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https://www.courtlistener.com/api/rest/v3/opinions/1313459/
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591 N.W.2d 404 (1998)
232 Mich. App. 587
ADAMS OUTDOOR ADVERTISING, Plaintiff-Appellee, and
Outdoor Advertising Association of Michigan, Amicus Curiae,
v.
CITY OF EAST LANSING, Defendant-Appellant.
Docket No. 200655.
Court of Appeals of Michigan.
Submitted May 5, 1998, at Grand Rapids.
Decided November 20, 1998, 9:20 a.m.
Released for Publication February 16, 1999.
*405 Fraser Trebilcock Davis & Foster, P.C. (by Michael H. Perry), Lansing, for Adams Outdoor Advertising.
McGinty, Jakubiak, Frankland, Hitch & Henderson, P.C. (by Thomas M. Hitch), East Lansing, for the city of East Lansing.
Bodman, Longley & Dahling LLP (by James J. Walsh), Detroit, amicus curiae for Outdoor Advertising Ass'n of Mich.
Before SAWYER, P.J., and MICHAEL J. KELLY and SMOLENSKI, JJ.
SMOLENSKI, J.
Defendant city of East Lansing appeals as of right a final order granting declaratory and injunctive relief in favor of plaintiff Adams Outdoor Advertising. We affirm in part, reverse in part, and remand.
Adams is a company engaged in the business of owning off-premises billboards[1] and *406 leasing the space on these billboards for advertising purposes. In East Lansing, Adams has billboards placed at three different locations. Specifically, at 111 North Harrison and 1108 East Grand River, Adams has three and two, respectively, billboards located on building rooftops pursuant to leases. And, on a narrow strip of property owned by Adams at 1502 West Grand River (the Point), Adams has a total of seven sign faces on five freestanding billboards. All the free-standing billboards at the Point measure twelve feet by twenty-five feet (three hundred square feet) except for one "rotary" or "bulletin" billboard, which measures fourteen feet by forty-eight feet.
In 1975, East Lansing adopted a comprehensive sign code. Under the code, Adams' previously lawful rooftop and freestanding billboards became nonconforming. Specifically, Adams' rooftop billboards were prohibited by the code. The seven sign faces at the Point exceeded the number of signs permitted at this location under the code and violated the code's spacing and setback requirements. In addition, the rotary billboard at the Point exceeded the code's height and three hundred square foot maximum display area requirements. Subsection 8.39(8) of the code, as subsequently amended, gave Adams until May 1, 1987, to eliminate its nonconforming signs:[2]
8.39 Alterations to Signs. Any existing sign on the effective date of this Chapter or any amendment hereto, which does not at that time comply with all of the provisions hereof, including any amendment:
* * *
(8) Shall not be placed, maintained, or displayed by any person on or after May 1, 1987.
The code did not provide for the payment of any compensation for the removal of Adams' nonconforming billboards.
In early 1987, East Lansing informed Adams that it would be cited for a violation if its nonconforming signs were still in place after the May 1, 1987, deadline. After Adams applied for and was denied a variance by East Lansing's Building Board of Appeals, Adams and others filed suit against East Lansing, seeking declaratory and injunctive relief.
As relevant to this case, Adams contended that subsection 8.39(8) was enacted without statutory authority and constituted a taking without just compensation. The trial court subsequently found that subsection 8.39(8) was enacted without legislative authority and granted Adams' motion for partial summary disposition. This Court affirmed. Adams Outdoor Advertising v. East Lansing, unpublished opinion per curiam, decided April 20, 1990 (Docket Nos. 110816-110818).
In Adams Outdoor Advertising v. East Lansing, 439 Mich. 209, 212, 219, 483 N.W.2d 38 (1992) (Adams I ), our Supreme Court reversed the decision of this Court on the ground that East Lansing had the authority under subsection 4i(5) of the home rule city act, M.C.L. § 117.4i(5); MSA 5.2082(5),[3] to enact its sign code, including subsection 8.39(8). The Court remanded to the trial court to resolve the taking issue.
On remand, the taking issue proceeded to a trial. At the outset of the trial, the court initially ruled that subsection 8.39(8), as applied to Adams' rooftop billboards, constituted a taking because Adams was deprived "of all economically viable use of the property...." *407 The court ruled that it would defer its ruling with respect to Adams' freestanding billboards at the Point until it heard the evidence with respect to the amount of economic loss that Adams would sustain at this location as a result of complying with the sign code.
Although emphasizing that East Lansing had not offered to pay any compensation and that Adams was not seeking any compensation but, rather, was seeking a ruling regarding the enforceability of subsection 8.39(8), Adams offered the testimony of an expert in the appraisal of off-premises billboards for the purpose of establishing the amount of economic loss that it would sustain. Adams' expert testified that he had used the income capitalization method to arrive at an estimated value of each of Adams' three sign locations in East Lansing as of November 1996. With respect to the Point, the expert testified that he estimated that the present gross income for the seven sign faces at the Point was approximately $64,500, with a significant portion of this figure (approximately $33,000) attributable to the income produced by the rotary billboard. The expert testified that he understood that under the code Adams would still be permitted to maintain four sign faces at the Point. The expert testified that in going from seven sign faces to four sign faces Adams would lose approximately $44,500 in gross income, which, after applying a 32.6 percent expense ratio (approximately $14,500 in estimated expenses), yielded a loss of $30,000 in net income. The expert testified that $30,000 net income capitalized at a ten percent rate of return yielded an estimated loss at the Point of $300,000. The expert testified that he estimated that the value of the losses that Adams would incur at 111 North Harrison and 1108 East Grand River was $57,500 and $55,000 respectively.
Following the proofs, the court ruled that subsection 8.39(8), as applied to the billboards located at the Point, constituted a taking. Reducing the capitalization rate from ten percent to seven percent,[4] the court determined that the loss to Adams at the Point, 111 North Harrison, and 1108 East Grand River was $200,000, $40,250, and $38,500, respectively. The court subsequently entered a final order (1) declaring that subsection 8.39(8), as applied to Adams' billboards, constituted a taking of Adams' property without just compensation in violation of the United States and Michigan Constitutions, and (2) permanently enjoining East Lansing from enforcing subsection 8.39(8) against Adams. East Lansing appeals as of right from this order.
On appeal, East Lansing raises numerous grounds in support of its contention that the trial court erred in determining that subsection 8.39(8), as applied to Adams' billboards, constitutes a taking. Specifically, East Lansing argues that no taking has occurred because the billboards are personal property and the United States Supreme Court has recognized that "in the case of personal property, by reason of the State's traditionally high degree of control over commercial dealings, [an owner] ought to be aware of the possibility that new regulation might even render his property economically worthless...." Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1027-1028, 112 S. Ct. 2886, 120 L. Ed. 2d 798 (1992). This argument demonstrates the importance of precisely identifying the property interest claimed to have been taken.
In In re Acquisition of Billboard Leases & Easements, 205 Mich.App. 659, 661, 517 N.W.2d 872 (1994), governmental entities had condemned not only billboards but also leaseholds on which the billboards were located. The issue on appeal to this Court was the determination of just compensation for these property interests. Id. With respect to the condemned billboards, there was no dispute that just compensation was owed for their full value, and the parties apparently agreed that "this can be determined by estimating the cost of the billboards as `new less depreciation.' "Id. at 661, n. 1, 517 N.W.2d 872. With respect to the leaseholds on which the *408 billboards were located, this Court recognized that "[r]egardless of whether a billboard is classified as personal property or a fixture, the leaseholds and air rights that were taken from defendants are real property. This Court has previously held that income capitalization is a proper method of estimating the value of income-producing real property." Id. at 662, 517 N.W.2d 872.
In Adams' trial brief in this case, Adams specifically relied on Acquisition of Leases for its assertions that the billboards were income-producing real property and that the income capitalization method was the proper method for determining the value of this property. At the outset of the trial, the court ruled as follows:
The Court finds no merit to Defendant's assertion that there is no right to compensation for leasehold interests such as those possessed by Adams Outdoor Advertising....
As to the proper method of calculating the amount of compensation, the Court finds that the income capitalization method, that is the present value [sic] the future cash flows, is the proper method to be employed.
In light of these rulings and this Court's decision in Acquisition of Leases, supra, Adams then successfully moved to have excluded from evidence exhibits pertaining to the cost and depreciation of the billboards, which, we note, would be relevant in establishing the value of the billboards themselves. See Acquisition of Leases, supra at 661, n. 1, 517 N.W.2d 872.
Thus, despite whatever imprecise characterizations have been used in this case, i.e., that the property taken by subsection 8.39(8) is Adams' "billboards," a review of the record makes it abundantly clear that this case was tried on the theory that the property interests claimed to have been taken by East Lansing's sign code are Adams' real property interests, whether leasehold or fee simple, in the places where its billboards are located. East Lansing's argument that no taking occurred because the billboards are personal property misapprehends the nature of the property interests claimed to have been taken in this case and is therefore rejected.
Next, East Lansing contends that our Supreme Court's decision in Adams I makes clear that its power to regulate billboards under the home rule city act is not limited to the same extent that its power to zone is restricted under the zoning enabling act, M.C.L. § 125.581 et seq.; MSA 5.2931 et seq., with respect to nonconforming uses. We agree. See Adams I, supra at 216-217, 483 N.W.2d 38. East Lansing also contends that its sign code, which was enacted for safety and aesthetic reasons, is a valid exercise of its police power and that Adams is not immune from these ordinances. Again, we have no quarrel with this proposition. See Queenside Hills Realty Co., Inc v. Saxl, 328 U.S. 80, 83, 66 S. Ct. 850, 90 L. Ed. 1096 (1946). East Lansing thus concludes that it can enforce its sign code against Adams even if it means the complete elimination of off-premises advertising and that no claim of a taking can be sustained. We cannot agree with this conclusion. Rather, "`[t]he general rule at least is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.'"K & K Constr., Inc. v. Dep't of Natural Resources, 456 Mich. 570, 576, 575 N.W.2d 531 (1998) (quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S. Ct. 158, 67 L. Ed. 322 [1922] ). More specifically, even if a land use regulation substantially advances a legitimate state interest, a taking may be found where "the regulation denies an owner economically viable use of his land." K & K, supra at 576, 575 N.W.2d 531. Thus, we reject East Lansing's argument that it can enforce its sign code against Adams and no claim of a taking can be maintained. In other words, even though East Lansing has the legislative authority to enact its sign code and even though the code has a valid police power purpose, if the code goes too far in regulating Adams' use of its real property, a taking for which compensation is due will be recognized. K & K, supra.
Next, East Lansing contends that subsection 8.39(8) does not constitute a taking as applied to Adams' signs because Adams was given a reasonable period to *409 comply with the sign code and recover its investment. In making this argument, East Lansing relies on Art Neon Co. v. City & Co. of Denver, 488 F.2d 118 (C.A.10, 1973), and other cases that have found that ordinances analogous to subsection 8.39(8) do not constitute a taking of property without just compensation. However, in Adams I, supra at 234-237, 483 N.W.2d 38, Justice Levin, in a separate opinion, rejected the rationale of these cases:
The courts approving amortization [[5]] as a reasonable imposition on private property rights have based their conclusions upon policy arguments of dubious merit. Further, the authorities to the contrary, while less numerous, are more persuasive.
Authorities holding that amortization is constitutionally permissible invariably begin by acknowledging the principle that nonconforming uses are not subject to immediate termination.[[6]] Zoning enactments have traditionally been prospective in effect, partly in the expectation, it has been said, "that existing nonconforming uses would be of little consequence and ... would eventually disappear." But, as a commentator observed, "the number of nonconforming uses did not decrease, but rather increased due to indifferent or unsympathetic administration of the zoning ordinances, incorrect granting of variances, and influential political pressures."
The impetus for amortization may be communal frustration with how long it has taken nonconforming uses to "eliminate themselves." The Supreme Court of Missouri [in Hoffmann v. Kinealy, 389 S.W.2d 745, 750 (Mo., 1965)] explained that some communities have addressed the problem of persistent, nonconforming uses by recourse to legislative legerdemain:
"[Z]oning zealots have been casting about for other methods or techniques to hasten the elimination of nonconforming uses. In so doing, only infrequent use has been made of the power of eminent domain, primarily because of the expense of compensating damaged property owners, but increasing emphasis has been placed upon the amortization or tolerance technique which conveniently bypasses the troublesome element of compensation."
Courts in states passing favorably on amortization "reason" that, where the private loss to property owners is outweighed by the public benefit of amortizing nonconforming uses, there is no constitutional difficulty if the period of amortization is reasonable.[[7]] A reasonable amortization period has been said to be one that allows affected property owners adequate time to recover their investment. In this connection, reference is sometimes made to the economic life of the property, such as a "depreciation" period, either in financial accounting or tax accounting terms.[[8]]
While a community is surely empowered to exercise police power in furtherance of public heath, safety, and general welfare, and "[e]very exercise of the police power is apt to affect adversely the property interest of somebody," the notion that the right or need of the community to exercise its police power may somehow "outweigh" private property interests runs counter to the constitutional limitation requiring payment of just compensation for a taking.
The introduction of a temporal component does not alter the analysis. As the court in [Hoffmann, supra at 753] said:
"To our knowledge, no one has, as yet, been so brash as to contend that such a pre-existing lawful nonconforming use properly might be terminated immediately. In fact, the contrary is implicit in the amortization technique itself which would validate a taking presently unconstitutional by the simple expedient of postponing such taking for a `reasonable' time. All of this leads us to suggest, as did the three dissenting justices in Harbison v. City of Buffalo [4 N.Y.2d 553, 566-567, 176 *410 N.Y.S.2d 598, 152 N.E.2d 42 (1958) ], that it would be a strange and novel doctrine indeed which would approve a municipality taking private property for public use without compensation if the property was not too valuable and the taking was not too soon, and prompts us to repeat the caveat of Mr. Justice Holmes in [Pennsylvania Coal, supra at 416, 43 S. Ct. 158], that `[w]e are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.'"
The application of "generally accepted accounting principles" in this context is unpersuasive. No reasonable person would seriously suggest that the owner of the Empire State Building could be required, in the exercise of the police power, to remove the building from the land, or even to rebuild it to current specifications, at the conclusion of a thirty- or fifty-year period mandated pursuant to the Internal Revenue Code as representing the useful life of buildings for tax depreciation purposes, without paying just compensation. [Citations omitted.]
Justice Levin also noted:
A further factor sometimes taken into account in calculation of a reasonable amortization period is whether the affected property owner, by virtue of the prospective ban on the similar use of property by other owners in the community, receives the benefit of a temporary "monopoly" on the nonconforming use. The implicit assumption of this analysis is that the community has a greater right to deprive persons of the use and enjoyment of their property if the community has taken action that indirectly enhances the value of such property.
This argument, like the balance of the analysis applied by the courts finding that amortization does not effect a taking, overlooks the principle that unless a property right is at the outset insubstantial, neither the state nor local governmental units to which the state delegates police power may deprive persons of the use and enjoyment of their property without paying just compensation. The gratuitous, and assertedly fortuitous effects, if any, of "monopoly" do not alter this principle. [Adams I, supra at 236, n. 47, 483 N.W.2d 38.]
Justice Levin's separate opinion in Adams I did not command a majority of the justices[9] and therefore is not binding on this Court. Butterworth Hosp. v. Farm Bureau Ins. Co., 225 Mich.App. 244, 248, 570 N.W.2d 304 (1997). Nevertheless, we find Justice Levin's opinion persuasive and adopt it as our own. Thus, for the reasons expressed in Justice Levin's opinion, we reject East Lansing's contention that subsection 8.39(8), as applied to Adams' billboards, does not constitute a taking because Adams has been given a reasonable period to comply with the ordinance and recover a substantial return on its investment.
Next, East Lansing contends that no claim of a taking can be sustained in this case because enforcement of subsection 8.39(8) against Adams' off-premises billboards does not deny Adams all economically beneficial use of its property.
As indicated previously, the property interests claimed to have been taken in this case are real property interests. Thus, we find the appropriate analysis enunciated in K & K, supra at 576-577, 575 N.W.2d 531 (citations omitted):
The United States Supreme Court has recognized that the government may effectively "take" a person's property by overburdening that property with regulations.... While all taking cases require a case-specific inquiry, courts have found that land use regulations effectuate a taking in two general situations: (1) where the regulation does not substantially advance a legitimate state interest, or (2) where the regulation denies an owner economically viable use of his land.
*411 The second type of taking, where the regulation denies an owner of economically viable use of land, is further subdivided into two situations: (a) a "categorical" taking, where the owner is deprived of "all economically beneficial or productive use of land," or (b) a taking recognized on the basis of the application of the traditional "balancing test" established in [Penn Central Transportation Co. et al. v. City of New York, 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978) supra ].
In the former situation, the categorical taking, a reviewing court need not apply a case-specific analysis, and the owner should automatically recover for a taking of his property. A person may recover for this type of taking in the case of a physical invasion of his property by the government (not at issue in this case), or where a regulation forces an owner to "sacrifice all economically beneficial uses [of his land] in the name of the common good...." In the latter situation, the balancing test, a reviewing court must engage in an "ad hoc, factual inquir[y]," centering on three factors: (1) the character of the government's action, (2) the economic effect of the regulation on the property, and (3) the extent by which the regulation has interfered with distinct investment-backed expectations.
The Court further explained:
While there is no set formula for determining when a taking has occurred under [the balancing] test, it is at least "clear that the question whether a regulation denies the owner economically viable use of his land requires at least a comparison of the value removed with the value that remains." [Id. at 588, 575 N.W.2d 531.]
With respect to Adams' rooftop billboards, East Lansing's claim that subsection 8.39(8) does not deny Adams' all economically beneficial use of its property is dependent on East Lansing's argument that the applicable "unit of property" is not each individual sign, but, rather, is Adams' aggregate signs in either the "entire Lansing metro market" or the East Lansing area. East Lansing contends that application of subsection 8.39(8) to Adams' rooftop billboards therefore does not constitute a taking because, even after the rooftop billboards are eliminated, Adams will still have signs in either the Lansing or East Lansing markets and thus Adams has not been denied all economically beneficial use of its property.
As explained in K & K, supra at 578-580, 575 N.W.2d 531 (citations omitted):
One of the fundamental principles of taking jurisprudence is the "nonsegmentation" principle. This principle holds that when evaluating the effect of a regulation on a parcel of property, the effect of the regulation must be viewed with respect to the parcel as a whole. Courts should not" divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated." Rather, we must examine the effect of the regulation on the entire parcel, not just the affected portion of that parcel.
The denominator parcel is also not limited to each parcel of property. As explained by the United States Court of Appeals for the Federal Circuit in Tabb Lakes, Ltd. v. United States, 10 F.3d 796, 802 (C.A.Fed., 1993):
"Clearly, the quantum of land to be considered is not each individual lot containing wetlands or even the combined area of wetlands. If that were true, the Corps' protection of wetlands via a permit system would, ipso facto, constitute a taking in every case where it exercises its statutory authority." [Citations omitted.]
This Court has previously found the nonsegmentation principle applicable to two adjoining parcels of property with unity of ownership....
* * *
Determining the size of the denominator parcel is inherently a factual inquiry. As explained in Ciampitti v. United States, 22 Cl.Ct. 310, 318-319 (1991):
"Factors such as the degree of contiguity, the dates of acquisition, the extent to which the parcel has been treated as a single unit, the extent to which the protected lands enhance the value of remaining lands, and no doubt many others would *412 enter the calculus. The effect of a taking can obviously be disguised if the property at issue is too broadly defined. Conversely, a taking can appear to emerge if the property is viewed too narrowly. The effort should be to identify the parcel as realistically and fairly as possible, given the entire factual and regulatory environment."
In this case, East Lansing raises the "denominator parcel" issue for the first time on appeal. Generally, issues not raised before the trial court are not preserved for appeal. Schellenberg v. Rochester Lodge No. 2225, 228 Mich.App. 20, 28, 577 N.W.2d 163 (1998). It is true that this Court may address constitutional questions not raised below where no question of fact exists and the interests of justice and judicial economy so dictate. Great Lakes Division of Nat'l Steel Corp. v. Ecorse, 227 Mich.App. 379, 426, 576 N.W.2d 667 (1998). However, determining the denominator parcel is a factual inquiry. K & K, supra at 580, 575 N.W.2d 531. Thus, we decline to consider this issue.
In any event, contrary to East Lansing's argument on appeal, it is clear from the record that the denominator parcel used by the trial court was not Adams' individual signs. Rather, the denominator parcel used by the trial court was Adams' real property interests in the places where its signs are located, i.e., its fee simple interest at the Point and its separate leasehold interests at 111 North Harrison and 1108 East Grand River, with the income generated by the individual signs simply used to determine the value of these real property interests. Even if we were to consider the denominator parcel issue, we would find no error because, under the factors enunciated in K & K, it is realistic and fair to consider each of Adams' real property interests separately for purposes of the taking analysis in this case. Id. at 580, 575 N.W.2d 531.
The trial court found that subsection 8.39(8), as applied to Adams' rooftop leaseholds, constituted a categorical taking. Because the code requires that the rooftop billboards must be removed and no suggestion has been made that Adams might make some other economic or beneficial use of its rooftop leaseholds, we find no error in this regard. We further note that East Lansing raises no argument with respect to the method used to value the rooftop leaseholds. Therefore, we affirm the trial court's final order with respect to Adams' rooftop billboards.
Finally, East Lansing contends that even when the Point is considered the denominator parcel, enforcement of subsection 8.39(8) does not deny Adams all economically beneficial use of the Point because Adams will still be permitted to have four sign faces at this location under the code. East Lansing contends that the trial court thus erred in determining that subsection 8.39(8), as applied to the Point, constitutes a taking.
As indicated previously, Adams was primarily concerned at trial with establishing the amount of its loss at the Point. In determining this amount, the appraiser's testimony assumed that Adams would be permitted to maintain four sign faces at the Point generating approximately $20,000 in gross income, thus indicating that subsection 8.39(8) does not deny Adams all economically beneficial or productive use of its fee simple at the Point. Therefore, for the purpose of determining whether enforcement of subsection 8.39(8) effected a taking at the Point, the trial court should have applied the ad hoc factual inquiry required by the three-part balancing test, including "`a comparison of the value removed with the value that remains.' "K & K, supra at 588, 575 N.W.2d 531 (citation omitted).[10]
However, with respect to the Point, the trial court considered only the second factor (the economic effect of the regulation on the claimant) of the three-part balancing test. Moreover, the court considered this factor only in a limited manner. Specifically, as did Adams, the court focused only on the value of the loss sustained by Adams at the Point. Thus, while the court made a specific finding with respect to the value removed at the *413 Point, the court made no specific finding with respect to the value remaining at the Point. We note that such a value might be calculated on the present record where it was assumed that Adams would be permitted to maintain four sign faces generating a gross income of $20,000. However, Adams disputed this assumption below, arguing that even assuming four sign faces were theoretically or mathematically possible at the Point, there was no showing that the signs would be "usable."
Therefore, as in K & K, supra at 588, 575 N.W.2d 531, we believe it would be "imprudent to decide whether there was a taking of [Adams'] property [at the Point] on the basis of an inadequate record." Therefore, we reverse the trial court's final order with respect to the Point and remand to the trial court for further consideration. The court must calculate the value remaining at the Point and then reevaluate Adams' claim of a taking at the Point under the three-part balancing test. The trial court may, but need not, take additional proofs to supplement the existing record as it, in its learned discretion, deems necessary to properly consider the three-part balancing test.
In summary, we affirm the trial court's final order with respect to Adams' rooftop billboards. We reverse the trial court's final order with respect to Adams' freestanding billboards at the Point and remand for further proceedings in accordance with this opinion.
Affirmed in part, reversed in part, and remanded. We do not retain jurisdiction. No taxable costs pursuant to MCR 7.219, neither party having prevailed in full.
NOTES
[1] Off-premises billboards direct attention to a use, business, commodity, service, or activity not conducted, sold, or offered upon the premises where the signs are located. See Adams Outdoor Advertising v. East Lansing, 439 Mich. 209, 213-214, 483 N.W.2d 38 (1992) (Adams I ).
[2] The "elimination of nonconforming uses and structures over a specified period of time is commonly referred to as `amortization.'" Adams I, n. 1, supra at 216, n. 12, 483 N.W.2d 38. One court observed as follows with respect to the use of the term "amortization" to describe such an ordinance:
The ordinance here requires that nonconforming signs must be removed or brought into conformance within a specified period of time after they become nonconforming. This is referred to as "amortization," but in reality it is no more than notice to the owner and user of the sign that they have a period of time to make whatever adjustments or other arrangements they can. This is probably not a proper use of the word "amortization," and so used it contains no connotation of compensation or a requirement therefor. [Art Neon Co. v. City & Co. of Denver, 488 F.2d 118, 121 (C.A.10, 1973).]
[3] Redesignated as M.C.L. § 117.4i(f); MSA 5.2082(f) by 1991 PA 175.
[4] The court explained that Adams' expert had indicated that the ten percent rate was comprised of seven percent for income stream and three percent for risk factors. In reducing the capitalization rate from ten percent to seven percent, the court stated that no risk existed in this case.
[5] Amortization is a term commonly applied to ordinances that eliminate nonconforming signs over time. See n. 2, supra.
[6] For an example of such a case, see East Lansing's cited case of Art Neon, supra at 121-122.
[7] For an example of such a case, see East Lansing's cited case of Art Neon, supra.
[8] For an example of such a case, see East Lansing's cited case of Art Neon, supra at 122.
[9] Specifically, the majority opinion, noting that the trial court had not addressed the taking issue, stated that Justice Levin's analysis of the taking issue was "dicta, interesting dicta, but irrelevant to the outcome of this case." Id. at 219, n. 15.
[10] To be fair, although the taking cases relied on by our Supreme Court in K & K were decided before the trial in this case, K & K itself, with its excellent summary of the law in this area, was not decided until after the trial in this case.
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/1313685/
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225 S.E.2d 634 (1976)
29 N.C. App. 711
Mark Willis PATTERSON, by his guardian ad litem, F. L. Patterson, Plaintiff,
v.
W. H. WEATHERSPOON, Defendant.
No. 7610SC171.
Court of Appeals of North Carolina.
June 16, 1976.
Reynolds & Howard by E. Cader Howard, Raleigh, for plaintiff-appellant.
Smith, Anderson, Blount & Mitchell by Samuel G. Thompson and Michael E. Weddington, Raleigh, for defendant-appellee.
VAUGHN, Judge.
We will quote all of the testimony relevant to the question of negligence.
The minor plaintiff testified as follows:
"On that day I saw Will Weatherspoon and his father, W. H. Weatherspoon, hitting golf balls in a vacant lot in the *635 neighborhood where we all lived. It was about 7:30 in the evening and still daylight.
I rode my bicycle onto the vacant lot and Mr. Weatherspoon saw me. I knew Mr. Weatherspoon and his son, Will, and I spoke to Will and rode my bicycle over to where he was. I got off my bicycle at a point ten or fifteen feet away from Will and walked over to him. Will at that time was hitting some golf balls and Mr. Weatherspoon was on the other side of the lot about forty feet away.
I walked up to Will and stood behind him. Will swung his putter back and hit me in the left eye. I screamed and Mr. Weatherspoon ran over to me and picked me up and took me to his house which was the second house away from the vacant lot."
Defendant was called as an adverse witness for plaintiff and testified as follows:
"I am the father of W. H. Weatherspoon, Jr. who was six years old on June 21, 1970. My son and Mark Patterson had occasionally played together prior to June 21, 1970.
Prior to June 21, 1970, my son had received no golf lessons from a professional or semi-professional, but had received instruction from me. I had instructed my son only in the use of a putter because in my judgment at his then age of six he was incapable of swinging any club longer than a putter. I had on occasion been with my son to a commercial `putt-putt' course in Raleigh and at the beach and had shown him how to tap the ball into the hole and how to hold the putter. His training and experience was limited to that of a light stroke on the ball.
On June 21, 1970, I took my son to a vacant lot near our home so that we could be together as father and son with him putting golf balls and me chipping golf balls with a nine iron. I handed my son a putter to use. We arrived at the lot at about 7:15 p.m. and it was still daylight. Mark Patterson came on the lot after we had arrived and begun putting and chipping. My son was putting balls on a clay surface where we had prepared a little depression that resembled a golf cup so that he might tap the balls into this depression. My son had putted two or three balls before Mark arrived. I was about 25 to 30 feet away from my son when Mark arrived. My son had the putter in his hands when Mark arrived. Mark rode his bicycle onto the lot and approached us and we both spoke to him. My son was under my supervision and control the entire time that we were on the lot with Mark that day.
I had reason to believe that my son would respond to any instructions I gave him. I considered my son to be a well-behaved child and I had had no problems with his discipline and had no reason to believe that he would not respond to any directions or instructions that I gave him.
I recall that Mark Patterson sustained an injury to his left eye on June 21, 1970. I did not see the accident occur. I heard Mark scream and I ran over to him and noticed immediately that there had been a very severe injury to the left eye. .
I was standing about 25 or 30 feet away from the boys when the accident occurred, at approximately the same location as when Mark first arrived at the lot. I did not take the putter from my son when Mark arrived at the lot.
When I first gave my son the putter on that date I showed him where to putt, how to choke up on the putter and tap the ball into the depression in the clay. I did not give my son any specific instructions on the use of the putter after Mark arrived at the lot. The putter was an adult sized putterabout like a yardstick. I did not give Mark any instructions as to where he should stand or what he should do while my son was stroking the ball with the putter.
CROSS EXAMINATION:
Prior to June 21, 1970, my son had had numerous exposures to a golf club. I am an occasional golfer and there were golf clubs in my home. We had watched golf *636 on television and on a number of occasions had putted together at commercial `putt-putt' type courses both in Raleigh area and at the beach. My son was about four years old when I first exposed him to a golf putter. My son and I had played together on `putt-putt' courses on a number of occasions and he had also played with his grandfather. On these occasions I had instructed my son on how to grip the club and tap the ball into the hole. My son understood that the kind of stroke to use with a putter was a short tapping stroke to roll the ball to the cup.
There were other people present at the `putt-putt' courses at which we played.
I had further exposed my son to the use of a golf putter by putting with him in our house on the carpet. We putted into a device that would return the ball if the putt went into the hole. We had done this on numerous occasions and I had instructed him as to the correct method of putting, including the type of stroke and grip on the club. We normally putted a distance of seven or eight feet, using a short tapping stroke. We had also played together on the vacant lot prior to the date of the accident.
On June 21, 1970, we went to the lot after supper, about 7:15 or 7:30. My son had asked if we could play golf. We took a putter and a nine iron with us. We went to the area where my son had putted before and I stationed him three or four feet from the depression in the clay and gave him two or three golf balls and again showed him how to choke up or take a lower grip on the putter. At that time my son was about forty-six inches tall, which means he was about ten inches taller than the putter. I then walked about ten yards away and began chipping some balls.
I saw Mark ride his bicycle onto the lot and into the general area where I and my son were and we both spoke to him. He stopped his bicycle basically between my son and me, somewhat closer to my son, and stood astride the bicycle.
* * * * * *
I was a Little League baseball coach and my son was on my team of five and six year olds. I instructed my team, including my son, not to sling the bat after hitting the ball and to be careful of the people around when you swing a bat.
REDIRECT EXAMINATION:
I had not coached my son in organized golf sports. I did not give my son any particular instructions regarding the use of the golf putter on June 21, 1970, nor did I give Mark Patterson any instructions as to where he should stand or what he should do while my son was playing with the putter.
When I observed my son putting that day, he was using short strokes under my instructions. Because the object of putting is to tap the ball into the hole it never occurred to me to tell my son not to swing a putter as you would another club. I had never observed him try to swing it in the times that we had played prior to that. My son was inclined to imitate me."
If defendant's motion for a directed verdict should have been allowed, any questions about errors in the charge are purely academic.
We hold that there was no evidence to permit the jury to find, under the circumstances shown at trial, that defendant should, by the exercise of due care, have reasonably foreseen that his child was likely to use the golf putter in such a manner as to cause injury and that he, thereafter, failed to exercise reasonable care to restrict or supervise the child's use thereof. Defendant's motion for a directed verdict should have been allowed.
In Lane v. Chatham, 251 N.C. 400, 111 S.E.2d 598, the defendant parents give their nine-year-old son an air rifle. The rifle was entrusted to his use from Christmas until the following Thanksgiving. On that day, the child stepped from behind a tree, pointed the rifle directly at plaintiff and shot him. The shot entered plaintiff's eye causing total loss thereof. There was evidence that the mother had knowledge of *637 the child's prior misuse of the air rifle but no evidence that the father had any such knowledge. The Supreme Court stated the applicable rule as follows:
"Where parents entrust their nine-year-old son with the possession and use of an air rifle and injury to another is inflicted by a shot intentionally or negligently discharged therefrom by their son, the parents are liable, based on their own negligence, if under the circumstances they could and should, by the exercise of due care, have reasonably foreseen that the boy was likely to use the air rifle in such manner as to cause injury, and failed to exercise reasonable care to prohibit, restrict or supervise his further use thereof."
The Court held that the case was for the jury as to the mother but affirmed a judgment of nonsuit as to the father. The Court held that an air rifle is not a dangerous instrumentality per se and that, therefore, evidence that defendants gave the child the air rifle and permitted him to use it was not sufficient, standing alone, to support a finding of their liability for the child's wrongful act.
If an air rifle is not a dangerous instrumentality, per se, then certainly a golf putter cannot be so described. The father in Lane v. Chatham surely knew that his son would use the rifle in the presence of others. There was no indication that he ever attempted to control the child's use of the weapon or warn him of the possible dangers involved in the use thereof. If the defendant in that case did not have reason to foresee any danger to others arising out of their son's possession and negligent use of the rifle, we fail to see how defendant in the case before us had the duty to foresee injury to another arising out of his child's negligent use (if indeed the evidence here discloses a negligent use) of a common golf putter.
The minor plaintiff suffered a grievous injury. A parent, nevertheless, is not an insurer of the safety of his child's playmates. Injuries will occur no matter how careful the parent may be. Life is not lived in a vacuum. Children (as are adults) are injured daily by freakish occurrences arising out of the use of all kinds of instrumentalities which are not inherently dangerous. This child was hurt with a golf putter. It could just as easily have been a croquet mallet, a tennis racquet or a baseball bat, all of which are commonly used by children of all ages.
For the reasons stated, the verdict and judgment will not be disturbed.
No error.
MARTIN and CLARK, JJ., concur.
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225 S.E.2d 336 (1976)
29 N.C. App. 735
Larry H. STEWART, Employee,
v.
NORTH CAROLINA DEPARTMENT OF CORRECTIONS, Employer Self-Insured.
No. 7611IC82.
Court of Appeals of North Carolina.
June 16, 1976.
*337 Teague, Johnson, Patterson, Dilthey & Clay, by Robert M. Clay, Raleigh, for plaintiff appellee.
Atty. Gen. Rufus L. Edmisten, by Associate Atty. Elisha H. Bunting, Jr., Raleigh, for defendant appellant.
BRITT, Judge.
Defendant assigns as error the finding of fact and conclusion of law that the accident causing plaintiff's injury arose out of and in the course of his employment. We find no merit in the assignment.
*338 To be compensable an accident must arise out of the course and scope of employment. Loflin v. Loflin, 13 N.C.App. 574, 186 S.E.2d 660 (1972), cert. denied, 281 N.C. 154, 187 S.E.2d 585 (1972). Where the fruit of certain labor accrues either directly or indirectly to the benefit of an employer, employees injured in the course of such work are entitled to compensation under the Workmen's Compensation Act. G.S. 97-1 et seq. Clark v. Burton Lines, 272 N.C. 433, 158 S.E.2d 569 (1968).
This result obtains especially where an employee is called to action by some person superior in authority to him. Here, Captain Temple, four grades higher up the chain of command, suggested to plaintiff that he participate in tearing down the old house. It appears clear that when a superior directs a subordinate employee to go on an errand or to perform some duty beyond his normal duties, the scope of the Workmen's Compensation Act expands to encompass injuries sustained in the course of such labor. Were the rule otherwise, employees would be compelled to determine in each instance and, no doubt at their peril, whether a requested activity was beyond the ambit of the act. See 1 A. Larson, Law of Workmen's Compensation § 27.40 (1972).
The order or request need not be couched in the imperative. It is sufficient for compensation purposes that the suggestion, request or even the employee's mere perception of what is expected of him under his job classification, serves to motivate undertaking an injury producing activity. So long as ordered to perform by a superior, acts beneficial to the employer which result in injury to performing employees are within the ambit of the act. Aldridge v. Foil Mtr. Co., 262 N.C. 248, 136 S.E.2d 591 (1964). See e.g., Hales v. North Hills Construction Co., 5 N.C.App. 564, 169 S.E.2d 24 (1969) (by implication), cert. denied (7 October 1969).
We feel the full commission correctly found that the work benefited plaintiff's employer and was undertaken at the behest of plaintiff's superior officer. Our own analysis of the record supports the commission's findings and conclusions. Where the findings of the commission are supported by competent evidence, they are conclusive on appeal. G.S. 97-86, McMahan v. Hickey's Supermarket, 24 N.C.App. 113, 210 S.E.2d 214 (1974).
For the reasons stated, the opinion and award of the commission is
Affirmed.
BROCK, C.J., and MORRIS, J., concur.
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421 A.2d 1311 (1980)
In re Grievance of the VERMONT STATE EMPLOYEES' ASSOCIATION INC., on behalf of certain "Phase Down" Employees.
No. 107-79.
Supreme Court of Vermont.
September 11, 1980.
Michael R. Zimmerman, Montpelier, for plaintiff.
M. Jerome Diamond, Atty. Gen., and Louis P. Peck, Chief Asst. Atty. Gen., Montpelier, for defendant.
Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.
HILL, Justice.
In 1976, the State of Vermont and the Vermont State Employees Association, Inc. (VSEA) negotiated a collective bargaining agreement, covering the period from July 5, 1976, to July 1, 1979, for the following state employees: cottage and house parents; certain employees of the Fish and Game Department; certain employees of the Department of Highways; and certain communication technicians. These employees traditionally had worked more than forty hours per week, and it was the purpose of the bargaining agreement to gradually phase them down to a forty-hour work week. In order to ameliorate the effect of the loss of income to these employees, the State and VSEA entered into several special arrangements. In separate sections of the agreement, it was provided that each of the above "groups of employees would receive lump sum payments at the end of a fiscal *1312 year if their gross earnings were less than a certain percentage of their annual salary." The agreement further provided that the lump sum payments were to terminate on July 1, 1978. In addition, in article XXXII of the agreement, the provision in dispute here, it was provided that holidays would be considered as time actually worked for the purposes of computing eligibility for overtime compensation.
Notwithstanding other provisions of this agreement regarding Holiday Pay and overtime computation, holidays will be counted as Time Actually Worked "for purposes of computing eligibility for overtime compensation for those employees of the Department of Highways, Department of Liquor Control, Agency of Human Services, Department of Public Safety, and Department of Fish and Game, who are being phased down" to forty-hour weekly schedules and wages under Articles XXXII, XXXIV, XXXV, XXXVI, and XXXVII of this agreement.
The State argues that the benefits conferred by article XXXII terminated when the lump sum payments under the various other articles terminated. VSEA, on the other hand, claims that the benefits conferred by article XXXII did not terminate until the entire agreement came to an end on July 1, 1979.
It is the duty of this Court to interpret the provisions of a disputed contract, not remake it, or ignore it. South Burlington School District v. Calcagni-Frazier-Zajchowski Architects, Inc., 138 Vt. 33, 43, 410 A.2d 1359, 1363 (1980). In carrying out this task, we are guided by the rule of construction that "[a] contract must be construed, if possible, so as to give effect to every part, and from the parts to form a harmonious whole." Jackson v. Rogers, 120 Vt. 138, 141, 134 A.2d 620, 622 (1957).
Construing the present contract according to the dictates of that rule, we are compelled to agree with the interpretation advanced by VSEA. The termination date of the collective bargaining agreement was July 1, 1979. Where, however, the parties intended that particular benefits, viz., the lump sum payments, terminate on a date other than the termination date of the agreement, they so provided. This can only be taken to mean that benefits which were not tied to a particular termination date were to terminate at the end of the agreement. And since the benefits conferred by article XXXII fall into the latter class, the Labor Relations Board erred in holding that they terminated with the lump sum payments.
The decision of the Labor Relations Board is reversed, and the benefits conferred by article XXXII of the collective bargaining agreement are held to have terminated on July 1, 1979.
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632 F. Supp. 2d 968 (2009)
CITIZENS FOR BETTER FORESTRY, et al., Plaintiffs,
v.
U.S. DEPARTMENT OF AGRICULTURE, et al., Defendants.
No. C 08-1927 CW.
United States District Court, N.D. California.
June 30, 2009.
*969 Peter M.K. Frost, Western Environmental Law Center, Eugene, OR, Marc D. Fink, Center for Biological Diversity, Duluth, MN, Lisa T. Belenky, Center for Biological Diversity, San Francisco, CA, for Plaintiffs Citizens for Better Forestry, et al.
Trent W. Orr, Gregory C. Loarie, Earthjustice, Oakland, CA, Timothy J. Preso, Earthjustice, Bozeman, MT, Sierra B. Weaver, Defenders of Wildlife, Washington, DC, for Plaintiffs Defenders of Wildlife, et al.
ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS' CROSS-MOTION FOR SUMMARY JUDGMENT
CLAUDIA WILKEN, District Judge.
Plaintiffs Citizens for Better Forestry, et al. (collectively, Citizens) charge Defendants *970 United States Department of Agriculture (USDA), et al. with failing to adhere to procedures required by the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA) when they promulgated regulations that govern the development of management plans for forests within the National Forest System. The parties now cross-move for summary judgment. The matter was heard on April 2, 2009. Having considered oral argument and all of the papers submitted by the parties, the Court grants Citizens' motion and denies the USDA's cross-motion.
BACKGROUND
The National Forest System includes approximately 193 million acres of land and is administered by the U.S. Forest Service, an agency within the USDA. In 1976, Congress enacted the National Forest Management Act (NFMA) to reform management of the National Forests. The Act established a three-tiered regulatory approach to forest management, with different tiers existing at the national, regional and local levels.
At the highest level, the NFMA requires the USDA to promulgate national uniform regulations that govern the development and revision of regional and local plans. 16 U.S.C. § 1604(g).
These regulations mandate the compliance of lower-level plans with the National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321-4370f ("NEPA"), specifically setting forth the circumstances that require preparation of an Environmental Impact Statement ("EIS"). 16 U.S.C. § 1604(g)(1). In addition, they set broad guidelines (to be followed when preparing regional and site-specific plans) regarding plant and animal species conservation, timber management, and water management. Id. § 1604(g)(3).
Citizens for Better Forestry v. U.S. Dep't of Agric. (Citizens I), 341 F.3d 961, 965 (9th Cir.2003). The USDA's 2008 revision of these regulations, which are also known as the "plan development rule," is at issue in the present lawsuit.
The second tier of National Forest regulation consists of land resource management plans (LRMPs), also known as forest plans, which apply to large "units" of the forest system. 16 U.S.C. § 1604(a).
These plans operate like zoning ordinances, defining broadly the uses allowed in various forest regions, setting goals and limits on various uses (from logging to road construction), but do not directly compel specific actions, such as cutting of trees in a particular area or construction of a specific road. The content and promulgation of these plans must comply with the plan development rule.
Citizens I, 341 F.3d at 966.
The third-tier of regulation consists of "site-specific" plans. These plans "are prepared to effect specific, on-the-ground actions" and "must be consistent with both sets of higher-level rules." Id. (citing 16 U.S.C. § 1604(i)).
The USDA promulgated the first plan development rule in 1979 and amended it in 1982. The 1982 Rule imposed a number of substantive requirements on LRMPs and site-specific plans:
This Rule required that "[f]ish and wildlife habitat shall be managed to maintain viable populations [thereof]," further defining a "viable" population as "one which has the estimated numbers and distribution of reproductive individuals to insure its continued existence is well distributed in the [relevant] area." See National Forest System Land and Resource *971 Management Planning, 47 Fed. Reg. 43,026, 43,048 (Sept. 30, 1982) (amending 36 C.F.R. part 219). In addition, the 1982 Rule required the development of so-called "regional guides," which "provide[d] standards and guidelines for addressing major issues and management concerns which need to be considered at the regional level to facilitate forest planning." See id. at 43,042 (revising 36 C.F.R. § 219.8-.9). Furthermore, the Rule contained "minimum specific management requirements," setting forth mandatory directives which all regional LRMPs must follow, and specific, quantifiable baselines below which no LRMP or site-specific plan can fall. See id. at 43,050 (creating 36 C.F.R. § 219.27). These requirements included, inter alia, establishment of 100-foot buffers around bodies of water and specific limits on tree-cutting. See id.
Citizens I, 341 F.3d at 966 (alterations in original).
Under NEPA, federal agencies must issue an EIS in connection with all "major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C). "In certain circumstances, where it is not clear whether a full EIS is required, agencies prepare a more concise Environmental Assessment [(EA)] to evaluate preliminarily the need to prepare a full EIS." Citizens I, 341 F.3d at 966 n. 2 (citing 40 C.F.R. § 1501.4(b)-(c)).
In 2000, the USDA amended the 1982 Rule. The USDA did not prepare an EIS in connection with the 2000 Rule, but it did prepare an EA. The EA found that the amendment had no significant impact on the environment. Id. at 967.
The 2000 Rule modified its predecessor in a number of ways:
First, it relaxed the species "viability" requirement by providing that "[p]lan decisions affecting species diversity must provide for ecological conditions that . . . provide a high likelihood that those conditions are capable of supporting over time the viability of . . . species well distributed throughout their ranges within the plan area." National Forest System Land and Resource Management Planning, 65 Fed. Reg. 67,514, 67,575 (Nov. 9, 2000) (amending 36 C.F.R. § 219.20(b)(2)) (emphasis added). The 1982 Rule had more stringently required that the USDA "insure" continued species existence. 47 Fed. Reg. at 43,038. The 2000 Rule also eliminated the requirement of developing and issuing "regional guides" to maintain regional consistency in forest management. See 65 Fed. Reg. at 67, 527. It further eliminated many of the "minimum specific management requirements." For example, in comments submitted in response to the draft 2000 Rule, the Environmental Protection Agency ("EPA") observed that "while [the 1982 Rule] contain[s] specific limits on clear cutting [of trees], the proposed [2000 Rule] would require only that individual forest plans `provide standards and guidelines for timber harvest and regeneration methods,'" and asked "[h]ow will the proposed [2000 Rule] ensure requirements necessary for sustainability?"
Finally, the 2000 Plan Development Rule eliminated the post-decision appeal process of 36 C.F.R. pt. 217, and replaced it with a pre-decision "objection" process. 65 Fed. Reg. at 67,568 (removing 36 C.F.R. pt. 217); id. at 67,578 79 (creating 36 C.F.R. § 219.32). Under this new process, members of the public wishing to object to an amendment or revision of an LRMP have 30 days from the date an EIS is made available to do so. See id. Thus, this process can occur before the finalization of the planned *972 amendment if the EIS is published more than 30 days before the amended LRMP becomes final.
Citizens I, 341 F.3d at 967-68 (alterations in original).
Citizens and other environmental groups sued the USDA, challenging the substance of the 2000 Rule as contrary to the provisions of the NFMA and alleging that, in promulgating the Rule, the agency failed to adhere to procedures mandated by NEPA and the ESA. After the lawsuit was filed, the USDA announced its intention to revise the new rule. The parties agreed to stay Citizens' substantive challenges, but proceeded with the procedural challenges. The district court granted summary judgment against Citizens on the procedural claims, finding that they were not justiciable for lack of standing and ripeness. The Ninth Circuit reversed the district court on appeal in Citizens I and remanded the case for further proceedings. Citizens I was dismissed pursuant to stipulation after remand.
In 2002, the USDA proposed amending the 2000 Rule. In its notice of proposed rulemaking, it found that, "[a]lthough the 2000 rule was intended to simplify and streamline the development and amendment of land and resource management plans, . . . the 2000 rule [was] neither straightforward nor easy to implement" and "did not clarify the programmatic nature of land and resource management planning." National Forest System Land and Resource Management Planning, 67 Fed. Reg. 72,770, 72,770 (Dec. 6, 2002). The proposed rule purported to retain "many of the basic concepts in the 2000 rule, namely sustainability, public involvement and collaboration, use of science, and monitoring and evaluation," but "attempted to substantially improve these aspects of the 2000 rule by eliminating unnecessary procedural detail, clarifying intended results, and streamlining procedural requirements consistent with agency staffing, funding, and skill levels." Id. at 72772.
The USDA did not publish the final version of the rule it proposed in 2002 until 2005. National Forest System Land Management Planning, 70 Fed. Reg. 1023 (Jan. 5, 2005). It did not conduct an EIS or an EA, asserting that the rule fell within a previously declared "categorical exclusion" to NEPA's requirements. A categorical exclusion is "a category of actions which do not individually or cumulatively have a significant effect on the human environment and which have been found to have no such effect in procedures adopted by a Federal agency . . . and for which, therefore, neither an environmental assessment nor an environmental impact statement is required." 40 C.F.R. § 1508.4. In the USDA's view, the 2005 Rule fell within an existing categorical exclusion that applied to "rules, regulations, or policies to establish Service-wide administrative procedures, program processes, or instruction." 70 Fed. Reg. at 1054. In addition, the USDA did not consult with the Fish and Wildlife Service (FWS) or the National Marine Fisheries Service (NMFS) to determine whether the 2005 rule would have an adverse effect on any endangered or threatened species.
Citizens and other environmental groups again sued the USDA, claiming procedural violations of NEPA and the ESA. In Citizens for Better Forestry v. United States Department of Agriculture (Citizens II), 481 F. Supp. 2d 1059 (N.D.Cal.2007), the district court granted summary judgment in part against the USDA, finding that: 1) the agency had violated the Administrative Procedure Act by promulgating the 2005 Rulea self-described "paradigm shift" from earlier rules, including the rule proposed in 2002without first providing notice *973 of the changes and allowing the public to submit comments; 2) the agency had violated NEPA by applying the categorical exclusion and failing to prepare either an EA or an EIS; 3) the agency had violated the ESA by failing to engage in consultations with other federal agencies or to publish a biological assessment (BA). The court enjoined the USDA from putting the 2005 rule into effect until the agency complied with these statutes.
In 2007, the USDA re-published the 2005 rule along with a draft EIS and sought public comment. National Forest System Land Management Planning, 72 Fed. Reg. 48,514 (Aug. 23, 2007). The agency published the final version of the EIS and the rule in 2008. National Forest System Land Management Planning, 73 Fed. Reg. 21,468 (April 21, 2008). The final version differs in some respects from the proposal, but adheres to the same basic approach to forest plan development. The EIS was undertaken in an effort to comply with the district court's decision in Citizens II and concluded, as the USDA had concluded previously, that the proposed rule would have no direct or indirect impact on the environment because the rule was programmatic in nature and did not, in itself, effect any predictable changes in the management of specific National Forest sites. In an effort to comply with the ESA, the USDA also published a BA in connection with the rule's promulgation. The BA concluded, similarly to the EIS, that the Rule would not have a direct or indirect effect on species protected by the Act.
Citizens and other environmental groups now challenge the 2008 Rule. They assert that, although the USDA prepared an EIS and a BA in connection with the 2008 Rule, the agency nonetheless violated NEPA and the ESA because the EIS and BA simply repeated the agency's previous erroneous finding that the 2005 Rule would have no effect on the environment or protected species.
LEGAL STANDARD
Summary judgment is properly granted when no genuine and disputed issues of material fact remain, and when, viewing the evidence most favorably to the non-moving party, the movant is clearly entitled to prevail as a matter of law. Fed. R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.1987).
The moving party bears the burden of showing that there is no material factual dispute. Therefore, the court must regard as true the opposing party's evidence, if it is supported by affidavits or other evidentiary material. Celotex, 477 U.S. at 324, 106 S. Ct. 2548; Eisenberg, 815 F.2d at 1289. The court must draw all reasonable inferences in favor of the party against whom summary judgment is sought. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir.1991).
Material facts which would preclude entry of summary judgment are those which, under applicable substantive law, may affect the outcome of the case. The substantive law will identify which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
Where the moving party does not bear the burden of proof on an issue at trial, the moving party may discharge its burden of production by either of two methods:
The moving party may produce evidence negating an essential element of the *974 nonmoving party's case, or, after suitable discovery, the moving party may show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial.
Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1106 (9th Cir.2000).
If the moving party discharges its burden by showing an absence of evidence to support an essential element of a claim or defense, it is not required to produce evidence showing the absence of a material fact on such issues, or to support its motion with evidence negating the non-moving party's claim. Id.; see also Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 885, 110 S. Ct. 3177, 111 L. Ed. 2d 695 (1990); Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir.1991). If the moving party shows an absence of evidence to support the non-moving party's case, the burden then shifts to the non-moving party to produce "specific evidence, through affidavits or admissible discovery material, to show that the dispute exists." Bhan, 929 F.2d at 1409.
If the moving party discharges its burden by negating an essential element of the non-moving party's claim or defense, it must produce affirmative evidence of such negation. Nissan, 210 F.3d at 1105. If the moving party produces such evidence, the burden then shifts to the non-moving party to produce specific evidence to show that a dispute of material fact exists. Id.
If the moving party does not meet its initial burden of production by either method, the non-moving party is under no obligation to offer any evidence in support of its opposition. Id. This is true even though the non-moving party bears the ultimate burden of persuasion at trial. Id. at 1107.
Where the moving party bears the burden of proof on an issue at trial, it must, in order to discharge its burden of showing that no genuine issue of material fact remains, make a prima facie showing in support of its position on that issue. UA Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir.1994). That is, the moving party must present evidence that, if uncontroverted at trial, would entitle it to prevail on that issue. Id. Once it has done so, the non-moving party must set forth specific facts controverting the moving party's prima facie case. UA Local 343, 48 F.3d at 1471. The non-moving party's "burden of contradicting [the moving party's] evidence is not negligible." Id. This standard does not change merely because resolution of the relevant issue is "highly fact specific." Id.
DISCUSSION
I. Standing and Ripeness
Article III of the Constitution limits the jurisdiction of the federal courts to "cases" and "controversies." In order to satisfy the "case or controversy" requirement, a plaintiff must show that: "(1) he or she has suffered an injury in fact that is concrete and particularized, and actual or imminent; (2) the injury is fairly traceable to the challenged conduct; and (3) the injury is likely to be redressed by a favorable court decision." Salmon Spawning & Recovery Alliance v. Gutierrez, 545 F.3d 1220, 1225 (9th Cir.2008). "Article III standing requires an injury that is actual or imminent, not conjectural or hypothetical." Cole v. Oroville Union High Sch. Dist., 228 F.3d 1092, 1100 (9th Cir.2000) (internal quotation marks omitted).
As noted above, in Citizens I, the Ninth Circuit held that Citizens had standing to assert claims identical in all relevant respects to those here. The court observed that, when the injury complained of is the *975 government's failure to follow prescribed procedures, the plaintiff "must show that the procedures in question are designed to protect some threatened concrete interest of his that is the ultimate basis of his standing." 341 F.3d at 969 (quoting Public Citizen v. Dep't of Transp., 316 F.3d 1002, 1015 (9th Cir.2003)). The "concrete interest" test requires "a geographic nexus between the individual asserting the claim and the location suffering an environmental impact." Id. at 971 (quoting Public Citizen, 316 F.3d at 1015). The Ninth Circuit found that Citizens had satisfied this requirement:
They have properly alleged, and supported with numerous affidavits covering a vast range of national forests around the country, that their members use and enjoy national forests, where they observe nature and wildlife. The Supreme Court has held that environmental plaintiffs adequately allege injury in fact when they aver that they use the affected area and are persons for whom the aesthetic and recreational values of the area will be lessened by the challenged activity.
Citizens need not assert that any specific injury will occur in any specific national forest that their members visit. The asserted injury is that environmental consequences might be overlooked as a result of deficiencies in the government's analysis under environmental statutes. Were we to agree with the district court that a NEPA plaintiff's standing depends on "proof" that the challenged federal project will have particular environmental effects, we would in essence be requiring that the plaintiff conduct the same environmental investigation that he seeks in his suit to compel the agency to undertake.
Id. at 971-72 (citations and internal quotation marks omitted).
The Ninth Circuit also noted that environmental plaintiffs asserting a procedural injury "can establish standing without meeting all the normal standards for immediacy." Id. at 972 (internal quotation marks and ellipsis omitted). Instead, they need only "establish the reasonable probability of the challenged action's threat to their concrete interest." Id. (internal quotation marks and brackets omitted). The court found that Citizens had demonstrated a reasonable probability that its members' "concrete interest in enjoying the national forests" would be injured because the 2000 Rule eliminated some of the explicit requirements that were contained in the 1982 rule. In so finding, the court rejected the USDA's argument that, because the rule only controlled the development of LRMPs and site-specific plans, and did not have any direct effect on the environment itself, there was an "insufficient connection between the asserted procedural injury and the concrete interests at stake." Id. at 973. The court reasoned that "[e]ven components of the 2000 Rule that apply indirectly to site-specific plans will (with reasonable probability) influence for the worse the environmental safeguards in LRMPs promulgated thereunder, which in turn will likely result in less environmental safeguards at the site-specific plan level." Id. at 975.
If Citizens I is still good law, it would compel the conclusion that Citizens has standing to sue in the present case. The USDA, however, argues that Citizens I was implicitly overruled by a recent decision of the United State Supreme Court, Summers v. Earth Island Institute, ___ U.S. ___, 129 S. Ct. 1142, 173 L. Ed. 2d 1 (2009). As the Ninth Circuit has held, district courts must not follow circuit court precedent where a subsequent Supreme Court decision has "undercut the theory or reasoning underlying the prior circuit *976 precedent in such a way that the cases are clearly irreconcilable." Miller v. Gammie, 335 F.3d 889, 900 (9th Cir.2003).
Summers involved a challenge to Forest Service regulations implementing the Forest Service Decisionmaking and Appeals Reform Act of 1992 (ARA). The ARA requires the Forest Service "to establish a notice, comment and appeal process for proposed actions of the Forest Service concerning projects and activities implementing land and resource management plans." Summers, 129 S.Ct. at 1147 (internal quotation marks omitted). The implementing regulations provided that certain of the ARA's procedures would not be applied to some types of projects. Specifically, projects that the Forest Service considered categorically excluded from NEPA's requirement to file an EIS or an EA would not be required to comply with the ARA's notice and comment procedures, see 36 C.F.R. § 215.4(a), or the ARA's appeal procedures, see 36 C.F.R. § 215.12(f). "Later amendments to the Forest Service's manual of implementing procedures, adopted by rule after notice and comment, provided that fire-rehabilitation activities on areas of less than 4,200 acres, and salvage-timber sales of 250 acres or less, did not cause a significant environmental impact and thus would be categorically exempt from the requirement to file an EIS or EA. This had the effect of excluding these projects from the notice, comment, and appeal process." Summers, 129 S.Ct. at 1147.
Following a fire in Sequoia National Forest, the Forest Service announced its decision to undertake the Burnt Ridge Project, a salvage sale of timber on 238 acres of forest land damaged by the fire. Pursuant to its categorical exclusion, the Service "did not provide notice in a form consistent with the Appeals Reform Act, did not provide a period of public comment, and did not make an appeal process available." Id. at 1148. Earth Island Institute sued, challenging 36 C.F.R. §§ 215.4(a) and 215.12(f). In addition to these two regulations, Earth Island Institute challenged six other Forest Service regulations that were not applied to the Burnt Ridge Project.
After the district court granted a preliminary injunction, the parties settled their dispute over the Burnt Ridge Project. Earth Island Institute nonetheless proceeded with its claims, seeking a ruling invalidating the two regulations that had been applied to the project as well as the six regulations that had not. The district court found that Earth Island Institute had standing to challenge the regulations and that its claims were ripe for review. The court invalidated five of the eight regulations, including the two that had been applied to the Burnt Ridge Project, and entered a nationwide injunction against their application.
On appeal, the Ninth Circuit found that Earth Island Institute had standing to sue because it had suffered a procedural injury:
Earth Island was unable to appeal the Burnt Ridge Project because the Forest Service applied 36 C.F.R. § 215.12(f); the loss of that right of administrative appeal is sufficient procedural injury in fact to support a challenge to the regulation. Plaintiffs in this case are "injure[d]... in the sense contemplated by Congress," Idaho Conservation League v. Mumma, 956 F.2d 1508, 1516 (9th Cir.1992); because Plaintiffs are precluded from appealing decisions like the Burnt Ridge Project, and that Project itself, under the 2003 Rule. The ARA is entirely procedural, and Congress contemplated public involvement in the administrative notice, comment, and appeal process.
*977 Earth Island Institute v. Ruthenbeck, 490 F.3d 687, 694 (9th Cir.2007). The court's discussion of standing referred only to § 215.12(f), which had the effect of eliminating Earth Island Institute's right to appeal the Burnt Ridge Project. It did not address, as a separate matter, the issue of standing with respect to Earth Island Institute's challenge to § 215.12(a), which had the effect of exempting the Burnt Ridge Project from the ARA's ordinary notice and comment procedures. Nor did the court specifically address standing with respect to Earth Island Institute's challenge to the six regulations that had not been applied to the project.
The Ninth Circuit also discussed the issue of ripeness. It found that, because §§ 215.4(a) and 215.12(f) had been applied to the Burnt Ridge Project, these regulations were ripe for review. In the court's view, the parties' agreement to settle the Burnt Ridge timber sale dispute did "not affect the ripeness of Earth Island's challenge to 36 C.F.R. §§ 215.12(f) and 215.4(a)" because the record remained "sufficiently concrete to permit this court to review the application of the regulation to the project and to determine if the regulations as applied are consistent with the ARA." Id. at 696. As for the other regulations, the court held that Earth Island's challenge was not ripe:
Earth Island has not shown that the other challenged regulations were applied in the context of the Burnt Ridge Timber Sale or any other specified project. The record is speculative and incomplete with respect to the remaining regulations, so the issues are not fit for judicial decision . . . . While Earth Island has established sufficient injury for standing purposes, it has not shown the sort of injury that would require immediate review of the remaining regulations. There is not a sufficient "case or controversy" for us to review regulations not applied in the context of the record before this court.
Id.
The Ninth Circuit went on to affirm the district court's invalidation of §§ 215.4(a) and 215.12(f). It remanded the judgment and injunction with respect to the remaining regulations with instructions to vacate for "lack of a controversy ripe for review." Id. at 699.
The Supreme Court reversed the Ninth Circuit on the issue of standing, holding that the settlement of the dispute over the Burnt Ridge Project deprived Earth Island Institute of standing because the organization was no longer suing on the basis of an injury resulting from application of the challenged regulations in a specific context:
Respondents have identified no other application of the invalidated regulations that threatens imminent and concrete harm to the interests of their members. The only . . . affidavit relied on was that of Jim Bensman. He asserted, first, that he had suffered injury in the past from development on Forest Service land. That does not suffice for several reasons: because it was not tied to application of the challenged regulations, because it does not identify any particular site, and because it relates to past injury rather than imminent future injury that is sought to be enjoined.
Bensman's affidavit further asserts that he has visited many National Forests and plans to visit several unnamed National Forests in the future. Respondents describe this as a mere failure to "provide the name of each timber sale that affected Bensman's interests." It is much more (or much less) than that. It is a failure to allege that any particular timber sale or other project claimed to be unlawfully subject to the regulations *978 will impede a specific and concrete plan of Bensman's to enjoy the National Forests. The National Forests occupy more than 190 million acres, an area larger than Texas. There may be a chance, but is hardly a likelihood, that Bensman's wanderings will bring him to a parcel about to be affected by a project unlawfully subject to the regulations. Indeed, without further specification it is impossible to tell which projects are (in respondents' view) unlawfully subject to the regulations. . . . [W]e are asked to assume not only that Bensman will stumble across a project tract unlawfully subject to the regulations, but also that the tract is about to be developed by the Forest Service in a way that harms his recreational interests, and that he would have commented on the project but for the regulation. Accepting an intention to visit the National Forests as adequate to confer standing to challenge any Government action affecting any portion of those forests would be tantamount to eliminating the requirement of concrete, particularized injury in fact.
Summers, 129 S.Ct. at 1150-51 (citations omitted; emphasis in original).
The Court further addressed the issue of procedural injury:
Respondents argue that they have standing to bring their challenge because they have suffered procedural injury, namely that they have been denied the ability to file comments on some Forest Service actions and will continue to be so denied. But deprivation of a procedural right without some concrete interest that is affected by the deprivationa procedural right in vacuois insufficient to create Article III standing. Only a person who has been accorded a procedural right to protect his concrete interests can assert that right without meeting all the normal standards for redressability and immediacy. Respondents alleged such injury in their challenge to the Burnt Ridge Project, claiming that but for the allegedly unlawful abridged procedures they would have been able to oppose the project that threatened to impinge on their concrete plans to observe nature in that specific area. But Burnt Ridge is now off the table.
Id. at 1151 (citation and internal quotation marks omitted; emphasis in original).
Having concluded that Earth Island Institute lacked standing to challenge §§ 215.4(a) and 215.12(f), the Supreme Court did not reach the question of whether the regulations were ripe for review. The Court affirmed the dismissal, which Earth Island Institute had not appealed, of the six regulations that were not applied to the Burnt Ridge Project.
The USDA asserts that, like Earth Island Institute, Citizens challenges a regulation with broad application that has not been applied in a particular context and thus has not given rise to any cognizable injury. It argues that Citizens may not challenge any procedural infirmities underlying the 2008 Rule except in connection with a challenge to a site-specific plan approved under a LRMP that was developed or revised pursuant to the Rule.
The Court is bound to follow the Ninth Circuit's decision in Citizens I unless Summers is clearly irreconcilable with that decision. And, as Citizens points out, the challenge at issue in Summers is distinguishable in important respects from the challenge at issue here and in Citizens I. Summers involved a substantive challenge to regulations that exempted certain projects from procedural requirements that would ordinarily apply. The plaintiffs in Summers could not possibly suffer the procedural injury that was the basis of *979 their standing until the regulations were actually applied to specific projects. Once the dispute over the Burnt Ridge Project was settled, the Summers plaintiffs were left with a hypothetical future procedural injury that was insufficient to confer standing. In contrast, the present case involves a challenge, not to the substance of any particular regulation, but to the Forest Service's failure to follow proper procedures when promulgating the 2008 Rule. Citizens has already suffered the procedural injury that forms the basis of its standing; it was injured by the USDA's failure to take a hard look at the environmental consequences of its action. Unlike in Summers, where the injury was the deprivation of Earth Island Institute's opportunity to provide comments on and subsequently appeal a specific decision, here the injury will not become more concrete when the Rule is applied to an LRMP or a site-specific plan.
Furthermore, Citizens' numerous detailed declarations demonstrate that its members have future plans to visit specifically identified sites within the National Forest System in the future. The Ninth Circuit found in Citizens I that such declarations are sufficient to establish that the members have a concrete interest in the aesthetic and recreational value of the National Forest Systeman interest that is jeopardized by the procedural injury they have suffered. The declarations here are not lacking in specificity, as was the declaration in Summers.
It is true that the Summers Court's discussion of procedural injury could be interpreted as prohibiting a challenge based on such an injury unless the plaintiff has concrete plans to visit a specific site that faces the threat of imminent harm as a direct result of the regulation tainted by procedural defects. However, it is not clear that the Supreme Court intended for such a rule to apply when, as here, the procedural injury in question will never be directly linked to a site-specific project. The overarching nature of the plan development rule makes it impossible to link the procedural injury at issue here to any particular site-specific project, whether now or in the future. Waiting to adjudicate the validity of the Rule until an LRMP is revised under it and a site-specific plan is later approved under that LRMP would not present the court with any greater a "case or controversy" with respect to the already-completed procedural violation than exists today. Rather, such an approach would insulate the procedural injury from judicial review altogether. If Citizens is forced to delay seeking redress for its procedural injury until a site-specific plan is approved under a revised LRMP, it would face a statute of limitations defense. The government might also argue that the procedural injury is not sufficiently tied to the project to confer standing. Moreover, it would be a waste of the government's resources if it were to revise an LRMP and approve a site-specific plan, only to have both declared invalid because the 2008 Rule pursuant to which the LRMP was created was procedurally defective.
Although Summers casts doubt upon whether the Ninth Circuit's holding in Citizens I with respect to standing continues in force, the Court cannot conclude that the two cases are clearly irreconcilable. Accordingly, the Court adheres to Citizens I and finds that Citizens has standing to assert its claims. In addition, Summers did not reach the issue of ripeness and thus did not disturb the Ninth Circuit's holding in Citizens I that Citizens' procedural challenges to the 2000 Rule were ripe for review. The present case is indistinguishable from Citizens I with respect to this issue, and the Court *980 therefore concludes that Citizens' procedural challenges are ripe for review.
II. NEPA Claim
"NEPA requires agencies to take a `hard look' at the environmental consequences of their actions by preparing an EIS for each `major Federal action significantly affecting the quality of the human environment.'" The Lands Council v. McNair, 537 F.3d 981, 1000-01 (9th Cir. 2008) (quoting 42 U.S.C. § 4332(C)). "The EIS must `provide [a] full and fair discussion of significant environmental impacts' so as to `inform decisionmakers and the public of the reasonable alternatives which would avoid or minimize adverse impacts or enhance the quality of the human environment.'" Id. at 1001 (quoting 40 C.F.R. § 1502.1). The EIS must discuss:
(i) the environmental impact of the proposed action,
(ii) any adverse environmental effects which cannot be avoided should the proposal be implemented,
(iii) alternatives to the proposed action,
(iv) the relationship between local short-term uses of man's environment and the maintenance and enhancement of long-term productivity, and
(v) any irreversible and irretrievable commitments of resources which would be involved in the proposed action should it be implemented.
42 U.S.C. § 4332(C).
Although the USDA maintains that it prepared a thorough EIS prior to promulgating the 2008 Rule, the EIS does not actually analyze the environmental effects of implementing the Rule. Instead, the EIS repetitively insistsas the USDA insists in connection with the present motion and has insisted since Citizens Ithat the Rule will have no effect on the environment because it merely sets out the process for developing and revising LRMPs and is removed from any foreseeable action that might affect the environment. This position was rejected in Citizens I and Citizens II, and the Court adheres to the reasoning set out in those decisions.
The 2008 Rule eliminates or modifies standards that applied to all LRMPs and site-specific plans. For example, the 2008 Rule does not require that LRMPs and site-specific plans "insure" the viability of existing vertebrate species, as the 1982 Rule did, or even provide a "high likelihood" of viability, as the 2000 Rule did. Instead, the 2008 Rule states a goal of providing a "framework to contribute to sustaining native ecological systems by providing appropriate ecological conditions to support diversity of native plant and animal species in the plan area." 36 C.F.R. § 219.10(b). Although the EIS discusses the differences between the various standards, it fails to acknowledge the effect of eliminating the viability requirement. According to the EIS itself, the requirement was not incorporated in the 2008 Rule because of the practical difficulty of complying with it. It is disingenuous for the USDA now to maintain that it has no idea what might happen if it is no longer required to comply with the requirement. As the Ninth Circuit found, the "USDA's argument . . . that there is no reason to believe that lower environmental safeguards at the national programmatic level will result in lower environmental standards at the site-specific level [] suggests that it conceives of plan development rules merely as exercises in paper-pushing." Citizens I, 341 F.3d at 975. At the very least, the EIS must discuss instances where the USDA has found the viability requirement to be difficult to implement and analyze the impact of no longer having to ensure species viability in those instances. The same is true with the rest of the EIS chapter entitled "Affected Environment *981 and Environmental Consequences." The EIS discusses the differences between the identified alternatives and explains why the USDA prefers Alternative M, but it does not actually discuss the environmental consequences of eliminating the specific protections that are provided in previous plan development rules.
Because the EIS does not evaluate the environmental impacts of the 2008 Rule, it does not comply with NEPA's requirements.
III. ESA Claim
Section 7 of the ESA requires federal agencies to "insure that any action authorized, funded, or carried out by such agency. . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species." 16 U.S.C. § 1536(a)(2). It requires agencies to consult with the FWS or NMFS in connection with any action that "may affect" an endangered or threatened species. 50 C.F.R. § 402.14(a). Citizens II explains the consultation process:
[T]he agency contemplating action must request information from the appropriate federal consulting agency . . . regarding whether any species which is listed or proposed to be listed may be present in the area of such proposed action. [¶] If so, and if the action constitutes a "major construction activity," then the agency is required to produce a biological assessment (or "BA") in accordance with ESA for the purpose of identifying any endangered species or threatened species which is likely to be affected by such action. . . . If the biological assessment concludes that there are no listed species or critical habitat present that are likely to be adversely affected, and the wildlife agency confers, then formal consultation is not required. However, if the biological assessment concludes that listed species are in fact likely to be adversely affected, the agency then must ordinarily enter into formal consultation with the wildlife service.
. . .
Where a proposed action "may affect" endangered and threatened species, but the agency desires to avoid the lengthy and costly process of formal consultation, it may first initiate informal consultation. Informal consultation, which includes all discussions, correspondence, etc., between the agency and the wildlife service, may serve as a precursor to formal consultation. However, if informal consultation results in a finding of no effect, then the consultation process is terminated, and no further action is required. If informal consultation results in a finding, though, that the action is likely to adversely affect listed species or habitat, then subsequent formal consultation is required.
Formal consultation requires the wildlife agency to produce a "biological opinion" that evaluates the nature and extent of the proposed action's effect on the listed species and that, if necessary, posits reasonable and prudent alternatives to the proposed action.
481 F.Supp.2d at 1091-92 (internal quotation marks and citations omitted). The court in Citizens II found that the USDA had failed to comply with the ESA's consultation requirement because the 2005 Rule "may affect" endangered or threatened species, but the USDA did not prepare a BA or engage in consultation of any kind with the FWS or NMFS.
The USDA argues that it has complied with the ESA because it engaged in informal consultations with the wildlife agencies and prepared a BA. Because, in the USDA's view, the BA reasonably concluded *982 that the 2008 Rule would have no effect on endangered or threatened species, the USDA was not required to obtain the wildlife agencies' concurrence or enter into formal consultations.
The Citizens II court found that the 2005 Rule "may affect" endangered and threatened species. The 2008 Rule "may affect" those species for the same reasons. In order to avoid having to enter into formal consultations with the wildlife agencies, the USDA was thus required either to prepare a BA concluding that the Rule was not likely to have an effect and to obtain the agencies' concurrence therewith, see 50 C.F.R. § 402.12(k)(1), or to engage in informal consultations that resulted in a determination, "with the written concurrence" of the agencies, that the Rule was not likely to have an effect, see 50 C.F.R. § 402.13(a). It is undisputed that the USDA did not submit its BA to the FWS or NMFS for their concurrence. And although the USDA engaged in correspondence with the wildlife agencies before it completed its BA, it is also undisputed that the agencies did not issue a written concurrence with the USDA's finding that the 2008 Rule would have no effect on endangered species. Although an agency may be excused from the ESA's consultation requirements if it concludes that its proposed action will have "no effect" on protected species (as opposed to concluding that is "unlikely to affect" protected species), see Sw. Ctr. for Biological Diversity v. U.S. Forest Serv., 100 F.3d 1443, 1447-48 (9th Cir.1996), two courts have rejected USDA's argument that the programmatic nature of the plan development rule necessarily means that it will have no effect on the environment or protected species. The USDA has simply copied those rejected legal arguments in a new document and called it a "Biological Assessment." This is not sufficient to satisfy the ESA's requirements.
IV. Remedy
"Under the APA, the normal remedy for an unlawful agency action is to `set aside' the action. In other words, a court should vacate the agency's action and remand to the agency to act in compliance with its statutory obligations." Se. Alaska Conservation Council v. U.S. Army Corps of Eng'rs, 486 F.3d 638, 654 (9th Cir.2007), rev'd on other grounds, Coeur Alaska, Inc. v. Se. Alaska Conservation Council, ___ U.S. ___, 129 S. Ct. 2458, 174 L. Ed. 2d 193 (2009) (citation and internal quotation marks omitted). Accordingly, the Court vacates the 2008 Rule, enjoins the USDA from further implementing it and remands it to the USDA for further proceedings.
"The effect of invalidating an agency rule is to reinstate the rule previously in force." Paulsen v. Daniels, 413 F.3d 999, 1008 (9th Cir.2005). It appears that the 2000 Rule was in force before the 2008 Rule was promulgated.[1] However, the USDA has expressed in the past its view that the 2000 Rule is unworkable in practice. Accordingly, the agency may choose whether to reinstate the 2000 Rule or, instead, to reinstate the 1982 Rule.
CONCLUSION
For the foregoing reasons, Citizens' motion for summary judgment (Docket No. 40) is GRANTED and the USDA's cross-motion for summary judgment (Docket No. 41) is DENIED. The 2008 Rule is VACATED and REMANDED to the USDA for further proceedings consistent *983 with this order. The clerk shall enter judgment and close the file.
IT IS SO ORDERED.
NOTES
[1] Although the 2000 Rule was challenged in Citizens I, because the USDA announced in 2002 its intent to supersede the 2000 Rule, the challenge was dropped before the validity of the 2000 Rule had been adjudicated.
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632 F. Supp. 1272 (1986)
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 2782, Plaintiff,
v.
UNITED STATES DEPARTMENT OF COMMERCE, Defendant.
Civ. A. No. 84-1352.
United States District Court, District of Columbia.
April 9, 1986.
*1273 Sheldon Cohen, Arlington, Va., for plaintiff.
Mary Coster Williams, Asst. U.S. Atty., Washington, D.C., for defendant.
MEMORANDUM AND ORDER
JACKSON, District Judge.
Plaintiff American Federation of Government Employees, Local 2782 ("AFGE" or "Union"), the collective bargaining representative of employees of defendant's Bureau of the Census ("Bureau"), brings this suit under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, to obtain the release of documents it believes will confirm *1274 its suspicions that the Bureau has engaged in the illegal practice of "preselecting" certain employees for promotion.[1] The Bureau contends that some materials it has withheld are exempt from disclosure under 5 U.S.C. § 552(b)(2), (b)(5), and (b)(6) (Exemptions 2, 5, and 6), and that others are not "agency records" subject to disclosure at all within the meaning of FOIA. The Bureau also justifies its refusal to carry out three searches it was asked to make for responsive materialstwo on the ground that the requests were prohibitively broad and ambiguous, and, in the third case, because its search fee was not tendered. Upon consideration of the parties' cross-motions for summary judgment, the Court concludes that defendant properly withheld the disputed documents and justifiably declined to conduct the searches requested, and will, therefore, grant defendant's, and deny plaintiff's, motion for summary judgment.
I.
The material facts are not in dispute. In December, 1983, AFGE filed a number of FOIA requests with the Bureau (now grouped for purposes of this case as Appeals Nos. 1, 2, and 3) for documents which could substantiate its suspicions of pervasive "preselection" of individual employees for promotion in contravention of the Bureau's established Merit Assignment Program.[2]
Appeal No. 1 involves a request of December 19, 1983, for the contents of seven notebooks, kept in the Administrative Office of the Population Division of the Bureau, containing papers bearing upon Division-initiated requests for personnel actions, including promotions, the most important of which appear to be duplicate copies of "Requests for Personnel Action," known as Standard Form 52's ("SF-52's") for the fiscal years 1981-84.[3] Plaintiff filed an administrative appeal of the Bureau's initial denial of the request in January, 1984, and a final decision was rendered the following May, by which the Bureau released some of the material, and claimed exemptions for the remainder under 5 U.S.C. § 552(b)(5) and (b)(6).
Appeal No. 2 consolidated the Union's requests of December 2 and December 10, 1983, seeking records, notes, or memoranda requesting, recommending, or urging the promotion of employees in certain branches of the Bureau's Population Division. The Bureau initially denied those requests without a search on the ground that any such records, if found, would fall within FOIA Exemptions 5 and 6. During the processing of AFGE's administrative appeal, however, the General Counsel of the Department of Commerce did order that a search for responsive documents be made in nine branches of the Population Division, which turned up some 117 promotion recommendations and one SF-52 seeming to conform to the requests. All were, as anticipated, denied to plaintiff under Exemptions 5 and 6.
Appeal No. 3 involves a request filed December 20, 1983, for the Union to be allowed to "inspect" the following materials:
*1275 A. Every chronological office file and correspondence file, internal and external, for every branch office, staff office, assistant division chief office, division chief office, assistant director's office, associate director's office, deputy director's office, and director's office;
B. Every division or staff administrative office file in the Bureau which records, catalogues, or stores SF-52's or stores promotion recommendation memos, or both; and
C. Every memo recommending promotion of any employee during FY 82 and FY 83 found or known to any branch chief or higher level supervisor employed at the Bureau.
Defendant responded on January 20, 1984, that requests (A) and (B) were too encompassing, and that more particularity of identification, including a finite time period, should be provided. The documents sought by request (C) were denied on the basis of Exemptions 5 and 6, but on appeal, the General Counsel again directed that a search be made, conditioned, however, upon AFGE's advance payment of a search fee of $3,560. The Union declined to pay the fee and no search was ever conducted. The General Counsel affirmed the Bureau's original decision that requests (A) and (B) were so excessive as to obviate any duty to search, with or without a fee.
II.
Appeals Nos. 1 and 2
FOIA Exemption 5 permits the withholding of "inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency ..." 5 U.S.C. § 552(b)(5). The provision has general reference to the rules of civil discovery under the Federal Rules of Civil Procedure, but, as applied to the government, has been held to recognize various so-called "governmental privileges," including the "deliberative process" privilege. EPA v. Mink, 410 U.S. 73, 89, 93 S. Ct. 827, 837, 35 L. Ed. 2d 119 (1973); Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 866 (D.C.Cir.1980); Jordan v. Department of Justice, 591 F.2d 753, 772-74 (D.C.Cir.1978) (en banc).
It is the deliberative process privilege upon which the defendant primarily relies to justify its refusal to give the Union what it wants here, and the primary purpose of the deliberative process privilege is to enable governmental decision-makers "to engage in that frank exchange of opinions and recommendations necessary to the formulation of policy without being inhibited by fear of later public disclosure." Paisley v. CIA, 712 F.2d 686, 697-98 (D.C.Cir.1983) (citations omitted). It also serves to protect the public from the confusion (or worse) which might ensue if agency ruminations, or hypothetical or alternative bases for action not, in fact, officially approved were revealed prematurely. Jordan, 591 F.2d at 772-73; Coastal States, 617 F.2d at 866. The prerequisites for invocation of the deliberative process privilege have been clearly enunciated by the Court of Appeals for this Circuit:
In deciding whether a document should be protected by the privilege we look to whether the document is "predecisional" whether it was generated before the adoption of an agency policy and whether the document is "deliberative" whether it reflects the give-and-take of the consultative process.... [E]ven if [a] document is predecisional at the time it is prepared, it can lose that status if it is adopted, formally or informally, as the agency position on an issue or is used by the agency in its dealings with the public.
Coastal States, 617 F.2d at 866 (emphasis in original). An agency invoking the privilege bears the burden of establishing that documents it withholds are truly of a "deliberative" character, and the specific role the materials play in the process must be articulated with reasonable precision. Paisley, 712 F.2d at 698 (citing Coastal States, 617 F.2d at 868). A reviewing court must consider such factors as whether the documents were composed by a subordinate for use by a superior who actually makes the decision, Coastal States, 617 *1276 F.2d at 868, and whether they purport to express the opinions or recommendations of the author alone or speak authoritatively for the agency.
AFGE suggests two bases upon which the promotion materials SF-52's, draft position descriptions, ranking factor lists, recommendations, and the like must be regarded as without the deliberative process and, thus, not properly withheld from it under Exemption 5. First, it contends that the SF-52's and ancillary papers constitute "final agency actions" of the Population Division, at least and have lost any right to predecisional anonymity they may once have enjoyed. Alternatively, it says, even if the Division-generated SF-52's and other promotion-related documents can legitimately be said to be merely component parts of an agency-wide process of deciding who shall be promoted, they nevertheless constitute a body of "secret law" which by law cannot be kept secret. Coastal States, 617 F.2d at 867.
Plaintiff's reasoning under its first theory is that an SF-52 is utilized by the Population Division to identify a vacancy and cause it to be filled; how the rest of the agency goes about determining if and by whom the position will be filled is immaterial for FOIA purposes. The initiating SF-52's reflect an official determination of the Population Division that someone is needed to do a particular job, which is, in plaintiff's view, a "final" decision because it is no longer open to intradivisional debate.
The Bureau contends that an SF-52, initiated within a division to request a particular personnel action, is merely the culmination of the "deliberative process" within the division. The divisional SF-52, being at that point only a proposal, is then forwarded to the Personnel Division for action in accordance with the Merit Assignment Program, after which it may be subject to still further consideration by other components of the agency, and may in the process undergo a number of changes or be cancelled entirely. It is only the final SF-52, when accompanied by Standard Form 50 ("Notification of Personnel Action"), which has acquired the cachet of "final agency action" of the Bureau.[4]
In short, defendant views the promotion process as an integrated whole. It contends that the SF-52's and related materials contained in the Population Division notebooks are merely duplicates of the personnel action requests originated by the Division to begin the process. And the notebooks are not circulated (or even used by others save a single administrator and her assistant) and contain no information at all as to the ultimate decision, if any, made with respect to particular vacancies.[5]
The Court does not agree with plaintiff that the hiring/promotion processor, for that matter, any other process involving serial consideration of proposed action by more than one person (and a fortiori by separate offices) can be so fractionated that the mesne product at any stage may be treated as discrete final action for purposes of determining the availability of FOIA Exemption 5 for the paperwork. It is supported in its conclusion by the recent case of Dow, Lohnes & Albertson v. Presidential Commission on Broadcasting to Cuba, 624 F. Supp. 572 (D.D.C.1984), in which another judge of this court rejected a similar argument in the context of an attempt to obtain documents relating to government-sponsored radio broadcasts to be beamed to Cuba. Arguing that the critical agency decision was that to broadcast at all, plaintiff in Dow, Lohnes & Albertson contended all subsequent decisions merely implemented the critical policy choice, and were thus beyond the perimeter of the true "deliberative process." The *1277 court disagreed, stating that "[a] decision to `pursue' radio broadcasting is, in effect, a decision to make more decisions." Id. At 574.
By analogy the Population Division's decision in the instant case to initiate the personnel process by an SF-52 requesting that a position be filled is, in essence, a decision to make more decisions with respect to such essential matters as whether the position is needed at all, at what cost and from whose budget, what the successful applicant will be expected to do, and to whom he or she will report, as well as who should be chosen to fill it. The Court concludes that the process, which commences with the dispatch of a division-generated SF-52 and ends with the filling of (or a refusal to fill) the requested position and the issuance of an SF-50, is a continuum of reflection and tentative decision-making, and entitled to claim the deliberative process privilege throughout for all but the last step.[6]
Plaintiff's alternative argument, viz., that promotion-related documents are disclosable because they constitute the "secret law" of the agency is even less convincing. The "secret law" exception to Exemption 5 which various courts have found comprehends unpublished interpretations of regulations or rulings which are unavowedly accorded precedential value by agency personnel in subsequent decisionmaking. See Coastal States, 617 F.2d at 867-68. See also Shlefer v. United States, 702 F.2d 233, 237 (D.C.Cir.1983); Taxation With Representation Fund v. IRS, 646 F.2d 666, 678 (D.C.Cir.1981). Even if, as plaintiff believes, Bureau officials are manipulating the merit system to the subversion of merit principles, the papers with which they are doing so cannot be regarded as "law," secret or otherwise; they are merely evidence of the offense, or at most contraband, and it is unnecessary to decide whether they might be discoverable as such in some other forum to hold that they are surely not available to plaintiff under the "secret law" exception to FOIA Exemption 5.
The non-substantive documents involved in Appeal Nos. 1 and 2 which plaintiff would also like to have are the handwritten "logs" kept in the front of each of the notebooks as a sort of index. The Bureau contends that the logs are not "agency records" under FOIA, having been created by an enterprising employee (i.e., the intermediate administrator) on her own initiative and for her own personal convenience. See Kissinger v. Reporter's Committee for Freedom of the Press, 445 U.S. 136, 155, 100 S. Ct. 960, 971, 63 L. Ed. 2d 267 (1980). Although the term "agency records" is not defined in FOIA, see Forsham v. Harris, 445 U.S. 169, 178, 100 S. Ct. 977, 983, 63 L. Ed. 2d 293 (1980), personal notes which are not intended for distribution through normal agency channels and which cannot be said to be within the "control or dominion" of an agency are ordinarily considered to be beyond the scope of FOIA. See British Airports Authority v. Civil Aeronautics Board, 531 F. Supp. 408, 415-16 (D.D.C.1982); Kalmin v. Department of the Navy, 605 F. Supp. 1492, 1495 (D.D.C.1985). The Court finds that the logs, although undoubtedly work-related, were nevertheless a voluntary piece of unofficial scholarship of an employee who wished only to facilitate her own performance of her duties, and their disclosure can no more be compelled by a request for them under FOIA made to her employer than could, for example, her desk-side telephone directory or day-book.
Appeal No. 3
The Court concludes that the Bureau properly declined to conduct the required searches for items A and B of the request now denominated Appeal No. 3. The statute itself, 5 U.S.C. § 552(a)(3), mandates *1278 that records requested under FOIA be "reasonably described," and the "reasonable description" requirement has been held to be satisfied if a professional employee of the agency who is generally familiar with the subject area can locate the requested records with a "reasonable amount of effort." H.R.Rep. No. 93-876, 93d Cong., 2d Sess. 5-6 (1974). See Goland v. CIA, 607 F.2d 339, 353 (D.C.Cir. 1978), vacated in part, 607 F.2d 367 (D.C. Cir.1979) (per curiam), cert. denied, 445 U.S. 927, 100 S. Ct. 1312, 63 L. Ed. 2d 759 (1980); Marks v. Department of Justice, 578 F.2d 261, 263 (9th Cir.1978). "[B]road, sweeping requests lacking specificity are not permissible." Marks, 578 F.2d at 263 (citation omitted).
AFGE sought to "inspect" (although not yet to copy):
A. Every chronological office file and correspondence file, internal and external, for every branch office, staff office, assistant division chief office, division chief office, assistant director's office, associate director's office, deputy director's office, and director's office;
B. Every division or staff administrative office file in the Bureau which records, catalogs, or stores SF-52's or stores promotion recommendation memos, or both.
To have displayed the materials the Union wanted to peruse, however, would have necessitated, according to defendant, a canvass of some 356 Bureau offices for a multitude of files, all of which would have had to have been reviewed and purged of privileged or exempt information, then reassembled and refiled in the places from whence they had come. The Bureau would have been doing little else for days but waiting on plaintiff's documentary repast had it acceded to the request. Particularly in light of plaintiff's refusal to reformulate its request to make it more specific, as it was invited to do, defendant's rejection of such an audacious demand as too broad was not merely justified; it would have been an improvident expenditure of agency time to have indulged it.
The third portion of the subject of Appeal No. 3 is plaintiff's request for:
C. Every memo recommending promotion of any employee during FY 82 and FY 83 found or known to any branch chief or higher level supervisor employed at the Bureau.
The Bureau determined this request to be of manageable proportions, but it declined to conduct the necessary search without prepayment of a search fee of $3,560, calculated as the estimated cost of searches of the 356 offices, averaging about an hour each at an hourly charge of $10. See 15 C.F.R. § 4.9(c). Although the statute provides that documents "shall be furnished without charge or at a reduced charge where the agency determines that waiver or reduction of the fee is in the public interest because furnishing the information can be considered as primarily benefiting the general public[,]" 5 U.S.C. § 552(a)(4)(A), the public interest in such a quest now is hardly so great as to make a waiver of an appropriate charge for embarking upon it mandatory at the outset. Society undoubtedly has an interest in discovering and subjecting unlawful agency action to public scrutiny, but the Union's allegations of malfeasance here are too ephemeral at the moment to warrant such a search at public expense without further reason to suppose that the corruption suspected will be found. See Eudey v. CIA, 478 F. Supp. 1175, 1177 (D.D.C.1979).
In sum, while AFGE might very well be able to obtain at least some of the requested materials through the usual methods of discovery in a civil suit on the merits of its "preselection" allegations (were it, of course, able to satisfy the usual conditions antecedent to civil discovery on such a scale) it cannot circumvent those conditions by invoking FOIA in aid of the private inquisition it would like to conduct. FOIA requests were never intended to be used as the private equivalent of a grand jury subpoena.
Therefore, for the foregoing reasons, it is, this 9th day of April, 1986,
*1279 ORDERED, that plaintiff's motion for summary judgment is denied; and it is
FURTHER ORDERED, that defendant's motion for summary judgment is granted, and the complaint is dismissed with prejudice.
NOTES
[1] The Court has jurisdiction pursuant to 28 U.S.C. § 1331 and 5 U.S.C. § 552(a)(4)(B).
[2] Plaintiff conjectures that defendant's reluctance to release the documents reflects an awareness that they will reveal that Bureau officials improperly "nominate" individuals to fill the positions they create. It bases its suspicions on various complaints of preselection lodged with it by Bureau employees. The affidavit of a past president of Local 2782 asserts that the Union filed a grievance in November, 1983, on the basis of a copy of a memorandum it was shown recommending the promotion of someone to fill a particular vacancy. The past president states that he personally applied for the vacancy in question, and goes on to surmise that, in reaction to the filing of the grievance, the Bureau cancelled the vacancy rather than risk exposure of its illegal practices. Several other Union-filed grievances were rejected by the Bureau in the absence of supporting evidence, and plaintiff hopes to obtain such evidence by way of this lawsuit.
[3] The notebooks also contain draft position descriptions and ranking factor statements, transmittal slips, employee clearance forms, leave requests, and medical statements.
[4] Defendant has declared its willingness to release all of its final SF-52's, subject to redaction of personal information as necessary to preserve the privacy of the individuals involved.
[5] The notebooks, in fact, were created and are maintained by an intermediate administrator for the sole purpose of keeping track of the personnel requests initiated by her division. By way of her own uncontradicted affidavit, the intermediate administrator avers that she has no decisionmaking authority whatsoever with respect to promotion requests.
[6] That Exemption 5 protects the "deliberative process" involved in making personnel decisions, an area in which candor is particularly important, has been recognized by a number of other courts. See, e.g., Ryan v. Department of Justice, 617 F.2d 781, 791 (D.C.Cir.1980); Allen v. Department of Defense, No. 80-700, slip op. at 8-9 (D.D.C. Feb. 10, 1984); Heimerle v. U.S. Attorney General, 3 GDS ¶ 80,023 at 80,072 (D.D. C.1980).
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545 So. 2d 796 (1989)
Rivard MELSON
v.
Mary Elizabeth COOK.
Civ. 6778.
Court of Civil Appeals of Alabama.
May 17, 1989.
Rivard Melson, pro se.
Mary Elizabeth Cook, pro se.
RUSSELL, Judge.
Cook originally brought suit for rent and obtained a judgment in small claims court. The tenant, Melson, appealed to the circuit court for a trial de novo. After an ore tenus hearing, the circuit court rendered a judgment for Cook for $525. Melson appeals. We affirm.
The dispositive issue is whether the trial court erred in awarding Cook $525 for the rent due for the month of January.
In October 1981 the parties entered into an oral agreement for the lease of a residence on a month-to-month basis. Melson agreed to pay $400 per month in advance as rent.
On November 11, 1987, Cook sent Melson a letter, advising that the rent would be increased to $525 per month, effective January 1, 1988, and asking Melson to let her know if he was going to stay. On or about December 10, 1987, Melson stated that he would not pay the increased rent.
On January 2, 1988, Melson sent Cook a check for $400 as rent for January. Cook returned this check and stated that the rent was now $525. Melson did not vacate the premises until February 1, 1988.
At the outset we note that, where testimony is presented ore tenus, the judgment is given the same weight as a jury verdict and will not be disturbed unless palpably wrong. Harrelson v. Glisson, 424 So. 2d 591 (Ala.1982).
Where a lease is for an indefinite and uncertain term, "there is no valid lease for a term of years, but an estate at will is thereby created." Industrial Machinery, Inc. v. Creative Displays, Inc., 344 So. 2d 743, 745 (Ala.1977). "[A] continuous tenancy upon a monthly rental basis ... is a tenancy at will, commonly called a tenancy from month to month." Arbuthnot v. Thatcher, 237 Ala. 593, 595, 188 So. 245, 246 (1939). A tenant at will is governed by the common law and is thus entitled to no more than reasonable notice to quit. Womack v. Hyche, 503 So. 2d 832 (Ala.1987). We find that it is clear that Melson held a tenancy from month to month. We also find the November 1987 letter to be reasonable notice to quit, under which circumstances, if Melson were to remain a tenant after December 31, 1987, his tenancy would be under a different agreement, i.e., an increase in rent to $525.
*797 In view of the above, we cannot say that the trial court's judgment was palpably wrong.
This case is due to be, and is, affirmed.
AFFIRMED.
INGRAM, P.J., and ROBERTSON, J., concur.
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906 So. 2d 337 (2005)
Kevin G. JALBERT, Appellant,
v.
STATE of Florida, Appellee.
No. 5D04-2135.
District Court of Appeal of Florida, Fifth District.
July 8, 2005.
*338 James S. Purdy, Public Defender, and Leonard R. Ross, Assistant Public Defender, Daytona Beach, for Appellant.
Charles J. Crist, Jr., Attorney General, Tallahassee, and Carmen F. Corrente, Assistant Attorney General, Daytona Beach, for Appellee.
ORFINGER, J.
Kevin G. Jalbert appeals his convictions of one count of promoting a sexual performance by a child in violation of section 827.071(3), Florida Statutes (2001), and fifty-nine counts of unlawful possession of child pornography, in violation of section 827.071(5), Florida Statutes (2001). Jalbert argues that the trial court erred in denying his motion to dismiss the child pornography charges because the State failed to establish that the photographs depicted actual children and were not computer-generated children or adults resembling children. We disagree and affirm.
Jalbert filed an unsworn pre-trial motion to dismiss the child pornography charges, arguing that the State had no evidence that the pictures depicted actual children. After reviewing the photographs, the trial court ruled that "[t]he issues presented are clearly factual in nature for the jury to decide. . . ." Subsequently, Jalbert entered a plea to the charges, resulting in a thirty-year sentence. Although there was no explicit finding that this issue was dispositive, Jalbert reserved the right to appeal the denial of his motion to dismiss.
When considering a motion to dismiss, the trial court cannot decide factual issues, determine the weight to be given to conflicting evidence or assess the credibility of witnesses. State v. Feagle, 600 So. 2d 1236, 1239 (Fla. 1st DCA 1992). To the contrary, the trial court must construe *339 all evidence and inferences in a light most favorable to the State. Vanhoosen v. State, 469 So. 2d 230, 231-32 (Fla. 1st DCA 1985). The State is not obligated to produce evidence sufficient to sustain a conviction. Feagle, 600 So.2d at 1239. "As long as the State shows the barest prima facie case, it should not be prevented from prosecuting." Vanhoosen, 469 So.2d at 232.
The question of whether the photographs depicted actual children is a question of fact, not law, and is appropriate for the trier of fact to determine. See U.S. v. Farrelly, 389 F.3d 649 (6th Cir.2004); U.S. v. Rearden, 349 F.3d 608 (9th Cir.2003). Jalbert's speculation that the photographs may have been computer-generated "virtual" children or adults who resemble children is insufficient to cause the dismissal of the information against him. See U.S. v. Vig, 167 F.3d 443 (8th Cir.1999).[1]
AFFIRMED.
PALMER and TORPY, JJ., concur.
NOTES
[1] Based on Ashcroft v. Free Speech Coalition, 535 U.S. 234, 122 S. Ct. 1389, 152 L. Ed. 2d 403 (2002), had this case proceeded to trial, the State would have been required to prove that the photographs and images depicted actual children in order to sustain a conviction. See U.S. v. Hilton, 386 F.3d 13 (1st Cir.2004); see also U.S. v. Slanina, 359 F.3d 356 (5th Cir.2004); U.S. v. Ellyson, 326 F.3d 522 (4th Cir.2003).
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884 N.E.2d 262 (2007)
CITY OF WARSAW and R. Paul Schmitt, Appellants-Defendants,
v.
Richard ORBAN and Jan Orban, Appellees-Plaintiffs.
No. 49A05-0607-CV-404.
Court of Appeals of Indiana.
December 31, 2007.
*264 Mark D. Ulmschneider, Andrew L. Teel, Steele, Ulmschneider & Malloy, Fort Wayne, IN, Attorneys for Appellants.
James R. Fisher, Debra H. Miller, Miller & Fisher, LLC, Indianapolis, IN, Attorneys for Appellees.
OPINION
BAILEY, Judge.
Case Summary
The City of Warsaw ("City") and R. Paul Schmitt ("Detective Schmitt") appeal following the denial of their motion to correct error, which challenged a judgment in favor of Richard Orban and Jan Orban (collectively "the Orbans") upon a claim for conspiracy to violate civil rights under 42 U.S.C. § 1983 and a claim for conspiracy to criminally convert property. We reverse.
Issues
The City and Schmitt present multiple issues for review, which we consolidate and restate as the following two dispositive issues:
I. Whether the trial court improperly permitted the jury to determine liability upon the § 1983 claim in contravention of the order of partial remand issued by the United States District Court for the Southern District of Indiana; and
II. Whether the evidence is sufficient to support the judgment against Schmitt for conspiracy to criminally convert property.
Facts and Procedural History
In 1997, David Melching ("Melching") owned D.A. Melching Construction Company in Warsaw, Indiana and wanted to open a carpet business at the same location. Jan Orban ("Jan") was the construction company bookkeeper, and advised Melching that her husband Richard Orban ("Richard") might be interested in a partnership. Melching and Richard opened Carpet Express in October of 1997, and their partnership agreement was executed on January 2, 1998. Richard acted as the store manager, for a salary of $80,000.00. Jan added Carpet Express to her bookkeeping duties, receiving a salary of $40,000.00. Melching was to receive annual rent of $24,000.00. In 1998, the gross sales of Carpet Express were $1,230,891.00 and the net profit was $22,000.00.
Soon after the partnership was formed, each partner began to suspect or accuse the other of misappropriation of funds, either by taking cash or making unauthorized expenditures with company funds. Jan claimed that Melching pocketed funds from a carpet installation as Melching contended that he was due funds for a cabinet/countertop quote. Melching claimed that employees alerted him that the Orbans were accumulating cash in a suspicious manner.
A break-in occurred at Carpet Express in August of 1998; the burglars were apprehended and found to have little cash.[1]*265 However, Richard reported to the investigating officers that several thousand dollars cash from a recent carpet sale was missing from the hiding place where he had secreted it (a telephone book). An insurance claim was made for several thousand dollars.
Melching, his wife, and their attorney went to the Kosciusko County Prosecutor, Charles Waggoner ("Waggoner"), with accusations that the Orbans had been stealing company funds by making cash sales and not reporting those sales. Detective Schmitt, who had been assigned to act as a liaison between the City of Warsaw police department and the prosecutor's office, sat in on the meeting. Detective Schmitt recommended that the Prosecutor request an investigation by an Indiana State Police officer trained to investigate white-collar crime. Trooper Thomas Littlefield ("Trooper Littlefield") was assigned to conduct an investigation.
Trooper Littlefield and Detective Schmitt interviewed Carpet Express employees and subpoenaed bank records. Eventually, Trooper Littlefield signed a probable cause affidavit to obtain a search warrant for records maintained by the Orbans. The search warrant was executed and yielded two computers, for which Jan provided incorrect passwords. The Orbans' attorney advised Detective Schmitt that an accurate password would be forthcoming when the computers were removed from Carpet Express and "secured." (Tr. 941.) At least one computer was allowed to remain at the premises of Carpet Express, for the use of D.A. Melching Construction bookkeeper, Kristie Shepler ("Shepler").
On June 25, 1999, the Orbans petitioned for the appointment of a Receiver. When the Receiver took over Carpet Express, he was surprised to find that it was "not a going business" (Tr. 436) but rather was "insolvent" and had "no value." (Tr. 489.) A single creditor, Key Bank, was owed more than the asset value and there was "nothing for general creditors." (Tr. 454.) The Receiver determined that Carpet Express had debt of $238,963.84 plus taxes due. From the sale of assets, Key Bank netted $28,356.84.
Around the time that the search warrant was executed, Detective Schmitt or Waggoner contacted the Indiana Department of Revenue and a Department supervisor assigned criminal investigator Rick Albrecht ("Agent Albrecht") to investigate possible tax evasion. Agent Albrecht was provided with nine banker boxes of Carpet Express documents. Lacking computer access to QuickBooks via password, Shepler and Agent Albrecht downloaded data from a computer onto a disk and sent the disk to Intuit, an information technology services company, so that a new disk could be created and hard copies of Carpet Express records could be printed.
The Orbans were charged with ten felony counts each (nine initiated by Agent Albrecht),[2] and Richard was additionally charged with insurance fraud. They surrendered themselves for arrest, but were never incarcerated. A year and a half later, the charges were dismissed after the trial court granted a motion to suppress. The evidentiary ruling adverse to the State indicated that documents were released from the Orbans' personal files by their accountant without the Orbans' waiver of the privilege afforded under Indiana Code *266 Section 25-2.1-14 et seq. See Orban v. Krull, 805 N.E.2d 450, 452 (Ind.Ct.App. 2004). Furthermore, the trial court presiding at the suppression hearing found that materials seized pursuant to the search warrant had not been adequately catalogued or secured.
On June 13, 2001, the Orbans brought a § 1983 claim, and also alleged criminal conversion, spoliation of evidence, slander, conspiracy, and abuse of process, naming as defendants the State of Indiana, Indiana Department of Revenue, City of Warsaw, Paul Schmitt (individually), Rick Albrecht (individually), David A. Melching and D.A. Melching & Associates, Inc. The City and Detective Schmitt removed the matter to federal court and the Orbans sought remand to the state court. On October 16, 2001, the United States District Court for the Southern District of Indiana remanded claims against the State and claims arising under state law.
On May 13, 2002, the Marion Superior Court granted the Orbans a default judgment against Melching and D.A. Melching & Associates, Inc. in the amount of $3,275,000.00. The § 1983 claims against the State of Indiana, the Indiana Department of Revenue, and the City of Warsaw were dismissed, as well as the claim for slander against all defendants. Motions for summary judgment filed by the State and by the City of Warsaw and Schmitt were denied; their attempts to pursue an interlocutory appeal were also denied. The City of Warsaw and Detective Schmitt moved for a trial separate from that of the State defendants, which the State opposed. The Orbans joined in the motion to sever. Their memoranda to the trial court stated that their intention was to try all claims against the City of Warsaw and Detective Schmitt in federal court. The motion was denied and a joint trial ensued in the Marion County Superior Court.
At the conclusion of trial, the Orbans moved to dismiss several of their claims. The trial court granted the motion to dismiss various claims, including Conversion, Spoliation of Evidence, Abuse of Process, and Conspiracy to Violate the Orbans' Civil Rights by Prosecuting False Charges (except as to Detective Schmitt and Agent Albrecht), and Conspiracy to Convert Richard Orban's Business Interest (except as to Schmitt). Detective Schmitt moved for dismissal of the § 1983 claim against him because it had been removed to federal court. The motion was denied. The jury was instructed on three claims: the § 1983 deprivation of civil rights claim against Albrecht, the § 1983 deprivation of civil rights claim against Schmitt, and a Conspiracy to Commit Conversion claim against Schmitt and the City.
On June 29, 2006, the jury returned three verdicts, each in favor of the Orbans. The Orbans were awarded $1,575,000.00 against Agent Albrecht on Verdict Form 1 (captioned Violation of Constitutional Rights) and $400,000.00 against Detective Schmitt on Verdict Form 3 (captioned Conspiracy to Convert Assets). On Verdict Form 2 (captioned Conspiracy to Violate Constitutional Rights), the jury "found against" Agent Albrecht and Detective Schmitt but did not specify a dollar amount (as the trial court had specified that the proper procedure was determination of liability for conversion in state court and a forthcoming assessment of damages in federal court). A judgment was entered against Detective Schmitt for $400,000.00 and against the City for $300,000.00 (reduced by statute). Judgment was entered against Agent Albrecht for $1,575,000.00.
The Orbans filed for attorney's fees pursuant to 42 U.S.C. § 1988 and were awarded $681,948.84 against Agent Albrecht *267 only.[3] The City and Schmitt filed a Motion to Correct Error, which was deemed denied. Detective Schmitt and the City appeal.[4]
Discussion and Decision
I. Compliance with Order Remanding § 1983 Claims
Schmitt contends that the state court jury should not have been permitted to determine his liability for an alleged § 1983 violation in this case. Count I of the Orbans' complaint alleged that the defendants acted with malice and violated § 1983 when they "caused a criminal prosecution to be instituted and to be continued against Richard Orban and Janet Orban without probable cause" and
knowingly cause[ed] a wholly unwarranted criminal prosecution to be brought, in making knowingly false statements to the Kosciusko County Prosecutor to induce him to file charges, in causing the arrest of Richard Orban and Janet Orban, and in withholding, covering up, and destroying exculpatory evidence . . . violated Richard Orban's and Janet Orban's right to be free from unreasonable seizure, in violation of the Fourth Amendment and Fourteenth Amendments to the Constitution of the United States, and right to procedural and substantive due process, in violation of the Fifth and Fourteenth Amendments to the Constitution of the United States.
(App.75.)
The relevant federal statute provides, in pertinent part, that
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress[.]
42 U.S.C. § 1983. Section 1983 provides a civil remedy against a person who, under color of state law, subjects a United States citizen to the deprivation of any rights, privileges, or immunities secured by the federal Constitution or federal laws. Long v. Durnil, 697 N.E.2d 100, 105 (Ind.Ct. App.1998), trans. denied. In order to recover damages under § 1983, a plaintiff must show that (1) he held a constitutionally protected right, (2) he was deprived of this right, (3) the defendant acted with reckless indifference to cause this deprivation, and (4) the defendant acted under color of state law. Id. Section 1983 was designed to prevent the states from violating the Constitution and certain federal statutes and to compensate injured plaintiffs for deprivations of those federal rights. Culver-Union Twp. Ambulance Serv. v. Steindler, 629 N.E.2d 1231, 1233 (Ind.1994).
Five rules have emerged regarding whether an entity is a "person" within the meaning of § 1983:(1) a municipality, municipal official, local governmental unit or political subdivision may be sued for retrospective (monetary) or prospective (injunctive) relief;[5] (2) a state or state *268 agency may not be sued under § 1983 regardless of the type of relief requested; (3) a state official cannot be sued in his official capacity for retrospective relief but can be sued for prospective relief; (4) a state official can be sued in his individual capacity for retrospective relief; and (5) an entity with Eleventh Amendment immunity in federal court is not considered a § 1983 "person" in state court. Ross v. Indiana State Bd. of Nursing, 790 N.E.2d 110, 117 (Ind.Ct.App.2003).
After removal of the § 1983 claims to federal court, the State of Indiana asserted its Eleventh Amendment privilege.[6] Each state is a sovereign entity in our federal system, and it is inherent in the nature of sovereignty not to be amenable to the suit of an individual without its consent. Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 54, 116 S. Ct. 1114, 134 L. Ed. 2d 252 (1996).
Accordingly, on October 16, 2001, the United States District Court for the Southern District of Indiana issued an order remanding some claims. The remand order provided in pertinent part:
Plaintiffs' motion to remand is granted in part, to the extent that all federal claims against the State of Indiana and against state officials in their official capacities and all claims arising under state law are hereby REMANDED to the Marion Superior Court. Plaintiffs' claims arising under federal law against defendants City of Warsaw, Schmitt, David A. Melching, and D.A. Melching & Associates, Inc. remain pending in this court.
(App.82.) The federal court stayed the federal proceedings "subject to the ability of any party to move at any time to lift the stay if circumstances should warrant it or if the party wishes to be heard further." (App.83.)
At the outset of trial in the Marion Superior Court, the attorney for the City of Warsaw and Detective Schmitt questioned what would survive in federal court if the Orbans lost the state claim and the trial court responded, "I think it's the 1983 claim." (Tr. 12.) When asked how the federal court would deal with it if the Orbans received a money judgment, the trial court responded, "That's Judge Hamilton's mess." (Tr. 12.) However, after the presentation of the evidence, the trial court denied the motion to dismiss the § 1983 claim against Detective Schmitt. The trial court implemented the procedural plan that the existence of a conspiracy, if any, would be determined by the state court jury and the federal court would subsequently determine what monetary damages were appropriate, if any, for a § 1983 violation.
Allowing the state court jury to determine Detective Schmitt's liability for a "conspiracy" to deprive the Orbans of their civil rights (thereby violating § 1983) is in direct violation of the District Court remand order providing that claims "arising under federal law" against the City of Warsaw and Detective Schmitt remained pending in that court. The substance of *269 the Orbans' claim of "conspiracy to violate § 1983" is such that the claim arises under federal law. A "conspiracy" to violate § 1983 is not a violation of a state statute independent of a § 1983 violation.
The state court jury effectively returned an advisory verdict on the pending § 1983 claim in contravention of the District Court remand order. A judicial determination by the federal courts on removal is binding on the state court, as first recognized by our Indiana Supreme Court in State ex rel. Allis-Chalmers Mfg. Co. v. Boone Circuit Court, 227 Ind. 327, 86 N.E.2d 74 (1949). Jurisdiction over the § 1983 claim remained with the federal court pursuant to its remand order, thus the trial court erred by entering judgment upon the jury verdict. See City of Marion v. Howard, 832 N.E.2d 528, 531 (Ind.Ct. App.2005) (observing that subject matter jurisdiction must exist in order for an entry of judgment to be valid), trans. denied. Accordingly, the judgment entered upon the § 1983 verdict against Schmitt is void.
II. Sufficiency of the Evidence State Law Claim
The Orbans also alleged that Detective Schmitt conspired with Agent Albrecht and Melching to facilitate Melching's taking of Richard's share of some Carpet Express assets. There is no cause of action for conspiracy in Indiana, but there is a cause of action for damages resulting from conspiracy. Huntington Mortg. Co. v. DeBrota, 703 N.E.2d 160, 168 (Ind.Ct.App.1998). A civil conspiracy has been defined as "a combination of two or more persons engaging in a concerted action to accomplish an unlawful purpose, or to accomplish some lawful purpose by unlawful means." Hardy v. South Bend Sash & Door Co., 603 N.E.2d 895, 902 (Ind.Ct.App.1992), trans. denied. Here, it is alleged that the actors conspired to accomplish an unlawful purpose, the criminal conversion of assets.
In addressing a claim of insufficient evidence, we will not reweigh the evidence nor judge the credibility of witnesses, but will consider only the evidence most favorable to the verdict. Summit Account and Computer Serv., Inc. v. RJH of Fla., Inc., 690 N.E.2d 723, 727 (Ind.Ct.App.1998), trans. denied. If substantial evidence of probative value supports the verdict, it will not be set aside. Id.
The evidence produced by the Orbans in an attempt to demonstrate a conspiracy against them is as follows. Detective Schmitt, who did not know the Orbans, was assigned to conduct an investigation of an alleged theft reported to the Kosciusko County Prosecutor. Detective Schmitt interviewed witnesses identified by Melching as employees having relevant knowledge. He formed the opinion that the Orbans had stolen Carpet Express funds. Detective Schmitt executed a search warrant procured by a State Police investigator. Although it was outside his geographical jurisdiction, Detective Schmitt contemporaneously served upon the Orbans a protective order that had been procured by the Melchings with the assistance of their attorney. Detective Schmitt or Waggoner contacted the Indiana Department of Revenue, and Agent Albrecht was assigned to investigate suspected tax fraud.
Melching gave Agent Albrecht a copy of the Carpet Express annual tax return, signed by Richard, which Agent Albrecht filed without the Orbans' express knowledge. From his review of Carpet Express records, Agent Albrecht identified 113 transactions as "not posted" but was "wrong on 25 or 30 invoices not being included." (Tr. 728, 733.) One of the seized business computers was allowed to remain at Carpet Express, where it was *270 accessible by Melching or his employees.[7] Jan testified that Carpet Express business records were not adequately "protected" and only 20-25% of their records "ultimately survived the process of being seized." (Tr. 286.) When the protective order was terminated, the Orbans returned to Carpet Express, but found that the lock had been changed and there was a patrol car outside.[8]
Prosecutor Waggoner decided to pursue criminal charges against the Orbans. The Orbans were arrested (although not incarcerated) and were subjected to negative media publicity. A potential employer decided to have no further contact with Richard after she talked to Agent Albrecht. Detective Schmitt communicated with Richard's daughter Dawn concerning the charges and she provided "a lead" which evidently did not come to fruition. (Tr. 1482.) The Orbans postulated that Dawn felt threatened (although she did not testify at trial and Richard testified that he had not known her whereabouts for the preceding three years).
In short, the Orbans adduced evidence arguably tending to show that the investigators were very accommodating to Melching, at times were negligent or unprofessional, and failed to adequately protect the Orbans' interests in seized materials. The Orbans insisted that the investigators believed the wrong business partner and that they were wrongfully accused. At the time of the instant trial, both the expert witnesses and occurrence witnesses conceded that it was impossible to establish which partner, if either, stole Carpet Express funds. All criminal charges against the Orbans had been dismissed. Nevertheless, Prosecutor Waggoner, Detective Schmitt and Agent Albrecht remained convinced of the Orbans' wrongdoing. Assuming that this conclusion is ill-founded and that Detective Schmitt and Agent Albrecht made mistakes that were prejudicial to the Orbans, this does not establish the formation of a conspiracy to assist Melching in criminally converting assets. Indeed, the Orbans' witnesses uniformly testified that they lacked knowledge of a conspiracy.
On the face of it, the acts performed by Detective Schmitt appear to be an exercise of his duties within the scope of public employment, for which the Indiana Tort Claims Act provides immunity. See Indiana Code § 34-13-3-3(8).[9] This Act expresses a legislative policy to protect the State's finances while ensuring that public employees can exercise their *271 independent judgment necessary to carry out their duties without the threat of litigation over decisions made within the scope of their employment. Noble County v. Rogers, 745 N.E.2d 194, 197 (Ind.2001). To the extent that acts outside the scope of employment are alleged,[10] the Orbans still bore the burden of establishing that Detective Schmitt conspired with Melching to criminally convert property. Criminal conversion is the knowing or intentional exertion of unauthorized control over property of another person. See Ind.Code § 35-43-4-3.
The Orbans did not show that Detective Schmitt, a law enforcement officer of twenty-seven years, or Agent Albrecht, a twenty-six year veteran of the Indiana Department of Revenue, with some improper motivation, planned with Melching to commit an unlawful act against the Orbans. These investigators (who were not previously acquainted with each other, with Melching, or with the Orbans) carried out investigations to which they were assigned by their superiors. While some tasks may have been performed negligently or over-zealously, this falls far short of the culpability necessary to constitute assisting criminal conversion.
Furthermore, assuming that control of Carpet Express was wrongfully shifted to Melching, evidence of monetary damages was wholly lacking. No formal business valuation was submitted into evidence to establish what value, if any, was taken from partner Richard.[11] Nevertheless, by all testimonial accounts, Carpet Express was undercapitalized and its debt exceeded its assets. The Receiver was unable to conduct an ongoing business. Unsecured creditors received nothing in liquidation and the primary secured creditor received a small portion of what it was due. At best, Melching converted to himself a half-interest in an insolvent business.
The Orbans did not present sufficient evidence to permit the jury to conclude that Detective Schmitt committed conspiracy to criminally convert property.
Conclusion
The City of Warsaw and Detective Schmitt were entitled to relief upon their motion to correct error, inasmuch as the advisory jury verdict upon the § 1983 claim against Schmitt was in violation of the District Court remand order, and the verdict upon the conspiracy to criminally convert property is not supported by sufficient evidence.
Reversed.
BAKER, C.J., and VAIDIK, J., concur.
ORDER
On December 31, 2007, the Court handed down its opinion in this appeal marked Memorandum Decision, Not for Publication. The Appellants, by counsel, have filed a Motion to Publish.
Having considered the matter, the Court FINDS AND ORDERS AS FOLLOWS:
*272 1. The Appellants' Motion to Publish is GRANTED and this Court's opinion heretofore handed down in this cause on December 31, 2007, marked Memorandum Decision, Not for Publication is now ORDERED PUBLISHED.
BAKER, C.J., and VAIDIK, J., concur.
NOTES
[1] Detective Schmitt later interviewed the burglars separately, after they were incarcerated. Each burglar independently claimed to have found less than $100.00 at Carpet Express.
[2] The charges included corrupt business influence, money laundering, perjury, theft, failure to remit sales tax, filing a false income tax return and maintaining two sets of books.
[3] Pursuant to 42 U.S.C. § 1988, the "prevailing party" in a § 1983 action may be awarded attorney's fees as part of the costs of the underlying action.
[4] Agent Albrecht and the State of Indiana are not active parties to this appeal.
[5] Although a municipality may be liable under § 1983 for a deprivation of federal rights, a municipality may not be vicariously liable under § 1983 for the acts of its employees by application of the doctrine of respondeat superior. City of Hammond v. Cipich, 788 N.E.2d 1273, 1281 (Ind.Ct.App.2003), trans. denied. Accordingly, a municipality may be liable only if the deprivation is caused by acts that are essentially acts of the municipality itself, such as tortious conduct pursuant to a municipality's "official policy." Id.
[6] The Eleventh Amendment provides: "The Judicial Power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." U.S. CONST. AMEND. XI.
[7] Albrecht retained documents printed from the computer. He testified that he customarily conducted a review of printed documents rather than computer files. He also testified that the Indiana Department of Revenue did not employ a certified forensic examiner to examine computer files.
[8] The tenor of the direct examination of Jan Orban implied that the Orbans were intimidated by the presence of a patrol car such that they decided to leave the business premises. For example, counsel emphasized the fact that an officer typically carries a gun. However, each of the Orbans testified that they were already leaving when they observed the police vehicle. Jan testified "as we walked back [after deciding to get out of here], I noticed this vehicle" (Tr. 280), and Rick testified that after he and Jan decided to leave, Jan pointed out a police car that he "didn't even notice." (Tr. 946.)
[9] This subsection, commonly referred to as the law enforcement immunity provision of the Indiana Tort Claims Act, provides:
A governmental entity or an employee acting within the scope of the employee's employment is not liable if a loss results from the following: . . .
(8) The adoption and enforcement of or failure to adopt or enforce a law (including rules and regulations), unless the act of enforcement constitutes false arrest or false imprisonment.
[10] Arguably, the Orbans alleged that Detective Schmitt performed an act outside the scope of his employment when he served the protective order outside his jurisdiction. Detective Schmitt could not specifically recall whether or not the trial court that issued the search warrant and protective order asked him to serve the protective order along with the search warrant.
[11] In contesting the Motion to Correct Error, the Orbans claimed that the admission into evidence of their default judgment against Melching somehow established a business value for purposes of the instant litigation. However, the Orbans did not seek admission of the default judgment document on this basis, and the parties entered into no such stipulation. The Receiver and Melching testified that the business was insolvent and the Orbans offered no contradictory evidence.
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54 Pa. Commw. 419 (1980)
Nancy A. Bogucki, Petitioner
v.
Commonwealth of Pennsylvania, Unemployment Compensation Board of Review, Respondent.
No. 998 C.D. 1979.
Commonwealth Court of Pennsylvania.
Argued September 11, 1980.
October 30, 1980.
Argued September 11, 1980, before Judges MENCER, ROGERS and WILLIAMS, JR., sitting as a panel of three.
*420 Dorean D. Nelson, for petitioner.
Richard Wagner, Chief Counsel, with him, James K. Bradley, Assistant Attorney General, and Harvey Bartle, III, Acting Attorney General, for respondent.
OPINION BY JUDGE ROGERS, October 30, 1980:
Nancy A. Bogucki has appealed from an order of the Unemployment Compensation Board of Review (Board) denying her unemployment compensation benefits on the ground that she was not "able to work and available for suitable work." Section 401(d) of the Unemployment Compensation Law, Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 801(d) (Law).
Ms. Bogucki was last employed as a cook by Sweet Williams Restaurant in Greensburg, Pennsylvania. Her last day of work was January 13, 1979. At that time, she informed her employer that, due to pregnancy, she could no longer perform her duties as a cook. Ms. Bogucki requested lighter work from her employer and, upon being told that no lighter work was available, she accepted a leave of absence running from January 15, 1979 to July 30, 1979. Ms. Bogucki thereafter applied for unemployment benefits which were denied by the Bureau (now Office) of Employment Security. Ms. Bogucki appealed this determination and a referee's hearing was held, at which only Ms. Bogucki appeared and testified. The referee affirmed the Bureau's determination, concluding that Ms. Bogucki was ineligible for benefits not only under Section 401(d) of the Law but also *421 under Section 402(b)(1) of the Law, 43 P.S. § 802 (b)(1) which provides that a person is ineligible for unemployment compensation benefits for any week in which unemployment is due to voluntarily leaving work without cause of a necessitous and compelling nature. Ms. Bogucki appealed the referee's decision to the Board. The Board, without taking additional evidence, held that Section 402(b)(1) of the Law did not apply in this case. However, the Board also held that Ms. Bogucki was ineligible for unemployment compensation benefits under Section 401(d) because, by voluntarily accepting a leave of absence, she was not "able to work and available for suitable work."
Ms. Bogucki contends that the Board erred in determining that she was not able to work and available for work solely because she accepted a leave of absence due to pregnancy. We agree. The Board found as fact that Ms. Bogucki "is not able and available for suitable work during the period at issue." The Board's discussion in its opinion makes it clear that this finding of unavailability was based upon Ms. Bogucki's acceptance of a leave of absence due to pregnancy. However, in circumstances substantially identical to those of the case, we have held that the pregnant woman's acceptance of a leave of absence is not voluntary and that she cannot for this reason alone be held to be ineligible under Section 401(d) of the Law. Hamelers v. Unemployment Compensation Board of Review, 48 Pa. Commw. 121, 408 A.2d 1198 (1979); Defeo v. Unemployment Compensation Board of Review, 38 Pa. Commw. 161, 392 A.2d 337 (1978). Accordingly, we will reverse the Board's order.
There remains the need to determine whether or not Ms. Bogucki was able to work and available for suitable work. It is not required, however, that we remand this case for a factual determination of Ms. *422 Bogucki's initial availability. Defeo v. Unemployment Compensation Board of Review, supra. Ms. Bogucki's testimony and her doctor's certification, neither of which is controverted, show she was able to do light work and was available for any such work when she applied for unemployment compensation in January 1979 and at the time of the referee's hearing in February 1979. Having met the requirement of Section 401(d) of the Law, Ms. Bogucki was eligibile until April 15, 1979, after which time, according to the doctor's certification, Ms. Bogucki would no longer be able to work.[1]
ORDER
AND NOW, this 30th day of October, 1980, the order of the Unemployment Compensation Board of Review is reversed.
NOTES
[1] The Board, relying upon Molnar v. Unemployment Compensation Board of Review, 40 Pa. Commw. 518, 397 A.2d 869 (1979), argued that Ms. Bogucki, as a pregnant woman, cannot rely upon the rebuttable presumption that one who registers for work with the Office of Employment Security meets the requirements of Section 401(d) of the Law, i.e., is able and available to do suitable work. However, in Molnar, the presumption was rebutted by the severe and enduring limitations placed upon the claimant's employability by allergies to dust, smoke, fumes and particulate matter and by Molnar's intention to accept only temporary employment. We cannot say as a rule of law that pregnancy has as drastic an effect upon a woman's employability as the conditions present in Molnar. Indeed, many expectant mothers work far into their pregnancy. Nor can we say that all pregnant women will accept only temporary employment. Thus, the determination of whether or not the presumption is rebutted must be made on a case by case basis.
In the instant case, it is not necessary to invoke the presumption because Ms. Bogucki's testimony and her doctor's certification show that she was available for work. Even if the presumption were to be used, there is no evidence in the record, other than the fact of pregnancy, which would tend to rebut the presumption.
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178 Cal. App. 4th 139 (2009)
In re J.O. et al., Persons Coming Under the Juvenile Court Law.
LOS ANGELES COUNTY DEPARTMENT OF CHILDREN AND FAMILY SERVICES, Plaintiff and Respondent,
v.
MARTIN O., Defendant and Appellant.
No. B211535.
Court of Appeals of California, Second District, Division Four.
September 9, 2009.
*143 Lori Fields, under appointment of the Court of Appeal, for Defendant and Appellant.
Raymond G. Fortner, County Counsel, James M. Owens, Assistant County Counsel, and Byron G. Shibata, Associate County Counsel, for Plaintiff and Respondent.
OPINION
MANELLA, J.
Appellant Martin O. is the alleged father of J.O. (J.O.I), a 17-year-old girl, B.O., a 16-year-old boy, and J.O.II, a 14-year-old boy (collectively, the O children or the children).[1] Appellant contends the trial court erred in ruling he was not the children's presumed father and in making jurisdictional findings under Welfare and Institutions Code, section 300, subdivisions (b) and (g) based on appellant's failure to provide support for many years.[2] Appellant further contends the court failed to properly comply with the procedures of the Indian Child Welfare Act of 1978 (25 U.S.C. § 1901 et seq.; ICWA). We conclude the court erred in ruling that appellant was not the O children's presumed father. However, the court's jurisdictional finding under section 300, subdivision (g) was supported by substantial evidence and is affirmed. We remand for entry of an order declaring appellant the presumed father and for compliance with ICWA procedures.
*144 FACTUAL AND PROCEDURAL BACKGROUND
The O children were detained, along with their three half siblings, in June 2008 as a result of the alleged physical and sexual abuse of J.O.I.[3] The court sustained findings under section 300, subdivision (a) (serious physical harm), subdivision (b) (failure to protect), subdivision (d) (sexual abuse) and subdivision (g) (no provision for support). Under subdivision (a), the court found that Mother "used a safety pin and a knife to scrape ink marks, which [Mother] believed to be tattoos, from the skin on [J.O.I's] wrist and leg" and had on prior occasions "inappropriately and excessively physically disciplined [J.O.I] by pulling [her] hair and striking [her] face."[4] Under subdivision (d), the court found that Carlos "made sexual comments and gestures toward [his stepdaughter J.O.I], causing the child to feel sexually threatened," including "fondling her legs and vaginal area over her clothing."
In two findings that pertained to appellant, the court found under section 300, subdivisions (b) and (g), that appellant "failed to provide the children with the necessities of life including food, clothing, shelter and medical care."[5]
After detention, the O children were placed in a series of foster homes. DCFS investigated Mother's relatives for placement. A maternal aunt who volunteered to accept custody had a prior history with DCFS, which rendered her unacceptable. Other maternal relatives who volunteered to assume custody required waivers for various reasons.[6] Accordingly, the children remained in foster care.[7]
In multiple interviews, Mother informed the caseworker that appellant was the father of the O children and that he was living in Mexico after spending time in Missouri. The caseworker located appellant in Mexico. He confirmed that he was the children's father. Appellant reported that he and Mother had never been married and that they broke off their relationship when she *145 became involved with Carlos. Appellant claimed that while living in Missouri he had sent Mother money "a couple of times." Appellant told the caseworker he was "interested" in getting custody of the children. The caseworker spoke with a maternal aunt (Mother's sister) who said that appellant went to Missouri for work-related reasons when J.O.I was in preschool and that when appellant was ready for his family to follow, Mother informed him she had become involved with Carlos. J.O.I reported that she had last spoken with her "dad," referring to appellant, approximately three years previously. B.O. reported that appellant stopped calling "a long time ago," and that the family had had no contact with him in years. J.O.II said he spoke with his "dad," referring to appellant, when he was five (J.O.II turned five in the year 2000) and wished to speak with him again. DCFS obtained the birth certificates for the children, which identified appellant as their father.
Prior to the detention hearing on June 23, 2008, Mother filled out a paternity questionnaire under penalty of perjury. It stated that appellant had not signed papers establishing paternity at the hospital and had never been married to Mother. However, according to the questionnaire, Mother and appellant were living together at the time of the children's birth and appellant held himself out as the children's father and accepted the children openly in his home. At the hearing, Mother was questioned by the court and confirmed that all three of the O children had lived with appellant from their births until the couple separated in 1996. She stated that appellant last had telephonic contact with the children sometime around 1999. The court found true that appellant had held himself out as the children's father and openly accepted the children into his home, but deferred a finding on his status as a presumed father.
On July 22, 2008, the court appointed counsel to represent appellant. The court instructed counsel to attempt to contact appellant and ordered DCFS to initiate a referral for appellant with DIF (Desarrollo Integral de la Familia, a Mexican social services agency) and to facilitate telephone calls between appellant and the children. DCFS contacted the Mexican consulate, requesting that DIF conduct a home visit and assess the suitability of appellant's home.[8]
At the jurisdictional/dispositional hearing on August 27, 2008, appellant's counsel reported that a Spanish-speaking employee in her office had talked with appellant over the telephone. Appellant had said during that conversation that he lived with Mother and the children until 1996, when he went to Missouri to accept a position as a restaurant manager. Appellant anticipated the family would eventually reunite in Missouri. According to counsel, between 1996 and 2000, appellant sent Mother approximately $500 per *146 month to support the children. The court ruled that this information was inadmissible and admonished counsel for failing to obtain a sworn statement from appellant. Counsel requested a continuance to obtain an affidavit, which the court denied.
After considering the evidence in the reports and the information provided by Mother, the court found that appellant had held himself out as the children's father and openly accepted them into his home for one year with respect to the youngest, three years with respect to the middle child, and four years with respect to the oldest. The court noted that although appellant's name appeared on their birth certificates, his name could have been put there without his consent. Relying on In re A.A. (2003) 114 Cal. App. 4th 771 [7 Cal. Rptr. 3d 755] for the proposition that "even if someone has held himself out as the father, and openly accepted the children into his home," his presumed father status could "fall away," the court ruled that appellant was an alleged father only, because he had not had contact with the children or provided financial support for many years.
Despite having ruled that appellant was not a presumed father, the court made jurisdictional findings that pertained to appellant and, during the dispositional phase of the hearing, provided reunification services. The court ordered appellant to drug test, enroll in parenting classes, and visit or contact the children in order to form a relationship. Counsel for appellant asked on his behalf that the children be released to appellant's brothers, who were residing in Missouri. The court ordered DCFS to initiate the ICPC process (Interstate Compact on the Placement of Children) to determine whether the children could be placed with these out-of-state parties. (See Fam. Code, § 7900 et seq.)
DISCUSSION
A. Presumed Father Status
(1) "In dependency proceedings, `fathers' are divided into four categoriesnatural [or biological], presumed, alleged, and de facto." (In re A.A., supra, 114 Cal.App.4th at p. 779.) A biological father is one whose paternity is established, but who does not qualify as a presumed father. (Ibid.; In re Kobe A. (2007) 146 Cal. App. 4th 1113, 1120 [53 Cal. Rptr. 3d 437].) An alleged father is a man who may be the father, but who has not yet established *147 himself as either a biological father or a presumed father. (In re Kobe A., supra, at p. 1120.)[9]
The distinction is important because only a presumed father is entitled to custody or a reunification plan. (In re Kobe A., supra, 146 Cal.App.4th at p. 1120; In re Paul H. (2003) 111 Cal. App. 4th 753, 760 [5 Cal. Rptr. 3d 1]; In re O.S. (2002) 102 Cal. App. 4th 1402, 1406-1407 [126 Cal. Rptr. 2d 571].) An alleged father is not entitled even to appointed counsel, except for the purpose of establishing presumed fatherhood. (In re Kobe A., supra, at p. 1120; In re Paul H., supra, 111 Cal.App.4th at p. 760.) Indeed, it is generally said that an alleged father's rights are limited to "an opportunity to appear and assert a position and attempt to change his paternity status. . . ." (In re Kobe A., supra, 146 Cal.App.4th at p. 1120; accord, In re Paul H., supra, 111 Cal.App.4th at p. 760; In re O. S., supra, 102 Cal.App.4th at p. 1408.)
(2) The various statutory methods for establishing a presumption of paternity are contained in the Family Code. (See, e.g., Fam. Code, § 7540 [child of wife cohabiting with husband who is not impotent or sterile conclusively presumed to be child of the marriage]; §§ 7571-7572 [paternity established where man identified by mother as natural father executes voluntary declaration of paternity at hospital where child is born]; § 7611, subd. (a) [presumption arises where man is married to mother and child is born during marriage or within 300 days afterward]; § 7611, subd. (b) [presumption arises where man attempted to marry mother prior to child's birth, but marriage is or could be declared invalid]; § 7611, subd. (c) [presumption arises where man attempted to marry mother after child's birth and is named on birth certificate with his consent or voluntarily undertakes legal support obligation].) The provision applicable here, Family Code section 7611, subdivision (d) (section 7611(d)), provides that a man is presumed to be the natural father of a child or children if "[h]e receives the child into his home and openly holds out the child as his natural child."
A man who claims entitlement to presumed father status has the burden of establishing by a preponderance of the evidence the facts supporting his entitlement. (In re T.R. (2005) 132 Cal. App. 4th 1202, 1210 [34 Cal. Rptr. 3d 215].) "Although more than one individual may fulfill the statutory criteria that give rise to a presumption of paternity, `there can be only one presumed father.'" (In re Jesusa V. (2004) 32 Cal. 4th 588, 603 [10 Cal. Rptr. 3d 205, 85 P.3d 2].) The Family Code section 7611(d) presumption, once it arises, "may be rebutted in an appropriate action only by clear and convincing *148 evidence." (Fam. Code, § 7612, subd. (a) (section 7612(a)).) Here, the trial court found that appellant had established the presumption under section 7611(d), but that it had been rebutted. The issue is whether appellant's failure to care for or to provide financial support to his children warrants rebuttal of the presumption of paternity that arises under section 7611(d).
Family Code section 7612(a) provides that the presumptions arising under Family Code section 7611, including the presumption of section 7611(d), "may be rebutted in an appropriate action." The Supreme Court has repeatedly stated that section 7612(a) should not be applied to rebut a presumption of fatherhood arising under section 7611(d) where the result would be to leave children with fewer than two parents. In In re Nicholas H. (2002) 28 Cal. 4th 56 [120 Cal. Rptr. 2d 146, 46 P.3d 932], for example, the man seeking presumed father status had taken care of the child (a six-year-old boy) and his mother for five years, but was not the biological father. (28 Cal.4th at pp. 59-61.) The respondent contended the lack of a biological connection rebutted the section 7611(d) presumption. The Supreme Court disagreed: "Section 7612(a) provides that `a presumption under Section 7611 [that a man is the natural father of a child] is a rebuttable presumption affecting the burden of proof and may be rebutted in an appropriate action only by clear and convincing evidence.' [Italics added by Supreme Court.] When it used the limiting phrase an appropriate action, the Legislature was unlikely to have had in mind an action like thisan action in which no other man claims parental rights to the child, an action in which rebuttal of the section 7611(d) presumption will render the child fatherless. Rather, we believe the Legislature had in mind an action in which another candidate is vying for parental rights and seeks to rebut a section 7611(d) presumption in order to perfect his claim, or in which a court decides that the legal rights and obligations of parenthood should devolve upon an unwilling candidate." (28 Cal.4th at p. 70.)
(3) The Supreme Court repeated the admonition against applying Family Code section 7612(a) to rebut a presumption of parenthood arising under Family Code section 7611(d) where the result would be to leave a child with fewer than two parents in Elisa B. v. Superior Court (2005) 37 Cal. 4th 108 [33 Cal. Rptr. 3d 46, 117 P.3d 660]. There, a woman whose children were born during a committed lesbian relationship and treated by her partner as the partner's children for many years sought child support after the relationship ended. The former partner clearly met the standard for presumed parenthood under section 7611(d). In determining whether the presumption should be given effect, the court explained: "In establishing a system for a voluntary declaration of paternity in [Family Code] section 7570, the Legislature declared: `There is a compelling state interest in establishing paternity for all children. Establishing paternity is the first step toward a child support award, which, in turn, provides children with equal rights and access to benefits, *149 including, but not limited to, social security, health insurance, survivors' benefits, military benefits, and inheritance rights....' [¶] By recognizing the value of determining paternity, the Legislature implicitly recognized the value of having two parents, rather than one, as a source of both emotional and financial support, especially when the obligation to support the child would otherwise fall to the public." (37 Cal.4th at p. 123.) Accordingly, the case before it was "not `an appropriate action' in which to rebut the presumption" of section 7611(d). (37 Cal.4th at p. 122; see also Librers v. Black (2005) 129 Cal. App. 4th 114, 123 [28 Cal. Rptr. 3d 188] ["[W]henever possible, a child should have the benefit of two parents to support and nurture him or her."].)
Neither Nicholas H. nor Elisa B. involved a father who discontinued contact with the children and provided no financial support after the mother remarried. However, we believe the Supreme Court's admonition that courts should not render children fatherless by too easily finding cause to rebut the Family Code section 7611(d) presumption is equally applicable in the present, rather commonplace situation. Appellant, Mother and the O children all recognized appellant as the children's father. His name is on their birth certificates. He acknowledged the children at birth and supported them for several years. Refusing to grant presumed father status to a man such as appellant, where no other parental figure is available to fill the gap, would serve only to punish the children by depriving them of a second parent. In addition, it would for all practical purposes deprive them of a connection with their father's family and the opportunity of finding a home with one of the father's relatives, should the mother's attempt at reunification fall short.[10]
(4) Respondent cites no authority for the proposition that abandonment combined with failure to support is a basis for rebutting the Family Code section 7611(d) presumption, and our research has uncovered none.[11] A *150 biological father's failure to maintain a relationship with the children or to provide support is a relevant factor to be considered in the context of resolving the competing claims of two different men, both of whom can establish a presumption of fatherhood under the provisions of the Family Code. (Fam. Code, § 7612, subd. (b); see, e.g., In re Jesusa V., supra, 32 Cal.4th at p. 603.) That situation is governed by Family Code section 7612, subdivision (b), which provides: "If two or more presumptions arise under [Family Code] Section ... 7611 that conflict with each other, . . . the presumption which on the facts is founded on the weightier considerations of policy and logic controls." In choosing between competing claims of presumed fatherhood, juvenile courts are obliged to "weigh all relevant factors. . . in determining which presumption was founded on weightier considerations," including whether the biological father had continued to be involved in the children's lives or had effectively abandoned them at an early age. (In re Jesusa V., supra, 32 Cal.4th at pp. 607-608.) However, Family Code section 7612, subdivision (b) has no applicability here. No man other than appellant has sought fatherhood status with respect to the O children. The only other man who has had a significant relationship with the childrentheir stepfather Carloshas demonstrated no interest in their well-being. The children, for their part, have expressed their disinclination to maintain a relationship with Carlos. Accordingly, affirming the juvenile court's ruling would effectively leave the children fatherless.
Implicitly recognizing the lack of support for the court's ruling that the Family Code section 7611(d) presumption had been rebutted, respondent attacks the juvenile court's finding that the section 7611(d) presumption arose under the evidence presented. Respondent cites two adoption cases, Adoption of Kelsey S. (1992) 1 Cal. 4th 816 [4 Cal. Rptr. 2d 615, 823 P.2d 1216] and Adoption of O.M. (2008) 169 Cal. App. 4th 672 [87 Cal. Rptr. 3d 135], for the proposition that a court should consider multiple factors before making a finding under section 7611(d), including the alleged father's "payment of pregnancy and birth expenses commensurate with his ability to do so, and prompt legal action to seek custody of the child."
(5) Both Kelsey S. and O.M. involved biological fathers who were unable to establish a presumption of fatherhood under any statutory provision because their attempts at contact and custody were stymied by the mothers, who preferred to free the children for adoption. (See Adoption of Kelsey S., supra, 1 Cal.4th at pp. 825-830; Adoption of O.M., supra, 169 Cal.App.4th at p. 678.) The Supreme Court concluded in Kelsey S., in a holding which was *151 followed by the court in O.M., that a biological father may have a constitutional right under the due process and equal protection clauses of the Fourteenth Amendment to preserve his opportunity to develop a parental relationship with a child where he "comes forward and demonstrates a full commitment to his parental responsibilities" by "attempt[ing] to assume his parental responsibilities as fully as the mother will allow and his circumstances permit" within a short time after he learns of the pregnancy. (Kelsey S., supra, at p. 849; see O.M., supra, at pp. 678-679.) In making the determination whether a natural father has established a nonstatutory right to parenthood, the courts are to consider "[t]he father's conduct both before and after the child's birth," including the "public acknowledgement of paternity, payment of pregnancy and birth expenses commensurate with his ability to do so, and prompt legal action to seek custody of the child." (1 Cal.4th at p. 849, italics omitted.) The factors discussed in Kelsey S. and applied in O.M. are not pertinent to the instant case. (6) Family Code section 7611(d) requires nothing more than that the presumed father candidate receive the children into his home and openly hold them out as his natural children. Appellant established these foundational facts to the court's satisfaction, and the issue was whether the presumption had been rebutted. As the sole basis for the juvenile court's ruling that appellant's presumed father status had been rebutted was appellant's failure to keep in contact with and support his family, the court's ruling lacks support and must be reversed.
B. Request for Continuance
As we conclude that the evidence established appellant's presumed father status, counsel's request for reversal of the court's denial of the request for continuance to obtain further evidence is moot.
C. Jurisdictional Findings
The court found that jurisdiction over the children was proper under section 300, subdivision (a) (serious physical harm), subdivision (b) (failure to protect), subdivision (d) (sexual abuse) and subdivision (g) (no provision for support). The only allegation pertaining to appellant was the allegation that he "failed to provide the children with the necessities of life including food, clothing, shelter and medical care," which the court found true. The court further found that the allegation supported jurisdiction under subdivisions (b) and (g). Appellant asserts that the allegation did not support jurisdiction because the children's harm was not caused by the failure to provide support and because he expressed willingness to take custody after being contacted by DCFS. We conclude that the factual finding supported jurisdiction under section 300, subdivision (g), but not subdivision (b).
*152 1. Subdivision (b)
(7) Jurisdiction is appropriate under section 300, subdivision (b) where the court finds "[t]he child has suffered, or there is a substantial risk that the child will suffer, serious physical harm or illness, as a result of . . . the willful or negligent failure of the parent or guardian to provide the child with adequate food, clothing, shelter, or medical treatment . . . ." The parties acknowledge that three elements must exist for a jurisdictional finding under section 300, subdivision (b): "(1) neglectful conduct by the parent in one of the specified forms; (2) causation; and (3) `serious physical harm or illness' to the minor, or a `substantial risk' of such harm or illness." (In re Rocco M. (1991) 1 Cal. App. 4th 814, 820 [2 Cal. Rptr. 2d 429].) "The third element `effectively requires a showing that at the time of the jurisdiction hearing the child is at substantial risk of serious physical harm in the future (e.g., evidence showing a substantial risk that past physical harm will reoccur). [Citations.]'" (In re David M. (2005) 134 Cal. App. 4th 822, 829 [36 Cal. Rptr. 3d 411], quoting In re Savannah M. (2005) 131 Cal. App. 4th 1387, 1396 [32 Cal. Rptr. 3d 526].)
Appellant contends there is no causal nexus between the court's findings of serious injury and the findings relating to appellant. We agree. Mother's use of a safety pin and knife to scrape ink tattoos from J.O.I's wrist and leg; Mother's inappropriate and excessive physical discipline of J.O.I; and Carlos's sexual comments, gestures and touching directed toward J.O.I have no relation to appellant's failure to provide the children with support or financial assistance. Respondent asserts that the failure to provide medical care caused J.O.I to "endure her injuries without medical attention." The court made no specific finding that J.O.I was deprived of necessary medical care. Moreover, it appears from the record that J.O.I was forced to endure her injuries without medical attention because Mother and Carlos did not believe the injuries warranted medical attention or alternatively, did not want her to be closely examined by medical personnel.[12] These actions were not caused by appellant's abandonment or failure to provide support.[13]
*153 2. Subdivision (g)
(8) Section 300, subdivision (g) provides that jurisdiction is warranted where "[t]he child has been left without any provision for support . . . ." As respondent points out, subdivision (g) does not require a specific finding of harm or risk of harm.[14]
(9) Neither party has cited any authority which addresses whether a parent who leaves his or her children with the other parent, providing no financial support, has left the children "without any provision for support" within the meaning of section 300, subdivision (g), justifying a decision to take jurisdiction over the children.[15] In some cases involving incarcerated parents, courts have said that making arrangements for the child to be cared for by a relative or friend without apparent financial recompense is sufficient to avoid subdivision (g) jurisdiction. (See, e.g., In re S. D. (2002) 99 Cal. App. 4th 1068, 1078 [121 Cal. Rptr. 2d 518] [issue under § 300, subd. (g) was whether incarcerated mother "could arrange for care" with out-of-state sister]; In re Monica C. (1995) 31 Cal. App. 4th 296, 305 [36 Cal. Rptr. 2d 910] [subd. (g) applies only where parent is incapable of making plans for care of child]; see also In re James C. (2002) 104 Cal. App. 4th 470, 484 [128 Cal. Rptr. 2d 270] [agreeing with rule, but finding incarcerated father incapable of making preparations for children's care].) Whether a parent can arrange for care is to be determined as of the date of the jurisdictional hearing, and a noncustodial parent's failure to make arrangements before the child is removed by DCFS does not cause the child to fall within the terms of section 300, subdivision (g). (In re Aaron S. (1991) 228 Cal. App. 3d 202, 204, 209 [278 Cal. Rptr. 861] [where minor removed from mother due to substance abuse, incarcerated father's failure to immediately arrange for care "does not necessarily prove . . . that any such inability continues to exist at the present time"]; see In re Nicholas B. (2001) 88 Cal. App. 4th 1126, 1134 [106 Cal. Rptr. 2d 465] ["The basic question under section 300 is whether circumstances at the time of the hearing subject the minor to the defined risk of harm."].)
Assuming section 300, subdivision (g) applies only where the parent is unable to provide or arrange care for the children at the time of the *154 jurisdictional hearing, substantial evidence supports the conclusion that appellant was incapable of providing such care.[16] According to the uncontested evidence, appellant had given no financial support to his family for at least eight years. The court could reasonably infer from this fact that he was incapable of doing so, despite his professed "interest" in obtaining custody. (See In re Aaron S., supra, 228 Cal.App.3d at p. 209 [evidence that father failed to arrange for children's care before detention "relevant to a determination of [father's] present ability to make such arrangements"].) Moreover, appellant had no relationship with the children. He had not lived with them for more than a dozen years, and when he left the oldest had barely entered preschool. Even his rare telephonic contacts ceased at least three years prior to the detention.[17] His scant interest in the children was demonstrated by his failure to make inquiry concerning their welfare over the years. Even after the case was pending and his children were placed in foster care, he made no affirmative attempt to communicate with DCFS or DIF to establish his circumstances and present ability to care for them. As the court stated in James C.: "The absence of evidence suggesting that the father was ever interested in the welfare of the two toddler children during the entire time of his incarceration was sufficient for the juvenile court to infer that he either could not or was incapable of making preparations for their care." (In re James C., supra, 104 Cal.App.4th at p. 484.) Appellant's failure to provide financial support for over a decade, combined with his demonstrated lack of interest in the children's welfare before and after DCFS intervention, supported the court's jurisdictional finding under subdivision (g).
D. ICWA
(10) ICWA requires that when a court knows or has reason to know that an Indian child is involved in a dependency matter, it must ensure that notice is given to the relevant tribe or tribes. (25 U.S.C. § 1912(a).) Rule 5.481 of the California Rules of Court provides that the juvenile court "ha[s] an affirmative and continuing duty to inquire whether a [dependent] child is or may be an Indian child . . . ." Because the court did not consider appellant the O children's presumed father, it did not inquire about possible Indian ancestry on appellant's side. On remand, this omission must be corrected.
DISPOSITION
The order declaring appellant an alleged father only is reversed. The finding of jurisdiction under section 300, subdivision (b) is reversed. In all *155 other respects the judgment is affirmed. On remand, the court is instructed to enter an order declaring appellant the presumed father of J.O.I, B.O. and J.O.II and to make the inquiry concerning appellant's possible Indian ancestry required by ICWA and the California Rules of Court.
Epstein, P. J., and Suzukawa, J., concurred.
NOTES
[1] The children were a year younger on the date of the DCFS (Los Angeles County Department of Children and Family Services) intervention.
[2] Unless otherwise designated, statutory references are to the Welfare and Institutions Code.
[3] Juana G. (Mother) is the children's mother. Carlos F., her husband, is the father of the three half siblings. Neither Juana nor Carlos is a party to this appeal. This appeal does not concern Carlos's children.
[4] The tattoo removal had occurred two weeks prior to the referral and J.O.I's skin was scabbed over by the time of the detention. Carlos had been making inappropriate comments for some time and J.O.I had reported inappropriate comments and touching to Mother two or three months earlier.
[5] Mother and Carlos stipulated to the jurisdictional findings; appellant did not. Mother and Carlos also signed statements in June 2008 denying Indian ancestry.
[6] The home of the maternal grandparents was too small. A maternal uncle had a DUI (driving under the influence) conviction and no current driver's license.
[7] Carlos's children were taken in by his relatives. The O children informed the court through their counsel that they wanted nothing to do with Carlos.
[8] There is no indication in the record of any response.
[9] Not relevant here is the term "de facto father," which refers to "someone such as a stepparent who has, on a day-to-day basis, assumed the role of a parent for a substantial period of time." (In re A.A., supra, 114 Cal.App.4th at p. 779.)
[10] We note in this regard that so far, none of Mother's relatives has been approved for custody, and the court ordered DCFS to investigate the home of paternal uncles in Missouri.
[11] The juvenile court purported to rely on the decision in In re A.A., supra, 114 Cal. App. 4th 771, but that case does not support the ruling. In A.A., where two men claimed to be the presumed father, the juvenile court ruled in favor of the biological father, H.O., after a paternity test established his biological connection. The evidence otherwise established that H.O. had lived with the mother for only one to three months after the child's birth, had visited the child, a six-year-old girl, for a year or so thereafter, and had failed to financially support the child at any time. Taking note of H.O.'s avoidance of "the constant parental-type tasks that come with having the child in his own homesuch as feeding and cleaning up after the minor, changing her clothing, bathing her, seeing to her naps, putting her to bed, taking her for outings, playing games with her, disciplining her, and otherwise focusing on the child," the Court of Appeal concluded that the evidence was insufficient to establish that H.O. received the child into his home and openly held her out as his natural child. (Id. at pp. 786-787.) The court found, on the other hand, that the evidence clearly established the competing claimant's entitlement to the Family Code section 7611(d) presumption, as he had taken the child into his home, cared for her, provided financial support and held himself out as her father over the course of many years. As the holding in A.A. with respect to the biological father was based on the lack of evidence to give rise to the Family Code section 7611(d) presumption, it does not support the juvenile court's ruling in the present case that appellant's presumed father status arose under section 7611(d), but "fell away" due to abandonment and failure to support.
[12] Mother stated that she made a medical appointment for J.O.I after removing the tattoos, but cancelled it because the wounds appeared to be healing.
[13] Respondent alternatively contends that the juvenile court could consider "all of [appellant's] past conduct as it related to section 300, subdivision (b)not only his failure to provide the necessities of life for the children." "[F]undamental ... due process" requires "[n]otice of the specific facts upon which removal of a child from parental custody is predicated" in order to "enable the parties to properly meet the charges." (In re Jeremy C. (1980) 109 Cal. App. 3d 384, 397 [167 Cal. Rptr. 283].) Accordingly, the court could not properly consider unalleged actions in making the jurisdictional finding. In any event, respondent fails to identify any conduct the court could have considered other than general neglect and failure to support.
[14] However, a child cannot be detained from a parent unless the court finds evidence of substantial danger of injury or detriment to the child. (§ 361, subd. (c) [custodial parent]; § 361.2, subd. (a) [noncustodial parent].)
[15] In In re Janet T. (2001) 93 Cal. App. 4th 377, 392 [113 Cal. Rptr. 2d 163], the court held that a finding under section 300, subdivision (g) that the father, whose whereabouts were unknown, had failed to provide support could not be used as justification to declare the children dependents and detain them from their custodial parent, the mother, who had provided good care. To the same effect, see In re Matthew S. (1996) 41 Cal. App. 4th 1311, 1319-1320 [49 Cal. Rptr. 2d 139].
[16] Appellant made no effort to arrange for the children's care until after the court's jurisdictional findings, when his counsel asked the court to consider placement with paternal uncles. Appellant presented no evidence that the uncles were willing or able to accept custody.
[17] This was according to J.O.I's recollection; according to Mother, it had been much longer.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 11-16124
Non-Argument Calendar
________________________
D.C. Docket No. 1:11-cv-20152-CMA
GUSTAVO A. ABELLA,
Plaintiff-Appellee,
versus
NANCY SIMON,
individually and as a Miami Lakes Councilwoman, et al.,
Defendants,
OFFICER HECTOR VALLS, individually,
OFFICER RAYMOND DEL VALLE, individually,
OFFICER A. SALAZAR, individually,
Defendants-Appellants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(July 26, 2012)
Case: 11-16124 Date Filed: 07/26/2012 Page: 2 of 5
Before CARNES, PRYOR and FAY, Circuit Judges.
PER CURIAM:
Officers Hector Valls, Raymond Del Valle, and Alberto Salazar appeal the
denial of their motions to dismiss Gustavo Abella’s pro se complaint based on
qualified immunity. Abella complains of retaliation for exercising his rights under
the First Amendment. 42 U.S.C. § 1983. We vacate and remand with instructions
to dismiss the counts about retaliation in the complaint against Valls, Del Valle,
and Salazar based on qualified immunity.
Abella complains about three actions by the officers following his
protesting of an ordinance proposed by Councilwoman Nancy Simon, reporting of
her to a licensing agency, filing of complaints with the police, and photography of
police conduct. First, Abella’s complaint alleges that Valls refused to file a police
report about the president of Abella’s condominium association “passing out flyers
with libel information against” him. Abella’s complaint alleges that “Valls’s
statement that ‘if Ms. Simon paid this person to pass [t]hese flyers out and . . . has
all the right to do it’ implicates that Officer Valls might have had knowledge of
what was going on.” Second, Abella’s complaint alleges that Del Valle issued a
parking citation to Abella when his car had been in “his parking space” inside his
private condominium complex. Third, Abella’s complaint alleges that Salazar
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issued a parking ticket to Abella when he “pick[ed] up public records [at] Town
Hall and . . . parked in front of the building where there were other cars parked.”
Abella’s complaint alleges that Salazar said he had been ordered to issue the ticket
by Major Frank Bocanegra; Bocanegra “laughed when he saw [Abella]” at Town
Hall; “[a]fter a couple of days” Bocanegra and Captain J. Alongi “reviewed . . .
and decided to rip off the ticket”; and, “[a] few days later,” Salazar said that
“Bocanegra . . . knew how far he could do wrong without getting caught.”
To survive a motion to dismiss, a plaintiff who complains of retaliation for
exercising rights protected by the First Amendment must allege “first, that his
speech or act was constitutionally protected; second, that the defendant’s
retaliatory conduct adversely affected the protected speech; and third, that there is
a causal connection between the retaliatory actions and the adverse effect on
speech.” Bennett v. Hendrix, 423 F.3d 1247, 1250 (11th Cir. 2005). The First
Amendment protects the rights of speech, to petition for redress, U.S. Const.
Amend. I; United Mine Workers of Am. v. Ill. State Bar Ass’n, 389 U.S. 217, 222,
88 S. Ct. 353, 356 (1967), and to photograph police activities, Smith v. City of
Cumming, 212 F.3d 1332, 1333 (11th Cir. 2000). To establish a causal
connection, the plaintiff must allege that the protected conduct was the
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“motivating factor behind the defendants’ actions.” Smith v. Mosley, 532 F.3d
1270, 1278 (11th Cir. 2008).
Abella’s complaint fails to allege that Valls, Del Valle, or Salazar retaliated
against Abella for exercising his rights under the First Amendment. Abella’s
complaint alleges that Valls only “might have had knowledge” of an alleged
scheme to stifle Abella’s protected conduct. See id. And Abella’s complaint does
not allege that his protected conduct motivated Del Valle to issue the parking
citation. See id. Although Abella’s complaint alleges that Salazar knew
Bocanegra was bent on harassing Abella, those facts fail to establish that Salazar
ticketed Abella in retaliation for his protected conduct. See id. The district court
erred when it based its decision on the collective actions of all defendants instead
of deciding whether these three officers were entitled to qualified immunity based
on the allegations about each of them. Valls, Del Valle, and Salazar are entitled to
dismissal of the three counts about retaliation in the complaint against them based
on qualified immunity.
We VACATE that portion of the order that denied the motions to dismiss of
Valls, Del Valle, and Salazar, and we REMAND with instructions to dismiss the
counts about retaliation in the complaint against the three officers based on
qualified immunity.
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VACATED AND REMANDED WITH INSTRUCTIONS.
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178 Cal.App.4th 1271 (2009)
In re Z.C., a Person Coming Under the Juvenile Court Law.
ALAMEDA COUNTY SOCIAL SERVICES AGENCY, Plaintiff and Appellant,
v.
Z.G., Defendant and Respondent.
No. A123994.
Court of Appeals of California, First District, Division Two.
October 2, 2009.
*1275 Andrew James Massey, County Counsel, and Joanne Evelyn Morrison, Deputy County Counsel, for Plaintiff and Appellant.
Caroline Janes Todd, under appointment by the Court of Appeal, for Defendant and Respondent.
OPINION
LAMBDEN, J.
In 1992, Z.C. was removed from her mother's custody immediately after being born. Z.G. (Z.G. or the guardian) was appointed the guardian for Z.C. at a hearing pursuant to Welfare and Institutions Code section 366.26.[1] Years later, after the Alameda County Social Services Agency (the agency) sought a more restrictive placement for Z.C., the juvenile court held a section 366.3 hearing. The court did not terminate the guardianship. Rather, it ordered reunification services to Z.G. to maintain the legal guardianship. The agency agrees that reunification services are appropriate, but challenges the juvenile court's authority to order them. The *1276 agency claims that, under section 366.3, subdivision (b), the court's power is limited to recommending that the agency provide services.
We conclude that the agency's construction of section 366.3, subdivision (b) would have absurd consequences not intended by the Legislature. Under the plain meaning of the statute when considered within the context of juvenile dependency law, section 366.3, subdivision (b) provides the juvenile court with the power to order the social services agency to provide reunification services to a legal guardian when deciding whether it is in the best interests of the child to maintain the existing legal guardianship. Accordingly, we affirm the judgment.
BACKGROUND
In 1992, right after the birth of Z.C., the agency filed a petition in juvenile court alleging that Z.C. was a person defined under section 300, subdivision (b). Z.C. was declared a dependent and placed with her maternal aunt, Z.G. In 1994, the court held the section 366.26 hearing and ordered a permanent plan of legal guardianship for Z.C. with Z.G.
Z.C. was delivered into protective custody on March 23, 2004, and placed in foster care. The agency filed a new petition on March 25, 2004, alleging failure to protect under section 300, subdivision (b), based on the guardian's inability to control Z.C.'s behavioral problems. Z.C.'s behavior improved while in foster care, and she returned to the guardian's home. At the hearing on April 8, 2004, the court dismissed the petition with an order for informal family maintenance services.
About four years later, on August 27, 2008, the agency filed a section 387 petition seeking a more restrictive placement for Z.C. The petition alleged that the guardian wanted to rescind the guardianship due to Z.C.'s behavior, which included refusing to observe household rules, refusing to attend school, making verbal threats to harm the guardian, hitting the guardian, and allowing her friends to enter the guardian's apartment without permission. The guardian was not in good health as she had suffered a stroke; she also had liver problems, diabetes, and high blood pressure. At the detention hearing on August 28, 2008, the court found removal necessary and set the matter for an uncontested hearing.
On November 6, 2008, the agency filed a petition under section 388, requesting the court to change its prior order appointing Z.G. as the guardian. The petition stated that it would be in the best interests of the minor to attempt to return the minor to the home of the legal guardian with six months of services. The court granted the agency's petition.
*1277 At the hearing on November 6, 2008, counsel for the agency argued that reunification services should be limited to six months. The attorneys for Z.C. and Z.G. argued that reunification services to the legal guardian under section 366.3 were not subject to a time limit of six months. The court set the matter regarding the length of time for reunification services to Z.G. for a contested hearing.
After holding the contested hearing, the juvenile court ruled on January 20, 2009, that section 366.3 did "not contain a maximum length of time that services to maintain a legal guardianship can be offered" and the court found that "the length of time that services should be offered to assist in maintaining a legal guardianship is the length of time consistent with the best interests of the child."
At the section 366.3 hearing on January 23, 2009, the agency told the court that "the question as to whether the court has the authority to order [services] or the court can merely recommend that the agency do so is significant to the agency because it will ultimately determine how this is paid for and how the agency will proceed going forward." The court dismissed the section 300 and section 388 petitions and sustained the allegations in the section 387 petition. It also ordered the agency to "provide services under section 366.3 in the best interest of the minor."
The agency filed a timely notice of appeal.
DISCUSSION
I. Authority to Order Reunification Services
(1) The agency filed a petition to change the legal guardianship and the juvenile court held a section 366.3 hearing to determine whether the terms of the legal guardianship should continue as is, be modified, or terminated.[2] Any proceeding to terminate a guardianship where the court had dismissed its dependency jurisdiction following the establishment of a legal guardianship, as in this case, is governed by section 366.3, subdivision (b). At the conclusion of the section 366.3 hearing, the juvenile court ordered reunification services to the guardian. The agency contends that this statute does not provide the lower court with the authority to order reunification services and that the agency retains the discretion to decide whether to provide services and, if it provides them, it can decide when to terminate them. Thus, the question before us is the interpretation of section 366.3.
*1278 A. Standard of Review
(2) "The determination of the meaning of a statute is a question of law that is subject to de novo review ...." (In re Z.R. (2008) 168 Cal.App.4th 1510, 1512 [86 Cal.Rptr.3d 495]; see also In re Darlene T. (2008) 163 Cal.App.4th 929, 937 [78 Cal.Rptr.3d 119].) "In statutory construction cases, our fundamental task is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute." (Estate of Griswold (2001) 25 Cal.4th 904, 910 [108 Cal.Rptr.2d 165, 24 P.3d 1191].) "`We begin by examining the statutory language, giving the words their usual and ordinary meaning.'" (Id. at p. 911.) "If the terms of the statute are unambiguous, we presume the lawmakers meant what they said, and the plain meaning of the language governs." (Ibid.; see also In re Do Kyung K. (2001) 88 Cal.App.4th 583, 590-591 [106 Cal.Rptr.2d 31].)
"`Additionally, however, we must consider the [statutory language] in the context of the entire statute [citation] and the statutory scheme of which it is a part.'" (Phelps v. Stostad (1997) 16 Cal.4th 23, 32 [65 Cal.Rptr.2d 360, 939 P.2d 760].) "`"When used in a statute [words] must be construed in context, keeping in mind the nature and obvious purpose of the statute where they appear.' [Citations.] Moreover, the various parts of a statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole."'" (Ibid.) If the language is clear and a literal construction would not result in absurd consequences that the Legislature did not intend, the plain meaning governs. (Coalition of Concerned Communities, Inc. v. City of Los Angeles (2004) 34 Cal.4th 733, 737 [21 Cal.Rptr.3d 676, 101 P.3d 563].) "[I]f a statute is amenable to two alternative interpretations, the one that leads to the more reasonable result will be followed [citation]." (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735 [248 Cal.Rptr. 115, 755 P.2d 299].) When the language is ambiguous, we may consider a variety of extrinsic aids, including the purpose of the statute, legislative history, and public policy. (Coalition of Concerned Communities, Inc., supra, at p. 737.)
B. Interpreting Section 366.3, Subdivision (b) Within the Context of Dependency Law
The agency contends that section 366.3, subdivision (b) does not give the juvenile court authority to order reunification services. Rather, the statute permits the court, according to the agency, only to make recommendations to the agency to provide services. Z.G. disagrees and argues that the plain meaning of the statute authorizes the court to order reunification services if it determines that maintaining the legal guardianship with reunification services would serve the best interests of the child.
*1279 Section 366.3, subdivision (b) provides in pertinent part: "Notwithstanding Section 1601 of the Probate Code, the proceedings to terminate a legal guardianship that has been granted pursuant to Section 360 or 366.26 shall be held either in the juvenile court that retains jurisdiction over the guardianship as authorized by Section 366.4 or the juvenile court in the county where the guardian and child currently reside, based on the best interests of the child, unless the termination is due to the emancipation or adoption of the child. The juvenile court having jurisdiction over the guardianship shall receive notice from the court in which the petition is filed within five calendar days of the filing. Prior to the hearing on a petition to terminate legal guardianship pursuant to this subdivision, the court shall order the county department of social services or welfare department having jurisdiction or jointly with the county department where the guardian and child currently reside to prepare a report, for the court's consideration, that shall include an evaluation of whether the child could safely remain in, or be returned to, the legal guardian's home, without terminating the legal guardianship, if services were provided to the child or legal guardian. If applicable, the report shall also identify recommended family maintenance or reunification services to maintain the legal guardianship and set forth a plan for providing those services. If the petition to terminate legal guardianship is granted, either juvenile court may resume dependency jurisdiction over the child, and may order the county department of social services or welfare department to develop a new permanent plan, which shall be presented to the court within 60 days of the termination. If no dependency jurisdiction has attached, the social worker shall make any investigation he or she deems necessary to determine whether the child may be within the jurisdiction of the juvenile court, as provided in Section 328."
(3) Under section 366.3, subdivision (b), in a proceeding to terminate a legal guardianship granted pursuant to section 366.26, which occurred in the present case, the juvenile court retains jurisdiction over the guardianship based on the "best interests of the child ...." (§ 366.3, subd. (b).) Furthermore, "[a]ny minor for whom a guardianship has been established resulting from the selection or implementation of a permanency plan pursuant to Section 366.26 is within the jurisdiction of the juvenile court...." (§ 366.4, subd. (a).) The purpose of section 366.4 is to provide the juvenile court with continuing jurisdiction over guardianships established in the juvenile court. (In re D.R. (2007) 155 Cal.App.4th 480, 486-487 [66 Cal.Rptr.3d 151].)
In giving the juvenile court continuing jurisdiction over the guardianship, the dependency statutes require the court to consider the child's best interests. The overriding purpose of the hearings in dependency cases is to implement the best interest of the child. (See, e.g., In re Lauren R. (2007) 148 Cal.App.4th 841, 855 [56 Cal.Rptr.3d 151].) Indeed, an application to terminate a guardianship created by the juvenile court is governed by section 388. *1280 (§ 360.) Section 388 provides that a juvenile court may change an earlier issued order, such as an order creating a legal guardianship, "[i]f it appears that the best interests of the child may be promoted by the proposed change of order...." (§ 388, subd. (d), italics added.)
(4) When interpreting section 366.3, subdivision (b), we must harmonize this statute within the dependency scheme, which "identifies the legislative preferences for providing permanent and stable homesadoption, guardianship, and long-term foster care.... [T]he statute establishes a presumption favoring guardianship over long-term foster care (§ 366.26, subd. (c)(4)) because guardianship is recognized as a more stable placement. [Citation.] In some dependency proceedings, the best available permanent alternative may be long-term foster care, but it is still presumed that guardianship is the better option." (In re Jessica C. (2007) 151 Cal.App.4th 474, 483 [59 Cal.Rptr.3d 855].) The "overall intent of the dependency scheme [is] to protect children from abuse or neglect and to provide permanent, stable homes if those children cannot be returned home within a set period of time." (Ibid.)
(5) Here, section 366.3, subdivision (b) plainly provides the juvenile court with the authority to determine whether the legal guardianship should be maintained and whether it would be in the child's best interest to maintain the legal guardianship with reunification services. Prior to making this determination, the court "shall order the county department of social services or welfare department ... to prepare a report, for the court's consideration, that shall include an evaluation of whether the child could safely remain in, or be returned to, the legal guardian's home, without terminating the legal guardianship, if services were provided to the child or legal guardian. If applicable, the report shall also identify recommended family maintenance or reunification services to maintain the legal guardianship and set forth a plan for providing those services." (§ 366.3, subd. (b).)
To require the juvenile court under section 366.3, subdivision (b) to consider the agency's report regarding the necessity of reunification services to maintain the legal guardianship without providing it with the concomitant power to order reunification services would result in an "`"`absurdity'"'" (In re Do Kyung K., supra, 88 Cal.App.4th at p. 591) and contravene the policy of ensuring that the child's best interests are being implemented. "Unquestionably, the juvenile court is in the best position to decide the means most likely to lead to stability and permanency in these children's lives ...." (In re Jessica C., supra, 151 Cal.App.4th at p. 484.)
(6) Under the plain meaning of the statute as well as a consideration of the objectives and purpose of the dependency statutes, we hold that section 366.3, subdivision (b) confers the juvenile court with the authority to order *1281 reunification services to the legal guardian when, after considering the agency's report, it deems that such services are necessary and that keeping the child in the legal guardian's home is in the child's best interests.
Our interpretation of the statute is consistent with other court decisions that have considered section 366.3. In In re Carlos E., we held that the legal guardian is not entitled to reunification services and the juvenile court does not have to make a finding that adequate reunification services were offered. (In re Carlos E. (2005) 129 Cal.App.4th 1408, 1418-1419 [29 Cal.Rptr.3d 317].) We stated that, "[a]t most, the juvenile court may order informal supervision of the legal guardian in order to assist in `ameliorating' the conditions that led to the request to terminate the legal guardianship." (Id. at p. 1419, fn. omitted, italics added.) We noted in In re Carlos E. that the social services agency had not filed a petition to terminate the legal guardianship but, had it filed one, the court would have been provided with the report required under section 366.3 and "[t]he court could then have determined whether it was in [the minor's] best interests to deny or grant the petition or order maintenance services to [the legal guardian] .... This, and no more, is what the Legislature intended to maintain or terminate a legal guardianship created by the juvenile court." (In re Carlos E., supra, at p. 1419, italics added.) Although in In re Carlos E. no party challenged the court's authority to order reunification services under section 366.3, subdivision (b), and therefore the construction of the statute was not an issue on appeal, we interpreted the statute as providing the court with this power.
Similarly, no party in In re Jessica C. argued that the court did not have the power to order reunification services under section 366.3, subdivision (b), but the Fifth District implicitly interpreted the statute as giving the court this power. (In re Jessica C., supra, 151 Cal.App.4th 474.) The Fifth District in In re Jessica C. held that the lower court erred by terminating a legal guardianship without first considering whether providing services could have preserved the guardianship. (Id. at p. 478.) The appellate court stressed that, "[i]n order to determine the children's best interests, the court was obligated by statute to consider whether maintenance services to [the legal guardian] could have been provided to save the guardianship." (Id. at p. 483.) The court explained: "The Legislature recognized that if the juvenile court's initial choice for a permanent plan of guardianship fails to serve a child's best interests, before moving to a less stable placement, the court should consider whether there is a way to preserve the guardianship. Doing so includes providing services to the legal guardian if necessary. Section 366.3 requires that this information be given to and considered by the juvenile court and, by implication, authorizes that identified services be provided if they are likely to prevent termination of the guardianship." (Id. at p. 484.) Implicit to a holding that the lower court errs when it fails to consider whether reunification services could sustain the guardianship is a conclusion that the court has *1282 the discretion to order such services. Otherwise, the failure to consider whether reunification services could maintain the guardianship would be harmless error.
The agency disregards any language in the above mentioned decisions indicating that the juvenile court could order reunification services by asserting that such statements were dicta. The agency maintains that the policy consideration of promoting stability for the child, which was discussed in these cases, supports its construction of the statute that the court can only recommend services. The agency contends that, if the court orders reunification services, the legal guardian may believe that he or she is entitled to such services and then dispute the adequacy of them, and such a dispute could delay the outcome of the proceedings. The agency further claims that the minor will suffer by losing his or her sense of permanency and stability and the legal guardian will suffer by being given false expectations. The agency adds that "[t]he better policy is to provide for a meaningful discussion of options and considerations of the services available, with the agency retaining discretion as to the delivery of the services. If the services are voluntary on the part of the agency and limited according to the agency's discretion, there will be fewer delays."
The agency's policy argument is without merit. As the court in In re Jessica C. pointed out, the statutes favor guardianship over long-term foster care because guardianship is recognized as a more stable placement and the court is in the best position to determine whether services are needed. (In re Jessica C., supra, 151 Cal.App.4th at pp. 483-484.) Given the court's continuing jurisdiction and the fact that it is in the "best position to decide the means most likely to lead to stability and permanency" in the child's life (id. at p. 484), it would be absurd to require the court to determine whether services would be best for the child and then require the court to permit the agency to decide unilaterally not to provide any services or to terminate the services.
The agency argues that it is significant that the Legislature used the word "order" when stating that a parent is entitled to notice and an opportunity to obtain an order for reunification services (see § 366.3, subds. (b), (f)),[3] but *1283 did not use similar language when referring to the legal guardianship. The agency concludes that this difference in language shows that the Legislature must not have intended for the court to have the authority to order the agency to provide reunification services. The agency further claims that the use of the subjunctive tense of certain verbs in the statute indicates that the report's evaluation and the agency's recommendation are being placed in a hypothetical context.
The agency's argument is not persuasive. The statute uses different language when referring to the parents than it does when discussing a legal guardianship because parents and guardians have different rights and the court's obligations are different in each of these situations. Section 366.3, subdivision (b) merely provides that, if the parental rights have not been terminated, a parent must receive notice of the hearings and may present evidence that reunification services are in the child's best interests. If the court determines that reunification services to the parent would be in the child's best interests, it may order them to restart. Since the court does not have to consider whether to provide reunification services to the parent, the statute specifies that the court may issue such an order. The court, however, in carrying out its role of determining the child's best interests must consider whether reunification services would be in the child's best interests prior to terminating the legal guardianship. Since the court must consider whether to provide reunification services to the legal guardian, any language in the statute stating that the court may issue an order for reunification services would have been superfluous.
With regard to the agency's argument that it is significant that the subjective tense was used, the statute states that the agency is "to prepare a report, for the court's consideration, that shall include an evaluation of whether the child could safely remain in, or be returned to, the legal guardian's home, without terminating the legal guardianship, if services were provided to the child or legal guardian." (§ 366.3, subd. (b).) The subjunctive tense is used because the agency cannot state with certainty what will happen if reunification services are offered. The agency's report is to provide a prediction based on the social worker's observations and is to aid the court in its decision whether to terminate the legal guardianship. The use of the subjunctive does not suggest that the court has no power to order reunification services when it finds such services are in the child's best interest.
*1284 Accordingly, we conclude that, if the juvenile court determines it is in the child's best interests to maintain the legal guardianship with the social services agency providing reunification services to the legal guardian and/or the child, the court has the authority under section 366.3, subdivision (b) to order the agency to provide such services.
C. Legislative History
Although a legislative analysis is not necessary because the interpretation of section 366.3, subdivision (b) urged by the agency would have absurd consequences, we note that the legislative history provides support for our construction of the statute.
In 2007, the Legislature amended section 366.3, subdivision (b) with Assembly Bill No. 298 (2007-2008 Reg. Sess.) (Assembly Bill 298).[4] (Stats. 2007, ch. 565, § 5.) This amendment, among other things, added the phrase "family maintenance or reunification" to the sentence describing the services that must be identified in this report. The Assembly Floor Analysis of the bill provided the following: "Finally, in an effort to help support legal guardianships and protect children's right to stable and permanent homes, this bill allows the court to order reunification services to legal guardians. Under current law, when faced with temporary problems in a kinship care household, the dependency court has only limited options. The court may leave the child in the home and provide limited services or terminate the guardianship. This bill provides the court with a third optionremove the child temporarily from the home and provide reunification services to the child and the relative caregiver. While such an option will not always be the appropriate one to use, providing courts with the discretion to offer reunification services when suitable should help keep children in stable and permanent homes, while still protecting their safety." (Conc. in Sen. Amends., Assem. Bill No. 298 (2007-2008 Reg. Sess.) as amended Sept. 4, 2007, p. 4, italics added.)
The agency attempts to characterize this legislative history as establishing an "inconsistency" and argues that the Assembly floor analysis is irrelevant because various terms such as "temporary problems" and "kinship care household" are not defined. The legislative history, however, further confirms *1285 that the Legislature intended to provide the court with the power to order reunification services to the legal guardian to promote stability in the minor's life.
D. California Rules of Court, Rule 5.740(c)(3)
The agency argues that California Rules of Court, rule 5.740(c)(3) supports its assertion that the court may only recommend that the agency provide reunification services to the legal guardian.
California Rules of Court, rule 5.740(c)(3) states: "At the hearing on the petition to terminate the guardianship, the court may do one of the following: [¶] (A) Deny the petition to terminate guardianship; [¶] (B) Deny the petition and request the county welfare department to provide services to the guardian and the ward for the purpose of maintaining the guardianship, consistent with section 301; or [¶] (C) Grant the petition to terminate the guardianship."
Section 301 reads in pertinent part: "(a) In any case in which a social worker, after investigation of an application for petition or other investigation he or she is authorized to make, determines that a child is within the jurisdiction of the juvenile court or will probably soon be within that jurisdiction, the social worker may, in lieu of filing a petition or subsequent to dismissal of a petition already filed, and with consent of the child's parent or guardian, undertake a program of supervision of the child. If a program of supervision is undertaken, the social worker shall attempt to ameliorate the situation which brings the child within, or creates the probability that the child will be within, the jurisdiction of Section 300 by providing or arranging to contract for all appropriate child welfare services pursuant to Sections 16506 and 16507.3, within the time periods specified in those sections. No further child welfare services shall be provided subsequent to these time limits. If the family has refused to cooperate with the services being provided, the social worker may file a petition with the juvenile court pursuant to Section 332. Nothing in this section shall be construed to prevent the social worker from filing a petition pursuant to Section 332 when otherwise authorized by law. [¶] (b) The program of supervision of the child undertaken pursuant to this section may call for the child to obtain care and treatment for the misuse of, or addiction to, controlled substances from a county mental health service or other appropriate community agency."
The agency cites the language specifying the court may "request the county welfare department to provide services to the guardian and the ward ... consistent with section 301" in California Rules of Court, rule 5.740(c)(3)(B) and the phrase "the social worker may, in lieu of filing a *1286 petition or subsequent to dismissal of a petition already filed, and with consent of the child's parent or guardian, undertake a program of supervision of the child" in section 301. The agency argues that the use of the words "consistent with" means simply that the services only need to be "compatible with," not identical to, those services referenced in section 301. (See Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2008) 164 Cal.App.4th 1, 9 [78 Cal.Rptr.3d 691] [when interpreting "consistent with" in a provision of the Pub. Util. Code, the court concluded this suggested that the standards only had to be compatible with and not identical to the standards in the federal study].) The services in section 301 are short term and provided at the agency's discretion. The agency maintains that giving it the discretion to provide services to the guardian is compatible with section 301.
(7) Contrary to the agency's assertions, California Rules of Court, rule 5.740(c)(3) does not divest the juvenile court of its authority to fashion orders in the best interest of the minor while maintaining its continuing jurisdiction over the legal guardianship. (See § 366.4.) As already discussed, the agency's construction would render nugatory the purpose and plain meaning of section 366.3, which is to empower the court to determine and order what is in the best interest of the child. (See, e.g., In re Carlos E., supra, 129 Cal.App.4th at p. 1419.) Clearly, the language in California Rules of Court, rule 5.740(c) does not alter the juvenile court's plenary jurisdiction over guardianships under section 366.4 and its authority to order services consistent with its determination of what is in the child's best interests.
(8) Finally, the language in section 301 cited by the agency does not abrogate the juvenile court's authority to order services. Rather, this section simply provides that the agency may undertake a program of supervision of the child rather than filing a petition in the court. Moreover, section 301 specifies that when a program of supervision is undertaken, "the social worker shall attempt to ameliorate the situation ...." Thus, the agency's discretion is clearly not unfettered. Section 301 provides the agency with the discretion to decide whether to file a petition and describes the voluntary services the agency may choose to provide outside of the court's jurisdiction. This statute does not provide the agency with the choice to refuse to provide services the court determines are necessary to ameliorate the situation when a petition has been filed and the court has continuing jurisdiction.
II. Separation of Powers
The agency contends that the juvenile court violated the separation of powers doctrine by ordering the agency to provide reunification services to the legal guardian and minor. This argument also has no merit.
*1287 The California Constitution provides the following: "The powers of state government are legislative, executive, and judicial. Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution." (Cal. Const., art. III, § 3.)
(9) Division Five of this court in In re Ashley M. (2003) 114 Cal.App.4th 1 [7 Cal.Rptr.3d 237], discussed the power of the juvenile court. The court explained: "The juvenile court is a special department of the superior court whose powers are limited to those granted by the Juvenile Court Law ..." (see § 200 et seq.) plus those incidental thereto. (In re Ashley M., supra, at p. 6.) "Under the Juvenile Court Law, the juvenile court is authorized to make orders pertaining to abused or neglected children who come within the court's jurisdiction. (§§ 361, 362.)" (In re Ashley M., supra, at p. 7.)
(10) With regard to the county's social services agency, the court in In re Ashley M. observed that it played "a `hybrid' role in dependency proceedings, exercising both executive and judicial functions. [Citation.] `The juvenile law system envisions a cooperative effort between the [social services agency] and the juvenile court.' [Citation.] The social services agency has the initial responsibility to investigate allegations of abuse or neglect and has authority to take temporary custody of an abused or neglected child. (§ 306.) But the agency must account to the court on the reasons for removing the child from home and on the services available to facilitate the child's return. (§ 319.) When, at the disposition hearing, the court decides to keep the child out of parental custody, the court must (with exceptions) order the social services agency to provide child welfare services to the parents and the child with the aim of reuniting the family. (§§ 300.2, 361.5, subd. (a).)" (In re Ashley M., supra, 114 Cal.App.4th at p. 7.)
The court in In re Ashley M. further explained: "In providing child welfare services, the county's social services agency acts as an administrative agency of the executive branch, subject to supervision by the State Department of Social Services. [Citations.] The juvenile court maintains ultimate control over the delivery of services through its authority to decide that the services offered or provided to the parents were unreasonable and that further services must be offered by the social services agency. (§§ 366, subd. (a)(1)(B), 366.21, subds. (e), (f), 366.22, subd. (a), 366.26, subd. (c)(2) ....)" (In re Ashley M., supra, 114 Cal.App.4th at p. 7, fn. omitted.) When making reports at the dependency proceedings, the social services agency "acts as an impartial arm of the court in assisting the court to carry out the Juvenile Court Law." (In re Ashley M., at p. 8, italics added.)
(11) Here, as already discussed, the juvenile court had authority under section 366.3, subdivision (b) to order the agency to provide reunification *1288 services to the legal guardian and the child. The statute required the agency to prepare a report on reunification services for the court's consideration; thus, in preparing the report, the agency was acting in its role of assisting the court to carry out the juvenile court law. (See In re Ashley M., supra, 114 Cal.App.4th at p. 8.) The court in In re Ashley M. pointed out that the juvenile court has the remedy of ordering further services if it finds that the social services agency has failed to provide adequate services. (Id. at p. 9.) Under section 366.3, subdivision (b), the juvenile court has the authority to order reunification services to the legal guardian and child and the power to assess the adequacy of the services rendered by the agency.
The agency also cites to In re Darlene T., supra, 163 Cal.App.4th 929. In In re Darlene T., the appellate court held that the juvenile court had exceeded its authority in ordering retroactive foster care payments to a grandmother because the grandmother had not exhausted the administrative review procedure and the law dictates that an applicant must exhaust the administrative remedies before a court may consider the issue. (Id. at pp. 941-942.)
In re Darlene T. is irrelevant to the issue presented here. The juvenile court in the present case has not ordered retroactive payments and there is no administrative review statute at issue.
The agency argues that it is not reimbursed "for voluntary services such as those placed within its discretion by the statutory scheme here." It claims that therefore this situation is similar to the one in In re Darlene T. because the court in the present case is ordering the agency to use its own funds, and such expenditures are within its own administrative determination and control. As already discussed, the agency is not voluntarily providing the services, but providing them pursuant to a court order. There is nothing in this record establishing that the agency is not reimbursed for these funds; indeed, there is nothing in the record regarding the funding of these services.[5]
Accordingly, we conclude that the juvenile court did not violate the separation of powers doctrine when it ordered the agency to provide reunification services to the legal guardian pursuant to section 366.3, subdivision (b).
*1289 DISPOSITION
The judgment is affirmed.
Kline, P. J., and Richman, J., concurred.
NOTES
[1] All further unspecified code sections refer to the Welfare and Institutions Code.
[2] The agency filed various petitions in the juvenile court. The agency and Z.G. agree that the governing statute is section 366.3, subdivision (b).
[3] Section 366.3, subdivision (b) provides: "Unless the parental rights of the child's parent or parents have been terminated, they shall be notified that the legal guardianship has been revoked or terminated and shall be entitled to participate in the new permanency planning hearing. The court shall try to place the child in another permanent placement. At the hearing, the parents may be considered as custodians but the child shall not be returned to the parent or parents unless they prove, by a preponderance of the evidence, that reunification is the best alternative for the child. The court may, if it is in the best interests of the child, order that reunification services again be provided to the parent or parents."
Similarly, section 366.3, subdivision (f) reads: "Unless their parental rights have been permanently terminated, the parent or parents of the child are entitled to receive notice of, and participate in, those hearings. It shall be presumed that continued care is in the best interests of the child, unless the parent or parents prove, by a preponderance of the evidence, that further efforts at reunification are the best alternative for the child. In those cases, the court may order that further reunification services to return the child to a safe home environment be provided to the parent or parents up to a period of six months, and family maintenance services, as needed for an additional six months in order to return the child to a safe home environment."
[4] The Legislature amended section 366.3 with Assembly Bill No. 2070 (2007-2008 Reg. Sess.), effective January 1, 2009, in a manner not relevant to the issue on appeal. (Stats. 2008, ch. 482, § 7.)
[5] In its reply brief, the agency asserts the following: "The entire legislative history of [section] 366.3 ... is without provision for funding for reunification or family maintenance services to juvenile court-appointed guardians. Under these circumstances, the expenditure of agency resources for such services must remain within the agency's discretion." No evidence regarding funding was submitted to the trial court and therefore this issue is not properly before us.
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342 F.Supp.2d 1319 (2004)
NORTH DAKOTA WHEAT COMMISSION, U.S. Durum Growers Association, and Durum Growers Trade Action Committee, Plaintiffs,
v.
UNITED STATES, Defendant, and
Canadian Wheat Board, Defendant-Intervenor.
SLIP OP. 04-93. Court No. 03-00838.
United States Court of International Trade.
July 29, 2004.
*1320 Robins, Kaplan, Miller & Ciresi, LLP (Charles A. Hunnicutt), for Plaintiff.
James M. Lyons, Acting General Counsel, Office of General Counsel, United States International Trade Commission, (Michael Diehl), Attorney-Advisor, for Defendant.
Steptoe & Johnson LLP, Richard 0. Cunningham, Edward J. Krauland, (Matthew S. Yeo), Tina Potuto Kimble, for Defendant-Intervenor.
OPINION
BARZILAY, Judge.
In this case, the court is called upon to decide whether plaintiffs, the North Dakota Wheat Commission, U.S. Durum Growers Association, and Durum Growers Trade Action Committee ("plaintiffs") have failed to establish jurisdiction in this court as defendant, the United States International Trade Commission ("Commission"), argues in its motion to dismiss. Specifically, the government argues that the North Dakota Wheat Commission commenced the present action [1] during a time expressly prohibited by section 516a(a)(5) of the Tariff Act of 1930 (19 U.S.C. § 1516a(a)(5)).
I. Background
On September 13, 2002, the North Dakota Wheat Commission and the U.S. Durum Growers Association filed a petition with the Department of Commerce ("Commerce") and the Commission alleging that a domestic industry was being materially injured and threatened with material injury by reason of imports of durum wheat from Canada that were being subsidized and sold at less than fair value. In October, 2002, Commerce initiated both countervailing duty and antidumping investigations of certain hard red spring and durum wheat from Canada. Commerce initiated four specific and separate investigations: one countervailing duty and antidumping investigation for each type of wheat. In November 2002, the Commission made a preliminary determination that there was a reasonable indication that an industry in the United States was materially injured by reason of subject imports of durum wheat from Canada. Durum and Hard Red Spring Wheat from Canada, Inv. Nos. 701-TA-430A and 430B and 731-T-1019A and 1019B (Preliminary), USITC Pub. 3563 (Dec.2002). Commerce subsequently made a final affirmative determination in all four investigations. 68 Fed. Reg. 52,747 (Sept. 5, 2003) (final CVD determination), 68 Fed.Reg. 52741 (Sept. 5, 2003) (final less than fair value determination). *1321 On October 23, 2003, the Commission issued its final determination, finding that the domestic industry was being materially injured by subsidized imports from Canada of hard red spring wheat, but was not being materially injured or threatened with material injury by subsidized imports of durum wheat from Canada. Durum and Hard Red Spring Wheat from Canada, 68 Fed.Reg. 6,070 (Oct. 23, 2003); Durum and Hard Red Spring Wheat from Canada, Inv. Nos. 701-TA-430A and 430B and 731-TA-1019A and 1019B (Final), USITC Pub. 3639 (Oct.2003). Twentynine days later, on November 21, 2003, plaintiffs filed a summons with the court, challenging the Commission's determination and commencing the instant litigation.
Pursuant to USCIT R. 12(b)(1), defendant moves to dismiss for lack of subject matter jurisdiction, arguing that plaintiffs commenced the present action during a time expressly prohibited by 19 U.S.C. § 1516a(a)(5).[2] Specifically, defendant argues that section 1516a(a)(5) creates a 30 day "time window" within which a party must file a summons seeking judicial review of a Commission determination involving imports from a free trade area country. Defendant further contends that this "window" opens on the 31st day after publication of the Commission's order in the Federal Register and closes on the 60th day after publication. Thus, commencement of judicial review is prohibited up to the 31st day. Because the plaintiffs commenced this action on November 21, 2003, defendant argues, it was commenced before the time window for doing so began and therefore within the prohibited period.
