, known as "wobblers" (People v. Statum (2002) 28 Cal. 4th 682, 685 [122 Cal. Rptr. 2d 572, 50 P.3d 355]), for which the Legislature has authorized alternative punishment besides state prison incarceration. (See People v. Superior Court (Feinstein) (1994) 29 Cal. App. 4th 323, 329 [34 Cal. Rptr. 2d 503] [trial court "may only reduce an offense to a misdemeanor if it is a felony-misdemeanor (`wobbler'), which may be prosecuted as either a felony or a misdemeanor"].) Absent alternate punishment authorized by statute, a trial court "has no power to reduce a straight felony to a misdemeanor." (Id. at p. 330; see People v. Mendez (1991) 234 Cal. App. 3d 1773, 1779, fn. 5 [286 Cal. Rptr. 216].) The trial court may not accept a plea agreement conditioned upon such a reduction. (People v. Beebe (1989) 216 Cal. App. 3d 927, 931 [265 Cal. Rptr. 242] ["Since the *675 offense was not alternately punishable by a fine or imprisonment in the county jail, the trial court had no power to authorize the future reduction of this felony to a misdemeanor under section 17."].) In sum, section 17, subdivision (b), does not itself authorize alternative punishment for any particular felony; it only identifies the circumstances where the trial court may reduce a felony to a misdemeanor when authorized by the Legislature for that offense. (Feinstein, supra, 29 Cal.App.4th at p. 330; see § 17, subd. (b)(1)-(5) [detailing circumstances].) Accordingly, section 17 does not furnish grounds for the trial court's purported reduction here.
(5) Nor does section 18.[1] By providing for incarceration in the county jail instead of prison, section 18 authorizes a reduction to a misdemeanor for certain felonies even though the Legislature did not provide for misdemeanor treatment in the statutory provisions defining those particular crimes. Because the Legislature has not elsewhere expressly declared any of these particular felonies may qualify as misdemeanors, section 18 creates, to coin a phrase, "stealth wobblers." Section 18's misdemeanor option, however, is limited to felonies the Legislature has specified are punishable by imposition of a fine as an alternative to state prison. (People v. Isaia (1989) 206 Cal. App. 3d 1558, 1564 [254 Cal. Rptr. 500] (Isaia).) Crimes falling in this category are relatively rare, but they exist. (See, e.g., §§ 107 [escape from a reformatory or state hospital], 148.3, subd. (b) [false report of an emergency], 337b [point shaving in an athletic contest].)
(6) In Isaia, the defendant contended section 18 extends the option of misdemeanor treatment to all felonies that do not specify a term or range of years in the state prison as punishment. (Isaia, supra, 206 Cal.App.3d at p. 1563.) The first clause of section 18 fixes a range of 16 months or two or three years as the term for felonies that do not otherwise identify a determinate prison sentence. As Isaia explained, the "provided however" language that commences the second clause of section 18 has a limiting function, restricting the availability of the second clause's misdemeanor option to felonies that do not specify a period for state prison incarceration but provide for a fine as alternate punishment.[2] (Isaia, at p. 1564.) Thus, section 18, by *676 its terms, simply "does not apply to felonies, such as the felony of which defendant was charged, that do not contain an alternative punishment of a fine." (Isaia, at p. 1564 [the defendant there possessed drugs in a prison camp, violating § 4573.6].) Accordingly, as construed in Isaia, section 18 "clearly allows the court to reduce felonies to misdemeanors only when the felony is punishable in the alternative by a prison term or fine." (Isaia, at p. 1564, first italics added.) Defendant does not challenge the holding in Isaia, and we perceive no reason to chart a new interpretation of the statute. Consequently, because Health and Safety Code section 11358, like Penal Code section 4573.6 in Isaia, fails to provide for a fine as a punishment in lieu of state prison, section 18 does not authorize the trial court's ruling here.
(7) Defendant relies on sections 672 and 1203.1, but these sections do not change the fact the Legislature has proscribed violation of Health and Safety Code section 11358 as a felony offense, without also prescribing alternate, misdemeanor punishment. Section 672 authorizes the trial court to impose a fine as additional punishment on every misdemeanor or felony conviction.[3] (See People v. Breazell (2002) 104 Cal. App. 4th 298, 304 [127 Cal. Rptr. 2d 901] [§ 672 serves as a "catchall" provision, applicable to all misdemeanors and felonies].) Because section 672 authorizes additional rather than alternate punishment, it falls outside the terms of sections 17 *677 and 18, both of which, as discussed, require alternate punishment as a precondition for a trial court's discretion to reduce a felony to a misdemeanor.
(8) Defendant suggests section 1203.1 provides for alternate punishment, in practice, when the trial court requires payment of a fine or imprisonment in the county jail as a condition of probation.[4] Section 17, subdivision (b)(3), lends superficial support to defendant's position. Under subdivision (b)(3), an offense "is a misdemeanor for all purposes ... [¶] ... [¶] [w]hen the court grants probation to a defendant without imposition of sentence and at the time of granting probation, or on application of the defendant or probation officer thereafter, the court declares the offense to be a misdemeanor."
(9) The trial court may not, however, declare a crime to be a misdemeanor when the Legislature has not authorized misdemeanor punishment. Section 17, subdivision (b), recognizes as much when it authorizes a reduction of a felony to a misdemeanor only if the offense is "punishable, in the discretion of the court, by imprisonment in the state prison or by fine or imprisonment in the county jail...." (Italics added.) Section 18 similarly requires that a felony be "punishable" in alternate ways before a court may reduce it to a misdemeanor.
(10) Defendant's reliance on the trial court's discretion to impose a fine or county jail incarceration under section 1203.1 is therefore misplaced. Simply put, under section 1203.1, any fine or county jail term the trial court imposes is not imposed as punishment, but rather as a condition of probation. (See League of Women Voters of California v. McPherson (2006) 145 Cal. App. 4th 1469, 1481 [52 Cal. Rptr. 3d 585] ["The defendant who has been placed on probation, therefore, is imprisoned by the court in a local facility as a condition of probation, not as a result of the conviction of a felony."].) Indeed, as stated in section 1203.1, the trial court's authority to grant probation arises only when it "suspend[s] the imposing or the execution of the sentence...." (11) A trial court's discretion to suspend imposing the punishment the Legislature has authorized does not empower the court to reclassify the crime in a manner the Legislature has not authorized. To do so oversteps constitutional bounds, violating the prerogative of a coordinate branch. In short, the Legislature retains sole authority to classify crimes. (Martinez, supra, 76 Cal.App.4th at p. 494.)
*678 III
DISPOSITION
The judgment is reversed. We vacate defendant's guilty plea and remand with directions to the trial court to reinstate the felony marijuana cultivation charge.
Bedsworth, Acting P. J., and Moore, J., concurred.
NOTES
[1] Section 18 provides: "Except in cases where a different punishment is prescribed by any law of this state, every offense declared to be a felony, or to be punishable by imprisonment in a state prison, is punishable by imprisonment in any of the state prisons for 16 months, or two or three years; provided, however, every offense which is prescribed by any law of the state to be a felony punishable by imprisonment in any of the state prisons or by a fine, but without an alternate sentence to the county jail, may be punishable by imprisonment in the county jail not exceeding one year or by a fine, or by both."
[2] Isaia explained the "provided however" language must be construed as having a limiting function to avoid rendering the phrase "surplusage." (Isaia, supra, 206 Cal.App.3d at p. 1564 [noting "constructions which would make part of the statute surplusage should be avoided"].) The word "however" would be superfluous if the Legislature intended the second clause's misdemeanor option to apply unreservedly to the category of felonies identified in the first clause, i.e., "those offenses `declared to be a felony, or to be punishable by imprisonment in a state prison.'" (Ibid.) "[H]owever" thus points to a narrowing of this first category of felony offenses, a narrowing the second clause accomplishes by specifying that only those "felonies `punishable by imprisonment in any of the state prisons or by a fine ...'" are eligible for county jail diversion as misdemeanors. (Ibid.)
The Attorney General also noted in Isaia that the Legislature had deleted a comma in a former version of section 18's second clause, lending support to the conclusion the Legislature intended the clause to apply to felonies that included state prison incarceration or a fine as alternative punishments. (See Isaia, supra, 206 Cal.App.3d at pp. 1562-1563.) The Attorney General observed: "`It is not without significance that a comma is omitted in section 18 after the word "prisons" in the clause, "provided, however, every offense which is prescribed by any law of the State to be a felony punishable by imprisonment in any of the state prisons or by a fine ... [.]" Following general rules of punctuation, the punishments of imprisonment in the state prisons and fine are to be read as alternative punishments to the same offense; that is, the proviso clause is limited to offenses punishable in the alternative by imprisonment in a state prison or by fine and has no application to those offenses punishable solely by imprisonment in the state prisons. While punctuation rules are not controlling in the face of obvious legislative intent to the contrary, they are properly used to construe otherwise ambiguous expressions.... [¶] ....'" (Id. at p. 1562.)
[3] Section 672 provides: "Upon a conviction for any crime punishable by imprisonment in any jail or prison, in relation to which no fine is herein prescribed, the court may impose a fine on the offender not exceeding one thousand dollars ($1,000) in cases of misdemeanors or ten thousand dollars ($10,000) in cases of felonies, in addition to the imprisonment prescribed."
[4] Section 1203.1 provides: "(a) The court, or judge thereof, in the order granting probation, may suspend the imposing or the execution of the sentence.... [¶] ... The following shall apply to this subdivision: [¶] (1) The court may fine the defendant in a sum not to exceed the maximum fine provided by law in the case. [¶] (2) The court may, in connection with granting probation, impose either imprisonment in a county jail or a fine, both, or neither." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265705/ | 163 Cal. App. 4th 753 (2008)
LEAH MORRIS, Plaintiff and Appellant,
v.
JOHN CHIANG, as State Controller, etc., Defendant and Respondent.
No. B194764.
Court of Appeals of California, Second District, Division Eight.
June 3, 2008.
*755 Law Offices of Randall David Smith, Randall D. Smith; Susman, Heffner & Hurst, Arthur T. Susman, Glenn Hara; Futterman Howard Watkins Wylie & Ashley, Futterman Howard Watkins, John R. Wylie and Charles R. Watkins for Plaintiff and Appellant.
Edmund G. Brown, Jr., Attorney General, Stacy Boulware Eurie and Christopher E. Krueger, Assistant Attorneys General, Jonathan K. Renner, Douglas J. Woods, Leslie R. Lopez and Susan K. Leach, Deputy Attorneys General, for Defendant and Respondent.
OPINION
COOPER, P.J.
Plaintiff, Leah Morris, appeals from summary judgment granted to defendant, the State Controller (controller), in a class action for equitable relief from alleged unconstitutional takings of property, namely interest "and other accruals" on unclaimed property held by the controller under the Unclaimed Property Law, Code of Civil Procedure section 1500 et seq. (UPL; undesignated section references are to the Code of Civil Procedure). The trial court ruled that the UPL did not work such a taking. We agree with that conclusion, and affirm the judgment.
FACTS
The UPL governs the state's handling and disposition, generally through the controller, of property such as bank accounts and securities, held by entities such as banks, brokerage firms, and insurance companies, the owners of which have not acknowledged or claimed their interest in for several years, *756 generally three. Such property by statute escheats, nonpermanently, and the holder must transfer it to the controller. The controller sells the property (other than money), and deposits the proceeds in an unclaimed property fund, from which the controller pays approved claims, as well as expenses of administering the property. The contents of the account are regularly transferred to the general fund. (§§ 1563-1564.) When the original owner or a person claiming thereunder claims the property, and the controller approves the claim, the controller pays the amount to the claimant. (§ 1540.) No interest is payable on the claim (§ 1540, subd. (c)), and any interest or other accruals derived from the unclaimed property fund are deposited in the general fund. (§ 1562.)[1] The purposes of the UPL are to protect the owners of unclaimed property, by finding them and restoring their property to them, and "`to give the state rather than the holders of unclaimed property the benefit of the use of it, most of which experience shows will never be claimed.' [Citations.]" (Harris v. Westly (2004) 116 Cal. App. 4th 214, 219 [10 Cal. Rptr. 3d 343].)
The described escheat of unclaimed property under the UPL differs from traditional, "permanent escheat." Permanent escheat, which generally requires a judicial proceeding, constitutes "the absolute vesting in the state of title to property...." (§ 1300, subd. (d).) Nonpermanent "`[e]scheat'" "means the vesting in the state of title to property ... subject to the right of claimants to appear and claim the escheated property...." (§ 1300, subd. (c).)[2]
Plaintiff filed her complaint on behalf of herself and a class consisting of persons (excluding California state and federal judges) whose property, taken into custody under the UPL, had while in state custody earned either interest, dividends or other accruals that were used to fund state programs, or "allowed the state to forego borrowing like amounts," for which the state had not paid compensation. The controller had paid plaintiff the money she had claimed (later stipulated to be $6,334.07), but had not paid her any interest earned on that principal or the interest the state had saved by not having to borrow the amount. The complaint alleged that the UPL was "purely custodial... and title to unclaimed property is never transferred from the owner to the defendant or the State of California." Plaintiff alleged that the retention of interest earned on such private funds constituted a taking, and that unearned interest the state profited by from holding and using the property should be repaid as part of it. After alleging the suitability of a class action, plaintiff averred that the controller's retention of earnings and failure to pay the interest the state had saved were takings without just compensation, in *757 violation of plaintiff's and the class's rights under the Fifth and Fourteenth Amendments to the United States Constitution, and article I, section 19 of the California Constitution. Plaintiff prayed for declaratory and "appropriate equitable and injunctive relief...."
The parties stipulated and the court ordered that it would decide the question of liability before class certification, and then the appropriate remedy. Both sides moved for summary judgment (in plaintiff's case, "summary judgment as to liability"). Although the motions essentially presented legal questions, the controller submitted a declaration to the effect that the abandoned property account of the unclaimed property fund, into which unclaimed property is deposited, is not an interest-bearing account. In answers to interrogatories, filed by plaintiff, the controller stated that money in the general fund that is not immediately needed for expenditure is invested in a pooled money account, which does earn interest.[3]
The basic premise of plaintiff's motion for summary judgment was that the nonpermanent escheat of unclaimed property under the UPL transferred only custody, not title. Because title and ownership remained with owners like herself, plaintiff argued, the failure to compensate for use of the property, and the state's retention of such interest as the property earned while in its hands, constituted uncompensated and hence unconstitutional takings.[4] The controller's motion opposed plaintiff's contentions on several bases, including that the state held title to escheated unclaimed property until it was claimed, and that in those circumstances the original owners did not have a property interest requiring retention of or compensation by interest.
Ruling that plaintiff had not established a taking in the operation of the UPL, the trial court denied plaintiff's motion, granted the controller's, and entered judgment for the controller.
DISCUSSION
(1) Here as below, plaintiff's position depends upon the proposition that the UPL does not provide that the state holds title to nonpermanently escheated property. Section 1300, subdivision (c), however, refutes this claim. Once again, that subdivision defines escheat (as contrasted with permanent escheat) as "the vesting in the state of title to property ... subject to the right of claimants to appear and claim the escheated property...." Although the *758 title so vested is defeasible, and meant to be temporary until the claim of the owner or other qualified claimant, it nonetheless exists.
There is no inconsistency between this reality and the legislative and judicial declarations that plaintiff relies on, which essentially distinguish between the status of property held under the UPL and property that has permanently escheated, granting absolute title to the state. Thus, section 1501.5, subdivision (a) provides that "... property received by the state under this chapter [UPL] shall not permanently escheat to the state." (Italics added.) The same distinction appears in the cases plaintiff cites, which refer to the state taking custody rather than absolute ownership of unclaimed property. (Fong v. Westly (2004) 117 Cal. App. 4th 841, 844 [12 Cal. Rptr. 3d 76] (Fong); Harris v. Westly, supra, 116 Cal.App.4th at p. 219; Bank of America v. Cory (1985) 164 Cal. App. 3d 66, 79 [210 Cal. Rptr. 351].)[5]
(2) In short, nonpermanent title does reside in the state with respect to unclaimed property taken into custody under the UPL. The state's ability to utilize that title is strictly governed by the UPL, which provides for retention to pay owners' claims, and interim use in the general fund. But the state's title overcomes plaintiff's claims of entitlement to interest on the property, whether actually accrued or compensatory for the property's use. Before explaining how this is so, however, we respond to plaintiff's explicit and implicit claims that the statutory attribution of nonpermanent title to the state violates constitutional provisions.
(3) First, plaintiff argues that escheat accomplished by statutory authorization, without notice and opportunity for a hearing, violates the requirements of due process. Assuming that permanent escheat requires such notice and hearing (see, e.g., State v. Savings Union Bank & Trust Co (1921) 186 Cal. 294, 299-300 [199 P. 26]), plaintiff's authorities do not show that the limited transfer at issue here does. Moreover, it has already been held that the UPL provides constitutionally sufficient notice to property owners. (Fong, supra, 117 Cal.App.4th at pp. 854-855.)
Fong, supra, 117 Cal.App.4th at pages 853-854, also rejected the contention, implicit in plaintiff's position, that the transfer of property by nonpermanent escheat under the UPL constituted an unconstitutional taking. In so holding, Fong relied on two federal cases, both of which again apply. In re *759 Folding Carton Antitrust Litigation (7th Cir. 1984) 744 F.2d 1252, 1255, stated that an "impermanent" escheat, which allowed recovery by claimants, "raise[d] no unconstitutional taking. Since any legitimate claimant has been afforded an adequate remedy against the United States, there is no bar to interim governmental use of the escheated money...."
The second cited case was the Supreme Court's decision in Texaco, Inc. v. Short (1982) 454 U.S. 516 [70 L. Ed. 2d 738, 102 S. Ct. 781] (Texaco). There the court approved, as against both due process and taking challenges, a statute that provided for the lapse and reversion to the surface owner of mineral interests that had not been used (in various ways) for 20 years, unless their owner recorded a claim before then. The court first explained that states had long been authorized to terminate or transfer property interests that had not been exercised and thus were considered abandoned. The court then held that the state could treat the mineral interests as abandoned, and the state did not have to compensate the owner for its neglect of them. "It is the owner's failure to make any use of the propertyand not the action of the Statethat causes the lapse of the property right; there is no `taking' that requires compensation." (Id. at p. 530.)
Plaintiff avers that Texaco, supra, 454 U.S. 516, lacks relevance here, because it concerned transfer to another property owner, not the state. But Justice Brennan's dissent (on due process grounds), which plaintiff selectively quotes, made no distinction between state-mandated transfer of the mineral interests "to itself, to surface owners, or indeed to anyone at all...." (Id. at p. 542.)
Texaco, supra, 454 U.S. 516, has been cited by several state appellate courts in upholding against takings challenges the denial to claimants of interest earned on unclaimed, state-held property. Those courts have treated unclaimed property as effectively abandoned, in the manner the Texaco court viewed the mineral interests under the challenged statute, with the consequence that neither custodial escheat of the property nor failure to pay the claimant interest on it constituted a taking. (Smyth v. Carter (Ind.Ct.App. 2006) 845 N.E.2d 219, 224; Clark v. Strayhorn (Tex.Ct.App. 2006) 184 S.W.3d 906, 913; Smolow v. Hafer (Pa.Cmwlth. 2005) 867 A.2d 767, 774-775; accord, Sogg v. Ohio Dept. of Commerce (Ohio Ct.App., June 21, 2007, No. 06AP-883) 2007 WL 1821306, app. accepted, Nov. 21, 2007, No. 2007-1452.) Here too, the intake and limited title transfer of property under the UPL are practically and legally attributable to the "abandonment" or inattention by the owners, in the face of conditions permitting them to avoid the result. Consequently, the title recognized by section 1300, subdivision (c) is not the product of an invalid taking.
*760 (4) Plaintiff contends, however, that property that meets the UPL's criteria as "unclaimed" may not be considered abandoned property, because that status traditionally requires a more stringent showing of intent to abandon. (See, e.g., Gerhard v. Stephens (1968) 68 Cal. 2d 864, 889-890 [69 Cal. Rptr. 612, 442 P.2d 692].) But common law standards are not necessarily controlling. Just as the statute in Texaco, supra, 454 U.S. 516, set out a new set of criteria for relinquishment of certain property, which the Supreme Court treated as functionally abandoned, the UPL specifies property that nonpermanently escheats because of certain quanta of "abandonment." (See, e.g., §§ 1510-1520.) Under Texaco, the Legislature was entitled to do this, and the resulting temporary loss of ownership may properly be treated as the product of such abandonment, just as in states with similar laws unclaimed property is "presumed abandoned." (See Smyth v. Carter, supra, 845 N.E.2d at p. 222; Clark v. Strayhorn, supra, 184 S.W.3d at p. 910.)
(5) Because title to plaintiff's property was legitimately vested in the state during the period in question, she was not entitled to the interest earned on it. (6) The UPL specifies that such interest shall be paid to the general fund. (§1562.) This directive does not violate the principle that interest "follows" and attaches to the principal on which it is earned (see, e.g., Phillips v. Washington Legal Foundation (1998) 524 U.S. 156, 165 [141 L. Ed. 2d 174, 118 S. Ct. 1925]), because during the holding period the state has title to the principal property. For the same reason, retention of the interest earned by unclaimed property while held under the UPL does not constitute a taking of private property, as occurred in various cases on which plaintiff relies. (E.g., Webb's Fabulous Pharmacies, Inc. v. Beckwith (1980) 449 U.S. 155 [66 L. Ed. 2d 358, 101 S. Ct. 446] (retention of interest earned by funds deposited in court in interpleader); Brown v. Legal Foundation of Wash. (2003) 538 U.S. 216 [155 L. Ed. 2d 376, 123 S. Ct. 1406] (appropriation of interest earned on pooled client funds (IOLTA).)
Plaintiff's claim of entitlement to "constructive interest" for state use of the property when it did not generate interest also fails. The state being entitled to use property to which it has constitutionally assumed title, there exists neither a taking in such use nor a duty to compensate for it. Plaintiff's argument for "constructive interest" is based on a federal forfeiture case, which required the government to pay interest earned on money seized but ultimately returned to its owner. The case did not involve abandoned or unclaimed property, nor did its ruling derive from any constitutional mandate. (U.S. v. $277,000 U.S. Currency (9th Cir. 1995) 69 F.3d 1491, 1496.)
(7) We conclude that the state's retention of interest earned on unclaimed property, to which it has temporary, nonpermanent title, does not constitute an unconstitutional taking without compensation.
*761 DISPOSITION
The judgment is affirmed. The controller shall recover costs on appeal.
Flier, J., and Egerton, J.,[*] concurred.
NOTES
[1] The UPL previously provided for payment of interest on claims, but that allowance was eliminated in 2003. (Stats. 2003, ch. 228, § 8, eff. Aug. 11, 2003.)
[2] The UPL is part of a larger escheat law, title 10 of part 3 of the Code of Civil Procedure, which begins with section 1300. Its terms are applicable throughout the title.
[3] The controller also reported paying approximately 200,000 unclaimed property claims, on the order of $1,000 each, in each of four recent fiscal years.
[4] Although the complaint alleged that the property of some class members earned other incidents besides interest, plaintiff claimed only deprivation of interest. Our analysis will refer to interest, as the parties also generally do.
[5] Plaintiff contends that the controller should be judicially estopped by statements made in briefs in other cases, about the rights of owners not being divested under the UPL. Although we grant the request to judicially notice these briefs, they do not qualify for judicial estoppel, which requires, among other things, that the positions taken in the former and present cases "are totally inconsistent." (Jackson v. County of Los Angeles (1997) 60 Cal. App. 4th 171, 183 [70 Cal. Rptr. 2d 96].)
[*] Judge of the Superior Court of Los Angeles County, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265718/ | 163 Cal. App. 4th 1028 (2008)
THE PEOPLE, Plaintiff and Respondent,
v.
FRANK SOTO CARRILLO, Defendant and Appellant.
In re FRANK SOTO CARRILLO on Habeas Corpus.
No. B192773. No. B199656.
Court of Appeals of California, Second District, Division Eight.
June 9, 2008.
*1031 Diana M. Teran, under appointment by the Court of Appeal, for Defendant and Appellant.
Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Pamela C. Hamanaka, Assistant Attorney General, Lawrence M. Daniels and Lauren E. Dana, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
RUBIN, J.
Frank Soto Carrillo appeals from the judgment entered after a jury convicted him of first degree murder. We reject his claim that his constitutional rights were violated because the prosecution would not ask federal immigration officials to issue special visas for two exculpatory witnesses who lived in Mexico. We also reject his three claims of instructional error and affirm the judgment. In a companion petition for habeas corpus, Carrillo contends that his trial counsel had a prejudicial conflict of interest because he was also representing the son of a key prosecution witness who was facing a murder charge. We hold that no prejudice occurred and therefore deny the petition.
FACTS AND PROCEDURAL HISTORY
At 8:00 p.m. on January 20, 2002, Daniel Ramirez was shot and killed in front of a taco stand in the San Fernando Valley. In July 2006, a jury convicted Frank Soto Carrillo of first degree murder for that crime. The evidence at trial showed that at least two different guns were fired at Ramirez, who sustained three gunshot wounds. Karina Orozco told the police that she heard shots being fired from three guns, but saw only one person who was holding a gun, and identified Carrillo as having been that person. She also signed a statement that she saw Carrillo kill Ramirez. Orozco also identified Carrillo at his preliminary hearing, but at trial backed off from her previous identifications and claimed she had been pressured by the police to identify Carrillo.
*1032 Lionel Rudy Chavarria also witnessed the shooting. He saw appellant standing in a group of men when he heard four or five gunshots. Chavarria saw sparks in front of people, including in front of Carrillo's torso. Chavarria gave this information to the police after being arrested 18 days later. He hoped that by doing so, he would get leniency. He did do some jail time, but thought he might have received a lighter sentence.[1]
A Los Angeles police gang detail officer testified that Carrillo and Ramirez were members of rival gangs. Carrillo belonged to Columbus Street and Ramirez was a member of Vincent Town. A Columbus Street gang member had been killed by a Vincent Town gang member nine days before Ramirez was killed and the officer believed that Ramirez was murdered in retaliation. Rosa Garcia, who once belonged to Columbus Street and was Carrillo's former girlfriend, testified that she was in an apartment with Carrillo 10 days after Ramirez was shot. According to Garcia, Carrillo asked if she had heard about what happened to Ramirez and said "we had it taken care of and "I had that taken care of." The Vincent Town gang member who set all this in motion by killing a Columbus Street gang member was the ex-boyfriend of Garcia's sister and Carrillo told Garcia she could be next and that they were going to her house to look for the original shooter.
Based on this evidence, the jury found Carrillo guilty of first degree murder (Pen. Code, § 187, subd. (a)) and also found true allegations that he personally discharged a firearm, proximately causing great bodily injury and death (Pen. Code, § 12022.53, subd. (d)), personally used a firearm (Pen. Code, § 12022.53, subd. (b)), personally discharged a firearm (Pen. Code, § 12022.53, subd. (c)), and committed his crime for the benefit of a criminal street gang (Pen. Code, § 186.22, subd. (b)(1)(A)).[2] Along with two prior conviction allegations (§ 667.5, subd. (b)), this led the court to impose a state prison sentence of 25 years to life for the murder conviction, 25 years to life for the firearm discharge causing death or injury allegation and 10 years for the gang benefit allegation. The remaining sentence enhancement allegations were dismissed.
Carrillo's primary issue on appeal stems from his unsuccessful efforts to have the prosecutor and the trial court help him obtain evidence from, or secure the trial attendance of, witnesses outside the United States. In February 2006, Carrillo brought a motion asking the court to appoint a commissioner *1033 to examine by way of written interrogatories two witnesses who lived in Mexico. (§ 1349 et seq.) A declaration from defense counsel stated that Abraham Prado and Maria Torrez, who lived in Mexico and could not be compelled to testify, were necessary and material witnesses. According to defense counsel, Prado was present when Ramirez was shot and asked Ramirez who did it. Ramirez answered with a "dying declaration" that the shooters "were the same as those that did it last time. When the victim was last shot, [Carrillo] was living in Mexico with ... Torrez...." The prosecutor filed a written opposition that raised the following grounds: (1) the statements supposedly made to Prado did not satisfy the requirements of section 1349 because they lacked foundation that Ramirez, who was shot in the back, even knew who had shot him; (2) the statements did not qualify as dying declarations under Evidence Code section 1242 because Prado told the police that Ramirez had said he was alright, meaning that Ramirez's statements were not made under the fear of impending death; and (3) because Prado's statements were not proper under section 1349, Torrez's testimony was rendered irrelevant. The trial court denied the motion on April 7, 2006, because it did not believe there was any enforcement mechanism in the event of perjury and because it believed the section 1349 procedure applied to only minor foundational matters, not to critical evidence of innocence or guilt that should be tested by cross-examination.
Carrillo followed this up with a motion to compel the prosecutor to ask federal immigration officials to exercise their discretion to issue a special "parole visa" to Prado and Torrez so they could enter the country for the sole purpose of testifying at trial. The motion was not supported by declarations or other evidence. Based on a federal appellate decision, Carrillo argued that the prosecution's refusal to even request those visas denied his due process rights to a fair trial and to present a defense. A later supplemental brief included an August 2004 letter from a defense investigator summarizing his interview of Prado. According to the unauthenticated letter, Prado was a friend of Ramirez and a distant relative of Carrillo. "He had a clear view of the shooters.... None of the shooters were Frank Carrillo." Prado ran to Ramirez, who said "the person who shot him was the same individual that had shot him in the arm six months earlier." Prado claimed he had tried unsuccessfully to explain this to the police and the prosecutor.
The prosecutor did not file a written opposition to this motion. The court denied the motion on April 24, 2006, for several reasons: (1) it did not believe the prosecution had a duty to help the defense locate and secure the attendance of witnesses; (2) the federal decision cited by Carrillo was inapplicable because it involved federal prosecutors and federal immigration officials, while this was a prosecution by the state, which had no connection *1034 to or authority over the immigration department; (3) Carrillo cited no authority concerning the so-called parole visas, but the court's independent research turned up two federal administrative regulations that showed such visas were issued subject to the immigration department's sole discretion, meaning there was no guarantee a prosecution request would even be honored; and (4) the motion was supported by no evidence showing the witnesses' citizenship, immigration status, possession or nonpossession of a green card or visa, no evidence that the witnesses ever tried on their own, but failed, to obtain visas, and no explanation for defense counsel's delay in attempting to secure the attendance of those witnesses since August 2004.
DISCUSSION
1. Denial of the Visa Request Motion Was Proper
In U.S. v. Theresius Filippi (1st Cir. 1990) 918 F.2d 244 (Filippi), the court held that federal prosecutors violated a criminal defendant's constitutional rights to due process and to the compulsory attendance of witnesses by denying the defendant's request that they ask federal immigration officials to grant an entrance visa to an Ecuadorian national who had exculpatory evidence in the defendant's trial for transporting cocaine. (Id. at pp. 247-248.) Because the defendant went to trial before the issue was resolved in the trial court, however, the federal appellate court held that the constitutional rights violations had been waived. (Id. at p. 248.)[3] Pointing to somewhat analogous California authority, Carrillo contends the same rule should apply here.
We will assume for discussion's sake that Prado and Torrez were material defense witnesses who possessed important exculpatory evidence. We will also assume, but do not decide, that in the abstract, a refusal by the prosecution or the court to make sure that entry visas were at least requested from federal immigration officials for such witnesses violates a defendant's constitutional rights to due process and a fair trial. Even so, the record from below and the arguments made on appeal compel us to affirm the trial court's ruling here.[4] In Fillippi, supra, 918 F2d 244, the evidence showed that the *1035 defendant's wife flew to Ecuador, asked the witness to testify for her husband, and obtained his agreement to do so. The witness went to the American embassy and asked for, but was denied, an entrance visa. The defendant's lawyer wrote the United States attorney and asked for her cooperation, but she did not respond. Upon request by the defense, the court wrote a letter to the embassy in Ecuador and asked for assistance, but got no results. Defense counsel then wrote to and phoned immigration officials, but was told federal prosecutors had to request the visa.
As the trial court in this case pointed out, Carrillo's motion was not supported by any evidence. Though some factual assertions were made by way of argument, no evidence was placed before the trial court that explained the witnesses' immigration status, showed that any steps had been taken to secure regular visas, or otherwise showed that their attendance would not be possible without the requested court orders. The unauthenticated letter from the defense investigator was silent as to Prado's immigration status, but mentioned that he had crossed back and forth from Mexico, leading the trial court to infer that there might in fact have been no impediments to his ability to come here. Furthermore, Carrillo's motion did not cite, discuss, or analyze the federal immigration provisions that apply in this case. While he cites two federal immigration regulations in his appellate brief, he has still failed to discuss or analyze their applicability to this case. As a result, their applicability and hence their efficacy are waived as issues. (People v. Beltran (2000) 82 Cal. App. 4th 693, 697, fn. 5 [98 Cal. Rptr. 2d 730].) Because there was insufficient evidence to support the motion below, and because he has failed to make proper argument on appeal about the applicable federal immigration provisions, we affirm the trial court's order.[5]
*1036 2. Instructional Error Claim for the Firearm Use Causing Death or Great Bodily Injury Allegation
(1) Section 12022.53, subdivision (d) enhances the sentence of defendants who, while committing murder and other specified felonies, "personally and intentionally discharge[d] a firearm and proximately cause[d] great bodily injury, as defined in Section 12022.7, or death, to any person other than an accomplice...." The jury in this case found such an allegation true as to Carrillo, but he contends the court erred by failing on its own motion to give a certain instruction defining proximate cause.
As relevant here, the jury was instructed that the prosecution had to prove, among other facts, that the "defendant's or a perpetrator's act caused great bodily injury to or the death of a person" and that "[a]n act causes great bodily injury or death if the injury or death is the direct, natural, and probable consequence of the act and the injury or death would not have happened without the act. A natural and probable consequence is one that a reasonable person would know is likely to happen if nothing unusual intervenes. In deciding whether a consequence is natural and probable, consider all the circumstances established by the evidence."
Carrillo contends that pursuant to People v. Bland (2002) 28 Cal. 4th 313 [121 Cal. Rptr. 2d 546, 48 P.3d 1107] (Bland), the court was obligated to sua sponte instruct the jury with CALJIC No. 3.41, which states, "There may be more than one cause of the great bodily injury or death. When the conduct of two or more persons contributes concurrently as a cause of the great bodily injury or death, the conduct of each is a cause of the great bodily injury or death if that conduct was also a substantial factor contributing to the result. A cause is concurrent if it was operative at the moment of the great bodily injury or death and acted with another cause to produce the great bodily injury or death. [¶] If you find that the defendant's conduct was a cause of the great bodily injury or death to another person, then it is no defense that the conduct of some other person, even the injured [or] deceased person, contributed to the great bodily injury or death." (See 28 Cal.4th at p. 335.) Absent that clarification, Carrillo contends the jury could have found the allegation true based solely on the acts of any coperpetrators without determining that his conduct proximately caused injury or death.
(2) The defendant in Bland and another man fired shots into a car that killed one person and wounded two others. It was unclear whether the *1037 defendant or his accomplice fired the rounds that hit the two wounded victims. The defendant was found guilty of murder and attempted murder, along with the enhancement under section 12022.53, subdivision (d).[6] The trial court instructed the jury in the language of subdivision (d), but failed to give an instruction defining proximate cause. The Court of Appeal reversed, reasoning that the enhancement could not be found true unless the defendant personally fired the bullets that struck the victim. The Supreme Court rejected the Court of Appeal's reasoning, holding that the statute is satisfied even if the bullets did not hit the victim, so long as under the broad standard of proximate cause, the defendant's act of firing the gun was a cause of the injuries or death. (Bland, supra, 28 Cal.4th at pp. 336-338.) As part of its holding, the Bland court addressed the instructional requirements for proximate cause under subdivision (d). (3) According to the Bland court, CALJIC No. 17.19.5 correctly defined proximate cause as follows: "`A proximate cause of great bodily injury or death is an act or omission that sets in motion a chain of events that produces as a direct, natural and probable consequence of the act or omission the great bodily injury or death and without which the great bodily injury or death would not have occurred.'" (28 Cal.4th at p. 335.) If there is more than one cause of injury or death, then CALJIC No. 3.41 should also be given. (28 Cal.4th at p. 335.)
Despite the trial court's error, the Bland court found it harmless because proximate cause is a broader concept than jurors might assume and the jury was therefore unlikely to find proximate cause where none existed. Because any confusion could have only helped the defendant, the Supreme Court did not reverse the trial court's judgment. (Bland, supra, 28 Cal.4th at p. 338.)
Based on this, Carrillo contends that instructional error occurred. We agree. The facts here showed that Carrillo was one of several persons who shot at Ramirez, who was struck by rounds fired from two or three different guns. There was no evidence that Carrillo fired one of those guns. By modifying the instruction to state that the allegation was true if the conduct of Carrillo or a coperpetrator harmed Ramirez, and then by failing to instruct the jury that concurrent causes could operate together to determine proximate cause, there was a likelihood that the jury could have found the allegation true without finding that Carrillo's conduct was one of those causes. (People v. Palmer (2005) 133 Cal. App. 4th 1141, 1156 [35 Cal. Rptr. 3d 373] [test for instructional error is whether jury would likely misunderstand or be misled by instruction].) However, as set forth below, under the applicable standard of *1038 review for constitutional error, the error was harmless beyond a reasonable doubt. (Id. at p. 1157.)
Even if error occurred it was not prejudicial if the jury necessarily found the missing element true under other instructions. (People v. DeJesus (1995) 38 Cal. App. 4th 1, 18 [44 Cal. Rptr. 2d 796]; People v. Matta (1976) 57 Cal. App. 3d 472, 488-489 [129 Cal. Rptr. 205] [defendant convicted of murder contended court erred by not instructing on attempted murder; jury's finding that defendant proximately caused victim's death as part of murder verdict meant that key issue concerning need for attempted murder instruction whether defendant's assault of victim was proximate cause of his deathwas necessarily resolved against defendant, making error harmless].) That is precisely what happened here. The jury was instructed that in order to find Carrillo guilty of murder either directly or as aider and abettor, it had to find that Carrillo's acts caused Ramirez's death. As part of that, the jury was told that "[a]n act causes death if the death is the direct, natural, and probable consequence of the act and the death would not have happened without the act. A natural and probable consequence is one that a reasonable person would know is likely to happen if nothing unusual intervenes. In deciding whether a consequence is natural and probable, consider all of the circumstances established by the evidence." This is the definition of proximate cause approved in Bland, supra, 28 Cal.4th at page 335. In holding that proximate cause under subdivision (d) did not require proof that the defendant actually have fired the shot that harmed his victim, the Bland court relied on People v. Sanchez (2001) 26 Cal. 4th 834 [111 Cal. Rptr. 2d 129, 29 P.3d 209] (Sanchez), which held that a defendant who joined with others in firing at a victim was the proximate cause of death for purposes of the murder conviction even when it was impossible to tell who fired the fatal shot. (Bland, supra, at pp. 337-338, citing Sanchez, supra, at pp. 848-849.)
(4) Applying that reasoning here, when the jury found Carrillo guilty of murder, it found that he proximately caused Ramirez's death. Regardless of whether the jury found Carrillo guilty because he fired the fatal shot or aided and abetted the murder by firing at Ramirez, under Bland and Sanchez, he was a proximate cause of the death. Accordingly, the jury could not have misunderstood the instructions in a way that would have resulted in a finding of proximate causation on an improper basis, making the error harmless. (Bland, supra, 28 Cal.4th at p. 338.)
3. Failure to Give Instruction on Flight
(5) Several witnesses saw Carrillo running from the scene of the shooting, but the court did not instruct the jury with CALJIC No. 2.52, which states that flight from a crime scene is evidence of guilt, but is not sufficient *1039 by itself to establish guilt. Carrillo contends the trial court had a sua sponte duty to give that instruction. Even if error occurred, because the evidence of Carrillo's guilt rested primarily on eyewitness identification and statements attributed to him about his participation in the crime, not on his flight from the scene, we hold that the error was harmless. (People v. Sheldon (1967) 254 Cal. App. 2d 174, 181 [61 Cal. Rptr. 778].)
4. The Reasonable Doubt Instruction Was Proper
(6) The jury was instructed on the meaning of reasonable doubt with CALCRIM No. 220, which states that "[p]roof beyond a reasonable doubt is proof that leaves you with an abiding conviction that the charge is true. The evidence need not eliminate all possible doubt because everything in life is open to some possible or imaginary doubt." Carrillo objected below that the instruction be modified to also state that "abiding conviction" means "convincing you to a near certainty of the truth of the charge." He contends the trial court erred by not doing so. Because the propriety of the instruction given has been upheld many times, we affirm. (People v. Staten (2000) 24 Cal. 4th 434, 456-457 & fn. 5 [101 Cal. Rptr. 2d 213, 11 P.3d 968].)
5. The Habeas Corpus Petition
(7) The constitutional right to the effective assistance of counsel includes a correlative right to representation free from conflicts of interest. (People v. Clark (1993) 5 Cal. 4th 950, 994 [22 Cal. Rptr. 2d 689, 857 P.2d 1099] (Clark).) Carrillo has filed a separate habeas corpus petition, contending that his trial lawyer, Dale Atherton, had a conflict of interest during the trial because he was then representing Garcia's son, who had been charged with a gang-related murder. Carrillo contends that his petition should be granted because there was an actual conflict of interest and because the trial court did not ask him about that issue.
The record shows that Atherton was appointed in September 2005 to represent Oscar Bonilla on a gang-related murder charge. At a June 19, 2006, court hearing in this case, Atherton and the prosecutor told the court that Atherton had only recently learned Bonilla was Garcia's son and wanted to bring that potential conflict of interest to the court's attention. Atherton told the court that he talked to Garcia by phone, told her he was representing Carrillo, and explained that no matter how she testified in this case, it would not affect his representation of Bonilla. He said he had made her no promises, did not intimidate her in any way, and made it clear that he would represent her son to the best of his ability. Atherton told the court he asked Garcia to do *1040 nothing more than tell the truth. Atherton's investigator interviewed Garcia and her story had not changed from her initial statements to the police. The court and the prosecutor agreed that there was no conflict of interest. Carrillo was present at the hearing, but said nothing.
In his habeas corpus petition, Carrillo submitted a declaration stating that he told Atherton he wanted a new lawyer, but Atherton said it was too late. Carrillo said he had been unaware he had a right to another attorney if a conflict of interest existed and that neither the court nor counsel questioned him about the potential conflict at the June hearing. Had he been asked to waive the potential conflict, he would have declined and insisted on getting new counsel. In a declaration submitted with respondent's opposition to the habeas corpus petition, Atherton declared that he had no divided loyalties due to representing Carrillo and Bonilla, and that although Carrillo might have inquired about new counsel due to the length of trial preparations, that was before Atherton learned of the potential conflict and had nothing to do with that issue.
(8) Because Carrillo did not object below, under the federal Constitution he must show that an actual conflict of interest adversely affected his lawyer's performance. (Clark, supra, 5 Cal.4th at pp. 994-995.) A more rigorous standard of review is applied under the California Constitution, however. Proof of an actual conflict is not required and a potential conflict may require reversal if the record supports an informed speculation that Carrillo's right to effective representation was prejudicially affected. This does not require Carrillo to show that he would likely have been acquitted absent the conflict. Instead, we examine the record to determine whether defense counsel failed to represent defendant as vigorously as he might have had there been no conflict. The grounds to believe that such prejudice occurred must be discernible and the informed speculation of prejudice may be dispelled by examination of the trial record. (Id. at p. 995.)
(9) Although current or former representation of a prosecution witness may well give rise to a conflict of interest for defense counsel, there is ordinarily no conflict if the lawyer has not received pertinent confidential information from the witness. (People v. Cornwell (2005) 37 Cal. 4th 50, 75 [33 Cal. Rptr. 3d 1, 117 P.3d 622].) There is no allegation that Atherton possessed confidential information from either his client Bonilla or from Bonilla's mother, Garcia, and there are no California cases holding that current representation of a prosecution witness's relative creates a conflict of interest.[7] We therefore doubt that a conflict existed, especially where the trial *1041 court heard and accepted the explanations and viewpoints of both Atherton and the prosecutor. (Clark, supra, 5 Cal.4th at pp. 1001-1002.)
Assuming for discussion's sake only that a conflict existed, our examination of the record shows that no prejudice occurred. Carrillo contends prejudice existed because Atherton did not cross-examine Garcia about the fact that her son was facing gang-related murder charges. According to Carrillo, this line of questioning could have created an inference that Garcia was cooperating with the prosecution in order to obtain leniency for her son, and could have been used to show that her family was still connected with gangs, thereby impeaching her statement on direct examination that she left the Columbus Street gang years before. As proof of the former, Carrillo's petition includes a minute order showing Bonilla eventually pleaded guilty to manslaughter.
We are not persuaded by either contention. Carrillo does not dispute that Garcia's trial testimony about his admissions was consistent with the statements she gave to the police before Atherton began to represent Bonilla.[8] With that in mind, it would be impossible to show her testimony was somehow influenced by her son's subsequent arrest. As for Garcia's gang affiliation, Atherton asked Garcia whether she was in a gang, and Garcia said she was, thereby impeaching her on that topic. Finally, we have reviewed the record of Garcia's testimony and are satisfied that Atherton examined her vigorously. He questioned her about a police report where she said Carrillo had simply been trying to scare her, got her to admit to lying to her friend, Jonetta Jones, about certain information, and got Jones to confirm that Garcia's mother had impersonated Garcia during certain police interviews.
Based on this, we conclude that no prejudice occurred from Atherton's supposed conflict of interest. Because we hold that no prejudice occurred under the more rigorous California standard, our holding applies with equal force under the United States Constitution, which also requires proof that the conflict adversely affected counsel's performance. As for the court's failure to ask Carrillo about the conflict and whether he wished to waive it, because the conflict did not affect Atherton's performance, reversal is not required. (Clark, supra, 5 Cal.4th at p. 999.)
*1042 DISPOSITION
For the reasons set forth above, the judgment is affirmed. The petition for writ of habeas corpus is denied.
Cooper, P. J., and Flier, J., concurred.
NOTES
[1] Other witnesses testified inconclusively about Carrillo's presence at the scene, or to other facts that do not bear on our analysis. We have limited our statement of facts to the two eyewitnesses, however.
[2] All further undesignated section references are to the Penal Code.
[3] Respondent contends that Carrillo also waived the issue by proceeding to trial. We agree with Carrillo that no waiver occurred because he did not go to trial until his motion had been denied and made it clear that he did not intend to waive his objections by doing so.
[4] Although we affirm on this ground, we do not believe the trial court should have so easily dismissed Carrillo's contentions. It seems a strange notion indeed to let the prosecution alone decide whether it will request a special immigration visa for exculpatory witnesses who are foreign nationals. Such unfettered discretion is ripe for abuse and can hardly be reconciled with commonly accepted notions of fair play and equal justice. The trial court's belief that a duty to request a visa under the proper circumstances does not exist because state courts and prosecutors have no authority over federal immigration officials, and because there is no guarantee a request will be honored, strikes us as begging the essential issue: whether the prosecution should at least request the visa when warranted, instead of operating without guidelines or oversight, raising the specter of blanket denials of visa requests for defense witnesses, while requests for prosecution witnesses are routinely made. We also reject the trial court's reliance on decisions such as In re Littlefield (1993) 5 Cal. 4th 122 [19 Cal. Rptr. 2d 248, 851 P.2d 42] and People v. Rance (1980) 106 Cal. App. 3d 245 [164 Cal. Rptr. 822], which concerned the prosecution's lack of a duty to assist the defense during discovery. Because this was not a discovery issue, such decisions are inapplicable. However, we leave for another day the issue whether a proper factual showing might oblige the prosecution to make a good faith request for a special entry visa in order to allow a foreign defense witness to enter the United States.
[5] To the extent Carrillo contends he has raised as an issue the trial court's denial of his section 1349 motion for a commission to examine the witnesses, we hold he has also waived that issue. His appellate brief mentions the issue only in passing, but does not cite, discuss, or analyze the comprehensive statutory scheme for seeking or opposing such commissions and does not address any of the legal grounds relied on by the trial court when denying that motion.
[6] When we hereafter mention subdivision (d), we are referring to that subdivision of section 12022.53.
[7] Carrillo does cite to one New York civil case where a conflict was found on those facts. (People v. Krausz (1994) 84 N.Y.2d 953 [620 N.Y.S.2d 821, 644 N.E.2d 1377, 1378].)
[8] Carrillo does contend that Garcia's trial testimony added new and more unfavorable information about gang rivalries and a gang threat on her life. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265693/ | 657 F. Supp. 437 (1987)
Grazyna MADUFF, Plaintiff,
v.
LIFE INSURANCE COMPANY OF VIRGINIA, Defendant.
No. 86 C 9826.
United States District Court, N.D. Illinois, E.D.
April 7, 1987.
*438 Martin C. Ashman, Martin C. Ashman, Ltd., Chicago, Ill., for plaintiff.
J.L. Donnelly, L.T. Hettinger, Boodell, Sears, Giambalvo & Crowley, Chicago, Ill., for defendant.
MEMORANDUM ORDER
BUA, District Judge.
This order concerns defendant's motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons stated herein, defendant's motion to dismiss is granted in part and denied in part.
I. FACTS
On July 8, 1985, defendant Life Insurance Company of Virginia executed and delivered to Sydney L. Maduff a life insurance policy under which defendant agreed to pay two million dollars to plaintiff Grazyna Maduff, wife of the insured, upon the insured's death. On October 4, 1986, Sydney L. Maduff died while the life insurance policy was still in effect. Plaintiff, the named beneficiary of the policy, demanded payment from defendant of the two million dollars for which her husband's life was insured. However, to date, defendant has not paid any sum to plaintiff.
On December 18, 1986, plaintiff filed this action alleging two counts. Count I alleges that defendant breached the insurance contract by its failure to pay. Under this count, plaintiff requests relief in the amount of two million dollars plus interest, plus reasonable attorneys' fees and other costs recoverable under § 155 of the Illinois Insurance Code, Ill.Rev.Stat. ch. 73, § 767. Count II alleges that defendant fraudulently made a false promise in violation of § 2 of the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill. *439 Rev.Stat., ch. 121½, § 261 et seq. This court has jurisdiction over this action under 28 U.S.C. § 1332 in that the parties are residents of different states and the amount in controversy exceeds $10,000.
II. DISCUSSION
Defendant's motion to dismiss challenges both counts of the complaint. Defendant first argues that the allegations in Count I are an insufficient basis, as a matter of law, on which to grant plaintiff's request for attorneys' fees and other sums recoverable under § 155 of the Illinois Insurance Code. Section 155 provides:
In any action by or against a company wherein there is in issue the liability of a company on a policy or policies of insurance or the amount of loss payable thereunder, or for an unreasonable delay in settling a claim, and it appears to the court that such action or delay is vexatious and unreasonable, the court may allow as part of the taxable costs in the action reasonable attorney fees, other costs, plus an amount not to exceed any one of the following amounts:
(a) 25 percent of the amount which the court or jury finds such party is entitled to recover against the company, exclusive of all costs;
(b) $25,000;
(c) the excess of the amount which the court or jury finds such party is entitled to recover, exclusive of costs, over the amount, if any, which the company offered to pay in settlement of the claim prior to the action.
The complaint alleges that defendant's delay in paying out the proceeds of the policy, consisting of the two and one-half month period between the insured's death and the commencement of this action, is vexatious and unreasonable. Defendant maintains that plaintiff fails to allege any specific unreasonable or vexatious conduct by defendant and that a two and one-half month delay, by itself, is not unreasonable and vexatious conduct as a matter of law. Defendant asserts that where, as here, the insured died within the contestable period of the policy, such delay is routine and necessary because it enables defendant to investigate the representations made by the insured to determine if they are accurate.
The totality of circumstances, not any single factor, determine whether an insurer has acted vexatiously or unreasonably in processing a claim. Deverman v. Country Mutual Insurance Co., 56 Ill. App. 3d 122, 14 Ill. Dec. 94, 96, 371 N.E.2d 1147, 1149 (4th Dist.1977). See Fassola v. Montgomery Ward Insurance Co., 104 Ill. App. 3d 825, 60 Ill. Dec. 581, 586, 433 N.E.2d 378, 383 (3d Dist.1982); Crest v. State Farm Mutual Automobile Insurance Co., 20 Ill.App.3d 382, 313 N.E.2d 679, 684 (2d Dist.1974). Thus, although a two and one-half month delay may not be vexatious or unreasonable in most instances, circumstances may exist where such delay can be vexatious and unreasonable. Defendant argues that where an insurer has any basis for denying payment of a claim, the insured or beneficiary cannot maintain an action under § 155 of the Illinois Insurance Code. However, defendant has not shown any circumstances which justify its failure to pay the policy proceeds to plaintiff. Defendant's desire to investigate plaintiff's insurance claim, absent a contractual provision allowing for such investigation, does not necessarily bring defendant's failure to pay outside the scope of vexatious and unreasonable conduct. Moreover, the delay in payment in the instant case now approaches six months. This court cannot rule as a matter of law that a six-month delay can never be vexatious and unreasonable. Therefore, the allegations in the complaint, when viewed in the light most favorable to plaintiff, are not insufficient as a matter of law to constitute a claim of unreasonable and vexatious delay. Accordingly, defendant's motion to dismiss is denied with respect to Count I.
Defendant also claims that Count II of the complaint fails to sufficiently allege a claim of deceptive business practices within the meaning of § 2 of the Consumer Fraud and Deceptive Business Practices Act ("the Act"), Ill.Rev.Stat., ch. 121½, § 261 et seq. Specifically, defendant asserts that *440 the Act requires an injury to the public or an effect on consumers generally before liability will be imposed. Thus, defendant argues, the Act does not apply to the isolated breach of contract or purely private wrong present in this case. Plaintiff, on the other hand, contends that the Act is available to redress purely private wrongs and that no public harm need be alleged.
As a preliminary matter, it should be noted that insureds are clearly consumers within the protection of the Act. Fox v. Industrial Casualty Insurance Co., 98 Ill. App. 3d 543, 54 Ill. Dec. 89, 92, 424 N.E.2d 839, 842 (1981). However, courts have disagreed as to whether a consumer must allege a public injury or a general effect on consumers in order to recover under the Act. One line of Illinois appellate court cases holds that a single act of deceptive business practice against one plaintiff is sufficient to impose liability under the Act. See Duncavage v. Allen, 147 Ill.App.3d 88, 100 Ill. Dec. 455, 463, 497 N.E.2d 433, 441 (1st Dist.1986); Warren v. LeMay, 142 Ill. App. 3d 550, 96 Ill. Dec. 418, 428-29, 491 N.E.2d 464, 474-75 (5th Dist.1986); Tague v. Molitor Motor Co., 139 Ill.App.3d 313, 93 Ill. Dec. 769, 770, 487 N.E.2d 436, 437 (5th Dist.1985); M & W Gear Company v. A W Dynamometer, Inc., 97 Ill.App.3d 904, 53 Ill. Dec. 721, 730, 424 N.E.2d 356, 365 (4th Dist.1981). A different line of cases holds that liability can be imposed under the Act only where public injury or an effect on consumers generally is alleged. See Horsell Graphic Industries, Ltd. v. Valuation Counselors, Inc., 639 F. Supp. 1117, 1122 (N.D.Ill.1986); Heritage Insurance Co. of America v. First National Bank of Cicero, 629 F. Supp. 1412, 1419 (N.D.Ill.1986); UNR Industries, Inc. v. Continental Insurance Co., 623 F. Supp. 1319, 1331 (N.D. Ill.1985); Newman-Green, Inc. v. Alfonzo-Larrain, 590 F. Supp. 1083, 87 (N.D.Ill. 1984); Evanston Motor Company v. Mid-Southern Toyota Distributors, Inc., 436 F. Supp. 1370, 1374 (N.D.Ill.1977); Frahm v. Urkovich, 113 Ill.App.3d 580, 69 Ill. Dec. 572, 576, 447 N.E.2d 1007, 1011 (1st Dist. 1983); Exchange National Bank v. Farm Bureau Life Insurance Co. of Michigan, 108 Ill.App.3d 212, 63 Ill. Dec. 884, 887, 438 N.E.2d 1247, 1250 (3d Dist.1982).
In determining the law on this issue, this court is bound by the doctrine set forth in Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938), under which a federal district court sitting in a diversity action must follow the "predictive approach" by applying the law that the supreme court of the state would apply. McKenna v. Ortho Pharmaceutical Corp., 622 F.2d 657, 661 (3d Cir.1980), cert. denied, 449 U.S. 976, 101 S. Ct. 387, 66 L. Ed. 2d 237 (1980). Thus, in the instant diversity action, this court must apply the law that the Illinois Supreme Court would apply.
This court finds that the view which requires a public injury or effect on consumers generally to impose liability under the Act is the rational position which the Supreme Court of Illinois would adopt on this issue. Particularly persuasive is the appellate court's reasoning in Exchange National Bank, supra, in which the court stated:
Every individual breach of contract between two parties does not amount to a cause of action cognizable under the Act. If it did, common law breach of contract actions would be supplemented in every case with an additional and redundant remedy. Such is not the intention of the Consumer Fraud Act.
63 Ill. Dec. 887, 438 N.E.2d at 1250. See also Newman-Green, supra, 590 F.Supp. at 1085 and Heritage, supra, 629 F.Supp. at 1419 (noting that were public injury not required under the Act, Illinois common law of fraud and contracts would effectively be supplanted by the Act).
In the instant case, plaintiff has not alleged any public injury or general effect on consumers. Plaintiff has only alleged an isolated breach of contract, a private wrong. These allegations cannot sustain a cause of action under the Illinois Consumer Fraud and Deceptive Business Practices Act. Accordingly, defendant's motion to dismiss is granted with respect to Count II.
III. CONCLUSION
For the foregoing reasons, defendant's motion to dismiss is denied with respect to *441 Count I and granted with respect to Count II.
IT IS SO ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265697/ | 657 F. Supp. 235 (1987)
Keith FLOWER, Plaintiff,
v.
NORDSEE, INC., Defendant.
Civ. No. 85-0377-P.
United States District Court, D. Maine.
March 24, 1987.
*236 Daniel R. Judson, Thomas J. Hunt, Boston, Mass., Richard Morton, Farmington, Me., for plaintiff.
Neal K. Stillman, Leonard W. Langer, Portland, Me., for defendant.
MEMORANDUM OF DECISION AND ORDER ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT
GENE CARTER, District Judge.
This case is before the Court on Defendant's Motion for Partial Summary Judgment on Counts III and IV of Plaintiff's Complaint. For the reasons to be stated below, the Court will grant the motion in part and deny it in part.
Plaintiff Keith Flower injured his left ring finger while working aboard the F/V NORDSEE on August 3, 1984. He brought this action seeking recovery under the Jones Act, 46 U.S.C. § 688 (1982) (Count I), and the doctrine of unseaworthiness (Count II); he also seeks maintenance and cure (Count III) and punitive damages for willful failure to pay maintenance and cure (Count IV). Defendant Nordsee, Inc. now moves for partial summary judgment on Counts III and IV, relying on the pleadings, Plaintiff's deposition testimony and answers to interrogatories, and an affidavit of the NORDSEE's captain, Rodney King. In opposition thereto, Plaintiff has submitted his attorney's affidavit with attachments. After reviewing the materials and the parties' memoranda, the Court makes the following determinations.
Plaintiff's claim for maintenance is predicated on the assertion that he owes his parents approximately $1,050 for room and board for the three months (at $350 per month) during which he was unable to work and lived with them. There is little, if any, evidence that Plaintiff ever actually paid his parents anything to cover this three-month period, but an issue of material fact remains as to whether Plaintiff is genuinely in debt to his parents therefor. Although a seaman may not recover maintenance if parents or relatives support him during the recovery period, e.g., Nichols v. Barwick, 792 F.2d 1520, 1523-24 (11th Cir. 1986) (citing Springborn v. American Commercial Barge Lines, Inc., 767 F.2d 89, 95 (5th Cir.1985)), a seaman who actually incurs expenses may recover maintenance. See id. If Plaintiff had lived on credit in a boarding house during his recovery, he could certainly assert a claim for maintenance in the amount of his indebtedness even though he had not yet actually paid out any monies for his support. The fortuity that Plaintiff lived with his parents during the recovery period should not change this result, so long as Plaintiff can show that he actually is indebted to them. Although there is little in the record to suggest that this is the case, there is enough to preclude summary judgment on that portion of Count III seeking maintenance payments.
Plaintiff's claim for cure is predicated solely on the assertion that, because he still occasionally suffers pain as a result of his injury, he might incur medical expenses in the future, for which Defendant could be held liable to him under the doctrine of cure. (It is undisputed that Defendant has promptly paid all of Plaintiff's medical bills to date arising out of the injury at issue.) Although Plaintiff is entitled to recover definitely ascertainable future medical expenses, *237 see Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 58 S. Ct. 651, 82 L. Ed. 993 (1938), there is absolutely nothing in the record to support such a determination. The record shows that Plaintiff has not received medical care in connection with his injury since 1984, and there is not a shred of evidence that Plaintiff may require such care in the future. There is no genuine issue of fact preventing the Court from concluding that Plaintiff's future medical expenses are entirely speculative; summary judgment is therefore appropriate on that portion of Count III seeking payments for cure. If in the future Plaintiff does in fact incur medical expenses growing out of this injury, he may bring another action to recover payments for cure at that time. Pelotto v. L & N Towing Co., 604 F.2d 396, 401 (5th Cir.1979).
Plaintiff's Count IV seeks punitive damages on the ground that Defendant's failure to pay maintenance and cure was callous, willful, or recalcitrant. See Robinson v. Pocohontas, Inc., 477 F.2d 1048, 1051-52 (1st Cir.1973). Because Defendant has satisfied its existing obligation to pay cure, summary judgment is appropriate on that portion of Count IV alleging willful failure to pay cure. But genuine issues of material fact remain as to whether Defendant willfully failed to pay maintenance. Assuming, arguendo, that such payments were due, see supra, the record suggests that Plaintiff's attorney sent three requests for maintenance to Defendant, on August 15, and 23 and September 11, before receiving the first and only maintenance payment of $100 from Defendant on September 30. On this record there is a genuine issue of fact as to whether Defendant's state of mind was callous, willful, or recalcitrant; summary judgment is thus inappropriate.
It is therefore ORDERED that Defendant's Motion for Partial Summary Judgment on Counts III and IV is GRANTED insofar as those counts seek recovery for cure and willful failure to pay cure and is in all other respects DENIED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265701/ | 657 F. Supp. 2d 248 (2009)
Sergiy KURDYUKOV, Plaintiff,
v.
UNITED STATES COAST GUARD, Defendant.
Civil Action No. 07-1131 (RBW).
United States District Court, District of Columbia.
September 29, 2009.
*251 Sergiy Kurdyukov, Fort Dix, NJ, pro se.
Diane M. Sullivan, United States Attorney's Office, Washington, DC, for Defendant.
MEMORANDUM OPINION
REGGIE B. WALTON, District Judge.
This matter is before the Court on the United States Coast Guard's renewed motion for summary judgment. See Memorandum of Points and Authorities in Support of Defendant's Renewed Motion for Summary Judgment ("Def.'s Renewed Mem."). For the reasons discussed below, the motion will be granted.
I. BACKGROUND
In December 2006, the plaintiff submitted a request to the United States Coast Guard ("Coast Guard") under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552 (2006), for the following information:
(1) All the documents from the Government of Panama authorizing the U.S. Coast Guard to stop[,] board and search the M/V CHINA BREEZE.
(2) All the documents from the Government of Panama authorizing the U.S. Coast Guard to detain the M/V[ ] CHINA BREEZE on behalf of the Government of Panama.
(3) All the documents from the Government of Panama authorizing the U.S. Coast Guard to remain on board the M/V CHINA BREEZE and escort the vessel to a U.S. port to conduct a dockside boarding.
(4) All the documents showing the authorization from the Government of Panama to transfer its jurisdiction for prosecution to the United States when the M/V CHINA BREEZE entered U.S. waters.
Memorandum of Points and Authorities in Support of Defendant's Motion for Summary *252 Judgment ("Def.'s Mem."),[1] Declaration of Joseph Kramek ("Kramek Decl."), Attachment ("Attach.") A (December 27, 2006 Freedom of Information/Privacy Act Request) at 1. Among the responsive records was a four-page Intelligence Information Report ("IIR") maintained by the Coast Guard Intelligence Coordination Center. Def.'s Mem., Declaration of Marty J. Martinez ¶ 4. The IIR "contain[ed] information relating to a drug interdiction and seizure of the M/V China Breeze motor vessel on May 27, 1999[,]" which included such items as "vessel information, personnel aboard and arrested data, photograph data, and information relative to the type and amount of drugs seized, and involved entities." Id.; see id., Kramek Decl. ¶¶ 17, 19; see also id., Attach. G (redacted Information Report of CHINA BREEZE boarding and cocaine seizure) & Vaughn Index (Doc. No. 4). The Coast Guard released this report in part, redacting information under Exemptions 2, 6, and 7. Id., Kramek Decl. ¶ 19. Because the Coast Guard did not establish that its decision to withhold information under Exemptions 2 and 7 was proper, the Court denied its first summary judgment motion. Kurdyukov v. U.S. Coast Guard, 578 F. Supp. 2d 114, 129 (D.D.C.2008). The Court deferred its ruling on the Coast Guard's decision to redact the names of government and non-government employees mentioned in the IIR until such time as the agency filed a renewed summary judgment motion. Id. at 127 n. 7.
Now before the Court is the Coast Guard's renewed motion for summary judgment and the Supplemental Vaughn Index to the Declaration of Lieutenant Commander Joseph Kramek ("Supp.Index"). The Supplemental Vaughn Index addresses the deficiencies of the Coast Guard's initial dispositive motion, declarations and Vaughn Index by setting forth the agency's reasons for withholding information from the IIR under Exemptions 2, 6, 7(C), and 7(E) of the FOIA.[2]
II. DISCUSSION
A. Summary Judgment Standard of Review
The Court may grant a motion for summary judgment if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits or declarations, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). However, factual assertions in the moving party's affidavits may be accepted as true unless the opposing party submits his own affidavits or declarations or documentary evidence to the contrary. Neal v. Kelly, 963 F.2d 453, 456 (D.C.Cir.1992).
In a FOIA case, the Court may grant summary judgment based on the information provided in affidavits or declarations when they describe "the documents and the justifications for nondisclosure with reasonably specific detail, demonstrate that the information withheld logically falls within the claimed exemption, and are not controverted by either contrary *253 evidence in the record nor by evidence of agency bad faith." Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C.Cir.1981). Such affidavits or declarations are accorded "a presumption of good faith, which cannot be rebutted by `purely speculative claims about the existence and discoverability of other documents.'" SafeCard Servs., Inc. v. Sec. & Exch. Comm'n, 926 F.2d 1197, 1200 (D.C.Cir.1991) (quoting Ground Saucer Watch, Inc. v. Cent. Intelligence Agency, 692 F.2d 770, 771 (D.C.Cir.1981)).
"In opposing a motion for summary judgment or cross-moving for summary judgment, a FOIA plaintiff must offer more than conclusory statements." Schoenman v. Fed. Bureau of Investigation, 573 F. Supp. 2d 119, 134 (D.D.C.2008) (citations omitted). Rather, "a plaintiff pursuing an action under FOIA must establish that either: (1) the Vaughn index does not establish that the documents were properly withheld; (2) the agency has improperly claimed an exemption as a matter of law; or (3) the agency has failed to segregate and disclose all nonexempt material in the requested documents." Id. (citations omitted).
B. Exemptions
The Coast Guard bears the burden of justifying its decision to withhold records or portions of records. See 5 U.S.C. § 552(a)(4)(B) (2006). "To enable the Court to determine whether documents properly were withheld, the agency must provide a detailed description of the information withheld through the submission of a so-called `Vaughn index,' sufficiently detailed affidavits or declarations, or both." Bigwood v. U.S. Agency for Int'l Dev., 484 F. Supp. 2d 68, 74 (D.D.C.2007) (citations omitted); see Founding Church of Scientology v. Bell, 603 F.2d 945, 949 (D.C.Cir. 1979) (while there is no set form for a Vaughn index, the D.C. Circuit has identified "three indispensable elements of a Vaughn index: (1) The index should be contained in one document, complete in itself. (2) The index must adequately describe each withheld document or deletion from a released document. (3) The index must state the exemption claimed for each deletion or withheld document, and explain why the exemption is relevant."). "Any measure will adequately aid a court if it `provide[s] a relatively detailed justification, specifically identif[ies] the reasons why a particular exemption is relevant and correlat[es] those claims with the particular part of a withheld document to which they apply.'" Judicial Watch, Inc. v. Food and Drug Admin., 449 F.3d 141, 146 (D.C.Cir.2006) (quoting Mead Data Cent., Inc. v. U.S. Dep't of the Air Force, 566 F.2d 242, 251 (D.C.Cir.1977)). "[T]he precise form of the agency's submission whether it be an index, a detailed declaration, or a narrativeis immaterial." Schoenman, 573 F.Supp.2d at 134 (citations omitted). In this case, the Coast Guard relies on the Kramek Declaration and the original and a Supplemental Vaughn Indices from which the Court concludes it can "derive ... a clear explanation of why each document or portion of a document withheld is putatively exempt from disclosure." Manna v. U.S. Dep't of Justice, 832 F. Supp. 866, 873 (D.N.J.1993) (internal quotation marks and citation omitted).
1. Exemption 2
Exemption 2 of the FOIA, which shields from disclosure information that is "related solely to the internal personnel rules and practices of an agency," 5 U.S.C. § 552(b)(2), applies if the information that is sought meets two criteria. First, such information must be "used for predominantly internal purposes[.]" Crooker v. *254 Bureau of Alcohol, Tobacco and Firearms, 670 F.2d 1051, 1073 (D.C.Cir.1981); see Nat'l Treasury Employees Union v. U.S. Customs Serv., 802 F.2d 525, 528 (D.C.Cir. 1986). Second, the agency must show either that "disclosure may risk circumvention of agency regulation," or that "the material relates to trivial administrative matters of no genuine public interest." Schwaner v. Dep't of the Air Force, 898 F.2d 793, 794 (D.C.Cir.1990) (internal quotation marks and citations omitted). "Predominantly internal documents the disclosure of which would risk circumvention of agency statutes and regulations are protected by the so-called `high 2' exemption." Schiller v. Nat'l Labor Relations Bd., 964 F.2d 1205, 1207 (D.C.Cir.1992). "High 2" exempt information is "not limited ... to situations where penal or enforcement statutes could be circumvented." Id. at 1208. If, however, the material at issue merely relates to trivial administrative matters of no genuine public interest, it is deemed "low 2" exempt material.[3]See Founding Church of Scientology, Inc. v. Smith, 721 F.2d 828, 830-31 n. 4 (D.C.Cir. 1983).
The Coast Guard has withheld "[i]nformation that might reveal Coast Guard and other agency law enforcement or inter-agency process, procedure, internal organization and similar matters[,] including all headings, message headings, message addresses, routine controls, internal system management of messages and other agency information" on the ground that it "is not responsive to [the plaintiff's] FOIA request and entirely germane to the substance of the IIR[.]" Def.'s Mem., Kramek Decl. ¶ 19. From page 1 of the IIR, the Coast Guard has withheld "administrative codes related to intelligence and law enforcement matters as well as information related to limitations on the use of the IIR including release to foreign partners," Def.'s Renewed Mem., Supp. Index at 1, and from page 4, it has withheld "information related to limitations on the use of the IIR including release to foreign partners," id. at 2. The declarant of the Supplemental Vaughn Index represents that disclosure of this information "could reveal with whom and the extent the Coast Guard communicates sensitive law enforcement and intelligence matters with other law enforcement agencies and foreign partners." Id. at 1; see also id. at 2.
The plaintiff objects to the withholding of the purported "high 2" information "pertaining to communications between the U.S. Coast Guard and other law enforcement agencies and foreign partners with respect to this case, [because such information] lies at the heart of plaintiff's request[.]" Response to Defendant's Renewed Motion for Summary Judgment ("Pl.'s Opp'n") at 2. He asserts that there is a genuine issue of material fact in dispute as to whether the Coast Guard or the Drug Enforcement Administration ("DEA") was the lead agency in effecting the seizure of the vessel. Id. at 1-2. He *255 takes this position because although both the DEA and the Coast Guard have identified the DEA as the "lead agency," id. at 2, "the official information which the defendant [has already] released to [him] clearly contradicts the premise that the [DEA] was the lead agency," id. at 2-3. Moreover, he contends that the Coast Guard "has not been able to produce any documents establishing that the [DEA] did, in fact, contact the ... Coast Guard prior to May 27, 1999 to inform them that the China Breeze was transporting cocaine," id. at 3, which he contends supports his belief "that the IIR could contain information establishing that the Coast Guard, in reality, [was] the lead agency," id.
However, the plaintiff's beliefs as to the events preceding the Coast Guard's seizure of the China Breeze are not relevant to this FOIA action. Here, all the Coast Guard need show is that the administrative codes withheld fall within the scope of Exemption 2. The Court concludes that the agency adequately explains that the administrative codes relate to law enforcement and intelligence matters, that the codes are predominantly used for internal purposes, and that their disclosure may risk circumvention of the laws and regulations it is obliged to enforce. These representations are clearly sufficient to support the defendant's position that this information has properly been withheld under Exemption 2.
2. Exemptions 6 and 7(C)
Both Exemptions 6 and 7(C) of the FOIA are designed to protect the personal privacy interests of individuals named or identified in government records. Exemption 6 protects "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." 5 U.S.C. § 552(b)(6). Exemption 7(C), however, applies only to "records or information compiled for law enforcement purposes," to the extent that their disclosure "could reasonably be expected to constitute an unwarranted invasion of personal privacy." 5 U.S.C. § 552(b)(7)(C). Under this latter exemption, an agency may withhold categorically certain information in law enforcement records if its disclosure could reasonably be expected to constitute an unwarranted invasion of personal privacy. U.S. Dep't of Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749, 756, 109 S. Ct. 1468, 103 L. Ed. 2d 774 (1989). Because the Court already has concluded that all the records responsive to the plaintiff's FOIA request were compiled for law enforcement purposes, Kurdyukov, 578 F.Supp.2d at 127, the Court will address only an analysis of the applicability of Exemption 7(C). See Simon v. Dep't of Justice, 980 F.2d 782, 785 (D.C.Cir.1992).
To determine whether Exemption 7(C) applies, the Court balances "the privacy interests that would be compromised by disclosure against the public interest in release of the requested information." Davis v. U.S. Dep't of Justice, 968 F.2d 1276, 1281 (D.C.Cir.1992). Exemption 7(C) recognizes that the stigma of being associated with any law enforcement investigation affords broad privacy rights to those who are connected in any way with such an investigation unless a significant public interest exists for disclosure. See Reporters Comm. for Freedom of the Press, 489 U.S. at 773-75, 109 S. Ct. 1468; SafeCard Servs., 926 F.2d at 1205-06. "Where a legitimate privacy interest is implicated, the requester must (1) show that the public interest sought to be advanced is a significant one, an interest more specific than having the information for its own sake, and (2) show the information *256 is likely to advance that interest." Sussman v. United States Marshals Serv., 494 F.3d 1106, 1115 (D.C.Cir.2007) (internal question marks and citations omitted).
Under Exemption 7(C), the Coast Guard has redacted from the IIR "the names of both Government employees and non-government employees named in the IIR, including contact information and personal information such as passport numbers, birthdates, and all names of personnel on board the M/V CHINA BREEZE, except [the plaintiff's] name and personal information[.]" Def.'s Mem., Kramek Decl. ¶ 19. The Coast Guard considers the release of this personal information "an unwarranted invasion into [the] personal and... privacy interests of these individuals[, which it contends,] outweighs any general interest in disclosure." Def.'s Renewed Mem., Supp. Index at 1. In the agency's view, because "[t]he IIR relates to a criminal matter ... there is the strong possibility of the stigma of being associated with a law enforcement investigation" that would result from the disclosure of the redacted information. Id. Further, with respect to "the name and phone number for the government employee listed as the point of contact for the IIR," the declarant of the Vaughn Index represents that, "[g]iven that the law enforcement action involved a multi-ton seizure of cocaine, this information has [the] potential to result in threats against the individual." Id. at 2.
The plaintiff concedes that "[t]he names and personal information of the U.S. Coast Guard crew members, which may include addresses, passport numbers and other personal data," is exempt from disclosure. Pl.'s Opp'n at 3. However, he argues that "the name[,] rank and title of the lead officer who coordinated the investigation with the D.E.A. prior to the interception of the shipif such person does indeed existshould be released to the plaintiff" on the ground that this information "lies outside of the boundaries of Exemption 7(C)." Id. This information, he asserts, "focuses on the citizens' right to be informed about what the government is up to." Id. at 4 (citation and internal quotation marks omitted).
"The D.C. Circuit has consistently held that [E]xemption 7(C) protects the privacy interests of all persons mentioned in law enforcement records, including investigators, suspects, witnesses and informants, and has determined that such third-party information is categorically exempt from disclosure under [E]xemption 7(C), in the absence of an overriding public interest in its disclosure." Lewis v. U.S. Dep't of Justice, 609 F. Supp. 2d 80, 84 (D.D.C.2009) (internal quotation marks and citations omitted); see Rugiero v. U.S. Dep't of Justice, 257 F.3d 534, 552 (6th Cir.2001) (concluding that agency properly withheld identifying information concerning agents, personnel, and third parties after balancing their privacy interests against public disclosure), cert. denied, 534 U.S. 1134, 122 S. Ct. 1077, 151 L. Ed. 2d 978 (2002); SafeCard Servs., 926 F.2d at 1206 (holding that "unless access to the names and addresses of private individuals appearing in files within the ambit of Exemption 7(C) is necessary in order to confirm or refute compelling evidence that the agency is engaged in illegal activity, such information is exempt from disclosure"). Here, the plaintiff articulates no cognizable public interest that outweighs the significant privacy interests of any individuals named in the information withheld by the defendant. See generally Pl.'s Opp'n. Moreover, any personal interest plaintiff may have in the individual's identity does not qualify as a public interest favoring disclosure. See Oguaju v. United States, 288 F.3d 448, 450 (D.C.Cir.2002), vacated and remanded on other grounds, 541 U.S. 970, 124 S.Ct. *257 1903, 158 L. Ed. 2d 464 (2004), reinstated, 378 F.3d 1115 (D.C.Cir.2004).
For all of the above reasons, the Court concludes that the Coast Guard has properly withheld under Exemption 7(C) the names of and personal information concerning the government employees, crew members, and other third parties mentioned in the IIR.
3. Exemption 7(E)
Exemption 7(E) of the FOIA protects from disclosure "records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information... would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law[.]" 5 U.S.C. § 552(b)(7)(E); see Long v. U.S. Dep't of Justice, 450 F. Supp. 2d 42, 79 (D.D.C.2006); Blanton v. U.S. Dep't of Justice, 63 F. Supp. 2d 35, 49 (D.D.C.1999); Fisher v. U.S. Dep't of Justice, 772 F. Supp. 7, 12 n. 9 (D.D.C.1991), aff'd, 968 F.2d 92 (D.C.Cir. 1992).
Under Exemption 7(E), the Coast Guard has redacted from pages 1 and 2 of the IIR "information regarding and relating to law enforcement surveillance (both type and location), methods, and tactics[,]" including information describing "methods for detection and monitoring of vessels and information sought during the course of a boarding, the evaluation of such information including Coast Guard interpretations, as well as the significance of such information from a law enforcement and intelligence perspective." Def.'s Renewed Mem., Supp. Index at 1. According to the defendant, release of this information "could reveal techniques and procedures used in law enforcement operations which could lead to the circumvention of maritime counter-narcotic operations." Id.
The plaintiff responds that he "is not interested in exposing secret tactics, guidelines, procedures, or surveillance methods that were most likely never used in the first place." Pl.'s Opp'n at 4. He represents that, according to both the Drug Enforcement Administration ("DEA") and the Coast Guard, there was "a confidential informant on board [the M/V CHINA BREEZE] who gave the signal shortly after the drugs were loaded onto the ship," and argues that "highly secretive special tactics were likely not employed." Id. at 2; see id. at 4. In his view, the Coast Guard's "unwillingness to release the IIR only helps bolster plaintiff's claims of foul play." Id. at 4.
An agency may withhold information from disclosure where, as here, it would provide insight into its investigatory or procedural techniques. See Morley v. Cent. Intelligence Agency, 508 F.3d 1108, 1129 (D.C.Cir.2007) (concluding that the CIA properly withheld information revealing security clearance procedures because release "could render those procedures vulnerable and weaken their effectiveness at uncovering background information on potential candidates"). Based on the Coast Guard's representations and absent evidence from the plaintiff to rebut the presumption of good faith afforded to the agency's declaration, the Court concludes that the Coast Guard has properly withheld information pertaining to law enforcement surveillance, methods, and tactics because its disclosure could allow others to circumvent maritime counter-narcotics efforts in the future. See, e.g., Morley v. Cent. Intelligence Agency, 453 F. Supp. 2d 137, 157 (D.D.C.2006) (permitting the withholding of information pertaining to security clearances and background investigations *258 on the ground that "disclosure of CIA security clearance and investigatory processes would risk circumvention of those processes in the future"), rev'd on other grounds, 508 F.3d 1108 (D.C.Cir. 2007); Fisher, 772 F.Supp. at 12 (upholding FBI's decision to withhold information about law enforcement techniques where disclosure would impair effectiveness and context of the documents "could alert subjects in drug investigations about techniques used to aid the FBI").
C. Segregability
If a record contains information that is exempt from disclosure, any reasonably segregable information must be released after deleting the exempt portions, unless the nonexempt portions are inextricably intertwined with exempt portions. 5 U.S.C. § 552(b); see Stolt-Nielsen Transp. Group, Ltd. v. United States, 534 F.3d 728, 734 (D.C.Cir.2008); Trans-Pacific Policing Agreement v. U.S. Customs Serv., 177 F.3d 1022 (D.C.Cir.1999). The Court errs if it "simply approve[s] the withholding of an entire document without entering a finding on segregability, or the lack thereof." Powell v. U.S. Bureau of Prisons, 927 F.2d 1239, 1242 n. 4 (D.C.Cir.1991) (quoting Church of Scientology v. Dep't of the Army, 611 F.2d 738, 744 (9th Cir.1979)). Here, having reviewed defendant's declarations, its Vaughn Indices, and a redacted copy of the IIR, the Court concludes that all reasonably segregable material has been released.
III. CONCLUSION
Based on all of the reasons set forth above, the Court concludes that the Coast Guard properly has withheld information under Exemptions 2, 7(C), and 7(E) from the IIR and has released to the plaintiff all reasonably segregable information. Accordingly, the Court will grant the defendant's renewed motion for summary judgment. An Order consistent with the rulings rendered by the Court is issued separately.
NOTES
[1] This motion is the initial filing made by the defendant on November 19, 2007.
[2] Although the redacted copy of the IIR suggests that certain information had been withheld under FOIA Exemption 5, see Kramek Decl., Attach. G at 1, 4, the Coast Guard apparently relies only on Exemptions 2, 6, and 7. See Kramek Decl. ¶ 14 & Vaughn Index (Doc. No. 4); see id., Supp. Index (Doc. No. 4 (Att. G)).
[3] "Low 2" FOIA exempt information includes such items as "file numbers, initials, signature and mail routing stamps, references to interagency transfers, and data processing references," Scherer v. Kelley, 584 F.2d 170, 175 (7th Cir.1978), cert. denied, 440 U.S. 964, 99 S. Ct. 1511, 59 L. Ed. 2d 778 (1979), and other "trivial administrative data such as ... data processing notations[ ] and other administrative markings," Coleman v. Fed. Bureau of Investigation, 13 F. Supp. 2d 75, 78 (D.D.C. 1998) (citation omitted). Here, the "low 2" information withheld includes "message routing data for U.S. Government agencies and organizational entities, IIR report numbers, file and record numbers, and notations related to file systems which are predominantly used for internal purposes." Supp. Index at 1. Plaintiff concedes that this "low 2" information properly has been withheld. Response to Defendant's Renewed Motion for Summary Judgment at 2. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265836/ | 238 P.3d 1201 (2010)
PACIFIC TOPSOILS, INC., a Washington Corporation, Appellant,
Dave Forman, an individual, Plaintiff,
v.
The WASHINGTON STATE DEPARTMENT OF ECOLOGY, a Division of the State of Washington, Respondent.
No. 39691-2-II.
Court of Appeals of Washington, Division 2.
August 24, 2010.
*1203 Jane Ryan Koler, Law Office of Jane Ryan Koler PLLC, Gig Harbor, WA, for Appellant.
Joan Margaret Marchioro, Wa. State Atty General's Ofc/Ecology Div., Olympia, WA, for Respondent.
PART PUBLISHED OPINION
WORSWICK, J.
¶ 1 Pacific Topsoils, Inc. (PTI) appeals from a Pollution Control Hearings Board (Board) order upholding fines assessed against PTI by the Washington State Department of Ecology (DOE) for filling wetlands without proper permits. PTI argues: (1) the DOE lacks statutory authorization to regulate wetlands under RCW 90.48.080; (2) chapter 90.48 RCW and WAC 173-201A-300 are unconstitutionally vague as to filling wetlands; (3) the DOE's Order 4095 and Penalty 4096 violated due process by failing to provide PTI with proper notice of the basis of the fines; (3) the Board violated PTI's due process rights by enforcing arbitrary time limits during its hearing, thus preventing it from cross-examining witnesses and calling surrebuttal witnesses; and (4) several of the Board's conclusions contain errors of law and substantial evidence does not support most of its findings. We reject PTI's arguments and affirm the Board's order.
FACTS
Procedural Facts
¶ 2 PTI, a soil processing company, owns property on Smith Island in Snohomish County. Smith Island has large areas of historically documented wetlands. A wetland study previously performed on Smith Island described it as a "mosaic of wetlands." Transcript of Proceedings (TP) (Feb. 20, 2008) at 68.
*1204 ¶ 3 PTI planned to expand its Smith Island operations. As part of its plans, PTI placed approximately 12 acres of fill material on the site without permits of any kind. The fill pile, estimated to be 15 to 17 feet deep and 75,000 to 150,000 cubic yards, would require 15,000 dump truck loads to remove. PTI did not test the fill material for contaminants prior to placing it at the site.
¶ 4 On October 16, 2006, the DOE received a complaint about PTI's activities on Smith Island. The DOE assigned Wetland Specialist Paul Anderson to investigate the complaint. After a site visit on October 27, Anderson determined that PTI had filled wetlands. At the conclusion of his site visit, he informed PTI's Environmental Director, Janusz Bajsarowicz, of his conclusion and requested a wetland delineation. Bajsarowicz informed Anderson that PTI's consulting firm, Parametrix, was preparing a wetland delineation. Over the next four months, the DOE made several requests to PTI for the wetland delineation, but PTI did not provide it.
¶ 5 On March 7, 2007, the DOE issued Order 4095, which stated in pertinent part:
On or before October 17, 2006, approximately 12 acres of fill material was discharged into wetlands at the [PTI] facility on Smith Island, Snohomish County. There is no record at the Department or Snohomish County of the submission of a permit application for the placement of said fill, nor a record of any permit for the placement of fill in the wetlands having been issued. Under RCW 90.48.080 and RCW 90.48.160, it is unlawful to discharge polluting matters into waters of the state without a permit. Discharge of such polluting matters into waters of the state is also a violation of the anti-degradation policy, WAC 173-201A-300.
Administrative Record (AR) at 1602. Order 4095 also stated that the DOE issued it under RCW 90.48.120(2) and specified compliance requirements for PTI.
¶ 6 On the same day, the DOE also issued an $88,000 civil penalty to PTI, Penalty 4096. Penalty 4096 provided that the DOE issued it under RCW 90.48.144(3), and it read in pertinent part:
Prior to January 24, 2006, fill was placed in approximately 12 acres of wetlands at [PTI]'s Smith Island facility without a permit in violation of RCW 90.48.080. Discharge of such polluting matters into waters of the state is also a violation of the anti-degradation policy, WAC 173-201A-300. Fill remains in place in the wetlands. Each and every day the fill remains in the wetlands constitutes a separate and distinct violation of RCW 90.48.080 and 90.48.160, and WAC 173-201A-300.
AR at 1605.
¶ 7 PTI appealed Order 4095 and Penalty 4096 to the Board. The Board's prehearing order, dated May 11, 2007, required the submission of hearing briefs and specified that they not exceed 15 pages. The prehearing order also provided that the parties could obtain relief from the page limit only by motion and set September 6, 2007, as the filing deadline for dispositive motions.
¶ 8 On February 13, 2008, PTI filed a 61 page brief, as well as numerous attachments. The DOE moved to strike the brief for its noncompliance with the prehearing order.
¶ 9 In granting the motion to strike, the Board articulated factors supporting its decision, including that the brief raised constitutional issues outside its jurisdiction and that PTI had not filed any dispositive motions on the legal arguments raised. The Board also identified the purposes of a hearing brief and found that PTI's brief went beyond those purposes. The Board granted the motion to strike but allowed PTI to submit a hearing brief conforming to the prehearing order's page limits.
¶ 10 The Board originally scheduled one day for the hearing but extended the allotted time to two days at PTI's request. During a prehearing conference call, at PTI's request, the Board agreed to provide six hours of hearing time per day, rather than the normal five and one-half hours. The parties agreed to split the allotted time equally, and the Board used a clock to keep track of the time. PTI made no further requests for additional hearing time before the hearing.
*1205 ¶ 11 At the hearing, the DOE presented its case first, because it bore the burden of proof, and reserved time for rebuttal. After PTI cross-examined the DOE's witnesses; presented its responsive case; and, on the second day, exceeded its allotted time by 25 minutes, the Board on its own motion granted PTI an additional 45 minutes to present its case "in the interests of trying to make sure this is a fair proceeding that allows sufficient time for [PTI] to finish up its case." TP (Feb. 21, 2008) at 474-75. PTI did not argue that the extra time allotted was insufficient or that it could not present the remainder of its case.
¶ 12 Following presentation of its last witness, PTI rested. PTI did not assert that it needed additional time; instead, it indicated that it would use its remaining time to cross-examine the DOE's rebuttal witnesses. Only after exhausting this remaining additional time did PTI orally request additional hearing time, arguing that it needed this additional time to present surrebuttal witnesses. The Board denied this oral motion and PTI's subsequent written motion for an extension of the hearing.
¶ 13 Ultimately, the Board fully affirmed Order 4095 and Penalty 4096. PTI then appealed the Board's order to the trial court, which affirmed the Board's order in full. The trial court also denied PTI's due process and vagueness challenges. PTI appeals.
Substantive Facts
¶ 14 A wetland is a transitional land that lies between terrestrial and aquatic systems where the water table is at or near the surface or where water covers the land. Three indicators confirm the existence of a wetland: (1) hydrophytic vegetation adapted to saturated soil conditions, (2) hydric soils, and (3) hydrology. WAC 173-22-080(1).
¶ 15 The Washington State Wetland Delineation and Identification Manual requires use of the "atypical situations methodology" for wetland delineation to determine the previous existence of a wetland and to decide where a wetland boundary existed in the past when it is no longer obvious in the present due to unauthorized alteration of one or more wetland indicators.[1] Because the presence of unauthorized fill material had altered previous site characteristics and conditions, the manual required the use of the atypical situations methodology. Both Anderson and PTI's consultant, Parametrix, used that methodology in their contemporaneous site investigations. Their investigations found the presence of all three wetland indicators.
¶ 16 First, both the DOE and Parametrix wetland specialists determined that, although the vegetation that existed before the fill replacement was no longer present under the fill, the wetland vegetation surrounding the fill represented what once grew on the filled areas. Specifically, the Parametrix report stated:
A distinction between vegetative communities present in undisturbed wetland areas and filled wetland areas was not observed in review of aerial photographs, indicating fill areas previously were vegetated with a similar hydrophytic vegetative community found throughout undisturbed portions of the wetland.
AR at 1645. Additionally, the site contained a small, unfilled area situated within a slight depression and surrounded on all sides by fill material. Observations of its plant species regeneration, buried plant material, and native soil layers, as well as review of historic aerial photographs, established that this small area is a wetland and is representative of the adjacent surrounding land under the fill.
¶ 17 Second, the atypical situations methodology requires a description and analysis of the site alteration and its effects on the soils and a characterization of soils that previously occurred, including the buried soils when fill material has been placed over the original soil. Indicators of hydric soils include observations of surface water or saturated *1206 soils and the listing of the soil as a hydric soil.
¶ 18 The National Cooperative Soil Survey describes the soils at the site as Puget silty clay loam, a hydric soil. Furthermore, the presence of oxidized rhizospheres along living roots, composed of oxidized iron concentrations, are evidence of current or recent soil saturation. Investigations by the DOE, Parametrix, and PTI's wetlands expert, James Kelley, indicated the presence of oxidized rhizospheres in the soils surrounding living roots. Oxidized rhizospheres on living plant roots are a primary wetland hydrology indicator. The presence of oxidized rhizospheres on live roots indicates that wetland hydrology is active and present and that hydric soil indicators are a contemporary, not relict, feature. Furthermore, Parametrix's report indicated the presence of hydric soil indicators such as "low chroma colors, presence of redoximorphic features, and high organic content."[2] AR at 1644.
¶ 19 Finally, under the atypical situations methodology, to determine whether wetland hydrology previously occurred on a site, investigators must examine site alterations, the effects of alterations on area hydrology, and characteristics of hydrology that previously existed in the area. Evidence that hydrology existed prior to site alteration satisfies the hydrology criteria. Investigators may rely on indicators such as the presence of oxidized rhizospheres, sediment deposits (including dried algae), surface scouring, and soil survey data indicating positive wetland hydrology.
¶ 20 The DOE and Parametrix investigated the historic record. Although the site had been drained with dikes and ditches in the past for farming, these efforts were never completely successful. Photographic evidence from 1947 on shows the presence of water on the site for many years. The National Wetlands Inventory (Wetlands Inventory) of the United States Department of Fish and Wildlife Services identifies wetlands on much of the site. Additionally, the DOE's investigations indicated the presence of oxidized rhizospheres on live plant roots in the site's soil. Parametrix reviewed aerial photographs in addition to its field observations of inundation, saturation to the surface, oxidized rhizospheres, and landscape hydrologic patterns, and concluded this evidence indicated "a historic continuity of hydrologic regimes between wetland fill areas and undisturbed wetland areas." AR at 1645.
¶ 21 The DOE concluded that PTI had filled wetlands at its Smith Island site. Parametrix reached the same conclusion in its report. Parametrix identified and delineated two wetlands on the site and concluded that approximately 7.81 acres of wetlands were mechanically graded or filled with non-native soils. Although the site's wetlands do not provide high quality habitat, they do provide water quality and hydrologic functions by slowing down the water flow, absorbing pollutants, and decreasing the amount of potential erosion. Additionally, according to PTI's soil expert, the fill compacted the soil beneath it by a minimum of two feet.
ANALYSIS
Excluded Evidence
¶ 22 We do not consider appendices that are not part of the administrative record or factual assertions they supported. RAP 10.3(a)(8) ("[a]n appendix [to a brief] may not include materials not contained in the record on review without permission from the appellate court, except as provided in rule 10.4(c)"). Appendices 6 and 24 and one page of appendix 9 to the Appellant's Brief, marked "preliminary," are not part of the administrative record and we do not consider them.
¶ 23 Also, PTI, citing to RCW 34.05.562(1)[3] and a motion before the trial *1207 court, contends that the trial court erred when it denied its motion to expand the record to include documents relating to a settlement agreement entered into with Snohomish County after the Board hearing, because these documents undermine several of the Board's findings and conclusions. But the relevant facts relating to the Snohomish County action were before the Board. The trial court did not err in refusing to expand the record to include appendix 8 and we do not consider it here.
Statutory Authority
A. Waters of the State
¶ 24 PTI contends that the DOE possesses no statutory authority to impose fines for violations of chapter 90.48 RCW, the Water Pollution Control Act (WPCA), because the WPCA does not expressly include wetlands in its definition of "waters of the state." Appellant's Br. at 17. The DOE responds that it possesses the necessary statutory authority because RCW 90.48.020 includes wetlands as "other surface waters" in its definition of "waters of the state." Resp't's Br. at 18-25. We agree with the DOE.
¶ 25 We review the Board's orders under chapter 34.05 RCW, the Administrative Procedure Act. Postema v. Pollution Control Hearings Bd., 142 Wash.2d 68, 76-77, 11 P.3d 726 (2000). We sit in the same position as the superior court and apply the standards of review in RCW 34.05.570(3) directly to the agency record. Postema, 142 Wash.2d at 77, 11 P.3d 726. We may grant relief where the agency makes an erroneous interpretation or application of law, substantial evidence does not support the order, or the Board issues the order on an arbitrary or capricious basis. Postema, 142 Wash.2d at 77, 11 P.3d 726; RCW 34.05.570(3)(d), (e), (i). The party asserting invalidity of agency action bears the burden of establishing such invalidity. Postema, 142 Wash.2d at 77, 11 P.3d 726; RCW 34.05.570(1)(a).
¶ 26 The error of law standard applies to statutory construction. Postema, 142 Wash.2d at 77, 11 P.3d 726; RCW 34.05.570(3)(d). Under this standard, we may substitute our interpretation of the law for the agency's interpretation. Postema, 142 Wash.2d at 77, 11 P.3d 726. Ultimately, it is for the courts to determine the meaning and purpose of a statute. Postema, 142 Wash.2d at 77, 11 P.3d 726. But because the legislature designated the DOE as the regulating agency for the state's water resources, Washington courts give "great weight" to the DOE's interpretation of relevant statutes and regulations. Port of Seattle v. Pollution Control Hearings Bd., 151 Wash.2d 568, 593, 90 P.3d 659 (2004).
¶ 27 Our fundamental objective in statutory interpretation is to give effect to the legislature's intent. Dep't of Ecology v. Campbell & Gwinn, L.L.C., 146 Wash.2d 1, 9-10, 43 P.3d 4 (2002). If a statute's meaning is plain on its face, then we give effect to that plain meaning as an expression of legislative intent. State ex rel. Citizens Against Tolls (CAT) v. Murphy, 151 Wash.2d 226, 242, 88 P.3d 375 (2004). We discern plain meaning not only from the provision in question, but also from closely related statutes and the underlying legislative purposes. Murphy, 151 Wash.2d at 242, 88 P.3d 375. If a statute is susceptible to more than one reasonable interpretation after this inquiry, then the statute is ambiguous and we may resort to additional canons of statutory construction or legislative history. Campbell & Gwinn, 146 Wash.2d at 12, 43 P.3d 4.
¶ 28 We give effect to all statutory language, considering statutory provisions in relation to each other and harmonizing them to ensure proper construction. King County v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 142 Wash.2d 543, 560, 14 P.3d 133 (2000). We avoid construing a statute in a manner that results in "unlikely, absurd, or strained consequences." Glaubach v. Regence BlueShield, 149 Wash.2d 827, 833, 74 P.3d 115 (2003). Instead, we favor an interpretation consistent with the spirit or purpose of the enactment over a literal reading that renders the statute ineffective. Glaubach, *1208 149 Wash.2d at 833, 74 P.3d 115. In statutory construction, "includes" is a term of enlargement, while "means" is a term of limitation. Queets Band of Indians v. State, 102 Wash.2d 1, 4, 682 P.2d 909 (1984).
¶ 29 In 1945, the legislature enacted the WPCA. Laws of 1945, ch. 216. The purpose of the WPCA is "to maintain the highest possible standards to insure the purity of all waters of the state." RCW 90.48.010. In defining "waters of the state," RCW 90.48.020 provides that the phrase "shall be construed to include lakes, rivers, ponds, streams, inland waters, underground waters, salt waters and all other surface waters and watercourses within the jurisdiction of the state of Washington." RCW 90.48.030 grants the DOE "the jurisdiction to control and prevent the pollution of streams, lakes, rivers, ponds, inland waters, salt waters, water courses, and other surface and underground waters of the State of Washington."
¶ 30 RCW 90.48.080 further provides that
[i]t shall be unlawful for any person to throw, drain, run, or otherwise discharge into any of the waters of this state, or to cause, permit or suffer to be thrown, run, drained, allowed to seep or otherwise discharged into such waters any organic or inorganic matter that shall cause or tend to cause pollution of such waters according to the determination of the department, as provided for in this chapter.
The legislature authorized the DOE to enforce the WPCA by the issuance of orders and imposition of penalties for violations of RCW 90.48.080 and "orders adopted or issued pursuant to ... [this] chapter[]." RCW 90.48.120, .140, .144(3).
¶ 31 Furthermore, RCW 90.48.035 authorizes and requires the DOE to promulgate
rules and regulations as it shall deem necessary to carry out the provisions of this chapter, including but not limited to rules and regulations relating to standards of quality for waters of the state and for substances discharged therein in order to maintain the highest possible standards of all waters of the state in accordance with the public policy as declared in RCW 90.48.010.
In accordance with the legislative mandates of RCW 90.48.010 and .035, the DOE developed water quality standards for protection of Washington's ground water and surface water. WAC 173-200-010; WAC 173-201A-010. The DOE's water quality standards define "surface waters of the state" to include "lakes, rivers, ponds, streams, inland waters, saltwaters, wetlands and all other surface waters and water courses within the jurisdiction of the state of Washington." WAC 173-201A-020.[4] These water quality standards define "wetlands" as
areas that are inundated or saturated by surface water or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.
WAC 173-201A-020 (emphasis added). Both surface and ground water are "waters of the state." RCW 90.48.020.
¶ 32 RCW 90.48.010 expresses the legislature's intent that the DOE protect "all waters of the state." The legislature indicated the broad scope of this intent by its choice of the enlarging term "include" which modifies the phrase "all other surface waters" in its definition of "waters of the state." RCW 90.48.020. RCW 90.48.035 authorizes and requires the DOE to issue regulations it determines are necessary to protect the quality of "waters of the state." Accordingly, the DOE issued regulations that reflected its determination that wetlands contain "surface water *1209 or ground water," that this brings wetlands within the definition of "surface waters of the state" and, therefore, that wetlands must be protected under the WPCA. WAC 173-201A-020. Thus, the plain language of the WPCA clearly indicates that the DOE acts within its statutory authority over "waters of the state" when it regulates wetlands.
B. Other Statutes
¶ 33 PTI next contends that interpreting the WPCA as granting the DOE jurisdiction over wetlands conflicts with legislative grants of jurisdiction over wetlands to local authorities in chapter 36.70A RCW, the Growth Management Act, and chapter 90.58 RCW, the Shoreline Management Act of 1971, and argues that chapters 90.74, Aquatic Resources Mitigation, and 90.84 RCW, Wetlands Mitigation Banking, express the legislature's intent to limit the DOE's jurisdiction over wetlands. PTI also contends that the DOE's interpretation of wetlands as "surface waters of the state" ignores statutory language recognizing wetlands as land, not water. We disagree.
¶ 34 The legislature enacted the WPCA in 1945; it enacted the Shoreline Management Act in 1971, Laws of 1971, 1st Ex. Sess., ch. 286; it enacted the Growth Management Act in 1990, Laws of 1990, 1st Ex.Sess., ch. 17; it enacted chapter 90.74 RCW in 1997, Laws of 1997, ch. 424; it enacted chapter 90.84 RCW in 1998, Laws of 1998, ch. 248. PTI argues that these later statutes repeal or amend the earlier-enacted WPCA. But the law does not favor repeal by amendment or implication, and there is no repeal or amendment by implication when statutes can be harmonized. Misterek v. Wash. Mineral Prods., Inc., 85 Wash.2d 166, 168, 531 P.2d 805 (1975).
¶ 35 Here, none of the statutes cited by PTI contains an express prohibition of the DOE's jurisdiction over wetlands under the WPCA. Further, none of the statutes implicitly conflicts with the DOE's jurisdiction over wetlands as "waters of the state" under the WPCA. PTI correctly states that RCW 90.58.030(f) includes wetlands within its definition of "shorelands" under the Shoreline Management Act of 1971. But accepting PTI's contention that RCW 90.58.030(f) requires us to consider wetlands only as land would ignore the DOE's mandate to protect "all waters of the state," including "other surface waters," under the WPCA.[5] RCW 90.48.010, .020.
¶ 36 Likewise, no statutory conflicts arise from an interpretation of shared jurisdiction between the DOE and local authorities over wetlands. The Growth Management Act requires local authorities to create comprehensive plans for land use and development that must include measures protecting "critical areas" such as wetlands. RCW 36.70A.030,.070(5)(c)(iv). The legislature's requirement that local authorities create critical areas regulations as part of their comprehensive plans does not demonstrate an intent to divest the DOE of wetlands jurisdiction under other statutes. Further, as noted by our Supreme Court, the legislature delegated enforcement power under the Shoreline Management Act of 1971 to the DOE.[6]Ass'n of Rural Residents v. Kitsap County, 141 Wash.2d 185, 189 n. 1, 4 P.3d 115 (2000); RCW 90.58.140, .300. For all these reasons, we hold that the DOE's jurisdiction over wetlands under the WPCA is harmonious with these statutes.
Vagueness
¶ 37 PTI next contends that the WPCA is unconstitutionally vague as applied to placing *1210 fill material into wetlands because (1) the statute provides no notice that it includes wetlands as "waters of the state" and (2) it provides no notice that "pollution" includes fill placement. Appellant's Br. at 32-35. It further contends that WAC 173-201A-300, the water antidegradation policy, provides no notice that it applies to the filling of wetlands.[7] Again, we disagree.
¶ 38 Washington courts have applied the void for vagueness doctrine to prohibitory land use regulations. See Burien Bark Supply v. King County, 106 Wash.2d 868, 871, 725 P.2d 994 (1986). We review a statute's constitutionality de novo. Putman v. Wenatchee Valley Med. Ctr., 166 Wash.2d 974, 978, 216 P.3d 374 (2009). We presume a statute's constitutionality. Haley v. Med. Disciplinary Bd., 117 Wash.2d 720, 739, 818 P.2d 1062 (1991). A challenger bears the burden of proving beyond a reasonable doubt that a statute is unconstitutionally vague. Haley, 117 Wash.2d at 739, 818 P.2d 1062.
¶ 39 We consider a statute void for vagueness if its terms are "so vague that persons `of common intelligence must necessarily guess at its meaning and differ as to its application'." Haley, 117 Wash.2d at 739, 818 P.2d 1062 (quoting Connally v. General Constr. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 70 L.Ed. 322 (1926)). But because "[s]ome measure of vagueness is inherent in the use of language," Haley, 117 Wash.2d at 740, 818 P.2d 1062, we do not require "impossible standards of specificity or absolute agreement." City of Spokane v. Douglass, 115 Wash.2d 171, 179, 795 P.2d 693 (1990). Mere uncertainty does not establish unconstitutional vagueness. Douglass, 115 Wash.2d at 179, 795 P.2d 693. Given this, a statute meets a vagueness challenge "[i]f persons of ordinary intelligence can understand what the ordinance proscribes, notwithstanding some possible areas of disagreement." Douglass, 115 Wash.2d at 179, 795 P.2d 693.
¶ 40 Furthermore, undefined terms in a statute do not automatically render it unconstitutionally vague. Douglass, 115 Wash.2d at 180, 795 P.2d 693. For clarification, citizens may need to resort to other statutes or court opinions, which we consider "`[p]resumptively available to all citizens'." Douglass, 115 Wash.2d at 180, 795 P.2d 693 (alternation in original) (quoting State v. Smith, 111 Wash.2d 1, 7, 759 P.2d 372 (1988)).
¶ 41 First, as we discussed above, RCW 90.48.020 includes "all other surface waters" in its definition of "waters of the state." WAC 173-201A-020 defines wetlands as "areas that are inundated or saturated by surface water or ground water" and includes wetlands within the definition of "surface waters of the state." These statutes and regulations were presumptively available to PTI. Thus, the WPCA's application to wetlands is not unconstitutionally vague.
¶ 42 Second, the WPCA defines pollution in pertinent part to include the
alteration of the physical, chemical or biological properties, of any waters of the state, including change in temperature, taste, color, turbidity, or odor of the waters, or such discharge of any liquid, gaseous, solid, radioactive, or other substance into any waters of the state as will or is likely to create a nuisance or render such waters harmful, detrimental or injurious to the public health, safety or welfare, or to domestic, commercial, industrial, agricultural, recreational, or other legitimate beneficial uses, or to livestock, wild animals, birds, fish, or other aquatic life.
RCW 90.48.020. The common definition of "alter" is "to cause to become different in some particular characteristic (as measure, dimension, course, arrangement, or inclination) without changing into something else." Webster's Third New International Dictionary 63 (2002).
¶ 43 Here, both the DOE and Parametrix wetland specialists determined that the vegetation that existed before PTI placed the fill on the site was no longer present under the fill material. Further, the fill material compressed the soil beneath it by a minimum of *1211 two feet. People of ordinary intelligence would understand both facts as alterations of the physical properties of a wetland. Likewise, such acts, by destroying the vegetation essential for the wetlands' water quality and hydrologic functions, fall within the common understanding of discharge of a solid detrimental to the "legitimate beneficial uses" of this wetland.[8] RCW 90.48.020. Thus, the definition of "pollution" under the WPCA is not vague as applied to placement of fill material into wetlands. RCW 90.48.020.
¶ 44 Finally, the DOE's antidegradation policy provides that it is "guided" by chapters 90.48 and 90.54 RCW. WAC 173-201A-300(1). RCW 90.54.020(3)(b) provides in pertinent part that "[n]otwithstanding that standards of quality established for the waters of the state would not be violated, wastes and other materials and substances shall not be allowed to enter such waters which will reduce the existing quality thereof." Furthermore, the antidegradation policy states that it applies "to human activities that are likely to have an impact on the water quality of a surface water" and that part of its purpose, which applies to "all waters and all sources of pollution," is to "ensure existing and designated uses are maintained and protected." WAC 173-201A-300(2)(c), (2)(e)(i).
¶ 45 Again, these other statutes and regulations were presumptively available to PTI. For the reasons we discussed above, a person of ordinary intelligence would understand them and the antidegradation policy, when read together, as applying to the filling of wetlands. Thus, we hold that the antidegradation policy is not unconstitutionally vague as applied to PTI.
¶ 46 A majority of the panel having determined that only the foregoing portion of this opinion will be printed in the Washington Appellate Reports and that the remainder shall be filed for public record pursuant to RCW 2.06.040, it is so ordered.[9]
We concur: PENOYAR, C.J., and SWEENEY, J.
NOTES
[1] PTI's wetlands expert, James Kelley, testified that the manual required use of the "problem area methodology" for delineation of the site's unfilled areas because they were seasonal wetlands and that other background materials called for use of the method because of alteration of the site's hydrology from historical, legal human activity, such as diking. TP (Feb. 21, 2008) at 357. But the DOE presented evidence that Smith Island is not a seasonal wetland area.
[2] See also WAC 173-22-080(7) (defining hydric soil indicators).
[3] RCW 34.05.562 provides:
(1) The court may receive evidence in addition to that contained in the agency record for judicial review, only if it relates to the validity of the agency action at the time it was taken and is needed to decide disputed issues regarding:
(a) Improper constitution as a decision-making body or grounds for disqualification of those taking the agency action;
(b) Unlawfulness of procedure or of decision-making process; or
(c) Material facts in rule making, brief adjudications, or other proceedings not required to be determined on the agency record.
[4] The DOE's water quality standards are similar to those of the federal government. The federal Clean Water Act (CWA) prohibits the discharge of pollutants into navigable waters. 33 U.S.C. § 1311(a). The CWA defines "navigable waters" as "waters of the United States, including the territorial seas." 33 U.S.C. § 1362(7). Federal regulations promulgated by the United States Army Corps of Engineers (Corps) and Environmental Protection Agency (EPA) define "waters of the United States" as including "[a]ll interstate waters including interstate wetlands." 33 C.F.R. § 328.3(a)(2); 40 C.F.R. § 122.2(b). Thus, the DOE's water quality standards, like the Corps' and EPA's regulations, identify wetlands as "waters of the state" or "waters of the United States."
[5] Additionally, as a matter of common sense, the fact that one may consider wetlands as both land and water is inherent in the nature of wetlands. PTI's interpretation would lead to an absurd result.
[6] PTI also contends that RCW 90.48.260 limits the DOE's wetlands jurisdiction to its role in issuing water quality certification permits as part of the federal CWA. But RCW 90.48.144(3), the WPCA's penalty provision, provides in pertinent part:
[E]very person who ... [v]iolates the provisions of RCW 90.48.080, or other sections of this chapter or chapter 90.56 RCW or rules or orders adopted or issued pursuant to either of those chapters, shall incur, in addition to any other penalty as provided by law, a penalty in an amount of up to ten thousand dollars a day for every such violation.
The plain text of RCW 90.48.144(3) indicates that the DOE possesses authority under RCW 90.48.080, independent of any other statute, to regulate waters of the state, including wetlands.
[7] Neither the Board nor the superior court entered a conclusion of law that PTI violated the antidegradation policy. The Board did conclude that PTI violated the DOE's wetland regulations "as contained in WAC 173-22." AR at 1232.
[8] RCW 90.54.020(1), which declares fundamental principles for "[u]tilization and management of the waters of the state," provides in pertinent part that "[u]ses of water for ... preservation of environmental and aesthetic values ... [are] beneficial."
[9] In the unpublished portion of this opinion, we reject PTI's contention that Order 4095, Penalty 4096, and the Board's hearing procedures violated PTI's due process rights. We also reject PTI's contentions that substantial evidence does not support the Board's findings and that the Board's conclusions of law were erroneous. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368361/ | 97 S.E.2d 650 (1957)
199 Va. 31
Joseph T. FLAKNE
v.
CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF VIRGINIA.
Supreme Court of Appeals of Virginia.
April 26, 1957.
John Alexander, Fairfax (Leon Ben Ezra, Washington, D. C., Alexander, Kelly & Jennings, Fairfax, on brief), for plaintiff in error.
Robert J. McCandlish, Jr., Fairfax (Hugh B. Marsh, Fairfax, Sam Houston, Washington, D. C., Richardson, McCandlish, Lillard, Marsh & Van Dyck, Fairfax, on brief), for defendant in error.
Before HUDGINS, C. J., and EGGLESTON, BUCHANAN, MILLER, WHITTLE, and SNEAD, JJ.
WHITTLE, Justice.
Flakne sued the telephone company for personal injuries sustained when he ran into a guy or brace wire alleged to have been negligently installed on a pole on private property. He claimed that the wire was not equipped with a suitable guard or shield.
The company answered denying primary negligence. It denied the injuries complained of, and asserted that even if Flakne was injured as alleged, his own contributory negligence, as a matter of law, barred his recovery.
A jury was empanelled to try the issues, and after the introduction of plaintiff's evidence defendant's motion to strike was sustained and the jury returned a verdict in its favor, upon which judgment was entered. To the entering of the judgment plaintiff assigned errors which he says present the following questions for our consideration:
"1. Did plaintiff's evidence establish a prima facie case to such an extent as to make defendant's negligence a question for the jury?
"2. Did plaintiff's evidence establish, as a matter of law, his own contributory negligence or was the question of plaintiff's contributory negligence properly one to be submitted to the jury?"
The accident complained of occurred in the daytime, "before four o'clock", on the afternoon of November 27, 1954. Flakne was 56 years of age, five feet ten inches tall, and weighed 195 pounds. According to his testimony he was in good health and had good eyesight. He lived in Washington, D. C., and owned a log cabin in "Gunston *651 Manor", Fairfax County, where he occasionally went for week-end visits. The cabin was located opposite the dwelling of Mrs. Devine. Both properties were on a road or lane marked "Private Drive". The traveled portion of the road was about the width of a car.
The Devine home had a picket fence in front, and on the lawn between the fence and the road the Virginia Electric and Power Company had at some time in the past erected a power line pole, to which had been attached a shielded guy or brace wire 5/16ths of an inch in diameter and which was anchored to the ground through means of a "dead man".
On July 29, 1953, the telephone company placed certain of its wires on the power pole and attached to the pole another guy wire 3/16ths of an inch in diameter which was affixed to the same "dead man" as that of the power company. The telephone company's guy wire formed a triangle inside the one formed by the guy wire of the power company and was not equipped with a shield.
There were two entrances to Mrs. Devine's home, one on the right (facing the house) through a gate in the picket fence, and another located up the driveway, passing the fence, which led to another part of the house, both of which entrances were normally used.
On the day of the accident Flakne was watching the Army-Navy football game on television in the residence of Mrs. Devine as the guest of her son. The television was located in the livingroom near the center of the house. Between the third and fourth quarters of the game Flakne realized that the game would not be over before his dinner hour, so he "ran" to his home to request his wife to delay dinner. His route of travel was from the end of the picket fence next to the driveway, across the Devine lawn, to his front door. In making this trip he successfully "ran" under both guy wires.
Flakne remained at the cabin only long enough to request his wife to delay dinner, after which he attempted to retrace his steps to the Devine residence, "running fast", when he struck the telephone guy wire and was injured.
Flakne testified that from July 29, 1953, when the telephone guy wire was installed, until November 27, 1954, when he was injured, he had visited his cabin on an average of once a month with Mrs. Flakne, and on an average of twice a week alone, for the purpose of caring for pets which were kept at the cabin. Thus, according to his testimony, over the sixteen-month period he had passed within a few feet of the installation 154 times, and he says he never noticed it until he struck the guy wire.
A representative of the telephone company was called as an adverse witness and read a provision from the National Electrical Safety Code which provides: "The ground end of all guys attached to ground anchors exposed to traffic shall be provided with a substantial and conspicuous wood or metal guard not less than eight feet long." (Italics supplied.) This witness stated, however, that the installation here involved, situated as it was on the lawn, off the private driveway, could not be classified as one "exposed to traffic" as contemplated by the Safety Code.
Before acting upon the telephone company's motion to strike, the court and jury visited the scene of the accident and viewed the premises.
In describing the return trip to the Devine home, Flakne said:
"Well, running backI ran back, I run quite a bit. And this time I was running fast and ducking the shielded wire and the post, not seeing the guy line, I hit it, and I hit it, and in that football game, no one in the game hit the line as hard as I did, * * *."
Plaintiff conceded that he could see the installation from the point where he *652 usually parked his car upon his various visits to the cabin but admitted that he had never noticed the pole or the guy wires. He said, "If I saw it, it never registered on my mind."
In the light of Flakne's testimony, and assuming but not deciding that the telephone company was guilty of negligence, in our view plaintiff was guilty of contributory negligence, as a matter of law, which barred his recovery.
Plaintiff was impatient to return and watch the game, and while "running fast" over this rather unusual route to the Devine home, without looking to see where he was going, he ran into the guy wire which he conceded he could have seen had he been looking. Under these circumstances he was guilty of contributory negligence. One cannot charge another in damages for negligently injuring him when his own failure to exercise due and reasonable care was responsible for the occurrence of which he complains. 38 Am.Jur., Negligence, § 174, pp. 848-850; 13 M.J., Negligence, §§ 24, 25, pp. 536-539.
The judgment is
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368342/ | 475 P.2d 815 (1970)
KERR-McGEE CORPORATION, a corporation (Own Risk), Petitioner,
v.
Lawrence Ray WASHINGTON and State Industrial Court, Respondents.
No. 44256.
Supreme Court of Oklahoma.
October 13, 1970.
Francis S. Irvine, James A. Bagley, Jr., Kerr, Davis, Irvine, Burbage & Foster, Oklahoma City, for petitioner.
Glen Ham, Fermon Hatcher, Pauls Valley, for respondents.
*816 JACKSON, Justice:
There is involved here for review an order of the State Industrial Court, sitting en banc, modifying and affirming an award of the trial judge allowing the respondent, Lawrence Ray Washington, claimant below, fifteen per cent permanent partial disability to the body as a whole as the result of disabling burns and $1,000.00 for disfigurement due to non-disabling burns all sustained while claimant was employed and working at a hazardous employment in the employ of petitioner, respondent below, on August 9, 1969. The parties will be referred to as they appeared in the State Industrial Court.
The material portions of the award entered by the trial judge are as follows:
"That as a result of the injury claimant has suffered serious and permanent disfigurement for which he is entitled to the sum of $1,000.00, in a lump sum and that as a result of said injury, claimant has sustained 15 per cent permanent partial disability to his body as a whole, for which he is entitled to compensation for 75 weeks at $42.50 per week, or the total amount of $3187.50, of which 27 weeks to April 5, 1970 shall be paid in a lump sum of $1147.50; that respondent or insurance carrier are ordered to pay to claimant the accrued portion of the award herein made in a lump sum, same being the amount of $2147.50 and to pay the balance of the award at the rate of $42.50 per week, until the total award of $4187.50 (less tax and attorney fee) has been paid to claimant; that respondent or insurance carrier reimburse claimant the filing fee. * * * "
The material portions of the order of the State Industrial Court, sitting en banc, are as follows:
"After reviewing the record in this case, and being fully advised in the premises, said Judges find that said order should be modified to find claimant sustained 15% permanent partial disability due to the disabling burns and $1000.00 disfigurement due to non-disabling burns.
"IT IS THEREFORE ORDERED that the order of the Trial Judge heretofore entered in this case on April 8, 1970, be and the same is hereby modified to find that claimant has sustained 15% permanent partial disability to the body as a result of the disabling burns to the body and $1000.00 for serious and permanent disfigurement as a result of the non-disabling burns to the body.
"IT IS FURTHER ORDERED that the order of April 8, 1970, as herein *817 modified, be and the same is hereby affirmed, adopted, and made the judgment and order of this Court."
The evidence supports that finding.
Respondent contends that the portion of the order awarding the claimant the $1,000.00 for disfigurement is not sustained by the evidence and is contrary to law. It does not contest the portion of the order allowing the claimant fifteen per cent permanent partial disability to the body as a whole.
In the accident hot asphalt was thrown upon the claimant causing second and third degree burns to his face, head, arms and hands resulting in permanent disability and disfigurement.
85 O.S.Supp. 1968 § 22(3) authorizing an award for permanent disfigurement to a compensation claimant provides:
"In case of an injury resulting in serious and permanent disfigurement, compensation shall be payable in an amount to be determined by the Commission, but not in excess of Three Thousand ($3,000.00) Dollars; provided, that compensation for permanent disfigurement shall not be in addition to the other compensation provided for in this Section, but shall be taken into consideration in fixing the compensation otherwise provided."
Claimant testified that the hot asphalt was blown on his face, arms and hands and it was thirty or forty-five minutes before the asphalt was removed by a doctor; that the scars on his face prevent him from opening his mouth as wide as he could before the accident; that the scars cause tightness in his right hand; that the scars become irritated in hot or cold weather and he has itching and burning; that he has decided to submit his claim for permanent disability and disfigurement and forego plastic surgery.
Claimant submitted in evidence the medical report of Dr. R which reads:
"* * * Mr. Washington was examined in my office on February 16, 1970 for evaluation of accidental injury received on August 9, 1969 at which time he opened a valve and received burns on the face and arms from hot asphalt. Deep burns occurred on the right side of the face with overgrown scars from deep third degree burns and the right forearm has more severe scarring than the left. There are several areas of third degree burns on the right arm and additional small areas on the hands about the knuckle although there is not severe limitation of hand motion. Motion of the right arm is somewhat limited due to contractures and the scarring at the right corner of the mouth limits full functioning in opening the mouth. This man complains of temperature sensitivity particularly in the areas where the burns were deep. Examination confirms the history of the absence of severe limitation of motion with regard to the hands and with some limitation of motion in the right forearm due to contracture and overgrown scarring. The contracture of the scars about the mouth is also cause for limitation of function at this orifice.
"It is my impression that additional surgery would probably not be beneficial and that no other treatment is likely to improve his condition. It is therefore my impression that in addition to disability due to the unsightly scarring particularly in the facial area which disfigurement is not a part of this estimate of this disability since it is obvious to the ordinary observer, that Mr. Washington has 10 percent partial permanent disability to the body as a whole for the performance of ordinary manual labor as a result of the limitation of motion of the mouth and face and 10 percent partial permanent disability to the right arm for the performance of ordinary manual labor as a result of the limitation in the forearm. This involvement also includes the elbow region. Other areas of lesser complaint, including the left arm, cause some additional disability and are combinable. It *818 is my impression that by combination of these disabilities that Mr. Washington has 25 percent partial permanent disability to the whole body for the performance of ordinary manual labor as a result of the above described accidental injury. (emphasis ours)
Respondent submitted in evidence the medical report of Dr. D which states:
"He (claimant) has well healed second degree burns of the upper extremities from the elbows to the wrists, circumferentially. He also had third degree burn contractures of the face, and healed second degree burns of the forehead and ears.
"The evaluation revealed a ten percent permanent partial disability of the body as a whole as a result of the thinness of the skin, circumferentially of the arms and elbows, with no loss of motion. He has permanent disfigurement as a result of his burns, and could be benefited by surgival revision." (emphasis ours)
The facts presented here are strikingly similar to those presented in Caddo County v. Hartman, 196 Okl. 276, 164 P.2d 617, wherein claimant sustained a fracture of the left frontal bone of forehead, also permanent disfigurement of the forehead and around the left eye. We sustained an award of the State Industrial Court awarding the claimant 20 percent permanent partial disability to the body as a whole and the additional sum of $500.00 for permanent disfigurement. In sustaining the award we said:
"* * * We have held that an award for serious and permanent disfigurement of the head, face and hand will be made independently of other awards. Black, Sivalls & Bryson, Inc. v. Homier, 194 Okl. 162, 148 P.2d 166; Brunstetter Motor Co. v. Brunstetter, 169 Okl. 184, 35 P.2d 694; Seneca Coal Co. v. Carter, 85 Okl. 220, 205 P. 495; Comar Oil Co. v. Sibley, 128 Okl. 156, 261 P. 926; Arrow Gasoline Co. v. Holloway, 122 Okl. 257, 254 P. 98; Ford Motor Co. v. Farmer, 146 Okl. 9, 293 P. 191. * * * "
See, also, Grinnell Co. v. Smith, 203 Okl. 158, 218 P.2d 1043.
Counsel for the respondent cite Milling Machinery, Jones-Hettelsater Const. Co. v. Thomas, 174 Okl. 483, 50 P.2d 395 and Seneca Coal Co. v. Carter, 85 Okl. 220, 205 P. 495. These two cases are not in point as they involve awards for injuries to specific members of the body while the award here is for a percentage of disability to the body as a whole under the "other cases" provision of the Oklahoma Workmen's Compensation Act. This distinction was clearly pointed out in Caddo County v. Hartman, 196 Okl. 276, 164 P.2d 617 and Arrow Gasoline Co. v. Holloway, 122 Okl. 257, 254 P. 98.
Counsel for respondent also cite Lunsford v. Texas Co., 131 Okl. 185, 268 P. 200, in support of their contention that as the trial judge did not enter into the record a description of the disfiguring scars there is no evidence to support the award for disfigurement. The case is distinguishable on the facts. In the Lunsford case claimant appeared before the State Industrial Court in person without counsel. He exhibited his disfiguring scars to the trial judge but the trial judge did not enter the description into the record and no other evidence was submitted establishing the nature and extent of the scars. The trial court entered an award of $100.00 for disfigurement. Claimant appealed to this court and we reversed with directions to the Industrial Commission to reopen the case and permit the claimant to offer additional evidence establishing the nature and extent of the disfigurement. While in the present case the trial judge did not recite into the record his own statement after the viewing of the scars, the scars were described by the claimant and two examining doctors.
The award of the State Industrial Court is supported by reasonable competent evidence and is in accord with law declared by this court in prior decisions.
Award sustained.
All the Justices concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368349/ | 97 S.E.2d 439 (1957)
246 N.C. 59
Charles B. TODD and wife, Jean W. Todd,
v.
Harvey S. WHITE, and John C. Quickel and wife, Alice M. Quickel, and Alvin E. Witten and wife, Meryl S. Witten, on behalf of themselves and all other residents and property owners in Fairmount Park.
No. 165.
Supreme Court of North Carolina.
April 10, 1957.
*441 Garland & Garland, Gastonia, for plaintiffs, appellants.
L. B. Hollowell and Verne E. Shive, Gastonia, for defendants, appellees.
JOHNSON, Justice.
The Fairmount Park subdivision as shown on the maps contains approximately 125 building lots. All these lots were sold and conveyed by D. B. Hanna and wife, original developers. Each of the deeds contains the following reservation:
"(12). The parties of the first part (D. B. Hanna and wife), their heirs and assigns, shall have the right to change, alter or close up any street or avenue shown upon said map or plat not adjacent to the lot above described and not necessary to the full enjoyment by the party of the second part of the above described property and shall retain the right and title to, and the control and disposition of all parks, streets, avenues and planting spaces and areas within the boundaries of Fairmount Park, as shown on said map or plat, subject only to the rights of the party of the second part for the purposes of egress and ingress necessary to the full enjoyment of the above described property." (Italics added.)
The plaintiffs by mesne conveyances now own the interest reserved by Hanna and *442 wife in the Park area shown on the maps. The plaintiffs contend the court below erred in finding and concluding that they may not convey the Park area, except as encumbered by easement for park purposes. The contention appears to be well taken.
True, the principle is well settled that when land is divided into lots according to a map thereof, showing streets, alleys, courts, and parks and lots are sold with reference to the map, nothing else appearing, the owner thereby dedicates the streets, alleys, courts, and parks to the use of the purchasers, and those claiming under them, and also under certain circumstances to the public. Foster v. Atwater, 226 N.C. 472, 38 S.E.2d 316; Home Real Estate Loan & Insurance Co. v. Town of Carolina Beach, 216 N.C. 778, 7 S.E.2d 13; Irwin v. City of Charlotte, 193 N.C. 109, 136 S.E. 368; Green v. Miller, 161 N.C. 24, 76 S.E. 505, 44 L.R.A.,N.S., 231
Here, however, something else appears in the form of a reservation clause, which takes the locus in quo out of the operation of the foregoing rule. This reservation clause, appearing in the deeds by which all the lots in the subdivision were conveyed by the original developers of the property, in language free of ambiguity, clearly reserved to D. B. Hanna and wife the title and power to dispose of the Park area unburdened by easement for park purposes. The title and power so reserved is now vested in the plaintiffs by virtue of the mesne conveyances of record.
With decision thus resting on the reservation clause, it is not necessary to discuss the legal phases of these questions treated in the briefs: (1) whether the Park area was ever put to use as a park by the residents of the subdivision, or (2) whether there has been an effective withdrawal of the alleged dedication within the purview of G.S. § 136-96. It is unnecessary for an appellate court, after having determined the merits of the case, to examine questions not affecting decision reached. Painter v. Home Finance Co., 245 N.C. 576, 96 S.E.2d 731. Suffice it to say, the record discloses no sufficient evidence to justify a finding that the locus in quo or any part thereof was ever opened as a park. Besides, the court below made no specific finding or ruling on either of the foregoing questions.
Let the judgment below be modified so as to accord with the decision here reached, and as so modified it will be affirmed.
Modified and affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265711/ | 657 F. Supp. 788 (1987)
Eugene C. WAYNE, John C. Wolfe and Kenneth R. Sandler
v.
George CHOPIVSKY, Jr., Richard E. Horman and Joseph F. Corcoran.
Civ. A. No. 85-5943.
United States District Court, E.D. Pennsylvania.
March 9, 1987.
*789 William Hildebrand, Philadelphia, Pa., for plaintiffs.
Lee Galligaro, Washington, D.C., for defendants.
MEMORANDUM AND ORDER
HUYETT, District Judge.
Presently pending are plaintiffs' and defendants' cross motions for summary judgment in this diversity action arising from a contract dispute.[1] For the reasons stated below, I grant plaintiffs' motion and deny defendants' motion.
I. FACTS
The facts leading up to this litigation are essentially undisputed. Plaintiffs are employees of the Fairmount Institute (TFI), a psychiatric hospital located in Philadelphia. Defendants were controlling shareholders of National Psychiatric Institutes, Inc. (NPI), which owned TFI. In August, 1982, all the stock of NPI was sold to another company, Health Group Inc. (HGI). Upon the sale of this stock, the Release Agreements that are the basis of this dispute were entered into between each of the plaintiffs and defendants. These Agreements provided that each of the plaintiffs would be paid a sum of money (aggregating $150,000.00) in the event that TFI's "net earnings before federal and state income taxes," as defined in the agreements, exceeded $1,500,000.00 for fiscal year 1983. (Plaintiffs' Ex. A). Section 2.1 of the Agreements, the provision that is the basis of the dispute among the parties states:
Section 2.1. No monies shall be payable hereunder unless TFI's Earnings Before Federal and State Income Taxes, as hereinafter defined, shall equal or exceed $1,500,000.00 for the first twelve month fiscal year ending after the date hereof ("Fiscal Year"). For purposes of this Agreement, TFI's earnings before federal and state income taxes ("Earnings Before Federal and State Income Taxes") shall be the audited earnings of TFI before any deductions for federal and state income taxes, as determined by TFI's outside auditors (whose determination shall be final), calculated in accordance with generally accepted accounting principles, consistently followed throughout the periods involved, before extraordinary items, and after deducting (a) a management fee payable to NPI in an amount equal to 5% of TFI's gross revenues; (b) TFI's interest and depreciation charges (excluding the effect of the sale of NPI to Health Group, Inc. ("HGI") and (c) bonuses accrued and payable to TFI employees.
After the completion of TFI's 1983 fiscal year, John Foos, a partner in Peat, Marwick, Mitchell & Co., TFI's outside auditors, prepared an audited financial statement of TFI's earnings. He determined that the net earnings as defined in the Agreements were $1,518,140.00, thus exceeding the target amount by $18,140.00. Plaintiff Wayne then forwarded a copy of the earnings statement and an accompanying written statement prepared by Peat Marwick to each of the defendants, along with a letter of his own requesting payment pursuant to the Agreements. (Plaintiff's Ex. G and H). A month later, at defendants' request, Wayne also provided defendants with a copy of TFI's audited statement for 1983 (Ex. I). Following receipt of this information, defendants were not satisfied that the calculation of net earnings, as defined in the Agreements, was done properly. They requested additional information, and ultimately a meeting took place between Peat Marwick and defendants' accountants. (Plaintiff's Ex. *790 K-R). In October 1984, negotiations broke off and this litigation ensued.
II. DISCUSSION
The crux of this dispute is the proper interpretation of Section 2.1 of the Release Agreements. Plaintiffs contend that Section 2.1 means that the auditor's calculations are final and binding. They claim the finality language was deliberately included to avoid a future dispute as to whether the earnings target was met. Plaintiffs argue that since the auditor found that the target amount was met, they are entitled to payment pursuant to the contract.
Defendants assert that plaintiffs are not entitled to payment because the auditor's calculation is not in accordance with the Agreements. They claim that while Section 2.1 means that the auditor's determination is final as to the audited earnings, the contract does not foreclose inquiry into the calculation of the adjustments to earnings that are also provided for in Section 2.1. They further argue that the Agreements require accounting practices, as well as principles, to be consistently followed.
Interpretation of a contract that is clear and unambiguous is for the court. Pines Plaza Bowling Inc. v. Rossview, Inc., 394 Pa. 124, 145 A.2d 672, 676 (1958); County of Erie v. American States Insurance Co., 573 F. Supp. 479, 483 (W.D.Pa.1983), aff'd, 745 F.2d 45 (3d Cir.1984). The determination of whether a contract is unambiguous is a matter of law for the court. Mellon Bank, N.A. v. Aetna Business Credit, Inc., 619 F.2d 1001, 1011 (3d Cir.1980). "But conflicting conclusions as to the interpretation of a written contract which is clear and unambiguous as to its terms will not create a material issue of fact to bar disposition by summary judgment." County of Erie, 573 F.Supp. at 483. In this case, both sides claim that the language is clear and unambiguous and that the language should be interpreted by the court. See Plaintiffs' Motion for Summary Judgment [hereinafter cited as Plaintiffs' Motion] at 2; Oral Argument at 58-61, 88-95, 109-115.[2] I agree that the language is clear and unambiguous and will therefore turn to interpreting the Agreements in accordance with their plain meaning.
With regard to whether the auditor's determination was intended to be final, I find that the language of Section 2.1 supports plaintiffs' interpretation of the Agreements. Defendants agree that the auditor's determination is final at least as to the audited earnings, but argue that the calculation of the adjustments is distinct from the calculation of audited earnings. The word "audit" is defined as:
A formal or official examination and verification of books of account (as for reporting on the financial condition of a business at a given date or on the results of its operations for a given period); by a methodical examination and review of a situation or condition (as within a business enterprise) concluding with a detailed report of findings: a rendering and settling of accounts; 2. the final report following a formal examination of books of account: an account as adjusted by auditors: final statement of account."
Webster's Third New International Dictionary 143 (1966). By the plain meaning of the word "audit," there is nothing that would exclude the contract adjustments from the audited earnings. The audited earnings are simply the calculation of earnings that are the result of an examination by an auditor. The fact that the parties placed additional restrictions on the definition of earnings does not mean that the adjustments are not part of the calculation of the audited earnings.
Moreover, defendants' explanation of the meaning of the language "whose determination shall be final" is not logical. Had defendants intended to review the final figure of the auditor, they would have contracted to review all of the auditor's calculations, regardless of whether they related to the adjustments or to other matters. Plaintiffs' explanation of this language is *791 far more persuasive. Plaintiffs assert that this language was included for the purpose of avoiding a future dispute as to whether the target amount had been met. Defendants' construction, which would permit open ended review of every calculation of the auditor, would rob this language of any meaning.
Defendants argue that Section 4 of the Release Agreements proves that the auditor's determination was not intended to be final as to the adjustments. Section 4 provides:
TFI FINANCIAL STATEMENTS.
TFI and NPI agree to send to the other parties hereto, within 120 days after the end of the Fiscal Year, in the manner provided in Section 6.2, copies of the audited financial statements of TFI for the Fiscal Year. TFI and NPI further agree to have the outside auditors of TFI provide certificates or other documents reasonably requested by the parties hereto relative to this Agreement or any amounts due hereunder. A delay in the delivery of the financial statements shall not affect the obligation of the Shareholders to pay the Principal Amount, provided that the Conditions Precedent contained in Section 2 have been met.
Defendants claim that the fact that defendants are entitled to financial statements, certificates and other documents is at odds with plaintiffs' claim that the auditor's determination as to the earnings amount is final. I disagree. There are numerous reasons why defendants may desire this information without contradicting the finality of the auditor's determination. For example, defendants may simply have wanted copies of these documents for their own records for tax or other purposes, or more likely, wanted to verify that the auditor actually determined that the target amount was met without having to take plaintiffs at their word. Whatever defendants reasons may have been, I do not find that this section, which merely allows defendants access to documents, is inconsistent with a provision requiring that the auditor's determination as to net earnings is final.
Defendants also argue that two responses in Wayne's deposition contradict plaintiffs' assertion that the auditor's determination was intended to be a final one. These exchanges are as follows:
Q: (by defendants' counsel) I thought you testified earlier that you thought the auditors' certification was final as to the total income but that defendants were at least entitled to assure themselves that the three adjustments mentioned in paragraph 2.1 were done properly; isn't that right?
A: Correct.
(Wayne dep. at 65).
Q: (by defendants' counsel) Is there anything in the Release Agreement or in anything you've said in your correspondence which leads you to believe that the defendants are required to rely simply on the auditors' certification on the question of whether bonuses were deducted?
A: No.
(Wayne dep. at 68). As plaintiffs argue, however, no follow up questions were asked as to what Wayne meant by these statements. Give that Wayne had testified unequivocally that the auditor's determination was a final one and that the conditions to payment were met once the auditor certified that the target amount of $1.5 million was exceeded, see, e.g., Wayne dep. at 29, 41, 47-48, it is clear that Wayne was not contradicting his earlier testimony in these responses, but was, as plaintiffs argue, referring to the defendants' right to review the mathematical calculations to determine if the adjustments were in fact deducted from the earnings figure, as opposed to the right to review how the auditor came to each figure. Additionally, one question refers to Wayne's previous testimony, yet defendants have not shown, and I have been unable to find, anything Wayne said earlier that meant that the auditor's determination was not final. I therefore do not find that these ambiguous responses support defendants' interpretation of the contract.
*792 Finally, defendants argue that if the auditor's determination was intended to be a final one, the Agreements would have stated that more clearly. While I agree that the language could have been more precise, I am not persuaded that the Agreements are ambiguous on this issue.
It is quite possible for two parties to agree that one or more questions shall be submitted to a [third party] without at the same time agreeing that the decision or award shall be final and conclusive. In the absence of expressions to the contrary, however, the plain inference is that the parties mean that the decision or award shall be conclusive on both parties.
Corbin on Contracts, § 652 at 125-27 (1960) (footnote omitted). There is nothing in the Agreements which is an "expression to the contrary" of finality. Moreover, given that some language of finality was included, it is more likely that had defendants intended the auditor's determination as to the adjustments to be reviewable, they would have included other language to reflect that intent.
Defendants also argue that the language "generally accepted accounting principles [GAAP] consistently followed throughout the periods involved" requires that accounting practices, as well as accounting principles, be followed consistently. They argue that since the auditor only determined that principles, rather than practices, were consistently followed, the auditor's calculations do not comply with the contract. However, the plain language of the Agreements concerns only accounting principles. "[W]here language is clear and unambiguous, the focus of interpretation is upon the terms of the agreement as manifestly expressed, rather than as, perhaps, silently intended." Steuart v. McChesney, 498 Pa. 45, 49, 444 A.2d 659, 661 (1982). Moreover, the outside auditor certified that GAAP had been followed consistently. Defendants in effect argue that the auditor's interpretation of the term GAAP is incorrect. I cannot agree, particularly in light of the fact that defendants' interpretation is contrary to the language of the Agreements, and also because the auditor, an independent and impartial third party, is undoubtedly familiar with the term in his field.
Having found that the auditor's determinations were intended to be final and that the auditor complied with the terms of the Agreements, I must now determine what review, if any, I may give to the auditor's determination. Defendants analogize the finality language in Section 2.1 to a binding arbitration clause, and argue that at a minimum I should review the auditor's findings to determine if they are supported by any evidence. They derive this standard from NF & M Corp. v. United Steelworkers, 524 F.2d 756, 760 (3d Cir.1975) and Sun Oil Co. v. Local 8-901, 421 F.Supp 1376, 1384 (E.D.Pa.1976), two cases that reviewed an arbitrator's award interpreting a contract made pursuant to federal labor law. I disagree both with defendants' characterization of this clause as a binding arbitration clause, and the appropriate standard of review of the auditor's determination.
Under Pennsylvania law,
[t]he principal that the opinion of a person who is not a party to the contract as to the adequacy of a performance, which opinion is by the terms of the contract determinative of some rights of the parties, must be an objective opinion made in good faith, seems self-evident and is well established in contract law.
Flame v. Oak Lane Shopping Center, 471 Pa. 112, 116, 369 A.2d 1220, 1222 (1977). Therefore, I may review the auditor's determination only to see if it was an objective determination made in good faith. As defendants do not allege, and there is nothing to suggest, that the auditor's findings were either not objective or not in good faith, my analysis ends here.
The fact that this type of provision is entitled to lesser review than a provision providing for arbitration is logical, for the purposes of the two provisions are different. The purpose of arbitration is to serve as an alternative form of dispute resolution. Both sides present evidence, and a hearing may be held. The purpose of a provision requiring a third party's opinion *793 to be final and binding, as in this case, is to avoid the work required by litigation. The parties choose to forego the benefits and costs of presenting arguments and evidence from their own perspective and instead rely on an impartial third party to independently evaluate the evidence and make his own determination. Once the parties have done this, as long as the third party's opinion is an objective one, made in good faith, it is deemed to be what the parties bargained for and is binding.
Even assuming, however, that Section 2.1 is a binding arbitration clause, the standard of review that defendants suggest is inappropriate here. Pennsylvania law, not federal law, governs this case. Although Pennsylvania has adopted the Uniform Arbitration Act, 42 Pa.C.S.C. §§ 7301-7320, Pennsylvania has retained common law arbitration as well. See 42 Pa.C.S.A. §§ 7341-7342. Where contracts do not specify whether common law or statutory arbitration principles should apply, it is assumed that common law principles govern. Runewicz v. Keystone Insurance Co., 476 Pa. 456, 460-61, 383 A.2d 189, 191 (1978) (referring to Pennsylvania Arbitration Act of 1927); Gentile v. Weiss, 328 Pa.Super. 475, 479, 477 A.2d 544, 545-46 (1984); Savage v. Commercial Union Insurance Co., 326 Pa.Super. 204, 208 n. 1, 473 A.2d 1052, 1054 n. 1 (1984); Pennsy Supply Inc. v. The Nicholson Co., 321 Pa.Super. 475, 479 n. 1, 468 A.2d 808, 810 n. 1 (1983). Under common law arbitration, "the award of an arbitrator ... is binding and may not be vacated or modified unless it is clearly shown that a party was denied a hearing or that fraud, misconduct, corruption or other irregularity caused the rendition of an unjust, inequitable or unconscionable award." 42 Pa.C.S.A. § 7341; Gentile, 328 Pa.Super. at 479-80, 477 A.3d at 546, Chervenak, Keane & Co. v. Hotel Rittenhouse Associates, Inc., 328 Pa.Super. 357, 361-62, 477 A.2d 482, 485 (1984) (citations omitted). Defendants have not made, and there is no evidence to support, any such allegations in this case. Therefore, even assuming Section 2.1 is construed as a provision for binding arbitration, the auditor's decision must be upheld.
III. CONCLUSION
For the reasons stated above, I find that the Agreements are clear and unambiguous. I further find that the plain meaning of the Agreements is that the auditor's determination as to whether the net earnings, as defined in the Agreements, exceeded $1.5 million was a final determination, and that the auditor complied with the terms in the Agreements in making his determination. Because it is undisputed that the auditor found that the target amount was exceeded, I must grant summary judgment in favor of the plaintiffs.
An appropriate order follows.
ORDER
Upon consideration of plaintiffs' motion for summary judgment, defendants' cross motion for summary judgment, and plaintiffs' response thereto, IT IS ORDERED that:
1. Plaintiffs' motion for summary judgment is GRANTED.
2. Defendants' motion for summary is DENIED.
3. Judgment is entered in favor of plaintiffs and against defendants.
IT IS FURTHER ORDERED that judgment is entered as follows:
1. Judgment for plaintiff Eugene C. Wayne and against:
Defendant George Chopivsky, Jr. in the amount of $27,777.78;
Defendant Richard E. Horman in the amount of $22,222.22;
Defendant Joseph F. Corcoran in the amount of $4,550.56;
2. Judgment for plaintiff Kenneth R. Sandler and against:
Defendant George Chopivsky, Jr. in the amount of $8,333.33;
Defendant Richard E. Horman in the amount of $6,666.66; and
Defendant Joseph F. Corcoran in the amount of $1,666.67;
3. Judgment for plaintiff John C. Wolfe and against:
*794 Defendant George Chopivsky, Jr. in the amount of $38,888.89;
Defendant Richard E. Horman in the amount of $31,111.11; and
Defendant Joseph F. Corcoran in the amount of $7,777.78.
IT IS FURTHER ORDERED that there shall be added to the above amounts interest at the legal rate of 6% per annum from June 7, 1984.
NOTES
[1] I initially denied both motions without prejudice, scheduled oral argument, and allowed the parties to request reconsideration of their motions following argument. Wayne v. Chopivsky, No. 85-5943 (E.D.Pa. Jan. 14, 1987) (order). Both parties have requested reconsideration.
[2] Proceedings before Judge Daniel H. Huyett, 3rd, February 17, 1987, tape no. 3, case no. 85-5943. The oral argument was electronically recorded. These numbers refer to the position of the tape when these comments were made. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/8312909/ | Andrea R. Wood, United States District Judge
Defendants Joseph D. Jones and Edward Schimenti have been charged in a two-count Superseding Indictment with crimes relating to their alleged support of a foreign terrorist organization ("FTO"). Specifically, Jones and Schimenti are charged with conspiring with each other to provide and attempt to provide material *814support and resources to the Islamic State of Iraq and al Sham ("ISIS") in violation of 18 U.S.C. § 2339B(a)(1) (Count I), and Schimenti has also been charged with making false statements involving international terrorism to the Federal Bureau of Investigation in violation of 18 U.S.C. § 1001(a)(2) (Count II). Now before the Court are Defendants' motions to dismiss each count. (Dkt. No. 85, 86). For the reasons set forth below, both motions are denied.
BACKGROUND
When considering a motion to dismiss an indictment, a court assumes all facts in the indictment are true and must "view all facts in the light most favorable to the government." United States v. Yashar , 166 F.3d 873, 880 (7th Cir. 1999). A court may also rely on the facts outlined in the criminal complaint and accompanying affidavit. See, e.g. , United States v. Hernandez , 330 F.3d 964, 975 (7th Cir. 2003) ("[A] bill of particulars is not required when the information a defendant needs to prepare his defense is available through [the indictment or] 'some other satisfactory form' ...."); United States v. Davis , 2019 WL 447249, at *1 (N.D. Ill. Feb. 5, 2019) (observing that "[t]he affidavit accompanying the criminal complaint lays out many of the specific facts" in considering defendant's motion to dismiss indictment); United States v. Biancofiori , 2018 WL 372172, at *5 (N.D. Ill. Jan. 11, 2018) ("Although the Second Superseding Indictment may lack particulars, the Criminal Complaint and the discovery propounded in this case are more than adequate."). The facts recounted here are taken from the Superseding Indictment (Dkt. No. 71) and the affidavit filed in support of the criminal complaint (Dkt. No. 1).
Between February and April 2017, Defendants provided cell phones to an individual who they believed was going to travel to Syria to fight on behalf of ISIS, so that the phones could be used to create improvised explosive devices. Unbeknownst to Defendants, that individual was a confidential human source ("CHS") for the Federal Bureau of Investigation ("FBI"). After the CHS informed Defendants that he wished to join ISIS, Defendants worked together to prepare and support the CHS's purported international travel. For example, Schimenti voiced his support for the CHS's travel plans, took the CHS shopping in preparation for his travel, and counseled the CHS regarding how to avoid detection by law enforcement. For his part, Jones introduced the CHS to an individual who Jones believed to operate an ISIS facilitation network capable of delivering the CHS to ISIS-controlled territory in Syria.
On April 12, 2017, the FBI arrested Schimenti. After his arrest, FBI agents interrogated Schimenti about his activities and relationship with the CHS. Schimenti made several false statements during the interrogation. For example, when confronted with recordings of his conversations with the CHS, Schimenti falsely denied that it was his voice on the recordings. FBI agents also asked Schimenti about his interactions with the CHS and the CHS's plan to obtain cell phones for ISIS. Schimenti falsely answered that he thought the phones would be repaired and used by the CHS's family in Syria and falsely denied having conversations with the CHS about using the phones as bomb detonators. Schimenti also falsely denied that the CHS said that he was traveling overseas to fight for ISIS.
Both Defendants were originally indicted in April 2017. Subsequently, in April 2018, the grand jury returned a two-count Superseding Indictment charging both Defendants *815with conspiracy to "provide material support and resources, namely, personnel and equipment" to ISIS (Count I), and charging Schimenti for making materially false statements "involving international terrorism in a matter within the jurisdiction of the [FBI]." (Count II). (Superseding Indictment at 1-4, Dkt. No. 72.)
DISCUSSION
Federal Rule of Criminal Procedure 12(b) provides that "[a] party may raise by pretrial motion any defense, objection, or request that the court can determine without a trial on the merits." Fed. R. Crim P. 12(b)(1). Rule 12 authorizes defendants to challenge the lawfulness of a prosecution on purely legal, as opposed to factual, grounds. See United States v. Coscia , 866 F.3d 782, 790 (7th Cir. 2017) (considering defendant's contention that indictment must be dismissed because the statute under which it is brought is unconstitutionally vague). A court may decide all questions of law raised in a motion to dismiss, including the constitutionality and interpretation of a federal statute. See United States v. Sorich , 523 F.3d 702, 706 (7th Cir. 2008).
I. Defendants' Motion to Dismiss Count I
At issue in Defendants' motion to dismiss Count I is the constitutional validity of § 2339B, which makes it unlawful to "knowingly provide[ ] material support or resources to a foreign terrorist organization, or attempt[ ] or conspire[ ] to do so." 18 U.S.C. § 2339B(1). Defendants do not dispute that ISIS has been designated as an FTO by the Secretary of State. However, Defendants argue that the Court should deem § 2339B void for vagueness and overbreadth. The Court is not persuaded.
"The void-for-vagueness doctrine requires that a criminal statute define an offense with sufficient clarity that an ordinary person has fair notice of what conduct is prohibited and so as to avoid arbitrary and discriminatory enforcement." United States v. Cook , 914 F.3d 545, 549 (7th Cir. 2019). " 'What renders a statute vague is not the possibility that it will sometimes be difficult to determine whether the incriminating fact it establishes has been proved; but rather the indeterminacy of precisely what that fact is.' " Id. at 549-50. (quoting United States v. Williams , 553 U.S. 285, 306, 128 S.Ct. 1830, 170 L.Ed.2d 650 (2008) ). The Court must consider the purported vagueness of the statute here "as applied" to the facts of this particular case, rather than in the abstract. Id. at 550. Accordingly, Defendants must show that the statute "is vague as applied to [them]; and if the statute undoubtedly applies to [their] conduct, [they cannot] argue that the statute is vague as to one or more hypothetical scenarios." Id.
Defendants argue that § 2339B is unconstitutionally vague because it is unclear whether supporting an individual who purportedly desires to join but is not currently a member of an FTO, such as the CHS, constitutes the provision of material support. Defendants claim that the statute "fails to give adequate notice of guidance ... as to what type of individual they cannot interact with." (Defs.' Mot. to Dismiss Count I of the [Superseding] Indictment as Unconstitutionally Overbroad and Void for Vagueness at 7, Dkt. No. 85.) But under the plain language of the statute, Defendants need not interact with an actual or purported member of the FTO to be charged with violating § 2339B. See Lamie v. U.S. Trustee , 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004) ("It is well established that when the statute's language is plain, the sole function of *816the courts ... is to enforce it according to its terms." (internal quotation marks omitted)). Instead, § 2339B makes it unlawful to provide, attempt to provide, or conspire to provide material support or resources to a foreign terrorist organization, without any mention of a requirement of actual interaction. Moreover, courts have consistently applied the statute in situations where the defendant did not meet any actual members of an FTO. See, e.g. , United States v. Hammadi , 737 F.3d 1043, 1045 (6th Cir. 2013) (affirming conviction under § 2339B where the defendant believed he was donating to a third-party fundraising group that supports various FTOs but he was actually interacting with a CHS); United States v. Jumaev , 2018 WL 3490886, at *1 (D. Colo. July 18, 2018) (upholding conviction where the defendant believed he was donating $ 300 to an FTO even though he "had no direct contact with the members of any terrorist organization ... never committed any act of violence, nor did he advocate for any particular violent act").
Here, the Superseding Indictment does not merely accuse Defendants of associating with the CHS; they have also been charged with arranging the CHS's travel and providing cell phones to ISIS. While Defendants claim that they provided the phones to the CHS for use by the CHS's family members in Syria, the Court must assume the truth of the Government's version of the facts. And according to the affidavit in support of the criminal complaint, Defendants sought to provide the phones for ISIS to use in creating improvised explosive devices and tried to support the CHS's plans to join ISIS. The Court finds that Defendants had fair notice that such conduct would run afoul of § 2339B(h), regardless of whether the CHS ultimately joined ISIS or not.
In addition, Defendants argue that it is unclear whether they may be convicted under § 2339B(h) despite the fact that they are not members of ISIS themselves. But Defendants misread the statute, which imposes criminal liability on anyone who "has knowingly provided, attempted to provide, or conspired to provide a foreign terrorist organization with 1 or more individuals (who may be or include himself) to work under that terrorist organization's direction or control to organize, manage, supervise, or otherwise direct the operation of that organization." 18 U.S.C. § 2339B(h) (emphasis added). A plain reading of the provision reveals no requirement that Defendants be under the direction or control of ISIS. Rather, the Government need only prove that Defendants attempted to provide "1 or more individuals," namely, the CHS, "to work under [ISIS]'s direction or control." Id. ; see, e.g. , United States v. Shafi , 252 F. Supp. 3d 787, 790 (N.D. Cal. 2017) (denying motion to dismiss indictment where the defendant was intercepted by federal agents at the airport before he could use his one-way ticket to Istanbul to join an FTO); United States v. Abdi , 498 F. Supp. 2d 1048, 1051 (S.D. Ohio 2007) (denying motion to dismiss indictment where the defendant wanted to travel to Ethiopia for military-style training so that he could eventually join al Qaeda but ultimately could not do so because his travel document application was denied).
Lastly, Defendants challenge § 2339B as unconstitutionally overbroad in violation of the First Amendment. A statute is overbroad if it "chills speech and expressive conduct protected by the First Amendment." United States v. Johnson , 875 F.3d 360, 365 (7th Cir. 2017). A plaintiff arguing overbreadth has a high burden, as "[r]arely, if ever, will an overbreadth challenge succeed against a law or *817regulation that is not specifically addressed to speech or to conduct necessarily associated with speech (such as picketing or demonstrating)." Virginia v. Hicks , 539 U.S. 113, 124, 123 S.Ct. 2191, 156 L.Ed.2d 148 (2003).
Defendants point to § 2339B's definition of an FTO as an organization that has "engaged or engages in terrorist activity ... or ... terrorism," and claim that the statute penalizes independent advocacy and mere membership in a terrorist organization, protected activities under the First Amendment. See 18 U.S.C. § 2339B(a)(1). But the Seventh Circuit expressly rejected this argument in Boim v. Quranic Literacy Institute and Holy Land Foundation for Relief and Development , 291 F.3d 1000, 1026 (7th Cir. 2002), explaining that
[u]nder section 2339B ... [defendants] may, with impunity, become members of Hamas [an FTO], praise Hamas for its use of terrorism, and vigorously advocate the goals and philosophies of Hamas. Section 2339B prohibits only the provision of material support (as that term is defined) to a terrorist organization. There is no constitutional right to provide weapons and explosives to terrorists ...."
Id. The Superseding Indictment charges Defendants with conduct beyond just voicing support for ISIS: they attempted to provide supplies that ISIS could use to create explosives and personnel that ISIS could direct to accomplish its goals. This is sufficient for purposes of § 2339B.
The Court also observes that "[a] defendant who challenges a statute as facially overbroad assumes a heavy burden for it is now well-established that such a challenge can succeed only when ... the statute is unconstitutional in a substantial portion of the cases to which it applies." Johnson , 875 F.3d at 365. Defendants have not identified a single case in which a court has invalidated § 2339B for overbreadth, and the Court's own review of the case law indicates that courts have consistently held otherwise. See Boim , 291 F.3d at 1026 ; see also United States v. Al Kassar , 660 F.3d 108 (2d Cir. 2011) (upholding § 2339 against constitutional challenge for overbreadth), cert. denied , 566 U.S. 986, 132 S.Ct. 2374, 182 L.Ed.2d 1017 (2012) ; United States v. Afshari , 426 F.3d 1150 (9th Cir. 2005) (same); People's Mojahedin Org. of Iran v. Dep't of State , 327 F.3d 1238 (D.C. Cir. 2003) (same).
In sun, the Court is not persuaded that Count I of the indictment should be dismissed for unconstitutional vagueness or overbreadth.
II. Schimenti's Motion to Dismiss Count II
Count II of the Superseding Indictment charges Schimenti with making false statements in violation of 18 U.S.C. § 1001. For a conviction under § 1001, the Government must show that Schimenti "knowingly and willfully made a materially false statement in connection with a matter within the jurisdiction of a federal agency." United States v. Rahman , 805 F.3d 822, 836 (7th Cir. 2015). Materiality depends on "whether the statement in question had a natural tendency to influence, or was capable of influencing the federal agency." United States v. Wilson , 879 F.3d 795, 807 (7th Cir. 2018) (internal quotation marks and bracket omitted).
In his motion to dismiss Count II, Schimenti argues that any false statements he made were necessarily immaterial as a matter of law because the agents to whom he was speaking knew the statements to be false. Schimenti contends that because the FBI had already conducted extensive surveillance and gathered sufficient evidence before his interrogation to *818file a criminal complaint his statements could not have had any influence. But "[u]nder section 1001 a false statement may be material even though the agency did not rely on it and was not influenced by it." United States v. Dick , 744 F.2d 546, 553 (7th Cir. 1984) ("We have held that a false or fraudulent statement must have had only the natural tendency to influence ... the agency."); see also United States v. Ranum , 96 F.3d 1020, 1028 n.12 (7th Cir. 1996) ("[I]t is not necessary for an allegedly false statement to have any ill effect at all, as long as it is capable of having such an effect."). For example, in United States v. Turner , 551 F.3d 657 (7th Cir. 2008), the defendant argued that his false statements were immaterial because the FBI possessed incriminating recordings and thus "already knew the answers to the questions before they asked him." Id. at 662. The Seventh Circuit acknowledged that the defendant's statements "probably had very little actual influence on the agents," but nonetheless held that "the point of his [false statements to the agents] was to cast suspicion away from him, which in the ordinary course would have had an intrinsic capability-a natural tendency-to influence an FBI investigation." Id. at 664 (internal quotation marks omitted). Therefore, the Turner court concluded, "[The defendant'] statements were aimed at misdirecting the agents, and this is enough to satisfy the materiality requirement of § 1001." Id. In the same way, Schimenti made several false statements about his interactions with the CHS and the CHS's plan to obtain cell phones for ISIS that were aimed at misdirecting the FBI. For example, Schimenti falsely claimed that the CHS never told him that he was traveling to join ISIS and he did not provide the phones to be used by ISIS. The Court finds that Schimenti's statements had a natural tendency to influence the FBI's investigation of his conduct, even if the FBI had enough evidence at that point to know that he was lying.
Schimenti also argues that § 1001 does not apply to statements made after the conclusion of a federal agency's investigation, pointing out that his alleged false statements were made after the FBI had conducted extensive surveillance of his activities and consequently arrested him. But again, the Court must accept as true all facts in the Superseding Indictment, and it alleges that, at the time Schimenti made the false statements, the FBI was still "investigating possible violations of federal criminal law in connection with [Defendants] attempting to provide material support and resources to [ISIS]." (Superseding Indictment at 3.) To the extent Schimenti's argument that the FBI had already concluded its investigation relates to the immateriality of his false statements, the Court reiterates that actual reliance by the federal agency is not a requirement under § 1001.
Finally, Schimenti argues that the statutory maximum sentence for his alleged violation of § 1001 should be five years instead of eight years because his alleged false statements did not concern terrorism or any aspect of national security.1 Under § 1001, a defendant faces a maximum imprisonment of eight years if *819his false statements "involve[ ] international or domestic terrorism." 18 U.S.C. § 1001(a). The term "international terrorism" is defined to include activities that meet three requirements: (1) the activities must involve "violent acts or acts dangerous to human life," (2) they must appear to be intended to "intimidate or coerce a civilian population," "influence the policy of a government by intimidation or coercion," or "affect the conduct of a government by mass destruction, assassination, or kidnapping," and (3) they must occur primarily outside of the United States. 18 U.S.C. § 2331(1). Here, the Superseding Indictment charges Schimenti with making false statements about his knowledge and support of the CHS's plan to join ISIS, as well as his provision of cell phones to ISIS for use as bomb detonators. If the CHS indeed joined ISIS, he would be adding to the ranks of an organization that engages in international terrorism. And if carried out, an ISIS bombing would qualify as an act of international terrorism. Therefore, the Court determines that Schimenti's false statements clearly concerned terrorism, and the appropriate statutory maximum sentence under § 1001 is eight years.
CONCLUSION
For the reasons set forth above, Defendants' joint motion to dismiss Count I of the Superseding Indictment (Dkt. No. 85) and Defendant Schimenti's motion to dismiss Count II of the Superseding Indictment (Dkt. No. 86) are both denied.
The Court construes Schimenti's arguments in this respect as a motion raising a defect in the indictment or information under Federal Rule of Criminal Procedure 12(b)(3)(B), rather than a motion to dismiss the indictment. Cf. United States v. Quiceno De La Pava , 1993 WL 50943, at *7 (N.D. Ill. Feb. 23, 1993) (adjudicating defendants' "Motion to Dismiss the Indictment or Grant Alternative Relief," which asked the court to dismiss the indictment or alternatively declare that the maximum sentence could not exceed defendants' life expectancy). | 01-03-2023 | 10-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/2265734/ | 69 F. Supp. 952 (1947)
ATCHLEY et al.
v.
TENNESSEE VALLEY AUTHORITY.
No. 534Consol. Action.
District Court, N. D. Alabama, Middle Division.
February 6, 1947.
Marion F. Lusk, of Guntersville, Ala., for plaintiffs.
Joseph C. Swidler, Gen. Counsel, TVA, Charles J. McCarthy, Asst. Gen. Counsel, TVA, Frederick G. Koenig, Jr., and Robert H. Marquis, all of Knoxville, Tenn., for defendant.
LYNNE, District Judge.
The complaint in this action seeks recovery for alleged destruction of crops as the result of a flood on the Tennessee River which occurred in January, 1946. The complaint contains two counts. The first count alleges that
"* * * while defendant was exercising the powers committed to it by the Congress of operating as a unified system dams, reservoirs, and other structures, works and ways for the promotion of navigation and the control of flood waters along the Tennessee River and its tributaries, this plaintiff owned valuable crops and other property on lands adjacent to or near the waters impounded by defendant above its Wheeler Dam, and below *953 its Guntersville Dam in Marshall County, Alabama; that between those dates defendant's agents or employees while acting within the line and scope of their employment in the operation of said unified system, negligently raised the waters in said Wheeler Reservoir until they overflowed it, and as a proximate result of said negligent conduct, plaintiff's said crops and other property were flooded, drowned, washed away, spoiled or destroyed * * *."
The second count is identical with the first except that it alleges that the action of the defendant in raising the waters of Wheeler Reservoir was willful or wanton.
The defendant has filed a motion for summary judgment under rule 56 of the Federal Rules of Civil Procedure 28 U.S. C.A. following section 723c, on the ground that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Affidavits have been filed in support of and in opposition to the motion. Plaintiffs' affidavits assert that the defendant could have reduced the height of the flood an additional 5.4 feet by holding more water in Guntersville Reservoir and shutting down all releases from the tributary reservoirs during the flood period. Defendant's affidavits assert that it was necessary to retain the storage space in Guntersville Reservoir to guard against the possibility of an increase in the height of the flood which might have resulted from the additional rainfall which was predicted; that at the time the water was released from the tributary reservoirs it could not be foreseen that the releases would add to the crest of the flood; and that the only water released was the small amount necessary to operate the turbines. Defendant's affidavits also assert that the effect of its operation was to reduce the height of the flood by 10 feet at Chattanooga, by 5 feet immediately below Guntersville Dam and by 3.8 feet at the Whitesburg guage approximately 16 miles below the dam, as compared with the height it would have reached under natural stream flow conditions.
Plaintiffs assert that their affidavits raise issues of fact, but in the view that I take of the case it is unnecessary to decide whether the facts averred in the affidavits filed by plaintiffs and defendant can be reconciled. The affidavits have been helpful to an understanding of the situation that gave rise to the action, but it is my opinion that the complaints do not state a cause of action and that had a motion to dismiss been filed instead of a motion for summary judgment, it should have been granted.
The issue presented in this case is identical with that raised and decided in Grant v. Tennessee Valley Authority, D.C.E.D.Tenn., 1942, 49 F. Supp. 564. The plaintiffs in that case sought recovery for alleged damages to crops resulting from releases by the Tennessee Valley Authority of waters from its Chickamauga Dam. The defendant moved for summary judgment and the case was heard on the motion, affidavits and counteraffidavits. The motion for summary judgment was sustained in a well-considered opinion by Judge Darr, primarily on the ground that
"* * * Congress did not intend that the defendant be liable in damages in connection with its handling and manipulating of the waters placed in its control. Any other idea would be quite contrary to public policy" [page 566 of 49 F.Supp.].
I am in complete accord with the views expressed by the court in that case.
The plaintiffs here rely, just as did the plaintiffs in the Grant case, on the provision in section 4(b) of the Tennessee Valley Authority Act, 16 U.S.C.A. § 831c(b), that the corporation "may sue and be sued in its corporate name." In support of their position, plaintiffs cite the following cases: Sloan Shipyards v. United States Fleet Corp., 1922, 258 U.S. 549, 42 S. Ct. 386, 66 L. Ed. 762; Keifer & Keifer v. Reconstruction Finance Corp., 1939, 306 U.S. 381, 59 S. Ct. 516, 83 L. Ed. 784; Canadian Aviator, Ltd. v. United States, 1945, 324 U.S. 215, 65 S. Ct. 639, 89 L. Ed. 901; Reconstruction Finance Corporation v. Menihan Corp., 1941, 312 U.S. 81, 61 S. Ct. 485, 85 L. Ed. 595; Federal Housing Administration v. Burr, 1940, 309 U.S. 242, 60 S. Ct. 488, 84 L. Ed. 724. In my *954 opinion, these cases do not sustain the plaintiffs' position. A distinction must be recognized between the procedural question of whether a government corporation is subject to suit and the substantive question of whether a given set of facts establishes its liability as a matter of substantive law. The sue-and-be-sued clause in the TVA Act does nothing but remove the procedural bar to suit against an agency of the Federal Government. It does not engender liability in a case where liability would not otherwise exist. Lynn v. United States, 5 Cir., 1940, 110 F.2d 586; cf. Posey v. Tennessee Valley Authority, 5 Cir., 1937, 93 F.2d 726.
It has long been settled law that the Federal Government, its agencies and instrumentalities, are not liable for consequential damages arising out of the construction or operation of a navigation improvement.[1] The doctrine of nonliability for consequential damages not amounting to a taking is not based upon the immunity to suit of the United States, but is a doctrine of substantive law which protects the agent as well as the principal.[2] It applies whether the alleged liability is predicated on nuisance, negligence or other tortious conduct. Transportation Co. v. Chicago, 1878, 99 U.S. 635, 25 L. Ed. 336; Keokuk & Hamilton Bridge Co. v. United States, 1922, 260 U.S. 125, 43 S. Ct. 37, 67 L. Ed. 165; Sanguinetti v. United States, 1924, 264 U.S. 146, 44 S. Ct. 264, 68 L. Ed. 608.
"By a long line of cases it has definitely been settled that neither the government nor its instrumentalities would have to respond in damages arising in the development and maintenance of waters for purposes of navigation and flood control, including claims for negligence. It may be noted that this position is not because of governmental immunity from suit but on the grounds of public policy" [Grant v. Tennessee Valley Authority, D.C. 49 F. Supp. 564 at page 566].
The facts of this case illustrate the soundness of the public policy that underlies this principle. The Tennessee Valley Authority is charged by statute with the duty of constructing and operating a series of dams and reservoirs primarily for navigation and flood control. The system includes a number of storage dams on the tributaries and a series of main river dams located between the mouth of the river and Knoxville. The operation of this system requires the continuing exercise of skilled engineering judgment. The main stream reservoirs are drawn down at the beginning of the flood season to the minimum level necessary for navigation. The tributary reservoirs are drawn down at the same time to what is termed the flood control operating level.[3] The main stream reservoirs have only limited storage space and when a flood develops it is necessary to control the releases from these reservoirs in such a way as to reduce the flood to the maximum possible extent, while *955 at the same time reserving sufficient storage capacity to control any flood that may develop. This requires the exercise of hour-to-hour judgment, based on information as to the flow in the river and predictions of future rainfall. The officials charged with responsibility for the operation of the system must decide in every case whether to attempt to secure the greatest possible reduction in the flood which has developed or to save storage space for the greater flood that may develop if the rain continues.
Congress has laid down in section 9a of the TVA Act, 16 U.S.C.A. § 831h 1, the broad policy to be followed by the corporation in the operation of its multipurpose projects, but it has wisely left to the corporation wide discretion as to the details of operation. Cf. United States v. Welch, 1946, 327 U.S. 546, 553, 66 S. Ct. 715. A review of the affidavits filed by plaintiffs shows that their real complaint is as to the manner in which that discretion has been exercised. I am convinced that Congress did not intend that discretion to be controlled by the courts. If the plaintiffs can recover damages for losses sustained by reason of the method of operation adopted by defendant it would seem to follow that they could control such operation through the injunctive process. Surely Congress could not have intended that the judgment of a court or jury as to details of operation be substituted for that of the skilled and experienced engineers to whom this duty has been delegated.
The present case comes clearly within the principle that the performance by executive officers of discretionary governmental duties entrusted to them by statute is not subject to judicial review.[4] This principle has been reiterated time and again in mandamus proceedings to compel executive action,[5] in injunction suits to prevent executive action,[6] and in actions such as that at bar for damages claimed to have resulted from executive action.[7]
The TVA flood control system is designed to afford protection not only to lands riparian to the Tennessee River and its tributaries, but also to the lower Mississippi River basin. If the plaintiffs can *956 maintain this action, every landowner and tenant between the storage dams on the tributaries and the mouth of the Mississippi River can maintain a similar action after every flood. In the words of the Supreme Court in Bedford v. United States, 1904, 192 U.S. 217, 24 S. Ct. 238, 48 L. Ed. 414:
"And if the government is responsible to one landowner below the works, why not to all landowners? The principle contended for seems necessarily wrong. * * * Conceding the power of the government over navigable rivers, it would make that power impossible of exercise, or would prevent its exercise by the dread of an immeasurable responsibility" [page 224 of 192 U.S., 24 S. Ct. 240, 48 L. Ed. 414].
There is no suggestion in the affidavits of any action on the part of the defendant which could properly be described as willful or wanton. Cf. Birmingham Ry., Light & Power Co. v. Cockrum, 1912, 179 Ala. 372, 60 So. 304. But in any event the rule establishing the immunity of an agency of the Federal Government from liability in an action of this kind cannot be defeated by an allegation of willfulness or wantonness. Such immunity has been upheld in cases in which the complaints characterized the defendant's action as: "with malicious intent," Spalding v. Vilas, 1896, 161 U.S. 483, 16 S. Ct. 631, 632, 40 L. Ed. 780; "wrongfully and maliciously," Mellon v. Brewer, 1927, 57 App.D.C. 126, 18 F.2d 168, 169, 53 A.L.R. 1519, certiorari denied, 1927, 275 U.S. 530, 48 S. Ct. 28, 72 L. Ed. 409; "knowingly, negligently and unlawfully," Brown v. Rudolph, 1928, 58 App.D.C. 116, 25 F.2d 540, certiorari denied, 1928, 277 U.S. 605, 48 S. Ct. 601, 72 L. Ed. 1011; "illegally, maliciously, feloniously, and arbitrarily," Lang v. Wood, 1937, 67 App.D.C. 287, 92 F.2d 211; "wanton, malicious and unlawful," Cooper v. O'Connor, 1938, 69 App.D.C. 100, 99 F.2d 135, 137, 118 A.L.R. 1440, certiorari denied, 1938, 305 U.S. 642, 59 S. Ct. 146, 83 L. Ed. 414; "arbitrary, capricious, and malicious," Standard Nut Margarine Co. v. Mellon, 1934, 63 App.D.C. 339, 72 F.2d 557, 559, certiorari denied, 1934, 293 U.S. 605, 55 S. Ct. 124, 79 L. Ed. 696.
I conclude therefore that the defendant's motion for summary judgment must be sustained. Judgment will be entered for the defendant with costs.
NOTES
[1] Jackson v. United States, 1913, 230 U.S. 1, 33 S. Ct. 1011, 57 L. Ed. 1363; Bedford v. United States, 1904, 192 U.S. 217, 24 S. Ct. 238, 48 L. Ed. 414; Sanguinetti v. United States, 1924, 264 U.S. 146, 44 S. Ct. 264, 68 L. Ed. 608; Danforth v. United States, 1939, 308 U.S. 271, 60 S. Ct. 231, 84 L. Ed. 240; Court of Marion County, W.Va., v. United States, 1918, 53 Ct. Cl. 120; Franklin v. United States, 6 Cir., 1939, 101 F.2d 459, affirmed on other grounds, 1939, 308 U.S. 516, 60 S. Ct. 170, 84 L. Ed. 439; Christman v. United States, 7 Cir., 1934, 74 F.2d 112; Ross Const. Co. v. Yearsley, 8 Cir., 1939, 103 F.2d 589, affirmed 1940, 309 U.S. 18, 60 S. Ct. 413, 84 L. Ed. 554; Goodman v. United States, 8 Cir., 1940, 113 F.2d 914; Coleman v. United States, C.C.N.D.Ala., 1910, 181 F. 599.
[2] Ross Const. Co. v. Yearsley, supra; Lynn v. United States, supra; Burnett v. Alabama Power Co., 1916, 199 Ala. 337, 74 So. 459; Chattanooga & Tenn. River Power Co. v. Lawson, 1918, 139 Tenn. 354, 201 S.W. 165.
[3] The method of operation adopted by TVA has been approved by the TVA Investigating Committee (Report of the Joint Committee Investigating the Tennessee Valley Authority, S.Doc. 56, 76th Cong., 1st Sess. (1939), p. 143) and in the unpublished findings of the District Court in Tennessee Electric Power Co. v. Tennessee Valley Authority, D.C.E.D. Tenn., 1938, 21 F. Supp. 947, affirmed, 1939, 306 U.S. 118, 59 S. Ct. 366, 83 L. Ed. 543.
[4] This principle has recently been reaffirmed by Congress in the Federal Tort Claims Act, Pub.L.No.601, 79th Cong., 2d Sess., Aug. 2, 1946, 28 U.S.C.A. § 921 et seq. which authorizes tort actions against the Federal Government, but expressly excludes suits based on alleged abuse of discretion. The purpose of Congress in expressly excluding such actions must have been to eliminate the possibility that its consent to suit would be construed as an intent to change the existing substantive law. TVA was exempted from the provisions of the Act at its own request on the ground that it was already subject to suit and certain of the procedural aspects of the Act would be burdensome. The Act was passed after the decision in the Grant case and it must be presumed that TVA sought and Congress granted the exemption with that case in mind.
[5] Decatur v. Paulding, 1840, 14 Pet. 497, 10 L. Ed. 559; Reeside v. Walker, 1850, 11 How. 272, 13 L. Ed. 693; Boynton v. Blaine, 1891, 139 U.S. 306, 11 S. Ct. 607, 25 L. Ed. 183; Riverside Oil Co. v. Hitchcock, 1903, 190 U.S. 316, 23 S. Ct. 698, 47 L. Ed. 1074; Work v. Rives, 1925, 267 U.S. 175, 45 S. Ct. 252, 69 L. Ed. 561.
[6] Wells v. Roper, 1918, 246 U.S. 335, 38 S. Ct. 317, 62 L. Ed. 755; Transcontinental & Western Air v. Farley, 2 Cir., 1934, 71 F.2d 288, certiorari denied, 1934, 293 U.S. 603, 55 S. Ct. 119, 79 L. Ed. 695; Boeing Air Transport v. Farley, 1935, 64 App.D.C. 162, 75 F.2d 765, certiorari denied, sub. nom. Pacific Air Transport v. Farley, 1935, 294 U.S. 728, 55 S. Ct. 637, 79 L. Ed. 1258.
[7] Spalding v. Vilas, 1896, 161 U.S. 483, 16 S. Ct. 631, 40 L. Ed. 780; Kendall v. Stokes, 1845, 3 How. 87, 11 L. Ed. 506, 833; Wilkes v. Dinsman, 1849, 7 How. 89, 12 L. Ed. 618; Yaselli v. Goff, 2 Cir., 1926, 12 F.2d 396, 56 A.L.R. 1239, affirmed, 1927, 275 U.S. 503, 48 S. Ct. 155, 72 L. Ed. 395; Standard Nut Margarine Co. v. Mellon, 1934, 63 App.D.C. 339, 72 F.2d 557, certiorari denied, 1934, 293 U.S. 605, 55 S. Ct. 124, 79 L. Ed. 696; Cooper v. O'Connor, 1938, 69 App.D.C. 100, 99 F.2d 135, 118 A.L.R. 1440, certiorari denied, 1932, 305 U.S. 643, 59 S. Ct. 146, 83 L. Ed. 414; Brown v. Rudolph, 1928, 58 App.D.C. 116, 25 F.2d 540; Jones v. Kennedy, 1941, 73 App.D.C. 292, 121 F.2d 40, certiorari denied 1941, 314 U.S. 665, 62 S. Ct. 130, 86 L. Ed. 532. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265747/ | 69 F. Supp. 705 (1947)
ILLINOIS BANKERS LIFE ASSUR. CO.
v.
BLOOD et al.
No. 46C1302.
District Court, N. D. Illinois, E. D.
February 18, 1947.
Snyder, Chadwell & Fagerburg, of Chicago, Ill., for plaintiff.
K. J. Owens and Dent, Weichelt & Hampton, all of Chicago, Ill., for defendants.
CAMPBELL, District Judge.
The plaintiff has filed a bill of interpleader, has paid into the registry of this court the sum of $1,127 (alleged to be the net proceeds of a life insurance policy in the face amount of $2,000, plus prepaid interest of $24.22 and less a policy loan of $897.22) payable by plaintiff, and now moves for the entry of an order discharging it from further liability to any of the defendants on said policy and enjoining said defendants from bringing any action against plaintiff on the policy, and ordering the Clerk of this court to pay to the plaintiff's attorneys plaintiff's costs in the sum of $73.79 and attorney's fees of $150 out of the said insurance proceeds. The bill is brought under the provisions of the Federal Interpleader Act, 28 U.S.C.A. § 41(26). The controversy between the defendants (some of whom are citizens of different states and thus provide the jurisdictional basis for this proceeding under the Act) involves the heirs of the insured (who was predeceased by the beneficiary) on the one hand, and, on the other, Willard G. Blood, who contends that he paid certain premiums or assessments on the policy in the amount of $569.78 upon the express promise of repayment made by the insured, and who has made a claim to plaintiff for reimbursement *706 in said amount from the proceeds of the policy.
The insured died on October 19, 1941. On or about December 17, 1941, the defendant Blood, acting as executor of the estate of the insured, notified the plaintiff of the insured's death and subsequently, on January 6, 1942, filed with the plaintiff proof of death and proof of relationship forms. On January 3, 1942, the attorney for defendant Blood notified plaintiff of the claim for reimbursement of $569.78. Shortly thereafter Mr. Blood was recalled to army duty. In July 1942, the attorney for Mr. Blood notified plaintiff that no settlement could be reached with the insured's heirs on the claim. Plaintiff could not then file this bill of interpleader because service could not be obtained upon Mr. Blood. Upon the return of the latter from military service in Italy in April 1946, plaintiff again attempted and failed to secure a release from defendant Blood and all the heirs of the insured, and thereupon filed this bill of interpleader and paid the net proceeds of the policy into the registry of the court.
Certain defendants resist plaintiff's motion for the entry of an order discharging it and allowing its costs and attorney's fees to be paid out of the fund in the court's possession, on the grounds that:
(1) Plaintiff's delay in bringing this action defeats its right to attorney's fees and costs.
(2) The claim of $150.00 for attorney's fees is excessive.
(3) Plaintiff should be required to pay interest on the sum withheld pending the filing of this action.
It rests in the discretion of the court to determine whether, in a particular situation, the plaintiff's delay in bringing suit was so unreasonable as to constitute laches and thus defeat its normal right to recover costs out of the fund paid into court. In New York Life Insurance Co. v. Bidoggia, D.C.Idaho 1926, 15 F.2d 126, the fact that the plaintiff did not commence its interpleader action until the claimants started suit in the state court to recover on the policy was held sufficient delay to defeat the normal right of a stakeholder in this situation to recover costs and attorney's fees. In Royal Neighbors of America v. Lowary, D.C.Mont.1931, 46 F.2d 565, a delay of over twelve months in bringing the action was held to constitute laches defeating the plaintiff's right to bring interpleader. In Boice v. Boice, D.C.N.J.1943, 48 F. Supp. 183, the plaintiff's action in filing an interpleader only after a state court had entered a ruling against him was held to come too late. In the present case, the plaintiff's delay of over four years was the direct result of the fact that Willard G. Blood, one of the necessary parties in this interpleader action, was in military service and could not be served with summons. This action was commenced three months after plaintiff was notified that Mr. Blood had returned from Italy, during which interval the plaintiff again attempted to secure a release from all the claimants to the insurance proceeds. In view of these facts, it is the opinion of the court that the plaintiff has acted with reasonable diligence in attempting to dispose of the insurance proceeds without subjecting itself to possible additional liability as to a portion of such proceeds. Plaintiff is therefore entitled to recover its costs and under the usual rule, a reasonable attorney's fee to be fixed by this court. Globe Indemnity Co. v. Puget Sound Co., Inc., 2 Cir., 1946, 154 F.2d 249.
Defendants' counsel has attacked the request for an attorney's fee of $150 only on the grounds that plaintiff's laches defeats it or that the amount is excessive. However, the Illinois rule is that attorney's fees are not allowable to a party filing an interpleader, contrary to the usual rule stated by the Second Circuit Court of Appeals in the Globe Indemnity case. Metropolitan Life Insurance Co. v. Kinsley, 1915, 269 Ill. 529, 109 N.E. 1011; Mical v. International Workers Order, Inc., 1945, 326 Ill. App. 398, 62 N.E.2d 21. A federal court in another district in Illinois has recently held that under the doctrine of Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, 114 A.L.R. 1487, as extended to equitable remedies in Guaranty Trust Co. v. York, 1945, 326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079, 160 A.L.R. 1231, this Illinois rule must be applied by a federal *707 court in an interpleader action, since the federal interpleader statute (28 U.S.C.A. § 41(26) does not create a federal right but merely extends the jurisdiction of the district courts in applying a traditional equitable remedy. Danville Building Ass'n of Danville v. Gates, D.C.E.D.Ill., 1946, 66 F. Supp. 706.
I am frankly surprised to learn that such is the law of Illinois on this point, since I know the practice in the local state trial courts is to allow the payment of plaintiff's attorney's fees out of the fund paid into court in interpleader actions. But I am compelled to follow the law of Illinois as declared by its courts of review. The request for attorney's fees is therefore denied.
It is true that plaintiff has had the use of the policy proceeds for over four years, but it held them as an involuntary stakeholder. Its failure to pay initially was the result of the defendants' inability to decide among themselves who was entitled to the insurance money. In the case of an insurance policy, interest begins to run from the time that those entitled to the policy proceeds have put themselves "in position to demand payment of the policy * * *." Ocean Accident & Guarantee Corporation, Ltd. v. Schachner, 7 Cir., 1934, 70 F.2d 28, 30. By their inability to resolve conflicting claims, the defendants were not in position to demand payment. Because of the war, plaintiff could not bring this bill of interpleader at an earlier date. On balancing the equities, therefore, I think that plaintiff should not be required to pay interest on the net proceeds of the policy. By the same reasoning, however, plaintiff should not charge interest on the policy loan during this period when it has had the use of the policy proceeds without payment of interest. It is not clear from the financial statement in paragraph 8 of the bill of interpleader what the situation is with regard to interest on the policy loan. The plaintiff is therefore directed to file an amendment to the bill within twenty days clarifying this matter, and to pay into the registry of the court any interest charged on the policy loan following the death of the insured, whereupon an order will be entered discharging the plaintiff, enjoining the defendants from suing the plaintiff, and allowing plaintiff's costs but not attorney's fees. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265748/ | 239 P.3d 479 (2010)
2010 OK CIV APP 77
Andrew J. ORCUTT, Petitioner/Appellant,
v.
LLOYD RICHARDS PERSONNEL SERVICE &/or Compsource Oklahoma and the Workers Compensation Court, Respondents/Appellees.
No. 107,047. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 4.
Court of Civil Appeals of Oklahoma, Division No. 4.
June 25, 2010.
*481 W.E. Sparks, Tulsa, OK, for Petitioner/Appellant.
David J.L. Frette, Hastings & Associates, Tulsa, OK, for Respondents/Appellees.
JERRY L. GOODMAN, Judge.
¶ 1 Claimant, Andrew J. Orcutt, appeals the trial court's April 22, 2009, order denying his claim for compensation for injury to his left knee while playing basketball in Employer's warehouse. We sustain the order.
FACTS
¶ 2 Claimant was employed by Lloyd Richards Temporary Employment Agency who assigned him to work for Marisol in its warehouse. The warehouse contained a portable basketball goal with the surrounding floor painted to simulate a basketball court. Marisol permitted its workers to use these facilities to play basketball before and after work and on their lunch and afternoon breaks.
¶ 3 Claimant argues that Marisol encouraged this workplace recreational activity by its lunch period policy. Employees were granted one-half hour for their lunch period. However, employees remaining on the premises during the lunch period were not required to clock out and only had thirty minutes deducted from their work time for the lunch period each day. Conversely, employees leaving the premises were allowed a half-hour for their lunch period but were required to clock out and in when leaving and returning to work. Apparently, Claimant used a portion of his lunch period to play basketball.
¶ 4 Claimant injured his knee during this activity. Employer agreed Claimant was injured. However, it denied his injury was a compensable injury.
¶ 5 The trial court found claimant "was injured while playing a game of basketball with co-worker immediately after lunch" and those injuries "are the result of engaging in a recreational activity, (playing basketball)," and therefore did not arise out of and in the course of his employment, citing 85 O.S.2001 and Supp.2005, § 3(13)(d).
THE CHALLENGED LAW
¶ 6 Title 85 O.S.2001 and Supp.2005, § 3(13)(a) and (d) state, in relevant part:
a. "Compensable injury" means any injury... which arises out of and in the course of employment if such employment was the major cause of the specific injury or illness....
d. "Compensable injury" ... shall not include the ordinary, gradual deterioration or progressive degeneration caused by the aging process, unless the employment is a major cause of the deterioration or degeneration and is supported by objective medical evidence, as defined in this section; nor shall it include injury incurred while engaging in, performing or as the result of engaging in or performing any recreational or social activities....
(Emphasis added.)
¶ 7 Claimant's sole proposition of error states:
Trial Court Abused Its Constitutional Authority In Not Declaring Section 3 Subsection 13(d) Of Title 85, As Vague, Ambiguous And Unconstitutional, Based On Its Failure To Qualify Or Quantify, What Or When Recreational Or Said Social Activities Are To Be Deemed Non-Compensable Injuries. [All caps removed.]
STANDARD OF REVIEW
¶ 8 Claimant's constitutional challenge to this statute presents a question of law, which we review de novo.
The appellate court will exercise its "plenary, independent, and non-deferential authority [when] reexamin[ing] a trial court's legal rulings." Spielmann v. Hayes, 2000 OK CIV APP 44, 3 P.3d 711; Neil Acquisition, L.L.C. v. Wingrod Inv. Corp., 1996 OK 125, ¶ 4, 932 P.2d 1100, 1103 n. 1. This Court's standard of review is de novo and gives no deference to the legal rulings of the trial court. State, ex rel. Dept. of Human Services, ex rel. Jones v. Baggett, 1999 OK 68, 990 P.2d 235. Regarding questions of constitutionality, this Court will not declare an act of the legislature "void unless it is clearly, palpably, and plainly inconsistent with the terms of the *482 Constitution." Hazel-Atlas Glass Co. v. Walker, 1945 OK 176, 195 Okla. 470, 159 P.2d 268, 269.
Rivas v. Parkland Manor, 2000 OK 68, ¶ 6, 12 P.3d 452, 455.
ANALYSIS
¶ 9 Claimant's proposition of error is without merit.
¶ 10 The appealed order does not address the issue of § 3(13)(d)'s constitutionality; therefore we have no decision on this issue to review. Claimant must present a record to this Court showing the trial court ruled erroneously on the appealed issue. No such ruling appears in the record. Absent such, the final order of the trial court is presumed to be correct. Pracht v. Oklahoma State Bank, 1979 OK 43, ¶ 5, 592 P.2d 976, 978. This reason alone supports our finding and conclusion that the trial court committed no error.
¶ 11 Because of the importance of the constitutional issue, we will accept Claimant's argument that the trial court implicitly ruled that the statute is constitutional. Claimant contends the language chosen by the Legislature, i.e., "any recreational or social activity" is so vague and overbroad as to prohibit constitutionally protected conduct. Claimant's brief asks this question:
What conduct is asking to be protected? Any injury sustained under the dominion and control and approval of one's employer should be compensable.
¶ 12 Clearly, the Legislature has answered Claimant's question: A worker's conduct during a recreational or social activity resulting in an injury to the worker is excluded from the definition of a compensable injury even though such an activity occurs at the workplace and is permitted and condoned by the employer.
¶ 13 Claimant makes another argument that the Legislature's choice to limit the type of injury for which compensation is paid will result in "unintended consequences" because activities which used to be compensable under previous law are no longer compensable. This argument is logically untenable. The intended consequence of this provision is that injuries to workers incurred during employer-sponsored recreational or social activities will no longer be compensable. Clearly, this is the intended consequence of the law, not the unintended.
¶ 14 Under this provision Claimant is correct when he states that "activities which used to be compensable under previous law are no longer compensable." This is so because the Legislature has exercised its legislative power to make it so. The Legislature passed the subject law, one of the purposes of which is to exclude from the definition of compensable injury "... injury incurred while engaging in, performing or as the result of engaging in or performing any recreational or social activities...."
We also recognize the following general rules concerning statutory interpretation. When called on to determine the meaning of a statute, a court's primary goal is to ascertain and then follow the intention of the Legislature. See TRW/Reda Pump v. Brewington, 1992 OK 31, 829 P.2d 15, 20. Legislative intent is ascertained by reviewing the whole act in light of its general purpose and object. Id. [Fulsom v. Fulsom, 2003 OK 96, 81 P.3d 652] further delineated certain well recognized principles concerning statutory interpretation. Fulsom states:
The plain meaning of a statute's language is conclusive except in the rare case when literal construction would produce a result demonstrably at odds with legislative intent. Also, a court is duty-bound to give effect to legislative acts, not to amend, repeal or circumvent them. A universally recognized principle in cases when a court is called on to interpret legislative enactments is that the court is without authority to rewrite a statute merely because the legislation does not comport with the court's conception of prudent public policy. Fulsom, 2003 OK 96, ¶ 7, 81 P.3d at 655. (citations omitted).
Boston Avenue Management, Inc. v. Associated Resources, Inc., 2007 OK 5, ¶ 11, 152 P.3d 880, 885.
*483 ¶ 15 The fact this particular law may have unintended consequences can not be allowed to defeat its intended consequences. The Legislature has made clear that the purpose and consequence of the subject statute is to exclude from the definition of compensable injury an injury incurred while engaging in, performing, or as the result of engaging in or performing, any recreational or social activities.
¶ 16 Claimant further argues that the Legislature cannot limit or change benefits conferred by the Workers' Compensation Laws. This too is an erroneous argument. What statute applies to a particular case or controversy and whether benefits have vested under the applicable statute admittedly requires the exercise of judicial power. Nevertheless, the definition of compensable injury and the nature and extent of benefits to be awarded for such is determined by statute. A compensation system for workers' injuries occurring on the job did not exist at common law. These various state workers' compensation systems are strictly a legislative creation.
¶ 17 In Rivas, id., the Supreme Court of Oklahoma held that:
The formulation of the particular elements and details of the Workers' Compensation Act clearly falls within the legislature's province. Okla. Const. Art. 5, § 36; [Adams v. Iten Biscuit Co., 1917 OK 47, 162 P. 938] at 942......
Rivas invokes the remedy guarantee to attack this substantive legislative policy choice. However, this Court has already determined Art. 2, § 6 was not "intended to preserve a particular remedy for given causes of action in any certain court of the state, nor was it intended to deprive the Legislature of the power to abolish remedies for future accruing causes of action..., or to create new remedies for other wrongs as in its wisdom it might determine." Adams, 162 P. at 942. Accordingly, this Court cannot grant Rivas the relief he seeks under Art. 2, § 6, because the legislature is under no obligation to preserve a certain remedy for Rivas and the courts are, in turn, not able to provide a remedy where the legislature has not provided one.
The remedy clause does not constrain the legislature, but rather compels the judiciary to be open to all persons with actionable causes. In Oklahoma, Art. 2, § 6 does not provide an avenue for Rivas to attack the actions of the legislature. Because it is the legislature and not the judiciary that limited Rivas' PPD compensation, this proposition must fail.
Id. at ¶¶ 19-21, at 458.
¶ 18 Claimant makes his own error of vagueness when he asserts that legal error occurred because Claimant had some right to a specific remedy prior to becoming injured. The Legislature's prerogative to exclude from compensability injuries to workers incurred during work-related recreational and social activities is not an unconstitutional exercise of its power to legislate. Claimant has not been deprived of any rights, vested or otherwise.
¶ 19 Finally, there is ample competent evidence in this record to support the trial court's factual determinations, which is all the law requires under the so-called "any competent evidence" standard of review.
¶ 20 For all these reasons, we sustain the order under review.
¶ 21 SUSTAINED.
GABBARD, P.J., concurs.
RAPP, J., not participating. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265752/ | 69 F. Supp. 214 (1947)
DETERDING
v.
UNITED STATES.
No. 47081.
Court of Claims.
January 6, 1947.
John F. Downey, of Sacramento, Cal. (Downey, Brand and Seymour, of Sacramento, Cal., on the brief), for plaintiff.
Thomas L. McKevitt, of Washington, D. C., and David L. Bazelon, Asst. Atty. Gen., for defendant.
Before WHALEY, Chief Justice, and MADDEN, WHITAKER, LITTLETON, and JONES, Judges.
MADDEN, Judge.
The United States has demurred to the plaintiff's petition. The allegations of the petition are, in substance, as follows: The plaintiff's predecessor in title, Margaret C. Hamilton, made a deed to Anderson in 1909, and Anderson thereafter conveyed his interest to the United States. The deed described the land, the interests in which are involved in this suit, which land lay adjacent to the Sacramento River in California. The deed contained the following language:
"To have and to hold all and singular the said premises, together with the appurtenances, unto the said party of the second part and to his heirs and assigns forever.
*215 "The said land hereby conveyed is to be used for the purpose of widening and straightening the Sacramento River from Rio Vista to Collinsville or for works or purposes incidental thereto and in connection therewith; and it is understood that the grantors or their assigns shall have at all times the right to make such use of the lands hereby conveyed as may in the judgment of the grantee or his assigns hereunder be made without interfering in any manner with the said works or purposes for which this deed is made.
"And it is further understood that the grantors and their assigns, owners of the land adjacent on the northwest to the land hereby conveyed, shall have and do hereby reserve the right of access across the land hereby conveyed to and from the bank of the river as now or hereafter located, for the purpose of shipping and receiving freight upon or from boats or vessels plying in the river, provided that such right of way shall be used in such manner, and provided that such right of way can be used in such manner, as not to interfere in any way with the works or purposes for which this deed is made."
The plaintiff succeeded to all the interests of Hamilton in the lands mentioned in the deed. Prior to July 1, 1942 the plaintiff leased the lands here involved to the Amerada Oil Company and the American Petroleum Corporation for the production of oil and gas. On July 1, 1942 the United States entered into a compensatory royalty agreement with the Amerada Oil Company which had gas leases on other lands in the neighborhood of the land here involved, under the terms of which the United States agreed not to drill or permit the drilling of gas wells on the land here involved, and the Amerada Company agreed to pay to the United States as a compensatory royalty a share, proportionate to the acreage of the land here involved in relation to the whole area from which gas was to be taken, of the sale price which Amerada should receive from the sale of gas taken from wells in the area. The United States agreed to make a contribution of $25,000, which was one-half the cost of a well, and $100 per month for upkeep and current expense. The agreement contained the following language in its introductory part:
"* * * Whereas, the Secretary of the Interior represents that he has the power and authority under the provisions of said Executive Order, and his general administrative authority, including powers vested in him by the Act of February 25, 1920 (41 U.S.Stats. 437), as amended by the Act of August 21, 1935 [49 Stat. 674] (46 U.S. Stats. 1523), and other applicable acts of Congress, rules, regulations and orders, to enter into this agreement; * * *." and also the following final paragraph
"9. Government does not warrant title to said parcels but if at any time it shall be finally determined by a final judgment or decree of a Court of competent jurisdiction, or otherwise, that the United States has no title to the mineral rights underlying said parcels or any portion or portions thereof, no further payment shall be required by Amerada hereunder with respect to any such parcel or any portion or portions thereof. * * *"
After having made this agreement with the United States, the Amerada Company did not continue its oil and gas lease from the plaintiff, which expired on September 17, 1942. It has paid the United States some $80,000 under the agreement described above. The plaintiff seeks, in this suit, to recover the amount which the United States has so received. She seeks, in the alternative, to recover the entire present value of the gas interests in the land, on the theory that the United States has taken those interests.
The plaintiff claims that after the deed from Hamilton to Anderson, Hamilton, and now the plaintiff as her successor, continued to be the owner of the gas in the land described in the deed, or of the sole right to produce and recover the gas. She says that the deed conveyed to Anderson only an easement to do upon the land whatever was necessary for widening and straightening the river, leaving in the grantor all other uses and interests in the land. She further says that if Anderson received more than an easement, and became the owner of corporeal interests in the land, still the language of the deed made it plain that the grantor was to retain many interests in the *216 land, and that those interests, whether they be easements, profits a prendre, or rights under running covenants, include the right here in question, the sole right to take gas from the land.
We think that the plaintiff owns the exclusive right to take gas from the land. We think that the deed to Anderson, when properly analyzed, may more properly be said to have granted an easement than a corporeal interest. From a reading of the whole deed it is plain that the words of purpose contained in it were not insignificant surplusage, as words of purpose, without more, are frequently held to be. That the grantee was to have the land only for the stated purpose is made plain by the succeeding language which provides in substance that the grantor is to have the right to make all other uses of the land not inconsistent with the stated purpose. Since the purpose of entering on the land to change the course of the stream is much more in the nature of a jus in re aliena than the right, for example, which the grantor was clearly intended to have, to occupy and cultivate the land, we think the conventional pattern of legal interests is better followed by treating the grantee's particular interest as the easement, and the grantor's retained interest as the corporeal and residuary interest in the land.
We agree, however, with the plaintiff, that the application of particular names to the interests involved is not decisive of the ownership of the interests. The right to take gas from the land of another is a conventional subject matter of a profit a prendre, hence if the parties intended, or if the law of the State of California requires, and we are not suggesting that it does, that the deed given to Anderson granted corporeal interests to him, the right of the grantor to take gas from the granted land was nevertheless a lawful and conventional interest.
The provisions of the California Civil Code reenforce our views. Sections 1641 and 1066, which require that the whole document be read before a decision is reached as to the effect of any part of it, and Section 1069, which says that reservations in deeds should be construed in favor of the grantor, are applicable. The spirit of the latter section is surely applicable to a provision, other than a technical reservation, which expresses an intent that, in spite of the deed, the grantor is still to have interests in the land as, for example, by way of an exception or of a covenant running with the land.
We have concluded, then, that the plaintiff is the sole owner, of the right to take gas from the land in question. The United States has, under its agreement with the Amerada Company, received money for its agreement to refrain from doing what it had no right to do. The plaintiff sues for the money so received. The United States urges that this court has no jurisdiction to grant the relief demanded. The question is difficult, indeed. The basis of our jurisdiction, if it exists, is that the plaintiff has rights arising out of a contract which the United States has breached. We think that the relation between the plaintiff and the United States, in relation to their respective rights in the land in question, is a conventional or contractual relation, within the meaning of our jurisdictional statute, 28 U.S.C.A. § 41 et seq. See Fletcher v. Peck, 6 Cranch 87, 136, 3 L. Ed. 162. The deed from the plaintiff's predecessor to the predecessor of the United States was a determination and statement of what rights the parties and their successors were to have in this land. When the United States took the Anderson title, it took it, not by acquisition in some overriding capacity as sovereign, but as successor to Anderson, and subject to his obligations, as they were stated in the deed. His obligations became those of the United States, because it was the intent of the parties, and is the rule of law, that successors shall be bound.
The question remains, Was it a breach of contract for the United States to enter into the compensatory royalty agreement with Amerada, and receive the payments provided in that agreement? The only rational basis for the agreement was that the United States was asserting ownership of the right to the gas, though it refused to warrant its title to it, and the Amerada Company was buying protection from a possible competing well located on the land in question. We think that the *217 provision in the deed to Anderson, that the grantor and its successors should have the use of the land for all purposes except the stated purpose for which the grantee might use it, constituted an agreement that the grantee and its successors would not claim rights inconsistent with that provision, and thereby cast doubts upon the grantor's title to the rights promised her. And we conclude that when the United States, solely on the basis of the documents here involved, asserted title to and sold for money an interest which belonged to the plaintiff, and which, as we have construed the transaction, it had agreed that it would not assert, it breached the contract contained in the deed to Anderson. In these circumstances we think that the net amount of the money received by the United States belongs to the plaintiff, as a fair measure of the damage caused her and as a restitution to her of what the United States has gained by its breach of its contract.
The defendant's demurrer is overruled.
It is so ordered.
WHITAKER and LITTLETON, Judges, and WHALEY, Chief Justice, concur.
JONES, Judge (dissenting).
It is my view that the term "use" as set out in the reservation is not sufficient to cover the right on the part of plaintiff to remove and dispose of the oil and gas.
Oil and gas while in the ground are a part of the corpus of the property. Taking them out and disposing of them is not merely a use of the property, but is a removal and sale of a part of the body of the property. The reservation of the right to use the property does not so limit a deed that is otherwise complete as to permit the grantor to sell the property or any part thereof.
While this viewpoint is somewhat weakened by the stated purpose of the transfer, to wit, "widening and straightening the Sacramento River," yet when the whole instrument is considered, it seems to me that the stated purpose is the reason for making the deed rather than a limitation that would make the transfer a mere easement.
In my judgment this reservation is insufficient to support plaintiff's claim. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265756/ | 69 F. Supp. 468 (1946)
BLUM et al.
v.
WILLIAM GOLDMAN THEATRES, Inc.
Civil Action No. 5524.
District Court, E. D. Pennsylvania.
December 19, 1946.
*469 Felix & Felix, of Philadelphia, Pa., for plaintiff.
Barnes, Dechert, Price & Smith, of Philadelphia, Pa., for defendant.
KIRKPATRICK, District Judge.
The only part of the decree which calls for comment is the award of damages.
The complaint discloses two distinct causes of action, one in equity and the other at law, and the suit is, in effect, two separate actions tried together. Upon the first cause of action equitable relief is sought consisting of specific performance, injunction and an accounting for profits. Upon the second, damages are claimed.
The only items of damage claimed by the plaintiff are the counsel fee and expenses necessarily incurred by the plaintiff in obtaining the equitable relief which he sought in his other cause of action.
There is no doubt that the general rule is that a party to adversary litigation is ordinarily required to pay his own counsel fees. There are, however, some tort actions in which the courts have recognized exceptions to the rule. In Pennsylvania, for example, in suits for malicious abuse of process or for excessive distraint "Compensatory damages are such as indemnify the plaintiff, including * * * counsel fees and any other actual loss the plaintiff suffered." Barnett v. Reed, 51 Pa. 190, 88 Am.Dec. 574 (charge of the lower court approved by the Supreme Court). See Shumaker v. Hankey, 158 Pa. Super. 602, 605, 45 A.2d 910. Another tort action in which counsel fees have generally been allowed as damages (although there are decisions to the contrary) is the action for deceit for fraudulently inducing the making of a contract. In such cases a number of courts both in England and in this country have allowed the plaintiff to recover the expenses of other litigation, incident to the contract so made, incurred in the unsuccessful attempt *470 to enforce it. See Case Note 41 A.L. R. 1153. The cause of action in this class of cases comes pretty close to that in the present case. So far as the theory of damages is concerned, I can see no substantial difference between a situation where a plaintiff has expended money in attempting to enforce a contract induced by the defendant's fraud and one where he has expended money in enforcing a contract, the breach of which the defendant maliciously induced.
There never seems to have been any question about the general principle that "where the wrongful act of the defendant has involved the plaintiff in litigation with others or placed him in such relation with others as makes it necessary to incur expense to protect his interest, such costs and expenses, including attorneys' fees, should be treated as the legal consequences of the original wrongful act and may be recovered as damages." American Jurisprudence, Damages, Sec. 144. This principle is fully applicable to the present case except for the fact that here the litigation to protect the plaintiff's interest, in which the expense claimed was incurred, was not against a third party but against the wrongdoer himself and was combined with the tort action against the wrongdoer. This, however, presents no serious difficulty. The absence of authority directly upon the point arises, no doubt, from the fact that until the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, permitted the combining of actions in equity and at law, separate suits were always necessary in a situation such as the present.
That the same defendant was sued in both actions is unimportant as shown by Feldmesser v. Lemberger, 101 N.J.L. 184, 127 A. 815, 41 A.L.R. 1153, where it appeared that the defendant procured a contract by which the plaintiff agreed to buy certain premises of which the defendant falsely represented himself to be the owner. Later, the defendant refused to convey and the plaintiff sued the defendant for specific performance in which suit he was defeated by proof that a third party owned the premises and the defendant had no interest in them. In a subsequent action against the defendant for deceit, it was held that the costs and expenses of the suit for specific performance were proper elements for damage. It is to be noted that the equitable action was not against a third party but against the defendant himself, and the only point of difference between that case and the one now under consideration is the immaterial one that two separate suits were brought (as they had to be under the New Jersey law) instead of a single one. I conclude that counsel fees and expenses are proper elements of damage.
I am satisfied that the plaintiff has fully established his cause of action in tort against the defendant. There can be no question that the defendant induced the breach and that, from the time that he took the first step in that direction, he had full knowledge of the existence of the trustees' contract with the plaintiff and of the plaintiff's rights under it. He continued his efforts to procure the breach after ample warning that he would be held to full accountability for all expenses to which the plaintiff was put. He succeeded in his purpose not simply by persuasion, but by offering terms to the trustees which put them in such a position that in their fiduciary capacity they could hardly do otherwise than repudiate their obligation to the plaintiff, and sell to him.
The general rule of tort liability in such a case is given in the Restatement of the Law of Torts, Sec. 766, as follows: "* * * one who, without a privilege to do so, induces or otherwise purposely causes a third person not to perform a contract with another is liable to the other for the harm caused thereby." Acting under a privilege recognized by the law exempts the actor from liability but there is no pretense that this defendant caused the trustees to breach their contract with the plaintiff for any reason other than to advance his own interests. Had his interest amounted to a legal right a privilege on that ground might have existed but in that regard the Restatement goes on Sec. 773, Comment a. "The privilege is of narrow scope. It protects the actor only when (1) he has a legally protected interest * * *." The defendant in the present case had no legally protected interest.
*471 The question of malice remains to be considered. The tort is sometimes referred to as "malicious" inducement of breach of contract but, as stated in the Restatement, Sec. 766, Comment m: "There are frequent expressions in judicial opinions that `malice' is requisite for liability in the cases treated in this Section. But the context and course of decision make it clear that what is meant is not malice in the sense of ill will but merely purposeful interference without justification."
Some Pennsylvania decisions, particularly Caskie v. Philadelphia R. T. Co., 334 Pa. 33, 5 A.2d 368, seems to require more than this objective test and to take into consideration the defendant's motives, but subsequent decisions make it clear that what was meant by "malice" was never more than the intentional doing of a wrongful act without legal or social justification. "`"When one has knowledge of the contract rights of another, his wrongful inducement of a breach thereof is a willful destruction of the property of another and cannot be justified on the theory that it enhances and advances the business interests of the wrongdoer." * * * Maliciousness "does not necessarily mean actual malice or ill will, but the intentional doing of a wrongful act without legal or social justification."'" Ramondo v. Pure Oil Co., 159 Pa.Super. 217, 48 A.2d 156, 160. See also Eddyside Co. v. Seibel, 142 Pa.Super. 174, 181, 15 A.2d 691.
The defendant had the benefit of legal advice, but there is nothing to show what that advice was and, with the law in the uncertain state in which it was, I can hardly imagine his able and experienced counsel telling him that he could proceed with assurance that his legal position was sound and unassailable. What is plain is that he was so determined to obtain the property in question that he was perfectly willing to ignore any and all risks involved.
To the plaintiff he said: "Frank, you are stepping on dangerous ground; I am going to have the theatre if it is the last thing I do. You know I have a suit with Warner Brothers * * *. You must make a deal with me. You are dealing with a dangerous man." And to Friedmann, the agent, he said, "Well, you know me for a long time, and you know that I will stop at nothing to get that property now. I want that lease and I am going to get it, no matter what happens. * * * You know I can do anything. I have plenty of money and I will stop at nothing to get that lease. * * *"
In all this there was no ill will toward the plaintiff. At one time he said to the plaintiff: "Frank, I haven't got a thing against you. You are a square shooter. * * * I am out here to make a deal." Ill will, however, is not a necessary element. The defendant's utterances clearly indicate a complete disregard of the plaintiff's rights so far as they might stand in the way of his getting the property. It seems clear that if the Pennsylvania decisions do require anything beyond the intentional doing of a wrongful act without legal justification a doubtful matter that something is supplied by the defendant's attitude as evinced by his own statements.
The following additional fact finding is made in connection with the decree.
The defendant with knowledge of the contract rights of the plaintiff maliciously and without reasonable justification or excuse intentionally and knowingly induced the trustees to breach the contract to the plaintiff's damage.
The following additional conclusion of laws is made:
The plaintiff is entitled to recover damages consisting of expenses of litigation and reasonable counsel fee incurred in connection with the recovery of the property which is the subject of this litigation.
Two matters remain to be mentioned in order to make the ruling clear, (1) the counsel fee and expenses are not allowed as costs of the case but as damages, (2) no counsel fee or expenses can be allowed for that part of the litigation which concerns the recovery of damages. Only that part of the plaintiff's counsel fee and expenses will be included which is properly allocable to his action for equitable relief. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265769/ | 240 P.3d 1217 (2010)
Matthew J.P. MILLETTE, Appellant,
v.
Carol Jean MILLETTE, Appellee.
No. S-13315.
Supreme Court of Alaska.
October 8, 2010.
*1218 Matthew J.P. Millette, pro se, Anchorage, Appellant.
No appearance by Appellee.
Before: CARPENETI, Chief Justice, FABE, and WINFREE, Justices.
OPINION
CARPENETI, Chief Justice.
I. INTRODUCTION
A father appeals a child support judgment from the superior court. The $1,178.75 judgment against him consisted primarily of medical bills incurred on behalf of his child. The medical bills were for natural health care that the child received, and that the mother paid for, in order to treat the child's autism. The father contests the judgment because it included amounts for nutritional supplements and associated shipping and handling charges, which he claims are not health care expenses as a matter of law. Further, the father asserts that the superior court abused its discretion by ordering him to pay the bills, some of which he claims to have already paid, and some of which were incurred before his child support order became effective. Finding no error in the superior court's order, we affirm the judgment in all respects.
II. FACTS AND PROCEEDINGS
A. Past Litigation And Child Custody Arrangements
We first addressed the separation of Carol Jean Millette and Matthew Millette in January 2008.[1] The relevant history of their relationship is excerpted here from that opinion:
Carol Jean Millette and Matthew Millette were married for almost five years before becoming enmeshed in a protracted and contentious divorce and custody dispute. The couple met online in 1997 through the Christian Connection, an internet dating service. At that time, Carol Jean was living in Colorado and Matthew was living in Alaska, married with two young sons. . . . In April 1998 Carol Jean moved to Alaska to be with Matthew and lived in an apartment across from his. Matthew divorced his first wife in August 1998 and married Carol Jean a month later. . . . The relationship became rocky after they moved in together. . . .
[John][2] was born July 21, 2000. As John grew out of his infancy and became a toddler Carol Jean began to notice [early signs of autism]. In December 2002, when John was almost two and a half years old, he was formally diagnosed with autism. John has since been seen by many doctors and specialists including . . . Dr. Grove, a naturopathic doctor who works with "Defeat Autism Now" and who advises Carol Jean on John's diet. . . .
In June 2003 Carol Jean and Matthew separated. Both Matthew and Carol Jean have since reported misconduct by the other *1219 parent to the police and the Office of Children's Services (OCS).
Through a domestic violence protective order Matthew obtained custody of John for the first several months following the parties' separation. In February 2004, following the expiration of that order, Carol Jean and Matthew agreed to share custody on a week-on/week-off basis. In July 2004 the court-ordered child custody investigation report recommended that Carol Jean have sole legal and primary physical custody. . . . In August 2004 the superior court modified interim custody, giving Carol Jean sole legal and physical custody of John. . . .
[The superior court] entered the divorce decree on October 29, 2004.[3]
After a separate custody trial, the court awarded Carol Jean sole legal and primary physical custody of John.[4] Matthew was given visitation rights so long as he enrolled in anger management classes.[5] Additionally, the superior court issued a child support order. That order requires each parent to pay half of John's "reasonable health care expenses" up to $5,000 not covered by insurance. The order states that health care expenses "includ[e] medical, dental, vision and mental health counseling expenses." The order cites Alaska Rule of Civil Procedure 90.3, which addresses health care expenses in an almost identical manner.[6]
B. Expenses Incurred
Before and after the court issued the child support order in October 2005, Carol Jean incurred and paid health care expenses on behalf of John. From March to August 2005, John was treated at Natural Health Center LLC. After the order, from October 2005 to September 2006, John was treated at the Center for Autism Research and Education, LLC (CARE). The bills from these clinics include charges for nutritional supplements and their shipping and handling, in addition to charges for appointments. The bills from Natural Health Center totaled $698.75, including $340 for appointments, $317.75 for supplements, and $41 for shipping. The bills from CARE totaled $1,246.23, including $800 for appointments, $437.48 for supplements, and $8.75 for shipping.
C. Proceedings
In August 2008 Carol Jean filed a motion in the superior court seeking reimbursement from Matthew for half of the above expenses. The superior court ordered Matthew to pay half of the expenses ($972.50) and $206.25 in attorney's fees. Matthew moved for reconsideration and the superior court denied the motion.
Matthew appeals the judgment against him, which totaled $1,178.75.
III. STANDARD OF REVIEW
We apply de novo review to child support issues involving a question of law such as interpreting a civil rule,[7] interpreting the terms of a child support order,[8] and determining the correct method for calculating child support.[9]
Where no question of law is involved, superior courts have broad discretion in making child support determinations, and we review the superior court's decision for an abuse of discretion.[10] "An abuse of discretion occurs only if based on the record as a whole this court is left with a definite and firm conviction that a mistake has been made."[11]
*1220 IV. DISCUSSION
We address, in turn, the four points Matthew raised on appeal.
A. The Superior Court Did Not Err In Concluding That Nutritional Supplements Are A Reasonable Health Care Expense.
Matthew claims the superior court erred when it ordered him to pay for nutritional supplements, or "vitamins," for his autistic child. Matthew asserts that supplements are a component of the child's nutrition, should be covered by the monthly child support Matthew pays, and should not require a special judgment for health care expenses. Matthew also makes assertions that arguably go to "reasonableness." He asserts that Carol Jean could have purchased less expensive supplements and that supplements are frequently recommended by one's doctor, but are optional.
Because we conclude that the nutritional supplements in the present case were both a health care expense and reasonable, we affirm the superior court's order requiring Matthew to pay half.
1. Nutritional supplements may be considered a health care expense.
According to the child support order, Matthew and Carol Jean must each pay half of the child's "reasonable health care expenses not covered by insurance."[12] The child support order states health care expenses "includ[e] medical, dental, vision and mental health counseling expenses." Further, the child support order cites to Civil Rule 90.3, which defines health care expenses almost identically.[13] Because "health care expenses" is not a technical term, we interpret it "according to the rules of grammar and according to [its] common and approved usage."[14] We have endorsed a "broad, inclusive" view of what constitutes health-related expenses for purposes of child support.[15]
Because the child support order and Rule 90.3 both clarify "health care expenses" using an enumerated listmedical, dental, vision, and mental health counselingthere is a preliminary question of whether that list is exclusive. It is not. We interpret enumerated lists beginning with "including" or "includes" to be non-exclusive, as if the word were "followed by the phrase `but not limited to.'"[16] Our case law has extended the same logic to "include" and "included."[17] Thus, because the child support order's list begins with "including" and 90.3's list begins with "include,"[18] these lists are illustrative, not exclusive. Accordingly, we address whether nutritional supplements are a health care expense, and do not attempt to determine whether supplements are medical, dental, vision, or mental health counseling expenses.
*1221 As noted above, we have interpreted health care expenses broadly in the child support context.[19] In Cedergreen v. Cedergreen,[20] before Rule 90.3 addressed health care expenses,[21] we upheld a superior court's "broad, inclusive" interpretation of the contract term "medical and dental expenses."[22] We ultimately concluded that counseling, travel expenses, contact lenses, and braces were all medical and dental expenses.[23] However, we have never addressed the precise question of whether nutritional supplements qualify as health care expenses for the purposes of child support.
To the extent cases from other jurisdictions are relevant, they suggest that supplements may be a health care expense if they are subject to professional oversight or if they produce demonstrated health benefits. Addressing a workers' compensation claim, a Florida appellate court concluded that nutritional supplements were a reimbursable medical expense when they were taken on the advice of a doctor and noticeably beneficial, despite the health care plan's exclusion of "vitamins."[24] In a bankruptcy case from Vermont, the federal court granted an allowance for vitamins where the debtor testified they had "been a sound, prophylactic measure for maintaining the Debtor's health."[25] A Mississippi court calculating the custodial parent's expenses in order to determine child support made a line item calculation for "medical, dental, drugs, and vitamins."[26] And in a divorce decree a Connecticut court took notice of a wife's preference for "vitamins and supplements rather than prescribed medication" when awarding child support and alimonyalthough the degree to which the preference influenced the award is not stated.[27]
Similarly, this case involves supplements purchased directly from the clinics treating the autistic child and the charges appear on invoices from the clinics. Some of the invoices for supplements also include charges for appointments. The invoices show the child as a patient. Those invoices from Natural Health Center list a naturopathic doctor, Adam Grove. The invoices, although not listing a doctor, include charges for appointments in addition to supplements. Carol Jean's affidavit states that the charges on the invoices were "medically necessary . . . as a result of [the child's] [a]utism." Accordingly, the present case contains many of the factors relied on by other courts to conclude that the cost of supplements is a health care expense.
Consistent with our broad interpretation of health expenses for child support,[28] and other courts' inclusion of nutritional supplements in health care expenses, it was not erroneous for the superior court to consider nutritional supplements to be a health care expense, particularly when the supplements are recommended by, and purchased from, a health care practice.
Matthew's argument that paying for supplements is part of the custodial parent's responsibility for nutrition, and so should be paid for from regular child support payments, is unpersuasive. There is no indication that these supplements are needed because the child is not being fed properly. Rather, the evidence shows that the supplements were used to treat a medical problem. The bills in question show the expenses were incurred at clinics and include items such as *1222 evening primrose oil, zinc citrate, and methyl B12. In other words, the charges do not appear to be for routine, daily multi-vitamins, as one might purchase at the grocery store to supplement nutrition.
Matthew's other points about diet and nutrition are similarly unpersuasive. First, he defines "supplement" as "something that completes or makes an addition." He is correct that nutritional supplements generally enhance nutrition, but that does not show that they are part of a normal diet that Carol Jean should be providing. Second, even if regular child support is meant to cover everyday nutrition and dietary needs, Matthew does not show that regular support is also meant to cover special diets, or that special diets are not medical expenses. Third, he seems to mistake the diet his child eats with the nutritional supplements his child takes. He points out that a medical study found no difference in autistic children who avoided gluten and casein, and those who did not. That evidence might be relevant were the mother billing the father for grocery items such as gluten-free bread, but here there has been no dispute over such food expenses nor any claims that the child's special diet necessitates supplements.[29] Indeed, Matthew states that there is no evidence that the "nutritional supplements (vitamins) [are needed] because of this diet."
2. The nutritional supplements were reasonable.
Matthew's argument focuses on whether nutritional supplements are health care expenses or nutritional expenses, and he does not state that if the expenses are health care expenses, they are unreasonable. However, he makes three additional assertions that we believe go to reasonableness. Because health care expenses must be reasonable according to the child support order and Rule 90.3,[30] we address these assertions.
First, we are not troubled by the fact that the supplements were recommended but not required. There is no requirement that health care expenses be prescribed or required by a doctor in order to be reimbursable. It is sufficient that nutritional supplements were professionally recommended for the child's autism.
Second, Matthew's argument that Carol Jean did not buy the most affordable supplements on the market is likewise unpersuasive. As the superior court noted, because Carol Jean pays half of the health care expenses and lives on a limited budget, there are appropriate incentives for her to spend wisely. Further, that items are available less expensively online does not undercut the reasonableness of purchasing items directly from a clinic. Concerns such as convenience, quality, and expediency are relevant. Matthew has not demonstrated per se unreasonableness by showing that items are available more cheaply online, particularly without any discussion of whether the items are comparable in quality or potency.
Finally, Matthew asserts that the superior court's decision was based on its own beliefs, and not representative of the medical evidence presented. Matthew points to a medical study showing that special diets for autistic children are ineffective. But, as noted above, a special diet is not the same as supplements, so it is not clear that this evidence is relevant to Matthew's appeal of nutritional supplement charges. Because the nutritional supplements were professionally recommended, and because there is no expert testimony suggesting that the health care providers have followed an unreasonable course of treatment for the child in this case, the superior court did not err in declining to "second-guess the healthcare decisions made by Ms. Millette."
In conclusion, we affirm the superior court's decision, and hold that nutritional supplements may constitute a reasonable health care expense under the parties' child support order and Civil Rule 90.3(d)(2), particularly where the supplements are taken *1223 for a specific medical condition, at the recommendation of a health care provider, and purchased through a clinic.
B. The Superior Court Did Not Err In Including Shipping And Handling Costs In Health Care Expenses.
Matthew's second point on appeal contests the superior court's treatment of shipping and handling costs (totaling less than $50) as health care expenses. Matthew cites no authority to support his claim, and we do not find the claim to be compelling.
Each parent must pay half of the child's health care expenses not covered by insurance.[31] The interpretation of "health care expense" is detailed above in section IV.A. In light of our generally broad interpretation of child support expenses,[32] we conclude that these shipping and handling charges are likewise appropriately considered health care expenses. The shipping costs represent a small share of the total bills, about 2.5%. Moreover, shipping costs are not particularly troublesome: Presumably, when one buys from a pharmacy, the shipping is inherently a part of the listed price. It would be odd to allow stores to include shipping in their price in this manner, but to disallow it when detailed as a separate charge, as was done here. And, looking forward, online pharmacies are becoming more common, and it is therefore foreseeable that itemized shipping and handling will become more common as a part of pharmaceutical expenses than in the past.[33]
In conclusion, having determined that the nutritional supplements are a reasonable health care expense, we hold that their shipping and handling is a reasonable health care expense.
C. The Superior Court Did Not Abuse Its Discretion In Ordering Matthew To Reimburse Carol Jean $400 For Health Care Expenses Although He Had Already Paid That Amount To The Clinic.
Matthew claims that the superior court abused its discretion when it ordered him to reimburse Carol Jean $400 for the cost of the child's health care at CARE,[34] because he already paid that amount directly to CARE.
We review child support orders for an abuse of discretion, reversing only "if based on the record as a whole this court is left with a definite and firm conviction that a mistake has been made."[35] We discern no such abuse of discretion.
Matthew and Carol Jean's child support order requires reimbursement to the parent who paid the health care expenses:
A party shall reimburse the other party for his or her share of the uncovered expenses within 30 days after receiving the health care bill, proof of payment and, if applicable, a health insurance statement showing what part of the cost is uncovered. The bill and other materials should be sent within a reasonable time.
The child support order makes no provision for directly paying the health care provider.[36] Thus, to the extent Matthew asserts that he is required to reimburse only the care provider, and not Carol Jean, he violates the express terms of the court-ordered child support, *1224 which requires him to reimburse the parent who paid.
Indeed, Matthew's payment to CARE could not even compensate Carol Jean for the money she had already expended, as it came after Carol Jean paid the bills in full. And Carol Jean's payment could not be refunded, because, according to a letter from CARE, Matthew insisted that his payment was for future services, and should not be applied to past treatment. This leaves Carol Jean without reimbursement for the treatment at CARE before October 2006, for which she paid in full.
Finally, because the child is no longer treated at CARE, Matthew's $400 payment to that entity is of no value to Carol Jean.
Accordingly, the superior court did not abuse its discretion in ordering Matthew to reimburse Carol Jean for one half of her payments to CARE, despite Matthew's $400 payment to the clinic for future treatment.
D. The Superior Court Did Not Abuse Its Discretion In Ordering Matthew To Pay Old Health Care Bills Incurred Before The Child Support Order Went Into Effect.
Matthew claims that he should not be responsible for certain bills because they were incurred before the child support order went into effect, and because the bills were not timely presented to Matthew.
Because the guidelines of Rule 90.3 govern the apportioning of health care expenses when no child support order is in effect, and because the superior court's apportioning of expenses was within those guidelines, we conclude that the court did not abuse its discretion. Further, given the circumstances of this case, any alleged delay in presenting the bills to Matthew was not unreasonable.
1. It was not an abuse of discretion to apportion bills incurred before the child support order went into effect.
Matthew's main contention is that it was improper for the superior court to order him to pay half of the medical bills from Natural Health Center because those bills were incurred before the child support order went into effect. The bills from Natural Health Center were incurred between March and August 2005. Child support was ordered on October 4, 2005.
Although a child support order may not apply retroactively to old bills,[37] a court may still consider and apportion those old health care bills.[38] In that case, the court apportions old bills according to the standards of Rule 90.3, not the child support order.[39]
Here, since the child support order was not yet in effect when the five bills from Natural Health Center were incurred, Rule 90.3 governs the division of those bills. Rule 90.3, like the Millettes' child support order in this case, requires each parent to pay half of the child's reasonable health care expenses.[40] Accordingly, the superior court's judgment requiring Matthew to pay half was consistent with both Rule 90.3 guidelines and the child support order, and not an abuse of discretion.
2. Although the bills may not have been presented to Matthew immediately, the superior court did not abuse its discretion in ordering Matthew to pay half.
Matthew asserts that he had not received the bills from Natural Health Center until *1225 Carol Jean filed the motion in superior court, over three years after the bills were incurred.
As discussed above, Rule 90.3 governs the division of the bills from Natural Health Center. Unlike the Millettes' child support order, that rule does not contain an express timeliness provision regarding medical bills.
In the present case, faced with conflicting testimony regarding when the bills were presented, and a record of ineffective communication between the parties, the superior court ordered Matthew to pay half of the bills, regardless of when the bills were presented to him. This is reasonable and fair since the bills were undisputably incurred, and we are not left with a definite and firm conviction that a mistake has been made.[41] Accordingly, we conclude that the superior court did not abuse its discretion.
V. CONCLUSION
Because nutritional supplements can be a reasonable health care expenseparticularly when purchased from, and recommended by, a clinic treating a medical problemwe affirm the superior court's inclusion of supplements, and their shipping and handling, in the judgment. Because the father's payment of certain health care expenses to the clinic came after the mother had already paid, and because he did not reimburse her, we affirm the superior court's judgment against the father for those expenses. Finally, because the father owes half of the child's health care expenses under the guidelines set out by Rule 90.3, we conclude that it was not an abuse of discretion for the superior court to order the father to pay half of the bills incurred before the child support order became effective. Accordingly, we AFFIRM the superior court's judgment in all respects.
EASTAUGH and CHRISTEN, Justices, not participating.
NOTES
[1] Millette v. Millette, 177 P.3d 258 (Alaska 2008).
[2] We use a pseudonym for the child.
[3] Id. at 260-61.
[4] Id. at 261.
[5] Id.
[6] See Alaska R. Civ. P. 90.3(d)(2), (f)(5).
[7] J.L.P. v. V.L.A., 30 P.3d 590, 594 (Alaska 2001).
[8] Rosen v. Rosen, 167 P.3d 692, 695 (Alaska 2007) (citing Flannery v. Flannery, 950 P.2d 126, 129 (Alaska 1997)).
[9] Millette v. Millette, 177 P.3d 258, 261 (Alaska 2008).
[10] Rosen, 167 P.3d at 695.
[11] Id. (internal quotation marks omitted).
[12] The relevant portion of the order states:
Uncovered Health Care Expenses (including medical, dental, vision and mental health counseling expenses). Civil Rule 90.3(d)(2) and (f)(5).
The cost of the child(ren)'s reasonable health care expenses not covered by insurance must be paid as follows, unless the expenses exceed $5,000 in a calendar year:
[x] Obligor will pay half and obligee will pay half.
[13] The relevant portions of Civil Rule 90.3 provide:
(d)(2): Uncovered Health Care Expenses. The court shall allocate equally between the parties the cost of reasonable health care expenses not covered by insurance unless the court orders otherwise for good cause.
. . . .
(f)(5): Health Care Expenses. Health care expenses include medical, dental, vision, and mental health counseling expenses.
(Emphasis in original).
[14] AS 01.10.040(a); see also Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 904 (Alaska 1987).
[15] Cedergreen v. Cedergreen, 811 P.2d 784, 787-89 (Alaska 1991).
[16] AS 01.10.040(b). "When the words `includes' or `including' are used in a law, they shall be construed as though followed by the phrase `but not limited to.'" Id.
[17] Thoeni v. Consumer Elec. Servs., 151 P.3d 1249, 1258 n. 41 (Alaska 2007) (citing treatise on statutory interpretation and prior cases to demonstrate that lists beginning with "include," "includes," or "included" are non-exclusive).
[18] Alaska R. Civ. P. 90.3(f)(5).
[19] Cedergreen, 811 P.2d at 787-89.
[20] 811 P.2d 784.
[21] The provisions relevant to this case are 90.3(d)(2) and (f)(5), which were added as 90.3(d)(2) and (f)(4) in 1995. See Alaska Supreme Court Order No. 1192 (March 10, 1995) (effective July 15, 1995).
[22] Cedergreen, 811 P.2d at 787.
[23] Id.
[24] Tiznado v. Orlando Reg'l Healthcare Sys., 773 So. 2d 584, 586 (Fla.App.2000). The case turned on whether the supplements were "medically necessary," as the term is used in the Florida workers' compensation statute. Id.
[25] In re Edwards, No. 03-10018, 2004 WL 316418, at *8 (Bkrtcy.D.Vt.2004).
[26] Creekmore v. Creekmore, 651 So. 2d 513, 519 (Miss. 1995).
[27] Haracsy v. Haracsy, No. FA064005934, 2008 WL 642633, at *2 (Conn.Super.Feb. 19, 2008).
[28] See Cedergreen v. Cedergreen, 811 P.2d 784, 787-89 (Alaska 1991).
[29] Carol Jean stated, in an affidavit filed with the superior court, that supplements and a special diet are required due to the child's medical condition, but does not attribute the need for supplements to the diet.
[30] Alaska R. Civ. P. 90.3(d)(2).
[31] Alaska R. Civ. P. 90.3(d)(2), (f)(5).
[32] See, e.g., Cedergreen, 811 P.2d at 787-88 (approving expenses such as airfare, car rental, and hotels).
[33] Indeed, the online drug source Matthew recommends Carol Jean use, because it is cheaper, is a mail order source that also charges shipping. See Puritan's Pride, Help Center Shipping Policy, http://www.puritan.com/house/helpcenter. asp# ship (last visited September 10, 2010).
[34] The full amount of CARE bills was $1,246.23. Matthew claims that $446.50 of that sum was for supplements, and therefore appears to be reimbursing his half of the remaining amount, roughly $800.
[35] Rosen v. Rosen, 167 P.3d 692, 695 (Alaska 2007) (internal citation omitted).
[36] Similarly, Rule 90.3(d)(2) requires reimbursement to the party who paid. The comment to that rule allows prepayment to the provider when required by the providerbut never considers post-payment to the provider, let alone when the other party has already paid the bill. See Alaska R. Civ. P. 90.3 Commentary VII.B.
[37] Millette v. Millette, 177 P.3d 258, 266 (Alaska 2008).
[38] See Vachon v. Pugliese, 931 P.2d 371, 381-82 (Alaska 1996) (holding that while Rule 90.3 does not expressly apply to payments made before order is in place, court may apply Rule 90.3's methodology).
[39] Id. This treatment does not violate Rule 90.3(h)(2), prohibiting retroactive modification, because no order was yet in effect, so there was nothing to modify. Id.
[40] Compare Rule 90.3(d)(2) ("The court shall allocate equally between the parties the cost of reasonable health care expenses not covered by insurance unless the court orders otherwise for good cause.") with the Millettes' child support order ("The cost of the child(ren)'s reasonable health care expenses not covered by insurance must be paid as follows . . . [x] Obligor will pay half and obligee will pay half.").
[41] See Rosen v. Rosen, 167 P.3d 692, 695 (Alaska 2007). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265778/ | 163 Cal. App. 4th 139 (2008)
COUNTY OF CONTRA COSTA, Plaintiff and Respondent,
v.
PUBLIC EMPLOYEES UNION LOCAL ONE, Defendant and Appellant;
PUBLIC EMPLOYMENT RELATIONS BOARD, Intervener and Appellant.
COUNTY OF CONTRA COSTA, Plaintiff and Respondent,
v.
CALIFORNIA NURSES ASSOCIATION, Defendant;
PUBLIC EMPLOYMENT RELATIONS BOARD, Intervener and Appellant.
No. A115095. No. A115118.
Court of Appeals of California, First District, Division One.
May 22, 2008.
*142 Leonard Carder, Arthur Krantz and Margot A. Rosenberg, for Defendant and Appellant.
Tami Bogert, Robin Wesley, Tammy Samsel and Harry J. Gibbons, for Intervener and Appellant.
Altshuler Berzon, Jonathan Weissglass and Linda Lye, for California State Council of Service Employees as Amicus Curiae on behalf of Defendant and Appellant and for Intervener and Appellant.
Silvano B. Marchesi, County Counsel, Cynthia A. Schwerin, Kevin T. Kerr and Kelly M. Flanagan, Deputy County Counsel for Plaintiff and Respondent.
Jennifer B. Henning for California State Association of Counties and League of California Cities as Amici Curiae on behalf of Plaintiff and Respondent.
*143 OPINION
SWAGER, J.
Appellants Public Employees Union Local One (Local One) and the Public Employment Relations Board (PERB) (collectively referred to as appellants) appeal an order of the trial court that concluded the PERB does not have exclusive initial jurisdiction over whether certain essential employees may be prevented from participating in a strike. Local One also contends that the court erred in failing to comply with the evidentiary hearing procedures found within Labor Code section 1138 et seq., before issuing its temporary restraining order. We affirm.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The essential facts underlying this case are not in dispute. On June 23, 2006, respondent the County of Contra Costa (County) filed a complaint against several public employee unions, seeking to enjoin certain essential employees from participating in a one-day strike.[1] The unions represented approximately 5,800 employees. The County sought the order on the basis that the participation of approximately 270 employees in the strike would create a substantial and imminent threat to public health and safety. The County also sought to enjoin all the members of a nurses' union from engaging in a sympathy strike.[2]
That same day, the trial court issued a temporary restraining order (TRO) enjoining approximately 160 employees from striking, including airport operations specialists, animal services workers at the County's animal shelters, probation counselors, and various County hospital workers. The court also issued a TRO forbidding the nurses from engaging in a sympathy strike, finding that they were also essential public employees. The court did not hold an evidentiary hearing before issuing the TRO's.
The PERB is the state agency charged with resolving disputes and enforcing statutes that pertain to several categories of public employees, such as the Educational Employment Relations Act (EERA) (see Gov. Code, § 3541.3), the State Employer-Employee Relations Act (see Gov. Code, § 3513, *144 subd. (g)), and, as of 2001, the Meyers-Milias-Brown Act (MMBA; Gov. Code, § 3500 et seq.), which applies to local government agencies and their employees (see Gov. Code, § 3509).
On June 23, 2006, the PERB intervened in the trial court, arguing that it has exclusive jurisdiction over the issue before the court, since the unions' proposed strike "is arguably protected or prohibited by the MMBA." Over Local One's objections, the court found that Labor Code section 1138 et seq., did not apply to the proceedings.
On June 30, 2006, the court held a hearing and determined that the MMBA did not apply to the County's complaint, ruling that the PERB did not have exclusive jurisdiction. These consolidated appeals followed.
DISCUSSION
Appellants do not challenge the merits of the orders insofar as they hold that the identified employees are "essential" to maintaining public health and safety. They do, however, challenge the trial court's finding that the PERB did not have exclusive initial jurisdiction over this matter. Local One also challenges the proceedings leading to the issuance of the TRO's, arguing that the orders are invalid because the court failed to comply with Labor Code section 1138 et seq.[3]
I. Standard of Review
Where the propriety of an order granting a temporary restraining order or a preliminary injunction "`depends upon a question of law . . . the standard of review is not abuse of discretion but whether the superior court correctly interpreted and applied [the] law, which we review de novo.' [Citation.]" (Vo v. City of Garden Grove (2004) 115 Cal. App. 4th 425, 433 [9 Cal. Rptr. 3d 257].) The issues here concern whether the court correctly interpreted relevant statutes in light of applicable case law. We will therefore review the court's order independently.[4]
*145 II. Historic Background and Statutory Framework
A. PERB
We begin by reviewing the history of the PERB that is concisely set forth in Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal. 4th 1072 [29 Cal. Rptr. 3d 234, 112 P.3d 623] (Coachella Valley). "The history of the PERB begins in 1975, when the Legislature adopted the Educational Employment Relations Act (Gov. Code, §§ 3540-3549.3; . . .), which governs employer-employee relations for public schools (kindergarten through high school) and community colleges. [Citation.] As part of this new statutory scheme, the Legislature created the Educational Employment Relations Board (EERB), `an expert, quasi-judicial administrative agency modeled after the National Labor Relations Board, to enforce the act.' [Citation.] The Legislature vested the EERB with authority to adjudicate unfair labor practice charges under the EERA." (Id. at pp. 1084-1085.)
"Two years later, in 1977, the Legislature enacted the State Employer-Employee Relations Act [citation] to govern relations between the state government and certain of its employees. [Citation.] It was later renamed, and its official name is now the Ralph C. Dills Act (hereafter the Dills Act). [Citation.] Despite the declaration of purpose two years earlier in the EERA, the Legislature did not incorporate the Dills Act into the EERA, instead enacting it as a separate chapter in the Government Code preceding the EERA. The Legislature did, however, expand the jurisdiction of the EERB to include adjudication of unfair practice charges under the Dills Act, and as a result the EERB was renamed the PERB. [Citations.]
"Since 1977, the PERB's jurisdiction has continued to expand as the Legislature has enacted new employment relations laws covering additional categories of public agencies and their employees. In 1978, the Legislature enacted the Higher Education Employer-Employee Relations Act [citation] to govern labor relations within the University of California, the California State University, and Hastings College of the Law. [Citation.] In 2000, the Legislature not only brought the MMBA within the PERB's jurisdiction [citation], it also enacted the Trial Court Employment Protection and Governance Act [citation] to govern labor relations and other employment matters within the state's trial courts. [Citation.] In 2002, the Legislature enacted the Trial Court Interpreter Employment and Labor Relations Act [citation] to govern labor relations and employment matters for trial court interpreters. [Citation.] In 2003, the Legislature enacted the Los Angeles County Metropolitan Transit *146 Authority Transit Employer-Employee Relations Act [citation] to govern labor relations for a public transit district." (Coachella Valley, supra, 35 Cal. 4th 1072, 1085-1086.)
B. The MMBA
(1) The County and the employee organizations involved here are subject to the MMBA. "The MMBA imposes on local public entities a duty to meet and confer in good faith with representatives of recognized employee organizations, in order to reach binding agreements governing wages, hours, and working conditions of the agencies' employees. [Citation.] `The duty to bargain requires the public agency to refrain from making unilateral changes in employees' wages and working conditions until the employer and employee association have bargained to impasse . . . .' [Citation.]" (Coachella Valley, supra, 35 Cal. 4th 1072, 1083.)
"The [MMBA] governs collective bargaining and employer-employee relations for most California local public entities, including cities, counties, and special districts. Before July 1, 2001, an employee association claiming a violation of the MMBA could bring an action in superior court. [Citation.] Effective July 1, 2001, however, the Legislature vested the California Public Employment Relations Board (PERB) with exclusive jurisdiction over alleged violations of the MMBA." (Coachella Valley, supra, 35 Cal. 4th 1072, 1077.)
Government Code section 3509, subdivision (b),[5] provides: "A complaint alleging any violation of this chapter . . . shall be processed as an unfair practice charge by the board. The initial determination as to whether the charge of unfair practice is justified and, if so, the appropriate remedy necessary to effectuate the purposes of this chapter, shall be a matter within the exclusive jurisdiction of the board. The board shall apply and interpret unfair labor practices consistent with existing judicial interpretations of this chapter." (Italics added.) The PERB also has the authority to petition the trial courts "for appropriate temporary relief or restraining order" after "issuance of a complaint charging that any person has engaged in or is engaging in an unfair practice." (§ 3541.3, subd. (j); see also § 3509, subd. (a).)[6]
*147 (2) According to the PERB's regulations, employee organizations commit an unfair practice under the MMBA if they do any of the following: (1) cause or attempt to cause a public agency to engage in conduct prohibited by the MMBA, (2) interfere with, intimidate, restrain, coerce or discriminate against public employees because of their exercise of the right to join or abstain from joining labor organizations, (3) refuse or fail to meet and confer in good faith, (4) fail to exercise good faith while participating in any impasse procedure, or (5) in any other way violate the MMBA. (Cal. Code Regs., tit. 8, § 32604.)
III. Did the Trial Court Have Jurisdiction to Issue the Injunction?
Local One and the PERB argue that the PERB has exclusive initial jurisdiction over whether a public employee strike is unlawful. The County claims, and the trial court agreed, that the PERB did not have jurisdiction over the subject matter of its complaint because the County did not allege any unfair practice under the MMBA. On appeal, the County maintains it is not required to go to the PERB before resorting to the courts to obtain orders protecting the public from imminent threats to health and safety.
A. County Sanitation Dist. No. 2 v. Los Angeles County Employees' Assn. (1985) 38 Cal. 3d 564
(3) We begin our analysis with the seminal case on the public health and safety exception to the right to strike. In County Sanitation, the Supreme Court held for the first time that public employees have the right to strike: "[W]e conclude that the common law prohibition against public sector strikes should not be recognized in this state. Consequently, strikes by public sector employees in this state as such are neither illegal nor tortious under California common law." (County Sanitation Dist. No. 2 v. Los Angeles County Employees' Assn. (1985) 38 Cal. 3d 564, 585 [214 Cal. Rptr. 424, 699 P.2d 835] (County Sanitation).)
Concurrently, the court gave public entities the right to go to court to request an injunction based on a showing that the strike would have a detrimental impact on public health and safety: "After consideration of the various alternatives before us, we believe the following standard may properly guide courts in the resolution of future disputes in this area: strikes by public employees are not unlawful at common law unless or until it is clearly demonstrated that such a strike creates a substantial and imminent threat to the health or safety of the public. This standard allows exceptions in certain essential areas of public employment (e.g., the prohibition against firefighters and law enforcement personnel) and also requires the courts to determine on *148 a case-by-case basis whether the public interest overrides the basic right to strike." (County Sanitation, supra, 38 Cal. 3d 564, 586, italics added.)
Thus, County Sanitation stands for the proposition that public employee strikes are not unlawful at common law to the extent that they can be conducted without causing a substantial threat to public health or safety. It also authorizes public agencies to turn to the courts to prevent such threats. And, contrary to the PERB's position on appeal, while the parties in County Sanitation were covered by the MMBA, the court's decision did not turn on that act. Instead, the court based its ruling on common law, noting that the Legislature had "intentionally avoided the inclusion of any provision [in the MMBA] which could be construed as either a blanket grant or prohibition of a right to strike, thus leaving the issue shrouded in ambiguity." (County Sanitation, supra, 38 Cal. 3d 564, 573.)
Local One acknowledges that courts historically have had jurisdiction over all matters pertaining to the MMBA, but observes that this changed in 2001, when the PERB obtained jurisdiction over the MMBA under section 3509, subdivision (a). It contends that County Sanitation no longer applies because it predates this legislative change. The PERB also argues that County Sanitation does not control because, at the time it was decided, the PERB did not have jurisdiction over the MMBA.
Local One also claims that the trial court erred in relying on the fact that the County did not allege any unfair labor practice or other violation of the MMBA. It claims that courts discussing the EERA have "uniformly held that strike activity is both `arguably prohibited' and `arguably protected'" by the EERA. Amicus curiae California State Council of Service Employees argues that "Whether or not the County contends the strike violates the common law, rather than the MMBA, is immaterial."
B. Cases Construing the PERB's Authority Under the EERA
Local One claims that the California Supreme Court and the Courts of Appeal have consistently held that the PERB has exclusive jurisdiction with respect to the EERA over all injunction actions and other legal disputes involving strikes. It relies on four cases decided under the EERA for the proposition that the PERB now also has exclusive initial jurisdiction under the MMBA over all strike issues, including whether a threatened strike poses a danger to public health and safety. We are not convinced that the PERB's jurisdiction extends to matters falling outside the statutes it administers.
*149 In San Diego Teachers Assn. v. Superior Court (1979) 24 Cal. 3d 1 [154 Cal. Rptr. 893, 593 P.2d 838] (San Diego Teachers), a trial court had issued contempt orders against a teachers' union and some of its members after they failed to abide by an injunction forbidding an allegedly unlawful strike. (Id. at p. 4.) Significantly, when the injunction was issued, both the teachers' association and the district had already filed unfair practice charges against each other with the PERB. (Id. at p. 3.)
The Supreme Court annulled the contempt orders, holding that the PERB had exclusive initial jurisdiction to determine whether the strike was an unfair practice and what, if any, remedies should be pursued. (San Diego Teachers, supra, 24 Cal. 3d 1, 14.) In articulating its reasoning, the court observed that the PERB was uniquely situated to evaluate the circumstances of the strike, concluding that "A court enjoining a strike on the basis of (1) a rule that public employee strikes are illegal, and (2) harm resulting from the withholding of teachers' services cannot with expertise tailor its remedy to implement the broader objectives entrusted to PERB." (Id. at p. 13.) The court also disagreed with the school district's assertion that the PERB would be unable to fully address the public's interests when fashioning its own remedy for the alleged violations. (Id. at p. 11.)
While the court's reasoning is broadly worded, we believe San Diego Teachers must be read in context. In particular, we note the court found it significant that the teachers' association may have committed at least two unfair practices by undertaking the strike: "(1) failure to negotiate in good faith (§ 3543.6, subd. (c)), and (2) refusal to participate in the impasse procedure (§ 3543.6, subd. (d))." (San Diego Teachers, supra, 24 Cal. 3d 1, 8.) The court also explicitly limited its holding to "injunctions against strikes by public school employee organizations recognized or certified as exclusive representatives . . . ." (Id. at p. 14.) We believe these factors distinguish San Diego Teachers from the present case.[7]
Appellants also rely on El Rancho Unified School Dist. v. National Education Assn. (1983) 33 Cal. 3d 946 [192 Cal. Rptr. 123, 663 P.2d 893] (El Rancho). In El Rancho, the Supreme Court held that the EERA had divested the superior court of jurisdiction over a school district's tort suit for *150 damages arising out of a teachers' strike led by noncertified unions. (El Rancho, supra, at p. 961.) Applying principles of federal preemption, the court held that the PERB has initial exclusive jurisdiction over all conduct that is arguably protected or prohibited by the EERA. (El Rancho, supra, at pp. 953, 957.) As in San Diego Teachers, the school district in El Rancho had filed unfair practice charges with the PERB prior to filing its lawsuit. (El Rancho, supra, at p. 949.)
(4) Significantly for our purposes, the court stated that "strikes are an unfair practice under [the] EERA only if they involve a violation of the act's provisions." (El Rancho, supra, 33 Cal. 3d 946, 957, italics added.) The court also noted that the "PERB has exclusive initial jurisdiction to determine whether such a strike is an unfair practice and what, if any, remedies should be pursued." (Id. at p. 961, italics added.) While the court did conclude that the PERB would take the harm caused to the general public by a teachers' strike into account, this conclusion was in the context of the PERB already having assumed jurisdiction over the underlying alleged unfair labor practice. Thus, we believe El Rancho should not be read so broadly as to apply to any strike-related issue that does not clearly implicate an unfair labor practice.
The PERB notes that the EERA, like the MMBA, is silent on the issue of strikes, yet the Supreme Court interpreted the PERB's jurisdiction over the EERA to include strike conduct in both San Diego Teachers and El Rancho. The PERB also emphasizes that strikes are a part of the bargaining relationship that is described in section 3505 of the MMBA. The PERB concludes that "a strike by essential employees is conduct that is arguably protected by the MMBA as an exercise of employee rights or is arguably prohibited by the MMBA as an unlawful coercive pressure tactic."
The facts underlying the strikes in the two Supreme Court cases, however, clearly implicated unlawful labor practices. While appellants appear to argue that strike-related conduct is always either arguably prohibited or protected by the MMBA, if appellants were correct there would have been no need for the court in El Rancho to limit its holding to strikes that are also unfair practices. Moreover, in the present case, the court did not enjoin the strike; it enjoined a relatively small number of employees who provide "essential public services, the disruption of which would cause a substantial and imminent danger to the public health or safety" from participating in the strike.[8]
*151 We recognize that our colleagues in the Sixth District arrived at the opposite conclusion in the recent City of San Jose case. The facts of that case concerned a threatened job action by a union representing sanitation workers. (City of San Jose, supra, 160 Cal. App. 4th 951, 958.) The city filed a complaint with the superior court, seeking to enjoin certain specified employees from participating in a work stoppage. As in the present case, the city argued that the employees provided services essential to the public health and safety of its citizens. A few days before the city filed the complaint, the union had filed an unfair practice charge against the city with the PERB, alleging that the city had interfered with the employees' right to strike by threatening to apply for injunctive relief. (Ibid.)
After discussing San Diego Teachers, El Rancho, and County Sanitation, the court in City of San Jose concluded that the union's conduct was arguably prohibited by the MMBA: "Despite its label as a common law claim, the underlying activityan allegedly illegal strikemay run afoul of the MMBA." (City of San Jose, supra, 160 Cal. App. 4th 951, 970.) The court also found that the union's conduct was arguably protected by the MMBA "because public employees covered by the MMBA enjoy a general right to strike" under County Sanitation. (City of San Jose, supra, at p. 971.) We believe the court's reasoning is overly broad, as it is difficult to envision how any strike-related conduct would not be either arguably prohibited or protected under this analysis, regardless of whether the conduct actually implicates the MMBA.
We also agree with the County that it is significant that both San Diego and El Rancho were decided prior to County Sanitation. Thus, appellants' position that the two earlier cases stand for the proposition that the courts are now divested of jurisdiction to decide matters brought under County Sanitation rests on somewhat shaky ground. In the absence of explicit language to the contrary, we also are not persuaded that the Legislature intended such a result when it gave the PERB jurisdiction over the MMBA.
Moreover, San Diego Teachers and its progeny concern teachers. The trial court in the present case was concerned with employees such as nurses, probation officers, and airport operations specialists. As important as teachers are, the public services involved in this case are on a different order of magnitude. A one-day strike by teachers is unlikely to create a "substantial *152 and imminent threat to the health or safety of the public" (County Sanitation, supra, 38 Cal. 3d 564, 586), whereas a one-day strike by nurses could have life-threatening implications.
Appellants also draw our attention to decisions by the Courts of Appeal. In Fresno Unified School Dist. v. National Education Assn. (1981) 125 Cal. App. 3d 259 [177 Cal. Rptr. 888] (Fresno), a school district had filed a complaint alleging three causes of action in the aftermath of a teachers' strike. The first theory asserted the strike was illegal and therefore the district was entitled to damages. The second theory was grounded in the tort of interference with contract. The third theory was based in contract, not tort. (Id. at pp. 262-263.)
Concluding the first two theories arguably involved allegations of unfair labor practices, the court held these causes of action were properly dismissed because section 3541.5 gives the PERB exclusive jurisdiction.[9] (Fresno, supra, 125 Cal. App. 3d 259, 267-268.) The court further held that, "as to the contract cause of action[,] the trial court had concurrent jurisdiction[,] pursuant to Labor Code section 1126," which provides for judicial enforcement of collective bargaining agreements. The court concluded that, as a matter of accommodation, a stay was proper to protect the status quo of the contract issues pending resolution by the board of the unfair practice issues. (Id. at p. 274.) We do not find Fresno to be dispositive since the case before us does not involve an unfair labor practice.
In Public Employment Relations Bd. v. Modesto City Schools Dist. (1982) 136 Cal. App. 3d 881 [186 Cal. Rptr. 634], a school district had filed an unfair practice charge against a teachers' union, accusing the union of violating provisions of the EERA by striking. The district also asked the PERB to seek injunctive relief against the union's work stoppage. (136 Cal.App.3d at pp. 885-886.) The court held that "public policy would best be served if PERB retained initial exclusive jurisdiction over any action which is arguably prohibited or protected by EERA." (Id. at p. 894.) The court concluded "there was reasonable cause for PERB to believe the District violated the duty to bargain in good faith ..." (id. at pp. 894-895) and that it would not "serve public policy to have numerous superior courts throughout the state interpreting and implementing statewide labor policy inevitably with conflicting results" noting "One of the basic purposes for the doctrine of preemption is to bring expertise and uniformity to the task of stabilizing labor relations." (Id. at p. 895.)
*153 We do not see a need to defer to the PERB's expertise in cases such as this. Trial courts are quite capable of resolving these issues. We note the Supreme Court observed the following in County Sanitation: "Although we recognize that this balancing process [in determining whether the public interest overrides the basic right to strike] may impose an additional burden on the judiciary, it is neither a novel nor unmanageable task." (County Sanitation, supra, 38 Cal. 3d 564, 586, italics added.)[10]
Nor do we agree with Local One that the present case exemplifies an area of law in need of consistent rulings. Local One claims that without "clear and consistent enforcement from an agency making initial determinations as to which employees it should seek to enjoin from striking, the parties will invariably be left to guess at the outcome that might be reached by a Superior Court judge acting at the last minute, having just heard of the case and considered the law and the issues for the first time that same day." Assuming this is a problem, we fail to see how the PERB review would solve it.
The decision regarding which employees should be covered by County Sanitation's public health and safety exception is very fact specific. Every local agency has different sets of employees who serve different functions. For example, the County in this case was concerned with a possible sympathy strike by nurses. However, many local agencies do not employ nurses. Because of the diversity of job classifications and functions carried out by local agencies, the need for consistent rulings is not compelling. Nor are we troubled by the fact that the parties will have to rely on the judgment of the trial courts, as trial courts have been called upon to address the issues raised by County Sanitation for over two decades.
(5) Fundamentally, whether or not an employee is deemed "essential" under County Sanitation is not a labor law issue; rather, it is a public safety issue. The inquiry does not implicate statewide labor policies, but rather turns on considerations of specific factors such as what tasks are performed by the employees, where the agency is located, and the size of the population served by the agency. These are factual determinations that must be made on a case-by-case basis. For example, sanitation workers may be essential to *154 public health and safety in areas with dense urban populations, but may not be so essential in sparsely populated rural areas. Thus, the PERB's emphasis on the need for uniform statewide policy is not very compelling because the trial court's decision will depend on the circumstances of each individual case.
In sum, we do not believe that San Diego Teachers and its progeny render County Sanitation a nullity. None of the cases cited to by appellants address the precise issue addressed under County Sanitation, namely, whether an otherwise lawful strike may be enjoined on the grounds that it presents a substantial and imminent threat to public health and safety. We acknowledge that strikes by essential public employees can potentially involve unfair labor practices, as, for example, where such strikes constitute a failure to negotiate in good faith. However, we see no evidence of allegations or conduct on the record before us suggesting that any party to this case had committed, or had threatened to commit, an unlawful labor practice.
C. The PERB's Exclusive Jurisdiction and the MMBA
There is no dispute that County Sanitation was decided in 1985, many years before the Legislature gave the PERB jurisdiction over the MMBA. The PERB argues that it is now solely responsible for determining whether a particular strike is protected or prohibited by the MMBA. It relies heavily on Coachella Valley in arguing that the Legislature has removed from the courts their initial jurisdiction over all issues arising under the MMBA.
In Coachella Valley, the Supreme Court held that the three-year statute of limitations period under Code of Civil Procedure section 338, subdivision (a) did not apply to cases brought under the MMBA because, in vesting the PERB with exclusive jurisdiction, the Legislature sought uniformity in the system of law for the regulation of public employment relations. (Coachella Valley, supra, 35 Cal. 4th 1072, 1089.) The court concluded that the six-month period found in the EERA and other public employment relations laws should be read to apply to the MMBA, explaining that the Legislature must have intended "a coherent and harmonious system of public employment relations laws in which all unfair practice charges filed with the PERB are subject to the same six-month limitations period." (Coachella Valley, supra, at p. 1090.)
Taking Coachella Valley a step further, the PERB claims that since San Diego Teachers, strikes involving the EERA have consistently been held to be within the PERB's initial exclusive jurisdiction and, consistent with the Supreme Court's desire for uniformity, public agency employers must now seek injunctive relief under County Sanitation by going to the PERB in the first instance. We believe appellants' reading of Coachella Valley is overbroad.
*155 (6) The Supreme Court in El Rancho noted that the PERB has exclusive jurisdiction over strikes under the EERA where those strikes can be characterized as unfair labor practices. Under the rationale of Coachella Valley, it is reasonable to conclude that the PERB now has jurisdiction over strikes under the MMBA insofar as the strikes constitute unfair labor practices. The Supreme Court has never held, however, that all strikes implicate unfair labor practices.
Moreover, we agree with the County that it, not the PERB, has primary responsibility for issues affecting the health and safety of its citizens. "A county may use its police powers to do `"whatever will promote the peace, comfort, convenience, and prosperity" of [its] citizens ..., [and these powers] should "not be lightly limited."' [Citation.]" (San Diego County Veterinary Medical Assn. v. County of San Diego (2004) 116 Cal. App. 4th 1129, 1135 [10 Cal. Rptr. 3d 885].) Counties are also required by statute to provide a "suitable" place for the detention of juvenile court wards (Welf. & Inst. Code, § 850), properly care for impounded animals (Civ. Code, § 1834; Pen. Code, § 597e), and provide support for indigent persons (Welf. & Inst. Code, § 17000).
(7) In sum, we believe the PERB does not have initial exclusive jurisdiction over whether a strike by essential employees poses an imminent threat to public health and safety. (8) Neither the PERB nor Local One has articulated any unfair practice that is arguably implicated by the County's complaint with respect to the employees the County sought to enjoin. In the absence of any indication that the employees the County was seeking to prevent from striking were committing an unfair practice, or that the County was committing an unfair practice by seeking the injunction, the MMBA was not implicated and the PERB had no jurisdiction over the complaint.
Local One argues that the legislative history of Senate Bill No. 739 (1999-2000 Reg. Sess.) (giving the PERB jurisdiction over the MMBA) shows that the Legislature considered and rejected giving County Sanitation special status. As evidence, it notes at one point during the drafting process, the legislation recognized County Sanitation but that the reference was later deleted.[11] It argues that this deletion means that the PERB is now empowered to apply existing judicial interpretations of the MMBA, including but not limited to County Sanitation. (See § 3509, subd. (a).)
*156 We are not persuaded that the Legislature at any time intended to take away the authority of the courts to hear matters falling under County Sanitation. Appellants have not pointed us to any explanation as to why the County Sanitation language was added initially, nor why it was later removed. In the absence of such an explanation, we decline to find that the Legislature intended the result advocated by appellants. While appellants interpret this history to mean that the Legislature abrogated County Sanitation by implication, a reasonable argument can be made that the Legislature intended the opposite result. In the absence of a clear legislative directive, we decline to conclude that County Sanitation no longer has validity.
Amicus curiae California State Council of Service Employees also argues that the PERB, not the courts, has the authority to implement County Sanitation because section 3510, subdivision (a), states that the MMBA "shall be interpreted and applied by the board in a manner consistent with and in accordance with judicial interpretations...." We question whether County Sanitation is a "judicial interpretation" of the MMBA, as it was decided under the common law. And even if County Sanitation falls within section 3510, subdivision (a), it does not follow that by requiring the PERB to follow judicial interpretations of the MMBA the Legislature simultaneously divested courts of the authority to follow their own judicial precedent.
The PERB argues that section 3509, subdivision (a), gives it the exclusive authority to seek judicial intervention to prevent a strike that the PERB determines to be unlawful under the MMBA. However, as we have indicated, strikes by essential employees are not inherently unlawful under the MMBA. Rather, such strikes may be unlawful pursuant to the holding of County Sanitation. Absent an injunction, "essential" employees are free to strike in a manner consistent with the MMBA.
(9) The PERB also claims that its regulation, section 32465 (Cal. Code Regs., tit. 8, § 32465) vests the final decision regarding injunctive relief with the board. That regulation provides: "Upon receipt of the General Counsel's report, the Board itself shall determine whether to seek injunctive relief." (Ibid.) We interpret this regulation to apply to unfair labor practice charges brought under the MMBA only.
*157 As we do not believe that the MMBA gives the PERB initial exclusive jurisdiction over complaints brought pursuant to County Sanitation, it is unnecessary for us to address appellants' argument that the County was not excused under the exceptions to the doctrine of exhaustion of administrative remedies from seeking redress through the PERB. Nor need we address the County's argument that the PERB's injunction relief procedures are inadequate.[12]
IV. Did the Trial Court Err in Failing to Follow Labor Code Sections 1138 and 1138.5?
Local One claims that the trial court erred by issuing a labor injunction without complying with Labor Code section 1138.1. The County counters that section 1138.1 does not apply to injunctions sought under County Sanitation.
Labor Code section 1138 et seq., took effect on January 1, 2000. Labor Code section 1138.1, subdivision (a), provides: "No court of this state shall have authority to issue a temporary or permanent injunction in any case involving or growing out of a labor dispute, except after hearing the testimony of witnesses in open court, with opportunity for cross-examination, in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and except after findings of fact by the court, of all of the following: [¶] (1) That unlawful acts have been threatened and will be committed unless restrained or have been committed and will be continued unless restrained, but no injunction or temporary restraining order shall be issued on account of any threat or unlawful act excepting against the person or persons, association, or organization making the threat or committing the unlawful act or actually authorized those acts.[¶] (2) That substantial and irreparable injury to complainant's property will follow. [¶] (3) That as to each item of relief granted greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief. [¶] (4) That complainant has no adequate remedy at law. [¶] (5) That the public officers charged with the duty to protect complainant's property are unable or unwilling to furnish adequate protection." (Italics added.)
In examining the five required findings individually, we observe that some of the mandatory findings do not fit the facts of this case. For example, Labor Code section 1138.1, subdivision (a)(2) states that the court must find "That *158 substantial and irreparable injury to complainant's property will follow [from the unlawful acts]." Here, the County was seeking to protect public health and safety, not its property. Moreover, it is unlikely a court would grant an injunction under County Sanitation solely for the purpose of protecting a local agency's property.
Similarly, Labor Code section 1138.1, subdivision (a)(5) requires a court to find that the "public officers charged with the duty to protect complainant's property are unable or unwilling to furnish adequate protection." This provision most logically relates to picketing activities conducted on private property, and, in that context, has been construed as follows: "[W]e hold that where law enforcement has been summoned, responds in a timely fashion, protects persons from injury and property from damage, and ensures ingress and egress to and from the premises, there is neither an unwillingness nor an inability to furnish adequate protection. Conversely, where law enforcement is unwilling or unable to afford these protections and services, an injunction may lie." (United Food & Commercial Workers Union v. Superior Court (2000) 83 Cal. App. 4th 566, 580 [99 Cal. Rptr. 2d 849].)
The evident purpose of this provision is to require parties to rely on law enforcement authorities before resorting to the courts to obtain relief from unlawful acts arising out of concerted labor activities. Courts have observed that Labor Code section 1138.1, subdivision (a)(5) "is modeled upon (indeed is substantially identical to) a provision of the Norris-LaGuardia Act. The Norris-LaGuardia Act was enacted to remedy the abusive use of the injunction in labor disputes. [Citation.] Given the historical track record of abuses of injunctive relief in labor disputes, the Legislature could rationally decide that requiring parties to a labor dispute first to resort to law enforcement remedies would tend to avert abuses in the issuance of injunctive relief." (Waremart Foods v. United Food & Commercial Workers Union (2001) 87 Cal. App. 4th 145, 159 [104 Cal. Rptr. 2d 359].) Other goals furthered by this subdivision include insulating the judicial branch from police matters that are more properly within the purview of the executive branch, and conserving judicial resources by reducing the court's involvement in matters that could be addressed by invoking the assistance of law enforcement. (Id. at pp. 159-160.)
(10) Moreover, as it is the "public officers" themselves who are the complaining parties in cases such as the one before us, we question how a *159 local agency would ever be able to make a showing that it was unwilling or unable to protect its own property. In sum, we do not believe the Legislature sought to require the trial courts to make such irrelevant findings when issuing injunctions under County Sanitation.[13]
It is also unclear that the Legislature intended for these statutes to apply to public entities. Labor Code section 1138.4 provides that the term "labor dispute" is defined by clauses (i), (ii), and (iii) of Code of Civil Procedure section 527.3, subdivision (b). However, Code of Civil Procedure section 527.3, subdivision (d), provides that "[n]othing contained in this section shall be construed to alter the legal rights of public employees or their employers...."
Local One argues that this limitation does not apply to Labor Code section 1138.4 because that section only incorporates the three subordinate clauses of subdivision (b) of Code of Civil Procedure section 527.3. Local One also argues that the fact Labor Code section 1138.4 contains an exemption for certain peace officers indicates the Legislature intended for the injunction requirements to apply to all other public employees.
We express no opinion as to whether Labor Code section 1138 et seq., applies to public entities or public employees. In view of the limited issue that was before the trial court, we conclude that the provisions of Labor Code section 1138.1, subdivision (a) are inapplicable.
We have narrowly interpreted the scope of the PERB's jurisdiction in this area. This case concerns an issue of importance to every local agency in the state and the labor organizations representing the agencies' employees. We note that a petition for review in the City of San Jose case has already been filed. We urge our Supreme Court to resolve this important issue.
*160 DISPOSITION
The orders are affirmed.
Stein, Acting P. J., Margulies, J., concurred.
NOTES
[1] The defendant unions were: Public Employees Union Local One; Social Services Union, SEIU Local 535; United Clerical, Technical & Specialized Employees, AFSCME Local 2700; and Professional & Technical Employees, AFSCME Local 512.
[2] The nurses' union is the California Nurses Association which represented approximately 500 nurses. It is not a party to this appeal.
[3] The parties have settled their contract negotiations. However, the issues raised are not moot as they are capable of repetition, yet evading review. (United Farm Workers of America v. Superior Court (1975) 14 Cal. 3d 902, 906-907 [122 Cal. Rptr. 877, 537 P.2d 1237]; Farron v. City and County of San Francisco (1989) 216 Cal. App. 3d 1071, 1074 [265 Cal. Rptr. 317].)
[4] Shortly after oral argument, the Sixth District Court of Appeal published its decision in City of San Jose v. Operating Engineers Local Union No. 3 (2008) 160 Cal. App. 4th 951 [73 Cal. Rptr. 3d 159] (City of San Jose). At our request the parties have filed supplemental briefing addressing any issues discussed in the opinion that might affect our ruling in this case.
[5] All subsequent statutory references are to the Government Code except where otherwise indicated.
[6] Parties can ask the PERB to seek injunctive relief by giving at least 24 hours' prior notice to the PERB's general counsel and to the party against whom relief is sought. (Cal. Code Regs., tit. 8, § 32450, subd. (c).) The general counsel is required to make a recommendation to the board within 120 hours after the receipt of a request (24 hours if the request is made during a work stoppage or lockout). (Id., § 32460.) If the board is unable to assemble a quorum within 24 hours after the recommendation is filed, the general counsel is authorized to take action on the request. (Id., § 32470.)
[7] The necessity of a nexus between the PERB's jurisdiction and an alleged unfair labor practice has been noted by our Supreme Court: "We do not dispute that PERB has exclusive jurisdiction over issues concerning unfair labor practices. [Citation.] The case at bar, however, does not involve a dispute over an unfair practice. Rather, at issue is whether the union, under the terms of the collective bargaining agreement, can file a civil suit against a noncomplying employee. San Diego Teachers did not address this issue." (San Lorenzo Education Assn. v. Wilson (1982) 32 Cal. 3d 841, 853 [187 Cal. Rptr. 432, 654 P.2d 202], fn. omitted.)
[8] In its reply brief, Local One claims that under San Diego Teachers, the "illegality of particular strike conduct under the common law would make the same strike conduct at least `arguably prohibited' under the statutory labor relations law." We are not convinced. As we have noted, the Supreme Court in County Sanitation did not hold that the strike was illegal under the MMBA, instead finding that the relevant statutes were "shrouded in ambiguity" with respect to strikes. (County Sanitation, supra, 38 Cal. 3d 564, 573.) We thus believe Local One's argument extends the "arguably prohibited" branch of the preemption doctrine too far.
[9] Section 3541.5 provides, in part: "The initial determination as to whether the charges of unfair practices are justified, and, if so, what remedy is necessary to effectuate the purposes of this chapter, shall be a matter within the exclusive jurisdiction of the board."
[10] We note the City of San Jose opinion cites to Justice Lucas's dissenting opinion in County Sanitation for the proposition that "`the courts are poor forums for the resolution of [strike related disputes].'" (City of San Jose, supra, 160 Cal. App. 4th 951, 973.) Yet, the PERB does not have the authority to issue injunctions on its own. It merely has the authority to seek injunctions, which can only be issued by the very same courts that the PERB and the court in City of San Jose deem "not well suited to the task." (Ibid.)
[11] Section 3510, subdivision (b) at one point read: "The enactment of this chapter shall not be construed as making the provisions of Section 923 of the Labor Code applicable to public employees. The holding of County Sanitation Dist. No. 2 v. Los Angeles County Employees' Assn. (1985) 38 Cal. 3d 564 is hereby adopted and shall be applied for the purposes of this chapter." (Legis. Counsel's Dig., Sen. Bill No. 739, Stats. 1999 (1999-2000 Reg. Sess.) Summary Dig., p. 11.) The italicized language was subsequently deleted.
[12] We accordingly deny the County's request for judicial notice of portions of the PERB's annual reports from the years 2000-2001 to 2005-2006 documenting its actions with respect to injunctive relief requests.
[13] As we have concluded that the present case does not involve an unfair labor practice, this case arguably is not one "involving or growing out of a labor dispute." Fundamentally, injunctions issued in cases such as this arise out of a concern for public health and safety. The primary issue that the injunction is designed to remedy is the absence of essential workers, not the reason for their absence. Injunctions issued under County Sanitation have only a tangential relationship to the underlying labor dispute as the injunction itself has no direct effect on the ongoing labor negotiations or the employees' lawful exercise of their collective bargaining rights. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265785/ | 99 N.J. 244 (1985)
491 A.2d 1236
KEYES MARTIN & COMPANY, RESPONDENT,
v.
DIRECTOR, DIVISION OF PURCHASE AND PROPERTY, DEPARTMENT OF TREASURY, STATE OF NEW JERSEY, APPELLANT.
The Supreme Court of New Jersey.
Argued December 10, 1984.
Decided May 6, 1985.
*247 Joseph L. Yannotti, Deputy Attorney General, argued the cause for appellant (Irwin I. Kimmelman, Attorney General of New Jersey, attorney; James J. Ciancia, Assistant Attorney General, of counsel.)
Arthur N. D'Italia argued the cause for respondent (Chasan, Leyner, Tarrant & D'Italia, attorneys.)
The opinion of the Court was delivered by HANDLER, J.
Respondent Keyes Martin and Company (Keyes Martin) seeks the award of a contract to provide advertising and promotional services for the New Jersey State Lottery. After reviewing the bids submitted by all the companies competing for the contract, the State Lottery Commission (Lottery Commission) determined that Keyes Martin was the best qualified company. However, when it was later informed of business dealings between Daniel Gaby, the president of Keyes Martin, and Reese Palley, the Chairman of the Lottery Commission, the Commission recommended to the Director of the Division of Purchase and Property that Keyes Martin's low bid be rejected. The Director agreed with the recommendation of the Commission and awarded the contract to another agency.
An appeal was filed by Keyes Martin and the Appellate Division vacated the Director's final decision. A majority of the court determined that the contract should be awarded to Keyes Martin. A dissenting member of the court concluded that there should be further proceedings relating to Keyes Martin's qualifications to bid on public contracts. We granted *248 the Director's petition for certification, 97 N.J. 703 (1984), and also granted a motion to stay the lower court's decision. We now reverse and reinstate the Director's decision rejecting Keyes Martin's bid.
I.
The New Jersey Lottery is authorized by the Constitution, N.J. Const. (1947), Art. IV, sec. VII, para. 2, and implementing legislation, N.J.S.A. 5:9-1 to -25. The operations of the State Lottery are conducted by the Division of the State Lottery in the Department of Treasury (Division) and supervised generally by the Lottery Commission. The Lottery Commission in the exercise of its supervisory responsibilities engages in extensive marketing, advertising, promotional and public relations activities to enhance the effectiveness of the State Lottery. To provide these services, it employs an advertising and public relations agency. These services have been regularly provided under successive, separate, two-year contracts that are awarded pursuant to public bidding as mandated by N.J.S.A. 52:34-6.
Keyes Martin had been the successful bidder or vendor for several years and it was the current vendor performing advertising and promotional services under a contract that had been awarded by the Division in September of 1980.[1] On January 19, 1983, in response to a Request for Proposals issued by the Division of Purchase and Property, Keyes Martin and six other agencies submitted comprehensive bid proposals containing detailed plans for achieving the specified goals of the Lottery Commission.
An Evaluation Committee consisting of staff members of the Lottery Commission and the Division reviewed the proposals submitted by the seven agencies. The Committee determined that Keyes Martin, which had submitted the lowest bid, was the *249 best qualified agency in terms of experience and technical approach. Accordingly, on March 22, 1983, the Committee recommended that the contract be awarded to Keyes Martin.
Before the Lottery Commission could act upon the Committee's recommendation, the State Treasurer received a letter from the Attorney General advising the Director to reject Keyes Martin's bid proposal. The basis for the Attorney General's opinion was an asserted business relationship between Daniel Gaby, the president of Keyes Martin, and Reese Palley, then Chairman of the Lottery Commission, during the time period that Keyes Martin was under contract to provide advertising and promotional services for the State Lottery. The Attorney General also referred to a complaint that had been filed by the Executive Commission on Ethical Standards charging Palley with conflicts of interest and the violation of several provisions of the Lottery's Code of Ethics.[2] Rejection of the Keyes Martin bid was suggested because "an award to that vendor would impair public confidence in the integrity of the operations of the State Lottery."
Acting in response to the Attorney General's recommendation, the Evaluation Committee was reconvened by Deputy Director of the Division of Purchase and Property (Deputy Director). The Committee was instructed to evaluate the bid proposals after eliminating from consideration Keyes Martin's bid. On May 23, 1983 the Committee issued an alternative award recommendation, naming Venet Advertising, Inc. (Venet) as the best qualified remaining agency. The Committee's recommendation was adopted by the Lottery Commission on May *250 25, 1983, in a resolution requesting the Deputy Director to grant Venet the Lottery advertising contract. The Deputy Director awarded the advertising contract to Venet on May 31, 1983, notwithstanding a petition filed by Keyes Martin requesting review of the Lottery Commission's rejection of its low bid. The Deputy Director indicated that the award to Venet was contingent upon the success of Keyes Martin's protest.
On June 27, 1983 an informal hearing on the protest was held before an Assistant to the Director of Purchase and Property, acting as a hearing officer. The hearing was conducted for the purpose of affording Keyes Martin an opportunity to contest the factual basis from which the Lottery Commission drew its conclusion to reject the Keyes Martin bid. Accordingly, Keyes Martin's evidence was directed at demonstrating that the Attorney General's characterization of the relationship between itself and Reese Palley was inaccurate or unfair.
According to the evidence considered, there were business contacts involving a visit that Palley made in July of 1982 to the Republic of China to explore business opportunities for China Interface Corporation, a company in which Palley owned stock. Palley had mentioned that he would let Gaby know if he saw anything on his trips that would interest the advertising company, to which Gaby replied "Fine." On Palley's return, he asked Gaby to reimburse him for $200 spent in China for the services of a "consultant" and an interpreter, both employed to further the interests of Keyes Martin. Although Gaby had not authorized these expenditures, he did reimburse China Interface because of Palley's "good intentions" and the small amount involved.
Other contacts between Palley and Gaby, as reflected by the evidence, involved a discussion in August of 1982 about the possibility of Gaby becoming a stockholder in China Interface. Palley proposed that Gaby become a 16 1/2% owner of the company, and Gaby said he "would seriously consider the matter," but no transaction ever ensued. Keyes Martin also provided *251 advertising and public relations services to China Interface. At Palley's direction Keyes Martin arranged for the placement of a classified advertisement in The Wall Street Journal, for which Keyes Martin received a standard fee. Additionally, at the suggestion of Palley, the advertising company submitted to China Interface a proposal for a program of advertisements for a Chinese beer that China Interface planned to market in this country. Although China Interface expressed an interest in Keyes Martin's proposal, it was not accepted and no advertising contract between the companies was executed.
The hearing officer found "that a `business relationship' existed between Keyes Martin and China Interface" and that "Reese Palley played a role in affecting [sic] that relationship."[3] His report was submitted to the Lottery Commission, which passed a resolution again recommending that Keyes Martin's bid be rejected. The Commission concluded that
based on the business relationship between Reese Palley and Keyes Martin, an award to Keyes Martin would not be in the public interest in that any appearance of wrong doing may impair public confidence in the integrity of the operations of the State lottery which is based primarily upon public confidence and whose operations are essential to the fiscal health of the State.
On July 29, 1983 the Director of the Division of Purchase and Property affirmed the Deputy Director's initial decision to reject the bid of Keyes Martin and to award the advertising contract to Venet.
II.
We begin our analysis with the statutory provisions that define and control the responsibility of the Director of the Division of Purchase and Property in the award of public contracts under our system of competitive bidding. Public advertisement for bids is required under N.J.S.A. 52:34-6 with respect to "[a]ll purchases, contracts, or agreements, the cost *252 or contract price whereof is to be paid with or out of State funds...." After bids are requested and received,
award shall be made with reasonable promptness by written notice to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the State, price and other factors considered. Any or all bids may be rejected when the State Treasurer or the Director of the Division of Purchase and Property determines that it is in the public interest so to do. [N.J.S.A. 52:34-12(d).]
It is clear from the language employed that the Legislature intended to confer upon the Director broad discretionary power to award or reject bids. All material factors, including price, must be considered in the ultimate determination of the most advantageous bid. The statute specifically authorizes the Director to reject bids when such action would be "in the public interest."
Based on the evident language and purpose of the statutory grant, as well as its history, the courts of this state have consistently accorded the Director considerable deference and great latitude in awarding public contracts. The predecessor statute, N.J.S.A. 52:34-3, repealed in 1954 by the present enactment, provided that
the contract shall * * * be awarded to the lowest responsible bidder, except that the right to reject any or all bids is reserved to and may be exercised by the person or persons acting for or on behalf of the State in such matters * * *.
In Commercial Cleaning Corp. v. Sullivan, 47 N.J. 539, 548 (1966), after noting the pertinent differences between the present and former statutes, we were satisfied
that the Legislature established much more flexible standards as a guide for the Director's decision to award a public contract to a particular bidder whether or not he is the low bidder. This is not to say the low bid may be ignored or treated as a minor consideration. It is a factor of great importance and not to be lightly discarded.
We also emphasized the distinction between the bidding requirements imposed on the State and those imposed on State subdivisions. The Local Public Contracts Law, in part, states that "[a]ll purchases, contracts or agreements which require public advertisement for bids shall be awarded to the lowest bidder." N.J.S.A. 40A:11-6.1. The absence of such restrictive *253 language in the bidding statute applicable to State contracts led us to conclude "that at this particular level of State activity, the legislative plan for awarding public contracts, which, as here, requires public advertising for bids, was to extend greater freedom of action to the Director and Treasurer than the circumscribed rule imposed on counties and municipalities." Commercial Cleaning, supra, 47 N.J. at 548-49.
The officials statutorily responsible for procuring goods and services under the public bidding laws are charged with the obligation of selecting the vendor whose offer will be the most advantageous to the State. Because of the multiplicity and variety of State needs, every award involves different considerations, depending on the requirements of the public body that seeks them and the nature of the goods or services sought. Consequently, in order for the Director to discharge his responsibility in selecting the most advantageous bid, he must be granted the flexibility to consider all relevant factors that would inform his choice. See Blondell Vending v. State, 169 N.J. Super. 1 (App.Div.), certif. den., 81 N.J. 333 (1979); In re Honeywell Information Systems, Inc., 145 N.J. Super. 187 (App.Div. 1976), certif. den., 73 N.J. 53 (1977).
In this case, in analyzing whether the Director properly exercised his statutory discretion, the scope of judicial review is limited. "[T]he lawmakers' purpose [in enacting N.J.S.A. 52:34-12(d)] was to draw in the boundaries delineating the area of judicial intervention when an attack is made on the Director's award of a contract." Commercial Cleaning, supra, 47 N.J. at 549.
[T]he judicial standard for appraising the propriety of the exercise of his discretion in awarding a contract or in rejecting a bid or a bidder should be that the courts will not interfere in the absence of bad faith, corruption, fraud or gross abuse of discretion. [Id.]
Accord In re Honeywell Information Systems, Inc., supra.
Despite its acknowledgement that its appellate function was clearly circumscribed, the Appellate Division in this case vacated the Director's award. Although the lower court did not *254 suggest that the legislatively-granted power to reject bids in the public interest was an unconstitutional delegation of power to an administrative agency, it held that the manner in which it was exercised was arbitrary and speculative. The court remarked that "[a]t the heart of the problem is the complete obscurity of the standard on which the Director acted. The `appearance of wrongdoing' standard is no standard at all. It is completely non-objective." 196 N.J. Super. at 62. According to the court, respect for settled legal principles would prohibit the "public interest" from being "read to mean anything the Director chooses it to mean." Id. at 66. We disagree with the Appellate Division's analysis and conclusion.
It is fundamental that "within limits the Legislature may delegate its authority to a government agency." Mt. Laurel Township v. Public Advocate of N.J., 83 N.J. 522, 532 (1980); N.J. Chamber of Commerce v. N.J. Election Law Enforcement Comm'n, 82 N.J. 57, 82-83 (1980). "[T]he Legislature may not vest unbridled or arbitrary power in an administrative agency," Ward v. Scott, 11 N.J. 117, 122 (1952), but "[a]s long as the discretion of administrative officers is `hemmed in by standards sufficiently definitive to guide its exercise,' the delegation of legislative powers is not unconstitutional." Mt. Laurel Township v. Public Advocate of N.J., supra, 83 N.J. at 532, citing Cammarata v. Essex County Park Comm'n, 26 N.J. 404, 410 (1958). Accord Matter of Egg Harbor Assocs. (Bayshore Centre), 94 N.J. 358, 372 (1983).
Standards must accompany the delegation of power for three reasons:
First, [they] prevent the Legislature from abdicating its political responsibility and prevent undemocratic, bureaucratic institutions from wielding all-encompassing, uncontrollable government power. Second, limiting standards define the area in which the agency develops the experience and expertise that the legislature has neither the time nor resources to develop. With too broad a standard the agency stands in no better position than the legislature that created it. Third, and most important, standards facilitate judicial review of agency decisions, which guards against arbitrary and capricious governmental action. As long as the statutory standards achieve these purposes, such *255 standards should be considered sufficiently definite to pass constitutional muster. [Mt. Laurel Township, supra, 83 N.J. 532-33]
Our courts have consistently sustained the delegation of legislative authority under broad and general statutory standards governing the manner in which administrative agencies must exercise the authority delegated. Thus, against constitutional attacks, we have upheld standards authorizing the Public Advocate to represent the "public interest" in administrative and court proceedings, Mt. Laurel Township, supra, 83 N.J. 522; requiring the Department of Environmental Protection to use its power to "promote the health, safety, and welfare of the public," Matter of Egg Harbor Assocs., supra, 94 N.J. 358; directing the State Highway Commissioner to determine what passenger train service "is essential in the public interest," Sprissler v. Pennsylvania-Reading S.S. Lines, 45 N.J. 127 (1965); empowering the Board of Public Utilities Commissioner to regulate in a manner that will serve "public convenience and necessity," In re New Jersey & New York R. Co., 12 N.J. 281 (1953), appeal dismissed, 346 U.S. 868, 74 S.Ct. 123, 98 L.Ed. 378 (1953); and allowing the Commissioner of Banking and Insurance to permit maintenance of a bank's branch office when to do so would be "in the public interest." Elizabeth Federal S. & L. Ass'n v. Howell, 30 N.J. 190 (1959).
The public interest standard of N.J.S.A. 52:34-12(d) is consistent with these decisions and was properly applied by the Director in this case. The first requirement relating to the proper delegation of legislative authority, discussed in Mt. Laurel Township, supra, 83 N.J. 522, evidences a concern that the agency invested with delegated legislative authority may acquire power that is properly lodged in the Legislature. For that reason, the authority of an administrative agency must be limited and restrained lest the agency arrogate too much governmental power.
In this case, it is suggested that if the "public interest" standard of N.J.S.A. 52:34-12(d) were construed to mean or to include the "appearance of wrongdoing," the basic standard *256 would be so broad as to be illusory. Keyes Martin contends, and the Appellate Division ruled, that allowing the Director the discretion under the "public interest" standard to make decisions concerning bids in terms of his understanding of "public perception" grants him the authority to use the power of his office in an arbitrary and wholly subjective manner. We disagree.
To determine whether administrative power is sufficiently circumscribed, the language of the statutory standard "may not be judged in a vacuum." Elizabeth Federal S. & L. Ass'n v. Howell, supra, 30 N.J. at 194. The statutory authority to reject bids when "it is in the public interest so to do," N.J.S.A. 52:34-12(d), must be understood in terms of the purpose of the enactment, the general statutory scheme of which it is a part, and the regulatory context in which it is to be applied. These considerations may give concreteness to a standard that may otherwise seem overbroad. "The standard draws specificity from each setting." Trap Rock Indus., Inc. v. Kohl, 59 N.J. 471, 483 (1971); see Elizabeth Federal S. & L. Ass'n, supra, 30 N.J. at 194; see also Motyka v. McCorkle, 58 N.J. 165, 178 (1971) (adequate standard may be implied from presence of procedural and judicial safeguards).