Plaintiffs respond by arguing that the court should be guided in its interpretation of section 1516a(a)(5) by this Court's recent decision in Bhullar v. United States, 27 CIT ___, 259 F.Supp.2d 1332 (2003), affd 93 Fed.Appx. 218, 2004 U.S.App. LEXIS 3995 (March 2, 2004) (UNPULISHED).[3] Plaintiffs argue that according to this Court's decision in Bhullar, a summons must be filed within 31 days after notice is published in the Federal Register. Plaintiffs further argue that the Commission, in Bhullar, argued that a plaintiff was required to commence an action no later than 31 days after notice of the antidumping or countervailing duty determination is published in the Federal Register.[4] Plaintiffs contend that this Court granted the Commission "deference" when it ruled that plaintiffs are required to timely commence an action under section 1516a(a)(5) within 31 days after *1322 publication of the notice in the Federal Register, and that they followed the Commission's "clearly stated interpretation of the statute" by filing within that period.
Plaintiffs argue in the alternative that according to the language of the statute, because neither the United States nor Canada had standing to request binational panel review of the Commission's negative determination, 19 U.S.C. § 1516a(g)[5] does not apply and therefore, section 1516a(a)(5)(A) is inapplicable. Instead, plaintiffs argue, section 1516a(a)(2),[6] which requires commencement of an action within 30 days after publication in the Federal Register, is controlling.
Finally, plaintiffs argue that should the court find that section 1516a(a)(5)(A) applies and prohibits commencement of an action during the first 30 days after publication in the Federal Register, the court should apply the principle of equitable tolling in this instance.
II. Analysis
A. Statute
Section 1516a(a) of Title 19 provides for judicial review of Commission determinations in countervailing duty and antidumping duty proceedings. 19 U.S.C. § 1516a(a). For cases involving merchandise from free trade area countries, as in this case, subsection (5) prescribes a time limit for commencing an action in the Court of International Trade.
(5) Time limits in cases involving merchandise from free trade area countries. Notwithstanding any other provision of this subsection, in the case of a determination to which the provisions of subsection (g) apply, an action under this subsection may not be commenced, and the time limits for commencing an action under this subsection shall not begin to run, until the day specified in whichever of the following subparagraphs applies:
(A) For a determination described in paragraph (1)(B) or clause (i), (ii) [negative final determinations by the Commission] or (iii) of paragraph (2)(B), the 31st day after the date on which notice of the determination is published in the Federal Register.
19 U.S.C. § 1516a(a)(5)(A). As plaintiffs point out, section 1516a(a) is predicated on the applicability of subsection (g). Subsection (g) applies to the review of countervailing duty and antidumping duty determinations involving free trade area merchandise, and provides for exclusive review of determinations by binational panelsif binational panel review is requested pursuant to article 1904 of the North American Free Trade Agreement ("NAFTA"), with certain exceptions not relevant here. 19 U.S.C. § 1516a(g). Subsection (g) provides for binational panel review where it has been requested, but does not, as plaintiffs assert, require that *1323 it be requested in order for subsection (a)(5) to apply. Moreover, discussing this same provision in the U.S.-Canada Free Trade AgreementNAFTA's predecessorthe Senate report on the implementing legislation noted that
the Agreement provides that ... judicial review may not be commenced until the time for requesting a panel under the Agreement has expired. To preclude this possibility, section 401(a) amends section 516a(a) by adding a new paragraph (5) that prohibits the commencing of an action under section 1516a(a) until the 31st day after publication of the appropriate notice in the Federal Register... Thus, the normal 30-day period for filing a summons (and 30 days thereafter, a complaint) would begin to run on such 31st day.
S. REP. No. 100-509, at 33-34 (1988), reprinted in 1988 U.S.C.C.A.N. 2395, 2428 (emphasis added). Thus, the statute lays out a series of steps that may be taken with respect to review of a Commission determination. Under this scheme, commencement of an action in the Court of International Trade is precluded until the time to request a binational panel has expired. Specifically, NAFTA parties agreed to replace judicial review of certain determinations with binational panel review where binational panel review has been requested. A request for binational panel review must be made within 30 days following the date of publication of the final determination which, in the United States, refers to publication of the Commission's determination in the Federal Register. See NAFTA Art.1904:4; 19 U.S.C. § 1516a(g)(2). Thus, the United States agreed to "amend its statutes or regulations to ensure that ... domestic procedures for judicial review of a final determination may not be commenced until the time for requesting a panel ... has expired." See NAFTA Art. 1904:15(c). Therefore, as section 1516a(a)(5) indicates, time limits for commencing an action in the Court of International Trade shall not begin to run until the 31st day after the date of publication in the Federal Register of notice of the final determination. NATA Annex 1904.15, U.S. Schedule at ¶ 9. The statutory scheme contains no requirement that the parties actually invoke binational panel review and none has been cited to the court from other sources.
Thus, because the instant action concerns review of countervailing duty and antidumping duty determinations involving free trade area merchandise, namely Canadian wheat products, subsection (g) applies.[7] Therefore, section 1516a(a)(5) applies as well. According to the facts at hand, notice of the Commission's determination was published in the Federal Register on October 23, 2003. 68 Fed.Reg. 60,707 (Oct. 23, 2003). Under the statute, commencement of an action in the Court of International Trade was prohibited and the time limits for commencing an action did not begin to run until the 31st day after the date on which notice of the determination was published in the Federal Register. In this case, that date would have been November 23, 2003, which fell on a Sunday. Thus, the earliest day plaintiffs could have filed was November 24, 2003. See USCIT R. 6(a). The North Dakota Wheat Commission filed its summons commencing the present action on November 21, 2003, on the 29th day after publication in the Federal Register. 28 U.S.C. § 2632(c); 19 U.S.C. § 1516a(a)(2); USCIT R. 3. Therefore, the action was commenced during the prohibited period.
*1324 B. Case law
Plaintiffs point to this Court's recent decision in Bhullar in support of the proposition that they had until the 31st day after publication in the Federal Register to commence this actionrather than being precluded from commencing until the 31st day after publication. 259 F.Supp.2d at 1332. In Bhullar, a pro se plaintiff filed a complaint in the Court of International Trade over four months after publication of the Commission's final antidumping and countervailing duty determinations in the Federal Register. The government moved to dismiss for lack of jurisdiction on several grounds, including standing, untimeliness, and the fact that a binational panel review was pending. This Court held that in addition to lacking standing to bring the action, the plaintiff failed to meet the statutory timeliness requirements, and also that a NAFTA binational panel had exclusive review of the determinations in that case. On the timeliness issue, this Court held that filing a summons and complaint four months after publication in the Federal Register is prohibited by section 1516a. This holding is consistent with the court's present interpretation of section 1516a(a)(5). That the Commission took a different position in its briefs before this court in Bhullaran entirely unrelated action predicated on facts entirely distinct from those presently at bar, is of no consequence. The government, like all other parties that come before this Court, is free to change its position on its interpretation of the law, and is also able to correct its past mistakes.[8] In affirming this Court's dismissal of the Plaintiffs case in Bhullar, the Court of Appeals for the Federal Circuit, in an unpublished and nonprecedential opinion, held that this Court correctly dismissed because the complaint could not lie after invocation of the binational NATA review process. 93 Fed.Appx. 218, 220, 2004 U.S.App. LEXIS 3995 at 4. It specifically did not address the other grounds raised by the government, including timeliness. Id. ("Because the complaint cannot lie after invocation of the binational NAFTA review process, we need not recite other grounds, namely timeliness ...").
Plaintiffs further argue that this Court in Bhullar granted the Commission deference in interpreting a statute that it administers and therefore, they (plaintiffs) should be able to rely on the Commission's erroneous prior interpretation of section 1516a(a)(5) that an action must be commenced within 31 days after publication in the Federal Register. To dismiss this action in light of Bhullar, plaintiffs argue, would be "extraordinarily prejudicial," as it would apply a new and different interpretation of the statute in question. To the contrary, where a statute is clear on its face, the Court does not give deference to the agency's interpretation. See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). This Court, in Bhullar, held that commencement of an action over four months after publication in the Federal Register is untimely. 259 F.Supp.2d at 1342. In doing so, however, *1325 this Court, apparently relying on government counsel's erroneous guidance, miscited the statute and stated that "[p]ursuant to § 1516a(a)(5)(A), Plaintiff is required to file its summons and complaint within 31 days after the publication in the Federal Register of the final determinations of which Plaintiff seeks review." 259 F.Supp.2d at 1342. Plaintiffs claim to have relied on this erroneous statement to their detriment in timing their filing of the instant case. This is truly unfortunate. However, the government's previous contrary arguments before this Court notwithstanding, the statute is clear on its face, and the court must be guided by its plain meaning.
C. Equity
Plaintiffs argue that if the court does not deny the government's motion to dismiss based on the statute or case law, it should apply the doctrine of equitable tolling and allow the case to go forward. When looking to apply equitable principles in suits against the government, the court must begin with the fundamental maxim that as a sovereign the United States is immune from legal action in the courts except to the extent that it waives such immunity. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980). Furthermore, a waiver of sovereign immunity "`cannot be implied but must be unequivocally expressed'" Id. (quoting United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 23 L.Ed.2d 52 (1969)). The Supreme Court has held that the same rebuttable presumption of equitable tolling applicable to suits against private defendants should also apply to suits against the United States. Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 95-96, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990). Thus, per Irwin, the court must inquire into the language of the statute to ascertain whether Congress intended the equitable tolling doctrine to apply. See Irwin, 498 U.S. at 95-96, 111 S.Ct. 453; see also, e.g. United States v. Brockamp, 519 U.S. 347, 353, 117 S.Ct. 849, 136 L.Ed.2d 818 (1997) (analyzing the language of statutory time limitations, comparing "ordinary limitations statutes," which use fairly simple language that can plausibly read as containing an implied equitable tolling exception, with "highly detailed technical ones," that cannot easily be read as containing implicit exceptions).
As discussed above, section 1516a explicitly prohibits the commencement of an action in the Court of International Trade during the 30 days following publication of the Commission's final determinations in the Federal Register. It states that
an action under this subsection may not be commenced, and the time limits for commencing an action under this subsection shall not begin to run, until ... the 31st day after the date on which notice of the determination is published in the Federal Register.
19 U.S.C. § 1516a(a)(5)(A). Moreover, Congress purposefully amended relevant statutes and regulations to ensure that domestic procedures for judicial review of a final determination may not be commenced until the time for requesting a panel has expired. See NAFTA Art. 1904(15)(c), (i). As also discussed above, the 30 day period corresponds directly to time limits under NAFTA for binational panel review that this court has no ability to alter. Thus, to read an equitable tolling provision into the statute would potentially imply an exception for tolling in virtually all time limitations throughout the statute, as well as in the NAFTA regulationsa kind of tolling for which the court has found no precedent. Cf. Brockamp, 519 U.S. at 353, 117 S.Ct. 849 (holding that a statute's technical language, the iteration of the limitations in both procedural and substantive forms, and the explicit listing *1326 of exceptions, taken together, indicate that Congress did not intend courts to read other unmentioned, open-ended, "equitable" exceptions into the statute).
Furthermore, Irwin makes clear that equitable tolling is extended "only sparingly," and where "the complainant has been induced or tricked by his adversary's misconduct..." 498 U.S. at 96, 111 S.Ct. 453; see also Frazer v. United States, 288 F.3d 1347, 1353-54 (2002) ("equitable tolling is available only when the lateness is attributable, at least in part, to misleading governmental action"). Plaintiffs characterize the Commission's arguments in Bhullar, that a summons and complaint must be filed within 31 days after publication in the Federal Register, as the agency's interpretation of section 1516a. Although they argue that the Commission failed to timely notify the Court of its mistake in interpreting the statute, plaintiffs do not indicate that they had been induced to file their summons on the 29th day after publication by any trickery or government misconduct. Furthermore, there is no support for the proposition that the government's misreading of the statute and argument in one case constitute trickery or misconduct to plaintiffsparties in a case entirely unrelated to the lawsuit in question.
Finally, plaintiffs fail to establish that they acted diligently. Cf. Former Employees of Sonoco Products Co. v. Elaine Chao, 27 CIT ___, 273 F.Supp.2d 1336, 1341 (2003) (requiring a party seeking to apply the doctrine of equitable tolling to show that it exercised due diligence in preserving its legal rights), affd, 372 F.3d 1291. Courts have found due diligence where a party made reasonable and sustained attempts to resolve questions or ambiguities and reasonably attempted to comply with the statutory time limits. See Former Employees of Quality Fabricating, Inc. v. United States Sec. of Labor, 27 CIT ___, 259 F.Supp.2d 1282, 1286 (2003). There is no indication that plaintiffs attempted to resolve any apparent discrepancy between the clearly stated statutory time limits and the contradictory language in Bhullar. Neither is there any indication of any communication between plaintiffs and the Commission regarding the statutory language. Furthermore, plaintiffs, being represented by able counsel, are aware that where a statute is unambiguous on its face, it is controlling. Thus, the court is unable to apply the principle of equitable tolling in this instance and to establish a new interpretation of section 1516a(a)(5)(A) for future actions, as plaintiffs request.
III. Conclusion
For the foregoing reasons, the International Trade Commission's motion to dismiss is hereby GRANTED.
NOTES
[1] The petition was originally filed by the North Dakota Wheat Commission and the U.S. Durum Growers Association. The Durum Growers Trade Action Committee was added as a petitioner by amendment.
[2] Section 1516a(a)(5) states (a) Review of determination . . .
(5) Time limits in cases involving merchandise from free trade area countries. Notwithstanding any other provision of this subsection, in the case of a determination to which the provisions of subsection (g) apply, an action under this subsection shall not begin to run, until the day specified in whichever of the following subparagraphs applies:
(A) For a determination described in paragraph (1)(B) or clause (i), (ii) [negative final determinations by the Commission], or (iii) of paragraph (2)(B), the 31st day after the date on which notice of the determination is published in the Federal Register.
[3] Plaintiffs, throughout their briefs in this matter, repeatedly fail to indicate that the Federal Circuit's opinion affirming Bhullar was issued as unpublished, and thus may not be cited as precedent. To the contrary, plaintiffs consistently cite to this opinion as controlling precedent in this case.
[4] Plaintiffs submit to the court, attached to their brief in opposition to defendant's motion to dismiss, a copy of the briefs in the Bhullar case. What the Commission argued in Bhullar is irrelevant to this case, and, in any event, the government is free to change its opinion regarding the interpretation of laws and to mend in subsequent proceedings any mistakes previously made.
[5] 19 U.S.C. § 1516a(g) states
(g) Review of countervailing duty and antidumping duty determinations involving free trade area country merchandise.
(1) Definition of determination. For purposes of this subsection, the term "determination" means a determination described in
(A) paragraph (1)(B) of subsection (a), or
(B) clause (i), (ii), (iii), or (vi) of paragraph (2)(B) of subsection (a), if made in connection with a proceeding regarding a class or kind of free trade area country merchandise, as determined by the administering authority.
[6] 19 U.S.C. § 1516a(a)(2) states
(2) Review of determinations on record. (A) In general. Within thirty days after (i) the date of publication in the Federal Register of...
(II) an antidumping or countervailing duty order based upon any determination described in clause (i) of subparagraph (B) . . .
[7] Because the court finds that subsection (g) is applicable to the facts at hand, plaintiff's alternative argument that section 1516a(a)(2) controls does not apply.
[8] The government, in its Reply Brief, states that in making its argument that the summons was untimely in the Bhullar case, the Commission's counsel inadvertently truncated the language of 19 U.S.C. § 1516a(a)(5), and the mistake was carried through papers in that case subsequently filed with this Court and the Federal Circuit. Deft.'s Reply to Pl.'s Resp. in Opp. to Deft.'s Mot. to Dismiss, 10. Pointing out that although there was no advantage gained by that mistake because even under the correct statutory language the Plaintiff's summons was still very untimely, the Commission's attorney in that case and the International Trade Commission General Counsel's Office indicate that they take responsibility for and sincerely regret the oversight. Id.
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01-03-2023
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02-03-2013
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https://www.courtlistener.com/api/rest/v3/opinions/1042745/
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FILED
COURT OF APPEALS
DIVISIOtl 11
2013 OCT - I AM 9: 10
STATE OF WASHINGTON
Y
E TY
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
In the Matter of the Marriage of:
RICHARD B.FERGUSON,
Respondent, No. 43303 6 II
- -
V. UNPUBLISHED OPINION
PAMELA A.FERGUSON,
Appellant.
MAxA,J. —Pamela Ferguson appeals the trial court's denial of her motion to vacate a
dissolution decree entered after her default, claiming that the decree should be vacated as void
under CR 60( )(
5)b because the property distribution provisions exceeded the relief requested in
her former husband's petition for dissolution. Specifically, she argues that the property division
was extremely one sided and therefore exceeded the petition's request that the trial court order a
-
fair and equitable"division. She also argues that the trial court abused its discretion in denying
her request for attorney fees. We disagree, and affirm.
FACTS
After 11 years of marriage, Richard and Pamela Ferguson separated in April 2004.
Richard filed a petition for dissolution of marriage in August. The petition alleged that the
parties owned community or separate property and requested that the trial court make a "fair and
1
Because the parties have the same last name, we refer to them by their first names for clarity.
No. 43303 6 II
- -
equitable"division of all community and separate property and all the debts and liabilities.
Clerk's Papers (CP)at 2. The petition's relief requested"section asked for entry of a decree of
"
dissolution and division of the parties' property and liabilities. CP at 4. Although Pamela was
served personally with the summons and petition for dissolution, she did not appear or answer.
The court entered an order of default on September 1, and a copy of the order was mailed to
Pamela.
On December 14, 2004, Richard appeared before the court for a formal proof hearing.
Because she was in default, Pamela did not receive notice of this hearing and did not appear.
Richard presented a proposed division of property and liabilities. Richard's only testimony
regarding the parties' property and debts liabilities was that his proposed division was " air and
/ f
equitable ". Report of Proceedings (RP)Dec. 14, 2004) at 4. He presented no other substantive
(
evidence regarding the division.
The trial court adopted Richard's proposed division of property and liabilities and
incorporated the division into written findings of fact conclusions of law and the dissolution
/
decree. The decree awarded the family home and significant other property, as well as most of
the community debts, to Richard. The decree awarded Pamela minimal property and debt. In a
written conclusion of law the trial court ruled that the division was fair and equitable. Richard
did not serve Pamela with a copy of this final decree.
In late December 2004 or early January 2005, Pamela moved.back into the family home.
The parties dispute the nature of this arrangement and whether Pamela knew the dissolution was
final. The relationship eventually deteriorated, and in September 2011 Richard filed an unlawful
2
Richard used the " hort form"mandatory dissolution form. RCW 26. 9.
s 006.
0
2
No. 43303 6 II
- -
detainer action to remove Pamela from the home. Pamela was evicted from the residence on
November 17.
On December 16, 2011, Pamela moved the trial court to vacate the 2004 dissolution
decree under CR 60( ) also requested an award of attorney fees. The commissioner denied
b and
the motion to vacate, and the trial court denied Pamela's motion for revision and request for
attorney fees. Pamela moved for reconsideration, arguing that the trial court had erred in ruling
that vacating a void judgment was within the court's discretion. The trial court denied
reconsideration and clarified that its previous ruling did not rely on whether the decision to
vacate a void judgment was discretionary.
Pamela appeals, arguing that the dissolution decree is void and should be vacated under
CR 60( )(
5).
b
ANALYSIS
A. MOTION To VACATE - CR 60( )(
5)b
CR 60( )(
5)b provides that a court may relieve a party from a final judgment if the
judgment is void. Pamela argues that the dissolution decree is void because the decree's
property division extremely
was " one -sided ", and therefore exceeded the petition's request that
the trial court order a fair and equitable property division. Br. of Appellant at 15. We disagree.
1. Standard of Review
Generally, a decision to grant or deny a motion to vacate a judgment under CR 60( )
b is
within the trial court's sound discretion and will not be disturbed absent an abuse of discretion.
Pamela also sought to vacate the decree under CR 60( )( and (11)other).The
4) b fraud) ( (
commissioner denied relief on those grounds, and Pamela does not seek review of those portions
of the order.
No. 43303 6 II
- -
In re Marriage ofHughes, 128 Wn. App. 650, 657, 16 P. d 1042 (2005).However, courts have
1 3
a mandatory, nondiscretionary duty to grant relief from void judgments. Ahten v. Barnes, 158
Wn. App. 343, 350, 242 P. d 35 (2010).Therefore, we review de novo a trial court's decision to
3
grant or deny a CR 60( )( to vacate a void judgment. Ahten, 158 Wn. App. at 350.
5)b motion
2. Timeliness of Motion
Pamela filed her motion to vacate under CR 60( )( years after the trial court
5)b seven
entered the dissolution decree. Notwithstanding the "reasonable time"requirement of CR 60( ),
b
motions to vacate void judgments under CR 60( )( be brought at any time. Ahten, 158
5)b may
Wn. App. at 350. Accordingly, Pamela's CR 60( )( to vacate was timely.
5)b motion
3. Mandatory Duty To Vacate Void Judgments .
Pamela argues that we must reverse because the trial court stated that its decision to
vacate a void judgment was discretionary. As we noted above, this statement was incorrect. See
Ahten, 158 Wn. App. at 350 (stating that courts must vacate void judgments).However, on
reconsideration the trial court clarified that because it did not declare the judgment void,its
denial of Pamela's motion did not depend on whether vacating a void judgment was
discretionary or mandatory. In any event, because our review is de novo the trial court's
erroneous statement is immaterial.
4. Validity of Decree
The primary issue in this case is whether the trial court erred in not finding the
dissolution decree void. CR 54( )
c provides that a "udgment by default shall not be different in
j
kind from or exceed in amount that prayed for in the demand for judgment."In other words, a
4
Pamela alleges that the trial court denied her motion to vacate on the basis that it was untimely,
but we disagree. In its oral ruling the court discussed timeliness, but ultimately considered the
motion on its merits.
S
No. 43303 6 II
- -
court may not enter a default judgment or decree that grants relief in excess of or substantially
different from that described in the complaint. Hughes, 128 Wn.App. at 658. A default
judgment or decree that grants such relief without notice and opportunity to be heard denies the
defaulting party procedural due process and is void. In re Marriage ofJohnson, 107 Wn. App.
500, 503 04,27 P. d 654 (2001).The key is that the complaint or petition must provide the
- 3
defendant " `sufficient notice to make an intelligent decision to appear or default.' " Johnson,
107 Wn. App. at 504 (quoting Conner v. Universal Utils., Wn. d 1.8, 172, 712 P. d 849
105 2 6 2
1986)).
In this case, the dissolution petition gave Pamela notice that Richard was requesting a
division of all property and liabilities. The " elief requested"portion of the petition expressly
r
asked for that division. This notice was sufficient to inform Pamela that she needed to appear in
order to have any input in that division. Pamela complains that the petition did not specify the
property being divided, but the broad petition language —calling for a division of all property —
should have provided an even greater incentive to appear and defend. Further,the decree of
dissolution in fact provided the exact relief requested —a division of all property and
debts liabilities.
/
Pamela relies on Johnson, where the wife filed a dissolution petition alleging that the
family home was worth $ 80, 00 and that each party should receive one half its value. 107 Wn.
2 0 -
App. at 502. She subsequently obtained an order of default and a final decree that awarded the
family home to the husband, made the wife a " ` judgment creditor' " and the husband a "
judgment debtor' " in the amount of 140, 00,and provided for interest to accrue on the
$ 0
judgment"amount. Johnson, 107 Wn. App. at 502 03. The decree also ordered the husband to
-
execute a deed of trust securing the wife's 140, 00 interest in the home. Johnson, 107 Wn.
$0
5
No. 43303 6 II
- -
App. at 503. We held that the decree was void because its terms varied substantially from the
relief requested in the petition. Johnson, 107 Wn. App. at 504 05.
-
Johnson is distinguishable. The petition in Johnson put the husband on notice that only
the specified value of the family home would be divided equally between husband and wife. 107
Wn. App. at 502, 504. The additional provisions that the husband would owe the wife a
140, 00 debt, pay interest on that debt, secure the debt by executing a deed of trust on the
0
home, and bear the entire risk of overvaluation of the home were substantially different than the
relief requested. Johnson, 107 Wn. App. at 504. In contrast, here the petition generally
requested a division of all property and debts liabilities. The decree provided that division and
/
nothing more.
The fact that Pamela now contends that the division was unfair does not mean that the
decree terms were substantially different than the notice she received of Richard's request for a
fair and equitable"division of property. The trial court has considerable discretion in
fashioning a property distribution that is equitable. In re Marriage ofFarmer, 172 Wn. d 616,
2
624, 259 P. d 256 (2011)citing RCW 26. 9.The entry of a decree and a conclusion of
3 ( 080).
0
law stating that the property division was fair and equitable —regardless of Pamela's opinion —
are sufficient to satisfy any due process concerns because Pamela was put on notice that the trial
court would be dividing the parties' property.
A contrary rule would give the defaulting party greater rights to challenge a trial court's
judgment than a party who appeared and answered. A party cannot move to vacate a judgment
under CR 60( )( because it belatedly seems unfair. However, under the rule Pamela
5)b merely
advocates, a defaulting party would be able to challenge a judgment's fairness under CR 60( )(
5)b
0
No. 43303 6 II
- -
whenever a plaintiff requested fair relief in a petition or complaint. And there would be no time
limit on such a challenge. The law does not require such a result.
5. Trial Court Evidence
Pamela also argues that the trial court should have required more evidence at the formal
proof hearing besides Richard's testimony that the property division was fair and equitable. She
points out that RCW 26. 9.
080 requires the trial court to consider " ll relevant factors"when
0 a
making a property disposition, and argues that the trial court did not consider such factors. Br. of
Appellant at 16 (emphasis omitted):
However, Pamela is seeking relief from a final judgment, not appealing as a matter of
right the trial court's original property division. Insufficiency of the evidence is not grounds for
vacating a judgment under CR b Burlingame
60( ). v. Consol. Mines & Smelting Co., Wn. d
106 2
328, 336, 722 P. d 67 (1986).The proper means for challenging sufficiency of evidence or other
2
alleged errors of law is an immediate appeal of the judgment. Burlingame, 106 Wn. d at 336;In
2
re Marriage of Tang, 57 Wn. App. 648, 654 56,789 P. d 118 (1990)applying rule to
- 2 (
characterization and valuation of property in dissolution action).We reject this collateral attack
on the trial court's conclusion that the property division was fair and equitable.
We hold that the trial court's property division did not substantially deviate from the
petition's request for a "fair and equitable"division, and therefore that the default decree is not
void under CR 60( )(
5).
b Accordingly, we affirm the trial court's denial of Pamela's motion to
vacate.
B. ATTORNEY FEES
Pamela alleges that the trial court abused its discretion by not awarding her attorney fees
under RCW 26. 9. And both parties request attorney fees and costs on appeal. We hold that
140.
0
7
No. 43303 6 II
- -
the trial court did not abuse its discretion in denying Pamela's fee request. In addition, we deny
the parties' requests for fees and costs on appeal.
1. Trial Court Fees
Under RCW 26. 9. trial court may award attorney fees "after considering the
140,
0 the
financial resources of both parties."The trial court must balance the needs of the requesting
parry against the other party's ability to pay. In re Custody ofBrown, 153 Wn. d 646, 656, 105
2
P. d 991 (2005).A challenge to a decree entered under the dissolution statute is a continuation
3
of the original action, and therefore fees may be awarded under RCW 26. 9.on a motion to
140
0
vacate. In re Marriage ofMoody, 137 Wn. d 979, 993 94,976 P. d 1240 (1999).
2 - 2
We review a trial court's decision to grant or deny a statutory attorney fee award for
abuse of discretion. In re Marriage of Coy, 160 Wn. App. 797, 807, 248 P. d 1101 (2011).A
3
trial court abuses its discretion if its decision is based on untenable grounds or untenable reasons.
Farmer, 172 Wn. d at 625.
2
In its oral ruling denying Pamela's motion to revise, the trial court stated that "[ ach
e]
parry can pay their own"and declined to order fees. RP (Feb. 24, 2012)at 20. The parties'
financial information submitted for the trial court's consideration demonstrated that both parties'
monthly expenses exceeded their respective monthly incomes by approximately double. Both
parties had regular income and neither appeared well-
situated to pay the opposing party's costs
and fees. Accordingly, we hold that the trial court did not abuse its discretion in denying
Pamela's request for attorney fees.
2. Fees on Appeal
Pamela now requests attorney fees and costs on appeal under RAP 18.1 and RCW
140.
26. 9. We have discretion to order a party to pay for the cost of maintaining the appeal and
0
8
No. 43303 6 II
- -
attorney fees in addition to statutory costs. RCW 26. 9. When awarding attorney fees, we
140.
0
examine the arguable merit of the issues and the parties' financial resources. Johnson, 107 Wn.
App. at 505. In order to receive attorney fees on appeal, a party must file a financial affidavit
with the court no later.than 10 days before oral argument. RAP 18. (
c). Pamela failed
1 Because
to file an affidavit of need, she is not entitled to fees under RCW 26. 9.
140.
0
Richard also requests fees and costs on.ppeal based on his allegation that the appeal is
a
meritless and pursued in bad faith. However, Richard has not provided any citation to authority
to support his position, and therefore we deny his,
request for fees on appeal. RAP 18. (
b);
1 Stiles
v. Kearney, 168 Wn. App. 250, 267, 277 P. d 9,review denied, 175 Wn. d 1016 (2012).
3 2
We affirm.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports but will be filed for public record pursuant to RCW 2.6.it is
040,
0
so ordered.
MAxA,J.
9
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4 N.Y.3d 887 (2005)
PEOPLE v. GUERRERO
Court of Appeals of the State of New York.
May 17, 2005.
Application in criminal case for leave to appeal denied. (Ciparick, J.).
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149 P.3d 1212 (2006)
342 Or. 253
Foster
v.
Hill
No. S54182.
Supreme Court of Oregon.
December 19, 2006.
Petitions for review Denied.
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236 Ga. 694 (1976)
225 S.E.2d 43
RHYNE
v.
GARFIELD.
30959.
Supreme Court of Georgia.
Submitted March 22, 1976.
Decided April 20, 1976.
Paul R. Kohler, for appellant.
Albert B. Wallace, for appellee.
HALL, Justice.
Plaintiff, Plato S. Rhyne, Jr., appeals from the grant of a motion to strike all three counts of his petition and the consequent dismissal of his complaint. We agree that the trial court was in error and reverse.
Rhyne contracted to purchase the home of Ramona Garfield for $90,000.00 on July 13, 1975. The covenants included a clause requiring the seller to furnish a "termite letter" and provided for payment of $1,000 earnest money and $8,000 in cash at closing, for the assumption of a $72,000 particularly described mortgage, and for the remaining $10,000 to be paid either in cash or pursuant to a five-year note to the seller. The terms of this note, as provided in the contract, were either "five equal annual payments, plus accrued interest of 8%," or "seller to accept $1,000 plus accrued interest the first year in lieu of the five equal payments, the balance to be paid in four equal payments plus accrued interest. First payment becoming due on September 1, 1976." There was no acceleration clause, nor were there provisions to secure the note in the contract.
On August 1, 1975, the closing date, the seller refused to consummate the sale. Rhyne thereafter brought this suit in three counts for specific performance and for damages for his loss of bargain. Garfield answered and filed her motion to strike Rhyne's claims because the contract was too vague and indefinite to be enforceable. The trial court granted her motion and dismissed the complaint.
*695 The standard to be applied to a motion to strike is the same as that on a motion for failure to state a claim upon which relief can be granted. Potpourri of Merrick v. Gay Gibson, 132 Ga. App. 565 (208 SE2d 579) (1974); Morgan v. White, 121 Ga. App. 794 (175 SE2d 878) (1970). This court recently reiterated that rule in Dillingham v. Doctors Clinic, 236 Ga. 302 (1976): "`Under the CPA, a pleading should 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.' Cochran v. McCollum, 233 Ga. 104 (210 SE2d 13) (1974)." This applies to equitable cases as well as to those at law. Durbin v. Woods, 235 Ga. 120 (218 SE2d 865) (1975); Ammons v. Bolick, 233 Ga. 324 (210 SE2d 796) (1974).
Garfield's contention that the requirement of a "termite letter" rendered the contract too vague and indefinite to be enforceable is without merit. This term's meaning and the contractors' intentions are issues of fact to be determined by the trial court. We cannot say, applying the Dillingham standard, that the plaintiff cannot show by any set of facts what the parties had in mind. Code Ann. § 20-702; Paul v. Paul, 235 Ga. 382 (219 SE2d 736) (1975).
Similarly, the trial court erred in holding that the payment plan set out in the contract was unenforceable as a matter of law. There is nothing inherently vague or improper in providing for alternative forms of payment in a contract to sell realty as long as each alternative is sufficiently definite to be enforced. Horner v. Savannah Valley Enterprises, 234 Ga. 371 (216 SE2d 113) (1975) (compare with Thomas v. Harris, 127 Ga. App. 361 (193 SE2d 260) (1972)). The alternatives embodied in the contract meet this criterion. Griffis & Weaver Builders v. Hopson, 230 Ga. 459 (197 SE2d 694) (1973); Penta Investments, Inc. v. Robertson, 230 Ga. 401 (197 SE2d 358) (1973); Chewning v. Brand, 230 Ga. 255 (196 SE2d 399) (1973).
Furthermore, there is no requirement that a note must include an acceleration clause or that a note must be secured. Chewning v. Brand, supra, reversing Morris v. Yates, 226 Ga. 43 (3) (172 SE2d 428) (1970). These are *696 matters of bargaining to be considered at the time of the contract.
The trial court erred in granting Garfield's motions to strike and dismissing the complaint.
Judgment reversed. All the Justices concur.
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211 Ga. 241 (1954)
85 S.E.2d 8
CRAWFORD et al.
v.
IRWIN et al.
18768.
Supreme Court of Georgia.
Argued October 13, 1954.
Decided November 10, 1954.
Rehearing Denied December 2, 1954.
*244 Nelson & Nelson, Carl K. Nelson, for plaintiffs in error.
W. S. Mann, R. M. Daley, contra.
HEAD, Justice.
1. The allegations of the petitioners' amendment are insufficient to establish any contract between the petitioners, or citizens and patrons of the Glenwood High School, with the County Board of Education of Wheeler County for the maintenance of a high school in the Glenwood District.
The Constitution of 1945, art. VIII, sec. V, par. I (Code, Ann., § 2-6801), provides in part: "Each county, exclusive of any independent school system now in existence in a county, shall compose one school district and shall be confined to the control and management of a County Board of Education."
It is not contended that this or any other provision of the Constitution, or any act of the General Assembly, relating to schools in this State, confers upon a county board of education any right to contract for the maintenance of a school continuously or for any period of time in any school district in this State. The allegations of the amendment are insufficient to show any such contract by implication. Assuming that every allegation of the amendment is true, and that the patrons of the Glenwood School have contributed to the maintenance of the school all that is alleged, the most that could be said is that the citizens and patrons of this school district have shown a commendable attitude in their desire that their children have the use of the best facilities within the power of the citizens and patrons to provide. To hold that, because citizens or patrons of a school had made large contributions to the school, a contract for the continuous operation of the school had arisen by implication, would be to limit and restrict county boards of education in receiving gifts or grants for public education in this State. In the absence of any constitutional or statutory provision authorizing contracts for the continuance of a school for an indefinite period of time, a contract for continuance may not arise by implication *245 because citizens and patrons of the school have been generous and have donated good facilities for the use and benefit of the children of the school district.
2. Generally, laws take effect from the date of their enactment, and ignorance of the law is no excuse. Code § 102-105; Woodburn v. Western Union Telegraph Co., 95 Ga. 808 (23 S.E. 116); City of Valdosta v. Singleton, 197 Ga. 194, 208 (28 S.E.2d 759), and citations. The contention of the petitioners that they were surprised by the amendment pleading the act approved December 18, 1953 (Ga. L. 1953, Nov.-Dec. Sess., pp. 282, 283), is without merit, and the trial judge did not abuse his discretion in refusing to continue the case to the next term.
3. The act of 1953, above cited, conferred upon the County Board of Education of Wheeler County a discretion to act, with which they were not vested at the time of the decision of this court in the former appearance of this case. See Irwin v. Crawford, 210 Ga. 222 (78 S.E.2d 609). The General Assembly had the power to confer on county boards of education the right to consolidate schools, in whole or in part, in the exercise of the discretion of such board.
In the present case the County Board of Education of Wheeler County had not adopted any formal order, motion, or resolution consolidating the two high schools. If, in the future, after a due consideration of the matter, the county board of education decides to consolidate the high school at Glenwood with the high school at Alamo, and if there should be objection, the petitioners have the right to a hearing before the county board of education and an appeal to the State Board of Education. Laws operating upon the remedy are not unconstitutional and void. Code § 102-104; Walker Electrical Co. v. Walton, 203 Ga. 246 (46 S.E.2d 184), and citations.
What is said here is not in conflict with the decision of this court in Hobbs v. Bishop, 210 Ga. 818 (82 S.E.2d 839). In the Hobbs case the board of education had adopted formal orders and resolutions for the consolidation of portions of two schools prior to the act of 1953. In the Hobbs case the board of education was relying upon orders and resolutions adopted at a time when the board was without a discretion to act, under the ruling of this court in Irwin v. Crawford, supra.
*246 4. Verdicts must be founded on testimony, and where none is introduced, the defendant is not entitled to a verdict. Stotesbury v. Lanier, 42 Ga. 120; Burdell v. Blain, 66 Ga. 169 (2); Sprinz v. Frank, 81 Ga. 162 (7 S.E. 177); Horne v. Rodgers, 103 Ga. 649 (3) (30 S.E. 562).
Since there was no testimony introduced in the present case, the defendants were not entitled to have a verdict directed in their favor. This, however, does not afford cause for reversing the judgment of the court below. Since the petitioners in the cause could not prevail and were not entitled to any relief, direction is given that the verdict directed by the court, and the judgment entered thereon, be stricken and a judgment be entered denying the petitioners' prayers for relief.
Judgment affirmed with direction. All the Justices concur, except Wyatt, P. J., who dissents.
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178 Cal. App. 4th 869 (2009)
LAW OFFICES OF ANDREW L. ELLIS, Plaintiff and Respondent,
v.
MELANIE YANG et al., Defendants and Appellants.
No. B205452.
Court of Appeals of California, Second District, Division Three.
October 27, 2009.
*872 Law Offices of Jeffrey T. Bell and Jeffrey T. Bell for Defendants and Appellants.
Law Offices of Andrew L. Ellis, Andrew L. Ellis and Mitchell J. Langberg for Plaintiff and Respondent.
OPINION
ALDRICH, J.
I.
INTRODUCTION
In this appeal from the denial of an anti-SLAPP motion (Code Civ. Proc., § 425.16),[1] we hold that the trial court lacked the jurisdiction to rule on the merits of the motion because prior to the ruling plaintiff had voluntarily dismissed the case before trial had commenced, i.e., plaintiff had filed a *873 request for dismissal prior to the trial court making a dispositive ruling or giving an indication of the merits of the underlying case, and prior to a time when the procedural posture was such that plaintiff would inevitably lose.
II.
FACTUAL AND PROCEDURAL BACKGROUND
A. The initial facts.
Defendants and appellants are Melanie Yang, individually and doing business as the Law Offices of Melanie M. Yang, and Wei Zang, also known as William Zhang. Defendant Zang worked as an office manager in defendant Yang's law firm.
In 2006, defendants retained plaintiff and respondent the Law Offices of Andrew L. Ellis, a professional corporation (plaintiff or the firm), to represent defendant Zang in James Li v. Wei Zang.
Defendant Zang was not pleased with the representation he received from plaintiff in James Li v. Wei Zang. Defendants refused to pay plaintiff's attorney fee bill.
B. The complaint in the instant matter.
Plaintiff sued defendants alleging breach of contract, fraud in the inducement (false promises), and intentional interference with prospective economic relations. Plaintiff alleged the following: The firm had agreed to represent defendant Zang in James Li v. Wei Zang based upon defendants' promises that defendant Yang would guarantee the payment of attorney fees, defendants would transfer five civil lawsuits to the firm, and the firm would split fees with defendant Yang on the referred cases. Four proposed clients agreed to plaintiff's representation after meeting with Attorney Andrew L. Ellis, the principal attorney in the firm. Defendants breached the agreement because they never referred a fifth case to the firm. The firm competently represented Zang in James Li v. Wei Zang in a lengthy trial that resulted in a verdict against Zang for about $4,000. Defendants breached their agreement by refusing to pay the firm attorney fees owed. Defendants "began a concerted effort to interfere with plaintiff's contractual relationships with the four (4) clients [whose cases] had been transferred ...." Further, "defendants ... quickly arranged for another attorney to take the [four] cases away from *874 plaintiff, in an effort to harm plaintiff by depriving it of its ... share of the contingency fees."
Attorney Ellis and Attorney Hugh Jeffrey Grant represented plaintiff in the lawsuit against defendants.
C. Defendants' anti-SLAPP motion.
Defendants answered. Defendants also filed an anti-SLAPP motion to strike pursuant to Code of Civil Procedure section 425.16.
Thereafter, defendants filed a document entitled "notice of non-opposition to defendants' notice of motion and special motion to strike ...." In this document, defendants requested the trial court grant their motion to strike because plaintiff had not filed an opposition thereto.
On August 29, 2007, the day before the scheduled hearing, plaintiff filed a request for dismissal without prejudice.
On August 30, 2007, the parties appeared for hearing on defendants' anti-SLAPP motion. The trial court stated that plaintiff's request for dismissal did not prevent the court from going forward and the court indicated that it appeared the anti-SLAPP motion should be granted. Attorney Grant, appearing for plaintiff, stated his office had inadvertently erred in not opposing the anti-SLAPP motion. He also stated that after the case was dismissed, he intended to file another complaint. Attorney Grant then presented an oral argument as to why the anti-SLAPP motion should not be granted and he made a request to continue the matter so plaintiff could file an opposition to defendants' motion. Defendants argued against the continuance request and argued their motion should be granted. The trial court did not continue the case and took the matter under submission noting that plaintiff's recourse was to file a motion for relief pursuant to Code of Civil Procedure section 473 or a motion for reconsideration (Code Civ. Proc., § 1008).
A week later, the clerk served the parties with a notice of entry of order, attaching the trial court's ruling granting the anti-SLAPP motion. In its order, the trial court also ruled that the dismissal had not mooted the motion and held that defendants were entitled to attorney fees pursuant to Code of Civil Procedure section 425.16, subdivision (c).
D. Plaintiff's motion to set aside the dismissal and the court's grant of reconsideration on its own motion.
Six days after the parties were served with the trial court's ruling on defendants' anti-SLAPP motion, defendants filed a motion seeking attorney fees and costs. (Code Civ. Proc., § 425.16, subd. (c).)
*875 Thereafter, plaintiff moved for relief pursuant to Code of Civil Procedure section 473, subdivision (b). Plaintiff attached to the motion Attorney Grant's declaration in which he explained why he had not filed an opposition to the anti-SLAPP motion and he requested an opportunity to do so.
Plaintiff also moved the court ex parte to continue defendants' motion for attorney fees until after its motion for relief could be heard. The trial court granted this motion and placed defendants' attorney fees motion off calendar.
Subsequently, the trial court denied plaintiff's Code of Civil Procedure section 473 motion. However, the court granted reconsideration on its own motion of its ruling on defendants' anti-SLAPP motion. The trial court gave defendants an opportunity to reply to plaintiff's opposition to the anti-SLAPP motion previously filed, and set the hearing on the anti-SLAPP motion for January 3, 2008.
E. The trial court's ruling on the reconsideration motion.
Despite the request for voluntary dismissal filed by plaintiff, the court held that it had jurisdiction to hear defendants' anti-SLAPP motion and also had jurisdiction to reconsider its ruling on the motion. On January 8, 2008, the trial court issued its ruling granting reconsideration and denying defendants' anti-SLAPP motion to strike. In doing so, the trial court relied on Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal. App. 4th 1049 [18 Cal. Rptr. 3d 882] and Simmons v. Allstate Ins. Co. (2001) 92 Cal. App. 4th 1068 [112 Cal. Rptr. 2d 397].
Defendants appeal from the order denying their anti-SLAPP motion to strike (Code Civ. Proc., § 425.16).
III.
CONTENTIONS
Defendants contend on appeal that (1) the trial court lacked the jurisdiction to reconsider, on the court's own motion, the anti-SLAPP motion; (2) the trial court erred in denying their anti-SLAPP motion to strike; and (3) the complaint should be struck because it violated the attorney-client privilege.
In addition to other contentions, plaintiff contends that because it voluntarily had dismissed its complaint, the trial court was without jurisdiction to *876 consider defendants' anti-SLAPP motion and was only permitted to decide if attorney fees and costs should have been awarded to defendants. Plaintiff is correct. Further, because this contention is dispositive and because it involves a jurisdictional inquiry, we need only address this contention.
We vacate the trial court's order denying defendants' anti-SLAPP motion and remand the case to the trial court with directions to enter a dismissal without prejudice.
IV.
DISCUSSION
The trial court had no jurisdiction to entertain defendants' anti-SLAPP motion to strike because plaintiff had filed a dismissal before the court considered defendants' motion.
(1) Pursuant to Code of Civil Procedure section 581, subdivisions (b) and (c), plaintiffs have the right to voluntarily dismiss an entire action, or causes of action within a pleading, before the commencement of trial. A request for a dismissal is usually effective upon filing, and no other action by the clerk or the court is required. (Aetna Casualty & Surety Co. v. Humboldt Loaders, Inc. (1988) 202 Cal. App. 3d 921, 931 [249 Cal. Rptr. 175] (Aetna Casualty).) "`[N]either the clerk nor the trial court has any discretion in the matter. [Citation.]' (O'Dell v. Freightliner Corp. (1992) 10 Cal. App. 4th 645, 659 [12 Cal. Rptr. 2d 774].)" (Conservatorship of Martha P. (2004) 117 Cal. App. 4th 857, 866 [12 Cal. Rptr. 3d 142]; see Aetna Casualty, supra, at p. 931.) Upon the proper filing of a request to voluntarily dismiss a matter, the trial court loses jurisdiction to act in the case, "except for the limited purpose of awarding costs and statutory attorney fees." (Gogri v. Jack in the Box Inc. (2008) 166 Cal. App. 4th 255, 261 [82 Cal. Rptr. 3d 629]; accord, Conservatorship of Martha P., supra, at p. 866.) "[A]ll subsequent proceedings [are] void." (Aetna Casualty, supra, at p. 931; accord, Gogri v. Jack in the Box Inc., supra, at p. 261.)
Code of Civil Procedure section 581 reads in pertinent part: "(b) An action may be dismissed in any of the following instances: [¶] (1) With or without prejudice, upon written request of the plaintiff to the clerk, filed with papers in the case, or by oral or written request to the court at any time before the actual commencement of trial, upon payment of the costs, if any. [¶] ... [¶] (c) A plaintiff may dismiss his or her complaint, or any cause of action *877 asserted in it, in its entirety, or as to any defendant or defendants, with or without prejudice prior to the actual commencement of trial." (Italics added.)[2]
(2) Subdivision (a) of Code of Civil Procedure section 581 sets forth the definition of when trial commences. It reads: "As used in this section: [¶] ... [¶] (6) `Trial.' A trial shall be deemed to actually commence at the beginning of the opening statement or argument of any party or his or her counsel, or if there is no opening statement, then at the time of the administering of the oath or affirmation to the first witness, or the introduction of any evidence." (Ibid.) The phrase "`commencement of trial'" and the definition of "`trial'" are "`illustrative rather than exclusive ....' [Citation.]" (Gray v. Superior Court (1997) 52 Cal. App. 4th 165, 171 [60 Cal. Rptr. 2d 428]; see Franklin Capital Corp. v. Wilson (2007) 148 Cal. App. 4th 187, 194 [55 Cal. Rptr. 3d 424].) Courts examine the circumstances to determine if, in that situation, a trial has "commenced," and thus, whether the plaintiff is precluded from voluntarily dismissing the case. (Cravens v. State Bd. of Equalization (1997) 52 Cal. App. 4th 253, 256 [60 Cal. Rptr. 2d 436] [right to voluntarily dismiss action is not absolute].)
For example, "once a general demurrer is sustained with leave to amend and plaintiff does not so amend within the time authorized by the court or otherwise extended by stipulation or appropriate order, he [or she] can no longer voluntarily dismiss his [or her] action pursuant to [Code of Civil Procedure] section 581, even if the trial court has yet to enter a judgment of dismissal on the sustained demurrer." (Wells v. Marina City Properties, Inc. (1981) 29 Cal. 3d 781, 789 [176 Cal. Rptr. 104, 632 P.2d 217].)
(3) Until recently, the cases have not presented a completely clear or cohesive test to describe which situations deprive plaintiffs of their right to voluntarily dismiss their cases, nor have the cases articulated a precise rule providing guidance in all circumstances. (See Franklin Capital Corp. v. Wilson, supra, 148 Cal. App. 4th 187 for a compilation of cases discussing when a plaintiff is precluded from voluntarily dismissing a case.) However, recent authority suggests parties are not permitted to voluntarily dismiss their actions after the court has made a dispositive ruling, given some indication of the legal merits of the case, or when the procedural posture is such that it is inevitable the plaintiff will lose. After such occurrences, these cases hold that plaintiffs lose their right to voluntarily dismiss their case. (E.g., Franklin Capital Corp. v. Wilson, supra, at p. 200 [voluntary dismissal without prejudice ineffective where "in the light of a public and formal indication by the trial court of the legal merits of the case, or [¶] ... in the light of some *878 procedural dereliction by the dismissing plaintiff that made dismissal otherwise inevitable"]; Mossanen v. Monfared (2000) 77 Cal. App. 4th 1402, 1409 [92 Cal. Rptr. 2d 459] [exception to plaintiffs' absolute right to dismiss where action has proceeded to a determinative adjudication, or to a decision that is tantamount to an adjudication]; accord, Gray v. Superior Court, supra, 52 Cal. App. 4th 165 [plaintiff's right to dismiss cut off by evidentiary proceedings before a referee]; Gogri v. Jack in the Box Inc., supra, 166 Cal.App.4th at p. 267 [voluntary requests for dismissals are untimely where "prior tentative rulings or other special circumstances [make] judgment for the defendant inevitable"].)
We agree with Franklin Capital Corp. v. Wilson, supra, 148 Cal. App. 4th 187 and other authority that this is the most logical way to synthesize the cases. (See also Lewis C. Nelson & Sons, Inc. v. Lynx Iron Corp. (2009) 174 Cal. App. 4th 67, 76-79 [94 Cal. Rptr. 3d 468].) When some events demonstrate it is inevitable that the plaintiff will not be successful, a plaintiff loses the right to voluntarily dismiss his or her case. (Id. at pp. 201-202, 204; cf. Datner v. Mann Theatres Corp. (1983) 145 Cal. App. 3d 768, 771 [193 Cal. Rptr. 676] [informal tentative ruling does not cut off right to voluntary dismissal]; contra, Hartbrodt v. Burke (1996) 42 Cal. App. 4th 168, 175 [49 Cal. Rptr. 2d 562] [without much elaboration, court of appeal holds voluntary dismissal request ineffective when filed day before hearing on motion for terminating sanction in a discovery dispute].)
(4) Here, at the time plaintiff dismissed its complaint without prejudice, the trial court had not made a tentative or definitive ruling on defendants' anti-SLAPP motion and it was not inevitable that the motion would be granted. Even though plaintiff had not filed an opposition to defendants' anti-SLAPP motion, defendants' success was not guaranteed. In their motion to strike, defendants were required to make a "threshold showing that the challenged cause of action is one arising from protected activity. [As the moving party defendants'] burden [was] to demonstrate that the act or acts of which the plaintiff complains were taken `in furtherance of the [defendants'] right of petition or free speech under the United States or California Constitution in connection with a public issue,' as defined in [Code of Civil Procedure section 425.16, subdivision (b)(1)]." (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal. 4th 53, 67 [124 Cal. Rptr. 2d 507, 52 P.3d 685].) Only if defendants met this requirement would plaintiff have been required to demonstrate a probability of prevailing on the claim in order to defeat the motion. (Ibid.) If plaintiff failed to do so, only then would the trial court have granted the motion to dismiss. (Evans v. Unkow (1995) 38 Cal. App. 4th 1490, 1499 [45 Cal. Rptr. 2d 624].) When the evidence is submitted, the trial court does not weigh the evidence. Thus, the "submission of evidence in a [Code of Civil Procedure] section 425.16 motion does not constitute `commencement of trial' under [Code of Civil Procedure] section *879 581." (Kyle v. Carmon (1999) 71 Cal. App. 4th 901, 910 [84 Cal. Rptr. 2d 303] (Kyle).) Therefore, plaintiff's failure to oppose the anti-SLAPP motion did not guarantee defendants would prevail and obtain an order to strike.
(5) Further, the anti-SLAPP statute, Code of Civil Procedure section 425.16, anticipates circumstances in which parties dismiss their cases while motions to strike are pending. In such circumstances, the trial court is given the limited jurisdiction to rule on the merits of the motion in order to decide if it should award attorney fees and costs to the defendants. (Pfeiffer Venice Properties v. Bernard (2002) 101 Cal. App. 4th 211, 216, 218-219 [123 Cal. Rptr. 2d 647]; Code Civ. Proc., § 425.16, subd. (c).) Thus, here when plaintiff dismissed its case at a time when defendants' anti-SLAPP motion was pending, the trial court continued to have jurisdiction over the case only for the limited purpose of ruling on defendants' motion for attorney fees and costs. (Code Civ. Proc., § 425.16, subd. (c); Kyle, supra, 71 Cal.App.4th at p. 908, fn. 4.)
(6) The decision in Kyle, supra, 71 Cal. App. 4th 901, supports our conclusion. In Kyle, James Kyle sued Shelly Carmon. The appellate court held that Kyle had the right to dismiss his case against Carmon with prejudice while Carmon's anti-SLAPP motion was pending, but before the trial court had ruled on the motion. (Id. at p. 905.) Kyle noted that in the case before it, Kyle had dismissed the case with prejudice, and thus, Carmon and the court would not be subjected "to wasteful proceedings and continuous litigation. [Citation.]" (Id. at p. 909.) However, Kyle was not limited to situations where a plaintiff filed a request for dismissal with prejudice. Kyle also stated that while Kyle had stressed that his "dismissal was with prejudice.... [T]he current statute treats equally dismissals with or without prejudice, with respect to the right to dismiss before commencement of trial. ([Code Civ. Proc.,] § 581, subd. (c) ....)" (Kyle, supra, at p. 909, fn. omitted.) Kyle held that "a plaintiff retains the right to voluntary dismissal at any time before a ruling by the trial court on a [Code of Civil Procedure] section 425.16 motion." (Kyle, supra, at p. 912.) Kyle noted, however, that when plaintiffs dismiss their cases before the trial court rules on the anti-SLAPP motion, the trial court continues to have jurisdiction over the case for purposes of deciding if the plaintiffs are responsible for attorney fees and costs, but not to rule on the anti-SLAPP motion. (Id. at pp. 908, fn. 5, 917-919.)
Here, the trial court cited Sylmar Air Conditioning v. Pueblo Contracting Services, Inc., supra, 122 Cal. App. 4th 1049 and the case upon which it relied, Simmons v. Allstate Ins. Co., supra, 92 Cal. App. 4th 1068, to support its conclusion that it had jurisdiction to consider defendants' anti-SLAPP motion even though plaintiff had filed a voluntary request for dismissal.
*880 In Simmons v. Allstate Ins. Co., supra, 92 Cal. App. 4th 1068, defendant Lester A. Simmons filed a cross-complaint against plaintiff Allstate Insurance Company. "At the hearing on [Allstate's anti-SLAPP motion,] Simmons's counsel, faced with an adverse tentative ruling, asked the court to grant Simmons leave to amend the cross-complaint. The court issued an order striking Simmons's cross-complaint and denied leave to amend." (Id. at p. 1072.) On appeal, the appellate court held that the trial court did not err in denying Simmons's motion to amend. The appellate court first noted that "[a]s Simmons concedes, the anti-SLAPP statute makes no provision for amending the complaint once the court finds the requisite connection to First Amendment speech." (Id. at p. 1073.) The appellate court then stated that to allow amendments after there was a tentative ruling would be contrary to the purpose of the anti-SLAPP motion: "Allowing a SLAPP plaintiff leave to amend the complaint once the court finds the prima facie showing has been met would completely undermine the statute by providing the pleader a ready escape from [Code of Civil Procedure] section 425.16's quick dismissal remedy. Instead of having to show a probability of success on the merits, the SLAPP plaintiff would be able to go back to the drawing board with a second opportunity to disguise the vexatious nature of the suit through more artful pleading. This would trigger a second round of pleadings, a fresh motion to strike, and inevitably another request for leave to amend." (Simmons, supra, at p. 1073.) Thus, Simmons was foreclosed from amending his cross-complaint because the court already had issued a tentative ruling to grant Allstate's anti-SLAPP motion. In contrast, in the case before us, there had been no tentative ruling prior to plaintiff's filing of the request for dismissal.
In Sylmar Air Conditioning v. Pueblo Contracting Services, Inc., supra, 122 Cal. App. 4th 1049, Watts/Willowbrook Boys and Girls Club (Watts/Willowbrook) sued Pueblo Contracting Services, Inc. (Pueblo). Pueblo cross-complained against Watts/Willowbrook and various subcontractors, including Sylmar Air Conditioning (Sylmar). Sylmar, in turn, cross-complained against Pueblo. (Id. at pp. 1052-1053.) Pueblo filed its anti-SLAPP motion addressing the third cause of action in Sylmar's cross-complaint and also filed a demurrer. Sylmar opposed the motion. (Id. at pp. 1053, 1058.) "Three days before the SLAPP motion and demurrers were to be heard, Sylmar filed a first amended complaint. The third cause of action still alleged fraud, but it was pleaded in greater detail. [¶] ... [T]he trial court granted the SLAPP motion and issued a written decision setting forth its reasoning. The court struck the third cause of action and awarded attorney fees and costs to Pueblo. It also found the demurrers moot. [¶] ... [Then,] Pueblo filed a new SLAPP motion, directed at the third cause of action of the first amended complaint. At a status conference ... Sylmar voluntarily withdrew the third cause of action in the amended complaint and the new SLAPP motion was *881 taken off calendar. Sylmar then filed a timely notice of appeal from the order granting the first SLAPP motion." (Id. at pp. 1053-1054.)
On appeal, "Sylmar contend[ed] that the trial court erred in hearing the SLAPP motion because it filed a first amended complaint pursuant to [Code of Civil Procedure] section 472 prior to the hearing on the motion." (Sylmar, supra, 122 Cal.App.4th at p. 1054.) The appellate court concluded that "Sylmar received the benefit of [Code of Civil Procedure] section 472 [that permitted amendments] when it was permitted to file the first amended complaint." (Sylmar, supra, at p. 1054.) The appellate court then cited a number of cases standing for the proposition that "a plaintiff may not avoid liability for attorney fees and costs by voluntarily dismissing a cause of action to which a SLAPP motion is directed. [Citations.]" (Id. at pp. 1054-1055, citing among others, Pfeiffer Venice Properties v. Bernard, supra, 101 Cal.App.4th at pp. 218, 219.) Finding that an amendment of the complaint was not qualitatively different than a dismissal, the appellate court rejected the argument that "the issue of attorney fees and costs rendered moot even by an involuntary dismissal after a demurrer is sustained without leave to amend. [Citation.]" (Sylmar, supra, at p. 1055.)
(7) Sylmar, then cited, quoted and discussed Simmons v. Allstate Ins. Co., supra, 92 Cal. App. 4th 1068. Although, Sylmar quoted directly from Simmons, it also overstated the rule derived therefrom. This language is critical. Simmons did not hold that parties lose their right to amend a pleading upon the filing of an anti-SLAPP motion by the opposition. Rather, Simmons stated that parties lose that right after a court has made an adverse ruling by finding the moving party met its burden of proof and finding a prima facie showing has been made.
(8) Here, when plaintiff filed the dismissal, the trial court had not issued a ruling on the merits, and the procedural posture was such that it was not inevitable that plaintiff's complaint would be stricken.
Therefore, trial had not "commenced," the dismissal filed by plaintiff was effective upon filing, and the trial court lacked the jurisdiction to rule on defendants' anti-SLAPP motion (Code Civ. Proc., § 425.16). The trial court only had jurisdiction to thereafter entertain a motion brought by defendants for attorney fees and costs.[3]
*882 V.
DISPOSITION
The order denying the anti-SLAPP motion is vacated. The matter is remanded to the trial court with directions that the case is to be dismissed without prejudice. Plaintiff is awarded costs on appeal.
Klein, P. J., and Croskey, J., concurred.
NOTES
[1] "SLAPP is an acronym for `strategic lawsuit against public participation.' [Citation.]" (Vargas v. City of Salinas (2009) 46 Cal. 4th 1, 8, fn. 1 [92 Cal. Rptr. 3d 286, 205 P.3d 207].) Code of Civil Procedure section 425.16 establishes a motion-to-strike procedure to provide a remedy against "`lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances' (Code Civ. Proc., § 425.16, subd. (a)) ..." (Vargas, supra, at p. 8, fn. 1.)
[2] As stated in Code of Civil Procedure section 581, a party's right to voluntary dismissal applies to the entire complaint or causes of action within the complaint. For simplicity, we refer only to the right to dismiss an entire complaint, as that is what is before us.
[3] We expect that upon remand defendants will make a motion for attorney fees and costs. On the surface, permitting such a motion seems futile in that the trial court ultimately denied defendants' anti-SLAPP motion, signaling that defendants would not be entitled to attorney fees and costs. However, in light of the procedural posture of this case, we believe it is more prudent to return the case to the trial court to rule on any issues the parties may raise.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2260199/
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178 Cal. App. 4th 536 (2009)
DANE W. ALVIS et al., Plaintiffs and Appellants,
v.
COUNTY OF VENTURA, Defendant and Respondent.
No. B212337.
Court of Appeals of California, Second District, Division Six.
October 20, 2009.
*538 Loeb & Loeb, Anthony Murray, Michael Thurman, Sharon S. Mequet and Daniel J. Friedman for Plaintiffs and Appellants.
Richards, Watson & Gershon, Robert C. Ceccon, Saskia T. Asamura, T. Peter Pierce and Michael F. Yoshiba for Defendant and Respondent.
OPINION
GILBERT, P. J.
This case arises from a massive landslide after heavy rains in La Conchita in January 2005. Plaintiffs suffered injuries or are relatives of persons who died as a result of the slide. Plaintiffs sued the County of Ventura (County) and others. Plaintiffs alleged against the County causes of action for a dangerous condition of public property, nuisance and inverse condemnation. The County moved for summary adjudication on all causes of action except inverse condemnation. The motion rested on the County's design immunity provided in Government Code section 830.6.[1] The trial court granted the County's motion. Plaintiffs dismissed their inverse condemnation cause of action and appealed the judgment arising from the summary adjudication.
*539 Among other things, this case illustrates two significant points:
In summary judgment or adjudication motions, conflicting declarations from experts on opposing sides usually establish a triable issue of fact. But here, an expert's declaration contains statements that conflict with statements he made in a previous report on a material issue. Because the conflict is unexplained, we conclude the declaration does not establish a triable issue of fact.
A change of physical conditions may cause a public entity to lose its design immunity. But here, the public entity approved a design that contemplated the possibility of a specific change of condition. We conclude that if such condition occurs, the public entity retains its immunity.
We affirm.
FACTS
La Conchita is an unincorporated area of Ventura County. It sits at the bottom of a steep cliff rising 600 feet above it. La Conchita Ranch owned the cliff. Vista Del Rincon, a County road, runs along the cliff's base. The cliff is prone to landslides.
In March 1995, a landslide of approximately 600,000 cubic yards of earth moved down the cliff. The slide buried several houses in La Conchita and 250 linear feet of Vista Del Rincon road. After the landslide, the County posted a warning on each house that La Conchita is a "Geologic Hazard Area" and to "Enter at Your Own Risk."
La Conchita residents, including some of the plaintiffs in this action, petitioned for a writ of mandate to compel the County to remove the debris from the road. Even though the County prevailed, it explored ways to remove the debris without adversely affecting the stability of the landslide.
The County appointed William Britt, a civil engineer in its employ, to oversee the project. The County applied to the Federal Emergency Management Agency (FEMA) for funds to study whether the debris could be safely removed. FEMA's landslide policy limits its participation in the removal of slides only to the minimum necessary to reopen a public facility. FEMA approved the funding but limited the study to debris removal from the road. Britt understood the County could not use the funds to determine whether the cliff, in general, could be stabilized.
In July 1998, the County retained Zeiser Kling Consultants, Inc. (Zeiser), to conduct the study. Zeiser provides consulting services for geology and *540 geotechnical engineering. Zeiser was "to evaluate the geotechnical constraints associated with removing the landslide debris from Vista Del Rincon Avenue in order to re-open the roadway."
In October 1998, Zeiser issued its 76-page report and concluded that the debris could be safely removed. It provided three alternatives, including a "pile lagging wall." A pile lagging wall consists of a series of steel beams set vertically in the ground with wooden boards (lagging) set horizontally between the steel beams. The wall is designed to drain water from the spaces between the laggings. The report stated: "[I]t should be understood that none of these alternatives are designed to increase the overall stability of the La Conchita landslide mass." The report's appendices contain boring logs, laboratory test results, stability analysis, structural engineering calculations, and cost estimates. In April 1999, FEMA approved funding for the pile lagging wall alternative.
The FEMA category under which funding for the wall was approved is for emergency measures. FEMA intends such emergency measures to be temporary. Plans for the wall, however, do not state that the wall is temporary. One letter from Zeiser to the County refers to the wall as temporary. But there is no evidence the County intended that the wall would be removed.
Before the County issued notices inviting bids, Britt reviewed the plans and specifications prepared by Zeiser. Based on his professional training and experience, Britt concluded that the plans satisfied reasonable designs and engineering practices. The plans bear the professional registration stamps of a geotechnical engineer and a civil engineer from Zeiser.
By October 1999, the County had received bids and was prepared to submit them for approval by the board of supervisors (board). Prior to the public hearing on the approval, a supervisor asked James O'Tousa, a geologist and consultant to the County, to review the matter and report the results directly to Britt.
On October 12, 1999, Britt received a four-page memorandum from O'Tousa. The memorandum identified 14 areas of concern. Chief among the concerns was whether the project would increase the level of hazard for any of the properties at La Conchita.
Britt declared the memorandum raised many questions that had been considered previously, including the question of an increased hazard over the course of several years. Zeiser had spent hundreds of hours investigating the cliff. Britt and Zeiser concluded the debris could be safely removed from the road without affecting the stability of the cliff or increasing the hazard to *541 neighboring properties. Nevertheless, Britt sent a copy of O'Tousa's memorandum to Zeiser for response.
On October 19, 1999, the project came before the board. Britt submitted a report recommending approval, and the board approved the project.
On October 29, 1999, Zeiser responded to O'Tousa's comments. But O'Tousa and another member of his firm remained unconvinced that their concerns had been considered. They recommended that construction not proceed until their concerns were resolved.
On November 3, 1999, the County distributed a notice to La Conchita residents. The notice stated "[t]he retaining wall will allow the debris removal to occur without adversely affecting the stability of the overall landslide as it currently exists. It is NOT intended to increase the overall stability of the La Conchita landslide mass."
In November 1999, the County retained consultant Fugro West, Inc. (Fugro), to review the documents for the project, including letters exchanged between Zeiser and O'Tousa's firm. In April 2000, Fugro reported to the County. Under the heading, "Effect Of Construction On Landslide Stability," the report stated: "[Zeiser] has provided reduced-scale copies of geologic cross-sections, prepared by others. [Zeiser] uses the slope geometry that is depicted on those cross-sections to conclude that the volume of debris that will be removed to construct the wall is too small to have a material impact on the overall landslide stability. However, an argument could also be made that any removal of slide debris could have a negative impact on the safety factor of the slope. If a more thorough assessment of whether construction of the wall will have a net negative or positive impact on landslide stability is desired, then a quantitative evaluation should be performed."
The quantitative evaluation was not performed. But Samuel Bryant, the engineer who prepared the Fugro report testified: "We took no exceptions to [the County's] input parameters or we couldn't find any issue with their design."
In a memorandum from Britt to the County's interim director of public works dated April 17, 2000, Britt reiterated that the wall was not designed to prevent future landslides or mud flows. Britt added: "We did consult with Zeiser-Kling during design review, and concur that the timber lagging wall will be self-draining because of the open spaces between the timber lagging. Accordingly, we did not require weep holes or internal drainage systems."
Construction on the wall began in May 2000, and was completed in January 2001. The wall was constructed as designed. The wall was between three feet and 18 feet high.
*542 On January 10, 2005, a large landslide occurred at La Conchita. The slide overwhelmed the wall. The slide killed 10 people and destroyed 16 homes. Britt declared that the debris flow was diverted toward La Conchita by a channel created by the 1995 landslide and by topographical features, not the wall.
Michael Alvis was killed in the landslide. On January 26, 2006, his parents and brother filed the instant action against the County and others. The Alvises' complaint alleges causes of action against the County for wrongful death, dangerous condition of public property, nuisance, property damage and inverse condemnation. The Alvises' complaint was consolidated with 22 other complaints (appellants are collectively referred to as "Alvis" herein).
The complaint alleges against the County: "From in or around the year 2000, and continuing to the time of the January 10, 2005 landslide, the County and Does 51-100 negligently planned, placed, constructed and maintained a wall along a portion of Vista del Rincon Drive. The wall constituted a dangerous condition of public property as defined in . . . sections 830 and 835, which created and increased the risk of death and serious injury to occupants of La Conchita, and damage to property in La Conchita, in the event of a landslide or mudslide. Among other things, the wall altered and diverted the course of the mud, soil, rocks and other debris resulting from the 2005 landslide, causing the landslide to strike and kill the persons named in paragraph 41. [¶] Before the wall was constructed, the County and Does 51-100 had actual and/or constructive knowledge that the wall would constitute a dangerous condition of public property for reasons which include, without limitation, the fact that these defendants were advised by at least one of their consultants that the design of the wall failed to take into account its effect in the event of a landslide or mudslide. The County and Does 51-100 had actual and constructive notice of the dangerous condition of the wall a sufficient time before the 2005 landslide to take measures to protect against or warn of the dangerous condition, but they negligently failed to do so."
The County moved for summary adjudication on all causes of action, except inverse condemnation, on the ground of design immunity.
In support of the County's motion, Britt declared in part: "On October 12, 1999, I received a memorandum from Jim O'Tousa, a geologist who was a consultant for the County. . . . Mr. O'Tousa asked a number of questions relating to the Vista Del Rincon Debris Removal Project. I reviewed Mr. O'Tousa's letter in its entirety [sic] or about the date of the letter. [¶] When I received the memorandum from Mr. O'Tousa, I had been involved in investigating methods to remove debris from Vista Del Rincon for several years. Mr. O'Tousa asked a number of questions which were relevant to the *543 Project. However, we had considered most of these questions long before we received the memorandum. For example, Mr. O'Tousa asked whether the Vista Del Rincon Debris Removal Project would `place any properties in La Conchita at a higher level of hazard than is existing now?' Plainly, that was a very important issue to me from the outset. . . . I refused to proceed with the Project until we received the opinion from an engineer that the debris could safely be removed from Vista Del Rincon without threatening adjacent properties. Thus, I had considered the very question raised by Mr. O'Tousa over the course of several years. Zeiser Kling had also spent hundreds of hours investigating the hillside, and it also concluded that the debris could be removed without affecting the stability of the landslide. [¶] Despite the fact that Mr. O'Tousa's memorandum raised many questions which had previously been addressed, I forwarded a copy to Zeiser Kling on October 13, 1999 for its professional review and response as the Project designer. . . . [¶] On October 19, 1999, I appeared before the County Board of Supervisors. . . . As of that date, it was my professional opinion that the Project satisfied reasonable design criteria and reasonable engineering practices, and that the Project, including the plans and specifications for the retaining wall, was properly and reasonably designed in accordance with good engineering practice. That remains my opinion today. [¶] . . . [¶] Despite my belief that the wall was reasonably designed, I continued to investigate the issues raised in Mr. O'Tousa's October 12, 1999 memorandum. On or about October 29, 1999, I received a letter from Zeiser Kling responding to Mr. O'Tousa's comments. . . . I reviewed that letter in its entirety. Zeiser Kling started its letter by stating the assumptions on which the Project was based: (1) The purpose of the pile lagging wall was to allow for the removal of landslide debris from Vista Del Rincon to allow access to the roadway; (2) The pile lagging wall was not intended to affect (either increasing or decreasing) the stability of the active La Conchita landslide, to contain/control surface drainage or to contain/control mud and debris flows; and (3) occurrences such as earthquakes, flooding, mud and/or debris flow events, or reactivation of the La Conchita landslide were not considered in the design of the pile lagging wall alternative. [¶] . . . [¶] In the letter of October 29, 1998, . . . Mr. Kling and Mr. Raymer responded to each of Mr. O'Tousa's questions. They placed their professional registration stamps on the letter. I reviewed that letter in its entirety. Throughout the letter, Mr. Kling and Mr. Raymer repeatedly acknowledge that the wall would not withstand a debris flow. They also stated that if a debris flow occurred, it would be `channelized in the drainage along the northern boundary of the La Conchita landslide.' [¶] I understand that plaintiffs in this lawsuit have alleged that the Vista Del Rincon wall diverted the January 10, 2005 debris flow. I did not believe the wall would have any significant impact upon a large scale debris flow when I recommended that the Board approve the Project. It is my opinion today that the wall did not have any significant *544 impact upon a debris flow. [¶] First, there were existing channels. These channels would collect and direct a debris flow. . . . [¶] Second, when I examined the slide area before the wall was constructed, it was my professional opinion that if a debris flow occurred, it would follow the course of the channels created by the 1995 slide. . . . If a debris flow reached the wall, it would have to be an extremely large debris flow which would engulf everything in its path, including the wall. It is my professional opinion, and was my professional opinion at the time the wall was being designed, based on my training and experience, that the wall would have no more than a trivial impact on such a large debris flow. [¶] Third, an examination of photographs of the La Conchita area shows how the debris flow of January 10, 2005 generally followed the channel depicted in Exhibit 9. . . . [¶] . . . [¶] Fourth, the wall was built to follow the contours of the earth in back of it, so the wall would have minimal impact upon any debris flow. . . . [¶] . . . [¶] On or about December 9, 1999, the County received a letter from Fugro which set forth its opinions. . . . [¶] After I read Fugro's letter, my opinion was that the Project satisfied reasonable design criteria and reasonable engineering practices, and that the Project, including the plans and specifications for the retaining wall, was properly and reasonably designed in accordance with good engineering practice. However, out of an abundance of caution, the County continued to investigate the matter. [¶] On December 9, 1999, Chris A. Hooke of my department forwarded Fugro's letter to Mr. Raymer at Zeiser Kling. . . . Mr. Hooke is a registered civil engineer. In his letter, Mr. Hooke acknowledges that `Mr. Bryant (of Fugro, Inc.) indicates that [Zeiser Kling's] design is based upon the assumption that the wall is to simply hold the static embankment not a sliding hill. If that is the case, the lateral forces used in design appear adequate.' [¶] . . . [¶] I visited Vista Del Rincon on several occasions after the wall was built, and before the debris flow of January 10, 2005. I also spoke with employees who visited the area. To the best of my knowledge, there were no changed physical conditions which caused me to change my opinion that the wall satisfied reasonable design criteria and reasonable engineering practices. At all times, up to and including January 10, 2005, the wall functioned as intended. I also observed the wall, the slide area and reviewed several aerial photographs showing area after January 10, 2005 slide. Based on my observations, professional training, and experience the wall performed as designed and might have reasonably been expected to perform under the circumstances. [¶] It is my opinion today that the Project satisfied reasonable design criteria and reasonable engineering practices, and that the Project, including the plans and specifications for the retaining wall, was properly and reasonably designed in accordance with good engineering practice."
The County also submitted Hooke's declaration in his capacity as a registered civil engineer and deputy director of the County's transportation *545 department. Hooke declared that he reviewed the plans and specifications for the wall prior to signing the notice for bids. He also reviewed the correspondence by and between Zeiser, O'Tousa and Fugro. It was and still is his opinion that the wall was properly and reasonably designed in accordance with good engineering practices.
In opposition to the motion, Alvis submitted the declaration of Awtar Singh, Ph.D., a registered geotechnical and civil engineer. Singh declared, in part: "The real problem was that there was no adequate subsurface drainage provided behind the wall. The clayey soil behind the wall became saturated, exerted tremendous forces against the wall and ultimately contributed to the wall's collapse."
Singh declared that the saturated soil behind the wall both created the slide and diverted the debris flow. Singh said he saw water staining on the lagging from the base of the wall up to 16 feet high. He said: "[The wall] had a `dam effect.' It caused a rise in the groundwater table in the slide mass behind the wall and created a failure zone with a large volume of debris flow. This failure zone was a mass of soil behind the wall containing additional water that the wall did not permit to drain freely, and that was more likely to slide and create a debris flow. The debris flow that did occur as a result, was diverted at a very fast pace further to the east because of the presence of the wall."
Singh opined that reasonable inspections by County engineers would have alerted them that the wall was not draining properly. He said the engineers should have taken remedial measures including drilling weep holes in the wall and installing hydraugers (horizontal drain pipes) for subsurface drainage.
Alvis submitted photographs of the wall taken hours prior to the landslide by La Conchita resident Matthew Gregorchuck. Alvis claims the photographs show the wall was not draining properly. The photographs show water draining through the spaces between the wooden laggings. The wall is standing straight without bulges or other signs of stress.
Alvis also submitted affidavits by two La Conchita residents stating that had they known of O'Tousa's concerns, they would not have been near the wall at the time of the landslide.
The County objected to Singh's declaration on the grounds that its conclusions were without foundation and were contradicted by an earlier report he made. To support its objections, the County submitted an affidavit by David Sykora, Ph.D., a registered civil and geotechnical engineer.
*546 Sykora pointed out Singh's conclusion that the failure zone behind the wall created the debris flow is directly contradicted by Singh's statement in an earlier report. In that report to State Farm Insurance, Singh stated "[f]ailure started as a landslide in the upper reaches and then flowed at a rapid rate down to the developed area below." Sykora also pointed out Singh's conclusion that the wall was both a cause of the landslide and deflected the debris is internally inconsistent. Sykora stated that if "the failure initiated at the wall, the wall would not be standing to deflect the debris."
Sykora declared that Singh failed to address other issues that bring his theories into question. Some of these are: "a. Photographs taken of the wall since construction show sections of wood lagging between piles with staining and some sections without staining, including sections of the wall still standing. . . . If water was indeed dammed up behind the full height of the wall, 100 percent of the lagging below the elevation of retained soil would be stained. Dr. Singh does not explain how several panels of the wall could have barely any staining if water was dammed up behind the entire wall. [¶] b. There is no evidence that excessive water was flowing from the ends of the walls beyond surface water collected and conveyed in the concrete v-ditch behind the wall. I would expect that if the wall was acting as a dam, seepage and springs would form from the ground near the ends of the wall. Dr. Singh has not reported observations of springs or seeps near the ends of the wall. [¶] c. Dr. Singh has not explained how water would perch behind the wall, not seep into the underlying alluvium, and only affect the wall. If 16 feet of water was backed up behind the wall, a substantial amount of that water would seep into the alluvium below the lagging and there would be visible evidence of water seeping beneath the wall and daylighting between the wall and the road. [¶] . . . [¶] h. Dr. Singh's assumed 16 feet of water, combined with the design soil forces, would exert a substantial force on the wall. We estimate that at the tallest section of the wall, the total force acting on the bottom legging assuming that 16 feet of water was dammed up would be nearly 20,000 pounds. I would expect to see some bowing or signs of distress under that loading. Dr. Singh does not appear to consider the implication of having that much force acting on the lagging. [¶] . . . [¶] j. . . . Although Dr. Singh made observations and took numerous samples during his destructive testing program, he did not describe his observations or present any results of laboratory testing of those samples except for one set of strength tests from an unspecified location on an unspecified material."
Finally, Sykora declared there were no accounts of anything that might indicate a worsening condition including bowing of the wood lagging, tilting of the steel soldier piles, loss of wood lagging, water flowing from the ends of and beneath the wall, ground bulging at the toe of the wall, and distortions or misalignment of the concrete v-ditch at the back of the wall.
*547 The trial court granted the County's motion for summary adjudication. Although the order states that the court overruled both parties' evidentiary objections, the order also states: "As for plaintiffs' claims that changed conditions eliminated design immunity and that negligent maintenance occurred, the Court disagrees because the matters asserted by plaintiffs, including drainage and related issues as well as the `temporary' nature of the wall, were all considered in the design phase of the project. Thus, they were not truly changed conditions or maintenance issues in the sense contemplated by case law. [Citation.] Further for the reasons argued by the County in its reply brief, the Court finds the declaration of Dr. Singh on those issues unconvincing because it consists largely of conclusions without a substantial foundation, is vague and is contradicted in some respects by his prior report written in February of 2005."
The matter proceeded to trial against the County on the remaining cause of action for inverse condemnation. During trial, Alvis dismissed the inverse condemnation action.
DISCUSSION
I
Summary Judgment and Adjudication
Summary judgment is granted properly only if all papers submitted show there is no triable issue as to any material fact and the moving party is entitled to a judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) The court must draw all reasonable inferences from the evidence set forth in the papers except where such inferences are contradicted by other inferences or evidence that raise a triable issue of fact. (Ibid.) In examining the supporting and opposing papers, the moving party's affidavits or declarations are strictly construed and those of his opponent liberally construed, and doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion. (Szadolci v. Hollywood Park Operating Co. (1993) 14 Cal. App. 4th 16, 19 [17 Cal. Rptr. 2d 356].)
The moving party has the initial burden of showing that one or more elements of a cause of action cannot be established. (Saelzler v. Advanced Group 400 (2001) 25 Cal. 4th 763, 768 [107 Cal. Rptr. 2d 617, 23 P.3d 1143].) Where the moving party has carried that burden, the burden shifts to the opposing party to show a triable issue of material fact. (Ibid.) Our review of the trial court's grant of the motion is de novo. (Id. at p. 767.)
*548 A party may move for summary adjudication as to one or more causes of action if the party contends the cause of action has no merit. (Code Civ. Proc., § 437c, subd. (f)(2).) The procedure is the same as that for a motion for summary judgment. (Ibid.)
Here Alvis's complaint alleges only that the wall altered the course of the landslide. It does not allege the wall was a substantial factor in causing the landslide. Nevertheless, Alvis argues we must not only consider the allegations of the complaint, we must also consider his discovery responses. Alvis claims his discovery responses allege that water, dirt and debris accumulation created pressure on the wall causing or contributing to the cause of the slide.
But the complaint limits the issues to be addressed in defendant's motion for summary judgment. (Laabs v. City of Victorville (2008) 163 Cal. App. 4th 1242, 1258 [78 Cal. Rptr. 3d 372].) If a plaintiff wishes to expand the issues to be considered, he must seek leave to amend the complaint. (Ibid.) Alvis did not seek leave to amend his second amended complaint. In any event, even if we treat the complaint as alleging the wall was a substantial factor in causing the slide, as the following discussion will show, Alvis cannot prevail.
II
Singh's Declaration
In attempting to raise a triable issue of fact, Alvis relies largely on Singh's declaration. He claims that the trial court overruled the County's objections that Singh's opinions expressed in his declaration are without foundation and that some of them contradict his prior statements. It is true the trial court makes the general statement at the beginning of its order granting the motion that "the court denies all evidentiary objections of both parties." But Alvis omits to mention that the court later stated in its order: "[F]or the reasons argued by the County in its reply brief, the Court finds the declaration of Dr. Singh on [negligent maintenance and change of circumstances] unconvincing because it consists largely of conclusions without substantial foundation, is vague and is contradicted in some respects by his prior report written in February of 2005." Although the court may have admitted Singh's declaration into evidence over the County's objection, it found the declaration did not constitute substantial evidence so as to raise a triable issue of fact. Alvis does not argue that the trial court's assessment of Singh's declaration is wrong; he simply ignores the assessment.
We review the motion for summary adjudication de novo, and reach the same conclusion as the trial court. Most significantly, Singh's declaration asserts that the slide started at the bottom of the cliff when the wall failed. *549 This directly contradicts his prior statement in a report to an insurance company that the "[f]ailure started as a landslide in the upper reaches and then flowed at a rapid rate down to the developed area below." This is not a minor point. Singh's statement that the slide started in the upper reaches of the cliff directly undercuts the premise on which his entire declaration is based. Yet, Singh offers no explanation.
In reviewing motions for summary judgment or adjudication, courts have long tended to treat affidavits repudiating previous testimony as not constituting substantial evidence of the existence of a triable issue of fact. (Advanced Micro Devices, Inc. v. Great American Surplus Lines Ins. Co. (1988) 199 Cal. App. 3d 791, 800 [245 Cal. Rptr. 44]; Jacobs v. Fire Ins. Exchange (1995) 36 Cal. App. 4th 1258, 1270 [42 Cal. Rptr. 2d 906] [rejecting expert's declaration contradicting deposition testimony].)
Singh's prior statement was not in the form of testimony under oath. But the same reasoning applies. We cannot accept as substantial evidence of a triable issue of fact a declaration that directly contradicts the declarant's prior statement, where the contradiction is unexplained. We may not ignore this significant contradiction.
III
Design Immunity
(1) Section 830.6 provides design immunity to a public entity. The statute states in part: "Neither a public entity nor a public employee is liable under this chapter for an injury caused by the plan or design of a construction of, or an improvement to, public property where such plan or design has been approved in advance of the construction or improvement by the legislative body of the public entity or by some other body or employee exercising discretionary authority to give such approval or where such plan or design is prepared in conformity with standards previously so approved, if the trial or appellate court determines that there is any substantial evidence upon the basis of which (a) a reasonable public employee could have adopted the plan or design or the standards therefor or (b) a reasonable legislative body or other body or employee could have approved the plan or design or the standards therefor." (Ibid.)
"The rationale for design immunity is to prevent a jury from second-guessing the decision of a public entity by reviewing the identical questions of risk that had previously been considered by the government officers who adopted or approved the plan or design. [Citation.]" (Cornette v. Department of Transportation (2001) 26 Cal. 4th 63, 69 [109 Cal. Rptr. 2d 1, 26 P.3d 332] (Cornette).)
*550 (2) A public entity claiming design immunity must show three elements: (1) a causal relationship between the plan and the accident; (2) discretionary approval of the plan prior to construction; and (3) substantial evidence supporting the reasonableness of the plan or design. (See Grenier v. City of Irwindale (1997) 57 Cal. App. 4th 931, 939 [67 Cal. Rptr. 2d 454] (Grenier).) The first two elements, causation and discretionary approval, may only be resolved as issues of law if the facts are undisputed. (Id. at p. 940.) The third element, substantial evidence of reasonableness, requires only evidence of solid value that reasonably inspires confidence. (Ibid.) We are not concerned with whether the evidence of reasonableness is undisputed; the statute provides immunity even if the evidence is contradicted. (Ibid.)
(a) Causal Relationship
The first question is whether there is undisputed evidence that the accident was caused by a design defect, and not some other cause. (Grenier, supra, 57 Cal.App.4th at p. 940.) The County may rely on the allegations of the complaint to establish causation. (See Fuller v. Department of Transportation (2001) 89 Cal. App. 4th 1109, 1114 [107 Cal. Rptr. 2d 823].)
Here the complaint alleges the County negligently "planned, placed, constructed and maintained" a wall and that the wall created an increased risk of injury or death in that it "altered and diverted the course of the mud, soil, rocks and other debris resulting from the 2005 landslide. . . ." The complaint also alleges that the County knew the wall constituted a dangerous condition because it was "advised by at least one of [its] consultants that the design . . . failed to take into account its effect in the event of a landslide or mudslide," and that the County failed to take measures to protect against or warn of the dangerous condition.
Alvis argues that the complaint alleges failure to maintain and failure to warn as grounds for liability independent of the design of the wall. He cites Cameron v. State of California (1972) 7 Cal. 3d 318, 328-329 [102 Cal. Rptr. 305, 497 P.2d 777], for the proposition that section 830.6 does not immunize for liability caused independent of design, even if the independent negligence is only a concurring proximate cause of the accident.
In an effort to show that lack of maintenance was an independent cause, Alvis relies on Singh's declaration. But Singh's declaration is insufficient to raise a triable issue of fact.
In any event, even if we were to consider Singh's declaration, it would not help Alvis. Singh's suggested "maintenance" of the wall is to drill weep holes in the wall and install hydraugers (horizontal drain pipes). But such changes *551 and additions to the wall are not maintenance; they are design factors. It is uncontested that Britt considered adding such features when designing the wall, but rejected the idea as unnecessary. In Mozzetti v. City of Brisbane (1977) 67 Cal. App. 3d 565, 575 [136 Cal. Rptr. 751], the case on which Alvis relies, the maintenance involved was simply unclogging a drainage system. Nothing in Mozzetti indicates that "maintenance" includes a change in the design of the structure or the addition of physical features to the structure, such as Singh suggests here.
The photographs taken by Gregorchuck are also insufficient to raise a triable issue of fact. If anything, the photographs appear to support the County. They show water draining through the wall as it was designed to do. The wall is not leaning. There are no bulges or cracks. There is nothing to indicate the wall is under any extraordinary stress. To the contrary, the wall appears solid.
Alvis also claims that the County's failure to warn of a known danger was an independent contributing cause.
The second amended complaint alleges that the County was warned by at least one of its experts that the design failed to take into account the wall's effect in the event of a landslide. The expert alluded to is obviously O'Tousa. But O'Tousa's memorandum did not warn of specific defects, it raised questions for Britt to consider. Alvis points out one of the issues that O'Tousa's memorandum states should be clarified is whether "the wall [would] change existing patterns and stability, i.e., could landslides be diverted away from the project site that would otherwise [have] taken a different path?" But it is uncontested that Britt considered that issue. He determined the landslide would occur in an existing channel, and that the wall would have no substantial effect on its path. It would be difficult for the County to devise a meaningful warning from O'Tousa's suggestions that Britt consider issues which Britt has in fact considered.
In his brief, Alvis suggests the County should have warned that "no one had determined whether the wall would adversely affect the stability of the slope, and that the County's premiere expert on the geology of the slide (O'Tousa) questioned the source of the [County's statement that stability would not be adversely affected] and objected to the project."
But it is undisputed that Zeiser and Britt determined the wall would not adversely affect the stability of the slope. They had no duty to convince O'Tousa. The County is correct that a truthful warning would state: the County's geologic consultant suggested the County consider whether the wall *552 would adversely affect the stability of the slope, and the County's engineers and its consultant determined it would not. Such a warning would be worthless.
In any event, the County gave warnings. Following the 1995 landslide, the County warned residents and the public that La Conchita is a geologic hazard area; that a landslide could impact the entire community of La Conchita; that a lack of information precludes estimating risk; and that persons enter at their own risk.
Alvis's reliance on a sentence from a notice of public meeting is misdirected. The sentence states that "[t]he retaining wall will allow the debris removal to occur without adversely affecting the stability of the overall landslide as it currently exists." Alvis ignores the second sentence of the notice: "It is NOT intended to increase the overall stability of the La Conchita landslide mass." The notice plainly informs that the slope will not be more stable after the wall is built. Thus the prior notice of geologic hazard remains in effect unabated.
Alvis relies on declarations from two plaintiffs that had they been aware of the concerns of the County's consultants, they would not have been near the wall at the time of the slide. But the warnings the County gave are sufficient to advise any reasonable person to stay away from the area, particularly after days of heavy rains. Alvis cites no authority that requires the County to show that individual plaintiffs received actual notice.
Here the complaint alleges that the design of the wall caused plaintiffs' injuries. There is no substantial evidence of any independent cause. The County has prevailed on the first element of design immunity.
(b) Discretionary Approval
It is undisputed that the County's board of supervisors exercised their discretion to approve the plans for the project. Alvis argues that the County's exercise of discretion must be knowing or informed. Alvis claims the board could not have made an informed decision because it was unaware of O'Tousa's concerns.
(3) But section 830.6 does not state the approval must be knowing or informed. A court may not rewrite a statute to make it conform to a presumed intent that is not expressed. (Cornette, supra, 26 Cal.4th at pp. 73-74.)
Moreover, even if the statute requires a knowing or informed approval, the requirement is met here. The board did not arbitrarily approve the plans for *553 the wall. The board approved the plans upon recommendation of a registered professional civil engineer backed by other professional consultants. The board is entitled to rely on the recommendations of its staff professionals in making decisions on such technical matters. (See Grenier, supra, 57 Cal.App.4th at p. 940 [a detailed plan, drawn by a competent engineering firm, and approved by a city engineer in the exercise of his or her authority, is persuasive evidence of the element of prior discretionary approval].) Alvis points to nothing in section 830.6 that requires the board be informed of every concern raised by a consultant.
Alvis's reliance on Levin v. State of California (1983) 146 Cal. App. 3d 410 [194 Cal. Rptr. 223], is misplaced. There, the plaintiff veered off a state highway, down a steep embankment and drowned. The design of the road disregarded Caltrans's (California's Department of Transportation) guardrail standards. The trial court granted summary judgment in favor of the state on the ground of design immunity. The Court of Appeal reversed, concluding the state had not satisfied the discretionary approval element. The court stated there was no evidence the official who had the authority to approve the design had the authority to disregard the guardrail standards. (Id. at p. 418.) Nor was there evidence the official decided to ignore the standards or considered the consequences of the elimination of an eight-foot shoulder. (Ibid.) The Court said that "[a]n actual informed exercise of discretion is required," and "[t]he defense does not exist to immunize decisions that have not been made." (Ibid.)
Here it is undisputed that Britt considered the effect of the wall on debris diversion and the slope's stability. He concluded there would be no substantial effect. The board approved the wall plans pursuant to Britt's recommendation. Nothing in Levin suggests the party making the decision must be informed of negative comments by other consultants or experts. It was simply not an issue in the case.
Nor is Hernandez v. Department of Transportation (2003) 114 Cal. App. 4th 376 [7 Cal. Rptr. 3d 536], of help to Alvis. There, the question was whether the design of an off-ramp was ever approved. Caltrans did not dispute that no "`project approval document'" for the off-ramp could be located. (Id. at p. 381.) Hernandez does not concern whether the authority approving the project must be informed of the concerns of other experts.
(c) Substantial Evidence of Reasonableness
(4) The final element of design immunity is that there must be substantial evidence supporting the reasonableness of the plan or design. Section 830.6 makes the resolution of this issue a matter of law for the trial or appellate court. (Cornette, supra, 26 Cal.4th at p. 72.)
*554 (5) Here there is ample evidence to support the reasonableness of the design. The plans bear the professional stamps of a geotechnical engineer and a civil engineer from Zeiser. The plans were approved by Britt, a registered civil engineer. Britt declared that the project had been designed with reasonable professional engineering judgment. Even geotechnical engineer, Samuel Bryant of Fugro, whom Alvis seeks to characterize as a dissenting voice, testified in his deposition: "We took no exceptions to their input parameters or we couldn't find any issue with their design." O'Tousa might be considered a dissenter, but he testified in his deposition that he did not review the plans. In any event, section 830.6 provides immunity even if the evidence of reasonableness is contradicted. (Grenier, supra, 57 Cal.App.4th at p. 940.)
IV
Changed Physical Conditions
Alvis contends there is a triable issue of fact as to whether the County lost its design immunity due to changed physical conditions.
(6) A public entity can lose its design immunity where the plan or design in its actual operation becomes dangerous under changed physical conditions. (Cornette, supra, 26 Cal.4th at p. 70.) To demonstrate loss of design immunity, a plaintiff must establish three elements: "(1) the plan or design has become dangerous because of a change in physical conditions; (2) the public entity had actual or constructive notice of the dangerous condition thus created; and (3) the public entity had a reasonable time to obtain the funds and carry out the necessary remedial work to bring the property back into conformity with a reasonable design or plan, or the public entity, unable to remedy the condition due to practical impossibility or lack of funds, had not reasonably attempted to provide adequate warnings." (Id. at p. 72.)
Here Alvis claims the changed physical condition is that over time soil clogged the wall causing water to accumulate behind it. He claims the accumulation of water increased the hydrostatic pressure on the back of the wall. As evidence, Alvis points to Singh's declaration. But Singh's declaration is insufficient to raise a triable issue of fact.
In any event, Singh did not purport to have personally observed the wall over a period of time prior to the slide. At best, Singh draws conclusions from observations made after the slide. Persons who actually observed the wall over a period of time prior to the slide tell a different story. Plaintiff Sheila Fry testified she lived across the street from the wall and looked at it constantly. She said at most times there was at least seepage through the wall; there was more when it rained. She said from 2000 to 2005 she did not notice *555 "any big difference" in the way it was draining. Another plaintiff, Thomas Ray, testified "water was always coming out of the wall." County engineer Hooke declared he visited the wall several times between 2000 and January 2005 and observed "weeping was occurring between the loose wooden lagging of the wall face as it was supposed to. . . ." Alvis fails to point to the testimony of anyone who actually observed the wall over a period of time that would support his claim of a change of conditions. To the contrary, even plaintiffs testified there was no change of condition and that water was always coming out of the wall.
Nor are Gregorchuck's photographs of help to Alvis. They show water draining through the wall and no bulging, leaning or other signs of stress. Moreover, they certainly do not depict a change of conditions.
(7) Finally, the claimed change of physical conditions cannot be based on the same technical data or policy decisions that went into the original plan or design. As our Supreme Court stated in Cornette: "`[W]here experience has revealed the dangerous nature of the public improvement under changed physical conditions, the trier of fact will not simply be reweighing the same technical data and policy criteria which went into the original plan or design. Rather, there will then be objective evidence arising out of the actual operation of the planmatters which, of necessity, could not have been contemplated by the government agency or employee who approved the design. No threat of undue interference with discretionary decision-making exists in this situation.' [Citation.]" (Cornette, supra, 26 Cal.4th at p. 73, italics added, quoting Baldwin v. State of California (1972) 6 Cal. 3d 424, 435 [99 Cal. Rptr. 145, 491 P.2d 1121].)
Here Singh's declaration makes it clear that what he claims is a change of conditions are the same conditions contemplated by the County's consultants at the time the wall was designed. Singh declares: "As the consultants feared, the soil types made it extremely likely that the clayey soils would clog the cracks between the timbers, prevent drainage, and cause a build-up behind the wall of saturated earth and debris. This build-up creates the very `hydrostatic pressures or seepage forces' against the wall that concerned Fugro. . . . This is the dam effect that concerned Mr. O'Tousa."
It is undisputed that Zeiser and Britt considered the concerns of the County's consultants and rejected the need for any design changes to improve drainage. In particular, Britt's memorandum of April 17, 2000, states he consulted with Zeiser during design review and concurred that the wall would be self-draining. "Accordingly, we did not require weep holes or internal drainage systems." Weep holes and internal drainage systems are precisely the features Singh declared should have been added to the wall.
*556 Even if we were to consider Singh's declaration as substantial evidence, Alvis would not be helped. Singh's declaration shows the alleged change of conditions relates directly to the factors the County considered in making its design choices. It is that sort of second-guessing of the County's design choices that section 830.6 was enacted to prevent. (Cornette, supra, 26 Cal.4th at pp. 69, 73.)
The judgment is affirmed. Costs are awarded to respondent.
Yegan, J., and Coffee, J., concurred.
NOTES
[1] All statutory references are to the Government Code unless stated otherwise.
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178 Cal. App. 4th 1442 (2009)
THE PEOPLE, Plaintiff and Respondent,
v.
SHAWN MAURICE COHENS, Defendant and Appellant.
No. E045468.
Court of Appeals of California, Fourth District, Division Two.
November 9, 2009.
As modified December 1, 2009.
*1444 Jean Ballantine, under appointment by the Court of Appeal, for Defendant and Appellant.
Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Gary W. Schons, Assistant Attorney General, James D. Dutton, Alana Cohen Butler and Scott C. Taylor, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
RAMIREZ, P. J.
The jury convicted defendant and appellant Shawn Maurice Cohens of willful infliction of corporal injury on a cohabitant (Pen. Code, § 273.5, subd. (a))[1] and failure to register as a sex offender (§ 290, former subd. (a)(1)(B)).[2] Defendant was sentenced to a total term of five years.
With respect to the failure to register charge, defendant contends that the trial court erred by failing to instruct the jury that the People were required to prove he actually knew he was required to register the particular address involved. Defendant does not contest on appeal his conviction for inflicting corporal injury. We agree with defendant, but the error is harmless, so we affirm.
I. BACKGROUND
Defendant is a person required to register as a sex offender. Defendant's most recent registration form indicated only a residence located on Alessandro Boulevard in Moreno Valley (Alessandro address).
Defendant's former girlfriend (the victim) lived at her apartment located on Frederick Street in Moreno Valley (Frederick address). She testified that at the Frederick address, from December 2006 through the time of defendant's arrest in March 2007, defendant slept every night, kept his clothes, kept toiletries, received mail, helped pay rent on two occasions, and watched her children while she was at work. The victim further testified that defendant was not on the lease at the Frederick address and also kept clothing and *1445 received mail at the Alessandro address. The victim's daughter testified that defendant lived at the Frederick address, spent every night there, slept in the bedroom he shared with her mother, and kept his clothes in the closet in the bedroom he shared with her mother. A sheriff's deputy testified that he found adult male clothing in the victim's closet and letters and bills addressed to defendant at the Frederick address. A clerk from the Moreno Valley Animal Shelter testified that its records indicated defendant had adopted one dog and licensed another dog using the Frederick address.
Defendant's mother testified that after defendant's arrest the victim delivered defendant's belongings to his mother, which consisted of some papers, including resumes, two cell phones, two books, a hat, an apron, and tools, but no clothing. Defendant's mother also testified that defendant asked her to retrieve his union card and watch from the victim. The victim also returned items she had that belonged to defendant's mother. Defendant's mother further testified that she gave the victim and her children a dog on the condition that it be licensed to defendant and returned to his mother if the relationship between defendant and the victim ended. The mother testified that defendant was living at the Alessandro address, where he rented a room, had a dresser, had a half-bed, kept a closet full of clothes, received mail, and met his parents two or three times in a four-month period. Defendant's mother admitted it was "safe to assume [defendant] was spending the night at [the victim's] house" and that she did not know where defendant was spending most of his time, or whether he was spending every night at the Frederick address. Defendant did not testify.[3]
Defendant stipulated that he had been convicted of an offense that rendered him subject to the registration requirement, and that he had actual knowledge of his requirement to update his registration should he move or add a second residence. Defendant contended at trial that he did not reside at the Frederick address.
The trial court modified the relevant form instructions to instruct the jury as follows:
"1170m
"The defendant is charged in Count 3 with failing to register as a sex offender in violation of former Penal Code section 290, subdivision (a)(1)(B). *1446 Specifically, the Information alleges that the defendant, Shawn Maurice Cohens, on or about March 14, 2007, in the County of Riverside, State of California, he as a person required to register as a sex offender pursuant to Penal Code section 290, did willfully and unlawfully fail to register at all residence addresses at which he regularly resided, regardless of the number of days or nights spent there.
"To prove that the defendant is guilty of this crime, the People must prove that:
"1. The defendant was previously convicted of a sex offense. As a result, and since the date of that conviction, the defendant has been required to register as a sex offender with the sheriff of the county if he resides within a city with no police department. For the rest of his life, the defendant must register within five working days of either changing his residence or adding a second residence. (The parties have stipulated that these facts are true and need not be proven.)
"2. The defendant actually knew that, for the rest of his life, he was required (a) to register as a sex offender with the sheriff of the county if he resides within a city with no police department, and (b) to register within five working days of either changing his residence or adding a second residence. (The parties have stipulated that these facts are true and need not be proven.)
"3. The defendant resided in Riverside County, California, at [the Frederick address], in Moreno Valley, a city with no police department.
"AND
"4. The defendant willfully failed to register as a sex offender with the sheriff of Riverside County within five working days of when the defendant started to reside at [the Frederick address], Moreno Valley, California.
"Someone commits an act `willfully' when he or she does it willingly or on purpose.
"A `residence' means one or more addresses at which a person regularly resides, regardless of the number of days or nights spent there.
"250m
"Every crime at issue in this case require[s] proof of the union, or joint operation, of act and wrongful intent.
*1447 "For you to find a person guilty of the crimes charged in Counts 2 and 3, or of the lesser offense to that charged in Count 2, that person must not only commit the prohibited act or fail to do the required act, but must do so with wrongful intent. A person acts with wrongful intent when he or she intentionally does a prohibited act; however, it is not required that he or she intend to break the law. The act or omission required is explained in the instruction for each crime."
II. STANDARD OF REVIEW
On appeal, jury instructions are reviewed de novo. (See, e.g., People v. Posey (2004) 32 Cal. 4th 193, 218 [8 Cal. Rptr. 3d 551, 82 P.3d 755].) "`Whether a jury has been correctly instructed is not to be determined from a consideration of parts of an instruction or from particular instructions, but from the entire charge of the court.' [Citation.] Therefore, the fact that the necessary elements of a jury charge are to be found in two instructions rather than in one instruction does not, in itself, make the charge prejudicial." (People v. Rhodes (1971) 21 Cal. App. 3d 10, 20 [98 Cal. Rptr. 249].) "The absence of an essential element in one instruction may be supplied by another or cured in light of the instructions as a whole." (People v. Galloway (1979) 100 Cal. App. 3d 551, 567-568 [160 Cal. Rptr. 914].)
III. DISCUSSION
Defendant contends the jury instructions for the failure to register offense erroneously omitted a requirement that the People prove he actually knew he was required to register a particular address. The People contend defendant has waived this argument. We disagree with the People as to waiver and agree with defendant as to the instructional error, but find the error to be harmless beyond a reasonable doubt.
A. Instructional Error As to the Elements of an Offense Cannot Be Waived
(1) Preliminarily, we disagree with the People's assertion that defendant's failure to object to the jury instruction waives the right to appeal based on instructional error. This is because instructional error as to the elements of an offense cannot be waived by trial counsel's failure to object. (People v. Hudson (2006) 38 Cal. 4th 1002, 1011-1012 [44 Cal. Rptr. 3d 632, 136 P.3d 168].) Accordingly, defendant has not forfeited his right to claim instructional error as to the elements of the failure to register offense.
B. Instructing on Knowledge of the Duty to Register a Particular Address
Defendant contends that the jury instructions were erroneous because the instructions did not require that the People prove that he actually knew he *1448 was required to register the Frederick address in particular. He adds that his stipulation to having actual knowledge of his duty to register if he changed his residence or added a second residence does not fill in the gap in the instructions as to his knowledge. We agree with defendant.
1. Interpretation of Jury Instructions for Failure to Register
Because defendant raises the issue of the knowledge element in failing to register, we review three cases that have addressed this element. The first case established the general requirement of actual knowledge of the duty to register. The second and third cases address the knowledge element in the context of failing to register a second residence.[4]
In People v. Garcia (2001) 25 Cal. 4th 744, 751 [107 Cal. Rptr. 2d 355, 23 P.3d 590] (Garcia), our Supreme Court evaluated a defendant's claim that jury instructions erroneously did not require the jury to find that he had actual knowledge of his duty to register. In Garcia, the defendant's defense at trial "was that he was unaware he was required to register as a sex offender, and no one had advised him of that requirement." (Id. at p. 748.) However, upon pleading no contest to the offenses that required him to register, the defendant stated that he understood his duty to register pursuant to section 290. (Garcia, at p. 748.) Additionally, he had "signed, dated, and affixed his fingerprint to a `Notice of Registration Requirement'" that he had reviewed with a prison official prior to being released. (Id. at pp. 748-749.) Our Supreme Court agreed with the defendant and established the requirement that failure to register does require actual knowledge of the duty to register. (Id. at pp. 753-754.) However, the erroneous definition of "willfully" in the instructions, as well as the giving of an ignorance-of-the law-is-no-excuse instruction, was found to be harmless. The finding of harmlessness was based, first, on strong evidence that the defendant knew of his duty to register, and, second, on other instructions requiring findings that the defendant had been informed of his duty to register and he had read and signed the form stating that his duty would be explained to him. (Id. at p. 755.)
Unlike the defendant in Garcia, at trial defendant did not contend he was unaware of his registration duty in general (to which he stipulated specifically as to a changed or second residence), nor did he contend that he was unaware *1449 of his duty to register the Frederick address. Instead, his defense at trial was that he did not reside at the Frederick address, which is different from the defendant in Garcia, who did not contest his residence. Thus, while the defendant in Garcia actually testified about his unawareness of the general requirement to register, in this case the defense offered no evidence whatever as to defendant's unawareness that he resided at the Frederick address or that he had to register the Frederick address. While in Garcia defense counsel did argue the defendant's lack of knowledge of the registration requirement (Garcia, supra, 25 Cal.4th at pp. 754-755), in this case defense counsel did not argue, for example, that since defendant did not in fact reside at the Frederick address, he obviously could not have believed that he resided there.
In People v. LeCorno (2003) 109 Cal. App. 4th 1058, 1067-1070 [135 Cal. Rptr. 2d 775] (LeCorno), Division Three of the First Appellate District evaluated instructional error as to the actual knowledge of a defendant who had been misinformed of his registration duties. In LeCorno, the defendant registered his home address in San Francisco but did not register a second address. The second address was the house of some friends from San Mateo where he began sleeping with increasing frequency because he was working on renovating their basement. (Id. at pp. 1062-1063.) The defendant testified that he had been told by the police officer with whom he registered that a residence is "`where you spend the most time.'" (Id. at p. 1063.) The police officer testified that he did not recall what he told the defendant, but he had provided some registrants with that definition of residence. (Id. at pp. 1061-1063.) The trial court in LeCorno denied the defendant's request for an instruction that the jury had to find the defendant had actual knowledge that he was required to register with the City of San Mateo. (Id. at p. 1064.) The LeCorno court agreed that it was error to instruct the jury that the defendant "willfully failed to register [in San Mateo] even if he did not believe that he had acquired a second residence and was required to register in San Mateo." (Id. at p. 1067.) Because of the strong evidence that the defendant misunderstood his registration obligations, the error was found to be "highly prejudicial, and certainly not harmless beyond a reasonable doubt." (Id. at p. 1070.)
Unlike the defendant in LeCorno, defendant did not claim to misunderstand his registration duties, and did not testify as to his understanding of his registration duties, but did not face an instruction explicitly telling the jury to disregard any ignorance of his duty to register his second residence. Similar to the defendant in LeCorno, defendant argues that jury instructions erroneously did not require a finding that he had actual knowledge of the duty to register a particular residence, the Frederick address.
In People v. Poslof (2005) 126 Cal. App. 4th 92, 97-98 [24 Cal. Rptr. 3d 262] (Fourth Dist., Div. Two) (opn. of Gaut, J.) (Poslof), we evaluated the *1450 knowledge element in jury instructions where the defendant did not register a second address. The defendant in Poslof registered an address in Merced County but then purchased a house in San Bernardino County. (Id. at p. 96.) At trial the defendant contended that his San Bernardino County house was not his residence because he had not stayed there for five consecutive working days, and he proposed a jury instruction to that effect, which the trial court rejected. (Id. at p. 97.) We affirmed the trial court's rejection because the five-working-day timeframe was the grace period for registering changes and not a durational residency requirement under the statute. (Id. at pp. 101-103.) We held that the modified instructions addressing the section 290 offense were consistent with Garcia in defining willfulness because they instructed "the jury it must find defendant had actual knowledge of the duty to register [the particular residence] and failed to do so." (126 Cal.App.4th at p. 99.) We further held that the giving of a general intent instruction was inappropriate. (Id. at p. 100.) However, we held that the error was harmless because "the trial court on several occasions instructed the jury that in order to find defendant guilty of failing to register in violation of section 290, the jury must find defendant had actual knowledge he was required to register the [particular] residence and willfully failed to do so." (Ibid.)
Defendant's contentions are similar to those we evaluated in Poslof in that, in effect, both defendants based their trial court defenses on their arguments that the addresses they failed to register were not their residences. However, the Poslof jury instructions required knowledge of a duty to register the particular second residence, which the instructions in this case did not. As we discuss below, this omission in the instructions in this case was erroneous.
2. Application to Defendant
(2) Former section 290 provided that any person required to register as a sex offender who "willfully violates" that requirement was guilty of a crime. "The word `willfully' implies a `purpose or willingness' to make the omission. (§ 7.) Logically one cannot purposefully fail to perform an act without knowing what act is required to be performed. As stated in People v. Honig (1996) 48 Cal. App. 4th 289, 334 [55 Cal. Rptr. 2d 555], `the term "willfully". . . imports a requirement that "the person knows what he is doing." [Citation.] Consistent with that requirement, and in appropriate cases, knowledge has been held to be a concomitant of willfulness. [Fn. omitted.]' Accordingly, a violation of section 290 requires actual knowledge of the duty to register." (Garcia, supra, 25 Cal.4th at p. 752.)
(3) Although Garcia only addressed actual knowledge of the general duty to register, the reasoning applies as well to actual knowledge of a particular duty to register. This is because "[i]t is nonsensical to say that in *1451 order to purposefully fail to register, defendant must have knowledge only of an abstract duty to register, but that he need not know what that means or how it applies to his circumstances." (LeCorno, supra, 109 Cal.App.4th at p. 1068.) Thus, to paraphrase Garcia, we hold that "[l]ogically one cannot purposefully fail to [register a particular address] without knowing [registration of that address] is required to be performed. . . . Accordingly, a violation of section 290 requires actual knowledge of the duty to register [a particular address]." (Garcia, supra, 25 Cal.4th at p. 752.)
Instructionslike the ones used by the trial court in this casethat define "willfully" by reference to purpose or willingness render the instruction "incomplete in failing clearly to require actual knowledge of the registration requirement." (Garcia, supra, 25 Cal.4th at p. 754; see also People v. Sorden (2005) 36 Cal. 4th 65, 76-77 [29 Cal. Rptr. 3d 777, 113 P.3d 565] (conc. & dis. opn. of Werdegar, J.) ["the jury must be instructed the word `willfully' requires that the accused have had actual knowledge of his duty to register"]; Poslof, supra, 126 Cal.App.4th at p. 99 [finding no error in an instruction because it required finding actual knowledge of the duty to register a particular address].) Accordingly, the jury should have been instructed that the People had to prove that defendant had actual knowledge of his duty to register the Frederick address in particular.
Paragraphs Nos. 1 and 2 of the modified CALCRIM No. 1170 instruction used by the trial court told the jury that the parties had stipulated (1) that defendant was subject to the registration requirements, and (2) that defendant had actual knowledge of his duty to register changed or second residences. Paragraph No. 3 required a finding that defendant resided at the Frederick address, and paragraph No. 4 required finding that defendant willfully failed to register within five days of starting to reside at the Frederick address. Following paragraph No. 4, the instruction stated that, "[s]omeone commits an act `willfully' when he or she does it willingly or on purpose." The instructions do not elsewhere expressly require that the jury must find defendant had actual knowledge of the duty to register the Frederick address. Thus, the modified CALCRIM No. 1170 instruction given to the jury was erroneous because it did not tell the jury that the prosecution had to prove defendant had actual knowledge of his duty to register the Frederick address, and this defect was not cured in other instructions to the jury.
(4) In addition to a modified CALCRIM No. 1170, the trial court also instructed the jury with a modified CALCRIM No. 250. Defendant argues that this "general intent instruction . . . erroneously allowed the jurors to find [defendant] guilty of the registration offense even if he was unaware of his obligation to register the Frederick Street address." The People agree "it was error to give this particular instruction because the defendant must have *1452 knowledge that he is breaking the law." Because this mere general intent instruction confuses the requirement of actual knowledge, we agree it was erroneous as given to the jury. (Poslof, supra, 126 Cal.App.4th at p. 100.) However, we disagree with the People's concession that "the defendant must have knowledge that he is breaking the law." "[R]ecognizing that defendant must have actual knowledge of his [registration duties] does not transform the violation of section 290 from a general intent crime into a specific intent crime. While defendant need not intend to violate the law, i.e., he need not know the penal consequences of failing to register, he must have actual knowledge that he is required to register and willfully fail to do so." (LeCorno, supra, 109 Cal.App.4th at p. 1069.)
The People argue that nothing from our opinion in Poslof "would [cause] disapproval upon the instructions here." While the instructions in this case are broken down by element in a similar organizational structure to those used in Poslof, the instructions in Poslof defined willfully to mean "`that the defendant had actual knowledge of his duty to register'" and, thus, when the Poslof instructions required finding the "`defendant willfully failed to register the second residence,'" the instructions were requiring that the jury find actual knowledge of the duty to register the particular address in question. (Poslof, supra, 126 Cal.App.4th at pp. 98-99.) Additionally, the trial court in Poslof "on several occasions instructed the jury that in order to find defendant guilty of failing to register in violation of section 290, the jury must find defendant had actual knowledge he was required to register the [particular address] and willfully failed to do so." (Id. at p. 100.) Thus, our approval of the instructions in Poslof does not support the instructions used by the trial court in this case.
(5) Accordingly, we hold that the instructions used by the trial court in this case were erroneous because they did not require the People to prove that defendant had actual knowledge of his duty to register the Frederick address in particular.
C. Harmless Error
Even if the instructions as to the actual knowledge requirements of the failure to register offense were erroneous, we find the error to be harmless beyond a reasonable doubt.
"[W]e may affirm despite the error if the jury that rendered the verdict at issue could not rationally have found the omitted element unproven; the error is harmless, that is, if the record contains no substantial evidence supporting a factual theory under which the elements submitted to the jury were proven but the omitted element was not. [Citation.]" (People v. Sakarias (2000) 22 *1453 Cal.4th 596, 625 [94 Cal. Rptr. 2d 17, 995 P.2d 152] (Sakarias).) The instructions omitted the element that defendant had actual knowledge of his duty to register the Frederick address. However, other elements submitted to the jury were proven. Specifically, defendant stipulated he was aware of his registration duties, and the jury found him to be residing at the Frederick address and cohabitating with the victim, who resided at the Frederick address.
During the three- to four-month period from the victim moving into the Frederick address until defendant's arrest, defendant slept every night at the Frederick address; kept clothes and toiletries at the Frederick address; received mail at the Frederick address; used the Frederick address for dog licensing purposes; and contributed to rent for the Frederick address. Because defendant made such substantial use of the Frederick address, absent substantial evidence to the contrary, the jury could only have inferred that defendant was aware he was residing at the Frederick address, and thus, pursuant to his stipulation, aware of his duty to register the Frederick address.
Accordingly, to apply the Sakarias test, we evaluate whether there is substantial evidence that defendant did not know he was residing at the Frederick address. Such evidence could only have been of two types: (1) that defendant's consciousness was not normal such that he was unaware of his actions and surroundings, or (2) that he genuinely did not consider the activities he engaged in at the Frederick address to constitute residency. No evidence of either type was presented. For example, neither defendant nor anyone else testified that defendant had a mental infirmity or a contrary understanding of residency.[5] Thus, there was no substantial evidence that defendant did not know he was residing at the Frederick address.
To summarize, the jury could reasonably infer defendant's actual knowledge of his duty to register the Frederick address from his awareness of his general duty to register a second residence and from the proven fact that defendant resided at the Frederick address. Furthermore, there was no substantial evidence that defendant did not know he was residing at the *1454 Frederick address. To paraphrase Sakarias, the jury "could not rationally have found [defendant's actual knowledge of his duty to register the Frederick address] unproven" and, thus, omission of an instruction that the prosecution had to prove defendant actually knew he had to register the Frederick address was harmless. (Sakarias, supra, 22 Cal.4th at p. 625.)
Defendant refers us to the People's closing argument and suggests overlooking Sakarias in favor of evaluating the effect of the closing arguments and the instructional error cumulatively under People v. Younger (2000) 84 Cal. App. 4th 1360, 1382 [101 Cal. Rptr. 2d 624] (Younger). In Younger, CALJIC former No. 2.50.02 permitted the jury to rely on prior domestic violence offenses to establish a propensity for similar action but omitted a caution in the revised version not to consider prior offenses sufficient to find guilt of the current offense. Because the prosecutor in Younger emphasized the prior offenses in his closing argument, the reviewing court was reinforced in its conclusion that there was reasonable doubt whether the defendant had been convicted based upon the evidence or his past offenses. (Younger, at pp. 1384-1385.) Younger thus evaluates the harmlessness of instructional error in which a presumption is created, but the instruction creating the presumption omits a caution not to consider prior offenses sufficient to find guilt of the current offense. (See id. at p. 1382.)
Here, the instructional error was the omission of the element that defendant have actual knowledge of his duty to register a particular address. Contrary to defendant's assertion, the People's closing argument did not take advantage of this instructional error. Instead, the portion of the People's closing argument cited by defendant is consistent with the parties' apparent assumption that their stipulation resolved the issue of knowledge. In particular, the portion cited by defendant ignored the issue of knowledge and instead argued that defendant "was residing with [the victim] and her children," defendant only registered "at one place," and that defendant should be held "accountable" for both the "obvious crime of failing to register at the Frederick Street address" and also for the crime of inflicting corporal injury on "his live-in girlfriend." Unlike Younger, in which the instructional error could have created a defective deliberative process by permitting the jury to rely on prior offenses to establish a current offense, the error in this case removed from the jury's consideration an element of the offense. Because the omitted element was not considered by the jury, closing arguments could not have affected deliberation concerning that element. Thus, Younger is not analogous and unlike Sakarias does not provide us with the appropriate test for evaluating instructional error when an element of an offense is omitted.
As evaluated under Sakarias, we conclude this jury could not have found the omitted knowledge element unproven and, thus, uphold the judgment.
*1455 IV. DISPOSITION
The judgment is affirmed.
Gaut, J., concurred.
KING, J., Concurring and Dissenting.
I concur with the majority that to convict an individual of violating Penal Code section 290, the jury must find that the defendant had actual knowledge of the requirement to register the particular address involved. I further agree that the trial court erred in not properly instructing the jury on this element. I disagree, however, that the error is harmless.
Here, the majority concludes the instructional error was harmless because, based on the evidence presented, "the jury could only have inferred that defendant was aware he was residing at the Frederick address . . .," and "the jury `could not rationally have found [defendant's actual knowledge of his duty to register the Frederick address] unproven. . . .'" (Maj. opn., ante, at pp. 1453-1454, italics added.) Initially, I believe this to be an inappropriate standard when applied to the omission of an instruction on the "mens rea" necessary for the commission of the crime. Additionally, the evidence does not inescapably lead to but one conclusion, as suggested by the majority.
"Harmless-error review looks . . . to the basis on which `the jury actually rested its verdict.' [Citation.] The inquiry, in other words, is not whether, in a trial that occurred without the error, a guilty verdict would surely have been rendered, but whether the guilty verdict actually rendered in this trial was surely unattributable to the error. That must be so, because to hypothesize a guilty verdict that was never in fact renderedno matter how inescapable the findings to support that verdict might bewould violate the jury-trial guarantee." (Sullivan v. Louisiana (1993) 508 U.S. 275, 279 [124 L. Ed. 2d 182, 113 S. Ct. 2078] (Sullivan); see also People v. Kobrin (1995) 11 Cal. 4th 416, 429-430 [45 Cal. Rptr. 2d 895, 903 P.2d 1027].) The right to a jury trial, the Supreme Court concluded, "requires more than appellate speculation about a hypothetical jury's action, or else directed verdicts for the State would be sustainable on appeal. . . ." (Sullivan, supra, at p. 280.)
As further explained by Justice Stevens in a concurring opinion in Neder v. United States (1999) 527 U.S. 1 [144 L. Ed. 2d 35, 119 S. Ct. 1827] (Neder), the failure to instruct the jury as to an element can be harmless only when, based upon other jury findings implicit in the verdict, the verdict "necessarily include[s] a finding" on the omitted element. (Id. at p. 26 (conc. opn. of Stevens, J.).) According to Justice Stevens, there is "a distinction of true importance between a harmless-error test that focuses on what the jury did *1456 decide, rather than on what appellate judges think the jury would have decided if given an opportunity to pass on an issue." (Id. at p. 27 (conc. opn. of Stevens, J.).) The harmless error analysis, he explained, "`may enable a court to remove a taint from proceedings in order to preserve a jury's findings, but it cannot constitutionally supplement those findings.' [Citation.]" (Ibid. (conc. opn. of Stevens, J.).) In a dissenting opinion in the same matter, Justice Scalia, joined by Justices Souter and Ginsburg, stated: "The failure of the court to instruct the jury properlywhether by omitting an element of the offense or by so misdescribing it that it is effectively removed from the jury's considerationcan be harmless, if the elements of guilt that the jury did find necessarily embraced the one omitted or misdescribed." (Id. at p. 35 (dis. opn. of Scalia, J.).) Justice Scalia further explained that the majority was "casting Sullivan aside" and "throw[ing] open the gate for appellate courts to trample over the jury's function." (Id. at p. 36 (dis. opn. of Scalia, J.).)
While I agree with the majority that there is "substantial evidence" from which the jury could infer that defendant had actual knowledge that he had to register the Frederick Street address, it is nonetheless not for us to insert our thoughts on an issue that was never addressed or determined by the jury. As expressed by Justice Stevens, harmless error may allow a court to remove a taint from proceedings in order to preserve a jury's findings, but it cannot be used to supplement those findings. And in line with Justice Scalia, there is nothing in this record upon which we can conclude that the jury did in fact consider or determine, even by way of other findings, that defendant knew he had to register the Frederick Street address. Defendant's knowledge was simply not addressed in the jury verdict.
The majority relies on People v. Sakarias (2000) 22 Cal. 4th 596 [94 Cal. Rptr. 2d 17, 995 P.2d 152] for its harmless error analysis. In turn, Sakarias primarily bases its analysis on Neder and People v. Flood (1998) 18 Cal. 4th 470 [76 Cal. Rptr. 2d 180, 957 P.2d 869]. While I agree with each of these cases on the facts there presented, their discussion of harmless error is inapplicable to our facts.
In Neder, the United States Supreme Court considered whether the failure to instruct the jury on an element of a crime is subject to harmless error analysis. In that case, the defendant was convicted of, among other crimes, filing false income tax returns that underreported $5 million in income. An element of this crime is that false statements made by the defendant are "material." (26 U.S.C.A. § 7206(1).) The defendant did not argue at trial or on appeal that the false statements at issue were immaterial. (Neder, supra, 527 U.S. at p. 16.) Outside the presence of the jury, the court found that the evidence established the element of materiality and instructed the jury that the question of materiality "`is not a question for the jury to decide.'" (Id. at p. 6.)
*1457 The Neder court determined that the error was subject to harmless error analysis and, under the circumstances presented in that case, was harmless. In distinguishing Sullivan, the court explained: "The omitted element [in Neder] was materiality. [Neder] underreported $5 million on his tax returns, and did not contest the element of materiality at trial. [Neder] does not suggest that he would introduce any evidence bearing upon the issue of materiality if so allowed. Reversal without any consideration of the effect of the error upon the verdict would send the case back for retrial-a retrial not focused at all on the issue of materiality, but on contested issues on which the jury was properly instructed. We do not think the Sixth Amendment requires us to veer away from settled precedent to reach such a result." (Neder, supra, 527 U.S. at p. 15, italics added.) By contrast, in the matter before us, the issue of "residency" was a contested issue and I would expect it to be contested upon a retrial.
This case is also unlike People v. Flood, supra, 18 Cal. 4th 470, where the court found harmless error in failing to instruct on an element of the crime of evading a peace officer; the court did not instruct the jury that it had to find that the individual driving the pursuing vehicle was a peace officer. There, the court found that "the record established[d] beyond a reasonable doubt that the trial court's instructional error on the peripheral peace officer issue did not contribute to the jury's guilty verdict. . . ." (Id. at p. 505.) It based its conclusion on: (1) the defendant effectively conceded the issue by failing to object to the instruction, presenting no evidence regarding the peace officer element, and failing to dispute the prosecution's evidence on the issue; (2) the actual verdict rendered demonstrated that the jury found that the two persons in the car pursuing the defendant wore "distinctive" uniforms and were driving a "distinctively marked" vehicle; (3) because the peace officer requirement is an expressly enumerated element of the crime, the defendant could not contend that he lacked notice or did not have a full opportunity to present any evidence on the issue; (4) "all of the evidence at trial relevant to the issue in question indicated that [the officers in the pursuing vehicle] were peace officers . . ."; (5) the "misinstruction [was] on a peripheral issue that was never actually in dispute at trial"; and (6) the missing element "had nothing to do with defendant's own actions or mental state." (Id. at pp. 504-507.) Under such circumstances, the court concluded, "there is no possibility that the error affected the result." (Id. at p. 507.)
By contrast, here the element of defendant's knowledge was not a peripheral issue. It went directly to the heart of the prosecution's case, that is, defendant's mens rea. At no point did defendant concede that the Frederick Street address was a second residence, let alone that he knew that it qualified under the law as a second residence. Furthermore, there is nothing in the present jury verdict that addresses the issue of whether defendant had knowledge that the Frederick Street address qualified as a second residence. *1458 Finally, there is "substantial evidence" by which a jury could conclude that defendant did not fully realize that the Frederick Street address was a second residence: he did not pay rent on the premises; he kept many of his belongings and clothes at his Alessandro Boulevard apartment; when visited by his mother it would be at the Alessandro Boulevard apartment; and much of his mail was addressed to the Alessandro Boulevard residence. And lastly, defendant stipulated that he knew he had to register a second residence; in that he knew he had to register a second residence and did not register the Frederick Street address, this jury could logically infer that he did not believe the Frederick Street address qualified as a second residence.
While I fully understand that the jury found that the Frederick Street address was a second residence, this finding does not equate to a finding that defendant had actual knowledge that it was a second residence.
People v. Sakarias, supra, 22 Cal. 4th 596 is also inapposite. There, the defendant committed a murder after entering the residence with the intent to steal. At the time of entry, the victim, whom the defendant knew, was not at home. The defendant and his coconspirator waited for the victim to return. Upon her entry, they hit her over the head with a hatchet and stabbed her multiple times. During jury deliberations the jury inquired: "`Does burglary begin when a structure is entered and continue until the structure is left?'" (Id. at p. 623.) The court answered as follows: "`Although it is alleged that the killing in the present case occurred sometime after it is alleged the defendant entered the house, if the jury finds that the defendant committed burglary by entering the house with the intent to steal, the homicide and the burglary are parts of one continuous transaction.'" (Ibid., italics added.) The Supreme Court found this answer to be error, in that it is an issue for the jury, not the judge, to determine whether or not the murder was committed in the "`perpetration of'" or "`while the defendant was engaged in . . . the commission of'" a burglary. (Id. at p. 624.) In concluding that the error was harmless, the court stated: "That the erroneous answer did not contribute to defendant's conviction of first degree murder is plain. In addition to the theory of killing in the perpetration of burglary, the jury was instructed on three additional theories of first degree murder: killing in the perpetration of robbery, deliberate and premeditated murder, and murder by lying in wait. As the jury found true the robbery-murder special-circumstance allegation, necessarily finding the murder was committed in the commission of robbery, `we can determine that [the first degree murder] verdict rested on at least one correct theory,' and the court's answer on duration of burglary was thus `of no consequence to the murder charge.' [Citation.]" (Id. at p. 625, italics added.) The court went on to explain that from the record, it was evident that the *1459 jury's question was not concerned directly with whether it was one continuous transaction; the court also concluded that there was absolutely no evidence that the burglary/murder was not other than a continuous transaction.
Unlike Sakarias, our present record does not support a conclusion that the instructional error was of no consequence to the conviction of the charge of failure to register. Defendant's mens rea was not a peripheral or uncontested issue. The jury was not instructed on this basic and fundamental element. In the verdict rendered, there are neither explicit nor implicit findings that the jury concluded that defendant had actual knowledge that the Frederick Street address qualified as a second residence. And while there was by inference "substantial evidence" to support such a finding, there was also "substantial evidence" from which to infer a contrary finding.
I therefore do not believe that the failure of the trial court to instruct on an element of the crime is harmless beyond a reasonable doubt.
NOTES
[1] All further statutory references are to the Penal Code unless otherwise indicated.
[2] Former section 290 was repealed and reenacted effective October 13, 2007. (Stats. 2007, ch. 579, §§ 7, 8.) Subdivision (a)(1)(B) of former section 290 was relocated to a new section, section 290.010, and the reference to "subparagraph (A)" was changed to "the Act." (§ 290.)
[3] The victim, the victim's daughter, and defendant's mother also gave testimony applicable to the willful infliction of corporal injury on a cohabitant conviction. The jury's finding of guilt on that count necessarily means that the jury found defendant and the victim to be cohabiting. Other than establishing that the jury found defendant and the victim to be cohabiting, the willful infliction of corporal injury on a cohabitant conviction is not relevant to this appeal. Accordingly, we do not recite the additional evidence relating to that conviction.
[4] Defendant's stipulation that he knew of his duty to register a second residence distinguishes this case from two others in which the issue was the knowledge of the general duty to register a second address. (See People v. Jackson (2003) 109 Cal. App. 4th 1625, 1635 [1 Cal. Rptr. 3d 253] ["no instruction that there must be evidence that defendant actually knew that he was required to register additional addresses"]; People v. Edgar (2002) 104 Cal. App. 4th 210, 220 [127 Cal. Rptr. 2d 662] [instructions did not require "the jury to find that appellant actually knew the law required him to register multiple residences"].)
[5] Evidence of mental infirmity or a contrary understanding of residency was effectively precluded by defendant's only defense at trial to the failure to register charge. As previously mentioned in comparing this case with Garcia, this defense was that he did not reside at the Frederick address, as distinguished from admitting his use may have constituted residency but claiming he did not believe he was residing there. He sought to establish this defense by showing his use of the Alessandro address. However, the defense was flawed in its conception because residency in the context of section 290 is not exclusivejust because he resided at the Alessandro address did not imply that he did not reside at the Frederick address for purposes of section 290 because he could reside at both addresses and be required to register both residences. (See former § 290, subd. (a)(1)(B), current § 290.010 [duty to register multiple residences].) Accordingly, the jury found defendant to be residing at the Frederick address even while defendant apparently also resided at the Alessandro address.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2260214/
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178 Cal. App. 4th 1325 (2009)
THE PEOPLE, Plaintiff and Respondent,
v.
PEDRO GONZALEZ, Defendant and Appellant.
No. B208413.
Court of Appeals of California, Second District, Division Two.
November 4, 2009.
*1327 Mark Yanis, 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, Michael R. Johnsen and William H. Shin, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
ASHMANN-GERST, J.
A jury convicted Pedro Gonzalez (appellant) of one count of assault by means likely to produce great bodily injury. (Pen. Code, § 245, subd. (a)(1).)[1] The jury found true two sentence enhancement allegations: that appellant personally inflicted great bodily injury on a person other than an accomplice in the commission of a felony (§ 12022.7, subd. (a)); and that the assault was a "violent felony" committed for the benefit of a criminal street gang (§ 186.22, subd. (b)(1)(C)).[2]
The trial court sentenced appellant to a term of 16 years in state prison, calculated as follows: the midterm of three years for the assault count, enhanced by three years for appellant's personal infliction of great bodily injury, and further enhanced by 10 years for appellant's commission of a violent felony to benefit a criminal street gang. The trial court awarded appellant 208 days of presentence custody credit.
This appeal presents the following question: Does imposition of both the three-year great bodily injury enhancement and the 10-year gang enhancement violate section 1170.1, subdivision (g), which provides in relevant part, "[w]hen two or more enhancements may be imposed for the infliction of great bodily injury on the same victim in the commission of a single offense, only the greatest of those enhancements shall be imposed for that offense." Applying the Supreme Court's reasoning in People v. Rodriguez *1328 (2009) 47 Cal. 4th 501 [98 Cal. Rptr. 3d 108, 213 P.3d 647] (Rodriguez), we conclude that imposition of both enhancements does violate section 1170.1, subdivision (g).[3]
FACTUAL BACKGROUND
On December 27, 2007, Armando Secundino (the victim) and his cousin were at a video arcade in Los Angeles. At the arcade, appellant approached the victim and asked the victim where he was from. The victim understood appellant's question as a query about the victim's gang affiliation, and the victim answered "nowhere." Appellant responded that he was from "18th Street" and walked a few feet away to speak with a companion, later identified at trial as Pedro Solis (Solis). Solis approached the victim, asked the victim where the victim was from, and then declared that he (meaning Solis) was from "18th Street." Around the same time, appellant went to stand behind the victim.
The victim told Solis that he did not care where Solis was from. Solis punched the victim and the two started fighting. Appellant, meanwhile, began hitting and kicking the victim from behind. The victim's cousin, who witnessed the brawl, testified that he saw appellant strike the victim more than 10 times. Once the brawl ended, the victim discovered that he had been stabbed and was severely bleeding underneath his right arm. The victim was hospitalized for four days with a collapsed lung. The victim testified that during the entire brawl, his focus was on Solis and at no point did he see Solis stab him.
Officer Adrian Lopez testified as the prosecution's gang expert. Officer Lopez testified that appellant was a member of the 18th Street criminal street gang, and that he committed the underlying offense to benefit the gang with the specific intent to further and promote criminal conduct by members of the gang.
DISCUSSION
I. Overview
Appellant concedes that the jury's factual findings qualified him for two sentence enhancements: a three-year great bodily injury enhancement under section 12022.7, subdivision (a), and a 10-year gang enhancement under *1329 section 186.22, subdivision (b)(1)(C). Appellant contends, however, that because both enhancements resulted from his infliction of great bodily injury on the same victim in the commission of a single offense, the trial court should have, pursuant to section 1170.1, subdivision (g), imposed only the greatest of those enhancements, i.e., the 10-year gang enhancement. The People agree with appellant's contention. We agree as well, and remand the matter for resentencing consistent with this decision.
II. Statutory Framework
We begin by reviewing the applicable statutes:
Section 1170.1, subdivision (g) provides: "When two or more enhancements may be imposed for the infliction of great bodily injury on the same victim in the commission of a single offense, only the greatest of those enhancements shall be imposed for that offense. This subdivision shall not limit the imposition of any other enhancements applicable to that offense, including an enhancement for being armed with or using a dangerous or deadly weapon or a firearm."
(1) Section 12022.7 sets forth various sentence enhancements for the infliction of great bodily injury while committing or attempting a felony. Subdivision (a), the relevant provision in this case, provides: "(a) Any person who personally inflicts great bodily injury on any person other than an accomplice in the commission of a felony or attempted felony shall be punished by an additional and consecutive term of imprisonment in the state prison for three years." (§ 12022.7, subd. (a).)
(2) Section 186.22, subdivision (b)(1), specifies that a felony "committed for the benefit of, at the direction of, or in association with any criminal street gang, with the specific intent to promote, further, or assist in any criminal conduct by gang members" is subject to a sentence enhancement. Subparagraphs (A) through (C) set forth the actual enhancements: subparagraph (A) provides for a two-, three-, or four-year enhancement unless subparagraph (B) or (C) applies; subparagraph (B) provides for a five-year enhancement if the underlying felony is a "serious felony," as defined by section 1192.7, subdivision (c); and subparagraph (C), the relevant provision here, provides for a 10-year enhancement if the underlying felony is a "violent felony," as defined by section 667.5, subdivision (c).
Section 667.5, subdivision (c), in turn, lists a number of offenses which qualify as "violent" felonies. As relevant here, a "violent felony" includes "[a]ny felony in which the defendant inflicts great bodily injury on any person other than an accomplice which has been charged and proved as provided for in Section 12022.7. . . ." (§ 667.5, subd. (c)(8).)
*1330 Here, appellant's infliction of great bodily injury on the victim had two consequences as it pertained to sentence enhancements. First, it qualified him for a three-year enhancement under section 12022.7, subdivision (a). Second, it turned the underlying offense of assault into a "violent felony" as defined by section 667.5, subdivision (c), which qualified appellant for the 10-year (and not the standard two-, three-, or four-year) gang enhancement under section 186.22, subdivision (b)(1)(C).
III. Summary of Rodriguez
In Rodriguez, the defendant, a member of the Varrio Nuevo Estrada (VNE) criminal street gang, fired five to six shots at three victims, all of whom were members of the rival 18th Street gang. (Rodriguez, supra, 47 Cal.4th at p. 504.) When arrested, the defendant admitted firing the shots in retaliation for the 18th Street gang's assault on another VNE member. (Ibid.) The jury found the defendant guilty of three counts of assault with a firearm (one count for each victim), and as to each count made findings under two sentencing enhancement statutes: (1) that defendant personally used a firearm under section 12022.5, subdivision (a); and (2) that he committed a "violent felony," as defined by section 667.5, subdivision (c),[4] to benefit a criminal street gang under section 186.22, subd. (b)(1)(C). (Rodriguez, supra, at p. 505.) For each separate assault count, the trial court imposed enhancements under both sentencing statutes.[5] (47 Cal.4th at p. 505.)
The Supreme Court reversed the trial court's sentence on the basis of section 1170.1, subdivision (f), which provides: "When two or more enhancements may be imposed for being armed with or using a dangerous or deadly weapon or a firearm in the commission of a single offense, only the greatest *1331 of those enhancements shall be imposed for that offense. This subdivision shall not limit the imposition of any other enhancements applicable to that offense, including an enhancement for the infliction of great bodily injury."
The Supreme Court reasoned that the defendant received two enhancements for his use of a firearm against each victim: one enhancement under section 12022.5, subdivision (a), and another enhancement under section 186.22, subdivision (b)(1)(C). (Rodriguez, supra, 47 Cal.4th at p. 508.) "Because two different sentence enhancements were imposed for defendant's firearm use in each crime," the Supreme Court concluded that "section 1170.1[,] subdivision (f) requires that `only the greatest of those enhancements' be imposed." (Rodriguez, supra, 47 Cal.4th at pp. 508-509.)
In other words, the "defendant's firearm use resulted in additional punishment not only under section 12022.5's subdivision (a) (providing for additional punishment for personal use of a firearm) but also under section 186.22's subdivision (b)(1)(C), for committing a violent felony as defined in section 667.5, subdivision (c)(8) (by personal use of firearm) to benefit a criminal street gang. Because the firearm use was punished under two different sentence enhancement provisions, each pertaining to firearm use, section 1170.1[,] subdivision (f) requires imposition of `only the greatest of those enhancements' with respect to each offense." (Rodriguez, supra, 47 Cal.4th at p. 509.) The court remanded the matter to the trial court to restructure the sentence so as to not violate section 1170.1, subdivision (f).[6]
IV. Application of Rodriguez
(3) We find the Supreme Court's reasoning in Rodriguez persuasive and squarely applicable to the present case. Similar to subdivision (f) of section 1170.1, subdivision (g) of the same section prohibits the imposition of more than one enhancement "for the infliction of great bodily injury on the same *1332 victim in the commission of a single offense. . . ." Here, appellant's infliction of great bodily injury to a single victim subjected him to a three-year enhancement under section 12022.7, subdivision (a). The same infliction of great bodily injury to the same victim also turned appellant's underlying assault offense into a "violent felony" under section 667.5, which subjected him to a 10-year enhancement under section 186.22, subdivision (b)(1)(C). In other words, the trial court imposed two enhancements for appellant's infliction of great bodily injury on the same victim in the commission of a single offense. Under the reasoning articulated in Rodriguez, we conclude the trial court should have imposed only the greatest of those enhancements as required by section 1170.1, subdivision (g). (Rodriguez, supra, 47 Cal.4th at p. 509.)
Because section 1170.1, subdivision (g) is dispositive, we need not address appellant's additional arguments that imposition of both sentence enhancements violated section 654 and constituted impermissible bootstrapping under People v. Briceno (2004) 34 Cal. 4th 451 [20 Cal. Rptr. 3d 418, 99 P.3d 1007].
DISPOSITION
We reverse the trial court's sentence and remand the matter to the trial court to restructure appellant's sentence so as to not violate section 1170.1, subdivision (g). The judgment is affirmed in all other respects.
Boren, P. J., and Chavez, J., concurred.
NOTES
[1] All further statutory references are to the Penal Code unless otherwise indicated.
[2] For brevity, we use the phrase "for the benefit of a criminal street gang" to refer to crimes that, in the statutory language, are committed "for the benefit of, at the direction of, or in association with any criminal street gang, with the specific intent to promote, further, or assist in any criminal conduct by gang members. . . ." (§ 186.22, subd. (b)(1).)
[3] Because the Supreme Court issued Rodriguez after appellant filed his opening brief and after the People responded, we permitted both parties to provide additional briefing in light of that case.
[4] In addition to defining a "violent felony" as "[a]ny felony in which the defendant inflicts great bodily injury," section 667.5, subdivision (c)(8) also defines a "violent felony" as "any felony in which the defendant uses a firearm which use has been charged and proved as provided in subdivision (a) of Section 12022.3, or Section 12022.5 or 12022.55." (§ 667.5, subd. (c)(8).)
[5] Specifically, the trial court imposed the following sentence: "For defendant's assault on [victim one], the court imposed a three-year term for the assault, enhanced by four years for defendant's personal use of a firearm, and further enhanced by 10 years for committing a violent felony to benefit a street gang, resulting in a sentence totaling 17 years. For the assault on [victim two], the court imposed a one-year prison term (one-third of the midterm) for the assault, enhanced by one year and four months (one-third of the midterm) for defendant's personal use of a firearm, and further enhanced by three years and four months (one-third of the 10-year term) for committing a violent felony to benefit a street gang, resulting in a sentence totaling five years and eight months, to be served consecutively to the 17-year term imposed for the assault on [victim one]. For the assault on [victim three], the trial court imposed a 17-year sentence, to be served concurrently with the aggregate sentences for the assaults on [victims one and two]." (Rodriguez, supra, 47 Cal.4th at p. 506.)
[6] In a companion case, People v. Jones (2009) 47 Cal. 4th 566, 572 [98 Cal. Rptr. 3d 546, 213 P.3d 997] (Jones), the Supreme Court held that a defendant who shoots at an inhabited dwelling to benefit a criminal street gang is subject to the alternate penalty of life imprisonment under section 186.22, subdivision (b)(4), and an additional 20-year enhancement under section 12022.53, subdivision (b). The Supreme Court explained in Jones that even though that case bore a "superficial similarity" to Rodriguez, the cases were in fact different. (Jones, supra, at p. 572, fn. 3.) The issue in Rodriguez was "whether the trial court properly imposed two sentence enhancements (§ 12022.5 & § 186.22, subd. (b)(1)(C)," whereas the issue in Jones "[was] whether the trial court properly imposed a sentence enhancement (§ 12022.53) in conjunction with an alternate penalty provision (§ 186.22 (b)(4))." (Jones, supra, at p. 572, fn. 3.) Because the case before us concerns the imposition of two sentence enhancements, and not a sentence enhancement in conjunction with an alternate penalty provision, the holding in Jones is inapplicable here.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2260219/
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178 Cal. App. 4th 156 (2009)
BEHYAR FARIBA, Plaintiff and Appellant,
v.
DEALER SERVICES CORPORATION, Defendant and Appellant.
No. D053162.
Court of Appeals of California, Fourth District, Division One.
October 7, 2009.
*158 Law Offices of Paul D. Turner & Associates, Paul D. Turner; Law Offices of Zvi "Hershy" Silver and Zvi Aria Silver for Plaintiff and Appellant.
Prenovost, Normandin, Bergh and Dawe, Tom R. Normandin, Jr., and Paula M. Harrelson for Defendant and Appellant.
*159 OPINION
NARES, J.
On these appeals we are confronted with an issue of first impression that centers on the interpretation of those portions of the California Uniform Commercial Code[1] dealing with the priority of security interests in personal property among competing creditors. Specifically, where a secured creditor of a business has actual knowledge that the business is substantially engaged in selling the goods of others, i.e., consignment sales, are the rights of the consignor superior to those of the secured creditor? We hold that they are.
INTRODUCTION
Plaintiff Behyar Fariba is an automobile wholesaler. California Auto Sales & Leasing (CASL), which is not a party to this action, was an independent retail automobile dealer to which Fariba provided vehicles on a consignment basis. Defendant Dealer Services Corporation (DSC) is a finance company that financed CASL's inventory under a written promissory note and had a perfected security interest in, among other things, CASL's inventory of vehicles.
When CASL went out of business and Fariba attempted to retrieve his vehicles, he discovered 14 of his vehicles were being repossessed by DSC. When DSC refused to return the vehicles, Fariba sued. At trial, the court dismissed Fariba's fraud and breach of contract causes of action, as well as his claim for punitive damages. The case went to the jury solely on the issue of whoFariba or DSChad priority under the California Uniform Commercial Code as to the vehicles.
The special verdict form asked the jury to answer two questions: (1) Did DSC have actual knowledge that CASL was substantially engaged in the sale of vehicles belonging to others; and (2) who had possession of the 14 vehicles at issue in the dispute. The jury answered "yes" to the first question and "Brian Fariba" to the second. The court entered judgment in Fariba's favor, awarding possession of the vehicles and $32,500 in damages.
DSC appeals, asserting (1) the court erroneously instructed the jury that Fariba's interest in his consigned vehicles had priority over that of DSC if DSC had "actual knowledge" CASL was substantially engaged in selling *160 vehicles that belonged to others; (2) there is no substantial evidence DSC had actual knowledge CASL was substantially engaged in selling vehicles that belonged to others; (3) Fariba's security interest was subordinate to that of DSC because he did not file a UCC-1 financing statement; (4) the court erred in instructing the jury on the issue of possession; and (5) there is no substantial evidence to support the jury's finding Fariba had possession of the vehicles.
Fariba also appeals, asserting the court erred by granting a directed verdict on his fraud and breach of contract claims, as well as on his claim for punitive damages.
We conclude that (1) the court properly instructed the jury that Fariba's interest in his consigned vehicles was superior to that of DSC if DSC had actual knowledge CASL was substantially engaged in selling vehicles that belonged to others; and (2) there is substantial evidence DSC had such knowledge. We also conclude the court properly instructed the jury on the definition of possession, and there is substantial evidence to support the jury's finding Fariba had possession of the vehicles. We further conclude that, because we are upholding the jury's verdict in favor of Fariba, we need not address whether the court erred in granting a directed verdict on Fariba's fraud and breach of contract claims. Finally, we conclude the court did not err in granting a directed verdict on Fariba's claim for punitive damages.
FACTUAL AND PROCEDURAL BACKGROUND
A. CASL
CASL was a used car retailer located on the parking lot of the San Diego Sports Arena. A substantial portion of CASL's inventory consisted of vehicles owned by others who delivered them to CASL on a consignment basis. The owners would get paid by CASL only when the vehicles were sold.
B. Fariba's Relationship with CASL
Beginning in 2005, Fariba entered into a relationship with CASL whereby Fariba delivered vehicles to CASL. They agreed on a price for the vehicle and, when CASL sold the vehicle, Fariba received an established price for the vehicle. Fariba held title to the vehicles and released title to CASL only upon receiving payment for the vehicles.
From September 2005 forward, Fariba supplied approximately 45 percent of CASL's inventory. Fariba, however, did not file a UCC-1 financing statement to perfect his interest in the vehicles.
*161 C. DSC's Relationship with CASL
In October 2005 CASL executed a promissory note in favor of DSC, a used car dealer finance company, in the amount of $200,000. DSC secured the loan to CASL with a security interest in CASL's entire inventory, including after-acquired inventory. DSC filed a UCC-1 financing statement covering its security interest in the inventory.
D. DSC's Knowledge of CASL's Consignment Sales
CASL was introduced to DSC by Marina Colli, who worked for Automotive Finance Company (AFC), CASL's then finance company. When Colli left AFC to work for DSC, she convinced CASL to close their account with AFC and deal with DSC. Colli was DSC's manager in San Diego County and was in charge of the CASL account.
Fariba testified that Colli told him that she always knew that CASL was substantially engaged in selling goods that belonged to others. Colli told Fariba that she acquired the information from Rex Garwick and Carmine Malanga, the owners of CASL, while she worked with AFC, prior to the time CASL entered into the loan agreement with DSC.
John Denardo, CASL's car lot manager, testified that prior to DSC's loan to CASL he saw Colli on CASL's lot inspecting the vehicle inventory. Additionally, DSC sent people to CASL's lot on a monthly basis. Denardo also testified that he had conversations with Colli about the fact that CASL was selling vehicles on consignment. While Denardo testified that he was not certain when the conversation occurred, he said that it occurred sometime between 2002 or 2003 and July 2006.
Garwick testified that prior to CASL's obtaining the loan from DSC, Colli knew that CASL was substantially engaged in selling vehicles that belonged to others. Specifically, he testified that Colli was at CASL's lot "numerous times from the beginning of 2005 until the middle of 2006" and that CASL worked with Colli for a few years prior to October 2005. He testified that when CASL obtained the loan from DSC, Colli was "well aware" of the nature of their business. When Colli performed inventory audits at CASL, she would ask him to distinguish which were owned by CASL and which were on consignment.
E. CASL Defaults on Note
In July 2006 CASL went out of business and defaulted on its note with DSC. At the time, Fariba had approximately 45 vehicles on CASL's lot. On *162 or around July 10, Fariba terminated his relationship with CASL and demanded his vehicles back. The owner of CASL agreed and told Fariba he could retrieve his vehicles at any time.
Fariba arranged for drivers and began retrieving his vehicles from CASL. After moving approximately 31 of the vehicles, Fariba's drivers returned to CASL's lot and found tow trucks working on behalf of DSC repossessing CASL's inventory. One of Fariba's drivers called Fariba and told him what was happening. Fariba talked to Colli at DSC. According to Fariba, they agreed DSC would be allowed to take Fariba's remaining vehicles and, when DSC verified that Fariba held title to the vehicles, they would be returned to Fariba. Fariba agreed to give DSC the keys to the vehicles so DSC would not have to make new keys for the cars it was repossessing. According to Fariba, later in the day Colli and another representative of DSC, Floyd Smith, again confirmed the arrangement by phone. In total, DSC took 14 of Fariba's vehicles, each of which Fariba held title to.
The next day, however, DSC refused to return the 14 vehicles to Fariba. When Fariba spoke with Colli and Smith, Fariba alleges they told him they were instructed to tell him the day before that he would get his vehicles back even though DSC had no intention of returning the vehicles. According to Fariba, he also spoke with John Wick, DSC's corporate counsel, who told him DSC "conned" and "tricked" Fariba in order to get the vehicles from him.
F. The Lawsuit
In July 2006 Fariba filed suit against DSC and others. He alleged claims against DSC for breach of contract, goods delivered, fraud, wrongful possession, unfair business practices, quiet title, and declaratory relief. The breach of contract and fraud claims, as well as the claim for punitive damages, were based upon Fariba's conversation with Colli and his agreement to give her the keys to the vehicles in exchange for her (and DSC's) alleged agreement to return them if he could prove ownership.
G. The Trial
1. Motion in limine
Prior to trial, DSC filed a motion in limine seeking to exclude any evidence DSC knew that CASL was substantially engaged in selling vehicles that belonged to others. Fariba opposed the motion, arguing the information was *163 relevant to proving who had superior title to the vehicles under the California Uniform Commercial Code. The court denied the motion, noting that while there was no California authority on point, cases from other jurisdictions had held that a creditor's actual knowledge of the fact the business dealt in consigned goods made the consignor's interest prevail over that of the creditor. Therefore, the court found evidence of DSC's actual knowledge relevant.
2. Motion for directed verdict
At the close of presentation of Fariba's case-in-chief, DSC moved for a directed verdict on Fariba's breach of contract, fraud and punitive damages claims. The court granted the motion. In doing so, the court found that by the time Fariba had his alleged conversation with Colli, the cars were already controlled by DSC, in a separate parking lot, and the only thing that changed hands were the keys, to avoid DSC having to rekey the vehicles. The court found that "this is fundamentally a commercial dispute between two claimants to the same physical property .... The court does not find that there issufficient evidence of a legally cognizable contract entered into between and by the parties that was supported by consideration." The court further found there were not "demonstrable damages as a result of this because the parties would have been in exactly the same place ... regardless of who had physical possession of the cars." The court noted that "[t]his case is fundamentally and solely about who had priority under the California [Uniform] Commercial Code with respect to those cars ...." The court ruled that the case would go to the jury solely on the issue of who had priority under the California Uniform Commercial Code.
3. Jury instructions
Fariba sought to impose liability on DSC under a theory it had knowledge CASL was substantially engaged in selling vehicles that belonged to others. In this regard, the court instructed the jury in special jury instruction No. 4, as follows: "Brian Fariba holds a superior interest in the 14 vehicles, if Brian Fariba proves, by a preponderance of the evidence, that Dealer Services Corporation had actual knowledge in October of 2005 that California Auto Sales and Leasing was substantially engaged in selling of the goods of others." In special jury instruction No. 5, the court instructed the jury, "California Auto Sales and Leasing is considered to be substantially engaged in selling vehicles that belong to others if 20 percent or more of its inventory belonged to others."
*164 As an alternative theory of liability, Fariba sought to prove that at the time DSC sought to repossess his vehicles, he legally had "possession" of them, rendering DSC's rights subordinate to his. On the issue of possession of the vehicles, the court instructed the jury, "Possession as between competing claimants to vehicles in inventory at the premises of a vendor is accomplished when one with the right to possess accomplishes actual custody and control of the vehicle under all of the circumstances demonstrated by the evidence." (Italics added.)
DSC objected to this instruction, arguing the court should have instructed the jury possession is accomplished by "physical" possession and control, instead of "actual" possession and control.
4. Special verdict
In the special verdict form the jury was asked to answer two questions:
"Question 1: Did Dealer Services Corporation have actual knowledge in October 2005 that California Auto Sales and Leasing was substantially engaged in the sale of vehicles that belonged to others?"
"Question 2: Who obtained possession of the fourteen (14) vehicles from California Sales and Leasing?"
The jury answered "yes" to question No.1 and "Brian Fariba" to question No. 2.
The court thereafter awarded Fariba possession of the 14 vehicles as well as a stipulated amount of $32,500 for diminution in value of the vehicles.
DISCUSSION
I. DSC'S APPEAL
A. Court's Instruction on Actual Knowledge
1. Standard of review
We review the court's alleged error in instructing the jury de novo. (Sander/Moses Productions, Inc. v. NBC Studios, Inc. (2006) 142 Cal. App. 4th 1086, 1094 [48 Cal. Rptr. 3d 525].)
2. "General knowledge" exception to creditors' perfected security interest in consigned goods
(1) Case law defines a consignment sale as "one in which the merchant takes possession of goods and holds them for sale with the obligation to pay *165 the owner for the goods from the proceeds of a sale by the merchant. If the merchant does not sell the goods the merchant may return the goods to the owner without obligation. [Citation.] In a consignment sale transaction, title to the goods generally remains with the original owner." (Bank of California v. Thornton-Blue Pacific, Inc. (1997) 53 Cal. App. 4th 841, 847 [62 Cal. Rptr. 2d 90].)
To analyze Fariba's rights, we turn to section 9319, which sets forth guidelines for determining the rights of consignees with respect to creditors of the consignee: "(a) Except as otherwise provided in subdivision (b), for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer. [¶] (b) For purposes of determining the rights of a creditor of a consignee, law other than this division determines the rights and title of a consignee while goods are in the consignee's possession if, under this chapter, a perfected security interest held by the consignor would have priority over the rights of the creditor." (Italics added.)
The official comments to section 9319, subdivision (a) state: "[F]or purposes of determining the rights of certain third parties, the consignee is deemed to acquire all rights and title that the consignor had, if the consignor's security interest is unperfected. The consignee acquires these rights even though, as between the parties, it purchases a limited interest in the goods (as would be the case in a true consignment, under which the consignee acquires only the interest of a bailee). As a consequence of this section, creditors of the consignee can acquire judicial liens and security interests in the goods." (Official Comments on U. Com. Code, 23B pt. 2 West's Ann. Cal. U. Com. Code (2002 ed.) foll. § 9319, p. 364, italics added.)
However, section 9102, subdivision (a)(20)(A)(iii) provides a transaction is not deemed a consignment subjecting the consignor's goods to the claims of the consignee's creditors if the consignee is "generally known" by its creditors to be substantially engaged in selling the goods of others: "(20) `Consignment' means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and all of the following conditions are satisfied: [¶] (A) The merchant satisfies all of the following conditions: [¶] (i) He or she deals in goods of that kind under a name other than the name of the person making delivery. [¶] (ii) He or she is not an auctioneer. [¶] (iii) He or she is not generally known by its creditors to be substantially engaged in selling the goods of others." (Italics added.)
*166 (2) Thus, "[a] consignor may prevent the application of ... [Uniform Commercial Code[2]] §§ 9-102(a)(20) & 9-319(a) if it qualifies for one of the two exceptions provided under California law. [Citations.] ... The consignor must either have (1) filed a UCC-1 financing statement as required under [Uniform Commercial Code] Article 9 or (2) prove that the deliveree is generally known by his creditors to be substantially engaged in selling the goods of others. [Citations.] If either of these notice requirements of [Uniform Commercial Code] Article 2 are met, then [Uniform Commercial Code] ... §§ 9-102(a)(20) & 9-319(a) will not apply and the consignee's creditors may not reach the consigned goods in the consignee's possession." (In re Valley Media, Inc. (Bankr. D.Del. 2002) 279 B.R. 105, 123, fn. omitted [applying California law].)[3]
Here, however, Fariba did not attempt to prove at trial that it was "generally known" by CASL's creditors that it was substantially engaged in selling the goods of others. Rather, Fariba sought to prove, and the jury found, that DSC had actual knowledge CASL was substantially engaged in selling the property of others. Thus, we are presented with an issue of first impression in California: Does actual knowledge by a creditor with a perfected security interest in the inventory of a business that the business was substantially engaged in selling goods of others, i.e., selling goods on a consignment basis, defeat the right of that creditor in the consigned goods? We hold that it does, and the court therefore did not err in instructing the jury on the question of DSC's actual knowledge.
3. Policy underlying Uniform Commercial Code consignment law supports "actual knowledge" exception
One problem with consignment arrangements is they may create secret liens where a creditor of the consignee does not know the consignee does not own the consigned merchandise. (Escrow Connection v. Haas (1987) 189 Cal. App. 3d 1640, 1644 [235 Cal. Rptr. 200] (Haas).) As the Court of Appeal explained in Haas: "Before the introduction of the Uniform Commercial Code, even though the interest of a consignor was commonly viewed as a `secret lien against creditors ...,' a consignor could nevertheless retrieve the consigned goods in a contest with the consignee's creditors. The draftsmen of *167 the Uniform Commercial Code effectively did away with the `secret lien' by providing, where a consignment be intended for security, that the consignor must file a financing statement under article IX of the Uniform Commercial Code. The drafters also provided that all goods on consignmentwhether or not so placed to `secure' the consignorare subject to the claims of the consignee's creditors if the consignor fails to comply with the notice requirements of article II of the Uniform Commercial Code." (Haas, supra, at p. 1644, fn. omitted.) The "notice requirements" that exempt all consignors' goods from claims of creditors is now codified in section 9319, subdivision (a) and requires the consignor to either "(1) file a financing statement or (2) prove that the person conducting the business is generally known by his creditors to be substantially engaged in selling the goods of others on consignment." (Haas, at p. 1644, fn. 3, italics added.)
The official comment to former section 2326, subdivision (3), the predecessor to section 9319, subdivision (a), further explains the policy behind the notice exception to creditors' priority rights as against consignors: "Pursuant to the general polices of this Act which require good faith not only between the parties to the sales contract, but as against interested third parties, subsection (3) resolves all reasonable doubts as to the nature of the transaction in favor of the general creditors of the buyer.... A necessary exception is made where the buyer is known to be engaged primarily in selling the goods of others ... or the seller complies with the filing provisions of Article 9 as if his interest were a security interest.... The purpose of the exception is merely to limit the effect of the present subsection itself... to cases in which creditors of the buyer may reasonably be deemed to have been misled by the secret reservation." (Official Comments on U. Com. Code, 23A pt. 1 West's Ann. Cal. U. Com. Code (2002 ed.) foll. § 2326, p. 397, italics added.)
It follows from this authority that since the purpose of the notice exception is to "protect creditors from the `hidden' claim of the consignor, it should follow that a creditor of a consignee who has actual knowledge that the consignee is a consignee cannot claim the protection thereof." (3A Lawrence's Anderson on the Uniform Commercial Code (3d ed. 2009 supp.) Sales, § 2-326:97:97, italics added [interpreting U. Com. Code, § 2-326].)
Moreover, as will be seen, post, the weight of authority from other jurisdictions also holds that where a creditor has actual knowledge the consignee is substantially engaged in the sale of property belonging to others, the creditor's security interest does not have priority over the consignor's. We find this authority consistent with the policy underlying the Uniform *168 Commercial Code's notice exception, the language of the statute, and rules of statutory interpretation.
4. Out-of-state authority supports "actual knowledge" exception
In Belmont Internat., Inc. v. American Internat. Shoe Co. (1992) 313 Or. 112 [831 P.2d 15], a consignor asserted it had priority over the claims of the consignee's creditor, even though it had not filed a UCC-1 financing statement and had not shown it was generally known to creditors that the consignee was substantially engaged in selling goods belonging to others, because the creditor had actual knowledge the relationship was one of consignor and consignee. (Id., 831 P.2d at pp. 18-19.) The Oregon Supreme Court agreed, holding that a narrow construction of the notice exception would "negate the policy" behind Oregon's version of Uniform Commercial Code section 2-326. (Belmont Internat., Inc., supra, at p. 19.) Because the policy of Uniform Commercial Code section 2-326 "is to protect the creditors of a consignee from the consignor's hidden liens on the consignment goods," "[t]he assumption is that, `[w]here a secured creditor has knowledge of consignments, he will certainly not advance funds to the consignee based on the consignee's possession of the consigned property.' [Citation.]" (Belmont Internat., Inc., supra, 831 P.2d at p. 19.) Thus, "in a dispute between a consignor and a creditor of the consignee as to priority in the consigned goods, proof that the creditor actually knew of the consignment before becoming a creditor is sufficient ...." (Ibid.)
Several other cases have reached the same result. (See Eurpac Service v. Republic Acceptance Corp. (Colo.Ct.App. 2000) 37 P.3d 447, 450-451 (Eurpac); First National Bank v. Olsen (Minn.Ct.App. 1987) 403 N.W.2d 661 [under a Minnesota statute similar to § 9319, an exemption exists if the secured creditor had actual knowledge of the consignment]; GBS Meat Industry Pty. Ltd. v. Kress-Dobkin Co. (W.D.Pa. 1979) 474 F. Supp. 1357, 1362-1363 (GBS) [failure to permit an exception when a creditor has actual knowledge would contravene the intent of U. Com. Code, § 2-326 and "sanction intentional conversions of goods or proceeds"]; 3A Lawrence's Anderson on Uniform Commercial Code, supra, § 2-326:94 [noting that a creditor is estopped from making a claim under U. Com. Code, § 2-326(3) when the creditor in fact knew that the consignee was holding the goods in that capacity].)[4]
*169 As the Colorado Court of Appeals explained, "Failure to acknowledge an `actual knowledge' exception would lead to an absurd result. [Citation.] The effect of the literal language of the exception is to impute knowledge of the consignment arrangement to all creditors if the knowledge is `generally known.' In other words, a creditor is held to knowledge which he or she could reasonably have obtained because it was `generally known' by other creditors. It would be absurd to hold a creditor responsible for imputed knowledge but not hold the same creditor responsible for actual knowledge. [¶] We find the analysis employed by courts holding that actual knowledge establishes the exception of [Colorado Revised Statutes] § 4-2-326(3)(b) [(1999)] [Colorado's equivalent to § 9319 & Uniform Commercial Code § 2-326], more persuasive. This interpretation gives full effect to the purpose of the statute as explained in the official comments. [Citation.] It does not burden creditors with `secret liens' while providing limited protection to consignors who never intended to lose title to their property. It also avoids the result of giving greater weight to imputed knowledge than actual knowledge." (Eurpac, supra, 37 P.3d at pp. 450-451.)
(3) As the court in Matter of High-Line Aviation, Inc. (Bankr. N.D.Ga. 1992) 149 B.R. 730, 737 stated, "if a creditor knows that goods in a debtor's place of business are on consignment, the creditor is not misled by the presence of the consigned goods and its lien should not extend to them."
(4) We also conclude that construing the knowledge exception to include constructive knowledge, but not actual knowledge would lead to absurd results and we shall not interpret our Commercial Code in such a manner. (Commission on Peace Officer Standards & Training v. Superior Court (2007) 42 Cal. 4th 278, 290 [64 Cal. Rptr. 3d 661, 165 P.3d 462] [statutory interpretation must avoid absurd results the Legislature would not have intended].) In construing a statute, courts employ the rule "that a statute `must be given a reasonable and common sense interpretation consistent with the apparent purpose and intent of the lawmakers, practical rather than technical in nature, which upon application will result in wise policy rather than mischief or absurdity.'" (Welch v. Oakland Unified School Dist. (2001) 91 Cal. App. 4th 1421, 1428 [111 Cal. Rptr. 2d 374].)
(5) Construing sections 9313 and 9102 to provide an exception where creditors have actual knowledge of the consignment arrangement is consistent with the purpose of the statute: It does not burden creditors with secret liens and avoids the absurd result of giving greater weight to imputed knowledge than actual knowledge. Further, section 1103 provides that the California Uniform Commercial Code "shall be liberally construed and applied to promote its underlying purposes and policies." Thus, because construing the *170 applicable provisions to contain an "actual knowledge" exception is consistent with the underlying purpose behind such provisions, and a narrow, literal reading would lead to absurd results, the court did not err in instructing the jury and crafting a special verdict form that provided Fariba with priority of DSC's claims if Fariba could show DSC had actual knowledge CASL was substantially engaged in selling the goods of others.
5. Fariba's failure to file a UCC-1 financing statement
DSC asserts that as a matter of law it held a perfected security interest in the vehicles that had priority over Fariba's because it filed a UCC-1 financing statement and Fariba did not. This contention is unavailing.
As explained, ante, a consignor has priority over creditors' claims against a consignee if (1) the consignor has filed a UCC-1 financing statement or (2) the creditors have knowledge a substantial amount of the consignee's business is in selling consigned goods. (Haas, supra, 189 Cal.App.3d at p. 1644, fn. 3; In re Valley Media, Inc., supra, 279 B.R. at p. 123.) Thus, there is no merit to DSC's contention that Fariba could only have priority if it had filed a UCC-1 financing statement prior to DSC.
B. There Is Substantial Evidence of DSC's Actual Knowledge
DSC contends that even if its actual knowledge of the consignment arrangement defeats its claim to the consigned vehicles, the judgment must still be reversed as there is no substantial evidence it had actual knowledge of Fariba's consignment arrangement with CASL. We reject this contention.
1. Standard of review
Under the substantial evidence standard of review, we review the entire record to determine whether there is substantial evidence supporting the jury's factual determinations (Bowers v. Bernards (1984) 150 Cal. App. 3d 870, 873-874 [197 Cal. Rptr. 925]), viewing the evidence and resolving all evidentiary conflicts in favor of the prevailing party and indulging all reasonable inferences to uphold the judgment (Jordan v. City of Santa Barbara (1996) 46 Cal. App. 4th 1245, 1254-1255 [54 Cal. Rptr. 2d 340]). The issue is not whether there is evidence in the record to support a different finding, but whether there is some evidence that, if believed, would support the findings of the trier of fact. (Rupf v. Yan (2000) 85 Cal. App. 4th 411, 429-430, fn. 5 [102 Cal. Rptr. 2d 157].) Credibility is an issue of fact for the trier of fact to resolve *171 (Johnson v. Pratt & Whitney Canada, Inc., (1994) 28 Cal. App. 4th 613, 622 [34 Cal. Rptr. 2d 26]), and the testimony of a single witness, even a party, is sufficient to provide substantial evidence to support a factual finding (In re Marriage of Mix (1975) 14 Cal. 3d 604, 614 [122 Cal. Rptr. 79, 536 P.2d 479]).
2. Analysis
DSC does not contend there is no substantial evidence CASL was "substantially engaged" in selling vehicles that belonged to others. Rather, its only contention is there is no substantial evidence it had actual knowledge of Fariba's consignment arrangement with CASL. However, a review of the evidence in the light most favorable to the judgment shows substantial evidence supports the jury's verdict that it did.
As detailed, ante, Colli, DSC's manager in San Diego, had a preexisting relationship with CASL through her prior employer and knew the nature of CASL's business. Her actions were consistent with this knowledge, performing vehicle audits whereby she asked CASL to segregate the vehicles owned by CASL from those owned by others. Three separate witnesses testified to Colli's knowledge CASL was substantially engaged in selling vehicles owned by others.
DSC attempts to attack this evidence by calling the testimony "uncorroborated," "vague" and "not specific as to time." However, the testimony of a single witness, even a party, is sufficient to provide substantial evidence to support a factual finding. (In re Marriage of Mix, supra, 14 Cal.3d at p. 614.) Moreover, credibility determinations are for the trier of fact and we will not reweigh them on appeal. (Johnson v. Pratt & Whitney Canada, Inc., supra, 28 Cal.App.4th at p. 622.)
DSC also asserts that Fariba should have been required to show "evidence that DSC knew of Fariba or any specific Fariba consignment before becoming a creditor." In support of this argument, DSC points out that in GBS, supra, 474 F. Supp. 1357 and Eurpac, supra, 37 P.3d 447, the creditors had actual knowledge of the particular consignment arrangement and/or particular goods that were consigned. However, it is not important whether DSC knew the identities of each and every consignor or which particular vehicles were on consignment. What is important is that DSC had actual knowledge that CASL was substantially engaged in selling vehicles that belonged to others. "[I]f a creditor knows that goods in a debtor's place of business are on consignment, the creditor is not misled by the presence of the consigned *172 goods and its lien should not extend to them." (Matter of High-Line Aviation, Inc., supra, 149 B.R. at p. 737.) Moreover, based upon Colli's inventory audits, a jury could infer DSC had actual knowledge not only of CASL's business model, but also its arrangement with Fariba.
C. Court's Instruction on Possession
DSC asserts the court erred when it instructed the jury on who had possession of the 14 vehicles it seized because it failed to instruct the jury that to have possession one needs to have "physical" custody and control. This contention is unavailing.
1. Background
DSC asserted at trial that the jury should be instructed that a determination of whether Fariba or DSC had possession of the 14 vehicles DSC seized must be based upon who had "physical" custody and control of the vehicles. The court rejected this argument, instead instructing the jury, as discussed, ante, as follows: "Possession as between competing claimants to vehicles in inventory at the premises of a vendor is accomplished when one with the right to possess accomplishes actual custody and control of the vehicle under all of the circumstances demonstrated by the evidence." (Italics added.)
As we have also discussed, ante, the jury was given the following question on its special verdict form, "Who obtained possession of the fourteen (14) vehicles from California Sales and Leasing?" The jury answered the question, "Brian Fariba."
2. Analysis
Fariba's alternative basis for claiming a right to the 14 vehicles seized by DSC is based upon section 9319, subdivision (a), which provides: "[F]or purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer." (Italics added.)
It was Fariba's position that under section 9319, subdivision (a), DSC did not have the right to seize the 14 vehicles because they were already in the possession of Fariba, not CASL. DSC, by contrast, argued that it obtained possession of the vehicles prior to Fariba, and therefore it had the right to seize the vehicles.
*173 However, DSC provides no authority for the position that to have possession one must have "physical" custody and control. Accordingly, it has forfeited this claim on appeal. (Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal. 4th 352, 366, fn. 2 [87 Cal. Rptr. 2d 654, 981 P.2d 499].)
Moreover, DSC's proposed definition is unduly restrictive. Black's Law Dictionary defines possession as follows: "Having control over a thing with the intent to have and to exercise such control. [Citation.] The detention and control, or the manual or ideal custody, of anything which may be the subject of property, for one's use and enjoyment, either as owner or as the proprietor of a qualified right in it, and either held personally or by another who exercises it in one's place and name." (Black's Law Dict. (6th ed. 1990) p. 1163, cols. 1-2.)
(6) Thus, contrary to DSC's contention, to have possession of something, it is not necessary to have physical custody and control. It is sufficient to have actual custody and control, with the intent of exercising such control. The court did not err in instructing the jury on the issue of possession.
D. Sufficiency of the Evidence of Fariba's Possession
DSC asserts that even if the court properly instructed the jury on the definition of possession, the verdict must be reversed because there is no substantial evidence Fariba had possession of the 14 vehicles. This contention is unavailing.
The record reflects that on July 10, 2006, Fariba terminated his business relationship with CASL and revoked its authority to sell any of his vehicles. At that time, Fariba held title to all of his vehicles on CASL's lot. On the morning of July 13, Fariba's vehicles were separated from the remainder of CASL's inventory. That morning, CASL gave the keys to all of Fariba's vehicles to Fariba's personnel, making them inoperable without Fariba's consent. CASL's owners testified that CASL was divested of care, custody and control of the vehicles when CASL gave Fariba the keys. Control was with Fariba as nothing thereafter prevented him from driving the cars off CASL's lot. Indeed, Fariba's driver moved about 31 of his vehicles off CASL's lot prior to DSC seizing the 14 that are the subject of this litigation. From all this evidence, a jury could reasonably conclude that as of the morning of July 13, and before DSC seized 14 of his vehicles, Fariba had "actual custody and control," and thus, possession, of all of his vehicles.
*174 DSC focuses on the fact it actually obtained physical possession of the 14 vehicles by moving them off CASL's lot before Fariba could do so. However, the jury could reasonably conclude, based upon the evidence summarized above, that Fariba had custody and control of the vehicles first, and DSC took the vehicles from Fariba, not CASL.
II. FARIBA'S APPEAL
Fariba asserts the court erred in granting DSC's motion for directed verdict on his claim for punitive damages and on his fraud and breach of contract counts. However, he also concedes that if we affirm the jury's verdict in this matter, we need not reach that portion of his appeal directed at the fraud and breach of contract causes of action as he was made whole by the damages awarded at trial.
We first conclude that the court did not err in granting a directed verdict on Fariba's punitive damages claim. Further, because we have upheld the jury verdict in this matter, we need not determine if the court erred in granting a directed verdict on his causes of action for fraud and breach of contract.
A. Punitive Damages
1. Standard of review
(7) "In ruling upon a defense motion for a directed verdict, the trial court is guided by the same standard used in evaluating a motion for a nonsuit." (Quinn v. City of Los Angeles (2000) 84 Cal. App. 4th 472, 479 [100 Cal. Rptr. 2d 914].) Thus, a directed verdict is properly entered when "`the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit a jury to find in his favor.'" (Id. at pp. 479-480.) "`"In determining whether plaintiff's evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded."'" (Id. at p. 480.) "A directed verdict is ... subjected to de novo appellate review" and "'"is in the nature of a demurrer to the evidence, and is governed by practically the same rules, and concedes as true the evidence on behalf of the adverse party, with all fair and reasonable inferences to be deduced therefrom."'" (Brassinga v. City of Mountain View (1998) 66 Cal. App. 4th 195, 210 [77 Cal. Rptr. 2d 660].)
2. Analysis
Civil Code section 3294, subdivision (a) provides: "In an action for the breach of an obligation not arising from contract, where it is proven by clear *175 and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant." (Italics added.)
Fraud in the context of punitive damages means "an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury." (Civ. Code, § 3294, subd. (c)(3), italics added.)
On appeal from the grant of a directed verdict on the claim for punitive damages we must affirm the trial court's order if "no reasonable jury could find plaintiff's evidence to be clear and convincing proof of malice, fraud or oppression." (Hoch v. Allied-Signal, Inc. (1994) 24 Cal. App. 4th 48, 60-61 [29 Cal. Rptr. 2d 615].)
Fariba's claim for punitive damages is based upon the allegation that Colli engaged in fraud in obtaining the keys to the vehicles DSC was in the process of repossessing. However, regardless of the means by which DSC obtained the keys to the vehicles, as the court noted, this was a commercial dispute between two parties, who both believed they were entitled to possession, based upon their competing interests in the vehicles. There is no clear and convincing evidence DSC knew Fariba's interest was superior to its own. Rather, as detailed, ante, resolution of this issue turned upon interpretation of the Uniform Commercial Code and proof that DSC had actual knowledge CASL was engaged in selling automobiles that belonged to others, an issue of first impression in California. Thus, there was no clear and convincing evidence DSC intended to deprive Fariba of his property, legal rights, or otherwise causing injury. The court did not err in granting DSC's motion for directed verdict on the punitive damages claim.
B. Fraud and Breach of Contract Claims
Fariba concedes that if we uphold the jury's verdict, he has been made whole by the compensatory damages awarded at trial, and we need not address his claim the court erred in granting a directed verdict on his causes of action for fraud and breach of contract. Accordingly, we decline to address these issues.
*176 DISPOSITION
The judgment is affirmed. Fariba shall recover his costs on appeal.
Benke, Acting P. J., and Haller, J., concurred.
NOTES
[1] All further statutory references are to the California Uniform Commercial Code unless otherwise specified.
[2] To distinguish it from the California Uniform Commercial Code, we refer to the national code as the Uniform Commercial Code.
[3] Case law from other jurisdictions applying our Commercial Code, the Uniform Commercial Code, or the uniform code of other states, is considered good authority in litigation arising under the California act. (Porter v. Gibson (1944) 25 Cal. 2d 506, 512 [154 P.2d 703]; 4 Witkin, Summary of Cal. Law (10th ed. 2005) Sales, § 10, p. 30.)
[4] One case has rejected the "actual notice" exception. (See In re State Street Auto Sales, Inc. (Bankr. D.Mass. 1988) 81 B.R. 215, 218-220). However, we find the reasoning of the overwhelming majority of jurisdictions finding such an exception persuasive.
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178 Cal. App. 4th 723 (2009)
RAY CORONA, SR., et al., Plaintiffs and Appellants,
v.
THE STATE OF CALIFORNIA et al., Defendants and Respondents.
No. E044951.
Court of Appeals of California, Fourth District, Division Two.
October 23, 2009.
*726 The Law Offices of John Burton and John Burton for Plaintiffs and Appellants.
Edmund G. Brown, Jr., Attorney General, James M. Schiavenza, Assistant Attorney General, Marsha S. Miller, Karen S. Darling and Donna M. Dean, Deputy Attorneys General, for Defendants and Respondents.
OPINION
RAMIREZ, P. J.
Plaintiffs and appellants Ray Corona, Sr., and his wife, Arlene Corona, appeal from the trial court's judgment dismissing their lawsuit after sustaining the demurrer of defendants and respondents State of California, Department of Consumer Affairs, and State Athletic Commission (collectively, the State). Specifically, the Coronas argue the trial court erred when it found that Government Code section 818.4,[1] which applies to discretionary decisions by public officials, applies here to immunize the State from liability. As discussed below, we conclude that California's State Athletic Commission (the Commission) has a mandatory duty to license and/or allow to participate in boxing matches only those boxers who present proof of a negative human immunodeficiency virus (HIV) test. Thus, the State can be held liable under section 815.6 for failing to carry out this duty and is not immune from liability under section 818.4.
STATEMENT OF FACTS[2] AND PROCEDURE
Ray Corona is a professional boxing referee licensed by the State of California. On June 3, 2005, he refereed a match to which he was assigned by the Commission. By letter dated June 9, 2005, the Commission's executive director informed Ray Corona that one of the boxers in the June 3, 2005, match "`was licensed and allowed to fight without having the results of the blood tests for detection of HIV.'" The fighter at some point did test positive for HIV. The letter also stated, "`you may have unwittingly been exposed to a transmittable blood-borne disease,'" "`the Commission strongly encourages you to be tested,'" and "`[y]ou should also think about what might happen if, before you receive your test results, you engage in activities in which you might transmit one of those diseases to someone else.'"
*727 The FAC alleges that "[l]ike most fights, this one involved numerous cuts and splashing of blood. During the week following the bout, plaintiffs engaged in their regular marital activities, including unprotected sexual intercourse."
After complying with the requirements of the Tort Claims Act (§ 810 et seq.), the Coronas filed the FAC on April 4, 2007. The complaint alleged two causes of action, for violation of a mandatory duty under section 815.6 and vicarious liability for the negligence of state employees, agents, etc., under sections 815.2, subdivision (a), 815.4 and 820, subdivision (a).
The State filed a demurrer to the FAC on May 3, 2007. The Coronas filed their points and authorities in opposition on May 16, 2007. The State replied to the Coronas' opposition on May 22, 2007.
At the hearing on the demurrer set for May 29, 2007, the court indicated its tentative ruling was to sustain the demurrer based on governmental immunity under section 818.4, but stated it wanted to more closely examine the issue. The court denied the Coronas' motion to file a supplemental memorandum.
At the continued hearing on June 21, 2007, the court confirmed its tentative ruling to sustain the demurrer. The court held that the State did have a mandatory duty to the public and the Coronas under Business and Professions Code section 18712, subdivision (a) to "appropriately license and regulate boxers." However, the court also held that the State's actions in sanctioning boxing matches are immune from liability under section 818.4 because they involved the issuance of a license, permit, approval or authorization. On December 3, 2007, the court entered an order sustaining the demurrer without leave to amend and dismissing the action. This appeal followed.
DISCUSSION
The Coronas argue that the State was not immune under section 818.4 because the Commission "did not have the authority to issue `a license, permit, approval, or authorization of the fight in question' without first obtaining a negative test for HIV/AIDS."
(1) Before determining whether the State was immune under section 818.4, we must first examine, as did the trial court, whether the Commission had a mandatory duty imposed by statute. This is because, under section 815, a governmental agency is not liable for injuries unless the liability is *728 specifically imposed by statute. "This section abolishes all common law or judicially declared forms of liability for public entities, except for such liability as may be required by the state or federal constitution, e.g., inverse condemnation. In the absence of a constitutional requirement, public entities may be held liable only if a statute (not including a charter provision, ordinance or regulation) is found declaring them to be liable. . . . [¶] . . . [¶] . . . [T]here is no liability in the absence of a statute declaring such liability." (Legis. Com. com., 32 West's Ann. Gov. Code (1995 ed.) foll. § 815, p. 167.)
1. Section 815.6Mandatory Duty
(2) Section 815.6 further provides: "Where a public entity is under a mandatory duty imposed by an enactment that is designed to protect against the risk of a particular kind of injury, the public entity is liable for an injury of that kind proximately caused by its failure to discharge the duty unless the public entity establishes that it exercised reasonable diligence to discharge the duty." "[A]pplication of section 815.6 requires that the enactment at issue be obligatory, rather than merely discretionary or permissive, in its directions to the public entity; it must require, rather than merely authorize or permit, that a particular action be taken or not taken. [Citation.] It is not enough, moreover, that the public entity or officer have been under an obligation to perform a function if the function itself involves the exercise of discretion. [Citation.]" (Haggis v. City of Los Angeles (2000) 22 Cal. 4th 490, 498 [93 Cal. Rptr. 2d 327, 993 P.2d 983].) Whether an enactment is intended to impose a mandatory duty, as opposed to a mere obligation to perform a discretionary function, is a question of law for the court. (Id. at p. 499.)
Here, the statute in question provides, in relevant part, as follows: "[A]ny person applying for a license or the renewal of a license as a professional boxer . . . shall present documentary evidence satisfactory to the commission that the applicant has been administered a test, by a laboratory in the United States that possesses a certificate under the Clinical Laboratory Improvement Act (42 U.S.C. Sec. 263a), to detect . . . the human immunodeficiency virus (HIV)[,] . . . hepatitis C virus (HCV) and . . . hepatitis B virus (HBV) within 30 days prior to the date of the application and that the results of all three tests are negative. A negative report for all three tests shall also be required of a professional boxer . . . prior to competing in a match that will occur 180 days or more after the date of the tests submitted for the issuance or renewal of his or her license." (Bus. & Prof. Code, § 18712, subd. (a), italics added.)
(3) We read Business and Professions Code section 18712 as imposing a mandatory duty upon the Commission to require a boxer to provide a *729 negative HIV test from an approved laboratory before issuing the annual boxing license. The Commission must also require a negative test before allowing the boxer to participate in a match that takes place more than six months after the date of the previous negative test. Business and Professions Code section 18712 uses mandatory language when it provides that a boxer "shall present documentary evidence" of a negative HIV test. Business and Professions Code section 18712 again uses mandatory language when it provides that "[a] negative report for [HIV] shall also be required . . ." of a boxer prior to competing in a boxing match that will occur more than six months after the date of a previous HIV test. In addition, the statute simply does not grant the Commission any discretion to waive the HIV test requirement or to grant a license or allow a boxer to participate in a later match without providing a negative HIV test.
This is quite similar to the statute that was interpreted by our Supreme Court in Morris v. County of Marin (1977) 18 Cal. 3d 901 [136 Cal. Rptr. 251, 559 P.2d 606] (Morris). In Morris, the Legislature mandated in Labor Code section 3800 that counties require applicants for a building permit to have workers' compensation insurance. The statute provided that "[e]very county . . . which requires [a building permit] . . . shall require that each applicant for [such] permit" have on file a certificate of workers' compensation insurance. The court found that, in using this language, the Legislature "intended the filing of a `certificate of insurance' to constitute a condition precedent to the issuance of a building permit" and thus imposed a mandatory duty under section 815.6. (Morris, supra, at p. 907 & fn. 3, italics added.) In the same way, the Legislature clearly intended that the filing of a negative HIV test with the Commission be a condition precedent to the issuance of a boxing license or authorization to participate in a later boxing match. Just as counties had no discretion to issue a building permit unless the applicant provided a certificate of insurance, the Commission has no discretion to allow a boxer to box unless the boxer provides a negative HIV test.
The State understandably seeks to characterize the language in Business and Professions Code section 18712 as imposing a duty solely on the applicant to present negative HIV test results, rather than on the Commission to require them, before granting a boxing license or authorization to participate in a boxing match. This is because the statute is worded to focus on the actions of the applicant (an applicant "shall present documentary evidence" and "[a] negative report . . . shall also be required of a professional boxer . . .") rather than on the actions of the Commission. While we would prefer that the Legislature had used more active language, such as, "the Commission shall *730 require a negative report . . .," rather than the passive, "[a] negative report . . . shall also be required . . .," the only reasonable reading of Business and Professions Code section 18712 is that the Commission may not allow a boxer to box without submitting very specific test results, in a very specific form, at specific intervals.
The State cites to a number of cases as supporting its assertion that Business and Professions Code section 18712 is not specific enough (i.e., does not require "a specific act under specified conditions") to impose a mandatory duty under Government Code section 815.6. We examine each of these cases in turn to determine whether they can provide guidance here. The State first cites to Quackenbush v. Superior Court (1997) 57 Cal. App. 4th 660 [67 Cal. Rptr. 2d 300] to imply that no mandatory duty exists where the public entity merely reviews the actions of the licensee. However, in that case, the Legislature charged the Insurance Commissioner with the duty to "`whenever it appears necessary, examine the business and affairs of a [licensee] company. . . .'" (Id. at p. 663.) This instruction from the Legislature leaves much discretion to the Insurance Commissioner as to whether and when to inspect a business and how to go about performing that inspection. In contrast, the Legislature has, in effect, prohibited the Commission from licensing a boxer who does not present specified test results, which themselves must be issued by a laboratory that is certified under the Clinical Laboratories Improvement Act of 1967 (42 U.S.C. § 263a), as spelled out in detail by the Legislature in Business and Professions Code section 18712. This is a far cry from the discretion given to the Insurance Commissioner generally to inspect the "business and affairs" of licensees "whenever it appears necessary."
In Gray v. State of California (1989) 207 Cal. App. 3d 151 [254 Cal. Rptr. 581], the family of a murdered sheriff's deputy sued the state Department of Justice for not discovering that the murderer was officially found to be "mentally ill" by another state when it reviewed his application to purchase a handgun. The statute at issue stated: "If the department determines that the purchaser is a person described in [Penal Code] Section 12021 . . . or Section 8100 or 8103 of the Welfare and Institutions Code, it shall immediately notify the dealer . . . of that fact." (Pen. Code, former § 12076, subd. (d)(3), fn. omitted.) The appellate court concluded that the Legislature did not impose upon the Department of Justice a mandatory duty to search out-of-state databases. This is because the statute did not detail the type of investigation that the Department of Justice must conduct before determining whether an applicant was eligible to purchase a handgun. This contrasts with *731 Business and Professions Code section 18712, which, again, is very explicit as to how the Commission is to determine a boxer's eligibility.
In MacDonald v. State of California (1991) 230 Cal. App. 3d 319 [281 Cal. Rptr. 317], the state could not be liable under section 815.6 when a daycare provider injured a child in her care, despite allegations that the state failed to properly inspect the daycare provider and investigate complaints against her in the course of its licensing activities. This is because, although the Legislature provided that site visitations "shall be required" prior to initial licensing, upon renewal of a license, and upon a complaint, the Legislature allowed the state to exercise discretion "in deciding what action to take, and when, to evaluate and assess a particular situation." (MacDonald v. State of California, supra, at p. 331.) In contrast, the Legislature did not grant such discretion to the Commission as to the time or manner in which it was to evaluate the eligibility of each boxer. Rather, the Legislature directed the Commission to determine at specified intervals whether the boxer could provide the specified test results. The Legislature did not give the Commission any discretion to license a boxer or allow a boxer to fight if the boxer does not provide the required test results in the correct form at the specified times.
The State cites to Brenneman v. State of California (1989) 208 Cal. App. 3d 812 [256 Cal. Rptr. 363] for the proposition that a mandatory duty cannot be implied or presumed, i.e., a mandatory duty to investigate does not impose a mandatory duty to take any particular action. In Brenneman, the "California Department of Corrections Parole Procedures Manual-Felon (Manual) . . . mandated an initial reassessment of [a] parolee's `risks and needs' between 75 and 105 days from the date of release." (Id. at p. 815.) A parolee murdered a young boy 111 days after being released on parole, and without having undergone the initial reassessment. The boy's parents sued the state, alleging, in part, that the manual imposed a mandatory duty upon the state, pursuant to section 815.6, to take action to prevent the murder. The appellate court disagreed, holding that, while the state did have a duty to perform the reassessment, which the court characterized as an investigation, this duty did not in turn trigger any duty to perform a specific action. In other words, once the state performed the reassessment, it retained discretion to decide what action to take as a result of the information gathered during the reassessment. This is in stark contrast to Business and Professions Code section 18712, which does not allow the Commission to license a boxer or allow a boxer to participate in a match if the boxer does not provide the required test results in the required form at the intervals specified in the statute.