A major objective of all public bidding statutes has been to promote the honesty and integrity of those bidding and of the system itself.
Bidding statutes are for the benefit of the taxpayers and are construed as nearly as possible with sole reference to the public good. Their objects are to guard against favoritism, improvidence, extravagance and corruption; their aim is to secure for the public the benefits of unfettered competition. To achieve these purposes all bidding practices which are capable of being used to further corrupt ends or which are likely to affect adversely the bidding process are prohibited, and all awards made or contracts entered into where any such practice may have played a part, will be set aside. This is so even though it is evident that in fact there was no corruption or any actual adverse effect upon the bidding process. [Terminal Const. Corp. v. Atlantic City Sewerage Auth., 67 N.J. 403, 409-10 (1975).]
*257 See Trap Rock Indus., supra, 59 N.J. at 479; Hillside Township v. Sternin, 25 N.J. 317, 322 (1957); In re Honeywell Information Systems, Inc., supra, 145 N.J. Super. at 200. To this end, our courts have often set aside an award of a contract when evidence of corruption, inequality, or unfairness was present.
In addition to a consideration of the purpose of the enactment, the standard specified under N.J.S.A. 52:34-12(d) must also be viewed in a larger statutory framework. Under N.J.S.A. 52:25-6 and N.J.S.A. 52:27B-55 the Director of the Division of Purchase and Property has "the exclusive authority and duty to purchase all articles used or needed by the state and its using agencies."[4] The Director is "vested with the powers, duties, and responsibilities involved in the efficient operation of a centralized State purchasing service" and has been given the authority, subject to the approval of the State Treasurer, "to organize the Division for the effective performance of its functions and purposes." N.J.S.A. 52:27B-56. Obviously, the purchasing requirements of different using agencies are different. Whenever the Director is called upon to decide which bid from among many is most advantageous to the State, he must consider the specific needs and policies of the using agency as well as the general prescriptions of the public bidding statute. The standard under which he may exercise this multi-faceted authority must be broad enough to allow accomplishment of his various obligations, yet sufficiently narrow to prevent abuse.
It is also relevant to consider the regulatory context in which the bidding laws are to be applied. In this case, the Commission is specifically authorized and directed to promulgate rules governing the operation of the Lottery system "in order that such Lottery shall produce the maximum amount of net revenues for State institutions and State aid for education consonant *258 with the dignity of the State and the general welfare of the people." N.J.S.A. 5:9-7a. In promulgating its rules, the Commission was instructed to rely on the report and recommendation of the State Lottery Planning Commission. Id. The Planning Commission's report emphasized two major criteria for the organization and operation of the Lottery:
First, it must, to the greatest extent possible, attract the confidence of the public. As such it must forever be untainted by any suspicion of unethical conduct. In this regard, the Commission strongly recommends that the personnel of the Lottery Division proposed in this report and all persons doing business with the Division be carefully screened through regular security checks. Second, it must be such as to achieve the goals of the lottery operation, as set by collective public opinion, to the fullest extent possible. [Report of the New Jersey Lottery Planning Commission, at p. 4.]
In its discussion of administrative operations, the Planning Commission emphasized that the most important consideration was that the Lottery "command the full trust and confidence of the citizens of this State; in particular, the operation of the Lottery must be free of any possible suspicion of improper conduct." Id. at p. 6. The Commission also stressed that the financial success of the Lottery was to a great extent based upon the public's confidence in a Lottery run in an ethical and honest fashion. Id. at pp. 20, 25. In the conclusion to its report, the Commissioner stated that the "State must exercise sufficiently tight control over its Lottery so as to ensure full public confidence in its integrity." Id. at p. 34.
The Planning Commission's emphasis on public confidence in the ethical and honest operation of the Lottery is further reflected in specific regulations governing the Division of Lottery and the Lottery Commission. The specifications incorporated in the Requests for Proposals, specifically provide that one of the goals of the Lottery is to "continue to maintain and reinforce the credibility and good name of the New Jersey State Lottery." Additionally the Lottery Commission had promulgated a strict Code of Ethics to prevent disreputable or unsavory government activity. These focus specifically on the area of conflicts of interest. Representative provisions state:
*259 No Commissioner shall have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity, which is in conflict with the proper discharge of his duties in the public interest. Commissioners who deal with outside organizations on behalf of the Lottery to negotiate the purchase of products, materials, or services, or who are in a position to influence such purchases or awarding of contracts should have no propriety or financial interest either in those furnishing such products, materials, or in any transaction related thereto.
No Commissioner shall use or attempt to use his official position to secure unwarranted privileges or advantages for himself or others.
No Commissioner shall act in his official capacity in any matter wherein he has a direct or indirect personal financial interest that might reasonably be expected to impair his objectivity or independence of judgment.
No Commissioner shall knowingly act in any way that might reasonably be expected to create an impression or suspicion among the public having knowledge of his acts that he may be engaged in conduct violative of his trust as a Lottery Commissioner.[5]
The bidding specifications and the Code of Ethics thus express a clear regulatory policy that the public perception of the Lottery constitutes an essential dimension in all action taken by the Commission.
These considerations lead us to conclude that the public interest standard of the statute is amenable to discrete and restricted applications and that the appearance of impropriety, as an application of the general standard in this case, is itself a sufficiently concrete and limited criterion. It constitutes an adequate guideline to assure that the Director in the performance of his responsibilities under the bidding law is not usurping legislative authority.
The second major purpose of limiting standards that control delegated authority, as expressed in Mt. Laurel Township, *260 supra, is to confine an agency's action to the scope of its expertise. In this case the Appellate Division ruled that "[t]he expertise which renders [the Director's] actions proof against judicial intervention relates to matters of business judgment, In re Honeywell Information Systems, Inc., 145 N.J. Super. 187, 200 (App.Div. 1976), certif. den., 73 N.J. 53 (1977), and we cannot conceive that the Legislature intended him to act on the basis of his personal view of what the `public interest' requires outside the scope of business considerations." 196 N.J. Super. at 61.
There can be no doubt that when decisions that affect the Lottery Commission are made, the public's perception should, and in some instances must, be considered. As we have said, the business of the Lottery often depends on and is interrelated with what the public believes to be the integrity of the system. As the official ultimately responsible for procuring services for the benefit of the Lottery Commission, the Director must develop his expertise in all areas of the Lottery that will be affected by his decisions. In this case, his decision to award the Lottery advertising contract fairly demands consideration of appearances that might lead to a loss of public confidence in the Lottery. To confine the Director's considerations solely to "matters of business judgment" would impose a myopic perspective on his responsibilities that could well warp his decisions. The factors that might contribute to a loss or decline in public confidence are not so theoretic or esoteric as to be outside the realm of the Director's expertise. Therefore, allowing the Director to reject Keyes Martin's bid based on its potential impact on the public does not offend the precept that an agency must act only within its area of expertise. The appearances standard is not deficient in this respect.
Nor is this standard deficient with respect to the third purpose discussed in Mt. Laurel Township, supra, for limiting the delegation of legislative authority. A standard under which an administrative agency acts must facilitate judicial review in order to "guard against arbitrary and capricious government *261 action." Mt. Laurel Township, supra, 83 N.J. at 532-33. A majority of the Appellate Division felt in this case that the Director's "chosen standard is beyond the reach of meaningful appellate review. No one but the Director can know precisely what was decided and why." 196 N.J. Super. at 62. It was the view of the lower court that government decisions should not be based on "hunches" as to what the public might perceive.
If it were true that under this standard the Director was free to reject low bids based on an irresponsible, unarticulated feeling that the public interest would be best served by doing so, we would not hesitate to invalidate the standard and any decision made under it. However, such is not the case. A requirement of reasonableness is necessarily and sensibly engrafted onto the standard. An appellate court may reverse an arbitrary decision. See R.H. Macy & Co. Inc. v. Director, Div. of Taxation, 77 N.J. Super. 155, 178 (App.Div. 1962), aff'd o.b., 41 N.J. 3 (1963) (statute providing for determination "in the opinion of the Director" construed to require "reasonable judgment of an administrator making an objective judgment of the matter"); see also Maietta v. N.J. Racing Comm'n, 183 N.J. Super. 397 (App.Div. 1982), aff'd, 93 N.J. 1 (1983) (statute that authorizes refusal to issue a license if "in the opinion of the [Racing] Commission * * * the refusal is in the public interest" does not permit such discretion to be exercised "arbitrarily").
Further protection is afforded by the presence of an adequate record on review. In making his decision in this case, the Director relied on a comprehensive report of the hearing officer as well as the recommendations of the Attorney General and the Lottery Commission. All the allegations and replies concerning conflicts of interest were before him. His decision was based on a complete record and a full documentation of the factual setting. The needs for adequate judicial review have been amply met in this case.
We are satisfied that the Director did not abuse his discretion in awarding the Lottery advertising contract to an *262 agency other than Keyes Martin. It was proper to consider the fact that a business relationship existed between Reese Palley and Keyes Martin, as well as any other facts that may have colored the public's perception regarding the integrity of the lottery system. The Director could conclude from the record that the public might have perceived Reese Palley's relationship with Keyes Martin as one involving special treatment, which could reflect adversely on the integrity of the Lottery Commission and impair the public's confidence in the Lottery.
In conclusion, we hold that the statutory standard authorizing the rejection by the Director of bids for public work "in the public interest" provides a sufficiently definite framework within which to exercise administrative power. We hold further that this standard was properly applied on an adequate factual record by the Director to reject a bid based on the appearance of wrongdoing attributable to a possible conflict of interest involving the bidder and a member of the contracting agency. Accordingly, we rule that the Director properly exercised his discretion in determining that the public perception of Keyes Martin's business relationship with Reese Palley justified rejection of that agency's bid.
III.
In his dissent below, Judge Brody concluded that there may have been sufficient evidence of an impermissible relationship between Palley and Gaby but in rejecting Keyes Martin's bid, the Director followed an incorrect procedure. According to the dissent, when a dispute arises as to the moral integrity of a bidder, including, as alleged here, a conflict of interest, the Director should comply with the procedure for debarment or suspension of a bidder, as set forth in N.J.A.C. 17:12-7.1 to 17:12-7.11. Accordingly, Judge Brody would have remanded the case, instructing the Director to abide by those procedures.
Administrative regulations set forth a detailed system under which the Division of Purchase and Property may debar or *263 suspend a person or company. Both debarment and suspension involve the exclusion of the party from contracting with the Division. A suspension is an exclusion for a temporary period of time pending the completion of an investigation, while a debarment is an exclusion for an amount of time determined in accordance with the seriousness of the underlying wrongdoing. N.J.A.C. 17:12-7.1.
The causes for debarment and suspension are listed in N.J.A.C. 7:12-7.2. They include numerous serious offenses and statutory violations. The only arguably applicable provision appears in paragraph 12: A party shall be debarred or suspended due to "[a]ny other cause affecting responsibility as a state contractor of such serious and compelling nature as may be determined by purchase and property to warrant debarment * * *." In order to support a debarment, the existence of any such cause must be established by clear and convincing evidence. N.J.A.C. 17:12-7.3(a)5. In contrast, a suspension must be based on "adequate evidence that cause exists or upon evidence adequate to create a reasonable suspicion that cause exists." N.J.A.C. 17:12-7.6(a)3. Judge Brody found that the Director could have had a reasonable suspicion that Keyes Martin engaged in conduct that would have affected its responsibility as a state contractor and therefore could have suspended Keyes Martin pending the completion of an investigation. He felt that if suspicion existed such as would have warranted suspension, the Director was required to proceed in accordance with the notice and hearing requirements of N.J.A.C. 17:12-7.7.
For a number of reasons, we hold that under the circumstances of this case, the Director was not obligated to initiate debarment or suspension proceedings and acted properly in refusing to award the advertising contract to Keyes Martin. First, the Director did not base his award on suspicions of serious misconduct on the part of Keyes Martin that would affect its responsibility as a State contractor. A lack of a moral responsibility may disqualify a bidder, Trap Rock *264 Indus., supra, 59 N.J. 471, but no such contention or suggestion with respect to Keyes Martin is present in this case. Rather, the Director's decision was permissibly based on the adverse public impression that an award to Keyes Martin would have fostered. In fact, Keyes Martin was never found to have actually engaged in any wrongdoing. In his final decision, the Director specifically ruled that "Keyes Martin is not precluded from bidding on future non-Lottery State contracts, or, further, from bidding on future Lottery contracts when there is no member having a business relationship with the vendor." Thus, it is clear that the Director did not consider Keyes Martin's conduct to be sufficiently serious in nature to require imposition of the sanctions allowed under the regulation.
Moreover, the debarment and suspension regulations explicitly confirm the Director's ability to refuse to award a contract to a party in these circumstances. N.J.A.C. 17:12-7.11 provides that "[n]othing contained herein shall be construed to limit the authority of the Director of Purchase and Property to refrain from contracting within the discretion allowed by law." We take this to mean that in a given bidding situation, the power of the Director to determine, considering the public interest, whose bid will be most advantageous to the State is independent of the requirements under the debarment and suspension regulations. In this case the evaluated conduct of Keyes Martin permitted a rejection of its bid but did not require the initiation of debarment or suspension proceedings.
Additionally, we note that under N.J.A.C. 17:12-3.1 a bidder protesting an award by the Director is entitled to an informal hearing conducted by the Division. Keyes Martin requested and was granted exactly that. When a bid is rejected based on grounds or for reasons that are similar to those that could, under other circumstances, support debarment or suspension, the procedures followed must generate the same assurance that the public interest has been met as attends the conduct of debarment and suspension proceedings. It is clear *265 from the record in this case that the public interest was preserved and that Keyes Martin was accorded administrative due process in terms of a full and fair hearing at the agency level. See Commercial Cleaning Corp. v. Sullivan, supra, 47 N.J. at 550.
IV.
For the reasons set forth in the opinion, we reverse the judgment below and reinstate the final determination of the Director.
For reversal Chief Justice WILENTZ and Justices CLIFFORD, HANDLER, POLLOCK and GARIBALDI 5.
For affirmance None.
NOTES
[1] Keyes Martin's contract had been extended by six months to cover the bidding period.
[2] Palley was subsequently indicted by a State grand jury on charges of obstructing the Ethics Committee's investigation of his dealings with another prospective Lottery vendor, SynTech International, Inc.
On May 7, 1983, Palley was suspended from his position on the Lottery Commission by Governor Thomas H. Kean. On April 11, 1985, Palley admitted the violation of three provisions of the Code of Ethics in a consent agreement between Palley and the Executive Commission. He was also convicted of the obstruction charges, based upon a plea of guilty.
[3] It was also found that Keyes Martin did not afford China Interface favorable treatment based on Palley's position.
[4] By virtue of N.J.S.A. 52:18A-153, the duty to contract with respect to the construction or repair of public buildings had been transferred to the Division of Building and Construction.
[5] Subsequent to the Director's award in this case, the Lottery Commission promulgated a Code of Ethics for Vendors and Contractors. One provision of this Code prohibits vendors from "maintain[ing] any business relationship with any person who is a Lottery Commissioner, officer or employee." Although this Code of Ethics was not in effect when the facts of this case arose, its promulgation indicates that the policy of maintaining the public trust and confidence in the Lottery is the same for vendors as it is for commissioners. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265812/ | 341 Pa. Super. 12 (1985)
491 A.2d 123
AMALGAMATED COTTON GARMENT AND ALLIED INDUSTRIES FUND
v.
Bernard DION, Appellant.
Supreme Court of Pennsylvania.
Argued November 28, 1984.
Filed March 22, 1985.
*14 Stuart J. Agins, Philadelphia, for appellant.
Alan F. Markovitz, Philadelphia, for appellee.
Before WIEAND, MONTEMURO and CERCONE, JJ.
MONTEMURO, Judge:
This matter is before the court on the appeal of Bernard Dion from the lower court's order granting judgment on the pleadings in favor of appellee, Amalgamated Cotton Garment and Allied Industries Fund. The basis of the lower court's judgment was that, under the Pennsylvania Wage Payment and Collection Law (hereinafter "WPCL"),[1] appellant as an admitted officer of a corporation which had breached an agreement to make contributions to appellee, was individually liable for those contributions. Appellant raises two arguments in this appeal: (1) that the WPCL is preempted by federal law the Employee Retirement Income Security Act of 1974 (hereinafter "ERISA"),[2] and (2) that the WPCL cannot be construed to impose individual liability on the officer of a delinquent corporation. We find both of these arguments to be without merit.
The facts are as follows: Appellant was an officer and shareholder of Bee and Jay Sportswear, Inc. In accordance with a collective bargaining agreement, Bee and Jay Sportswear, Inc. was obligated to make weekly contributions to appellee, a multi-employer labor trust fund, which in turn was to provide fringe benefits to employees of Bee and Jay Sportswear, Inc. Bee and Jay Sportswear, Inc. breached its agreement with appellee, and failed to remit contributions in the amount of $19,474.18. As a result of this breach, an arbitration award was entered in favor of appellee and against Bee and Jay Sportswear, Inc. Unable to collect the arbitration award, appellee filed a complaint in the instant *15 action against appellant under the WPCL. In his answer,[3] appellant admitted that at the time relevant to these proceedings, he had been an officer and shareholder of Bee and Jay Sportswear, Inc. Appellee moved for judgment on the pleadings on the basis that the WPCL provided that officers of a delinquent corporation could be held personally liable as "employers." The lower court agreed, and granted judgment in favor of appellee.
We first address appellant's argument that the WPCL has been preempted by ERISA. That argument is quickly laid to rest, however, since appellant failed to raise this issue in the lower court. Matters not raised below will not be considered for the first time on appeal. Commonwealth v. Natl. Federation of the Blind, 471 Pa. 529, 370 A.2d 732 (1977). Furthermore, we note that had this issue been preserved, the Third Circuit Court of Appeals has found that the WPCL is not preempted by ERISA. Carpenters Health and Welfare Fund of Phila. and Vicinity v. Kenneth R. Ambrose, Inc., 727 F.2d 279 (3d Cir. 1983).
Appellant's second argument is that the WPCL cannot be construed to impose personal liability on the officer of a delinquent corporation. Although no appellate court in Pennsylvania has addressed this issue, it has been addressed on our trial level and by federal courts. See Ward v. Whalen, 18 Pa. D & C 3d 710 (1981); Carpenters Health v. Ambrose, Inc., supra; Amalgamated Cotton Garment and Allied Industries Fund v. J.B.C. Company of Madera, Inc., 608 F. Supp. 158 (W.D.Pa. 1984); In re Johnston, 24 B.R. 685 (B.C.W.D.Pa. 1982). These cases have all held that the WPCL imposes personal liability on officers for unpaid benefit contributions.[4]
*16 Appellant's argument is far-fetched. The relevant provisions of the WPCL are: § 260.9a(b), which permits employees or a labor organization to whom any type of wages is payable, to maintain an action for recovery of such unpaid wages; and § 260.2a, which defines "wages" to include fringe benefits, and "employer" to include "every person, firm, partnership, association, corporation, receiver or other officer of a court of this Commonwealth and any agent or officer of any of the above-mentioned classes employing any person in this Commonwealth." (emphasis added).
Appellant first tries to create an ambiguity in § 260.9a(b)[5] by pointing out that, while that action gives employees and labor organizations the right to recover unpaid wages, it does not specify against whom such an action may be brought. Appellant asserts that the term "employer" cannot be understood as the intended object of liability in § 260.9a(b), but that that section can only be interpreted to create liability against a corporation, and not against an officer thereof. Appellant "bolsters" this interpretation by directing our attention to subsections (c), (d), and (e) of § 260.9a. These subsections pertain to the right of the Secretary of Labor and Industry to bring an action on behalf of the employees, or labor organization, and conspicuously states that the claim is against an "employer." Appellant feels that the omission of the term "employer" from subsection (b) was intentional in light of the exact reference to "employer" in subsections (c), (d), and (e).
We must assume that the legislature intended a reasonable result in constructing a statute. McKinney v. *17 Board of Commissioners of Allegheny County, 488 Pa. 86, 410 A.2d 1238 (1980). Since it is clear that the employees or labor organization may inform the Secretary of Labor and Industry of the delinquency, thereby giving the Secretary the power to pursue the claim against the employer, it is ludicrous to suggest that a claim brought directly by the employees or labor organization themselves is not likewise a claim against the employer. It is undeniable that the definition of "employer" encompasses an officer of the corporation, thus, we construe the WPCL to impose liability here on the officer of a delinquent corporation. We find no support for appellant's desperate interpretation that the employees or labor organization may bring an action only against the corporation.
Accordingly, we affirm the order of the court below.
NOTES
[1] Act of July 14, 1961, P.L. 637, § 1 et seq., 43 P.S. § 260.1 et seq.
[2] 29 U.S.C. § 1001 et seq.
[3] The complaint was amended, and the appellant's answer was in response to the amended complaint.
[4] The federal cases have interpreted the WPCL to impose such liability on only the highest ranking corporate officers. We are not asked to determine whether "officer" under the WPCL should be limited to only the highest ranking corporate officers. Appellant contends rather, that the WPCL cannot be interpreted to impose liability on any officer.
[5] 43 P.S. § 260.9a(b) provides:
(b) Actions by an employe, labor organization, or party to whom any type of wages is payable to recover unpaid wages and liquidated damages may be maintained in any court of competent jurisdiction, by such labor organization, party to whom any type of wages is payable or any one or more employes for and in behalf of himself or themselves and other employes similarly situated, or such employe or employes may designate an agent or representative to maintain such action or on behalf of all employes similarly situated. Any such employe, labor organization, party, or his representative shall have the power to settle or adjust his claim for unpaid wages. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1726359/ | 735 N.W.2d 204 (2007)
IN RE MARRIAGE OF TURNER
No. 06-1039.
Court of Appeals of Iowa.
May 23, 2007.
Decision without published opinion. Affirmed in Part, Reversed in Part, and Remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368705/ | 273 S.E.2d 800 (1981)
Robert MIDDLETON et al.
v.
Brice JOHNSTON, Jr. et al.
Record No. 790035.
Supreme Court of Virginia.
January 16, 1981.
*801 A. Dow Owens, Pulaski, for appellants.
William R. L. Craft, Jr., Christiansburg (Craft & McGhee, P. C., Christiansburg, on brief), for appellees.
Before I'ANSON, C. J., and CARRICO, HARRISON, COCHRAN, POFF, COMPTON and THOMPSON, JJ.
COMPTON, Justice.
In this appeal of an equity suit involving adjoining landowners, we consider whether a right of way by necessity has been established.
In June of 1973, appellees Brice Johnston, Jr., and M. Teresa S. Johnston, his wife, plaintiffs below, filed a bill of complaint against appellants Robert Middleton and Fred Cook, defendants below. Also sued were Horace Strickler and Harry Strickler, trading as Strickler Brothers. Plaintiffs own a 98-acre parcel of land situated in Pulaski County near Claytor Lake. The parcel lies generally south of Hiwassee and east of the New River.
Plaintiffs alleged that in 1972 Middleton and Cook acquired a tract of land south of and adjacent to plaintiffs' parcel. Plaintiffs asserted that in December of that year Middleton and Cook, through their agent, Strickler Brothers, constructed on the land of plaintiffs a road running from defendants' property north to State Route 692, an east-west secondary road. Plaintiffs charged defendants with trespass, sought an injunction prohibiting further intrusion, and claimed defendants were liable for compensatory as well as punitive damages.
In their answer, Middleton and Cook, denying they had committed any wrong, asserted they had, "either by deed or by usage, a right of way and easement over the lands of [plaintiffs] to reach the lands owned by [Middleton and Cook]." Strickler Brothers' answer contained a general disclaimer of liability.
The cause was referred to a commissioner in chancery in 1973. He conducted hearings annually in January of 1974, July of 1975, and April of 1976. In June of 1977, he filed a report that was based on his search of the land records in the clerk's office of the court below, the testimony, and the exhibits introduced during the hearings.
The commissioner found that previously the litigants' adjoining lands, generally unimproved mountainous territory, had been owned by a common grantor, W. R. Cole. The commissioner reported that in 1887 Cole conveyed a portion of his land to one David S. Forney, a predecessor in title to defendants Middleton and Cook, at which point the Forney land was surrounded by the remaining land of Cole and by property of strangers. The commissioner also reported that in 1894 Cole conveyed the subject 98-acre tract to one L. S. Simpkins, a predecessor in title to plaintiffs. The Forney deed made no reference to easements or rights of way.
The commissioner found, in addition, that during 1918 defendants' predecessors in title constructed what witnesses referred to as a "logging road," the course of which has been generally followed by the road in question. He determined that the logging road was created by virtue of an agreement between the predecessors in title of both plaintiffs and defendants for the removal of *802 timber by the parties and that the logging road had been used by defendants' antecedents, and some other persons, since 1918.
The commissioner concluded that, because utilization of the logging road had been permissive, Middleton and Cook had not established a right of way "by usage," as asserted in their answer. He also decided that because no conveyance, either in evidence or of record in the clerk's office, provided for an easement appurtenant to defendants' land over that of plaintiffs, defendants had not proved they had a right of way "by deed," as asserted in their answer.
The commissioner further concluded, however, that defendants were entitled to an easement by necessity. He found there was clear and convincing evidence that no means of ingress and egress existed from defendants' property except across plaintiffs' land or the land of strangers. He stated that even though "there was some evidence [of] another means of access" to defendants' property and even though the deed from Cole to Simpkins granted him an easement through Cole's land, there was no evidence "that either of these are in existence or were ever available" to defendants or their predecessors in title. The commissioner also found that clearing and grading of the road, as undertaken by defendants, had not exceeded their rights to use of the easement.
Plaintiffs excepted to that portion of the report which found existence of an easement by necessity and defendants objected to the commissioner's refusal to find that a right of way "by usage" had been established. In a memorandum of law to the chancellor, plaintiffs pointed out defendants had not alleged in their responsive pleadings that they were entitled to an easement by necessity and, in addition, contended the evidence was insufficient to establish such a right. Plaintiffs' attorney asserted that because necessity was not pleaded, he had not presented evidence on that issue and a finding on that subject had taken him by surprise. As a result, the trial court permitted additional evidence to be taken on necessity.
The fourth hearing was conducted by the commissioner in April of 1978. One of the plaintiffs and two plaintiffs' witnesses testified. The commissioner filed an additional report, concluding that the supplemental evidence did not alter his original determination that a way of necessity had been established.
He found there was "another roadway" leading from a second State road, Route 693, across property of one Dickerson to defendants' property. The Dickerson land lies roughly west of and adjacent to defendants' property. At this location, Route 693 is a generally north-south secondary road running parallel, on the west side, to tracks of the Norfolk & Western Railway Company, which are just west of the Dickerson property. This other "roadway," the commissioner found, has been "used by unknown parties for a number of years and appears to have been used by predecessors in title to the defendants' land." But the commissioner also said "[n]o evidence was presented that defendants had a granted right or a right by usage across the Dickerson property."
Plaintiffs excepted to the additional report contending, inter alia, the commissioner had misplaced the burden of proof. Subsequently, the chancellor sustained plaintiffs' exceptions. In a memorandum opinion the court below ruled the burden was upon defendants to prove they have no other access to their property, and was not upon plaintiffs to prove that defendants have other access to their land in addition to the road in question over property of plaintiffs to Route 692. The trial court held that defendants failed to show "their land never had a right of way by prescription or otherwise out to Public Road 693 or that, if at one time they did have such access, the same had terminated."
Thereafter, the parties having stipulated damages, the final decree was entered in October of 1978. In that order, the trial court disapproved the commissioner's reports as to the easement-by-necessity question and sustained them in all other respects. Defendants were enjoined from *803 further encroachment and use of plaintiffs' property. In accordance with the stipulation, plaintiffs were awarded $500 in damages against all defendants as a result of the trespass and road construction. In addition, the final order assessed the taxable costs of the litigation, including the commissioner's fee, against defendants Middleton and Cook, to whom we awarded this appeal. Strickler Brothers has not sought review of the judgment below.
Even though defendants on appeal contend the trial court erred in failing to find that the evidence established a right of way over plaintiffs' land by "usage" and "adverse possession," they do not vigorously argue in support of that position, and properly so. All of the evidence indicated permissive use of the logging road at the time of and after its creation in 1918. Thus, the dispositive question before us, as we have already indicated, is whether defendants acquired a right of way by necessity over plaintiffs' tract as a means of ingress and egress to and from State Route 692.
Settled principles pertinent to this case should be reviewed. A right of way by necessity arises from an implied grant or implied reservation. Stated differently, it is an easement implied upon a conveyance of real estate. To establish such a right, the alleged dominant and servient tracts must have belonged to the same person at some time in the past. The right is based upon the idea that whenever one conveys property, he conveys that which is necessary for the beneficial use of the land and retains that which is necessary for the beneficial use of the property he still possesses. Fones v. Fagan, 214 Va. 87, 90, 196 S.E.2d 916, 918 (1973); Keen v. Paragon Jewel Coal Co., 203 Va. 175, 178, 122 S.E.2d 543, 546 (1961); Jennings v. Lineberry, 180 Va. 44, 48, 21 S.E.2d 769, 771 (1942); 1 Minor on Real Property § 98 at 134 (2d ed. F. Ribble 1928).
Thus, in the case of an implied grant, an easement is acquired by a grantee over the grantor's property when the land conveyed is either entirely surrounded by property of the grantor or else is bordered in part by the land of a stranger and in part by lands of the grantor. Under either situation, the grantee obtains a way of necessity over the grantor's property because otherwise the land conveyed would be inaccessible and useless. Minor at 133.
In Virginia, contrary to the rule in some other jurisdictions, a showing that the way is reasonably necessary to the enjoyment of the dominant estate is all that is required; some courts hold that absolute physical necessity must be established. Jennings v. Lineberry, 180 Va. at 48, 21 S.E.2d at 771. And such reasonable necessity must be proven by clear and convincing evidence. Fones v. Fagan, 214 Va. at 90, 196 S.E.2d at 918. Clear and convincing evidence is that degree of proof which will produce in the mind of the trier of facts a firm belief as to the allegations sought to be established. Such measure of proof is intermediate, more than a mere preponderance but less than is required for proof beyond a reasonable doubt; it does not mean clear and unequivocal. Fred C. Walker Agency v. Lucas, 215 Va. 535, 540-41, 211 S.E.2d 88, 92 (1975).
Further, a way of necessity will not be established if there is another way of access, although less convenient and will involve some labor and expense to develop. Chaiken v. Harry J. O'Meara Tile Co., 212 Va. 510, 513, 184 S.E.2d 746, 749 (1971).
As we move to the issues in this case, there is no dispute that at one time the respective properties of these litigants were owned by a common grantor and that, after the initial conveyance, the land of defendants' predecessors in title was surrounded by the remaining property of the original grantor and by the lands of strangers. Also, it is uncontroverted that subsequently the original grantor disposed of his remaining land, a portion of which is now owned by plaintiffs. In addition, the evidence is clear that a passageway in the form of a logging road was open and used for a number of years for the benefit of the alleged dominant tract over the alleged servient tract. Also, the facts show that some outlet *804 from defendants' land is reasonably necessary. Thus, all of the essential elements for establishment of a way of necessity, under the circumstances of this case, are present unless the dominant tract has another means of access, though less convenient and more expensive to develop. Consequently, the ultimate question in this case involves the existence of such other means of access in fact and law.
At the threshold, an issue arises as to the placement of the burden of proof on the subject of access. Defendants contend the trial court erred in requiring them to prove they had no other means of access to their property. Arguing they were forced to prove a negative, defendants say "the nonexistence of something is impossible to prove." We think the chancellor correctly fixed the burden.
We have previously said, inferentially, that the burden to prove lack of other means of ingress and egress rests upon the party seeking to establish a right of way by necessity, see Chaiken v. Harry J. O'Meara Tile Co., 212 Va. at 513, 184 S.E.2d at 749; now, we explicitly so hold. Indeed, to decide otherwise would be to say that the party having the affirmative of an issue does not have the burden to prove each and every essential element of his case. Such a ruling would be illogical and contrary to settled principles of trial procedure.
But, in an alternative argument, defendants contend that if the threshold issue is decided against them, they have nevertheless proved by clear and convincing evidence that there is no other means of access to their property except over the land of plaintiffs.
This brings us to the evidence again, and to a consideration of our standard of review of the factual findings below under the procedural posture of this case. As to the issue of a way by necessity, the chancellor disapproved the reports of the commissioner in chancery. Consequently, we must review the evidence on that subject and ascertain whether, under a correct application of the law, the evidence supports the finding of the commissioner or the conclusions of the trial court. First National Bank of Martinsville v. Cobler, 215 Va. 852, 854, 213 S.E.2d 800, 802 (1975).
Because of the manner in which the issues were initially framed, the evidence presented during the first three hearings mainly dealt with the origin of the logging road, the actions of the inhabitants of the respective parcels with relation to it, the manner of the early use of the road, the purpose of the original use, and the conduct of the defendants since December of 1972 in expanding the size of the original way to accommodate vehicular traffic.
During those three hearings, however, the defendants offered evidence which was pertinent to the issue of other access to defendants' property. For example, Thornton Allison, apparently a life long resident of the immediate area whose family had owned defendants' property, testified the logging road "was the only way we had of getting in there," referring to defendants' land. Allison, born in 1906, testified repeatedly that he knew of no other road or means of access to defendants' land. Buster Quesenberry, born in 1901, testified he lived as a tenant, farming and cutting timber, for about three years beginning in 1930 on the property now owned by defendants. He said the logging road was "the only way you can get in there," and there was no other road into defendants' property at that time.
During the fourth hearing, plaintiff Brice Johnston, Jr., presented a sketch depicting the disputed way running from defendants' land north through plaintiffs' property to Route 692 and another road leading from defendants' land west through the Dickerson tract to Route 693. Johnston also introduced into evidence a series of 13 photographs taken by him nine days before the fourth hearing in the presence of Dora Simpkins, who had previously testified for plaintiffs. These photos were taken along the route of the other roadway at regular intervals leading in a generally westerly direction from a point on defendants' property where this "other roadway" intersected the logging road in question. They show a *805 clearly defined road from defendants' property through mountainous terrain to the railroad right of way and Route 693.
Mrs. Simpkins, born in 1905, and her husband conveyed the subject parcel to plaintiffs in 1964. She had continued to reside on the property to the time of the hearings, having lived there "on and off" since 1912. She confirmed the existence of the "other roadway" from Route 693 into defendants' property as shown in the photographs. She testified the road "was there when I come to this country and that was sixty-six years ago." She also said the way "used to be a right good road" and was presently a "very old roadbed" which had not been used for 15 or 16 years except by "people just walking on it, pleasure tripping." She also testified both roads were used as means of access to defendants' property, one out to Route 692 and the other out to Route 693. She stated that actually the two ways constituted one continuous road between Routes 692 and 693 through plaintiffs', defendants' and Dickerson's property.
Plaintiffs also called the Chief Forest Warden for Pulaski County who testified to the existence of the "other" road.
As found by the commissioner in his second report, the evidence was clear of another roadway leading from Route 693 across the Dickerson property into defendants' land which, according to the commissioner's finding, had been used by unknown parties for years and apparently "by predecessors in title to the defendants' land." Under such circumstances, it was incumbent upon defendants in discharging their ultimate burden to show by clear and convincing evidence that, as the chancellor said, the owners of their land never had a right of way by prescription or otherwise out to Route 693 or that, if such right existed at one time, it had since been terminated. While defendants offered evidence that the logging road was "the only way" to and from defendants' land, such testimony was insufficient as a matter of law, in the face of the evidence of another way, to produce in the mind of the trier of facts a firm belief as to defendants' allegation of lack of other access.
In Chaiken v. Harry J. O'Meara Tile Co., supra, a similar situation existed as to access. We held O'Meara had not sustained the required burden to prove an easement by necessity over property of Chaiken. The evidence showed former access for over 20 years from O'Meara's land to Black Lick Road by another way that was either on railroad property, on the Chaiken tract, or partly on both. We said, "No explanation or proof was offered by O'Meara, upon whom the burden rested, to show when this means of ingress and egress had been terminated if it had, in fact, been terminated." 212 Va. at 513, 184 S.E.2d at 749.
For these reasons, we hold the trial court correctly decided defendants failed to sustain their burden to prove by clear and convincing evidence a right of way by necessity over plaintiffs' land. Accordingly, the decree appealed from will be
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368728/ | 742 P.2d 1203 (1987)
Floyd WEBSTER, Plaintiff and Respondent,
v.
Mary LEHMER and Charles Lehmer, Defendants and Appellants.
No. 19339.
Supreme Court of Utah.
April 8, 1987.
Rehearing Denied September 28, 1987.
Robert S. Campbell, E. Barney Gesas, Salt Lake City, for appellants.
James J. Smedley, Heber City, for respondent.
STEWART, Associate Chief Justice:
Defendant Mary Lehmer appeals the judgment of the district court rescinding a real estate contract executed by Lehmer and her husband as purchasers and plaintiff Floyd Webster as seller.[1] The trial court entered a decree rescinding the contract based on mutual mistake, unilateral *1204 mistake, and undue influence in the abuse of a confidential relationship between the parties. We affirm the finding of undue influence and, therefore, do not reach the other issues.
I.
In 1948, Webster and his wife obtained by quitclaim deed a house situated on a parcel of property located along what was Heber Avenue and what is now Deer Valley Road in Park City, Utah. Webster lived in the house for nearly thirty-three years and paid the property taxes for nearly that long. Webster treated the parcel of property as his own, but he did not own the underlying fee interest.
Several other persons also occupied land located in the same general area on the same basis. The fee interests to most of these properties, including most of Webster's, were owned by United Park City Mining Company until 1971 when they were purchased by Royal Street Land Company (Royal Street). Some of the fee interests, including a small portion of Webster's parcel, were owned by the Bureau of Land Management (BLM).
Mary Lehmer, an attorney, acquired the right to occupy a parcel of land immediately adjacent to Webster's. The fee to this parcel was owned by Royal Street. Beginning prior to 1972, Mary Lehmer researched the issue of adverse possession to learn what she had to do to obtain clear title to the fee. Armed with this knowledge, and apparently having met the requirements for adverse possession of her parcel, Lehmer, in 1979, threatened Royal Street with a lawsuit to quiet title to the underlying fee to her parcel unless Royal Street would agree to accept $2,000 in exchange for a warranty deed conveying the fee interest to Lehmer. That price amounted to less than ten cents per square foot. Royal Street asked for $10,000 but ultimately accepted Lehmer's offer and transferred clear title to the property for $2,000.
Lehmer testified that she attempted to educate her neighbors concerning their legal rights to the underlying fee interests and that she encouraged them to join together to fight Royal Street. Her neighbors looked to her as an authority on the subject because she was an attorney and had done research on the subject. One neighbor, Neil Clegg, specifically remembered a spontaneous meeting of neighbors at Lehmer's house where Lehmer explained, at the neighbors' request, their rights to the properties. Clegg testified that Webster attended part of that meeting.
During the late 1970s and early 1980s, Royal Street had an unwritten policy of selling to the occupants of the land the fee interests underlying their properties for fifty cents per square foot, apparently because of the potential rights the occupants had as adverse possessors. Several of the occupants took advantage of this policy, purchased the underlying fee interests, and later sold their properties for substantial profits made possible by sharply escalated land values resulting from the development of the Deer Valley ski resort in the area. The evidence at trial showed that the fee interests to some of these lots that were comparable in size to Webster's sold for between $240,000 and $410,000.
Lehmer was aware of the Royal Street policy to sell for fifty cents per square foot. Webster was aware of the Royal Street policy, but he thought his property was owned by the BLM. He thought so because he knew that some of his neighbors occupied BLM land. Webster did nothing to determine conclusively the correct ownership of the underlying fee. Lehmer, however, knew that Webster's lot was owned by Royal Street.
During the years the Websters and the Lehmers were neighbors, they exchanged friendly service for advice. Webster helped the Lehmers with household repairs, for which he was sometimes paid. Lehmer, at times, offered legal advice and assistance. For example, prior to Mrs. Webster's death in 1975, Lehmer helped Mrs. Webster prepare an answer to a complaint that had been filed against Mrs. Webster. Later, a few years after Mrs. Webster died, Floyd Webster asked Lehmer for legal advice concerning his property. Lehmer reviewed *1205 Webster's documents of title to determine how long he had been on the property for adverse possession purposes and what kind of claim Webster had to the property.
In October of 1980, Webster was unemployed, the water and gas to his house had been cut off, and the property taxes had been in arrears for almost four years. Webster also had a drinking problem, and his driver's license had been revoked because of an arrest on a drunken driving charge. The trial court found that because of these factors and others, Webster had a depressed and despondent state of mind.
While Webster was walking along the road in front of Lehmer's house on October 7, 1980, Lehmer asked Webster in. She and her husband offered to purchase Webster's interest in the property for $5,000 and to let Webster retain a life estate in the house so that he would have a place to live. Webster accepted the offer, and Lehmer immediately drafted a hand-written contract. Webster and Mr. and Mrs. Lehmer signed the contract. The $5,000 purchase price was to be paid in full when Webster tendered to the Lehmers a quitclaim deed. The contract further provided that Lehmer would pay for a survey to obtain a legal description of the property and that Webster would pay the property taxes as long as he occupied the property.
Because of Webster's financial problems, he sought advancements of the purchase price from the Lehmers. The Lehmers willingly advanced $900 in several payments to Webster. On December 21, 1980, Webster visited Lehmer to obtain one of these advances. At that time, Webster planned to get married and move to Heber City. Lehmer suggested that under those circumstances, Webster would no longer need his life estate in the house. He agreed, and Lehmer immediately prepared a hand-written agreement terminating Webster's life estate. This agreement was drafted on the reverse side of the same piece of paper containing the original October 7, 1980, agreement. In return for Webster's relinquishment of his life estate, the Lehmers agreed to pay the unpaid water, sewer, and scavenger charges of $356.20, the 1980 property taxes on Webster's house, and the legal expenses and recording fees necessary to terminate Mrs. Webster's joint tenancy interest in the home. Lehmer also prepared and typed an "Affidavit to Terminate Joint Tenancy." This was signed by Webster and by Lehmer as notary public. The affidavit was intended to document the fact that since Webster had survived his wife, her interest in the house had devolved upon him. A $25 attorney fee for drafting the affidavit was listed in Lehmer's records concerning Webster's property and was among the total fees the trial court found Lehmer had paid in consideration for the termination of Webster's life estate.
It was later determined that the purchase contract was not effective in transferring all Webster's interest in the property to the Lehmers. Lehmer mistakenly read the deed which granted the interest to Webster and his wife as creating a joint tenancy, when in fact it created a tenancy in common. Thus, when Mrs. Webster died intestate in 1975, her interest, instead of passing solely to Mr. Webster, passed by the rules of intestate succession to Webster and Webster's two daughters. Obviously he could not transfer his daughters' interests.
II.
Before we address the confidential relationship issue, we must dispose of another argument advanced by Lehmer. She argues that the trial court prejudicially erred when it admitted evidence concerning the market value of the undivided fee interest when Webster owned the rights of an adverse possessor and not the undivided fee. Lehmer produced evidence that Webster's interest was worth at most what Lehmer paid Webster for it.
Given the totality of the circumstances, however, it was proper for the trial court to consider the value of the undivided fee. Lehmer admitted that she acquired absolute title to her property by threatening Royal Street with an adverse possession lawsuit. She also testified that *1206 she advised other similarly situated occupants of the land in the area concerning their adverse possession claims. She specifically recalled a time after Mrs. Webster died when she looked at Webster's quitclaim deed to see if he had been on the property long enough to advance an adverse possession claim. Webster had lived on the parcel for thirty-three years when he sold his rights to the Lehmers and he had paid the taxes. Therefore, there is a real possibility that, like Lehmer, Webster also had claim to the underlying fee by adverse possession. See U.C.A., 1953, §§ 78-12-7 to -15. It is also clear that Lehmer was aware of the potential of Webster's claim. Of course, we express no opinion on what the outcome of an adverse possession claim by Webster would be, but it is clear that Webster's property interest was possibly quite substantial. Lehmer would have obtained whatever adverse possession rights Webster had in the property and thus would have been in a position to force Royal Street's hand once again.
Further, Lehmer was well aware of the Royal Street policy to sell the underlying fee titles to the occupants of the land for fifty cents per square foot. She also knew that Webster's parcel was owned by Royal Street, whereas Webster thought it was owned by the BLM. Lehmer's purchase of Webster's rights thus gave her the chance to purchase the underlying fee from Royal Street for a discount from its market value.
Lehmer purchased Webster's whole bundle of rights, whatever they were, for $5,000, when the trial court found that the underlying fee had a potential value of between $240,000 and $410,000. Thus, under the circumstances, we cannot say that it was error for the trial court to admit evidence of the potential value of the undivided fee.
III.
The most crucial issue in the case is whether the trial court correctly concluded that a confidential relationship existed between Webster and the Lehmers. "A confidential relationship arises when one party, having gained the trust and confidence of another, exercises extraordinary influence over the other party." Von Hake v. Thomas, 705 P.2d 766, 769 (Utah 1985).
The doctrine of confidential relationship rests upon the principle of inequality between the parties, and implies a position of superiority occupied by one of the parties over the other. Mere confidence in one person by another is not sufficient alone to constitute such a relationship. The confidence must be reposed by one under such circumstances as to create a corresponding duty, either legal or moral, upon the part of the other to observe the confidence, and it must result in a situation where as a matter of fact there is superior influence on one side and dependence on the other.
Bradbury v. Rasmussen, 16 Utah 2d 378, 383, 401 P.2d 710, 713 (1965) (footnotes omitted). Whether a confidential relationship exists is a question of fact. Von Hake, 705 P.2d at 769; Blodgett v. Martsch, 590 P.2d 298, 302 (Utah 1978). However, a confidential relationship is presumed between an attorney and a client. Baker v. Pattee, 684 P.2d 632, 636 (Utah 1984).
If a confidential relationship is found, "any transaction that benefits the party in whom trust is reposed is presumed to have been unfair and to have resulted from undue influence and fraud." Von Hake, 705 P.2d at 769. See also Cunningham v. Cunningham, 690 P.2d 549, 553 (Utah 1984); Bradbury, 16 Utah 2d at 383 n. 4, 401 P.2d at 713 n. 4. The party in whom trust is reposed must then come forward and prove that the transaction was fair, or it will be undone. Von Hake, 705 P.2d at 769; Cunningham, 690 P.2d at 553; Bradbury, 16 Utah 2d at 383 n. 4, 401 P.2d at 713 n. 4; In re Swan's Estate, 4 Utah 2d 277, 293, 293 P.2d 682, 693 (1956). Finally, the findings of the trial court on these specific questions of fact will be given considerable deference and will only be reversed if clearly erroneous. Utah R.Civ.P. 52(a) (as amended effective January 1, 1987); Ashton v. Ashton, 733 P.2d 147, 150 (Utah 1987).
*1207 Ample evidence exists to sustain the finding of the trial court that a confidential relationship existed between Lehmer and Webster. Lehmer argues that she was merely a neighbor and friend to Webster and asserts that that is not enough to support a finding of a confidential relationship. However, it is clear that much more existed between the parties. Lehmer counseled Webster and his wife at least twice, not in the capacity of a neighbor, but in the capacity of an attorney. Further, when Lehmer prepared the contracts involved in this case, she was acting not only as buyer, but was also utilizing her expertise as an attorney. Webster testified that he knew nothing about the legal aspects of the transaction but that he trusted Lehmer because she was an attorney and that he relied upon her expertise. Webster did not believe she would be unfair. Lehmer admitted that Webster had probably viewed her as his attorney when he had previously sought her legal advice. The trial court specifically found that Webster was incapable of understanding the legal impact of the contracts. Consistent with these attorney-client indicia, Lehmer included her attorney fees for drafting the "Affidavit to Terminate Joint Tenancy" as part of the consideration paid for the property.
Lehmer was also well aware of the potential adverse possession claims Webster and all other similarly situated occupants of land had against Royal Street Land Company and was aware, because of the purchase she made of her parcel, that clear title to the underlying fee interest could have been purchased at a substantial discount from its actual market value. Lehmer also knew that Webster's property was owned by Royal Street, whereas Webster thought the BLM owned his property. Further, when the contract was executed, Webster was in dire financial straits and was found by the trial court to be depressed and despondent.
These facts, coupled with the fact that Lehmer purchased Webster's rights for $5,000, which she knew could have easily blossomed into $240,000 to $410,000, support the trial court's finding of a confidential relationship and suggest strongly that the parties were on unequal ground and that Lehmer had a position of dominance over Webster.
Accordingly, a presumption of undue influence was established, and the burden shifted to Lehmer to prove that the transaction was fair. Lehmer has failed to carry that burden. Her evidence that Webster's rights were worth less than or about what she had paid for them was argued below and rejected, and we refuse to invade the trial court's right to find the facts when they are in conflict.
Affirmed. Costs to respondent.
HALL, C.J., HOWE, J., and CULLEN Y. CHRISTENSEN, District Judge, concur.
DURHAM, Justice: (concurring in the result).
I concur in the result reached by the majority, but only because of the evidence that an attorney-client relationship existed between Lehmer and Webster. Although we will not overturn a trial judge's finding of fact under Utah Rule of Civil Procedure 52(a) unless we conclude that it is "clearly erroneous," the facts here present a very close case as to whether a confidential relationship existed between Webster and Mrs. Lehmer. As we said in Von Hake v. Thomas, 705 P.2d 766, 769 (Utah 1985):
The law presumes that one ordinarily makes his or her own judgments, however imperfect, and acts on them; it does not readily assume that one's will has been overborne by another. Therefore, the law does not lightly recognize the existence of a confidential relationship.
In Von Hake, we found that the evidence was insufficient to support the jury's finding that a confidential relationship existed between Von Hake and one Thomas, despite the fact that Thomas had clearly induced Von Hake, an aged man under great financial pressure, to believe that Thomas was only interested in "saving" Von Hake's ranch, when in fact quite the contrary was true. In the present case, Lehmer's dealing with Webster over the actual sale is in many ways analogous to that of *1208 Thomas toward Von Hake, although Lehmer's conduct does not rise to the level of actual fraud, as did Thomas's.
On the other hand, in finding that a confidential relationship was not established in Von Hake, we specifically noted that there had been no proof of a "long-established relationship of trust" between Von Hake and Thomas that preceded their dealings. Thomas's relationship to Von Hake was not "one that traditionally imposes a fiduciary duty, such as an attorney/client relationship." 705 P.2d at 770. In my view, the trial court's finding that a confidential relationship existed between Lehmer and Webster can be affirmed only because there is evidence that would support a finding that Lehmer acted as Webster's attorney in this transaction. See In re Swan's Estate, 4 Utah 2d 277, 293 P.2d 682 (1956). Absent that relationship, a trial court finding of a confidential relationship could not be sustained merely upon evidence that the two parties lived near each other, had a neighborly relationship, and one of them, at least in the eyes of the other, had a certain measure of expertise. These facts, standing alone, show nothing more than the unequal bargaining positions which are common in any contractual relationship and for which the law does not give a remedy. Given the drastic consequences a finding of a confidential relationship has for the parties to a contract, we should be very careful in defining the circumstances under which such a relationship can be found to exist.
ZIMMERMAN, J., having disqualified himself, does not participate herein; CHRISTENSEN, District Judge, sat.
NOTES
[1] By the time of trial, Mr. Lehmer had died. Therefore, unless specifically indicated otherwise, any reference to "Lehmer" herein means Mary Lehmer only. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/999873/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 99-4141
JOSEPH GORRELL PIERCE,
Defendant-Appellant.
Appeal from the United States District Court
for the Middle District of North Carolina, at Durham.
Frank W. Bullock, Jr., Chief District Judge.
(CR-98-250)
Submitted: September 30, 1999
Decided: October 8, 1999
Before NIEMEYER, WILLIAMS, and MICHAEL, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Louis C. Allen, III, Federal Public Defender, John A. Dusenbury, Jr.,
Assistant Federal Public Defender, Greensboro, North Carolina, for
Appellant. Walter C. Holton, Jr., United States Attorney, Lisa B.
Boggs, Assistant United States Attorney, Greensboro, North Carolina,
for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Joseph Gorrell Pierce pleaded guilty to being a felon in possession
of a firearm, 18 U.S.C.A. § 924(g) (West Supp. 1999), and was sen-
tenced to twenty-seven months in prison. Pierce appeals his sentence.
Counsel has filed a brief in accordance with Anders v. California, 386
U.S. 738 (1967), asserting that the district court erred when it denied
Pierce's motion for a downward departure but stating that, in his
view, there are no meritorious grounds for appeal. Pierce was advised
of his right to file a pro se supplemental brief, but has not filed a brief.
Having thoroughly reviewed the record in accordance with Anders
and finding no merit in the argument raised by counsel, we affirm.
Pierce was convicted in 1985 of conspiracy to use explosives to
damage or destroy buildings in interstate commerce. He was sen-
tenced to forty-two months in prison for this offense. Subsequently,
in 1995 Pierce purchased a Ruger .45 caliber revolver.
Pierce pleaded guilty to being a felon in possession of a handgun.
His probation officer calculated an offense level of 17 and a criminal
history category of II, with a resulting guideline range of 27-33
months. Pierce moved for a downward departure on the basis that he
purchased the revolver in the good-faith belief that his right to possess
a firearm had been reinstated. The district court denied the motion,
finding that the facts warranted a sentence at the low end of the guide-
line range but did not remove this case from the heartland of similar
cases.
A district court's decision not to grant a motion for downward
departure is not reviewable on appeal unless the court erroneously
believed that it lacked the authority to depart. See United States v.
Bayerle, 898 F.2d 28, 30-31 (4th Cir. 1990). Here, the district court
clearly recognized its authority to depart, but found it inappropriate
to do so. Therefore, Pierce's claim lacks merit.
2
As required by Anders, we have independently reviewed the entire
record and all pertinent documents. We have considered all possible
issues presented by the record, and conclude that there are no non-
frivolous grounds for appeal. Pursuant to the plan adopted by the
Fourth Circuit Judicial Council in implementation of the Criminal
Justice Act of 1964, 18 U.S.C. § 3006A (1994), this court requires
that counsel inform his client, in writing, of his right to petition the
Supreme Court for further review. If requested by the client to do so,
counsel should prepare a timely petition for writ of certiorari. If coun-
sel believes that such a petition would be frivolous, counsel may
move in this court to withdraw from representation at that time. Coun-
sel's motion must state that a copy thereof was served on his client.
We dispense with oral argument because the facts and legal conten-
tions are adequately presented in the materials before the court and
argument would not aid the decisional process.
AFFIRMED
3 | 01-03-2023 | 07-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369484/ | 175 S.W.3d 29 (2005)
Juan DeLaGARZA, Appellant,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellee.
No. 05-04-00829-CV.
Court of Appeals of Texas, Dallas.
July 14, 2005.
Rehearing Overruled November 3, 2005.
*30 Charles L. Hoedebeck, Charles L. Hoedebeck, P.C., Irving, for Appellant.
J. Mark Hansen, Vial Hamilton Koch & Knox, Dallas, for Appellee.
Before Justices MORRIS, FRANCIS, and LANG-MIERS.
OPINION
Opinion by Justice MORRIS.
In this appeal from a summary judgment, Juan DeLaGarza appeals the trial court's adverse judgment on his claims for damages and attorney's fees under former article 21.55 of the Texas Insurance Code[1] and his claim for attorney's fees under section 38.001 of the Texas Civil Practice and Remedies Code. DeLaGarza argues there are material fact issues regarding State Farm Mutual Automobile Insurance Company's liability under article 21.55. DeLaGarza further argues that State Farm's motion for summary judgment did not address his claim for attorney's fees under section 38.001. State Farm responds that summary judgment was proper because the undisputed facts show the company met the requirements of article 21.55 and its motion for summary judgment proved DeLaGarza was not entitled to recover attorney's fees on any of the asserted grounds. We affirm the trial court's judgment.
I.
Juan DeLaGarza was insured under a Texas Personal Auto Policy issued by State Farm Mutual Automobile Insurance Company. On October 18, 2002, DeLaGarza, through his attorney, sent State Farm a letter stating he had been injured in a car accident as a result of the negligence of an uninsured driver. The letter further stated State Farm was being given "formal notice" of DeLaGarza's claim for benefits under the personal injury protection and uninsured motorist provisions of his insurance policy.
On October 25, 2002, State Farm responded to DeLaGarza's letter acknowledging receipt of the claim and requesting supporting documentation including medical bills and the names and addresses of his medical providers. Six days later, State Farm sent a second letter to DeLaGarza asking for a signed authorization to release information relating to the uninsured motorist claim.
On March 6, 2003, State Farm received a letter enclosing DeLaGarza's medical records and bills. No signed authorization was included. The letter stated the "necessary and reasonable" medical charges *31 incurred by DeLaGarza totaled $9,604. The letter went on to state that "[b]ased upon the nature of the injuries, it is reasonable to assume that Mr. DeLaGarza will incur medical bills in the future due to episodes of pain." Finally, the letter demanded that State Farm tender payment of the $25,000 uninsured motorist protection policy limits to DeLaGarza in exchange for which DeLaGarza would release State Farm from any further liability on the claim.
State Farm responded to DeLaGarza's demand letter with a letter dated March 27, 2003. In the March 27 letter, State Farm stated it was "unable to accept" DeLaGarza's offer to settle the matter for $25,000. But based on the information State Farm had obtained to date, State Farm offered to settle the claim for $10,000. State Farm then stated that "[u]pon receipt of notice that your client accepts our offer, we will forward a payment draft to you within five business days." State Farm added that if DeLaGarza had any other information or documentation for them to consider in connection with his claim, it should be forwarded to the company as soon as possible. The record does not contain any notice sent by DeLaGarza indicating his willingness to settle his claims for $10,000, and DeLaGarza does not contend he ever accepted State Farm's offer. Indeed, State Farm's phone activity logs, which are in the summary judgment record, indicate that State Farm's offer to settle for $10,000 was verbally rejected on April 1 by a paralegal working with DeLaGarza's attorney.
During the course of the phone conversation on April 1, the paralegal advised State Farm that DeLaGarza had previously existing degenerative back problems exacerbated by his recent injury. State Farm asked for all prior records relating to DeLaGarza's medical condition before the accident. State Farm sent a letter the same day repeating its request for the additional information. On April 18, the paralegal sent State Farm a letter stating she had requested the additional records from DeLaGarza's family physician and would forward them to State Farm for review. When the records were not forthcoming, State Farm sent a second letter to DeLaGarza's attorney on May 19, 2003, requesting the information relating to DeLaGarza's earlier back problems. In this letter, State Farm stated its offer to settle the claim for $10,000 was still standing pending review of the additional information.
Rather than forwarding the medical records to State Farm, DeLaGarza filed this suit against the company on May 23, 2003. DeLaGarza asserted in his petition that he was entitled to both the full policy limits of $25,000 and additional damages and attorney's fees under article 21.55 of the Texas Insurance Code. Approximately three weeks after DeLaGarza filed suit, State Farm sent him a check for $10,000. After discovery was conducted, State Farm sent DeLaGarza a second check for $15,000 representing the balance of the benefits available to him under the policy.
Because the policy limits had been paid, the only claim left in the suit was for additional damages under article 21.55 for delay in handling and paying the claim. State Farm moved for summary judgment arguing the undisputed facts showed the company met all the requirements and deadlines for handling DeLaGarza's claim under article 21.55. State Farm also argued the company could not have failed to meet any deadlines for paying DeLaGarza's claim because DeLaGarza never established his entitlement to benefits under the policy. Specifically, State Farm contended there was no determination that DeLaGarza's injuries were caused by the negligence *32 of an uninsured driver and, therefore, State Farm's duty to pay uninsured motorist benefits never arose.
After State Farm moved for summary judgment, but before the hearing on the motion, DeLaGarza amended his petition to add a claim for attorney's fees under section 38.001 of the Texas Civil Practice and Remedies Code. State Farm moved to strike the amended petition but did not receive a ruling on its motion. The trial court ultimately granted State Farm's motion for summary judgment and ruled that DeLaGarza take nothing by his claims. This appeal ensued.
II.
DeLaGarza contends on appeal the trial court erred in granting summary judgment on his claim under article 21.55 of the Texas Insurance Code because the evidence did not conclusively establish that State Farm complied with the article's requirements. We disagree.
Article 21.55 sets forth deadlines by which insurance companies must acknowledge receipt of claim, commence an investigation, notify the claimant whether his claim has been accepted or rejected, and, if the claim is accepted, pay the claim. See Act of May 27, 1991, 72nd Leg., R.S., ch. 242, § 11.03, art. 21.55, 1991 Tex. Gen. Laws 1043-5, repealed by Act of May 20, 2003, 78th Leg., R.S., ch. 1274, § 26 2003 Tex. Gen. Laws 4138 (current version at TEX. INS.CODE ANN. sec. 542.051-.061 (Vernon Pamph.2004-5)). The evidence shows that DeLaGarza first notified State Farm of his claim under the policy on October 18, 2002. Under article 21.55, State Farm was required to acknowledge receipt of the claim, begin an investigation, and request documentation from DeLaGarza within fifteen days. Id. at 1044. State Farm did this by letter dated October 25 in which State Farm stated it was reviewing the claim and needed DeLaGarza's medical records and bills.
DeLaGarza does not dispute he did not provide State Farm with any medical records or bills until March 3, 2003, when he sent some documentation to the company along with a demand letter for $25,000. State Farm received the demand letter and accompanying medical records on March 6. According to DeLaGarza, State Farm then had fifteen days to accept or reject his claim pursuant to section 3 of article 21.55.[2]See id. DeLaGarza suggests State Farm failed to meet this deadline because it did not respond to his demand letter until March 27, 2003, twenty-one days after State Farm received the demand letter. Even assuming State Farm's duty to accept or reject the claim was triggered by DeLaGarza's demand letter, the company met the deadline because it responded within fifteen business days as required by article 21.55. See id.
DeLaGarza next argues that State Farm's March 27 letter offering to settle his claim for $10,000 was an outright "acceptance" of his claim under section 4 of article 21.55 thus requiring State Farm to send payment within five business days. Because State Farm did not send any payment until after this suit was filed, DeLaGarza argues State Farm failed to meet a mandatory deadline. In making this argument, *33 DeLaGarza ignores the clear language of section 4. Section 4 states:
If an insurer notifies a claimant that the insurer will pay a claim or part of a claim under Section 3 of this article, the insurer shall pay the claim not later than the fifth business day after the notice has been made. If payment of the claim or part of the claim is conditioned on the performance of an act by the claimant, the insurer shall pay the claim not later than the fifth business day after the date the act is performed.
See Act of August 25, 1991, 72nd Leg., 2nd C.S., ch. 12, 1991 Tex. Gen Laws 320, repealed by Act of May 20, 2003, 78th Leg., R.S., ch. 1274, § 26 2003 Tex. Gen. Laws 4138 (current version at TEX. INS. CODE ANN. sec.542.057) (Vernon Pamph. 2004-5) (emphasis added). Section 4 allows an insurer to notify its insured that it is accepting only part of a claim and also allows payment of part of the claim to be conditioned on the performance of an act by the insured. See id. If payment is conditioned on the insured performing an act, such as signing a release or agreeing to settle for a lesser amount, the insurance company is not required to pay the claim until five business days after the act is performed. See id. Section 21.55 was not intended to eliminate an insurer's right to dispute all or part of an insured's claim. See Menix v. Allstate Indem. Co., 83 S.W.3d 877, 884-5 (Tex.App.-Eastland 2002, pet. denied). The purpose of section 21.55 was merely to establish deadlines by which the insurance company had to act. See id.
In this case, State Farm's March 27 letter informed DeLaGarza that the company was accepting only part of his claim based on the information it had received to date. The letter further stated the company would forward payment within five business days after DeLaGarza notified the company of his willingness to settle for the lesser amount. State Farm had the right under section 4 to dispute part of DeLaGarza's claim and to condition its payment of the accepted part of the claim on DeLaGarza sending the company notification of his willingness to settle. It is undisputed that DeLaGarza never sent State Farm any notice that he was willing to settle his claims for $10,000. Under the clear terms of section 4, therefore, State Farm did not fail to meet the deadline for making payment because the duty to send payment never arose.
Finally, DeLaGarza argues State Farm was not entitled to summary judgment on his claims under article 21.55 because the company did not show it sent the second payment of $15,000 within five business days of accepting the remainder of his claim. At the time State Farm made the $15,000 payment, however, DeLaGarza had already filed suit and alleged his claims under article 21.55. The second payment was made in an effort to resolve litigation rather than to satisfy an accepted claim. DeLaGarza cites no authority and makes no argument for the proposition that the deadlines established by article 21.55 apply to the litigation process. Absent persuasive argument or authority, we decline to extend the law in this manner. We conclude State Farm established it met all the deadlines and requirements of article 21.55 as a matter of law and the trial court properly granted summary judgment in favor of State Farm on this claim.
DeLaGarza also contends the trial court erred in dismissing his claim for attorney's fees under section 38.001 of the Texas Civil Practice and Remedies Code because it was not addressed in State Farm's motion for summary judgment. Because State Farm did not amend its motion for summary judgment after DeLaGarza *34 filed his amended petition adding a claim under section 38.001, the motion for summary judgment did not specifically address DeLaGarza's newly asserted ground for recovering attorney's fees. This alone does not render the summary judgment improper, however. Although generally summary judgment may not be granted on a cause of action not addressed in the motion, it may be granted on a later pleaded cause of action if the grounds for summary judgment asserted in the motion show the plaintiff could not recover on the later pleaded claim. See McIntyre v. Wilson, 50 S.W.3d 674, 684-85 (Tex.App.-Dallas 2001, pet. denied).
To recover attorney's fees under section 38.001, DeLaGarza is required to show that the "just amount owed" on his claims was not tendered within 30 days after his claim was presented. TEX. CIV. PRAC. & REM.CODE ANN. § 38.002 (Vernon 1997). DeLaGarza argues he is entitled to attorney's fees under section 38.001 because State Farm did not pay him the full $25,000 in uninsured motorist benefits until more than nine months after he made his claim. In its motion for summary judgment, however, State Farm argued that DeLaGarza was not entitled as a matter of law to any uninsured motorist benefits under his insurance policy because he never established that an uninsured or underinsured driver negligently caused the accident that resulted in his alleged injuries. An insurer has no duty to pay uninsured or underinsured motorist benefits until there has been a determination of the liability of the uninsured or underinsured driver and the amount of damages suffered by the insured. See Menix, 83 S.W.3d at 885.
It is undisputed that DeLaGarza never established the liability of the uninsured motorist who allegedly caused the car accident made the basis of his insurance claim. It is also undisputed that there has never been a determination of the amount of damages suffered by DeLaGarza as a result of the accident. To the extent State Farm voluntarily undertook to pay DeLaGarza $10,000 of his uninsured motorist benefits, such payment was properly and timely tendered. Because DeLaGarza never established his entitlement to uninsured motorist benefits, State Farm's duty to pay benefits never arose, and there was no "just amount owed" as required for obtaining attorney's fees under section 38.001. See id. Accordingly, by proving it had no duty to pay DeLaGarza uninsured motorist benefits, State Farm's motion for summary judgment also established that DeLaGarza was not entitled to attorney's fees under section 38.001.
Based on the foregoing, we conclude the trial court properly granted summary judgment in favor of State Farm on DeLaGarza's claims under article 21.55 of the Texas Insurance Code and section 38.001 of the Texas Civil Practice and Remedies Code. We affirm the trial court's judgment.
NOTES
[1] Article 21.55 was repealed by the Texas Legislature effective April 1, 2005. The current version of the statute is TEX. INS.CODE ANN. §§ 542.051-.061 (Vernon Pamph.2004-5)
[2] Section 3 of article 21.55 states "Except as provided by Subsections (b) and (d) of this section, an insurer shall notify a claimant in writing of the acceptance or rejection of the claim not later than the 15th business day after the date the insurer receives all items, statements, and forms required by the insurer, in order to secure final proof of loss." See Act of May 27, 1991, 72nd Leg., R.S., ch. 242, § 11.03, art. 21.55, 1991 Tex. Gen. Laws 1044. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1866644/ | 51 N.W.2d 347 (1952)
STATE ex rel. CHRISTIANSON et al.
v.
DISTRICT COURT OF CASS COUNTY et al. (five cases).
No. 7291.
Supreme Court of North Dakota.
January 2, 1952.
*348 E. T. Christianson, Atty. Gen. and Ralph F. Croal, Roy K. Redetzke, Fargo, and Manfred Ohnstad, West Fargo, for relators.
Bangert & Bangert, Fargo, for respondent.
Leland J. Smith, Asst. State's Atty. of Cass County, Fargo, for County Auditor of Cass County.
PER CURIAM.
The petitioners in the above entitled proceeding applied for supervisory writs directed to the District Court of Cass County, North Dakota, and Honorable Albert Lundberg, Special Judge, to control the acts of said court with respect to certain matters and determinations of said court which will be more specifically set out.
This court issued an order directing the respondent to show cause before the court on the 28th day of December, 1951, at 10 o'clock a. m., why this court should not issue an appropriate writ in each of said proceedings. At the designated time the return of the respondent was made whereby the records of the district court were presented. The respondent was represented by Bangert & Bangert, attorneys of Fargo, North Dakota, and the petitioners were represented by Hon. E. T. Christianson, Attorney General of the State of North Dakota; Ralph F. Croal and Roy K. Redetzke, both of Fargo; and Manfred R. Ohnstad, of West Fargo. Leland J. Smith, Assistant State's Attorney of Cass County, appeared in behalf of the county auditor of Cass County. The records, briefs, and argument of counsel disclosed a situation that made appropriate the exercise of the supervisory jurisdiction of this court and the exercise of superintending control under the provisions of Sections 86 and 87 of the North Dakota Constitution. State ex rel. Johnson v. Broderick, 75 N.D. 340, 27 N.W.2d 849.
Prior to July 1, 1951, steps were taken under the provisions of Chapter 15-53, NDRC 1949 Supplement to reorganize certain school districts of Cass County which resulted in the purported creation of five reorganized districts designated as Ayr Special School District Number 72, Amenia Common School District Number 43, Arthur Special School District Number 88, Davenport Special School District Number 91, and Wheatland Common School District Number 18.
Subsequent to July 1, 1951, special elections were held in each of said districts resulting in the purported election of a school board in each of said reorganized school districts. These school boards proceeded to organize and operate public schools within their respective districts. They also prepared and filed budgets with the county auditor of Cass County as the bases for levying taxes for the year 1951 for the support of the schools within the respective reorganized school districts.
About the first of September, 1951, actions were instituted in each of the reorganized school districts against the elected members of their respective school boards, the superintendent of schools and the county auditor of Cass County attempting *349 to challenge the validity of the organization of the school districts and the validity of the elections in which the purported school boards were elected. The plaintiffs in these actions sought injunctive relief and Honorable John C. Pollock, Judge of the District Court of Cass County, issued an order to show cause on September 19, 1951, why certain injunctive relief should not be granted and in each case he ordered "That until said hearing upon said Order to Show Cause, you are hereby enjoined and restrained from taking any further steps in connection with the reorganization" of the respective school districts. Honorable John C. Pollock then requested Honorable Albert Lundberg to preside in said actions and all subsequent proceedings have been had before Judge Lundberg.
As far as the record before us here shows, no orders have been made by Honorable Albert Lundberg. On December 15, 1951, he issued a "Partial Memo" in which he recites that he was acting in these cases at the request of Judge Pollock and that voluminous briefs and records had been submitted and he indicates that he has not had the time to give proper consideration "of even the limited question of whether the temporary injunctions granted by Judge Pollock * * * should be maintained * * *." He then mentions the urgency of spreading the necessary taxes so that the schools involved would be able to continue in operation. He discusses the question of whether the new boards should take over as the governing bodies of the reorganized districts and submit budgets which would be the bases for levying taxes. He reaches the conclusion that the board of a reorganized district cannot be elected at a special election and says: "we think it clear that the legislative intent expressed in said Sec. 22 and the following Sec. 23 is that the new Board in a reorganized district can only be validly el'ected at the regular annual school election, which comes on the first Tuesday in June (15-2403 & 15-2803) and that even then such new board does not take over as a governing body until the succeeding July 1st; that in the meantime the old Boards continue to function, subject to certain restrictions by the County Committee so that they cannot `sabotage' the pending change; that only after `final' approval of the reorganization would the plan be operative and the new Board take over on the succeeding July 1st."
In the remaining part of his partial memo the trial court holds that the new boards, despite the illegality of their election, may operate the schools in the reorganized districts as de facto boards.
On December 24, 1951, the respondent court issued a "Supplemental Memo School Reorganization CasesCass and Steele Counties." It is clear from the two memos of the trial court that he intends to issue an order that will bring about the result that the old boards of the districts that are incorporated in the reorganized districts are the proper boards to prepare and file with the county auditor budgets that will be the bases for levying the 1951 school taxes, while the boards elected in the reorganized districts will operate the schools and perform the duties incident thereto. This proposed order of the trial court which would direct the old boards to function in part and the new boards to function also in part, is not conducive to the orderly operation and government of school districts and will necessarily result in detriment to the schools involved. Public interest requires that such a result be avoided, and there being no other speedy remedy available, the exigency thus created impels us to exercise the superintending control vested in this court by the constitution.
The error which apparently has induced the trial court to propose to order both the old and the new boards to function each in part within the same territory arises from a misconstruction of the statutes with reference to the election of school boards at the first election in the reorganized districts. Section 15-5322, NDRC 1949 Supp. provides for the election of school boards in reorganized districts. At the first election in a newly reorganized district constituting a common school *350 district the provisions of Sections 15-2401, 15-2402, and 15-2409, NDRC 1943 govern. These sections clearly require the calling of a special election by the county superintendent of schools for the purpose of electing the first school board of a new district.
Section 15-5322, NDRC 1949 Supp. provides that where a reorganized district constitutes a special school' district the election shall be governed by the provisions of Sections 15-2801 and 15-2802. The first section referred to clearly contemplates the calling of a special election for the election of the first board for a special school district. It provides: "Such elections shall be held in the same manner and upon the same notice as other elections in special and common school districts respectively are held."
Not only does the trial court entertain the view that new boards in reorganized districts can only be validly elected at regular annual school elections, but he also states "even then such new board does not take over as a governing body until the succeeding July 1st;" thus indicating that he believes that the new boards must wait until July 1 following their election before becoming the governing bodies of their districts. Upon this point Section 15-5322, NDRC 1949 Supp. provides that the boards in the newly reorganized districts shall not enter upon their duties until the time specified in Section 22 of the act. We agree with the trial court that the reference to "Section 22" is clearly an error resulting from the changing of numbers of the paragraphs during the passage of the act and that the provision should read "Section 23" which is Section 15-5323, NDRC 1949 Supp. and states: "Any reorganization plan voted upon and approved shall become operative and effective on the first day of July succeeding final approval of the same."
When applying this section under the reference to it in Section 15-5322, NDRC 1949 Supp. regarding the time when new boards shall enter upon their duties, it is clear to us that new boards may not enter upon the duties of their office until the first day of July succeeding the approval of the reorganization plan and this section has no application to the date of the election of the board. This construction is strengthened by a reference to Section 15-2401, NDRC 1949 Supp. which specifically refers to districts that have been established in accordance with Chapter 15-53, NDRC 1949 Supp. wherein it is strongly implied that the members of the board may be elected at special elections to serve until subsequent annual elections. We construe Section 15-5322, NDRC 1949 Supp. to authorize the election of school boards of newly organized districts at special elections and a board so chosen at such an election enters upon its duties on the first day of July succeeding the final approval of the reorganized district. Where final approval of a district is had before July first and its board is elected at a special election held after July first as in these cases, the board may organize and enter upon its duties forthwith.
In view of statements made during oral argument concerning the discontinuance or disestablishment of local schools, we would call attention to Section 15-53221, NDRC 1949 Supp. which provides in part: "Each common school in the local districts included in reorganized school districts shall be kept in session as provided by law, except that any school may be discontinued when the people in the old district where the school is located, by a majority vote, approve its closing, or when a petition requesting that the school is discontinued is signed by two-thirds of the electors in the old district where the school is located and is presented to the school board or board of education in the reorganized district."
This section would appear to afford ample protection against the anticipated danger of arbitrary closing of schools by the new boards of the reorganized districts.
His misinterpretation of the statute, Section 15-5322, led the trial court to the conclusion that because they were elected at special elections the new boards were not legally created and at best could be de facto boards. This led to the further *351 conclusion that the old boards were still legally in office, although the new boards were actually operating the schools. He therefore proposed to make an order that the new boards should continue to operate the schools while the old boards, being de jure organizations, should provide the budgets which would be the bases for levying taxes for the support of the schools. It is obvious that such an arrangement would result in confusion, to the detriment of the schools. The plaintiffs in these various actions contend that the new districts were not legally organized and are not legally in existence. They also contend that the school boards of the new districts were not legally elected. The trial court does not propose at this time to determine the legality of the organization of the new districts and neither do we. That is a matter to be left to be determined when the merits of the controversies are finally tried. With respect to the elections of the new boards the trial court has obviously not passed upon all of the objections to those elections, but he held that new boards could not be elected at special elections and could not take office until July first following their election. These holdings are erroneous and no doubt resulted in the proposal to order authority divided between the old and new boards. Some old districts lie partly within and partly without reorganized districts which are composed of more than one old district. Confusion and duplication can be avoided only if one board functions within the territory of the same district with authority not only to operate the schools but also to prepare budgets which will furnish the bases for levying taxes to finance their continued operation. It is clear from this record that the new boards are at least de facto boards operating as the governing bodies of de facto districts; that as such their acts not only in operating the schools but in preparing budgets for their respective districts should not be subjected to interference at this time and that they should be permitted to continue to exercise all of the functions of school boards in reorganized districts until the merits of these controversies have been determined.
The respondent judge is directed to vacate any orders he may have made that are inconsistent herewith and to refrain from taking any action not in accord with the views herein expressed, pending his disposition of the merits of these controversies.
MORRIS, C. J., and BURKE, SATHRE, GRIMSON and CHRISTIANSON, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1644220/ | 4 So. 3d 1232 (2009)
KING
v.
STATE.
No. 2D09-531.
District Court of Appeal Florida, Second District.
March 5, 2009.
Decision without published opinion. Belated App.denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368743/ | 155 Ga. App. 844 (1980)
273 S.E.2d 225
PRICE
v.
THE STATE.
60239.
Court of Appeals of Georgia.
Submitted July 7, 1980.
Decided September 24, 1980.
Larry A. Foster, for appellant.
Robert E. Keller, District Attorney, Harold R. Benefield, Assistant District Attorney, for appellee.
BIRDSONG, Judge.
On November 14, 1978, at about 3:30 a. m., the Waffle House on Riverdale Road in Atlanta was robbed by two armed black males, who took the money from the cash register and wallets from all the customers and employees who were present. At approximately 1:30 p. m. the same day, the appellant Paul Reginald Price together with Rudolph Cooper was apprehended in a boutique in West End Mall using credit cards taken during the Waffle House robbery. Both Price and Cooper plead guilty to forgery, telling the police that Cooper had purchased the credit cards. At 9:00 p. m. on the same day, six of the eight victims of the Waffle House robbery viewed a lineup at Atlanta Police Headquarters that included Price and Cooper. Five of the six identified Cooper as one of the perpetrators, but none of them identified Price. Again, at a preliminary hearing on November 16, none of the witnesses identified Price. However, Cooper and Price were jointly indicted and charged with six counts of armed robbery of the Waffle House. Prior to trial Price's attorney filed several motions, including one for severance, all of which were denied. The case was tried for four days before a jury, ending in a verdict of guilty on all counts as to both defendants, and Price appeals. Held:
1. Although Price enumerates some 21 errors, we consider the controlling issue to be the overruling of his numerous motions to sever made prior to and during the course of the trial. While the grant or denial of a motion to sever is discretionary with the trial judge, "[s]ome of the considerations for the court in exercising its discretion have emerged from the cases considering motions to sever: 1. Will the number of defendants create confusion of the evidence and law applicable to each individual defendant? 2. Is there a danger that evidence admissible against one defendant will be considered against another despite the admonitory precaution of the court? 3. Are the defenses of the defendants antagonistic to each other or to each other's rights? [Cit.] If the defendant can show the court by some facts that failure to sever will prejudice him under one or more of these considerations, his motion should probably be granted." Cain v. State, 235 Ga. 128, 129 (218 SE2d 856).
In his written motion to sever filed prior to trial, Price alleged that eight witnesses for the state had identified Cooper as one of the black males who robbed the Waffle House, but that only one of these witnesses had connected him with this crime; that he had reason to *845 believe the state was planning to use against him witnesses from crimes committed by Cooper but not by him; that he had reason to believe Cooper planned to use and present a defense which he knew was contrary to the truth; that trying him and Cooper together would create confusion of the evidence and law applicable to each individual defendant; that trying them together would create a danger that evidence admissible against Cooper but not admissible against him would be considered against him despite the admonitory precaution of the court; that his and Cooper's defenses were antagonistic to each other; and that failure to sever the trials would prejudice him. The court denied the motion on the ground that there were no antagonistic defenses.
From our review of the trial transcript, however, we conclude that the evidence, while overwhelming against Cooper, presented little or nothing to connect Price with the robbery. Indeed, the only witness identification of Price was admitted over objection and the witness' ability to make the identification did not come to the attention of either the state or defense counsel until the trial was in progress. Moreover, even in the face of renewed motions to sever during the course of the trial, no "admonitory precautions" were ever made to the jury. Of the seven victims, only five testified at trial. Three of them gave no testimony directed at Price and one was allowed to testify, over objection, as to the forgery trial in Fulton County principally involving Cooper. Therefore, of all the victims, only one identified Price with the armed robbery, and objection was made to this evidence.
Four witnesses testified that they saw both perpetrators of the crime, one better than the other, viewed a lineup some 18 hours after the crime which included both Price and Cooper, and selected Cooper but not Price. None of these witnesses identified Price at lineup, preliminary hearing, or trial. The fifth witness saw both perpetrators. She attended the lineup and the preliminary hearing and selected Cooper but not Price as one of the men. Two days after the crime, this witness, the wife of a police officer, was shown some color photographs and either did not select a four-year-old picture of Price according to the testimony of one detective, or did select Price's picture according to her own testimony. Only this witness was shown these photographs, which were apparently front and side view "mug" shots with "little flaps" of paper stapled over the numbers. Neither the state nor defense counsel was aware of this identification until the detective testified. He stated that he had not mentioned it previously, even though "our investigation proved [her] to be the only witness that may be able to identify the second suspect"; but because "no one made an identification of Paul Price at any lineup," he did not think *846 that her testimony concerning the photographs would be admissible. Nevertheless, these photographs and testimony of Price's identification by this witness were admitted over objection.
In addition, the state presented 30 odd pieces of documentary evidence, including all of the lineup photographs identifying Cooper, various charge slips and sales tickets unconnected to Price, the stolen credit cards and the forgery indictments. This evidence, like much of the witnesses' testimony, while not directly damaging to Price, could have been so overwhelming to the jury that it could not effectively separate that which was against Cooper and that which was pertinent to Price only as to the armed robbery charges.
Thus, "we believe it highly probable, in view of the minimal evidence against [Price], that he was convicted as the result of some spillover of the substantial evidence adduced against his [co-defendant]. Where evidence against [Price] was so slight, he should not be convicted merely by association, or by being enveloped within a vague, generalized notion... Where the appellant's conviction more likely resulted from the evidence against his [co-defendant] than from the evidence against him, we do not hesitate to conclude that he was entitled to a separate trial." Crawford v. State, 148 Ga. App. 523, 526 (251 SE2d 602). Accord, Reeves v. State, 237 Ga. 1, 4 (226 SE2d 567). Under the rules set forth in Cain v. State, supra, at p. 129, Price has made "a clear showing of prejudice and a consequent denial of due process." Therefore, the denial of his motion to sever, renewed many times during the course of the trial, was an abuse of discretion.
2. Because of the ruling we make entitling appellant to a new and separate trial and the likelihood of the non-reoccurrence of other enumerated errors, we find it unnecessary to rule on these remaining enumerations of error.
Judgment reversed. Deen, C. J., and Sognier, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368764/ | 246 Ga. 727 (1980)
273 S.E.2d 139
CITIZENS & SOUTHERN NATIONAL BANK
v.
RAYLE et al.
36564.
Supreme Court of Georgia.
Argued September 9, 1980.
Decided November 5, 1980.
Rehearing Denied November 25, 1980.
McClain, Mellen, Bowling & Hickman, A. O. Bracey, III, Cornelia B. Brewer, for appellant.
R. M. Bernhardt, for appellees.
HILL, Justice.
The bank filed an action seeking declaratory judgment and injunctive relief against Dr. Albert A. Rayle, Jr., Metropolitan *728 Radiology, P.C., and others. The bank asserted a security interest in the accounts receivable of the Bolton Road Hospital. It sought a declaratory judgment that its security interest had priority over Rayle's and Metropolitan Radiology's claims to certain funds and an injunction to prevent them from interfering with the bank's efforts to collect the hospital's accounts receivable. The defendants counterclaimed as to those same funds.
The trial judge appointed an auditor pursuant to Code Ch. 10-1 "to determine the validity of the [bank's] security interest and the priority of claims to the cash and of the payment items payable to ..." the hospital held by a third defendant, and to make findings of fact and of law and to report the same to the court. The Internal Revenue Service intervened and the case was removed to the district court where the auditor appointed by the state court was appointed to serve as a special master for the federal court. The special master filed his report, finding that, pursuant to a written contract, the hospital acted solely as the billing and collection agent for the defendants and that the funds in issue were not funds of the hospital subject to the bank's security interest. When the IRS was dismissed, the case was remanded.
The superior court overruled the bank's exceptions and approved the auditor's report. The defendants moved for entry of judgment. The court denied declaratory relief to the bank based upon the approved auditor's report and denied injunctive relief based on the finding that injunctive relief would be inconsistent with the approved auditor's report. On motion by the bank, the defendant's motion for entry of judgment based on the auditor's report was treated as a motion for summary judgment as to the counterclaims. The trial court found that there were no genuine issues of material fact in the testimony before the auditor or elsewhere as to the counterclaims and granted summary judgment to the defendants on those counterclaims, reserving determination of the amount of attorney fees.
The bank filed in the Court of Appeals an application to appeal as to the approval of the auditor's report and filed a notice of appeal to the Court of Appeals as to the grant of summary judgment. The Court of Appeals denied the application to appeal and thereafter when the appeal was docketed transferred it to this court.
On this appeal the bank enumerates 16 errors, 10 of which complain of errors alleged to have been committed by the auditor and another which asserts error in the trial court's denial of declaratory judgment to the plaintiff. The bank also enumerates error on the denial of a jury trial; in treating (on the bank's motion) the defendant's motion for entry of judgment as a motion for summary *729 judgment, without notice, and in granting it; in treating the motion for entry of judgment as one for summary judgment without requiring compliance with Code Ann. § 81A-156 (c) and local rule 21 (e); in impressing a trust on sums found by the auditor due from the bank to defendants; and in awarding costs and allowing attorney fees (as yet not assessed). The defendants urge that the Court of Appeals' denial of the application to appeal renders the trial court's approval of the auditor's report res judicata and renders those enumerations of error based thereon moot.
Appeals may be taken to this court and the Court of Appeals from judgments and rulings of the superior and certain other courts:
1. "Where the judgment is final that is to say where the cause is no longer pending in the court below" Code Ann. § 6-701 (a) (1) (see also Code Ann. § 81A-154 (b); but see Code Ann. § 50-127 (11));
2. From certain specified interlocutory (non-final) orders (e.g., applications for discharge in contempt cases, orders granting or refusing interlocutory injunctions) identified by the General Assembly as warranting immediate appellate review notwithstanding their lack of finality, Code Ann. § 6-701 (a) (3);
3. From other interlocutory orders timely certified by the trial judge to be of such importance to the case that immediate review should be had, where the appellate court agrees with the trial judge's assessment that an interlocutory appeal should be allowed, Code Ann. § 6-701 (a) (2); and
4. From orders granting partial summary judgment, Code Ann. § 81A-156 (h).[1]
The determination of which appellate court has jurisdiction of an appeal is fixed basically by the Constitution;[2] certain specified cases (e.g., constitutionality of Georgia and federal laws, equity cases, divorce and alimony cases) come to this court (Code Ann. § 2-3104); other cases (e.g., workers' compensation cases) go to the Court of Appeals (Code Ann. § 2-3108).
The foregoing provisions allowing appeals from all final judgments and numerous interlocutory orders generated such a massive caseload in the appellate courts (1726 matters decided by the Supreme Court in the year September 1, 1977, to August 31, 1978, resulting in 760 written opinions), that the General Assembly in 1979 *730 enacted Ga. L. 1979, p. 619 (Code Ann. § 6-701.1), which reads in part as follows:
"(a) Appeals in the following types of cases shall be as provided in this Section:
"(1) Appeals from decisions of the superior courts reviewing decisions of the Worker's Compensation Board, Auditors, State and local administrative agencies, and lower courts by certiorari or de novo proceedings; provided, however, this provision shall not apply to decisions of the Public Service Commission and probate courts, and cases involving ad valorem taxes and condemnations.
"(2) Appeals from judgments or orders granting or refusing a divorce or temporary or permanent alimony, awarding or refusing to change child custody, or holding or declining to hold persons in contempt of such alimony or child custody judgment or orders.
"(b) All appeals taken in cases specified in subsection (a) above shall be by application in the nature of a petition enumerating the errors to be urged on appeal and stating why the appellate court has jurisdiction. The application shall specify the order or judgment being appealed, and if such order or judgment is interlocutory the application shall set forth, in addition to the enumeration of errors to be urged, the need for interlocutory appellate review ...
"(f) The supreme court or court of appeals shall issue an order granting or denying such an appeal ..."
The clear intent of section (a) (1), above, was to give the appellate courts (particularly the Court of Appeals which has jurisdiction of workers' compensation cases not involving the constitutionality of a law) the discretion not to entertain an appeal where the superior court had reviewed a decision of certain specified lower tribunals (i.e., two tribunals had already adjudicated the case).
The clear intent of section (a) (2), above, was to give the appellate courts (the Supreme Court in divorce and alimony cases and the Court of Appeals in child custody cases) the discretion not to entertain an appeal where the superior or juvenile court had made a decision as to divorce, alimony, child custody or contempt, the latter three of which are in large part discretionary and yet frequently appealed by the losing spouse.
The 1979 act, Code Ann. § 6-701.1, applies to all appeals specified in section (a) (1) or (2), whether the judgment be final, interlocutory, or summary. That act is to be interpreted reasonably to accomplish the General Assembly's intended purpose.
It follows that those enumerations of error in this case relating to errors alleged to have been committed by the auditor are not subject to direct appeal to this court (i.e., without application pursuant to § 6-701.1) and need not be considered because the Court of Appeals *731 denied the application to appeal as to the superior court's review of the auditor's report. It is, however, to be pointed out that the denial of a § 6-701.1 application to appeal a nonfinal order is perhaps persuasive but is not res judicata in the appellate court when later reviewing a final order in the same case. It is not res judicata for the same reasons denial of a § 6-701 (a) (2) application is persuasive but not res judicata; the appellate court may have decided the case should be concluded in the court below before entertaining the appeal, so as to avoid a piecemeal or fragmented appeal.
In accordance with the intended purpose of § 6-701.1, we hold that where an auditor is appointed in an equity case and renders a report which contains findings of fact and conclusions of law which are approved by the trial court, a judgment entered on such report (see Code § 10-407), or a summary judgment entered in the case where there are no genuine issues as to material facts set forth in the report, is subject to the application requirement of § 6-701.1 just as summary judgments in divorce cases are. This will avoid piecemeal and fragmented appeals.
It follows that all of the enumerated errors in this case are subject to the application of § 6-701.1. Because the Court of Appeals has denied the application directed to it and no application to appeal has been made to this court, this interlocutory appeal is dismissed.
Appeal dismissed. All the Justices concur, except Nichols, J., who is disqualified
ON MOTION FOR REHEARING
We held above that "... the denial of a § 6-701.1 application to appeal a nonfinal order is ... not res judicata in the appellate court when later reviewing a final order in the same case." On motion for rehearing it is urged that the decision in Harris v. Harris, 245 Ga. 75 (263 SE2d 113) (1980), requires the conclusion that the denial of a § 6-701.1 application to appeal a nonfinal order is a binding determination of the merits of the appeal and is thus res judicata.
Harris v. Harris, supra, is not applicable here because it involved the denial of a § 6-701.1 application to appeal a final order holding the appellant in contempt of court for failure to pay *732 permanent alimony. That contempt order was final in that the cause was no longer pending in the trial court (see Code Ann. § 6-701 (a) (1)) and, absent a proper appeal, the appellant was subject to being incarcerated pursuant to the order finding him in contempt.
Motion denied. All the Justices concur.
NOTES
[1] An order granting complete summary judgment would be final and hence appealable under Code Ann. § 6-701 (a) (1), supra.
[2] See also Collins v. State, 239 Ga. 400 (236 SE2d 759) (1977). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368750/ | 793 F. Supp. 679 (1992)
Larry Kenneth TURNER, Plaintiff,
v.
UNITED STATES NAVY, Defendant.
No. 2:92mc71.
United States District Court, E.D. Virginia, Norfolk Division.
July 7, 1992.
Larry Kenneth Turner, pro se.
John Phillip Krajewski, Asst. U.S. Atty., Norfolk, Va., for U.S.
OPINION AND DISMISSAL ORDER
REBECCA BEACH SMITH, District Judge.
Plaintiff, proceeding pro se, submitted this action under 42 U.S.C. § 1981 to redress *680 alleged violations of his constitutional rights. Plaintiff also submitted an affidavit of poverty and seeks to proceed in forma pauperis under 28 U.S.C. § 1915. This court GRANTS plaintiff's request to proceed in forma pauperis in this case only and ORDERS the complaint FILED without prepayment of costs or giving of security therefor.
Although plaintiff's complaint is not entirely clear, it appears to allege that plaintiff invented the Space Shuttle while in the United States Navy and that he has never been recognized or properly compensated for his efforts. The complaint also alleges that both current and former members of the Navy have refused plaintiff's periodic requests for various forms of assistance. Although plaintiff purported to bring his complaint under 42 U.S.C. § 1981 on the basis of "discrimination," he never stated how or why he was discriminated against. Plaintiff seeks "a settlement of this topic in a rational way with the option for anything he wants, starting with a sum tentatively of $200,000,000.00."
Based upon careful consideration of plaintiff's pleadings and a familiarity with plaintiff's numerous other filings, as well, this court determines that dismissal of this action is appropriate under 28 U.S.C. § 1915(d). Section 1915(d) provides for the dismissal of an in forma pauperis action if the court is "satisfied that the action is frivolous...." A case is frivolous for purposes of § 1915(d), if plaintiff would not be entitled to relief under any arguable construction of law or fact. Denton v. Hernandez, ___ U.S. ___, 112 S. Ct. 1728, 1733, 118 L. Ed. 2d 340 (1992); Neitzke v. Williams, 490 U.S. 319, 325, 109 S. Ct. 1827, 1831-32, 104 L. Ed. 2d 338 (1989); Boyce v. Alizaduh, 595 F.2d 948, 952 (4th Cir.1979).
As stated above, such a dismissal contemplates two different types of frivolousness factual and legal. Factual frivolousness includes allegations that are "clearly baseless," which means "fanciful," "fantastic," or "delusional." Neitzke, 490 U.S. at 325, 327-28, 109 S.Ct. at 1831-32, 1832-33. Under the in forma pauperis statute, 28 U.S.C. § 1915, the court is "not bound ... to accept without question the truth of plaintiff's allegations" simply because they "cannot be rebutted by judicially noticeable facts." Denton, 112 S.Ct. at 1733. Legal frivolousness, on the other hand, allows the court to dismiss a complaint under § 1915(d), if it is based on "an indisputably meritless legal theory.... Examples of [this] class are claims against which it is clear that the defendants are immune from suit, and claims of infringement of a legal interest which clearly does not exist...." Neitzke, 490 U.S. at 327, 109 S.Ct. at 1833 (citation omitted).
In the case at bar, plaintiff's complaint is subject to dismissal as frivolous on both factual and legal grounds. First, the court concludes in its discretion that plaintiff's factual allegations concerning his invention of the Space Shuttle are "clearly baseless." Second, plaintiff's allegations are also legally frivolous because any suit seeking money damages from the United States Government, or an agency thereof, which would have to be satisfied out of general Treasury funds, is barred by the affirmative defense of sovereign immunity under the Eleventh Amendment. See, e.g., Selden Apartments v. United States Dep't of Hous. and Urban Dev., 785 F.2d 152, 156-58 (6th Cir.1986) (holding suit filed against federal agency under 42 U.S.C. § 1981 barred by sovereign immunity). This court is unaware of, and plaintiff has failed to identify, any statutory provision waiving that defense which would allow plaintiff to bring suit against the United States Navy under the facts in this case.
In conclusion, it is obvious that there is no arguable construction of law or fact under which plaintiff would be entitled to relief under § 1981. Accordingly, these claims are DISMISSED with prejudice pursuant to 28 U.S.C. § 1915(d).[1]
*681 The court also notes for the record that this is only one of four complaints submitted by plaintiff in less than three months.[2] Two of these complaints revolved directly around his alleged invention of the Space Shuttle and mistreatment by the United States Navy, his former employer. In plaintiff's other two complaints, he alleged that he was illegally held by two psychiatric facilities and two police departments. Although the court granted plaintiff's requests to proceed in forma pauperis in these cases, all were subsequently dismissed either under 28 U.S.C. § 1915(d) as frivolous or under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim.
Based on the aforementioned, the court concludes that Turner has abused court process by the filing of successive, frivolous complaints. Accordingly, it is ADJUDGED and ORDERED that leave to file in forma pauperis shall be denied forthwith except upon good cause shown. If Turner wishes to continue filing at his present rate, he must pay the full filing fee of $120.00 for each complaint submitted. See 28 U.S.C. § 1915; Graham v. Riddle, 554 F.2d 133, 134-35 (4th Cir.1977).
Plaintiff is advised that he may appeal from this final order by forwarding a written notice of appeal to the Clerk of the United States District Court, United States Courthouse, 600 Granby Street, Norfolk, Virginia 23510. Said written notice must be received by the Clerk within thirty (30) days from the date of this order.
The Clerk is DIRECTED to send a copy of this opinion and dismissal order to plaintiff and the United States Attorney.
It is so ORDERED.
NOTES
[1] This dismissal is with prejudice insofar as plaintiff may seek to file in forma pauperis another complaint alleging the same facts. However, "the dismissal does not prejudice the filing of a paid complaint making the same allegations." Denton, 112 S.Ct. at 1734.
[2] Plaintiff submitted Action Nos. 2:92cv233 and 234 on March 20, 1992; Action No. 2:92cv293 on April 14, 1992; and this Action No. 2:92mc71 on June 10, 1992. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1916327/ | 264 B.R. 234 (2001)
In re Stephen John WILLIAMS, Debtor.
Stephen John Williams, Plaintiff,
v.
Law Society of Hong Kong, Herbert Hak-Kong Tsoi, Patrick Moss, Privacy Commissioner for Personal Data, Stephen Lau Ka-men, Eric Pun, Tony Lam, Deacons, Graham & James, Kevin Bowers, Jonathan Harris and Mimi Leung, Defendants.
Bankruptcy No. 00-21672. Adversary No. 00-2071.
United States Bankruptcy Court, D. Connecticut.
June 28, 2001.
*235 *236 Stephen John Williams, Storrs, CT, pro se.
*237 Robert E. Kaelin, Murtha Cullina, LLP, Hartford, CT, for defendants except Graham & James.
RULING ON CERTAIN DEFENDANTS' MOTION TO DISMISS ADVERSARY PROCEEDING FOR LACK OF PERSONAL JURISDICTION
ROBERT L. KRECHEVSKY, Bankruptcy Judge.
I.
ISSUE
Stephen John Williams ("Williams"), on June 14, 2000, filed in this court a Chapter 13 petition without schedules, a proposed plan, or a statement of financial affairs. On July 10, 2000, Williams filed a complaint against the Law Society of Hong Kong, Herbert Hak-Kong Tsoi, Patrick Moss, Privacy Commissioner for Personal Data, Stephen Lau Ka-men, Eric Pun, Tony Lam, Deacons, Graham & James, Kevin Bowers, Jonathan Harris and Mimi Leung, all of whom, except Graham & James,[1] resided in Hong Kong (together, except for Graham & James, the "Hong Kong defendants"). The complaint seeks damages, pursuant to Bankruptcy Code § 362(h),[2] for the defendants' asserted violation of the automatic stay imposed by § 362(a) upon the filing of a bankruptcy petition.
The Hong Kong defendants have appeared by counsel and filed the instant motion to dismiss the complaint on various grounds pursuant to Fed.R.Civ.P. 12(b)(1) and (2), made applicable in bankruptcy proceedings by Fed.R.Bankr.P. 7012(b). By agreement of the appearing parties, the sole issue for decision in this ruling is whether the court lacks personal jurisdiction over the Hong Kong defendants.[3] The basis for the background that follows includes the motion hearing held on April 20, 2001, and the affidavits, pleadings, briefs, and other papers filed by the parties.
II.
BACKGROUND
Williams, an attorney, then present in or a resident of Hong Kong, from December, 1998 through August, 1999, filed three separate complaints with the Hong Kong Privacy Commissioner for Personal Data ("the Commissioner"), alleging violations of Williams' data access requests, pursuant to the Hong Kong Personal Data (Privacy) Ordinance, CAP. 486 (Def.Ex.A). He complained that three Hong Kong entities the Law Society of Hong Kong ("the Law Society"), the Director of Immigration, and the Secretary of Security failed to provide him with the data requested in the time and manner prescribed by the ordinance. The Commissioner dismissed the complaints[4] and Williams, between October 26, 1999 and January 14, 2000, filed appeals of these rulings to the Hong Kong Administrative Appeals Board ("the AAB"). On *238 May 6, 2000, Williams notified the AAB that he was abandoning all three appeals.
The Administrative Appeals Board Ordinance, CAP. 442 (Def.Ex. A), provides in relevant part:
21. Conduct of proceedings
(1) For the purposes of an appeal, the Board may
. . .
(k) subject to section 22, make an award to any of the parties to the appeal of such sum, if any, in respect of the costs of and relating to the appeal;
. . . .
22. Provision relating to cost and witness expenses
(1) The Board shall only make an award as to costs under section 21(1)(k)
(a) against an appellant, if it is satisfied that he has conducted his case in a frivolous or vexatious manner; and
(b) against any other party to the appeal, if it is satisfied that in all the circumstances of the case it would be unjust and inequitable not to do so.
Mimi Leung, a defendant and Secretary of the AAB ("Leung"), on May 16, 2000, wrote to the Commissioner and the Law Society asking whether they sought to recover their costs. Both responded that they did seek costs and the Commissioner, on May 17, 2000, and the Law Society, on May 24, 2000, filed the required materials with the AAB. The AAB scheduled a hearing on the issue of costs for June 15, 2000 at 9:30 a.m. Leung, on May 17, 2000, mailed to Williams at his Connecticut address a letter notifying him of the hearing and his right to appear either in person or by representative, and requiring that he file with the AAB, before June 1, 2000, a "skeleton submission" of his position. Williams neither filed the requested submission nor appeared. Instead, he filed his Chapter 13 petition and faxed a letter to defendant Kevin Bowers ("Bowers") at Deacons, the Hong Kong law firm representing the Law Society, informing him that Williams had filed a bankruptcy petition and that, "All proceedings before the Administrative Appeals Board must be immediately discontinued. Any further action whatsoever, including even scheduling or rescheduling a matter, would be a violation of the stay." (Ex. D, Debtor's Letter of June 14, 2000.) The AAB held the scheduled hearing on June 15, 2000, and found that Williams "had conducted his appeals in a frivolous and vexatious manner and costs should be awarded to the Commissioner and the Law Society." (Ex. B, AAB proceedings of June 15, 2000.) The AAB acknowledged Williams' "letter faxed to the Board at the last minute. In this letter [Williams] tried to inhibit the Board from proceeding with the hearing of the costs applications. He cited various United States statutes seeking to warn the Board that participants in the appeal proceedings would be subject to criminal contempt proceedings. This again demonstrated that [Williams] had clearly no intention to pursue his appeals according to the law but had tried to threaten the Board." (Id.)
Williams, when he filed the instant adversary proceeding,[5] simultaneously dismissed *239 his bankruptcy case without having filed the required schedules, statement of financial affairs, or a proposed Chapter 13 plan, and without having paid any portion of the filing fee for his petition.[6] When asked by the court at the motion hearing why he dismissed his Chapter 13 bankruptcy case, Williams replied, "I dismissed the Chapter 13, your Honor, because, in fact, it had not worked. They had proceeded with [the AAB proceedings], and the stay had been violated. What was the point of continuing. . . ." (Tr. at 10.)
III.
DISCUSSION
"On a Rule 12(b)(2)[7] motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Prior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction." Metropolitan Life Insurance Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir.1996). Fed.R.Bankr.P. 7004(f) provides:
(f) Personal Jurisdiction. If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service in accordance with this rule or the subdivisions of Rule 4 F.R.Civ.P. made applicable by these rules is effective to establish personal jurisdiction over the person of any defendant with respect to a case under the Code, or arising in or related to a case under the Code.
"To exercise personal jurisdiction over a defendant in a federal question case, a plaintiff must demonstrate that (1) bringing the defendant into federal court accords with the Fifth Amendment due process principles, and (2) the defendant is amenable to process." See 4 Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure: Civil 2d, ¶ 1067.1 (2001 Supp.). The Hong Kong defendants do not dispute that service of the complaint upon them was in accordance with the procedures set forth in Fed.R.Bankr.P. 7004 and the applicable provisions of Fed. R.Civ.P. 4. Accordingly, the principal issue before the court, under the parties' stipulation, is whether the exercise by this court of personal jurisdiction over the Hong Kong defendants comports with the due process requirements of the Fifth Amendment.[8]See Chew v. Dietrich, 143 F.3d 24, 28 (2d Cir.1998) (Fifth Amendment due process clause applies in federal question case where defendant was served pursuant *240 to Fed.R.Civ.P. 4). Although much of the decisional law concerning personal jurisdiction concerns questions of state law and the due process requirements of the Fourteenth Amendment, rather than those of the Fifth Amendment, the Second Circuit has stated that "the due process analysis is basically the same under both the Fifth and the Fourteenth Amendments. The principal difference is that under the Fifth Amendment the court can consider the defendant's contacts throughout the United States, while under the Fourteenth Amendment only the contacts with the forum state may be considered." Id.
The Supreme Court, in International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), held that due process requires (1) that a defendant have "sufficient contacts" with the forum to make it (2) "reasonable and just according to our traditional conception of fair play and substantial justice" for its courts to exercise personal jurisdiction over a defendant not physically present in the forum. Id. at 320, 66 S. Ct. 154. In determining whether minimum contacts exist, the court considers the relationship among the defendant, the forum, and the litigation. Chew, 143 F.3d at 28 (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775, 104 S. Ct. 1473, 79 L. Ed. 2d 790 (1984)).
The due process test for personal jurisdiction has two related components: the "minimum contacts" inquiry and the "reasonableness" inquiry. The court must first determine whether the defendant has sufficient contacts with the [United States] to justify the court's exercise of personal jurisdiction. For purposes of this initial inquiry, a distinction is made between "specific" jurisdiction and "general" jurisdiction. Specific jurisdiction exists when [the United States] exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant's contacts with the [United States]; a court's general jurisdiction, on the other hand, is based on the defendant's general business contacts with the [United States] and permits a court to exercise its power in a case where the subject matter of the suit is unrelated to those contacts. Because general jurisdiction is not related to the events giving rise to the suit, courts impose a more stringent minimum contacts test, requiring the plaintiff to demonstrate the defendant's continuous and systematic general business contacts. The second stage of the due process inquiry asks whether the assertion of general jurisdiction comports with traditional notions of fair play and substantial justice that is, whether it is reasonable under the circumstances of the particular case.
Metropolitan Life, 84 F.3d at 567-68.
To establish the minimum contacts necessary to justify "specific" jurisdiction, the plaintiff first must show that his claim arises out of or relates to defendant's contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S. Ct. 1868, 1872, 80 L. Ed. 2d 404 (1984). The plaintiff must also show that the defendant "purposefully availed" himself of the privilege of doing business in the forum state and that the defendant could foresee being "haled into court" there. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 567, 62 L. Ed. 2d 490 (1980); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528 (1985).
Chew, 143 F.3d at 28.
Williams' complaint alleges two actions during the pendency of Williams' bankruptcy case that he contends violated *241 the automatic stay. The first was the continuation, on June 15, 2000, of the AAB proceedings in Hong Kong. The AAB proceedings concerned only matters of Hong Kong law, arose from complaints and appeals Williams filed in Hong Kong while he was in Hong Kong, and concerned conduct of the Hong Kong defendants and Williams in Hong Kong. These actions do not relate to contacts of any of the Hong Kong defendants with the United States. Accordingly, they do not give rise to specific jurisdiction and Williams therefore must show that the Hong Kong defendants' contacts with the United States "constitute the kind of continuous and systematic general business contacts" necessary for the court to exercise general jurisdiction over their persons. Helicopteros, 466 U.S. at 416, 104 S. Ct. 1868.
The second alleged violation of the stay was Bowers' June 19, 2000 letter, as counsel to the Law Society, informing Williams of the AAB's decision and demanding payment. Williams alleges no contact with the United States other than mailing the letter to Williams at his Connecticut address as giving rise to the alleged violation of stay. The mailing of the letter is not sufficient to satisfy the minimum contact requirement for specific jurisdiction, since the contact with the United States arose solely from Williams' unilateral decision to return there. See Burger King Corp. v. Rudzewicz, 471 U.S. at 474-76, 105 S. Ct. 2174 ("[A] defendant will not be haled into a jurisdiction solely as a result of . . . the unilateral activity of another party or a third person.") (citations omitted).
The exercise of the court's general jurisdiction, where the injury complained of did not arise from and is not related to a defendant's contacts with the United States, requires a stronger nexus between the defendant and the United States; the defendant must have "continuous and systematic general business contacts with the United States." Helicopteros, 466 U.S. at 416, 104 S. Ct. 1868. None of the Hong Kong defendants conducts business in or solicits business from the United States. Williams states that several partners of Deacons were educated in the United States, were admitted to practice in New York or California or previously practiced in the United States. However, in his affidavit, Bowers avers that each of the attorneys Williams refers to resides outside the United States and none has had any business contact with the United States for several years. Williams argues that the correspondence sent him via post and fax are sufficient to constitute the continuous and systematic contacts between the Hong Kong defendants and the United States. Williams has submitted and the court has reviewed such correspondence, all of which is either (1) the decision of the AAB and the notices, and copies of filings related to the AAB proceedings or (2) replies to letters Williams sent to the Hong Kong defendants. The only connection between the cited correspondence and the United States arises not from any Hong Kong defendant's decision to "purposefully avail[] itself of the privilege of conducting activities in the [United States]," but from Williams' unilateral activity in removing to the United States and, in certain instances, his requests for information from certain of the Hong Kong defendants. Burger King, 471 U.S. at 475, 105 S. Ct. 2174 (citing, inter alia, Kulko v. California Superior Court, 436 U.S. 84, 98 S. Ct. 1690, 56 L. Ed. 2d 132 (1978) which held that a state court could not exercise personal jurisdiction over "a divorced husband . . . whose only affiliation with the forum was created by his former spouse's decision to settle there.").
*242 Williams also argues that Deacons, through its affiliation with the United States law firm, Graham & James, should be considered as conducting business in the United States. In his affidavit, Bowers avers that Deacons never conducted any business in the United States, either during its affiliation with Graham & James or since; that none of the partners of Graham & James were partners of Deacons and vice-versa; that Deacons never maintained any office in the United States; and that, although Deacons used the name Deacons, Graham & James prior to July 1, 2000, only Graham & James, which did not modify its name to include reference to Deacons, maintained any offices in the United States or conducted any business in the United States. The court finds that Deacons, through its former affiliation with Graham & James, did not establish the contacts with the United States necessary to confer personal jurisdiction.
Williams makes an additional argument that service in New York on a partner of Graham & James was sufficient to confer personal jurisdiction on Deacons and Bowers, and cites First American Corp. v. Price Waterhouse LLP, 154 F.3d 16 (2d Cir.1998). The court finds this authority inapposite to the present proceeding. In Price Waterhouse, a plaintiff personally served a subpoena on a partner of PW-UK (a British partnership) while he was physically present in New York. The court in Price Waterhouse stated:
"There is no dispute that Mr. Newton was a partner in PW-UK in August 1997. And . . . Mr. Newton was served by hand in New York at that time." Id. at 19.
Williams urges the court to analogize his service in New York upon Lawrence Blume, a partner of Graham & James, and find it sufficient to confer personal jurisdiction on Deacons and all of its partners. This argument lacks merit. In the present matter, Williams does not allege that any partner of Deacons was served while physically present anywhere in the United States. Furthermore, service was made after July 1, 2000, the date on which Deacons and Graham & James terminated their affiliation.
The court concludes that the contacts alleged by Williams between the Hong Kong defendants and the United States are insufficient to satisfy the "minimum contacts" prong of the due process inquiry. Although not required to do so in light of this determination, the court further concludes that Williams has also not satisfied the reasonableness inquiry required under the due process analysis. See Metropolitan Life, 84 F.3d at 568. The circumstances recited in this opinion, including the purpose of the automatic stay,[9] Williams' response to the court at the motion hearing that he filed his bankruptcy petition solely to invoke the stay for the Hong Kong proceeding (and not, therefore, to seek debtor relief and a discharge from debt), and his dismissal of his bankruptcy case underscore the court's conclusion that it lacks any strong interest in adjudicating this matter.[10]
*243 IV.
CONCLUSION
In accordance with the foregoing discussion, the court concludes that it lacks personal jurisdiction over the Hong Kong defendants. The motion of the Hong Kong defendants to dismiss the adversary proceeding as to them in accordance with Fed.R.Civ.P. 12(b)(2) is granted and a judgment will so enter. It is
SO ORDERED.
NOTES
[1] Graham & James is a United States law firm.
[2] 11 U.S.C. § 362(h) provides:
(h) An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages.
[3] The court may consider the question of personal jurisdiction prior to its consideration of whether it has subject matter jurisdiction. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 119 S. Ct. 1563, 143 L. Ed. 2d 760 (1999).
[4] With one minor exception, not relevant to the matter at hand.
[5] The defendants include Kevin Bowers and Jonathan Harris, attorneys in the law firm Deacons, who represented the Law Society; the Law Society of Hong Kong, a corporation; Patrick Moss, general secretary of the Law Society; Herbert Hak-Kong Tsoi, president of the Law Society; the Privacy Commissioner for Personal Data, a corporation with certain duties and powers prescribed under Hong Kong ordinance; Stephen Lau Ka-men, the appointed Commissioner at all times relevant to this proceeding; Eric Pun, an attorney employed by the Commissioner; Tony Lam, an employee of the Commissioner; Deacons, a Hong Kong law firm with offices in Asia and Australia; Graham & James, a United States law firm associated with Deacons prior to July 1, 2000; and Mimi Leung, an employee of the Hong Kong government who is Secretary to the AAB.
[6] Williams had received permission to pay the filing fee of $185 in instalments with the first instalment due July 14, 2000. The full amount of the filing fee became due upon the dismissal of the bankruptcy case, and remains unpaid.
[7] Fed.R.Civ.P. 12(b)(2) provides that a defense of "lack of jurisdiction over the person" may be made by motion.
[8] Although the position was created and empowered by Hong Kong ordinance, the Commissioner does not have governmental immunity from the jurisdiction of the court: See Ord. CAP. 486 (Def.Ex.A) (Commissioner is a corporation "capable of suing and being sued," § 5(2)(b), and the Commissioner "shall not be regarded as a servant or agent of the Government or as enjoying any status, immunity or privilege of the Government," § 5(8)).
[9] The automatic stay is intended to provide a breathing spell to debtors and to prevent dissipation of estate assets. See H.R. No. 95-595, 95th Cong., 1st Sess. 340-42 (1977); S.R. No. 95-989, 95th Cong., 2d Sess. 49-51 (1978), U.S.Code & Admin.News 1978, pp. 5963, 5787.
[10] The interest of the forum in adjudicating the matter at issue is one of the five factors enumerated in Metropolitan Life, 84 F.3d at 568, in addition to (1) the burden on the defendant, (2) convenient, effective relief for the debtor; (3) interest of the judicial system; and (4) substantive social policies. The court has considered each of these factors and finds the scales tipped considerably in favor of the Hong Kong defendants. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368760/ | 793 F. Supp. 1083 (1992)
Tari Hasty JAHN, et al., Plaintiffs,
v.
WILSON FREIGHT LINES, INC., Defendant.
Civ. A. No. 87-343-1-MAC (WDO).
United States District Court, M.D. Georgia, Macon Division.
June 16, 1992.
*1084 Joseph H. Chambless; Joseph Edward Williams, Jr., Macon, Ga.; Virginia M. Buchanan, Robert J. Mayes, Fredric G. Levin, Pensacola, Fla.; and Donald S. Caulkins, Franklin, Tenn., for plaintiffs.
John C. Daniel, III and John C. Edwards, Macon, Ga., for defendant.
Thomas Clifton Woody, II, Macon, Ga., for Tari Jahn.
ORDER
OWEN, Chief Judge.
Before the court is the question of whether Tari Hasty Jahn, mother of Jacqueline Hasty, has the sole right to recover for the wrongful death of her deceased daughter. In making its determination, the court must decide whether or not Tari Hasty Jahn abandoned Jacqueline Hasty prior to her death. After careful consideration of the briefs of counsel and the record as a whole, the court hereby issues the following order.
FACTS
On August 10, 1987, Howard Hasty and his three young children (Jacqueline, Valerie, and Curtis Hasty) were travelling from Howard Hasty's mother's home in Winter Park, Florida to their home in Adams, Tennessee. As they were driving through Macon, Georgia, Howard Hasty's car collided with a tractor trailer owned by Wilson Freight Lines, Inc. ("Wilson"), which was parked in the emergency lane of Interstate 75. Both Howard and Jacqueline Hasty were killed. The two other children survived, but sustained severe head injuries.
On November 27, 1987, First Tennessee Bank, N.A. (as special guardian of Valerie and Curtis Hasty) and Mark Hasty (as legal guardian of Valerie and Curtis Hasty, and as personal representative of the estates of Howard and Jacqueline Hasty) filed the instant action against Wilson. On April 12, 1991, Tari Hasty Jahn ("Ms. Jahn"), Howard Hasty's ex-wife and Jacqueline Hasty's natural mother, moved for leave to intervene in the above-captioned matter as an additional plaintiff. The court granted her motion shortly thereafter.
Howard Hasty and Ms. Jahn were married on December 16, 1978. In 1981, Howard Hasty enlisted in the United States Army and departed for Germany. Ms. Jahn was pregnant with Jacqueline, born October 29, 1981, and remained in Winter Park, Florida. Ms. Jahn and the three children left for Germany in June of 1982 to join Howard Hasty. Within eight months of moving to Germany, Ms. Jahn and Howard Hasty's marital problems, including Ms. Jahn's extramarital affair, led to the Army's decision to send Ms. Jahn home. Howard Hasty retained sole custody of the children.
In March of 1985, Howard Hasty was discharged from the Army. Thereafter, Howard Hasty and the children moved back and forth from Tennessee to Florida. Ms. Jahn testified that periodically she would catch up with the children and talk with them by phone. See Ex. 24 (telephone toll records). Ms. Jahn saw Jacqueline a *1085 total of four times over a four year period prior to the accident. Jahn Dep. at 91.
Ms. Jahn subsequently gave birth to two more children (in 1983 and 1985), one of whom suffers from cerebral palsy.[1] This child has required constant and costly attention, including emergency surgery which has made travel to see the other children impracticable.
In March of 1987, Howard Hasty obtained a divorce by default judgment on grounds of desertion. The court awarded Howard Hasty absolute custody of the three children, but also granted Ms. Jahn reasonable visitation privileges. See Tab No. 120, Ex. A.
First Tennessee Bank and Mark Hasty ("plaintiffs") seek to prevent Ms. Jahn from pursuing this claim by alleging that she abandoned Jacqueline prior to Jacqueline's death. Plaintiffs rely on a Tennessee court order to support their contention. By his order of February 25, 1991, Judge Burton Glover, a judge in the Domestic Relations Court for Robertson County, Tennessee, concluded that Ms. Jahn had abandoned Curtis and Valerie Hasty, and further concluded that her parental rights in those kids were terminated. See Tab No. 142, Plaintiff's Ex. D.
DISCUSSION
O.C.G.A. § 19-7-1(c)(2)(B) states that "if either parent is deceased, the right [to recover for the death of a child] shall be in the surviving parent." However, the surviving parent loses the right to recover by "fail[ing] to provide necessaries for the child or abandon[ing] the child." O.C.G.A. § 19-7-1(b); Dove v. Carter, 197 Ga.App. 733, 735, 399 S.E.2d 216 (1990); Ramos v. Ramos, 173 Ga.App. 30, 33, 325 S.E.2d 415 (1984). The burden of proof is clear and convincing evidence. Ramos, 173 Ga.App. at 33, 325 S.E.2d 415. In the event there is no surviving parent, the personal representative of the estate is the proper party to recover the proceeds of such action for the next-of-kin, pursuant to O.C.G.A. § 51-4-5.
As an initial matter, the court finds that the afore-mentioned Tennessee court ruling, as well as the February 6, 1989 order of that court, are not binding on this court's determination of whether or not Ms. Jahn abandoned Jacqueline prior to her death. Those decisions were rendered after the collision and did not concern Ms. Jahn's parental relationship with Jacqueline. Consequently, the court will disregard the Tennessee orders dealing with the issue of Ms. Jahn's abandonment.
1. Failure to provide necessaries
"`It is a well-settled principle of law that the mere failure of a parent to provide support for a minor child who is in the possession or custody of another person, and no support of the child is requested or needed, is not a failure to provide necessaries. ...'" Howell v. Gossett, 234 Ga. 145, 147, 214 S.E.2d 882 (1975) (citations omitted). Jacqueline was in the custody of Howard Hasty at the time of her death. No court has ever required Ms. Jahn to pay child support. Furthermore, plaintiffs have presented no evidence to show that Ms. Jahn received any request to provide Jacqueline necessaries and failed to do so. Therefore, the court concludes that even if Ms. Jahn did not provide support for Jacqueline, her failure does not result in the loss of her parental rights.
2. Abandonment
"`In order to find an abandonment, there must be sufficient evidence of an actual desertion, accompanied by an intention to sever entirely, as far as possible to do so, the parental relation, throw off all obligations growing out of the same, and forego all parental duties and claims.'" In re J.C.P., 167 Ga.App. 572, 573, 307 S.E.2d 1 (1983) (citations omitted) (emphasis added). Attached to the affidavit Ms. Jahn submitted to this court are telephone toll records. See Ex. 24. An examination of these records reveals that in the two years preceding Jacqueline's death, Ms. Jahn telephoned Howard Hasty's mother's residence a total of sixty times. She telephoned *1086 Howard Hasty's residence five times. Furthermore, Ms. Jahn saw Jacqueline twice in 1984, once in 1985, and once in 1987 (the week before Jacqueline was killed). Jahn Dep. at 91. While Ms. Jahn's contribution to Jacqueline may have been "paltry," Ms. Jahn did not abandon her daughter prior to her death. See generally Dove, 197 Ga.App. at 735, 399 S.E.2d 216.
In conclusion, the court finds that plaintiffs have failed to show by clear and convincing evidence that Ms. Jahn actually deserted Jacqueline Hasty or intended to sever entirely her parental relationship with Jacqueline Hasty. Accordingly, the court concludes that Ms. Jahn has not forfeited her parental rights and therefore is the proper party to bring this action for Jacqueline Hasty's death.
SO ORDERED.
NOTES
[1] It is doubtful that Howard Hasty fathered either of these children. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265739/ | 239 P.3d 723 (2010)
Wenona DIAZ, Appellant,
v.
STATE of Alaska, DEPARTMENT OF CORRECTIONS; Jennifer Christensen; James Bowers; McHenry Detective Agency; William Parlier; Probation Officer Brown; Probation Officer III McCarron; and Probation Officer L. Williamson, Appellees.
No. S-13151.
Supreme Court of Alaska.
October 1, 2010.
*724 Kenneth W. Legacki, Anchorage, for Appellant.
Ruth Botstein, Assistant Attorney General, Anchorage, and Daniel S. Sullivan, Attorney General, Juneau, for Appellees Officers Conrad Brown, Terry McCarron, and Loyd Williamson.
Timothy M. Lynch, Lynch & Associates, P.C., Anchorage, for Appellees McHenry Detective Agency and William Parlier.
Before: CARPENETI, Chief Justice, FABE, WINFREE, and CHRISTEN, Justices.
OPINION
WINFREE, Justice.
I. INTRODUCTION
While serving a sentence in the Alaska Department of Corrections's (DOC) electronic monitoring program, Wenona Diaz worked for a time at a travel agency. Shortly after Diaz stopped working at the travel agency, DOC probation officers brought Diaz to her former employer's office. There the former *725 employer and the former employer's private detective questioned Diaz about alleged criminal conduct. The DOC officers then returned Diaz to a correctional center for the remaining four weeks of her sentence, where she was briefly segregated from the general population and had her telephone privileges restricted for a few days.
After Diaz's former employer was convicted of defrauding her own customers and the accusations against Diaz were abandoned, Diaz sued those involved in her interrogation and return to jail. The superior court granted summary judgment in favor of the DOC officers and the private detective and his agency. Diaz appeals only the superior court's ruling that these defendants did not violate her rights under the Fourth or Fourteenth Amendments to the United States Constitution.
We affirm the superior court's decision because: (1) Diaz's officer-escorted trip to and interrogation at the travel agency did not implicate her Fourth Amendment rights as she was already in DOC custody when the DOC officers "seized" her; (2) the DOC officers' actions, although disturbing, did not "shock the conscience" as required for a violation of the Fourteenth Amendment; (3) Diaz's return to prison, her day of segregation from the general population, and the two days of telephone restrictions did not deprive her of a liberty interest in violation of the Fourteenth Amendment because her freedom was not restrained in excess of her sentence and she did not experience an atypical or significant hardship in comparison to ordinary prison life; and (4) the private detective and his agency are not liable for conspiring with state officials to violate Diaz's constitutional rights because no such violation occurred.
II. FACTS AND PROCEEDINGS
A. Facts[1]
In late May 2003 Diaz had about one month of a felony sentence left to serve in DOC's electronic monitoring program. On May 21 private detective William Parlier called DOC to report that his client Jennifer Christensen had that day fired Diaz as an employee of her travel agency. Parlier reported that when Diaz was hired she had not told Christensen she was on felony supervision and that Diaz had since been taking files home, diverting clients' emails to outside accounts, charging items to clients' credit cards, and interrogating other employees for "dirt." The DOC officer who took Parlier's call provided the telephone number of the electronic monitoring department, which was supervised at that time by DOC Officer Terry McCarron.
On May 22 Christensen called Officer McCarron and alleged that Diaz stole from her while employed at her travel agency. Officer McCarron later testified at his deposition that Christensen's allegation on its own was sufficient to transfer Diaz from the electronic monitoring program to jail. Parlier went to Officer McCarron's office to coordinate an opportunity to ask Diaz questions, and Parlier there met DOC Officers Loyd Williamson and Conrad Brown. Officer McCarron directed the two DOC officers to investigate.
Officers Williamson and Brown contacted Diaz by telephone at her new place of employment and requested she meet them at her house as soon as possible, but did not explain why. Diaz complied by leaving work and taking a cab home. The DOC officers met her in her driveway and walked inside with her, where they informed her she had to go to Christensen's travel agency because there was a "concern about missing files." The DOC officers escorted Diaz to their van and put her in the caged-in back seat.
Officers Williamson and Brown took Diaz to the travel agency and escorted her inside. She waited in an office, guarded by one of the DOC officers, for somewhere between one and one-and-one-half hours. The DOC officer was between her and the door at all times, such that Diaz inferred she "was not to leave the room or be away from him."
*726 Diaz then was taken into another office in which Parlier's videocamera and several chairs were arranged. At some point that morning, Parlier, Christensen, and Officers Williamson and Brown had consulted and decided to videotape the questioning. Present in the office with Diaz were Christensen; her husband, James Bowers; Parlier; and Officers Williamson and Brown. Parlier directed the interrogation and asked prepared questions regarding embezzlement and theft of money and documents. Christensen and Bowers also asked Diaz questions in accusatory tones. Parlier videotaped the interrogation, but later lost the videotape. During the approximately 30-minute interrogation, Diaz denied all of the allegations against her and accused Christensen of being responsible for the embezzlement.
After the interrogation at the travel agency, Officers Williamson and Brown escorted Diaz back to her house. They searched her house and computer, but found no incriminating evidence.[2] Immediately following the search, the DOC officers took Diaz to the Anchorage jail. Within an hour of Diaz's transfer to jail, Christensen called Officer McCarron and alleged that Diaz was calling Christensen's clients from jail. Diaz's telephone access was then restricted so she could call only her lawyer. At the same time Diaz's cellmate was removed, and Diaz was segregated from the rest of the jail population. Prison records show Diaz was placed in segregation on May 22 at 5:00 p.m. and removed from segregation the following morning at 9:35 a.m.almost 17 hours. Diaz remained at the Anchorage jail for two days before being transported to Hiland Mountain Correctional Facility, where she was able to place calls to her family. Diaz served the time remaining on her sentence, about three weeks, in an institutional prison.
Christensen was indicted in April 2004 for defrauding her travel agency's clients and a credit card processing company of nearly $250,000, and later pled guilty to 20 counts of wire fraud and one count of credit card fraud.
B. Proceedings
In May 2005 Diaz filed suit against DOC, Christensen, Bowers, Parlier and his detective agency, and DOC Officers McCarron, Williamson, and Brown, asserting 42 U.S.C. § 1983 claims under the United States Constitution, among other claims.[3] Summary judgment was granted in November 2006 as to Bivens claims against Parlier and his agency under the United States and Alaska Constitutions[4] and § 1983 claims against Parlier's agency premised on respondeat superior.[5] At the same time, the § 1983 claim against DOC was dismissed, and Diaz *727 conceded she was not suing the DOC officers in their official capacities.[6] The superior court later granted summary judgment as to the remaining § 1983 claims against the DOC officers in their individual capacities and against Parlier and his detective agency for lack of constitutional violation upon which to base conspiracy. Final judgment dismissing all claims against DOC, the DOC officers, and Parlier and his detective agency was entered in May 2008.[7]
Diaz appeals the dismissal of her § 1983 claims against the DOC officers in their individual capacities and her § 1983 claims against Parlier and his detective agency, premised on conspiracy, all based on alleged violations of her rights under the Fourth and Fourteenth Amendments to the United States Constitution.
III. STANDARD OF REVIEW
We review the grant of summary judgment de novo.[8] "Drawing all reasonable inferences in favor of the nonmoving party, we will uphold summary judgment if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law."[9] We apply de novo review and our independent judgment to constructions of the United States Constitution.[10]
IV. DISCUSSION
An essential element to a § 1983 action is "conduct [that] deprived a person of rights, privileges, or immunities secured by the Constitution or laws of the United States."[11] Diaz argues that the DOC officers and Parlier and his detective agency violated her rights under the Fourth and Fourteenth Amendments to the United States Constitution.
A. The Officer-Escorted Trip To And Interrogation At The Travel Agency Did Not Violate Diaz's Federal Constitutional Rights.
Diaz asserts that her Fourth and Fourteenth Amendment rights were violated when the DOC officers, without giving her appropriate Miranda warnings,[12] escorted her to and held her at her former place of employment for a custodial interrogation conducted by private citizens.
The Fourth Amendment, made applicable to the states through the Due Process Clause of the Fourteenth Amendment, guarantees against unreasonable searches and seizures.[13] But the constitutionality of Diaz's officer-escorted trip to and interrogation at the travel agency is evaluated under the Fourth Amendment's protection against unreasonable seizures only if Diaz was not already in DOC custody.[14] If Diaz was already *728 in DOC custody when the DOC officers escorted her to the travel agency, the incident is instead evaluated under either the Fourteenth Amendment's substantive due process guarantee[15] or the Eighth Amendment's protection against cruel and unusual punishment.[16] Diaz never asserted a violation of her Eighth Amendment rights.
1. Fourth Amendment analysis
Under Alaska law a prisoner must be in DOC custody to earn good time credit the statutory one-third reduction of a prisoner's term of imprisonment earned by "follow[ing] the rules of the correctional facility in which the prisoner is confined."[17] A correctional facility is defined as "a prison, jail, camp, farm, half-way house, group home, or other placement designated by the commissioner for the custody, care, and discipline of prisoners."[18] Diaz was designated to serve her sentence at home in the electronic monitoring program, and she received good time credit for the time she spent in the program.[19] Diaz therefore was in DOC custody while serving her sentence in the electronic monitoring program.[20]
Diaz also was in DOC custody in the sense that she could have been prosecuted for escape had she removed the monitoring device *729 or traveled outside permitted locations.[21] In holding that a sentenced prisoner had committed escape when he removed his electronic monitoring device and visited a tavern outside the area permitted by the conditions of his release, an Ohio appellate court stated that electronically monitored house arrest "constitutes confinement in a facility for custody of persons convicted of a crime."[22] In Lock v. State we similarly reasoned that the fact that a probationer had committed escape when he left a court-ordered residential rehabilitation program indicated that he had been "subjected to severe restraints on his freedom of movement" and therefore was in custody for purposes of entitlement to day-for-day credit.[23]
Because Diaz earned good time credit and was subject to prosecution for escape while in the electronic monitoring program, she was already in DOC custody when she was "seized" by the DOC officers. Therefore her officer-escorted trip to and interrogation at the travel agency cannot have violated her Fourth Amendment guarantee against unreasonable seizures.[24]
2. Fourteenth Amendment analysis
Diaz asserts she was "subjected to interrogation without any due process, and without any advisement of her constitutional rights." She clarifies her argument is not that she was forced to testify against herself in violation of the Fifth Amendment,[25] but rather that she was unlawfully seized and interrogated in violation of the Fourteenth Amendment. Fourteenth Amendment substantive due process rights are violated when police misconduct in pursuit of incriminating statements "shocks the conscience."[26]
Conscience-shocking interrogations typically involve physical or psychological abuse.[27] An illustration of potentially conscience-shocking interrogation conduct occurred in Chavez v. Martinez,[28] where a police officer "made no effort to dispel [a man's] perception that medical treatment [for his facial gunshot wound would be] withheld until [he] answered the questions put to him."[29]
Taking the evidence in the light most favorable to Diaz, the DOC officers subjected her to a custodial interrogation by civilians at her former place of employment without giving *730 her an appropriate Miranda warning. But Diaz has not alleged or provided evidence suggesting she was mentally or physically coerced or abused during the interrogation. Although we certainly do not condone the DOC officers' decision to make Diaz available for interrogation in this manner by her civilian accusersin other circumstances such a decision could lead to unfortunate acts of vigilantismthe DOC officers' conduct bothers the conscience but does not shock it as required for a Fourteenth Amendment violation.
B. The Transfer To Prison, Day Of Segregation From The General Population, And Two Days Of Telephone Restrictions Did Not Violate Diaz's Federal Constitutional Rights.
Diaz asserts that she was deprived of a liberty interest without due process when "she was remanded to the institutional jail, put in solitary confinement," and "denied access to a telephone to call her family."[30]
The Fourteenth Amendment protects against the deprivation of "life, liberty, or property" without adequate process of law.[31] It applies to "the deprivation of an individual interest of sufficient importance to warrant constitutional protection."[32] The point at which restraints on a convicted prisoner's freedom implicate a federal-constitution-based liberty interest requiring due process of law is when her freedom is restrained in excess of her sentence in an unexpected manner.[33] For example, due process requirements apply to parole revocations if a parolee returned to prison does not receive credit against her sentence for time spent subject to the conditions of parole.[34] In contrast, the time Diaz spent in the DOC's electronic monitoring program counted against her sentence. Therefore her transfer to the Anchorage jail, her segregation from the general population, and her telephone restrictions did not implicate a liberty interest based in the Fourteenth Amendment because they did not prolong her sentence.[35]
A liberty interest that is protected by the United States Constitution may also be created by state law.[36] In Sandin v. *731 Conner, a civil rights suit brought by a prisoner, the United States Supreme Court held that generally the only state-created liberty interests protected by the Fourteenth Amendment are those in freedom from restraints which "impos[e] atypical and significant hardship on the inmate in relation to the ordinary incidents of prison life."[37]
DOC's policies and procedures manual describes the electronic monitoring program as "[a] form of incarceration for offenders"[38] that provides "a cost effective alternative to the use of hard correctional facility beds for appropriate prisoners."[39] To participate in the electronic monitoring program a prisoner must meet certain criteria, including being within two years of a projected release date and being assigned to either the minimum or medium custody level.[40] The DOC manual provides that if a participant does not comply with program requirements, she will be returned to a correctional center or community residential center and reassigned to a new custody level through a designation process.[41]
Although Diaz argues her removal from the electronic monitoring program deprived her of her liberty interest in rehabilitation as created by article I, section 12 of the Alaska Constitution,[42] transferring Diaz back to an institutional prison did not create an atypical or significant hardship in comparison to ordinary prison life because it was simply a return to ordinary prison life.[43] Nor did segregating Diaz from the general prison population for less than a day[44] or restricting her telephone privileges for two days[45] create an atypical or significant hardship. Therefore Diaz did not have a state-law-based liberty interest protected by the federal constitution in continued participation in *732 an electronic monitoring program, in not being placed in segregated confinement, or in enjoying full telephone privileges.
C. Parlier And His Detective Agency Are Not Liable Under § 1983 For Conspiring To Violate Diaz's Fourth And Fourteenth Amendment Rights Because Those Rights Were Not Violated.
Diaz asserts that private parties "are liable under 42 U.S.C. § 1983 . . . if they willfully participate in a joint action with State officials to deprive another of . . . constitutional rights." Parlier responds that "[a]ny claim for damages under § 1983 requires a violation of a constitutionally protected right." We agree that Parlier and his detective agency were entitled to summary judgment because they could not have conspired with state actors to deprive Diaz of her constitutional rights, given that the officer-escorted trip to and interrogation at the travel agency, the transfer back to jail, the temporary segregated confinement, and the telephone restrictions did not deprive her of those rights.[46]
V. CONCLUSION
For the reasons stated above, we AFFIRM the summary dismissal of Diaz's claims.[47]
EASTAUGH, Justice, not participating.
NOTES
[1] We accept the facts as alleged by Diaz and make all reasonable inferences in her favor because this case was resolved against her on summary judgment. See Trombley v. Starr-Wood Cardiac Group, PC, 3 P.3d 916, 918 n. 1 (Alaska 2000).
[2] As a participant in DOC's electronic monitoring program, Diaz had consented to searches of her residence for the presence of contraband or to verify compliance with the program's terms and conditions.
[3] 42 U.S.C. § 1983 allows for a direct action against persons who have violated federal constitutional or statutory rights while acting under color of law. State, Dep't of Health & Soc. Servs., Div. of Family & Youth Servs. v. Native Vill. of Curyung, 151 P.3d 388, 392 (Alaska 2006) (citing Maine v. Thiboutot, 448 U.S. 1, 100 S. Ct. 2502, 65 L. Ed. 2d 555 (1980)).
[4] A "Bivens claim," named for Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 397, 91 S. Ct. 1999, 29 L. Ed. 2d 619 (1971), is a direct cause of action for compensatory damages against an individual federal official who violates federal constitutional rights. Id. (concerning action for violation of Fourth Amendment); Bush v. Lucas, 462 U.S. 367, 376-78, 103 S. Ct. 2404, 76 L. Ed. 2d 648 (1983) (discussing Bivens actions for violation of the First Amendment, the Due Process Clause of the Fifth Amendment, and the Eighth Amendment). The superior court determined that a federal Bivens claim cannot be brought without the involvement of a federal officer, and that a state Bivens claim will not be recognized when alternative statutory or common law remedies exist. We have stated "we will not [allow] a private cause of action for damages under the Alaska Constitution `except in cases of flagrant constitutional violations where little or no alternative remedies are available.'" Hertz v. Beach, 211 P.3d 668, 677 n. 12 (Alaska 2009) (quoting Lowell v. Hayes, 117 P.3d 745, 753 (Alaska 2005)). Diaz does not pursue an appeal of this ruling.
[5] The superior court concluded the respondeat superior doctrine does not apply in § 1983 cases, citing to Prentzel v. State, Dep't of Pub. Safety, 53 P.3d 587, 595 n. 46 (Alaska 2002). Diaz does not pursue an appeal of this ruling.
[6] See Will v. Mich. Dep't of State Police, 491 U.S. 58, 71, 109 S. Ct. 2304, 105 L. Ed. 2d 45 (1989) ("[N]either a State nor its officials acting in their official capacities are `persons' under § 1983."). Diaz does not pursue an appeal of this ruling.
[7] The final judgment did not address Diaz's claims against Christensen and Bowers except to note that defamation claims were dismissed by stipulation.
[8] Sowinski v. Walker, 198 P.3d 1134, 1143 (Alaska 2008).
[9] Nichols v. State Farm Fire & Cas. Co., 6 P.3d 300, 303 (Alaska 2000) (citing Shade v. CO & Anglo Alaska Serv. Corp., 901 P.2d 434, 437 (Alaska 1995)).
[10] State, Dep't of Revenue v. Andrade, 23 P.3d 58, 65 (Alaska 2001) (citing Waiste v. State, 10 P.3d 1141, 1144 (Alaska 2000)).
[11] Parratt v. Taylor, 451 U.S. 527, 535, 101 S. Ct. 1908, 68 L. Ed. 2d 420 (1981), overruled on other grounds by Daniels v. Williams, 474 U.S. 327, 330-31, 106 S. Ct. 662, 88 L. Ed. 2d 662 (1986). The other essential element is that "the conduct complained of was committed by a person acting under color of state law." Id. at 535, 101 S. Ct. 1908.
[12] Under Miranda v. Arizona, law enforcement officers are required prior to interrogating a suspect in custody to give a warning about the right to remain silent, the right to the presence of a retained or appointed attorney, and the possibility that any statements made may be used as evidence. 384 U.S. 436, 444, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966); accord State v. Salit, 613 P.2d 245, 257 (Alaska 1980).
[13] U.S. CONST. amend. IV; Lemon v. State, 514 P.2d 1151, 1157 n. 13 (Alaska 1973) (citing Mapp v. Ohio, 367 U.S. 643, 81 S. Ct. 1684, 6 L. Ed. 2d 1081 (1961)).
[14] See generally U.S. v. Childs, 277 F.3d 947, 950 (7th Cir.2002) ("[A]n officer may interrogate a person in prison on one offense about the possibility that the inmate committed another. This is normal and, as far as we can tell, of unquestioned propriety as far as the fourth amendment is concerned, whether or not the officer has probable cause to believe that the inmate committed any other crime . . . . [t]he idea that the police could violate a prisoner's [F]ourth amendment rights by asking questions in search of information about other offenses has no basis in the language of that amendment or the Supreme Court's cases."); Johnson v. City of Cincinnati, 310 F.3d 484, 491 (6th Cir.2002) (remarking that "[t]he Fourth Amendment does not apply post-conviction" and that, whatever the duration of the Amendment's protections, the relevant analytical period exists "along the pretrial continuum" after which eventually "the Fourth Amendment's protection gives way to the protection of another Amendment"); Riley v. Dorton, 115 F.3d 1159, 1163-64 (4th Cir.1997) (holding that analysis of seizures under the Fourth Amendment applies only to an initial seizure, and subsequent conditions of detention are properly examined under the Fourteenth Amendment), abrogated by Wilkins v. Gaddy, ___ U.S. ____, 130 S. Ct. 1175, 1177, ___ L.Ed.2d ____ (2010) (overruling Riley on Eighth Amendment grounds); Cottrell v. Caldwell, 85 F.3d 1480, 1490 (11th Cir.1996) ("Claims involving the mistreatment of arrestees or pretrial detainees in custody are governed by the Fourteenth Amendment's Due Process Clause instead of the Eighth Amendment's Cruel and Unusual Punishment Clause, which applies to such claims by convicted prisoners."); Wilkins v. May, 872 F.2d 190, 192-93 (7th Cir.1989) (noting that, upon conviction, the "the fact, manner, or duration of" a prisoner's "continued confinement is unconstitutional passes over from Fourth Amendment to . . . the Eighth Amendment"); Williams v. Boles, 841 F.2d 181, 183 (7th Cir. 1988) (holding that, against Fourth Amendment challenge, a "judgment convicting [a criminal] extinguish[es], for the duration of his sentence, his interest in privacy and personal mobility . . . the applicable provision is the Cruel and Unusual Punishments Clause of the [E]ighth [A]mendment"); Rizzo v. Dawson, 778 F.2d 527, 530 (9th Cir.1985) (dismissing a prisoner's objection to transfer within a prison system as against the Fourth Amendment as having "no basis in law").
[15] See Chavez v. Martinez, 538 U.S. 760, 779-80, 123 S. Ct. 1994, 155 L. Ed. 2d 984 (2003) (remanding for a determination whether officer's misconduct in pursuit of a confession was so egregious that it violated the Fourteenth Amendment's substantive due process guarantee); see also id. at 773, 123 S. Ct. 1994 (Thomas, J., plurality) (noting that police torture or other abuse resulting in a confession is evaluated under the Fourteenth Amendment's Due Process Clause).
[16] The Eighth Amendment, through the Due Process Clause of the Fourteenth Amendment, forbids state prison officials from imposing "cruel and unusual punishments." U.S. CONST. amend. VIII; Farmer v. Brennan, 511 U.S. 825, 832, 114 S. Ct. 1970, 128 L. Ed. 2d 811 (1994). "[T]he less protective Eighth Amendment standard applies `only after the State has complied with the constitutional guarantees traditionally associated with criminal prosecutions.'" Graham, 490 U.S. at 398-99, 109 S. Ct. 1865 (quoting Ingraham v. Wright, 430 U.S. 651, 671 n. 40, 97 S. Ct. 1401, 51 L. Ed. 2d 711 (1977)).
[17] AS 33.20.010(a); State v. Bourdon, 193 P.3d 1209, 1210 (Alaska App.2008).
[18] AS 33.30.901(4); Bourdon, 193 P.3d at 1210.
[19] Diaz's March 11, 2003, sentencing preceded the effective date of ch. 24, § 31, SLA 2007 (codified at AS 33.20.010(c)), which provides that prisoners cannot receive good time credit for time spent under electronic monitoring.
[20] See Matthew v. State, 152 P.3d 469, 473 (Alaska App.2007) (citing AS 33.30.065) (referring to sentenced prisoners assigned to serve part of their terms of imprisonment in electronic monitoring as "already in the custody of the Department of Corrections").
[21] AS 11.56.310(a)(3) (providing that a person serving a felony sentence in an electronic monitoring program commits the crime of escape in the second degree if, without lawful authority, that person "removes, tampers with, or disables the electronic monitoring equipment" or leaves the places designated for service of that sentence).
[22] State v. Long, 82 Ohio App. 3d 168, 611 N.E.2d 504, 505-06 (1992) (emphasis added).
[23] 609 P.2d 539, 545-47 (Alaska 1980).
[24] We express no opinion whether we would reach the same conclusion had Diaz been sentenced after the effective date of AS 33.20.010(c). See note 19, above. Our conclusion does not suggest that a prisoner in Diaz's situation would not have Fourth Amendment protection against seizures by law enforcement officers other than DOC officers.
[25] During the interrogation Diaz did not give any statement that was used against her in any proceeding.
[26] Crowe v. Cnty. of San Diego, 608 F.3d 406, 431 (9th Cir.2010) (quoting Rochin v. California, 342 U.S. 165, 172, 72 S. Ct. 205, 96 L. Ed. 183 (1952)); accord Church v. State, Dep't of Revenue, 973 P.2d 1125, 1130 (Alaska 1999) ("A [substantive] due process claim will only stand if the state's actions `are so irrational or arbitrary, or so lacking in fairness, as to shock the universal sense of justice.'") (quoting Application of Obermeyer, 717 P.2d 382, 386-87 (Alaska 1986)).
[27] See Crowe, 608 F.3d at 431-32; see also McConkie v. Nichols, 446 F.3d 258, 261 (1st Cir.2006) ("Conscience-shocking conduct usually entails physical or psychological abuse, or significant interference with a protected relationship, such as the parent-child relationship."); Cooper v. Dupnik, 963 F.2d 1220, 1223, 1248-50 (9th Cir.1992) (noting "brutality by police or prison guards is one paradigmatic example of a substantive due process violation, [but] does not exhaust the possibilities" and holding it was conscience-shocking when police tried to extract a confession through "sophisticated psychological torture" with the "purpose of making it difficult, if not impossible, for [a charged] suspect to take the stand in his own defense" and of "curtailing [his] right to present an insanity defense"), overruled on other grounds by Chavez, 538 U.S. at 773, 123 S. Ct. 1994 (Thomas, J., plurality).
[28] 538 U.S. at 779-80, 123 S. Ct. 1994.
[29] Id. at 798, 123 S. Ct. 1994 (Kennedy, J., concurring in part and dissenting in part).
[30] Diaz also argues that she had a property interest in the right to participate in the electronic monitoring program. Because she raised this issue for the first time in her reply brief, we deem it waived. See Maines v. Kenworth Alaska, Inc., 155 P.3d 318, 326 (Alaska 2007) (citing Crittell v. Bingo, 83 P.3d 532, 536 n. 19 (Alaska 2004)).
[31] Zinermon v. Burch, 494 U.S. 113, 125, 110 S. Ct. 975, 108 L. Ed. 2d 100 (1990).
[32] Larson v. Cooper, 90 P.3d 125, 135 (Alaska 2004) (quoting Matson v. Commercial Fisheries Entry Comm'n, 785 P.2d 1200, 1206 (Alaska 1990)).
[33] See Sandin v. Conner, 515 U.S. 472, 484, 115 S. Ct. 2293, 132 L. Ed. 2d 418 (1995) (noting the Due Process Clause of its own force protects an interest in freedom from restraint exceeding the sentence in an unexpected manner); see also Larson, 90 P.3d at 134 ("[U]nder the federal constitution's Fourteenth Amendment, `[a]s long as the conditions or degree of confinement to which the prisoner is subjected is within the sentence imposed upon him and is not otherwise violative of the Constitution, the Due Process Clause does not in itself subject an inmate's treatment by prison authorities to judicial oversight.'") (quoting Kentucky Dep't of Corr. v. Thompson, 490 U.S. 454, 460-61, 109 S. Ct. 1904, 104 L. Ed. 2d 506 (1989)).
[34] See Morrissey v. Brewer, 408 U.S. 471, 480-82, 92 S. Ct. 2593, 33 L. Ed. 2d 484 (1972). This is the case in Alaska, where "the time [a] parolee was at liberty on parole does not alter the time the parolee was sentenced to serve." AS 33.16.240(f). In Young v. Harper, the United States Supreme Court held convicts in Oklahoma's pre-parole program had the same liberty interest as those in its parole program because the two programs were distinct in name only. 520 U.S. 143, 144-45, 117 S. Ct. 1148, 137 L. Ed. 2d 270 (1997). In that program both parolees and pre-parolees were eligible for deductions against their sentences for time spent on parole. Id. at 149, 117 S. Ct. 1148.
[35] See Sandin, 515 U.S. at 476, 484, 487, 115 S. Ct. 2293 (rejecting argument that prisoner had a liberty interest under the Due Process Clause in remaining free from disciplinary segregation because the underlying record of misconduct would not inevitably affect sentence duration); Larson, 90 P.3d at 134 (citing Hewitt v. Helms, 459 U.S. 460, 468, 103 S. Ct. 864, 74 L. Ed. 2d 675 (1983)) ("[T]he guarantee of due process does not provide . . . a right to avoid segregation from the general prison population.").
[36] Sandin, 515 U.S. at 483-84, 115 S. Ct. 2293 ("States may under certain circumstances create liberty interests which are protected by the Due Process Clause.").
[37] Id. at 484, 115 S. Ct. 2293; accord Larson, 90 P.3d at 135.
[38] State of Alaska Department of Corrections Policies and Procedures (P & P) Definition 818.14(B).
[39] P & P Purpose 818.14.
[40] P & P Procedure 818.14(A)(4).
[41] P & P Procedure 818.14(G). We also note that AS 33.30.065(c) provides:
A decision by the commissioner to designate a prisoner to serve a term of imprisonment or a period of temporary confinement, or a part of the term or period, by electronic monitoring does not create a liberty interest in that status for the prisoner. The prisoner may be returned to a correctional facility at the discretion of the commissioner.
This statutory provision, although not determinative in our independent review, indicates that the legislature did not intend to create a liberty interest in participation in the electronic monitoring program.
[42] Article I, section 12 of the Alaska Constitution identifies the principle of reformation as one basis of criminal administration. See, e.g., Ferguson v. State, Dep't of Corr., 816 P.2d 134, 139-40 (Alaska 1991) (holding prisoners have protected liberty interest in continued participation in rehabilitation programs based on the reformation clause); Rathke v. Corr. Corp. of Am., Inc., 153 P.3d 303, 306-09 (Alaska 2007) (deeming colorable an inmate's claim that he was entitled to due process before he could be placed in punitive segregation for 30 days because of his state-constitutional interest in rehabilitation).
[43] See, e.g., Dominique v. Weld, 73 F.3d 1156, 1159-61 (1st Cir.1996) (holding removal of convicted prisoner from community work release program did not implicate a state-created liberty interest because "his transfer to a more secure facility subjected him to conditions no different from those ordinarily experienced by large numbers of other inmates serving their sentences in customary fashion").
[44] Sandin, 515 U.S. at 484, 486, 115 S. Ct. 2293 (holding 30 days in administrative segregation "did not present the type of atypical, significant deprivation in which a State might conceivably create a liberty interest" protected by the federal constitution). Because Diaz confined her arguments on appeal to her § 1983 claims under the United States Constitution, whether a prisoner's freedom from punitive segregation is a liberty interest protected by the due process clause of the Alaska Constitution has no bearing on this appeal. See Brandon v. State, Dep't of Corr., 73 P.3d 1230, 1234 (Alaska 2003) (noting that due process guarantee of Alaska Constitution applies more broadly than identical provision of the United States Constitution and that "under the Alaska Constitution punitive segregation of a prison inmate following a major disciplinary infraction is a deprivation of liberty sufficient to trigger the right to due process.") (citing McGinnis v. Stevens, 543 P.2d 1221, 1236-37 (Alaska 1975)).
[45] Tanney v. Boles, 400 F. Supp. 2d 1027, 1040 (E.D.Mich.2005) (holding telephone restriction for disciplinary reasons is not an "atypical and significant hardship" and therefore did not implicate liberty interest protected by the Fourteenth Amendment).
[46] See Adickes v. S.H. Kress & Co., 398 U.S. 144, 150-52, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970) (noting § 1983 recovery against a private entity for conspiracy requires proof of a deprivation of a right secured by the Constitution or laws of the United States).
[47] Having determined that Diaz's Fourth and Fourteenth Amendment rights were not violated, we do not reach her argument that the defendants were strictly liable under § 1983 or the DOC officers' argument that they were entitled to qualified immunity. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265763/ | 69 F. Supp. 125 (1947)
WALSH BROS.
v.
UNITED STATES.
No. 46046.
Court of Claims.
January 6, 1947.
Fred W. Shields, of Washington, D. C. (Henry M. Leen, of Boston, Mass., and George R. Shields and King & King, all of Washington, D. C., on the brief), for plaintiff.
Grover C. Sherrod, of Washington, D. C., and John F. Sonnett, Asst. Atty. Gen., for defendant.
Before WHALEY, Chief Justice, and LITTLETON, WHITAKER, JONES, and MADDEN, Judges.
MADDEN, Judge.
The plaintiff is a partnership which, on November 6, 1940, made a contract with the United States to construct temporary barracks at two forts in Maine and three in Massachusetts for $748,000. The Government issued its invitation for bids on October 24, 1940, and issued addenda thereto on October 29 and October 30. The proposed contract, specifications, and drawings sent out with the invitations for bids did not purport to show where the numerous buildings would be located on the areas of the forts. But the specifications, under the heading "Special Conditions," in paragraph 2, said that not less than five days prior to the opening of bids the constructing quartermaster would locate the position of each structure, and location stakes were accordingly placed.
The plaintiff's first claim is that, when it began to excavate for the foundations for some of the buildings at Fort Strong, Massachusetts, it encountered some old foundations, and was put to heavy expense *126 in bringing in special machinery and in extra labor to overcome these obstacles. The plaintiff says that the existence and location of these old foundations were sub-surface and latent conditions which brought into play the provisions of article 4 of the contract which provided that an equitable adjustment should be made to compensate the contractor for extra expense caused by such conditions.
The Government says that the old foundations were not latent, but that parts of them were visible at the surface of the ground and would have put one who visited the site on notice of what might be expected under ground. We have found that this was true. The plaintiff concedes that the old foundations at Fort Andrews were visible, but says that the service club building which was originally planned for the site of the old foundations was eliminated by an addendum on October 29, and a recreation building was added which was placed in the same location. This seems to us to be immaterial. We note that the plaintiff did not, in fact, visit either site before making its bid. We think the plaintiff's first claim is not well founded.
The plaintiff's second claim is for extra wages paid to carpenters above the eighty cents per hour wage which was named in the contract as the minimum wage which must be paid. The facts in regard to this claim appear in finding 6. The Special Conditions of the specifications, paragraph 8, stated that eighty cents an hour had been determined by the Secretary of Labor to be the prevailing rate of wages in the vicinity of Forts Levett and McKinley, in Maine. This statement was true. But on October 24, which happened to be the day the invitations for bids, containing these specifications, were sent out, the carpenters union in the area had decided to demand $1.00 per hour, beginning November 15, and to refuse to work for less. So far as appears, neither the Government nor the plaintiff knew this when they made their contract on November 6. From November 15, the plaintiff was obliged to pay the higher wages and it sues for the difference. It may not recover. The Government's statement in the specifications was only a statement of an existing fact. It was not a warranty that, within the period of performance of the contract, workmen would not demand increases in wages. This case is different from that of Albert & Harrison, Inc. v. United States, Ct.Cl., 68 F. Supp. 732, in which the Government's statement as to what the prevailing wage had been found by the Secretary of Labor to be, was erroneous.
The plaintiff's third claim is for excavation, and its sixth claim is for fill, which, it says, it was required to make, but was not bound by its contract to make. Paragraph 2 of the Special Conditions of the specifications is copied in full in finding 7. It says, inter alia:
"* * * The natural grade of the site will be the finished grade, except where it must be altered to prevent the accumulation of water under and about the buildings as required by the specifications.
* * * * * * *
"The amount of excavating and backfilling is in no way affected by the variation in grade level; therefore, excavating will not be considered as an extra to the contract in any degree.
* * * * * * *
"On account of the irregular nature of the terrain at all of the building locations, the contractor shall be absolutely certain of the conditions by personal examination of the site before submitting a proposal. No appeal for extras will be entertained because of ground conditions except as described above."
Paragraph 2 of the General Conditions of the specifications, quoted in finding 4, said:
"Visiting site. The bidder should visit the site and acquaint himself as to local conditions, availability of water, electric power, roads, soil conditions and the relation of finished grade of the building to existing grades and the natural surface of the ground."
As appears in finding 4, the invitation for bids stated that not less than five days prior to opening of bids the location of each building would be staked out on the ground, and the "definite grade of floor" shown.
*127 The buildings were staked out, at the forts to which this claim relates, at the time promised. But several of the buildings at Fort Andrews and at Fort Banks were not staked out to make the natural grade the finished grade as paragraph 2 of the Special Conditions of the specifications said they would be. Instead, the grade marks on the stakes showed that they were to be built on a level terrace, formed by a considerable excavation on the uphill side and a corresponding fill on the downhill side of the buildings. The unit price stated in the contract for extra-excavation was $3 per cubic yard and for extra fill $2. At these prices the proper charges for excavation and fill, respectively, in excess of what would have been required if the natural grade had been adhered to, would be $10,051.80 and $1,178.
This claim is difficult to resolve. On the one hand, the Government's statement that the natural grade of the site would be the finished grade, is clear and unequivocal. It meant that a contractor would not have to do more than cut off small humps and fill up small depressions that did not conform to the general slope of the land; would have to build his chimneys and steps to the natural surface, wherever that might be, and would be paid extra if any of his piers or walls were more than seven feet high. Upon this clear statement, a contractor could, with substantial accuracy, and this plaintiff did, compute its costs in its office without visiting the site to look at the grade stakes.
On the other hand, the several admonitions in the contract papers about the necessity for visiting the site and seeing the location of the buildings and the relation of the finished grade of the buildings to existing grades and the natural surface of the ground, and the warning that excavating would not be considered as an extra "in any degree," are certainly pointed, though the point of the last item is dulled somewhat by the provision in the contract for an agreed unit price for extra excavation.
On the whole, we think the plaintiff should recover on these claims for extra excavation and fill. We think that the terracing of the buildings instead of letting them stand on the natural grade had nothing whatever to do with preventing the accumulation of water under and about them. The best possible run-off of water from such structures, located as they were on hillsides, would be the natural drainage. We think therefore that the persons who staked out the buildings either were not familiar with or paid no attention, in these cases, to what was written in the specifications. The time allowed between the invitation and the opening of the bids was short, the locations were promised only five days before the opening, a large number of projects at different locations were submitted to the same contractors for bids, and it was not, we think, strange that the plaintiff should have assumed that it could rely on the clear statement as to how the buildings were to be located with reference to the natural grade. We think that it had a right to so rely, without subjecting itself to the peril that grades on the ground would not conform at all to the statement in the specifications.
The plaintiff's fourth claim is for extra expense which it incurred because other contractors installing water and sewer lines, dug trenches in its access roads to its work, making it necessary for it to carry some of the materials by hand during the period of the interference. The plaintiff must have been aware that these utilities' services would have to be installed while its work was being done. It was building these barracks in a hurry for expected incoming troops, and knew that immediate occupancy was necessary. Its contract, and that of the utility contractors, provided for other contemporaneous work of other contractors and required that they coordinate their work. The plaintiff does not complain that the other contractors were not considerate of its interests, or made its situation any more difficult than was necessary. Its complaint seems to be that the Government should not have permitted the utility contractors to do their work at the time they did it. We think this claim is not well founded.
The plaintiff's fifth claim is that the Government should not have deducted, as it did, the sum of $5,615 in liquidated damages for late completion of the contract. There *128 was late completion of various buildings and the amount deducted was properly computed in accordance with the applicable provisions of the contract. But the plaintiff says the late completion was excusable under article 9 of the contract, which is quoted in finding 9. The delay was caused by difficulties which the plaintiff's subcontractor for the heating equipment had in obtaining the equipment and the sheet metal workers necessary to install it. When the money was withheld by the Government from the plaintiff, it, in turn, withheld the same amount in its settlement with its subcontractor, and is here suing on this claim for the benefit of its subcontractor.
We think that it has not been shown that the delay in question, or any definite part of it, was excusable within the meaning of article 9 of the contract. There was severe competition for the available supply of heating materials and labor, but we think the proof does not show that the scarcity arose from unforeseeable causes of the kind covered by article 9.
The plaintiff is entitled to recover $11,229.80 on its claims Nos. 3 and 6.
It is so ordered.
JONES, WHITAKER, and LITTLETON, Judges, concur.
WHALEY, Chief Justice (dissenting).
I think the plaintiffs are entitled to recover the wages prevailing in the environment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265767/ | 69 F. Supp. 297 (1946)
COHEN (COHEN, Intervener)
v.
BENEFICIAL INDUSTRIAL LOAN CORPORATION et al.
Civ. No. 3033.
District Court, D. New Jersey.
December 18, 1946.
*298 Wall, Haight, Carey & Hartpence, of Jersey City (Edward J. O'Mara, of Jersey City, N. J., of counsel), for plaintiff.
Charles Hershenstein, of Jersey City, N. J., for intervener.
Pitney, Hardin, Ward & Brennan, of Newark, N. J. (John Milton, of Jersey City, N. J., of counsel), for individual defendants, O. W. Caspersen, John Budd Smith, Roy E. Tucker, Everett T. Felter, Jackson R. Collins, and C. V. Smith.
Hood, Lafferty & Emerson, of Newark, N. J., for defendant Beneficial Loan Corporation.
MEANEY, District Judge.
This action, a stockholder's derivative suit, was instituted by Sol Cohen in 1943, as the holder of 100 shares of Common Stock which had been acquired by purchase in 1937, and seeks the appointment of a receiver and an accounting for funds and assets which it is alleged the individual defendants fraudulently diverted and appropriated to their own use.
David F. Cohen, as holder of 150 shares of the corporation's common stock, intervened as a party plaintiff. On February 14, 1946, by order of the court, Hannah Cohen, executrix of the estate of Sol Cohen, deceased, was substituted as plaintiff.
The matter is presently before the court on motions by the individual defendants for an order dismissing the fourth, fifth, sixth, seventh, and ninth causes of action alleged in the amended complaint, and for a more definite statement or a bill of particulars, *299 and in opposition to a counter-motion made by the plaintiff for leave to take depositions and for issuance of subpoenas duces tecum.
The motions to dismiss are made under the provisions of rule 12(b) (6) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, upon the ground that none of the said causes of action state a claim upon which relief can be granted.
The defendants seek a dismissal of the fourth alleged cause of action on the above grounds and more specifically, on the ground that it fails to charge any identified persons with the commission of the alleged wrongful acts.
The fourth cause of action charges specifically that one, Clarence Hodson II, was, up to the time of his death, paid by the defendant corporation a salary of approximately $25,000 per annum, although he rendered no service whatsoever to the company. As a result, thereof, plaintiff charges that Clarence Hodson II was placed in a privileged position, unlawfully receiving at the order and direction of the individual defendants who were officers and directors of the defendant corporation, large sums of money.
The objection to the fourth cause of action is not found by the court to be of such nature as to compel a dismissal thereof. The pleadings set forth sufficiently specific identification, as far as the individual defendants are concerned, to establish adequate basis for an appropriate cause of action. The fourth cause will accordingly be allowed to stand, and defendants' motion directed to it is denied.
The fifth cause of action, against which the defendants likewise seek a dismissal, charges that at or after the time of incorporation of the defendant, Industrial, in May, 1929, it acquired the combined assets of the former Beneficial Industrial Loan Corporation, American Loan Company and Industrial Bankers of America, and at the same time assumed all the liabilities of the three aforementioned companies.
Prior to the acquisition of such assets, it is alleged that the former Beneficial Loan Corporation, one of the acquired companies, was organized and had acquired assets of three other loan companies by the issuance of 1,250,000 shares of its capital stock. It is further charged that at the time of the issuance of those shares, the former Beneficial Industrial Loan Corporation wrote up the value of the assets transferred from the three companies from which they were acquired, by more than eight million dollars and that the defendant, Industrial, acquired this stock at the same value ascribed to it on the books of the former Beneficial Industrial Loan Corporation, even though an examination of the books of that company would have revealed the excessive value at which the assets were written up and held. It is then charged that the defendant, Industrial, upon acquiring the assets of the former Beneficial Loan Company, American Loan Company, and Industrial Bankers of America in May 1929, issued its stock to the stockholders of these three companies, in exchange for the stock held by them respectively in said three companies, the stockholders of the former Beneficial Industrial Loan Corporation receiving stock from defendant, Industrial, on the basis of the inflated values previously ascribed to the stock of the former Beneficial Industrial Loan Corporation. Thereafter, it is charged, in September of 1930 the book value of the assets which had been acquired by the defendant corporation from the former Beneficial Industrial Loan Corporation was written down from its inflated value to the same extent as it allegedly was previously written up. As a result of the above it is charged that there was fraudulently and unlawfully issued, 449,209 shares of common stock of defendant corporation which remain outstanding and for which no consideration has been paid or received by it. Upon the shares so issued, it is further charged there has been unlawfully paid by the corporation, from 1929 to 1945, inclusive, more than eleven million dollars by way of unlawful and illegal dividends.
This alleged cause of action is objected to and dismissal sought on the ground that it fails to state a claim upon which relief can be granted in this action. Defendants insist that any possible cause of action which could be predicated upon the transactions asserted in the fifth alleged *300 cause of action, would be on behalf of the individual stockholders of American Loan Company and Industrial Bankers of America, Inc. against the stockholders of the former Beneficial Industrial Loan Corporation. In any event it is insisted that the plaintiff fails to set forth any cause of action on behalf of the corporation since there is nothing contained in the charges that would indicate that any rights of the corporation have been invaded resulting in damage to it.
Examination of the allegations contained in the fifth alleged cause of action support the defendants' contention that the plaintiff has failed to show any damage to the corporate entity.
The stock issues referred to consisted entirely of shares of stock without par value. Under Delaware law, necessarily controlling insofar as the validity of the stock issue in question is concerned, (the defendant being incorporated under the laws of the State of Delaware) there is no requirement as to the amount of consideration which must be received in respect to an original issue of no par stock, although the quality of consideration must meet the same requirements as stock having a par value. Bodell v. General Gas & Electric Corporation, 15 Del. Ch. 119, 132 A. 442, affirmed 15 Del. Ch. 420, 140 A. 264; West v. Sirian Lamp Co., Del.Ch., 37 A.2d 835.
Hence, where it is apparent that the original stock issue is of no par stock, the amount of consideration is of no particular moment in an action of this nature. Thus, as the court stated in the Bodell case, supra, 132 A. at page 447:
"If the corporation has just been formed, I do not see that it can make any difference how much or how little in the way of consideration is received for its original no par stock, so long as the consideration is lawful in its quality. If the assets received are one thousand dollars in money, it is of no consequence whether five shares or ten shares, or ten thousand shares are given for it. Each share has its one-fifth or one-tenth or one one-thousandth aliquot part of the thousand dollars as the case may be, and no one is damaged because everyone knows that under each share is simply its proportionate part of the total assets, unexpressed in terms of money."
So in the instant case, while it may well be that as a result of the manipulation alleged, an excessive valuation was placed upon the assets of one of the consolidating corporations, resulting in an improper proportionate distribution of the new stock, it cannot be concluded thereby that, the new stock being of no par value, no consideration has been paid for it. There has been no damage to the defendant corporation thereby, since the only result, as far as the corporation is concerned, was that each share simply represented a proportionately smaller part of the total corporate assets. There is no way to spell out any increase in corporate liabilities and hence no damage to the corporation to which the plaintiff can point.
What has been said above applies as well to the plaintiff's assertion that there have been unlawful payments of dividends on the alleged unlawfully issued shares resulting in damage to the corporation. The consideration received for the shares of stock having been lawful, it cannot be said, so far as the allegations herein contained are concerned, that the stock was unlawfully issued. Neither may it be alleged, therefore, that the dividends paid were unlawful and illegal. For the reasons above mentioned, while some individual stockholders may have derived a cause of action against other stockholders, there is no showing that the corporation has been damaged through the payment of the dividends on those shares. The net result is a smaller proportionate dividend return on each outstanding share, but no increase in corporate expenditure.
It is further stated by the plaintiff that the defendant, Industrial, acquired the stock of the former Beneficial Industrial Loan Corporation at the value ascribed to it on the books of that corporation "even though an examination of the books of that Company would have revealed the excessive value at which its assets were written up and held." Any stockholder had the right to examine the books of the Company; but nevertheless, the Agreement of *301 Consolidation, out of which the present corporate defendant grew, was approved by more than 2/3 rds of the stockholders of each of the consolidating companies. This, in effect, negatives any suggestion of fraud and misrepresentation.
Since a stockholder's derivative suit on behalf of the corporation derives its cause of action out of an invasion of the rights of the Corporation, if the Corporation itself has no such cause of action it necessarily follows that a stockholder cannot sue in its behalf. Gallagher v. Pacific American Co., 9 Cir., 97 F.2d 193; Laughner v. Schell, 3 Cir., 276 F. 241, 18 C.J.S., Corporations, § 559. Under the facts set forth in the fifth alleged cause of action, defendant, Beneficial Industrial Loan Corporation, could not maintain this action, and plaintiff suing as a stockholder has no better right. Defendants' motion to dismiss the fifth cause of action, for the reasons above set forth, is granted.
The plaintiff's sixth alleged cause of action charges in broad general terms that between the years 1937 and 1943, the defendant corporation, acting through its directors, some of whom are defendants herein, paid to its affiliate, Beneficial Management Corporation, sums of money in excess of $26,000,000 many of which payments are unsupported by bills or other vouchers, that many of these payments were improperly and illegally made for the purpose of unjustifiably enriching the individual defendants herein, and were illegal and ultra vires in nature.
Plaintiff further charges that it is impossible, for the reasons set forth, to obtain from the books of the defendant corporation an accurate accounting of the uses to which the money has been put, but avers that an examination of the officers and directors of Beneficial Management Corporation before the trial of this issue will disclose the illegal and ultra vires nature of such payments.
This alleged cause of action the defendants attack on the ground that it does not state any claim, and is grounded on a mere suspicion that may find support by examination of officers and directors of the defendant corporation.
The allegations of the sixth alleged cause of action, while setting forth a certain factual situation, fail to identify any cause of action within the requirements of the Federal Rules of Civil Procedure, 28 U.S.C.A. following Section 723c. The plaintiff's charge that many payments were illegal and improperly made, without further enlargement, is insufficient to meet even the bare requirements of the rules of pleading. The further averment by plaintiff that "an examination of officers and directors" will disclose which payments were illegal and ultra vires, stamps this alleged cause of action as one disclosing an aspiration rather than a claim upon which recovery may be had. United States v. Atlantic Basin Iron Works, D.C., 53 F. Supp. 268. The words of the Court in Mebco Realty Holding Co. et al. v. Warner Bros. Pictures, Inc., D.C., 44 F. Supp. 591, 592, are apropos in the instant case. Therein the court stated:
"I do not understand that the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, or any other rule of law or practice, will justify a suit against an individual or a corporation which does not state a case, and then permit the plaintiff to call witnesses in a fishing expedition, with the hope that somewhere or somehow it may develop that a defendant has some liability."
At the very least, the statement or pleading must give fair notice of what an adverse party may expect to meet. Battin Amusement Co. v. Cocalis Amusement Co., D.C., 1 F.R.D. 769. The complaint herein, however, falls short of that requisite. It is in the nature rather of an expression of a charge that the plaintiffs hope to substantiate if they are successful in gleaning further information prior to trial.
The Seventh alleged cause of action contains the same infirmities as the sixth and must fall for the reasons specified above.
The Ninth alleged cause of action is likewise found to be insufficient. While it is true that Rule 8 (a) (2) requires but a "short and plain statement of the claim showing that the pleader is entitled to relief", that requirement is not met by a series of conclusions couched in broad general *302 terms alleging wrongdoing but entirely lacking in any statement of fact upon which the allegations are based. Toomey v. Wickwire Spencer Steel Co., D.C., 3 F.R.D. 243. See also Arn v. Bradshaw Oil & Gas Co., 5 Cir., 93 F.2d 728 and Mebco Realty Holding Co. v. Warner Bros. Pictures, Inc., supra.
Defendants' motions to dismiss the fifth, sixth, seventh and ninth causes of action, for the reasons above specified, are granted. The motion to dismiss the fourth cause of action is denied.
In view of the foregoing determinations, the Court will not rule on the remaining motions. The parties may, however, renew such of them as the situation resultant on these findings may render fitting.
An order in accordance with the above ruling may be entered. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265770/ | 69 F. Supp. 666 (1946)
UNITED STATES
v.
SCOPHONY CORPORATION of AMERICA et al.
District Court, S. D. New York.
October 30, 1946.
Edwin Foster Blair, of New York City, for defendant Scophony, Limited.
Joseph B. Marker, Sp. Atty., of New York City, for the United States.
Simpson, Thacher & Bartlett, of New York City, for defendants Television Productions, Inc., Paramount Pictures, and Paul Raibourn.
Mudge, Stern, Williams & Tucker, of New York City, for defendants Earl G. Hines and General Precision Equipment Corporation.
Joseph O. Ollier, of New York City, for defendants Arthur Levey and Scophony Corporation of America.
CONGER, District Judge.
The Defendant, Scophony, Limited, moves to quash service of process and dismiss the complaint herein upon the ground that it is a corporation organized under the laws of Great Britain, not subject to the jurisdiction of this Court.
The action is brought pursuant to Section 4 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 4, against five corporate defendants, including the movant, and three individuals to restrain continuing violations of Sections 1 and 2 of the Act, 15 U.S.C.A. §§ 1 and 2. The complaint charges the defendants with combining and conspiring to monopolize and restrain interstate and foreign trade in products, processes, patents and inventions useful in television and allied industries.
*667 Service of process was effected in New York City on December 20, 1945 by leaving a copy of the summons and complaint with defendant Arthur Levey, who is a Director of Scophony, Limited. On April 5, 1946 one W. G. Elcock, also a Director of Scophony, Limited, was served while visiting this country.
Section 12 of the Clayton Act, 15 U.S. C.A. § 22, pursuant to which venue is established and jurisdiction acquired in suits of this type, provides as follows: "Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found." [Italics added.]
It may be noted that the emphasized portion of the section relating to jurisdiction is concerned here; and the main problem is, therefore, whether the defendant, Scophony, Limited, not being an "inhabitant" of this district, is "found" here.
Although there have been numerous decisions rendered in application of this section, the great majority of them relate to domestic corporations (corporations organized within the United States) rather than alien corporations, as here.
Recently, Judge Leibell of this Court considered the instant problem in a suit analogous to the present one (United States v. United States Alkali Export Association et al., D.C.,),[1] and he held that a British corporation which owned the entire capital stock of an American corporation functioning within the jurisdiction of this Court was "found" here within the meaning of Section 12. He concluded that the activities of the American corporation on behalf of the parent company warranted the finding that the former was merely an "agency subsidiary" of the British company.
In general, a corporation is "found" within a given jurisdiction if it there does business "Of such nature and character as to warrant the inference that the corporation has subjected itself to the local jurisdiction, and is by its duly authorized officers or agents present within the state or district where service is attempted." Peoples Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 87, 38 S. Ct. 233, 235, 62 L. Ed. 587, Ann.Cas.1918C, 537; United States v. Aluminum Co. of America, D.C.N.Y.1937, 20 F. Supp. 13; Haskell v. Aluminum Co. of America, D. C.Mass.1926, 14 F.2d 864. An examination of the cases indicates that the concept expressed as "found" is identical with the more familiar "doing business."
The affidavit submitted by the Government in opposition to this motion contains a detailed statement of the various activities of movant in this jurisdiction. Much of this activity occurred prior to the signing of the so-called "basic agreements" with the other defendants in 1942.
Defendant Scophony, Limited (hereinafter referred to as "Limited") has its office in the City of London, England. It is in the business of manufacturing and selling television apparatus and is the owner and licensor of inventions purporting to cover, among other things, television reception and transmission systems.
In the Spring of 1939, Limited manufactured and placed on the market in England several commercial television sets. After the outbreak of the war with Germany in September, 1939, the British Broadcasting Corporation stopped the television broadcasts.
In 1940, Limited sent some of its personnel and various television equipment to this country; it maintained an office in New York City from 1940 to 1941; it demonstrated its product here; it leased one of its television sets to a theatre company as a result of which a set was installed in the Rialto Theatre in New York City. In general, Limited was actively engaged in placing its product in the American market, inasmuch as the English market was closed to it because of the war. In those early years, 1940 and 1941, and perhaps for part of 1942, Limited's business here was of such a character that one might very well infer that it had subjected itself to the local jurisdiction and was present here at *668 that time by its duly authorized agents upon whom service of process could be made.
Unless there was a continuity of such activities down to the present, however, such course of conduct is of no aid in the determination of this motion. What we are interested in is the business conduct of this defendant in this jurisdiction at the time process in this action was served upon it or within a reasonable time before that.
There is no question but that these business activities which I have referred to ceased prior to the time this defendant entered into the "basic agreements."
These agreements were executed on July 31, 1942 and August 11, 1942. In substance, they provided for the creation of a new corporation, the Scophony Corporation of America (hereinafter called "SCA"), to which Limited sold all its equipment within the United States, and all its present and future patents. SCA, in turn, gave exclusive licenses for the manufacture and sale of products under the Scophony inventions in the Western Hemisphere to defendants General Precision Corporation and Television Products, Inc. The exclusive licensees agreed to pay royalties to SCA on all products that they might produce under the Scophony inventions, and SCA agreed to transmit to Limited fifty per cent of all royalties that it received from the licensees.
The capital structure of the new corporation, SCA, was to consist of 1,000 "A" shares and 1,000 "B" shares. The "B" shares were allotted to the American interests, General Precision Equipment Corporation and Television Productions, Inc., a wholly-owned subsidiary of Paramount Pictures, Inc. The "A" shares were allotted to the British interests, principally Limited.
The "A" shares are entitled to elect three-fifths of the Board of Directors of SCA and to elect the President, Vice-President and Treasurer of the new corporation. Since the creation of SCA the representatives of the "A" shares have been elected by Limited.
The "B" shares are entitled to elect two-fifths of the Board of Directors of SCA and also the Secretary and Assistant Secretary.
The Government contends that these agreements provide for the division of world markets in the products covered by the Scophony inventions, particularly those relating to television. Limited retained the Eastern Hemisphere, including England, as its exclusive territory for the manufacture and sale of products covered by Scophony inventions.
The Western Hemisphere, including the United States, became the exclusive territory of SCA or its two exclusive licensees for the manufacture and sale of products under the Scophony inventions.
It is apparent from these provisions that Limited exerted the major control over SCA. Defendant Levey, who is President and a Director of the American Corporation is also a Director of Limited.
However, it is well settled that a parent corporation does not "do business" in a given jurisdiction merely because of the presence there of its subsidiary without some further factual basis for concluding that the parent has injected itself into the jurisdiction by its conduct in relation to the subsidiary, or that the subsidiary is acting solely as an agent, as was the situation in United States v. United States Alkali Export Association, supra. Cannon Mfg. Co. v. Cudahy Co., 267 U.S. 333, 45 S. Ct. 250, 69 L. Ed. 634; Consolidated Textile Corporation v. Gregory, 289 U.S. 85, 53 S. Ct. 529, 77 L. Ed. 1047; Amtorg Trading Corporation v. Standard Oil Co. of California, D.C.N.Y.1942, 47 F. Supp. 466; American Fire Prevention Bureau v. Automatic Sprinkler Co. of America, D.C.N.Y. 1941, 42 F. Supp. 220. And there is no evidence, except possibly for the fact that Limited received fifty percent of the royalties earned by SCA, that SCA stood any differently than any ordinary subsidiary corporation, nor is there any indication that it acted merely as an agent for Limited. It is true that SCA did act for Limited in the purchase of certain materials and equipment in the United States, but it appears from the papers that this occurred on occasion, and not as a frequent and common practice of SCA.
*669 The Government asserts that Limited is "found" here by reason of the activities of its agents, especially Levey, and others.
Levey was the prime negotiator for Limited of the "basic agreements" to which the Government has directed its attack. He consulted with Limited with respect to the proposed modifications of the "A" stock allocations, and which proposal resulted in the new allocations set forth in the agreement of February 4, 1943, whereby Limited received two-thirds of the "A" shares. He kept Limited advised about the negotiations with regard to the employment by SCA of an inventor, Dr. Rosenthal. He carried out instructions and kept Limited advised in connection with the disputes which subsequently ensued between the "A" and "B" Directors. In order to assist him in resolving these difficulties, Limited gave him a power of attorney, dated March 26, 1945, authorizing him to vote Limited's shares in SCA.
Numerous others were authorized by Limited to act in its behalf in these disputes, including W. G. Elcock, who travelled to this Country for the purpose, James L. Fly and John Sloan, attorneys, Robert Boothby, a British member of Parliament and Commander Arthur Mallet, an English officer.
While a successful settlement of these disputes might inure to the benefit of Limited, still the disputes were concerned with the conduct of the business of SCA and not that of Limited.
Assuming the truth of the allegations in the complaint with respect to Limited's business, i. e. that it is engaged in the manufacturing, selling and licensing of television apparatus, it would seem that none of the activities of Limited's agents were concerned with the ordinary business of Limited. These agents were engaged in protecting the interests of their principal in SCA.
The Government finally argues that the conduct required to hold an alien corporation under Section 12 may vary from that required to hold a foreign corporation. If by this the Government means that there is one rule which applies to alien corporations and another to foreign corporations it is clearly in error. The cases cited by the Government do not support this theory. All of them where pertinent apply the rule as I have heretofore stated it, and make no such distinction, nor do any of the other cases which I have read.
I am not unmindful of the effect of my holding here. However, that cannot determine my judgment. I cannot make the rule to fit the case. I can only apply the rule to the facts and having done so announce the result.
This I have done, and although the result may be unfortunate as far as the Government is concerned, I can only conclude that Limited was not found within the jurisdiction of this Court at the time of service of process, and the motion to quash the service and dismiss the complaint must be granted.
Submit order on notice.
NOTES
[1] No opinion for publication. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265773/ | 69 F. Supp. 646 (1946)
SMITH, KLINE & FRENCH LABORATORIES
v.
WALDMAN.
No. 4739.
District Court, E. D. Pennsylvania.
July 18, 1946.
*647 Busser & Harding and George J. Harding, all of Philadelphia, Pa., for plaintiff.
Arthur W. A. Cowan, of Philadelphia, Pa., for defendant.
WELCH, District Judge.
This is a motion by Smith, Kline & French Laboratories to restrain the defendant, Harry A. Waldman, trading as Rona Pharmacal Company, from engaging in acts of alleged unfair competition.
Prior to 1939 plaintiff commenced to market a tablet containing a 10 milligram dosage of amphetamine sulfate under its registered trade-mark "Benzedrine". In 1939 it marketed a pharmaceutical tablet containing a 5 milligram dosage of amphetamine sulfate under its registered trade-mark "Dexedrine". Finally, since 1940 it has marketed continuously another tablet containing 5 milligram of amphetamine sulfate under its registered trademark "Benzedrine".
The plaintiff sells these tablets only at wholesale to druggists who, in turn, sell them to the public only upon physician's prescription. The tablets reach the druggists in original bottles which are clearly labelled with the plaintiff's name and trade-mark. But sales by the druggists to the ultimate consumers are of the product in its naked form out of the bottle or in the druggists' own package. As the plaintiff does not deal with the ultimate consumer, it seeks only the patronage and good will of physicians and pharmacists with whom it deals directly. Among other means used to that end it spent and is still spending large sums of money for advertising in trade journals patronized by the medical and drug professions.
Comparatively recently, the defendant, Waldman, began the manufacturing of amphetamine sulfate tablets and dextro-amphetamine sulfate tablets in 10 and 5 milligram sizes. Similarly, the defendant's tablets are sold only at wholesale to druggists who, in turn, sell them to the public only upon physician's prescription. And likewise, these tablets are sold to druggists in bottles supplied by the defendant and plainly marked with the defendant's registered trade-marks "Ronadex" and "Ronazine", and defendant's trade name "Rona Pharmacal Company". Also, the druggists in filling prescriptions sell the products of the defendant in naked form out of the bottle or in his own packages.
The complaint is that the tablets marketed by the defendant are similar to the plaintiff's in that they are round, white tablets, cross-scored, the top edge is bevelled and the bottom is concave, and that this situation constitutes unfair competition against which the plaintiff prays for injunctive relief.
That the tablets manufactured by the adverse parties are exactly alike (the tablets of the defendant are Chinese copies of plaintiff's tablets) can hardly be disputed. But standing alone, this fact is not conclusive of unfair competition as the functional and non-functional aspect of the imitated features must be taken into consideration. With regard to the imitation of non-functional features the law is unsettled. One line of authorities holds that the imitation of non-functional features is illegal if the similarity is likely to deceive purchasers (Rushmore v. Manhattan Screw & Stamping Works, 2 Cir., 163 F. 939, 19 L.R.A.,N.S., 269; McGill Mfg. Co. v. Leviton Mfg. Co., D.C., 43 F.2d 607) and the other states that one may freely copy the non-functional features of the article if they have not become associated with the original manufacturer or source and the article is bought because of its utility and neat appearance. The latter which appears to be the weight of authority springs from the theory that the "cases of so-called `nonfunctional' unfair competition * * * are only instances of the doctrine of `secondary' meaning", Crescent Tool Co. v. Kilborn & Bishop Co., 2 Cir., 247 F. 299, 300; Gum, Inc., v. Gumakers, Inc., of America, 3 Cir., 136 F.2d 957. However, it is not the duty of this Court to resolve this conflict of authorities as the copied features fall within *648 the scope of the definition of functional features as laid down in Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 44 S. Ct. 615, 617, 68 L. Ed. 1161. The definition of a functional or an essential feature is one which "serves a substantial and desirable use, which prevents it from being a mere matter of dress". Warner & Co. v. Eli Lilly & Co., supra. The Court is satisfied that the features here involved meet that test. The tablets contain a potent chemical and are frequently prescribed in doses of one-fourth or one-half tablet. Thus, to facilitate breakage in accordance with the doses the tablets are made of a convenient size by dilution with a large amount of an inert substance (either pure milk sugar or terra alba as the case may be) and the tops are cross-scored to a depth sufficient to permit an accurate break. The breakage is further facilitated by making the tablet thinner at the center than at the edge by means of a concave bottom. The outer edge is bevelled to prevent crumbling in the bottles. Amphetamine sulfate itself is white. In Warner & Co. v. Eli Lilly & Co., supra, the respondent who was engaged in the sale of a liquid preparation of quinine containing chocolate attempted to enjoin the manufacture and sale by the petitioner of a similar liquid preparation of quinine likewise containing chocolate. The facts of the latter case are the same as the instant case in that the products involved were manufactured and sold at wholesale to druggists in the manufacturer's own bottle and sold in turn by the druggists to the ultimate consumer in naked form and only upon physician's prescription. In discussing the copying or imitating phase of that case Mr. Justice Sutherland said: "Respondent has no exclusive right to the use of its formula. Chocolate is used as an ingredient, not alone for the purpose of imparting a distinctive color, but for the purpose of also making the preparation peculiarly agreeable to the palate, to say nothing of its effect as a suspending medium. While it is not a medicinal element in the preparation, it serves a substantial and desirable use, which prevents it from being a mere matter of dress. It does not merely serve the incidental use of identifying the respondent's preparation * * * and it is doubtful whether it should be called a nonessential. The petitioner or anyone else is at liberty under the law to manufacture and market an exactly similar preparation containing chocolate and to notify the public that it is being done".
As the features which the defendant copied from the plaintiff were functional and therefore part of the public domain he was free to imitate them in every particular. If purely functional elements are copied a charge of unfair competition, because of the resemblance, cannot be supported.
The right to imitate or copy the functional features of goods does not of course import the privilege of stealing the trade of the originator, through deception or confusion. That is, the defendant could not through deception and confusion palm off its tablets as those of the plaintiff. J. C. Penney Co. v. H. D. Lee Mercantile Co., 8 Cir., 120 F.2d 949. An examination of the facts, exclusive of the imitated functional features, therefore is necessary to determine whether or not the defendant is guilty of palming off his tablets as those of the plaintiff. The adverse parties sold their respective tablets at wholesale to pharmacists and although it is undisputed that the tablets of the defendant in appearance are Chinese copies of the plaintiff's tablets it is equally undisputed that the defendant's bottles, labels, names and trade-marks in no wise resemble the bottles, labels, names and trademarks of the plaintiff. From these facts the conclusion is inescapable that the druggists who are the direct purchasers are aware of the source of the tablets they buy and that as to them there can be no deception or confusion. The plaintiff argues, however, that the defendant by manufacturing tablets identical with those of plaintiff is affording pharmacists in cases where Smith, Kline & French Laboratories tablets are prescribed by name to substitute in their stead the tablets of the defendant. In support of this contention the plaintiff cites Coca Cola Co. v. Gay-Ola Co,. 6 Cir., 200 F. 720, wherein it is stated that putting the means of consummating *649 a fraud in the hands of another party still makes one accountable and guilty of unfair competition. In respect to this argument it need only be mentioned that in that case an intent to defraud on the part of the imitator was shown. In the instant case there is no suggestion of fraud, there is only the bald fact of an imitation and Coca Cola Co. v. Gay-Ola Co., supra, therefore is inapplicable. Where there is an imitation only and there are no additional facts to substantiate either an intent to defraud the ultimate purchaser, or a conspiracy with the direct purchaser to defraud the ultimate purchaser, a charge of unfair competition cannot be sustained. Despite the fact that there is no unfair competition in this respect the plaintiff still has the right to proceed against individual druggists, as in the case of Winthrop Chemical Co., Inc., v. Weinberg, 3 Cir., 60 F.2d 361, if it feels that the practice of substitution by druggists is widespread.
The plaintiff claims the existence of deception and confusion and the passing off with regard to the public (the ultimate consumers) because the public associates the form or appearance of tablets with a particular manufacturer, namely, Smith, Kline & French Laboratories, the plaintiff. This claim, we think, is untenable. As has been stated, amphetamine sulfate is a potent drug and is sold only upon physician's prescription and reaches the ultimate consumer in naked form. Generally, the ultimate consumer knows nothing of the name or ingredients of the drug and he knows less of the origin or manufacture of the drug. Therefore, in making the purchase or in having the prescription filled he relies not on the origin of the tablet but on the skill and good faith of the physician and druggist. Also, the doctrine of "secondary meaning" does not avail the plaintiff, for that doctrine has no application where functional features are imitated. Gum v. Gumakers of America, supra.
The last claim of the plaintiff is that the defendant is receiving the benefit of the good will built up at great costs by the plaintiff. In this connection, the authorities agree that sharing in the good will of another is not unfair unless the passing off of one's goods as those of another is shown. Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 59 S. Ct. 109, 115, 83 L. Ed. 73; Warner & Co. v. Eli Lilly & Co., supra. In the former the Court expressed its conclusions in the following manner: "Kellogg Company is undoubtedly sharing in the good will of the article known as "Shredded Wheat"; and thus is sharing in a market which was created by the skill and judgment of plaintiff's predecessor and has been widely extended by vast expenditures in advertising persistently made. But that is not unfair. Sharing in the good will of an article unprotected by patent or trade-mark is the exercise of a right possessed by all and in the free exercise of which the consuming public is deeply interested."
It appears from the affidavits that defendant is able to market its amphetamine sulfate tablets at approximately one-tenth the price that is charged by the plaintiff. This difference in price is undoubtedly resulting in a decrease of plaintiff's sales, and this is perhaps the plaintiff's main grievance. But that grievance need not concern us as Courts cannot protect one from lawful competition. The public is as much entitled to the benefit of fair competition in prices as in any other consumer's element, and it is perhaps much more vitally and directly interested in it. J. C. Penney Co. v. H. D. Lee Mercantile Co., supra. The plaintiff urges upon us the fact that the public is not benefiting as a result of the difference in price between the plaintiff's and defendant's tablets because the druggists are appropriating the profit to themselves. However, we are convinced of the honesty and integrity of the overwhelming majority of druggists and the consequent saving to the consuming public.
The Finding of Fact and Conclusions of Law found or contained in the foregoing opinion are adopted as the special findings and conclusions of this Court and all the requests for Findings of Fact and Conclusions *650 of Law submitted by the parties in interest which are not in conformity with this opinion are denied.
Motion for a temporary injunction is denied and a decree may be entered in accordance with the views above expressed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265776/ | 69 F. Supp. 760 (1947)
WOODS
v.
UNITED STATES.
Civ. No. 233-D.
District Court, M. D. Alabama, S. D.
January 30, 1947.
J. Hubert Farmer, of Dothan, Ala., for plaintiff.
E. Burns Parker, U. S. Atty., and Thomas M. Stowers, Asst. U. S. Atty., both of Montgomery, Ala., for United States.
Charles A. Ball and Richard A. Ball, of the firm of Ball & Ball, of Montgomery, Ala., for defendants Rita Grace Rogers and Thelma Mildred Woods Weaver.
Plaintiff, Gladilou D. Woods, of Houston County, Alabama, brings this action under the National Service Life Insurance Act of 1940, U.S.C.A. Title 38, § 801 et seq., to recover upon a contract of United States government life insurance issued to Eugene Dean Woods, deceased husband of the plaintiff, on September 22, 1941, and effective as of August 21, 1941.
Defendant, United States of America, by proper pleadings, joined as additional parties defendant, Rita Grace Rogers and Thelma Mildred Woods Weaver, sisters of the deceased Eugene Dean Woods.
Findings of Fact
Eugene Dean Woods, a member of the armed forces of the United States of America, applied for and received from the United States of America, a policy of National Service Life Insurance in the amount of $10,000 effective as of August 21, 1941. *761 At the time he applied for and received this policy of National Service Life Insurance, he was an unmarried man; and he designated as joint beneficiaries of this policy of Service Insurance his two sisters, Rita Grace Rogers and Thelma Mildred Woods.
Plaintiff, who at the time of this hearing was 27 years of age, lacking 22 days, and the said Eugene Dean Woods, were married on April 4, 1942. To this marriage was born, on December 11, 1942, a son, who is now living. At the time Eugene Dean Woods and the plaintiff were married, and at the time the son was born to this marriage, the said Eugene Dean Woods was a member of the armed forces of the United States of America, and the policy of National Service Life Insurance was in full force and effect.
Eugene Dean Woods, while still in the military service of his country, and while the policy of National Service Life Insurance was still in full force and effect, died on December 15, 1942.
In this case there exists the disagreement necessary for the bringing of this suit by the plaintiff. No payments have been made by the Government to any one.
Eugene Dean Woods, while in Houston County, Alabama, on furlough the early part of April, 1942, stated to his Uncle, H. F. Petty, with whom he was visiting, that he was going to change the beneficiary of his $10,000 government insurance policy to his wife, Gladilou.
By letter dated May 2, 1942, and postmarked May 3, 1942, from Muroc, California, Eugene Dean Woods wrote to the plaintiff, his wife, as follows:
"Darling, I went over today and made a will and had my insurance made out to you.
"We had a couple of accidents this morning, no one was hurt, but I thought I better get it done before it was too late."
On May 2, 1942, the same day the above letter was written, Eugene Dean Woods made and executed a last will and testament, in words and figures as follows: "All of my estate I devise and bequeath to Gladilou Woods for her use and benefit forever, and I hereby appoint her my executrix without bond, with full power to sell, mortgage, lease, or in any other way dispose of the whole or any part of my estate." This will has been duly probated in the Probate Court of Houston County, Alabama, without contest.
By letter, undated, but postmarked May 9, 1942, from Muroc, California, Eugene Dean Woods, wrote to his wife, the plaintiff, among other things, as follows: "I just got the blanks back for changing my last insurance policy to you. If I ever get them all fixed you will have three on me."
On May 18, 1942, at Muroc, California, Eugene Dean Woods made and executed a form (W. D. A. G. O. Form No. 41), the caption in bold print being, "Designation of Beneficiary", wherein he named his wife, Mrs. Gladilou Woods, 1012 East Washington Street, Dothan, Alabama, as the person eligible to be his beneficiary; and in the event he died leaving no widow or child, he designated as beneficiaries his sisters, Mrs. Rita Grace Rogers, 414 Brigg Street, Harrisburg, Pennsylvania, and Miss Thelma Mildred Woods, 202 North Lena Street, Dothan, Alabama.
A photostatic copy of part of the service record of Eugene Dean Woods, from the file of the War Department, shows, under the caption, "Government Insurance", the following information: "Deduction of pay for Natl. Life Ins. authorized as follows: Class D. insurance deduction of $6.50 per month for duration plus six months, commencing Apr. 1, 1942, for payment of monthly premium on $10,000.00 * * *", and directly across from this, and on the same page, is written, by typewriter: "NSL Ins. WD Cir No.132 applied for. Married to Gladilou Daughtry, April 4, 1942." Directly under this, and printed in long hand, is the following: "B. Change in Designation of beneficiary: Gladilou Daughtry Woods, (wife), R. F. D. No. 1, Newton, Alabama, % H. F. Petty."
The plaintiff has employed J. Hubert Farmer, a licensed and practicing attorney at law of Dothan, Houston County, Alabama, to file this suit for her and to represent her generally in this cause until the same has been finally determined.
Conclusions of Law
1. The intention, desire, and purpose of the deceased soldier should, if it can reasonably *762 be done, be given effect by the courts, and substance, rather than form, should be the basis of the decisions of the courts.
2. In war risk insurance cases, involving change of beneficiary, the courts brush aside all legal technicalities in order to effectuate the manifest intention of the insured.
3. If the insured manifested an intent to make a change in beneficiary, and did that which was reasonably within his power to accomplish his purpose, leaving only ministerial acts to be performed by the insurer, the courts will treat that as done which ought to have been done and give effect to the insured's will.
4. The clearly expressed intention and purpose of the deceased to have his wife named as the beneficiary in this policy of National Service Insurance should control, and should not be thwarted by the fact that all the formalities for making this purpose effective may not have been complied with.
Decree and Judgment
It is ordered, adjudged and decreed by the court that judgment be, and the same is, for the plaintiff; and that the plaintiff have and recover from the defendant United States of America, the sum of $10,000, payable in such payments and installments as are provided for by the United States Veterans Administration, Washington, D. C., for the payment of such proceeds of National Service Life Insurance, less 10 percent of such lump sum payments and monthly installment payments, which amount and in the same manner shall be paid to Mr. J. Hubert Farmer, Attorney at Law, Dothan, Alabama, as attorney fee for services rendered on behalf of the plaintiff in the handling of this matter for her.
CHARLES B. KENNAMER, District Judge.
In Roberts v. United States, 4 Cir. 157 F.2d 906, 909, speaking through Judge Soper, says: "We are in accord with the views expressed in Bradley v. United States, 10 Cir., 143 F.2d 573, where it is said that in war risk insurance cases involving change in beneficiary the courts brush aside all legal technicalities in order to effectuate the manifest intention of the insured; and that if he manifests an intent to make a change and has done everything reasonably within his power to accomplish his purpose, leaving only ministerial acts to be performed by the insurer, the courts will treat that as done which ought to have been done and give effect to the insured's will. In the pending case, we have found that the insured not only expressed his intention to change the beneficiary in the policy, but also set in motion the machinery devised by the United States to accomplish the desired result. In this way he performed the affirmative act for the lack of which the majority of the court in the Bradley case concluded that the change of beneficiary had not been accomplished. Since such an act was performed here, we have no occasion to consider the view expressed by Judge Phillips in his dissenting opinion in that case that the statement in a confidential report of an officer that he has designated his wife as beneficiary is itself sufficient to effectuate the change."
The contract of National Service Life Insurance was between the insured, Eugene Dean Woods, and the United States of America. No third party or parties had any vested interest in this contract. Under the laws enacted by Congress, and the conditions of the contract of insurance, the insured had the legal right to designate certain persons as beneficiary or beneficiaries of his service insurance; and the insured had the right to change the designated beneficiary or beneficiaries, as long as he named some one within the permissible class of persons who could, under the law and terms of the contract of insurance, be beneficiaries.
When the insured designated his sisters as the beneficiaries of his service insurance, he was an unmarried man, and his sisters, by law and the terms of the contract of insurance, were qualified to be beneficiaries of such insurance. At the time the insured designated his sisters as the beneficiaries of his service insurance, his future wife was not qualified by law and the terms of the contract of insurance to be a beneficiary. When the insured and the plaintiff married, she then became qualified to be a beneficiary of such insurance.
*763 The insured and the plaintiff, both residents of the same county in southeast Alabama, were married on April 4, 1942, while he was at home on furlough, and shortly thereafter he began to concern himself with changing the beneficiaries of his insurance to his newly acquired wife, just about the way every normal husband does, only perhaps a little more so because he was in a dangerous and hazardous business, the military service of his country. Within a few days after his marriage, he stated to his Uncle that he was going to change the beneficiary of his $10,000 government insurance policy to his wife Gladilou. In less than a month after his marriage to the plaintiff, from his post of duty at Muroc, California, he wrote his wife that he had made a will that day and had his insurance made out to her; and he did make a will that day in which he willed all of his estate to her. And his reason for doing this was because of a couple of accidents that day and he realized that such could easily happen to him and he wanted to make the will and have his insurance made out to his wife before it was too late.
On May 9, 1942, he again wrote to his wife, the plaintiff, and in this letter he stated that he just got the blanks back for changing his last insurance policy to her and that if he ever got them all fixed up she would have three on him, meaning, of course, three policies. Then on May 18, 1942, he executed the form which was captioned, "Designation of Beneficiary", and in which he named this wife of his as the person eligible to be his beneficiary.
The statute does not by its own language prohibit such change of beneficiary by will, and only by resort to the regulations made thereunder, is there found such prohibition. The purpose of such regulation is to avoid confusion and to protect the insurer. In this case no payment, in any amount, to any one, has been made on the insurance. To hold the designation in the will alone to be sufficient to change the beneficiary would not change the liability of the insurer, and would certainly give effect to the manifest intention of the soldier.
However, regardless of what this court would hold on this question should the occasion arise, it is quite clear that the last will and testament of the deceased husband is expressive of his desire that his wife have all of his estate, and that it is another link in the chain of actions on his part to leave his insurance to his wife, the plaintiff. To this court, this soldierboy took advantage of every opportunity accorded him to designate his wife as the beneficiary of his every earthly possession, especially his service insurance. There is no doubt in the mind of this court that this insured, at the time he made his will, and on each occasion when he executed a blank for changing the beneficiary of an insurance policy or a form for designation of beneficiary, it was his intent and purpose that his wife, upon his death, be the beneficiary of the proceeds of his service life insurance.
Briefly summarizing it may be stated that in positive affirmation of the deceased husband's manifest intention to give his wife his insurance, he took four different, substantial steps, and as hereinbefore set forth.
All of this was done within less than six months after the Japanese attack on Pearl Harbor, and the subsequent declaration of war by our country; at a time when this nation was in dire peril; at a time when the foundation was being laid for a great citizens' army of millions; at a time when the plaintiff's husband, who was a member of that hazardous branch of the service, the Air Corps, was on the move.
In such a situation, this court will not require that this plaintiff's husband should have complied with all of the technical regulations that had been formulated, but is content to hold that he did that which he thought he should do to give a measure of protection for his wife, and for his baby, who was born a few days before its father was killed in action.
Throughout the history of the civilized world, since the decrees of Julius Caesar, the intention and wish of the soldier, killed in the line of duty, with relation *764 to designation of beneficiary or disposing of property, has been carried out whenever ascertained; and simple remedial justice requires, under the facts in this case, that the intention and wish of the deceased soldier be carried out. This court, by its judgment herein rendered, so orders. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265784/ | 69 F. Supp. 409 (1947)
GEORGE A. FULLER CO.
v.
UNITED STATES.
No. 44585.
Court of Claims.
February 3, 1947.
*410 Alexander M. Heron, of Washington, D. C. (Hinton & Heron, of Washington, D. C., on the briefs), for plaintiff.
Currel Vance, of Washington, D. C., John F. Sonnett, Asst. Atty. Gen., for defendant.
Before WHALEY, Chief Justice, and WHITAKER, MADDEN, JONES, and LITTLETON, Judges.
WHITAKER, Judge.
The plaintiff sues the defendant for damages for delays caused by defendant in failing to furnish models on time, for delays caused by changes made in the work, and for delay in the approval of the limestone to be used.
The plaintiff entered into a contract for the erection of the Archives Building in the City of Washington, D. C. Under it the Government agreed to furnish models for the ornamentation of granite, limestone, bronze, plaster, and other materials used in the construction of the building. There were delays in the furnishing of the models for the granite and limestone, and for the plaster, and for the bronze and *411 glass. The plaintiff also claimed that it had been delayed by changes made by the Government and by the Government's failure to promptly approve the limestone for the building, but it says these delays ran concurrently with the model delays, and, hence, it will be unnecessary to consider them, since we are of opinion that the delays in furnishing the models for the building delayed its final completion and that the Government is liable therefor.
The contracting officer, on February 11, 1935, in response to plaintiff's letters of December 5, 1934, and January 16, 1935, claiming delays on account of the tardy furnishing of models and of the approval of limestone, and on account of a carpenters' strike, and on account of changes, wrote plaintiff, in part, as follows: "From time to time you notified this office of delay due to the lack of models, which constituted the necessary notification within ten days as required by your contract. The engineer verifies your statement that the delay has reached the extent of six months from causes beyond your control and without your fault or negligence. Under Article 9 of your contract note will be made at time of final settlement of one hundred and eighty (180) calendar days delay on account of the conditions outlined above in connection with the waiver of liquidated damages. It is noted that you state in letter of January 16, that all of the models had not yet been received by your subcontractors. It is understood at this writing that the last models have now been received but it appears that the delay taken into consideration as named above will be sufficient to cover any other items which might arise. You state that you have claims for additional cost on account of the delay set forth above. You are reminded that your contract contains no provision for payment on account of delays under Article 9 thereof, and in accordance with the rulings of the Comptroller General of the United States, this Division would be without authority to make payment on such claims if you present them."
This letter constitutes an admission on the part of the Government that the contractor was in fact delayed for a period of six months. It is admitted that the defendant caused the delays. The defendant offers no evidence sufficient to overcome this admission and, hence, we accept it as a statement of the true facts. Irwin & Leighton v. United States, 101 Ct. Cl. 455. Plaintiff has been unable to show that the delay was of longer duration, and we have accordingly found as a fact that plaintiff was delayed in the completion of the work for a period of six months due to the defendant's failure to furnish models on time. Under prior decisions of this court and of the Supreme Court, it follows that the defendant is liable for the damages sustained as a result of these delays.
It is true there is no express provision in the contract which renders the Government liable for delays it may cause the contractor in the performance of the work, nor is there any express provision exempting it from liability for such delay; it is, however, an implied provision of every contract, whether it be one between individuals or between an individual and the Government, that neither party to the contract will do anything to prevent performance thereof by the other party or that will hinder or delay him in its performance.
Williston on Contracts, Section 1293-A, quotes the following statement from Gay v. Blanchard, 32 La.Ann. 497: "Where a party stipulates that another shall do a certain thing, he thereby impliedly promises that he will himself do nothing which will hinder or obstruct that other in doing that thing."
Williston says that "such hindrance is moreover a breach of contract." In Section 1318 he says: "In any case where the plaintiff's performance requires the cooperation of the defendant, as in a contract to serve or to make something from the defendant's materials or on his land, the defendant, by necessary implication, promises to give this cooperation and if he fails to do so he is immediately liable though his only express promise is to pay money at a future day. Indeed, there is generally in a contract subject to either an express or an implied condition an implied promise not to prevent or hinder performance *412 of the condition. Such prevention, if the condition would otherwise have been performed, is, therefore, an immediate breach of contract, and if of sufficiently serious character damages for the loss of the entire contract may be recovered."
In support of these statements Williston cites, among a number of other cases, United States v. Peck, 102 U.S. 64, 26 L. Ed. 46; and Lovell v. St. Louis Mutual Life Insurance Co., 111 U.S. 264, 274, 4 S. Ct. 390, 28 L. Ed. 423. An examination of these cases shows that they fully support the statements made. The last case cited above relies upon the decision of the Supreme Court in United States v. Behan, 110 U.S. 338, 4 S. Ct. 81, 85, 28 L. Ed. 168. This was a case brought against the United States for wrongfully terminating a contract. The Supreme Court affirmed the judgment of this court awarding damages therefor. In the course of its opinion, among other things, the Supreme Court said: "The willful and wrongful putting an end to a contract, and preventing the other party from carrying it out, is itself a breach of the contract for which an action will lie for the recovery of all damage which the injured party has sustained."
It is a necessary corollary to this principle that one who, while not preventing the other party from carrying out the contract, nevertheless hinders or delays him in doing so, breaches the contract, and is liable for the damage which the injured party has sustained thereby. The Supreme Court so held in United States v. Smith, 94 U.S. 214, 24 L. Ed. 115. In this case it was said: "Under such circumstances, the law implies that the work should be done within a reasonable time, and that the United States would not unnecessarily interfere to prevent this." The Supreme Court accordingly affirmed the judgment of this court awarding damages for the unlawful delay. See also United States v. Speed, 8 Wall. 77, 84, 19 L. Ed. 449, and Restatement of the Law of Contracts, Section 315.
Indeed, so far as we have been able to find, it has never been doubted that the Government is liable for delays caused by it, in the absence of a clause in the contract expressly exempting it from liability therefor. Shortly after this court was established, the Supreme Court so held in Clark v. United States, 6 Wall. 543, 18 L. Ed. 916. It also so held in United States v. Speed, supra; and in United States v. Smith, supra; and in United States v. Mueller, 113 U.S. 153, 156, 5 S. Ct. 380, 28 L. Ed. 946; and in United States v. Wyckoff Pipe & Creosoting Co., 271 U.S. 263, 46 S. Ct. 503, 70 L. Ed. 938; and this was implied in Plumley v. United States, 226 U.S. 545, 548, 33 S. Ct. 139, 57 L. Ed. 342.
The decisions of this court so holding are too numerous to list them all; but see Weehawken Dry Dock Co. v. United States, 65 Ct. Cl. 662, Id., 672; Carroll v. United States, 67 Ct. Cl. 513; Donnell-Zane Co. v. United States, 75 Ct. Cl. 368; Pope v. United States, 75 Ct. Cl. 436; Levering & Garrigues Co. v. United States, 73 Ct. Cl. 566; Knauff Co. v. United States, 78 Ct. Cl. 423; Karno-Smith Co. v. United States, 84 Ct. Cl. 110; Ouilmette Construction & Engineering Co. v. United States, 89 Ct. Cl. 334; Phoenix Bridge Co. v. United States, 85 Ct. Cl. 603; Plato v. United States, 86 Ct. Cl. 665; Sobel v. United States, 88 Ct. Cl. 149; Newport News Shipbuilding & Dry Dock Co. v. United States, 79 Ct. Cl. 1, 25, 37, 46; and Harwood-Nebel Construction Co. v. United States, 105 Ct. Cl. 116.
It is true in the cases of Wells Brothers Co. v. United States, 254 U.S. 83, 41 S. Ct. 34, 65 L. Ed. 148, and Wood et al. v. United States, 258 U.S. 120, 42 S. Ct. 209, 66 L. Ed. 495, it was held that the defendant was not liable for damages for delay, but this was because of express provisions in these contracts exempting the Government from liability therefor. In the Wells Brothers Co. case [254 U.S. 83, 41 S. Ct. 35] the contract provided that "no claim shall be made or allowed to the contractor for any damages which may arise out of any delay caused by the United States." There was a similar provision in the contract in the case of Wood et al. v. United States. But, in the absence of such an express provision, neither this court nor the Supreme Court has ever exempted the Government from liability for damages for delays not contemplated by the contract.
*413 Nor has it ever been thought that the provisions of Article 9, providing for an extension of time for completion of the work on account of delays due to unforeseen causes, including those caused by the Government, would serve to relieve defendant of liability for damages for such delays. In the following cases this court has held that this provision did not relieve the Government from liability: Levering & Garrigues Co. v. United States, supra; Newport News Shipbuilding & Dry Dock Co. v. United States, supra, and Karno-Smith Co. v. United States, supra. This provision for an extension of time related to the assessment of liquidated damages against the contractor and had no reference to the recovery of damages by the contractor for delays caused by the Government.
The proceedings of the Interdepartmental Board of Contracts and Adjustments, which board formulated and adopted the Standard Form of Government Contract for Construction, which is involved in this case, demonstrate that it was not intended by Article 9 of the contract, providing for an extension of time, to exempt the Government from liability for damages for delay. Relevant proceedings of this board are set out in findings 10 to 16 in the case of Harwood-Nebel Construction Co. v. United States, 105 Ct. Cl. 116, and were relied upon in support of the decision in that case.
This board was created on November 22, 1921, for the purpose of formulating such a standard government contract. On August 20, 1926, it finally agreed upon the form thereof and on that date the contract involved in this case was promulgated. Some six years later it was called to the attention of that board that the Comptroller General and others had ruled that in view of the provisions of Article 9 a contractor could not recover damages for delays caused by the Government. The board met on November 11, 1932, for the purpose of considering this situation.
It was stated by one of the members of the board that it was not intended by Article 9 "that the contractor should be deprived of actual damages necessarily incurred by acts of the Government." All the members of the board seemed to agree with this statement, and a committee was appointed to consider means to correct the rulings denying damages.
At the following meeting a week later, it was recommended that a proviso be added to Article 9 to read: "Provided, further, that this article shall not be construed as denying the contractor actual, reasonable and necessary expenses due to delays caused by the Government." This provision was discussed at length at this meeting and at meetings held on November 25, December 2, December 9, December 16, and December 23, 1932. It was, however, decided that it was not necessary to amend Article 9, and that it was inadvisable to do so, since the situation could be corrected by proper instructions to contracting officers for drafting the specifications.
Accordingly, the board drafted a letter "To the Heads of Departments and Establishments," which reads as follows:
"Subject: Standard Government Contract Delays, Damages.
"The attention of the Interdepartmental Board of Contracts and Adjustments has been brought to a number of cases where contractors, because of the language of the contract, have been denied additional compensation for extra expenses due to delays caused by the Government. An examination of these cases has disclosed that there have been incorporated in the specifications provisions reserving the right to the Government to suspend the work, or other provisions which contemplated delays of the work by the Government, without providing for additional compensations to the contractor on account of such delays (12 Comp.Gen. 179; id. 227).
"This Contract Board in its work of standardization was directed, in the order creating it, to eliminate those uncertainties of construction and hazards to be assumed by the contractor which have operated to increase the cost of Government work. Accordingly, there was omitted from the Standard Form of Construction Contract any provision which reserved the right to the Government to suspend the work or denied the contractor damages due *414 to delays caused by the Government. See Wells Bros. Co. v. United States, 254 U.S. 83, 41 S. Ct. 34, 65 L. Ed. 148.
"The Contract Board has concluded that it would be inadvisable to amend at this time the Standard Form of contract in the particular indicated but that this situation should be remedied by proper administrative action.
"It is evident that the incorporation in the specifications of provisions reserving to the Government the right to suspend the work, without compensation to the contractor, tends to increase the cost of the work. Therefore, such a provision should be used only in exceptional cases where conditions fully justify it and in such cases this Contract Board suggests the use of the following language in the specifications in fairness to the contractor:
"`The Government may at any time suspend the whole or any portion of the work under this contract but this right to suspend the work shall not be construed as denying the contractor actual, reasonable, and necessary expenses due to delays caused by such suspension, it being understood that expenses will not be allowed for such suspensions when ordered by the Government on account of weather condition.'"
Here, then, is a declaration by the Government agency drafting the contract for use in all government construction contracts, and which is involved in this case, that it was not intended thereby to deprive the contractor of its right to damages for delays caused by the acts of the Government. The party drawing the contract so construes it. How can the courts give it a contrary construction?
Based in part upon the proceedings of this board, we held in Harwood-Nebel Construction Co. v. United States, supra, that the defendant was liable for damages caused by its delay. See pages 160 to 161 of 105 Ct.Cl. We have never held to the contrary.
These holdings in no way conflict with the decisions of the Supreme Court in Crook Co. v. United States, 270 U.S. 4, 46 S. Ct. 184, 70 L. Ed. 438, and United States v. Rice, 317 U.S. 61, 63 S. Ct. 120, 87 L. Ed. 53. These cases exempted the Government from liability for damages caused by delays incident to the making of changes, but this was for the reason that the Government had reserved the right to make changes and because it necessarily followed that some delay would result therefrom. Here there was no reservation of a right to delay furnishing the models.
It had been recognized by this court before even the Crook case had been decided that the Government was not liable in damages for reasonable delays due to making changes; Moran Brothers Co. v. United States, 61 Ct. Cl. 73; but in that case we called attention to the difference between a delay caused by the expressly reserved right to make changes and one caused by the Government's failure to furnish materials which the contractor was to use in performing his contract. On page 105 of 61 Ct.Cl. in our opinion in that case, after discussing the delays due to changes, we said: "The delays caused by the Government's failure to supply armor and ordnance stand upon a different basis. There is nothing in the contract authorizing or implying these delays. The understanding was that certain things would be furnished as needed. They were not furnished and the Government breached its contract in that regard. It is therefore liable for the damages arising from this breach."
Neither in the Moran Brothers Co. case nor in this case was there any provision, either express or implied, exempting the Government from liability for damages incurred as a result of delays in the furnishing of the materials to be used by the contractor. In the absence of such a provision, we think, under all the authorities, that the Government has breached its implied agreement not to prevent or hinder or delay the contractor in the performance of its contract.
But, it is said that the Supreme Court in United States v. Foley, 67 S. Ct. 154, has reached a contrary conclusion. In that case the contractor was required to install a field lighting system at the National Airport, Gravelly Point, Virginia. It was to install it as the shoulders on the runways were rough-graded. The Government, however, due to conditions beyond its control, *415 was unable to rough-grade these shoulders in time for the contractor to complete its work within the contract time. The Supreme Court held that the Government had not warranted that it would have these shoulders ready in time for the contractor to complete its work in the contract time and that for that reason it was not liable for the delays caused by its inability to do so. In the case at bar we think the Government did agree to furnish these models as soon as the contractor needed them. We are of the opinion that it was an implied obligation on the part of the Government not to delay the contractor's work by a failure to furnish it the models as required, and that if it did so, it is liable to it for the consequent damages. We do not believe the Supreme Court intended by its decision in the Foley case to overrule its numerous prior decisions so holding.
We think that the Government when it agreed to furnish the models without condition was bound to furnish them on time as much as if an express provision to this effect had been incorporated in the contract, and that if it failed to do so it breached this provision of the contract and is therefore liable for any damages resulting therefrom.
Certainly the Supreme Court would not exempt the Government from liability when the delay was wilful, as in James Stewart & Co. v. United States, 63 F. Supp. 653, 105 Ct. Cl. 284, where the architect, who had to pass on the models to be furnished by the Government, went to Europe before selecting them and stayed there three months, disdainful of the effect this would have on the progress of plaintiff's work. But not only is the Government liable for wilful delay, it is liable for any delay except one caused by the exercise of a reserved right or one brought about by an act of God, of the law, or the other party. United States v. Gleason, 175 U.S. 588, 602, 20 S. Ct. 228, 44 L. Ed. 284; Carnegie Steel Co. v. United States, 240 U.S. 156, 164-166, 36 S. Ct. 342, 60 L. Ed. 576; Columbus Ry., Power & Light Co. v. City of Columbus, 249 U.S. 399, 410-414, 39 S. Ct. 349, 63 L. Ed. 669, 6 A.L.R. 1648. We think the plaintiff has carried the burden upon it when it shows failure to deliver the models on time, and that thereupon the burden of showing an excusable reason therefor is cast upon the defendant. No reason has been shown for the delay in this case except the meticulosity of the architect in passing on the models. This is not a sufficient excuse. The Government should have ordered the models in sufficient time to have enabled the contractor to proceed without delay, or, if it desired to furnish them in its own good time with impunity for any delay caused the contractor, it should have incorporated in the contract a provision exempting it from liability for failure to furnish them when needed.
Had it done the latter the contractor could have protected itself by increasing its contract price; but under all prior decisions of this court and of the Supreme Court as well, the contractor believed, and had a right to believe, that, if the Government delayed it, it would respond in damages. We have no reason to conclude, therefore, that the contractor, in fact, protected itself against these delays. In such a situation justice requires, and the law, as announced by this court and the Supreme Court, requires that the Government compensate this contractor for those damages which it has caused it to suffer.
Plaintiff is entitled to recover the cost of temporary heat and its overhead expenses during the six months' delay. This amounts to a total of $26,851.16. Judgment for this amount will be entered. It is so ordered.
MADDEN, JONES, and LITTLETON, Judges, concur.
WHALEY, Chief Justice, took no part in the decision of this case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265786/ | 69 F. Supp. 881 (1947)
THE NORTE.
No. 21 of 1945.
District Court, E. D. Pennsylvania.
February 10, 1947.
*882 Krusen, Evans and Shaw, by Thomas E. Byrne, Jr., all of Philadelphia, Pa., and Hill, Rivkins & Middleton, by Arthur O. Louis, all of New York City, for libellant.
Rawle & Henderson, by Harrison G. Kildare, all of Philadelphia, Pa., for claimant-respondent.
KALODNER, Circuit Judge.
This libel arises out of the discharge in a damaged condition of part of a shipment of tartaric acid powder transported aboard the steamship "Norte" from Barcelona, Spain, to Philadelphia, the port of discharge. The responsibility for the alleged damage is the ultimate issue, and attending it is the question common to cargo damage actions, the propriety of the handling, stowing, carrying, keeping and caring for the cargo, but here, the claimant-respondent also raises a question relating to the existence of damage for which recovery may be had.
The cause having been heard by the Court without a jury, on the basis of the pleadings and the evidence, I make the following
Findings of Fact.
1. At all material times, Emerson Drug Company, the libellant herein, was a Maryland corporation, and was the owner of the tartaric acid powder involved in this action.
2. At all material times, the steamship "Norte" was a general ship engaged in the common carriage of merchandise upon the high seas for hire between ports in Spain and the port of Philadelphia.
3. At all material times, claimant-respondent Domingo Mumbru was and is a citizen and resident of Spain and owned, operated, managed and controlled the steamship "Norte."
4. The "Norte" is a vessel of Spanish registry, 321'1" in length, 39'4" in beam and 25'7" in depth. It was built in 1893. In 1943-44 a tweendeck was constructed in the No. 1 hold. Steel tanks constituted the floor of the No. 1 hold.
5. On November 16, 1944, at Barcelona Spain, La Productora de Borax y Articulos Quimicos S. A. delivered to the steamship "Norte" and claimant-respondent 250 casks of tartaric acid powder to be transported to Philadelphia.
6. The tartaric acid powder was packed in wooden barrels or casks about 3 feet high and 1½ to 2 feet in circumference at the widest point. Each cask had a double paper lining. Each cask contained 224 pounds of tartaric acid powder.
7. The casks of tartaric acid powder were in apparent good order and condition when received aboard the "Norte". No notations or exceptions were made on the bill of lading.
8. The casks of tartaric acid powder were stowed at the extreme forward end in lower No. 1 hold, athwartships, in two rows, two tiers high. The casks in the bottom tier were upright, some resting on dunnage over the floor, or tank top, of the hold; those in the second tier were laid on their sides over dunnage. Tartaric acid powder is dry cargo.
9. Above the casks of tartaric acid powder were cases of cigarette paper, bags of briar wood and bags of almonds, in that order upwards.
10. Aft of the casks of tartaric acid powder were 1012 barrels of olives in brine going across the hold and from the aft bulkhead forward to about midway under the hatch, and rising eight or nine tiers high. Under the bottom tier, there was sawdust about one inch thick and each barrel in that tier rested on chocks at the quarters. Between each tier there was *883 a double layer of dunnage and each barrel in the upper tiers also rested on chocks at the quarters over the dunnage. Olives in brine are wet cargo.
11. Between the casks of tartaric acid powder and the barrels of olives there was a wall of baled cork, about 30 inches in thickness, running athwartship.
12. After loading the tartaric acid powder at Barcelona, the "Norte" proceeded to Tarragona, Alicante, Malaga, Centa, Cadiz, Seville and then to Cadiz again. The "Norte" departed Cadiz for Philadelphia on December 22, 1944; she arrived at Overfalls Light on January 14, 1945, took on a pilot and moved to Richmond on the Delaware River, where she was anchored until January 29, 1945, when she was berthed at Philadelphia.
13. On December 31, 1944, the sea reached force 8 on the Beaufort scale; on January 1, 1945, the wind force was 8 and 9, and the sea 7 and 8. On the latter day the steering gear broke down necessitating use of the hand steering gear for about five hours. On January 2, 1945, the wind and sea force was 6; on January 6, 1945, wind force 6 and 7, sea force 5 and 6; on January 9, 1945, wind force was 8 and sea force 7, both decreasing to 3. On January 11, 1945, the steering chain broke again and was out of operation for two and one-half hours; wind and sea force was 5. The weather and the breaking of the steering chain caused the ship to roll and pitch heavily.
14. The "Norte" had two ventilators with 10 inch shafts at the forward port and starboard corners of hold No. 1, and one ventilator aft which did not service the lower hold and was kept closed because of the deck cargo. During the voyage from Cadiz to Philadelphia, only one of the forward ventilators was fitted with a cowl which was kept trimmed into the wind; the other forward ventilator, being a stump, was intended to act as an air exhaust for the hold. The ventilators were closed during bad weather. The prevailing winds were westerly and southwesterly, blowing from bow to stern.
15. The forward draft of the "Norte" was 19.6 feet; aft, it was 21 feet. The bilge tanks in No. 1 hold, located along the sides and covered with new limber boards permitting water to run into the bilges from the hold, were connected with the bilge tanks in the No. 2 hold. Water in the bilges was measured twice daily; in No. 1 hold it reached 4 inches and in No. 2 hold, 12 inches during bad weather. Excess water was pumped off.
16. On discharge at Philadelphia, 124 casks of the tartaric acid powder, all from the bottom tier, were found to have been stained. The stains, grey and light green in color, appeared on the ends of the casks, rising up the sides for 2 to 6 inches. The paper lining was stiff and stained and the acid caked in the areas of the stains. The metal hoops at the lower ends of the casks showed rust. 126 casks of tartaric acid powder were discharged in good condition and accepted by the libellant.
17. A joint survey of No. 1 lower hold was held on February 15, 1945. The limber boards, the dunnage then in the hold, and the tank tops were wet with salt water, as were the stained casks of tartaric acid. The salt water came principally from leaking barrels of olives. There was also evidence of pronounced sweat.
18. Wiley and Company, a firm of analytical chemists, was engaged, upon joint agreement of the libellant's and the claimant-respondent's surveyors, and twelve samples of the caked tartaric acid powder from the stained casks were submitted for chemical analysis. Duplicate samples were retained for analysis by the libellant and for the claimant-respondent.
19. The reports of Wiley and Company disclosed that of the twelve samples, sulphates were faintly positive in all; chlorides were faintly positive in nine and clearly positive in three. Sulphates and chlorides were clearly positive as to the stained paper lining in each instance.
The libellant's chemist found excessive moisture, sulphates and chlorides, which were sufficient to warrant rejecting the acid for failure to meet the specifications prescribed in the Pharmacopoeia of the United States, 11th revision.
The claimant-respondent's analyst found sulphates and chlorides, but not to such an *884 extent as to constitute a variation from the standards of the Pharmacopoeia of the United States, 11th and 12th revisions.
20. By joint agreement, the claimant-respondent's surveyor arranged with a New York firm to take the 124 stained casks and to separate the caked from the uncaked acid powder.
21. 20,342 pounds of uncaked acid powder were packed in 91 new casks; 6,797 pounds of caked acid powder were packed in 30 new casks; 637 pounds were lost in the process of separation. Nothing was done to remove any impurities.
22. Claimant-respondent's surveyor took samples of both portions of the tartaric acid powder. The report of the analysis of the sample from the uncaked acid powder was sent to the libellant. Libellant accepted the 91 casks.
23. Claimant-respondent's analyst found that the samples from the 91 casks and from the 30 casks met the official Pharmacopoeia standards and that they were the same as the samples which were duplicates of those submitted to Wiley and Company.
24. By agreement, claimant-respondent's surveyor arranged for the sale of the 30 casks of caked acid powder at the rate of 63 cents per pound, duty paid, or a total of $4,282.11. This acid was not "prime goods" because of its caked condition. A sample of tartaric acid powder was tested at the request of the purchaser by an independent chemist and found to satisfy the specifications of the Pharmacopoeia of the United States, 12th revision.
25. The tartaric acid powder herein involved was purchased by the libellant as meeting the standards of the Pharmacopoeia of the United States, 11th revision, and would have accepted such of the shipment as met the specifications therein stated. The 12th revision of the Pharmacopoeia became official in November, 1942, but any difference between the two revisions is not pertinent here.
26. The market value of tartaric acid powder of the kind and quality herein involved, in good condition, at the date of delivery, was 83 cents per pound, duty paid.
27. The libellant incurred separation expenses in the amount of $1,784.08, and surveyors' expenses, etc., in the amount of $334.87.
Discussion.
Three grounds are asserted by the libellant as a basis for the liability of the claimant-respondent: (1) Improper and faulty stowage, (2) inadequate ventilation, and (3) deviation. Denying these, the claimant-respondent counters with the assertion that there was no damage for which recovery may be had, or alternately, that the damage was not as great as claimed by the libellant.
Taking up first the question of recoverable damages, if any, it should be noted at the outset that 124 of the 250 casks of tartaric acid powder (hereinafter referred to as powder) were stained and that the powder in the area of the stains was caked. Further, the libellant's witness Millard, testified that the powder was purchased as meeting the specifications of the Pharmacopoeia of the United States, 11th revision,[1] and that despite the caking, it would have been accepted and used if the powder otherwise met U.S.P. standards. The issue, then, is whether the powder complied with the U.S.P. requirements.
Pursuant to agreement, twelve samples were taken from the stained casks; these samples were divided into three portions, one portion being retained by the libellant for analysis, one by the claimant-respondent's surveyor, Gunn, for analysis, and the third being given to Wiley and Company, *885 an independent firm of chemical analysts. The results of the tests from Gunn's laboratory and those from Wiley and Company were sent to the libellant. After further discussion, on agreement, Gunn arranged with a New York firm to separate the uncaked and the caked powder in the stained casks. There resulted 91 casks of uncaked powder and 30 casks of caked powder. Gunn took samples of both, sending to the libellant a report on the uncaked powder, which the libellant, after its own tests, accepted. Gunn and Carman, the libellant's surveyor, discussed the disposition of the caked powder, and on agreement, Gunn arranged for and effectuated a sale of the 30 casks to one Wagner.
According to the libellant's analyst, tests of the caked powder made by her revealed the presence of excess moisture, sulphates and chlorides, which made the powder unsuitable under U.S.P. specifications. The report of Wiley and Company on the twelve samples disclosed sulphates faintly positive in all, chlorides faintly positive in nine and chlorides clearly positive in three samples. The claimant-respondent's analyst also found sulphates and chlorides, but testified that they were not present in such sufficient quantities as to disqualify the powder. Further, he testified that on his analysis the lot sold to Wagner also met U.S.P. requirements, that the sample from that lot was identical chemically to the samples which duplicated the Wiley and Company samples, and that, insofar as U.S.P. was concerned, there was no difference between the lot accepted by the libellant and the lot sold to Wagner.
Wagner testified, by deposition, that the powder he purchased was not "prime goods" because of its caked condition. However, a sample taken before the purchase was submitted by him to an independent analyst, Lauro, who reported that it met U.S.P. specifications, although Lauro also admitted that sulphates may have been present; he found no salt.
The testimony of Gunn clearly establishes that the powder in the stained casks was not reprocessed; it was simply separated according to whether it was caked and thus divided was repacked in new casks. No attempt was made to remove any alleged impurities, and there is no evidence that mere separation in itself would have affected the chemistry of the caked material, except perhaps with respect to moisture content.[2] It follows, therefore, that the separation process affords no aid to the claimant-respondent.
The monograph on tartaric acid powder in the U.S.P. provides a test for purity which specifically refers to sulphate. No mention is made therein of chlorides. However, in the General Notices of the U. S.P. the following is found (U.S.P. XI, p. 2; U.S.P. XII, p. 5):
"Unofficial Methods for Determining Added Foreign Substances
"Inasmuch as the primary object of the Pharmacopoeia is to assure the user of official medicinal substances of their quality and as it is manifestly impossible to include in each monograph a test for every impurity or adulterant that might be present, therefore it is to be understood that the presence of any added foreign substance, which could not have resulted from the use of the ingredients in an official formula, constitutes a variation from the official standard and proof of such variation may be based upon the application of recognized scientific methods whether such methods appear in the Pharmacopoeia or not."
The claimant-respondent does not deny that traces of sulphates or chlorides may have been present, but it asserts that these impurities were not present to the extent that the powder varied from the U.S.P. standard. That is the point of departure for the parties.
The test for sulphate prescribed by the U.S.P. and the test for chlorides as stated in the U.S.P.[3] in their nature leave room *886 for interpretation; hence, also for reasonable disagreement in borderline instances. Thus, claimant-respondent's analyst conceded the presence of sulphates and chlorides, but in such minor quantities that the U.S.P. standard was nevertheless fulfilled. The libellant's analyst reached the opposite conclusion.
There are available, however, the results obtained by two independent, disinterested analysts, Wiley and Company and Lauro. But these, too, are contradictory. Nevertheless, the evidence warrants the full recognition and credit by the Court of the Wiley and Company reports. Wiley and Company tested twelve samples. Those samples were carefully selected under the supervision of the surveyors for both parties while the powder was in its original containers. They were a fair representation of the caked material. On the other hand, there is no such evidence as to the fairness of the representation of the sample tested by Lauro. Indeed, it was not clearly established that the sample was taken from the caked powder, for Wagner stated that the sample was sent to him, while Gunn stated that it was taken by Wagner "or his principals". Moreover, that sample was taken after the separation process, and is open to the criticism, in absence of contrary evidence, that it may have included uncaked powder as well in such quantities as to affect the outcome of the analysis.
Accordingly, the Court concludes that the caked powder contained sulphates and chlorides, and accepting Millard's testimony, that they were present in sufficient degree to constitute a variation from the U.S.P. standards. The libellant was therefore justified in rejecting the caked material.
The issue next to be determined is the responsibility of the claimant-respondent for the damage. The evidence, it is conceded, establishes the receipt of the casks of powder on board the "Norte" in apparent good order and condition, and the discharge of 124 of them in a damaged state. The damage was caused by contact with the salt water or brine which came from the barrels of olives. The brine was the principal contaminating factor insofar as the contents of the casks are concerned.
On the evidence, claimant-respondent's liability is admittedly governed by Section 4(2) (q) of the Carriage of Goods by Sea Act, 49 Stat. 1210, April 16, 1936, 46 U.S. C.A. § 1304(2) (q).[4] The burden of exoneration according to the terms of the statute rests upon the claimant-respondent. Navarro v. The Ciano, D.C.E.D.Pa., 1946 69 F. Supp. 35. Whether the damage was caused or contributed to by the fault or neglect of the carrier, its agents or servants, is the subject of the present inquiry.
Claimant-respondent's surveyor, Bryant, testified that the barrels of olives were stowed properly in "bilge and cantline" fashion. But the detailed description of the stowage as given by the chief mate refutes that conclusion. The "bilge and cantline", sometimes referred to as "bung up and bilge free", method of stowing barrels has as its basic principle that the "bilge" of a barrel, its widest and weakest part should never bear the weight of the barrel itself or the tier above. Properly, the barrels in the first or bottom tier should rest bung up on dunnage placed at the quarters; the barrels in the second tier are laid in the "cantlines" of the lower tier, that is, the "dip" made by four barrels in the lower tier.[5] The result is that each barrel rests on its quarters, "bilge free," and each in the upper tiers rest on the quarters of the four barrels beneath it.
In the instant case, dunnage was placed between each tier of barrels; each barrel rested on chocks under its quarters on the *887 "floor" thus made. It is obvious that this method effectively destroyed the advantage and overlooked the fundamental principle of "bilge and cantline" stowage: the floor of dunnage necessarily rested on the bilges of the barrels beneath it; the barrels in the lower tiers thus supported the entire weight of the dunnage and the upper barrels on their bilges, exactly where there should have been as little pressure as possible.[6] this was unmistakably bad stowage.[7]
The method of stowing the olives is of particular importance in view of the weather conditions the "Norte" encountered on its transatlantic voyage. The weather may have been severe, but it was expectable during the winter season and did not amount to a "peril of the sea." The Vizcaya, D.C.E.D.Pa., 1946, 63 F. Supp. 898. Proper stowage requires recognition of weather conditions which may be anticipated. Giving to claimant respondent the benefit of the assumption that a reasonable amount of leakage from the barrels of olives may be expected even under the best stowage as a result of the working of the ship during rough weather, nevertheless, the manner of stowage here employed rendered the barrels subject to inordinate pressure at their weakest point. Undoubtedly excessive leakage resulted, and this is attributable to fault. Indeed, the record discloses that water in the bilges increased markedly during storms and this was attributed to the leakage from the barrels of olives.
Moreover, no solace for the claimant-respondent derives from the twice broken steering gear. There is no evidence as to the nature of the inspection made at the commencement of the voyage. Since the weather did not amount to a "peril of the sea" on either occasion when the breakage occurred, it can only be concluded that fault existed here also. And if, as may be reasonably assumed, the breaking of the steering gear rendered the vessel more amenable to the elements, with increased working of the cargo and concomitant enhancement of leakage, the claimant-respondent is responsible. The Vizcaya, supra.
Fault is also manifest in the stowage of the casks of powder. Again granting the assumption of reasonable leakage from the barrels of olives, particularly in view of the weather, dunnage was necessary and desirable in sufficient quantities to raise the powder from the floor of the hold to allow the water in the hold to run clear of the cargo into the bilges. Crediting the chief mate, for the benefits of the claimant-respondent, and assuming that there was some dunnage under some of the casks of powder in the bottom tier, the evidence fails as to sufficiency. Sawdust is inadequate as was testified because it absorbs and holds moisture in addition to threatening the freedom of the rose-boxes. In any event, no attempt was made, most likely because of impossibility, to separate those casks resting on dunnage from those admittedly short of that protection. The Vallescura, 1934, 293 U.S. 296, 55 S. Ct. 194, 79 L. Ed. 373. Of course, it is well-settled, that dunnaging is the responsibility of the carrier. Section 3(2), Carriage of Goods by Sea Act, 49 Stat. 1208, April 16, 1936, 46 U.S.C.A. § 1303(2).
*888 All of the casks of powder in the bottom tier were stained, the stains varying from two to six inches up the sides of the casks. The damage was caused by the failure of sufficient dunnage under the casks of powder and by excessive leakage from the barrels of olives as a result of their faulty stowage. The evidence of fault, as so far developed, forces the Court to place responsibility upon the claimant-respondent. It is hardly necessary to rely on those cases holding that negligence as an inference of fact is established when dry cargo is damaged by liquid goods. See The Schickshinny, D.C.S.D.Ga., 45 F. Supp. 813.
In addition, it may be noted that the "Norte" lacked proper and sufficient ventilation in the No. 1 hold. There were three 10 inch ventilators, two forward and one aft. The aft ventilator was not in use because of the deck cargo. Of the two forward ventilators, only one was fitted with a cowl, which was kept trimmed into the wind. The prevailing winds were westerly and southwesterly, blowing from bow to stern. The other ventilator was a mere stump, intended to act as an air exhaust for the hold. The evidence is that the ventilation was insufficient. Also, it was improperly managed. Generally, the lee ventilators should be trimmed into the wind and the weather ventilators against the wind, since the natural flow of warm air in an enclosed compartment is opposite to the direction of the wind. Ford, Handling and Stowage of Cargo (2nd ed. 1944) 218. Captain Parry, the libellant's surveyor, testified to phenomenal sweat in the hold as a result of this condition. Evidence of sweat was admitted by the chief mate. Naturally, the sweat contributed to the amount of water in the hold and bilges[8] combining with the brine from the olives.
Accordingly, in the opinion of the Court, the evidence affirmatively reveals fault on the part of the carrier, its agents or servants, which actually caused and/or contributed to the damaging of the powder. Claimant-respondent must be held liable therefor. Carriage of Goods by Sea Act, supra; The Vallescura, supra; Navarro v. The Ciano, supra. Consequently, it is not necessary to discuss the contention of the libellant relating to deviation.
Only a word need be said with respect to damages. Expenses incurred by the libellant, for its surveyors, tests, etc., amounted to $334.87. Expenses of separation amounted to $1,784.08. These are not contested. The market value of prime tartaric acid powder, admittedly, was 83 cents per pound, duty paid. 7,434 pounds, which if in prime condition would have been worth $6,170.22, were damaged and lost. 6,797 pounds[9] of damaged powder were sold at 63 cents per pound, or at a total of $4,282.11. The libellant is entitled to recover its loss of $1,888.11, in addition to the expenses above, or a total of $4,007.06.
In accordance herewith, I state the following
Conclusions of Law.
1. This Court has jurisdiction over the subject matter and the parties herein.
2. The claimant-respondent, its agents or servants, was guilty of fault or neglect in the handling, stowing, carrying, keeping and caring for the cargo here involved which fault or neglect actually caused, or contributed to, the damage to that cargo.
*889 3. The libellant is entitled to recover in this action against the claimant-respondent its loss and damage in the amount of $4,007.06.
An order may be entered pursuant hereto.
NOTES
[1] The title "Pharmacopoeia of the United States" will be given its usual abbreviation (U.S.P.) throughout, the revision being designated by Roman numerals. U. S.P. XII became effective in November, 1942, but U.S.P. XI was apparently used because it was official in Spain at the time. For the purpose of this case, it is unimportant which is used. It may also be stated that neither revision was introduced into evidence. However, the official Pharmacopoeia is an accepted standard and is so recognized in the Federal Food, Drug, and Cosmetic Act, 52 Stat. 1040 et seq., 1049, June 25, 1938, 21 U.S.C.A. §§ 301 et seq., 351. Consequently, the Court takes judicial notice thereof.
[2] Millard testified that in the course of reprocessing some of the impurities would come out, but she did not know the nature of the operation performed here.
[3] Tartaric acid satisfied U.S.P. purity standards if "no turbidity" is yielded upon application of barium chloride, T.S. Chlorides are present when a white curdy precipitate forms with silver nitrate, T.S.
[4] Section 1304, 46 U.S.C.A. provides:
"(2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from * * *
"(q) Any other cause arising without the actual fault and privity of the carrier and without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants or the carrier contributed to the loss or damage."
[5] Modern Ship Stowage (U.S.Govt., 1942) pp. 123-126; Ford. Handling and Stowage of Cargo (2nd Ed. 1944) pp. 80-85.
[6] In Modern Ship Stowage, pp. 125, 126, it is stated: "There is a considerable difference of opinion as to the advisability of `skidding' or `flooring off' a barrel cargo after several tiers have been laid. By `flooring off' or `skidding' is meant the laying of a platform or floor over a complete tier of barrels. Some authorities hold that the laying of such a floor results in pressure on the bilges of the barrels in the tier immediately beneath it, whereas if there is no flooring, each barrel will rest, as pointed out above, on four barrels beneath it." In the instant case the carrier went further, flooring off each tier.
[7] Mention must be made of the lack of evidence to show that the barrels of olives were in fact stowed "bung up," as they should have been. See discussion in Ford, Handling and Stowage of Cargo, pp. 80-84; see Gulden v. Hijos de Jose Taya, D.C.E.D.N.Y., 1917, 243 F. 780, affirmed 2 Cir., 1918, 252 F. 577. The point is not decisive, but it accentuates one of the ways leakage could have occurred with fault, contributing to the damage. The burden of establishing lack of negligence is, as noted above, on the claimant-respondent.
[8] The record discloses that water in the bilges reached 4" in hold No. 1 and 12" in hold No. 2. There was no separation between the bilges of the two holds. Accordingly, the water in the bilges of No. 1 hold was probably increased by leakage from barrels of olives in No. 2 hold, as testified by the Captain, as well as by sweat and leakage from No. 1 hold. The difference in the quantity of water in the connected bilges is accounted for by the claimant-respondent in the suggestion that the vessel was down 18" by the stern. However, the libellant notes that hold No. 1 was approximately 51' in length as against the overall length for the ship of about 321', so the pitch in the No. 1 hold was not more than about 2.9". In any event, it is possible that the water in the bilges of No. 1 hold, increased from so many sources, was splashed out on the floor particularly during storms when the vessel was pitching and rolling heavily.
[9] 637 pounds were lost in the process of separation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265792/ | 69 F. Supp. 512 (1946)
KARDON et al.
v.
NATIONAL GYPSUM CO. et al.
Civ. A. No. 6203.
District Court, E. D. Pennsylvania.
December 2, 1946.
*513 Henry Arronson, of Philadelphia, Pa., for plaintiff.
R. T. McCracken and E. H. Cushman, both of Philadelphia, Pa., for defendant.
Roger S. Foster, of Philadelphia, Pa., for Securities and Exchange Commission.
KIRKPATRICK, District Judge.
This complaint, in substance, charges a conspiracy, participated in by the three defendants, and certain fraudulent misrepresentations and suppressions of the truth in pursuance of the conspiracy, as a result of which the plaintiffs were induced to sell their stock in two corporations to the Slavins, two of the defendants, for far less than its true value.
None of the three defendants have been served with process in this district. The Slavins were served in the Western District of Michigan; and National, although, being a registered foreign corporation in Pennsylvania it could have been served here, was served at its main office in the Western District of New York. The Slavins have moved to dismiss on the ground that the service upon them was invalid and that the Court has not obtained jurisdiction over their persons. National has moved to dismiss (1) on the same ground and (2) on the ground that the complaint fails to state a valid cause of action against them. National also asserts that, even if served in Pennsylvania, the action could not proceed against it because the Slavins, indispensable parties, have not been and cannot be brought into court.
This Court has jurisdiction over the individual defendants only if the Securities Exchange Act of 1934, 15 U.S.C.A. § 78a et seq., is applicable. Sec. 27 of that Act authorizes extraterritorial service of process in suits "to enforce any liability or duty created by this title or rules and regulations thereunder, or to enjoin any violation of such title or rules and regulations."
Assuming, but not deciding, that the words "to enjoin any violation of such title or rules and regulations" mean enforcement proceedings under Sec. 21 and do not refer to suits by individuals, the main question is whether the defendants' conduct, stated in the complaint as a basis of the plaintiffs' cause of action, gives rise to a liability or involves a breach of duty, created by the Act.
It is not, and cannot be, questioned that the complaint sets forth conduct on the part of the Slavins directly in violation of the provisions of Sec. 10(b) of the Act and of Rule X-10B-5 which implements it. It is also true that there is no provision in Sec. 10 or elsewhere expressly allowing civil suits by persons injured as a result of violation of Sec. 10 or of the Rule. However, "The violation of a legislative enactment by doing a prohibited act, or by failing to do a required act, makes the actor liable for an invasion of an interest of another if; (a) the intent of the enactment is exclusively or in part to protect an interest of the other as an individual; and (b) the interest invaded is one which the enactment is intended to protect. * * *" Restatement, Torts, Vol. 2, Sec. 286. This rule is more than merely a canon of statutory interpretation. The disregard of the command of a statute is a wrongful act and a tort. As was said in Texas & Pacific R. Co. v. Rigsby, 241 U.S. 33, 39, 36 S. Ct. 482, 484, 60 L. Ed. 874, "This is but an application of the maxim, Ubi jus ibi remedium."
*514 Of course, the legislature may withhold from parties injured the right to recover damages arising by reason of violation of a statute but the right is so fundamental and so deeply ingrained in the law that where it is not expressly denied the intention to withhold it should appear very clearly and plainly. The defendants argue that such intention can be deduced from the fact that three other sections of the statute (Sections 9, 16 and 18) each declaring certain types of conduct illegal, all expressly provide for a civil action by a person injured and for incidents and limitations of it, whereas Sec. 10 does not. The argument is not without force. Were the whole question one of statutory interpretation it might be convincing, but the question is only partly such. It is whether an intention can be implied to deny a remedy and to wipe out a liability which, normally, by virtue of basic principles of tort law accompanies the doing of the prohibited act. Where, as here, the whole statute discloses a broad purpose to regulate securities transactions of all kinds and, as a part of such regulation, the specific section in question provides for the elimination of all manipulative or deceptive methods in such transactions, the construction contended for by the defendants may not be adopted. In other words, in view of the general purpose of the Act, the mere omission of an express provision for civil liability is not sufficient to negative what the general law implies.
The other point presented by the defendants is that, under the general rule of law, civil liability for violation of a statute accrues only to a member of a class (investors) for whose special benefit the statute was enacted an argument applied to both Sec. 10 and to Rule X-10B-5. Sec. 10 prohibits deceptive devices "in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors." I cannot agree, however, that "investors" is limited to persons who are about to invest in a security or that two men who have acquired ownership of the stock of a corporation are not investors merely because they own half of the total issue.
Apart from Sec. 10(b), I think that the action can also be grounded upon Sec. 29(b) of the Act which provides that contracts in violation of any provision of the Act shall be void. Here, unlike the point just discussed, the question is purely one of statutory construction. It seems to me that a statutory enactment that a contract of a certain kind shall be void almost necessarily implies a remedy in respect of it. The statute would be of little value unless a party to the contract could apply to the Courts to relieve himself of obligations under it or to escape its consequences. Beyond this, however, as pointed out by Judge Coxe in Geismar v. Bond & Goodwin, Inc., D.C., 40 F. Supp. 876, 878, the 1938 amendment which deals in part with actions "maintained in reliance upon this subsection" clearly contemplates that Congress meant the original statute to be interpreted as providing for civil suits under it. And, as he further pointed out, such suits would include not only actions for rescission but also for money damages.
National's contention that the complaint fails to state a cause of action against it cannot be sustained. Parenthetically, as a practical matter, it does not make much difference on this point whether the complaint states a cause of action under the Act or under the common law because there is diversity of citizenship and National can be served with process in this district at any time. However, I think that the complaint can be sustained both ways. It alleges (1) a conspiracy between the Slavins to defraud the plaintiffs, by making, among other things, untrue statements of material facts, (2) acts by the Slavins in pursuance of the conspiracy consisting, among other things, of falsely representing to the plaintiffs that no negotiations were pending for the sale of the assets of the corporation (Par. 13), (3) an agreement with National during the pendency of the conspiracy and prior to its consummation to sell the assets of the company to National (Par. 15) and (4) that, during the pendency of the conspiracy and prior to its consummation, "The Slavins and National * * * conspired * * * by engaging in acts * * * which operated and were intended to operate as a *515 fraud and deceit upon the plaintiffs * * * and * * * National, did, * * * by devices and other means and instrumentalities" induce the Kardons to part with their stock (Par. 21). Undoubtedly these allegations are vague and wholly lacking in the definitions required by Federal Rules of Civil Procedure, Rule 9, 28 U.S.C.A. following section 723c, in all averments of fraud. But they do allege more than mere nondisclosure on the part of National and I cannot say that they do not state a cause of action. Assuming that merely failing to disclose the negotiations would have been insufficient, if a motion for further particulars is made I would require the plaintiffs to state specifically as to National what, if anything, National did more than fail "to disclose to the plaintiffs its identity, the terms of the negotiations that Slavins had with it," and whether the plaintiffs intend to aver that National had knowledge of and authorized or agreed to the Slavins' intention to keep its part secret or to represent falsely to the plaintiffs that there were no negotiations pending.
The motions are denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265793/ | 69 F. Supp. 976 (1947)
ROLLINS
v.
REPPER.
No. 5997.
District Court, E. D. Michigan, S. D.
February 1, 1947.
*977 William Murray, of Detroit, Mich., for plaintiff.
Carl P. Roehl and Colby & Costello, all of Detroit, Mich., for defendant.
LEDERLE, District Judge.
Findings of Fact.
1. This action was instituted October 7, 1946, by Herbert V. Rollins, trustee in bankruptcy of the estate of Raymond Christian Fraley, bankrupt, to set aside an allegedly preferential transfer made by the Bankrupt to the defendant, William F. Repper, within 4 months prior to the filing of a petition in bankruptcy. At the time of institution of the present action, the parties resided within this Division of this District.
2. On April 12, 1946, said bankrupt filed in this court his voluntary petition in bankruptcy, the same bearing bankruptcy case number 30,998. On the same day, he was adjudicated a bankrupt. With the exception of transactions hereinafter enumerated, his financial condition at that time was substantially the same as it had been since the Fall of 1945, namely, he owed debts of upwards of $13,500, and had nonexempt assets of some $700. The debts were owed to some 44 general, unsecured creditors, practically all of whom were business creditors, and their debts had been contracted and accrued between February, 1944, and October, 1945, inclusive.
3. For some 3 years, the bankrupt and the defendant had been business associates. The bankrupt owned and operated a tool business in Detroit under the assumed name of Premier Tool Company, principally as a result of which his financial involvement arose. In this business, the defendant was employed as a tool salesman by the bankrupt for over a year at a salary of $500 per month. This employment terminated in June, 1945, at which time the bankrupt was unable to meet this monthly salary payment to the defendant.
During the period of this employment, the bankrupt and the defendant formed and operated in Detroit an independent corporation, the Electro-Tool Company, of which the defendant was president and the bankrupt was secretary. Although this corporation showed book profits for some months, its income never equalled expenses, and it was voluntarily dissolved in December, 1944. Prior and subsequent to this dissolution, the bankrupt personally discharged many outstanding obligations of this corporation, amounting to several thousand dollars.
The Premier Tool Company business continued to fail after the defendant left the bankrupt's employ in June, 1945. The bankrupt mortgaged this business to the Union Investment Company, in connection with which mortgage he made an assignment of accounts receivable in August, 1945. On November 1, 1945, this mortgage was foreclosed, which wiped out the interest of the bankrupt in the accounts receivable, machinery and other tangible assets of the business. The purchaser at the foreclosure sale was another of the bankrupt's former salesmen, who, since that time, has carried on the same type of business at the same location.
4. The bankrupt had himself and 6 other persons dependent upon him for support. Between October 30, 1945, and February *978 22, 1946, the bankrupt had no employment, assets or source of income, other than $700 assets scheduled in his bankruptcy petition, a $3300 income tax refund claim, and he was employed by defendant as a salesman in a used car business which the defendant had started in June, 1945, upon leaving the bankrupt's employ. During this period the bankrupt spent his time at the defendant's used car lot, and sold 3 or 4 used cars, for which he received a commission of $25 per car. During this period the defendant knew, and admitted on the stand that he knew, that the Union Investment Company had a mortgage on the bankrupt's tool company business; that this mortgage had been foreclosed on November 1, 1945; that a former co-employee had purchased the business at foreclosure sale and thereafter conducted the same type of business at the same location with the same machinery and equipment; that the bankrupt had 7 people to support; and that the bankrupt had no employment or source of income other than his $25 per car salesman job with defendant, plus his pending $3300 income tax refund claim.
5. Between September, 1945, and February, 1946, inclusive, the bankrupt borrowed $2200 from the defendant for living expenses. These loans commenced some 2 months prior to the foreclosure of the mortgage mentioned above. This $2200 was borrowed at various times, and in various amounts, averaging about $400 per month, and the transactions were verbal. In making the loans, the defendant knew, and admitted on the stand that he knew, that the bankrupt needed the money for living expenses. As to these loans, the defendant was a general, unsecured creditor of the Bankrupt.
6. In February, 1946, the bankrupt received an income tax refund in the amount of approximately $3300, out of the proceeds of which he repaid the sum of $2200 in cash to the defendant on February 22, 1946, which was within 4 months of the filing of the bankruptcy petition on April 12, 1946. This repayment of $2200 is the allegedly preferential transfer here attacked.
7. The bankrupt was insolvent at the time of the repayment of $2200 to defendant on February 22, 1946, at which time his past due debts exceeded his assets by at least $12,000, and the repayment constituted a transfer of money to the defendant, a general unsecured creditor of the bankrupt, within 4 months of filing petition in bankruptcy, which transfer enabled the defendant to obtain repayment of his debt in full and to obtain a greater percentage of his debt than other creditors of the same class.
8. The bankrupt and the defendant both testified as witnesses, and each denied that the defendant knew of the bankrupt's other debts or insolvency, or that the defendant had made any inquiry as to the bankrupt's other debts or insolvency, or that they had had any discussion relative to the bankrupt's other debts, assets or insolvency, prior to the time the Bankrupt filed his petition in bankruptcy on April 12, 1946. The plaintiff contended, and the defendant disputed, that on February 22, 1946, the defendant had reasonable cause to believe the bankrupt to be insolvent.
9. This testimony that the bankrupt and the defendant did not discuss the bankrupt's debts or insolvency following the foreclosure of the mortgage on the Premier Tool Company business seems incredible in the light of their association, interest and dealings. However, from the business and financial association and dealings between these two men, and the defendant's admitted knowledge of the bankrupt's financial circumstances at the time of the repayment in full of the $2200 debt, as heretofore outlined, the defendant had at least reasonable cause to believe that the bankrupt was insolvent on February 22, 1945. This was not a mere suspicion or apprehension of insolvency or cause to suspect insolvency, but reasonable cause based on knowledge of facts which should have led a person of ordinary or reasonable prudence to the belief that the debtor was insolvent, and which should have put a person of ordinary or reasonable prudence upon inquiry as to the bankrupt's insolvency.
10. The repayment to the defendant of $2200 on February 22, 1946, was made by the bankrupt, while insolvent, with intent to *979 prefer the defendant over all his other general unsecured creditors.
11. There was no showing of any demand upon defendant for return of the $2200 prior to the institution of this action on October 7, 1946.
12. Defendant did not reach 21 years of age until August, 1946, and he interposed infancy as a special defense to this action.
Conclusions of Law.
1. This court has jurisdiction and venue in this plenary proceeding to avoid a preferential transfer, brought by a trustee in bankruptcy against a defendant who resided in this Division of this District at the time of institution of this plenary proceeding. 11 U.S.C.A. §§ 1 (10), 46, 96, sub. b; 28 U.S.C.A. § 112.
2. Infancy of the defendant is no defense to an action by a bankrupt's trustee to set aside an unlawful preference under the Bankruptcy Act. Cunningham v. Brown, 1924, 265 U.S. 1, 44 S. Ct. 424, 68 L. Ed. 873.
3. A payment of money to a creditor, made by a debtor while insolvent and within 4 months before the filing by him of a petition in bankruptcy, which enables such creditor to obtain a greater percentage of his debt than some other creditor of the same class, is a preferential transfer within the meaning of the Bankruptcy Act. 11 U.S.C.A. 96, sub. a.
4. Any preferential transfer made within 4 months of filing of bankruptcy petition may be avoided by the bankrupt's trustee if, at the time when the transfer is made, the creditor receiving the preference either knows or has reasonable cause to believe that the debtor is insolvent. 11 U.S.C.A. 96, sub. b.
5. Where, as here, an insolvent debtor makes a preferential transfer to a creditor within 4 months of filing petition in bankruptcy, which enables such creditor to obtain a greater percentage of his debt than some other creditor of the same class, and, at the time of the transfer, the creditor has knowledge of facts which should have led a person of ordinary or reasonable prudence to the belief that the debtor was insolvent, beyond a mere suspicion or apprehension of insolvency or cause to suspect insolvency, and the creditor makes no inquiry as to the solvency or insolvency of the debtor, the creditor is charged with knowledge of the insolvency which an inquiry should have elicited and the creditor has reasonable cause to believe that the debtor is insolvent. Grant v. First Nat. Bank, 1878, 97 U.S. 80, 24 L. Ed. 971; Prudential Ins. Co. of America v. Nelson, 6 Cir., 1938, 96 F.2d 487; Canright v. General Finance Corp., 7 Cir., 1941, 123 F.2d 98; In re Cox, 7 Cir., 1943, 132 F.2d 881.
6. In an action to set aside a preferential transfer of money, interest runs from the date of remand upon the defendant, and where, as here, no demand is made prior to institution of suit to avoid the transfer, the commencement of the action is itself a demand, and interest runs from the date of such commencement of action. Kaufman v. Tredway, 1904, 195 U.S. 271, 25 S. Ct. 33, 49 L. Ed. 190, 192; White Co. v. Wells, 6 Cir., 1930, 42 F.2d 460.
7. The legal rate of interest in Michigan upon an unwritten obligation is 5% per annum. M.S.A. § 19.11, Comp.Laws 1929, § 9239.
8. It therefore follows that the transfer to the defendant of $2200 by the bankrupt on February 22, 1946, when the bankrupt was insolvent and the defendant had reasonable cause to believe that the bankrupt was insolvent, is a voidable preferential transfer, which should be avoided. Consequently, a judgment is being entered simultaneously herewith in favor of plaintiff trustee and against defendant creditor for the sum of $2200, with interest thereon at 5% per annum from October 7, 1946, the date of commencement of this action.
Judgment.
In accordance with the foregoing findings of fact and conclusions of law, it is hereby ordered and adjudged that the transfer of the sum of $2200 by Raymond Christian Fraley to the defendant, William F. Repper, on February 22, 1946, be, and the same is hereby avoided and set aside.
*980 It is further ordered and adjudged that the plaintiff, Herbert V. Rollins, trustee of the estate of Raymond Christian Fraley, bankrupt, recover from the defendant, William F. Repper, the sum of $2200, together with interest thereon at 5% per annum from October 7, 1946, and his taxable costs of this action. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265794/ | 200 N.J. Super. 185 (1985)
491 A.2d 14
WILLIAM M. JOHNSON, II, BLANCHE JOHNSON TRIX, NATALIE ALLISON, THOMAS E. GARDNER AND LUCY GARDNER SHEPARD, PLAINTIFFS-APPELLANTS,
v.
THE CITY OF HACKENSACK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT.
Superior Court of New Jersey, Appellate Division.
Argued March 11, 1985.
Decided April 9, 1985.
*187 Before Judges KING, DEIGHAN and BILDER.
Mark R. Decker argued the cause for appellants (Ravin, Sarasohn, Cook, Baumgarten & Fisch, attorneys; David N. Ravin, on the brief).
Sheri K. Siegelbaum argued the cause for respondent (Moses & Toskos, attorneys; Sheri K. Siegelbaum, on the brief).
*188 The opinion of the court was delivered by BILDER, J.A.D.
In 1930 members of the Johnson family gave property, now known as Johnson Park, to defendant City of Hackensack. The indenture of trust which conveyed the property restricted the use of the land to park purposes and contained a reverter clause in the event it ceased to be used for that purpose. Plaintiffs, the legal representatives of George W. Johnson and William Kempton Johnson, appeal from a summary judgment dismissing an action in which they claimed the deed condition had been violated and that title in the land had therefore reverted to them.
As applicable to this case, the indenture provided:
To have and to hold ... upon this express condition that the lands and premises shall and will be used by the [City of Hackensack] its successors and assigns forever only for park purposes and for no other purposes [sic] or purposes whatever (excepting that so much thereof as may be required for the extension on River Street northerly may be used for that purpose) including the right to erect and maintain only such buildings thereon as may be essential for the maintenance of such park. And in the event [the City of Hackensack] shall at any time cease to use said premises for park purposes the title thereto shall revert to and become vested in the said George W. Johnson and William Kempton Johnson or their legal representatives and all interest of the said City of Hackensack therein shall cease and determine.
Johnson Park is the third largest park in Hackensack. Its 20 to 21 acres contain tennis courts, basketball courts, baseball diamonds, an ice skating rink, a soccer field, swings, slides and other children's playground equipment, park benches and picnic tables. It also contains a pistol range, a greenhouse and nursery, and a maintenance garage.
Plaintiffs contended that the latter uses, together with the use of the northeast corner of the park as a dump site and the use of the park itself as a thoroughfare for dumping on adjacent property belonging to Fairleigh Dickinson University, were non-park uses and automatically caused the property to revert and vest in plaintiffs. It was undisputed that material has been deposited in the northeast corner of Johnson Park for many years. The Park lies along the Hackensack River and material has been dumped and graded in an area described as *189 swampy ground which may be part of Johnson Park or may be adjacent property belonging to Fairleigh Dickinson University or both. Whether the material is clean fill or contains inappropriate material is disputed, but it is undisputed the area is compacted and has ultimately been seeded. We were advised at oral argument that the present soccer field is on filled land.
On appeal plaintiffs reassert the arguments they made below contending the pistol range, maintenance garage, greenhouse and nursery, and dump site are non-park uses as a matter of law, thus triggering the reverter clause. Alternatively, they contend the uses are disputed material facts which bar the entry of a summary judgment. See Judson v. Peoples Bank and Trust Co. of Westfield, 17 N.J. 67, 74 (1954).
In his letter opinion of March 14, 1984, Judge Lucchi found that "the four facilities or operations complained of are substantially related to park purpose, and are for the enhancement of the park, and the benefit of the public." From an examination of the depositions, we are satisfied his findings find ample support in the record. See Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 484 (1974). The visit which the trial court made to Johnson Park was consented to by counsel at the motion heard on December 2, 1983. On notice to counsel the members of this court also visited the park on the date of argument. This visit was undertaken as an aid to understanding the record, not to expand the record. See Galdieri v. Board of Adjustment of Tp. of Morris, 165 N.J. Super. 505, 513, n. 3 (App.Div. 1979).
Additionally, we note that even if there were controverted facts with respect to the uses which plaintiffs contend violate the restrictions set forth in the original grant, the summary judgment would have been proper because the reverter clause does not operate in the presence of the other substantial park uses. Disputes as to immaterial or irrelevant facts will not bar such relief. See Judson v. Peoples Bank and Trust Co. of Westfield, supra, 17 N.J. at 75.
*190 As Judge Lucchi noted in his written opinion, language which may defeat an estate must be strictly construed and always against rather than in favor of a forfeiture. See Hagaman v. Bd. of Ed. of Tp. of Woodbridge, 117 N.J. Super. 446, 453 (App.Div. 1971). When the land was conveyed, the grantors created an estate in fee simple determinable an estate which terminates automatically upon the happening of a stated event. 2 Powell, Real Property, § 187 at 44-45 (1983). Plaintiffs contend that the use of any part of the park for non-park purposes terminates the preceding estate. We disagree.
Whether a terminating event has occurred involves a determination of two separate questions. Simes, Future Interests, § 293 at 352 (2d Ed. 1956). First, the language must be construed to identify the event and, second, a factual determination must be made as to whether the event has occurred. Id. A condition in a deed which is relied upon to defeat an estate is strictly construed and, when possible, against forfeiture. Hagaman v. Bd. of Ed. of Tp. of Woodbridge, supra at 453. The violation of a condition which involves forfeiture must be clearly established. Carpender v. New Brunswick, 135 N.J. Eq. 397, 398 (Ch. 1944). "When the event upon which the estate of the transferee is to terminate consists of a failure to use the premises in a particular way, it is clear that the courts are reluctant to find a termination." Simes, Future Interests, supra at 352.
Johnson Park is a 21-acre area filled with recreational facilities. Plaintiffs have, at best, seized upon four minor uses and attempted to elevate them to the substance of the land use. Where a forfeiture results from the failure to use property for the purpose specified in the deed, a minor deviation from that use will not effect the forfeiture as long as the specified use is substantially carried out. See Marthens v. B. & O. Railroad Co., 289 S.E.2d 706, 713 (W. Va.Sup.Ct.App. 1982). We are fully satisfied that defendant has not "cease[d] to use said premises *191 for park purposes." If plaintiff's contentions as to the four minor uses were correct, and we agree with Judge Lucchi that the uses are park-related uses, the most that could be said is that these unpermitted uses could be restrained in an appropriate proceeding. See Annotation, "Nature of estate conveyed by deed for park or playground purposes," 15 A.L.R.2d 975, 977 (1951).
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265796/ | 69 F. Supp. 59 (1946)
ELBERT et ux.
v.
JOHNSON, Collector of Internal Revenue.
District Court, S. D. New York.
October 15, 1946.
Gustave Simons, of New York City (Louis E. Brockman, of Brooklyn, N. Y., of counsel), for plaintiff.
John F. X. McGohey, U. S. Atty., and David McKibbin, Asst. U. S. Atty., both of New York City, for defendant.
MANDELBAUM, District Judge.
Plaintiffs (husband and wife) seek recovery of $18,600 income tax allegedly overpaid for the fiscal year ended October 31, 1938, by reason of denial by the Commissioner of a credit for a barred gift tax paid in 1936.
The defendant, who is the Collector of Internal Revenue, in moving to dismiss the complaint contends (1) that the court lacks jurisdiction over the subject matter of the action and (2) assuming arguendo, that the court has jurisdiction, plaintiffs' claim is barred by the statute of limitations.
The complaint essentially alleges the following:
In 1935 plaintiff (wife) sought to make a gift of $300,000 and paid the said amount into a trust. On March 16, 1936, she paid a federal gift tax of $18,600 on said gift. The United States Board of Tax Appeals (now the Tax Court of the United States) decided in Marian Bourne Elbert v. Commissioner 45 B.T.A. 685, that no gift for tax purposes had been made. This decision was made after the time for filing a claim for refund of the said gift tax had expired.
*60 Thereafter, plaintiffs sought to have said overpayment of the gift tax allowed in reduction of a deficiency in income taxes arising out of the same transaction in their joint income tax return for the fiscal year ending October 31, 1938.
This deduction was disallowed by the Commissioner who sent a notice of deficiency for the said fiscal year. Plaintiffs made no objection to the disallowance. But on April 11, 1942, plaintiffs filed a petition in the Tax Court of the United States for redetermination of their tax liability for the fiscal year ending October 31, 1938.
The grounds urged by the plaintiffs in support of their claim for a reduction of a deficiency in income taxes were (1) that there should have been a deduction for office expenses and (2) that the federal gift tax of $18,600 was erroneously paid and should have been allowed by way of recoupment in reduction of the asserted deficiency.
The Tax Court on November 10, 1943 (Elbert et al. v. Commissioner, 2 T.C. 892), adjudged a deficiency against plaintiffs based upon a stipulation settling the issue involving the deduction for office expenses. On the second issue of recoupment of the erroneously paid gift tax, the court held that it had no jurisdiction to allow the claimed reduction, but even if it could consider the issue of recoupment, it would deny the credit on the ground that recoupment of a barred tax liability is precluded by Sections 608 and 609(b) of the Revenue Act of 1928, 26 U.S.C.A.Int.Rev.Acts, pages 459, 460.
An appeal was taken from the decision of the Tax Court to the Circuit Court of Appeals on February 8, 1944, but the appeal was never perfected and was thereafter dismissed on November 28, 1944, the decision of the Tax Court thereby becoming final.
A deficiency in the amount of $40,068.81, without allowing the claimed credit of $18,600 for gift tax, as adjudged by the Tax Court was paid by plaintiffs on March 17, 1944.
Thereafter, on January 2, 1945, a claim for refund of $18,600 income tax for the fiscal year ending October 31, 1938, was filed by the plaintiffs with the Commissioner, based as before upon the doctrine of recoupment of the barred gift tax. More than six months having elapsed since the filing of said claim without denial or payment by the Commissioner, this suit ensued.
The government's claim that this court lacks jurisdiction over the subject matter of this suit is dependent upon the legal effect of plaintiffs' petition for redetermination filed with the Tax Court on April 11, 1942.
Where the Commissioner of Internal Revenue determines that there is an income tax deficiency, the taxpayer, upon receipt of a notice of deficiency, may elect to take one of two steps. He may (1) file a petition for redetermination with the Tax Court; or (2) he may pay the tax and sue for a refund in the district court.
At bar, the plaintiffs upon receiving the notice of deficiency, mailed to them by the Commissioner on January 13, 1942, in respect of their income tax for the fiscal year ending October 31, 1938, took the first alternative by filing on April 11, 1942 a petition for redetermination with the Tax Court.
Sec. 322(c) of the Revenue Acts of 1936 and 1938 sec. 322(c), I.R.C., 26 U.S.C.A. Int.Rev.Code, § 322(c), is quite clear as to what happens if a petition for redetermination is filed with the Tax Court. It reads in part:
"If the Commissioner has mailed to the taxpayer a notice of deficiency under section 272(a) and if the taxpayer files a petition with the Board of Tax Appeals within the time prescribed in such subsection, no credit or refund in respect of the tax for the taxable year in respect of which the Commissioner has determined the deficiency shall be allowed or made and no suit by the taxpayer for the recovery of any part of such tax shall be instituted in any court * * *." (emphasis by the court)
The cases support the government's position that resort to the Tax Court precludes the alternative right to sue in the district court. Brooks v. Driscoll, 3 Cir., 114 F.2d *61 426, 429; Monjar v. Higgins, 2 Cir., 132 F.2d 990; Brampton Woolen Co. v. Field, 1 Cir., 56 F.2d 23 certiorari denied 287 U.S. 608, 53 S. Ct. 12, 77 L. Ed. 529.
It would therefore appear from the foregoing that the government's claim of lack of jurisdiction is well taken and this suit should fail, were it not for an additional element in the case which requires some discussion. And that is that the Tax Court, having declined to pass upon the claimed reduction of the gift tax because of lack of jurisdiction, plaintiffs are entitled to litigate that issue in a court having jurisdiction. At first blush this argument is persuasive but an examination of the authorities cited, impels the court to reject this contention. Had plaintiffs failed to file a proper petition in the Tax Court as was the case in Cutting v. United States, D.C., 26 F. Supp. 586, their argument could, perhaps, hold water. But the issue of recoupment of the gift tax was not the only issue raised by the petition and answer. There was an additional issue raised by the pleadings, i.e. the question of deduction of office expenses for the taxable year ending October 31, 1938, and the jurisdiction of the Tax Court was not affected even though the issue of the deduction for office expenses was settled by stipulation. Bankers' Reserve Life Co. v. United States, 44 F.2d 1000, 71 Ct. Cl. 279, certiorari denied 238 U.S. 836, 51 S. Ct. 485, 75 L. Ed. 1448.
It is the timely filing of a proper petition in the Tax Court, rather than the decision of that Court which operates to deprive the district court of jurisdiction to entertain a subsequent suit for refund. Moir v. United States, 1 Cir., 149 F.2d 455; Merrill v. United States 2 Cir., 152 F.2d 74.
So we find that plaintiffs elected to litigate the 1938 deficiency income tax determination in the Tax Court, whose decision became final by plaintiffs' failure to perfect their appeal and they are bound by their election. This court lacks jurisdiction to redetermine tax liability for the period as to which a deficiency has already been adjudged by the Tax Court, assessed by the Commissioner and paid by the plaintiffs.
In view of this determination, the government's second point regarding the statute of limitation requires no disposition.
The complaint is dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368731/ | 246 Ga. 732 (1980)
273 S.E.2d 22
HUMPHREY et al.
v.
LANGFORD.
36705.
Supreme Court of Georgia.
Argued October 14, 1980.
Decided December 16, 1980.
Rehearing Denied January 6, 1981.
James K. Lange, William R. Waldrop, for appellants.
Gerald M. Edenfield, Susan E. Warren, for appellee.
BOWLES, Justice.
The Humphreys are the former owners of a South Carolina heating and air conditioning business. Langford purchased the business at a time when all parties were residents of South Carolina. The contract of sale was executed in South Carolina. Subsequently the Humphreys moved to Bryan County, Georgia, and instituted this lawsuit in Chatham County, Georgia concerning the sales agreement. Langford, still a resident of South Carolina, was in Chatham County one day to bowl. While there, he was served with the complaint and summons in this case.
Langford filed a motion to dismiss the action alleging lack of personal jurisdiction and improper venue. Code Ann. § 15-202 provides, "The jurisdiction of this State and its laws extend to all persons while within its limits, whether as citizens, denizens, or temporary sojourners." The trial court relying on Shaffer v. Heitner, 433 U. S. 186 (97 SC 2569, 53 LE2d 683) (1977) found that "insofar as Ga. Code Ann. Sec. 15-202 (1971) allows jurisdiction to be based solely on temporary presence, it is inconsistent with the due process clause of the Fourteenth Amendment and unconstitutional." This case squarely presents the issue of whether or not personal jurisdiction based solely upon service of process within the forum, an unquestioned basis of jurisdiction for many years, is still valid.
Shaffer v. Heitner, supra, involved a shareholder's derivative suit brought in Delaware, the state of incorporation of the Greyhound Corp., the business sued. Also named as defendants were Greyhound Lines, Inc., a wholly owned subsidiary, and 28 present or former officers or directors of one or both corporations. Since the individual defendants were non-residents of Delaware, the plaintiff, Heitner, filed a motion for and obtained an order of sequestration of certain Delaware property of the individual defendants (their corporate stock) to assure their appearance in the suit. In evaluating the constitutionality of Delaware's assertion of jurisdiction over the defendants' property and thereby over the non-resident defendants themselves, the Supreme Court held that "all assertions of *733 state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny." 443 U. S. at 212. The Court, finding no "minimum contacts" between the individual defendants and Delaware, found Delaware's assertion of jurisdiction over them unconstitutional.
Langford, in the case at bar, would have us hold that because mere presence[1] of property within a forum is not sufficient to confer jurisdiction on its courts, then by analogy, mere presence of the person is not sufficient either. This we decline to do.
"Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v. Neff, 95 U. S. 714, 733. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.' Milliken v. Meyer, 311 U. S. 457, 463. (Other citations omitted.)" International Shoe Co. v. Washington, 326 U. S. 310, 316 (1945). (Emphasis supplied.)
As this quoted language indicates, International Shoe does not cast doubt on the notion that presence is still a sufficient basis for jurisdiction, it simply states a rule of "minimum contacts" as an alternative to "presence." International Shoe illustrates the problems with dealing with the "fiction" of the corporate personality. Corporate presence can only be manifested by corporate activity and therefore a minimum contacts analysis seems appropriate. However, when an individual is personally served within the state, we are talking about actual presence. Minimum contacts analysis is not necessary. It could be forcefully argued, however, that personal presence in a state fulfills the minimum contacts requirement.
Shaffer, adopting the minimum contacts test of International Shoe, also dealt with jurisdiction over defendants not personally served within the forum state. In analyzing the practical effect of in rem jurisdiction, Shaffer recognized that "the phrase `judicial jurisdiction over a thing,' is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing." 433 U. S. at 207. *734 Applying this same concept to quasi in rem jurisdiction, when "the only role played by the property is to provide the basis for bringing the defendant into court, ... if a direct assertion of personal jurisdiction over the defendant would violate the Constitution, it would seem that an indirect assertion of that jurisdiction should be equally impermissible." 433 U. S. at 209. In Shaffer, the presence of the property in the forum state was not sufficient to confer personal jurisdiction over the defendants. The defendants had no minimum contacts with the forum state (even the property in this case did not constitute a minimum contact). Shaffer does not tell us what the result would have been had any defendants been personally served with process while in Delaware. Under our view of International Shoe, minimum contacts analysis would not have been necessary.
Three cases decided since Shaffer, Kulko v. California Superior Court, 436 U. S. 84 (98 SC 1690, 56 LE2d 132) (1978), World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286 (100 SC 559) (1980) and Rush v. Savchuk, 444 U. S. 320 (100 SC 571) (1980) all contain broad, general language about minimum contacts lifted from Shaffer and International Shoe but nevertheless all three cases involved defendants who were not personally served within the forum state. To our knowledge, the United States Supreme Court has yet to reach the issue.
We are aware the various commentators have suggested that Shaffer represented the end of jurisdiction merely by personal service on a transient within the forum. We, however, believe that there are compelling reasons to uphold such jurisdiction rather than strike it down based upon cases which do not mandate such a result. We believe that it is not practical to have classifications of sojourners in the state. Where does a court draw the line between sojourners here for an evening of bowling and sojourners who commute to the state on a daily basis? Some individuals are constant or perennial sojourners. Some have no identifiable place of residence. Still others are able to avoid personal service by remaining away from an otherwise identifiable place of abode. Others to avoid a responsibility can terminate on a moment's notice a legal residence and otherwise disrupt the judicial process. Others can terminate residence in a forum favorable to the plaintiff and establish residence in a forum considered favorable to the defendant. One of two joint obligors may never be reached with process where they are residents of different states, and there is no basis for federal court jurisdiction, if it were not for a sojourner jurisdiction rule. If they cannot be sued where they are found, they may not be sued at all. Due process is not solely for the protection of the judicial defendant. Plaintiffs have rights that must also be protected. A balancing of rights appears constitutionally fair. *735 When a sojourner is sued in this state, the plaintiff does not select the venue. The venue is where the defendant is of his own volition and is served. See McPherson v. McPherson, 238 Ga. 271, 272 (232 SE2d 552) (1977) and Campbell v. Campbell, 67 Ga. 423 (1881). This sovereign state has an adequate court system and is capable of rendering justice between litigants as well as any court system. A party who is obligated on a transitory cause of action and who is a sojourner to this state, is required to abide by the laws of this state and could expect to be protected by those laws as well. To accept the state's benefits and to avoid its responsibilities creates an imbalance which we cannot recognize. For these reasons we do not believe Langford's due process rights are being violated by requiring him to defend this lawsuit in this state.
Judgment reversed. All the Justices concur.
NOTES
[1] We use the term "mere presence" to distinguish this Shaffer-type of property from property which could be the "minimum contact" a defendant has with a state. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368733/ | 155 Ga. App. 836 (1980)
273 S.E.2d 221
MORGAN
v.
HAWKINS et al.
60228.
Court of Appeals of Georgia.
Submitted July 7, 1980.
Decided September 24, 1980.
Jerry L. Minge, for appellant.
Richard J. MacLeod, for appellees.
BIRDSONG, Judge.
Appellant Morgan, a real estate broker and developer, sold a house to Mr. and Mrs. Hawkins, for which the Hawkins executed a promissory note in the amount of $13,500. The purchase price of the house was $54,900, but the Hawkins traded or exchanged other *837 equities for all but the amount of the note. The Hawkins paid nothing on the note and when foreclosure was threatened, filed a complaint against Morgan alleging fraud in the inducement of the note. Morgan answered, and filed a counterclaim setting up the execution of the note and the default thereunder and demanding judgment therefor. Morgan was denied a summary judgment to which he claimed he was entitled inasmuch as the Hawkins admitted in pleading the execution of the note. The jury returned a verdict for the plaintiff in the amount of $7,000 special and general damages and $1,500 punitive damages. Morgan's appeal attributes eight errors to the proceedings below. Held:
1. Appellant Morgan ascribes error to the trial court's denial of his motions for summary judgment, directed verdict and judgment nov on his counterclaim, and the denial of his motions for directed verdict and judgment nov on the Hawkins' claim. He urges this court to accept as law the principle that where there is no issue of fact as to execution and default of an obligation, the payee is entitled to a judgment on the obligation regardless of any defenses, claims, or counterclaims interposed by the maker against the obligation. This proposed principle is apodictically without merit. Failure of consideration and fraud in the inducement of the contract are good defenses to the enforceability of the obligation (Code Ann. §§ 20-305, 20-310, 20-502; 37-709). House v. Martin, 125 Ga. 642, 644-645 (54 SE 735); Thompson v. First Nat. Bank, 142 Ga. App. 174, 176 (235 SE2d 582). Morgan was not entitled to judgment based merely on the fact that the execution and default of the note were admitted, nor did the pleadings and the evidence at trial entitle him to a verdict. The jury was authorized to conclude from the evidence that artful, false and fraudulent representations and concealment of material facts concerning serious leakage problems in the house, were practiced upon the Hawkins, by and through which they were induced to purchase the house and execute a promissory note therefor and moreover that because of the serious leakage problems, unknown to the Hawkins, there was a failure of consideration for the obligation. House v. Martin, supra, pp. 644-645.
The testimony of the parties was in conflict, but its resolution was for the jury and we will not disturb the verdict unless it is insupportable as a matter of law. Glover v. State, 237 Ga. 859, 860 (230 SE2d 293); Harris v. State, 236 Ga. 242 (223 SE2d 643); Lewis v. State, 149 Ga. App. 181 (254 SE2d 142); and see Lanier Petroleum v. Hyde, 144 Ga. App. 441, 442 (241 SE2d 62); Crosby Aeromarine v. Hyde, 115 Ga. App. 836, 838 (156 SE2d 106). The Hawkins testified that neither Morgan nor the sales agent, Ms. Clarke, told them about the severe leakage problems in the house. Months before, while *838 driving in an unfamilar part of town, they had been amused by a sign put up in front of a house by its owner "telling the world" that the house leaked "running water" and that a lawsuit was pending. Later, when the Hawkins inquired concerning a home purchase from Morgan, with whom they had dealt before, Morgan's agent showed the Hawkins this house. As the previous owner had moved, there was no sign, and the Hawkins had completely forgotten having seen such a sign. In fact, they did not connect the sign with this house until after they had bought it and Morgan mentioned the sign in the course of their own problems with leakage. While looking over the house with an eye to purchase, Mrs. Hawkins questioned Ms. Clarke about the off-color basement tile, but was told that the lighting was distorting the color. The Hawkins saw putty or glue and a knife and were told that some tile had been replaced, and that the walls had been freshly painted to get the house ready to show. Other evidence showed that Morgan had in fact been sued by the previous owner because of the leakage. Morgan had had some landscaping done and removed a large rock which he thought would solve the problem, but the evidence indicated that the problem had obviously not been solved and Morgan apparently made no other efforts to cure it before selling the house to the Hawkins. On some occasions when it rained in a particular way, water would seep in a mysterious fashion into the walls and onto the first floor and stand in puddles. It would soak the walls of a closet until they turned to mush; everything in the closet was ruined. The house kept a terrible odor. Several inches of water would collect in the basement floor and on at least two occasions, Mrs. Hawkins had to use a water pump to remove it. Furniture and carpets were ruined. The Hawkins called Mr. Morgan when they first discovered that they "had bought a swimming pool" but, although he visited the house and commiserated, he did nothing to correct the problem and continued to dun the Hawkins for the monthly payments. Under this version of the evidence, which we must assume in deference to the verdict (Georgia-Carolina Brick &c. Co. v. Brown, 153 Ga. App. 747 (266 SE2d 531)), the evidence is sufficient to support a verdict for fraud in the inducement of the contract and failure of consideration.
In addition to a full and fair charge on actual and constructive fraud (see Code Title 37-7 generally), the jury was properly charged that while a party must exercise reasonable diligence to protect himself against the fraud of another, he is not bound to exhaust all means at his command to ascertain the truth before relying upon the other's representations; and was further charged as to fraud by concealment of intrinsic qualities. The jury found the requisite elements of fraud in the evidence and where there is evidence to *839 support the verdict, it is not for us to say otherwise. Clark v. Aenchbacher, 143 Ga. App. 282 (238 SE2d 442); Georgia Intl. Life Ins. Co. v. King, 120 Ga. App. 682, 685 (172 SE2d 167).
2. Appellant urges that there were no aggravating circumstances in the case to support an award for punitive damages. It was a jury question whether the evidence in this case evinced in the seller such "wilful misconduct, malice, fraud, wantonness, or oppression, or that entire want of care" which would indicate a conscious indifference to the consequences, such that the imposition of punitive damages was justified. Code Ann. § 105-2002; Deavers v. Standridge, 144 Ga. App. 673, 676 (242 SE2d 331). Moreover, the evidence here shows that Morgan could not but be well aware that the leakage problem in this house was serious enough to drive the previous owner from the house and result in litigation between himself and the owner. Regardless whether Morgan had attempted to cure the problem before selling the house to the Hawkins, the jury could, and obviously did, conclude that Morgan should have advised the Hawkins of these facts and that his failure to do so was wilful misconduct and concealment, or amounted to fraud or such conscious indifference to the consequences of the same, as to support an award for punitive damages.