*732 In Wood v. County of San Joaquin (2003) 111 Cal. App. 4th 960 [4 Cal. Rptr. 3d 340], a fisherman and his son were killed by a speeding motorboat. The surviving family attempted to establish that the Harbors and Navigation Code imposed a mandatory duty on the county where two statutes read together stated that the county "shall enforce" a five-mile-per-hour speed limit. The appellate court held that the county was not liable under section 815.6 because the county was merely charged with enforcing the speed limit rather than with itself complying with the speed limit. However, the appellate court itself distinguished this case from a line of cases, including Morris, where the public entity could be liable under section 815.6 for failing to comply with specific standards for conducting its duties to oversee an industry, where the standards were developed and clearly set forth by the Legislature. In contrast, the Legislature had not specified how the county "shall enforce" the speed limit, whether by placing physical barriers or speed limit signs, or by arresting violators. As discussed above, the standards set forth in Business and Professions Code section 18712 are similar in specificity to the statute discussed in Morris, much more so than to the standard set forth in Wood.
In sum, the cases the State cited in its brief concern enactments that are far less specific and give the government entity considerably more leeway as to how to implement them than either Business and Professions Code section 18712 or the workers' compensation/building permit statute in Morris. For this reason, we are not persuaded to alter our initial conclusion that Business and Professions Code section 18712 imposes a mandatory duty upon the Commission to refrain from sanctioning a boxer who does not provide a negative HIV test.
2. Section 818.4Licensing Immunity
Now that we have determined that Business and Professions Code section 18712 imposes a mandatory duty upon the Commission under Government Code section 815.6, we examine whether the Commission is nevertheless immune under Government Code section 818.4.
(4) Section 818.4 provides, in part: "A public entity is not liable for an injury caused by the issuance . . . of . . . any permit, license . . . or similar authorization where the public entity . . . is authorized by enactment to determine whether or not such authorization should be issued. . . ." Our courts have determined that this means the entity is immune if it (1) issued a permit, license or similar authorization, and (2) exercises discretion in determining whether to issue the permit, license or similar authorization. *733 (Sonoma Ag Art v. Department of Food & Agriculture (2004) 125 Cal. App. 4th 122, 126 [22 Cal. Rptr. 3d 468], citing Chaplis v. County of Monterey (1979) 97 Cal. App. 3d 249, 256 [158 Cal. Rptr. 395].) (5) We have already determined above that the Commission has a mandatory duty not to issue a boxing license or authorization to participate in a boxing match if the applicant cannot produce the specified proof of a negative HIV test. Thus, under the standard set forth in the cases cited immediately above, the State is not immune from liability under section 818.4.
(6) Contrary to the State's assertion in its respondent's brief that "licensing immunity . . . is absolute" even where the public entity has a mandatory duty to act, case law is clear that section 818.4 immunizes only discretionary decisions, not mandatory actions. "[G]iven a mandatory duty, the liability imposed by Government Code section 815.6 . . . takes precedence over the immunity provisions of Government Code section 818.4. . . ." (Slagle Constr. Co. v. County of Contra Costa (1977) 67 Cal. App. 3d 559, 562 [136 Cal. Rptr. 748], fns. omitted.) The immunity granted under section 818.4 was "intended to confer immunity only in connection with discretionary activities, and not in connection with mandatory duties that cannot be ignored." (Walt Rankin & Associates, Inc. v. City of Murrieta (2000) 84 Cal. App. 4th 605, 628 [101 Cal. Rptr. 2d 48].)
(7) The appellate court in Morris explained that the Legislature "has reached the basic policy decision that a `certificate of insurance' should be a mandatory prerequisite to the issuance of a building permit" (Morris, supra, 18 Cal.3d at p. 916) and thus there is no licensing immunity under the statute at issue there. Similarly, the Legislature in enacting Business and Professions Code section 18712 has reached the basic policy decision that a negative HIV test is a mandatory prerequisite to granting a boxing license or allowing a boxer to participate in a boxing match that takes place more than six months after a boxer was tested for HIV to obtain the license. The Commission has no discretion to issue a boxing license or authorize a boxer to participate in a match unless the boxer submits a negative HIV test. The Commission thus violated its mandatory duty when, as was alleged in the FAC, it granted the boxer in question a boxing license and allowed him to participate in the June 3, 2005, boxing match without submitting a negative HIV test. For this reason, the State is not entitled to immunity under section 818.4.
We find the State's remaining arguments to be without merit.
*734 DISPOSITION
The trial court's order sustaining the demurrer without leave to amend and its subsequent judgment of dismissal are reversed. The case is remanded to the trial court with orders to enter a new order overruling the demurrer. The State shall pay the Coronas' costs on appeal.
McKinster, J., and Miller, J., concurred.
NOTES
[1] All further statutory references are to the Government Code unless otherwise indicated.
[2] The statement of facts is taken exclusively from the first amended complaint (FAC) filed in the superior court on April 4, 2007.
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236 Ga. 777 (1976)
225 S.E.2d 320
KAYLOR
v.
KAYLOR et al.
30537.
Supreme Court of Georgia.
Submitted November 25, 1975.
Decided May 5, 1976.
*779 Crisp & Oxford, Henry L. Crisp, for appellant.
Smith & Jones, William E. Smith, for appellees.
GUNTER, Justice.
The widow and son of the testator are the executors of his estate under his will. They brought an action below for declaratory judgment in their capacity as executors against themselves as individuals. Under the terms of the will they, as individuals, take the entire estate of the deceased.
The action was obviously brought in the trial court and appealed to this court for the purpose of securing a judicial determination as to how the estate should be distributed between the widow and the son. Also, it is obvious that such a judicial determination is desired solely for estate tax purposes.
The will bequeathed and devised to the widow one-half of the estate, to be determined by a prescribed formula, "to be selected by her out of personal property." The rest of the estate went to the son as trustee for specified uses and purposes during the life of the widow and to the son in fee simple upon termination of the trust.
The problem was that the personal property of the estate was not of sufficient value to equal one-half of the estate as determined by the formula contained in the will. So the question was: Does the widow receive all of the personalty plus enough of the realty so that her part of the estate will equal one-half of it as determined by the formula contained in the will?
Paragraphs 6 and 7 of the complaint brought by the widow and son in their capacity as executors against themselves as individuals stated:
"6. Petitioners will show the court that they have construed the Will as a whole to divide `one-half' of the testator's estate to his wife, Mary Battle Kaylor, which `one-half' is the allowable marital deduction to the wife under the Internal Revenue Code.
"7. That a question has arisen regarding the language contained in paragraph 2 as the Internal Revenue Service has indicated it is limiting language in nature which would limit the marital deduction to satisfaction out of `personal property.'"
A mere reading of the complaint below shows clearly *778 that there is no justiciable controversy between the plaintiffs as executors and the defendants as individuals and beneficiaries under the will. The actual adverse party is the United States (Internal Revenue Service), and it is not a party or represented in this action.
Our declaratory judgment statutes provide that there must be an actual or justiciable controversy between adverse parties before they can be invoked. Code Ann. § 110-1101. When a complaint for declaratory judgment shows upon its face, as this one does, that there is no actual or justiciable controversy between adverse parties, a trial court does not have jurisdiction to render a declaratory judgment.
In Rowen v. Herring, 214 Ga. 370 (105 SE2d 29) (1958), this court said: "There must exist an actual controversy as to the questions arising out of the administration of the estate, or disputed questions necessitating a construction of the will." Pp. 373, 374.
In the case at bar the complaint shows that there is no actual or justiciable controversy between the plaintiffs as executors and the defendants as individuals. They are in agreement as to the construction of the will, and there is no other beneficiary or claimant under the will to contest their construction of it. The defendants as individuals did not even file responsive pleadings. They merely acknowledged service of the complaint for declaratory judgment and consented "for the court to enter its decree upon this matter without further notice."
The trial judge then, being assured that there was no controversy, entered a judgment construing the will as the plaintiff executors and the defendant beneficiaries wanted it construed.
An actual or justiciable controversy was not present in this alleged litigation, and the trial court was without jurisdiction to enter a judgment. This being so, the judgment must be set aside as nugatory.
The judgment below is vacated, but it is vacated without prejudice, that is, the vacation of the judgment shall not bar a new action stating an actual or a justiciable controversy between adverse parties.
Judgment vacated. All the Justices concur, except Jordan, J., who concurs in the judgment only.
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91 Ga. App. 103 (1954)
85 S.E.2d 159
McCULLOUGH
v.
STEPP.
35218.
Court of Appeals of Georgia.
Decided November 22, 1954.
*104 Haas, White, Douglas & Arnold, George A. Haas, for plaintiff in error.
McCord & Cooper, Wayne H. Fore, contra.
FELTON, C. J.
1. The indorsement in and of itself was not a qualified indorsement. Code § 14-409 provides: "A qualified indorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser's signature the words, `without recourse', or any words of similar import. . ." The words, "I hereby transfer my right to this note over to W. E. McCullough," are not words of similar import to "without recourse." Hurt v. Wiley, 18 Ga. App. 420 (2) (89 S.E. 494); 10 C. J. S. 703, § 214; 8 Am. Jur. 61, § 325; Fay v. White, 262 N.Y. 215 (186 N.E. 678); Britton's Handbook on the Law of Bills & Notes, p. 230.
2. In Georgia, indorsements may be special, in blank, restrictive, qualified, or conditional. Code § 14-404. A special indorsement specifies the person to whom, or to whose order, the instrument is to be payable, and the indorsement of such indorsee is necessary to the further negotiation of the instrument. An indorsement in blank specifies no indorsee, and an instrument indorsed in blank is payable to bearer and may be negotiated by delivery. Code § 14-405. In the instant case an indorsee was named and his indorsement was necessary to a further negotiation of the instrument. Therefore the indorsement here was a special indorsement. Chandler v. Smith, 147 Ga. 637, 638 (2, 3) (95 S.E. 223); Fay v. Witte, supra. The indorsement being a special indorsement in full, the defendant could not contradict the terms thereof and show that the indorsement was intended to be a qualified one, in the absence of fraud or mistake. Meador v. Dollar Savings Bank, 56 Ga. 605 (2); Odom Realty Co. v. Central Trust Co., 22 Ga. App. 711 (1) (97 S.E. 116). The only question presented in this case is the effect of the indorsement, and no questions of conditional delivery or the capacity of the indorser are involved.
The court erred in overruling the demurrer to the allegation in the answer set out above. Such error rendered all further proceedings in the case nugatory.
The motion for rehearing having been granted, on rehearing the judgment of affirmance previously entered in this case is *105 vacated, the original opinion is withdrawn, the judgment of the trial court is reversed, and the foregoing opinion is substituted for the original opinion filed herein. Quillian and Nichols, JJ., concur.
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236 Ga. 624 (1976)
225 S.E.2d 7
ATKINS
v.
THE STATE.
30964.
Supreme Court of Georgia.
Submitted March 22, 1976.
Decided April 6, 1976.
Richard S. Gault, for appellant.
C. B. Holcomb, District Attorney, Arthur K. Bolton, Attorney General, James L. Mackay, Staff Assistant Attorney General, for appellee.
NICHOLS, Chief Justice.
Donald Ray Atkins was indicted, in separate indictments, for the offenses of rape, and kidnapping and rape. The indictments were tried jointly and the defendant was convicted of both offenses and sentenced to life imprisonment on each charge, such sentences to run concurrently. A joint motion for new trial was filed and overruled and the present appeal filed.
The evidence authorized a finding that the defendant, who knew the victim slightly and who lived next door to the victim, waited until his wife was asleep and went to the victim's home at approximately 8:30 p. m., knocked on the door, and when the victim opened the door he forced his way in where he grabbed her around the *625 throat, took her clothes off, forced her into the bedroom and raped her. Thereafter, he forced her into a pick-up truck and drove to another section of the county where he again raped the victim.
Atkins admitted going to the victim's home on the night in question after his wife was asleep, but insists that he was there by invitation of the victim and that the sexual relations, both in the victim's home and later in the truck, were with her consent and by her invitation.
Other testimony was introduced showing that the victim had been physically abused. Also introduced in evidence was testimony of another alleged victim of the defendant. This witness testified as to the circumstances surrounding her alleged rape. This victim, like the victim in the case sub judice, knew the defendant slightly. In both cases the defendant placed his arm around the victim's neck, choking each one and in both cases a knife or other sharp object was used as a weapon. In both cases an arm-about-the-neck strangle hold was used by the appellant to choke the victim into being quiet and force the victim into submission. In both cases the appellant told the victim that she had better be quiet or he would kill her. In both cases the appellant removed the victim to a deserted location for the purpose of rape. In both cases, after the rape, the appellant returned the victim to the location where he first picked her up. In both cases some sort of conciliatory statement was made by the appellant to the victim after the rape. In both cases the victim was a person who knew the appellant. In both cases the clothes of the victim were completely removed. Both rapes occurred within a three-month period and in the same county.
The testimony relating to the rape which occurred approximately three months before those charged in the present indictments was admissible to show intent, motive, plan, scheme and bent of mind of the appellant. See Hunt v. State, 233 Ga. 329 (211 SE2d 288) (1974) and Thomas v. State, 234 Ga. 635, 636 (217 SE2d 152) (1975).
The jury was authorized to find the defendant guilty of the charges alleged in each indictment.
After the jury returned guilty verdicts on each indictment, the trial court directed that a life sentence be *626 imposed for the offense of kidnapping and rape. The jury was permitted to fix the sentence on the rape indictment. The crimes were committed in October, 1974 after the effective date of the Act of 1974 (Ga. L. 1974, p. 352) which provides for sentencing by the trial court in all cases except those where the death penalty may be imposed. Where, as in the present case, the death penalty was waived, the responsibility for determining sentence was the court's and not the jury's. Accordingly, the life sentence was the only sentence which could be imposed for the offense of kidnapping with bodily injury (Henderson v. State, 227 Ga. 68 (179 SE2d 76) (1970); Allen v. State, 233 Ga. 200 (210 SE2d 680) (1974)) (Code § 26-1311), and any error in directing the jury to enter such sentence was harmless.
Inasmuch as the trial court, and not the jury, should have determined the sentence on the separate indictment for rape, this sentence must be vacated and the case remanded for the trial court to enter a sentence on the rape conviction.
Judgment affirmed in part and reversed in part. All the Justices concur, except Gunter, J., who concurs in the judgment only.
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226 S.C. 525 (1955)
85 S.E.2d 863
THE STATE, Respondent,
v.
R.C. WILLIAMS, Appellant.
16968
Supreme Court of South Carolina.
February 16, 1955.
Messrs. W.T. Bolt, Paul Culbertson, and Marshall Abercrombie, of Laurens, for Appellant.
*526 William T. Jones, Esq., Solicitor, of Greenwood, for Respondent.
February 16, 1955.
BAKER, Chief Justice.
At the November (1953) term of the Court of General Sessions for Laurens County, the defendant-appellant was tried on an indictment charging him with the murder of Eugene Davenport. The trial resulted in his conviction of murder, without recommendation to mercy, and he was duly sentenced to suffer death by electrocution.
The appellant was on the evening of the shooting, October 21, 1953 (the deceased dying two days later), serving a sentence on the Laurens County chain gang, and was locked up for the night with all the other prisoners at this camp, with the exception of the cook, in a building known as the "stockade" or "bull pen." There were three white guards, all of whom were referred to as "Captain," and whose names were Eugene Davenport, J.W. Elmore and W.I. Elledge. The shot fired and which killed Mr. Davenport was fired from the inside of the stockade or bull pen from the pistol of guard Elmore, either during the process of the appellant taking the pistol from Elmore, or immediately thereafter. A controversial issue in the case was whether the firing of this bullet was accidental or intentional, the appellant admitting that he was in the virtual possession of the pistol when it was fired.
The three guards named above were on duty that night, and were in a house used by them within a short distance from the stockade. The prisoners in the stockade were engaged in holding a "kangaroo court," and administering punishment to a new prisoner. Sufficient tumult or noise was created thereby to cause the guards to send word by the cook of the camp, who was also serving a sentence but who did not sleep in the stockade with the other prisoners, *527 for them to quiet down. When the cook reached the stockade, the appellant was engaged in administering the last of the punishment which the "kangaroo court" had decreed to be administered, and he and the said cook got into a heated argument. During this argument, according to the appellant, the following occurred:
"Q. After you gave him the lick what happened? A. Just as I hitting the last lick Johnny come to the window.
Q. Who was that? A. Johnny Gary.
Q. The cook? A. Yes, sir.
Q. All right. A. He came to the window and he hollered in there. He didn't holler in there to nobody but me. He said, `Junior, Junior.' I said, 'What?' He said, `Captain Jud said stop whipping that boy.' I done told Johnny, `You ain't no boss man. You know that. You're a prisoner just like us. You go back and tell Captain Jud that he the boss man. We get him to tell us what to do and what not to do.' That's what I told him.
Q. Did you send any message to any of the Captains cursing them or anything? A. No, sir, I didn't cuss them.
Q. Did you cuss at all while talking to him? A. He said, 'Didn't matter a damn with him.' I said, 'Didn't matter a damn with me.' I said, `Get away from that window.' And I got the bottle and just stuck the bottle in my hip pocket. * * *"
The cook (John Henry Gary) testified in part as follows:
"Q. John, do you remember the 21st day of October, 1953? A. Yes, sir.
Q. Did you have occasion to see the defendant that day? A. Yes, sir, yes, sir.
Q. Were you out there near the bull-pen? A. I was standing in the back door at sun-down, just about dusk-dark.
Q. Did you go out there that way at all? A. Not until Captains give me orders to go out.
*528 Q. Did you hear any noise or any ruckus or anything out there? A. Heard the noise out there, beating on something another out there.
Q. Beating on something out there? A. Yes, sir, I didn't see it right at that time. After I goes out there.
Q. Did you go out there to go in the place? A. No, sir.
Q. Did the Captains send you out there to go in the place? A. No, sir, he said go to the window.
Q. To do what? A. Quit whipping that man.
Q. Did you go out there? A. Yes, sir.
Q. What was going on? A. A couple of them had him aholding him and had him stretched out like you skin a rabbit.
Q. Who had what? A. This man he was beating.
Q. Who was beating him? A.R.C. was beating him.
Q. Beating on whom? A. Johnny Harris I think they call him. I don't know the name.
Q. Was he an old or new prisoner? A. A new one.
Q. Any other new ones before this happened or was he the only one? A. Slip my memory about that. I couldn't tell you.
Q. Had him stretched out where in there? A. A little aisle go down through the bull-pen. They had him up over the floor.
Q. They had him up over the floor? A. Yes, sir. He wasn't on the floor. They had him up just off the floor.
Q. Which was turned up, his stomach or his backside? A. His stomach down and his backside up.
Q. His stomach down and his backside up? A. That's right.
Q. He have on his clothes or not? A. Yes, sir, had his clothes on.
Q. Had his clothes on? A. Yes, sir.
Q. What did you say R.C. Williams was doing? A.R. C. had a strop. He was beating him.
Q. Where? A. Across the hip.
Q. Right across here? (Indicating.) A. Yes, sir.
*529 Q. What did you say? A. I told him, 'R.C., Captain Jud said break it up, don't hit that man no other lick.' He said
Q. What did he say? A. He said, `Damn what the captain say. You ain't no boss.' I said, `I'm only giving you what he said.' He said, `God damn what the captain said. You tell them that I said that.'
Q. `God damn what the captain said.' A. `Tell them I said that.' I walked over from the window. He said, 'You son-of-a-bitch you.'
Q. Who is that talking all that time? A.R.C., R.C. Williams.
Q. You mean the defendant in this case? A. Yes, sir.
Q. Go ahead. A. I asked him, `If you think I'm scared to tell the boss? He said, `Go tell him, you son-of-a-bitch. I'll kill you. I'll get you in the morning.'
Q. Go tell the son-of-a-bitch? A. He said, "I'll get you in the morning.'
Q. What else? A. `If you open this door, I'll kill you now.'
* * *
A. I went on in the house and told the captains what he said.
Q. What did you all do? A. They said, 'We'll go out and talk with him and see what's wrong with him.'"
It is presumed that the cook told the guards his version of the message from the appellant. Whereupon all three of the guards, accompanied by the cook, went out to the "stockade" and "Captain Jud" Elmore entered same, leaving the other two guards on the outside, although the deceased stood in or immediately in front of the open door. It was while the guard, Elmore, and the appellant were talking that appellant wrested such guard's pistol from him, and during such tussle, or immediately following and when the appellant was partially or wholly in the possession of the pistol that it was fired, the bullet then fired being the one to strike Captain Davenport, resulting in his death.
*530 It will be observed from the foregoing that the only witnesses to the shooting of Captain Davenport were prisoners who were serving time at this Laurens County chain gang camp, and the other two guards, employees of said county, and the record discloses that at the time of the trial of the appellant were still employed in the same capacity.
Upon the completion of the selection of the jury to try the appellant, his counsel made a motion for the sequestration of the witnesses for the prosecution. Without any inquiry of any description, the trial Judge promptly refused the motion, tersely stating: "I don't see any necessity for that, Gentlemen. All right, bring the jury in."
The rule adopted in South Carolina in reference to the sequestration of witnesses is excellently stated in the case of State v. O'Neal, 210 S.C. 305, 312, 313, 42 S.E. (2d) 523, 526, as follows:
"The granting or refusing of a motion for separation or sequestration of witnesses is within the sound discretion of the trial judge. It is within the power of the trial court to exclude witnesses from the court room during the trial, and to direct that they shall be examined out of the hearing of one another, or shall be 'put under the rule,' as it is frequently termed. 23 C.J.S., Criminal Law, § 1010, p. 377.
"While an order excluding witnesses is as a matter of fact rarely withheld if it is applied for by either party in good faith, as a general rule the party is not entitled to an order of exclusion as a matter of right and the motion may be refused if the court in the exercise of a sound discretion does not deem that there are sufficient grounds therefor."
Not knowing any of the circumstances surrounding the case, the trial Judge cannot be said to have exercised the sound discretion contemplated by the governing law as above quoted for the simple reason that he had nothing before him on which to bottom his opinion, and exercise his discretion.
*531 It would have been obvious to anyone acquainted with the facts of this case, as disclosed by the record herein, why the motion was made, and the sound reason why it should have been granted, especially where the defendant's life was at stake. The status of the prisoner-witnesses was such that they could ill afford to freely and voluntarily truthfully testify as to what they heard and observed at the time Captain Davenport so unfortunately met death and shortly before. These prisoners were bound to have hesitated in directly contradicting the guards' testimony when they had to continue the service of their sentences under these guards, and especially when the guard, Elmore, testified in effect that when he pulled out his pistol he didn't know whether he would have shot the defendant if the defendant had not hit him with a bottle and taken his pistol from him. Again, in two instances, while Elmore was testifying first, on direct examination, he stated that he had never taken the defendant on a job with him, and immediately following this testimony, stated that he had occasion to correct the defendant when the defendant refused to work, and walked up to him and told him. "I don't aim to hit another lick." at which time this witness told the defendant he would kill him right then; and again on cross-examination when counsel asked him, "You all just put him (the cook) in charge of all of them," and he replied, "We didn't no such damn thing." Undoubtedly the trial Judge did not hear the witness' answer since he did not at least sternly reprove him.
We think it is clear that the trial Judge, under the circumstances hereinbefore related, committed an abuse of discretion, which means an error of law, in failing to grant appellant's motion for the segregation of the witnesses, he being charged with a crime for which, if convicted, the punishment was death. In this connection, see 53 Am. Jur., Trial, Sec. 31.
We find it unnecessary to make reference to the other exceptions.
Reversed and remanded for a new trial.
*532 TAYLOR, J., concurs.
STUKES, OXNER, and LEGGE, J.J., concur in result.
OXNER, Justice (concurring).
While a few courts adopt the view that sequestration of witnesses is demandable as of right, in most jurisdictions the question is left to the discretion of the trial judge, subject to review and reversal upon a showing of abuse of discretion. See annotation 32 A.L.R. (2d), beginning on page 358. The majority rule is followed in South Carolina. State v. O'Neal, 210 S.C. 305, 42 S.E. (2d) 523; State v. Ferguson, 221 S.C. 300, 70 S.E. (2d) 355. A motion for sequestration should rarely be denied in capital and other serious criminal cases. Huffman v. Commonwealth, 185 Va. 524, 39 S.E. (2d) 291. Such motion, however, "should be specific and be supported by some reason." Commonwealth v. Turner, 371 Pa. 417, 88 A. (2d) 915, 921, 32 A.L.R. (2d) 346.
I agree that under the exceptional circumstances presented in the instant case, the refusal of appellant's motion was an abuse of discretion and constitutes reversible error. While counsel should have stated some reason for their motion or made some showing as to a need for sequestration of the witnesses, a failure to do so will not be permitted to prejudice an accused in a case involving the death penalty.
STUKES and LEGGE, JJ., concur.
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226 S.C. 403 (1955)
85 S.E.2d 576
HENRY LEGETTE, JR., by g/a/l and WORTHIE NEWELL, Adm'r, Respondents,
v.
EARL R. SMITH, Appellant.
16951
Supreme Court of South Carolina.
January 12, 1955.
*404 *405 J. Malcolm McLendon, Esq., of Marion, for Appellant.
*406 James B. Dixon, Esq., of Marion, for Respondents.
January 12, 1955.
LEGGE, Justice.
On May 9, 1951, Edna N. Smith was shot and killed by her husband, Earl L. Smith. This action was brought by Henry Legette, Jr., her son by a former marriage, and Worthie Newell, as administrator of her estate, the complaint alleging that the homicide was unlawful, wrongful, intentional, felonious and malicious; that she had died intestate, survived by her said son and her said husband; that in consequence of the unlawful homicide, whether murder or voluntary manslaughter, her husband was debarred of inheritance from her, and therefore all of her estate, after payment of debts and proper charges against the same, became the property of her said son; and praying for a declaratory judgment to that effect. Earl L. Smith answered, denying that he had unlawfully killed his wife, claiming his right to inherit as one of her heirs, and praying for a declaratory judgment in his favor and that all issues of fact in the case be determined by trial by jury. He also moved for dismissal of the complaint upon the ground that he had been tried in the Court of General Sessions for Marion *407 County for the alleged unlawful homicide, and had been acquitted thereof, and that under the provisions of Section 19-5 of the 1952 Code of Laws only one who has been convicted of unlawfully killing another is barred from inheritance from the person so killed. The motion was refused under authority of Smith v. Todd, 155 S.C. 323, 152 S.E. 506, 70 A.L.R. 1529, and Keels v. Atlantic Coast Line R. Co., 159 S.C. 520, 157 S.E. 834. The case was tried at the May, 1953, term of the Court of Common Pleas for Marion County, before the Honorable G. Badger Baker, Presiding Judge, and a jury. At the close of the testimony, the presiding judge, having refused to direct a verdict for the plaintiffs, submitted the case to the jury, which found for the defendant. Thereafter he granted plaintiff's motion for judgment non obstante veredicto, holding that the only reasonable inference from all the evidence was that the defendant had unlawfully killed his wife and that he was therefore barred of inheritance from her.
The trial judge properly refused appellant's motion to dismiss the complaint, and the exceptions in that regard are overruled. Section 19-5 of the 1952 Code provides that "No person who shall be convicted in any court of competent jurisdiction of unlawfully killing another person shall receive any benefit from the death of the person unlawfully killed, except in cases of involuntary manslaughter, whether by way of intestate succession, will, vested or contingent remainder, insurance or otherwise. * * *" In Smith v. Todd, supra, where it was alleged that the husband had feloniously shot and killed his wife and then immediately committed suicide by shooting himself, this court, on appeal from an order sustaining a demurrer to the complaint, held that the statute did not abrogate the common law rule barring a beneficiary under a policy of life insurance who had unlawfully and feloniously killed the insured from taking thereunder, and that it merely extended and supplemented the common law rule by making the fact of such conviction sufficient of itself to establish the legal *408 status of the person so convicted with respect of receiving "any benefit from the death of the person unlawfully killed". This construction of the statute was confirmed in Keels v. Atlantic Coast Line R. Co., supra [159 S.C. 520, 157 S.E. 835], where it was held that the fact that a wife who had killed her husband had been convicted of involuntary manslaughter did not conclusively establish her right to the proceeds of an employees' relief fund to which he had contributed and of which she had been designated beneficiary, and that the judgment roll showing her conviction was inadmissible in evidence. To quote from the opinion in that case:
"Under the common-law rule, with regard to such benefits, a beneficiary who may have been convicted of murder or voluntary manslaughter is not bound by his conviction, but the question of his guilt or innocence, when involved in a civil action to which the rule is applicable, still remains to be determined in the trial of such civil action; under the provisions of the statute, the conviction, itself, in a court of competent jurisdiction, of murder or voluntary manslaughter, is the determining factor in a civil action to which the statute is applicable, the necessity of establishing guilt in such civil action by evidence dehors the record of conviction being thus obviated. Further than this the statute does not go. Neither expressly, nor by implication, does it permit one who has been acquitted in a court of competent jurisdiction, on a charge of unlawful killing, to show such acquittal in the trial of a civil case in which his guilt or innocence may be a question at issue; in like manner, it does not allow one who on such charge has been convicted of involuntary manslaughter only to show that fact in such a civil trial in other words, in these respects it confers no privilege which did not obtain under the common law."
The statute has no application in the present case, appellant having been acquitted.
There is no substantial dispute as to the physical facts. Appellant and his wife, Edna, and the respondent Henry *409 Legette, Jr., her son by a former marriage, lived at the home of her father, a mile and a half west of the town of Marion. She operated an establishment nearby known as Edna's Place, where groceries, cigarettes, candy and liquor were sold. Appellant, who suspected one Julian Graham of being too intimate with her, had about two weeks before the fatal shooting found Graham in a cafe in Marion, called him outside, and told him to stay away from Edna's Place. Appellant testified: "I told him to stay away from out there, that he had a good wife and to leave my wife alone." On the night of May 9, 1951, about 11:30 o'clock, appellant, suspecting that Graham was there, entered Edna's Place through a bedroom window at the rear, and, walking through the hall into the front room, saw Graham there and immediately opened fire with a six-shooter, which he emptied. According to appellant's testimony: "Whenever I came down the hall. he (Graham) was sitting on the counter, and Edna was standing between his legs". According to Graham's testimony he was sitting on the counter with a man named Shelley, and Mrs. Smith was "somewhere near the front door, near the middle of the room". To quote further from appellant's testimony:
"Q. Were you shooting at Mr. Graham? A. Yes, sir.
* * *
"Q. Were you shooting at Mrs. Smith that night? A. No, I was shooting at Graham.
* * *
"Q. You didn't care whether you hit her or not? A. I don't know what happened after I started shooting.
"Q. If she was in your line of fire, you had to shoot her if you shot him? A. I meant to kill Graham.
"Q. Did you mean to kill her? A. No, sir.
* * *
"Q. You do admit you meant to kill Graham? A. I did."
Graham testified that he didn't see Smith until after the first shot had been fired; that that shot had struck him, and *410 he then saw Smith in the room, near the rear wall; and further:
"Q. After this shot was fired, did you notice the deceased, Mrs. Smith, do anything? A. She ran from where she was near that front door, she ran towards Mr. Smith.
"Q. Did you hear her make any statement to him? A. I don't recall the exact statement. She said: `Stop! Stop! Don't Shoot!'"
Graham, badly wounded in several places, ran out of the house, followed by Smith, who continued to attack him after he had fallen to the ground. Edna Smith, in addition to receiving a wound on each hand, was struck on the right side by a bullet which passed through both lungs, causing her death.
The trial judge set aside the verdict in favor of appellant and decreed that he be debarred from inheriting from his wife not because he had actually intended to kill her, but because the evidence warranted no reasonable inference other than that her death had been occasioned in the course of his commission of an unlawful act, namely his attempt to kill Graham, which was without legal justification or excuse. Fully agreeing with the trial judge that the evidence showed conclusively that appellant was engaged in the commission of an unlawful act and that the death of his wife so occasioned would have warranted his conviction of murder or voluntary manslaughter on the criminal side of the court, we are not in agreement with his conclusion that this fact alone requires that appellant be debarred of inheritance from his wife.
In the annotation following the report of Smith v. Todd, supra, in 70 A.L.R. at pages 1539 et seq., will be found an exhaustive review of the American and English decisions dealing with the issue of forfeiture of the rights of a beneficiary under a policy of life insurance by reason of his having feloniously killed the insured. See also the annotation on this subject in 91 A.L.R. 1486. And in the annotation *411 in 139 A.L.R. at pages 501 et seq. the issue of forfeiture of a murderer's inheritance from the person whom he has slain is fully explored. Among the decisions there mentioned is Price v. Hitaffer, 164 Md. 505, 165 A. 470, where it was held that neither the husband nor his next of kin, where the former had murdered his wife and then committed suicide, could share in her estate under a statute of distribution not expressly excluding a husband from inheriting from the wife whom he had murdered. In that case it was stated that, the case being one of first impression, the court was at liberty to adopt either of the two existing views, the one which it adopted being that the old universally recognized principles of justice and morality whereby no one shall profit by his own wrong, found any claim upon his own iniquity, or acquire property by his own crime, must control the interpretation of statutes of descent and distribution having no express provisions to the contrary; the other and opposing view, while recognizing such principles, holding that the enactment by the legislature of the statutes of descent and distribution was a legislative declaration of the public policy of the state overriding the contrary public policy long embodied in the common law, and that courts are powerless to read such principles into the unambiguous words of the statute without infringing the domain of legislative action, even though such interpretation result in sanctioning the enrichment of the perpetrator of the most heinous crime of murder from the estate of his victim.
It is to be noted that the status of a killer in respect of insurance of which he is the named beneficiary, on the life of the person killed, is somewhat different from that in respect of inheritance. The conflict as to insurance is between the principles of justice and morality embodied in the common law maxim before mentioned, and a contract right; in respect of inheritance, the common law principles come into conflict with the statute law. So far as the latter conflict is concerned, the instant case is one of *412 first impression in this state; but the reasoning of the court in Smith v. Todd and Keels v. Atlantic Coast Line R. Co., supra, as well as considerations of fundamental justice and morality, impel us to hold that where one intentionally and unlawfully kills another he shall not be permitted to inherit from the person so killed. Nor are we deterred from so holding because of Article 1, Section 8, of the Constitution of South Carolina, which declares that "no conviction shall work corruption of blood or forfeiture of estate". To hold as we do takes from the felonious slayer no property; it simply forbids his acquisition of property by his crime. Riggs v. Palmer, 115 N.Y. 506, 22 N.E. 188, 5 L.R.A. 340; In re Tyler's Estate, 140 Wash. 679, 250 P. 456, 51 A.L.R. 1088.
But we know of no decision in the courts of America or England denying to one who in the course of an unlawful assault upon one person kills another to whom he bears no malice and to whom his criminal intent is not directed, the right to inherit from the person so killed. Nor do the principles of the common law or considerations of justice, morality or public policy so require. In the criminal law, where the issue is between the accused and the State, it is well enough to consider malice as following the bullet and thus constructively directed toward a person for whom it was not in fact intended, for the offense is against the peace and dignity of the State. But to invoke this fiction of the criminal law against the right of inheritance in a civil case is, it seems to us, extending the common law principle to encompass a factual situation that was never intended to be within its purview. The commission of a crime does not in itself work a forfeiture of the criminal's right to inherit. A. may murder B., a stranger, without impairment of A.'s right to inherit from A.'s father. Let us suppose that in the present case Edna Smith's son, Henry, had become involved in a quarrel with a stranger outside of the store, and had fired his pistol at the stranger under such circumstances that, had the stranger been killed. Henry *413 would have been guilty of voluntary manslaughter, but that the bullet had missed its mark and had gone through a window and killed Henry's mother. Should he, in such a case, regardless of the fact that he had not the slightest intention of killing his mother, be held to have forfeited his rights as her heir? Or should a wife, who, while driving with her husband in the family car, was negligent or reckless in its operation and thereby caused a wreck and her husband's death, be debarred from inheriting from him or receiving the proceeds of a policy of insurance on his life, despite the total absence of any intent to harm him? We think not. Cf. Minasian v. Aetna Life Insurance Co., 1936, 295 Mass. 1, 3 N.E. (2d) 17; Metropolitan Life Insurance Co. v. McDavid, D.C.E.D. Mich. 1941, 39 F. Supp. 228; In re Wolf, 1914, 88 Misc. 433, 150 N.Y.S. 738.
By several exceptions appellant contends that the verdict of the jury in his favor, being supported by sufficient evidence, was binding upon the trial judge, who therefore erred in setting it aside and decreeing judgment against him. By Exception 10 he contends that this is so because the suit was in equity and the issues were framed and submitted to the jury as issues out of equity. Exception 11 charges that the granting of judgment for the respondents was erroneous "for the reason that the pleadings and the testimony raise issues of fact which the trial judge recognized at the time of the trial and so submitted them to the jury".
The transcript of record shows that in due time appellant served upon respondents notice that he would move before the presiding judge "for an order requiring that the whole issue raised by the pleadings" be tried by a jury; that attached to the notice was the question of fact proposed for submission to the jury, to wit: "Did Earl L. Smith commit the crime either of murder or of voluntary manslaughter when he killed Edna N. Smith?"; and that upon the case coming up for trial the pleadings and the notice of motion to submit the issues to the jury, and the proposed question, were handed to the trial judge. It does not appear that the *414 motion to submit issues, "or the whole issue", or the proposed factual question was argued, or that it was acted upon by the trial judge. On the contrary, it appears that of his own motion he submitted all of the factual issues to the jury as in a law case. To quote briefly from his charge to the jury:
The question you have to pass on, or the decision you have to make, is whether the defendant, Earl L. Smith, shall participate, share, or inherit, as an heir at law, a portion of the estate of his deceased wife, Edna Smith. * * *
"Now, in order for you to decide whether or not he is an heir at law or will inherit a portion of her estate, as the surviving husband, it is necessary for you to answer the question: Did Earl Smith wrongfully, maliciously, feloniously and unlawfully shoot and kill his wife, the deceased, Edna N. Smith. * * *
"As you will recall, I have said several times, the ultimate question for decision is whether the defendant unlawfully killed the deceased. You can add to it, such as that he would either be guilty of murder or manslaughter. * * *
"If you find from the evidence * * * that the death of the deceased, Edna N. Smith, was due to an unlawful act or acts on the part of the defendant, whereby he would be guilty of murder or manslaughter, then your verdict would be: `We find for the plaintiffs'; that is, that he will not inherit any of the property owned by his wife at the time of her death. If you find that the death of the deceased was not by an unlawful act, your verdict would be: `We find for the defendant'. That would mean that he would inherit part of the estate left by Edna N. Smith at the time of her death".
And from his order on the motion for judgment notwithstanding the verdict:
"The question in this case was whether the death of the deceased was due to any unlawful act or acts of the defendant, whereby he would be guilty of murder or manslaughter. That question has no equitable characteristics, but is one in *415 an action at law. Contrary to the understanding of defendant, issues were not framed and submitted to the jury as is generally done in some equitable actions".
The Uniform Declaratory Judgments Act has been codified in this state as Chapter 24 of Title 10 of the 1952 Code of Laws, Sections 10-2001 through 10-2014. Section 10-2009 reads: "When a proceeding under this chapter involves the determination of an issue of fact such issue may be tried and determined in the same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending. All existing rights to jury trials are hereby preserved."
An issue that is essentially one at law is not transformed into an equitable one by virtue of the fact that declaratory, rather than investitive, relief is sought. In Aetna Casualty & Surety Co. v. Quarles, 4 Cir., 92 F. (2d) 321, 325, action was under the federal act seeking a declaratory judgment to the effect that because of collusion between the defendant and his wife in an action brought in the state court by her to recover damages for personal injuries resulting from his negligent operation of his automobile in which she was a passenger, the company was relieved of liability under its policy of insurance covering the said automobile. While the declaratory proceeding was pending, the wife recovered judgment in the state court and later sued the company in the state court to recover the amount of the judgment, and these facts were incorporated by amendment in the pleadings in the declaratory proceeding. In the course of his opinion affirming the judgment of the district court dismissing the bill, Judge Parker said:
"When the original bill was filed, the real question as to which the company sought a declaratory judgment was whether it would have a good defense under the policy to an action growing out of a judgment against the insured in the action in the state court, because of the collusive nature of that action, if judgment should be rendered against *416 him therein. * * * The declaratory judgment was sought under the bill as amended, therefore, merely for the purpose of determining the validity of a defense which the company was asserting in the action against it and which could be equally well determined in that action. * * * The company seems to think that by asking a declaratory judgment it became entitled to a trial in equity without a jury and that this is a sufficient reason for granting declaratory relief notwithstanding the institution of the action on the policy; but this is clearly not the case as the defense to determine which the declaratory judgment was sought was legal and not equitable in character. Where the issues raised in a proceeding for a declaratory judgment are of this nature, they must be tried at law if either party insists upon it, for the statute so provides. 28 U.S.C.A. § 400 (3). And, irrespective of this provision of the statute, it is clear that the right of jury trial in what is essentially an action at law may not be denied a litigant merely because his adversary has asked that the controversy be determined under the declaratory procedure."
To the same effect are United States Fidelity & Guaranty Co. v. Koch, 3 Cir., 102 F. (2d) 288, and Pacific Indemnity Co. v. McDonald, 9 Cir., 107 F. (2d) 446, 448, 131 A.L.R. 208. In the latter the court said:
"It follows from what we have said that we simply have a situation herein where a party who has issued a policy of insurance anticipates a suit thereon by the insured or one subrogated to his rights and to avoid delay brings the matter before the court by petition for declaratory relief. In such a proceeding, although the parties are reversed in their position before the court, that is, the defendant has become the plaintiff, and vice versa, the issues are ones which in the absence of the statute for declaratory relief would be tried at law by a court and jury. In such a case we hold that there is an absolute right to a jury trial unless a jury has been waived."
*417 In the instant case, declaratory judgment was sought for the purpose of determining the validity of the claim of the respondent Henry Legette, Jr., to ownership and the right to possession of the entire net assets, real and personal, of his mother's estate, as against the anticipated claim of appellant to a portion thereof under our statute of distribution. Had appellant commenced an action against respondents for the possession of his portion of the estate, it cannot be doubted that he and they would have been entitled to a jury trial as a matter of right, the issues being essentially legal and not equitable. Cf. Jordan v. Jordan, 130 S.C. 330, 125 S.E. 910. Respondents cannot, by invoking the declaratory procedure and thus reversing the position of the parties, deprive him of his constitutional right. The factual issues here being legal in character, their determination by the jury was conclusive on the trial judge. It matters not that appellant's demand that they be determined by a jury was made under the mistaken belief that the action was in equity rather than at law. The trial judge properly viewed it as one at law, and so submitted the issues to the jury. That in his charge he instructed them, in effect, that forfeiture of appellant's right to inherit from his wife was not dependent upon proof of actual intent on his part to kill her, but would follow if such intent had been directed toward Graham alone, does not alter the conclusive effect of their verdict. Under correct principles of law governing the case, the verdict was not without support in the evidence; and respondents cannot complain of a charge too favorable to them.
Reversed.
STUKES, TAYLOR and OXNER, JJ., and J. FRANK EATMON, A.A.J., concur.
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96 Cal. App. 2d 245 (1950)
PHIL C. KATZ, as Administrator With the Will Annexed, etc., Appellant,
v.
FRANCES GREENINGER et al., Respondents.
Civ. No. 14202.
California Court of Appeals. First Dist., Div. Two.
Feb. 28, 1950.
Elden C. Friel and Henry F. Boyen for Appellant.
Charles L. James for Respondents.
NOURSE, P. J.
This appeal relates to questions of law alone. Evidence was taken at the trial, findings of fact were filed, but appellant did not request a reporter's transcript and none has been filed.
On August 24, 1945, Kate Maher deposited the sum of $5,000 with the Hibernia Savings and Loan Society under a written declaration of trust hereinafter set forth.
On August 6, 1946, Kate Maher was adjudged incompetent and the San Francisco Bank was appointed guardian of her estate. The following day the guardian made written demand upon the Hibernia Bank for possession of the fund on deposit, which was refused. The money on deposit was not required for the maintenance of the incompetent. On August 15, 1946, Kate Maher died. The executrix of her will commenced suit against Frances Greeninger and the Hibernia Bank to recover the fund on deposit, and following the trial the executrix died. After findings were filed and judgment entered in favor of the defendants the public administrator was appointed administrator with the will annexed and substituted as plaintiff in place of the executrix named in the will.
On the trial the defendants put in evidence the document which they assert is a trust agreement and which reads as follows:
"To the Hibernia Savings and Loan Society,"
San Francisco, California--No. 675-669
Date: August 24, 1945
"I hereby agree to all the conditions of deposit governing deposits with the Hibernia Savings and Loan Society and to all amendments thereto which may hereafter become effective. I further agree, certify and declare that the moneys deposited by me in the above numbered account, and all future deposits made therein and all accruals thereto are held by me in trust for the benefit of Frances Greeninger hereinafter called the Beneficiary subject to the following conditions:"
"1. During my lifetime payments shall be made on my order alone and my receipt shall be a sufficient acquittance to the Hibernia Savings and Loan Society for such payments so made."
"2. In the event of my death the amount then remaining *247 on deposit shall be payable on the order of the Beneficiary and any amounts so paid shall be his or her exclusive property."
"3. In the event that the Beneficiary predeceases me, this trust shall terminate as of the date of his or her death."
"4. It is hereby expressly agreed that The Hibernia Savings and Loan Society may accept as sufficient proof of my death a duly certified copy of the death certificate issued by the competent authorities whose duty it is to issue such certificates."
Kate Heath Maher
For identification of Beneficiary see reverse hereof.""
The appeal presents two questions for decision. First: Does the document accompanying the deposit create a trust? Second: Did the guardian of the estate of the incompetent trustee have the right to demand and take possession of the trust fund?
[1] First: The document shows every evidence of a clear and fixed intention to create a trust in accordance with the terms expressed therein. Such a trust is accepted with approval in section 853 of the statute relating to banking (Bank C.A.,) which is based on the former section 15a of the original Bank Act. (Stats. 1909, ch. 76, p. 87; 1 Deering's Gen. Laws, Act 652.) That section provides that when a deposit in a bank is made "which in form is in trust for another" it may be paid to the beneficiary on the death of the trustee though no terms of a valid trust are given in writing. It is a natural corollary that when such terms are clearly expressed in writing, as we have here, then a legal and valid trust is created.
The validity of such a trust is recognized in Restatement, Trusts, section 58; Scott on Trusts, section 58; Bogert, Trusts and Trustees, section 47. These authors discuss at length the question of the intent of the depositor and this is the subject upon which the great number of authorities depend. Generally these cases relate to a deposit entitled "A, in trust for B" with no further expression in writing of the depositor's intent. In such instances oral testimony has been held admissible to prove the depositor's intent as well as to prove an intention contrary to the claim of a trust relation.
In Kuck v. Raftery, 117 Cal. App. 755 [4 P.2d 552], this court had for consideration a deposit of that character. The trial court had found that no trust was intended. We reversed the judgment holding that the evidence did not support that *248 finding. In doing so the two rules of decision--one known as the New York rule, the other as the Massachussets rule--were discussed and many cases cited. The decision rested on the authority of Booth v. Oakland Bank of Savings, 122 Cal. 19 [54 P. 370], which is in accord with the New York rule. In Bank of America etc. Assn. v. Hazelbud, 21 Cal. App. 2d 109 [68 P.2d 385], a case in which the deposit contained more explicit terms of intention to create a trust, the court followed the Booth case and American Bible Society v. Mortgage Guarantee Co., 217 Cal. 9 [17 P.2d 105]. Kosloskye v. Cis, 70 Cal. App. 2d 174 [160 P.2d 565], was an "A in trust for B" case. The trial court took evidence of events occurring years after the deposit to show the intention of the depositor and held that no trust had been intended. This was affirmed on appeal. In our case the appellant did not request a reporter's transcript and hence we have no knowledge of what evidence was taken. The trial court found that the deposit was made "with intent to create a voluntary express revocable trust" with Frances Greeninger as the beneficiary. This finding is binding on the appeal. Appellant does not attack it on any specific ground. His argument on the validity of the trust is based on the Massachusetts rule which has been rejected as authority in this state.
[2] Second: Did the guardian of the estate of the incompetent trustee have the right to take immediate possession of the trust fund? Hallinan v. Hearst, 133 Cal. 645, 650 [66 P. 17, 55 L.R.A. 216], deals with the question of the relation of the guardian of a minor and a vacant trusteeship. It was held that the guardian, as such, "would have no right whatsoever to the possession and management and distribution of the corpus of such a trust fund." And also, that if the guardian should be appointed to fill the vacant trusteeship, "he would not take the trust property as guardian but as trustee."
The authorities are apparently in accord that the court may authorize the use of the deposit so far as necessary for the care of the depositor who has been declared incompetent. (Scott on Trusts, p. 363 and cases cited in 1944 Supp.) But in In re Grant, 122 Misc. 491 [204 N.Y.S. 238], it was held that the guardian of an incompetent trustee could not, without order of court, take possession of the trust fund since the right of election to withdraw the fund was personal and that the right of the guardian to take possession of the ward's estate applied only to ministerial acts. See generally 112 A.L.R. 1063; 138 A.L.R. 1383; 54 Am.Jur. 82; Rickel v. Peck, 211 *249 Minn. 576 [2 N.W.2d 140, 138 A.L.R. 1375], a case coming from Minnesota, which follows the New York rule on bank deposit trusts.
Here the depositor expressly reserved the right "on my order alone" to withdraw any part of the fund from the bank. Such discretionary power is subject to control by the court only under special circumstances. (Civ. Code, 2269.) The method of control is found in the Civil Code. Section 2282 provides that a trustee is removed by a judgment finding that he is of unsound mind. Section 2287 provides that "The superior court shall appoint a trustee whenever there is a vacancy ..." When the trustee was adjudged incompetent a vacancy in the trusteeship occurred and the duty was then cast upon the superior court to appoint a new trustee on petition for that purpose. Such trustee would thereupon succeed to the title of the trust deposit and would be required to hold the estate under the terms of the trust instrument.
But the guardian of an incompetent person does not have legal title to his ward's estate. (39 C.J.S. 75.) While the guardian has the right of possession and control, the property is said to be "in custodia legis" and subject to the orders of the court. (25 Am. Jur., Guardian and Ward, 72.) Appellant relies on section 1501 of the Probate Code which gives a guardian power to collect debts owing to the ward. To apply this section it would require a rejection of the entire trust relation and a treatment of the deposit as nothing more than a relation of debtor and creditor.
From the foregoing discussion there would appear to be some confusion in the authorities relative to the duties of a guardian of an incompetent trustee. This is because no authorities have been found which pass directly on the point involved. Those cases which hold that the guardian may draw on the trust estate for the necessary support of his ward are not applicable here because the trial court found that Mrs. Maher left an estate of over $43,000 of which more than $10,000 was in cash. She died nine days after she was declared incompetent and it does not appear that the trust fund was needed for her maintenance. But even in those cases which permit a withdrawal for maintenance the better reasoned ones tie the power of the guardian to the supervision and control of the court.
Whatever may be the rule in this state when the guardian is in need of a trust estate for the support of the ward, we are *250 satisfied that, when such condition does not exist, the guardian is without power, in absence of a court order, to take possession of the trust estate, or to exercise the right of election to discontinue the trust which had been reserved to the trustee alone. And in absence of authority either way we would conclude that the proper procedure would be to appoint a new trustee to take possession of the estate.
Judgment affirmed.
Goodell, J., and Dooling, J., concurred.
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632 F. Supp. 551 (1986)
Virginia Graham SAUNDERS, Individually and as Administratrix of the Estate of Thomas Lee Saunders, Jr., Deceased and Robert D. Saunders and Donna Saunders Barber and Jeffrey M. Saunders and Lori Lea Saunders and Tommi Lee Saunders
v.
CONSOLIDATED RAIL CORPORATION, T/A Conrail and Northern Contracting Company.
Civ. A. No. 84-0786.
United States District Court, E.D. Pennsylvania.
April 8, 1986.
S. Gerald Litvin, Philadelphia, Pa., Joshua I. Barrett, Charleston, W.Va., for plaintiffs.
Paul F.X. Gallagher, Philadelphia, Pa., for defendants.
MEMORANDUM AND ORDER
JOSEPH S. LORD, III, Senior District Judge.
In February, 1982, plaintiff's husband, Thomas Lee Saunders, Jr., was struck and killed by a coal car operated by the defendants. Plaintiff, suing on behalf of herself and her husband's five children, all of whom will share in the proceeds of this action,[1] proposed settling this lawsuit with the defendants for $385,000.00. On October 28, 1985, I authorized plaintiff to settle this action for $385,000.00.
Plaintiff has now proposed a distribution of the settlement proceeds and petitioned me for approval of her proposal. Both Lori Lea and Tommi Lee Saunders, Thomas's children by a second marriage, have filed objections to plaintiff's petition, claiming that she has underestimated the damages suffered by them due to their father's death, thereby underestimating the amount they should recover pursuant to the wrongful death action brought by plaintiff in their behalf. No other objections have been made to plaintiff's proposed distribution.
For the reasons that follow, I find that plaintiff has estimated accurately the damages suffered by Lori Lea and has overestimated *552 the damages suffered by Tommi Lee, as a result of their father's death. I will therefore grant plaintiff's petition in part and deny it in part, approving a distribution similar to the one proposed by plaintiff, except for a slight modification necessitated by my finding that plaintiff overestimated the damages suffered by Tommi Lee.
Thomas Saunders married his second wife, Effie Moore, in 1969. He fathered one child by Effie Moore, Tommi Lee, and adopted Lori Lea, Effie Moore's child from a previous relationship. Thomas Saunders left Effie Moore sometime in early 1974 and soon thereafter, she obtained a divorce. Pursuant to the divorce Thomas Saunders was ordered to pay Effie Moore $150.00 per month for the support of Tommi Lee until Tommi reached the age of eighteen, and $150.00 per month for the support of Lori Lea until she reached the age of eighteen.
Since leaving Effie Moore, Thomas Saunders has been a very poor father who has had extremely limited contact with his children, Tommi Lee and Lori Lea. Not once has he satisfied his monthly support obligations. Up until 1981 he never visited with his children. He would telephone them only approximately twice a year, and then, it seems, only when he was working at a construction site with a WATTS line, which allowed him to call for free. His written communication with his children was limited to Christmas and birthday cards.
In the summer of 1981 Thomas Saunders marginally increased his contact with his children. He visited with them for one day. He began to telephone them more often, especially Lori Lea, who started college that fall and whom he would call at least once per week. He sent Lori Lea about $500 to help with college expenses and less than $400 worth of clothes and school supplies. He also sent a few presents and a small amount of cash to Tommi Lee. Over the phone he showed an interest in the children's health and education. He promised to visit the children at Easter and promised to buy Lori Lea a car. He still, however, neglected to meet his monthly support obligations.
When Thomas Saunders was killed Tommi Lee was eleven years old and Lori Lea was over eighteen. Thomas Saunders, therefore, was under a court ordered obligation to provide $150.00 per month to support Tommi Lee for another 6.75 years, but was under no legal obligation to provide any support for Lori Lea.
The purpose of the Wrongful Death Act, 42 Pa.C.S.A. § 8301 et seq. (1982), is to compensate certain enumerated relatives of the deceased for the pecuniary loss suffered by them through the deprivation of that part of the deceased's earnings which they would have received had the deceased lived. Manning v. Capelli, 270 Pa.Super. 207, 211, 411 A.2d 252, 254 (1979). The pecuniary losses established by those enumerated relatives are then divided among them in the same proportion they would have taken had the deceased died intestate. Id. at 210, 411 A.2d at 254. Relatives who have not suffered a pecuniary loss, however, do not share in the proceeds. Id. at 213, 411 A.2d at 256.[2]
The parties agree that plaintiff has suffered a pecuniary loss of $80,750.00, and that her three emancipated children have no pecuniary losses cognizable in a wrongful death action. They disagree concerning the pecuniary losses allegedly suffered by Tommi Lee and Lori Lea. Plaintiff calculates Tommi Lee's pecuniary loss by assuming that she would have received $150.00 per month from her father the amount of his support obligation until she reached the age of twenty-one. Since *553 Thomas Saunders was under no legal obligation to support Lori Lea, plaintiff claims that Lori Lea failed to suffer a pecuniary loss and, like her emancipated children, is not entitled to share in the proceeds of this wrongful death action. Tommi and Lori claim that plaintiff's estimate of their pecuniary loss is too low because it fails to consider the value of the care, training, advice, guidance and emotional support they lost because of their father's death.
Pecuniary loss in this context "is not a matter of guess or conjecture, but must be grounded on reasonably continuous past acts or conduct of the deceased." Gaydos v. Domabyl, 301 Pa. 523, 530, 152 A. 549 (1930). Services, gifts, education, training and advice can all be elements of an individual's pecuniary loss. Id. However, they "must have been rendered with a frequency that begets an anticipation of their continuance; occasional gifts and services are not sufficient on which to ground a pecuniary loss." Id.
The law creates a rebuttable presumption that minor children suffer a pecuniary loss when one of their parents dies. 301 Pa. at 532, 152 A. 549. Emancipated children, however, "must affirmatively show direct pecuniary loss ..., [d]amages are never presumed." 301 Pa. at 532, 535, 152 A. 549.
I find that Tommi Lee suffered a pecuniary loss equal to the $150.00 per month her father was legally required to provide for her support until she reached the age of eighteen. Although her father never provided her with monetary or emotional support equal in value to $150.00 per month, in Pennsylvania "`[a] husband and father is presumed to perform the legal duty of supporting his wife and minor children [and] ... they are entitled to what the law would have compelled him to furnish them, whether he had previously done so or not.'" DeSantis v. Maddalon, 348 Pa. 296, 300, 35 A.2d 72 (1944).
I further find that neither Tommi nor Lori has met their burden of establishing a pecuniary loss based upon the services and gifts their father would have provided them after they reached the age of eighteen, had he lived.
For almost eight years Thomas Saunders showed virtually no interest in his children. He failed to meet his legal support obligations, hardly spoke to his children and failed to give them any meaningful guidance, education or emotional support. A few months before he died he began to show a minimal interest in his children. His occasional gifts and services during this time are insufficient according to Pennsylvania law to establish a pecuniary loss. They were not "rendered with a frequency that begets an anticipation of their continuance," and given Thomas Saunders' previous neglect of his children, I have no reason to believe that his renewed interest in his children would have continued.
NOTES
[1] All of the children will share in the proceeds of the survival action brought on behalf of the deceased. Only those children who have suffered a pecuniary loss due to their father's death will take pursuant to the wrongful death action brought by plaintiff. See infra p. 552.
[2] There is some question as to whether Manning expresses present Pennsylvania law. Dicta in Gaydos v. Domabyl, 301 Pa. 523, 152 A. 549 (1930), states that the proceeds of a wrongful death action should be divided among an entire class of enumerated relatives, as long as at least one member of the class has suffered a pecuniary loss. Manning permits only those relatives actually suffering a loss to participate. The parties have agreed that Manning should govern.
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379 Pa. Super. 24 (1988)
549 A.2d 578
COMMONWEALTH of Pennsylvania, Appellee,
v.
Gloria RODRIGUEZ, Appellant.
Supreme Court of Pennsylvania.
Submitted July 18, 1988.
Filed September 21, 1988.
Reargument Denied November 14, 1988.
*25 Richard K. Renn, York, for appellant.
William H. Graff, Jr., Assistant District Attorney, York, for Com., appellee.
Before CIRILLO, President Judge, and OLSZEWSKI and MONTEMURO, JJ.
*26 OLSZEWSKI, Judge:
Appellant, Gloria Rodriguez, takes this appeal from the July 17, 1987, judgment of sentence of the Court of Common Pleas of York County. Appellant was convicted of possession of drugs with intent to deliver. Pa.Stat.Ann.Tit. 35 § 780-113(a)(30) (Purdon 1986). Appellant was sentenced to a period of imprisonment of not less than one year and not more than two years.
On appeal, Appellant raises three issues for our consideration: (1) whether the trial court erred in refusing to suppress the evidence seized in a search of her automobile, (2) whether the denial of Appellant's request for a new trial because trial counsel was ineffective was proper, and (3) whether the evidence was sufficient to sustain the verdict of the lower court on the charge of possession of drugs with intent to deliver. We will discuss these issues seriatim.
On November 15, 1985, police received information from an informant that appellant and her husband were delivering cocaine to subjects in the York area and to the mobile home of Stephen Conn. Police observed appellant's vehicle in York on that day and were later advised by the informant that appellant and her husband had already delivered drugs to Conn.
A second informant told police that appellant and her husband were transporting cocaine to the York area and, more specifically, that on November 23, 1985, they were in the east end of York. Police followed up on this information and observed appellant's vehicle in York City.
On November 27, 1985, informant # 2 informed police that appellant and her husband would be coming to York to deliver drugs. Police then observed appellant's vehicle on Route I-83 entering York, but lost sight of it before it entered the city. Appellant's vehicle was later discovered by the police parked outside of the residence of Stephen Conn.
*27 Officers observed appellant's vehicle exiting the trailer court where Stephen Conn resided. Police pursued and stopped the vehicle on Route 234. After a search of the vehicle revealed cocaine and a large sum of money, appellant and her husband were arrested. The police then immediately returned to the Conn residence and found cocaine and other drug-related paraphernalia. Appellant's vehicle was later secured, and an inventory search disclosed additional cocaine and heroin.
Next we must examine the procedural posture in which we find this case. We now set out the sequence of events in pertinent part. On November 27, 1985, appellant was charged by complaint with possession of drugs with intent to deliver and criminal conspiracy. A pre-trial suppression hearing was held at which motions to suppress were denied in an opinion dated February 20, 1987. The case was then tried and a guilty verdict was entered on April 20, 1987. On June 3, 1987, post-trial motions on the suppression issue were denied. Appellant was sentenced on July 17, 1987. An appeal was filed on August 12, 1987, by appellant through previous counsel; but as no briefs were ever submitted, the appeal was dismissed on December 10, 1987. Appellant filed a PCHA petition on February 9, 1988, setting forth the above three issues. The PCHA order of March 7, 1988, permitted appellant to file this appeal nunc pro tunc.
We now turn to appellant's first contention: failure of the trial court to suppress evidence. Our initial task in reviewing the ruling of a suppression court is to determine whether the factual findings are supported by the record. We must then determine the legitimacy of the inferences and legal conclusions drawn from those facts. Since the trial court found for the prosecution on this motion, we will consider only the evidence of the prosecution and so much of the evidence for the defense which, as fairly read in the context of the record as a whole, remains uncontradicted. Commonwealth v. Lark, 505 Pa. 126, 129, 477 A.2d 857, 859 (1984) (citations omitted); Commonwealth v. Monarch, *28 510 Pa. 138, 146-47, 507 A.2d 74, 78 (1986) (citations omitted).
Basic constitutional jurisprudence holds that "searches conducted outside the judicial process, without prior approval by judge or magistrate, are per se unreasonable under the Fourth Amendment subject only to a few specifically established and well-delineated exceptions." Katz v. United States, 389 U.S. 347, 357, 88 S. Ct. 507, 514, 19 L. Ed. 2d 576, 585 (1967) (footnotes omitted). Both United States and Pennsylvania constitutional law permit the warrantless search and seizure of automobiles if based upon probable cause and accompanied by exigent circumstances. Coolidge v. New Hampshire, 403 U.S. 443, 454, 91 S. Ct. 2022, 2031, 29 L. Ed. 2d 564, 575-76 (1971); Chambers v. Maroney, 399 U.S. 42, 90 S. Ct. 1975, 26 L. Ed. 2d 419 (1970); Commonwealth v. Milyak, 508 Pa. 2, 493 A.2d 1346 (1985). This exception was created based on the inherent mobility of vehicles, with the consequent practical problems in obtaining a warrant prior to searching and on the "diminished expectation of privacy which is accorded automobiles because of their open construction, their function and their subjection to a myriad of state regulations." Milyak, 508 Pa. at 8, 493 A.2d at 1349 (citing Commonwealth v. Timko, 491 Pa. 32, 38, 417 A.2d 620, 623 (1980)) (additional citations omitted). Thus, our initial consideration must be whether the police had probable cause to stop and search appellant's vehicle. We find that such probable cause existed.
Probable cause is a flexible, common-sense standard which "merely requires that the facts available to the officer would `warrant a man of reasonable caution in the belief' that certain items may be contraband or stolen property or useful as evidence of a crime." Texas v. Brown, 460 U.S. 730, 742, 103 S. Ct. 1535, 1543, 75 L. Ed. 2d 502, 514 (1983) (citations omitted). As our Supreme Court stated in Commonwealth v. Lewis, 442 Pa. 98, 101, 275 A.2d 51, 52 (1971):
To justify . . . a [warrantless] search . . . an officer must have independent probable cause to believe that a felony *29 has been committed by the occupants of the vehicle, or that it has been used in the furtherance of the commission of a felony, or the officer must have a basis for believing that evidence of a crime is concealed within the vehicle, or that there are weapons contained therein which are accessible to the occupants.
Id. See also Commonwealth v. Shaffer, 447 Pa. 91, 288 A.2d 727 (1972). "Thus, where there exists probable cause related to the vehicle or its occupants, a search of the vehicle is permissible." Milyak, 508 Pa. at 8, 493 A.2d at 1349.
As to the determination of probable cause in actions involving informants, the Supreme Court enunciated the "totality-of-the-circumstances" approach in Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317, 76 L. Ed. 2d 527 (1983). This test was adopted by the Pennsylvania Supreme Court in Commonwealth v. Gray, 509 Pa. 476, 503 A.2d 921 (1985).
In examining the totality of the circumstances, the court must scrutinize (1) the specific information provided by the informants, (2) the reliability of the informants, and (3) the independent corroboration of the information. Gates, supra. The information in this case does satisfy these three elements.
As to the first, the information provided by the informants consisted of the following:
(1) that the Rodriguezes brought cocaine into York in the past;
(2) that on the 15th of November, the Rodriguezes would be bringing drugs to York to sell;
(3) that they would deliver drugs to an address on Bergman Street in York and to Stephen Conn's residence;
(4) that the Rodriguezes actually delivered drugs to Stephen Conn's residence prior to the officer's observation of the Rodriguezes at the Bergman Street address;
*30 (5) that on the 23rd and 27th of November, the Rodriguezes would again be in York to deliver drugs at the two above-mentioned addresses;
(6) that the Rodriguezes had several different vehicles including a black Trans Am, a white Chevy, and two or three cycles;
(7) that Conn would receive anywhere from one to three ounces of cocaine from the Rodriguezes; and
(8) that the Rodriguezes would quickly get rid of the drugs.
Police testimony demonstrated the reliability of the confidential informants. Informant # 1, a poly-drug user, had provided information in the past which led to the issuance of four search warrants, four arrests, and the confiscation of large amounts of drugs. Informant # 2, also a poly-drug user, had given information in the past to the police officers in this case which had proven to be correct. As we noted in Commonwealth v. Benjamin, 260 Pa.Super. 1, 393 A.2d 982 (1978), "past `investigative leads' that proved reliable and accurate were a sufficient indicator of the informant's reliability"; convictions are not the sine qua non of reliability. Id., 260 Pa.Superior Ct. at 7, 393 A.2d 985; see also Commonwealth v. White, 311 Pa.Super. 146, 152, 457 A.2d 537, 539 (1983).
Finally, the independent corroboration of the information was affected in two ways. First, two independent and distinct informants provided the same information. The statements of different informants may corroborate each other. Commonwealth v. Jones, 506 Pa. 262, 270-71, 484 A.2d 1383, 1388 (1984), and case cited therein. Secondly, police surveillance established the following:
1. On the 15th of November, the officers observed Mr. Rodriguez at 535 Bergman Street and later identified a car parked in the neighborhood with New Jersey tags which proved to be registered to Mrs. Rodriguez;
2. They called the informant on the 15th of November and were informed that the Rodriguezes had been to the *31 Conn residence prior to their being at the Bergman Street address;
3. On the 23rd of November, the officers again found the Rodriguezes' car in the City of York as the informant had said it would be;
4. On the 27th of November, the officers saw the Rodriguezes' car entering York via Route 83 and later observed it parked at the Conn residence.
Trial court opinion on motion to suppress, February 20, 1987, at 5. Because "only a probability or substantial chance of criminal activity, not an actual showing of such activity [is required]. . . . innocent behavior frequently will provide the basis for a showing of probable cause." Gates, 462 U.S. at 243 n. 13, 103 S. Ct. 2335 n. 13, 76 L. Ed. 2d at 552 n. 13.
Thus, we conclude that the officers had probable cause to search the vehicle based upon the information provided by the informants whose reliability was established and whose information was independently corroborated. See Jones, supra.
Since probable cause has been established, our next inquiry must be whether exigent circumstances existed such that immediate action was necessary. As our Supreme Court has stated,
The warrant requirement . . . is excused where exigent circumstances exist . . . Exceptions arise when the need for prompt police action is imperative, either because evidence sought to be preserved is likely to be destroyed or secreted from investigation, or because the officer must protect himself from danger to his person by checking for concealed weapons.
Commonwealth v. Landamus, 333 Pa.Super. 382, 390, 482 A.2d 619, 623 (1984) (quoting Coolidge v. New Hampshire, supra; Commonwealth v. Dussell, 439 Pa. 392, 266 A.2d 659 (1970); Milyak, supra, and citations therein). In Chambers v. Maroney, 399 U.S. at 52, 90 S. Ct. at 1981, 26 L.Ed.2d at 428, the Supreme Court stated:
*32 For constitutional purposes, we see no difference between on the one hand seizing and holding a car before presenting the probable cause issue to the magistrate and on the other hand carrying out the immediate search without a warrant. Given probable cause to search, either course is reasonable under the Fourth Amendment.
Id. See also, United States v. Ross, 456 U.S. 798, 807 n. 9, 102 S. Ct. 2157, 2163 n. 9, 72 L. Ed. 2d 572, 582 (1982).
Appellant's vehicle was mobile just prior to the search, and so the opportunity for search was fleeting. Additionally, it was believed that a felony had been committed and that evidence of it might be destroyed or removed from the car and/or jurisdiction if not obtained. Therefore, we find that both probable cause and exigent circumstances existed, thus permitting a warrantless search of appellant's vehicle.
Appellant's second issue raises two claims of ineffective assistance of counsel: (1) failure by counsel to allow appellant to testify, and (2) failure of counsel to disclose the conflict of interest caused by representing both appellant and her ex-husband. When reviewing a claim of ineffectiveness of counsel, this Court must first determine whether the issue underlying the charge of ineffectiveness is of arguable merit. See Commonwealth ex rel. Washington v. Maroney, 427 Pa. 599, 235 A.2d 349 (1967). If the issue is found to be of arguable merit, our inquiry shifts to a determination of whether counsel's actions had a reasonable basis in promoting the client's interests. Id. Finally, appellant must demonstrate that the ineffectiveness was prejudicial to the point of having an adverse effect upon the outcome of the proceedings. See Commonwealth v. Pierce, 515 Pa. 153, 527 A.2d 973 (1987). The burden of proving counsel's ineffectiveness rests on the party claiming such, as counsel is presumed to be effective. See Commonwealth v. Verdekal, 351 Pa.Super. 412, 506 A.2d 415 (1986).
As to the first claim of ineffectiveness, we note that it is well established that the decision of whether to testify on one's own behalf rests solely on the defendant. Commonwealth *33 v. Rawles, 501 Pa. 514, 525 n. 3, 462 A.2d 619, 624 n. 3 (1983). We also note that in Rawles our Supreme Court stated that the record indicated no disagreement between appellant and his trial counsel as to the course taken. Id. We find the record before us to be the same; thus, the first claim underlying the charge of ineffective assistance of counsel is meritless.
As to the second claim of ineffectiveness, it is again well established that dual representation alone does not create or indicate a conflict of interest. Commonwealth v. Joyner, 489 Pa. 502, 506, 414 A.2d 1003, 1005 (1980). Although it is true that the mere existence of a conflict of interest will vitiate the proceedings, Commonwealth v. Westbrook, 484 Pa. 534, 400 A.2d 160 (1979), such conflict must appear from the facts of the proceeding as they appear on record. Commonwealth v. Burch, 248 Pa.Super. 8, 14, 374 A.2d 1291, 1293 (1977). Appellant here claims, after the fact, to have had a defense which was inconsistent with that of her co-defendant. This defense was not communicated to her counsel and, therefore, was not used at trial. Where neither defendant relies on a defense which is antagonistic to that of the other, no conflict is made out. Joyner, 489 Pa. at 506, 414 A.2d at 1005. Counsel, then, cannot be deemed ineffective for failure to pursue a defense of which he was not informed. Cf. Commonwealth v. Madison, 501 Pa. 485, 491, 462 A.2d 228, 231 (1983) (counsel deemed effective when failure to call witness was due to failure of defendant to notify counsel of existence of witness). We again find that this underlying claim of ineffective assistance of counsel is without merit. Therefore, we find that appellant was provided effective assistance of counsel.
Appellant's third and final allegation of error is that the evidence was insufficient to sustain the verdict. This issue is waived because appellant failed to preserve it by including it in her post-verdict motions. Commonwealth v. Seachrist, 478 Pa. 621, 623, 387 A.2d 661, 662 (1978); Commonwealth *34 v. Goins, 348 Pa.Super. 22, 24, 501 A.2d 279, 280 (1985).
Judgment of sentence affirmed.
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178 Cal. App. 4th 120 (2009)
CALIFORNIA BUILDING INDUSTRY ASSOCIATION et al., Plaintiffs and Appellants,
v.
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT, Defendant and Respondent;
MEDICAL ADVOCATES FOR HEALTHY AIR et al., Interveners and Respondents.
No. F055448.
Court of Appeals of California, Fifth District.
October 6, 2009.
*124 Sheppard Mullin Richter & Hampton, David P. Lanferman, James F. Rusk; Law Offices of Walter P. McNeill and Walter P. McNeill for Plaintiffs and Appellants.
Philip M. Jay and Catherine T. Redmond for Defendant and Respondent.
Edmund G. Brown, Jr., Attorney General, J. Matthew Rodriquez, Chief Assistant Attorney General, Gordon Burns, Deputy Solicitor General, Ken Alex, Assistant Attorney General, Sally Magnani and Lisa Trankley, Deputy Attorneys General, as Amicus Curiae on behalf of Defendant and Respondent.
Wilson, Sonsini, Goodrich & Rosati and Douglas J. Clark for Interveners and Respondents.
OPINION
LEVY, J.
Appellants, California Building Industry Association, Coalition for Urban Renewal Excellence, Valley Taxpayers Coalition, and Modesto Chamber of Commerce, challenge the validity of two rules adopted by respondent, San Joaquin Valley Air Pollution Control District (District). These rules, commonly referred to as indirect source review (ISR), are intended to encourage developers to reduce indirect pollution, i.e., mobile source emissions, caused by new development projects. Under ISR, the developer can reduce emissions by incorporating pollution-reducing features *125 in the project, or by paying a fee to fund offsite projects that will reduce emissions, or by a combination of the two.
The trial court concluded that the District had the power to adopt regulations to mitigate the effects of indirect source pollution, which included the power to impose fees on persons who cause the pollution. The court further found that these fees were valid regulatory fees.
Appellants contend the ISR fees are development fees subject to the Mitigation Fee Act (Gov. Code, § 66000 et seq.) and that they violate that act. Appellants further argue that, even if the ISR fees qualify as regulatory fees, they are invalid as such. According to appellants, the District did not employ a valid method for creating the fees, did not estimate or compute the total costs of the ISR program, and does not have a basis for fairly apportioning the fees. Finally, appellants assert that the District lacked the authority to impose these fees.
As discussed below, the District had the power to adopt the ISR rules and the fees imposed pursuant to those rules are valid regulatory fees. Accordingly, the judgment will be affirmed.
BACKGROUND
1. The District's authority and responsibilities.
Two statutory schemes regulate air quality in California, the federal Clean Air Act (FCAA) (42 U.S.C. § 7401 et seq.) and the California Clean Air Act (CCAA) (Health & Saf. Code,[1] § 39000 et seq.). Under the FCAA, the Environmental Protection Agency (EPA) is authorized to issue national air quality standards setting the maximum allowable concentration of a given pollutant. (Safe Air For Everyone v. U.S. E.P.A. (9th Cir. 2007) 475 F.3d 1096, 1100.) To assure that these air quality standards are met, the states are required to attain air quality of specified standards and to do so within a specified period of time. (Train v. Natural Resources Def. Council (1975) 421 U.S. 60, 64-65 [43 L. Ed. 2d 731, 95 S. Ct. 1470].) To accomplish this goal, states must develop state implementation plans (SIP's) proposing methods for maintaining air quality and submit those SIP's to the EPA for review and approval. (Safe Air For Everyone v. U.S. E.P.A., supra, 475 F.3d at p. 1099.) A state may include an ISR program in its SIP. (42 U.S.C. § 7410(a)(5)(A).) EPA-approved SIP's have the force and effect of federal law. (Ibid.) Nevertheless, each state has the primary responsibility for assuring air quality within its entire geographic area. (Train v. Natural Resources Def. Council, supra, 421 U.S. at p. 64.)
*126 The CCAA takes a regional approach to protecting ambient air quality. (§ 39001.) Local and regional authorities, such as the District, have the primary responsibility for control of air pollution from all sources other than vehicular. The California Air Resources Board (CARB) is responsible for the control of vehicular sources of air pollution. (§ 39002.) Nevertheless, air pollution control districts have authority to mitigate vehicle emissions in their use. For example, a district must adopt transportation measures (§ 40717); is to pay particular attention to reducing the emissions from transportation (§ 40910); and may adopt regulations to reduce the number or length of vehicle trips (§ 40716, subd. (a)(2)).
California districts are also authorized to regulate indirect sources of air pollution (§ 40716, subd. (a)(1)) and must include provisions to develop indirect source control programs in their attainment plans (§ 40918, subd. (a)(4)). Further, the District is specifically required to assess fees on indirect sources of emissions in the San Joaquin Valley to recover the costs of District programs related to these sources. (§ 40604.)
The CCAA does not define the term "indirect source." However, under the FCAA, "indirect source" is defined as "a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution." (42 U.S.C. § 7410(a)(5)(C).)
The District is responsible for controlling air pollution in the region formed by eight counties in the San Joaquin Valley (Valley). (§ 40600.) In 1993, the Valley was classified as serious nonattainment under federal standards for particulate matter with particle size less than or equal to 10 microns (PM10). In 2004, the Valley was classified as extreme nonattainment for the federal one-hour ozone standards. PM10 can be directly emitted geologic material (dust) or can be formed when precursor emissions, such as nitrogen oxides (NOx) and volatile organic compounds (VOC's), react chemically. Ground level ozone (smog) is formed during summer months when NOx and VOC's react in the presence of sunlight.
Due to the Valley's serious nonattainment federal classification for PM10, the District was required to develop an attainment plan that included both a demonstration of future PM10 attainment and provisions to assure that the best available PM10 control measures would be implemented within four years. (42 U.S.C. § 7513a(b).) The District concluded that the rapid Valley growth, and concomitant increase in motor vehicle use, would result in *127 increases in PM10 emissions. Therefore, as part of its attainment plan, the District committed to adopt ISR regulations to mitigate this increase. The EPA approved this course of action as part of the District's PM10 plan in 2004. (69 Fed.Reg. 30006 (May 26, 2004).)
The District was also required to implement all reasonably available control measures on ozone sources because of the Valley's extreme nonattainment ozone classification. This is reflected in the District's extreme ozone attainment plan, which includes the ISR commitment.
2. The District's ISR program.
The District adopted its ISR program, denominated rule 9510, on December 15, 2005, to fulfill its PM10 and ozone plan commitments. Rule 3180, which provides the means for the District to recover its costs of administering and operating rule 9510, was also adopted. The development process for these rules began in June 2003 and included public meetings and workshops. The District received and responded to public comments and conducted analyses of cost-effectiveness, socioeconomic impact, emissions reduction, and environmental impact.
The purpose of rule 9510 is to reduce indirect sources of NOx and PM10 emissions from new development projects. An "indirect source" is defined as "any facility, building, structure, or installation, or combination thereof, which attracts or generates mobile source activity that results in emissions of" NOx and PM10.
Rule 9510 requires a certain amount of emission reductions from each new development project. The District found that, although the number of vehicle miles traveled is increasing valleywide, the majority of new NOx emissions are attributable to new development. However, to ensure that each developer is responsible for only its share of emissions, the District "discounts" each project's NOx emissions in two ways. First a 50 percent emissions credit is given. This ensures that a development is only charged for the vehicle trips that would not have occurred but for the development. In other words, only one-way trips from the site are counted. Second, credit is given for the increasingly stringent state and federal vehicle tailpipe controls that will reduce NOx over time.
In contrast, operational PM10 emissions (dust) from a project do not decline over time. Accordingly, rule 9510 requires mitigation equal to half of the emissions after build-out for 10 years. The end result is that projects must reduce their operational NOx emissions by 33 percent and their operational PM10 emissions by 50 percent over a 10-year period.
*128 A developer can accomplish the required emission reductions onsite by incorporating measures to reduce vehicle miles traveled, vehicle trips and/or areawide sources of emissions such as fireplaces, wood stoves and landscape equipment. Alternatively, the emissions can be reduced through paying a fee to fund offsite emission reducing projects. Finally, the developer can use a combination of onsite emission reduction measures and a fee to fund offsite emission reduction projects.
Under rule 9510, the proponent of a new development project is required to submit an air quality impact assessment (AIA) to the District before or at the project's final discretionary approval by the approving public agency. Either the developer or District staff prepares the AIA by using an approved model to quantify the emissions attributable to the new development. The AIA additionally identifies any voluntary onsite reduction measures that are components of the project design. These onsite reduction measures include increased energy efficiency, electrical landscape maintenance equipment, elimination of wood-burning devices, increased residential densities, locating near public transit, incorporating mixed uses (residential/retail), transportation management demand programs, and incorporating pedestrian/bicycle facilities. The incorporation of such onsite measures can substantially reduce potential offsite fees.
The project information, including any voluntary onsite reduction measures, is input into the urban emissions model (URBEMIS), a District-approved computer model that quantifies NOx and PM10 attributable to a development. Another model calculates construction emissions. If the onsite reduction measures do not reduce 33 percent of the project's NOx emissions and 50 percent of the PM10 emissions, the developer is required to pay a fee to the District for offsite emission reduction projects.
Fees paid under rule 9510, if any, are directly proportional to tons of NOx and PM10 that are not mitigated by the developer through onsite features. The per-ton fees are based on the historical and projected cost to achieve reductions through District emission reduction programs.
Rule 9510 fees can only be used for reduction programs. The collected fees are segregated by pollutant from other District revenue in a separate mitigation fund and are used only to "buy" offsite emission reduction projects. For every ton of NOx and PM10 not mitigated by the developer onsite, the District purchases an equivalent reduction of that same pollutant offsite.
Before adopting the ISR program, the District prepared a detailed spending plan demonstrating how offsite mitigation fees collected under rule 9510 would be spent. At that time, the District identified more than $400 million in cost-effective projects that were available.
*129 3. The underlying lawsuit.
Appellants filed a complaint and petition for writ of mandate challenging the District's adoption of the ISR regulations, i.e., rules 9510 and 3180. In their complaint and petition, appellants alleged that these rules imposed invalid development fees, regulatory fees, exactions, state agency fees, and/or special taxes, were unconstitutional, and were adopted in excess of the District's authority. Following a bench trial, the court ruled in the District's favor on all causes of action.
On appeal, appellants have raised only certain of these claims. Appellants argue that the ISR fees are invalid both as development fees and regulatory fees and that the District did not have the authority to impose the fees.
DISCUSSION
1. Standard of review.
(1) The Legislature has granted air pollution control districts the authority to adopt and implement regulations to reduce or mitigate emissions from indirect and areawide sources of air pollution. (§ 40716, subd. (a).) Accordingly, the District's adoption of rules 9510 and 3180 was a quasi-legislative action. (Cf. Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal. 4th 1, 10 [78 Cal. Rptr. 2d 1, 960 P.2d 1031].)
(2) In reviewing quasi-legislative actions, the authority of the trial court "is limited to determining whether the decision of the agency was arbitrary, capricious, entirely lacking in evidentiary support, or unlawfully or procedurally unfair." (Fullerton Joint Union High School Dist. v. State Bd. of Education (1982) 32 Cal. 3d 779, 786 [187 Cal. Rptr. 398, 654 P.2d 168].) Courts exercise such limited review out of deference to the separation of powers between the Legislature and the judiciary, to the legislative delegation of administrative authority to the agency, and to the presumed expertise of the agency within its scope of authority. (California Hotel & Motel Assn. v. Industrial Welfare Com. (1979) 25 Cal. 3d 200, 211-212 [157 Cal. Rptr. 840, 599 P.2d 31].) However, the agency must act within the scope of its delegated authority, employ fair procedures, and be reasonable. "A court must ensure that an agency has adequately considered all relevant factors, and has demonstrated a rational connection between those factors, the choice made, and the purposes of the enabling statute." (Id. at p. 212, fn. omitted.) Nevertheless, in technical matters requiring the assistance of experts and the study of scientific data, courts will permit agencies to work out their problems with as little judicial interference as possible. (Western States *130 Petroleum Assn. v. South Coast Air Quality Management Dist. (2006) 136 Cal. App. 4th 1012, 1018 [39 Cal. Rptr. 3d 354] (Western States Petroleum).)
The appellate court reviews the trial court's decision de novo under the same standard. (Western States Petroleum, supra, 136 Cal.App.4th at p. 1018.)
2. The ISR fees are regulatory fees, not development fees.
(3) There are three general categories of fees or assessments that are distinguishable from special taxes and thus can be imposed without a two-thirds majority vote. (Sinclair Paint Co. v. State Bd. of Equalization (1997) 15 Cal. 4th 866, 874 [64 Cal. Rptr. 2d 447, 937 P.2d 1350] (Sinclair Paint).) These categories are: "(1) special assessments, based on the value of benefits conferred on property; (2) development fees, exacted in return for permits or other government privileges; and (3) regulatory fees, imposed under the police power." (Ibid.)
(4) A fee is considered a development fee if it is exacted in return for building permits or other governmental privileges so long as the amount of the fee bears a reasonable relation to the development's probable costs to the community and benefits to the developer. (Sinclair Paint, supra, 15 Cal.4th at p. 875.) Under the Mitigation Fee Act (Gov. Code, § 66000 et seq.), such a fee is defined as "a monetary exaction other than a tax or special assessment... that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project ...." (Gov. Code, § 66000, subd. (b).) When a fee is imposed "as a condition of approval of a development project," the local agency must meet specific statutory requirements, including identifying the purpose of the fee and the use to which the fee is to be put, and determining how there is a reasonable relationship between the fee and the development project. (Gov. Code, § 66001, subds. (a), (b).) Also, a fee imposed "as a condition of approval of a proposed development ... or development project" is limited to the estimated reasonable cost of providing the service or facility. (Gov. Code, § 66005, subd. (a).)
(5) In contrast, when a fee is charged for the associated costs of regulatory activities and does not exceed the reasonable cost of carrying out the purposes and provisions of the regulation, it falls within the category of a regulatory fee. (California Assn. of Prof. Scientists v. Department of Fish & Game (2000) 79 Cal. App. 4th 935, 945 [94 Cal. Rptr. 2d 535] (California Assn. of Prof. Scientists).) Regulatory fees are not dependent on government-conferred benefits or privileges and are imposed under the police power. (Sinclair Paint, supra, 15 Cal.4th at p. 875.)
*131 Appellants contend that the ISR fees are development fees subject to the Mitigation Fee Act and that the fees violate the act. According to appellants, the ISR fees meet the Government Code section 66000, subdivision (b), definition of development fees because they were imposed "in connection with approval of a development project" for the purpose of defraying the cost of public facilities, i.e., public services or community amenities, related to the development project. In other words, they are fees "that alleviate the effects of development on the community." (Barratt American, Inc. v. City of Rancho Cucamonga (2005) 37 Cal. 4th 685, 696 [37 Cal. Rptr. 3d 149, 124 P.3d 719] (Barratt American).)
(6) However, "a fee does not become a `development fee' simply because it is made in connection with a development project." (Barratt American, supra, 37 Cal.4th at p. 699.) Rather, approval of the development project must be conditioned on payment of the fee. (Ibid.; Capistrano Beach Water Dist. v. Taj Development Corp. (1999) 72 Cal. App. 4th 524, 529-530 [85 Cal. Rptr. 2d 382].) The Mitigation Fee Act specifically limits its application to situations where the fee or exaction is imposed as a condition of approval of a development project. (Gov. Code, §§ 66001, subds. (a), (b), 66005, subd. (a), 66006, subd. (c).)
(7) Here, approval of a development project is not conditioned on the developer's payment of the ISR fees. The ISR fees are not exacted in return for permits or other government privileges. Thus, the ISR fees are not development fees and, therefore, are not subject to the Mitigation Fee Act. Rather, the fees are regulatory in nature. They are designed to mitigate growth in air pollution from new development in order to achieve and maintain federal air quality standards. Accordingly, this court need not decide whether the District complied with the Mitigation Fee Act when adopting the ISR regulations.
3. The ISR fees are valid regulatory fees.
(8) As discussed above, a regulatory fee is charged to cover the reasonable cost of a service or program connected to a particular activity. Such a fee may be validly imposed under the police power for the purpose of legitimate regulation when the fee does not exceed the amount required to carry out the purposes and provisions of the regulation and is not levied for unrelated revenue purposes. (Sinclair Paint, supra, 15 Cal.4th at p. 876; San Diego Gas & Electric Co. v. San Diego County Air Pollution Control Dist. (1988) 203 Cal. App. 3d 1132, 1146, fn. 18 [250 Cal. Rptr. 420] (San Diego Gas & Electric).)
*132 (9) Regulatory fees are not compulsory. Rather, fee payers have some control both over when, and if, they pay any fee, i.e., when or if they elect to engage in a regulated activity, and/or the amount of the fee they are compelled to pay. For example, fee payers can modify their conduct to pollute less or consume less water. (California Assn. of Prof. Scientists, supra, 79 Cal.App.4th at p. 950; Brydon v. East Bay Mun. Utility Dist. (1994) 24 Cal. App. 4th 178, 194 [29 Cal. Rptr. 2d 128]; Terminal Plaza Corp. v. City and County of San Francisco (1986) 177 Cal. App. 3d 892, 907 [223 Cal. Rptr. 379].) Further, the absence of any perceived "benefit" accruing to the fee payer does not invalidate a regulatory fee. (California Assn. of Prof. Scientists, supra, 79 Cal.App.4th at p. 945.)
"`[T]o show a fee is a regulatory fee and not a special tax, the government should prove (1) the estimated costs of the service or regulatory activity, and (2) the basis for determining the manner in which the costs are apportioned, so that charges allocated to a payor bear a fair or reasonable relationship to the payor's burdens on or benefits from the regulatory activity.'" (Sinclair Paint, supra, 15 Cal.4th at p. 878.) In other words, there must be a nexus between the amount of the fee and the cost of the service for which the fee is charged. (Id. at p. 881.)
Appellants contend the ISR exacts an invalid regulatory fee. According to appellants, the District did not use a valid method to calculate the fees, did not prove the estimated costs of the regulatory activity, and did not prove that its basis for apportioning the costs of the program bear a fair or reasonable relationship to the payer's burdens on the District.
a. The validity of the District's fee calculation method.
(10) A valid fee calculation method is one that establishes a reasonable relationship between the fee charged and the burden posed by the development. (Shapell Industries, Inc. v. Governing Board (1991) 1 Cal. App. 4th 218, 235 [1 Cal. Rptr. 2d 818].) However, proportionality of the fees, i.e., whether the fees collected exceed the cost of the regulatory program they are collected to support, need not be proved on an individual basis. Rather, the agency is allowed to employ a flexible assessment of proportionality within a broad range of reasonableness in setting fees. (California Assn. of Prof. Scientists, supra, 79 Cal.App.4th at pp. 948-949.)
Here, a new development project's emissions and credits for onsite mitigation measures are determined by a computer model. A fee is charged based on a dollar-per-ton estimate of the cost for the District to reduce the emissions offsite that the developer does not mitigate onsite.
Appellants argue the District failed to establish a reasonable relationship between the fee charged and the burden posed by a new development. *133 According to appellants, the calculation method improperly charges for the total emissions and total vehicle trips of a development rather than the net increase in emissions and the net increase in vehicle trips. In other words, the fee is calculated as if the immediately preceding land use at the site produced zero emissions and zero vehicle trips.
However, contrary to appellants' argument, the ISR regulations do account for existing emissions. The emission reduction targets are based on predicted growth in emissions from new development. The reconstruction of any development project rebuilt to essentially the same use and intensity is excluded from ISR. Thus, unlike the situation in Warmington Old Town Associates v. Tustin Unified School Dist. (2002) 101 Cal. App. 4th 840 [124 Cal. Rptr. 2d 744] (school impact fees assessed on replacement housing), cited by appellants, the fees are not unrelated to the development's impact. Further, in its calculations, the District gives every development project subject to ISR an automatic 50 percent credit in both its NOx and PM10 emissions. This way a fee is not charged for trips that are the responsibility of another new source or an existing indirect source.
Appellants further contend that URBEMIS, the computer model used by the District to calculate air quality impacts from new development, is flawed. URBEMIS is a project level model. Appellants assert that URBEMIS yields excessive fees on both the regional and individual levels. According to appellants, the travel demand model (TDM) computer program, which is used by regional transportation planning agencies to calculate travel impacts within the planning region, is more accurate and appropriate.
However, before the rules were adopted, the District undertook extensive efforts to ensure that URBEMIS was the best tool for ISR. The District hired consultants to recommend the most suitable model and identify areas for improvement. After receiving a report recommending URBEMIS, the District initiated an extensive statewide effort to update the URBEMIS model. After further recommendations were incorporated into the report, a peer review by several well-respected researchers in the field took place. Thereafter, those recommendations were also incorporated and approved.
Appellants' criticism of URBEMIS indicates no more than the existence of a difference in expert opinion. Where, as here, review is of a quasi-legislative action, a court will interfere as little as possible in such technical matters. (Western States Petroleum, supra, 136 Cal.App.4th at p. 1018.) Rather, it was up to the District to decide which expert opinion to accept. (Id. at p. 1020.)
As discussed above, the administrative record provides considerable evidence in support of the District's determination that URBEMIS is an *134 appropriate computer model for ISR. Accordingly, it must be concluded that the District's use of URBEMIS is reasonable.
Finally, appellants argue that the fee is a penalty calculated to incentivize project design changes and thus fees are not imposed in proportion to a project's actual emissions. Appellants posit that a developer could reduce fees by submitting a "dirty" version of a project and then "clean it up" with design changes. This way, appellants contend, two identical projects could pay different fees.
However, the analysis of every development begins with the unmitigated NOx and PM10 emissions as calculated by the approved model. This is the operational baseline. Thereafter, the mitigation measures are taken into account. Thus, it does not matter whether the project is proposed as "clean" or "dirty." The analysis is the same because the starting place for each project is the same, i.e., unmitigated.
In sum, the District established that it employs a valid method for calculating the ISR fees.
b. The estimated costs of the regulatory activity.
Appellants contend the fees are invalid because there is no estimate of the total costs of the ISR program but rather only an estimate of the revenue the District expects the program to generate. However, the cost for this program, i.e., the fee amount, is dependent on how the developers achieve the necessary reductions in emissions. The balance of emissions not reduced by onsite mitigation measures are assessed a flat fee based on what it costs the District per ton to fund offsite emission reduction projects. Thus, the program cost is the cost per ton of the offsite emission reduction necessitated by the development. This cost is calculated and the fee charged accordingly. Consequently, the fees are calculated before the specific reduction projects are identified and funded. Nevertheless, the District has estimated the emission reduction cost through a careful analysis of past and future emission reduction projects. The fees are then charged in direct proportion to the amount of NOx or PM10 that the developer chooses not to mitigate onsite. Therefore, contrary to appellants' position, the District has established the estimated costs of the program.
c. Apportionment of the program costs.
As discussed above, the costs of a regulation must be apportioned so that the amount of the fee bears a reasonable relationship to the social or economic burden caused by the regulated entity. (Sinclair Paint, supra, 15 *135 Cal.4th at p. 881.) However, certainty is not required. The record need only demonstrate a reasonable relationship, not an exact relationship, between the fees to be charged and the estimated cost of the program. (City of Dublin v. County of Alameda (1993) 14 Cal. App. 4th 264, 283 [17 Cal. Rptr. 2d 845].)
The District produced a lengthy and detailed staff report regarding the ISR rules. Regarding the need for the ISR program, the District determined that there has been, and will continue to be, tremendous population increases in the Valley. The District further concluded that growth in new development parallels these population increases and that such new development contributes to an increase in air pollution. The report explains in detail how the District reached these conclusions and calculated the projected increase in NOx and PM10 emissions attributable to new development. The District therefore demonstrated a connection between population growth, new development, and increased emissions.
The report also outlines the District's analysis of indirect source emissions and its method and rationale for determining the share of emissions attributable to individual development projects, i.e., an explanation of the requisite reasonable fee-cost relationship. This includes estimates of vehicle trips per average household, projections of the reductions necessary to counteract the growth in emissions, and the calculations for allocating the pollution attributable to the development.
Appellants contend the District has not established that the ISR fees are adequately apportioned. According to appellants, the District's methodology does not accurately calculate the "burdens" caused by new development in the form of increased total vehicle miles traveled (VMT) and the concomitant NOx and PM10 emissions. Appellants argue that the proper starting point for apportionment is the VMT for the region as a whole, not the VMT for an individual project as is the case in the District's calculation. Appellants are again arguing that the District should use the TDM computer model, not URBEMIS, in calculating the ISR fees.
However, as discussed above, the District diligently analyzed various computer models and determined that URBEMIS was the appropriate tool for calculating the ISR fees. The calculation need not be exact, just reasonable. Appellants' criticisms are nothing more than a difference in expert opinion. Contrary to appellants' position, the District has shown that the fees charged are reasonably related to the amount of pollution, or "burden," attributable to each new development. The more a new development increases air pollution, the more the developer pays.
*136 4. The District had the authority to adopt the ISR regulations.
Appellants contend the District exceeded its authority in adopting the ISR regulations. Based on the fact that CARB is responsible for the control of vehicular sources of air pollution, appellants characterize the indirect source fees as the District's "thinly-disguisedand invalidattempt to do `indirectly' that which it is prohibited from doing directlyimposing fees on emissions" that are generated by motor vehicles. In support of this position, appellants claim that not only did the District fail to identify any statutory authority for these fees, but in fact, no such authority exists. Appellants also assert that the District lacked authority to define "indirect sources" to include new development that does not in itself emit pollutants.
First, contrary to appellants' argument, the District did identify the source of its authority to adopt the ISR rules as required under section 40727. The resolution adopting rules 9510 and 3180 cited to sections 40716 (districts are authorized to regulate indirect sources of air pollution), 42311, subdivision (g) (a district may adopt a schedule of fees to be assessed on indirect sources of emissions), and 40604 (San Joaquin Valley Unified Air Pollution Control District shall adopt a schedule of fees to be assessed on indirect sources of emissions) in the recitals. The fact that the District did not again specify these authorities in the findings section of the resolution does not alter this conclusion. The District identified its statutory authority.
(11) Further, it is clear from these statutes that the District had the authority to adopt the ISR rules. Not only is the District authorized to regulate and assess fees on indirect sources of emissions under sections 40716 and 42311, section 40604 requires the District to assess such fees. Under section 40716, subdivision (a), the District may adopt regulations to "[r]educe or mitigate emissions from indirect and areawide sources of air pollution" and to "[e]ncourage or require the use of measures which reduce the number or length of vehicle trips." Section 40604 states that the San Joaquin Valley Unified Air Pollution Control District board "shall adopt, by regulation, a schedule of fees to be assessed on areawide or indirect sources of emissions that are regulated, but for which permits are not issued, by the district to recover the costs of district programs related to these sources." (§ 40604, subd. (a).) Thus, the District has specific statutory authority to regulate and assess fees on indirect pollution sources. This is precisely what it did in adopting the ISR rules.[2]
*137 Finally, appellants argue that the District lacked authority to define "indirect source" and that its definition is too broad. Appellants question how a housing development, which does not in and of itself cause any significant emissions, can be an indirect source of pollution.
(12) "Indirect source" is not defined in the CCAA. However, as an agency acting in a quasi-legislative manner, the District has the power to elaborate the meaning of key statutory terms. (Ramirez v. Yosemite Water Co. (1999) 20 Cal. 4th 785, 800 [85 Cal. Rptr. 2d 844, 978 P.2d 2].)
(13) Moreover, the District's definition closely parallels both the federal and CARB definitions of "indirect source." As noted above, the FCAA defines "indirect source" as "a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution." (42 U.S.C. § 7410(a)(5)(C).) New housing developments certainly fall within this category as buildings and structures. Similarly, CARB defines "indirect source" as "`any facility, building, structure or installation, or combination thereof which generates or attracts mobile source activity that results in the emissions of any pollutant for which there is a state ambient air quality standard.'" (76 Ops.Cal.Atty.Gen., supra, at p. 13.)
Based on the above definitions, the Attorney General concluded that "an indirect source may be considered to be any development which attracts direct vehicular sources of air pollution." (76 Ops.Cal.Atty.Gen., supra, at p. 13.) This would, of course, include a new housing development. The fact that a housing development does not itself emit pollutants is what causes it to be an "indirect source" of pollution. Otherwise, it would be a direct source. The District's definition of "indirect source" is not only reasonable but is also the only logical way to interpret the term.
In sum, the District is not attempting to do "indirectly" that which it is prohibited from doing directly. The District is specifically authorized to both regulate and assess fees on developments that attract mobile sources of pollution, i.e., emissions generated by motor vehicles.[3]
*138 DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to respondent.
Vartabedian, Acting P. J., and Cornell, J., concurred.
NOTES
[1] All further statutory references are to the Health and Safety Code unless otherwise indicated.
[2] Appellants' reliance on three opinions of the Attorney General is misplaced. Opinion No. 91-208 and Opinion No. 92-109 analyze whether districts can directly or indirectly impose parking fees for the purpose of reducing pollution. (74 Ops.Cal.Atty.Gen. 196 (1991); 75 Ops.Cal.Atty.Gen. 256 (1992).) Moreover, in concluding that such fees are not valid, the Attorney General apparently overlooked section 42311, subdivision (g), which specifically authorizes districts to assess fees on indirect sources of pollution. Thus these opinions are not only inapposite, but the analyses are incomplete. Opinion No. 92-519 concerns whether a district may impose a permit system upon indirect sources of air pollution. (76 Ops.Cal.Atty.Gen. 11 (1993).) Again, this opinion does not provide authority for appellants' position.
[3] Appellants' motion and request for judicial notice, filed on December 4, 2008, is denied.
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178 Cal. App. 4th 1225 (2009)
CALIFORNIA UNIONS FOR RELIABLE ENERGY et al., Plaintiffs and Appellants,
v.
MOJAVE DESERT AIR QUALITY MANAGEMENT DISTRICT et al., Defendants and Respondents.
No. E046687.
Court of Appeals of California, Fourth District, Division Two.
October 30, 2009.
As modified November 16, 2009.
CERTIFIED FOR PARTIAL PUBLICATION[*]
*1230 Adams Broadwell Joseph & Cardozo, Marc D. Joseph and Gloria D. Smith for Plaintiffs and Appellants.
Edmund G. Brown, Jr., Attorney General, J. Matthew Rodriguez, Chief Assistant Attorney General, Ken Alex, Assistant Attorney General, Sally Magnani and Susan L. Durbin, Deputy Attorneys General, for the State of California as Amicus Curiae on behalf of Plaintiffs and Appellants.
Best Best & Krieger, Michelle Ouellette, Brian D. Mabee; and Karen K. Nowak, District Counsel, for Defendants and Respondents.
OPINION
RICHLI, Acting P. J.
In 2007, the Mojave Desert Air Quality Management District (the District) adopted "Rule 1406."[1] Rule 1406 concerns the use of road pavingwhich reduces airborne dustto offset increases in airborne dust as well as other forms of particulate air pollution.
The parties offer strikingly different characterizations of Rule 1406.
According to the District, Rule 1406 merely provides a "protocol" to be used in applying for, calculating, and issuing paving offsets. It does not authorize any actual road paving; hence, it cannot possibly have any environmental effects. Any future paving offsets will be subject to environmental review if and when applicants seek them, but at this point, their environmental effects are speculative.
Based on this characterization, the District found that its adoption of Rule 1406 was exempt from environmental review under the California *1231 Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.) under the "Class 8" categorical exemption, which applies to "actions taken by regulatory agencies . . . to assure the maintenance, restoration, enhancement, or protection of the environment where the regulatory process involves procedures for protection of the environment." (Cal. Code Regs., tit. 14, § 15308.)
By contrast, according to plaintiffs,[2] Rule 1406 "would allow the paving of up to 5,000 miles of dirt roads," and thus it would have adverse environmental effects. Moreover, the fine particulate matter produced by combustion is a worse pollutant than the coarse particulate matter produced by unpaved roads, so that using the latter to offset the former would, in itself, have adverse environmental effects. Plaintiffs conclude that Rule 1406 does not qualify for the claimed exemption.
CEQA does not demand the impossible; it simply requires public agencies to consider the reasonably foreseeable environmental effects of their actions. Plaintiffs may have overstated their case a bit by harping on the unlikely possibility that Rule 1406 may result in the paving of all 5,000 miles of unpaved road within the District's jurisdiction. Still, it is reasonably foreseeableindeed, it is almost undeniablethat the adoption of Rule 1406 will result in some road paving. Plaintiffs showed that road paving would tend to have adverse environmental effects; the District, for its part, failed to show that these effects would be either de minimis or too speculative to analyze. Accordingly, there was insufficient evidence to support the District's finding that the adoption of Rule 1406 would "assure the maintenance, restoration, enhancement, or protection of the environment. . . ." (Cal. Code Regs., tit. 14, § 15308, italics added.)
I
FACTUAL BACKGROUND
A. General Legal Background.
Particulate matter (PM) refers to very small solid or liquid particles that can be suspended in the atmosphere. Particulate matter consisting of particles that are 10 micrometers or less in diameter (PM10) is considered an air *1232 pollutant. (40 C.F.R. § 50.6(c) (2009).) PM10 can be further subclassified into fine particles, which are 2.5 micrometers or less in diameter (PM2.5) (40 C.F.R. § 50, appen. L (2009)) and coarse particles, which are between 10 and 2.5 micrometers in diameter (PM10-2.5) (40 C.F.R. § 50, appen. O (2009)).
The federal Clean Air Act (42 U.S.C. § 7401 et seq.) requires the Environmental Protection Agency (EPA) to prescribe national ambient air quality standards (Standards). (42 U.S.C. § 7409(a), (b).) These include separate Standards for PM10 (40 C.F.R. § 50.6(a) (2009)) and PM2.5 (40 C.F.R. § 50.7 (2009)). Areas that fail to meet the Standards are designated as "nonattainment" areas. (42 U.S.C. § 7407(d).)
Each state is required to adopt a state implementation plan (Plan) that "provides for implementation, maintenance, and enforcement" of the Standards. (42 U.S.C. § 7410(a); see also id., § 7407(a).) A Plan must include a permit program for major new or modified stationary sources of air pollution in nonattainment areas (new source review). (42 U.S.C. §§ 7410(a)(2)(C), 7502(c)(5), 7503.) A permit for a new source may be granted only if it obtains emission reduction credits to offset the increased emissions that it will produce. (42 U.S.C. § 7503(a)(1)(A), (c).)
The District "is the local agency with the primary responsibility for the development, implementation, monitoring, and enforcement of air pollution control strategies" for most of the Mojave Desert Air Basin. (Health & Saf. Code, § 41211; see also Health & Saf. Code, §§ 41200-41267; Cal. Code Regs., tit. 17, § 60109 [defining the Mojave Desert Air Basin].) The Legislature intended the District "[t]o successfully develop and implement a comprehensive program for the attainment and maintenance of state and federal ambient air quality standards . . . ." (Health & Saf. Code, § 41200, subd. (d).) To that end, the District has the power to make rules that become part of the state Plan. (Health & Saf. Code, § 41230; see generally id., § 41200 et seq.)
Parts of the District have been designated as nonattainment areas for PM10. (40 C.F.R. § 81.305 (2009); 67 Fed.Reg. 50805, 59005 (Aug. 6, 2002); Cal. Code Regs., tit. 17, § 60205.) However, the District does not include any nonattainment areas for PM2.5. (40 C.F.R. § 81.305 (2009); Cal. Code Regs., tit. 17, § 60210.)
*1233 The following additional facts are taken from the administrative record.[3]
B. Rule 1406.
"Traditional" offset methods include shutting down an existing facility or controlling the emissions from it. The District has identified road paving as an acceptablealbeit "`non-traditional'"method of offsetting PM10 emissions. The District's jurisdiction includes approximately 5,000 miles of unpaved roads.
Rule 1406 was derived from a similar rule adopted in Maricopa County, Arizona. Its purpose is to ensure that PM10 offsets for road paving meet federal requirements that all offsets must be "[r]eal," "[q]uantifiable," "[p]ermanent," "[e]nforceable" and "[s]urplus." (See 42 U.S.C. § 7503(a); 40 C.F.R. § 51, appen. S, § IV.C.3.(i)(1) (2009).)[4]
Rule 1406 is too long to quote here in its entirety. Accordingly, we summarize its principal provisions.
It states that paving offsets "may be used as offsets in accordance with" other District rules governing new source review. It provides two mathematical formulas for determining the PM10 emissions from paved and unpaved roads, respectively, in units of pounds per vehicle mile traveled. It then provides that "[t]he [PM10] emission reductions associated with paving an unpaved [road] shall be calculated as the difference . . . between the emissions from the road in the unpaved condition and the emissions from the road in the paved condition." The resulting reduction in PM10 emissions can be used to offset an increase in PM10 emissions on a one-to-one basis. (See also Mojave Desert Air Quality Management District Rule 1305(C), available at [as of Oct. 30, 2009].)
Former Rule 1406 also prescribed procedures for approving or denying an application for paving offsets. It stated, "The [District] shall determine whether to issue or deny [paving offsets] in compliance with the standards set forth in subsection (C)(5) . . . ." Subsection (C)(5) then states:
*1234 "(a) The [District] shall only issue [paving offsets] pursuant to this Rule, if the emission reductions will be Real, Quantifiable, Permanent, Enforceable and Surplus.
"(b) The [District] shall only issue [paving offsets] pursuant to this rule . . . in the amount determined necessary for construction of the new or modified facility or emissions unit . . . ."
Finally, former Rule 1406 provided: "After the [District] has determined to issue the [paving offsets] the [District] shall submit the proposed [paving offsets] for public notice and comment . . . ." "Upon the expiration of the public comment period; after review of comments accepted, if any; and upon payment of the appropriate analysis fee, if any; the [District] shall issue the [paving offsets] . . . ."
C. The Proposed Class 8 Categorical Exemption Finding.
A staff report acknowledged that the adoption of Rule 1406 was a "`project'" within the meaning of CEQA. It stated, however: "The potential environmental impacts of compliance with the adoption of proposed Rule 1406 are positive to the environment, as proposed Rule 1406 will encourage additional road paving with commensurate reduction in particulate emissions from unpaved road dust entrainment."[5] It also stated: "The adoption of proposed Rule 1406 is exempt from CEQA review because it will not create any adverse impacts on the environment. Because there is no[] potential that the adoption might cause the release of additional air contaminants or create any adverse environmental impacts, a Class 8 categorical exemption (14 Cal. Code Reg[s]. § 15308) applies."
D. Plaintiffs' Comments.
In response to the staff report, plaintiffs submitted 86 pages of comments. Their comments were supported by the in-depth analyses of Dr. Petra Pless and David P. Howekamp, who were duly qualified expert environmental consultants.
Plaintiffs objected that the adoption of Rule 1406 could have a number of potentially significant environmental impacts. In this appeal, they focus on the following three.
*1235 1. The differences between combustion-related PM10 and road dust PM10.
New stationary sources of PM10, such as power plants, tend to generate PM10 through combustion.[6] Plaintiffs commented that "[c]ombustion-related PM10 is qualitatively different from entrained road dust PM10." PM10 from road dust is mostly coarse, with only about 5 to 10 percent PM2.5. By contrast, PM10 from combustion is mostly fine; it can be 98 to 100 percent PM2.5. "Thus," according to plaintiffs, "the District is effectively trading one air pollution problem for another."
PM2.5 differs from PM10-2.5 in its tendency to spread through the atmosphere. Larger particles fall out of the air faster than smaller particles. Also, PM10-2.5 particles from road dust are kicked up by vehicles at ground level, whereas PM2.5 particles from combustion "typically exit through tall stacks with high exit velocities . . . ." Thus, PM10 from road dust travels only a short distance and settles not far from the road, whereas PM2.5 from combustion is "regionally distributed."
PM2.5 also differs from PM10-2.5 in its tendency to cause disease. "Fine particle pollution" is "link[ed] . . . with serious morbidity and mortality." Exposure to fine PM has been shown to be associated with both lung cancer and heart disease.
In addition, plaintiffs noted that the very activity of paving roads would in itself cause PM2.5 emissions, including diesel exhaust, a "[p]articularly damaging" source of fine PM, "contain[ing] nearly 40 toxic substances."
Plaintiffs quoted a letter from the State Air Resources Board (the Board) stating: "`Fine particulate matter emissions are a serious human health concern.'" The Board explained: "`[F]ine particulates . . . (PM2.5) have unique pulmonary dynamics. They selectively penetrate into lung alveoli. Whatever chemicals the particulates have absorbed . . . are also transported into the body.'" The Board concluded: "`We believe there is no technical justification for allowing PM emission reductions from road paving to offset PM10 increases from natural gas combustion. . . . If [offsets] have been granted for paving roads, those [offsets] should not be allowed to be used to mitigate the impacts of combustion particulate . . . .'" (Boldface omitted.)
*1236 2. The effects on animals and plants.
Plaintiffs also commented that: "Paving . . . roads may result in a number of adverse direct and indirect impacts on biological resources. Direct impacts include mortality during road construction and increased frequency of roadkill from vehicle travel on paved roads. . . . [I]ndirect impacts include spread of invasive plant species; air, water, soil, and noise pollution; soil disturbance and erosion; and increase of roadway pollutants and associated habitat loss, degradation and fragmentation; alteration of wildlife movement; and changes in wildlife populations."
Paved roads increase roadkill because they attract more vehicles, and they allow vehicles to travel at higher speeds. In addition, they absorb heat during the day and release it at night, thus attracting animals in search of warmth.
The act of road paving would kill "[a]ny vegetation along the unimproved road, . . . any species living in that vegetation or on the unimproved road shoulders," and "any sessile or slow-moving organisms in the path of the road."
Animal species that live along unpaved roads in the District, and that therefore could be directly adversely affected by road paving, include the desert tortoise, a state and federal threatened species; the Mojave ground squirrel, a state threatened species; and the Western burrowing owl, a state and federal species of concern.
3. Growth-inducing effects.
Finally, plaintiffs commented that road paving could induce growth: "Paving roads may . . . encourage land development by improving access to properties that are at present only accessible via unpaved roads. Consequently, newly paved roads would facilitate the already rampant urban sprawl . . . ."
E. The District's Response.
The District provided responses to plaintiffs' comments. In these, it stated: "There will be no increase in any particulate emissions due to the proposed rule." It also stated, "It is the District's reasonable judgment that detailed environmental review of potential, speculative impacts from paving of particular roads which might occur at some point in the future is unable to be performed due to the highly speculative and unknown nature of any potential paving projects which could be used to generate [offsets] pursuant to this *1237 Rule. . . . When and if any application for [offsets] is submitted the environmental impacts of such should be assessed by the agency accepting the paving of the road."
The District then adopted Rule 1406 and found that the Class 8 categorical exemption applied.
II
PROCEDURAL BACKGROUND
Plaintiffs filed a timely petition for a writ of administrative mandate pursuant to CEQA.[7]
After hearing argument, the trial court denied the petition. It ruled: "[S]ubstantial evidence . . . supports the [D]istrict's determination that the Class 8 categorical exemption applies. Rule 1406 is [a] component of new source review of any new or modified stationary sources of air pollutants and is intended to assist the [D]istrict in bringing the non-attainment area into attainment with national air pollution standards. As such, it will enhance or protect the environment. It does not relax standards or allow environmental degradation. Indeed, it does not permit any activity that would harm or degrade the environment. Contrary to petitioners' argument, the rule does not permit the paving of any road or the using of any offset . . .: the rule simply sets forth a protocol for calculating such an offset if one is sought. Whether the use of such offsets in connection with a particular project is appropriate will be part of the environmental analysis of that project. Nothing in the rule entitles a future applicant to use such offsets." Accordingly, it entered judgment against plaintiffs and in favor of the District.
III
DISCUSSION
A. General CEQA Principles.
1. Overview of the CEQA process.
(1) "CEQA and its implementing administrative regulations (CEQA Guidelines) establish a three-tier process to ensure that public agencies *1238 inform their decisions with environmental considerations. [Citation.] The first tier is jurisdictional, requiring that an agency conduct a preliminary review to determine whether an activity is subject to CEQA. [Citations.] An activity that is not a `project' . . . is not subject to CEQA. [Citation.]
"The second tier concerns exemptions from CEQA review. The Legislature has provided that certain projects, such as ministerial projects and repairs to public service facilities of an emergency nature, are exempt. [Citations.] In addition, . . . the CEQA Guidelines list categorical exemptions or `classes of projects' that the resources agency has determined to be exempt per se because they do not have a significant effect on the environment. [Citations.] [¶] . . . [¶]
"If a public agency properly finds that a project is exempt from CEQA, no further environmental review is necessary. [Citation.] The agency need only prepare and file a notice of exemption [citations], citing the relevant statute or section of the CEQA Guidelines and including a brief statement of reasons to support the finding of exemption [citation]. If a project does not fall within an exemption, the agency must `conduct an initial study to determine if the project may have a significant effect on the environment.' [Citation.] . . .
"CEQA's third tier applies if the agency determines substantial evidence exists that an aspect of the project may cause a significant effect on the environment. In that event, the agency must ensure that a full environmental impact report is prepared on the proposed project. [Citations.]" (Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal. 4th 372, 379-381 [60 Cal. Rptr. 3d 247, 160 P.3d 116], fn. omitted.)
2. First tier: The existence of a "project."
(2) "Project" is defined as an "activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment . . . ." (Pub. Resources Code, § 21065; see also Cal. Code Regs., tit. 14, § 15378.) "Activity," for this purpose, includes "[a]n activity directly undertaken by any public agency" (Pub. Resources Code, § 21065, subd. (a)), as well as "[a]n activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies" (Pub. Resources Code, § 21065, subd. (c)).
"Under CEQA, `project' `refers to the underlying activity which may be subject to approval by one or more governmental agencies; it does not refer to each of the several approvals sequentially issued by different agencies.' [Citations.] `This definition ensures that the action reviewed under CEQA is *1239 not the approval itself but the development or other activities that will result from the approval.' [Citation.]" (Citizens for a Megaplex-Free Alameda v. City of Alameda (2007) 149 Cal. App. 4th 91, 106 [56 Cal. Rptr. 3d 728].)
"`Whether a particular activity constitutes a project in the first instance is a question of law.' [Citation.]" (RiverWatch v. Olivenhain Municipal Water Dist. (2009) 170 Cal. App. 4th 1186, 1203 [88 Cal. Rptr. 3d 625].)
3. Second tier: The existence of an exemption.
(3) "The CEQA Guidelines provide for 33 classes of projects that generally do not have a significant effect on the environment and therefore may be exempted from CEQA review. [Citations.]" (Committee to Save the Hollywoodland Specific Plan v. City of Los Angeles (2008) 161 Cal. App. 4th 1168, 1186 [74 Cal. Rptr. 3d 665], fn. omitted.)
In this case, the District relies on the so-called "Class 8" categorical exemption, which applies to "actions taken by regulatory agencies, as authorized by state or local ordinance, to assure the maintenance, restoration, enhancement, or protection of the environment where the regulatory process involves procedures for protection of the environment. Construction activities and relaxation of standards allowing environmental degradation are not included in this exemption." (Cal. Code Regs., tit. 14, § 15308.)
(4) "The scope of an exemption may be analyzed as a question of statutory interpretation and thus subject to independent review. [Citations.] But `the substantial evidence test governs our review of the [agency's] factual determination that a project falls within a categorical exemption.' [Citation.]" (San Lorenzo Valley Community Advocates for Responsible Education v. San Lorenzo Valley Unified School Dist. (2006) 139 Cal. App. 4th 1356, 1382 [44 Cal. Rptr. 3d 128].)
"Applying the substantial evidence test in the context of a court reviewing an agency's []exemption decision . . . means determining whether the record contains relevant information that a reasonable mind might accept as sufficient to support the conclusion reached. Although the agency bears the burden to demonstrate with substantial evidence that its action fell within the exemption, all conflicts in the evidence are resolved in its favor and all legitimate and reasonable inferences are indulged in to uphold findings, if possible. [Citations.]" (Great Oaks Water Co. v. Santa Clara Valley Water Dist. (2009) 170 Cal. App. 4th 956, 968 [88 Cal. Rptr. 3d 506], fn. omitted.)
"In determining . . . whether the agency's findings are supported by substantial evidence, the trial court and the appellate courts essentially *1240 perform identical roles. We review the record de novo and are not bound by the trial court's conclusions. [Citations.]" (Environmental Protection Information Center v. California Dept. of Forestry & Fire Protection (2008) 44 Cal. 4th 459, 479 [80 Cal. Rptr. 3d 28, 187 P.3d 888].)
B. CEQA Principles As Applied to This Case.
(5) The adoption of a rule or regulation can be a project subject to CEQA. (Wildlife Alive v. Chickering (1976) 18 Cal. 3d 190, 206 [132 Cal. Rptr. 377, 553 P.2d 537]; Plastic Pipe & Fittings Assn. v. California Building Standards Com. (2004) 124 Cal. App. 4th 1390, 1412 [22 Cal. Rptr. 3d 393].)
"Many agencies take the position that rulemaking actions are [exempt under] CEQA, relying either on the exemption from CEQA that applies when it is certain an activity will not have a significant environmental impact [citation], or the categorical exemptions for actions taken to protect natural resources [citation] or to protect the environment [citation]." (2 Kostka & Zischke, Practice Under the Cal. Environmental Quality Act (Cont.Ed.Bar 2d ed. 2009) § 20.43, p. 981.)
"Rulemaking proceedings cannot be found exempt, however, when the rule has the effect of weakening environmental standards. [Citations.] [¶] [Even a] new regulation that strengthens some environmental requirements may not be entitled to an exemption if the new requirements could result in other potentially significant effects. [Citations.]" (2 Kostka & Zischke, Practice Under the Cal. Environmental Quality Act, supra, § 20.43, p. 981.)
For example, in Dunn-Edwards Corp. v. Bay Area Air Quality Management Dist. (1992) 9 Cal. App. 4th 644 [11 Cal. Rptr. 2d 850], disapproved on other grounds in Western States Petroleum Assn. v. Superior Court (1995) 9 Cal. 4th 559, 576, footnote 6 [38 Cal. Rptr. 2d 139, 888 P.2d 1268], an air quality management district adopted regulations that required new control measures for the emission of volatile organic compounds (VOC) from paint and other "architectural coatings." (Dunn-Edwards, at pp. 649-650.) The plaintiffs presented "evidence that the new regulations require[d] lower quality products. As a result, more product w[ould] be used, which w[ould] lead to a net increase in VOC emissions." (Id. at p. 658.) The district took the position that its adoption of the regulations was categorically exempt, citing, among other things, the Class 8 exemption. (Id. at p. 653.) It argued that the regulations "constitute[d] more stringent standards for VOC and [thus] cannot be said to have created an adverse change." (Id. at p. 657.)
The appellate court rejected the district's exemption claim: "The only evidence in rebuttal to that presented by plaintiffs is a[] . . . staff response . . . *1241 [t]hat . . . concludes: `[T]he staff disagrees with the assertion that implementation of the [suggested control measures] will result in an emissions increase due to increased thinning, more frequent recoating and increased incidence of job failures. Thus, the staff disagrees with the contention . . . that implementation will have adverse environmental impacts.' This conclusion is based on the fact there was no supporting data for plaintiffs' claims. Thus, rejection of plaintiffs' claims is predicated on lack of the very information which would be provided by an EIR. Since the staff likewise was unable to produce evidence of no adverse impact, the District cannot say with certainty `there is no possibility that the activity in question may have a significant effect on the environment.' [Citation.]" (Dunn-Edwards Corp. v. Bay Area Air Quality Management Dist., supra, 9 Cal.App.4th at p. 658.)
(6) Ordinarily, as noted earlier, we review a categorical exemption finding under the substantial evidence standard. (Great Oaks Water Co. v. Santa Clara Valley Water Dist., supra, 170 Cal.App.4th at p. 968.) The District's exemption claim, however, was based not so much on evidence as on logic. If that logic is flawed, or if it is contrary to the evidence, the claim must fail.
The District reasoned, in part, that "Rule 1406 [is] positive to the environment, as [it] will encourage additional road paving with commensurate reduction in particulate emissions from unpaved road dust entrainment." This overlooks the fact that Rule 1406 merely provides for road paving as an offset for new, increased PM10 emissions. Moreover, it does so in a one-to-one ratio. Thus, even assuming that (1) road dust is environmentally indistinguishable from other PM10 and (2) road paving itself has no deleterious environmental effects, the net effect is, at best, a push. And if either of these assumptions is false, the net effect would be negative.
The District also reasoned that Rule 1406 permits applicants to seek offsets for road paving, but does not require them to do so; if and when an applicant seeks such offsets, the application will be subject to further environmental review. In response to plaintiffs' comments, it added that environmental review at this point would be unduly "speculative."
This argument flows from the District's narrow view of the relevant project as strictly limited to the adoption of Rule 1406. As already noted, however, "`[t]he term "project," . . . means the whole of an action which has a potential for physical impact on the environment, and . . . "[t]he term `project' refers to the underlying activity and not the governmental approval process." [Citation.]' [Citation.]" (Orinda Assn. v. Board of Supervisors (1986) 182 Cal. App. 3d 1145, 1171-1172 [227 Cal. Rptr. 688].) Here, the underlying activity was road paving (when performed by applicants for the purpose of obtaining the District's approval of PM10 offsets in the process of new *1242 source review). The approval of Rule 1406 was the first step in a process of obtaining governmental approval for such road paving.
(7) "Under CEQA's definition of a project, although a project may go through several approval stages, the environmental review accompanying the first discretionary approval must evaluate the impacts of the ultimate development authorized by that approval. This prevents agencies from chopping a large project into little ones, each with a minimal impact on the environment, to avoid full environmental disclosure. [Citations.] . . . It is irrelevant that the development may not receive all necessary entitlements or may not be built. Piecemeal environmental review that ignores the environmental impacts of the end result is not permitted. [Citations.]" (1 Kostka & Zischke, Practice Under the Cal. Environmental Quality Act, supra, § 6.31, pp. 329-330.)
"The scope of review under CEQA is not confined to immediate effects but extends to reasonably foreseeable indirect physical changes to the environment. [Citations.] An agency action is not exempt from CEQA simply because it will not have an immediate or direct effect on the environment. CEQA applies if it is reasonably foreseeable that environmental impacts will ultimately result. [Citations.]" (1 Kostka & Zischke, Practice Under the Cal. Environmental Quality Act, supra, § 4.20, p. 170.)
In the classic case of Bozung v. Local Agency Formation Com. (1975) 13 Cal. 3d 263 [118 Cal. Rptr. 249, 529 P.2d 1017], the Supreme Court defined the issue before it as "whether [CEQA] applies to the approval of annexation proposals by a Local Agency Formation Commission (LAFCO), where property development is intended to follow the annexation approval and annexation." (Id. at p. 268.)
The City of Camarillo and a private landowner had petitioned LAFCO (Local Agency Formation Commission) to allow Camarillo to annex 677 acres of the landowner's land. (Bozung v. Local Agency Formation Com., supra, 13 Cal.3d at p. 269.) The Supreme Court observed, "Vital to our disposition of this case is that [the landowner's] application stated that the land was presently used for agriculture and would be used `for residential, commercial and recreational uses,' and that such development was `anticipated. . . in the near future.'" (Id. at pp. 269-270, fn. omitted.)
First, the court held that approval of the annexation was a "project" for purposes of CEQA. (Bozung v. Local Agency Formation Com., supra, 13 Cal.3d at pp. 277-278.) It disagreed with the argument "that such an approval is merely permissive and does not compel the city to annex." (Id. at p. 278.) "[I]t . . . is an activity directly undertaken by a public agency. [Also,] . . . it involves the issuance . . . of an entitlement for use. That, in theory, the city *1243 eventually may not use the entitlement by not annexing, does not retroactively turn a project into a nonproject." (Id. at pp. 278-279, fn. omitted.)
The court also held that an EIR (environmental impact report) was required because the "`project' was one `which may have a significant effect on the environment.' [Citation.]" (Bozung v. Local Agency Formation Com., supra, 13 Cal.3d at p. 279.) It rejected "[t]he notion that the project itself must directly have such an effect." (Ibid.) "[T]he impetus for the . . . annexation is [the landowner]'s desire to subdivide 677 acres of agricultural land, a project apparently destined to go nowhere in the near future as long as the ranch remains under county jurisdiction. The . . . application to LAFCO shows that this agricultural land is proposed to be used for `residential, commercial and recreational' purposes. Planning was completed, preliminary conferences with city agencies had progressed `sufficiently' and development in the near future was anticipated. In answer to the question whether the proposed annexation would result in urban growth, the city answered: `Urban growth will take place in designated areas and only within the annexation.' [¶] It therefore seems idle to argue that the particular project here involved may not culminate in physical change to the environment." (Id. at p. 281, fns. omitted.)[8]
More recently, in Plastic Pipe & Fittings Assn. v. California Building Standards Com., supra, 124 Cal. App. 4th 1390, the California Building Standards Commission (the Commission) determined that the adoption of regulations allowing the use of cross-linked polyethylene (PEX) pipes required environmental review under CEQA. (124 Cal.App.4th at p. 1401.) The Plastic Pipe and Fittings Association (PPFA) challenged this position, but the appellate court agreed with the Commission. (Id. at pp. 1412-1414.) It stated: "PPFA contends the enactment of regulations allowing the use of PEX is not a project because the causal link between the enactment of regulations and a physical change in the environment is too remote. PPFA argues that PEX is only one of several materials available for plumbing uses and that at this time there is no certainty that PEX will be used in any particular work of construction. A project, however, includes an activity that `may cause . . . a *1244 reasonably foreseeable indirect physical change in the environment.' [Citation.] Thus, an activity need not cause an immediate environmental impact to be considered a project." (Id. at p. 1413.)
The District notes that, in Plastic Pipe, the Commission had already concluded that the regulations could have a significant environmental impact; thus, it argues, that case merely stands for the proposition that a court must defer to an agency's findings if they are supported by substantial evidence. We disagree. The court held that the adoption of the regulations constituted a project as a matter of law. As it stated in its discussion of this issue, "[w]hether an activity constitutes a project under CEQA is a question of law that can be decided de novo based on the undisputed evidence in the record. [Citation.]" (Plastic Pipe & Fittings Assn. v. California Building Standards Com., supra, 124 Cal.App.4th at pp. 1412-1413.) Moreover, in this case, as we mentioned earlier, the District determined that Rule 1406 could not have any adverse environmental impacts as a matter of logic, not evidence. Plastic Pipe refutes the District's reasoning.
Of course, the District did acknowledge that its adoption of Rule 1406 was a project. Nevertheless, it then cut short its consideration of the project's environmental effects by concluding that the causal link between the adoption of the rule and a physical change in the environment was too remote. This was inconsistent with the holding in Plastic Pipe.
(8) Bozung requires us to reject the District's argument that Rule 1406 is merely permissive. Under Bozung, the focus must be not on the project alone, but rather on the project's reasonably foreseeable direct and indirect physical effects. While the adoption of Rule 1406 did not cause any road paving by itself, certainly it encouraged third parties to pave roads. It is reasonably foreseeable that, if the District allows applicants to obtain PM10 offsets by paving roads, at least some applicants will do so. Otherwise, why adopt the rule?
The District argues that Bozung is not controlling because there the annexation was "driven by a developer's specific project and therefore sufficiently definite to require an EIR," whereas here, any future road paving is "speculative." (Underscoring omitted, italics added.) As the Supreme Court itself defined the issue, however, what was crucial was merely that further property development was "intended." (Bozung v. Local Agency Formation Com., supra, 13 Cal.3d at p. 268.) The fact that, in Bozung, the evidence of that intent was strong does not mean that lesser evidence will not suffice.
Here, the District intended at least some actual road paving to occur. Indeed, as the administrative record shows, at the same time as the District *1245 was considering Rule 1406, the City of Victorville was proposing to build a power plant called the Victorville 2 Hybrid Power Project. Victorville proposed to offset the resulting increased PM10 by paving specified roads, totaling 1.37 miles. Indeed, Victorville had been "working closely" with the District in the development of Rule 1406. The District had even drawn up a list of roads within its jurisdiction that were suitable for paving.[9]
(9) The administrative record contains no evidence (as opposed to the District's bare assertion) that the environmental effects of the adoption of Rule 1406 are speculative. Plaintiffs' comments were at least some evidence that the quality of those effects would in fact be adverse. Basically, plaintiffs showed that trading a pound of PM10 from road dust[10] for a pound of PM10 from combustion would mean that the resulting PM10 would stay in the air longer, spread more widely, and be more likely to cause disease. Also, the very act of road paving would produce still more PM10mostly made up of PM2.5while also having adverse biological and growth-inducing effects.
The only thing that was even arguably speculative about these effects was their quantity. Plaintiffs' evidence did not necessarily require a finding that these adverse environmental effects would be significant. For example, there was no evidence of how many third parties were likely to apply to pave how many miles of roads. Likewise, it was unclear how many miles of road paving were likely to kill how many burrowing owls.
Nevertheless, the District purported to find that a Class 8 exemption applied. This necessarily meant that the adoption of Rule 1406 would "assure the maintenance, restoration, enhancement, or protection of the environment. . . ." (Cal. Code Regs., tit. 14, § 15308, italics added.) The District has the burden of proofthere must be substantial evidence to support this categorical exemption finding. In the absence of evidence that the negative environmental effects of Rule 1406 would not be significant, the exemption finding cannot be sustained.
Here, much as in Dunn-Edwards, "rejection of plaintiffs' claims is predicated on lack of the very information which would be provided by an EIR. Since the staff likewise was unable to produce evidence of no adverse impact, *1246 the District cannot say with certainty `there is no possibility that the activity in question may have a significant effect on the environment.' [Citation.]" (Dunn-Edwards Corp. v. Bay Area Air Quality Management Dist., supra, 9 Cal.App.4th at p. 658.)
(10) The District argues that Dunn-Edwards is distinguishable because here, if and when individual applicants seek paving offsets, there will be further environmental review. Nothing in Dunn-Edwards suggests that the outcome there would have been different if there had been a subsequent opportunity for environmental review. Moreover, nothing in the definition of a Class 8 categorical exemption turns on whether there will be a subsequent opportunity for environmental review.
More broadly, the District argues that environmental review at this point is premature and hence unduly speculative. This argument flies in the face of the District's actual determination that the adoption of Rule 1406 would have beneficial environmental effects, and there was no possibility that it would have adverse environmental effects.
(11) "Choosing the precise time for CEQA compliance involves a balancing of competing factors. EIRs and negative declarations should be prepared as early as feasible in the planning process to enable environmental considerations to influence project program and design and yet late enough to provide meaningful information for environmental assessment." (Cal. Code Regs., tit. 14, § 15004, subd. (b).) "To implement the above principles, public agencies shall not undertake actions concerning the proposed public project that would have a significant adverse effect or limit the choice of alternatives or mitigation measures, before completion of CEQA compliance. For example, agencies shall not: [¶] . . . [¶] . . . take any action which gives impetus to a planned or foreseeable project in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review of that public project." (Cal. Code Regs., tit. 14, § 15004, subd. (b)(2)(B).) "Where an individual project is a necessary precedent for action on a larger project . . . with significant environmental effect, an EIR must address itself to the scope of the larger project." (Cal. Code Regs., tit. 14, § 15165.)
At a minimum, the District committed itself to allowing paving offsets pursuant to the procedure and the formulas set forth in Rule 1406. Former Rule 1406 stated that: "The [District] shall determine whether to issue or deny [paving offsets] in compliance with [specified] standards . . . ." Admittedly, it makes the issuance of a paving offset subject to a public comment period. Nevertheless, it also provides that "[u]pon the expiration of the public comment period; after review of comments accepted, if any; and upon payment of the appropriate analysis fee, if any; the [District] shall issue *1247 the [paving offsets] . . . ." (Italics added.) It does not appear that the District could refuse to issue a paving offset on the ground that the formulas in Rule 1406 failed to adequately account for the environmental effects of road paving.
Thus, by adopting Rule 1406, the District lost the opportunity to consider possible alternatives and mitigation measures. Suppose an applicant seeks to build a new power plant, using paving offsets. Further suppose that a challenger argues that there must be environmental review of the proposed offsets, because they tend to increase PM2.5, or because the very activity of road paving would have adverse environmental impacts. The District would be able to respond that this is, in effect, a CEQA challenge to Rule 1406, and that the statute of limitations has run on any such challenge. (See Temecula Band of Luiseño Mission Indians v. Rancho Cal. Water Dist. (1996) 43 Cal. App. 4th 425, 434-439 [50 Cal. Rptr. 2d 769] [where statute of limitations had run on challenge to previous project, review of modified project was limited to its incremental effects] [Fourth Dist., Div. Two].)
We therefore conclude that there was insufficient evidence to support the District's finding that the adoption of Rule 1406 was within the Class 8 categorical exemption.
IV
DISPOSITION
The District asked the trial court to deny the petition for one and only one reasonbecause its categorical exemption finding was appropriate. As we are holding that the categorical exemption finding was not appropriate, it appears that plaintiffs are entitled to the writ sought.
Accordingly, the judgment is reversed with directions to the trial court to grant the petition and to issue a writ of mandate commanding the District to set aside (1) its adoption of Rule 1406 and (2) its finding that the adoption of Rule 1406 was within the Class 8 categorical exemption. (See Valley Advocates v. City of Fresno (2008) 160 Cal. App. 4th 1039, 1074 [72 Cal. Rptr. 3d 690].) The trial court shall retain jurisdiction over the District's further proceedings by way of a return to the writ. (Ibid.; see also Pub. Resources Code, § 21168.9, subd. (b); Gentry v. City of Murrieta (1995) 36 Cal. App. 4th 1359, 1423 [43 Cal. Rptr. 2d 170].) We do not mean to preclude the trial court from including additional terms in its judgment or in its writ of mandate, nor from holding such further hearings as it may deem necessary to *1248 determine what additional terms should be included. Moreover, we do not mean to preclude the District from finding that the adoption of Rule 1406 is within the Class 8 categorical exemption or otherwise exempt, as long as it does so in compliance with CEQA.
Plaintiffs are awarded costs on appeal against the District.
Gaut, J., and Miller, J., concurred.
NOTES
[*] Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of footnote 3.
[1] Rule 1406 was amended in October 2008, after this appeal was already pending. The amendments do not appear to have any relevant substantive effect. Nevertheless, our opinion deals exclusively with rule 1406 as it stood before the amendments.
[2] The plaintiffs are (1) California Unions for Reliable Energy, "a coalition of unions whose members construct and maintain industrial projects throughout California"; (2) the Center for Biological Diversity, "a non-profit environmental organization dedicated to the protection of native species and their habitats through science, policy, and law"; and (3) Frank Leivas, a concerned resident of the District.
[3] *
* See footnote, ante, page 1225.
[4] In connection with a previous project within the District (Blythe Energy Project II), the EPA had taken the position that a Plan that provides for "non-traditional [offsets], such as road paving, . . . must contain an approved protocol for quantifying and guaranteeing the permanence, surplus nature and enforceability of such credits."
[5] "Entrainment" is used here in its technical engineering sense, meaning the suspension of small particles in a flowing liquid or gas. (See , definition 2 [as of Oct. 30, 2009].)
[6] The District claims that unpaved roads are "a primary component" of PM10 emissions within its jurisdiction. (Underscoring omitted.) In support of this statement, however, it cites a document that was not included in the administrative record. In any event, even assuming this is true, it is significant that any new sources requiring offsets are likely to be combustion related.
[7] Plaintiffs named as defendants not only the District, but also Eldon Heaston, in his capacity as the District's air pollution control officer. (See Health & Saf. Code, § 40750.) Inasmuch as his interests are wholly aligned with the District's, we will disregard the distinction between them.
[8] When Bozung was decided, "project" was defined solely in terms of whether the activity at issue was being undertaken, supported, or permitted by a public agency. (Bozung v. Local Agency Formation Com., supra, 13 Cal.3d at p. 277, quoting Pub. Resources Code, former § 21065; Stats. 1972, ch. 1154, § 1, p. 2271.) In 1994, this definition was amended so that it now also requires that the activity "may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment . . . ." (Pub. Resources Code, § 21065; Stats. 1994, ch. 1230, § 4, p. 7682.)
Nevertheless, Bozung held that the annexation, although permissive, was a "project" under the then applicable definition, which is now just the first prong of the definition. It also held that the annexation could have a significant effect on the environment, which means that it would meet what is now the second prong of the definition. Accordingly, Bozung remains good law, even under the current definition of a "project."
[9] The District demurred to the complaintalbeit unsuccessfullyon the ground that Victorville had "relied upon the provisions of then unadopted Rule 1406" and was therefore an indispensable party.
[10] One problem we have with Rule 1406although plaintiffs did not raise this issue in their commentsis that it calculates the offset by taking the emissions from the (actual present) unpaved road and subtracting the emissions from the (hypothetical future) paved road; all emissions are expressed in pounds per vehicle mile traveled. But this assumes that vehicle miles traveled on a road will remain the same after the road is paved. Surely this is an unrealistic assumption?
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632 F. Supp. 144 (1985)
COUNCIL FOR THE NATIONAL REGISTER OF HEALTH SERVICE PROVIDERS IN PSYCHOLOGY, Plaintiff,
v.
AMERICAN HOME ASSURANCE COMPANY, et al., Defendants.
Civ. A. No. 85-2626.
United States District Court, District of Columbia.
November 15, 1985.
*145 Allen Snyder, Washington, D.C., for plaintiff.
John Tremain May, Washington, D.C., for defendants.
MEMORANDUM
GASCH, Senior District Judge.
I. BACKGROUND
This is a breach of contract case brought by plaintiff against defendant American Home Assurance Company ("Assurance Company"), which agreed to insure plaintiff and to defend it in any suit. Plaintiff Council for the National Register of Health Service Providers in Psychology ("Council") is a nonprofit corporation that publishes a "National Register of Health Service Providers in Psychology," a directory that lists psychologists who voluntarily apply and who meet certain educational and training requirements. In July 1984, plaintiff was sued in Virginia by a class of persons who were not qualified for listing in the directory. MacHovec, et al. v. Council for the National Register of Health Service Providers, etc., 616 F. Supp. 258 (E.D.Va.1985) ("the MacHovec case"). From the inception of that antitrust suit, plaintiff alleges it made repeated attempts to contact Assurance Company to obtain the insurer's guidance concerning the course of litigation and to obtain payment of plaintiff's legal bills. The Council retained Clifford Stromberg, then a partner at Hogan & Hartson, to defend the MacHovec suit. Mr. Stromberg also attempted to contact Assurance Company. According to the complaint, the insurance company apparently did not respond to any of the letters until defendant informed plaintiff in February, 1985, that it had misplaced all records concerning plaintiff's claim. The *146 executive officer of the Council, Dr. Alfred Wellner, paid a personal visit to Assurance Company in April, 1985, after which Assurance Company informed plaintiff it had retained a Washington lawyer, John T. Coyne, to review the Council's claim. By this time, the Council had incurred some $593,000 in legal expenses. Mr. Coyne, the Council and Mr. Stromberg negotiated a settlement of the claim, but then, plaintiff alleges, the Council was abruptly informed that Mr. Coyne no longer had authority to settle the matter. Assurance Company has paid plaintiff nothing. Plaintiff has paid $437,000 out of its own funds, with the difference remaining unpaid. It sued to recover those fees under a complaint for breach of contract, breach of fiduciary duty and bad faith refusal to honor an insurance contract.
Before litigation got underway, however, defendant moved to disqualify plaintiff's attorney, Allen Snyder, on the ground that Mr. Snyder works for Hogan & Hartson and Mr. Stromberg of that firm ought to be called on to testify concerning negotiations with Mr. Coyne. In an affidavit, Mr. Coyne disputes plaintiff's contention in Paragraph 21 of its complaint that Mr. Coyne informed Mr. Stromberg that he was authorized to settle the claim and that authorization was later withdrawn by defendant.[1]
Plaintiff counters that in its determination, Mr. Stromberg's testimony is not crucial to its case, that the issue of authorization to settle is relevant but not a key ingredient in its complaint, and that Dr. Wellner can provide testimony based on personal knowledge concerning the settlement negotiations. It provides an affidavit from Dr. Wellner stating that it is plaintiff's preference to proceed under representation by Hogan & Hartson and forego calling Mr. Stromberg to the witness stand.
American Bar Association Disciplinary Rule (ABA DR) 5-102(A), currently in force in the District of Columbia, provides that a lawyer shall not represent a client if he knows that he or a lawyer in his firm ought to be called as a witness. Four exceptions are provided in ABA DR 5-101(B): the first permits testimony where it is related to an uncontested matter; the second, where the testimony relates solely to a formal matter not expected to be substantially contested; the third, where the testimony relates solely to the nature and value of legal services rendered; and the fourth, where the exclusion of the lawyer or firm would work a substantial hardship on the client.
Defendant Assurance Company contends the key word in DR 5-102(A) is "ought": a lawyer should not represent a client if he or someone from his firm "ought" to testify on a matter. Thus, defendant claims, it is irrelevant that plaintiff is willing to forego Mr. Stromberg's testimony, because his testimony is needed on a key disputed fact, and because defendant may wish to call Mr. Stromberg itself. Plaintiff responds that because Mr. Stromberg's testimony is not necessary to the case, it may make an informed decision not to have its lawyer testify. The Council further argues that disqualification of Hogan & Hartson would work a substantial hardship on plaintiff and thus this case falls into the exception under DR 5-101(B)(4). For the reasons stated below, the Court has determined that Hogan & Hartson should be permitted to continue to represent plaintiff.
*147 II. DISCUSSION
In Groper v. Taff, 717 F.2d 1415, 1418 (D.C.Cir.1983), this Circuit held that the application of DR 5-102(A) does not depend on whether a lawyer will be called as a witness, but on whether he ought to be called. However, the Groper court also noted that the decision on disqualification is left to the discretion of the trial judge. Groper, supra, 717 F.2d at 1418. Furthermore, the word "ought" implies some kind of necessity for the attorney's testimony, and may be distinguished from cases where the lawyer "may" be called. In the former case, the lawyer should be called regardless of whether the client would rather waive application of the disqualification rule. In the latter case, where a lawyer's testimony is not a necessity, a court, upon considering all relevant facts, may permit a client to waive the dictates of the rule. Healthcrest, Inc. v. American Medical International, Inc., 605 F. Supp. 1507, 1509 (N.D.Ga.1983).
This would seem the more rational approach in a case such as the one before this Court, where plaintiff has another witness, Dr. Wellner, who was intimately involved in the negotiation process and is available to testify from personal knowledge concerning the disputed factual issue. (Aff. of Wellner, ¶ 6). Furthermore, if the defendant wishes to call Mr. Stromberg despite plaintiff's decision to forego his testimony, defendant may do so even if plaintiff is represented by Hogan & Hartson. See Universal Athletic Sales Co. v. American Gymn, et al., 546 F.2d 530, 539 (3rd Cir.1976), cert. denied sub nom. Super Athletics Corp. v. Universal Athletics Sales Co., 430 U.S. 984, 97 S. Ct. 1681, 52 L. Ed. 2d 378 (1977) (holding that where a lawyer's testimony is not indispensable, he should be allowed to testify even though his firm represented one of the parties). See also J.D. Pflaumer, Inc. v. Department of Justice, et al., 465 F. Supp. 746, 747 (E.D.Pa.1979) (holding that if a party in its own judgment determines an attorney's testimony is not crucial, the party may forego the lawyer's testimony and continue to be represented by him or his firm). Thus the case at hand may be distinguished from Groper because here, the attorney's testimony is not necessary to establish a crucial element of the case.
The present case may also be distinguished from Moyer v. 1330 Nineteenth St. Corporation, 597 F. Supp. 14 (D.D.C.1984), upon which defendant relies. In Moyer, the attorney was likely to be called to testify about allegations that he personally participated in falsifying an affidavit that was crucial to the case before the court. Id. at 15. Obviously, that situation implicates the integrity of the judicial system far more than the simple case presented here. Defendant further relies on MacArthur v. Bank of New York, 524 F. Supp. 1205 (S.D. N.Y.1981), which held that a client may not waive the protection of DR 5-102(A) where a lawyer "ought" to be called as a witness. However, that court also noted that the rule requires careful evaluation of the relevant issue upon which the lawyer might testify, and whether other testimony is available to resolve that issue. Id. at 1208. As noted above, that is exactly the case the Court has before it here.
In the alternative, Hogan & Hartson should be permitted to continue to represent plaintiff because to disqualify the firm would cause undue hardship to the Council. DR 5-101(B)(4). Hogan & Hartson is very familiar with the lengthy and complicated MacHovec litigation that underlies this case, while it would take several months for replacement counsel to master these details. Furthermore, if Hogan & Hartson is disqualified from representing plaintiff, defendant's counsel would likely be disqualified as well, because Mr. Coyne, who allegedly negotiated the settlement for defendant, is connected to the law firm representing defendant in the present litigation. Dual disqualification at this point would be extremely expensive for both parties and cause undue delay in the judicial process. The exceptions to DR 5-102(A) specifically allow representation to continue where a client would suffer substantial *148 personal or financial hardship. DR 5-101(B)(4). This is such a case.
Under another exception to the disqualification rule, DR 5-101(B)(3), lawyers from Hogan & Hartson would be permitted to testify concerning a key issue in this litigation, the nature and value of the legal fees incurred in the MacHovec litigation. See Griesemer v. Retail Store Employees Union, etc., 482 F. Supp. 312, 315 (E.D.Pa. 1980). At its heart, the major issue in this case is the reasonableness of the attorneys fees. Under DR 5-101(B)(3), Mr. Stromberg would be permitted to testify on that issue even if Hogan & Hartson represented the Council. Thus it would seem a hollow victory for ethics to invoke the disqualification rule here, where it would serve no other purpose than to run up legal bills (which defendant may in the end have to pay) while lawyers from Hogan & Hartson would be permitted to take the stand in any case.
In sum, where an attorney's testimony may be relevant but is not necessary to a case, the best approach is to consider the motion to disqualify in light of the total circumstances of the case, including the client's desires. The Court is also aware that DR 5-102(A) may be used as a delaying tactic and is on guard to prevent the rule from being so abused. See J.P. Foley & Co. v. Vanderbilt, 523 F.2d 1357, 1360 (2d Cir.1975) (Gurfein, J., concurring); Greenebaum-Mountain Mortgage Co. v. Pioneer National Title Insurance Co., et al., 421 F. Supp. 1348, 1352 (D.Colo.1976). Because there are other witnesses available to testify concerning the settlement negotiations and the issue of bad faith, because there are exceptions to the rule that would permit Hogan & Hartson attorneys to testify in any case, and because the complaint presents preliminary evidence of intentional delay by defendant, the Court concludes the issue is best resolved by permitting the case to proceed with both parties represented by current counsel. Therefore, defendant's motion to disqualify plaintiff's attorney is denied.
NOTES
[1] Evidence concerning negotiation of settlement of the disputed claim would be admissible at trial because it is not offered to prove liability for the claim or its amount. See Fed.R.Evid. 408. Rather, this evidence is offered by plaintiff to support, and by defendant to negate, claims of bad faith on the part of the insurance carrier. Several courts have permitted the admission of such evidence in similar circumstances. See Urico v. Parnell Oil Co., 708 F.2d 852, 854 (1st Cir.1983) (rule 408 does not bar evidence on settlement negotiations offered to excuse plaintiff's failure to mitigate damages); Liberty Mutual Insurance Co. v. Davis, 412 F.2d 475, 483 (5th Cir.1969) (evidence on negotiations properly allowed); Clark v. Interstate National Corp., 486 F. Supp. 145, 146 (E.D.Pa.), aff'd without opinion, 636 F.2d 1207 (3rd Cir. 1980) (insurer's failure to accept settlement proposal evidence of bad faith); Fireman's Fund Insurance Co. v. Superior Court, 72 Cal. App. 3d 786, 140 Cal. Rptr. 677, 680 (1977) (permitting evidence by insured's attorney concerning negotiations where bad faith alleged).
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178 Cal. App. 4th 1544 (2009)
GEORGE LOUIE, Plaintiff and Appellant,
v.
BFS RETAIL AND COMMERCIAL OPERATIONS, LLC, Defendant and Respondent.
No. C059800.
Court of Appeals of California, Third District.
November 9, 2009.
*1547 Law Offices of Morse Mehrban, Morse Mehrban, Brian Keith Andrews and Dayton Magallenes for Plaintiff and Appellant.
Rutan & Tucker, Ernest W. Klatte III and Chris M. Heikaus Weaver for Defendant and Respondent.
OPINION
SIMS, Acting P. J.
Plaintiff George Louie seeks damages against defendant BFS Retail and Commercial Operations, LLC (BFRC), for alleged violation of California's Disabled Persons Act (Civ. Code, § 54 et seq.[1]; DPA), because the countertops in BFRC's business establishments were allegedly too high to allow wheelchair access. The trial court entered judgment of dismissal upon *1548 BFRC's demurrer, concluding res judicata barred this lawsuit based on a consent decree in a class action lawsuit against BFRC in the United States District Court in Florida, which alleged BFRC's facilities denied equal access to disabled persons in violation of the federal Amercians with Disabilities Act of 1990 (ADA) (42 U.S.C. § 12101 et seq.). We shall conclude that, because the Florida federal case was resolved by a consent decree expressly reserving any damage claims, res judicata does not bar this claim for damages. We shall therefore reverse the judgment of dismissal.[2]
BACKGROUND
The pleading at issue in this appeal is plaintiff's "FIRST AMENDED COMPLAINT FOR DAMAGES," filed May 12, 2008, which asserted one cause of action for violation of sections 54 and 54.1 (fn. 1, ante). According to the allegations (which we accept as true for purposes of reviewing the ruling on demurrer):
BFRC owns and operates tire and automotive retail and service centers at seven specified addresses in Sacramento, Carmichael, North Highlands, Citrus Heights, Rancho Cordova, and Roseville. Plaintiff, who resides in West Sacramento, is an amputee who has required the use of a wheelchair as his primary means of mobility outside of his home. In the year preceding the filing of this action, plaintiff patronized defendant's facilities at least 17 times. "During said visits to the facilities while using his wheelchair, Plaintiff was unable to use [BFRC's] service counters because their countertops were too high for him to be of any use and were therefore inaccessible to him and any person who is wheelchair-bound." Providing wheelchair-accessible counters would have been easy and inexpensive.
The "PRAYER" of the complaint asked for "damages, attorney fees and costs, and all other relief that the Court may deem proper."
BFRC demurred on the ground the lawsuit was barred by res judicata pursuant to a prior class action lawsuit against BFRC in the United States *1549 District Court in Florida, which resulted in a final judgment and consent decree covering BFRC's stores nationwide, including California. BFRC requested and was granted judicial notice of court documents in the federal caseAmerican Disability Association, Inc. v. BFS Retail and Commercial Operations, LLC (S.D.Fla., Oct. 30, 2002, No. 01-6529). Although the federal complaint was not part of our record on appeal, we have obtained the federal complaint and (after having given notice to the parties) we now take judicial notice of it.
Plaintiff here asserts (without evidence at this demurrer stage) that he was not given notice of the federal case. For purposes of this appeal, it does not matter whether or not plaintiff was aware of the federal case while it was pending.
Among the documents of which the trial court took judicial notice is a "JOINT MOTION FOR ORDER GRANTING PRELIMINARY APPROVAL OF PROPOSED CONSENT DECREE; FOR CONDITIONALLY CERTIFYING THE SETTLEMENT CLASS; FOR DIRECTING NOTICE TO THE CLASS; AND FOR SCHEDULING FAIRNESS HEARING WITH SUPPORTING MEMORANDUM OF LAW." The joint motion, signed by BFRC's attorney, repeatedly said the consent decree would not release any claim for damages. Thus, in summarizing the proposed settlement, the joint motion said, "The release, by the defined settlement class shall include a release of all claims asserted in the lawsuit, past and/or present, and all causes of action, actions, complaints or liabilities of every kind for injunctive relief, declaratory relief and attorneys' fees, whether based on Title III of the ADA or state or local law, rule or regulation. The release does not include claims for individual damages, that otherwise might be available under state law or local ordinance." (Italics added.) Additionally, the joint motion, in arguing that the proposed form of notice to absent class members was adequate due to impracticability of individual notice, said: "There are no individual damage claims affected by this settlement."
The proposed form of notice included: (1) posting notice in BFRC stores; (2) publication in a national newspaper, USA Today; (3) mailing notice to prominent disability groups (including two in Californiaone in Los Angeles and one in Berkeley); (4) attempting to post notice on at least five Internet locations frequented by the disabled; and (5) via notice, directing inquiries to the Web site of plaintiff's counsel. The notice to disability groups said the proposed consent decree "will ensure that BFRC Stores are accessible to persons with disabilities as required by the ADA and local accessibility laws." The notice also said, "all Class members will be bound by [the consent decree's] provisions" if the court gave final approval, and anyone who objected to the settlement, a copy of which was available on a Web site, had to send a written statement of reasons for objecting.
*1550 The Florida federal court's October 30, 2002, "FINAL JUDGMENT APPROVING CLASS CERTIFICATION AND PROPOSED AMENDED CONSENT DECREE AND DISMISSING ACTION WITH PREJUDICE" expressly stated that the proposed form of notice sufficed because no damages were sought and the court was certifying the class under Federal Rules of Civil Procedure, rule 23(b)(2) (28 U.S.C.) (undesignated rule references are to the Federal Rules of Civil Procedure), which allows a class action without notice to class members if prerequisites are satisfied and "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole ...." The federal court said, "The Proposed Amended Consent Decree meets [rule 23](b)(2)'s strictures because the relief sought in this action is purely injunctive and declaratory.... [P]laintiff and plaintiff class are seeking purely injunctive relief to remedy BFRC's alleged non-compliance with Title III which is a federal civil rights statute." The federal court judgment stated in a footnote: "The Proposed Amended Consent Decree reflects the deletion of damage claims that the parties voluntarily excised from the Proposed Consent Decree in August, 2002, after discussions with all of the then objectors." The federal court observed the only objections came from a group of agencies who complained about the use of tolerances for new construction and alterations.
The federal court in Florida, after finding the settlement fair and reasonable, ordered and adjudged that the settlement class was certified, the proposed consent decree was approved and adopted as the order of the court, and the federal court retained jurisdiction pursuant to the terms of the consent decree for enforcement purposes and determination of fees and costs.
The consent decree approved by the federal court limited itself to injunctive relief, declaratory relief, and attorney fees, stating:
"23. RELEASES
"23.1 Release and Discharge. Effective on the date of Final Approval, Plaintiff, on behalf of itself and all members of the Settlement Class, and their spouses or partners, executors, representatives, heirs, successors and assigns, in consideration of the relief set forth herein, the sufficiency of which is expressly acknowledged, fully and finally releases and forever discharges BFRC and the Independent Dealers covered by this Decree and each of their respective [agents, etc.]. Nothing herein limits the enforcement of Settlement Class members' rights through administrative or law enforcement agencies.
"23.2 Released Claims. The Released Claims are all claims asserted by named Plaintiff and/or the Settlement Class in the lawsuit or which could be *1551 asserted by them during the Term of this Decree,[3] any and all past and/or present claims, rights, demands, charges, complaints, actions, causes of action, obligations, or liabilities of any and every kind, known or unknown, for injunctive or declaratory relief or attorneys' fees, based upon Title III of the ADA and its promulgated rules and regulations relating to or concerning access for persons with Mobility Disabilities and dexterity disabilities at the BFRC Retail Tire and Service Stores covered by this Decree.[4] Released Claims also include claims regarding Accessibility Enhancements and the elements of BFRC Retail Tire and Service Stores affected thereby that arise during the term of this Decree. To the extent permitted by law, the final entry of this Decree will be fully binding and effective for purposes of res judicata and collateral estoppel upon BFRC, Plaintiff and the Settlement Class with respect to Title III of the ADA and its promulgated rules and regulations concerning access for persons with Mobility disabilities and dexterity disabilities covered by Title III of the ADA at BFRC Retail Tire and Service Stores. Nothing in this section, however, will prevent Class Counsel from enforcing this Decree." (Italics added.)
In further support of the demurrer in the current case, BFRC requested and was granted judicial notice of documents reflecting plaintiff first tried to litigate this case in federal court in California, without success. Thus, on October 31, 2007, plaintiff filed a complaint in the Eastern District of CaliforniaLouie v. BFS Retail & Commer. Operations, L.L.C. (E.D.Cal., Feb. 28, 2008, No. CIV S-07-2340 WBS KJM) 2008 U.S.Dist. Lexis 22617 (Louie)seeking to prosecute as a class action a complaint for damages and injunctive relief against BFRC for alleged failure to provide full and equal access to individuals with disabilities in violation of the ADA, the Unruh Civil Rights Act (§ 51) and the DPA (§§ 54-55). On February 28, 2008, the Eastern District of California dismissed the ADA claim with prejudice, on the ground of res judicata in that it was barred by the federal court case in Florida. The Eastern District observed, "plaintiff appropriately acknowledges his membership in the aforementioned `settlement class' [fn. omitted] and thus concedes that the Consent Decree bars his ADA claim. (See Pl.'s Mem. in Opp'n to Def.'s Mot. to Dismiss (`Plaintiff [] concedes that his claim for violation of the [ADA] is subsumed into the class action consent judgment to which Defendant [] refers in its motion to dismiss.').)" (Louie, supra, 2008 U.S.Dist. Lexis 22617 at p. *6.) With the sole federal claim dismissed, the Eastern District declined to exercise supplemental jurisdiction over the state law claims. Accordingly, the Eastern District dismissed without prejudice plaintiff's state law claims.
*1552 Plaintiff then filed the current complaint in state court, limited to one count seeking damages for alleged violation of the DPA.
In state court, plaintiff opposed the demurrer.
The trial court sustained the demurrer without leave to amend, on the ground of res judicata. The court observed plaintiff conceded in federal court in California that his ADA claim was barred because he was a member of the class in Florida. The court said sections 54 and 54.1 of the DPA (fn. 1, ante) "integrate the ADA and Section 54(c) provides a violation of the ADA is also a violation of 54.1. Thus plaintiff's claims here are barred by the res judicata effect of the Consent Decree and final judgment of the Florida federal district court on the ADA claims." In response to plaintiff's argument that res judicata was inapplicable because the Florida case was limited to injunctive/declaratory relief, whereas plaintiff now seeks statutory damages, the trial court said, "Plaintiff confuses rights and remedies and misapplies the primary rights doctrine. Where two actions involve the same harm to the plaintiff and the same wrong by the defendant, the same primary right is at stake. Thus res judicata bars the later action Eichman v. Fotomat Corp. (1983) 147 Cal. App. 3d 1170, 1175 [197 Cal. Rptr. 612]. [¶] The primary right here is plaintiff's right to full and equal access to defendant's public accommodations. Plaintiff mistakenly focuses on the remedy when the focus properly belongs on the right. The fact that a second action may seek different remedies or is based on a different theory is not determinative. It is the `right or obligation sought to be established or enforced, not the remedy or relief sought which determines the nature and substance of the cause of action. [Citations.]"
The court continued, "Plaintiff also argues that he was not part of the settlement class, was not adequately represented, and was not provided with adequate notice. [¶] He is clearly a member of the class and it is not necessary that he be named individually. [Citation.] The Consent Decree provides that it will be fully binding upon BFRC and the settlement class. The settlement class includes those persons with `mobility disabilities.' Plaintiff has alleged he is in a wheel chair.... [¶] Notice was given by several means and the Florida Court specifically found that it exceeded due process requirements. The Florida court held two Fairness Hearings and considered objections submitted by interested parties." The state court added that plaintiff had not offered any amendment that could avoid dismissal.
Plaintiff appeals from the ensuing judgment of dismissal by the California state court.
*1553 DISCUSSION
I. Standard of Review
"On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, ... [t]he reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed `if any one of the several grounds of demurrer is well taken. [Citations.]' [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.]" (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal. 4th 962, 966-967 [9 Cal. Rptr. 2d 92, 831 P.2d 317].) In reviewing the sufficiency of a complaint against a demurrer, we also consider matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal. 3d 311, 318 [216 Cal. Rptr. 718, 703 P.2d 58].)
Additionally, dismissal on res judicata grounds presents a question of law, which we review de novo. (Noble v. Draper (2008) 160 Cal. App. 4th 1, 10 [73 Cal. Rptr. 3d 3].)
II. Res Judicata Does Not Bar This Action
The parties devote much of their appellate briefs to arguing about primary right theory, privity, and due process notice to absent class members. BFRC in its respondent's brief focuses on the rule that the primary right, rather than the remedy, determines res judicata effect. However, we need not address all these points because, as we shall explain, the resolution of this appeal turns on the circumstance that the federal case in Florida ended with a consent decree in which BFRC agreed to reserve any damage claims for later litigation. This circumstance renders res judicata inapplicable to the damage claims now asserted under California's DPA.
(1) The United States Supreme Court has recognized that, "State courts are generally free to develop their own rules for protecting against ... the piecemeal resolution of disputes," as long as they do not interfere with fundamental federal rights. (Richards v. Jefferson County (1996) 517 U.S. 793, 797 [135 L. Ed. 2d 76, 116 S. Ct. 1761].) However, where a prior federal judgment was based on federal question jurisdiction, the preclusive effect of the prior judgment of a federal court is determined by federal law. (Limbach v. Hooven & Allison Co. (1984) 466 U.S. 353, 361-362 [80 L. Ed. 2d 356, 104 S. Ct. 1837]; Butcher v. Truck Ins. Exchange (2000) 77 Cal. App. 4th 1442, 1452 [92 Cal. Rptr. 2d 521].) Where a prior federal judgment was based on *1554 diversity jurisdiction, the preclusive effect is subject to federal common lawmeaning the law of the state in which the federal court sitsif the state law is compatible with federal interests. (Semtek Int'l Inc. v. Lockheed Martin Corp. (2001) 531 U.S. 497, 509 [149 L. Ed. 2d 32, 121 S. Ct. 1021]; Burdette v. Carrier Corp. (2008) 158 Cal. App. 4th 1668, 1674 [71 Cal. Rptr. 3d 185].) Federal question jurisdiction is pursuant to title 28 United States Code section 1331, which provides that district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States. Diversity jurisdiction under title 28 United States Code section 1332, gives district courts original jurisdiction of civil actions where the matter in controversy exceeds $75,000 and is between citizens of different states.
Here, the complaint from the federal case in Florida was not part of the record on appeal, and the record did not disclose the basis of jurisdiction for the complaint filed in Florida. On our own motion, we have obtained and, with appropriate notice to the parties, take judicial notice of the complaint filed in the United States District Court, Southern District of Florida American Disability Association, Inc. v. BFS Retail and Commercial Operations, LLC, supra, No. 01-6529. (Evid. Code, §§ 452, 459.) That federal complaint was based on federal question jurisdiction (28 U.S.C. § 1331), not diversity jurisdiction (28 U.S.C. § 1332).
Thus, we look to the preclusive effect under federal law, though we observe federal law is consistent with California law in this case.[5]
(2) Under federal and California law, res judicata generally precludes parties or their privies from litigating in a second lawsuit issues that were or could have been litigated in a prior suit. (Rivet v. Regions Bank of La. (1998) 522 U.S. 470, 476 [139 L. Ed. 2d 912, 118 S. Ct. 921] [case brought in Louisiana state court was improperly removed to federal court, where basis for removal was defendants' assertion that action was precluded by prior federal court orders]; Mycogen Corp. v. Monsanto Co., supra, 28 Cal. 4th 888, 896-897, 904.)
*1555 "Under both California and federal law, res judicata bars a subsequent suit if the same cause of action has been previously adjudicated in a suit between the same parties. (Montana v. United States (1979) 440 U.S. 147, 153 [59 L. Ed. 2d 210, 216-217, 99 S. Ct. 970].) It is also settled ... that a court-approved settlement pursuant to a final consent decree in a class action will operate to bar subsequent suits by class members. [Citations.] ... `A judgment entered ... by consent or stipulation, is as conclusive a ... bar as a judgment rendered after trial.' [Citations.]" (Johnson v. American Airlines, Inc. (1984) 157 Cal. App. 3d 427, 431 [203 Cal. Rptr. 638] (Johnson), citing inter alia Dosier v. Miami Valley Broadcasting Corp. (9th Cir. 1981) 656 F.2d 1295, 1298.)
(3) A consent decree is a "court decree that all parties agree to." (Black's Law Dict. (8th ed. 2004) p. 441.) Federal law recognizes that an attorney has power to bind his or her client. (Stone v. Bank of Commerce (1899) 174 U.S. 412, 422 [43 L. Ed. 1028, 19 S. Ct. 747].) California recognizes that a consent decree entered by consent of an attorney is binding upon the client. (Holmes v. Rogers (1859) 13 Cal. 191, 200.) Thus, the Florida consent decree entered by consent of BFRC's attorney binds BFRC, and BFRC does not argue to the contrary.
(4) Under federal and California law, a judgment in a class action is binding on class members in any subsequent litigation, though the ability to bind absent class members depends on compliance with due process regarding notice and adequate representation. (Richards v. Jefferson County, supra, 517 U.S. at pp. 798-801 [135 L. Ed. 2d 76] [Alabama state court violated due process by concluding challengers to county tax were bound, under state law as to res judicata, by prior adjudication to which challengers had not been parties]; Cooper v. Federal Reserve Bank of Richmond (1984) 467 U.S. 867, 874 [81 L. Ed. 2d 718, 104 S. Ct. 2794]; Johnson, supra, 157 Cal.App.3d at p. 431; 5 Newberg on Class Actions (4th ed. 2002) § 16:21, pp. 230, 235; see also Consumer Advocacy Group, Inc. v. ExxonMobil Corp. (2008) 168 Cal. App. 4th 675, 689-693 [86 Cal. Rptr. 3d 39] [discussing privity in context of plaintiffs purporting to act as enforcers of the public interest].)
(5) Where a federal court, in a case brought under the ADA and state disability laws, does not resolve any issue of the state disability laws, the federal courts will dismiss the state claims without prejudice to their being filed in state court, even where the state disability statutes incorporate the ADA. Thus, in Wander v. Kaus (9th Cir. 2002) 304 F.3d 856 (Wander), a plaintiff filed a lawsuit in federal court, alleging the defendants' structural barriers discriminated against the disabled in violation of title III of the ADA and the California DPA. (Wander, at p. 857.) The DPA claim was premised on the ADA violation. The plaintiff sought injunctive relief under the ADA *1556 and damages under the DPA. Damages are not available to a private plaintiff suing under the ADA; the remedy is limited to injunctive relief. (42 U.S.C. § 12188(a)(1) [remedies available to private plaintiff, under ADA subchapter regarding public accommodations and services operated by private entities, are remedies set forth in 42 U.S.C. § 2000a-3(a), civil rights statute authorizing civil action for injunctive relief]; Wander, supra, 304 F.3d at p. 858; Org. for Advancement of Minorities v. Brick Oven Restaurant (S.D.Cal. 2005) 406 F. Supp. 2d 1120, 1129.) The ADA states it does not limit remedies available under state law. (42 U.S.C. § 12201(b).)
(6) In Wander, the defendants' transfer of the property to new owners rendered moot the ADA claim for injunctive relief, leaving only the DPA claim for damages. The defendants moved to dismiss the ADA claim as moot and to dismiss the state law claim without prejudice under the discretionary supplemental jurisdiction statute, title 28 United States Code section 1367(c), which provides that district courts may decline to exercise supplemental jurisdiction over a claim if it has dismissed all claims over which it has original jurisdiction. The federal district court granted the motion. The plaintiff appealed, challenging the district court's ruling that the mere fact that a previous violation of federal law would also give rise to a state law claim was inadequate to vest the district court with federal question jurisdiction over the state law claim. (Wander, supra, 304 F.3d at p. 858.) The Ninth Circuit affirmed, holding "there is no federal-question jurisdiction over a lawsuit for damages brought under California's [DPA], even though the California statute makes a violation of the federal [ADA] a violation of state law. Congress intended that there be no federal cause of action for damages for a violation of Title III of the ADA. To exercise federal-question jurisdiction in these circumstances would circumvent the intent of Congress. Federal-question jurisdiction is not created merely because a violation of federal law is an element of a state law claim." (Id. at p. 857.)
As observed in Wander, the same conclusion was reached in other cases, e.g., Pickern v. Best W. Timber Cove Lodge Marina Resort (E.D.Cal. 2002) 194 F. Supp. 2d 1128, which dismissed the state law claims despite recognizing that litigation of a new suit in state court may create some inconvenience to the plaintiff. (Id. at p. 1133.)
In most cases, when federal and state law claims are joined in a federal court action and the federal claims are dismissed, the pendent state claims are dismissed without prejudice to filing them in state court, in order to avoid "[n]eedless decisions of state law ... as a matter of comity and to promote justice between the parties." (Mine Workers v. Gibbs (1966) 383 U.S. 715, 726 [16 L. Ed. 2d 218, 86 S. Ct. 1130], limited and criticized on other grounds, e.g., DaimlerChrysler Corp. v. Cuno (2006) 547 U.S. 332 [164 L. Ed. 2d 589, 126 S. Ct. 1854]; Schneider v. TRW, Inc. (9th Cir. 1991) 938 F.2d 986, 993.)
*1557 Additionally, we observe the commonsense statement in a plurality opinion of the United States Supreme Court (with no dissent on this point), with no apparent need for citation of authority, agreeing with the court of appeals that res judicata did not bar claims in a federal district court in Georgia based on a prior judgment of a South Carolina district court, because the federal court in South Carolina expressly left open the option for the claims to be pursued at a later time. (United States v. Seckinger (1970) 397 U.S. 203, 206, fn. 6 [25 L. Ed. 2d 224, 90 S. Ct. 880].) Seckinger was cited for this point in Superior Motels, Inc. v. Rinn Motor Hotels, Inc. (1987) 195 Cal. App. 3d 1032, 1058 [241 Cal. Rptr. 487] (special master's findings made in determining whether to lift stay on state court proceedings after appointment of federal receiver were not entitled to preclusive effect in state unlawful detainer action) and U.S. v. Burns (W.D.Pa. 1981) 512 F. Supp. 916, 921 (in disposing of lawsuit, court may reserve right of party to bring second suit arising from same subject matter), questioned on other grounds in U.S. v. Vineland Chem. Co. (D.N.J. 1988) 692 F. Supp. 415, 420.
Here, the federal court was not required to decide whether to dismiss the state law claims, because those claims were reserved by the consent of the parties (reserving any issue of damages). Indeed, the consent decree's "INTRODUCTION" described the "Lawsuit" without any reference whatsoever to state law. It mentioned only the ADA.
There was express language in the Florida judgment reserving any issue of damages, and indeed the federal court in Florida relied upon this reservation to lessen the standard for notice to class members. Thus, the federal court's October 30, 2002, "FINAL JUDGMENT APPROVING CLASS CERTIFICATION AND PROPOSED AMENDED CONSENT DECREE AND DISMISSING ACTION WITH PREJUDICE" stated in a footnote: "The Proposed Amended Consent Decree reflects the deletion of damage claims that the parties voluntarily excised from the Proposed Consent Decree in August, 2002, after discussions with all of the then objectors." The judgment further stated that since the issue of damages had been voluntarily excised and the case was limited to injunctive/declaratory relief, the court was certifying the class under rule 23(b)(2), which allows a class action to proceed if prerequisites are satisfied and "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole ...." The federal court said, "The Proposed Amended Consent Decree meets [rule 23](b)(2)'s strictures because the relief sought in this action is *1558 purely injunctive and declaratory.[6] ... [P]laintiff and plaintiff class are seeking purely injunctive relief to remedy BFRC's alleged non-compliance with Title III which is a federal civil rights statute."
The federal court in Florida went on to say that, while rule 23(b)(2) class actions do not require notice to absent class members, the parties suggested various forms of notice (publishing notice in USA Today, posting the proposed consent decree on the attorney's Web site, posting notice at each of BFRC's store locations, and sending notice to disability organizations). The federal court concluded that, since the case was a rule 23(b)(2) case, these forms of notice exceeded the requirements of due process. The federal court cited Eisen v. Carlisle & Jacquelin (1974) 417 U.S. 156 [40 L. Ed. 2d 732, 94 S. Ct. 2140], which required, in a case that was not limited to injunctive relief, reasonable effort to give individual notice to each identifiable class member. (Id. at p. 176, criticized on other grounds in, e.g., In re Seagate Tech. II Sec. Litig. (N.D.Cal. 1994) 843 F. Supp. 1341.) We note new federal legislation was enacted in 2005the Class Action Fairness Act of 2005 (28 U.S.C. § 1711 et seq.)but we need not address it, because it was enacted after the Florida federal judgment was entered, and no party raises it in this appeal.
The proposed consent decree prepared by the parties and approved by the federal court did not expressly state the withdrawal of damages issues, but it did expressly state the claims being released by the decree were claims for injunctive or declaratory relief or attorney fees, i.e., "all claims asserted by named Plaintiff and/or the Settlement Class in the lawsuit or which could be asserted by them during the Term of this Decree, any and all past and/or present claims, rights, demands, charges, complaints, actions, causes of action, obligations, or liabilities of any and every kind, known or unknown, for injunctive or declaratory relief or attorneys' fees, based upon Title III of the ADA and its promulgated rules and regulations relating to or concerning access for persons with Mobility Disabilities and dexterity disabilities at the BFRC Retail Tire and Service Stores covered by this Decree." (Italics added.)
(7) Under these facts, we conclude federal law does not preclude litigation of the state law claims in state court.
Our conclusion that res judicata is inapplicable is consistent with the opinion of the federal court in California in this case, which dismissed plaintiff's ADA claim with prejudice on the ground of res judicata, butafter *1559 ruling the state law claim did not present a federal questiondeclined to exercise supplemental jurisdiction and dismissed plaintiff's state law claim without prejudice, despite acknowledging that litigation of a new suit in state court "may somewhat inconvenience the parties."
(8) Our conclusion that res judicata does not bar this lawsuit is also consistent with California law. Thus, as stated in Ellena v. State of California (1977) 69 Cal. App. 3d 245 [138 Cal. Rptr. 110] (Ellena): "Although a stipulated judgment is no less conclusive than a judgment entered after trial and contest [citations] it is axiomatic that its res judicata effect extends only to those issues embraced within the consent judgment. [Citations.] Thus, while a stipulated judgment normally concludes all matters put into issue by the pleadings, the parties can agree to restrict its scope by expressly withdrawing an issue from the consent judgment. [Citations.] As cogently stated in Miller & Lux, Inc. v. James [(1919) 180 Cal. 38] at page 44 [179 P. 174]: `The rule of res adjudicata is to prevent vexatious litigation and to require the parties to rest upon one decision in their controversy, but where they expressly agreed to withdraw an issue from the court, the reason for the rule ceases. The issue is not in fact adjudged, and the parties themselves having consented to that method of trial are not entitled to invoke the rule which requires parties to submit their whole case to the court. If they consent to adjudicate their differences piecemeal, there is no reason that the court should extend the rules of law to prevent that which they had expressly agreed might be done.'" (Ellena, supra, 69 Cal.App.3d at pp. 260-261, italics omitted.) Ellena added, "The exception to the normal res judicata effect of a judgment, as articulated in Miller & Lux, Inc. v. James, supra, 180 Cal. 38, requires that an otherwise included issue be withdrawn by an express reservation." (Ellena, supra, 69 Cal.App.3d at p. 261.)
Miller & Lux, Inc. v. James, supra, 180 Cal. 38, held that a stipulation in a prior case, that no evidence be offered to prove an appropriation of water greater than a stated number of cubic feet, and that the court need not make any finding as to any appropriation other than the said number of cubic feet, amounted to a withdrawal of the issue of other appropriations from the consideration of the court, and thus the court decision in the first case was not res judicata as to the issue withdrawn. (Id. at pp. 44-46.)
In Ellena, supra, 69 Cal. App. 3d 245, there was no express reservation withdrawing the issue of severance damages from the eminent domain action, and the appellate court rejected an argument that the parties intended ambiguous language to withdraw the issue. Therefore, Ellena held res judicata did bar the subsequent action. (Ibid.)
*1560 Here, in contrast, we have seen there was express language in the stipulated judgment withdrawing any issue of damages, and indeed the federal court in Florida relied upon this reservation to lessen the standard for notice to class members.
We recognize the consent decree in Florida expressed a general intent that res judicata apply, by stating, "To the extent permitted by law, the final entry of this Decree will be fully binding and effective for purposes of res judicata and collateral estoppel upon BFRC, Plaintiff and the Settlement Class with respect to Title III of the ADA and its promulgated rules and regulations concerning access for persons with Mobility disabilities and dexterity disabilities covered by Title III of the ADA at BFRC Retail Tire and Service Stores." However, this statement merely bars future ADA claims, and nothing in this statement calls for application of res judicata to state law damage claims, even if the state law damage claim turns on an ADA violation. Thus, BFRC's citation of language in the consent decreethat the settlement was intended to "avoid the uncertainties and costs of further or future litigation"can easily be explained as an intent to avoid further or future litigation of federal ADA claims.
We also recognize the consent decree said one of its purposes was to achieve improvements in a manner which satisfied BFRC's obligations under the ADA "and ADA-Related Laws," and compliance with the decree would constitute "full satisfaction of the claims of the Plaintiff, Class Counsel and Settlement Class relating to accessibility issues and compliance with Title III of the ADA or regulations promulgated thereunder." (Underscoring omitted.) However, nothing in these statements disposed of the damage claims, i.e., the state law claims.
(9) Even assuming for the sake of argument that the federal court in Florida meant for the consent judgment to bar any state law damage claims, the federal court's conclusion would not be binding on us, because the federal court conducting the class action "`"cannot predetermine the res judicata effect of the judgment, this [effect] can be tested only in a subsequent action."'" (Hypertouch, Inc. v. Superior Court (2005) 128 Cal. App. 4th 1527, 1542-1543 [27 Cal. Rptr. 3d 839], italics omitted, quoting Cartt v. Superior Court (1975) 50 Cal. App. 3d 960, 968, fn. 12 [124 Cal. Rptr. 376] [discussing rule 23 class actions]; see also 5 Newberg on Class Actions, supra, § 16:25, p. 264.)
BFRC argues that, because California's DPA explicitly integrates the ADA (see §§ 54 & 54.1, fn. 1, ante), the federal decree against future ADA claims *1561 also bars future DPA claims. We disagree, because the federal court documents clearly withdrew any damage claims, and the integration of the ADA into the DPA did not render the DPA claim a federal question. (Wander, supra, 304 F.3d 856.)
BFRC argues that constitutional principles of federalism require us to give full effect to the federal court judgment. However, we are giving full effect to the federal court judgment. It is the federal court judgment which expressly withdraws damage claims from its scope.
Even assuming for the sake of argument that the consent decree could be considered ambiguous, any ambiguity would be resolved against BFRC because, in the Florida case, the "JOINT MOTION FOR ORDER GRANTING PRELIMINARY APPROVAL OF PROPOSED CONSENT DECREE; FOR CONDITIONALLY CERTIFYING THE SETTLEMENT CLASS; FOR DIRECTING NOTICE TO THE CLASS; AND FOR SCHEDULING FAIRNESS HEARING WITH SUPPORTING MEMORANDUM OF LAW" repeatedly said the consent decree would not release any claim for damages. Thus, in summarizing the proposed settlement, the joint motionsigned by BFRC's attorneysaid, "The release, by the defined settlement class shall include a release of all claims asserted in the lawsuit, past and/or present, and all causes of action, actions, complaints or liabilities of every kind for injunctive relief, declaratory relief and attorneys' fees, whether based on Title III of the ADA or state or local law, rule or regulation. The release does not include claims for individual damages, that otherwise might be available under state law or local ordinance." (Italics added.) In arguing that notice to class members by publication was adequate due to impracticability of individual notice, the joint motion said, "There are no individual damage claims affected by this settlement."
(10) The parties cite Molski v. Gleich, supra, 318 F.3d 937, which did not involve res judicata but rather a direct appeal from a class certification in a federal lawsuit brought under the ADA and California disability laws. There, a consent decree was entered which released claims for "`injunctive relief, declaratory relief, attorney fees, or damages based upon [the ADA] and/or California Disability Law Claims ... [except] [t]he released claims [did] not include personal injury claims involving physical injury to a plaintiff.'" (318 F.3d at pp. 945-946, italics omitted.) The Ninth Circuit reversed the judgment, in part because the notice to absent class members inadequately stated that the decree did not affect rights with respect to "personal injury." The notice failed to explain that only claims involving literally physical injuries were reserved. (Id. at p. 952.) Also, due process required that absent class members be given an opportunity to "opt-out" of the class because statutory treble damages could be substantial. (Id. at p. 952.) BFRC asserts *1562 that plaintiff in this case has no damages other than the statutory maximum of $1,000 under section 54.3, which is unsubstantial and incidental to the injunctive relief sought in the Florida action. However, at this demurrer stage, all we know is that plaintiff's complaint prays for damages. Section 54.3 authorizes damages for each violation, and plaintiff alleges 17 visits to BFRC's stores. In any event, it does not matter whether plaintiff's damages are considered substantial or incidental, because the federal court consent judgment withdrew all damage claims from the federal lawsuit.
BFRC argues reversal of the judgment of dismissal would cause significant hardship to BFRC, because plaintiff and any other class member will be able to sue BFRC for damages, even if BFRC has complied with every aspect of the federal consent decree. However, that is the bargain BFRC struck by agreeing to a consent decree that reserved damage claims. Even assuming the concession was a practical necessity (because damage claims may have rendered the federal lawsuit unsuitable for class action), BFRC cannot now claim hardship.
(11) To the contrary, it would be unjust to allow BFRC to invoke res judicata to bar damage claims, after having agreed to reserve the damage claims. Johnson, supra, 157 Cal.App.3d at page 433, said application of res judicata would not result in any "`manifest injustice,'" assuming the continuing viability of this equitable and discretionary exception to res judicata described in Greenfield v. Mather (1948) 32 Cal. 2d 23, 35 [194 P.2d 1], and criticized in Slater v. Blackwood (1975) 15 Cal. 3d 791, 796 [126 Cal. Rptr. 225, 543 P.2d 593]. Of course, even assuming continuing viability of the manifest injustice exception to res judicata, that exception assumes a basis for application of res judicata exists in the first place. (Schultz v. Harney (1994) 27 Cal. App. 4th 1611, 1619, fn. 6 [33 Cal. Rptr. 2d 276].) Here, we have concluded res judicata does not apply in the first place. Nevertheless, assuming for the sake of argument that a basis for res judicata exists, and further assuming the continuing viability of the manifest injustice exception, we would conclude that application of res judicata would be manifestly unjust in this case due to BFRC's agreement in the federal lawsuit to reserve damage claims, and the fact that the agreement to withdraw damage claims resulted in the federal court approving a relaxed fashion of notice to absent class members. (Eisen v. Carlisle & Jacquelin, supra, 417 U.S. at p. 176 [individual notice to identifiable class members was required in action that sought damages].)
We conclude res judicata does not bar this lawsuit, and the judgment of dismissal must be reversed.
*1563 DISPOSITION
The judgment is reversed. Plaintiff shall recover his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1)-(2).)
Nicholson, J., and Butz, J., concurred.
NOTES
[1] Undesignated statutory references are to the Civil Code.
Section 54 says, "Individuals with disabilities or medical conditions have the same right as [other members of] the general public to the full and free use of ... public facilities, and other public places. [¶] ... [¶] ... A violation of the right of an individual under the [federal] Americans with Disabilities Act of 1990 (Public Law 101-336 also constitutes a violation of this section."
Section 54.1 says, "Individuals with disabilities shall be entitled to full and equal access, as other members of the general public, to accommodations, advantages, facilities, ... places of public accommodation ... and other places to which the general public is invited, subject only to the conditions and limitations established by law, or state or federal regulation, and applicable alike to all persons. [¶] ... [¶] (d) A violation of the right of an individual under the Americans with Disabilities Act of 1990 also constitutes a violation of this section, and nothing in this section shall be construed to limit the access of any person in violation of that act."
Section 54.3 says, "Any person or persons, firm or corporation who denies or interferes with admittance to or enjoyment of the public facilities as specified in Sections 54 and 54.1 or otherwise interferes with the rights of an individual with a disability under Sections 54, 54.1 and 54.2 is liable for each offense for the actual damages and any amount as may be determined by a jury, or the court sitting without a jury, up to a maximum of three times the amount of actual damages but in no case less than one thousand dollars ($1,000), and attorney's fees as may be determined by the court in addition thereto, suffered by any person denied any of the rights provided in Sections 54, 54.1, and 54.2. ... [¶] ... The remedies in this section are nonexclusive and are in addition to any other remedy provided by law [except damages cannot be imposed under both the DPA and section 52 of the Unruh Civil Rights Act], including, but not limited to, any action for injunctive or other equitable relief available to the aggrieved party or brought in the name of the people of this state or of the United States."
[2] We recognize the distinction between res judicata (claim preclusion), which precludes relitigation of the same cause of action, and collateral estoppel (issue preclusion), which bars relitigation of issues. (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal. 4th 888, 896-897 [123 Cal. Rptr. 2d 432, 51 P.3d 297].) Here, although this lawsuit asserted a cause of action under a state statute, and the federal judgment involved a claim under a federal statute, BFRC invoked and the trial court ruled on the ground of res judicata.
The California Supreme Court recently held that a federal court judgment in favor of the defendants in a civil rights action (42 U.S.C. § 1983) arising from police shooting a fleeing suspect, collaterally estopped the plaintiffs from pursuing a wrongful death claim in state court, even on a theory that the defendants' preshooting conduct was negligent. (Hernandez v. City of Pomona (2009) 46 Cal. 4th 501 [94 Cal. Rptr. 3d 1, 207 P.3d 506].) Hernandez has no bearing on the case before us.
[3] "Term of this Decree" means five years from the date of final approval (i.e., final, postfairness hearing approval by a district judge), unless otherwise specified in the decree.
[4] Plaintiff does not claim the stores at issue in his case are outside the scope of the federal consent decree.
[5] In response to our invitation for supplemental briefing, plaintiff declined, and defendant submitted a brief arguing there is conflicting case law on the question of whether we apply federal law in determining the preclusive effect of the federal court judgment. (E.g., Balasubramanian v. San Diego Community College Dist. (2000) 80 Cal. App. 4th 977, 991 [95 Cal. Rptr. 2d 837], criticized on other grounds in Stryker v. Antelope Valley Community College Dist. (2002) 100 Cal. App. 4th 324, 329-337 [122 Cal. Rptr. 2d 489].) Defendant nevertheless says it is not necessary for this court to address the "apparent inconsistencies," because the result in this case is the same regardless of whether California or federal law applies. We agree the result is the same. Defendant explains its view that California and federal law yield a result in defendant's favor. However, defendant's analysis ignores the salient and determinative point that in Florida it agreed to, and the federal court in Florida approved, a reservation of damage claims.
[6] Incidental damages will not necessarily prevent a case from proceeding under rule 23(b)(2). (E.g., Molski v. Gleich (9th Cir. 2003) 318 F.3d 937, 949-951.) For our purposes, however, this point does not matter, because all damage claims were withdrawn from the federal case in Florida.
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178 Cal. App. 4th 1471 (2009)
THE PEOPLE, Plaintiff and Respondent,
v.
PEDRO SANTIAGO, Defendant and Appellant.
No. F056686.
Court of Appeals of California, Fifth District.
November 9, 2009.
CERTIFIED FOR PARTIAL PUBLICATION[*]
*1473 Sylvia Koryn, under appointment by the Court of Appeal, for Defendant and Appellant.
Edmund G. Brown, Jr., Attorney General, Michael P. Farrell, Assistant Attorney General, and Wanda Hill Rouzan, Deputy Attorney General, for Plaintiff and Respondent.
OPINION
WISEMAN, Acting P.J.
In the published portion of this opinion, we uphold the trial court's use of Judicial Council of California Criminal Jury Instructions (2007-2008) CALCRIM No. 3550 when instructing the jury, concluding that this standardized instruction does not improperly direct minority jurors to give way to majority jurors or improperly tell the jury that all criminal cases must be decided at some point. The instruction contains none of the flaws determined to be objectionable in People v. Gainer (1977) 19 Cal. 3d 835 [139 Cal. Rptr. 861, 566 P.2d 997], which disapproved of the use of Allen-type instructions (Allen v. United States (1896) 164 U.S. 492 [41 L. Ed. 528, 17 S. Ct. 154]) in California.
In the unpublished portion of the opinion, we reject appellant's contention that the prosecutor impermissibly commented on appellant's silence at trial in violation of Griffin v. California (1965) 380 U.S. 609 [14 L. Ed. 2d 10, 85 S. Ct. 12296] and conclude there is sufficient evidence to sustain the jury's finding that appellant suffered a prior strike conviction.
PROCEDURAL AND FACTUAL SUMMARIES
Appellant Pedro Santiago was convicted after a jury trial of possession of methamphetamine and resisting arrest. In a bifurcated trial, the jury found that Santiago had suffered one prior strike conviction within the meaning of *1474 Penal Code[1] section 667, subdivisions (c) through (j), and that he had served eight prior prison terms within the meaning of section 667.5, subdivision (b).
The trial court, after striking two of the prior prison-term enhancements and the prior strike conviction, sentenced Santiago on the possession charge to a total term of eight years in state prison (the middle term of two years, plus six, one-year terms for the remaining prior prison terms). The court imposed a 90-day concurrent term on the resisting arrest count.