3. In his seventh enumeration of error, appellant Morgan contends it was error to deny appellant's motion for mistrial based on a "highly inflammatory and prejudicial" question posed to the appellant by appellees' counsel. The question was, "Mr. Morgan, how many times have you appeared before the Georgia Real Estate Commission?" Immediate objection was made and appellant never answered the question. Before overruling the motion for mistrial, the trial judge admonished the jury to "remove any thought whatsoever of this question," and instructed, "you will not consider this [question] in your deliberations." We see no cause to reverse this case on the basis of this alleged taint. The trial court has wide discretion in granting or refusing to grant a mistrial in such cases, and unless that discretion is manifestly abused, this court will not interfere with the ruling. Bullock v. Bullock, 244 Ga. 538 (261 SE2d 331); Gravitt v. Posey, 151 Ga. App. 796 (261 SE2d 740). Moreover, while we cannot say the other evidence in this case demands the verdict (Thigpen v. Batts, 199 Ga. 161 (33 SE2d 424)), it is clear that the other evidence does support the verdict, and it therefore cannot be said that the effect of the question itself was manifestly prejudicial to the appellant so as to require a reversal or that the denial of a mistrial on the basis of this improper question resulted in an unfair trial (Gravitt, supra).
4. Finally, appellant urges that the trial court erred in excluding *840 certain proffered testimony elicited from Mr. Hawkins. The testimony was to the effect that before he was represented by counsel and before he filed suit against Mr. Morgan, Hawkins in response to a letter from Morgan's attorney concerning the default went to Morgan's attorney's office and suggested that if Morgan would let him stay on the property for thirty additional days, he (Hawkins) would then move and deed the property back to Morgan. There was additional testimony that Mr. Hawkins had asked or thought he asked for some of his equity back. Appellant urges that this testimony constitutes an admission of liability by Mr. Hawkins and was not a proposition made with a view to compromise so as to be inadmissible under Code Ann. § 38-408 (see, e.g., Flannagan v. Clark, 207 Ga. 345 (61 SE2d 485)). The discussion and arguments of counsel and the ruling of the trial court were apparently made off the record, for nothing appears in the record to indicate a ruling or that exception or objection was made thereto. Nevertheless, we disagree with the analysis offered by the appellant. Giving the appellant every benefit of his argument, this evidence does not constitute an admission of liability which would negate the fraud of Mr. Morgan or the absence of consideration, and was not an admission that Mr. Hawkins' claims were not good. It was at best a proposition, made to the appellant's attorney, with a view to compromise the apparently imminent litigation which Mr. Morgan had implied with his threatened foreclosure and retention of counsel. As such, the testimony was properly excluded.
Judgment affirmed. Deen, C. J., and Sognier, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265834/ | 69 F.Supp. 826 (1946)
TUNSTALL
v.
BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENGINEMEN, NORFOLK, VA., et al.
Civil Action No. 210.
District Court, E. D. Virginia, Norfolk Division.
October 9, 1946.
Oliver W. Hill and Spottswood W. Robinson, III, both of Richmond, Va., and Charles H. Houston and Joseph C. Waddy, both of Washington, D. C., for plaintiff.
William G. Maupin, of Norfolk, Va., Harold C. Heiss and Russell B. Day, both of Cleveland, Ohio, and Ralph M. Hoyt, of Milwaukee, Wis., for Brotherhood of Locomotive Firemen and Enginemen, Ocean Lodge, No. 76, Norfolk, Va., Port Norfolk Lodge, No. 775, Portsmouth, Va., and W. M. Munden, defendants.
James G. Martin of Norfolk, Va., for Norfolk Southern Ry. Co.
HUTCHESON, District Judge.
The facts involved in this case have been stated by the United States Circuit Court of Appeals, Fourth Circuit, in 140 F.2d 35, and in 148 F.2d 403. The case was before the Supreme Court and by it reported in 323 U.S. 210, 65 S.Ct. 235, 236, 89 L.Ed. 187, where the Court refers to it as "setting up, in all material respects, a cause of action like that alleged in the Steele case." The Steele case referred to was before the Supreme Court under the style of Steele v. Louisville & N. R. Co., et al, and reported at 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173. In the last mentioned opinion the Supreme Court recites the material allegations of the bill of complaint.
It is not deemed necessary to discuss in detail the allegations of the respective pleadings except in so far as they may be pertinent to the decision of the question now before this Court.
When the case first came before this Court it was dismissed on the ground that the Court did not have jurisdiction. That action of the District Court was affirmed by the Circuit Court of Appeals, Fourth Circuit, for the reasons set forth in its opinion appearing in 4 Cir., 140 F.2d 35.
The case was then considered by the Supreme Court along with the Steele case and for reasons set forth in its opinion, supra, it was held that jurisdiction is conferred upon the Federal Courts by Judicial Code, Section 24(8), 28 U.S.C.A. § 41(8). In the concluding paragraph of that opinion the Court stated:
"We hold, as in the Steele case, that the bill of complaint states a cause of action entitling plaintiff to relief. As other jurisdictional questions were raised in the courts below which have not been considered by the Court of Appeals, the case will be remanded *827 to that court for further proceedings."
In its opinion appearing in 148 F.2d 403, 407, the Circuit Court of Appeals considered the jurisdictional questions arising out of service of process, and in announcing its conclusion used the following language:
"For the reasons stated, we think that there was sufficient service of process to bring the defendants before the court and that the court had jurisdiction of the causes of action alleged."
Subsequent to the issuance of the mandate of the Circuit Court of Appeals the plaintiff filed a motion for summary judgment under Federal Rules of Civil Procedure, rule 56, 28 U.S.C.A. following section 723c. Similar motions for summary judgments were filed by the various defendants and the case is now before this Court upon those motions. After the motions for summary judgments had been filed, plaintiff filed a motion to strike from the evidence certain affidavits presented by the defendants upon the ground that they were irrelevant. While entertaining doubt as to the relevancy of the last mentioned affidavits, the Court has considered them in reaching the conclusion now to be stated. The test to be applied is whether the pleadings, depositions and admissions on file, together with the affidavits, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
The admitted facts presented by the pleadings, depositions, admissions and affidavits, show the following:
That plaintiff is a negro locomotive fireman, employed by the defendant Norfolk Southern Railway Company and its predecessor Norfolk Southern Railroad Company (both hereinafter called the Railway) on or prior to March 28, 1940, and from then to the present; that by constitutional provision and practice of the Brotherhood of Locomotive Firemen and Enginemen (hereinafter called the Brotherhood) plaintiff is ineligible for membership in the Brotherhood because he is a negro; that at all times from the beginning of the present case the defendant Ocean Lodge No. 76 and the Port Norfolk Lodge No. 775 are the only Brotherhood lodges within the territorial limits of the Norfolk Division of this Court, and that the membership of Ocean Lodge No. 76 has been and is now composed in major part from among the white firemen, engineers, hostlers and hostler helpers employed on the defendant Railway; that the defendant W. M. Munden is local chairman of Ocean Lodge No. 76 and has less seniority in the service of the Railway than has the plaintiff; on or about March 28, 1940, the Brotherhood initiated negotiations with the defendant Railway and other carriers, as a result of which there was executed a collective bargaining agreement dated February 18, 1941, referred to as Exhibit II, and a supplementary agreement dated May 23, 1941, referred to as Exhibit III. At the time and ever since the inception of the negotiations with the Railway resulting in the collective bargaining agreement here discussed, the Brotherhood has claimed to be the exclusive bargaining representative under the Railway Labor Act, of the entire craft or class of locomotive firemen employed on defendant Railway, and during the negotiations and execution of the collective bargaining contracts the Brotherhood has purported to act as such exclusive bargaining representative. During the entire time under consideration the Brotherhood has maintained that the employment rights of the plaintiff and the class represented by him are governed by the said collective bargaining contracts. The Brotherhood initiated the negotiations mentioned without having received from the Railway any requests to modify then existing collective bargaining contracts governing rate of pay, rules and working conditions of locomotive firemen employed by it in any manner similar to the proposed modifications. Prior to the initiation of the proceedings the Brotherhood did not notify the plaintiff or any other member of his class that it had the proposed changes under consideration nor did it at any time notify the plaintiff or any other members of his class that notice of the proposed changes had been served upon the Railway or that it was conducting such negotiations. The Railway and the other carriers protested *828 against the modifications proposed by the Brotherhood and the Brotherhood thereupon invoked the services of the National Mediation Board without giving notice of such action to the plaintiff or any other member of his class, nor were they given notice by the Brotherhood of any of the meetings or conferences preceding the negotiation of the contracts. After the execution of the contracts the Brotherhood did not notify the plaintiff or any member of his class that such agreements had been executed.
Without prolonging this discussion by a recital of the various provisions of the agreement and supplementary agreement, suffice it to say that for the purposes of this case those agreements divide the firemen into two classes, designated as promotable firemen and nonpromotable firemen. The former class refers to white firemen except such as are not qualified to become engineers, and the term nonpromotable firemen refers to negro firemen as a class irrespective of individual qualifications. The agreements provide, in part, that on each railroad the proportion of nonpromotable firemen shall not exceed 50%; until such percentage is reached only promotable men will be hired, and all new runs and all vacancies shall be filled by promotable men; that no nonpromotable men shall be employed on any seniority district on which nonpromotable men were then not employed; promotable firemen are those in line for promotion to the position of locomotive engineer, and on any road having in the opinion of the Brotherhood rules or conditions more stringently limiting the employment of nonpromotable firemen, such rules and conditions may at the option of the Brotherhood be retained.
The plaintiff on or about June 30, 1941, was assigned as locomotive fireman on a passenger run on the northern seniority district of the defendant Railway from Norfolk, Virginia, to Marsden, North Carolina, as a result of a vacancy there, coupled with his seniority. On or about October 10, 1941, at the request of defendant Munden, the defendant Railway took away the passenger run from plaintiff under the provisions of the agreement and supplementary agreement. When the plaintiff was so displaced, the defendant Munden was assigned to the passenger run. After having been displaced on the run, the plaintiff requested the Brotherhood to represent him as a member of the craft or class of locomotive firemen represented by the Brotherhood, for restoration of his job, but this request was refused by the Brotherhood.
The pleadings contain no allegations of inefficiency of the plaintiff nor of the class represented by him, nor is there any charge of misconduct on his part nor on the part of such class. Upon the contrary, the Railway has admitted that the work of the plaintiff had been satisfactory. Furthermore, it appears from copy of a letter of January 15, 1941, from the Chairman, Southeastern Carriers' Conference Committee to the President of the Brotherhood, filed as an exhibit, that the class represented by the plaintiff had rendered faithful and valuable services for many years, and it is there pointed out that the proposed modifications would violate established seniority rights.
In the foregoing outline of facts, the Court has confined itself to stating those considered pertinent which are admitted.
The contention of the defendants may be summarized by stating it to be that by reason of the rules or practices established by the railroads, including the defendant Railway, all colored firemen are ineligible to become engineers, as are some white firemen who lack necessary qualifications. As a result, under the seniority rules in existence, negro firemen occupy in a large measure the more desirable runs, and prospective engineers among the promotable firemen are precluded from acquiring experience on such runs which would be of value to them as engineers upon their promotion, and consequently the efficiency of the engineers would be promoted by the new arrangement. The Brotherhood defendant denies responsibility for creating this condition and disclaims any power to change it. It is insisted in behalf of the defendants, that in negotiating the contracts the Brotherhood was acting "without hostile discrimination, fairly, impartially and in good faith," and the defendants point to the *829 language of the Supreme Court in the Steele case [323 U.S. 203, 65 S.Ct. 232], where it is said:
"This does not mean that the statutory representative of a craft is barred from making contracts which may have unfavorable effects on some of the members of the craft represented. Variations in the terms of the contract based on differences relevant to the authorized purposes of the contract in conditions to which they are to be applied, such as differences in seniority, the type of work performed, the competence and skill with which it is performed, are within the scope of the bargaining representation of a craft, all of whose members are not identical in their interests or merit."
The Court recognizes that a motion for summary judgment should be scrutinized carefully in order that no litigant may be deprived of the opportunity to present proof in a proper case and it is with that principle in mind that the contentions of the respective parties are considered.
The Brotherhood is the statutory bargaining representative of the plaintiff. The plaintiff has no right to bargain individually in his own behalf. Consequently, he is left without any opportunity to protect his interest in pursuing his occupation except to rely upon the proper discharge of its duty by the Brotherhood to represent him fairly and without discrimination. The admitted facts reveal that the Brotherhood (the bargaining representative of the plaintiff), although charged with the duty of protecting the interest of the plaintiff, in disregard of that obligation, initiated of its own accord and without even informing the plaintiff of its intention, negotiations to change existing conditions of employment, under which existing conditions the plaintiff was entitled to valuable seniority rights, including the right of employment on the run from Norfolk to Marsden here involved. As the direct result of the insistence of the bargaining representative the agreements here involved were executed. The railroads concerned protested against discrimination of which complaint is made and as a result of the insistence of the bargaining representative the matter was referred to the National Mediation Board. During all this time the plaintiff was ignored so far as notice and information were concerned. The agreements, as finally executed, disclose that his rights were also ignored, or perhaps more properly stated, he was deprived of his rights. All this was at the instance and insistence of the bargaining representative, charged with the responsibility of representing him without discrimination. It is urged that the fact this block of firemen at the top of the seniority list (holding more desirable assignments) are nonpromotable is because it is contrary to the established practice of the defendant Railway to employ colored men as locomotive engineers. The Brotherhood contends it had no part in creating this practice and then proceeds to act upon the assumption that it has no power to change it. The Court can not conclude that the bargaining representative has properly discharged its duty to the plaintiff and his class by acting upon such an assumption. It is significant that nothing in the record indicates that the Brotherhood has suggested to the railroads an arrangement by which colored firemen may be promoted to the position of engineer. No party to the proceeding has contended that such firemen by reason of their race would not make acceptable locomotive engineers, and there is no proof in the record which would justify such a conclusion. It would appear that the situation is one described by the Supreme Court in the Steele case, appearing after the language in its opinion last quoted:
"Here the discriminations based on race alone are obviously irrelevant and invidious. Congress plainly did not undertake to authorize the bargaining representative to make such discriminations."
It is further urged that the agreement will improve the efficiency, economy and safety of train operation, but the record fails to reflect any prior existing lack of efficiency, economy or safety of train operation justifying such action on the part of the Brotherhood. It may not be inappropriate in this connection to again point to the fact that the agreements were executed at the insistence of the Brotherhood over the protest of the railroads and the railroads, *830 in the final analysis, are the parties answerable for lack of efficiency, economy and safety of train operation.
An examination of the record leaves no doubt that an underlying purpose of the Brotherhood was to affect an arrangement by which promotable men, all of whom are white and either members of or eligible to membership in the Brotherhood, might obtain advantages over nonpromotable firemen, which last designation, by the very terms of the supplementary agreement, "refers only to colored firemen," who are ineligible for such membership. The practical result could hardly be illustrated more forcefully than by the admitted facts of this case. A desirable job assignment has been taken from a competent employee because he is nonpromotable (colored), and given to an employee who, so far as the record discloses is also competent but junior in seniority, because he is promotable (white). What has been said concerning the position of the Brotherhood applies with equal force to the defendant Munden, the chairman of a local lodge of that organization, and the defendant who has personally received the benefits of the resulting conditions.
Relief should be granted against the defendant Railway also for the reasons stated in the Steele case, supra, where it is said:
"The representative which thus discriminates may be enjoined from so doing, and its members may be enjoined from taking the benefit of such discriminatory action. No more is the Railroad bound by or entitled to take the benefit of a contract which the bargaining representative is prohibited by the statute from making."
For the reasons stated, the Court is of opinion that the record clearly demonstrates that there is no genuine issue as to any material fact and considered in the light of the opinions in the cases of Steele v. Louisville & N. R. Co., supra, and Tunstall v. Brotherhood, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187, the motion of the plaintiff for summary judgment should be granted and the motions of the defendants for summary judgments should be denied.
An order will be entered granting a declaratory judgment in accordance with the first and second paragraphs of the prayer of the complaint; injunctions will be entered in accordance with the third and fourth paragraphs of said prayer; and the order will further direct that the plaintiff have restored to him his right to hold the assignment on the passenger run between Norfolk, Virginia and Marsden, North Carolina.
The case will be continued generally for further hearing upon the question of damages. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265839/ | 239 P.3d 1236 (2010)
James R. STEWART, Appellant,
v.
Steve ELLIOTT, Appellee.
No. S-13286.
Supreme Court of Alaska.
October 1, 2010.
*1237 James R. Stewart, pro se, Fairbanks, Appellant.
Steve L. Elliott, pro se, Fairbanks, Appellee.
Before: CARPENETI, Chief Justice, FABE, WINFREE, CHRISTEN, and STOWERS, Justices.
OPINION
FABE, Justice.
I. INTRODUCTION
A driver was arrested on a felony driving under the influence (DUI) charge at 12:40 a.m. on the date a new DUI law took effect. Represented by counsel, he pleaded no contest to the DUI charge in return for its reduction from a felony to a misdemeanor. But years later, the superior court granted the driver post-conviction relief, concluding that his counsel had been ineffective in failing to recognize that although the new DUI law became effective at 12:01 Alaska Standard Time, Alaska was still on Daylight Saving Time at the time of arrest.
The driver brought a malpractice suit against the attorney who negotiated the plea bargain. The driver relied primarily on the decision in the post-conviction relief action to demonstrate his attorney's negligence in failing to recognize a discrepancy between Alaska Standard Time and Alaska Daylight Saving Time. But the superior court declined to give the post-conviction decision preclusive effect and ruled that the driver had not presented sufficient evidence to prove negligence.
Because the driver's attorney in the criminal action was not a party to the post-conviction relief proceeding and neither directed nor controlled that litigation, we agree with the superior court that the post-conviction relief decision did not have preclusive effect in the malpractice action. We also conclude that the record supports the superior court's decision, and we affirm it in all respects.
II. FACTS AND PROCEEDINGS
A. Facts
1. Arrest and plea bargain
On September 1, 2001, Alaska's DUI law changed, lowering from 0.10 to 0.08 the blood alcohol percentage required for a driver to be considered "under the influence."[1]*1238 On that same day James Stewart was arrested at 12:40 a.m.[2] Various tests showed his blood alcohol percentage to be between 0.080 and 0.91. These levels were under the .10 presumption in the old law but exceeded the.08 presumption in the new law. Because new laws become effective at 12:01 a.m. Alaska Standard Time, Stewart's 12:40 a.m. arrest proceeded under the new DUI law.[3]
Stewart was charged with a DUI. He faced a heightened charge because he had a prior DUI conviction and another conviction for refusing to take a blood alcohol test.[4] Attorney Steve Elliott represented Stewart and negotiated a plea bargain under which Stewart pleaded no contest in November 2001 to the reduced charge of a misdemeanor DUI, carrying a one-year sentence and a $1,000 fine. He received an additional year and 15 days due to revocation of probation in an earlier robbery conviction.
2. Post-conviction relief
On May 3, 2002, Stewart filed a pro se petition for post-conviction relief based on claims distinct from those in this appeal.[5] Geoffry Wildridge, the assistant public defender assigned to Stewart, reviewed the petition and found Stewart's allegations not to be colorable and further concluded there were no other meritorious claims that could be raised on Stewart's behalf. Accordingly, in October 2003 well after Stewart had served his prison term Wildridge moved to withdraw as Stewart's counsel.
Reversing course eight days later, Wildridge supplemented Stewart's petition for post-conviction relief. Wildridge had become aware of a recent court of appeals decision, Fowler v. State,[6] which contained dicta noting in passing that "the new felony DUI law took effect at 12:01 a.m., Alaska Standard Time, (that is, at 1:01 a.m. Alaska Daylight Time). . . ."[7] Distinguishing Daylight Saving Time from Alaska Standard Time has a dramatic effect on Stewart's case. According to Fowler's dicta, because we "fall back" an hour when switching to Alaska Standard Time, an arrest on a given day during Daylight Saving Time is actually an hour earlier on Alaska Standard Time.[8] Because Alaska was on Daylight Saving Time when Stewart was arrested, Fowler's dicta would place Stewart's 12:40 a.m. arrest 21 minutes before the law under which he was arrested became effective.[9] Stewart's arrest at 12:40 a.m. September 1 Daylight Saving Time would be considered to occur at 11:40 p.m. August 31 Alaska Standard Time, which places it on the day before the new law went into effect.
On this newly discovered basis for ineffective assistance of counsel, Wildridge argued on Stewart's behalf that Elliott failed to "perform at least as well as an attorney with ordinary training and skill in the criminal law" by failing to recognize the time discrepancy issue. Finding ineffective assistance of counsel, Superior Court Judge Mark I. Wood granted Stewart's supplemented petition for post-conviction relief and vacated the DUI conviction.
B. Proceedings
After achieving post-conviction relief, Stewart filed the present professional malpractice case against Elliott, his original DUI *1239 attorney. The case came before Superior Court Judge Michael A. MacDonald, who conducted a bench trial on March 4, 2008. Stewart was represented by counsel at trial. To establish a breach of the duty to use the skill, prudence, and diligence that other attorneys with training and skill in criminal law commonly possess, Stewart pointed to the post-conviction relief decision, in which Judge Wood found that Elliott had not acted "like a reasonable attorney who was skilled in the criminal law." Other than the post-conviction relief decision, Stewart presented no evidence that a reasonable lawyer should have discerned the discrepancy between the two time regimes. In contrast, there was evidence that other experienced local defense attorneys, including Geoffry Wildridge, had failed to notice or raise this issue in similar cases. Elliott also observed in his testimony that Fowler was decided after Stewart's plea to the DUI charges and that federal legislation appears to conflict with Fowler's suggestion that the two time regimes make a difference in the effective date of new legislation.[10]
Judge MacDonald was concerned that Stewart presented no expert testimony. Judge MacDonald pointed Stewart's counsel to Zok v. Collins,[11] which requires expert testimony in all but obvious or non-technical situations in order to establish a breach of an attorney's duty of care.[12] Despite this warning, Stewart's attorney did not call an expert and maintained that the court "must acknowledge there has been a finding [of ineffective assistance of counsel] by a competent court in this jurisdiction."
Judge MacDonald ruled that Stewart had not proved that Elliott's conduct fell below the standard of care for a reasonable attorney and entered judgment for Elliott. On the question of issue preclusion, Judge MacDonald recognized that Elliott had not been a party to the post-conviction relief proceeding and that the post-conviction relief decision was thus not binding on Elliott. On the question whether Elliott breached his duty of care, Judge MacDonald noted that three other local attorneys, all experienced defense attorneys, had also failed to notice the difference regarding time regimes. In light of the "subtle nature [of] the question of law," the fact that several attorneys had not noticed the time discrepancy, and the fact that Judge Wood's post-conviction relief decision "may be incorrect," the superior court found that Stewart did not establish that Elliott breached his duty of care.
Stewart appeals, claiming that Elliott was negligent in failing to notice the time discrepancy.
III. STANDARD OF REVIEW
Because Stewart relies on the post-conviction relief decision, his appeal raises the question whether the post-conviction relief decision must be given preclusive effect in the malpractice action. This is a legal issue,[13] and we review questions of law de novo,[14] adopting the rule of law that is most persuasive in light of precedent, reason, and policy.[15]
Whether a standard of care was breached is a factual determination.[16] We *1240 review factual findings under the "clearly erroneous" standard.[17] We reverse a factual finding only if we are left "with `a definite and firm conviction on the entire record that a mistake has been made.'"[18]
IV. DISCUSSION
Stewart argues that Elliott was negligent because he failed to distinguish between Alaska Standard Time and Daylight Saving Time and thus failed to argue that the new law had not yet gone into effect when Stewart was arrested. Citing the post-conviction relief decision, Stewart contends that Elliott's "actions fell below the reasonable range of attorneys skilled in the criminal law." We understand Stewart to argue that, contrary to the superior court's ruling, the evidence was sufficient to establish that Elliott breached his duty of care.
Legal malpractice is a professional negligence claim requiring the plaintiff to establish four basic elements: (1) that the defendant has a duty "to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise," (2) that the defendant breached that duty, (3) that the breach proximately caused the injury, and (4) that actual loss or damage resulted from the negligence.[19]
This case hinges on the second element, breach of duty.[20] The only evidence submitted at trial that suggested a breach of duty was Judge Wood's earlier post-conviction relief decision, which, Judge MacDonald concluded, was not binding on Elliott. Further, Judge MacDonald observed that multiple other attorneys failed to notice the time issue. Thus Judge MacDonald found that, given the evidence presented, Stewart did not demonstrate breach. Judge MacDonald's conclusions were not erroneous.
A. Because Elliott Was Neither A Party To Nor In Privity With A Party To The Post-Conviction Relief Decision, Issue Preclusion Does Not Bind Elliott To That Decision.
Stewart attempted to demonstrate negligence by relying on Judge Wood's post-conviction relief decision, in which Judge Wood concluded that Elliott's actions constituted ineffective assistance of counsel. But Judge MacDonald correctly noted that that post-conviction relief decision does not bind Elliott in this professional negligence claim.
We have held that post-conviction relief is a necessary prerequisite for a claim of legal malpractice in criminal cases, but we have never suggested that it takes the place of establishing the elements of negligence.[21] For an issue in a separate action to have preclusive effect under the doctrine of collateral estoppel, the party against whom the issue is being asserted must have been a party to the earlier action.[22] But if one was not a party to the earlier action, that non-party may nonetheless be bound if in privity with the party in the earlier action.[23] In addition to the party/privity requirement, collateral estoppel requires that the judgment *1241 be final and on the merits; that the precluded issue be identical in both actions; and that the issue be essential to the final judgment in the first action.[24]
To define privity, "[w]e have adopted the approach of the Second Restatement of Judgments . . .; it is an approach that `relies on the various specific relationships that justify preclusion.'"[25] Privity exists where "the non-party (1) substantially participated in the control of a party's presentation in the adjudication or had an opportunity to do so; (2) agreed to be bound by the adjudication between the parties; or (3) was represented by a party in a capacity such as trustee, agent, or executor."[26] Privity "is a shorthand way of expressing assurance that the non-party has had adequate notice and opportunity to be heard, and that its rights and interests have been protected."[27] In effect, privity assures that it is fair to legally bind the non-party to the actions of the party in the earlier action.[28]
In the past we have found privity only where the relationship allowed significant and unhampered control over the earlier litigation. For example, where a family that jointly occupied land litigated a claim where all family members had the opportunity to participate in the litigation and generally agreed on its course, we held that the family members were in privity and bound by res judicata when they later tried to litigate the same claims as individuals.[29] Conversely, we held that a secondary insurance company was not in privity with a primary insurance company because neither could exert control over the other's litigation.[30] The lack of control over the other's litigation was particularly relevant given that their liability coverages were slightly different, which created distinct interests on behalf of each insurer.[31] We held that co-workers injured in a single accident were not in privity when each initially pursued litigation independently; thus we declined to bind one to the other's failure to exhaust administrative remedies.[32] And we held that an individual shareholder was not in privity with a corporation even when the shareholder had significant control of the litigation because the shareholder's actions on behalf of the corporation did not provide the ability to represent the shareholder's individual interests.[33] Similarly, a government-employed social worker was not bound by a decision against her state agency finding the social worker's actions inappropriate because that employee had interests different from those of the government and had no control over the government's litigation of the claim.[34]
In the present case, Elliott submitted an affidavit for the earlier post-conviction relief proceedings, but he was not a party there; instead that case was between Stewart and the State of Alaska. And there was no privity between Elliott and the State. First, Elliott's limited participation in post-conviction relief certainly did not allow him sufficient control to establish privity. Second, there is no evidence that Elliott agreed to be bound by the post-conviction relief litigation. And finally, Elliott was not represented by the State in a capacity such as trustee, agent, or executor.[35]
We have held that merely serving as a witness in an earlier proceeding does not *1242 afford control over the litigation sufficient to establish privity,[36] and the same logic applies to providing affidavit testimony. While Elliott's affidavit may have given him some opportunity to explain his actions, it did not give him the opportunity to more broadly control the litigation. He could not decide which general strategies to pursue in the litigation, what evidence to present, how to cross-examine adverse witnesses, or whether to settle the claim. And we note that Elliott's interest in this present litigation presumably the protection of his professional reputation and his personal assets would not necessarily have been those of the State in the post-conviction relief proceeding. Elliott did not have a chance to vigorously defend himself or his interests at the post-conviction relief stage. Accordingly, Elliott's participation in the earlier proceeding does not give him the amount of control and discretion we require for privity, and it would not be fair for him to be bound by the post-conviction relief decision.
Our conclusion that Elliott was not in privity with the State during the post-conviction relief litigation squares with our recent decision in State, Department of Health and Social Services, Office of Children's Services v. Doherty.[37] There we held that a decision against a state social service agency did not bind the state-employed social worker when she was subsequently sued in her individual capacity.[38] We stated:
The majority of courts maintain that government employees, in their individual capacities, are generally not in privity with the government and are not bound by adverse determinations against the government. This is because the interests, incentives, and immediate goals of a government employee in his or her individual capacity will most often be dissimilar from those of the government or even from those of that same employee in his or her official capacity. As a result, cases brought by or against the government or its employees in their official capacities will not usually provide a proper forum or even the slightest opportunity for a government employee to protect his or her own personal interests. And as a matter of sound policy, this is how it should be. For when the government enters the courthouse in order to prosecute criminal conduct or protect a child in need of aid, it should not be distracted from its purpose by the personal interests of its employees.[[39]]
Because Elliott is not a government employee, the above rationale applies to him even more forcefully. As in Doherty, the government's interest was not necessarily aligned with Elliott's. The State could not chart its litigation with the benefit of Elliott's firsthand knowledge of the actions and decisions during his representation of Stewart, nor would the State necessarily be motivated by Elliott's interest in protecting both his professional reputation and private assets. Indeed, given Doherty's conclusion that a government worker does not sufficiently control an agency's litigation, it is untenable to conclude that a private citizen, without even an employer-employee relationship, could exert sufficient control to establish privity. Further, the policy basis for the State's independence here is just as strong as that in Doherty: the State's ability to concede error should not be constrained by its need to protect the interests of a third party.
Accordingly, because Elliott was neither a party to the post-conviction relief proceedings nor in privity with a party given his inability to control that litigation, collateral estoppel does not apply, and it was not error for Judge MacDonald to conclude that the post-conviction relief decision does not bind Elliott.
B. It Was Not Clearly Erroneous For The Superior Court To Find The Evidence Insufficient To Establish Breach.
Stewart next claims that Judge MacDonald erred in his determination that Stewart *1243 failed to prove that Elliott breached his duty of care. Because there is adequate evidentiary support in the record for Judge MacDonald's factual findings, his ruling that Stewart did not establish a breach of the duty of care must be upheld.
Elliott testified that at the time of the plea bargain he consulted with two experienced criminal defense attorneys about his strategy for the case and that neither of them noticed an issue regarding Daylight Saving Time. Further, as the superior court noted, even Wildridge, Stewart's post-conviction relief attorney, failed to notice the issue at first and had moved to withdraw from the case due to the lack of colorable claims. This too supports the superior court's conclusion that Elliott's actions were not below the relevant standard of care. Significantly, the Fowler decision, which contained the dicta about Daylight Saving Time, was not issued until May 2003, a year-and-a-half after Stewart entered his plea to a misdemeanor DUI in November 2001.
Moreover, we are aware of no authority other than the Fowler dicta suggesting that the discrepancy between Daylight Saving Time and Alaska Standard Time has any impact on the effective time of new legislation. As Elliott submitted to the superior court, federal law suggests that such a discrepancy does not exist. According to the federal statute implementing Daylight Saving Time, "the standard time of each zone. . . shall be advanced one hour and such time as so advanced shall . . . be the standard time of such zone during [the period for Daylight Saving Time]."[40] The underlying question whether there is a discrepancy between Daylight Saving Time and Alaska Standard Time is not currently before this court, and we do not resolve that issue today. But the evidence, taken as a whole, supports the superior court's finding that Stewart did not present sufficient evidence to show that a reasonable attorney would have raised the time discrepancy as an issue in the DUI prosecution. Because the record supports Judge MacDonald's ruling, we are not left with the conviction that a mistake has been made.[41]
V. CONCLUSION
Because Elliott was not a party to, nor in privity with a party to, the earlier post-conviction relief proceeding, issue preclusion does not bind him to the conclusions of that proceeding. Because adequate evidence supports Judge MacDonald's ruling that Stewart failed to prove a breach of an attorney's standard of care, we AFFIRM.
NOTES
[1] See AS 28.35.030(a)(2). See also ALASKA STAT. ANN. § 28.35.030 cmt. Effect of amendments (Lexis 2008) ("The 2001 Amendment, effective September 1, 2001, in paragraph (a)(2), substituted '0.08 percent' for '0.10 percent'. . . .").
[2] According to Stewart, the traffic stop occurred at 12:20 a.m., 20 minutes before the arrest.
[3] See AS 01.10.070(d).
[4] See AS 28.35.030(n).
[5] Stewart claimed ineffective assistance of counsel, asserting that an evidence suppression issue should have been argued by Elliott, and because he felt that his consumption of alcohol before the new DUI law went into effect made his arrest ex post facto.
[6] 70 P.3d 1106 (Alaska App.2003).
[7] Id. at 1109.
[8] Id.
[9] To be clear, Stewart's arrest did not take place on the day we switch from Daylight Saving Time; rather his arrest occurred on September 1, while Alaska is firmly on Daylight Saving Time. See NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY, INFORMATION ABOUT THE CURRENT DAYLIGHT SAVING TIME (DST) RULES (May 11, 2010), www.nist.gov/physlab/div847/dst.cfm (specifying that Daylight Saving Time ends at 2:00 a.m. on the first Sunday of November).
[10] 15 U.S.C. § 260a(a) provides: "[T]he standard time of each zone . . . shall be advanced one hour and such time as so advanced shall . . . be the standard time of such zone during [the period for Daylight Saving Time]. . . ." The question whether Daylight Saving Time is actually different from Alaska Standard Time for purposes of the effective date of new legislation is not before this court, and we do not decide it.
[11] 18 P.3d 39 (Alaska 2001).
[12] Id. at 42.
[13] See State, Dep't of Health & Soc. Servs., Office of Children's Servs. v. Doherty, 167 P.3d 64, 68-69 (Alaska 2007) (applying independent review to issue of collateral estoppel).
[14] Jacob v. State, Dep't of Health & Soc. Servs., Office of Children's Servs., 177 P.3d 1181, 1184 (Alaska 2008); John's Heating Serv. v. Lamb, 46 P.3d 1024, 1030 (Alaska 2002).
[15] Jacob, 177 P.3d at 1184.
[16] Parnell v. Peak Oilfield Serv. Co., 174 P.3d 757, 766 n. 20 (Alaska 2007); Bryson v. Banner Health Sys., 89 P.3d 800, 803 n. 4 (Alaska 2004) (noting that extent and scope of duty are questions of law); see Swenson Trucking & Excavating, Inc. v. Truckweld Equip. Co., 604 P.2d 1113, 1118-19 (Alaska 1980) (explaining that breach of duty is question for fact finder); see also Armstrong v. United States, 756 F.2d 1407, 1409 (9th Cir. 1985) ("[T]he determination of negligence requires the testing of particular facts against a predetermined standard of conduct. The existence and extent of a duty of care are questions of law but whether such a duty has been breached [is a question of fact]. . . .") (internal citation omitted); Bursztajn v. United States, 367 F.3d 485, 490 (5th Cir.2004) (distinguishing between existence of duty-legal question-and whether defendant's particular behavior breached that duty-factual question).
[17] Brotherton v. Brotherton, 142 P.3d 1187, 1189 (Alaska 2006); Nerox Power Sys., Inc. v. M-B Contracting Co., 54 P.3d 791, 794 (Alaska 2002).
[18] City of Hydaburg v. Hydaburg Coop. Ass'n, 858 P.2d 1131, 1135 (Alaska 1993) (quoting Parker v. N. Mixing Co., 756 P.2d 881, 891 n. 23 (Alaska 1988)).
[19] Shaw v. State, Dep't of Admin., Pub. Defender Agency, 816 P.2d 1358, 1361 n. 5 (Alaska 1991) (citing Linck v. Barokas & Martin, 667 P.2d 171, 173 n. 4 (Alaska 1983)).
[20] The superior court ruled that "Stewart failed to establish that Elliott's conduct fell below the standard of care of a reasonable attorney."
[21] See Shaw, 816 P.2d at 1361 n. 5.
[22] See Powers v. United Servs. Auto. Ass'n, 6 P.3d 294, 297-98 (Alaska 2000).
[23] State, Dep't of Health & Soc. Servs., Office of Children's Servs. v. Doherty, 167 P.3d 64, 72 (Alaska 2007); Powers, 6 P.3d at 297; Alaska Foods, Inc. v. Nichiro Gyogyo Kaisha, Ltd., 768 P.2d 117, 121 (Alaska 1989).
[24] Powers, 6 P.3d at 297-98.
[25] Id.
[26] Id. at 298 (citing RESTATEMENT (SECOND) OF JUDGMENTS §§ 39-42 (1982)).
[27] Alaska Foods, 768 P.2d at 121 (citing Drickersen v. Drickersen, 546 P.2d 162, 170-71 (Alaska 1976)).
[28] Donnelly v. Eklutna, Inc., 973 P.2d 87, 92 (Alaska 1999).
[29] Id. at 93.
[30] Powers, 6 P.3d at 297-98.
[31] Id.
[32] Elliott v. Brown, 569 P.2d 1323, 1328 (Alaska 1977).
[33] Alaska Foods, Inc. v. Nichiro Gyogyo Kaisha, Ltd., 768 P.2d 117, 122 (Alaska 1989).
[34] State, Dep't of Health & Soc. Servs., Office of Children's Servs. v. Doherty, 167 P.3d 64, 72 (Alaska 2007).
[35] See Powers, 6 P.3d at 298 (citing RESTATEMENT (SECOND) OF JUDGMENTS §§ 39-42 (1982)).
[36] Elliott, 569 P.2d at 1328 ("Elliott's participation in [the earlier case] was limited to testifying as a witness. Elliott had no control over [the claim in that case]. In such circumstances he cannot be collaterally estopped.").
[37] 167 P.3d 64.
[38] Id. at 73.
[39] Id. at 72 (internal footnotes omitted).
[40] 15 U.S.C. § 260a(a) (2007).
[41] City of Hydaburg v. Hydaburg Coop. Ass'n, 858 P.2d 1131, 1135 (Alaska 1993) (quoting Parker v. N. Mixing Co., 756 P.2d 881, 891 n. 23 (Alaska 1988)) (We reverse under the clearly erroneous standard only if we are left "with `a definite and firm conviction on the entire record that a mistake has been made.'"). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265857/ | 69 F.Supp. 599 (1947)
WALLING, Administrator of Wage and Hour Div., U. S. Dept. of Labor,
v.
JACKSONVILLE PAPER CO. et al.
Civil Action No. 209-J.
District Court, S. D. Florida, Jacksonville Division.
January 23, 1947.
*600 George A. Downing, Regional Atty., of Atlanta, Ga., James H. Shelton, Sr. Atty., of Atlanta, Ga., for plaintiff.
Louis Kurz and Ragland, Kurz & Layton, all of Jacksonville, Fla., for defendants.
De VANE, District Judge.
This case is again before the Court on an application of the Administrator of the Wage and Hour Division of the United States Department of Labor, filed April 16, 1946, seeking an adjudication in civil contempt of the defendants based on alleged violations of the terms of the Judgment of this Court entered August 29, 1941, and of the Amended and Modified Judgment entered June 3, 1943.
On July 8, 1940, petitioner's predecessor filed a complaint against all the above named defendants seeking an injunction under Section 17 of the Fair Labor Standards *601 Act, 29 U.S.C.A. §§ 201 et seq., 217, against alleged violations of said Act. After trial the Court, on August 29, 1941, entered a final judgment against the co-partner defendants doing business as Southern Industries and against the Jacksonville Paper Company as to its operations in its main office and warehouse in Jacksonville and against the following branches: Jacksonville Paper Company, Jacksonville; Capitol Paper Company, Tallahassee; Pensacola Paper Company, Pensacola; Partin Paper Company, Mobile, Alabama; and against the Atlantic Paper Company, Savannah, Georgia. The Court held that employees of the Jacksonville Paper Company at the following branches were not subject to the terms and provisions of the Wage and Hour law, to-wit: Tampa Paper Company, Tampa; Lakeland Paper Company, Lakeland; Central Paper Company, Orlando; East Coast Paper Company, West Palm Beach; Everglades Paper Company, Miami; Pinellas Paper Company, St. Petersburg, all in the State of Florida, and Macon Paper Company, Macon, Georgia.
Both sides appealed and the Circuit Court of Appeals in Fleming, Administrator, v. Jacksonville Paper Company et al., and visa versa, 5 Cir., 128 F.2d 395, reversed the lower court primarily on the ground that the judgment and injunctive order went beyond the relief sought by plaintiff and directed that a new judgment and injunctive order be entered restricting the injunction to prohibition of violations alleged in the complaint. The Circuit Court of Appeals held that the duties of each particular employee would govern the coverage, but held against the contention of the Administrator that all employees of all branches were within the Act because the merchandise handled by them, to a large extent, came from outside the State. Certiorari was granted by the Supreme Court of the United States and in Walling, Administrator, v. Jacksonville Paper Company, 317 U.S. 564, 63 S.Ct. 332, 335, 87 L.Ed. 460, the Supreme Court modified and as modified affirmed the judgment of the Circuit Court of Appeals.
The Supreme Court held that that part of the decision of the Circuit Court of Appeals, which held that "any pause at the warehouse is sufficient to deprive the remainder of the journey of its interstate status" was too restrictive. The Supreme Court held that a temporary pause at the warehouse does not mean that goods are no longer "in commerce," within the meaning of the Act; if the halt in the movement of the goods is a convenient and natural step in the process of getting them to their final destination they remain in commerce until they reach those points. The Court held, however, that the Administrator had not sustained the burden which was on him to show that the goods continued in commerce where they passed through defendant's warehouse. This question was left for decision by the District Court after further evidence thereon.
Following the decision of the Supreme Court, the lower Court, without further hearing, entered an amended and modified judgment pursuant to the mandate of the Supreme Court, enjoining the defendant from violating the specific provisions of the Wage and Hour Act, with which they had been charged in the complaint and which the Circuit Court of Appeals and the Supreme Court had determined they were violating.
None of the practices now complained of and for which plaintiff asks the Court to adjudge the defendants in civil contempt were specifically enjoined by the judgment of August 29, 1941, or by the judgment of June 3, 1943, although most of the practices were in existence at the time these orders were entered. The reason for this grew out of the fact that the first trial of this case centered around the controversy as to what extent the defendants were subject to the Act. Nothing further was decided in the first trial of this case and that question was not fully decided.
The questions the Court now has before it may be summarized as follows:
1. Are the employees of the Jacksonville Paper Company, at its branches in Tampa, Orlando, St. Petersburg, Lakeland and West Palm Beach, Florida, engaged in work in Interstate Commerce, within the meaning of the Act? Plaintiff offered *602 no proof of violations at three of the branches, viz., Miami and Daytona Beach, Florida, and Macon, Georgia.
2. Is the so-called Accumulated-Hours Plan in violation of the Act?
3. Does the Bonus Plan result in failure to pay required overtime?
4. Were certain employees misclassified as "executive" and "administrative" employees?
5. Did the defendants violate Section 7 of the Act by payment of straight piece rates to piece workers who worked in excess of forty hours per week?
6. Did the defendant violate Sections 6 and 7 of the Act in failing to compensate their employees for hours worked, which were not registered by the time clock?
7. Have the defendants violated the record keeping and shipping provisions of the Act?
These questions will be considered in the order stated. A proper exploration of the facts relating to each question will make this Memorandum Opinion tedious and long.
1. Are the Employees of Jacksonville Paper Company at Its Branches at Tampa, Orlando, St. Petersburg, Lakeland and West Palm Beach, Florida, Engaged in Work in Interstate Commerce, Within the Meaning of the Act?
Jacksonville Paper Company is engaged in the wholesale distribution of a large variety of paper, paper products and related articles. Its home office and warehouse are maintained in Jacksonville, Florida, and the company also maintains thirteen branches. As stated above, the employees at the home office and five of the branches were found, at the original trial of this case, to be subject to the Act. The Court now has before it the question as to whether the employees at the above named branches are also subject to the Act.
Approximately three-fourths to four-fifths of the goods which Jacksonville Paper Company distributes are supplied by manufacturers located in States other than the State of Florida, the remainder being supplied by Southern Industries, the co-partnership defendants herein. The branches we are here considering make no sales across State lines. Employees at these branches are subject to the Act only if goods received at the branches from points outside the State of Florida and sold within the State being then under the Act.
The factual situation surrounding defendant's business and its methods of operating changed substantially during the War which recently ended. Wartime restrictions made it necessary for defendant to allocate to each of its customers a proportionate share of practically all goods purchased by it. This allocation of goods between customers clearly put the merchandise "in commerce" within the meaning of the Act, at all its branches as that term is construed by the decision of the Supreme Court in Walling v. Jacksonville Paper Company, supra. However, the War is now ended. Wartime restrictions have been largely removed and this case should not and will not be decided on the basis of wartime conditions.
Disregarding that part of the evidence touching the effect of the War upon defendant's operations, other evidence undeniably shows that the branches here in question are engaged in Interstate Commerce in certain particulars. The evidence shows that these branches handle and distribute prior order goods, special order goods and drop shipments. They sell citrus, cigar and other labels which are intended for and actually move in shipments of citrus, cigars and other products to out-of-State points. They sell newsprint to newspaper companies with circulations outside the State. Also numerous items are ordered for specific customers with their names, etc., printed upon the merchandise. This class of business is all "in commerce" and the Supreme Court so held in Walling v. Jacksonville Paper Company, supra.
The Opinion of this Court, therefore, as to whether defendant is engaged in Interstate Commerce at the branches here in question will be based upon broader grounds. As pointed out above, approximately three-fourths to four-fifths of *603 all goods sold customers come from outside the State of Florida. The company has an established business with salesmen at each branch and orders are placed for each branch to meet the demands of customers served by the branch as such customers' demands are disclosed by prior orders and purchases. It is impossible for the Court to determine from the evidence precisely what goods shipped in interstate commerce to the branches are purchased to fill contracts or anticipated needs of specific customers and what goods are intended for warehouse purposes to meet demands of unknown customers at the time the goods are ordered. But the evidence leaves no doubt in the mind of the Court that by far the larger part of all goods received at the branches is ordered to fill contracts and anticipated needs of specific customers. And it is the opinion of the Court that the evidence introduced at the prior trial in this case, plus the evidence offered at this trial is sufficient to establish such practical continuity in Interstate Commerce between the movement of the goods to the branches and from the branches to regular customers to keep the movement "in commerce" within the meaning of the Act. Any halt at the warehouse in the movement of the goods purchased to fill orders of customers is merely an intermediate step in the process of getting such goods to customers.
The company makes no segregation of its employees as between interstate and intrastate commerce activities. The record shows that all of its employees participate in the foregoing activities sufficient to bring those that are covered by the Act within its terms. Since defendant uses its employees indiscriminately in both classes of business and since defendant is engaged in Interstate Commerce at all the above named branches it is not necessary for the Court to do more at this time than determine that a substantial part of the work of all employees at said branches is in interstate commerce and the Court so determines and holds.
2. The Accumulated-Hours Plan.
On or about April 29, 1940, defendant inaugurated a so-called Accumulated-Hours Plan as to many of its employees who had formerly been paid flat weekly salaries without additional compensation for overtime hours. The change was accomplished through a wholesale firing of all employees on Saturday, April 27, 1940, and a wholesale re-hiring of these same employees on Monday, April 29, 1940. Under the Accumulated-Hours Plan employees generally continued to receive the same amount of weekly compensation as before, with minor changes necessitated by arithmetical limitations and they continued to work the same number of hours as formerly.
In order to put the plan into effect the employees were required to sign a contract of employment. This contract was in blank form and contained a space in which the straight time and overtime hourly rate of pay was stated. Some of the employees testified that the contract had been filled out before they signed it, while others testified this was not the case with them. The desired results were accomplished by setting up for each employee a purported hourly rate which was arrived at by dividing into the regular and agreed weekly salary a number of hours for which the employee was purportedly employed which was, in every case, greater than the number customarily and regularly worked. Defendant then computed and entered on its payroll records compensation at the alleged hourly rate for the straight time hours and an additional one-half time for hours between forty and the number specified in the contract. The female employees normally worked a schedule of forty-eight hours, both before and after the Accumulated-Hours Plan went into effect. Their hourly rates, in most cases, were computed on an assumed schedule of forty-nine and one-half hours and were figured so that the agreed salary covered both straight time and overtime for forty-nine and one-half hours. In later contracts an assumed schedule of fifty-five hours was used for some of the women employees. The male employees normally worked a weekly schedule of fifty hours. The hourly rates were figured and the contracts and payroll records were set up for an assumed fifty-four hour schedule. Later the rates were calculated on the basis of *604 fifty-five hours, in some cases, and sixty hours in others.
On August 1, 1940, the Plan was amended to include a purported account with each employee to which there were posted weekly the difference between the hours the employee actually worked and the number for which the employee had been purportedly hired. The effect of the Amendment was to make it unnecessary for the company to pay any overtime compensation for any additional overtime hours worked beyond those agreed to be worked at the time the employee was hired, except in a few instances not important here. The Plan, as operated, left the employees indebted to the company for many unworked hours, but the record shows the company never called upon any of its employees to make good on that part of their contract beyond failing to compensate them for the time worked beyond the schedule agreed upon.
At the time the Accumulated-Hours Plan was put into effect, it was believed by defendant to fully comply with the decision of the Supreme Court of the United States in Walling v. A. H. Belo Corporation, 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716. The Amendment to the Plan, adopted August 1, 1940, was an effort to take advantage of the pre-payment plan theretofore promulgated by the Administrator of the Wage and Hour Division.
Counsel for plaintiff contends that the Supreme Court has overruled its holding in Walling v. A. H. Belo Corporation, supra, by its later decisions in Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 65 S.Ct. 11, 89 L.Ed. 29; Walling v. Youngerman-Reynolds Hardwood Co., Inc., 325 U.S. 419, 65 S.Ct. 1242, 89 L.Ed. 1705; and Walling v. Harnischfeger Corporation, 325 U.S. 427, 65 S.Ct. 1246, 89 L.Ed. 1711. Counsel for plaintiff further contends that the decision of the Supreme Court in the Belo case has no application to this case.
The Circuit Courts of Appeals for the Second and Seventh Circuits, in Walling v. Uhlmann Grain Co. et al., 151 F.2d 381, and Walling v. Richmond Screw Anchor Co., Inc., 154 F.2d 780, lend support to the contention of counsel for plaintiff that the Supreme Court has so modified its holding in the Belo case that the latter case is no longer the law.
This Court does not agree with the contention of counsel for plaintiff that the Supreme Court has completely nullified its decision in the Belo case. The Accumulated-Hours Plan here under consideration, however, is in no respect like the plan approved by the Supreme Court in the Belo case and the decision in that case has no controlling effect here. The testimony in this case shows that defendant hired its employees for a stipulated weekly salary for which the employees agreed to work a certain number of hours weekly. The wholesale firing and re-hiring of the employees affected, without any substantial change in compensation or in hours actually worked, and the setting up of a completely false and fictitious method of computing compensation without regard to the hours actually worked, renders the plan and contracts between defendant and its employees, illegal. The vice of the plan lies in the fact that the contracts do not represent the rates paid for non-overtime and overtime hours actually worked.
The plan and the contracts being illegal under the Act, the weekly salaries agreed upon before the contracts were executed and the plan put into effect constitute the basis for determining the regular and overtime rates. In similar cases the Supreme Court has held that the weekly salary agreed upon, divided by the hours agreed to be worked in each week, equals the regular rate; one and one-half times that rate equals the overtime rate for hours worked in excess of the forty. See Walling v. Helmerich & Payne, Inc., supra, and Overnight Motor Transportation Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682.
The Court holds the Accumulated-Hours Plan as adopted and put into effect by defendant, is in violation of Sections 6 & 7 of the Wage and Hour Act.
3. The Bonus Plan.
On June 1, 1942, defendant put into effect a so-called Bonus Plan, which was still in effect without change when the case was heard. At the end of each fiscal year *605 (May 31st) the company, by corporate resolution, declares from the previous year's surplus, a bonus to employees. The bonus is paid all employees except Managers working on a split profit basis and salesmen working on commissions. The bonus is a fixed percentage of the employee's previous year or partial year's total compensation, being payable in twelve equal monthly instalments.
The schedule of bonus percentages is as follows:
Continuous employment for 8 years
or more ........................... 25%
Continuous employment for 5 to 8
years ............................. 22½%
Continuous employment 1 to 5 years 20%
Employment for less than 1 year ... 15%
Defendant issues notices to the employees yearly giving them formal notice of the declaration of the bonuses. The Board of Directors contemporaneously with the declaration of the bonus authorizes the execution of a promissory note, payable to each employee entitled to a bonus, for the full amount of the bonus due him. The notice to employees states that the company will hold the notes "as a matter of convenience" and the employees apparently never see them. The bonus is paid monthly and defendant credits on the back of each note the monthly instalments as paid. The notes, themselves, bear a stamped statement to the effect they will be cancelled if the employee's connection with the company is terminated any time during the year and the testimony is to the effect that the note, in each case, is cancelled without further payment to the employee.
The evidence shows that the Bonus Plan was inaugurated by the company as a guarantee of increase in compensation to hold its employees during the War period. The company does not include the bonus payments as part of the employee's compensation in computing the regular rate of pay for overtime purposes. In this connection, however, it should be remembered that the bonus represents all payments made to the employee during the prior year, which includes all overtime payments. Plaintiff, relying upon Walling v. Harnischfeger Corporation, supra, Walling v. Youngerman-Reynolds Hardwood Co., Inc., supra, and Walling v. Helmerich & Payne, Inc., supra, and other cases, contends that the Bonus Plan does not comply with Section 7 of the Act.
The testimony conclusively shows that the so-called Bonus Plan payments are in no sense a gratuity. As pointed out above, the plan was devised to hold employees in defendant's services by assuring them an annual increase in pay. Like the Accumulated-Hours Plan, it fails to take into consideration the amount of overtime worked. While overtime worked is included in the total compensation upon which the bonus is calculated, the Plan does not comply with Section 7 of the Act in computing overtime compensation for the employees. It is subject to the same legal obstacles that renders the Accumulated-Hours Plan in violation of the Act and for the same reason the Bonus Plan is in violation of the Act.
4. Employees Classified as Executive and Administrative Employees.
Plaintiff's amended petition claims that defendants have failed to comply with the overtime requirements of the Act as to twenty-three employees. However, plaintiff offered no proof of violations as to three of these employees, viz.: J. B. Dupree, Roy E. Butts and A. F. Wilberling. The question of exemption remains for twenty employees. Eighteen of these were employed in the home office and branches of the Jacksonville Paper Company. The other two were employed by Southern Industries. All twenty employees testified either at the trial or by depositions taken at the various branches before the trial. The Supreme Court has held that exemptions to the Fair Labor Standards Act are to be narrowly construed. See A. H. Phillips, Inc., v. Walling, 324 U.S. 490, 65 S.Ct. 807, 157 A.L.R. 876, 89 L.Ed. 1095.
The Administrator is specifically directed, under Section 13(a) (1) of the Act, to define the terms "executive" and "administrative" employees. He has done this, by regulations Title 29, Chapter V, Code of Federal Regulations, Part 541. It is unnecessary for the Court to detail here the "executive" *606 and "administrative" definitions as defined by the Administrator.
The employees in question fall into three groups. The first group of nine employees were employed by the Jacksonville Paper Company as shipping clerks, one in the home office and the other eight in branch offices. The second group of nine employees were employed as cashiers at branch offices of the Jacksonville Paper Company. The remaining two employees were employed as foremen by Southern Industries. The designation of shipping clerks and cashiers may not, in each instant, be in exact accord with the title given the employees, but this classification will suffice for the purpose of considering whether the employees are exempt under said Regulations, Part 541.
The definition of the terms "executive" and "administrative" employees adopted by the Administrator presents considerable trouble in its application in specific cases. This case is illustrative of the trouble encountered by the employer in operating his business under the regulations as well as by the Court in determining whether employees are exempt under the regulations. For example, in this case it is conceded by the Administrator that shipping clerks and cashiers in certain offices of the defendant are exempt, but he contends that in other offices they are not exempt.
The executive exemption requires that an employee satisfy each of six tests in order to be exempt. To come within the administrative exemption it is necessary for an employee to satisfy sub-section A of Section 541.2 and either sub-section B(1), B(2) or B(3). The tests or conditions prescribed by the regulations have been consistently upheld as valid and the Court has no discretion in the matter. Its only duty is to see if the employees meet the prescribed tests.
In some instances the eighteen employees classified as shipping clerks and cashiers failed to qualify because they did not satisfy salary requirements for an administrative employee, laid down by sub-section A of Section 541.2. In other instances they did not customarily and regularly direct the work of two or more employees; did not have authority to "hire or fire employees" or did not "customarily and regularly exercise discretionary powers." In most instances these employees failed to qualify for the reason that the non-exempt work they performed exceeded the 20% tolerance allowed by the regulation. All eighteen employees failed to satisfy one or more of the foregoing tests. The record is so conclusive upon this question it is unnecessary for the Court to summarize the reason for the disqualification of each particular employee.
As stated above, the outstanding failure to qualify for exemption was the fact that most of these employees performed nonexempt work in excess of the 20% tolerance prescribed by the Administrator. Some day some of the branches are going to grow to an extent, if some of them have not already done so, where these same employees will meet the requirements of Section 541 and become exempt. However, under the evidence introduced in this case the Court is required to and does hold that the eighteen employees classified as shipping clerks and cashiers, did not, at the time the case was heard, meet the requirements of regulation, Part 541, and are subject to the overtime requirements of the Act.
There remains the two employees of Southern Industries. C. C. Cantrell, one of these employees, is a working foreman, employed in the envelope department of Southern Industries. His department utilize both machine and handwork. There are about twelve machines in the department. Cantrell supervises from eleven to thirteen employees. About seven of these are women. In addition to this it is Cantrell's duty to keep these machines running. If one breaks down and has to go to the shop he does nothing about the repair. However, adjustments are continuously required and Cantrell holds his job because of his ability to make necessary adjustments and keep the machines in operation. The record indicates he is a good employee and pitches in and helps whenever and wherever he is needed. The Administrator, in adopting his regulations, intended to make an employee of this class subject to the Act. It is clearly so stated in Press *607 Release G-201. The Court, therefore, has no authority in the matter other than to hold that this employee is subject to the Act.
What the Court has said about Cantrell is equally applicable to E. C. Klehm. Klehm was also employed as a working foreman in the envelope department of Southern Industries. He supervised the work of twelve employees. Eight machines were operated in his department and all employees, except three, were women. Klehm was a die-cutter and warehouse foreman. He regularly performed several types of non-exempt work. In addition to his die-cutting he adjusted machines, kept them operating and generally did everything that had to be done. These extra duties make him also subject to the Act.
5. Piece Rate Workers.
Southern Industries had two employees doing piece work. The machines operated on a twenty-four hour basis. Each employee worked twelve hours. The man who operated the machines on the day shift was general foreman of the department and was subject to call at night if anything went wrong with the machines which the night man could not adjust, which seldom occurred. Both employees were compensated on a straight piece work basis. The day-man received, in addition to the piece rate for the work he did in the day, additional compensation, on a piece rate basis, for the work done at night by his subordinate. Each of these employees working twelve hours a day did considerable overtime work. This was not taken into consideration in fixing the piece rate. The Supreme Court has held that the overtime provisions of the Act are applicable to piece rate works. See United States v. Rosenwasser, 323 U.S. 360, 65 S. Ct. 295, 89 L.Ed. 301; Overnight Motor Transportation Company v. Missel, supra. Southern Industries, therefore, violated Section 7 of the Act in compensating piece rate workers at straight time piece rate.
6. Failure of Employees to Punch the Time Clock.
Southern Industries, in order to aid it in complying with the record provisions of the Act, installed a time clock at its plant which it required all employees to punch. In a few instances employees failed to comply with the rule and were not paid. The weakness in the rule is that it is arbitrary to the extent that it penalizes any employee who fails to punch the clock. It should be amended in some fair way so as to give the employee an opportunity to remedy the oversight by having a foreman or some other qualified employee certify as to the hours the employee actually worked. However, the instances of violation shown are trivial and until such time as the Administrator can show more extended violations of this rule the Court refuses to take cognizance of the few isolated violations shown.
7. Failure to Keep Records.
The evidence shows and the defendants admit that they have not been keeping a record of the hours worked by the employees classified by them as "executive" and "administrative" employees and have not kept an accurate record of the hours worked by piece workers. Their failure to do so grew out of the fact that defendants believed these employees were not subject to the Act. They agree that should the Court find that the employees in question are subject to the Act, that proper records of the hours worked should be and will be kept. The failure to keep these records constituted a violation of the Act, but compliance by the defendants with the final judgment of this Court on other questions raised in this case will necessitate compliance with the record keeping provisions of the Act.
Plaintiff also complains that the defendants failed to keep proper records of hours worked by certain employees at the Orlando branch and one or two other branches. This complaint grew out of the fact that the local manager of the company at these branches allowed employees time off without loss of compensation and to later make up such loss of time by working short periods of overtime. The evidence shows that this practice was purely for the benefit of the employees, but since the Administrator has complained about it the practice has been discontinued and employees are no *608 longer permitted to enjoy the privilege of taking time off without loss of compensation and granted the opportunity to work a few minutes overtime to make it up. Since the practice has been discontinued it appears to the Court that no action in this matter is necessary.
Adjudication in Contempt and Punishment Will Not be Visited Upon the Defendants.
As pointed out earlier in this Memorandum Opinion, all the questions raised by the application of plaintiff, seeking an adjudication in civil contempt based on alleged violations by defendants of the terms of the former judgments of this Court, challenged the legality of practices, save one, that were in effect when the judgments were entered. The one exception is the Bonus Plan, which was inaugurated in 1942, subsequent to the earlier judgment, but prior to the modified judgment of June 3, 1943. All of these questions are of such nature and character that defendants are entitled to their day in court for an adjudication of the questions. In fact, the parties attempted to secure an adjudication of some of these questions at the former trial, but the Court restricted the issues and refused to hear evidence on the questions. Upon this point the Court, in its Conclusions of Law, said:
"The Court announced earlier in the trial of this case that an injunction would issue against the defendants for violations committed prior to the filing of this complaint in all other than the branch houses, and much proffered testimony was rejected by the Court dealing with the business of the defendants at points other than in the branch houses, and the court does not deem it fair and just to make definite or specific findings on particular phases of the practices of the company at those places of business other than at the disputed branches. If it was error then so to hold, it would be more grave error to now otherwise hold, after the rejection of evidence dealing with the particular practices at points other than at the disputed branches."
It does not lie within the discretionary power of the Court to inflict punishment upon defendants for violations of the Act, not specifically imposed by the earlier judgments. To constitute civil contempt there must be some evidence of a wilfull and intentional violation of a Court Order. There is no evidence in this case showing a wilfull violation of any of the specific provisions of the former judgments prohibiting the doing of any specific thing. In fact, as just pointed out above, none of the questions here considered were considered and passed upon by the Court at the former hearing of this case.
Plaintiff insists the Court should enforce compliance with its former judgments by ordering the payment of the unpaid statutory wages due defendant's employees. The Administrator is not authorized by the Act to enforce the payment of unpaid statutory wages to employees who are under the Act. Section 16 of the Act expressly gives such right to the employees. There is no evidence in the record of contumacy that would justify the infliction of a penalty upon the defendants, measured by the amount of unpaid statutory wages. See Walling v. Crane, 5 Cir., 158 F.2d 80.
The Court will consider the application of plaintiff for an adjudication in civil contempt as an amended complaint seeking a broadening of the injunctive orders heretofore entered in this case, and will enter an amended judgment enjoining defendants from violating the provisions of the Fair Labor Standards Act as adjudicated in this Memorandum Opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265797/ | 341 Pa. Super. 432 (1985)
491 A.2d 894
Herbert A. BRINKLEY, Parent and Natural Guardian of David J. Brinkley, a minor, Appellant,
v.
Jeffrey Ray PEALER, Appellee.
Supreme Court of Pennsylvania.
Argued September 20, 1984.
Filed April 12, 1985.
*435 Thomas E. Brenner, Harrisburg, for appellant.
Scott A. Fleischauer, Harrisburg, for appellee.
Before WICKERSHAM, WIEAND and HESTER, JJ.
WIEAND, Judge:
David J. Brinkley, a minor, was driving a Volkswagen station wagon owned by his father, Herbert A. Brinkley, when he was involved in a collision with a truck being operated negligently by Jeffrey Ray Pealer. Herbert A. Brinkley, parent and natural guardian for his son, filed a complaint against Pealer to recover damages to his vehicle, medical bills incurred because of his son's injuries in the amount of $500, and damages for his son's pain and suffering. It was alleged that the vehicle being driven by Pealer had been an unsecured vehicle owned by Robert N. Butt.[1] The defendant, Pealer, filed preliminary objections in the nature of a demurrer on grounds that the action was barred by the provisions of the Pennsylvania No-fault Motor Vehicle Insurance Act.[2] The trial court sustained the preliminary objections and dismissed the complaint. Brinkley appealed. We affirm in part and reverse in part.
Section 301(a) of the No-fault Motor Vehicle Insurance Act, supra, 40 P.S. § 1009.301(a), provides as follows:
(a) Partial abolition. Tort liability is abolished with respect to any injury that takes place in this State in accordance with the provisions of this act if such injury arises out of the maintenance or use of a motor vehicle, except that:
(1) An owner of a motor vehicle involved in an accident remains liable if, at the time of the accident, the vehicle was not a secured vehicle.
(2) A person in the business of designing, manufacturing, repairing, servicing, or otherwise maintaining *436 motor vehicles remains liable for injury arising out of a defect in such motor vehicle which is caused or not corrected by an act or omission in the course of such business, other than a defect in a motor vehicle which is operated by such business.
(3) An individual remains liable for intentionally injuring himself or another individual.
(4) A person remains liable for loss which is not compensated because of any limitation in accordance with section 202(a), (b), (c) or (d) of this act. A person is not liable for loss which is not compensated because of limitations in accordance with subsection (e) of section 202 of this act.
(5) A person remains liable for damages for non-economic detriment if the accident results in:
(A) death or serious and permanent injury; or
(B) the reasonable value of reasonable and necessary medical and dental services, including prosthetic devices and necessary ambulance, hospital and professional nursing expenses incurred in the diagnosis, care and recovery of the victim, exclusive of diagnostic x-ray costs and rehabilitation costs in excess of one hundred dollars ($100) is in excess of seven hundred fifty dollars ($750). For purposes of this subclause, the reasonable value of hospital room and board shall be the amount determined by the Department of Health to be the average daily rate charged for a semi-private hospital room and board computed from such charges by all hospitals in the Commonwealth; or
(C) medically determinable physical or mental impairment which prevents the victim from performing all or substantially all of the material acts and duties which constitute his usual and customary daily activities and which continues for more than sixty consecutive days; or
(D) injury which in whole or in part consists of cosmetic disfigurement which is permanent, irreparable and severe.
*437 (6) A person remains liable for injury arising out of a motorcycle accident to the extent that such injury is not covered by basic loss benefits payable under this act, as described in section 103.
A tort claim for property damage is not barred by Section 301(a) of the No-fault Motor Vehicle Insurance Act. Fitzpatrick v. Branoff, 504 Pa. 169, 172, 470 A.2d 521, 523 (1983). Therefore, it was error to sustain preliminary objections in the nature of a demurrer to the second count of the complaint which contained a claim for damages caused to the Brinkley vehicle.
The complaint has failed, however, to state a legally cognizable cause of action for personal injuries. The medical expenses for appellant's son were only $500, and appellant has not alleged that his son's injuries or scarring were serious. He relies rather upon Section 301(a)(1) which provides that "an owner of a motor vehicle involved in an accident remains liable if, at the time of the accident, the vehicle was not a secured vehicle." The issue for our determination, therefore, is whether the legislature's preservation of a common law tort action against an owner of an unsecured vehicle was intended to include the right to bring an action against the operator of an unsecured vehicle.
The words and phrases used in any legislation are to be construed according to their common meaning and accepted usage. Fireman's Fund Insurance Co. v. Nationwide Mutual Insurance Co., 317 Pa.Super. 497, 502, 464 A.2d 431, 434 (1983). In construing the provisions of the No-fault Act, we should not disregard the clear and unambiguous language of the Act on the pretext that a literal interpretation will frustrate its spirit. Platts v. Government Employees Insurance Co., 301 Pa.Super. 379, 381 n. 2, 447 A.2d 1017, 1018 n. 2 (1982). The Act specifically defines an "owner" to mean "an individual . . . that owns or has title to a motor vehicle or is entitled to the use and possession of a motor vehicle subject to a security interest *438 held by another." Act of July 19, 1974, supra, art. I, § 103, 40 P.S. § 1009.103. It seems clear that Pealer does not come within the parameters of this definition of "owner."
The same issue was considered and discussed by David Shrager in his work entitled The Pennsylvania No-fault Motor Vehicle Insurance Act. He concluded as follows:
This paragraph retains tort liability only for the owner of the unsecured vehicle. Since, under the provisions for security covering the vehicle, only the owner is required to furnish such security, the driver of an unsecured vehicle who is not the owner is not liable in tort under the tort action retained by this paragraph. . . . Thus, an accident victim in such circumstances will rely upon uninsured motorist coverage, which continues to be mandatory, and will in most instances be available under his own insurance policy.
D. Shrager, The Pennsylvania No-fault Motor Vehicle Insurance Act § 2:5.1, at 191 (1979) (emphasis in original).
Appellant argues that if appellee was the thief and had control of the truck on the day of the accident, he was the "de facto" owner because he was holding it out as his own vehicle. As a "de facto owner," appellant contends, Pealer should have purchased insurance coverage for the truck. Although appellant's argument equating theft with ownership is ingenious, we must reject it. Not only would it require that we rewrite the legislative definition of "owner," but it would be entirely impractical to interpret the statute to require a thief to obtain insurance coverage for a stolen vehicle. The no-fault statute, moreover, made provision for an innocent victim of a collision involving a stolen vehicle. If the innocent, injured party is uninsured and no security is applicable to any vehicle involved in the accident, then his basic no-fault benefits will be provided by "the applicable assigned claims plan." Act of July 19, 1974, supra, § 204(a), 40 P.S. § 1009.204(a).
Appellant also asserts reliance upon Section 208(a)(1) of the Act, which provides in part:
*439 Except as provided for assigned claims, a converter of a motor vehicle is ineligible to receive no-fault benefits. . . from any source other than a contract of insurance under which he is an insured, for any injury arising out of the maintenance or use of the converted vehicle.
40 P.S. § 1009.208(a)(1). This section, however, is clearly inapplicable. It provides merely that a converter of a motor vehicle becomes partially ineligible to make a claim for no-fault benefits. The section provides no assistance in construing the section of the statute which abolishes common law tort actions for personal injuries.
Next, appellant directs us to Section 501, which provides:
The obligor obligated to pay basic loss benefits for accidental bodily injury to a person occupying a motor vehicle, the owner of which is uninsured pursuant to this act or to the spouse or relative resident in the household of the owner or registrant of such motor vehicle, shall be entitled to recover all the benefits paid and appropriate loss or adjustment costs incurred from the owner or registrant of such motor vehicle or from his estate. The failure of the person to make payment within thirty days shall be grounds for suspension or revocation of his motor vehicle registration and operator's license.
40 P.S. § 1009.501 (emphasis added). This provision is also not applicable to the facts of the case sub judice. It gives an insurer a right of indemnification against the owner of an unsecured vehicle when the insurer has been required to pay basic loss benefits to an occupant of the derelict owner's vehicle or to a spouse or relative residing in the household of that owner. Appellant in this case is not an obligor under the Act. Therefore, he has no standing to invoke Section 501. The defendant, moreover, is not the owner of the uninsured motor vehicle. Finally, the party injured was not an occupant of the motor vehicle of an uninsured owner. The injured person was driving his father's vehicle, which was an insured vehicle. For all these reasons, therefore, Section 501 has no application to this case.
*440 We are told that in reality this action is controlled by appellant's insurance carrier, which provided uninsured motorist coverage and is now subrogated to the rights of its insured. It is argued that when an insurer has been required to pay its insured's claim for uninsured motorist benefits, it is then entitled to recompense, through subrogation, from the motorist who tortiously caused the injuries. It is axiomatic, however, that the rights of the subrogee can rise no higher than the rights of the subrogor. 35 P.L.E. Subrogation § 6 (1961). A subrogee is, generally speaking, placed in the precise position of the one to whose rights he has been subrogated. Fell v. Johnston, 154 Pa.Super. 470, 474, 36 A.2d 227, 229 (1944). Therefore, a subrogee cannot recover damages unless his subrogor has a legally cognizable cause of action against the third party. Commonwealth ex rel. Willow Highlands Co. v. Maryland Casualty Co., 369 Pa. 300, 306, 85 A.2d 83, 87 (1952). Because appellant in this case has no common law tort action for personal injuries against appellee, it follows that his subrogee, similarly, cannot maintain such an action.
The order dismissing the first count of appellant's complaint is affirmed. The order dismissing the second count of the complaint is reversed, and the cause of action therein stated is remanded for further proceedings. Jurisdiction is not retained.
NOTES
[1] Although not alleged in the complaint, we are told by the parties that the truck was stolen.
[2] Act of July 19, 1974, P.L. 489, No. 176, 40 P.S. § 1009.101 et seq., repealed by Act of February 12, 1984, P.L. 26, No. 11, § 8(a), effective October 1, 1984. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265799/ | 69 F. Supp. 347 (1946)
STATE OF NEBRASKA
v.
NORTHWESTERN ENGINEERING CO. et al.
Civil Action No. 158.
District Court, D. Nebraska, North Platte Division.
June 17, 1946.
*348 Walter R. Johnson, Atty. Gen., for State of Nebraska.
Yale C. Holland, of Kennedy, Holland, DeLacy & Svoboda, of Omaha, Neb., and H. R. Hanley, of Rapid City, S. D., for defendants.
DONOHOE, District Judge.
This is an action commenced by the State of Nebraska in the District Court of Cheyenne County, Nebraska, to recover for the allegedly negligent acts of the defendants, who are residents and citizens of the State of South Dakota.
Two causes of action are pleaded in the petition. The plaintiff, for its first cause of action, alleges that on June 13, 1945, one Loyal M. Zink was a patrolman in the Nebraska Safety Patrol, and an employee of the plaintiff. It is alleged that on that day, the defendant, Cyrus F. Colvin, while acting as a truck driver for the defendant Northwestern Engineering Company, operated the defendants' truck in such a negligent manner as to collide with an automobile driven by Loyal M. Zink, and that, as a result of the collision, Zink was killed.
In the second cause of action the plaintiff seeks to recover from the defendants the value of the automobile which was being operated by Zink at the time of the collision, it being alleged that such automobile was the property of the plaintiff, and that it was completely destroyed in the accident.
The action has been removed to the Federal District Court by the defendants on the grounds of diversity of citizenship, and the plaintiff has filed a Motion to Remand the action to the state court.
The question, quoting from the plaintiff's brief in support of the motion, is: "May an action commenced in a state court by the state be removed to a United States Court on the grounds of diversity of citizenship?"
It is the general rule that a state is not a "citizen" within the contemplation *349 of the provisions of the Removal Act, 28 U.S.C.A. § 71, permitting removal of suits from a state court to a United States District Court on the grounds of diversity of citizenship. Stone v. State of South Carolina, 117 U.S. 430, 6 S. Ct. 799, 29 L. Ed. 962; County of Upshur v. Rich, 135 U.S. 467, 10 S. Ct. 651, 34 L. Ed. 196; Postal Telegraph Cable Co. v. State of Alabama, 155 U.S. 482, 15 S. Ct. 192, 39 L. Ed. 231; State of Missouri v. Homesteaders Life Association, 8 Cir., 90 F.2d 543. But this general rule must be understood in the light of the facts of the cases wherein it has been announced.
Whether an action commenced in a state court by a state is removable by the defendant on the grounds of diversity of citizenship depends upon whether the state is the real party in interest or only a nominal party. See Title Guaranty & Surety Co. of Scranton, Pa. v. State of Idaho, for the use of Allen, 240 U.S. 136, 36 S. Ct. 345, 60 L. Ed. 566. If the state is the real party in interest, the defendant may not remove the action on the grounds of diversity of citizenship. State of Iowa ex rel Welty v. Northwestern Light & Power Co., D.C. Iowa, 18 F. Supp. 303; State of Louisiana v. Texas Co., D.C.La., 38 F. Supp. 860. See also note in 147 A.L.R. 786, and cases there cited commencing at 798.
If, on the other hand, the state is only a nominal party, and not the real party in interest, the action may be removed by the defendant upon the grounds of diversity of citizenship; depending, however, upon whether there is diversity as between the real party in interest and the defendant. State of Maryland v. Baldwin, 112 U.S. 490, 5 S. Ct. 278, 28 L. Ed. 822; Missouri, K. & T. R. Co. v. Missouri R. R. & Warehouse Commissioners, 183 U.S. 53, 22 S. Ct. 18, 46 L. Ed. 78; Ex parte State of Nebraska, 209 U.S. 436, 28 S. Ct. 581, 52 L. Ed. 876.
In other words, it is the citizenship of the real, as distinguished from the nominal, party which governs the matter of removability in diversity cases. In re Water Right of Utah Construction Co., D.C.Idaho, 30 F.2d 436; Bernblum v. Travelers Ins. Co., D.C.Mo., 9 F. Supp. 34 and cases there cited.
In Black's Dillon on Removal of Causes, at p. 136, it is said:
"When the plaintiff on the record has no real interest in the subject matter of the controversy, and can derive no advantage from the judgment, but the suit is required to be brought in his name because he holds the formal right to sue, although the action is really prosecuted for the benefit of another, the record plaintiff is only a nominal party, whose citizenship will not affect the right of removal. Such right will depend upon the relative citizenship of the real party in interest and the defendant."
In Ex parte State of Nebraska, 209 U.S. 436, 28 S. Ct. 581, 584, 52 L. Ed. 876, the State of Nebraska, its Attorney General, the Nebraska State Railway Commission, and certain individuals, as members of the Commission, brought an action in a Nebraska court against the Chicago, Burlington & Quincy Railway Company to enjoin the company from charging more for the transportation of freight and passengers within the state of Nebraska than the rates fixed for such transportation in certain Acts of the State Legislature. The company filed a petition for removal of the action to the Circuit Court on the ground that the suit was a controversy wholly between citizens of different states. Plaintiffs filed a motion to remand the case to the Supreme Court of Nebraska, and this motion was overruled by the Circuit Court.
The Supreme Court, dismissing a petition for a Writ of Mandamus to compel the remanding of the action to the Supreme Court of Nebraska, said:
"We must add that the mere presence on the record of the state as a party plaintiff will not defeat the jurisdiction of the Federal court when it appears that the state has no real interest in the controversy. And in the present case the circuit court was not bound to adjudicate the question merely by an inspection of the nominal parties to the record, for the mere presence of the state of Nebraska as a party plaintiff was not of itself sufficient necessarily to defeat the jurisdiction of *350 the Federal court. It became, and was, the duty of the circuit court to determine the question whether the state of Nebraska was an actual party plaintiff in the present suit, and to determine that question by consideration of the nature of the case as presented by the whole record, and not `by a reference to the nominal parties to the record.'"
It was further said:
"The question whether the state of Nebraska is the real party plaintiff must be determined from the consideration of the nature of the case as disclosed by the record. If the nature of the case is such that the state of Nebraska is the real party plaintiff, the Federal court will so decide for all purposes of jurisdiction, even though the state were not named as a party plaintiff. If the nature of the case is such that the state is not a real party plaintiff, the Federal court will so decide for the purposes of jurisdiction, even though the state is named nominally as a party plaintiff.
"The question whether such a case as this is one in which the state is the real party in interest and the real party plaintiff was determined by this court in Missouri, Kansas & Texas Railway Co. v. Missouri R. [R.] & Warehouse Commissioners, 183 U.S. 53, 46 L. Ed. 78, 22 S. Ct. 18, where the only question presented was whether, in a suit brought to enjoin a railroad company from charging greater rates within the State of Missouri than those fixed by state authority, the state of Missouri was the real party plaintiff. The state was not joined as a party plaintiff, but the question had to be determined, not by a view of the nominal parties to the record, but from the consideration of the nature of the case as shown by the whole record. The defendant company presented to the state court a petition for removal, which was denied. The supreme court of the state held that it was proper to go behind the face of the record and inquire who was the real party plaintiff; and, after making such examination, decided that the state was the real party plaintiff, and that the Federal court had no jurisdiction on the removal. The case was brought to this court for a review of the decision of the supreme court of Missouri, and this court recognizing the rule that a mere inspection of the parties named as the plaintiffs was not conclusive, examined the record and the nature of the case, and, in an opinion rendered by Mr. Justice Brewer held that the nature of the case was such that the state of Missouri was not a real party in interest and not a real party plaintiff."
That the name "State of Nebraska" appears in the title of the instant action is not controlling in determining whether this is a suit between citizens of different states, since a federal court will look behind and through the nominal parties on the record to ascertain who are the real parties. Likewise, the mere fact that the state may have some beneficial interest in the ultimate recovery in the action does not, of itself, make the state a party to the action, so as to prevent removal. State of Missouri v. Homesteaders Life Association, 8 Cir., 90 F.2d 543.
What is the status of the State of Nebraska as the plaintiff in this case?
The status of the state as a party to the action will, for the purpose of considering the right of removal, be determined by the law of the forum state. Thompson v. Railroad Companies, 6 Wall. 134, 18 L. Ed. 765; Turk v. Illinois Central Railroad Co., 6 Cir., 218 F. 315.
It is the contention of the state that, by reason of the provisions of the Workmen's Compensation Law of Nebraska, R.S. '43, Sec. 48-118, relating to actions against third parties for the death or injury of an employee, the state as an employer is authorized to maintain this action to recover compensation payments which it is bound to pay to the dependents of Loyal M. Zink and, further, to recover damages suffered by these dependents.
R.S.1943, Sec. 48-118, provides:
"48-118. Employer; liability of third person; subrogation. Where a third person is liable to the employee or to the dependents, for the injury or death, the employer shall be subrogated to the right of the employee or to the dependents against such third person, and the recovery by such employer shall not be limited to the amount payable as compensation to such employee *351 or dependents, but such employer may recover any amount which such employee or his dependents should have been entitled to recover. Any recovery by the employer against such third person, in excess of the compensation paid by the employer after deducting the expenses of making such recovery, shall be paid forthwith to the employee or to the dependents, and shall be treated as an advance payment by the employer, on account of any future installments of compensation; Provided, however, that nothing in this section or act shall be construed to deny the right of an injured employee or of his personal representative to bring suit against such third person in his own name or in the name of the personal representative based upon such liability, but in such event an employer having paid or paying compensation to such employee or his dependents shall be made a party to the suit for the purpose of reimbursement, under the above provided right of subrogation, of any compensation paid."
The state argues that by virtue of the above provisions of the Workmen's Compensation Law, it, as the employer, is the real party in interest with respect to the first cause of action. In support of its position, the state cites O'Donnell v. Baker Ice Machine Co., 114 Neb. 9, 205 N.W. 561, holding that under the Workmen's Compensation Law, as it then existed, the right to bring an action against a third party for injuries sustained by an employee rests with the employer until such time as the employee can allege and prove that his employer has neglected or refused to institute the action.
This argument is not convincing and carries no weight under the law of Nebraska as it existed at the time of the occurrence of the accident giving rise to the present action. In the first place, the O'Donnell case was decided in 1925, under Section 18 of the Workmen's Compensation Act, being Section 3041 of the Compiled Statutes of 1922. In 1929 this section was amended by adding the provision that nothing in this section or act shall be construed to deny the right of an injured employee, or of his personal representative, to bring suit against a third person. Laws of Nebraska, 1929, Chapter 135. As said by Justice Paine in Goeres v. Goeres et al., 124 Neb. 720, 248 N.W. 75, the amendment was added to avoid the ruling in the O'Donnell case.
There have been at least two decisions by the Supreme Court of Nebraska which are squarely against the contentions of the State of Nebraska in the instant case. Luckey v. Union Pacific Railroad Co. et al., 117 Neb. 85, 219 N.W. 802, 804, and Goeres v. Goeres et al., 124 Neb. 720, 248 N.W. 75.
In the Luckey case, which was decided in 1928, a deceased employee's administrator, as the plaintiff, brought an action under Lord Campbell's Act to recover damages for alleged negligence resulting in the employee's death. The defendants were the employer, its insurance carrier, a third party and the third party's employee. The third party and its employee demurred to the petition on the ground that the action was not prosecuted in the name of the real party in interest, and contended that the administrator was not the proper party plaintiff; also that the employer and its insurance carrier, if proper parties, should have been parties plaintiff. The Supreme Court, after quoting Lord Campbell's Act, and the section of the Workmen's Compensation Act relating to an employer's action against third persons and it may be observed that this section was then in substantially identical language with R.S. '43, Sec. 48-118, except for the provision added in 1929 said:
"For the purpose of determining the proper party plaintiff in this particular instance the provision of Lord Campbell's Act authorizing decedent's personal representative to bring the action and the provision of the Workmen's Compensation Law relating to subrogation should be construed together with a view to giving effect to both."
After distinguishing cases involving the proper party plaintiff, where an employee is injured, the court said:
"The present appeal presents an entirely different question who is the proper plaintiff where the employee loses his life through the negligence of a third person? *352 The administrator of the deceased employee's estate acted in that capacity under Lord Campbell's Act, a Nebraska statute authorizing an action against a wrongdoer for negligence resulting in the death of another person. That act specifically provides that:
"`It shall be brought by and in the name of his personal representative for the exclusive benefit of the widow or widower and next of kin.'
"No one else is authorized to bring the action. Wilson v. Bumstead, 12 Neb. 1, 10 N.W. 411. The administrator is the `personal representative.' Murphy v. Willow Springs Brewing Co., 81 Neb. 223, 115 N.W. 761. The Workmen's Compensation Law does not create a new, or any, cause of action against a wrongdoer for negligence resulting in the death of another person nor authorize the widow nor the dependents nor the administrator nor the employer to bring or prosecute such an action. That authority is found alone in Lord Campbell's Act. The following rules designate the proper plaintiff under each of the statutory provisions construed:
"Where the negligence of a third person results in the death of an employee the administrator is the proper plaintiff in an action for damages under Lord Campbell's Act.
"Where the negligence of a third person results in personal injury to, but not in the death of, the employee, the employer, if liable for compensation, is the proper plaintiff under the Workmen's Compensation Law, but in the event of his failure to exercise the right the employee may sue in his own name for damages.
"Thus construed there is between the provisions under consideration no repugnance to repeal or modify by implication the authority of the administrator under the earlier statute to act as plaintiff in an action against a wrongdoer or third person for negligently causing the death of another person or employee."
While the court does not, at this time, feel that it is called upon to express an opinion on the matter, the attention of counsel is specifically directed to that part of the foregoing quotation stating that:
"The Workmen's Compensation Law does not create a new, or any, cause of action against a wrongdoer for negligence resulting in the death of another person nor authorize the widow nor the dependents nor the administrator nor the employer to bring or prosecute such an action. That authority is found alone in Lord Campbell's Act."
In the Goeres case [124 Neb. 720, 248 N.W. 77], decided in 1933, an employee's widow, as administratrix, brought an action under Lord Campbell's Act to recover damages for the death of her husband, who had been killed in an automobile accident. The defendant was the decedent's brother, and it appears from the language of the Supreme Court's opinion that at the time of the accident the decedent and the defendant were acting as volunteer members of the fire department in the village of Osmond, Nebraska. The village carried insurance on its employees, and the widow was being paid weekly compensation by the insurance carrier. Prior to her appointment as administratrix, the widow had entered into a written contract with the village and the carrier providing that the widow, as administratrix, should commence the action, and the contract provided that she should receive only 10% of the amount recovered, and that the balance should go to the village and the carrier.
The defendant contended that the widow, as administratrix, had no right to bring the action because she was not the real party in interest.
In rejecting this contention, the Supreme Court said:
"The question raised has been before this court several times in various forms. It has been held that the Workmen's Compensation Law does not create a cause of action against a wrongdoer for negligently causing the death of another person, and that an action against a wrongdoer for causing such death must be brought in the name of the personal representative. Luckey v. Union Pac. R. Co., 117 Neb. 85, 219 N.W. 802.
"In the case at bar, the law of Nebraska required this action to be brought by the administratrix under the Lord Campbell's *353 Act, while the provisions of the Compensation Act, relating to the interest of the employer therein, merely related to the distribution of the proceeds. The ruling of the trial court that she had a right to bring the action was correct."
Under Nebraska law, the real party in interest is the person entitled to the avails of the suit. Gregory v. Pribbeno, 143 Neb. 379, 9 N.W.2d 485; Uptegrove v. Metropolitan Life Ins. Co. of New York, 145 Neb. 51, 15 N.W.2d 220.
The foregoing decisions compel the conclusion that the administratrix of the estate of Loyal M. Zink is the real party in interest, or the real plaintiff, as respects the first cause of action. That the state, as the decedent's employer, may have some interest in the distribution of the proceeds of recovery, if any, by reason of its statutory right of subrogation under the Workmen's Compensation Law to the extent of compensation paid does not alter this conclusion. See Goeres v. Goeres, supra.
It is well settled that a state statute, such as R.S. '43, Sec. 48-118, may not be so construed as to take away or abridge the right of removal if that right otherwise exists. Hess v. Reynolds, 113 U.S. 73, 5 S. Ct. 377, 28 L. Ed. 927; Courtney v. Pradt, 196 U.S. 89, 25 S. Ct. 208, 49 L. Ed. 398.
The petition for removal alleges, and the plaintiff does not deny, that Wilda Zink, the widow of Loyal M. Zink, is the duly appointed, qualified and acting administratrix of the estate of Loyal M. Zink under Letters of Administration issued to her by the County Court of Cheyenne County, Nebraska, prior to the commencement of the present action. It is further alleged, and not denied, that Wilda Zink, administratrix, and the decedent's two minor children, were residents and citizens of the State of Nebraska at the time of the filing of this suit, and that they still are citizens and residents of this state.
The plaintiff urgently contends that the petition for removal is insufficient for failure to allege the citizenship of the state of Nebraska, and that such citizenship does not otherwise appear from the record. Since, as previously pointed out in this memorandum, it is the citizenship of the real parties in interest which governs the removability of causes on the grounds of diversity of citizenship, this omission is not fatal to the right of removal in the present case.
Under the foregoing authorities, and examining the entire record for the purpose of determining the nature of the case, and the real parties in interest, as we are instructed to do in Ex parte State of Nebraska, it is concluded that the first cause of action is removable by the defendants on the grounds of diversity of citizenship.
A contrary result must be reached with respect to the second cause of action. Clearly, the State of Nebraska is the real party in interest to an action for the recovery of the value of its automobile.
While both causes of action may have grown out of the same accident, they are separate causes of action, each involving different parties and a different subject matter. Accordingly, jurisdiction over the first cause of action will be retained, and the second cause of action will be remanded. Tillman v. Russo Asiatic Bank, 2 Cir., 51 F.2d 1023, 80 A.L.R. 1368.
The motion to remand is overruled as to the first cause of action, and sustained as to the second cause of action. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265803/ | 69 F. Supp. 143 (1946)
UNITED STATES
v.
WASHINGTON et al.
Cr. No. 21021.
District Court, D. Maryland.
December 20, 1946.
*144 Bernard J. Flynn, U. S. Atty., and James B. Murphy, Asst. U. S. Atty., both of Baltimore, Md., for plaintiff.
Ward B. Coe, Jr., of Baltimore, Md., for defendant.
CHESNUT, District Judge.
The question in this criminal case is whether there was sufficient independent evidence of the corpus delicti to corroborate the extra judicial confessions of the defendants. The defendants are jointly charged under 18 U.S.C.A. § 408, with the transportation from Oxford, Pennsylvania, to Waterloo, Maryland of a stolen automobile, knowing the same to have been stolen. In accordance with the now applicable procedure they waived an indictment and agreed to prosecution by information only. Upon their arraignment, being advised of their rights to have counsel appointed to defend them in view of their inability to procure their own counsel, the court appointed Mr. Ward B. Coe, Jr., a member of the Baltimore Bar, as their counsel. They and he as their counsel, and the Assistant United States Attorney, waived a jury trial and requested that the case be tried by the court without a jury. The court deemed the request proper and the case was so tried.
The evidence introduced by the Government (none being offered by the defendants) was the following. The automobile bearing Pennsylvania license plates No. G 812, belonged to one Twyford, a resident of Oxford, Pennsylvania, who there owned a gasoline station. The car was parked by its owner near his place of business about 7 P.M. October 28, 1946. It was taken from there without his permission or knowledge some time thereafter and was found by Maryland State Police, parked without lights, on the Baltimore-Washington Boulevard near Waterloo, Maryland, headed toward Washington, about 1 A.M. on October 29, 1946. It was first observed by Officer Hart of the Maryland State Police as he was proceeding north on the Washington Boulevard *145 in his automobile with a prisoner. He noted a young colored man seated in the automobile and another standing beside it. After passing it, going in a northerly direction, he turned his car and went back toward it. When closely approaching it he noted that both these men were then standing beside the automobile. He turned his police spot light upon them and obtained a good view of them. One was conspicuously dressed. Both men fled, running into an adjoining field. The officer was unable to pursue them in view of his then custody of a prisoner. However, he shortly thereafter telephoned a description of the two men to a nearby police station, and a few hours thereafter, about 9 A.M. another member of the Maryland State Police Force, acting on the description, arrested the two defendants whom he found near Waterloo, Maryland, walking toward Washington on the main highway. The latter officer questioned these two men and was informed by them that they were from Philadelphia and had been hitch-hiking rides toward the south, and had just recently alighted from a truck which had given them a ride. They were arrested on suspicion and taken to the nearby State Police Station. Two agents of the Federal Bureau of Investigation were notified and shortly thereafter interviewed the defendants and took from them signed written statements. These statements were offered and received in evidence without objection. On their face each shows that the statement was voluntarily made after the defendants were warned of their constitutional rights.
The substance of Washington's statement was that he had known Streeter for about two years in Philadelphia and that both of them had been employed for some weeks in a factory in Brighton, New Jersey. They had returned to Philadelphia on October 22, 1946, and after staying there visiting friends for some days, they decided to go to Amarillo, Texas, and started on their journey early on October 28, 1946, hitch-hiking their way by various trucks to Oxford, Pennsylvania. There they spent several hours in a restaurant, and started walking on Highway No. 1 toward the South. Shortly they came to the gas station and decided to rest themselves in the automobile referred to. At first they went to sleep, Washington in the front seat and Streeter in the rear seat. After a short time they woke up and noticed the ignition key in the car. Washington then drove the car from Oxford, Pennsylvania, to Baltimore, Maryland. They asked no one's permission "We just took this car. Streeter slept most of the way and now and then he would awaken and show me directions. Before we got to Baltimore, Maryland, Streeter rode with me in the front seat of this automobile we had taken." The automobile stopped running near Waterloo on the Baltimore-Washington Highway. They pushed it partly off the traveled portion of the highway. When the police officer approached they ran away through a field and woods, came to a railroad track, found a box car, and slept in it for the remainder of the night. The next morning they returned to the highway and continued walking toward Washington when they were arrested.
Streeter's statement is substantially similar except that he said that when they climbed into the automobile at Oxford he went to sleep on the back seat, and "a short while later Robert woke me up and told me that the keys were in the car. He then suggested we take the car. I did not say `yes' or `no', but went back to sleep. The next thing I knew we were riding and I went back to sleep. The next thing I knew we were in Baltimore, Maryland".
At the conclusion of the evidence counsel for the defendants moved for a directed verdict in their favor or for a judgment of acquittal. The case was then argued orally by counsel and taken under consideration. Subsequently both counsel have furnished more extended briefs on the law and I have made a further independent examination of the subject.
The defendants' contention is not that the confessions were improperly admitted in evidence, but as the confessions were extrajudicial, there was no sufficient independent evidence offered by the Government to corroborate the confessions. It is admitted that the confession of Washington *146 was voluntary and sufficient to show both elements of the crime that is, (1) interstate transportation of a stolen automobile and (2) knowledge that it was stolen. Some little contention is made that Streeter's confession is not equally sufficient by reason of his sleepy condition. But I do not think this minor contention is substantially sufficient to differentiate the two statements, although each confession is inadmissible against the other defendant. The point, however, that is earnestly urged is that the evidence does not show sufficient corroboration of the corpus delicti.
In criminal cases in the federal courts the admissibility of evidence is now controlled by Rule 26 of the recently adopted Federal Rules of Criminal Procedure, 18 U.S.C.A. following section 687. Rule 26 provides that "The admissibility of evidence and the competency and privileges of witnesses shall be governed, except when an act of Congress or these rules otherwise provide, by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience."
And with respect to the sufficiency of corroboration of a defendant's confession, federal judicial decisions must control. The rule here is now well established that there must be independent evidence of the corpus delicti, but such independent evidence is not required to be so full and complete as to establish unaided the commission of the crime. It is sufficient if the extrinsic circumstances, taken in connection with the defendant's admission, satisfy the jury (or non-jury judge) of the defendant's guilt beyond a reasonable doubt. Jordan v. United States, 4 Cir., 60 F.2d 4, 5, opinion by Circuit Judge Soper, citing Bolland v. United States, 4 Cir., 238 F. 529, 530; Daeche v. United States, 2 Cir., 250 F. 566; Berryman v. United States, 6 Cir., 259 F. 208; Rosenfeld v. United States, 7 Cir., 202 F. 469 and Mangum v. United States, 9 Cir., 289 F. 213. See also the very recent opinion of Circuit Judge Northcott, in Tabor v. United States, 4 Cir., 152 F.2d 254.
The precise meaning of the phrase "corpus delicti" in this context has been the subject of some uncertainty and apparent misunderstanding in some judicial decisions heretofore, but at the present time it is well established, at least by the weight of federal decisions, that here the phrase corpus delicti means that the extrinsic evidence must establish the commission of the crime by somebody, or in other words, that the crime has in fact been committed. It does not mean, as some few decisions have apparently held, that the required corroborative or extrinsic evidence must also show or tend to show that the defendant committed the crime. Wigmore on Evidence, 3d Ed., § 2072; Murray v. United States, 53 App.D.C. 119, 288 F. 1008, 1016; George v. United States, 75 U.S.App.D.C. 197, 125 F.2d 559, 563. The requirement of independent evidence to corroborate the fact that the crime has been committed is, of course, not limited to cases of murder or manslaughter (to which it has particular application) but also includes other crimes as, for instance, the instant charge of interstate transportation of a stolen automobile, knowing it to have been stolen. And, by the weight of the modern judicial opinion in the federal courts the independent evidence must relate to each and all of the several elements of the alleged crime; as, for instance, in the present case, to both the interstate transportation and guilty knowledge by somebody (Forte v. United States, 68 App.D.C. 111, 94 F.2d 236, 127 A.L.R. 1120, a full and learned opinion by Justice Stephens). See also later opinions of the same court upon the same subject, George v. United States, 75 U.S.App.D.C. 197, 125 F.2d 559, 563, and Ercoli v. United States, 76 U.S.App.D.C. 360, 131 F.2d 354. And the independent evidence required may be circumstantial as well as direct. Wigmore on Evidence, 3d Ed., § 2081; Ercoli v. United States, supra, 76 U.S.App.D.C. 360, 131 F.2d page 358.
There is no hard and fast rule with respect to the amount or degree of the independent evidence that is required. That depends upon the nature and circumstances of the particular case. It is desirable that this should be left to the sound judicial discretion. The reason for the *147 rule which requires corroboration of the defendant's confession by independent evidence of the corpus delicti is that otherwise some persons, due to emotional unbalance or other mental instability, may confess the commission of a crime, which in fact has never occurred. Such cases are indeed comparatively rare but there are recorded instances where they have occurred. It is right and proper, on humane considerations, that unjust punishment should not be imposed even though such cases are very unusual. But as they are indeed comparatively rare the degree of corroboration required should not be so exacting as to preclude, on technical grounds, the proper enforcement of the criminal law. The amount of independent corroborating evidence must, therefore, vary with the particular case, having special regard to the seriousness of the crime charged and the possible consequences to the defendant. Obviously there should be required more convincing and satisfactory evidence of the corpus delicti in murder cases than in those involving ordinary theft, a much more frequent offense.
In Daeche v. United States, 2 Cir., 250 F. 566, 571, in an opinion by Judge Learned Hand, it was said: "But such is not the more general rule, which we are free to follow, and under which any corroborating circumstances will serve which in the judge's opinion go to fortify the truth of the confession. Independently they need not establish the truth of the corpus delicti at all, neither beyond a reasonable doubt nor by a preponderance of proof." But from later cases, and especially the Forte case, supra, it is made clear that the independent evidence must at least tend to establish all the necessary elements of the crime charged including that of guilty knowledge.
The precise question in the instant case, therefore, is whether the Government's evidence, independent of the confessions, is reasonably sufficient to show that the automobile was (1) stolen in Pennsylvania; (2) transported into Maryland, (3) by some one (not necessarily these defendants) knowing it to have been stolen. If the independent evidence in this case is sufficient for this purpose, then the ultimate question of guilt or innocence with respect to these particular defendants is whether the whole evidence (including the confessions) establishes their guilt respectively beyond a reasonable doubt. After careful consideration, I have concluded that it does.
It is clear that the car was in fact stolen in Oxford, Pennsylvania, some time after 7 P.M. October 28, 1946. It was next found in the defendants' possession in Maryland about 1 A.M. October 29, 1946. Oxford is in Pennsylvania a few miles north of the Maryland Line on the much traveled automobile Route No. 1 from Philadelphia to Washington. Waterloo, Maryland, is also on the same route and about 75 miles from Oxford, Pennsylvania. The particular automobile was an old model not in good condition and probably not capable of high speed. It must have required at least several hours of travel time to transport it from Oxford, Pennsylvania, to Waterloo, Maryland. We thus have clear extrinsic evidence of two of the essential elements of the corpus delicti, that is, the interstate transportation of a stolen automobile.
The only remaining feature of the corpus delicti, to which the extrinsic evidence must rationally relate, is the scienter or guilty knowledge of the theft accompanying the interstate transportation. With respect to this we have the facts (1) that the defendants were found in possession of the automobile very recently after the theft; (2) that upon discovery of that possession by the police officer they fled from anticipated arrest; and (3) they shortly thereafter were apprehended in the immediate vicinity when they voluntarily stated (long before their subsequent confessions) that they had come from Philadelphia; and (4) there is no evidence or explanation (other than the confessions) tending to show innocence in their possession. The extrinsic evidence in this case, therefore, raises the strong presumption, or at least inference, that they stole the automobile.
It has long been a well established rule of evidence in a criminal charge of larceny that recent possession of stolen goods gives rise to a presumption that the *148 possessor is the thief. Dunlop v. United States, 165 U.S. 486, 502, 17 S. Ct. 375, 41 L. Ed. 799; McNamara v. Henkel, 226 U.S. 520, 524, 525, 33 S. Ct. 146, 57 L. Ed. 330. Some times such evidence has been loosely called a presumption of law, but it is more properly, if a presumption at all, only one of fact. On principle probably it had better be called merely a permissible inference to be drawn by the jury or judge as the case may be. The practical difference between treating it as a presumption of fact or merely an inference is perhaps not very important where a jury has the power to render a general verdict of guilty or not guilty, and particularly would this seem to be so in criminal cases in the State courts of Maryland where, by the Constitution of the State, the jury is made the judge of the law as well as of the facts. And in federal criminal cases where the judge orally instructs the jury with respect to the law, the practical difference, if any, would seem to be simply whether, treating the matter as a presumption of fact, the judge should tell the jury that on the evidence they should, or if an inference, may, find the defendant guilty of the theft. See Wigmore on Evidence, 3d Ed., § 2513; Zoline's Federal Criminal Law and Procedure, § 324. Thus, in the instant case the extrinsic evidence is sufficient to give rise to the presumption of fact, or at least the inference, that the defendants stole the automobile in Oxford, Pennsylvania, and transported it into Maryland, and in doing so, prima facie at least, must have had guilty knowledge of the theft which they themselves had committed.
I am, therefore, forced to the conclusion that the extrinsic evidence is a sufficient corroboration of the required elements of the corpus delicti, and, taken in connection with the defendants' confessions, is sufficient to establish their guilt beyond a reasonable doubt.
Counsel for the defendants relies principally on the case of Forte v. United States, supra. It is probably the strongest case that can be found to support his contention. But I find on a close reading of the whole opinion that it is clearly distinguishable from the instant case. The criminal charge in the Forte case was the same as in the present case, that is interstate transportation of a stolen automobile knowing it to have been stolen. The material facts were that the particular automobile then bearing District of Columbia tags was stolen in Washington, D. C., on July 15, 1935. It was next found in Baltimore, Maryland, on November 3rd following in the defendant's possession. The interval of time was more than three months and the mileage on the car had increased 6500 miles. When found the automobile bore New Jersey tags. The important point of distinction between the two cases is that in the Forte case the possession of the stolen property was not recent. At the trial of the case the United States Attorney advised the court that "the government did not rely on the inference of guilt from possession of stolen property for a conviction in this case." And with respect to this important point the opinion of Justice Stephens (94 F.2d at p. 244) said: "Why the Government made this waiver does not appear conceivably because of Kasle v. United States, 6 Cir., 233 F. 878, 888-890. But with this inference out of the case we see no substantial evidence, independent of the appellant's confession, of guilty knowledge on his part."
In the Forte case, the defendant apparently did not question the sufficiency of the extrinsic evidence to show the fact of interstate transportation of the automobile; but only contended (successfully) that the extrinsic evidence did not show a guilty knowledge of some one in the interstate transportation. In Drew v. United States, 2 Cir., 1928, 27 F.2d 715, involving a similar charge, it was said that recent possession of an automobile stolen in another State was sufficient to raise a presumption not only that the defendant had stolen the automobile but also that he had transported it in interstate commerce. And Wolf v. United States, 7 Cir., 1929, 36 F.2d 450 and Niederluecke v. United States, 8 Cir., 1931, 47 F.2d 888 are to the same effect. But in United States v. Bollenbach, 2 Cir., 1944, 147 F.2d 199, 202, the Second Circuit held that the language of the opinion in the Drew *149 case, supra, was merely a dictum and it was overruled. In that later case, involving a criminal charge of conspiracy for interstate transportation of stolen securities, the trial judge had instructed the jury to the effect that possession of stolen property in another State than that in which it was stolen shortly after the theft raised the presumption that the possessor was the thief, and transported the stolen property in interstate commerce. The Circuit Court disapproved the intrinsic correctness of the instruction but under other circumstances of the case concluded it was not prejudicial. However, on certiorari the Supreme Court, in an opinion by Mr. Justice Frankfurter (with dissent by Mr. Justice Black) 326 U.S. 607, 66 S. Ct. 402, held that the instruction in the particular case was both erroneous and prejudicial.
Factually there would seem to be a difference in the strength of the inference of recent possession of stolen property dependent upon the nature of the subject matter stolen. Thus negotiable securities can be transported in interstate commerce by mail or without the agency of a defendant found in recent possession of them. But the interstate transportation of an automobile obviously requires human agency. And in the circumstances of this case it would certainly seem that the inference from recent possession is intrinsically much stronger than such a presumption or inference in the case of stolen securities. But however that may be, we are not concerned here with the question before the court in the Bollenbach case. There the question was the intrinsic correctness, under somewhat unusual circumstances, of a "last minute" instruction to a then "dead-locked" jury considering a conspiracy case involving in and of itself very critically the ultimate question of guilt or innocence. Here the question is quite different. It is not whether the mere very recent possession of property stolen in another State is, if unexplained, sufficient in itself to warrant conviction of theft and interstate transportation, but only whether such evidence unexplained is sufficient corroboration of the corpus delicti to establish the defendants' guilt when taken in connection with the confessions.
For these reasons I feel obliged to overrule defendants' motion for a directed verdict or judgment of acquittal, and find a verdict of guilty against both defendants. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265809/ | 69 F. Supp. 788 (1947)
HATCH
v.
OOMS, Commissioner of Patents.
DORSEY
v.
SAME.
CARTER
v.
SAME.
Civil Actions Nos. 29517, 29528, 29530.
District Court of the United States for the District of Columbia.
January 23, 1947.
*789 *790 Edgar J. Goodrich, of Washington, D. C., and Albert C. Hirsch, of Pittsburgh, Pa., for petitioner Roswell F. Hatch.
William E. Leahy, of Washington, D. C., for the petitioner Vernon M. Dorsey.
Covington, Burling, Rublee, Acheson & Shorb, Spencer Gordon, and Charles A. Horsky, all of Washington, D. C., for petitioner Henry W. Carter.
Jo. Bailey Brown, of Pittsburgh, Pa., and E. L. Reynolds, of Washington, D. C., for respondent.
MORRIS, Justice.
These proceedings were brought in this Court pursuant to Section 11, Title 35 U. S.C.A., and Rule 95, Title VIII of the Rules of this Court to review Orders Nos. 3937, 3938 and 3939 of Conway P. Coe, Commissioner of Patents, all dated May 18, 1945, disbarring from practice before the United States Patent Office for gross misconduct the petitioners Henry W. Carter, Vernon M. Dorsey and Roswell F. Hatch, respectively. The respondent in these proceedings here is the successor in office to the Commissioner of Patents whose action is sought to be reviewed. Upon motion of each petitioner, the order of disbarment was stayed by orders of this Court entered the 16th day of July 1945 pending review and final determination by this Court. By stipulation Volumes I, II and III of the printed record, containing testimony and printed exhibits, and numerous other exhibits, together with briefs of counsel, transcript of arguments of counsel, a photostat copy of report of Committee on Enrollment and Disbarment, opinion of Commissioner and copy of orders of disbarment were transmitted to this Court in lieu of a formally certified record of the proceedings in the Patent Office. Argument on the petitions for review commenced February 4, 1946, and consumed five days. Prior to arguments briefs for all parties were submitted and subsequent to the arguments a transcript thereof was received by the Court.
The proceedings in the Patent Office were initiated by a rule to show cause, directed to each of the petitioners, which read as follows:
"Whereas it was found by the Supreme Court of the United States in its decision in the case of Hazel-Atlas Glass Company v. Hartford-Empire Company, 1944, 322 U.S. 238, 64 S. Ct. 997, 88 L. Ed. 1250, that fraud was practiced on the United States Patent Office during the prosecution of the patent application of Karl E. Peiler, No. 294792, which matured into patent No. 1,655,391 on January 3, 1928, which fraud consisted in the preparation and presentation to the United States Patent Office of an article entitled `Introduction of Automatic Glass Working Machinery; How Received by Organized Labor,' naming one William P. Clarke as the author, who in fact was not the author of said article, and
"Whereas it appears from said decision and the record of the case before the Supreme Court, and the record before the United States Circuit Court of Appeals, Third Circuit, in the case of Hartford-Empire Company v. Hazel-Atlas Glass Company, 137 F.2d 764, and the record before the District Court, Northern District of Ohio, West. Div., in the case of United States v. Hartford-Empire Company, 46 F. Supp. 541, and the records of the Patent Office, that you participated in the preparation of said article and/or the presentation *791 thereof to the United States Patent Office during the prosecution of said patent application knowing that said article was not written by said William P. Clarke, and with the purpose of deceiving the Patent Office as to the authorship of said article and influencing the action of the Patent Office on said application; and that you thereby perpetrated or participated in the perpetration of a fraud on the United States Patent Office.
"Now therefore, you are hereby ordered to show cause on or before November 9, 1944 why, in view of the above, you should not be suspended or excluded from further practice before the United States Patent Office for gross misconduct.
"You are hereby notified that a hearing on this order to show cause will be accorded to you before the Committee on Enrollment and Disbarment of the United States Patent Office on November 9, 1944 in Room 1035 of the United States Patent Office in the Department of Commerce, 14th and E Streets, N.W., Washington, D.C., beginning at 10:00 A. M. on said date."
In addition to the three petitioners in these proceedings, who were designated as respondents in the proceedings in the Patent Office, there was another respondent, Robson D. Brown, who is now deceased.
A hearing was had before the Committee on Enrollment and Disbarment of the Patent Office, consisting of seven members, such hearing commencing November 21, 1944, and consuming five days with one night session. Each of the respondents were represented by counsel, excepting Mr. Vernon M. Dorsey, who appeared pro se. On March 27, 1945, oral argument was heard by the Committee, with Commissioner Conway P. Coe attending. The Committee, in its report to the Commissioner of Patents, dated April 26, 1945, which discussed much of the evidence in the case and set out many excerpts therefrom, stated (all members agreeing):
"As is clear from what has been stated in this report, it is our carefully considered opinion that the record made before us indubitably and conclusively shows and establishes that the respondents and each of them has been guilty of gross misconduct toward the Patent Office in connection with the so-called Clarke article, the most salient points of said misconduct being: First, the preparation and the presentation of the article to the Patent Office in such manner as to induce the Patent Office officials to believe that the article compared the commercial success of the specific invention of the Peiler application with the commercial success of the Owens machines, whereas, in truth, the comparison was of the commercial success of gob feeding machines in general of which there were several types other than Peiler's with the commercial success of the Owens machines; and, Secondly, the deliberate concealment from the Patent Office of the facts that (a) the so-called Clarke article was prepared by and on behalf of Hartford; (b) that the sponsorship of the article by Clarke and the notation thereon of Clarke's name as author was procured by and on behalf of Hartford, and (c) that the publication of the article in the National Glass Budget was procured by Hartford and on its behalf through Hatch. We hold and believe that in the perpetration of such concealment all of the respondents deliberately collaborated not only with each other but also directly or indirectly with Clarke, and that all of the respondents connived with each other with the intention of misleading and deceiving the officials of the Patent Office as to the true state of the said material facts concerning the connection of Hartford with the preparation and publishing of the article with Clarke's name appearing thereon as the author thereof, when in fact he was not the true author thereof, and all this for the purpose of securing favorable action by the Patent Office with respect to the claims in the Peiler application."
In its recommendation five members recommended disbarment and two members recommended that "respondents be not disbarred perpetually from practice before the Patent Office but that instead respondents and each of them be suspended from practice for a definite period of time, for instance, up to one year." The Commissioner of Patents on May 18, 1945, addressed the following memorandum opinion *792 to all counsel and to Mr. Dorsey, who had appeared pro se:
"An order to show cause why he should not be disbarred from practice before the United States Patent Office was issued against each of the above named respondents. Answers were filed and a hearing had before the Committee on Enrollment and Disbarment of the Patent Office, at which time testimony and exhibits were introduced by the respondents. The Committee has made its report to me and in the report a majority of the Committee has recommended that all of the respondents be disbarred from practice before the Patent Office. A copy of the report is transmitted herewith.
"That a fraud was practiced on the Patent Office, as charged in the orders to show cause, was found by the Supreme Court of the United States in the case of Hazel-Atlas Company v. Hartford-Empire Co., 322 U.S. 238, 64 S. Ct. 997, 88 L. Ed. 1250, which was a suit to set aside the judgment of the Court of Appeals for the Third Circuit sustaining the validity of the Peiler patent No. 1,655,391, which was granted on the Peiler application referred to in the orders to show cause.
"In its Opinion in that case the Supreme Court said:
"`Here even if we consider nothing but Hartford's admission, we find a deliberately planned and carefully executed scheme to defraud not only the Patent Office but the Circuit Court of Appeals.'
"I have given careful consideration to the Committee's report and to the entire record made at the hearing and I am convinced that each of the above named respondents participated in the scheme to defraud the Patent Office, as was found by the Committee, and I approve the recommendation of the majority of the Committee, that each of the respondents be disbarred from further practice before the United States Patent Office. Orders of disbarment have this day been issued."
Each of the petitioners here assigned a great many errors, all of which have been carefully considered. It would enlarge this opinion beyond reasonable limits to undertake to deal separately with each of such assigned errors. I shall undertake to discuss such matters as have been pressed in the briefs and oral arguments which seem to me necessary in the proper disposition on review of these proceedings.
At the outset it is of first importance to make clear the function of this Court in the present proceedings. It is not that of the trier of the facts; it is to review what has been done in the disbarment proceedings and to determine whether or not the petitioners have had a fair hearing after due notice of the charge each was called upon to answer, and whether or not there is substantial evidence to support the action of the Commissioner of Patents.
Each of the petitioners contended that improper consideration was given to the several decisions and records in the cases mentioned in the rules to show cause, in which they were not parties. I am in complete agreement with the proposition that they cannot be found guilty of gross misconduct upon any evidence in any of such cases unless such evidence has been properly admitted in evidence in these proceedings. The critical part of the evidence found in the records of the other cases and introduced into evidence in the present proceedings consists of communications written or received by the several petitioners, and as to such communications it has been conceded that they were written by the persons by whom they purport to have been written, and were received by the persons to whom they were addressed. There is, therefore, no question as to the proper admission of such communications against the writers thereof, or as showing knowledge of the matters therein contained on the part of those who received such communications. Of course, it follows that the trier of the facts could draw reasonable and legitimate inferences from these facts so established.
I furthermore agree with petitioners that conclusions or findings by the courts in the cases mentioned are not a determination of any issue in these proceedings. It was for this reason that I considered the question should be resolved as to whether or not, in view of the recitation by the Commissioner of the findings by the Supreme *793 Court in the case of Hazel-Atlas Co. v. Hartford Empire Co., the Commissioner himself had reached the conclusion that a scheme to defraud the Patent Office existed, or merely relied upon the findings of the Supreme Court that it did. There can be no doubt that the Committee did make a finding to that effect. I therefore, addressed identic questions by letter to counsel for all parties herein, and by their several replies by letter and at a further hearing held October 24, 1946, they stated that in effect the action of the Commissioner of Patents was an implicit approval and adoption of the findings of the Committee, and no further action on his part was necessary to the final disposition of these cases on review.
Application Serial No. 294,792, filed by K. E. Peiler in the Patent Office May 5, 1919, sought a patent for a method of and apparatus for feeding molten glass. This application, with many vicissitudes, delays and numerous interference proceedings finally eventuated in the issuance of patent No. 1,655,391, dated January 3, 1928, to the assignee Hartford Empire Company. One after the other of the patents or alleged prior claims asserted in interference with the Peiler application were acquired by the Hartford Empire Company, and such interferences were terminated, as they were no longer of an adversary nature. The question of patentability, however, remained. Accompanying an amendment, dated October 11, 1926, there was filed, among other things, an article entitled "Introduction of Automatic Glass Working Machinery; How Received by Organized Labor, by William P. Clarke, President, American Flint Glass Workers' Union," which had been published in the National Glass Budget, a trade publication, July 17, 1926. This article undertook to show how automatic and semi-automatic machinery had increasingly displaced skilled workers in the glass industry; how it had been the policy of the union leaders to encourage such workers to acquire skill to operate the machines which were displacing the skills which they had and thus prevent their unemployment. Excerpts from reports of its officers to the Bottle Blowers' Association constitute much of the material of the article. As the reports used the term "Owens or automatic machines" to designate the automatic feeding accomplished by suction of molten glass into the molds and "flowing or pouring devices" to designate all other types of automatic or semi-automatic feeding, the article deals with some emphasis on the difference between flowing or pouring devices and gob feeding. The distinction is stated in the article as follows:
"Instead of employing a stream of glass which collects in the mold until the desired mold charge had accumulated, these new feeders cut off a suspended chunk or gob of glass which was pre-formed during suspension to correspond, to some extent, at least, to the shape of the mold cavity in which it was to be received."
The article states that such gob feeders had been put out by a number of manufacturers, including the Hartford-Fairmont Company, George E. Howard, Tucker and Reeves, W. J. Miller, and others. Excerpts from the reports aboved mentioned, as interpreted by comment in the article and shown by a chart, undertook to show that the production on gob feeders, which commenced in 1917, rose with great acceleration to the close of 1925, whereas production on Owens machines, which commenced in 1905, rose until the middle of 1919 and then leveled off.
The evidence respecting the preparation, publication and filing of the Clarke article is voluminous. Such parts of it as appear to be critical in showing connection of the several petitioners with the preparation of said article, or with the filing thereof, and its purpose are quoted in the report of the Committee and, therefore, need not be set forth in full here. Each petitioner insists that this evidence does not show any wrongful act or intent on his part, and there is much testimony on behalf of petitioners denying any inferences drawn from such evidence that they were guilty of any misconduct in connection with the Clarke article. A discussion and correspondence was had between Brown and Carter in December 1925 with respect to the desirability of having an article describing the revolution produced in the glass business by the plunger gob feeding system. Brown suggested that such an article would be helpful *794 in making a record before the Patent Office in connection with the principal Steimer case and also "in our Peiler plunger case, where we hope to obtain claims covering the broad ideas of keeping suspended mold charges shaped by the action of a plunger." He suggested that Carter write such article. Carter declined, as he did not have firsthand knowledge of the industry until 1921 and then only from the viewpoint of the patent specialist. He suggested that the article be written by Howard, who had written previous articles which were published in one of the glass journals. It is insisted in the testimony by Brown before the Committee that the article which he suggested finally became the Peiler affidavit, which dealt in detail with the various mechanical developments in the glass industry, and which was filed in the Patent Office, and had no reference to the Clarke article which was filed at the same time. In this connection, it is to be noted that Brown was resident patent counsel for Hartford and Carter was an official of the Owens Bottle Company, subsequently the Owens-Illinois Glass Company, which had a plunger licensing agreement with Hartford, whereby it had the right to use Hartford's feeder patents and to share in royalties from licenses.
Hatch, who was employed by Hartford, and had charge of the Invention Department, "which was primarily the contact between the engineers and the patent attorneys, and a number of other duties that went with it," had a conversation "not far from the beginning of 1926 and maybe a little before, or probably a little later" with Brown and secured authority to prepare an article which developed into the Clarke article. Both Hatch and Brown denied that at this time there was any intention to use such article, which was to be based upon reports of the Bottle Blowers' Union, in any patent proceedings. During the preparation of a draft by Hatch, he sought and received information from Carter, who in May 1926 advised the president of his company that Hatch had prepared the article "with the idea of getting it printed under the name of some apparently unprejudiced authority and then calling the attention of the Patent Office Examiner to the article as published in the belief that the examiner will thereby be influenced to a more favorable consideration of Hartford's broad claims." In that memorandum Carter also stated, "Of course, we are equally interested with Hartford in securing these broad claims and, therefore, indirectly interested in getting the article published." The intention of Hatch originally was to submit the article to a Mr. Maloney, President of the Bottle Blowers' Association to sponsor it for publication, but when Mr. Maloney declined on the ground that it might involve him with other glass manufacturers, Hatch sought to secure such sponsorship by Clarke, President of the American Flint Glass Workers' Union. Clarke would not agree unless the Owens Company, which he did not wish to offend, was agreeable thereto. In the memorandum of May 25, 1926, above referred to, Carter advised agreement with the article so that it would be sponsored by Clarke. Clarke was later advised that the Owens Company had no objection, and he agreed to go over the article, make such changes as he thought necessary, and sign it for publication.
Hatch emphatically denies that he had ever told Carter that the article prepared by him was for the purpose stated in Carter's memorandum, and Carter in his testimony admits that he has no recollection that Hatch did so, and probably had the understanding about its purpose which he did from the correspondence which he had originally had with Brown. Hatch did, however, write to Carter on March 30, 1926, in which letter, among other things, he stated that he was enclosing a carbon copy of the article which he had been preparing for publication and:
"The latest idea we have here is to persuade Mr. Maloney, the president of the Bottle Blowers' Association, to sponsor this article. I have become fairly well acquainted with him, and I think there is a reasonable chance that he will do as we wish. Of course, we do not care who assumes the authorship of the article, but we want some one not associated in any way with either of our companies, and whose name would carry some slight weight in the glass trade."
*795 In his letter to Carter of April 19, 1926, Hatch stated, among other things:
"The point I have in mind is that, if I can get the president of the association to publish this, I thought that he should base all of his statements on their printed records, except where such statements had a direct bearing on the particular point which we wished to bring out."
And further in said letter:
"Of course, I think you understand that the whole object of the article is to make an excuse to get the production curves and a few statements in regard to gob feeding into print."
Prior to the time that Maloney was asked to sponsor the article and declined to do so, Hatch had furnished a draft of the article to Dorsey, who was associated with Brown to actively prosecute the Peiler application. This was sometime in April 1926. Dorsey read the article and made only a slight change, probably two words, and returned it to Hatch. Dorsey knew that Hatch intended to ask Maloney to sign the article. Subsequently, he wired Hatch for a copy, to which Hatch replied by letter, stating that Maloney had declined to sign the article, and he had then approached Clarke. Hatch stated in that letter, among other things:
"Mr. Clarke also swallowed the labor bait which I had prepared for him and said he would be glad to revise and publish the article over his own signature if I would get assurance for him that the Owens Company would not be offended. * * *
"Clarke said that he would rewrite the article to a considerable extent, I suspect, and publish it in the Trade Journals. I fear I may have to go out to Toledo again to get Clarke to show some speed in this matter and perhaps to supervise what he publishes. I think he understood just what we want published, but he might unintentionally destroy some of the propaganda which we planned.
"I will see that you get a copy of some Journal in which this article appears when it comes out."
After ascertaining from Maloney that he had no objection to the publication of the article, Clarke informed Hatch by telegram dated July 7, 1926, that he would "sponsor article with very slight alteration and modifications." Clarke signed the article with such slight alteration and modification sometime the next day and handed it to Hatch, who was then in Philadelphia. On July 9, 1926, Hatch wrote to Mr. Kimes, Editor of the National Glass Budget, respecting the publication of this article, in which letter he said, among other things:
"This article is prepared by Wm. P. Clarke, President of the American Glass Workers' Union. * * *
"We would like to have the article appear as soon as possible and I think that Mr. Clarke will not insist on seeing a proof if it is going to take extra time.
"* * * You will understand that we do not want to have any unnecessary connection with this article as it is presented wholly as the statement and opinion of Mr. Clarke. If there will be any expense in connection with this, please let us know what it will be."
Hatch again wrote Mr. Kimes on July 14, 1926, in which he stated, among other things:
"I have taken the matter of the reprints up with Mr. Brown, and we have decided that probably the original publications will carry a little more weight than a reprint. Therefore, we would like to have you send us fifty additional copies, making 100 in all."
Hatch, in his testimony, insists that at no time until a few days before the date last mentioned did he know that the Clarke article was to be filed in the Patent Office; that he did know it then, as Brown had told him that it would be so used, and it was for that reason that he used the language "the original publication will carry more weight than a reprint." He secured a copy with an attached affidavit of Mr. Kimes, dated October 8, 1926, which was forwarded by Brown to Dorsey with a letter transmitting the article and certain affidavits "intended to lay before the Patent Office certain material facts relating to the development of the type of glass feeders to which this application relates, as well as certain facts bearing upon the prior art references." This letter of transmittal to the Patent Office discusses the affidavits *796 which were transmitted with it, and refers to the Clarke article as an "interesting account of the introduction of automatic glass machinery and its reception by labor unions," stating:
"It describes the various steps by which automatic machinery was introduced, the revolution in the art accomplished by the Owens machine, the somewhat temporary effect of flow-feeding devices, and the further revolution in the art produced by the suspended-charge feeders referred to in the Clarke article as `gob feeders.'"
Several excerpts from the Clarke article are quoted, including the distinction made therein between "flowing and pouring devices" and "gob feeding" (already quoted in this opinion), and finally the following one:
"Disregarding, for the present, the first use of machinery in making bottles, and considering only the sudden and alarming introduction of revolutionary devices, the Bottle Blowers' Association has twice been confronted with mechanism which superseded a large amount of hand labor at each time. These crises were, first, the Owens machine, second, by gob feeders.
"At the present time, the bottle production of the country from automatic machinery is produced almost entirely by Owens machines and gob feeders and, as is shown on the chart, practically all of the annual increase in production is being made on gob feeders."
The final paragraph of the letter of transmittal reads:
"The conclusion of the whole matter is that the suspended-charge feeder has accomplished a revolution in the glass art, that it operates on principles not disclosed in the patents of the prior art, and that many of the features contributing to the success of the suspended-charge feeders are set forth in the claims of this case. It is submitted, therefore, that these claims are entitled to favorable consideration, which is respectfully solicited."
This letter of transmittal was signed by Dorsey and filed in the Patent Office October 12, 1926.
In a brief, signed by both Brown and Dorsey, in the Board of Appeals of the United States Patent Office, under the caption "The Last Step Wins and Commercial Success is Persuasive of Invention," an argument is made and excerpts from adjudicated cases quoted on the weight that should be given to commercial success. Then the following comments respecting the Clarke article are made:
"That the appellant's feeders have been a tremendous success and have revolutionized the art from the standpoint of economy is recognized by reluctant witnesses. We call attention to the article by William P. Clarke, President of the Flint Glass Workers' Union (a union whose members have been displaced by the feeders in question), and published in the National Glass Budget for July 17, 1926, which is an exhibit in this case. (See Appendix, page 76.) Clarke in the exhibit in question gives a graph showing the rapid acceptance of suspended-charge feeders which he terms `gob feeders' and stresses the great displacement of manual workers occasioned thereby. Heintzelman, an experienced manufacturer of thirty-five years' experience (See Appendix, pages 69 and 73), states that there have been revolutions in the glass feeding art in those years. The first was the introduction of the Owens' machine before alluded to, and the second was the introduction of appellant's suspended-charge feeders. The graph of Clarke shows how the introduction of the suspended-charge feeders prevented further introduction of Owens' machines."
The Clarke article, which had previously been filed, among other documents, was printed in the appendix to said brief.
On November 4, 1927, the Board of Appeals affirmed the decision of the Examiner and held the claims on appeal unpatentable over prior art references. A motion for rehearing was granted November 11, 1927, and a brief signed by Dorsey was filed December 2, 1927, to which was attached certain documents, including an affidavit of Peiler, swearing back the date of his invention prior to July 22, 1916, date of the application of the Howard patent, an affidavit of William H. Honiss, explaining the delay in the filing of the Peiler application, and an affidavit of Howard, explaining a *797 "disclaimer" in his patent, which had been acquired by Hartford, in which he referred to the use of a plunger in one of the old methods. Thereafter, on December 6, 1927, the Examiner was reversed and the invention held patentable with respect to all but two claims. The patent for the allowed claims issued January 3, 1928, as has already been stated.
All events subsequent to this are to be considered only as they may throw light upon the acts of the petitioners and their intent with respect to the Clarke article up to this point. Such subsequent acts may not in themselves be the basis for any charge of deception on their part practiced upon the Patent Office.
In June following the issuance of the Peiler patent, Hartford sued Hazel-Atlas Glass Company in the District Court for the Western District of Pennsylvania for infringement. In that case the court held that the prior disclosures precluded invention by Peiler of everything but the means by which the operation of the plunger or needle could be changed and adjusted during its operation, a feature which was not in that court's view anticipated by prior disclosures. Thus limited, the court did not consider that Hazel-Atlas had infringed the Peiler patent. While the file wrapper was introduced in evidence in that case, no consideration or comment was made either by counsel or the court of the Clarke article. An appeal was taken by Hartford to the Circuit Court of Appeals for the Third Circuit. In the brief in that appeal by Hartford, the following is stated under the subheading "Commercial Results of This Invention:"
"We shall now point out some of the facts of record as to the commercial results of the invention of the Peiler patent.
* * * * * *
"2. It Broke the Owens Domination. The article by Mr. William Clarke, former President of the Glass Workers' Union (Rec. V 592 et seq.), gives an admirable outline of the effect of the Peiler plunger feeder on the Owens machine business. His chart reproduced opposite this page (Rec. V 602), showing the production curves of the two types of machine, speaks for itself. The Owens production line begins at zero in 1905 and goes to its high point of 12 million gross in 1919. Alongside of it the `gob feed' (suspended charge feed) production curve begins at zero in 1917 and goes to 9 million gross in 1925. The Owens curve practically ceases to rise after 1919, that is, as soon as there was substantially competitive production by the suspended charge or `gob' feeders.
"In fact, the Owens Company itself began the use of the reciprocating plunger feeder in 1920 (Rec. I, 289). It is now an important licensee of the plaintiff's plunger feeders (Rec. I, 237, 289), using them in different plants (Rec. I, 289, 291). The Owens Company, the largest glass producer in the country, was forced `by the hard facts of actual commercial competition' to recognize Peiler's system as a radical advance (Rec. V, 682, 603) [sic]."
The chart shown in the Clarke article is reproduced in the brief, as stated in the foregoing quotation.
While not the counsel who made oral argument on appeal, both Dorsey and Brown were of counsel and signed the brief. This appeal was heard before Circuit Judges Buffington, Woolley and Davis, and decided May 5, 1932. Judge Buffington wrote the opinion for the Court, Judge Woolley writing a dissenting opinion. The majority sustained the broad claims of the Peiler patent and reversed the decision of the District Court. Judge Buffington traced the development of the glass industry, particularly the manufacture of narrow-neck bottle ware, from the hand method using the pontil or punty to gather the molten glass and keep it in suspension by the manipulation of the punty until it was deposited in the mold and sheared by another workman. He used matter contained in the Peiler affidavit and in the Clarke article to show that the first efforts to mechanize the manufacture of such glass ware required a very much higher temperature and fluidity of the glass rather than the lower temperature and viscosity which were characteristic of the hand-punty method. The pouring or flow methods had defects which were, however, largely overcome by the Owens suction method. The Owens machine was so expensive, *798 and licenses to use them were so limited, that all but the largest manufacturers were threatened with extinction and their employees with unemployment. Judge Buffington attributed to Peiler the first and only successful method of employing mechanical means to utilize the characteristics of the glass which it had when used by the hand-punty method. Turning to the machine covered by the patent under consideration, he made the following comment:
"This new machine and its new and differentiating elements were tersely stated in such [Clarke] article as follows: `Instead of employing a stream of glass which collected in the mold until the desired mold charge had accumulated, these new feeders cut off a suspended chunk or gob of glass which was pre-formed during suspension to correspond, to some extent, at least, to the shape of the mold cavity in which it was to be received.'
"We shall later see that in these few words this practical glass blower official summarized the novel characteristics of the machine which is the subject-matter of this suit. And be it observed, he notes the exact differences between Owens and this new machine. Owens uses a stream of flowing glass, which means high heat and great fluidity. The new machine uses a suspended gob, pre-formed during suspension and so pre-formed as to conform to mold shape, all of which means viscosity, nonfluidity, and less heat. It also notes that these things were done while the gob was suspended."
Judge Buffington traces the steps by which, in his opinion, Peiler had arrived at the development of the machine covered by the instant patent. There was first the paddle feeder by which a chunk or gob of viscous glass was forced over a lip of the container and sheared so as to fall in a mold. While this predetermined the quantity of glass constituting the gob, it could not pre-form it to a desired shape corresponding to the mold cavity. This was overcome by having a gob, after it was shoved over the lip of the container, fall into a connected container with a submerged orifice, the flow from such orifice being controlled by a reciprocating plunger which had the effect of pre-forming the gob so as to correspond, to some extent at least, with the cavity of the mold, and later the machine covered by the patent under consideration wherein the paddle was dispensed with, but the submerged orifice and reciprocating plunger retained. Judge Buffington concludes this part of his opinion with the following statement:
"The periodic, separated, individualized mold forms or gobs discharged by this current-intercepted process and its contrast with the continuous feed stream of the earlier art are described by the union official just referred to in language we now repeat and whose keen accuracy will be better appreciated from what has been shown in the intervening part of this opinion. Accordingly we repeat his words: `Instead of employing a stream of glass which collected in the mold until the desired mold charge had accumulated, these new feeders cut off a suspended chunk or gob of glass which was pre-formed during suspension to correspond, to some extent, at least, to the shape of the mold cavity in which it was to be received'."
In addition to the quotations above mentioned, Judge Buffington quoted numerous other excerpts from the Clarke article in his opinion.
Judge Woolley, in his dissenting opinion, made no reference to the Clarke article, but agreed with the District Court that all of the broad claims of Peiler had been anticipated in the prior art. He did agree with the District Court as to the validity of the narrow claim mentioned in discussion of the District Court's opinion.
Shortly after the publication of the Clarke article in the Glass Budget, a Mr. William Wood, now deceased, an attorney representing the interests of the Nivison-Weiskopf Company which was manufacturing certain molten glass feeding machines which the Hartford Company claimed were infringing the Peiler paddle-needle feeder patent and other patents owned by it, wrote Clarke and later called on him for the purpose of getting certain information which he hoped would be useful in suits then pending or threatened. Clarke testified in substance that he told him of Hatch's connection *799 with the article, "but that it was my article." Hatch learned of this visit when he visited Clarke in Toledo on February 21, 1927, and he wrote a memorandum to Brown dated February 26, 1927, in which the following is stated:
"After getting this information, Mr. Clarke told Mr. Wood the whole history of this article, i. e., that I furnished at least some of the information, and that I assisted him in preparing the article. I do not know the exact extent to which Mr. Clarke ascribed the article to me.
"In any event, he told Mr. Wood that he could get additional information by applying to me, and naturally I have heard nothing from Mr. Wood.
"This incident was reported to Mr. Carter of the Owens Bottle Company and to Mr. Brown on February 21, 1927."
Shortly after the decision and opinions in the Hazel-Atlas case on May 5, 1932, J. S. McCarthy called on Clarke and presented a letter of introduction from Mr. Wood. McCarthy sought information respecting the Clarke article and, either on that day or on May 24th when he returned to see Clarke, requested a photostat copy of the original article and an affidavit respecting its authorship. Clarke, in his testimony, stated that he did not like his manner and told him he would not furnish either unless summoned to court, in which event he would tell the truth. About this time Hatch sought to secure a photostat copy of the signed article, which had been returned to Clarke by the Glass Budget, and to secure from him an affidavit. Both of these were given to Hatch on May 24, 1932, in which affidavit Clarke stated that the Clarke article was published by his authority and over his signature; that, before he signed the article and released it for publication, he gave the statements set forth therein careful consideration and knew them to be true; that he signed said article and released it for publication without remuneration in the belief that a correct historical statement of the facts set forth in said article would be of interest to the glass industry. Following this Hatch wrote to Carter on May 28, 1932, as follows:
"Your information on my visit to Toledo has been rather brief, I imagine, and I thought you might like to have a little more detailed report.
"I want to state most emphatically that Mr. Clarke has fully lived up to the statement I made about him, to the effect that he was absolutely honest and trustworthy in every respect. He has been of great assistance to us, and I believe that we are in a most satisfactory position. It does not seem wise to distribute copies of all of the papers I have, or to go into much detail in correspondence, but as you know, everything that I have is at your service if you need it.
"The assistance which you gave me the morning I arrived in Toledo was very useful, and I had to call on Mr. Naylor several times afterward. His assistance, like your own, was quite necessary.
"We are quite indebted to Mr. Clarke. While it is true that he has done nothing beyond what would be expected of any reputable man, nevertheless, without violating any confidence or doing anything of a questionable nature, he might easily have caused us a lot of trouble. This should not be forgotten, and I would like to have a general statement to this effect brought to the personal attention of Mr. Lewis.
"I have a lot of interesting things to tell you the next time I have a chance to talk to you."
On July 15, 1932, Hatch was advised by telegram from Carter that Clarke had failed to be re-elected as president of his union. Hatch wired Clarke of his regret and sought to arrange a meeting with him, which meeting was held in Toledo on July 22, 1932. Hatch, in his testimony, stated that Clarke told him about failing in his reelection, that litigation was pending against him, and that he was in a very serious financial situation and needed financial assistance, which he thought he was entitled to from Hartford in view of work which he had done in the past, and which had extended at intervals from 1925, or earlier, to 1932; that he had been put to a lot of annoyance by the activities of McCarthy; and that he had never received anything for the *800 time put in on the Clarke article. He also stated that one of the reasons for losing the election was due to the union's objection to his having anything to do with Hartford. Hatch stated that he thought there was something in what Clarke said and that he had considerable sympathy for him. Clarke said he needed $10,000 and Hatch told him he thought that was a little bit high, but would take the matter up with his company. He did and was instructed by Brown not to make any commitment to Clarke until Hatch had seen Carter, which Hatch said he did, saying Carter agreed that a substantial amount should be paid to Clarke. Hatch stated that Brown thought Clarke should be paid something, but thought $10,000 was too much and wanted Hatch to see if he "couldn't beat him down some." Hatch finally agreed on $8,000, $500 of which was paid by Hatch to Clarke in New York on August 4, 1932, and the balance of $7500 in Pittsburgh on August 11, 1932. At that time Clarke signed a retainer agreement for a period of five years, giving Hartford the right to his services at an agreed compensation of $25 a day for such days as Clarke "shall at the written directions of Hartford spend in compiling data, making investigations and/or reports and testifying regarding the same." It was provided in said instrument that Clarke should not be called upon or required to render such services at times when it will interfere with other regular employment that he may have. All money was paid to Clarke in cash. The explanation for this is that any payment by check would have resulted in the money being seized by Clarke's creditors. The payments made by Hartford were charged to the accounts which were shared by Owens so that each could pay half. Clarke treated the payments as a gift and so returned them in his income tax return.
Following the decision and opinions in the Hazel-Atlas case on May 5, 1932, several motions were made extending time for motions for rehearing, during which time negotiations were being carried on which resulted in a settlement of that litigation whereby Hazel-Atlas paid to Hartford, in which Owens shared, $1,000,000, and licensing agreements were made. Announcement of this settlement was made through trade papers on or about July 22, 1932. Carter, in his testimony, said that he did not authorize any particular payment of money to Clarke, though the matter had been mentioned to him, and he thought it was right in view of the value which the article had in Judge Buffington's opinion and the settlement which had been made of that suit, which resulted in the payment of $1,000,000, and would result in the payment of several millions more. There is nothing in the evidence that connects Dorsey with the payment of any money to Clarke.
On May 31, 1933, Hartford instituted a suit against Shawkee Manufacturing Company for infringement, which resulted in a decision in favor of Hartford under the ruling in the Hazel-Atlas case. During the pendency of this case on appeal certain communications were sent to Judge Buffington by counsel for Shawkee, showing by letters from Hatch to the National Glass Budget and by the National Glass Budget to Clarke that the Clarke article had been published at the "instigation" of Hartford. Letters were also written to Judge Buffington by counsel for Hartford, who took the position then, as counsel for petitioners do in the present proceedings, that all statements in the Clarke article are true and that, therefore, no fraud had been committed by the use of the Clarke article in the Patent Office or before the Court. Numerous petitions were filed by Shawkee for leave to file various amendments and bills of review, all of which were denied, and petitions for certiorari were likewise denied.
A suit by the Government against the Hartford Empire Company, Owens Illinois Glass Company, Hazel-Atlas Glass Company, and several other glass companies, charging violation of the Sherman Anti-Trust Act, as amended, 15 U.S.C.A. §§ 1-7, 15 note, was commenced on December 11, 1939. During the course of that trial, much, if not substantially all, of the documentary evidence upon which the respondent in these proceedings rely first became known or available to the Patent Office. While all of the petitioners herein gave evidence in that case, either by testimony or affidavit, none of them were parties, and, of course, *801 as has been said, are not bound by the findings of fact or conclusions of law made therein. The decision in that case was rendered August 25, 1942, adverse to the defendants, which was affirmed on appeal by the Supreme Court January 8, 1945.
Predicated upon information and evidence which had been made available during the trial of the anti-trust suit, Shawkee, on October 24, 1941, and Hazel-Atlas, on November 19, 1941, filed petitions in the Circuit Court of Appeals for leave to file bills of review. Such petitions, as amended, asking the Circuit Court of Appeals to set aside their judgments on the ground of fraud, were denied, Judge Biggs dissenting. The Supreme Court on certiorari, May 15, 1944, reversed the action of the Circuit Court of Appeals in the Hazel-Atlas case, and directed that Court to set aside its judgment of May 5, 1932. Action of similar effect was taken by the Supreme Court in the case of Shawkee Mfg. Co. v. Hartford-Empire Co., 322 U.S. 271, 64 S. Ct. 1014, 88 L. Ed. 1269.
The Commissioner of Patents has determined that the use in the Patent Office of the Clarke article for the purpose of influencing action on the Peiler application, prepared and published, as it was, without disclosing the participation of persons interested in the allowance of Peiler's broad claims in its preparation, was a deception practiced upon the Patent Office. He has further determined that the petitioners, registered practitioners in the Patent Office, did participate in the preparation of said article, its publication or presentation; that they did so knowing that the preparation and publication of the article was for the purpose of influencing action on the Peiler application; and that they did not intend to, and did not, disclose to the Patent Office their participation in such preparation or publication. He has therefore subjected the petitioners to the disciplinary action of disbarment.
Much testimony has been given by the three petitioners and other witnesses on their behalf, including Clarke, to show the lack of knowledge on the part of each petitioner as to the purpose for which the article was prepared, the limited extent of participation in its preparation by the several petitioners, and the absence of any intent to deceive the Patent Office, and also to show that the Patent Office was not deceived by the use of the article. It was for the trier of the facts to determine what weight should be given to such testimony, what facts were established by other evidence properly admitted, and what reasonable inferences were to be drawn from such facts so established. I am of the view that there is ample and substantial evidence properly admitted at the hearing to support the conclusions and action of the Commissioner, as above stated.
It is urged by each of the petitioners that Clarke was in truth the author of the article and therefore there was no misrepresentation, concealment or failure to make disclosures that should have been made to the Patent Office. It is true that Clarke did adopt, "with slight alteration," sign and authorize the publication of the article which had been drafted, with some assistance and advice from Carter and slight assistance from Dorsey, by Hatch. Clarke in his testimony states that he always considered it his article and still does. Petitioners, in effect, say that the article is nonetheless Clarke's because it was initially prepared by Hatch, and particularly so where it was understood that Clarke should have the right to revise it to any extent that he wished. That Clarke would be bound by what he signed and authorized to be published, and that he would be regarded as the author of the article in a setting other than a hearing on the Peiler application in the Patent Office is quite beside the point here. The critical point is that it was material in the consideration of such article to know that it had been substantially prepared and published by those interested in securing the allowance of the broad claims of Peiler. The analogy sought to be made with the signing of a letter by any responsible person or official that had been prepared by some one at his direction or acting for him also misses the same point, because there initial draftsmanship is ordinarily immaterial. It is also urged that Hartford's counsel, without any criticism, could have secured from *802 Clarke a statement in affidavit form of the same matter as contained in his article, even though the three petitioners had actually drafted such affidavit. The two, however, are not the same in the setting here being considered. Every implication concerning an affidavit filed by a party in support of his contentions is that the affiant made his statements at the request and on behalf of the party using his affidavit. Every implication with respect to an article published and signed by a person having no known or revealed connection with a party litigant is exactly to the contrary.
It is insisted that the Clarke article is true and, therefore, that the petitioners are not guilty of any deception in connection therewith. The truth of the statements in the Clarke article was not an issue in these proceedings. It was expressly stated during the course of the hearings that it was not. Even though the article contained no mistakes or false statements, its weight as evidence depends as much upon its origin as its content. To exculpate petitioners from aiding and participating in the preparation of the article to be presented as the article of Clarke without disclosing their connection with its origin, it is not sufficient to say they did not make false statements in the article.
That the Clarke article was used to impress the Patent Office with the commercial success of the Peiler patent is hardly open to serious question. No other use of the article would reasonably account for its preparation, publication and presentation to the Patent Office. It is true that no mention in the article of the Peiler machine and method was made by such name. Nevertheless, it is also true that, with respect to the gob feeders, the commercial success of which was compared in the article to the commercial success of the Owens machine, it was said in the article
"These new feeders cut off a suspended chunk or gob of glass which was preformed during suspension to correspond, to some extent, at least, to the shape of the mold cavity in which it was to be received."
That this was an implicit assimilation of the gob feeders discussed in the Clarke article and their commercial success to the Peiler patent and the machines and methods developed by him seems obvious when read in connection with the purpose of the Peiler plunger or needle feeder, as stated in the Peiler patent and application therefor
"To avoid these defects [existing in the prior art] it is desirable to pre-form the mold charge, before it enters the mold, so that its external contour will closely approximate the interior contour of the mold walls, or at least that portion of the mold which receives the gather."
It is true that in the Clarke article it is stated that
"This new feeder was what is now known as the gob feeder and since that time feeders operating upon this principle have been put out by a number of manufacturers, including the Hartford-Fairmont Company, George E. Howard, Tucker & Reeves, W. J. Miller and others."
It is argued that because the Clarke article mentioned manufacturers other than Hartford, there was no implication that the commercial success pointed out in the article was that of the Peiler machine and method. It is not without significance, however, that the other manufacturers mentioned specifically made machines, the patent rights of which had been acquired by Hartford, and which came within the broad claims made by Peiler. It is urged that the Patent Office could not have been lead to believe that the commercial success shown in the Clarke article related only to the Peiler invention because it was shown in Peiler's affidavit that numerous other gob feeders were in production. It must be remembered, however, that Peiler claimed to be responsible for the invention of the features which made the other machines commercially successful, and indeed stated that several competitors were paying royalties to the assignee of his patent. It does not follow that, because such an argument could be made in good faith, it was legitimate to support such argument by presenting an article in the preparation of which each of the three petitioners had, to some extent at least, participated, without disclosing such participation *803 and that its publication had been procured by the assignee of the Peiler application.
Hatch and Carter insist that they had no part in the presentation of the article to the Patent Office. Dorsey insists that he had no part in its preparation, and he and Carter insist they had no part in its publication. It is claimed, therefore, that, as no conspiracy is charged, no one of them can be held responsible for any act of the others. The essential wrongdoing is taking part either in the preparation of the article, with knowledge that it was to be used in the Patent Office, without disclosure of the part that had been taken in its preparation by any person interested in the allowance of Peiler's claims, or the making use of the article in the Patent Office, with the knowledge that it was prepared by any person interested in the allowance of Peiler's claims, without disclosure of such participation. Any such participation, with such knowledge, was an inexcusable aid to the accomplishment of a scheme to deceive the Patent Office, and was conduct falling far short of the standard which the Commissioner of Pattents had a right to expect of any registered practitioner in the Patent Office. There is ample evidence against each of the petitioners to support a finding of such participation with such knowledge without resort to the rule of evidence that, where a conspiracy is proved, each conspirator is answerable for acts of the others.
It is argued at much length by the petitioners that they were found guilty of misconduct other than that charged, and thus denied due process. With this contention, I cannot agree. In my view, the charge in the rules to show cause is sufficient basis for findings which sustain the action of the Commissioner, and it sufficiently apprised the petitioners of the matters they were called upon to answer.
It is indeed tragic that the severe penalty of disbarment should be visited upon these petitioners for acts of such distance in the past. It is for this Court, however, only to say in this connection whether or not such delay constitutes a bar to the prosecution of the disbarment proceedings, or has so impaired the rights of petitioners to a fair defense that they cannot now be held accountable for their past conduct. I must answer both questions in the negative. The conduct of the petitioners called into question by the disbarment proceedings was not, nor does it appear that by reasonable diligence it could have been, known to officials of the Patent Office prior to the time that information and evidence as to such conduct became available during the trial of the case of United States against Hartford and other glass companies. After such information became known in that case and until the Hazel-Atlas and Shawkee cases were decided by the Supreme Court, the Commissioner of Patents had reasonable justification for not starting proceedings against these petitioners, whose conduct, although they were not parties to such litigation, was under consideration in said cases. No showing has been made that the delay has prejudiced the petitioners in their defense.
It is urged that disbarment of petitioners is too severe even though their conduct should be considered wrongful. That the Commissioner gave consideration to an alternate and milder discipline is quite evident from the fact that a minority of the Committee recommended only suspension. Having determined, after due notice, a fair hearing, and upon substantial evidence, that the petitioners were guilty of gross misconduct, it was in the discretion of the Commissioner to determine the proper disciplinary action in accordance with the applicable statute. I can find no abuse of such discretion here.
After full consideration of all of the contentions made by each of the petitioners, many of which I do not consider necessary to discuss in this memorandum, I am of the opinion that the orders of the Commissioner of Patents here under review should be affirmed. Appropriate orders will be submitted by counsel. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265810/ | 163 Cal. App. 4th 1576 (2008)
In re ADRIAN JOE WHITE on Habeas Corpus.
No. F054327.
Court of Appeals of California, Fifth District. Fifth District
June 18, 2008.
*1578 Adrian Joe White, in pro. per.; and Marcia R. Clark, under appointment by the Court of Appeal, for Petitioner Adrian Joe White.
Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Michael P. Farrell, Assistant Attorney General, and John G. McLean, Deputy Attorney General, for Respondent State of California.
OPINION
GOMES, J.
On the premise that his trial attorney's failure to raise statute of limitations issues constituted ineffective assistance of counsel leading to his prosecution for and conviction of time-barred crimes, Adrian Joe White petitions for a writ of habeas corpus and prays for reversal of the judgment and dismissal with prejudice. We will deny the petition.
PROCEDURAL BACKGROUND
On December 21, 2005, the district attorney filed an information charging White with commission of one count each of forcible rape (Pen. Code, former § 261, subd. (a)(2))[1] and forcible oral copulation (former § 288a, *1579 subd. (c)) and with commission of two counts of sexual penetration by force (former § 289, subd. (a)), all on January 4, 1996. After a jury found him guilty as charged and he admitted a serious felony prior (§ 667, subd. (a)(1)) within the scope of the three strikes law (§§ 667, subds. (b)-(j), 1170.12, subds. (a)-(e)) and four prison term priors (§ 667.5, subd. (b)), the court imposed a 69-year prison sentence. On his appeal, which challenged sentencing only, we affirmed the judgment. (People v. White (Dec. 5, 2007, F050184) [nonpub. opn.].)[2]
On June 26, 2007, while his appeal was still pending, White filed a petition for writ of habeas corpus in the superior court arguing that his trial attorney's failure to raise statute of limitations issues constituted ineffective assistance of counsel. On July 21, 2007, the superior court denied his petition. On December 10, 2007, he filed the instant petition.
On December 24, 2007, we directed the Attorney General to file an informal response to "address, with particularity, which tolling provision, if any, applied to the criminal proceedings which were filed more than six years after the commission of the offenses" and ordered the appointment of counsel to represent petitioner. On January 23, 2008, the Attorney General filed an informal response arguing that prosecution was not time-barred. On February 22, 2008, we issued an order to show cause why the relief petitioner prayed for should not be granted.
On March 12, 2008, the Attorney General filed a letter informing us of his election to treat the informal response already on file as the return to the order to show cause. On April 7, 2008, appointed counsel for petitioner filed a letter informing us that on the basis of her review of the filings and research of the law "the issues have been adequately briefed" and "there is no need for any briefing."
DISCUSSION
On January 4, 1996, the date of commission of all four crimes of which White was convicted, the punishment for each was identical"three, six, or eight years." (Former § 264, subd. (a); former § 288a, subd. (c); former § 289, subd. (a).) Section 800[3] set out the statute of limitations then in effect: *1580 "Except as provided in Section 799,[4] prosecution for an offense punishable by imprisonment in the state prison for eight years or more shall be commenced within six years after commission of the offense." (Added by Stats. 1984, ch. 1270, § 2, p. 4335.) So by the terms of section 800, White's prosecution had to commence no later than January 4, 2002 (six years after commission of the crimes of which he was convicted).
Ultimately, however, section 800 was not the statute to govern the statute of limitations question here. Effective January 1, 2001, a chaptered statute added a new subdivision (h)(1) to former section 803, extending from six years to 10 years the statute of limitations applicable to the crimes of which White was convicted: "Notwithstanding the limitation of time described in Section 800, the limitations period for commencing prosecution for a felony offense described in subparagraph (A) of paragraph (2) of subdivision (a) of [former] Section 290, where the limitations period set forth in Section 800 has not expired as of January 1, 2001, ... shall be 10 years from the commission of the offense...." (Stats. 2000, ch. 235, § 1, underscoring omitted.) The crimes of which White was convicted were listed in former section 290, subdivision (a)(2)(A). (Former § 803, subd. (h)(1).) Effective January 1, 2002, a chaptered statute moved the 10-year statute of limitations from former section 803, subdivision (h)(1) to former section 803, subdivision (i)(1) without textual change. (Stats. 2001, ch. 235, § 1.) The original six-year statute of limitations in section 800 expired three days later on January 4, 2002.
Effective September 29, 2002, a chaptered statute amended former section 803 in ways not relevant here and left intact the 10-year statute of limitations in former section 803, subdivision (i)(1). (Stats. 2002, ch. 1059, § 2, eff. Sept. 29, 2002.) Effective April 3, 2003, a chaptered statute amended former section 803 in ways not relevant here and likewise left intact the 10-year statute of limitations in former section 803, subdivision (i)(1). (Stats. 2003, ch. 2, § 1, eff. Apr. 3, 2003.) Effective January 1, 2004, a chaptered statute amended former section 803 in ways not relevant here and similarly left intact the 10-year statute of limitations in former section 803, subdivision (i)(1). (Stats. 2003, ch. 152, § 1.)
The statutory amendment at issue here took effect January 1, 2005, when a chaptered statute changed the statutory home of the 10-year statute of limitations, without substantive textual change, to a new statuteformer section 801.1 ("Notwithstanding any other limitation of time described in this chapter, prosecution for a felony offense described in subparagraph (A) of *1581 paragraph (2) of subdivision (a) of [former] Section 290 shall be commenced within 10 years after commission of the offense." [Stats. 2004, ch. 368, § 1, italics added])and deleted the 10-year statute of limitations from former section 803, subdivision (i)(1) ("Notwithstanding the limitation of time described in Section 800, the limitations period for commencing prosecution for a felony offense described in subparagraph (A) of paragraph (2) of subdivision (a) of [former] Section 290, where the limitations period set forth in Section 800 has not expired as of January 1, 2001, ... shall be 10 years from the commission of the offense...." [Italics added; compare Stats. 2004, ch. 368, § 2, with Stats. 2000, ch. 235, § 1; Stats. 2001, ch. 235, § 1; Stats. 2002, ch. 1059, § 2, eff. Sept. 29, 2002; Stats. 2003, ch. 2, § 1, eff. Apr. 3, 2003; Stats. 2003, ch. 152, § 1]).
Simultaneously, the same chaptered statute added section 803.6:[5] "(a) If more than one time period described in this chapter applies, the time for commencing an action shall be governed by that period that expires the latest in time. [¶] (b) Any change in the time period for the commencement of prosecution described in this chapter applies to any crime if prosecution for the crime was not barred on the effective date of the change by the statute of limitations in effect immediately prior to the effective date of the change. [¶] (c) This section is declaratory of existing law."
(1) From January 1, 2005 (the effective date of the change in the statutory home of the 10-year statute of limitations), through December 21, 2005 (the date of the filing of the information), section 801.1 was not amended. The sole amendments to former section 803 that took effect during that timeframe left intact the 10-year statute of limitations in former section 801.1. (Stats. 2005, ch. 2, §§ 1-3, eff. Feb. 28, 2005, repealing former § 803 as amended by Stats. 2004, ch. 368, § 2, and as amended by Stats. 2003-2004, 4th Ex. Sess., ch. 2, § 7, eff. Mar. 1, 2005.)
(2) The rule is settled that reenactment by a new statute of an existing statute in substantially the same terms repeals by implication only those provisions of the existing statute omitted by reenactment. (1A Sutherland Statutes and Statutory Construction (6th ed. 2002) § 23.29, p. 556 (Sutherland).) The cases sometimes refer to simultaneous repeal and reenactment (see, e.g., People v. McDaniels (1972) 25 Cal. App. 3d 708, 712 [102 Cal. Rptr. 444]), but the term is a misnomer, for "the courts will construe the unchanged provisions as being continuously in force" (Sutherland, supra, at p. 557, fn. 4.) If a new statute repeals an existing statute and "they both legislate upon the same subject, and in many cases the provisions of the two statutes are similar and almost identical," and "there never has been a moment of time since the passage of the [existing statute] when these similar provisions have *1582 not been in force," "the new act should be construed as a continuation of the old with the modification contained in the new act." (Bear Lake Lake).)
In Bear Lake, the United States Supreme Court relied on an earlier high court case interpreting California statutes as to which "the provisions of the new act took effect simultaneously with the repeal of the old one ..." and holding that "the new one might more properly be said to be substituted in the place of the old one, and to continue in force, with modifications, the provisions of the old act, instead of abrogating or annulling them, and reenacting the same as a new and original act." (Bear Lake, supra, 164 U.S. at p. 12, citing Steamship Company v. Joliffe (1865) 69 U.S. (2 Wall.) 450 [17 L. Ed. 805] (Steamship Company) In express reliance on Bear Lake and Steamship Company, our Supreme Court analyzed the simultaneous repeal of an existing statute and reenactment of similar provisions in a new statute by the same chaptered statute (as here) and held that the "new act must be deemed to be a continuance and modification of the old law, and not the complete abrogation of it..." (Perkins Mfg. Co. v. Clinton Const. Co. (1930) 211 Cal. 228, 230, 236-239 [295 P. 1] (Perkins).)
(3) Later California cases construing analogous statutes consistently rule in harmony with Bear Lake, Steamship Company, and Perkins. (See, e.g., Sekt v. Justice's Court (1945) 26 Cal. 2d 297, 306 [159 P.2d 17] ["`When a statute, although new in form, re-enacts an older statute without substantial change, even though it repeals the older statute, the new statute is but a continuation of the old. There is no break in the continuous operation of the old statute, and no abatement of any of the legal consequences of acts done under the old statute. Especially does this rule apply to the consolidation, revision, or codification of statutes, because, obviously, in such event the intent of the Legislature is to secure clarification, a new arrangement of clauses, and to delete superseded provisions, and not to affect the continuous operation of the law. [¶] This is the rule of decision in California and in the other states, even in the absence of legislative declaration. The cases have clearly established the rule that such restatement, without substantial change, neutralizes any repeal, express or implied. No saving clause or other expression of legislative intent is necessary to accomplish this result. The intent is derived from the fact and purpose of a restatement without change.'" (italics added)]; accord, In re Dapper (1969) 71 Cal. 2d 184, 189 [77 Cal. Rptr. 897, 454 P.2d 905]; People v. Atkinson (1953) 115 Cal. App. 2d 425, 427 [252 P.2d 67].)
(4) Since neither the date of the commission of the offenses nor the date of the filing of the information nor any other question of fact is in dispute, the *1583 issue before us is a question of law. The 10-year statute of limitations applicable to the crimes of which White was convicted was continuously in effect since January 1, 2001. The six-year statute of limitations in section 800 did not expire until January 4, 2002. His prosecution was never time-barred, so constitutional ex post facto clause protection against prosecution with a statute of limitations enacted after a previous statute of limitations period expired is inapplicable. (See Stogner v. California (2003) 539 U.S. 607, 609, 632-633 [156 L. Ed. 2d 544, 123 S. Ct. 2446] (Stogner); U.S. Const., art. I, § 10, cl. 1.) Here, the Legislature did not revive an expired statute of limitations period but simply extended one before expiration. That is constitutionally permissible. (Stogner, supra, at pp. 618-619; People v. Terry (2005) 127 Cal. App. 4th 750, 775-776 [26 Cal. Rptr. 3d 71]; People v. Robertson (2003) 113 Cal. App. 4th 389, 393-394 [6 Cal. Rptr. 3d 363].)
DISPOSITION
The petition for writ of habeas corpus is denied.
Vartabedian, Acting P. J., and Wiseman, J., concurred.
NOTES
[1] Later statutory citations are to the Penal Code. The word "former" before a citation denotes a statute amended after a date relevant here.
[2] On the Attorney General's request, we take judicial notice of the record on appeal. (See In re Wright (2005) 128 Cal. App. 4th 663, 669 [27 Cal. Rptr. 3d 281]; Evid. Code, §§ 452, subd. (d)(1), 459, subd. (a).)
[3] Since taking effect on January 1, 1985, section 800 has never been amended.
[4] Section 799 authorizes prosecution at any time for "an offense punishable by death or by imprisonment in the state prison for life or for life without the possibility of parole, or for the embezzlement of public money."
[5] Since taking effect on January 1, 2005, section 803.6 has never been amended. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265811/ | 69 F. Supp. 679 (1945)
NATIONAL CAMPAIGN COMMITTEE et al.
v.
ROGAN.
Civ. No. 1219.
District Court, S. D. California, Central Division.
January 24, 1945.
*680 *681 John J. Irwin, of Los Angeles, Cal., for plaintiff.
Charles H. Carr, U. S. Atty., and E. H. Mitchell, Asst. U. S. Atty., both of Los Angeles, Cal., for defendant.
HALL, District Judge.
The first question to be determined is whether or not the plaintiffs are exempted completely from the Social Security Act and from the payment of Social Security taxes under the provisions of Section 811 (b) (8) of the Act as it stood before the amendments of August 10, 1939, 42 U.S. C.A. § 1011(b) (8), which amendments did not become effective until January 1, 1940, which date was subsequent to the period here involved.
That section was included in the Act as originally adopted August 14, 1935, and until the amendment above referred to read as follows: "The term employment means any service, of whatever nature, performed within the United States by an employee for his employer, except (8) service performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual."
The government makes the point that interpretations of similar exemption provisions in the Internal Revenue Acts should control here. A reading of Subdivision 8 in that connection discloses that the language was identical with a comparable exemption provision in the Internal Revenue Acts from 1931 to 1932, the respective sections being 231(6) of the Internal Revenue Acts of 1921 and 1924 and 1926, 42 Stat. 227, 26 U.S.C.A. Int.Rev.Acts, pages 38, 183, and Section 103(6) of the Internal Revenue Acts of 1928 and 1932, 26 U.S.C.A. Int.Rev. Acts, pages 372, 507.
In 1934, however, apparently in view of conflicting decisions of the courts, a limiting and qualifying phrase was added to the Internal Revenue statute which becomes significant herein, as will appear. That phrase, thus added to this subdivision of the Internal Revenue Act on May 10, 1934, § 101(6), 26 U.S.C.A.Int.Rev.Acts, page 688, reads as follows, and it is added at the end, a period after the word "individual" being displaced by a comma, in the following language: "* * * and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation."
So that the whole section of the subdivision in the Internal Revenue Acts, omitting the words "service performed", refers to "corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation."
So that the comparable provision in the Internal Revenue Act on the date of the enactment of the Social Security Act on August 14, 1935 (almost one year after the Internal Revenue Act was amended) read as I have just quoted it.
*682 In enacting the Social Security Act that qualifying phrase as previously added to the Internal Revenue Act in 1934 was omitted. Unless the District Courts are to accept as fiat without question, the interpretation, put on acts of Congress by the so-called experts who administer those laws, the omission of that clause, under long established rules of statutory construction, must be given some significance, and the significance is that Congress did not intend that the limitation which they placed in the Internal Revenue Act should apply to the Social Security Act; that is to say, that an educational purpose could include an attempt to influence legislation.
The significance of the omission is heightened by the fact that the Social Security Act was not a hastily or haphazardly conceived and drawn piece of legislation. As indicated by the Committee reports, House Report 615 and Senate Report 628 of the Seventy-Fourth Congress, the Committee on Economic Security, composed of the Secretaries of Labor, Treasury, Agriculture, the Attorney General, and the Federal Relief Administrator, devoted six months to a study of the subject, assisted by a staff of specialists and fourteen advisory groups. I am not warranted in indulging the incredulous presumption that such a group of experts made such an omission without purpose, especially so in view of the omission in the Social Security Act of many other categories which were exempted in the Internal Revenue laws. The exemptions under the comparable provision in the Internal Revenue laws include eighteen different categories of exemption classifications, whereas the comparable provision in the Social Security Act covered only eight categories.
House Report No. 615 of the Seventy-Fourth Congress contained the following language: "Exemption from taxation under this title is also granted in the case of federal, state, or political subdivision employees. Services performed in the employ of religious, charitable, scientific, literary, or educational institutions, no part of the net earnings of which inures to the benefit of any private shareholder or individual, are also exempt from the tax imposed by this title. For the purpose of determining whether such an organization is exempt, the use to which the income is applied is the ultimate test of the exemption rather than the source from which the income is derived. For instance, if a church owns an apartment building from which it derives income which is devoted to religious, charitable, educational, or scientific purposes, it will not be denied the exemption. The organizations which will be exempt from such taxes are churches, schools, colleges, and other educational institutions not operated for private profit, the Y.M.C.A., the Y.W. C.A., the Y.M.H.A., the Salvation Army, and other organizations which are exempt from income tax under Section 101(6) of the Revenue Act of 1932 [1934]."
The government's contention that thus Congress intended the same meaning in the Social Security Act as under Section 101 (6) of the Internal Revenue law must be rejected because Congress did not use the same language in Subdivision 811(b) (6) as it did in 101(6), and a mere reading of the comparable sections as above indicated shows that in the Internal Revenue Act there were eighteen different classifications of exemptions, whereas there were only eight in the Social Security Act, as I have indicated.
That this omission had a meaning and was deliberate is further indicated by the fact that on August 10, 1939, effective January 1, 26 U.S.C.A.Int.Rev.Code, § 1426, the identical language of limitation, the last clause I read at the beginning of these remarks, was added to Subdivision 8 of the Social Security Act. Moreover, in the meanwhile the Internal Revenue Code was adopted on February 10, 1939, at which time Congress did not add the limiting clause to Subdivision 8 of the Social Security Act.
It is argued that the amendment was a "clarifying" amendment and added nothing to the meaning of the Act. If it added nothing to the meaning of the Act, there was no need for clarifying the law.
Furthermore, while committee reports cannot be taken as the token of the intention which exists in the minds of each or all of the very numerous members of both houses of Congress who might vote for a *683 bill, for one reason or another, and not necessarily the reasons stated in the committee report, nevertheless, House Report 728 and Senate Report 734 of the Seventy-Sixth Congress which were filed on the amendment in 1939, indicate that after three years of "intensive study" by the Social Security Board the amendments were offered "to strengthen and extend" the Social Security Act. This is borne out by even a casual examination of the amendments of 1939 and as well by the reports of the committee on the original bill which indicated that its sponsors expected only about half of the employed people in the United States to be covered by the provisions. The figures which are set forth in the reports on the original bill, House Report 615 of the Seventy-Fourth Congress, show that they estimated 48,830,000 people gainfully employed, while the Act was planned to cover only 25,804,000, leaving 23,000,000, or almost half of the employed people, not to be covered.
Hence, I am not justified in extending the Act beyond the words which are contained in the Act itself, on the theory that, it being a remedial statute, it must be extended to cover every conceivable classification which might carry out a plan or the hope of Social Security.
I conclude, therefore, that the Act as it stood during the period under litigation did not prevent exemption of an association as an educational organization which sought to influence legislation.
The government contends, however, because some of the moneys collected by the plaintiffs were paid to the Cinema Advertising Company, that such moneys inure to the benefit of the Allen brothers as individuals, and thus the plaintiffs are excluded from exemption under the clause which denies exemption if any part of the net earnings inures to the benefit of any private shareholder or individual. Compared to the total receipts in the two campaigns, which were well in excess of $1,000,000 taken in by the plaintiffs, that is, the organization, the amounts received by the Allen brothers were trivial. Moreover, the money paid to the Cinema Advertising Company, a previously established and going business, was paid for services actually rendered at the going and usual rates charged in this community by similar businesses. Certainly the evidence is overwhelming that the plaintiffs' funds were used to further the purposes of the organization and not to line the pockets of any individual or group of individuals, and in simple justice to the plaintiffs, it must be said that there was an unusual fidelity of purpose and zeal for their cause and indefatigable work which almost amounted to an evangelism for the cause.
But the percentage of money going to any individual is not the test of the statute. The test is whether or not such money was "net earnings." In view of the fact that the various income tax and revenue laws use terms such as "income," "profits," "proceeds," all of which have legal significance, it must be concluded that the term "net earnings" means just what it says, not income, not gross proceeds, and not profits, but "net earnings."
Obviously, the use of the word "earnings" was not intended to be so broad as to cover income, because every organization, whether a Community Chest Fund, foundation, church, Salvation Army, or what not, has to have individuals run it, and to adopt the construction contended for by the government would prevent the payment of any money to any individual, because the language of the statute says that no part of the net earnings shall go to an individual, whether that individual is a member or stockholder or not. It would also prevent any individual, who might be so employed or might be receiving reimbursement for his or her expenses, from either making a contribution to the charitable cause or whatever it was or other exempted organization, or from becoming a member, for instance, of a particular church.
There can be little doubt that what Congress intended was to prevent evasion of the tax by such an organization being set up as an ostensible charity, but the true purpose of which would be to produce earnings for the person or persons who set it up, but all the evidence in this case taken together shows no such purpose of *684 evasion on the part of the plaintiffs here or any of its thousands of members who participated in the activities of the plaintiff.
While there is some evidence that the plaintiffs received some money from the sale of advertising in their paper, or from the sale of literature, and even from a circus for awhile, it was comparatively small compared to the total intake, and there is no evidence to show that any of the money was either "earnings" or "net earnings."
I must conclude from all of the evidence on this point against the contention of the government and hold that there were no net earnings and, in fact, hold that there were no earnings and, hence, there could be and were no net earnings which would inure to the benefit of any private individual.
That still does not dispose of the point of exemption under this subdivision of the statute. It must be noted that to be exempt under the provisions of the statute as it stood at all times since its enactment, the organization must have been organized and operated exclusively for the educational purpose.
While I hold that, under the law, influencing the voters of the state on a state-wide election on an initiative measure such as the one here involved, as well as bringing home to the officials the need for some financial security to the people, generally was an educational purpose, nevertheless, under the evidence I am constrained to hold that it was not the exclusive purpose of the organization.
This is so because the organization, in addition to the initiative measures in 1938 and in 1939, in both of those years endorsed and supported candidates for public office, either existing or to be created, and in 1938 opposed and worked against other officers. Moreover, the measure itself, as submitted in 1938, named three men, one of whom was required to be appointed as administrator of the measure if it passed, and the measure submitted in 1939 named two persons, one of whom by adoption of the measure was mandatorily required to be designated as administrator by the governor, subject only to such designee's acceptance.
The measures on their face would vest tremendous powers, almost dictatorial powers, over the economic life of California and its people in such administrators, so much so that the campaign for the measure was just as much a campaign for the designated administrators, and the evidence shows that in educating the people on the merits of the measure the plaintiffs likewise publicized the virtues of the designees who were actually candidates for public offices to be created by the act, and they were the only candidates who could be appointed for that office with no choice, at that election upon that measure, to the people to vote upon, or even indirectly through the Governor select, any other person or persons.
That the activities of the plaintiffs during this period were not limited to the education of the public and officials on the merits of the measure is indicated, for instance, by Exhibit NN, wherein it is boasted that their votes "washed up" certain candidates in 1938. And in 1938, the evidence shows that candidates for various public offices were supported and others were vigorously condemned in the whole activities of the organization.
While the activities of the plaintiffs in connection with the various persons was no doubt prudent from the viewpoint of securing people in office friendly to their cause, nevertheless I cannot read the Act as meaning to exempt activities telling of the qualifications and merits and demerits of persons as contrasted with the merits or demerits of principles which might be embodied in legislation. This distinction is so apparent to me as to need no elaboration other than to say that to permit candidacies of persons to come within the umbrella of exemption would be to completely destroy the statute and destroy the distinction, which is fundamental in our law, between rules of conduct for the government of people and for the governance of government officials, and the exaltation merely of any person.
I must conclude, therefore, from all of the evidence that the plaintiffs were not *685 organized and operated exclusively for educational purposes so as to bring them within the exemption of Section 811(b) (8) of the Social Security Act.
It will be necessary to pass upon a point not too clearly made or presented by the plaintiffs but which, if correct, would exempt them from the tax. Incidentally, it is a point which has given me considerable study. The point is that placing the propositions on the ballot by the initiative petitions for adoption or rejection by vote of the people of the State of California and the campaigns in support of these measures was an exercise of the legislative function of the State of California, and as such was just as exempt from Social Security taxes as, for instance, the money received from and paid by the State to a member of the legislature of the State of California. Article 4, Section 1, of the California Constitution, which is the appropriate section, reads as follows:
"Article IV. Legislative Department "Section 1. The legislative power of this state shall be vested in a Senate and Assembly which shall be designated `The Legislature of the State of California,' but the people reserve to themselves the power to propose laws and amendments to the Constitution, and to adopt or reject the same, at the polls independent of the Legislature, and also reserve the power at their own option to so adopt or reject any act, or section or part of any act, passed by the Legislature."
The whole section and clause is too long to read at this time, but that is sufficient to indicate that in the State of California the people themselves are an integral part of its legislative system.
Now, the pertinent provision of the Social Security Act is Section 811(b) (7), 42 U.S.C.A. § 1011(b) (7), and it exempts services performed in the employ of a state, a political subdivision thereof, or an instrumentality of one or more states or political subdivisions.
The right of the people to legislate under Article 4 has been freely used since the 1912 constitutional amendment which has permitted it. I have taken judicial notice of the public records in that respect, and upon compilation it is disclosed that 377 different state propositions have been submitted since 1912 to the people of the State of California.
In addition to the 377 statewide propositions, there have been hundreds of matters submitted by cities, counties, and other political subdivisions, so that in a very real sense this right of the people to legislate has been a governmental function. But the education of the people as to the merits or demerits of a particular measure is not, as I see it, a governmental function. In fact, the very essence of the initiative and referendum is that the people in their own fashion may legislate without the intervention of the state or any of the state's functionaries.
Furthermore, the exemption of Section 811(b) (7) of the Social Security Act indicates that for the exemption to attach there must be employment, that is, control by the state in the relation of employer and employee; that is to say, there must be employment before the exemption attaches; but there is clearly no control or direction even in the slightest degree by the State of California or any of its officers, agencies, or functionaries of any kind of the plaintiffs here, and I must conclude on that point against the plaintiffs.
The remaining point upon which the plaintiffs rely is that no relationship of employer and employee existed between the plaintiffs and those who were engaged in the campaign. The statute says, 811(b), and I am omitting some words to get the sense of this: "The term `employment' means any service * * * performed * * * by an employee for his employer." Thus, if there was no employment, then no tax was due, whether there was specific exemption or not.
The regulations promulgated by the Commissioner of Internal Revenue under the Act with relation to Section 811(b), and the definition of the term "employment" provided as follows, and this is Article 2, page 3, of a pamphlet which is designated as "Regulation 91, Relating to the Employees' Tax and Employers' Tax under Title VIII, Social Security Act, Washington, 1936, Price 10 cents."
*686 "To constitute an employment the legal relationship of employer and employee must exist between the person for whom the services are performed and the individual who performs them."
Article 3 on the same page of the same pamphlet reads in part: "The relationship between the person for whom such services are performed and the individual who performs such services must as to those services be the legal relationship of employer and employee. Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work, but also as to the details and the means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done. In this connection it is not necessary that the employer actually direct or control the manner in which the services are rendered. It is sufficient if he has a right so to do."
The section is longer but that is the pertinent provision. These are the commonly accepted legal elements of the relationship of employer and employee.
The plaintiffs make the point that the Superior Court of the State of California, in an action wherein the judgment has become final, decided that such relationship did not exist. And that under the doctrine of Fidelity Union v. Field, 311 U.S. 169, 61 S. Ct. 176, 85 L. Ed. 109, and other cases which they cited, such judgment must be accepted here.
While the finality of that decision may be, and no doubt is, sufficient to control in the interpretation of the state's Minimum Wage and Social Security laws, it does not follow that it must control in the interpretation of a federal statute which cannot be subject in its national administration to the hazards of varying definitions of employer and employee which the various forty-eight states might choose to adopt and might develop for their own laws. And, in the ultimate, the conclusion as to whether one is an employer of another or not is always a question of fact to be determined from all of the evidence introduced in the particular case. Hence, while I have no disagreement with the doctrine in the cited cases and have the highest respect for and confidence in the judge who rendered the state court decision, I am nevertheless under the duty to make that determination of fact here in this case by weighing all of the evidence.
In that respect I must say that I was not impressed by the witnesses for the government. All of them signed waivers; all of them were members of the organization and pledged their word to the organization and to one another and to the people of California that they were for the measure and would support it; almost all, if not all, of them signed affidavits subsequent to the signing of the waiver to the same effect. There were something like fifty thousand people engaged in the organized campaign who signed waivers, but with all of the unlimited facilities of the government to secure evidence, nothing has been produced to show that a single one of all of the persons offered to pay an employee's share of the Social Security tax during the campaign or ever brought the subject up with the plaintiff during the period involved. Most of the government's witnesses indicated an obvious prejudice against the plaintiffs. Many of them were either securing or attempting to secure unemployment insurance. Many of them had facile memories and ready answers when testifying on direct examination for the government, but on the same points when cross-examined or examined by the court their memories became faulty and they gave evasive answers. Hankins, one of the principal witnesses for the government, was typical, and I deem it necessary to perhaps comment upon his testimony in order to illustrate the factors which were taken into consideration. He was in charge of Northern California with headquarters in San Francisco. He had no hesitancy in letting thousands of bewildered people who were searching for some security in their support of this act believe that he believed in the cause and was for it. He signed the waiver. He secured volunteers. He did all of the things a manager of a campaign would do, and he did them with enthusiasm. *687 And yet he testified on the stand that he did not believe in the measure. To quote his testimony, he said he "never had any interest in seeing the pension law enacted," although he never told that to the Allen brothers or any one else during the period of the campaign, but just to the contrary. He testified that out of the $25 a week which he received from the plaintiff he paid $5 a week for his room in a hotel in San Francisco, and fed and clothed himself and saved out of that $10 a week. He started a rival pension plan after he left the plaintiff and tried to take over the personnel of the plaintiff's organization and followed the same plan. He secured 2,400 members to this rival organization. He had some employees but paid no Social Security tax and filed no Social Security return, and stated that when he was talking to some Treasury Department agent about it the agent told him to forget it. From all of these things and his manner of testifying, I must say that his testimony is without credence.
I have no intention of trying to review the 3,000 pages of transcript of the testimony nor to review the hundreds of exhibits which were introduced, and of necessity I must limit my comments on the evidence.
The plaintiffs' activities covered a multitude of things, engaging thousands of persons. Any one with the slightest experience in such matters knows that in the hurly-burly and intensive pressures that exist to make moves and countermoves in a state-wide campaign, it is a practical impossibility to keep a record of the names of persons who help, the hours and times they work, and, in fact, to know whether or not they actually do work. Newspapers, pamphlets, meetings, radio talks and times, contact with different groups and organizations where endorsements are sought, whether those groups or organizations are actual or real, or whether they are phoney, were made as they have to be made. Odd jobs connected with the distribution of such material, which called for the payment perhaps of only a dollar or two to a person whose name is not secured and who is never known, actually, and did here, constantly arise. In these services boys, elderly men, and women were used, and to have required the taking of the names and addresses of these people and to have kept records and books and made reports on all of them as to the hours and times of work would result in such an extended and complicated system of books and records that a campaign would have been well nigh impossible. Especially is this true if that were required for all the different branch headquarters of the state-wide campaign which occurred in this matter on two different occasions, each of which was perhaps one of the wildest, most turbulent, and intense in the history of the state, and which cut across all economic, social, and political lines on both sides.
The plaintiffs did keep records, however, of those attached to and working out of their main headquarters. The list of such persons for both the Los Angeles and San Francisco headquarters is Exhibit 10-B. It is divided into fourteen classifications.
As to all of the other persons not included in that list the evidence from an overall point of view is clear that none of the elements were present which make up the relation of employer and employee, and as to all of the persons engaged in the campaign whose names do not appear on that list I find and will find that they were volunteers, that they devoted whatever time they respectively felt that they were willing to give for the advancement of the cause and the dissemination of its philosophies freely and voluntarily, without restriction, requirements, obligations, or conditions as to the hours or places of work, without compensation or other financial reward measured by performance, time or any of the other considerations which go to make up the elements of employer and employee, and that where reimbursements were made they occurred as nearly as possible in an amount which was their actual and necessary expenses incurred in connection with their voluntary and gratuitous services.
The problem now reduces itself to a determination of whether or not the relationship of employer and employee existed as to the persons who are listed on Exhibit 10-B. As stated, there are fourteen classifications, as follows: Directors, *688 speakers, office workers, administrative office workers, area managers, assembly district managers, field workers, public relations contact, investigations, printing, switchboard operators, independent contractors, newspapers, sound tracks, and motion pictures.
I have been much impressed by the testimony and the evidence adduced on behalf of the plaintiff in connection with these workers, particularly but not exclusively by the waivers, the affidavits, the fact of membership, and the complete lack of any demand for Social Security coverage by any of the thousands of persons during the period covered, and I accept generally their position as correct as shown by the evidence, and will find from an overall view of all of the evidence that as a matter of fact the relationship of employer and employee did not exist as to any of the classifications of workers so designated on Exhibit 10-B except as to classification No. 3, the office workers, and classification No. 10, the switchboard operators. As to these two classifications I am satisfied from all of the evidence that the plaintiffs not only had the right to but did control and direct them, not only as to the result to be accomplished by their work, but also as to the details and means by which it was to be accomplished, as well as the hours and times of work. I cannot from the evidence draw that conclusion of fact as to the other classes of workers which are designated in Exhibit 10-B. In my judgment, they fall within the same category, under all of the evidence, as the workers in the campaign who are not listed on their Exhibit 10-B, and I will so find.
Judgment will be for the plaintiff accordingly as to all classifications of workers except classifications 3 and 10 as listed on Exhibit 10-B, and plaintiff will prepare the findings of fact and conclusions of law.
If, upon consultation with the defendant, any difficulty is encountered in calculating the sums which might be due from these approximately 250 people, I will settle it by a hearing or by reference to a master.
There is one other thing that needs to be disposed of. This relates to Exhibit GGG, which purports to assign the plaintiff's cause of action to the Payroll Guarantee Association, Incorporated, a California non-profit corporation. The California statutes which might permit such an assignment do not prevail here in the federal court, as there is a special federal statute which controls. It is Revised Statutes 3477, which is Title 31, U.S.C.A. § 203. The statutes make any attempted assignment "absolutely null and void, unless they are * * * executed * * * after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof."
Obviously, these conditions precedent to the validity of the assignment are not here, and such attempted assignment is therefore null and void, and I will so hold, and now deny the motion of the plaintiffs of February 11th to amend the complaint to conform to the proof.
While the claim for refund was made and the action filed by both the 1938 organization and the 1939 organization, the evidence clearly shows that the funds when seized were the property of the 1939 organization, namely, "National Campaign Committee, Retirement Life Payments Association, $30 a week for life," and the judgment is accordingly in favor of the last-named organization. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265814/ | 341 Pa. Super. 499 (1985)
491 A.2d 1368
COMMONWEALTH of Pennsylvania
v.
James GORHAM, Appellant.
Supreme Court of Pennsylvania.
Submitted November 2, 1984.
Filed April 19, 1985.
*501 John J. Calabro, Philadelphia, for appellant.
Jane C. Greenspan, Assistant District Attorney, Philadelphia, for Commonwealth, appellee.
Before SPAETH, President Judge, and OLSZEWSKI and CERCONE, JJ.
*502 SPAETH, President Judge:
This is an appeal from judgment of sentence for burglary and related charges. Appellant argues that the trial court erred in (1) denying his Rule 1100 motion to dismiss, (2) admitting his inculpatory statements, and (3) admitting evidence obtained through a search of appellant. He also argues that trial counsel was ineffective. We find appellant's arguments without merit and therefore affirm.
Rule 1100 requires that trial commence no later than 180 days from the date on which the complaint is filed, but excludable from this period, is "such period of delay at any stage of the proceedings as results from: (i) the unavailability of the defendant or his attorney; (ii) any continuance granted at the request of the defendant or his attorney." Pa.R.Crim.P. 1100(a)(2) and (d)(3). The complaint in this case was filed on November 3, 1982, resulting in a run date of May 2, 1983. Appellant was not tried until August 18, 1983 108 days beyond the run date. Appellant concedes, however, that as a result of his motion for a continuance, 76 days are excludable. N.T. 8. Excluding this period brings the run date to July 17, 1983.
The Commonwealth argues that it may exclude a second period. On February 14, 1983, appellant, who had been on bail, failed to appear for trial. Instead, his sister-in-law appeared and told the court, and the district attorney, that appellant was in federal custody in Lexington, Kentucky. N.T. 8-9. The case was continued to March 21, so that the Commonwealth could initiate extradition proceedings. On March 21 appellant was still in custody in Kentucky, and the case was continued to June 3. On March 24 the Commonwealth obtained custody of appellant. On June 3 appellant's counsel requested and was granted a continuance, and on August 18 trial commenced. Under Pa.R. Crim.P. 4013(c), appellant as a person admitted to bail was required to "give written notice to the issuing authority, the clerk of courts, the district attorney, and the court bail agency or other designated court bail officer, of any change of address within forty eight (48) hours of the date of such *503 change. . . ." The Commonwealth's argument is that because appellant failed to give written notice that he was in custody in Kentucky of his "change of address" and because he failed to appear for trial when his case was called on February 14, he violated the conditions of his bail, and that "any resulting delay [is] excludable under Rule 1100(d)(1)." Brief for Commonwealth at 5.
A defendant on bail who fails to appear at a court proceeding of which he has been properly notified is unavailable from the time of that proceeding until he is subsequently apprehended or voluntarily surrenders, and the Commonwealth is entitled to exclude this period without any showing of due diligence. Commonwealth v. Cohen, 481 Pa. 349, 356, 392 A.2d 1327, 1331 (1978); Commonwealth v. Derrick, 322 Pa.Super. 517, 469 A.2d 1111 (1983); Commonwealth v. Colon, 317 Pa.Super. 412, 464 A.2d 388 (1983); Commonwealth v. Williams, 299 Pa.Super. 226, 445 A.2d 537 (1982); Commonwealth v. Bell, 283 Pa.Super. 196, 423 A.2d 1056 (1980). We have held that this principle applies even where the defendant is incarcerated, and therefore can not appear, if he has not complied with the notice requirement of Rule 4013(c). Commonwealth v. Byrd, 325 Pa.Super. 325, 472 A.2d 1141 (1984); Commonwealth v. Colon, supra 317 Pa.Super. at 421, 464 A.2d at 393; Commonwealth v. Williams, supra 299 Pa.Super. at 230, 445 A.2d at 539. However, in each of these cases the district attorney was unaware of the defendant's incarceration. Here, in contrast, the district attorney was informed of appellant's whereabouts, even though, contrary to Rule 4013(c), not in writing and not until the day set for trial. We therefore do not agree with the trial court, which found Byrd "dispositive." Slip op. of tr. ct. at 2.
Nevertheless, we find that appellant was accorded his right to a speedy trial. Under Rule 1100(d), the Commonwealth may exclude not just the time that the defendant or his attorney is unavailable for trial, but the entire period of delay that results from such unavailability. Commonwealth v. Robinson, 498 Pa. 379, 384, 446 A.2d 895, 898 *504 (1982) (sixteen day delay occasioned by need to put case on backup status behind two other cases at conclusion of defense continuance excludable); Commonwealth v. Millhouse, 470 Pa. 512, 518, 368 A.2d 1273, 1276 (1977). Thus a defendant, by his unavailability, may occasion a delay greater than the actual time of his unavailability. Commonwealth v. Colon, supra, 317 Pa.Superior Ct. at 423, 464 A.2d at 394; Commonwealth v. Perry, 296 Pa.Super. 359, 442 A.2d 808, 810 (1982). Nothing in the record indicates that appellant notified anyone of his incarceration prior to February 14, 1983, when he failed to appear for trial. Accordingly, he was unavailable for trial at least on that date, and the delay occasioned by the need to continue the case to March 21 was attributable to him and excludable. Commonwealth v. Donaldson, 334 Pa.Super. 473, 477, 483 A.2d 549, 551 (1984) (forty-six day continuance resulting from defendant's tardiness excludable); Commonwealth v. Ressler, 308 Pa.Super. 438, 454 A.2d 615, 617 (1982) (forty-nine day continuance resulting from defendant's failure to appear excludable); Commonwealth v. Perry, supra 296 Pa.Super. at 362, 442 A.2d at 810 (twenty-two day continuance when defendant did not appear until after his case was passed because he was detained at a district hearing excludable). Accord Commonwealth v. Derrick, supra 322 Pa. Super. at 530, 469 A.2d at 1118 (when defendant failed to appear for trial and three days later appeared without counsel, entire period from date he failed to appear to date he appeared without counsel excludable, and also period to date to which trial was rescheduled when that date was earliest possible date consistent with court's business). Exclusion of the 35 day continuance from February 14 to March 21 brings the run date in this case to August 21, 1983, three days after the trial.
A qualification to this conclusion should be noted lest it be interpreted too broadly. It is not enough to show only that the defendant has violated the conditions of his bail; it must also be shown that the period of delay in question resulted from that violation. Here we are satisfied that the *505 35 day continuance did result from appellant's violation of the conditions of his bail. But in other cases, that has not been shown. Thus in Commonwealth v. Johnson, supra, where the defendant only appeared late on the day on which trial was scheduled, and the case was continued for 34 days, we declined to find unavailability during the entire period of the continuance. 265 Pa.Super. 27, 33, 401 A.2d 783, 786. And in Commonwealth v. Morgan, 484 Pa. 117, 121, 398 A.2d 972, 975 (1979), the Supreme Court found a 20 day delay caused by the defendant's failure to appear for her arraignment not excludable because, while the defendant was unavailable during the 20 days, "[a] critical fact" was that her "unavailability . . . did not result in delaying the schedule of the proceedings." Morgan also involved a 49 day continuance. Instead of appearing when her case was called for trial, the defendant notified the district attorney that she was required to appear in federal court. The case was then continued for 49 days, without inquiring how long the federal proceedings would detain her. The Commonwealth argued that the entire period of the continuance should be excluded. However, assuming the defendant's unavailability on the date set for trial, the Court found that the Commonwealth's claim was in the nature of a claim of "judicial delay," and since the Commonwealth had failed to apply for an extension, the claim was rejected. 484 Pa. at 124-26, 398 A.2d at 975-76. Here we do not regard the Commonwealth claim as in the nature of a claim of judicial delay. When appellant's sister-in-law notified the trial court and the district attorney that appellant was in custody in Kentucky, it became evident that some delay would result. How much delay could not then be known, but an estimate of 35 days the continuance ordered was reasonable. It is therefore fairly attributable to appellant.
Appellant's remaining arguments are also without merit. The record supports the trial court's admission of appellant's inculpatory statements and of the credit cards and checks found on appellant on the night of his arrest. We will not disturb findings supported by the record and *506 legal conclusions based on those findings. Commonwealth v. Henderson, 497 Pa. 23, 36, 438 A.2d 951, 957 (1981); Commonwealth v. Rodriguez, 330 Pa.Super. 295, 299, 479 A.2d 558, 560 (1984). Nor has appellant demonstrated any ineffectiveness of counsel. Appellant argues that counsel "was ineffective for failing to subpoena a print-out of the police radio message which led to the arrest. . ." Brief for Appellant at 13. However, he does not suggest how the print-out, if subpoenaed, would have assisted in his defense. A purely abstract claim of ineffectiveness will be denied. Commonwealth v. Wallace, 495 Pa. 295, 298, 433 A.2d 856, 858 (1981).
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265833/ | 200 N.J. Super. 333 (1984)
491 A.2d 737
BERNARD SOBOTOR, PLAINTIFF-RESPONDENT,
v.
PRUDENTIAL PROPERTY & CASUALTY INSURANCE COMPANY AND CHARLES REDMOND, DEFENDANTS-APPELLANTS.
Superior Court of New Jersey, Appellate Division.
Argued October 24, 1984.
Decided November 20, 1984.
*335 Before Judges MATTHEWS, FURMAN and COHEN.
Thomas Lenney argued the cause for appellants (Enright, Porter, Lenney & McGrath, attorneys; William L. Bracaglia on the brief).
*336 Richard Wildstein argued the cause for respondent (Goldstein, Ballen, O'Rourke & Wildstein, attorneys; David Joshua Michelson on the brief).
PER CURIAM.
In October 1980, plaintiff, who had recently moved to New Jersey from New York, contacted defendant Prudential Insurance Company in order to obtain automobile insurance. He was referred to insurance agent defendant Charles Redmond, with whom he subsequently met to discuss coverage. In response to Redmond's inquiry, plaintiff informed Redmond of the coverage and monetary limits provided by his policy in New York. Redmond advised plaintiff that he was required to carry Personal Injury Protection (PIP) and Uninsured-Underinsured Motorist Insurance (UMI).
Plaintiff requested $100,000/$300,000 liability coverage. Regarding additional coverage, it is not clear whether plaintiff told Redmond that he wanted to be "fully covered with whatever coverage was available" or to obtain "the New Jersey package that is the best available." In their brief, defendants acknowledge that plaintiff deposed that he requested the "best available" package regarding the rest of the insurance. Judge Alterman, however, made no finding as to which of the above two requests were made.
Without advising plaintiff that there were options available under PIP and UMI, Redmond provided plaintiff with a policy that contained a UMI liability limit of $15,000 on account of injury to or death of any one person and $30,000 on account of injury to or death of more than one person in any one accident. This satisfied the statutory minimum required under N.J.S.A. 17:28-1.1. At the time, Prudential offered UMI coverage in amounts of $100,000 and $300,000 for an additional $5 premium. Redmond was authorized to issue such coverage.
Plaintiff sustained serious injuries and permanent disabilities in a motor vehicle accident. The driver of the other vehicle, *337 who was allegedly at fault, maintained only the minimum $15,000/$30,000 insurance. Plaintiff instituted an action in the Law Division alleging negligence on the part of defendant Redmond in failing to advise him of the availability of the higher amounts of UMI coverage. Plaintiff sought to amend defendant Prudential's insurance policy to include UMI coverage to an amount of $100,000.
In a written opinion the Law Division judge denied cross-motions for summary judgment. Addressing the question of whether "an insurance agent has an affirmative duty to advise his client of the availability of higher monetary limits for the coverage requested," he found that such a duty exists and that defendant Redmond breached that duty owed to the plaintiff. He also identified certain unresolved issues of fact: whether defendant Redmond's breach was the proximate cause of the damages plaintiff sustained; the exact language used by plaintiff when requesting insurance from defendant Redmond, and the meaning to be given to said language.
At trial, Judge Rumana decided the proximate cause issue in favor of plaintiff and ordered the Prudential policy reformed. He found, as a fact, plaintiff would have purchased additional UMI coverage if it had been offered to him and found as a matter of law that it was not necessary for the plaintiff to show that he would have exercised the option.
The duty of care owed by an insurance broker[1] to a client has been set forth in Rider v. Lynch, 42 N.J. 465 (1964):
One who holds himself out to the public as an insurance broker is required to have a degree of skill and knowledge requisite to the calling. When engaged by a member of the public to obtain insurance, the law holds him to the exercise of good faith and reasonable skill, care and diligence in the execution of the commission. He is expected to possess reasonable knowledge of the types of policies, their different terms, and the coverage available in the area in which *338 his principle seeks to be protected. If he neglects to procure the insurance, or if the policy is void or materially deficient, or does not provide the coverage he undertook to supply, because of his failure to exercise the requisite skill of diligence, he becomes liable to his principal for the loss sustained thereby. [42 N.J. at 476]
Defendants and plaintiff disagree on how this standard applies to this case. Defendants claim that the standard does not impose on an agent or a broker a duty to inform a client of "all coverage which the particular company writes." Conversely, plaintiff argues that the Rider standard encompasses the duty to inform the client of additional protection available under UMI. In ruling for the plaintiff, Judge Alterman said that "... the standard must be flexible enough to govern a myriad of unanticipated circumstances."
Judge Alterman reached his decision by relying on four cases which recognize a duty, in certain circumstances, to advise a client of various aspects of insurance coverage. These cases all recognize that such a duty arises when there is a special relationship between the insurance agent and the client which indicates reliance by the client on the agent.
In the seminal case, Hardt v. Brink, 192 F. Supp. 879 (W.D. Wash. 1961), broker's failure to advise his client of eight years of the need for additional insurance coverage for newly leased premises constituted negligence. In deciding upon the appropriate standards of care owed to the client, the court stated:
Whether or not an additional duty is assumed will depend upon the particular relationship between the parties. Each case must be decided on its own peculiar facts. The law here involved is not particularly startling nor is it necessarily an extension over previous cases. This is an age of specialists and as more occupations divide into various specialties and strive towards `professional' status, the law requires an even higher standard of care in the performance of their duties. [192 F. Supp. at 881]
The court concluded that the broker was "under a duty to advise the plaintiff as to his potential liability (for loss as a result of fire) under the lease and to recommend insurance protection therefor." Id. at 882.
Defendants rely on Hardt, claiming that the following language supports their position:
*339 Clearly, the ordinary insurance solicitor only assumes those duties normally found in any agency relationship. In general this includes the obligation to deal with his principal in good faith and to carry out his instructions. No affirmative duty to advise is assumed by the mere creation of an agency relationship. [Id. at 880]
Following this quote, however, the opinion uses language which places serious limitations on the lack of duty to advise:
However, this does not mean that the agent cannot assume additional duties either by express contract or a holding out. [Id. at 881]
The record does not indicate that defendant Redmond expressly contracted to assume additional duties. It does, however, depict a "holding out" by Redmond of a special expertise in the insurance business. Plaintiff, who knew nothing about the technical aspects of insurance policies, placed faith in Redmond and relied upon his expertise. We think Redmond had a duty to advise respondent.
Defendants attempt to distinguish Hardt by asserting that it involves an agreement which necessitated insurance coverage whereas this case involves optional coverage. Regardless of the type of coverage sought, a client should be entitled to rely on the special skill and knowledge posessed by the agent in order to best obtain the desired coverage. It does not seem reasonable to permit an agent to withhold information which might prove useful to one seeking coverage simply because the insurance sought is not mandatory.
Aetna Cas. & Sur. Co. v. Ogus, Inc., 396 F.2d 667 (D.C. Cir.1967) also recognized that an insurance agent may have affirmative duties of full explanation. In Aetna, a general contractor was charged with negligent excavation, which resulted in damage to property adjacent to the work site. The general contractor's subrogee sued the contractor's insurance agent for failure to inform the contractor of the lack of excavation insurance. The court declined to find a breach of duty, relying on the fact that the general contractor had a history of deliberately obtaining less than full coverage.
*340 In Nowell v. Dawn-Leavitt Agency, Inc., 127 Ariz. 48, 617 P.2d 1164 (Ct.App. 1980), the court also recognized that certain circumstances may give rise to an affirmative duty on the part of an insurance agent to inform a client of the availability of various coverage. In Nowell, after her home was damaged by a torrential rainstorm, plaintiff sued her insurance agent for failure to inform her of the availability of flood insurance. Because plaintiff had an extensive background in construction and real estate and because the prior conduct of the parties negated the inference of a fiduciary relationship, the court declined to find the agent in breach.
In Stein, Hinkle, Dawe, etc. v. Continental Cas. Co., 110 Mich. App. 410, 313 N.W.2d 299 (Ct.App. 1981), a group of architects and engineers sued their insurance agent of ten years for the negligent failure to advise them of the consequences of not renewing their malpractice insurance and of the availability of a prior acts endorsement in their new policy. The court found that the agent breached a duty owed to these clients, based on the long-term nature of their relationship.
Judge Alterman correctly distinguished this case from the above-cited cases in two respects. First, this case involved a much less onerous and demanding duty than any of the duties involved in the cited cases. Here, the client contends that the agent has an obligation, when discussing coverage under statemandated UMI, to inform him of all available options. In the cited cases, the clients asserted a duty to advise of a particular insurance protection which was not then under discussion. This distinction serves to strengthen plaintiff's argument that Redmond's conduct constitutes a breach. Second, the four cases recognized the importance of a long-established relationship to the imposition of a duty to inform. Here plaintiff was a new client who obviously had no previous contact with defendants. Judge Alterman found that:
There is no reason why the obligation to convey information should require a long-term relationship of entrustment. While many clients need not rely on their insurance agents for either advice or information, for most insurance *341 customers reliance is implicit in the relationship. "Thus, an insurance broker, in dealing with his clients, ordinarily invites them to rely upon his expertise in procuring insurance that best suits their requirements." Rider v. Lynch, supra [42 N.J.] at 477. An insurance agent is expected to know the coverage available in the areas in which his principal seeks protection. Rider v. Lynch, supra, at 476. If he has a duty to inform his client that the amount of coverage requested is not available, and he surely has that duty, no greater or dissimilar burden is imposed by requiring him to advise his client that coverage in increased amounts is available. Both are merely different sides of the same coin. Acts of omission as well as acts of commission may give rise to a violation of a duty of due care. There is no basis to distinguish here between the misfeasance of giving erroneous information and the nonfeasance of giving no information.
We agree with Judge Alterman's analysis. Any individual seeking insurance should be able to rely on the expertise of the agent, regardless of the prior contract between the parties. The fiduciary nature of such a relationship should not depend solely upon the length of the relationship. Because of the increasing complexity of the insurance industry and the specialized knowledge required to understand all of its intricacies, the relationship between an insurance agent and a client is often a fiduciary one. Agents should be required to use their expertise with every client, not only those with whom they have a long-term relationship.
Appellants argue that the absence of a duty to inform is supported by Cox v. Santoro, 98 N.J. Super. 360 (App.Div. 1967) and Citta v. Camden Fire Ins., 152 N.J. Super. 76 (App.Div. 1977). In Citta, the court ruled that there was no duty to inform an insured of the expiration date of a fire insurance policy. Cox held that there was no duty to advise an insured that his automobile policy would not cover his son while driving a relative's car.
These cases are clearly distinguishable from this case. Both in Citta and in Cox, the insureds were charged with knowledge of the information at issue. The insured in Cox was not an unsophisticated consumer. He had been in the insurance business for 40 years, working as a casualty claims examiner for the last 15 or 20 years. In Citta, the expiration date of the *342 insurance was visibly printed on the policy and could have been immediately ascertained by the insured.
Plaintiff here is not a sophisticated insurance consumer nor were the UMI options visibly printed on his insurance policy. There is nothing in the record to indicate any other reason why he should be charged with knowledge of the options. Defendants' reliance on Cox and Citta is misplaced.
Defendants also argue that the duty owed by an agent is limited by what is specifically and expressly requested by the client. They argue that "a vague request for the `best available' insurance package is not tantamount to a specific request for maximum Uninsured Underinsured Motorist Coverage." Such an argument does not, however, negate the existence of a fiduciary duty to inform respondent of the additional coverage. On the contrary, it would support the existence of such a duty. By asking for the "best available" insurance, respondent put Redmond on notice that he was relying on the agent's expertise to obtain the desired coverage.
Our courts have recognized that insurance policies are not ordinary contracts, but contracts of adhesion between parties not equally situated. Karl v. New York Life Ins. Co., 154 N.J. Super. 182, 185 (App.Div. 1977). In Harr v. Allstate Ins. Co., 54 N.J. 287 (1969), Justice Hall summarized well the disparity between an agent and a client:
Our expressions have come in a variety of issues and contexts, but all have indicated as their keystone the goal of greater protection to the ordinary policyholder untutored in the intricacies of insurance. We have realistically faced up to the fact that insurance policies are complex contracts of adhesion, prepared by the insurer, not subject to negotiation, in the case of the average person, as to terms and provisions and quite unintelligible to the insured even were he to attempt to read and understand their unfamiliar and technical language and awkward and unclear arrangement. Recognition is given to the usual and justifiable reliance by the purchaser on the agent, because of his special knowledge, to obtain, the protection he desires and needs, and on the agent's representations, whether that agent be a so-called `independent' but authorized representative of the insurer, or only an employee. We have stressed, among other things, the aim that average purchasers of insurance are entitled to the broad measure of protection necessary to fulfill their reasonable *343 expectations; that it is the insurer's burden to obtain, through its representatives, all information pertinent to the risk and the desired coverage before the contract is issued; and that it is likewise its obligation to make policy provisions, especially those relating to coverage, exclusions and vital conditions, plain, clear and prominent to the layman. [54 N.J. at 303-304]
This inequality of position requires that the agent deal with laypeople as laypeople and not as experts in subtleties of the law. Bowler v. Fidelity Cas. Co. of New York, 53 N.J. 313, 327 (1969). "Insurance brokers (and agents) have a responsibility in law to act toward their less expert clients in a way that is responsible in fact." Aetna, cited above, 396 F.2d at 670.
We find no merit in the additional arguments raised by defendants in their brief on appeal.
The order and judgment under review are affirmed.
NOTES
[1] We see no reason why the duty owed by a broker to a client should differ from the duty owed by an agent. The difference between a broker and an agent lies in the duties and responsibilities owed to the insurance carrier, not to the insured. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1866729/ | 51 N.W.2d 472 (1952)
SOLOMON
v.
SIOUX CITY et al.
No. 47970.
Supreme Court of Iowa.
February 5, 1952.
Rehearing Denied April 4, 1952.
*474 Free, Berry & Free, Sioux City, for Intervenors-Appellants.
George F. Davis, City Solicitor, Sioux City, for Defendant City-Appellant.
Sifford & Wadden, Sioux City, for Railway Co.-Appellant.
Stilwill, Brackney, Stilwill & Wilson, Sioux City, for Plaintiff-Appellee.
HAYS, Justice.
Plaintiff is the owner of Lot 11, Block 13, East Sioux City, Iowa, which is located along the Missouri River. He alleges that, by accretion, land has been built extending from said lot in a south-westerly direction some 300 feet to the high bank of the river, and asks that title be quieted in him as against the claims of Defendants and Intervenors. Defendants and Intervenors claim title to said land under a patent from the State of Iowa, dated 1940, to Defendants. There was a decree quieting title in Plaintiff as against Defendants and Intervenors but not establishing the lines of said tract because of the absence of possible interested parties. All parties have appealed. Hereafter, references to Appellants refer to Defendants and Intervenors, unless otherwise stated.
The original plot of East Sioux City, 1856, shows Block 13 to be located some distance from the then high bank of the river. Appellee purchased Lot 11 in 1930, has been in continuous possession thereof since such purchase. Lot 12, to the north, and Lot 10, to the south of Lot 11, were then and are now owned by the Saint Paul, Minneapolis and Omaha Railway Company, one of Defendants-Appellants. In 1932 a survey, Pi's Ex. E, shows that all of the land originally separating Lot 11 from the river has been engulfed thereby and the then existing high bank (1932), extended through the said Lot 11 in a north-westerly direction from a point on the south line of said lot approximately 72.5 feet east of the southwest corner thereof and running at an angle to a point on the north line thereof approximately 25 feet east of the north-east corner. Lots 10, 11, and 12 were originally each 150 feet east and west, by 50 feet north and south. They front on Iowa Street to the east.
In 1932, the Federal Government in the furtherance of navigation on the river, erected a series of dikes or jetties, commencing a short distance out in the river from the then high bank, and extending into the river some 300 feet. These dikes were located both above and below where the river cut across Appellee's Lot 11. The outer edge of these dikes was the point established by the Government as the new channel line. By 1935, there was built up the tract of land in question.
In 1937, the Appellant, City of Sioux City, under Chapter 303, Code of 1935, now Chapter 384, Code of 1950, I.C.A., created a Department of Public Docks. In 1940, the City received a patent from the State of Iowa which granted to it certain land between the new channel line, above described, and a point 300 feet, measured at right angles thereto, toward the old high bank of 1932. The grant extended from Wall Street, on the south and east, upstream to Virginia Street, on the north and west, and included therein the tract between Lot 11, under the 1932 survey, and *475 the new channel line. At the same time, by a patent, the State of Iowa granted to the Appellant Railway Company, among other land, the tract which lay between the high bank of 1932 and the above described 300-foot line, which included a narrow strip of land between what remained of Block 13, under the 1932 survey, and the 300-foot line. In 1941, the Appellant City received a quit-claim deed from the Appellant Railway Company to the tract described in the patent from the State to the City. It also received quit-claim deeds to said tract from all other riparian owners in the immediate vicinity, except Appellee-Plaintiff. In 1941, the Appellant-Intervenors, being the Dock Commission, by Commission Ordinance No. 1, proclaimed the tract, covered by the patent to the City, to be the property of the City and under the exclusive control and jurisdiction of said Dock Commission, including therein the land claimed by Plaintiff-Appellee. Thus, this action.
Appellants rely for a reversal, primarily upon two propositions: (1) The land in question is not accretion; (2) Rights of the public supersede the rights of the individual riparian owner.
It is conceded by all parties that the Missouri River was and is a navigable stream. The State of Iowa, in the absence of a conveyance thereof, is the owner of the bed or channel of this river, from the center or thread thereof to the high water mark of the stream. Preamble, State Constitution of Iowa, I.C.A.; State of Iowa v. Illinois, 147 U.S. 1, 13 S. Ct. 239, 37 L. Ed. 55; Payne v. Hall, 192 Iowa 780, 185 N.W. 912; City of Sioux City v. Betz, 232 Iowa 84, 4 N.W.2d 872. While it is claimed by Appellants that, due to the rapidity with which the channel shifts in the Missouri River, the doctrine of accretion does not apply; generally speaking, there is no merit to this claim as it is well established otherwise. McFerrin v. Wiltse, 210 Iowa 627, 231 N.W. 438; Arnd v. Harrington, 227 Iowa 43, 287 N.W. 292; State of Nebraska v. State of Iowa, 143 U.S. 359, 12 S. Ct. 396, 36 L. Ed. 186. Title by accretion is recognized in this State. Rupp v. Kirk, 231 Iowa 1387, 4 N.W.2d 264, 265, states: "The doctrine of accretion is well established and recognized in this state. To constitute an accretion, there must be a gradual and imperceptible addition of soil to the shore line by the action of the water to which the land is contiguous." See also Coulthard v. Stevens, 84 Iowa 241, 50 N.W. 983, 985. The term "high water mark" has a definite meaning. In Meeker v. Kautz, 213 Iowa 370, 372, 239 N.W. 27, 28, it is said: "`High-water mark' means what its language importsa water mark. It is co-ordinate with the limit of the bed of the water; and that only is to be considered the bed which the water occupies sufficiently long and continuously to wrest it from vegetation, and destroy its value for agricultural purposes."
In the light of the above stated general propositions, we will examine the specific questions presented here.
I. Appellants assert that the trial court erred in holding that the tract in question was accreted land to Lot 11. It is their contention that the land was built not by addition of the soil to the shore line by the action of the water, but is the result of addition to the bed of the river at the outer edge of the dikes or jetties and working toward the shore line therefrom. In Holman v. Hodges, 112 Iowa 714, 84 N.W. 950, 58 L.R.A. 673, we had a situation where an island formed in the channel of the stream and by accretion thereto a bar was formed to the high water mark. We held that the riparian owner gained nothing thereby. See also Rupp v. Kirk, supra. There is a sharp and substantial conflict in the evidence regarding the starting point of this newly built tract of land. We have examined the record, and while we do not deem it necessary to set forth the conflicting testimony, we are satisfied with the finding of the trial court upon this question and hold that the tract in question is accreted land to Lot 11 within the recognized definition thereof. As to the rapidity with which the tract was built, under Appellants' claim that it was not a gradual and imperceptible growth, the period of time in question was about three years. We think this question is answered in McFerrin v. Wiltse, 210 Iowa 627, 231 N.W. 438; and *476 State of Nebraska v. State of Iowa, 143 U.S. 359, 12 S. Ct. 396, 36 L. Ed. 186, both supra.
II. Appellants further claim that conceding the tract to be accreted land, it was built by artificial means and under the law of this State does not belong to the abutting riparian owner. Citing Chicago, B. & Q. Ry. Co. v. Porter, 72 Iowa 426, 34 N.W. 286; Board of Park Com'rs v. Taylor, 133 Iowa 453, 108 N.W. 927. The latter case is where the admitted filling in of the river bank was done by the claimant and rights of a riparian owner were denied to him. The Porter case merely holds that the lawful appropriation of the submerged land or bed of the river cut off accretions to Defendant's land and established a line beyond which no right of accretion can be acquired. Neither of the cited cases are in point.
Apparently the question of title by the riparian owner to accreted land, built by artificial means over which he had no control, has not been decided by this Court; although in Board of Park Com'rs v. Taylor, supra, the question is indirectly mentioned. In an exhaustive annotation in 134 A.L.R. 467, dealing with riparian owners, it is stated as a general rule that a riparian owner is not precluded from acquiring land by accretion or reliction, notwithstanding the fact that the accumulation is brought about by partly artificial obstructions erected by third persons, where the riparian owner had no part in erecting the artificial barrier. We think it is a sound rule, especially in view of the fact that we recognize that the riparian owner has a right which can only be taken from him in accordance with established law; and if necessary that it be taken for public good, upon due compensation. See Hohl v. Iowa Cent. Ry. Co., 162 Iowa 66, 143 N.W. 850; Plattsmouth Bridge Co. v. Globe Oil & Refining Co., 232 Iowa 1118, 7 N.W.2d 409.
It is conclusively established in the record, and recognized by the trial court, that the land in question was created by the slowing down of the current of the stream, due to the dikes or jetties built by the Government. While it is admitted that Appellee did some filling in along the new tract and permitted others to do likewise, it appears that this filling in was done between the new and the old high bank, a sort of leveling off process, and did not aid in the establishment of the new high bank. We hold in accordance with the rule announced in 134 A.L.R. 467, supra, that accretion due to artificial means over which a claiming riparian owner has no control belongs to the riparian owner in the same manner as naturally accreted land.
III. Further, Appellants contend that the rights of the public are paramount to those of the individual and that their title under the patent is superior to Appellee's.
A Government Patent is not conclusive that the Government owned the land at the time of the patent, although it is of the highest evidence of title; and Goverment lands lose and gain by accretion the same as an individual riparian owner. McFerrin v. Wiltse, supra; Bigelow v. Herrink, 200 Iowa 830, 205 N.W. 531.
The record shows that in 1856, the high bank of the river was some distance to the south of Block 13. In 1932, the river had shifted so that the high bank of the river had cut across Lot 11 engulfing the intervening land. At that time, the State of Iowa owned from the thread of the stream to that high water mark which included the land described in the 1940 patent. However, by 1940, when the patent was issued, the channel had shifted to the extent that the high water mark was the new channel line, above referred to. It is thus evident, in view of our holding under Divisions I and II hereof, that the title of the State to the river bed shifted as the accretion grew and in 1940 its title to the land to the north and west of the new channel line had been wiped out and became vested in the riparian owners along the 1932 high water mark. It may be that it was this knowledge on the part of the Appellant City that activated the obtaining of the quit-claim deeds from the various riparian owners, above mentioned.
Appellants refer to the authority granted the City under Chapter 303, Code of 1935, and subsequent amendments thereto. These statutes clearly limit the control *477 and jurisdiction of the City and Dock Commission to property owned by the municipality and grant to the City the power of condemnation over land required for public use, but to which it does not have title. Hohl v. Iowa Cent. Ry. Co., 162 Iowa 66, 143 N.W. 850; Kraut v. Crawford, 18 Iowa 549. We hold that, as to the accreted lands connected with Lot 11, Block 13, the patent in 1940 granted nothing to the Appellant City; that the right of Plaintiff-Appellee is superior to the right of the Appellants under the patent; and the decree of the trial court in that respect is correct.
Appellants have urged several other propositions as a basis for a reversal, including a claim of error in restricting examination of an alleged hostile witness. We have examined these alleged errors and find no merit therein.
IV. As before stated, Plaintiff-Appellee has also appealed from that part of the decree wherein the court failed to determine the boundaries of the accreted land granted to Plaintiff.
Appellee's petition states, Par. 5: "That commencing on or about the year 1931, accretions commenced * * *, said accretions forming and extending in a south-westerly direction from said Lot Eleven approximately three hundred feet * * *". The prayer of the petition is that Defendants be barred from asserting any title to said premises and that title be quieted in Plaintiff. It will be noted that the petition does not allege, nor the decree name, any definite amount of land nor the boundaries thereto. Pl.Ex.M. is a plot showing Lots 10, 11, and 12, Block 13, with the 1932 high water mark together with the area between such high water mark and the new high water mark, or new channel line. The boundary line to the east and west thereof is shown by an extension of the original east and west boundary of Lot 11 to the new channel line on the south.
In Todd v. Murdock, 230 Iowa 1121, 300 N.W. 284, 286, we said: "In apportioning accretion a principal object to be attained is the retention, as nearly as possible, of the former means and right of access to the water. The general rule is to give the several riparian owners a frontage on the new shore proportional to their respective frontages on the old one, connecting the respective points by straight lines", citing Berry v. Hoogendoorn, 133 Iowa 437, 108 N.W. 923. In the cited case we said in 108 N.W. at page 926, "* * * We understand from the authorities on the subject that it would be necessary to ascertain the length of the new shore line between the points of its departure from the old shore line and the length of the corresponding portion of the told shore line, so that the new line might be apportioned in parts corresponding to the parts of the old shore line belonging to the different owners. * * *"
Under the record, in view of the quitclaim deeds from various riparian owners, it would appear as though the only parties interested would be the Appellee and the Appellant-City. It also would appear from the record that the plot Pl. Ex. M. is an improper method of measurement as the lines are to be from a point on the old water mark to a corresponding point on the new line, instead of merely an extension of lot lines. It also appears that the City may have title to a portion of the area to the south of Lot 11, due to Appellant-Railway Company's ownership of Lot 10 and its quit-claim deed to the area to the south thereof. Under this record, it further appears that Appellee-Plaintiff's right may extend to the west of a line drawn south from the original west line of Lot 11, Block 13.
This case differs from the Hoogendoorn case, supra. There, though the system of measurement used was incorrect, this court accepted it, stating in 108 N.W. at page 926, "* * * We are satisfied that the court gave plaintiff all that he showed himself entitled to under the evidence, and that is all we can do. * * *" In this instant case we think the Plaintiff-Appellee has shown himself entitled to more than was granted by the decree, i.e., to have the definite boundaries established between his property and that of the other owner or owners. This is an equity action and while the burden is upon the Plaintiff-Appellee *478 to establish his case, we do not agree with Appellants' contention that Appellee has failed to establish his case and his petition should be dismissed; rather, we think equity and good conscience requires that this case be returned to the trial court for further hearing, if necessary, and establishment of a definite boundary line to the east and west of the accreted land in question.
Affirmed upon Defendants' and Intervenors' appeal. Reversed and remanded on Plaintiff's appeal for further action, as above indicated.
THOMPSON, C. J., and GARFIELD, BLISS, WENNERSTRUM, MULRONEY, and MANTZ, JJ., concur.
SMITH, J., not sitting. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265831/ | 163 Cal. App. 4th 1420 (2008)
THE PEOPLE, Plaintiff and Respondent,
v.
JEROME TORRES, Defendant and Appellant.
No. F053132.
Court of Appeals of California, Fifth District.
June 16, 2008.
CERTIFIED FOR PARTIAL PUBLICATION[*]
*1421 Kim Malcheski, under appointment by the Court of Appeal, for Defendant and Appellant.
Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Michael P. Farrell, Assistant Attorney General, Lloyd G. Carter and Brian Alvarez, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
VARTABEDIAN, Acting P. J.
Defendant Jerome Torres was convicted of one count of attempting to dissuade a witness and one count of issuing a criminal threat. In addition, as to each count, a gang enhancement was found true. At sentencing, the court struck the gang enhancement for each count and imposed an aggravated term of seven years for the criminal threat. Neither *1422 defendant nor the People appealed. The Department of Corrections and Rehabilitation (department of corrections) sent a letter to the trial court asking for clarification of defendant's sentence because the sentence imposed was higher than that allowed by the sentencing triad applicable to the underlying conviction. Defendant was brought back to court and resentenced. At resentencing, the court refused to strike the gang enhancements and imposed a sentence more severe than the original sentence.
Defendant appeals, claiming the trial court's failure to strike the gang enhancements at resentencing violates the principles of res judicata and collateral estoppel, the court's failure to strike the gang enhancements constitutes an abuse of discretion, defendant's sentence amounts to cruel and unusual punishment, and the abstract of judgment needs correction. In addition, defendant argues that any failure of his counsel to argue in the trial court the issues he now raises on appeal constitutes ineffective assistance of counsel. Discussion of these claims is contained in the unpublished portion of this opinion.
A related issue arises here. We have requested that the parties brief the additional issue of whether the trial court erred under Penal Code[1] section 1170, subdivision (d) and the double jeopardy clause in sentencing defendant on recall to a term greater than his initial sentence under the present circumstances: his original sentence fell within the legal range of sentence, and correcting the unauthorized portion of his sentence did not mandate a sentence longer than that originally imposed. We publish the discussion of this dispositive issue, which causes us to remand this matter for resentencing.
FACTUAL AND PROCEDURAL BACKGROUND
Defendant was in the courtroom for his cousin's preliminary hearing in a case involving a driveby shooting. Victim-witnesses O.V. and D.V. were sitting outside the courtroom waiting to be called to testify. Defendant and the cousin's girlfriend came out of the courtroom and sat across from O.V. and D.V. An exchange of words took place which O.V. reported.
Subsequently, defendant was arrested and charged with attempting to dissuade D.V. and O.V. from testifying (counts 1 and 2; § 136.1, subd. (a)(2)), and making a criminal threat against D.V. and O.V. (counts 3 and 4; § 422). In addition, a street gang enhancement was charged as to all four counts. (§ 186.22, subd. (b)(4), (1)(B).)
This matter charging defendant proceeded to trial. At trial, D.V. testified he was in the courthouse on October 17, 2005, with his cousin O.V. waiting to *1423 testify at the preliminary hearing of David Hernandez, defendant's cousin. While D.V. and O.V. were sitting outside waiting, defendant came out of the courtroom with a woman. They sat across from D.V. and O.V. Defendant stared at D.V. and O.V. with a mean expression.[2]
D.V. asked defendant why he was staring at them. Defendant called D.V. a "scrap," a derogatory term used by northern gang members to southern gang members. D.V. said it was not his fault that he was there; it was Hernandez's fault for shooting at them. Defendant responded by saying, "Well, you ain't gonna talk for long." During this time, defendant was looking at D.V. for the most part. After this exchange of words, defendant got up and walked back into the courtroom. D.V. and O.V. reported the incident to police officer Brian Haney, who proceeded to have defendant arrested that day.[3]
Defendant had a jury summons for that day in his pocket at the time of his arrest. When defendant was arrested at the courthouse shortly after the incident, he did not have any gang-related items in his possession, he was not wearing any gang-related apparel, and he did not have any gang-related tattoos.
When defendant was booked into jail, he filled out an intake form. One of the questions was whether defendant had any gang associations; he wrote "WSNG."[4] Defendant had been told that the form was for classification purposes.
Police detective Edward Hinojosa testified as a gang expert at trial. He testified that Hernandez is a Norteno gang member and that his gang is a criminal street gang. It was Hinojosa's opinion that defendant is a gang member because he associated with Hernandez, committed a gang-related offense, and admitted to the booking officers that he associated with the West Side Norteno Gangsters.
On cross-examination, Hinojosa testified that, prior to this incident in the courthouse, defendant had not shown up in any law enforcement gang information, Hinojosa was not aware of a moniker for defendant, even though 90 percent of gang members had a moniker, and he was not aware that defendant had ever thrown hand signs or worn gang attire. Hinojosa testified that most gang members have run-ins with the law, but defendant had not *1424 been convicted of any crimes. No field identification cards, filled out when gang members are found associating with one another, had been filed on defendant.
Hernandez's fiancee testified on defendant's behalf. She said she went to the courthouse with defendant. Defendant had jury duty that day and kept checking the clock to make sure he was not going to be late. She testified that D.V. said to defendant, "What the fuck are you looking at?" and defendant responded, "I'm not fucking looking at you."
Defendant testified on his own behalf. He testified that he went to the courthouse on October 17, 2005, for jury duty. He went to the third floor because his cousin, Hernandez, was the subject of a proceeding. Defendant stated that he had no gang associations. When he was in the hall, D.V. said to him, "What the fuck are you looking at?" Defendant responded, "What do you mean?" The two exchanged words but defendant did not threaten D.V. or O.V. When defendant was booked in the jail, he told the deputy he was not a gang member. He asked the deputy how he should answer the gang association question, and the deputy told him that if his cousin was in a gang he should put "it" down.
The jury returned its verdicts finding defendant guilty of attempting to dissuade a witness (count 1) and criminal threats (count 3) against D.V. In addition, the jury found the gang enhancements to be true. The jury found defendant not guilty of the same charges that listed O.V. as the victim (counts 2 and 4).
The probation officer recommended that the 27-year-old defendant be granted probation "[t]aking into consideration the nature of the current offense, the defendant's lack of prior criminal record and willingness to comply with terms and conditions of probation."
The probation officer's report listed the sentencing ranges for defendant's conviction. For count 1 the range was 16 months, two years, and three years. Imposition of the gang enhancement with this conviction (attempting to dissuade a witness) carries a term of seven years to life in prison. (§ 186.22, subd. (b)(4)(C).) For count 3 (criminal threats) the sentencing range was 16 months, two years, and three years. Imposition of the gang enhancement with count 3 adds an additional five years.
The People filed a sentencing brief detailing the seriousness of this type of offense and asking the court to impose a prison term of seven years to life on count 1 with the gang enhancement. The People erroneously listed the sentencing range for count 3 as three, five, or seven years.
*1425 Defendant filed a sentencing brief asking the court to follow the recommendation of the probation officer and grant probation. The brief also detailed mitigating factors such as defendant's lack of any prior record, the absence of evidence of contacts with law enforcement prior to the instant offense, defendant's legitimate purpose at the courthouse for jury duty, and the fact that D.V. initiated the contact that resulted in defendant's convictions.
Sentencing took place on March 17, 2006. Defendant argued for a grant of probation or at the most a term of seven years on count 3. Defendant argued that a life term for the criminal activity that took place is too harsh. The court responded as follows:
"THE COURT: Well I have problems with the life aspect of it too. I wanted to try to work something out for 12 years.
"I just really feel that what your client did waswas unacceptable. I mean here you have these victims who were subject to a gang attack and in fear for their lives because in one instance they were shot at before and they had the courage to come to court, and your client then threatened them. I've got nono tolerance for that kind of conduct. I got no sympathy for your client.
"Now granted he did not do anything other than threaten them. Tried to intimidate them from testifying, but to me that is a horrendous crime because this gang activity in our community is increasing and youyou need courageous people, like the victims in this case, to look those gang members in the eye and say you're not going to intimidate me. I'm going to do the right thing. That's a hard, hard thing to do. And to not send a message to your client and anybody else who intimidates a witness in these types of cases by giving him a slap on the wrist I'm not going to do, but I think given the conduct here a life term is somewhat harsh.
"What I'm looking at, I wanted to do the 12 years. I can't do that so now what I'm looking at is the aggravated term on Count 3 which would be the 7 years, staying the gang allegation, but if you object to the aggravated term, then I am going to give him the 7 to life.
"MR. GARCIA [defendant's counsel]: I would say with that, this would be the lesser of two evils in his eyes and I would say thatthat would be probably the most appropriate given the circumstances and I don't see another alternative."
The People argued for the term of seven years to life. The trial court questioned the People if the court could strike the special allegation that results in a life term. The People responded that the gang allegation can only *1426 be stricken in unusual cases and claimed the fact that defendant does not have a lengthy criminal history is not a consideration. The People argued that this case was not unusual and the court could not strike the gang enhancements for either count.
The court disagreed with the People and stated it found this to be an unusual case. "This young man is youthful. He has no record. There's no indication he was ever in any gang related activity prior to this instance." The court continued,
"MS. ARNERICH [prosecutor]: But that's not a
"THE COURT: I know. Can I talk? I'm setting forth the grounds why I feel it is an unusual case. Everything you said for the most part about shocking the conscience of the court, there's no more sacred place in terms ofofof witnesses and their protection than a courthouse where this occurred. I agree with all that, but on a youthful offender who's never been in jail before, never served one day and you're asking for 7 to life, and I'm inclined to impose a 7 year state prison sentence that he'll serve 85 percent of that, 6 years for basically three or four statements he made, I think isis punishment and a substantial punishment, and I disagree with the People's position in this matter, but I will turn to you Mr. Garcia because it's difficult to find aggravating circumstances that would warrant the 7 year aggravated term on Count 3 which I'm inclined to impose. That would have to be with your consent. Otherwise I'm going to impose the 7 years to life, so you tell me what your client wants to do, because I don't want this to go up on appeal
"MR. GARCIA [defense counsel]: No. I understand.
"THE COURT:and find that there's no basis for the 7 year aggravated term and if it comes back, then I'm gonna impose the 7 years to life.
"MR. GARCIA: No. He'swe've had discussions and we've seen options, legally and so forth and the court's options and he's fine with 7 years. He's fine with the aggravated.
"MS. ARNERICH: Your Honor, just so the record is clear the 186.22 requires it to be an unusual case. An unusual case does not include a defendant's history. And 136
"(Interruption by the Reporter.)
"MS. ARNERICH: [All] I was trying to point out to the court is the reasons you're setting forth are not technically legal reasons to find the unusual case.
*1427 "THE COURT: I think you would probably have the right to appeal this also.
"MS. ARNERICH: It will be done, Your Honor."
The court struck the gang allegations and imposed the upper term of seven years for count 3 (criminal threats). As to count 1 the court imposed the mid term and stayed that count. (Neither defendant nor the People appealed from this judgment.)
More than a year later, on April 2, 2007, the court received a letter from the department of corrections stating the minute order recites that the court struck the sentence enhancements and imposed the upper term of seven years on count three, but the sentencing triad for count three is 16 months, two years, or three years. The department asked the court to review its file to determine if a correction is required. Citing the case of People v. Hill (1986) 185 Cal. App. 3d 831 [230 Cal. Rptr. 109] the letter also advised, "When notified by the Department of Corrections and Rehabilitation that an illegal sentence exists, the trial court is entitled to reconsider all sentencing choices."
The court issued an order on April 6, 2007, for defendant's transportation back to court for resentencing.
Defendant filed points and authorities arguing that the court's power to resentence is limited to the provisions of section 1170, subdivision (d), and this subdivision provides that the court may not sentence the defendant to a term greater than the initial sentence. In addition, defendant argued the court retained the power to strike the gang allegations. Defendant urged the court to do so.
Resentencing was held on May 30, 2007. The court noted that it had imposed an illegal sentence, having relied on the People's claim that the aggravated term for count 3 was seven years.
Defendant asked the court to strike the gang enhancements once again, based on his complete absence of a prior record and complete absence of any evidence of gang involvement on his part except for this one instance. In addition, defendant pointed out that this was merely an exchange of words while defendant was legitimately at the courthouse in response to a jury summons, completely unlike cases where gang members come to the courthouse for the purpose of intimidating witnesses.
The People argued the court should not strike the gang enhancement because of the seriousness of defendant's conduct.
*1428 The court sentenced defendant as follows:
"THE COURT: I will say this, at the original sentencing I did have some misgivings about sentencing Mr. [Torres] to a life term given the fact that he had no record, and I tried to get around that, but in retrospect I've given this matter a lot of thought. The Legislature sets down the appropriate punishments for crimes that have been committed.
"The defendant was found guilty of the witness intimidation. Was found to have been a gang member and I think it's my duty to impose the prescribed sentence that is set forth in the, in the Code. As a result the defendant's, as to Count 1, the defendant's application for probation is denied.
"Pursuant to Penal Code Section 186.22B4C his prison sentence will be an indeterminate automatic life in prison with the minimum term of seven years as set forth in that Code section. He will be entitled to credits for the time he has received in custody.
"I will point out that even though this is a longer sentence, Mr. Garcia, than originally imposed by the court, the People have provided the court with a case of People versus Reyes, 212 CalApp3rd, 852 [260 Cal. Rptr. 846] . . . that sets forth a well settled rule of law an illegal sentence [may be] corrected any time even if the new sentence is more severe than the original sentence. Certainly that is the case here.
"As to Count 2 [Count 3] the defendant's application for probation is denied. He's committed to state prison for the mid term of two years with an additional and consecutive term of five years pursuant to the gang allegation of 186.22B1B for a total term of seven years. That will be stayed pursuant to Penal Code Section 654."
DISCUSSION
I., II.[*]
III. Imposition of a Higher Sentence After Recall of the Original Sentence
(1) Section 1170, subdivision (d), provides that when a sentence is recalled the court may resentence the defendant as if he or she had not *1429 previously been sentenced, with the limitation that the new sentence may not exceed the initial sentence. The trial court did not believe it was restricted by the limitation in section 1170, subdivision (d) because the original sentence was illegal and required correction, even if the new sentence was more severe than the original sentence.
We disagree with the trial court because correcting the illegal portion of defendant's original sentence does not mandate the imposition of a higher sentence.
The trial court relied on the case of People v. Reyes (1989) 212 Cal. App. 3d 852 [260 Cal. Rptr. 846] to support its decision to impose a sentence longer than the original sentence. In Reyes, the court corrected defendant's illegal sentence on several occasions. On the final occasion, the trial court erred in designating an indeterminate term as the principal term and the determinate term as a subordinate term. This was an unauthorized sentence; correcting it resulted in a longer term of imprisonment because the determinate term was not reduced to one-third of the midterm and it was required that the determinate term be served before the indeterminate term. In rejecting defendant's due process claim, the appellate court stated, "we believe that the disappointment appellant may experience in this situation is not so great as to overpower the well-settled rule of law that an illegal sentence may be corrected at any time, even if the new sentence is more severe than the original sentence." (Id. at p. 857.) The appellate court cited In re Ricky H. (1981) 30 Cal. 3d 176 [178 Cal. Rptr. 324, 636 P.2d 13] as the authority for this well-settled rule.
In In re Ricky H., supra, 30 Cal. 3d 176, in setting forth the maximum period of confinement the juvenile court's dispositional order designated a three-year middle term rather than the four-year upper term for an assault offense. The Supreme Court found that this was erroneous because Welfare and Institutions Code section 726 required "`the juvenile court judge to automatically specify in his commitment order the maximum period of confinement corresponding to the applicable upper terms set forth in [the] Penal Code.'" The Supreme Court stated, "Authority exists for an appellate court to correct a sentence that is not authorized by law whenever the error comes to the attention of the court, even if the correction creates the possibility of a more severe punishment." (In re Ricky H., supra, at p. 191.) The Supreme Court cited People v. Serrato (1973) 9 Cal. 3d 753 [109 Cal. Rptr. 65, 512 P.2d 289] and In re Sandel (1966) 64 Cal. 2d 412 [50 Cal. Rptr. 462, 412 P.2d 806] as authority for this rule.
In People v. Serrato, supra, 9 Cal. 3d 753, the defendants were found guilty of possession of a fire bomb (former § 452). The defendants made a *1430 motion for new trial. The trial court denied the motion for new trial and "[i]n lieu thereof" found the defendants guilty of disturbing the peace (§ 415). The court sentenced the defendants to two years of probation. (Serrato, supra, at pp. 756-757.) On appeal the defendants asserted the trial court could not reduce their convictions to a violation of section 415 because the court cannot convict a defendant of an uncharged offense without his consent. The Supreme Court agreed. (Serrato, supra, at pp. 758-759.) The defendants argued that based on this error by the trial court they were entitled to a dismissal or a judgment of acquittal. The Supreme Court disagreed and found the trial court's actions were unauthorized. (Id. at pp. 762-763.)
The defendants' alternate argument was that if they were not entitled to an acquittal then they were at least protected against more severe punishment on remand. The defendants relied on People v. Henderson (1963) 60 Cal. 2d 482 [35 Cal. Rptr. 77, 386 P.2d 677] to support their position. The court rejected the defendants' argument as follows:
"In Henderson, defendant was convicted of first degree murder and sentenced to life imprisonment. Following reversal of that conviction, he was again tried and convicted, and the jury fixed the penalty at death. This court held that the California Constitution's guarantee against double jeopardy (art. I, § 13) precluded the imposition of a more severe sentence upon retrial.
"In the Henderson case, as in each of the cited cases which followed it, the sentence imposed after the first trial was a lawful one, within the limits of the discretion conferred by statute for the offense of which the defendant had been convicted. The judgments pronounced at the first trials were reversed because of errors having nothing to do with the sentences.
"The rule is otherwise when a trial court pronounces an unauthorized sentence. Such a sentence is subject to being set aside judicially and is no bar to the imposition of a proper judgment thereafter, even though it is more severe than the original unauthorized pronouncement. A few examples will illustrate the principle.
"In re Sandel, supra, 64 Cal. 2d 412, grew out of a petition by a prisoner who attacked his confinement on several grounds, one of them being that the Adult Authority was treating his sentence for escape as consecutive to an earlier sentence, rather than concurrent, as the trial court had pronounced it. This court held that the trial court had no power to make the sentences concurrent in view of the statute which required a consecutive sentence, that the Adult Authority had no jurisdiction to correct the mistake of the trial court, that the sentence must be corrected judicially, and that this court had jurisdiction to do so. This court then held that the sentence for escape be deemed consecutive.
*1431 "In People v. Orrante [(1962)] 201 Cal. App. 2d 553 [20 Cal. Rptr. 480], the trial court placed defendant on probation following a conviction for murder. On an appeal by the People taken under Penal Code section 1238, subdivision (6), the Court of Appeal held that the trial court exceeded its jurisdiction in granting probation, and the case was remanded with instructions to impose the sentence prescribed by law.
"In People v. Massengale [(1970)] 10 Cal. App. 3d 689 [89 Cal. Rptr. 237], the trial court sentenced the defendants to the county jail for the offense of extortion, for which the statute prescribes a prison sentence. When defendants appealed from the judgment, the appellate court noticed the unauthorized sentence and remanded the cases to the superior court for imposition of lawful sentences." (People v. Serrato, supra, 9 Cal.3d at pp. 763-765, fns. omitted.)
The Supreme Court found that the order made by the trial court was in excess of the court's jurisdiction and the defendants were not necessarily entitled to claim the protection of that invalid judgment as a limitation on the court's further actions. (People v. Serrato, supra, 9 Cal.3d at p. 765.)
In the present case, the letter to the trial court regarding defendant's sentence cited the case of People v. Hill, supra, 185 Cal. App. 3d 831 for the proposition that when an illegal sentence exists the trial court has the authority to reconsider all of its sentencing choices. In Hill, the trial court originally sentenced the defendant to an aggregate term of 16 years in prison. The trial court was notified by the department of corrections that the sentence was erroneous and the maximum consecutive sentence for the defendant's four convictions was 14 years. The court resentenced the defendant to a term of 14 years. The defendant appealed, claiming the trial court was authorized to correct only the unauthorized portion of his sentence and was without authority to resentence those portions of the sentence that were authorized. (Id. at pp. 833-834.)
The appellate court disagreed. The court found that the reasoning applied to cases on remand from an appellate court applied equally to cases where the department of corrections notifies the trial court of an illegality in a sentence. "When a case is remanded for resentencing by an appellate court, the trial court is entitled to consider the entire sentencing scheme. Not limited to merely striking illegal portions, the trial court may reconsider all sentencing choices." (People v. Hill, supra, 185 Cal.App.3d at p. 834.) The appellate court found that the 14-year sentence was appropriate and noted that a defendant is not entitled to keep the favorable aspects of his original sentence and eliminate the unfavorable aspects. (Id. at p. 835.)
*1432 In all of the above cases, the defendant either received a sentence equal or lesser than his original sentence, or received a greater sentence only when the court's sentence demonstrated legally unauthorized leniency that resulted in an aggregate sentence that fell below that authorized by law.
We find the case of People v. Mustafaa (1994) 22 Cal. App. 4th 1305 [28 Cal. Rptr. 2d 172] to be more nearly on point with what happened in this case. In Mustafaa the trial court imposed consecutive terms for the gun use enhancements in two counts but imposed concurrent sentences for the two robbery convictions. The appellate court found this to be error. "Mustafaa pleaded guilty to three counts of robbery and admitted that he personally used a firearm during each robbery. The personal gun use enhancements to which he admitted were not separate crimes and cannot stand alone. Each one is dependent upon and necessarily attached to its underlying felony. In separating the felony and its attendant enhancements by imposing a concurrent term for the felony conviction and a consecutive term for the enhancement the court fashioned Mustafaa's sentence in an unauthorized manner under the sentencing procedure. We must therefore remand for resentencing." (Id. at p. 1311.)
The court noted that the prohibition against double jeopardy "generally prohibits the court from imposing a greater sentence on remand following an appeal." (People v. Mustafaa, supra, 22 Cal.App.4th at p. 1311.) The appellate court found that the trial court imposed an unauthorized sentence but on remand double jeopardy protected the defendant's right to not receive a greater sentence.
"In Mustafaa's case the rule against double jeopardy applies because the court imposed a legal aggregate sentence, only fashioning it in an unauthorized manner. The court's error in separating the convictions from their attendant enhancements, though unauthorized by law, does not make the total sentence illegal. On remand the court may not impose a total sentence more severe than the sentence originally imposed." (People v. Mustafaa, supra, 22 Cal.App.4th at pp. 1311-1312.)
(2) Here, the aggregate sentence of seven years imposed on defendant at the original sentencing hearing could have been lawfully achieved by imposing the mid term of two years on count three plus the consecutive enhancement term of five years; it did not fall below the mandatory minimum sentence and was therefore not a legally unauthorized lenient sentence. The one unauthorized component of the sentence originally imposed by the court was not lenientit was in fact more severe than that authorized (the correct upper term for count 3 being three years rather than seven). Principles of double jeopardy as well as the mandate of section 1170, subdivision (d) *1433 require that under these circumstances the trial court may not impose a sentence longer than originally imposed. Thus, the trial court erred in imposing a sentence of seven years to life after it recalled defendant's sentence of seven years in prison. The case must be remanded. On remand, the trial court may not impose a total sentence greater than seven years in prison.
We realize that requiring the trial court to not impose a sentence of over seven years on remand will require the trial court to strike the gang enhancement relating to count 1 since imposition of the gang enhancement would mandate that defendant serve a sentence of seven years to life in prison. The trial court was allowed to strike the gang enhancements if it found unusual circumstances, which it did.[6] We find nothing unauthorized in the court's original decision to strike the gang enhancements because the reasons given by the trial court were sufficient to support its decision. We note the People have not asserted otherwise.[7]
(3) Although remand requires the trial court to strike the gang enhancement in count 1, the court is not required to also strike the gang enhancement in count 3. "When a proper basis exists for a court to strike ... allegations as to at least one current conviction, the law does not require the court to treat other current convictions with perfect symmetry if symmetrical treatment would result in an unjust sentence." (People v. Garcia (1999) 20 Cal. 4th 490, 500 [85 Cal. Rptr. 2d 280, 976 P.2d 831].)
By our stating that the trial court would be authorized to impose the gang enhancement as to count 3 but not as to count 1, we are not suggesting that the court impose the gang enhancement on count 3, we are merely noting that it has the authority to do so. The court must arrive at its sentencing decision utilizing the correct law and considering all of the factors necessary to make that decision with the caveat that the trial court may not impose a sentence greater than seven years.
*1434 IV. Other Issues[*]
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DISPOSITION
The matter is remanded to the trial court for resentencing. On remand the trial court may not impose a sentence that exceeds seven years in prison. In all other respects, the judgment is affirmed.
Wiseman, J., and Hill, J., concurred.
NOTES
[*] Pursuant to California Rules of Court, rules 8.1105 and 8.1110, this opinion is certified for publication with the exception of parts I, II. and IV.
[1] All further code references will be to the Penal Code, unless otherwise stated.
[2] O.V. and D.V. characterized defendant's stares as "mad-dogging." "Mad-dogging" is an expression used by gang members to describe certain behaviors, including looking at someone to intimidate them.
[3] Before this incident occurred, Officer Haney saw defendant mad-dogging O.V. and D.V. He told them that if anyone threatened them or commented to them to let him know.
[4] WSNG stands for West Side Norteno Gangsters, a northern gang.
[*] See footnote, ante, page 1420.
[6] In striking an enhancement in "`furtherance of justice'" the court "may look to general principles, outside the framework of the sentencing scheme, or be guided, instead, by the particulars of the scheme itself, informed as well by `generally applicable sentencing principles relating to matters such as the defendant's background, character, and prospects,' including the factors found in California Rules of Court, rule 410 [now rule 4.410] et seq." (People v. McGlothin (1998) 67 Cal. App. 4th 468, 474 [79 Cal. Rptr. 2d 83]; see People v. Williams (1998) 17 Cal. 4th 148, 160 [69 Cal. Rptr. 2d 917, 948 P.2d 429].)
[7] Although the striking of the gang enhancements was not unauthorized because the court provided sufficient reasons for doing so, the trial court did err in not ordering the reasons for the dismissal to be set forth in the minutes. This is a mandatory requirement that is not subject to harmless error analysis. (People v. Orin (1975) 13 Cal. 3d 937, 943-944 [120 Cal. Rptr. 65, 533 P.2d 193].) The question of whether automatic reversal is required when the trial court fails to set the reasons for the dismissal in the minutes is currently pending before the California Supreme Court in People v. Bonnetta, review granted March 12, 2008, S159133.
[*] See footnote, ante, page 1420. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2265832/ | 69 F. Supp. 698 (1947)
MITCHELL
v.
WRIGHT et al.
No. 102.
District Court, M. D. Alabama, E. D.
January 8, 1947.
*699 *700 Thurgood Marshall, of New York City, and Arthur D. Shores, of Birmingham, Ala., for plaintiff.
William N. McQueen, Atty. Gen. of Alabama, Richard T. Rives, (of Hill, Hill, Whiting & Rives), of Montgomery, Ala., E. C. Boswell, of Geneva, Ala., and W. C. Hare, of Tuskegee, Ala., for defendants.
CHARLES B. KENNAMER, District Judge.
Plaintiff, a Negro citizen of Macon County, Alabama, by bill of complaint, as amended, seeks from the above named defendants, injunctive relief, a declaratory judgment, and, by stipulation, nominal damages, on account of, as alleged in the bill of complaint as amended, failure on the part of the defendants, in their individual capacity, and as members of the Board of Registrars of Macon County, Alabama, to register the Plaintiff as a qualified elector solely on account of his race and color, contrary to the anti-discrimination provisions of the United States Constitution. Amendment 15, § 1.
Answer, denying the material allegations of the plaintiff's bill of complaint as amended, and including a motion to dismiss the class action feature of the suit, was filed by the defendants. The court, by separate order, granted the motion to dismiss the class action part of the suit and limited the suit to an action between the plaintiff Mitchell only and the defendants. At the trial of Complainant Mitchell's case, all evidence that might have tended to make out a class action suit was admitted over objections of the defendants.
The court, having heard testimony offered by the plaintiff and the defendants, on the bill of complaint as amended, and answer; and having heard arguments of counsel for the respective parties, makes the following findings of fact, conclusions of law, and decree, with opinion attached.
Findings of Fact
Macon County, Alabama, is situated in the middle district of Alabama, within the jurisdiction of this court. It has a population, according to the 1940 census, of 27,654 persons, 4,728 or 17.9% being white persons, and 22,926 or 82.1% being Negro persons. There are 3,124 white persons and 13,734 Negro persons of voting age in the County.
The Plaintiff, William P. Mitchell, a Physical Therapy Technician at the Veterans Hospital at Tuskegee, Alabama, possesses all the qualifications and none of the disqualifications necessary to be a qualified voter under the Constitution and laws of the State of Alabama.
Provision is made by the statutes of the State of Alabama, Title 17, Section 53, Code of Alabama, for the Board of Registrars of the several counties in the State to "Make such rules and regulations as it deems proper for the receipt of applications for registration and the accomplishing in as expedient a manner as possible the registration of those entitled to register, but no person shall be registered until a majority of the board of registrars has passed favorably upon such person's qualifications."
These rules and regulations, once established by the Board of Registrars, have the force and effect of law, and are to be complied with the same as if they were statutory before an applicant is registered as a qualified elector.
The Board of Registrars of Macon County, composed of three persons, two of whom are the named defendants in this action, made such rules and regulations as the statute provided, for the orderly registration of applicants. These rules and regulations were fair and necessary for the expeditious registration of applicants. *701 They had the authority, and did, when the situation necessitated it, make new rules and regulations. The authority to make such rules and regulations is not here challenged.
It was prescribed by this Board that an applicant for registration should appear in person before one of the members of the Board and make answer to a printed application blank, which answers were written in the blank spaces provided on the application blank by the member of the Board. The applicant then gave the names of two persons living in the County, who were qualified voters and known to the Board member, as references or vouchers who would certify to the Board of the personal knowledge of the present bona fide residence at the place stated in the application blank.
The names of the two references or vouchers were written on the application blank by the Board member and the applicant then signed the application blank and swore to the correctness of the answers made therein.
After an applicant appeared before one of the members of the Board and made application to be registered as a qualified elector, gave the names of two persons as references or vouchers, and signed and swore to the application form, it was then necessary, under the rules and regulations established by the Board, for one of the persons given as references or vouchers to appear before the Board in its official capacity as a Board of Registrars, and certify to the Board of personal knowledge of the present bona fide residence at the place stated in the application blank.
The law of the State of Alabama provides that two or more members of the Board of Registrars must be present and serving to constitute a legal quorum of the Board, and action had to be by two or more members for it to be the action of the Board.
It was the duty of the applicant to get one of the persons whose name he gave as a reference or voucher to go before the Board and vouch for him or her. If neither of the persons given as references or vouchers appeared before the Board to vouch for the applicant, the applicant was not registered. If one of the persons named as reference or voucher appeared before the Board and vouched for the applicant, and signed the application blank in the space provided for such reference or voucher, the applicant was then registered and a certificate of registration was mailed to him or her.
No person was ever registered by the Board of Registrars of Macon County, during the time these two defendants served on said Board, without one of the named references or vouchers first appearing before the Board and vouching for the bona fide residence of the applicant, and signing the application blank as a reference or voucher in the presence of the Board.
At the session of the Board on or about the 5th of July, 1945, at which time this plaintiff made application to be registered, and while the two defendants were members of the Board, ten Negroes and seven whites were registered as qualified voters. At this session of the Board, some ninety Negroes made application to be registered; only seven white persons applied. Of the ninety Negroes who applied to be registered, only the ten who were registered produced persons to vouch for them, as provided by the rules of the Board. All of the seven white persons who applied for registration, and were registered, produced persons to vouch for them.
Plaintiff Mitchell appeared before the Board on July 5, 1945, and made application to be registered. His application blank was properly filled out, and he gave the names of two qualified citizens of Macon County, W. A. Campbell and G. W. A. Johnston, one a white man and the other a Negro, to vouch for him, or to certify that he was a bona fide resident of the place stated in his application blank. Both of these references were known to the Board; both were qualified voters of Macon County. Neither of them ever appeared before the Board and offered to vouch for the Plaintiff.
Johnston, the Negro, a former Secretary to the late Booker T. Washington, and for many years an employee of Tuskegee Institute, and now, on account of age, a retired employee of that great Institution, testifies that he did not know that the Plaintiff Mitchell had given his name as a reference *702 or voucher; that he never authorized the Plaintiff to use his name as a reference; that, although he was a neighbor of the Plaintiff Mitchell, he was never requested by Mitchell to go before the Board and vouch for him; and that he never went before the Board and vouched for Mitchell. He did vouch, or serve as a reference, for seven other Negro citizens at this session of the Board, who had applied for registration, and all seven were registered and certified as qualified electors by the Board. Johnston also appeared before the Board on several other occasions and vouched for other Negro citizens who had applied for registration, and in every instance such citizens were registered.
Campbell, the white man, testifies that the Plaintiff Mitchell asked him to go before the Board and vouch for him, and that he went to the Court House one day and looked in, but there was a crowd there, so he left and never did go back.
The Plaintiff's application blank is not signed by anyone as a reference or voucher to his being a bona fide resident of the place stated in his application blank.
The Board, when applicants were properly vouched for, registered Negroes and whites alike.
The court does not find a single instance where a person, Negro or white, was registered by the Board without first being vouched for by one of the persons named in the application blank as references or vouchers.
The court is unable to find from the evidence any guilt on the part of the defendants of any racial prejudice or racial discrimination in the performance of their duties as members of the Board of Registrars of Macon County, Alabama.
At times when the Board members were taking applications to be registered, persons given as vouchers or references appeared before one of the members of the Board and stated that he or she would like to vouch for a certain applicant but were told that it would be necessary for them to come back when they, the Board members, were through taking applications, and appear before the Board, or at least two members of the Board. No date or time was set for the person to come back and appear before the Board as a reference or voucher, and the person was never informed as to when the Board would be through taking applications. It was a rule of the Board, applied to Negroes and whites alike, to take all applications before hearing the vouchers or references. There was irregularity and indefiniteness in setting a time when a person given as a reference or voucher could appear before the Board and vouch for an applicant.
There are Negro voters in Macon County. The Board did not require the persons given as references or vouchers to be white persons. Negro citizens were given as references or vouchers on numerous occasions and appeared before the Board and vouched for applicants who were registered by the Board.
Neither of the defendants is now a member of the Board of Registrars of Macon County.
Conclusions of Law
The Constitution of the State of Alabama, and the laws made in pursuance thereof, as relating to the registration of persons as electors, are, so far as they relate to this case, fair and non-discriminatory.
State Officers are presumed to administer constitutional rights equally to all races, and the burden is on the complainant to prove a denial of constitutional rights by racial discrimination.
The members of the Boards of Registrars of the different counties of Alabama are State Officers.
The Boards of Registrars of the different counties of Alabama have the authority to make and establish such rules and regulations as they deem wise to the efficient discharge of the duties of the office.
All rules and regulations established by the Board of Registrars have the force and effect of law and must be applied to all persons equally and without discrimination.
The United States district courts have the jurisdiction to hear and determine the sufficiency of allegations of denial of *703 constitutional rights by denying registration to a citizen solely because of race, color and previous condition of servitude.
A person is not entitled to registration as an elector in Alabama who does not possess the required qualifications, possesses none of the disqualifications, and has complied with the rules and regulations prescribed by the Board of Registrars.
Where an applicant for registration as an elector in Alabama fails to comply with the legal requirements, it is not a denial of constitutional rights to deny registration because of failure to comply with prescribed requirements, if such requirements are made of all persons applying for registration, irrespective of race, color or previous condition of servitude.
The right to register as an elector in Alabama, where all the constitutional and statutory requirements are met, and where all the rules and regulations have been complied with, cannot be denied a citizen merely because he is a member of the Negro race.
A person is not entitled to registration as an elector in Alabama who does not meet the prescribed requirements, where such requirements are fair and legal and are fairly and equally administered.
An allegation of denial of constitutional rights because of racial discrimination is not proved by showing mere irregularities or inefficiency on the part of the Board of Registrars in the performance of its duties.
The burden is upon the plaintiff to prove a denial of constitutional rights by racial discrimination, where such is alleged, and this burden is not met by merely showing that complainant is a member of the Negro race and is qualified in all particulars to be an elector.
A member of the Negro race who possesses all the qualifications necessary to become an elector in Alabama, possesses none of the disqualifications, and has complied with all the rules and regulations established by the Board of Registrars for the efficient discharge of the duties of such Board, is entitled to be registered as a qualified elector; and any device, scheme, or artifice designed by members of such a Board of Registrars, to deny such a person registration solely on account of race, color or previous condition of servitude, is in violation of the Constitution and laws of the United States of America, and of the State of Alabama, and any member or members of a Board of Registrars of any county of the State of Alabama who engaged in such a device, scheme, or artifice, would be guilty of denying to such an applicant for registration a constitutional right.
In a county where the population is predominantly Negro, the fact that there are more white than Negro electors in the county, is not of itself proof of racial discrimination by members of the Board of Registrars.
Order of the Court
It is ordered, adjudged and decreed by the court that judgment be, and the same is, for the defendants, and plaintiff is taxed with the cost, for which execution will issue.
Opinion
It is well settled law that the power to bestow the privilege of exercising the elective franchise on citizens, is primarily the right of the States.
The States can, by proper constitutional provisions or law, prescribe such definite and ascertainable standards, to be applied to all alike who seek to exercise the elective franchise, as the State may see proper to prescribe.
The only limitation on this power of the States, is the limitation imposed by the United States Constitution which prohibits standards which discriminate against persons of certain race, color, or previous condition of servitude; and no State may make or apply a standard which works a racial discrimination. If, in the administration of a perfectly proper and legal standard made by the State, such administration is conducted in a manner to work a racial discrimination, such administration would be in violation of the United States Constitution, and this Court has jurisdiction to grant relief in a proper action to persons against whom such discrimination is practiced.
*704 Where constitutional provisions of a State, the statutory laws, and rules and regulations made in pursuance thereof, are all in strict conformity to the United States Constitution and the amendments thereto, if a Board of Registrars in administering such laws and rules and regulations did so in such manner as to work a racial discrimination in violation of the rights of citizens protected by the Constitution and laws of the United States of America, and that is the contention of the Plaintiff here, the findings and judgment of the court should be, and would be, for the Plaintiff, if such contention was sufficiently supported by the evidence in the case. However, the evidence in this case fails to support such contention.
There was an entire absence of any evidence tending to show any racial prejudice on the part of the defendants in the exercise of their duties as members of the Board of Registrars of Macon County. On the contrary it was affirmatively shown that when Negro citizens appeared before the defendants to make application to register, they were treated with courtesy, and every proper consideration was shown such applicants; and such applicants were at no time required to stand aside or give way to white applicants.
The Plaintiff alleged in his bill of complaint, among other things, that: "He filled out the regular form for registration, he produced two persons to vouch for him, as required by the Board." The evidence was absolutely to the contrary. He never produced anyone to vouch for him, and no one ever did appear before the Board and vouch for him. If the Plaintiff had requested his neighbor, the highly respected and reliable Negro citizen, G. W. A. Johnston, to go before the Board, after he gave his name as a reference, there probably would have been no occasion for this suit by this Plaintiff.
The Plaintiff has failed to present evidence to substantiate the allegations of race discrimination by the defendants, or that they required Negroes to submit to tests not required of white electors applying for registration, or that they carried on a general, habitual and systematic practice of refusing to register Negro residents of Macon County. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2751251/ | November 13, 2014
JUDGMENT
The Fourteenth Court of Appeals
ENTRUST, INC., Appellant
NO. 14-14-00496-CV V.
MEMORIAL HERMANN HOSPITAL SYSTEM, Appellee
________________________________
Today the Court heard the parties’ joint motion to dismiss the appeal from
the judgment signed by the court below on May 1, 2014. Having considered the
motion and found it meritorious, we order the appeal DISMISSED.
We further order that each party shall pay its costs by reason of this appeal.
We further order that mandate be issued immediately.
We further order this decision certified below for observance. | 01-03-2023 | 11-13-2014 |
https://www.courtlistener.com/api/rest/v3/opinions/1097000/ | 50 So. 2d 253 (1951)
MEAD
v.
EAGERTON, State Public Accounts et al.
3 Div. 581.
Supreme Court of Alabama.
January 25, 1951.
*255 Henry C. Meader, of Montgomery, Frank E. Spain, of Birmingham, Willis V. Bell, Jr., of Montgomery, and John P. Ansley, of Birmingham, for appellant.
A. A. Carmichael, Atty. Gen., and M. Roland Nachman, Jr., Asst. Atty. Gen., for appellees.
FOSTER, Justice.
This bill was filed by a taxpayer seeking an injunction, temporary and permanent, against appellees who are the chief examiner of public accounts, the state treasurer, the state comptroller and the state auditor. The prayer for the injunction is as follows: "Restraining and enjoining the respondents, Ralph P. Eagerton, as chief examiner of public accounts of the State of Alabama, John Brandon, as treasurer of the State of Alabama, John Graves, as comptroller of the State of Alabama, and Dan Thomas, as auditor of the State of Alabama, and each of them from using or attempting to use, paying or attempting to pay, any money that has accrued to or that is in the funds of the department of examiners of public accounts in the treasury of the State of Alabama for the purpose of acquiring the official bond of Ralph P. Eagerton as chief examiner of public accounts, from the state surety insurance fund, or for using or for paying out any other money in their possession or under their control for such purpose, or issuing any warrants therefor."
A demurrer to the bill and the prayer for temporary injunction were set down for hearing on August 2, 1950. A decree was rendered on that submission August 3, 1950, in which the demurrer was sustained, and another decree or order denying the motion for a temporary injunction was rendered. An appeal was taken from both decrees: both being appealable. Title 7, sections 755, 1057.
The equity of the bill goes to the validity and effect of the Alabama statute contained in Article 2, Title 28, sections 329 to 338, Code. The substance of that statute may be stated as follows: section 329 sets up a fund in the state treasury to be known as the state surety insurance fund, for the purpose of insuring the state or any and all counties or municipalities in said state against loss of moneys belonging to the state, counties or municipalities on account of certain conduct of such officers.
Section 330 requires the director of finance to determine the total amount of the bonds required to be given by state and county officers, including all officers named in section 329, and the amount of premiums charged for the same.
Section 331 makes the premium charged to be based on commercial rates as of August 1, 1935 by surety companies; and that all such premiums shall be paid to the department of finance at the time of executing the bond by the appropriate state department and by the county treasurers, respectively.
Section 332 directs the disposition of the premium money, and that it "shall constitute a sinking fund and surplus, which shall be subject to the requisition of the director of finance, with the approval of the governor, for the payment of the losses herein provided".
Section 333 provides that "The fund of one hundred thousand dollars transferred from the state insurance fund to the state security insurance fund shall be available only" in case the losses shall exceed the premiums collected. The original Act approved September 7, 1935, General Acts 1935, page 782, carried an appropriation of $100,000.00 from the state insurance fund to the state insurance fund.
Section 334 provides that in event such sinking fund shall reach $500,000.00, the surplus shall be used to reimburse the state insurance fund on account of said appropriation.
Section 335 gives authority to the director of finance and governor to make rules *256 and regulations necessary for the proper and full performance of the Act.
Section 336 provides that the department of finance shall be provided the form of the bonds for execution and shall execute the bonds for the state of Alabama.
Section 337 provides that any person or governmental agency may sue the officer in the county of the officer's residence, and if a judgment is rendered for plaintiff, the state comptroller shall issue a warrant for the same on the certificate of the clerk of the court, which shall be paid by the treasurer from said fund so created.
Section 338 provides that article of the Code shall not be effective except upon a proclamation by the governor so declaring. That was also a feature of the original act.
The bill alleges that the governor made such proclamation on November 25, 1949. That up to that date the Act of 1935, supra, and Code sections, supra, remained suspended and inoperative on the statute books from September 1935 to November 1949 (fourteen years), and that four governors served in that period. That the governor so proclaiming in November 1949 acted solely in his discretion and found and recited no facts upon which it was based.
The bill does not allege that any rules and regulations have been made as required by section 335, supra. That Eagerton, as chief examiner of public accounts, is proposing and arranging to cancel his official bond on or before October 1, 1950, and to execute his official bond with the state surety insurance fund. That the Act is in violation of the Constitution in the respects which we will discuss; also that section 331 is vague, uncertain and its intent cannot be ascertained and given effect, and that it is unenforceable and void.
Motion to Dismiss Appeal.
The first matter called to our attention on this appeal is the motion to dismiss the appeal because the question involved is alleged to have become moot. The situation which it is claimed renders the question moot is as follows: The motion to dismiss alleges that application was made to this Court to restrain the conduct sought to be enjoined pending the appeal. This Court denied said motion. It then alleges that thereafter appellee Eagerton, as chief examiner of public accounts, acquired an official bond with the state surety insurance fund; that Graves, as comptroller, drew a warrant for $62.50, the amount of the premium payable to the department of finance and the state surety insurance fund and charged it to the department of examiner of public accounts. Thereafter that appellees have performed the acts sought to be enjoined, and no further controversy exists between the parties to this cause.
This contention needs separate consideration in respect to the appeal from the separate decrees of the trial court. But there are certain principles of law which should be noted as applicable to them both.
The principle is thoroughly well settled, apparently without conflicting authority, that after service of notice of a bill in equity, which seeks a prohibitive injunction against respondents, but no temporary injunction is issued, and the respondents do the act sought to be enjoined, they do so at the peril of an injunction being ordered on the final hearing, for it is within the power of the court, finally holding that an injunction was proper, to compel a restoration of the status quo.
In Jones v. Securities and Exchange Comm., 298 U.S. 1, 56 S. Ct. 654, 658, 80 L. Ed. 1015, the court observed: "The conclusion to be drawn from all the cases is that after a defendant has been notified of the pendency of a suit seeking an injunction against him, even though a temporary injunction be not granted, he acts at his peril and subject to the power of the court to restore the status, wholly irrespective of the merits as they may be ultimately decided. 1 High on Injunctions (4th Ed.) § 5(a)."
It was held in Texas & New Orleans R. Co. v. Northside Belt Rwy. Co., 276 U.S. 475, 48 S. Ct. 361, 72 L. Ed. 661, where a defendant, with notice of filing of a bill for injunction, proceeds to complete the act sought to be enjoined, the court may by mandatory injunction compel a restoration *257 of the status quo. See, also, Tucker v. Howard, 128 Mass. 361, 363; Town of Platteville v. Galena & So. Wis. R. R. Co., 43 Wis. 493, 506-507.
"Although injunction ordinarily issues to prevent future acts rather than to remedy what is past, a defendant who proceeds to do the things complained of after suit to enjoin them has been filed and notice thereof given to him cannot defeat the injunction on the ground that the acts sought to be restrained have already been done, for he acts at his peril in such case, and subject to the power of the court to restore the status. The court may award complainant damages or compensation for acts done by defendant pending suit to restrain them." 28 Am.Jur. section 6, page 200. See to the same effect section 6, page 200. See to the same effect: 43 C.J.S. Injunctions, § 5, page 411, note 37; 32 Corpus Juris 24, Section 6; Turney v. Shriver, 269 Ill. 164, 109 N.E. 708; New Haven Clock Co. v. Kochersperger, 175 Ill. 383, 51 N.E. 629; Thornton v. Schobe, 79 Colo. 25, 243 P. 617; Werner v. Norden, 87 Colo. 339, 287 P. 644; State of Oklahoma ex rel. Tharel v. Board of Com'rs, 188 Okl. 184, 107 P.2d 542; Smith v. Graham, 161 A.D. 803, 147 N.Y.S. 773.
The principle has been applied to analogous situations. In Walling, Adm'r, v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 65 S. Ct. 1242, 89 L. Ed. 1705, it was held while voluntary discontinuance of alleged illegal activity does not operate to remove a case from the ambit of judicial power, it may justify the court's refusal to enjoin future activity of such nature when it is combined with a bona fide intention to comply with the law and not to resume the wrongful acts. See, Hecht v. Bowles, Price Adm'r, 321 U.S. 321, 64 S. Ct. 587, 88 L. Ed. 754.
In our case of Vaughn v. Brue, 245 Ala. 107, 16 So. 2d 17, 19, 150 A.L.R. 668, we held that though title of a stranger purchasing at judicial sale under erroneous judgment will not be defeated or impaired by subsequent reversal of judgment, a party to the suit who purchases at such sale does so subject to risk that the judgment will be reversed and one who purchases from such party litigant is not a bona fide purchaser, observing: "this case should be determined on principles which are established in this state and which are not based on the doctrine of lis pendens." In Union Central Life Ins. Co. v. Thompson, 229 Ala. 433, 157 So. 852, the foreclosure of the mortgage after filing of a bill to enjoin foreclosure did not oust the court of jurisdiction, but remained subject to equity of the bill and may be ignored or set aside by the court, if complainant is awarded relief. See, McDermott v. Halliburton, 219 Ala. 659, 123 So. 207; Patillo v. Tucker, 216 Ala. 572, 113 So. 1; Brown v. Bell, 206 Ala. 182, 89 So. 659; Alabama Power Co. v. City of Scottsboro, 238 Ala. 230, 190 So. 412(25).
In the case of Alabama Power Co. v. Sheffield, 232 Ala. 53, 166 So. 797, cited by appellees, a bill was filed by appellant seeking to enjoin the performance of a certain contract between it and the United States. The court refused to issue the injunction and sustained demurrers to the bill. An appeal was then taken and thereafter said agreement, the sole basis of the suit, terminated. There was then made a new contract which was no part of the record and was not considered by the trial court.
That is clearly different from the instant case. In our case, instead of abandoning the matter sought to be enjoined, the respondents proceeded to do it. It is also different from Walling v. Youngerman-Reynolds Hardwood Co., supra, and Hecht v. Bowles, supra, which related to conduct continuous in nature, and though that which was complained of was discontinued, it could be re-established and pursued.
In the case of Willis v. Buchman, 240 Ala. 386, 199 So. 892, 132 A.L.R. 1179, also cited by appellees, the defendant appealed from a judgment at law against him. After the appeal was taken the plaintiff in the judgment entered a cancellation and discharge on the record of the judgment. It was held that the motion to dismiss the appeal was proper. The only matter considered on the motion, as controversial, was that since usury was involved, public interest demanded its consideration. The Court held that interest in such matter should not prevent a dismissal. This case *258 is no authority applicable to the facts here presented.
In Bradford v. State ex rel. Esslinger, 226 Ala. 342, 147 So. 182, it was held that a quo warranto case should not be dismissed because the term of the office had expired, for that the emoluments of the office continued to be a matter of controversy.
The question we are now considering on this motion is whether a controversy is moot when it is whether certain funds in the state treasury should stand to the credit of the state surety insurance fund and be subject to its requirements or to the credit of the department of examiners of public accounts and be subject to its requirements. On final hearing the Court may determine that controversy, and if it is held that the fund was improperly placed to the credit of the state surety insurance fund, it could be ordered by the Court to be retransferred. It is not now beyond such power of the Court. So that the equity of the bill and whether it is subject to demurrer has not become moot.
In so far as concerns the order denying a motion for a temporary injunction, we also think that it is not moot. The bill not only seeks to enjoin payment of the premium of October 1950, but also in effect those maturing in October of future years during the term of the chief examiner of public accounts. It was only the premium due October 1950 which has been paid. If it be conceded that a prayer for temporary injunction becomes moot, but while the cause is pending the act sought to be enjoined is done, it does not thereby prevent a temporary injunction as to matters subsequently occurring also included in the prayer. That is the present status.
Moreover, if this Court on appeal in this case holds that the bill has equity and that the temporary injunction should have issued, this Court in so holding and decreeing could also order a restoration of the status existing when the bill was filed and enjoin a change of it pending the suit. Jones v. Securities and Exchange Comm., supra.
So that as to both decrees, we think the motion to dismiss the appeal should be and is overruled.
On its Merits.
We have observed that the surety insurance fund, to which we have referred, originated in an Act of September 7, 1935, General Acts 1935, page 782. Section 8 of that Act is "That this Act shall become effective upon the proclamation of the Governor." As the Act went into the Code of 1940, section 338 of Title 28, provides: "The provisions of this article shall not be effective except upon a proclamation issued by the governor declaring that such chapter is in force and effect."
The bill alleges that this proclamation was issued by the governor on the 25th day of November, 1949. So that according to its terms the Act was dormant and ineffective until that time, both under the terms of the original Act and under the terms of the Code section.
It is our view that that status amounts to a delegation of legislative power, in violation of sections 43 and 44 of the Constitution. The Act did not provide that upon the finding by the governor of certain facts or circumstances to exist, and upon the basis of such finding he should make a proclamation thereof, thereby rendering the Act effective. The legislature cannot confer upon any person or authority the right, in its discretion to be exercised without regard to fixed standards set up by the Act, to declare when an enactment shall become effective. It can only delegate to such person or authority the right to determine the facts and circumstances, whose finding shall determine the effective date of the Act. 16 C.J.S., Constitutional Law, § 133, p. 342, note 28; Ward v. State ex rel. Parker, 154 Ala. 227, 45 So. 655; Porter Coal Co. v. Davis, 231 Ala. 359, 362, 165 So. 93; Morton v. Lusk, 248 Ala. 110(23), 26 So. 2d 849; In re Opinion of the Justices, 249 Ala. 389(3), 31 So. 2d 558; Hawkins v. State Board of Adjustment, 242 Ala. 547(4), 7 So. 2d 775; Patterson v. Jefferson County, 238 Ala. 442, 191 So. 681; Opinion of the Justices, 244 Ala. 386(4), 13 So. 2d 674.
Of course this has no reference to the constitutional requirement of approval of legislative enactments as contained in section 125.
*259 The legislature may make an appropriation and set up a board to determine the facts on which it is declared to operate. John E. Ballenger Const. Co. v. State Board of Adjustment, 234 Ala. 377, 175 So. 387; Dunn Const. Co. v. State Board of Adjustment, 234 Ala. 372, 175 So. 383; State ex rel. v. State Board of Adjustment, 249 Ala. 542, 32 So. 2d 216; Opinion of the Justices, 244 Ala. 386, 13 So. 2d 674; Walls v. City of Guntersville, 253 Ala. 480(6), 45 So. 2d 468.
Section 43 and 44, Constitution, do not invalidate local option laws. Opinion of the Justices, 232 Ala. 60, 166 So. 710; State, ex rel. Crumpton v. Montgomery, 177 Ala. 212, 59 So. 294; Ward v. State, supra; Phenix City v. Alabama Power Co., 239 Ala. 547(3), 195 So. 894; Opinion of the Justices, 253 Ala. 111, 43 So. 2d 3.
We know of no authority in this state which justifies a delegation to the governor of the power to declare what shall be the effective date of an act duly passed, when such declaration is merely the result of his own will and not of his determination of the facts upon which the act itself declares it to be effective.
In Re Opinion of the Justices, 242 Ala. 57, 4 So. 2d 654, the members of the Court were equally divided in opinion as to whether an act was mandatory requiring the governor to make proclamation when a certain state of facts shall occur, or whether it conferred on him power to exercise his discretion in that event. Some of them held it did not impose a duty but a discretion and, therefore, was a delegation of legislative power, in violation of the Constitution. Other members of the Court held the act merely delegated the power to ascertain a fact upon which the statute operated ipso facto. There was no difference of opinion among the justices as to what constitutes a delegation of legislative power, or that the result was properly declared by both groups of the Court upon the basis of their respective judgment as to the proper interpretation of the act.
In the case of Smith v. Speed, 50 Ala. 276, it is said that the purpose of the Constitution in respect to appropriations "was to prevent the executive power from controlling the public moneys."
We do not find from a study of appropriations acts in this state that this theory has not been generally observed by the legislature. Section of 14½ of the Equalization Act of 1927, General Acts 1927, page 449, makes the respective appropriations payable upon a finding by the governor that the condition of the treasury shall warrant it. We have not found that appropriations by acts duly passed and approved were made dependent upon the mere discretion of the governor not based upon some defined circumstances.
Objection is also made to this statute upon other grounds: one is that it is vague, uncertain and ambiguous, and that it is inconsistent with our constitutional form of government. Attention is called to the fact that under section 337, Title 28, Code, in order to make an amount payable out of the surety insurance fund to some other state agency, it is necessary for such agency to sue the officer in the county of his residence for a breach of the obligation of the bond and judgment must be rendered against such officer. The clerk thereupon certifies the existence and the amount of such judgment to the state comptroller who shall issue a warrant upon the treasury for the payment of the amount of said judgment. No provision is made for the director of the department of finance or other state official to participate in the defense of such a suit. According to the terms of the statute, the official sued might not see fit to make defense or might be in collusion with the head of the department in which he is employed, or not be available in Alabama for service of such a suit. There is no provision in this statute which authorizes anyone to intervene so as to make it a contested case. If it be assumed that such intervention would be authorized under the general statute for intervention, Title 7, section 247, Code; Franklin v. Dorsey-Jackson Chevrolet Co., 246 Ala. 245, 20 So. 2d 220, 157 A.L.R. 154, the result would be a suit in a court of traditional jurisdiction in common law form by one agency of the state against another agency of the state. In that situation apparently it would be the duty of the attorney general both to prosecute *260 and defend the same suit. Section 244, Title 55, Code.
It therefore presents a status, as we have said, which is contrary to our constitutional form of government and especially section 14 which prohibits the state from being a defendant in any court of law or equity. This includes state agencies. Dunn Const. Co. v. State Board of Adjustment, 234 Ala. 372(4), 175 So. 383; John E. Ballenger Const. Co. v. State Board of Adjustment, 234 Ala. 377(2), 175 So. 387; State Tax Comm. v. Commercial Realty Co., 236 Ala. 358, 182 So. 31.
It is our view that the Surety Insurance Fund Act is merely a method by which the state may set aside and hold for its purposes a certain amount of money, $100,000.00, transferred from the state insurance fund and also amounts charged to the appropriations of various departments of the state for premiums on the official bonds required by law. Being in one aspect but a transfer to one fund from another and prescribing the circumstances which will control such transfer, the situation is no justification for a suit in a duly constituted court between such agencies. The legislature could very well set up a board to determine when such transfer should be made from one fund to another in keeping with the object sought to be accomplished, as was done in respect to the insurance fund, sections 317-328, Title 28, Code; but to put jurisdiction of such a situation on a court of law is entirely out of harmony with our system.
It is interesting to note that we find only two states in the Union which have undertaken to set up such a proceeding. One is the state of Nebraska, which was considered by the Supreme Court of that state in the case of Laverty v. Cochran, Governor, 132 Neb. 118, 271 N.W. 354. The opinion in that case referred to the fact that the constitution of Nebraska requires public officials to execute official bonds. (Alabama has no such constitutional requirement.) The question then arose of whether or not a bond executed under such authority as this by the proper officer on behalf of the state surety insurance fund was a bond within the meaning of the constitution. The court held that it was not. That the status was, as we have indicated above, merely to provide the circumstances and standards which will control the transfer of public funds from one public agency to another, and that the situation did not call for a contractual obligation. The act was annulled for other reasons: one being that it imposed judicial powers upon executive officers as well as legislative powers. The court held that judicial powers could not be conferred upon administrative officers. That is not, as we have held, a proper interpretation of our Constitution. Section 139 of our Constitution has been held by us to have a different effect. Boyd v. Garrison, 246 Ala. 122(7), 19 So. 2d 385; State Tax Comm. v. Bailey & Howard, 179 Ala. 620, 60 So. 913; State Tax Comm. v. Stanley, 234 Ala. 66, 173 So. 609.
While the authority of the Nebraska court is not controlling here, it does serve to express our view of the nature of such a proceeding set up by the legislature and to illustrate, in our opinion, the want of conformity to our constitutional system.
North Dakota also has had experience in connection with such legislation. Its first case on that subject is that of State ex rel. Miller v. Taylor, 27 N.D. 77, 78, 145 N.W. 425. The act was declared invalid for one reason that it attempts to give to the commissioner of insurance the arbitrary power to determine how much of the fund shall be applied to the payment of losses and how much to other expenses, and because no limitation is put upon the amount which may be used for expenses, and that it is an unwarranted delegation of judicial power to an administrative officer, in that it commits to him the sole right to determine the amount to be given to the subdivision involved, whose officers are insured, and also delegates to an auditing board the power to determine when bonds of officers shall be cancelled. The act in question only had application to county, city, school district and township officers required by law to furnish a bond and made it obligatory for such bond to be made by the bonding department fund. Later another act was passed by the legislature of *261 North Dakota in order to relieve the situation of the objections which annulled the previous act, and in the case of State ex rel. Linde v. Taylor, 33 N.D. 76, 156 N.W. 561, L.R.A.1918B, 156, that act was upheld against the constitutional objections which were made. The court went into great particularity in analyzing the act, pointing out that state did not have constitutional requirements as to official bonds (and therefore was not in the status of the Nebraska court). It may be observed that this act as finally upheld had no provision in it for a suit in common form to determine the amount which would be transferred from the fund which was set up, but provided for administrative machinery for that purpose, and largely upon the basis of that status the statute was upheld. See, also, 66 A.L.R. 796-797; 43 Am.Jur. 184, section 413.
The bill in the instant case does not allege whether the $100,000.00 has been transferred from the state insurance fund to the state surety insurance fund, referred to in section 333, Title 28, Code. The Act of 1935 did contain a provision by which there was transferred from the state insurance fund to the state surety insurance fund the sum of $100,000.00, but that Act never became operative according to its terms until the governor made his proclamation in 1949, and when the governor did so the Act of 1935 had become superseded by the Code section. So that assuming the validity of the statute, as set out in the Code, there is no direct provision for such transfer to be made. The bill does not allege whether such transfer was in fact made.
Section 335 of Title 28, Code, authorizes the director of finance, with the approval of the governor, to make such rules and regulations as are necessary and essential for the proper and full enforcement of this Article, not inconsistent with the Constitution and laws of the state, and section 336 requires said department to provide forms or bonds to be executed, and another section provides that the premium rate shall be based on commercial rates of such transactions as of August 1, 1935.
Even if the proclamation of the governor fourteen years after the enactment of this Act had the effect of putting it in operation, it seems clear that it was not the intention of the legislature for it to be operative without a transfer of said $100,000.00, above mentioned, or until the director of finance and the governor shall make the necessary rules and regulations, including a form of the bond to be executed and an ascertainment of the premium rate based upon the commercial status operative August 1, 1935. The bill not alleging anything about such matters, we cannot assume that they did not occur as required by law. But in the event they have not occurred, it is our belief the Act could not be operative until such event.
Many of these observations are not necessary to the result of this suit since we find that the statute in question is a delegation of legislative authority in violation of sections 43 and 44 of the Constitution of Alabama. But we think such observations are not inappropriate in the event the litigation should not result as here contemplated or the legislature should see fit to amend the law as now set up.
Objection is also made that it violates section 93 of the Constitution, in that it is a lending of credit to an individual, association, or corporation, but we see nothing in the situation which makes it subject to that contention. It is an established policy of this state that section 93, supra, does not prohibit the state from lending its credit to a public corporation organized for the purpose of carrying on public functions. Alabama State Bridge Corp. v. Smith, 217 Ala. 311, 116 So. 695; Rogers v. Garlington, 234 Ala. 13, 173 So. 372.
We do not think it is engaging in business by the state in competition with private enterprise in such way as to make it subject to section 93 of the Constitution.
The result of the foregoing discussion is that, in our opinion, the demurrer to the bill should have been overruled and the temporary injunction granted. A decree will be entered overruling the demurrer to the bill and ordering the issuance of a temporary injunction against further conduct which is sought to be prohibited in the prayer of the bill upon the execution by complainant of a bond payable to the respondents in the sum of $1,000.00 with sureties *262 to be approved by the register of the Circuit Court, in Equity, of Montgomery County, and conditioned as required by law.
Reversed, rendered and remanded.
BROWN, LIVINGSTON, LAWSON, SIMPSON and STAKELY, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1368963/ | 742 P.2d 1051 (1987)
106 N.M. 346
Maria JUSTIZ, Petitioner,
v.
WALGREEN'S and the Travelers Insurance Company, Respondents.
No. 16830.
Supreme Court of New Mexico.
September 16, 1987.
Melvin L. Robins, Albuquerque, for petitioner.
Miller, Stratvert, Torgerson & Schlenker, P.A., Alice Thomlinson Lorenz, Albuquerque, for respondents.
OPINION
WALTERS, Justice.
Respondents Walgreen's and the Traveler's Insurance Company appeal a worker's compensation award on the ground that the trial court, when computing benefits due, improperly aggregated petitioner's earnings from both of the worker's employments. We granted certiorari from the court of appeals' decision reversing the trial court, and now we reverse the court of appeals.
The issue is whether a worker's average weekly wage for compensation benefits is to be computed on the basis of wages the worker was earning in the employment in which she was injured, or on the basis of her total earnings from all of her employments.
FACTS
Petitioner was employed as a full-time teacher in the Albuquerque Public School System and, during non-school hours, as a part-time liquor store clerk at Walgreen's. On March 23, 1984, while lifting a case of liquor at her job at Walgreen's, she suffered a compensable injury to her back. The trial court determined that as a result of the injury petitioner was totally unable to perform her duties as a liquor store clerk and was unable, to the extent of forty percent, to perform her job either as a teacher or as a sales clerk. The court held that she had sustained a combined disability of sixty percent.
The trial court aggregated petitioner's teaching and Walgreen's wages to determine the average weekly wage upon which *1052 her benefit amount would be calculated. A divided panel of the court of appeals reversed and held that the wage calculation provisions of the Workmen's Compensation Act, NMSA 1978, Section 52-1-20, as interpreted in Eberline Instrument Corp. v. Felix, 103 N.M. 422, 708 P.2d 334 (1985), do not allow aggregation of wages under the facts of this case. We do not agree that either the statute or Eberline mandated that conclusion, and conclude that Judge Garcia correctly stated the law in his dissenting opinion.
Section 52-1-20 governs the method for computing average weekly wages. It provides, in pertinent part:
A. whenever the term "wages" is used, it shall be construed to mean the money rate at which the services rendered are recompensed under the contract of hire in force at the time of the accident, * * *
B. average weekly wages for the purpose of computing benefits provided in the Workmen's Compensation Act shall, except as hereinafter provided, be calculated upon the monthly, weekly, daily, hourly or other remuneration which the injured or killed employee was receiving at the time of the injury, * * *
C. provided, further, however, that in any case where the foregoing methods of computing the average weekly wage of the employee by reason of the nature of the employment or the fact that the injured employee has not worked a sufficient length of time to enable his earnings to be fairly computed thereunder, or has been ill or in business for himself, or where for any other reason said methods will not fairly compute the average weekly wage; in each particular case, computation of the average weekly wage of said employee [shall be made] in such other manner and by such other method as will be based upon the facts presented [to] fairly determine such employee's average weekly wage[.]
(Emphasis added.)
We held in Eberline that a worker's compensation benefits were to be computed on the average weekly wage being earned by the employee at the time of his accident rather than on the average weekly wage he had been earning in his primary employment at some time prior to the accident. The employee, Felix, had been working for Eberline since 1978 as a utility worker. In 1982, Felix was given the choice of being laid off or accepting a lower-grade job as a machine operator at $6.35 per hour. Felix chose to continue working at the lower wage, and it was as a machine operator that he was injured on December 9, 1982. Eberline, 103 N.M. at 423, 708 P.2d at 335. We reasoned that, under the plain wording of Section 52-1-20(B)(4),[1] Felix's benefits pursuant to the Workmen's Compensation Act were to be calculated upon the hourly remuneration he was receiving at the time of the injury. It was unnecessary to consider Section 52-1-20(C) to determine Felix's benefits, because the method provided under Section 52-1-20(B)(4) fairly computed what Felix's average weekly wage was at the time of the accident. We observed that Section 52-1-20(C) would be controlling in unusual circumstances, as in Kendrick v. Gackle Drilling Co., 71 N.M. 113, 376 P.2d 176 (1962) (injured worker's income erratic because he worked only a few days at each job), where a worker's average weekly wage could not "fairly be determined by the precise methods outlined in Section 52-1-20(B)." Id. at 424, 708 P.2d at 336.