Santiago was arrested and charged after a Delano City police officer stopped a car in which he was a passenger. The car had a cracked windshield and lacked a front license plate. After noting the car's condition, the officer recognized Santiago as someone with an outstanding warrant who had been alleged to be armed and dangerous. When the officer initiated the traffic stop, the car did not immediately pull over. When it did, Santiago refused to follow the officer's instructions to stay in the car and to keep his hands visible. Santiago ultimately was tased by the officer. When the passengers were removed, the officer found methamphetamine in the middle of the passenger seat where Santiago had been sitting.
DISCUSSION
I. CALCRIM No. 3550
Santiago claims that the court erred when it included in the instruction to the jury standardized CALCRIM No. 3550 over defense counsel's objection. He claims that the instruction led to a jury verdict that was not based upon the evidence and arguments presented at trial. He argues that the instruction suggested instead that minority jurors give way to the opinions of majority jurors and to consider in deliberations that all criminal cases must be decided at some point. According to Santiago, CALCRIM No. 3550 is an impermissible Allen[2]-type instruction.
As given, CALCRIM No. 3550 reads as follows:
"When you go into the jury room, the first thing you should do is select a foreperson. The foreperson should see to it that your discussions are carried on in an organized way and that everyone has a fair chance to be heard. It is your duty to talk with one another and to deliberate in the jury room. You should try to agree on a verdict, if you can. Each of you must decide the case for yourself but only after you have discussed the evidence with the other jurors.
*1475 "Do not hesitate to change your mind if you become convinced that you are wrong. But do not change your mind just because other jurors disagree with you. Keep an open mind and openly exchange your thoughts and ideas about this case. Stating your opinions too strongly at the beginning or immediately announcing how you plan to vote may interfere with an open discussion. [¶] ... Your role is to be impartial judges of the facts ...."
CALCRIM No. 3550 is a predeliberation instruction, given before the matter is submitted to the jury. In contrast, the instruction given in Allen, supra, 164 U.S. 492, was drafted in an attempt to avoid a deadlocked jury. It was given during deliberations after the jury reported that it could not reach a verdict. There were a number of statements made by the court to the jury in Allen that were designed to prevent the deadlock. Among them, the instruction advised the minority jurors to consider the expressed opinions of the majority jurors. In addition, the minority jurors were told to consider whether any doubt they might have was reasonable given that other equally honest and intelligent jurors were convinced otherwise. The instruction also told the deadlocked jurors they had a duty to decide the case. (Id. at p. 501.)
(1) In People v. Gainer, supra, 19 Cal. 3d 835 (Gainer), the California Supreme Court disapproved of the use of Allen-type instructions. The court in Gainer held that an Allen-type instruction was impermissible in California because it "instructs the jury to consider extraneous and improper factors, inaccurately states the law, carries a potentially coercive impact, and burdens rather than facilitates the administration of justice . . . ." (Gainer, supra, at pp. 842-843.)
(2) There are three common recognized features to an Allen-type instruction, although these features will often appear with different nuances. First, the instruction generally contains a discriminatory admonition to minority jurors to rethink their position in light of the majority's views. Second, there is often an inaccurate assertion that the case must at sometime be decided, ignoring the prosecution's option to dismiss after a mistrial. A third common feature is a reference to the expense and inconvenience of a retrial. (Gainer, supra, 19 Cal.3d at pp. 845, 852.) In disapproving the Allen-type charge, the court ruled, "it is error for a trial court to give an instruction which either (1) encourages jurors to consider the numerical division or preponderance of opinion of the jury in forming or reexamining their views on the issues before them; or (2) states or implies that if the jury fails to agree the case will necessarily be retried." (Gainer, supra, at p. 852, fn. omitted.)
(3) We reject Santiago's contention that CALCRIM No. 3550 falls within the same category as the instruction disapproved in Gainer. CALCRIM No. 3550 does not raise any of the concerns identified in Gainer. It is not *1476 directed at a deadlocked jury. It does not improperly direct a deadlocked jury that it is required to reach a verdict. It does not place any constraints on an individual juror's responsibility to consider and weigh the evidence. It does not coerce the jurors into abdicating their independent judgment to majority jurors for expediency. It does not encourage jurors to look at the numerical split in determining whether to hold fast to their views of the evidence. It does not suggest that a failure to reach a verdict will result in an expensive retrial. (See People v. Brown (2004) 33 Cal. 4th 382, 393 [15 Cal. Rptr. 3d 624, 93 P.3d 244]; People v. Engelman (2002) 28 Cal. 4th 436, 439-440 [121 Cal. Rptr. 2d 862, 49 P.3d 209].) Telling a jury it should reach a verdict if it can, before deliberations begin, is not coercive. Similar language has been approved in this state. (Gainer, supra, 19 Cal.3d at p. 856 [approving similar language in CALJIC No. 17.40]; People v. Whaley (2007) 152 Cal. App. 4th 968, 975, 982 [62 Cal. Rptr. 3d 11] [words "if you can" suggest jury may reach deadlock and do not tell jurors they must reach verdict]; People v. Moore (2002) 96 Cal. App. 4th 1105, 1121 [117 Cal. Rptr. 2d 715] [telling jury it should deliberate with goal of reaching verdict if it could do so without violence to individual judgment did not direct jury to reach verdict or place constraints on individual juror's responsibility].)
(4) In reviewing a challenge to the instructions given to a jury, the appellate court considers the entire charge, not parts of a particular instruction. (People v. Castillo (1997) 16 Cal. 4th 1009, 1016 [68 Cal. Rptr. 2d 648, 945 P.2d 1197]; People v. Zepeda (2008) 167 Cal. App. 4th 25, 31 [83 Cal. Rptr. 3d 793].) The remaining portions of CALCRIM No. 3550 instruct the jurors that they each must decide the case for themselves and that they should not change their minds just because other jurors disagree. In other instructions, the court told the jurors in this case that there is always a possibility that the jury would not be able to reach a verdict. In addition, the jury was instructed that facts could be proved by direct or circumstantial evidence and that the jurors must decide whether a fact in issue has been proved based on all the evidence. The jury understood its responsibility.
(5) "The basic question [under Allen and Gainer] ... is whether the remarks of the court, viewed in the totality of applicable circumstances, operate to displace the independent judgment of the jury in favor of considerations of compromise and expediency. Such a displacement may be the result of statements by the court constituting undue pressure upon the jury to reach a verdict, whatever its nature, rather than no verdict at all." (People v. Carter (1968) 68 Cal. 2d 810, 817 [69 Cal. Rptr. 297, 442 P.2d 353], abrogated on other grounds by Gainer, supra, 19 Cal.3d at pp. 851-852; see also People v. Rodriguez (1986) 42 Cal. 3d 730, 775 [230 Cal. Rptr. 667, 726 P.2d 113].) (6) CALCRIM No. 3550 has none of the fatal flaws identified in Gainer, and none of the concerns in Gainer are reflected in the overall instructions given to the jury in this case.
*1477 II.-III.[*]
DISPOSITION
The judgment is affirmed.
Gomes, J., and Hill, J., concurred.
NOTES
[*] Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of parts II and III.
[1] All further statutory references are to the Penal Code unless otherwise noted.
[2] Allen v. United States, supra, 164 U.S. 492 (Allen).
[*] See footnote, ante, page 1471.
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289 Md. 1 (1980)
421 A.2d 974
OKEY LATON LEWIS
v.
STATE OF MARYLAND
[No. 113, September Term, 1979.]
Court of Appeals of Maryland.
Decided November 7, 1980.
*2 The cause was argued before MURPHY, C.J., and SMITH, DIGGES, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ.
George E. Burns, Jr., Assistant Public Defender, with whom was Alan H. Murrell, Public Defender, on the brief, for appellant.
William H. Kenety, Assistant Attorney General, with whom were Stephen H. Sachs, Attorney General, and Thomas E. Hickman, State's Attorney for Carroll County, on the brief, for appellee.
DAVIDSON, J., delivered the opinion of the Court.
This case presents the question whether in an appeal from the District Court to the Circuit Court, an accused who challenges his District Court conviction may be tried de novo in the Circuit Court proceeding on the remaining charges in the original District Court charging document that the District Court had deemed to be merged into the conviction.
Okey Laton Lewis, the petitioner, was charged in a single District Court charging document with affray, disorderly conduct, and assault and battery. He was tried in the District Court of Maryland sitting in Carroll County. The docket indicates that he was found guilty of affray and sentenced to a term of two years. It further indicates that he was found guilty of disorderly conduct. While no sentence was imposed for disorderly conduct, the docket contains the notation that the charge was "merged into and part of affray." Finally, while the docket does not reflect a verdict on the assault and battery charge or that a sentence was *3 imposed, it does contain the notation that this charge also was "merged into and part of affray."
The petitioner appealed to the Circuit Court for Carroll County. He was tried de novo by that Court which found him not guilty of affray, guilty of disorderly conduct, and guilty of assault and battery. That Court sentenced him to a term of two years for assault and battery and suspended imposition of sentence for disorderly conduct. The petitioner filed a petition for a writ of certiorari that we granted. We shall affirm the judgment of the Circuit Court.
The petitioner contends that the Circuit Court had no jurisdiction to try the charges of disorderly conduct and assault and battery. He asserts that because Md. Code (1974, 1980 Repl. Vol.), §§ 12-101 (f), 12-401 (a), 12-403 (a), and 12-401 (d) of the Courts and Judicial Proceedings Article provide that an accused may appeal to the Circuit Court from a final judgment entered in the District Court, the Circuit Court has appellate jurisdiction only after a final judgment has been entered in the District Court.[1]
The petitioner claims that a final judgment consists of both a verdict and sentence. He maintains that the absence of a verdict on the assault and battery charge and of sentences on both the disorderly conduct and assault and *4 battery charges establish that in the District Court there were no final judgments on these charges. The petitioner argues, therefore, that the Circuit Court had no jurisdiction to try these charges on appeal and consequently, that "there was no mechanism for getting the two ancillary charges before the [Circuit] Court."
In addition, the petitioner asserts that in the District Court he was not convicted on the disorderly conduct and assault and battery charges. He contends that the constitutional guarantee against double jeopardy prohibits him from being tried on those charges in the Circuit Court.
Petitioner concludes that under all of these circumstances he cannot be tried in the Circuit Court on the disorderly conduct and assault and battery charges. We do not agree.
In a criminal case, a final judgment consists of a verdict and either the pronouncement of sentence or the suspension of its imposition or execution. Langworthy v. State, 284 Md. 588, 596-97, 399 A.2d 578, 583 (1979); Kaefer v. State, 143 Md. 151, 160, 122 A. 30, 33 (1923). See Johnson v. State, 191 Md. 447, 450, 62 A.2d 249, 250 (1948). Here the record shows that in the District Court the petitioner was found guilty of affray and sentenced to a term of two years. Thus, there was a final judgment that could be appealed to the Circuit Court.
Because the Circuit Court is exercising appellate jurisdiction when an appeal is taken from the District Court, see Hardy v. State, 279 Md. 489, 492, 369 A.2d 1043, 1046 (1977), the offenses are tried on the original District Court charging document. See Md. Rule 1314 a; Md. Rule 710 d.[2]See also Pinkett v. State, 30 Md. App. 458, 467-69, 352 A.2d *5 358, 364-66, cert. denied, 278 Md. 730 (1976). Here, since the affray, disorderly conduct, and assault and battery charges were all included in the original District Court charging document, all of these charges were properly before the Circuit Court.
An appeal that is brought from the District Court to the Circuit Court is treated as a wholly original proceeding, that is "as if no judgment had been entered in the district court." See Hardy, 279 Md. at 492-93, 369 A.2d at 1046-47; Borden Mining Co. v. Barry, 17 Md. 419, 428-29 (1861). Therefore, unless the constitutional guarantee against double jeopardy prohibits a de novo trial on the disorderly conduct and assault and battery charges that were deemed by the District Court to be merged into the affray conviction, these charges could be tried de novo in the Circuit Court.
Ordinarily, the doctrine of double jeopardy imposes no limitations upon the power of a court of competent jurisdiction to retry an accused who has successfully challenged his conviction. North Carolina v. Pearce, 395 U.S. 711, 719, 89 S. Ct. 2072, 2078 (1969); United States v. Ball, 163 U.S. 662, 671-72, 16 S. Ct. 1192, 1195 (1896); Sweetwine v. State, 288 Md. 199, 204, 421 A.2d 60, 63 (1980). The rationale underlying this principle is that ordinarily when an accused chooses to challenge his conviction and succeeds, the slate is wiped clean, and the parties may start anew. Parks v. State, 287 Md. 11, 16, 410 A.2d 597, 601 (1980). This principle and its underlying rationale lead to the conclusion that when in an appeal from the District Court to the Circuit Court an accused challenges the District Court conviction, he may be tried de novo in the Circuit Court proceeding on the remaining charges in the original District Court charging document that the District Court had deemed to be merged into the conviction.
Here, in an appeal from the District Court to the Circuit Court, the petitioner successfully challenged his District Court conviction and was acquitted on affray. As a result, the petitioner could properly be tried de novo on the remaining disorderly conduct and assault and battery *6 charges that the District Court had deemed to be merged into the conviction on affray.
Of course, if the petitioner had been acquitted in the District Court on the disorderly conduct and assault and battery charges, the constitutional guarantee against double jeopardy would have protected him from being tried de novo in the Circuit Court on these charges. Block v. State, 286 Md. 266, 268-69, 407 A.2d 320, 321 (1979); Pugh v. State, 271 Md. 701, 706, 319 A.2d 542, 545 (1974). Here, however, the docket contains the notation that the disorderly conduct and assault and battery charges were "merged into and part of affray." This notation establishes that the petitioner was not acquitted on either of the two charges. Accordingly, the doctrine of double jeopardy imposed no limitation upon the Circuit Court's power to try the petitioner de novo on the disorderly conduct and assault and battery charges.[3] Therefore, we shall affirm.
Judgment affirmed.
Petitioner to pay costs.
NOTES
[1] § 12-101 (f) provides in pertinent part:
"`Final judgment' means a judgment, decree, sentence, order, determination, decision, or other action by a court ... from which an appeal ... may be taken." (Emphasis added.)
§ 12-401 (a) provides in pertinent part:
"[T]he defendant in a criminal case may appeal from a final judgment entered in the District Court.... In a criminal case, the defendant may appeal even though imposition or execution of sentence has been suspended." (Emphasis added.)
§ 12-403 (a) provides in pertinent part:
"An appeal from the District Court sitting in one of the counties shall be taken to the circuit court of the county in which judgment was entered."
§ 12-401 (d) provides in pertinent part:
"In ... a criminal case in which sentence has been imposed or suspended ... an appeal shall be tried de novo."
[2] Md. Rule 1314 a provides in pertinent part:
"Where an appeal is to be heard de novo, it shall be tried according to the rules of procedure governing cases instituted in the appellate court, except the rules relating to the form and sufficiency of the pleadings...."
Md. Rule 710 d provides in pertinent part:
"An offense may be tried on a District Court charging document if the offense is within the jurisdiction of the District Court and the defendant... appeals from the judgment of the District Court."
[3] Petitioner's contention that in the Circuit Court the prosecutor explicitly waived prosecution of the disorderly conduct and assault and battery charges is not supported by the record. Petitioner's alternative suggestion that the three offenses here involved are distinct and that the doctrine of merger does not apply was not raised in the Circuit Court and, therefore, is not properly before us. Md. Rule 885. Petitioner's additional alternative suggestion that he was prejudiced by a lack of notice that the disorderly conduct and assault and battery charges would be tried de novo in the Circuit Court was not raised in that Court and, therefore, is not properly preserved for review. Md. Rule 885.
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280 Pa. Super. 256 (1980)
421 A.2d 710
COMMONWEALTH of Pennsylvania
v.
Joseph J. WASIUTA, Appellant.
Superior Court of Pennsylvania.
Argued March 19, 1980.
Filed August 29, 1980.
*257 Jeffrey Staniels, Assistant Public Defender, Philadelphia, for appellant.
Victor M. Fortuno, Assistant District Attorney, Philadelphia, for Commonwealth, appellee.
Before HESTER, WICKERSHAM and LIPEZ, JJ.
LIPEZ, Judge:
Appellant was convicted, after a non-jury trial, of theft by receiving stolen property.[1] We agree with his contention that the court below erred in refusing to suppress certain evidence adduced at trial, and reverse.
The record shows the facts as follows:
On November 6, 1978, two police officers drove, in their patrol wagon, to an intersection in Philadelphia in order to investigate a police radio call reporting a disorderly crowd. When they arrived, they observed appellant standing on the *258 sidewalk displaying an object to a small group of men. One of the officers thought that the object was a gun. Upon seeing the officers, appellant placed the object inside the waistband of his trousers and walked quickly away from them. The policemen caught up with him, grabbed his arm, reached into the top of his trousers and retrieved the object. It was, thereupon, immediately apparent that the object was not a gun, but rather a camera. The camera had been stolen earlier that day in a burglary of which the officers had no knowledge whatever. The record shows that, at this point, one of the officers asked appellant what he was doing with the camera and where he had obtained it,[2] and appellant made a statement in response to the questions. Appellant was then taken into custody. The officers learned only after they had taken appellant to the police station that the camera had been reported stolen.
Appellant now argues that since, at the time the camera was found in appellant's possession, the officers had no knowledge or even reasonable suspicion that appellant's possession of it was related to criminal activity, his arrest was illegal and the camera should have been suppressed. We agree and reverse.
In the court below, Halbert, J., appellant moved for suppression of the camera and the statement. The statement was suppressed, but the camera was not. Neither side appealed this order, and the Commonwealth made no attempt to introduce the statement at trial; it is, therefore, *259 irrelevant to consideration of this appeal, and we shall not perpetuate the needless confusion engendered by the lengthy but gratuitous discussion of this non-issue engaged in (beginning with post-verdict motions) by appellant, the Commonwealth and the trial court. A court may not support an adjudication of guilt with evidence not part of the trial record.[3]
With regard to the suppression court's refusal to exclude the camera,
[o]ur function on review is to determine whether the record supports the suppression court's factual findings and the legitimacy of the inferences and legal conclusions drawn from those findings. In making this determination, we consider only the evidence of the prosecution's witnesses and so much of the evidence for the defense as, fairly read in the context of the record as a whole, remains uncontradicted.
Commonwealth v. Hunt, 280 Pa.Super. 205 at 207, 421 A.2d 684 at 685 (1980), citing Commonwealth v. Kichline, 468 Pa. 265, 280-81, 361 A.2d 282, 290 (1976).
The Commonwealth maintains that the police officers, having discovered the camera during a limited search of the type held not unreasonable by the Supreme Court of the United States in Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968), were given probable cause to seize it after appellant, in response to their questions, made the statement adverted to above. This argument misapprehends the purpose of a "Terry" search, the legal meaning of "seize" in Fourth Amendment cases, and the purpose of the Constitution's requirement of probable cause.
*260 The "seizure" of the camera was complete when the police officer grasped it and removed it from appellant's pants. We must, therefore, determine whether the police had any legal basis for the seizure at that time.
It is clear that the search and seizure were without probable cause. The facts of Commonwealth v. Santiago, 220 Pa.Super. 111, 283 A.2d 709 (1971) are instructive:
At 6:20 on the evening of June 10, 1970, appellant was walking on Green Street, Philadelphia, carrying two small packets: one silver-colored and the other dull in color. Officer Kane of the Philadelphia Police Department who was patrolling the area, noticed appellant. Although not a member of the narcotics squad, the officer knew appellant and knew that he had been arrested several times on narcotics charges even though he had never been convicted of those charges.
Officer Kane called appellant's name and told him to come over to the patrol car which was parked along the curb. Instead of obeying his command, appellant turned and ran. Kane chased him and finally caught him as he was trying to climb a fence. The officer pulled him off the fence and as he did so a silver-foil packet fell to the ground. A second packet was found in appellant's hand. Appellant was arrested and charged with felonious possession of narcotics drugs. Upon analysis, heroin was found in small glazed bags contained in the packets.
220 Pa.Super. at 112-13; 283 A.2d at 710. Santiago was convicted. On appeal, this court held:
We agree that flight alone does not constitute probable cause, and are of the opinion that in this case there were no factors coupled with flight which might have constituted probable cause for arrest. Appellant had no prior narcotics convictions nor was contraband visible. The evidence should have been suppressed.
220 Pa.Super. at 115, 283 A.2d at 711 (emphasis added). A fortiori, in the case before us, once it was discovered that appellant had in his possession not a gun but a camera, there *261 were no circumstances coupled with appellant's flight which constituted probable cause for arrest.[4]
Since the evidence does not show that the officer's suspicion that appellant was in possession of a gun was unreasonable, the officer's search of appellant in order to determine the nature of the object which appellant had placed beneath the waistband of his trousers was justifiable. See Sibron v. New York, 392 U.S. 40, 88 S. Ct. 1889, 20 L. Ed. 2d 917 (1968); Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968). However, such a search, grounded as it is in less than probable cause, is quite narrowly restricted. The Supreme Court of Pennsylvania has aptly stated the applicable law:
In enunciating the test to be applied, the United States Supreme Court in Terry held that a "stop and frisk" is constitutionally permissible only ". . . where a police officer observes unusual conduct which leads him reasonably to conclude in the light of his experience that criminal activity may be afoot and that the persons with whom he is dealing may be armed and presently dangerous, where in the course of investigating this behavior he identifies himself as a policeman and makes reasonable inquiries, and where nothing in the initial stages of the encounter serves to dispel his reasonable fear for his own or others' safety, . . ." Terry, supra [392 U.S.] at 30, 88 S. Ct. at 1884 (emphasis added). See also Commonwealth v. Pollard, 450 Pa. 138, 299 A.2d 233 (1973); Commonwealth v. Berrios, 437 Pa. 338, 263 A.2d 342 (1970); Commonwealth v. Hicks, 434 Pa. 153, 253 A.2d 276 (1969); Commonwealth v. Clarke, 219 Pa.Super. 340, 280 A.2d 662 (1971).
As this Court noted in Commonwealth v. Berrios, supra: "A search on this ground is justified only when `a reasonably prudent man in the circumstances would be warranted in the belief that his safety or that of others was in danger': Terry v. Ohio, supra [392 U.S.] at 27, 88 S.Ct. at *262 1883. In other words, the sole justification for such a search is the protection of the police officer or others nearby. Moreover, the arresting officer must be able `to point to particular facts from which he reasonably inferred that the individual was armed and dangerous.' Sibron v. New York, 392 U.S. 40, 64, 88 S. Ct. 1889, 1903 (1968). Good faith on the part of the officer, in itself is not enough: Terry v. Ohio, supra, n. 3, 437 Pa. at 341, 263 A.2d at 343 (emphasis added).
Commonwealth v. Hunt, 280 Pa.Super. at 212, 421 A.2d at 687, supra, quoting Commonwealth v. Pegram, 450 Pa. 590, 594-95, 301 A.2d 695, 697-98 (1973).
In the instant case, when the officers discovered that what they had thought was a gun was actually a camera, their fear for their safety or that of others evaporated, and they had no further reason to continue the search or to hold appellant. Appellant's statements may not be relied upon.
The Commonwealth's reliance upon Commonwealth v. Galadyna, 248 Pa.Super. 226, 375 A.2d 69 (1977), is misplaced. In that case, the arresting officers were aware of considerably more in the way of facts leading reasonably to an inference of criminal activity than the mere flight of appellant in the instant case. See 248 Pa.Super. at 231-32, 375 A.2d at 71.
We hold that, because the police had no probable cause to believe that appellant's possession of the camera was connected with any criminal activity on his part, the court below erred in refusing to suppress it.
Judgment of sentence reversed, and the cause remanded for new trial.
WICKERSHAM, J., files a dissenting statement.
WICKERSHAM, Judge, dissenting:
I dissent.
I would affirm the judgment of sentence on the opinion of the learned trial judge, the Honorable Michael E. Wallace.
NOTES
[1] 18 Pa. C.S. § 3925.
[2] While the arresting officer testified at trial that he could not recall whether appellant had made the statement voluntarily or in response to police questions, the same officer testified unequivocally at the preliminary hearing that the policemen had in fact questioned appellant after discovering the camera:
OFFICER KELLY: He was walking away and sticking down his pants what appeared to me to be a gun in a holster. We then stopped him and frisked him and found this. We asked him what he was doing with it, he said nothing, he said he just bought it.
.....
Q. And then what happened?
A. We asked him where he got it, he said-he told me that he just bought it off some dude on Market Street and it was stolen, that's what he told me.
[3] The post-verdict motions court, Wallace, J., purported to overrule Judge Halbert's order suppressing the statement. Although a court, in certain circumstances, may take such action at this stage, see Commonwealth v. Norris, 256 Pa.Super. 196, 389 A.2d 668 (1978); Commonwealth v. Bonser, 215 Pa.Super. 452, 258 A.2d 675 (1969); Pa.R.Crim.P. 1123(e), there was no basis for such action in the instant case because the Commonwealth had not introduced the statement at trial. The lower court's consideration of that statement in connection with post-verdict motions was improper.
[4] The respective facts and holdings of Commonwealth v. Jeffries, 454 Pa. 320, 311 A.2d 914 (1973) and Commonwealth v. Hunt, 280 Pa.Super. 205, 421 A.2d 684 (1980), are similar.
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279 Pa. Super. 329 (1980)
421 A.2d 224
COMMONWEALTH of Pennsylvania, Appellant,
v.
Michael Dale PLYBON.
Superior Court of Pennsylvania.
Argued December 5, 1979.
Filed July 3, 1980.
*331 Ronald T. Williamson, Assistant District Attorney, Norristown, for Commonwealth, appellant.
Edwin L. Guyer, Blue Bell, for appellee.
Before PRICE, WATKINS and HOFFMAN, JJ.
HOFFMAN, Judge:
Appellant Commonwealth contends that the lower court erred in denying its petition to amend the bill of information against appellee. We disagree and, accordingly, affirm the order of the court below sustaining appellant's demurrer to the evidence.
On December 1, 1978, the District Attorney of Montgomery County filed a bill of information charging appellee with driving "under the combined influence of alcohol and a controlled substance" on September 22, 1978. At trial, however, the Commonwealth presented no evidence indicating that appellee was under the influence of a controlled substance at the time of the incident. At the close of the Commonwealth's case, appellee demurred to the evidence, *332 alleging that the Commonwealth had failed to prove the crime with which he was charged. The Commonwealth then moved to amend the bill of information to delete the reference to controlled substances. After hearing oral argument, the lower court denied the motion to amend and sustained appellee's demurrer. The Commonwealth then took this appeal.
Rule 229 of the Pennsylvania Rules of Criminal Procedure provides that "[t]he court may allow an information to be amended when there is a defect in form, the description of the offense, the description of any person or any property, or the date charged, provided that the information as amended does not charge an additional or different offense." Pa.R. Crim.P. 229. In Commonwealth v. Stanley, 265 Pa.Super. 194, 401 A.2d 1166 (1979), this Court elaborated on the test to be applied in determining whether Rule 229 permits amendment:
[T]he courts of this Commonwealth employ the test of whether the crimes specified in the original indictment or information involve the same basic elements and evolved out of the same factual situation as the crimes specified in the amended indictment or information. . . . If, however, the amended provision alleges a different set of events, or the elements or defenses to the amended crime are materially different from the elements or defenses to the crime originally charged, such that the defendant would be prejudiced by the change, then the amendment is not permitted.
Id., 265 Pa.Super. at 212, 401 A.2d at 1175 (footnotes omitted).
The original bill of information against appellee charged him under section 3731(a)(3) of the Vehicle Code with driving "under the combined influence of alcohol and a controlled substance to a degree which renders the person incapable of safe driving." 75 Pa.C.S.A. § 3731(a)(3). The Commonwealth sought to amend the bill to charge appellee under § 3731(a)(1) of the Code which prohibits driving "under the influence of alcohol to a degree which renders *333 the person incapable of safe driving." Id. § 3731(a)(1). The Commonwealth contends that the proposed amendment would not have prejudiced appellee, reasoning that because both subsections contain the word "alcohol," appellee "was clearly aware that he would be defending against the Driving Under the Influence of Alcohol [charge] from the original information." Commonwealth's Brief at 6. We disagree.
Although appellee was on notice that he would have to defend himself under § 3731(a)(3), he did not know that he would be required to defend against the distinct offense described in § 3731(a)(1). Driving under the influence of alcohol is not a lesser included offense of the crime of driving under the combined influence of alcohol and a controlled substance. Only where "all of the essential elements of the lesser offense are included in the greater" is one crime a lesser included offense of another. Commonwealth v. Ackerman, 239 Pa.Super. 187, 192, 361 A.2d 746, 748 (1976). As the lower court aptly stated, "a person may consume a small amount of alcohol which by itself would not cause the person to violate Section 3731(a)(1) (See [75 Pa.C. S.A.] Section 1547(d)(1)) and yet when combined with a controlled substance [would] render that same person incapable of safe driving in violation of Section 3731(a)(3)." Slip op. at 2-3 (quotation omitted). Thus, one of the elements of the offense defined in § 3731(a)(1) is not a necessary element of the offense defined in § 3731(a)(3); accordingly, the former is not subsumed within the latter.
Moreover, the available defenses to the two crimes differ substantially. In order to defend against the offense charged in the bill of information, appellant needed only to prove that he was not under the influence of a controlled substance at the time of the alleged offense. That defense would have been irrelevant to the charge of driving under the influence of alcohol. That appellee was in fact relying upon this defense is evidenced by his successful demurrer to the Commonwealth's evidence on that ground. Moreover, the potential for prejudice to the defendant is heightened *334 where, as here, the Commonwealth moves to amend only after it has rested its case and the defendant has demurred. Thus, because the elements of and the defenses to the amended charge would have differed materially from the original bill of information, we hold that the proposed amendment would so substantially have altered the offense charged as to prejudice defendant and violate Rule 229. The lower court therefore properly denied the Commonwealth's motion to amend.
Order affirmed.
PRICE, J., dissents.
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632 F. Supp. 2d 179 (2009)
John LOGAN, Plaintiff,
v.
SECTEK, INC., et al., Defendants.
Civil Action No. 3:08-cv-00209 (VLB).
United States District Court, D. Connecticut.
July 8, 2009.
*181 Jane Boucher Monahan, Farmington, CT, for Plaintiff.
Christopher L. Jefford, Bonner, Kiernan, Trebach & Crociata, Hartford, CT, Dawn M. Neborsky, John A. Kiernan, Bonner Kiernan Trebach & Crociata, LLP, Boston, MA, David Bondanza, Louis N. George, Raymond M. Hassett, Hassett & George, Simsbury, CT, for Defendants.
MEMORANDUM OF DECISION GRANTING DEFENDANTS C & D'S AND WOODWARD'S MOTIONS TO DISMISS [Docs. # 27, 28]
VANESSA L. BRYANT, District Judge.
The defendants C & D Security Management, Inc. ("C & D"), and Lance Woodward move pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss the counts directed against them in the amended complaint filed by the plaintiff, John Logan. The named defendant, SecTek, Inc. ("SecTek"), is not a party to the instant motions. C & D and Woodward argue that Logan's amended complaint fails to state claims upon which relief can be granted. For the reasons given below, C & D's and Woodward's motions to dismiss [Docs. # 27, 28] are GRANTED.
The following facts taken from Logan's amended complaint are relevant to C & D's and Woodward's motions to dismiss. Logan was employed by SecTek as a security officer at the Cotter Federal Building in Hartford, Connecticut, beginning in January 2000, pursuant to SecTek's contract with the federal government to provide security. While Logan was at work on or about September 22, 2006, he fell and injured his back. Although he experienced pain as a result of the fall, he was able to continue working until November 13, 2006, when he commenced a leave of absence. His doctor cleared him to return to work in a light duty capacity on November 28, 2006. However, SecTek did not offer any light duty work and refused to allow Logan to return to work until he was cleared for regular duty, which did not happen until February 17, 2007.
While Logan was not working, he missed 40 hours of required classroom training that was scheduled to be held during two weekends in December 2006. SecTek refused to allow Logan to attend that training even though Logan wanted to attend and his doctor permitted him to attend. On February 14, 2007, Logan informed SecTek that he was ready to return to work on February 17, 2007, but SecTek informed him that he could not do so until he attended the required 40-hour classroom training. However, SecTek permitted Logan to attend a firearms training class on February 17, 2007.
When Logan arrived for the firearms training class, he learned that SecTek was not in charge of that class because its contract with the federal government was set to expire on March 1, 2007. Instead, the federal government's new contractor, C & D, was in charge of the firearms training class because C & D was preparing *182 to perform the federal contract. C & D did not permit Logan to attend the firearms training class on February 17, 2007. C & D's project manager, Lance Woodward, informed Logan that C & D had decided not to hire him because he had been out of work due to an injury and had not completed the required 40-hour classroom training. According to Logan, C & D decided to hire most of the security officers who had been employed by Sec-Tek.
Logan then filed the present case against SecTek, C & D, and Woodward. Logan's amended complaint asserts that SecTek and C & D violated the Americans with Disabilities Act (ADA), 42 U.S.C. § 12101 et seq., the Connecticut Fair Employment Practices Act (CFEPA), Conn. Gen.Stat. § 46a-51 et seq., and the Connecticut Workers' Compensation Act, Conn. Gen.Stat. § 31-275 et seq. As to C & D specifically, Logan's amended complaint claims failure to hire and retaliation on the ground of disability discrimination. Logan's amended complaint also asserts that Woodward violated the CFEPA by aiding and abetting C & D's allegedly discriminatory conduct. C & D and Woodward now move to dismiss the counts of Logan's amended complaint that are directed against them.
The United States Supreme Court recently reexamined the standard governing a motion to dismiss: "Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a `short and plain statement of the claim showing that the pleader is entitled to relief.' . . . [T]he pleading standard Rule 8 announces does not require detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. . . . A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. . . . Nor does a complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement". . . .
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. . . . A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. . . . The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. . . . Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. . . .
"[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. . . . Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. . . . [O]nly a complaint that states a plausible claim for relief survives a motion to dismiss. . . . Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. . . . But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has allegedbut it has not `show[n]' `that the pleader is entitled to relief.' Fed. Rule Civ. Proc. 8(a)(2)." Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949-50, 173 L. Ed. 2d 868 (2009).
*183 The Court first examines whether Logan has stated an ADA claim against C & D for its failure to hire him. "In order to establish a prima facie case of discrimination under the ADA, a plaintiff must show (a) that his employer is subject to the ADA; (b) that he is disabled within the meaning of the ADA or perceived to be so by his employer; (c) that he was otherwise qualified to perform the essential functions of the job with or without reasonable accommodation; and (d) that he suffered an adverse employment action because of his disability." Brady v. Wal-Mart Stores, Inc., 531 F.3d 127, 134 (2d Cir.2008). C & D focuses on the second element of the prima facie case, arguing that Logan fails to allege sufficient facts showing that he was disabled or that C & D perceived him to be disabled.
Pursuant to 42 U.S.C. § 12102(2), "[t]he term `disability' means, with respect to an individual(A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment." C & D argues that even if Logan's back injury was an impairment, it did not substantially limit his ability to work, which is a major life activity under 29 C.F.R. § 1630.2(i). "The ADA does not define `substantially limits,' but `substantially' suggests `considerable' or `specified to a large degree.' . . . The EEOC has codified regulations interpreting the term `substantially limits' in this manner, defining the term to mean `[u]nable to perform' or `[s]ignificantly restricted.' See 29 C.F.R. §§ 1630.2(j)(1)(i),(ii)." Sutton v. United Air Lines, Inc., 527 U.S. 471, 491, 119 S. Ct. 2139, 144 L. Ed. 2d 450 (1999). "[W]hether a person has a disability under the ADA is an individualized inquiry." Id. at 483, 119 S. Ct. 2139. The person claiming to have a disability is to be compared to "the average person in the general population." 29 C.F.R. § 1630.2(j)(1).
Applying those provisions to the present case, Logan must allege sufficient facts showing that his back injury substantially limited his ability to work, or that C & D perceived Logan's back injury to substantially limit his ability to work. In opposing C & D's motion to dismiss, Logan argues only that C & D perceived him to be disabled, and he relies on Woodward's statement that C & D had decided not to hire him because he had been out of work due to an injury and had not completed the required 40-hour classroom training. In Logan's view, it is enough that he alleged C & D's awareness of his back injury.
However, the standard articulated in Ashcroft v. Iqbal requires Logan's argument to be rejected. Ashcroft v. Iqbal demands "factual enhancement" so that a plausible claim can be stated. Ashcroft v. Iqbal, 129 S.Ct. at 1949. The complaint must enable the Court "to draw the reasonable inference that the defendant is liable for the misconduct alleged" by examining the context and marshaling its "judicial experience and common sense." Id. at 1949-50. A "sheer possibility" is not enough. Id. at 1949.
In the present case, it is possible that C & D perceived Logan's back injury to substantially limit his ability to work. However, the only fact that Logan offers in his attempt to make a plausible showing in that regard is Woodward's statement. Woodward mentioned Logan's injury, but an injury is not necessarily a disability as defined in the ADA. Woodward's statement did not indicate whether he perceived the injury to substantially limit Logan's ability to work. The manner in which Logan's amended complaint recounts the statement supports that conclusion because Woodward linked Logan's absence from work not only to his injury but *184 also to his absence from the required 40-hour classroom training. Woodward spoke of Logan's injury in the past tense and did not mention Logan's health or ability to work. Therefore, it is merely possible, but not plausible, that Woodward perceived Logan to be disabled in accordance with the ADA definition. Logan could have alleged, but does not allege, other facts that would have taken his ADA claim from the realm of possibility to plausibility. For example, if Logan had alleged that Woodward or other C & D managers made remarks that people with back injuries could not perform most jobs, then Logan might have been able to present a plausible ADA claim.
The Court next examines whether Logan has stated an ADA retaliation claim against C & D. "To establish a prima facie case of retaliation under the ADA, a plaintiff must establish that (1) the employee was engaged in an activity protected by the ADA, (2) the employer was aware of that activity, (3) an employment action adverse to the plaintiff occurred, and (4) there existed a causal connection between the protected activity and the adverse employment action." Weissman v. Dawn Joy Fashions, Inc., 214 F.3d 224, 234 (2d Cir.2000). Under the ADA, "[n]o person shall discriminate against any individual because such individual has opposed any [discriminatory] act or practice . . . or because such individual made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing. . . ." 42 U.S.C. § 12203(a). The protected activity must occur before the adverse employment action occurs. See Gold v. Carus, 131 Fed.Appx. 748, 750 (2d Cir.2005).
In the present case, Logan alleges that C & D failed to hire him, and then Logan complained that he was a victim of discrimination. Logan does not allege that C & D took an adverse action against him after he complained of discrimination. In fact, Logan acknowledges in his opposition to the motions to dismiss that C & D offered him part-time employment after he complained of discrimination. Because Logan does not allege facts showing that he engaged in protected activity before experiencing an adverse employment action, his ADA retaliation claim fails.
The Court next examines whether Logan has stated CFEPA claims against C & D and Woodward. The CFEPA, Conn. Gen.Stat. § 46a-60(a), provides that "[i]t shall be a discriminatory practice in violation of this section: (1) For an employer. . . except in the case of a bona fide occupational qualification or need, to refuse to hire or employ . . . any individual or to discriminate against such individual. . . because of the individual's . . . physical disability. . . ." The CFEPA also provides that "`[p]hysically disabled' refers to any individual who has any chronic physical handicap, infirmity or impairment, whether congenital or resulting from bodily injury, organic processes or changes or from illness. . . ." Conn. Gen.Stat. § 46a-51(15). "The statute does not define `chronic,' but courts have defined it as `marked by long duration or frequent recurrence' or `always present or encountered.' . . . With reference to diseases, the term `chronic' has been defined to mean `of long duration, or characterized by slowly progressive symptoms; deep-seated or obstinate, or threatening a long continuance; distinguished from acute.'" Gomez v. Laidlaw Transit, Inc., 455 F. Supp. 2d 81, 88 (D.Conn.2006).
In order to maintain claims under the CFEPA, Logan must allege sufficient facts showing that his back injury was a chronic impairment. Logan alleges that he suffered the injury on or about September 22, 2006, and that his doctor cleared him to return to work in a regular duty capacity on February 17, 2007. Logan's amended complaint thus indicates that his *185 back injury was fully resolved by February 17, 2007, the date when Woodward informed him that C & D had decided not to hire him. Logan's amended complaint does not allege any facts indicating that his back injury was of long duration, frequently recurred, or was continuously present. Therefore, Logan cannot maintain CFEPA claims against C & D and Woodward.
The final issue is whether Logan has stated a claim against C & D for violation of the Connecticut Workers' Compensation Act. The Connecticut Supreme Court has explained that the act "is directed toward those who are in the employer-employee relationship as those terms are defined in the act. . . . That relationship is threshold to the rights and benefits under the act; a claimant . . . who is not an employee has no right under this statute to claim for and be awarded benefits. . . . [A claimant] may invoke the remedy provided under the [act] only if [the claimant], as a matter of law, satisfies the requisite jurisdictional standard of employee as defined by the legislature. . . ." Smith v. Yurkovsky, 265 Conn. 816, 823, 830 A.2d 743 (2003); see also Kinney v. State, 213 Conn. 54, 60, 566 A.2d 670 (1989). The relevant portion of the Connecticut Workers' Compensation Act, Conn. Gen.Stat. § 31-275(9)(A), provides that "`[e]mployee' means any person who: (i) Has entered into or works under any contract of service or apprenticeship with an employer. . . ." Because Logan had not entered into an employment relationship with C & D, he may not maintain a claim under the Connecticut Workers' Compensation Act.
C & D's and Woodward's motions to dismiss [Docs. # 27, 28] are GRANTED.
IT IS SO ORDERED.
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632 F. Supp. 1030 (1986)
UNITED STATES of America, Plaintiff,
v.
William H. CARRANZA. M.D., Defendant.
No. 85 Cr. 356 (SWK).
United States District Court, S.D. New York.
March 13, 1986.
*1031 Freeman, Nooter & Ginsberg, New York City (Louis M. Freeman, of counsel), for defendant.
Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City (Deborah J. Stavile, Asst. U.S. Atty., of counsel), for U.S.
MEMORANDUM OPINION AND ORDER
KRAM, District Judge.
Currently before the Court is the defendant's motion to dismiss the indictment in the instant case pursuant to Rule 12(b)(2) of the Federal Rules of Criminal Procedure. The indictment was filed on April 17, 1985, and it charged Dr. Carranza, in twenty-one separate counts, with violating 21 U.S.C. § 843(a). These violations are alleged to have occurred between October 22, 1984 and February 4, 1985. For the reasons which follow the motion is denied.
The pertinent facts are summarized below. Dr. Carranza has been a practicing physician for a number of years. In his practice he has, of course, written many prescriptions for narcotics. A physician may not lawfully issue prescriptions, however, unless he has a valid, current Drug Enforcement Administration ("DEA") registration number. Thus, all physicians who wish to write prescriptions must register with the DEA, obtain a registration number, and maintain a current registration number.
Dr. Carranza's DEA registration number expired on August 31, 1982. He voluntarily permitted his registration number to expire at that time. In March, 1983 Dr. Carranza applied to the DEA for a new registration number. Although he attempts to characterize this as an application to extend his expired registration, the March, 1983 application was in fact an application for a new registration number. It appears that Dr. Carranza wrote no prescriptions between August, 1982 and March, 1983. On January 24, 1985 the DEA held a hearing on Dr. Carranza's application for a new registration number. Dr. Carranza testified at that hearing. This application was denied on January 14, 1986. Meanwhile, Carranza had been arrested in connection with the instant allegations on April 9, 1985.
The statute Carranza is charged with violating reads as follows:
Prohibited acts C
(a) Unlawful acts. It shall be unlawful for any person knowingly or intentionally
(2) to use in the course of the manufacture, distribution, or dispensing of a controlled substance, or to use for the purpose of acquiring or obtaining a controlled substance, a registration number which is fictitious, revoked, suspended, expired, or issued to another person.
21 U.S.C. § 843(a)(2) (as amended October 12, 1984, P.L. 98-473, Title II, Ch. V, Part B, § 516, 98 Stat. 2074) (emphasis added).
Prior to the amendment of this statute, which became effective on October 12, 1984, it read as follows:
Prohibited acts C
*1032 Unlawful acts
(a) It shall be unlawful for any person knowingly or intentionally
(2) to use in the course of the manufacture or distribution of a controlled substance a registration number which is fictitious, revoked, suspended, or issued to another person;
The October 12, 1984 amendment, which was part of the Comprehensive Crime Control Act of 1984, closed a loophole in Section 843(a)(2) by precluding the use of "expired" registration numbers. Prior to the amendment, Section 843(a)(2) apparently was not violated by writing prescriptions with an expired registration number.
Carranza relies primarily on three theories in urging dismissal of the indictment. First, he asserts that Section 843(a)(2) does not apply to the conduct involved in the instant case. Specifically, he asserts that Section 843(a)(2) does not apply to a physician who has an application for a registration number pending with the DEA and who writes prescriptions only for legitimate medical purposes while that application is pending. Carranza next argues that the Controlled Substances Act generally, 21 U.S.C. §§ 801 et seq., Section 843(a)(2) in particular, and the October, 1984 amendment thereto are primarily concerned with preventing the diversion of narcotics from legitimate medical uses to illegitimate and unlawful uses. In view of this, Carranza asserts that diversion is an element of a violation of Section 843(a)(2). Thus, because it is seemingly undisputed that no unlawful or illegitimate diversion occurred in the instant case, Carranza urges dismissal of the indictment. Finally, Carranza argues that he did not possess the requisite intent for a violation of Section 843(a)(2). This is evidenced, he claims, by his application for a new registration number, his testimony at the DEA hearing, and because the DEA knew of his conduct in the instant case and did not object to it prior to filing an indictment against him. These arguments are addressed below.
"[I]n any case concerning the interpretation of a statute the `starting point' must be the language of the statute itself." Lewis v. United States, 445 U.S. 55, 60, 100 S. Ct. 915, 918, 63 L. Ed. 2d 198 (1980) (citations omitted). The language of the statute involved in the instant case is clear. Section 843(a)(2) clearly uses the term "expired". Section 843(a)(2) uses clear language and is unambiguous. A common sense reading of the statute indicates that it proscribes writing prescriptions with an expired registration number. An examination of the relevant legislative history neither alters this conclusion nor provides any support for Carranza's contention that this statute does not apply to the conduct in the instant case.
Carranza allowed his registration number to lapse and expire. When he applied to the DEA in March, 1983 he sought a new number and not an extension or reregistration of his old number. Thus, Section 843(a)(2), as amended in October, 1984, clearly applies to a physician such as Carranza who writes prescriptions with an expired number. There is no basis to read into the statute the exception which Carranza asserts it contains. Carranza's pending application for a new registration number does not insulate him for prosecution under Section 843(a)(2).
Carranza next asserts that because no diversion occurred in the instant case the indictment must be dismissed. Carranza is correct in asserting that one of the primary purposes of the Controlled Substances Act, Section 843(a)(2), and the October, 1984 amendment thereto is to stem the diversion of narcotics to unlawful and illegitimate uses. He is incorrect, however, in asserting that "diversion" is an element of a Section 843(a)(2) violation. To read this element into the statute would unduly restrict its application. The Court thus rejects this argument in the context of a motion to dismiss the indictment.
Carranza's final argument, dealing with his lack of requisite criminal intent, similarly must be rejected in the context of a motion to dismiss an indictment. The indictment adequately alleges a violation of *1033 Section 843(a)(2). Thus, Carranza's intent, argument and the relevant evidence, must be considered at trial.
In conclusion, there is no basis for this Court to dismiss the indictment. Carranza's arguments involving the absence of unlawful diversion and a lack of the requisite intent are appropriate, and perhaps will be successful, defenses at trial. This is particularly true where, as here, it is undisputed that there was no unlawful diversion, that Carranza had a pending application for a new registration number, and that the DEA was aware of this in January of 1985. In view of the foregoing, and in view of the effective date of the amendment outlawing the alleged instant misconduct and the dates of the alleged instant misconduct, Carranza's motion suggests that the instant prosecution perhaps exemplifies a questionable exercise of prosecutorial discretion by the government. Such a conclusion is further supported by the fact that the DEA has denied Carranza's application for a new registration number, and by the disturbing fact that the alleged misconduct occurred very shortly after it was first prohibited (on one occasion, only ten days after the statute was amended). This Court may not review the government's exercise of discretion, and however misguided it may be, it is certainly not a basis to dismiss the indictment. The indictment properly alleges all of the elements for a violation of the relevant statute. Accordingly, the defendant's motion to dismiss the indictment is denied.
SO ORDERED.
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175 N.J. Super. 589 (1980)
421 A.2d 597
EASTERN SEABOARD PILE DRIVING CORPORATION, A CORPORATION OF THE STATE OF DELAWARE AUTHORIZED TO DO BUSINESS IN NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
NEW JERSEY PROPERTY-LIABILITY INSURANCE GUARANTY ASSOCIATION, DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Argued September 22, 1980.
Decided October 9, 1980.
*590 Before Judges SEIDMAN, ANTELL and LANE.
Richard R. Spencer, Jr. argued the cause for appellant (Stryker, Tams & Dill, attorneys; Stephen D. Cuyler, on the brief).
Steven L. Strelitz argued the cause for respondent (Nolan, Lynes, Bell & Moore, attorneys; Jerome M. Lynes, of counsel).
The opinion of the court was delivered by ANTELL, J.A.D.
Plaintiff's steel dredging barge, the Beverly M, was damaged while being used in the Atlantic Ocean off Long Island, New York, and claims arising therefrom were asserted against a number of insurance carriers covering the risk. One of these, Interstate Insurance Co., was insolvent. Accordingly, Interstate's portion of plaintiff's claim was asserted by plaintiff *591 against defendant, an entity created under the New Jersey Property-Liability Insurance Guaranty Association Act, N.J.S.A. 17:30A-1 et seq., to guaranty payment of covered claims under policies of insurance where the insurer becomes insolvent. The question raised by this suit for declaratory judgment is whether plaintiff presents a "covered claim" within the meaning of the act. The dispute focuses particularly upon whether the following conditions of eligibility posited by N.J.S.A. 17:30A-5 d have been met:
(1) The claimant or insured is a resident of this State at the time of the insured event; or (2) the property from which the claim arises is permanently located in this State.
Defendant appeals from an order dated March 15, 1979 in the Law Division denying its motion for summary judgment and expressly determining that the barge was permanently located within the State of New Jersey for purposes of the act, consistent with its formal opinion published at 167 N.J. Super. 324. Plaintiff cross-appeals from a separate order dated January 23, 1979 denying its motion for summary judgment and granting defendant's motion for partial summary judgment upon the express determination that plaintiff is not a resident of the State of New Jersey for purposes of the act. The court's written opinion in connection therewith appears at 165 N.J. Super. 358. We deal first with plaintiff's cross-appeal.
In reaching its conclusion that plaintiff, a Delaware corporation duly registered to transact business in New Jersey, was not a "resident of this State" within the intent of the statute, the Law Division determined that the statutory language contemplated only domestic corporations of this State. It considered itself bound to this proposition by State v. Garford Trucking, Inc., 4 N.J. 346 (1950), and Red Star Express Lines v. DeStefano, 104 N.J. Super. 102 (App.Div. 1968). We disagree that either of these decisions require the result reached.
In Garford Trucking defendant, a New Jersey corporation, was charged with operating an unregistered motor vehicle in this State in violation of N.J.S.A. 39:3-4. The defendant maintained that because it was licensed to do business in a number of *592 other states along the eastern seaboard, actively transacted business there and had actually registered its vehicle in one of those states, it was a "nonresident," and therefore exempt under N.J.S.A. 39:3-15 from New Jersey's registration requirement. The decision holds only that a domestic corporation cannot become a "nonresident" of the state of its creation for the reason that it may not shed "the residence which is inseparable from domicile." Id. 4 N.J. at 351. Nowhere does it suggest that a corporation may not become a resident of a jurisdiction other than that of its origin. Its explanatory comments are clearly to the contrary:
Unlike a natural person, a corporate entity cannot change its domicile at will, although it may have a situs or residence elsewhere for the transaction of its business. [at 352-353]
Ordinarily, domicile includes residence; but one may have several residences or places of abode or business. [at 353]
... a domestic corporation, whose domicile and residence in this State are inseparable incidents of the charter which gives it being, does not become a "nonresident" by transacting business in another sovereignty, even though it may also have a residence there for certain purposes. [at 353]
Citing the foregoing opinion as authority, its author again stated in In re Roche, 16 N.J. 579 (1954), that although a domestic corporation does not become a nonresident of its domiciliary state by transacting business in another sovereignty, "It may have a residence there for the purposes ordained by the foreign jurisdiction." Id. at 586.
Whether a corporation has established a residence in a foreign jurisdiction depends upon the aim and context of the statute in which the residency requirement is contained and the extent and character of its business there transacted. 17 Fletcher, Encyclopedia of Private Corporations, § 8300 at 10 (1977); 36 Am.Jur.2d, Foreign Corporations, § 37 at 52. It is in this light that Red Star Express Lines v. DeStefano, supra, must be examined.
In Red Star plaintiff was a New York corporation authorized to transact business in New Jersey. It sought payment from the Unsatisfied Claim and Judgment Fund for damage to one of its trucks caused in the State of New Jersey. The question *593 presented was whether plaintiff was "a resident of this State" for payment eligibility purposes under N.J.S.A. 39:6-62. Vital to the court's conclusion that plaintiff was not a resident was the fact that the truck was registered in New York, not in New Jersey, and therefore was not the subject of contributions to the Fund from which plaintiff was seeking payment. The judgment there reached was in clear response to a statutory policy which, in the court's view, contemplated that benefits would be payable from the Fund only to those who in some way had contributed to its maintenance. "The very fact that the foreign corporation, by not registering such vehicles here, has thereby alleviated its burden of contributing to the Fund ..." was cited to support the view that the Legislature did not intend to allow benefits "to foreign corporations whose vehicles are registered elsewhere." Id. 104 N.J. Super. at 108. It additionally noted that there was no contribution to the Fund "out of insurance premiums paid on New York-registered vehicles." It also observed that plaintiff itself evidently did not consider that it was a New Jersey resident since its failure to register the truck in New Jersey infringed N.J.S.A. 39:3-4 which required this of "every resident of this State ..." and questioned, finally, whether all its vehicles should not "have been registered in this State in order to receive the benefit of the Fund statute?"
Nothing in the act before us conditions eligibility for benefits, as Red Star held of the Unsatisfied Claim and Judgment Fund Act, upon contributions, direct or indirect, to the fund maintained by defendant for the payment of covered claims. It requires only that the insolvent insurer be licensed to transact insurance business in this State when the policy was issued or when the insured event occurred. N.J.S.A. 17:30A-5 e. It does not require that the policy be written in New Jersey. Presumably, Interstate Insurance Co. was licensed here, although the policy in question was issued in New York. While it is true that defendant's member insurers may be permitted to recoup their assessed contributions to defendant by surcharges on policy premiums paid in this State, N.J.S.A. 17:30A-16, plaintiff would not necessarily be exposed to such a surcharge *594 even if it were a domestic corporation. As happened here, it could still get its insurance policies elsewhere, depending, of course, upon the nature and location of the property to be insured. This is in contradistinction to the Unsatisfied Claim and Judgment Fund which is in part supported by assessed contributions from insurers out of premiums paid on policies which cover vehicles registered here and can only be issued in this State to satisfy the requirements of the Motor Vehicle Security Responsibility Law, N.J.S.A. 39:6-25(c), 46, 62, 63.
Defendant offers as "a general rule of statutory construction" that statutes which grant privileges, powers, rights or immunities to "residents" will be limited to domestic corporations, absent qualifying words which plainly indicate the contrary. This is probably inadvertent. The rule is correctly stated at 17 Fletcher, Encyclopedia of Private Corporations, § 8301 at 30 (1977), in the following words:
As a general rule, statutes granting powers, privileges or immunities to "corporations," without any qualifying words will be construed as applicable only to domestic corporations in the absence of plain indications to the contrary, or unless the legislative intent of the statute shall extend to foreign corporations is clearly expressed in the terms of the statute.
Here, the Legislature pointedly refrained from the use of any term which would limit benefits under the act to domestic corporations. It used the broader term "resident," which clearly does not require the exclusion of all but domestic corporations. Had it wished, the Legislature could readily have done this by limiting the class to "domestic corporations" or "corporations."
Although plaintiff was incorporated under the laws of the State of Delaware, it has been licensed to transact business in New Jersey since July 20, 1972. It maintains an executive office in Richfield, New Jersey, and operates its principal place of business at the Todd Shipyards in Hoboken. Furthermore, it has allocated 100% of its corporate assets to the State of New Jersey for tax purposes, conducts substantially all of its business in New Jersey and has never maintained a place of business in Delaware. On these facts we conclude that it is a resident within the meaning of the act and entitled to the benefits thereof.
*595 In view of our disposition hereof we find it unnecessary to reach the issues raised by defendant's appeal from the order of March 15, 1979, which determined that the Beverly M was permanently located in New Jersey for purposes of the act. By so doing we imply no expression as to the merits of that controversy or the views contained in the opinion of the Law Division.
Order of January 23, 1979 reversed and order for judgment in favor of plaintiff entered, declaring that plaintiff is a resident of this State within the meaning of N.J.S.A. 17:30A-5 d, and that its claim for damages is a covered one as defined in that section of the statute.
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632 F.Supp. 1225 (1986)
NORFOLK SOUTHERN CORPORATION, Norfolk Southern Marine Services, Inc., Lamberts Point Barge Co., Inc., Coastal Barge Corporation, Coal Logistics Corporation, and Coastal Carriers Corporation, Plaintiffs,
v.
Charles M. OBERLY, III, Attorney General of the State of Delaware, and John E. Wilson, III, Secretary, Department of Natural Resources and Environmental Control of the State of Delaware, Defendants,
Delaware Saltwater Sportfishing Association, Inc., Kent County Levy Court, Natural Resources Defense Council, Inc., National Audubon Society, and the Sierra Club, Intervening Defendants.
Civ. A. No. 84-330 MMS.
United States District Court, D. Delaware.
April 8, 1986.
*1226 *1227 David S. Swayze, of Duane, Morris & Hecksher, Wilmington, Del., for plaintiffs *1228 Norfolk Southern Corp., Norfolk Southern Marine Services, Inc. and Lamberts Point Barge Co., Inc.; Jeffrey S. Berlin, and David E. Menotti, of Verner, Liipfert, Bernhard, McPherson and Hand, Chartered, Washington, D.C., of counsel.
Robert J. Katzenstein, and Clark W. Furlow, of Lassen, Smith, Katzenstein & Furlow, Wilmington, Del., for plaintiffs Coastal Barge Corp., Coal Logistics Corp., and Coastal Carriers Corp.
Fred S. Silverman, State Solicitor, and Regina M. Mullen, John J. Polk, and Ellen R. Chaikin, Deputy Attys. Gen., Dept. of Justice, Wilmington, Del., for defendants.
Nicholas H. Rodriguez, of Schmittinger and Rodriguez, Dover, Del., for intervening defendants; Lynne Edgerton, Sarah Chasis, and Ralph Hallo, of Natural Resources Defense Council, Inc., Joel B. Harris, Mindy J. Spector, Scott T. Maker, and Robert D. Helfand, of Weil, Gotshal & Manges, New York City, of counsel.
Anthony G. Flynn, Counsel to the Governor, Dover, Del., for amici curiae Michael N. Castle, Governor of Delaware, William V. Roth, Jr., Joseph R. Biden Jr., U.S. Senators, and Thomas R. Carper, Member of Congress; Morris, Nichols, Arsht & Tunnell, Georgetown, Del., of counsel.
Philip D. Saxon, of Duane, Morris & Hecksher, Wilmington, Del., for amici curiae Frederick C. Boucher, Member of Congress, John W. Warner, Paul S. Trible, Jr., U.S. Senators, Herbert H. Bateman, Alan B. Mollohan, Jim Olin, Nick Joe Rahall, II, Norman Sisisky, Harley O. Staggers, Jr., and G. William Whitehurst, Members of Congress.
Edward W. Cooch, Jr., of Cooch & Taylor, and Gregory A. Inskip, of Potter Anderson & Corroon, Wilmington, Del., for amici curiae Delaware Wild Lands, Inc. and Delaware Nature Educ. Society, Inc.
David G. Burwell, Washington, D.C., for amici curiae Nat. Wildlife Federation and Delaware Wildlife Federation.
William C. Carpenter, Jr., U.S. Atty., Dept. of Justice, Wilmington, Del., F. Henry Habicht, II, Asst. Atty. Gen., Jose R. Allen, David F. Shuey, and Margaret A. Hill, Dept. of Justice, Washington, D.C., for amicus curiae the U.S.
John K. Van de Kamp, Atty. Gen. of the State of Cal., Andrea Sheridan Ordin, Chief Asst. Atty. Gen., N. Gregory Taylor, Asst. Atty. Gen., and Linus Masouredis, Deputy Atty. Gen., San Francisco, Cal., for amicus curiae the California Coastal Com'n.
OPINION
MURRAY M. SCHWARTZ, Chief Judge.
Plaintiffs seek declaratory and injunctive relief preventing the defendant state officials from administering and enforcing against them the Delaware Coastal Zone Act ("the Delaware CZA"), 7 Del.C.Ann. § 7001 et seq., which prohibits plaintiffs' proposed activities in the Delaware coastal zone. Pending are cross-motions for summary judgment.[1]
I. Factual Overview
Plaintiffs[2] seek to improve the competitiveness of their coal-exporting operations by establishing a coal "top-off" service at Big Stone Anchorage, which lies off the coast of Delaware in Delaware Bay.
*1229 At present, plaintiffs ship coal from the East Coast on colliers or partially loaded supercolliers, because East Coast port facilities are too shallow to accommodate fully loaded supercolliers. Fully loaded supercolliers, which have a carrying capacity ranging from 100,000 to more than 160,000 deadweight tons, represent a more cost-effective means of transporting coal.
Plaintiffs propose to load supercolliers partially at East Coast ports and thereafter the supercolliers would move to Big Stone Anchorage, where coal barges would "top-off" the partially loaded supercolliers before their departure to foreign countries. This top-off operation will reduce shipping costs, thereby assertedly making plaintiffs' coal more competitive in the world market.
Plaintiffs seek to use Big Stone Anchorage[3] because it is the only naturally protected anchorage between Maine and Mexico with a depth of 55 feet or more.[4] Because of its relative protection from the elements, Big Stone Anchorage is and has been used for oil-lightering operations that transfer imported oil from supertankers to smaller vessels capable of navigating in shallower East Coast waters.[5]
Plaintiffs began exploring the idea of a coal top-off operation in 1981,[6] and first contacted Delaware state officials about the matter in late 1982. In February, 1984, after several favorable discussions with state officials, plaintiffs were advised to submit to the Delaware Department of Natural Resources and Environmental Control (DNREC) an application for a status decision under the Delaware CZA.
The purpose of the Coastal Zone Act, 7 Del.C.Ann. § 7001 et seq. (1974 & 1984 Supp.), is to "control the location, extent and type of industrial development in Delaware's coastal areas"[7] in order to "better protect the natural environment of its bay and coastal areas and safeguard their use primarily for recreation and tourism." Id. § 7001. New heavy industry in the coastal area is entirely prohibited as incompatible with protection of the natural environment. Id. § 7003. New manufacturing uses and expansion of existing manufacturing uses in the coastal zone are allowed by permit only. Id. § 7004. Of central concern to this litigation is the statute's total ban on new offshore gas, liquid, or solid bulk product transfer facilities, id. § 7003,[8] a ban the *1230 legislature found "imperative" on the grounds that these facilities "represent a significant danger of pollution to the coastal zone and generate pressure for the construction of industrial plants in the coastal zone." Id. § 7001.
On February 23, 1984, the Secretary of DNREC issued a status decision concluding that the Delaware CZA did not prohibit plaintiffs' proposal, because a coal top-off service was not a "bulk product transfer facility" as defined by § 7002(f).[9] This decision was appealed to the State Coastal Zone Industrial Control Board ("the Board"),[10] which reversed the Secretary. The Board held the coal top-off project was a bulk product transfer facility within the meaning of the statute and therefore coal topping-off was a prohibited activity. The Superior Court upheld the Board's decision, and the Delaware Supreme Court affirmed. Coastal Barge Corp. v. Coastal Zone Indus. Control Bd., 492 A.2d 1242 (Del.1985). Plaintiffs, relying upon the Commerce Clause, challenge the application of the Delaware CZA's prohibition of bulk product transfer facilities to their proposed top-off operation.
II. Legal Overview
The Commerce Clause is both an affirmative grant of power to Congress and a limitation on the power of the states. By its terms, the Commerce Clause grants Congress the power "[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." U.S. Const. art. I, § 8, cl. 3. In the absence of congressional exercise of that power, the Commerce Clause by its own force prevents the States from erecting barriers to the free flow of interstate commerce. Raymond Motor Transportation, Inc. v. Rice, 434 U.S. 429, 440, 98 S.Ct. 787, 793, 54 L.Ed.2d 664 (1978); Cooley v. Board of Wardens, 53 U.S. (12 How.) 299, 13 L.Ed. 996 (1851).[11] At the same time, however, "not every exercise of local power is invalid merely because it affects in some way the flow of commerce between the States." Great Atlantic & Pacific Tea Co. v. Cottrell, 424 U.S. 366, 371, 96 S.Ct. 923, 928, 47 L.Ed.2d 55 (1976).
In accord with the doctrine that Congress' power over commerce is plenary, see, e.g., Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 196-97, 6 L.Ed. 23 (1824), the Supreme Court has held that "Congress has undoubted power to redefine the distribution of power over interstate commerce. It may either permit the states to regulate the commerce in a manner which would otherwise not be permissible, or ... exclude state regulation even in matters of peculiarly local concern which nevertheless affect interstate commerce." Southern Pacific Co. v. Arizona, 325 U.S. 761, 769, 65 S.Ct. 1515, 1520, 89 L.Ed. 1915 (1945) (citations omitted).
Absent congressional guidance, the courts are called upon to make the "delicate adjustment of the conflicting state and federal claims" when a state regulation is challenged under the Commerce Clause. Raymond Motor, 434 U.S. at 440, 98 S.Ct. at 793 (quoting H.P. Hood & Sons, Inc. v. DuMond, 336 U.S. 525, 553, 69 S.Ct. 657, 679, 93 L.Ed. 865 (1949) (Black, J., dissenting)); see also Southern Pacific, 325 U.S. at 766-71, 65 S.Ct. at 1518-21. Three general approaches have been used to determine whether a state statute violates the Commerce Clause: a deferential balancing approach for "evenhanded" regulation; stricter scrutiny for "discriminatory" regulation; and a more highly deferential *1231 standard for certain safety regulations.[12]
In brief, plaintiffs urge the Delaware ban on the proposed coal-transfer operation is subject to strict scrutiny because it discriminates against out-of-state interests in favor of in-state interests and burdens foreign commerce. They contend that the prohibition fails to withstand that scrutiny and thus violates the Commerce Clause. Alternatively, plaintiffs argue that even under the more deferential balancing approach for evenhanded regulation, the ban impermissibly burdens commerce.
Defendants deny the Delaware prohibition is subject to strict scrutiny. They contend the prohibition is entitled to the most highly deferential standard of review, and that it satisfies that standard. Alternatively, defendants claim it can be upheld as well under the standard balancing test for evenhanded regulation. In addition, defendants argue that Congress has given its consent to the Delaware legislation by its passage of the Coastal Zone Management Act of 1972 ("the CZMA" or "the Act") and by the subsequent approval of the Delaware coastal management plan, which includes the CZA, by the Secretary of Commerce. Thus, defendants urge the Delaware prohibition is immune from Commerce Clause attack.
I hold the cross-motions for summary judgment must be denied absent congressional consent. However, because I conclude Congress authorized the Delaware CZA, including its ban of the coal top-off operation, summary judgment will be entered for defendants.
III. Legal Standards
A. Summary Judgment Standard
The Federal Rules of Civil Procedure provide summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When a motion is made and supported, "an adverse party may not rest upon the mere allegations or denials of his pleading, but his response ... must set forth specific facts showing that there is a genuine issue for trial." Id. at 56(e); see also Fireman's Insurance Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir.1982) (cannot "rely merely upon bare assertions, conclusory allegations or suspicions") (citing cases).
Summary judgment often has been characterized in this circuit as a "drastic remedy." See Sunshine Books, Ltd. v. Temple University, 697 F.2d 90, 95 (3d Cir.1982) (citing cases). The moving party has the burden of showing the absence of a genuine issue as to any material fact, and materials it submits must be viewed in the light most favorable to the opposing party. Adickes v. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). If the moving party fails to establish the absence of a genuine issue, summary judgment must be denied even if the opposing party presents no evidence. Id. 398 U.S. at 160, 90 S.Ct. at 1609. The moving party cannot obtain summary judgment if there is any evidence in the record from which a reasonable inference with respect to the *1232 ultimate facts may be drawn in favor of the responding party. In Re Japanese Electronic Products Antitrust Litigation, 723 F.2d 238, 258 (3d Cir.1983), rev'd, ___ U.S. ___, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Finally, "where constitutional issues of large public import are involved, the Court's scrutiny of the record, to ensure that there are no disputed issues of material fact, must be particularly exacting." Pettinaro Construction Co. v. Delaware Authority for Regional Transit, 500 F.Supp. 559, 563 (D.Del.1980).
B. The Commerce Clause Standards
Whether there exists a "genuine issue as to any material fact" depends upon what facts are "material." The materiality of a fact, in turn, depends upon the applicable legal standard. The Court's chore is to choose the correct substantive legal standard.
The test that forms the touchstone in Commerce Clause analysis was distilled by the Supreme Court in Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174 (1970):
[W]here the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. Huron Cement Co. v. Detroit, 362 U.S. 440, 443 [80 S.Ct. 813, 815, 4 L.Ed.2d 852]. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.[13]
The flexible Pike balancing test does not apply, however, to state regulation that effectuates economic protectionism. Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 104 S.Ct. 3049, 3055, 82 L.Ed.2d 200 (1984); City of Philadelphia v. New Jersey, 437 U.S. 617, 624, 98 S.Ct. 2531, 2535, 57 L.Ed.2d 475 (1978). In such cases, stricter scrutiny or a "virtual per se" rule of unconstitutionality is applied. South-Central Timber Development, Inc. v. Wunnicke, 467 U.S. 82, 104 S.Ct. 2237, 2247, 81 L.Ed.2d 71 (1984); City of Philadelphia, 437 U.S. at 624, 98 S.Ct. at 2535.
A finding that state legislation constitutes "economic protectionism" can be made on the basis of either discriminatory purpose or discriminatory effect. Bacchus Imports, 104 S.Ct. at 3055; Minnesota v. Clover Leaf, 449 U.S. 456, 471 n. 15, 101 S.Ct. 715, 727 n. 15, 66 L.Ed.2d 659 (1981). A statute that "overtly blocks the flow of interstate commerce at a State's borders" falls most easily into this strictly scrutinized category. City of Philadelphia, 437 U.S. at 624, 98 S.Ct. at 2535.
The burden of showing discrimination rests on the party challenging the validity *1233 of the statute. Hughes v. Oklahoma, 441 U.S. 322, 336, 99 S.Ct. 1727, 1736, 60 L.Ed.2d 250 (1979). Once discrimination is demonstrated, however, "the burden falls on the State to justify it both in terms of the local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives adequate to preserve the local interests at stake." Id. (quoting Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 353, 97 S.Ct. 2434, 2446, 53 L.Ed.2d 383 (1977)). "At a minimum ... facial discrimination involves the strictest scrutiny of any purported legitimate local purpose and the absence of nondiscriminatory alternatives." Hughes, 441 U.S. at 337, 99 S.Ct. at 1737. Stated differently, the State must demonstrate a "close fit" between the burden on interstate commerce and the asserted local purpose. Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941, 957, 102 S.Ct. 3456, 3464, 73 L.Ed.2d 1254 (1982).[14]
Restrictions burdening foreign commerce may also be subject to heightened scrutiny. See South-Central Timber, 104 S.Ct. at 2247. But see text at infra pp. 1238-39.
Cases involving state highway safety regulation form a third general category. See, e.g., Kassel, 450 U.S. at 670, 101 S.Ct. at 1316. This type of regulation enjoys a presumption of validity stronger than that provided in the Pike test. See id. The extent of this presumption, however, is not clear. In the most recent Supreme Court case in the highway safety category, three separate approaches were used, none of which won the votes of a majority of the justices. See id.; see also American Trucking, 683 F.2d at 790-95 (choosing approach of Justice Rehnquist in Kassel dissent) and at 802-04 (Adams, J., dissenting) (choosing approach of Kassel plurality).
The plurality in Kassel, in effect, adopted a stronger presumption of validity within the standard Pike balancing test. See 450 U.S. at 670-71, 101 S.Ct. at 1316-17 (Powell, J.); see also Raymond Motor, 434 U.S. at 442-44, 98 S.Ct. at 794-96. The two other approaches reject a balancing inquiry. Justice Brennan would defer to the state legislature if the intended benefit "is not illusory, insubstantial, or nonexistent." Kassel, 450 U.S. at 681 n. 1, 101 S.Ct. at 1313 n. 1 (Brennan, J., concurring). Actual benefits and burdens are not to be examined: "the only relevant evidence is whether the lawmakers could rationally have believed that the challenged regulation would foster those purposes." Id. at 680, 101 S.Ct. at 1321. Justice Rehnquist's approach, most deferential to the states, inquires only whether the asserted state justification is merely a pretext for discrimination against interstate commerce. Id. at 692, 101 S.Ct. at 1327 (Rehnquist, J., dissenting). A pretext may be assumed, however, when the benefits are "demonstrably trivial while the burden on commerce is great." Id.
IV. Commerce Clause Analysis Absent Congressional Consent
The Pike balancing test properly applies to plaintiffs' Commerce Clause challenge. However, that test cannot be applied on summary judgment in this case. Because this conclusion is predicated upon the rejection of arguments advanced by both parties, the Court will discuss each of those arguments.[15]
*1234 A. Plaintiffs' Arguments for Strict Scrutiny
Plaintiffs contend a virtual per se rule of invalidity or strict scrutiny applies to the Delaware CZA because the statute interferes with foreign commerce and effects economic protectionism.
1. Economic Protectionism
The threshold inquiry posed by plaintiffs' Commerce Clause challenge is "whether the primary purpose or effect of the [Delaware CZA] ... is to favor in-state economic interests or to burden out-of-state economic interests." Harvey & Harvey, Inc. v. Delaware Solid Waste Authority, 600 F.Supp. 1369, 1379 (D.Del.1985). Even if the regulation deals with matters traditionally of local concern, strict scrutiny is applied if the measure is protectionist in nature. See id.; City of Philadelphia, 437 U.S. 617, 98 S.Ct. 2531. "The critical inquiry ... must be directed to determining whether [the statute] is basically a protectionist measure, or whether it can fairly be viewed as a law directed to legitimate local concerns, with effects upon interstate commerce that are only incidental." City of Philadelphia, 437 U.S. at 624, 98 S.Ct. at 2535.[16]
Plaintiffs contend strict scrutiny is mandated by the alleged disproportionality of the Delaware CZA. Specifically, they allege "[t]he CZA's invalid protectionism consists of its tipping the competitive balance in favor of activities that benefit local interests and against activities that benefit only out-of-state users." Dkt. 120 at 51. Stated differently, plaintiffs urge economic protectionism motivated the enactment of the Delaware CZA and its uneven respective burdens upon the litigants causes the Delaware CZA to have a discriminatory effect giving rise to application of a strict scrutiny standard.
*1235 a. Discriminatory Effect
Assuming arguendo the validity of plaintiffs' factual allegations of discriminatory effect, I am not willing to employ a strict scrutiny standard by reason of discriminatory effect in the context of determining the constitutionality of the Delaware CZA.[17]
The Delaware CZA differs significantly from the facially evenhanded statutes subjected to strict scrutiny by the Supreme Court for their discriminatory effect. In those cases, the statute protected an instate market from out-of-state competition in that same market. See Hunt, 432 U.S. 333, 97 S.Ct. 2434 (apples); Dean Milk Co. v. City of Madison, 340 U.S. 349, 71 S.Ct. 295, 95 L.Ed. 329 (1951) (milk); see also City of Philadelphia, 437 U.S. 617, 98 S.Ct. 2531 (facially discriminatory regulation of landfill-space market). No similar competitive advantage is being provided by the Delaware CZA. Economic protectionism, the most serious concern in Commerce Clause analysis, Arkansas Electric, 461 U.S. at 394, 103 S.Ct. at 1917, is not implicated in the same sense. At issue in this case is a statutory distinction regarding uses, not users.
The Supreme Court decision in Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 98 S.Ct. 2207, 57 L.Ed.2d 91 (1978), is instructive. In Exxon, the Court considered a Commerce Clause challenge to a Maryland statute that, inter alia, prohibited producers or refiners of petroleum products from operating retail service stations within the State. The statute was enacted in response to a finding that stations operated by producers or refiners had received preferential treatment during the 1973 gasoline shortage. No petroleum products were produced or refined in Maryland. Given this market structure, the Court first held that the Maryland statute plainly did not discriminate against interstate goods nor favor local producers and refiners. Id. 437 U.S. at 125, 98 S.Ct. at 2213. With regard to the claim that the effect of the statute was to protect in-state dealers from out-of-state competition, the Court held the fact that the divestiture requirement fell solely on interstate companies (though not all interstate companies) which operated gasoline stations in Maryland did not lead, "either logically or as a practical matter, to a conclusion that the State is discriminating against interstate commerce at the retail level." Id.;[18]cf. Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 42, 100 S.Ct. 2009, 64 L.Ed.2d 702 (1980) (regulation not evenhanded, distinguishing Exxon). But see Exxon, 437 U.S. at 134-52, 98 S.Ct. at 2218-27 (Blackmun, J., dissenting).
Similarly, in Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 473, 101 S.Ct. 715, 728, 66 L.Ed.2d 659 (1981), the Court upheld under the Pike test a ban on the retail sale of milk in nonreturnable plastic containers "[e]ven granting that the out-of-state plastics industry is burdened relatively more heavily than the Minnesota pulpwood industry...." Citing Exxon, the Court reaffirmed the Commerce Clause *1236 protects the interstate market, not particular interstate firms, and made it clear that a regulation is not discriminatory simply because it causes some business to shift from out-of-state to in-state firms. Id. 449 U.S. at 474, 101 S.Ct. at 729. See also City of Philadelphia, 437 U.S. at 624, 98 S.Ct. at 2535 (Pike test applies where "other legislative objectives are credibly advanced and there is no patent discrimination against interstate trade"), 627, 98 S.Ct. at 2537 (permissible to slow flow "of all waste into the State's remaining landfills, even though interstate commerce may incidentally be affected"); Commonwealth Edison Co. v. Montana, 453 U.S. 609, 617-19, 101 S.Ct. 2946, 2953-54, 69 L.Ed.2d 884 (1981) (Montana severance tax on coal, 90% of which is shipped out of state); Brotherhood of Locomotive Firemen & Enginemen v. Chicago, Rock Island & Pacific R.R., 393 U.S. 129, 140-42, 89 S.Ct. 323, 328-30, 21 L.Ed.2d 289 (1968) (full-crew requirement for railroads, with mileage-based exemptions that had the effect of exempting all intrastate railroads but few interstate railroads); Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440, 80 S.Ct. 813, 4 L.Ed.2d 852 (1960) (city smoke abatement ordinance applied to ships engaged in interstate commerce).[19]
In the present case, the fact that the ban on bulk product transfer facilities may fall exclusively on out-of-state interests does not require a conclusion that the State is discriminating for purposes of Commerce Clause analysis. Like the Maryland legislature in Exxon, the Delaware legislature may respond to a perceived problem that happens to arise almost exclusively outside the State. The Commerce Clause has never been construed to force a State to stand by helplessly in such situations. In this sense, at least, not all "protectionist" regulation is discriminatory in violation of the Commerce Clause. See also Kassel, 450 U.S. at 705-06, 101 S.Ct. at 1334 (Rehnquist, J., dissenting) (safety and protectionist motives often inherently intertwined).[20]
For the foregoing reasons, the Court holds that strict scrutiny is not warranted on the basis of the alleged discriminatory effect alone. For purposes of deciding which test applies, the prohibition "regulates evenhandedly" in effect and its effects on interstate commerce are "only incidental."[21]
*1237 Even if strict scrutiny were applicable, it should not be applied on summary judgment because material issues of fact exist as to the extent of any disproportionality. Plaintiffs and supporting amici contend that a coal top-off service at Big Stone Anchorage will promote national export policies and directly benefit out-of-state mining, railroad, and labor interests. Delaware interests and residents, on the other hand, will not benefit significantly from the offshore operations. Plaintiffs also point to uses permitted by the Delaware CZA, such as pleasure boating and fishing, and exceptions for the Port of Wilmington, § 7002(f), and sewage treatment and recycling plants, § 7003, in arguing the statute favors Delaware interests. See Dkt. 120 at 49-58 (effect and intent).
Other facts, however, support defendants. Two of the six plaintiffs are Delaware corporations. More importantly, the prohibition on bulk product transfer facilities in the coastal zone, which extends over both water and land areas, by definition burdens Delaware interests. No individual or business can construct a bulk product transfer facility on its property if within the coastal zone.
The legislative history of the federal Coastal Zone Management Act indicates that the Delaware CZA was debated for six weeks in the legislature and vigorously fought by, among others, the Delaware Chamber of Commerce, the state Building and Construction Trades Council, and thirteen oil companies. Lindsay, Showdown on Delaware Bay (interview with Gov. Russell W. Peterson originally published in Saturday Review), reprinted in Legislative History of the Coastal Zone Management Act of 1972, as amended in 1974 and 1976 with a Section-by-Section Index, 94th Cong., 2d Sess. 256-61 at 257 (1976) (hereinafter cited as Legislative History). Developers and landowners also opposed the bill. Id. at 259. One of the oil companies had purchased a 5,800-acre site on the bay on which it planned to build a refinery and petrochemical plant; a consortium of thirteen oil companies had proposed an oil transfer pipeline into the bay and a storage tank farm on shore; another company proposed a coal-transfer operation involving a 300-acre terminal and the use of self-unloading barges and deep-draft carriers (the project would later be expanded to include iron ore and cover a 500-acre terminal). Id. at 257. Jobs and tax revenues were among the reasons invoked in opposition to the Delaware CZA. Id. at 258.
Plaintiff Coastal Barge Corp.'s own application to DNREC for a status decision stated that "[t]his project will benefit many Americans, including Delaware residents." Application at # 11, Second Affidavit of David S. Hugg, III (Dkt. 123). Delaware Governor Pierre S. du Pont supported the expansion of the Coast Guard lightening permit to include the transhipment of coal, stating that it "potends positive implications for the Delaware Bay region" and "presents an opportunity that can benefit the general economy of the region." Letter to Capt. David B. Charter, U.S.C.G. Captain of the Port, from Gov. du Pont (Mar. 7, 1983), Dkt. 132A at Ex. U. See also Letter to Capt. Daniel B. Charter, U.S.C.G. Captain of the Port, from New Jersey Gov. Thomas H. Kean (Mar. 7, 1983), Dkt. 145A at Ex. JJ. Plaintiffs in fact concede the prohibition of their coal top-off service will impose some burden on Delaware interests. See e.g., Dkt. 120 at 52 n. 18. From the record as discussed, there is at least a genuine issue of material fact as to whether the Delaware CZA discriminates against out-of-state interests. Even if strict scrutiny should be applied to the scenario described by plaintiffs, summary judgment cannot be granted.
b. Discriminatory Purpose
While the alleged disproportionate effects do not warrant subjecting the Delaware CZA to strict scrutiny, the inquiry into economic protectionism is not yet ended. The Supreme Court has held that economic protectionism may be found on the basis of either discriminatory effect or discriminatory *1238 purpose.[22]See Bacchus Imports, 104 S.Ct. at 3055 (and cases cited).
Much of what has been said with respect to discriminatory effect also applies to discriminatory purpose. To the extent the in-state and out-of-state industries differ, discriminatory purpose cannot be established merely by showing that the Delaware CZA happens to burden out-of-state industries disproportionately. Plaintiffs must show the Delaware legislature specifically intended to protect Delaware interests at the expense of out-of-state interests. See, e.g., Hunt, 432 U.S. at 352, 97 S.Ct. at 2446 ("glaring" evidence of discriminatory intent); Kassel, 450 U.S. at 685, 101 S.Ct. at 1323 (Brennan, J., concurring) (impermissible protectionist purpose of Iowa truck-length regulation).
The starting point in an inquiry as to legislative purpose must be the statute itself. The Delaware CZA includes a statement of purpose that does not distinguish between in-state and out-of-state interests.[23] However, since few statutes will "artlessly disclose[] an avowed purpose to discriminate," Dean Milk, 340 U.S. at 354, 71 S.Ct. at 298, the courts may look behind a legislature's statement of purpose to determine whether there was a protectionist motive.
Plaintiffs cite statutory exemptions and statements from the statute's legislative history in an attempt to show that economic protectionism motivated the ban on transfer facilities. See, e.g., Dkt. 120 at 50-58. However, substantial evidence to the contrary also exists. See, e.g., supra pp. 1237-1238. While on the present record one must harbor doubt that plaintiffs could establish discriminatory intent, a question of fact remains. It follows discriminatory intent cannot be determined on summary judgment.
Strict scrutiny, therefore, may ultimately be applied to the Delaware CZA if at trial the finder of fact concludes the statute was intended to effectuate economic protectionism. Discriminatory effect, while not itself a basis in this case for a finding of economic protectionism, may be cited by plaintiffs as evidence of discriminatory purpose.
2. Foreign Burden
Citing two recent Supreme Court cases as authority, plaintiffs argue strict scrutiny is demanded because the Delaware CZA burdens foreign commerce. I disagree.
In Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 99 S.Ct. 1813, 60 *1239 L.Ed.2d 336 (1979), the Court held violative of the Commerce Clause the application of a nondiscriminatory ad valorem state property tax to shipping containers owned by Japanese shipping companies and used in foreign commerce. Two basic considerations underlay the decision. First, there was an enhanced risk of multiple taxation since full apportionment could not be ensured given that one of the taxing entities was a foreign sovereign. Id. 441 U.S. at 451, 99 S.Ct. at 1823. Second, the state tax prevented the Nation from "speaking with one voice" in regulating foreign trade, as it was contrary to an international convention, created asymmetrical international maritime taxation, and could subject foreign owners to various degrees of multiple taxation if other states enacted such provisions. Id. at 452-53, 99 S.Ct. at 1823-24. These concerns do not arise in the present case. See also Maltz, supra note 12 at 49 n. 8 (noting separate methodology for tax cases).
In South-Central Timber Development, Inc. v. Wunnicke, 467 U.S. 82, 104 S.Ct. 2237, 81 L.Ed.2d 71 (1984), the Court held Congress did not authorize Alaska's requirement that timber taken from state lands be processed within the State prior to export. A plurality of the Court went on to hold that the requirement, because of its protectionist nature and consequent burden on commerce, fell subject to the rule of virtual per se invalidity of laws that "bloc[k] the flow of interstate commerce at a State's borders." 104 S.Ct. at 2247 (quoting City of Philadelphia, 437 U.S. at 624, 98 S.Ct. at 2535). Their conclusion was "buttressed" by the fact that foreign commerce was burdened by the restriction. Id.
While closer to the present case than is Japan Lines, South-Central Timber does not control. The plurality applied the "virtual per se rule of invalidity" to the protectionist Alaska statute without regard to burden on foreign commerce. That concern was consistent with the conclusion of invalidity and supported it, but did not provide its foundation.
While it may be "a well-accepted rule that state restrictions burdening foreign commerce are subjected to a more rigorous and searching scrutiny," South-Central Timber, 104 S.Ct. at 2247, it does not mean a burden on foreign commerce which could be asserted with regard to many state regulations automatically triggers the strict scrutiny approach used in City of Philadelphia and similar cases. The quoted language from the South-Central Timber plurality, at best, suggests that in applying the standard Pike balancing test there would be a weakened presumption in favor of upholding the statute.[24] Moreover, in light of the substantial burden on foreign commerce posed by the Alaska regulation, id. at 2239 nn. 4 & 5, 2247, if the Court had intended strict scrutiny automatically to apply it likely would have said so.
B. Defendants' Arguments for Greater Deference
Defendants argue not only that the Court should not enter summary judgment for plaintiffs, but that it should enter summary judgment in defendants' favor. They contend a highly deferential approach is warranted and that the Delaware CZA satisfies that standard.
1. Safety Regulation Standard
Defendants first contend a highly deferential standard of review, like that often applied to highway safety regulation, should be employed. I cannot agree for the fundamental reason that the statute on its face is directed to the environment, not highway safety.
The Supreme Court has applied the Pike balancing test to state regulation that, like the Delaware CZA, is designed to protect the environment. See Clover Leaf, 449 *1240 U.S. 456, 101 S.Ct. 715. See also Harvey & Harvey, 600 F.Supp. at 1380-81.
The decision of the Third Circuit Court of Appeals in American Trucking, 683 F.2d 787, does not compel the use of a more highly deferential standard in this case.[25] Highway safety regulations, such as the one upheld in American Trucking, traditionally have enjoyed a greater degree of deference than other fields of state regulation. See id. at 795 n. 6.[26] While defendants contend "no principled reason" exists for not extending the American Trucking approach to this case (Dkt. 122 at 66), the Court is unwilling to do so absent authority from the Third Circuit Court of Appeals. The Court will apply the standard Pike test in light of its recent use by the Supreme Court in Clover Leaf.[27]
2. Zoning Regulation
Defendants also assert the Delaware CZA is entitled to a highly deferential standard of review because it is a zoning regulation. The Court agrees that the CZA does more than merely reinforce the anti-pollution concerns of the Delaware Environmental Protection Law, 7 Del.C.Ann. § 6001 et seq. The Act is also intended to "zone-out" bulk transfer facilities and heavy industry in the coastal zone because of their incompatibility with preferred recreational and tourism uses.[28] However, one would not apply a different standard of review to the Delaware CZA simply because it happens to have some zoning regulatory characteristics.
The authority of the States to enact zoning ordinances under their police powers is clear. Transcontinental Gas Pipe Line Corp. v. Hackensack Meadowlands Development Commission, 464 F.2d 1358, 1362 (3d Cir.1972), cert. denied, 409 U.S. 1118, 93 S.Ct. 909, 34 L.Ed.2d 701 (1973) (citing Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926)). It is equally clear, however, that a State may not exercise otherwise valid police power where the necessary effect would be to place a substantial burden on interstate commerce. Id. (citing *1241 Southern Pacific Co. v. Arizona, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945)).
None of the cases cited by defendants compels a more lenient standard for zoning regulations than for other regulations in areas of legitimate state interest.[29] Indeed, to hold in defendants' favor on this point would be to invite states to do under cover of zoning regulation that which they could not do by more straightforward regulation. See Dean Milk, 340 U.S. at 354, 71 S.Ct. at 297 (1951) (ordinance not valid "simply because it professes to be a health measure"). In Transcontinental the Court of Appeals, while not explicitly citing the Pike test, upheld the district court's holding of unconstitutionality after finding that "in determining whether or not an undue burden has been imposed upon interstate commerce" the district court sufficiently had weighed the Commission's justifications for its action. 464 F.2d at 1362.
The Court therefore declines to follow defendants' zoning law argument to adopt a Commerce Clause test even more deferential than the Pike test for the Delaware CZA.
C. The Pike Balance
For the foregoing reasons, the Court will not apply strict scrutiny to the Delaware CZA on the basis of discriminatory effect or burden on foreign commerce as alleged by plaintiffs. Defendants' attempt to win especially great deference, by analogizing to highway safety regulation and characterizing the statute as a zoning regulation, is also unconvincing. Although strict scrutiny might eventually be applied if plaintiffs prove discriminatory intent, see supra pp. 1237-38 the Court will discuss here the application of the Pike balancing test. Both plaintiffs and defendants claim they will prevail on summary judgment under this test.
For purposes of these cross-motions, it will be assumed the Delaware CZA "regulates evenhandedly to effectuate a legitimate local public interest," with only "incidental" effects on interstate commerce. The remaining question under Pike is whether the ban on bulk product transfer facilities imposes a burden on commerce "clearly excessive in relation to the putative local benefits." Pike, 397 U.S. at 142, 90 S.Ct. at 847. "[T]he extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities." Id.
Plaintiffs outline a substantial catalogue of burdens that allegedly result from the ban on vessel-to-vessel lightering. See Dkt. 120 at 65-69. By prohibiting coal top-off operations at Big Stone Anchorage, the only viable site, the Delaware CZA precludes the most efficient means of exporting coal. Id. at 66. The top-off service would reduce the per unit transportation costs of U.S. coal, making it more competitive on the world market. Id. at 67. Plaintiffs estimate that an additional three million tons of coal could be exported each year if topping-off is permitted, with a possible consequent addition of more than $150 million to the U.S. balance of payments. *1242 Id. at 68. Use of supercolliers is likely to increase employment at coal mines, on railroad lines, and at East Coast ports. Id. Finally, plaintiffs cite the direct loss they themselves would suffer due to the lightering prohibition, in both past expenditures and foregone revenue. Id. at 69.
There appears to be no real dispute that a coal top-off operation would reduce coal export costs to some extent and thereby enhance commerce in at least a generalized sense. The Delaware CZA, by prohibiting bulk product transfer facilities, therefore burdens commerce. Inherent in the Pike balancing test, however, is a requirement that the Court quantify the burden associated with the regulation at issue. On this level disputes concerning the effect of the Delaware CZA do exist, making summary judgment inappropriate.[30] An approximation by this Court as to the actual burden must await trial, if one is necessary.
Even if the extent of the burden were clear, however, summary judgment could not be granted under a Pike analysis because the "putative local benefits," 397 U.S. at 142, 90 S.Ct. at 847, against which the burden on commerce must be weighed, are in sharp dispute.[31]
Although defendants urge the Delaware CZA is not simply an anti-pollution measure, and that plaintiffs' project should not be considered in isolation, disagreement as to the benefits of the statute has centered on the environmental impact of plaintiffs' *1243 proposed project. There appears to be no real dispute, though plaintiffs occasionally claim otherwise, that the proposed coal lightering operation would emit or spill some pollutants. The dispute concerns the magnitude of its effect on the environment. Compare, e.g., DNREC Study at ii; Dkt. 120B at App. to Ex. N (252 tons of coal dust into Delaware Bay annually if transfer three-million tons; coal routinely spilled; measurable air quality degradation), with Axetell Aff., Dkt. 120B at A329-49 (1.5 tons per 3 million tons transferred); Cowerd Aff., id. at A350-70 (0.0006 pounds/ton emission rate); Meyer Aff., id. at A371-438 (1 ton per 3 million tons transferred); Baummer Aff., id. at A553-98 (not a significant source of toxic pollutants); Bender Aff., id. at A612-51 (little effect on oysters). See also French Aff., Dkt. 138B at DA68-69 (Meyer test in Alabama not applicable to Delaware Bay); Sharp Aff., id. at DA71-73 (failure to use "state of the art" analysis and reliance on Meyer test); Dkt. 138 at 53 (plaintiffs failed to consider the cumulative impact of their operations and other bulk product transfers, and the chances for operator error). But see Dkt. 145 at 16-31.
On summary judgment it is not the Court's function to untangle the affidavits and decide which experts are more correct. Fugitive dust emissions, coal spillage, and their environmental effects remain in dispute and uncertain. Moreover, putative benefits of the Delaware CZA other than its direct anti-pollution aspect may be more significant and are also disputed. See infra note 32.
Under these circumstances, with both benefits and burdens open to dispute, the Court cannot hold that either party is entitled to judgment as a matter of law under the Pike test. If a trial is necessary, and plaintiffs fail to prove discriminatory purpose, it will be their burden to show that the burden on commerce is "clearly excessive" when weighed against the local benefits.[32]
D. Conclusion Absent Congressional Consent
Absent congressional authorization of the Delaware CZA, neither party can obtain summary judgment in this case. Plaintiffs are not entitled to a strict scrutiny analysis of the Delaware statute on summary judgment. Similarly, defendants are not entitled to a highly deferential review. Because genuine issues of material facts are in dispute, neither plaintiffs nor defendants are entitled to summary judgment.
V. Congressional Consent Analysis
Denial of summary judgment under Pike does not end the inquiry. There remains *1244 for disposition defendants' argument that Congress consented to the State of Delaware's ban on coal lightering within the coastal zone. Defendants urge Congress has consented to Delaware's ban on the proposed coal-transfer operation by its passage of the Coastal Zone Management Act (CZMA). There being no disputed material issues of fact, the only issue is whether, as a matter of law, Congress intended to give its consent. This solely legal issue is ideally suited for summary judgment.
A. The Congressional Consent Framework
In analyzing whether Congress has given its consent for States to legislate in a manner otherwise impermissible under the Commerce Clause, the Court looks first to the text of the federal statute purportedly authorizing state action, see, e.g., Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed. 1342 (1946), and thereafter to relevant legislative history for assistance in explicating Congress' meaning, see Northeast Bancorp v. Board of Governors, ___ U.S. ___, 105 S.Ct. 2545, 86 L.Ed.2d 112 (1985), and to administrative regulations. See White v. Massachusetts Council of Constr. Employers, Inc., 460 U.S. 204, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983).
The congressional power to consent to otherwise impermissible state regulation of interstate commerce must be exercised expressly. See, e.g., Western & Southern Life Ins. Co. v. State Bd. of Equalization, 451 U.S. 648, 654, 101 S.Ct. 2070, 2075, 68 L.Ed.2d 514 (1981) (Congress "explicitly intended" the McCarran-Ferguson Act, 15 U.S.C. § 1011 et seq., to authorize state taxing and regulatory powers over the insurance business). As the Court has recently observed, however, "[t]here is no talismanic significance to the phrase `expressly stated'; it merely states one way of meeting the requirement that for a state regulation to be removed from the reach of the dormant Commerce Clause, congressional intent must be unmistakably clear." South-Central Timber Development, Inc. v. Wunnicke, 467 U.S. 82, 104 S.Ct. 2237, 2242, 81 L.Ed.2d 71 (1984).
By "expressly stated" the Court does not require Congress to explain, either in the body of the statute or in the legislative history, that it is exercising its Commerce Clause power. Thus the McCarran Act approved in Prudential Insurance, 328 U.S. 408, 66 S.Ct. 1142, nowhere mentions the Commerce Clause. See 15 U.S.C. §§ 1011-1015; see also 12 U.S.C. § 1842(d) (Douglas Amendment to the Bank Holding Company Act, construed in Northeast Bancorp, ___ U.S. ___, 105 S.Ct. 2545, 86 L.Ed.2d 112 (1985), as removing all Commerce Clause restraints from state regulation of interstate bank acquisitions).
The issue of congressional consent embraces two questions: (1) Whether, as the State of Delaware contends, Congress by enacting the Coastal Zone Management Act, 16 U.S.C. § 1451 et seq., intended to remove from Commerce Clause scrutiny state coastal zone management statutes funded under the Act; and (2) Assuming the CZMA provides the states such authorization, whether the specific ban on plaintiff's coal-transfer operation is within the scope of that authorization.
B. The Coastal Zone Management Act of 1972
1. The Statutory Framework
Congress in the Coastal Zone Management Act of 1972 found "[t]here is a national interest in the effective management, beneficial use, protection, and development of the coastal zone,"[33] 16 U.S.C. § 1451(a) *1245 (1982), and declared "it is the national policy to preserve, protect, develop, and where possible, to restore or enhance, the resources of the Nation's coastal zone...." Id. § 1452(1). Congress observed "[t]he increasing and competing demands upon the lands and waters of our coastal zone occasioned by population growth and economic development, including requirements for industry, commerce, residential development, recreation, extraction of mineral resources and fossil fuels, transportation and navigation, waste disposal, and harvesting of fish, shellfish, and other living marine resources," id. § 1451(c), and found "inadequate" existing state and local arrangements for planning and regulating coastal land and water use. Id. § 1451(h).
To achieve its policy objective, Congress entrusted to the coastal states the primary responsibility for developing and administering coastal zone management programs. The States were to be given federal grants as an incentive to take on this task. Congress insured that its federal goals would be met by requiring active approval and oversight of the state programs by the Secretary of Commerce.
Congress amended the CZMA in 1976 to help the States deal with problems resulting from increased energy-related activities in the coastal zone. See Legislative History at 577-78. Congress found that "growing energy facility requirements and the imminent construction of deepwater ports ... add to the challenge of bringing rational management to the coastal zone." S.Rep. No. 277, 94th Cong., 1st Sess. 10 (1975), reprinted in Legislative History at 736, U.S.Code Cong. & Admin.News 1976, pp. 1768, 1777. The Amendment left intact the existing framework of the original Act, but provided increased funding and required the States to take into account the siting of energy facilities in assessing the "national interest." Pub.L. No. 94-370, §§ 4, 5(3) (1976), amending 16 U.S.C. §§ 1454, 1455(c)(8).
The CZMA was amended again in 1980. The new amendment made more specific the national policy objectives of the Act,[34] but the Congress noted that these additions were intended as "clarification[s]" and not as new program requirements. See H.Rep. No. 1012, 96th Cong., 2d Sess. 16 (1980), reprinted in 4 U.S.Code Cong. & Ad.News 4362, 4364 (1980). The House Report reaffirmed Congress' commitment "to preserve, protect, develop and where possible, to restore or enhance the resources of the Nation's coastal zone," id., and "reemphasize[d] its belief that the nation can provide the needed protection of our fragile coastal resources while at the same time continuing to expand and develop in those areas suited for development." Id.
a. Duties of the States
Under the CZMA, coastal states may apply for grants to develop coastal management plans, 16 U.S.C. § 1454(a)(1); to complete the development and assist in the initial implementation of the plans, id. 1454(a)(2); and to administer the plans. Id. § 1455.[35] A coastal state that has completed the development of its management program submits the program to the Secretary for review and approval under Section 1455. Id. § 1454(h).
Each state's coastal management program is to set forth "objectives, policies, and standards to guide public and private uses of lands and waters in the coastal zone." Id. § 1453(12). Congress required each state's management program to meet a number of substantive requirements. The program must, inter alia, define permissible land and water uses within the zone; designate areas of particular concern; establish guidelines on priorities of *1246 uses in particular areas; and create planning processes regarding access to beaches, siting of energy facilities, and prevention of shoreline erosion. Id. § 1454(b).
b. Duties of the Secretary of Commerce
Before approving a state's management program the Secretary[36] is required to make a number of findings. The Secretary must find, inter alia, the substantive requirements of Section 1454(b) (enumerated supra) are met, id. § 1455(a); the plan is consistent with the congressionally enunciated declaration of policy, id. § 1455(c); and the program provides for adequate consideration of the national interest involved in planning for and siting facilities, including energy facilities, necessary to meet requirements that are other than local in nature. Id.[37] The Secretary is required to consider the views of federal agencies principally involved before approving a state coastal management program. Id. § 1456(b).[38]
If the Secretary approves a state's coastal management program, the Secretary is authorized to make annual grants for the state's administration of the program. Id. § 1455(a). After the initial approval of a state's coastal management program, the Secretary "shall conduct a continuing review of the performance of coastal states with respect to coastal management." Id. § 1458(a). The Secretary must provide a written evaluation assessing and detailing, inter alia, the state's implementation and enforcement of its coastal management program, and the state's manner of addressing the congressional policy declarations.[39]Id.
If the Secretary determines a "coastal state is failing to make significant improvement in achieving the coastal management objectives," the Secretary is to reduce any financial assistance received by the state for administration of its program. Id. § 1458(c). Should the Secretary find the state is failing to adhere to its approved management plan without justification, the sanction is more serious: The Secretary shall withdraw federal approval of a state's entire coastal management program and all financial assistance available to the state under title 16.[40]Id. § 1458(d).[41]
The Secretary is required to report biennially to Congress on the administration of the CZMA. Id. § 1462(a). The report must include, inter alia, a description of each participating state's program and accomplishments; a statement of reasons for the disapproval of any state program reviewed; a summary of the continuing review over state programs and of any sanctions applied; a listing of all activities and projects found inconsistent with an approved state coastal management program; a summary of a coordinated national strategy and program for the nation's coastal *1247 zone; and a description of the economic, environmental, and social consequences of energy activity affecting the coastal zone. Id.
2. Congressional Authorization Under the CZMA
Although Congress set national policy goals in the CZMA, it did not enact a comprehensive statute detailing a coastal-management plan for the vast coastal area of the United States. Instead, Congress intended each state to draw up a plan for its own coastal area. As the Senate Report explains, the Act "has as its main purpose the encouragement and assistance of the States in preparing and implementing management programs." S.Rep. No. 753, 92d Cong., 2d Sess. (1972) (hereinafter cited as S.Rep. No. 753), reprinted in Legislative History at 193, U.S.Code Cong. & Admin.News 1972, p. 4776.[42]
Congress feared local zoning boards, which were often the only existing land-use planning agencies, would not adequately safeguard this national interest,[43] yet rejected the idea that "there should be only one policy and one system of management." S.Rep. No. 753, reprinted in Legislative History at 196, U.S.Code Cong. & Admin.News 1972, p. 4778. "[E]xperience has shown us that in order to achieve adequate manageability, diverse systems are often needed." Id. Congress decided to make the states, instead of local governments or the federal government, "the focal point for developing comprehensive plans and implementing management programs for the coastal zone." Id. at 197, U.S.Code Cong. & Admin.News 1972, p. 4780. Thus 16 U.S.C. § 1451(i) reads in part, "The key to more effective protection and use of the land and water resources of the coastal zone is to encourage the states to exercise their full authority over the lands and waters in the coastal zone...."[44]
The entire thrust of the Act is for each state to resolve for its own coastal area the basic choices among competing uses for finite resources. The statute is "to encourage and assist the states ... to achieve wise use of the land and water resources of the coastal zone." 16 U.S.C. § 1452(2). When the Act was amended in 1980, this intent was made even clearer: Congress found "the need for resolution of serious conflicts among important and competing uses and values in coastal and ocean waters." Id. § 1451(f).
Congress understood that the choices made by the states would affect commercial interests. Congress directed the states *1248 to consider commercial and industrial activities as well as recreational and ecological uses in drawing up their coastal-zone management plans. See id. § 1452. The congressional findings note that the coastal zone contains, inter alia, commercial and industrial resources, 16 U.S.C. § 1451(b); and that economic development, including requirements for industry and commerce, is placing increasing demands on the coastal zone. Id. § 1451(c). The Senate Report stated that "most of our great commercial and industrial development is taking place in or near the coastal zone. Additionally, the coastal zone is a politically complex area, involving local, State, regional, national and international political interests." S.Rep. No. 753, reprinted in Legislative History at 196, U.S.Code Cong. & Admin. News 1972, p. 4779.
The national goals set forth in the CZMA reflect congressional concern that commercial and industrial uses not be given automatic priority over recreational and ecological uses. See 16 U.S.C. §§ 1451-52. To the contrary, Congress believed the states were giving inadequate consideration to noneconomic factors relating to coastal-zone development. As the Senate Report noted, "there have been numerous examples of commercial development within the coastal zone taking precedent [sic] over protection of the land and waters of the coastal zone.... Local government needs financial, planning, political, and other assistance to avert damage to natural values in the coastal zone." S.Rep. No. 753, reprinted in Legislative History at 196-97, U.S.Code Cong. & Admin.News 1972, p. 4779. By telling the states to "giv[e] full consideration to ecological, cultural, historic, and esthetic values as well as to needs for economic development," 16 U.S.C. § 1452(2), Congress was saying a state may legitimately choose recreational use over industrial use.
Although the 1976 Amendments to the Act reflected increased congressional concern with energy self-sufficiency, Congress did not jettison its emphasis on preservation of the coastal zone. The Senate Committee Report on the 1976 Amendments described in detail a number of specific situations in which energy development threatened the ecology of the coastal zone. See S.Rep. No. 277, at 10-19, reprinted in Legislative History at 736-745. The Report cited with approval a coastal plan developed by the Shetland Islands, in Scotland, which is similar to the Delaware plan in that it banned onshore industrial development from all but a single site. S.Rep. No. 277, at 16-17, reprinted in Legislative History at 742-43. The same Report also noted specifically that Delaware had banned heavy industry from its coastal area. S.Rep. No. 277, at 6, reprinted in Legislative History at 732. The 1980 Amendments likewise indicate that congressional concern for protection of natural resources retained primary importance. See H.Rep. No. 1012, supra, at 16, reprinted in 4 U.S.Code Cong. & Ad.News 4364 (1980).
An analysis of the entire statutory scheme compels the conclusion that Congress intended the states to resolve choices among competing uses in a manner that might otherwise be subject to Commerce Clause challenge. Congress deliberately and repeatedly spoke of "choices" to be made by the states after "balancing" environmental and developmental concerns and priorities, and indeed, of forbidding entirely some potential uses. See, e.g., 16 U.S.C. § 1454(b)(2), (4). This entire statutory framework would become a nullity if the traditional Commerce Clause concern with breaking down barriers to commerce remained paramount.
Nevertheless, Congress inserted within the CZMA a strong safeguard for the federal interest. To insure generally that the state coastal management plans comported with the national goals of conserving the coastal zone and of promoting orderly development, Congress specifically directed the Secretary of Commerce to approve each state's plan before the state could receive federal funding. See 16 U.S.C. § 1455.
The CZMA requires the Secretary, in the course of approving state's coastal zone *1249 management program, to find the plan "provides for adequate consideration of the national interest involved in planning for, and in the siting of, facilities (including energy facilities in, or which significantly affect, such state's coastal zone) which are necessary to meet requirements which are other than local in nature." 16 U.S.C. § 1455(c)(8).
Although the "national interest" is not defined by the statute, a fair reading of the statute compels the Court to interpret the "national interest" as the national interest in the specific activities Congress directed the states to consider in drawing up their management plans which includes commercial activities. This reading is bolstered by examining the relevant legislative history.
The House Report on the CZMA explained in some detail this provision of the statute. The Report stated that the Act did not relinquish any federal constitutional powers, "including those relating to interstate and foreign commerce...." H.Rep. No. 1049, 94th Cong., 2d Sess., reprinted in Legislative History at 322. Although plaintiffs seize on this statement as incontrovertible proof that Congress was not exercising its Commerce Clause powers, taken in context the statement shows the very opposite. The Report continues: "To the extent that a State program does not recognize these overall national interests, ... the Secretary may not approve the State program until it is amended to recognize those Federal rights, powers, and interests." Id.
This explanation in the House Report confirms that the "national interest" the Secretary was to take into account in approving a state plan includes, in particular, commerce. The Secretary's approval of a state program constitutes a finding that the program comports with the national interest as defined by Congress in the CZMA.
Plaintiff also argues that Congress' directive to the Secretary to consider the national interest, even if it includes Commerce Clause concerns, requires the Secretary to consider process only, not substance. The Secretary's interpretation of the statute, however, indicates that substance is to be considered. The regulations promulgated by the Secretary explain in detail how the states are to meet their requirement to consider the national interest:
States must:
(1) Describe the national interest in the planning for and siting of facilities considered during program development.
(2) Indicate the sources relied upon for a description of the national interest in the planning for and siting of the facilities.
(3) Indicate how and where the consideration of the national interest is reflected in the substance of the management program. In the case of energy facilities in which there is a national interest, the program must indicate the consideration given any interstate energy plans or programs, developed pursuant to section 309 of the Act, which are applicable to or affect a State's coastal zone.
(4) Describe the process for continued consideration of the national interest in the planning for a siting of facilities during program implementation, including a clear and detailed description of the administrative procedures and decisions points where such interest will be considered.
15 C.F.R. § 923.52(c) (1985). The above regulations make very clear that a state must do more than merely indicate the "national interest" has been considered in its program; it must, inter alia, "[i]ndicate how and where the consideration of the national interest is reflected in the substance of the management program." (emphasis added). Under the regulations, the Secretary looks to the content of the national interest, not simply the procedures used by the State to consider that interest. Plaintiffs' argument that the Secretary is charged to consider only process, and not substance, in deciding whether a state has provided adequately for the national interest is thus belied by the regulations.
*1250 The view of the agency charged with administering a statute is entitled to considerable judicial deference. A court need find only that the agency's understanding of the statute is a sufficiently rational one to preclude it from substituting its judgment for that of the agency. Chemical Mfrs. Ass'n v. Natural Resources Defense Council, Inc., ___ U.S. ___, 105 S.Ct. 1102, 1108, 84 L.Ed.2d 90 (1985); see also Train v. Natural Resources Defense Council, 421 U.S. 60, 75, 87, 95 S.Ct. 1470, 1479, 1485, 43 L.Ed.2d 731 (1975). The regulations here are entitled to judicial deference as a rational interpretation of the "national interest" which is not contrary to the clearly expressed intent of Congress. See Chemical Mfrs. Ass'n, 105 S.Ct. at 1108.
In enacting the CZMA Congress was acting, in part, pursuant to its constitutional power under the Commerce Clause. The CZMA thus embodies a congressional exercise of the Commerce Clause power translated into a set of congressionally mandated policies over the coastal zone. Congress funds only those plans that comport with the national interest, and therefore requires the Secretary of Commerce to approve state plans. The Secretary's approval is not a rubber stamp, but is subject to statutory requirements.
The consent mechanism set up by Congress is more complex than the blanket congressional consent given to state insurance laws, see Prudential Insurance, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed.2d 1342 (1946), or to state laws governing interstate bank acquisitions. See Northeast Bancorp, ___ U.S. ___, 105 S.Ct. 2545, 86 L.Ed.2d 112 (1985). This complexity is not fatal, however; Congress is entitled to exercise its plenary Commerce Clause power as it sees fit and is not restricted to choosing between consenting to all state coastal zone laws or to none.
Plaintiffs contend this reading of the CZMA allows the unconstitutional delegation of authority by Congress to the Secretary to make a finding on the Commerce Clause. Plaintiffs confuse a very basic point. The Secretary in carrying out his duties under the CZMA is acting pursuant to a statute that confines his discretion. As the Supreme Court observed in Carlson v. Landon, 342 U.S. 524, 542, 72 S.Ct. 525, 535, 96 L.Ed. 547 (1952), "Congress can only legislate so far as is reasonable and practicable, and must leave to executive officers the authority to accomplish its purpose." Congress' policy statements, definitions, and requirements, particularly in 16 U.S.C. §§ 1452, 1453, and 1455, provide sufficient standards to limit executive judgment and therefore the legislation is constitutionally permissible. See Carlson v. Landon, 342 U.S. at 544, 72 S.Ct. at 536.[45] Moreover, plaintiffs overlook the Supreme Court's decision in White v. Massachusetts Council of Construction Employees, 460 U.S. 204, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983). The federal statute in White was entirely silent on the challenged mayoral order requiring 50% of construction workers on certain federally funded construction projects in Boston to be Boston residents. The Court found the mayoral order "sound[ed] a harmonious note" with "the federal regulations for each program [which] affirmatively permit the type of parochial favoritism expressed in the order." Id. 460 U.S. at 213, 103 S.Ct. at 1047. The Court concluded that this administrative regulation constituted express congressional consent. Id.
The Secretary of Commerce first approved the Delaware coastal zone management plan in August, 1979. Included within the plan was the specific statutory *1251 provision to which plaintiffs object. The Secretary has subsequently made three reviews of the Delaware plan, in 1980, 1982, and 1984, and has continued to approve it. Based upon the regulations and the Secretary's periodic approval of the Delaware plan, the requirement of express congressional consent is met.
C. The Delaware CZA
Nevertheless, plaintiffs continue to insist the Secretary has not approved the interpretation of Delaware's statutory ban on bulk product transfer facilities to include a ban on plaintiffs' proposed coal-transfer operations. This argument is without merit. The Delaware CZA defines "bulk product transfer facility" as
any port or dock facility, whether an artificial island or attached to shore by any means, for the transfer of bulk quantities of any substance from vessel to onshore facility or vice versa. Not included in this definition is a docking facility for which a permit is granted or which is a nonconforming use. Likewise, docking facilities for the Port of Wilmington are not included in this definition.
Id. § 7002(f).
In the report approving the Delaware plan, the Secretary commented explicitly on the Delaware ban. The Secretary stated that the policies of the Delaware plan
focus on the protection of valuable coastal resources while recognizing the need to accommodate economic growth and to judiciously allow competing use of coastal resources. Thus, while certain heavy industrial uses are prohibited from the Coastal [Zone], they are allowed in other parts of the State. Also, within the Coastal [Zone], bulk product transfer facilities are restricted to the Port of Wilmington, so that any adverse effect on valuable natural resources will be mitigated while allowing such facilities which are of national interest.
Findings of R.W. Knecht, Ass't Admin. for Coastal Zone Management, NOAA, Approval of the Delaware Coastal Management Program at 12 (Aug. 21, 1979), contained in Dkt. 132A, at 659, 672.
Plaintiffs insist the above discussion by the Secretary demonstrates he did not understand the bulk product transfer ban to include a ban on vessel-to-vessel coal lightering. Plaintiffs point out that vessel-to-vessel coal lightering cannot be carried out in the Port of Wilmington and thus it would be meaningless for the Secretary to say that vessel-to-vessel coal lightering is among the "bulk product transfer facilities ... restricted to the Port of Wilmington."
Plaintiffs mistake the scope of the Secretary's approval. Once the Secretary has approved a state's plan, that approval continues indefinitely, until the Secretary next reviews the plan. See 16 U.S.C. § 1458. Having been approved, Delaware's plan bears the imprimatur of Congress that the national interest in commerce has been accorded due consideration. At the time of the continuing review, the Secretary is free, subject to constraints not applicable here, to withdraw approval from unsatisfactory state plans. The continuing-review mechanism thus allows the Secretary to ensure that state administrative and judicial interpretations of the state statute remain consistent with national policy goals.
The Delaware Supreme Court decision interpreting the Delaware CZA's ban on bulk product transfer facilities to include plaintiffs' proposed coal top-off service was handed down in 1985. Coastal Barge Corp. v. Coastal Zone Indus. Control Bd., 492 A.2d 1242 (Del.1985). The Secretary has not reviewed the Delaware program since the time of that decision. If, as plaintiffs assert, the State's plan now merits disapproval, they may press this argument before the Secretary.[46] For this Court to *1252 step into this process of continuing review before the Secretary has taken any action would circumvent the statutory scheme set up by Congress.
The Department of Commerce through the Justice Department is present in this action as an amicus curiae in support of the position of plaintiffs. A group of United States Senators and Representatives has also filed an amicus curiae brief in support of plaintiffs. In large part, both briefs urge that the Delaware prohibition on bulk-product transfer facilities, and specifically the ban on the proposed coal top-off service, contravenes the national interest of the United States in promoting coal exports.
Assuming arguendo the Delaware prohibition does contravene our national coal-export policy, plaintiffs' position is not furthered. In enacting the CZMA Congress recognized there would be conflict between competing activities. The states in the first instance are to balance the merits of the activities and, to the extent necessary, choose among them. The Secretary in conducting the review and then again in the continuing reviews may disapprove those choices. The Secretary has not done so here. It is not for the federal judiciary to gainsay congressionally authorized commerce policies on the grounds of the national interest. For a court to declare unconstitutional in a piecemeal fashion a state's approved management plan destroys the integrity of Congress' coastal-management policy. Congress requires the Secretary to balance the merits of the entire plan; thus the appropriate balance is not the national coal-export policy against the allegedly incremental environmental degradation caused by plaintiff's coal top-off service, but the national coal-export policy against the preservation of the Delaware coastal zone as embodied in the Delaware coastal-zone management plan. The Secretary is obligated by statute to carry out this latter balance. Unless the Secretary exercises his power to disapprove the plan, the Court must assume the balance has been struck in favor of the Delaware plan.
Nor is the Court persuaded by the amicus brief submitted on plaintiffs' behalf by a few members of Congress.[47] These Senators and Representatives are in essence urging the Court to overturn congressional policy as enunciated in the CZMA in favor of the national coal-export policy. The proper forum for such a policy change, of course, is the legislature, not the judiciary.
VI. Conclusion
Through the Coastal Zone Management Act of 1972, 16 U.S.C. § 1451 et seq., and the Secretary's approval thereunder of the Delaware Coastal Zone management program, Congress has authorized the developmental restrictions contained within the Delaware Coastal Zone Act. The Delaware CZA is therefore immune from plaintiffs' challenge under the Commerce Clause and summary judgment will be entered in favor of defendants.
While summary judgment has been granted to defendants on the ground that Congress consented to the Delaware CZA, the Court in lengthy dicta discussed the parties' competing Commerce Clause arguments, ultimately denying summary judgment to both plaintiffs and defendants on that ground. The extensive Commerce Clause discussion represents a departure from normal prudential practice in anticipation of an appeal on the congressional-consent issue. See Synar v. United States, 626 F.Supp. 1374, 1382 (D.D.C.1986). In the event there should be a remand, the appellate court will have the benefit of this Court's views on a tangled area of Commerce Clause law so as to be able to provide guidance should it choose to do so. *1253 Cf. Hornsby v. United States Postal Serv., 787 F.2d 87, 89 (3d Cir.1986).
NOTES
[1] Plaintiffs previously sought a preliminary injunction enjoining enforcement of the Delaware CZA against them and requiring that the State process their pending applications for air pollution control permits under the Delaware Environmental Protection Law, 7 Del.C.Ann. § 6001 et seq. (1974 & 1984 Supp.). Judge Longobardi denied the motion on the grounds that plaintiffs had made no showing of irreparable injury, and also out of deference to the action then pending before the Delaware Supreme Court on the merits of the Superior Court decision that plaintiffs' proposed activities fell within the strictures of the Delaware CZA. Norfolk Southern Corp. v. Oberly, 594 F.Supp. 514, 521-22, 523 (D.Del. 1984).
[2] Plaintiffs are Norfolk Southern Corp., Norfolk Southern Marine Services, Inc., Lamberts Point Barge Co., Inc., Coastal Barge Corp., Coal Logistics Corp., and Coastal Carriers Corp.
For convenience, reference will be to "plaintiffs" generally, although not all have been involved throughout the entire history of the project and litigation.
[3] In May, 1983, the Coast Guard, pursuant to its authority under 33 U.S.C. § 471, redesignated Big Stone Anchorage as a "general anchorage," 48 Fed.Reg. 23,636 (1983), a change designed to permit "shippers transporting commodities other than oil to use [Big Stone Anchorage] as both a holding anchorage and an anchorage for lightering." 33 C.F.R. 110.157. Previously, Big Stone Anchorage had been designated specifically to allow supertankers to anchor and conduct their oil-lightering operations.
[4] Plaintiffs assertedly cannot use a location farther out from shore because of the frequency and severity of storms on the Atlantic Ocean.
[5] Oil lightering is not subject to the Delaware CZA ban on offshore bulk product transfer facilities because it was grandfathered in as an existing use. See 7 Del.Code Ann. § 7003 ("bulk product transfer facilities which are not in operation on June 28, 1971, are prohibited in the coastal zone....").
[6] The preliminary negotiations are discussed in greater detail in Norfolk Southern Corp. v. Oberly, 594 F.Supp. 514, 517-18 (D.Del.1984).
[7] The "coastal zone" subject to the Delaware CZA is defined at 7 Del.C.Ann. § 7002(a). The coastal zone extends the length of the state and averages four miles in width. Office of Coastal Zone Management, NOAA, U.S. Dept. of Commerce, Delaware Coastal Management Program and Final Environmental Impact Statement, Summary at 3 (1980), Second Aff. of David S. Hugg, III, Ex. C. (Dkt. 123A). Both land and water areas are included within the coastal zone.
[8] Section 7003 reads:
Heavy industry uses of any kind not in operation on June 28, 1971, are prohibited in the coastal zone and no permits may be issued therefor. In addition, offshore gas, liquid, or solid bulk product transfer facilities which are not in operation on June 28, 1971, are prohibited in the coastal zone, and no permit may be issued therefor. Provided, that this section shall not apply to public sewage treatment or recycling plants. A basic steel manufacturing plant in operation on June 28, 1971, may continue as a heavy industry use in the coastal zone notwithstanding any temporary discontinuance of operations after said date, provided that said discontinuance does not exceed 1 year.
[9] Section 7002(f) reads:
"Bulk product transfer facility" means any port or dock facility, whether an artificial island or attached to shore by any means, for the transfer of bulk quantities of any substance from vessel to onshore facility or vice versa. Not included in this definition is a docking facility or pier for a single industrial or manufacturing facility for which a permit is granted or which is a nonconforming use. Likewise, docking facilities for the Port of Wilmington are not included in this definition.
[10] Pursuant to 7 Del.C.Ann. § 7007(a) (1984).
[11] This implied limitation is commonly referred to as the "dormant Commerce Clause."
[12] The tests are oversimplified above, but are set forth in more detail at infra pp. 1232-33.
The legal standards governing the review of state regulation under the Commerce Clause remain unsettled. See Kassel v. Consolidated Freightways Corp., 450 U.S. 662, 706, 101 S.Ct. 1309, 1334, 67 L.Ed.2d 580 (1981) (Rehnquist, J., dissenting); American Trucking Associations, Inc. v. Larson, 683 F.2d 787, 790 (3d Cir.), cert. denied, 459 U.S. 1036, 103 S.Ct. 448, 74 L.Ed.2d 603 (1982); Aldens, Inc. v. Packel, 524 F.2d 38, 45 (3d Cir.1975), cert. denied, 425 U.S. 943, 96 S.Ct. 1684, 48 L.Ed.2d 187 (1976). See also Raymond Motor, 434 U.S. at 440, 98 S.Ct. at 793 ("experience teaches that no single conceptual approach identifies all of the factors that may bear on a particular case.").
Academic criticism of current Commerce Clause jurisprudence includes: Eule, Laying the Dormant Commerce Clause to Rest, 91 Yale L.J. 425 (1982); Maltz, How Much Regulation is Too Much An Examination of Commerce Clause Jurisprudence, 50 Geo.Wash.L.Rev. 47 (1981); Tushnet, Rethinking the Dormant Commerce Clause, 1979 Wisc.L.Rev. 125 (1979).
[13] The Pike Court continued: "Occasionally the Court has candidly undertaken a balancing approach in resolving these issues ... but more frequently it has spoken in terms of `direct' and `indirect' effects and burdens." Id. The balancing approach now prevails for evenhanded regulation. See Arkansas Elec. Coop. Corp. v. Arkansas Public Comm'n, 461 U.S. 375, 389-94, 103 S.Ct. 1905, 1915-18, 76 L.Ed.2d 1 (1983); Baltimore Gas & Elec. Co. v. Heintz, 760 F.2d 1408, 1420-22 (4th Cir.), cert. denied, ___ U.S. ___, 106 S.Ct. 141, 88 L.Ed.2d 116 (1985). See also DiSanto v. Pennsylvania, 273 U.S. 34, 44, 47 S.Ct. 267, 271, 71 L.Ed. 524 (1927) (Stone, J., dissenting) (direct/indirect analysis is "too mechanical, too uncertain in its application, and too remote from actualities, to be of value." Using that test is "doing little more than using labels to describe a result rather than any trust-worthy formula by which it is reached."). The Baltimore Gas court suggested that the virtual per se prohibition on "direct" burdens on interstate commerce is preserved, "albeit in a different formulation," in the Pike test's requirement of evenhandedness. 760 F.2d at 1422.
One commentator has noted that "[a]t most, the fluid criteria of Pike provide a framework for Commerce Clause analysis; they provide no litmus test of constitutionality." Hellerstein, Hughes v. Oklahoma: The Court, the Commerce Clause, and State Control of Natural Resources, 1979 Sup.Ct.Rev. 51, 67. See also articles cited in supra note 12.
[14] The rationale for applying stricter scrutiny to state regulations that disproportionately burden out-of-state interests relates to the relative adequacy of the political process. Because the burdens associated with facially neutral regulations will typically fall on local as well as out-of-state interests, the state's political processes will tend to check unduly burdensome regulations. That check dissipates when the burden falls more heavily on out-of-state interests. See Kassel, 450 U.S. at 675-76, 101 S.Ct. at 1318-19; South-Central Timber, 104 S.Ct. at 2243.
[15] It is important to frame properly the scope of the Commerce Clause inquiry. While the case law is far from clear, the Court will look to the benefits and burdens of the Delaware CZA's prohibition of "offshore gas, liquid, or solid bulk product transfer facilities which are not in operation on June 28, 1971." 7 Del.C.Ann. § 7003 (1984 Supp.).
The Court will not examine the Delaware CZA as a whole, nor focus narrowly on its prohibition of plaintiffs' proposed coal lightering activity. The broad approach could allow otherwise unconstitutionally discriminatory or burdensome regulations to be saved by artful enactment as part of a more comprehensive statute that, in toto, withstands Commerce Clause attack. A ban on heavy industry that falls exclusively on in-state interests, for example, cannot be used to "balance out" any actual discrimination in the ban on transfer facilities. (The statute as a whole, however, can shed light on the legislative purpose behind the challenged provision.)
The narrow approach, repeatedly advanced by plaintiffs, is equally unsatisfactory because virtually any regulation could be found "discriminatory" or "unduly burdensome" if the claim is drawn narrowly enough. The Commerce Clause "protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations." Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 127-28, 98 S.Ct. 2207, 2214-15, 57 L.Ed.2d 91 (1978). The courts should not allow individual plaintiffs to use the Commerce Clause to force the States repeatedly to justify the particular applications of facially evenhanded regulations, nor to "nibble away" at otherwise valid state regulation. Thus, in the context of Clover Leaf, 449 U.S. 456, 101 S.Ct. 715, for example, a manufacturer of biodegradable plastic milk containers should take his case for an exemption to the legislature, not the courts. But see Hunt, 432 U.S. 333, 97 S.Ct. 2434 (affirming invalidation of facially evenhanded regulation "insofar as it prohibited the display of Washington State apple grades").
[16] There is no dispute that, on its face, the Delaware CZA regulates evenhandedly. Cases addressing facially discriminatory regulations, which are easily deemed discriminatory in purpose and/or effect, do not control. See, e.g., Bacchus Imports, 468 U.S. 263, 104 S.Ct. 3049 (tax exemption for locally-produced alcoholic beverages); South-Central Timber, 467 U.S. 82, 104 S.Ct. 2237 (requiring in-state processing of timber); Sporhase, 458 U.S. 941, 102 S.Ct. 3456 (reciprocity requirement for export of ground water); Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 100 S.Ct. 2009, 64 L.Ed.2d 702 (1980) (prohibiting investment services by out-of-state bank holding companies); Hughes, 441 U.S. 322, 99 S.Ct. 1727 (banning export of minnows); City of Philadelphia, 437 U.S. 617, 98 S.Ct. 2531 (prohibiting import of waste); Cottrell, 424 U.S. 366, 96 S.Ct. 923 (reciprocity requirement for import of milk); Pennsylvania v. West Virginia, 262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117 (1923) (requiring preference for instate purchasers of natural gas).
Unlike the regulations dealt with in these and other cases, the Delaware CZA does not dispense its benefits and burdens at the State border. All product transfer facilities, not just those owned or operated by out-of-state interests, are subject to the statutory ban. Nor does the Delaware CZA "block the flow" of interstate and foreign commerce at Delaware's borders, as alleged by plaintiffs, in the same way as the statutes struck down in Hughes and other cases.
[17] The Court assumes for purposes of this subsection only that economic protectionism cannot be established on the basis of "discriminatory purpose," i.e., that the actual basis for enactment of the Delaware CZA was to protect the environment and control development not to promote the economic interests of Delaware industries (e.g., tourism, recreation) at the expense of out-of-state industries (e.g., shipping). In fact, a genuine material issue of fact exists as to whether economic protectionism motivated enactment of the Delaware CZA. See infra pp. 1237-1238.
[18] The Court noted that the record demonstrated the existence of major interstate gasoline marketers unaffected by the statute because they did not refine or produce gasoline. Exxon, 437 U.S. at 125-26, 98 S.Ct. at 2213-14. This finding is not essential to the Court's holding. The existence of coal exports unaffected by the Delaware CZA, however, likewise supports this Court's holding that the statute does not discriminate against interstate commerce.
The Exxon Court noted: "If the effect of a state regulation is to cause local goods to constitute a larger share, and goods with an out-of-state source to constitute a smaller share, of the total sales in the market as in Hunt, 432 U.S., at 347, 97 S.Ct., at 2443, and Dean Milk, 340 U.S., at 354, 71 S.Ct., at 297 the regulation may have a discriminatory effect on interstate commerce." 437 U.S. at 126 n. 16, 98 S.Ct. at 2214 n. 16.
[19] The Third Circuit Court of Appeals in American Trucking, 683 F.2d 787, dealt with a different type of discrimination claim. Plaintiffs challenged a Pennsylvania statute that required periodic inspections, by any state, of motor carrier vehicles operated in Pennsylvania. The court rejected plaintiffs' argument that, because Pennsylvania carriers were already subject to a state inspection program, the statute discriminated against out-of-state carriers. Id. at 798 n. 10.
[20] In Borough of Glassboro v. Gloucester County Board, 100 N.J. 134, 495 A.2d 49, cert. denied, ___ U.S. ___, 106 S.Ct. 532, 88 L.Ed.2d 464 (1985), the City of Philadelphia unsuccessfully attempted to stay an order enjoining use of a New Jersey landfill by all but three New Jersey counties. The Supreme Court of New Jersey, in an unanimous opinion, distinguished City of Philadelphia, 437 U.S. 617, 98 S.Ct. 2531, noting that the injunction was unrelated to the trash's place of origin. 495 A.2d at 55. That Philadelphia was the largest customer of the landfill did not change the result. In language fully applicable to plaintiffs' charge that the Delaware CZA is discriminatory, the court held:
The mere fact that Philadelphia is in another state should not imbue it with greater rights than it would possess if it were located in New Jersey. The Commerce Clause was intended as a shield against discrimination, not as a sword to obtain a preference.
Id. 495 A.2d at 56.
[21] One additional factor counsels against applying strict scrutiny in this case. Even if Congress did not actually authorize the Delaware CZA, see infra pp. 1244-53, the enactment of the Coastal Zone Management Act of 1972 and its subsequent amendments in 1976 and 1980 demonstrate that Congress has taken particular interest in the State-Federal relationship with respect to coastal zone areas and is likely to redefine the roles and responsibilities of the States as needed. The CZMA requires the Commerce Secretary to submit to the President and Congress biennial reports on the administration of the CZMA, which reports must include a description of the various state programs and recommendations for additional legislation deemed necessary by the Secretary. 16 U.S.C. § 1462(a), (b). In such circumstances, with the federal interest protected by Congress itself, the courts should be less eager to force the states to justify particular regulations. See Tushnet, supra note 12, at 164-65; see also Eule, supra note 12, at 435-36 (Congress and regulatory agencies will protect national interests worth protecting).
[22] Arguably, showing discriminatory effect is simply an easier means of demonstrating discriminatory intent. While either finding triggers strict scrutiny, most cases combine the two in determining whether the regulation in question discriminates against interstate commerce. See, e.g., Bacchus Imports, 104 S.Ct. at 3055-56; Hunt, 432 U.S. at 352-53, 97 S.Ct. at 2446-47.
[23] Section 7001 of the Delaware Coastal Zone Act sets out the purpose of the Act. The Section reads in full:
It is hereby determined that the coastal areas of Delaware are the most critical areas for the future of the State in terms of the quality of life in the State. It is, therefore, the declared public policy of the State to control the location, extent and type of industrial development in Delaware's coastal areas. In so doing, the State can better protect the natural environment of its bay and coastal areas and safeguard their use primarily for recreation and tourism. Specifically, this chapter seeks to prohibit entirely the construction of new heavy industry in its coastal areas, which industry is determined to be incompatible with the protection of that natural environment in those areas. While it is the declared public policy of the State to encourage the introduction of new industry into Delaware, the protection of the environment, natural beauty and recreation potential of the State is also of great concern. In order to strike the correct balance between these 2 policies, careful planning based on a thorough understanding of Delaware's potential and her needs is required. Therefore, control of industrial development other than that of heavy industry in the coastal zone of Delaware through a permit system at the state level is called for. It is further determined that offshore bulk product transfer facilities represent a significant danger of pollution to the coastal zone and generate pressure for the construction of industrial plants in the coastal zone, which construction is declared to be against public policy. For these reasons, prohibition against bulk product transfer facilities in the coastal zone is deemed imperative.
7 Del.C.Ann. § 7001 (1983).
[24] This approach mirrors that of the plurality in Kassel, in which the Pike balance was further skewed in favor of validity when considering a state highway regulation. See 450 U.S. at 670-71, 101 S.Ct. at 1316-17.
[25] The fact that the panel split on the standard appropriate to the review of the highway safety regulation in American Trucking further weakens the applicability of that approach in other contexts.
[26] Special deference is accorded highway safety regulations on the assumption that the burden of facially evenhanded highway regulations usually falls on in-state as well as out-of-state economic interests, thus providing a political check on unduly burdensome regulations. Kassel, 450 U.S. at 675, 101 S.Ct. at 1318 (citing Raymond Motor, 434 U.S. at 444 n. 18, 98 S.Ct. at 795 n. 18). It also recognizes that the States bear primary responsibility for constructing, maintaining, and policing their highways, the conditions of which vary from State to State. Raymond Motor, 434 U.S. at 444 n. 18, 98 S.Ct. at 795 n. 18. The Court has been generally reluctant to balance safety against commerce. See, e.g., id. at 448-51, 98 S.Ct. at 797-99 (Blackmun, J., concurring) (narrowing decision by focusing on illusory nature of alleged safety benefits); Kassel, 450 U.S. at 679-87, 101 S.Ct. at 1320-25 (Brennan, J., concurring) and 687-706 (Rehnquist, J., dissenting) (rejecting balance); see also Brotherhood, 393 U.S. at 140, 89 S.Ct. at 329 ("It is difficult at best to say that financial losses should be balanced against the loss of lives and limbs of workers and people using the highways.").
[27] Significantly, the opinion of the Court in Clover Leaf was written by Justice Brennan, who specifically objected to a balancing approach in the highway safety regulation context. See Kassel, 450 U.S. at 679-87, 101 S.Ct. at 1320-25 (Brennan, J., concurring).
Other cases cited by defendants also predate Clover Leaf, 449 U.S. 456, 101 S.Ct. 715, 66 L.Ed.2d 659 (1981). E.g., Brotherhood, 393 U.S. 129, 140, 89 S.Ct. 323, 328 (refusing to balance financial burden against safety concern, which was matter for legislature); Bibb v. Navajo Freight Lines, 359 U.S. 520, 523-24, 79 S.Ct. 962, 964-65, 3 L.Ed.2d 1003 (1959) (grouping highway regulation with other categories of regulation, but employing balancing test); Proctor & Gamble Co. v. City of Chicago, 509 F.2d 69, 76 (7th Cir.1975) (employing a "compromise between Brotherhood and Pike" in challenge to city ordinance banning phosphate detergents). To the extent that these cases call for a different standard of review, Clover Leaf controls.
While it is possible to piece together language from various opinions to create a syllogistic argument for application here of the most deferential standard of review, see, e.g., Harvey & Harvey, 600 F.Supp. at 1381 n. 16, that effort is unavailing.
[28] See supra note 23.
[29] In Kroeger v. Stahl, 248 F.2d 121 (3d Cir. 1957), the Court of Appeals prior to Pike upheld a zoning regulation that prohibited plaintiff from constructing a radio tower. Language cited by present defendants here dealt with whether the ordinance was an improper exercise of police power. Id. at 123. On the separate Commerce Clause issue, the Court noted that the restrictions "are not directed toward the regulation of commerce" and held that the incidental effects on commerce "are not so repugnant to the right or power to regulate interstate commerce as to constitute an unwarranted invasion." Id. See also supra note 13 regarding use of direct/indirect burden test.
In Al Turi Landfill, Inc. v. Town of Goshen, 556 F.Supp. 231 (S.D.N.Y.1982), aff'd, 697 F.2d 287 (2d Cir.1982), the court upheld local restrictions on landfills after directly quoting the Pike test and finding that the ordinances in question were evenhanded and effectuated a substantial local interest. Defendants also cite Agins v. Tiburon, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980), which is wholly irrelevant to the present issue. See also Pittston Warehouse Corp. v. City of Rochester, 528 F.Supp. 653 (W.D. N.Y.1981) (invalid per se rule applied).
[30] See Dkt. 138 at 43-48. For present purposes, it is enough that the parties disagree as to the cost savings directly attributable to a coal lightering operation. See id. at 45-46. The Court need not decide at this juncture to what extent it can or should look beyond this direct burden to consider defendants' arguments based on the probable price responses of plaintiffs' foreign competitors in the coal market or more general economic variables such as fluctuations in the value of the dollar and oil prices. While these additional factors make the balancing task more cumbersome, the Court is inclined to view at least some of them as relevant to the extent of the burden on commerce. The Court must have some basis for deciding whether the burden is "insubstantial" (as defendants claim) or "tremendous" (as plaintiffs claim). In any event, plaintiffs cannot expect to point to their estimates of increased exports, positive implications for U.S. balance of payments, additional employment, and the like without defendant having the right to contest them.
Defendants' assertion that the Delaware Bay "is not the only viable location for a coal top-off service," Dkt. 138 at 43, is not substantiated and so cannot suffice to create a genuine issue. Plaintiffs allege, and defendants do not dispute, that other sites are uneconomically distant from coal mines and coal ports or are otherwise unsuitable. See Childress Aff. ¶ 22, Ex. H, Dkt. 120A at A315. The dredging of an East Coast port to accommodate supercolliers is recognized as an alternative, but one that is several years off at best. See, e.g., Dowd Aff. ¶ 25 (Dkt. 120A).
The Court also holds, contrary to defendants' contentions, that the prospective nature of the alleged burden does not itself lessen the burden on commerce. Otherwise, plaintiffs would actually have to violate the prohibition in order to test it fully in court. To the extent that it is speculative and uncertain, however, the burden cannot support grant of a summary judgment motion and must be resolved at trial.
[31] The Pike Court's use of the phrase "putative local benefits" does not mean this Court must accept at face value the Delaware legislature's assertion of benefits accruing under the statute. See Kassel, 450 U.S. at 670, 101 S.Ct. at 1316; Cottrell, 424 U.S. at 375-81, 96 S.Ct. at 929-32; Pike, 397 U.S. at 144-45, 90 S.Ct. at 848-49; see also Lewis, 447 U.S. at 37, 100 S.Ct. at 2016 ("The principal focus of inquiry must be the practical operation of the statute, since the validity of state laws must be judged chiefly in terms of their probable effects."). Cf. Kassel, 450 U.S. at 679-87, 101 S.Ct. at 1320-25 (Brennan, J., concurring) (highway safety context); id. at 687-706, 101 S.Ct. at 1324-34 (Rehnquist, J., dissenting) (same). However, if plaintiffs wish to challenge the Delaware General Assembly's goals stated in the CZA as pretextual they "must come forward to show that the claimed benefits are illusory." Harvey & Harvey, 600 F.Supp. at 1380-81; see also Delaware Accessories Trade Ass'n v. Gebelein, 497 F.Supp. 289, 196 (D.Del.1980). In short, deference is due the state's legislative policy benefits, but perhaps not to the high degree urged by defendants.
Defendants concede that summary judgment is unavailable under the Pike test if the Court must look behind the "putative local benefits," Pike, 397 U.S. at 142, 90 S.Ct. at 847, to determine the actual effects of the Delaware CZA. Dkt. 138 at 48.
Further, "[l]ess deference to the legislative judgment is due ... where the local regulation bears disproportionately on out-of-state residents and businesses." Kassel, 450 U.S. at 675-76, 101 S.Ct. at 1318-19.
[32] It may ultimately be critical in this case whether the local interest "could be promoted as well with a lesser impact on interstate activities." Pike, 397 U.S. at 142, 90 S.Ct. at 847. See also Transcontinental, 464 F.2d at 1362 n. 14 ("It is important to emphasize that the Commission is not attempting to require the Transco [liquified natural gas] facility to conform to any specific regulation. Rather it is attempting to prohibit construction altogether."). The Transcontinental court did not appear to give great weight to the Commission's "slippery slope" argument regarding its inability to restrict further construction absent a favorable ruling in that case. See id. at 1363. But see Second Aff. of David S. Hugg, III (Dkt. 123) at ¶ 24 (at least two new proposals for transshipment of coal and other commodities have come to attention of DNREC since redesignation of anchorage in 1983); U.S. Coast Guard Environmental Assessment, No. 16475.3/32-82 (May 1983) (Dkt. 120A at Ex. B to Ex. G) at 1 (expansion of anchorage in 1974 and 1982 to accommodate increasing traffic).
Plaintiffs argue in this regard that the pollution control standards of 7 Del.C.Ann. ch. 60 (1983 & 1984 Supp.), make it unnecessary to apply to plaintiffs the absolute ban of the Delaware CZA. They contend that to the extent the Delaware CZA is concerned with non-environmental factors such as aesthetics or onshore development, "these, too, can be advanced in a fashion other than by an absolute prohibition." Dkt. 120 at 72 n. 34.
The Delaware CZA is viewed as more than a simple anti-pollution statute. In light of the issues in dispute, however, and because the "lesser impact" factor strikes at the heart of legislative decisionmaking, the Court will defer further consideration of this matter. Cf. Baltimore Gas, 760 F.2d at 1427 (inquiry into nondiscriminatory alternatives precluded where the challenged statute does not discriminate).
[33] The CZMA defines the coastal zone as
the coastal waters (including the lands therein and thereunder) and the adjacent shorelands (including the waters therein and thereunder), strongly influenced by each other and in proximity to the shorelines of the several coastal states, and includes islands, transitional and intertidal areas, salt marshes, wetlands, and beaches.... The zone extends inland from the shorelines only to the extent necessary to control shorelands, the uses of which have a direct and significant impact on the coastal waters. Excluded from the coastal zone are lands the use of which is by law subject solely to the discretion of or which is held in trust by the Federal Government, its officers or agents.
16 U.S.C. § 1453(1).
[34] The national policy objectives are contained in 16 U.S.C. § 1452.
[35] The Secretary is authorized to make a number of other grants to the states under the aegis of the CZMA. See id. §§ 1456b, 1456c(b), 1461, 1455a, 1456a.
[36] The Secretary's authority under the CZMA to approve state plans has been delegated to the Assistant Administration for Coastal Zone Management in the National Oceanic and Atmospheric Administration. 15 C.F.R. § 923.2(b) (1985). For convenience, the opinion shall refer only to the Secretary as responsible for approving state plans.
[37] The Secretary must also find the state has held public hearings on the program; the Governor has reviewed and approved the program and has designated a single agency to receive and administer federal coastal-zone grants; the state has the requisite authority and organizational capacity to manage the program; and the program provides procedures for preserving or restoring specific areas. Id. § 1455(c).
[38] See also id. § 1456(a) (requiring approval by the Secretary of the Interior prior to approval by Secretary of Commerce of state coastal management program that may affect land subject to any national land-use program).
[39] The congressional policy directives are specified in 16 U.S.C. § 1452(2)(A) through (I).
[40] Section 1458(d) specifies "[t]he Secretary shall withdraw ... any financial assistance available to th[e] state under this title," indicating this forfeiture is to extend more broadly than simply to the CZMA funding provisions of chapter 33 of title 16, which deals with conservation.
[41] This sanction also applies if the Secretary finds the state is failing to adhere to the terms of any other funding grant under the CZMA. Id. § 1458(d).
[42] The extensive duties the statute imposes on the Secretary and on the States that submit coastal management plans belie plaintiffs' assertion that the CZMA is properly characterized as merely a grant statute. To the extent the CZMA dispenses federal money, it was enacted pursuant to Congress' power under the Spending Clause, U.S. Const. art. 1, § 8, cl. 1. However, Congress may exercise its spending power in combination with its commerce power. See White v. Massachusetts Council of Construction Employers, Inc., 460 U.S. 204, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983).
[43] The Senate Report quoted from the Commission on Marine Science, Engineering and Resources, Our Nation and the Sea 1969:
The uses of valuable coastal areas generate issues of intense State and local interest, but the effectiveness with which the resources of the coastal zone are used and protected often is a matter of national importance. Navigation and military uses of the coasts and waters off-shore clearly are direct Federal responsibilities: economic development, recreation, and conservation interests are shared by the Federal Government and the States.
Rapidly intensifying use of coastal areas already has outrun the capabilities of local governments to plan their orderly development and to resolve conflict. The division of responsibilities among the several levels of government is unclear, and the knowledge and procedures for formulating sound decisions are lacking.
S.Rep. No. 753, reprinted in Legislative History at 195, U.S.Code Cong. & Admin.News 1972, p. 4778.
[44] Plaintiffs argue this statutory passage establishes Congress was not authorizing the States to exercise any new powers over commerce or any other area entrusted to the federal government. Although this reading is facially plausible, it is not supported by the legislative history. As the discussion in the text above reveals, Congress in this passage was affirming that authority over the coastal zone should be centered on the states, as opposed to local governments.
[45] Plaintiffs also look to Granite Rock Co. v. California Coastal Commission, 768 F.2d 1077 (9th Cir.1985), to support their argument that the CZMA does not authorize the States to regulate in a manner otherwise impermissible under the Commerce Clause. Granite Rock is wholly inapposite to the present case, however. At issue was whether the CZMA authorized state regulation pertaining to federal lands. No such issue is present before this Court. Moreover, the Granite Rock court did not use a Commerce Clause analysis but focused on the question of federal preemption using a Supremacy Clause analysis. See Granite Rock at 1080.
[46] Of course, the Secretary's decision to approve or disapprove a state plan is subject to judicial review. See American Petro. Inst. v. Knecht, 609 F.2d 1306 (9th Cir.1979) (per curiam) (using "arbitrary and capricious" standard of review for Secretary's approval of state coastal management plan).
[47] An amicus brief in support of plaintiffs was filed by Senators John W. Warner and Paul S. Trible, Jr., and Representatives Herbert H. Bateman, Frederick C. Boucher, Alan B. Mollohan, Jim Olin, Nick Joe Rahall, II, Norman Sisisky, Harley O. Staggers, Jr., and G. William Whitehurst.
Senators William V. Roth, Jr., and Joseph R. Biden Jr., Representative Thomas R. Carper, and Governor Michael N. Castle filed an amicus brief in support of defendants.
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211 Ga. 335 (1955)
85 S.E.2d 753
FIELDS
v.
THE STATE.
18779.
Supreme Court of Georgia.
Argued November 8, 1954.
Decided January 10, 1955.
Rehearing Denied February 17, 1955.
H. O. Hubert, Jr., Thomas O. Davis, for plaintiff in error.
Roy Leathers, Solicitor-General, Eugene Cook, Attorney-General, W. Harvey Armistead, Rubye G. Jackson, contra.
HAWKINS, Justice.
The plaintiff in error, Jennings Edward Fields, was indicted in DeKalb Superior Court for the murder on February 6, 1954, of James L. Mize, a peace officer of DeKalb County. The record discloses that, on February 6, 1954, the Police Department of DeKalb County received a long-distance telephone call and also a telegram from the Mecklenburg County Police Department, Charlotte, North Carolina, requesting the arrest of the defendant, and that this telegram, reading as follows: "Arrest one Jennings E. Fields first degree burglary felony warrant on file Mecklenburg County Police Dept. Charlotte *336 NC. [Signed] Chief Stanhope Lineberry," was read over radio by the desk sergeant of the DeKalb County Police Department to officers James L. Mize and J. R. Davis shortly before the arrest by them of the defendant on that date. Following the shooting of officer Mize, the escape of the defendant from his automobile, and his later arrest by other police officers, the defendant made a written statement concerning the killing of officer Mize, which was introduced in evidence on the trial, and in which he said: "I was at my house at approximately 5:00 p. m. Saturday, February 6, 1954, when two police officers came there and told me I was wanted by the North Carolina authorities and that I would have to go with them. I went to their car and after getting in I asked them if my wife could follow us to their place, they agreed and one of them returned to my apartment and told my wife that I wanted her to follow us in her car. One of the officers was to drive my Oldsmobile and follow me in the police car, my wife was to follow this one in her Buick. We had just got started good, when I noticed the officer's pistol on his side next to me and while he was driving I grabbed it and he and I began scuffling for it causing him to lose control of the car and run off the road. In the scuffle the gun dropped on the floor of the car and we both grabbed it at the same time and continued scuffling. The gun went off and the officer quit struggling. I don't know how many times the gun went off and I never saw the other officer until I got out of the car to run to mine and noticed him running towards the apartment houses. I ran to my Oldsmobile and saw the keys were not in it, so I ran to my wife's car to get the keys from it, as I knew there was a set on the same ring for my car. I asked my wife to give me the keys and she said `No, no, Jennings,' so I grabbed them from the switch. At no time do I remember pointing the officer's gun at my wife in order to make her give the keys to me." After detailing the wrecking of his automobile, the defendant further stated that he left his car "and took my pistol, a .32 caliber S. & W. revolver, from glove compartment and the officer's pistol with me," and that, just before his arrest by other officers, "I got out on the road and turned towards one of the cars, throwing both of the guns down so they would come and get me and not shoot me. . . I never had any intention of shooting anyone, when I grabbed the pistol from the officer's holster, I wanted only to escape, as I am afraid of police officers. I had done nothing in North Carolina and do not know why the authorities there wanted me." The defendant was convicted of murder without a recommendation, and to the judgment denying his motion for a new trial as amended he excepts. Held:
1. Ground 4 of the amended motion for a new trial excepts to the charge of the court on the law of confessions of guilt, upon the ground that such a charge was not authorized by the evidence. While this court has held many times that it is harmful and prejudicial error to give in charge to the jury in a criminal case the law in reference to confessions of guilt when there is no evidence of a confession of guilt, but only evidence of an admission which might tend to criminate (Dumas v. State, 63 Ga. 600 (5); Covington v. State, 79 Ga. 687, 7 S. E. 153; Fletcher v. State, 90 Ga. 468 (3), 17 S. E. 100; Suddeth v. State, 112 Ga. 407 (1), 37 S. E. 747; Weaver v. State, 135 Ga. 317, 69 S. E. 488; *337 Owens v. State, 156 Ga. 835 (2), 120 S. E. 413; King v. State, 163 Ga. 313 (11), 136 S. E. 154; Clarke v. State, 165 Ga. 326 (6), 140 S. E. 889; Powers v. State, 172 Ga. 1 (30), 157 S. E. 195; Pressley v. State, 201 Ga. 267 (1, 2), 39 S. E. 2d 478; Hobbs v. State, 206 Ga. 94 (1), 55 S. E. 2d 610; Harris v. State, 207 Ga. 287, 61 S. E. 2d 135; Green v. State, 210 Ga. 745, 82 S. E. 2d 703) where, as in this case, the defendant, in the written statement which the jury was authorized to find he freely and voluntarily made, and as quoted in part above, admitted that he attempted to and did rob the police officer of his pistol by force and violence, which is itself a capital felony (Code, Ann., §§ 26-2501 and 26-2502), and that, during the progress of this robbery, the pistol which was held by him was discharged and the officer quit struggling, this was a confession of guilt of the crime of murder, even though in another portion of the statement he said that he had no intention of shooting anyone, for in Ford v. State, 202 Ga. 599 (3) (44 S. E. 2d 263), it is held: "Where the evidence shows, and it is admitted in the defendant's statement, that the homicide occurred by the discharge of a gun held by the accused and used in an attempt to rob the deceased, even if the discharge of the gun was unintentional, the offense is murder; and in no view of such facts does it involve homicide by accident or involuntary manslaughter." See also Russell v. State, 196 Ga. 275 (26 S. E. 2d 528); Solesbee v. State, 204 Ga. 16 (3) (48 S. E. 2d 834). The statement made by the defendant included every act necessary to be proved in order to establish his guilt, and the trial judge did not err in charging the law in reference to confessions of guilt. McCloud v. State, 166 Ga. 436 (2) (143 S. E. 558); Wright v. State, 186 Ga. 863 (1) (199 S. E. 209).
2. While, under Code § 27-207, a lawful arrest without a warrant can be made by an officer only in three instances, (1) if the offense is committed in his presence; or (2) the offender is endeavoring to escape; or (3) if for other cause there is likely to be a failure of justice for want of an officer to issue a warrant the General Assembly by the enactment of the Uniform Criminal Extradition Act (Ga. L. 1951, p. 726; Code, Ann. Supp., § 44-414), made provision for another instance in which an arrest without a warrant might be lawfully made, it being there provided: "The arrest of a person may be lawfully made also by any peace officer. . . without a warrant upon reasonable information that the accused stands charged in the courts of a State with a crime punishable by death or imprisonment for a term exceeding one year." Under the undisputed evidence in this case, the arresting officers, Mize and Davis, had reasonable information at the time of the arrest of the defendant, as outlined above, that he stood charged in the State of North Carolina with a felony punishable by death or imprisonment for a term exceeding one year. It was, therefore, not error for the trial judge to charge the jury, as complained of in ground 5 of the amended motion for a new trial: "If you believe that officer Mize and officer Davis had reasonable information that this defendant had committed a series of offenses in this State of North Carolina that carried the penalty of death or was a felony that was punishable by not less than one year in the penitentiary, and you believe they acted on that information, then I charge you that they had a right to make the arrest. *338 In this connection the State alleges and contends that they did have this information and they contend further that the defendant never made any objections to the arrest at all, and that he volunteered to come to Decatur with the officers."
3. It was not error, as contended in ground 6 of the amended motion for a new trail, for the judge to instruct the jury in effect that the evidence with reference to the warrants and charges against the defendant in Mecklenburg County, North Carolina, was not before them for the purpose of showing that the defendant is guilty of the offenses charged there, but that the jury might consider this evidence insofar as it might throw light upon the question as to whether or not he knew he was charged with that crime, and whether or not he believed and had cause to believe, when the officers informed him he was wanted in North Carolina and requested him to accompany them to police headquarters, that the deceased officer Mize was making an arrest.
4. Having held that, under the undisputed evidence in this case, the arrest of the defendant by the officer without a warrant was lawful, the charge complained of in ground 7 of the motion for a new trial, which instructed the jury that, if there is no warrant obtained by an officer, and he makes an arrest, the defendant has a right to resist the illegal arrest with such force as is necessary, even if contradictory and confusing, was not harmful to the defendant, since it gave him the benefit of a defense to which he was not entitled under the law.
5. The offense of voluntary manslaughter as related to mutual combat or mutual intention to fight was not involved under the evidence in this case, and the trial judge did not err in failing to instruct the jury with reference thereto, as complained of in ground 8 of the amended motion for a new trial.
6. The evidence amply authorized the verdict, and the trial judge did not err in denying the motion for a new trial.
Judgment affirmed. All the Justices concur, except Duckworth, C. J., Wyatt, P. J., and Mobley, J., who dissent.
DUCKWORTH, Chief Justice, dissenting.
If the verdict of guilty had been rendered without errors of law having been committed during the trial preceding that verdict, I would be the first to affirm the conviction. But to me no higher or more solemn duty rests upon this court than that of seeing that executions of persons come only after a conviction of a crime for which that penalty is provided by law, after a trial free from errors of law. The evidence of guilt of a cold-blooded murder is abundant in *339 this record. But the trial judge erroneously charged on the law of confession, when, as a matter of law, there was no confession in this case. The proven statement of the accused is extremely incriminating and might have contributed materially to the conviction and properly so, yet it is not a confession. It does not admit the material allegations of the indictment which is essential to a confession. It neither admits shooting the deceased, nor that he was killed thereby. Let the State take life when the law so provides, but by all means let it do so in strict accord with the law.
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120 Pa. Commonwealth Ct. 610 (1988)
549 A.2d 1014
Fraternal Order of Police, Lodge No. 5, and Carmen Christy and Augustine Pescatore and Leonard Garris, Appellants
v.
City of Philadelphia, Appellee.
No. 476 C.D. 1987.
Commonwealth Court of Pennsylvania.
Submitted on briefs June 16, 1988.
October 31, 1988.
*611 Submitted on briefs June 16, 1988, before Judges BARRY, PALLADINO and McGINLEY, sitting as a panel of three.
Anthony J. Molloy, Jr., Mozenter, Molloy & Durst, for appellants.
Ralph J. Teti, Chief Deputy City Solicitor, for appellee.
OPINION BY JUDGE PALLADINO, October 31, 1988:
The Fraternal Order of Police, Lodge No. 5 (FOP) and Carmen Christy, Augustine Pescatore, and Leonard Garris (Grievants) appeal an order of the Court of Common Pleas of Philadelphia County (trial court) denying *612 their appeal from a decision of an arbitrator in favor of the City of Philadelphia (City). We affirm.
Grievants were employed as police officers by the City. On July 20, 1984, Grievants were advised by the City that they were the subjects of a criminal investigation and were suspended pending dismissal. The City subsequently formally dismissed Grievants, with such dismissal retroactive to July 20, 1984. The City dismissed Grievants because, during a federal criminal trial involving fifteen other police officers employed by the City, Grievants were identified as participants in a police bribery and corruption scheme.[1] Grievants were not named as defendants in the federal action. However, two government witnesses, testifying under a grant of immunity, stated that Grievants, along with the named defendants, had accepted bribes from certain vice figures in exchange for protection from enforcement of gambling and liquor laws.[2]
Grievants filed grievances pursuant to the provisions of the collective bargaining agreement to which FOP and the City were parties, asserting that their dismissals had not been for just cause.[3] The City's Police Commissioner denied the grievances at the initial stage and the matter was submitted to arbitration. At the hearings *613 held before the arbitrator, the City presented the testimony of the two witnesses from the federal trial who testified as to Grievants' involvement in the bribery scheme.[4] Based upon the evidence presented, the arbitrator determined that the City had established just cause for dismissing Grievants. Grievants and FOP then petitioned the trial court to vacate the award of the arbitrator. By order dated January 22, 1987, the trial court confirmed the arbitrator's award.
On appeal to this court, FOP and Grievants contend that the arbitrator erred in failing to sustain the grievances, alleging that the City dismissed Grievants solely on the basis of hearsay testimony and that the City did not follow its own operating procedures in determining whether to dismiss Grievants. FOP and Grievants also argue that the arbitrator included in his decision factual matters beyond the scope of the grievances submitted.
Our scope of review of an Act 111[5] arbitration award is in the nature of narrow certiorari. Thus, we are limited to reviewing the jurisdiction of the arbitrator, the regularity of the proceedings, constitutional questions, and excesses in the exercise of the arbitrator's powers. Appeal of Upper Providence Township, 514 Pa. 501, 526 A.2d 315 (1987); City of Carbondale v. Fraternal Order of Police Lodge 63, 109 Pa. Commonwealth Ct. 325, 531 A. 2d 76 (1987). An error of law which does not so exceed the powers and authority of the arbitrator (such as a misinterpretation or misapplication of law affecting a term or condition of employment that did not require the doing of a prohibited act by the employer) is not alone grounds for reversal of an Act 111 arbitration award. Appeal of Upper Providence Township.
*614 FOP and Grievants first argue that the City improperly dismissed Grievants on the basis of hearsay testimony. Specifically, FOP and Grievants contend that there was no competent evidence which could support a "just cause" dismissal on July 20, 1984. FOP and Grievants argue that, as of that date, the City's evidence consisted solely of the uncorroborated hearsay testimony of the two witnesses at the federal trial to which Grievants and the City were not parties. Although FOP and Grievants do not argue that the testimony of the witnesses taken before the arbitrator constituted hearsay, they allege that the arbitrator should have sustained the grievances because the City improperly relied on hearsay testimony.
The arbitrator in this case concluded that the City had met its burden of proof to establish just cause for the dismissal of Grievants. Arbitrator's Award at 9. Whether the arbitrator should have evaluated the City's evidence as it existed on July 20, 1984, rather than as it existed at the later hearings before the arbitrator, amounts to, at most, a mere error of law and is not grounds for reversal. Appeal of Upper Providence Township. So long as the arbitrator's award draws its essence from the terms of the collective bargaining agreement, this court should end its inquiry and should not intrude upon the domain of the arbitrator simply because it believes that the arbitrator's interpretation might be "wrong." Allegheny County Police Association v. Allegheny County, 100 Pa. Commonwealth Ct. 327, 514 A.2d 964 (1986), appeal dismissed as improvidently granted, 516 Pa. 17, 531 A.2d 1108 (1987).
FOP and Grievants also contend that the City failed to follow its own procedures in deciding whether to terminate Grievants and, therefore, treated Grievants unfairly. FOP and Grievants assert that in other cases in which City police officers were suspected of wrongdoing *615 and implicated through testimony during the course of judicial proceedings, the City conducted independent investigations before imposing any discipline. Grievants and FOP argue that in this case, the City did not conduct such an investigation, but merely relied on the testimony given under oath in federal court.
The arbitrator found that in those prior cases where the City had made independent investigations, the witnesses to the alleged wrongdoing were not former or current police officers. Further, the arbitrator noted that the reason the City conducted investigations in past cases was its perception that the in-court testimony was weak and unreliable. The arbitrator noted that the testimony upon which the City relied in this case was extremely strong. The arbitrator also found that the testimony in the instant case was given by former police officers who were acquainted with Grievants and who were therefore less likely to be mistaken in their identification of Grievants as recipients of bribes. Arbitrator's Award at 6-8.
Concluding that the factual circumstances in this case were sufficiently distinguishable from those in prior cases, the arbitrator determined that the City's failure to conduct its own investigation before dismissing Grievants did not demonstrate unfair or disparate treatment. Again, once the arbitrator has resolved a question presented by the evidence, this court will not disturb the arbitrator's award simply because it might believe that the arbitrator's interpretation is wrong. Allegheny County Police Association.
Finally, FOP and Grievants contend that the arbitrator erroneously included in his award factual matters beyond the scope of the grievances submitted. FOP and Grievants argue that the arbitrator improperly considered the issue of pre-termination due process and based his credibility determinations upon Grievants' failure to *616 respond to the charges contained in the formal notices of intention to dismiss.[6]
However, a review of the arbitrator's decision indicates that the arbitrator discussed Grievants' failure to make any statements to the City in order to rebut the charges against them only in his evaluation of the extent to which the City was obligated to conduct an independent investigation. In assessing the merits of the grievances, the arbitrator did not base his "just cause" determination on Grievants' assertion of their privilege against self-incrimination, but stated that the City had met its burden of proving "just cause" through the credible testimony of its two witnesses. Thus, after careful examination of the arbitrator's award, we cannot conclude that the arbitrator so exceeded the scope of the grievances submitted or the authority granted to him as to warrant reversal in this matter. See Appeal of Upper Providence Township and Washington Arbitration Case, 436 Pa. 168, 259 A.2d 437 (1969).
Accordingly, we affirm.
ORDER
AND NOW, October 31, 1988, the order of the Court of Common Pleas of Philadelphia County in the above-captioned matter is affirmed.
Judge MacPHAIL did not participate in the decision in this case.
NOTES
[1] In the dismissal notices issued by the City, Grievants were charged with accepting bribes, failing to report bribes, knowingly fraternizing with criminals, conduct unbecoming an officer, failure to comply with orders/directives/regulations, failure to take police action, and soliciting money.
[2] The testimony was presented to the United States District Court for the Eastern District of Pennsylvania in United States v. Martin (Criminal No. 84-106, filed January 9, 1987).
[3] The collective bargaining agreement between the parties and section 7-303 of the Philadelphia Home Rule Charter, 351 Pa. Code §7.7-303, which is incorporated into the collective bargaining agreement, provide that "just cause" is the standard by which the propriety of a dismissal is to be determined.
[4] The two witnesses were former police officers, Joseph Alvaro and Albert Ricci. Both Alvaro and Ricci had served along with Grievants on the Vice Squad in the City's Northwest Division.
[5] Act of June 24, 1968, P.L. 237, 43 P.S. §§217.1-217.10.
[6] FOP and Grievants contend that the City agreed that pre-deprivation due process was not an issue before the arbitrator because Grievants had instituted a civil rights action in the United States District Court for the Eastern District of Pennsylvania at Gniotek v. City of Philadelphia, 630 F. Supp. 827 (E.D. Pa. 1986), which was pending at the time of the arbitration hearings.
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138 Ga. App. 239 (1976)
225 S.E.2d 719
KEITH
v.
THE STATE.
51879.
Court of Appeals of Georgia.
Submitted March 2, 1976.
Decided March 15, 1976.
Rehearing Denied March 25, 1976.
T. Michael Chambers, for appellant.
Samuel J. Brantley, District Attorney, Dean B. Donehoo, Assistant District Attorney, for appellee.
DEEN, Presiding Judge.
1. Police officers, having been called to the scene, entered a church at about 1:30 a. m. The defendant and his brother attempted to conceal themselves within the church but were located and arrested. There was evidence of entry through a kitchen window. Four boxes containing kitchen equipment, a stereo set, radio speaker and miscellaneous items from the recreational cabinets and office were found assembled in boxes in another room, although they had been in place the previous evening when the church was closed. The evidence is sufficient to sustain the conviction of the defendant, who was jointly indicted with his brother but elected to be tried separately. Young v. State, 131 Ga. App. 553 (1) (206 SE2d 536).
2. The court charged fully on the issue of intent; however, the defendant complains that a request to charge further was not given. The request contained language that if the defendant had no intent to commit a felony or theft "or that he formed that intent only after he was inside the building" they must acquit. Code § 26-1601 does not limit criminal intent to time of entry: if he "enters or remains within ... any room or any part thereof" with such intent, he is also guilty. The request was under these circumstances properly refused. "For refusal to charge a requested instruction to be error the request must be *240 correct as an abstract principle of law and adjusted to the evidence." Wells v. Metropolitan Life Ins. Co., 107 Ga. App. 826 (6) (131 SE2d 634).
3. There was additional testimony that the defendant and his brother were discovered inside the church due to the fact that the building was connected by an open intercom with the manse; that the minister was awakened by a loud noise through the intercom (other testimony showed that a screen was knocked from the kitchen window to the floor); that he heard nothing for some 20 or 30 minutes, but then heard two voices in conversation from within the church and caught such phrases as: "What is this contraption here? Wonder what this is? Take this and put it in the box." Under these circumstances it was not error to refuse a request to instruct the jury that mere presence at the scene of a crime is not sufficient to support a conviction, although the defendant contended that his brother had entered the church alone, that he had gone in simply to find out what the latter was doing, and that he had no intent to steal. The question is not one of conflicting evidence, but of what was going on in the defendant's mind, which the jury could arrive at only as an inference from all the evidence. The charge as a whole was full and fair; under the instructions given, had the jury believed the defendant's explanation they must necessarily have acquitted him. The refusal to charge on "mere presence" was not error in view of the charge as a whole. Craft v. State, 124 Ga. App. 57 (2) (183 SE2d 371). The case differs from Greeson v. State, 90 Ga. App. 57, 59 (81 SE2d 839), where presence alone is relied on and where there was other evidence that, even if present, the defendant was physically incapable of forming a criminal intent.
Judgment affirmed. Quillian and Webb, JJ., concur.
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632 F. Supp. 1098 (1986)
Amelia RIIS, Plaintiff,
v.
MANUFACTURERS HANOVER TRUST COMPANY, Defendant.
No. 85 Civ. 3962 (RWS).
United States District Court, S.D. New York.
March 31, 1986.
As Amended April 21, 1986.
*1099 H. Chester Grant, New York City, for plaintiff.
Patterson, Belknap, Webb & Tyler, New York City, for plaintiff; David F. Dobbins, Dietrich L. Snell, of counsel.
Robert M. Rosenblith, New York City, for defendant; Manuel W. Gottlieb, Larry S. Candido, of counsel.
OPINION
SWEET, District Judge.
Defendant Manufacturers Hanover Trust Company ("MHT") has moved for an order dismissing plaintiff Amelia Riis' ("Riis") amended complaint pursuant to Rule 12(b)(6) and Rule 56, Fed.R.Civ.P., for failure to state a claim upon which relief can be granted, pursuant to Rule 9(b), Fed.R. Civ.P. for failure to assert fraud with particularity, *1100 and for sanctions pursuant to Rule 11.[1] As MHT's challenge to Riis' complaint is supported by material outside the pleadings, and both parties have submitted voluminous supplementary affidavits and exhibits, this motion will be treated as one for summary judgment. MHT's motion for summary judgment is granted because Riis' claims are barred by the applicable statute of limitations.
Facts
This action concerns a financing in which MHT and a Norwegian bank, Den norske Creditbank ("DnC") obtained a mortgage on a vessel owned by a group of Norwegian shipping companies as collateral for an outstanding loan which MHT and DnC had extended to the companies. The chronology of this transaction is central to the statute of limitations bar to the claim.
In 1973, MHT and co-lender DnC made a $32 million dollar loan to a group of Norwegian shipping companies known as the Olsen-Ugelstad companies (collectively "O-U"), one of which is a company called A/S Falkefjell which held title to the bulk ship M/S Sognefjell. Riis, the daughter of the founder of O-U and holder of a significant percentage of O-U stock, entered into an agreement on April 5, 1974 (the "Easter Agreement") with A/S Falkefjell and its principals under which Falkefjell agreed to transfer the M/S Sognefjell to Riis in exchange for all of her shares in O-U. A/S Falkefjell never delivered the ship because it failed to obtain the required export license needed to deliver the ship as provided in the Easter Agreement, and this delay thwarted Riis' pre-arranged sale of the ship to the government of India for $12 million dollars.
In July of 1974, Riis commenced arbitration proceedings against O-U for damages and delivery of the ship, and on March 18, 1975, the parties concluded their presentation of evidence to the arbitration panel. While the parties awaited the decision of the arbitration board, O-U issued an $8 million dollar mortgage on the M/S Sognefjell jointly in trust to Ole Lund ("Lund"), an O-U officer, and Christian Haneborg (a Norwegian lawyer and independent advisor for MHT and DnC) "for the benefit of all creditors" in an attempt to preserve the asset for the creditors of O-U. On April 26, 1975, Haneborg issued a receipt for the mortgage which acknowledged the pendency of the arbitration proceeding and provided that the mortgage would be "redelivered" to O-U if Riis did not prevail in the arbitration. Also on April 26, 1975, Haneborg sent a letter to MHT and DnC which referred to the mortgage on the ship and confirmed that the mortgage had been obtained to prevent the possible depletion of assets in the O-U companies by a revitalization of the Easter Agreement or the transfer of ship title to Riis. The negotiations and decisions concerning this mortgage were memorialized by Erling Naper ("Naper") a DnC bank officer (the "Naper Memorandum").
On May 2, 1975, the arbitration board announced its decision to dissolve the Easter Agreement. The ship, therefore, remained an asset of the O-U companies and on June 13, 1975, Lund and Haneborg transferred the mortgage to DnC, and the ship was subsequently sold. Subsequently the Court of Appeals vacated the arbitration board's decision to dissolve the Easter Agreement because O-U had concealed its insolvency from the arbitration panel. The Norwegian Supreme Court reversed this determination in 1983, forcing Riis to relitigate her rights under the Easter Agreement from the beginning.
In June, 1981, Riis commenced an action against DnC in connection with DnC's involvement in obtaining the ship mortgage. As part of this action against DnC in the Oslo Municipal Court, Riis obtained deposition testimony from DnC and officers and documentation of the mortgage transaction, which she presented to the Court in her December 6, 1982 pleadings. They included, *1101 inter alia, the depositions of Haneborg, Naper and John Melander ("Melander"), the managing director of DnC, taken by Riis' counsel Engelschion, and a letter which Melander had written to DnC on April 10, 1980 outlining the purpose in obtaining the mortgage. Riis also submitted the mortgage receipt and Haneborg's April 26, 1975 letter to DnC and MHT. DnC submitted a defense brief on January 4, 1983.
In September, 1983, Einar Riis, husband of Amelia Riis, conferred with MHT officers in Oslo and New York. According to Einar Riis, the MHT officers denied any involvement with obtaining the mortgage and placed all responsibility on DnC. Finally, in December, 1983, DnC produced the Naper Memorandum or Naper's contemporaneous notes of the negotiations surrounding the 1975 mortgage of the ship.
Discussion
Riis' amended complaint sets forth two claims arising from this complex chronology of events. First, Riis claims that MHT's acts in obtaining the ship mortgage in 1975 were fraudulent because it knew that: (1) O-U was insolvent during that time, (2) the arbitration panel would not have rescinded the Easter Agreement had it known of the insolvency; and (3) that the "secret" obtaining of this mortgage during the pendency of the arbitration would strip Riis of her equitable title to the vessel. Riis claims that MHT made a "deliberate and false representation that the shipowner was solvent at the time of the conveyance," (Riis' Memorandum in Opposition, p. 12) upon which she and the arbitration panel relied in rescinding the agreement.
Riis' second claim is one of "fraudulent concealment."[2] She contends that MHT's alleged act of concealing the mortgage on the vessel by registering it in the name of Lund and Haneborg and MHT's subsequent denial of knowledge of the facts underlying the mortgage constitute a fraudulent scheme to conceal its "appropriation" of the ship. The complaint alleges that MHT concealed its involvement and knowledge of the mortgage from Einar Riis and thwarted Riis' investigation of the loss of the ship. According to Riis, she was unaware of the extent of MHT's knowledge and participation in the mortgage until she obtained the Naper Memorandum in December, 1983, and only then could she allege that MHT knew that she was mistakenly relying on O-U's solvency in the arbitration.
MHT contends that Riis has not satisfied the pleading requirements for fraud and fraudulent concealment under New York law, as her claim is both substantively defective and is barred by the statute of limitations. According to MHT, the face of Riis' amended complaint illustrates that she has long had the knowledge necessary to assert this claim; knowledge of the alleged fraudulent mortgage, knowledge of MHT's involvement in securing that mortgage and knowledge of MHT's purpose and intent (the "fraudulent intent") in obtaining the mortgage. Indeed, MHT claims that Riis' own pleadings submitted in the Norwegian action against DnC in 1982, and the depositions which Riis' own attorney took of DnC officers and MHT's agent Haneborg, demonstrate that she has been sleeping on her rights while the statute of limitations has run on her claims.
MHT contends that Riis inserted a fraudulent concealment claim in the amended *1102 complaint to meet MHT's statute of limitations defenses. According to MHT, this defense is insufficient to toll the statute of limitations because Riis knew all the facts which she now alleges were concealed from her, and it fails to state an affirmative cause of action as a matter of New York law.
Statute of Limitations
MHT has asserted the statute of limitations as a threshold bar to the maintenance of this action. According to MHT, the statute of limitations has run on both the fraud and fraudulent concealment claims because Riis' amended complaint and her pleadings in the Norway action demonstrate that she knew all that was required to timely assert a fraud claim and the objectively assessed state of her knowledge of MHT's involvement and intent surrounding the obtaining of mortgage belies any claim that these facts were successfully concealed from her.
The New York statute of limitations for fraud is applicable to this diversity action, see Guaranty Trust Company of New York v. York, 326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079 (1945), and provides in relevant part:
The following actions must be commenced within six years:
8. an action based upon fraud; the time within which the action must be commenced shall be computed from the time the plaintiff or the person under whom he claims discovered the fraud, or could with reasonable diligence have discovered it.
Civil Practice Law and Rules ("CPLR") 213(8) (McKinney Supp.1984).
This six year limitation on fraud actions is supplemented by a provision which grants a two-year grace period in fraud actions computed from the time of reasonable discovery:
[W]here the time within which an action must be commenced is computed from the time when facts were discovered could with reasonable diligence have been discovered, or from either of such times, the action must be commenced within two years after such actual or imputed discovery or within the period otherwise provided, computed from the time the cause of action accrued, whichever is longer.
CPLR 203(f) (McKinney Supp.1984).
These two sections combine to permit a claimant to bring a fraud action within "six years from commission on the fraud or two years from discovery, whichever is longer." Triangle Underwriters, Inc. v. Honeywell, Inc., 604 F.2d 737, 746 (2d Cir. 1979); citing Hoff Research & Development Laboratories, Inc. v. Phillipine National Bank, 426 F.2d 1023 (2d Cir.1970) (footnote omitted).
There is no dispute that the alleged fraud in obtaining the ship mortgage occurred in April, 1975, far outside the six year statute of limitations for commission of the fraud. Riis claims, however, that although she knew the mortgage was obtained in 1975, she was unaware of MHT's fraudulent "intent" in obtaining the mortgage until after September, 1983, when the Naper Memorandum was produced. Only then, according to Riis, was she able to assert that MHT fraudulentlyi.e. with knowledge of Riis alleged equitable title to the ship and with knowledge of O-U's impending insolvency participated in obtaining the mortgage. Therefore, the two year period from discovery began in September, 1983 and had not run by the time Riis commenced this action in May, 1985.
Riis' argument runs into difficulty, however, because her submissions in this and prior actions demonstrate that she possessed enough knowledge by at least 1982 and probably earlier, to formulate this fraud claim, and is chargeable with that knowledge under the relevant case authority.
New York law provides an objective standard for determining when a potential claimant has enough information upon which to base a claim of fraud. All that is needed to commence the running of the statute is "knowledge of facts sufficient `to suggest to a person of ordinary intelligence the probability that he has been defrauded'." *1103 Renz v. Beeman, 589 F.2d 735, 751 (2d Cir.1978), cert. denied, 444 U.S. 834, 100 S. Ct. 65, 62 L. Ed. 2d 43 (1979) (citations omitted). When the victim of the alleged frauds knows sufficient facts from which the inference of fraud flows, the statute of limitations begins to run. Klein v. Bower, 421 F.2d 338, 343-44 (2d Cir.1970); Ectore Realty Co., Inc. v. Manufacturers Trust Co., 250 A.D. 314, 294 N.Y.S. 96, 100 (1st Dep't 1937); Sielcken-Schwarz v. American Factors, 265 N.Y. 239, 246, 192 N.E. 307 (N.Y.1934).
Riis' pleadings in this action and her submissions in the Norwegian actions against DnC and O-U show that she not only should have discovered MHT's alleged fraudulent intent but also that she in all probability actually knew of these facts in 1982. Riis admits in her amended complaint that she "discovered in the summer of 1980 that MHT secretly obtained the mortgage in April 1975 on the M/S Sognefjell and asserted this act as another basis for voiding the arbitration award. At this time, however, Riis was unaware that MHT had obtained the mortgage fraudulently, i.e. with actual knowledge of Riis' equitable title to the M/S Sognefjell" (Amended Complaint ¶ 15). While Riis places heavy emphasis on the distinction between her knowledge in 1980 that the mortgage was obtained "secretly" (i.e. in trust "for the benefit of all creditors" in the name of Lund and Haneborg) as opposed to her knowledge in 1983 that it was obtained "fraudulently" (i.e. with knowledge of Riis' equitable claim to ownership), such incremental increased knowledge of the allegedly fraudulent scheme did not prevent the statute of limitations from running. Sielcken-Schwarz v. American Factors, supra, 265 N.Y. at 246, 192 N.E. 307 ("[a] new cause of action for fraud does not accrue each time a plaintiff discovers new elements of fraud in a transaction or new evidence to prove such fraud ... Failure to discover all the details [does] not prevent the statute from running") (citations omitted).
Knowledge of MHT's "secret" mortgage charged Riis with a duty to investigate the extent of MHT's involvement and knowledge in the mortgaging scheme. Furthermore, Riis' assertion that she could not assert a fraud claim without evidence of MHT's "fraudulent intent" is not grounded in New York law, as the claimant is not required to plead evidence of the subjective motivation of the party allegedly committing the fraud. See Rooney Pace, Inc. v. Reid, 605 F. Supp. 158, 162 (S.D.N.Y.1985) (while some factual basis is required under Rule 9(b), the subjective elements of defendant's knowledge and intent do not have to be pled with "great specificity"); Dannenberg v. Dorison, 603 F. Supp. 1238, 1241 (S.D.N.Y.1985) (plaintiff need only plead facts from which the court may reasonably infer fraudulent intent). Riis could have asserted this fraud claim as early as 1980 when she learned of MHT's involvement and motive to secure its loan.
There is also evidence that Riis was fully aware in 1982 that MHT both knew of her equitable claim to the ship and of O-U's precarious financial position and participated in all of the mortgage negotiations when it obtained the mortgage as additional security for its outstanding loans to O-U. The deposition testimony taken by Riis' attorney and the documents which Riis submitted in her 1981 Norwegian action against DnC explicitly detail MHT's involvement in the mortgage negotiations, and MHT's desire to protect itself against any equitable interest which Riis might obtain as a result of the arbitration. For example, Riis' December 6, 1982 pleading asserted that Lund and Haneborg (legal advisor to DnC and MHT) held a mortgage on the ship and issued a receipt on April 26, 1975 for the mortgage which provided in part:
"A/S Falkefjell has further expressed that the issuance is subject to redelivery of the Mortgage, in case the arbitration concludes that the agreement of April 5, 1974 regarding M/S Sognefjell, inter alia, between A/S Falkefjell and Kristoffer Olsen on the one side, and Amelia and *1104 Einar Riis on the other side, is considered null and void.
The receipt thus acknowledges the purpose of obtaining the mortgage, i.e., to prevent an arbitration award favorable to Riis from draining equity from O-U. A similar recital of this "fraudulent" purpose was seen in the April 10, 1980 letter from Melander to the Board of Directors of DnC and was attached to Riis' December 6, 1982 pleadings.
Riis contends that the fact that these letters and receipts did not refer to MHT's involvement in the pre-mortgage negotiations left her unaware of MHT's role in the alleged fraud and unaware of how much MHT knew regarding O-U's financial situation. However, the depositions taken by her own counsel, in some instances in her presence, and submitted to the Norwegian court in December, 1982 reveal that DnC and MHT officers and agents testified that MHT was involved from the beginning and had as much knowledge as DnC and O-U of Riis' pending arbitration claim to the ship. For example, the Haneborg deposition in 1982 demonstrated that MHT was concerned about O-U's financial health and secured the mortgage in response to this deterioration:
Engelschion: If I may stop you for a moment and ask you this: Did the banks consider the Reksten situation, call it the breach of the charter party, as serious? Haneborg: It is, of course, a serious weakness of the security position when the charter party payments stop at a time when the shipping market is falling and difficult, so the banks did regard it as a serious matter.
(Candido Statement, Exhibit F, pp. 10-11). DnC's defense brief, dated January 4, 1983, spelled out the banks concern for its loans to O-U. "[T]he bank was worried in view of the failing security in the form of failing hire income and the reduced value of the ship, and the shipping company's financial situation in general. Mantrust[3] DnC embarked on discussions with the company as to what measures had to be taken" (Candido Statement, Exhibit G, pp. 2-3).
Deposition testimony which Riis submitted in the Norwegian action also casts doubt on Riis' claims that she did not know of MHT's participation in securing the mortgage until DnC produced the Naper Memorandum in September, 1983. First, both the mortgage receipt and Haneborg's letter of April 26, 1975 to MHT and DnC portray MHT as the moving force behind the obtaining of additional security for the loan. DnC's January 4, 1983 defense brief consistently referred to the "banks" efforts in preventing a draining of O-U's resources, and reiterated the participation of Haneborg and his role as independent legal advisor for MHT and DnC. (Candido Statement Exhibit G).
Finally, the deposition testimony of DnC's bank officers made the state of MHT's knowledge (or "fraudulent intent") perfectly clear. Melander, in his October, 1982 response to Engelschion's questions about the Easter Agreement, responded:
[I] was led to believe that there was a possibility that the owners of the shipping company might take measures, which might weaken the stock company's debt situationor its solidity in relationship to their creditors, and therefore we had to be careful. And the purpose here was not exactly that DnC in our own behalf or that of Mantrust and the other banks who gradually had become involved in this loan, should have a priority, but that this was to be prevented to the advantage of the company, as security for all the creditors who might possibly have a claim.
(Dobbins Aff.Exhibit C pp. 14-15).
Similarly, if as Riis contends, the release of the Naper Memorandum in December, 1983 was the "smoking gun," it had been fired over one-year previously in Riis' own deposition of Erling Naper in October, 1982:
*1105 Engelschion: Were you personally in direct contact with anybody in the shipping company regarding this matter? [the Easter Agreement arbitration]
Naper: It is difficult to remember exactly who had contact with whom. We discussed it, I discussed it with, amongst others, the Mantrust representatives in Oslo, who also participated in all previous discussions on the matter.
(Candido Reply Statement, Exhibit C, pp. 16-18, emphasis added).
At the same time, Naper confirmed MHT's role in making the decision to secure the mortgage:
Naper: [I] would again like to emphasize that we were agents for a loan of which the most significant part was a Mantrust loan. During all the negotiations, representatives of Mantrust were present and the bank management was, of course, kept informed and up to date.
(Candido Reply Statement, Exhibit C, pp. 18-20).
Viewed against this factual backdrop, Riis' claim of "fraudulent concealment" a claim that MHT should be equitably estopped from asserting the statute of limitations because of its subsequent efforts to conceal its alleged fraudcannot toll the statute of limitations. While a defendant who makes fraudulent statements in an attempt to conceal facts essential to the plaintiff's cause of action should be equitably estopped from invoking the statute of limitations in his favor,[4]Simcuski v. Saeli, 44 N.Y.2d 442, 406 N.Y.S.2d 259, 377 N.E.2d 713 (N.Y.1978); General Stencils, Inc. v. Chiappa, 18 N.Y.2d 125, 272 N.Y.S.2d 337, 340, 219 N.E.2d 169, 171 (N.Y.1966), MHT's denials of what Riis already had submitted as evidence in the Norwegian action did not prevent her from asserting a timely fraud claim against MHT. At best, Riis' fraudulent concealment claim is redundant, as it charges that MHT effectively concealed from Riis what she already knew or should have known about the mortgage. See Renz v. Beeman, supra, 589 F.2d at 751, citing Augustien v. Levey, 3 A.D.2d 595, 162 N.Y.S.2d 269, 273 (1st Dep't 1957), aff'd, 4 N.Y.2d 791, 173 N.Y.S.2d 27, 149 N.E.2d 528 (N.Y.1958) (when plaintiffs possess timely knowledge sufficient to place them under a duty to make inquiry and ascertain all the relevant facts, courts should not view with favor a claim of equitable estoppel grounded in fraud).
Riis also asserts that her claim of "fraudulent concealment" states a substantive cause of action in addition to tolling the statute of limitations on the underlying fraud claim. Riis bases this claim on MHT's alleged refusal to discuss "the particulars surrounding the manner in which MHT had obtained the mortgage on the M/S Sognefjell in April, 1975" during Einar Riis' visit to the MHT offices in September, 1983. (Amended Complaint ¶ 16). This "fraudulent concealment" fails to state a claim under New York law, however, as Riis has not alleged a relationship between MHT and Riis which would support a duty to disclose, and has not alleged Riis' reliance on any non-disclosure of a material fact. See Leasing Service Corporation v. Broetje, 545 F. Supp. 362, 366 (S.D.N.Y. 1982); Fidenas AG v. Honeywell, Inc., 501 F. Supp. 1029, 1039 (S.D.N.Y.1980). To the extent that Riis relies on MHT's alleged denials of its involvement ("secrecy") in securing the ship mortgage as the affirmative misrepresentation required for fraudulent concealment, it is barred by the previous statute of limitations analysis. To the extent that it rests on MHT's failure to discuss the details of the mortgage negotiations with Einar Riis in September, 1983, it fails to specify the source of MHT's duty to disclose, and the material facts being withheld or any reliance by Riis on those 1983 "misrepresentations." Under New York *1106 law, the silence of a defendant, unaccompanied by some act or conduct to deceive the plaintiff, is not actionable fraud in absence of a confidential or fiduciary relationship. Moser v. Spizzirro, 31 A.D.2d 537, 295 N.Y.S.2d 188 (2d Dept.1968), aff'd, 25 N.Y.2d 941, 305 N.Y.S. at 153, 252 N.E.2d 632 (N.Y.1969); Simcuski v. Saeli, supra, 406 N.Y.S.2d 265, 377 N.E.2d 718, (nondisclosure of malpractice standing alone may provide a foundation for equitable estoppel but will not serve as the basis for a distinct cause of action in fraud). Fraudulent concealment requires knowledge, a relationship between the parties that creates a duty to disclose, and an intent to deceive and defraud by that nondisclosure. Fidenas AG v. Honeywell, Inc., supra, 501 F.Supp. at 1039.
As Riis' claims of fraud and fraudulent concealment are barred by the statute of limitations, it is not necessary to reach MHT's assertions that they fail to state a claim under Rule 12(b), Fed.R.Civ.P., and that the amended complaint fails to plead fraud with the particularity required under Rule 9(b), Fed.R.Civ.P. Riis is also not entitled to conduct further discovery on the fraudulent "coverup" of September, 1983 whose facts cannot state a claim under New York law.
Sanctions
According to MHT, the fact that Riis' claims are barred by the statute of limitations should have been obvious to Riis' counsel had they undertaken the "reasonable inquiry" mandated by Rule 11, Fed.R. Civ.P., and MHT claims that it is therefore entitled to sanctions in the form of attorney's fees and costs. See Eastway Const. Corp. v. City of New York. 762 F.2d 243, 253-54 (2d Cir.1985) (where it is patently clear that a claim has absolutely no chance of success under existing precedents and where no reasonable argument can be advanced to extend, modify or reverse the law as it stands, rule 11 has been violated).
Here there is no basis to conclude that Riis' pleadings were undertaken in bad faith, that her attorneys failed to make a reasonable inquiry into the underlying elements of this factually complex action, or that the pleadings were drafted in a manner so irresponsible as to rebut the presumption of validity to which counsel's pleadings are entitled. As the Second Circuit has recently stated, "Courts must strive to avoid the wisdom of hindsight in determining whether a pleading was valid when signed, and any and all doubts must be resolved in favor of the signer." Eastway Const. Corp. v. City of New York, supra, 762 F.2d at 254.
For the aforementioned reasons, Riis' claims are barred by the statute of limitations, and MHT's motion for summary judgment dismissing the amended complaint is granted. MHT's motion for sanctions pursuant to Rule 11 is denied.
IT IS SO ORDERED.
NOTES
[1] MHT originally requested an order pursuant to local rule 39 for Riis' failure to post the $10,000 bond ordered by this court on November 8, 1985. Request for such relief has been withdrawn because of the subsequent filing of the bond.
[2] Although Riis' memorandum of law discusses a claim of "fraudulent conveyance," (p. 14-16) in the context of the second claim for relief in her amended complaint, this theory or claim does not appear in her amended complaint, which alleges only that MHT "fraudulently concealed" it's participation in obtaining the mortgage. Riis has no standing to assert a fraudulent conveyance claim because she is a shareholder and not a creditor of O-U. See N.Y. Debtor and Creditor Law, §§ 273, 276 (McKinney's 1945); Commodity Futures Trading Commission v. Probber International Equities Corp., 504 F. Supp. 1154 (S.D.N.Y.1981). This claim even if properly asserted would be barred by the six-year statute of limitations for constructive fraud. See Quadrozzi Concrete Corp. v. Mastroianni, 56 A.D.2d 353, 392 N.Y.S.2d 687 (2d Dept 1977) which would have run from the date of the alleged fraudulent conveyance on April 26, 1975 until April, 1981.