Respondents vigorously urge that Eberline would limit determination of the average weekly wage to the amount petitioner was receiving under a specific "contract of hire in force at the time of the accident," and therefore was, as the court of appeals decided, only the hourly wage from her part-time employment at Walgreen's. They contend that since petitioner's average *1053 weekly wage at Walgreen's is fairly determinable by the precise methods outlined in Section 52-1-20(B), resort to Subsection (C) is inappropriate.
That argument overlooks the portion of Section 52-1-20(C) which directly applies to "any other reason [Subsection B] will not fairly compute the average weekly wage." Eberline does not preclude the aggregation of petitioner's wages from her two separate but concurrent employments if that is necessary to fairly compute petitioner's average weekly salary and, in fact, Eberline offers absolutely no insight on the question of an average weekly wage derived from more than a single employment. On the other hand, Eberline makes it clear that fair computation is the essence of the Section 52-1-20 calculation. Subsection (C) permits the trial court, in cases where a worker's weekly wages are for any reason not fairly determinable by the provisions of Subsections (A) or (B), to utilize such other manner or method as will fairly make that determination.
The primary test for disability entitling a worker to compensation is the capacity to perform work. Medina v. Zia Co., 88 N.M. 615, 617, 544 P.2d 1180, 1182 (Ct.App. 1975), cert. denied, 89 N.M. 6, 546 P.2d 71 (1976). The trial court determined petitioner to be sixty percent unable to perform any work for which she was fitted by age, education, training, general physical and mental capacity, and previous work experience. Since, according to the trial court's findings, the injury occurring on the part-time job disabled petitioner from working at 100% capacity at either of her jobs, her capacity as a wage earner patently was impaired beyond the limits of the part-time job. Compensation benefits, therefore, were logically based on her combined wages and correctly reflected her reduced earning capacity in both employments. See American Uniform & Rental Serv. v. Trainer, 262 So. 2d 193, 194 (Fla. 1972); 2 Larson, Workmen's Compensation Law, § 60-31(c) (1987).
It is the earning capacity of the whole person, not the capacity of the part-time or full-time worker that is at issue. See American Uniform & Rental Serv., 262 So.2d at 194. The fact that petitioner's earnings with the school system have not diminished does not mean her earning capacity has not been adversely affected. Actual earnings are not the same as earning capacity. Mascarenas v. Kennedy, 74 N.M. 665, 669, 397 P.2d 312, 315 (1964); County of Maricopa v. Ind. Comm'n of Arizona, 145 Ariz. 14, 19, 699 P.2d 389, 394 (App. 1985). Fairness mandates consideration of what petitioner would have earned, in total, had she not been injured. According to 2 Larson, Workmen's Compensation Law, § 60.31(a) (1987) at 10-688, a growing number of jurisdictions have held earnings from more than one employment source are to be combined in the calculation of average weekly wages, whether or not the employments are related or similar.
Responding to the trial court's justification for aggregating wages as providing fairness to the employee, Walgreen's argues that the ruling is not fair to the employer, and grants petitioner more in benefits than she had earned previously from both jobs. Respondent emphasizes that petitioner is still able to perform her primary job as a teacher, and in the meantime she has been given a raise; that, with her disability benefits, she now receives more each year than she earned while working at two jobs. There is ample authority, however, for the proposition that an individual may work while still disabled and entitled to worker's compensation benefits. Davis v. Homestake Mining Co., 105 N.M. 2, 3, 727 P.2d 941, 942 (Ct.App.), cert. quashed, 104 N.M. 702, 726 P.2d 856 (1986); Roybal v. County of Santa Fe, 79 N.M. 99, 102, 440 P.2d 291, 294 (1968). Walgreen's has not faced the fact that the amount which petitioner would be earning were it not for the injury would include earnings from all sources that is, from both Walgreen's and the school system including the raise she received subsequent to the accident.
As Professor Larson has noted in his text, 2 Larson, Workmen's Compensation Laws § 60.31(c) (1987), at 10-713, fairness to the employee and fairness to the employer *1054 upon whose job the employee was injured are not necessarily symmetrical nor should the assessment of fairness be judged by the same standards. To the employee, the injury resulting in lost wages is everything; to the employer (and even more to the carrier), this is just one case among many. Only the injured worker bears the burden of reduced wages. But any unfairness to the employer, in the form of the extra cost of an injury to its employee who also is concurrently employed, is eventually offset by the times the employer may benefit when the injury occurs in the employee's other employment. Spreading the risk is the essential concept of a system such as workers' compensation. Id. In our view, that is the answer to the discussion of liability raised in the dissent hereto. Liability for compensation is an issue entirely separate from the calculation of benefit entitlement. Our resolution of this case in no way conflicts with but, indeed, reinforces the manner of assessing liability against the employer for whom services were being performed at the time of the injury, as enunciated in Clemmer v. Carpenter, 98 N.M. 302, 309, 648 P.2d 341, 348 (Ct.App. 1982).
For the foregoing reasons, we reverse the majority decision of the court of appeals, agreeing with rationale of Judge Garcia's dissent. The judgment of the trial court is AFFIRMED.
IT IS SO ORDERED.
SCARBOROUGH, C.J., and SOSA, Senior Justice, concur.
STOWERS, J., dissents.
RANSOM, J., not participating.
STOWERS, Justice, dissenting.
I dissent.
The majority argues that the district court was justified in aggregating petitioner Maria Justiz's (Justiz) wages from her two separate but concurrent employments pursuant to NMSA 1978, Subsection 52-1-20(C). However, by the clear and unambiguous language of this statute, Subsection C is only appropriate when the average weekly wage cannot be fairly computed by the methods of computation provided for in Subsection B. No evidence was introduced in this case to prove that Justiz's average weekly wage could not be fairly computed according to Subsection B. The majority's reliance on Subsection C is therefore misplaced.
In its findings of fact and conclusions of law, the district court stated:
Combining the compensation rate for the two jobs (up to the maximum) was done because of § 52-1-25 N.M.S.A. 1978. Disability is decided by all of the work which a person is fitted. If disability can be denied because a workman can do other work than what he was doing at the time of the accident, then it seems only fair that all the work he was doing should be considered for determining the amount of compensation. [Emphasis added.]
What the district court considered "fair" under the circumstances should not be confused with the statutory term "fairly computed." As interpreted by this Court earlier in the case of Kendrick v. Gackle Drilling Co., 71 N.M. 113, 376 P.2d 176 (1962), Subsection C (virtually identical to the former subsection at issue in the Kendrick case) is to be used in circumstances where, because of some practical difficulty such as the employee working only four days at the job, the actual mathematical computation of the employee's average weekly wages cannot be fairly computed by Subsection B of the same statute. Subsection C itself provides several examples of the type of situation wherein the "methods of computing the average weekly wage of the employee" cannot be fairly computed. Such examples include "the nature of the employment or the fact that the injured employee has not worked a sufficient length of time to enable his earnings to be fairly computed thereunder, or has been ill or in business for himself." The present case simply does not fall within the category of cases described in Subsection C.
Moreover, New Mexico has already addressed the issue of workmen's compensation liability in dual employment situations. The case of Clemmer v. Carpenter, 98 *1055 N.M. 302, 648 P.2d 341 (Ct.App.), cert. denied, 98 N.M. 336, 648 P.2d 794 (1982), described dual employment as follows:
Dual employment occurs when a single employee, under contract with two employers, and under the separate control of each, performs services for the most part for each employer separately, and when the service for each employer is largely unrelated to that for the other. In such a case, the employers may be liable for workmen's compensation separately or jointly, depending on the severability of the employee's activity at the time of injury.
Id. at 308, 648 P.2d at 347 (quoting 1C A. Larson, The Law of Workmen's Compensation § 48.40 (1980)). Next, the court went on to very clearly specify how liability for workmen's compensation was to be determined. It stated:
In dual-employment situation, if the accident occurs when the work[er] is clearly performing services for only one employer, then that employer is liable for any workmen's compensation benefits. If, however, the services being performed at the time of the accident cannot be attributed to a specific employer, but are services performed for both employers, then both employers are liable.
Id. at 309, 648 P.2d at 348 (emphasis added).
While the court of appeals' dissent, in which the majority relies in this case, summarily dismissed the Clemmer case as being inapplicable in that the Clemmer case dealt with the doctrine of dual employment while the present case is one of concurrent employment, I find this a distinction without substance. Justiz's employment situation fits squarely within the Clemmer definition of dual employment. Consequently, since the accident occurred while Justiz was clearly performing services for only one employer, Walgreen's, then only Walgreen's should be liable for any workmen's compensation benefits. See Clemmer.
The use of the term "fairly computed" in the statute is presumed to carry its ordinary meaning. See State v. Lujan, 103 N.M. 667, 670, 712 P.2d 13, 16 (Ct.App. 1985), cert. denied, 103 N.M. 740, 713 P.2d 556 (1986) (citations omitted). Accordingly, I think the district court erred in aggregating Justiz's wages as there was nothing to prevent their fair computation pursuant to Subsection B as provided by the Legislature.
I believe the court of appeals' majority opinion correctly disposed of the issues in this case. I therefore dissent.
NOTES
[1] Section 52-1-20(B)(4) provides:
[W]here the employee is being paid by the hour, the weekly wage shall be determined by multiplying the hourly rate by the number of hours in a day during which the employee was working at the time of the accident, or would have worked if the accident had not intervened, to determine the daily wage; * * | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369563/ | 530 F. Supp. 190 (1982)
MIDLAND INSURANCE COMPANY, Intervening Plaintiff and Mildred Prioleau, Administratrix of the Estate of John Prioleau, Plaintiff,
v.
DELTA LINES, INC. and Strick Corporation, Defendants.
Civ. A. No. 79-1950-1.
United States District Court, D. South Carolina, Charleston Division.
January 19, 1982.
*191 Grover C. Seaton, III, and Hans F. Paul, Charleston, S.C., for plaintiff.
John W. Minor, Hilton Head Island, S.C., and Edward T. Brennan, and Richard A. Rominger, Savannah, Ga., for intervening plaintiff.
Pledger M. Bishop, Jr., Charleston, S.C., for defendant Delta Lines, Inc.
Marvin D. Infinger, and Charles H. Gibbs, Charleston, S.C., for defendant Strick Corp.
ORDER
HAWKINS, District Judge.
This action brought in this court's diversity jurisdiction is before the court on amended complaint filed November 3, 1980. The suit arises out of the death of plaintiff's intestate while participating in the shifting of a cargo container on the deck of the SS DELTA ECUADOR, a vessel owned by defendant Delta Lines, Inc. (Delta). At the time of his death, plaintiff's intestate was employed by Southeastern Maritime Company, the stevedore engaged to work the ship.
The amended complaint asserts claims sounding in strict tort liability and negligence against defendants, alleging that the container was defectively manufactured, designed and maintained. Delta answered and crossclaimed against Strick Corporation alleging that Strick, as manufacturer, was responsible for any damages resulting from the defective nature of the container. Strick counterclaimed to the cross claim, alleging a contractual indemnity agreement between it and Delta. The present motion is for summary judgment as to the cross claim and counterclaim. Strick seeks an order placing responsibility on Delta Lines for the defense of the suit and for payment of any judgment which might be rendered against Strick Corporation as a result of the action. For the reasons stated below the motion is granted.
As is evidenced by an equipment lease agreement dated September 17, 1976, Strick Corporation owned the container, # PLIU-203274-6, allegedly responsible for the *192 death of plaintiff's intestate, and leased the same to Prudential Lines. It further appears that defendant Delta was the sublessee of Prudential Lines and assumed the terms and conditions under the lease agreement. Delta has admitted the authenticity of the lease and sublease agreements in response to requests for admission.[1]
Two provisions contained in the lease agreement, assumed by Delta, establish its indemnity obligation to Strick. Paragraph ten of that document reads in part as follows:
[L]essee hereby specifically indemnifies lessor, and agrees to hold lessor harmless, against all loss and damages lessor may sustain or suffer because of ... (c) the death of, injury to, and damages to the property of, any person as a result of, in whole or in part, the use or maintenance of the equipment of any thereof while in the custody, possession or control of lessee or anyone claiming by, through or under lessee.
Paragraph eleven contains in part the following language: "Lessee further agrees to procure, at lessee's sole cost and expense ... policies of insurance ... insuring the lessee against ... the hazards specified in (c) above [indemnity due to death or injury] ...."
The answer of Delta and the deposition testimony of Robert Stephen Marvin of the Charleston Masters, Mates & Pilots Association establish that plaintiff's intestate was killed as the result of the use of the equipment while in the custody, possession or control of Delta as described in paragraph ten of the lease.
Delta's answer admits the allegation of paragraph four of the amended complaint that the SS DELTA ECUADOR was owned by Delta and that the container in question was "owned and maintained" by Delta at the time of the accident.
Mr. Marvin's testimony indicates that he was present on the SS DELTA ECUADOR on the date of the accident which caused plaintiff's intestate death (Page 6, lines 21 through 25, Page 7, lines 1 through 5); and that the container which is the subject of the complaint was being moved or shifted from an outboard position inboard onto the hatch of the vessel to allow further loading of the vessel. (Page 14, lines 12 through 21).
It is therefore uncontroverted that the subject container was in use and under the "custody, possession, or control" of Delta at the time of the accident, being moved on the deck of its ship in order to allow further loading of the vessel.
Although there is a general reluctance by the courts to construe indemnity provisions so as to cover the fault of the indemnitee [Strick], the clear language used in paragraph ten and Delta's agreement to procure insurance to cover liability for the death or bodily injury described in paragraph ten compel the court to conclude as a matter of law that the defense of the action and payment of any judgment rendered against Strick Corporation is the responsibility of Delta.
First, the language in paragraph ten standing alone, supports this conclusion. In Southern Railway v. Springs Mills, Inc., 625 F.2d 496 (4th Cir. 1980), the Fourth Circuit Court of Appeals was called upon to construe the effect of an indemnity agreement in a personal injury context where the indemnitee's negligence was solely responsible for the injury to plaintiff. There the railway and Springs Mills had entered into an agreement for construction and maintenance of a private track servicing the Mills' plants. Springs Mills agreed to provide minimum clearance on either side of the track. The agreement was supplemented to include an indemnity agreement whereby Springs Mills undertook to "indemnify and save harmless the railway company from and against the consequences of any loss of life, personal injury, or property loss or damage which may be caused by, result *193 from, or arise by reason of or in connection with, any limited or restricted clearances for said industrial track."
A brakeman for the railway was injured when a gate allowing entry into the Springs Mills yard knocked him from the train, causing him to fall under it and crushing his foot. The cause of the injury was a failure on the part of another railway employee to secure the gate, absolving Mills from any direct responsibility.[2] It was argued that because no specific reference was made to indemnification against injury caused by the railway's own negligence, the indemnity provision should not inure to its benefit.
The court noted that the indemnity language referred to "any loss of life, personal injury ... which may be caused by, result from, or arise by reason of or in connection with, any limited or restricted clearances"; it was held that the language "obviously described a type of loss which could arise from the negligence of the railway as well as that of Springs Mills. Yet the parties agreed that Springs Mills would indemnify against any such loss ...." The lower court judgment of indemnity was affirmed.
The language contained in paragraph ten covering "all loss lessor [Strick] may sustain or suffer because of ... death ... as a result of, in whole or in part, the use ... of the equipment ... while in the custody, possession or control of lessee ...," is more specific and clearer than the language construed in Springs Mills. See also Bentley v. Palmer House Co., 332 F.2d 107 (7th Cir. 1964) and Jacksonville Terminal Co. v. Railway Express Agency, 296 F.2d 256 (5th Cir. 1961) (construing language similar to that in paragraph ten as creating an indemnity obligation for injury caused by the fault of the indemnitee).
Delta maintains that the indemnity clause here should be treated differently than the clause in Springs Mills because the claims triggering the indemnity provision are based on notions of products liability.[3] First, the issue before the court is one of contract construction. The theory triggering the indemnity contract has no effect on whether the language of that agreement is ambiguous or not. Second, the requirement of insurance procurement by Delta to cover indemnity arising out of death or injury described in paragraph ten effectively guts any policy argument which might be made where the underlying claim is based on products liability notions.
If one can create any doubt as to the effect of the language in paragraph ten, the requirement of insurance procurement by Delta as required by paragraph eleven conclusively establishes that it must indemnify Strick Corporation for death or injury resulting from any defect which might be established due to Strick's manufacture or design of the container in question.
Delta's position is that the indemnity agreement does not cover defects for which Strick could be held liable on theories of strict tort liability or negligence, but only for those delicts for which Delta could be held responsible, presumably alteration of the containers, lack of maintenance, etc., which caused the failure of the container. If such were the case, the provision providing for insurance would be superfluous for Strick cannot be held responsible for delicts such as alteration by Delta;[4]and Strick could have no conceivable interest in forcing Delta to insure itself against claims for which Strick could not be liable. The only conclusion which can be reached, as is borne out by the clear language of the indemnity and the procurement of insurance agreement, is that the indemnity agreement here is a conscious risk-shifting device by which *194 the lessee (or here sublessee) assumed the cost of insurance procurement to guard against claims arising out of the use of the equipment.
Delta's argument that the policies giving rise to strict tort liability will be sacrificed by the court's construction of this agreement as imposing indemnity responsibility on it is misplaced. The policy behind strict tort as enunciated in Comment c to section 402A of the Second Restatement of Torts is to place the burden of accidental injuries on those who "market" the goods, the risk of which can be paid for by purchasing liability insurance. The agreement by Delta to procure liability insurance thus subserves the purpose of protecting the public from defective products by shifting the risk of payment to one better able to absorb it regardless of fault.[5]
Other courts dealing with a lease-indemnity agreement (although dealing with the lease of a fixed structure as opposed to a container) have held that the indemnitor's agreement to procure liability insurance conclusively established an indemnity in favor of an indemnitee whose fault arguably caused the injury complained of.
In Hogeland v. Sibley, Lindsay & Curr Co., 42 N.Y.2d 153, 397 N.Y.S.2d 602, 366 N.E.2d 263 (1977) a lease was entered into containing an indemnity agreement which failed to explicitly mention the indemnitee's negligence. Included in the agreement, as here, was a provision obligating lessee to obtain public liability insurance inuring to the benefit of the lessor. An injury occurred and lessor was found proportionately at fault. It sought to enforce the indemnity agreement. Lessee indicated that without a clear specification, the indemnity agreement should not be construed to cover the indemnitee-lessor's negligence. The court noted that the intent of the parties, as garnered from the contract as a whole, should be determinative of the construction given the indemnity "rather than the semantic stereotypes with which an agreement may be phrased." Id. 397 N.Y.S.2d at 606, 366 N.E.2d at 266. The court observed that the parties involved were sophisticated business entities dealing at arm's length and indicated that the language was broad enough to include indemnification against lessor's negligence. Vital to the court's decision that lessor's negligence was covered by the indemnity was the insurance procured for its benefit. The court noted that lessor was not exempting itself from liability but rather that the parties were allocating risks between themselves through the employment of insurance.
Also instructive is Hastreiter v. Karau Buildings, Inc., 57 Wis. 2d 746, 205 N.W.2d 162 (1973). There the indemnity provision provided a general hold harmless agreement as well as an agreement by lessee to carry and pay for public liability insurance. The court held that,
The purpose of the public liability insurance clause can only be to protect the landlord from some liability which it sustains as the owner of the building. But, having contracted away the right to possession, it is liable only for structural defects or a failure to maintain or repair the building.
The public liability insurance clause is intended to protect the landlord from the effects of his own negligence. The only issue is the scope of the protection accorded. To construe the indemnification provision as the appellant argues would be to *195 make the hold harmless clause surplusage.
Id. 205 N.W.2d at 163-64, (citations omitted).
The same analysis applies here. If, as Delta urges, the hold harmless agreement indemnifies Strick only against the alteration or the failure to maintain the container after possession was ceded to Delta, the agreement would be nudum pactum; for Strick could have no liability for subsequent alteration of the container or failure to maintain it once it surrendered possession.[6] To adopt Delta's position, therefore, would be to force Delta to procure insurance for Strick's benefit, covering risks for which Strick could not be liable. Strick could have no conceivable interest in forcing that situation. The two clauses read together contemplate full indemnity accruing to Strick's benefit.
The South Carolina Supreme Court's acknowledgment of the prevalence of liability insurance as a factor in overruling longstanding common law immunities provides this Court with a compelling analogy. In overruling charitable immunity to a limited degree in Brown v. Anderson County Hospital Association, 268 S.C. 479, 234 S.E.2d 873 (1977), and in totally abrogating that immunity in Fitzer v. Greater Greenville South Carolina YMCA, 282 S.E.2d 230 (S.C.1981), the court noted that the general availability and procurement of liability insurance by charitable institutions to a large degree gutted the policy justifications for the immunity. The court in Fitzer noted that "the general availability of liability insurance ... underscores the unreasonableness of ... continued adherence to this archaic doctrine [of charitable immunity]." Id. at 231. (Citation omitted.) See also Elam v. Elam, 275 S.C. 132, 268 S.E.2d 109 (1980) (abolishing parent-child immunity, noting the prevalence of liability insurance as bearing on its abrogation of the immunity).
Certainly if the existence of liability insurance can alter deeply-rooted common law immunities, Delta's obligation to procure excuses this court from applying the rule of construction urged by it, viz., that without specific reference to the indemnitee's fault an indemnity agreement will not be construed to cover the same. After all, the general rule of construction which governs all others is that the intention of the parties controls, with every provision of the agreement being read to give each its proper effect so as not to render any provision superfluous. See generally Southern Railway v. Springs Mills, 625 F.2d at 498.
Finally, the term of the lease and the hefty consideration involved bolsters the conclusion here reached. The lease is for a term of eight years, divesting Strick of all control and maintenance responsibilities for that period. (See paragraph ten.) Consideration for the lease was $2,234,064.00, payable in ninety-five (95) monthly installments of $23,271.50. These terms were assumed by Delta on its assumption of the lease.
The lengthy term of the lease, the hefty consideration, and the inability of Strick to control the units or maintain them all combine to bolster the clear language of the tenth paragraph and the requirement of the eleventh in placing responsibility on Delta (as sublessee) for "all loss and damage ... due to the death of ... any person as a result in whole or in part, the use or maintenance of the equipment ... while in the custody, possession and control of lessee." Properly structured economic risk-shifting in such a context is to be expected, especially in light of the recently evolved no-fault theories of liability against manufacturers of products.
Based on the above, Strick Corporation's motion for summary judgment of indemnity over against Delta is granted. Delta is therefore ordered to assume defense of the action against Strick Corporation and to pay any judgment rendered against Strick Corporation. The Clerk will enter judgment accordingly.
AND IT IS SO ORDERED.
NOTES
[1] # PLIU-203274-6 is described in the lease agreement which has been authenticated by requests for admission.
[2] There was a slight violation of clearance of the fence post on which the gate was attached, but it did not contribute to the injury.
[3] Cases cited by Delta are distinguishable in any event. See, e.g., Rourke v. Garza, 511 S.W.2d 331 (Tex.Civ.App.1974) and K & S Oil Well Serv., Inc. v. Cabot Corp., 491 S.W.2d 733 (Tex.Civ.App.1973) where the court's holding of no indemnity was based as much on the non-conspicuousness of the indemnity clause as any other rule of construction.
[4] See Restatement (Second) of Torts § 402A, Comment g (1965).
[5] The court, after the hearing on this motion, required Delta to inform it whether or not liability insurance had been procured pursuant to paragraph eleven. A policy naming Delta as primary insured and Strick as an additional insured issued by Transport Mutual Insurance Association was produced. The fact that that policy had a territorial exclusion, excluding the United States, and the fact that Delta has not informed the court of a policy covering the territorial United States is of no moment. First, insurance was procured pursuant to the agreement naming Strick as insured evidencing Delta's acknowledgment of responsibility for injuries arising from use of leased Strick equipment. Second, and more importantly, Delta's agreement to procure insurance placed it in the position of insurer regardless of whether or not a policy was procured. Tidewater Equip. v. Reliance Ins. Co., 650 F.2d 503, 506 (4th Cir. 1981).
[6] In addition section ten of the lease provides that lessee is responsible for maintenance and repair. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369564/ | 307 S.C. 371 (1992)
415 S.E.2d 406
James ANDERS and Barbara Anders, Respondents
v.
SOUTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Appellant.
1770
Court of Appeals of South Carolina.
Heard January 20, 1992.
Decided February 24, 1992.
Robert J. Thomas of Sherrill & Rogers, Columbia, for appellant.
*372 David A. Fedor and David E. Massey both of Fedor, Massey & Whitlark, Columbia, for respondents.
Heard Jan. 20, 1992.
Decided Feb. 24, 1992.
Per Curiam:
Plaintiffs-Respondents, James Anders and Barbara Anders, bring this declaratory judgment action against Defendant-Appellant, South Carolina Farm Bureau Mutual Insurance Company, asking the court to hold that the insurance company failed in its duty, as required by § 38-77-160 of the South Carolina Code, to offer underinsured-motorist coverage incident to the issuance of a motor vehicle liability insurance policy. The circuit court granted Plaintiffs summary judgment. We reverse.
James Anders (father of Barbara Anders) purchased a policy of insurance from the Defendant through its agent Mary Eager. Herein we refer to James Anders as the Plaintiff. While the policy was in effect, the daughter was injured by an at fault driver. The at fault driver's insurance company has offered the limits of coverage, but in an amount alleged to be less than the damages sustained. The Plaintiff alleges that he was not offered underinsurance at the time the policy was issued as required by statute. The statute, § 38-77-160 of the South Carolina Code, in relative part reads as follows:
... Such carriers shall also offer, at the option of the insured, underinsured motorist coverage up to the limits of the insured liability coverage to provide coverage in the event that damages are sustained in excess of the liability limits carried by an at fault insured or underinsured motorist.
Several cases have been decided by the Supreme Court of South Carolina interpreting this provision. In State Farm Mutual Automobile Insurance Company v. Wannamaker, 291 S.C. 518, 354 S.E. (2d) 555 (1987), our court adopted the Minnesota Rule designating the requirements for compliance with this statutory provision as follows:
... (1) [T]he insurer's notification process must be commercially reasonable, whether oral or in writing; (2) the *373 insurer must specify the limits of optional coverage and not merely offer additional coverage in general terms; (3) the insurer must intelligibly advise the insured of the nature of the optional coverage; and (4) the insured must be told that optional coverages are available for an additional premium.
Based on affidavits and depositions, the trial judge granted summary judgment in keeping with Rule 56 of the South Carolina Rules of Civil Procedure, holding that there was no genuine issue of fact to be determined by a jury. It is well established that summary judgment should be granted "... in cases in which plain, palpable and indisputable facts exist on which reasonable minds cannot differ." Main v. Corley, 281 S.C. 525, 316 S.E. (2d) 406 (1984). The rule is simple but not always easy to apply. Relief granted under Rule 56 is drastic because it terminates the cause of action on the merits. Relief granted by way of summary judgment is a first cousin to a directed verdict. Rule 56 speaks in terms of "no genuine issue of fact." A directed verdict speaks in terms of "only one reasonable inference." In each instance the party granted relief prevails as a matter of law and the litigation is ended.
By granting a summary judgment or a directed verdict, the judge in effect holds as a matter of law: "The evidence is all on one side; the facts are not debatable; a jury must believe the movants interpretation of the facts and the inferences to be drawn therefrom." The showing before the court falls short of such requirement.
Plaintiff contends that underinsured motorist coverage should be available to him notwithstanding the fact that he never contracted to purchase the coverage from the defendant because it was never offered to him. The Defendant asserts its policy with the Plaintiff does not include underinsured coverage because it effectively offered the coverage which was declined.
FACTS
Most of the facts as developed by the affidavits, exhibits and depositions are not greatly in dispute. Others are in`substantial contest.
The Plaintiff applied to the Defendant to procure a liability insurance policy on his vehicle and was served by an agent *374 who was an old friend of some twenty years. One of the reasons for buying insurance from this company was the friendship of the agent.
The insured is a highly sophisticated attorney at the Columbia bar who served with the Office of the Attorney General and later as Solicitor for sixteen years. He is now practicing law. In his affidavit, he stated that he was "... completely unfamiliar with the laws regarding underinsurance in South Carolina."
In Plaintiff's deposition, he testified as follows:
Q. Your objective was to have the premium as low as possible?
A. I got tired of giving money, so much money to insurance companies every year, yes.
* * * * * *
Q. Did she [the agent] ever discuss prices or quote prices to`you in advance of requesting a check?
A. I don't think so. I think I just told her I wanted the minimum and I had to pay a membership fee. I remember that. I don't understand why I have to pay a membership fee, but I've been paying it ever since.
The affidavit of agent Eager includes the following:
In response to Anders' request, I developed a quotation for coverage on the described vehicles which included bodily injury liability limits in the amount of $50,000 per person/$100,000 per accident and property damage liability coverage in the amount of $25,000 per accident. In addition, my quotation included the price of uninsured motorist coverage and underinsured motorist coverage with the same limits as that cited for bodily injury and property damage liability. My quotation also included the price of Personal Injury Protection coverage in the amount of $1000. This quotation was communicated to Anders with my recommendation that he carry higher than the minimum limits of liability insurance and that he also carry uninsured and underinsured coverages equal to the liability limits on the vehicles.
* * * * * *
*375 Anders agreed to purchase liability limits of 50/100/25 as recommended but insisted that he was not interested in any other optional coverages that South Carolina law did not require in order to comply with financial responsibility requirements.
* * * * * *
... I hand-carried the applications to Mr. Anders' office that same day where he signed the application I had prepared, initialed the spaces indicating that he had rejected the optional excess uninsured and underinsured motorist coverages and provided me with check for the premium reflected in the applications. In initialing these spaces, I specially advised that his initials were to indicate his rejection of the other optional coverages we discussed.
DISCUSSION
The trial judge ruled "... it is clear at the very least that Farm Bureau has not met the third prong of Wannamaker in that there is no evidence whatsoever that its agent intelligibly advised James Anders of the nature of the optional underinsurance coverage. It is encumbered upon Farm Bureau to prove that it has met all four prongs of the Wannamaker test. This it has failed to do."
The burden of proving that there was no genuine issue of fact to be determined by a jury was upon the Plaintiff. He might prevail by showing, to the exclusion of other reasonable inferences, that the Defendant failed as to at least one prong of the requirements of Wannamaker.
At the summary judgment stage of the proceeding, it was only necessary for the Defendant to submit a scintilla of evidence warranting a determination by the jury. This it has done.
The case was not before the trial judge and it is not before this court on the merits. The only question for determination is that of "genuine issue." There is evidence which, if believed, would warrant the conclusion that the Defendant mailed to Plaintiff literature sufficient to constitute the offer required by statute and Wannamaker. But assuming this is not sufficient, we think such evidence, along *376 with other evidence, supports the inference that a meaningful offer was made and intelligently refused. The Plaintiff indicated with check marks on the application that he did not want underinsurance.
In determining whether sufficient advice was given to the Plaintiff, the sophistication of the applicant may be considered. One who is ignorant and unwary might require more explanation than a sophisticated applicant. In a kindred matter, the Supreme Court recognized this fact in Burwell v. S.C. National Bank, 288 S.C. 34, 340 S.E. (2d) 786 (1986). In that case the Court said ". . n an individual's education, business experience and intelligence are all considered."
The two issues submitted to the court for determination at this time, as taken from Defendant's brief, are as follows:
1. Is an issue of fact presented as to whether Respondent James Anders, who is both a lawyer and a businessman, understood underinsured-motorist coverage when such coverage was offered to him by Appellant's agent and when Respondent James Anders initialed rejection blocks declining offers of such coverage?
2. Is an issue of fact presented as to whether Respondent James Anders, who is both a lawyer and a businessman, waived the statutory right to have underinsured-motorist coverage explained to him?
We hold that a genuine issue of fact is involved and that the Defendant is entitled to prevail on both issues.
The order of the judge is reversed and the case is remanded for further proceedings.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369569/ | 530 F. Supp. 628 (1982)
Norman ENGELSBERG, Plaintiff,
v.
TRANSCON LINES, INC., Line Drivers, Pickup and Delivery Teamsters Local 741, Teamsters Joint Council No. 28, the Western Conference of Teamsters, and the Labor Management Committee for the States of Washington and Idaho, Defendants.
No. C80-1067C.
United States District Court, W. D. Washington.
January 20, 1982.
*629 John Cronin, Seattle, Wash., for plaintiff.
Bruce D. Corker, Perkins, Coie, Stone, Olsen & Williams, Seattle, Wash., for defendant Transcon Lines, Inc.
Thomas K. Cassidy, Hafer, Cassidy & Price, Seattle, Wash., for defendant Harry James Reynolds, Jr.[*]
George H. Davies, Vance, Davies, Roberts, Reid & Anderson, Seattle, Wash., for defendants Line Drivers, Pickup and Delivery Teamsters Local 741, Teamsters Joint Council No. 28, The Western Conference of Teamsters, Leland Rheaume,[*] Norman Pollock[*] and The Labor Management Committee for the States of Wash. and Idaho.
ORDER
COUGHENOUR, District Judge.
THIS MATTER comes on for hearing on the motion of defendant Transcon Lines, Inc. (Transcon) for summary judgment. The task of this Court is to identify the applicable statute of limitations for an action under § 301(a) of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185(a), challenging a "final and binding" grievance committee determination.
Transcon is engaged in the trucking business. Plaintiff Norman Engelsberg was a driver for Transcon from September 6, 1974 to March 14, 1979. Plaintiff was a member of a labor union which had a collective bargaining agreement with Transcon.
On March 14, 1979, plaintiff ceased working for Transcon. Plaintiff asserts he was wrongfully discharged in violation of the collective bargaining agreement. Transcon alleges plaintiff voluntarily resigned.
On March 15, 1979, plaintiff filed a grievance with the union. The grievance was processed in accordance with the procedures established by the collective bargaining agreement. On March 21, a bipartite grievance committee held a hearing on the grievance. *630 Plaintiff and his union representative were afforded an opportunity to participate. On the same day, the committee determined that plaintiff had voluntarily resigned from his employment and voted to deny the grievance. Plaintiff was so informed. By the terms of the collective bargaining agreement, the determination of the committee was "binding and final" on the parties.
Plaintiff filed the present action on September 4, 1980, more than seventeen months after the committee's determination. He asserts that he was wrongfully discharged in breach of the collective bargaining agreement and that the union failed to fairly represent his grievance. Jurisdiction is conferred on this Court by virtue of § 301(a) of the LMRA, 29 U.S.C. § 185(a).
Section 301 provides for suits in the district courts for violations of collective bargaining agreements between labor organizations and employers without regard to the amount in controversy. The section also contemplates suits by individual employees to vindicate personal rights including actions for wrongful discharge in violation of the agreement. Courts may not, however, usurp the dispute resolution mechanisms agreed to by the parties. The final adjustment method agreed upon by the parties is the desirable method for settlement of grievance disputes. 29 U.S.C. § 173(d). Courts can effectuate this Congressional policy only if the means chosen by the parties for settlement of their differences is given "full play," United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960). If the parties have agreed that a determination shall be final, courts should ordinarily not relitigate the merits of the action. Otherwise, the arbitrator's decision would in reality never be final. See United Steelworkers of America v. Enterprise Wheel and Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960).
There is an exception, however, if the employee can demonstrate that not only was the collective bargaining agreement breached but the union violated its duty of fair representation.
Because "[t]he collective bargaining system as encouraged by Congress and administered by the NLRB of necessity subordinates the interests of an individual employee to the collective interests of all employees in a bargaining unit," the controlling statutes have long been interpreted as imposing upon the bargaining agent a responsibility equal in scope to its authority, "the responsibility and duty of fair representation."
Hines, et al. v. Anchor Motor Freight, Inc., et al., 424 U.S. 554, 564, 96 S. Ct. 1048, 1056, 47 L. Ed. 2d 231 (1976) (citations omitted).
As the Hines Court held, an employee may go behind a "final and binding" arbitration determination and obtain relief in federal court when he demonstrates that his union breached its duty of fair representation and that the breach seriously undermined the integrity of the arbitral process.
Theoretically then, plaintiff could bring this suit in federal court since he alleged that the union breached its duty of fair representation. The question is, how long did plaintiff have to commence the action?
Congress has not enacted a statute of limitations governing actions brought pursuant to § 301 of the LMRA. With no federal statute of limitations, the timeliness of a § 301 suit is to be determined, as a matter of federal law, by reference to the appropriate state statute of limitations. International Union, UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 704-705, 86 S. Ct. 1107, 1112-1113, 16 L. Ed. 2d 192 (1966). Choice of the appropriate state statute requires that the cause of action be characterized properly. Price v. Southern Pacific Transportation Co., et al., 586 F.2d 750 (9th Cir. 1978).
The proper characterization of the present action was greatly aided by the recent Supreme Court decision in United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S. Ct. 1559, 67 L. Ed. 2d 732 (1981). In Mitchell, plaintiff filed a § 301 action against his union and his employer alleging *631 wrongful discharge and breach of the union's duty of fair representation. Both UPS and the union moved for summary judgment on the ground that the action was barred by New York's ninety-day statute of limitations for actions to vacate arbitration awards. The Court of Appeals reversed the District Court's granting of summary judgment, asserting that the Court should have applied the New York six-year limitations period for actions alleging breach of contract. 624 F.2d 394 (2nd Cir. 1980). It reasoned that the suit was analogous to a breach of contract action because the issues were whether the collective bargaining agreement had been breached and whether the union contributed to that breach by failure to discharge its duty of fair representation.
The Supreme Court disagreed with the characterization of the action by the Court of Appeals. To characterize the suit as one for "breach of contract" ignores the significance of the fact that the action was brought pursuant to § 301 of the Labor Management Relations Act. An "indispensable predicate for such an action is not a showing under traditional contract law that the discharge was a breach of the collective-bargaining agreement, but instead a demonstration that the union breached its duty of fair representation." Mitchell, 451 U.S. at 62, 101 S.Ct. at 1563-1564. The requirement of a showing that the union had violated its duty of fair representation would stand in the way of any relief regardless of whether the plaintiff alleges breach of the collective bargaining contract, personal injury, action upon a statute, or malpractice. Mitchell, 451 U.S. 62, n.4, 101 S. Ct. 1564, n.4. Otherwise, the "binding and final" determination of the arbitration procedure could not be challenged. Hines, et al. v. Anchor Motor Freight, Inc., et al., 424 U.S. 554, 96 S. Ct. 1048, 47 L. Ed. 2d 231 (1964). The Mitchell Court concluded that the action was more analogous to an action to vacate an arbitration award than the other alternatives, and imposed the ninety-day New York arbitration statute.
The Mitchell decision is dispositive on the characterization issue in the present action. In order for plaintiff to be entitled to any relief he must be able to set aside the "final and binding" determination of the grievance committee. Washington does not have a statute of limitations for the commencement of suits by employees seeking to set aside determinations of grievance committees. Instead, the Court is directed to look for the statute most closely analogous to the present action. This statute would be something in the nature of a statute applicable to actions to vacate arbitration awards.
Two statutes of limitations have been brought to the Court's attention. Transcon asserts that the Washington arbitration statute of limitations, RCW § 7.04.180, is the statute most appropriate for the present action. That statute would require suit to be commenced within three months after a copy of the arbitrator's decision is delivered to the party or his attorney. The Washington arbitration chapter, however, is inapplicable "to any arbitration agreement between employers and employees or between employers and associations of employees." RCW § 7.04.010. If the arbitration statute is the appropriate state statute of limitations, then this action must be dismissed.
Plaintiff claims the action falls within the ambit of the Washington catchall statute of limitations, RCW § 4.16.130. That statute provides that an action for relief not otherwise provided for shall be commenced within two years after the cause of action shall have accrued. The statute has been applied to actions for liability created by statute if it is not provided for elsewhere. Lybecker, et al. v. United Pacific Insurance Co., et al., 67 Wash.2d 11, 17, 406 P.2d 945 (1965). Compare Price v. Southern Pacific Transportation Co., et al., 586 F.2d 750, 753 (pre-Mitchell decision characterizing a § 301 suit as an action "on a statute") with United Parcel Service, Inc. v. Mitchell, 451 U.S. 62, n.4, 101 S. Ct. 1564, n.4 (1981) (rejecting the characterization that a suit similar to the present action is an action "on a statute"). If the two-year period is applicable, summary judgment cannot be granted.
*632 As between the two-year catchall statute and the three-month arbitration statute, the Court is of the opinion that the arbitration statute of limitations is the most appropriate state statute. First, as the Supreme Court held in Mitchell, an action of this nature is closely analogous to an action to vacate an arbitration award. Davidson v. Roadway Express, Inc., 650 F.2d 902 (7th Cir. 1981) (In light of Mitchell, the Seventh Circuit applied the Indiana ninety-day limitations period for actions to vacate an arbitration award in a § 301 suit alleging a union did not fairly represent an employee at a grievance proceeding.). Second, the shorter statutory period effectuates Congressional intent. State law considerations may be displaced where their application would be inconsistent with the federal policy underlying the cause of action under consideration. Johnson v. Railway Express Agency, et al., 421 U.S. 454, 465, 95 S. Ct. 1716, 1722, 44 L. Ed. 2d 295 (1975). One of the leading federal policies in this area is the relatively rapid disposition of labor disputes. Mitchell, 451 U.S. at 62, 101 S.Ct. at 1564. Given the choice between significantly different statutory periods, "there is no reason to inhibit the achievement of an identifiable goal of labor policy by precluding application of the generally shorter limitations provisions." International Union, UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 707, 86 S. Ct. 1107, 1114, 16 L. Ed. 2d 192 (1966). Finally, selection of a catchall statute simply because the action does not "fit" anywhere else is a result to be avoided.
The Court is not unmindful of the fact that RCW 7.04 specifically excludes labor disputes from its application. As the Court held in Mitchell, "[t]he fact that an employee could not bring a direct suit to vacate an arbitration award [in New York state court], however, does not mean that his § 301 claim, which is successful would have the same effect is not `closely analogous' to such an action." 451 U.S. 61, n.3, 101 S. Ct. 1563, n.3. Although the position of the plaintiff in Mitchell and of plaintiff in the present action are not identical, compare In re Soto, 7 N.Y.2d 397, 198 N.Y.S.2d 282, 165 N.E.2d 855 (1960) (employees are precluded from suing under the New York arbitration statute but not unions) with RCW 7.04 (labor disputes are excluded from the statute), the difference does not detract from the fact that the Washington arbitration statute is still the most appropriate. See Scott v. Chrysler Corp., 107 LRRM 3086 (E.D.Mich.1981) (the Michigan arbitration statute was applicable to a § 301 action even though it specifically excluded labor disputes).
The Court recognizes that by selecting RCW § 7.04.180, the fit is not perfect. "But in cases such as this, where generally state limitations periods were enacted prior to the enactment of § 301 by Congress in 1947, we are necessarily committed by prior decisional law to choosing among statutes of limitations none of which fit hand in glove with an action under § 301(a) of the LMRA." Mitchell, 451 U.S. at 64, 101 S.Ct. at 1564-1565 (1981). Given the choices present here, and the undesirability of the results of the grievance and arbitral process being suspended in limbo for long periods, the Washington arbitration statute is the most appropriate.
Nonetheless, the Court is bound by the holding in Singer v. Flying Tiger Line Inc., 652 F.2d 1349 (9th Cir. 1981), to apply a two-year statute of limitations for the present action. In Singer, the Ninth Circuit held that the Mitchell characterization would not be applied retroactively. Singer found "that the rule of the Mitchell case is not one which might have been anticipated." 652 F.2d at 1353. Plaintiff may have reasonably relied on the Circuit's prior statement in Price v. Southern Pacific Transportation Co., 586 F.2d 750 (9th Cir. 1978), to conclude that he had a longer period in which to commence suit. Price held that a § 301 action alleging breach of a union's duty of fair representation was an action "on a statute" and applied the three-year California limitations period. The Singer Court held that to apply the Mitchell rule retroactively in light of Price would be inequitable.
*633 The position of the plaintiff in the present action is similar to that of the plaintiff in Singer. Plaintiff may have assumed that the holding in Price was still applicable. Price held that a § 301 action should be characterized as an action upon a statute. The applicable Washington statute of limitations for suits upon a statute is the two-year limitations period found in RCW § 4.16.130. Lybecker, et al. v. United Pacific Insurance Co., et al., 67 Wash.2d 11, 17, 406 P.2d 945 (1965). That plaintiff may have relied on a longer statutory limitations period is supported by his citing of Washington v. Northland Marine Co., C74-240S (W.D.Wash., July 2, 1980) (The applicable statute of limitations for a § 301 action alleging a union breached its duty of fair representation is the two-year period of RCW 4.16.130.).[1]
In conclusion, the most appropriate state statute of limitations for a suit alleging wrongful discharge in violation of a collective bargaining agreement and breach of a union's duty of fair representation is the Washington arbitration statute. See United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S. Ct. 1559, 67 L. Ed. 2d 732 (1981). Mitchell will, however, only be given prospective effect. Singer v. Flying Tiger Line Inc., 652 F.2d 1349 (9th Cir. 1981). Therefore, the applicable statute of limitations for the present action is found in RCW § 4.16.130.
IT IS HEREBY ORDERED that defendant Transcon's motion for summary judgment is DENIED.
NOTES
[*] NOTE: Defendants Harry James Reynolds, Jr., Leland Rheaume and Norman Pollock were dismissed from the case by an agreed Order signed by Judge Donald S. Voorhees on May 15, 1981. The case was thereafter transferred to Judge John C. Coughenour on October 13, 1981.
[*] Although neither Price nor Northland Marine are precisely on point as they both involve a union's failure to process a grievance, plaintiff still might reasonably have believed that he had two years in which to file. Singer v. Flying Tiger Line Inc., 652 F.2d at 1353. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369580/ | 307 S.C. 503 (1992)
415 S.E.2d 828
W. E. ANTHONY, Sr., D.L. Cannon, J.T. Craig, W.L. Carpenter, J.A. Flanagan, L.D. Freeman, R.S. Gaddis, J.T. Gressette, T.A. Kingsmore, C.F. McElrath, R.E. McKinnell, N.M. Perrin, R.L. Smith, W.V. Hughes, III, JES Properties Limited, a South Carolina Limited Partnership, Individually and Derivatively on behalf of JES Properties Limited, a South Carolina Limited Partnership, Respondents
v.
PADMAR, INC., Kenneth R. Padgett, Jr., Fred M. Martin, Horsham Properties Limited and Horsham Properties Limited (BVI), Appellants.
1778
Court of Appeals of South Carolina.
Heard December 9, 1991.
Decided March 2, 1992.
*504 O.G. Calhoun and Jesse C. Belcher, both of Haynsworth, Marion, McKay & Guerard, and Larry D. Estridge, of Wyche, Burgess, Freeman & Parham, Greenville, for appellants.
William H. Thomas, III, of Dobson & Dobson, Greenville, and Paul E. Tinkler, of Wallace & Tinkler, Charleston, for respondents.
*505 Heard Dec. 9, 1991.
Decided Mar. 2, 1992.
CURETON, Judge:
This is an appeal from a trial court order granting partial summary judgment. The case involves the sale of the assets of a limited partnership. Several limited partners challenge the sale claiming the general partners did not have authority to consummate the transaction. The limited partners sued the purchaser and sought rescission of the sale. They also sought damages from the general partners. The trial court heard cross motions for summary judgment by the limited partners, the general partners, and the purchaser. The trial judge granted partial summary judgment to the limited partners on the issue of the authority of the general partners to consummate the sale. The trial judge also held the defenses of ratification and estoppel asserted by the general partners were without merit as a matter of law. As to the purchaser, the court held there was no authority to consummate the sale but the defense of estoppel raised by the purchaser was deemed a novel issue and not decided by the trial court. The general partners and the purchaser appeal.
I.
In 1983, J.E. Sirrine Company was acquired by CRS Company. CRS Company did not wish to purchase the real estate owned by J.E. Sirrine Company. Therefore, J.E. Sirrine Company created JES Properties Limited Partnership (JES Ltd.) to own the real estate. J.E. Sirrine Company was originally the sole limited partner in JES Ltd. Fred Martin and Kenneth Padgett were the general partners in the limited partnership. Martin and Padgett formed a corporation, Padmar, Inc., for the purpose of managing JES Ltd. The shareholders of J.E. Sirrine Company were given the opportunity to become limited partners in JES Ltd. and limited partnership interests proportionate to their shares in J.E. Sirrine Company were distributed to them. JES Ltd. now has approximately 480 limited partners. Fourteen of those limited partners are plaintiffs in this suit.
The assets of JES Ltd. consisted primarily of four parcels of real estate located in South Carolina, North Carolina, and *506 Texas.[1] Two of the parcels were developed. In 1986, JES Ltd. signed a contract with Horsham-BVI for the sale of all of JES Ltd.'s assets to Horsham-BVI. This sale was subject to the consent of the requisite percentage of the partners of JES Ltd. The total purchase price including the assumption of existing indebtedness and the release of J.E. Sirrine Company and JES Ltd. from that indebtedness was approximately $24,000,000.
The general partners submitted the contract to the limited partners for their approval in early 1987. A Solicitation Statement describing the transaction and a ballot accompanied the submission. The Solicitation Statement specifically pointed out that the sale was being made pursuant to Section 8.03(f) of the partnership agreement and upon collection of the proceeds of the sale the partnership would dissolve. The vote on the proposal was completed on March 11, 1987. The general partners contend they obtained approval for the sale and dissolution of the partnership by a margin of 50.3% to 49.7%. The closing was set for August 1987.
After the vote, counsel representing several of the limited partners wrote the attorney for the partnership in June and July, and questioned the authority of the partnership to enter into the sale. The letters did not specify the grounds for raising the issue. In response, counsel for the partnership indicated a willingness to meet to discuss the matter. He also obtained an opinion letter from outside counsel. Outside counsel concluded in his opinion letter that the general partners were authorized to go forward with the transaction. Horsham-BVI was given a copy of the opinion letter as required under the terms of the sales contract. No further action was taken by the limited partners prior to the closing. There is no indication Horsham-BVI was contacted directly by the respondent-limited partners prior to the closing. The closing went forward on August 17, 1987. After the closing, the limited partners received checks for their pro rata share of the downpayment. All of the limited partners negotiated the checks.
After the closing, the respondent-limited partners originally filed suit against Martin, Padgett, and Padmar, Inc. in federal court in 1987. Discovery took place including the deposition of a representative of Horsham in April 1989. Shortly *507 thereafter, counsel for the respondent-limited partners sent a letter to Horsham demanding Horsham reconvey all assets it had acquired from JES Ltd. and turn over to JES Ltd. all proceeds received from resale of any of those assets. This was the first direct notification from the limited partners to Horsham that they questioned the authority for the sale. Subsequently, the limited partners dismissed the federal court suit and filed this action in state court in 1989 against the general partners, Padmar, Inc., and Horsham. In their first cause of action against Horsham the respondents seek recision of the transaction based upon lack of authority of the general partners to sell the assets. By their second cause of action against the general partners only, the respondents allege the sale was without authority and seek damages measured by the amount they claim the fair market value of the assets sold to Horsham exceeds the sale price. The respondents also alleged other causes of action against the general partners but those claims were not considered by the trial court except as to the finding of lack of authority to sell the assets of the partnership.
II.
(A)
A motion for summary judgment is appropriately granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. Rule 56(c), SCRCP; LaMotte v. Punch Line of Columbia Inc., 296 S.C. 66, 370 S.E. (2d) 711 (1988). Additionally, the grant of summary judgment is proper only in those cases where it is clear further inquiry into the facts is not desirable to clarify the application of the law to the facts presented. See Smith v. S.C. Dep't of Highways, 296 S.C. 11, 370 S.E. (2d) 101 (Ct. App. 1988). All inferences from the facts must be viewed in the light most favorable to the opposing party. Eagle Constr. Co., Inc. v. Richland Constr. Co., Inc., 264 S.C. 71, 212 S.E. (2d) 580 (1975).
The limited partners alleged the general partners lacked authority to consummate the sale of the real property because the sale made it impossible to carry on the ordinary business of the partnership and the general partners did not obtain the *508 consent of all the limited partners under Section 8.03(b) of the limited partnership agreement. In their answers, the general partners and Horsham alleged a sufficient number of limited partners agreed to the transaction by virtue of Section 8.03(f).
The trial court granted partial summary judgment to the limited partners holding the general partners did not have actual authority to sell the partnership assets to Horsham. This holding was based upon the court's interpretation of the limited partnership agreement. The trial court held alternatively (1) "at least a two-thirds vote was required to authorize the transaction" under Article 17 of the limited partnership agreement and (2) the general partners' authority also failed because all of the partnership assets were sold and all of the limited partners did not consent under Section 8.03(b). The general partners and Horsham assert the trial court erred in its interpretation of the partnership agreement. They contend Section 8.03(f) of the agreement is the applicable provision and it authorizes the sale with the consent of more than one-half of the then outstanding partnership interests. The question on appeal is the correct interpretation of the limited partnership agreement.
Under Section 8.02 of the agreement, the general partners have the specific rights and powers on behalf of the partnership to "acquire, hold and dispose of any real property...." However, Section 8.03 places certain limits on the authority of the general partners. Section 8.03 states, in part, as follows:
The General Partners shall have all the rights and powers and be subject to all the restrictions and liabilities of a Partner in a Partnership without Limited Partners, except that the General Partners shall have no authority without written consent of all Limited Partners to:
* * * * * *
(b) do any act which would make it impossible to carry on the ordinary business of the Partnership (provided, however, that the sale of all or a major portion of the Patewood Property in accordance with the terms of this Agreement shall not be deemed to be an act making it impossible for the Partnership to carry on its ordinary business);
* * * * * *
*509 (f) sell substantially all or a major portion of the Partnership Property at a single sale which takes place at one time, or from time to time, or in multiple sales at one time, or within a twelve-month period, without the prior written consent of Partners holding more than one-half (1/2) of the then outstanding Partnership Interests. (emphasis added)
As noted previously, the trial court relied, at least in part, on a section of the agreement which none of the parties asserted in their pleadings. The trial court found Article 17 of the agreement relating to amendments applicable and that article required a two-thirds vote in order for the agreement to be amended.
We disagree with the trial court's conclusion that Article 17 of the limited partnership agreement is applicable to this matter. That article is titled "Amendments, Voting, [and] Meetings." Read in context with the rest of the agreement, the article sets forth a procedure in which amendments to the partnership agreement may be proposed and adopted while the partnership is conducting business and operating as an on-going entity. Article 17 calls for a two-thirds vote of the outstanding partnership interests to amend the partnership agreement when "there is a change in the character of the business of the partnership" and when "a time is fixed for dissolution of the partnership or the return of contributions and such time has not been specified in the agreement." The trial court relied upon these two subsections to hold a two-thirds vote was required to approve the sale of the partnership assets. This was error. As noted above, the "change in character of the business" provision contemplates a situation where the partnership changes the focus of its business from one type of business to another and continues to operate as a partnership. That is not the case here.
The provision in Article 17 dealing with changing of the time for dissolution is also not applicable because Section 1.04 of Article 1 gives a specific date for dissolution unless the partnership is sooner dissolved under Article 13. Here, dissolution under Article 13 occurred by virtue of the sale. Therefore, there is no need for an amendment pursuant to Article 17 because a specific section of the agreement already covers the situation. Therefore, we conclude Article 17 of the partnership *510 agreement does not apply and the two-thirds vote requirement is inapplicable.
The issue of actual authority for the sale comes down to the question of whether the partnership agreement required a simple majority vote or the consent of all limited partners. This issue involves the interpretation of Sections 8.02 and 8.03 of Article 8 and Article 13.
We first note the Solicitation Statement sent to the limited partners stated the proposed sale was of "substantially all of the assets" of the partnership. The proposed contract of sale stated it was an agreement to purchase "all of the assets of [JES Ltd.] of every nature and kind without limitation." The Solicitation Statement also noted that by the sale of "substantially all" of the assets of the partnership at one time the partnership would dissolve. This Statement refers to Article 13 of the partnership agreement. Article 13, Section 13.01 provides, in part, as follows:
The Partnership will dissolve upon the happening of any of the following events:
* * * * * *
(iv) the sale or other disposition at one time of all or substantially all of the assets of the partnership existing at the time of such sale. (emphasis added)
Everyone involved in this matter understood that all`of the partnership's assets would be sold and the effect of the sale would be a dissolution of the partnership. Therefore, the real question is what vote is required to dissolve the partnership by the sale at one time of all of its assets. As we view the partnership agreement, this matter is governed specifically by Section 8.03(f)[2] as opposed to Section 8.03(b).[3] Section 8.03(f) *511 directly addresses a sale of partnership property and is a limitation upon the broad power given to the general partners in Section 8.02(a) to "acquire, hold and dispose of any real property...." Reading the partnership agreement in context and harmonizing Articles 8 and 13, a dissolution of the partnership occurs when either "all" or "substantially all" of the assets of the partnership is sold at one time.[4] The dissolution article makes no practical distinction between "all" and "substantially all." A sale of either "all" or "substantially all" leads to dissolution. Since "substantially all" of the partnership's property may be sold at one time upon written consent of a majority of the outstanding partnership interests, it follows that a simple majority vote may dissolve the partnership in this manner.
The limited partners assert Section 8.03(b) is the applicable provision because "all" of the partnership assets were sold and therefore it would be impossible to carry on the ordinary business of the partnership. As noted, the partnership agreement makes no practical distinction between the sale of "all" or "substantially all" of the partnership's assets at one time because both situations lead to dissolution of the partnership. it would be anomalous to interpret the partnership agreement to permit the sale of "substantially all" of the partnership's property by simple majority vote which results in a dissolution, yet require unanimous consent to sell "all" of the partnership's assets which also results in a dissolution.[5] Therefore, Articles 3, 8, and 13 can be harmonized by recognizing this matter involved the ultimate dissolution of the partnership. Dissolution is specifically authorized by the partnership agreement through the sale of "all or substantially all" of its assets at one time.
Having concluded Section 8.03(f) is the applicable provision of the partnership agreement, this court is not in a position to answer the question of whether the general partners had actual authority to sell the assets because of another issue in this case. One of the ballots was called into *512 question by the limited partners. This ballot was altered by the limited partner submitting it.[6] He placed a condition on the sale which was not part of the original ballot. As we understand it, if this ballot is deemed to have been incorrectly counted as a "yes" vote then there would not be a majority vote in favor of the sale. The trial court did not rule on this issue. Therefore, the matter of the validity of this ballot and its effect on the issue of actual authority must be remanded to the trial court.
(B)
In addition to the question of actual authority, the trial court interpreted Horsham's defense of "good faith reliance" as essentially a claim that the general partners had apparent authority to consummate the transaction. For several reasons the court concluded the doctrine of apparent authority did not apply as a matter of law. We affirm the trial court's decision on this issue but upon different grounds appearing in the record. Rule 220(c), SCACR.
In the principal and agent relationship, apparent authority is considered to be a power which a principal holds his agent out as possessing or permits him to exercise under such circumstances as to preclude a denial of its existence. Beasley v. Kerr-McGee Chem. Corp. Inc., 273 S.C. 523, 257 S.E. (2d) 726 (1979). A third party may assert the apparent authority of the agent against the principal if the third party reasonably relied upon the indicia of authority and changed his position in reliance upon it. Id.
The concept of apparent authority is irrelevant to this case because the actual authority of the general partners was governed by the written terms of the limited partnership agreement. There was no other representation of authority. The question is whether the general partners had the actual authority to consummate the sale of the assets of the limited partnership under the limited partnership agreement. This matter must be resolved on remand as stated in Part II(A) of this opinion.
*513 III.
The general partners and Horsham have also appealed from the trial court's order denying their motions for summary judgment. All parties filed motions for summary judgment. In addition to the question of authority for the sale, the cross-motions of the general partners and Horsham raised the issues of estoppel and ratification. Although an order denying summary judgment is not appealable, these issues are properly before this court because the question of whether the trial court erred in granting the motion of the limited partners for partial summary judgment is appealable. Garret v. Snedigar, 293 S.C. 176, 359 S.E. (2d) 283 (Ct. App. 1987) (see footnote 2 regarding appellate authority).
(A)
The general partners argue the trial court erred in failing to grant them summary judgment based upon the defenses of estoppel and ratification. They argue that even if they did not have actual authority to sell the assets of the partnership their lack of authority is excused based upon these theories. We find the trial court erred in holding these defenses inapplicable as a matter of law but we do not agree with the general partners that they are accordingly entitled to summary judgment. We reverse and remand because further development of the facts is necessary to clarify application of the law on the issues of estoppel and ratification as they pertain to the general partners. See Baughman v. AT&T Nassau Metals Corp., ___ S.C. ___, 410 S.E. (2d) 537 (1991) (grant of summary judgment deemed to be premature); Hyder v. Jones, 271 S.C. 85, 245 S.E. (2d) 123 (1978).
The essential elements of estoppel are: (1) ignorance of the party invoking it of the truth as to the facts in question; (2) representations or conduct of the party estopped which mislead; (3) reliance upon such representation or conduct; and (4) prejudicial change of position as a result of such reliance. Standard Fire Ins. Co. v. Marine Contracting and Towing Co., 301 S.C. 418, 392 S.E. (2d) 460 (1990). We believe issues of fact exist regarding the elements of this defense. The record indicates the limited partners received the Solicitation Statement along with a copy of the proposed contract of sale. The limited partners knew from these documents *514 the general partners were taking the position that only a majority vote was necessary to authorize the sale. The record also established some communication before closing between an attorney representing a group of limited partners and the attorney for the partnership. The facts need to be further developed concerning the content of this communication.[7] This information is relevant to the elements of representation and reliance upon that representation. It is also relevant to the element of prejudicial change of position. We take no position on the ultimate viability of the defense of estoppel but we do conclude it was inappropriate to determine the issue as a matter of law upon the record before the trial court.
Ratification is defined as the "express or implied adoption of an act or contract performed or entered into in his behalf by another who at the time assumed to act as his agent." Lincoln v. Aetna Casualty & Sur. Co., 300 S.C. 188, 191, 386 S.E. (2d) 801, 803 (Ct. App. 1989). The elements of ratification are (1) acceptance by the principal of the benefits of the agent's acts, (2) full knowledge of the facts, and (3) circumstances or an affirmative election indicating an intention to adopt the unauthorized arrangement. Id. Again, we find further development of the facts is desirable to clarify the application of this theory to the facts at hand. The record indicates the general partners authorized a reduction of the purchase price by $200,000 at the closing. It is not clear when the limited partner group knew this fact. Also, there is a question as to the reasonableness of the actions of the limited partners after the closing. They accepted the checks upon the cash distribution. They waited several months before challenging the action of the general partners in federal court. Whether their actions were reasonable to repudiate the conduct of the general partners or instead indicate ratification cannot be conclusively determined as a matter of law on this record. See Foxworth v. Murchison Nat'l Bank, 136 S.C. 458, 134 S.E. 428 (1926).
We reverse and remand the issues of estoppel and ratification as they pertain to the general partners.
*515 (B)
The trial court denied Horsham's motion for summary judgment. In the written motion Horsham asserted there was no "statutory or other authority under South Carolina law which would support an order compelling Horsham Properties Limited to reconvey to the [p]laintiffs." The statement of the case indicates the motion was based on the grounds of (1) estoppel, (2) apparent authority, and (3) actual authority. The trial court ruled against Horsham on the issues of authority and held the estoppel defense raised novel legal questions. On appeal Horsham argues the trial court erred because even if the sale was not authorized (1) the limited partners are estopped to assert their claim against Horsham and (2) the limited partners are not entitled to rescission as a matter of law.
The closing of the transaction took place on August 17, 1987. Before closing, some of the limited partners had communicated various concerns to the attorney for the partnership but none communicated directly with Horsham. Horsham received an opinion letter from outside counsel indicating the requisite authority for the sale had been obtained from the limited partners. Following the closing, the cash portion of the purchase price was distributed to all the limited partners. A substantial portion of the properties purchased by Horsham was subsequently resold and all of the financing assumed by Horsham was restructured. Horsham also assumed the responsibility for managing and leasing the office buildings which were part of the developed property. The first direct notification Horsham received that certain limited partners questioned the authority for the sale was a letter of April 21, 1989, which demanded Horsham reconvey all assets it had acquired and turn over all proceeds received from resale of any of those assets. The record contains the affidavit of the vice-president of Horsham. In the affidavit he gives further details of the financial aspects of the purchase and identifies additional actions Horsham has taken with regards to the property between 1987 and 1989. The record does not contain contrary evidence presented by the limited partners other than a general assertion of willingness to tender the consideration received.
The trial court held the estoppel defense raised a novel legal issue and the court declined to rule on it. We find the *516 trial court erred in failing to grant summary judgment to Horsham upon the defense of estoppel.
The successful assertion of an estoppel defense requires a showing that the party asserting the defense was without knowledge or any means of knowledge of facts upon which he predicates a claim of estoppel. Freeman v. Fisher, 288 S.C. 192, 341 S.E. (2d) 136 (1986).
The affidavit of the partnership's attorney indicated he orally notified Horsham's counsel of the existence of the communication from the respondents' counsel prior to the closing. The respondents argue this notification along with the opinion from outside counsel were sufficient to put Horsham on at least inquiry notice that the authority of the general partners was being questioned.[8] They argue further inquiry by Horsham into the facts would have revealed that they, through their attorney, requested a meeting with the general partners to discuss the authority issue and they had insisted the sale not take place until after the meeting with the general partners. Further inquiry would have also revealed the partnership counsel's reply to respondents' counsel to the effect that he had no authority to delay the closing regardless of a potential dispute as to "the general partners' compensation."
We think the respondents' conduct of doing nothing to halt the closing,[9] together with their subsequent conduct, stops them from raising the issue at this time. See Central Prod. Credit Ass'n v. Page, 268 S.C. 1, 231 S.E. (2d) 210 (1977) (estoppel requires a material prejudice to party asserting the defense resulting from an act of neglect of party against whom it is asserted).
Having taken the position the sale was unauthorized but having permitted the dispute to be characterized as one involving general partners' compensation, we think it was incumbent upon the respondents to have at least communicated *517 their position to Horsham. Instead of taking positive action to halt the sale or even raise the issue with Horsham in a timely manner, the respondents sat back, received, and cashed their checks for their respective shares of the cash`portion of the purchase price. They also allowed Horsham to (1) assume full liability and obtain the release of J.E. Sirrine Company from loans of approximately $11,500,000; (2) assume liability and release the partnership from a loan of $3,250,000; (3) assume full responsibility for management, leasing, and maintenance of the office buildings included in the assets conveyed; (4) notify all tenants in the office buildings that Horsham would be the new landlord under their leases; (5) transfer all utility contractsM and other service contracts into Horsham's name and pay all utility charges subsequent to the closing; (6) sell a substantial portion of the properties purchased; and (7) restructure all of the financing on the properties.
The conduct of the respondents misled Horsham as to their true intentions and Horsham relied upon their conduct to its detriment in entering into certain irreversible business and financial arrangements both before and after the closing. See Bilton v. Best Western Royal Motor Lodge, 282 S.C. 634, 321 S.E. (2d) 63 (Ct. App. 1984) (the essence of equitable estoppel is that the party seeking to invoke it must have been misled to his injury).
In conclusion, we reverse and remand to the trial court the issue of actual authority. The trial court should specifically consider the question of the challenged ballot. We affirm the trial court on the issue of apparent authority for the reasons stated in this opinion. We reverse and remand the issues of estoppel and ratification as raised by the general partners for the reasons stated. We reverse the decision of the trial court on the defense of estoppel raised by Horsham and remand for entry of judgment in favor of Horsham.
Affirmed in part, reversed in part, and remanded.
SHAW and BELL, JJ., concur.
NOTES
[1] We do not know what personal property was owned by JES Ltd. as part of its assets.
[2] Section 8.03(f) states that the general partners shall not have the power to "sell substantially all or a major portion of the partnership Property at a single sale which takes place at one time, or from time to time, or in multiple sales at one time, or within a twelve month period, without the prior written consent of the partners holding more than one-half (1/2) of the then outstanding partnership interests."
[3] Section 8.03(b) states the general partners shall not have the power without the written consent of all limited partners to "do any act which would make it impossible to carry on the ordinary business of the partnership (provided, however, that the sale of all or a major portion of the Patewood Property in accordance with the terms of this Agreement shall not be deemed to be an act making it impossible for the partnership to carry on its ordinary business)."
[4] "Substantially all" has been variously defined as: (1) the antithesis of the phrase "a substantial part," Employment Security Board v. Maryland Deliveries, 204 Md. 533, 105 A. (2d) 240 (1954); (2) all but what should be disregarded under the de minimis rule, Blue Ridge Lumber Products v. Nelson, 213 F. (2d) 451 (2d Cir.1954); and (3) all except a negligible minority interest, Burnet v. Bank of Italy, 46 F. (2d) 629 (9th Cir.1931).
[5] No one has taken the position these Articles are ambiguous.
[6] Another limited partner testified in deposition he also originally submitted a conditional ballot but was advised by counsel for the partnership that a ballot containing conditions would be counted as a "no" vote. This limited partner then submitted a ballot without conditions in order to vote "yes."
[7] The limited partners take the position the general partners must show that a majority of the total limited partners had the requisite knowledge of the true facts before estoppel may be sustained. We disagree. The knowledge requirement relates to the respondent-limited partners only since they are the ones who appellants claim are estopped.
[8] A letter from respondents' counsel to the attorney for the partnership dated July 22, 1987, stated inter alia: "I seriously question the authority of the partnership to transfer this property using the procedure and acts that were taken in the early part of this year." No specific mention was made of the vote. A previous letter had indicated some of the limited partners were concerned about the terms of the sale and the compensation to the general partners.
[9] The simple act of filing a lis pendens would have effectively manifested their position. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369595/ | 232 Kan. 353 (1982)
654 P.2d 445
ALLEN L. MOORE, and WESTERN HOME BUILDERS, INC., a Kansas Corporation, Appellees,
v.
THE CITY OF LAWRENCE, KANSAS, A Municipal Corporation; MARCI FRANCISCO, DONALD BINNS, BARKLEY CLARK, THOMAS E. GLEASON, JR., and NANCY SHONTZ, Commissioners of the City of Lawrence, Appellants.
No. 54,182
Supreme Court of Kansas.
Opinion filed December 3, 1982.
*354 Patrick E. Peery, of Allen, Cooley & Allen, of Lawrence, argued the cause, and Milton P. Allen, of the same firm, was with him on the brief for the appellants.
Edward G. Collister, Jr., of Collister & Kampschroeder, of Lawrence, argued the cause and was on the brief for the appellees.
The opinion of the court was delivered by
SCHROEDER, C.J.:
This is an appeal by the City of Lawrence and individual city commissioners (defendants-appellants) from a declaratory judgment entered against them and in favor of Allen L. Moore and Western Home Builders, Inc. (plaintiffs-appellees). The district court found that Section 21-203(d) and (f) and Section 21-302.1 of the City Code of the City of Lawrence were in conflict with K.S.A. 12-705b and were therefore invalid, and that dedications of streets, utility easements and other rights-of-way indicated on appellees' subdivision plat were automatically accepted by the public when the plat was approved by the City Planning Commission and filed with the Douglas County Register of Deeds.
The facts are brief and undisputed. In the fall of 1980, plaintiffs submitted a proposed subdivision plat to the Lawrence-Douglas County Planning Commission for approval, as required by K.S.A. 12-705b. In addition to lot lines, the plat delineated proposed dedications of rights-of-way for streets, sidewalks and utility easements. The plat was found to be in conformity with the city's subdivision regulations and was approved by the planning commission on November 19, 1980.
The plat was then submitted to the city commission for acceptance of dedications of easements and public rights-of-way, as required by Sections 21-203 and 21-302.1 of the city ordinances. Consideration of the plat was deferred until March 10, 1981, at which time the commission voted not to accept the dedications of easements and rights-of-way until such time as a pending unrelated zoning issue could be resolved. The plaintiffs were notified of the commission's action by letter.
The proposed dedications were not subsequently considered by the commission. On September 11, 1981, the plat, endorsed by the chairman of the planning commission as required by K.S.A. 12-705b, was filed with the Douglas County Register of Deeds. At its meeting on September 29, 1981, the city commission reaffirmed that it had not accepted the dedications in plaintiffs' subdivision, and, concerned that prospective purchasers of the subdivision lots would be unaware of this, the commission *355 directed that a "Statement of Non-Acceptance" be filed with the register of deeds. This action for declaratory relief was filed, seeking a declaration that the dedication of rights-of-way and easements were automatically accepted by the city upon filing of the plat with the register of deeds.
At the time of the district court's decision, 12-705b provided:
"[An owner of land] shall cause a plat to be made which shall accurately describe the subdivision, lots, tracts or parcels of land giving the location and dimensions thereof or the location and dimensions of all streets, alleys, parks or other properties intended to be dedicated to public use or for the use of purchasers or owners of lots.... All such plats shall be submitted to the city planning commission ... which shall determine if the same conforms to the provisions of the subdivision regulations.... If the plat conforms to the requirements of such regulations, there shall be endorsed thereon the fact that it has been submitted to and approved by the city planning commission or joint committee."
This statute was amended during the 1982 legislative session, which will be discussed in more length later in the opinion.
Section 21-203 of the city code provides that dedications of streets and other public easements must be accepted by the governing body of the city. That section reads in pertinent part:
"(d) A final plat that has been approved by the planning commission shall be submitted to the appropriate governing body for its acceptance of the dedication of streets and other public ways, service, and utility easements and any land dedicated for public use.... Failure of the governing body of the city or of the county to execute an acceptance of dedication shown on the plat shall be deemed to be a refusal of the proposed dedication.
....
"(f) Approval of a final plat by the planning commission and acceptance of dedication of easements and rights-of-way by the appropriate governing body shall be effective for no more than one (1) year unless all conditions of approval have been completed."
The ordinances further require that a final plat show an "[a]cceptance of dedication by the appropriate governing body." Section 21-302.1(i).
The district court found that Sections 21-203 and 21-302.1 of the Lawrence City Code, insofar as they pertain to acceptance of dedications, were in conflict with K.S.A. 12-705b, and were thus invalid as they were not charter ordinances under the home rule provisions of the Kansas Constitution, Art. 12, § 5. The district court stated:
"The addition to the City Ordinance of approval by the City Commission means *356 in effect that the City Commission can overrule what the Planning Commission did, and I have trouble finding that amounts to enlargement. It seems to me it gives somebody else the final say in the case. The Planning Commission said `yes' and the City Commission said `no'. The result is that a plat otherwise having been approved is not approved, and I suspect that does in fact demonstrate that the City Ordinance is in conflict with the state statute."
In Claflin v. Walsh, 212 Kan. 1, 7, 509 P.2d 1130 (1973), the rules pertaining to home rule authority were discussed. Under the provisions of Art. 12, § 5, of the Kansas Constitution, the home rule power of cities is favored and should be upheld unless there is a sound reason to deny it. Home rule power is subject to control by the legislature through legislative enactments which apply uniformly to all cities. Kansas Constitution, Art. 12, § 5(b). Where a statute is uniformly applicable to all cities subsection (c)(1) of Art. 12, § 5 prohibits a city from electing, by way of charter ordinance, that the statute will not apply to it. For further discussion of the "uniform applicability" standard see Martin, Home Rule for Kansas Cities, 10 Kan. L. Rev. 501, 506-09 (1962). In Claflin the court stated that in determining whether a legislative enactment is applicable uniformly to all cities, such legislative intent should be clearly evident before a city's right to exercise home rule power in that area is denied. 212 Kan. at 7.
The provisions of K.S.A. 12-701 et seq., pertain to city planning and subdivision regulations. The application of these statutes to any city is optional, in that 12-701 provides that any city may create a planning commission, while the remainder of the statutes govern the powers and duties of the planning commission and the method for adoption of subdivision regulations and approval of subdivision plats where a city has created a planning commission. For example, the planning commission is authorized to make a comprehensive plan for the development of the city (K.S.A. 12-704), and where a comprehensive plan has been adopted the commission may adopt regulations governing the subdivision of land. To become effective these regulations must first be approved by the governing body of the city. (K.S.A. 12-705.) K.S.A. 12-705b dictates the procedure to be used for approval of plats where a city has established a planning commission and adopted subdivision regulations.
It is clear that initially these statutes are not uniformly applicable to all cities as they provide an optional procedure which may be adopted by any city as a means of governing matters *357 pertaining to city planning and subdivision regulations. However, after careful examination of these provisions we are convinced the legislature intended these statutes to be uniformly applicable to those cities which elected to adopt the planning commission procedure provided by 12-701 et seq. While the application of the statutes may be optional, it is clear that once a city chooses to adopt this method the legislature intended for those statutes controlling the planning commission procedure to be binding. These statutes are lengthy and detailed, explicitly delineating the respective powers and duties of the planning commission and governing body of the city. A comprehensive scheme for the adoption of subdivision regulations and approval of subdivision plats is further provided. If each city which elected to create a planning commission under the provisions of 12-701 et seq., were allowed, by way of charter ordinance, to determine which of the provisions were not applicable to that city, the purpose and effect of the statute, to provide a comprehensive method for the governance of city planning and subdivision regulation, would be seriously impaired. We do not think such a result was intended by the legislature and therefore hold these statutes are uniformly applicable to all cities which elect to follow the procedure set forth therein.
The city ordinances in question here are not charter ordinances, and thus did not exempt the city from the provisions of 12-705b. A city ordinance should be permitted to stand unless an actual conflict exists between the ordinance and a statute, or unless the legislature has clearly preempted the field so as to preclude municipal action. See Claflin v. Walsh, 212 Kan. at 7; City of Junction City v. Lee, 216 Kan. 495, 501, 532 P.2d 1292 (1975). The test to determine whether a conflict exists was expressed in Leavenworth Club Owners Assn. v. Atchison, 208 Kan. 318, Syl. ¶¶ 2, 3, 492 P.2d 183 (1971):
"Generally a municipal regulation which is merely additional to that imposed by state law cannot be said to create a conflict therewith.
"Where a municipal ordinance merely enlarges on the provisions of a statute by requiring more than is required by the statute, there is no conflict between the two unless the legislature has limited the requirements for all cases to its own prescription."
In City of Beloit v. Lamborn, 182 Kan. 288, 292, 321 P.2d 177 (1958), the court stated that whether the legislature intends to regulate an entire area must be clearly manifested by the statute *358 before it can be held that cities do not have power to regulate in a particular area.
The appellants maintain that sections 21-203 and 21-302.1 of the City Code of Lawrence do not conflict with the provisions of K.S.A. 12-705b, but merely provide for an additional procedure that is not required by 12-705b, and therefore constitute a valid exercise of home rule power. The appellants vigorously argue that a governing body's right to accept or reject responsibility for proposed dedications is separate and distinct from approval and filing of plats. To appreciate this argument one must understand the distinction between approval of plats and the acceptance of dedications of land for public use contained in plats. K.S.A. 12-705 provides that a city planning commission may adopt regulations governing the subdivision of land. Where the planning commission finds that a proposed plat conforms to the subdivision regulations, the plat must be approved. Upon approval the plat can be filed with the register of deeds. The city governing body has no role in the approval or disapproval of plats for conformance with the regulations.
A dedication, on the other hand, is defined as an offer by the owner to devote property to public use, manifesting an intention that it shall be accepted and used presently or in the future. The intention by the owner to dedicate and acceptance thereof by the public are the essential elements of a complete dedication. See 11 McQuillin, Municipal Corporations § 33.02 (3rd rev. ed. 1977); City of Kingman v. Wagner, 168 Kan. 558, 562, 213 P.2d 979 (1950); 23 Am.Jur.2d, Dedication § 1.
The appellants contend that once a plat is approved by the planning commission and filed with the register of deeds pursuant to 12-705b, it becomes a valid and effective plat, controlling lot lines and sizes; location, width and grade of streets, alleys and utility easements; the legal description of the development; the location and size of parks and open spaces, and many other characteristics of the subdivision. However, they maintain that by requiring the plat to be submitted to the governing body for acceptance of dedications permits the city to make a decision that it is prepared to assume legal and financial responsibility for lands indicated on the plats as dedicated for public use. Although the dedications may not be formally accepted by the city, property owners within the subdivision are bound by the proposed *359 dedications contained in the plat. The appellants maintain that a property owner cannot, by merely submitting a plat which complies with subdivision regulations, impose upon the city responsibility for improvement and maintenance of streets, parks and other public properties designated in the plat, nor make the city liable for injuries resulting from disrepair and defects in those properties.
In support of this position the appellants cite cases from other jurisdictions which have held that while approval of a plat is evidence the plat complies with statutes and city regulations, a separate acceptance of dedications contained in the plat by the city governing body is necessary before legal and financial responsibility for maintenance and improvement of those areas can be imposed on the city. See cases cited in Annot., Validity and Construction of Regulations as to Subdivision Maps or Plats, 11 A.L.R. 2d 524, §§ 9-11. As summarized by one commentator:
"It is elementary that ... an acceptance of a proffered dedication is necessary, either by public user or formal act, because for obvious reasons a municipality is not bound to accept land dedicated for a street, alley or other public use....
"... In some states, where the statute provides that upon making and filing a plat the title to the land shall vest immediately in the public for the uses specified, it is held that no acceptance is necessary, although the contrary is held in other states. The rule supported by the better reason, however, would seem to be that even in the case of a statutory dedication an acceptance should be necessary in order to make the municipality liable to maintain the streets or alleys and for injuries resulting from defects therein." 11 McQuillin, Municipal Corporations §§ 33.43, 33.44.
See also 23 Am.Jur.2d, Dedication § 43. There is an exception, however, where a statute specifically provides for the manner in which dedications are accepted. Absent such statutory provision, the act of acceptance is a discretionary municipal function. See 11 McQuillin, Municipal Corporations §§ 33.42, 33.44; 23 Am.Jur.2d, Dedication § 44.
It is true 12-705b does not expressly provide that when a proposed plat is found to comply with subdivision regulations and is approved by the planning commission the dedications contained in the plat are de facto accepted by the city. The statute does provide, however, that upon approval by the planning commission, the plat can be filed with the register of deeds and be recorded. Several cases in Kansas hold that the filing and recording of a plat vests title to property designated for public use *360 in the county in which the city is located, and no formal acceptance by the city is necessary to complete the dedication. See City of Kechi v. Decker, 230 Kan. 315, 318-19, 634 P.2d 1099 (1981); City of Council Grove v. Ossmann, 219 Kan. 120, 127, 546 P.2d 1399 (1976); City of Russell v. Russell County B. & L. Assn., 154 Kan. 154, 160, 118 P.2d 121 (1941); Gadarl v. City of Humboldt, 87 Kan. 41, 42, 123 P. 764 (1912).
It is presumed the legislature acted with full knowledge and information as to judicial decisions with respect to prior law. Rogers v. Shanahan, 221 Kan. 221, 225, 565 P.2d 1384 (1976); McGraw v. Premium Finance Co. of Missouri, 7 Kan. App. 2d 32, 35, 637 P.2d 472 (1981), rev. denied 231 Kan. 801 (1982). It logically follows that at the time of the trial court's decisions 12-705b did not distinguish between acceptance of dedications and approval of plats, so that a subdivision plat filed with the register of deeds which has been approved by the planning commission constituted an acceptance by the city of dedicated lands and precluded the city from passing an ordinance requiring a separate acceptance of dedications. The legislative history of K.S.A. 12-705b and amendments thereto enacted during the 1982 legislative session further support this conclusion.
The statute which preceded 12-705b, G.S. 1949, 12-705, provided that any plat, replat, dedication or deed of street or public way was to be approved by the city planning commission and governing body before it could be filed with the register of deeds. This statute was replaced by K.S.A. 1965 Supp. 12-705b, which provided that plats were to be submitted to the planning commission to determine whether they were in conformity with subdivision regulations enacted under the provisions of K.S.A. 12-705. Upon approval by the planning commission these plats could be filed with the register of deeds. No provision was made for approval of the plat by the governing body. K.S.A. 12-705b now provides, as amended by S.B. 775, L. 1982, ch. 67, effective April 15, 1982, that after a finding by the planning commission that the proposed plat conforms to subdivision regulations:
"The governing body shall approve or disapprove the dedication of land for public purposes within 30 days after the first meeting of the governing body following the date of the submission of the plat to the clerk thereof.... The register of deeds shall not file any plat until such plat shall bear the endorsement hereinbefore provided and the land dedicated to public purposes has been approved by the governing body."
*361 It is clear in 1965 the legislature specifically removed a governing body's authority to accept or reject land dedicated for public use. This authority was restored by the 1982 amendment. Therefore, from 1965 to April 15, 1982, a city had no authority to pass an ordinance requiring dedications contained in plats, which had been approved by the planning commission, to be submitted to the governing body for acceptance of dedications. The historical background and changes made in a statute are to be considered by the court in determining the legislative intent, and any changes and additions made in existing legislation raise a presumption that a change in meaning and effect was intended. Shapiro v. Kansas Public Employees Retirement System, 211 Kan. 452, Syl. ¶ 2, 507 P.2d 281 (1973).
Although K.S.A. 12-705b did not provide for approval of a proposed plat by the governing body prior to filing, it is important to note the legislature did provide for the governing body to retain control over the plat approval procedure. Under 12-705b the planning commission merely performs a ministerial function in the approval of plats. If a plat conforms to existing subdivision regulations the plat must be approved. The planning commission is given no discretionary authority under this procedure. K.S.A. 12-705 provides that subdivision regulations must be approved by the governing body of the city to become effective. The regulations can cover a broad range of requirements for approval of subdivision plats. The statute itself specifies many areas which regulations may address, including:
"[T]he proper location and width of streets, and for building lines, open spaces, safety and recreational facilities ... the reservation or dedication of land for open space for either public recreational use or for the future use of the residents of the residential subdivisions in order to insure the proper balance of use, design or urban areas and avoid the overcrowding of land.... Such regulations may also as a condition to the approval of any plat require and fix the extent to which and the manner in which streets shall be improved and water, sewer, drainage and other utility mains and piping or connections or other physical improvements shall be installed."
Under G.S. 1949, 12-705 the planning commission had sole authority to adopt regulations governing the subdivision of land, and, contrary to the present statute, it minimally described what could be provided for in the regulations. It seems clear the legislature believed the planning commission procedure provided in K.S.A. 12-701 et seq., would function more effectively if *362 the governing body's discretionary decision-making authority was removed from the approval stage of the subdivision planning process and instead focused this authority at the initial stage where the subdivision regulations were enacted.
The legislative history of the 1982 amendment leaves no doubt that it was enacted in response to the trial court's ruling in this case. It was recognized in committee that several cities in Kansas have ordinances similar to those involved here requiring the governing body to accept dedications contained in proposed plats. See Minutes, House Local Government Committee, March 25, 1982, Attachment II. During oral arguments to this court the appellants suggested that the 1982 amendments did not imply that prior to the amendment the city could not require a separate acceptance of dedications, but merely corrected an oversight in the statute. In light of the numerous changes in the respective powers and duties of the planning commission and governing body made by the legislature when the statute was revised in 1965 we cannot agree. It is presumed the legislature intends to change the law when it amends the provisions of a statute. Safeway Stores, Inc. v. Director of Revenue, 211 Kan. 594, 595, 506 P.2d 1124 (1973).
The appellant further argues that in light of the circumstances under which 12-705b was amended, the statute should be construed to apply retroactively. The general rule of statutory construction is that a statute will operate prospectively unless its language clearly indicates the legislature intended that it operate retrospectively. Davis v. Hughes, 229 Kan. 91, Syl. ¶ 6, 622 P.2d 641 (1981). We glean no such legislative intent from the language used in the amendment to K.S.A. 12-705b.
In addition to our analysis of the legislative history of K.S.A. 12-705b, two opinions issued by the Attorney General's office of this state, though not binding on this court, are persuasive. These opinions conclude that while the city governing body is entitled to approve any subdivision regulations adopted by the planning commission, it simply has no role whatever in the approval or disapproval of plats. Further, the procedure set forth in 12-705b appeared to be the sole and exclusive procedure for the approval of a plat of land subject to regulations of the planning commission. See Att'y Gen. Op. Nos. 74-291 and 76-364.
We conclude that Sections 21-203 and 21-302.1 of the City *363 Code of the City of Lawrence were in conflict with K.S.A. 12-705b, as it existed when the trial court made its decision, and were therefore invalid.
We note that a city is not without some protection concerning streets and other public rights-of-way. When a road is to be opened, or put in condition for use by the public, is within the discretion of the city's governing body. See Hill v. City of Lawrence, 2 Kan. App. 2d 457, 458, 582 P.2d 1155, rev. denied 225 Kan. 844 (1978), and cases cited therein; 39 Am.Jur.2d, Highways, Streets, and Bridges § 68. A city is not required to open all streets which have been formally laid out or dedicated. As stated in Gardarl v. City of Humboldt, 87 Kan. at 43:
"A street may not be available for use by the public when the plat is filed. Nevertheless the city, as the public agent having control of streets, may wait until its resources will permit, or until the public need demands, before it undertakes to open the way or to improve it so that it will be fit for travel; and meanwhile all persons in possession hold subject to the paramount right of the public."
The judgment of the lower court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369854/ | 242 Ga. 657 (1978)
251 S.E.2d 230
COOK
v.
THE STATE.
34041.
Supreme Court of Georgia.
Submitted September 15, 1978.
Decided November 7, 1978.
Rehearing Denied November 30, 1978.
Elsie Higgs Griner, for appellant.
Vickers Neugent, District Attorney, Arthur K. Bolton, Attorney General, Nicholas G. Dumich, Special Assistant Attorney General, for appellee.
HILL, Justice.
Joe B. Cook was found guilty of murder of his wife and was sentenced by the court to life in prison. One of his enumerations of error warrants discussion. He contends that it was a violation of Code Ann. § 59-718.1 to permit the jury to disperse during the presentation of the state's case in chief at the sentencing trial in this capital case.
The district attorney had given notice of aggravating circumstances and thus had given notice of the state's intention to seek the death penalty. However, when the jurors returned their verdict finding the defendant guilty, they were polled and then dismissed without a death sentencing trial. The court imposed the life sentence. It is not clear from the transcript at what point the state decided not to seek the death penalty. We therefore assume for purposes of this appeal that at the time of jury dispersal during presentation of the state's case the state was still seeking the death penalty.
A capital crime is one for which the death penalty may be imposed. Our Code law continues to prescribe that the death penalty may be imposed for some crimes (e.g., armed robbery, rape, kidnapping with bodily injury) which constitutional decisional law prescribes that the death penalty cannot be imposed where no death results. Coker v. Georgia, 433 U.S. 584 (97 SC 2861, 53 LE2d 982) (1977); Collins v. State, 239 Ga. 400 (2) (236 SE2d 759) (1977).
This difference between what the Code prescribes and the Constitution allows has created some confusion. We have held as follows:
(1) Convictions of rape, armed robbery and *658 kidnapping with bodily injury where no death results are not capital felonies for appellate jurisdictional purposes and appeals in such cases go to the Court of Appeals. Collins v. State, supra; but see Stanley v. State, 240 Ga. 341, 350 (241 SE2d 173) (1977); Thomas v. State, 240 Ga. 393, 404 (242 SE2d 1) (1977).
(2) A crime, such as kidnapping with bodily injury, on which the death penalty cannot be imposed, is nevertheless "another capital felony" for purposes of aggravating circumstances under Code Ann. § 27-2534.1 (b) (2). Peek v. State, 239 Ga. 422, 431-432 (238 SE2d 12) (1977); Davis v. State, 241 Ga. 376, 384 (247 SE2d 45) (1978).
(3) Under Code Ann. § 27-1408 a plea of nolo contendere to a charge of rape was not authorized because rape was a capital felony for purposes of that Code section, but such plea and sentence thereon were beneficial to the defendant and thus were harmless error. Fortson v. Hopper, 242 Ga. 81 (247 SE2d 875) (1978).[1]
(4) A murder trial at which the state does not seek the death penalty is not a capital case within the meaning of Code Ann. § 59-718.1, supra, and it is not error to allow the jury to disperse during such a murder case. Dean v. State, 238 Ga. 537 (3) (233 SE2d 789) (1977).
The case now before us is similar to Dean v. State, supra, except that it is not clear that the state was not seeking the death penalty at the time of the jury's dispersal.
From Code Ann. § 59-718.1, however, it is clear that it authorizes the judge to allow jury dispersal under appropriate instructions in all cases except capital cases. We therefore hold that, on appeal of conviction and sentence to life in prison, it is at most harmless error for the trial judge to have allowed jury dispersal (no improper conduct during dispersal being shown) in a murder case *659 where the death sentence, although sought by the state, was not imposed.
Judgment affirmed. All the Justices concur.
NOTES
[1] Other Code sections under which virtually this same question could arise are Code Ann. § 27-704 (waiver of indictment), and Code Ann. §§ 27-1901, 27-1901.1 (speedy trial). See Turner v. State, 136 Ga. App. 42, 44 (220 SE2d 57) (1975). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369863/ | 148 Ga. App. 375 (1978)
251 S.E.2d 393
HIZINE
v.
THE STATE.
56917.
Court of Appeals of Georgia.
Submitted November 14, 1978.
Decided December 5, 1978.
Ralph M. Walke, for appellant.
Beverly B. Hayes, District Attorney, James Stanley Smith, Jr., Assistant District Attorney, for appellee.
BANKE, Judge.
The appellant was convicted of armed robbery and aggravated assault. The indictments alleged that he and a co-defendant had beaten the victim and taken his money by using as offensive weapons a pair of hedge clippers, a chair, and a knife.
According to the victim's testimony at trial, the crimes occurred as follows. The two defendants were staying at the victim's home. The appellant began "tussling" with the victim and grabbed his wallet, causing the money to scatter onto the floor. The two men fell to the floor, still fighting. The victim picked up a knife and threatened to cut the appellant if he did not cease fighting, but the appellant continued to struggle. The victim cut the appellant twice on the arm and then discarded the knife. The co-defendant, who was standing nearby, picked up a pair of hedge clippers at this point and hit the victim over the head with them. The victim managed to wrest the clippers away, but the co-defendant then picked up a chair and hit the victim over the head with that. This and some subsequent beating subdued the victim and allowed the two defendants to take approximately $81 from him. Holding a knife to his back, the two defendants then forced the victim to walk outside and to enter his car. Realizing they had no key, the defendants ordered the victim to stay put and attempted to "hot-wire" the car. While their attention was thus diverted, the victim, though handicapped by an artificial leg, was able to escape across an open field.
Other witnesses testified for the state that they had seen the victim shortly after the time when this incident was alleged to have occurred and that he exhibited signs of a severe beating to the head and face. Held:
1. The verdicts were supported by the evidence. However, under the indictments, as drawn, the aggravated assault conviction must merge with the armed robbery conviction. The hedge clippers, the chair, and the knife were all used against the victim in an effort to subdue him prior to taking his money. Thus, the facts adduced to support the armed robbery charge, as it was set *376 forth in the indictment, were the same facts used to support the aggravated assault charge, as it was set forth in the indictment. Under these circumstances, the aggravated assault charge must be considered an included offense within the armed robbery charge pursuant to Code Ann. § 26-505 (a). See generally State v. Estevez, 232 Ga. 316 (206 SE2d 475) (1974). Compare Harvey v. State, 233 Ga. 41 (1) (209 SE2d 587) (1974); Coaxum v. State, 146 Ga. App. 370 (3) (246 SE2d 403) (1978). Accordingly, under Code Ann. § 26-506 (a), the appellant could not be convicted of both crimes, and the conviction for the included offense, aggravated assault, must be vacated. See Estevez v. State, 232 Ga. 316, supra; Keener v. State, 238 Ga. 7 (230 SE2d 846) (1976).
2. It was not error to decline to grant a mistrial following a reference to the appellant's failure to make a statement to police upon arrest, since no objection or motion for mistrial was made. See generally Gilmer v. State, 144 Ga. App. 611 (1) (152 SE2d 666) (1966).
3. The third enumeration of error cites several instances where the defendant's character was allegedly maligned. However, no objection was ever made to this testimony. Consequently, no error appears. See generally Sanders v. State, 134 Ga. App. 825 (1) (216 SE2d 371) (1975).
4. The fourth enumeration of error is deemed abandoned for failure to provide argument or citation of authority in support thereof. See Rule 18 (c) (2), Rules of the Court of Appeals.
Judgment of conviction for armed robbery affirmed. Judgment of conviction for aggravated assault vacated. Deen, P. J., and Smith, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369675/ | 251 S.E.2d 906 (1979)
Max R. JOYNER
v.
V. W. THOMAS and wife, Lula C. Thomas and H. E. Lowry and wife, Marion T. Lowry.
No. 783DC351.
Court of Appeals of North Carolina.
February 20, 1979.
*907 James, Hite, Cavendish & Blount by James M. Roberts and E. Cordell Avery, Greenville, for plaintiff-appellant.
No counsel for defendants-appellees.
ARNOLD, Judge.
The court, sitting without a jury, granted defendants' motion for directed verdict at the close of plaintiff's evidence. As plaintiff points out, the correct motion would have been for an involuntary dismissal under G.S. 1A-1, Rule 41(b), since the action was being tried without a jury. Compare G.S. 1A-1, Rule 50, Comment. However, such a motion, though improperly designated, may be treated on appeal as having been made under Rule 41. Higgins v. Builders & Finance, Inc., 20 N.C.App. 1, 200 S.E.2d 397 (1973), cert. den. 284 N.C. 616, 201 S.E.2d 689 (1974). Treating this motion as made under Rule 41, we find that it was necessary for the trial court to comply with that Rule and make findings as provided in G.S. 1A-1, Rule 52(a)(1): "the court shall find the facts specially and state separately its conclusions of law thereon."
*908 A motion for involuntary dismissal under Rule 41(b) has replaced the motion for nonsuit in civil actions tried without a jury. Whitaker v. Earnhardt, 289 N.C. 260, 221 S.E.2d 316 (1976). However, the questions presented by the two motions are not the same. The motion for nonsuit asked the court to determine whether the plaintiff's evidence, taken as true, would support a judgment for plaintiff. Helms v. Rea, 282 N.C. 610, 194 S.E.2d 1 (1973). The motion to dismiss, on the other hand "permits the trial judge to weigh the evidence, find facts against plaintiff and sustain defendant's motion at the conclusion of plaintiff's evidence even though plaintiff may have made out a prima facie case which would have repelled the motion for nonsuit." Whitaker v. Earnhardt, supra 289 N.C. at 264, 221 S.E.2d at 319. Because of this distinction, the language of the rule may be somewhat misleading in stating that defendant may move for dismissal "on the ground that upon the facts and the law the plaintiff has shown no right to relief." Our Rule 41(b) is identical to the federal rule. F.R.C.P. Rule 41(b). The present federal rule evolved from an original form which made no distinction between motions to dismiss in jury and nonjury cases, through an intermediate form which added the provision that when the motion was granted in a nonjury case the court might then determine the facts, to the present form which restricts the motion to dismiss to nonjury cases. 9 Wright & Miller, Federal Practice & Procedure § 2371. By allowing the court to determine the facts after granting the motion, the drafters of the rule established a distinction between a motion to dismiss and a directed verdict, id., and "[g]rant of the defendant's motion [at the close of plaintiff's evidence] is a decision on the merits in favor of defendant." Id. at 224. This concept, though criticized, see Steffen, The Prima Facie Case in Non-Jury Trials, 27 U.Chi.L.Rev. 94 (1959), has been adopted by most state courts, including ours.
It has been said repeatedly that it is the better practice for the trial court to take the alternative presented by the Rule and "decline to render any judgment until the close of all the evidence." See, e. g. Whitaker v. Earnhardt, supra; Helms v. Rea, supra. Where the trial court does not do so, but instead chooses to grant defendant's motion at the close of plaintiff's evidence, he must then find the facts and state his conclusions of law separately as required by the Rule. Since the court here failed to make these necessary findings we must vacate and remand for a new trial. Carteret Co. General Hospital Corp. v. Manning, 18 N.C.App. 298, 196 S.E.2d 538 (1973).
Since a new trial is awarded it is unnecessary for us to address the errors assigned to the court's rulings on evidentiary questions.
New trial.
PARKER and WEBB, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369692/ | 148 Ga. App. 87 (1978)
251 S.E.2d 36
SPEIGHT
v.
THE STATE.
56486.
Court of Appeals of Georgia.
Submitted September 19, 1978.
Decided October 18, 1978.
Rehearing Denied November 14, 1978.
Glenn Zell, for appellant.
Hinson McAuliffe, Solicitor, Andrew J. Hairston, Leonard W. Rhodes, James L. Webb, Assistant Solicitors, for appellee.
BIRDSONG, Judge.
The appellant was convicted of distributing obscene materials in violation of Code Ann. § 26-2101. Held:
1. Enumerated error No. 1 is unsupported by argument or citation of authority and is therefore deemed abandoned. Cochran v. Baxter, 142 Ga. App. 546, 547 (236 SE2d 528).
2. Appellant's constitutional attacks on Code Ann. § 26-2101 have been resolved adversely to him in Pierce v. State, 239 Ga. 844 (239 SE2d 28). Enumerated errors Nos. 2 and 4 are without merit.
3. Appellant objects to the warrantless seizure of, among other items, dildos and artificial vaginas. These devices were within the proscriptions of Code Ann. § 26-2101 and were therefore obscene as a matter of law. As the devices seized were at the time of seizure within the plain view of the confiscating officers, no warrant was required. Underwood v. State, 144 Ga. App. 684 (242 SE2d 339). As to printed materials allegedly protected by the First Amendment, the evidence shows that these items *88 were in fact purchased by arresting officers, not seized as appellant contends, and the trial court did not err in denying appellant's motion to suppress these items. Wood v. State, 144 Ga. App. 236 (240 SE2d 743).
4. Appellant's objection to a portion of the trial court's charge to the jury was decided adversely to him in Wood v. State, supra, p. 237 (4).
5. Code Ann. § 26-2101 proscribes the distribution of obscene materials "to any person." The trial court defined for the jury the phrase "any person" as "any person, regardless of age, sex, race, religion. It includes adults as well as minors." This definition was clearly within the plain meaning of the statute and was not error.
6. The trial court charged the jury verbatim the elements of Code Ann. § 26-2101 as to the definition of "obscene material." This charge was a correct statement of the law, Trotti v. State, 144 Ga. App. 648 (242 SE2d 270), and furthermore substantially embodied the principles contained in appellant's request to charge. The trial court did not err in refusing to charge the jury in the precise language requested by appellant when the charge given embodied the correct principles of law. Pollard v. State, 236 Ga. 587 (224 SE2d 420); Hostetler v. State, 145 Ga. App. 55 (243 SE2d 256).
Judgment affirmed. Bell, C. J., and Shulman, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369725/ | 175 S.W.3d 545 (2005)
James VANDEVENDER, Appellant,
v.
Honorable G. Mitch WOODS, In His Official Capacity as Sheriff of Jefferson County, Texas and Jefferson County, Texas, Appellees.
No. 09-04-477 CV.
Court of Appeals of Texas, Beaumont.
Submitted May 6, 2005.
Decided October 20, 2005.
Richard L. Aman, CLEAT Senior Staff Atty., Houston, for appellant.
Tom Maness, Criminal Dist. Atty., Thomas F. Rugg, First Asst., Civil Division, Beaumont, for appellees.
Before GAULTNEY, KREGER and HORTON, JJ.
OPINION
DAVID GAULTNEY, Justice.
Our prior opinion is withdrawn and the following opinion is issued. The motion for rehearing is overruled.
Appellant James VanDevender filed a declaratory judgment action in which he alleged appellees failed to pay his full salary during a second term after he sustained an on-the-job injury in his first term of employment as a deputy sheriff. See TEX. CONST. art. III, § 52e (Vernon 1997). VanDevender sought a judgment declaring appellees were to pay his full salary until he *546 returned to work, fully recovered, or through the end of the second term, whichever occurred first. He cited article III, section 52e of the Texas Constitution, which provides as follows:
Each county in the State of Texas is hereby authorized to pay all medical expenses, all doctor bills and all hospital bills for Sheriffs, Deputy Sheriffs, Constables, Deputy Constables and other county and precinct law enforcement officials who are injured in the course of their official duties; providing that while said Sheriff, Deputy Sheriff, Constable, Deputy Constable or other county or precinct law enforcement official is hospitalized or incapacitated that the county shall continue to pay his maximum salary; providing, however, that said payment of salary shall cease on the expiration of the term of office to which such official was elected or appointed. Provided, however, that no provision contained herein shall be construed to amend, modify, repeal or nullify Article 16, Section 31, of the Constitution of the State of Texas.
Id. The parties stipulated VanDevender was acting in the course and scope of his employment when he was injured on April 11, 2000.[1] He returned to work on August 14, 2000. The Sheriff's term ended on December 31, 2000. The Sheriff was elected to another four-year term, which began on January 1, 2001. VanDevender was redeputized, and he suffered another period of disability beginning March 2, 2001. He testified this second period of disability was caused by the injury of April 11, 2000.
After a bench trial, the trial court entered judgment that VanDevender take nothing. The court found as follows: the evidence neither proved nor disproved VanDevender's current disability was caused by his on-the-job injury; VanDevender was paid the constitutional benefit to which he was entitled; and VanDevender's entitlement to constitutional benefits ended on December 31, 2000, concurrently with the end of the Sheriff's term.[2]
VanDevender argues the trial court misinterpreted article III, section 52e of the Texas Constitution. See TEX. CONST. art. III, § 52e (Vernon 1997). VanDevender contends the constitutional provision is in essence a workers' compensation provision and must be liberally construed in favor of the injured worker. He cites The Kroger Co. v. Keng, 23 S.W.3d 347 (Tex. 2000), in which the Supreme Court stated, "it would be injudicious to construe the statute [worker's compensation] in a manner that supplies by implication restrictions on an employee's rights that are not found in [the section's] plain language." Id. at 349. VanDevender contends the constitutional provision should be construed to permit the payment of his full salary during a second term of employment in which the disability continued.
When section 52e was adopted, county law enforcement officers were not entitled to receive workers' compensation benefits. Frasier v. Yanes, 9 S.W.3d 422, 424 (Tex. App.-Austin 1999, no pet.). The workers' compensation statute was amended in 1973 to provide coverage for law enforcement officers. Id. at 425. Appellees argue that construing the constitutional provision as VanDevender asks would ignore the plain language of the provision and would create "a windfall never envisioned or intended *547 by the framers of the amendment at issue." Appellees assert a sheriff receives a limited budget to staff the office, and the construction VanDevender advocates may encourage a particular sheriff to reappoint or not reappoint a deputy based solely on the possibility of future incapacity. Under VanDevender's construction, if a deputy continued to be reappointed for each new term, a county would be required to continue full salary payments during incapacity; if a deputy was not reappointed, the continued salary payments would be prohibited. Appellees argue constitutional rights are not normally "bestowed or not bestowed by the whim of an elected official."
When interpreting the Texas Constitution, courts presume its language was carefully selected and construe its words as they are generally understood. Spradlin v. Jim Walter Homes, Inc., 34 S.W.3d 578, 580 (Tex.2000) (citing City of Beaumont v. Bouillion, 896 S.W.2d 143, 148 (Tex.1995)). Courts "rely heavily on the plain language of the Constitution's literal text." Id. (citing Republican Party v. Dietz, 940 S.W.2d 86, 89 (Tex.1997)). Effect is to be given to all phrases of a constitutional provision. See In Interest of McLean, 725 S.W.2d 696, 697-98 (Tex. 1987).
Article III, section 52e states the required "maximum salary" payment during the incapacity shall cease on the expiration of the term of office to which the official was elected or appointed. TEX. CONST. art. III, § 52e (Vernon 1997). A deputy sheriff's term expires when the sheriff's term expires. Samaniego v. Arguelles, 737 S.W.2d 88, 90 (Tex.App.-El Paso 1987, no writ). In Samaniego, the court explained that "[t]he recovery of working capacity or the consequent expiration of the coincident term of the sheriff, whichever comes first, would proscribe the deputy's claim." Samaniego, 737 S.W.2d at 90. The Samaniego court held a sheriff's discharge of an at-will deputy in mid-term did not affect the deputy's right to receive his full salary during incapacity until the end of the term. Id. VanDevender characterizes Samaniego as a case in which the court "declined the opportunity to interpret the constitutional provision in a manner that would restrict or limit the benefits afforded to injured law enforcement officers." However, Samaniego does not support the interpretation of Article III, section 52e that VanDevender asks us to adopt. See id. To the contrary, the Samaniego court explained the expiration of the term of office would proscribe the claim if the term expired before the deputy recovered working capacity. Id; see also Tarrant County v. Van Sickle, 98 S.W.3d 358, 364(Tex. App.-Fort Worth 2003, pet. denied).
In Tarrant Co. v. Van Sickle, the court held an injured deputy's constitutional right to full salary during incapacity ended when the sheriff's term ended. See id. In so holding the court said that "absent a formal rehiring of a deputy at the beginning of the sheriff's next term, the Texas Constitution prohibits a county from paying the deputy hired during the sheriff's previous term once the term expires." Id. The court held the trial court erred in ordering the county to pay Van Sickle his salary until the effective date of his retirement. The Van Sickle court did not answer the somewhat different question presented here: whether the Texas Constitution requires a county to pay the full salary during incapacity if the deputy is rehired for an additional term or terms.
We conclude that to construe the provision as VanDevender asks would fail to give effect to the plain meaning of the clause requiring the salary payment for an injury cease on the expiration of the term *548 of office to which the official was elected or appointed. Given the requirement in the limiting phrase that the payments "shall cease" on expiration of the term, we cannot construe the provision to give additional length to the "incapacity" phrase. The provision uses the word "term," not "terms," to describe the limitation on the required payment. As the court noted in County of El Paso v. Hill, 754 S.W.2d 267, 268 (Tex.App.-El Paso 1988, writ denied), "[t]he time of the injury in relation to the remaining days of the term can produce unequal recovery on the part of different deputy beneficiaries." Nevertheless, the Hill court held entitlement to salary continuation ceases at the end of the term or the date of recovery, "which ever comes first." Id. VanDevender states Hill is distinguishable because the injured deputy in Hill was not re-deputized when a newly-elected sheriff took office. See id. at 267. However, nothing in Hill suggests the court would have reached a different result if the deputy had been re-deputized for a second term. Rather, the court held the limitation was tied to the expiration of the term even if the incapacity continued beyond the end of the term. See id.
We conclude the trial court did not err in construing article III, section 52e. See TEX. CONST. art. III, § 52e (Vernon 1997). VanDevender's third issue is overruled. Because of this resolution of issue three, we need not address issues one and two. The judgment of the trial court is affirmed.
AFFIRMED.
NOTES
[1] VanDevender denied any other on-the-job injury occurred.
[2] VanDevender does not dispute the trial court's finding of fact that he was paid his constitutional benefits from the date of his injury through December 31, 2000. His entitlement to workers' compensation benefits is not at issue in this case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369772/ | 148 Ga. App. 193 (1978)
251 S.E.2d 51
GOODROE
v.
GEORGIA POWER COMPANY.
56401.
Court of Appeals of Georgia.
Argued September 19, 1978.
Decided October 25, 1978.
Rehearing Denied November 22, 1978.
Moore & McLaughlin, James B. McLaughlin, Jr., McKenney & Thornton, Neal D. McKenney, for appellant.
Jones, Cork, Miller & Benton, Wallace Miller, Jr., W. Warren Plowden, Jr., P. Benson Ham, Troutman, Sanders, Lockerman & Ashmore, James E. Joiner, for appellee.
BELL, Chief Judge.
This is an action for wrongful and malicious discharge from employment. Plaintiff alleged that he was hired as a permanent employee by defendant in 1975 as a security officer, and that in 1976 he was discharged without probable cause. Plaintiff also alleged a conspiracy between those employees of defendant responsible for procuring the discharge. Defendant answered that plaintiff's hiring was indefinite and therefore subject to being terminated at will by either *194 party. Plaintiff subsequently amended by alleging that defendant fired plaintiff "because he was about to uncover criminal activities being committed by the construction superintendent" at a Georgia Power plant. Thereafter, defendant moved for summary judgment with supporting affidavits, one of which contained evidence that plaintiff was discharged because of "an unauthorized offsite surveillance" of another employee and for his failure to cooperate in a Georgia Power security department investigation. Plaintiff submitted an affidavit in opposition to defendant's motion for summary judgment. In the affidavit, plaintiff stated that the official reason given to him by defendant for his termination was "failure to follow established departmental procedures and policies," but the actual reason was that the was fired as part of an effort to cover up criminal activities within the Georgia Power Company; that it was necessary to choose between covering up a crime of which he had knowledge or being fired. The trial court granted defendant's motion for summary judgment. Plaintiff appeals. Held:
1. We affirm. Plaintiff admits the statutory rule that an indefinite hiring may be terminated at will by either party and that his employment was subject to the statute. Code § 66-101. Nevertheless, plaintiff urges this court to find an exception to this rule since the reason for his termination was that he was about to uncover criminal activities. There is no room for this exception in Georgia as this rule is statutory and the statute, Code § 66-101, does not encompass the exception. See West v. First National Bank, 145 Ga. App. 808 (245 SE2d 46). Therefore, defendant was authorized to lawfully discharge plaintiff. Neither Ga. Power Co. v. Busbin, 145 Ga. App. 438 (244 SE2d 26) nor Wiley v. Ga. Power Co., 134 Ga. App. 187 (213 SE2d 550) requires a different result.
2. Since the defendant was legally entitled to discharge plaintiff, there can be no recovery under the conspiracy count of the complaint. A "conspiracy" to effect what one has a legal right to do is not actionable. Grace v. Roan, 145 Ga. App. 776 (245 SE2d 17). The grant of summary judgment was proper.
Judgment affirmed. Shulman and Birdsong, JJ., *195 concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369775/ | 148 Ga. App. 573 (1978)
251 S.E.2d 819
FOWLER et al.
v.
GORRELL.
56815.
Court of Appeals of Georgia.
Submitted November 6, 1978.
Decided December 5, 1978.
Rehearing Denied December 20, 1978.
Frank M. Gleason, James A. Secord, for appellants.
Cotton, Katz, White & Palmer, J. Timothy White, J. Michael Lamberth, for appellee.
WEBB, Judge.
Raymond B. Gorrell, d/b/a Gorrell Contracting Company, filed a complaint for damages arising from the alleged breach of a construction contract. In Count 1 Gorrell alleged that Don and Jerry Fowler had negotiated with him for construction of a building for a total price of $113,672.80; that he performed extra work at the Fowlers' request on a cost plus 21 per cent basis, which resulted in a total claim of $173,251.73; and that the Fowlers terminated his employment leaving a balance owing of $70,251.73, which sum he sought in damages for the breach of contract together with a lien of $28,000 on the property and other special and punitive damages for the breach of contract together with a lien of $28,000 on the property and other special and punitive damages. The second count sought the same damages on a quantum *574 merit basis. By amendment the total claim was changed to $85,689.89. All allegations were denied by the Fowlers. After a six-day trial the jury returned a verdict for $28,000 in Gorrell's favor on the contract and judgment was entered in that amount plus $5,880 interest. The Fowlers' motions for new trial and for judgment notwithstanding the verdict were denied and this appeal ensued. We reverse.
1. (a) The Fowlers insist that the trial court erred in refusing to grant their motion for j.n.o.v., particularly on the ground that the undisputed evidence showed that Gorrell endorsed and cashed a check which established an account stated of $9,299.67, and operated as an accord and satisfaction as to the remainder of the claim.
To the contrary, however, the evidence was in dispute. The Fowlers testified that according to their records they owed Gorrell $9,299.67; that every time they paid him, they wrote the balance on the check; that Gorrell accepted and cashed these checks; and that Gorrell never contended he was owed more before he filed the lien. Gorrell acknowledged that he had seen the check prior to trial and that the date, the check number and the amount on the exhibit were the same as that on the document he had inspected prior to trial. While the check bore the notation "Bldg. Acct. Bal. $9,299.67," Gorrell swore that he did not "remember that being on it." The check was dated August 31, 1973, but Gorrell testified that he was on the job practically all the time from July 1 until October 4, 1973, and the fact that work was performed in September and October was unrefuted.
This evidence, while raising the issue, is insufficient to establish as a matter of law the defense of accord and satisfaction, which is an affirmative defense under the Civil Practice Act (Code Ann. § 81A-108 (c)). The burden of proof lies with the party relying on the doctrine, McCullough v. Mobiland, Inc., 139 Ga. App. 260 (1) (228 SE2d 146) (1976), "which involves, among other things, an express agreement or some new consideration to [Gorrell]. See Code Ann. §§ 20-1201, 20-1203." Wood v. Wood, 239 Ga. 120, 121 (4) (236 SE2d 68) (1977). "The execution of a new agreement will itself amount to a satisfaction only where expressly so agreed by the parties. *575 Code § 20-1201. To render it binding there must be a meeting of the minds as to the subject matter embraced. Mason Gin &c. Co. v. Piedmont Acid Delinting, Inc., 126 Ga. App. 298 (190 SE2d 604). In Scott v. Imperial Hotel Co., 75 Ga. App. 91 (2) (42 SE2d 179) a check `in final settlement of every claim' was held subject to oral testimony as to the understanding of the parties concerning the meaning of `every claim,' so as to make the defense of accord and satisfaction a jury question. Where there is no agreement to settle all disputes arising from the contract a satisfaction does not result, although money is demanded and received. Huger v. Cunningham, 126 Ga. 684 (6) (56 S.E. 64); Oglethorpe Park v. Mayor &c. of Savannah, 101 Ga. App. 295 (2) (113 SE2d 645)." Pierson v. Herrington, 138 Ga. App. 463 (2) (226 SE2d 299) (1976).
Since the evidence as to accord and satisfaction was conflicting, the motion for judgment notwithstanding the verdict was properly denied. Maloy v. Planter's Warehouse &c. Co., 142 Ga. App. 69, 72 (2) (234 SE2d 807) (1977).
(b) The evidence does not present a defense of account stated. As defined by the Fowlers, "`An account stated is an agreement between persons who have had previous transactions, fixing the amount due in respect of such transactions, and promising payment.' [Cits.]" Stone v. First National Bank of Atlanta, 117 Ga. App. 802 (1) (162 SE2d 217) (1968). An account stated generally arises where the debtor has an open account with the creditor and agrees to pay a statement submitted by the creditor. Agreement as to the amount and a promise to pay are essential requisites. Lawson v. Dixie Feed &c. Co., 112 Ga. App. 562 (145 SE2d 820) (1965). None of the cases relied upon by the Fowlers involve the debtor's tendering a check to the creditor containing an amount purporting to establish the balance which would be due when the contract was completed; there is no indication on the check in question that the Fowlers were promising payment of $9,299.67; and there was no evidence of consent by Gorrell to the creation of an account stated.
2. (a) The Fowlers complain of the trial court's refusal to give to the jury their requested charges 6 and 7. Request to charge No. 6 was as follows: "I charge you that where a debtor remits to a creditor a sum of money and *576 places on the check evidencing such remittance a figure showing what the unpaid balance of the account between them actually amounts to, and the creditor accepts such check upon the condition stated thereon as to the balance due, and accepts or retains the money, an accord and satisfaction results to the extent of the amount of such payment, and the balance of the unpaid account becomes an account stated as to the balance owing thereon and shown on the face of such check. See: Thompson v. Hecht, 110 Ga. App. 505, 506 [139 SE2d 126] (1964) and the cases cited therein."
Request to charge No. 7, which is quite lengthy, is entirely concerned with the principles of account stated. No. 6 is not a correct statement of the rule enunciated in Thompson v. Hecht, 110 Ga. App. 505, supra, in that it attempts to engraft the theory of account stated to the accord and satisfaction doctrine.[1] We have concluded that the evidence did not support a defense of account stated and therefore neither request was authorized. It is well established that "`A request to charge itself must be correct, legal, apt, even perfect, and precisely adjusted to some principle involved in the case. If any portion of the request is inapt or incorrect, denial of the request is proper.' [Cits.]" I. B. E. W. v. Briscoe, 143 Ga. App. 417, 427 (5) (239 SE2d 38) (1977); C & S Bank v. Bailey, 144 Ga. App. 550, 552 (2) (241 SE2d 443) (1978); Kessel v. State, 236 Ga. 373, 374 (223 SE2d 811) (1976); and Seaboard C. L. R. Co. v. Thomas, 229 Ga. 301, 302 (190 SE2d 898) (1972).
(b) However, a review of the charge given in its entirety reveals that instructions were not given as to the law of accord and satisfaction, which was the Fowlers' primary defense. The only mention pertinent thereto was as follows: "The defendants further say and aver in their answer in the counterclaim, that the plaintiff had been paid in full by them for the amount of work he had performed, and materials furnished under the contract, and that they do not owe the plaintiff the amount sued for, *577 nor any other amount..." Although Fowler objected to the failure to give request to charge 6, no objection was made to the charge as given or the failure to instruct on the law of accord and satisfaction.
"A party in a civil case cannot complain of the giving or the failure to give an instruction to the jury, unless he objects thereto before the jury returns its verdict. Code Ann. § 70-207(a). The exception to the rule found in Code Ann. § 70-207(c) (harmful as a matter of law) is inapplicable `unless it appears that the error contended is "blatantly apparent and prejudicial" (Hollywood Baptist Church v. State Highway Dept., 114 Ga. App. 98, 99 (3) (150 SE2d 271) (1966), and that a "gross miscarriage of justice attributable to it is about to result." Nathan v. Duncan, 113 Ga. App. 630, 638(6b) (149 SE2d 383) (1966).' Metropolitan Transit System v. Barnette, 115 Ga. App. 17 (153 SE2d 656) (1967)." Sullens v. Sullens, 236 Ga. 645, 646 (224 SE2d 921) (1976).
Failure to charge on any legal theory of recovery is harmful as a matter of law. "`From an early date the Supreme Court has uniformly held that the law of the case must be given the jury to the extent of covering the substantial issues made by the evidence, whether requested or not, or attention be called to it or not; otherwise the verdict will be set aside.' [Cits.]" King v. Luck Illustrating Co., 21 Ga. App. 698, 699 (94 S.E. 890) (1918); Hager v. O'Neal, 147 Ga. App. 100 (1978). "It is the duty of the court to charge the jury on the law `as to every controlling, material, substantial and vital issue in the case.' [Cits.] `Where it fails to give . . .the benefit of a theory of the defense which is sustained by the evidence... a new trial must be granted. [Cits.]' Lincoln Life Ins. Co. v. Anderson, 109 Ga. App. 238, 240 (136 SE2d 1)." Berger v. Plantation Pipeline Co., 121 Ga. App. 362, 364 (6) (173 SE2d 741) (1970). See also Am. Family Life Ins. Co. v. Glenn, 109 Ga. App. 122, 126 (4) (135 SE2d 442) (1964). For this reason denial of appellants' motion for new trial was erroneous.
3. Since the case must be remanded for a new trial it is unnecessary to consider remaining enumerations of error as to the amount of damages awarded.
Judgment reversed. Smith and Birdsong, JJ., concur. *578 Deen, P.J., McMurray and Banke, JJ., concur in the judgment only. Bell, C. J., Quillian, P. J., and Shulman, J., dissent.
McMURRAY, Judge, concurring in judgment only.
I concur in the judgment only, but not in all that is said in the opinion.
Here the appellants did request a charge on accord and satisfaction in their voluminous written request to charge No. 7. The majority has cited an old rule that a written request to charge itself must be correct, legal, apt and even perfect, that is, precisely adjusted to some principle involved in the case. It then contends that if any portion of the request is inapt or incorrect denial of the request is proper. It is true in the case sub judice that the appellants had a written request to charge containing some six paragraphs and some of this written request was argumentative and the appellants should have divided this request into several in order for the court to fully understand and consider what this request was all about.
However, I am of the opinion that the authority for the rule cited by the majority is a carry over of old Code § 70-207, wherein the court decisions thereunder required that a written request to charge be ever perfect.
But this Code section was repealed by the Appellate Practice Act of 1965 (Ga. L. 1965, pp. 18, 31, 38; since amended, 1966, pp. 493, 498; 1968, pp. 1072, 1078). Section 17 of that Act (shown by the publishers of the annotated Code as Code Ann. § 70-207; supra), created an entirely different statute as to written requests, and is not an amendment of Code § 70-207. The cases cited are based on old Code § 70-207, or either they misconstrue the new law as an amendment of that section.
I, therefore, am of the opinion that even though the *579 written request was voluminous, some of which should not have been charged, nevertheless the law of accord and satisfaction should have been given which was contained in the voluminous request by the appellants. I agree with the majority in reversing the judgment.
Deen, P. J., and Banke, J., join in this concurrence in the judgment only.
QUILLIAN, Presiding Judge, dissenting.
I agree with the opinion that request to charge 6 was not authorized and the trial judge did not err in failing to give such charge. However, I cannot agree that it was error to fail to charge the law of accord and satisfaction. The record reveals that the appellant objected to the failure to give request to charge 6, but no objection was made with regard to the charge as given or the failure to charge the law of accord and satisfaction. Code Ann. § 70-207 (Ga. L. 1965, pp. 18, 31; as amended through Ga. L. 1968, pp. 1072, 1078) provides: "No party may complain of the giving or the failure to give an instruction to the jury, unless he objects thereto before the jury returns its verdict, stating distinctly the matter to which he objects and the grounds of his objection."
Shulman, J., joins in this dissent.
NOTES
[1] Compare Pattern Jury Instructions Civil, Superior Court Judges of Georgia, § III-4 at p. 27. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369770/ | 251 S.E.2d 640 (1979)
39 N.C. App. 617
Donald Reid HANKINS
v.
Robert Vance SOMERS, John Hann, Martha Greenway, and Youth Opportunities Unlimited.
No. 7819SC181.
Court of Appeals of North Carolina.
February 6, 1979.
*641 Brinkley, Walser, McGirt & Miller by Walter F. Brinkley, Lexington, for defendant-appellant Somers.
Somers & Eagle, Kenneth L. Eagle, Salisbury, for defendants-appellants Hann, Greenway and YOU.
No counsel for plaintiff-appellee.
ARNOLD, Judge.
Denial of a motion to dismiss for failure to state a claim upon which relief can be granted is not a final determination within the meaning of G.S. 1-277(a), does not affect a substantial right, and is not appealable. North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434, 206 S.E.2d 178 (1974), and cases cited *642 therein. Appeal by defendant Somers is therefore premature and must be dismissed.
The other defendants, however, are entitled by G.S. 1-277(b) to an immediate appeal of the denial of their motion to dismiss for lack of jurisdiction.
Plaintiff alleges that defendants Hann and Greenway are residents of Georgia and that defendant YOU is a general partnership having its principal office and place of business in Georgia. He alleges that in approximately November of 1976 they entered into a conspiracy with defendant Somers, a North Carolina resident, to copy and market his idea, and that defendant Somers acted as both partner and agent of the Georgia defendants.
Defendants Hann and Greenway, in support of their motion to dismiss, filed affidavits that they are residents of Georgia and general partners in defendant YOU; that YOU has its principal and only office in Georgia and has never had an office in North Carolina; that there are no other partners, either general or limited, in the business; that YOU has no directors or salesmen in North Carolina; that to the best of the affiants' knowledge no YOU products have ever been sold in North Carolina; and that defendant Somers is not a partner, the attorney or the agent of YOU.
Plaintiff filed an affidavit in opposition to the motion to dismiss. He stated that defendants Hann and Greenway had sold the products of another business in which they were engaged in North Carolina to a substantial extent, and that YOU placed an advertisement identical to plaintiff's advertisement for AYE in a national magazine. He further alleged on information and belief that defendant Somers, as a partner in and agent of YOU, solicited several North Carolina residents to write to plaintiff for material about his marketing program, so that the material could be passed on to YOU.
Error is first assigned to the failure of the court to make findings of fact in support of the denial of their motion to dismiss. G.S. 1A-1, Rule 52(a)(2) provides that the judge need not make findings of fact when ruling upon a motion unless required by Rule 41(b) or requested by a party to do so. No request was made in this case. "It is presumed, when the Court is not required to find facts . . . and does not do so, that the court on proper evidence found facts to support its judgment." Sherwood v. Sherwood, 29 N.C.App. 112, 113-14, 223 S.E.2d 509, 510-11 (1976).
Defendants also contend that plaintiff's evidence in opposition to the motion was not credible because the complaint was unverified and the affidavit contained statements sworn to on information and belief. G.S. 1A-1, Rule 11(a) provides that generally pleadings need not be verified, so no lack of credibility is implied by the absence of a verification. In support of their contention that any matters contained in plaintiff's affidavit on information and belief should be stricken, defendants argue that the requirement of G.S. 1A-1, Rule 56(e) that affidavits on motions for summary judgment "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein" should be read into G.S. 1A-1, Rule 43(e). To the extent that Rule 43(e) applies to a motion to dismiss, we agree. A motion to dismiss can result in termination of a lawsuit just as much as a motion for summary judgment. Accordingly, the judge should rely only on material that would be admissible at trial in ruling on the motion.
We thus consider whether there were sufficient allegations based upon plaintiff's personal knowledge to support the exercise of personal jurisdiction over the Georgia defendants. G.S. 1-75.4 sets out the grounds for personal jurisdiction. G.S. 1-75.4(3) deals with injury arising from an act or omission within the State. Here the only allegation of a local act or omission on the part of defendant YOU is the allegation that defendant Somers as partner in and agent of YOU did some acts of the conspiracy within North Carolina. *643 As this allegation was based only upon plaintiff's information and belief, it was not properly before the trial court, and there is no basis for an exercise of jurisdiction over YOU under subsection (3).
G.S. 1-75.4(4) provides for jurisdiction where there is a local injury arising from a foreign act or omission and solicitation or services were carried on by defendant within the state or defendant's products were used there in the ordinary course of trade. There is no allegation that YOU's products were used within North Carolina. It is alleged, however, that defendant YOU placed an advertisement in national magazines circulating in North Carolina, and it has been held that such solicitation is sufficient to satisfy the statutory requirement. See Federal Ins. Co. v. Piper Aircraft Corp., 341 F. Supp. 855 (W.D.N.C.1972), aff'd 473 F.2d 909 (4th Cir. 1973). However, we need not determine whether we are in accord with the federal courts on this question, since we hold that even if the statute is satisfied here, due process is not.
As was pointed out in Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977), a question of in personam jurisdiction requires a two-part inquiry: whether the statutory requirements are met, and if they are, whether the exercise of jurisdiction authorized by the statute satisfies due process. Assuming that the statutory requirement of "solicitation within the State" is satisfied, we find that the placing of advertisements in national magazines, without more, is not sufficient contact to fall within "`traditional notions of fair play and substantial justice,'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95, 102 (1945), as a basis for the exercise of personal jurisdiction.
With respect to defendants Hann and Greenway, plaintiff alleged in his affidavit opposing the motion to dismiss that from 1974 through the time of his lawsuit the defendants were engaged in the business of selling wire art products, and that such products were sold and used in North Carolina in the ordinary course of trade to a substantial extent. This allegation is sufficient to satisfy G.S. 1-75.4(4). "There is no requirement that the cause of action, pursuant to which the jurisdictional claim is raised, be related to the activities of the defendant which gives [sic] rise to the in personam jurisdiction." Munchak Corp. v. Riko Enterprises, Inc., 368 F. Supp. 1366, 1372 (M.D.N.C.1973). The plaintiff has met his initial burden of proving the existence of jurisdiction by a prima facie showing that the statutory requirements have been met, Bryson v. Northlake Hilton, 407 F. Supp. 73 (M.D.N.C.1976), and the defendants have not contradicted his allegations. We find that the requirements of due process are also satisfied. By their wire art business activities, defendants have "purposefully [availed themselves] of the privilege of conducting activities within [North Carolina], thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283, 1298 (1958).
As to defendant Somers, appeal dismissed.
As to defendant YOU, reversed.
As to defendants Hann and Greenway, affirmed.
HEDRICK and VAUGHN, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369787/ | 148 Ga. App. 513 (1978)
251 S.E.2d 598
THOMASON et al.
v.
THE STATE.
56807.
Court of Appeals of Georgia.
Argued November 6, 1978.
Decided December 5, 1978.
Rehearing Denied December 19, 1978.
Cook & Palmour, Bobby Lee Cook, Sr., Kinney, Kemp, Pickell, Avrett & Sponcler, F. Gregory Melton, for appellants.
Charles A. Pannell, Jr., District Attorney, James E. Bethel, Assistant District Attorney, for appellee.
WEBB, Judge.
Ronnie and Linda Thomason appeal from their convictions of violating the Controlled Substances Act (Code Ann. § 79A-801 et seq.), complaining of the denial of the motion to suppress evidence and other similar rulings. We reverse.
An officer appeared before justice of the peace McKeehan for the purpose of obtaining a search warrant and, after its issuance, Judge McKeehan and eight officers, together with a dog named "Satan," combined in several automobiles, one of which was owned by Judge McKeehan, and converged upon the Thomasons' residence at 1 a. m. While the search was in progress Judge McKeehan moved about observing the procedure and the items being seized, conversing with the officers as well as with Linda Thomason, and remaining for 1 1/2 hours until the search was concluded, whereupon he *514 prepared arrest warrants for the Thomasons.
We find this impermissible. As we recently held, "[t]he rule under the Fourth Amendment that a warrant be issued by a neutral and detached magistrate requires severance and disengagement from activities of law enforcement." Baggett v. State, 132 Ga. App. 266 (208 SE2d 23) (1974), citing Shadwick v. City of Tampa, 407 U.S. 345 (92 SC 2119, 32 LE2d 783) (1972), and applying the per se rule of disqualification of Coolidge v. New Hampshire, 403 U.S. 443 (91 SC 2022, 29 LE2d 564) (1971).
While the state contends that the instant case is saved from the operation of the rule by evidence that Judge McKeehan went along on this raid to determine whether there was probable cause for the issuance of additional search warrants, we need consider this contention no further since it appears from the record that this was not an isolated incident but part of an ongoing practice. To our minds this so conveys the impression that Judge McKeehan had "thrown in" with officers of the law as to negate any possibility of a finding of "severance and disengagement from activities of law enforcement" (Shadwick v. City of Tampa, 407 U.S. 345, 350, supra), and the trial court erred in so ruling. Accord, State v. Guhl, 140 Ga. App. 23 (230 SE2d 22) (1976).
Judgment reversed. Bell, C. J., Deen, P. J., Quillian, P. J., Smith, Shulman, Banke and Birdsong, JJ., concur. McMurray, J., dissents.
McMURRAY, Judge, dissenting.
Law enforcement officers executing a search warrant of defendants' home discovered quantities of *515 marijuana, phenobarbital, cocaine, phentermine, amobarbital and secobarbital. Defendants were subsequently indicted, tried, convicted and sentenced for multiple violations of the Georgia Controlled Substances Act. The majority holds that the search of defendants' home was conducted pursuant to a search warrant issued by a justice of the peace whose conduct has demonstrated that he was not a neutral and detached magistrate at the time of issuing such search warrant.
Pursuant to stipulation the motion to suppress was decided by the trial court on the basis of the search warrant, the record of the preliminary hearing and an affidavit submitted by the justice of the peace who issued the search warrant. The testimony at the preliminary hearing revealed that the justice of the peace accompanied law enforcement officers when they went to defendants' home to execute the search warrant. The justice of the peace remained outside in his automobile until the premises had been secured, at which time he came into the house and stayed until the search was completed. The justice of the peace stayed back out of the way, moving about the home with other law enforcement officers as necessary to vacate a portion of the home to facilitate searches for drugs by the canine named Satan. After the search was completed the justice of the peace accompanied the law enforcement officers to the Whitfield County Correctional Center. There the itemized return on the search warrant was made to the justice of the peace.
The affidavit submitted by the justice of the peace shows that during the conversation with the law enforcement officers regarding the issuance of the search warrant in this case the officers discussed with the justice of the peace the fact that several vehicles were located at the defendants' residence and they had information that possibly one or more of these vehicles contained contraband. The justice of the peace determined that there was not enough evidence to issue a search warrant for those vehicles, and the law enforcement officers then asked him to accompany them to the defendants' home so that if sufficient probable cause was determined by an on the scene investigation a search warrant for a particular vehicle could be issued. The justice of the peace agreed to *516 accompany law enforcement officers for this purpose but did not take any active part whatsoever in the search and did not question anyone at the home about anything that was going on.
The majority concludes that the justice of the peace was not a neutral and detached magistrate because he had "thrown in" with officers of the law so as to negate any possibility of a finding of "severance and disengagement from activities of law enforcement." In supporting this conclusion the majority cites such cases as Baggett v. State, 132 Ga. App. 266 (208 SE2d 23); State v. Guhl, 140 Ga. App. 23 (230 SE2d 22); Coolidge v. New Hampshire, 403 U.S. 443 (91 SC 2022, 29 LE2d 564); Shadwick v. City of Tampa, 407 U.S. 345 (92 SC 2119, 32 LE2d 783). I feel, however, that an examination of these cases discloses that they are inapposite on the facts as in each case the degree of involvement in law enforcement activities by the magistrate is much greater than in this case and distinctly different in that in those cases the magistrate has actively participated in a law enforcement function while in this case the justice of the peace, although present at the scene of the search, did not participate in any way. In Baggett v. State, supra, the justice of the peace in question was employed as a radio dispatcher on weekends, which required him to dispatch policemen and to frequently communicate with other police officers in the area. In State v. Guhl, supra, at p. 24 (1) (revd. on other grounds in 239 Ga. 3 (235 SE2d 509)), the judge who issued the warrant in question was so actively affiliated with the district attorney's investigatory and prosecutorial functions with the special investigative grand jury as to warrant his disqualification. His activities, which are too numerous to list here, show that he was daily involved in advising, assisting and aiding progress of the district attorney's investigation of the defendants in that case. In Coolidge v. New Hampshire, supra, at pp. 449-453 (1), the search warrant was issued by the attorney general of New Hampshire who was authorized as a justice of the peace to issue warrants under the then existing state law, had personally taken charge of all police activities related to that case and was later to serve as chief prosecutor at the trial. The *517 remaining case cited in the majority opinion (Shadwick v. City of Tampa, supra) upholds the authority of municipal court clerks to issue arrest warrants for breach of municipal ordinances pursuant to a Florida statute.
There is no question that the magistrate issuing a search warrant must be neutral and detached, and that the requirement of a neutral and detached magistrate requires severance and disengagement from activities of law enforcement. See Baggett v. State, supra, and Shadwick v. City of Tampa, supra, at 350 (3). My difference of opinion with the majority arises from the fact that the mere presence of the justice of the peace at the scene of the search under the circumstances of this case does not necessarily compel the conclusion that the justice of the peace is thereby engaged in the activities of the law enforcement officers.
The majority draws its impression that the justice of the peace had "thrown in" with officers of the law despite conflicting evidence in the form of the justice of the peace's affidavit that he was present at the scene of the search solely as a matter of convenience to the law enforcement officers and to facilitate his availability to them. This court is a court for the correction of errors of law only and should respect the decision of the trier of fact where there is conflicting evidence. On motion to suppress evidence the trial court is the trier of fact. See State v. Betsill, 144 Ga. App. 267 (240 SE2d 781). In the case sub judice the trial court determined that the justice of the peace did not participate in law enforcement activities. Although there was conflicting evidence, this finding of fact by the trial court is supported by evidence and should not be disturbed by this court.
The remaining enumerations of error are also without merit, and I would affirm the judgment.
I, therefore, respectfully dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369785/ | 251 S.E.2d 419 (1979)
296 N.C. 467
Floyd MOORE
v.
FIELDCREST MILLS, INC. and Monsanto Company.
No. 43.
Supreme Court of North Carolina.
February 5, 1979.
*421 Narron, Holdford, Babb, Harrison & Rhodes, P.A. by William H. Holdford, Wilson, attys., for plaintiff-appellant.
Young, Moore, Henderson & Alvis by R. Michael Strickland, Raleigh, attys., for Fieldcrest Mills, Inc., defendant-appellee.
Connor, Lee, Connor, Reece & Bunn by John M. Reece, Wilson, attys., for Monsanto Co., defendant-appellee.
HUSKINS, Justice:
Legal principles applicable to summary judgment are discussed in Kessing v. Mortgage Corp., 278 N.C. 523, 180 S.E.2d 823 (1971), and have been applied in many cases by this Court. Authoritative decisions, both state and federal, interpreting and applying Rule 56 hold that the party moving for summary judgment has the burden of "clearly establishing the lack of any triable issue of fact by the record properly before the court. His papers are carefully scrutinized; and those of the opposing party are on the whole indulgently regarded." 6 Pt. 2 Moore's Federal Practice, § 56.15[8], at 642 (2d ed. 1976); Singleton v. Stewart, 280 N.C. 460, 186 S.E.2d 400 (1972). "This burden may be carried by movant by proving that an essential element of the opposing party's claim is nonexistent or by showing through discovery that the opposing party cannot produce evidence to support an essential element of his claim. If the moving party meets this burden, the party who opposes the motion for summary judgment must either assume the burden of showing that a genuine issue of material fact for *422 trial does exist or provide an excuse for not so doing." Zimmerman v. Hogg & Allen, 286 N.C. 24, 209 S.E.2d 795 (1974).
The language of the rule itself conditions the rendition of summary judgment upon a showing by the movant that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The court is not authorized by Rule 56 to decide an issue of fact. It is authorized to determine whether a genuine issue of fact exists. The purpose of summary judgment is to eliminate formal trials where only questions of law are involved by permitting penetration of an unfounded claim or defense in advance of trial and allowing summary disposition for either party when a fatal weakness in the claim or defense is exposed. Caldwell v. Deese, 288 N.C. 375, 218 S.E.2d 379 (1975). "The device used is one whereby a party may in effect force his opponent to produce a forecast of evidence which he has available for presentation at trial to support his claim or defense. A party forces his opponent to give this forecast by moving for summary judgment. Moving involves giving a forecast of his own which is sufficient, if considered alone, to compel a verdict or finding in his favor on the claim or defense. In order to compel the opponent's forecast, the movant's forecast, considered alone, must be such as to establish his right to judgment as a matter of law." 2 McIntosh, N. C. Practice and Procedure, § 1660.5 (2d ed. Phillips Supp.1970). "If there is any question as to the credibility of witnesses or the weight of evidence, a summary judgment should be denied. . . ." 3 Barron and Holtzoff, Federal Practice and Procedure, § 1234 (Wright ed. 1958).
We now determine the propriety of summary judgment for defendants in this case by applying these legal principles to the record properly before us.
Was plaintiff injured by the negligence of the defendants or either of them? This is the overriding issue of fact which plaintiff must establish at trial in order to prevail on his cause of action. To support their motions for summary judgment and establish the non-existence of negligence on the part of either defendant, movants offered the depositions of William M. Boyd and plaintiff Floyd Moore.
Boyd stated in his deposition that it was his duty to unload the trailer; that he used a Clark tow-motor, squeeze type, to lift the bales and transport them from the trailer into the warehouse; that plaintiff Floyd Moore delivered the load of acrylic fiber bales on 5 May 1975 and backed the tractor-trailer into the ramp which slopes downward to the unloading dock; that when the vehicle came to rest the rear of the trailer was approximately level with the unloading dock but lower than the front end of the trailer due to the incline on which it rested; that the cargo consisted of Monsanto fiber in bales about three feet wide, three and one-half feet long, and weighing 490 to 525 pounds; that each bale was wrapped in a clear plastic fiber; that the trailer was sealed and the seal was broken immediately before the unloading began; that the Clark tow-motor had a guard rail over the top of the man operating it to protect him from bales that might fall off the tow-motor; that a view of the cargo after the seal was broken and the trailer opened revealed that the bales had been loaded "longways on one side of the trailer and the other side was crossways"; that the trailer was full from bottom to top, i. e., each row was four bales high, and the length of the bales on one side was perpendicular to the length of the trailer while the length of the bales on the other side was parallel to the length of the trailer; that a Fieldcrest lot number was assigned to this cargo and the number had to be stamped or stenciled on each bale as it was unloaded and taken into the warehouse; that after deponent Boyd had unloaded five or six bales with the tow-motor and affixed the lot number on each bale himself, plaintiff Floyd Moore suggested that he would put the lot numbers on the bales to speed up the unloading process and entered the trailer for that purpose; that some of the bales fell on plaintiff while deponent Boyd was in the warehouse; that deponent was not present when the bales *423 fell and did not know what, if anything, plaintiff did to cause them to fall; that the rescue squad was summoned and Mr. Moore was taken to the hospital.
William M. Boyd further stated in his deposition that some companies load the bales with their length perpendicular to the sides of the trailer while others load the bales with the length of the bales parallel to the sides of the trailer"some load it different ways"; that in his experience from working on the first shift the only shipper loading bales in the manner the 5 May 1975 shipment was loadedi. e., lengthwise on one side of the trailer, crosswise on the otherwas Monsanto; that he didn't know how bales were loaded on the second and third shifts; that bales of acrylic fiber with the plastic exterior coating are a little slippery; that the occasion when plaintiff was injured on 5 May 1975 was the first time any bales had fallen at the warehouse; that plaintiff was in the trailer putting the lot numbers on the bales, or at least was in there for that purpose, when the bales fell on him"the purpose of having Mr. Moore put the lot numbers on the bales was to speed up the unloading process, that was Mr. Moore's suggestion."
Plaintiff Floyd Moore in his deposition stated in pertinent part that he had worked for Thurston Motor Lines for 28-29 years; that he picked up the sealed trailer at Thurston Motor Lines in Wilson, took it to the Fieldcrest warehouse in Greenville, North Carolina, and backed it down the ramp to the unloading dock; that after the seal was broken he observed the way the bales were stacked and saw nothing unusual about it; that William M. Boyd, the Fieldcrest employee in charge of unloading the trailer, handed him a stencil pencil and said "if you'll mark those bales for me, it'll probably rush up unloading"; that he walked into the trailer for that purpose and started marking the bales that were lengthwise along the right side; that he had marked two or three bales loaded parallel to the length of the trailer when several bales fell on him and he could not say whether the bales that fell "were lengthways bales or crossways bales"; that he could not say which stack of bales fell; that he noticed nothing unusual about the tow-motor going in and out or in the amount of vibration caused by the tow-motor; that he did not see any bales out of line with each other; that he noticed nothing unusual "about the position of any bale as far as its alignment with the bales above it or below it . . . . I do not know what caused the bales to fall.. . . I have seen this type of cargo before. I'd seen it before at Fieldcrest Mills. I had delivered this type of bales to Fieldcrest on prior occasions a couple of times I know. . . . I was asked to put numbers on the bales. . . . It was not part of my regular job to unload bales of this type"; that the bales in this trailer were stacked some lengthwise and some crosswise; that "I have seen other trucks with other bales in it loaded all lengthwise, I've seen them with all lengthwise and I've seen them loaded both ways. I've seen them all loaded the long ways in a trailer and I've seen them all loaded crossways in a trailer."
When the two depositions offered by defendants in support of their motions for summary judgment are viewed in the light most favorable to plaintiff, the "evidentiary forecast" offered by defendants is such that, if offered by plaintiff at the trial, without more, would compel a directed verdict in defendants' favor. The two depositions, one by plaintiff himself, establish a lack of negligence on the part of either defendant and entitle both defendants to judgment as a matter of law unless forestalled by a forecast of evidence by plaintiff sufficient to counter the effect of the two depositions by showing some negligent act on the part of one or both defendants proximately causing plaintiff's injury. Plaintiff offered nothingno counter-affidavits, admissions in pleadings, depositions, answers to interrogatories, or any other evidentiary materials permitted by Rule 56(c). In that factual context we are constrained to hold that the supporting evidence offered by defendants establishes that there is no genuine issue as to any material fact and that defendants are entitled to a judgment as a *424 matter of law. Kessing v. Mortgage Corp., supra; Caldwell v. Deese, supra; Zimmerman v. Hogg & Allen, supra; Page v. Sloan, 281 N.C. 697, 190 S.E.2d 189 (1972); Koontz v. City of Winston-Salem, 280 N.C. 513, 186 S.E.2d 897 (1972).
As a general proposition, issues of negligence are ordinarily not susceptible of summary adjudication either for or against the claimant "but should be resolved by trial in the ordinary manner." 6 Pt. 2 Moore's Federal Practice, § 56.17[42] at 946 (2d ed. 1976). Hence it is only in exceptional negligence cases that summary judgment is appropriate because the rule of the prudent man, or other applicable standard of care, must be applied, and ordinarily the jury should apply it under appropriate instructions from the court. Caldwell v. Deese, supra; Gordon, The New Summary Judgment Rule in North Carolina, 5 Wake Forest Intra.L.Rev. 87 (1969). Even so, where, as here, the motion for summary judgment is supported by evidentiary matter showing a lack of negligence on the part of the movants and there is no question as to the credibility of witnesses and no evidence is offered in opposition thereto, no issue is raised for the jury to consider under appropriate instructions. See 6 Pt. 2 Moore's Federal Practice, § 56.17[42] at 948-49 (2d ed. 1976). The result is summary judgment for the movants.
The decision of the Court of Appeals upholding summary judgment for defendants is
AFFIRMED.
COPELAND, Justice, dissenting.
In his complaint the plaintiff alleged, inter alia, that the bales of fiber were negligently loaded by Monsanto Company. He claimed that other companies loaded similar bales with the length running with the length of the trailer whereas the shipment in question was loaded with the length of some of the bales running with the width of the trailer. When loaded this unusual way, plaintiff claimed "the stacks of bales were unstable and would tumble over."
William Boyd had been employed by Fieldcrest Mills for twenty-four years. His job primarily entailed spotting and unloading tractor-trailers, and he received all the shipments coming to Fieldcrest Mills on the day shift. He testified by deposition that "[i]n my experience the only carrier loading bales in the manner that these bales in the May 5, 1975 shipment from Monsanto were loaded was Monsanto."
Considering the length of time Mr. Boyd had been dealing with such shipments, surely his testimony is evidence that the bales in question were loaded in a manner contrary to ordinary custom and usage. Although deviation from custom is not controlling, it constitutes some evidence of negligence. See Woodall Flying Service, Inc. v. Thomas, 27 N.C.App. 107, 218 S.E.2d 203 (1975). See also W. Prosser, Torts § 33 (4th ed. 1971); 57 Am.Jur. Negligence §§ 77 et seq. (1971) and cases cited therein.
The defendants moved for summary judgment in this case; therefore, the burden is on them to show that there is no genuine issue as to a material fact and that they are not negligent as a matter of law. They did not meet this burden.
The testimony of Mr. Boyd constituted some evidence of the defendants' negligence. They brought forth no evidence at all that the unusual method used in loading this shipment of heavy bales was reasonably safe. Thus, defendants did not meet their initial burden. If such evidence had been presented, perhaps the plaintiff would then have had to come forth with evidence to the contrary in order to show that there was a genuine issue for trial. The trial court's grant of summary judgment for the defendants was improper in this case. For this reason, I would reverse the decision of the Court of Appeals.
EXUM, J., joins in this dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369790/ | 242 Ga. 751 (1978)
251 S.E.2d 250
ANDERSON
v.
LITTLE & DAVENPORT FUNERAL HOME, INC.
33896.
Supreme Court of Georgia.
Argued September 12, 1978.
Decided November 22, 1978.
Rehearing Denied December 20, 1978.
Ross & Finch, Baxter H. Finch, Charles E. McCranie, Smith, Cohen, Ringel, Kohler & Martin, Ralph H. Hicks, for appellant.
Kenyon, Hulsey & Oliver, J. D. Smith, Jr., for appellee.
BOWLES, Justice.
The appellant, Elaine Myers Anderson, fainted and collapsed while grocery shopping. Appellee, Little & Davenport Funeral Home, Inc., was called and requested to send an ambulance to appellant's aid. While awaiting the ambulance's arrival, appellant was administered cardiopulmonary resuscitation by employees of the grocery store. When appellee's ambulance arrived, the resuscitation procedure was terminated. Two of appellee's employees placed appellant on a stretcher and into the ambulance. An oxygen mask was placed over appellant's face by one of appellee's employees. Appellant was transported to a nearby hospital for medical care. As a result of oxygen starvation, appellant suffered anoxia to her brain and entered a permanent coma.
Appellant, by her husband as next friend, filed an action for personal injuries and damages against the appellee alleging that the appellant's injuries were solely, directly and proximately caused by appellee's negligence, acting by and through its employees and agents. Appellee filed an answer which denied the allegations of the complaint and incorporated therein a motion to dismiss for failure to state a claim for which relief could be granted. Appellee's motion to dismiss was based upon the provisions of Code Ann. § 88-3114 which reads as follows: "Any person including agents and employees, who is licensed to furnish ambulance service and who in good faith renders emergency care to a person who is a victim of *752 an accident or emergency shall not be liable for any civil damages to such victim as a result of any act or omission by such person in rendering such emergency care to such victim." Ga. L. 1972, pp. 626, 633. The trial court found this code section to be controlling in the case and dismissed the appellant's complaint.
Appellant appeals challenging the constitutionality of Code Ann. § 88-3114. For the purpose of this appeal, the parties have stipulated that the appellee was a duly "licensed" ambulance service and acted in "good faith" in rendering emergency care to the appellant, thus bringing the appellee under the protection of the statute.
1. Appellant contends that Code Ann. § 88-3114 is unconstitutionally vague, indefinite and uncertain in meaning in that the words "good faith," "emergency" and "emergency care" are not properly defined in the statute thus providing no guidance in determining eligibility under its provisions.
"It is a general principle of statutory law that a statute must be definite and certain in its provisions to be valid, and when it is so vague and indefinite that men of common intelligence must necessarily guess at its meaning and differ as to its application, it violates the first essential of due process of law." City of Atlanta v. Southern R. Co., 213 Ga. 736, 738 (101 SE2d 707) (1958).
Although a statute does not undertake to define each of the words contained therein, this will not automatically render the statute vague, indefinite or uncertain in meaning since, "The ordinary signification shall be applied to all words, except words of art, or words connected with a particular trade or subject matter. . ." Code Ann. § 102-102 (1).
Chapter 88-31 of the "Georgia Health Code" (Code Ann. § 88-101 et seq.) entitled "Ambulance Service," contains a section wherein words connected with the subject matter of the Act are defined. Code Ann. § 88-3101. The words "good faith," "emergency" and "emergency care," as used in Code Ann. § 88-3114, are not defined in Code Ann. § 88-3101 since these words are not words of art or words connected with a particular trade or subject matter but, rather, words that are in general use and are understood in their ordinary signification.
*753 Webster defines "good faith" as "a state of mind indicating honesty and lawfulness of purpose; belief that one's conduct is not unconscionable or that known circumstances do not require further investigation."
"Emergency" is defined by Webster as "an unforeseen combination of circumstances or the resulting state that calls for immediate action; a pressing need; exigency." See Seaboard A. L. R. v. McMichael, 143 Ga. 689, 695 (85 S.E. 891) (1915).
The definition of "care" as found in Webster is to "provide for or attend to needs or perform necessary personal services (as for a patient or a child)." In its ordinary signification "emergency care" could only mean the performance of necessary personal services during an unforeseen circumstance that calls for immediate action.
We find Code Ann. § 88-3114 to be definite and certain in its meaning. Men of common intelligence would not differ as to the application of its provisions. For these reasons, appellant's enumeration of error is without merit.
2. Appellant next contends that Code Ann. § 88-3114 violates the due process and equal protection clauses of the State and Federal Constitutions (Code Ann. §§ 2-102, 2-103, 1-815) in that the only purpose served by the statute is to deprive appellant of the right to recover damages for personal injuries proximately caused by appellee's negligence. Appellant argues that Code Ann. § 88-3114 serves no public purpose other than to benefit the appellee's private interests, and is, therefore, a violation of the due process and equal protection guarantees of the Constitution.
The equal protection clause of the Constitution allows classification by legislation so long as the basis for such classification bears a reasonable relation to the purpose and objects of the legislation and so long as the legislation operates alike on all persons similarly situated. C & S Nat. Bank v. Mann, 234 Ga. 884 (2) (218 SE2d 593) (1975); Simpson v. State, 218 Ga. 337 (127 SE2d 907) (1962); Ledger-Enquirer Co. v. Brown, 213 Ga. 538 (100 SE2d 166) (1957). "A classification having some reasonable basis does not offend against that clause *754 merely because it is not made with mathematical nicety, or because in practice it results in some inequality. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. One who assails such law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary." Gibbs v. Milk Control Board, 185 Ga. 844, 850 (196 S.E. 791) (1938); C & S Nat. Bank v. Mann, supra, at 888.
Code Ann. § 88-3114 was enacted as a part of a comprehensive Act to provide the citizens of this state with efficient, safe and professional ambulance service. Chapter 88-31 sets high standards for licensing the providers of ambulance service and provides for enforcement and regulation of those standards through administrative action. Code Ann. § 88-3101 et seq. Once licensed, the providers of ambulance service are granted immunity from civil liability under the provisions of Code Ann. § 88-3114, provided, however, emergency care is rendered in "good faith." The statute is carefully drawn so as to grant immunity to providers of ambulance service only for their acts and omissions "in rendering such emergency care." The legislature saw fit not to extend immunity to the negligence of an ambulance driver resulting from motor vehicle accidents.[1]
In providing the immunity found in Code Ann. § 88-3114 it appears that the General Assembly recognized that insurance for civil liability covered by the exemption would be extremely expensive and difficult to obtain. This problem, combined with the virtually unlimited potential civil liability, could be enough to drive many providers of ambulance service out of the business and greatly discourage others from entering. The effect, in many areas of the state, would be to make emergency ambulance service virtually unobtainable. In recognition of this, the legislature chose to grant immunity from civil *755 liability to providers of such emergency services who were licensed under the Act.
Code Ann. § 88-3114 does not unfairly discriminate against the appellant. The statute is uniform in that it treats all persons who receive emergency medical treatment from the providers of a licensed ambulance service in the same way. We find that Code Ann. § 88-3114, being reasonable and nondiscriminatory, does not violate the equal protection clauses of the State and Federal Constitutions.
Since Code Ann. § 88-3114 complies with the requirements as to equal protection of the laws, it amounts to due process of law. McLennan v. Aldredge, 223 Ga. 879 (5) (159 SE2d 682) (1967); C & S Nat. Bank v. Mann, supra.
3. We have examined the other errors enumerated by appellant and find no merit in any of them.
Judgment affirmed. All the Justices concur, except Nichols, C. J., who concurs in the judgment and Hall, J., who dissents.
HILL, Justice, concurring.
I concur in the opinion and judgment of the court. I believe, however, that it should be pointed out that most complaints against ambulance operators would not, by virtue of Code Ann. § 88-3114, be dismissed on motion. Here, the granting of the motion to dismiss is affirmed because the parties have stipulated that the defendant acted in good faith. In most instances the question of good faith would not be stipulated and it would have to be decided at trial. What degrees and kinds of negligence constitute good or bad faith remain to be decided.
*756 HALL, Justice, dissenting.
The trial court dismissed the appellant's petition for failure to state a claim for relief. It is elementary that under the CPA a petition can not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Code Ann. § 81A-112 (b). The plaintiff in this case stipulated that the ambulance service acted in "good faith." Code Ann. § 88-3114 has a good faith requirement and further grants to the providers of ambulance services some immunity. The issue for this court is whether this immunity exempts ambulance services from liability for only ordinary negligence (failure to exercise due care) or whether this immunity extends the exemption from liability to acts of gross negligence or wanton misconduct.[1] The majority opinion equates "good faith" with a standard of care and gives to ambulance services a total, blanket immunity. I disagree. That the ambulance service acted in good faith does not mean that the service was non-negligent. A person may exercise good faith and still be negligent. "An act or omission may constitute negligence, even though the person charged acted according to his best judgment or in good faith." 65 CJS 472, Negligence, § 2 (8). This is the law of Georgia. Western & A. R. Co. v. Vaughan, 113 Ga. 354 (3) (38 S.E. 851) (1901). The good faith requirement in the statute is a requirement that the ambulance service must meet before it may take advantage of the statutory immunity; however, the good faith requirement does not reveal to what extent and to which standard of care the statutory immunity applies. I interpret Code Ann. § 88-3114 as an immunization only from the failure to exercise ordinary care. Exculpatory statutes, like exculpatory agreements, should be strictly construed. See Ins. Co. of N. A. v. Gulf Oil Corp., 106 Ga. App. 382 (127 SE2d 43) (1962).
*757 In my opinion, the petition here states a claim for relief because the ambulance service may have been grossly negligent. The trial court erred in sustaining a motion to dismiss. I agree with the majority opinion that the statute has no constitutional infirmity.
NOTES
[1] Code Ann. § 88-3104.1 requires motor vehicle insurance as a condition of licensing.
[1] Ordinary negligence Code § 105-201; gross negligence Code § 105-203; wanton negligence Carr v. John J. Woodside Storage Co., 217 Ga. 438 (123 SE2d 261) (1961). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369952/ | 251 S.E.2d 698 (1979)
39 N.C. App. 519
John Alexander GOODEN, Cornelius Butler, Jr., doing business as C. Butler, Jr., Lumber Company, William G. McDaniel, doing business as Shannon Wood Products, Lynwood N. Bullock, doing business as Lyn's Coach Works, M. M. Gilliland, doing business as Gilliland Logging Company, and Ward Lumber Company, a corporation, Individually and upon behalf of all others similarly situated,
v.
John C. BROOKS, Commissioner of Labor of the State of North Carolina.
No. 7810SC368.
Court of Appeals of North Carolina.
February 6, 1979.
*700 Hugh J. Beard, Jr., Charlotte, for plaintiffs-appellants.
*701 Atty. Gen. Rufus L. Edmisten by Associate Atty. Gen. George W. Lennon, Raleigh, for the State.
ARNOLD, Judge.
Defendant first argues that plaintiffs lack standing to bring this action, since the relief they seek is merely prospective. A party has no standing to enjoin the enforcement of a statute unless he can show that his rights have been impinged or are immediately threatened by the statute. 7 Strong's N.C. Index 3d, Injunctions § 5.1. It is apparent here that with the exception of Ward Lumber Company no plaintiff's rights have been impinged upon by the statute, and we find that the other plaintiffs' rights are not "immediately threatened." The only indication that there may be plans to enforce the statute against them is the existence of the State Emphasis Program. Except with regard to plaintiff Ward Lumber Company the action was appropriately dismissed.
We consider the merits of this appeal as it concerns Ward Lumber Company, which has already been cited and fined for refusing to allow inspections without a warrant and with an administrative inspection warrant. Plaintiff contends that its complaint did state a claim for relief, on the ground that two North Carolina statutes are unconstitutional. The first of these, G.S. 95-136(a) is the "Inspections" section of the Occupational Safety and Health Act of North Carolina, N.C.G.S. Ch. 95, Art. 16. It allows inspections of work areas without search warrants, as follows:
(a) In order to carry out the purposes of this Article, the Commissioner or Director, or their duly authorized agents, upon presenting appropriate credentials to the owner, operator, or agent in charge, are authorized:
(1) To enter without delay, and at any reasonable time, any factory, plant, establishment, construction site, or other area, work place or environment where work is being performed by an employee of an employer; and
(2) To inspect and investigate during regular working hours, and at other reasonable times, and within reasonable limits, and in a reasonable manner, any such place of employment and all pertinent conditions, processes, structures, machines, apparatus, devices, equipment, and materials therein, and to question privately any such employer, owner, operator, agent or employee.
This provision is essentially identical to Sec. 8(a) of the federal Occupational Safety and Health Act of 1970, 29 U.S.C. § 657(a), which the United States Supreme Court found unconstitutional in Marshall v. Barlow's, Inc., 436 U.S. 307, 98 S. Ct. 1816, 56 L. Ed. 2d 305 (1978). Barlow had denied entrance to the inspector who had no search warrant, and the court said: "We hold that Barlow was entitled to a declaratory judgment that the Act is unconstitutional insofar as it purports to authorize inspections without warrant or its equivalent and to an injunction enjoining the Act's enforcement to that extent." Id. 436 U.S. at 325, 98 S.Ct. at 1827, at 319. The State shows us no convincing reason, and we find none, why we should reach a different result in this case. Our "warrantless inspection" statute is essentially identical to the federal one which has been declared unconstitutional as violative of the Fourth Amendment. We find that G.S. 95-136(a) violates the Fourth and Fourteenth Amendments to the United States Constitution to the extent it authorizes warrantless searches, and that plaintiff is entitled to have the enforcement of the statute enjoined to that extent.
Plaintiff also asserts that G.S. 15-27.2(c)(1) is a violation of the United States and North Carolina Constitutions. The statute, providing for the issuance of administrative inspection warrants by a magistrate or clerk of court, reads as follows:
(c) The issuing officer shall issue the warrant when he is satisfied the following conditions are met:
(1) The one seeking the warrant must establish under oath or affirmation that the property to be searched or inspected is to be searched or inspected as part of a legally authorized program of inspection which naturally includes that property, or *702 that there is probable cause for believing that there is a condition, object, activity or circumstance which legally justifies such a search or inspection of that property.
As plaintiff points out, this statute creates two alternative criteria for determining whether to issue a warrant. The first, the "program of inspection test," is that the property is to be inspected "as part of a legally authorized program of inspection which naturally includes that property." The second is a probable cause test. If an inspection meets either of these tests a warrant is properly issued under the statute. Plaintiff argues that the program of inspection test does not satisfy the Barlow's requirement of probable cause.
The court in Barlow's established that the meaning of probable cause is not the same in an inspection warrant procedure as it is in the case of a search warrant in a criminal proceeding.
Probable cause in the criminal law sense is not required. For purposes of an administrative search such as this, probable cause justifying the issuance of a warrant may be based not only on specific evidence of an existing violation but also on a showing that `reasonable legislative or administrative standards for conducting an . . . inspection are satisfied with respect to a particular [establishment].. . . A warrant showing that a specific business has been chosen for an OSHA search on the basis of a general administrative plan for the enforcement of the Act derived from neutral sources . . . would protect an employer's Fourth Amendment rights. 436 U.S. at 320, 98 S.Ct. at 1824, 56 L.Ed.2d at 316.
We find the requirement of G.S. 15-27.2(c)(1) that the property is to be inspected "as part of a legally authorized program of inspection which naturally includes that property" comports with the Barlow's criterion that "a specific business has been chosen for an OSHA search on the basis of a general administrative plan for the enforcement of the Act derived from neutral sources." In light of the Supreme Court's decisions in Camara v. Municipal Court, 387 U.S. 523, 87 S. Ct. 1727, 18 L. Ed. 2d 930 (1967), and Marshall v. Barlow's, Inc., supra, we interpret the statute as also requiring a showing to the magistrate that the general administrative plan for enforcement is based upon "reasonable legislative or administrative standards." Interpreted in this way, G.S. 15-27.2(c)(1) requires a sufficient showing of probable cause, and is constitutional.
We hold, in the interest of justice, that by arguing the constitutionality of G.S. 15-27.2(c)(1) the appellant has also presented for our review the sufficiency of the affidavit on which the administrative warrant was obtained. We find that the affidavit does not make a sufficient showing of the administrative probable cause which the statute requires.
Gregory S. Coulson, Director of the Enforcement Division of the North Carolina Department of Labor, in charge of OSHA inspections throughout the state, testified that "[t]he warrant secured against Ward Lumber Company is based on [our] model affidavit . . . [which] does not describe any reason why that specific property would have violations of the acts within its premises." He described the model affidavit as stating that
`Blank' being the name and title to the officer, being duly sworn and examined under oath, says under oath that there is a program of inspection authorized by G.S. 95-129(3), G.S. 95-133(b)(2), and G.S. 95-136(a), which naturally includes the property owned or possessed by `Blank', this is the owner or possessor, and described as follows: `Blank' which precisely describes the name, location and address of the property to be inspected with this warrant.
No facts from which the issuing officer could determine whether probable cause existed were included; accordingly, this affidavit is insufficient to support the issuance of an administrative search warrant. Apparently similar affidavits were implicitly *703 disapproved by the court in Barlow's at note 20, and specifically disapproved by the Seventh Circuit in a recent decision relying on Barlow's. Weyerhaeuser Co. v. Marshall, 452 F. Supp. 1375 (E.D.Wis.1978).
The inclusion of the underlying facts in the affidavit is necessary to make the warrant procedure meaningful. In explaining the protections afforded by a warrant, the Supreme Court in Barlow's said: "The authority to make warrantless searches devolves almost unbridled discretion upon executive and administrative officers . . . as to when to search and whom to search. A warrant, by contrast, [provides] assurances from a neutral officer that the inspection is reasonable under the Constitution, is authorized by statute, and is pursuant to an administrative plan containing specific neutral criteria." 436 U.S. at 323, 98 S.Ct. at 1825, 56 L.Ed.2d at 317-18. These protections do not exist unless it is the issuing officer who makes the determination of whether the inspection is part of a "legally authorized program" based on a "general administrative plan derived from neutral sources" that meets "reasonable standards."
This conclusion is in accord with the position of our Supreme Court in State v. Campbell, 282 N.C. 125, 191 S.E.2d 752 (1972). Although Campbell was a criminal case, we hold that the requirements for warrant procedures set out there apply equally to the issuance of administrative inspection warrants, since the purpose of a warrant in either case is to provide for a determination of probable cause by a neutral officer.
Probable cause cannot be shown "by affidavits which are purely conclusory, stating only the affiant's . . . belief that probable cause exists without detailing any of the `underlying circumstances' upon which that believe is based.. . . Recital of some of the underlying circumstances in the affidavit is essential if the magistrate is to perform his detached function and not serve merely as a rubber stamp . . . ." U. S. v. Ventresca, 380 U.S. 102, 13 L. Ed. 2d 684, 85 S. Ct. 741 (1965). The issuing officer "must judge for himself the persuasiveness of the facts relied on by [an affiant] to show probable cause. He should not accept without question the complainant's mere conclusion. . . ." Giordenello v. U. S., 357 U.S. 480, 2 L. Ed. 2d 1503, 78 S. Ct. 1245 (1958).
Id. at 130-31, 191 S.E.2d at 756. See also State v. Hayes, 291 N.C. 293, 230 S.E.2d 146 (1976).
We note that any administrative burden resulting from our decision today will be minimal, since it appears from the record before us that the Department of Labor has already established neutral guidelines and criteria for determining the target industries of enforcement programs and that it does check potential target industries against these criteria. The affidavit of Lawrence A. Weaver, III, Acting Director of the OSHA Division of the North Carolina Department of Labor, apparently tendered to the court in response to an order to show cause, states in pertinent part:
5. That in order to effect a significant decrease in the number of job related injuries and illnesses, the North Carolina Department of Labor initiated in 1976 the State Emphasis Program (SEP) concept.
* * * * * *
7. That in the industry candidate selection process used by the North Carolina Department of Labor, six selection criteria were established.
8. That the first criterion is SEVERITY AND TRACTABILITY OF THE PROBLEM such that State Emphasis candidate industries should represent serious problems both in terms of the number of workers affected and the perceived incidence rates of the safety and health hazards, and that the problem is susceptible to improvement through the State Emphasis Program elements of education, consulting, reporting, and inspection.
9. That the lumber and wood products industry and the furniture industry had accident and illness rates of 12.8 and 11.1 respectively with a total employment of approximately 93,000 people in 1975.
*704 10. That the overall accident and illness rate for the private employment sector in North Carolina was 7.1 and the approximate total employment was 1,680,400 people in 1975.
11. That, due to the high accident and illness rates of lumber and wood products industry and the furniture industry involving approximately 5.6 percent of the total private sector employment of North Carolina, criterion one is met.
12. That the second criterion is an EXISTENCE OF STABLE ENFORCIBLE STANDARDS which are clear, complete and susceptible to inspection.
13. That criterion two is met as there are at least four specific areas of the Occupational Safety and Health Standards, such as 29 CFR 1910.213, 29 CFR 1910.24, 29 CFR 1910.265, and 29 CFR 1910.266, which relate to the lumber and wood products industry and the furniture industry.
14. That the third criterion is GEOGRAPHICAL DISTRIBUTION.
15. That criterion three is met as the lumber and wood products industry and furniture industry are geographically distributed throughout the State of North Carolina.
16. That the fourth criterion in [sic] POTENTIAL EMPLOYER, EMPLOYEE AND PUBLIC SUPPORT which is important, but not a controlling consideration.
17. That the fourth criterion is met as at least ten educational seminars have been held throughout the state with attendance by over 500 employers and employees of the logging industry and that the North Carolina Department of Labor has historically maintained good relations with and received support from the furniture industry.
18. That the fifth criterion is the existence of OSHA TECHNICAL QUALIFICATIONS through special State Emphasis Program training and a selection area in which OSHA already has qualified staff and equipment.
19. That the fifth criterion is met as the members of all sections of the North Carolina Department of Labor, OSHA Division, have received special training in the selected industries both prior to and after the beginning of the State Emphasis Program and that appropriate necessary staff support and equipment is already in existence.
20. That the sixth criterion is USEFULNESS AS A PROTOTYPE of the selected industry.
21. That by meeting the first five criteria it is expected that the first selected emphasis industry will serve as a useful prototype for future State Emphasis Programs.
22. That the average number of alleged OSHA violations expected to be observed during an inspection of a plant within the selected industry is eight.
23. That the accident and illness incidence rates for the lumber and wood products industry and furniture industry are 12.8 and 11.1 respectively.
24. That these are among the highest in the State of North Carolina.
It merely remains for an agency seeking an administrative search warrant to provide such factual information in the supporting affidavit, so that the magistrate, or clerk, may make an independent determination that the requisite probable cause exists for the general administrative plan for enforcement.
We find that it is further necessary for the agency to make a showing to the magistrate, or clerk, that the general administrative plan for enforcement is being applied on a neutral basis as to the particular establishment to be inspected. Camara v. Municipal Court, supra; Weyerhaeuser Co. v. Marshall, supra. This assures that the plan will not be discriminatorily applied against a particular establishment for harassment or deception.
In the case sub judice, there was no showing from which a magistrate could have independently determined (1) that there existed a legally authorized program *705 of inspection which naturally included the property, (2) that the general administrative plan for enforcement was based upon reasonable legislative or administrative standards, and (3) that the administrative standards were being applied to plaintiff on a neutral basis. Thus the warrant was improperly granted.
Having determined that the warrant procedure of G.S. 15-27.2(c)(1) was not complied with, we reverse, and as a result we find it unnecessary to reach plaintiff's contention that the statute violates Art. I, Sec. 20 of the North Carolina Constitution. But see Brooks v. Taylor Tobacco Enterprises, Inc., 39 N.C.App. 529, 251 S.E.2d 656 (1978).
Plaintiff Ward Lumber Company was entitled to declaratory judgment that G.S. 95-136(a) is unconstitutional to the extent that it authorizes warrantless searches. Defendant was not entitled to summary judgment. In accordance with this opinion judgment of the trial court is
Reversed.
HEDRICK and VAUGHN, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369965/ | 310 S.W.3d 153 (2010)
Johnnie Lee CARTER, Appellant,
v.
PARK RIDGE APARTMENTS, Appellee.
No. 08-08-00154-CV.
Court of Appeals of Texas, El Paso.
March 31, 2010.
*154 Johnnie Lee Carter, El Paso, TX, pro se.
Harrel L. Davis III, Gordon, Mott & Davis, P.C., El Paso, TX, for Appellee.
Before McCLURE, J., RIVERA, J., and GUADERRAMA, Judge.
OPINION
GUADALUPE RIVERA, Justice.
Johnnie Lee Carter appeals the trial court's nunc pro tunc order on his motion for nonsuit, and order granting summary judgment in favor of Park Ridge Apartments. Finding Carter failed to comply with the briefing requirements in Rule 38.1 of the Texas Rules of Appellate Procedure, we determine that nothing is presented for review and therefore, affirm the trial court's judgment.
BACKGROUND
Carter sued Park Ridge Apartments for conversion and violations of the Texas Property Code, Texas Utilities Code, and the Texas Fair Housing Act. In response, Park Ridge counterclaimed for breach of lease agreement, seeking damages.
On March 5, 2008, Park Ridge moved for summary judgment on its counterclaim, and the trial court set a hearing on the motion for April 3, 2008. Prior to the scheduled hearing, Carter filed a notice of nonsuit, notifying the court and "all parties to this suit that he [was] taking a nonsuit without prejudice of his entire case against all defendants...." The trial court, on April 2, 2008, granted Carter's nonsuit and dismissed the case without prejudice. Later, on April 7, 2008, the court entered a nunc pro tunc order, clarifying that only Carter's claims against Park Ridge were nonsuited, not that Park Ridge's counterclaim against Carter was dismissed.
On April 3, 2008, the trial court entertained a hearing on Park Ridge's summary judgment motion. The record does not reflect that Carter filed a response to Park Ridge's motion for summary judgment, nor does it show whether he appeared at the hearing. The trial court granted summary judgment in favor of Park Ridge, and it is from that order, and the court's nunc pro tunc order on Carter's motion for nonsuit, that Carter now appeals.
ANALYSIS
On appeal, Carter brings fourteen points of error, challenging: (1) whether service of citation was proper on Park Ridge; (2) *155 whether the attorney representing Integrity Asset Management, the property management company and nonparty to the suit, could also represent Park Ridge; (3) whether Integrity Asset Management profited from its "deception;" (4) whether a nonparty may respond to discovery directed at another; (5) whether Park Ridge properly served him with its motion for summary judgment; (6) whether the trial court properly considered Park Ridge's motion for order nunc pro tunc on his motion for nonsuit; (7) whether Park Ridge's attorney acted unethically; (8) whether Park Ridge violated Rule 13 by filing pleadings without good faith; (9) whether Park Ridge violated Rule 21 when its motion for summary judgment did not appear on the docket; (10) whether Park Ridge timely served him with its motion for summary judgment; (11) whether Integrity Asset Management had standing absent filing a third-party petition; (12) whether he was given adequate time to prepare after Park Ridge filed its motion for summary judgment; (13) whether Integrity Asset Management could file a cross complaint; and (14) whether the trial court erred by serving notice of its nonsuit on counsel for Integrity Asset Management, who did not represent Park Ridge. However, Carter's brief provides no argument or discussion for any of his issues save one quote from the Supreme Court's per curiam opinion in University of Texas Medical Branch at Galveston v. The Estate of Darla Blackmon, 195 S.W.3d 98, 100 (Tex.2006), which simply notes the general rules applicable to a nonsuit. Carter has not provided any legal analysis or argument in support of the specific contentions he raises.
Although we must construe Carter's brief liberally, as he is appearing pro se, Carter still must comply with all applicable briefing rules. See Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989); Valadez v. Avitia, 238 S.W.3d 843, 845 (Tex.App.-El Paso 2007, no pet.); Sweed v. City of El Paso, 195 S.W.3d 784, 786 (Tex. App.-El Paso 2006, no pet.); Martinez v. El Paso County, 218 S.W.3d 841, 844 (Tex. App.-El Paso 2007, pet. struck); Strange v. Continental Cas. Co., 126 S.W.3d 676, 678 (Tex.App.-Dallas 2004, pet. denied); Plummer v. Reeves, 93 S.W.3d 930, 931 (Tex. App.-Amarillo 2003, pet. denied); Clemens v. Allen, 47 S.W.3d 26, 28 (Tex.App.-Amarillo 2000, no pet.); Weaver v. E-Z Mart Stores, Inc., 942 S.W.2d 167, 169 (Tex. App.-Texarkana 1997, no pet.); Harris v. Showcase Chevrolet, 231 S.W.3d 559, 561 (Tex.App.-Dallas 2007, no pet.). Thus, his brief must contain "a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record." TEX.R.APP. P. 38.1(f), (i). We will not make Carter's arguments for him. See Robertson v. Southwestern Bell Yellow Pages, Inc., 190 S.W.3d 899, 903 (Tex. App.-Dallas 2006, no pet.); Beard v. Beard, 49 S.W.3d 40, 67 (Tex.App.-Waco 2001, pet. denied). When, as here, the brief contains no arguments or citations to legal authority analogous to those contentions uttered at bar, nothing is presented for review. Republic Underwriters Ins. Co. v. Mex-Tex, Inc., 150 S.W.3d 423, 427 (Tex.2004); Valadez, 238 S.W.3d at 843; Martinez, 218 S.W.3d at 844; Plummer, 93 S.W.3d at 931; Nguyen v. Kosnoski, 93 S.W.3d 186, 188 (Tex.App.-Houston [14th Dist.] 2002, no pet.). Accordingly, we overrule Carter's issues as inadequately briefed.
CONCLUSION
Having overruled Carter's issues, we affirm the trial court's judgment.
GUADERRAMA, Judge, sitting by assignment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1370116/ | 134 Ariz. 159 (1982)
654 P.2d 307
COUNTY OF MARICOPA, Petitioner Employer, Home Indemnity Company, Petitioner Carrier,
v.
The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Rosa Flores, Respondent Employee.
No. 1 CA-IC 2712.
Court of Appeals of Arizona, Division 1, Department C.
November 9, 1982.
*160 O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, P.A., by W.C. Wahl, Jr., Larry L. Smith, Phoenix, for petitioners.
James A. Overholt, Acting Chief Counsel, The Indus. Com'n of Ariz., Phoenix, for respondent.
Gorey & Delaney by Edgar M. Delaney, Phoenix, for respondent employee.
*161 CONTRERAS, Judge.
This is a special action review of an Industrial Commission award granting respondent employee's petition to reopen her claim. The dispositive issue is whether the medical evidence relied upon to support the award established a previously undiscovered condition or was mere additional evidence concerning an issue previously considered when the claim was closed. We conclude that it was mere additional evidence and therefore set aside the award.
Respondent employee (claimant) worked for petitioner employer as a psychiatric case worker. On December 1, 1978, one of the patients attacked her, grabbing her around the neck and cutting her hand with a knife. Her claim for worker's compensation was accepted.
The treating physician, Gary Gaffield, D.O., conservatively treated a cervical strain and superficial hand lacerations. He anticipated a speedy recovery, but claimant failed to respond and never returned to work. She continued to complain of neck and shoulder pain, and also complained of numbness in the arms, numbness about her mouth and lips, headaches, anxiety, and insomnia. She also received out-patient biofeedback training, but her complaints persisted.
In March 1980, petitioner carrier arranged a group medical consultation. The consultants concluded that claimant's industrial injury was orthopedically stationary without permanent impairment, but recommended a psychiatric evaluation. On May 28, 1980, Howard S. Gray, M.D., saw claimant at petitioner carrier's request for the purpose of performing a psychiatric evaluation. Dr. Gray, in a written report filed with the Commission, concluded that claimant had no psychiatric impairment related to the industrial injury, but rather had "... no intention of returning to work, will maintain her subjective complaints to further this end and is, thereby, malingering."
Relying on these medical reports, petitioner carrier issued a notice of claim status terminating temporary compensation without permanent impairment. Claimant, who was unrepresented, failed to protest this notice. Accordingly, it became final. See, e.g., Nelson v. Industrial Commission, 115 Ariz. 293, 564 P.2d 1260 (App. 1977).
Despite this closing, claimant continued physical therapy with Dr. Gaffield. Her husband's health insurance provided medical benefits, but when he subsequently lost his job, these benefits were threatened. Claimant urged Dr. Gaffield to do something while coverage remained. Since his treatment had not helped her, he referred her to Raymond Huger, M.D., a psychiatrist at the St. Joseph's Hospital Pain Clinic.
Dr. Huger diagnosed claimant's condition as a chronic pain syndrome with underlying depression and agitation. In his opinion, the industrial injury caused this condition. Claimant was admitted to the pain program and remained in the hospital for one month. She improved and was discharged for out-patient treatment, but this was discontinued when her husband's health insurance coverage terminated.
Relying on Dr. Huger's opinion, claimant, who was then represented by counsel, filed a petition to reopen her claim. The petition was denied, and after a timely protest, hearings were conducted.
The administrative law judge issued an award granting the reopening. His dispositive findings, which we summarize, were as follows:
(1) The claimant's condition when she sought to reopen was essentially the same as her condition when her claim was closed.
(2) No industrially related orthopedic condition caused the claimant's complaints.
(3) Dr. Gray was of the opinion that the claimant was a conscious malingerer. Drs. Huger and Gaffield disagreed with this conclusion. The conflict was resolved in favor of Drs. Huger and Gaffield.
(4) The claimant was first diagnosed to be suffering from depression related to the industrial injury after the case was closed. She therefore was entitled to reopen *162 her claim for a "new or previously undiscovered disability or condition...."
This award was affirmed upon administrative review, and special action review to this court followed.
On appeal, petitioners first argue that Dr. Huger's opinion that claimant's industrial injury caused her to be depressed lacked foundation. The argument's first premise is that claimant's depression is not a conversion reaction, but rather a derivative symptom, a product of her chronic pain. Its second premise is that no objective link was established between the industrial injury and the chronic pain. From this petitioners conclude that the causal relationship between the industrial injury and the depression was not established.
It is well established that in order to reopen a closed claim, claimant must establish a causal relationship between the industrial injury and the new, additional, or previously undiscovered condition for which reopening is sought. See, e.g., Pascucci v. Industrial Commission, 126 Ariz. 442, 616 P.2d 902 (App. 1980). Given the truth of the premises, however, the conclusion that no causal relationship was established does not follow.
Dr. Huger testified that claimant had a marginal ability to cope with stress, but that she had managed to do so prior to the industrial injury. In his opinion, the physical assault at work was a traumatic incident that stressed claimant beyond her capacity. In response, she developed the symptoms of chronic pain, which produced the depression.
It is similarly well established that the employer takes the employee as he or she is, and if an industrial injury operates on an existing weakness to produce a further injurious result, the industrial injury causes that result. See, e.g., Estes Corporation v. Industrial Commission, 23 Ariz. App. 370, 533 P.2d 678 (1975). Consequently, although the depression was a derivative symptom and no objective link between the industrial injury and the chronic pain was established, Dr. Huger's opinion was sufficient to establish a causal relationship between the industrial injury and claimant's depression.
Although this argument does not support petitioners' conclusion, it is critical to the disposition of this appeal. Because claimant's depression was derivative, Dr. Huger's diagnosis necessarily concerned the causal connection between the industrial injury and all of claimant's symptoms. It is clear that Dr. Huger's opinion directly conflicted with Dr. Gray's previously expressed opinion that claimant was consciously malingering.
Petitioners next argue that the causal relationship between the industrial injury along with claimant's symptoms and condition was considered when the claim was closed and that Dr. Huger's opinion was mere additional evidence concerning this issue. Following this premise, petitioners contend that res judicata principles precluded reopening based on Dr. Huger's opinion. We agree.
Although a closed claim may be reopened for a new, additional or previously undiscovered condition, see, e.g., Miller v. Industrial Commission, 114 Ariz. 449, 561 P.2d 773 (App. 1977); A.R.S. § 23-1061(H), unless these conditions are satisfied, the prior determination closing the claim is final. See Phoenix Cotton Pickery v. Industrial Commission, 120 Ariz. 137, 584 P.2d 601 (App. 1978). An unprotected notice of claim status is accorded the same finality as an award. Id. Accordingly, mere additional evidence concerning an issue considered at a previous proceeding does not permit a reopening. See Black v. Industrial Commission, 89 Ariz. 273, 361 P.2d 402 (1961); Aetna Ins. Co. v. Industrial Commission, 115 Ariz. 110, 563 P.2d 909 (App. 1977). Otherwise, the statutory exception to res judicata swallows the rule.
Claimant's response to this argument is that Dr. Huger's opinion justified the reopening since he was the first to find a causal connection between the injury and claimant's symptoms. That is, since the case was closed without any permanent physical or psychiatric impairment, any psychiatric *163 condition diagnosed after the closing had to be new or previously undiscovered. The flaw in this argument is that the prior closing is final not because of its correctness, but despite its incorrectness. Claimant's argument in the case before us would completely abrogate res judicata in reopening proceedings. We therefore reject it.
The administrative law judge relied upon Crocker v. Industrial Commission, 124 Ariz. 566, 606 P.2d 417 (1980), to support the reopening. In Crocker, the claimant had symptoms of pain that his physicians could not explain. His case was closed without a permanent impairment. Thereafter, for the first time, a physician diagnosed an organic basis for the pain. The supreme court held that the claimant was entitled to reopen his claim for a previously undiscovered condition. In stark contrast, when the present case was closed, Dr. Gray provided an affirmative explanation for claimant's symptoms. In his opinion, claimant was consciously malingering. As noted above, Dr. Huger's opinion, derived after closing, merely conflicts with Dr. Gray's opinion. The only thing that has been "discovered" here is a new opinion. The characterization of Dr. Huger's opinion as one that has not been previously discovered is insufficient to overcome the res judicata finality of the original closing.
Petitioners also contend that no comparative evidence necessary to reopen for a new or additional condition was presented. Comparative evidence establishing a change between the condition when the claim was closed and the condition when reopening is sought is necessary to reopen for a new or additional condition. See Crocker, id. In the present case, the administrative law judge found that claimant's condition was basically unchanged i.e., "... the complaints of the applicant were only slightly different at the time of the Petition to Reopen from what they had been at the time that the applicant's condition became stationary previously." The petitioner's argument is correct.
For the foregoing reasons, we set aside the award.
JACOBSON and BROOKS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1370108/ | 251 S.E.2d 774 (1979)
James NISBET et al.
v.
Billy Jarrell WATSON et al.
Frank FLOYD et al.
v.
Billy J. WATSON et al.
No. 13803.
Supreme Court of Appeals of West Virginia.
January 23, 1979.
*776 E. Dennis White, Jr. and Bernard T. Nibert, II, Huntington, for appellants.
George L. Partain, Logan, for appellees.
*775 CAPLAN, Chief Justice:
The two captioned cases were consolidated for trial in the Circuit Court of Logan County and are so treated upon this appeal. Judgment was entered for all the plaintiffs and, upon the denial of the defendant's motion to set aside the verdict and grant a new trial, this appeal was prosecuted. We affirm the judgment of the trial court.
Plaintiffs James Nisbet and Kay Nisbet, his wife, are the owners of a residence on a lot purchased from the defendants, Billy Jarrell Watson and Nola Watson, his wife. The lot is situate in Sunset Addition to the Town of McConnell in Logan County which subdivision is owned by the defendants. Plaintiffs Frank Floyd and Jo Ann Floyd, his wife, likewise own a residence on a lot in said subdivision. The ultimate purpose of the actions in the trial court was to obtain a workable sewage system for their properties; also, the Floyds sought an injunction which will be discussed in greater detail.
Prior to the sale of these lots to the plaintiffs, the defendants, on July 7, 1969, executed and caused to be recorded in the office of the Clerk of the County Court of Logan County a certain instrument designated, "Declaration and Dedication of Protective Covenants of Sunset Addition to *777 McConnell, Logan District, Logan County." (Hereinafter referred to as "Declaration and Dedication") This instrument, which ran in favor of any and all purchasers of lots in Sunset Addition, contained the following language:
Whereas, it is the intention of the Watsons to provide a sewage system for the benefits of any and all purchasers and interest holders in the said property and whereas it is necessary that the Watsons will maintain and offer for the benefits of said property certain outlets and also, Whereas, it is the intention and desire of said Watsons to place against all of said realty certain protective covenants, in addition to those drafted June 12, 1969 . . .
Now therefore this deed, declaration and dedication is hereby made in consideration of the premises and in consideration of the sum of at least one dollar cash in hand paid to the Watsons by purchaser or purchasers of said lot or lots or interest as said realty is described on the map attached to the Deed of June 12, 1969. The Watsons, in consideration of the supra payment and the assumption of the cost and maintance [sic] of the sewage system to be installed on said property, do intend to place on said property an aerobic digestion sewage treatment plant of a sufficient size to provide sewage to the area described in the map attached . . .
It being the intention of the Watsons to sell and convey unto the property and interest holders in the said Sunset Addition. . . this certain sewage system so that each of the individual home owners and property interest holders will assume the obligation of the maintance [sic] and repair of such sewage system so long as said property holders have an interest in said Sunset Addition.
The purpose of this Declaration is to gradually pass the title to this certain sewage system to the home owners and property interest holders in said property, so that by the time the Watsons have sold all of the lots in said addition that they will no longer own any interest or have any obligation to maintain this certain sewage system . . .
On February 16, 1971 the defendants filed an application with the State Health Department seeking permission to construct a sewage treatment plant to service lots Nos. 1-7 in Sunset Addition. Upon inspection of the plans by the County and State Health Departments the defendants were advised of needed modifications in the proposed sewage system which would have to be made before the defendants could proceed with such construction. The defendants took no action in relation to the required modification.
The County Health Department, in 1974, learned of work being done in the subdivision and inquired about the sewage treatment plant. A second application for approval of the proposed sewage system was then prepared. This plan proposed service for lots Nos. 1-16. Upon inspection of this application, several deficiencies were noted and changes were required before the plan could be approved. Again, no action was taken by the defendants and in March, 1975 notice was served on the defendants that they were in violation of health department rules and regulations as they related to plaintiffs Floyd and Ellis, other residents of the subdivision. The Nisbets and the Fortners were likewise notified that their sewage systems did not meet the requirements of the aforesaid rules and regulations.
By reason of the inadequacies of the sewage system serving the subdivision, some of the residents thereof met for the purpose of forming an association. The express purpose of such association was to obtain an approved sewage system to serve all property owners in Sunset Addition. The formation of the association was never consummated but during the meetings it was learned that the defendants had designed a sewage disposal plant that would serve only four houses in the subdivision.
Thereafter, on August 1, 1975, the plaintiffs, seeking a declaration and adjudication of their rights and duties and those of the defendants under the "Declaration and Dedication", filed an action for a declaratory *778 judgment. The plaintiffs further requested that the defendants be required, at defendants' expense, to install an aerobic digestion sewage treatment plant of a sufficient size to provide adequate sewage treatment for each of the plaintiffs, pursuant to the various provisions of the "Declaration and Dedication".
Alleging that certain residents of the subdivision were not made parties to the action and that others had not authorized the use of their names therein the defendants moved to dismiss for failure to join indispensable parties. The court overruled that motion but required that notice be given to all property owners in the subdivision of the time and place of the hearing so that they could appear and protect their interests if they desired. In their answer the defendants admitted that the property owners were entitled to a sewage system when the "Dedication and Declaration" was recorded but that they were relieved of this obligation when they were denied by the state a permit to construct the system and the law was changed so that the proposed system could not be built in 1975. The defendants also claimed that the plaintiffs were estopped by reason of the alleged formation of the aforementioned association.
Prior to a decision in the declaratory judgment action, plaintiffs Floyd filed an action against the defendants alleging that they had failed to install a centralized aerobic digestion sewage treatment plant as covenanted in the "Dedication and Declaration". They sought a mandatory injunction to require the defendants to install such system and a temporary injunction, enjoining the defendants from preventing a plumber from going onto the Watson property which was necessary for the purpose of repairing a clogged sewer line belonging to the Floyds.
By order entered December 22, 1975, the temporary injunction was granted and the order further provided that "this injunction shall remain in effect until January 13, 1976, at 11:00 o'clock a. m. when this matter will be further considered along with all other issues and relief sought in the plaintiffs' complaint". On January 10, 1976, three days before the scheduled hearing, the defendants conveyed to their two children for One Dollar cash "and other good and valuable consideration", certain properties including those involved in the declaratory judgment and injunction proceedings.
The court, upon consideration of the pleadings, testimony and exhibits, entered an order and an opinion, as a part thereof, which set out findings of fact and conclusions of law. The court concluded that the "Declaration and Dedication" obligates the defendants to install an aerobic digestion sewage treatment plant to service each lot in Sunset Addition owned by the plaintiffs; to install a water carried sewage treatment system to service the lots of the plaintiffs, the Floyds and the Ellises, and all those lots subdivided from the Persimmon Hollow Tract subsequent to July 1, 1970. Further, the court held "unsustainable" the defendants' defenses of estoppel and frustration by the State in their efforts to obtain a sewage treatment plant to service said lots. Finally, the court found that the defendants' act of divesting themselves of the subject property was anticipatory resistance to the court's ultimate orders and constituted contempt of court. The defendants were ordered to restore to their possession the properties formerly conveyed to their son and daughter.
The defendants rely on the following assignments of error:
(1) The Circuit Court of Logan County erred by ordering the Petitioners to reacquire property from individuals not parties to the action;
(2) The Circuit Court erred by denying Defendants' motion to dismiss for failure to join indispensable parties;
(3) The Circuit Court erred by misconstruing the language of the Declaration and Dedication of Protective Covenants;
(4) The Circuit Court erred by misapplying the Law of Dedications;
(5) The Circuit Court erred by failing to find the Plaintiffs were estopped from claiming any protection of the *779 Declaration and Dedication of Protective Covenants.
In relation to the first assignment of error, the defendants, relying on W.Va. Code, 1931, 55-13-11, as amended, contend that their son and daughter were indispensable parties to any action pertaining to land held by them. That section of the Code provides, in part, that "When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding."
The order of the court requiring the defendants to reacquire the properties conveyed to their children was entered in relation to the injunction proceeding instituted by the Floyds (Civil Action No. 9339) not in the declaratory judgment action (Civil Action No. 9000), W.Va.Code, 1931, as amended, applying only to declaratory relief, is not applicable here and is of no assistance to the defendants. Furthermore, we agree with the trial court that the action of the defendants in conveying the subject properties to their children just three days prior to a final hearing on the injunction matter constituted anticipatory resistance of the court's ultimate order.
In their second assignment of error, contending that their motion to dismiss for failure to join indispensable parties, the defendants again rely on the above quoted language of W.Va.Code, 1931, 55-13-11, as amended. We hold that this assignment, too, is without merit. The defendants assert that all property owners in the subdivision must be made parties and that that was not done in this instance.
Although there is authority which may support the defendants' position, we subscribe to what we believe to be the more enlightened view which does not require that all persons who might have an interest in the subject matter be made parties, so long as the judgment entered would have no prejudicial effect upon the rights of such persons. In the instant case we can perceive no manner in which the rights of the property owners who were not made parties could be prejudicially affected. The civil action called for a declaration of the rights of property owners in the subdivisions, all of whom were included in the "Declaration and Dedication". The only effect of a judgment in favor of the plaintiffs would be to construct a sewage system for all properties.
Of further significance is the fact that the court ordered that all property owners be notified of the pending action. This notice afforded them an opportunity to be heard should they believe that their rights would be adversely affected. Also, such notice would meet the requirements of Maynard v. Shein, 83 W.Va. 508, 98 S.E. 618 (1919), wherein the Court said: "It is contrary to the policy of our law that the rights of parties should be materially affected or be entirely destroyed without giving them an opportunity to be heard." See Hardwick v. Liberty Mutual Ins. Co., 243 S.C. 162, 133 S.E.2d 71 (1963).
In Robertson v. Hatcher, 148 W.Va. 239, 135 S.E.2d 675 (1964), an appeal in a declaratory judgment proceeding, the Court said "The rights and interests of the persons about whose absence the defendants complain are fully protected." We believe that the rights and interests of all of the property owners in Sunset Addition have been fully protected and that no necessary or indispensable party was proceeded against without notice. Furthermore, the court's order granted relief only to the plaintiffs.
The trial court found that the "Declaration and Dedication" placed an obligation on the defendants to "install an aerobic digestion sewage treatment plant to service each of the lots in Sunset Addition owned by the plaintiffs herein." This, asserts the defendants, reflects a misconstruction of the "Declaration and Dedication" by the court. We disagree.
It is undisputed that such instrument was prepared by the defendants. It clearly provides that "it is the intention of the Watsons [defendants] to provide a sewage system for the benefits of any and all purchasers and interest holders in the said property *780. . . The purpose of this Declaration is to gradually pass the title to this certain sewage system to the home owners . . . so that by the time the Watsons have sold all of the lots in said addition that they will no longer own any interest or have any obligation to maintain this certain sewage system . . ."
It appears clear to us that the plain language of the "Declaration and Dedication" obligates the defendants to construct and maintain a sewage system for the benefit of all purchasers of property in Sunset Addition. This Court has consistently held that the language of a contract must be accorded its plain meaning and, where plain, the language must be given full effect. See Stone v. National Surety Corporation, 147 W.Va. 83, 125 S.E.2d 618 (1962); Christopher v. United States Life Insurance Company, 145 W.Va. 707, 116 S.E.2d 864 (1960); Davis v. Combined Insurance Company of America, 137 W.Va. 196, 70 S.E.2d 814 (1952); and, Mitchell v. Metropolitan Life Insurance Co., 124 W.Va. 20, 18 S.E.2d 803 (1942). It is also well settled that any ambiguity in a contract must be resolved against the party who prepared it. Stone v. National Surety Corporation, supra; Bergholm v. Peoria Life Ins. Co., 284 U.S. 489, 52 S. Ct. 230, 76 L. Ed. 416 (1932). Stipcich v. Insurance Co., 277 U.S. 311, 48 S. Ct. 512, 72 L. Ed. 895 (1928); Correct Piping Co. v. City of Elkins, 308 F. Supp. 431 (N.D.W.Va. 1970).
In a further assignment of error the appellants assert that the court misapplied the law of dedication. They argue that "To constitute a valid dedication there must not only be an intention on the part of the owner, but it is absolutely essential that there be an acceptance expressed or implied on the part of the public." Cited in their brief are a number of cases dealing with public highways. Those cases are not applicable here. However, as above noted, the language of the subject instrument clearly shows an intention on the part of the owner to furnish a sewage system to the purchasers of lots in the subdivision; and an acceptance thereof by such purchasers when they accepted the deeds with the "Dedication and Declaration" included as a part thereof.
In their final assignment of error the appellants contend that the appellees are estopped from claiming any protection from the "Declaration and Dedication". The trial court found and held that the defense of estoppel was unsustainable, there having been a failure to prove any act or conduct on the part of the plaintiffs upon which the defendants relied to their detriment. We affirm the court's holding. The alleged agreement of April 17, 1975 was never consummated, having been signed by only a few of the lot owners and not having been signed by Billy J. Watson, one of the defendants. Certainly, if he did not enter into the agreement, it does not comport with reason that he relied upon it to the defendants' detriment. Helmick v. Broll, 150 W.Va. 285, 144 S.E.2d 779 (1965).
For the reasons stated herein the judgment of the Circuit Court of Logan County is affirmed.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/826614/ | Order Michigan Supreme Court
Lansing, Michigan
September 14, 2011 Robert P. Young, Jr.,
Chief Justice
Michael F. Cavanagh
Marilyn Kelly
143691 & (3) Stephen J. Markman
Diane M. Hathaway
Mary Beth Kelly
Brian K. Zahra,
Justices
IN RE REINSTATEMENT PETITION OF SC: 143691
ROBERT L. WIGGINS, JR., ADB: 10-26-RP
Petitioner-Appellant.
_________________________________________/
On order of the Court, the motion for stay is DENIED. The application for leave
to appeal remains pending.
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 14, 2011 _________________________________________
p0913 Clerk | 01-03-2023 | 03-01-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/877703/ | 654 P.2d 523 (1982)
EVANS PRODUCTS COMPANY, a Delaware Corporation, Plaintiff and Respondent,
v.
MISSOULA COUNTY, a municipal corporation of the State of Montana; Fern Hart, as Clerk and Recorder and Treasurer, et al., Defendants and Appellants.
No. 81-417.
Supreme Court of Montana.
Submitted on Briefs September 13, 1982.
Decided December 3, 1982.
*524 Robert L. Deschamps, III, County Atty., Missoula, R. Bruce McGinnis, Dept. of Revenue, Helena, for defendants and appellants.
Mulroney, Delaney & Dalby, Missoula, for plaintiff and respondent.
DALY, Justice.
Missoula County and the State Department of Revenue appeal from a summary judgment issued by the District Court of the Fourth Judicial District, Missoula County, in which the plaintiff, Evans Products Company, was refunded real property taxes it had paid under protest.
Evans Products Company (Evans) operated a plywood and wood products mill in Missoula County during the tax years 1977, 1978, and 1979.
In 1978 and 1979, Evans received a tax assessment list, stating that the market value for Evans' buildings was $396,050, and the taxable value was $33,862. Evans paid both the 1978 and 1979 taxes on its buildings based on these figures.
Missoula County discovered that it had miscalculated the market value assigned to Evans' buildings for the years 1978 and 1979. On December 27, 1979, the Missoula County Assessor's Office sent Evans the following notice and explanation of the error:
"This is to inform you that in 1978 there was an incorrect assessment of the Evans Products Co. improvements on N.P. land here in Missoula. Prior to 1978 the improvement values shown on assessment notices were assessed values and were 40% of full or appraised value. Then 30% of the assessed value was used to arrive at a taxable value which equalled 12% of full value. In 1978, as a result of the state-wide reappraisal of real property this method was changed so that the figure shown on the assessment notice would be full market value and then 8.55% would be applied to arrive at a taxable value. Because your plant had not been reappraised at the time the 1978 assessments went out, the 1977 assessed value of the improvements was inadvertently carried forward as full market value. This figure was $396,050 when it should have been $990,125 as shown on the 1979 assessment. This resulted in an underassessment of $594,075 with a taxable value of $50,794.
"1978 method used in error:
$396,050 (assessed value) x 8.55% =
$33,862 taxable value
"Should have been:
$990,125 (full value) x 8.55% =
$84,656 taxable value
"A corrected 1978 assessment notice is enclosed with this letter and a supplemental tax bill will be sent to you for the balance in the amount of $11,507.89."
A new 1979 assessment notice was also sent Evans with the same corrections.
Missoula County admittedly made the error in assigning the proper market value to Evans' building. The error was made in 1978, when all the real property and improvements in the county were being reappraised, and at the same time the county was making a change-over to a new data processing system.
Prior to 1978, the Missoula County Assessor had only received assessed values (40 percent of market value) of property from the county appraisers and with these figures computed the taxable value. In 1978, all of these assessed values were keypunched into the new data processing system; values that were to be immediately replaced by the market value when a reappraisal was done. For those properties missed by the reappraisal, the assessed value had to be multiplied by 2.5 in order to carry forward the market value.
Evans' property was never reappraised. Evans' old assessed value was erroneously *525 carried forward as the full market value. Someone in the Assessor's Office, whoever keypunched in the information, had failed to multiply the assessed value by 2.5 in order to carry forward the true market value, resulting in a significant tax decrease for Evans.
When Evans received the notices to pay increased taxes for the years 1978 and 1979, it paid them under protest. In 1980, Evans filed a complaint seeking refund of the taxes paid under protest. Both parties moved for summary judgment, which was granted to Evans.
On appeal, Missoula County and the Department of Revenue (DOR) admit that the taxes should be refunded at this time because the county initially failed to follow the procedures set down in section 15-8-601, MCA. Section 15-8-601 provides that whenever the DOR discovers that any taxable property has been "erroneously assessed" it may reassess the property. DOR is given ten years to reassess the property. Subsections (2) and (3) of section 15-8-601, MCA, then provide that when the DOR proposes to increase the prior valuation, it must give notice of the proposed change, with the opportunity for a conference and appeal to the state tax appeal board.
Here, Evans was not given the proper notice nor the opportunity for a conference and an appeal to the state tax appeal board.
Because DOR admits that the taxes should have been refunded we must affirm that part of the District Court's summary judgment. However, we reverse that part of the judgment which would preclude DOR from proceeding anew under section 15-8-601, MCA.
Evans claims that the DOR is precluded from now proceeding under section 15-8-601, MCA, because initially the proper procedures were not followed. We resolved this issue in dicta of the recent case Balock v. Town of Melstone (1980), Mont., 607 P.2d 545, 37 St.Rep. 288. While Balock directly involved taxation as a result of annexation, we noted that a finding of improper procedure does not prohibit the collection of disputed taxes under section 15-8-601, MCA:
"As a practical matter, finding the improper procedure was followed by the respondents does not prohibit the collection of the disputed taxes. Section 15-8-601, MCA, allows the Department of Revenue to reassess property erroneously assessed within the preceding ten years. The section sets up procedural guidelines for correcting past improper assessments. The respondents here can follow the statutory procedures and collect the taxes on appellants' property for the years in question." 607 P.2d at 549.
DOR may therefore proceed properly under section 15-8-601, MCA, assuming 15-8-601, MCA, applies to the type of error involved here.
Section 15-8-601(1), MCA, provides:
"Whenever the department of revenue discovers that any taxable property of any person has in any year escaped assessment, been erroneously assessed, or been omitted from taxation, the department may assess the same providing the property is under the ownership or control of the same person who owned or controlled it at the time it escaped assessment, was erroneously assessed, or was omitted from taxation."
Here, Evans claims that DOR may not proceed under section 15-8-601, MCA, because the error is not an "erroneous assessment" but rather an "erroneous appraisal." This technical distinction drawn by Evans is not correct.
The record simply does not support the statements made by Evans in its brief that the error here occurred in the Missoula County Appraiser's Office and not in the Assessor's Office. Neither does the record support the statement made by Evans that this is solely an "appraisal" error. The error here arose because a keypuncher in the County Assessor's Office failed to multiply the assessed value by 2.5. An incorrect market value was therefore carried forward.
This error was merely a clerical one. It was not an error, as characterized by Evans, *526 of undervaluation during the process of reappraisal. Such a clerical error falls under the plain language meaning of "erroneous assessment" as it is used in section 15-8-601, MCA.
Evans argues that this case is similar to those cases where a county assessor has, through an error in judgment, undervalued property. The error here was not one of judgment, but, as noted above, only a miscalculation. The Florida Supreme Court has expressed well the difference between valuation resulting from an error in judgment and one resulting from a clerical error:
"We must keep in mind the distinction between changes and `miscalculations' by the assessor which `up' the amount previously assessed after tax roll certification, and the situation here where there has been no billing at all on the improvement (or it could be a separate, `overlooked' parcel of land) which has been completely excluded from the tax roll. This is obviously a mistake, error, oversight, which cannot be prejudicial to the taxpayer as in those cases where a change in judgment by the tax assessor was involved, belatedly increasing the valuation which had in fact earlier been assigned, and entered on the tax roll..."
Korash v. Mills (1972), Fla., 263 So. 2d 579, 581.
Even if the clerical error can be termed solely an "appraisal" error, Evans' argument fails. The bulk of authority and prior Montana case law suggest that appraisal, the setting of market value, is an integral part of the taxation process. Am.Jur.2d State and Local Taxation, Section 704; and Larson v. State (1975), 166 Mont. 449, 534 P.2d 854. In Larson, we stated that the suggested distinction between the statutory use of the word "tax" and the operative fact of an "appraisal" was without substance because the appraisal would have been used as the basis for the tax computation. 534 P.2d at 858. Likewise, here, the mistakenly used assessed value was the basis for the computation of the taxable value.
Whether the error is termed an "assessment" error, or an "appraisal" error, because it was a clerical error made while assessing the taxable value on Evans' property, it was an "erroneous assessment" within the meaning of section 15-8-601, MCA.
We therefore affirm the summary judgment to the extent that the taxes must now be refunded to Evans because the mandatory procedures of section 15-8-601, MCA, were not initially followed. We reverse the District Court's decision to the extent that it would preclude DOR from now proceeding properly under section 15-8-601, MCA.
HASWELL, C.J., and HARRISON, SHEA, MORRISON, WEBER and SHEEHY, JJ., concur. | 01-03-2023 | 06-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1370256/ | 507 S.E.2d 879 (1998)
234 Ga. App. 778
In the Interest of S.B.B., a child.
No. A98A1897.
Court of Appeals of Georgia.
October 16, 1998.
*880 Pete, Pete & Associates, Anthony T. Pete, Athens, for appellant.
Harry N. Gordon, District Attorney, Kirk M. Thomas, Assistant District Attorney, for appellee.
JOHNSON, Presiding Judge.
Sixteen-year-old S.B.B. was charged with armed robbery and aggravated assault. After a hearing, the juvenile court ordered the case transferred to superior court pursuant to OCGA § 15-11-39. S.B.B. appeals, alleging the state failed to prove: (1) that he participated in the acts alleged; and (2) that he was not amenable to treatment in the juvenile system. For the following reasons, we affirm.
OCGA § 15-11-39(a)(3) provides in relevant part that a juvenile court may transfer a case to an appropriate court if, in its discretion, it determines there are reasonable grounds to believe the child committed the delinquent acts alleged; the child is not committable to an institution for the mentally ill or retarded; and the interests of the child and the community require that the child be placed under legal restraint and the transfer be made.
1. Evidence that S.B.B. participated in the acts alleged. "The function of the appellate court is limited to ascertaining whether there was some evidence to support the juvenile court's determination. Determinations of a juvenile court made on an exercise of discretion, if based upon evidence, will not be controlled by this court." (Citation and punctuation omitted.) In the Interest of K.S.K., 216 Ga.App. 257, 258(2), 454 S.E.2d 165 (1995).
The victim testified that a group of four or five boys she knew entered the convenience store where she worked as a cashier. As the boys browsed and used the microwave oven, the victim spoke to them , and they spoke back. As she walked toward the counter, one of the boys came behind her, grabbed her around the throat and pulled her to the ground. She was beaten and stomped, and her face and ear were severely cut with a sharp object. Cigarettes, lottery tickets and cash were taken from the store. S.B.B. initially denied having any knowledge of the offenses, then eventually stated that he was present in the store but that his friends committed the assault and robbery. The victim identified S.B.B. in a photographic array and in court as one of her assailants. The evidence amply supports the juvenile court's finding that reasonable grounds exist to believe S.B.B. committed the delinquent acts charged. See generally In the Interest *881 of K.L.L., 204 Ga.App. 320, 321(2), 419 S.E.2d 312 (1992).
2. Amenability to treatment. The state did not seek a transfer based on nonamenability to treatment, and the juvenile court did not rely on that ground in ordering the transfer. Instead, based on the severity and viciousness of the offenses, the juvenile court found that the public interest in treating S.B.B. as an adult outweighed his interest in being treated as a juvenile. It is not necessary to prove the juvenile's amenability to treatment in the juvenile system where the interest of the community mandates a transfer. In the Interest of C.D.B., 214 Ga. App. 655, 656(2), 449 S.E.2d 1 (1994); see In the Interest of A.G., 265 Ga. 481, 458 S.E.2d 343 (1995). The juvenile court did not abuse its discretion in ordering the matter transferred to superior court. In the Interest of A.F., 214 Ga.App. 440, 442(2), 448 S.E.2d 11 (1994).
Judgment affirmed.
SMITH, J., and HAROLD R. BANKE, Senior Appellate Judge, concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1370217/ | 333 S.C. 12 (1998)
507 S.E.2d 328
Philip S. PORTER, Consumer Advocate for the State of South Carolina, Respondent/Appellant,
v.
SOUTH CAROLINA PUBLIC SERVICE COMMISSION and BellSouth Telecommunications, Inc., of which South Carolina Public Service Commission is Respondent,
and BellSouth Telecommunications is Appellant/Respondent.
South Carolina Public Communications Association, Petitioner,
v.
South Carolina Public Service Commission and BellSouth Telecommunications, d/b/a Southern Bell Telephone and Telegraph Co., of which South Carolina Public Service Commission is Respondent,
and BellSouth Telecommunications is Appellant/Respondent.
No. 24847.
Supreme Court of South Carolina.
Heard October 8, 1998.
Decided October 26, 1998.
*17 Caroline N. Watson, Robert A. Culpepper, Harry M. Lightsey, III, and William F. Austin, all of Columbia, and John Hamilton Smith of Charleston, for BellSouth Telecommunications, Inc.
Philip S. Porter, Nancy Vaughn Coombs, and Elliott F. Elam, Jr., all of Columbia, for Consumer Advocate for the State of South Carolina.
F. David Butler, of Columbia, for South Carolina Public Service Commission.
*18 WALLER, Justice:
This is a utility rate case. We affirm in part and reverse in part.
PROCEDURAL POSTURE
The South Carolina Public Service Commission (PSC) reviewed BellSouth Telecommunication's (BellSouth's) earnings in 1994, a test year used to determine future rates. Based on that review, PSC adjusted certain revenues and expenses of BellSouth and ordered the company to reduce its future rates by $42.3 million annually. Philip S. Porter (Consumer Advocate) filed a petition for review of PSC's orders in circuit court. The circuit court affirmed PSC's orders with the exception of one issue, which the circuit court reversed. Consumer Advocate and BellSouth now appeal the circuit court's judgment.
ISSUES
1. Did the circuit court err in affirming PSC's decision on the rate of return on common equity?
2. Did the circuit court err in affirming PSC's calculation of BellSouth Advertising and Publishing Co. revenue?
3. Did the circuit court err in affirming PSC's treatment of cash working capital?
4. Did the circuit court err in affirming PSC's decision on the annualization of salary and wage expenses?
5. Did the circuit court err in reversing PSC's decision to include Area Plus losses in test-year calculations?
1. RATE OF RETURN ON COMMON EQUITY
Consumer Advocate contends the circuit court erred in affirming PSC's decision on the rate of return on common equity because that decision was not adequately documented in findings of fact or supported by substantial evidence. We agree.
*19 A PSC staff economist testified PSC should set the rate of return on common equity[1] between 11.5 percent and 12 percent. An economist hired by Consumer Advocate testified PSC should set the rate between 10.4 percent and 11.6 percent. In calculating the rate, both economists compared BellSouth with other telephone companies. They did not include "flotation costs" associated with issuing stock because BellSouth Telecommunications, a subsidiary of the publicly held BellSouth Corp., had no plans to issue stock. An economist hired by BellSouth testified PSC should set the rate between 13.71 percent and 13.95 percent. In calculating the rate, BellSouth's economist compared the company with non-regulated, non-utility companies such as McDonald's Corp., Procter & Gamble Co., Knight-Ridder Inc., and Pfizer Inc. He also included flotation costs associated with issuing stock.
In Order No. 95-1757, PSC set the rate of return on common equity at 12.75 percent, finding that rate to be "fair and reasonable" to BellSouth, the company's stockholders, and the company's customers. PSC described the three economists' testimony and outlined established legal principles the agency must use in determining a fair rate of return. PSC agreed with its staff economist and Consumer Advocate's economist that "telecommunications companies are a better comparison group with BellSouth than the various non-utility surrogates favored by [BellSouth's economist]." PSC also agreed it would be improper to include costs of issuing stock in calculations in this case. PSC stated its decision was based on "evidence presented by the witnesses and current economic conditions."
Consumer Advocate in a petition for rehearing urged PSC to set the rate no higher than 12 percentthe highest estimate recommended by the two economists upon which PSC relied in its order. In response, PSC issued Order No. 96-75, *20 deleting from its previous order the above sentence in which it agreed with the two economists about the proper comparison group. PSC concluded the 12.75 percent rate was proper because it fell within the overall range recommended by all three economists (10.4 percent to 13.95 percent).[2] The circuit court affirmed PSC's order.
Consumer Advocate now contends PSC issued orders without properly explaining its reasoning in findings of fact based on substantial evidence in the record. Consumer Advocate argues PSC offered no rationale for its decision after modifying the original order to delete any reference to its reliance upon the two economists' testimony.
This Court employs a deferential standard of review when reviewing a PSC decision and will affirm that decision when substantial evidence supports it. Heater of Seabrook, Inc. v. Pub. Serv. Comm'n of South Carolina, 324 S.C. 56, 60, 478 S.E.2d 826, 828 (1996); Hamm v. South Carolina Pub. Serv. Comm'n, 309 S.C. 282, 422 S.E.2d 110 (1992). This Court may not substitute its judgment for PSC's on questions about which there is room for a difference of intelligent opinion. Because PSC's findings are presumptively correct, the party challenging a PSC order bears the burden of convincingly proving that the decision is clearly erroneous, or arbitrary or capricious, or an abuse of discretion, in view of the substantial evidence on the whole record. Heater of Seabrook, Inc., supra; Patton v. South Carolina Pub. Serv. Comm'n, 280 S.C. 288, 290, 312 S.E.2d 257, 259 (1984); S.C.Code Ann. § 1-23-380(A)(6) (Supp.1997).
Substantial evidence is relevant evidence that, considering the record as a whole, a reasonable mind would accept to support an administrative agency's action. Substantial evidence exists when, if the case were presented to a jury, the court would refuse to direct a verdict because the evidence raises questions of fact for the jury. It is more than a mere scintilla of evidence, but is something less than the weight of *21 the evidence. Furthermore, the possibility of drawing two inconsistent conclusions from the evidence does not prevent a court from concluding that substantial evidence supports an administrative agency's finding. Hamm v. South Carolina Pub. Serv. Comm'n, 315 S.C. 119, 122, 432 S.E.2d 454, 456 (1993); Lark v. Bi-Lo, Inc., 276 S.C. 130, 135, 276 S.E.2d 304, 307 (1981).
This deferential standard of review does not mean, however, that the Court will accept an administrative agency's decision at face value without requiring the agency to explain its reasoning. In determining a fair rate of return on common equity, for example, PSC must fully document its findings of fact and base its decision on reliable, probative, and substantial evidence on the whole record. Porter v. South Carolina Pub. Serv. Comm'n, 332 S.C. 93, 504 S.E.2d 320 (1998); S.C.Code Ann. § 58-5-240(H) (Supp.1997).
"An administrative body must make findings which are sufficiently detailed to enable this Court to determine whether the findings are supported by the evidence and whether the law has been applied properly to those findings." Porter, supra; Hamm v. South Carolina Pub. Serv. Comm'n, 309 S.C. 295, 422 S.E.2d 118 (1992); S.C.Code Ann. § 58-9-1160 (1976). "Where material facts are in dispute, the administrative body must make specific, express findings of fact." Porter, supra; Able Communications, Inc. v. South Carolina Pub. Serv. Comm'n, 290 S.C. 409, 351 S.E.2d 151 (1986); S.C.Code Ann. § 1-23-350 (1986). An administrative agency is not required to present its findings of fact and reasoning in any particular format, although the better practice is to present them in an organized and regimented manner. However, "a recital of conflicting testimony followed by a general conclusion is patently insufficient to enable a reviewing court to address the issues." Able Communications, Inc. v. South Carolina Pub. Serv. Comm'n, 290 S.C. at 411, 351 S.E.2d at 152.
We find the order in this case deficient because PSC made no findings of fact or offered any explanation of its conclusion. See S.C.Code Ann. § 58-9-570 (1976) (listing factors PSC must consider in determining just and reasonable rates of telephone companies). PSC's order simply recites the economists' conflicting testimony, mentions established legal principles *22 applied in rate cases, and then Concludes 12.75 percent is a proper rate of return on common equity. PSC eliminated what little reasoning it had included in its original order by deleting any reference to the two economists' opinion. See also Hamm v. South Carolina Pub. Serv. Comm'n, 309 S.C. at 287, 422 S.E.2d at 113 (PSC's decision to set rate of return on common equity at 13.25 percent was not supported by substantial evidence where evidence showed that maximum rate, after inappropriate adjustments were deleted, was 13 percent). Accordingly, we reverse the judgment of the circuit court on this issue.[3]
2. BAPCO REVENUE
Consumer Advocate argues the circuit court erred in affirming PSC's decision on the amount of revenue generated by BellSouth Advertising and Publishing Co. (BAPCO) because that decision was not adequately documented in findings of fact or supported by substantial evidence. We agree.
BAPCO, a subsidiary of BellSouth Telecommunications, handles Yellow Page operations. PSC previously had determined *23 that it would recognize the net income of BAPCO as operating revenue and that it would recognize the BAPCO investment in the rate base. PSC's staff recommended that BellSouth's operating income from the test year include about $6 million from BAPCO operations. Consumer Advocate presented testimony showing that figure was abnormally low during the test year due to certain nonrecurring accounting adjustments made by BellSouth in December 1994. BAPCO's average net income was about $551,000 per month except for December, when it reported a loss of $25,000. BellSouth itself described the December expenses as "extraordinary," and said they resulted from the downsizing of the work force and planned technological improvements, among other things, according to Consumer Advocate. BAPCO revenue ought to be set at $6.6 million, Consumer Advocate argued.
PSC adopted the staff recommendation, concluding it was accurate and reliable. In its order upon reconsideration, PSC explained that it rejected Consumer Advocate's position because it was based upon "pure speculation," not proof that BellSouth's accounting adjustments actually were nonrecurring. The circuit court affirmed PSC's decision.
We conclude the circuit court erred in affirming PSC's decision on this issue for two reasons. First, the record does not contain substantial evidence supporting PSC's conclusion that Consumer Advocate's position was "pure speculation." The operating loss in December, which followed eleven months of profits, indicates that month was somehow unusual. BellSouth itself described the December 1994 expenses as "extraordinary" and explained they were related to downsizing of the work force and technological improvements, among other things. The only conclusion that can be drawn from the record is that those expenses were nonrecurring. See Hamm, 315 S.C. at 122, 432 S.E.2d at 456 (substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion).
Second, PSC must adjust atypical test-year figures in order to accurately perform calculations that affect the company's overall rate of return and, ultimately, customer rates. See Hamm, 309 S.C. at 289-90, 422 S.E.2d at 114 ("object of test year figures is to reflect typical conditions .... Where an unusual situation exists which shows that the test year figures *24 are atypical and thus do not indicate future trends, the Commission should adjust the test year data"); see also S.C.Code Ann. § 58-9-570 (1976) (in determining rates, PSC shall consider, among other things, reasonable operating expenses and other costs necessary to provide the service, as well as other matters PSC may find necessary); Chesapeake Utilities Corp. v. Delaware Pub. Serv. Comm'n, 705 A.2d 1059, 1067 (Del.Super.Ct.1997) (extraordinary expenses are included in rate base only if they are a recognized component of the rate base or if the commission, in its discretion, determines that denying them would impair a utility's effective operation). Accordingly, we reverse the judgment of the circuit court on this issue.
3. ALLOWANCE FOR CASH WORKING CAPITAL
Consumer Advocate contends the circuit court erred in affirming PSC's treatment of cash working capital because that decision was arbitrary, capricious, and not supported by substantial evidence. We agree.
Cash working capital is money a utility must have on hand to pay its own bills before it receives payments from customers. Consumer Advocate argued PSC should use a lead-lag study prepared by BellSouth to determine how much cash working capital to include in BellSouth's rate base.[4] Such a study shows whether a company is able to pay its own bills before receiving revenue from customers by comparing the revenue lag (days between company's provision of service and customers' payment) with the expense lag (days between the incurring of an expense by company and payment of the expense).[5]
Consumer Advocate presented testimony showing PSC should set BellSouth's allowance for cash working capital at *25 zero because the company bills most of its customers for services in advance. BellSouth has a negative cash working capital requirement, Consumer Advocate contended. Simply put, customer revenue flows into BellSouth's accounts before it must pay expenses. Therefore, BellSouth needs no allowance for cash working capital and it is inappropriate to allow shareholders to earn a return on that money by including it in the rate base, Consumer Advocate argued.[6]
PSC rejected Consumer Advocate's position, instead adopting its staff's recommendation to include an allowance for cash working capital of $10.4 million in BellSouth's rate base. PSC's staff based its calculations on a method that uses a company's average daily cash balances to determine the requirement. In its orders, PSC stated it had long used such a method and believed it to be appropriate in this case. Companies must have cash on hand for daily operations and there is no such thing as a "negative cash working capital requirement," PSC stated. PSC considers cash working capital to be an investment made by shareholders upon which they are entitled to earn a return. PSC also concluded the lead-lag method penalizes good cash management and rewards inefficient cash management. The circuit court affirmed PSC's decision.
Consumer Advocate now contends PSC's decision was arbitrary, capricious, and not supported by substantial evidence. In some states, courts have approved a regulatory agency's decision either to establish a negative cash working capital requirement and deduct it from the rate base, or set the requirement at zero.[7] In others, courts have upheld a regulatory *26 agency's decision to include an allowance for cash working capital in the rate base, although it usually is limited to investor-supplied capital.[8]
It is within PSC's discretion to adopt the rate-setting method it believes is appropriate, provided that method complies with the statutes. See Heater of Seabrook, Inc., 324 S.C. at 64, 478 S.E.2d at 830 (PSC generally has wide latitude to determine an appropriate rate-setting methodology); Nucor Steel v. South Carolina Pub. Serv. Comm'n, 312 S.C. 79, 85, 439 S.E.2d 270, 273 (1994) (nothing in statute requires PSC to adopt any particular price-setting methodology in determining fair rate of return). As an Arkansas court stated, as long as a regulatory agency operates within the statutes, "[i]t is apparent that no particular methodology is precise and ... a determination of working capital is in many respects an exercise of discretion as to what particular method yields the most fair and equitable result in each case." General Tel. Co. v. Arkansas Pub. Serv. Comm'n, 23 Ark.App. 73, 744 S.W.2d 392, 397 (Ark.Ct.App.), aff'd, 295 Ark. 595, 751 S.W.2d 1 (1988).
We conclude the circuit court erred in affirming PSC's decision on this issue because the record does not contain any *27 testimony or other substantial evidence supporting PSC's conclusion. PSC decided the issue arbitrarily, adhering to its past practice and simply announcing BellSouth is entitled to an allowance for cash working capital in its rate base without attempting to explain or support that decision. See Hamm, 309 S.C. at 289, 422 S.E.2d at 114 (a previously adopted policy may not furnish the sole basis for PSC's action). PSC made no effort to explain or support its conclusion that the lead-lag method penalizes good cash management and rewards inefficient cash management. In addition, PSC's statement that there is no such thing as a negative cash working capital requirement is simply incorrect. Other regulatory agencies and courts have discussed and applied the concept. E.g., Colorado Mun. League, 687 P.2d at 419 (explaining that positive working capital is provided by shareholders, while negative working capital is provided by advance customer payments or other funds received before a company's own bills are due); Barasch v. Pub. Util. Comm'n, 108 Pa.Cmwlth. 326, 530 A.2d 936 (Pa.Commw.Ct.1987) (same); cases cited in footnote 7. In short, PSC's arbitrary pronouncement stands in stark contrast to the debate engaged in by regulatory agencies and courts in other states on this issue. Accordingly, we reverse the judgment of the circuit court on this issue.
4. WAGE AND SALARY EXPENSES
Consumer Advocate contends the circuit court erred in affirming PSC's decision on the annualization of salary and wage expenses because that decision was not adequately documented in findings of fact or supported by substantial evidence. We disagree.
BellSouth reduced the number of employees after the end of the 1994 test year due to reorganization, technological advances, and corporate "downsizing." PSC's staff examined BellSouth's salary, wage, and payroll tax expenses from March to May 1995, the most recent available when the staff calculated the reduction in those expenses. A PSC accountant testified the calculations did not include more recent actual reductions in the work force because the staff preferred to use actual, audited figures.
When PSC heard the case, Consumer Advocate argued the agency should examine more recent data for May and June *28 1995, which BellSouth had provided, because it more accurately reflected employee reductions. Consumer Advocate presented testimony showing PSC should reduce the salary and wage expense by about $2.9 million more than the staffs recommended reduction of $5.2 million.
PSC adopted the staff recommendation, finding it fairly reflected BellSouth's salary and wage expenses while accounting for employee reductions. In its order denying Consumer Advocate's petition for reconsideration, PSC rejected Consumer Advocate's argument by saying it preferred to rely upon actual, audited figuresnot the unaudited data that included the month of June 1995. The circuit court affirmed the PSC's decision.
Consumer Advocate now contends that PSC's decision was not adequately documented in findings of fact or supported by substantial evidence. Consumer Advocate also argues that PSC had to consider the June 1995 data under Southern Bell v. Pub. Serv. Comm'n of South Carolina, 270 S.C. 590, 602, 244 S.E.2d 278, 284 (1978) (PSC should consider known and measurable changes in expenses, revenues and investments occurring after the test year so that resulting rates will reflect the actual rate base, net operating income, and cost of capital).
We conclude PSC adequately explained its findings of fact and reasoning when the original order and order upon reconsideration are read together. The original order, standing alone, would be insufficient under the principles outlined in Issue 1 because PSC merely recited the conflicting testimony and then stated its conclusion. The order upon reconsideration, however, reveals PSC chose not to consider the June 1995 data because it preferred to rely upon audited data. The order cites the PSC accountant's testimony, which constitutes substantial evidence supporting the agency's decision.
Southern Bell, supra, does not require PSC to consider unaudited or speculative data. It merely requires PSC to consider known and measurable changes that occur after the test year in order to accurately calculate figures that affect the company's overall rate of return and customer rates. PSC complied with Southern Bell by considering the audited data from March to May 1995. Accordingly, we affirm the judgment of the circuit court on this issue.
*29 5. AREA PLUS LOSSES
BellSouth argues the circuit court erred in reversing PSC's decision to include Area Plus losses in test-year calculations because that decision was supported by substantial evidence. We disagree.
In February 1993, BellSouth asked PSC to approve its rate plan for a new service called Area Plus.[9] PSC approved the plan. Several long-distance carriers appealed the decision in circuit court. In April 1994, PSC, BellSouth, the long-distance carriers, and Consumer Advocate entered into an agreement resolving the dispute. The parties made several stipulations, including the following: "BellSouth will not come before [PSC] requesting rate relief for any possible losses resulting from the introduction of Area Plus service, the execution of Area Calling Plan Principles Agreement, or this Stipulation." The parties further stipulated that PSC must review the agreement three years after its approval to determine whether any modifications are appropriate.
In the present case, PSC's staff and BellSouth recommended that Area Plus revenue from the first half of 1995 be included in test-year calculations. Consequently, PSC allowed BellSouth to recognize nearly $4.5 million in losses attributable to Area Plus service. Consumer Advocate protested that BellSouth was barred from recognizing those losses under the April 1994 agreement. Recognizing the losses would increase BellSouth's need for revenue from other ratepayers, which was what the stipulation was intended to prevent, Consumer Advocate argued.
PSC rejected those contentions, saying BellSouth had not requested rate relief because PSCnot BellSouthhad initiated the review of the company's earnings. Therefore, neither PSC nor BellSouth had violated the stipulation. The circuit court reversed PSC's decision. The court concluded PSC had abused its discretion because the parties reasonably expected *30 to rely on the April 1994 agreement, and PSC had offered no reason for nullifying the stipulation.
BellSouth now argues the circuit court erred because substantial evidence supported PSC's decision to include known and measurable Area Plus losses in test-year calculations. Including them did not violate the stipulation because BellSouth had not asked for rate relief, but merely submitted the information during an earnings review initiated by PSC. BellSouth also argues the parties intended for stipulations in the April 1994 agreement to be considered only if BellSouth asked to withdraw its Area Plus service or if PSC considered another specific type of long-distance service in South Carolina.
"A stipulation is an agreement, admission or concession made in judicial proceedings by the parties thereto or their attorneys. Stipulations, of course, are binding upon those who make them." Kirkland v. Allcraft Steel Co., 329 S.C. 389, 392, 496 S.E.2d 624, 626 (1998) (citations omitted). A stipulation is an agreement, an understanding. The court must construe it like a contract, i.e., interpret it in a manner consistent with the parties' intentions. Webster v. Holly Hill Lumber Co., 268 S.C. 416, 421, 234 S.E.2d 232, 234 (1977).
Because the court construes it like a contract, a stipulation that is unambiguous and explicit must be construed according to the terms the parties have used, as those terms are understood in their plain, ordinary, and popular sense. See C.A.N. Enterprises, Inc. v. South Carolina Health and Human Services Fin. Comm'n, 296 S.C. 373, 377, 373 S.E.2d 584, 586 (1988) (court must construe unambiguous contracts according to plain meaning of terms used by parties); Chapman v. Metropolitan Life Ins. Co., 172 S.C. 250, 256, 173 S.E. 801, 804 (1934) (it plainly is "the duty of the court to construe a written contract if there be no ambiguous language which is susceptible of more than one meaning"); accord 83 C.J.S. Stipulations § 11 (1953); 73 Am.Jur.2d Stipulations § 7 (1974).
A party who has entered into a stipulation may seek the written consent of other parties to abrogate the stipulation. A party also may ask the court to abrogate a stipulation for good cause or because the interests of justice *31 require it. Whether to abrogate the stipulation is addressed to the sound discretion of the trial judge, and an appellate court will not interfere with that decision except when there is a manifest abuse of discretion. Strange v. South Carolina Dep't of Highways and Pub. Transp., 314 S.C. 427, 430, 445 S.E.2d 439, 441 (1994); Edens v. Cole, 261 S.C. 556, 561, 201 S.E.2d 382, 384 (1973); Brown v. Pechman, 55 S.C. 555, 563, 33 S.E. 732, 737 (1899); accord 83 C.J.S. Stipulations §§ 30-37; 73 Am.Jur.2d Stipulations §§ 12-14. When a party has not asked the court to relieve it from the terms of a stipulation, that party remains bound by the stipulation. American Surety Co. v. Hamrick Mills, 194 S.C. 221, 232, 9 S.E.2d 433, 438 (1940).
We conclude the circuit court properly enforced the plain meaning of the stipulation at issue in this case. Regardless of which entity initiated the earnings review, BellSouth asked PSC to recognize losses attributable to Area Plus. It is true that, in the end, PSC reduced BellSouth's rates by $42.3 million annually. But BellSouth plainly requested rate relief because it wanted to use Area Plus losses to avoid a further reduction in its rates, and that was precisely what BellSouth promised not to do in the April 1994 agreement. BellSouth never asked the other parties, PSC, or the court to relieve it from the stipulation. The record contains no evidence supporting PSC's decision to ignore the stipulation. In fact, a PSC engineer conceded under questioning by Consumer Advocate that BellSouth would receive rate relief if PSC allowed the company to recognize the losses. See Porter v. South Carolina Pub. Serv. Comm'n, 332 S.C. 93, 504 S.E.2d 320 (1998) (reversing circuit court order that upheld PSC's approval of certain expenses, where utility had not complied with stipulation that plainly required it to perform a cost/benefit analysis when seeking recovery of those costs).
This result does not mean, of course, that BellSouth may never ask PSC to recognize Area Plus losses. The April 1994 agreement stated PSC would review the agreement after three years, and BellSouth may ask PSC to reconsider the stipulation sooner. See Strange v. South Carolina Dep't of Highways and Pub. Transp., supra; Edens v. Cole, supra; Brown v. Pechman, supra. Accordingly, we affirm the judgment of the circuit court on this issue.
*32 CONCLUSION
We reverse the judgment of the circuit court on Issue 1 (rate of return on common equity), Issue 2 (BAPCO revenue), and Issue 3 (allowance for cash working capital). We remand this case to PSC for it to reconsider those issues solely on the basis of the record on appeal in this case. See Parker v. South Carolina Pub. Serv. Comm'n, 288 S.C. 304, 342 S.E.2d 403 (1986) (administrative agency may not consider additional evidence upon remand unless Court allows it because that affords a party two bites at the apple). We affirm the judgment of the circuit court on Issue 4 (annualization of wage and salary expenses) and Issue 5 (Area Plus losses).
AFFIRMED IN PART; REVERSED IN PART; REMANDED.
TOAL, Acting C.J., MOORE and BURNETT, JJ., concur.
FINNEY, C.J., not participating.
NOTES
[1] The rate of return on common equity is a key figure used in calculating the overall rate of return PSC allows a utility to earn on its regulated operations in South Carolina. PSC set the overall rate of return for BellSouth at 10.86 percent in this case.
PSC's staff recommended reductions that would have decreased BellSouth's annual revenues by $58 million. Consumer Advocate recommended annual reductions of $89 million, while BellSouth hoped to limit annual reductions to $17 million.
[2] One PSC commissioner dissented from both orders, saying the rate of return on common equity should not exceed 12 percent. He stated he was "deeply concerned" by the agency's trend of "almost ignoring the Commission staff and Consumer Advocate witnesses in its considerations of recent cases."
[3] We occasionally have upheld PSC orders which were conclusory in nature. We did so in years past because no statute explicitly required an administrative agency to make specific findings of fact or state its reasoning as a predicate for judicial reviewalthough we have long believed that is the better practice. See Greyhound Lines, Inc. v. South Carolina Pub. Serv. Comm'n, 274 S.C. 168, 262 S.E.2d 22 (1980); Atlantic Coast Line R.R. Co. v. South Carolina Pub. Serv. Comm'n, 245 S.C. 229, 139 S.E.2d 911 (1965). We recently stated that the "substantial evidence test does not require that the Commission cite to facts, but that the evidence is contained in the record as a whole." Hamm v. South Carolina Pub. Serv. Comm'n, 315 S.C. 119, 123, 432 S.E.2d 454, 457 (1993); Hamm v. American Tel. & Tel. Co., 302 S.C. 210, 218, 394 S.E.2d 842, 846 (1990).
As discussed above, statutes and our precedent require an administrative agency to make specific findings of fact and explain its rationale in sufficient detail to afford judicial review. We overrule Greyhound Lines, Inc. v. South Carolina Pub. Serv. Comm'n, supra; Atlantic Coast Line R.R. Co. v. South Carolina Pub. Serv. Comm'n, supra; Hamm v. South Carolina Pub. Serv. Comm'n, 315 S.C. 119, 432 S.E.2d 454, and Hamm v. American Tel. & Tel. Co., 302 S.C. 210, 394 S.E.2d 842, to the extent that they conflict with the approach outlined above. We also overrule them to the extent that they suggest the Court will, sua sponte, search the record for substantial evidence supporting a decision when an administrative agency's order inadequately sets forth the agency's findings of fact and reasoning.
[4] "The `rate base' is the amount of investment on which a regulated public utility is entitled an opportunity to earn a fair and reasonable return. A public utility's `rate base' represents the total investments in, or fair value of, the used and useful property which it necessarily devotes to rendering the regulated services." Southern Bell v. Pub. Serv. Comm'n of South Carolina, 270 S.C. 590, 600, 244 S.E.2d 278, 283 (1978).
[5] "A `lead-lag' study empirically identifies the difference in timing between outward cash flow for labor, materials and supplies, inventory, and other expenses, and inward cash flow from charges to customers." Colorado Mun. League v. Pub. Util. Comm'n, 687 P.2d 416, 420 (Colo. 1984).
[6] Assuming a rate of return on common equity of 12.75 percent, BellSouth would have to reduce its rates by an additional $1.1 million annually if PSC set the cash working capital requirement at zero. Assuming a rate of return on common equity of 12 percent, BellSouth would have to reduce its rates by $5.7 million annually, according to Consumer Advocate.
[7] E.g., Cincinnati Gas & Elec. Co. v. Pub. Util. Comm'n, 67 Ohio St. 3d 517, 620 N.E.2d 821 (Ohio 1993) (affirming commission's decision to subtract negative working capital from total working capital allowance approved for utility); Colorado Mun. League v. Pub. Util. Comm'n, 687 P.2d 416, 419-21 (Colo.1984) (affirming commission's decision to set the cash working capital allowance at zero instead of attributing negative working capital to utility); Barasch v. Pub. Util. Comm'n, 111 Pa.Cmwlth. 339, 533 A.2d 1108, 1112-14 (Pa.Commw.Ct.1987) (same).
[8] E.g., Chesapeake Util. Corp. v. Delaware Pub. Service Comm'n, 705 A.2d 1059, 1069 (Del.Super.Ct.1997) (interpreting statute to allow commission to include allowance for investor-supplied cash working capital in rate base); General Tel. Co. v. Arkansas Pub. Serv. Comm'n, 23 Ark.App. 73, 744 S.W.2d 392, 395-98 (Ark.Ct.App.) (upholding commission's decision to use modified balance sheet approach instead of lead-lag study to determine allowance for cash working capital), aff'd, 295 Ark. 595, 751 S.W.2d 1 (1988); People's Counsel v. Pub. Service Comm'n, 399 A.2d 43, 46 (D.C.Ct.App.1979) (approving an allowance for cash working capital in the rate base where utility's customers paid after service was rendered, and noting such an allowance is not allowed to extent that customers provide cash working capital because that forces customers to pay a return on funds they advanced); Chesapeake and Potomac Tel. Co. v. Pub. Service Comm'n, 201 Md. 170, 93 A.2d 249 (Md.1952) (affirming commission's decision not to include cash working capital in rate base where utility's customers paid in advance).
[9] Area Plus is an optional service that expands a subscriber's local calling area. BellSouth charges substantially lower rates for calls within that area than it usually charges. BellSouth's revenue under the former billing system decreases when subscribers switch to Area Plus and the volume of calls remains the same. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1370258/ | 310 S.W.3d 144 (2010)
HOLLY PARK CONDOMINIUM HOMEOWNERS' ASSOCIATION, INC., Appellant,
v.
Rene LOWERY, Appellee.
No. 05-08-01366-CV.
Court of Appeals of Texas, Dallas.
March 26, 2010.
Rehearing Overruled May 21, 2010.
*145 Marc D. Markel, Amy Vanhoose, Pamela W. Montgomery, David M. Kriewaldt, Houston, for appellant.
Frank E. McLain, Dallas, for appellee.
Before Justices FITZGERALD, MURPHY, and MYERS.
OPINION
Opinion by Justice FITZGERALD.
Rene Lowery sued the Holly Park Condominium Homeowners' Association, Inc. (the "Association") alleging wrongful foreclosure. The trial court granted summary judgment in Lowery's favor, and the Association appeals. In a single issue, the Association contends the trial court erred in granting the motion because its foreclosure of Lowery's condominium unit complied with Texas law and with all governing documents. We affirm the trial court's judgment.
BACKGROUND
The material facts in this case are not in dispute. Holly Park Condominiums recorded its declaration in 1979. The Association administers the operation and management of the condominiums. Lowery owned a condominium in Holly Park, but, beginning in January 2007, she failed to pay her monthly assessment. In August of 2007, after giving Lowery notice of default, the Association conducted a nonjudicial foreclosure on her condominium and then sold the property.
Lowery sued for wrongful foreclosure and sought a declaratory judgment finding the non-judicial foreclosure void. The parties filed cross motions for summary judgment. Lowery's motion contended that only a judicial foreclosure was permitted under her declaration. It contended further that the Texas statutes governing condominium regimes did not abrogate this specific contractual right. The Association in its response to Lowery's motion and in its own motionargued its nonjudicial foreclosure was valid and authorized by statute.
The trial court did not rule on the Association's motion. It granted Lowery's motion, concluding that Lowery was entitled to a judicial declaration:
a. that the Texas Uniform Condominium Act and in particular Section 82.113, does not abrogate Plaintiff's rights stated under Article II, Section 4 of Condominium Bylaws, which bylaws are incorporated in the Condominium Declaration, and which require judicial foreclosure of the Condominium Association's lien *146 against Plaintiff's Condominium Unit.
b. that Defendant Holly Park Condominium Association Homeowner's Association's non-judicial foreclosure on the condominium unit made the subject of this litigation, that is Unit 141, Building B of Holly Park Condominium Regime, situated in Dallas, Dallas County, Texas, commonly known as 7510 Holly Hill ("the Condominium Unit"), be set aside and held for naught; and,
c. that the enforcement of any assessment lien held by Holly Park Condominium Homeowner's Association, Inc., shall be by judicial foreclosure in accordance with Article II, Section 4, of the Condominium Bylaws, which bylaws are incorporated in the Condominium Declaration and consequently, the non-judicial foreclosure by Holly Park Condominium Homeowner's Association, Inc., violates said Article II, Section 4.
The trial court also awarded Lowery attorney's fees. The court then severed the declaratory judgment from the remainder of the case. The Association appeals.
STANDARD OF REVIEW AND APPLICABLE LAW
The standard for reviewing a summary judgment is well established: the party moving for summary judgment has the burden of showing that no genuine issue of material fact exists and she is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). We uphold a summary judgment on any ground supported by the evidence and pleadings. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989). In this case, we must determine the meaning and applicability of various statutory provisions governing condominium regimes. In construing statutes, we ascertain and give effect to the Legislature's intent as expressed by the language of the statute. State v. Shumake, 199 S.W.3d 279, 284 (Tex.2006).
The parties agree fundamentally on what substantive law applies in this case. Because the Holly Park condominium regime was created before January 1, 1994, it is governed primarily by the Condominium Act (the "Old Act"), codified at chapter 81 of the Texas Property Code. See TEX. PROP.CODE ANN. § 81.0011(a). However, the condominium regime is also governed by the Uniform Condominium Act (the "Uniform Act"), codified at chapter 82 of that code, to the extent provided by section 82.002. Id. § 81.0011(b). Section 82.002, in turn, sets forth a list of specific provisions in the Uniform Act that apply to pre-1994 condominium regimes. Those listed provisions apply only to events and circumstances occurring after January 1, 1994, and they "do not invalidate existing provisions of the declaration, bylaws, or plats or plans of a condominium for which the declaration was recorded before January 1, 1994." Id. § 82.002(c).
Among the listed provisions of the Uniform Act that conditionally apply to the Holly Park condominium regime is section 82.113, which addresses assessments levied by an association against a unit owner. See id. The Old Act does not provide an association with any method of enforcing its owners' obligation to pay assessments, with the single exception of an association's claim for unpaid assessments against sales proceeds when an owner sells her unit. Id. § 81.208. But section 82.113 of the Uniform Act, titled "Association's Lien for Assessments," provides that an assessment levied by an association is a personal obligation of the owner, secured by a continuing lien on the condominium unit. Id. § 82.113(a).
*147 LOWERY'S RIGHT TO JUDICIAL FORECLOSURE
Lowery's claim of a right to judicial foreclosure involves the interplay of statutory and contractual provisions. Specifically, the existence of such a right depends upon the interpretation of section 82.113 and Lowery's own declaration. Not surprisingly, the parties encourage us to interpret these provisions differently.
Lowery's Declaration
Section 3 of Holly Park's bylaws, which have been incorporated fully into the declaration, initially addresses the issue of assessment obligations in a manner consistent with the Old Act. It provides that unpaid assessments will bear interest, and it grants the Association the right to collect those unpaid assessments, plus interest, from sales proceeds in accordance with the Old Act. See id. § 81.208 (codification of TEX.REV.CIV. STAT. ANN. art. 1301a, § 18, specifically referenced in declaration). But Lowery's declaration goes further than the Old Act in this regard. Section 4 states:
In addition to the remedies set forth above, the assessments, together with interest, costs, and reasonable attorney's fees, shall be a charge on the Apartment-Home and shall be a continuing lien upon the Apartment-Home against which such assessment is made. Enforcement of such lien shall be by judicial foreclosure, however, such proceedings shall not be commenced until the assessment is ninety (90) days past due. (Emphasis added.)
Thus, the Association has considerably more authority under the declaration than it would have had under the Old Act alone. The Association can employ the judicial process to foreclose its lien on the unit of an owner in default. Lowery maintains this judicial foreclosure represents the outer limit of the Association's right to enforce its assessment lien.
Section 82.113(e)
The Uniform Act gives an association the right "to foreclose its lien judicially or by nonjudicial foreclosure pursuant to its power of sale created by this chapter or the declaration." Id. § 82.113(e). The Uniform Act also provides that by acquiring a unit, an owner grants the association a power of sale in connection with its lien. Id. § 82.113(d). The Association relies on this statutory grant of the rights to foreclose judicially or nonjudicially and to sell the unit thereafter. It argues these statutory rights trump any limitation in Lowery's declaration.
Lowery argues that subsection (e)'s grant of the right to foreclose judicially or nonjudicially is limited by the language immediately preceding it: "Except as provided by the declaration, an association shall exercise its power of sale pursuant to section 51.002." Id. § 82.113(d). According to Lowery, this sentence means the subsection (e) authority to foreclose judicially or nonjudicially operates "[e]xcept as provided by the declaration." We cannot agree. Subsection (d) deals with the power of sale, not with the foreclosure process that precedes sale of the property. The plain language of the quoted sentenceas well as its placement in subsection (d) indicates the sentence speaks only to the issue of sale, not to the method of foreclosure.
Nor does the reference to section 51.002, governing sale of property pursuant to a contract lien (i.e., a nonjudicial foreclosure), limit the applicability of subsection (d). The sentence concerns the manner in which the newly granted power of sale is to be exercised. The drafters of the Uniform Act looked to this previous legislative construct, which outlines procedures for *148 the sale, including requirements of notice and of a particular time and place for the sale. Id. at 51.002. Section 51.002 safeguards the integrity of the sale of property. Subsection (e)'s final sentence, likewise, provides safeguards for the sale of property: the sale must follow these statutory procedures unless the parties have agreed in their declaration that other procedures will govern. Id. at § 82.113(e). Although the provision means an owner cannot be faced with a sale of her condominium at an undisclosed location at an unknown time, it does not limit an association's right to choose its method of foreclosure.
Conditional Application of Section 82.113(e)
We have concluded that section 82.113(e) represents a broad grant of authority, which is not limited by the language of section 82.113(d). However, the application of section 82.113(e) is not completely unlimited. As we discussed above, section 82.113 applies to the Holly Park condominium regime only because the Uniform Act specifically includes the section in its list of provisions that apply to condominiums created before that act's effective date. See id. § 82.002(c). And that application is clearly conditional: section 82.113 can be applied only to the extent that it does not invalidate existing provisions of Lowery's declaration or bylaws. See id.
The declaration in this case balanced the interests of the parties on the issue of unpaid assessments. It specifically provided the Association with an assessment lien and a method of enforcing that lien, although the Old Act did not provide either of those mechanisms. At the same time, the declaration assured Lowery that she would have her day in court before her property could be sold for unpaid assessments. This was the parties' agreement; it is laid out in an existing provision of the bylaws, incorporated into the declaration. Any application of section 82.113(e) that allowed nonjudicial foreclosure without Lowery's approval would upset the balance for which the parties contracted. It would invalidate an existing provision of the declaration or bylaws and, thus, would violate the property code. See id.[1]
The Association relies on a provision in the Uniform Act stating that "[e]xcept as expressly provided by this chapter, provisions of this chapter may not be varied by agreement, and rights conferred by this chapter may not be waived." Id. § 82.004. But Lowery's declaration did not vary the Uniform Act; the Uniform Act did not even exist until some fifteen years after that declaration was filed. Section 82.004 can only be read to apply to agreements or waivers that occur after the act's effective date, January 1, 1994. And because section 82.004 is not among the provisions listed in section 82.002 as being applicable to regimes created before that date, it does not even apply to the declaration in this case going forward.
CONCLUSION
The Uniform Act provides broad grants of authority to condominium associations to enforce assessment liens as they choose. But for condominium regimes created before the Uniform Act's effective date, the association's authority is limited by specific existing provisions to the contrary in the *149 owner's declaration. Lowery's declaration allows only judicial foreclosure of assessment liens. Thus, section 82.113(d)'s provision allowing nonjudicial foreclosure does not apply in her case. The trial court did not err by granting summary judgment for Lowery. We overrule the Association's single issue and affirm the trial court's judgment.
NOTES
[1] We reject the Association's post-submission suggestion that section 82.002(c) requires section 82.113 (and presumably all sections listed in section 82.002(c)) to apply unless it "invalidate[s] wholly the condominium associations' declarations and bylaws." The statute clearly refers to the invalidation of "existing provisions" of the declaration or bylaws. Id. at 82.002(c). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1370252/ | 507 S.E.2d 191 (1998)
234 Ga. App. 420
GREAT WESTERN BANK et al.
v.
SOUTHEASTERN BANK.
No. A98A1158.
Court of Appeals of Georgia.
September 17, 1998.
Certiorari Denied February 5, 1999.
Oliver, Maner & Gray, Inman G. Hodges, Patricia T. Paul, Savannah, for appellants.
Kent, Worsham & Smart, A. Martin Kent, Hugh M. Worsham, Jr., Savannah, Marvin L. Pipkin, Saint Simons Island, for appellee.
BEASLEY, Judge.
Southeastern Bank filed this action for abusive litigation against Great Western Bank, and against the attorneys who represented Great Western, in its suit against Southeastern in the United States District Court for the Southern District of Georgia. Defendants moved to dismiss on the ground that a state action for abusive litigation may not be brought where the plaintiff had the remedy of Federal Rule of Civil Procedure 11 sanctions available in underlying federal litigation. We granted defendants' application for interlocutory appeal from the trial court's denial of their motion.
In the prior action in federal court based on diversity of citizenship, Great Western charged an automobile dealership and its owners with violations of the state and federal RICO statutes as a result of a check-kiting scheme carried on between accounts at Great Western and Southeastern. Southeastern was added as a defendant based on allegations that it had participated in the scheme. Southeastern provided notice that it intended to pursue remedies under Rule 11 and the Georgia abusive litigation statute if the claims against it were not withdrawn. Southeastern's motion to dismiss was later granted. Rather than seeking relief under Rule 11, it turned to the state court and invoked state law.
Two essential questions are raised: (1) Did the Georgia legislature intend our abusive *192 litigation statute to be applied to federal lawsuits? (2) Did the United States Congress intend Rule 11 and other federal statutes to be the exclusive remedy for the abusive assertion of federal claims in federal courts? We begin our analysis by reviewing various state and federal court decisions, statutes, and rules relating to abusive litigation.
The 1989 enactment of this state's abusive litigation statute was preceded by the passage of OCGA § 9-15-14 in 1986 and the Supreme Court of Georgia decision in Yost v. Torok[1] later the same year. OCGA § 9-15-14 provides for an award of attorney fees and expenses of litigation where there is a complete absence of factual or legal support for a claim, defense or other position[2] or where an attorney or party brought or defended an action that lacked substantial justification.[3] By its terms, OCGA § 9-15-14 only applies to civil actions brought in courts of record in this state.[4]
Shortly before the effective date of OCGA § 9-15-14, the Court in Yost re-defined into a single cause of action the common law torts relative to abusive litigation, i.e., malicious abuse and use of process.[5]Yost adopted the language of OCGA § 9-15-14 but recognized that it governs only two elements of damages for abusive litigation and does not resolve problems relative to other elements of recovery.[6] The Court in Yost stated that the claim it was creating was derivative in nature and had to be brought as part of the underlying proceeding as a compulsory counterclaim or additional claim.[7]
In 1989, the legislature replaced Yost with the abusive litigation statute.[8] It provides for an award of all damages allowed by law against any person who takes an active part in litigation and acts with malice and without substantial justification.[9] Unlike both Yost and OCGA § 9-15-14, the statute creates an independent cause of action and is not procedurally ancillary to the underlying proceeding, except where only attorney fees are sought.[10]
Although the abusive litigation statute applies to civil proceedings generally[11] and does not expressly limit its applicability to actions brought in state court,[12] the statute has an "exclusive remedy" provision, OCGA § 51-7-85, which states: "[N]o claim other than as provided in this article or in Code Section 9-15-14 shall be allowed, whether statutory or common law, for the torts of malicious use of civil proceedings, malicious abuse of civil process, nor abusive litigation.... This article [shall be] the exclusive remedy for abusive litigation."
Nonetheless, we have not held that the abusive litigation statute ousts OCGA § 13-6-11 (authorizing recovery of expenses of litigation by plaintiff where defendant has acted in bad faith, been stubbornly litigious, or has caused plaintiff unnecessary trouble and expense) or OCGA § 9-11-37 (providing sanctions for discovery abuse). And, in 1996, the legislature passed OCGA § 9-11-11.1(b), which authorizes sanctions for abusive litigation that seeks to chill exercise of certain First Amendment rights.
Rule 11 and OCGA § 9-15-14 are analogous. Rule 11 authorizes the court in which an action is brought to award reasonable attorney fees and other expenses where pleadings or motions are presented for an improper purpose or where claims or defenses *193 are without legal or evidentiary support.[13]
1. Since the abusive litigation claim set forth in OCGA § 51-7-80 et seq. is maintainable as an independent cause of action in a court other than the one in which the underlying litigation occurred, it is a substantive tort. But as a statute which functions as the successor to Yost and operates in tandem with OCGA § 9-15-14,[14] it is also a mechanism for the deterrence of abusive litigation in the courts of this state.
Although the statute is not by its terms limited to state court proceedings, its exclusive remedy provision makes clear that the legislature would not have intended it to apply in another forum in which sanctions are available under a device comparable to OCGA § 9-15-14. Given our legislature's failure to expressly repeal OCGA § 13-6-11 and its enactment of OCGA § 9-11-11.1(b), it does not, however, appear that the exclusive remedy section was intended to displace state statutes such as these which apply in limited contexts.
2. Although the question of whether Congress intended federal law to provide the exclusive remedy for abusive federal litigation is moot, we note that our holding in Division 1 is consistent with views espoused by the majority of federal courts which have been presented with claims for abusive litigation under Georgia law.
We have examined seven federal cases in Georgia, consisting of five decisions by United States District Courts for the Northern District (Majik Market v. Best,[15]Union Carbide Corp. v. Tarancon Corp.,[16]Thomas v. Brown,[17]A.L. Williams Corp. v. Faircloth,[18] and Chromatics v. Telex Computer Products[19]), one decision by the District Court for the Middle District (East-Bibb Twiggs Neighborhood Assn. v. Macon-Bibb Planning &c.[20]), and one decision by the Southern District Court (Westinghouse Credit Corp. v. Hall).[21] All of these cases except Hall involved Yost claims.
Only in Chromatics did the court hold that it had jurisdiction of the Yost claim. There, the court determined that a Yost claim may be brought in federal court because it is a substantive cause of action which replaced common laws torts that were federally cognizable.[22] But in A.L. Williams[23] and Best,[24] the courts characterized a Yost claim as a permissive counterclaim under federal law, thereby holding that they were without subject matter jurisdiction of the claim in a non-diversity case. In Tarancon[25] and Thomas,[26] the courts held that a Yost claim may not be raised in federal court even if as a permissive counterclaim it satisfies requirements for diversity jurisdiction, because it is arguably a procedural device which federal courts would not be subject to follow under the Erie doctrine and not a substantive cause of action. The courts in Tarancon,[27]Thomas,[28] and Best[29] reasoned that Rule 11 provides an adequate remedy for abusive litigation in federal courts. The courts reached this conclusion notwithstanding the fact that sanctions available under Rule 11(c)(2) are more limited than those provided by Yost.[30]
*194 Similarly in East-Bibb[31] the court held that Congress specifically addressed the problem of abusive litigation when it promulgated Rule 11, thereby preempting this entire area of the law. In Hall, the court dismissed an abusive-litigation claim on the ground that notice required by OCGA § 51-7-84(a) had not been provided[32] but questioned whether it lacked jurisdiction of the claim under the principles applicable to OCGA § 9-15-14 and Yost.[33]
According to the Restatement (Second) of the Conflict of Laws, the rights and liabilities of the parties for torts of malicious prosecution or abuse of process are determined by the law of the state where the proceeding complained of occurred unless, with respect to the particular issue, some other state has a more significant relationship. The proceeding in this case took place in a federal district court in Georgia rather than in a court of another state, but the considerations set forth in the Restatement are the same. The court of the forum in which the proceeding occurred has the overriding interest in determining questions concerning the sanctions to be imposed for litigation abuses in that proceeding.
Judgment reversed.
POPE, P.J., and RUFFIN, J., concur.
NOTES
[1] 256 Ga. 92, 344 S.E.2d 414 (1986).
[2] OCGA § 9-15-14(a).
[3] OCGA § 9-15-14(b).
[4] OCGA § 9-15-14(a).
[5] 256 Ga. at 95-96, 344 S.E.2d 414 (9-13).
[6] See Yost v. Torok, supra, 256 Ga. at 95(9), (10), 344 S.E.2d 414.
[7] Id. at 96(14), 344 S.E.2d 414.
[8] OCGA § 51-7-80 et seq.
[9] OCGA §§ 51-7-81; 51-7-83(a).
[10] Hallman v. Emory Univ., 225 Ga.App. 247, 248, 483 S.E.2d 362 (1997) (physical precedent only).
[11] OCGA § 51-7-81.
[12] OCGA § 51-7-80(1).
[13] Rule 11(b)(1)-(4).
[14] See OCGA §§ 51-7-83(b), (c); 51-7-85.
[15] 684 F. Supp. 1089 (N.D.Ga.1987).
[16] 682 F. Supp. 535 (N.D.Ga.1988).
[17] 708 F. Supp. 336 (N.D.Ga.1989).
[18] 120 F.R.D. 135 (N.D.Ga.1987).
[19] 695 F. Supp. 1184 (N.D.Ga.1988).
[20] 674 F. Supp. 1475 (M.D.Ga.1987).
[21] 144 B.R. 568 (S.D.Ga.1992).
[22] 695 F.Supp. at 1186.
[23] 120 F.R.D. at 138(1), (2).
[24] 684 F.Supp. at 1090-1092(1)-(4).
[25] 682 F.Supp. at 544-546(19).
[26] 708 F.Supp. at 338-339(4).
[27] 682 F.Supp. at 545.
[28] 708 F.Supp. at 339.
[29] 684 F.Supp. at 1092.
[30] See also Dept. of Transp. v. Franco's Pizza, etc., 200 Ga.App. 723, 728(5), 409 S.E.2d 281 (1991).
[31] 674 F.Supp. at 1476-1477(1).
[32] 144 B.R. at 579(26).
[33] Id., n. 2. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1370244/ | 310 S.W.3d 120 (2010)
LEASE FINANCE GROUP, LLC, Appellant,
v.
Randy CHILDERS, Arlington Motor Cars USA, and JP Morgan Chase Bank, N.A., Appellees.
No. 2-09-010-CV.
Court of Appeals of Texas, Fort Worth.
March 18, 2010.
*122 Mark C. Snyder, Guest & Associates, PC, Irving, TX, for Appellant.
Franklin W. Cram, Franklin W. Cram PC, Mansfield, TX, Truman E. Spring, Jr., Dallas, TX, for Appellees.
Panel: GARDNER, WALKER, and McCOY, JJ.
OPINION
ANNE GARDNER, Justice.
I. Introduction
Appellant Lease Finance Group, LLC ("LFG") appeals a judgment of garnishment in favor of Appellees Randy Childers and Arlington Motor Cars USA[1] against JP Morgan Chase Bank, N.A. ("Chase").[2] LFG contends in three issues that the trial court erred by denying LFG's motion to set aside judgment and for new trial. We reverse and remand.
*123 II. Factual and Procedural Background
AMC obtained a default judgment against LFG on May 2, 2008, in the amount of $24,500. On September 12, 2008, AMC filed an application for writ of garnishment naming Chase as garnishee and seeking to garnish funds held by Chase for LFG. The trial court issued the writ on September 15, 2008, and Chase was served with the writ on September 19, 2008. Chase filed its original answer on October 7, 2008. AMC and Chase then submitted an "agreed" judgment of garnishment to the trial court that was signed by counsel for AMC and Chase; the "agreed" judgment was not signed by LFG.
The trial court signed the judgment of garnishment on October 10, 2008. The judgment stated in the first paragraph:
The Court, having found that Judgment-Defendant [LFG] has been properly served with a copy of the Writ of Garnishment in accordance with Rule 663a and has failed to answer or to otherwise enter an appearance in this garnishment suit, is of the opinion that judgment should be rendered in accordance with the pleadings on file and as set forth herein.
Unaware of the October 10 judgment of garnishment, LFG filed its "Original Answer and Motion to Dissolve Writ of Garnishment" on October 24, 2008. LFG first learned of the October 10 judgment of garnishment at the hearing on its motion to dissolve on November 3, 2008.[3]
LFG thereafter filed a "Motion to Set Aside Judgment in Garnishment and for New Trial" on November 7, 2008, claiming it was not served in strict compliance with the rules of civil procedure. LFG submitted an affidavit by its attorney, Mark Snyder, in support of the motion. Snyder stated in the affidavit that he told AMC's attorney, Franklin Cram, on either October 6 or October 7, 2008, that he would not accept service of the writ of garnishment on behalf of LFG. Snyder also averred that he received a faxed letter from Cram on October 9, 2008. The October 9, 2008 letter enclosed a copy of an undated facsimile to LFG forwarding the writ of garnishment and application for writ of garnishment. Snyder further testified that he was unaware AMC had moved forward with the judgment of garnishment on October 10, 2008, and that he incorrectly calculated LFG's answer day as if responding to service of citation rather than a writ of garnishment.
LFG attached a copy of the October 9, 2008 letter from Cram as an exhibit to Snyder's affidavit. In the October 9, 2008 letter to Snyder, Cram stated: "I am enclosing the fax I sent [to LFG]." Although the enclosed facsimile included the writ of garnishment, the application for writ of garnishment, and an affidavit from Childers, the October 9, 2008 letter did not set forth the date on which AMC sent the facsimile to LFG. Further, the enclosed facsimile is not dated and does not include facsimile-transmission information indicating when AMC sent it; the only facsimile-transmission information relates to the facsimile sent by Cram to Snyder on October 9, 2008, the day before the trial court signed the agreed judgment.
The trial court conducted a hearing on LFG's Motion to Set Aside Judgment in Garnishment and for New Trial on December 5, 2008. Although LFG contested notice under rule 663a in its motion, AMC *124 did not offer evidence of notice at the hearing or in a written response.[4] The trial court orally denied LFG's motion at the end of the hearing,[5] and this appeal followed.
III. Service of Writ of Garnishment on LFG
In its first and second issues, LFG argues the trial court erred by denying its motion to set aside judgment and for new trial because there is no evidence in the record that LFG was properly served with notice of the writ of garnishment, or, alternatively, the notice LFG received was untimely.[6] In response, AMC contends the trial court correctly denied LFG's motion because the judgment recites notice was proper under rule 663a, there is no minimum notice required under rule 663a, and LFG failed to prove that it was not served in compliance with rule 663a.[7]
A. Standard of Review
A trial court's order denying a motion to set aside a default judgment or for new trial is reviewed under an abuse of discretion standard. Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex.1984); Martinez v. Martinez, 157 S.W.3d 467, 469 (Tex.App.-Houston [14th Dist.] 2004, no pet.). The trial court abuses its discretion if it acts without reference to any guiding rules or principles. Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex.1997).
B. Applicable Law
"A writ of garnishment impounds the alleged money, property, or credits of the debtor." Mendoza v. Luke Fruia Invs., Inc., 962 S.W.2d 650, 651 (Tex.App.-Corpus Christi 1998, no pet.) (citing Beggs v. Fite, 130 Tex. 46, 52, 106 S.W.2d 1039, 1042 (1937)). "The writ of garnishment affords a harsh remedy. It was not known to the common law, but is purely statutory." Walnut Equip. Leasing Co. v. J-V Dirt & Loam, 907 S.W.2d 912, 914 (Tex. App.-Austin 1995, writ denied). "For this reason, garnishment proceedings cannot be sustained unless they strictly conform to the statutory requirements and related rules." Id. Specifically, "[t]he garnishor must strictly comply with the requirement that it serve the debtor, and its failure to comply is not a mere irregularity." Id. "Without proper service of the writ on the debtor, no control or custody of his property can be gained by his answer." Mendoza, 962 S.W.2d at 652.
Rule 663a of the rules of civil procedure states, in relevant part: "The defendant shall be served in any manner prescribed for service of citation or as provided in Rule 21a with a copy of the writ of garnishment, the application, accompanying affidavits and orders of the court as soon as practicable following the service of the writ." Tex.R. Civ. P. 663a; *125 see also Hering v. Norbanco Austin I, Ltd., 735 S.W.2d 638, 641 (Tex.App.-Austin 1987, writ denied). Actual knowledge or a voluntary appearance by the debtor is insufficient and does not waive rule 663a's requirement of service of the writ. Walnut Equip. Leasing Co., 907 S.W.2d at 914; Hering, 735 S.W.2d at 642; see also Requena v. Salomon Smith Barney, Inc., No. 01-00-00783-CV, 2002 WL 356696, at *3 (Tex.App.-Houston [1st Dist.] March 7, 2002, no pet.); Mendoza, 962 S.W.2d at 652. Although rule 663a does not entitle a debtor to a minimum of twenty days' notice as with service of an original petition, Mullins v. Main Bank & Trust, 592 S.W.2d 24, 26 (Tex.Civ.App.-Beaumont 1979, no writ), the debtor does have the right to service of the writ of garnishment and related documents "as soon as practicable following the service of the writ" on the garnishee. Tex.R. Civ. P. 663a.
C. Analysis
LFG argues the trial court erred by denying its motion to set aside and for new trial because there is no evidence in the record that LFG was served with notice of the writ of garnishment, or, alternatively, that the notice LFG received was untimely. Before addressing LFG's issues, we must first address AMC's contentions that there is sufficient evidence of service because the judgment recites service was proper under rule 663a, that there is no minimum notice required under rule 663a, and that LFG had the burden to prove it was not properly served under rule 663a.
1. No Presumption of Service from Recitation in Judgment
AMC contends there is sufficient evidence of service because the judgment recites LFG was served in compliance with rule 663a. Although a recitation of due notice in a judgment is some, but not conclusive, evidence of proper notice of trial settings and hearings, see Osborn v. Osborn, 961 S.W.2d 408, 411 (Tex.App.-Houston [1st Dist.] 1997, pet. denied), the rule does not apply to default judgments. In an attack upon a default judgment, a recitation of due service in the judgment does not lead to a presumption of due service. Morris v. Zesati, 162 S.W.3d 669, 671 (Tex.App.-El Paso 2005, no pet.) (citing McKanna v. Edgar, 388 S.W.2d 927, 929 (Tex.1965)). Instead, the plaintiff must "prove that the defendant was served in the required manner." Id.
Here, the judgment in garnishment is analogous to a default judgment because the trial court signed the judgment in garnishment before LFG answered or otherwise appeared. See Tex.R. Civ. P. 239 (providing trial court may render default judgment on the pleadings against a defendant that has not filed an answer); see also Crowe v. Ware, No. 05-96-01294-CV, 1998 WL 258398, at *1-2 (Tex.App.-Dallas May 22, 1998, no pet.) (treating judgment in garnishment as default judgment on appeal by judgment debtor claiming lack of service under rule 663a). While the judgment debtor is not a necessary party to the garnishment action, the rules require that he be served under rule 663a. Hering, 735 S.W.2d at 642 (citing Horseley, Collecting on Judgments (State Bar of Texas Professional Development Program 1981)).
"Rule 663a is unambiguous in its requirement that the debtor be given notice of the garnishment and of his rights to regain his property." Id. at 641. "[G]arnishment proceedings cannot be sustained unless they strictly conform to the statutory requirements and related rules." Walnut Equip. Leasing Co., 907 S.W.2d at 914. "[N]o control or custody of [a judgment debtor's] property can be gained by his answer" without proper service of the writ. Mendoza, 962 S.W.2d at 652. The *126 creditor's failure to strictly comply with the pertinent rules "is fatal to its judgment in the garnishment action." Hering, 735 S.W.2d at 641 (emphasis in original). We believe the rule applicable to default judgments should apply to judgments in garnishment and hold that a recitation of due service in a judgment in garnishment does not lead to a presumption of due service. See generally Morris, 162 S.W.3d at 671. In this case, LFG attacked the default judgment in garnishment by contending AMC did not serve LFG in compliance with rule 663a. Thus, even though the judgment in garnishment recites that LFG was properly served under rule 663a, there is no presumption of valid service.
2. Rule 663a Requires Service As Soon As Practicable
AMC next contends rule 663a does not establish a prescribed period in which a garnishor must serve a writ of garnishment on the debtor. We disagree. Rule 663a specifically requires service on the judgment debtor "as soon as practicable following service of the writ" on the garnishee. Tex.R. Civ. P. 663a. "As soon as practicable" is not susceptible to a definitive definition equally applicable in all cases, but we note that a fifteen-day delay before serving the debtor does not satisfy the strict requirements of rule 663a. See Requena, 2002 WL 356696, at *4. Thus, we reject AMC's contention that rule 663a does not establish a prescribed period in which the garnishor must serve the debtor.
3. AMC had the Burden to Prove Proper Service
AMC also argues the trial court correctly denied LFG's motion to set aside judgment and for new trial because LFG failed to prove it was not served in compliance with rule 663a. In doing so, AMC incorrectly assumes LFG had the burden to prove it was not properly served under the rule.
Rule 663a permits service on the debtor "as provided in Rule 21a." Tex.R. Civ. P. 663a. Under rule 21a, all notices, other than citation, may be served by delivering a copy to the party either in person, by agent, or by certified or registered mail to the party's last known address or by fax to the party's current telecopier address. Tex.R. Civ. P. 21a. "A certificate by a party or an attorney of record, or the return of an officer, or the affidavit of any person showing service of a notice shall be prima facie evidence of the fact of service." Id. Rule 21a further provides that "the party or attorney of record shall certify to the court compliance with this rule in writing over signature and on the filed instrument." Id. (emphasis added); see also Crowe, 1998 WL 258398, at *1 (noting certificate of service on file at time of garnishment judgment established service by regular mail although certified mail was returned unopened).
However, where the record does not contain a certificate of service, an officer's return, or an affidavit showing service of notice, there is no presumption of receipt, and the party contending it properly sent notice has the burden of proving proper notice under rule 21a. Mathis v. Lockwood, 166 S.W.3d 743, 745 (Tex.2005); see Crowe, 1998 WL 258398, at *2 (citing Walnut, 907 S.W.2d at 915 and Hering, 735 S.W.2d at 642 and holding rule 663a requires proof that debtor was properly served under rule 21a). Because AMC did not file a certificate of service, an officer's return, or an affidavit showing service, AMC had the burden to prove proper service under rule 21a. Mathis, 166 S.W.3d at 745.[8]
*127 4. AMC Did Not Prove It Served LFG As Soon As Practicable
We next consider whether the record contains sufficient evidence that AMC served LFG in compliance with rule 663a. It is undisputed that AMC did not serve LFG in a manner prescribed for service of citation. Thus, if AMC properly served LFG, AMC must have done so "as provided in Rule 21a." See Tex.R. Civ. P. 663a. In this case, the combination of rules 21a and 663a required AMC to deliver a copy of the writ of garnishment to either LFG (or its duly authorized agent) or LFG's attorney of record as soon as practicable after service on the garnishee on September 19, 2008. See Tex.R. Civ. P. 21a, 663a.
First, AMC has not shown that it served LFG by serving LFG or its duly authorized agent as soon as practicable. The only evidence of service in the record is the October 9, 2008 letter and its enclosed facsimile. The October 9, 2008 letter states, "I am enclosing the fax I sent to [LFG]," but it does not set forth the date AMC claims it sent the enclosed facsimile to LFG. The enclosed facsimile is not dated, and it does not include any facsimile-transmission information to indicate when AMC sent it. While the lack of a date on the facsimile does not necessarily defeat the fact of service under rule 21a, the lack of a date does mean AMC has not shown that it served LFG "as soon as practicable" as required by rule 663a. See Tex.R. Civ. P. 663a.
Second, AMC has not shown that it served LFG as soon as practicable through LFG's attorney of record. The record reflects AMC's attorney sent the undated facsimile as an enclosure to the October 9, 2008 letter to Snyder. Assuming without deciding that Snyder was LFG's attorney of record on October 9, 2008,[9] we note that the garnishee, Chase, was served on September 19, 2008, and that the trial court signed the judgment in garnishment on October 10, 2008. Thus, AMC served a copy of the writ of garnishment on LFG's attorney twenty days after service on the garnishee and one day before the trial court signed the judgment in garnishment. However, nothing in the record explains the twenty-day delay in service. Under these circumstances, we hold AMC failed to prove that it served LFG through its attorney "as soon as practicable" as required by rule 663a. Tex.R. Civ. P. 663a; see also Requena, 2002 WL 356696, *3-4 (holding garnishor did not serve judgment debtor "as soon as practicable" where garnishor could have reasonably served judgment debtor fifteen days before it did).
AMC's failure to prove it strictly complied with rule 663a is fatal to its judgment in garnishment. "It has long been the law of this State that if a judgment-creditor intends to avail himself of the State's aid in effecting a deprivation of property, he must strictly comply with the pertinent rules." Hering, 735 S.W.2d at 641. Because the record does not reflect service of *128 the writ of garnishment on LFG as soon as practicable in compliance with rule 663a, the trial court abused its discretion in denying LFG's motion to set aside and for new trial. We sustain LFG's first and second issues.[10]
IV. Conclusion
Having sustained LFG's first and second issues, we reverse the trial court's judgment and remand for further proceedings consistent with this opinion.
WALKER, J., filed a dissenting opinion.
SUE WALKER, Justice, dissenting.
I respectfully dissent.
The final garnishment judgment at issue recites that the judgment-debtor in the underlying garnishment proceeding, Appellant Lease Finance Group, LLC (LFG) was given proper notice of the garnishment proceeding by the judgment creditors, Appellees Randy Childers and Arlington Motor Cars USA (collectively referred to herein as AMC). The judgment specifically states that "[t]he Court... found that Judgment-Defendant Lease Finance Group, LLC has been properly served with a copy of the Writ of Garnishment in accordance with Rule 663a." LFG filed a motion for new trial. LFG's motion for new trial does not allege that it failed to receive noticeat best, LFG's motion for new trial claims that the notice it received was defective in some unspecified way.[1]
The trial court conducted a hearing on LFG's motion for new trial. At that hearing, LFG bore the burden to establish that it was entitled to a new trialthat is, to offer evidence supporting its global allegation made in LFG's motion for new trial that its attorney did not believe that the notice given to LFG was valid.[2] LFG *129 failed to do so. Although provided with the opportunity, LFG did not call any LFG employee to testify at the motion for new trial hearing that LFG did not receive notice. Nor did LFG present to the trial court an affidavit from any LFG officer or employee affirmatively stating that LFG had not received notice. LFG offered no evidence in support of its motion for new trial.
LFG instead relied exclusively on an affidavit of its current attorney, Mark Snyder,[3] that was attached to LFG's motion for new trial. Snyder's affidavit does not allege that LFG did not receive notice. Snyder's affidavit indicates the opposite that copies of the required documents were faxed directly to LFG at some time prior to the signing of the judgment of garnishment.[4]See Tex.R. Civ. P. 663a (authorizing service of the writ of garnishment on the judgment debtor as provided in rule 21a); Tex.R. Civ. P. 21a (authorizing service by "telephonic document transfer to the recipient's current telecopier number").
Although Snyder's affidavit does aver that the notice given to LFG wasin some unidentified waynot in compliance with rule 663a of the rules of civil procedure, at the motion for new trial hearing LFG offered no explanation of exactly how the notice was purportedly not in compliance with rule 663a and offered no evidence in support of this contention. Assuming this broad, global allegation that notice did not comply with rule 663a preserved a complaint that notice to LFG was not provided as soon as practicable, LFG nonetheless failed to introduce any evidence of this alleged fact. See Tex.R. Civ. P. 663a (requiring notice be given to judgment debtor "as soon as practicable following the service of the writ"). Because LFG did not prove or swear on what date it received the faxed notice (nor did LFG deny receiving the faxed notice), no evidence exists in the record of the date on which LFG received the faxed notice. In the absence of evidence of the date on which LFG received the faxed notice, no evidence exists that LFG did not receive it as soon as practicable.[5]
*130 Because LFG failed to meet its burden of offering evidence, or at least a sworn allegation, that it either did not receive the notice faxed to it or that the notice was faxed to it on a date certainthat was not as soon as practicable, no evidence exists in the record before us that is contrary to the judgment's recitation of proper notice. In the absence of evidence in the record contrary to the judgment's recitation of proper notice, we are required to presume that proper notice was given.[6]
The majority refuses to apply this presumption, claiming the garnishment judgment is akin to a default judgment. I cannot agree; under the rules of civil procedure, a garnishment judgment entered in the absence of an answer from a judgment debtor is not a default judgment. Under the rules of civil procedure, LFG, the judgment debtor, is not a party to the garnishment suit. See Tex.R. Civ. P. 659 (providing that garnishment suit is docketed with plaintiff as plaintiff and garnishee as defendant). Under the rules of civil procedure, LFG as the judgment debtor does not file an answer in the garnishment suit. See Tex.R. Civ. P. 665 (providing that the answer filed by the garnishee shall be under oath); Tex.R. Civ. P. 667 (providing default judgment may be entered if garnishee, not judgment debtor, fails to file answer). And finally, the majority's holding that every garnishment proceeding in which a judgment debtor chooses not to participate is a "default judgment" thwarts the very purpose underlying garnishment proceedingsto permit judgment creditors to collect monies owed to them pursuant to a final, already-litigated judgment.
Because LFG failed to meet its initial motion for new trial burden of presenting evidence or a sworn allegation that LFG did not receive notice or the date on which LFG did receive notice so that the trial court could determine whether that notice was provided as soon as practicable, I would hold that the trial court did not abuse its discretion by denying LFG's motion for new trial. I would affirm the trial court's judgment of garnishment. Because I am in the minority, I respectfully dissent.
NOTES
[1] We will collectively refer to Appellees Childers and Arlington Motor Cars USA as "AMC."
[2] Chase, the garnishee in the trial court, is an appellee in this case but did not file a brief.
[3] There is no reporter's record from the November 3 hearing or written order on LFG's motion to dissolve writ of garnishment. However, the trial court's docket sheet indicates the trial court denied LFG's motion to dissolve writ of garnishment.
[4] AMC filed a written response to LFG's motion on the day of the hearing, but AMC did not submit any evidence with the response.
[5] The trial court stated: "I'm going to deny the motion for new trial and let the parties proceed on the bill of review question." The bill of review proceeding filed by LFG is not before this court, and we express no opinion on the merits of that proceeding.
[6] We address LFG's first and second issues together because they involve the same questions of law and fact.
[7] AMC also argues LFG waived its notice arguments by not raising them in its motion to set aside and for new trial. We disagree. LFG specifically stated on the first page of its motion that a "judgment in garnishment is subject to being set aside" where the "judgment debtor has not been give[n] proper notice of a garnishment pursuant to Rule 663a of the Texas Rules of Civil Procedure" and that "[t]he notice allegedly given to [LFG] did not comply with Rule 663a."
[8] In this appeal from the trial court's denial of LFG's motion to set aside judgment and for new trial, we express no opinion as to which party bears the burden of proof on a motion under rule 664a. See Tex.R. Civ. P. 664a (permitting trial court to dissolve or modify writ of garnishment upon sworn motion by judgment debtor or other intervening party claiming interest in garnished property). Our holding applies only to proof of timely service under rule 663a "as provided in Rule 21a" in the absence of a certificate of service, an officer's return, or other prima facie proof of service. See Tex.R. Civ. P. 663a, 21a.
[9] It is unclear from the record whether LFG, as of October 9, 2008, had retained Snyder to represent LFG in the garnishment action or whether LFG had only retained Snyder to file a bill of review to attack the underlying judgment. Because it does not affect our holding, we assume Snyder represented LFG in the garnishment action as of October 9, 2008.
[10] Because we sustain LFG's first and second issues and hold AMC did not serve LFG in compliance with rule 663a, we need not address LFG's third issue in which it contends it satisfied the second and third elements of the Craddock test for overturning default judgments. See Lopez v. Lopez, 757 S.W.2d 721, 723 (Tex. 1988) (where there is no actual or constructive notice of a trial setting, a party need not show "he had a meritorious defense as a condition to granting his motion for new trial"); In re Marriage of Runberg, 159 S.W.3d 194, 200 (Tex.App.-Amarillo 2005, no pet.) (applying Lopez to both the second and third elements of the Craddock test).
[1] LFG's motion for new trial states that "[w]here a judgment debtor has not been give [sic] proper notice of a garnishment pursuant to Rule 663a of the Texas Rules of Civil Procedure, the judgment in garnishment is subject to being set aside." And the motion alleges that LFG's attorney Mark Snyder "did not believe that a valid notice of the Garnishment Action had been made upon [LFG] in that the notice as represented to him by Plaintiffs' counsel did not comply with Rule 663a of the Texas Rules of Civil Procedure." Nowhere in LFG's motion for new trial does it allege that it received no notice.
[2] The majority inexplicably places the initial burden of proof at LFG's motion for new trial hearing on the judgment creditor, AMC. It is true that once the party claiming lack of notice or service (here LFG) makes a sworn allegation of lack of notice or comes forward with evidence or testimony supporting an allegation of lack of notice, then the burden shifts to the opposing party (here AMC) to prove proper service or notice. See, e.g., Mathis v. Lockwood, 166 S.W.3d 743, 745 (Tex.2005) (explaining that "testimony by Lockwood's counsel that notice was sent did not contradict Mathis's testimony that notice was never received") (emphasis added). But the initial burden of proof is upon the party claiming lack of notice; in Mathis, the party claiming lack of notice met his initial burden by providing testimony that notice was never received. Id. Likewise, contrary to the majority's position, notice is not automatically defective for the failure to include a rule 21a certificate of service; in this situation the party claiming lack of notice must still meet his initial burden of proof by coming forward with a sworn allegation or evidence that notice was not received before the burden shifts to the opposing party to prove proper notice was given. Id.; see also Campsey v. Campsey, 111 S.W.3d 767, 771-72 (Tex.App.-Fort Worth 2003, no pet.) (explaining it is the appellant's initial burden to overcome the presumption of proper notice and that the presumption "may not be discharged by mere allegations, unsupported by affidavits or other competent evidence"); Hanners v. State Bar of Tex., 860 S.W.2d 903, 908 (Tex.App.-Dallas 1993, no writ) (same). LFG did not meet this initial burden.
[3] Snyder refused to accept rule 663a service on LFG, claiming he was not LFG's attorney in the garnishment proceeding at that time. Apparently, Snyder subsequently became LFG's attorney in the garnishment proceeding as he swore in his affidavit that he had miscalculated LFG's response date in the garnishment proceeding and filed a motion for new trial along with his affidavit for LFG in the garnishment proceeding.
[4] Specifically, Snyder swore that
Plaintiffs' attorney transmitted a fax to me on October 9, 2008, which he advised was the fax transmittal of notice to the Garnishment to [LFG]....
....
The alleged transmittal [sic] the judgment debtor, as contained in the fax did not comply with the requirements of Rule 663a, but was instead merely a copy of an undated fax transmittal dated [sic] the Writ of Garnishment and the Application for Writ of Garnishment.
[5] In the only case cited by the majority, the judgment debtor established a date on which he received the required notice; then the trial court held that the notice was not provided as soon as practicable. See Requena v. Salomon Smith Barney, No. 01-00-00783-CV, 2002 WL 356696, at *4 (Tex.App.-Houston [1st Dist.] Mar. 7, 2002, no pet.) (not designated for publication) (explaining that the judgment debtor "was not served with a copy of the writ until June 27, 2000, a day after the trial court began its hearing"). Here, no date of receipt was proved by LFG; the majority's holding that the notice faxed to LFG was not provided as soon as practicable is pure speculation.
[6] See, e.g., Gen. Elec. Capital Assurance Co. v. Jackson, 135 S.W.3d 849, 853 (Tex.App.-Houston [1st Dist.] 2004, pet. denied) (explaining that court order, which recited that all persons entitled to citation were properly cited, was entitled to presumption of correctness in absence of evidence to the contrary); In re B.D., 16 S.W.3d 77, 80 (Tex.App.-Houston [1st Dist.] 2000, pet. denied) (applying presumption of regularity when the judgment indicated that notice had been given and there was no evidence to the contrary in the record); Osborn v. Osborn, 961 S.W.2d 408, 411-13 (Tex.App.-Houston [1st Dist.] 1997, writ denied) (explaining that recitation of proper notice in judgment constitutes some, but not conclusive, evidence that proper notice was given). | 01-03-2023 | 10-30-2013 |
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