[3] The word "Mantrust" in the deposition portions excerpted above is the cable designation for Manufacturers Hanover Trust Company.
[4] MHT correctly observes that this equitable estoppel doctrine has been incorporated into the two-year "reasonable diligence" discovery period under N.Y.C.P.L.R. § 203(f) and does not operate to extend the time in which a plaintiff may file a fraud action beyond that point. Government of India v. Cargill, Inc., 445 F. Supp. 714, 720 (S.D.N.Y.1978); see also Marathon Enterprises, Inc. v. Feinberg, 595 F. Supp. 368, 372 n. 19 (S.D.N.Y.1984).
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549 A.2d 724 (1988)
Donald A. TOWNSEND, Appellant,
v.
UNITED STATES, Appellee.
No. 87-811.
District of Columbia Court of Appeals.
Argued September 19, 1988.
Decided November 4, 1988.
*725 Jefferson M. Gray, appointed by this court, with whom Robert L. Weinberg, Washington, D.C., was on the brief, for appellant.
Mary Ellen Abrecht, Asst. U.S. Atty., with whom Joseph E. diGenova, U.S. Atty. at the time the brief was filed, Michael W. Farrell, Elizabeth Trosman, and Thomas E. Zeno, Asst. U.S. Attys., Washington, D.C., were on the brief, for appellee.
Before STEADMAN and SCHWELB, Associate Judges, and GALLAGHER, Senior Judge.
GALLAGHER, Senior Judge:
Appellant was convicted after a jury trial of first-degree felony murder, D.C. Code §§ 22-2401 (1981), -3202 (1988 Supp.); attempted robbery while armed, id. §§ 22-2902 (1981), -3202 (1981 Supp.); and carrying a pistol without a license, id. § 22-3204 (1981). On appeal, we remanded the case for vacation of the attempted armed robbery conviction[1] but affirmed in all other respects. Townsend v. United States, 512 A.2d 994 (D.C.1986), cert. denied, ___ U.S. ___, 107 S. Ct. 2188, 95 L. Ed. 2d 843 (1987). Having subsequently pursued his quest for post-conviction relief in the Superior Court, appellant now brings this appeal. He contends that the trial court erred in denying without an evidentiary hearing both his motion for a new trial based on newly discovered evidence and ineffective assistance of counsel, and his motion pursuant to D.C. Code § 23-110 (1981) based on what he perceives to be a violation of his speedy trial right.[2] We affirm.[3]
I
As the facts adduced at trial in this case are set out in some detail in our earlier decision, see Townsend, supra, 512 A.2d at 997, we reiterate them only briefly here. On March 18, 1982, Cash Walker stopped by appellant's home to borrow a cigarette. After a brief discussion, the two set out with a neighbor, Anthony Pixley ("Andy"), to rob a local drug dealer with whom Walker had dealt in the past, Francis Gantt. All three were armed.
When they arrived at Gantt's apartment, Walker knocked on the door; Gantt answered and invited him in. Just as Gantt was closing the door behind them, Pixley and appellant attempted to force their way in. Gantt tried to block the door, but Pixley pulled his gun and fired three shots at himtwo of which found their mark. Gantt managed to force his way past his attackers, was shot once by appellant, and *726 staggered out of the apartment building where he died. His three assailants retreated to their car and drove Walker, who had been hit by one of Pixley's three shots, to a local hospital.
Walker later confessed to his role in the murder, and inculpated appellant and Andy. Appellant was arrested and approximately 310 days later, on February 3, 1983, a grand jury returned an indictment against appellant. On March 2, 1983, appellant went to trial. After a mistrial, a new jury was impaneled and two days later found appellant guilty on all counts. Townsend subsequently appealed from his conviction, asserting, inter alia, a violation of his right to a speedy trial and an abuse of discretion by the motions court in refusing to grant a new trial based on newly discovered evidence and ineffective assistance of counsel. We affirmed his convictions on all but the attempted armed robbery count which we directed the trial court to vacate.
In a bid to place before the motions court arguments advanced for the first time on appeal, appellant filed a § 23-110 motion alleging a speedy trial violation, as well as a motion for a new trial. After a hearing on March 20, 1987, the court denied the motions, issuing a written order filed on June 1, in which it set forth its reasons for the denial. This appeal followed.
II
A.
Initially, we address appellant's contention that the motions court erred in denying without an evidentiary hearing[4] his motion for a new trial. He argues that he is entitled to a new trial based on what he characterizes as "newly discovered evidence." We review the motions judge's grant or denial of a new trial motion only for abuse of discretion, Hawthorne v. United States, 504 A.2d 580, 595 (D.C. 1986); accord, United States v. Kelly, 252 U.S.App.D.C. 308, 790 F.2d 130 (1986); and we will uphold the denial of such a motion as long as that denial is reasonable and supported by the evidence in the record, see Hawthorne, supra, 504 A.2d at 595; see also United States v. Johnson, 327 U.S. 106, 111-13, 66 S. Ct. 464, 466-67, 90 L. Ed. 562 (1946).
In order to prevail on a motion for a new trial based on newly discovered evidence, a defendant must show that
(1) [] the evidence was newly discovered since trial; (2) [the defendant] has demonstrated diligence in [his] efforts to procure the evidence; (3) [] the evidence is [not] merely cumulative or impeaching; (4) [] the evidence is material to the issues involved; and (5) [] the evidence is of such a nature that an acquittal would likely result from its use.
Smith v. United States, 466 A.2d 429, 432 (D.C.1983) (citing Heard v. United States, 245 A.2d 125, 126 (D.C.1968)). The motions court assumed for purposes of its analysis that appellant met the first two prongs of the Heard test. No mention is made of the third or fourth, and we conclude it did likewise with those prongs.
We are thus left to review the motions court's application of the fifth prong to the "newly discovered evidence" offered by appellant: a statement given by Anita Bealle on April 18, 1983. In her statement, Bealle recalled her version of the events that occurred the morning of the shooting:
Last March sometime I was sitting in my living room on the couch.... I heard some people walking up the steps. And then I heard some loud knocking on a door like somebody was banging on a door with his fists. Then I heard somebody talking kinda loud. I hear someone say "No man, you got our shit!" Then I heard the gun shot. After I heard the gun shot I heard some people running *727 down the stairs and then I heard three more shots. I looked out the peephole and saw three guys running out the door.
Appellant points to the apparent discrepancy between Bealle's statement that she heard someone say "You got our shit!" and the government's principal witness at trial who testified that he said "Where is the shit?" From this semantic variance, appellant constructs a scenario in which "whoever climbed the stairs to Gantt's apartment that morning did so ... because Gantt had reneged on a narcotics deal and was holding narcotics ("our shit") that Walker and his companions claimed to be theirs." Thus, he concludes, the Bealle affidavit establishes a claim of right defense for appellant negating the attempted armed robbery count and undermining the felony murder count. In addition, appellant concludes that the discrepancy raises serious questions about Walker's veracity.
In contrast, in the view of the motions judge,[5] the discrepancy between the use of the possessive "our" and the article "the" was insufficient to satisfy the fifth prong of Heard. We agree. Appellant's "newly discovered evidence" is not of "such a nature that an acquittal would likely result from its use." Heard, supra, 245 A.2d at 126. Bealle's statement does not contradict testimony placing appellant at the scene; neither does it support a claim of right defense,[6] nor does it cast shadows of unreliability on the damning testimony of Walker. The motions court was thus fully capable of reaching the conclusion that appellant had not met the fifth prong of the Heard test and there was no need to resort to an evidentiary hearing. We thus uphold as properly within the motion court's discretion the denial of appellant's motion for a new trial based on newly discovered evidence. See Hawthorne, supra, 504 A.2d at 595. An appellate court is not likely to upset a conviction on such a flimsy basis.
B.
Appellant next contends that the motions court erred in denying without an evidentiary hearing[7] his motion for a new trial based on ineffective assistance of counsel.[8]*728 To prevail on a claim that the actions (or inactions) of counsel have abridged the right to effective assistance of counsel, the movant must show both that his trial counsel's performance was deficient and that the deficient performance prejudiced the defense. Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064, 80 L. Ed. 2d 674 (1984); Hockman v. United States, 517 A.2d 44 (D.C.1986). However, if appellant cannot show "a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different," Townsend, supra, 512 A.2d at 1001 (citing Strickland, supra, 466 U.S. at 694, 104 S. Ct. at 2068), this court need not determine whether counsel's performance was in fact deficient, Watson v. United States, 536 A.2d 1056, 1065 (D.C. 1987), cert. denied, ___ U.S. ___, 108 S. Ct. 1740, 100 L. Ed. 2d 203 (1988).[9] We move first then to consider whether appellant meets the strictures of the second prong of the Strickland analysis.
The error upon which appellant predicates his argument that the performance of his attorney was deficient was counsel's failure to unearth Bealle's statement and call her as a witness at trial. Although the issue was not actually before us in Townsend's previous appeal, we noted that such a contention was without merit. Townsend, supra, 512 A.2d at 1001-02. Now that the issue is still another time before us, we reaffirm our ruling. Based on our disposition of appellant's newly discovered evidence argument, we agree with the motions court that there was "no reasonable probability that Bealle's testimony would have resulted in a different verdict from an objective decision maker." Appellant's contentions are thus
insufficient to establish that the entire trial cannot be relied on as having produced a just result.... [C]ounsel ably presented an alibi defense, which the jury declined to credit. In presenting that defense, and generally throughout the trial, counsel was functioning as "counsel" as contemplated by the Sixth Amendment.
Id.; see Hill v. United States, 489 A.2d 1078 (D.C.1985), cert. denied, 476 U.S. 1119, 106 S. Ct. 1980, 90 L. Ed. 2d 663 (1986). Hence, we conclude that the motions court did not err in denying the motion, nor in doing so without an evidentiary hearing. See Ellerbe v. United States, 545 A.2d 1197, 1199 (D.C.1988) (per curiam) (citing Hockman, supra, 517 A.2d at 48); cf. Session v. United States, 381 A.2d 1 (D.C. 1977) (defendant entitled to hearing when existing record could not illuminate charges of ineffective assistance).
AFFIRMED.
NOTES
[1] See Price v. United States, 531 A.2d 984, 989 n. 7 (D.C.1987); Whalen v. United States, 445 U.S. 684, 694, 100 S. Ct. 1432, 1439, 63 L. Ed. 2d 715 (1980).
[2] This last contention is without merit. Appellant bases his speedy trial argument on the one year and ten day delay between his indictment and trial. In considering appellant's original appeal, we accepted the government's explanation for the delay at face value, as appellant urged us to do, and concluded there was no speedy trial violation. Townsend, supra, 512 A.2d at 998-99. Based on that holding, then, the motions court properly denied appellant's motion, and we decline to revisit the issue. See Doepel v. United States, 510 A.2d 1044, 1046 (D.C.1986).
Even if we were to disbelieve the government's proffered explanation, appellant's argument would fail to meet the test set forth in Barker v. Wingo, 407 U.S. 514, 530, 92 S. Ct. 2182, 2192, 33 L. Ed. 2d 101 (1972). The length of delay over the one-year "prima facie" violation period was negligible, see Wright v. United States, 513 A.2d 804, 810 n. 8 (D.C.1986) (one year, two week delay "barely enough for a presumptive speedy trial violation"); no prejudice was shown, see Townsend, supra, 512 A.2d at 998; and appellant did nothing to assert his right until his first appeal, id. (citing Rink v. United States, 388 A.2d 52, 58-59 (D.C.1978) (failure to raise issue until appeal greatly cripples claim)); see Graves v. United States, 490 A.2d 1086, 1098 (D.C.1984) (en banc).
[3] We also deny appellee's Motion to Strike Nonrecord Material from Appellant's Volume of Appendices, and grant appellant's Motion to Supplement the Record.
[4] For the sake of clarity, we note that while both parties presented their arguments orally to the trial court at the March 20 hearing, the court did not permit appellant to subpoena and introduce into evidence certain grand jury and other documents regarding his claims. Thus, while there was a hearing on the topic, it was not an "evidentiary hearing" as that term is ordinarily used in the Superior Court. It is the trial court's failure to take this extra step to which appellant assigns error.
[5] And in our view, albeit in dictum, in Townsend.
[6] Appellant's reliance on a claim of right defense as a basis for acquittal is misplaced. We have never held that a person can use forcible self-help to retake illegal drugs from another. Nor do we now, cf. People v. Reid, 69 N.Y.2d 469, 508 N.E.2d 661, 664, 515 N.Y.S.2d 750 (1987) (collecting cases from other jurisdictions); Cates v. State, 21 Md.App. 363, 368, 320 A.2d 75, 79 (1974); Commonwealth v. Sleighter, 495 Pa. 262, 265, 433 A.2d 469, 471 (1981) (no justification for using robbery to collect an illegal debt); People v. English, 32 Ill.App.3d 691, 693, 336 N.E.2d 199, 201 (1975) (same); People v. Karasek, 63 Mich.App. 706, 712, 234 N.W.2d 761, 765 (1975); for to do so would be to give our imprimatur to an act the completion of which is itself a criminal offense, see D.C. Code § 33-541(a)(1) (possession with intent to distribute a controlled substance); id. § 33-541(d) (possession of a controlled substance); cf. 52A C.J.S. Larceny § 26, at 449-50 (1968) (claim of right defense exists only where "one takes the property of another and converts it to his own use, believing it to be legally his own, or that he has a legal right to possession").
The cases cited by appellant to support his position are inapplicable here. Cates, supra, 21 Md.App. at 374, 320 A.2d at 82, explicitly rejects the proposition for which appellant cites it. Richardson v. United States, 131 U.S.App.D.C. 168, 403 F.2d 574 (1968), and Smith v. United States, 330 A.2d 519 (D.C.1974), both deal with the collection of a sum certain of money owed as a debt and are thus distinguishable. Even assuming the existence of a claim of right defense, there is no evidence in the record, nor has appellant argued, that he knew Gantt or had prior dealings with him. It is thus highly improbable under appellant's scenario that Gantt could have somehow possessed drugs which appellant believed to be his. This negates any claim of right defense. See People v. Hodges, 113 A.D.2d 514, 496 N.Y.S.2d 771, 773 (2d Dept. 1985), appeal denied, 67 N.Y.2d 884, 492 N.E.2d 1243, 501 N.Y.S.2d 1036 (1986). In addition, to successfully invoke the claim there would have to be evidence that appellant wanted neither money nor other drugs from Ganttonly his own drugs. Cf. Smith, supra, 330 A.2d at 521 (where amount or nature of items taken exceeds amount owed, no claim of right defense). This is precluded by Walker's testimony.
[7] See supra n. 4.
[8] We note that the preferred method of leveling a challenge at the effectiveness of trial counsel is through a motion pursuant to D.C. Code § 23-110. See United States v. Higdon, 496 A.2d 618, 620 (D.C.1985); Alexander v. United States, 409 A.2d 618, 620 (D.C.1979).
[9] In passing, we observe an inconsistency between appellant's assertion that counsel was deficient in failing to discover the Bealle statement, and his argument regarding the new trial motion based on newly discovered evidence where he contends that counsel "has demonstrated diligence in [his] efforts to procure the [statement.]" Smith, supra, 466 A.2d at 432.
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549 A.2d 1033 (1988)
STATE of Vermont
v.
Gailon A. JOY.
No. 85-026.
Supreme Court of Vermont.
April 29, 1988.
*1034 Jeffrey L. Amestoy, Atty. Gen., Susan R. Harritt, Asst. Atty. Gen., and Robert Katims, Legal Intern, Montpelier, for plaintiff-appellee.
Walter M. Morris, Jr., Defender Gen., and William A. Nelson, Appellate Defender, Montpelier, for defendant-appellant.
Before ALLEN, C.J., PECK, DOOLEY and MAHADY, JJ., and BARNEY, C.J. (Ret.), Specially Assigned.
DOOLEY, Justice.
Following a jury trial in the Washington District Court, defendant Gailon Joy was convicted of one count of embezzlement in violation of 13 V.S.A. § 2531. Defendant appeals his conviction. We affirm.
Defendant Joy was president and sole shareholder of Credit Management Services Corporation (CMS), a debt collection agency. At all relevant times defendant had exclusive control over, and directed the activities of, CMS. CMS contracted with various businesses and credit institutions to collect delinquent accounts for a percentage of the amount collected. Once CMS contracted with a client, CMS was entitled to forty percent of any amount collected on a delinquent account. CMS was entitled to this percentage regardless of whether the debtor paid CMS or settled with the client directly.
As a matter of practice, when CMS received a payment from a debtor, it would deposit the money with a Barre bank and within a month an invoice detailing the transaction would be sent to the client. If monies were due the client, a check would accompany the invoice.
In addition to the bank account with the Barre bank (the Barre account) CMS maintained an account with a Montpelier bank (the Montpelier account). CMS drew on its account with the Montpelier bank to pay its operating expenses, including overhead and payroll expenses.
In late 1980 or early 1981 CMS, suffering financial difficulties, began transferring funds from the Barre account to the Montpelier account to cover its operating expenses. These transfers occurred under defendant's direction. Defendant instructed his bookkeeping personnel to credit client accounts when debts were collected, but not to prepare invoices if there were insufficient funds in the Barre bank account.
In June, 1981, CMS entered into a contract with Stacey Fuel and Lumber Company (Stacy) whereby CMS was to collect several delinquent accounts. On August 14, 1981, CMS received a check from one of Stacey's debtors in the amount of $1,920.25. CMS never forwarded any of this money to Stacey, nor did it inform Stacey that the money had been received. Stacey terminated its relationship with CMS in August, 1982. Subsequently, Stacey received notice that CMS had filed for bankruptcy and that Stacey had been listed as a creditor of CMS.
On February 17, 1984 the State filed an information charging defendant with ten counts of embezzlement relating to funds belonging to six different clients of CMS. Ultimately, all counts but one were dismissed by the State. The sole remaining count related to the $1,920.25 payment received by CMS for Stacey. Defendant was convicted on this count and filed a timely notice of appeal.
Defendant raises three claims on appeal. First, defendant argues that the trial court erred in its instructions to the jury regarding intent. Second, defendant contends that the State's information was fatally *1035 defective. Third, defendant argues that the trial court erred by failing to instruct the jury that the presumption of innocence is a piece of evidence to be considered in the defendant's favor.
In his first claim on appeal, defendant suggests that the trial court improperly refused to charge the jury that "[t]he mere fact that C.M.S. Corporation failed or was unable to pay its creditors is not a sufficient showing of intent to justify conviction [of embezzlement]." Defendant also argues that the trial court erred in failing to instruct the jury that, while intent to repay is not a defense, the jury should consider defendant's intent to repay in determining whether defendant possessed the requisite fraudulent intent to make out the crime of embezzlement. Based on these two claims, defendant also assigns error to the fact that the trial judge instructed the jury "without qualification" that intent to repay is not a defense to a charge of embezzlement.
These specific claims of error are part of defendant's overall point that the trial court erred by failing to charge the jury in a manner consistent with the defense theory of the case. See State v. Brisson, 119 Vt. 48, 53, 117 A.2d 255, 258 (1955).
Brisson is our leading case on the obligation to instruct the jury on the defense theory of the case. Brisson was a DUI case where the State showed that the defendant had failed to successfully perform field sobriety and coordination tests. Defendant claimed that his lack of coordination was the result of illness and introduced evidence to show that his symptoms at the time of his arrest were characteristic of multiple sclerosis. However, the trial judge, in his instructions to the jury, failed to make any reference to the disease as a possible defense raised by the evidence. In reversing, this Court held that a jury charge "`should be full, fair and correct on all issues, theories, and claims within the pleadings so far as the evidence requires.'" Brisson, 119 Vt. at 54, 117 A.2d at 258 (quoting Morse v. Ward, 102 Vt. 433, 436, 150 A. 132, 133 (1930)). Moreover, we noted that failure of a trial court to abide by this mandate could "close[] that course of exploration [by] the jury. [And have] the effect of denying the jury's consideration of the sole issue upon which the [defendant] relie[s] for freedom from criminal liability." Id. at 54, 117 A.2d at 258.
Brisson, however, is not helpful to the defendant in the instant case. While a trial court clearly must tailor its instructions to the elements of the offense charged in conjunction with defenses fairly raised, there is no requirement that the court charge on a theory not supported by applicable law or the evidence. See State v. Day, 149 Vt. 165, 167, 540 A.2d 1042, 1043 (1987); State v. Drown, 148 Vt. 311, 312-13, 532 A.2d 575, 576 (1987).
Defendant's main objection to the charge is that it failed to state that the jury could consider intent to repay as evidence that the defendant had no fraudulent intent. The elements of embezzlement are detailed in 13 V.S.A. § 2531, which states in pertinent part that:
An officer, agent, bailee for hire, clerk or servant of a banking association or an incorporated company, ... who embezzles or fraudulently converts to his own use, or takes or secretes with intent to embezzle or fraudulently convert to his own use, money or other property which comes into his possession or is under his care by virtue of such employment, notwithstanding he may have an interest in such property, shall be guilty of embezzlement....
The law is clear that intent to repay is not a defense to embezzlement under a statute like ours. See, e.g., 3 Wharton's Criminal Law § 397, at 405-07 (14th ed. 1980). Further, the proposition that defendant's intent to repay should have been considered by the jury in its determination of whether or not he possessed the necessary mens rea is inconsistent with the state of the law. A leading authority on criminal law has observed that "[g]iven a fraudulent appropriation or conversion, an embezzlement is committed even if the defendant intends at some subsequent time to return the property or to make restitution to the owner." 3 Wharton's Criminal Law § 397, *1036 at 405-06 (footnote omitted). Likewise, the Supreme Court of Illinois, in a case quite similar to the instant case, held that "[t]he intention to restore or replace does not make an intentional purloining, secretion or appropriation of the money of another any the less an embezzlement." People v. Riggins, 13 Ill. 2d 134, 140, 148 N.E.2d 450, 453 (1958) (citation omitted); accord United States v. Shackleford, 777 F.2d 1141, 1144 (6th Cir.1985); State v. Piper, 206 Kan. 190, 193, 477 P.2d 940, 943-44 (1970); Commonwealth v. Bovaird, 373 Pa. 47, 60, 95 A.2d 173, 178 (1953).
The rationale for this rule was stated by the Pennsylvania Supreme Court in Commonwealth v. Bovaird:
Where one is charged with embezzlement or fraudulent conversion, the intention to abstract the money and appropriate it to his own use has been fully executed upon its wrongful taking; the ability and intention to indemnify the party from whom it has been withdrawn remains unexecuted, and such intention, even if conscientiously entertained, may become impossible of fulfillment. The crime is consummated when the money is intentionally and wrongfully converted, temporarily or permanently, to the defendant's own use.
Bovaird, 373 Pa. at 60, 95 A.2d at 178; accord Morrow v. Commonwealth, 157 Ky. 486, 489, 163 S.W. 452, 453 (1914) ("While to constitute the offense of embezzlement it is necessary that there be a criminal intent, yet where the money of the principal is knowingly used by the agent in violation of his duty, it is none the less embezzlement because at the time he intended to restore it.") (citations omitted); Commonwealth v. Tuckerman, 76 Mass. (10 Gray) 173, 205 (1857) (finding of fraudulent intent is not "affected by the consideration [even if well founded] that the defendant, at the time of taking and converting the money to his own use, intended to restore it to the owners...."). Thus, we are not persuaded by defendant's argument that it was error for the trial judge to refuse to instruct the jury that defendant's intent to repay was relevant to the existence or nonexistence of fraudulent intent; there clearly was no error on this point.[*]
The trial judge properly charged the elements of the offense of embezzlement. Regarding intent, the judge stressed that "there must be a fraudulent intent and the State must prove fraudulent intent beyond a reasonable doubt." And the court properly noted that "the intent to embezzle is a state of mind which can be shown by words or conduct."
Defendant also argues that the trial court erred by not instructing the jury that a mere inability or failure to pay creditors is not sufficient to demonstrate the fraudulent intent necessary for the crime of embezzlement. For the same reasons that intent to repay is not relevant to the existence of fraudulent intent, neither is the ability or inability to repay. See, e.g., Bovaird, 373 Pa. at 60, 95 A.2d at 178. Moreover, the charge urged by defendant misstates the facts of this case and mischaracterizes his relationship with Stacey.
There is no question that "[in] a debtor-creditor relation, the debtor's failure to pay the creditor does not constitute embezzlement." 3 Wharton's Criminal Law § 402, at 417 (footnote omitted); see also Kelley v. People, 157 Colo. 417, 420, 402 P.2d 934, 935-36 (1965). However, defendant's relationship with Stacey was not that of debtor-creditor, but rather it was one of agent and principal. See Rule v. New Hampshire-Vermont Health Service, 144 Vt. 323, 326, 477 A.2d 622, 624 (1984). We are satisfied that the facts and circumstances of this case support defendant's status as an agent of Stacey. The trial court instructed the jury that an agency relationship was critical to the offense charged and that the State was burdened with proving beyond a reasonable doubt that such relationship existed. The court *1037 also instructed that "[a] debtor-creditor relationship alone is insufficient to create an agency relationship." The evidence supports a finding of an agency relationship, and the jury so found. Moreover, on appeal, defendant does not argue that he was anything other than an agent of Stacey.
As an agent, rather than a debtor, of Stacey, defendant was obligated to hold and remit to Stacey its percentage of any amounts collected. See State v. Thyfault, 121 N.J.Super. 487, 498, 297 A.2d 873, 879 (1972); see also Restatement (Second) Agency § 13, at 58 (1958) ("An agent is a fiduciary with respect to matters within the scope of his agency."). In discussing the obligation of an agent to his principal, the Supreme Judicial Court of Massachusetts has noted that the money held by an agent to the account of his principal "always, and in every shape, belongs to [the principal]." Tuckerman, 76 Mass. at 196. The court also stressed that the agent "is at all times the keeper of [his principal's] property" and the agent can never "rightfully set up any claim of ownership to it in himself...." Id. Given the existence of an agency relationshipas found by the jury defendant's conversion of the money credited to Stacey's account was precisely the activity prohibited by the embezzlement statute. See 13 V.S.A. § 2531.
In his second argument on appeal, defendant suggests that the State's information was fatally defective because it failed to allege: (1) the subject matter jurisdiction of the court; (2) the name of the accused; and (3) an essential element of the crime.
Count 7 of the informationthe only remaining count at the time of trialunder which defendant was convicted, reads as follows:
On or about August 25, 1981 was then and there an agent, through Credit Management Services Corp., of Stacey Fuel & Lumber Company, who embezzled and fraudulently converted to his own use $1152.15 that came into his possession by virtue of the employment of Credit Management Services Corp. to collect debts owned to Stacey Fuel & Lumber Company by [a named debtor], in violation of 13 V.S.A. § 2531, against the peace and dignity of the State.
This count is missing the normal identifying information because of the way the beginning of the information is drafted. Count 1 of the information began: "That Gailon Joy, of Warren, Maine, at Montpelier, in Territorial Unit No. 2," and went on to detail the allegation against defendant. The remaining counts did not contain the quoted introductory material. When Count 1 was dismissed, the introductory phrase containing defendant's name and place of residence and the situs of the alleged crimes was omitted.
Defendant contends in this Court that the information was defective in that it failed to allege subject matter jurisdiction in the trial court and failed to include the name of the defendant because of the deletion of Count 1. This argument was not made to the trial court below. We find these arguments to be hypertechnical, without substance, and insufficient to warrant reversal.
In State v. Christman, 135 Vt. 59, 60, 370 A.2d 624, 625 (1977), we stated that:
Chapter I, Art. 10 of the Vermont Constitution and the Sixth Amendment of the U.S. Constitution confer upon a criminal respondent, in almost identical words, the right to be informed of the cause and nature of the accusation against him.... The constitutional test to which conformity is required has been variously stated, but the essential test is that the complaint or other form of accusation of a criminal offense set forth charges with such particularity as will reasonably indicate the exact offense the accused is charged with, and will enable him to make intelligent preparation for his defense.
Consistent with the purpose of an information, as described in Christman, V.R.Cr. P. 7(b) indicates that an "information shall be a plain, concise, and definite written statement of the essential facts constituting the offense charged." The Reporter's Notes to Rule 7(b) stress that "[t]he basic thrust of the rule is to eliminate technical *1038 rules of pleading, with their requirements of precision and detail, in favor of an approach based upon common sense and reason." To the same end, V.R.Cr.P. 12(b)(2) states that "[d]efenses and objections based on defects in the indictment or information" must be raised before trial or they are waived. The only exceptions to such waiver are that the indictment or information "fails to show jurisdiction in the court or to charge an offense." V.R.Cr.P. 12(b)(2). Lack of subject matter jurisdiction and failure to charge an offense "shall be noticed by the court at any time during the pendency of the proceeding." Id.
Defendant did not raise the absence of a jurisdictional statement in the amended information prior to trial. He argues, here, that his claim is not waived because of the exception in V.R.Cr.P. 12(b)(2). While he agrees that the Washington District Court had jurisdiction to hear his case, he seeks reversal solely because a statement of such jurisdiction was lacking. We hold that this is the technical type of defect that is waived under the rule if not raised before trial.
The Reporter's Notes to Rule 12 clearly indicate that the reference to jurisdiction in 12(b)(2) is to jurisdiction in fact and not to allegations about jurisdiction. Specifically, the Notes state that "[e]xcepted from the waiver provision of Rule[] 12(b)(2) [is] ... the defense of lack of jurisdiction (which does not include venue)." V.R.Cr.P. 12, Reporter's Notes. A mere failure to allege jurisdiction does not create a defense of lack of jurisdiction.
In discussing federal rule 12(b)(2), on which our rule is based, a noted authority has observed that "the courts seem clearly right in holding that it is jurisdiction of the subject matter that is here involved...." 1 C. Wright, Federal Practice and Procedure § 193, at 695 (1982). Also discussing the federal rule, the United States Court of Appeals for the First Circuit observed that it is "the competency of any court to adjudicate the subject matter [that] may always be questioned...." Pon v. United States, 168 F.2d 373, 374 (1st Cir.1948). In Pon the court went on to say that: "The `lack of jurisdiction' referred to in this part of the rule obviously refers to jurisdiction over the subject matter, which a defendant has no power to waive." Id.
Essentially, defendant asks us to exalt one type of technical defectthe absence of a jurisdictional avermentover all other technical defects. There is neither reason nor substance to this proposal. While a criminal defendant or the court, including this Court on appeal, may at any time raise a lack of subject matter jurisdiction, the technical absence of a jurisdictional statement must be raised before trial or it is waived. Having failed to timely raise this defect in the instant case, it is waived and not available for our consideration. See State v. Lamelle, 133 Vt. 378, 379, 340 A.2d 49, 50 (1975).
Defendant also alleges error because the amended complaint failed to incorporate his name. Again, this is a technical defect and because it was not raised prior to trial, it is waived. Both the original information and the affidavit to support probable cause mentioned Gailon A. Joy as the accused. The affidavit also captioned defendant's name and stated that the investigator had "probable cause to believe that GAILON ARTHUR JOY has committed the offense[s] of EMBEZZLEMENT (10 Counts), a violation of TITLE 13, Vermont Statutes Annotated § 2531." In Christman, we observed that "[a]s a required component of the complaint, fundamental fairness requires that [the affidavit supporting probable cause] be read in connection therewith to determine whether the exact offense charged is `reasonably' indicated and sufficient to make possible `intelligent' preparation." Christman, 135 Vt. at 61, 370 A.2d at 626. Given this, and given the fact that Gailon Joy was the only person listed as a defendant, it is clear that all parties were aware that Gailon A. Joy was being called to defend himself against a charge of embezzlement as detailed in Count 7 of the information. Defendant has failed to demonstrate that he was prejudiced in any way by the State's gaffe in first misplacing and then deleting defendant's name from the information. See In *1039 re Stevens, 146 Vt. 6, 9, 497 A.2d 744, 747 (1985) (defendant must demonstrate that he was prejudiced by insufficient information); In re Hall, 143 Vt. 590, 595, 469 A.2d 756, 758 (1983) (exercise of defendant's rights must have been "hampered or frustrated" by procedural shortcomings). The nature of defendant's claim is technical rather than substantive and not having been timely raised, it is waived.
As a final attack on the information, defendant contends that when embezzlement is charged in an information, the status of the principal is an essential element which must be included in the charge. Defendant bases this contention on the fact that 13 V.S.A. § 2531 lists eight classifications of principals: a banking association; an incorporated company; a private person; a partnership; a tradesunion; a joint stock company; an unincorporated association; or a fraternal or benevolent association. 13 V.S.A. § 2531. Because the information fails to allege that Stacey Fuel and Lumber Co. is one of the listed types of principals, defendant argues it is defective. The problem with defendant's argument is that the statutory list exhausts the entire universe of possible principals. Thus, any agent who fraudulently converts the property of a principal violates the statute.
Such being the case, the status of the principal is a technical distinction that is not an essential element of the crime and, thus, it need not be included in an information. Certainly, a description of a principal's status is not necessary for a defendant to be apprised of the offense charged and to be able to prepare an intelligent defense. Nor will a failure to mention the status of the principal likely subject a defendant to subsequent prosecution for the same offense. As these are the purposes of an information, see State v. Phillips, 142 Vt. 283, 288, 455 A.2d 325, 328 (1982), defendant has failed to demonstrate a fatal defect relating to this point. The information did not fail to charge an offense.
Finally, defendant seeks reversal due to the fact that the trial judge failed to charge the jury that the presumption of innocence "is a piece of evidence that should be considered with all the other evidence." This argument is ineffective for two reasons. First, we note that defendant did not object to the charge as given. And, second, our law is clear that so long as a charge accurately reflects the law it may be adequate even if it does not use the exact terms sought by the complaining party. See State v. Hoadley, 147 Vt. 49, 55, 512 A.2d 879, 882 (1986). In this case, on no fewer than six occasions, the trial judge emphasized to the jury that the defendant was presumed innocent. Thus, viewed as a whole, we find no error in the charge regarding presumption of innocense. Cf. State v. Day, 149 Vt. at 167, 540 A.2d at 1043.
Based on the foregoing analysis, we conclude that no grounds for reversal exist in this case.
AFFIRMED.
NOTES
[*] Some authorities have observed that intent to return the identical property taken is evidence of lack of fraudulent intent, see W. LaFave & A. Scott, Criminal Law § 89, at 653 (1972), or that intent to repay may be relevant to sentencing, see 3 Wharton's Criminal Law § 397, at 409 (14th ed. 1980), but neither of these situations is the case before us now.
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632 F. Supp. 1296 (1986)
FEDERAL SAVINGS & LOAN INSURANCE CORPORATION, as Receiver for Union Federal Savings & Loan Association, formerly Union Mutual Savings & Loan Association, Plaintiff,
v.
C & J OIL COMPANY, INC., et al., Defendants.
Civ. A. No. 85-489-R.
United States District Court, W.D. Virginia, Roanoke Division.
April 9, 1986.
Winthrop A. Short, Jr., Kaufman & Canoles, Norfolk, Va., Norman Raiden, Associate Gen. Counsel, Federal Home Loan Bank Bd., Washington, D.C., for plaintiff.
Ray W. Grubbs, Christiansburg, Va., Stephen A. Chaplin, Chaplin, Papa & Gonet, Richmond, Va., for defendants.
*1297 MEMORANDUM OPINION
TURK, Chief Judge.
Plaintiff Federal Savings & Loan Insurance Corporation ("FSLIC") filed this suit hoping to recover amounts allegedly due under a lease originally made between United Leasing Corporation ("United Leasing") and C & J Oil Company, Inc. ("C & J"). The defendants have counterclaimed seeking damages for malicious prosecution. Currently before the court are the defendants' motion for summary judgment and plaintiff's motion for summary judgment on the defendants' counterclaim. For the reasons set forth below, the defendants' motion will be denied, and plaintiff's motion will be granted.
BACKGROUND
On November 7, 1983, C & J and United Leasing entered into a lease (the "Lease") of certain equipment related to the oil business, consisting for the most part of tanks, pumps and related equipment. Under the terms of the Lease, C & J agreed to payments of $2,602.95 per month for a term of 64 months. The obligations of C & J under the Lease had been guaranteed on October 19, 1983 by defendants Johnston Oil Co., Inc. ("Johnston"), Charles E. Straub, III and Gail E. Straub. The Straubs are both directors and officers of Johnston.
On November 7, 1983, as consideration for a payment from Union Federal Savings & Loan Association (the "Association") to United Leasing in the amount of $100,000.00, United Leasing assigned the guaranteed Lease to the Association. In connection therewith, United Leasing executed an Assignment of Lease and sent to the Association the original Lease, the original Guaranties and the originals of other documents associated with the Lease.[1] On November 21, 1983, United Leasing recorded UCC financing statements at the Virginia State Corporation Commission and at the Office of the Clerk of the Circuit Court of Montgomery County, reflecting a security interest in the equipment in favor of the Association. In mid-November, 1983, C & J began making monthly payments under the Lease to United Leasing, which in turn forwarded certain payments to the Association.
After the assignment of the Lease to the Association, the Association experienced financial difficulty. On January 26, 1984, the Federal Home Loan Bank Board, pursuant to 12 U.S.C. § 1464(d)(6), appointed FSLIC as the sole receiver for the Association, based on its finding that the Association was insolvent in that its assets were less than its obligations. FSLIC, as receiver, took possession of the Association on January 27, 1984, and succeeded to all rights, title, powers and privileges of the Association and any of its subsidiaries. 12 C.F.R. § 547.7.
On October 8, 1984, after disputes had arisen between FSLIC and United Leasing, counsel for FSLIC sent a letter to C & J demanding that monthly payments under the Lease be thereafter sent directly to FSLIC, rather than to United Leasing. Copies of this letter were sent to the guarantors. Neither C & J nor the guarantors sent any monthly payments under the Lease to FSLIC.
In an effort to resolve the problems regarding the Lease, FSLIC and United Leasing began negotiating for the reassignment of the Lease to United Leasing. On January 14, 1985, FSLIC sent a letter to United Leasing which set forth, among other things, an agreement that FSLIC would assign the Lease back to United Leasing for the sum of $55,000. A week later, FSLIC received by return mail the letter of January 14, 1985 with the signature of United Leasing' president, along with a letter from W.O. Johnson of United Leasing, dated January 16, 1985, making certain requests regarding steps necessary to accomplish the transaction. FSLIC responded with a letter to United Leasing, dated January 30, 1985, which enclosed the documents necessary to accomplish FSLIC's *1298 performance of the agreement set forth in the letter of January 14, 1985.
Three months later, however, United Leasing had still failed to pay FSLIC the $55,000 as set forth in the letter of January 14, 1985. For this reason and others, FSLIC sent to United Leasing a letter dated April 22, 1985 rescinding the agreement set forth in the letter of January 14.
On June 4, 1985, FSLIC filed its first complaint in this action. On June 13, 1985, FSLIC received a check from United Leasing for $55,000. The check came in an envelope containing no correspondence other than a copy of FSLIC's January 30, 1985 letter to United Leasing. FSLIC cashed the check, and sent a letter to United Leasing, dated June 21, 1985, stating that in light of the April recission, FSLIC viewed United Leasing's sending of the check as a new offer to purchase a reassignment of the Lease. The letter further stated that FSLIC was accepting the offer as of June 17, 1985, while specifically reserving the right to recover from C & J payments on the Lease due during the period October 10, 1984 through June 17, 1985.
On June 25, 1985, FSLIC filed the amended complaint currently before the court. The complaint seeks from the defendants amounts due under the Lease for the period October 10, 1984 through June 17, 1985. On July 19, 1985, the defendants filed a responsive pleading which included a counterclaim for malicious prosecution.
ANALYSIS
FSLIC seeks summary judgment on the defendants' counterclaim. The defendants, on the other hand, seek summary judgment on FSLIC's claim. The court will address these questions in turn.
A. The Malicious Prosecution Counterclaim
The defendants' counterclaim alleges that the complaint was filed merely to harass the defendants, and seeks compensatory and punitive damages. FSLIC contends that the claim of malicious prosecution is unwarranted, and seeks dismissal of the claim.
Malicious prosecution claims are not favored in Virginia, and thus the requirements for maintaining such actions are more stringent than those applying to most tort claims. This court need not review all the elements of a claim for malicious prosecution, however, because it is apparent that the defendants' counterclaim falters in at least one critical respect.
The proceeding on which the defendants' claim is premised has not yet been concluded. It is elementary that an action for malicious prosecution may not be maintained unless the original proceeding from which the claim arises has been terminated in a manner favorable to the party bringing the malicious prosecution action. Terry v. Genarco, Inc., 449 F. Supp. 1015, 1016 (E.D.Va.1978). Since the defendants' counterclaim falters in this respect, plaintiff's motion for partial summary judgment will be granted.
B. FSLIC's Claim For Arrearages Under The Lease
FSLIC's complaint seeks to recover from the defendants the amounts due under the Lease from October 10, 1984 through June 17, 1985. The defendants respond that FSLIC is not entitled to payments under the Lease, and assert that they are entitled to summary judgment.
The controversy centers around the scope of FSLIC's reassignment of the Lease to United Leasing. As the record indicates, there is a disagreement between the parties as to exactly when the reassignment took place. The defendants contend that the reassignment was effective in January 1985, while FSLIC contends it was not effective until June 1985. Because of this disagreement, the court must consider the documents that passed between the parties during this period to determine the potential scope of the reassignment.
The first pertinent document is the January 14 letter from FSLIC to United Leasing, *1299 which was later endorsed by United Leasing. The letter states:
United Leasing shall repurchase from the Receiver the interests of the Lessor under the C & J Lease ... on the following terms and conditions:
1. The purchase price for the Receiver's interest as Lessor under the C & J Lease shall be $55,000.00.
2. The repurchases shall be without recourse to or warranty, express or implied, from the Receiver.
3. United Leasing shall pay the purchase price in the aggregate of $55,000 to the Receiver, in cash and within a reasonable time after the execution of the document, free and clear of all claims and any right of offset which United Leasing may have against the Receiver and without prejudice to any claims the Receiver may have against United Leasing for amounts previously offset by United Leasing against amounts owed the Receiver from United Leasing with respect to amounts collected by United Leasing from the Lessors under the Leases.
Following the April FSLIC letter rescinding the January agreement, FSLIC received a check for $55,000 from United Leasing. In response, FSLIC sent the June 21 letter. That letter states, in pertinent part:
The Receiver has accepted this offer as of June 17, 1985, and deposited on that date United Leasing's check in the amount of $55,000.00. Consistent with the terms of the Lease, and the assignment of the Lease to Union Federal, C & J still owes to the Receiver all monthly payments under the Lease from October 10, 1984, when the Receiver made demand on C & J for direct payment of rent under the Lease, through June 17, 1985, when the Receiver accepted the new offer and deposited the $55,000.00 check from United Leasing. The Receiver plans on pursuing collection from C & J of such monthly payments, which total $23,426.55, as well as our attorney fees and interest.
The foregoing is, of course, without prejudice to any claims the Receiver may have against United Leasing for amounts previously offset by United Leasing against amounts owed the Receiver from United Leasing with respect to amounts collected by United Leasing from C & J under the Lease.
United Leasing did not respond to the June 21 letter.
Whether the reassignment was effective in January or June 1985, the defendants claim that FSLIC assigned the right to arrearages due from C & J under the Lease to United Leasing. This assignment, they contend, prevents FSLIC from seeking to collect those arrearages in the present action. There is little question that FSLIC could have assigned the arrearages under the Lease to United Leasing. See 2A Michie's Jurisprudence of Virginia and West Virginia, Assignments, §§ 7-14. The question before the court, then, is whether FSLIC did assign the arrearages.
In construing an assignment, Virginia courts look to substance rather than form, and an assignment may be actionable if it shows a clear intent to transfer an identified chose in action. Lataif v. Commercial Indus. Const., Inc., 223 Va. 59, 286 S.E.2d 159, 161 (1982). Attendant and surrounding circumstances may aid in the identification of the chose assigned. Id.
Considering first the possibility that the June reassignment will be found the effective one, the court believes that FSLIC did not assign the right to arrearages under the Lease to United Leasing. In the first instance, there is no language in the June 21 letter indicating that such an assignment was taking place. More important, however, there is language in the letter specifically noting that FSLIC planned to pursue C & J for the arrearages. These circumstances lead the court to identify the chose assigned in the June correspondence as solely the Lease, and not the arrearages.
Considering next the possibility that the January reassignment is found to be the effective one, the court again believes that FSLIC did not assign the right to arrearages *1300 under the Lease to United Leasing. In this instance, again, the endorsed January 14 letter does not contain any language indicating that such an assignment was taking place. The circumstances surrounding the endorsed January 14 letter, however, do not aid the court in identifying the chose in action assigned. For this reason, the court must take an additional analytical step.
The lease in question in this case involved personal property. It is well established in leases involving real property that absent a clearly expressed intention to the contrary, the assignment of such a lease does not transfer the right to rental payments already accrued but unpaid at the time of assignment. See, e.g., Blackwell v. Real Estate Commission, 210 A.2d 544, 545-46 (D.C.App.1965); Velishka v. Laurendeau, 100 N.H. 46, 118 A.2d 600, (1955); Shell Petroleum Corporation v. Jackson, 77 F.2d 340, 341-42 (6th Cir.1935). The same principle has been applied to the assignment of contracts involving personality. See, e.g., National Reserve Co. v. Metropolitan Trust Co., 17 Cal. 2d 827, 112 P.2d 598, 602 (1941) (participation certificates); Pennsylvania Exchange Bank v. Lasko, 4 Misc. 2d 1039, 159 N.Y.S.2d 429, 432 (Sup.Ct.), reversed on other grounds, 4 A.D.2d 206, 163 N.Y.S.2d 864 (1957) (automobile). See also Hanna v. Florence Iron Co., 222 N.Y. 290, 118 N.E. 629 (1918). Indeed, the principle is so well recognized that Professor Williston has stated "[t]he assignment of rights under a continuing contract does not imply an assignment of rights of action for previous breaches of the contract...." 3 Williston Contracts § 431 (1960).
The parties have been unable to find any cases ruling on the issue in the context of leases of personal property, and the court's research has not turned up any cases. Since this case involves the interpretation of Virginia law, this court is bound to apply the law that it appears the highest court of Virginia would apply. See Brendle v. General Tire & Rubber Co., 505 F.2d 243, 245 (4th Cir.1974).
The defendant has not offered any reason why the rule applied in other jurisdictions to assignments of leases of real property and contracts involving personalty should not apply to assignments of leases of personalty. In addition, the court is unable to discern any reason why the rule should differ. For this reason, this court is confident that the Virginia Supreme Court, were it faced with this question, would adopt the following rule set forth by Justice Traynor in the context of a contract involving personalty, and apply it to assignments of leases involving personalty:
Unless an assignment specifically or impliedly designates them, accrued causes of action arising out of an assigned contract, whether ex contractu or ex delicto, do not pass under the assignment as incidental to the contract if they can be asserted by the assignor independantly of his continued ownership of the contract, and are not essential to a continued enforcement of the contract. [citing cases]. If, however, an accrued cause of action cannot be asserted apart from the contract out of which it arises, or is essential to a complete and adequate enforcement of the contract, it passes with an assignment of the contract as an incident thereof. Thus, the assignment of a contract passes from assignor to assignee an accrued cause of action for recision [citing cases], or for reformation [citing case].
Metropolitan Trust, 112 F.2d at 602.
Applying this rule to the endorsed January 14 letter, the court concludes that FSLIC did not assign the accrued arrearages under the Lease to United Leasing. The assignment neither specifically nor impliedly designates the arrearages for assignment. In addition, the right to the arrearages can be asserted by FSLIC independently of its continued ownership of the Lease, and it is not essential to the continued enforcement of the Lease.
Thus, whether the Lease was reassigned to United Leasing in January or June, the court concludes that FSLIC did not assign the right to arrearages under the Lease to *1301 United Leasing. For this reason, FSLIC will be entitled to recover those arrearages, and the defendants' motion for summary judgment must be denied.
CONCLUSION
For the foregoing reasons, the defendants' motion for summary judgment is denied, and the plaintiff's motion for partial summary judgment is granted.
NOTES
[1] As indicated by its acknowledgement on the Assignment of Lease and its signature on the UCC financing statements, C & J had notice of the assignment of the Lease to the Association.
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519 Pa. 450 (1988)
549 A.2d 81
COMMONWEALTH of Pennsylvania, Appellee,
v.
Scott Wayne BLYSTONE, Appellant.
Supreme Court of Pennsylvania.
Argued March 9, 1987.
Reargued March 7, 1988.
Decided October 17, 1988.
*451 *452 *453 *454 *455 Samuel J. Davis, John M. Purcell, Davis & Davis, Uniontown (court-appointed), for appellant.
Alphonse LePore, Jr., Dist. Atty., James J. Nesser, Ewing D. Newcomer, Uniontown, for appellee.
Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA, PAPADAKOS and STOUT, JJ.
OPINION
McDERMOTT, Justice.
A jury found the appellant, Scott Wayne Blystone, guilty of murder of the first degree,[1] robbery,[2] criminal conspiracy to commit homicide,[3] and criminal conspiracy to commit *456 robbery.[4] After further deliberation that same jury set the penalty for the murder conviction at death.[5] The appellant was also sentenced to ten to twenty years imprisonment for the robbery conviction.[6] He directly appeals these judgments of sentence.[7]
It is the practice of this Court in cases in which the death penalty has been imposed to review the sufficiency of the evidence supporting an appellant's conviction. Commonwealth v. Zettlemoyer, 500 Pa. 16, 26-27 n. 3, 454 A.2d 937, 942 n. 3 (1982), cert. denied, 461 U.S. 970, 103 S. Ct. 2444, 77 L. Ed. 2d 1327 (1983). We do so with an eye to see whether, viewing all the evidence admitted at trial in the light most favorable to the verdict winner, there is sufficient evidence to enable the jury to find every element of the crime beyond a reasonable doubt. Commonwealth v. Kichline, 468 Pa. 265, 361 A.2d 282 (1976). In the instant case the evidence presented to the jury, together with all reasonable inferences in favor of the Commonwealth, discloses the following.
On the night of Friday, September 9, 1983, Scott Blystone, his girlfriend and another couple were riding around Fayette County in Blystone's automobile. Blystone, who was driving, worried about the fact that his automobile was low on gasoline and he had no money with which to purchase more. At approximately midnight, Blystone observed Dalton Charles Smithburger, Jr., hitchhiking. Blystone announced to his companions: "I am going to pick this guy up and rob him, okay, ...?" His friends endorsed the idea, or at best did nothing to oppose it, so Blystone pulled over to pick up his victim. Unfortunately, Smithburger, who was not acquainted with anyone in the car, accepted the ride.
Once underway Blystone asked Smithburger if he had any money to contribute for the purpose of purchasing gasoline. Smithburger replied that he had only a few *457 dollars and reached into his pocket. Dissatisfied with that response, Blystone drew a revolver which he held to Smithburger's head. In no uncertain terms Blystone ordered Smithburger to shut his eyes and place his hands on the dashboard. Smithburger understandably offered no resistance. Though in the course of a taped interview he would later admit that "I almost splattered him right there in the car," Blystone assured Smithburger that he would lose only his money, not his life.
Blystone pulled the car off the road at a lonely spot and walked Smithburger at gunpoint a short distance into an adjacent field. Blystone searched Smithburger, finding thirteen dollars. He ordered Smithburger to lie face down on the ground and wait. Smithburger complied. Blystone briefly returned to his companions in the car to inform them that he was going to kill Smithburger. The best that can be said for Blystone's friends is that perhaps they were startled into ambivalence by the enormity of the statement.
In any event Blystone decided to kill Smithburger. He returned to the field where he found his victim as he had left him. Blystone knelt on Smithburger's back and asked him whether he could identify the vehicle which had picked him up. Smithburger correctly replied, "all I know is it was green and the back end was wrecked." Blystone then said, "goodbye" and emptied his revolver into the back of Smithburger's head.
Such "goodbyes" are rarely the end. Such deaths take on a life of their own and rattle through the lives of the those who know, until chance or nature loosens tongues. Appellant Blystone heard more than the voice of his passengers; he heard his own voice bragging in vivid and grisly detail of the killing of that unlucky lad. (See the Appendix attached to this opinion.)
Blystone eluded detection as Smithburger's murderer for over three months. However, his associates eventually exposed him. The testimonial evidence they contributed to the Commonwealth's case, along with physical evidence, would have been sufficient to support Blystone's convictions. *458 Additionally, an audio tape of Blystone describing the murder to an informant was presented to the jury (See Appendix). The combined effect of all this material was to present the jury with evidence of the appellant's guilt which was more than sufficient; it was overwhelming.
Nevertheless, the appellant attacks the sufficiency of the evidence supporting his robbery conviction and, consequently, the imposition of the death penalty.[8] Specifically, the appellant argues, the Commonwealth did not present sufficient evidence to satisfy the corpus delicti requirement for the crime of robbery. To establish the corpus delicti of robbery, the Commonwealth must prove a theft by criminal means. Commonwealth v. Tallon, 478 Pa. 468, 475, 387 A.2d 77, 81 (1978). In other words, the Commonwealth bears a burden to show that the crime actually occurred.
The Commonwealth presented ample evidence, apart from the appellant's own admissions, that Scott Blystone did in fact rob Dalton Smithburger. Both of the young women in the car that night testified that the armed appellant took thirteen dollars from Smithburger. One of the women testified on this point as follows:
Q. [Prosecutor]: Did Scott say whether or not he took the money?
A. He didn't have no money on him before and that is how he got the gas is with that money.
Q. With that thirteen dollars?
A. With that thirteen dollars ...
Thus the appellant's argument on this point is meritless.[9]
Apart from the sufficiency of the evidence supporting this robbery conviction, the appellant asserts a second theory *459 which would render this felony harmless for the purpose of setting the penalty for his murder conviction. Blystone argues that the robbery of Smithburger was completed prior to the murder and since the killing was not committed "while in the perpetration of a felony," 42 Pa.C.S. § 9711(d)(6), he cannot be sentenced to death.[10] This proposition is absurd.
The crime of robbery is clearly defined:
(1) A person is guilty of robbery if, in the course of committing a theft, he:
(i) inflicts serious bodily injury upon another;
(ii) threatens another with or intentionally puts him in fear of immediate serious bodily injury;
(iii) commits or threatens immediately to commit any felony of the first or second degree;
(iv) inflicts bodily injury upon another or threatens another with or intentionally puts him in fear of immediate bodily injury; or
(v) physically takes or removes property from the person of another by force however slight.
(2) An act shall be deemed "in the course of committing a theft" if it occurs in an attempt to commit theft or in flight after the attempt or commission.
18 Pa.C.S. § 3701(a).
The evidence concerning the robbery and killing was uncontroverted. The appellant searched his victim at gunpoint, taking thirteen dollars; forced him to lie down; and instructed him not to move unless he wished to die. Blystone then traversed the short distance to his automobile, remaining there only long enough to announce his murderous intent and gain the endorsement of his companions. Meanwhile, Smithburger remained motionless on the ground out of fear that Blystone would fulfill his deadly promise should he resist or attempt to flee. Indeed, Blystone described in detail how he instilled doubt in Smithburger's *460 mind as to whether his robber was merely a few feet away or fled the scene: "He never moved. He thought I was there. I stepped around him, right, and I walked a little bit in a circle and I stopped. I didn't make no noise, and I said `don't think I am gone, mother-f_____r,' and then I f_____g tiptoed off, you know." Upon his return from the automobile Blystone killed Smithburger; only then did he flee the scene. Thus, this robbery was not complete when Blystone took Smithburger's money, nor when Blystone went to his car, but when he successfully fled the scene after murdering his victim.
Finding the evidence sufficient to support the convictions, we turn our attention to what the appellant characterizes as errors of the trial court. The appellant contends that these rulings by the court tainted his trial in such a way that he must be granted another. We address these rulings of the trial judge in chronological order.
A particularly incriminating piece of evidence in the Commonwealth's arsenal consisted of a tape recording of a conversation between the appellant and a police informant (See Appendix). On the tape Blystone is heard to recall the Smithburger robbery and homicide in lurid detail. Of course, the appellant attempted to keep this evidence from the jury by means of a pre-trial suppression motion.
After a suppression hearing the trial judge denied the appellant's motion and portions of the tape were played before the jury during trial. The court found the tape admissible because the surveillance was conducted in compliance with procedures permitted under the Wiretapping and Electronic Surveillance Control Act[11] in that the informant consented to wear a "wire".[12] The Act provides in pertinent part:
§ 5704. Exceptions to prohibition on interception and disclosure of communications.
*461 It shall not be unlawful under this chapter for:
.....
(2) Any investigative or law enforcement officer or any person acting at the direction or request of an investigative or law enforcement officer to intercept a wire or oral communication involving suspected criminal activities where:
.....
(ii) one of the parties to the communication has given prior consent to such interception. However, no interception under this paragraph shall be made unless the Attorney General or a deputy attorney general designated in writing by the Attorney General, or the district attorney, or an assistant district attorney designated in writing by the district attorney of the county wherein the interception is to be made, has reviewed the facts and is satisfied that the consent is voluntary and has given prior approval for the interception; however such interception shall be subject to the recording and record keeping requirements of section 5714(a) (relating to recording of intercepted communications) and that the Attorney General, deputy attorney general, district attorney or assistant district attorney authorizing the interception shall be the custodian of recorded evidence obtained therefrom.
18 Pa.C.S. § 5704(2)(ii).
The appellant argues that warrantless consensual monitoring, as authorized by the Act, violated his rights as guaranteed by Article I, § 8 of the Constitution of Pennsylvania, which provides:
The people shall be secure in their persons, houses, papers and possessions from unreasonable searches and seizures, and no warrant to search any place or to seize any person or things shall issue without describing them as nearly as may be, nor without probable cause, supported by oath or affirmation subscribed to by the affiant.
*462 This argument has been recently accepted by the Superior Court. Commonwealth v. Schaeffer, 370 Pa.Super. 179, 536 A.2d 354 (1987).[13] We, however, have not heretofore considered the matter.
A look at the history of wiretapping in this Commonwealth reveals that the General Assembly has been cognizant of intrusions into the personal liberties of our citizens. For instance, our original statute dealing with the issue of wiretaps forbade any wiretapping unless all parties consented.[14] However, the current electronic surveillance statute strikes a balance between citizens' legitimate expectation of privacy and the needs of law enforcement officials to combat crime. In this regard the General Assembly has provided safeguards to protect the liberties of the citizens of the Commonwealth. For instance, the statute requires the Attorney General, deputy attorney general designated in writing by the Attorney General, district attorney, or an assistant district attorney designated in writing by the district attorney, to make a review of the facts of each case. Consent for the interception must be given by one of the parties. The Attorney General, deputy attorney general, district attorney, or assistant district attorney must be satisfied that the consent is voluntary. Only then will approval for the interception be given. In addition, the intercepted communications are subject to strict record keeping requirements.[15]
*463 Appellant contends, however, that despite these safeguards the statute fails to pass constitutional muster. We disagree.
A statute commands the presumption of constitutionality when it is lawfully enacted, unless it clearly, palpably, and plainly violates the constitution. Hayes v. Erie Ins. Exchange, 493 Pa. 150, 425 A.2d 419 (1981); Tosto v. Pennsylvania Nursing Home Loan Agency, 460 Pa. 1, 331 A.2d 198 (1975). Any doubts are to be resolved in favor of sustaining the legislation. Hayes, supra, 493 Pa. at 155, 425 A.2d at 421.
In the area of electronic surveillance it has already been established that one-party consensual interceptions do not violate the Fourth Amendment. United States v. Caceres, 440 U.S. 741, 99 S. Ct. 1465, 59 L. Ed. 2d 733 (1979); United States v. White, 401 U.S. 745, 91 S. Ct. 1122, 28 L. Ed. 2d 453 (1971) reh. denied, 402 U.S. 990, 91 S. Ct. 1643, 29 L. Ed. 2d 156 (1971) (plurality opinion). However, since state courts are free to provide broader protections based on state constitutional grounds than those provided by the federal constitution, Cooper v. California, 386 U.S. 58, 87 S. Ct. 788, 17 L. Ed. 2d 730 (1967) reh. denied, 386 U.S. 988, 87 S. Ct. 1283, 18 L. Ed. 2d 243 (1967); Commonwealth v. Sell, 504 Pa. 46, 470 A.2d 457 (1983), the federal precedents are not controlling, and consideration of our state constitution is required.
It has been held that the protection provided by Article I, § 8 of the Pennsylvania Constitution extend[s] to those zones where one has a reasonable expection of privacy, Commonwealth v. DeJohn, 486 Pa. 32, 403 A.2d 1283 (1979) cert. denied, 444 U.S. 1032, 100 S. Ct. 704, 62 L. Ed. 2d 668 (1980); and that Article I, § 8 creates an implicit right to privacy in this Commonwealth. Commonwealth v. Platou, 455 Pa. 258, 312 A.2d 29 (1973) cert. denied, 417 U.S. 976, 94 S. Ct. 3183, 41 L. Ed. 2d 1146 (1974). To determine whether one's activities fall within the right of privacy, we must examine: first, whether appellant has exhibited an *464 expectation of privacy; and second, whether that expectation is one that society is prepared to recognize as reasonable. Commonwealth v. Sell, supra; Katz v. United States, 389 U.S. 347, 360, 88 S. Ct. 507, 516, 19 L. Ed. 2d 576 (1967) (Concurring Opinion, Harlan, J.); Commonwealth v. Tann, 500 Pa. 593, 459 A.2d 322 (1983).
The United States Supreme Court has held that a person cannot have a justifiable and constitutionally protected expectation that a person with whom he is conversing will not then or later reveal that conversation to the police. Lopez v. United States, 373 U.S. 427, 83 S. Ct. 1381, 10 L. Ed. 2d 462 (1963) reh. denied, 375 U.S. 870, 84 S. Ct. 26, 11 L. Ed. 2d 99 (1963); United States v. White, supra; Hoffa v. United States, 385 U.S. 293, 87 S. Ct. 408, 17 L. Ed. 2d 374 (1966) reh. denied, 386 U.S. 940, 87 S. Ct. 970, 17 L. Ed. 2d 880 (1967). Furthermore, as noted above, the Court has held that one party interceptions do not violate the Fourth Amendment. United States v. Caceres, supra.
Basically, the Supreme Court has recognized the simple fact that a thing remains secret until it is told to other ears, after which one cannot command its keeping. What was private is now on other lips and can no longer belong to the teller. What one choses to do with another's secrets may differ from the expectation of the teller, but it is no longer his secret. How, when, and to whom the confidant discloses the confidence is his choosing. He may whisper it, write it, or in modern times immediately broadcast it as he hears it.
As applied to this case the above cited cases are particularly significant for two reasons: one, the Pennsylvania wiretapping statute is based on its federal counterpart, Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-20,[16] the latter of which was cited with approval by the United States Supreme Court in Caceres, id. 440 U.S. at 742, 99 S.Ct. at *465 1466;[17] and two, it is the federal body of law from which we derive our test for determining what actions fall under the rubric of a privacy right, Katz, supra, (Concurring Opinion, Harlan, J.).
Although, unless dictated by Supremacy Clause considerations, we are not bound to follow the federal interpretation of the federal act or the federal constitution in the interpretation of our state statute and/or constitution, we are in this case, persuaded by the rationale behind those decisions. As Mr. Justice White stated in the lead opinion in United States v. White,
Concededly a police agent who conceals his police connections may write down for official use his conversations with a defendant and testify concerning them, without a warrant authorizing his encounters with the defendant and without otherwise violating the latter's Fourth Amendment rights. Hoffa v. United States, 385 U.S. at 300-303 [87 S.Ct. at 412-14]. For constitutional purposes, no different result is required if the agent instead of immediately reporting and transcribing his conversations with defendant, either (1) simultaneously records them with electronic equipment which he is carrying on his person, Lopez v. United States, supra; (2) or carries radio equipment which simultaneously transmits the conversations either to recording equipment located elsewhere or to other agents monitoring the transmitting frequency. On Lee v. United States, supra [343 U.S. 747, 72 S. Ct. 967, 96 L. Ed. 1270 (1952)]. If the conduct and revelations made of an agent operating without electronic equipment do not invade the defendant's constitutionally justifiable expectations of privacy, neither does a simultaneous recording of the same of the same conversations made by the agent or by others from transmissions received from the agent to whom the defendant is talking and whose trustworthiness the defendant necessarily risks.
*466 401 U.S. at 751, 91 S. Ct. at 1126.[18] (These statements were cited with approval in Caceres, supra, 440 U.S. at 742-43, 99 S. Ct. at 1466-67).
Therefore, since we find no constitutional defect in the statute, and since the Commonwealth in this case operated in compliance with the statute, the appellant's vivid recounting of the brutal murder of Dalton Smithburger was properly admitted.
Appellant next argues that the trial court improperly sustained a Commonwealth challenge for cause of a prospective juror because that juror's opposition to the death penalty did not illustrate an inability to perform as a juror. The relevant voir dire testimony follows.
Q. [Prosecutor]: If, after hearing all of the evidence in this case and the law as his Honor, Judge Adams, will give you, and as a member of this jury you believed that the death penalty is warranted, would you impose such a penalty?
A. Does that mean "capital punishment"? I don't believe in that.
Q. That is the death penalty. Do you have a moral or religious belief against capital punishment?
A. I am a Baptist and I don't believe in capital punishment.
Q. It is against your religious beliefs to support capital punishment?
*467 A. Yes, it is.
[Prosecutor]: Challenge for cause.
[Defense Counsel]: I would object to the challenge based on her answer.
Judge Adams: The Supreme Court has recently ruled that this is a legitimate reason to challenge for cause. We would overrule the objection. Mrs. [prospective juror], we would advise you that you are not going to be asked to serve on this jury because of your feeling. I would ask you please not to discuss with any other juror the questions that were asked you or your reasons for being excused. Thank you. You may step down.
(Emphasis added).
A determination of whether to disqualify a prospective juror is made by the trial judge based on both that juror's answers as well as demeanor, and will not be reversed absent a palpable abuse of discretion. Commonwealth v. DeHart, 512 Pa. 235, 248, 516 A.2d 656, 663 (1986), cert. denied, ___ U.S. ___, 107 S. Ct. 3241, 97 L. Ed. 2d 746 (1987).
The trial court clearly considered these criteria in granting the Commonwealth's challenge.
This court, as to Juror Number 102, had no difficulty in reaching the decision that her attitude and manner, as well as her words, indicated she had personal and religious beliefs which would prevent and substantially impair her performance and duty as a juror in accordance with the court's instructions and her oath. It is conceded that the court's dismissal for cause was abrupt, and that more extensive questioning would have placed an Appellate Court in a better position to resolve the issue so far as the printed record is concerned, but this court is clearly of the opinion, based on the printed record as shown, and the attitude and manner of the juror as this court found it to be, that she did not meet the standards set forth and was properly excluded from the jury for cause.
*468 Slip op. at 60-61. Though the trial court is apologetic for the state of the printed record, that concern is unnecessary. For the purpose of ruling on the Commonwealth's motion, the dispositive questions were posed and answered as indicated by our emphasis. This exchange shows this prospective juror could not carry out her duty to follow the law as the trial judge would instruct and, therefore, was properly excluded. Commonwealth v. Sneed, 514 Pa. 597, 526 A.2d 749 (1987); Commonwealth v. Peterkin, 511 Pa. 299, 513 A.2d 373 (1986), cert. denied, 479 U.S. 1070, 107 S. Ct. 962, 93 L. Ed. 2d 1010 (1987). See Lockhart v. McCree, 476 U.S. 162, 106 S. Ct. 1758, 90 L. Ed. 2d 137 (1986).
The appellant's final assertion of error on the part of the trial court concerns the testimony of the victim's father, Dalton Charles Smithburger, Sr. Appellant argues that the trial court erroneously permitted the Commonwealth to introduce testimony of the victim's character, intelligence and propensity to follow orders. The appellant contends that the impact of this testimony was to create sympathy for the victim which was irrelevant for purposes of determining the guilt or innocence of the defendant.
Initially, we note that the appellant has waived this issue by failing to object to this specific testimony. The sidebar conference during which the appellant's trial counsel voiced his objection follows.
[Defense Counsel]: We would stipulate to the testimony of Mr. Smithburger if it is merely to the fact that he identified the body as his son.
[Prosecutor]: I intend to offer him to testify as to (1) when he last saw his son and (2) what he was wearing and (3) where he made identification of the body and also (4) what type of student his son was. [parentheticals added]
[Defense Counsel]: I would stipulate to the testimony as to (3) his identifying his son, but I don't see any relevancy to (1) the last time he saw his son and (2) what he was wearing, and I would object. [parentheticals added]
*469 Judge Adams: Does the Commonwealth wish to call him in light of the stipulation?
[Prosecutor]: Yes.
Judge Adams: We will permit you to call him. We would overrule the objection.
It is apparent from this record that the prosecutor offered this witness to address four factual matters. The appellant's trial counsel was willing to stipulate to one of these points and objected to two others. The fourth matter, which is the issue here, was not opposed then or later and, therefore, has been waived.
However, it is of little import that the appellant did not technically preserve his objection because the substantive argument supporting it is meritless. That argument points to the following testimony as prejudicial to the appellant.
Q. [Prosecutor]: Mr. Smithburger, what kind of student was your son?
A. Well, he went to Tech School and he passed his welding class.
Q. How would you describe your son was he a troublemaker?
A. No, never a troublemaker.
Q. How was he as far as listening?
A. He listened pretty good.
Q. If someone were to tell him something, would he do it?
A. Yes, he would.
Q. I believe you told the police that he was in special education?
A. Yes.
[Prosecutor]: I have no further questions.
Evidence which has the effect of arousing sympathy for a crime victim is prejudicial and inadmissible when otherwise irrelevant. Commonwealth v. Story, 476 Pa. 391, 402, 383 A.2d 155, 160 (1978). In this case it is not apparent that the above testimony had the threshold impact of evoking sympathy for the victim in the minds or hearts *470 of the jurors. The assessment of the trial court was that the "testimony was delivered in a matter-of-fact tone and was not done in a manner which would inflame the jury." Slip op. at 36. The mere characterization of the victim as an individual having a learning disability does not make his homicide more, or less, heinous.
Furthermore, this evidence was probative of the victim's passive nature and thereby lent credence to the Commonwealth's account of events prior to his death. Specifically, evidence of the victim's passiveness served to explain, at least in part, why Smithburger remained prone in the field while Blystone was at his automobile discussing with his companions the necessity of killing him. The appellant himself in his taped statement admitted that he was surprised by Smithburger's obedience.
I thought I was going to have to chase him through the field when I went back. I thought for sure this mother-f_____r ain't going to lay there, but I wanted to warn them you know, Jackie and George I wanted to warn them that I was going to waste him I went back. I went back just expecting this mother-f_____r to be through the fields. I had to laugh.
The testimony of Mr. Smithburger, being more probative than prejudicial, was properly allowed by the trial court. See Commonwealth v. Ulatoski, 472 Pa. 53, 63 n. 11, 371 A.2d 186, 191 n. 11 (1977). See also Commonwealth v. Story, supra, 476 Pa. at 402, 383 A.2d at 160.
In addition to allegations of error on the part of the trial court, the appellant asserts that his trial counsel was ineffective because he failed to investigate and present an alibi defense. Blystone, represented by a different attorney, presented this complaint to the trial court long after the jury rendered its verdicts and set the appropriate penalty for the homicide conviction. After a post-trial hearing conducted to air this grievance the trial court determined that appellant's argument was meritless. We concur.
*471 Initially, we note the appellant did not comply with the mandatory notice provision of the rule governing the presentation of an alibi defense, which provides:
C. Disclosure by the Defendant
(1) Mandatory.
(a) Notice of Alibi Defense. A defendant who intends to offer the defense of alibi at trial shall, at the time required for filing the omnibus pretrial motion under Rule 306, file of record notice signed by the defendant or the attorney for the defendant, with proof of service upon the attorney for the Commonwealth, specifying intention to claim such defense. Such notice shall contain specific information as to the place or places where the defendant claims to have been at the time of the alleged offense and the names and addresses of witnesses whom the defendant intends to call in support of such claim.
Pa.R.Crim.P. 305.C.(1)(a). The consequences to a defendant who ignores the notice provision are also made clear in the rule:
(d) Failure to File Notice. If the defendant fails to file and serve notice of alibi defense or insanity or mental infirmity defense as required by this rule, or omits any witness from such notice, the court at trial may exclude the testimony of any omitted witness, or may exclude entirely any evidence offered by the defendant for the purpose of proving the defense, except testimony by the defendant, or may grant a continuance to enable the Commonwealth to investigate such evidence, or may make such other order as the interests of justice require.
Pa.R.Crim.P. 305.C.(1)(d).
This was not, however, an instance in which the alibi defense was barred simply because of a failure to comply with the Rules of Criminal Procedure. Blystone chose to present no defense whatsoever after the conclusion of the Commonwealth's evidence. At that point in the proceedings the trial judge conducted a colloquy out of the jury's presence to ensure that the appellant understood his right to advance evidence on his behalf. The appellant gave no *472 indication to the trial court that an alibi defense was feasible. Consequently, there was not even an opportunity for the court to abuse its discretion in the application of the alibi defense rule, Pa.R.Crim.P. 305.C.(1).
Additionally, it is apparent from the record of the post-trial hearing that Blystone's alibi was a fabrication. At that proceeding the appellant waived the attorney-client privilege of confidentiality existing between him and his trial counsel. Trial counsel then testified that the testimony of the alibi witnesses would be contrary to the facts as recited to him by Blystone. In other words, the alibi witnesses would be perjuring themselves. It was also apparent that Blystone did not tell his trial counsel of the possibility of establishing his presence elsewhere at the time of the crime until after the Commonwealth rested its case.
During the post-trial hearing the trial court, through its own diligence, went so far as to locate one of the appellant's alibi witnesses and import her from West Virginia for the purpose of testifying at the proceeding. After hearing the witness' testimony, and juxtaposing it with that which she had rendered in a separate prosecution arising from the same incident, the trial court found the witness was not credible. Slip op. at 56.
This Court will not label counsel ineffective for failing to suborn perjury. Therefore, the appellant's argument is meritless.
In addition to the claims already aired, the appellant raises three arguments challenging the constitutionality of the death penalty. One of these arguments is couched in terms of error by the trial court. The appellant asks: "Whether the trial court erred in denying the defendant's motion for an evidentiary hearing to present testimony concerning the prosecution-proneness of the jury that convicted him?" To accept the appellant's contention of error, would be to accept the worth of his substantive argument to the effect that death qualified juries are prosecution-prone. We will not do this. Commonwealth v. DeHart, *473 supra, 512 Pa. at 250-53, 516 A.2d at 664-665. See Lockhart v. McCree, supra.
The appellant next asserts that the death penalty statute is unconstitutional under both the United States and Pennsylvania Constitutions because of its mandatory language. The part of the statute operative in this instance states: "the verdict must be a sentence of death if the jury unanimously finds at least one aggravating circumstance... and no mitigating circumstance," 42 Pa.C.S. § 9711(c)(1)(iv). We will not dwell on this issue beyond noting that the appellant's argument was expressly refuted in the case of Commonwealth v. Peterkin, supra, 511 Pa. at 326-28, 513 A.2d at 387-88.
The appellant also argues that this Commonwealth's death penalty sentencing statute violates his Eighth Amendment protection against cruel and unusual punishment[19] because the operative aggravating circumstance in this case[20] is overbroad, arbitrary, and does not differentiate those murders which justify the penalty from those which do not.
The statutory procedure governing the imposition of the death penalty in this Commonwealth channels the discretion of the sentencing body to prevent the arbitrary and capricious imposition of capital punishment. Commonwealth v. DeHart, supra; Commonwealth v. Zettlemoyer, supra. Since we have previously held that the sentencing system on its face does not operate in an arbitrary or capricious manner, Blystone cannot prove a violation of his *474 constitutional rights by mere assertions that other defendants who were similarly situated did not receive death sentences. See McCleskey v. Kemp, 481 U.S. 279, 305, 107 S. Ct. 1756, 1774, 95 L. Ed. 2d 262 (1987), reh. denied, ___ U.S. ___, 107 S. Ct. 3199, 96 L. Ed. 2d 686 (1987). The focus of his challenge must, therefore, be upon the sentencing mechanism as it has been employed to render his death sentence.
A sentence of death is not merely the product of evidence which supports a particular aggravating circumstance. The Commonwealth must first prove beyond a reasonable doubt that an aggravating circumstance applies to the particular homicide. Thus, an aggravating circumstance has no relevance in the abstract; it can only be applied against an individual defendant by the particular sentencing body weighing the evidence before it. Should the fact-finder determine the Commonwealth has satisfied its burden of establishing the aggravating circumstance, then, and only then, does a penalty of death become cognizable. Therefore, the establishment of an aggravating circumstance represents the crossing of a threshold from a condition in which the sentencer cannot render a verdict of death to one in which it must. 42 Pa.C.S. § 9711(c)(1)(iv).
However, an individual may thwart the imposition of the death penalty by offering evidence of mitigating circumstances concerning his character, record, and the circumstances of the offense. 42 Pa.C.S. § 9711(e). In this manner the fact-finder may consider any relevant circumstance that could cause it to decline to impose the death penalty. A balancing of aggravating and mitigating factors which favors the defendant cannot be reversed, as that determination by the sentencing body is unreviewable. On the other hand, a sentence of death produces an automatic appeal to this Court in which we will curb abuses of the trial or sentencing proceeding.[21]
*475 There is no question that the death penalty may be constitutionally imposed for a murder committed in the course of a planned robbery. McCleskey v. Kemp, supra, at 305, 107 S. Ct. at 1774; Gregg v. Georgia, 428 U.S. 153, 96 S. Ct. 2909, 49 L. Ed. 2d 859 (1976), reh. denied, 429 U.S. 875, 97 S. Ct. 197, 50 L. Ed. 2d 158 (1976). In this case the jury expressly found this aggravating circumstance to exist and, thus, Blystone's case rose above the level below which the death penalty may not be imposed. Since he refused to present any evidence of mitigation, there was nothing to block that passage. Based on its finding that there existed one aggravating and no mitigating circumstance the jury returned a sentence of death. We find no fault with the sentencing body's performance of its duty.
Finally, it is the practice of this Court to examine, sua sponte, whether the sentence of death is excessive or disproportionate to the penalty imposed in similar cases, considering both the circumstances of the crime and the character and record of the defendant. Commonwealth v. Frey, 504 Pa. 428, 475 A.2d 700 (1984), cert. denied, 469 U.S. 963, 105 S. Ct. 360, 83 L. Ed. 2d 296 (1984). In examining this claim we emphasize that the statute requires a verdict of death in those instances in which the jury finds one or more aggravating circumstances and no mitigating circumstance, 42 Pa.C.S. § 9711(c)(1)(iv). Thus, by the very *476 terms of the statute the death penalty cannot be considered excessive to the circumstances of this defendant.
Further, we note that the continuing study of capital cases maintained by the Administrative Office of Pennsylvania Courts (AOPC) reveals that Blystone's punishment is not out of proportion to that imposed on similarly situated defendants.[22]
For the foregoing reasons, we sustain the convictions of murder of the first degree, robbery, and criminal conspiracy to commit those offenses. The sentences of death and ten to twenty years imprisonment are affirmed.[23]
ZAPPALA, J., files a dissenting opinion in which LARSEN, J., joins.
APPENDIX
THE FOLLOWING IS AS THE TAPE WAS HEARD BY THE COURT REPORTER:
BLYSTONE: Do you remember the body they found along the road next to the Redhead along the Brownfield Road? Remember the body they found?
MILLER: Huh-uh.
BLYSTONE: Smithburger found him laying in a field shot six times.
MILLER: I don't read the f_____g paper.
BLYSTONE: Shot six times in the head.
MILLER: Six times?
BLYSTONE: Six times in the back of the head.
MILLER: Must have been a strong son-of-a-b____, huh?
*477 BLYSTONE: They found five bullets in his head and a fragment of one and they said he had on a blue suit, a three piece suit, and lived up on the mountains, and they found him about a mile from the Redhead. Remember?
MILLER: Scott, I don't read the God damn paper.
BLYSTONE: Tell you what go to the library.
MILLER: I am not going to no f_____g library.
AT THIS POINT JUDGE ADAMS ASKS THE OFFICER TO STOP THE TAPE. HE THEN INQUIRED OF THE JURORS WHETHER OR NOT THEY COULD HEAR THE TAPE AND SOME OF THE JURORS RESPONDED THAT THEY COULD HEAR PORTIONS OF IT BUT SOME OF THE PORTIONS THEY COULD NOT UNDERSTAND.
JUDGE ADAMS: The tape gets stronger as it goes along. You may continue, officer.
OFFICER THEN CONTINUES TO PLAY THE TAPE, AND THE FOLLOWING IS THE TAPE AS HEARD BY THE COURT REPORTER:
BLYSTONE: Me and Jackie you got to keep this quiet we were out one night, and we didn't have any money, and I had a .22 and I kept telling them that we got to get money. We tried all kinds of s___ and that wasn't working so I said "f___ it I'm going to just drive up and blow somebody's brains out and take their wallet." George was with us. Don't burn me.
MILLER: You think I'm going to f_____g go to the state cops, man, and tell them "hey, look, and all this and that, I know this about Scott Blystone."
BLYSTONE: Don't even tell Jackie that I told you this or she'll f_____g flip. Anyway, there's this guy hitchhiking (inaudible to reporter) and it was about 11:00, and we picked him up. Jackie is sitting in the middle, and so he got in, you know, and he said he was going up over the mountains, and I said "that's where we are headed." I said "we need gas money" and he said "well, I got a little bit." You know how everybody says they got a little bit.
*478 MILLER: Yeh.
BLYSTONE: So I said "how much you got?" He said "not that much but I can give you something for gas" and then we pulled up to the foot of the mountain that road that turns off from Hopwood.
MILLER: Taste this man. This is bad.
BLYSTONE: I pulled off and I said "I got to make sure, man, before I go up this mountain 'cause I ain't got gas to get back and then what the f___ would I do."
MILLER: Wait a minute, you picked this guy up?
BLYSTONE: Yeh, in Hopwood on Route 40. I knew what I was going to do. I told everybody what I was going to do.
MILLER: Before you did it?
BLYSTONE: Yeh. They thought I was bull-s______g. Everybody thinks that Scott bull-s___s.
MILLER: Ain't that good apple pie?
BLYSTONE: It is pretty good.
MILLER: I told you you should have got one.
BLYSTONE: You don't believe this, do you?
MILLER: Go ahead.
BLYSTONE: He said something that ticked me off, you know, like "I can only give you a few dollars" or something like that, and so I pulled the gun out and stuck it around behind Jackie and I put the gun to his head and I said "get your f_____g hands on the dashboard," and then I started reaching in his f_____g coat. That's the part I got to leave out, that and one other part.
MILLER: Did he have a gun?
BLYSTONE: No, but I thought he did, and I almost splattered him right there in the car. That's when the car was wrecked the back end was real f____d up, real identifiable. I told everybody what I had to do. So (inaudible to reporter) I said to him "get them on the dashboard, put them up there" and then we went out the Brownfield Road and stopped for a second. I told George I said "you get ahold *479 of him until I get out of the car and come around to the other side." I didn't want this mother-f____r to get out and run, you know.
MILLER: George was holding him in the car, huh?
BLYSTONE: George was scared to death.
MILLER: He held him there, didn't he?
BLYSTONE: F_____g right.
MILLER: He didn't?
BLYSTONE: I went around the other side of the car and put the gun to him and said "get out." I went back in the field with him. "George, come on" I said, "help me." George kept f____g around. Jackie told me that George was back there making excuses "I got to light a cigarette" and "just a minute" and (inaudible to reporter) and "I'm getting out" and all this s___.
MILLER: He was scared.
BLYSTONE: In the meantime I had him back there searching him. If found his money (inaudible to reporter) which wasn't f_____g much at all.
MILLER: How much was it?
BLYSTONE: I guess I can tell you because the cops wouldn't know $13.00.
MILLER: $13.00?
BLYSTONE: Yeh, unlucky mother-f____r, it was a Friday and he had $13.00. I said "where's the rest" and he said "that's all I got." I told him "lay down," and I said "you wait right here. I'll be right back." I said "don't move or I'll blow your f____g brains out." He said "I ain't going nowhere."
MILLER: You going to eat these fries?
BLYSTONE: No, go ahead. So then I ran back to the car. I said "he has got" (inaudible) I didn't know how much it was. I said "he has got about $15.00 on him."
MILLER: Ain't no wonder you don't want them, man; they are f_____g cold.
*480 BLYSTONE: I said "he can identify us he was looking." He kept looking. I kept telling him "close your f____g eyes, you mother-f____r."
MILLER: When he was down on the ground?
BLYSTONE: No, when he was in the car. He kept looking at us, you know, and he was looking in the back seat and I said "shut your f_____g eyes, man." He'd go (some sort of sound), and I said "turn your f_____g head." He would turn his head like that, and I said "man, you're dead." So then I ran back to the car and told them "I got to kill him," said "can everybody handle it."
MILLER: You left him there and you ran back to the car?
BLYSTONE: He never moved. He thought I was there. (inaudible) I stepped around him, right, and I walked a little bit in a circle and I stopped. I didn't make no noise, and I said "don't think I am gone, mother-f____r," and then I f_____g tiptoed off, you know. I told them I said "I'm going to kill him." Everybody said "yeh, go ahead, kill him," you know, so I f____g ran back there and got over top of him and I said "what kind of car were you in tonight?" He said "I wasn't driving, man." He said "I told you I don't have a car," and I said "what kind of car picked you up?" He said "all I know is it was green and the back end was wrecked." I said "goodbye" and he tightened up, and I f____g wasted him. Blood splattered all over me, and then I came running back to the car jumped in the car. Jackie had it in drive. I shot him six times. You should have heard it, man pow, pow, pow, pow, pow, pow. Brains started oozing out of this f___. Every hole I would put in his head, brains would start oozing out each time I shot him, right?
MILLER: Uh-huh.
BLYSTONE: I found brains on my nose. Jackie picked them off my face that night. I jumped in the car, and the car was f____g rolling. We went back to George's house and got the blood off me.
MILLER: I bet they was scared. They probably thought you was bull-s______g.
*481 BLYSTONE: I know. It's like they didn't believe me. I had blood all over me.
MILLER: Was George there?
BLYSTONE: Yeh.
MILLER: He was right there?
BLYSTONE: No, he didn't get out of the car. He never got out of the car. Then I ran back, and I didn't say nothing to him until later on and I said "man, you were supposed to be with me." Then Jackie told me what he was doing he was stalling. I left some evidence back there. When I was searching him I pulled out a pack of cigarettes and I picked up the pack with my bare hand. We sat around (inaudible).
MILLER: Pack of cigarettes?
BLYSTONE: I know for two hours we sat at the house. I sat there and I said "man, they can't get the footprints there is a million out there." "There ain't no scrapings under his nails or nothing, or under mine," and I said "we got all the blood off." I kept telling them "get that pack of cigarettes." I said "that's the only thing that can get me." I said "f___ it we are going back down," and then we ran out of gas we ran out of gas out there.
MILLER: Where at?
BLYSTONE: Right after we went back.
MILLER: You ran out of gas right there?
BLYSTONE: About 200 yards from it.
MILLER: Back towards the gas station?
BLYSTONE: Uh-huh.
MILLER: You didn't have far to walk then?
BLYSTONE: Huh-uh. Anyway, we got back there, and I told George I said "look, the place might be staked out." I said "we are going to get out of the car like we are taking a p___," and I said "I'll take you over to the body and stand there and just keep talking bull-s______g" and then I said "you look over and notice and say `hey, what's that'"?
*482 MILLER: You like that apple pie?
BLYSTONE: Uh-huh. So we get over there, right get out of the car.
MILLER: I'd like another bite of that mother-f____r too.
BLYSTONE: (inaudible to reporter).
MILLER: You should have bought one of these. You should have let me buy you one.
BLYSTONE: We get out of the car, pull our d___s out and start p_____g, and George says "what's that?"
MILLER: You didn't p___ on him, did you?
BLYSTONE: Huh-uh. George said "what's that look" and we were talking nice and loud in case there was any cops in the bushes. He said "right there" and I said "I don't know" and I said "my God, it looks like a body" and George said "no, man" and I said "look, man, it is a f_____g body."
MILLER: In case there was somebody around?
BLYSTONE: (inaudible to reporter) went back there and said "if you ask me, George, I blew his head off, man."
MILLER: (inaudible).
BLYSTONE: So he said "my God, we had better call the police." I said "yeh, let's look for some I.D. and see if we can find out who he is." I started looking. I had this f_____g light looking around.
MILLER: Just in case there was somebody around?
BLYSTONE: Right. I said "try to find some I.D. on him." I knew we were looking for the cigarette pack couldn't find it nowhere. Then I remembered when he laid down when I took the stuff off of him, I threw it down in front of him. I threw it down in front of him when he laid down he laid straight down.
MILLER: On his face?
BLYSTONE: I said "George, it must be under his f_____g body" and we walked over. George put the light on this guy. I grabbed him by his f_____g coat, pulled him up *483 moved him up, and man, he was nothing put a pool of blood. One eye was out and his f_____g eyebrows his whole brow, man, was like real swollen looked like somebody had beat him with a baseball bat, cheeks were all swollen. There was holes in them and coming out of his throat, and s___, his teeth were in the ground. They were blown in the ground.
MILLER: Big time, huh?
BLYSTONE: This f____r was done he was a f_____g mess. I tell you he was drenched in f_____g blood. I picked the pack up and I stuck it in. I said "man, let's call the police." We jumped back in the car, went back to the house, and waited all night.
MILLER: You took that pack of cigarettes off of him?
BLYSTONE: We smoked them. They had blood on the filters and we smoked the f_____g cigarettes, and we waited right. We kept waiting and waiting to hear something on the TV or the radio.
MILLER: Were they "Kools," man?
BLYSTONE: No, I can't tell you what they were 'cause that's another thing too they were unusual.
MILLER: I don't give a f___.
BLYSTONE: Then we went back two or three hours later, right.
MILLER: You went back three times?
BLYSTONE: Twice.
MILLER: Oh.
BLYSTONE: I killed him and then we went back for the cigarettes, and (inaudible) So we went back to the house, right, and we are sitting around listening and waiting just f_____g waiting. I think about
MILLER: You went back to George's house?
BLYSTONE: Uh-huh.
MILLER: After you done run out of gas?
BLYSTONE: Well, when we left there the second time when we got the f_____g cigarettes, we are going up the *484 f_____g road and the car goes (sound) oh, f___, man, I put it in neutral and drifted it as far as I could and then pushed it over to the gas station, and then this dude got us some gas downtown.
MILLER: You must have been right up on top of the hill then?
BLYSTONE: Yeh so anyway, about 11:00 the next day
MILLER: Because I know you and George can't push that car up that f_____g hill.
BLYSTONE: Not uphill, no. It drifted a good ways. I was rolling. When I came out I was rolling. We were acting like we found a dead body. So the next day we all went to sleep for three or four hours, and got up and turned it on, and we were waiting and waiting nothing, man no TV, no radio, nothing. They had to find him. I said "they should have found him at the crack of dawn." Finally on WPQR "we interrupt this" you know how they bull-s___ "body of an unidentified man found" I don't even think they said "shot to death" they said where he was that he was dead, and about an hour or so later then said that he was shot. Then it came out in the papers that he was shot six times in the head, and they kept talking about it on the radio.
MILLER: This next day?
BLYSTONE: Yeh. It was on TV and it was on the news 6:00 news. It was in the paper for about three days that the State Police needed help in the slaying that a man was shot with a .22 caliber pistol six times in the back of the head along Brownfield Road, and that he was 6-3 and weighed, I think, 195.
MILLER: Is that the gun we shot off my porch?
BLYSTONE: I wasted him, Miles. That mother-f____r, when I got over him, I was down
MILLER: You still got that f_____g thing now?
BLYSTONE: That's why I told you I couldn't sell it the murder weapon.
*485 MILLER: I hope you got that mother-f____r put away.
BLYSTONE: I buried it. I bent down over top of him
MILLER: Up there at your dad's house?
BLYSTONE: In the woods. I put it down to his head, and when I shot, man, the barrel was only this far from his face. Every time I fired, f_____g s___ would splatter in my f_____g face. I got up and ran back to the car, but they didn't believe it. Everybody was real (inaudible) real claim 'cause all they could hear was shots. We went back Jackie saw it couldn't have been right from here to the car, and when George lit that lighter and I picked him up, you could see his face and he looked like a f_____g ghoul like a mummy or something. His face was all f_____g swollen and black and blue. His eyes were clouded over. His f_____g teeth blew all his f_____g teeth out, and about half of his jaw came off, but nothing ever happened. Nobody ever came to us. Nobody ever ask no questions nothing it's an unsolved murder.
MILLER: Man, oh, man.
AT THIS POINT THE TAPE WAS STOPPED.
JUDGE ADAMS: Officer, you may go into my chambers to adjust the tape.
THE OFFICER AND ATTORNEY SOLOMON GO INTO THE JUDGE'S CHAMBERS TO ADJUST THE TAPE.
AFTER DOING SO, THE OFFICER AND ATTORNEY SOLOMON RETURN TO THE COURTROOM AND THE TAPE RECORDING, AS HEARD BY THE COURT REPORTER, IS AS FOLLOWS:
BLYSTONE: What I am trying to tell you, man, is it's easy. It's f_____g easy, you know.
MILLER: To kill somebody?
BLYSTONE: To get away with it.
MILLER: Yeh, I guess so like that God damn.
BLYSTONE: It was wild. You should have seen it. You should have seen George give me that f_____g look. He was standing there p_____g. He was standing like this and he *486 was f_____g looking, you know. (inaudible) When I turned him over I thought he was going to (inaudible) boom, boom, boom I was ready to go again.
MILLER: You had it loaded up again, huh?
BLYSTONE: I would have man. It was I was ready to go I swear. Miles, this man is six feet. Jackie said when he put his hand like this (inaudible), I said "put your hands on your head." He put them like this and his f_____g hands curled clean down over his knees.
MILLER: He was a big dude?
BLYSTONE: I said "don't you move." I told him I said "I'll splatter you all over this f_____g car." He said "I ain't doing nothing." I said "don't you touch the doorknob don't touch my girl." I said "don't you take your hands off your legs or I'll waste you" and when I told him "goodbye"
MILLER: He didn't try f_____g nothing he never tried to get away or nothing?
BLYSTONE: No. I thought I was going to have to chase him through the field when I went back. I thought for sure this mother-f____r ain't going to lay there, but I wanted to warn them you know, Jackie and George I wanted to warn them that I was going to waste him I went back. I went back just expecting this mother-f____r to be (inaudible) through the fields. I had to laugh.
MILLER: So when you came back to the car you just f_____g said "I'm going to waste the mother-f____r", and when you went back to him you said "I'm going to waste you" and he didn't
BLYSTONE: No, I didn't tell him then.
MILLER: f_____g get up or nothing?
BLYSTONE: I didn't tell him then. I didn't tell him I was going to waste him them. I asked him what kind of car he was in and he said "all I know is it was green and it was wrecked in the back." I said "well, goodbye." He tightened *487 up tensed up. I think he s___ himself. His whole body went rigid because I was sitting on him.
MILLER: You was sitting on him?
BLYSTONE: Sitting on his back, you know had my knees across him, and I told him "well, goodbye," (inaudible) the barrel. So I put it to his head and then pulled it off an inch and then I said "goodbye." He went like that, and that's the last move he made and I hit him.
MILLER: He didn't move after that?
BLYSTONE: He never moved.
MILLER: I guess not, man f_____g six pieces of lead flying in your f_____g head.
BLYSTONE: Pow, pow, pow, pow, pow, pow. I jumped up, came running back. We went back to the house and Jackie said "what's that on your face" and I said "that a f_____g piece of his brain." She said, "oh, my God, brains." (inaudible) and was playing with it and threw it in the ashtray had to wipe my face of had to take a shower and soak my clothes in cold water. You know that number 12 football jersey I had, the white jersey with the blue shoulders?
MILLER: Yeh.
BLYSTONE: That's the one I killed him in. I think I had these pants on too I am not sure. These are jeans. I forget what it was.
MILLER: God damn. You f_____g (inaudible) you just f_____g done it. You don't want none of this milkshake, do you?
BLYSTONE: (inaudible) There ain't nothing to getting away with something, you know. It's very easy. If you'd go
MILLER: Wait until I throw this s___ in the back of the truck, man. I am not going to throw it down here. That's f_____g ignorant. I'll give this sandwich to Rover. Remember Rover? I hope it f_____g blows out all them papers and s___ you know.
*488 BLYSTONE: If you know what you are doing, man, you can get away with anything, including murder. It ain't hard at all.
MILLER: God damn.
BLYSTONE: I knew the only way I could get caught is if somebody talked, but nobody's going to talk 'cause I'm going to kill them too.
MILLER: Yeh, no s___.
BLYSTONE: George ever since then George has been like
MILLER: Ain't you afraid that f_____g George might tell somebody?
BLYSTONE: No, see I told George that I'd waste him too. I said "I'll torture you." I told him I'd blow his f_____g c____ off and everything else if he opens up his mouth. Like (inaudible). He is an accessory to murder. He went back there and touched the body with me, and Jackie's an accessory.
MILLER: How did he touch it if he was holding the f_____g lighter?
BLYSTONE: He touched him. He was feeling around on the ground and around the body. I didn't want to touch it because of the evidence but I thought that is where the mother-f____r is. I said "it's under his body." When I took the s___ off of him I threw it on the ground, and then I told him to lay down on the ground, and he got down on his knees and got down. Sure enough it was right there. I rolled him over and it was under his f_____g chest, and I said "we got it let's get the f___ out of here. Let's go call the police and then tell them about this body."
MILLER: You didn't call them though?
(BACKGROUND NOISE INAUDIBLE TO REPORTER)
BLYSTONE: You ain't going to say nothing about this?
MILLER: What the f___ do you think even if I did.
(INAUDIBLE TO REPORTER)
*489 MILLER: You know, if I don't find a job pretty soon, man, I'm going to f_____g go steal something.
BLYSTONE: Murder is a real f_____g experience. It's wild. She thinks it's wild.
MILLER: Did she freak out?
BLYSTONE: No she's all right. She was worried for a few days. I was worried about her losing it, but she wasn't right there when I wasted him.
MILLER: She's still f_____g involved.
AT THIS POINT THE TAPE WAS STOPPED BY THE OFFICER AND ADJUSTED.
JUDGE ADAMS: You may start the tape.
OFFICER STARTS TAPE AND THE TAPE RECORDING, AS HEARD BY THE COURT REPORTER, IS AS FOLLOWS:
BLYSTONE: George never believed me. When I used to say "I'll kill him" he'd look at me like "yeh, sure, okay," but now when I tell George "hey, I'll kill you," he looks at me like "this mother-f____r is going to kill somebody."
MILLER: He thinks you are for real, ain't it?
BLYSTONE: He thinks I'm for real.
MILLER: That you have the nerve?
BLYSTONE: When I tell him that I'll kill him, it don't mean I'm going to "beat you up or hurt you; it means I'm going to kill you," and Jackie looks at me different, you know.
MILLER: The only thing I'm really f____d up about, Scott, is
BLYSTONE: It don't make you feel bad, Miles. It don't make you feel like an ogre.
MILLER: You don't dream about it or nothing, huh?
BLYSTONE: No. We laugh about it. Miles, it gives you a realization that you can do it, man.
MILLER: And get away with it.
BLYSTONE: You can walk up and
*490 MILLER: I hope this ain't your mom.
BLYSTONE: You can walk and blow somebody's brains out and you know that you can get away with it. It gives you a feeling of power, self-confidence, you know. Like, I mean I had confidence in myself before because I did it, but Jackie and George they had doubt in their minds and I said "the mother-f____r does this, I'm going to kill him," but now when I say it to them
MILLER: You just did it to prove it to them?
BLYSTONE: No, it was necessary. The guy could identify us, you know. It proved a point at the same time. He saw my face, Jackie's face, George's face, and he saw the car, you know, and we talked to him for five minutes before I even pulled the gun, and he was looking at us and all this s___.
MILLER: That freaks me out, man, that he didn't even try to get away.
BLYSTONE: He was so scared. When I was searching him, his body was shaking.
MILLER: He acted like he was stupid, man.
BLYSTONE: He might have tried to get away, you know, but like I said, I walked away from him out to where I could walk without making no noise, and I stood there for a minute stood there, and I didn't make a sound and he didn't move, man. Then I made a noise and said "don't think I'm gone." I said "I'm right here. You move and I'll kill you." Then I went back to the car and I said "look, I got to go back there and kill him," and I said "does anybody have any f_____g beefs," no, kill him.
MILLER: Everybody said "kill him," huh?
BLYSTONE: Yeh. I ran back to the f_____g guy and bent over him.
MILLER: And George even said "kill him?"
BLYSTONE: Yeh, George said "kill him."
MILLER: God damn.
BLYSTONE: And I f_____g killed him got back in the car
*491 MILLER: You think he wouldn't say nothing because he didn't even want to go out with you.
BLYSTONE: He wanted to come. He run his mouth, like I am saying.
MILLER: He didn't want to go the second time?
BLYSTONE: To go back to see the body, yeh, he wanted to, but once he saw the body he realized. I don't know where he though the blood might have come from his brains, or you know, but it didn't him him, and when he was standing there p_____g, Miles, his eyes were like
MILLER: Glued on the guy?
BLYSTONE: He'd look at the guy and then look at me (inaudible) and then when we lifted him up and George seen (inaudible).
MILLER: He must have had a lot of blood on him, all over his clothes and s___?
BLYSTONE: Right blew his eye out it was all over him.
MILLER: You should have took his jacket, man, to keep your ass warm (inaudible). I would have if I'd killed so somebody, man (inaudible).
BLYSTONE: (Inaudible), and like I said, the weirdest thing was his f_____g eyebrows. It looked like somebody took this f____r and beat him with a baseball bat in the face. The concussion, man, from them bullets hitting him from the back and then coming up and slamming against his skull and cheekbones and s___ and roof of the mouth, it looked like something off of a horror movie, a monster. His eyebrows were out to here, his f_____g cheekbones were out to here, his nose was real swollen and part of it was blown off his teeth were gone. It blew his teeth you could see his teeth sticking in the ground.
MILLER: Wasn't the wind blowing or anything that night to blow the f_____g light out in your lighter?
BLYSTONE: It didn't blow it out. We both had a lighter. We were looking around like we were looking for I.D., but we wasn't.
*492 MILLER: God damn (inaudible).
BLYSTONE: I saw the jacket Dalton Smithburger but don't tell nobody because they might be related, you know. A guy might blow your f_____g head off for just talking about.
MILLER: Yeh, I imagine no s___.
BLYSTONE: He lives up in Farmington, I think. He lives up on the mountain somewhere Farmington, Chalk Hill, or Markleysburg.
MILLER: Did he freak out when he seen you wasn't taking him up over the mountain?
BLYSTONE: Yeh, when I saw him there on that road there I was checking him out, you know, and I pulled over and he said "heading for the mountain" and I said "hey, we are going up there too" and he said "that's good" and I said "but look I need some cash" and he said "well, I don't have much money." I pulled off down that road and then I said "look, if I go up this mountain I got to have some money because I won't be able to get back." I said "I don't mind taking you up but ..."
MILLER: When did you put the f_____g gun on him, man?
BLYSTONE: I'll tell you. I told him I was going to take him up because we were going ourselves, but I said "we got to have a way back," and he said "well, I got a few dollars on me," and I said "I don't know." He said "I can give you a few for gas" and then he started getting in his jacket and then I reached around Jackie and I said "put your f_____g hands on the dashboard," and he said "oh, oh" and I said "put your f_____g hands on the dashboard." I kept telling him, I warned him I said "the more you open your eyes, the more trouble you are going to be in." He kept f_____g trying, man. He kept sneaking looks. He'd see a lightpole coming by, you know, through his eyelids, and he would look up and look around to see where he was, and I said "mother-f_____r, shut your f_____g eyes, man." I knew when I pulled the gun I was going to kill him (inaudible). He saw the back of the car, you know.
*493 MILLER: When did he do that?
BLYSTONE: When we picked him up. He came from the back and he could see it was a green Dart with a a f_____g demolished rear end, and that ain't hard to f_____g identify, and I told everybody I said "look, if I would have killed that mother-f____r, we would be in jail right now." (Inaudible) All the guy had to do he didn't have to say it was a Dart or Dodge. All he had to do was to say a green car with a mashed rear-end and they would pick me up as the driver.
MILLER: Yeh, 'cause there ain't none around.
BLYSTONE: Yeh, take me in front of him and he will say "that's the f_____g guy right there the guy who robbed me," so I told them the only think to do was to f_____g kill him. I said "do you want to end up in jail?" Believe me, if he was alive we'd all be in jail for armed robbery (inaudible). That's why I don't want to f___ around any more. If I think that mother-f____r is going to identify me, or his being alive is going to hope me get caught or if I ain't going to have time to get away or something, I'm going to kill him. Then I know I can take my time. The next job I am thinking about doing if I murder this guy, my intention is to dig a grave, but it was getting dark, and you called and Jackie called. I was going to dig one because I am ready to do the job which would help get my house, my apartment, have enough money for Christmas and (inaudible).
MILLER: I wish the f___ you'd have sold me that gun, man. You f_____g blew my job of making ten or twenty bucks.
BLYSTONE: Miles, I can't. It is a f_____g murder weapon, you know.
MILLER: It ain't doing no good out there, man.
BLYSTONE: No, but (inaudible) rather it not be used.
MILLER: Them guns, man (inaudible) there is a left twist and there is a right twist, okay?
BLYSTONE: Most is right-twist.
*494 MILLER: How many of them is there around that's got a right twist or a left twist? I mean, God damn, man, how in the hell can they match that up?
BLYSTONE: They have records of those bullets, okay. They did an autopsy on the guy. They have prints of those bullets, okay, in the unsolved crime files. Every time that a .22 is confiscated, they are going to try to match it to who fired it, and they match it. When they match it, whoever has that gun is going to be charged with murder.
MILLER: How in the hell do you know if you got a right twist or a left twist?
BLYSTONE: Most guns have a right-hand twist. Very few guns have a left-hand twist. (Inaudible) have them. Most of them is right, but the bullet is it really don't matter right or left-hand twist. More what they look for is rifling grooves; you got (inaudible) grooves plus a firing pin. Every firing pin hits a case at a certain spot, like off-center, to the left, to the right, low or high or (inaudible) takes a certain shape of impression. With an automatic, with a .45 a lot of people don't know this when you chamber a .45 you throw your clip in there chamber one, and that fires well, if you fire or whatever, when you eject that f_____g thing, you leave what is called "chamber marks" on your casing. They can identify they can match the gun up with the chamber it came out of with the bullets just by the little scratches and s___ because every chamber puts a different mark on it every firing pin puts a different mark (inaudible). A lot of people think "well, I'll change the barrel and they will never know," but they will match the firing pin and the chamber, especially in an automatic. Same thing with bolt rifles. If you had a microscope, you could look, chamber six or seven rounds, jack them out and line them up on a microscope and see if they all match up, scrape marks, everything.
MILLER: So even if they did find that gun let's say they did find that God damn gun I am getting ready to take off, man.
BLYSTONE: I want to take a p___.
*495 MILLER: Even if they did find the gun that's not saying that they can f_____g match it up according to what they say.
BLYSTONE: They can.
MILLER: They can how?
BLYSTONE: What they do, they have it on file, man; it is like an x-ray.
MILLER: Inaudible.
BLYSTONE: What they do is when they got a murder, they will take pictures of the bullets.
MILLER: Inaudible.
BLYSTONE: (Inaudible) and every time they find a .22, and they confiscated it for murder, it will go to the unsolved cases (inaudible) with .22's. They are going to go through the .22 unsolved murders and they are going to fire a bullet into those ballistic (inaudible) and all they got to do they probably got 20, 30 unsolved .22 murder cases, right they just take it and check it, and when they get one, you are (inaudible).
MILLER: I'm going to take off, man (inaudible) I don't know whether it does any good whether I go home or not, man. I go home and she's (inaudible) and I go to Frank's, you know what I mean, because she is always there. Either she is there, or I go there and Frank and them tell me that she just left, and I know they are lying, you know what I mean I know they are lying because I'll sit up the road sometimes and smoke a cigarette because I figure that I'm going to go home and she is not going to be there, and then tell me bull-s___ like that, and guaranteed, man, I've stood up the road and smoked a cigarette. Didn't you see her? Bull-s___; that's bull-s___ man.
AT THIS POINT THE OFFICER TURNS OFF THE TAPE.
ZAPPALA, Justice, dissenting.
Because I disagree with the majority opinion's conclusion regarding the constitutionality of the Wiretapping and Electronic Surveillance Control Act, 18 Pa.C.S. § 5701 et. seq., I must dissent.
*496 Since the majority sets forth the actual provisions of the Act, it is only necessary to summarize the Act. Under the Act, with the consent of a participating individual, the government may electronically eavesdrop upon a person using a body tap upon the approval of the Attorney General, the District Attorney or their enumerated authorized agents. Noticeably missing from the Act is a requirement that a disinterested judicial officer review the facts to ascertain whether probable cause exists for the intercept. It is the failure to provide for the later requirement which causes me to conclude that this part of the Act is unconstitutional. The consensual interception authorized by § 5704 amounts to a search and seizure requiring either a warrant or probable cause as required by Article I, section 8 of our Constitution.
There is no question that the interception of an oral communication is considered a "search and seizure" as those terms are constitutionally defined under both the federal and state constitutions. See, Katz v. U.S., 389 U.S. 347, 88 S. Ct. 507, 19 L. Ed. 2d 576 (1967); Commonwealth v. White, 459 Pa. 84, 327 A.2d 40 (1974). As the majority correctly points out, in interpreting the Fourth Amendment's protection against unreasonable searches and seizures, the United States Supreme Court has taken the approach that one party consensual interceptions do not violate that provision since an accused waives his "expectation of privacy" by conversing with another party. In short, the United States Supreme Court and the majority can discern no difference between communicating with the police informant who in turn reports to the police and surreptitiously recording the conversations directly by interception. This analysis embodies the proposition that the key factor to be considered in a wire intercept is whether the individual has a "legitimate expectation of privacy" and whether he has waived that expectation by disclosing information to any other party. While on the surface the majority's reliance upon the federal court's position seems to have merit, closer analysis reveals that blind adherence to this proposition is erroneous.
*497 In its rush to adopt federal jurisprudence to support its position, the majority merely pays lip service to the admonitions of Mr. Justice Brennan of the United States Supreme Court which we heeded and embraced in Commonwealth v. Sell, 504 Pa. 46, 49, 470 A.2d 457, 459 (1983):
[T]he decisions of the Court are not, and should not be, dispositive of questions regarding rights guaranteed by counterpart provisions of state law. Accordingly, such decisions are not mechanically applicable to state law issues, and state court judges and the members of the bar seriously err if they so treat them. Rather, state court judges, and also practitioners, do well to scrutinize constitutional decisions by federal courts, for only if they are found to be logically persuasive and well-reasoned, paying due regard to precedent and the policies underlying specific constitutional guarantees, may they properly claim persuasive weight as guideposts when interpreting counterpart state guarantees.
In refusing to adopt the United States Supreme Court abolition of "automatic standing" under the Fourth Amendment of the Federal Constitution in Sell, we reaffirmed our prior holding that the:
state may provide through its constitution a basis for the rights and liberties of its citizens independent from that provided by the Federal Constitution, and that the right so guaranteed may be more expansive than their federal counterparts. (Citations omitted)
Commonwealth v. Tate, 495 Pa. 158, 169, 432 A.2d 1382, 1387 (1981). In Sell, we then analyzed the federal case law limiting standing under the Fourth Amendment against the evolution of protected liberties guaranteed by Article I, section 8 of our own constitution and had no problem in rejecting the federal analysis of "automatic standing" under our comparable constitutional clause.
It is also important to note that in Commonwealth v. Sell, supra, we upheld the overriding importance of "privacy" under our constitution:
*498 In construing Article I, section 8, we find it highly significant that the language employed in that provision does not vary in any significant respect from the words of its counterpart in our first constitution. The text of Article I, section 8 thus provides no basis for the conclusion that the philosophy and purpose it embodies today differs from those which first prompted the Commonwealth to guarantee protection from unreasonable governmental intrusion. Rather, the survival of the language now employed in Article I, section 8 through over 200 years of profound change in other areas demonstrates that the paramount concern for privacy first adopted as a part of our organic law in 1776 continues to enjoy the mandate of the people of this Commonwealth.
504 Pa. 65, 470 A.2d 467. Thus, unlike our federal counterparts, the right to privacy has been elevated to a paramount right guaranteed to every citizen of this Commonwealth. This paramount status was even acknowledged by the legislature in defining an "oral communication" under the Act.
"Oral communication." Any oral communications uttered by a person possessing an expectation that such communication is not subject to interception under circumstances justifying such expectation.
18 Pa.C.S. § 5701. If a person has a legitimate expectation of privacy, that paramount right should not be infringed upon without a corresponding justification.
Both the majority and the United States Supreme Court adhere to the view that a "person cannot have a justifiable and constitutionally protected expectation that a person with whom he is conversing will not then or later reveal the conversations to the police." (Citations omitted) (Slip Opinion, p. 12). The majority adopts the federal rational without offering any persuasive argument for doing so. Under the majority view, a person could never be sure of having a confidential conversation with another. Communicating in and of itself would waive any right of privacy. As is evident, such an approach has a chilling effect, relegating *499 the right of privacy to nothing more than a useless ideal which could only be exercised when one is alone.
I find comfort and support for my position in this appeal from a recently decided decision of the Supreme Court of Oregon. See State of Oregon v. Roger Jonathan Scott Campbell, 306 Or. 157, 759 P.2d 1040 (1988); Accord, Commonwealth v. Blood, 400 Mass. 61, 507 N.E.2d 1029 (1987) (Similar Massachusetts interception statute held unconstitutional as being unreasonably intrusive to impose risk of electronic surveillance on every act of speaking aloud to another person). In Campbell, the court was faced with the question of whether or not under its state constitution, police use of a radio transmitter to locate a private automobile to which the transmitter had been surreptitiously attached is a "search or seizure". In rejecting the state's argument that the court should embrace the decisions of the United States Supreme Court which validated such a use, the court boldly disassociated itself from the United States Supreme Court's decisions allowing such a monitoring, United States v. Knots, 460 U.S. 276, 103 S. Ct. 1081, 75 L. Ed. 2d 55 (1983), and United States v. Karo, 468 U.S. 705, 104 S. Ct. 3296, 82 L. Ed. 2d 530 (1984) because the United States Supreme Court's interpretation in those cases did not comport with the interpretations of the Oregon Supreme Court regarding search and seizure and privacy protection as set forth in Article I, § 9 of the Oregon Constitution. After finding that privacy is an interest protected by Article I, § 9 of its state constitution the court discussed blind adherence to federal jurisprudence.
Even were the provisions identical, this court would nonetheless be responsible for interpreting the state provision independently, though not necessarily differently. Majority opinions of the Supreme Court of the United States may be persuasive, but so may concurring and dissenting opinions of that court, opinions of other courts construing similar constitutional provisions, or opinions of legal commentators. What is persuasive is the reasoning, not the *500 fact that the opinion reaches a particular result. (Emphasis supplied)
Oregon v. Campbell, 306 Or. at 1464-65 fn. 7, 759 P.2d at 1044 fn. 7.
After a thorough review resulting in the rejection of the United States Supreme Court's reliance on reasonable expectation of privacy analysis, the Oregon Court considered the argument that information legitimately available through one means may be obtained through any other means without engaging in a search. In the court's poignant rejection of that premise it determined that:
[t]he constitutional provisions against unreasonable searches and seizures do not protect a right to keep any information, no matter how hidden or "private", secret from the government. (Citations omitted) What the provisions forbid are unreasonable searches and seizures, i.e., certain acts of the government. Article I, section 9 "presents the police with a web of rules that are meant to protect the privacy interests of `the people', and the police violate section 9 if and only if they violate these rules." State v. Tanner, 304 Or. [312] at 320 [745 P.2d 757]. Whether police conduct is a search does not turn on whether its object could be discovered by conduct that is not a search. For example, in State v. Lewis, supra, the defendant exposed himself to public view through his living room. This Court held that the police officers did not engage in a search by photographing him from a house across the street with a 135 m.m. camera lense, which provided only minimal enhancement of what could be observed with the unaided eye. Nonetheless, the police officers would have engaged in a search had they entered his living room to observe what could be observed from the street. Similarly, if an undercover police officer is invited into a home and observes illegal conduct, the officer has not committed a search, but an unconsented entry into the home by other police officers to observe what the undercover officer could or did not observe would be a search. The issue is not whether what the *501 police learned by using the transmitter in this case was "exposed to public view", but whether using the transmitter is an action that can be characterized as a search.
.....
The problem presented by this case is essentially much like that presented in Katz, which was whether using a hidden listening device placed in a public place could be considered a search. Conversations in public may be overheard, but it is relatively easy to avoid such eavesdroppers by lowering the voice or moving away. Moreover, one can be reasonably sure of whether one will be overheard. But if the state's position in this case is correct, no movement, no location and no conversation in a "public place" would in any measure be secure from the prying of the government. There would in addition be no ready means for individuals to ascertain when they were being scrutinized and when they were not. That is nothing short of a staggering limitation on personal freedom. We could not be faithful to the principles underlying Article I, section 9 and conclude that such forms of surveillance were not searches.
Id. at p. 1466-71, 759 P.2d at p. 1045-49.
Even accepting arguendo, the majority's logic regarding the expectation of privacy, I am perplexed as to why a conversation between two nonconsenting persons is entitled to all the protections embodied in the federal amendment while a conversation with one consenting to eavesdropping does not. If the key element is the expectation of privacy, then the consent of one participant is insufficient. Unlike the majority, I fail to see the distinction between having the consent of one participant or none as the polestar in guaranteeing a fundamental right. Furthermore, I cannot accept the majority's conclusion that one who communicates to another does so at the expense of his privacy rights. Implicit in the right to privacy is the right to determine who benefits from your knowledge. Knowledge is as much a possessory right as the right to possess and protect our homes and personal property. An individual then may *502 desire not to expose his inner thoughts or ideals to the public at large which he may not trust, but only to selected individuals. Of course, he takes the risk that a friend may betray him and his confidences, but that risk is one that he individually and knowingly assumes. Under such circumstances, he voluntarily chooses to limit his privacy.
Finally, taking the majority's reasoning to its logical extreme, if there is no difference between directly intercepting oral communications and receiving and recording information from an informant, then there will be no difference in directly probing and tapping the innermost thoughts of individuals in the future with the advent of more sophisticated electronic equipment. If the ends justify the means and the goal is to prevent criminal activity at the expense of individual liberties, then, under the majority's interpretation, I see no way to prevent intercepting thoughts even before they are orally and publicly communicated.
Accepting the importance of the right to privacy, as the majority must, the issue still becomes whether the governmental intrusion is reasonable, not whether an individual possesses an expectation of privacy. We have specifically rejected the United States Supreme Court's analysis of the legitimacy of privacy as a key element in interpreting Article I, section 8 of this Commonwealth's Constitution. Instead, we have held that our primary concern is the reasonableness of the intrusion. Commonwealth v. Sell, supra.
In other areas of criminal law we have consistently held that a warrantless search or a search pursuant to a warrant must be based upon probable cause. To ensure an objective determination of whether the intrusion is supported by probable cause, we have required a disinterested judicial officer to review the facts either preliminarily, in the case of a search pursuant to a warrant, or subsequently, in the case of a warrantless search, to determine if sufficient facts were present to establish probable cause that criminal activity was occurring. This neutral determination suffices to protect a person from an unjustifiable intrusion. Under *503 § 5704(2)(ii), however, the legislature has impermissibly taken the "probable cause" determination from the judiciary and given that determination to a law enforcement official who cannot be said to be either neutral or detached. In Commonwealth v. Johnston, 515 Pa. 454, 530 A.2d 74 (1987), we specifically rejected the approach now taken by the majority in balancing the individual and governmental interests to be protected in determining whether a search was reasonable. Instead, we held that a determination that probable cause existed for the search supported a finding that the search was reasonable. Without such a neutral determination the search would be unreasonable.
Based upon the foregoing analysis, I cannot accept the constitutionality of § 5704 of the Act. I am cognizant of the principles that a statute is presumed to be constitutional and that the legislature does not intend to promulgate unconstitutional legislation. 1 Pa.C.S. § 1922(3). However, when a statute so blatantly ignores a liberty entrenched in our body of laws for over 200 years, that presumption must necessarily fall. Unlike the Superior Court's approach in Commonwealth v. Schaeffer, 370 Pa.Super. 179, 536 A.2d 354 (1987), I cannot in good conscience redraft the statute to include a requirement so basic to our system of justice to achieve a desired result. See 1 Pa.C.S. § 1921(b). It is clear to me that given the importance of the right to privacy in our jurisprudence, as even acknowledged by the legislature in this Act, I cannot conclude otherwise than that the legislature did not intend for a disinterested objective determination of probable cause prior to intercepting oral communications. See 1 Pa.C.S. § 1921(a). Therefore, I would find Section 5704 unconstitutional and remand this matter to the trial court for a new trial during which the information obtained pursuant to the Act would be suppressed.[1]
LARSEN, J., joins in this dissenting opinion.
NOTES
[1] 18 Pa.C.S. §§ 2501; 2502(a).
[2] 18 Pa.C.S. § 3701.
[3] 18 Pa.C.S. § 903.
[4] Id.
[5] 42 Pa.C.S. § 9711.
[6] 18 Pa.C.S. § 1103(1).
[7] See 42 Pa.C.S. §§ 722(4); 9711(h)(1). Pa.R.A.P. 702(b).
[8] The only aggravating factor the jury found to exist for purposes of setting the penalty at death was the fact that Blystone killed Smithburger during the course of a felony, i.e., robbery. 42 Pa.C.S. § 9711(d)(6). Thus, the death penalty cannot stand should the robbery conviction fall.
[9] The appellant also asserts that trial counsel was ineffective for failing to argue and preserve any corpus delicti issue relating to the robbery conviction. Since we have addressed the substance of the corpus delicti issue in our review of the sufficiency of the evidence, we will not consider the ineffectiveness claim.
[10] See note 8, supra.
[11] Act of October 4, 1978, P.L. 831, No. 164, § 2, 18 Pa.C.S. § 5701 et seq.
[12] In this instance the informant carried a tape recorder as well as a body transmitter which enabled the police to remotely monitor and record the conversation.
[13] It should be noted that prior to the Superior Court's opinion in Commonwealth v. Schaeffer, 370 Pa.Super. 179, 536 A.2d 354 (1987), no court in this Commonwealth had accepted the position espoused by appellant. See Commonwealth v. Harvey, 348 Pa.Super. 544, 502 A.2d 679 (1985); Commonwealth v. Hassine, 340 Pa.Super. 318, 490 A.2d 438 (1985). See also United States v. Geller, 560 F. Supp. 1309 (E.D.Pa. 1983), aff'd sub nom. United States v. DeMaise, 745 F.2d 49 (3d Cir.1984), cert. denied, 469 U.S. 1109, 105 S. Ct. 786, 83 L. Ed. 2d 780 (1985). Therefore, the trial judge's rejection of appellant's position on this issue was consistent with precedent.
[14] Act of July 16, 1957, P.L. 956, No. 411 § 1, 18 P.S. § 3742. See Commonwealth v. Papszycki, 442 Pa. 234, 275 A.2d 28 (1971).
[15] See 18 Pa.C.S. § 5714(a).
[16] Public Law 90-351, Title III, § 802, June 19, 1968, Stats. 213.
[17] See also, Gelbard v. United States, 408 U.S. 41, 92 S. Ct. 2357, 33 L. Ed. 2d 179 (1972); United States v. Cianfrani, 573 F.2d 835 (3d Cir.1978).
[18] Mr. Justice White further stated:
Nor should we be too ready to erect constitutional barriers to relevant and probative evidence which is also accurate and reliable. An electronic recording will many times produce a more reliable rendition of what a defendant has said than will the unaided memory of a police agent. It may also be that with the recording in existence it is less likely that the informant will change his mind, less chance that threat of injury will suppress unfavorable evidence and less chance that cross-examination will confound the testimony. Considerations like these obviously do not favor the defendant, but we are not prepared to hold that a defendant who has no constitutional right to exclude the informer's unaided testimony nevertheless has a Fourth Amendment privilege against a more accurate version of the events in question.
United States v. White, 401 U.S. 745, 753, 91 S. Ct. 1122, 1126, 28 L. Ed. 2d 453 (1971).
[19] The Eighth Amendment applies to the states through the Due Process Clause of the Fourteenth Amendment. Robinson v. California, 370 U.S. 660, 82 S. Ct. 1417, 8 L. Ed. 2d 758 (1962), reh. denied, 371 U.S. 905, 83 S. Ct. 202, 9 L. Ed. 2d 166 (1962).
[20] The pertinent portion of the sentencing statute states:
(d) Aggravating circumstances. Aggravating circumstances shall be limited to the following:
.....
(6) The defendant committed a killing while in the perpetration of a felony.
42 Pa.C.S. § 9711(d)(6).
[21] The Sentencing Act provides:
(h) Review of death sentence.
(1) A sentence of death shall be subject to automatic review by the Supreme Court of Pennsylvania pursuant to its rules.
(2) In addition to its authority to correct errors at trial, the Supreme Court shall either affirm the sentence of death or vacate the sentence of death and remand for the imposition of a life imprisonment sentence.
(3) The Supreme Court shall affirm the sentence of death unless it determines that:
(i) the sentence of death was the product of passion, prejudice or any other arbitrary factor;
(ii) the evidence fails to support the finding of an aggravating circumstance specified in subsection (d); or
(iii) the sentence of death is excessive or disproportionate to the penalty imposed in similar cases, considering both the circumstances of the crime and the character and record of the defendant.
42 Pa.C.S. § 9711(h).
[22] The AOPC study indicates that in those instances in which sentencing bodies have found one or more aggravating circumstances to exist in the absence of any mitigating circumstances, a sentence of death was returned in the overwhelming majority of those prosecutions.
[23] The Prothonotary of the Western District is directed to transmit to the Governor a full and complete record of the proceedings of this case both in the trial court and this Court. 42 Pa.C.S. § 9711(i).
[1] President Judge Cirillo of the Superior Court has written a rather lengthy and scholarly opinion on this issue in Commonwealth v. Schaeffer, supra. Except for his reasoning on the constitutionality of § 5704 of the Act, I note with approval his analysis of the issue and would incorporate his opinion into this one.
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632 F. Supp. 1174 (1986)
Jose M. Diaz ESTRADA, et al., Plaintiffs,
v.
Alfredo Lopez CABRERA, et al., Defendants.
Civ. No. 85-2118(PG).
United States District Court, D. Puerto Rico.
April 3, 1986.
Eliezer Aldarondo Ortiz, Hato Rey, P.R., for plaintiffs.
Victor P. Miranda Corrada, Federal Litigation Div., Dept. of Justice, San Juan, P.R., for defendants.
OPINION AND ORDER
PEREZ-GIMENEZ, Chief Judge.
Through the instant action filed on October 10, 1985, the plaintiffs, who are employees of the Municipal Government of Fajardo, Puerto Rico, seek declaratory and injunctive relief alleging that after the general elections of November 6, 1984, and based solely on political motivations they have been removed, transferred and harassed in their employment, in violation of their rights.
Pending resolution is a motion for disqualification of plaintiffs' counsel, filed by defendants on December 23, 1985. The plaintiffs filed their opposition to said motion on January 8, 1986. The case was called for oral argument on the referred motions on January 31, 1986.
Movants basically allege that the law firm representing plaintiffs in this action should be disqualified under Rules 1.6, 1.9 and 1.16 of the Canons of the American Bar Association[1] in view that a prior attorney-client *1175 relationship existed between the Municipality of Fajardo (hereinafter the "Municipio") and the law firm of Aldarondo & López Bras (hereinafter the firm). Based on this professional relationship between defendants, movants allege that plaintiffs' counsel have divided their loyalty, have given an appearance of impropriety to the proceedings and were privy to privileged and confidential information related to plaintiffs' cause of action.
It was further alleged by movants that matters involved in this suit are substantially related to matters in which the firm previously served the Municipio.
The potential variety of interests which may dilute a lawyer's loyalty to a client is limitless. The district court is obliged to take measures against unethical conduct occuring in relation with any judicial proceeding. Musicus v. Westinghouse Electric Corp., 621 F.2d 742, 744 (5th Cir.1980). A motion to disqualify is evidently an adequate method for a party litigant to bring the issues of conflict of interests and breach of ethical duties to the Court's attention. E.F. Hutton & Co. v. Brown, 305 F. Supp. 371, 376 (S.D.Texas 1969).
However, in view of the misuses of disqualification motions courts must be careful to prevent literalism from possibly overcoming substantial justice to the parties. North Am. Foreign Trading Corp. v. Zale Corp., 83 F.R.D. 293, 295 (S.D.N.Y.1979); Gould v. Lumonics Research Ltd., 495 F. Supp. 294, 297 (N.D.Ill.1980). Motions to disqualify should be approached with cautious scrutiny. Laker Airways Ltd. v. Pan American World Airways, 103 F.R.D. 22, 28 (D.C.Cir.1984).
It has been a recent practice to use disqualification motions for purely strategic purposes, Smith v. Whatcott, 757 F.2d 1098, 1099-1100 (10th Cir.1985); Melamed v. ITT Continental Baking Co., 592 F.2d 290, 295 (6th Cir.1979); Ross v. Great Atlantic & Pacific Tea Co., Inc., 447 F. Supp. 406, 410 (S.D.N.Y.1978); Redd v. Shell Oil Co., 518 F.2d 311, 315 (10th Cir.1975); International Electronics Corp. v. Flanzer, 527 F.2d 1288, 1289 (2nd Cir.1975), and courts should not be oblivious to this fact. Wiliamsburg Wax Museum v. Historic Figures, 501 F. Supp. 326, 331 (D.C.Cir. 1980). It is clear that such practice would often unfairly deny a litigant the counsel of his choosing. Woods v. Covington City Bank, 537 F.2d 804, 813 (5th Cir.1976); Board of Ed. of N.Y. City v. Nyquist, 590 F.2d 1241, 1246 (2nd Cir.1979); Society for Good Will to Retarded, Etc. v. Carey, 466 F. Supp. 722, 724 (E.D.N.Y.1979). This explains why the rule of disqualification should not be mechanically applied. Duncaro v. Merrill Lynch, Pierce, Fenner & Smith, 646 F.2d 1020, 1029 (5th Cir.), cert. denied, 454 U.S. 895, 102 S. Ct. 394, 70 L. Ed. 2d 211 (1981); Jackson v. J.C. Penney Co., Inc., 521 F. Supp. 1032, 1034 (N.D.Ga. 1981).
To disqualify a party's chosen attorney is a serious matter which could not be supported by the mere possibility of a conflict, Richmond Hilton Associates v. City of Richmond, 690 F.2d 1086, 1089 (4th Cir. 1982). The moving party bears the burden in a motion to disqualify. Evans v. Artek Systems Corp., 715 F.2d 788, 794 (2nd Cir. 1983); City Consumer Services, Inc. v. Horne, 571 F. Supp. 965, 970 (Utah 1983).
The Court must make its decision in the interest of justice to all concerned. Certainly, there must be a balance between the client's free choice of counsel and the maintenance of the highest ethical and professional standards. Government of India v. Cook Industries, Inc., 569 F.2d 737, 739 (2nd Cir.1978); International Electronics Corp. v. Flanzer, supra, at 1295. The decision whether to disqualify counsel grows out of the Court's responsibility to supervise the members of its bar. Groper v. Taff, 717 F.2d 1415, 1418 (D.C.Cir.1983). For this reason courts and lawyers must always be most sensitive to conflicts of interest. This is explained in light of the extremely important public purposes and interests involved.
It is incumbent upon us to preserve to the greatest extent possible both the individual's right to be represented by counsel of his or her choice and the public's *1176 interest in maintaining the highest standards of professional conduct and the scrupulous administration of justice. Hull v. Celanese Corporation, 513 F.2d 568, 569 (2nd Cir.1975).
However, the precise delineation of a prescribed conduct is a difficult task. Within each area of the law and forum of legal practice the conflict of interest problems are unique, calling for individualized as well as for imaginative treatment.
In the case at bar, as predicated by movants, disqualification is warranted upon the allegation that the law firm has undertaken litigation against a former client. The relevant test in disqualification cases premised on those grounds and involving a conflict of interest based on the actual or potential threat of the violation of the attorney-client privilege is the "substantially related" test. Kevlic v. Goldstein, 724 F.2d 844, 850-51 (1st Cir.1984), Unified Sewerage Agency, Etc. v. Jelco, Inc. 646 F.2d 1339 (9th Cir.1981); Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384, 1386 (2nd Cir.1976).
The substantial relationship test had its genesis in federal courts in the case of T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265, 268 (S.D.N.Y.1953). The test is not a rule of substantive law as it is a measure of the quatum of evidence required for proof of the professional obligation. The test consists of three steps of inquiry in disqualification matters and said three-level inquiry is to be undertaken in order to ascertain whether a substantial relationship exists.
Under this three-prong test the first step calls for a factual reconstruction of the scope of the prior representation. The second step calls for a determination as to whether it is reasonable to infer that the confidential information allegedly given would have been to a lawyer involved in the representation of those matters. Finally, under the third step, it must be determined whether that information is relevant to the issues raised in the litigation pending against the former client. La Salle National Bank v. County of Lake, 703 F.2d 252, 255 (7th Cir.1983).
The proper disposition of a motion to disqualify requires a careful examination of the allegedly conflicting representations. Trone v. Smith, 621 F.2d 994, 998 (9th Cir.1980); Hughes v. Paine, Webber, Jackson & Curtis, Inc., 565 F. Supp. 663, 664 (N.D.Ill.1983); International Paper Corp. v. Lloyd Manufacturing Co., Inc., 555 F. Supp. 125, 127 (N.D.Ill.1982).
We are called to focus on the precise nature of the relationship between the present and former representation. Jackson v. J.C. Penney Co., Inc., 521 F. Supp. 1032, 1034 (N.D.Ga.1981). The basic question which the district court faces in considering a motion praying for disqualification is "whether it could reasonably be said that during the former representation the attorney might have acquired information related to the subject matter of the subsequent representation." La Salle Nat. Bank v. County of Lake, supra.
In order to put the motion in context and to duly evaluate the same the matter was set for hearing and oral argument was heard on January 31, 1986. During the hearing, attorney Eliezer Aldarondo Ortiz took the witness stand.
Based on the arguments adduced and on the evidence presented, the Court concludes that there is no violation of the professional canons which demand disqualification of counsel. The evidence established that the firm rendered legal services for the Municipality of Fajardo while the former administration of the New Progressive Party was in power. The contract for services between the Municipio and the firm[2] was with the former incumbent for the former political administration. Furthermore, aware that the relationship is one of trust, the contract was resolved by *1177 the firm when the new administration of the PDP came to power.
It is clear that the firm was not able to obtain confidential information on the policies of the present administration for, in fact, there has been no professional relationship between the firm and the present municipal administration. The contract of services was cancelled by the firm thru letter of December 21, 1984. The relationship of the firm with the Municipio was with the former major and with the past municipal government. The testimony of attorney Eliezer Aldarondo, received during the hearing, established that the firm's participation was with particular cases and that the firm never participated in any matter related either to the plaintiffs or to the defendants in this action.
The issue of whether there is a substantial relationship between the present litigation and matters in which the law firm previously provided advice to the Municipio is of course essentially a factual one. The question is one which involves a determination as to whether there is a sufficient relationship between matters presented by the pending litigation and matters which the firm worked on in behalf of the party now seeking disqualification. We find in the negative.
Several vouchers have been submitted by the firm which establish that services were for specific purposes not related to the present litigation. See, In re Guzmán Geigel, 113 D.P.R. 122, 130 (1982).
It has been held that in the case of a former client the representation of a now adverse party is not per se improper without a showing by the former client that the matters in the pending suit are "substantially related" to the matters in which the attorney previously represented the party. Waterbury Garment Corp. v. Strata Production, 554 F. Supp. 63, 66 (S.D.N.Y.1982).
It is also undisputed that the firm has never been retained by the present municipal administration. There is no evidence which would lead us to conclude that it could reasonably be said that during former representations the firm might have acquired information related to the procedures and policies for hiring and dismissal of personnel at the Municipio by the present administration, which is the subject matter of the present litigation. Disqualification is essentially designed to encourage clients to fully disclose all information necessary for their attorneys to adequately prepare their case, Hughes v. Paine, Weber, supra, 565 F.Supp. at 666. Under the facts of this case we find that there is no basis for the disqualification of the law firm.
WHEREFORE, in view of the foregoing the motion for disqualification is hereby DENIED, and defendants are hereby ORDERED to answer the complaint.
IT IS SO ORDERED.
NOTES
[1] The Canons of the American Bar Association were adopted by the Local Rules of this Court and form an attachment to Local Rule 211.4(b).
[2] The contract was executed on June 29, 1984, between the Municipality through the New Progressive Party Major and the law firm Aldarondo and Lopez Bras.
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710 N.W.2d 257 (2005)
HERNANDEZ v. STATE.
No. 05-0051.
Court of Appeals of Iowa.
November 23, 2005.
Decision without published opinion. Affirmed.
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545 So. 2d 246 (1989)
Linder B. CONLEY
v.
STATE.
4 Div. 165.
Court of Criminal Appeals of Alabama.
March 17, 1989.
Rehearing Denied April 28, 1989.
Jim L. DeBardelaben of McPhillips, DeBardelaben & Hawthorne, Montgomery, for appellant.
Don Siegelman, Atty. Gen., and Martha Gail Ingram, Asst. Atty. Gen., for appellee.
TYSON, Judge.
Linder B. Conley was convicted in Russell County Circuit Court for first degree *247 murder. He was sentenced to life imprisonment. The appellant filed a Rule 20 petition. The trial court dismissed the petition on April 12, 1988. The appellant filed a Motion to Reconsider on May 12, 1988, and a Motion to Amend and Reconsider on May 24, 1988. Both motions were denied on June 6, 1988. The appellant filed written notice of appeal on June 7, 1988. This appeal is dismissed because it was untimely filed.
A.R. Crim.P.Temp. 20.10 provides that a decision of the circuit court may be appealed to this Court pursuant to Rule 4 of the Alabama Rules of Appellate Procedure. Notice of appeal must be filed "within 42 days (six weeks) of the date of the entry of the judgment or order appealed from." A.R.A.P. 4(a)(1). An appeal must be dismissed "if the notice of appeal was not timely filed to invoke the jurisdiction of the appellate court." A.R.A.P. 2(a)(1). An appellate court may not extend the time for filing a notice of appeal. A.R.A.P. 2(b).
If a motion in arrest of judgment, motion for new trial or motion for acquittal is timely filed "an appeal may be taken within 42 days (six weeks) after the denial or overruling of the motion." A.R.A.P. 4(b)(1).
A motion to reconsider or amend does not fall within that category of motions that tolls the time for appeal under the Alabama Rules of Appellate Procedure. See Yearby v. State, 451 So. 2d 425 (Ala. Crim.App.1984). Neither temporary Rule 20 of the Alabama Rules of Criminal Procedure nor the Alabama Rules of Appellate Procedure provides a procedure for the tolling of the time of appeal upon the filing of a Motion to Reconsider or a Motion to Amend such as those filed by this appellant.
For these reasons this appeal is dismissed.
APPEAL DISMISSED.
All the Judges concur.
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519 Pa. 515 (1988)
549 A.2d 113
Frank D. MICELI, Charles Minnich and Leander Krist, Token Claimants, Appellants,
v.
UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Commonwealth of Pennsylvania, Appellee, and Quaker Oats Company, Intervenor.
Supreme Court of Pennsylvania.
Argued May 10, 1988.
Decided October 17, 1988.
*516 Ira H. Weinstock, Paul J. Dellasega, Gerard M. Mackarevich, Harrisburg, for appellants.
Clifford Blazes, Acting Dep. Chief Counsel, James K. Bradley, Asst. Counsel, for appellee.
C. Grainger Bowman, Harrisburg, Michael Welch, pro hac vice, for intervenor.
Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA PAPADAKOS and STOUT, JJ.
OPINION OF THE COURT
LARSEN, Justice.
Frank D. Miceli, Charles Minnich and Leander Krist, token claimants, appeal from a Commonwealth Court order affirming a decision of the Unemployment Compensation Board of Review (Board) that denied them, and all other similarly situated employees of Intervenor, Quaker Oats Company (Quaker Oats), unemployment compensation benefits. At stake in this appeal is the eligibility of the union employees of Quaker Oats for unemployment compensation *517 benefits for the weeks ending April 28, 1979 through May 26, 1979. During that time a labor dispute existed between Quaker Oats and the employee's bargaining representative, the Cereal Workers Directly Affiliated Local Union No. 221, AFL-CIO (Union). The Board concluded that the claimants were ineligible for benefits because their unemployment for the relevant period was due to a strike rather than a lockout within the meaning of section 402(d) of the Pennsylvania Unemployment Compensation Law, Act of December 5, 1936, P.L. 2897, as amended, 43 P.S. § 802(d) (1964). The Commonwealth Court reached the same conclusion and affirmed the Board's decision. Thus, we are faced with the question of whether the work stoppage during the period for which benefits are sought was the result of a strike or a lockout. After reviewing the record, we conclude that the work stoppage resulted from a lockout by Quaker Oats leaving the claimants eligible for benefits. We therefore reverse.
Background
In February, 1979, Quaker Oats and the Union were parties to two collective bargaining agreements. Together these agreements covered approximately 375 hourly production, maintenance, shipping and laboratory employees at the Quaker Oats production and distribution facilities in Shiremanstown, Pennsylvania. One of these agreements was due to expire on March 31, 1979 and the other on April 1, 1979. Negotiations for a new collective bargaining agreement to replace the two agreements began in late February, 1979. Although the parties met at various times in February and March, they were unable to reach a new agreement before the existing ones expired.
On April 2, 1979, the Union and Quaker Oats signed a memorandum of agreement providing that the plant would remain open and the parties would continue to work under the terms and conditions of the expired agreements while negotiations continued. The memorandum of agreement provided further that the Union would not strike and Quaker *518 Oats would not lock out the employees without 24 hours prior written notice to the other side. Quaker Oats and the Union continued negotiations and met in negotiating sessions on April 5, 9 and 17. No progress toward a new agreement was made at these sessions. On April 20 the parties met and Quaker Oats informed the Union that many of the employees were refusing to work overtime and if the refusals continued it would cause severe production problems in the plant. The Union indicated that it was unaware of any such problem and agreed to actively urge its members to accept overtime work. The Union carried out its promise in this regard. On April 25, 1979, Quaker Oats and the Union held another bargaining session. At this meeting Quaker Oats raised questions concerning, (1) the employees refusal to work overtime, (2) an alleged concerted work slowdown by the employees and (3) incidents of alleged sabotage of equipment in the plant. On April 26, 1979, Quaker Oats delivered written notice to the Union that all employees represented by the Union would be locked out effective 7:00 o'clock a.m., April 28, 1979. Quaker Oats rejected the Union's unconditional offer to continue to work and, in so doing, stated: "At this time we have no reason to expect that normal operations could be resumed should the plant be reopened." (R.R. p. 253a.)
The claimants, idled by the work stoppage, sought unemployment compensation benefits. Their applications were approved by the Office of Employment Security. Quaker Oats appealed and obtained a hearing. On August 23, 1979, the appeal was heard by a referee. In a decision handed down November 20, 1979, the referee affirmed the determination of the Office of Employment Security allowing benefits. On appeal to the Board the referee's decision was affirmed. On further appeal, the Commonwealth Court found that the referee's decision lacked findings of fact needed to support its conclusion. The Commonwealth Court therefore reversed and remanded for additional findings of fact. Quaker Oats Co. v. Unemployment Compensation Board of Review, 65 Pa.Cmwlth. 72, 442 A.2d 369 (1982).
*519 Pursuant to the remand the Board vacated its previous order that approved benefits for the claimants and went on to find: "The claimants first altered the status quo by refusing to perform overtime work and by causing instances of sabotage to the employer's equipment." The Board concluded that the work stoppage was a strike rather than a lockout. Accordingly, the Board reversed the decision of the referee and denied unemployment benefits. The claimants appealed the Board's decision to the Commonwealth Court which affirmed. Miceli v. Unemployment Compensation Board of Review, 93 Pa.Cmwlth. 505, 502 A.2d 297 (1985). We granted the claimants' petition for allowance of appeal.
I.
The scope of review in an appeal from an adjudication of a Commonwealth agency is that we must affirm unless the adjudication violates the constitutional rights of the appellant, or is contrary to law, or that agency procedure was violated, or a finding of fact necessary to back the decision is not supported by substantial evidence. 2 Pa.C.S.A. § 704. See: Estate of McGovern v. State Employees' Retirement Board, 512 Pa. 377, 517 A.2d 523 (1986). See also, Taylor v. Unemployment Compensation Review Board, 40 Pa.Cmwlth. 577, 398 A.2d 231 (1979).
The claimants make no claim that their constitutional rights were violated nor do they raise any question concerning the procedure before the Board. Our review therefore will be limited to whether there was an error of law and/or whether the Board's findings are supported by substantial evidence.
II.
Section 402(d) of the Pennsylvania Unemployment Compensation Law provides in relevant part as follows:
An employe shall be ineligible for compensation for any week
*520 (d) In which his unemployment is due to a stoppage of work, which exists because of a labor dispute (other than a lockout) at the factory, establishment or other premises at which he is or was last employed: ....
43 P.S. § 802(d) (1964).
The claimants' eligibility for benefits is dependent upon a determination of whether the work stoppage was caused by a lockout or a strike. If the work stoppage was caused by a lockout, as initially found by the referee and affirmed by the Board, the claimants are eligible for benefits. If, however, the work stoppage was the result of a strike, as was later found by the Board after remand and affirmed by the Commonwealth Court, then claimants are ineligible for benefits.
In Vrotney Unemployment Compensation Case, 400 Pa. 440, 163 A.2d 91 (1960) we adopted a test to distinguish between a strike and a lockout for purposes of unemployment compensation benefits.
"Have the employees offered to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending the final settlement of the contract negotiations; and has the employer agreed to permit work to continue for a reasonable time under the pre-existing terms and conditions of employment pending further negotiations? If the employer refuses to so extend the expiring contract and maintain the status quo, then the resulting work stoppage constitutes a `lockout' and the disqualification for unemployment compensation benefits in the case of `stoppage of work because of a labor dispute' does not apply."
Id., 400 Pa. at 444-45, 163 A.2d at 93-94. The test announced in Vrotney is uniformly applied in unemployment compensation cases where a labor dispute has resulted in a work stoppage. Local 730 v. Unemployment Compensation Board of Review, 505 Pa. 480, 480 A.2d 1000 (1984); Fairview School District v. Unemployment Compensation Board of Review, 499 Pa. 539, 454 A.2d 517 (1982); *521 Unemployment Compensation Board of Review v. Sun Oil Company, 476 Pa. 589, 383 A.2d 519 (1978); Philco Corporation v. Unemployment Compensation Board of Review, 430 Pa. 101, 242 A.2d 454 (1968). See also: Norwin School District v. Belan, 510 Pa. 255, 507 A.2d 373 (1986) (plurality opinion), and High v. Unemployment Compensation Board of Review, 505 Pa. 379, 479 A.2d 967 (1984) (dissenting opinion, Larsen, J.). This well-established test is designed to answer the crucial question: who bears the responsibility for the work stoppage. If responsibility rests with labor then the stoppage is a strike. On the other hand, if management bears responsibility, then the stoppage is a lockout. The idled employees' eligibility for unemployment compensation benefits depends upon the resolution of this question.
In Philco Corporation v. Unemployment Compensation Board of Review, supra., we refined the test to fix responsibility for a work stoppage and distinguish between a strike and a lockout for purposes of unemployment compensation benefits. We there said:
This is but another of those troublesome areas where the legal test as distilled from previous cases is easy to verbalize, but most difficult to apply to any given set of facts. Since the purpose of our unemployment compensation system is to compensate an individual when work has been denied him through no fault of his own, logically the test of whether a work stoppage resulted from a strike or a lock-out requires us to determine which side, union or management, first refused to continue operations under the status quo after the contract had technically expired, but while negotiations were continuing.
Id., 430 Pa. at 103, 242 A.2d at 455. "The status quo has been defined as the last actual, peaceable and lawful, noncontested status which preceded the controversy." Fairview School District v. Unemployment Compensation Board of Review, 449 Pa. at 544, 454 A.2d at 520 citing: Valley Forge Historical Society v. Washington Memorial Chapel, 493 Pa. 491, 426 A.2d 1123 (1981); Commonwealth *522 v. Coward, 489 Pa. 327, 414 A.2d 91 (1980); Roberts v. School District of Scranton, 462 Pa. 464, 341 A.2d 475 (1975). Thus, the question in this case is: was it the Union or Quaker Oats who first refused to continue operations under the last actual peaceable and lawful uncontested status that preceded the work stoppage? As the Commonwealth Court opinion correctly observes, "The question of whether the work stoppage resulted from a strike or lockout is a mixed question of law and fact subject to this Court's review." Miceli v. Unemployment Compensation Board of Review, Supra, 502 A.2d at 299 citing Kerner v. Unemployment Compensation Board of Review, 68 Pa. Cmwlth. 132, 135, 448 A.2d 666, 668 (1982). See also Philco Corporation v. Unemployment Compensation Board of Review, supra.
The claimants argue that the work stoppage was the result of a lockout in that it was Quaker Oats who first refused to continue operations under the status quo by unilaterally instituting mandatory overtime.[1] The claimants contend that the Board erred in finding that "the claimants first altered the status quo by refusing to perform overtime work and by causing instances of sabotage to the employer's equipment." (Finding of Fact No. 12, Board Decision of August 31, 1982.) Further, the claimants argue that the Board erred in finding that the work stoppage was a strike rather than a lockout. (Finding of Fact No. 13, Board Decision of August 31, 1982.)
III.
In Philco Corporation v. Unemployment Compensation Board of Review, supra., we had occasion to consider the burden of proof in unemployment compensation cases involving a work stoppage, where we said: "When ... the work stoppage takes the form of a strike, *523 the burden is upon the union to show that it made the initial `peace' move by offering to continue the status quo." 430 Pa. at 104, 242 A.2d at 456. Thus, where the Union membership votes to withhold services and the work stoppage is in the nature of a strike, claimants have the burden of showing that it was the employer who first refused to continue under the status quo. If such proof is produced, the withholding of services would not disqualify them for benefits. Conversely, where, as here, the work stoppage takes the form of a lockout, the burden is upon the employer to show that it was the claimants who first refused to continue operations under the status quo. It is logical and fair that the burden of proof be on the employer when the employer has locked out the employees. After all, in such a case, it is the employer who took the action that caused the work stoppage. If there is an explanation of that action involving evidence that the employer's act was preceded by a refusal on the part of labor to maintain the status quo, then it is the employer's burden to produce such evidence. The claimants should not be made to prove the negative of that proposition.
Placing the burden on the employer when it is an act of the employer that causes a change in the existing employment relationship or situation is not unusual and is consistent with the burden of proof allocations in proceedings involving other unemployment compensation issues. For example, when a claimant has been fired for willful misconduct, it is the employer who has the burden of proving such misconduct. See McLean v. Unemployment Compensation Board of Review, 476 Pa. 617, 383 A.2d 533 (1978); Ault Unemployment Compensation Case, 398 Pa. 250, 157 A.2d 375 (1960). On the other hand, where the claimant has voluntarily quit his employment, the claimant has the burden of proving that he quit for necessitous and compelling reasons. Steffy v. Unemployment Compensation Board of Review, 499 Pa. 367, 453 A.2d 591 (1982); Taylor v. Unemployment Compensation Board of Review, 474 Pa. 351, 378 A.2d 829 (1977). The Commonwealth Court opinion acknowledges that under Philco, the burden of proof rests *524 with the claimants when the work stoppage is in the form of a strike. That opinion also acknowledges the difference in the burden of proof allocations in willful misconduct cases as opposed to voluntary quit cases. The Commonwealth Court nonetheless goes on to hold that in cases such as this one, the burden of proof is on the claimants no matter the form of the work stoppage. We believe that approach is incongrous and therefore we reject it.
Where the employer locks out the employees and then claims that the lockout was preceded by an in-plant strike, as Quaker Oats asserts here, the Commonwealth Court would require no proof of such assertion on the part of the employer. On the contrary, under the Commonwealth Court holding, the claimants would be required to prove that no in-plant strike took place as alleged by the employer. Requiring the claimants to prove a negative in these circumstances is not a sound approach. If the employees refused to continue working under the status quo prior to the lockout, then it is up to Quaker Oats to prove such refusal by substantial evidence in order to disqualify the claimants for benefits.
IV.
Having concluded that because the work stoppage took the form of a lockout the burden of proof rested with Quaker Oats, we now move on to consider whether that burden was satisfied. To meet its burden Quaker Oats was required to show that it was the Union who initially refused to continue operations under the status quo. Quaker Oats argues that the claimants first altered the status quo by refusing to work overtime, by engaging in acts of sabotage and by commencing a concerted work slowdown, all of which amount to an in-plant strike.
In the Board's decision after remand, it made thirteen findings of fact. The first ten findings are identical to the first ten findings of the referee which need not be repeated here. Findings nos. 11, 12 and 13 of the Board state as follows:
*525 11. "The work stoppage began on April 26, 1979."[2]
12. "The claimants first altered the status quo by refusing to perform overtime work and by causing instances of sabotage to the employer's equipment."
13. "The work stoppage affecting the claimants was a strike rather than a lockout."
It is findings 12 and 13 that are disputed by the claimants and thus the question is: are the Board's findings that the claimants first altered the status quo, and that the work stoppage was a strike rather than a lockout supported by substantial evidence?
First, we note that the Board made no finding that the claimants initiated a concerted work slowdown. Upon the record, we agree that no such finding could be justified.
Next, we consider the finding that the claimants altered the status quo by refusing to work overtime. In order to support the finding, the evidence must establish that under the status quo, refusal of overtime work was not permitted. In other words, it must be shown that required overtime work was part of the pre-existing terms and conditions of employment under the expired bargaining agreements. Clearly, this is not the case. The expired agreements provide for voluntary overtime work which the individual employee were free to accept or decline. The fact that during the month of April, 1979, more of the employees than usual exercised their right to refuse overtime work does not establish an alteration of the status quo on the part of the claimants. The status quo was that the employees had the freedom to accept or reject overtime work. The claimants were operating within that status quo when overtime work was refused during April, 1979 even though the rate of refusal was higher than usually experienced.
The Commonwealth Court, in affirming the Board's finding that the claimants altered the status quo by refusing *526 overtime work, concluded that the status quo consisted not only of the terms and conditions of employment under the expired agreements, but also the previous conduct of the parties. Our opinions in Vrotney and Philco limited the status quo to the pre-existing terms and conditions of employment which, as here, are embodied in the expired agreement. The Commonwealth Court's departure from this relatively clear and simple rule was error. The Commonwealth Court said: "[T]he working of overtime by employees constituted one aspect of the status quo ..." We disagree. The pre-existing terms and conditions of employment provided for voluntary overtime work that could be accepted or declined by the individual employees. Nothing more may be required of them when the agreement expires. The Commonwealth Court in focusing on the amount of the overtime hours refused prior to the contract expiration as compared to the overtime refusal rate during the month of April after the contract expired introduced a new factor that never was part of the status quo. Observing that the refusal rate was higher in April than at previous times, the Commonwealth Court concluded that this amounted to an alteration of the status quo by the employees. Because under the terms and conditions of the expired contract overtime work was not required, that conclusion is in error. Furthermore, condoning a rule that would require courts to consider factors other than the previous terms and conditions of employment would only complicate the issue and is contrary to our policy to keep the standards regarding disruption of the status quo easy to apply on the administrative level.[3]Local 730, supra. 505 Pa. at 489, 480 A.2d at 1005. Based upon the evidence that under the pre-existing terms and conditions of employment overtime work was *527 entirely voluntary, it was Quaker Oats, who in this case, first altered the status quo by instituting mandatory overtime.
Lastly, we consider the finding that the claimants altered the status quo by acts of sabotage. Originally the referee found "there was insufficient evidence to prove the employer's charge" as to the sabotaging of equipment. On appeal the Board agreed with that finding. On remand, without any additional evidence being presented, the Board reversed itself, and the referee, and found that the claimants altered the status quo by acts of sabotage toward Quaker Oats' equipment. We have reviewed the entire record and conclude that the referee's initial finding that there was insufficient evidence to establish sabotage was correct.
No evidence was presented as to the identity of even one employee who committed any act of sabotage. No one was disciplined or even charged with any such act. Quaker Oats points to machinery mishaps and production delays following the expiration of the contract as sabotage. The parties stipulated that production delays and machinery breakdowns occurred at times prior to the contract expiration. Further, at the times of the alleged acts of sabotage, management personnel were present in the plant. Also present were outside independent contractors and their employees. Quaker Oats merely presented a summary of various instances of mechanical failure, equipment malfunction and production delays that occurred during April, 1979 along with its bare opinion that those instances constituted sabotage. The Board's finding of sabotage based the instances of mechanical failure, equipment malfunction and production delays, and Quaker Oats' opinion is not supported by substantial evidence.
The order of the Commonwealth Court is reversed and the order of the referee allowing benefits is reinstated.
PAPADAKOS and STOUT, JJ., join in this majority opinion.
*528 FLAHERTY, J., joins in this majority opinion and files a concurring opinion.
NIX, C.J., and McDERMOTT, and ZAPPALA, JJ., file concurring opinions.
FLAHERTY, Justice, concurring.
I join the majority, but write separately to further address the question of whether sabotage was adequately shown to have occurred in the Quaker Oats Company manufacturing facilities. Although the record comes close to providing sufficient support for the Board's finding of sabotage, I agree with the majority that, under the substantial evidence standard, it falls short of the proof required.
Our majority opinion is not to be construed, however, as requiring proof of the identity of particular employees who committed acts of sabotage, as proof of the identity of individual saboteurs is not necessary to establish that sabotage has in fact occurred. By its very nature, sabotage is committed in a surreptitious manner, and virtually never committed openly for management to observe. Further, employees are understandably reluctant to identify saboteurs, due to the fear of reprisals from co-workers. Management is justified in closing a facility when its operations are being subverted by employees, regardless of whether the particular employees responsible therefor can be identified.
The Quaker Oats Company argued, with regard to the alleged suspicious incidents of sabotage, that it is very "unlikely" that they were caused by normal machine breakdowns, considering the frequency at which they occurred during the relevant time frame. If testimony had been presented to compare the exact frequency of breakdowns with that found before the labor difficulties arose, or if testimony had established with greater certainty the causes of certain breakdowns, a contrary decision by this Court would be warranted.
*529 NIX, Chief Justice, concurring.
Under section 402(d), the ineligibility for compensation due to unemployment is clearly established, see, 43 P.S. 802(d) (1964). The genius of the test established in Vrotney Unemployment Compensation Case ("Vrotney"), 400 Pa. 440, 163 A.2d 91 (1960), was its simplicity in application. In any period of turmoil, particularly where the setting is a labor dispute between employees and employers, it is impossible during the heat of the moment to ascertain who is right and who is wrong, who was the provoker and who was the victim. Therefore, in Vrotney, the simple test articulated was to determine which side occasioned the work stoppage. If it was a lockout, the employer was properly assigned as the person responsible for the cessation of the operation. Conversely, if it was a strike, the Union was held responsible.
Admittedly there are many factors that may bear upon an employer's decision to terminate the operations through a lockout. There are also weighty reasons that may force the Union to conclude that a strike is necessary. However, to incorporate these considerations in a determination under the Vrotney rule as it applies to unemployment compensation benefits destroys the utility of that vehicle as a means for providing the implementation of section 402(d). In this instance the employer unquestionably created the cessation of work by electing to cause a lockout.[1] The inquiry for *530 determination of benefits for employees should have stopped at that point. For this reason I can concur in the result reached today.
Nevertheless, I register a serious concern about the rationale applied by the majority, even though the ultimate result, I believe, is correct. The majority has taken the simple question of fact, i.e., whether there was a lockout or a strike, and transformed it into a mixed question of fact and law that can only further disrupt an area where disruption is at all costs to be avoided. The attempt to allow the employer, where there is a lockout, or the union, where there is a strike, to justify that lockout or strike under the terms of 402(d) is totally unwarranted. For the purposes of applying section 402(d), the question is not the legitimacy of the employer's judgment in effecting a lockout, or the union's justification in declaring a strike. These concerns can be properly addressed under grievance procedures and in the bargaining process.[2] The intent of Vrotney was to *531 extricate the determination of benefits from the heat of the labor controversy that provided the basis for the dispute. Today's opinion inextricably ties an employee's entitlement to benefits to the merits of the labor controversy.
Section 402(d) was designed to encourage both sides to continue the working relationship in the face of serious disagreements relating to the conditions of employment. The resolution of these disagreements ideally should come through the bargaining process without the disruption of a work stoppage. Attempting to deter the employer from instituting a lockout or the union from calling a strike, regardless of the differences that may exist between the parties, furthers the purpose of the Act. Rule 402(d) was designed to perpetuate the existing working conditions during the period of an impasse. That simple test was established to determine whether the status quo was broken and by whom. Today we undermine that simple approach, and in my judgment, detract from Vrotney a significant part of its efficacy.
McDERMOTT, Justice, concurring.
I agree with the opinion of Mr. Justice Zappala that the burden of proving a lockout is upon the proponent of that claim. Additionally, I agree with that part of the opinion of Mr. Justice Flaherty which states that where sabotage is alleged its proof is not dependent exclusively upon identification of individual saboteurs, but may be predicated upon the totality of the circumstances.
ZAPPALA, Justice, concurring.
I agree with the result reached by the majority, but write separately because of my concern that the requisite burden of proof in questions of determining the eligibility of a claimant for unemployment compensation may be confused as a result of the majority's opinion.
In Philco Corporation v. Unemployment Compensation Board of Review, 430 Pa. 101, 242 A.2d 454 (1968), we stated:
*532 Since the purpose of our unemployment compensation system is to compensate an individual when work has been denied him through no fault of his own, logically the test of whether a work stoppage resulted from the strike or lock-out requires us to determine which side, union or management first refused to continue operations under the status quo after the contract had technically expired, but while negotiations were continuing.
430 Pa. at 103, 242 A.2d at 455.
This analysis requires the factfinder to determine from the factual circumstances presented which side bore the initial responsibility for the refusal to continue operations during negotiations. It should not be interpreted, however, to require an employer to establish in the first instance that its activities did not result from a lockout. The burden of proof of establishing eligibility for benefits rests with the claimant. Upon presentation of sufficient evidence to indicate that the work stoppage resulted from a lockout, the burden of persuasion may shift to an employer, but the burden is not placed upon the employer in the first instance. To the extent that the majority opinion may be interpreted otherwise, I must disagree.
McDERMOTT, J., joins in this concurring opinion.
NOTES
[1] Mr. Jim McConnaugday, personnel manager of Quaker Oats testified that as of 7:00 p.m. on April 26, 1979, the "employees would be required to work reasonable overtime hours, and that refusal to work the required overtime hours would result in their receiving disciplinary action in the form of a three-day suspension." (R.R. p. 48a.)
[2] The referee's Finding of Fact No. 11 is as follows:
"On April 26, 1979, following the bargaining session, the company gave written notice to the union of its intent to lock out employees represented by Cereal Workers, D.A.L.U. Local 221, AFL-CIO, effective 7:00 p.m., April 28, 1979."
[3] If the status quo were to include the percentage of overtime hours refused by the employees prior to the expiration of the contract, then, among other things, it should also include: the amount or quantity of overtime hours offered by Quaker Oats; the kind or type of overtime work offered by Quaker Oats; the times when overtime work was offered by Quaker Oats, etc. Obviously, this expanded definition of the status quo would destroy the simple standard we have followed since Vrotney and Philco. The status quo consists of the previous terms and conditions of employment, nothing more, nothing less.
[1] The fundamental error in the Opinion of the Court is its failure to distinguish between instances where the issue is whether the work stoppage resulted from a strike or a lockout, see, e.g., Local 730 v. Unemployment Compensation Board of Review, 505 Pa. 480, 480 A.2d 1000 (1984); Fairview School District v. Unemployment Compensation Board of Review, 499 Pa. 539, 454 A.2d 517 (1982); Union City School District v. Unemployment Compensation Board of Review, 499 Pa. 548, 454 A.2d 522 (1982), and this case where it is conceded that the cause of the work stoppage was a lockout. In those cases where the issue centers upon the nature of the work stoppage, it is legitimate to inquire into the motives of the respective sides in determining the character of the work stoppage. In this case, the Opinion seeks to establish the dangerous precedent of introducing into the Vrotney formula the justification, or lack of it, for a lockout and suggests its relevance in the ultimate determination as to the entitlement of the employees to unemployment compensation benefits. Once it is determined that the resulting work stoppage was a result of a strike or a lockout, any further inquiry as to why the particular side acted in such a manner is irrelevant.
[2] In Local 730 v. Unemployment Compensation Board of Review, 505 Pa. 480, 480 A.2d 1000 (1984), the employer asserted its good faith to justify its unilateral change in wages during a collective bargaining impasse. In rejecting the relevancy of that argument, we stated the following:
The effect of the latter argument is to interject a good faith element in the Vrotney formula. The initial acceptance of the Vrotney standard was based on its easy application on the administrative level and at the same time it served the basic policy concerns involved. Vrotney was designed to encourage the continuation of the work relationship under terms previously agreed to by the parties during that difficult period between the expiration of the old agreement and before the new terms of employment had been agreed upon.... Moreover, the administrative units involved in the compensation eligibility decision would have little difficulty in resolving the simple factual question of who first departed from the terms of the expired agreement.... Once we complicate that decision with requirements of ascertaining the good faith or the justification of a party altering the former terms, we create a standard infinitely more difficult to administer, without a corresponding benefit being derived for such a modification.
505 Pa. at 486-87, 480 A.2d at 1003-04 (Citations omitted).
That teaching applies where either party seeks to justify its action in bringing about a work stoppage.
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549 A.2d 1020 (1988)
FIREMEN'S FUND INSURANCE COMPANY
v.
William and Priscilla O'NEILL.
No. 88-64-Appeal.
Supreme Court of Rhode Island.
November 3, 1988.
Robert J. Quigley, Jr., Higgins, Cavanagh & Cooney, Providence, for plaintiff.
Ronald J. Resmini, Ronald J. Resmini Ltd., Providence, for defendants.
OPINION
PER CURIAM.
On October 18, 1988, the litigants in this dispute appeared before a panel of this court to show cause why the defendants' appeal from a grant of the plaintiff's motion for summary judgment by a Superior Court justice should not be summarily sustained.
In June 1983 William and Priscilla O'Neill were injured when the moped on which they were riding was involved in a collision with a hit-and-run vehicle. The collision occurred on Block Island. Subsequently they filed suit in the United States District Court for the District of Rhode Island, alleging that George Millikian was the operator of the vehicle that caused their injuries. Millikian denied that he was the operator of the hit-and-run vehicle. After a trial, a jury returned a verdict in favor of Millikian. The O'Neills then sought compensation from their insurer, Fireman's Fund, pursuant to their uninsured-motorist coverage. The O'Neills filed a demand for arbitration, and Fireman's Fund brought a declaratory-judgment action in Superior Court and moved for a summary judgment. A Superior Court justice granted Fireman's motion, finding that the prior federal action was "res judicata/collateral estoppel with respect to the instant action."
Fireman's Fund argues that the O'Neills were barred from bringing this suit by the judgment in favor of Millikian. Fireman's *1021 Fund claims that in this type of suit an insurer stands in the shoes of the uninsured motorist and if the uninsured motorist is not liable to the injured party, neither is the insured.
The O'Neills contend that they were the victims of a phantom driver and consequently are entitled to seek uninsured-motorist benefits.
Fireman's Fund's reliance on res judicata is misplaced. The bar of res judicata comes into play only when there is an identity of parties and issues, and a final judgment has been entered. Hebert v. Ventetuolo, 480 A.2d 403, 405 (R.I. 1984). The parties in the federal litigation were the O'Neills and Millikian. The present dispute concerns the O'Neills and Fireman's Fund. Since an identity of parties does not exist, res judicata cannot apply.
The prerequisites for the application of collateral estoppel are an identity of issues, a final judgment on the merits, and proof that the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior action. Providence Teachers Union, Local 958 v. McGovern, 113 R.I. 169, 172, 319 A.2d 358, 361 (1974). Here there is no doubt that a final judgment has been entered and that the O'Neills were a party to the prior action. In the federal litigation the issue was whether Millikian caused the collision that resulted in the O'Neills' injuries. The issue in the present dispute between the O'Neills and their insurer is whether the O'Neills are entitled to the uninsured-motorist benefits pursuant to Fireman's Fund's policy.
Fireman's Fund suggests that the general verdict in the federal court implies that all issues were decided in favor of Millikian. If this proposition is accepted, then the issue of whether Millikian was the operator of the vehicle that caused the O'Neills' injuries must have been resolved in his favor. If Millikian was not the driver, then the O'Neills might well have been the victims of a so-called phantom hit-and-run driver. Thus, they may be entitled to uninsured-motorist benefits by this court's ruling in Su v. Kemper Ins. Companies, 431 A.2d 416 (R.I. 1981).
Fireman's Fund also contends that the O'Neills in the past have consistently identified Millikian as the operator of the hit-and-run vehicle. But in seeking uninsured-motorist benefits, the O'Neills are claiming that the operator of the second vehicle was unknown. Although this inconsistency may be brought out when the O'Neills' claim comes on for a hearing, the inconsistency, in and of itself, does not constitute a bar to the O'Neills' seeking relief under the Su doctrine.
Consequently the O'Neills' appeal is sustained. The judgment is vacated, and the case is remanded to the Superior Court for further proceedings.
KELLEHER and MURRAY, JJ., did not participate.
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120 Pa. Commw. 423 (1988)
549 A.2d 246
Commonwealth of Pennsylvania, Petitioner
v.
Rhoderic L. Seymour, Jr., The Estate of Lois Seymour and Jaimie R. Ebersole, Respondents.
No. 2259 C.D. 1987.
Commonwealth Court of Pennsylvania.
Argued June 14, 1988.
October 17, 1988.
*424 Argued June 14, 1988, before President Judge CRUMLISH, JR., Judge DOYLE, and Senior Judge NARICK, sitting as a panel of three.
Richard W. Sponseller, Deputy Attorney General, with him, Robert A. Graci, Chief Deputy Attorney General, and LeRoy S. Zimmerman, Attorney General, for petitioner.
Janis M. Rozelle, with her, Harry M. Ness, for respondent, The Estate of Lois Seymour.
William C. Costopoulos, Kollas, Costopoulos, Foster & Fields, for respondent, Jaimie R. Ebersole.
OPINION BY PRESIDENT JUDGE CRUMLISH, JR., October 17, 1988:
The Commonwealth has filed a petition to divest property and restrict future activities[1] of respondents Rhoderic L. Seymour, Jr., the estate of Lois Seymour and Jaimie R. Ebersole. The respondents have moved for judgment on the pleadings.
Rhoderic Seymour and Ebersole, former coin shop proprietors, were convicted in 1982 and 1983, respectively *425 of receiving stolen property. Lois Seymour who also held an interest in the coin shop business, was never charged with any criminal violations and has since died. On April 3, 1985, acting upon search warrants, York County law enforcement officers seized property consisting of precious metals and stones, coins, jewelry and other items held by the respondents in several safe deposit boxes and wall safes. York County police transferred the property to the Attorney General's office as evidence in a statewide grand jury investigation. According to the Commonwealth's petition, the respondents engaged in racketeering activity in the years 1979 to 1982, in which numerous burglaries were committed and from which they received the stolen property at issue here.
In November 1986, Ebersole and Lois Seymour's estate petitioned the York County Common Pleas Court for return of the property,[2] which, after granting several continuances to facilitate negotiations, released a portion. In 1987, Ebersole resumed negotiations to obtain the release of the remaining property. The parties agreed that the Commonwealth would file the instant divestment petition, which we are now asked to rule upon.
A motion for judgment on the pleadings may only be granted where no material facts are at issue and the law is so clear that a trial would be fruitless. All facts properly pleaded by the non-moving party are to be accepted as true. Beardell v. Western Wayne School District, 91 Pa. Commw. 348, 496 A.2d 1373 (1985).
Respondents contend that based on the two-year limitation period provided in Section 5524(5) of the Judicial Code,[3] the Commonwealth's divestment petition, *426 filed September 28, 1987, was untimely because the last criminal act was alleged in the petition to have occurred over five years before, on March 30, 1982.
The Commonwealth responds that because this action is essentially a civil proceeding, statutes of limitations otherwise applicable to such proceedings or to the underlying criminal activities do not apply. Rather, under the doctrine of nullum tempus occurit regi (time does not run against the King), there is no controlling time limitation.[4]
The doctrine of nullum tempus was reaffirmed by our Supreme Court in Department of Transportation v. J.W. Bishop & Co., 497 Pa. 58, 439 A.2d 101 (1981),[5] wherein the Court held that statutes of limitations do not apply to the Commonwealth unless a statute specifically so provides.
The provisions of the Pennsylvania Crimes Code governing corrupt organizations,[6] pursuant to which this action was initiated, is primarily a criminal statute governing the prosecution of racketeering offenses. *427 However, Section 911(d) provides for civil remedies and reads in pertinent part:
(d) Civil remedies.
(1) The several courts of common pleas, and the Commonwealth Court, shall have jurisdiction to prevent and restrain violations of subsection (b) of this section by issuing appropriate orders, including but not limited to:
(i) ordering any person to divest himself of any interest direct or indirect, in the enterprise; imposing reasonable restrictions on the future activities or investments of any person, including but not limited to prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in;
. . . .
(4) Proceedings under this subsection, at pretrial, trial and appellate levels, shall be governed by the Pennsylvania Rules of Civil Procedure and all other rules and procedures relating to civil actions, except to the extent inconsistent with the provisions of this section.
(Emphasis added.)
Thus, the statute's plain language indicates that these proceedings are civil in nature. Moreover, we note that there is no limitation period expressly applicable to a petition filed pursuant to Section 911(d) of the Crimes Code. Thus, nullum tempus would apply since the statute does not provide for a limitation period against the Commonwealth.
However, respondents rely on Section 5524(5) of the Judicial Code, which, as it existed at the time of the last alleged criminal act, provided that: "The following actions and proceedings must be commenced within two years: . . . (5) An action upon a statute for a civil penalty or forfeiture where the action is given to a government *428 unit." Although it would appear that this limitation period governing "forfeiture" actions "given to a government unit" applies here, we do not believe that Section 5524(5) precludes the Commonwealth from proceeding in this matter.
Initially, we note that the phrase "where the action is given to a government unit" within Section 5524(5) was deleted by amendment effective February 18, 1983, well before the seizure of the disputed property.
Further, we acknowledge the time-consuming and comprehensive efforts necessary for the successful investigation and prosecution of corrupt organizations and racketeering activities. In apparent recognition of the procedural and practical difficulties, the General Assembly enacted a five-year statute of limitations applicable to criminal prosecutions under the Corrupt Organizations Act. Section 5552(b)(1) of the Judicial Code. To impose a contracted two-year period upon a divestment proceeding brought pursuant to that same statute based on the underlying criminal activity is an unreasonable result which we do not believe was intended by the General Assembly. See Cooley v. East Norriton Township, 78 Pa. Commw. 11, 466 A.2d 765 (1983); Section 1922(1) of the Statutory Construction Act. Further, the General Assembly is presumed to favor the public interest as against any private interest. Chesler v. Government Employees Insurance Co., 302 Pa. Super. 356, 448 A.2d 1080 (1982), rev'd on other grounds, 503 Pa. 292, 469 A.2d 560 (1983), amended, 504 Pa. 426, 475 A.2d 102 (1984). Section 911(d) civil divestment proceedings are intended to prevent and restrain further violations of the law pending a criminal investigation. We decline to undermine that purpose.
Therefore, based on the lack of any express statutory time limitation on the instant divestment proceeding at *429 the time of the underlying property seizure, we hold that the doctrine of nullum tempus applies, thus permitting the Commonwealth to proceed before this Court.[7]
Accordingly, respondents' motion for judgment on the pleadings is denied.
ORDER
Upon consideration of respondents' motion for judgment on the pleadings and the briefs filed by the parties pursuant thereto, said motion is denied.
This decision was reached prior to the resignation of Judge MacPHAIL.
NOTES
[1] This action was filed in our original jurisdiction pursuant to the provisions of the Pennsylvania Crimes Code governing corrupt organizations, 18 Pa. C. S. §911(d)(1)(i).
[2] Pa. R.Crim.P. 324.
[3] 42 Pa. C. S. §5524(5).
[4] Respondents also contend that the Commonwealth's petition is barred by Section 5552 of the Judicial Code, 42 Pa. C. S. §5552. We reject this contention because Section 5552 clearly applies only to the initiation of criminal prosecutions, not the civil action presently before us, regardless of respondents' characterization of this proceeding as quasi criminal.
[5] In J.W. Bishop, the Supreme Court overruled this Court's earlier holding that the abrogation of sovereign immunity mandated the abrogation of the nullum tempus doctrine. See Department of Transportation v. J.W. Bishop & Co., 55 Pa. Commw. 377, 423 A.2d 773 (1980). The Supreme Court explained that whereas sovereign immunity had been justified on the theory that the public right to sue the government could be forfeited as to prevent overburdening of courts and jeopardizing of Commonwealth's financial integrity, the rationale for nullum tempus was to preserve public rights, revenues and properties in actions where the Commonwealth is proceeding as a plaintiff.
[6] Commonly referred to as the Corrupt Organizations Act.
[7] Ebersole contends in her brief that she has been denied her due process rights because the Commonwealth unjustifiably delayed in bringing suit from the time of the property seizure and has failed to prove the legality of the seizure. We note, however, that this allegation was not raised in her pleadings, nor is there any record evidence from which to determine the merits of the claims. Hence, we will not consider this issue.
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178 Cal. App. 4th 1009 (2009)
311 SOUTH SPRING STREET COMPANY, Plaintiff and Respondent,
v.
DEPARTMENT OF GENERAL SERVICES, Defendant and Appellant.
No. B212165.
Court of Appeals of California, Second District, Division One.
October 28, 2009.
*1012 Edmund G. Brown, Jr., Attorney General, James M. Schiavenza, Assistant Attorney General, Joel A. Davis and Donna M. Dean, Deputy Attorneys General, for Defendant and Appellant.
Gilchrist & Rutter, Frank Gooch III, Phillipa L. Altmann; Gilbert Dreyfuss and Gilbert Dreyfuss for Plaintiff and Respondent.
OPINION
MALLANO, P.J.
The Department of General Services of the State of California (State) appeals from a postjudgment order denying its request to vacate that portion of a judgment awarding postjudgment interest against State at a rate of 10 percent, which is contrary to article XV, section 1 of the California Constitution, providing for 7 percent interest. We conclude that the order is appealable because it gives effect to that portion of a judgment awarding postjudgment interest which is claimed to be void. Further, we determine that the award in excess of 7 percent interest is void and thus subject to collateral attack because it constitutes relief which the court had no power to grant. Accordingly, on remand the trial court will be directed to vacate that portion of the judgment awarding postjudgment interest in excess of 7 percent.
BACKGROUND
Plaintiff is a commercial landlord who sued State for breach of a lease and obtained a judgment against State for damages of approximately $5.4 million, plus prejudgment interest and postjudgment interest at the rate of 10 percent. Although State filed numerous objections to the proposed judgment, State did not challenge the postjudgment interest rate of 10 percent. State appealed from the judgment but did not challenge the postjudgment 10 percent interest rate on appeal. In May 2008, we upheld the judgment in favor of plaintiff. (See 311 South Spring Street Company v. Department of General Services (May 29, 2008, B195245) [nonpub. opn.].) The remittitur was issued on July 31, 2008.
On August 4, 2008, plaintiff received a check from State for $6,170,681.45. According to plaintiff, the check was short by $440,205.52. *1013 State withheld that part of the judgment representing the award of postjudgment interest in excess of 7 percent, claiming that plaintiff is entitled to only a 7 percent rate pursuant to California Constitution, article XV, section 1.[1]
Plaintiff filed a motion for an order compelling State to satisfy the remainder of the judgment. State filed opposition in which it argued, among other things, that the portion of the judgment awarding postjudgment interest in excess of 7 percent was void and subject to collateral attack at any time. In its reply, plaintiff addressed the issues of whether the trial court had jurisdiction to amend the final judgment and whether State had waived its objection to the amount of postjudgment interest by failing to raise the objection in a timely manner.
At the hearing on the motion, State again contended that the part of the judgment awarding postjudgment interest in excess of 7 percent was void. The motion was heard and granted on September 16, 2008. On September 16, 2008, an order was entered providing that State "must satisfy the money judgment entered against it in this action by October 1, 2008."
State appeals from the September 16, 2008 order, contending that (1) the trial court acted in excess of its jurisdiction by granting plaintiff's motion because the judgment against State can be enforced only pursuant to the provisions of Government Code section 965.6, which plaintiff did not follow, and (2) the portion of the judgment awarding postjudgment interest at a 10 percent rate is void and subject to collateral attack at any time, even after appeal from the judgment.
Plaintiff filed a motion to dismiss the appeal on the ground that the September 16, 2008 order is not appealable because the instant appeal involves issues that could and should have been raised in the prior appeal from the underlying judgment. State filed opposition to the motion to dismiss, *1014 arguing that the September 16, 2008 order is appealable (1) as a postjudgment order under Code of Civil Procedure section 904.1, subdivision (a)(2), and (2) as a void order which gives effect to a portion of the judgment which is void.
DISCUSSION
A. Appealability
We agree with State that the September 16, 2008 order is appealable because it is tantamount to a postjudgment order denying a motion to vacate a portion of a judgment that is claimed to be void. As a preliminary matter, although State's opposition to plaintiff's motion in the trial court was not styled as a request to vacate that portion of the judgment awarding postjudgment interest in excess of 7 percent, the request was unequivocally made by State and addressed in plaintiff's reply papers. State again made the request at the hearing. Under the circumstances, all parties and the trial court were afforded adequate notice of the nature of State's request and the issue before the court.
(1) As explained in Carlson v. Eassa (1997) 54 Cal. App. 4th 684 [62 Cal. Rptr. 2d 884]: "[A]n order denying a motion to vacate a judgment is generally not appealable; otherwise, an appellant would receive `either two appeals from the same decision, or, if no timely appeal has been made, an unwarranted extension of time in which to bring the appeal.' [Citation.] In this case, the postjugment order did not decide new issues, but merely `affirmed' the validity of the judgment. Thus, it initially appears that appeal from the postjudgment order is precluded. [¶] ... [H]owever, an exception to this general rule applies when the underlying judgment is void. In such a case, the order denying the motion to vacate is itself void and appealable because it gives effect to a void judgment." (Id. at pp. 690-691.)
Because of State's claim that the portion of the judgment awarding postjudgment interest in excess of 7 percent is void, the September 16, 2008 order is appealable, and plaintiff's motion to dismiss the appeal is denied.
B. Award of Postjudgment Interest in Excess of 7 Percent Is Void
Plaintiff argues that the 10 percent postjudgment interest rate is proper and, in any event, cannot be collaterally attacked. We disagree. First, under article XV, section 1 of the California Constitution, the postjudgment interest rate to which plaintiff is entitled is 7 percent. Second, the award of 10 percent postjudgment interest is void because it constitutes relief which the court had no power to grant and thus is subject to collateral attack.
*1015 (2) Without citing any authority, plaintiff maintains that the judgment's 10 percent postjudgment interest rate is correct because State was purportedly acting in a "non-governmental" role in entering into the leases with plaintiff. In other words, plaintiff asserts that Government Code section 965.5, subdivision (b) (see ante, fn. 1) is inapplicable and that State is subject to the provisions of Code of Civil Procedure section 685.010. But this proposition was rejected in California Fed. Savings & Loan Assn., supra, 11 Cal.4th at page 352, where the court stated that "the plain language of these provisions [Government Code sections 965.5, applicable to State, and 970.1, applicable to local government entities] exempts the state as well as local public entities from the enforcement of title 9, including the interest provision of Code of Civil Procedure section 685.010."
We therefore agree with State's contention that the amount of postjudgment interest in this case is set by the California Constitution at 7 percent per annum. Notwithstanding the judgment's erroneous 10 percent postjudgment interest rate, the judgment is nevertheless final.
(3) Turning to the dispositive issue in this appeal, we conclude that the provision awarding interest in excess of 7 percent is void and is the type of defect which can be collaterally attacked at any time. "The doctrine of res judicata is inapplicable to void judgments. `Obviously a judgment, though final and on the merits, has no binding force and is subject to collateral attack if it is wholly void for lack of jurisdiction of the subject matter or person, and perhaps for excess of jurisdiction, or where it is obtained by extrinsic fraud. [Citations.]' (7 Witkin, Cal. Procedure [(4th ed. 1997)] Judgment, § 286, p. 828.)" (Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal. App. 4th 1228, 1239-1240 [79 Cal. Rptr. 2d 719].) And the affirmance of a judgment on appeal does not insulate it from a subsequent collateral attack on the ground that it is void. (Hager v. Hager (1962) 199 Cal. App. 2d 259, 261 [18 Cal. Rptr. 695] ["The affirmance of a void judgment upon appeal imparts no validity to the judgment, but is in itself void by reason of the nullity of the judgment appealed from."].)
(4) "Lack of jurisdiction in its most fundamental or strict sense means an entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties. . . . [¶] But in its ordinary usage the phrase `lack of jurisdiction' is not limited to these fundamental situations." (Abelleira v. District Court of Appeal (1941) 17 Cal. 2d 280, 288 [109 P.2d 942] (Abelleira).) "The concept of jurisdiction embraces a large number of ideas of similar character, some fundamental to the nature of any judicial system, some derived from the requirement of due process, some determined by the constitutional or statutory structure of a particular court, and some based upon mere procedural rules originally devised for convenience and *1016 efficiency, and by precedent made mandatory and jurisdictional. Speaking generally, any acts which exceed the defined power of a court in any instance, whether that power be defined by constitutional provision, express statutory declaration, or rules developed by the courts and followed under the doctrine of stare decisis, are in excess of jurisdiction, in so far as that term is used to indicate that those acts may be restrained by prohibition or annulled on certiorari. And, as a practical matter, accuracy in definition is neither common nor necessary." (Id. at p. 291.)
Our courts have permitted collateral attacks on judgments based on factors other than the lack of subject matter jurisdiction or the lack of personal jurisdiction. "Collateral attack is proper to contest lack of personal or subject matter jurisdiction or the granting of relief which the court has no power to grant (Swycaffer v. Swycaffer (1955) 44 Cal. 2d 689, 693 [285 P.2d 1] [default judgment in excess of relief demanded by prayer]; Michel v. Williams (1936) 13 Cal. App. 2d 198, 201 [56 P.2d 546] [court without power to award costs]; [citation])." (Armstrong v. Armstrong (1976) 15 Cal. 3d 942, 950 [126 Cal. Rptr. 805, 544 P.2d 941].)
(5) In Michel v. Williams, supra, 13 Cal. App. 2d 198 (Michel), the cost award against the defendant in a quiet title action was held to be void because a cost award against a defaulting defendant in a quiet title action was prohibited by statute. (Id. at p. 201.) The Michel court explained, "`The mere fact that the court has jurisdiction of the subject-matter of an action before it does not justify an exercise of a power not authorized by law, or a grant of relief to one of the parties the law declares shall not be granted.... Although every exercise of power not possessed by a court will not necessarily render its action a nullity, it is clear that every final act, in the form of a judgment or decree, granting relief the law declares shall not be granted, is void, even when collaterally called in question.'" (Id. at p. 200.)
"[I]n Spreckels S. Co. v. Industrial Acc. Com. (1921) 186 Cal. 256, 260-261 [199 P. 8], the court held that when the amount allowed as a death benefit is prescribed by statute, the commission, in allowing a different amount, rendered an unlawful award in excess of its jurisdiction. The court explained that `jurisdiction' means more than simply authority over the subject matter or question presented. It also means authority to do the particular thing done or, conversely, lack of authority to exercise a power in a particular manner or doing something in excess of the authority possessed. [Citation.]" (Selma Auto Mall II v. Appellate Department (1996) 44 Cal. App. 4th 1672, 1684 [52 Cal. Rptr. 2d 599].)
In Jones v. World Life Research Institute (1976) 60 Cal. App. 3d 836 [131 Cal. Rptr. 674] (Jones), the defendants appealed from an order denying their *1017 motion to quash execution, to vacate the levy, and to declare a portion of a stipulated judgment void on the ground that the stipulated judgment awarded postjudgment interest that was not permitted under the parties' stipulation. The Court of Appeal permitted the collateral attack and struck the postjudgment interest from the judgment.
The key question in Jones was "whether the error, appearing on the face of the judgment, renders the judgment void, in whole or in part, as being beyond the jurisdiction of the court, and subject to collateral attack, or simply renders the judgment erroneousnot voidbut within the jurisdiction of the court, and free from collateral attack." (Jones, supra, 60 Cal.App.3d at p. 844.)
Based on a discussion in Abelleira, supra, 17 Cal. 2d 280, addressing the concept of "lack of jurisdiction" for purposes of determining the right to review by writ of prohibition, the Jones court reasoned that the "views expressed by Abelleira are more persuasive and are more consistent with the decided cases in giving the broader definition to the term `lack of jurisdiction' to produce a void judgment, subject to collateral attack, whenever the trial court has made a `grant of relief to one of the parties which the law declares shall not be granted.' [Citations.] In such a case we deem it insufficient for jurisdictional purposes that the court has jurisdiction of the person and the subject matter. [¶] A judgment made void for excess of jurisdiction, because of the `grant of relief to one of the parties which the law declares shall not be granted,' is to be distinguished from a judgment in which the relief granted is simply in excess of the amount to which a party is otherwise entitled under the law applicable to his cause of action. (See Wells Fargo [& Co. v. City etc. of S. F. (1944)] 25 Cal.2d ... at p. 43 [152 P.2d 625] (interest calculated from an incorrect date).)" (Jones, supra, 60 Cal.App.3d at pp. 847-848.)
The Jones court concluded that "[i]n the instant case, the judgment had properly included an award of prejudgment interest ... in conformity with the stipulation of the parties. But the interest-on-the-judgment provision, contained in the trial court's judgment, must be considered void. Therefore, it was subject to collateral attack." (Jones, supra, 60 Cal.App.3d at p. 848.) Jones has been cited with approval in two cases. (Carlson v. Eassa, supra, 54 Cal.App.4th at pp. 692, 696 [where statute required mother's consent, stipulated judgment for child support arrearages settled by district attorney without mother's consent was void and subject to collateral attack]; Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal. App. 4th 525, 538 [66 Cal. Rptr. 3d 175] [on direct appeal, part of judgment awarding city statutory penalties against contractor was void because statute did not give trial court authority to impose such penalties].)
*1018 (6) Turning to the case before us, because article XV, section 1 of the California Constitution declares the rate of postjudgment interest to which plaintiff is entitled, the award of a rate of interest in excess of 7 percent constitutes a grant of relief which the Constitution forbids and the court had no power to grant. Consistent with the views expressed in Abelleira, supra, 17 Cal. 2d 280, and Jones, supra, 60 Cal.App.3d at page 848, we define a judgment that is void for excess of jurisdiction to include a judgment that grants relief which the law declares shall not be granted. Accordingly, we determine that the portion of the instant judgment awarding postjudgment interest in excess of 7 percent is void.
Wells Fargo & Co. v. City etc. of S. F., supra, 25 Cal. 2d 37, does not compel a contrary result. There, the court held that in allowing interest on taxes paid under protest from an incorrect date, "the court erred therefore merely as to the scope of plaintiff's recovery and its judgment is therefore not subject to collateral attack." (Id. at p. 44.) Here, the error does not involve the use of an incorrect date for an award of interest at an otherwise correct rate, but an award of an incorrect rate of interest which the court has no power to grant under our Constitution. Also, the Wells Fargo court held, in a one paragraph discussion, that the award of costs was not subject to collateral attack even if the court was without authority to require the City and County of San Francisco to pay costs. (Ibid.)
As pointed out in Jones, the Supreme Court in Wells Fargo, decided in 1944, does not refer to its decision in Abelleira, decided three years earlier, nor to Michel, decided eight years earlier. Under this circumstance, the Jones court reasoned that cases like Michel, supra, 13 Cal. App. 2d 198, which appear contrary to Wells Fargo but consistent with Abelleira, "cannot be said to be incorrectly decided." (Jones, supra, 60 Cal.App.3d at p. 847.) This conclusion is buttressed by Armstrong v. Armstrong, supra, 15 Cal.3d at page 950, which does not mention Wells Fargo but cites Michel with approval. We adopt the foregoing reasoning of Jones, conclude that it was correctly decided, and follow it.
We reject plaintiff's assertion that State waived its right to object to the postjudgment interest rate. The authority cited by plaintiff, Bell v. Farmers Ins. Exchange (2006) 135 Cal. App. 4th 1138 [38 Cal. Rptr. 3d 306], is inapposite. In Bell, the court determined that the judgment's award of a 10 percent rate of prejudgment interest was correct and, in any event, the defendant waived its challenge to the rate of prejudgment interest because its attorney expressly agreed in writing with the rate and acquiesced in the rate numerous times throughout the proceedings. (Id. at pp. 1145, 1150.) Bell did not address the issues of whether the interest rate was void and subject to collateral attack. And unlike Bell, there is no evidence here that State expressly agreed to a 10 *1019 percent rate of postjudgment interest. We determine that plaintiff has not established that State waived its rights to the constitutionally prescribed postjudgment interest rate and to mount a collateral attack on the void portion of the judgment. And because the appeal is meritorious, we deny plaintiff's request for sanctions.
DISPOSITION
Plaintiff's motion to dismiss the appeal is denied. The September 16, 2008 order is reversed, and on remand the trial court is directed to vacate that portion of the judgment awarding postjudgment interest at a rate in excess of 7 percent. The parties are to bear their own costs on appeal.
Rothschild, J., and Johnson, J., concurred.
NOTES
[1] Article XV, section 1 of the California Constitution provides in pertinent part: "The rate of interest upon a judgment rendered in any court of this state shall be set by the Legislature at not more than 10 percent per annum.... [¶] In the absence of the setting of such rate by the Legislature, the rate of interest on any judgment rendered in any court of the state shall be 7 percent per annum."
Government Code section 965.5, subdivision (b) provides: "A judgment for the payment of money against the state or a state agency is not enforceable under Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure but is enforceable under this chapter." Thus, the 10 percent rate for postjudgment interest set out in Code of Civil Procedure section 685.010 does not apply to State. There is no statute setting the rate of postjudgment interest on a judgment against State, so the 7 percent rate under the Constitution governs. (See California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal. 4th 342, 352-353 [45 Cal. Rptr. 2d 279, 902 P.2d 297] (California Fed. Savings & Loan Assn.) [constitutional 7 percent postjudgment interest rate applies to judgments against local public entities].)
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632 F. Supp. 1576 (1986)
UNITED STATES of America, Plaintiff,
v.
NORTHERN IMPROVEMENT COMPANY, et al., Defendants.
Crim. No. C3-85-062.
United States District Court, D. North Dakota, Southeastern Division.
April 25, 1986.
*1577 Mary E. Jones, Atty., U.S. Justice Dept., Chicago, Ill., for plaintiff.
Kermit E. Bye and Carlton J. Hunke, Fargo, N.D., for Northern Improvement.
David R. Melincoff, Washington, D.C., for F-M Asphalt, Inc.
Richard J. Braun, Nashville, Tenn., for Steve McCormick.
ORDER OF DISMISSAL
CONMY, Chief Judge.
The Defendants are charged with a violation of the Sherman Act, 15 U.S.C. § 1, by an indictment which charges:
Offense Charged
17. Beginning at least as early as 1975, and continuing at least through July 28, 1981, the exact dates being unknown to the grand jury, the Defendants and co-conspirators engaged in a combination and conspiracy in unreasonable restraint of the aforesaid interstate trade and commerce in violation of Section 1 of the Sherman Act (15 U.S.C. Section 1).
18. The aforesaid combination and conspiracy consisted of a continuing agreement, understanding and concert of action among the defendants and co-conspirators a substantial term of which was to submit collusive, noncompetitive and rigged bids to the City of Fargo, North Dakota, the City of West Fargo, North Dakota and the City of Moorhead, Minnesota for the award of municipal street improvement projects in those cities.
The "overt acts", as set forth in the indictment are:
A. Discussing the submission of prospective bids;
B. Agreeing on a designated successful bidder with the expectation that such successful bidder would ultimately be paid for the work done;
C. Submitting rigged bids;
D. Submitting bids containing false statements;
E. Receiving and accepting payments.
The Bill of Particulars, filed Under Seal by the Government and as limited by this Court recites the following:
The period of time covered by the Indictment in this case begins at least as early as 1975 and continues at least through July 28, 1981. The latter date was the date on which the City of Fargo, North Dakota made final payment for the work performed on Improvement District No. 3682, which was let by the City of Fargo on March 3, 1980 and was won by Northern Improvement Company.
...
The evidence will show that defendants, individually and through their officers, directors, agents, employees and representatives, participated in a conspiracy to rig the bids on municipal street improvement projects in the cities of Fargo, North Dakota, West Fargo, North Dakota and Moorhead, Minnesota. Generally, the conspirators agreed which company would be the low bidder on those projects, and the designated low bidder then provided bid amount numbers for the other coconspirators to use in preparing their bids so that those bids would be intentionally high and noncompetitive. The evidence will show, among other things, that there were meetings and conversations involving representatives of Northern Improvement Company, William Collins, Inc., S & S Construction Co. and F-M Asphalt, Inc. throughout the conspiracy period and that in these meetings and conversations the bids for numerous municipal street improvement projects were rigged. The conspirators carried out this conspiracy by submitting the collusive bids to the municipal letting agencies and receiving payments from the municipalities which had been defrauded *1578 into believing they had received competitive bids. The conspiracy continued until at least July 28, 1981 when final payment by check was made by the City of Fargo to Northern Improvement Company for work on a project let by the City of Fargo on March 3, 1980. Northern Improvement Company received and deposited this check to its accounts.
Numerous municipal street improvement projects were rigged as part of the conspiracy. Payments for the following municipal street improvement projects, which, among others, were rigged as part of the conspiracy, were made and received on or after October 9, 1980.
1. City of Fargo, North Dakota
Project No. 3682
Let on March 3, 1980
Winning bidder Northern Improvement
Company
Final Payment date July 28, 1981[1]2. City of Fargo, North Dakota
Payment [sic] No. 3688
Let on March 24, 1980
Winning bidder F-M Asphalt, Inc.
Final payment date January 27, 1981
3. City of Fargo, North Dakota
Project No. 3669
Let on April 7, 1980
Winning bidder Northern Improvement
Company
Final payment date December 9, 1980
4. City of Fargo, North Dakota
Project No. 3687
Let on April 7, 1980
Winning bidder William Collins, Inc.
Final payment date January 13, 1981
5. City of Fargo, North Dakota
Project No. 3693
Let on April 7, 1980
Winning bidder Northern Improvement
Company
Final payment date July 28, 1981
6. City of Fargo, North Dakota
Project No. 3695
Let on June 16, 1980
Winning bidder S & S Construction
Co.
Final payment date December 16,
1980
7. City of West Fargo, North Dakota
Project No. 2046
Let on May 21, 1979
Winning bidder S & S Construction
Co.
Final payment date October 9, 1980
8. City of West Fargo, North Dakota
Project No. 2048
Let on July 30, 1979
Winning bidder F-M Asphalt, Inc.
Final payment date December 2, 1980
9. City of Moorhead
Project No. 79-A2-3
Let on July 10, 1979
Winning bidder Northern Improvement
Company
Final payment date November 23,
1981
10. City of Moorhead
Project No. 79-A3-1
Let on July 10, 1979
Winning bidder F-M Asphalt, Inc.
Final payment date December 26,
1980
The Government believes that the evidence will further show that the combination and conspiracy was partly express and partly implied.
The indictment was issued on October 9, 1985. The Defendants have made a Motion to Dismiss the Indictment and have agreed, for the purpose of their Motion, that we may assume that all of the information contained in the indictment is true.
The Defendants base their Motion to Dismiss the Indictment on a claim that the government failed to indict during the applicable statute of limitations period. The Defendants argue that they are charged with a conspiracy to violate the Sherman Act by agreeing to submit `rigged bids.' The consideration for the agreement, as *1579 charged by the government, was that each individual conspirator would be given an opportunity to bid on a job without the other co-conspirators bidding competitively on that particular project.
The Defendants' position is that the bids were submitted and contracts awarded pursuant to those bids. The last contract award was made five years and two months prior to the indictment date. At this point any "conspiracy" was over, and the purposes fully accomplished. Since the statute of limitations provides for a five-year period, the prosecution is barred.
The Government, on the other hand, argues that the purpose of the conspiracy was to profit illegally through the rigged bids. That purpose was not accomplished until payments on the noncompetitive bids were received by the conspirators. The payments for the bid projects were received during the five-year period prior to the indictment, therefore, the prosecution was timely.
The crime charged is a per se violation of the Sherman Act. It does not matter that the actual bids submitted by the `designated bidder' on a project were higher or lower than the fair market value of the job. If, in fact, the `designated bidder' submitted a bid which was far below the reasonable value and lost money, that would be no defense to the criminal charge. The specific charge against the Defendants requires no proof of the economics of the matter, only that an agreement was made to bid in a collusive way.
The crime would be complete even if none of the `designated bidders' was successful in obtaining a contract award. It is simple common sense, however, to conclude that the motivation of the conspirators was not altruistic. The Court readily accepts that the conspirators hoped to profit financially through the performance of the project which was assigned to each, and, in order to profit, one must be paid for the project. The Court also concludes that all contractors bidding, legally or otherwise, were similarly motivated.
ISSUE
The issue presented is fairly narrow. Which event triggered the statute of limitations the bid offer, the contract award, or the payment?
ANALYSIS
Counsel for each side offer the same cases in support of their respective and opposite positions. The prosecution has recently called the attention of this Court to a shiny new decision of the United States Court of Appeals for the Fourth Circuit as good authority for the government's position. As expected, the Defendants have urged that the case is also good authority for their position.
In United States v. A-A-A Electrical Co., Inc., 788 F.2d 242 (4th Cir.1986), the defendants were charged with violating Section 1 of the Sherman Act by forming a conspiracy to submit rigged bids on a city airport project in restraint of trade. The defendants preserved their right to appeal from an order denying a Motion to Dismiss based upon the statute of limitations, and entered a guilty plea. The Circuit Court affirmed the trial court.
In the language of the Court:
The bids submitted on June 25, 1979, in fact were not competitive and, before that date, appellants and others had conspired to rig the bids on the project. The conspirators, including appellants, discussed their bids before submitting them and designated A-A-A as the conspirator who would submit the lowest rigged bid. [A-A-A was awarded the contract on July 5, 1979.] A-A-A performed the contract and received final payment for its work in 1980. In May, 1980, A-A-A paid off its co-conspirators for their participation in the bid rigging.
At 243 (emphasis added).
The defendants in A-A-A were indicted on August 28, 1984. One of the issues on appeal, and the one that concerns us here, is whether the five-year statute of limitations ran from the date of the submissions of rigged bids or the date the defendants were paid for the project and paid off their *1580 co-conspirators. If the statute began to run on July 5, 1979, (the date the bids were submitted) then the indictment on August 28, 1984 came 5 years and 54 days after the conspiracy ended. If the statute began to run in May of 1980, (the time when the defendants were paid and when they paid off their co-conspirators) then the indictment would have come 4 years and 4 months after the conspiracy ended.
The Court concluded that "a Sherman Act conspiracy continues through the time of illegal payoffs and receipt of payments." Slip Op. at 6. The Court based its decision on the following reasoning:
As long as some action is necessary to achieve a conspiratorial objective, a conspiracy, under the Sherman Act or otherwise, continues until the offense has been abandoned or until that objective is accomplished. [citations omitted.]
In this case, the indictment charged and appellants admitted by their guilty pleas that the conspiracy by its terms included the rigging of a bid, the securing of an artificial price for the [project], and payoffs to the co-conspirators who helped secure the project. Moreover, the requests for payments, which, like the payoffs were also made in 1980, reflected the inflated and noncompetitive price for the work. These later acts were necessary to the successful consummation of the bid rigging agreement. In fact, as the government points out, the conspirators had to continue cooperating in order for these objectives to be achieved
At 245.
Therefore, the Court concluded that the statute of limitations did not begin to run until May of 1980 and the indictment came within the five-year period.
Both sides have also urged that United States v. INRYCO, Inc., 642 F.2d 290 (9th Cir.1981) supports their opposite positions. This, too, is a bid rigging case where the consideration for the conspiracy was the award of a subcontract to one of the successful bidder's co-conspirators. The Court held that the purpose of the conspiracy was not accomplished until the subcontracts were awarded, and therefore, the statute did not begin to run until that date.
The government urges that the cited cases are authority for the contention that the purpose of the conspiracy is not realized until payment is received, pointing out that the indictment alleges receipt of payment as an overt act and illegal enrichment as the ultimate object.
The defense urges that the same cited cases are authority for their position that the statute began to run when bids were submitted, as no other `partnership purpose' remained to be done. The defense also indicates that the cases cited illustrate that payoffs or subcontract awards show the types of agreements which have a continuing partnership purpose.
The basic principle is clear. Although all of the necessary elements of the crime may have occurred, the statute does not begin to run until the purpose of the illegal conspiracy has been accomplished or abandoned. For so long as there is a continuing partnership purpose, the act of a `partner' is deemed the act of all, if done in furtherance of the aims of the `criminal partnership.'
A conspiracy to submit rigged bids is a crime even if no bids are submitted or if the rigged bid is not successful. If the bid is successful, then the conspiracy could continue either (a) as long as some other `partnership purpose' remains, such as `payoffs' or `subcontract awards,' or (b) (as the government alleges) until any of the co-conspirators receives the ultimate purpose the receipt of payment under the rigged bid.
Each of these possible combinations presents a different timeframe for computation of the statute of limitations.
In its initial denial of the Motions to Dismiss, this Court indicated that the resolution required a complete factual record. Since that time, the Court has had the benefit of oral arguments, a Bill of Particulars, and further briefing generated by the Court's expression of concern that a decision after a three or four week trial with great expense to all concerned was not the *1581 most intelligent course of proceeding. An appeal of this order will present the matter to the Circuit Court in advance of that expense. As the Court believes its decision is correct, it is better for all concerned that this order be entered now rather than later.
This case is clearly distinguishable from both A-A-A and INRYCO. No claim is made that the parties engaged in any joint action after submitting the rigged bids. The indictment and the Bill of Particulars allege an agreement resulting in each defendant being the `designated bidder' on a separate project. The consideration between the `criminal partners' was the abstention of the others from bidding competitively upon each other's `designated project.' The terms and conditions of the illegal contract were completed when the rigged bids were submitted. No sharing of the spoils after payment or showing of favoritism on subcontract award is present.
Under the indictment and Bill of Particulars, the Court is forced to the conclusion that the purpose of the conspiracy was accomplished when the rigged bids were submitted. No guarantees existed that any or all of the rigged bids would be a successful bid. Each contractor, if successful as the bidder, had the opportunity to profit or lose money on a specific project. If unsuccessful as a bidder, no consolation payment or subcontract opportunity is present. No co-conspirator had any participation rights or obligation to the others after the bid was submitted.
Each individual conspirator who was awarded a bid received payment upon completion of that project. Common sense tells us that the hope of the opportunity to profit was a common motivating factor behind the formation of the conspiracy. It does not follow, however, that the purposes of the `criminal partnership' survived the bid submissions. Once the bids were submitted, only the interest of each individual bidder, as an individual and not as a co-conspirator, remained. No partnership interest or conspiracy purpose remained. Therefore, this situation is distinguishable from the situation in A-A-A and INRYCO where there were `payoffs' made to co-conspirators after the bids were submitted.
From this analysis, the Court concludes that the indictment was not filed within the five-year statute of limitations period, and the prosecution is barred.
THEREFORE, THE DEFENDANTS' MOTION TO DISMISS IS GRANTED.
NOTES
[1] Final payment dates are in some instances approximations. [Footnote in original document.]
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632 F. Supp. 566 (1986)
SHAMROCK ASSOCIATES, Plaintiff,
v.
HORIZON CORPORATION, MCO Holdings, Inc., MCO Properties Inc., Charles E. Hurwitz, William C. Leone, and John E. Sommerhalder, Defendants.
HORIZON CORPORATION, MCO Properties Inc., Counterclaimants,
v.
SHAMROCK ASSOCIATES, Natalie I. Koether, Paul O. Koether, Ingalls & Snyder, David B. Blanchard, Myron S. Gelbach, John Does "A" Through "Z", constituting the limited partners of Shamrock Associates, and Richard Roes 1 Through 100, constituting the unknown customers of Ingalls & Snyder, Counterclaim-Defendants.
No. 85 Civ. 6401 (GLG).
United States District Court, S.D. New York.
April 9, 1986.
*567 Christy & Viener, New York City (Franklin B. Velie, of counsel), and Koether Harris & Hoffman, New York City (Mathew E. Hoffman, of counsel), for plaintiff Shamrock Associates.
Golenbock, Eiseman, Assor, Bell & Perlmutter, New York City (Jeffrey T. Golenbock, of counsel), for defendant Horizon Corp.
Kramer, Levin, Nessen, Kamin & Frankel, New York City (Stephen T. Atkins, Gregory A. Danilow, Arthur H. Aufses, Elizabeth Lederer, of counsel), for defendants MCO Properties Inc., MCO Holdings, Inc., Charles E. Hurwitz, William C. Leone and John E. Sommerhalder.
OPINION
GOETTEL, District Judge:
The defendants, Horizon Corporation ("Horizon"), MCO Holdings, Inc., and MCO Properties, Inc. (collectively "MCO"), Charles E. Hurwitz, William C. Leone, and John E. Sommerhalder, move to dismiss Shamrock Associates' ("Shamrock") claims arising under Section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. 78j(b) (1982), and Rule 10b-5 promulgated thereunder, *568 17 C.F.R. § 240.10b-5 (1985) (collectively the "Rule 10b-5 claim"), and under section 13(e) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78m(e) (1982), and Rule 13e-3 promulgated thereunder, 17 C.F.R. § 240.13e-3 (1985) ("the Rule 13e-3 claim"). As discussed below, the defendant's motion is granted in part, and denied in part.
I. BACKGROUND[1]
Shamrock is a New Jersey limited partnership. Horizon is a Delaware corporation with its principal place of business in Arizona. Its common stock is traded on the New York Stock Exchange (the "NYSE"). Horizon is principally engaged in the business of buying, holding, developing, and selling real estate in Arizona, Texas, and New Mexico. MCO Holdings is a Delaware corporation with its principal place of business in California. MCO Properties, a Delaware corporation with its principal place of business in California, is a wholly-owned subsidiary of MCO Holdings. Defendant Charles E. Hurwitz is a director of Horizon and is chairman of the board, chief executive officer, and director of MCO Holdings. Defendant William C. Leone is president, chief executive officer, and a director of Horizon and is president and a director of MCO Holdings. Defendant John E. Sommerhalder is a director of Horizon and an officer of MCO Properties.
Throughout the 1980's, Horizon has experienced financial difficulties. In mid-1984, Horizon faced what its board described as "substantial liquidity problems." In late June 1984, Horizon reached an agreement with MCO that it hoped would alleviate its cash flow problems and provide management assistance. Pursuant to the agreement, MCO paid Horizon $2.8 million for 339,152 shares of Horizon common stock (priced at $8.27 per share) and MCO acquired an option exercisable at any time between December 29, 1984 and June 29, 1989, to acquire an additional 678,304 shares of Horizon common stock at an option price of $8.27 per share. MCO and Horizon also entered into a management agreement pursuant to which MCO's personnel have provided Horizon with management, office, data processing, and other services. MCO also negotiated on behalf of Horizon a new $25 million revolving credit agreement. The lending bank insisted that MCO commit to guarantee up to $5 million of Horizon debt and to provide Horizon with up to $5 million in additional funds, if needed.
Pursuant to the MCO-Horizon agreement, the Horizon Board of Directors was expanded to ten members, with MCO initially designating three representatives. The Horizon Board currently consists of five MCO representatives and five directors free of ties to MCO. Defendants Hurwitz, Leone, and Sommerhalder are three of the Horizon directors with such ties.
Prior to June 11, 1985, MCO held approximately 17.8% of the shares of Horizon common stock. On June 11, 1985, the Horizon Board unanimously approved issuance of a subordinated convertible promissory note to MCO in the amount of $3 million. MCO loaned Horizon $3 million as partial consideration for the note. The note was convertible to 705,882 shares of MCO stock at a price of $4.25 per share. In exchange, MCO agreed to lend Horizon up to $3 million before December 31, 1985.
At the June 11 meeting, Horizon's counsel informed the board that the issuance of the convertible note without stockholder approval might well precipitate a proceeding by the New York Stock Exchange, on which Horizon stock was trading, to delist Horizon's stock. The directors, nevertheless, authorized the note's issuance without stockholder approval. The NYSE subsequently commenced delisting proceedings; however, those proceedings have been *569 stayed pending a review by the NYSE of its own delisting rules and procedures. Ten days after the Board approved the convertible note transaction, Shamrock issued its first statement pursuant to S.E.C. rule 13d, 17 C.F.R. § 240.13d (1985), disclosing its ownership interest in Horizon's outstanding shares.
On August 9, 1985, Horizon's board authorized it to enter into another transaction with MCO. Under that arrangement, Horizon relinquished its right to borrow the additional $3 million available to it under the convertible note agreement, and instead gave MCO 600,000 shares of voting preferred stock in exchange for $3 million. Shamrock asserts that the preferred stock transaction was designed solely to strengthen and preserve MCO's control of Horizon.
During the same August 9 meeting, the MCO board took two other actions that are now the subject of contention. The bylaws were modified to require advance notice of the composition of dissident director slates and to permit the chairman of the shareholder meeting to disallow nominations that did not comply with the advance notice provisions. The MCO board also adopted a provision requiring 75% of the shareholders to approve any by-law changes not proposed by management. Shamrock charges that the Horizon board adopted these two by-law amendments with the same haste and absence of forethought that characterized the other changes.
On August 5, 1985, Shamrock commenced this derivative suit alleging that Horizon had breached its fiduciary duty to its shareholders, as well as violated various provisions in the federal and state securities laws. On September 12, 1985, MCO redeemed the convertible note, thereby increasing its ownership interest in Horizon's outstanding stock to 37.2%. On September 18, 1985, Shamrock served an amended complaint, and moved unsuccessfully for a temporary restraining order enjoining MCO from making any additional purchases of Horizon stock. On September 20, 1985, Shamrock announced a tender offer for up to 51% of Horizon's shares, offering for each share $6.00 plus a certificate of participation in the proceeds to be derived from liquidating Horizon's assets. The amended complaint alleges that between September 5 and October 5, 1986, MCO purchased 450,000 additional Horizon shares in the open market.
The amended complaint contains five claims arising out of the transactions and events detailed above. In its first claim, Shamrock contends that Horizon failed to make certain disclosures that SEC Rule 13e-3 requires. The second claim charges that Horizon's board breached its fiduciary obligations to Horizon's shareholders in approving the above-noted transactions and by-law changes. Shamrock's third cause of action purports to assert the identical claim derivatively on behalf of Horizon's other unaffiliated shareholders. The fourth claim is a derivative and individual claim asserting that MCO purchased Horizon stock between September 5 and October 3, 1985 while in the possession of material, inside information in violation of both Rule 10b-5 and Delaware common law. The fifth cause of action is a claim under section 13(d) Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (1982), and rule 13d promulgated thereunder, 17 C.F.R. § 240.138 (1985), alleging that MCO has made false and misleading statements on its Schedule 13D and Amendments thereto.
The motions before us seek to dismiss the bulk of these claims. The defendants move pursuant to Fed.R.Civ.P. 23.1 to dismiss the derivative claims because Shamrock is not an adequate shareholder representative and because Shamrock failed to make a demand on the Horizon board before commencing its derivative action. The defendants also move, pursuant to Fed.R. Civ.P. 9(b), to dismiss Shamrock's Rule 10b-5 claim for failure to plead fraud with particularity. Finally, the defendants move, pursuant to Fed.R.Civ.P. 12(b)(6), to dismiss Shamrock's Rule 13e-3 claim.
II. DISCUSSION
A. Motion to Dismiss the Derivative Claims
In a derivative action, one or more shareholders seeks to enforce a right of the *570 corporation that the corporation itself has failed to enforce. Because the action is brought on behalf of the shareholders, the derivative class representative must satisfy the Court that it will adequately represent the shareholders. Moreover, the plaintiff must satisfy the Court of its inability to obtain the consent of the corporate directors to maintain the action. In this case, the defendant claims that Shamrock has met neither requirement.
1. The Demand Requirement
Generally, as a prerequisite to bringing suit, a derivative plaintiff must demonstrate to the court's satisfaction that it has tried and failed to induce the directors to bring the desired action.[2]Kaster v. Modification Systems, Inc., 731 F.2d 1014, 1017 (2d Cir.1984). However, if the plaintiff can demonstrate that any demand would have been futile, the demand requirement may be excused. Lewis v. Graves, 701 F.2d 245, 248 (2d Cir.1983).
The defendants move to dismiss their derivative suit, because Shamrock did not make a demand on Horizon's board. Shamrock contends that the composition of the board would render any such demand futile and that the demand requirement is thereby excused.
The law of this Circuit holds that a demand is "presumptively futile where the directors are antagonistic, adversely interested, or involved in the transaction." Lewis v. Graves, supra, 701 F.2d at 248. Futility is presumed when a majority of the directors participated and/or acquiesced in the underlying wrongdoing. Norlin Corp. v. Rooney, Pace, Inc., 744 F.2d 255, 262 (2d Cir.1984); Kaster v. Modification Systems, Inc., supra, 731 F.2d at 1017. In such a case, the directors lack the requisite disinterestedness to fairly determine whether the corporate claim should be pursued. Lewis v. Graves, supra, 701 F.2d at 249.
In this case, MCO's designees, who comprised 50% of the seats on Horizon's board, approved the Horizon-MCO transactions. Without their acquiescence, Horizon could not have obtained approval for the transaction.[3] Given MCO's self-interested participation in the board's deliberations, the Court must infer that any demand upon Horizon's board would have been futile. Shamrock was, therefore, excused from making such a demand prior to commencing this derivative suit.
2. Adequate Representation
The defendants contend that Shamrock's interest in maintaining these derivative claims conflicts with that of other Horizon shareholders. Consequently, they move to dismiss the plaintiff's derivative claims because Shamrock "does not fairly and adequately represent the interests of the shareholders ... similarly situated in enforcing the right of the corporation...." Fed.R.Civ.P. 23.1.
In examining the suitability of a particular derivative class representative, the courts focus on the vigor with which the representative will prosecute the corporate claim and the community of interest between the plaintiff and the proposed stockholder class. Schneider v. Austin, 94 F.R.D. 44, 46 (S.D.N.Y.1982); Sweet v. Bermingham, 65 F.R.D. 551, 554 (S.D.N.Y. 1975). In this case, the plaintiffs have demonstrated their intention to vigorously prosecute the corporate claim. The crucial question remaining under Rule 23.1 is whether some antagonism or conflict of interest between Shamrock and the other unaffiliated shareholders it seeks to represent renders Shamrock an inadequate derivative class representative. The defendants contend that interests diverge because *571 Shamrock is a potential purchaser of Horizon stock, while the other shareholders are potential sellers, but this conflict is more imagined than real. Both Shamrock and the other shareholders have an interest in preventing MCO from locking up control of Horizon and discouraging other suitors from bidding for Horizon's shares. Although Shamrock has an additional interest in acquiring Horizon stock at the lowest possible price, its primary interest appears to be in an acquisition. That interest corresponds with that of Horizon's other unaffiliated shareholders who, no doubt, desire competitive bidding for their shares. Shamrock's proposal to share with other shareholders the proceeds of a Horizon liquidation increases the community of interests between Shamrock and the class of shareholders it seeks to represent.
In Tyco Laboratories, Inc. v. Kimball, 444 F. Supp. 292 (E.D.Pa.1977), the plaintiffs, shareholders in Leeds & Northrup Company ("Leeds"), brought a derivative action on behalf of Leeds alleging that its directors had sold stock at below market price to another entity thereby thwarting the plaintiff's planned takeover. The complaint alleged that the plaintiffs would have paid far more for the contested shares than Leeds actually received. The court found that the derivative plaintiffs shared with the other stockholders the common interest of seeking redress from the defendants for breaching their fiduciary duties or for other violations of federal or state securities and business corporation laws. Id. at 298-99. The court would not disqualify the plaintiff for having an additional economic interest in the derivative suit beyond those of the other shareholders. It pointed out that "[a] plaintiff is not disqualified under Rule 23.1 merely because of the existence of interests beyond those of the class he seeks to represent, so long as he shares a common interest in the matter of the suit." Id. at 298-99 (quoting G.A. Enterprises, Inc. v. Leisure Living Committees, Inc., 517 F.2d 24 (1st Cir. 1975)). Likewise, Shamrock's interest in pursuing control will not prevent it from vigorously pursuing the claims of the other unaffiliated shareholders. Since the defendants have failed to meet their burden of establishing inadequate representation, the defendants' motion to dismiss the plaintiff's derivative claims is denied.[4]
B. Motion to Dismiss for Failure to Plead Fraud with Particularity
Rule 9(b) of the Federal Rules of Civil Procedure provides that "[i]n all averments of fraud ... the circumstances constituting the fraud ... shall be stated with particularity." Fed.R.Civ.P. 9(b). Mere conclusory allegations that the defendant's conduct was fraudulent are not enough. Decker v. Massey-Ferguson, Ltd. 681 F.2d 111, 114 (2d Cir.1982). Instead, the complaint must allege with some specificity the act or statements constituting the fraud. Ross v. A.H. Robins Co., 607 F.2d 545, 557 (2d Cir.1979), cert. denied, 446 U.S. 946, 100 S. Ct. 2175, 64 L. Ed. 2d 802 (1980). When a claim of fraud is based on a charge of non-disclosure of inside information, the pleadings must describe the information that the defendant allegedly failed to disclose, State Teachers Retirement Board v. Flour Corp., 500 F. Supp. 278, 285 (S.D.N. Y.1980), aff'd in part and rev'd in part, 654 F.2d 843 (2d Cir.1981); Stromfeld v. Great Atlantic and Pacific Tea Co., 496 F. Supp. 1084, 1089 (S.D.N.Y.1980), aff'd without op., 646 F.2d 563 (2d Cir.1980), and when the defendant acquired that information. In addition, a complaint alleging fraud will not satisfy Rule 9(b) if pleaded solely on information and belief, Segal v. Gordon, 467 F.2d 602, 608 (2d Cir.1972), unless the pleading concerns matters peculiarly within the adverse party's knowledge. In the latter instance, a statement of facts upon which the belief is founded *572 must accompany the pleading. Id. at 608; Posner v. Coopers & Lybrand, 92 F.R.D. 765, 769 n. 4 (S.D.N.Y.1981), aff'd without op., 697 F.2d 296 (2d Cir.1982); Gross v. Diversified Mortgage Investors, 431 F. Supp. 1080, 1087 (S.D.N.Y.1977).
In paragraph 21 of its amended complaint, Shamrock asserts that MCO, through its domination of Horizon's Board of Directors, "has become privy to material and confidential, material, inside information for its own private purposes, including the purchase of Horizon stock." In paragraph 40, Shamrock states that MCO's open market purchase violated section 10(b) of the Exchange Act and Rule 10b-5, because these purchases were made by MCO "while in possession of confidential, inside information." Nowhere does Shamrock allege what inside information was obtained or when MCO obtained that information.[5] In addition, the complaint purports to base all of its allegations against MCO on information and belief yet provides no indication of the facts upon which its belief is founded. Because Shamrock has utterly failed to satisfy the requirements of Rule 9(b), the defendants' motion to dismiss the Rule 10b-5 claim is granted with leave to replead within 20 days.
C. Motion to Dismiss the Rule 13e-3 Claim
Shamrock alleges that Horizon ran afoul of SEC Rule 13e-3 when, upon issuing the convertible note, it failed to make the disclosures mandated by that rule. Rule 13e-3 requires an issuer of securities who engages in a "going private" transaction to disclose that transaction on a Schedule 13e-3, 17 C.F.R. § 240.13e-100 (1985). The rule lists several types of "going-private transactions." The category with which we are concerned includes "[a] purchase of any equity security by the issuer of such security or by an affiliate of such issuer," 17 C.F.R. § 240.13e-3(a)(3)(i)(A), "which has ... a reasonable likelihood ... either directly or indirectly," id. at § 240.13e-3(a)(3), of "[c]ausing any class of equity securities of the issuer which is either listed on a national securities exchange or authorized to be quoted in an inter-dealer quotation system of a registered national securities association to be neither listed on any national securities exchange nor authorized to be quoted on an inter-dealer quotation system of any registered national securities association." Id. at § 240.13e-3(a)(3)(ii)(B).
The defendants accept for purposes of this motion the pleaded facts that (1) MCO was a Horizon affiliate; (2) the issuance of the convertible note amounted to the purchase by MCO of an equity security; and (3) Horizon did not file a Schedule 13e-3. The defendants, nevertheless, contend that the Rule does not apply because Horizon's shares have yet to be delisted. There is little to this argument. Rule 13e-3 merely requires a reasonable likelihood that delisting will occur. The defendants admit that the NYSE has commenced delisting proceedings (albeit, those proceedings have been stayed). This allegation suffices to withstand a motion to dismiss for failure to allege a reasonable likelihood of delisting. Indeed, conclusory allegations of a "reasonable likelihood" probably suffice to withstand a motion to dismiss a claim under Rule 13e-3.
More troublesome is the defendants' contention that Rule 13e-3's requirements do not apply so long as there remains the possibility that Horizon may list its stock on another exchange or over-the-counter. The defendants contend that in the event that the NYSE does delist Horizon's common shares, Horizon can list these shares on another exchange or authorize them to be quoted on an inter-dealer quotation system. We decline to adapt this narrowly *573 restrictive reading which contravenes the rule's language, history, and underlying policy.
Although not unequivocal, the language of the Rule appears to speak in terms of present possibilities not future potentialities. The rule regulates transactions with a reasonable likelihood of causing securities "to be neither" (emphasis added) listed on any national exchange nor authorized to be quoted over-the-counter. A transaction which, despite delisting on one exchange, leaves an issuer free to list on another exchange or to obtain over-the-counter authorization is still prohibited. Likewise, if, after delisting from an exchange, the stock remains listed on another exchange or authorized to be traded over-the-counter, Rule 13e-3 is implicated. The SEC's own interpretation is in accord. In its release announcing adoption of the Rule, the Commission stated, "delisting of a class of equity securities from an exchange would not trigger the application of Rule 13e-3 if the securities were nevertheless authorized to be quoted on an inter-dealer quotation system of a registered national securities association." Rule 13e-3 Exchange Act Release No. 33-6100 (August 2, 1979), reprinted in A. Borden, Going Private (1984), Appendix A-1 at A-7. The policy underlying Rule 13e-3 also supports our interpretation. Rule 13e-3 seeks to "protect investors `from exploitation by corporate insiders.'" Rule 13e-3 Exchange Act Release No. 14185 [1977-78] Fed.Sec.L. Rep. § 81,366 at 88,744. The rule ensures that investors will have fair notice that the stock is to be delisted and that they may soon experience difficulty trading their shares. Were the rule invoked only when there was no possibility of obtaining a listing, the shareholders would be faced, without prior disclosure, with a temporary freeze on the ability to publicly trade their shares. The failure to disclose the disfavored situation would contravene the policy underlying the rule.
Horizon's stock is currently listed only on the NYSE. Construing the pleadings in a manner most favorable to the non-moving party, as we must on this motion to dismiss, we assume that Horizon had yet to obtain authorization for its shares to trade on an inter-dealer quotation system of a registered national securities association when it issued the convertible note. Although Horizon may obtain such authorization or seek an alternative listing, this does not diminish the impact of Shamrock's allegation that an NYSE delisting would leave Horizon's shareholders temporarily unable to publicly trade their stock. Even if the deprivation were shortlived, it would contravene the letter and spirit of Rule 13e-3 to ignore that rule in these circumstances. Hence, we reject the defendants' argument that an intention to list on another exchange or to authorize over-the-counter trading precludes application of Rule 13e-3. The defendants' motion to dismiss the Rule 13e-3 claim is denied.
III. CONCLUSION
For the reasons stated above, the defendants' motion to dismiss the Rule 10b-5 claim is granted with leave to replead within 20 days; the defendants' motion to dismiss the plaintiff's derivative claims is denied. We also deny the defendants' motion to dismiss the Rule 13e-3 claim.
SO ORDERED.
NOTES
[1] Some of the facts set forth herein are taken from our earlier memorandum decision, Shamrock Associates v. Horizon Corp., No. 85 Civ. 6401, slip op. (S.D.N.Y. Oct. 17, 1984). We note further that the Court has included only background essential to the disposition of this motion.
[2] Fed.R.Civ.P. 23.1 provides in pertinent part,
The complaint shall also allege with particularity the efforts, if any, made by the plaintiff to obtain the action he desires from the directors or comparable authority and, if necessary, from the shareholders or members, and the reasons for his failure to obtain the action or for not making the effort.
[3] In fact, Horizon's 1985 Form 10-K stated that "MCO may be deemed a controlling person of [Horizon]." Appendix to Answering Affidavit, Exhibit B at 4.
[4] The defendants assert that the second claim for relief is actually a derivative claim that cannot be asserted individually. They move to dismiss this claim on the same grounds they have moved to dismiss the other derivative claims. Since we have denied the motions to dismiss those claims, we need not, at this time, decide whether the fiduciary duty claim is derivative in nature. The motion to dismiss the second claim is denied.
[5] At pages 28-31 of its Memorandum in Opposition to Defendants' Motion to Dismiss, the plaintiff lists numerous factual assertions that purportedly support its insider trading claim. If pleaded, these facts might well supply the necessary allegations of fraud. Absent their inclusion in the amended complaint, we need not decide whether facts sufficient to state a claim under Rule 10b-5 have been pleaded.
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851 P.2d 993 (1992)
123 Idaho 697
Donald WEATHERHEAD, Plaintiff-Respondent,
v.
Troll-Master, Inc., an Idaho corporation, Defendant, and
William J. GRIFFIN III and Cynthia J. Griffin, and William J. Griffin and Brenda G. Griffin, and their proprietorship, Acme Machine & Engineering, Defendants-Appellants.
No. 19405.
Court of Appeals of Idaho.
November 4, 1992.
Rehearing Denied March 26, 1993.
Petition for Review Denied May 24, 1993.
*995 Cooke, Lamanna, Smith & Cogswell, Priest River, for defendants-appellants. Thomas E. Cooke, argued.
Jenkins & Leggett, Coeur d'Alene, for plaintiff-respondent. Ida R. Leggett, argued.
SILAK, Judge.
This case involves a dispute among the three directors of a close corporation, Donald J. Weatherhead, William J. Griffin (Griffin), and William J. Griffin, III (Griffin III). During the first year after incorporation, disagreements arose between Weatherhead and the Griffins. Ultimately the Griffins voted to remove Weatherhead as president and assumed full management of the corporation. Weatherhead subsequently sued the Griffins alleging fraud and breach of fiduciary duty. He also asserted that the transfer of corporate stock which the Griffins had received was invalid for lack of consideration. The Griffins counterclaimed asserting that Weatherhead converted corporate funds when he withdrew $2,500 from the corporate account to fund this lawsuit against the Griffins. Weatherhead's fraud and breach of fiduciary duty claims and the Griffins' counterclaim for conversion were tried to a jury, which returned a verdict in favor of Weatherhead on all claims and awarded him $111,578 in damages. The validity of the stock transfer to the Griffins was tried to the court, which invalidated and rescinded the transfer. The Griffins' post-trial motions for judgment notwithstanding the verdict, new trial, and remittitur were all denied by the district court. The Griffins now appeal the judgment entered pursuant to the jury's verdict and the trial court's findings and conclusions, as well as the denial of their post-trial motions. We reverse the judgment and post-trial rulings with respect to the claim of misrepresentation, but affirm the judgment and rulings on post-trial motions in all other respects.
FACTS AND PROCEDURAL BACKGROUND
In 1982, Donald J. Weatherhead devised an extension handle to use on his outboard motor while trolling. Initially, Weatherhead created the handle solely for his personal use; however, by 1986 he had determined to go into business manufacturing and selling the handles on a full-time basis. In 1986 Weatherhead moved to Idaho and searched for a firm to machine the metal parts which he would use in constructing the handles. Weatherhead contacted the Griffins, father and son, who were the sole owners of a machine and mold-making shop doing business under the name Acme Machine & Engineering (Acme Machine). Weatherhead initially approached the Griffins only seeking to have them manufacture specific components which he would use in assembling the handles; the Griffins, however, suggested a number of ways in which the design of the handles could be improved while reducing the cost of production. Weatherhead liked the Griffins' ideas and over time the Griffins became integrally involved in the production of the extension handles.
*996 On or about September 2, 1987, Weatherhead and the Griffins formed a close corporation called Troll-Master, Inc., for the purpose of manufacturing and marketing the extension handles. Troll-Master's articles of incorporation identified Weatherhead and the Griffins as the initial directors of the corporation. At the first directors' meeting Weatherhead was elected president of the corporation, Griffin was elected vice president and treasurer, and Griffin III was elected as vice president and secretary. The directors resolved to issue 5,000 shares of stock to Weatherhead in exchange for his agreement to give the corporation, among other things, the Troll-Master concept and trademark rights, the initial marketing and marketing opportunities, and the existing inventory. The Griffins were each issued 5,000 shares in exchange for their agreement to have Acme Machine manufacture Troll-Master products and sell them to Troll-Master "at cost," exclusive of any charge for the services of either Griffin. After incorporation, Weatherhead performed the marketing and bookkeeping tasks for the company, and the Griffins, dba Acme Machine, manufactured the company's products.[1]
The disputes during the first year of Troll-Master's operation primarily concerned the amount of charges which the Griffins, as Acme Machine, were submitting to Troll-Master for payment. The Griffins had agreed to finance many of the costs associated with producing and marketing Troll-Master's products, and they also had agreed to be a "last creditor" of Troll-Master. Griffin, based on his personal credit-worthiness, had obtained a commercial loan during the first half of 1988, and he sought to charge Troll-Master for the interest expense associated with the loan. At trial, Weatherhead testified that Griffin obtained this loan essentially for the purpose of paying past-due withholding taxes owed by Acme Machine. Griffin testified that this loan was obtained primarily to finance the production of a new line of Troll-Master products. At any rate, Weatherhead refused to agree to have Troll-Master pay the interest expense on the loan, and during the summer of 1988 relations and communication between the parties broke down. At a board meeting held on September 6, 1988, the Griffins voted to remove Weatherhead as president of Troll-Master, and elected Griffin III to replace him. After Weatherhead was voted out as president, he ceased to participate in the management of the corporation, and the Griffins ran the affairs of Troll-Master.
On May 1, 1989, Weatherhead filed this suit against the Griffins in their personal and official capacities as officers and directors of Troll-Master. Weatherhead's complaint alleged three causes of action. His first cause of action alleged that the Griffins committed fraud by intentionally misrepresenting at the time of incorporation that they would manufacture products for Troll-Master "at cost" and that they would be a last creditor of the corporation, and then later charging the corporation much more than what it actually cost to produce the handles and demanding that the corporation pay the debt when to do so would have forced the company into bankruptcy. Weatherhead's second cause of action alleged that the Griffins breached their fiduciary duty as officers and directors of Troll-Master by charging Troll-Master for debts which rightfully pertained to Acme Machine, by overcharging Troll-Master for services performed by the Griffins and employees of Acme Machine, and by charging Troll-Master for equipment purchased in the name of the Griffins and Acme Machine, thus engaging in self-dealing in order to enhance their personal interests as owners of Acme Machine at the expense of Troll-Master. In his final cause of action Weatherhead sought an order rescinding the 10,000 shares of Troll-Master stock which had been issued to the Griffins. Weatherhead asserted that the Griffins' agreement to manufacture Troll-Master products at cost, exclusive of any charge *997 for their services, was a promise of future services, which does not constitute valid consideration for the transfer of corporate stock under Idaho's Business Corporations Act. The Griffins counterclaimed against Weatherhead, seeking the return of $2,500 which they alleged that he converted from corporate funds to finance his suit against the Griffins.
The misrepresentation, breach of fiduciary duty, and conversion claims were tried to a jury, which returned a verdict in favor of Weatherhead on all claims and awarded him $111,578 in damages. In its final judgment, entered on June 5, 1991, the district court made findings and concluded that the Griffins failed to give valid consideration for the Troll-Master stock issued to them, and rescinded the stock transfer.
The Griffins subsequently filed alternate motions for judgment notwithstanding the verdict, a new trial and remittitur of the amount awarded. The Griffins also filed an objection to the form of the judgment, requesting that the trial court state in the judgment that the case was in the form of a stockholder's derivative suit, and therefore the judgment existed in favor of Troll-Master, not Weatherhead personally. The trial court subsequently issued an order denying all of the Griffins' post-trial motions, and overruling their objection to the form of the judgment. The Griffins appeal from the final judgment of the trial court, which was entered pursuant to the jury's verdict and the trial court's findings and conclusions. They also appeal from the trial court's order denying their post-trial motions.
ISSUES RAISED ON APPEAL
On appeal the Griffins raise a number of issues: (1) whether there was sufficient evidence to support the jury's finding of fraud, (2) whether there was sufficient evidence to support the jury's finding of breach of fiduciary duty, (3) whether the district court erred in refusing to modify the form of the judgment, (4) whether there was sufficient evidence to support the jury's finding that Weatherhead did not convert corporate funds, (5) whether the district court abused its discretion in denying the Griffins' motion for judgment NOV, (6) whether the district court abused its discretion in denying the Griffins' motion for new trial, and (7) whether the district court abused its discretion in denying the Griffins' motion for remittitur. We will discuss each of these issues in turn.
ANALYSIS
1. Misrepresentation. On appeal, we review the jury's verdict to determine whether it is supported by substantial competent, although conflicting, evidence. Idaho First Nat'l Bank v. Wells, 100 Idaho 256, 262-63, 596 P.2d 429, 435-36 (1979). To establish his claim of misrepresentation, Weatherhead had the burden of showing:
(1) a representation of fact; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity; (5) the speaker's intent that the representation will be acted upon in a reasonably contemplated manner; (6) the listener's ignorance of its falsity; (7) the listener's reliance on the truth of the representation; (8) the listener's right to rely on the truth of the representation; and (9) the listener's consequent and proximate injury.
Galaxy Outdoor Advertising v. Idaho Transp. Dept., 109 Idaho 692, 696, 710 P.2d 602, 606 (1985). The party alleging fraud has the burden of proving each of these elements by clear and convincing evidence. Smith v. King, 100 Idaho 331, 334, 597 P.2d 217, 220 (1979).
In this case, the jury's finding of fraud is not supported by substantial evidence because Weatherhead failed to introduce any evidence to show that the Griffins misrepresented an existing fact. Weatherhead introduced evidence at trial showing that the Griffins promised to manufacture Troll-Master products "at cost," exclusive of any charges for their services, and that they would be last creditors of Troll-Master. Weatherhead also produced evidence showing that the Griffins subsequently breached both of those promises. However, as we explained in the recent case of Kepler v. WHW Management, Inc., 121 Idaho 466, 478, 825 P.2d 1122, 1134 (Ct. *998 App.1992), a promise to do something in the future, which is subsequently broken, does not constitute a misrepresentation of existing fact unless at the time of making the promise the promisor had no intention of performing the promise. Thus, if at the time the Griffins promised to perform the future acts, they did in fact intend to perform those acts, the fact that they later failed to perform their promise does not raise an action for fraud, but an action for breach of contract. If, however, at the time of promising, the Griffins had no intention of performing the promise, the Griffins would have fraudulently misrepresented an existing fact, their present intention. Kepler, 121 Idaho at 478, 825 P.2d at 1134 (a promise made without the intent to perform constitutes a sufficient basis for an action of fraud because it is a misrepresentation of an existing fact, the promisor's present intent).
Based on the facts and principles set forth above, in order to prove that the Griffins misrepresented their intent to perform a promise, Weatherhead was required to prove by clear and convincing evidence that at the time of making the promise, the Griffins had no intention of performing it. While a mere breach of a contract or promise is never enough in itself to show fraudulent intent, that intent may be inferred from circumstantial evidence. Kepler, 121 Idaho at 478, 825 P.2d at 1134. In this case, although Weatherhead produced evidence showing that the Griffins breached their promises, he failed to produce any evidence, either direct or circumstantial, from which the jury could have found that the Griffins, at the time of promising, had no intention of performing the promises. Because there is no substantial evidence from which the jury could have found that the Griffins misrepresented an existing fact, we set aside that portion of the jury's verdict which found that the Griffins were liable for misrepresentation.
2. Breach of Fiduciary Duty. The jury found that the Griffins breached their fiduciary duty as officers and directors of Troll-Master. On appeal, the Griffins challenge the sufficiency of the evidence supporting this verdict. Again, our standard of review is whether the jury's verdict is supported by substantial competent, although conflicting, evidence. Idaho First Nat. Bank, 100 Idaho at 262-63, 596 P.2d at 435-36.
Idaho law provides that "[a] director shall perform his duties as a director ... in good faith, in a manner he reasonably believes to be in the best interest of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances." I.C. § 30-1-35. Our Supreme Court has held that "directors stand in a fiduciary relation to the corporation, and, hence, to the stockholders...." Hanny v. Sunnyside Ditch Co., 82 Idaho 271, 276, 353 P.2d 406, 409 (1960); Coeur D'Alenes Lead Co. v. Kingsbury, 59 Idaho 627, 630, 85 P.2d 691, 692 (1938).
Weatherhead claims that the Griffins breached their fiduciary duty as directors of Troll-Master by charging Troll-Master for debts which rightfully belonged to Acme Machine; by overcharging Troll-Master for labor performed by the Griffins and employees of Acme Machine; and by purchasing equipment in the name of the Griffins and Acme Machine, and charging the cost of that equipment to Troll-Master. Weatherhead asserts that the Griffins breached their fiduciary duty to the corporation by engaging in self-dealing which unfairly enhanced their personal interests as owners of Acme Machine at the expense of Troll-Master.
Idaho's business corporations statute provides that under certain conditions corporate directors may validly enter into transactions with the corporation. The statute provides that no transaction between a corporation and one or more of its directors, or between the corporation and any other entity in which one or more of its directors are financially interested, shall be either void or voidable because of such relationship or interest, if:
(a) the fact of such relationship or interest is disclosed or known to the board of directors or committee which authorizes, approves or ratifies the contract or *999 transaction by a vote or consent sufficient for the purpose without counting the votes or consents of such interested directors; or
(b) the fact of such relationship or interest is disclosed or known to the shareholders entitled to vote and they authorize, approve or ratify such contract or transaction by vote or written consent, in which vote or consent such interested directors may participate to the extent that they are also shareholders; or
(c) the contract or transaction is fair and reasonable to the corporation and the fact of such relationship or interest is fully and fairly disclosed or known to the corporation.
I.C. § 30-1-41.
Under the statute, a transaction between a corporation and one of its directors is not automatically void or voidable as a result of the director's fiduciary relationship with the corporation, if subsection (a), (b) or (c) applies. By implication we must conclude that if neither subsection (a), (b) or (c) applies, a transaction between an interested director and the corporation is automatically void or voidable.
After a careful review of the trial transcript, we conclude that there was substantial competent evidence for the jury to find that the legitimizing conditions set forth in subsections (a), (b) and (c) were not met in this case. At trial, Weatherhead introduced substantial evidence from which the jury could have concluded the following: that the Griffins charged Troll-Master $1,900 for insurance which was purchased to cover Acme Machine's assets; that the Griffins charged Troll-Master $10,220 for the interest charges on a loan procured by the senior Griffin in his own name, which was used at least in part to pay past-due withholding taxes owed by Acme Machine; that the Griffins charged Troll-Master $3,200 for their own services, contrary to their prior agreement with the corporation; that the Griffins double-charged Troll-Master $37,697 for work performed by an Acme Employee; that the Griffins charged Troll-Master $67,272 more than what it cost Acme Machine to manufacture Troll-Master products, contrary to their prior agreement to manufacture Troll-Master products and sell them to the corporation "at cost"; and that the Griffins charged Troll-Master $6,197 for a display booth which the Griffins purchased in their own name and in the name of Acme Machine.
In order for either subsection (a), (b) or (c) of I.C. § 30-1-41 to apply, the interested directors must fully and fairly disclose the facts surrounding their interest in the transaction to either the corporation's shareholders or its disinterested directors. In this case, there was ample evidence from which the jury could have concluded that the Griffins did not fully and fairly disclose the facts surrounding these transactions to Weatherhead, a shareholder and the only disinterested director, but tried to conceal the improper nature of the transactions by making the alleged overcharges appear to be legitimate Troll-Master debts. The Griffins did not assess most of the improper charges to Troll-Master until after Weatherhead was removed as president of the corporation and was no longer informed of the corporation's bookkeeping. Based on this evidence the jury could have concluded that the transactions between the Griffins and Troll-Master did not comply with conditions of either I.C. § 30-1-41(a), (b) or (c). Thus, they breached their fiduciary duty to the corporation and the transactions were automatically void or voidable.
Additionally, we note that I.C. § 30-1-41 does not provide a basis for validating for all purposes a transaction between an interested director and the corporation whenever the technical requirements of one of the subsections have been complied with. 18B Am.Jur.2d Corporations § 1738 (1985) (discussing the Revised Model Business Corporations Act which is substantially identical to Idaho's statute). Rather, the statute "simply establishes that the transaction is not automatically void or voidable solely by reason of the director's interest. In other respects not covered by the statute, equitable principles continue to be applicable. Nothing in the statute sanctions unfairness to the corporation nor removes *1000 the transaction from judicial scrutiny." Id. We conclude that even if one of I.C. § 30-1-41's subsections did apply, based on the facts recited above the jury could have found that the Griffins breached their fiduciary duty to Troll-Master by engaging in unfair self-dealing to promote their own interests at the expense of Troll-Master. The evidence is also sufficient to show that the Griffins' breach of their fiduciary duty damaged Troll-Master in the amount awarded by the jury, $111,578. Because the jury's verdict with respect to the breach of fiduciary duty claim and the amount of damages is supported by substantial competent, although conflicting, evidence, we will not disturb that portion of the verdict on appeal.
The Griffins assert that the jury's finding of breach of fiduciary duty is inconsistent with the trial court's determination to rescind the issuance of their Troll-Master stock. They claim that if the issuance of their Troll-Master stock is void they could not have voted any shares to elect themselves directors and officers of Troll-Master, and therefore they could not have had or breached any fiduciary obligation to the corporation. The Griffins' argument is unfounded for the following reasons.
Troll-Master's corporate existence began upon the issuance of its certificate of incorporation. I.C. § 30-1-56. The number of directors and the names of the directors of the initial board of directors were fixed by Troll-Master's articles of incorporation. I.C. § 30-1-36. Troll-Master's articles of incorporation specified that the number of directors constituting the board of directors would be three, and identified the initial members of the board as Weatherhead and the Griffins. The Griffins did not become directors of Troll-Master by voting any shares in the corporation. Idaho law does not require directors to be shareholders of the corporation unless the articles of incorporation or bylaws so require. I.C. § 30-1-35. We hold that Weatherhead and the Griffins were validly appointed to be the initial directors of Troll-Master, irrespective of the shares they subsequently did or did not acquire in the corporation.
Under Idaho law, the Griffins and Weatherhead held their positions as initial directors until the first annual shareholders' meeting, and until their successors were elected and qualified. I.C. § 30-1-36. The record indicates that at the first annual shareholders meeting, Weatherhead and the Griffins each voted their shares to re-elect themselves to the board of directors. Even if the Griffins did not, in fact, have any shares with which to re-elect themselves to the board of directors,[2] pursuant to I.C. § 30-1-36, and Troll-Master's articles of incorporation, the Griffins were to remain directors until their successors were duly elected and qualified. During the time relevant to this action the record is clear that the Griffins' successors were never elected or qualified, and that the Griffins at all times continued to function as directors of the corporation. Accordingly, we hold that the Griffins were directors of Troll-Master at all times relevant to this action, that as directors they owed a duty of loyalty to Troll-Master, and, pursuant to our reasoning above, the jury's finding that the Griffins breached that duty is supported by substantial competent, although conflicting evidence.
3. Form of the Judgment. Weatherhead filed this suit naming himself as plaintiff, with Troll-Master and the Griffins as defendants. Weatherhead styled the general allegations of his complaint to follow the form and substance prescribed by I.R.C.P. 23(f), which rule sets forth the requirements for bringing a stockholder's derivative suit. However, the allegations of Weatherhead's complaint state a personal claim against the Griffins for misrepresentations which induced Weatherhead personally to act to his detriment, and a derivative claim against the Griffins for breach of the fiduciary duty they owed to the corporation. When the district court entered final judgment against the Griffins, it *1001 did so in favor of Weatherhead in his personal capacity, rather than in favor of the corporation. The Griffins filed an objection to the form of the judgment, claiming that the action was brought as a derivative suit, and that judgment should not be entered in favor of Weatherhead personally, but in favor of Troll-Master. In arguing the issue at a post-trial hearing, counsel for Weatherhead stated, "I view this as a direct action for fraud and a derivative action for the breach." This statement accords with the form and substance of Weatherhead's complaint.
Based on our conclusions set forth above, Weatherhead's fraud claim was not proven by substantial evidence, and the only claim remaining which supports the jury's award of damages is the breach of fiduciary duty claim. As Weatherhead has admitted, the breach of fiduciary duty claim is a derivative claim. In his complaint, Weatherhead alleged that the Griffins breached a duty they owed to the corporation, not to him personally, and that that breach harmed the corporation. In fact, all of the acts alleged by Weatherhead to be a breach of the Griffins' fiduciary duty were acts in which the Griffins wrongfully charged the corporation to enhance their personal interests. "A stockholder's derivative suit ... is not for the individual benefit of the stockholder. It is established that both the cause of action and the judgment thereon belong to the corporation." LaHue v. Keystone Inv. Co., 6 Wash.App. 765, 496 P.2d 343, 352 (1972). We conclude that the district court erred in refusing to modify the form of the judgment to reflect that the judgment was in favor of Troll-Master, rather than Weatherhead in his personal capacity.
4. Conversion. The Griffins assert that Weatherhead did not have authority to withdraw $2,500 from Troll-Master's account to finance the litigation of this lawsuit. It is undisputed that Weatherhead withdrew the $2,500 from Troll-Master's account for this purpose. It is significant to note that this was not a direct action by Troll-Master against the Griffins. As we held above, the claim upon which the jury's verdict rests was a derivative claim brought by Weatherhead on behalf of the corporation, against the Griffins. Proper withdrawal and expenditure of the $2,500 from Troll-Master's account required corporate action. It does not appear from the record that Weatherhead, as president, was authorized to take such corporate action. The officers of a corporation have "such authority and perform such duties in the management of the corporation as may be provided in the bylaws, or as may be determined by resolution of the board of directors not inconsistent with the bylaws." I.C. § 30-1-50. Whether Troll-Master has any bylaws, and what those bylaws might provide, is not apparent in the record before us. In the absence of bylaws, we note that "[a]ll corporate powers shall be exercised by or under authority of, and the business and affairs of a corporation shall be managed under the direction of, a board of directors except as may be otherwise provided in this act or the articles of incorporation." I.C. § 30-1-35. We recognize that there was testimony adduced at trial to the effect that Weatherhead had authority to make withdrawals from Troll-Master's account; however, no fact or law has been presented to us from which we could conclude that Weatherhead, as president of the corporation, had authority to withdraw Troll-Master funds to finance a lawsuit against the Griffins which was not filed by the corporation with approval of the board of directors. Therefore, we hold that it was improper for Weatherhead to use Troll-Master funds for this purpose.
We note, however, that it is "well settled that where a stockholder brings an action for the benefit of the corporation and the suit terminates favorably to the stockholder and thus inures to the benefit of the corporation the stockholder is entitled to reimbursement for his expenses, including attorney's fees." Coeur D'Alenes Lead Co., 59 Idaho at 632, 85 P.2d at 693. Thus, although Weatherhead is liable to the corporation for the $2,500 he withdrew to finance this action, we hold that Weatherhead is entitled to be reimbursed by Troll-Master for all of the expenses he *1002 incurred in prosecuting this suit, including his attorney fees.
5. Motion for Judgment Notwithstanding the Verdict. We review the denial of a motion for judgment notwithstanding the verdict under the same standard employed by the trial court in determining whether to grant or deny the motion. In order to prevail on their motion for judgment notwithstanding the verdict, the Griffins bore the burden of demonstrating to the trial court that, even when the facts presented are accepted as true and viewed in a light most favorable to the nonmoving party, the jury's verdict was not supported by substantial and competent evidence. Brand S Corp. v. King, 102 Idaho 731, 732-33, 639 P.2d 429, 430-31 (1981); Mann v. Safeway Stores, 95 Idaho 732, 734-36, 518 P.2d 1194, 1196-98 (1974). As we held above, with respect to the claim for breach of fiduciary duty and the amount of the damages awarded, the jury's verdict is supported by substantial and competent evidence. Therefore, the trial court did not err in denying the Griffins' motion for judgment notwithstanding the verdict with respect to those issues. However, as we also held above, there was no substantial evidence to support the claim that the Griffins made a fraudulent misrepresentation. Therefore, we hold that the district court erred by not granting the Griffins' motion for judgment notwithstanding the verdict with respect to that claim.
6. Motion for a New Trial. The trial court is vested with broad discretion in determining whether to grant or deny a motion for new trial under Rule 59(a), and its determination will not be overturned absent a manifest abuse of that discretion. Fitzgerald v. Walker, 121 Idaho 589, 593, 826 P.2d 1301, 1305 (1992); Bott v. Idaho State Bldg. Authority, 122 Idaho 471, 475, 835 P.2d 1282, 1286 (1992). To determine whether the trial court has properly exercised its discretion in ruling on a motion for new trial, we conduct a multi-tiered inquiry to determine:
(1) whether the lower court rightly perceived the issue as one of discretion;
(2) whether the court acted within the outer boundaries of its discretion and consistently with any legal standards applicable to specific choices; and (3) whether the court reached its decision by an exercise of reason.
Bott, 122 Idaho at 475, 835 P.2d at 1286.
After hearing arguments from both sides at the hearing on the Griffins' post-trial motions, the district court stated that it intended to deny the motions because the jury's verdict was amply supported by the evidence and eminently fair. After a careful review of the transcripts of the trial and the hearing on the post-trial motions, we conclude that the trial judge correctly perceived that whether to grant the motion for new trial was within his discretion, that he acted within the outer boundaries of that discretion and consistently with the applicable legal standards, and that he reached his decision to deny the motion for a new trial by an exercise of reason. Therefore we will not reverse the trial court's denial of the motion.
7. Motion for Remittitur of the Amount of the Judgment. "The amount of damages is a question of fact which is for the jury in the first instance and secondly for the trial judge on a motion for a new trial." Bratton v. Slininger, 93 Idaho 248, 253, 460 P.2d 383, 388 (1969) (overruled on other grounds in Mann, 95 Idaho at 734-36, 518 P.2d at 1196-98). This Court on review will disturb an award of damages "only when the facts are such that the excess appears as a matter of law, or is such as to suggest at first blush, passion, prejudice, or corruption on the part of the jury." Blaine v. Byers, 91 Idaho 665, 671, 429 P.2d 397, 403 (1967). In denying the Griffins' motion for remittitur, the trial court stated that the amount of the verdict was supported by the evidence, and that the verdict and the result were eminently fair. As we stated above, we conclude that the verdict as to the amount of damages is supported by the evidence. Thus, we conclude that the amount of the verdict does not appear as a matter of law to be excessive, nor does it appear to be the result of passion, prejudice, or corruption on the part of the jury. *1003 Therefore, we affirm the trial court's denial of the Griffins' motion for remittitur.
CONCLUSION
Based on the reasoning set forth above, we hold that there was insufficient evidence to support the jury's finding of fraud, but there was sufficient evidence to support the jury's finding of breach of fiduciary duty and the amount of damages awarded as a result of that breach. We also hold that the district court erred in refusing to modify the form of the judgment so that the judgment is in favor of Troll-Master, not Weatherhead. Based on the undisputed facts, we hold that Weatherhead's appropriation of Troll-Master funds to finance this action was improper, and we set aside that portion of the jury's verdict which found to the contrary; however, Weatherhead is entitled to be reimbursed by Troll-Master for the expenses, including attorney's fees, which he incurred as a result of prosecuting this action. With respect to the fraud claim, the district court abused its discretion in denying the Griffins' motion for judgment notwithstanding the verdict, however the district court did not err in denying the motion for judgment notwithstanding the verdict with respect to the breach of fiduciary duty claim and the amount of damages awarded. We also conclude that the district court did not abuse its discretion in denying the Griffins' motion for new trial, and in denying the Griffins' motion for remittitur.
Costs on appeal are awarded to Weatherhead. No attorney fees are awarded on appeal.
WALTERS, C.J., and SWANSTROM, J., concur.
NOTES
[1] About half of Acme Machine's business pertained to manufacturing Troll-Master's products.
[2] The district court expressly refused to conclude that the Griffins' shares were void ab initio.
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175 Ga. App. 128 (1985)
333 S.E.2d 11
ALLEN
v.
THE STATE.
69994.
Court of Appeals of Georgia.
Decided June 12, 1985.
J. Kenneth Royal, for appellant.
Glenn Thomas, Jr., District Attorney, Jerry W. Caldwell, Assistant District Attorney, for appellee.
McMURRAY, Presiding Judge.
The defendant appeals his conviction of armed robbery. Held:
1. The defendant contends that the failure of the trial court to excise the guilty plea of his co-defendant, Thomas Sloan, from the indictment prior to sending it out with the jury constitutes reversible error. A discussion, initiated by the court, concerning the deletion of the plea of guilty by the co-defendant from the indictment occurred prior to the court's charge to the jury. The defense made no objection to this issue but concurred with the court's suggestion that the co-defendant's plea needed to be covered up. The record reflects that the court, at the conclusion of the trial, instructed the State's attorney and the defendant's counsel to check the evidence before it and the indictment were sent to the jury room. In Gilstrap v. State, 162 Ga. App. 841, 845 (8) (292 SE2d 495), we held where the defendant's counsel had been given an opportunity to inspect the indictment before its submission to the jury, and raised no objection until after the verdict, there was no error in the court's permitting the indictment to go to the jury room without excising the guilty plea of the co-indictee. See Flowers v. State, 159 Ga. App. 516 (284 SE2d 32). Therefore, in the case sub judice, the trial court did not err in allowing the indictment to go to the jury without excising the guilty plea since defense counsel was given an opportunity to inspect the *129 indictment and no objection was made until after the verdict.
2. The defendant contends that the evidence was insufficient to prove his guilt beyond a reasonable doubt, arguing that the testimony of the defendant's accomplice was uncorroborated. "A person cannot be convicted of a felony solely upon the uncorroborated testimony of an accomplice. Code Ann. § 38-121 (now OCGA § 24-4-8); Shumake v. State, 159 Ga. App. 141 (1) (282 SE2d 756) (1981). However, as a matter of law, the corroborating evidence need only be slight to be sufficient. Id. It may be circumstantial. Gunter v. State, 243 Ga. 651 (2) (256 SE2d 341) (1979). It must be independent of the accomplice's testimony and probative of guilt. Id. at 654-5; Shumake v. State, supra at 141-2. To be probative of guilt, the evidence must tend to prove the identity and participation of the accused. Shumake v. State, supra at 142." Harris v. State, 165 Ga. App. 186-187 (299 SE2d 393).
In the case sub judice, the corroborating evidence showed that the defendant was at the crime scene 15 to 20 minutes prior to the robbery; a stocking mask, fitting the description of the one used in the robbery, and several. 410 shotgun shells were found on the floor of the defendant's vehicle shortly after the robbery; and the shotgun used in the robbery and the shirt worn by the co-defendant were found in the defendant's house. Furthermore, the defendant admitted to the police that he carried the co-defendant to the crime scene prior to the robbery; concealed the weapon used in the robbery after the crime; provided the co-defendant with another shirt after the robbery; used part of the proceeds from the robbery to buy gasoline; and, was in possession of money taken in the robbery. We find that this corroborating evidence was more than sufficient to prove the defendant's identity and participation in the crime. We further hold that the evidence was sufficient to enable a rational trier of fact to find the defendant guilty beyond a reasonable doubt of the crime charged. Harris v. State, 165 Ga. App. 186, supra; Jackson v. Virginia, 443 U.S. 307 (99 SC 2781, 61 LE2d 560); Fordham v. State, 254 Ga. 59 (1) (325 SE2d 755); Beck v. State, 254 Ga. 51, 53 (13) (326 SE2d 465).
Judgment affirmed. Banke, C. J., and Benham, J., concur.
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Robert M. Dow, Jr., United States District Judge *968Plaintiffs Wayne Bland, Danuta Durkiewicz, David Bowles and Adam Reyes ("Plaintiffs") filed this putative collective and class action on behalf of themselves and all those similarly situated against Defendants Edward D. Jones & Co., L.P. and The Jones Financial Companies, L.L.L.P.; alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (Count I) and several Illinois and Missouri statutes. Currently before the Court is Defendants' motion to dismiss [38] Plaintiffs' Amended Class and Collective Action Complaint [35]. For the reasons stated below, Defendants' motion to dismiss [38] is granted. Plaintiff Bowles's claims in Count I are dismissed with prejudice, except as to any claims that relate to the TCR Provision, which are dismissed without prejudice. Plaintiffs' recordkeeping claim in Count I is also dismissed with prejudice. The rest of Count I and Counts II-VI are dismissed without prejudice. Plaintiffs are given until April 15, 2019 to file an amended complaint consistent with this opinion. The case is set for further status on April 23, 2019 at 9:00 a.m. Finally, Defendants' request for oral argument [63] is denied as moot.
I. Background1
Plaintiffs are all former Financial Advisors who worked for Defendants and participated in Defendants' Financial Advisor training program.2 [35, ¶¶ 9-13.] Plaintiffs assert that the terms of the training program, the wages they received during the training program, and the wages they subsequently received as financial advisors violate the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. , and a host of state laws. See generally [35]. Many of their claims concern one of the terms contained within the "Financial Advisor Employment Agreement" that Plaintiffs and the class they wish to represent were required to execute before beginning their training.3 [Id. ¶ 15.]
*969The contract provision in question, which the Court will refer to as the "training cost reimbursement provision" ("the TCR Provision"), states:
Upon execution of this Agreement and receipt of your can sell date from Edward Jones, you will be a financial advisor of Edward Jones. If, within three (3) years after receipt of your can sell date, your employment with Edward Jones is terminated by you or by Edward Jones, you maintain registration of your license with FINRA and accept employment with any entity as either an employee or independent contractor engaged in the sale of securities and/or insurance business, you agree to reimburse Edward Jones the reasonable cost of the training Edward Jones has provided you including, but not limited to, the cost of the selection and hiring. * * * You agree that the reimbursable amount bears a reasonable relationship to the computed damages Edward Jones would suffer from a breach by you and that Edward Jones will suffer demonstrable loss as a result of your breach. The amount you agree to reimburse Edward Jones is $ 75,000.00. There shall be no reduction in the amount of training costs owed by you in the event your employment is terminated during the first year of service as a financial advisor of Edward Jones. This obligation shall be reduced by $ 9,375.00 for each full quarter year of service beginning the thirteenth month of your employment as a financial advisor of Edward Jones. You must be employed by Edward Jones for each full quarter year in order to have your training cost obligation reduced according to the provisions of this paragraph.
[39-2, ¶ 21.] Each of the Plaintiffs also received a "Compensation Agreement," [35, ¶ 20], that provides a schedule of compensation for both their time as trainees and then as "New Financial Advisors", [39-3].
The training program comprises a 17-week "Study Calendar" period divided into two stages. [Id. ¶¶ 17-18.] During the first or "self-study" stage, trainees study for industry licensing exams using written online materials on computers loaned to them by Defendants." [Id. ¶ 18.] At the end of that stage, trainees take and must pass the FINRA Series 7 and 66 licensing exams.4 "Series 7 and 66 licenses are essential to the successful completion of the training program, and FA Trainees must pass the exams on their first try or be fired." [Id. ]
The second or "door knock" stage, begins with one week of on-site training in either St. Louis, Missouri or Tempe, Arizona, followed by seven weeks of knocking on doors in a designated neighborhood to obtain individuals' contact information. [Id. ¶ 19.] This stage ends with another on-site week, designated as "Evaluation/Graduation,"
*970where Defendants determine whether trainees "can sell" to prospective clients. [Id. ]
During this Study Calendar period, trainees are paid on a bi-weekly basis. [Id. ¶ 20.] The trainees also qualify as overtime eligible. [Id. ] Although Defendants expect trainees to work 45 hours during the first stage and 60 hours during the second stage, the projected bi-weekly pay does not vary between the two periods. [39-3, at 2.] Rather, Defendants adjust the hourly rate between the two periods such that individuals like Plaintiffs are paid an almost identical amount in both periods.5 [Id. ] This "projected gross pay" includes the overtime trainees are expected to work. [Id. ] However, Plaintiffs allege that Defendants neither track nor compensate trainees for the hours that they actually work. [35, ¶ 20.] Plaintiffs further allege that Defendants' policy and practice "knowingly discourages * * * [trainees] from accurately reporting all of the hours they work and fails to pay * * * [trainees] wages and overtime for the work they perform." [Id. ¶ 22.]
Upon achieving "can sell" status, trainees become "new financial advisors" and Defendants classify them as overtime "exempt." [35, ¶ 23; 39-3, at 2.] Financial Advisors are salaried, though the salary begins to fluctuate based on performance after four months. [39-3, at 2-3.] However, a financial advisor's salary includes a "minimum guaranteed salary" ("MGS") that does not fluctuate and is paid regardless of performance. [Id. ] What amount of a financial advisor's salary is composed of MGS "is determined by the applicable federal and state guidelines where [the advisor's] branch is located." [Id. at 3.]
As new financial advisors, individuals such as Plaintiffs solicit "door knock" contacts to become clients. [35, ¶ 23.] They receive little training during this period, which primarily constitutes "access to a Regional Trainer and wholesaler presentations by 'preferred partner' firms whose products the Firm pushes [new financial advisors] to sell to clients." [Id. ] However, their primary duty is to sell financial products. [Id. ] In fact, Plaintiffs allege that Defendants instructed them to "sell these financial products without regard to the clients' individual needs, financial circumstances, or investment objectives." [Id. ¶ 85.] Nor were Plaintiffs placed in job positions "whose primary duty was to perform work directly related to the management or general business operations of Edward Jones or clients * * *." [Id. ¶ 86.]
Plaintiffs worked for Defendants at various offices around the country and at various periods between January 2014 and June 2016. [Id. ¶¶ 10-13.] They each signed the Financial Advisor Employment Agreement containing the TCR Provision.6 [Id. ¶¶ 35, 43, 52, 61.] Each worked well over 40 hours per week, studying for the industry licensing exams, completing the training program requirements, travelling to St. Louis or Tempe for training, completing whatever tasks were assigned to them in the office, working to develop a network of potential clients, and selling financial products to clients, among other things. [Id. ¶¶ 37, 45, 54, 63.] Specifically, each alleges that he or she worked (1) more than 45 hours during the "self-study" stage, (2) more than 60 hours during the *971"door knock" stage, and (3) more than 40 hours a week after achieving "can sell" status. [Id. ¶¶ 38, 46, 55, 64.] Plaintiffs allege that they were never compensated for all the hours that they worked and did not receive the meaningful training and/or "lucrative career" that they were promised. [Id. ¶¶ 39-40, 47-48, 56-57, 65-66.] Instead, Plaintiffs allege that they were each constructively discharged or otherwise forced to leave, and that Defendants later demanded that they pay either all or some portion of the $ 75,000 required under the TCR Provision that exceeds the amount they were paid during their entire employment with Defendants. [Id. ¶¶ 40-41, 49-50, 58-58, 67-68.]7
In response to this conduct, Plaintiffs filed this purported collective and class action suit alleging multiple violations of the FLSA and various Illinois and Missouri statutes on March 13, 2018. See generally [1]. On June 12, 2018, Plaintiffs filed an amended complaint further detailing those claims. See generally [35]. On July 10, 2018, Defendants filed the instant motion to dismiss. [38.] The court now resolves the motion.
II. Standard
To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the complaint first must comply with Rule 8(a) by providing "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), such that the defendant is given "fair notice of what the * * * claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ) (alteration in original). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the "speculative level." E.E.O.C. v. Concentra Health Servs., Inc. , 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). "A pleading that offers 'labels and conclusions' or a 'formulaic recitation of the elements of a cause of action will not do.' " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). Dismissal for failure to state a claim under Rule 12(b)(6) is proper "when the allegations in a complaint, however true, could not raise a claim of entitlement to relief." Twombly , 550 U.S. at 558, 127 S.Ct. 1955. In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court accepts as true all of Plaintiffs' well-pleaded factual allegations and draws all reasonable inferences in Plaintiffs' favor. Killingsworth v. HSBC Bank Nevada, N.A. , 507 F.3d 614, 618 (7th Cir. 2007). Evaluating whether a "claim is sufficiently plausible to survive a motion to dismiss is 'a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.' " Id. (quoting McCauley v. City of Chicago , 671 F.3d 611, 616 (7th Cir. 2011) ).
III. Analysis
Plaintiffs allege five separate violations of the FLSA (Count I), a violation of the Illinois Wage Payment and Collection Act, 820 ILCS 115/1 et seq. (Count II), a violation of the Illinois Minimum Wage Law, 820 ILCS 105/1 et seq. (Count III), and a violation of the Missouri Minimum Wage Law, V.A.M.S. 290.500 et seq. (Count VI). In addition, Plaintiffs seek the rescission of the TCR Provision (Count IV) and the disgorgement of funds under a theory of unjust enrichment (Count V).
*972A. FLSA Claims
Plaintiffs allege five violations of the FLSA: (1) that the TCR Provision violated the FLSA's requirement to pay wages "free and clear;" (2) that enforcement of the TCR Provision would result in Plaintiffs' compensation falling below the minimum wage; (3) that Defendants failed to adequately pay the minimum wage or overtime while they were in non-exempt positions;8 (4) that Defendants misclassified Plaintiffs once they achieved can sell status and therefore failed to pay them overtime; and (5) Defendants failed to keep accurate records. Defendants assert that Plaintiffs have not presented a plausible claim under any of the five theories.
1. The TCR Provision
The FLSA requires a subject employer to pay its employees a minimum hourly wage, and to compensate its employees at one and one-half time the regular rate for a workweek longer than forty hours. See 29 U.S.C. §§ 206, 207. Pursuant to the FLSA, the Department of Labor has issued regulations requiring that minimum wages be paid "free and clear," i.e. :
Whether in cash or in facilities, "wages" cannot be considered to have been paid by the employer and received by the employee unless they are paid finally and unconditionally or "free and clear." The wage requirements of the [FLSA] will not be met where the employee "kicks-back" directly or indirectly to the employer or another person for the employer's benefit the whole or part of the wage delivered to the employee.
29 C.F.R. § 531.35. Claims under § 531.35 are only cognizable if the effect of the condition complained of would reduce the employee's wages below the statutory minimum. See, e.g., Franks v. MKM Oil, Inc. , 2010 WL 3613983, at *4 (N.D. Ill. Sept. 8, 2010) (concluding plaintiff failed to state a claim because she had not pled any facts that the condition she complained of resulted in her earning less than the minimum wage); see also Brown v. Lululemon Athletica, Inc. , 2011 WL 741254, at *4 (N.D. Ill. Feb. 24, 2011) (collecting cases holding plaintiffs must allege that their pay fell below minimum wage). Given these rulings, the Court addresses Plaintiffs claims that the TCR Provision places an illegal condition on their pay, [35, ¶¶ 77-78], and that enforcement of the provision would reduce their earnings to below the minimum wage, [id. ¶¶ 77-78, 81], together. Defendants move to dismiss both claims on the grounds that Plaintiffs do not have standing to challenge the TCR Provision because they were paid the minimum wage during the entirety of their employment and have not paid any amount since their termination, and that in any event the TCR Provision does not violate the FLSA because it amounts to a loan to cover the training that they received.
a. Plaintiffs lack standing to assert claims under the TCR Provision, and in any event, fail to state a claim
Because it is a threshold issue, the Court must address Defendants' standing argument first.9
*973Article III of the Constitution confines federal courts to adjudicating actual cases or controversies. U.S. Const. art. III, § 2. Under Article III, a plaintiff must allege: (1) an injury in-fact; (2) fairly traceable to the defendant's action; that is (3) capable of being redressed by a favorable decision from the court. Parvati Corp. v. City of Oak Forest, Ill. , 630 F.3d 512, 514 (7th Cir. 2010) (citing Lujan v. Defenders of Wildlife , 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). The asserted injury must be both (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical. Lujan , 504 U.S. at 560, 112 S.Ct. 2130. Moreover, a plaintiff must demonstrate standing separately for each form of relief sought. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc. , 528 U.S. 167, 185, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000).
At first glance, Plaintiffs' standing appears tenuous. In all but one of the cases cited by the parties in which a court has reviewed a contract provision similar to the TCR Provision at issue here, the plaintiff had actually been deprived of a concrete dollar amount by the defendant. See Gordon v. City of Oakland , 627 F.3d 1092, 1094 (9th Cir. 2010) ("Gordon paid the City the $ 5,268.03 it claimed was due" for " 'training reimbursement' and 'collection costs.' "); Heder v. City of Two Rivers, Wisconsin , 295 F.3d 777, 778 (7th Cir. 2002) ("Two Rivers withheld all of Heder's pay from his last two pay periods."); City of Oakland v. Hassey , 163 Cal.App.4th 1477, 78 Cal.Rptr.3d 621, 629 (2008), as modified on denial of reh'g (July 15, 2008), as modified (July 17, 2008) (noting the city withheld a plaintiff's final paycheck and a check to cash out his retirement balance to cover money owed under a repayment agreement); Park v. FDM Grp. (Holdings) PLC , 2017 WL 946298, at *2 (S.D.N.Y. Mar. 9, 2017) ("Plaintiff resigned from her FDM Consultant position * * * and paid a Termination Fee of $ 20,000 * * *."). Only one case cited by either party or located by the Court involved a plaintiff without a concrete deprivation. See Ketner v. Branch Banking and Trust Company , 143 F.Supp.3d 370 (M.D.N.C. 2015).
In Ketner , the named plaintiffs alleged that a provision of their employment contracts nearly identical to the TCR Provision violated the FLSA's minimum wage requirement and sought a declaratory judgment invalidating it. 143 F.Supp.3d at 375-76 ; see also Ketner v. Branch Banking and Trust Company , No. 14-cv-967, Docket Entry 1, ¶¶ 69-72 (M.D.N.C. Nov. 19, 2014). In response, the defendant argued that at least one of the plaintiffs lacked standing because he had not paid any portion of his "loan obligation." Id. at 382. The court rejected that argument, noting that (1) the plaintiff disputed the validity of the contract, (2) the defendant's law firm had sent plaintiff letters demanding payment and threatening legal action if payment was not forthcoming, and (3) the defendant had previously enforced the provision in question and actually recovered money. Id. at 383. The court concluded that these facts undermined any concerns that the plaintiff's injury was speculative or hypothetical and that based on the facts alleged, the plaintiff had " 'an objective and reasonable apprehension of future litigation' regarding his alleged payment obligations *974under the [Agreement]." Id. at 383 (citation omitted). The plaintiff therefore had standing.
Whether a plaintiff has "an objective and reasonable apprehension of future litigation" is one of the standards used by the Fourth Circuit to determine if a plaintiff has standing under the Declaratory Judgment Act ("DJA), 28 U.S.C. § 2201. See Energy Recovery, Inc. v. Hauge , 133 F.Supp.2d 814, 817 (E.D. Va. 2000). Thus, it appears that North Carolina district court relied on the Fourth Circuit's jurisprudence regarding declaratory judgments to determine whether the Ketner plaintiffs had standing. Given that the Supreme Court has held that "the 'actual controversy' requirement of the Declaratory Judgment Act is coextensive with the 'case or controversy' standard for determining whether the Court has jurisdiction under Article III," see Deutsche Leasing USA, Inc. v. Hamps Enterprises, LLC , 2015 WL 536010, at *3 (N.D. Ill. Feb. 6, 2015) (citing MedImmune, 549 U.S. at 126-27, 127 S.Ct. 764 ), the Court elects to do the same, especially in view of Plaintiffs' request for a declaration that "Defendants' conduct, policies, and practices are unlawful and constitute willful violations of the [FLSA] * * *." [35, at 27 ¶ d.] The question therefore is whether the allegations demonstrate that there is " 'a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.' " Bell v. Taylor , 827 F.3d 699, 711 (7th Cir. 2016) (quoting MedImmune, Inc. v. Genentech, Inc. , 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007) ).
Here, Plaintiffs have alleged that Defendants sent some form of communication stating that they owe or demanding that they pay $ 75,000 as provided for by the TCR Provision, [35, ¶¶ 41, 50, 59], the validity of which Plaintiffs clearly dispute. However, unlike in Ketner , Plaintiffs have not alleged any facts suggesting that Defendants have (1) taken any steps to bring litigation against them, (2) ever actually collected money from individuals pursuant to the TCR Provision, or (3) even expressly threatened to file suit.10 The absence of any such allegations places this case precariously close to the limits of this Court's jurisdiction. See Hyatt Int'l Corp. v. Coco , 302 F.3d 707, 712 (7th Cir. 2002) ("[A] declaratory judgment plaintiff must be able to show that the feared lawsuit from the other party is immediate and real, rather than merely speculative."). As the Seventh Circuit has explained, "the threat of suit, however immediate, is not by itself sufficient for the invocation of the federal power to issue a declaratory judgment." Id. Because Plaintiffs' allegations amount to little more than an avowal of their fear of litigation, the Court cannot conclude that they have alleged enough to invoke the Court's jurisdiction. There is-at least presently-no concrete harm, and the threat of that harm is too speculative on the facts as Plaintiffs have alleged. In fact, Defendants may never file suit against Plaintiffs for fear that the TCR Provision could be struck down under state law as unconscionable or on other grounds.
Plaintiffs invocation of the Supreme Court's decision in *975MedImmune, Inc. v. Genentech, Inc. , 549 U.S. 118, 127-28, 137, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007), does not alter the Court's conclusion. In MedImmune , the Court considered whether a licensee could sue for a declaratory judgment challenging the validity of the patent underlying its contract with the licensor, when the licensee continued to perform and benefit from that contract. 549 U.S. at 127-37, 127 S.Ct. 764. That case is readily distinguishable from this case. If Plaintiffs were still employed by Defendants and wished to leave, but did not do so on account of the TCR Provision, then MedImmune would support a lawsuit for a declaratory judgment.11 Here, Plaintiffs have already left Defendants' employ and now challenge the validity of the TCR Provision, purportedly in fear of imminent litigation against them to enforce the provision. Based on the facts currently before it, this suit appears to be "a tactical device whereby a party who would be a defendant in a coercive action may choose to a be plaintiff by winning the proverbial race to the courthouse." Hyatt , 302 F.3d at 712.
Turning to the substance of Plaintiffs' claims, Defendants maintain that Heder and Gordon should control the outcome in this case and require concluding in their favor. [62, at 2-6.] Plaintiffs argue that Heder actually supports their position, and that in any event this Court should follow the analysis laid out in Ketner , which questioned the applicability of Heder and viability of Gordon.
In Heder , the Eastern District of Wisconsin and then the Seventh Circuit evaluated the validity of an agreement between the City of Two Rivers and the city's firefighters under Wisconsin law. Heder v. City of Two Rivers , 149 F.Supp.2d 677 (E.D. Wis. 2001) ; Heder , 295 F.3d at 778, 780-83. As part of the agreement in Heder , Two Rivers agreed to pay for the city's firefighters' paramedic training but required any individual who left the department before three years of service to repay the city for (1) the training, (2) any overtime wages received due to that training, and (3) any premium wages the firefighter earned as a result of that training. 149 F.Supp.2d at 688. The district court, describing the contract term as a "liquidated damages" provision, held that the provision was unenforceable as to the wage repayment because it violated the FLSA, but noted that the portion " 'equal to the cost of tuition, books, and other training costs for the paramedic training' [was] not problematic * * *." Id. at 693-94. Nonetheless, the district court invalidated the entire provision under Wisconsin law because the agreement did not reduce the amount due over time. Id. at 693.
At the Seventh Circuit, the city conceded that Heder was entitled to keep "any compensation that the FLSA specified as a statutory floor below which no contract may go." Heder , 295 F.3d at 779. Thus, he was entitled to "at least the statutory minimum wage for his final two pay periods," the paychecks for which the city had previously withheld as payment for the training costs, and other liquidated damages. Id. at 778-79. However, the court also noted that the City was entitled to collect any residual amount as an ordinary creditor, i.e. the City could collect from any difference between the statutory minimum and the total of the paychecks. Id. After addressing the proper way to *976determine the amount to which the plaintiff was entitled, the court of appeals turned to the district court's conclusion regarding the viability of the training costs provision under Wisconsin law. The Seventh Circuit reversed the district court's conclusion that the training cost reimbursement provision amounted to a non-compete agreement, reasoning that the "cost of training equates to the loan, repayment of which is forgiven after three years." Id. at 782. The court therefore concluded that Heder could be required to pay for the "full costs of his books and tuition" under state law. Id. However, the court reiterated that to the extent to which the collection of those training costs reduced plaintiff's overtime pay in his final two paychecks to less than time and a half for all his overtime hours, the collection was invalid. Id.
Relying on Heder , the Ninth Circuit in Gordon concluded that the money that a police officer paid to the defendant city pursuant to a training reimbursement agreement did not constitute an illegal kickback under the FLSA. 627 F.3d at 1093, 1095-96. The court focused on Heder's comment that "[a]s long as the city paid departing firefighters at least the minimum wage, it could collect the training costs as an ordinary creditor." Id. at 1096 (citing 295 F.3d at 779 ). The Ninth Circuit relied on this principle to conclude that because the City of Oakland had paid Gordon at least the minimum wage for her final week of work, it was free to seek repayment of her "training debt" as an ordinary creditor. Id.
The few district courts that have examined both Heder and Gordon have split in regard to whether a tuition reimbursement provision such as the one at issue here is actionable as a matter of law. In Ketner , the court concluded that Heder was inapposite as it had not actually held such an agreement was acceptable under the FLSA and that Gordon 's reliance on Heder was therefore misplaced. 143 F.Supp.3d at 383. It further distinguished the two cases noting that the training at issue in Ketner was employer specific, while Heder and Gordon both involved training that provided portable skills. Id. at 383-84. The court also noted that the damage amount at issue (~$ 36,000) was significantly more than that at issue in Gordon ($ 8,000) and Heder ($ 1,500) before denying the defendant's motion to dismiss. Id. The court noted that "factual development" would "determine whether the costs of training for the LDP is a bona fide loan as asserted by [Defendant] or a kick-back of salary." Id. at 384.
By contrast, Park v. FDM Grp. (Holdings) PLC held that a "termination fee" which required a payment if an individual left within a certain amount of time after the completion of her training did not violate the FLSA. 2017 WL 946298, at *4 (S.D.N.Y. Mar. 9, 2017). Like the TCR Provision at issue here, the contract in Park characterized the termination fee as liquidated damages approximating the damages the defendant would suffer if the employee breached the agreement prior to the end of the contracted period. Id. Additionally, the maximum fee of $ 30,000 corresponded to the maximum value of the training provided and the agreement included the plaintiff's specific "acknowledgement that the Company incurred significant costs in training the employees and that the two-year term was contracted in consideration of such costs." Id. Nor was the fee "a deduction for tools used or costs incurred in the course of [p]laintiff's performance of her job as a consultant." Id. Finally, the court noted that "[s]uch liquidated damages provisions in employment agreements are not unusual, and even those that are explicitly tied to repayment of the costs of a training program *977have been upheld as akin to loan repayment provisions." Id. (citing Gordon , 627 F.3d at 1096, Heder , 295 F.3d at 783 ). Thus, the court dismissed plaintiff's claim. Id. On Plaintiff's motion for reconsideration, the Park court specifically rejected Plaintiff's arguments that the court should view Ketner as more persuasive than Gordon and denied her request for leave to file an amended complaint. Park v. FDM Grp., Inc. , 2018 WL 4100524, at *4 (S.D.N.Y. Aug. 28, 2018).
This Court elects to follow Park , Gordon , and especially Heder , which constitutes controlling authority in this Circuit. As in Park , Plaintiffs explicitly agreed that the reimbursable amount "bears a reasonable relationship to the computed damages Edward Jones would suffer from a breach by you and that Edward Jones will suffer demonstrable loss as result of your breach." [39-2, ¶ 21.] Although the Court is somewhat skeptical that the actual costs of training totaled $ 75,000-especially considering that the contract explicitly notes that the $ 75,000 includes "the cost of selection and hiring"-the Court cannot infer from the contract that Defendants seek reimbursement for the tools of the trade or costs incurred in the performance of Plaintiffs' jobs. [Id. ] Nor is this case like Heder , in which the city withheld paychecks from the plaintiff and where the liquidated damages provision expressly attempted to claw back the compensation paid to the plaintiff.
Rather, like the tuition reimbursement provision of Heder , instead of requiring employees to pay for all the necessary training out of their own pocket, Defendants made an investment in their employees, but required the employees to repay at least part of that investment if they left before the company felt it had recouped fair value for its investment-which the company determined to take place over time at the rate of a 1/8 reduction in Plaintiffs' obligation every quarter they remained employed after the first year. [39-2, ¶ 21.] Moreover, unlike the purported training in Ketner , the training here did result in Plaintiffs' receiving portable credentials-namely, Series 7 and 66 licenses. [35, ¶¶ 18, 38, 46, 55.]
At bottom, the contract and the parties' performance pursuant to it resulted in Plaintiffs' accrual of a debt that Defendants are entitled to collect. See Heder , 295 F.3d at 782. Plaintiffs have not cited, nor has this Court located, any case that suggests employers may not act to collect a debt incurred for an employee's benefit at the termination of their employment on the basis that such a collection is a kickback that would reduce Plaintiffs' wages below the statutory minimum. In fact, courts have held just to the contrary. See, e.g., Vazquez v. Tri-State Mgmt. Co. , 2002 WL 58718, at *5 (N.D. Ill. Jan. 14, 2002) (counterclaim against employee to recover on loan used to purchase a vehicle for the employee's use, at the employee's request, was not an impermissible set-off under § 531.35 ). Moreover, Defendants never reduced Plaintiffs wages below the minimum wage while they were employed, so all the case law stating an employer may not do so is inapposite. See, e.g., Calderon v. Witvoet , 999 F.2d 1101, 1107 (7th Cir. 1993) (noting employers "may not reduce the wage below the statutory minimum to collect a debt to the employer").
All the arguments that Plaintiffs raise against the TCR Provision-that $ 75,000 does not bear a rational resemblance to the costs Defendants actually incurred in their training, that Defendants used the threat of the TCR Provision to force Plaintiffs to work extra allegedly uncompensated time, etc. , see, e.g. [35, ¶¶ 24, 26]-are either potential defenses to the enforcement of the contract that Plaintiffs could *978raise if and when Defendants attempt to enforce the provision or possible reasons to invalidate the contract as a matter of state law. They are not reasons to find that the TRC Provision violates the FLSA. The TCR Provision does not violate the FLSA because it is not a kickback, but rather constitutes to a loan that Plaintiffs' accrued when they achieved "can sell" status. Consequently, any payment under the TCR Provision is not a kickback that would reduce the Plaintiffs' wages to below the statutory minimum wage.
Because Plaintiffs do not have standing to challenge the TCR Provision, and in any event fail to state a claim, the Court grants Defendants' motion as to Plaintiffs' claims in Count I regarding the TCR Provision. However, because the Court concludes that Plaintiffs lack standing based on the complaint as pled, the dismissal is without prejudice and with leave to replead.
2. Failure to Pay Minimum Wage & Overtime Prior to Achieving "Can sell" status
Plaintiffs also assert that they and all those similarly situated worked well in excess of 45-60 hours per week in the non-exempt positions and were not paid the minimum wage or overtime for those hours.12 [35, ¶¶ 79-80.] Defendants respond that Plaintiffs allegations are too impermissibly vague and conclusory to state a claim.
a. Plaintiffs fail to state a minimum wage claim
"Courts generally construe FLSA * * * wage claims to apply to the work-week unit." Hughes v. Scarlett's G.P., Inc. , 2016 WL 4179153, at *2 (N.D. Ill. Aug. 8, 2016). Therefore, to determine whether an employer has violated the minimum wage provision of the FLSA:
[C]ourts uniformly calculate the hourly wage over the course of a workweek-i.e. , dividing the total compensation an employee received in a workweek by the compensable hours worked. Although the Seventh Circuit has not expressly addressed this issue, every circuit court that has considered the issue has utilized the workweek averaging approach to determine whether a FLSA violation occurred.
Hirst v. Skywest, Inc. , 2016 WL 2986978, at *5 (N.D. Ill. May 24, 2016) (collecting cases and regulations). "To state a FLSA claim under the workweek averaging approach, then, the plaintiffs must plausibly allege at least one workweek for which the compensation they received, divided by their total compensable time, failed to meet the FLSA minimum [hourly] wage." Hughes , 2016 WL 4179153, at *2 (quoting Hirst , 2016 WL 2986978 at *6 ). In both Hirst and Hughes , the plaintiffs failed to meet this standard because they did not include in their complaint any allegations concerning their "hourly wages or any examples of the total compensation they received for any workweek" or concerning "the number of hours worked in any given week." Hughes , 2016 WL 4179153, at *2-3 (citing Hirst , 2016 WL 2986978, at *6 ).
As in Hirst and Hughes , Plaintiffs have not provided a single allegation regarding what the Plaintiffs' effective hourly wages were during the relevant period, nor have they introduced any examples of the total compensation they received *979during any given workweek. Instead, they simply allege that they worked more than the hours that the training schedule called for, and that Defendants failed "to pay non-exempt FA Trainees wages and overtime for work they perforem[ed]." [35, ¶ 22.] The mere allegation that an individual did not receive compensation for all the hours that they worked is insufficient to state a FLSA violation. See Hirst , 2016 WL2986978 at *6. If Plaintiffs truly contend that Defendants failed to pay them the minimum wage, they need to allege facts to support a plausible claim that their effective hourly wages fell below the statutory minimum wage for at least one period. See, e.g., Labriola v. Clinton Entm't Mgmt., LLC , 2016 WL 1106862, at *4 (N.D. Ill. Mar. 22, 2016) ("The complaint must allege, at a minimum, the hours worked for which plaintiff seeks unpaid minimum wages, and what wages, if any, were paid. The complaint passes this threshold for both Plaintiffs by including specific factual details, such as the approximate dates Plaintiffs worked at Pink Monkey and the number of hours they worked each week for which they received no wages.").
b. Plaintiffs fail to state an overtime claim
Similarly, to state a claim under the FLSA for failure to pay overtime, courts in this district generally require a plaintiff to plead some details beyond a bare allegation that he or she worked more than 40 hours without premium pay. See Trujillo v. Mediterranean Kitchens, Inc. , 2017 WL 2958240, at *1 (N.D. Ill. July 11, 2017) ; Hughes , 2016 WL 4179153, at *2 (collecting cases). The question is just how many more details are needed to make a claim plausible. While a plaintiff need not "plead infinitesimal details to render [FLSA] claims plausible or provide defendants fair notice of the claims against them," Brown v. Club Assist Rd. Serv. U.S., Inc. , 2013 WL 5304100, at *6 (N.D. Ill. Sept. 19, 2013), he or she must still "provid[e] some specific facts to ground those legal claims." Brooks v. Ross , 578 F.3d 574, 581 (7th Cir. 2009).
Thus, this Court, other courts in this district, and several courts of appeals have instructed that to state a claim for failure to pay overtime, " 'a plaintiff must sufficiently allege forty hours of work in a given workweek as well as some uncompensated time in excess of forty hours.' " Parks v. Speedy Title & Appraisal Review Servs. , 318 F.Supp.3d 1053, 1069 (N.D. Ill. 2018) (quoting Silver v. Townstone Fin., Inc. , 2015 WL 1259507, at *2 (N.D. Ill. Mar. 17, 2015) ); see also Trujillo , 2017 WL 2958240, at *1 ; Hughes , 2016 WL 4179153, at *3 ; DeJesus v. HF Management Services , 726 F.3d 85, 89 (2d Cir. 2013) (allegations that plaintiff worked over forty hours in "some or all weeks" insufficient because at least one given week must be alleged); Pruell v. Caritas Christi, 678 F.3d 10, 12 (1st Cir. 2012) (allegation that plaintiffs "regularly worked" more than 40 hours a week insufficient).
Plaintiffs allegations do put Defendants on notice of the time periods during which Defendants failed to properly compensate them. Although Plaintiffs do not state the exact time periods at issue, it would be easy to determine the exact eight weeks that each of the Plaintiffs spent in the "study stage" and the nine weeks each participated in the "door-knocking" stage of their training with Defendants. However, Plaintiffs specifically allege that "Edward Jones neither tracks nor compensates FA Trainees13 for the hours they *980actually work." [35, ¶ 20.] Rather, Defendants apparently provide a study schedule which assumes that trainees will work 45 hours a week during the "self-study period" and 60 hours a week during the "door knock" stage. [35, ¶ 21.] Defendants then allegedly "manipulate[ ] the 'hourly rate' for each stage [-by substantially reducing the hourly rate from one stage to the next-] so the FA Trainee's gross pay does not vary from one stage of the Study Calendar to the next, despite the assumed increase in overtime during the "door knock" stage." [Id. ¶ 21.] Notably, Plaintiffs do not explain or assert why this "manipulation" violates the FLSA. Instead, they allege that "[under] its policy and practice, Edward Jones knowingly discourages non-exempt FA Trainees from accurately reporting all of the hours they work and fails to pay non-exempt FA Trainees wages and overtime for the work they perform." [Id. ¶ 22.] They further allege that "FA trainees often put in long days of study, including weekends, that easily exceed 45 hours per week." [Id. ¶ 18.] Plaintiffs thus allege that they worked more than the 45 and 60 hours, respectively, that the study schedule called for and as a result were not adequately compensated. See [id. ¶¶ 38, 46, 55, 64].
While this approaches the detail required to place Defendants on notice of a plausible claim, it is not quite sufficient to state a claim. Compare Brown , 2013 WL 5304100, at *6 (plaintiffs adequately pled an overtime claim where they asserted that "since July 2009, they have worked an average of 85 hours per week but have not been properly compensated for that time."), and Hancox v. Ulta Salon, Cosmetics & Fragrance, Inc. , 2018 WL 3496086, at *3 (N.D. Ill. July 20, 2018) (finding that plaintiff adequately stated a claim for overtime pay where she alleged that for a two-year period "she worked more than 40 hours in a workweek during 30 to 35 pay periods" and "was never paid proper overtime wages"), with Parks , 318 F.Supp.3d 1053, at 1069 ("Here, Plaintiff generally alleges that she worked overtime without sufficient pay. * * * She also states her dates of employment and her approximate salary during that timeframe. * * * However, Plaintiff does not allege how many hours she worked in a week (and whether or not this was over forty hours) or how many overtime hours she worked without being paid the proper salary. Without such allegations, Defendants are not on notice of the factual basis for her FLSA claim.") (internal citations omitted), and Hughes v. Scarlett's G.P., Inc. , 2016 WL 454348, at *5 (holding insufficient plaintiffs' claim that " '[a]t such times as Plaintiffs worked more than forty hours in a week, they were not paid time and a half.' "), and Pruell , 678 F.3d at 13 (allegation that "[t]hroughout their employment with defendants, Plaintiffs regularly worked hours over 40 in a week and were not compensated for such time, including the applicable premium pay" was insufficient to state a claim), and DeJesus , 726 F.3d at 89 (allegation that "in 'some or all weeks' [plaintiff] worked more than "forty hours" a week without being paid '1.5' times her rate of compensation" insufficient to state a claim). Plaintiffs allegations are hard to distinguish from those dismissed in Parks , Hughes , Pruell , or DeJesus .
Brown or Hancox do not support a different conclusion. In Brown , the contracts at issue called for individuals to be on call for "17.5 hour shifts, seven days a week,"
*981and each of the individuals asserted that they "typically work or worked at least 85 hours a week" and that they were never paid any overtime. 2013 WL 5304100, at 3. Likewise, in Hancox , Judge Tharp noted that the plaintiff's allegations were nearly insufficient given her generalized allegations. 2018 WL 3496086, at *3. To support her claim plaintiff had just alleged that "she worked more than 40 hours in a workweek during 30 to 35 pay periods;" nonetheless, her claim survived because she also alleged: (1) she was paid time and half her minimum guaranteed rate, rather than time and a half her regular rate as required by the FLSA; (2) the defendant withheld her commission wages when she worked more that 40 hours; and (3) she alleged the specific practices that caused her to work during unpaid meal breaks. Id.
By contrast, Plaintiffs simply allege that "[u]nder its policy and practice, Edward Jones knowingly discourages non-exempt FA Trainees from accurately reporting all of the hours they work" [35, ¶ 22], and that Plaintiffs accordingly did so [id. ¶¶ 38, 46, 55, 64]. However, Plaintiffs do not allege any facts detailing what, if any, specific pressure or policies led Plaintiffs to underreport their time,14 nor do they provide even one example of a week in which they worked more than 45 hours and/or were not paid sufficient overtime. Defendants' compensation scheme may be condemnable, or manipulative, but based on the facts before it, the Court cannot conclude that Plaintiffs have plausibly alleged a violation of the FLSA's overtime requirements. Plaintiffs need to provide more details about what they were or were not paid, and at least one example of a pay period in which their pay was insufficient given the number of hours they worked.
3. Misclassification of "Can sell" Status
Plaintiffs also allege that they are entitled to overtime after they achieved "can sell" status and began working as financial advisors because Defendants' misclassified them as non-exempt. Defendants argue that Plaintiffs were not misclassified, and that in any event, Plaintiffs have not adequately alleged that they worked overtime during the relevant period.
As explained above, the FLSA generally requires employers to pay employees overtime for any hours worked over forty hours in a given week. 29 U.S.C. § 207(a). That requirement does not apply, however to employees working in "a bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1). Here, the parties dispute whether Plaintiffs and those similarly situated qualify for the "administrative exemption." The administrative exemption exempts employees
(1) [who are] [c]ompensated on a salary or fee basis at a rate not less than $ 455 per week * * * exclusive of board, lodging or other facilities;
(2) [w]hose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and
(3) [w]hose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
29 C.F.R. § 541.200(a)(1)-(3). Plaintiffs allege that Defendants misclassified them as *982exempt because the position they received once they achieved "can sell" status failed to meet either the "salary basis test" or "the job duties test" and that they are therefore owed overtime wages.
Generally, affirmative defenses-such as an employee's classification as exempt in the FLSA context-do not justify dismissal under Rule 12(b)(b). See Doe v. GTE Corp., 347 F.3d 655, 657 (7th Cir. 2003). However, this rule does not apply when a party has included in its complaint "facts that establish an impenetrable defense to its claims." Tamayo v. Blagojevich, 526 F.3d 1074, 1086 (7th Cir. 2008). "If the plaintiff voluntarily provides unnecessary facts in her complaint, the defendant may use those facts to demonstrate that she is not entitled to relief." Id. ; see also Hecker v. Deere & Co., 556 F.3d 575, 588 (7th Cir. 2009) (affirming dismissal of claims because complaint "so thoroughly anticipated" an affirmative defense that dismissal was appropriate). In this case, Plaintiffs have put Defendants' exemption defense "in play" by necessity. Hecker, 556 F.3d at 588. In addition to their claims for overtime during their non-exempt employment addressed above, Plaintiffs assert Defendants should have continued to pay them overtime once they achieved "can sell" status because they were misclassified as "exempt" under both the "salary basis" and "job duties" tests.
a. Plaintiffs' fail to allege that they worked overtime
Before examining either of those claims, however, the Court must determine whether Plaintiffs' have adequately alleged that they worked overtime once they were classified as exempt given that for the affirmative defense to apply there must have been an underlying offense. See, e.g., Ottaviano v. Home Depot, Inc., USA , 701 F.Supp.2d 1005, 1007-08 (N.D. Ill. 2010) (proceeding to determine whether the plaintiffs were properly classified as exempt after noting the plaintiffs' allegation that defendant "terminates ASMs who regularly work less than the fifty-five hours for which they are scheduled").
Under the standard elaborated above in Section III(A)(2), Plaintiffs have not alleged an overtime claim for the time that they worked after attaining "can sell" status. Plaintiffs simply allege (1) that they "routinely worked in excess of 40 hours per week after their 'can-sell' date, without receiving proper overtime pay" and (2) that each Plaintiff "[a]fter achieving 'can-sell' status, * * * continued to work long hours, well in excess of 40 hours per week * * *." [35, ¶¶ 24, 38, 46, 55, 64.] As the Court previously explained, without more, such formulaic and conclusory allegations are simply not enough to state a claim for overtime. Moreover, even if Plaintiffs had properly alleged an overtime violation after Plaintiffs achieved "can sell" status, they have not yet alleged facts to show that they were misclassified as exempt.
b. Plaintiffs' allegations do not show they fail the salary basis test
Plaintiffs allege that they were not paid a guaranteed, predetermined salary within the meaning of the regulations above because (1) Defendants "paid Plaintiffs and those similarly situated wages on the condition that Plaintiffs and those similarly situated pay 'training costs' up to $ 75,000 under certain circumstances" and (2) Plaintiffs' "wages were subject to reduction because of alleged variations in the quality or quantity of work performed." [35, ¶¶ 84-85.]
First, as explained above, the TCR Provision has no effect vis-à-vis the FLSA's wage and hours requirements. It is not a kickback of Plaintiffs' salaries, but a contractual debt owed by Plaintiffs. Thus, *983Plaintiffs cannot show that they fail the salary basis test by claiming their employment was subject to the TCR Provision.
Plaintiffs' citation to Ketner and the Department of Labor Opinion Letters that it addressed are unavailing. First, the Court has already explained why it disagrees with Ketner 's conclusion that the TCR Provision constitutes a kickback with implications under the FLSA. See Section III(A)(1) supra. Additionally, the Department of Labor Opinion Letters on which Ketner relied and that the additional letters cited by Plaintiffs also are unpersuasive. Each of the letters involved either a purposed deduction from an employee's paycheck to recover a previous payment that the DOL concluded did not constitute a loan or other inapposite situation. See U.S. Dep't of Labor, Wage & Hour Div., Opinion Letter (Nov. 27, 2006), 2006 WL 3832994, at *7 n.5 ("What matters is that the employee receives no less than the weekly-required amount as a guaranteed salary constituting all or part of total compensation, which amount is not subject to reduction due to the quality or quantity of the work performed, and that the employee is never required to repay any portion of that salary even if the employee fails to earn sufficient commissions or fees"); U.S. Dep't of Labor, Wage & Hour Div., Opinion Letter (Mar. 10, 2006), 2006 WL 940663, at *1-2 ("deductions from the salaries of otherwise exempt employees for the loss, damage, or destruction of the employer's funds or property due to the employees' failure to properly carry out their managerial duties * * * would defeat the exemption * * *"); U.S. Dep't of Labor, Wage & Hour Div., Opinion Letter (Feb. 20, 2001), 2001 WL 1558760, at *1-2 (concluding that the two programs at issue were both incentive programs, and not bona fide loans or cash advances, which precluded the company from deducting amounts related to those programs from the pharmacists' last paychecks).
As explained above, nothing in Ketner or the DOL letters examined above convinces the Court that it should treat the TCR Provision as a kickback of the Plaintiffs' salaries designed to punish them if they failed to perform to a certain level. Rather, it is an education loan which only requires repayment if an individual attempts to use that education for the benefit of a competitor. As explained above, an employer may enforce such a provision without falling afoul of the FLSA. Plaintiffs therefore cannot ground their salary basis challenge on the TCR Provision.
Plaintiffs' second allegation likewise fails to plausibly allege that their compensation did not meet the salary basis test. While Plaintiffs reference a compensation plan in their complaint and allege that their compensation was contingent on performance and decreased within a few months of achieving "can sell" status during the transition to commission pay [35, ¶¶ 20, 23], that compensation plan-which Defendants attached to their motion-provides that Plaintiffs' compensation shall never fall below $ 455 a week. [39-3, at 3 (explaining that Plaintiffs are guaranteed at least $ 23,660 annually, or $ 455 a week).] The Court may properly consider such an exhibit attached to a motion to dismiss, Adams v. City of Indianapolis , 742 F.3d 720, 729 (7th Cir. 2014), and where those exhibits contradict the complaint allegations, "the exhibits trump the allegations." Abcarian v. McDonald , 617 F.3d 931, 933 (7th Cir. 2010). Consequently, the Court cannot conclude that the compensation plan set in place for Plaintiffs failed to meet the salary basis test.15
*984c. Plaintiffs' allegations do not show they fail the job duties test
Plaintiffs allege that they do not meet the job duties test because their primary duties "did not include the exercise of discretion and independent judgment with respect to matters of significance." [35, ¶ 85.] Rather, they were encouraged "to sell [ ] financial products without regard to the clients' individual needs, financial circumstances, or investment objectives." [Id. ] Specifically, they were instructed to sell financial products, mostly Defendants' proprietary products and those pre-picked and designated as "preferred product partners," which generated additional fees for Defendants. See [id. ¶¶ 2-3]. Nor did Defendants place "Plaintiffs * * * in job positions whose primary duty was to perform work directly related to the management or general business operations of Edward Jones or its clients * * *." [Id. ¶ 86.] Plaintiffs assert that these allegations are enough to show that they did not perform such duties that would qualify them to be classified as exempt.
First, as the cases cited by Defendants show, determining whether an individual's actual job duties meet the requirements of the administrative exemption is a factually intense process. See, e.g., In re Morgan Stanley Smith Barney LLC Wage & Hour Litig. , 2017 WL 772904, at *7-8 (D.N.J. Feb. 28, 2017) (examining the exact details of the plaintiffs' responsibilities on a motion for summary judgment); Tsyn v. Wells Fargo Advisors, LLC , 2016 WL 612926, at *4-17 (N.D. Cal. Feb. 16, 2016) (same); Hein v. PNC Fin. Services Grp., Inc. , 511 F.Supp.2d 563, 566, 570-75 (E.D. Pa. 2007) (same). Likewise, the exemption status of an employee is an affirmative defense that employers bear the burden of proving. A.H. Phillips, Inc. v. Walling , 324 U.S. 490, 493, 65 S.Ct. 807, 89 L.Ed. 1095 (1945) ; Jackson v. Go-Tane Servs., Inc. , 56 F. App'x 267, 270 (7th Cir. 2003). However, as explained above, Plaintiffs themselves have placed their classification at issue and alleged facts to support their claim that they were misclassified.
Both cases cited by Plaintiffs for the proposition that their allegations are sufficient to plausibly state a misclassification claim contained more factual allegations than are present here. In Lloyd v. J.P. Morgan Chase , the plaintiffs put forward a declaration that detailed their typical day to day duties. 2013 WL 4828588, at *1-2. The Lloyd plaintiffs even included allegations about the physical spaces in which worked, i.e. the defendant bank's physical branches. Id. at *1. Likewise, in Blum , the plaintiffs alleged that they were engaged primarily in "lead generation activities: identifying protentional clients, calling protentional clients, and conducting appointments with potential clients to encourage them to do business * * *." Blum v. Merrill Lynch & Co. , No. 15-cv-1636, ECF. No. 1, ¶ 67, 2015 WL 971734 (S.D.N.Y. March 5, 2015). They also alleged that they "regularly" attended "client prospecting functions" and "client prospecting events." Id. at ¶¶ 26, 29, 39, 75. Although the Court did not provide a written disposition of the motion to dismiss, at oral argument the Court explained that "the allegations that [Plaintiffs] * * * make are sufficient allegations to, at most, [sic] for the defense to raise a factual dispute that cannot be resolved on the motion" and denied the motion in a separate order. See Blum , ECF No. 86, 85:19-23; Blum , ECF No. 84.
Here, Plaintiffs have not provided details about the type of environment in which they worked, what they did on a day *985to day basis, or any other details that would allow the Court to plausibly infer that they were not exempt. To the extent that Plaintiffs argue that their allegations explaining that their role was simply to sell financial products, the Court finds persuasive both the DOL opinion letters and opinions holding sales activities by licensed financial advisors are exempt because such sales inherently involve their professional judgment given FINRA's requirements. See, e.g., Hein , 511 F.Supp.2d at 570 (noting the DOL "has sought to exempt from the FLSA investment advisors in the financial services industry-including those engaged in 'sales'-provided their sales activities are a function of their professional judgment respecting their clients' best interests"). Plaintiffs' allegations that they sold "financial products without regard to the clients' individual needs, financial circumstances, or investment objectives" do not change the Court's conclusion. The Court cannot infer that Plaintiffs are not exempt because they allegedly regularly violated their professional duties under FINRA,16 without Plaintiffs' explicit allegation acknowledging that selling products in the manner that they allegedly did, or were required to,17 violated FINRA regulations. Plaintiffs need to provide additional information to show that that they did not or could not exercise independent judgment or that their work was not directly related to the general business operations of the employer. But see, Hein , 511 F.Supp.2d at 571 ("The [DOL] explicitly lists finance as an example of work directly related to management or general business operations").
Because the Court concludes Plaintiffs have not adequately pled that they worked overtime once being deemed "exempt" or enough facts to plausibly establish that they were exempt, the Court grants Defendants motion as to Plaintiffs' misclassification claim in Count I, again without prejudice.
4. Recordkeeping
Finally, although Plaintiffs appear to concede in their briefing that there is no private right of action under the FLSA for violations of the that statute's recordkeeping requirements [59-1, at 27], it is well established that Plaintiffs cannot maintain a suit for recordkeeping violations under the FLSA. See Farmer v. DirectSat USA, LLC , 2010 WL 3927640, at *12 (N.D. Ill. Oct. 4, 2010) (collecting cases). The Court therefore grants Defendants' motion as to the recordkeeping claims within Count I with prejudice.18
5. Plaintiff Bowles
While the Court will allow Plaintiffs to file an amended complaint, it must dismiss Plaintiff Bowles with prejudice as to his overtime and misclassification claims in Count I. While the Court generally refrains from dismissing claims on the basis of an affirmative defense, such as the statute of limitations, Doe , 347 F.3d at 657, the allegations laid out above establish that Bowles employment terminated *986more than three years before the Plaintiffs filed their complaint in this case. See McLaughlin v. Richland Shoe Co. , 486 U.S. 128, 135, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988) (explaining that the absolute maximum for the statute of limitations for willful violations of the FLSA is three years). Bowles's argument that he did not know of his harm until he received the notice seeking payment under the TRC Provision, and that the statute of limitations should therefore be tolled is inapposite given that argument only applies to Plaintiffs' claims under the TCR Provision. Thus, the Court grants Defendants' motion to dismiss Bowles from Count I with prejudice as to any claims that do not pertain to the TCR Provision.
B. The State Claims - Counts II-VI
Having granted Defendants' motion to dismiss the one federal claim over which it has original jurisdiction, the Court addresses whether to retain jurisdiction over the remaining state law claims, Counts II-VI. 28 U.S.C. § 1367(c)(3). The Seventh Circuit has consistently stated that "it is the well-established law of this circuit that the usual practice is to dismiss without prejudice state supplemental claims whenever all federal claims have been dismissed prior to trial." Groce v. Eli Lilly & Co. , 193 F.3d 496, 501 (7th Cir. 1999) ; Alonzi v. Budget Constr. Co. , 55 F.3d 331, 334 (7th Cir. 1995) ; Brazinski v. Amoco Petroleum Additives Co. , 6 F.3d 1176, 1182 (7th Cir. 1993). Finding no justification for departing from that "usual practice"19 in this case, Plaintiff's state law claims are dismissed without prejudice. See In re Repository Techs., Inc. , 601 F.3d 710, 724-25 (7th Cir. 2010) ; Leister v. Dovetail, Inc. , 546 F.3d 875, 882 (7th Cir. 2008) ("When the federal claim in a case drops out before trial, the presumption is that the district judge will relinquish jurisdiction over any supplemental claim to the state courts.").20 However, Plaintiffs may continue to include their state law claims in any amended complaint that they may file.
IV. Conclusion
For the reasons explained above, the Court grants Defendants' motion to dismiss [38]. Plaintiff Bowles's claims in Count I are dismissed with prejudice, except as to any claims that relate to the TCR Provision, which are dismissed without prejudice. Plaintiffs' recordkeeping claim in Count I is also dismissed with prejudice. The remainder of Count I and Counts II-VI are dismissed without prejudice. Plaintiffs are given until April 15, 2019 to file an amended complaint consistent with this opinion. The case is set for further status on April 23, 2019, at 9:00 a.m.
For purposes of the motion to dismiss, the Court accepts as true all of Plaintiffs' well-pleaded factual allegations and draws all reasonable inferences in Plaintiffs' favor. Killingsworth v. HSBC Bank Nev., N.A. , 507 F.3d 614, 618 (7th Cir. 2007).
While Plaintiffs refer to all those who have had "can sell" status for less than three years as "FA Trainees," [35, at 2 n.1], the Court will refer to those individuals who have achieved "can sell" status, such as Plaintiffs, as financial advisors and will only use "trainees" to refer to individuals who have not yet achieved "can sell" status.
Plaintiffs do not challenge Defendants' inclusion of a copy of the Financial Advisor Employment Agreement [39-2] and the related compensation agreement [39-3] that each of the Plaintiffs' agreed to with their motion to dismiss. Even if they had, as the Seventh Circuit explained in 188 LLC v. Trinity Indus., Inc. :
It is also well-settled in this circuit that "documents attached to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to his claim. Such documents may be considered by a district court in ruling on the motion to dismiss." Wright v. Assoc. Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir. 1994). * * * While narrow, this exception is "aimed at cases interpreting, for example, a contract." [Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998).]
300 F.3d 730, 735 (7th Cir. 2002). Here, Plaintiff specifically referenced the documents in question. See [35, ¶ 15; ¶ 20 ("Edward Jones FA Trainees are paid on a bi-weekly basis pursuant to compensation plan, and each employee receives a schedule of expected compensation shortly after their hire") ]. The Court will therefore consider both documents in ruling on the instant motion.
While Plaintiffs allege that "Series 4 and 66 licenses are essential to the successful completion of the program, [35, ¶ 18], they fastidiously avoid alleging if or when Plaintiffs took them or when they passed. Despite that oversite, the Court infers that Plaintiffs must have taken them during the self-study period and passed given the TRC Provision of which they complain only applies if an individual leaves Defendants' employment, maintains their license, and takes a job that involves selling financial products within three years of receipt of their "can-sell" status. [39-2, ¶ 21.]
This "manipulation" involves lowering the "hourly rate" from $ 14.17 in the first stage, to $ 9.62 in the second stage. [39-3, at 2.]
Plaintiff Bowles claims to have worked for Defendants from January 2014 until June 2014. As explained below, this places him outside the statute of limitations for FLSA claims.
Additional facts are discussed below where relevant to the parties' arguments.
Plaintiffs response [59-1, at 20-22 (Section II(A) "Plaintiffs' Overtime Claims are Sufficiently Pled") ], only addresses whether Plaintiffs' have adequately alleged that they were entitled to overtime. It does not address whether Plaintiffs also stated a claim for a minimum wage violation. Consequently, the Court understands Plaintiffs as alleging only a failure to pay overtime during the non-exempt period, and not that plaintiffs also failed to receive the minimum wage. In any event, as explained below, Plaintiffs have not sufficiently alleged a minimum wage violation.
While Defendants do not describe it as such, the Court construes Defendants' standing arguments as a motion to dismiss the relevant claims under Rule 12(b)(1) and thus reviews those arguments under the Rule 12(b)(1) standard. In this case, Defendants have made a facial attack on standing because they assert Plaintiffs allegations are insufficient to establish injury-in-fact. See Murphy v. FT Travel Mgmt., LLC , 2014 WL 1924045, at *1 (N.D. Ill. May 14, 2014). Consequently, the Court need only look to the complaint and "see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction." Id. (citations and quotation marks omitted).
Although Plaintiffs allege "Edward Jones's harassing conduct compels FA Trainees either to hire counsel or pay extortionate sums or both," [35, ¶ 30], there is not one allegation that any individual has actually paid $ 75,000 or any amount close to that or engaged an attorney (outside of this lawsuit). The absence of any specific instances in which any Plaintiff has retained counsel undermines the force of the general allegation set out in paragraph 30.
However, Plaintiffs' assertion that they have alleged an injury because Defendants used the threat of the TCR Provision to force them to work long hours, [35, ¶ 3], does not give them standing to challenge the TCR Provision. If Plaintiff's worked overtime hours for which they did not receive compensation, then they have a claim for insufficient wages which the Court examines in Sections III(A)(2-3), not a suit to invalidate a provision that no longer applies to them given that they are no longer in Defendants' employ.
In view of Plaintiffs' allegations that they worked more than the amount of hours set out by the training schedule set by Defendants and thus were not paid sufficient wages or overtime [see, e.g., 35, ¶¶ 22], the Court infers that Plaintiffs contend that the number of hours they worked, divided by their wages for that week, resulted in a per-hour pay of less than the minimum wage. Consequently, the Court has evaluated Plaintiffs' claim under the "workweek averaging approach."
As mentioned earlier, see supra n.2, it is difficult to know who exactly Plaintiffs are referring to in this allegation, given they define FA Trainee as anyone within three years of their "can sell" date to whom the TCR Provision applies, including those who have achieved "can sell" status and are therefore classified as exempt.
The generalized allegation that Plaintiffs worked excessive hours out of fear that they would be fired and therefore subject to the TCR Provision, can only support Plaintiff's claims after they achieved "can sell" status and therefore exempt from overtime requirements, given the requirements of the TCR Provision do not attach until one achieves "can sell" status.
In fact, the DOL held an almost identical compensation system for similarly situated individuals valid under the FLSA in one of the DOL opinion letters cited by Plaintiff. See U.S. Dep't of Labor, Wage & Hour Div., Opinion Letter (Nov. 27, 2006), 2006 WL 940663.
See, e.g., FINRA Rule 2111(a) (requiring members or associated persons to "have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer's investment profile.").
And if Defendants truly did require Plaintiffs to sell products in such a manner, the Court hopes that Plaintiffs would report such blatant violations of FINRA's regulations to FINRA.
To the extent that the factual allegations undergirding the recordkeeping claim is relevant to other claims, the Court considered them in the resolution of the motion.
In Wright v. Associated Ins. Cos. , 29 F.3d 1244, 1251-53 (7th Cir. 1994), the Seventh Circuit noted that occasionally there are "unusual cases in which the balance of factors to be considered under the pendent jurisdiction doctrine-judicial economy, convenience, fairness, and comity-will point to a federal decision of the state-law claims on the merits." The first example that the Court discussed occurs "when the statute of limitations has run on the pendent claim, precluding the filing of a separate suit in state court." Id. at 1251. Because the Court is granting Plaintiffs leave to file an amended complaint, the Court defers any decision to exercise its pendent jurisdiction until the risk of foreclosing an action due to an elapsed statute of limitations has manifested.
Notwithstanding the dismissal without prejudice, Plaintiffs should seriously consider the possible effects of this Court's decision in Section III(A)(1) regarding the TCR Provision on certain of their state claims.
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01-03-2023
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10-17-2022
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https://www.courtlistener.com/api/rest/v3/opinions/1313859/
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217 Va. 1 (1976)
VINCENT LEE MCKINLEY
v.
COMMONWEALTH OF VIRGINIA.
Record No. 750715.
Supreme Court of Virginia.
June 11, 1976.
Present, All the Justices.
1. Indictment, although not drawn in precise language of the statute, did charge defendant with having feloniously seized and abducted his victim by force and intimidation and without legal justification or excuse in violation of specific Code provision. Not error to refuse to quash indictment on ground that Commonwealth intended to establish abduction with intent to defile, a more serious charge than abduction with intent to deprive a person of his personal liberty.
2. When Commonwealth's Attorney introduced evidence to show that abduction was with intent to defile, record shows no objection on ground of a variance between indictment and proof. No assignment of error was made as to variance. Review limited to action of court in failing to quash indictment.
Error to a judgment of the Circuit Court of the City of Hampton. Hon. Nelson T. Overton, judge presiding.
Edwin J. Elmore, Jr., for plaintiff in error.
Jim L. Chin, Assistant Attorney General (Andrew P. Miller, Attorney General, on brief), for defendant in error.
Per Curiam. *2
The defendant, Vincent Lee McKinley, was indicted in the court below for abduction in violation of | 18.1-36 of the Code of Virginia of 1950, as amended. He was convicted by a jury of abduction "with intent to defile"; his punishment was fixed at confinement in the penitentiary for a period of fifteen years; and he was sentenced accordingly by the trial court. McKinley has appealed upon the ground that the court erred in failing to grant his motion to quash the indictment on which he was tried.
The indictment charged that the defendant, on March 21, 1974, "unlawfully and feloniously, by force and intimidation and without legal justification or excuse, did seize and abduct the person of [victim's name], in violation of Section 18.1-36 of the Code of Virginia of 1950, as amended".
The verdict of the jury was:
}"We the jury find the defendant McKinley guilty of abduction of [victim's name] as set forth in the indictment with intent to defile her and fix his punishment at fifteen years confinement in the penitentiary."
Code | 18.1-36, then in effect, provided, in pertinent part, as follows:
}"Any person, who, by force, intimidation or deception, and without legal justification or excuse, seizes, takes, transports, detains or secretes the person of another, with the intent to deprive such other person of his personal liberty or to withhold or conceal him from any person, authority or institution lawfully entitled to his charge, shall be deemed guilty of 'abduction'; . . .."
Code | 18.1-37 then provided that:
}"Abduction for which no punishment is otherwise prescribed shall be punished by confinement in the penitentiary for not less than one year nor more than twenty years, or, in the discretion of the jury or the court trying the case without a jury, by confinement in jail for not more than twelve months or a fine of not more than one thousand dollars, either or both; . . .."
The succeeding section, | 18.1-38, then provided that:
}"Abduction with the intent to extort money, or pecuniary benefit, abduction of any person with intent to defile such person, and abduction of any female under sixteen years of age for the purpose of *3 concubinage or prostitution shall be punished with death, or by confinement in the penitentiary for life or any term not less than three years. . . ."
The record shows that following the defendant's arraignment and the entry of his plea of not guilty, his counsel moved "to quash the indictment on the charge of abduction", upon the ground "that it does not sufficiently state a charge to inform the man what he's accused of, to enable him to prepare a proper defense". However, counsel for the defendant then represented to the court that he knew the Commonwealth was going to endeavor to introduce evidence to show that the abduction was with the intent to defile. He argued that it would be prejudicial to his client for any evidence to be introduced showing what occurred after the alleged abduction.
In brief, defendant's claim is that the indictment should have alleged that the abduction occurred with the intent to defile if the Commonwealth intended to introduce evidence as to such intent and to seek to have the defendant punished under then Code | 18.1-38. The position of the Commonwealth is that abduction was made a crime by Code | 18.1-36, and that the punishment for the crime was provided by Code || 18.1-37 and 18.1-38. The Commonwealth's Attorney argued that the offense was "defined quite aptly and well in | 18.1-36, that the applicable Code Sections for punishment are a matter of proof rather than allegation". The trial court agreed, holding that the crime of abduction was properly charged under the provisions of Code | 18.1-36 and that punishment could be fixed under either of the two code sections that followed, depending upon the evidence.
We agree that the refusal by the trial court to quash the indictment was correct. The indictment, although not drawn in the precise language of the statute, did charge the defendant with having feloniously seized and abducted his victim by force and intimidation and without legal justification or excuse in violation of | 18.1-36. This is sufficient to sustain a conviction of abduction "with the intent to deprive such other person of his personal liberty". However, the indictment does fail to charge abduction with intent to defile his victim. In 1974 the range of punishment for abduction with intent to deprive a person of his personal liberty varied from a fine to a maximum of twenty years confinement in the penitentiary. Abduction with intent to defile was punishable by death or by confinement in the penitentiary for life or any term of not less than three years. *4
The specific intent entertained by an accused is the distinguishing feature of the two offenses. A defendant could abduct with intent to deprive a victim of personal liberty, without having any intention of defiling that person. The statutes have recognized that abduction with intent to extort money, or pecuniary benefit, abduction of any person with intent to defile such person and abduction of a female under sixteen years of age for purposes of concubinage or prostitution, are more serious offenses than abduction with intent only to deprive one of personal liberty. Further, the defense to be interposed would necessarily vary with the specific offense a defendant was charged with committing.
In Kincaid Commonwealth, 200 Va. 341, 343, 105 S.E.2d 846, 848 (1958), we said:
}"We have many times held that where an offense is punishable with a higher penalty, because it is a second or subsequent offense of the same kind, the more severe punishment cannot be inflicted unless the indictment charges that it is a second or subsequent offense. Under rules of criminal pleading the indictment must contain an averment of facts essential to the punishment to be inflicted. Shiflett Commonwealth, 114 Va. 876, 879, 77 S.E. 606; Keeney Commonwealth, 147 Va. 678, 685, 137 S.E. 478; Commonwealth Ellett, 174 Va. 403, 413, 4 S.E.2d 762, 766. . . ."
Nevertheless, the indictment being facially sufficient to charge McKinley with the crime of abduction, the court properly overruled defendant's motion to quash. The Commonwealth's Attorney then introduced evidence to show that the abduction was with intent to defile and offered an instruction setting forth the punishment for that offense. We find no objection by the defendant on the ground of a variance between the allegations of the indictment and the evidence offered by the Commonwealth.
Defendant argued that the question had been raised in his motion to quash and that, in view of the ruling of the court on that motion, further objection by him would have been futile. However, the fact remains that defendant failed to object to the variance, and his only assignment of error was to the action of the court in failing to quash the indictment. No assignment was made as to variance, and we therefore cannot consider it upon appeal. Rules of Court, Rule 5:7.
Affirmed.
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175 Ga. App. 233 (1985)
333 S.E.2d 31
WELCH et al.
v.
SUGGS.
70457.
Court of Appeals of Georgia.
Decided June 24, 1985.
Lynn W. Wilson, for appellants.
Harvey J. Kennedy, Jr., for appellee.
BANKE, Chief Judge.
The appellants brought this action in superior court seeking custody of their son's illegitimate child based on the alleged unfitness of the child's mother. In the alternative, the appellants requested visitation rights pursuant to OCGA § 19-7-3. (The Grandparents' Visitation Act, Ga. L. 1976, p. 247, § 1; Ga. L. 1980, p. 936, § 1; Ga. L. 1981, p. 1318, § 1.) The trial court determined that the mother was fit and declined to transfer custody. The trial court also concluded that because the child had never been legitimated by the appellants' son, the appellants lacked standing to seek visitation rights. Only this aspect of the trial court's order is before us in this discretionary appeal. Held:
The trial court's determination not to hear the visitation question relies upon OCGA § 19-7-25, which provides that "[o]nly the mother of an illegitimate child is entitled to his custody, unless the father legitimates him as provided in Code Section § 19-7-22. Otherwise, the mother may exercise all parental power over the child." The appellees argue that, because of his failure to legitimate the child, the putative father has no parental rights upon which his parents can base their prayer for either custody or visitation. A similar argument was made in the Supreme Court in an adoption case brought by the grandparents of an illegitimate child. At issue was whether the father's parents were "relatives" such that the mother could voluntarily relinquish her rights in the child to them pursuant to former Code Ann. § 74-403 (a) (4) (OCGA § 19-8-3 (a) (5)). The court held that the father "has some parental rights . . . in regard to his illegitimate child . . . [and that] the parents of the biological father are `relatives.'" Nelson v. Taylor, 244 Ga. 657, 658 (261 SE2d 579) (1979).
Generally speaking, OCGA § 19-7-3 "allows a court having before it a custody question to grant visitation to the child's grandparents. The language of the statute and George v. Sizemore, 238 Ga. 525 (233 SE2d 779) (1977), and Rhodes v. Peacock, 142 Ga. App. 328 (235 SE2d 762) (1977), make clear that any such grant is purely discretionary and may be exercised only where the court is considering custody matters and finds that conditions are such that it is appropriate to allow this privilege to the grandparents. The grandparents have no right to visitation, but only a right to request the privilege of visitation." Sachs v. Walzer, 242 Ga. 742 (251 SE2d 302) (1978). We hold *234 that the appellants are grandparents within the meaning of the statute and that their claim for visitation rights was properly before the court and should have been heard.
Judgment reversed with direction. McMurray, P. J., and Benham, J., concur.
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15 Cal. 2d 573 (1940)
CITY OF OAKLAND (a Municipal Corporation), as Trustee, etc., Appellant,
v.
CALIFORNIA CONSTRUCTION COMPANY (a Corporation), Respondent.
S. F. Nos. 14699, 14700.
Supreme Court of California.
June 27, 1940.
F. Bert Fernhoff, City Attorney, C. Stanley Wood, City Attorney, and John W. Collier, Deputy City Attorney, for Appellant.
Humphrey, Searls, Doyle & MacMillan, Morgan J. Doyle, George N. Crocker and Frank V. Campbell for Respondent.
EDMONDS, J.
The question for decision concerns the right of the City of Oakland to recover the proceeds of a street improvement contract. In each of the two cases which have been consolidated upon appeal, a demurrer was sustained without leave to amend, and the appeals are from the judgments which followed those orders.
In 1928, the respondent, a paving contractor, was awarded two contracts for street work to be done under the provisions *575 of the Improvement Act of 1911. (Stats. 1911, p. 730.) One complaint is based upon the contract for Greenly Drive, the other upon that for Columbian Drive, but except for the particular terms of these contracts, the same facts are pleaded in each case. By separate counts, the city alleges that the contract sued upon is void because a member of the city council which awarded it was in the employ of the respondent, the respondent secured it upon false representations, and the work was obtained as the result of a conspiracy among certain paving companies, including the respondent, to control the street work of the City of Oakland by refraining from competitive bidding.
According to the allegations of the complaint, "for a long time prior and subsequent" to the confirmation of the street superintendent's assessment for the work, Eugene K. Sturgis, a commissioner of the City of Oakland, and as such a member of the city council, was in the employ of the respondent as an attorney. In that capacity he rendered legal services to the respondent with reference to this street proceeding, his compensation being a percentage of the total cost of the work to be performed under the contract. According to the city's allegations, because of his interest in the assessments levied and bonds issued pursuant thereto, the confirmation of such assessments is void.
In support of its second count, the appellant pleads that, for the purpose of securing the contract, the respondent made false and fraudulent representations to the effect that it would perform the work and furnish the materials according to the specifications, but that it had no intention of doing so. Continuing these charges, the city alleges that during the time the paving was being put in, one of its paving inspectors, who was assigned to inspect the work performed by the respondent, was carried upon the contractor's payroll. As a result of the "fraudulent and corrupt" acts of the respondent and this inspector, and in furtherance of its "fraudulent intention", it did not perform the work as it had agreed to do. More specifically, the city asserts, the contractor poured too much concrete each day for producing pavement with the proper finish, maintained a force of incompetent workmen and finishers, neglected to mix the concrete properly, used defective material in the gutters, and in various other respects did the work in an improper manner. *576
As the third cause of action, the appellant alleges that prior to the city's call for bids certain paving companies, of which the respondent was one, entered into a conspiracy to control the street work in the City of Oakland and inflate prices to be paid by property owners by refraining from competitive bidding. A number of overt acts in furtherance of the claimed conspiracy are pleaded in detail. By reason of this unlawful combination, the city complains, the respondent was the lowest bidder on the proposed improvement and was awarded the contract.
Later, the complaint in the case concerning Greenly Drive (S. F. No. 14699) continues, the superintendent of streets filed an assessment to meet the cost of the improvement, and following its levy the respondent sold and assigned the warrant, diagram and assessment, and the bonds issued thereunder for approximately $27,500, to which amount the city is entitled as trustee for the owners of the property within the assessment district. In the other case (S. F. No. 14700), the contractor is said to have received approximately $63,000, and judgment is asked in the same form for that amount.
The respondent's demurrer to each complaint specified, as its grounds, that it does not state facts sufficient to constitute a cause of action; that the court has no jurisdiction of it or the subject of the said action; that the city has not the legal capacity to sue; and that each of the causes of action is barred by the provisions of section 26 of the Improvement Act of 1911, as amended in 1923. (Stats. 1923, p. 117.) The respondent also specifically demurred to the first cause of action upon the ground of uncertainty.
[1] It has long been the law of California that public officers "must not be interested in any contract made by them in their official capacity, or by any body or board of which they are members". (Pol. Code, sec. 920; Berka v. Woodward, 125 Cal. 119 [57 P. 777, 73 Am. St. Rep. 31, 45 L.R.A. 420]; Stockton P. & S. Co. v. Wheeler, 68 Cal. App. 592 [229 P. 1020]; Moody v. Shuffleton, 203 Cal. 100 [262 P. 1095].) Contracts in violation of this rule are held void as against public policy, both upon the ground that the interest of the officer interferes with the unbiased discharge of his duty to the public (Nielsen v. Richards, 75 Cal. App. 680 [243 P. 697]; Stockton P. & S. Co. v. Wheeler, supra), and also that a contract in violation of an express statutory provision *577 is void. (Smith v. Bach, 183 Cal. 259 [191 P. 14]; Duntley v. Kagarise, 10 Cal. App. 2d 394 [52 PaCal.2d 560].)
[2] But the city does not allege that Mr. Sturgis was the respondent's attorney at the time the contracts were awarded to it. The most specific statement upon this point is that, at the time of the execution of the contract, he was both a member of the city council and an employee of the construction company. It is significant that the city does not charge him with voting to award the contract to the respondent. The facts pleaded do not show that Mr. Sturgis had an interest in the contract at the time it was awarded, and do not state a cause of action upon the ground of his disqualification. The demurrer to this cause of action was, therefore, properly sustained.
[3] Concerning the second cause of action, when one makes a contract upon representations in the nature of inducements to enter into it and there is no misunderstanding as to its nature, the contract is voidable but not void. (Wilson v. Southern Pacific Land Co., 46 Cal. App. 738 [189 P. 1040]; Burns v. Grosvenor Inglis Corp., 120 Cal. App. 688 [8 PaCal.2d 546]; Williston, "On Contracts", sec. 1488; Restatement of the Law of Contracts, sec. 475.) Under such circumstances, if the contract has been completely executed, as in the present case, the injured party's remedy is an action for damages.
The case of Hunter v. County of Santa Barbara, 110 Cal. App. 698 [294 P. 1082], relied upon by the appellant, arose when it was found that a contractor had increased his bid to an amount which included a sum estimated to be the difference between the par value and the market value of bonds to be taken in payment for the work. But before the contractor had done any work under the contract, the board of supervisors rescinded it and rejected the contractor's bid. That is a far different situation from the facts pleaded in the present case. There the contractor sought damages for breach of contract and it was held that he could not recover because the contract was void. Here the work has been completed and the city is suing to recover all of the consideration for the contract upon the ground that because it was not faithfully performed it is void. Upon this cause of action the demurrer was also properly sustained. *578
[4] The third cause of action presents a different question. Proceedings under the Improvement Act of 1911, supra, include an invitation for sealed proposals or bids upon the proposed work. The purpose of such bidding is to secure a price based upon competition. Any agreement which tends to deprive the government of competition in bidding is unlawful (Swan v. Chorpenning, 20 Cal. 182; McMullen v. Hoffman, 174 U.S. 639 [19 S. Ct. 839, 43 L.R.A. 1117]), and where it is shown that the bids made were collusive and a contract is awarded by public officers in ignorance of such a combination, the resulting contract is void as against public policy. (Morgan v. Gove, 206 Cal. 627 [275 P. 415, 62 A.L.R. 219]; Dillon on Municipal Corporations, 8th ed., vol. 2, sec. 781, p. 1165; McQuillan on Municipal Corporations, 2d ed., vol. 3, sec. 1326, p. 904.) The allegations of the city state a cause of action under these principles.
[5] Upon this point, the respondent contends that any rights the city may have had to sue upon the contracts are barred by the provisions of section 26 of the Improvement Act of 1911 as amended in 1923 (Stats. 1923, p. 117). This section provides that an action "to set aside, cancel, avoid, annul or correct any assessment or reassessment, or to review any of the proceedings, acts, or determinations therein, or to question the validity of, or to enjoin the collection of the said assessments or reassessments, or to enjoin the issuance of bonds to represent the same", must be brought within 30 days after the recording of the assessment.
However, the present action is not one within the terms of this provision. The city does not seek to set aside any assessment, or to review any "proceeding, acts or determinations" concerning the method of meeting the improvement's cost. It does not question the validity of any assessment, but as trustee for the property owners it seeks to reach money alleged to have been collected by the respondent upon a void contract. If successful in its action, no assessment would be changed and no bond would be affected, but the property owners in the assessment district would have the benefit of any money recovered by this city in their behalf.
[6] The point that the City of Oakland has not the legal capacity to sue is also not well taken. The facts of the complaint are substantially the same as those shown in the case of City of Oakland v. De Guarda, 95 Cal. App. 270 [272 Pac. *579 779, 273 P. 819], where it was held that under the provisions of the Improvement Act of 1911, supra, the city is a trustee for the property owners within the assessment district, and it may maintain an action without the necessity of joining the persons for whose benefit the action is prosecuted. (Sec. 369, Code Civ. Proc.)
The judgment is reversed with directions to the trial court to overrule the demurrer as to the third cause of action and allow the respondent to answer.
Shenk, J., Curtis, J., Gibson, C.J., and Carter, J., concurred.
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544 F.3d 1073 (2008)
Eduardo J. GUZMAN, M.D., Plaintiff-Appellant,
v.
Sandra SHEWRY, Director of the California State Department of Health Care Services, Defendant-Appellee.
No. 08-55326.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted June 4, 2008.
Filed September 23, 2008.
*1076 Patric Hooper, Hooper, Lundy & Bookman, Inc., Los Angeles, CA, argued the cause for the plaintiff-appellant and filed briefs.
Janet E. Burns, Deputy Attorney General, State of California, Los Angeles, CA, argued the cause for the defendant-appellee and filed a brief; Phillip J. Matsumoto, Deputy Attorney General, Richard T. Waldow, Supervising Attorney General, Douglas M. Press, Senior Assistant Attorney General, and Edmund G. Brown, Jr., Attorney General for the State of California, were on the brief.
Before: DAVID R. THOMPSON, DIARMUID F. O'SCANNLAIN, and RICHARD C. TALLMAN, Circuit Judges.
O'SCANNLAIN, Circuit Judge:
We must decide whether a district court abused its discretion in denying a physician *1077 a preliminary injunction to halt his temporary suspension from California's Medi-Cal program based on his claims that such suspension violates federal Medicaid law and is prohibited by the Due Process Clause of the Fourteenth Amendment.
I
A
Medicaid is a cooperative federal-state program that authorizes the United States Government to provide funds to participating states to administer medical assistance to individuals "whose income and resources are insufficient to meet the costs of necessary medical services." 42 U.S.C. § 1396. The program operates by authorizing the Federal Government to pay a percentage of the costs a state incurs for patient care, and, in return, the state complies with certain federal requirements. See 42 U.S.C. § 1396a. Administration of the program is entrusted to the Secretary of Health and Human Services ("HHS"), who also has the authority to promulgate regulations under the Medicaid Act. California participates in Medicaid through the California Medical Assistance Program ("Medi-Cal"), and has designated its Department of Health Care Services ("DHCS" or the "Department")[1] as the agency responsible for its administration. See id. § 1396a(a)(5); Cal. Welf. & Inst. Code §§ 10720, 14000.
B
Dr. Eduardo J. Guzman, M.D., is an obstetrician/gynecologist who provides services through Medi-Cal. Sometime in 2006, DHCS opened an investigation into certain claims Guzman had submitted to Medi-Cal for payment. On August 30, 2006, after several searches of his offices in Downey and Norwalk, California, DHCS filed an Accusation against Guzman alleging that he had imported large quantities of intrauterine devices ("IUDs") from Mexico that had not been approved by the Food and Drug Administration ("FDA") for use in this country; that he had inserted such devices into his patients, Medi-Cal beneficiaries; and that he had billed Medi-Cal for his services, fraudulently claiming that the devices used were FDA-approved. The Accusation notified Guzman that DHCS would seek permanently to suspend him from the Medi-Cal program as a result of these allegations. See Cal. Welf. & Inst.Code § 14123. Some time later, the California Attorney General's Office filed felony criminal charges against Guzman arising from the same alleged conduct.[2]
DHCS scheduled an administrative hearing on the Accusation for August 2007, but Guzman requested that it be post-poned until the criminal proceedings against him were concluded.[3] DHCS granted the request. Nevertheless, on January 22, 2008, DHCS sent Guzman a letter informing him that he would be suspended temporarily from participating in *1078 Medi-Cal because of the pending criminal proceedings against him. The letter stated that the suspension would take effect on February 6, 2008, and would continue until Medi-Cal determined that he was "no longer under investigation" or until "after legal proceedings related to the alleged fraud or abuses are completed." Once enforced, the suspension would prohibit Guzman from billing Medi-Cal for any services rendered.[4]
As the letter explained, California law entitled Guzman to appeal the temporary suspension. DHCS concedes, however, that such appeal is limited to the question of whether a provider is, in fact, under investigation for fraud or abuse. Thus, Guzman would not have been able to contest the underlying allegations against him in such an appeal. In addition, the letter explained that Guzman also had the right to "request a meeting with [DHCS] representatives" if he believed the information on which Medi-Cal was relying was erroneous. See Cal. Welf. & Inst.Code § 14123.05. It is not clear whether Guzman would have been able to challenge the validity of the underlying fraud allegations at such a meeting. In any event, Guzman decided not to avail himself of either procedure.
C
On February 5, 2008, Guzman filed a complaint against DHCS in the district court under 42 U.S.C. § 1983 seeking a preliminary injunction to halt the temporary suspension. Guzman asserted that a preliminary injunction was necessary because his suspension would irreparably harm his patients, his practice, and his reputation.[5] Although a California statute authorizes such suspension, Cal. Welf. & Inst.Code § 14043.36(a), Guzman argued that the statute was preempted by federal law, and that he was entitled to a presuspension hearing either by federal Medicaid statutes and regulations or, in the alternative, the Due Process Clause of the Fourteenth Amendment.
DHCS agreed to delay enforcement of the suspension for one month, allowing the district court sufficient time to rule on Guzman's expedited motion for a preliminary injunction. On March 4, 2008, the district court denied the motion, concluding that Guzman would not likely be able to show that California Welfare and Institutions Code section 14043.36(a) was preempted by federal law, or that he had a statutory or constitutional right to a presuspension hearing. Nevertheless, the district court granted a limited stay allowing Guzman to file an emergency motion in this court to enjoin the suspension pending appeal. On March 5, 2008, a motions panel of this court denied the motion, but expedited the briefing schedule and the date of oral argument. This timely appeal followed.
II
"Our review of the denial of a preliminary injunction is limited and deferential." *1079 Wildwest Inst. v. Bull, 472 F.3d 587, 589 (9th Cir.2006) (internal quotation marks omitted). "We ask only whether the district court has abused its discretion." Id. In such cases, the scope of our review is "generally limited to whether the district court [1] employed the proper preliminary injunction standard and [2] whether the court correctly apprehended the underlying legal issues in the case." Earth Island Inst. v. U.S. Forest Serv., 351 F.3d 1291, 1298 (9th Cir.2003). In other words, "[a]s long as the district court got the law right, it will not be reversed simply because the appellate court would have arrived at a different result if it had applied the law to the facts of the case." Wildwest Inst., 472 F.3d at 590.
A district court may grant a preliminary injunction under two sets of circumstances. In the first case, "`a plaintiff must show (1) a strong likelihood of success on the merits, (2) the possibility of irreparable injury to plaintiff if preliminary relief is not granted, (3) a balance of hardships favoring the plaintiff, and (4) advancement of the public interest (in certain cases).'" Natural Res. Def. Council, Inc. v. Winter, 518 F.3d 658, 677 (9th Cir.2008) (quoting Freecycle Network, Inc. v. Oey, 505 F.3d 898, 902 (9th Cir.2007)). In the second case, "a court may grant the injunction if the plaintiff demonstrates either a combination of probable success on the merits and the possibility of irreparable injury or that serious questions are raised and the balance of hardships tips sharply in his favor." Id. (emphasis added) (quoting Freecycle, 505 F.3d at 902).
The district court articulated this standard and, in applying it, held that Guzman had failed to show a likelihood of success on the merits. Thus, the court declined to consider the possibility that Guzman would suffer irreparable injury. Such action was a valid exercise of the court's discretion. As we have held previously, before a preliminary injunction is granted, at "`an irreducible minimum, the moving party must demonstrate a fair chance of success on the merits, or questions serious enough to require litigation.'" Dep't of Parks & Recreation v. Bazaar Del Mundo Inc., 448 F.3d 1118, 1124 (9th Cir. 2006) (quoting Arcamuzi v. Cont'l Air Lines, Inc., 819 F.2d 935, 937 (9th Cir. 1987)). Thus, we must decide whether the district court correctly apprehended the law underlying Guzman's claims in concluding that he was unlikely to prevail. We now consider each of those claims in turn.
III
A
We begin with Guzman's claim that California Welfare and Institutions Code section 14043.36(a) is preempted by federal law. "Under the Supremacy Clause, U.S. Const., art. VI, cl. 2, state laws that interfere with, or are contrary to the laws of congress, made in pursuance of the constitution are invalid." Wis. Pub. Intervenor v. Mortier, 501 U.S. 597, 604, 111 S. Ct. 2476, 115 L. Ed. 2d 532 (1991) (internal quotation marks and citation omitted). Guzman argues that California Welfare and Institutions Code section 14043.36(a) runs afoul of this provision because it conflicts with, and is therefore preempted by, federal Medicaid law. In preemption cases, we begin with the presumption that the "historic police powers of the States" are not superseded by federal law unless such result was the "clear and manifest purpose of Congress." Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S. Ct. 2240, 135 L. Ed. 2d 700 (1996) (internal quotation marks and citation omitted).
Section 14043.36(a) states that
[i]f it is discovered that a provider is under investigation by the department *1080 or any state, local, or federal government law enforcement agency for fraud or abuse, that provider shall be subject to temporary suspension from the Medi-Cal program, which shall include temporary deactivation of the provider's number, including all business addresses used by the provider to obtain reimbursement from the Medi-Cal program.
Id. Guzman argues that this statute is preempted because federal law prohibits states from suspending providers from a state health care program simply because the provider is "under investigation" for fraud or abuse.
B
Medicaid, by definition, is a cooperative federal-state medical benefits assistance program. See 42 U.S.C. § 1396a. As we have stated before, because such program "exemplifies what is often referred to as cooperative federalism," "the case for federal preemption becomes a less persuasive one." Wash. Dep't of Soc. & Health Servs. v. Bowen, 815 F.2d 549, 557 (9th Cir.1987) (internal quotation marks and citations omitted). The Medicaid statutes contain no "explicit pre-emptive language" limiting the grounds upon which a state may suspend a provider from a state health care program.[6]See Mortier, 501 U.S. at 605, 111 S. Ct. 2476. Thus, we must determine whether the federal Medicaid scheme is "`so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,'" id. (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S. Ct. 1146, 91 L. Ed. 1447 (1947)), or whether compliance with the California statute "`stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,'" id. (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S. Ct. 399, 85 L. Ed. 581 (1941)).
C
Section 1128 of the Social Security Act lists certain grounds upon which the Secretary of HHS must exclude providers from a federal health care program; the Act also lists certain other grounds upon which the Secretary may do so in his discretion. See 42 U.S.C. § 1320a-7. In listing the discretionary grounds for suspension, one subsection of the Act explains that the Secretary may exclude or suspend "[a]ny individual or entity which has been suspended or excluded from participation... [in] a State health care program, for reasons bearing on the individual's or entity's professional competence, professional performance, or financial integrity." Id. § 1320a-7(b)(5). This provision plainly contemplates that states have the authority to suspend or to exclude providers from state health care programs for reasons other than those upon which the Secretary of HHS has authority to act. Were such not the case, this subsection would not vest the Secretary with any authority not already provided elsewhere in the statute, and its inclusion would be redundant. See Spencer Enters., Inc. v. United States, 345 F.3d 683, 691 (9th Cir.2003) ("[I]t is ... a `cardinal rule of statutory interpretation that no provision should be construed to be entirely redundant.'" (quoting Kungys v. United States, 485 U.S. 759, 778, 108 S. Ct. 1537, 99 L. Ed. 2d 839 (1988))); see also Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1175 (9th Cir. 2006) (same).
The applicable Medicare regulations confirm this view. The regulation describing "State-Initiated Exclusions from Medicaid" provides that "a State may exclude *1081 an individual or entity from participation in the Medicaid program for any reason for which the Secretary could exclude that individual or entity." 42 C.F.R. § 1002.2(a). Next, it instructs that "nothing [in the regulations] should be construed to limit a State's own authority to exclude an individual or entity from Medicaid for any reason or period authorized by State law." Id. § 1002.2(b). Thus, not only does the applicable federal statute fail to prohibit states from suspending providers from state health care programs for reasons other than those upon which the Secretary of HHS may act, the governing regulation specifically instructs that states have such authority.
Accordingly, nothing in the federal Medicaid statutes or regulations prevents a state from suspending a provider temporarily from a state health care program on the basis of an ongoing investigation for fraud or abuse, as California Welfare and Institutions Code section 14043.36(a) permits. Thus, we agree with the district court that Guzman is unlikely to prevail on the merits of his claim that such statute is pre-empted by federal law.
IV
Even if California Welfare and Institutions Code section 14043.36(a) is not preempted, Guzman argues that federal Medicaid law entitles him to a hearing before his temporary suspension from the Medi-Cal program is imposed. Guzman seeks to enforce such purported right through 42 U.S.C. § 1983.
Section 1983 creates a cause of action against any person who, under color of state law, deprives "any citizen of the United States ... of any rights, privileges, or immunities secured by the Constitution and laws" of the United States. Id. Although this statute enables plaintiffs to enforce federal statutory rights, Maine v. Thiboutot, 448 U.S. 1, 4-5, 100 S. Ct. 2502, 65 L. Ed. 2d 555 (1980), it "does not provide an avenue for relief every time a state actor violates a federal law," City of Rancho Palos Verdes v. Abrams, 544 U.S. 113, 119, 125 S. Ct. 1453, 161 L. Ed. 2d 316 (2005). Thus, to demonstrate that he is entitled to a pre-suspension hearing under federal Medicaid law, Guzman must establish that a federal statute unambiguously e"[t]he Supreme Court has held that only violations of rights, not laws, give rise to § 1983 actions." Save Our Valley v. Sound Transit, 335 F.3d 932, 936 (9th Cir.2003) (citing Gonzaga Univ. v. Doe, 536 U.S. 273, 285, 122 S. Ct. 2268, 153 L. Ed. 2d 309 (2002); Blessing v. Freestone, 520 U.S. 329, 340, 117 S. Ct. 1353, 137 L. Ed. 2d 569 (1997)).
A
Guzman contends that he is afforded the right to a pre-suspension hearing by several Medicaid statutes and regulations. First, he points to the Social Security Act, which requires the Secretary of HHS to afford "reasonable notice and opportunity for a hearing" to any provider excluded from any federal health care program. 42 U.S.C. § 1320a-7(f)(1). Yet by its plain terms, such provision applies only to exclusions imposed by the Secretary himself; it does not govern state exclusion procedures. Accordingly, the provision does not control Guzman's state-initiated temporary suspension.
B
Second, Guzman points to the federal regulations that set forth the requirements for "State-Initiated Exclusions from Medicaid," 42 C.F.R. §§ 1002.1-.230. One such regulation requires the relevant state agency to "have administrative procedures in place that enable it to exclude an individual or entity for any reason for which the Secretary could exclude such individual or entity." Id. § 1002.210. Another regulation provides that the state agency must *1082 give the individual or entity "the opportunity to submit documents and written argument against" such exclusion and "any additional appeals rights that would otherwise be available under procedures established by the State." Id. § 1002.213.
By their express terms, such regulations do not apply to Guzman's temporary suspension from Medi-Cal because they set forth only those procedures which a state must follow in excluding providers for reasons upon which the Secretary of HHS could act. DHCS seeks temporarily to suspend Guzman from Medi-Cal because he is under investigation for fraud and abuse, as it has the authority to do under California Welfare and Institutions Code section 14043.36(a). The Secretary of HHS has no similar authority. Accordingly, a suspension under section 14043.36(a) is not controlled by §§ 1002.1-.230.[7]
C
Guzman points to one final source of his right to a pre-suspension hearing, 42 C.F.R. § 431.54(f). Consistent with Medicaid's purpose of providing health care to the indigent in quantity and quality equivalent to the standard of care available to the general population, federal law requires state health care plans to provide that "any individual eligible for medical assistance ... may obtain such assistance from any institution ... or person ... qualified to perform the service or services required ..., who undertakes to provide him such services." 42 U.S.C. § 1396a(a)(23). This mandate is sometimes referred to as the "freedom of choice" principle. See Ball v. Rodgers, 492 F.3d 1094, 1098 n. 4 (9th Cir.2007).
In the Omnibus Budget Reconciliation Act of 1981, Pub.L. No. 97-35, 95 Stat. 357, Congress cabined such principle by creating exceptions to § 1396a(a)(23) allowing states to "lock in" certain beneficiaries who utilize Medicaid services "at a frequency or amount not medically necessary" by limiting the number of providers from whom they may obtain medical services. 42 U.S.C. § 1396n(a)(2)(A) (1982). Similarly, the Act allowed states to "lock out" certain providers from state health care programs upon a finding that the provider furnished medical services "at a frequency or amount not medically necessary" or "of a quality which does not meet professionally recognized standards of health care." Id. § 1396n(a)(2)(B).
In 1983, HHS promulgated regulations to implement these exceptions, stating that, consistent with the Act, "a State shall not be deemed to be out of compliance with[the freedom of choice provision]" if it has "elected any of the exceptions set forth in [the regulation]," including subsection (f), which provides as follows:
Lock-out of providers. If a Medicaid agency finds that a Medicaid provider has abused the Medicaid program, the agency may restrict the provider, through suspension or otherwise, from participating in the program for a reasonable period of time.
Before imposing any restriction, the agency must meet the following conditions:
(1) Give the provider notice and opportunity for a hearing, in accordance with procedures established by the agency.
*1083 (2) Find that in a significant number or proportion of cases, the provider has:
(i) Furnished Medicaid services at a frequency or amount not medically necessary, as determined in accordance with utilization guidelines established by the agency; or
(ii) Furnished Medicaid services of a quality that does not meet professionally recognized standards of health care.
(3) Notify CMS and the general public of the restriction and its duration.
(4) Ensure that the restrictions do not result in denying recipients reasonable access (taking into account geographic location: and reasonable travel time) to Medicaid services of adequate quality, including emergency services.
42 C.F.R. § 431.54(f).
Notably, such regulation is placed among the exceptions to the freedom of choice provision, see id. § 431.54 ("Exceptions to certain State plan requirements"), rather than those setting forth the procedural safeguards that must be followed when states exclude providers from state health care programs. See id. §§ 1002.1.230 ("State-Initiated Exclusions from Medicaid"). Yet reading this provision in isolation, Guzman argues that it vests him with a right to the remedies set forth in the regulation prior to the enforcement of his temporary suspension.
Guzman is correct that his temporary suspension from Medi-Cal is a "restriction" on his participation in such program because the effect of the suspension is to prevent him from billing Medi-Cal for the costs of any services rendered. See supra at 13361-62 & n. 3. Moreover, DHCS has never made any finding that Guzman has furnished unnecessary or inadequate medical services, as section 431.54(f)(2) appears to require in order for a state to avoid infringing upon the freedom of Medicaid recipients to choose among providers.
Yet even if subsection (f) were designed to entitle Guzman to the remedies it describes, Guzman must demonstrate that a federal statute vests him with such a right. As we held in Save Our Valley, "agency regulations cannot independently create rights enforceable through § 1983." 335 F.3d at 939; see also Alexander v. Sandoval, 532 U.S. 275, 291, 121 S. Ct. 1511, 149 L. Ed. 2d 517 (2001) ("Language in a regulation may invoke a private right of action that Congress through statutory text created, but it may not create a right that Congress has not."); Gonzaga, 536 U.S. at 290, 122 S. Ct. 2268 ("[I]f Congress wishes to create new rights enforceable under § 1983, it must do so in clear and unambiguous terms ....").
In determining whether Congress intended to create a federal right in a particular statutory provision, we examine three factors. "First, Congress must have intended that the provision in question benefit the plaintiff." Blessing, 520 U.S. at 340, 117 S. Ct. 1353. In answering this initial inquiry, we must determine whether the statute creates an "individual entitlement," Gonzaga, 536 U.S. at 287, 122 S. Ct. 2268, that is "unambiguously conferred," id. at 283, 122 S. Ct. 2268 (internal 13372 quotation marks omitted), by the use of "rights-creating language," id. at 284 n. 3, 122 S. Ct. 2268. See Harris v. Olszewski, 442 F.3d 456, 461 (6th Cir.2006) (applying Gonzaga to this prong of the Blessing test).
Here, our analysis need not proceed further than this first step of the Blessing test because there is no federal statute that references any of the procedures set forth in subsection (f).[8] Although subsection *1084 (f) was promulgated to implement the exceptions to the freedom of choice provision set forth in the Omnibus Budget Reconciliation Act of 1981, including the provider "lock-out" exception, 42 U.S.C. § 1396n(a)(2)(B) (repealed 1987), Congress decided to repeal such provision in 1987. See Medicare and Medicaid Patient and Program Protection Act of 1987, Pub.L. No. 100-93, sec. 8(h), § 1915(a)(2), 101 Stat. 680, 694. Thus, whatever the effect of HHS's decision to retain the implementing regulation after the repeal of the statute, Guzman cannot contend that such regulation entitles him to a right enforceable in the § 1983 claim he has brought here.
As we have stated in the past, "the Supreme Court's Sandoval and Gonzaga decisions, taken together, compel the conclusion... that agency regulations cannot independently create rights enforceable through § 1983." Save Our Valley, 335 F.3d at 939. Such conclusion "should surprise no one, as it results directly from the broader, venerated constitutional law principle that Congress, rather than the executive, is the lawmaker in our democracy." Id.
Accordingly, Guzman is unlikely to succeed on the merits of his claim that he has an enforceable federal right to a hearing prior to the imposition of his temporary suspension from the Medi-Cal program.
V
Finally, Guzman argues that even if he is not entitled to a pre-suspension hearing under federal Medicaid law, the Fourteenth Amendment of the United States Constitution affords him such a remedy. The Fourteenth Amendment protects against governmental deprivations of "life, liberty, or property" without due process of law. U.S. Const. amend. XIV. To state a cognizable due process claim, Guzman must have a "recognized liberty or property interest at stake." Schroeder v. McDonald, 55 F.3d 454, 462 (9th Cir.1995). We have previously held that a provider such as Guzman does "not possess a property interest in continued participation in Medicare, Medicaid, or the federally-funded state health care programs." Erickson v. United States ex rel. Dep't of Health & Human Servs., 67 F.3d 858, 862 (9th Cir.1995). Thus, under our precedent, Guzman must demonstrate that he possesses a liberty interest that will be jeopardized by his temporary suspension from Medi-Cal.
The liberty guaranteed by the Fourteenth Amendment is necessarily broad. See Bd. of Regents v. Roth, 408 U.S. 564, 572, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972). To that end, Guzman argues that DHCS's failure to provide him with a pre-suspension hearing deprived him of three protected liberty interests: (1) his right to contract with the state; (2) his interest in pursuing the occupation of his choice; and (3) his reputation for honesty and morality. Although all three interests are protected under the Fourteenth Amendment, Guzman must first demonstrate that he was actually deprived of at least one of these interests before he can establish that he is entitled to relief. See Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541, 105 S. Ct. 1487, 84 L. Ed. 2d 494 (1985).
A
Guzman argues that because his temporary suspension denies him the ability to receive reimbursement for treating Medi-Cal patients, he has been deprived *1085 of his right to contract with the state. In support of such assertion, Guzman relies on the D.C. Circuit's decision in Trifax Corp. v. District of Columbia, 314 F.3d 641 (D.C.Cir.2003), which indicates that "formally debarring a corporation from government contract bidding constitutes a deprivation of liberty that triggers the procedural guarantees of the Due Process Clause." Id. at 643. However, Guzman's reliance on such authority is misplaced. Participation in the Medi-Cal program entitles Guzman to reimbursement for treating patients who receive Medi-Cal benefits; it does not involve bidding on government contracts.[9] As the Seventh Circuit explained in Medley v. City of Milwaukee, 969 F.2d 312 (7th Cir.1992), there is no authority for the proposition that a private party, such as Guzman, has a "liberty interest in ... participation in a government assistance program designed to provide benefits for a third party." Id. at 317. Accordingly, we must conclude that DHCS's action does not deprive Guzman of his interest in contracting with the state.
B
Guzman next argues that his temporary suspension denies him his liberty interest in pursuing the occupation of his choice. The Supreme Court has not defined the boundaries of an individual's right to pursue his chosen profession, but it has stated that there is "some generalized due process right to choose one's field of private employment." Conn v. Gabbert, 526 U.S. 286, 291-92, 119 S. Ct. 1292, 143 L. Ed. 2d 399 (1999). The Court has emphasized, however, that all cases recognizing such a right have "deal[t] with a complete prohibition on the right to engage in a calling, and not [a] sort of brief interruption." Id. at 292, 119 S. Ct. 1292 (emphasis added). Indeed, the liberty interest in pursuing one's chosen profession has been recognized only in cases where (1) a plaintiff challenges the rationality of government regulations on entry into a particular profession, see, e.g., Schware v. Bd. of Bar Exam'rs, 353 U.S. 232, 77 S. Ct. 752, 1 L. Ed. 2d 796 (1957), or (2) a state seeks permanently to bar an individual from public employment, see, e.g., Roth, 408 U.S. at 573, 92 S. Ct. 2701.
Guzman's claim does not fall into either of these two recognized categories. With respect to the first, DHCS has temporarily suspended Guzman from Medi-Cal, thereby preventing him from receiving reimbursement for treating Medi-Cal patients. DHCS has not, however, revoked or suspended his license to practice medicine. Thus, Guzman's case is distinguishable from those in which plaintiffs have challenged the rationality of a state-imposed barrier to entering a particular profession, such as a testing or licensing requirement. See, e.g., Schware, 353 U.S. at 247, 77 S. Ct. 752 (recognizing the liberty interest of an individual denied the right to sit for a state bar exam).
As to the second category, Guzman is not a public employee, nor has DHCS's decision to suspend him deprived him of future public employment. Consequently, the suspension did not impose a complete bar on his ability to become a public employee. See Cafeteria & Rest. Workers Union, Local 473 v. McElroy, 367 U.S. 886, 895-96, 81 S. Ct. 1743, 6 L. Ed. 2d 1230 (1961) (concluding that an employment decision to bar a cook from working at a particular military base did not violate the cook's due process rights because she "remained entirely free to obtain employment *1086... with any other employer"); Llamas v. Butte Cmty. Coll. Dist., 238 F.3d 1123, 1126, 1128 (9th Cir.2001) (concluding that a janitor fired from his job and "barred from all future employment with the District" was not deprived of his liberty interest in pursuing the occupation of his choice because he had "not been banned from pursuing a janitorial position [or other public employment] elsewhere").
In sum, Guzman's temporary suspension from the Medi-Cal program does not exclude him from the medical profession, nor does it deprive him of, or prevent him from applying for, public employment. Accordingly, Guzman has not been deprived of a protected liberty interest in pursuing the occupation of his choice.
C
Finally, Guzman contends that the Due Process Clause entitles him to a pre-suspension hearing because the grounds on which the suspension is based harm his reputation. A person's liberty interest is implicated if the government levels a charge against him that "impairs his reputation for honesty or morality." Erickson, 67 F.3d at 862 (citing Vanelli v. Reynolds Sch. Dist. No. 7, 667 F.2d 773, 777 (9th Cir.1982)). DHCS's suspension of Guzman triggers such an interest because it is predicated on the fact that he is under investigation for "fraud and abuse," an allegation that impacts his reputation for honesty. See Cox v. Roskelley, 359 F.3d 1105, 1113 (9th Cir.2004) (concluding that a termination letter which alleged that a plaintiff had overcharged for services rendered "could impair [plaintiff's] reputation for honesty or morality").
Thus, Guzman can establish that he has a protected liberty interest at stake if he can satisfy the test we set forth in Vanelli: he must demonstrate that (1) "`the accuracy of the charge is contested,'" (2) "`there is some public disclosure of the charge,'" and (3) the charge is "`made in connection with the termination of employment or the alteration of some right or status recognized by [ ] law.'" Erickson, 67 F.3d at 862 (alteration in original) (quoting Vanelli, 667 F.2d at 777-78).
Applying Vanelli, we note initially that Guzman contests the accuracy of the charges against him. Ultimately, however, Guzman's likelihood of success on the merits of this claim turns on whether he can demonstrate a "public disclosure" of DHCS's charges against him under the second prong of the Vanelli test.
1
With respect to this second prong, Guzman first argues that federal regulations require DHCS to report his suspension to the Healthcare Integrity and Protection Data Bank ("HIPDB"), and that such reporting would constitute "public disclosure" sufficient to deprive him of a protected liberty interest. The HIPDB is a public database, maintained by HHS under authority provided by the Social Security Act, which records certain "final adverse actions" taken against health care providers. See 42 U.S.C. § 1320a-7e(a). Information in this database is available on request to federal and state government agencies, health plans, health care practitioners and providers, and persons requesting statistical information. See 45 C.F.R. § 61.12(a). Because members of the public can access information in the HIPDB, DHCS's reporting of Guzman's suspension to the HIPDB would constitute publication that deprives him of a protected liberty interest. See Cox, 359 F.3d at 1108-12 (concluding that a termination letter, which set forth allegations of a public employee's incompetent and unethical behavior, was "published" the moment it was *1087 placed in the employee's publicly accessible personnel file).
Federal regulations provide that "Federal and State Government agencies must report health care providers, suppliers, or practitioners excluded from participating in Federal or State health care programs" for inclusion in the HIPDB. 45 C.F.R. § 61.10(a) (emphasis added). In addition, "exclusion" is defined for reporting purposes as "a temporary or permanent debarment of an individual or entity from participation in any Federal or State health-related program." Id. § 61.3. The report to the HIPDB must include, among other things, "[a] narrative description of the acts ... upon which the reported action was based." Id. § 61.10(b)(4)(i).
Guzman argues that his temporary suspension is an "exclusion," which DHCS must report to the HIPDB, thereby publishing its charges against him. In response, DHCS contends that its policy is to report only "final" actions to the HIPDB. DHCS believes that the temporary suspension it imposed on Guzman under California Welfare and Institutions Code section 14043.36(a) is not a "final action" and thus need not be reported.[10]
The district court agreed with Guzman that DHCS's policy of not reporting temporary suspensions appears to conflict with the plain language of the regulations. See 45 C.F.R. §§ 61.3, 61.10. Nevertheless, the court concluded that because DHCS has an established policy of not reporting such suspensions, Guzman's fear of disclosure was merely speculative. As the district court explained,
Guzman concedes that, as a matter of policy, DH[C]S does not report temporary suspensions to the HIPDB. He fears, however, that because that policy apparently violates federal regulations, DH[C]S may ultimately be forced to report the suspension. Guzman adduces no evidence that there will likely be a change in DH[C]S's policy during the pendency of this litigation. Specifically, he presents no evidence that the policy has been challenged by federal Medicaid authorities or third parties, or that DH[C]S for some other reason will not continue to adhere to it for the foreseeable future.
Absent such evidence, Guzman's speculative, unsupported fear that the charges will be reported does not provide a sufficient basis upon which to conclude that he is likely to succeed on the merits of his procedural due process claim.
After DHCS stipulated that it would comply with such an order, the district court directed DHCS to provide Guzman with at least ten days' notice of any change in its reporting policy. This order remains in effect until the administrative hearing on DHCS's charges against Guzman is concluded and, if notice is given prior to or during such hearing, the district court's order provides that Guzman may renew his motion for a preliminary injunction.
We cannot conclude that the district court abused its discretion in the treatment of this claim. The record establishes that DHCS has not reported Guzman's suspension to the HIPDB, and Guzman *1088 offers no evidence that DHCS is likely to change its policy in the future. Moreover, DHCS has been ordered to notify Guzman of any change in its policy, at which time Guzman could renew his motion for a preliminary injunction.
Accordingly, based on the present record, we conclude that Guzman is not likely to succeed in proving that DHCS will publicly disclose the charges against him.
2
In the alternative, Guzman also asserts that he is under contractual obligations with several independent physicians' associations to disclose his temporary suspension and that he is required to report the suspension to most of the hospitals at which he has staff privileges. Guzman's argument that his own disclosure of the suspension deprives him of a protected liberty interest is foreclosed by our decision in Llamas. In that case, we rejected the claim of a terminated public employee that his liberty interest would be implicated if he responded truthfully regarding such termination on a civil service job application he planned to file in the future. 238 F.3d at 1125-30. We explained that "to allow the potentially stigmatized party to satisfy the publication prong by disseminating the details surrounding his termination would contradict the purposes of the publication requirement as made clear in ... Supreme Court precedent." Id. at 1131 (citing Bishop v. Wood, 426 U.S. 341, 349, 96 S. Ct. 2074, 48 L. Ed. 2d 684 (1976)).
Guzman points to no authority for the proposition that the contracts that obligate him to self-report his suspension are sufficient to constitute public disclosure for purposes of a due process claim, and we are aware of none.[11] Accordingly, we conclude that Guzman's private obligations to report DHCS's action do not satisfy the public disclosure prong of the Vanelli test.
Having determined that Guzman is unable to demonstrate that the nature of the charges against him will be publically disclosed, we need not consider whether the charges have been made in connection with the alteration of a protected right or status.[12]See Erickson, 67 F.3d at 862. Accordingly, we conclude that Guzman is unlikely to succeed in establishing a violation of his rights under the Fourteenth Amendment.
VI
For the foregoing reasons, the district court's decision is
AFFIRMED.
NOTES
[1] As of July 1, 2007, the duties of the California Department of Health Services were modified and the agency was renamed the Department of Health Care Services. See Cal. Health & Safety Code § 20. Hereinafter, this opinion shall refer to the agency by its current name, DHCS.
[2] The felony complaint filed in California Superior Court charged Guzman with two counts of grand theft, in violation of California Penal Code section 487(a) and California Welfare and Institutions Code section 14107(b)(4)(A); three counts of making false or fraudulent claims, in violation of California Penal Code sections 550(a)(5), (6), and (7); and two counts of delivering a misbranded drug or device, in violation of California Health and Safety Code sections 111440 and 111450.
[3] As of the date of oral argument, no trial date in the criminal case had yet been set and no hearing on the Accusation had yet been held.
[4] To obtain reimbursement for services provided through Medi-Cal, a medical professional must enroll in the Medi-Cal program and receive a "provider number." Cal.Code Regs. tit. 22, §§ 51000.7, 51000.20. The letter informed Guzman that all provider numbers assigned to him would be "temporarily suspend[ed] and deactivat[ed]."
[5] In addition to the loss of revenue from his Medi-Cal patients, Guzman noted that he was under contractual obligations to report any such suspension to the hospitals with which he is affiliated and to the independent physicians' associations of which he is a member. Guzman predicted that the hospitals would suspend or revoke his staff privileges and that the associations would terminate his membership, actions that would preclude him from receiving payments from private insurance companies that represent his non-Medi-Cal patients.
[6] The Social Security Act requires states to exclude providers from state health care plans if directed to do so by the Secretary of HHS, 42 U.S.C. § 1396a(a)(39), but it does not expressly prohibit states from excluding or suspending providers in other circumstances.
[7] Even if it were, Guzman's likelihood of success on the merits would remain insubstantial. Guzman was notified of his temporary suspension before it was enforced, and California law entitled him to file a written appeal, Cal. Welf. & Inst.Code § 14043.65, and a meeting with DHCS officials, id. § 14123.05. Moreover, California law gives Guzman the right to an in-person hearing before his suspension becomes permanent. Id. § 14123. Indeed, a hearing already would have taken place but for Guzman's request that DHCS postpone proceedings pending the resolution of his criminal trial.
[8] The second factor of the test asks whether "the right assertedly protected by the statute is not so vague and amorphous that its enforcement would strain judicial competence." Blessing, 520 U.S. at 340-41, 117 S. Ct. 1353 (internal quotation marks omitted). The final factor asks whether the statute "unambiguously impose[s] a binding obligation on the States." Id. at 341, 117 S. Ct. 1353.
[9] Accordingly, we need not determine whether to incorporate Trifax's holding into our jurisprudence.
[10] We deny DHCS's motion requesting that we take judicial notice of a letter from the Chief Counsel of the Office of Inspector General ("OIG"), to DHCS that explains how OIG defines final adverse actions for HIPDB reporting purposes. Judicial notice may be taken of any fact "not subject to reasonable dispute in that it is ... capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201. Whatever OIG's stated policy may be, one may reasonably dispute whether the OIG's description of the policy is consistent with the manner in which it is applied. Accordingly, we decline to take judicial notice of such document.
[11] Guzman cites Merritt v. Mackey, 827 F.2d 1368 (9th Cir.1987), for the proposition that liability may exist where the state actor indirectly causes a private party to deprive another private party of a protected interest. In Merritt, we held that an employee of a nonprofit drug and alcohol rehabilitation center stated a claim under § 1983 that he was deprived of his property interest in continued employment when state and federal agents intentionally coerced the nonprofit to fire him by conditioning further funding on his termination. Id. at 1371. Such circumstances are not present here, however, as DHCS played no role in Guzman's decision to enter the private contracts that require reporting.
[12] In Erickson, we held that health care providers' exclusion from Medicare, Medicaid, and certain federally funded health care programs by the Secretary of HHS on account of their fraud-related convictions altered their legal "status" as program participants and consequently deprived them of a protected liberty interest. 67 F.3d at 863. We do not address whether Erickson should be extended to address situations, such as Guzman's, where a party has been suspended during the pendency of an investigation.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/1313908/
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175 Ga. App. 472 (1985)
333 S.E.2d 682
MELTON
v.
THE STATE.
70181.
Court of Appeals of Georgia.
Decided July 12, 1985.
Howard Tate Scott, for appellant.
Ken Stula, Solicitor, for appellee.
SOGNIER, Judge.
Appellant was convicted of driving under the influence of alcohol.
1. Appellant contends the trial court abused its discretion by denying his motion for a continuance, as the denial of this motion severely prejudiced his defense. Appellant's counsel was called for jury duty during the week of appellant's trial. When appellant's case was called for trial his attorney moved for a continuance on the ground that he was on jury duty.
At a hearing on the motion counsel did not contend he was unprepared for trial or had had insufficient time to prepare for trial because of jury duty. Rather, he argued only that appellant's trial would interfere with his jury duty and under the current statute he was not exempted from such duty. While it is true that OCGA § 15-12-1 does not exempt attorneys from jury duty, it is obvious that appellant's counsel could not serve on a jury trying his client because of counsel's partiality in the case. Jordan v. State, 247 Ga. 328, 339 (6) (276 SE2d 224) (1981). The instant case was a simple DUI involving only two State witnesses. Appellant's counsel proceeded to trial after his motion was denied and it is clear from the transcript that he was prepared for trial. Thus, appellant has asserted no facts or allegations which would justify a finding that the trial court abused its discretion in denying the motion for a continuance, Bunge v. State, 149 Ga. *473 App. 712, 713 (1A) (256 SE2d 23) (1979), nor has he shown that appellant's case was harmed by denial of the motion for a continuance. Standridge v. State, 158 Ga. App. 482, 484 (2) (280 SE2d 850) (1981). A motion for a continuance is addressed to the sound discretion of the trial court, Bunge, supra, and under the circumstances of this case we find no abuse of that discretion. Riley v. State, 174 Ga. App. 606 (330 SE2d 808) (1985).
Although appellant argues that his case was prejudiced because the other jurors may have formed an opinion about his counsel which could be detrimental to a fair and impartial trial, there is nothing in the record to support this contention. We will not review factual representations in a brief based on mere speculation which are unsupported by the record. Moore v. State, 174 Ga. App. 460 (330 SE2d 397).
2. Appellant contends he was denied due process of law because the trial court shifted the burden of proof to appellant in its charge relating to presumptions in general and the presumptions relating to levels of intoxication delineated in OCGA § 40-6-392 (b). We do not agree.
Appellant was charged with driving or being in actual physical control of a moving vehicle while under the influence of alcohol or drugs, "or while there was 0.12 percent or more by weight of alcohol in his blood." (Emphasis supplied.) Thus, the wording of the accusation charged appellant with a violation of OCGA § 40-6-391 (a) (1), (2) and (3), or a violation of OCGA § 40-6-391 (a) (4). In regard to a violation of § 40-6-391 (a) (4) our Supreme Court has held that this subsection defines a specific act as criminal, i.e., driving while having a blood-alcohol count of at least .12%, and all the State needs to prove is that the defendant committed this act. Lester v. State, 253 Ga. 235, 237 (2) (320 SE2d 142) (1984). The court went on to hold that "[s]ubsection (a) (4) simply sets out an alternative method of proving the crime established by the DUI statute. As no presumption is involved, we find appellant's argument [that this subsection establishes a conclusive presumption of impaired driving ability] without merit." Id. at 238 (2). Thus, in regard to the portion of the accusation charging a violation of subsection (a) (4), the trial court need not charge on presumptions, rebuttable or otherwise. However, appellant was charged in the alternative with violating OCGA § 40-6-391 (a) (1), (2) and (3), which provides: "A person shall not drive or be in actual physical control of any moving vehicle while: (1) Under the influence of alcohol; (2) Under the influence of any drug to a degree which renders him incapable of driving safely; or (3) Under the combined influence of alcohol and any drug to a degree which renders him incapable of driving safely." Thus, the presumptions set forth in OCGA § 40-6-392 (b) (1), (2) and (3) are applicable to that part of the accusation.
*474 After giving the jury a general explanation of the meaning of presumptions the court charged the jury, in pertinent part: "However, in mentioning the offering of evidence contradicting the presumption, the rule of law that there is no burden whatsoever on a defendant to offer any testimony or any evidence in support of his innocence is not altered or changed. The burden is entirely on the State, as I have previously charged you, to prove the guilt of the defendant beyond a reasonable doubt." The court subsequently charged the jury on the presumptions set forth in OCGA § 40-6-392 (b) relating to a person's blood alcohol content. Appellant contends that under the holding in Sandstrom v. Montana, 442 U.S. 510 (99 SC 2450, 61 LE2d 39) (1979), the court's charge on presumptions was burden-shifting, relieving the State of proving every element of the offense charged beyond a reasonable doubt. We do not agree.
Both Sandstrom and the recent case of Francis v. Franklin, ___ U. S. ___ (105 SC ___, 85 LE2d 344, 53 LW 4495) (1985), were decided on the ground that a charge that it is presumed that a person intends the natural and probable consequences of his acts created a mandatory presumption of intent, thereby relieving the State of proving an essential element of the crime of malice murder. In Francis, supra, the court stated: "If a specific portion of the jury charge, considered in isolation, could reasonably have been understood as creating a presumption that relieves the State of its burden of persuasion on an element of an offense, the potentially offending words must be considered in the context of the charge as a whole. Other instructions might explain the particular infirm language to the extent that a reasonable juror could not have considered the charge to have created an unconstitutional presumption. [Cit.] This analysis `requires careful attention to the words actually spoken to the jury . . . , for whether a defendant has been accorded his constitutional rights depends upon the way in which a reasonable juror could have interpreted the instruction.' Sandstrom, supra, at 514."
Looking at the charge as a whole, we find that a reasonable juror could not have interpreted the charge as having created an unconstitutional presumption, thereby shifting the burden of proof to appellant. The court charged the jury specifically that "it is incumbent upon the State to prove that all of the necessary elements of the crime charged in this accusation were committed by the defendant. The defendant enters upon this trial with a presumption of innocence . . . and that presumption remains with him throughout the trial, unless and until it is overcome by evidence submitted to you which establishes his guilt beyond a reasonable doubt." (Emphasis supplied.) The court also charged the jury that a presumption is not evidence, and in reference to offering evidence contradicting a presumption, the rule that there is no burden whatsoever on a defendant to offer any *475 testimony or any evidence in support of his innocence is not altered or changed. Looking at the court's charge as a whole, we find nothing which a reasonable juror could interpret as an unconstitutional shifting of the burden of proof to appellant. As this court has held previously that the language used in the charge here did not shift the burden of proof to appellant, McCann v. State, 167 Ga. App. 368, 369 (2) (306 SE2d 681) (1983), and that the presumptions created by OCGA § 40-6-392 do not constitute a denial of due process of law, Olsen v. State, 168 Ga. App. 296, 297 (308 SE2d 703) (1983), we find no error in the court's charge on presumptions.
Judgment affirmed. Birdsong, P. J., concurs. Carley, J., concurs specially.
CARLEY, Judge, concurring specially.
I concur in the judgment and in all that is said in Division 1 of the majority opinion. I also agree with the conclusion of Division 2 that the challenged charge does not require that we reverse the judgment in this case. However, I agree for the reasons set forth in Peters v. State, 175 Ga. App. 463 (333 SE2d 436) (1985).
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175 Ga. App. 369 (1985)
333 S.E.2d 204
FREEMAN DECORATING COMPANY et al.
v.
SUBSEQUENT INJURY TRUST FUND.
70075.
Court of Appeals of Georgia.
Decided July 9, 1985.
H. P. Arnall, H. A. Stephens, Nicholas E. Bakatsas, for appellants.
Michael J. Bowers, Attorney General, Rita J. Llop, Senior Attorney, for appellee.
BENHAM, Judge.
We granted appellants' discretionary application to determine the entitlement of the Subsequent Injury Trust Fund to certain workers' compensation benefits following the death of a worker. After reviewing the record, we reverse the judgment rendered by the trial court.
The employee died on October 1, 1981, as a result of a heart attack arising out of and in the scope of his employment. His widow filed a claim for benefits and died before any action was taken on her *370 claim, having survived her husband for a period of 43 days. In December 1981, appellee Subsequent Injury Trust Fund ("Fund") filed a claim for any benefits due on the ground that there were "no dependents qualifying to receive dependency benefits" in this case. See OCGA § 34-9-358 (a). Following a hearing held in October 1983, the administrative law judge found the widow was a dependent within the meaning of the Workers' Compensation Act for the 43-day period she survived her husband. Based on this finding, the ALJ denied the Fund's claim, but refused to award the benefits to which the widow was entitled because a representative of her estate had not been made a party.
In a 2-1 decision, the State Board of Workers' Compensation affirmed the ALJ's award and found that the widow's estate had been represented before the ALJ. The board then proceeded to award to the widow's estate benefits of $115 per week for the 43-day period the widow survived her husband. The superior court, relying on Zachery v. Royal Indem. Co., 80 Ga. App. 659 (56 SE2d 812) (1949), reversed the board's award. This appeal followed.
The trial court's and the Fund's reliance upon Zachery is misplaced. The Zachery court was concerned with a situation in which a primary beneficiary (i.e., a spouse) had survived the worker but had not filed an application for benefits. However, a secondary beneficiary (i.e., the worker's mother, who could show dependency upon the wage earner for a period of at least three months preceding the worker's death) had made a timely application. At the time of the decision in Zachery, the primary beneficiary was conclusively presumed dependent upon the deceased and therefore entitled to the benefits. But see Ins. Co. of N. America v. Russell, 246 Ga. 269 (271 SE2d 178) (1980). The Zachery court faced the dilemma of a situation in which a primary beneficiary had survived the decedent but had not filed a timely application for the benefits to which she was entitled. Was her inaction to preclude an award of benefits to the decedent's mother, who had filed a timely application? The Zachery court suggested that the State Board of Workers' Compensation defer action on a secondary beneficiary's application until the one-year statute of limitation had expired to see if any primary beneficiary filed a timely application. Id. at 663-664. The court's suggestion solved the Zachery problem since the hearing on the mother's claim had taken place over a year after the worker's death, and no primary beneficiary had filed an application. However, the court also stated that eligibility for the benefits was to be determined at the date of the hearing. While that language adequately fit the Zachery scheme of things, it was not necessary to the Zachery decision so long as the board adhered to the court's suggestion that hearings on claims from secondary beneficiaries be deferred until the expiration of the one-year statute of limitation for *371 filing claims. In the case at bar we are not concerned with a Zachery-type situation. Instead, there is only one primary beneficiary and she filed a timely claim for benefits. To apply the Zachery rationale to a case where only a primary beneficiary is involved penalizes, without reason, the primary beneficiary.
The Zachery solution also ignores the realities of everyday life and is at odds with the very purpose of the Workers' Compensation Act. "The policy of the [Workers'] Compensation Act, with respect to the payment of death benefits, is to provide a measure of compensation to persons suffering a direct loss of support because of the death of an employee as a result of his employment." St. Paul-Mercury &c. Co. v. Robinson, 88 Ga. App. 217, 219 (76 SE2d 512) (1953). Insistence upon a potential beneficiary surviving until the merits of a claim are adjudicated ignores the fact that, from the moment of the wage earner's death, the needs of the supported spouse are just as real as they were prior to the wage earner's death, and the survivor needs financial support, support which should emanate from the workers' compensation laws of this state. Id. See also Williams v. Donovan, 198 FSupp. 237 (E.D. La.) (1961).
Conditioning an award on survival until adjudication also gives a party the opportunity to profit from delay in administrative or judicial proceedings. In re Carlson's Case, 355 Mass. 131 (243 NE2d 181, 182) (1969). In the case at bar, the hearing on the widow's claim for death benefits took place over two years after the wage earner's death, and the board's award of benefits to the widow's estate was handed down nearly 33 months after the death of the supporting spouse. Making the hearing date critical to entitlement to benefits opens the entire system to abuse and manipulation. See Parker v. Nat. Zinc Co., 406 P2d 493 (Okla.) (1965). "Sound public policy would frown upon a statutory interpretation which places a premium upon delay in administrative or judicial proceedings." In re Carlson's Case, supra at 182.
Finally, viewing the death benefits provision of the Workers' Compensation Act as a substitute remedy for a wrongful death action where the death of a worker is due to a compensable injury, we must conclude that survival until a hearing is held is inappropriate. If a widow dies during the pendency of her wrongful death action based on her husband's homicide, the action survives to her personal representative if there are no children. Campbell v. Western & Atl. R., 57 Ga. App. 209 (1) (194 S.E. 927) (1938). See also OCGA § 9-2-41. In the same way, the estate of the sole potential beneficiary of workers' compensation death benefits should be allowed to continue a pending action and receive any award made.
The fact of eligibility of a primary beneficiary must be determined as of the date of the accident. Making this date the critical one *372 insofar as entitlement is concerned alleviates the financial concerns voiced above and removes the incentive a party might have to drag out proceedings for as long as possible in an effort to outlive the beneficiary. The eligibility language in Zachery is neither controlling nor convincing. The Zachery court had to devise a solution to a situation in which a secondary beneficiary sought benefits during the lifetime of a primary beneficiary, a situation far different from the one presently before us.
In light of the confusion it has caused, we must overrule that language in Zachery which calls for eligibility to be determined as of the date of the hearing on a claim for benefits. Eligibility is to be determined as of the date of the accident. Applying the law to the facts of the present case, we conclude that the board's findings and award were correct: the widow was a dependent under the Act from the date of her husband's death until the date of her own passing. The grant to the widow's estate of benefits for that 43-day period of time was not error. See In re Estate of Pardiew, 19 Ohio App. 2d 207 (250 NE2d 765) (1969); Truck Trailer Sales &c. Co. v. Moore, 244 Miss. 317 (141 S2d 541) (1962); Warren v. Globe Indem., 216 La. 107 (43 S2d 234) (1949). The judgment of the trial court must be reversed.
Judgment reversed. Deen, P. J., Birdsong, P. J., Carley, Sognier, Pope, and Beasley, JJ., concur, Banke, C. J., and McMurray, P. J., dissent.
McMURRAY, Presiding Judge, dissenting.
Because I would affirm the decision of the trial court, I respectfully dissent. Zachery v. Royal Indem. Co., 80 Ga. App. 659 (56 SE2d 812), leads me to the conclusion that the widow's estate was not entitled to compensation because the widow died after she filed a claim and before the hearing. In Zachery, a deceased employee's mother filed a claim for death benefits under the workmen's compensation law. The employee's widow failed to file a claim. The board awarded compensation to the mother and the employer/insurer appealed to the superior court which reversed the judgment of the board. This court ruled that the mother was entitled to receive the benefits, opining: "[W]hile the fact of dependency is determined as of the time of the accident, the fact of eligibility must be determined as of the date of hearing. For instance, both a mother and a widow may be dependent on the date of the accident. Both may file claims. In such circumstances, the widow at the time of the hearing is the one eligible for compensation. However, should the widow have died or remarried after she filed a claim and before such hearing, then and in that event the mother would be eligible for the compensation." Zachery v. Royal Indem. Co., 80 Ga. App. 659, 662, supra.
The rule set forth in Zachery is clear: Eligibility for benefits must *373 be determined as of the date of the workers' compensation hearing. In my opinion, such a rule is consistent with the underlying remedial purpose of the workers' compensation law.
The workers' compensation system constitutes "a scheme of social protection which goes no further in nature, amount, or duration, than the necessities of that protection require." 1 Larson, Law of Workmen's Compensation, § 2.60. Thus, a workers' compensation death benefit, unlike tort compensation, is not a property right which survives in favor of heirs, it is an award designed to protect the employee's dependents from financial insecurity. See OCGA § 34-9-265 (b). It follows that a dependent should not be eligible to receive dependency benefits if she dies or remarries before the hearing. Zachery v. Royal Indem. Co., 80 Ga. App. 659, supra.
With respect to the Subsequent Injury Trust Fund, OCGA § 34-9-358 (a) provides, in pertinent part: "Each insurer or self-insurer who in a compensable fatal case finds no dependents qualifying to receive dependency benefits shall pay into this fund one-half of the benefits which would have been payable to a dependent or dependents if one or more existed, or $10,000, whichever is less." Although the employee's widow may have been a dependent at the time of the accident, I would nevertheless rule that she was not eligible, i.e., she did not "qualify" to receive dependency benefits because she died prior to the hearing. Zachery v. Royal Indem. Co., 80 Ga. App. 659, supra; OCGA § 34-9-358 (a). I would hold, therefore, that where, as here, an employee's widow files a claim for death benefits which is controverted by the employer/insurer and the widow dies before the claim is settled or a hearing is held, the widow is not a dependent "qualifying to receive dependency benefits" within the meaning of OCGA § 34-9-358 (a) and one-half of the benefits which would have been payable to the widow, or $10,000, whichever is less, should be paid to the Subsequent Injury Trust Fund.
I am authorized to state that Chief Judge Banke joins in this dissent.
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303 P.2d 905 (1956)
Irene LINTON, Plaintiff-Appellant,
v.
Donald LINTON; Patton & Linton, Inc., a corporation; Blackfoot Ready Mix Concrete Co., and Idaho Bank & Trust Company, a corporation, Defendants-Respondents.
No. 8379.
Supreme Court of Idaho.
November 15, 1956.
Anderson & Anderson, Pocatello, for appellant.
Black, Black & Oliver, Zener & Peterson, Pocatello, for respondents.
KEETON, Justice.
Subsequent to releasing the opinion filed May 2, 1956, a rehearing was granted, additional briefs filed and oral argument heard. The original opinion is withdrawn and this opinion substituted in lieu thereof.
Irene Linton, appellant, was granted a divorce from Donald Linton, respondent, on the ground of physical and mental cruelty suffered by acts of respondent. By the decree a division of the community property was made and a child, the issue of the marriage, William Linton, sixteen years of age, awarded to her custody. The community assets of the parties consist of an equity in their home of the value of $10,000 and personal property of the value of $1,050; 120 shares of stock in the Blackfoot Ready Mix Concrete Company of the book value of $12,453.32; 92 shares of stock in Patton & Linton, Inc., of the book value of $75,960.72. The home is encumbered by a mortgage on which there was, at the time of the trial, a balance unpaid of $8,700, payable in installments of $87 per month. Prior to the granting of the divorce a trust fund was established by agreement of appellant and respondent Donald Linton from the community assets of the value of $13,366.98, for the support and education of the son. The balance of the community assets was, by decree of the court, divided equally between the parties. Appellant was awarded the equity in the home and personal property of a combined value of $11,050. The balance of the corporate stock after a part had been by agreement *906 of the parties placed in a trust fund for the son was divided between the parties as follows: 33.26 shares of Patton & Linton, Inc., to the appellant (wife) and 44.74 shares to the husband; 45.2 shares of the Blackfoot Ready Mix Concrete Company to the appellant and 60.8 shares to the respondent (husband). The court deducted from the wife's share of the corporate stock the $11,050 awarded her in other community assets.
From the decree entered appellant appealed.
In assignments of error appellant contends that the division of the community property was neither equal nor equitable; that the injured party, appellant, is entitled to a greater portion of the property than was awarded to her by the trial court; that the court did not consider, in making the division, the true value of the property so divided, or the condition of the parties, and by the division required appellant to contribute half of the established trust fund to support of the son. In argument appellant states the only point involved in the appeal is with regard to the division of the community property.
Respondent is the manager and an officer of Patton & Linton, Inc. He testified that he received a salary from it of $700 a month less $111 withholding tax; that during the year 1954, additionally, he received a bonus of $10,000. His income tax return for the year 1954 shows an adjusted gross income of the community of $18,436.25.
The evidence also discloses without dispute that for the year 1954 and up to the time of the trial, September 27, 1955, respondent had received from Patton & Linton, Inc., in excess of $30,000 in salary and bonuses. He accounted for this sum by showing expenditures of approximately $11,000. When asked "What did you do with the rest of the money?" he answered "I spent it", and "I spent it as I went along". He made no further accounting except that he had taken a thirty-day vacation. Approximately $20,000 which had been received by him over a period of twenty-one months was not further accounted for.
Evidence further discloses that respondent had for a number of years received a substantial income from the corporations in which he is a stockholder and from other sources.
Appellant has no earning capacity whatsoever, and is afflicted with arthritis disabling her for remunerative employment and necessitating medical expense.
The corporation stock awarded appellant may or may not produce an income for her. In the past profits have been divided in the nature of bonuses between the controlling stockholders. The stock is not listed on any market and the value as determined by the court was made on the value of the physical assets of the corporations. There was no other evidence offered as to value.
While the respondent is by the provisions of Sec. 32-912, I.C. given the management and control of the community property, he receives it in the nature of a trustee for the community. Kohny v. Dunbar, 21 Idaho 258, 121 P. 544, 39 L.R.A., N.S., 1107, Ann.Cas.1913D, 492; Morgan v. Firestone Tire & Rubber Co., 68 Idaho 506, 201 P.2d 976.
The duty of the husband to support the wife and the minor children the issue of the marriage is a continuing one, and has in Idaho been accorded the dignity of a statutory obligation. While the husband and wife contract toward each other obligations of mutual respect, fidelity and support, Sec. 32-901, I. C., the primary duty rests on the husband, when able, by reason of the marital contract and operation of law to furnish the wife with the necessaries of life. Edminston v. Smith, 13 Idaho 645, 92 P. 942, 14 L.R.A.,N.S., 871; Hall v. Johns, 17 Idaho 224, 105 P. 71; Hampshire v. Hampshire, 70 Idaho 522, 223 P.2d 950, 21 A.L.R. 2d 1159; Heslip v. Heslip, 74 Idaho 368, 262 P.2d 999.
Payment of the balance due on the mortgage on the home is also a primary obligation of respondent. No provision was made in the decree for its payment and *907 the equity in the home could be lost, or partially lost, by failure to meet the balance of the obligation as the payments accrue.
When a marriage is dissolved by decree on the grounds of adultery or extreme cruelty, the trial court has jurisdiction to assign the community property to the respective parties in such proportions as the trial court or the condition of the parties deems just. Sec. 32-712, I.C. The decree in such cases is subject to revision on appeal in all particulars including those which are stated to be in the discretion of the court. Sec. 32-714, I.C.; Heslip v. Heslip, supra; Jordan v. Jordan, 75 Idaho 512, 275 P.2d 669.
There was certain personal property in the home consisting of dishes, ornaments and other personal property that was not awarded to either party. The same should be awarded to appellant.
In the situation before us respondent has a large earning capacity, the wife none, and if the decree as made by the trial court were allowed to stand, there is no assurance that she would have any constant income whatsoever, and she might in a comparatively short space of time become an object of charity. The divorce in this case was granted due to the fault of the husband and under the circumstances above outlined, we consider the distribution of the community property made by the trial court inequitable and the decree will be revised and modified in the following particulars:
To more equitably divide the community property the court will make an additional award to appellant requiring respondent to assume and pay any balance due or becoming due on the mortgage subsequent to September 30, 1956, and to pay all future taxes, insurance and assessments against the home, if any, as the same become due, until such time as the mortgage against the home has been paid in full. Any sums paid on the mortgage by appellant subsequent to September 30, 1956, will be forthwith repaid to her by respondent.
Appellant further argues that she was required to contribute half of the established trust fund to the support of the son. The agreement was by her voluntarily entered into after the separation and prior to the granting of the divorce and she cannot now be heard to complain.
The trial court will make the modifications as indicated in this opinion and as so modified the decree is affirmed. Costs to appellant.
TAYLOR, C. J., and PORTER, ANDERSON and SMITH, JJ., concur.
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Order Michigan Supreme Court
Lansing, Michigan
February 7, 2011 Robert P. Young, Jr.,
Chief Justice
Michael F. Cavanagh
Marilyn Kelly
140958 Stephen J. Markman
Diane M. Hathaway
Mary Beth Kelly
AMERICAN HOME MORTGAGE SERVICING, Brian K. Zahra,
Justices
Plaintiff/Counter-
Defendant-Appellant,
v SC: 140958
COA: 289585
Oakland CC: 2008-088841-CH
STEPHEN PANKO,
Defendant/Counter-Defendant,
and
LUMBERMANS FINANCIAL, LLC,
Defendant/Counter-Plaintiff/
Cross-Plaintiff-Appellee,
and
RALPH HOLLEY and MELONEE MONSON-
HOLLEY, a/k/a MELONEE MONSON, a/k/a
MELONEE HOLLEY,
Defendants/Counter-Plaintiffs/
Cross-Defendants-Appellees.
_________________________________________/
By order of September 15, 2010, the application for leave to appeal the March 9,
2010 judgment of the Court of Appeals was held in abeyance pending the decision in Tus
v Hurt (Docket No. 139769). On order of the Court, the appeal having been dismissed in
Tus on December 1, 2010, ___ Mich ___ (2010), the application is again considered, and
it is DENIED, because we are not persuaded that the questions presented should be
reviewed by this Court.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
February 7, 2011 _________________________________________
d0131 Clerk
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632 F. Supp. 176 (1986)
UNITED STATES of America, Plaintiff,
v.
Laurence John LAYTON, Defendant.
No. CR-80-0416 RFP.
United States District Court, N.D. California.
January 14, 1986.
Joseph Russoniello, U.S. Atty., D. Michael Nerney & Sanford Svetcov, Asst. U.S. Attys., San Francisco, Cal., for plaintiff.
James F. Hewitt, Federal Public Defender, Tony Tamburello, San Francisco, Cal., for defendant.
ORDER
PECKHAM, Chief Judge.
INTRODUCTION
Defendant brings this motion for an order directing the clerk of the court to release to defendant: (1) the hardship responses returned by jurors for all cases that have used such a questionnaire; (2) *177 the initial juror qualification questionnaire completed by those jurors who later also filled out a hardship questionnaire; and (3) the number of questionnaires mailed out and the number of hardship excuses granted in each case. Defendant asks for this information in order to challenge the use of hardship questionnaries to prescreen potential jurors for lengthy trials.
This court denies defendant's motion, because the Jury Selection Act, 28 U.S.C. § 1861 et seq., does not allow defendants to challenge, in the abstract, minor innovations in jury selection procedures. Once defendant's jury panel has been selected, defendant will have access to similar information relevant to its selection should he wish to challenge its composition.
STATEMENT OF FACTS
On October 16, 1985, counsel in this case were before this court for a preliminary pretrial conference. One purpose of that conference was to determine what jury selection procedures would be used in light of the expected length of the trial and anticipated level of public interest. The court determined that a prescreening questionnaire will be sent to prospective jurors, allowing each to state in writing, and under oath, any reason why his or her service as a juror in a lengthy trial would cause undue hardship. After a review of responses to the questionnaire, the court will excuse those prospective jurors whose responses are sufficient to show undue hardship. Counsel for either side may object to particular excusals on the ground that the showing of undue hardship is insufficient. Jurors who are excused because of undue hardship will not be required to come to court to restate their reasons for asking to be excused.
When the court approved this prescreening plan, counsel for defendant objected on the ground that such a procedure might exclude a discernible class of prospective jurors. The court explained, at that time, that the only difference between the use of a prescreening device and excusal based on in-court voir dire was that the prospective juror would be spared the inconvenience of coming to court. When defense counsel suggested that a juror might be more likely to manufacture a showing of hardship outside the presence of the court, the court reminded counsel that questionnaire responses would be subject to a penalty for perjury. The court thereafter indicated that it would proceed as planned, absent a showing of prejudice, and noted that such prejudice could be avoided through counsel's ability to object to the excusal of any particular juror whose showing of hardship was thought to be insufficient.
Defendant now brings this motion, asking for the release of juror selection records for all cases that have used a prescreening device. He asserts that this information will provide the necessary facts to show that a prescreening questionnaire prevents the defendant from obtaining a jury that represents a fair cross section of the community.
DISCUSSION
The Jury Selection Act ("Act"), 28 U.S.C. § 1861 et seq., states: "It is the policy of the United States that all litigants in Federal courts entitled to trial by jury shall have the right to grand and petit juries selected at random from a fair cross section of the community in the district or division wherein the court convenes." Id. § 1861.
In criminal cases, before the voir dire examination begins, or within seven days after the defendant discovered or could have discovered, by the exercise of diligence, the grounds therefor, whichever is earlier, the defendant may move to dismiss the indictment or stay the proceedings against him on the ground of substantial failure to comply with the provisions of [the Act] in selecting the grand or petit jury.
Id. § 1867(a). Defendant seeks to inspect juror hardship questionnaires from other cases, so that he may challenge the use of a prescreening hardship questionnaire, rather than in-court voir dire, to excuse *178 jurors who are unable to commit to a lengthy trial due to undue hardship.
Upon motion filed under 28 U.S.C. § 1867(a), the moving party shall be entitled to present in support of such motion "any relevant records and papers not public or otherwise available used by the jury commissioner or clerk, and any other relevant evidence." Id. § 1867(d). The contents of records or papers used by the jury commissioner or clerk in connection with the jury selection process shall not be disclosed, except as may be necessary in the preparation or presentation of such a motion. Id. § 1867(f). A litigant has an unqualified right to inspection of relevant materials used in jury selection, during the preparation and pendency of a motion challenging the selection procedures. Test v. United States, 420 U.S. 28, 30, 95 S. Ct. 749, 750, 42 L. Ed. 2d 786 (1975); United States v. Layton, 519 F. Supp. 946, 958-59 (N.D.Cal.1981). Nevertheless, this is the first time the court has been faced with this type of request.
Defendant does not challenge the court's discretion to excuse prospective jurors based on undue hardship. This discretion is provided for in the Act. See 28 U.S.C. § 1866(c)(1). He merely seeks to show that the use of a prescreening device will exclude a discernible class of jurors that would not be excused based on in-court voir dire. Thus, defendant seeks to challenge the procedure in the abstract, not based on an effect it has had on his particular jury panel. The defendant would not have standing to complain about the excusal of jurors in other cases. See Layton, 519 F.Supp. at 956; accord, United States v. Bearden, 659 F.2d 590, 601 (11th Cir.1981), cert. denied, 456 U.S. 936, 102 S. Ct. 1993, 72 L. Ed. 2d 456 (1982). Therefore, it is inappropriate to allow him to challenge a procedure unless it has been used to select his jurors and has, at least potentially, resulted in prejudice to the defendant. This court finds nothing in the Jury Selection Act that suggests that a criminal defendant may challenge minor aspects of proposed jury selection procedures in the abstract, before such procedures are used to select that defendant's grand or petit jury.
Moreover, since the excusal of jurors based on undue hardship is discretionary, the types and numbers of potential jurors excused by other judges in other cases will not have an impact on this court's ability to substantially comply with the requirement of a fairly representative jury. Counsel will have an opportunity to review and challenge any excusal that appears to have been granted without a sufficient showing of undue hardship. Therefore, counsel can prevent the excusal of a discernible class; and, if not satisfied, can challenge the jury panel once it has been selected.
CONCLUSION
This court denies the defendant's motion, without prejudice to the defendant's right to seek similar information relevant to the selection of his jury panel, once it has been selected.
IT IS SO ORDERED.
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549 A.2d 1058 (1988)
In re C.C.
No. 85-445.
Supreme Court of Vermont.
May 27, 1988.
Motion for Reargument Denied June 16, 1988.
Marc D. Brierre, Rutland County Deputy State's Atty., Rutland, for plaintiff-appellee.
Robert A. Clark, Vermont Legal Aid, Inc., Rutland, for defendant-appellant.
Before ALLEN, C.J., PECK, GIBSON and DOOLEY, JJ., and KEYSER, J. (Ret.), Specially Assigned.
GIBSON, Justice.
C.C. appeals a district court order finding her to be a person in need of treatment, and ordering her to undergo involuntary administration of medication for an indeterminate *1059 period of time. Because the controversy has become moot, we dismiss the appeal and vacate the order of the trial court.
On September 24, 1985, the trial court found C.C. to be suffering from mental illness, a finding not contested by C.C. The court went on to find C.C. to be a person in need of treatment, and ordered her to undergo involuntary administration of medication for an indeterminate period until advised by a physician that such a requirement was no longer necessary or appropriate. C.C. appealed, and the court's order was stayed pending resolution of the appeal.
On appeal, C.C. contends (1) that there was insufficient evidence to support the court's finding that she is a person in need of treatment, and (2) that the court's order is defective because of its lack of a 90-day time limit, as required by 18 V.S.A. § 7618. At oral argument, the deputy state's attorney represented to this Court that the State no longer desired to enforce the order and that it intended to withdraw the petition if the trial court decision is affirmed. The parties have been unable to resolve the matter between themselves, however. The State concedes that the order was defective in not including a 90-day time limit. C.C. contends the case is not moot because of the stigma attaching to her as a result of the court's findings and order.
In view of the position taken by the State, we are unable to perceive that any bona fide controversy still exists between the parties. See In re H.A., 148 Vt. 106, 108, 528 A.2d 756, 757 (1987) (case becomes moot when issues presented are no longer "live" or parties lack a legally cognizable interest in the outcome). Further, inasmuch as C.C. does not contest the adequacy of the court's findings that she was suffering from mental illness at the time of the hearing, any adverse collateral consequences accruing to her as a result of the trial court's findings are minimal. Because it does not appear that substantial rights of C.C. are involved, see Orr v. Orr, 122 Vt. 470, 473, 177 A.2d 233, 235 (1962) ("an issue will not be regarded as moot, although the passage of time has rendered some aspects of the controversy academic, if substantial rights and liabilities of the parties are affected by the order from which the appeal is taken"), and because of the lack of a "live" controversy, we shall dismiss the appeal as moot.
The September 24, 1985 order of the district court is vacated, and the appeal is dismissed.
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178 Cal. App. 4th 883 (2009)
THE PEOPLE, Plaintiff and Respondent,
v.
ALEXANDRE L. HOCHSTRASER, Defendant and Appellant.
No. H032765.
Court of Appeals of California, Sixth District.
October 27, 2009.
*886 Maribeth Halloran, under appointment by the Court of Appeal, for Defendant and Appellant.
Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Gerald A. Engler, Assistant Attorney General, Rene A. Chacon and Bruce Ortega, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
McADAMS, J.
A jury convicted defendant of first degree murder. (Pen. Code, § 187, subd. (a).)[1] Defendant's sole contention on appeal is that the trial court erroneously denied his pretrial motion to suppress evidence, including the victim's dismembered body parts, discovered as a result of the warrantless searches of his residence and his mother's car. We will affirm.
STATEMENT OF THE CASE
On June 2, 2006, an information was filed in Santa Clara County charging defendant with the murder of Dolores Gonzales. Defendant pleaded not guilty and filed an amended motion to suppress all evidence seized from his home and car on June 5, 2005. (§ 1538.5.) An evidentiary hearing on the motion was held on October 23, 2006. The court denied the motion in a written order filed on January 2, 2007. The jury was sworn to try the case on June 27, 2007, and returned its first degree murder verdict on July 17, 2007. On March 20, 2008, the trial court sentenced defendant to state prison for 25 years to life. Notice of appeal was timely filed.
STATEMENT OF FACTS
Facts Adduced at the Suppression Hearing[2]
On June 5, 2005, at approximately 9:46 p.m., a woman who identified herself as Christy Gonzales called the Santa Clara Police Department's *887 nonemergency number and spoke with a dispatcher. She said she lived in Sacramento[3] and gave the dispatcher her phone number. She told the dispatcher that her mother lived with a boyfriend, Alexandre L. Hochstraser, and their two-year-old son, Daniel, and gave the address. She said she had "just found out that there was some domestic violence that happened today and now my mom um, is unavailable; no one can find her and the boy is home with the father and I'm just wondering if there's anything um, I can do or you can do or some sort of a report can be filed, you know, on her behalf ...?" She added that a half-hour earlier, her grandmother had notified her that "they were in a physical fight and he did strike her." Christy said her grandmother had "been trying to get in contact with my mother all day." She had "no idea at all" where her mother might have gone, but no one had heard from her. The dispatcher informed Christy that somebody would "go out there and check on the child and they also um, see what we can do." Christy thanked the dispatcher.
Santa Clara Police Officer Liepelt was dispatched to conduct a welfare check on the child and arrived at the address at 10:06 p.m. Officer Jennifer Lamendola arrived at the address at 10:05 p.m. At that time, all Officer Liepelt knew was that "the reporting party could not reach the mother of the child. And apparently the child was supposed to be at the address with the father. And the reporting party wanted me to conduct a welfare check on the child, make sure it was okay." He also knew that the previous night the reporting party's mother had been involved in a domestic violence incident with the father of the child and that he was supposed to be at that address.
Officers Liepelt and Lamendola walked upstairs and found the apartment completely dark. The front door was secured and the blinds were shut, but one of the windows was open approximately one-half to one inch. There was no sound coming out of the apartment. For 30 to 40 seconds, Officer Liepelt banged on the front door with his flashlight, knocked on the window with his hand, repeatedly asked out loud if anybody was inside, and identified himself as Santa Clara police. After getting no response from anyone inside the apartment, he believed there was "most likely nobody inside." He called the reporting party, Christine Gonzales, from his cell phone.
*888 Christine Gonzalez identified herself as the daughter of Dolores Gonzales and the aunt of Daniel Gonzales.[4] Christine said that earlier that morning she had received a phone call from her grandmother who lives in the Hollister area. Her grandmother told her that Dolores had been involved in a domestic violence incident with her live-in boyfriend, defendant. Christine had tried to call Dolores several times on both the landline in the apartment and on Dolores's cell phone but had not reached her. According to Christine, this was extremely unusual, as her mother always had her cell phone with her and she had no mode of transportation, "so it was very suspicious that she could not reach her mom either at the apartment or on her cell phone." Defendant and Delores shared one car, a Volkswagen Beetle associated with defendant. Christine was concerned about her mother, Dolores, as well as Daniel, the two year old.
Officer Liepelt and Christine discussed whether she was going to come to the apartment. Christine said she lived in the Sacramento area and it would take her about two hours to arrive at the apartment with a key, but she indicated that she wanted him to continue his welfare check to see if anyone was in the apartment.
Officer Liepelt did not call Christine's grandmother.
The additional information Officer Liepelt received from Christine aroused his "suspicion that we needed to do a welfare check because of prior domestic violence that was reported the night before between Dolores and Alex" and because "[h]istorically, Santa Clara has a large percentage of prior domestic violence related homicides." One of his concerns was that someone might be seriously injured and incapacitated inside the apartment and unable to respond to the officers' attempts to make contact. This concern was "heightened" after Officer Liepelt spoke with Christine, and he felt it was necessary to investigate it fully before leaving the premises. Liepelt called and consulted with his supervisor, Sergeant Steve Brauer. Sergeant Brauer decided he would come over to assist.
Sergeant Brauer arrived at 10:30 p.m. Officer Liepelt told Brauer that "he and Officer Lamendola had received a call of a welfare check, in other words, to go check on the welfare of someone. And that, evidently, a family member had called our police department and said that they had not heard from their family member for several hours, and that that was very unusual. [¶] They hadn't been able to make phone contact or anything like that. And they asked that we go check." Officer Liepelt also told him that Dolores had not been *889 heard from all day, that there had been a domestic violence incident between Dolores and the father of her child the evening before, and that family members were also concerned about the welfare and whereabouts of the couple's two-year-old child. He also told Brauer that Dolores's daughter was en route to the Santa Clara residence from the Sacramento area, but that she would not arrive for about two hours. Based on everything he knew at that point, Sergeant Brauer made the decision to go in "[b]ecause there could have been someone injured or hurt inside that needed help" and he instructed Officer Liepelt to enter the apartment through the window. Sergeant Brauer considered entry into the residence urgent because "[t]he No. 1 thing was that it was unusual for the family not to have heard from [Dolores] in such a long time. They had just had a domestic incident the night before. And being that the window was slightly ajar, I figured we could get in with the least intrusion and do a quick search. That's pretty standard procedure." He did not consider waiting two hours for the daughter to arrive.[5]
About three minutes later, Officer Liepelt entered the apartment's living room by removing the screen from the already open window in front of the landing, and pushing it open. He then opened the front door to let the other two officers in. The apartment was "pitch dark."
The officers identified themselves as Santa Clara police officers. There was absolutely no response. Using their flashlights, they systematically searched the apartment from front to rear for any occupants inside, to check on their welfare. Inside the last bedroom checked, Officer Liepelt saw defendant sitting on a bed. The room was "completely dark" and the bedsheets were on the floor. There was a cold draft inside the room coming from an open window. A cell phone, which was turned off, was on the bed next to defendant's leg and there was a landline phone on a table next to the bed. When the police officers entered the room, defendant looked up and pulled a pair of earplugs from his ears; he looked surprised.
Officer Liepelt told defendant that they were there to conduct a welfare check of his girlfriend and his son. Since they were not in the apartment, Liepelt asked defendant about their whereabouts. Defendant said that Dolores was not home. He acknowledged that the previous night he and Delores had had an argument during which they pushed each other, she fell and cut her chin. He had redness on his face and cuts on his hands, which he said were *890 injuries he received during the argument. After the fight, each of them reported the incident to his or her family. Defendant said Dolores had left earlier that morning after the argument and he let her go.
He drove his son, Daniel, up to his mother's house in San Francisco that morning. He said he had not seen Dolores since that morning and that he had tried calling her on her cell phone once but she did not answer the phone. He said he dropped his car off and took his mother's Jetta. While the police were questioning defendant, the landline phone rang two or three times. Defendant made no attempt to answer it. The answering machine picked up the call, but Officer Liepelt could not hear what the caller said because the volume was all the way down.
According to Officer Liepelt, defendant's demeanor was withdrawn, emotionless, and unconcerned about Dolores's safety or welfare. Brauer described defendant's affect as "spacey." He testified: "I felt like he was almost like looking through me. It was weird. I just had a really weird feeling about his whole demeanor, it was very strange." When the police started asking him pointed questions, defendant "seemed very evasive and extremely vague about what had happened during the day, where [Dolores] might be." He began answering questions with questions; he never answered a question, he just repeated it.
Officer Earl Amos went to the apartment of his own accord, arriving at the apartment with Officer Eric Lagergren, a trainee, about five minutes after the others. Sergeant Brauer told him that they were doing a welfare check, looking for a female and a small child. Officer Amos began "poking around, looking to see if there's any evidence of anything" in plain view, which is one of the things he does whenever he enters a residence. As he walked through the apartment, he was struck by the smell of fresh bleach or cleanser and paint,[6] which was at odds with the unkempt condition of the apartment. He also noticed three or four Sawzall blades[7] sitting on the arm of the couch. One was used, as indicated by the fact that the painted area in the middle of the blade was all worn off. The others had no such wear. Sergeant Brauer noticed more blades on the kitchen table. The bathroom was clean and smelled very strongly of bleach.
*891 In the kitchen, Officer Amos located a small fanny pack in plain view on a small kitchen table. Sergeant Brauer was with Amos when he found it.[8] The zipper along the top was two-thirds to three-quarters of the way open and Officer Amos could see inside it a wallet of the type commonly used by females. Shining his flashlight inside the pack, Officer Amos could see a female's driver's license photo. He removed the wallet without unzipping the pack and determined that the driver's license belonged to Dolores. The pack also contained a cell phone, keys, ATM and credit cards, and some other personal items. He communicated this information to Sergeant Brauer.
Sergeant Brauer asked defendant "why Dolores would be gone without" her keys, identification, and phone. Defendant responded with "a blank look on his face and really didn't have an answer."
Sergeant Brauer asked defendant if the police could look inside the Jetta. Defendant asked why they wanted to look into it. Brauer explained that "we were investigating the disappearance of two people and we needed to be very thorough." Defendant responded that he would rather they not search the car.
Sergeant Brauer made the decision to look inside the Jetta, despite defendant's answer. One of the officers got a key to the car from defendant and gave it to Officer Amos.[9] Sergeant Brauer could see the car downstairs by looking out the window in the apartment. Officer Amos looked inside. There was a tarp on the floor and several Rubbermaid containers stacked on the rear seat, and one on the front seat. The containers were opaque. When Sergeant Brauer saw the containers, he wondered "why [defendant] had a bunch of plastic boxes." It reminded him of a case he had had less than a year before where he had discovered a dead female folded up inside a Tupperware bin found in a car parked at a gas station. The bins inside the Jetta were similar to the Tupperware bins in the prior case[10] and in both cases the bins contained plastic garbage bags. He made the decision to enter the Jetta and look inside the bins "[b]ecause we were looking for a woman and baby.... [¶] ... [¶] ... [S]he had been missing for several hours [and] all of her personal things and the fanny pack [were] sitting on the table, and the defendant [was] not knowing anything or acting like he didn't know anything about it, his evasiveness." Other factors that contributed to his decision to enter the car and view the bins included (1) the similarity of the Tupperware bins in the *892 Yon case; (2) the fact that defendant "wasn't acting ... like a concerned husband or boyfriend"; (3) the domestic violence incident the night before; (4) the fact that defendant did not want them to look in the car; (5) the fact that he claimed not to have heard the police banging on the door and announcing themselves; (6) the presence of the saw blades; and (7) the smell of chlorine bleach which "people use ... to clean up crimes scenes." "It wasn't just one thing, it was the totality of the situation." Sergeant Brauer wanted to make sure the woman or the baby was not there.
Sergeant Brauer instructed Officer Amos to enter the Jetta, which was unlocked. Officer Amos did so and then opened the snap-on top of a container that was 18 to 20 inches deep, 18 inches wide, and 30 inches long. Inside the container was a garbage bag, which he also opened. Inside the bag Officer Amos found "a mound of human flesh." He stopped searching and notified Sergeant Brauer who also looked inside and saw the human flesh of what looked like an adult.
Officer Amos shut the car door.
From the landing, Officer Liepelt watched as Amos opened the container. Liepelt could not see what was inside the container, but Sergeant Brauer told Officer Liepelt that he had found body parts. Sergeant Brauer instructed Officer Liepelt to handcuff defendant. Liepelt then walked back into the apartment and ordered Officer Lagergren to handcuff defendant.
Officer Liepelt called Ilsa Hochstraser, defendant's mother, on defendant's cell phone to check on Daniel's welfare. He identified himself as a police officer to defendant's mother and inquired about Daniel's whereabouts and well-being. Defendant's mother confirmed that Daniel was at her house in San Francisco. Officer Liepelt heard a child's voice in the background. He was not satisfied at that point that Daniel "was okay and was with her." He and Officer Crescini drove to Mrs. Hochstraser's residence in San Francisco "to make contact and check the welfare of the child." They arrived at her house about 12:45 a.m. the next morning. She invited them in. He told Mrs. Hochstraser only that he was conducting an investigation of an incident at the residence in Santa Clara and was at her house to check on Daniel's welfare. Daniel was sleeping on the couch; he had a fever and was not feeling well. Mrs. Hochstraser permitted the police to look around the house for evidence. They visually inspected defendant's Beetle at that time, and asked Mrs. Hochstraser for written consent to search her Jetta, which she gave. She said she and defendant had exchanged cars the day before so that he could move some belongings, and that he was supposed to have returned her car to her at 8:00 p.m. that evening. Officer Liepelt did not tell Mrs. Hochstraser that the police had already searched the Jetta, or that Dolores was dead, or that defendant was under arrest.
*893 Trial Court's Written Decision
After reciting the relevant facts presented at the preliminary hearing and the motion to suppress, the trial court found that (1) the warrantless entry into the apartment was not justified under the exigent circumstances exception to the warrant requirement of the Fourth Amendment because the police officers could not rely upon their prior experience with domestic violence arrests to justify the warrantless entry, and "the circumstances `fell short' of supplying `probable cause to believe there was someone in the apartment who was either in danger or dangerous to them,'" citing this court's opinion in People v. Ormonde (2006) 143 Cal. App. 4th 282 [49 Cal. Rptr. 3d 26]. The trial court also found that (2) the warrantless entry into the apartment was justified by the community caretaking exception to the warrant requirement, as explained in the plurality opinion authored by Justice Janice Rogers Brown in People v. Ray (1999) 21 Cal. 4th 464 [88 Cal. Rptr. 2d 1, 981 P.2d 928] (Ray). In addition, the trial court found that (3) defendant lacked standing to complain about the search of Dolores's fanny pack. Finally, the trial court found that (4) while conducting their welfare check for Dolores (and Daniel) inside the apartment, the police developed probable cause to believe that Dolores (or Daniel) had met with foul play and that evidence relating to their disappearance would be found in defendant's mother's car; thus, the search of the car and its containers was justified by the automobile exception to the warrant requirement. (California v. Acevedo (1991) 500 U.S. 565 [114 L. Ed. 2d 619, 111 S. Ct. 1982].) In a footnote, the trial court also concluded that the doctrine of inevitable discovery was inapplicable.
DISCUSSION
Defendant argues that (1) substantial evidence supports the trial court's finding that exigent circumstances did not exist; (2) the trial court erred in finding that the community caretaking exception to the warrant requirement applied here; (3) no other exception justified the warrantless entry into the apartment; (4) alternatively, if the warrantless entry was justified as an exercise of the community caretaking function, the search was illegally extended to a criminal investigation; (5) the automobile exception did not apply to the search of defendant's mother's car; (6) the exclusionary rule requires suppression of all the evidence; and (7) counsel was ineffective for failing to argue that the automobile exception was inapplicable here.
While this case was pending, our Supreme Court decided in People v. Rogers (2009) 46 Cal. 4th 1136 [95 Cal. Rptr. 3d 652, 209 P.3d 977] (Rogers), that exigent circumstances justified entry and search of storage rooms controlled by the defendant to look for the murder victim (the mother of the defendant's child), based on a missing person report made by the victim's *894 mother. Given the similarity of issues, we asked the parties to submit supplemental briefing on the Rogers case. For the reasons we discuss below, we now find that Rogers is controlling on the question whether the situation confronting the officers in this case gave rise to exigent circumstances.
As we explain below, in our view the entry and search of the apartment were justified by exigent circumstancesthe urgent need to locate Dolores and Daniel and verify their well-being. In addition, we find that by the time the police searched the car, they had developed probable cause to believe that it contained evidence of a crime relating to the disappearance of Dolores or Daniel. Therefore, we need not and do not address defendant's arguments concerning the reach of the exclusionary rule, the effectiveness of his trial counsel, or the applicability of the community caretaking function exception to the warrant requirement as described in Ray, supra, 21 Cal.4th at pages 471-472 (lead opn. of Brown, J.), or consent.[11] (See Rogers, supra, 46 Cal.4th at p. 1161, fn. 12 [having found exigent circumstances, no need to consider alternative justification theory of inevitable discovery].)
1. Standard of Review
"`When reviewing a ruling on an unsuccessful motion to exclude evidence, we defer to the trial court's factual findings, upholding them if they are supported by substantial evidence, but we then independently review the court's determination that the search did not violate the Fourth Amendment.'" (People v. Panah (2005) 35 Cal. 4th 395, 465 [25 Cal. Rptr. 3d 672, 107 P.3d 790] (Panah).) This means that we must measure the facts, as found by the trial court, against the constitutional standard of reasonableness for the search and/or seizure (People v. Leyba (1981) 29 Cal. 3d 591, 596-597 [174 Cal. Rptr. 867, 629 P.2d 961]) but we "decide for ourselves what legal principles are relevant, independently apply them to the historical facts, and determine as a matter of law whether there has been an unreasonable search and/or seizure." (People v. Miranda (1993) 17 Cal. App. 4th 917, 922 [21 Cal. Rptr. 2d 785]). We will affirm the trial court's ruling if correct on any theory of applicable law. (People v. Zapien (1993) 4 Cal. 4th 929, 976 [17 Cal. Rptr. 2d 122, 846 P.2d 704].)
California law requires that the reasonableness of searches and seizures undertaken by the police be reviewed under federal constitutional standards. (Rogers, supra, 46 Cal.4th at p. 1156, fn. 8.)
*895 II. Exigent Circumstances
(1) "The Fourth Amendment to the federal Constitution guarantees against unreasonable searches and seizures by law enforcement and other government officials. Because a warrantless entry into a home to conduct a search and seizure is presumptively unreasonable under the Fourth Amendment [citation], the government bears the burden of establishing that exigent circumstances or another exception to the warrant requirement justified the entry." (Rogers, supra, 46 Cal.4th at p. 1156, fn. omitted.)
"`[W]arrants are generally required to search a person's home or his person unless "the exigencies of the situation" make the needs of law enforcement so compelling that the warrantless search is objectively reasonable under the Fourth Amendment.'" (Brigham City v. Stuart (2006) 547 U.S. 398, 403 [164 L. Ed. 2d 650, 126 S. Ct. 1943] (Brigham City).) One such exigency is presented by "`"[t]he need to protect or preserve life or avoid serious injury ...."' [Citations.] Accordingly, law enforcement officers may enter a home without a warrant to render emergency assistance to an injured occupant or to protect an occupant from imminent injury." (Ibid.) Moreover, "[a]n action is `reasonable' under the Fourth Amendment, regardless of the individual officer's state of mind, `as long as the circumstances, viewed objectively, justify [the] action.' [Citation.] The officer's subjective motivation is irrelevant." (Id. at p. 404.)
(2) Our Supreme Court is in accord. "[T]he exigent circumstances doctrine constitutes an exception to the warrant requirement when an emergency situation requires swift action to prevent imminent danger to life. [Citation.]... In this regard, `"`[t]here is no ready litmus test for determining whether such circumstances exist, and in each case the claim of an extraordinary situation must be measured by the facts known to the officers.'"' [Citation.] Generally, a court will find a warrantless entry justified if the facts available to the officer at the moment of the entry would cause a person of reasonable caution to believe that the action taken was appropriate." (Rogers, supra, 46 Cal.4th at pp. 1156-1157, italics added.)
In Rogers, our Supreme Court concluded that "the circumstances known to Detective Carlson established an objective emergency requiring immediate action. On March 11, 1996, Carlson received a missing person report containing apparently reliable information that Beatrice Toronczak, the mother of defendant's young child, had been missing from defendant's apartment since approximately February 18, 1996. Carlson spoke directly with Slimak, the person making the report, and she confirmed the circumstances of Toronczak's disappearance as related to her by Toronczak's mother, Bartosz. Bartosz had tried unsuccessfully to locate Toronczak through *896 defendant and others, and she could not get defendant to report Toronczak as missing. Bartosz had previously observed defendant threaten to lock Toronczak in the basement storage area of the complex. Because Bartosz believed he meant it, she insisted that Slimak tell the authorities to look in that area for the daughter. Apart from Slimak and Bartosz, neighbors at the complex confirmed that Toronczak had not been seen for several weeks and that defendant controlled the keys to the storage rooms. The significance of the foregoing information was heightened because defendant gave Carlson wrong information about the length of time Toronczak had been missing, and he exhibited no concern over her unexplained disappearance. When Carlson mentioned defendant's threat to lock Toronczak in the basement storage area, defendant's neck started to visibly throb, adding to Carlson's concern. Defendant never denied making any threat, and he never denied that Toronczak was in any of the storage rooms when Carlson repeatedly sought permission to look there for her." (Rogers, supra, 46 Cal.4th at p. 1159.)
The Rogers court rejected the defendant's argument that "the circumstances here did not establish the requisite emergency because: (1) there were no obvious signs of an emergency, such as moans, groans, or chemical smells emanating from the storage rooms, and there had been no gunshots or fire; (2) the mere `possibility' that Toronczak was in the storage room against her will did not justify an emergency entry; (3) before his entry, Carlson did not believe he had probable cause to obtain a warrant; (4) the information regarding defendant's supposed threat to lock Toronczak in the basement was nonspecific and did not indicate a present emergency in the storage rooms; (5) Carlson's delays in investigating the storage rooms were not consistent with his professed belief that an emergency situation existed; and (6) even if the officers had probable cause to enter the storage rooms with a warrant, the failure to obtain a warrant made the inevitable discovery doctrine inapplicable. These contentions do not aid defendant's position. [¶] As explained, there is no bright-line rule for determining whether exigent circumstances exist; rather, courts must approach each claim of an extraordinary situation by looking at the totality of the particular circumstances known to the searching officer. [Citation.] Here, the absence of any information suggesting Toronczak was dead, defendant's noticeable lack of concern over the whereabouts of his child's mother, Bartosz's report of, and evident belief in, defendant's threat to lock Toronczak in the basement, defendant's physical reaction when Carlson mentioned that threat, and defendant's sole control over the storage rooms, all contributed to Carlson's sense of urgency about entering the storage rooms immediately to look for Toronczak, who might have been imprisoned there against her will. [¶] Because the totality of the circumstances must be considered, the fact that certain circumstances were not present here, such as certain noises or smells, or gunshots or fire, does not defeat the finding of an emergency. [Citation.] Moreover, the length of time Toronczak had been *897 reported as missing, i.e., three weeks instead of only hours or days, did not negate the emergency nature of the situation in light of the other circumstances known to Carlson. [Citation.] Finally, it makes no difference that Carlson could perhaps have acted even more quickly in trying to find Toronczak, or that he subjectively believed he could not have obtained a search warrant based only on the information he possessed prior to entering the three storage rooms. That is because the relevant inquiry remains whether, in light of all of the circumstances, there was an objectively urgent need to justify a warrantless entry." (Rogers, supra, 46 Cal.4th at pp. 1159-1160, fn. omitted.)
(3) The Rogers court relied on People v. Lucero (1988) 44 Cal. 3d 1006 [245 Cal. Rptr. 185, 750 P.2d 1342] (Lucero), People v. Wharton (1991) 53 Cal. 3d 522 [280 Cal. Rptr. 631, 809 P.2d 290] (Wharton), and Panah, supra, 35 Cal. 4th 395 for the proposition that "a warrantless entry may be appropriate when the police `"seek an occupant reliably reported as missing."'" (Rogers, supra, 46 Cal.4th at p. 1157.)
In Lucero, "two girls were reported missing after they went to a park and failed to return, and a fire of unknown origin had ignited in the defendant's house, located directly across the street from that park. [Citation.] After extinguishing the fire, firefighters discovered what appeared to be a large bloodstain on the living room carpet and decided it should be examined by law enforcement officers." (Rogers, supra, 46 Cal.4th at p. 1158; see Lucero, supra, 44 Cal.3d at p. 1012.) Two law enforcement officers entered the house without a warrant and viewed the bloodstain, and then immediately radioed their sergeant. When the sergeant arrived and entered the house, "he had just learned that the body of one of the missing girls was discovered in the dumpster of a neighborhood grocery store." (Rogers, at p. 1158; see Lucero, at pp. 1016-1017.) The sergeant advised the fire captain about the missing children and "`asked him to order his men into the burning house with oxygen equipment to look for the girls. [¶] The report of the bloodstain was another unusual circumstance adding weight to the suspicion that the house and the missing girls might be connected. The presence of blood also suggested that the children were in serious danger. At the time of [the sergeant's] entry the body of one of the girls had just been found, making it likely that the second girl was in imminent danger and making discovery of her location even more urgent.'" (Rogers, at pp. 1158-1159; see Lucero, at p. 1017.) The combination of circumstances "clearly created an emergency situation requiring swift action." (Lucero, at pp. 1017-1018; see Rogers, at p. 1159.)
In Wharton, two police officers entered an apartment the defendant shared with the murder victim, which eventually led to the discovery of the victim's *898 body. At the time they made entry, the officers knew that "earlier in the month, the police had responded to a domestic disturbance reported at the victim's residence; earlier on the day of the entry, the victim's neighbors had reported they had not seen her in two weeks, and a note had been left in the home asking the victim to call police, but no call was received; the police had received two calls expressing concern for her welfare; mail in the victim's mailbox indicated she had not been home; and [the officers] had gone to the home in response to a neighbor's report that someone had been banging on the victim's front door, and they found the door unlocked." (Rogers, supra, 46 Cal.4th at p. 1157; see Wharton, supra, 53 Cal.3d at pp. 576-577.) The Wharton court concluded that "the totality of these circumstances ... demonstrated an emergency situation sufficient to justify the officers' warrantless entry." (Rogers, at p. 1157; see Wharton, at p. 577.)
In Panah, the father of the eight-year-old murder victim called the police after being unable to locate his daughter at their apartment complex for about two hours. (Panah, supra, 35 Cal.4th at p. 411.) The police arrived shortly thereafter at 1:15 p.m. and set up a command post. "The first entry into defendant's apartment, unit 122, occurred sometime after 5:30 p.m. on November 20. Around 4:30 or 5:00 p.m., as part of a door-to-door search of the apartment complex, Officer Ruth Barnes and her partner knocked at the door of defendant's apartment and received no response, but she observed the television was on. She went back a second time at roughly 5:30 p.m. and knocked again. There was no response but she observed the television set was now off. A neighbor told her that a woman and a young man in his 20's lived in the apartment. Barnes reported her information to Sergeant Patton. Patton had independently learned that Nicole had been observed speaking to a male occupant of unit 122. Based on this information, Patton obtained a key from the manager and he and Barnes and two other officers entered the apartment to look for Nicole. The search lasted between five and 15 minutes. The officers checked the rooms upstairs and downstairs. Officer Barnes testified she did not search closets or look under beds while Sergeant Patton testified he checked closets. When they did not find Nicole, they left and the manager of the complex locked the door." (Id. at p. 465.) The Panah court concluded that the search was justified by exigent circumstances. It rejected the defendant's contention that "in addition to exigent circumstances, the police were required to have had probable cause to believe Nicole was in the apartment," stating that "the circumstances known to Sergeant Patton sufficiently established probable cause for the brief entry into defendant's apartment." (Id. at p. 466.)
In this case, the trial court did not have the benefit of the Supreme Court's analysis in Rogers when it concluded that the initial entry into defendant's apartment was not justified by exigent circumstances. The court stated: "Based upon the People's evidence, the justifications for the warrantless entry *899 were that the victim and her son had not been heard from since earlier that day and the victim had been involved in a domestic violence dispute the night prior. [¶] While one of the officers testified that Santa Clara has a disproportionate amount of domestic violence related homicides; `[n]evertheless, to say that the warrantless entry into defendant's home in this case was justified because of a police officer's past experiences with domestic violence arrests would be tantamount to creating a domestic violence exception to the warrant requirement. This we cannot do.' (People v. Ormonde[, supra,] 143 Cal.App.4th [at p.] 295 ....) [¶] Moreover, the circumstances `fell short' of supplying `probable cause to believe there was someone in the apartment who was either in danger or dangerous to them.' (People v. Ormonde, supra, 143 Cal.App.4th [at p.] 292.)"
The trial court distinguished two of the three "missing person" cases on which the Rogers opinion had relied. For example, it concluded that despite the fact that the victim in Wharton "had been involved in a domestic disturbance earlier in the month" and "had been missing for two weeks," Wharton was distinguishable because "[s]everal additional circumstances which are not present in the instant case supported the court's finding of exigency." Similarly, the trial court also distinguished Panah, where "a child victim vanished ... while playing around her apartment complex" and "[f]ollowing hours of searching, the police decided to warrantlessly enter the apartment where the victim had last been seen," because "in Panah, there were sounds of an on-and-off television in the apartment indicating that someone might be inside."
(4) In our view, the salient feature of Lucero, Wharton, Panah and Rogers remains that a reliable missing person report was made under circumstances known to the investigating officers which strongly suggested that the missing person was injured or worse, and would cause a reasonably cautious person to believe that the action taken was appropriate. In this case, at the time Sergeant Brauer made the decision to enter defendant's apartment in search of Dolores and Daniel, he knew that Officers Liepelt and Lamendola "had received a call of a welfare check, in other words, to go check on the welfare of someone. And that, evidently, a family member had called our police department and said that they had not heard from their family member for several hours, and that that was very unusual. [¶] They hadn't been able to make phone contact or anything like that. And they asked that we go check." Officer Liepelt also told him that Dolores had not been heard from all day, that there had been a domestic violence incident between Dolores and the father of her child the evening before, and that family members were also concerned about the welfare and whereabouts of the couple's two-year-old child. He also told Brauer that Dolores's daughter was en route to the Santa Clara residence from the Sacramento area, but that she would not arrive for about two hours. Based on everything he knew at that point, Sergeant Brauer *900 made the decision to go in "[b]ecause there could have been someone injured or hurt inside that needed help" and he instructed Officer Liepelt to enter the apartment through the window. Sergeant Brauer considered entry into the residence urgent because "[t]he No. 1 thing was that it was unusual for the family not to have heard from [Dolores] in such a long time. They had just had a domestic incident the night before." The urgency of the situation was underscored by the fact that Dolores's daughter was willing to travel for two hours in the middle of the night to make sure that Dolores and Daniel were safe, and that she was already en route. It was also underscored by the fact that, at 10:30 p.m., loud knocking and shouts of police did not arouse cries of surprise or alarm from a small child.
Focusing on Officer Liepelt's testimony that his subjective concern was heightened because "[h]istorically, Santa Clara has a large percentage of prior domestic violence related homicides," and relying on this court's opinion in Ormonde, the trial court erroneously concluded that finding exigent circumstances here would be tantamount to creating a domestic violence exception to the warrant requirement. We disagree. While the incident of domestic violence the night before in this case was certainly a factorand an important onejustifying the entry in this case, it was but one of many circumstances known to Sergeant Brauer which objectively contributed to the exigency calculus. By contrast, Officer Liepelt's subjective state of mind concerning Santa Clara's crime statistics was "irrelevant." (Brigham City, supra, 547 U.S. at p. 404.)
Furthermore, our Ormonde decision is inapposite here. In that case, the victim of the domestic violence incident was not missing. Rather, at the time the police entered the defendant's apartment, they knew that the domestic violence victim was safely away from the premises; there was no possibility that she could be inside the apartment injured, in need of emergency aid, and unable to call for help. Nor did the police officers articulate any reason to believe that other domestic violence victims or suspects were inside the apartment. (People v. Ormonde, supra, 143 Cal.App.4th at pp. 291-292.) Thus, the fact that an incident of domestic violence had occurred in the car outside the apartment contributed nothing to the police officers' justification for entering the apartment.
Here, as in Rogers, defendant lists a number of factors which, he asserts, militate against a finding of exigent circumstances, such as: (1) Christine called the regular police number, not 911; (2) Officers Liepelt and Lamendola concluded there was no one inside the apartment; (3) defendant's car was gone; (4) Officer Liepelt's call to Sergeant Brauer was not urgent; (5) Brauer did not arrive immediately but first finished the investigation on which he was working; (6) Liepelt had information that, as of the morning after the *901 domestic violence incident, Dolores was physically fine and was not requesting help; (7) the police did not check with the neighbors; (8) they did not call Dolores's mother; (9) they did not check to see if defendant had warrants, an arrest record, or was on probation; (10) they acted pursuant to a "policy" of entering when there is a chance someone is inside, it is an odd or unusual situation, the family has not heard from someone in a long time, there has been domestic violence, and the police can get in with the least intrusion to do a quick check.
We are not persuaded that any of these factors outweighed the factors favoring swift action to determine whether two missing persons, one of them a two-year-old child, were in need of emergency aid or were safe and sound inside their apartment. Rogers teaches that the totality of the circumstances must be considered, and the fact that certain circumstances were not present does not defeat the finding of an emergency. We note that here, the length of time Dolores had been reported missing was a matter of hours, rather than weeks, a fact which the Rogers court suggested enhances rather than negates the emergency nature of the situation. Likewise, it makes no difference here that Sergeant Brauer arrived possibly 15 minutes later than he could have, or that Christine did not call 911 to reach the Santa Clara police from Sacramento, "because the relevant inquiry remains whether, in light of all of the circumstances, there was an objectively urgent need to justify a warrantless entry." (Rogers, supra, 46 Cal.4th at pp. 1160-1161.) In our view, Rogers and the cases cited therein compel the conclusion that the totality of the circumstances here justified the entry into defendant's apartment to ascertain whether Dolores and Daniel were injured inside.
III. The Search of the House and the Car
Defendant challenges the search of the house and the car on two grounds. First, he argues that even if the initial entry was justified, subsequent searches of the apartment and the car were "illegally extended to a criminal investigation, beyond the limitations of any community caretaker justification to render emergency aid to someone inside the home." He also argues that the automobile exception to the warrant requirement did not apply to the search of defendant's mother's Jetta, which was parked in the carport below defendant's apartment. For the reasons explained below, we reject both arguments.
(5) Defendant's first argument presupposes that the entry here was justifiable pursuant to the community caretaker function exception as described in the lead Ray opinion, which holds that "[a]ny intention of engaging in crime-solving activities will defeat the community caretaking exception even in cases of mixed motives." (Ray, supra, 21 Cal.4th at p. 477.) However, we *902 have found that the entry was justified by exigent circumstances, which is not subject to any such restriction. On the contrary, "`[t]he need to protect or preserve life or avoid serious injury is justification for what would be otherwise illegal absent an exigency or emergency.' [Citation.] And the police may seize any evidence that is in plain view during the course of their legitimate emergency activities." (Mincey v. Arizona (1978) 437 U.S. 385, 392-393 [57 L. Ed. 2d 290, 98 S. Ct. 2408].)
Defendant relies on Michigan v. Clifford (1984) 464 U.S. 287 [78 L. Ed. 2d 477, 104 S. Ct. 641], for the proposition that the police here were required to cease their investigation of Dolores's and Daniel's location and welfare to secure a warrant "once police entered Mr. Hochstraser's home, surveyed the rooms, and determined no one was present who required emergency aid." We disagree. Clifford involved a second search of a house to investigate criminal arson after the initial firefighters had put out the blaze and left the premises. The Clifford plurality invalidated the second search, but exempted from exclusion all evidence that was seen in plain view. (Id. at pp. 294-295.)
Here, the evidence in "plain view" included the open window on a cold and windy night, which did not completely dispel a "chloriney" smell reminiscent of a crime scene cleanup; the spotless bathroom in an otherwise messy apartment; Sawzall blades in the kitchen and living room; the victim's fanny pack, cell phone, keys, and identification on the kitchen table; defendant's "spacey" demeanor and lack of concern for Dolores's welfare or whereabouts; the facial redness and cuts on his face and hands, and his admission that he had suffered them in a physical altercation with Dolores the previous night; and his disregard for the ringing telephone. Especially when coupled with defendant's evasive and contradictory statements, his stated desire that the police not search the car, and the fact that neither Dolores nor Daniel was safe and sound in the apartment, "it would have constituted a dereliction of duty for [the police] to turn around and abandon [their] investigation" of Dolores's and Daniel's whereabouts and welfare. (People v. Seminoff (2008) 159 Cal. App. 4th 518, 529 [71 Cal. Rptr. 3d 582].)
(6) "If there is probable cause to believe a vehicle contains evidence of criminal activity, United States v. Ross, 456 U.S. 798, 820-821 [72 L. Ed. 2d 572, 102 S. Ct. 2157] (1982), authorizes a search of any area of the vehicle in which the evidence might be found." (Arizona v. Gant (2009) 556 U.S. ___, ___ [173 L. Ed. 2d 485, 129 S. Ct. 1710, 1721].) Defendant does not actually argue, on appeal, that the police lacked probable cause to search defendant's mother's Jetta. Instead, he argues that probable cause was disputed in the trial court; that the trial court found the police had probable cause to believe that the car contained evidence of a crime, and that the trial court's findings are subject to substantial evidence review. He states: "The findings are not *903 challenged here because of the deferential standard of review." However, he maintains that a neutral and detached magistrate could have found otherwise, and that conclusion would also be supported by substantial evidence. To the extent defendant is arguing that probable cause to search the Jetta for evidence of a crime relating to the disappearance of Dolores and Daniel was lacking, we disagree. In our view, the evidence discovered by the police in plain view following their entry into the apartment supplied ample probable cause to search the car for evidence of a crime.
Relying primarily on language in California v. Carney (1985) 471 U.S. 386 [85 L. Ed. 2d 406, 105 S. Ct. 2066] (Carney), defendant next argues that the police were required to obtain a search warrant before searching the car in which Dolores's dismembered body parts were found, because the car was parked at or near defendant's apartment in a carport and was therefore not subject to the automobile exception to the warrant requirement.[12] Again, we disagree.
In Carney, police searched a Dodge Mini Motor Home that was parked in a downtown San Diego parking lot after receiving an unconfirmed tip that the motor home was being used in the exchange of marijuana for sex, watching a youth enter the motor home with the defendant and emerge after one and one-quarter hours, detaining the youth and learning from him that he had received marijuana in exchange for sexual contact with the defendant. The warrantless search yielded marijuana and paraphernalia used in drug sales. (Carney, supra, 471 U.S. at pp. 387-388.) The court "granted certiorari to decide whether law enforcement agents violated the Fourth Amendment when they conducted a warrantless search, based on probable cause, of a fully mobile `motor home' located in a public place." (471 U.S. at p. 387.) The court held that the Fourth Amendment was not violated because "the pervasive schemes of regulation, which necessarily lead to reduced expectations of privacy, and the exigencies attendant to ready mobility justify searches without prior recourse to the authority of a magistrate so long as the overriding standard of probable cause is met." (471 U.S. at p. 392.)
Defendant's argument depends entirely on the following sentence in Carney, which immediately follows the above quoted passage. "When a vehicle is being used on the highways, or if it is readily capable of such use and is found stationary in a place not regularly used for residential purposestemporary or otherwisethe two justifications for the vehicle exception come into play." (Carney, supra, 471 U.S. at pp. 392-393, italics added.) The court went on to say: "First, the vehicle is obviously readily mobile by the turn of an ignition key, if not actually moving. Second, there is a reduced *904 expectation of privacy stemming from its use as a licensed motor vehicle subject to a range of police regulation inapplicable to a fixed dwelling. At least in these circumstances, the overriding societal interests in effective law enforcement justify an immediate search before the vehicle and its occupants become unavailable. [¶] While it is true that respondent's vehicle possessed some, if not many of the attributes of a home, it is equally clear that the vehicle falls clearly within the scope of the exception laid down in Carroll [v. United States (1925) 267 U.S. 132 [69 L. Ed. 543, 45 S. Ct. 280]] and applied in succeeding cases. Like the automobile in Carroll, respondent's motor home was readily mobile. Absent the prompt search and seizure, it could readily have been moved beyond the reach of the police. Furthermore, the vehicle was licensed to `operate on public streets; [was] serviced in public places; ... and [was] subject to extensive regulation and inspection.' [Citation.] And the vehicle was so situated that an objective observer would conclude that it was being used not as a residence, but as a vehicle." (Id. at p. 393.)
Defendant argues: "Conversely, however, when a vehicle is not being used on the highways, and when it is found stationary at a place regularly used for residential purposes"like an apartment building's carport"the automobile exception does not `come into play.'" We disagree. Viewed the in context of the whole opinion, it is obvious that the Carney court did not intend such a meaning. As the discussion following the disputed sentence makes even more clear, the twin justifications which make the automobile exception applicable to a vehicle "come into play" whenever a car is capable of being used as a car, i.e., for transportation, regardless of whether it happens to be parked in a carport next to a residence, on a public street in front of a residence, or in a downtown parking lot, as in Carney.
(7) Rejecting the argument that the court should "distinguish his vehicle from other vehicles within the exception because it was capable of functioning as a home" (Carney, supra, 471 U.S. at p. 393) the court observed: "In our increasingly mobile society, many vehicles used for transportation can be and are being used not only for transportation but for shelter, i. e., as a `home' or `residence.' To distinguish between respondent's motor home and an ordinary sedan for purposes of the vehicle exception would require that we apply the exception depending upon the size of the vehicle and the quality of its appointments. Moreover, to fail to apply the exception to vehicles such as a motor home ignores the fact that a motor home lends itself easily to use as an instrument of illicit drug traffic and other illegal activity.... [¶] Our application of the vehicle exception has never turned on the other uses to which a vehicle might be put. The exception has historically turned on the ready mobility of the vehicle, and on the presence of the vehicle in a setting that objectively indicates that the vehicle is being used for transportation. These two requirements for application of the exception ensure that law *905 enforcement officials are not unnecessarily hamstrung in their efforts to detect and prosecute criminal activity, and that the legitimate privacy interests of the public are protected. Applying the vehicle exception in these circumstances allows the essential purposes served by the exception to be fulfilled, while assuring that the exception will acknowledge legitimate privacy interests." (Carney, supra, 471 U.S. at pp. 393-394, fn. omitted.) In a footnote, the court declined to decide whether the "automobile exception" should apply "to a motor home that is situated in a way or place that objectively indicates that it is being used as a residence. Among the factors that might be relevant in determining whether a warrant would be required in such a circumstance is its location, whether the vehicle is readily mobile or instead, for instance, elevated on blocks, whether the vehicle is licensed, whether it is connected to utilities, and whether it has convenient access to a public road." (Id. at p. 394, fn. 3.)
In this case, defendant argues that the car was not "mobile or even potentially mobile because the police had the key." In our view, the car was "mobile" within the meaning of Carney. It can be inferred from the record that defendant's mother's car was an ordinary sedan, subject to governmental regulation and capable of being used as transportation on public streets. The automobile exception to the warrant requirement was fully applicable to the car in which Dolores's dismembered body was found.
Defendant argues that because the automobile exception to the warrant requirement was not met, the prosecution was required to show that exigent circumstances existed to search the car, which it did not do. For the reasons explained above, we find that the automobile exception applies and no warrant or exigent circumstances were required to search the car.[13]
CONCLUSION
(8) Exigent circumstances justified a warrantless police entry into defendant's apartment to determine whether a missing domestic violence victim and her two-year-old child were injured or safe. The search of defendant's mother's car, in which the domestic violence victim's dismembered body parts were found, was amply supported by probable cause to believe that evidence of a crime would be found therein and was subject to the automobile exception to the warrant requirement.
*906 DISPOSITION
The judgment is affirmed.
Bamattre-Manoukian, Acting P. J., and Duffy, J., concurred.
NOTES
[1] Unless otherwise indicated, all statutory references are to the Penal Code.
[2] A transcript of the original call to the Santa Clara Police Department's dispatcher was admitted into evidence at the hearing pursuant to the parties' stipulation. At various points during the hearing, the witnesses' memories were refreshed with, or impeached by, the preliminary hearing transcript. Because the facts developed at trial were not before the court on the motion to suppress, we do not summarize them.
[3] A caller could not have reached the Santa Clara Police Department by calling "911" from Sacramento.
[4] To avoid any confusion occasioned by use of the same surname, we will hereafter refer to the members of the Gonzales family by their first names; no disrespect is intended.
[5] Sergeant Brauer explained that at this juncture, he considered the options of kicking in the door or waiting two hours for the family member to arrive. However, "normally" or "usually" the police would not wait two hours to conduct a welfare check. He had been in situations where "people inside were on the floor injured and couldn't get to the door, couldn't make sounds...." He did not have to break down the door because the window was open and they could get in easily.
[6] Sergeant Brauer also smelled a "chloriney [sic] kind of cleanser type smell" throughout the apartment after Officer Liepelt pointed it out to him.
[7] Officer Amos explained that "[a] Sawzall blade is a saw blade approximately six to eight inches long, one end of that blade attache[s] to a device commonly called a Sawzall, but essentially, it's a reciprocating saw, instead of going round and round, goes back and forth. These blades attach by a bolt hole on the end of each blade and it has a regular saw blade hand on it with the serrated teeth."
[8] At the preliminary hearing, Sergeant Brauer testified that he was the one who "`found a fanny pack with the victim's identification.'" At the suppression hearing, Sergeant Brauer explained that Officer Amos was with him when he found the fanny pack, and that he (Brauer) may have opened it all the way after finding it "roughly half" unzipped.
[9] Officer Amos recalled that Liepelt gave him the key, but Liepelt recalled that it must have been one of the other officers at the scene and Sergeant Brauer could not recall if there was a key.
[10] The prior case was Santa Clara case No. 04-7719 and the victim was Connie Yon.
[11] We also requested supplemental briefing on the question whether the entry and search of the apartment were justified by consent of a keyholder.
[12] Because we choose to address defendant's contention on the merits, we need not decide whether counsel was ineffective for failing to explicitly so argue in the trial court.
[13] In view of our disposition of the issues, we need not and do not decide whether the inevitable discovery doctrine applies here.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2260319/
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178 Cal. App. 4th 1460 (2009)
CALIFORNIA GROUNDWATER ASSOCIATION, Plaintiff and Appellant,
v.
SEMITROPIC WATER STORAGE DISTRICT, Defendant and Respondent.
No. F056823.
Court of Appeals of California, Fifth District.
November 9, 2009.
As modified November 19, 2009.
*1461 Lanahan & Reilley, Scott L. Steever and Keith T. Uland for Plaintiff and Appellant.
Weinberg, Roger & Rosenfeld, Barry E. Hinkle, Patricia M. Gates and Roberta D. Perkins for Construction Industry Force Account Council as Amicus Curiae on behalf of Plaintiff and Appellant.
*1462 Law Offices of Young Wooldridge, Ernest Conant, Scott K. Kuney, Phillip Hall and Alan Doud for Defendant and Respondent.
Downey Brand, Kevin M. O'Brien, Maya R. Ferry and Steven P. Saxton for Association of California Water Agencies as Amicus Curiae on behalf of Defendant and Respondent.
OPINION
VARTABEDIAN, Acting P. J.
This is an appeal from judgment entered against plaintiff and appellant California Groundwater Association after the court sustained the demurrer of defendant and respondent Semitropic Water Storage District. Appellant contends the trial court erred in concluding that Water Code section 13750.5 does not apply to public entities such as respondent. For reasons that follow, we agree with appellant: If respondent "undertake[s] to dig, bore, or drill a water well, cathodic protection well, groundwater monitoring well, or geothermal heat exchange well, to deepen or reperforate" any such well, or "to abandon or destroy" any such well, "the person responsible for that construction, alteration, destruction, or abandonment [must] possess[] a C-57 Water Well Contractor's License." (Wat. Code, § 13750.5.)[1] Accordingly, we reverse the judgment.
Facts and Procedural History
This appeal comes to us after the trial court sustained respondent's demurrer and appellant declined to amend its complaint. "`We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.'" (Blank v. Kirwan (1985) 39 Cal. 3d 311, 318 [216 Cal. Rptr. 718, 703 P.2d 58].)
Appellant is a nonprofit corporation; its members are involved in various aspects of water well drilling, as well as installation and maintenance of related equipment for production of water from wells. Respondent is a water storage district formed pursuant to the California Water Storage District Law, Water Code section 39000 et seq. (See generally Johnson v. Arvin-Edison Water Storage Dist. (2009) 174 Cal. App. 4th 729, 733-734 [95 Cal. Rptr. 3d 53].) Prior to 2007, respondent hired licensed contractors to drill its water wells through a competitive bidding process. Such contractors held the necessary C-57 well drilling license issued by the Contractors' State License *1463 Board pursuant to the Contractors' State License Law, Business and Professions Code section 7000 et seq. Beginning in 2007, respondent began using its employees to perform these well services; none of these employees held a C-57 license.
Appellant sued respondent for declaratory and injunctive relief. After the court denied appellant's application for a preliminary injunction, respondent filed its demurrer to the complaint. After hearing, the court determined as a matter of law that appellant did not and could not state a cause of action. Appellant did not request leave to amend its complaint. The court entered judgment of dismissal, and appellant filed a timely notice of appeal.
Discussion[2]
A. Statutory Language.
Division 7 of the Water Code is known as the Porter-Cologne Water Quality Control Act (hereafter the water quality act). (Wat. Code, § 13020.) The water quality act was adopted in 1969 to address conservation, control, and utilization of water resources in the state and to protect the quality of such water. (Id., § 13000; see generally Stats. 1969, ch. 482, § 18, p. 1051.) The water quality act required any person drilling or performing a wide range of other activities in conjunction with, inter alia, water wells to file with California's Department of Water Resources a notice of intent to perform those activities. (Wat. Code, former § 13750, repealed by Stats. 1996, ch. 581, § 4, p. 3205.)[3] The water quality act also required every such person to file a report with the department within 30 days after the well-related activities. (Wat. Code, former § 13751.) These requirements were applicable to "every person" who performed the well-related activities. A "person" is defined to "include[] any city, county, district, the state, and the United States, to the extent authorized by federal law." (Id., § 13050, subd. (c).) Respondent concedes it is a "person" required to file notices of intent to drill and completion reports under the water quality act.
*1464 (1) In 1986, the Legislature added Water Code section 13750.5 to the water quality act. (See Stats. 1986, ch. 1373, § 2.5, p. 4908.) Section 13750.5 provides that "no person" shall undertake the specified well-related activities "unless the person responsible for that construction, alteration, destruction, or abandonment possesses a C-57 Water Well Contractor's License."
On its face, then, and read in the context of the water quality act, Water Code section 13750.5 plainly requires respondent to engage in the specified well-related activities only when the individual responsible for the activities is a licensed water well contractor.
(2) C-57 licenses are issued by the Contractors' State License Board pursuant to the Contractors' State License Law, Business and Professions Code section 7000 et seq. (hereafter the licensing law).[4] The licensing law, in general, applies to contractors who engage in a wide variety of construction activities, as set forth in detail at section 7026 (defining "contractor"). Again speaking generally, the licensing law is intended to protect the public from incompetent and unreliable contractors. (Rushing v. Powell (1976) 61 Cal. App. 3d 597, 604 [130 Cal. Rptr. 110].)
The licensing law contains a number of exceptions to the requirement that contracting work be performed only by licensed contractors. (See §§ 7040-7054.5.) The exceptions involved in the present appeal are set forth in sections 7040, 7044, and 7051, which are set forth in full in the accompanying footnote.[5] All three exceptions begin with the phrase, "This chapter does not apply ...."
*1465 (3) Respondent contends it is exempted from the licensing law by each of the three exceptions, and the parties devote much of their briefing to parsing the exemptions. We think, however, this exercise is misguided. Whether an exception is or is not applicable to respondent, that exemption would, at most, excuse respondent from the requirements of "this chapter," that is, the licensing law. The requirement that well-related activity be conducted or supervised by a licensed well driller, set forth in Water Code section 13750.5, is not imposed by the licensing law; it is, instead, imposed by the Water Code. Water Code section 13750.5 contains no exceptions from its requirements, and it does not reference the exceptions set forth in the licensing law. *1466 Accordingly, we hold that the exceptions set forth in the licensing law, whatever might be their effect on respondent for work that is subject to the licensing law, do not provide an exception to the unequivocal mandate of the Water Code.
B. The Communications Relay Case.
Communications Relay Corp. v. County of Los Angeles (2005) 130 Cal. App. 4th 162 [30 Cal. Rptr. 3d 1] involved a property owner who sought to force the county to issue a well drilling permit even though the work was not to be performed by a licensed well driller. The plaintiff contended the wells would be built on its own property and that it was, therefore, exempt from Water Code section 13750.5's licensing requirement pursuant to the exemption of section 7044. (130 Cal.App.4th at p. 165.) The court rejected this contention. (Id. at p. 169.)
The Communications Relay Corp. court noted that permitting "unlicensed (and presumably inexperienced or unqualified) property owners" to build wells would undermine the express legislative purpose in enacting the water quality act, namely, to protect the public health and welfare by preventing underground water from being contaminated due to improperly constructed or abandoned wells. (Communications Relay Corp. v. County of Los Angeles, supra, 130 Cal.App.4th at p. 169.) This, the court stated, was a different legislative purpose from the consumer protection rationale of the licensing law. It was this consumer protection rationale that supported the property owners' exemption of section 7044: "[P]roperty owners who perform the construction work themselves on their own property do not need this protection ...." (130 Cal.App.4th at p. 168.) The same rationale did not support application of the exemption to Water Code section 13750.5 because groundwater contamination can directly affect public health far beyond the boundaries of an individual's property.
(4) The court also concluded various other rules of statutory construction supported its determination that section 7044 did not create an exemption from the requirements of Water Code section 13750.5. In particular, Water Code section 13750.5 was enacted far later than section 7044 and generally "the latest statutory expression prevails." (Communications Relay Corp. v. County of Los Angeles, supra, 130 Cal.App.4th at p. 169.) Further, "a specific statute (such as [Water Code] section 13750.5, which applies specifically to the construction of water wells) prevails over a general statute (such as section 7044[], which applies generally to all kinds of construction)." (Ibid.)
Respondent contends Communications Relay Corp. v. County of Los Angeles, supra, 130 Cal. App. 4th 162 is not relevant to the present case. *1467 Respondent argues: "Relay actually decided the narrow, unrelated question of the applicability of the landowner exemption under the License Law (Section 7044(a)) with regard to private landowners. Importantly, Relay did not decide the current issue of whether a water storage district owning property for public purposes is required to possess a License, when constructing wells in its official governmental capacity under independent statutory authority to implement its water storage district project."
The underlying premise of the Communications Relay Corp. decision, it seems to us, is applicable whether the well driller is a public or a private entity: as a physical reality, the public health consequences of groundwater contamination extend far beyond the property of the well owner regardless of what form of legal entity owns the well.
C. Sovereign Powers.
Respondent contends that requiring it to comply with Water Code section 13750.5 violates its sovereign powers as a water storage district, that another provision of the Water Code adopts by reference the licensing exceptions contained in the licensing law, and that requiring it to obtain a well driller's license creates absurd results. None of these contentions has merit, and we address each only briefly.
Requiring water storage districts, together with all other political and governmental entities specified as "persons" in Water Code section 13050, subdivision (c), to perform well-related activity only under the supervision of a licensed well driller does not infringe on respondent's "governmental rights and authorities." Respondent, citing cases such as Nutter v. City of Santa Monica (1946) 74 Cal. App. 2d 292, 300-301 [168 P.2d 741], argues that "general" words of a law should not be construed to include governmental entities unless that construction is "clear and indisputable" in the text of the law. The primary problem with this contention is that the definition of "persons" does not constitute "general language" that might broadly sweep in governmental entities. (See Johnson v. Arvin-Edison Water Storage Dist., supra, 174 Cal.App.4th at p. 738.) Instead, Water Code section 13050, subdivision (c), is specific in applying the provisions of the water quality control act to governmental entities: "`Person' includes any city, county, district, the state, and the United States, to the extent authorized by federal law." The legislative intent to apply the requirements of the water quality act to governmental entities could hardly be more clear and indisputable.[6]
*1468 D. Ad Hoc Exemptions.
Respondent also contends the application of Water Code section 13750.5 in accordance with its plain terms will be inconvenient, time consuming, and unnecessary. It asserts that it already builds its wells "in strict accordance with detailed well standards and specifications" and that its projects are designed and overseen by licensed engineers. Respondent does not cite any authority, however, for the proposition that this court is authorized to grant exemptions from statutory licensing requirements on the basis that the party is doing good, careful work even without the applicable license. Similarly, respondent cites no authority for the proposition that this court can substitute its judgment for that of the Legislature and permit licensed engineers to supervise well drilling activities when the Legislature has specifically required that such supervision be provided by C-57 licensees.
Finally, respondent makes no serious attempt to distinguish the licensing requirement of Water Code section 13750.5 from the permit and reporting requirements that bracket the licensing requirement in the water quality act at the time Water Code section 13750.5 was enacted. (See Wat. Code, former §§ 13750, 13751.) Respondent admits it complies with those requirements; it apparently does not find them an infringement on its governmental authority. Not only do we fail to see any statutory basis for distinguishing among the permit, licensing, and reporting requirements, but we fail to see how the licensing requirement is more onerous than the other two requirements.
E. Water Code Section 13801.
Respondent contends that Water Code section 13801, amended in the same legislative session that Water Code section 13750.5 was enacted, effectively incorporates into the water quality act the licensing exemptions contained in the licensing law. As amended in 1986, Water Code section 13801, subdivision (b), requires the State Water Resources Control Board, by a particular date, to adopt a "model water well ... ordinance implementing the standards for water well construction, maintenance, and abandonment contained in Bulletin No. 74-81 of the department. If the model ordinance is not adopted by this date, the state board shall report to the Legislature as to the reasons for the delay. The state board shall circulate the model ordinances to all cities and counties." (See Stats. 1986, ch. 1152, § 4, p. 4134.) (Wat. Code, § 13801 was further amended in 1991, but that amendment did not affect subd. (b).)
One provision of Bulletin No. 74-81, according to a secondary source submitted by respondent to the trial court, states: "[Except as otherwise provided, the following standards shall apply:] Section 6. Well Drillers. [¶] The construction, alteration, or destruction of wells shall be performed by *1469 contractors licensed in accordance with the provisions of [the licensing law] unless exempted by that act." Accordingly, respondent contends, the Legislature has incorporated the licensing law exemptions into the Water Code.
In rejecting this contention, we first note that the court rejected the same argument in Communications Relay Corp. v. County of Los Angeles, supra, 130 Cal.App.4th at page 169: "[W]hen the Legislature codified the standards for water well construction in 1986 [in Water Code section 13750.5], it did not include any exemption, and the [Department of Water Resources's] standard cannot operate to provide one."
Further, the Legislature did not adopt Bulletin No. 74-81 as state law. Instead, it directed the Department of Water Resources to provide a model ordinance for consideration by local authorities. While the model ordinance was directed by the Legislature to set forth minimum standards for well construction, the local authority was entitled to adopt an ordinance that "meets or exceeds" the Bulletin No. 74-81 standards. Thus, the bulletin standards were intended to provide a flexible baseline for local ordinances. Indeed, the record indicates the department has "supplemented" the requirements of Bulletin No. 74-81 with additional provisions in Bulletin No. 74-90, and the current administrative standard is a compilation of the two bulletins. If the administrative bulletin had been enacted as statutory law, the department would have lacked legislative authorization to amend the bulletin.
Finally, Bulletin No. 74-81 is a 90-page document filled with technical specifications for water wells, published five years prior to the enactment of Water Code sections 13750.5 and 13801. (See Water Well Standards: State of California (Dec. 1981) Dept. of Water Resources [as of Nov. 9, 2009.] It would render meaningless the broad and unequivocal requirement of Water Code section 13750.5 if we were to assume, based on a single sentence from deep within the document, that the Legislature intended exemptions from that section without any statement concerning such exemptions in Water Code section 13750.5 itself.
F. Inclusion of Government Entities Is Not an "Absurd Result."
Respondent contends its inclusion in Water Code section 13750.5 would produce an absurd result, indicating that the Legislature could not have intended such a result. Respondent contends that it is not eligible for a well driller license under the licensing law because it is a government entity, and to require it to obtain such a license would be to require the impossible. Respondent, however, misreads Water Code section 13750.5. That section applies to any "person," including respondent, but the section is satisfied if *1470 "the person responsible" for the activity is licensed. There is no statutory requirement that the person "undertaking" well-related activity and the licensed person "responsible" for that activity be the same individual or entity. Had the Legislature intended that the first "person" and the second "person" be identical, it could easily have required that "no person" undertake well-related activity unless "such person" is licensed. We conclude Water Code section 13750.5 would be satisfied if respondent's supervisor of construction were licensed, just as it would be if respondent hired a licensed contractor to perform the activity.
Disposition
The judgment is reversed. Appellant is awarded costs on appeal.
Levy, J., and Kane, J., concurred.
NOTES
[1] The allegations of the present complaint involve water wells, and not the other forms of drilling and construction mentioned in Water Code section 13750.5.
[2] This court previously permitted the Construction Industry Force Account Council (in support of appellant) and the Association of California Water Agencies (in support of respondent) to file amicus curiae briefs, to which the parties have filed answer briefs. The amicus curiae briefs present many of the same arguments as have the parties, sometimes in expanded form or framed differently. Other arguments are beyond the scope of this case or are otherwise not pertinent. Although we have considered the amicus curiae briefs, we do not find it necessary specifically to discuss those briefs in this opinion.
[3] Although the notice requirement was repealed in 1996, a similar permitting requirement remains in effect through the Kern County well ordinance. (Kern County Mun. Code, § 14.08.120.)
[4] Further undesignated section references are to the Business and Professions Code.
[5] Section 7040 states:
"(a) This chapter does not apply to an authorized representative of the United States government, the State of California, or any incorporated town, city, county, irrigation district, reclamation district or other municipal or political corporation or subdivision of this state when the entity or its representative is acting within the scope of the entity's or representative's official capacity.
"(b) Nothing in this section authorizes the entity or [its] authorized representative thereof either to enter into or authorize a contract with an unlicensed contractor for work which is required by this chapter to be performed by a licensed contractor."
Section 7044 states:
"This chapter does not apply to any of the following:
"(a) An owner of property, building or improving structures thereon, or appurtenances thereto, who does the work himself or herself or through his or her own employees with wages as their sole compensation, provided none of the structures, with or without the appurtenances thereto, are intended or offered for sale.
"(b) An owner of property, building or improving structures thereon, or appurtenances thereto, who contracts for such a project with a subcontractor or subcontractors licensed pursuant to this chapter.
"However, this exemption shall apply to the construction of single-family residential structures only if four or fewer of these structures are intended or offered for sale in a calendar year. This limitation shall not apply if the owner of property contracts with a general contractor for the construction.
"(c) A homeowner improving his or her principal place of residence or appurtenances thereto, provided that all of the following conditions exist:
"(1) The work is performed prior to sale.
"(2) The homeowner has actually resided in the residence for the 12 months prior to completion of the work.
"(3) The homeowner has not availed himself or herself of the exemption in this subdivision on more than two structures more than once during any three-year period.
"In all actions brought under this chapter, proof of the sale or offering for sale of any such structure by the owner-builder within one year after completion of same constitutes a rebuttable presumption affecting the burden of proof that such structure was undertaken for purposes of sale. Except as otherwise provided in this section, proof of the sale or offering for sale of five or more structures by the owner-builder within one year after completion constitutes a conclusive presumption that the structures were undertaken for purposes of sale.
"In addition to all other remedies, any (1) licensed contractor, or association of contractors, (2) labor organization, (3) consumer affected by the violation, (4) district attorney, or (5) the Attorney General, shall be entitled to seek injunctive relief prohibiting any violation of this chapter by an owner-builder who is neither licensed nor exempted from licensure by this section or any other section according to the provisions specified in Section 7028.3 or Section 7028.4. The plaintiff in any such action shall not be required to prove irreparable injury and shall be entitled to attorneys' fees and all costs incurred in the prosecution of such action, provided the plaintiff is the prevailing party. The defendant in any such action, shall be entitled to attorneys' fees and all costs incurred in the defense against such action, provided the defendant is the prevailing party.
"The registrar pursuant to Section 7090 may take disciplinary action as provided in this chapter against any person whenever the grounds or cause for disciplinary action arose upon any project undertaken by him or her as a licensee licensed pursuant to this chapter.
"Any person, firm, or corporation which has violated Section 7028 by engaging in contracting work as an owner-builder without having a license or an exemption from licensure under this section or any other section shall not be entitled to become a licensee under this chapter for a period of one year following the violation."
Section 7051 states:
"This chapter does not apply to a licensed architect or a registered civil or professional engineer acting solely in his or her professional capacity or to a licensed structural pest control operator acting within the scope of his or her license operating with the scope of the Geologist and Geophysicist Act."
[6] Nor, of course, does the general grant of powers to water storage districts to "acquire, improve, and operate the necessary works for the storage and distribution of water" (Wat. Code, § 43000) permit a water storage district to ignore specifically applicable restrictions on the manner in which it exercises those powers.
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228 N.J. Super. 314 (1988)
549 A.2d 871
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
CHARLES N. LATORRE, DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Argued October 4, 1988.
Decided October 20, 1988.
*315 Before Judges PRESSLER and SCALERA.
Patrick X. Amoresano argued the cause for appellant (Beattie, Padovano, Breslin, Dunn and Kafafian, attorneys, Patrick X. Amoresano, on the letter brief).
Terri Del Greco, Assistant Prosecutor, argued the cause for respondent (Larry J. McClure, Bergen County Prosecutor, attorney, Susan W. Sciacca, Assistant Prosecutor, of counsel, Terri Del Greco, on the letter brief).
The opinion of the court was delivered by SCALERA, J.A.D.
The issue here is whether a police officer's failure to sign a summons issued to defendant for driving while intoxicated renders it fatally defective.
On April 25, 1987 at 12:54 a.m., defendant Charles N. Latorre was arrested in the Borough of Glen Rock. Two summonses were issued to him by a Borough police officer at the time of his arrest. Summons No. A131135 cited him for a violation of N.J.S.A. 39:4-50, driving while intoxicated (DWI). Summons *316 No. A131136 charged him with violation of N.J.S.A. 39:4-129, leaving the scene of an accident. Both were filled out by the same police officer; both indicated a court return date of April 28, 1987. On No. A131135 (DWI) however, the officer did not append his signature but he did write in all of the other pertinent information including his "Officer's I.D. No." which he indicated to be "64." On A131136, he affixed his signature, (which was hardly legible), and again indicated his identification number.
A few hours later, at 3:50 a.m., Latorre was again arrested by another Glen Rock police officer, who issued two summonses properly charging him with another DWI offense and speeding.
Latorre's attorney entered an appearance for him on April 24, 1987 and requested an adjournment of the scheduled court date in order to "receive discovery, [and] investigate the matter." Thereafter he entered pleas of not guilty on defendant's behalf by mail and acknowledged a new trial date of June 9, 1987. In a letter brief filed on June 12, 1987 he confirmed that he had appeared in court on June 9, 1987 and had the opportunity at that time to talk to both of the complainant officers who had issued the four summonses. In that letter he also briefed the legal issue concerning the lack of a signature on the DWI summons. On June 23, 1987 defendant's motion to dismiss the one DWI summons due to the lack of the officer's signature was considered by the municipal court judge. After hearing oral arguments, the court reserved decision. On July 17, 1987 it notified defendant's attorney that the motion had been denied. The matter was scheduled for trial on August 4, 1987, at which time defendant was allowed to enter a plea of guilty to the other three charges and a "conditional "plea of guilty" to the first DWI charge, reserving the right to appeal from the *317 denial of his motion to dismiss.[1]
The defendant appealed the denial to the Law Division of the Superior Court which upheld the municipal court judge's decision, reasoning that the issuing police officer had "appropriately issued a summons by physically writing out, stamping his badge number if you will ... and handing it to a defendant as they tuck him in the police car, to drive him home."
On this appeal defendant urges that we find that the DWI summons was so defective because of the officer's failure to sign it that it deprived the court of both "personal and subject matter jurisdiction." The State contends that such an omission "is merely a technical insufficiency that does not affect jurisdiction."
Jurisdiction to try motor vehicle violations (including DWI) is conferred upon the municipal courts pursuant to N.J.S.A. 2A:8-21a and their decisions are reviewable by de novo review in the Superior Court. N.J.S.A. 2A:3-6; R. 3:23-1 et seq. When a police officer observes a violation of any motor vehicle law he may issue and serve a summons upon the alleged violator instead of physically arresting him. N.J.S.A. 39:5-25. The form of the summons to be so issued has been made uniform by the Administrative Director of the Courts pursuant to R. 7:3-1 and R. 7:6-1. That approved form calls for the signature of the "complainant" as well as an "officer's I.D. No."
With respect to traffic offenses, R. 7:6-1(b) provides,
The complaint may be made and signed by a law enforcement officer, or by any other person, but the summons shall be signed and issued only by such officer, or the judge, clerk or deputy clerk of the court in which the complaint is, or is to be filed. R. 7:3 relating to warrants and summons in respect of nonindictable offenses generally, shall be applicable to cases involving a traffic offense, except as otherwise herein provided.
*318 Our court rules have also addressed the related question of the allowable procedure in case of the issuance of a defective summons.
R. 3:3-4 provides that
(a) Amendment. No person arrested under a warrant or appearing in response to a summons shall be discharged from custody or dismissed because of any technical insufficiency or irregularity in the warrant or summons, but the warrant or summons may be amended to remedy any such technical defect.
(b) Issuance of New Warrant or Summons. If prior to or during the hearing as to probable cause, it appears that the warrant executed or summons issued does not properly name or describe the defendant, or the offense with which he is charged, or that although not guilty of the offense specified in the warrant or summons there is reasonable ground to believe that he is guilty of some other offense, the court shall not discharge or dismiss the defendant but shall forthwith cause a new complaint to be filed and thereupon issue a new warrant or summons.
Relating specifically to municipal court matters, R. 7:10-2 provides,
The court may amend any process or pleading for any omission or defect therein, or for any variance between the complaint and the evidence adduced at the trial but no such amendment shall be permitted which charges a different substantive offense (other than a lesser included offense). If the defendant is surprised as a result of such amendment, the court shall adjourn the hearing to some future day, upon appropriate terms.
We have recently reiterated the principle that the issuance of a summons carries with it a constitutional imperative that a determination of probable cause be made by the issuing officer. State v. Ross, 189 N.J. Super. 67, 74 (App.Div. 1983). In this case that requirement presumably has been met and, indeed, defendant does not raise the issue. Rather, he argues that the absence of the signature of the officer renders the summons fatally defective as though it had never been issued at all, citing Grauzauskas v. State, 2 N.J. Misc. 307 (Sup.Ct. 1924); Brewster v. Wilson, 3 N.J. Misc. 526 (Sup.Ct. 1925) and Grosky v. McGovern, 133 N.J.L. 277 (Sup.Ct. 1945) for support of that proposition. However, we regard these authorities as being inapposite to the situation presented here.
The general subject matter of the effect of the omission of a signature on court process has been the subject of discussion *319 by various authorities with mixed results depending upon the nature of the process and its importance in achieving compliance with certain statutory and other prerogatives. See 62 Am.Jur.2d, Process, § 9, at 792-793 (1972) and Annotation, "Process Omission Of Signature," 37 A.L.R.2d 928 (1953). Some courts have held that the absence of the signature of the issuing official is fatal to its efficacy while others have determined that it constitutes an amendable defect depending upon the factual circumstances. Id.
Here defendant received ample and fair notice of the nature of the charge against him and obviously was aware of when and where it was alleged that the violation had occurred. He also should have been aware of the identity of the complainant officer. In the absence of such direct knowledge he, or someone on his behalf, could have gleaned that information simply by looking at the second sequential summons that had been issued at the same time by the same officer and also by reference to the officer's identification (or badge) number which had been inscribed on both summons. Given the fact that he was or should have been aware of these essential facts, under these circumstances the cited provisions of our court rules, which liberally allow amendments, were particularly applicable. Indeed, had the State moved timely to cure the defect even at the trial date (notwithstanding that the 60 day limitation of N.J.S.A. 39:5-3 had expired) such relief would have been appropriate. R. 3:3-4; R. 7:10-2. See also State v. Bierilo, 38 N.J. Super. 581 (App.Div. 1956).
Thus, while we refuse to adopt a per se rule concerning whether such an omission is or is not fatally defective, we hold that such a decision necessarily depends on the circumstances of each case involving considerations such as whether fundamental fairness has been satisfied or a defendant has been truly prejudiced by the asserted omission in the summons. As we have noted, no such prejudice has been demonstrated here. In sum, while we do not consider the improper execution *320 of such a summons always to amount to "a minor technical insufficiency" as urged by the State, in the circumstances presented here the omission of the officer's signature did not deprive defendant of any constitutional, statutory or other imperative.
Hence, we affirm the trial court's denial of the motion to dismiss the summons for DWI and confirm defendant's conviction and sentence in all respects.
NOTES
[1] The State has not challenged defendant's right to enter such a conditional plea at the municipal court level and we elect not to consider that issue at this time. Cf. R. 3:9-3(f).
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196 Ga. App. 537 (1990)
396 S.E.2d 303
MUSCOGEE COUNTY BOARD OF EDUCATION et al.
v.
BOISVERT et al.
A90A0195.
Court of Appeals of Georgia.
Decided July 13, 1990.
Rehearing Denied July 26, 1990.
Harben & Hartley, Phillip L. Hartley, James E. Humes II, Hatcher, Stubbs, Land & Hollis, Robert C. Martin, Jr., for appellants.
Grogan, Jones, Rumer & Gunby, Milton D. Jones, Michael E. Kramer, John R. Myer, for appellees.
Pope, Judge.
Plaintiffs, two groups of teachers, filed separate complaints against defendants, the Muscogee County Board of Education, members of the Muscogee County Board of Education, the Muscogee County School District and Dr. Braxton Nail, Superintendent of the Muscogee County School District, contending that defendants breached plaintiffs' employment contracts. Specifically, plaintiffs contended defendants, in determining plaintiffs' salaries under the contracts, failed to credit plaintiffs with the proper number of years experience as provided by Note A to the 1981 and subsequent Department of Education Georgia Teacher Annual/Monthly Salary Schedule and the 1981 General Appropriations Act, Ga. L. 1981, pp. 1036, 1225, § 49. Defendants filed an answer and "Action for Declaratory Judgment ... in the Nature of a Counterclaim" wherein they denied their liability to plaintiffs on the grounds that plaintiffs had been paid in accordance with the terms of their respective employment contracts and that for each year in question plaintiffs' salaries exceeded what they would have been paid under the state minimum salary schedule. Defendants also contended that Note A was a misinterpretation of the language contained in the Appropriations Act and that all or part of plaintiffs' claims were barred by the applicable statute of limitation.
Subsequently, and pursuant to the consent of the parties, the trial court entered an order consolidating plaintiffs' claims against defendants and bifurcating the question of liability and damages. Upon motions of the parties, the trial court entered an order granting summary judgment to all plaintiffs on the question of liability, except as to those claims barred by the six-year statute of limitation contained in OCGA § 9-3-24, and denied defendants' motion for summary judgment. We affirm.
1. The record shows that since 1981 the State Department of Education has appended to the state minimum salary schedule for teachers language identical to or substantially the same as the following: "After successful completion of one year of experience and the CRT exam and assessment, the teacher will move to the third year of experience on the salary schedule. If the beginning teacher does not complete the assessment during the first year but completes the assessment at the beginning of the second year of teaching, then the *538 teacher will move to the third year of experience on the schedule the month following completion of permanent (PBT) certification. After permanent certification and one year of experience the teacher will resume annual increments." As stated supra, plaintiffs contend that defendants failed to credit them with the proper number of years experience based on the language contained in Note A above. Defendants concede that plaintiffs' salaries for the years in question (defendants first began paying plaintiffs in accordance with Note A in 1985-86, failed to pay them in accordance with Note A in 1986-87, and resumed paying in accordance with Note A in 1987-88) were based on actual number of years experience, not the "credited" or additional number of years experience to which plaintiffs contend they were entitled pursuant to Note A. However, relying on certain provisions of the Adequate Program for Education in Georgia Act ("APEG") (Ga. L. 1975, pp. 539, 561, § 56) (Ga. Code Ann. § 32-656 a) as supplanted by the Quality Basic Education Act (Ga. L. 1985, pp. 1657, 1712, § 1) (OCGA § 20-2-212) defendants contend they were not obligated to pay plaintiffs in accordance with the state minimum salary schedule, including the provisions of Note A, so long as the salary established by defendants equaled or exceeded the minimum salary provided in the state schedule.
OCGA § 20-2-212 provides in relevant part that "[t]he State Board of Education shall establish a schedule of minimum salaries for services rendered .... The minimum salary schedule shall provide a minimum salary base for each classification of professional personnel required to be certified; shall provide for increment increases above the minimum salary base of each classification based upon individual experience and length of satisfactory service; and shall include such other uniformly applicable factors as the state board may find relevant to the establishment of such a schedule .... A local unit of administration shall not pay to any full-time certificated professional employee a salary less than that prescribed by the schedule of minimum salaries .... Local units of administration may, however, supplement the salaries of such personnel ...." (Emphasis supplied.) It is undisputed that plaintiffs in this case were paid more than they would have received under the minimum salary schedule, by virtue of the fact that a local supplement was added to the salary of each teacher. We do not agree with defendants, however, that the fact that the total salary paid to each plaintiff was more than the minimum salary they would have received under the State schedule, exclusive of local supplement, is dispositive of the issue in this case. The question remains whether defendants were required to pay those teachers holding the appropriate certification as provided in Note A, or whether it was permissible to pay those teachers based solely on actual experience.
*539 The record shows the Muscogee County salary schedule was based on the "State Salary Schedule plus existing local supplement." Thus, the essence of defendants' argument is that although they adopted the state minimum in setting their salary schedule, they were free to disregard Note A in determining the number of years experience to credit to the plaintiffs because they also chose to pay their teachers a local supplement, which resulted in a total salary to the teachers in excess of the minimum prescribed by the State. However, according to both the state schedule and defendants' local schedule, a necessary step in determining the appropriate salary for teachers is that the number of years experience of the teacher first be ascertained. Note A simply provides, as established by the State Board of Education, pursuant to an act of the legislature, the means for making this determination for beginning teachers who have received the appropriate certification. That defendants were aware of this practice of crediting teachers with experience is evidenced by the fact that they followed this procedure when requesting reimbursement monies from the State. We hold, therefore, that the defendants could not obviate this requirement in contracting with their teachers simply by paying their teachers a local supplement which resulted in their salary being more than the minimum prescribed by the State Department of Education. Consequently, defendants' first enumeration of error provides no basis for reversal.
2. Defendants also contend the trial court should have applied the two-year statute of limitation contained in OCGA § 9-3-22 in determining whether plaintiffs' claims are barred, not the six-year statute of limitation set forth in OCGA § 9-3-24.
OCGA § 9-3-22 provides: "All actions for the enforcement of rights accruing to individuals under statutes or acts of incorporation or by operation of law shall be brought within 20 years after the right of action has accrued; provided, however, that all actions for recovery of wages, overtime, or damages and penalties accruing under laws respecting the payment of wages and overtime shall be brought within two years after the right of action has accrued." Defendants argue that although plaintiffs sued for breach of contract, the only basis of recovery was the 1981 Appropriations Act containing the language subsequently appended as Note A, and thus OCGA § 9-3-22, not OCGA § 9-3-24 applies. We disagree. In the case at bar, plaintiffs' contracts were made "in consideration of and in agreement with the laws of Georgia ...." The contracts further provided "[i]f the valid Georgia Teacher's certificate of the correct years of experience were not shown herein at the time of the execution of the contract, the contract will be adjusted accordingly for the entire contract period." "Therefore, the claim in the case at bar is based upon an enforceable simple written contract. The statute of limitations on all simple contracts *540 in writing is six years; and this is true whether the promise sued on is expressed in the writing or implied and written into it by the law. This rule is in accord with the decisions of the Supreme Court in numerous cases where it has been expressly recognized that, where the contract forming the basis of the action is in writing, the provisions of OCGA § 9-3-24 are applicable. (Emphasis supplied.) [Cits.]" (Punctuation omitted.) Nelson v. Nelson, 176 Ga. App. 107, 108 (335 SE2d 411) (1985). Cf. City of Atlanta v. Adams, 256 Ga. 620 (351 SE2d 444) (1987), relied on by defendants, in which "[t]he basis of the recovery [was] the ordinance itself." We find no merit to defendants' contention that the State Board of Education misinterpreted the language of the Appropriations Act, Ga. L. 1981, p. 1036, § 49, in drafting Note A. Although the wording of the two is not identical, our review of both Note A and the Act, as well as relevant portions of the record, convinces us this difference is without effect.
3. Likewise we find no merit to defendants' final enumeration. The contracts at issue in this case contain references to both the Muscogee County School District and the Muscogee County Board of Education as the contracting party. Thus we reject defendants' contention that it has been conclusively established on the record before us that the only proper party to this litigation is the Muscogee County School District.
Judgment affirmed. Deen, P. J., concurs. Beasley, J., concurs in judgment only.
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544 F.3d 474 (2008)
In re SALOMON ANALYST METROMEDIA LITIGATION.
Douglas Millowitz, on behalf of himself and all others similarly situated, Plaintiff-Appellee,
v.
Citigroup Global Markets, Inc., f/k/a Salomon Smith Barney Inc., f/k/a Salomon Smith Barney Holdings Inc., Citigroup Inc., Citicorp USA, Inc. and Jack Grubman, Defendants-Appellants.
Docket No. 06-3225-cv.
United States Court of Appeals, Second Circuit.
Argued: January 30, 2008.
Decided: September 30, 2008.
*475 Samuel Issacharoff, New York, N.Y. (Jeffrey J. Angelovich, Bradley E. Beckworth, Susan Whatley, Nix, Patterson & Roach, LLP, Daingerfield, TX; Frederic *476 S. Fox, Donald R. Hall, Christine M. Fox, Kaplan Fox & Kilsheimer, LLP, New York, NY; Sean F. Rommel, Patton, Roberts, McWilliams & Capshaw, LLP, Texarkana, TX; on the brief) for Plaintiff-Appellee.
Robert McCaw (Louis R. Cohen, Christopher J. Meade, Wilmer Cutler Pickering Hale and Dorr LLP; Brad S. Karp, Mark F. Pomerantz, Richard A. Rosen, Eric S. Goldstein, Paul, Weiss, Rifkind, Wharton & Garrison LLP, on the brief) New York, NY, for Defendants-Appellants.
Before: WALKER, CALABRESI, and POOLER, Circuit Judges.
POOLER, Circuit Judge:
In this appeal, we address whether plaintiffs alleging securities fraud against research analysts must make a heightened evidentiary showing in order to benefit from the fraud-on-the-market presumption of Basic Inc. v. Levinson, 485 U.S. 224, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988). In Hevesi v. Citigroup, Inc., we granted the defendants leave to appeal a class certification order under Federal Rule of Civil Procedure 23(f) in order to resolve the important question of whether the Basic presumption may "be extended to analyst research reports without a specific finding by the District Court that the analysts' misrepresentations actually affected the price of securities traded in the open market." 366 F.3d 70, 79 (2d Cir.2004). That appeal was never heard on the merits. We now reach these issues.
This case concerns allegations that defendants Citicorp USA, Inc., Salomon Smith Barney, Inc. ("SSB"), their ultimate parent, Citigroup, Inc. ("Citigroup"), and SSB research analyst Jack Grubman engaged in a scheme to defraud investors in Metromedia Fiber Network, Inc. ("Metromedia"), in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended, 15 U.S.C. §§ 78a et seq., and the Securities and Exchange Commission's Rule 10b-5, 17 C.F.R § 240.10b-5, by issuing and disseminating research analyst reports on Metromedia that contained materially false and misleading statements and omissions of material facts. According to the complaint, the purpose of the allegedly false and misleading analyst reports was to attract business from Metromedia for the investment banking division of SSB, which would then increase Grubman's personal compensation.
The district court dismissed many of plaintiffs' claims in an opinion and order dated January 5, 2005. See In re Salomon Analyst Metromedia Litig. ("Salomon Analyst I"), 373 F.Supp.2d 235 (S.D.N.Y. 2005). The court held, however, that with respect to certain research reports issued between March 8 and July 25, 2001, the complaint pleaded fraud with sufficient particularity to withstand defendants' motion to dismiss under Federal Rules of Civil Procedure 9(b) and 12(b)(6). On June 20, 2006, Judge Gerard E. Lynch certified the class of plaintiffs who purchased Metromedia stock between March 8 and July 25, 2001, under Federal Rule of Civil Procedure 23. See In re Salomon Analyst Metromedia Litig. ("Salomon Analyst II"), 236 F.R.D. 208 (S.D.N.Y.2006). The decision to certify the class is the sole subject of this appeal.
BACKGROUND
I. Motion to Dismiss
We begin with a discussion of the motion to dismiss to provide background for the surviving claims. In the original complaint, plaintiffs proposed a class of purchasers of Metromedia securities between November 25, 1997 and July 25, 2001. The district court dismissed the complaint insofar as it related to the pre-March 8, 2001 reports, because the allegations based on these reports were "insufficient to state *477 a claim for securities fraud." Salomon Analyst I, 373 F.Supp.2d at 238. Plaintiffs allege that Grubman was an extremely influential research analyst in the telecommunications sector, who could drive up share prices with positive recommendations. Prior to March 8, 2001, Grubman's public reports expressed the view that Metromedia, as a telecom company building fiber-optic infrastructure, was poised for explosive growth. Id. However, Grubman emphasized that the company faced risks and that its success depended in large part on its ability to obtain "additional funding to complete the planned build-out of its network." Id. "In short, plaintiffs plead[ed] no specific facts or allegations, beyond conclusory assertions, that would indicate that Grubman's pre-March 8, 2001, Metromedia reports did not present his actual opinion as to the future prospects and investment quality of Metromedia equity securities." Id.
The district court concluded, however, that the allegations relating to the reports issued between March 8 and July 25, 2001, were sufficient to state a claim for securities fraud. Id. at 240. Specifically, plaintiffs alleged that Grubman's reports during this time period omitted or misstated material facts regarding a credit facility that Citicorp USA was to provide Metromedia. Id. at 239. "Metromedia and Citicorp USA signed a commitment letter for a $350 million credit facility in December 2000; the facility was to be underwritten by Citicorp USA, which committed to providing $75 million of the credit and syndicating the remainder of the facility to other lenders...." Id. "As alleged by plaintiffs, and not seriously contested by defendants, the proposed facility suffered numerous problems and delays over the next seven months...." Id. However, beginning on March 8, 2001, Grubman's Metromedia reports did not reveal that the credit facility was having trouble, but rather touted that Metromedia had "`obtained a commitment for a fully underwritten credit facility for $350 million from Citicorp USA, Inc., which it expects will fully fund its current business plan.'" Id. (quoting Grubman's March 8, 2001, Analyst Report on Metromedia).
Although the touted credit facility was pledged by the investment banking division of Citicorp, defendants insisted that Grubman had no access to any information suggesting that the plans for the credit facility were deteriorating, because SSB's internal policies created a "Chinese Wall" to shield equity investors from the non-public information held by investment bankers. Id. "However, notwithstanding the many dubious leaps of logic made by plaintiffs," the court determined that the complaint contained "sufficient concrete allegations to support an inference that Grubman breached the `wall' on numerous occasions, with the apparent knowledge and support of SSB management." Id. at 240.
Although Grubman, as an external analyst, had no free-standing obligation to reveal this information, the court determined that he became obligated to reveal it once he "chose to provide some information about the credit facility...." Id. Thus, "particularly in the context of Grubman's previous emphasis on the importance of funding to the future prospects of ... Metromedia," plaintiffs adequately pleaded that Grubman's alleged failure to disclose the restrictions and risks related to the credit facility rendered the reports from March 8 to July 25, 2001, "materially misleading and thus actionable under section 10(b) and Rule 10b-5." Id.
II. Motion for Class Certification
On May 2, 2005, plaintiffs moved for class certification pursuant to Federal Rule of Civil Procedure 23 with respect to the surviving claims. On June 20, 2006, *478 Judge Lynch certified a class of plaintiffs who purchased Metromedia equity securities between March 8 and July 25, 2001. See Salomon Analyst II, 236 F.R.D. at 224.
Class certification is warranted under Rule 23 where the proposed class representative meets the standards of Rule 23(a)numerosity, commonality, typicality, and adequacyand the proposed class action meets the requirements of one of the subsections of Rule 23(b). Fed. R.Civ.P. 23.
The district court concluded that one of plaintiffs' proposed class representatives met the Rule 23(a) requirements. Salomon Analyst II, 236 F.R.D. at 212-17; see Fed.R.Civ.P. 23(a). This determination is not contested on appeal.
The district court next considered whether the proposed class met the requirements of Rule 23(b). Plaintiffs' motion for class certification was brought under Rule 23(b)(3), which requires that "the questions of law or fact common to the members of the class predominate over any questions affecting only individual members...." Fed.R.Civ.P. 23(b)(3) (2006). Drawing on the fact that a basic element of a securities fraud claim is reliance, defendants argued that individual questions will predominate over common questions, in violation of Rule 23(b)(3), with respect to whether each member of the proposed class relied on defendants' alleged misrepresentations. Salomon Analyst II, 236 F.R.D. at 218.[1] Plaintiffs responded that reliance by all class members may be presumed under the fraud-on-the-market doctrine of Basic. "[U]nder the fraud-on-the-market doctrine, reliance is presumed when the statements at issue become public. The public information is reflected in the market price of the security. Then it can be assumed that an investor who buys or sells stock at the market price relies upon the statement." Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, ___ U.S. ___, 128 S.Ct. 761, 769, 169 L.Ed.2d 627 (2008) (citing Basic, 485 U.S. at 247, 108 S.Ct. 978). Defendants argued that the presumption does not apply to statements by research analysts.
To resolve this argument, the district court began by considering the evidentiary standards that govern the adjudication of a motion for class certification. In a discussion that we have justly characterized as "a valiant effort by a conscientious district judge to reconcile the conflicting messages from our Court on class certification standards," In re Initial Public Offering Sec. Litig. ("In re IPO"), 471 F.3d 24, 40 n. 11 (2d Cir.2006), Judge Lynch first concluded that plaintiffs must make only "some showing" that the predominance requirement is met, based on our decision in Caridad v. Metro-North Commuter Railroad, 191 F.3d 283, 292 (2d Cir.1999). See Salomon Analyst II, 236 F.R.D. at 221.
Turning to Basic, Judge Lynch ruled that the Basic presumption can apply in a case against research analysts, and noted that "`[n]othing in the language of Basic limits its holding to issuer statements alone.'" Id. at 220, 108 S.Ct. 978 (quoting DeMarco v. Robertson Stephens Inc., 228 F.R.D. 468, 474 (S.D.N.Y.2005) (Lynch, J.)). Further, Judge Lynch held that there is no reason "`to adopt a higher *479 standard at class certification for plaintiffs alleging securities fraud by research analysts....'" Id. (quoting Robertson Stephens Inc., 228 F.R.D. at 474).
Judge Lynch stated that for the Basic presumption to apply, plaintiffs must demonstrate three elements: (1) the "stock was actively traded on an open, developed, and generally efficient market"; (2) "the alleged misrepresentations were publicly made"; and (3) the misrepresentations were "material." Salomon Analyst II, 236 F.R.D. at 222. Judge Lynch concluded that there could be "no dispute" that the first two elements were met. Id. He found the question of materiality more complicated, but concluded that the misrepresentations were material because plaintiffs had shown a "`substantial likelihood' that the alleged omission of truthful information about the credit facility in defendants' reports `would have been viewed by the reasonable investor as having significantly altered the total mix of information made available.'" Id. (quoting Harkavy v. Apparel Indus., Inc., 571 F.2d 737, 741 (2d Cir.1978)). In support of this conclusion, Judge Lynch noted that defendants had not seriously contested that a reasonable investor would have viewed the omitted information as significant, which he found not surprising in light of the evidence that Grubman had publicly emphasized the importance of the credit facility to Metromedia in previous reports. Id. at 222-23.
Defendants' primary argument against applying the Basic presumption was that plaintiffs were required to show that the misrepresentations had an actual causal effect on the market price of Metromedia shares. Id. at 223. Judge Lynch rejected this argument and held that materiality requires only a showing that the omitted information would have been viewed by the reasonable investor as having significantly altered the total mix of information available. Id. at 222. For these reasons, Judge Lynch concluded that plaintiffs were entitled to the Basic presumption. Id. at 222-23.
The final issue raised by the class certification motion was whether defendants would be afforded an opportunity to rebut the Basic presumption prior to class certification. Id. at 223. Judge Lynch observed that the Rule 23(b)(3) inquiry was effectively identical to several merits issues, most notably, whether plaintiffs could establish the reliance element of their securities fraud claim. Id. at 221, 223. Relying on Caridad, which suggested that a district judge should not evaluate evidence at class certification when the issue overlaps with an issue on the merits, Judge Lynch held that defendants would not be permitted to present rebuttal evidence until a later stage of the litigation, when it is appropriate to weigh merits-related evidence. Id. at 223 (citing Caridad, 191 F.3d at 293). Judge Lynch noted that defendants had not presented any evidence rebutting plaintiffs' claims that the misrepresentations had an actual effect on the market price. Id. at 223 n. 12. Although Judge Lynch "seriously doubt[ed]" that defendants could prevail on this argument, he did not foreclose the possibility. Id.
After concluding that the "`class action is superior to other available methods for the fair and efficient adjudication of the controversy,'" Judge Lynch certified the class. Id. at 224 (quoting Fed.R.Civ.P. 23(b)(3) (2006)).[2]
Defendants sought leave for an interlocutory appeal of the class certification, under Rule 23(f). We granted leave to appeal on October 6, 2006, but ordered *480 briefing to be held in abeyance until we issued a decision in In re IPO. On appeal, defendants first argue that the Basic presumption should be limited to suits alleging misrepresentations by issuers of securities, and not be made available in suits against research analysts. In the alternative, defendants argue that in suits against research analysts, plaintiffs should be required to make a heightened showing that misrepresentations had an actual impact on market price in order to warrant the Basic presumption.[3] Finally, defendants argue that in light of In re IPO, which rejected several of the evidentiary standards adopted by Judge Lynch, the certification must be vacated.
DISCUSSION
I. Standard of Review and Class Certification Requirements
In reviewing a district court's decision regarding class certification, we generally apply the abuse of discretion standard. Heerwagen v. Clear Channel Commc'ns, 435 F.3d 219, 225 (2d Cir.2006). When reviewing a grant of class certification, we accord the district court noticeably more deference than when we review a denial of class certification. Id. To the extent that a ruling on a Rule 23 requirement is supported by a finding of fact, that finding is reviewed under the "clearly erroneous" standard; to the extent the ruling involves an issue of law, such as the allocation of the burden of proof, our review is de novo; and to the extent the ruling involves an application of law to fact, our review is for abuse of discretion. In re IPO, 471 F.3d at 40-41. Thus, as an application of law to fact, we apply the abuse of discretion standard both to the district judge's ultimate conclusion on the class certification motion and to the judge's subsidiary rulings that each of the Rule 23 requirements have been met. Id.
The only question raised by this appeal is whether the district court properly determined that the Rule 23(b)(3) predominance requirement was met. The Rule 23(b)(3) predominance requirement tests whether a proposed class is "sufficiently cohesive to warrant adjudication by representation." Heerwagen, 435 F.3d at 226 (quotation marks omitted). To meet the requirement, "a plaintiff must show that those issues in the proposed action that are subject to generalized proof outweigh those issues that are subject to individualized proof." Id. In this case, the question of whether the predominance requirement is met largely turns on whether and how the Basic fraud-on-the-market presumption applies to suits against research analysts.
We first address whether we should adopt a bright-line rule that bars application of the Basic presumption to a suit alleging misrepresentations by research analysts. Concluding that we should not, we next consider whether plaintiffs must make a heightened showing in a suit against research analysts to warrant the presumption. Concluding that they need not, we next consider whether remand is required to provide defendants the opportunity to rebut the presumption prior to class certification. We conclude that it is.
II. Application of the Fraud-on-the-Market Presumption to Suits against Research Analysts
In Basic, the Supreme Court reaffirmed "that reliance is an element of a Rule 10b-5 cause of action. Reliance provides the requisite causal connection between a defendant's misrepresentation and *481 a plaintiff's injury." 485 U.S. at 243, 108 S.Ct. 978 (citation omitted). The Court stressed, however, that there is "more than one way to demonstrate the causal connection." Id. The Court noted that, given the "millions of shares changing hands daily," in modern securities markets, "our understanding of Rule 10b-5's reliance requirement must" evolve beyond the traditional concept of individualized reliance that was appropriate to "the face-to-face transactions contemplated by early fraud cases...." Id. at 243-44, 108 S.Ct. 978. Looking to the legislative history of the 1934 Securities Act, the Court determined that "Congress' premise" in drafting the Act was that "the market price of shares traded on well-developed markets reflects all publicly available information, and, hence, any material misrepresentations." Id. at 246, 108 S.Ct. 978 (emphases added). Therefore, in an efficient market, "an investor's reliance on any public material misrepresentations ... may be presumed for purposes of a Rule 10b-5 action." Id. at 247, 108 S.Ct. 978 (emphasis added).
The Basic Court thereby set forth a test of general applicability that where a defendant has (1) publicly made (2) a material misrepresentation (3) about stock traded on an impersonal, well-developed (i.e., efficient) market, investors' reliance on those misrepresentations may be presumed. Id. at 248 n. 27, 108 S.Ct. 978. This is all that is needed to warrant the presumption.[4]
Defendants argue that the Basic presumption should be limited to suits involving misrepresentations made by issuers, because misrepresentations by third parties are less likely to materially effect market prices. But they cite no case, and we have found none, that supports such a rule. Moreover, the Basic Court did not so limit its holding and its logic counsels against doing so. The reason is simple: the premise of Basic is that, in an efficient market, share prices reflect "all publicly available information, and, hence, any material misrepresentations." Id. at 246, 108 S.Ct. 978 (emphases added). It thus does not matter, for purposes of establishing entitlement to the presumption, whether the misinformation was transmitted by an issuer, an analyst, or anyone else.[5]
The Supreme Court's recent decision in Stoneridge Investment Partners, LLC supports this result. In Stoneridge Investment Partners, LLC, the Court held that there is a private right of action under Section 10(b) against entities other than issuers, provided that their conduct "satisf[ies] each of the elements or preconditions for liability...." 128 S.Ct. at 769. Significantly, the Court applied the same Basic test to the conduct of non-issuers to determine whether the fraud-on-the-market presumption applied. Id. The Court concluded the presumption did not apply, not because the defendants were not issuers, but rather, because their "deceptive acts were not communicated to the public," as required by Basic. Id.
*482 Thus, in short, there is no reason in law or logic to apply a bright-line rule prohibiting the application of the Basic presumption in suits against secondary actors such as research analysts.[6]
III. Legal Standard for Establishing the Fraud-on-the-Market Presumption
Defendants next argue that the district court erred by not placing the burden on plaintiffs to prove that the alleged misrepresentations "moved the market," i.e., had a measurable effect on the stock price. In short, defendants argue that the concept of "materiality" in Basic, which plaintiffs must demonstrate for the fraud-on-the-market presumption to apply, refers to a "material affect on the market price." This is a misreading of Basic.
Basic was a two-part opinion. In the first part of the opinion, the Basic Court undertook to explain the meaning of "material" in Rule 10b-5.[7] The Basic Court "expressly adopt[ed] the TSC Industries standard of materiality for the § 10(b) and Rule 10b-5 context" that "`to fulfill the materiality requirement "there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the `total mix'" of information made available.'" Basic, 485 U.S. at 231-32, 108 S.Ct. 978 (quoting TSC Indus. Inc., v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976)). See also Halperin v. eBanker USA.com, Inc., 295 F.3d 352, 357 (2d Cir.2002) ("The touchstone of the inquiry is ... whether defendants' representations or omissions, considered together and in context, would affect the total mix of information and thereby mislead a reasonable investor regarding the nature of the securities offered."). The Court underscored that "`[t]he determination of materiality requires delicate assessments of the inferences a "reasonable shareholder" would draw from a given set of facts and the significance of those facts to [the shareholder].'" Basic, 485 U.S. at 236, 108 S.Ct. 978 (quoting TSC Indus., 426 U.S. at 450, 96 S.Ct. 2126, alterations omitted).
Later in the opinion, the Court explained the advantage of framing the question of materiality in terms of how the information would be viewed by a reasonable investor, rather than in terms of actual impact on market price:
Requiring a plaintiff to show a speculative state of facts, i.e., how he would have acted if material information had been disclosed, or if the misrepresentation had not been made, would place an unnecessarily unrealistic evidentiary burden on the Rule 10b-5 plaintiff who has traded on an impersonal market.
Id. at 245, 108 S.Ct. 978 (citations omitted).
In the second part of the opinion, the Basic Court drew on this fair and manageable definition of materiality to devise a *483 method of establishing reliance on misrepresentations affecting the modern securities markets: if plaintiffs can show that the alleged misrepresentation was material and publicly transmitted into a well-developed market, then reliance will be presumed, for if a reasonable investor would think that the information would have "significantly altered the `total mix' of information," id. at 232, 108 S.Ct. 978 (quoting TSC Indus., 426 U.S. at 449, 96 S.Ct. 2126), then it may be presumed that, in an efficient market, investors would have taken the omitted information into account, thereby affecting market price, see id. at 244-45, 108 S.Ct. 978.
Although the Basic Court noted that empirical studies tended to confirm the premise that markets absorb material information, the Court emphasized that it was not "determin[ing] by adjudication what economists and social scientists have debated through the use of sophisticated statistical analysis and the application of economic theory." Id. at 246 n. 24, 108 S.Ct. 978. Rather, it was drawing on "Congress' premise" that "the market price of shares traded on well-developed markets reflects ... any material misrepresentations." Id. at 246, 108 S.Ct. 978. In a pivotal passage, the Court stated that the presumption was justified not by scientific certainty, but by considerations of fairness, probability, judicial economy, congressional policy, and common sense. Id. at 245-46, 108 S.Ct. 978.
This is how we explained the Basic presumption in our early cases interpreting that decision. See Litton Indus., Inc. v. Lehman Bros. Kuhn Loeb Inc., 967 F.2d 742, 748 (2d Cir.1992) noting that the presumption was appropriate in the fraud-on-the-market situation "due to the extreme difficulty in demonstrating transaction causation[, i.e., reliance]. To saddle a plaintiff with proving `the generally indeterminable fact of what would have happened but for the omission [or the misrepresentations that skewed the market value of stock] would reduce the protection against fraud afforded by Section 10(b).' The reliance presumption ... reallocates the risks of mistaken adjudications, resolving questions of doubt in favor of the investors that section 10(b) seeks to protect." (quoting duPont v. Brady, 828 F.2d 75, 78 (2d Cir.1987)).
Thus, plaintiffs do not bear the burden of showing an impact on price. The point of Basic is that an effect on market price is presumed based on the materiality of the information and a well-developed market's ability to readily incorporate that information into the price of securities. We said as much in Hevesi,
The fraud-on-the-market doctrine, as described by the Supreme Court in Basic v. Levinson, creates a rebuttable presumption that (1) misrepresentations by an issuer affect the market price of securities traded in an open market, and (2) investors rely on the market price of securities as an accurate measure of their intrinsic value.
366 F.3d at 77 (emphasis added); see also Basic, 485 U.S. at 246 n. 24, 108 S.Ct. 978 ("For purposes of accepting the presumption of reliance in this case, we need only believe that market professionals generally consider most publicly announced material statements about companies, thereby affecting stock market prices.").
Under Basic, as Judge Lynch held, the burden of showing that there was no price impact is properly placed on defendants at the rebuttal stage. Salomon Analyst II, 236 F.R.D. at 222 n. 12. Basic made clear that defendants could "rebut proof of the elements giving rise to the presumption, or show that the misrepresentation in fact did not lead to a distortion of price...." 485 U.S. at 248, 108 S.Ct. 978 (discussing the Eighth Circuit's decision *484 below). "Any showing that severs the link between the alleged misrepresentation and... the price ... will be sufficient to rebut the presumption of reliance." Id. (emphasis added); see Ceres Partners v. GEL Assocs., 918 F.2d 349, 360 (2d Cir.1990) ("Basic ... creates a rebuttable presumption of reliance and shifts to the defendant the burden of proof as to that element of the claim....").
The structure of this analysis does not vary according to the identity of the speaker. Defendants worry that if no heightened test is applied in suits against non-issuers, any person who posts material misstatements about a company on the internet could end up a defendant in a Rule 10b-5 action. The worry is misplaced. The law guards against a flood of frivolous or vexatious lawsuits against third-party speakers because (1) plaintiffs must show the materiality of the misrepresentation,[8] (2) defendants are allowed to rebut the presumption, prior to class certification, by showing, for example, the absence of a price impact, and (3) statements that are "predictions or opinions," and which concern "uncertain future event[s]," such as most statements made by research analysts, are generally not actionable. See In re Int'l Bus. Machs. Corporate Sec. Litig., 163 F.3d 102, 107 (2d Cir.1998).
Thus, no heightened test is needed in the case of research analysts.
IV. Remand
In his valiant effort to reconcile the conflicting messages from our Court on class certification standards, Judge Lynch concluded (1) that plaintiffs only need to make "some showing" beyond the allegations of the complaint of the elements triggering the Basic presumption, and (2) that he could not take and weigh evidence on whether the presumption can be rebutted, because to do so would require him to "weigh merits-related evidence, which the Second Circuit prohibits this Court from doing at the class certification stage." Salomon Analyst II, 236 F.R.D. at 223 (citing Caridad, 191 F.3d at 293). In In re IPO, we (1) disavowed the "some showing" standard of Caridad and (2) "decline[d] to follow the dictum in Heerwagen suggesting that a district judge may not weigh conflicting evidence and determine the existence of a Rule 23 requirement just because that requirement is identical to an issue on the merits." 471 F.3d at 42. We "required definitive assessment of Rule 23 requirements," id. at 41 (emphasis added), and held that "all ... evidence must be assessed as with any other threshold issue...." id. at 27. Such an assessment can be made only if the judge resolves the "factual disputes relevant to each Rule 23 requirement" and "is persuaded to rule... that the requirement is met...." Id. at 41. The question is whether Judge Lynch's now-incorrect statements of the applicable legal standards require reversal.
Notwithstanding the fact that Judge Lynch stated that he was applying the "some showing" standard with respect to his determinations of whether plaintiffs had established the elements triggering the Basic presumption, Judge Lynch ruled that plaintiffs had met a much higher burden. Judge Lynch held that *485 "[t]here is, and can be, no dispute that Metromedia stock was actively traded on an open, developed, and generally efficient securities market," and that there could not be "any dispute that the alleged misrepresentations were publicly made." Salomon Analyst II, 236 F.R.D. at 222 (emphases added). These rulings have not been challenged on appeal.
Though Judge Lynch found the question of materiality to be "more complicated," he determined that the alleged misrepresentations about the credit facility were material, because there was a "substantial likelihood" that this information "would have been viewed by the reasonable investor as having significantly altered the total mix of information made available." Id. (quotation marks omitted). Judge Lynch further noted that "[d]efendants, in any event, make no serious argument that the alleged misrepresentations were immaterial" in the specified sense, and remarked that this was "understandable in light of evidence in the record that defendants themselves publicly emphasized the importance to Metromedia of the $350 million credit facility that is the subject of the alleged misrepresentations." Id. at 222-23. We do not find that this ruling was an abuse of discretion.
Judge Lynch correctly stated that even assuming plaintiffs had met their burden for invoking the fraud-on-the-market presumption, Basic allows defendants the opportunity to rebut that presumption. Id. at 223. However, relying on the now-overruled holding of our decision in Caridad, Judge Lynch held that he could not consider defendants' rebuttal argument prior to class certification. Salomon Analyst II, 236 F.R.D. at 221-23 (citing Caridad, 191 F.3d at 293). In re IPO now requires a district court to make a "definitive assessment" that the Rule 23(b)(3) predominance requirement has been met. This assessment cannot be made without determining whether defendants can successfully rebut the fraud-on-the-market presumption. The Basic Court explained that a successful rebuttal defeats certification by defeating the Rule 23(b)(3) predominance requirement. See Basic, 485 U.S. at 249 n. 29, 108 S.Ct. 978. Hence, the court must permit defendants to present their rebuttal arguments "before certifying a class. ..." In re IPO, 471 F.3d at 41; see also Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261, 270 (5th Cir.2007) ("The trial court erred in ruling that the class certification stage is not the proper time for defendants to rebut lead Plaintiffs' fraud-on-the-market presumption.").
This error might appear harmless, because, as Judge Lynch correctly noted, defendants did not appear to have actually attempted a rebuttal: rather than submitting evidence to show that the misrepresentations did not affect market price, defendants simply argued that plaintiffs failed to carry their burden to establish market price impact. Salomon Analyst II, 236 F.R.D. at 223 n. 12. However, defendants' error may have been the result of conflicting statements in our case law, for which they should not be penalized. Based on the state of the law at the time, defendants could not have been expected to have known at that stage of the proceedings that (1) they were entitled to a full rebuttal as a matter of law, and (2) even in a case involving research analysts, they bore the burden of showing that market price was not affected. Defendants now request the opportunity to attempt to rebut the fraud-on-the-market presumption by arguing, for example, that the market price was not affected by the alleged misstatements, other statements in the "sea of voices" of market commentary were responsible for price discrepancies, or particular plaintiffs may not have relied on market price.
*486 We thus vacate the order certifying the class and remand to allow the district court to permit defendants the opportunity to rebut the Basic presumption prior to class certification.[9] If defendants attempt to make a rebuttal, the district court will be "accorded considerable discretion to limit both discovery and the extent of the hearing on Rule 23 requirements" in order "[t]o avoid the risk that a Rule 23 hearing will extend into a protracted mini-trial of substantial portions of the underlying litigation...." In re IPO, 471 F.3d at 41. "But even with some limits on discovery and the extent of the hearing, the district judge must receive enough evidence, by affidavits, documents, or testimony, to be satisfied that each Rule 23 requirement has been met." Id.
CONCLUSION
For the foregoing reasons, we vacate the order of class certification and remand for further proceedings consistent with this opinion.
NOTES
[1] The basic elements of a cause of action for securities fraud under Section 10(b) and Rule 10b-5 are (1) a material misstatement or omission, (2) scienter, (3) a connection with the purchase or sale of a security, (4) reliance, "often referred to in cases involving public securities markets (fraud-on-the-market cases) as `transaction causation,'" (5) economic loss, and (6) "loss causation, i.e., a causal connection between the material misrepresentation and the loss." Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 341, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) (emphasis omitted).
[2] Defendants do not appeal Judge Lynch's determination that the class action vehicle is superior to other methods of adjudicating the controversy.
[3] Plaintiffs ask that we dismiss the appeal as improvidently granted. Because this case presents several issues of first impression, as identified in Hevesi, we decline to do so. 366 F.3d at 79.
[4] Basic also requires that the plaintiff "traded the shares between the time the misrepresentations were made and the time the truth was revealed." 485 U.S. at 248 n. 27, 108 S.Ct. 978. Here, Judge Lynch ruled that the class was limited to purchasers of Metromedia securities between March 8, 2001, the time of the first alleged misrepresentation, and July 25, 2001, the date the alleged misrepresentation was corrected. Salomon Analyst II, 236 F.R.D. at 211, 224.
[5] The Court's holding in Basic is based on its review of the statutory language and legislative history. 485 U.S. at 246, 108 S.Ct. 978. Defendants argue that the "theory underlying Basic has been sharply questioned" by academics, but they point to no statute or precedent contrary to Basic.
[6] Indeed, in the first part of the opinion, the Basic Court specifically disavowed the use of multiple definitions of "materiality" that would vary according to who made the misrepresentation. See 485 U.S. at 240 n. 18, 108 S.Ct. 978 ("Devising two different standards of materiality, one for situations where insiders have traded in abrogation of their duty to disclose or abstain (or for that matter when any disclosure duty has been breached), and another covering affirmative misrepresentations by those under no duty to disclose (but under the ever-present duty not to mislead), would effectively collapse the materiality requirement into the analysis of defendant's disclosure duties.").
[7] Rule 10b-5 provides, in relevant part, that "[i]t shall be unlawful for any person ... [t]o make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading...." 17 C.F.R. § 240.10b-5 (emphases added).
[8] Although the structure of the materiality analysis remains the same no matter the identity of the speaker, the analysis of whether the specific misrepresentations made in a particular case are material "depends on the facts." Basic, 485 U.S. at 239, 108 S.Ct. 978. Thus, in a particular case, the identity of the speaker may be significant, because a court may determine that the reasonable investor would rely only on misrepresentations made by some speakers, but not by others. See e.g., DeMarco v. Lehman Bros., Inc., 222 F.R.D. 243, 247 (S.D.N.Y.2004) (Rakoff, J.) ("[N]o reasonable investor may suppose that any given analyst can guarantee future results....").
[9] It should be noted that this approach is in part more, and in part less, restrictive than the approach Judge Rakoff proposed in Lehman Brothers. Judge Rakoff held that, in a suit against research analysts, the "plaintiff must adduce admissible evidence that ... makes a prima facie showing that the analyst's statements alleged to be false or fraudulent materially and measurably impacted the market price of the security to which the statements relate." Lehman Bros., 222 F.R.D. at 247 (emphasis added). By contrast, we hold that plaintiffs must show that the statement is material (a prima facie showing will not suffice). However, once that is done, the burden shifts to the defense to show that the allegedly false or misleading material statements did not measurably impact the market price of the security. Judge Rakoff, writing before our decision in In re IPO, appeared to allocate the burden in the way that he did because, citing Caridad, he was "acutely aware that under the view [then] prevailing in this Circuit, the Court may not consider on a class certification motion either the contrary evidence offered by defendants or the merits of the underlying claims." Id. Thus, under the prevailing law as he understood it, he had no choice but to require the plaintiffs to adduce evidence of a measurable impact on price. To allocate the burdens fairly, he required a minimal showing: the plaintiffs were only required to produce "admissible evidence" that made a "prima facie" showing of price effect. Id. With Caridad (so understood) overruled, the present approach becomes available, and it better accords with In re IPO and Basic.
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544 F.3d 584 (2008)
UNITED STATES of America, Plaintiff-Appellee,
v.
Guadalupe CONSTANTE, III, Defendant-Appellant.
No. 07-41004.
United States Court of Appeals, Fifth Circuit.
October 6, 2008.
Julia Bowen Stern, James Lee Turner, Asst. U.S. Attys., Houston, TX, for U.S.
Marjorie A. Meyers, Fed. Pub. Def., H. Michael Sokolow, Molly E. Odom, Houston, TX, for Constante.
Before KING, HIGGINBOTHAM, and WIENER, Circuit Judges.
PER CURIAM:
Defendant-appellant Guadalupe Constante, III appeals his sentence of fifteen years imprisonment and five years supervised release imposed by the district court after he pleaded guilty to possession of a firearm subsequent to a felony conviction. Constante's principal argument on appeal is that the district court erred in concluding that his prior burglary convictions under § 30.02(a)(3) of the Texas Penal Code were violent felonies under 18 U.S.C. § 924(e)(1). We agree, and we VACATE the sentence and REMAND the case to the district court for resentencing.
I. FACTUAL AND PROCEDURAL BACKGROUND
Guadalupe Constante, III pleaded guilty to possession of a firearm subsequent to a felony conviction under 18 U.S.C. §§ 922(g)(1) and 924(a)(2). The presentence report (the "PSR") determined that Constante was subject to a mandatory minimum sentence of fifteen years imprisonment pursuant to 18 U.S.C. § 924(e) because he had at least three prior convictions for "violent felonies": four separate burglaries of a habitation, arson, and aggravated robbery. Constante objected to the PSR, arguing that his burglary convictions were not generic burglaries as contemplated by Taylor v. United States, 495 U.S. 575, 110 S.Ct. 2143, 109 L.Ed.2d 607 *585 (1990), and that the government had not established that the burglary and arson offenses were committed on different occasions.[1] The district court overruled both of these objections and sentenced Constante to fifteen years imprisonment and five years supervised release. Without the § 924(e) enhancement, the statutory maximum sentence would have been ten years imprisonment and three years supervised release. See 18 U.S.C. §§ 924(a)(2) and 3583(b)(2).
II. DISCUSSION
The court reviews the application of a § 924(e) sentencing enhancement de novo. United States v. Fuller, 453 F.3d 274, 278 (5th Cir.2006); United States v. Munoz, 150 F.3d 401, 419 (5th Cir.1998). The district court's factual findings are reviewed for clear error. United States v. Villanueva, 408 F.3d 193, 203 & n. 9 (5th Cir.2005).
Pursuant to § 924(e)(1), a defendant convicted under § 922(g) who has three prior convictions "for a violent felony ... committed on occasions different from one other" is subject to a mandatory minimum sentence of fifteen years imprisonment. A "violent felony" is defined as any crime that is punishable by a term of imprisonment exceeding one year and "is burglary, arson, or extortion, involves the use of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another." 18 U.S.C. § 924(e)(2)(B)(ii). The Supreme Court has interpreted burglary in § 924(e) in terms of its modern "generic" usage. Taylor, 495 U.S. at 598, 110 S.Ct. 2143. Specifically, the Taylor definition of a generic burglary requires that the state statute contain, at a minimum, the following elements: "an unlawful or unprivileged entry into, or remaining in, a building or other structure, with intent to commit a crime." Id. (emphasis added).
In Texas, a person commits burglary if, without the effective consent of the owner, that person either "enters a habitation, or a building (or any portion of a building) not then open to the public, with the intent to commit a felony, theft, or an assault," TEX. PENAL CODE ANN. § 30.02(a)(1), or "enters a building or habitation and commits or attempts to commit a felony, theft, or an assault," TEX. PENAL CODE ANN. § 30.02(a)(3). This court has previously held that the offense of burglary of a habitation under § 30.02(a)(1) of the Texas Penal Code qualifies as a generic burglary for purposes of § 924(e). United States v. Silva, 957 F.2d 157, 162 (5th Cir.1992); see also Fuller, 453 F.3d at 278. However, this court has not, in a published opinion, affirmatively stated that burglary under § 30.02(a)(3) of the Texas Penal Code does not qualify as a generic burglary under the Taylor definition.
In determining whether a burglary qualifies as a generic burglary for purposes of a § 924(e) sentencing enhancement, the Supreme Court has limited the scope of evidence that a court may review to: "the statutory definition, charging documents, written plea agreement, transcript of plea colloquy, and any explicit factual findings by the trial judge to which the defendant assented." Shepard v. United States, 544 U.S. 13, 16, 125 S.Ct. 1254, 161 L.Ed.2d 205 (2005).
In concluding that Constante's burglary convictions qualified as generic burglaries, the district court relied primarily on Silva. In Silva, this court stated that "Section 30.02 of the Texas Penal Code is a generic burglary statute, punishing nonconsensual entry into a building with intent to commit *586 a crime." 957 F.2d at 162. Although the court did not specify which subsection of § 30.02 Silva was convicted under, the court could have only been referring to § 30.02(a)(1) because it is the only subsection that includes the element of specific intent. Since § 30.02(a)(3) does not include the element of specific intent, Silva cannot support the district court's conclusion that a conviction under § 30.02(a)(3) is a violent felony for purposes of 18 U.S.C. § 924(e).
In United States v. Herrera-Montes, this court considered whether burglary under a Tennessee statute was a generic burglary and therefore qualified as a "crime of violence" under U.S.S.G. § 2L1.2. 490 F.3d 390, 391 (5th Cir.2007); see also James v. United States, 550 U.S. 192, 127 S.Ct. 1586, 1596, 167 L.Ed.2d 532 (2007) (noting that the definition of "crime of violence" for a career offender enhancement "closely tracks" the definition of "violent felony" for an armed career criminal enhancement). The Tennessee burglary statute, TENN. CODE ANN. § 39-14-402(a)(3), is, in relevant part, identical to § 30.02(a)(3) of the Texas Penal Code. Herrera-Montes, 490 F.3d at 392. Neither statute requires an element of specific intent at the time of entry. The court concluded that "Taylor requires that the defendant intend to commit a crime at the time of unlawful entry." Id. Accordingly, the conviction under TENN. CODE ANN. § 39-14-402(a)(3) was not a crime of violence for sentencing enhancement purposes. Id.
Recently, this court appeared to be on the verge of directly stating that Herrera-Montes applies to § 30.02(a)(3). This exact questionwhether a conviction under § 30.02(a)(3) is a violent felony under 18 U.S.C. § 924(e)was presented to the court in United States v. Fambro, 526 F.3d 836 (5th Cir.2008). Although the court positively cited to Herrera-Montes and suggested that the defendant was correct in arguing that a conviction under § 30.02(a)(3) did not meet the Taylor definition of a generic burglary, the court ultimately avoided ruling on this issue because it determined that the defendant had first raised the issue in his reply brief. Fambro, 526 F.3d at 850.
The court has twice specifically concluded that § 30.02(a)(3) does not satisfy the Taylor definition of a generic burglary because it lacks the requisite element of intent, but neither opinion was published. United States v. Castro, 272 Fed.Appx. 385, 386 (5th Cir.2008) (citing Herrera-Montes, 490 F.3d at 391-92); United States v. Beltran-Ramirez, 266 Fed.Appx. 371, 372 (5th Cir.2008) (same).[2] The district court held Constante's sentencing hearing on October 11, 2007, prior to the release of either of these unpublished opinions.
The government suggests that it is not clear whether Constante was convicted of burglary under § 30.02(a)(1) or (3). Constante's burglary indictments allege that he "intentionally or knowingly enter[ed] a habitation, without the effective consent of... the owner ... and attempted to commit or committed theft of property." This language is similar to the statutory language in § 30.02(a)(3). Moreover, the burglary indictments never reference Constante's intent to commit theft at the time of entry.[3] While these facts strongly suggest *587 that Constante was convicted under § 30.02(a)(3), we are not required to decide this question because the government failed to carry its burden of proving that Constante was convicted under a statute that satisfies the Taylor definition of generic burglary.
The government argues that after it established the prior convictions, Constante had the burden of proving the invalidity of those convictions by a preponderance of the evidence. In support of this argument, the government cites United States v. Bookman, 263 Fed.Appx. 398, 399-400 (5th Cir.2008) and United States v. Barlow, 17 F.3d 85, 89 (5th Cir.1994). These cases relate to the constitutional validity of a guilty plea and not to establishing the precise statute under which the defendant was convicted. The government acknowledges that it bears the initial burden of establishing the prior conviction. Although it established the four burglary convictions, it failed to establish that any conviction was specifically under § 30.02(a)(1). See United States v. Rodriguez, 523 F.3d 519, 524 (5th Cir.2008) ("The Government bears the burden of proving by a preponderance of the relevant and reliable evidence that the facts support a sentencing enhancement." (citing United States v. Herrera-Solorzano, 114 F.3d 48, 50 (5th Cir.1997))). Thus, ifas the government contendsit is unclear under which subsection of § 30.02(a) Constante pleaded guilty, then the government failed to carry its burden of proving that the burglary convictions qualify for a § 924(e) sentencing enhancement. See also Beltran-Ramirez, 266 Fed.Appx. at 372 (finding that the district court erred in applying a sentencing enhancement where defendant was charged under both § 30.02(a)(1) and (3) and the record contained no evidence indicating under which subsection he pleaded guilty).
Unlike Fambro, this is an appropriate case for this court definitively to conclude that a burglary conviction under § 30.02(a)(3) of the Texas Penal Code is not a generic burglary under the Taylor definition because it does not contain an element of intent to commit a felony, theft, or assault at the moment of entry. Therefore, Constante's burglary convictions are not violent felonies under 18 U.S.C. § 924(e).
Because we conclude that Constante's burglary convictions do not qualify as violent felonies for purposes of a § 924(e) sentencing enhancement, we do not need to reach the issue of whether the burglaries and the arson were committed on different occasions from one another. Without the four burglary convictions, Constante only has two prior convictions for violent felonies and is not subject to the § 924(e) sentencing enhancement.
Finally, Constante admits that his second issue on appealwhether his sentence was unconstitutionally enhanced based on facts not alleged in the indictment, proved to a jury beyond a reasonable doubt, or admitted as part of his guilty pleais foreclosed by Almendarez-Torres v. United States, 523 U.S. 224, 118 S.Ct. 1219, 140 L.Ed.2d 350 (1998). See also United States v. White, 465 F.3d 250, 254 (5th Cir.2006) ("[N]either the statute nor the Constitution requires a jury finding on the *588 existence of the three previous felony convictions required for the [§ 924(e)] enhancement." (quoting United States v. Stone, 306 F.3d 241, 243 (5th Cir.2002))). This argument has been preserved for possible future review.
III. CONCLUSION
For the reasons stated above, Constante's sentence is VACATED and the case is REMANDED for resentencing consistent with this opinion.
NOTES
[1] Constante did not dispute that his convictions for arson and aggravated robbery qualify as violent felonies under § 924(e). His objection was limited to the burglary convictions.
[2] Pursuant to 5TH CIR. R. 47.5.4, unpublished opinions issued after January 1, 1996 are not precedent except under limited circumstances. The frequency with which this issue appears warrants a published opinion with full precedential weight pursuant to 5TH CIR. R. 47.5.1.
[3] The "intentionally or knowingly" language in the indictment refers to a general criminal intent requirement, but not the specific intent element contained in § 30.02(a)(1) and the Taylor definition of generic burglary. See Beasley v. McCotter, 798 F.2d 116, 120 (5th Cir.1986) (noting that § 30.02(a)(1) requires "specific intent to commit a felony or theft in the building" and § 30.02(a)(3) requires only the more general culpable mental state such as intentionally or knowingly). In other words, under § 30.02(a)(3) a defendant must intentionally or knowingly enter the building, but he would not have to intend to commit a felony, theft, or assault at that time. Only this latter type of specific intent is relevant to the Taylor definition of generic burglary.
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138 Ga. App. 88 (1976)
225 S.E.2d 512
McKENZEY
v.
THE STATE.
51804.
Court of Appeals of Georgia.
Submitted February 4, 1976.
Decided March 11, 1976.
James T. Irvin, for appellant.
V. D. Stockton, District Attorney, for appellee.
WEBB, Judge.
Howard McKenzey and Jessie Daniels were indicted for an escape from Georgia Industrial Institute alleged to have occurred on April 21, 1975. McKenzey was tried on August 20, 1975. The jury returned a guilty verdict with the recommendation that McKenzey be punished as for a misdemeanor and the court sentenced him to three years to be served consecutively to any sentence he was then serving.
Upon the overruling of his motion for new trial McKenzey filed notice of appeal in the Superior Court of Habersham County on November 17, 1975. The transcript of record was docketed in this court on December 1, and on December 19 the enumeration of errors and brief of appellant were filed.
We note for publication but without further comment that no brief was filed by the District Attorney of the Mountain Judicial Circuit within 40 days of the docketing of the appeal as required by Rule 16 (a) of this court, and that the district attorney made no appearance before this court for oral argument on February 4, 1976. It was not until February 24, 46 days after the time for filing of the appellee's brief had expired, that a two-page brief, in which no cases were cited as authority, was filed in response to McKenzey's ten enumerated errors.
1. McKenzey assigns error on the court's denial of his challenge to the array of jurors on the grounds that he had been brought into the courtroom in their presence in prison uniform and handcuffed. The district attorney contends that the challenge is without merit because the motion was not shown to be in writing as required by Code Ann. § 59-803.
*89 Although the challenge was made orally, the record reveals that a written motion was filed prior to the hearing on McKenzey's motion for new trial, which presented the denial of the challenge as a ground. "[W]here a person accused of a crime is not afforded the opportunity to make appropriate objections to the illegal composition of the grand jury or the traverse jury before indictment or during the progress of the trial, he may raise the issue by motion for new trial or by habeas corpus proceedings." Cobb v. State, 218 Ga. 10, 22 (4) (126 SE2d 231).
It appears from the trial transcript that his attorney was unaware that McKenzey would be dressed in prison uniform and brought into the courtroom in handcuffs until he actually appeared, at which time the oral objection and motion for mistrial was made and overruled. Therefore we will consider the challenge on its merits.
(a) Insofar as McKenzey's appearance in prison clothing is concerned, "even if the denial of the motion was error no harm has been shown as the crime of escape necessarily involves a defendant who has been confined in a lawful place of confinement." Krist v. State, 133 Ga. App. 197 (210 SE2d 381); Spurlin v. State, 228 Ga. 763, 765 (4) (187 SE2d 856).
(b) We conclude, however, that the trial court erred in denying McKenzey's motion in regard to his appearance before some of the jurors while handcuffed. "[A] defendant being tried for a criminal offense on a plea of not guilty was entitled, at common law, to make his appearance free from all shackles or bonds. This is also the present rule, and the right is recognized as an important component of a fair and impartial trial." 21 AmJur2d 276, Criminal Law, § 240.[1] Every person charged with an offense against the laws of this state shall have a public and speedy trial by an impartial jury. Bill of Rights, Sec. I, Par. V (Constitution of Georgia, Code Ann. § 2-105).
*90 Accordingly, "[A] defendant has a right to be tried in an atmosphere free of partiality created by the use of excessive guards except where special circumstances [exist], which in discretion of the trial judge, dictate added security precautions. [Cit.]" Allen v. State, 235 Ga. 709, 711 (221 SE2d 405). We find no circumstances which would dictate the use of handcuffs in this case.
Although McKenzey was on trial for escape, the evidence established that his cell door was left unlocked at night and that he had on many occasions during his imprisonment been left unsupervised while he worked all day as a brick mason with numerous opportunities to escape. He denied under oath any attempt to escape, testifying that he and Daniels meant only to go to a bootlegger's house, which Daniels thought was near the pumping station where they were working, to get some whiskey and to return before they were missed.
Thus there was no "history of escape" to justify the use of restraint as shown in United States v. Bankston, 424 F2d 714 (5th Cir. 1970). Nor were there threats on the lives of the state's witnesses and on the trial judge as in Allen v. State, 235 Ga. 709, 711, supra. Furthermore, there was a clear showing through McKenzey's undisputed testimony that he was seen by some of the panel of prospective jurors as he was led in handcuffs into the courtroom, and no attempt was made by the trial judge to explain to the jury that seeing McKenzey handcuffed was to have no bearing on its consideration of the merits of the charge against him. Cf. Starr v. State, 209 Ga. 258, 259 (5) (71 SE2d 654); Yates v. United States, 362 F2d 578, 579 (4) (10th Cir. 1966); United States v. Acosta-Garcia, 448 F2d 395, 396 (1) (9th Cir. 1971).
We therefore hold that these security measures were not justified under the circumstances of this case and denied McKenzey a fair trial.
2. The trial court also erred in permitting the state, over defense counsel's objection, to question McKenzey as to his knowledge of a subsequent escape by his *91 co-defendant Daniels in an attempt to impeach his testimony that he and Daniels intended to return.
The conduct of a joint conspirator after the alleged enterprise has ended is inadmissible against the other. Wall v. State, 153 Ga. 309 (5) (112 S.E. 142); Smith v. State, 230 Ga. 876 (199 SE2d 793). While "A witness may be impeached by contradictory statements previously made by him as to matters relevant to his testimony and to the case," (Code § 38-1803), Daniels' subsequent escape, if there was one, was neither contradictory nor relevant to McKenzey's testimony or to the case being tried. See Casey v. State, 133 Ga. App. 161, 162 (2) (210 SE2d 375). The district attorney should not have been allowed to question McKenzey on this subject, of which he had no personal knowledge, and it should have been excluded from evidence.
3. It was not error to allow the Records Clerk of the Georgia Industrial Institute to testify that McKenzey was an inmate there on the date of the alleged escape. Loughridge v. State, 201 Ga. 513, 516 (3a) (40 SE2d 544). Also, "The testimony of a party to a transaction is as high and good evidence to a particular fact as the purported records of the opposite party," (Skinner Poultry Co. v. Mapp, 98 Ga. App. 772, 774 (106 SE2d 825)), and McKenzey's own testimony shows that he was an inmate. Therefore this evidence was not subject to the objection that certified prison records would be the highest and best evidence. Loughridge v. State, 201 Ga. 513, 516 (4), supra.
4. The remaining enumerations of error are without merit or are unlikely to occur upon retrial.
Judgment reversed. Deen, P. J., concurs. Quillian, J., concurs in the judgment only, but not with all of the statements made therein.
NOTES
[1] Former Code § 27-1401 provided that "No prisoner shall be brought into court, for arraignment or trial, tied, bound or fettered, unless the court shall deem it necessary, during his arraignment or trial." Ga. L. 1966, pp. 430, 431, present Code Ann. § 27-1401, superseded the former section in its entirety and has nothing in common as to subject matter.
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15 Cal. 2d 711 (1940)
PACIFIC VENTURE CORPORATION (a Corporation), Appellant,
v.
JOHN W. HUEY et al., Respondents.
L. A. No. 17452.
Supreme Court of California. In Bank.
July 24, 1940.
Betts & Garrison for Appellant.
Andrew J. Copp, Jr., Robert E. Austin and John N. Helmick for Respondents.
CARTER, J.
Plaintiff brought this action to recover the sum of $2,500 which it claimed to be due it from defendants pursuant to a contract entered into on the 15th day of July, 1936, between plaintiff's assignors, M. E. Rogers and John A. Hassell, and defendants Huey and Urie for the sale of their interest in certain mining claims situated in Santa Cruz County, Arizona. In said contract defendants Huey and Urie agreed to pay plaintiff's assignors as the purchase price for their interest in said mining claims, the sum of $1891.90 upon the execution of said contract and the further sum of $2,500 either out of 10 per cent of the royalties received by said defendants Huey and Urie from said mining claims or out of the final payment on the purchase price of said mining claims in the event that the same were sold by defendants Huey and *713 Urie before said defendants had paid said Rogers and Hassell said sum of $2,500 out of said 10 per cent of said royalties. Defendants Huey and Urie paid Rogers and Hassell said sum of $1891.90 upon the execution and delivery of said agreement, but said defendants received no royalties from said mining claims and made no further payment on account of the purchase price thereof to Rogers and Hassell or plaintiff.
The trial court found that on January 10, 1938, Huey and Urie entered into an agreement with defendant Albert Beck, which agreement was dated July 24, 1937, and provided for the exchange of said mining claims for certain property owned by Beck, and Beck thereby agreed to pay plaintiff or its assignors the sum of $2,500 to cover the balance of the purchase price of said mining claims. Said agreement provided:
"Huntington Park, California"
"July 24, 1937"
"AGREEMENT"
"In consideration of $1.00, and other good and sufficient considerations, I, Albert Beck, do hereby agree that the final and last payment on the deal whereby Albert Beck is exchanging certain equities in one apartment house at 1102 West 41st Place, Los Angeles, and 80 acres of land in Imperial Valley subject to their respective mortgages or trust deeds, etc., and as the final and last payment for certain mining claims, etc., in Santa Cruz County, Arizona, due John W. Huey and George G. Urie, Albert Beck hereby agrees to pay to the Pacific Venture Co. or their assigners or successors in interest, the $2,500.00 mentioned in that certain agreement between John W. Huey, George G. Urie and Pacific Venture Co. and or M. E. Rogers and John A. Hassell dated July 15, 1936."
"Albert Beck agrees to pay this $2,500.00 as per the terms and conditions provided in said contract to the legal owners or holders of the above-mentioned contract, which shall complete the final and last payment to Huey and Urie for above described mining claims. The quit-claim deed to be delivered to Albert Beck or his assigns for the interest owned by Huey and Urie in the above mentioned mining claims carries only Huey and Urie's interest after this agreement has been signed and delivered and the complete title to said aforesaid mining claims has been paid for by carrying out of payment as per *714 conditions of the contract between Huey, Urie and Pacific Venture Co. and or M. E. Rogers and John A. Hassell."
"Albert Beck,"
"John W. Huey,"
"George G. Urie."
The sum of $2,500 was not paid plaintiff or its assignors and this action was commenced on February 14, 1938.
The trial court found the foregoing facts and adopted the following conclusions of law:
"That under the terms of said agreement of the 15th day of July 1936, between M. E. Rogers and John A. Hassell and John W. Huey and George G. Urie, two sources were designated out of which the payment of the sum of $2,500.00 should be made by defendants, John W. Huey and George G. Urie, to said M. E. Rogers and John A. Hassell, as follows:"
"(1) Ten per cent (10%) of the royalties received by the defendants, John W. Huey and George G. Urie, from said mining claims; and"
"(2) Final payment of the sales price of said mining claims."
"That subsequent to the date of said agreement, namely, the 15th day of July, 1936, and prior to the date of the filing of the above entitled action, or the filing of plaintiff's First Amended Complaint herein, the defendants, John W. Huey and George G. Urie, received no royalties from said mining claims, and said defendants have not received the final payment of $2,500.00 of the sales price of said mining claims;"
"That by reason thereof, neither source of the payment of said sum of $2,500.00 by the defendants, John W. Huey and George G. Urie to M. E. Rogers and John A. Hassell, had materialized prior to the filing of plaintiff's complaint or the filing of plaintiff's First Amended Complaint herein."
"That the legal effect of the agreement dated the 24th day of July, 1937, and entered into on the 10th day of January 1938, between the defendants, John W. Huey and George G. Urie, and the defendant, Albert Beck, so far as the defendant, Albert Beck, was concerned was and is that the defendant, Albert Beck, guaranteed the payment by the defendants, John W. Huey and George G. Urie to M. E. Rogers and John A. Hassell of said sum of $2,500.00 when, as and if the same became due from the defendants, John W. Huey and George G. *715 Urie to M. E. Rogers and John A. Hassell under said agreement of July 15th, 1936."
Judgment was entered that plaintiff recover nothing against the defendants or any of them and plaintiff prosecutes this appeal on the judgment roll alone.
[1] Plaintiff contends that upon the execution of the agreement dated July 24, 1937, between defendants Huey and Urie and Beck, it was entitled to the immediate payment of the sum of $2,500 as the balance of the purchase price of the interest in said mining claims which its assignors had sold defendants Huey and Urie pursuant to the agreement of July 15, 1936. It takes the position that the effect of the transaction between Huey and Urie and Beck was to divest Huey and Urie of all right, title and interest in and to the mining claims in question, and thereby make impossible the operation of the mining claims by them and consequently put it out of their power to perform their contract of July 15, 1936, with plaintiff's assignors, and that since the balance of the purchase price was required to be paid upon the sale of the mining claims, said payment became due and payable upon the execution of the agreement dated July 24, 1937, which, in effect constituted a sale or exchange of said mining claims by Huey and Urie to Beck.
Defendants contend that since the agreement between plaintiff's assignors and Huey and Urie provided that the balance of the purchase price of the mining claims be paid out of specific sources, such payment would not become due until such sources materialized, and that, in view of the fact that such sources had not materialized before the commencement of the action, the action was prematurely brought; in other words, that under the terms of the agreement between plaintiff's assignors and Huey and Urie, the balance of the purchase price of the mining claims was to be paid first out of 10 per cent of royalties received by said defendants from said mining claims, or out of the final payment of the purchase price of said mining claims in the event that said claims were sold by said defendants before said defendants had paid plaintiff's assignors the sum of $2,500 out of said royalties.
There can be little doubt but that it was the intention of the parties to the agreement dated July 24, 1937, to effect a sale or exchange of the mining claims in question from Huey and Urie to Beck and that Huey and Urie thereby parted *716 with all of their interest in said mining claims and Beck became the owner thereof, subject to the payment of the sum of $2,500 to plaintiff or its assignors. Such being the case, the question arises as to whether or not Huey and Urie, as well as Beck, became obligated to pay plaintiff the balance of the purchase price of said mining claims upon the execution of the agreement dated July 24, 1937. We are of the opinion that upon the execution of said agreement, which effected a sale of said mining claims from Huey and Urie to Beck, all three of said defendants thereby became obligated to pay the balance of the purchase price due plaintiff's assignors pursuant to the agreement of July 15, 1936.
While said last-mentioned agreement makes no provision for the operation of the mining claims by Huey and Urie and fixes no specific date for the payment of the balance of the purchase price in the event the claims are not operated, it does provide that in the event of the sale of said claims prior to the payment to plaintiff's assignors of said sum of $2,500 from royalties, plaintiff's assignors shall be paid said sum out of the final payment of said purchase price. In other words, Huey and Urie had the right to sell the claims, but upon the consummation thereof, plaintiff's assignors were entitled to receive $2,500 out of the final payment of the purchase price for which said claims were sold.
By the sale of the claim to Beck, the right to pay plaintiff's assignors the balance of $2,500 on the purchase price out of royalties thereupon ceased, and plaintiff's assignors thereupon became entitled to receive said sum of $2,500 out of the purchase price paid by Beck for the claims; and, in the absence of an agreement that this payment be deferred, it became due and payable immediately. (Civ. Code, sec. 1657.) In other words, the agreement of July 15, 1936, contemplated that the claims would be sold for a price of $2,500, or more, in order that there be a sufficient amount available to pay plaintiff's assignors the balance due them. While no time was specified in the agreement of July 15, 1936, for the payment of this balance, it became due and payable by operation of law when the sale of the claims was consummated pursuant to the agreement of July 24, 1937.
[2] There is no merit in the contention of the defendants Huey and Urie that plaintiff is not now entitled to receive the balance of $2,500 on the purchase price of said claims because *717 said amount has not been received by them, as they, by their voluntary act have surrendered control of said claims and rendered it impossible for them to obtain the balance of the purchase price therefor in any other manner than by receiving it from Beck.
By the execution of the agreement of July 24, 1937, Huey and Urie made it impossible for them to pay the balance of the purchase price to plaintiff's assignors out of royalties, and unless they made other provision for the payment of such balance, a cause of action thereupon accrued against them in favor of plaintiff.
[3] It appears to be well settled that a person cannot avoid liability for the nonperformance of an obligation by placing such performance beyond his control by his own voluntary act.
This rule is thus stated in 13 Corpus Juris at pages 647, 648:
" 'A party to a contract cannot take advantage of his own act or omission to escape liability thereon ... where he prevents a fulfillment of a condition precedent, or its performance by the adverse party, he cannot rely on such condition to defeat his liability.' "
The same proposition of law is announced in 12 American Jurisprudence at page 885, as follows:
" 'One who makes impossible the performance or happening of the condition precedent upon which his liability by the terms of the contract is made to depend, cannot avail himself of its non-performance.' "
The rule announced above has been uniformly followed in this state. (See Carl v. Eade, 81 Cal. App. 356 [253 P. 750], where the cases supporting this rule are cited and applied.)
Under the terms of the agreement of July 15, 1936, Huey and Urie assumed the obligation of securing to plaintiff's assignors the payment of $2,500 upon the sale of the mining claims in question. While they made provision for such payment in the agreement of July 24, 1937, said amount has not yet been paid, and plaintiff is entitled to judgment against them as the original obligors under the terms of the agreement of July 15, 1936, for the reason that they have voluntarily placed beyond their control the payment of said sum of $2,500 pursuant to the terms of said agreement. *718
[4] Plaintiff is also entitled to judgment against defendant Beck under the terms of his agreement of July 24, 1937, as the obligation assumed by Beck in said agreement was for the benefit of the plaintiff or its assignors and is clearly enforceable by plaintiff by virtue of the provisions of section 1559 of the Civil Code, which provides:
"A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it."
The case of Washer v. Independent Mining & Development Co., 142 Cal. 702 [76 P. 654], appears to be strikingly in point in support of the legal proposition that plaintiff has the right to recover from Beck the balance of the purchase price which Huey and Urie agreed to pay plaintiff's assignors upon the sale of said claims. In the Washer case, supra, plaintiff had advanced money to the owner of a mine under an agreement that the amount would be repaid him out of the purchase price of the mine when it was sold. The defendant purchased the mine and adopted a resolution providing for the payment of the amount which plaintiff had advanced, but later refused to pay plaintiff said amount and defended the action upon the theory that there was no privity of contract between it and plaintiff for the payment of said amount. This court held that plaintiff was entitled to recover from defendant under the provisions of section 1559 of the Civil Code. In said case this court said at page 707:
"The defendant contends that neither the allegations of the complaint nor the findings show that its grantors were personally liable to plaintiff for the advances made by him, and that there is nothing in either the complaint or findings to show any privity of contract between defendant and plaintiff, and hence there was no consideration for the assumption by defendant of the indebtedness due to plaintiff. Such position is not tenable. The defendant knew of plaintiff's claim, and the contract out of which it arose. It knew, by the contract under which plaintiff made the advances, that plaintiff was to be given a one-fourth interest in the mines. Knowing these facts, it passed resolutions in due form by which it expressly assumed the payment of the amount due plaintiff. It did this before it purchased the mines. Then in its deeds it was recited that the property was taken subject to the agreement made by Stephens and Banta with plaintiff. It has *719 never paid plaintiff, and has refused to pay him. It has the title to the mines, procured by virtue of its resolutions, assuming the amount due plaintiff, and yet refuses to pay such amount. It will not be allowed to keep the property and refuse to pay for it as it agreed." (See, also, Cal.Jur., vol. 6, sec. 279.)
The rule announced in the Washer case, supra, is clearly applicable to the case at bar and supports plaintiff's contention that it is entitled to judgment against defendant Beck for the unpaid balance of $2,500 on the purchase price of the mining claims in question.
[5] Defendants Huey and Urie contend that because the trial court did not find that plaintiff's assignors had assigned their interest in the contract of July 15, 1936, to it, plaintiff has no interest in the subject matter of this action. It is true that the trial court failed to find on this issue, but in view of the fact that the findings were prepared by counsel for defendants, we do not feel that they can, with very good grace, raise this point even if it were meritorious. However, the point is entirely without merit, as the contract between Huey and Urie and Beck, of July 24, 1937, provides that:
"Albert Beck hereby agrees to pay to the Pacific Venture Company, (plaintiff herein) or their assignors or successors in interest, the $2,500.00 mentioned in that certain agreement between John W. Huey, George G. Urie and Pacific Venture Company, and/or M. E. Rogers and John A. Hassell, dated July 15, 1936." This provision is clearly sufficient to vouchsafe a cause of action on behalf of the plaintiff against all of the parties to said agreement.
This is obvious for the reason that the only parties to the agreement of July 15, 1936, were M. E. Rogers and John A. Hassell as first parties and John W. Huey and George G. Urie as second parties. The agreement of July 24, 1937, recognizes the Pacific Venture Company, plaintiff herein, as being entitled to the benefits to which Rogers and Hassell were entitled under the agreement of July 15, 1936, by the following provision to wit:
"Albert Beck hereby agrees to pay Pacific Venture Company or their assignors or successors in interest, the $2,500 mentioned in that certain agreement between John W. Huey, George G. Urie and Pacific Venture Company, and/or M. E. Rogers and John A. Hassell, dated July 15, 1936." As this *720 agreement was signed by defendants Huey and Urie, it constituted an admission on their part that Pacific Venture Company had succeeded to the interest of Rogers and Hassell covered by the agreement of July 15, 1936, and since Huey and Urie were obligated to pay Rogers and Hassell $2,500 pursuant to the terms of said last-mentioned agreement, they are liable to plaintiff pursuant to their admission in the agreement of July 24, 1937, that plaintiff had succeeded to the interest of Rogers and Hassell covered by the agreement of July 15, 1936.
[6] Plaintiff contends that the agreement of July 24, 1937, between Huey and Urie and Beck creates a lien upon the mining claims in favor of plaintiff for the unpaid balance of $2,500 on the purchase price thereof. We cannot agree with this contention, as it does not appear from the terms of the agreement of July 15, 1936, between plaintiff's assignors and Huey and Urie that any claim of lien on said mining claims was reserved by plaintiff's assignors or that said property was impressed with any lien which plaintiff's assignors could enforce against said property. As we interpret said contract, plaintiff's assignors conveyed all of their right, title and interest in said mining claims to Huey and Urie so that the latter had the full power of disposition over them and plaintiff's assignors were entitled to the payment of the balance of the purchase price as a personal obligation of Huey and Urie. We do not construe the agreement of July 24, 1937, between Huey and Urie and Beck as creating a lien on said mining claims to secure the payment of the balance of the purchase price due plaintiff's assignors.
The judgment is reversed with directions to the trial court to enter judgment in favor of plaintiff and against defendants Huey, Urie and Beck for the sum of $2,500, with interest thereon at the legal rate from the 10th day of January, 1938.
Curtis, J., Edmonds, J., Shenk, J., and Gibson, C.J., concurred.
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225 S.E.2d 210 (1976)
Lawrence L. THURMOND
v.
Ralph N. STEELE, Commissioner, Department of Motor Vehicles, State of West Virginia.
No. 13672.
Supreme Court of Appeals of West Virginia.
June 1, 1976.
*211 Chauncey H. Browning, Jr., Atty. Gen., Henry C. Bias, Jr., Deputy Atty. Gen., Charleston, for appellant.
John S. Sibray, Charleston, for appellee.
WILSON, Justice:
The Commissioner of the Department of Motor Vehicles appeals from an order of the Civil Service Commission reinstating appellee Lawrence L. Thurmond to the position of Assistant Director, Driver's License Division, Department of Motor Vehicles, after he had been discharged from such position by the Commissioner of the Department of Motor Vehicles.
The principal question presented is whether a Civil Service protected employee of the State of West Virginia may be discharged for off-duty conduct not on State property and not involving the use of State equipment or vehicles.
The Civil Service Commission was apparently of the opinion that no such authority exists and that it had no authority to conduct hearings with reference to such matters except in cases of crimes involving moral turpitude.
This case arose out of events which are said to have occurred on May 6, 1975. Appellee Thurmond was driving his personal automobile and was admittedly not on State business. He was accused of driving while intoxicated, failing to obey an officer, driving recklessly and leaving the scene of an accident in which he had been involved.
On July 15, 1975, the Commissioner of Motor Vehicles wrote to Thurmond dismissing him under the provisions of Article XI, Section 2 of the Rules and Regulations of the Civil Service Commission.[1] Thurmond promptly appealed from this dismissal.
On October 14, 1975, the Municipal Court of the City of Charleston dismissed the charges of driving while intoxicated and failing to obey an officer but fined Thurmond $75.00 for reckless driving.
The Civil Service Commission considered this case as one which involved only the *212 formal conviction of the charge of reckless driving. In the belief that reckless driving is not a crime of moral turpitude justifying dismissal and in the further belief that it had no jurisdiction to govern the conduct of a State employee during his off-duty hours when he was not on State property nor using State-owned equipment or vehicles, the Civil Service Commission ordered Thurmond reinstated to his former position and directed that he receive all back pay from the date of his dismissal.
The appellant Commissioner of Motor Vehicles maintains that the letter of July 15, 1975, did not involve the dismissal of Thurmond on the grounds of his commission of a crime involving moral turpitude but rather involved alleged misconduct, apart from any allegation of crime, sufficiently related to the duties which Thurmond was required to perform to justify his dismissal from a position which required his participation in hearings and making administrative decisions with reference to the suspension or revocation of drivers' licenses for conduct of others similar to his own conduct on the occasion in question.
Under the provisions of Article XI, Section 2 of the Rules and Regulations of the Civil Service Commission, an appointing authority may dismiss an employee who ". . . is negligent or inefficient in his duties, or unfit to perform his duties, who is found to be guilty of gross misconduct, or who is convicted of any crime involving moral turpitude."
In this case, the employing authority stated in substance that it was prepared to prove not only the wrongful conduct of Thurmond but also the direct relationship between that wrongful conduct and the duties which Thurmond was responsible for discharging in the position which he held.
In view of the fact that the Civil Service Commission refused to receive that evidence, we do not endeavor to evaluate it because the record does not inform us as to what factual defense, if any, may be offered on behalf of the employee.
The precise question which is involved in this case has not previously been presented to this Court. We are now required to determine the purpose and effect of Article XI, Section 2 of the Rules and Regulations of the Civil Service Commission, as required by W.Va.Code 29-6-8.
The general purpose of the Civil Service System is ". . . to attract to the service of this state personnel of the highest ability and integrity . . ..", W.Va. Code 29-6-1, and to give to such personnel security of tenure so that they are not required to serve at the whim and will of the employer. Guine v. Civil Service Commission, 149 W.Va. 461, 141 S.E.2d 364 (1965).
It should be apparent that the State and its various agencies have reason to expect employees to observe a standard of conduct which will not reflect discredit upon the State and will not cause the public to lose confidence in either the ability or the integrity of the State's employees or create suspicion with reference to their capacity properly to discharge the duties of their positions.
We have not been cited to any case, and we do not find any, which holds that a State employee may not be disciplined for gross misconduct, not involving a crime of moral turpitude, if such gross misconduct occurs off the job and does not involve State property. Indeed, the cases which we have found from other jurisdictions clearly indicate that if a State employee's activities outside the job reflect upon his ability to perform the job or impair the efficient operation of the employing authority and bear a substantial relationship to the efficient performance of the employee's duties, disciplinary action is justified, and is not conditioned upon or limited by the outcome of any criminal charges which may have been brought against the employee. See Foster v. Department of Public Welfare, 159 So. 2d 515 (La.Ct.App.1963), cert. denied, 245 La. 800, 161 So. 2d 277 (1964), and Baron v. Commonwealth, State Civil Service Commission, 8 Pa.Cmwlth. 6, 301 A.2d 427 (1973).
The appellee here argues that the phrases "unfit to perform his duties" and "gross *213 misconduct" as used in Article XI, Section 2 of the Rules and Regulations of the Civil Service Commission, do not relate to circumstances occurring outside of the employment.
We do not find such narrow interpretations of the language of the Rules and Regulations to be in accord with the general purposes of the Civil Service System.
It is not our intention to establish any general rule which will serve to define what is or is not gross misconduct justifying discipline, suspension or dismissal. Each case must be determined upon the facts and circumstances which are peculiar to that case. We have no desire to establish any rule which would exact from State employees such perfection of conduct as to create an intolerable burden. We would protect the employee against frivolous, trivial and inconsequential charges; or charges based on conduct which has no rational nexus with the duties to be performed or the rights and interests of the public. See Guine v. Civil Service Commission, supra, and Mindel v. United States Civil Service Commission, 312 F. Supp. 485 (N.D.Calif., 1970).
If, however, the misconduct is of a substantial nature and can be shown to affect directly the rights and interests of the public by bearing directly in a substantial manner on the duties which the employee is required to discharge, then the employing authority and the Civil Service Commission have the power and the duty, upon such a showing, to enforce such remedial steps, including a dismissal, as may be found proper under all of the circumstances of the case.
In this case, the employing authority brought substantial charges against the employee and was prepared to offer proof of the same. It further asserted and offered to prove that the questioned conduct bore a direct relationship to the duties the employee was required to discharge and to the confidence and respect of the public. The Civil Service Commission should have heard the evidence of both the employing authority and the employee and should have disposed of the case in such manner as its view of the evidence indicated to it was proper.
Our holding in this respect will necessarily require further and perhaps extensive proceedings before the Civil Service Commission. So that unnecessary delays may be avoided, we are now required to review briefly certain questions regarding: (a) The adequacy of the notice previously given to the employee; and (b) the significance of the rule that the employee is charged with the burden of proof in a hearing before the Civil Service Commission.
The Civil Service Commission previously found that the letter of July 15, 1975, which was sent by the employing authority to the employee, was sufficient notice of the charges. We agree. The charges were well-stated, and gave the employee fair, reasonable and adequate notice. There is no sound basis for any claim of confusion or misunderstanding by him.
The Civil Service Commission indicated that the employee had the burden of proof and that if a hearing were held, it would require the employee to present his evidence first for the purpose of showing that the action of the employing authority was arbitrary or capricious. This Court has previously held in Childers v. Civil Service Commission, 155 W.Va. 69, 181 S.E.2d 22 (1971), that a State employee who has acquired permanent Civil Service status bears the burden of proof that his dismissal or other disciplinary action was arbitrary and capricious. See also In re Appeal of Prezkop, 154 W.Va. 759, 179 S.E.2d 331 (1971). A distinction must be made between the "burden of proof" and going forward with the evidence. As applied to hearings before the Civil Service Commission, the employee appealing his termination carries the burden of proof and must in the end establish that his termination was without cause. That burden never shifts. However, it is incumbent upon the employing authority to first present its evidence justifying its action. Any other approach would lead to absurd results and procedural chaos.
*214 In accordance with the views hereinabove expressed, we reverse the ruling of the Civil Service Commission and remand this case to said Commission for further proceedings not inconsistent with this opinion.
Reversed and remanded.
NOTES
[1] The text of the letter was as follows:
"Under the provisions of Article XI, Section 2 of the Civil Service Rules and Regulations, you are hereby dismissed effective fifteen (15) days from the date of this letter.
"I feel your alleged offenses of driving while intoxicated, leaving the scene of an accident and failure to obey an officer has rendered you unsatisfactory to perform the duties required as assistant director of the driver's license division. I do not feel the public or this department could have proper confidence in you to hold hearings and make other administrative decisions relative to persons involved with possible suspensions or revocations of their driver's licenses."
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260 Ga. 447 (1990)
396 S.E.2d 885
IN THE INTEREST OF J. H.
S90A0730.
Supreme Court of Georgia.
Decided October 17, 1990.
Kevin F. Forier, for appellant.
Lewis R. Slaton, District Attorney, Rebecca A. Keel, Lyn K. Armstrong, Joseph J. Drolet, Assistant District Attorneys, Michael J. Bowers, Attorney General, for appellee.
BELL, Justice.
This case concerns whether J. H., a sixteen-year-old girl, should be transferred from juvenile court to superior court for prosecution for murder. The juvenile court ordered the transfer, and J. H. appeals. J. H. raises four arguments. They are that the state did not present sufficient evidence to justify the transfer in view of the juvenile court's finding that J. H. is amenable to treatment in the juvenile system; that the juvenile court erred in considering a statement made by J. H. in violation of her Miranda rights in determining that J. H. should be transferred to superior court; that the transfer order should be set aside because the juvenile court erred in allowing a reporter to remain in the courtroom during the transfer hearing; and that the juvenile court should have ordered J. H. committed to the Division of Mental Health of the Department of Human Resources because a psychiatrist who performed a court-ordered evaluation of J. H.'s mental condition concluded that J. H. was committable as mentally ill under the laws of this state. We find no error in the transfer order, and affirm.
The juvenile court held two hearings pursuant to OCGA § 15-11-39 *448 to determine whether J. H. should be transferred to superior court. At the hearings, the court permitted, over J. H.'s objection, a reporter for the Atlanta Journal-Constitution to be present. The court ordered the reporter not to report J. H.'s name in any fashion.
At an August 22, 1989, hearing, Officer J. F. Jones testified that on March 26, 1989, he was called to the apartment of J. H.'s mother. There, he found J. H.'s mother lying on her bed, with a bullet wound to the head. J. H. had called the police to the apartment. Officer Jones testified that after processing the crime scene he and other officers asked J. H., and as many of the victim's friends and neighbors as the officers could locate, to come to the police station. According to Jones, eight or nine people, including J. H., came to the police station. At that time J. H. was not a suspect. Officer Jones stated that when he was talking with J. H. she told him that she had shot her mother while her mother was asleep. Officer Jones stated that he then asked J. H. where the gun was located. J. H. told him that she had thrown the gun into a dumpster. J. H. then led Officer Jones to the dumpster, where he recovered the gun.
After recovering the gun, Officer Jones questioned J. H. again, without giving her Miranda warnings, and received another statement from her, in which she admitted planning, committing, and covering up the murder of her mother.
The juvenile court suppressed the statement J. H. made after she took Officer Jones to the dumpster ("the suppressed statement"), but declined to suppress the statement J. H. made before they went to the dumpster.
Dr. Annie Cooper, a state psychiatrist whom the court had ordered to prepare a report regarding J. H.'s mental condition, was the last witness to testify at the August 22 hearing. Dr. Cooper testified that J. H. was committable to an institution for the mentally ill, and that her needs would best be met in juvenile court.
Following the August 22 hearing, the court entered an order stating that it desired further psychiatric testimony regarding J. H. The court ordered a Dr. Lloyd Baccus to prepare a report on J. H.'s mental condition.
The transfer hearing resumed September 26, 1989. Dr. Baccus testified that he thought J. H. was mentally ill but was not committable because she did not present a danger to herself or anyone else. He also felt that with sufficient care J. H. could be rehabilitated, and that it would be in her interest to be treated in the juvenile system. He stated that she would be a good candidate for outpatient treatment.
Following the September 26 hearing, the juvenile court ruled there were reasonable grounds to believe that the defendant committed the delinquent act alleged; that J. H. is not committable to an institution for the mentally retarded or mentally ill; that although J. *449 H. was amenable to treatment in the juvenile system, due to the heinous nature of the crime the public's interest in treating J. H. as an adult outweighed J. H.'s interest in being treated as a juvenile; and that it was in the best interest of J. H. and the community for her to be transferred to superior court.
1. J. H. first contends that the juvenile court erred in ordering the transfer because the state failed to carry its burden of showing that the community's interest in treating the child as an adult out-weighed the child's interest in being treated as a juvenile. We find no error. The juvenile court properly relied on the heinous nature of the offense in determining that the community's interest in treating J. H. as an adult outweighed J. H.'s interest in being treated in the juvenile system. See State v. M. M., 259 Ga. 637, 640 (3) (386 SE2d 35) (1989).
2. J. H. next argues that the transfer hearing was not held in conformity with OCGA § 15-11-31 (b), as is required by § 15-11-39 (a) (1). OCGA § 15-11-31 (b) prohibits the use of statements made by juveniles when those statements "would be constitutionally inadmissible in a criminal proceeding." J. H. argues the juvenile court violated § 15-11-31 (b) by relying on the suppressed statement as evidence that the crime was heinous enough to warrant transfer to superior court. Having reviewed the record, we find no evidence that supports J. H.'s allegation that the court considered the suppressed statement as evidence of the heinous nature of the crime. Moreover, the record shows that evidence independent of the suppressed statement was introduced that demonstrated the heinous nature of the offense. For these reasons, we find no merit to J. H.'s contention that the transfer hearing did not conform to § 15-11-31 (b).
3. J. H. next contends that the transfer hearing was not held in conformity with OCGA § 15-11-28 (c), as is required by OCGA § 15-11-39 (a) (1). J. H. argues that § 15-11-28 (c) requires the juvenile court to exclude the general public from transfer hearings, and that the court violated that statute by allowing a reporter to remain in the courtroom. J. H. argues the transfer should be set aside for this reason. We find no error. Although § 15-11-28 (c) provides that the general public shall be excluded from transfer hearings, § 15-11-28 (c) grants the juvenile court the discretion to make exceptions to the general rule for any "persons ... the court finds have a proper interest in the proceeding or in the work of the court." See generally Florida Publishing Co. v. Morgan, 253 Ga. 467 (322 SE2d 233) (1984). We conclude the juvenile court properly exercised its discretion to allow the reporter to remain in the courtroom.
4. J. H. finally argues that § 15-11-40 (b) required the juvenile court to commit J. H. to the Department of Human Resources because Dr. Cooper concluded that J. H. was committable as a mentally ill child. We find no error.
*450 OCGA § 15-11-40 (b) provides that if a court requests a report of a child's mental health, and the report concludes that
the child is committable under the laws of this state as a mentally retarded or mentally ill child, the court shall order the child detained and shall proceed within ten days to commit the child to the Division of Mental Health, Mental Retardation, and Substance Abuse of the Department of Human Resources.
OCGA § 15-11-40 (c) provides that "[i]f the child is found not to be committable, the court shall proceed to the disposition or transfer of the child as otherwise provided by this article."
J. H. appears to be arguing that, once Dr. Cooper concluded that J. H. was committable, the juvenile court had no discretion to order a further report of J. H.'s mental condition, but instead had to commit J. H. to the Department of Human Resources. However, this argument must fail because § 15-11-40 does not limit the trial court to ordering one report. Moreover, because Dr. Cooper and Dr. Baccus reached differing conclusions regarding whether J. H. was committable, the juvenile court was faced with a factual question regarding whether J. H. was committable, and the court decided she was not. We thus conclude that the court was not required to commit J. H. under § 15-11-40.
Judgment affirmed. All the Justices concur.
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196 Ga. App. 523 (1990)
396 S.E.2d 271
HALL
v.
THE STATE.
A90A0706.
Court of Appeals of Georgia.
Decided July 3, 1990.
Rehearing Denied July 25, 1990.
*530 Chew & Lamberth, Walter S. Chew, Jr., for appellant.
John R. Parks, District Attorney, Barbara A. Becraft, Assistant District Attorney, for appellee.
SOGNIER, Judge.
Claude R. Hall was convicted of child molestation, and he appeals.
The evidence adduced at trial established that the victim, S. F., who was five years old at the time of the alleged abuse and six years old at trial, was visiting the home of her aunt, Sharon Thomas. Present in the house were her aunt, grandmother, great uncle, and appellant, a family friend. The testimony was in conflict as to the presence that day of the victim's uncle, Willie Thomas, and another relative. After the trial court ruled that S. F. was competent to testify, she testified that when she was in the kitchen, appellant came into the room and hurt her by touching her between her legs inside her underpants. Testimony revealed that the victim said nothing about this incident until five days later, when her foster mother, Gladys Joyner, was bathing her. At that time, S. F. told Joyner that she was sore and that appellant had "put his finger in her." Joyner notified Polly Perry, a social worker at the Macon County DFCS, who testified that she interviewed S. F. at school and, when S. F. confirmed the allegation, immediately made appointments for the victim with Dr. Michael McDonald, a pediatrician, and Dr. Randy Ryals, a clinical psychologist.
*524 McDonald testified that he examined S. F. the afternoon he was contacted by Perry, and found evidence of both an old trauma to the hymenal ring and a fresh abrasion on the labia minora which was not more than two weeks old and was consistent with finger manipulation.
Ryals testified that he had seen S. F. several times, that she was of low average intelligence, that she was depressed and hostile toward adults, and that her behavior was consistent with the pattern of behavior known as child sexual abuse accommodation syndrome, which he described and explained.
Appellant testified in his own behalf and denied that he was ever alone with S. F. or touched or molested her. S. F.'s aunt and grand-mother testified that on the day in question, during his visit to the Thomas home appellant never left the living room. They also testified that S. F. had a habit of making up stories or telling lies.
1. Although the evidence was in conflict and depends largely on the credibility of the six-year-old victim, the credibility of witnesses and the resolution of such conflicts are for the jury. On appeal of a conviction based on a jury verdict, this court resolves all conflicts in favor of the verdict and examines the evidence in a light most favorable to support that verdict. Harris v. State, 188 Ga. App. 795 (374 SE2d 565) (1988). We find that the evidence presented was sufficient to authorize the jury to find appellant guilty of child molestation under the standard set forth in Jackson v. Virginia, 443 U.S. 307 (99 SC 2781, 61 LE2d 560) (1979). Harris, supra.
2. The State and appellant both moved the court in limine to exclude certain evidence. The State sought to prevent appellant from introducing evidence of a prior unrelated sexual molestation of S. F. by an adult family member and the report of another "touching" incident involving S. F. and a neighbor child. Appellant sought to prohibit the State from introducing evidence of the child sexual abuse accommodation syndrome. The trial court granted the State's motion but denied that of appellant. As a result of those rulings, expert evidence was introduced detailing the components of the child sexual abuse accommodation syndrome, and other State witnesses described behavior they observed in S. F., including withdrawal, bedwetting, nightmares, and hostility to adults, which are consistent with the syndrome. No evidence was introduced regarding the prior molestations. Appellant enumerates as error both the grant of the State's motion in limine and the denial of his own, and because we find these enumerations to be interrelated, we address them together.
In its order denying appellant's motion for a new trial, the trial court found that it had erred by denying appellant's motion in limine as to evidence of the child sexual abuse accommodation syndrome, *525 but that its error was harmless in light of the testimony at trial. We disagree, and find that the trial court's original denial of appellant's motion was correct. In Allison v. State, 256 Ga. 851 (353 SE2d 805) (1987), expert testimony regarding the "lineaments of the child [sexual] abuse [accommodation] syndrome, as well as testimony that this child exhibited several symptoms that are consistent with the syndrome," id. at 853 (6), was held to be admissible, because "[l]aymen would not understand this syndrome without expert testimony." Id. at 852 (2). We see no distinction between the facts in the case sub judice and those in Allison which would necessitate the exclusion of evidence regarding the syndrome. Accordingly, we find that the trial court did not err by denying appellant's motion in limine.
As to the State's motion, this court has held that evidence of a prior molestation or previous sexual activity on the part of the victim is not relevant in a child molestation case to show either the victim's reputation for nonchastity or her preoccupation with sex. See Woods v. State, 187 Ga. App. 105 (1) (369 SE2d 353) (1988). In the case sub judice, however, appellant did not seek to introduce the evidence of prior molestations for either of those purposes, but rather to establish other possible causes for the behavioral symptoms exhibited by the child, which were described as typical of child sexual abuse accommodation syndrome, and to explain the medical testimony regarding her injuries. "The fact that evidence may be inadmissible for one purpose does not warrant its exclusion when it is relevant and admissible for another purpose.'" Pugh v. State, 191 Ga. App. 394, 396 (382 SE2d 143) (1989). We find the evidence in question here was admissible for the purpose intended by appellant, and its exclusion was error. Testimony regarding the syndrome and all the child's symptoms and injuries having been properly admitted, the evidence regarding other possible causes of her behavior and injuries was necessary to prevent the jury from reaching the unwarranted conclusion that the only possible explanation for the medical findings and the existence of behavior consistent with the child sexual abuse accommodation syndrome was that the victim had been molested by appellant. Moreover, a jury's awareness that the victim had been molested previously could affect its judgment of the victim's credibility, as the credibility of a young child's report of an improper touching must necessarily be greater if the child has had no occasion to learn about such behavior from prior incidents.
In light of the major conflicts in the testimony, and the fact that the evidence supporting the jury's conviction of appellant was not overwhelming, but was largely dependent on the testimony of the victim (and that of others as to what she told them), the exclusion of this evidence was not harmless, as we cannot say that it is "`highly probable that the error did not contribute to the judgment.'" Johnson *526 v. State, 238 Ga. 59, 61 (230 SE2d 869) (1976). Accordingly, appellant must be afforded a new trial.
3. We address appellant's remaining enumerations for guidance upon retrial. We find no merit in appellant's contention that evidence regarding the child sexual abuse accommodation syndrome may be used by the State only in rebuttal, after a defendant has placed his character in issue. Evidence regarding this syndrome differs from that of "battering parent syndrome," referred to in Sanders v. State, 251 Ga. 70, 73-77 (3) (303 SE2d 13) (1983), because the evidence regarding child sexual abuse accommodation syndrome admitted here addresses the behavior of the victim rather than the accused. Consequently, such evidence does not place the character of the defendant in issue, and thus its admission is not limited to rebuttal of character evidence previously introduced by the defendant. Compare Sanders, supra at 76 ("battering parent syndrome" held to place accused's character in issue); Smith v. State, 247 Ga. 612 (277 SE2d 678) (1981) (evidence of "battered wife syndrome" held to place defendant's character in issue). Accordingly, the trial court did not err by permitting the State to introduce evidence regarding the syndrome during its case in chief. See Keri v. State, 179 Ga. App. 664, 665 (1) (347 SE2d 236) (1986).
4. OCGA § 24-3-16 provides that "[a] statement made by a child under the age of 14 years describing any act of sexual contact or physical abuse performed with or on the child by another is admissible in evidence by the testimony of the person or persons to whom made if the child is available to testify in the proceedings and the court finds that the circumstances of the statement provide sufficient indicia of reliability." Appellant contends that although S. F. was available to testify, she did not meet the competency requirements of OCGA § 24-9-5, and therefore there existed insufficient "indicia of reliability" to permit others to testify as to her statements to them.
We note initially that appellant has not enumerated as error the trial court's ruling that S. F. was a competent witness, and accordingly he may not expand this enumeration to cover that point. See generally Bowen v. State, 191 Ga. App. 760 (382 SE2d 694) (1989). Although consideration of this point therefore would normally be precluded, we address appellant's argument because the issue may recur at trial.
The transcript shows that upon examination by the trial court, S. F. could not define exactly what truth or a lie was, but testified she knew it was bad to tell a lie, that if she told a lie she would go to jail, and that she was going to tell the truth about what really happened. The trial court found her a competent witness pursuant to OCGA § 24-9-5. We do not find that ruling an abuse of its discretion in doing so, and find that her own competency as a witness combined with the *527 circumstances under which she made her statements to others provide sufficient indicia of reliability to permit their admission into evidence pursuant to OCGA § 24-3-16.
5. We find no support in the record for appellant's contention that the State impermissibly placed his character in issue when the prosecutor asked defense witness Johnny Bateman whether appellant ever visited the Thomas home when Mr. Thomas was not at home.
6. We cannot agree with appellant's contention that the trial court erred by allowing the State to impeach two defense witnesses by introducing into evidence certified copies of their felony convictions for possession of marijuana. Appellant maintains admission of this evidence was error because the offenses for which they were convicted bear no relationship to the issue of truth. In Georgia, a witness may be impeached by proof that he or she has been convicted of a crime of moral turpitude, see Beach v. State, 138 Ga. 265 (1) (75 S.E. 139) (1912), and "any crime designated as a felony and punishable by imprisonment [constitutes] a crime involving moral turpitude within the meaning of the law." Lewis v. State, 243 Ga. 443, 445 (254 SE2d 830) (1979).
7. Contrary to appellant's contention, there was evidence before the jury supporting the prosecutor's remarks in closing argument that the victim was told by her aunt and grandmother not to report the alleged molestation. Although in their testimony the victim and her relatives denied this, Perry testified without objection from appellant that S. F. told her that her grandmother and aunt had cautioned her not to disclose the alleged molestation to others or she would not be allowed to visit with them. Perry's testimony regarding the victim's prior inconsistent statement to her had probative value under Gibbons v. State, 248 Ga. 858, 862 (286 SE2d 717) (1982). Accordingly, since there was evidence from which the prosecutor could conclude that the remarks had been made by the victim's relatives, we find no error in the trial court's failure to rebuke the prosecutor or instruct the jury to disregard these remarks. See generally Clark v. State, 146 Ga. App. 697 (3) (247 SE2d 221) (1978).
8. While the record does not indicate the prosecutor compared appellant to certain notorious criminals, as he contends, the transcript does show that the names of well known criminals were mentioned by the prosecutor in her closing argument to illustrate by example her point that looks may be deceptive, and one may not judge the guilt or innocence of one accused of serious crime by his outward physical appearance. Although it may be better practice to omit such references, our courts have found no error in similar illustrations. See, e.g., Martin v. State, 223 Ga. 649, 650-651 (2) (157 SE2d 458) (1967); Jordan v. State, 172 Ga. App. 496, 497-498 (2) (323 SE2d 657) (1984).
9. We find no merit in appellant's contention that the trial court *528 failed to give a complete charge on the impeachment of witnesses. The jury was charged at length on the credibility of witnesses and was instructed that it was solely within their province to determine which witnesses to believe or not believe, and which testimony to credit. They were also instructed fully on the impeachment of witnesses by proof of conviction of a crime of moral turpitude, and both charges were sufficiently clear to be understood by jurors of ordinary capacity. See generally Feblez v. State, 181 Ga. App. 567, 568-569 (2) (353 SE2d 64) (1987).
Judgment reversed and case remanded. Carley, C. J., Banke, P. J., Birdsong, Pope and Cooper, JJ., concur. Deen, P. J., McMurray, P. J., and Beasley, J., dissent.
McMURRAY, Presiding Judge, dissenting.
I must respectfully dissent from the holding of the majority that there must be a retrial of the case sub judice.
In his second enumeration of error, appellant contends the trial court "erred in granting the State's Motion in Limine preventing the Appellant from eliciting testimony from Polly Perry [Social Service Specialist One with the Macon County Family & Children's Services] concerning a neighbor's child sexually molesting S. F. [the victim], from eliciting testimony from Randy Ryals [Director of Counseling Associates, an affiliate of the Bradley Center, a private psychiatric hospital] about the effect of prior sexual molestation of S. F., in regards to the Child Abuse Accommodation Syndrome and eliciting testimony from Dr. McDonald [an osteopath in private practice] as to the effects of the prior sexual molestation of S. F. in regards to his medical findings, Child Abuse Accommodation Syndrome, and inconsistent statements made by S. F. to him and the failure of the Trial Court to grant a new trial on these grounds."
In its reversal of the trial court, the majority reasons that "appellant did not seek to introduce the evidence of prior molestations for either of those purposes [victim's reputation for nonchastity or her preoccupation with sex], but rather to establish other possible causes for the behavioral symptoms exhibited by the child, which were described as typical of child sexual abuse accommodation syndrome, and to explain the medical testimony regarding her injuries.... [T]he evidence regarding other possible causes of her behavior and injuries was necessary to prevent the jury from reaching the unwarranted conclusion that the only possible explanation for the medical findings and the existence of behavior consistent with the child sexual abuse accommodation syndrome was that the victim had been molested by appellant. Moreover, a jury's awareness that the victim had been molested previously could affect its judgment of the victim's credibility, as the credibility of a five-year-old child's report of an improper *529 touching must necessarily be greater if the child has had no occasion to learn about such behavior from prior incidents."
In Decker v. State, 139 Ga. App. 707 (2), 708 (229 SE2d 520) (1976), (a child molestation case), this Court held that "[i]nquiry into the prosecutrix' past sexual experiences are irrelevant to whether or not she was molested by this defendant."
In my view, the majority, by its holding, will permit the introduction of evidence of the victim's prior molestation by an indirect method, when this same evidence is prohibited from introduction by a direct method.
I would affirm the trial court.
I am authorized to state that Presiding Judge Deen joins in this dissent.
BEASLEY, Judge, dissenting.
I respectfully dissent because in this case, while the evidence may have been marginally relevant, its absence could not have made a difference.
The earlier molestation by an adult had occurred about two years previously. The doctor who physically examined the victim testified that a child age 3-1/2 (the age of the child at the time of the earlier adult molestation) would not have a vivid memory of abuse. While it could have exacerbated or contributed to some of the syndrome manifestations such as withdrawal, bedwetting, nightmares, and hostility to adults, defendant elicited from the examining expert that knowledge of the earlier incident would not have changed his medical testimony. He had testified that the child had a large fresh abrasion brought on by trauma occurring within the past week and was still red, sore-looking, very tender to the touch, and in the process of healing. He also testified that the abrasion was consistent with finger manipulation or fondling of the genitalia area, and that disruption of the hymen ring was old and not consistent with the incident for which defendant was on trial. Evidence of the earlier incident, to which a family member pled guilty, could not have affected the evidence of recent trauma.
As to the "touching" incident by a neighbor's child five or six months previously, it is even more remote from the purpose for which defendant sought admission. Defendant's profferred evidence was the testimony of the social services worker who conducted an interview of the child about 5 months before the incident on trial. The child said that one of the girls next door rubbed between her legs when they were playing. She indicated no fear of this girl and it appeared to the worker that the children had been "playing doctors."
I am authorized to state that Presiding Judge Deen joins in this dissent.
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549 A.2d 644 (1988)
Sarah E. QUESNEL
v.
Carl R. QUESNEL.
No. 86-020.
Supreme Court of Vermont.
June 24, 1988.
*645 Patrick L. Biggam, Montpelier, for plaintiff-appellee.
McKee, Giuliani & Cleveland, Montpelier, for defendant-appellant.
Before ALLEN, C.J., PECK, J., BARNEY, C.J. (Ret.), COSTELLO, District Judge (Ret.) and MARTIN, Superior Judge, Specially Assigned.
ALLEN, Chief Justice.
The parties were divorced by decree of the Washington Superior Court after a contested hearing. Defendant husband appeals the trial court's property disposition and its award of permanent maintenance to plaintiff. We affirm.
Defendant first complains that the trial court's division of the marital assets is inequitable because of the respective contributions of the parties of the marital estate. He also assigns error to the award of maintenance, arguing that the court wrongly attempted to equalize the monthly incomes of the parties. Defendant maintains further that the court awarded funds to plaintiff for the education of the parties' adult children and that such an award is not authorized by statute. Finally, defendant contends that the court erred in ordering him to maintain a life insurance policy naming plaintiff as beneficiary.
The primary factor in the breakup of the parties' twenty-four year marriage was a severe drinking problem on the part of defendant. Although divorce had been discussed previously, plaintiff's filing was precipitated by a doctor's announcement that defendant would die within six months if he continued his abuse of alcohol. At the time of the final hearing, plaintiff was working as a customer service representative for an insurance agency, making about $11,500 per year. Defendant was a civil engineer for the state earning approximately $30,000 annually. The parties have two adult children who are attending college. The court's order awarded plaintiff 58.6% and defendant 41.4% of the total marital assets, ordered defendant to make maintenance payments of $500 per month and to maintain his life insurance policy or another policy of equal value naming plaintiff as beneficiary.
Defendant's first argument on appeal is that the trial court's division of the marital assets was inequitable. Defendant *646 focuses on the disparity in the parties' monetary contribution to the marriage. He alleges that he contributed 81.7% of the marital estate through his wages. It is clear from the record that the court did consider the contributions of the defendant to the marital estate. It concluded, however, that the significantly lower earning capacity of the plaintiff, the length of the marriage, and the respective merits of the parties warranted a larger award of the marital assets to her. The trial court has wide discretion in formulating awards, and under the circumstances here disclosed we find no abuse of discretion. See Philburt v. Philburt, 148 Vt. 394, 533 A.2d 1181 (1987).
Defendant also challenges the constitutionality of 15 V.S.A. § 751(b)(10) and (11). This challenge is raised for the first time on appeal. Defendant makes no showing of any extraordinary circumstances that would suggest that we should address the issue, and we decline to do so. See State v. Maguire, 146 Vt. 49, 54, 498 A.2d 1028, 1031 (1985).
Defendant next directs our attention to the award to plaintiff of a certificate of deposit in the amount of $20,000. He argues that the award was improper because it was intended for the education of the parties' adult children. In Beaudry v. Beaudry, 132 Vt. 53, 56, 312 A.2d 922, 925 (1973), we held that a trial court's discretion in the area of property settlements and support orders "does not extend to the creation of obligations regarding the children of the parties other than provision for their care, custody and maintenance during minority." Plaintiff requested that the $20,000 be awarded to her and concedes that her stated intention was to use the money to complete the education of the children. But the court imposed no limitations on the award, and the plaintiff was free to use the monies in any way she saw fit. There is no showing that the court abused or withheld its discretion and no error appears.
Defendant attacks the court's award of separate maintenance, arguing that the court erroneously attempted to equalize the incomes of the parties. He maintains that it is inequitable to equalize the income of the parties "when the disparity of training and professional attainment is no different than a doctor and his secretary...." He suggests, instead, that plaintiff could augment her salary by investing the cash settlement awarded by the court, so as to "attain such a standard of living as benefits a person trained as she is and so placed in the employment scale." We note first that the record belies the assertion that the court was attempting to equalize the parties' income. Our calculations indicate that plaintiff's salary and maintenance payments combined will total about $17,000 per year; defendant's annual income after payment of maintenance, will be approximately $24,000.
Even were defendant correct in his contention, however, we would find no error. Defendant has the burden of showing that there is no reasonable basis to support the maintenance award. Buttura v. Buttura, 143 Vt. 95, 99, 463 A.2d 229, 231 (1983). Under the provisions of 15 V.S.A. § 752(a), a court may properly order maintenance payments if it finds that the spouse seeking maintenance lacks sufficient assets and income to "provide for his or her reasonable needs," and "is unable to support himself or herself through appropriate employment at the standard of living established during the marriage...." 15 V.S.A. § 752(a)(1) and (2) (emphasis added). Here, the court's maintenance award is supported by its findings, and defendant has failed to carry his burden on appeal.
Defendant also challenges the court's requirement that he maintain his current life insurance policy, or another policy of "like amount," naming plaintiff as beneficiary. He cites 15 V.S.A. § 762, which provides that a court "may assign insurance benefits to a spouse or children, and may require the spouse who is required to make the assignment to execute a blanket assignment giving notice of the assignment to the provider of the insurance benefits." Defendant argues that this section does not empower a trial court to order that an insurance contract be maintained. *647 We disagree. The statute refers not to the cash value of the insurance policy but to its benefits. If the maintenance of an existing policy could not be ensured, then an assignment of benefits would have little meaning.[1] We hold that, in cases where an insurance policy is already in effect, § 762 authorizes the trial court to order that the insured party maintain the policy for the benefit of the spouse.[2]
AFFIRMED.
PECK, Justice, concurring in part and dissenting in part.
I concur with the resolution reached by the majority on all issues except that relating to maintenance by defendant of his current life insurance policy for the benefit of the plaintiff. As to this latter issue I must dissent.
I have no quarrel, as such, with the holding of the majority that, "in cases where an insurance policy is already in effect, [15 V.S.A.] § 762 authorizes the trial court to order that the insured party maintain the policy for the benefit of the spouse." In this case, however, the court went beyond simply ordering defendant to maintain his existing policy. The court's order purported to offer defendant an option to maintain either his current policy or "another life insurance policy of like amount."
Passing for the moment the probable prejudice to the defendant resulting from the court's order, I note that, to the extent the order addresses the insurance policy requirement, it is couched in the alternative. Thus, at the very outset, the order violates our own general rule that "a judgment must not be ... in the alternative." Lash Furniture Co. v. Norton, 123 Vt. 226, 228, 185 A.2d 734, 736 (1962). I do not find this precedent to have been overruled or modified.
Of even more egregious concern, however, is the fact that the alternative insurance segment of the order is not supported at any level as to its viability. The findings, certainly, are a blank on the question, as well they might be; I am unable to find even a scintilla of evidence from which the trial court might have determined that defendant's option to obtain another policy was at all viable. It was simply plucked out of the air, sua sponte, without the slightest opportunity afforded defendant to present evidence on the question should be desire to do so.
It is no answer to say that defendant failed to request a finding, and, therefore, waived it. See V.R.C.P. 52(a). I cannot believe that the majority intends to go so far as to hold that a judgment does not require some evidence in the record to support it. It is puzzling, moreover, how the defendant could be expected to request a finding on a matter that was not even in the case, and which he had no earthly reason to anticipate.
I cannot, of course, overlook the question of prejudice. Normally, error which does not result in prejudice will not require reversal. Corti v. Lussier, 140 Vt. 421, 424, 438 A.2d 1114, 1116 (1981). But in this case, without the benefit of evidence, nothing can be determined one way or the other. We can only speculate on the possibilities (obviously, defendant could not present or argue facts outside of the record in his *648 appeal to this Court, even though he never had the opportunity to do so below).
The possibilities of prejudice here, however, are several and indeed, probable. Defendant is older now than at the time his current policy went into effect; consequently, the premiums payable on a second policy would be greater. Defendant's health has been poor in the past, raising the question of how insurable at all he is now, and whether the premiums, because of his greater age and past health problems, would be within his means. Defendant is a state employee; it is, therefore, possible that the source of his current insurance is through participation in the state group plan, partially funded by the state. If he is in fact a member of this plan, his participating contributions are well below the premiums he would be required to pay for life insurance outside of the employees' plan, assuming he is insurable at all.
This case is a good example of why orders in the alternative are not favored. See Lash, 123 Vt. at 228, 185 A.2d at 736. If they are ever justified, they are a mockery and a cruel practical joke if they are not based on sufficient evidence to demonstrate that the alternatives are truly viable and not merely window dressing, more hollow and seeming than real. It may be true that alternatives, in any context, are designed as an opportunity to select the most advantageous or desirable or the least objectionable of two possibilities. But they are not true alternatives at all if one of the choices is an impossibility. That may or may not be the case here; we just don't know. It is an order without support and potentially prejudicial.
The majority declines to review the issue addressed in this dissent on the grounds that it was not raised below, nor appealed or briefed here. I believe this claim is not completely accurate. In any event, assuming it is correct, it is overly technical and inconsistent with actions taken by this Court in other cases in the interests of justice.
Defendant recites in his brief:
The literal reading of [15 V.S.A. § 762] does not allow or authorize any court to require a party to a divorce [to] contract for, maintain, take out, or pay premiums on an insurance contract.
It is only authority to order an assignment of any insurance benefits in existence at the time of the hearing on the merits.
If the option given defendant, to take out another policy "of like amount" was viable, and defendant was in a position to take advantage of it, this language of the brief is inclusive of both options; in fact, it seems to slant more strongly toward the alternative. In any event, the first sentence expresses a clear objection to both options: "maintain, take out, or pay premiums."
The point is not the merits of defendant's position. It merely demonstrates that the issue was adequately raised and briefed.
This Court has, in past cases and in the interests of justice, addressed, sua sponte, issues which had not been raised or briefed: "We have addressed the issue upon our own motion because of its `possible adverse effect on the fair administration of justice ....'" State v. Bergerson, 144 Vt. 200, 204, 475 A.2d 1071, 1074 (1984) (citation omitted). Apparently, the majority intends to be extremely selective in deciding when it will and will not "do justice" vis-a-vis a purely technical obstruction.
There are analogous circumstances under which this Court has, many times, by-passed technical faults by treating an improper procedure as something else which would have been appropriate. Thus, in State v. Dean, 148 Vt. 510, 536 A.2d 909 (1987), an attempt to reach this Court improperly by a direct appeal was treated "as if it were based on a post-conviction relief proceeding and [thereby reached] the merits." Id. at 512 n. 1, 536 A.2d at 911 n. 1. In another case we treated an attempted appeal "as a petition for extraordinary relief properly filed in this Court." Pfeil v. Rutland District Court, 147 Vt. 305, 308, 515 A.2d 1052, 1055 (1986). Similarly, in a third decision, involving a juvenile, an attempt *649 to appeal to this Court under V.R. A.P. 5(b)(1) (interlocutory appeal) was denied, but, in the interests of justice to the appellant, the trial court's order was treated as final, State v. Lafayette, 148 Vt. 288, 292, 532 A.2d 560, 562 (1987); a potential injustice was thus obviated.
Few areas of human concern are as tightly and as mystifyingly bound up with the red tape of technicalities as the law. To the average layman they are often as frustrating and arcane as a dead language: "[I]n these nice sharp quillets of the law, Good faith, I am no wiser than a daw."[*] But some technicalities are essential; else the law would sink into a morass of cases that go on endlessly and defy resolution. In short, technicalities, however mysterious, are designed to expedite justice, not to frustrate it or to work injustice; they should be resorted to judicially and fairly. Among the worst enemies of justice, it seems to me, are those who adhere rigidly and literally to technical details without regard for the inherent power of the courts, within reasonable limits, to do justice under the law.
The insurance issue as raised by the defendant in this case may lack some literal specificity as it relates to the option. It seems to me, nevertheless, as I have suggested and, I think, demonstrated above, it is sufficiently within the broader scope of the issue as it does appear in his brief, to justify being "treated as" included therein, at least by a fair implication. Applying the same principle employed to overcome technicalities in those cases cited above (and many others), the interests of justice would also be served here.
I would affirm as to the other issues and reverse and remand for further proceedings on the life insurance matter.
NOTES
[1] Defendant also cites 24 Am.Jur.2d Divorce § 912 for the proposition that a court cannot require one spouse to maintain life insurance for the benefit of the other where the policy has no current cash value and is of benefit only upon death of the insured. This rule is not the law in Vermont, as § 762 makes clear.
[2] We decline to address the issue raised in the dissent. The appellant made no claim in the trial court or this Court that the court erred in granting the option complained of in the dissent. In his motion to amend the judgment order, the defendant simply stated that the court could not order him to name the plaintiff as primary beneficiary of a life insurance policy. The issue presented for review in appellant's brief in this Court was whether the trial court abused its discretion "by ordering defendant to maintain a life insurance policy naming plaintiff as a beneficiary and pay the premiums thereon." (Emphasis added). He concludes his argument by asserting that the "court exceeded its jurisdiction to so award the contract ...." Issues not raised, appealed, and briefed will not be considered. Hilder v. St. Peter, 144 Vt. 150, 165, 478 A.2d 202, 211 (1984).
[*] Shakespeare, Henry VI, Pt. 1, Act II, Sc. 4.
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Order entered May 22, 2014
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-00546-CR
No. 05-13-00547-CR
EDGAR ALBERTO ROMO, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 199th Judicial District Court
Collin County, Texas
Trial Court Cause Nos. 199-82866-2012, 199-81976-2011
ORDER
The State’s May 20, 2014 second motion for extension of time to file the State’s brief is
GRANTED. The State’s brief received by the Clerk of the Court on May 20, 2014 is DEEMED
timely filed on the date of this order.
/s/ LANA MYERS
JUSTICE
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632 F. Supp. 1164 (1986)
Fred W. PHELPS, Plaintiff,
v.
The WICHITA EAGLE-BEACON, et al., Defendants.
Civ. A. No. 83-4060-S.
United States District Court, D. Kansas.
April 1, 1986.
*1165 Fred W. Phelps, Sr., pro se.
Margie J. Phelps, Phelps-Chtd., Topeka, Kan., for plaintiff.
*1166 Gerrit H. Wormhoudt, Fleeson, Gooing, Coulson & Kitch, Wichita, Kan., for Wichita Eagle-Beacon, Tompkins, Holtzclaw & Merritt.
Sloan, Listrom, Eisenbarth, Sloan and Glassman, Myron L. Listrom and Deanne Watts Hay, Topeka, Kan., for Harley.
MEMORANDUM AND ORDER
SAFFELS, District Judge.
This matter is before the court on defendants' motion to dismiss plaintiff's complaint pursuant to Rule 12(b)(6) for failure to state a claim and defendants' motion to dismiss plaintiff's amended complaint for failure to state a claim and on the basis that plaintiff's Racketeer Influenced & Corrupt Organizations Act [RICO] claim is barred by the statute of limitations.
Plaintiff brought this action seeking damages and injunctive relief for defendants' publication of two articles about plaintiff in the Wichita Eagle-Beacon. In his complaint, plaintiff alleges that the court has jurisdiction under 42 U.S.C. §§ 1981, 1983, 1985, and 1988, 28 U.S.C. §§ 1331 and 1343, and the first and fourteenth amendments. Plaintiff also alleges pendent state law claims for defamation and invasion of privacy. On August 12, 1985, the plaintiff filed an amended complaint alleging an additional claim under the civil RICO Act, 18 U.S.C. § 1962.
In defendants' motion to dismiss, defendants contend that plaintiff has failed to allege facts sufficient to support subject matter jurisdiction in this court. Defendants claim that plaintiff's lawsuit is, in reality, a suit for libel, slander, and invasion of privacy. The defendants state that plaintiff's claims sound in tort and do not rise to the status of a constitutional violation necessary to invoke this court's jurisdiction. Defendants claim that plaintiff's allegations of the violation of Kansas Supreme Court Rule 223 is in no way a claim of a constitutional violation.
In considering a motion to dismiss, the factual allegations of the complaint must be taken as true and all reasonable inferences must be indulged in favor of the plaintiff. Mitchell v. King, 537 F.2d 385 (10th Cir.1976); Dewell v. Lawson, 489 F.2d 877 (10th Cir.1974). A complaint should not be dismissed unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-02, 2 L. Ed. 2d 80 (1957). The question is not whether a plaintiff will ultimately prevail, but whether he is entitled to offer evidence to support his claims. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 1686, 40 L. Ed. 2d 90 (1974).
Though this court is willing to give the plaintiff the benefit of every doubt in judging defendants' motion to dismiss, the court will not hesitate to dismiss plaintiff's complaint if he fails to allege deprivation of a constitutional right. As the Honorable Judge Earl O'Connor recently noted in Taylor v. Nichols, 409 F. Supp. 927, 932 (D.Kan.1976), aff'd, 558 F.2d 561 (10th Cir. 1977):
A dispute regarding the alleged deprivation of such a constitutional right is necessary because it is an express prerequisite of federal jurisdiction under 28 U.S.C. § 1343.... It should be clear, however, that the standard for dismissal ... does not become operative unless a privilege or right secured by the Constitution is identified and put into issue by the allegations of the complaint; that is, if the denial of a specific constitutional right is alleged, the action should not be dismissed unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief."
In Taylor the court noted that the protection accorded to individual freedoms and liberties by sections 1983 and 1985 are not without limits. The court stated that while the Civil Rights Act confers a right of action sounding in tort upon an individual whose rights are trespassed upon by any person "acting under color of state law" or by any group of people acting in conspiracy, it is clear that not all violations of *1167 state law arise to the level of a "constitutional tort" for the purposes of the civil rights statute. Id. at 933. The court further stated that "[a]n individual's right to have the relevant state laws strictly obeyed is not a federal right protected by the Civil Rights Act of 1871 or the Constitution of the United States. [cites omitted] Nor does the Civil Rights Act provide a remedy for mere common law torts, even when committed `under color of state law.'" Id. It is well settled that courts are to be alert for possible abuse of the Civil Rights Act in alleging rights derived purely from state law and incident to state law rather than federal citizenship. Id.
The court will address each of the plaintiff's bases which confer jurisdiction upon this court. The plaintiff first claims that jurisdiction is founded on 42 U.S.C. § 1981. A valid claim of racial discrimination is a prerequisite to a cause of action under 42 U.S.C. § 1981. Phillips v. Fisher, 445 F. Supp. 552, 555 (D.Kan.1977). Title 42 U.S.C. § 1981 provides in part: "All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts ... as is enjoyed by white citizens...."
While the court recognizes that the protection of section 1981 has been extended to whites, McDonald v. Santa Fe Trail Transportation, 427 U.S. 273, 287, 96 S. Ct. 2574, 2582, 49 L. Ed. 2d 493 (1975), there must be allegations that defendant violated plaintiff's rights by discriminating against plaintiff on the basis of his race being white, which is protected by law. In reading plaintiff's complaint, the court finds no such allegation that plaintiff has been discriminated against by defendants because he is white. Rather, paragraph 13 of plaintiff's complaint states that he was discriminated against by defendants because he is a black man's lawyer, in violation of section 1981. The court finds this allegation does not state a cause of action under section 1981. In plaintiff's memorandum in opposition to defendants' motion to dismiss, he states that the defendants' conduct is inseparably linked to plaintiff's association with members of another race, thus going to the very heart of section 1981. The plaintiff cites Members of Bridgeport v. City of Bridgeport, 85 F.R.D. 624, 650 (D.Conn.1980) in support of his proposition. The court finds that plaintiff's argument is without merit. The court finds that the decision in Members of Bridgeport is inapposite to the case at hand. The plaintiffs in Members of Bridgeport were themselves minorities. The court finds that in this case, plaintiff is a white male who alleges discrimination on the basis of his association with black persons. This allegation standing alone, does not state a cause of action for jurisdiction under section 1981. As the Honorable Judge Theis held in Phelps v. Washburn, 634 F. Supp. 556 (D.Kan.1986), "The Court holds that plaintiffs' vicarious minority theory does not state a cause of action because the Phelps are not a protected group under section 1981." Id. at 571. Similarly, the court finds no line of cases which state that a plaintiff's association with minorities, "a black man's lawyer," states a cause of action under section 1981.
The court will next address plaintiff's claim that this court has jurisdiction pursuant to 42 U.S.C. § 1983. Plaintiff claims that defendants' conduct defaming plaintiff has interfered with his liberty interest and his later opportunity for employment, thus entitling him to a cause of action under section 1983. Further, plaintiff alleges that defendants' conduct in publishing the articles was done with racial motivation due to his association with members of the black race, resulting in denial of plaintiff's equal protection of the laws. The court finds that plaintiff's claim of jurisdiction under section 1983 equally to be without merit.
The court finds the United States Supreme Court's decision in Paul v. Davis, 424 U.S. 693, 96 S. Ct. 1155, 47 L. Ed. 2d 405 (1975) controlling on the issue of plaintiff's liberty interest. In Paul v. Davis, the court stated that defamation, standing *1168 alone, did not deprive plaintiff of any "liberty" protected by the guarantees of the fourteenth amendment. Id. at 709, 96 S. Ct. at 1164. The court went on to state that:
Rather [the plaintiff's] interest in reputation is simply one of a number which the State may protect against injury by virtue of its tort law, providing a forum for vindication of those interests by means of damages actions. And any harm or injury to that interest, even where as here inflicted by an officer of the State, does not result in a deprivation of any "liberty" or "property" recognized by state or federal law, nor has it worked any change of respondent's status as theretofore recognized under State's laws. For these reasons we hold that the interest in reputation asserted in this case is neither "liberty" nor "property" guaranteed against state deprivation without due process of law.
Id. at 712, 96 S. Ct. at 1165-1166.
Similarly, the court finds that plaintiff's liberty interests have not been violated in this case. Damage to plaintiff's reputation, if any, due to the publication of the articles does not state a cause of action under section 1983. The court holds that damage to plaintiff's reputation, without an accompanying loss of employment, or an opportunity for future employment, does not state a cause of action for a violation of plaintiff's liberty or property interests. As the court previously stated, the decision in Taylor v. Nichols, 409 F. Supp. 927, 934 (D.Kan.1976) definitively states that:
[I]t is well established that libel or slander by a state officialeven if malicious does not generate a cause of action under the federal civil rights statutes, for the right to be free of defamation and to secure redress for its infliction is within the province of state law and is not an incident of federal citizenship.
Id. at 934.
The court in Taylor stated that even if they accepted the plaintiff's allegation of injury to his reputation, it concluded that such injury does not rise to the level of a constitutional tort for which the Civil Rights Act provides a remedy. Id. The court's finding in Taylor is equally applicable here. Even in accepting plaintiff's allegation of damage to plaintiff's reputation, the court finds that plaintiff has alleged no allegation which rises to a deprivation of his federal constitutional rights. As far as plaintiff's claim as to a deprivation of his property interests, the court finds that plaintiff has alleged no injury to his entitlement to practice law. The court finds that injury to his reputation, without loss of employment, or specific allegations as to how plaintiff's law practice has been injured, does not state a cause of action for deprivation of plaintiff's property interests. See State of Missouri ex rel. Gore v. Wochner, 620 F.2d 183, 185 (8th Cir.1980).
At this point, the court also finds that the plaintiff's allegations as to defendant Harley's violation of Supreme Court Rule 222 does not rise to the level as to be equated with a denial of the plaintiff's constitutional rights. The court in Wochner stated that, "[r]ights which derive solely from state law, however, cannot be the subject of a claim for relief under 42 U.S.C. § 1983." Id. at 185. The court further stated that only when a violation of state law results in impingement on a federally protected right can a cause of action be said to exist. Id. See also Taylor v. Nichols, 409 F.Supp. at 933; Bottone v. Lindsley, 170 F.2d 705 (10th Cir.1948).
Plaintiff alternatively argues that defendants conduct in publishing the articles was done with racial animus, therefore denying plaintiff equal protection of the laws on account of his association with members of the black race. The court finds that the single reference by plaintiff to one of the article's descriptions of Phelps as the black man's lawyer is not sufficient to state a violation of the equal protection clause.
The plaintiff cites the decision in Harris v. Harvey, 436 F. Supp. 143, 150 (E.D.Wis. 1977) for support in finding that the complaint sufficiently states an allegation of *1169 equal protection. The court notes that in Harris v. Harvey, the plaintiff was black and the defendants were white. In Harvey the court found that there was enough proof to find that there was an issue whether defendant's acts were motivated by racial discrimination, therefore making summary judgment inappropriate. The court recognizes that the decision in Harvey does stand for the proposition that "[a]n individual who has suffered injuries as a result of unjustified invidious discrimination may be able to establish an equal protection violation regardless whether such injuries rise to the level of deprivation of life, liberty, or property." Id. at 150.
While the injuries alleged by plaintiff in this case (injury to reputation and deprivation of opportunities for future employment) are sufficient to state a claim, the required element of racially discriminatory treatment is lacking and thus fails to support a claim based on denial of equal protection of the laws. The only allegations made by plaintiff relate to his association with blacks as well as his religious affiliation. The court finds that those allegations are insufficient to support a cause of action under the equal protection clause. Further, the court finds that the plaintiff fails to state in what manner he has been deprived of equal protection of the laws. The court will not deny a motion to dismiss in a case in which the plaintiff's allegations rest on mere conclusory statements without any factual support. The court therefore finds that plaintiff's cause of action in the court's jurisdiction based under section 1983 should be dismissed.
The court also notes that the plaintiff states that section 1983 is applicable because defendants' actions were done in concert with defendant Harley who was a former Assistant State Attorney General. Plaintiff contends that the only reason the other defendants received and used the information stated in the articles was due to defendant Harley's position in the state government enabling him to have access to the information. Plaintiff contends Harley misused his power by virtue of state law and made possible such publication. The plaintiff thus concludes that defendants' conduct was done under color of state law. The court finds that it is unnecessary to determine whether the acts alleged were done under color of state law. As the court has stated in Sorenson v. Zapien, 455 F. Supp. 1207, 1209 (D.Colo.1978), something more than simple defamation must be alleged to state a cause of action under section 1983. "The Civil Rights Act does not provide a remedy for mere common law torts, even if they are committed under color of state law." Id. Similarly, the court finds that even if these acts were done under color of state law, the plaintiff has still failed to state a cause of action under section 1983.
The plaintiff further makes an allegation that his first amendment rights have been violated. The court finds that that claim may be summarily dismissed. The decision in Paul v. Davis, 424 U.S. 693, 712, 96 S. Ct. 1155, 1165-66, 47 L. Ed. 2d 405 (1975) is conclusive in finding that plaintiff's complaint fails to state a cause of action under the first amendment. Paragraph 13 of plaintiff's complaint states that defendants' conduct deliberately discriminated against plaintiff because he is a black man's lawyer and a Baptist preacher lawyer, in violation of the first amendment. In reading plaintiff's complaint, the court finds that these allegations do not state a cause of action under the first amendment. These allegations in no way state a possible cause of action for denial of plaintiff's right to associate with minorities, nor can defendants' actions, as alleged in plaintiff's complaint, be seen to deprive plaintiff of his freedom of speech.
The decision in Paul v. Davis makes clear that plaintiff's right of privacy, as alleged in this action, is not within the zones of privacy recognized by the United States Supreme Court. The Court in Paul stated that personal rights found within the guarantee of the first amendment must be limited to fundamental rights such as matters relating to marriage, procreation, child rearing, and education. Id. at 713, 96 *1170 S.Ct. at 1166. As in Paul, plaintiff's claim that the state may not publicize a record of an official act such as plaintiff's disciplinary action, is not within the sphere of the zone of privacy protected by the first amendment. The court therefore finds that plaintiff's claim pursuant to the first amendment should be dismissed.
The court also holds that plaintiff has not stated a separate cause of action under the fourteenth amendment of the constitution. In Valdez v. Kansas Department of Social & Rehabilitation Services, No. 76-24-C5 (D.Kan., unpublished, Apr. 23, 1980), this court held that there is no separate cause of action under the fourteenth amendment when Congress has specifically afforded plaintiff a means of redress. The court finds that section 1983 of the Civil Rights Act is an alternative remedy for an action under the fourteenth amendment. Therefore no private cause of action is stated under the fourteenth amendment. See also Vakas v. Rodriguez, No. 82-1589 (D.Kan., unpublished, Aug. 27, 1982).
Plaintiff also makes allegations in his complaint that the court's jurisdiction is based on an action pursuant to section 1985 for conspiring to violate Rule 223 of the Kansas Supreme Court. Plaintiff claims that a violation of Rule 223 was motivated by a race and religion animus in hopes of defaming plaintiff and invading plaintiff's privacy. To state a cause of action under 42 U.S.C. § 1985, it is necessary for plaintiff to allege that the defendants conspired for the purpose of depriving plaintiff or the class to whom he belonged of equal protection of the law, equal privileges and immunities under the law, or rights guaranteed by federal law or federal constitution. See Taylor v. Nichols, 558 F.2d at 567.
In light of the court's finding that plaintiff's allegations fail to state a cause of action for a denial of equal protection or equal privileges and immunities guaranteed by the federal constitution or a violation of federal laws, the court can summarily dismiss plaintiff's claim under 42 U.S.C. § 1985. The court wishes to note, however, that even if defendants conspired together to violate Rule 223 of the Kansas Supreme Court, such a violation would not elevate that act to a violation of a right guaranteed by federal law or the federal constitution. The court finds it unnecessary to discuss the elements needed to state a cause of action for conspiracy under section 1985 in view of the fact that no right has been violated. The court additionally finds that it is unnecessary to respond to defendant Harley's claim that he is immune from suit because of his status as former Assistant State Attorney General. Similarly, the court finds it superfluous to address defendant Eagle-Beacon and its employees' discussion of plaintiff's claim of defamation at this time.
Defendants have also filed a motion to dismiss plaintiff's amended complaint which states an additional theory of recovery under the civil RICO Act. Defendants base their motion to dismiss plaintiff's amended complaint on the ground that the amended cause of action under RICO is time-barred by K.S.A. 60-513(a)(3), the statute of limitations for fraud. Such statute limits actions brought for fraud to two years from the date in which the fraud was discovered. Clearly, if the amended complaint does not relate back to the initial pleading filed by the plaintiff, plaintiff's cause of action under RICO would be time-barred.
The court is guided by the decision in Bradberry v. International Brotherhood of Firemen and Oilers, Local No. 1086, No. 79-4149, slip op. at 1-3 (D.Kan., unpublished, Feb. 2, 1981). In that case the Honorable Judge Richard Rogers allowed plaintiff to amend his complaint to add an additional cause of action under the Civil Rights Act, pursuant to 42 U.S.C. § 1981. Plaintiff's original complaint had alleged that defendants had discriminated against him on the basis of race, in violation of Title VII of the Civil Rights Act, 42 U.S.C. § 2000, et seq. In so granting, Judge Rogers was guided by Rule 15(c) of the Federal Rules of Civil Procedure. Rule 15(c) provides in pertinent part that:
*1171 Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading.
Id. at 2.
The court notes the true test underlying the language in Rule 15(c) is one of adequate notice so that the defendant may have a reasonable opportunity to prepare a defense. In Bradberry the court found that plaintiff's amended complaint alleged no new factual allegations, but simply added a cause of action and another area of available relief. The court therefore granted plaintiff's motion to amend. The court's decision in Bradberry can be used as analogous support for denying defendants' motion to dismiss plaintiff's amended complaint. The court finds that while plaintiff's amended complaint alleges additional facts and violations, such as mail fraud and use of interstate phone wires to publish such articles, the court finds that the RICO claim arises out of the same transactions and occurrences as alleged in plaintiff's original complaint. The court therefore finds that for purposes of the statute of limitations, plaintiff's amended complaint does relate back to the filing of plaintiff's original complaint on March 7, 1983, thus not barring plaintiff's claim under RICO, 18 U.S.C. § 1962. See, e.g., Bradberry v. Dennis, 368 F.2d 905, 908 (10th Cir.1966); Junso Fujii v. Dulles, 224 F.2d 906, 907 (9th Cir.1955).
The court will next address defendants' contention that plaintiff's amended complaint fails to state a claim under 18 U.S.C. § 1962. To state a claim under RICO, a plaintiff must allege (1) that the defendants (2) through the commission of two or more acts (3) constituting a "pattern" (4) of "racketeering activity" (5) directly or indirectly invested in, or maintained an interest in, or participated in (6) an "enterprise" (7) the activities of which affect interstate or foreign commerce. 18 U.S.C. § 1962(a)-(c). See Moss v. Morgan Stanley, Inc., 719 F.2d 5, 17 (2nd Cir.1983); Nupower, Inc. v. Litwin, No. 83-1405, slip op. at 2 (D.Kan., unpublished, Apr. 16, 1985).
In paragraph 15 of plaintiff's amended complaint, plaintiff alleges that defendants are ongoing enterprises: a newspaper, a state government agency, and individual law practices, which affect interstate commerce, and that said enterprises have been infiltrated by racketeering activity. Plaintiff further alleges that said wrongful conduct of defendants constitutes a pattern of racketeering activity as defined by the RICO Act, consisting of acts utilizing the United States mails and interstate phone wires in executing or attempting to execute a scheme or artifice to defraud plaintiff. Plaintiff alleges that these aforementioned acts constitute offenses under the mail or wire fraud statutes of the United States. Finally, plaintiff alleges that plaintiff has been injured in his business or property by reason of said violations.
While the decision in Sedima v. Imrex Co., ___ U.S. ___, 105 S. Ct. 3275, 87 L. Ed. 2d 346 July 1, 1985, a decision cited by plaintiff, does stand for the proposition that plaintiff may successfully bring a RICO action without alleging prior conviction of criminal acts, See 53 U.S.L.W. at 5036-37, the decision is not conclusive as to whether plaintiff has stated a cause of action under RICO. In fact, the Supreme Court in Sedima stated that the court was not entertaining the question as to whether the defendants committed the requisite predicate acts or whether the commission of these acts fell into a pattern as required to state a cause of action under RICO.
In resolving those issues, the defendants directed the court's attention to the decision of Northern Trust Bank/O'Hare v. Inryco, Inc., 615 F. Supp. 828 (N.D.Ill.1985). In Northern Trust Bank, the court defined the term "pattern of racketeering" as requiring at least two acts of racketeering activity. Id. at 831. The court interpreted the earlier decision in Sedima to require that a plaintiff allege continuity plus relationship to establish a pattern of racketeering activity. It requires, for example, two *1172 or more acts of mail fraud to state a cause of action. Id. at 833. The court explained that the implication of Sedima is that while two acts are necessary, that in itself may not be sufficient as two of anything do not generally form a pattern. The court went on to look at the allegations in the complaint at issue and found that paragraph 15 of plaintiff's complaint, which alleged involvement of the use of the mails, specifically three kick-back payments, still implemented the same fraudulent scheme as the first two mailings and the single scheme does not appear to establish the necessary "pattern of racketeering activity." Id. at 833.
The recent decision in Professional Assets Management, Inc. v. Penn Square Bank, 616 F. Supp. 1418 (W.D.Okla.1985) also supports such an interpretation. The court in Penn Square Bank stated that RICO does not apply to every pattern of racketeering activity; the gravamen of a RICO violation is "the conduct of an enterprise through a pattern of racketeering activity." Id. at 1420. (emphasis in original) (citing United States v. Phillips, 664 F.2d 971, 1011 (5th Cir.1981)). The court in Professional Assets Management found that while many constituent actions were necessary to prepare the audit report alleged, it was only a single unifying transaction. The court said that viewed in the light most favorable to the plaintiff, the complaint was insufficient. The court cited the decision of Northern Trust Bank/O'Hare v. Inryco, Inc., for its holding which stated, "[i]t places a real strain on the language to speak of a single fraudulent effort, implemented by several fraudulent acts, as a `pattern of racketeering activity.'" 616 F. Supp. at 1421 (quoting Northern Trust Bank, 615 F.Supp. at 833).
In viewing plaintiff's amended complaint in a light most favorable to the plaintiff, the court finds that the acts alleged involving mail and wire fraud do not state a pattern of racketeering activity as required by section 1962. The court finds that while many acts may have been undertaken to accomplish publication of said articles, the plaintiff alleges a single fraudulent effort. The acts alleged by plaintiff in plaintiff's amended complaint comprise several telephone conversations and mailings in furtherance of a single ongoing scheme to publish articles about the plaintiff. The court therefore finds that plaintiff's amended complaint alleging a violation of the RICO Act, 18 U.S.C. § 1962 should be dismissed.
The court finds it unnecessary to address plaintiff's pendent state law claims, as no diversity jurisdiction is alleged. In conclusion, the court therefore finds that it has no jurisdiction to hear plaintiff's pendent state law claims.
IT IS BY THE COURT THEREFORE ORDERED that defendants' motion to dismiss plaintiff's complaint is hereby granted. IT IS FURTHER ORDERED that defendants' motion to dismiss plaintiff's amended complaint is hereby granted. IT IS FURTHER ORDERED that defendants' motion for sanctions is hereby denied.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2260293/
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520 Pa. 19 (1988)
549 A.2d 561
Maurice M. ROSEN, Appellant,
v.
Sandra Ebersole ROSEN, Appellee.
Supreme Court of Pennsylvania.
Argued January 20, 1988.
Decided October 20, 1988.
Reargument Denied November 21, 1988.
*20 James D. Crawford, Philadelphia, for appellant.
Donald W. Hedges, Philadelphia, Marvin Mitchelson, Los Angeles, Cal., for appellee.
Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA and PAPADAKOS, JJ.
OPINION
NIX, Chief Justice.
The instant appeal raises interesting questions relating to subject matter jurisdiction and issue preclusion. The questions arise in the setting of a protracted divorce proceeding which has been before the courts for over seven years. The ruling of the Superior Court vacating the divorce decree entered by the trial court would have the effect of continuing this controversy in our courts and perpetuating the uncertainty of the status of the parties involved.[1] Because of the likelihood for the instant questions to recur and the desirability for a prompt resolution of these traumatic, bitterly disputed lawsuits, we granted review.
The specific question that we are called upon to review is the Superior Court's determination that the trial court was without subject matter jurisdiction to issue the decree of divorce because of an appeal that had been taken and was then pending in the Superior Court relating to the trial court's prior order concerning interim counsel fees and costs. For the reasons that follow, we conclude that the Superior Court erred in its judgment and that the trial court did in fact have the right to proceed in its disposition of the merits of the divorce action.
*21 The parties to this matter under review were married on August 16, 1968 and are parents of three children. On June 25, 1980, appellant filed a complaint in divorce in the Court of Common Pleas, Montgomery County. His wife, Sandra, filed a counterclaim on October 31, 1980, in which she advanced, inter alia, a claim for interim counsel fees and costs. Her motion was granted, and on December 29, 1981, the trial court ordered appellant to remit $1,655 in costs and $7,500 in interim counsel fees. Mr. Rosen filed an appeal in the Superior Court challenging the propriety of the trial court's award. The Superior Court did not reach the merits in that appeal, finding that appellant's failure to file exceptions to the order constituted a waiver of the issues he sought to raise. Rosen v. Rosen, 328 Pa.Super. 93, 476 A.2d 470 (1984) ("Rosen I"). The decision in Rosen I was filed by the Superior Court on June 1, 1984.
During the pendency of that appeal, the trial court entered a decree nisi on the issues of child custody, equitable distribution, child support, alimony, divorce and legal fees. On February 16, 1983, a final order was issued. No direct appeal was taken by Mrs. Rosen. She instead, relying upon section 602 of the Divorce Code, 23 P.S. § 602, filed a motion to vacate the decree, asserting that the trial court lacked subject matter jurisdiction. This motion was filed on May 3, 1984, over a year after the entry of the final order.[2] In response to the motion to vacate, Mr. Rosen filed preliminary objections and in the alternative a motion to strike. The motion to vacate the decree was denied, and Mrs. Rosen followed with an appeal to the Superior Court. As previously stated, the Superior Court, in an opinion filed on April 28, 1986, held that the trial court was without jurisdiction to enter the decree in divorce because of the pending appeal from the award of counsel fees and costs. Rosen v. Rosen, *22 353 Pa.Super. 421, 510 A.2d 732 (1986) ("Rosen II")[3] For the reasons that follow we conclude: (a) that the trial court properly ruled that under the Divorce Code of 1980, its jurisdiction was not divested as a result of the appeal of its interim order for counsel fees and costs; (b) that the Superior Court's reliance upon Sutliff v. Sutliff, 326 Pa.Super. 496, 474 A.2d 599 (1984) in Rosen II was misplaced; (c) that this Court's decision in Fried v. Fried, 509 Pa. 89, 501 A.2d 211 (1985), which expressly repudiated Sutliff v. Sutliff, supra, was controlling; and, (d) that appellant is not estopped from asserting the jurisdiction of the trial court to enter the final decree of divorce.
In its decision reversing the trial court, on the issue of jurisdiction, the Superior Court, although recognizing in a footnote our holding in Fried and Pennsylvania Rule of Appellate Procedure 1701(b)(6), concluded that it was "clear that, as the law stood at that time" (referring to the time of the entry of the final decree), "the taking of an appeal acted to divest the trial court of jurisdiction over the case." 353 Pa.Super. at 424, 510 A.2d at 733.
The suggestion that Fried represented a change in the law, and therefore justified the Superior Court in ignoring the mandate of Fried in reaching its decision in Rosen II, was erroneous. To the extent Fried ruled that under the Divorce Code of 1980 orders upon interim counsel fees and costs were to be considered interlocutory and not immediately reviewable, that aspect of the Fried holding could properly be characterized as a change in the law. If the issue in Rosen II had been whether or not the appeal from the orders was entitled to immediate appellate review, then *23 the question of the applicability of that portion of the Fried holding would have been legitimately before the court.[4]
Here the issue is whether the interim appeal divested the trial court of jurisdiction over the remaining matters during the pendency of the appeal. For this question, which is presently before us, the pertinent part of the Fried holding is the determination that rulings upon the granting of interim counsel fees and costs are ancillary to the basic cause of action. The recognition in Fried that these orders were ancillary to the basic cause of action was merely a reaffirmance of the existing law. In Fried we stated:
[W]e agree with the majority in Sutliff, supra, that an order relating to alimony pendente lite, counsel fees and expenses is separable from and collateral to the main cause of the divorce action. Id., 326 Pa.Superior Ct. at 500, 474 A.2d at 600, citing In re Estate of Georgiana, 312 Pa.Super. 339, 458 A.2d 989 (1983); Malenfant v. Ruland, 274 Pa.Super. 506, 418 A.2d 521 (1980). 509 Pa. at 94-95, 501 A.2d at 214.
It is therefore clear that the part of the Fried holding reaffirming the ancillary character of such orders should have been recognized by the Superior Court as controlling at the time of its decision in Rosen II. It is this pronouncement in Fried that goes to the heart of the issue raised here.
The jurisdictional question was raised because of the pendency of the appeal as to the collateral order. As a general proposition, a trial court is precluded from proceeding with a matter once an appeal to a higher court has been *24 taken. Corace v. Balint, 418 Pa. 262, 210 A.2d 882 (1965). This principle is reflected in Rule 1701(a) of our Rules of Appellate Procedure. Rule 1701(a) provides in pertinent part:
Except as otherwise prescribed by these rules, after an appeal is taken ..., the trial court ... may no longer proceed further in the matter. Pa.R.A.P. 1701(a).
Based upon that general prohibition the Superior Court concluded that the trial court in this case acted without jurisdiction. However, Rule 1701(a) is qualified by Rule 1701(c), which provides in pertinent part:
Where only a particular item [or] claim ... adjudged in the matter is involved in an appeal, ... the appeal ... shall operate to prevent the trial court ... from proceeding further with only such item [or] claim ..., unless otherwise ordered by the trial court ... or by the appellate court or a judge thereof as necessary to preserve the rights of the appellant. Pa.R.A.P. 1701(c).
It is nowhere contended that the trial court's resolution of the merits of the divorce action in any way impinged upon the merits of the claim then pending before the appellate court. Thus the bar imposed under Rule 1701(a) was not applicable, and there was no basis for the finding that the trial court's jurisdiction had been divested at the time that the decree in divorce was made final. In its decision the Superior Court virtually ignored Rule 1701(c). In a passing reference it appears to suggest that the only purpose of 1701(c) is to permit the appellate court to grant permission for the trial court upon petition to proceed during the pendency of an appeal. 353 Pa.Super. at 425, 510 A.2d at 734. Such a suggestion is a patent distortion of the clear language of that section. The purpose of Rule 1701(c) is to prevent appeals of collateral issues from delaying the resolution of the basic issues where the proceeding below can continue without prejudicing the rights of the party seeking the interim review. The party seeking review in Rosen I *25 was Mr. Rosen. He at no time objected to the trial court's proceeding to dispose of the merits of the case during the time that appeal was pending in the Superior Court. Moreover, the entire record that is now before us establishes that the claim raised in Rosen I was ancillary to the matters that remained in the trial court for resolution. We therefore hold that Rule 1701(c) was applicable and that the appeal in Rosen I did not result in a divestiture of the trial court's jurisdiction in disposing of the remaining matters before that court.
Having resolved that the trial court properly proceeded to a decree under subsection (c) of Rule 1701, we need not address the contention raised by appellant that because the interim counsel fee order was interlocutory and thus nonappealable it could not deprive the trial court of jurisdiction.[5] Nor must we respond to the counter-arguments made by Mrs. Rosen to the effect that the doctrine of law of the case[6] or principles of equitable estoppel[7] preclude the appellant *26 from contesting the finality determination made by the Superior Court in Rosen I.
In addition to vacating the final decree on the ground of lack of subject matter jurisdiction, the court in Rosen II also vacated the trial court's orders holding Mrs. Rosen in contempt for failing to comply with the decree. The Superior Court reasoned that because the final decree was invalid, refusal to comply with it would not constitute contempt. Since we are satisfied that the trial court did have jurisdiction to enter the final decree in divorce, we must also reject the Superior Court's rationale for invalidating the contempt orders.
In addition to the jurisdictional challenge, Mrs. Rosen challenged the orders of contempt in the Superior Court on several grounds, including lack of actual notice, improper procedures and imposition of excessive fines. The Superior Court, having vacated the order on jurisdictional grounds, did not consider the additional arguments. 353 Pa.Super. at 422-423 n. 1, 510 A.2d at 733 n. 1. Our reversal of the decision of the Superior Court in Rosen II therefore necessitates a remand of the case to that court, limited to a consideration of the arguments that were not reached as to the validity of the contempt orders only.
Accordingly, the order of the Superior Court vacating the final decree entered by the court of common pleas on February 16, 1983, as amended, March 16, 1983, is reversed; and the said decree is reinstated. The order of the Superior Court vacating the orders of contempt entered by the court of common pleas is reversed and the case is remanded to the Superior Court for consideration of the remaining issues.
Jurisdiction is relinquished.
ZAPPALA, J., files a concurring opinion in which LARSEN, J., joins.
ZAPPALA, Justice, concurring.
I agree that the trial court's jurisdiction to issue the divorce decree was not divested during the pendency of the *27 appeal from its earlier order relating to interim counsel fees and costs. I write separately to emphasize that the reasoning underlying the holding in the instant case demonstrates what I have always believed to be the instrinsic flaw in the majority's analysis in Fried v. Fried, 509 Pa. 89, 501 A.2d 211 (1985).
In Fried, the majority stated that, "Under the present procedure an appeal of an interim order stays the entire action and results in unnecessary delay in the dissolution of divorce actions." 509 Pa. at 97, 501 A.2d at 215. Joined by Justice Larsen, I dissented from the majority's opinion, stating:
Nor is it true that an appeal from a trial court's order relating to economic claims must delay the resolution of the remaining claims. While an appeal ordinarily divests a trial court of authority to proceed further, Rule 1701(c) of the Rules of Appellate Procedure specifically provides that where only a particular claim is involved, an appeal shall prevent the trial court proceeding further with only such claim unless otherwise ordered. Clearly, Rule 1701(c) would encompass an appeal from an order awarding alimony pendente lite or counsel fees and would prevent any unnecessary delay.
509 Pa. at 100-101, 501 A.2d at 217.
In the majority opinion in Fried, no reference was made to Pa.R.A.P. 1701(c); nor was Rule 1701(c) analyzed by the majority in determining the effect of an appeal from an order relating to alimony pendente lite, counsel fees or expenses on the underlying divorce action. Yet the Court now chastises the Superior Court for "virtually ignoring" Rule 1701(c) in finding that the trial court had been divested of jurisdiction in the present case. I, for one, do not find fault with the Superior Court's analysis because it was predicated upon this Court's same failing in Fried.
LARSEN, J., joins in this concurring opinion.
NOTES
[1] The trial court entered a final decree of divorce on February 16, 1983. This order also included a resolution of the child custody and support issues as well as distribution of the marital property. No challenge was made by either party as to the trial court's dissolution of the marriage until June 1, 1984. During that interim period appellant remarried and the validity of that relationship will be affected by our ruling today.
[2] Section 602 of the Divorce Code, 23 P.S. § 602 (Purdons Supp.1987) provides in pertinent part:
A motion to vacate a decree ... alleged to be void because of ..., lack of jurisdiction over the subject matter ..., must be made within five years after entry of the final decree.
Since there has been no direct appeal, our inquiry is limited to the jurisdictional challenge.
[3] Because of Mrs. Rosen's disregard of the final order of divorce, the trial court held Mrs. Rosen in contempt for failing to adhere to the equitable distribution provisions of that decree. The Superior Court ruled that, since the decree in divorce was a nullity, the orders directing Mrs. Rosen to comply with that decree could have no legal efficacy and, therefore, dismissed the contempt finding. Under the terms of the equitable distribution award made by the trial court, Mrs. Rosen received approximately $500,000.
[4] Since Fried is a statement by this Court of our view of the intent of the General Assembly in drafting the Divorce Code of 1980 as to the finality of interim counsel fee orders, it should have been applied to all cases then pending on appeal. McCloskey v. Workmen's Compensation Appeal Board, 501 Pa. 93, 98 n. 3, 460 A.2d 237, 239 n. 3 (1983); see Brubaker v. Reading Eagle Co., 422 Pa. 63, 221 A.2d 190 (1966). The Superior Court's expression to the contrary was in error. However, this was not the question presented in this appeal. The issue was not the propriety of that appeal, but rather its effect upon the continuing jurisdiction of the trial court to dispose of the remaining issues before that court.
[5] See Pa.R.A.P. 1701(b)(6), which in part reads as follows:
(b) After an appeal is taken . . ., the trial court . . . may:
* * * * * *
(6) Proceed further in any matter in which a nonappealable interlocutory order has been entered, notwithstanding the filing of a notice of appeal. ...
This provision is only applicable where there is a determination that the order is a nonappealable interlocutory one. That issue is not involved in the consideration of 1701(c).
[6] In Rosen I, the Superior Court concluded that it had jurisdiction over the appeal of the interim counsel fee award because the award was a final order. As a general rule, a court always has jurisdiction to decide its own jurisdiction. See, e.g., Bartron v. Northhampton County, 342 Pa. 163, 19 A.2d 263 (1941); Commonwealth ex rel. Cook v. Cook, 303 Pa.Super. 61, 449 A.2d 577 (1982). Mrs. Rosen contends that the unappealed decision in Rosen I is the law of the case which cannot now be relitigated regardless of our intervening decision in Fried v. Fried. This argument, because it relates only to appellant's contentions under Pa.R.A.P. 1701(b)(6), is irrelevant to our finding of jurisdiction under Rule 1701(c).
[7] Mrs. Rosen took the position that because appellant's legal position in Rosen I was that an award of interim counsel fees was final, equity would preclude him from taking a diametrically opposed stand in this phase of the proceedings. She overlooks the fact that she too has changed her position and now seeks to have the interim fee order declared final.
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01-03-2023
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10-30-2013
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549 A.2d 1102 (1988)
Howard C. BREEDING, Plaintiff Below, Appellant,
v.
CONTRACTORS-ONE-INC., Defendant Below, Appellee.
Supreme Court of Delaware.
Submitted: September 7, 1988.
Decided: November 3, 1988.
Rehearing Denied November 9, 1988.
Harvey Bernard Rubenstein, Wilmington, for plaintiff below, appellant.
Colin M. Shalk, of Tybout, Redfearn, Casarino & Pell, Wilmington, for defendant below, appellee.
Before HORSEY, WALSH and HOLLAND, JJ.
HORSEY, Justice:
In this workmen's compensation dispute we are required once again to review the Industrial Accident Board's application of the displaced worker doctrine as well as Superior Court's performance of its appellate function in reviewing rulings of the *1103 Board. The appeal raises three issues: one, whether the Board's finding of no causal connection between the employee's right hip and leg complaints and his 1984 industrial accident may be sustained; two, whether the Board properly applied the law of displaced worker in finding that the employee's partial disability in his right shoulder and arm did not render him totally disabled; and three, whether Superior Court properly carried out its review function in affirming the Board's result but on different reasoning based on independent findings not made by the Board. We affirm as to the first issue but reverse as to issues two and three.
Plaintiff, Howard C. Breeding, appeals from two decisions of the Superior Court dated May 13, 1988 and January 7, 1987 and two decisions of the Industrial Accident Board dated September 23, 1985 and October 8, 1987. In Breeding's first appeal to Superior Court of the Board's 1985 ruling, Superior Court affirmed the Board on its disability rulings, but held that the Board had wrongfully deprived Breeding of the right to be heard on the attorney fee issue and remanded the case to the Board. Both parties appealed, but this Court dismissed the appeal as interlocutory. Breeding v. Contractors-One-Inc., Del.Supr., 527 A.2d 281, No. 17, 1987, Horsey, J. (June 1, 1987) (Order). On remand, the Board increased claimant's attorney fee on the permanency issue to the statutory maximum.
I.
In January 1984, Breeding, an ironworker employed by defendant Contractors-One-Inc. ("employer"), fell 12 to 15 feet onto a concrete floor, landing on his knees with another worker on top of him. Though he suffered various injuries, the most evident of which was pain in the right shoulder, Breeding returned to work the day after the accident but was temporarily assigned to light duty. X-rays taken on the day of the accident suggested a hairline fracture of the right arm, a finding confirmed by follow-up x-rays the next week. After the job was completed, Breeding was laid off. Breeding has not worked since.
In early February 1984, Breeding and his employer's compensation carrier entered into an agreement providing Breeding with total disability benefits. The agreement referred only to an injury to Breeding's right shoulder. From January to June 1984, Breeding was examined by at least four doctors. Breeding also underwent treatment by a physical therapist for ten weeks, until discontinued in November 1984. Through June 1984, Breeding did not complain to any of the health care providers of pain in his right hip or leg.
Dr. Ivan Barsky testified for the employer by deposition before the Board. In June 1984, Dr. Barsky examined Breeding after Breeding had been discharged by an orthopedic surgeon, Dr. Casscells. Breeding's sole complaint to Dr. Barsky was about pain in his right arm. Breeding's shoulder fracture had not yet fully healed. In February 1985, after Breeding had been without medical treatment for several months, Breeding's employer arranged for Dr. Barsky to re-examine Breeding and later petitioned the Board to terminate Breeding's total disability benefits. Breeding contested the petition and also filed a petition for permanent partial disability benefits for both his right arm and his right hip and leg.
When Breeding was re-examined by Dr. Barsky, Breeding complained for the first time to Barsky of pain in his right hip and leg. He also felt continuing pain in his right shoulder. Dr. Barsky found that the shoulder fracture had healed but that Breeding had a slight limitation in the use of his right arm. However, Dr. Barsky attributed this limitations to a pre-existing condition of peritendinitis and not to Breeding's industrial accident. Dr. Barsky opined, based on reasonable medical certainty, that Breeding's industrial accident had not placed any limitations upon his physical ability to work. Dr. Barsky made no investigation or findings with respect to Breeding's right hip and leg.
In July 1985, Breeding was examined by Dr. A.J. Fink, a neurologist. Dr. Fink, testifying for the plaintiff before the *1104 Board, stated that Breeding informed him of pain in both his right shoulder and his right leg. Based on his first examination, Dr. Fink found it difficult to connect Breeding's hip and leg complaints to the 1984 industrial accident, but concluded that such a causal connection was a "possibility." However, three weeks later, Dr. Fink, after re-examining Breeding and reviewing a July 1985 EMG confirming "radiculopathy at L-5,S-1," concluded that Breeding's hip and foot problems arose out of the January 1984 accident. Dr. Fink also found Breeding to have a soft tissue injury in the shoulder area, which left Breeding with a ten percent permanent injury to his right shoulder. With respect to Breeding's leg and hip injury, Dr. Fink testified with reasonable medical probability that Breeding had a five percent permanent injury to his hip and a five percent permanent injury to his foot. "Based on the history related by [Breeding]" and the EMG results, Dr. Fink opined that Breeding's disabilities were caused by his industrial accident.
At the hearing before the Board, Breeding conceded that for six months following the 1984 accident he had failed to disclose to any of his health care providers his hip and leg complaints. Nevertheless, Breeding's wife testified that he had complained to her immediately after his fall of pain in his right leg and hip and continued thereafter to do so. Breeding's co-worker, who had fallen on top of him, also testified that Breeding had complained after the accident of his "right side" hurting.
By order dated September 23, 1985, the Board: granted Breeding permanent partial disability benefits related to his right arm; denied permanency benefits related to Breeding's right hip and leg; awarded Breeding certain attorney fees; and terminated Breeding's total disability benefits. The Board based the latter ruling on dual findings that Breeding had: (i) failed to meet his burden of proffering evidence showing himself to be prima facie a displaced worker; and (ii) failed to meet his consequent burden of showing that he had made reasonable efforts to secure suitable employment that were unsuccessful due to his injury. Breeding now appeals Superior Court's May 13, 1988 ruling and order affirming under application of the law of the case doctrine its September 1985 decision.
II.
The first issue presented is whether the Board's finding that Breeding's right hip and leg problems were not causally related to his fall is supported by substantial evidence. If such evidence exists and the Board made no error of law, its decision must be affirmed. 29 Del.C. § 10142(d). A. Mazzetti & Sons, Inc. v. Ruffin, Del. Supr., 437 A.2d 1120 (1981); M.A. Hartnett, Inc. v. Coleman, Del.Supr., 226 A.2d 910 (1967). Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. It is also defined as more than a scintilla but less than a preponderance of the evidence. DiFilippo v. Beck, D.Del., 567 F. Supp. 110 (1983). In rejecting Breeding's hip and leg claim of permanency, the Board ultimately ruled:
The Board declines to make any award to the claimant for permanent and partial impairment to his right hip or right foot. The evidence indicates that the claimant did not report to any doctor the existence of hip, leg or foot pain until approximately six months after his accident in January, 1984. The Board finds that any injury to the hip, leg or foot is not the result of the accident in January, 1984.
Breeding contends that the Board's ruling must be rejected because it is in disregard of, and contrary to, the "specific medical testimony of causation of Dr. Fink upon that issue." We disagree for several reasons. When an expert's opinion of causality is based in large part upon the patient's recital of subjective complaints and the trier of fact finds the underlying facts to be different, the trier is free to reject the expert's conclusion. Cf. Sears, Roebuck and Company v. Farley, Del.Supr., 290 A.2d 639 (1972). In the course of its lengthy decision, the Board had noted that Dr. Fink had "changed his opinion" from a "possibility" of a causal connection between hip and leg complaints and the industrial accident to an unqualified *1105 opinion. The Board was also clearly troubled by Breeding's credibility.
He did not tell Dr. Barsky in June of 1984 of his leg pain. He thinks that he told Dr. Fink that his pain became aggravated in the warmer weather. He cannot remember if he told Dr. Newman that the pain begin in July, 1984. From January, 1984 until October, 1984 he saw many doctors. He did not complain of leg and hip pain.
Given the extent of conflicting testimony, the Superior Court correctly ruled that the "Board [as fact finder] could logically infer that claimant's leg and hip problems were not causally related to the accident." Whaley v. Shellady, Inc., Del.Supr., 161 A.2d 422, 424 (1960). Therefore, we affirm as to the first issue.
III.
As to the displaced worker issue, Breeding asserts that the evidence was insufficient to sustain the Board's findings: (i) that Breeding failed to establish that he was a prima facie displaced worker; and (ii) that Breeding also failed to meet his consequent burden of establishing reasonable efforts on his part to secure suitable employment that were unsuccessful. Breeding thereby focuses on the alleged insufficiency of the Board's findings and largely ignores Superior Court's role in review thereof. Employer, also focusing almost exclusively on the deliberative process of the Board, responds that the Board's dual findings are supported by substantial evidence.
Assuming the Board's finding of Breeding not to be a prima facie displaced worker is sustainable, we agree with the employer that the record is devoid of any substantial evidence that Breeding made any real effort to find suitable employment. However, we conclude that the Board's predicate finding that Breeding was not a prima facie displaced worker fails the logical deductive reasoning requirement of Levitt v. Bouvier, Del.Supr., 287 A.2d 671 (1972). We further find that Superior Court, in attempting to cure the Board's perceived deficiency, has exceeded the scope of its appellate review function.
The Board's findings and supportive reasoning for concluding that Breeding was not a prima facie "displaced" worker are limited to the following cryptic statement:
Claimant's vocational history, his physical condition and lack of excessive work restrictions. Although the claimant is 62 years of age, and this would preclude any long retraining for employment, the lack of additional training would not eliminate all employment.
Superior Court understandably found the Board's "rationale" for refusing to find Breeding prima facie displaced to be "less than clear." The undisputed record evidence is that Breeding's vocation is that of ironworker and has been since 1948. Claimant has been in the work force, engaged in essentially manual labor jobs, since he left school in the eighth grade at the age of 15. At 62 claimant is three years from retirement and without any educational training since age 15. It is also medically undisputed that claimant has restrictions on lifting, pushing, pulling, sitting, standing, bending and climbing. These restrictions preclude Breeding from continuing regular employment as an ironworker. Nevertheless the Board, without reasons given, has concluded that neither Breeding's advancing age nor his lack of training would "eliminate all employment." We think the Board has thereby failed to explain in an understandable and coherent manner the factors upon which it relies and its reasons for concluding that claimant is not a prima facie displaced worker. Chrysler Corporation v. Duff, Del.Supr., 314 A.2d 915, 917 (1973); Ham v. Chrysler Corporation, Del.Supr., 231 A.2d 258, 262 (1967).
Superior Court, perhaps in an understandable desire to end the litigation, then made its own search of the record for "sufficient evidence" to sustain the Board's finding that Breeding did not qualify as a prima facie displaced worker. However, in doing so we think that the Court improperly substituted itself for the Board as a *1106 finder of fact. The Court primarily relied upon the testimony of Stanley Scioscia, a vocational consultant employed by an insurance adjuster, who testified for the employer. Reviewing the testimony of Mr. Scioscia, the Court stated:
The Court recognizes that claimant's limited education might affect his chances of securing several of the positions for which a high school graduate is preferred. The Court is satisfied, however, that the remaining positions are feasible in that they do not involve extensive retraining, do not require strenuous physical exertion or extension beyond claimant's limitations, and permit claimant to move about and change positions as needed. In light of this evidence, the Court is not convinced that claimant is an individual for whom a special job must be created if he is to be steadily employed. Consequently, the Court is in agreement with the Board's finding that claimant has not established a prima facie case showing that he is a displaced worker.
We think the Court thereby fell into the error of weighing the evidence, determining questions of credibility and making factual findings and conclusions. Johnson v. Chrysler Corp., Del.Supr., 213 A.2d 64, 66 (1965). These functions are exclusively reserved for the Industrial Accident Board. Furthermore, the Superior Court misapplied the burdens of proof under the displaced worker doctrine. An employer's evidence of available employment does not determine whether a worker is prima facie displaced, but rather whether a prima facie displaced worker would be able to obtain specific employment if he sought to do so. Howell v. Supermarkets General Corp., Del.Supr., 340 A.2d 833, 835 (1975); Chrysler Corporation v. Duff, 314 A.2d at 918, n. 1 (1967).
Conclusion
There is substantial evidence in the record to support the Board's finding that Breeding did not injure his right leg, hip or ankle in the 1984 accident. Therefore, Superior Court's affirmance of the Board's denial of Breeding's related medical expense claim is affirmed. However, the Board's termination of Breeding's total disability benefits and Superior Court's affirmance thereof is reversed for misapplication of the displaced worker doctrine. Superior Court is directed to remand the case to the Industrial Accident Board for further proceedings consistent herewith.
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01-03-2023
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10-30-2013
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178 Cal. App. 4th 830 (2009)
RAYMOND C. KALDENBACH, Plaintiff and Appellant,
v.
MUTUAL OF OMAHA LIFE INSURANCE COMPANY et al., Defendants and Respondents.
No. G038539.
Court of Appeals of California, Fourth District, Division Three.
September 30, 2009.
As modified October 26, 2009.
*833 Coughlin & Conforti, Frank J. Coughlin and Beverly A. Blais for Plaintiff and Appellant.
Barger & Wolen, Sandra I. Weishart and Misty A. Murray for Defendants and Respondents.
OPINION
O'LEARY, Acting P. J.
Raymond C. Kaldenbach brought an action against United of Omaha Life Insurance Company and Mutual of Omaha Life Insurance Company (collectively Mutual), concerning the sale of a so-called "vanishing premium" life insurance policy. He alleged causes of action for violation of the Consumers Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.), the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.), and common law fraud and concealment. His motion for certification of the action as a class action was denied after the trial court concluded he *834 had demonstrated none of the requisites for class certification. Kaldenbach appeals contending he established all requisites for class certification. We disagree and affirm the order.
I
BACKGROUND
Before addressing this particular case, we find it useful to provide this background on vanishing premium life insurance litigation, which was nicely laid out in a sister-state case Gaidon v. Guardian Life Ins. Co. of America (1999) 94 N.Y.2d 330 [704 N.Y.S.2d 177, 725 N.E.2d 598, 602-603]: "The cases before us are not unique. They involve allegations and practices of a national scope that have generated industry-wide litigation [citation]. In resolving this case, we consider the various types of cash value life insurance that are marketed, and the import of `vanishing premiums' in that setting. [¶] All the policies in the appeals before us provide `whole life' or `universal life' insuranceeach a form of `cash value' life insurance. Cash value life insurance combines `pure' life insurance with an investment component that creates a potential accumulation of money in the policy [citations]. In a cash value policy, the carrier typically invests accumulated money and pays returns to the policyholder in the form of dividends or interest [citation]. [¶] When cash value insurance first emerged, insurance companies invested accumulated money exclusively in conservative securities with fixed interest rates, such as municipal and corporate bonds [citation]. Commentators point out that because interest rates `soared' in the late 1970s and early 1980s, the economics of these cash value life insurance policies became unattractive to investors who sought to take advantage of the high interest rates [citations]. In the mid-1980s, the life insurance industry reacted to its diminishing market share by designing policies, like the ones here at issue, in which policyholders' accumulated money is tied to the current rate of interest [citation]. [¶] Carriers marketed interest rate-sensitive insurance under a host of premium payment options, including the `vanishing premium' plan [citation]. Under this plan, the policyholder pays higher-than-normal premiums in the early years of the policy, resulting in a quicker accumulation of premium dollars for investment purposes [citations]. These policies are marketed on the premise that enough cash value will accumulate so that at a fixed date future administrative and insurance costs will be covered and the policyholder relieved of any further out-of-pocket premium obligations [citation]. [¶] In the late 1980s, however, sharply declining interest rates `upset the economics' of these widely marketed policies [citation]. Accumulated cash values became insufficient to pay expected future insurance and administrative costs. By the *835 early 1990s, many consumers who purchased such policies were required to continue out-of-pocket payments to keep their policies in force [citation]. And the lawsuits followed." (See also Fischel & Stillman, The Law and Economics of Vanishing Premium Life Insurance (1997) 22 Del. J. Corp. L. 1, 4; Drelles v. Manufacturers Life Ins. Co. (2005) 2005 Pa. Super. 249 [881 A.2d 822]; Vos v. Farm Bureau Life Ins. Co. (Iowa 2003) 667 N.W.2d 36 (Vos).)[1]
II
FACTS[2]
Kaldenbach's Complaint
In 2004, Kaldenbach filed this class action complaint against Mutual and Robert A. Meyerson, the insurance agent who sold Kaldenbach the life insurance policy that is the subject of this action. Kaldenbach alleged he was induced through improper and deceptive sales practices to purchase Mutual's Advantage Life Policy (ALP)a whole life insurance policy with a "vanishing premium" component.
Kaldenbach purchased the ALP policy in 1990, at age 56, with a death benefit of $100,000, and maturity date of age 95. Based on Meyerson's representations about the policy, Kaldenbach believed that after paying four annual premiums of $3,162 ($12,648 total), the accumulated cash reserves on his policy would cover all future premiums. Kaldenbach made the four *836 annual premium payments, and then paid no premiums for many years. But in 2002, he was notified by Mutual the accumulated cash reserves were no longer adequate to continue paying the premium and the policy would lapse if he did not start making premium payments again.
Kaldenbach alleged Mutual provided computer illustrations and uniform sales materials to its agents that allowed Meyerson to mislead him into believing a low cost of actual insurance combined with a very high rate of interest to be earned on the cash accumulation component of his premium payment would act in concert to generate adequate returns to cover the cost of his life insurance until the maturity date of the policy. But, he alleged, in reality (given a higher cost of mortality and declining interest rates), the policy could not perform in the manner represented to him. Mutual did not advise policy purchasers of the inherent risks in purchasing the ALP.
Kaldenbach's complaint alleged causes of action for violation of the UCL and the CLRA. He also alleged common law causes of action for fraud and concealment.
Class Certification Motion
Two years after filing his complaint, Kaldenbach filed a motion for class certification. Although Kaldenbach identified three proposed subclasses, on appeal he has abandoned all but one: Californians who purchased ALP's from Mutual between January 1, 1988, and December 31, 1995. Kaldenbach claimed all sales of ALP's were based on the same scripted sales presentations and computer illustrations that were misleading and omitted material facts. He asserted Mutual's sales operations and presentations relating to ALP's were uniform in every respect and Mutual utilized standardized training methods, materials, and scripts. Agents were required to adhere to a sales script, and were specifically trained to disclose only the potential benefits of the policy but conceal the risks.[3]
Kaldenbach argued class adjudication was proper because (1) class members all bought the same policy; (2) Mutual utilized uniform or standardized training materials; (3) Mutual conducted training programs for agents and asked agents to memorize training presentations; (4) Mutual provided uniform computer-based illustrations for use during sales presentations; and (5) the sales brochures and point of sale materials given to prospective purchasers were uniform.
*837 The class certification motion was supported by numerous declarations. In his declaration, Kaldenbach stated he bought the ALP in early 1990. He was retiring from public employment at age 56 and intended to select the Public Employees' Retirement System (PERS) pension option that provided the highest possible monthly benefit. That meant, however, that if Kaldenbach predeceased his wife, her survivor benefit would be decreased. Accordingly, Kaldenbach wanted to buy a whole life policy with a $100,000 death benefit payable to his wife to make up the income gap. He wanted to pay only a one-time premium. Meyerson explained the ALP product would require he pay four annual premiums, but after that no further premiums would be required. Meyerson showed Kaldenbach a computer illustration that showed only four premium payments of $3,162 per year "followed by zeros." After paying the fourth premium in 1993, Kaldenbach received annual premium notices, but Meyerson and a Mutual customer service representative said he did not have to make further premium payments.
In 2003, Kaldenbach received notice from Mutual that if he did not commence making annual premium payments of $3,845.84, his policy would be cancelled. When Kaldenbach purchased the policy, he was not advised that if interest rates and/or costs of insurance varied negatively from the assumptions Meyerson put into the illustration, he would not maintain sufficient cash accumulation to cover the future cost of insurance.
Meyerson declared he became a Mutual sales agent in the fall of 1989. In the mid-1990's, he was promoted to district sales manager and participated in training agents. He was familiar with all training materials used by Mutual from 1989 to 2000.
Meyerson explained the ALP policy had a required four-year premium minimum after which the premium was flexible. There were two components to the premium: cost of insurance and cash accumulation. Meyerson was trained the cash accumulation component would earn interest and when the cash value increased sufficiently, the annual premium could "vanish."
When making a sale, Meyerson used Mutual's proprietary software on which he could generate an illustration of how the policy worked. The illustration was a standard part of selling the insurance. The illustration was divided into two columns. One side was the "guaranteed" column. For each year it showed the minimum amount of interest Mutual would credit to the cash accumulation account3 percent. It also showed a maximum cost of mortality (i.e., the actual cost of the life insurance) that Mutual would charge. That guaranteed side of the illustration demonstrated the cash accumulation *838 would not be sufficient to permanently vanish the premium. But Meyerson said he was trained to explain to prospects the "guaranteed" side of the illustration was highly improbable, and to deemphasize its significance, because historically Mutual credited significantly higher interest rates and did not charge the maximum cost of mortality.
Meyerson would then utilize the "illustration" side of the document to input numbers (i.e., using as variables, the interest rate, the amount of premium paid in the first four years, and the cost of mortality) to "solve" for when the premium could vanish. In his experience, most purchasers wanted the premium to vanish around retirement age. Meyerson was trained that as to each prospective purchaser, he was to determine that person's "dominant buying motive" and tailor his sales pitch to that motive. He prepared the illustration for Kaldenbach to match his specific motives and financial needs. He believed that based on the illustrations he showed Kaldenbach, Kaldenbach reasonably believed that absent some major economic catastrophe or some massive mortality-causing calamity that drove up the cost of insurance, he would only ever have to make the first four annual premium payments.
Kaldenbach submitted a declaration from John Cressman, an insurance practices expert. Cressman opined the marketing materials and illustrations utilized by Mutual were deceptive and misleading because they did not sufficiently disclose the risk of the investment vehicle and allowed the agent to input unrealistic projections as to interest rates. He stated there was a 70 percent lapse rate with such policies, demonstrating the vast majority of purchasers received no benefit from them.
Kaldenbach also submitted declarations from individuals who purchased 11 ALP policies from different agents. Each bought the policy after having been told about the cash accumulation feature, understanding the fund could grow to an amount sufficient to pay the premiums until maturity. Each stated that several years down the road, either the premiums did not vanish or after having gone without paying premiums for some years, they were required to resume making payments. All of the declarants stated the sales agents had "documents" to which they referred, but most made no mention of receiving any sort of illustrations demonstrating the vanishing premium concept. Three mentioned seeing a chart with columns or numbers; one specifically mentioned being shown an illustration. The policy application signed by each declarant stated the applicant was required to make the planned premium payment for the first four years. Then starting in the fifth policy year, the applicant could either adjust the death benefit and premium being paid, or *839 stop paying premiums all together in which case "[y]our coverage will continue as long as the cash value is sufficient." (Italics added.)
Mutual's Opposition
Mutual's attorney submitted her declaration stating that pursuant to court order 500 policy owners were given notice of the proceedings and asked if they would consent to production of their policy files. Only 37 policyholders gave consent.
Robert Hupf, a Mutual officer and actuary, submitted his declaration regarding Mutual's various universal life insurance products. He explained that with the ALP, beginning in the fifth year, the insured could stop paying the premiums and remain covered so long as the cash accumulation was sufficient to continue paying the fixed premium. Kaldenbach's policy specifically stated he had a planned annual premium of $3,162, payable every year until the policy matured at age 95. If beginning in the fifth year Kaldenbach discontinued his annual premium payment, the policy would remain in effect until the cash accumulation was insufficient to pay the cost of insurance (or maturity date of the policy, whichever came first). The policy specifically stated that assuming the guaranteed 3 percent interest rate and the guaranteed cost of insurance, Kaldenbach's policy would remain in force until December 2002.
Hupf stated the information given to each prospective purchaser varied. In providing the computer illustration to a prospective purchaser, an agent could input "virtually limitless variables." Mutual had no control over what a particular agent would illustrate as it would depend on the purchaser's age, risk, motives, coverage, and the amount of premium he or she wanted to pay.
Mutual's sales development manager, Karen Amstuz, submitted a declaration concerning training of agents. Mutual had multiple sales methods and there was no single or standardized method. When new sales methods or materials were adopted, Mutual did not require all agents to use them and the amount of training agents received depended on the policies of the individual insurance sales office.
All of Mutual's agents are independent contractors and the company "cannot insist they read any training materials or use a specified sales method." Veteran agents would continue to use their own methods regardless of any new method developed by Mutual. Amstuz explained the content of each sales presentation "was left up to the agent's sole discretion and would vary from agent to agent and prospect to prospect," depending on the purchaser's needs. There were no materials from Mutual instructing agents to *840 sell ALP's by promising a purchaser only a fixed number of premium payments would be required to pay the policy in full.
Mutual submitted a declaration from an insurance and actuarial expert, Jeffrey C. Harper. Harper explained the basic concept and purposes of universal life policies like the ALP. He stated a 70 percent lapse rate for universal life insurance policies was not evidence policyholders received no benefit from the policy. Harper explained the lapse rate was well within the range of industry experience with many types of insurance. Policies lapse for many reasons, including that the policyholder has intentionally used all the accumulated cash value to cover the costs of premiums or that the policyholder has requested the company pay out the surrender value of the policy (i.e., cashed it out). But "[t]here is no reason to assume that any termination, let alone all terminations, has any relationship to the design of [the policy]. A termination is more likely due to circumstances unique to each policy owner." Furthermore, termination does not equate to having received no benefit from buying the policy because the policyholder had the benefit of the insurance coverage during the time the policy was in effect.
Another vice-president of Mutual stated in his declaration that before 1997, there was no requirement insurance agents provide any written materials to purchasers during a sales presentation. Use of illustrations and written materials became a legal requirement in 1996, and prior to that, not all agents used them. There were numerous reasons the owner of an ALP would let it lapse, not just renewed premiums. The computer illustrations were hypothetical scenarios, not promises about the future performance of the policy values.
Mutual submitted declarations from several of its independent sales agents. Each explained that although they received training and materials from Mutual, sales presentations were not uniform or scripted because each sale was adapted to the individual prospect's needs, goals, and experience. Agents were not required to attend training or use the prepared materials. As for illustrations, the information input into the illustration was entirely within the independent agent's control. Although a "vanish" date was possible, agents were not trained to demonstrate a guaranteed "vanish" date as it would be entirely dependent on fluctuating interest rates.
The agents declared they did not hide the guaranteed side of the illustration. They would typically explain the guaranteed column was a worst case scenario, the illustration column was a best case scenario, and the reality would "end up being somewhere in the middle . . . because interest rates would fluctuate." The only way to know if a policy was sold by demonstrating to the purchaser a vanish date for premiums "would be to interview the prospect, the agent, and any other individuals involved in the transaction, and *841 review the documents generated or used in connection with that sales transaction." Mutual submitted evidence that while it offered training for new agents, training was not mandatory and each local office decided whether or when to have agents attend training.
Mutual also submitted deposition testimony from Meyerson and Kaldenbach. Meyerson testified his sales presentation to Kaldenbach was "atypical" because he was a "dominant needs" not a "dominant buying motive" prospect. Meyerson testified it was not his custom to use any of Mutual's promotional materials and he did not use any of them with Kaldenbach (other than the illustration). He denied using any scripted sales presentation or any of his training materials to make the sale to Kaldenbach.
Kaldenbach testified he did not receive any written material from Meyerson during the sales presentation and relied completely on what Meyerson told him about the policy. Kaldenbach recalled receiving the policy from Meyerson, and looking at a few key items in it with him. He was told he had 20 days to review the entire policy and cancel for a full refund if he decided he did not want it. Kaldenbach did not read the policy, relying completely on Meyerson's oral representations.
The Order
The trial court denied the motion for class certification. It concluded Kaldenbach had not demonstrated numerosity other than his assertion that over 4,000 policies were sold. Kaldenbach had not shown ascertainability as there was no evidence as to how it could be shown which of the policyholders had received illustrations during the sales presentation.
The court concluded Kaldenbach had not shown typicality because Meyerson testified in his deposition that the sale to Kaldenbach was not typical as he had a clearly defined dominant need, Kaldenbach testified he never received any explanation from Meyerson about how the policy worked, how interest rates or costs of insurance were determined, what the extent of his obligation to pay annual premiums was, and what might happen if he stopped paying premiums. By contrast, Meyerson testified he fully explained the policy to Kaldenbach. "If [Kaldenbach] and Meyerson cannot even agree as to what was stated during the [sales] presentation to [Kaldenbach], how can [Kaldenbach's] claim be typical [and] be used to prove 4,000 claims? ... It will take ... individual evaluation of each claim to determine liability."
The court also found Kaldenbach had not established commonality. Kaldenbach primarily relied upon uniformity in Mutual's sales materials, training, and illustrations, but there was no evidence linking those common *842 tools to what was actually said or demonstrated in any individual sales transaction. The training materials and methods were not uniform throughout the class period. None of the allegedly scripted or memorized sales materials covered the alleged misrepresentations. And there was no evidence that uniform training or sales materials were used with each putative class member. There was no evidence all independent agents were required to take the offered training, took the offered training, had the same training, or used the same training or materials in their sales presentations. In fact "[t]here was evidence that the agents were free to ignore the training and written manuals." Mutual's agents were independent contractors over whom Mutual had little or no control. Meyerson testified he did not follow his training or manuals in making the presentation to Kaldenbach. Kaldenbach had argued commonality could be found based solely on the use of illustrations, but Kaldenbach testified he never looked at the entire illustration, he only looked at the part of the illustration that showed the premium could vanish in four years because that was what Kaldenbach wanted.
The court also believed varying applicability of the statute of limitations and the delayed discovery rule to each putative class member's claim precluded class certification. The court noted the 70 percent lapse rate Kaldenbach alleged occurred with the policy at issue did not establish classwide liability. There was no evidence it was an unusual lapse rate and no evidence as to why the policies had lapsed. For example, individual policyholders may have taken loans out against the cash accumulation, or they may have decided to purchase a different product or no longer needed the coverage. "[A]nalysis of why a policy lapsed is just one more issue that would need to be addressed on an individual and not class wide basis."
Finally, the court listed the individualized issues that predominated and which could not be proven on a classwide basis including: (1) did the agent take Mutual's training and read Mutual's manuals; (2) did the agent always use the training and materials; (3) what materials, disclosures, representations, and explanations were given to any given purchaser; (4) was an illustration used; (5) what information was input into the illustration; (6) did the purchaser rely on representations made in the sales presentation; (7) what were the customer's individual needs; (8) when did each class member's cause of action accrue; and (9) did the individual class member's policy lapse, and if so, why?
*843 III
CERTIFICATION OF CLASS ACTIONS; APPELLATE STANDARD OF REVIEW
(1) "`Courts long have acknowledged the importance of class actions as a means to prevent a failure of justice in our judicial system. [Citations.] "`By establishing a technique whereby the claims of many individuals can be resolved at the same time, the class suit both eliminates the possibility of repetitious litigation and provides small claimants with a method of obtaining redress ....'" [Citation.] Generally, a class suit is appropriate "when numerous parties suffer injury of insufficient size to warrant individual action and when denial of class relief would result in unjust advantage to the wrongdoer." [Citations.] But because group action also has the potential to create injustice, trial courts are required to "`carefully weigh respective benefits and burdens and to allow maintenance of the class action only where substantial benefits accrue both to litigants and the courts.'" [Citations.]' [Citation.]" (Lebrilla v. Farmers Group, Inc. (2004) 119 Cal. App. 4th 1070, 1074 [16 Cal. Rptr. 3d 25] (Lebrilla), citing Linder v. Thrifty Oil Co. (2000) 23 Cal. 4th 429, 434-435 [97 Cal. Rptr. 2d 179, 2 P.3d 27] (Linder).)
(2) "Code of Civil Procedure section 382 authorizes class suits in California when `"the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court." To obtain certification, a party must establish the existence of both an ascertainable class and a well-defined community of interest among the class members. [Citations.] The community of interest requirement involves three factors: "(1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class." [Citation.]'" (Lebrilla, supra, 119 Cal.App.4th at p. 1074.)
(3) As the moving party, Kaldenbach bore the burden of establishing the propriety of class certification. (Linder, supra, 23 Cal.4th at p. 435.) The trial court has great discretion with regard to class certification, and its decision will not be disturbed on appeal if it is supported by substantial evidence, unless it was based upon improper criteria or erroneous legal assumptions. (Richmond v. Dart Industries, Inc. (1981) 29 Cal. 3d 462, 470 [174 Cal. Rptr. 515, 629 P.2d 23]; Lebrilla, supra, 119 Cal.App.4th at p. 1074.)
Ordinarily, appellate review is not concerned with the trial court's reasoning but only with whether the result was correct or incorrect. (See, e.g., Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 329 [48 P. 117].) But on *844 appeal from the denial of class certification, we review the reasons given by the trial court for denial of class certification, and ignore any unexpressed grounds that might support denial. (Bartold v. Glendale Federal Bank (2000) 81 Cal. App. 4th 816, 828-829 [97 Cal. Rptr. 2d 226].) We may not reverse, however, simply because some of the court's reasoning was faulty, so long as any of the stated reasons are sufficient to justify the order. (Caro v. Procter & Gamble Co. (1993) 18 Cal. App. 4th 644, 655-656 [22 Cal. Rptr. 2d 419] (Caro).) "`"Any valid pertinent reason stated will be sufficient to uphold the order." [Citation.]' [Citation.]" (Lebrilla, supra, 119 Cal.App.4th at p. 1074.)
IV
COMMON QUESTIONS OF LAW AND FACT
The trial court concluded class certification was inappropriate because Kaldenbach failed to prove each requisite for class certification: numerosity, ascertainability, typicality, and commonality. Kaldenbach attacks the court's reasoning, asserting that because he presented evidence supporting each requisite for class certification, denial of class certification was not justified. But we are concerned with whether substantial evidence supports the court's reasoning, not with whether there was evidence that might have supported a different conclusion. We conclude the trial court's denial of class certification was not an abuse of discretion because substantial evidence supports the court's conclusion individual factual issues relating to each class member dominatedi.e., common questions of fact and law did not predominate.
Federal courts have actively addressed the issue of class certification in "vanishing premium" cases asserting both fraud and breach of contract causes of action. Class certification has routinely been denied primarily because individualized issues predominated over common ones.
For example, in Cohn v. Massachusetts Mutual Life Ins. Co. (D.Conn. 1999) 189 F.R.D. 209, the plaintiffs (like Kaldenbach) asserted the predominance requirement was met based on allegedly uniform computer illustrations produced by company software, sales material, and company training programs. (Id. at p. 212.) The court rejected the contention: "Though there are issues common to the members of the proposed class, including in particular the actions and state of mind of [the insurer] in pursuing the vanishing premium marketing strategy, these common questions are overshadowed by individualized issues such as the nature of the oral representations or disclosures made by the agent or broker at the point of sale, the nature of any questions asked by the consumer, the content of any written illustrations or disclosures given to the consumer, the degree of care exercised by the *845 consumer in reviewing any written illustrations and the policy instrument, the portions of the offer that were attractive to the consumer, the degree of the consumer's financial sophistication and his or her understanding of the product. These individualized issues, which are essential to the determination of the claims of each class member, predominate over questions common to the class." (Id. at p. 218.)
In In re Jackson National Life Ins. Co. Premium Litigation (W.D.Mich. 1998) 183 F.R.D. 217, the court denied class certification noting the insurer did not generally communicate directly with prospective consumers or policyholders. Rather, policies were sold by independent insurance brokers, who were not required to follow uniform sales scripts, who were not subject to and did not follow uniform policies regarding distribution of policy illustrations. "[T]his freedom led to great variance in representations made by brokers; some explaining away and others even exacerbating any misleading tendencies the policy illustrations may have had." (Id. at p. 221.) The court concluded a "determination of whether and which illustrations were given to class members, and of the nature of oral representations made to them at the point of sale, ... are matters requiring individualized fact development." (Ibid.) In addition, "the materiality of the allegedly misleading illustrations and plaintiffs' reliance on them" were "fact issues requiring individualized treatment." (Ibid.)
Other federal courts have reached similar conclusions. (See, e.g., In re LifeUSA Holding Inc. (3d Cir. 2001) 242 F.3d 136, 145-148 [no class certification because commonality, predominance, and superiority requirements were not met]; Keyes v. Guardian Life Ins. Co. of America, supra, 194 F.R.D. 253, 257 [class certification denied because facts did not support finding "defendant's policies were sold in a sufficiently uniform manner so as to justify a finding that common issues predominate"]; Adams v. Kansas City Life Ins. Co., supra, 192 F.R.D. 274, 279 [class certification denied because individualized fact-specific issues dominated on fraud-related claims as reliance would be based on varying oral and written representations made by agent]; Rothwell v. Chubb Life Ins. Co. of America (D.N.H. 1998) 191 F.R.D. 25, 30-31, fn. omitted [class certification denied because "even if plaintiffs were able to prove at trial that [insurer] trained its agents to use the policy illustrations in a misleading manner, it still would not eliminate the need for a `mini-trial' on each class member's claim to determine the nature of the representations that were made in that case" and resolution of fraud-based claims would require proof "both that [insurer's] agents made misrepresentations and that the individual class members reasonably relied on those representations in purchasing their insurance policies"]; see also Kent v. SunAmerica Life Ins. Co. (D.Mass. 2000) 190 F.R.D. 271; In re Hartford Sales Practices Litigation (D.Minn. 1999) 192 F.R.D. 592; Parkhill v. Minnesota *846 Mutual Life Ins. Co. (D.Minn. 1999) 188 F.R.D. 332.) State courts have followed the federal courts' lead denying certification because adjudication required individualized inquiry into what representations or omissions were made by individual agents to individual purchasers. (See Vos, supra, 667 N.W.2d 36.)
In his opening brief, Kaldenbach makes no mention of the abundant federal cases denying class certification. In his reply brief, he refers us to two cases that he states have granted class certification. The first, Cope v. Metropolitan Life Ins. Co. (1998) 82 Ohio St. 3d 426 [1998 Ohio 405, 696 N.E.2d 1001], was not a vanishing premium case. It concerned the targeting of existing policyholders and selling them replacement insurance as new insurance without providing mandatory disclosure warnings. The second, In re Prudential Ins. Co. of America Sales Practices Litigation (D.N.J. 1997) 962 F. Supp. 450, 513-515, affirmed in In re Prudential Ins. Co. of America Sales Practice Litigation (3d Cir. 1998) 148 F.3d 283, 315, concerned a nationwide settlement-only class certification. But in that case, the evidence showed oral misrepresentations made by agents throughout the country were "virtually identical" because agents were trained uniformly and required to use uniform sales materials.
Here, Kaldenbach's argument for class certification was based on his assertion Mutual utilized uniform sales materials, training, and illustrations in marketing ALP's. But as the trial court found, there was no evidence linking those common tools to what was actually said or demonstrated in any individual sales transaction. The record demonstrates Mutual's training materials and methods were not uniform throughout the class period of 1988 through 1995. A Mutual vice-president declared that before 1997, there was in fact no requirement insurance agents provide any written materials or illustrations to purchasers during a sales presentation, and not all agents used them. Indeed, in the 13 declarations Kaldenbach submitted from other purchasers of ALP's, the vast majority made no mention of having ever been shown an illustration. During the class period, Mutual's independent sales agents were not required to take the offered training, nor were they required to utilize any particular sales method or materials in their sales presentationsto the contrary, they were free to ignore the training and written materials. Meyerson testified he did not follow his own training in making his sales presentation to Kaldenbach or use any of the sales materials provided by Mutual. Kaldenbach testified he was not given any written materials other than the illustration and the policyhe relied solely on Meyerson's representations. There was also evidence Mutual had no control over what a particular agent would illustrate for a prospective purchaser as the agent could rely on limitless variables including the purchaser's age, risk, motives, coverage, and the amount of premium he or she wanted to pay.
*847 In view of the foregoing, the court did not abuse its discretion in concluding individualized issues predominated and could not be proven on a classwide basis including whether the agent who sold a policy to any given class member took Mutual's training, read its manuals, and routinely followed the training and materials; what materials, disclosures, representations, and explanations were given to any given purchaser; what information was input into the illustration; whether the purchaser relied on representations made in the sales presentation; what the purchaser's motivation was for buying the ALP; and whether, when, and why the policy lapsed.
UCL Cause of Action
(4) We turn then to how those various individualized issues relate to Kaldenbach's UCL cause of action.[4] The UCL "prohibits unfair competition, including unlawful, unfair, and fraudulent business acts." (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal. 4th 1134, 1143 [131 Cal. Rptr. 2d 29, 63 P.3d 937] (Korea Supply); see Bus. & Prof. Code, § 17200.) The UCL is a broad statute that defines "unfair competition" to include "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising ...." (Bus. & Prof. Code, § 17200.) "[A] practice may be deemed unfair even if not specifically proscribed by some other law" (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal. 4th 163, 180 [83 Cal. Rptr. 2d 548, 973 P.2d 527]) "if it `"`offends an established public policy ... or [is] substantially injurious to consumers.'..."'" (People v. Duz-Mor Diagnostic Laboratory, Inc. (1998) 68 Cal. App. 4th 654, 658 [80 Cal. Rptr. 2d 419].) A business practice is fraudulent under the UCL if a plaintiff can show that "`"members of the public are likely to be deceived."'" (Bardin v. DaimlerChrysler Corp. (2006) 136 Cal. App. 4th 1255, 1261 [39 Cal. Rptr. 3d 634].)
(5) Although a private citizen can sue under the UCL, only equitable remedies are available (e.g., injunction, restitution), and damages are not an available remedy. (Korea Supply, supra, 29 Cal.4th at p. 1144.) Prior to the passage of Proposition 64 in 2004, any person acting for the general public *848 could sue for relief from unfair competition; but after Proposition 64, a private person has standing to sue only if he or she "has suffered injury in fact and has lost money or property as a result of the unfair competition." (Bus. & Prof. Code, § 17204, as amended by Prop. 64, § 3; see Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal. 4th 223, 227 [46 Cal. Rptr. 3d 57, 138 P.3d 207].)
A private person "may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements ... and complies with [s]ection 382 of the Code of Civil Procedure." (Bus. & Prof. Code, § 17203.) Recently, in In re Tobacco II Cases (2009) 46 Cal. 4th 298, 324 [93 Cal. Rptr. 3d 559, 207 P.3d 20],[5] the Supreme Court held in the UCL class action context, the "injury in fact" standing requirement imposed by Proposition 64 applies only to the class representative and not to "absent class members in a UCL class action where class requirements have otherwise been found to exist." (Italics added.) UCL relief is available on a class basis "without individualized proof of deception, reliance and injury. [Citations.]" (46 Cal.4th at p. 320.)
Relying upon In re Tobacco II Cases, supra, 46 Cal. 4th 298, and Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal. App. 4th 1282 [119 Cal. Rptr. 2d 190] (Massachusetts Mutual), Kaldenbach argues reversal is required because the trial court improperly premised its order denying class certification on the complexities of establishing each absent class member's reliance on the representations made and their injury. But that was only one of the individualized issues the court found predominated and could not be proven on a classwide basis. As we have already noted, we affirm the order denying class certification if any of the trial court's stated reasons are sufficient to justify the order. (Lebrilla, supra, 119 Cal.App.4th at pp. 1074-1075; Caro, supra, 18 Cal.App.4th at pp. 655-656.) There were myriad other individualized issues the court found to predominate including whether any given agent took Mutual's training, read its manuals, and routinely followed the training and materials; and what materials, disclosures, representations, and explanations were given to any given purchaser. These individualized issues go not to the injury suffered by a purchaser, but to whether there was in fact an unfair business practice by Mutual. Neither In re Tobacco II Cases, supra, 46 Cal. 4th 298, nor Massachusetts Mutual, supra, 97 Cal. App. 4th 1282, compel a different result.
In Massachusetts Mutual, the trial court certified a class of over 33,000 persons who over 15 years bought "vanishing premium" life insurance *849 products in an action asserting violations of the UCL. (Massachusetts Mutual, supra, 97 Cal.App.4th at p. 1286.) Plaintiffs alleged, and had evidence supporting their claim, that at the time they purchased their vanishing premium policies the insurer had already developed plans to "`ratchet down'" the discretionary dividend it was paying on policies and the insurer failed to disclose to purchasers or its agents that it did not intend to maintain its current high discretionary dividend rate utilized by sales agents in sales presentations. (Id. at pp. 1286, 1291.) On appeal, the insurer contended the claims were not suitable for class treatment because there must be individualized showing of the representation each class member received. The appellate court concluded the trial court had not abused its discretion by granting class certification because the UCL did not require that plaintiffs "present individual proof that each class member relied on particular representations made by [the insurer] or its agents." (97 Cal.App.4th at p. 1286.) "Rather, ... the power to impose a remedy under the UCL will arise whenever a defendant's business practice is likely to deceive consumers." (Id. at p. 1291.)
In In re Tobacco II Cases, supra, 46 Cal. 4th 298, plaintiffs alleged violations of the UCL based on defendant tobacco companies' "deceptive advertising and misleading statements [to the public] about the addictive nature of nicotine and the relationship between tobacco use and disease." (46 Cal.4th at pp. 306, 307-308, fn. 2.) After having previously granted class certification, in the wake of Proposition 64, the trial court reversed course and decertified the class concluding each absent class member would have to establish his or her injury and therefore significant questions had arisen "`undermining the purported commonality among the class members, such as whether each class member was exposed to [d]efendants' alleged false statements and whether each member purchased cigarettes "as a result" of the false statements. Clearly ... individual issues predominate, making class treatment unmanageable and inefficient.'" (46 Cal.4th at p. 311.) The Supreme Court reversed concluding individualized proof of injury to absent class members in a UCL action was not required. (Id. at pp. 320, 324.)
But both In re Tobacco II Cases and Massachusetts Mutual involved identical misrepresentations and/or nondisclosures by the defendants made to the entire class. In re Tobacco II Cases targeted the tobacco industry's deceptive advertisements and statements disseminated to the public about the health effects of tobacco use. Massachusetts Mutual concerned the insurer's failure to disclose to policy purchasers and its agents its plan to decrease its discretionary dividend. In other words, there was no issue about the defendants' uniform business practices giving rise to the UCL claim.
But here there is no such uniformity. Although Kaldenbach claimed Mutual's presentations relating to ALP's were uniform, it utilized standardized *850 training methods, materials, and scripts to which agents were required to adhere, the evidence showed the opposite. Mutual's policies were sold by independent agents, and during the class period, they were not required to attend training or utilize any given sales materials. Agents were not required to adhere to a scripted sales presentation. Indeed Meyerson, who sold Kaldenbach his policy, testified at his deposition he did not use a scripted sales presentation or any training materials in making the sale to Kaldenbach.
Thus, separate from whether any individual purchaser relied on alleged misrepresentations, or suffered injury as a result, here the determination of what business practices were allegedly unfair turns on individual issues. The trial court could properly conclude there was no showing of uniform conduct likely to mislead the entire class, and the viability of a UCL claim would turn on inquiry into the practices employed by any given independent agentsuch as whether the agent involved in any given transaction took Mutual's training and read Mutual's manuals, used the training and materials in sales presentations, and what materials, disclosures, representations, and explanations were given to any given purchaser. The trial court did not abuse its discretion in concluding those issues predominated and could not be proven on a classwide basis.
Common Law Fraud and Concealment Causes of Action
Kaldenbach's complaint also contained common law causes of action for fraud and concealment. On appeal, he argues both were appropriate for class certification. The trial court did not abuse its discretion in concluding commonality was lacking.
(6) Kaldenbach does not address his fraud cause of action as distinct from his concealment cause of action. The elements of fraud are: "`(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or "scienter"); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.' [Citations.]" (Lazar v. Superior Court (1996) 12 Cal. 4th 631, 638 [49 Cal. Rptr. 2d 377, 909 P.2d 981].) More specifically, the elements of a cause of action for fraud based on concealment are: "`(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. [Citation.]' [Citation.]" (Roddenberry v. Roddenberry (1996) 44 Cal. App. 4th 634, 665-666 [51 Cal. Rptr. 2d 907].)
*851 Kaldenbach complains the court erroneously denied class certification of his concealment cause of action based on the merits of the cause of actionspecifically, the court doubted Kaldenbach could prove a duty to disclose information was owed by Mutual to the class. But the court merely speculated on the duty issue, specifically acknowledging it could not deny class certification for that reason. In its ruling, the court outlined the numerous issues that had to be proven on an individual basis and those issues pertained to all causes of action, not just the UCL cause of action.
(7) Kaldenbach relies on Occidental Land, Inc. v. Superior Court (1976) 18 Cal. 3d 355, 363 [134 Cal. Rptr. 388, 556 P.2d 750] (Occidental Land), and Vasquez v. Superior Court (1971) 4 Cal. 3d 800, 814 [94 Cal. Rptr. 796, 484 P.2d 964] (Vasquez), in support of his contention his fraud and concealment causes of action could be proven on a classwide basis. Those cases held that "when the same material misrepresentations have actually been communicated to each member of a class, an inference of reliance arises as to the entire class. (Vasquez, supra, 4 Cal.3d at p. 814 & fn. 9; Occidental Land, supra, 18 Cal.3d at pp. 358, 359, 363.)" (Mirkin v. Wasserman (1993) 5 Cal. 4th 1082, 1095 [23 Cal. Rptr. 2d 101, 858 P.2d 568].)
(8) Kaldenbach contends he is entitled an "inference of injury" and thus class certification was appropriate. But the Vasquez/Occidental Land class injury inference does not come into play absent evidence of uniform material misrepresentations having been actually made to class members. Here, the evidence indicates there were not common representations or omissions. Mutual's training materials and methods were not uniform, there was no requirement insurance agents provide any written materials or illustrations to purchasers during a sales presentation, agents were not required to take Mutual's training or to utilize any particular sales method or materials in their sales presentations, and agents were free to ignore the training and written materials. Mutual had no control over what a particular independent agent would illustrate for a prospective purchaser as the agent could rely on numerous variables including age, risk, motives, coverage, and desired premium amount. Thus, the evidence supports the trial court's conclusion there were significant individual issues as to whether there were in fact any misrepresentations, omissions, or nondisclosures made to individual purchasers. Accordingly, we cannot say the trial court abused its discretion by denying class certification.
*852 V
DISPOSITION
The order is affirmed. The Respondents are awarded their costs on appeal.
Aronson, J., and Fybel, J., concurred.
NOTES
[1] One case describes such a policy as follows: "Generally speaking, so called `[v]anishing premium policies are paid dividends which in some instances can be sufficient to cause the premium to "offset" whereby dividend values are used to pay the premium. In such an instance, the cash premium "vanishes" and is no longer due from the insured.' [Citation.]" (Keyes v. Guardian Life Ins. Co. of America (S.D.Miss. 2000) 194 F.R.D. 253, 254, fn. 1, quoting Phillips v. New England Mutual Life Ins. Co. (S.D.Miss. 1998) 36 F. Supp. 2d 345, 347.) Another case explains: "Vanishing premium policies operate by applying the insured's initial premium payments toward the costs of insurance, commissions, and various fees, while investing subsequent funds to accumulate cash value and generate an investment return designed to `pay' for the policy from the date on which premium obligations are designed to cease until the policy's maturity date. Therefore, if the policy performs as planned, the insured receives an investment vehicle which ultimately provides `free' insurance during the policyholder's retirement years. [¶] Vanishing premium policies are, however, complex devices whose performance depends upon numerous sensitive variables, including interest, mortality rates, sales, and actuarial rates." (Adams v. Kansas City Life Ins. Co. (W.D.Mo. 2000) 192 F.R.D. 274, 276.)
[2] We ordered portions of the appellant's appendix containing Mutual's confidential and proprietary documents that were placed under seal by the trial court remain under seal. (Cal. Rules of Court, rule 8.160(c)(1) [record sealed by trial court to remain under seal in appellate court].) In our recitation of the facts, we have refrained from discussing those materials.
[3] In his opening brief, Kaldenbach states he is abandoning the scripted sales presentation theory for class certification. But it appears the theory is not abandoned as throughout his brief he refers to alleged commonality in agents' sales presentations including common omissions and representations mandated by Mutual's training as a reason for class certification.
[4] Kaldenbach also alleged a cause of action for violation of the CLRA, which prohibits "unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer ...." (Civ. Code, § 1770, subd. (a).) While this appeal was pending, the Supreme Court issued its opinion in Fairbanks v. Superior Court (2009) 46 Cal. 4th 56 [92 Cal. Rptr. 3d 279, 205 P.3d 201] (Fairbanks), holding life insurance is neither goods nor services and thus not subject to the remedial provisions of the CLRA. (46 Cal. 4th 56 [92 at p. 59.) We invited the parties to submit supplemental letter briefing concerning Fairbanks. Kaldenbach has advised us that in view of the Fairbanks decision, he withdraws his CLRA claim. Accordingly, we need not discuss the court's order denying class certification as to that cause of action.
[5] We invited the parties to submit supplemental letter briefs addressing In re Tobacco II Cases, supra, 46 Cal. 4th 298.
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178 Cal. App. 4th 907 (2009)
ELIZABETH S. RANDS, Petitioner and Respondent,
v.
WILLIAM RANDS, Objector and Appellant.
No. B208062.
Court of Appeals of California, Second District, Division Six.
September 30, 2009.
*908 Law Offices of Tamila C. Jensen and Tamila C. Jensen for Objector and Appellant.
Benton, Orr, Duval & Buckingham, Thomas E. Olson and Maureen M. Houska for Petitioner and Respondent.
OPINION
GILBERT, P. J.
A trust provides that a settlor's incapacity may be established by two physicians' certifications that the person is mentally incapacitated. Revocation of incapacity may be established by two other physicians' certifications that the person is no longer incapacitated.
*909 Two of settlor's treating physicians certify that he is mentally incompetent. A year later, two other physicians certify that he is mentally competent.
Here we conclude the certifications of mental competence are insufficient because neither physician who found mental competence was aware of the earlier certifications of mental incompetence.
William Rands appeals an order of the probate court determining that his revocation of trust is ineffective due to his lack of capacity. We affirm.
FACTS AND PROCEDURAL HISTORY
William Rands and Elizabeth S. Rands married on August 26, 1978.[1] Each had children from previous marriages, but they did not have children together. At times during the marriage, conflict and rancor existed between each side of the family.
On May 7, 1996, William and Elizabeth settled and executed the Rands Family Trust and, later, an amendment to the trust (Trust). The Trust contained income-producing real properties among other assets. William and Elizabeth were the initial cotrustees.
The Trust provides that in the event of a settlor's incapacity, the other settlor shall become the sole trustee. (Par. 5.1.) The Trust also provides that it is "irrevocable and unamendable" during the period of a settlor's incapacity. (Par. 4.2(A)(c).) The Trust defines "incapacity" as a settlor's inability "to act rationally and prudently in his or her own best interests financially." (Par. 4.2(B)(b).)
The Trust requires determination of incapacity by court order, or by certification by two physicians. Thus, paragraph 4.2(B)(b) provides for evidence of incapacity by: "Duly executed, witnessed, acknowledged written certificates of two licensed physicians, at least one of which is then unrevoked. Each physician must be currently certified by a recognized medical board. Each certificate must verify that such physician has examined the person and concluded that by reason of ... mental deterioration ... such person had at the date thereof, become incapacitated (unable to act rationally and prudently in his or her own best interests financially)."
The Trust also provides that incapacity continues until a court rules otherwise, or until the physicians' certifications are revoked. Revocation is *910 accomplished "by a similar certificate to the effect that that person is no longer incapacitated. It must be executed by either the original certifying physician or by two other licensed, board certified physicians." (Par. 4.2(B).)
In 1998, William received a diagnosis of possible Parkinson's disease. He continued to manage the Trust real properties and household finances, however, until 2001 when he requested Elizabeth to "take over." By then Elizabeth had noticed a progressive decline in William's physical health and cognitive abilities.
Dr. Mark Sobers was William's treating physician from 2001 through 2004 (20 medical visits). He opined that William suffers from a progressive dementia due to Parkinson's disease. At times during medical visits, William was not oriented to time, could not perform simple math problems, and believed that "Charles Schwab" was the President. Sobers noted that William "tends to wander off the subject and is poorly focused." Sobers testified that dementia patients have "good days, their bad days, they are good in some areas, they are bad in some areas. Sometimes a certain part of the brain will deteriorate and the other will be perfectly fine."
On March 25, 2003, Sobers completed and executed a form document entitled "Physician's Determination of Incapacity." The document states that William "is currently incapacitated and unable to manage his ... finances and property." Although Sobers signed and dated the document, his signature was not witnessed or acknowledged as required by Trust terms. At trial, he testified that he completed and executed the document because he believed its content to be true.
Sobers also testified that William's son requested that he reconsider his conclusion of William's incapacity and revoke the document. Sobers stated that he declined to do so because William continued to suffer from cognitive deficits and dementia.
Dr. J. Timothy Sheehy, a neurologist, treated William between March 2001 and June 2003 (eight medical visits) for Parkinson's disease. In July 2002, Sheehy suspected that William suffered from dementia. On March 24, 2003, Sheehy completed and executed a "Physician's Determination of Incapacity" form. Although he signed and dated the document, his signature was not witnessed or acknowledged. At trial, Sheehy testified that he completed and executed the document because he believed it was an accurate statement of William's condition.
Elizabeth testified that she sought documents attesting to William's incapacity because bank accounts, financial investments, and utilities were in his *911 name alone. She stated that the physicians' certificates allowed her to manage the Trust property and household finances.
At times in 2002 and 2003, William executed real estate agreements and deeds pertaining to his properties. Elizabeth testified that the agreements and deeds were the culmination of negotiations over the years with family members.
In February and April 2004, Dr. Robert Hutchman, a neurologist specializing in Parkinson's disease, examined and tested William and prescribed medication. Hutchman concluded that William had mild cognitive problems, but not dementia. On April 2, 2004, Hutchman opined in a letter that William "is capable of making important decisions, or in other words, is clinically a personally competent individual."
On April 9, 2004, William's son Randall drove him to Oregon to reside there with him. Elizabeth testified that William did not leave willingly.
Later that month, Randall and William returned to Oxnard to visit Dr. Ju-Sung Wu, a neurologist and psychiatrist. Following a consultation, Dr. Wu wrote a three-page evaluation stating that William "is able to make decisions regarding his health, financial status and he is capable of signing any paperwork or ... Power of Attorney." Wu noted that William was not confused or disoriented and that his mental status was good.
Later, Randall and William visited a document preparation service. There William executed a revocation of Trust, dated April 27, 2004.
William now lives with his son in Medford, Oregon. In 2004 and 2005, William's treating physicians in Oregon concluded that he did not suffer from progressive dementia. With the passage of time, however, he has suffered two broken hips, a stroke, and serious cognitive decline. The parties agree that as of June 29, 2007, William no longer has legal capacity and will not regain it.
Following consultation with an attorney, Elizabeth filed a petition for legal separation on June 8, 2004. She testified that she intended to preserve Trust property against attacks from her stepchildren. On September 12, 2005, William filed an amended response requesting dissolution of marriage. He also requested the family law court to divide the Trust assets. Elizabeth has not seen William since April 2004, although she had occasional telephone contact with him in 2005.
On September 29, 2005, Elizabeth filed a petition for instructions regarding the validity of the revocation and William's capacity, among other things. The *912 probate court consolidated the family law proceedings with the proceedings regarding the Trust. After presentation of evidence, including witness testimony, the probate court determined that William lacked capacity on April 27, 2004, to revoke the Trust. In ruling, the court reasoned in part that Drs. Hutchman and Wu "were denied the opportunity to consider the fact that [Drs.] Sobers and Sheehy had previously found William Rands to lack capacity."
William appeals and contends that the probate court erred by finding that he lacked capacity to revoke the Trust.
DISCUSSION
I.
William argues that the trial court erred by finding that the letters of Drs. Hutchman and Wu were insufficient to revoke the letters of Drs. Sobers and Sheehy. He asserts that the trial court mistakenly believed that the Trust requires that physicians making capacity determinations be provided determinations previously made by other physicians. (Estate of Powell (2000) 83 Cal. App. 4th 1434, 1440 [100 Cal. Rptr. 2d 501] [interpretation of trust seeks settlor's intent as revealed in document considered as a whole].)
(1) In interpreting a written instrument, including a declaration of trust, we determine and give effect to the intent of the settlor. (Scharlin v. Superior Court (1992) 9 Cal. App. 4th 162, 168 [11 Cal. Rptr. 2d 448].) The interpretation of a written instrument is a question of law unless the interpretation depends upon conflicting extrinsic evidence. (Ibid.) We construe the instrument independently. (Ibid.)
(2) The trial court did not err by finding the Hutchman and Wu letters insufficient to revoke the letters provided by Sobers and Sheehy. Paragraph 4.2(B) of the Trust provides that revocation is effected "by a similar certificate to the effect that that person is no longer incapacitated." The language of the Trust requires that subsequent letters revoke earlier letters. The obvious purpose of the requirement is that subsequent evaluating physicians acknowledge there is a change in or recovery of capacity. Neither Dr. Hutchman nor Dr. Wu knew of the earlier letters nor did they revoke them.
II.
William asserts that the trial court erred by speculating upon the opinions that Hutchman and Wu would have formed had they known that Sobers and *913 Sheehy had already determined that he lacked capacity. He points to this statement in the court's ruling: "The Court is not persuaded that Drs. Hutchman, Wu, Peard, Sanchez or Davis would have come to their same conclusion had they had the benefit of the findings by Sobers and Sheehy."
We do not interpret the court's comment as speculation or conjecture. Indeed it makes the point that the court could not know what the opinions of other physicians would have been had they known they were attesting to a revocation of incapacity. In any event, the comment is harmless error.
III.
William contends that the trial court erred by ignoring the Trust requirements for physician certifications of incapacity. He points to the requirements of paragraph 4.2(B)(b) that the "executed, witnessed, [and] acknowledged" certifications must "verify" that the physician has examined the person and concluded that he is "unable to act rationally and prudently in his or her own best interests financially." William correctly asserts that the Sobers and Sheehy letters are neither witnessed nor acknowledged. He asserts that neither physician performed a capacity examination prior to executing the certification.
The lack of witnessing or acknowledgement does not invalidate Sobers's and Sheehy's certifications of incapacity because the certifications fulfilled the settlors' intent of reliable and credible evidence of incapacity. At trial, Sobers and Sheehy testified that they executed and dated the certifications because they believed them to be true.
(3) Moreover, Sobers and Sheehy were William's treating physicians and each had examined him frequently over a period of years. Each physician administered "Mini-Mental Status Examinations" to William over the course of treatment, with varying results. The trial court heard the testimony of William's physicians and received evidence of physician notes and charts. The weight of the evidence and the credibility of expert witnesses are matters for the trial court. (City and County of San Francisco v. Ballard (2006) 136 Cal. App. 4th 381, 396 [39 Cal. Rptr. 3d 1].) Sufficient evidence supports the trial court's finding that Drs. Sobers and Sheehy executed capacity certifications consistent with Trust requirements.
IV.
William argues that the trial court erred by finding that he lacked capacity to revoke the Trust. He asserts the trial court did not apply the factors set forth in Probate Code section 811 regarding a court finding of incompetency.
*914 In finding William's revocation of trust ineffective, the trial court relied upon the certifications of Sobers and Sheehy, which in turn rest upon the requirements of the Trust. The court did not make an original finding of incompetency resting upon the requirements of Probate Code section 811.
The order is affirmed. Respondent shall recover costs on appeal.
Yegan, J., and Coffee, J., concurred.
NOTES
[1] We shall refer to the parties by their given names not from disrespect, but to ease the reader's task.
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379 Pa. Super. 331 (1988)
549 A.2d 1320
COMMONWEALTH of Pennsylvania
v.
Luis R. ROMAN.
Appeal of George R. ZAISER.
Supreme Court of Pennsylvania.
Argued August 16, 1988.
Filed November 3, 1988.
*333 George R. Zaiser, Franklin, for appellant.
William G. Martin, Jr., District Attorney, Franklin, for Com., appellee.
Before BROSKY, KELLY and HESTER, JJ.
HESTER, Judge:
Attorney George R. Zaiser appeals from the order entered September 9, 1987, in the Court of Common Pleas of Venango County, denying his petition to withdraw as defense counsel in the matter of Commonwealth v. Roman. We reverse.
Appellant, a Pennsylvania attorney, was hired to represent Luis R. Roman in two criminal cases one dealing with delivery of cocaine, the other with possession with intent to deliver cocaine, possession of cocaine, and possession of a small amount of marijuana. Appellant and Roman entered into a fee arrangement which provided that in the event Roman failed to make payment when due, appellant could withdraw from further representation. Roman was convicted of the charges following two jury trials. His post-verdict motions were denied, and he was sentenced to a term of incarceration on August 21, 1987. Appellant filed an appeal in both cases to this court and then petitioned to withdraw his representation. The trial court denied the petition, and this timely appeal followed.
Appellant contends that the client consented to his withdrawal. Moreover, the trial court accepted as true his allegation that Roman owed him $12,518.58. However, the court did not find this fact dispositive. The court wrote:
As the trial judge, we recognize that counsel has devoted his professional skills and much time in his capable representation of defendant. However, as of May 22, 1987, when total counsel fees and costs in the sum of $12,518.58 had been incurred, counsel had to know the account *334 was delinquent (for what further period of time does not appear of record).
We conclude his petitions to withdraw his representation at this late stage of the proceedings, when appeals are pending, are not timely filed.
Trial court opinion at 3.
We respectfully disagree with the court's reasoning and, accordingly, reverse.
"There are no prophylactic rules which exist when determining whether a denial or withdrawal amounts to an abuse of discretion. Each case must be decided by balancing the competing interests giving due regard to the facts presented." Commonwealth v. Scheps, 361 Pa.Super. 566, 576, 523 A.2d 363, 368 (1987) (concurring and dissenting opinion by Wieand, J.; dissenting opinion by Olszewski, J.). Judge Cercone, writing the lead opinion, noted that the attorney and his criminal client agreed to a fee arrangement, but that when it became apparent that the client would be unable to pay $6,000.00 in outstanding fees and estimated future fees of $150,000.00, the attorney filed a petition to withdraw. At the hearing on the petition, the client indicated his intent to discharge the attorney since he could not afford his services. The trial court refused to grant the withdrawal. We reversed.
We found that withdrawal was appropriate under Pennsylvania Code of Professional Responsibility, Disciplinary Rule 2-110(C)(1)(f), which holds that a lawyer may request permission to withdraw if his client "[d]eliberately disregards an agreement or obligation to the lawyer as to expenses or fees." Moreover, since the client dismissed the attorney, we found DR 2-110(C)(5) applicable (a lawyer may request permission to withdraw when "[h]is client knowingly and freely assents to termination of his employment.") We concluded:
Where a lawyer has conscientiously represented his client and has not left him without time to prepare his case for trial or to procure other counsel for such trial, his petition for withdrawal is not made in bad faith. And where said client made in bad faith [sic] owes past legal *335 fees of a substantial amount and is not in a position to pay for future legal fees for a protracted trial, there is no reason to deny an attorney's petition for leave to withdraw. . . The court's denial of Mr. Lieberman's petition imposes a punishment resulting in the risk of detriment to his career, let alone substantial financial losses. It should not be permitted. After all, it is the client's responsibility and not the attorney's to pay for the heavy costs of trial.
Id. 361 Pa.Super. at 581-82, 523 A.2d 370.
In Commonwealth v. Sweeney, 368 Pa.Super. 33, 533 A.2d 473 (1987), we reversed a trial court order and permitted counsel to withdraw from representing an indigent client in the latter's appeal to this court, finding it significant that there was no record support for the trial court's finding that the client had compensated counsel for taking the appeal. "[T]he trial court . . . overlooked the one crucial factor which goes to the heart of the instant appeal and upon which [counsel] premised his plea to withdraw from further representation. That is, the trial court failed to consider the economics of [counsel's] continued representation." Id. 368 Pa.Super. at 40, 533 A.2d at 477.
We also considered the Code of Professional Responsibility, Ethical Consideration 2-31, which states that counsel should continue to represent a client through the appellate process unless permission to withdraw is granted, and Ethical Consideration 2-32, which states that counsel's decision to withdraw should be made only after due notice and recommendation of employment of another counsel to protect the welfare of the client and to minimize any prejudice to the client due to the withdrawal. We found that counsel satisfied these considerations as he sought permission to withdraw, offered as substitute counsel his law associate, and prepared a notice of appeal on the client's behalf.
Sweeney further cited the Code of Professional Responsibility, Disciplinary Rule 2-110, which provides for mandatory withdrawal of counsel if he is discharged by his client, and allows permissive withdrawal if the client knowingly and freely assents to the termination of counsel's employment. *336 Applying these standards, we noted that at the sentencing hearing, the client requested that the court appoint counsel to represent him on appeal. Moreover, the client remained silent when counsel advised the court that the client was without funds to retain him. We concluded: "We deem this silence, coupled with [the client's] record request for appointment of counsel because of his indigency, to be at least an implied acquiescence in [counsel's] withdrawal, and, as such, an implicit discharge of [counsel] from further representation."
Turning to the instant case, as in both Scheps and Sweeney, the client has failed to tender payment due his attorney, appellant. He owes appellant more than $12,000.00 for services rendered. This is in violation of a fee arrangement whereby appellant and the client agreed that if the latter failed to make payment when due, appellant could withdraw. In both Scheps and Sweeney, we reversed a trial court order and allowed counsel to withdraw primarily due to the client's failure to pay him. We find these cases dispositive.
By the clear terms of the fee arrangement, the client was cognizant that appellant could withdraw his representation at any time. Code of Professional Responsibility, Disciplinary Rule 2-110(C)(1)(f) allows a lawyer to request permission to withdraw when his client "[d]eliberately disregards an agreement or obligation to his lawyer as to expenses or fees." See also Commonwealth v. Scheps, supra. Contrary to the trial court's reasoning, it is not important whether or for how long counsel was aware that he was owed fees. See trial court opinion at 3. Rather, the principal inquiry under DR 2-110(C)(1)(f) is whether the client was aware of his failure to pay his counsel. It is only reasonable to infer that the client knowingly and intelligently failed to pay a substantial sum for services rendered.
It also would be reasonable to hold that the client knowingly and freely assented to the termination of appellant's employment. DR 2-110(C)(5). Appellant's petition to withdraw asserts that the client consented to the withdrawal. *337 Moreover, by voluntarily entering into the fee arrangement, it is reasonable to assume that the client knowingly and freely assented to the termination. See also Commonwealth v. Sweeney, supra.[1]
Furthermore, consistent with Scheps and Sweeney, appellant has minimized any prejudice which might occur to the client. Nothing before us reveals that appellant represented the client in any but a competent and conscientious manner. It is clear that he performed numerous duties in representing the client in two cases without compensation. Appellant waited until he filed an appeal to this court on the client's behalf before petitioning to withdraw; he did not seek to withdraw in the midst of trial proceedings. The petition to withdraw avers that he advised the client of his intention to withdraw more than one month prior to filing the petition and that he discussed the matter with him on numerous occasions prior to that date. We believe that appellant has acted to minimize the inconvenience to the client due to his withdrawal.
Order vacated; case remanded for the appointment of counsel.
NOTES
[1] Following the filing of Commonwealth v. Sweeney, supra, the Commonwealth-appellee reversed the position it had taken in its brief and, in a letter to this court, conceded that appellant should be permitted to withdraw.
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314 Md. 96 (1988)
549 A.2d 10
STATE OF MARYLAND
v.
JOHN CLAYTON BITTINGER.
No. 157, September Term, 1986.
Court of Appeals of Maryland.
October 31, 1988.
Norman L. Smith, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., on the brief), Baltimore, for appellant.
Jose Felipe Anderson and George E. Burns, Jr., Asst. Public Defenders (Alan H. Murrell, Public Defender, on the brief), Baltimore, for appellee.
Argued before MURPHY, C.J., and ELDRIDGE, COLE, RODOWSKY, COUCH[*], McAULIFFE and ADKINS, JJ.
McAULIFFE, Judge.
On September 2, 1986, Judge Theodore Eschenburg of the Circuit Court for Worcester County conducted a proceeding to determine whether the guilty plea of John Clayton Bittinger should be accepted. What might have been a routine proceeding went awry for two basic reasons the defendant's trial attorney[1] carefully orchestrated the proceedings to produce a result which was the very antithesis of his plea, and the trial judge erred in his assessment of the legal consequences of what had transpired. Offended by the tactics of defense counsel, but believing himself bound to this course of action, the trial judge found the defendant not guilty of the offense to which the plea had been proffered, and granted Bittinger's motion to dismiss the remaining charges. In doing so, Judge Eschenburg told the State's Attorney, "I hope you go to the Court of Appeals ... never have I ever wanted to be reversed so badly in all my life." The State did, and we shall.[2]
The charges in this case grew out of a confrontation between Bittinger and an off duty police officer at the Mini Market in Ocean City. As the officer, in civilian clothes, was attempting to enter the market, Bittinger exited, pushing the officer out of the way and directing abusive and threatening language toward him. Shortly thereafter, friends of Bittinger's, who were waiting in a nearby vehicle, became involved. Ultimately, Bittinger withdrew a knife from his pocket, opened and locked the blade, and approached the officer with the knife extended in front of him, saying "I am going to kill you." When Bittinger was approximately an arm's length from him, the officer produced his off duty pistol, and identified himself as a police officer. Bittinger said, "Oh shit," and thus ended the confrontation.
A two-count criminal information was filed in the Circuit Court for Worcester County charging Bittinger with assault with intent to murder, and assault. On the day scheduled for trial, the State's Attorney offered an amended information, and the following colloquy ensued:
STATES ATTORNEY: Your honor, I am presenting to the court this morning an amended Criminal Information in this proceeding. Upon acceptance of a plea of guilty to this charge, the amended charge, the State will be nol prossing the two counts from the original charge, which were assault with an intent to murder and simple assault. The amended charge is carrying a dangerous weapon with intent to injure.
* * * * * *
THE COURT: I assume this amended Criminal Information is part of a plea bargain.
DEFENSE ATTORNEY: Yes, it is.
THE COURT: Mr. Bittinger, do you agree with this?
THE DEFENDANT: Yes, sir.
THE COURT: All right, it's received and accepted by the court.
Judge Eschenburg then advised and questioned the Defendant in accordance with the requirements of Maryland Rule 4-242(c), after which he said, "I am satisfied the plea is given freely, knowingly, and voluntarily." He then directed the Defendant to be seated and turned to the State's Attorney for a proffer of facts that would establish the factual basis for the plea. Following an extensive proffer, to which Bittinger and his counsel agreed with only minor corrections, Judge Eschenburg began to announce his finding concerning the sufficiency of the factual predicate, when he was interrupted by Bittinger's counsel. The following occurred:
THE COURT: Based upon the statement of facts
DEFENSE ATTORNEY: If I may, prior to the court entering a plea finding, I understand the plea bargain arrangement is that upon acceptance of a plea of guilty the court or the State's Attorney would be nol prossing the other charges.
STATE'S ATTORNEY: That is correct.
THE COURT: I would imagine that is what he had in mind.
DEFENSE ATTORNEY: With regard to a plea of guilty, the court must find the factual predicate with the State's statements of fact prior to entering a finding of guilt. I'd ask the court to review In re Daryl L., decided July 14th of this year, prior to a finding of guilt.
It soon became apparent that Bittinger's counsel was arguing that the court could not pronounce a finding of guilt pursuant to the plea, because the factual predicate was lacking. The amended information charged Bittinger with openly carrying a dangerous and deadly weapon with the intent to injure, a violation of Md.Code (1957, 1982 Repl. Vol., 1986 Cum.Supp.) Art. 27, § 36(a). The problem, said Bittinger's counsel, was that § 36(a) explicitly excluded "penknives without switchblade" from its coverage, and the knife used by Bittinger was a penknife without a switchblade. Counsel's case reference was to In re Daryl L., 68 Md. App. 375, 511 A.2d 1108 (1986), in which the Court of Special Appeals held that an eight and one-half inch folding knife with a locking mechanism, but without a switchblade or gravity opening feature, was a penknife within the meaning of the exclusion of § 36(a).
We are without a clear description of the knife. In his proffer of facts, the State's Attorney told the court Bittinger "pulled a knife out of his pocket, with his left hand the defendant took the knife, opened the blade and locked it." Defense counsel described the weapon as "a buck knife, folding into the handle." The State's Attorney apparently agreed that the knife was a penknife without switchblade within the meaning of the exclusionary language of § 36(a), and we proceed on that assumption.
Bittinger's counsel then argued that even though his client could not be found guilty, Bittinger had fulfilled his part of the bargain, and the State was obliged to enter a nolle prosequi on each assault charge, as it had promised. Bittinger's counsel said:
[A]s the State's Attorney proffered to the court, upon acceptance of a plea of guilty from the Defendant, the State will be nol prossing the remaining charges. The plea has been accepted. We met our part of the bargain, we have pled guilty, and the plea was accepted.
At this point in the proceedings, the judge had determined that Bittinger's plea was voluntary and intelligent. He had not yet determined that there was an adequate factual basis for the plea. He had heard the State's Attorney's proffer of facts and apparently was about to resolve that question when Bittinger's counsel interrupted to inform him that there was no factual basis for the plea.
The record is clear that the plea agreement was expressly conditioned upon the acceptance of the plea of guilty. At the outset of the proceedings, the State's Attorney said:
Upon acceptance of a plea of guilty to this charge, the amended charge, the State will be nol prossing the two counts from the original charge, which were assault with an intent to murder and simple assault.
On at least two occasions, Bittinger's counsel confirmed the existence of that condition.
If I may, prior to the court entering a plea finding, I understand the plea bargain arrangement is that upon acceptance of a plea of guilty the court or the State's Attorney would be nol prossing the other charges.
* * * * * *
And as the State's Attorney proffered to the court, upon acceptance of a plea of guilty from the Defendant, the State will be nol prossing the remaining charges.
The condition was never met. In no sense had the plea of guilty been accepted. When a plea of guilty is accepted, there is a conviction, and nothing remains to be done but the imposition of sentence. Boykin v. Alabama, 395 U.S. 238, 242, 89 S. Ct. 1709, 1711, 23 L. Ed. 2d 274 (1969); Sutton v. State, 289 Md. 359, 364, 424 A.2d 755 (1981). Here, the trial judge not only refused to accept a plea, but entered a finding of not guilty as to that charge.[3] The specific condition of the plea agreement not having been met, Bittinger's motion to dismiss the assault charges should have been denied.
Although our holding in this case turns upon the fact that the plea had never been accepted, we do not suggest that Judge Eschenburg would have been without authority to strike the acceptance of the plea had Bittinger's counsel waited until just after acceptance to suggest the inadequacy of the factual predicate. A defendant may mount a challenge to the plea with the trial court during the time the case remains within that court's jurisdiction, and may thereafter seek to challenge the plea in the appellate courts. A defendant successful in challenging the plea must realize, however, that the remedy is ordinarily to place the parties in their original position. Sweetwine v. State, 288 Md. 199, 421 A.2d 60 (1980); Rojas v. State, 52 Md. App. 440, 450 A.2d 490 (1982).
Bittinger suggests that he will be severely prejudiced by the guilty plea proceedings if the State is allowed to proceed on the original charges, because during the plea procedure he confessed certain facts to be true. His fears are groundless. The rationale of Kercheval v. United States, 274 U.S. 220, 223-25, 47 S. Ct. 582, 583, 71 L. Ed. 1009 (1927), is fully applicable to this case, so that neither the fact of Bittinger's plea nor any admissions made by him in the course of the plea proceedings will be admissible at the trial of the issues in the assault cases.
JUDGMENT OF THE CIRCUIT COURT FOR WORCESTER COUNTY DISMISSING THE CHARGES OF ASSAULT WITH INTENT TO MURDER AND ASSAULT REVERSED; CASE REMANDED TO THAT COURT FOR FURTHER PROCEEDINGS. COSTS TO BE PAID BY APPELLEE, JOHN CLAYTON BITTINGER.
NOTES
[*] Couch, J., now retired, participated in the hearing and conference of this case while an active member of this Court; after being recalled pursuant to the Constitution, Article IV, Section 3A, he also participated in the decision and adoption of this opinion.
[1] Bittinger is represented by different counsel before this Court.
[2] We granted a writ of certiorari on our own motion before consideration of this case by the intermediate appellate court.
[3] The State has challenged only the dismissal of the assault charges, and thus the propriety of the entry of a not guilty finding on the weapon charge, and the right of the State to challenge that action on appeal, are not before us.
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708 N.W.2d 683 (2006)
2006 SD 4
Suzanne KORZAN, Joan Schulz, Betty Heidinger, Lucille Geisler and Gladys Sebastian, Plaintiffs and Appellants,
v.
CITY OF MITCHELL, Defendant, and
Roman Catholic Church of Holy Family of Mitchell, Intervenor and Appellee.
No. 23591.
Supreme Court of South Dakota.
Argued November 8, 2005.
Decided January 4, 2006.
*684 Timothy W. Bjorkman, Mike C. Fink of Bjorkman & Fink, Bridgewater, SD, for appellants.
John F. Cogley of Morgan, Theeler, Wheeler, Cogley & Petersen, Mitchell, SD, appellee.
TIMM, Circuit Judge.
[¶ 1.] Korzan appeals from the circuit court's findings that the City of Mitchell had complied with SDCL 1-19A-11.1 and that application of SDCL 1-19A-11.1 created a substantial burden on Holy Family in violation of the Religious Land Use and Institutionalized Persons Act of 2000. We Affirm.
Facts and Procedural History
[¶ 2.] The Appellants seek to prevent the demolition of Notre Dame Academy, a building that is listed on the National and State Registers of Historic Places. The Notre Dame Academy (School) is located on the one block campus of the Holy Family Catholic Church (Holy Family). The School, a three story structure, was built in 1912. Additions were constructed in 1922 and 1955. The School, church and a rectory, also located on the campus, were listed on the National Register of Historic Places in 1974 and subsequently placed on the South Dakota Register.
[¶ 3.] In 1995 Holy Family received a report from the State Fire Marshall's Office whose inspection of the School revealed a number of building and fire code violations as well as other unsafe conditions that required correction. Holy Family, along with Holy Spirit (the other Catholic Church in Mitchell) formed a task force to study the educational facilities at both locations with the initial goal of preserving the School. The task force and the two Parishes met on numerous occasions and eight options were studied. The task force ultimately recommended that the old school be demolished, a new school be built at Holy Family, and that the school at Holy Spirit be added on to and remodeled. Members of both Parishes met in September of 1998. All options were explained and discussed. A strong majority approved the recommended option of demolishing the School.
[¶ 4.] In May of 1999 Holy Family announced plans to demolish the School and initiated the process with the City of Mitchell (City) to obtain a demolition permit. The State Office of History (SOH) was notified on May 19, 1999, of the proposed project in accordance with SDCL 1-19A-11.1. SOH determined that the project would have an adverse effect on a historic building and requested a case report on June 1, 1999. A case report was prepared. The Mitchell City Council (City Council) considered the project in lengthy discussions at a meeting on May 17, 1999. The Case Report was considered by the Mitchell Historic Preservation Commission (Historic Commission) on July 6, 1999. The Historic Commission voted to unanimously agree with the findings of the Case Report that there were no feasible and prudent alternatives to the demolition of *685 the School and that the report included all possible planning to minimize the harm to the historic property.
[¶ 5.] The City Council considered the matter again on July 6, 1999; and voted unanimously to adopt the Case Report and issue the demolition permit. The City Council found that based on the consideration of all relevant facts, there were no feasible and prudent alternatives to the proposal to demolish the School and that the project included all possible planning to minimize harm to historic property. Korzan appealed to the Sixth Judicial Circuit on July 16, 1999. On October 25, 2001, the circuit court remanded the matter back to the City Council for further proceedings only after the SOH had the opportunity to comment on the project. The circuit court determined that SDCL 1-19A-11.1 did not permit the City Council to make its final findings regarding feasibility and alternatives prior to comment from SOH.
[¶ 6.] The application for a demolition permit lay dormant from the date of the circuit court's remand in 2001 well into 2003. During that time, Holy Family and Holy Spirit made the decision to construct a new school at Holy Spirit. The question of what to do with the School at Holy Family remained under study. Evolving needs of the Parish came into play, i.e., the need for a handicap accessible entrance to the Church and more off-street parking. Holy Family also considered several other options for the School. These options included renovation of the School for use as gathering space, a small chapel and offices or converting the School to housing for the elderly. In evaluating these options, it was determined that having a housing complex and the Church in such close proximity would not be compatible.[1] It was also determined that renovating the School would not be suitable for the needs of the Parish. Holy Family concluded that the occupied space could be used in a more efficient manner for a new structure and off-street parking. Thus, in 2003 Holy Family again sought a demolition permit from the City Council.
[¶ 7.] A supplement to the Case Report was prepared and sent to the SOH. The Historic Commission held a hearing on August 20, 2003, and received testimony from proponents and opponents. They again considered the matter on August 23 and October 22, 2003. At both of these meetings the Historic Commission heard proposals and testimony from both sides.
[¶ 8.] On October 28, 2003, the Historic Commission having reviewed both the original Case Report and the Supplement, considered the testimony of proponents and opponents, and examined the old school, voted five to two in favor of a motion to agree with the findings of both the original Case Report and Supplement that there were no feasible and prudent alternatives to demolition of the School.
[¶ 9.] The City Council received a response from SOH on December 3, 2003. In this response SOH concluded that several feasible and prudent alternatives to demolition existed including: 1) doing a less than full scale renovation of the original building for use as a chapel with a handicapped accessible entrance with the rest of the building being "mothballed" for future renovations; and, 2) supporters of the School be given the opportunity to raise money to pay the difference, if any, between the cost of renovating the building and the cost of demolishing the current building and constructing a new building.
[¶ 10.] The City Council considered the request on December 15, 2003. After reviewing *686 the original Case Report, the Supplement, the response from SOH and hearing testimony from both sides, the City Council unanimously adopted a resolution. This resolution acknowledged the Case Report, the Supplement and the decision of the Historic Commission and stated, based on consideration of all relevant factors, that there were no reasonable and prudent alternatives to the demolition of the School. The City Council also found that the project included all possible planning to minimize harm to the historic property resulting from the demolition.
[¶ 11.] Korzan appealed again to the Sixth Judicial Circuit. The circuit court affirmed the decision of the City Council in all respects. The court also concluded that the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), 42 USC § 2000cc et seq., prohibits a governmental body from imposing or implementing a land use regulation in a manner that would substantially burden the religious exercise of a person or institution. The court further held that as it was being applied in this case, SDCL 1-19A-11.1 was a "land use regulation" as defined in RLUIPA and that the statutory prerequisites of RLUIPA were satisfied. Finally, the court found that RLUIPA prohibited the application of SDCL 1-19A-11.1, as the effect of the statute was to deny Holy Family the ability to develop its property as it desires in accord with its religious teachings. Korzan appeals raising the following issues:
1. Whether the trial court erred in finding that the Mitchell City Council had complied with SDCL 1-19A-11.1.
2. Whether application of SDCL 1-19A-11.1 created a substantial burden on Holy Family's religious exercise and is thus barred under RLUIPA.
Standard of Review
[¶ 12.] We review an agency's decision the same as the circuit court, "unaided by any presumptions of the correctness of the circuit court's determination." In re B.Y. Development Inc., 2000 SD 102, ¶ 6, 615 N.W.2d 604, 607. Our review is confined to the record. SDCL 1-26-35. Questions of law and statutory construction are fully reviewable. B.Y. Development, 2000 SD 102, ¶ 6, 615 N.W.2d at 608. This Court shall give great weight to the findings made and inferences drawn by an agency on questions of fact. SDCL 1-26-36. The court may reverse or modify the decision if the administrative findings, inference, conclusions, or decisions are clearly erroneous in light of the entire evidence in the record or arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. Id.
Analysis and Decision
[¶ 13.] 1. Whether the trial court erred in finding that the Mitchell City Council complied with SDCL 1-19A-11.1.
[¶ 14.] Korzan contends that the City Council did not comply with the requirements of SDCL 1-19A-11.1. This statute provides in relevant part:
The state or any political subdivision of the state, or any instrumentality thereof, may not undertake any project which will encroach upon, damage or destroy any historic property included in the national register of historic places or the state register of historic places until the Office of History has been given notice and an opportunity to investigate and comment on the proposed project. The office may solicit the advice and recommendations of the board with respect to such project and may direct that a public hearing be held thereon. If the office *687 determines that the proposed project will encroach upon, damage or destroy any historic property which is included in the national register of historic places or the state register of historic places or the environs of such property, the project may not proceed until:
(1) The Governor, in the case of a project of the state or an instrumentality thereof or the governing body of the political subdivision has made a written determination, based upon the consideration of all relevant factors, that there is no feasible and prudent alternative to the proposal and that the program includes all possible planning to minimize harm to the historic property, resulting from such use; and
...
Any person aggrieved by the determination of the Governor or governing body may appeal the decision pursuant to the provisions of chapter 1-26[.]
SDCL 1-19A-11.1. Specifically, Korzan contends that the City Council failed to consider all relevant factors and failed to evaluate whether there were any feasible and prudent alternatives to the proposed demolition.
[¶ 15.] The City Council was informed by the SOH that the proposed demolition of the School would destroy historic property. Thus, under SDCL 1-19A-11.1 the City Council could not issue the demolition permit until it made a written determination, after reviewing all relevant factors, that there were no feasible and prudent alternatives and all possible planning to minimize harm to the historic property had been considered. This Court has held that a city "is not required to consider as `relevant factors' any and all alternatives, but only those supported by sufficient facts to indicate they are feasible and prudent." B.Y. Development, 2000 SD 102, ¶ 16, 615 N.W.2d at 610.
[¶ 16.] Holy Family, the City Council, and the Historic Commission considered several alternatives to demolishing the School, either in whole or just the 1922 and 1955 additions. Each time, Holy Family, the Historic Commission and the City Council determined that none of the alternatives were feasible. The last two alternatives considered by the City Council were provided by the SOH. These alternatives were: 1) a less than full scale renovation of the original building and "mothballing" the remaining portion of the building; and, 2) allowing supporters of the building the opportunity to raise money to pay the difference in costs between demolishing and building a new building to renovating the current building. As the trial court correctly pointed out, "mothballing" the School is neither feasible nor prudent. The trial court recognized that mothballing the structure would leave many unanswered questions: how long must the Church wait, who would pay for stabilization of the roof to prevent further deterioration of the building, who would pay the cost of maintenance, who would decide when a use was found and when the search was over? The determination by the City Council that the first alternative was not feasible was not clearly erroneous.
[¶ 17.] The other alternative provided by SOH, allowing Korzan an opportunity to raise money, is also not feasible or prudent. Holy Family, the Historic Commission, and the City Council have already determined that the needs of the church cannot be met unless the building is torn down. Raising money, an enterprise that may or may not succeed and could take several years, does not address this concern and it does not give Holy Family the space it needs. What it does give them is a building they do not want. The City Council was not clearly erroneous in determining this option was not feasible.
*688 [¶ 18.] This Court's function is to "decide from the record whether the [City Council] took a hard look at the prudent and reasonable alternatives using relevant factors and based its decision on evidence. The weight to be given the individual factors is for the [City Council] to decide." B.Y. Development., 2000 SD 102, ¶ 17, 615 N.W.2d at 611. The record reveals that extensive consideration has been given to this project, a project that has been ongoing for nearly six years. A Case Report detailing options and the feasibility of those options was prepared and reviewed by both the Historic Commission and City Council. Both bodies determined that, after considering all relevant factors, no feasible and prudent alternatives to the demolition of the School existed. This Case Report was sent to the SOH as required under SDCL 1-19A-11.1. A Supplement to the original Case Report was prepared, describing what had transpired from the time of the first appeal to the present. The Supplement set out the alternatives to demolition that had been considered and the reasons why they had not been pursued. The Supplement was reviewed by the Historic Commission and the City Council. Again the Historic Commission determined, after reviewing all relevant factors that no feasible and prudent alternatives to the proposed demolition of the School existed.
[¶ 19.] The City Council reviewed and approved the Supplement and the recommendations of the Historic Commission. This Supplement was then forwarded to the SOH for comment as per SDCL 1-19A-11.1. The City Council received and reviewed those comments from the SOH. At a meeting on December 15, 2003, the City Council also heard testimony and presentations from proponents and opponents of the project. At the conclusion of this meeting, the City Council passed a Resolution in which they acknowledged the hearings they had held and those held by the Historic Commission. They acknowledged the vote in favor of demolition by the Historic Commission. They acknowledged the comments provided by SOH and that they had considered them. Finally, the City Council concluded that upon consideration of all relevant factors, there were no feasible and prudent alternatives to the demolition of the School and the project included all possible planning to minimize harm to the historic property.
[¶ 20.] Based on the record, it is clear that the City Council took a `hard look' at this project. All options and proposals against demolition were presented by proponents and opponents to both the Historic Commission and the City Council on several occasions. Twice, after taking a `hard look' both the Historic Commission and the City Council determined that no feasible and prudent alternatives to demolition of the School existed.[2]
[¶ 21.] On this record, the trial court did not err in concluding that the City Council's determination was not clearly erroneous or arbitrary or capricious.
[¶ 22.] 2. Whether application of SDCL 1-19A-11.1 to this case creates a substantial burden on Holy Family's religious exercise and is thus barred under RLUIPA.
[¶ 23.] Because we have held the trial court ruled correctly on the first issue, the second issue need not be addressed.
[¶ 24.] Affirmed.
*689 [¶ 25.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and MEIERHENRY, Justices, concur.
[¶ 26.] TIMM, Circuit Judge, sitting for ZINTER, Justice, disqualified.
NOTES
[1] The School is located less than 100 feet from the Church.
[2] Although the parties engage in an extended discussion of authority from another jurisdiction, (Allen Realty, Inc. v. City of Lawrence, 14 Kan.App.2d 361, 790 P.2d 948 (1990) and Lawrence Preservation Alliance v. Allen Realty Inc., 16 Kan.App.2d 93, 819 P.2d 138 (1992)), the result in this case is controlled by B.Y. Development, 2000 SD 102, 615 N.W.2d 604. Consequently, we do not address that authority.
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970 So. 2d 342 (2007)
BAKER
v.
McDONOUGH.
No. SC07-1830.
Supreme Court of Florida.
November 8, 2007.
Decision without published opinion. Hab.Corp.denied.
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40 Cal. App. 2d 494 (1940)
HELEN P BLAIR, Respondent,
v.
NEW YORK LIFE INSURANCE COMPANY (a Corporation), Appellant.
Civ. No. 11298.
California Court of Appeals. First Appellate District, Division One.
August 21, 1940.
Meserve, Mumper, Hughes & Robertson and E. Avery Crary for Appellant.
Edw. C. Purpus for Respondent.
Ward, J.
This is an action to recover disability benefits accruing under a policy of insurance issued by defendant company on the life of plaintiff, with particular reference to what law governs the interpretation of the two-year incontestability clause in the policy. *496
Pursuant to a written application made at Tacoma, Washington, on or about September 23, 1927, and in consideration of the payment of the first year's premium, the New York Life Insurance Company issued a policy of life insurance to Helen P. Blair in the amount of $10,000. This amount was subsequently, by amendment, reduced to $8,000 and approximately thirty days later the company executed and issued a policy in that amount in New York, and delivered it to plaintiff in the state of Washington. In addition to life benefits, the policy contained a provision for the paymet of disability benefits of $10 for each $1,000 of the face of the policy for each completed month from the commencement of and during the period of continuous total disability. A waiver of the payment of premiums during such disability was also contained in the policy, and provision for restoration of the policy in case of default after such disability.
Plaintiff became disabled in 1929 and the company paid the disability benefits provided under the policy from February 15, 1929, to August 15, 1930. The record does not show the place of such payments but we may assume they were received by plaintiff in the State of Washington, at least until 1930 when she moved to California, where she has since resided. In October, 1932, plaintiff again became totally disabled and from such time until August, 1936, the company paid her the designated disability income payments. In the meantime, in December, 1932, the company made a loan to plaintiff upon the security of the value of the policy. In September, 1936, the company notified the insured that it elected to rescind the provisions for disability and double indemnity benefits because it had recently learned that Miss Blair, in her application for the policy, had failed to disclose material facts as to her physical condition. The company further notified her that it recalled its waiver of certain annual premiums and demanded the payment thereof, as well as the return to the company of amounts paid by its monthly disability income benefits.
In December, 1936, plaintiff filed this action in California to compel defendant company to pay all disability income benefits due since August 15th of that year and all payments that may thereafter become due until such time as her disability ceases. Defendant answered, and cross-complained *497 upon allegations of the falsity of certain statements in the original application for insurance, seeking a rescission of the total and permanent disability provisions of the policy and the return of benefits paid thereunder. Judgment was entered for plaintiff and against defendant, whereupon defendant appealed.
Appellant insurance company contends that the contract of insurance herein was to be performed in New York, and that its provisions are to be interpreted in accordance with the laws of that state. A long list of authorities are cited. These include two unreported cases from the appellate department of the Superior Court of Los Angeles (Furst v. New York Life Ins. Co., Civ. A-3895; Smith v. New York Life Ins. Co., Civ. A-3788): Monahan v. New York Life Ins. Co., (two cases) 26 Fed. Supp. 859; Head v. New York Life Ins. Co., 43 Fed.2d 517; Ostroff v. New York Life Ins. Co., 23 Fed. Supp. 724; Ostroff v. New York Life Ins. Co., 104 Fed.2d 986, and dissenting opinion by Wilbur, J.; New York Life Ins. Co. v. Waterman, 104 Fed.2d 990, and concurring opinion by Wilbur, J.; Harrigan v. Home Life Ins. Co., 128 Cal. 531 [58 P. 180, 61 P. 99]; Burr v. Western States Life Ins. Co., 211 Cal. 568 [296 P. 273]; Grauer v. Equitable Life Assur. Soc., 167 Misc. 30 [3 N.Y. SupP.2d 564]; Equitable Life Assur. Soc. v. Kushman, 276 N.Y. 178 [11 N.E. (2d) 719]; Steinberg v. New York Life Ins. Co., 263 N.Y. 45 [188 N.E. 152, 90 A.L.R. 642]; Guardian Life Ins. Co. of America v. Katz, 243 A.D. 11 [275 N.Y. Supp. 743].
The further contention is made that if the New York law is not controlling, then the law of the State of Washington, wherein the contract was entered into, governs. In support of this theory, appellant cites Fitzhugh v. University Realty Co., 46 Cal. App. 198 [188 P. 1023]; Bank of Yolo v. Sperry Flour Co., 141 Cal. 314 [74 P. 835, 65 L.R.A. 90]; Millis v. Continental Life Ins. Co., 162 Wash. 555 [298 P. 739], and other cases. It is claimed that both states permit an attack for fraud.
There is no specific provision that the policy is to be performed in New York, or that the laws of that state shall govern in a controversy involving the legal interpretation to be placed upon any part thereof. The policy provides that benefits for total disability will be paid "upon receipt at the *498 Company's Home Office" of due proof thereof. In connection with paragraph "Payment of Premiums", the policy reads: "All premiums are payable on or before their due date at the Home Office of the Company or to an authorized agent of the Company, but only in exchange for the Company's official premium receipt signed by the President, a Vice-President, a Second Vice-President, a Secretary or the Treasurer of the Company, and countersigned by the person receiving the premium. ..."
[1] While the laws of one state may determine the interpretation of one clause of a policy, and the laws of another state govern that of another clause, it must be conceded that the laws of two states upon a specified clause presented for interpretation, if in anywise inconsistent, may not jointly control. The parties hereto did not mutually agree that the laws of New York or Washington should prevail relative to the contract, as appears in Morrison v. Mutual Life Ins. Co. of N.Y., 15 Cal. 2d 579 [103 PaCal.2d 963]. Civil Code, section 1646, provides: "A contract is to be interpreted according to the law and usage of the place where it is to be performed; or, if it does not indicate a place of performance, according to the law and usage of the place where it is made", which means that the place where the contract is made is of importance when the contract does not indicate a specific place of performance.
In the instant case, the primary question to decide is whether or not plaintiff was entitled to the monthly disability benefits. If not, then the company might have been entitled to a return of the amounts paid by it, a cancellation of the total disability provisions of the policy and the return to plaintiff of premiums paid in that connection.
The insured had the privilege of paying the premiums to an authorized local agent, although the home office of the company was their final destination. The evidence shows that the premiums were mailed to New York, but the caption on the back of the policy indicates that it was issued through the "Tacoma Branch". Up to this point, as we construe the policy, it was originally intended to be performed partly in New York and partly in Washington. The first premium was paid in Washington one month prior to the execution by the company of the policy in New York; the policy was thereafter delivered to plaintiff in Washington. *499 The delivery usually completes a contract. (Mutual Life Ins. Co. v. Cohen, 179 U.S. 262 [21 S. Ct. 106, 45 L. Ed. 181].) [2] The law of the place of performance of an insurance contract controls as to its legal construction and effect, but that of the place where made governs on all questions of execution and validity (Flittner v. Equitable Life Assur. Soc., 30 Cal. App. 209 [157 P. 630]), unless the terms of the contract provide otherwise or the circumstances indicate a different intention. [3] In this case, the circumstances do not indicate that in the matter of the interpretation of the contract, the parties intended to be restricted to the laws of the State of Washington, where the contract was consummated by the delivery of the policy.
In the body of the policy, there is a provision that "This policy is free of conditions as to residence ... except as provided herein. ..." We fail to find an excepted condition. Under the terms of the policy, the premiums could be paid at the home office or to an authorized agent in exchange for the company's official receipt signed by a designated officer and countersigned by the agent receiving the premium. Under this provision, the contract was to be performed partly in New York and partly in any other place where the premiums were paid or other necessary business could be transacted.
[4] In recognizing California as the place for the payment of benefits by delivery thereof in this state, defendant waived any right to insist that the Washington law governed. The waiver is not one of jurisdiction, but of the right to apply the Washington law to an action tried in California. The intention of the parties, as gathered from attending circumstances, is controlling in determining the place of trial and the governing laws. [5] Liability for the breach of a contract partly performed in one state, and made and partly performed in another, is fixed by the laws of the state wherein the breach occurred. (17 C.J. S., p. 343.) The breach in this case was defendant's refusal to pay further disability income benefits to plaintiff in California.
In the present case we are not dealing with an insured who traveled out of the State of Washington and into another because the law of the second state was more favorable to her legal contentions--a situation that should not be approved; here the plaintiff moved to California in 1930. The *500 premiums were thereafter presumably paid from California. The disability income benefits commenced and were paid approximately two years later, and they continued for four years in California. The good faith of the plaintiff in this case may not be attacked upon the theory of change of residence. The safest rule to follow is that which upholds the contract. (Atchison, Topeka & Santa Fe Ry. Co. v. Smith, 38 Okl. 157 [132 P. 494, Ann. Cas. 1915C, 620].)
In brief, we hold that performance of the terms of the insurance contract was partly in New York and partly in Washington, and that under such circumstances the law of the place where the contract was made generally prevails; that defendant waived the law of Washington as controlling by its continuous acceptance of premiums from California, its payment of disability benefits here; also the making of a loan to Miss Blair upon the security of the value of the policy, without the surrender thereof, during the period that she lived in California, and, as appears from the record, after her second period of disability had commenced.
[6] As relates to the within case, one question is involved, namely, what is the law of this state relative to the "Incontestability" clause in the policy, which reads as follows: "This policy shall be incontestable after two years from its date of issue except for non-payment of premium and except as to provisions and conditions relating to Disability and Double Indemnity Benefits."
Appellant company contends that fraud on the part of Miss Blair in connection with statements as to her physical condition, as they appear on her application for insurance, provides the exception as to the policy's incontestability.
In Ostroff v. New York Life Ins. Co., 104 Fed.2d 986, an identical "incontestable" clause, with a like direction as to payment of premiums, was in dispute. (See, also, New York Life Ins. Co. v. Waterman, 104 Fed.2d 990.) In the Ostroff case, as in this, the repeated payment of premiums, except as waived, when plaintiff was totally disabled, could have been made under the terms of the policy outside of the State of New York. In that case, at page 989, the court said: "Without deciding what law would control the interpretation of the incontestability clause if the contract were entirely to be performed in New York, we hold that since the policy is to be performed both in California and New *501 York, and the case concerns the making and not the performance of the contract, the law of California, the place of making of the contract, controls. Cf. 12 C.J. 451." In the same case, at page 989, the court comments upon Burr v. Western States Life Ins. Co., supra, as follows: "... the sole question was the place of performance of payment of the benefits under the policy. The policy was construed as requiring the payment of later benefits claimed at San Francisco because the first payment was required by the policy to be paid there. It is obvious that if the policy had provided for the payment of later benefits at the residence of the insured, the place of performance would have changed as his residence changed."
California has answered the question in Coodley v. New York Life Ins. Co., 9 Cal. 2d 269 [70 PaCal.2d 602], involving an identical incontestability clause in another policy issued by the same company. It is conceded by the company that, after a stipulated period, evidence based on false statements, even though fraudulently made, was barred as a defense, unless by the terms of the policy fraud was expressly or impliedly excepted from the effect of the incontestability provision. (Dibble v. Reliance Life Ins. Co., 170 Cal. 199 [ 149 P. 171, Ann. Cas. 1917E, 34]; Mutual Life Ins. Co. v. Margolis, 11 Cal. App. 2d 382 [53 PaCal.2d 1017].)
Had defendant desired to take advantage of the exception provided in the incontestability clause as relates to the facts in this case, it could and should have definitely included such provision in the "Total and Permanent Disability" section of the policy, and had it desired that any controversy relative to an interpretation of this clause should be controlled by the laws of the place of execution of the contract, such provision could easily have been inserted in the policy.
In the trial of this action, in support of its contention that the terms of the contract should be construed in accordance with the laws of the State of New York, or of the State of Washington, appellant offered to prove that certain statements in the application signed by plaintiff were fraudulent and untrue; that plaintiff knew them to be untrue, and that the company was induced by the claimed fraudulent statements to issue the policy. An objection to the offer was sustained. Under the facts of this case, and the holding in Coodley v. New York Life Ins. Co., supra, the ruling was *502 correct. (Stroehmann v. Mutual Life Ins. Co. of N.Y., 300 U.S. 435 [57 S. Ct. 607, 81 L. Ed. 732]; Mutual Life Ins. Co. v. Hurni Packing Co., 263 U.S. 167 [44 S. Ct. 90, 68 L. Ed. 235, 31 A.L.R. 102]; Encyclopedia of Law of Insurance (Couch), sec. 2155, p. 6961; Ness v. Mutual Life Ins. Co. of New York, 70 Fed.2d 59; New York Life Ins. Co. v. Kaufman, 78 Fed.2d 398; Royal Insurance Co. v. Martin, 192 U.S. 149 [24 S. Ct. 247, 48 L. Ed. 385]; Cooley's Brief on Insurance, vol. 5, p. 4501 et seq.; Joyce on Insurance, 2d ed., vol. 5, pp. 6112, 6113.)
Certain findings are attacked which involve the questions just discussed. What has been said heretofore is sufficient answer thereto.
The judgment is affirmed.
Peters, P. J., and Knight, J., concurred.
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16 Cal. 2d 1 (1940)
FRANK MOGLE et al., Respondents,
v.
OLIVER B. MOORE et al., Appellants.
L. A. No. 16802.
Supreme Court of California. In Bank.
August 1, 1940.
Stead & Boileau, Charles R. Stead, R. Bruce Findlay and Will G. Fields for Appellants.
James L. King for Respondents.
THE COURT.
The appeal in this case was originally heard by the Fourth District Court of Appeal. Following a decision by that court, a petition for hearing by this court was granted. Consideration of the several points of law that have been presented by the respective parties to the litigation has resulted in a conclusion that the appeal was correctly decided by the District Court of Appeal. Its opinion rendered therein, which was prepared by Mr. Justice Marks of that court, is therefore adopted by this court as its own. It is as follows:
"This is an appeal from a judgment restraining Oliver B. Moore and Marjorie E. Moore, whom we will refer to as the defendants, from protecting their property from overflow from surface waters and from waters which escape from a watercourse known as West Cucamonga creek."
"The appeal is on the judgment roll. Under well-settled rules of law we are required to presume that the evidence supports the findings in every particular."
"Plaintiffs are owners of two tracts of land lying about seven miles southerly from the city of Upland in San Bernardino county. These parcels of land are separated by a strip of land called 'Comet Avenue'. Defendants own two parcels of land adjoining plaintiffs' property on the north. These two parcels are also separated by Comet avenue."
"Comet avenue is a strip of land twenty feet wide and extends in a northerly and southerly direction. We are not informed as to the location of its termini. From the findings we gather that there was no evidence showing it had been either dedicated or accepted as a public street or road."
"The country in question here is practically level with a general slope to the southwest from north of the city of Upland to beyond the properties of the parties involved in this controversy. [1] While there are no findings on this point, the following facts are of such common and universal everyday knowledge to people living near to or familiar with the general topography of this country that we may take judicial notice of them. (People v. Tossetti, 107 Cal. App. 7 [289 Pac. *5 881].) A range of mountains extending in a general easterly and westerly direction rises abruptly from the valley floor a few miles north of the city of Upland. Many canyons empty from these mountains in a general southerly direction. The grade of descent of the land southerly is sharp at the base of this range but is reduced as the distance from the mountains increases. Numerous washes, streams and watercourses from the canyons emptying from the mountains extend into and some of them across the valley floor and during periods of heavy rains carry a considerable volume of water. With these general observations we may proceed to a consideration of the findings of fact made by the trial court."
"Comet avenue, as it runs between the two parcels of land of defendants, is marked, in its center, with a row of eucalyptus trees. It is unmarked between the lands of plaintiffs and has been cultivated and used by them and their predecessors. The natural surface of Comet avenue has about the same elevation as the abutting property. The trial court found that 'there is no natural water channel, ditch or course upon' Comet avenue as it extends between the parcels of land owned by the respective parties hereto."
"The rainy season of 1936-1937 commenced in November, 1936, and ended in March, 1937. Between those dates defendants constructed a fence along their property abutting on the west side of Comet avenue. This fence was constructed of 'wooden posts and strands of woven and barbed wire' and tended to obstruct the flow of the 'surface waters' on Comet avenue 'from flowing along the general slope of defendants' land lying west of said fence, by reason of the collection and accumulation of weeds, grass, debris, sand and silt lodging against the same, and diverting the natural flow of said surface water into and along said "Comet Avenue" and down to and upon the lands of plaintiffs'."
"The trial court also found that during the rainy season of 1936-1937, surface waters carried onto and deposited upon Comet avenue extending between defendants' parcels of land, and on the east one hundred fifty feet of the north two-thirds of their west parcel, large quantities of sand and silt; that this deposit ranged in depth between one and two feet; that defendants removed this sand and silt from Comet avenue, to the original surface of the ground with a width of from three to five feet, thereby creating an artificial channel in Comet *6 avenue; that through such channel 'a large portion of said surface waters flowed to and upon plaintiffs' said land in a manner and at points where it had not theretofore flowed, and carried with it large quantities of sand, silt and debris, depositing the same upon plaintiffs' said land; that said artificial channel or ditch together with said fence obstruction prevented said surface waters from flowing in a south and southwesterly direction across defendants' land along the general slope thereof'; that defendants 'threaten to continue to construct, dig and maintain said artificial ditch and channel' so that the 'surface waters' would continue to flow to and over defendants' [plaintiff's?] land to their serious damage. The trial court further found that the waters flowing from the channel on Comet avenue over plaintiffs' property were not flood waters; that part of those waters arose upon and came from three named sections of land; that none of those waters were flood waters which arose in the foothills north and east of Upland."
"The trial court further found that there had existed since time immemorial in Cucamonga valley a natural creek bed known as West Cucamonga creek which 'was a branch or a portion of the creek or stream of water running out of Cucamonga Canyon'; that at all times there was a continuous stream of water in the stream bed flowing out of Cucamonga canyon and that 'prior to 1916 a portion of the waters from said stream flowed down through that certain channel known as West Cucamonga Creek'."
" 'That in or about 1916 the waters from the stream flowing out of Cucamonga Canyon were artificially diverted and checked by dams and spread over large areas of land at the foot of the mountains, and that at all times since 1916 by reason of said artificial diversion, the waters of said stream no longer flow into the channel of West Cucamonga Creek, except infrequently in times of storm, and when the waters break over or out of the check dams in said spreading ground, or at such infrequent times as the waters are turned into said channel through flood gates."
" 'That said channel formerly carrying the waters of said West Cucamonga Creek, now exists upon the surface of the land as it has existed from time immemorial, but that there are no longer waters flowing in said channel, nor has there been since about 1916, except as hereinbefore found, and except *7 after rain periods, at which times a flow of water, originating largely from the rain waters falling on the streets of the City of Upland, and surrounding territory, by natural flow drain into said channel, and at which time said waters accumulate into a large body of water, and flow down through said channel to a point where said channel reaches Comet Avenue, extended north to the property of John G. Clock, which said point is approximately six miles south of the City of Upland and approximately one mile north of the lands of the defendants."
" 'That at the point where said channel intersects Comet Avenue upon the property of John G. Clock as aforesaid, the said stream originally flowed in a southwesterly direction. That since the year 1926, Comet Avenue, from said point of intersection southerly, has been cleared out and artificial dikes have been constructed from time to time along the sides thereof by the adjacent property owners southerly to the defendants' property, and that by the year 1935, all the waters flowing in said channel flowed directly south along Comet Avenue to the north boundary of the defendants' property which adjoins Schaefer Avenue on the south thereof."
" 'All of the waters so flowing in said channel, flow in a well-defined body from a point where they enter the said channel at or near the City of Upland, California, to the defendants' property, and that none of the said waters once having reached said channel escape therefrom from the time that they enter therein until they reach the intersection of Comet Avenue and the north line of the defendants' property. All of said waters, except such as are lost by percolation in the stream bed, flow in a continuous stream through said channel as aforesaid to the north line of defendants' said property, where said channel ceases to exist and such quantity of water as has flowed out of the end of said channel, has continued down Comet Avenue on the surface of the ground, for a short distance south of Schaefer Avenue and then spread out and flow southwesterly across defendants' said property, on the surface of the ground, following the natural slope of his said land."
" 'That no waters of any appreciable amount enter said stream south of the City of Upland, which said point is approximately six (6) miles distant from the lands of the defendants.' *8"
"The findings clearly show that West Cucamonga creek is a natural watercourse extending from the mouth of Cucamonga canyon southerly and southwesterly to its intersection with Comet avenue on the John G. Clock property; that during or prior to 1926 its southwesterly course from that point had been obstructed and the stream waters turned south on Comet avenue and that since 1926 Comet avenue has been developed by neighboring property owners into a stream bed one mile long, extending from West Cucamonga creek to the north line of defendants' property; that in 1937 the waters of West Cucamonga creek followed the natural stream bed to Comet avenue, and through Comet avenue to defendants' property where their confinement into a stream of water ended; that they then spread, joining with the surface waters originating on the three named sections, and did the damage complained of."
"There is no definite finding or conclusion of law that the waters were surface waters after they left the original stream bed of West Cucamonga creek or the confinement of the channel on Comet avenue, but the trial judge described them as surface waters, and his ultimate decision cannot be rationalized under any theory other than that he reached the conclusion that those waters were all surface waters when they reached the properties of the defendants. The sole question necessary for consideration here is the character of those waters. Were they surface waters, stream waters or flood waters? We are not concerned with vagrant waters as such waters are not mentioned in the findings or in the briefs."
[2] "West Cucamonga creek did not lose its character as a watercourse nor did its waters lose their character as stream waters after 1916, because the stream bed was dry for periods of time. (Cederburg v. Dutra, 3 Cal. App. 572 [86 P. 838].) It is thoroughly established in California that 'A constant flow of water is not essential to the existence of a watercourse.' (25 Cal.Jur. 1036, and cases cited.) It is sufficient if, during some seasons, water does in fact flow in the stream bed."
[3] "Surface waters are defined as waters falling upon and naturally spreading over lands. They may come from seasonal rains, melting snows, swamps or springs, or from all of them. Surface waters consist of surface drainage falling on or flowing from and over a tract or tracts of land before *9 such waters have found their way into a natural watercourse. (26 Cal.Jur., p. 279, and cases cited.)"
[4] "A stream is a watercourse having a source and terminus, banks and channel, through which waters flow, at least periodically. Streams usually empty into other streams, lakes, or the ocean, but a stream does not lose its character as a watercourse even though it may break up and disappear. (Hellman etc. Bank v. Southern Pacific Co., 190 Cal. 626 [214 P. 46].) Streams are usually formed by surface waters gathering together in one channel and flowing therein. The waters then lose their character as surface waters and become stream waters. (Lindblom v. Round Valley Water Co., 178 Cal. 450 [173 P. 994]; Horton v. Goodenough, 184 Cal. 451 [194 P. 34]; Gray v. Reclamation District No. 1500, 174 Cal. 622, at p. 650 [163 P. 1024].) As we have observed, a continuous flow of water is not necessary to constitute a stream and its waters stream waters. (San Gabriel Valley Country Club v. Los Angeles County, 182 Cal. 392 [188 P. 554, 9 L.R.A. 1200].)"
[5] "Flood waters are thus correctly described in 26 California Jurisprudence 280; 'Flood waters are distinguished from surface waters by the fact that the former have broken away from a stream, while the latter have not yet become part of a watercourse. The term "flood waters" is used to indicate waters which escape from a watercourse in great volume and flow over adjoining lands in no regular channel, though the fact that such errant waters make for themselves a temporary channel or follow some natural channel, gully or depression does not affect their character as flood waters or give to the course which they follow the character of a natural watercourse.'"
[6] "It is also thoroughly settled that flood waters escaping from a stream are not surface waters and do not lose their character as flood waters while flowing wild over the country. In Horton v. Goodenough, supra, it was said: 'The waters are plainly flood waters breaking out of their channel and running wild, and as such each property owner threatened has the right to protect himself against them as best he can, under the authority of the decisions we have already cited, the most notable of which is Lamb v. Reclamation District, 73 Cal. [125] 126 [2 Am. St. Rep. 775, 14 P. 625]. The waters are not surface waters in the technical sense, for they have *10 already been gathered into a stream whence they have escaped.'"
"A similar rule is announced in LeBrun v. Richards, 210 Cal. 308 [291 P. 825, 72 A.L.R. 336], with the added remark that 'Flood waters are those which escape from a stream or other body of water and overflow the adjacent territory.'"
"The rules governing the right to obstruct the flow of the three classes of waters with which we are here concerned are clearly set forth in Horton v. Goodenough, supra, as follows:"
[7] " 'First, one has no right to obstruct the flow on to his land of what are technically known as surface waters. (Heier v. Krull, 160 Cal. 441, and authorities cited at page 444 [117 P. 530].) But by surface waters are not meant any waters which may be on or moving across the surface of the land without being collected into a natural watercourse. They are confined to waters falling on the land by precipitation or rising thereon in springs. Putting it conversely, they do not include waters flowing out of a natural watercourse, but which yet were once a part of a stream and have escaped from it--flood waters, in other words. (McDaniel v. Cummings, 83 Cal. 515 [8 L.R.A. 575, 23 P. 795]; Farnham on Waters, sec. 278.) [8] Second, one has the right to protect himself against flood waters, that is, waters of the character last described, and for that purpose to obstruct their flow on to his land, and this even though such obstruction causes the water to flow on to the land of another. (Barnes v. Marshall, 68 Cal. 569 [10 P. 115]; Lamb v. Reclamation District, 73 Cal. [125] 126 [2 Am. St. Rep. 775, 14 P. 625]; De Baker v. Southern Cal. Ry. Co., 106 Cal. 257 [46 Am. St. Rep. 237, 39 P. 610]; Sanguinetti v. Pock, 136 Cal. 466 [89 Am. St. Rep. 169, 69 P. 98].) [9] Third, one may not obstruct or divert the flow of a natural watercourse. But by a watercourse is not meant the gathering of errant water while passing through a low depression, swale, or gully, but a stream in the real sense, with a definite channel with bed and banks, within which it flows at those times when the streams of the region habitually flow. (Los Angeles etc. Assn. v. Los Angeles, 103 Cal. [461] 466 [37 P. 375]; Sanguinetti v. Pock, supra; San Gabriel Valley Country Club v. Los Angeles County, 182 Cal. 392 [9 A.L.R. 1200, 188 P. 554]; Simmons v. Winters, 21 Or. 35 [28 Am. St. Rep. 727, 27 P. 7].)' *11"
[10] "When we apply these rules of law to the facts found by the trial court the following conclusions are inevitable: (1) West Cucamonga creek is a watercourse and the water flowing in it constitutes a stream; (2) The surface waters running off from Upland and vicinity become stream waters when they gather in West Cucamonga creek; (3) When the stream waters of West Cucamonga creek leave its watercourse in times of flood they become storm waters; (4) Those waters remain storm waters when running wild over the adjacent country."
[11] "It makes no difference in the ultimate decision of this case, on the facts found, whether we do or do not regard the man-made channel on Comet avenue as a part of West Cucamonga creek and a watercourse. The facts found are not sufficient to determine that question. We will therefore assume that it was not a watercourse. The flood waters escaped from the original channel of the West Cucamonga creek at the John G. Clock property. They then became flood waters, the common enemy against which threatened property owners had the right to protect themselves. Those flood waters followed the man-made channel to the lands of defendants. On leaving that man-made channel they remained flood waters. Defendants had the right to protect their property against those flood waters even to the damage of plaintiffs, their lower neighbors. There is no finding that what defendants did to protect their property was improperly done. It follows that in so far as the judgment enjoins defendants from properly protecting their property from the waters escaping from West Cucamonga creek through the channel on Comet avenue, it cannot be sustained."
[12] "The trial court, however, found that part of the damage to plaintiffs' property was caused by the obstruction of the flow of the surface waters originating on three named sections. This defendants had no right to do. (Switzer v. Yunt, 5 Cal. App. 2d 71 [41 PaCal.2d 974].) At another trial this phase of the case should be considered under the rules announced in Sanguinetti v. Pock, 136 Cal. 466 [69 P. 98, 89 Am. St. Rep. 169]."
"Plaintiffs rely on such cases as Thomson v. La Fetra, 180 Cal. 771 [183 P. 152], Larrabee v. Cloverdale, 131 Cal. 96 [63 P. 143], Board of Trustees v. Rodley, 38 Cal. App. 563 [177 P. 175], and Jaxon v. Clapp, 45 Cal. App. 214 [187 *12 P. 69]. These cases have only to do with the obstruction of the natural flow of surface waters. They cannot be controlling where, as here, we are principally concerned with the flow of flood waters."
[13] "Plaintiffs also urge that the waters which flooded their property cannot be classified as flood waters because they did not escape over the banks of West Cucamonga creek during a period of great storms, but, either through an opening at the end of the creek, or through the end of the man-made channel on Comet avenue."
"We are not impressed with this argument. As we have already seen, stream waters escaping from the channel of a watercourse during periods of great storms become flood waters. That they cannot fall within any accepted definition of surface waters is clear whether they escape over the stream banks or at the end of the channel. Therefore, they are not surface waters. That they are not stream waters when they leave the channel is fully settled by the cases already cited. By this process of elimination we are forced to the conclusion that the waters which escaped from West Cucamonga creek could have been only flood waters. We are fortified in this conclusion by Sanguinetti v. Pock, supra, where it was held that storm waters which filled a natural swale, not a watercourse, retained the character of flood waters. A property owner may protect his property from overflow from flood waters."
[14] "If we understand the effect of the judgment correctly, defendants are permanently restrained from removing the deposit of sand and silt which was precipitated by the storm waters onto Comet avenue and the northeasterly portion of their westerly tract of land thereby raising the natural grade between one and two feet. We know of no rule of law that would sustain such an order preventing property owners from removing such a foreign deposit and restoring the surface of their lands to their natural grades."
The judgment is reversed.
CARTER, J.,
Dissenting.
I dissent.
By adopting the opinion of the District Court of Appeal in this case, a majority of this court has held, that waters which constitute the natural and normal flow of a stream, when artificially diverted from said stream, and conveyed a distance *13 of over a mile away from said stream by means of an artificial watercourse, then become flood waters, and that an owner of land affected thereby has the right to discharge such waters upon the land of his neighbor with such destructive force as to cause irreparable damage to the latter, and that a person so damaged has no recourse either by injunction or an action for damages.
I cannot subscribe to such a doctrine. It is obviously unsound. It is unsupported by any decided cases either in this or other jurisdictions. It is predicated upon a misconception of the doctrine of damnum absque injuria as applied to the facts found by the trial court in this case.
The majority opinion correctly states that this appeal is before us on the judgment roll alone. Therefore, we must look to the pleadings and the findings of the trial court exclusively for the determination of the issues involved.
The trial court found in substance that West Cucamonga Creek is a natural stream or watercourse rising at the base of the mountains north of the city of Upland in San Bernardino County and flows in a general southwesterly direction; that at a point about six miles south of the city of Upland on the property of John G. Clock during the year 1926 by artificial means the waters naturally flowing in said stream were diverted therefrom in a southerly direction into an artificial watercourse constructed on a strip of land twenty feet wide known as "Comet Avenue"; that this watercourse was extended from time to time a distance of about one mile in a southerly direction to the property of defendants or to what is known as Schaefer Avenue at the north boundary of defendants' property, and there said waters were permitted to spread out over defendants' land and were not confined in any channel or watercourse; that this condition existed until the rainy season of the years 1936-1937; that thereafter the defendants dug a ditch upon and in said Comet Avenue where the same extended through defendants' property and extended said ditch or channel to the property of plaintiffs. Defendants also placed a fence along the west boundary line of Comet Avenue extending from the north boundary to the south boundary of defendants' property which fence was for the purpose of and did tend to obstruct the flow of the waters from said Comet Avenue upon the lands of defendants and to confine the same within said Comet Avenue and the artificial *14 ditch or channel constructed therein; that as a result of the construction and extension of said artificial channel by defendants, the said waters, sand and debris were confined therein and cast in large quantities upon the land of plaintiffs immediately to the south thereof; that the construction and maintenance of said artificial channel or ditch by the defendants and the precipitation of said waters, sand and debris therefrom upon the land of plaintiffs, did damage to plaintiffs' said land; that such waters, sand and debris had never theretofore flowed upon the lands of plaintiffs, except such portion of the water as might flow southwesterly upon the surface of the ground over the southwest portion of plaintiffs' property.
The court expressly found that all of the water discharging on and over defendants' land was surface water, and that none of the waters which flowed on or over defendants' land were flood waters.
The court also expressly found that the ditch or channel extending from West Cucamonga Creek on the John G. Clock property to defendants' property was not a natural watercourse.
The court also found that all of the water flowing in West Cucamonga Creek to the point where it was diverted on the John G. Clock property, was confined within the channel of said creek and that after the diversion of said waters into the ditch or canal constructed on Comet Avenue, the same were confined therein.
There is no finding that there was any excessive or extraordinary flow of water in said creek or that the water flowing therein was anything other than the natural and normal flow which usually and customarily flowed therein.
Before proceeding further, I will quote the exact language of the findings of the trial court:
"That said channel formerly carrying the waters of said West Cucamonga Creek, now exists upon the surface of the land as it has existed from time immemorial, ..."
"That at the point where said channel intersects Comet Avenue upon the property of John G. Clock as aforesaid, the said stream originally flowed in a southwesterly direction. That since the year 1926, Comet Avenue, from said point of intersection southerly, has been cleared out and artificial dikes have been constructed from time to time along the sides *15 thereof by the adjacent property owners southerly to the defendants' property, and that by the year 1935, all the waters flowing in said channel have flowed directly south along Comet Avenue to the north boundary of the defendants' property which adjoins Schaefer Avenue on the south thereof."
It is clear from the foregoing findings that had said waters not been diverted from West Cucamonga Creek by artificial means into Comet Avenue, said waters would have continued to flow on down the channel of West Cucamonga Creek in a southwesterly direction and none of said waters would ever have reached the property of either defendants or plaintiffs.
The court further found:
"All of the waters so flowing in said channel, flow in a well-defined body from a point where they enter the said channel at or near the city of Upland, California, to the defendants' property, and that none of the said waters once having reached said channel escape therefrom from the time that they enter therein until they reach the intersection of Comet Avenue and the north line of defendants' property. All of said waters, except such as are lost by percolation in the streambed, flow in a continuous stream through said channel as aforesaid to the north line of defendants' said property, where said channel ceases to exist, and such quantities of water as has flowed out of the end of said channel, has continued down Comet Avenue on the surface of the ground for a short distance south of Schaefer Avenue and then spread out and flow southwesterly across defendants' said property, on the surface of the ground, following the natural slope of his said land."
Thus, it appears from the findings of the trial court that the waters in question at no point or place overflowed the banks of West Cucamonga Creek or the banks of the artificial channel constructed in Comet Avenue, but when said waters reached the end of said artificial channel, they simply spread out and flowed over the surface of the land in a southwesterly direction in accordance with the natural slope thereof.
In view of the foregoing findings, there is no basis whatever for the conclusion reached by the majority of this court in the opinion approved by it, that the waters which defendants caused to discharge and flow upon plaintiffs' property with destructive force constituted flood waters to which the rule applicable to waters which are a "common enemy" can *16 be invoked by defendants in order to relieve themselves of liability to plaintiffs for the damage caused to the latter's land as the result of the acts of said defendants in causing the discharge of such waters upon plaintiffs' land with such destructive force that it resulted in the damage thereto found by the trial court to have been caused thereby.
Notwithstanding the finding of the above and foregoing facts by the trial court, the opinion adopted by the majority of this court is based upon the erroneous assumption that the waters overflowed or escaped from the natural creek bed or channel upon the property of John G. Clock, and thus became flood waters; that thereafter, each property owner to the south constructed an artificial channel on Comet Avenue to control such flood waters and to protect his or her property from such flood waters until the channel arrived at the north boundary of defendants' property; that such waters, upon arriving at the north boundary of defendants' property, continued to be flood waters, and for that reason, defendant had the legal right to extend said artificial channel upon and along Comet Avenue and cast such waters upon the land of plaintiffs. It is obvious that the conclusion reached in said opinion is based upon the erroneous assumption that the waters of West Cucamonga Creek which constituted the natural and normal flow of said creek overflowed the natural banks of said creek upon arriving at the property of John G. Clock and thereafter became flood waters. As stated above, this assumption is directly contrary to the express findings of the trial court to the effect that the waters of said creek were diverted therefrom on to the property of said John G. Clock by artificial means into an artificial channel constructed on and along Comet Avenue, which channel was from time to time extended in a southerly direction to the lands of defendants and by defendants extended to the lands of plaintiffs.
The opinion adopted by the majority of this court concludes with the erroneous assumption that because the waters in question were once confined within the channel of West Cucamonga Creek they could not be classified as surface waters thereafter and that since these waters were the result of a storm and escaped from the natural channel of West Cucamonga Creek, they could not be classified as stream waters, and must therefore be classified as flood waters. This conclusion is clearly erroneous, because it fails to take into consideration the *17 facts found by the court that these waters were diverted by artificial means from West Cucamonga Creek on the John G. Clock property and conveyed in an artificial and man-constructed channel to defendants' property where the same were permitted to spread out over defendants' land until they saw fit to extend the artificial channel on Comet Avenue through their property to plaintiffs' land.
While the factual situation as disclosed by the findings of the trial court may not be such as to support the conclusion reached by the trial court that the waters flowing in the artificial channel on Comet Avenue became surface waters when the same spread out over defendants' land, such factual situation clearly does not support the conclusion reached in the opinion of the majority of this court that such waters thereby became flood waters or enemy waters which the defendants were entitled to use any means available to divert away from their land notwithstanding such diversion might result in damage to the lands of defendants' neighbors onto which such waters were discharged with such destructive force that such lands were damaged thereby.
It is obvious that so long as the waters in question were confined in the natural channel of West Cucamonga Creek, they constituted stream waters regardless of the source from which they emanated. After their diversion into the artificial channel constructed in Comet Avenue, they remained stream waters but the rules of law applicable to waters flowing in a natural stream or watercourse cease to be applicable to such waters after the same were diverted by artificial means from said stream.
If the citation of authority were necessary to support the position of the plaintiffs in this action, the case of Thomson v. La Fetra, 180 Cal. 771 [183 P. 152], furnishes ample authority for the conclusion reached by the trial court that plaintiffs are entitled to injunctive relief to protect their property against the continued discharge of such waters thereon. The factual situation in that case is quite similar to that in the case at bar.
In that case this court held that waters flowing in a natural watercourse which are diverted and discharged by artificial means onto adjacent land could not be classified as flood waters and that the rule applicable to waters which are a "common *18 enemy" could not be invoked under the factual situation there found to exist. In that case this court said:
"That rule has application only to flood waters in the strict sense, that is to say, to waters escaping because of their height from the confinement of a stream and running over the adjacent country. The waters here involved are not of that sort."
"The water not being in any sense flood water, the defendants, by changing its course and casting it upon the lands of the plaintiff, were guilty of a trespass. The fact that the water may have threatened injury to the defendants affords no justification or excuse to palliate the wrong done. If the injury threatened to the defendants' lands was the result of wrongful artificial changes made by upper proprietors, resulting in an increased, accelerated, or concentrated flow of water upon and across the lands of the defendants, their remedy was to proceed by appropriate action against the wrong-doers to enjoin such changes or to have the nuisance abated, and not by an attempt to shift the burden of the wrong upon an innocent third party who but for their intervening willful act would have suffered no injury at all. (Larrabee v. Cloverdale, 131 Cal. 96 [63 P. 143]; Castle v. Reeburgh [75 Okl. 22] 181 P. 297.)"
"The damage suffered by the plaintiff not having resulted from a lawful act, it cannot be considered damnum absque injuria. The view which we have taken of the case makes it unnecessary for us to discuss and decide the plaintiff's contention that the upper proprietors had acquired a prescriptive right to have the water in question carried off over the defendants' lands."
In view of the inevitable conclusion that the waters which defendants caused to be discharged upon plaintiffs' lands were not flood waters and that the rule applicable to waters which are a "common enemy" cannot be invoked by defendants under the facts found by the trial court, I am of the opinion that the judgment of the trial court should be affirmed. *19
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/1313953/
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287 Wis.2d 102 (2006)
2006 WI 6
708 N.W.2d 690
IN the MATTER OF DISCIPLINARY PROCEEDINGS AGAINST Eric Leighton CRANDALL, Attorney at Law:
OFFICE OF LAWYER REGULATION, Complainant,
v.
Eric Leighton CRANDALL, Respondent.
No. 2005AP2568-D.
Supreme Court of Wisconsin.
Decided January 20, 2006.
*103 The Court entered the following order on this date:
The Office of Lawyer Regulation (OLR) has filed a complaint asking this court, pursuant to SCR 22.22, to suspend Attorney Eric Leighton Crandall's license to practice law in Wisconsin for a period of 90 days as discipline reciprocal to that imposed upon Attorney Crandall in Minnesota.
Attorney Crandall was admitted to practice law in Wisconsin in 1991. He was admitted to practice law in Minnesota in 1988.
On July 28, 2005, the Minnesota Supreme Court ordered that Attorney Crandall be indefinitely suspended from the practice of law, with the right to seek reinstatement after three months, for professional misconduct consisting of neglecting client matters, failing to appear at his clients' court hearings, failing to comply with the rules of discovery, and failing to cooperate fully with the Director of the Office of Lawyers Professional Responsibility. The OLR's complaint alleges that by virtue of having received public discipline imposed by the Minnesota Supreme Court for his violation of the Minnesota Rules of Professional Conduct, Attorney Crandall is subject to reciprocal discipline in Wisconsin pursuant to SCR 22.22. The complaint also alleges that by failing to notify the OLR of the suspension of his Minnesota law license within 20 days of the effective date of that jurisdiction's imposition of a suspension for professional misconduct, Attorney Crandall violated SCR 22.22(1).
SCR 22.22(3) provides that this court shall impose the identical discipline or license suspension unless the procedure in the other jurisdiction was so lacking in *104 notice or opportunity to be heard as to constitute a due process violation; there was such an infirmity of proof establishing the misconduct that this court could not accept as final the misconduct finding; or the misconduct justifies substantially different discipline here.
Attorney Crandall filed a letter response to the OLR's complaint on November 29, 2005 stating two reasons why he believes reciprocal discipline to be inappropriate. First, he says the punishment imposed by the Minnesota Supreme Court exceeds the punishment that the court would impose under similar circumstances. He says, "Three months suspension for essentially missing three court appearances is excessive. Additionally two of the seven Minnesota Supreme Court Justices disagreed with the length of the suspension." (Two justices would have allowed Attorney Crandall to seek reinstatement after two months.) Second, Attorney Crandall says he does not believe it is appropriate for this court to impose discipline for acts or omissions outside the state's borders.
None of the three exceptions set forth in SCR 22.22(3) for imposing reciprocal discipline exists here. The documents relating to the Minnesota disciplinary action that are attached to the OLR's complaint indicate that Attorney Crandall had the opportunity to be heard in the Minnesota action. There is no showing that there was such an infirmity of proof establishing the misconduct that this court could not accept as final the misconduct findings made by the Minnesota Supreme court. While Attorney Crandall argues that the misconduct justifies substantially different discipline in Wisconsin, it appears that a 90-day suspension of an attorney's license is consistent with what would be imposed on Wisconsin lawyers for similar misconduct. *105 We conclude that it is appropriate to impose reciprocal discipline to that imposed by the Minnesota Supreme Court.
IT IS ORDERED that the license of Attorney Eric Leighton Crandall to practice law in Wisconsin is suspended for three months, effective February 20, 2006, and until the further order of this court;
IT IS FURTHER ORDERED that Attorney Crandall shall comply with the provisions of SCR 22.26 concerning the duties of a person whose license to practice law in Wisconsin has been suspended.
*106
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01-03-2023
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10-30-2013
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